Skip to content

CS Professional · Compliance Management, Audit and Due Diligence · Documentation and Maintenance of Records

Himalaya Cements Ltd's board selected Mr. Arjun Rao from the data bank and wants to appoint him as an independent director immediately by board resolution alone, treating the data bank listing as sufficient authority. Under Section 150, which view is correct?

The appointment must be approved by the company in general meeting, and the explanatory statement to the notice must justify the choice. Being listed in the data bank does not substitute for shareholder approval, so a board resolution alone is insufficient.

  1. AThe appointment must be approved by the company in general meeting, with the explanatory statement giving the justification for the choiceCorrect
  2. BBoard resolution alone is sufficient because the person was in the data bank
  3. CApproval is needed only from the data bank body
  4. DThe Central Government must approve each such appointment individually

Explanation

Section 150(2) provides that the appointment of an independent director shall be approved by the company in general meeting, with the explanatory statement indicating the justification. Listing in the data bank does not replace this approval.

Did you get it right without looking?

One question tells you little. A timed set on Documentation and Maintenance of Records shows your real accuracy, how long you take and where you lose marks.

Practise Documentation and Maintenance of RecordsFree diagnostic mock

More Documentation and Maintenance of Records questions