Greenstone Cements Ltd. is an unlisted company (the company). The company achieved the turnover of ₹300 crore during the year 2024-25. Malavika, the CFO of the company has put forward the following case scenarios for you

CS Executive · Company Law and Practice · PYQS · December 2025
Greenstone Cements Ltd. is an unlisted company (the company). The company achieved the turnover of ₹300 crore during the year 2024-25. Malavika, the CFO of the company has put forward the following case scenarios for your perusal, consideration and solution being a practicing company secretary. Case I: The Board of Directors made the following appointments at its meeting held on 1st July, 2025: (i) Anil, a director of its subsidiary company, Ruby Cements Ltd. was appointed as General Manager on a consolidated salary of ₹1,80,000 per month with effect from 1st July, 2025. (ii) Parimal, a relative of Kamal was appointed as director of Greenstone Cements Ltd. on 1st July, 2025. Further, the Managing Director appointed Kamal as Assistant Production Manager on a consolidated salary of ₹1,55,000 per month with effect from above date. Case II: The company is desirous of paying the following managerial remuneration: (i) Commission @ five percent of the net profits to its Managing Director. (ii) Directors other than the Managing Director are proposed to be paid a monthly remuneration of ₹2,50,000 and also commission @ one percent of the net profits subject to the condition that overall remuneration payable to ordinary directors including monthly remuneration payable to each of them shall not exceed two percent of the net profits. There will be equal distribution of commission among all the directors. Case III: The Board of Directors has decided to appoint an independent woman director and other independent directors, if so required at the upcoming Annual General Meeting (AGM). Case IV: The company has to convene its Annual General Meeting (AGM) on 25th September 2025. The notice for the AGM was issued by post on 1st September 2025. The managing director seeks clarification on certain issues relating to issuing notice of the AGM. Based on the above information and referring to the provisions of Companies Act, 2013 answer the following: With reference to the proposal of the Board to appoint an independent woman director and other independent directors advise whether the company is mandatorily required to make such appointments.

Answer & Explanation:

Woman Director Second proviso to Section 149(1) read with Rule 3 of Companies (Appointment and Qualification of Directors) Rules, 2014 following class of companies must have at least one Women Director: All listed companies, Public companies with paid-up capital of ₹100 crore or more; or With turnover of ₹300 crore or more. Independent Director: As per Section 149(4) of Companies Act 2013 read with rule 4 of the Companies (Appointment and Qualifications of Directors) Rules, 2014, every listed public company and certain classes of unlisted public companies (with paid-up share capital equal to or more than ₹10 crore or turnover equal to or more than ₹100 crore or outstanding loans, debentures and deposits equal to or more than ₹50 crore) shall have at least two directors as independent directors. Conclusion: In the given case the turnover of the company is ₹300 crore. Hence, the company is required to appoint at least 1 woman director and 2 independent directors. The company may appoint 1 independent-woman director. In that case it will have to appoint one more independent director.

Topics: Appointment and Qualification of Directors

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