CS Executive · Company Law and Practice · General Meetings
Zenith Agro Ltd, a public company, proposes to appoint Mr. Rao as an independent director at its general meeting. Under the Companies Act, 2013 (section 150), what must the explanatory statement annexed to the notice of that meeting indicate?
The explanatory statement must indicate the justification for choosing the appointee as independent director. Section 150(2) links the general meeting approval of the appointment with this disclosure, so shareholders know why the person was selected from the data bank.
- AThe justification for choosing the appointee as independent directorCorrect
- BThe total remuneration paid to all directors in the last three years
- CThe net worth of the appointee as certified by the auditor
- DThe list of all companies where the appointee has been a member
Explanation
Section 150(2) requires the appointment of an independent director to be approved by the company in general meeting, and the explanatory statement annexed to the notice must indicate the justification for choosing the appointee. The other items are not what that sub-section requires.
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