Overview
A secretarial audit is an independent examination, carried out by a Company Secretary in Practice, of whether a company complies with the Companies Act and other applicable laws. It is mandatory under Section 204 for every listed company and for public companies and other companies above prescribed thresholds. The auditor’s findings are reported in Form MR-3, which is annexed to the board’s report.
What Is a Secretarial Audit?
The audit checks compliance with the Companies Act and its Rules, the Secretarial Standards, the SEBI regulations (for listed entities), FEMA and ODI/FDI rules, the Depositories Act, and the laws that specifically apply to the company’s industry. It covers board processes, meetings, filings, registers, related-party transactions, and the systems in place for complying with those laws. Only a practising Company Secretary can issue the report.
Who Needs a Secretarial Audit?
Under Section 204 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, it is required for:
Listed entities and their material unlisted subsidiaries incorporated in India also have obligations under Regulation 24A of the SEBI (LODR) Regulations. These include appointing a peer-reviewed secretarial auditor with shareholder approval, for a term of up to five years for an individual and up to two five-year terms for a firm, and filing an annual secretarial compliance report.
Other companies may commission a voluntary secretarial audit, for example before investment or as an internal check.
- Every listed company.
- Every public company with paid-up share capital of ₹50 crore or more.
- Every public company with turnover of ₹250 crore or more.
- Every company with outstanding loans or borrowings from banks or public financial institutions of ₹100 crore or more.
Secretarial Audit in Chennai / Tamil Nadu
The requirement is national and applies in the same way to companies in Chennai and Tamil Nadu. KVA carries out secretarial audits for companies across India and for companies in Chennai from its Chennai office.
Benefits
The audit identifies non-compliance early, supports the directors’ responsibility statement, strengthens governance, and gives investors and lenders an independent view. It is a statutory review, not a guarantee that no non-compliance exists.
Secretarial, Statutory and Internal Audit Compared
These audits are often confused. They look at different things and are done by different professionals.
| Aspect | Secretarial audit | Statutory audit | Internal audit |
|---|---|---|---|
| Focus | Compliance with corporate and related laws | True and fair view of financial statements | Internal controls and processes |
| Done by | Practising Company Secretary | Chartered Accountant | Internal or outsourced auditor |
| Report | Form MR-3 | Auditor's report | Report to management |
| Applies to | Listed companies and larger unlisted public companies, as thresholds apply | All companies | Companies meeting the prescribed criteria |
Laws Typically Examined in a Secretarial Audit
The scope follows the company's regulatory footprint.
| Law | What is checked |
|---|---|
| Companies Act, 2013 | Meetings, filings, registers, approvals |
| SEBI regulations | Listing and disclosure compliance, where listed |
| FEMA | Foreign investment and overseas investment reporting |
| Sector laws | Laws specifically applicable to the company |
Scope and Documents Reviewed
The auditor reviews the minutes of board, committee and general meetings; the statutory registers; the MCA filings and challans; notices and agendas; the share capital records and transfers; related-party transaction approvals; FEMA filings; the SEBI and stock-exchange disclosures (for listed entities); and the compliance certificates for laws specific to the industry.
Process
- The board appoints the secretarial auditor. Listed entities also need shareholder approval under Regulation 24A.
- The auditor issues an engagement letter and a document request.
- The auditor examines the records on a test-check basis, as the ICSI Auditing Standards provide.
- The auditor discusses the observations with management.
- The auditor issues the report in Form MR-3.
- The board annexes MR-3 to the board’s report and explains any qualifications.
How KVA Handles Secretarial Audit
Karthick Vijayakumar & Associates, Company Secretaries, supports you through each stage with a single point of contact and a clear record of what has been done.
| Step | Stage | What KVA does |
|---|---|---|
| 1 | Requirement review | We understand your entity, objective and timeline, and confirm what Secretarial Audit involves for your specific facts. |
| 2 | Document checklist | You receive a clear list of documents, particulars and approvals needed, with gaps flagged early. |
| 3 | Preparation and filing | Our team prepares, reviews and files the required forms and records, and tracks each acknowledgement. |
| 4 | Completion and follow-up | We hand over final records and explain the compliance that follows, so nothing is missed afterwards. |
Fees and Charges
No government fee is payable for the audit itself. Professional fees are available on enquiry.
Penalties
Non-compliance with Section 204 attracts penalties on the company, every officer in default and the company secretary in practice, under Section 204(4).
Why Karthick Vijayakumar & Associates
Work is handled by company secretaries who deal with statutory filings and governance every day.
Timelines for Secretarial Audit are tracked so that approvals and filings do not slip.
Plain-language updates at each stage, with no guesswork about what is pending.
Organised, decision-ready documentation that supports audits, banks and future filings.
Frequently Asked Questions
Listed companies, public companies with paid-up capital of ₹50 crore or more or turnover of ₹250 crore or more, and any company with bank or public financial institution borrowings of ₹100 crore or more.
Only a Company Secretary in Practice, meaning a member of ICSI who holds a Certificate of Practice. For listed entities, the auditor must also be peer-reviewed.
It is the prescribed format of the Secretarial Audit Report under Section 204.
It is required only if the company’s outstanding borrowings from banks or public financial institutions are ₹100 crore or more. A private company can still opt for a voluntary audit.
It is a separate report that listed entities must file with the stock exchanges under Regulation 24A, confirming compliance with SEBI regulations and circulars.
No. A secretarial audit must be conducted by a Company Secretary in Practice.
No. The secretarial auditor must be independent of the company.
The Companies Act, the Secretarial Standards, SEBI regulations (for listed companies), the Depositories Act, FEMA, and the laws specifically applicable to the company.
The board must explain or comment on every qualification in the board’s report.
After the financial year closes and before the board’s report is approved, so that MR-3 can be annexed to it.
Yes. Material unlisted subsidiaries incorporated in India undergo a secretarial audit under Regulation 24A.
ICSI has made its Auditing Standards mandatory for its members in practice for the specified audits.
The working papers are retained according to the ICSI Auditing Standards and good practice. The company’s statutory records follow the retention periods in the Act.
ICSI guidelines specify ceilings on the number of secretarial audits a practising CS can undertake.
Generally, only to the extent that they relate to corporate compliance. The detailed tax audit is a separate exercise.
[CLIENT TO CONFIRM peer-review status before publishing this answer.]
It is an independent check on whether the company has followed the corporate laws, rules, regulations and standards that apply to it and has proper board processes and records.
The report in Form MR-3 is signed by the practising company secretary who has conducted the audit and is attached to the board’s report.
No. It covers the Companies Act, the Securities Contracts, Depositories, FEMA and SEBI regulations as applicable, and any sector-specific laws identified by the company.
Keep minutes, registers, filings, notices and attendance records ready, and share board agendas and approvals so the auditor can verify compliance with relevant laws.
Need Assistance With Secretarial Audit?
Contact Karthick Vijayakumar & Associates to discuss your company’s secretarial audit requirements and the records needed for the audit.
Contact UsSpeak with Karthick Vijayakumar & Associates
Third Floor, New No. 599, Old No. 230, Konnur High Road, Ayanavaram, Chennai, Tamil Nadu, 600023, India
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