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Query relating to secretarial audit and independent director

Sumit Jaiswal (Company Secretary) (818 Points)

05 May 2014

Can someone please answer the following two query of mine:

1. Section 150(2) of Companies Act 2013 says the appointment of independent director shall be approved by the company in general meeting. The question is whether independent director can now be appointed only in general meeting OR board may appoint independent director as additional director who may get regularised in general meeting?

2. Suppose a Company is required to appoint Secretarial Auditor in terms of section 204 of the Companies Act 2013. When should the secretarial auditor be appointed for the financial year 2014-15. Should the secretarial auditor be appointed in the forthcoming board meeting or the appointment can be made at any time of the year, even after the end of financial year?

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2 Replies

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 05 May 2014

1. Board can appoint additional independent director subject to approval of members in general meeting. Refer Nestle India AGM notice:

https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CDMQFjAB&url=http%3A%2F%2Fwww.nestle.in%2Finvestors%2Fstockandfinancials%2Fdocuments%2Fnestle-india-noticeforagm-55th-2014.pdf&ei=4m9nU-2mG5KIuATVmYKwAQ&usg=AFQjCNHsb2aQkZbTluOlM4giu3eedUCgeg&sig2=RpWElxj5FkIR8DPfNbUtUg

2. It would be advisable to appoint secretarial auditor at the earliest without waiting to end of year since audit should be a continuous process and is not one time activity. Secretarial auditor should have access to all secretarial records during the year and should be in a position to give his suggestions for improvements, if any.

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Sumit Jaiswal (Company Secretary) (818 Points)
Replied 05 May 2014

Thank you P C Agrawal Sir for your reply. Please clarify 1 more thing with respect to query no. 1. After going through the Nestle India AGM notice, I understand that the directors who are being appointed as independent director were already a director of the Company before commencement of section 150 of the Companies Act 2013 i.e. before 1st April 2014. If a Company have to appoint an independent director today, can the same be done i.e. independent director can be appointed as as additional director in board meeting and then regularied at AGM? Kindly reply.