Secretarial Audit is an independent and objective assurance mechanism mandated under Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. It is a process of verifying whether a company has complied with the provisions of various corporate laws, rules, regulations, and guidelines.
The Secretarial Audit Report is issued in Form MR-3 by a Practicing Company Secretary (PCS) and is attached to the Board's Report of the company. It provides stakeholders with an independent opinion on the company's compliance status.
At Deepa Sharma & Associates, our qualified PCS conducts thorough secretarial audits, identifying compliance gaps and providing actionable recommendations to strengthen your governance framework.
Every company whose securities are listed on a recognized stock exchange in India is required to obtain a Secretarial Audit Report.
Every public company having a paid-up share capital of ₹50 crore or more, OR a turnover of ₹250 crore or more.
Every private company having a paid-up share capital of ₹50 crore or more, OR a turnover of ₹250 crore or more (as per Companies Amendment Rules, 2020).
Every subsidiary of a listed company that falls under the prescribed threshold of paid-up capital or turnover criteria.
Identifies non-compliances and potential risks before they escalate into penalties or regulatory actions.
Helps improve corporate governance practices and internal processes through expert recommendations.
Provides assurance to shareholders, investors, and regulators about the company's compliance status.
Timely identification and rectification of lapses helps avoid hefty penalties and prosecution under the Act.
A clean secretarial audit report facilitates smoother due diligence during fundraising, M&A, or IPO processes.
Ensures the Board is aware of its obligations and promotes a culture of compliance within the organization.
The Secretarial Audit can only be conducted by a Practicing Company Secretary (PCS) — a member of the Institute of Company Secretaries of India (ICSI) holding a Certificate of Practice.
The PCS must be independent and should not have any pecuniary relationship with the company other than the audit fee. The appointment is made by the Board of Directors through a Board Resolution.
The Secretarial Audit Report is issued in Form MR-3 as prescribed under the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The report must be annexed to the Board's Report filed with the Registrar of Companies.
If a company fails to get a Secretarial Audit conducted:
No, Secretarial Audit is mandatory only for listed companies, public companies with paid-up capital ≥ ₹50 crore or turnover ≥ ₹250 crore, and private companies meeting the same thresholds. However, any company can voluntarily get a Secretarial Audit conducted for better governance.
Statutory Audit (conducted by a Chartered Accountant) focuses on financial statements and accounting records. Secretarial Audit (conducted by a PCS) focuses on compliance with corporate laws, board processes, statutory filings, and governance practices. Both serve different but complementary purposes.
The Secretarial Audit Report (Form MR-3) must be annexed to the Board's Report, which is filed as part of the Annual Return with the ROC. It should be completed before the Board meeting that approves the annual financial statements.
Yes, there is no mandatory rotation requirement for the Secretarial Auditor under the Companies Act. However, for listed companies, SEBI guidelines may recommend periodic rotation. The Board re-appoints the auditor each year through a resolution.
The PCS reviews MOA/AOA, Board and General Meeting minutes, statutory registers, ROC filings, contracts, related party transactions, regulatory correspondence, share transfer records, annual returns, and compliance with specific industry regulations applicable to the company.
Our qualified PCS provides thorough, timely secretarial audit services with actionable compliance insights.