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After a compliance lapse at Sundaram Agro Ltd, its managing director argues that since the company secretary has a statutory duty to report on compliance, the managing director is no longer answerable for the lapse. What is the position under Section 205?

The argument fails. Section 205(2) says that Sections 204 and 205 do not affect the duties and functions of the Board, chairperson, managing director or whole-time director under the Act or any other law. The secretary's reporting role does not relieve the managing director.

  1. AThe argument is correct because the secretary's functions replace those of the managing director
  2. BThe argument is correct only if the secretary gave no report to the Board
  3. CThe argument is wrong because Sections 204 and 205 do not affect the duties and functions of the Board, chairperson, managing director or whole-time directorCorrect
  4. DThe argument is wrong only because the company is unlisted

Explanation

Section 205(2) states that Sections 204 and 205 shall not affect the duties and functions of the Board of Directors, the chairperson, managing director or whole-time director under the Act or any other law. The secretary's role is additional and does not displace executive responsibility.

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