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: Whether the length of the notice convening the AGM was valid ?

Answer & Explanation:

Section 101 of the Companies Act, 2013, a general meeting of a company may be called by giving not less than 21 clear days' notice either in writing or through electronic mode. Notice through electronic mode shall be given in such manner as may be prescribed. Para 1.2.6 of SS-2-For the purpose of reckoning twenty-one days clear Notice, the day of sending the Notice and the day of Meeting shall not be counted. Further in case the company sends the Notice by post or courier, an additional two days shall be provided for the service of Notice. The expression "twenty-one clear days", means that the date of service of Notice and the date of the Meeting are to be excluded when calculating the period of twenty-one days [N.V.R. Naggappa Chettair v. Madras Race Club (1949) 19 Comp. Cas. 175 (Mad)]. Further, fractions of days are not to be taken into account i.e. part of the day after the hour at which the Notice is posted cannot be combined with the part of the day before the Meeting commences, to form one day. Each of these days should be a full or a calendar day [Bharat Kumar Dilwali v. Bharat Carbon & Ribbon Mfg. Co. Ltd. (1973) 43 Comp. Cas. 197 (Del)). Intervening holidays are counted within the period of Notice. Where a notice of general meeting is sent by post, it shall be deemed to be served at the expiration of 48 hours after the letter containing the same is posted (Rule 35(6) of the Companies (Incorporation) Rules, 2014). Each of the 21 days must be full or complete days. The day on which the notice is deemed to be served on the member, and the day of the general meeting have to be in addition to the 21 days. In this case the date of notice and the date of meeting plus 2 days for postal transit i.e. total 4 days will be excluded. In the instant case, the duration of notice from 4th to 24th September, inclusive of 4th and 24th comes to 21 clear days. Hence, the length of notice is valid.

Topics: Meetings of Board and its Powers

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