Special Resolution - Waiver of Excess Remuneration to Director

In accordance with sub-section (9) of section 197 of the Companies Act, 2013, if any director draws or receives, directly or indirectly, by way of remuneration any such sums in excess of the limit prescribed by this section or without approval required under this section, he shall refund such sums to the company, within two years or such lesser period as may be allowed by the company, and until such sum is refunded, hold it in trust for the company.

Further, as per sub-section (10) of the said section 197, the company shall not waive the recovery of any sum refundable to it under sub-section (9) unless approved by the company by special resolution within two years from the date the sum becomes refundable.

Templates of such special resolution for waiver of excess remuneration paid to any director are given hereunder for your reference—

SAMPLE #1

#. Approval of waiver of recovery of excess managerial remuneration paid to Ms./Mr. ..................., Chairman and Managing Director for the Financial Year 20XX-XX.

To consider and if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 197 of the Companies Act, 2013 read with Schedule V and other applicable provisions, if any, of the Companies Act, 2013 (the "Act") and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, including any amendments thereto or re-enactment thereof for the time being in force, the members of the company hereby approve the waiver for recovery of excess remuneration paid, over and above the limits prescribed under the provisions of Section 198 of the Companies Act, 2013 amounting to Rs. ............./- (Rupees ................................................ only) paid to Ms./Mr. ............................. (DIN: .....................), Chairman and Managing Director, during the financial year ended March 31, 20XX.

RESOLVED FURTHER THAT the Board of Directors of the company be and is hereby authorized to do all such acts, deeds, matters and things as may be considered necessary or desirable to give effect to this resolution in this regard.”

SAMPLE #2

#. Approval of members for payment of excess remuneration to Ms. ........ ............... (DIN: ..............), Managing Director and Chief Executive Officer for the financial year ended March 31, 20XX:

To consider and if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution:

“RESOLVED THAT further to the approval by the members for the payment of remuneration to Ms. ........ ............... (DIN: ..............), Managing Director and Chief Executive Officer, at the company’s ...th Annual General Meeting held on (Date), and pursuant to the provisions of Section 197, Schedule V and other applicable provisions of the Companies Act, 2013 (the ‘Act’) and the rules framed thereunder, including any modification(s) or re-enactment thereof from time to time, the excess remuneration of Rs. ...................../- (Rupees ...............................Only), as per the details annexed hereto in the explanatory statement, paid to Ms. ........ ............... for the financial year ended March 31, 20XX, be and is hereby approved and waived.

RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board of Directors of the company be and is hereby authorized to do all such acts, deeds, matters and things as may be necessary for obtaining necessary approvals in relation to the above and to execute all such documents, instruments and writings as may be required in this connection and to delegate all or any of its powers herein conferred to any Director, Company Secretary or any other officer(s) of the company. ”

SAMPLE #3

#. Approval for waiver of recovery of excess remuneration paid to Mr. ............................ (DIN: ..............), Ex-Wholetime Director of the Company

To consider and if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 197, read with Schedule V and other applicable provisions of the Companies Act, 2013 (the "Act") and the rules framed thereunder, including any amendment(s) thereto from time to time, and subject to necessary approvals, if any, the recovery of excess remuneration paid to Mr. ............................ (DIN: ..............), ex-Whole-time Director of the company (who resigned as the Whole-time Director of the company with effect from .................) amounting to Rs. ....................., for the period from (Date) to (Date), which was within the limits of the remuneration payable to Mr. ...................... as approved by the members by way of a special resolution passed at the ...th Annual General Meeting of the company held on (Date), be and is hereby waived.”

“RESOLVED FURTHER THAT the Board of Directors of the company ("Board") and/or the Nomination and Remuneration Committee of the Directors of the company ("NRC") and/or any other person authorized by the Board or NRC, be and is hereby authorized to take necessary actions and steps required to give effect to the foregoing resolution and to settle any question or difficulty arising in connection therewith or incidental thereto.”

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NOTE: The resolution sample(s) here is only for reference, to help you with drafting. Do refer the exact provisions of the Act, relevant rules framed thereunder and any other applicable laws to be able to not to miss out anything important while drafting.