What is a secretarial audit report? Form MR-3

A secretarial audit report is a practising company secretary's independent opinion on whether a company actually complied with company law, securities law and the other rules that bind it, issued in Form MR-3 and annexed to the board's report. A statutory audit checks the numbers. A secretarial audit checks the process: whether the board met when it should have, whether resolutions were passed and filed, whether disclosures went out on time. It is not investment advice.

Which companies must obtain a secretarial audit report?

Section 204 of the Companies Act, 2013 requires it for every listed company and for such other class of companies as prescribed. The prescription lives in Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and it captures three groups:

• every public company with paid-up share capital of 50 crore rupees or more;
• every public company with turnover of 250 crore rupees or more;
• every company, including a private company, with outstanding loans or borrowings from banks or public financial institutions of 100 crore rupees or more. This limb was inserted as Rule 9(1)(c) by the MCA notification dated January 3, 2020 and applies for financial years commencing on or after April 1, 2020.

Each of those figures is measured as it stood on the last date of the latest audited financial statement, so a company does not fall in or out of scope on a mid-year balance.

SEBI then widens it for the listed universe. Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 requires every listed entity and its material unlisted subsidiaries incorporated in India to undertake secretarial audit and annex the report to the annual report. That last part is the useful bit for anyone reading a group: the subsidiary where the operations actually sit is inside the scope, not only the listed shell.

What does the report actually cover?

Form MR-3 works through a named list of laws and says, for each, whether the company complied. In practice the sections that repay reading are:

The qualifications paragraph is the point of the document. A clean MR-3 tells you very little on its own. A qualified one names the provision that was missed, in the company's own annual report, signed by an outside professional. Read next to the corporate governance report and the annual return in Form MGT-7, it is one of the few places where process failures are written down rather than inferred.

What changed for listed companies from April 2025?

SEBI's LODR (Third Amendment) Regulations, 2024, in force from December 13, 2024, rebuilt the appointment rules for the secretarial auditor of a listed entity, with the changes applying to appointments, re-appointments and continuations from April 1, 2025:

• the secretarial auditor must be a peer reviewed company secretary, individually or as a practice unit where the required partners hold peer review status;
• appointment is by shareholders at the annual general meeting, not by the board alone;
• an individual may serve one term of five consecutive years; a secretarial audit firm may serve up to two such terms;
• after a completed term, a five year cooling-off applies before re-appointment in the same entity.

This deliberately mirrors the statutory-auditor architecture: shareholder appointment, fixed tenure, mandatory rotation. The signal for an outside reader is the same one you would take from an auditor change, and it is read the same way, as covered in how to track auditor resignations.

Secretarial audit report versus annual secretarial compliance report

They are two different documents and both exist for listed entities.

The secretarial audit report is the Form MR-3 opinion for the year, annexed to the board's report inside the annual report. The annual secretarial compliance report is a separate report filed directly with the stock exchanges within 60 days of the financial year-end, in the format specified by SEBI circular CIR/CFD/CMD1/27/2019 dated February 8, 2019, since consolidated into SEBI's LODR master circular, focused on compliance with SEBI regulations and circulars. To avoid duplication, SEBI kept Form MR-3 as the format for the Regulation 24A secretarial audit itself.

So, what is a secretarial audit report: an independent, on-the-record opinion in Form MR-3 on whether a company followed the law it operates under, mandatory for listed companies and for larger public and heavily borrowed companies, now backed by shareholder appointment and fixed tenure for the listed universe. It belongs in the same reading stack as the annual filings in AOC-4 and MGT-7. Flock reads these public filings and keeps each one stamped with its date and source. What any of it means for you is your call to make.