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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 prescribed amount has not been changed from the figure in the Act. Which statement is correct?

The company must have a whole-time secretary. Section 378X(1) applies to every Producer Company whose average annual turnover exceeds Rs 5 crore, or the prescribed amount, in each of three consecutive financial years. Rs 7 crore crosses the limit, and private-company status or member count is irrelevant.

  1. AIt must have a whole-time secretary, because its average annual turnover exceeds Rs 5 crore in each of three consecutive yearsCorrect
  2. BIt need not have a whole-time secretary, because a Producer Company is treated as a private company
  3. CIt must have a whole-time secretary only if it has more than 200 members
  4. DIt may appoint a part-time secretary, because the law requires a whole-time secretary only for public companies

Explanation

Section 378X(1) requires every Producer Company with average annual turnover above Rs 5 crore (or the prescribed amount) in each of three consecutive financial years to have a whole-time secretary. Rs 7 crore exceeds this threshold. Being treated like a private company does not remove the obligation.

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