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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Empowerment of the Company Secretary Profession

Kisan Agro Producer Company Limited has had an average annual turnover of Rs 7 crore in each of the last three consecutive financial years. The board has not appointed any secretary. Under the Companies Act, 2013, what is the position?

The company must have a whole-time secretary. Section 378X(1) applies to a Producer Company whose average annual turnover exceeds five crore rupees in each of three consecutive financial years, and Rs 7 crore clearly crosses that limit, so the absence of a secretary is a non-compliance.

  1. AIt must have a whole-time secretary because its average annual turnover exceeds five crore rupees in each of three consecutive yearsCorrect
  2. BIt need not have a secretary because a Producer Company is treated like a private company
  3. CIt must have a secretary only if its paid-up capital exceeds ten crore rupees
  4. DIt may appoint a part-time secretary, as the Act only requires a secretary for companies with turnover above fifty crore rupees

Explanation

Section 378X(1) requires every Producer Company with average annual turnover exceeding five crore rupees (or such other prescribed amount) in each of three consecutive financial years to have a whole-time secretary. Rs 7 crore exceeds the threshold, so the requirement applies. The private-company analogy does not remove this specific obligation.

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