CS Professional · Compliance Management, Audit and Due Diligence · Documentation and Maintenance of Records
Kaveri Power Ltd proposes to appoint Ms Anita Rao as an independent director at its general meeting. The company secretary is drafting the explanatory statement to the notice. What must the explanatory statement indicate under Section 150?
The explanatory statement must indicate the justification for choosing the appointee as independent director. Section 150(2) requires this in the statement annexed to the general meeting notice considering the appointment, so the members can see why the person was selected.
- AThe justification for choosing the appointee as independent directorCorrect
- BOnly the remuneration payable to the appointee
- CThe list of all other persons available in the data bank
- DThe date on which the appointee registered with the data bank
Explanation
Section 150(2) requires that the explanatory statement annexed to the notice of the general meeting called to consider the appointment shall indicate the justification for choosing the appointee. Remuneration or the list of other candidates is not what the sub-section prescribes.
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