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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board Disclosures and Website Disclosures

The Board of Sagar Pharma Ltd approved the Board's report, but it was signed by only one non-managing director although the chairperson was not authorised by the Board. Which statement is correct?

It is a default under Section 134 and attracts the Section 134(8) penalty. Where the chairperson is not authorised, the Board's report must be signed by at least two directors, one a managing director. A single non-managing director's signature does not comply.

  1. AIt is a default under Section 134, attracting the Section 134(8) penaltyCorrect
  2. BIt is valid since any one director may sign
  3. CIt is valid if the company secretary countersigns
  4. DIt attracts no penalty because signing is not covered by Section 134

Explanation

Section 134(6) requires signature by the chairperson if authorised, otherwise by at least two directors, one being the managing director. One non-managing director's signature does not satisfy this. Default in complying with the section attracts the penalty in Section 134(8).

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