Skip to content

CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Empowerment of the Company Secretary Profession

The secretarial audit report of Narmada Foods Ltd, a listed company, contains a qualification about delayed filing of a return. The managing director says the board need not mention it because the company secretary has already reported compliance gaps internally. Which view is correct under the Companies Act, 2013?

The board must explain in full the qualification in its Board's report. Section 204(3) imposes this duty on the Board for any qualification, observation or remark in the secretarial audit report. Internal reporting by the company secretary or later rectification does not remove the obligation.

  1. AThe board must explain in full the qualification in its report under section 134(3)Correct
  2. BThe board may ignore it if the company secretary has informed it internally
  3. COnly the statutory auditor must respond to such a qualification
  4. DThe qualification lapses if the delay is rectified before the AGM, so no explanation is needed

Explanation

Section 204(3) requires the Board of Directors, in its report under section 134(3), to explain in full any qualification, observation or other remarks in the secretarial audit report. Internal reporting by the company secretary under section 205 does not remove this duty, and later rectification is not an exemption in the text.

Did you get it right without looking?

One question tells you little. A timed set on Empowerment of the Company Secretary Profession shows your real accuracy, how long you take and where you lose marks.

Practise Empowerment of the Company Secretary ProfessionFree diagnostic mock

More Empowerment of the Company Secretary Profession questions