Secretarial Audit in Ahmedabad — Section 204, Companies Act 2013
Secretarial Audit is a comprehensive compliance review mechanism introduced under Section 204 of the Companies Act, 2013, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. It mandates that specified classes of companies must have their compliance with applicable laws, rules, regulations, and guidelines verified and certified by a Practicing Company Secretary (PCS) in Form MR-3.
The Secretarial Audit Report in Form MR-3 is annexed to the Board’s Report and forms part of the company’s Annual Report. It serves as an independent professional opinion on the company’s compliance posture and is reviewed by shareholders, regulators, auditors, and potential investors.
At MR Bhatia & Co, we conduct thorough and independent secretarial audits for companies in Ahmedabad and across Gujarat. Our audit methodology covers compliance under the Companies Act 2013, SEBI Regulations (for listed entities), FEMA, Depositories Act, and all other applicable sectoral laws.
The Secretarial Audit Report in Form MR-3 is annexed to the Board’s Report and forms part of the company’s Annual Report. It serves as an independent professional opinion on the company’s compliance posture and is reviewed by shareholders, regulators, auditors, and potential investors.
At MR Bhatia & Co, we conduct thorough and independent secretarial audits for companies in Ahmedabad and across Gujarat. Our audit methodology covers compliance under the Companies Act 2013, SEBI Regulations (for listed entities), FEMA, Depositories Act, and all other applicable sectoral laws.
Who Needs a Secretarial Audit?
Secretarial Audit under Section 204 is mandatory for:
- Every listed company (BSE/NSE mainboard and SME platform)
- Every public company with paid-up share capital of ₹50 crore or more
- Every public company with turnover of ₹250 crore or more
- Every company having outstanding loans or borrowings aggregating ₹100 crore or more from banks or public financial institutions
- Every private company with paid-up share capital of ₹50 crore or more (as per Companies (Appointment and Remuneration) Amendment Rules, 2020)
- NBFCs (as per specific RBI and SEBI circulars)
- Companies required to constitute an Audit Committee under Section 177
Scope of Our Secretarial Audit
- Compliance under the Companies Act, 2013 and Rules made thereunder
- Compliance under SEBI (LODR) Regulations 2015, SEBI (PIT) Regulations 2015, SEBI (SAST) Regulations 2011 (for listed companies)
- Compliance under the Foreign Exchange Management Act, 1999 (FEMA) and RBI regulations
- Compliance under the Depositories Act, 1996 and Regulations
- Compliance with Secretarial Standards (SS-1 and SS-2) issued by ICSI
- Compliance under industry-specific laws applicable to the company
- Review of Board and Committee processes, minutes, and resolutions
- Verification of statutory registers, forms filed with ROC, and annual returns
- Examination of related party transactions and their approval process
Our Secretarial Audit Methodology
- 1. Engagement Letter & Scope Definition: Formal engagement with clear scope, timelines, and deliverables
- 2. Data Collection: Gathering of all statutory records, minutes books, registers, ROC filing receipts, and regulatory correspondence
- 3. Compliance Verification: Systematic verification against a comprehensive checklist covering 100+ compliance checkpoints
- 4. Management Discussion: Discussion with KMPs, CS (if in employment), and relevant departmental heads
- 5. Draft Report: Preparation of draft Secretarial Audit Report with preliminary observations
- 6. Management Response: Obtaining management’s responses to observations
- 7. Final Report: Issuance of Form MR-3 Secretarial Audit Report with qualifications, reservations, adverse remarks, and disclaimers (if any)
Frequently Asked Questions
A: Non-compliance with Section 204 attracts penalties under Section 204(4): the company is liable for a fine of ₹1 lakh to ₹5 lakh, and every officer in default (including the company secretary in employment and managing director) is liable for imprisonment up to 1 year and/or fine of ₹1 lakh to ₹5 lakh.
A: No. Secretarial Audit under Section 204 must be conducted exclusively by a Company Secretary in Practice (PCS) holding a valid Certificate of Practice from ICSI. The CS in employment cannot audit the same company.
A: Yes. Every listed company, including companies listed on the BSE SME or NSE Emerge platform, is required to get a Secretarial Audit conducted every year.
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Need a Secretarial Audit for your company in Ahmedabad? Contact MR Bhatia & Co — we deliver thorough, independent, and timely Form MR-3 reports.