Chief Financial Officer (CFO) of a conglomerate is of the view that secretarial audit is mandatory for all the companies. He has approached you to determine whether secretarial audit is applicable in case of the followin

Considering the increasing importance of Corporate Governance, Section 204 of the Companies Act, 2013 mandates every listed company and such other class of prescribed companies to annex a Secretarial Audit Report, given by a Company Secretary in practice in Form MR-3 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: every public company having a paid-up share capital of ₹ 50 Crore or more; or every public company having a turnover of ₹ 250 crore or more; or every company having outstanding loans or borrowings from banks or public financial institutions of ₹ 100 crore or more. Secretarial Audit is also applicable to a private company which is a subsidiary of a public company, and which falls under the prescribed class of companies as indicated above. In light of the above provisions, applicability is given in the table below: Name of the Company Applicability of Secretarial Audit Reason Helo Ltd. Yes Secretarial audit is applicable to every listed company. Jam Ltd. Yes Turnover exceeds the prescribed limit. Butter Pvt. Ltd. No Though it is a subsidiary of a public company, yet it does not fall under the prescribed threshold limit.