Aroma Private Ltd. with paid-up capital of ₹ 60 Lakh is a subsidiary of Ayurvedic Ltd., a public company having a paid-up capital of ₹ 40 crore and turnover of ₹ 35 crore. During a Board meeting, Ram, one of the Director

Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 provides for mandatory Secretarial Audit for every listed company and such prescribed class of companies as mentioned below: Every public company having a paid-up share capital of Fifty crore rupees or more; or Every public company having a turnover of Two Hundred Fifty crore rupees 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. Hence, as company secretary, I will advise the board of Aroma Private Ltd. that the company is not compulsorily required to present the Secretarial Audit Report to the board and annex the same with Board Report of the company, because paid up share capital of Aroma Limited and turnover and paid up share capital of Ayurvedic Limited are below the limits specified in Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. However, the companies which are not covered under section 204 may obtain Secretarial Audit Report voluntarily as it provides an independent assurance of the compliances of applicable laws of the company.