ICSI moots detailed secretarial audit for private companies

COIMBATORE: The Institute of Company Secretaries of India (ICSI) has urged the Ministry of Corporate Affairs (MCA) to bring private limited companies under the ambit of secretarial audit under the new Companies Act. Private companies should also be mandated to have key managerial personnel like chief financial officers and company secretaries.
Under the new Companies Act, private companies have been excluded from the audit and need not compulsorily appoint key managerial personnel (KMPs).
“Private limited companies should also be included in the secretarial audit. We have advised the MCA about the need to have KMPs in private companies,” said R Sridharan, president, ICSI. All companies with a capital of Rs. 5 crore and above are required to have KMPs under the previous Companies Act, he said. Secretarial audit would focus only on the non-finance aspects in a company and would in no way overlap with the regular financial audit, he said.
“There is no bifurcation between public limited and private limited companies in the Companies Act. The penalties are the same. KMPs are needed to ensure the focus on governance and compliance,” Sridharan said. About 5,000 listed companies have been now asked to mandatorily appoint KMPs, he said. In all, nearly 20,000 companies should appoint KMPs now.
The ICSI has decided to begin a three-year full-time integrated company secretaryship course on a pilot basis from July. The integrated course would have 50 students selected through a rigorous entrance exam, followed by a group discussion and an interview.