Secretarial Audit Report under the Company Act 2013

Applicability of Secretarial Audit under the Company Act 2013

Basic introduction to secretarial audit

Secretarial Audit under the Company Act 2013 is a compliance audit, independent of financial, statutory, or cost audits. The purpose of the is to checks compliance with various laws, rules, regulations, procedures, and the maintenance of books and records. Secretarial Audit plays a crucial role in promoting transparency, legal compliance, and accountability within companies, helping to maintain trust with stakeholders and authorities.

Applicability of secretarial audit

The mandatory provisions relating to applicability of secretarial audit are as explained below:

• • Every Listed Company.
  • Every public company having –
    • • Paid up share capital > Rs. 50 crore or
      • Turnover > Rs. 250 crore or
  • Every company (Public / Private) having outstanding loans or borrowings from banks or public financial institutions of one hundred crore rupees or more.*[ w.e.f 01/04/2020]

Explanation :- For the purposes of above criteria, the paid up share capital, turnover, or outstanding loans or borrowings as the case may be, existing on the last date of latest audited financial statement shall be taken into account.

Key Points w.r.t. Secretarial Audit under the Company Act:

• The Secretarial Audit Report must follow the format in Form No. MR-3
• The secretarial audit report format in word MR-3: Get Here
• Only a practicing Company Secretary can serve as the Secretarial Auditor.
• The Board must appoint the Secretarial Auditor at their Board meeting.
• The secretarial audit report is addressed to the Members of the Company.
• The Secretarial Auditor must adhere to ICSI Auditing Standards.
• The Secretarial Audit may be conducted periodically (quarterly, half-yearly, or annually).
• The Board Report must include the Secretarial Audit Report.