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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board Processes through Secretarial Standards

At a Board meeting of Kaveri Agro Ltd, the Company Secretary, Mr. Dinesh Iyer, tells the directors that a proposed transaction would breach a provision of the Companies Act, 2013 and also another law applicable to the company. Which function under Section 205(1) is he performing?

He is reporting to the Board about compliance with the Companies Act, its rules and other laws applicable to the company. This is a function listed in Section 205(1)(a). It covers other applicable laws as well, and it is advisory and reporting in nature, not an approval power.

  1. ADischarging duties under Section 204 as a secretarial auditor
  2. BReporting to the Board about compliance with this Act, the rules and other laws applicable to the companyCorrect
  3. CExercising the Chairperson's power to exclude matters from the minutes
  4. DApproving the transaction on behalf of the Board

Explanation

Section 205(1)(a) requires the company secretary to report to the Board about compliance with the Act, the rules and other applicable laws. The scope includes other laws, not only the Companies Act. Option A is wrong because Section 204 audit is done by a company secretary in practice, not the in-house secretary.

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