Compliance Management and Secretarial Audit — Practice

Question 1

Which form is a secretarial auditor's report prepared in?

Accepted Answer

Form MR-3.

Question 2

What is the private-company borrowing threshold that independently triggers mandatory secretarial audit?

Accepted Answer

Outstanding loans or borrowings from banks or public financial institutions of Rs. 100 crore or more.

Question 3

Within how many days of financial-year-end must the Annual Secretarial Compliance Report be filed, and in what format?

Accepted Answer

Within 60 days, in XBRL format.

Question 4

List all four categories of company Section 204 makes secretarial audit mandatory for.

Accepted Answer

Every listed company (any size); every public company with paid-up share capital of Rs. 50 crore or more; every public company with turnover of Rs. 250 crore or more; and every company (including private) with outstanding bank/PFI borrowings of Rs. 100 crore or more.

Question 5

Who is permitted to sign the Annual Secretarial Compliance Report with effect from 1 April 2025?

Accepted Answer

Only the Secretarial Auditor or a Peer Reviewed Company Secretary.

Question 6

Name the four ICSI Auditing Standards and state their individual scope.

Accepted Answer

CSAS-1 (Audit Engagement — terms and acceptance of the assignment), CSAS-2 (Audit Process and Documentation), CSAS-3 (Forming of Opinion), CSAS-4 (Secretarial Audit specifically).

Question 7

A private company has a paid-up share capital of Rs. 45 crore and a turnover of Rs. 200 crore, both below the respective public-company thresholds, and it is not listed. It also has no bank or PFI borrowings at all. Is it required to undergo secretarial audit? Explain fully.

Accepted Answer

No. The company is private and not listed, so the 'every listed company' category does not apply. The Rs. 50 crore paid-up capital and Rs. 250 crore turnover thresholds apply specifically to public companies, and this is a private company, so those thresholds are not the relevant test for it in the first place (though its figures of Rs. 45 crore and Rs. 200 crore fall below those figures regardless). With no bank or PFI borrowings at all, the Rs. 100 crore borrowing threshold — the one category that could independently sweep in an otherwise-unqualifying private company — is also not triggered. None of Section 204's four categories apply, so secretarial audit is not mandatory for this company.

Question 8

A small listed company falls below both the Rs. 50 crore paid-up capital and Rs. 250 crore turnover thresholds. Explain whether it is subject to (a) Section 204 secretarial audit and (b) the Annual Secretarial Compliance Report, and why these two answers might differ from a similarly-sized unlisted public company.

Accepted Answer

(a) Yes — it is subject to Section 204 secretarial audit regardless of its size, because the 'every listed company' category applies with no size threshold at all; the Rs. 50 crore and Rs. 250 crore thresholds are relevant only to a public company that is not listed. (b) Yes — it is also subject to the Annual Secretarial Compliance Report under LODR Regulation 24A, since that requirement is triggered by listing status, not by size. A similarly-sized unlisted public company, by contrast, would NOT be subject to secretarial audit (since it falls below both applicable size thresholds) and would not be subject to the ASCR at all (since that requirement applies specifically to listed entities) — illustrating that listing status, not company size, is the decisive factor for a small company in both cases.

Practice — Compliance Management and Secretarial Audit

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