CS Professional · Compliance Management, Audit and Due Diligence · Secretarial Audit
Ganga Power Ltd, a listed company, did not annex any secretarial audit report to its Board's report. The company secretary in practice it had engaged was never given access to the minute books despite repeated requests. Which statement best reflects section 204?
Section 204(4) makes the company, every officer in default, and the company secretary in practice in default each liable to a penalty of two lakh rupees for contravening the section. Denying records breaches the company's duty under section 204(2).
- AOnly the company is liable, since the practitioner has no duties
- BSection 204(4) provides a penalty of two lakh rupees on the company, every officer in default, and the company secretary in practice who is in default, for contravention of the sectionCorrect
- CPenalty applies only to the practitioner, under section 205
- DContravention carries no penalty unless a Tribunal order is obtained
Explanation
Section 204(2) puts a duty on the company to give all assistance and facilities for the audit. Section 204(4) imposes a penalty of two lakh rupees on the company, every officer, or the practitioner who is in default. Penalty is not confined to one party, and no Tribunal order is a precondition.
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