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

Mr Iyer, the company secretary of Sagar Cements Ltd, a listed company, argues that because he reports to the Board on compliance under section 205, the Board need not annex a secretarial audit report. Which response is correct?

The argument is wrong. Section 204 independently requires a secretarial audit report from a company secretary in practice annexed to the Board's report. The in-house secretary's compliance reporting function under section 205 is a separate duty and does not replace or dispense with the audit report.

  1. ACorrect, as section 205 replaces section 204 for listed companies
  2. BCorrect, if the Board passes a resolution adopting his compliance report
  3. CIncorrect, as the audit report must be given by a company secretary in practice and section 205 does not affect the section 204 requirementCorrect
  4. DIncorrect, but only because the audit committee must sign the report instead

Explanation

Section 205(1) gives the company secretary functions such as reporting to the Board on compliance. Section 204 separately requires a report from a company secretary in practice annexed to the Board's report. Section 205(2) states that sections 204 and 205 do not affect the duties of the Board and other officers; neither replaces the other.

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