Secretarial audit and due diligence are the work this firm was built around. Where a company’s statutory record has to be examined by someone independent — because the law requires it, because an investor or a lender will not release funds without it, or because the company intends to list — this is the practice group that does it.
The work is documentary and unforgiving. A resolution passed at a meeting that was not properly convened, a charge that was created but never registered, an allotment made without the valuation the section requires — these do not usually surface in ordinary operations. They surface during a transaction, at the worst possible moment. Our job is to find them first, say plainly what they are, and set out what it takes to put them right.
Secretarial Audit
Secretarial audit is a statutory examination of whether a company has complied with the Companies Act, 2013 and the other laws that apply specifically to it. It is not a review of the accounts and it is not an opinion on the business. It is an independent check on whether the corporate record — meetings, resolutions, registers, filings, disclosures and approvals — reflects what the law required the company to do.
The report is issued in Form MR-3 and is annexed to the Board’s Report, which means it is read by shareholders, lenders, regulators and, eventually, by anyone conducting diligence on the company. A qualification in it is permanent. We therefore run the audit as an audit and not as a formality: scoped in writing, tested against evidence, and reported without softening.
- Agreeing scope, period and the list of applicable laws in a written engagement letter before work begins
- Examining statutory registers under Section 88 — members, directors, charges, related party contracts and loans
- Testing notices, agendas, attendance and minutes of Board, committee and general meetings against Secretarial Standards SS-1 and SS-2
- Verifying e-forms actually filed with the Registrar against the events that triggered them, and reconciling filing dates
- Reviewing share capital movements — allotments, transfers, transmissions, buy-back and reduction — against the authority relied on
- Checking creation, modification and satisfaction of charges and the corresponding CHG filings
- Reviewing significant beneficial ownership declarations, deposits, CSR, related party transactions and directors’ disclosures
- Reviewing the sector laws specifically applicable to the company — SEBI regulations, FEMA, labour and environmental statutes as the case may be
- Issuing Form MR-3 with clear qualifications where they are warranted, supported by a detailed management letter of observations
We do not hand over a qualified report without warning. Observations are raised as they arise, in a running list, so that anything capable of being cured within the audit period is cured before the report is signed rather than discussed afterwards.
Where a default cannot be cured — a filing that is already late, an approval that was never taken — we set out the regularisation route in the management letter: whether it is a compounding application, an adjudication, or a condonation, what it will cost, and how long it takes.
We maintain full working papers for every engagement. If a regulator questions a position three years later, the file that supports it still exists and can be produced.
Secretarial audit is mandated by Section 204 of the Companies Act, 2013, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The section reserves this work to a Company Secretary in Practice — no other professional may issue the report.
For listed entities, Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 requires an annual secretarial audit and an annual secretarial compliance report, extending to material unlisted subsidiaries, and requires the secretarial auditor to be a peer-reviewed Company Secretary in Practice.
We conduct engagements in accordance with the ICSI Auditing Standards CSAS-1 to CSAS-4 on audit engagement, audit process and documentation, forming of opinion and secretarial audit, and we test meeting processes against Secretarial Standards SS-1 and SS-2, which are mandatory under Section 118(10) of the Act.
Our authority to practise derives from the Company Secretaries Act, 1980. The firm holds a Certificate of Practice and a peer review certificate issued by the ICSI.
Secretarial Due Diligence
Secretarial due diligence answers a different question from an audit. An audit asks whether the company complied. Diligence asks what an acquirer, an investor or a lender is actually taking on — which defaults are live, which are curable, which affect title to shares, and which could become a liability of the buyer after completion.
We are engaged for this work both directly by corporates and, very often, by Chartered Accountants and Merchant Bankers running a wider transaction. Because we do not offer accounting, statutory audit or taxation services, we never compete with the firm that brings us the work.
- Reconstructing the company’s share capital history from incorporation — every allotment, transfer, split, bonus, buy-back and reduction — and confirming the authority for each
- Searching and downloading the complete MCA and Registrar record, including all e-forms, charges and the index of charges, and reconciling it against the company’s own registers
- Verifying board composition, appointments, resignations, DIN status and disqualification under Section 164
- Reviewing minutes and resolutions for the approvals that the transaction will rely on
- Examining related party transactions, loans and guarantees, and inter-corporate deposits against Sections 185, 186 and 188
- Identifying show-cause notices, adjudication orders, prosecutions and pending proceedings
- Reviewing FEMA reporting where there is foreign shareholding, and licence and registration status
- Delivering a red-flag report and a full report, each defect graded by seriousness with a specific curing route
Our reports are written to be used, not filed. Each finding states the provision breached, the consequence, whether it is curable, the route to cure it, and an honest estimate of time and cost. A finding without a remedy is of no use to a deal team.
We work to the transaction’s calendar. Where a closing date is fixed we agree the cut-off and the delivery dates at the outset and hold to them, and we flag a deal-relevant defect the day we find it rather than at the end of the exercise.
Where the same defects will need regularising post-completion, the same team carries the compounding, adjudication or condonation application through to order — nothing is handed to a stranger.
Secretarial due diligence is a contractual engagement rather than a statutory audit. The competence to carry it out and to certify the corporate record flows from the Company Secretaries Act, 1980, which defines the practice of the profession to include verification, certification and advisory work in relation to company law.
Under the Companies Act, 2013, a Company Secretary in Practice is the professional recognised to certify a company’s statutory records and filings, including the annual return in Form MGT-8 under Section 92(2). That same competence underpins the diligence exercise.
For listed companies, Regulation 76 of the SEBI (Depositories and Participants) Regulations, 2018 requires a quarterly reconciliation of share capital audit by a Company Secretary in Practice, and Regulation 40(9) of SEBI (LODR) requires a half-yearly certificate on transfer of securities — both of which we issue.
The firm holds an ICSI peer review certificate, which lenders and investment committees increasingly require of the professional signing a diligence report.
Legal Due Diligence
Legal due diligence goes beyond the corporate record into the contracts, property, employment, litigation and regulatory approvals on which the business actually runs. It is the exercise that tells a buyer whether the company owns what it says it owns and whether anything is capable of being taken away from it.
This work is led by our Associate Partner – Legal, Adv. (CS) Prerna Gaur Bhardwaj, an Advocate enrolled with the Bar Council of India. Reports are certified by a practising Advocate, which is what investment committees and lending institutions increasingly ask for.
- Title and chain of ownership for immovable property, leases, and licences to occupy
- Review of material contracts — customer, supplier, distribution, technology and financing — with particular attention to change-of-control, assignment and termination clauses
- Litigation search and analysis: civil, commercial, criminal, consumer, tax, labour and regulatory proceedings, and their realistic exposure
- Employment and labour compliance, including contracts, policies, statutory registrations and POSH compliance
- Intellectual property ownership, registration status, assignments and licences
- Regulatory licences, approvals and consents, and whether they survive the proposed transaction
- Security, guarantees and encumbrances, cross-checked against the charge record
- A certified report identifying deal-breakers, conditions precedent, indemnity items and post-closing actions
Because the legal and secretarial teams sit in the same office and work from the same file, a contractual finding and the corporate approval that should have supported it are cross-checked against each other rather than reported separately by two firms who never speak.
Findings are translated into the transaction documents. We draft the conditions precedent, the specific indemnities and the post-closing covenant list that follow from the report, so the diligence actually changes the deal rather than sitting alongside it.
For litigation and allied court work we act together with Prehit Legal, our legal partner firm, which gives the engagement full courtroom capability where a matter is contested.
Legal due diligence is carried out and certified by an Advocate enrolled with the Bar Council of India under the Advocates Act, 1961, who alone may practise the profession of law and appear before the courts.
The corporate law component is carried out by Company Secretaries in Practice under the Company Secretaries Act, 1980 and the Companies Act, 2013.
Where a matter proceeds to the Tribunal, Section 432 of the Companies Act, 2013 permits a party to be represented by a legal practitioner or a company secretary, and Rule 45 of the NCLT Rules, 2016 governs the appointment of an authorised representative. We have both capabilities within the firm.
Making Corporates IPO Ready
A public issue is the point at which every historical corporate action a company has ever taken is read by a merchant banker, a legal counsel, an exchange and a regulator. Approvals that were assumed, allotments made without the prescribed valuation, minutes that were never signed, charges never satisfied on the record — all of it surfaces, and all of it has to be disclosed.
IPO readiness is the exercise of finding those items early, curing what can be cured, and regularising the rest through the proper statutory route, so that the offer document discloses a clean and defensible position rather than a list of open defaults.
- A full compliance health check from incorporation to date across the Companies Act, FEMA and applicable sector laws
- Reconstruction and verification of the capital build-up table that the offer document will carry, with the authority for each issuance
- Review of private placements and preferential allotments against Sections 42 and 62 and the rules, including valuation and use of proceeds
- Conversion of the company to a public limited company, alteration of the memorandum and articles, and board restructuring
- Constitution of the Audit, Nomination and Remuneration and Stakeholders Relationship Committees, and appointment of independent directors and a whole-time Company Secretary
- Adoption of the policies and codes a listed entity must have in place, including the insider trading code and structured digital database
- Regularisation of past defaults through compounding, adjudication or condonation, so that they are disclosed as concluded rather than pending
- A dated correction roadmap with owners and deadlines, tracked to closure
We give the promoter an honest read at the start. Some companies are twelve months away from being in a position to file, not three, and it is better to hear that from us than from the merchant banker after the mandate is signed.
We work alongside the appointed merchant bankers, legal counsel and statutory auditors rather than duplicating them. Our part is the corporate and secretarial record, and the regularisation of everything found in it.
Because the same team runs our compounding and adjudication practice, a default identified in the readiness review is taken through to a concluded order by the people who found it.
The compliance work is carried out under the Companies Act, 2013 and the rules made under it, and regularisation is pursued under Section 441 (compounding), Section 454 (adjudication) and Sections 460 and 87 (condonation of delay).
Listing readiness is assessed against the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 and, for the post-listing regime the company is preparing to enter, the SEBI (LODR) Regulations, 2015 and the SEBI (Prohibition of Insider Trading) Regulations, 2015.
Certification of the corporate record for the offer document is work reserved to professionals recognised under the Companies Act, 2013 and the Company Secretaries Act, 1980. A peer-reviewed Company Secretary in Practice is required for a number of these certifications.
Working with us
Audit and diligence engagements are led personally by CS Mohit Bhardwaj, Founder and Managing Partner, a Fellow Member of the ICSI, and are supported by our legal and finance partners so that a corporate finding, its legal consequence and its effect on the accounts are considered together.
The firm is peer-reviewed by the ICSI and maintains complete working papers for every engagement. Where an engagement is time-critical — a closing date, a filing deadline, a board meeting at which the report must be tabled — we agree the delivery date in writing at the outset and tell you early if anything threatens it.
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This page describes the services offered by MPS & Associates, Company Secretaries, and the statutory provisions under which that work is carried out. It is general information about our practice and is not legal advice, an opinion or a solicitation. Statutory thresholds and procedures change; the position applicable to a particular company should be confirmed before it is acted upon.