What is a Secretarial Audit?
A Secretarial Audit is an independent professional assessment of a company’s compliance with applicable laws, rules, regulations, and guidelines. It is conducted by a Practicing Company Secretary (PCS) and reported in Form MR-3.
Applicability Under Section 204
Secretarial Audit is mandatory for:
- Every listed company
- Every public company with paid-up share capital ≥₹50 crore
- Every public company with turnover ≥₹250 crore
- Every company having outstanding loans/borrowings from banks ≥₹100 crore
Scope of Secretarial Audit
The audit covers compliance with:
- Companies Act, 2013 and rules
- Securities Contracts (Regulation) Act, 1956
- Depositories Act, 1996
- FEMA (Foreign Exchange Management Act)
- SEBI regulations (for listed companies)
- Industry-specific laws
The Audit Process
- Engagement: Appointment of PCS by the Board
- Planning: Understanding company operations and risk areas
- Execution: Review of statutory records, minutes, filings
- Reporting: Issue of Secretarial Audit Report in Form MR-3
- Follow-up: Recommendations for compliance improvements
Form MR-3 Report
The report must state whether the company has complied with all applicable laws and highlight any qualifications, reservations, or adverse remarks. It is attached to the Board’s Report.
Benefits of Secretarial Audit
- Identifies compliance gaps before regulatory action
- Improves corporate governance standards
- Builds stakeholder confidence
- Reduces risk of penalties and prosecutions
- Enhances company reputation
How We Help
Deepa Sharma & Associates provides comprehensive secretarial audit services covering Companies Act, SEBI regulations, FEMA, and other applicable laws. Our detailed reports help companies achieve and maintain compliance excellence.