Secretarial Audit

204(1) of Companies Act, 2013 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Secretarial Audit is an audit to check compliance of various legislations which the company has to comply in its routine working. It helps the company in early detection and prevention of non -compliances. In addition to this, it also provides status of the compliances which are inadequate or incomplete. It reduces penalties & imprisonment which the company would have to incur if it fails to make the timely compliances. It’s is based on the concept “Prevention is better than Cure”.

Companies which are prescribed have to annex Secretarial Audit report with the board report. Introduction of this new class of audit has increased the scope for the members of ICSI but at the same time have placed burden on the companies. Only a member of the Institute of Company Secretaries of India holding certificate of practice (company secretary in practice) can conduct Secretarial Audit and furnish the Secretarial Audit Report to the company.


Secretarial Audit Report has to be given in Form MR-3 by the Company Secretary in Practice for the following class or classes of companies:

  • Every listed company; –
  • Every public company having a paid-up share capital of fifty crore rupees or more; or –
  • Every public company having a turnover of two hundred fifty crore rupees or more.

Turnover” means the aggregate value of the realization of amount made from the sale, supply or distribution of goods or on account of services rendered, or both, by the company during a financial year. [Section 2(91)]


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