• The Companies Act, 2013
  
  
• SEBI (LODR) Regulations, 2015
  
  
• FEMA (Foreign Exchange Management Act)
  
  
• Depositories Act, 1996
  
  
• Labour Laws and other applicable corporate legislations
  
  

It acts as a compliance health check for the company — identifying gaps, suggesting improvements, and ensuring that the organization operates within the legal and ethical boundaries.

🧾 Legal Basis – Section 204 of the Companies Act, 2013

As per Section 204(1) of the Companies Act, 2013, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014,
certain classes of companies are mandated to obtain a Secretarial Audit Report from a Practicing Company Secretary (PCS).

📜 Applicability of Secretarial Audit

Secretarial Audit is mandatory for the following classes of companies:

1. Every Listed Company
   
   
2. Every Public Company with:
   
   
   • Paid-up share capital of ₹50 crore or more, or
     
     
   • Turnover of ₹250 crore or more
     
     
3. Every Private Company which is:
   
   
   • A subsidiary of a public company meeting the above criteria, or
     
     
   • Having borrowings exceeding ₹100 crore or more from banks or public financial institutions
     
     

However, any company (including private) may voluntarily opt for a Secretarial Audit to strengthen its governance framework.

🧩 Scope of Secretarial Audit

A Secretarial Audit covers verification and reporting on compliance with the following major laws and regulations:

1. Companies Act, 2013 & Rules Made Thereunder

• Maintenance of statutory registers
  
  
• Board meetings, general meetings & minutes
  
  
• Issue/allotment/transfer of shares
  
  
• Appointment & remuneration of directors
  
  
• Annual filings (AOC-4, MGT-7, etc.)
  
  
• Loans, guarantees & related party transactions
  
  

2. Securities Laws (for Listed Companies)

• SEBI (LODR) Regulations, 2015
  
  
• Insider Trading & Takeover Regulations
  
  
• Listing Agreement compliance
  
  
• Timely disclosures to stock exchanges
  
  

3. FEMA & RBI Regulations

• Foreign investments (FDI/FPI) compliance
  
  
• ECB and ODI filings
  
  
• Remittance of dividends and royalties
  
  

4. Other Applicable Laws

• Labour laws (PF, ESI, Gratuity, etc.)
  
  
• Environmental and Industrial laws (if applicable)
  
  
• Industry-specific statutes (Banking, NBFC, Pharma, etc.)
  
  

5. Corporate Governance & Best Practices

• Independent directors’ role & code of conduct
  
  
• Risk management policies
  
  
• Whistleblower & internal audit mechanisms
  
  
• Board evaluation procedures
  
  

🧾 Documents Required for Secretarial Audit

To conduct a detailed Secretarial Audit, the following documents are required:

• Memorandum & Articles of Association (MOA/AOA)
  
  
• Annual Return (MGT-7) & Financial Statements
  
  
• Statutory Registers (Members, Directors, Charges, etc.)
  
  
• Board & General Meeting Notices, Agendas & Minutes
  
  
• Shareholding Pattern & Transfer Records
  
  
• ROC Filings and Acknowledgments
  
  
• Director KYC details & DIN records
  
  
• Related Party Transaction details
  
  
• Labour and environmental compliance proofs
  
  
• SEBI and FEMA filings (for applicable companies)
  
  

🧮 Secretarial Audit Process – Step by Step

Step 1: Engagement & Planning

A formal appointment of a Practicing Company Secretary (PCS) through a board resolution.
The audit plan and scope are defined.

Step 2: Preliminary Review

Collection of company documents, registers, filings, and internal policies for review.

Step 3: Compliance Verification

Examination of statutory books, resolutions, and records to verify compliance with the Companies Act and other laws.

Step 4: Evaluation of Governance Practices

Assessment of board processes, decision-making systems, and disclosures.

Step 5: Drafting of Audit Report

Preparation of a detailed Secretarial Audit Report (Form MR-3) highlighting:

• Compliances made
  
  
• Non-compliance instances (if any)
  
  
• Corrective recommendations
  
  

Step 6: Submission to Board of Directors

The final Secretarial Audit Report (MR-3) is placed before the Board and annexed to the Annual Report filed with ROC.

📄 Format – Secretarial Audit Report (Form MR-3)

Issued under Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014,
Form MR-3 contains:

• Auditor’s observations on statutory compliance
  
  
• Deviations and corrective recommendations
  
  
• Certification on governance practices
  
  

💰 Secretarial Audit Fees (Indicative)

(Fees depend on turnover, company size, and number of legal compliances.)

✅ Benefits of Secretarial Audit

• ⚖️ Ensures 100% Legal Compliance
  
  
• 📈 Builds Stakeholder Confidence & Transparency
  
  
• 🛡️ Avoids Penalties & Prosecution
  
  
• 📋 Improves Governance & Internal Controls
  
  
• 🧾 Enhances Corporate Credibility
  
  
• 🕵️‍♂️ Identifies Non-Compliance Gaps & Risks
  
  
• 🔒 Protects Directors from Legal Liability
  
  

⚠️ Consequences of Non-Compliance

Failure to conduct or report a Secretarial Audit can lead to:
❌ Penalties under Section 204(4) of the Companies Act
❌ Personal liability of Company Officers & Directors
❌ Suspension of directorship for repeated non-compliance
❌ Reputational loss and regulatory scrutiny

🏛️ Regulatory References

• Section 204 of the Companies Act, 2013
  
  
• Rule 9 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014
  
  
• Form MR-3 – Secretarial Audit Report Format
  
  
• SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
  
  

🌟 Why Choose Team GBC for Secretarial Audit Services?

✅ Qualified Practicing Company Secretaries (PCS)
✅ Comprehensive Compliance Coverage
✅ Accurate and Confidential Reporting
✅ Strategic Compliance Improvement Roadmap
✅ End-to-End ROC, SEBI & MCA Support
✅ Affordable & Transparent Pricing
✅ PAN India Assistance for All Business Sectors

🏁 Conclusion

A Secretarial Audit is not just a legal requirement — it’s a governance tool that safeguards your organization from legal risks and builds corporate excellence.

At Team GBC, we combine deep regulatory knowledge with hands-on compliance experience to deliver accurate, insightful, and actionable audit reports that empower your leadership team to make confident, compliant decisions.

📞 Contact Team GBC today for professional Secretarial Audit Services under the Companies Act, 2013 — and ensure your company operates with transparency, accountability, and legal confidence.

💼 Team GBC – Your Trusted Partner for Secretarial Audit, Corporate Compliance & Governance Advisory in India.