14 Feb 2019Posted By: Mudit Handa

SEBI Amends the Secretarial Audit & Compliance Report Formats

All companies are required to comply with several laws, provisions and regulations as per the Companies Act 2013. As per the company laws, companies have to undergo various audits, which are the integral parts of annual compliance of private limited company.

Apart from that, companies are required to fulfil SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, also known as LODR Regulations. These Regulations specify certain Disclosure Requirements with respect to various kinds of listed securities of listed companies.

Secretarial Audit is one such very crucial type of audit that gives assurance to the top management, regulators and the stakeholders of the company regarding annual compliance by the company. It also ensures that proper systems and processes are in place in a company, in accordance with the provisions of Companies Act 2013.

Recently, the Securities and Exchange Board of India (SEBI) has made key amendments to the formats of the annual secretarial audit report and the annual secretarial compliance report for listed entities and their unlisted subsidiary companies.


Let us first understand the significance of a secretarial audit.


#1. What is a secretarial audit?

Secretarial Audit is basically an audit to ascertain the level of compliance of various company laws, mainly the Companies Act and other corporate and allied laws applicable to the company. Evidently, this is a key aspect of annual compliance of private limited company.


#2. Who shall conduct a secretarial audit?

According to the section 204 of the Companies Act 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, following companies have to compulsorily obtain ‘Secretarial Audit Report’ from an independent practising Company Secretary (CS)-

  • Every listed company
  • All public limited companies with paid-up share capital ₹50 Crore or above
  • All public limited companies with annual turnover ₹250 Crore or above.
  • All Private limited companies that are subsidiaries of a public limited company.


#3. What changes have been made regarding secretarial audit?

The major change regarding secretarial audit is that the scope of Secretarial audit has now been extended to all the material unlisted subsidiary companies as well. Earlier the scope of this type of audit was limited to listed companies only. 

In this context, the Regulation 24A has been introduced in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

24A: Secretarial Audit

“All listed entity and its material unlisted subsidiaries incorporated in India shall undertake secretarial audit and shall annex with its annual report, a secretarial audit report, given by a company secretary in practice, in such form as may be prescribed with effect from the year ended March 31, 2019.”


#4. What amendments have been made in the annual secretarial audit report?

Currently, Secretarial Audit by Practicing Company Secretaries (PCS) is mandatory for listed companies and unlisted companies with the above certain threshold in Form MR-3. The format of Form MR-3 has been amended.

Now, in order to avoid confusion, the listed entity and their unlisted subsidiaries shall also file Form MR-3 as required under Companies Act, 2013 and Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

To see the new Form MR-3 format, please refer to .


#5. What are the amendments regarding annual secretarial compliance report?

Certain amendments have been made in the annual secretarial compliance report format also.

  • The annual secretarial audit shall broadly check the compliance, while listed companies will also require an audit by the PCS on the compliance of all Regulations and circulars or guidelines issued by SEBI
  • The PCS shall thereafter submit an annual secretarial compliance report to the listed company on annual basis.


#6. How is Secretarial Audit helpful?

Secretarial Audit helps the companies in many ways-

  • It helps in detection of non-compliance and enables corrective actions.
  • It audits the application of desirable corporate practices.
  • It adds value and improves Company operations.
  • It facilitates a systematic, disciplined approach for evaluation and improvement in risk management, controlling and governance

This way, Secretarial Audit provides comfort to the top management, regulators and the stakeholders, with regard to statutory compliance.

Also refer to the .

If you need any assistance regarding Annual Compliance of Private Limited Company or Secretarial Audit, feel free to contact us at 8881-069-069. 

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