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

Meera Industries Ltd, a listed company, argues that since its company secretary reports on compliance to the Board under section 205, the duties of its managing director for compliance are reduced and a secretarial audit adds nothing. Which view fits the Act?

Under section 205(2), sections 204 and 205 do not affect the duties and functions of the Board, the chairperson, the managing director or a whole-time director under the Act or any other law. Secretarial audit and the company secretary's role therefore do not transfer or reduce those responsibilities.

  1. ASections 204 and 205 do not affect the duties and functions of the Board, chairperson, managing director or whole-time director under the Act or other lawsCorrect
  2. BThe managing director is relieved of compliance duties once a secretarial audit is done
  3. CThe company secretary alone becomes responsible for all compliance
  4. DThe Board's duties pass to the secretarial auditor on appointment

Explanation

Section 205(2) states that sections 204 and 205 do not affect the duties and functions of the Board, chairperson, managing director or whole-time director. The secretarial audit and the company secretary's reporting role supplement, and do not shift, those responsibilities.

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