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

While planning the secretarial audit of Lotus Retail Ltd, the auditor prepares a checklist and wants to include the duties of the company secretary under section 205. Which item correctly reflects those functions?

One of the company secretary's functions under section 205 is to report to the Board about compliance with the Act, the rules and other applicable laws, and to ensure compliance with secretarial standards. It does not replace the duties of the Board or the managing director.

  1. AReporting to the Board about compliance with the Act, the rules and other laws applicable to the companyCorrect
  2. BAppointing the statutory auditors of the company
  3. CApproving related party transactions in place of the Audit Committee
  4. DReplacing the duties of the managing director under the Act

Explanation

Section 205(1) lists the company secretary's functions: reporting to the Board on compliance with the Act, rules and other applicable laws, and ensuring compliance with applicable secretarial standards. Section 205(2) says sections 204 and 205 do not affect the duties of the Board, chairperson, managing director or whole-time director, so options replacing those duties are wrong.

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