Sameer has been co-opted as a non-executive director of a large manufacturing company and has to attend his first Board meeting. He has requested the Chairman of the company to provide him the basic information with rega

Answer 1A(ii)(a) The major beneficiaries of Secretarial Audit include: Promoters Secretarial Audit will assure the Promoters of a company that those in-charge of its management are conducting its affairs in accordance with requirements of laws. Management Secretarial Audit will assure the Management of a company that those who are entrusted with the duty and responsibility of compliance are performing their role effectively and efficiently. This also helps the management to establish benchmarks for the compliance mechanism, review and improve the compliances on a continuing basis. Non-executive directors Secretarial Audit will provide comfort to the Non-executive Directors that appropriate mechanisms and processes are in place to ensure compliance with laws applicable to the company, thus mitigating any risk from a regulatory or governance perspective; so that the Directors not in-charge of the day-to-day management of the company are not likely to be exposed to penal or other liability on account of non-compliance with law. Government authorities/regulators Being a pro-active measure, Secretarial Audit facilitates reducing the burden of the law-enforcement authorities and promotes governance and the level of compliance. Investors Secretarial Audit will inform the investors whether the company is conducting its affairs within the applicable legal framework. Financial Institutions, Banks, Creditors and Consumers are enabled to measure the law abiding nature of Company management. Answer 1A(ii)(b) Secretarial Audit on a continuous basis would help the company in initiating corrective measures and strengthening its compliance mechanism and processes. It is recommended that the Secretarial Audit be carried out periodically (quarterly/half yearly) and adverse findings if any, be communicated to the Board for corrective action. A monthly report on Secretarial Audit may be circulated along with MIS Reports for timely remedial action, though the mandatory Secretarial Audit for certain companies is held once a year.