In pursuit of achieving the highest standards of Corporate Governance, the Company voluntarily obtains Secretarial Compliance Certificate from a Practicing Company Secretary based on the Certificate under Section 383A of the Companies Act, 1956. The Company is proud to mention that the audit conducted by the Practicing Company Secretary for issuing the secretarial compliance certificate confirms that the company is in full compliance with the Companies Act, 1956. The Voluntary Secretarial Compliance Certificate has been published in the Annual Report of the Company.

When and why Secretarial Audit is mandatory for Companies

Secretarial audit is an audit to check compliance of various legislation including the Companies Act and other corporate and economic laws applicable to the company. In this article we will discuss when companies in India are required to do secretarial audit and who can conduct such audit.

 As per section 204 (1) of Companies Act 2013 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, following companies are required to obtain Secretarial Audit report


  • Every listed company
  • Every public company having a paid up share capital of 50 crore rupees or more

Every public company having a turnover of 250 Crores or more As per Section 2(91) of Companies Act 2013, “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. As prescribed in rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the format of the secretarial audit report shall be in Form No MR.3. Companies falling under section 204(1) (as discussed above) are also required to annex secretarial audit report with Board’s report. Companies which are not falling under section 204 (1) of Companies Act 2014, may obtain Secretarial Audit Report voluntarily as it provides an independent assurance of the compliance in the company.


Who can conduct Secretarial Audit in India

 As per section 204(1) of Companies Act 2013, 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. Such Secretarial Audit Report has to be given in form MR3.

 This means a company secretary who is employed and not in whole time practice cannot conduct secretarial audit. As of now, ICSI has not placed any restrictions on number of audits that can be conducted by a Company Secretary in Practice in one financial year.


Who should sign Secretarial Audit Report 

The Secretarial Audit Report should be signed by the Secretarial Auditor who has been engaged by the company to conduct the Secretarial Audit and in case of a firm of Company Secretaries, by the partner under whose supervision the Secretarial Audit was conducted.


How to appoint secretarial auditor in companies 

As per Rule 8 of the Companies (Meetings of Board and its powers) Rules, 2014, Secretarial Auditor is required to be appointed by means of resolution passed at a duly convened Board meeting. It is advisable for Secretarial Auditor, to get the letter of engagement from the company. Secretarial Auditor should formally accept the letter of engagement. Further, as a prudent corporate practice, it is advisable that change in the Secretarial Auditor during the year is reported to the members in the Board’s Report. 


Is secretarial audit applicable to private limited companies?

Section 2(71) of the Companies Act, 2013 defines a “Public Company as one

  • Which is not a private company;
  • Has a minimum paid-up share capital of five lakh rupees or such higher paid-up capital as may be prescribed.

The proviso to the definition states that “Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles. By this definition, it can be inferred that Secretarial Audit would be applicable to a private company which is a subsidiary of a public company, and which falls under the prescribed class of companies. As per section 204 (4) of Companies Act 2013, if a company or any officer of the company or the company secretary in practice, contravenes the provisions relating to secretarial audit the company, every officer of the company or the company secretary in practice, who is in default, shall be punishable with fine.

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