CMA Intermediate · Corporate Accounting and Auditing · Secretarial Audit
Aarav Pharma Ltd, a listed company, fails to annex a secretarial audit report to its Board's report. The company, its officers in default, and the company secretary in practice who contravenes section 204 are each exposed to which consequence under the text of section 204(4)?
Each defaulting party, namely the company, every officer in default and the company secretary in practice, is liable to a penalty of two lakh rupees under section 204(4). The penalty is not confined to the company, and no imprisonment or disqualification is prescribed there.
- AImprisonment of up to one year
- BA penalty of two lakh rupees on the company, every officer in default, or the company secretary in practice in defaultCorrect
- CA penalty of two lakh rupees on the company only
- DDisqualification of directors for five years
Explanation
Section 204(4) provides that the company, every officer of the company or the company secretary in practice who is in default shall be liable to a penalty of two lakh rupees. It does not limit the penalty to the company and does not prescribe imprisonment or disqualification.
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