A senior government official said the government is likely to make it mandatory for private companies with outstanding debts to undergo a secretarial audit.
Presently, as per the Companies Act, all listed companies are required to provide a secretarial audit report annually.
At the 51st foundation day of the Institute of Company Secretaries of India, Corporate Affairs Secretary Injeti Srinivas said, “Mandatory secretarial audit is right now restricted to listed companies, but I think it may have to get extended to private companies which have outstanding debts beyond a threshold.”
Further, President Kovind said that companies and stakeholders must understand the difference between profit and profiteering as well as foster responsible business and balance economic objectives with larger socio-economic goals.
Earlier in February also, the Securities and Exchange Board of India (SEBI) had said that a mandatory secretarial audit and an annual secretarial compliance report must be filed by a practicing company secretary as part of disclosure requirements for listed entities.
Transparency, accountability, integrity and fairness are the four pillars of corporate governance. Kovind stressed that company secretaries should responsibly determine how these principles are put into practice.
However, it is considering that it might be necessary for the companies who have borrowed heavily amount from banks.