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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board Processes through Secretarial Standards

Lotus Steel Ltd, a listed company, has an in-house Company Secretary, Ms. Meera Shah, who reports compliance to the Board and ensures secretarial standards are followed. The Board claims that this removes the need to annex a secretarial audit report to its Board's report. Which analysis is correct?

The claim is wrong. A listed company must annex a secretarial audit report given by a company secretary in practice under Section 204(1). The in-house Company Secretary's functions under Section 205 are separate and do not substitute for that independent audit report.

  1. ACorrect, because Section 205 functions substitute for the Section 204 audit
  2. BIncorrect, because a listed company must annex a secretarial audit report given by a company secretary in practice, and Section 205 does not affect thisCorrect
  3. CCorrect, if Ms. Shah signs the Board's report herself
  4. DIncorrect, because the audit must be given by the statutory auditor

Explanation

Section 204(1) requires every listed company to annex a secretarial audit report given by a company secretary in practice. Section 205 sets the in-house CS's functions and does not replace the audit. An in-house secretary is not a company secretary in practice, and the statutory auditor does not give this report.

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