In Pramod Ltd., vacancy of an independent director arose on 15th June, 2014. In the Board meeting held on 14th October, 2014, the Board of directors unanimously passed a resolution to appoint one of the nominee directors

"Independent Director" means a Non-Executive Director, other than a Nominee Director who fulfills the following criteria: who, in the opinion of the Ministry or Department of the Central Government which is administratively in charge of the company, or as the case may be, the State government, is a person of integrity and possesses relevant expertise and experience; who is or was not a promoter of the Company or its Holding, Subsidiary or Associate Company; who is not related to Promoters or Directors in the company, its holding, subsidiary or associate company; who has or had no pecuniary relationship with the company, its holding, subsidiary or associate company, or their promoters, or directors, during the two immediately preceding financial years or during the current financial year; none of whose relatives has or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company, or their promoters, or directors, amounting to two per cent. or more of its gross turnover or total income or fifty lakh rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year; who, neither himself nor any of his relatives- holds or has held the position of a Key Managerial Personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed; is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed, of- a firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company; or any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten per cent. or more of the gross turnover of such firm; holds together with his relatives two per cent. or more of the total voting power of the company; or is a Chief Executive or director, by whatever name called, of any nonprofit organisation that receives twenty-five per cent. or more of its receipts from the company, any of its promoters, directors or its holding, subsidiary or associate company or that holds two per cent. or more of the total voting power of the company; or who possesses such other qualifications as may be prescribed. In the given case, Board of Directors of Pramod Ltd has appointed one of the nominee directors as an independent director. The Director so appointed cannot be considered independent as he is a Nominee Director. Further, Schedule IV of the Companies Act, 2013, provides that the appointment of Independent Director(s) of the Company shall be approved at the meeting of the Shareholders. Hence, the appointment made by the Board of Directors of Pramod Ltd. is not valid.