Nomenclature of Secretarial Audit under SEBI Circular changed to ‘Reconciliation of Share Capital Audit’
As you are aware, Regulation 55A of the SEBI (Depositories and Participants) Regulations, 1996 necessitate every issuer to submit audit report on a quarterly basis to the stock exchanges audited by a practicing company secretary or qualified chartered accountant, for the purpose of reconciliation of share capital held in depositories and in physical form with the issued / listed capital.
In practical parlance, the terminology used for the said audit was ’Secretarial Audit’ in the light of SEBI Circular No. D&CC/FITTC/CIR-16/2002 dated December, 31, 2002.
The term Secretarial Audit, however, encompasses a wider area pertaining to examination of corporate and secretarial records of the company and cannot be restricted to merely audit for reconciliation of share capital. Corporate Governance Voluntary Guidelines 2009 issued by the Ministry of Corporate Affairs also advises the companies to get Secretarial Audit conducted by a competent professional.
Accordingly, the matter was taken up with SEBI for changing the nomenclature of Secretarial Audit to avoid the confusion amongst corporates and professionals on the scope of Secretarial audit.
We are pleased to share with you that SEBI, vide its circular CIR/MRD/DP/30/2010 dated September 06, 2010, has modified the terminology ‘Secretarial Audit’ as mentioned in its circular dated December 31, 2002 to ‘Reconciliation of Share Capital Audit’.
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