The Hindu Business Line : `Concept paper slips on company secretary for special audit'

THE fresh attempt by the Ministry for Company Affairs to revamp and simplify the Company Law at first seems to have been well-received by the company secretary professionals.

However, the slip given to the profession for the purposes of special audit, according to sources, "appears to be a miss on the part of the authors of the paper."

According to company secretary professionals, "The profession found a mention in the Companies (Amendment) Bill, 2003 (which was later withdrawn) along with chartered accountants and cost auditors to be appointed as a special auditor in cases where the Central Government feels that the affairs of the company is not being managed in accordance with sound business principles. However, in the concept paper only chartered accountants and cost accountants find a mention."

The company secretary professionals would definitely like to raise the same with the Government, sources told Business Line adding that, "Besides, till the rules are not formed it would be very difficult to gauge the actual impact of the provisions. Although the Act has been compressed the law may continue to be voluminous with the number of rules."

Further, the concept paper also proposes that the Government would prescribe the functions of a company secretary in whole-time employment. Currently, it is the board of a company, which prescribes the functions.

Regarding the proposed pre-certification of documents by the professionals and power of the Union Government to direct secretarial audit in certain cases, the professionals felt that this would certainly create more jobs for the profession. In fact, this is something the Institute of Company Secretaries of India (ICSI) has been asking for.

The concept paper also proposes that all documents, returns, and forms required to be filed with the Registrar of Companies (RoC) or any statutory authority would be pre-certified by a company secretary in whole-time practice in such form and manner, as may be prescribed by the Central Government. "This will help in reducing the burden on the RoCs and create a better compliance regime," source said.

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