Companies Act Section 204 — Secretarial audit for bigger companies

CHAPTER XIII APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL

Commercial / Corporate

Summary

Sub-section (1) requires every listed company, and any other class of company that the government may prescribe, to attach a secretarial audit report to its Board's report. This audit report must be given by a company secretary in practice, and it must be in the form that the government prescribes.

Sub-section (2) places a duty on the company to provide all assistance and facilities to the company secretary in practice, so that the secretary can audit the company's secretarial and related records.

Sub-section (3) requires the Board of Directors, in their report, to fully explain any qualification, observation, or other remark that the company secretary in practice has made in the audit report under sub-section (1).

Sub-section (4) states that if a company, any officer of the company, or the company secretary in practice contravenes the provisions of this section, then the company, every officer who is in default, or the company secretary in practice, as the case may be, will be liable to a penalty of two lakh rupees.

Official Text

(1) Every listed company and a company belonging to other class of companies as may be prescribed shall annex with its Board’s report made in terms of sub-section (3) of section 134, a secretarial audit report, given by a company secretary in practice, in such form as may be prescribed.

(2) It shall be the duty of the company to give all assistance and facilities to the company secretary in practice, for auditing the secretarial and related records of the company.

(3) The Board of Directors, in their report made in terms of sub-section (3) of section 134, shall explain in full any qualification or observation or other remarks made by the company secretary in practice in his report under sub-section (1).

(4) If a company or any officer of the company or the company secretary in practice, contravenes the provisions of this section, the company, every officer of the company or the company secretary in practice, who is in default, shall be 2[liable to a penalty of two lakh rupees].