Disclosure of interest by directors

S.297 is attaracted since the company is entering into a contract with a director / relative of director of the company. Every contract covered under this secion requires the prior approval of the Board of Directors through a resolution passed at a Board Meeting. 

The following procedure is followed :

Board meeting should be held to discuss the terms of the contract.
Both the directors shall disclose he nature of their interest in the meeting. The disclosure shall be made at a Board meeting at which the question of entering into the contract is first considered.
Director shall disclose his interest either by way of a specific disclosure or by giving a general notice of his interest. (S.299)

The general notice shall be effective ONLY if it is given at a Board Meeting OR the director takes reasonable steps to ensure that it is brought up and read at the first Board meeting after it is given. Such general notice shall expire at the end of the financial year in which it is given.

Dear Aman,

Thanks a lot.