Corporate Accounting and Auditing · Secretarial Audit

Secretarial Audit Report in Form MR-3: Format and Contents

Updated 10 October 2026 · Fact-checked

The secretarial audit report is the report a company secretary in practice gives after auditing a company's secretarial and related records. It is made in the prescribed form, Form MR-3, and annexed to the Board's report under section 134(3). To answer questions, state who gives it, its contents, qualifications and the Board's duty to explain them.

Understand Secretarial Audit Report (Form MR-3)

A secretarial audit checks whether a company has complied with the law and its own governance records. The auditor is a company secretary in practice, not the statutory auditor. The result of the audit is a written report.

Section 204(1) of the Companies Act, 2013 says every listed company, and a company of other prescribed classes, must annex a secretarial audit report to its Board's report. The Board's report is the one made under section 134(3). The report must be given in the form prescribed. That prescribed form is Form MR-3.

Form MR-3 is a structured report. It is addressed to the members of the company. It names the company, the financial year covered, and states that the auditor has examined the books, papers, minute books, forms and returns filed and other records. It then reports on compliance with applicable laws, rules, regulations, standards and guidelines. Its usual contents are: the audit period, the Acts and rules checked, secretarial standards, a statement of compliance or non-compliance, and the auditor's observations or qualifications. It ends with the auditor's signature, with date, place, membership and certificate of practice numbers. Learn this layout in outline rather than as exact wording. Check the form's current text in your study material for the exact list of laws covered.

The auditor may make a qualification, observation or other remark. This means a point where the company did not comply or where the auditor wants to draw attention to something. Under section 204(3), the Board must explain in full each such qualification, observation or remark in its own report under section 134(3). So the link is: audit, report in MR-3, annex to Board's report, Board explains the remarks.

The company also has a duty under section 204(2). It must give all assistance and facilities to the auditor to audit the secretarial and related records.

Key rules to remember

Who must annex the report: Listed companies + other prescribed classes → annex secretarial audit report to Board's report (s. 204(1)); The report is annexed to the Board's report made under section 134(3).
Who gives the report: Company secretary in practice, in the prescribed form (Form MR-3); Not the statutory auditor. Do not say the cost auditor or CA gives it.
Duty of the company: Give all assistance and facilities to the auditor (s. 204(2)); Covers auditing of secretarial and related records.
Duty of the Board: Explain in full every qualification, observation or other remark (s. 204(3)); The explanation goes in the Board's report under section 134(3).
Penalty for contravention: Company, every officer in default, and the company secretary in practice in default: penalty of ₹2,00,000 (s. 204(4)); The text says 'liable to a penalty of two lakh rupees'.

How to solve Secretarial Audit Report (Form MR-3) questions

Use this order for any theory or case question on the secretarial audit report.

1Identify whether the company is covered: listed, or another prescribed class.
2Name the auditor: a company secretary in practice.
3State the form: Form MR-3, annexed to the Board's report under section 134(3).
4List the contents: audit period, records examined, laws and standards checked, compliance statement, qualifications or observations, signature details.
5If the case has a qualification or remark, state that the Board must explain it in full in its report.
6Mention the company's duty to give assistance and facilities.
7If the case involves a default, state the penalty of ₹2,00,000 on the company, officers in default and the auditor in default.
8Conclude with a one-line answer to the exact question asked.

Quickest way: Four-point recall: Who, What, Where, Then

When to use it: For MCQs and short notes when you have under two minutes.

Who: company secretary in practice gives it.
What: Form MR-3, report on compliance after examining records.
Where: annexed to the Board's report under section 134(3).
Then: Board explains in full any qualification, observation or remark; default attracts ₹2,00,000 penalty.

Common mistakes in Secretarial Audit Report (Form MR-3)

Saying the statutory auditor or a cost auditor signs the secretarial audit report.
All three audits are covered in the same paper and the roles blur.
Fix: Link secretarial audit with company secretary in practice every time.
Writing that the report goes to the Registrar or the Central Government instead of being annexed to the Board's report.
Students mix it with other filings.
Fix: Remember section 204(1): annex with the Board's report made under section 134(3).
Forgetting the Board's duty to explain qualifications.
Students stop at the auditor's report and treat it as the end of the process.
Fix: Add section 204(3): the Board must explain in full any qualification, observation or other remark.
Stating the penalty wrongly or only for the company.
Students remember a number but not who is liable.
Fix: Section 204(4): company, every officer in default and the company secretary in practice in default; ₹2,00,000.
Saying every company must get a secretarial audit.
Overgeneralising from the rule for listed companies.
Fix: Say listed companies and other prescribed classes of companies.

Worked examples

Example 1

Explain the contents of the secretarial audit report in Form MR-3 and state how it is connected with the Board's report.

Show the solution

State the basis: section 204(1) requires a secretarial audit report by a company secretary in practice, in the prescribed form, Form MR-3.
Give the contents: the company and period covered; a statement that records, minute books, forms and returns were examined; the laws, rules, regulations and secretarial standards checked; the auditor's findings on compliance; qualifications, observations or remarks; and the auditor's signature with date, place and membership details.
Give the link: the report is annexed to the Board's report made under section 134(3).
Add the Board's duty: under section 204(3), the Board must explain in full any qualification, observation or other remark in its report.

Answer: The report is given by a company secretary in practice in Form MR-3, sets out the audit scope and compliance findings with any qualifications, and is annexed to the Board's report, where the Board must explain all qualifications in full.

Example 2

A listed company's secretarial auditor noted in the report that certain returns were filed late. The Board's report did not mention this point. The company also refused the auditor access to the minute books. Advise on the position under section 204.

Show the solution

The company is listed, so it must annex a secretarial audit report to its Board's report (s. 204(1)).
The late filing is an observation or remark in the report. Under section 204(3), the Board must explain it in full in its report. Silence is a contravention.
Refusing access to minute books breaches section 204(2), which requires the company to give all assistance and facilities for auditing secretarial and related records.
Under section 204(4), the company and every officer in default are liable to a penalty of ₹2,00,000. The same penalty applies to the company secretary in practice if he or she is in default.

Answer: The company has contravened section 204(2) and 204(3). The company and each officer in default are liable to a penalty of ₹2,00,000 under section 204(4). The Board must explain the late-filing remark in full in its report.

Exam tips

Write section 204 with its sub-sections; examiners reward precise references: (1) annexure, (2) assistance, (3) Board's explanation, (4) penalty.
In MCQs, watch for options naming the wrong auditor or the wrong report to which it is annexed.
In a written answer, give the contents of MR-3 as a short numbered list so each point can earn a mark.
For case questions, do not stop at identifying the breach; state the penalty and who bears it.
Do not quote the full text of the form; the outline of contents is enough.

Practice questions from Secretarial Audit

Secretarial Audit Report (Form MR-3) in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

CS ProfessionalSecretarial Audit Report and Form MR-3

Secretarial Audit Report (Form MR-3): frequently asked questions

What is Form MR-3?

It is the prescribed form for the secretarial audit report under section 204. A company secretary in practice uses it to report on the company's compliance after examining its records.

Where is the secretarial audit report attached?

It is annexed to the Board's report made under section 134(3). Section 204(1) requires this for every listed company and other prescribed classes.

What must the Board do about qualifications in the report?

Under section 204(3), the Board must explain in full any qualification, observation or other remark made by the company secretary in practice. The explanation goes in the Board's report.

What is the penalty for contravening section 204?

The company, every officer in default and the company secretary in practice in default are liable to a penalty of ₹2,00,000 under section 204(4).