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Secretarial Audit under Section 204 and Form MR-3

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Service: End-to-end Section 204 secretarial audit, conducted with a Practising Company Secretary and reported in MR-3.

Applies To: Listed companies, large public companies and companies with 100 crore plus borrowings.

Report: Form MR-3, signed by a Practising Company Secretary and annexed to the Board’s Report.

Listed Entities: From 1 April 2025, the auditor must be a Peer Reviewed Company Secretary.

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Section 204 Secretarial Audit: Overview and Quick Summary

📌 TL;DR - Secretarial Audit Services at a Glance

Section 204 makes a secretarial audit mandatory for every listed company, every public company with paid-up capital of 50 crore or more or turnover of 250 crore or more, and every company with bank or PFI borrowings of 100 crore or more. The audit is conducted by a Practising Company Secretary and reported in Form MR-3, annexed to the Board’s Report.

Parameter	Detail
Governing Provision	Section 204 with Rule 9 of the Managerial Personnel Rules, 2014
Listed companies	Mandatory for all listed companies
Public company test	Paid-up capital 50 cr or more, or turnover 250 cr or more
Borrowings test	Any company with bank or PFI borrowings 100 cr or more
Auditor	Practising Company Secretary with ICSI Certificate of Practice
Report	Form MR-3, annexed to the Board’s Report
Listed, from 1 Apr 2025	Auditor must also be a Peer Reviewed Company Secretary

This page explains the Section 204 mandate in detail, the applicability tests, the MR-3 report, the Practising Company Secretary and the peer-review requirement for listed entities. For our broader engagement and how we run the audit, see our secretarial audit service. Patron coordinates the audit with a Practising Company Secretary so your MR-3 is clean and on time.

Secretarial audit is the governance counterpart to the financial statutory audit: it checks compliance with the Companies Act, SEBI regulations, FEMA and other applicable laws rather than the financial statements. Our team has supported 10,000+ businesses since 2009, and runs the Section 204 audit to a clean MR-3 annexed to the Board’s Report.

What Is a Secretarial Audit?

A secretarial audit is an independent check of a company’s compliance with corporate and securities laws and governance standards, conducted by a Practising Company Secretary. It examines non-financial compliance, the Companies Act, SEBI regulations, FEMA and other applicable laws, and the company’s board processes.

Under Section 204, it is mandatory for listed and larger companies. The Practising Company Secretary reviews the records, flags non-compliances and reports in Form MR-3, which is annexed to the Board’s Report. It is the governance counterpart to the financial statutory audit.

Key Terms for Secretarial Audit:

Section 204: The provision that mandates secretarial audit for listed and prescribed companies.
MR-3: The form in which the secretarial audit report is given and annexed to the Board’s Report.
Practising Company Secretary: A member of the ICSI with a Certificate of Practice who can conduct the audit.
Peer Reviewed CS: A PCS with a valid ICSI peer review certificate, required for listed entities from 1 April 2025.
MGT-14: The form in which the Board resolution appointing the secretarial auditor is filed.

Section 204 Form MR-3

Who Must Have a Secretarial Audit under Section 204?

Secretarial audit applies on meeting any one of the tests in Section 204 and Rule 9.

Listed companies: Every listed company, without a threshold.
Public company, capital: Every public company with a paid-up share capital of 50 crore or more.
Public company, turnover: Every public company with a turnover of 250 crore or more.
Borrowings, any company: Every company, including a private company, with outstanding loans or borrowings from banks or public financial institutions of 100 crore or more.
Tested on audited figures: The capital, turnover or borrowings are taken as on the last date of the latest audited financial statement.

For the full service and engagement, see our secretarial audit service.

Our Section 204 Secretarial Audit Services

Service	What We Do
Applicability Assessment	We test your company against the listed, capital, turnover and borrowings criteria and confirm whether Section 204 applies.
Practising Company Secretary Engagement	We coordinate a Practising Company Secretary, and for listed entities a Peer Reviewed Company Secretary, to conduct the audit.
Appointment and MGT-14	We support the Board resolution appointing the secretarial auditor and the MGT-14 filing.
Compliance Review	We help compile and review the records across the Companies Act, SEBI, FEMA and other applicable laws for the audit.
MR-3 Report	We support the preparation of the Form MR-3 report and its annexure to the Board’s Report.
Remediation Support	We help address the non-compliances the auditor flags, so the next cycle is cleaner.

Our Process

Section 204 Secretarial Audit Process: Step by Step

How Patron runs a Section 204 secretarial audit, from assessing applicability and appointing the Practising Company Secretary through compiling records and conducting the audit to issuing the Form MR-3 report.

Step 1

Assess Applicability

Test the listed status, paid-up capital, turnover and borrowings against the Section 204 criteria.

Four tests Any one applies

Assess 01

Step 2

Appoint the Auditor

Pass a Board resolution appointing the Practising Company Secretary, and a Peer Reviewed CS for listed entities, and file MGT-14.

Board resolution MGT-14

Appoint 02

Step 3

Compile Records

Gather the records and registers across the Companies Act, SEBI, FEMA and other applicable laws.

Registers Multi-law

Compile 03

Step 4

Conduct the Audit

The Practising Company Secretary examines the records, the board processes and the compliances.

PCS reviews Board processes

Audit 04

Step 5

Address Findings

Review the observations and remediate the non-compliances where possible.

Observations Remediation

Address 05

Step 6

Issue MR-3

The auditor issues the Form MR-3 report, which is annexed to the Board’s Report.

Form MR-3 Board’s Report

MR-3 06

Information Required for a Secretarial Audit

Listed status, paid-up capital, turnover and borrowings figures.
Statutory registers and minutes of board and general meetings.
ROC filings and event-based filings for the year.
SEBI, FEMA and other sector-law compliance records, where applicable.
Board resolution appointing the secretarial auditor.
Prior year MR-3 and any open observations.

Need the full checklist? We share a tailored secretarial audit checklist when you engage us.

Common Secretarial Audit Challenges and Solutions

Challenge	Impact	How Patron Accounting Solves It
Unsure whether Section 204 applies	Applicability turns on four separate tests, including borrowings that catch private companies. We assess all of them and confirm the position.
Late or missing appointment	A late Board appointment or a missed MGT-14 delays the audit. We manage the appointment and the filing early.
Peer review for listed entities	From 1 April 2025, a listed entity’s secretarial auditor must be peer reviewed. We engage a Peer Reviewed Company Secretary so the audit is valid.
Scattered compliance records	The audit spans many laws and registers. We help compile and review them so the MR-3 is well supported.

Section 204 Secretarial Audit Fees

Fee Component	Amount
Patron Accounting Professional Fees	Scoped per engagement
What drives the fee	Company size, listing status, number of laws in scope and volume of records
Practising Company Secretary’s own fee	Confirmed as part of the engagement
MCA filing fees	Confirmed as part of the engagement

All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.

Because a secretarial audit depends on the company’s size, listing status, the number of laws in scope and the volume of records, the fee is quoted after a short scoping call rather than as a fixed figure. The Practising Company Secretary’s own fee, and any MCA filing fees, are confirmed as part of the engagement.

Get a free Secretarial Audit consultation - Call +91 945 945 6700 or WhatsApp us. No-obligation assessment.

Secretarial Audit Timeline at a Glance

Stage	Estimated Timeline
Cycle	Follows the financial year and feeds the Board’s Report
Appointment	Best at the start of the year by Board resolution, MGT-14 within 30 days
Through the year	The auditor reviews compliance and, for many, submits quarterly observations
MR-3	Completed and issued in time to be annexed to the Board’s Report

A secretarial audit follows the financial year and feeds the Board’s Report. It is best to appoint the secretarial auditor at the start of the year by Board resolution, with the MGT-14 filed within 30 days, so the auditor can review compliance through the year and, for many, submit quarterly observations. The audit is completed and the MR-3 issued in time to be annexed to the Board’s Report. We plan the calendar so the MR-3 is ready when the Board’s Report is finalised.

Key Benefits

Why Choose Professional Secretarial Audit Support

Applicability Across All Four Tests

The listed, paid-up capital, turnover and borrowings tests are all assessed, including the borrowings test that catches private companies.

Practising or Peer Reviewed CS Engaged

A Practising Company Secretary - and, for listed entities, a Peer Reviewed Company Secretary - is engaged so the audit and the MR-3 are valid.

Appointment and MGT-14 Handled

The Board resolution appointing the secretarial auditor and the MGT-14 filing are handled early so the audit is not delayed.

Compliance Gaps Surfaced and Remediated

The review across the Companies Act, SEBI, FEMA and other laws surfaces non-compliances, which are remediated for a cleaner next cycle.

Clean MR-3 for the Board’s Report

The Form MR-3 is well supported and issued in time to be annexed to the Board’s Report.

Coordinated by a CA and CS Team

The Section 204 audit is coordinated end to end by a qualified Chartered Accountant and Company Secretary team.

Trusted by Businesses Across India

10,000+ Businesses Served | 4.9 Google Rating | 50,000+ Documents Filed | 15+ Years

"We crossed the borrowings threshold and did not realise secretarial audit now applied. Patron flagged it, engaged a PCS and delivered our MR-3." - Director, manufacturing company, Pune.

"As a listed company, we needed a peer reviewed secretarial auditor from 2025. Patron coordinated it and our MR-3 was clean." - Company Secretary, listed company, Mumbai.

Trusted by leading brands including Hyundai, Asian Paints and Bridgestone for accounting and compliance support.

With offices in Pune, Mumbai, Delhi, and Gurugram, Patron Accounting serves businesses across India - both in-person and remotely.

Secretarial Audit Compared with Statutory Audit

Factor	Secretarial Audit (Section 204)	Statutory Audit (Section 139)
Focus	Legal and governance compliance	Financial statements
Conducted by	Practising Company Secretary	Chartered Accountant
Report	Form MR-3	Auditor’s report to members
Who is covered	Listed and prescribed companies	All companies

Related Audit and Compliance Services

Secretarial audit sits within the audit family and the company’s wider compliance. Patron handles all of it.

Secretarial Audit service for our standard secretarial audit engagement and overview.
Statutory Audit for the financial audit of the company.
Internal Audit for process and control reviews.
Private Limited Company Compliance for the full annual compliance cycle.
Compliance Calendar to track the audit and Board’s Report dates.

Legal and Compliance Framework

Mandate: Section 204 of the Companies Act, 2013, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, requires a secretarial audit for every listed company and for the prescribed class of other companies, with the report annexed to the Board’s Report.

Thresholds: The prescribed companies are every public company with a paid-up share capital of 50 crore or more, every public company with a turnover of 250 crore or more, and every company, including a private company, with outstanding loans or borrowings from banks or public financial institutions of 100 crore or more, tested on the last date of the latest audited financial statement.

Auditor and report: Only a member of the ICSI holding a Certificate of Practice, a Practising Company Secretary, may conduct the audit and issue the report in Form MR-3, and the auditor is appointed by a Board resolution filed with the Registrar in Form MGT-14.

Peer review and penalty: For a listed entity, from 1 April 2025 under the SEBI LODR Third Amendment, the secretarial auditor must additionally be a Peer Reviewed Company Secretary, and non-compliance with Section 204 attracts a penalty under Section 204(4) on the company, the officers in default and the company secretary in practice in default.

Refer to the MCA portal for the form and to Section 204 on IndiaCode for the bare provision.

What is a secretarial audit under Section 204?

A secretarial audit under Section 204 of the Companies Act, 2013 is an independent verification of a company’s compliance with corporate and securities laws and governance standards, conducted by a Practising Company Secretary. The auditor examines the company’s records, board processes and compliances under the Companies Act, SEBI regulations, FEMA and other applicable laws, and reports in Form MR-3.

Which companies must have a secretarial audit?

Secretarial audit is mandatory for every listed company, every public company with a paid-up share capital of 50 crore or more or a turnover of 250 crore or more, and every company, including a private company, with outstanding loans or borrowings from banks or public financial institutions of 100 crore or more. The figures are tested as on the last date of the latest audited financial statement, and meeting any one test is enough.

What is Form MR-3?

Form MR-3 is the format in which the secretarial audit report is given. After examining the company’s compliances, the Practising Company Secretary issues the report in Form MR-3, listing the laws reviewed, the compliance position and any qualifications or observations. The MR-3 report is then annexed to the Board’s Report, so it forms part of the company’s annual disclosures to its members.

Who can conduct a secretarial audit?

Only a Company Secretary in Practice, a member of the Institute of Company Secretaries of India holding a valid Certificate of Practice, can conduct a secretarial audit and sign the Form MR-3 report. For a listed entity, from 1 April 2025 under the SEBI LODR amendment, the secretarial auditor must additionally be a Peer Reviewed Company Secretary holding a valid peer review certificate from the ICSI.

How is a secretarial auditor appointed?

The secretarial auditor is appointed by the Board of Directors by a resolution passed at a board meeting, and that resolution is filed with the Registrar of Companies in Form MGT-14 within 30 days of being passed. It is good practice to appoint the secretarial auditor at the start of the financial year, so the auditor can review compliance through the year rather than only at the end.

How does a secretarial audit differ from a statutory audit?

A statutory audit under Section 139 examines the company’s financial statements and is conducted by a Chartered Accountant. A secretarial audit under Section 204 examines the company’s legal and governance compliance and is conducted by a Practising Company Secretary, reported in Form MR-3. They are complementary, and where both apply, the company coordinates them to align findings and avoid duplication.

What is the peer review requirement for listed entities?

From 1 April 2025, under the SEBI LODR Third Amendment Regulations, 2024, a listed entity’s secretarial auditor must be a Peer Reviewed Company Secretary, that is a PCS who holds a valid peer review certificate issued by the ICSI. This is in addition to the Certificate of Practice requirement, and it applies specifically to listed entities, so listed companies should confirm their auditor’s peer review status.

What is the penalty for not conducting a secretarial audit?

Where a company fails to comply with the secretarial audit requirement, Section 204(4) provides for a penalty on the company, every officer of the company in default, and the company secretary in practice in default. Beyond the monetary penalty, a missing or qualified MR-3 reflects on the company’s governance and can attract regulatory attention, so timely and clean compliance is important.

Secretarial audit kab lagu hota hai?

Secretarial audit har listed company par, aur public company par jiska paid-up capital 50 crore ya turnover 250 crore ho, ya 100 crore se zyada borrowings wali company par lagu hota hai.

MR-3 kaun sign karta hai?

MR-3 report sirf ek Practising Company Secretary sign karta hai, aur listed company ke liye use Peer Reviewed CS bhi hona zaroori hai.

Quick Answers

Who is covered? Listed, large public, and 100 cr plus borrowing companies.

Capital and turnover? 50 cr paid-up or 250 cr turnover.

Auditor? A Practising Company Secretary.

Report? Form MR-3, annexed to the Board’s Report.

Why Get It Right

Section 204 catches more companies than many expect. The 100 crore borrowings test brings in even private companies, and from 2025 a listed entity needs a peer reviewed secretarial auditor. Missing the audit, a late appointment, or a qualified MR-3 draws penalties and reflects on governance. A clear applicability check and a well-run audit keep the company compliant and the Board’s Report clean.

Check your applicability - Call +91 945 945 6700 or WhatsApp us. We respond within 2 hours.

Plan Your Secretarial Audit with Patron Accounting

Secretarial audit under Section 204 is a governance audit for listed and larger companies: it applies on the listed status or the capital, turnover or borrowings tests, is conducted by a Practising Company Secretary, and is reported in Form MR-3 annexed to the Board’s Report, with a peer review requirement for listed entities from 2025.

Patron Accounting, with a qualified CA and CS team and offices in Pune, Mumbai, Delhi and Gurugram, assesses your applicability and runs the audit to a clean MR-3.

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Secretarial Audit Support Across India

In-person and remote Section 204 secretarial audit and MR-3 support from our offices in Pune, Mumbai, Delhi and Gurugram.

Related Audit and Compliance Services

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Content Created: 3 June 2026 | Last Updated: | Next Review: 4 September 2026 | Reviewed By: CA & CS Team, Patron Accounting LLP

This page is reviewed at least yearly and updated whenever Section 204, Rule 9 of the Managerial Personnel Rules, 2014, the 50 crore capital, 250 crore turnover and 100 crore borrowings tests, the MR-3 report mechanics, the MGT-14 appointment route, or the SEBI LODR peer-review requirement for listed entities change. Freshness Tier 1.

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