(4 ) A person appointed director in place of a person removed under this section shall be treated, for the purpose of determining the time at which he or any other director is to retire, as if he had become director on the day on which the person in whose place he is appointed was last ap pointed a director. (5 ) Nothing in this section shall be taken as depriving a person removed thereunder of compensation or da mages payable to him in respect of the termination of his appointment as director or of any appointment terminating with that as director or as derogating from any power to remove a director which may exist apart from this section. 176 Prohibition of tax-free payments to directors (1 ) It shall not be lawful for a company to pay a director remuneration, whether as director or otherwise, free of any taxation in respect of income, or otherwise calculated by reference to or var ying with the amount of such taxation or with the rate of taxation on incomes, except under a contract which was in force on the 1st January, 1952, and provides expressly, and not by reference to the articles, for payment of remuneration as aforesaid. (2 ) Any provision contained in a company’s articles or in any contract other than such a contract as aforesaid, or in any resolution of a company or a company’s directors, for payment to a director of remuneration as aforesaid shall have effect as if it provided for payment, as a gross sum subject to taxation, of the net sum for which it actually provides. 177 Prohibition of loans to directors (1 ) It shall not be lawful for a company to make a loan to any person who is its director or a director of its holding company or to enter into any guarantee or provide any security in connection with a loan made to such a person as aforesaid by any other person: Provided that nothing in this section shall apply— (a ) subject to subsection (2), to anything done to provide any such person as aforesaid with funds to meet expenditure incurred or to be incurred by him for the purposes of the company or for the purpose of enabling him properly to perform his duties as an officer of the company; or (b ) in the case of a company whose ordinary business includes the lending of money or the giving of guarantees in connection with loans made by other persons, to anything done by the company in the ordinary course of that business; or (c) to anything done by a private company, which is not a subsidiary company, with the consent of members holding at least nine-tenths of the issued share capital; or (d ) to the making of a loan to a director with a view to enabling him to purchase or subscribe for fully paid shares in the company to be held by him or in trust for him, if the loan is made in accordance with section seventy-three. (2 ) Paragraph (a) of the proviso to subsection (1 ) shall not authorize the making of any loan or the entering into any guarantee or the provision of any security, except— (a ) with the prior approval of the company given at a general meeting at which the purposes of the expenditure and the amount of the loan or the extent of the guarantee or security, as the case may be, are di sclosed; or (b ) on condition that, if the approval of the company is not given as aforesaid at or before the next following annual general meeting, the loan shall be repaid or the liability under the guarantee or security shall be discharged, as the case may be, within six months from the conclusion of that meeting. (3 ) Where the approval of the company is not given as required by any such condition, the directors authorizing the making of the loan or the entering into the guarantee or the provision of the security shall be jointly and severally liable to indemnify the company against any loss arising therefrom. (4 ) In the event of any default in complying with subsection (1 ) every officer of the company who is in default shall be guilty of an offence and liable to a fine not exceeding level ten or to imprisonment for a period not exceeding two years or to both such fine and such imprisonment. [Section as amended by Act No. 22 of 2001] 178 Approval of company requisite for payment by it to director for loss of office It shall not be lawful for a company to make to any director of the company any payment by way of compensation for loss of office or as consideration for or in connection with his retirement from office, without full particulars with respect to the proposed payment, including the amount thereof, being disclosed to members of the company and the proposal being approved by the company in general meeting. 179 Approval of company requisite for payment in connection with transfer of its property to director for loss of office (1 ) It shall not be lawful, in connection with the transfer of the whole or any part of the undertaking or property of a company, for any payment to be made by any person to any director of the company by way of compensation for loss of office or as consideration for or in connection with his retirement from office, unless particulars with respect to the proposed payment, including the amount thereof, have been disclosed to the members of the company and the proposal approved by the company in general meeting.