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

Sagar Steels Ltd's company secretary, Divya, finds that the Board's meeting procedures breach a secretarial standard issued by ICSI and approved by the Central Government. The Board chairperson says she need only report this and has no further role. Applying Section 205(1), which view is most accurate?

Divya's functions include ensuring that the company complies with applicable secretarial standards, as well as reporting to the Board on compliance. Section 205(1)(b) makes this a distinct function, so limiting her role to reporting is incorrect.

  1. ADivya's functions include ensuring that the company complies with applicable secretarial standards, in addition to reporting to the Board on compliance with the Act, rules and other lawsCorrect
  2. BDivya's role is limited to reporting; secretarial standards are for the Board alone to ensure
  3. CDivya's function covers only the Companies Act and not secretarial standards
  4. DDivya must conduct the internal audit to resolve the breach

Explanation

Section 205(1)(b) lists ensuring that the company complies with applicable secretarial standards as a separate function, alongside the reporting function in clause (a). So the chairperson's view that she only reports is incomplete. Internal audit under Section 138 is by an internal auditor, not the company secretary as such.

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