Secretarial Audit (Form MR-3)

How It Works

1. 1

   Appoint the Secretarial Auditor

   The Board of Directors must pass a resolution appointing a Practising Company Secretary as Secretarial Auditor for the financial year. The appointment should ideally be made at the beginning of the financial year to allow the auditor to review compliance on a running basis rather than only at year-end.

2. 2

   Initial Planning and Scoping Meeting

   The Secretarial Auditor meets with the company's Company Secretary and compliance team to understand the company's business, applicable laws specific to its sector, any corporate actions taken during the year, and any known compliance issues. The auditor prepares a list of documents and information required for the audit.

3. 3

   Document Collection and Review

   The company provides the auditor access to all statutory registers, minutes books, ROC filings, stock exchange disclosures, board and committee resolutions, share capital records, and other documents for the financial year under review. The auditor verifies each compliance requirement against the evidence of compliance.

4. 4

   Issue of Queries and Management Responses

   Where the auditor identifies gaps, delays, or potential non-compliances, the auditor raises queries with management. The company's compliance team provides clarifications and supporting evidence. This iterative process allows genuine errors to be distinguished from systemic non-compliance.

5. 5

   Draft Report and Management Comments

   The auditor prepares a draft Form MR-3 report setting out the scope, findings, and any qualifications or observations. Management is given an opportunity to review the draft and provide comments on factual accuracy before the report is finalised.

6. 6

   Finalise and Submit Form MR-3

   The Practising Company Secretary signs and dates the final Form MR-3 report and provides it to the company for annexure to the Board's Report. The Board's Report must specifically comment on any qualifications or adverse remarks in the secretarial audit report. The signed report is then filed as part of the annual filings with the Registrar of Companies.