The Hindu Business Line : ICSI for making secretarial standards must for listed cos

The institute has suggested to the Ministry of Company Affairs to make secretarial standards compulsory for all listed entities and recommendatory for the rest.

Talking to Business Line, Mr Mahesh Anant Athavale, President, ICSI, said, "These secretarial standards are aimed at ensuring uniformity and consistency of secretarial practices in the corporate sector."

Further, for the purpose of ensuring compliances of various regulations, the institute has suggested to the Government that companies may be divided into three categories. While the companies with a paid-up capital of up to Rs 5 lakh fell in the first category, those with a paid-up capital of more than Rs 5 lakh but below Rs 2 crore belonged to the next category. All listed public companies along with those having a turnover of Rs 25 crore and above belonged to the third and final category.

Explaining the rationale behind creating such categories, he said, currently a company with a small paid-up capital of up to Rs 5 lakh is required to file a number of returns with the Registrar of Companies (RoCs).

"These requirements are at par with all other companies. This puts a lot of strain on these companies which have little element of public interest," Mr Athavale said.

To rid these companies from the burden of excessive compliances, the institute has suggested that they should be required to file only one return on an annual basis covering changes such as directors, members, and capital structure.

"This return should be checked and authenticated by a Company Secretary in wholetime practice and once filed should be straightway taken on record by RoCs. It will substantially reduce paper work at the RoC offices," he pointed out.

Commenting on the third category of companies, he stated that at present the auditors give an audit report, which is a part of the board's report. Such report deals with compliances of accounting and financial statements, but there is no requirement of report on legal compliances.

"We have proposed that a Compliance Audit Report to be issued by a CS in wholetime practice may be introduced in respect of such companies where public interest is involved," he emphasised.

This category of companies would include listed entities, those with turnover of Rs 25 crore and above, companies which have accepted public deposits, and companies that have outstanding loan of Rs 1 crore or more towards banks and public financial institutions, Mr Athavale explained.

Further, the Compliance Audit Report should be made part of the Board's report.