Shareholders' Special Resolution for Issue of Commercial Paper

Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note.

It was introduced in India in 1990 with a view to enabling highly rated corporate borrowers to diversify their sources of short-term borrowings and to provide an additional instrument to investors. Subsequently, primary dealers and all-India financial institutions were also permitted to issue CP to enable them to meet their short-term funding requirements for their operations.

Corporates, primary dealers (PDs) and the All-India Financial Institutions (FIs) are eligible to issue CP.

Individuals, banking companies, other corporate bodies (registered or incorporated in India) and unincorporated bodies, Non-Resident Indians (NRIs) and Foreign Institutional Investors (FIIs) etc. can invest in CPs. However, investment by FIIs would be within the limits set for them by Securities and Exchange Board of India (SEBI) from time-to-time.

(Ref: RBI)

FORMAT OF SPECIAL RESOLUTION FOR ISSUE OF COMMERCIAL PAPER

#. Offer and Issue of Commercial Paper under Private Placement

“RESOLVED THAT pursuant to the provisions of Sections 42 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 and subject to all applicable laws and regulations, including but not limited to Listing Agreement entered with Stock Exchanges; SEBI (Issue and Listing of Debt Securities) Regulations, 2008; Foreign Exchange Management Act, 1999; the Reserve Bank of India Act, 1934, including any amendment(s) or re-enactment(s) thereof, and Articles of Association of the company, the consent of the members of the company be and is hereby accorded to the Board of Directors of the company (hereinafter referred to as "the Board" which term shall be deemed to include any Committee thereof) to borrow from time to time, by issuance of Commercial Papers ("CPs"), on Private Placement basis, with a view to augment the business of the company, upto an amount not exceeding Rs. ................. (Rupees ................................................ only), under one or more shelf disclosure documents, during the period commencing from ...(date)... until the conclusion of ...th Annual General Meeting ("AGM"), on such terms and conditions as the Board may deem fit and appropriate for each series as the case may be.

RESOLVED FURTHER THAT the said limit of Rs. ................. (Rupees ................................................ only) shall be within the overall borrowing limit approved by the members as per section 180(1)(c) of the Companies Act, 2013.

RESOLVED FURTHER THAT Mr. ................, Managing Director and Ms. ....................., Company Secretary be and are hereby severally authorised to sign all such forms and returns and other documents and to do all such acts, deeds and things as may be necessary to give effect to the foregoing resolution.”

Explanatory Statement
(pursuant to Section 102(1) of the Companies Act, 2013)

Section 42 of the Companies Act, 2013, read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 prescribe the provisions subject to which a company is allowed to issue Securities on Private Placement basis. Every proposed offer of Securities or invitation to subscribe to Securities on Private Placement basis requires prior approval of members of the company by way of Special Resolution. 

Your company has been borrowing through issue of Commercial Papers ("CPs") on Private Placement basis, from time to time to augment the business of the company. In view of the aforesaid provisions and considering its importance in business expansion, it is proposed to take the approval of the members for borrowing, from time to time, by issuance of Commercial Papers (CPs), on Private Placement basis, up to an amount not exceeding Rs. ................. (Rupees ................................................ only). The said limit of Rs. ................. shall be within the overall borrowing limit as may be approved by the members under Section 180(1)(c) of the Companies Act, 2013. 

The pricing of the CPs will depend primarily upon the then prevailing market conditions and the regulatory scenario. The pricing for each of the issuance would be approved by the Board of Directors or any of its Committee duly authorized in this regard.

None of the Directors or Key Managerial Personnel and / or their relatives, are in any way, financial or otherwise, interested or concerned in this resolution.

The Board commends the Special Resolution set out at Item No. ... of the accompanying Notice for approval by the members of the company.

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Relevant Resolution:

(1) Draft Board Resolution for Issue of Commercial Paper

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Imp. Note: Please refer the latest provisions of the Act and rules thereunder, and any other applicable provisions before finalising the resolution. The above mentioned resolutions are only specimen copy of resolutions for reference purpose only.