# Secretarial Audit (MR-3)

> A secretarial audit under Section 204 is mandatory for listed companies, public companies with paid-up capital of ₹50 crore or more or turnover of ₹250 crore or more, and any company with outstanding loans or borrowings from banks or public financial institutions of ₹100 crore or more. The report, in Form MR-3, is given by a practising Company Secretary and annexed to the board's report.

Practice: Company Secretary & Corporate Compliance — https://www.industax.com/services/company-secretary/

The audit examines compliance with the Companies Act, SEBI regulations (for listed entities), FEMA, depositories rules and sector laws. Qualifications in MR-3 must be explained in the board's report, so a pre-audit review is valuable.

Companies outside the mandatory thresholds often commission a voluntary secretarial compliance review before a fundraise or acquisition. Indus Tax delivers secretarial audits with partner practising Company Secretaries and prepares the underlying compliance file.

## Key facts

| Item | Detail |
| --- | --- |
| Law | Section 204; Rule 9 of the Managerial Personnel Rules |
| Mandatory for | Listed cos; public cos with ₹50 cr paid-up or ₹250 cr turnover; any co with ₹100 cr+ bank/PFI borrowings |
| Report | Form MR-3 by a practising CS |
| Disclosure | Annexed to the board's report with explanations of qualifications |

## Who needs this

- Companies crossing the Rule 9 thresholds
- Companies preparing for investment or acquisition
- Listed companies

## What's included

- Applicability check
- Pre-audit compliance review
- MR-3 through partner practising CS
- Board's report explanations

## Documents

- Statutory registers and minutes
- MCA filings
- Policies and FEMA/SEBI filings

## Process

1. **Scope** — Applicable laws listed for your company.
2. **Review** — Records tested and gaps fixed where possible.
3. **Report** — MR-3 issued by the partner practising CS.

Work that legally requires a practising Company Secretary is signed by a partner professional; Indus Tax coordinates it.

## FAQs

### Is secretarial audit applicable to private companies?

Yes, if the company has outstanding loans or borrowings from banks or public financial institutions of ₹100 crore or more.

### Who can conduct a secretarial audit?

Only a Company Secretary in practice.

### What does a secretarial audit cover?

Compliance with the Companies Act and rules, the secretarial standards, FEMA and depositories regulations, SEBI regulations for listed entities, and laws specific to the company's industry.

## Official sources

- Ministry of Corporate Affairs — MCA21 portal: https://www.mca.gov.in/
- Companies Act, 2013 (India Code): https://www.indiacode.nic.in/handle/123456789/2114
- ICSI Secretarial Standards: https://www.icsi.edu/

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Canonical page: https://www.industax.com/services/company-secretary/secretarial-audit
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.