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

The secretarial auditor of Sundaram Engineering Ltd, a listed company, reports that two Board meetings were held with shorter notice than required and no valid reason is recorded. What must the Board do under section 204 when preparing its report?

The Board must explain in full, in its report under section 134(3), any qualification, observation or other remark made by the secretarial auditor, as section 204(3) provides. It cannot ignore the remark, pass it to the statutory auditor, or explain it only orally.

  1. AOmit the remark because it is a minor observation
  2. BRefer the remark to the statutory auditor for removal
  3. CExplain in full the qualification or observation in the Board's reportCorrect
  4. DExplain it only to the shareholders at the next general meeting orally

Explanation

Section 204(3) requires the Board, in its report under section 134(3), to explain in full any qualification, observation or other remarks made by the company secretary in practice. The remark cannot be dropped or deferred to oral explanation.

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