What is Secretarial Audit?
Secretarial Audit is an independent examination of a company's compliance with applicable laws, rules, regulations, and procedural requirements. Conducted by a practicing company secretary under Section 204 of the Companies Act, 2013, it covers compliance with the Companies Act, SEBI regulations (for listed companies), FEMA, and other corporate laws. The audit report is filed with the MCA as Form MR-3 and forms part of the board's report. ESG-adjacent disclosures include board composition, related-party transactions, CSR compliance, and statutory register maintenance.
Who needs it?
- All listed companies
- Unlisted public companies with paid-up capital ≥ ₹50 crore, turnover ≥ ₹250 crore, or outstanding loans ≥ ₹100 crore
- Private companies meeting the same financial thresholds
What does it cover?
- Compliance with the Companies Act, 2013 and rules made thereunder
- SEBI (Listing Obligations and Disclosure Requirements) Regulations for listed entities
- Foreign Exchange Management Act (FEMA) compliance
- Maintenance of statutory registers and records
- Board meeting and committee meeting compliance
- Related-party transaction disclosures
- CSR compliance under Section 135
- Filing of e-forms and returns with the MCA
Why is it hard manually?
- Compliance data spans multiple ministries and departments (MCA, SEBI, RBI, FEMA)
- Statutory registers must be maintained in prescribed formats with regular updates
- ESG-adjacent governance disclosures (board diversity, CSR, related-party transactions) require cross-functional coordination
- Missing a single filing can trigger penalties and disqualification of directors
- Audit evidence must be traceable and version-controlled for the practicing company secretary
How SustainableX helps
- Compliance evidence repository: Central storage of board resolutions, meeting minutes, CSR reports, and statutory filings with full audit trail
- Data lineage: Trace every disclosure back to its source document for secretarial audit readiness
- Cross-framework alignment: Secretarial audit data feeds into BRSR governance disclosures and Board's Report content
- Version control: Track changes to compliance records across reporting periods
- Export-ready: Generate compliance summaries and evidence packs for the practicing company secretary
How to prepare — 5 steps
- Confirm applicability: Verify whether your company meets the paid-up capital, turnover, or loan thresholds for mandatory secretarial audit
- Appoint a company secretary: Engage a practicing company secretary to conduct the audit
- Compile statutory records: Gather board minutes, committee meeting records, statutory registers, and MCA e-form filings
- Assemble ESG-adjacent disclosures: Prepare CSR compliance, related-party transaction, and board governance disclosures
- Review and file: Company secretary issues the audit report; file Form MR-3 with the MCA and annex to the board's report
Frequently asked questions
Who conducts the Secretarial Audit?
A practicing company secretary holding a valid certificate of practice.
Which companies need a Secretarial Audit?
All listed companies and unlisted public companies meeting prescribed paid-up capital, turnover, or outstanding loan thresholds.
What is Form MR-3?
The e-form used to file the Secretarial Audit Report with the MCA.
Is Secretarial Audit the same as statutory audit?
No — statutory audit examines financial statements; secretarial audit examines compliance with corporate and securities laws.
Can SustainableX help with Secretarial Audit?
Yes — SustainableX maintains compliance evidence, audit trails, and ESG-adjacent governance data to support audit readiness.
Sources
- Companies Act, 2013 — Section 204
- Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014