07 March 2017
As per section 2014 of the companies act , every listed company and every public company having paid up share capital of 50 crore rupees or more or turnover of 250 crore rupees or more shall annex with Board report , a secretarial audit report. Secretarial audit report shall be for the period of previous financial year. Board report prepared in Month september 2016 , the secretarial audit report shall be for the year as on 31st March 2016
07 March 2017
Secretarial Audit report will certainly be for the previous financial year but my query was when section 204 will be applicable to the Company for the F.Y. 2015-16?.Will it be on the basis of Company's turnover and paid-up capital as on 1st April 2015 or as on 31st March,2016?
08 March 2017
Co's turnover and paid up capital for F.Y 2015-16 has to be considered for issuing Secretarial Audit Report for F.Y 2015-16 because neither in rule 9(a) / (b) of Companies ( Appointment & Remuneration of Managerial Personnel) Rules,2014 nor in section 204 no mention is made for a different year.
08 March 2017
Applicability of Secretarial Audit Section 204 of the Companies Act, 2013 provides for mandatory secretarial audit for every listed company and companies belonging to other prescribed class of companies. Such company is required to annex a secretarial audit report with its Board’s report. As per rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the prescribed class of companies is as under: (a) every public company having a paid-up share capital of fifty crore rupees or more; or (b) every public company having a turnover of two hundred fifty crore rupees or more. The term ‘Turnover’ has been defined in section 2(91) as the aggregate value of the realization of amount made from the sale, supply or distribution of goods or on account of services rendered, or both, by the company during a financial year. Turnover has been referred to as “during a financial year”-however a financial year cannot be taken to mean a financial year anytime in history. Therefore, I am of the view that for the purpose of this section the immediately preceding, financial statement of which is available should be referred for determining the turnover. The section cannot be applied based on expected turnover-hence; there is a look back to the turnover of financial year, whose statement is available. Thus as on 1st April, 2015 when the section applies, the reference will be to turnover as per the financial statements of 2014-15.
08 March 2017
In this matter, i don't think that such an extended meaning has to be given for 'a financial year'. If the intention of the legislature was as you said, they should have drafted as 'previous financial year' either in the cited section or in the rules or they have clarified as did by the proposed amendment in section 2(85)(ii) through the Companies (Amendment ) Bill 2016. The amendments made in the rules vide notifications dated 9-6-2014 and 30-6-2016 and the proposed amendment in section 2(91) in the Companies (Amendment) Bill.2016 also did not touch 'a financial year' Till then, I go with my humble observation.
08 March 2017
Please see the clarification given regarding meaning of the words"during any financial year" by Mr.Vinod Kothari in the book titled understanding Companies Act,2014 in page 255.I am of the view that same logic will be applicable here also.
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