Retirement of directors

Two Directors

Brother two cannot be an answer because additional directors always retire at next AGM. So answer will be greater than 4. Next time please give calculations for your answer.

Additional Directors as per Section 161(1) of CA 2013  hold office upto the date of AGM, he cant be counted for calculation of retirement by rotation. The additional Directors can either be regularized at the said AGM or resign from the post of directorship.

But sir additional directors are counted for calculating total number of directors as per section 152. So directors liable to retire by rotation should be 2/3rd of 12 i.e 8. and retiring directors are 5. Does'nt it make the constitution of board wrong?
Allow me to reframe the last line..'Who shall be vacating the office at next AGM?'

Dear Arshan,
Thanks for the query,
in reference of above first we will link few sections,
152(6) Retirement of directors
Not less than 2/3rd of TNOD of a Pub. co. be persons whose pd. of office is liable to

*in continuation
be determined by retirement of directors by rotation and BE APPOINTED BY THE COMPANY IN GENERAL MEETING.
The remaining directors (Non rotational dir.) ALSO BE APPOINTED BY THE COMPANY IN GENERAL MEETING.
At every AGM nearest to 1/3rd of SUCH of the directors FOR THE TIME BEING AS(WHO ARE ROTATIONAL DIRECTORS) Are liable to retire by rotation.
Meaning of TNOD will not include Independent directors and only includes those directors who are appointed in GM.
161(1) Articles may grant power to BOD to appoint Additional director to hold office till next AGM.
Thus he will not be a retiring director for sec152 but will vacate office at next AGM, thus,
TNOD=8
Rotational dir.=5.33/Not less than 2/3rd of TNOD ie 6
Retiring Dir.=2 (nearest to 1/3rd of Rotational dir.)
Additional Dir. liable to vacate office at AGM=4
Thus, total no. of directors vacating office=6

Hope this answers your query,
Should you have any issues please write back.

Thanks,
Abhimanyu

Sir section 161(1) does not override section 152(6) therefore for calculating total number of directors additional directors will be added as explanation to 152(6) clearly states only independent directors will be excluded from 'total no of directors'. Will that not make rotational directors 2/3rd of 12?

Please reply.

And sir your solution says 6 rotational directors but rotational director appointed by company is 5 in the question. Is the constitution of board wrong?

Arshar Good evening,
Thanks for reverting,
1. Reason of not clearly stating about Exclusion of Add. dir. from TNOD is because it is already out of the calculation of TNOD, the reason is hidden in sec 152 itself, if you would read section 152(2) it provides that every director should be appointed in a general meeting( except otherwise provided by the act)
Now, you would appreciate the fact that sec 152(2) has full effect over the entire section 152 if not the act, for least, and Additional directors are appointed in a board meeting not a general meeting thus, no question of them to be included in TNOD, now only those directors are to be considered for TNOD who were appointed in a GM, had there be no explanation to sec 152(6), we would have included Independent directors too in TNOD, but due to its existence we specifically exclude I.Ds, need to incert this explanation was simply because I.Ds are appointed in a GM, and act does not want them to retire by rotation in any case,
Now, as per 156(6) atleast 2/3rd of TNOD be ROTATIONAL DIRECTORS ie. directors liable to retire by rotation and rest of TNOD will be non rotational, In the que TNOD are 8 directors, of which atleast 2/3rd shall be ROTATIONAL DIRECTORS (not retiring) which comes to 6, in the given question 100% of the TNOD are rotational directors,
now of NEAREST TO 1/3RD SHALL BE RETIRING DIRECTORS, that comes to 2, where as in the question there are 5 retiring directors which is acceptable since company can provide for it.
And as all the additional directors are required to vacate at the AGM, the total no of directors vacating office will be 4+5=9, which is higher than statutory minimum as stated in my previous reply.

Hope this answers your query,
should you have further issues plz revert back,

Thanks,
Abhimanyu

Dear Arshad,
Greetings,
I had a doubt about the inclusion or exclusion of Add. dir. in TNOD thus, went in search of right,
And I am very happy that you were right about including Add. dir. appointed in TNOD, but add. dir. are not to be included in Rotational directors 2/3rd no. thus all additional directors are non rotational.
I am sorry for my previous reply,
Sec. 152(2) though asks for GM appointment but saves otherwise to become just a general rule.
Now,
In your question,
5 are retiring
3 are non retiring
ie. total 8 directors are rotational directors.
TNOD are 5+3+4=12
who's 2/3rd is 8 thus company has appointed max. no. of additional directors.
now 5 of retiring will vacate and also 4 of additional directors will also vacate the office, thus total vacation will be 9.

Many Thanks for reading,
Should you have anything plz revert,
Abhimanyu

Dear Abhimanyu

It is no where written in the Act that Additional director shall not be included in "Total no. of directors" while computing Minimum number of rotational directors. However, such Additional director(s) are always non-rotational because their tenure has been fixed by the Act itself i.e. till next AGM. Though by complying Section 160 such additional director can become regular director in the company.

Dear Abhimanyu

1. A director filling a casual vacancy is appointed by the Board, same as in case of an additional director. So, as per your reasoning, a director filling a casual vacancy shall not be included in TNOD. Do you agree?

2.As per Sec. 152(2), every director shall be appointed in GM (unless otherwise provided in any other provision of the Act). I also agree that additional directors are appointed in BM, and not in GM. But, from these 2 statements, how can you arrive at the conclusion that additional directors shall not be included in TNOD? Still, if this conclusion is accepted, the same conclusion shall apply to a director filling a casual vacancy, and so a director filling a casual vacancy shall not be included in TNOD. Do you agree?