Skip to content

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

Shreya Pharma Ltd's secretarial auditor has qualified her report, noting a delay in filing a statutory return. While preparing the Board's report under section 134(3), the directors ask what they must do about this qualification. The correct position is that the Board's report must include:

The Board's report must give explanations or comments on every qualification, reservation, adverse remark or disclaimer by the company secretary in practice in the secretarial audit report, as well as those by the statutory auditor, as required by section 134(3)(f).

  1. ANothing, because secretarial audit remarks go only to the Registrar
  2. BExplanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the company secretary in practice in the secretarial audit reportCorrect
  3. CExplanations only for remarks made by the statutory auditor, not the secretarial auditor
  4. DA fresh certificate from the secretarial auditor withdrawing the qualification

Explanation

Section 134(3)(f) requires the Board's report to include explanations or comments on every qualification, reservation or adverse remark or disclaimer made by the auditor in his report and by the company secretary in practice in his secretarial audit report. The option limiting this to the statutory auditor ignores sub-clause (ii).

Did you get it right without looking?

One question tells you little. A timed set on Compliance Framework shows your real accuracy, how long you take and where you lose marks.

Practise Compliance FrameworkFree diagnostic mock

More Compliance Framework questions