DEF Ltd. was established 10 years ago and is in the business of manufacturing Electronic Chips which are used in electronic toys for the children. The Company listed in NSE and BSE, was the main buyer consisting of about

CS Professional · Capital Commodity and Money Market · PYQS · December 2021
DEF Ltd. was established 10 years ago and is in the business of manufacturing Electronic Chips which are used in electronic toys for the children. The Company listed in NSE and BSE, was the main buyer consisting of about 90% of DEF Ltd.'s total sale. LMN Ltd. uses one customized Chip manufactured by DEF Ltd. mainly for the production of one model of toy called 'Teletotto'. It came to the notice of Ministry of Information and Technology, Government of India that the toy 'Teletotto' poses a threat to national security and accordingly ordered the stoppage the production and sale of the same toy and also instructed the company to deactivate the Chip in the toys already sold. As a Company Secretary of DEF Ltd., comment on: (i) Whether any disclosure was required before the order of Ministry of Information and Technology?

Answer & Explanation:

As per Section 134(3) of the Companies Act 2013, a statement indicating development and implementation of a risk management policy for the company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company. This has to form part of Director's Report.

Topics: Corporate Governance

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