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

In its secretarial audit report for the year, the auditor of Meridian Pharma Ltd, a listed company, notes that two Board meetings were held with shorter notice than the prescribed period and no consent for shorter notice was recorded. How must the Board deal with this observation in its report?

The Board must explain in full, in its report under section 134(3), any qualification, observation or other remark made by the practising company secretary in the secretarial audit report. Procedural lapses such as short-notice meetings are covered, and cannot be suppressed or omitted.

  1. AExplain in full the observation in the Board's reportCorrect
  2. BIgnore it, as observations on procedure need not be addressed
  3. COnly disclose it to the Audit Committee and omit it from the Board's report
  4. DAsk the auditor to delete it before the report is annexed

Explanation

Section 204(3) requires the Board, in its report under section 134(3), to explain in full any qualification, observation or other remarks made by the company secretary in practice. Procedural observations are included, and the Board cannot ask for their deletion.

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