Rule 4 - Special resolution. - Unlisted Companies (Issue of Sweat Equity Shares) Rules, 2003

Special resolution. 04. (1) For the purpose of passing a special resolution under clause (a) of sub-section (1) of section 79A of the Companies Act, 1956 (1 of 1956), the explanatory statement to be annexed to the notice for the general meeting pursuant to section 173 of the said Act shall contain particulars as specified below: (i) the date of the meeting at which the proposal for issue of sweat equity shares was approved by the Board of Directors of the company; (ii) the reasons/justification for the issue; (iii) the number of shares, consideration for such shares and the class or classes of persons to whom such equity shares are to be issued; (iv) the value of the sweat equity shares alongwith valuation report/basis of valuation and the price at the which the sweat equity shares will be issued; (v) the names of persons to whom the equity will be issued and the person's relationship with the company; (vi) ceiling on managerial remuneration, if any, which will be affected by issuance of such equity; (vii) a statement to the effect that the company shall conform to the accounting policies specified by the Central Government; and (viii) diluted earning per share pursuant to the issue of securities to be calculated in accordance with the Accounting Standards specified by the Institute of Chartered Accountants of India. (2) Approval of shareholders by way of separate resolution in the general meeting shall be obtained by the company in case of grant of shares to identified employees and promoters, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversion) of the company at the time of grant of the sweat equity shares.