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CS Professional · Compliance Management, Audit and Due Diligence · Secretarial Audit

Himalaya Textiles Ltd, whose equity shares are listed on the BSE, is preparing its Board's report under section 134(3) for the year. The CFO says that because the company is small, it may skip the secretarial audit report. Under section 204(1), what is the correct position?

Every listed company must annex a secretarial audit report, given by a company secretary in practice, to its Board's report under section 204(1). Smallness does not exempt a listed company; thresholds matter only for other prescribed classes of companies.

  1. AThe company must annex a secretarial audit report given by a company secretary in practice, because it is a listed companyCorrect
  2. BThe report is needed only if the company's paid-up capital exceeds a prescribed limit
  3. CThe report is optional and depends on a Board resolution
  4. DThe report must be given by a statutory auditor, not a company secretary

Explanation

Section 204(1) says every listed company, and companies of other prescribed classes, shall annex a secretarial audit report with the Board's report. The report must be given by a company secretary in practice. Size-based thresholds apply only to the 'other prescribed classes', not to listed companies.

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