Introduction
The appointment of a secretarial auditor is a critical compliance requirement for listed companies under the Securities and Exchange Board of India (SEBI) Listing Obligations and Disclosure Requirements (LODR) Regulations. With the revised guidelines effective from April 1, 2025, companies must follow a structured nine-step process to ensure proper appointment and regulatory compliance.
This comprehensive guide outlines the complete procedure for appointing a secretarial auditor, incorporating the latest SEBI circular dated December 31, 2024 and ICSI guidelines.
What is a Secretarial Auditor?
A secretarial auditor is a qualified Company Secretary who conducts secretarial audits to ensure compliance with applicable laws, regulations, and corporate governance requirements. The appointment is mandatory for listed companies and certain other categories of companies as specified under the Companies Act, 2013.
Step-by-Step Procedure for Appointment of Secretarial Auditor of a Listed Entity
Step 1: Recommendation of Audit Committee
The process begins with the Audit Committee’s recommendation for the appointment, remuneration payable and other terms of appointment of a secretarial auditor, pursuant to Schedule II Part C of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations).
Key Requirements:
- Audit Committee must evaluate and recommend the appointment of auditor
- Consider the auditor’s qualifications, experience, and independence
- Ensure compliance with ICSI guidelines for secretarial auditor eligibility
- Document the recommendation in the Audit Committee meeting minutes
Documentation Required:
- Audit Committee meeting minutes
- Remuneration to be paid
- Proposed terms of engagement
Step 2: Board of Directors’ Recommendation
Following the Audit Committee’s recommendation, the Board of Directors must recommend the appointment, remuneration payable and other terms of appointment including the services to be rendered by the Secretarial Auditor.
Board Resolution Must Include:
- Recommendation for appointment of the secretarial auditor to the Shareholders
- Remuneration details – Fixed fee structure and payment terms
- Comprehensive list of services to be rendered by the secretarial auditor as per ICSI guidelines & SEBI Circular.
Reference Documents:
- ICSI List of Services (as per latest guidelines)
- SEBI FAQs on LODR requirements
- Annexure 2 & 3 of SEBI Circular dated December 31, 2024
To read the detailed list of activities that can be rendered by the Secretarial Auditor, click here.
Step 3: File Board Meeting Outcome
Timeline: Within 3 hours or 30 minutes (whichever is applicable)
Companies must file the board meeting outcome as per Regulation 30 of SEBI Listing Regulations, after the board meeting concludes.
Filing Requirements:
- PDF Filing: Board meeting outcome with complete details
- Annexure: Specific annexure for appointment of secretarial auditor as per SEBI Master Circular dated November 11, 2024 on SEBI Listing Regulations.
- XBRL Filing: Change in Management/Auditors XBRL to be filed within 24 hours of PDF filing.
Step 4: File MGT-14 (Section 179 Compliance)
File Form MGT-14 pursuant to Section 179 of the Companies Act, 2013 read with the Rules made thereunder, for board resolution for appointment of Secretarial Auditor.
Filing Details:
- Form: MGT-14
- Purpose: Board resolution for secretarial auditor appointment
- Timeline: Within 30 days of board meeting
- Fees: As prescribed under Companies (Registration Offices and Fees) Rules
Step 5: AGM Notice Filing
Prepare and file the Annual General Meeting (AGM) notice seeking shareholders’ approval for the secretarial auditor appointment.
Resolution Type: Ordinary Resolution
Explanatory Statement Requirements (Regulation 36):
- Name and qualifications of the proposed secretarial auditor
- Terms and conditions of appointment
- Remuneration structure
- Nature of services to be provided
- Justification for material change in remuneration payable to new auditor compared with outgoing auditor
- Board’s recommendation
- Details and credentials of Auditor
- Consent of Auditor
Key Compliance Points:
- Include all mandatory disclosures as per Regulation 36
- Ensure explanatory statement is comprehensive and informative as per Section 102
- Follow prescribed timeline for AGM notice
Step 6: Post-AGM Proceedings Filing
Timeline: Within 12 hours of AGM completion
File the complete AGM proceedings/ outcome after the meeting, within 12 hours of AGM.
Required Filings:
- AGM proceedings summary
- Brief details of items
- Attendance details
- Manner of approval
- Any other material information
Step 7: Post-Approval XBRL Filing
Once shareholders approve the appointment and voting results are filed:
Action Required:
- File Change in Management/Auditors XBRL with stock exchange
- Update all relevant details in Structured Digital Database
- Ensure consistency with previous filings
Timeline: Immediately after voting results are finalized
Step 8: MGT-14 Filing for Resolutions
File Form MGT-14 for resolutions passed in the AGM within 60 days of AGM, pursuant to MCA General Circular No. 14/2020 dated April 8, 2020.
Compliance Requirements:
- File within prescribed timeline
- Include all ordinary and special resolutions
- Ensure proper categorization and documentation
- Pay applicable fees
Step 9: Website Update
Update the company’s official website with the filings made with stock exchange(s) within 2 working days.
SEBI FAQs on LODR
Key clarifications on:
- Appointment procedure
- Qualification requirements
- Independence criteria
To view the SEBI FAQs, click here.
Timeline Summary
| Step | Action | Timeline |
|---|---|---|
| 1-2 | Audit Committee & Board Approval | As per meeting schedule |
| 3 | Board Meeting Outcome Filing | 30 minutes/3 hours |
| 3 | XBRL Filing | Within 24 hours |
| 4 | MGT-14 Filing (Section 179) | Within 30 days |
| 5 | AGM Notice | As per AGM timeline |
| 6 | AGM Proceedings | Within 12 hours |
| 7 | Post-approval XBRL | Immediately |
| 8 | MGT-14 (Post-AGM) | Within 60 days |
| 9 | Website Update | Immediately |
Common Pitfalls to Avoid
- Incomplete Board Resolutions: Ensure all required details are included
- Timeline Violations: Strict adherence to filing deadlines
- Inadequate Explanatory Statements: Comprehensive disclosure in AGM notice
- Website Update Delays: Immediate updating post-approval
- XBRL Filing Errors: Accuracy in stock exchange filings
Conclusion
The appointment of a secretarial auditor requires meticulous planning and execution across multiple regulatory touchpoints. Companies must ensure strict compliance with the nine-step procedure outlined above, paying particular attention to the revised timelines and enhanced disclosure requirements effective April 1, 2025.
Regular consultation with legal and compliance teams, along with the proposed secretarial auditor, will ensure smooth execution of the appointment process while maintaining full regulatory compliance.
Frequently Asked Questions
Q: Can the same secretarial auditor be reappointed? A: Yes, subject to compliance with independence requirements and board approval.
Q: What happens if filing deadlines are missed? A: Companies may face penalties and regulatory action. Immediate corrective action is required.
Q: Are there specific qualifications required for secretarial auditors? A: Yes, as per Regulation 24A of SEBI Listing Regulations.
Q: How is remuneration typically structured? A: Based on company size, complexity, and scope of services as approved by the board.
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Disclaimer: This guide is based on current regulations as of July 2025. Companies should consult with legal and compliance experts for specific situations and regular updates on regulatory changes. The information provided is for educational purposes and should not be construed as legal advice.
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