Company Secretary of Mask Ltd., a listed company, having the following unlisted subsidiary companies, is seeking your advice whether an independent director is required to be appointed in these unlisted subsidiary compan

Provisions relating to Independent Directors are covered under section 149 of the Companies Act, 2013. However, listed companies are also required to follow relevant SEBI (LODR) Regulations. As per Regulation 24(1) of the SEBI (LODR) Regulations, 2015 at least one independent director on the Board of Directors of the listed company shall be a director on the Board of Directors of an unlisted material subsidiary, whether incorporated in India or not. Explanation - For the purposes of this provision, notwithstanding anything to the contrary contained in Regulation 16, the term 'material subsidiary' shall mean a subsidiary, whose income or net worth exceeds twenty percent of the consolidated income or net worth respectively, of the listed company and its subsidiaries in the immediately preceding accounting year. Further, spouse of an independent director cannot be appointed as an independent director. Section 149(6)(b)(ii) provides that an independent director in relation to a company means one who is not related to promoters or directors in the company, its holding, subsidiary or associate company. Name Net Worth as on 31st March 2022 (Rs in crore) Consolidated Net Worth of Mask Ltd. as on 31st March 2022 (Rs. in crore) Correct Answer Cure Ltd. 120 3,500 Not required Impact Ltd. 560 Not required Taj Ltd. 800 Required Wife cannot take up a role of an independent director if spouse is already appointed as an independent director in subsidiary of the qualified company.