Special Resolution under Regulation 17(6)(ca) of SEBI (LODR)

In accordance with Regulation 17(6)(ca) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the approval of shareholders of a company by special resolution  is required to be obtained every year, in which the annual remuneration payable to a single non-executive director exceeds 50% of the total annual remuneration payable to all non-executive directors, giving details of the remuneration thereof.

Templates of such a special resolution under regulation 17(6)(ca) are given hereunder for your reference—

SAMPLE #1

#. Payment of Commission to Ms./Mr. ....................., Non-Executive 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 sections 197, 198 of the Companies Act, 2013 ("the Act") read with Regulation 17(6)(ca) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and rules made thereunder, the consent of the members of the company be and is hereby accorded to the payment of commission at a rate of 1% (One percent) of the net profits of the company for the financial year 20XX-XX to Mr./Ms. ...................., Non-Executive Director of the company, computed in the manner prescribed under section 198 of the Act, which may exceed 50% (Fifty percent) of total remuneration payable to all Non-Executive Directors for the financial year 20XX-XX.

FURTHER RESOLVED THAT the above mentioned total remuneration shall be in addition to the fees payable to him/her for attending the meetings of the Board or Committees thereof or for any other purpose whatsoever as may be decided/approved by the Board of Directors (including any Committee thereof) and reimbursement of various expenses incurred in performance of his/her duties including travelling and other out-of-pocket expenses as required from time to time.

FURTHER RESOLVED THAT the Company Secretary of the company be and is hereby authorised to do all such acts, deeds and things as may be necessary to give effect to the foregoing resolutions.”

SAMPLE #2

#. To approve the annual remuneration amount of Ms./Mr. ....................., Non-Executive Director

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

“RESOLVED THAT pursuant to the provisions of Regulation 17(6)(ca) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, and subject to the applicable provisions of the Companies Act, 2013 and the Articles of Association of the company, approval of the members be and is hereby accorded for payment of annual remuneration of INR ................./- (Indian Rupees ......................... only) for the financial year 20XX-XX to Ms./Mr. ....................., Non-Executive Director of the company, being an amount exceeding fifty percent of the total annual remuneration payable to all the Non-Executive Directors of the company.”

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

Item No. ...

In the ..th Annual General Meeting held on (Date), the members of the company had granted their approval for payment of remuneration/ commission to the Director(s) of the company who is/are neither in the whole-time employment with the company nor Managing Director(s) of the company, in such manner and to such extent as the Board of Directors of the company may determine from time to time on the recommendation of the Nomination and Remuneration Committee, but not exceeding 3% of the net profits calculated in accordance with section 198 of the Companies Act, 2013 and such payments shall be made in respect of profits of the company for each financial year.

On the recommendation of Nomination and Remuneration Committee, the Board of Directors of the company at its meeting held on (Date) approved a remuneration of INR ................./- (Indian Rupees ......................... only) payable to Mr./Ms. ........................., Non-Executive Director of the company for the financial year 20XX-XX, including sitting fees payable for the meetings attended during the year.

Mr./Ms. ..................... has ...years of rich and extensive experience in the ............... industry. He/She has been instrumental in guiding the company towards the growth and sustainability. His/Her vision has seen the company achieve high standards of corporate governance, innovation, brand visibility and growth-oriented project investments. Mr./Ms. ..................... has been playing a pivotal role in the growth of the company and thereby also maximizing stakeholder value.

The Board deems it appropriate to recognize his/her contribution and compensate such amount as remuneration as it deems fair. Pursuant to the terms of Regulation 17(6)(ca) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the approval of shareholders by special resolution is required for payment of remuneration in excess of 50% of the total annual remuneration payable to all the Non-Executive Directors.

Except Mr./Ms. .............................. and his/her relatives, none of the other directors, key managerial personnel of the company or their respective relatives, in any way, concerned or interested, financially or otherwise, in the resolution set out in Item no. ... of the accompanying Notice.

The Board commends the passing of the resolution as set out in Item No. ... of the Notice for approval of the Members as a Special Resolution.

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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.