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

Sunrise Textiles Ltd is a listed company in Surat. Its Board is finalising the Board's report under section 134(3) for the year. The CFO says that because the company's turnover is modest, a secretarial audit report is optional. Under section 204(1), what is the correct position?

Every listed company must annex a secretarial audit report to its Board's report under section 204(1), irrespective of turnover. The report has to be given by a company secretary in practice, so neither a Board choice nor an in-house secretary can replace it.

  1. AA secretarial audit report from a company secretary in practice must be annexed to the Board's report, because the company is listedCorrect
  2. BA secretarial audit report is needed only if the Board passes a resolution to appoint a secretary-auditor
  3. CA secretarial audit report is needed only if the turnover crosses a limit fixed by the company's articles
  4. DThe company secretary in employment may give the report instead of a practising professional

Explanation

Section 204(1) says every listed company, and other prescribed classes of companies, must annex a secretarial audit report to the Board's report. Listing alone triggers the requirement, so turnover or a Board resolution is irrelevant. The report must come from a company secretary in practice, not an employee.

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