Cairn non-executive directors set for a commission windfall

New Delhi, June 9: Vedanta Group’s Cairn India will pay 1% of net profit as commission to its non-executive directors, including mining baron Anil Agarwal's daughter Priya and brother Navin, over and above their sitting fees.

The Board of Cairn India, which operates the nation's biggest onland oilfield in Rajasthan, comprises eight directors, seven of whom are non-executive. Of these, four are independent directors.

The company has moved a special resolution for approval by its shareholders at its annual general meeting on July 21 for payment of“a sum not exceeding 1%( or such other percentage,as maybe permissible under law) of the net profits of the company per annum” as commission to non-executive directors.

The Companies Act of 2013 provides for a company paying remuneration to its non-executive directors by way of commission if it is approved by the company at the general meeting.

Cairn’s shareholders at the A GM held on August 18,2011, had approved the remuneration payable to non-executive directors by way of commission not exceeding 1 per cent of net profits for 5 years commencing from April 1, 2011. This ended on March 31, 2016.

In a notice to shareholders, Cairns aid it is seeking nod for future payments of commission to the non-executive directors. “Considering the rich experience and expertise brought to the board, it is proposed that remuneration not exceeding 1% of the net profit of the company... be continued to be paid and distributed among the non-executive directors,” the notice said.

Such payment will be in addition to the sitting fees paid to the directors for attending board and other meetings.

Cairn board comprisesbrother, Na vin, as the chairman and non-executive director. Anil's daughter Priya, 26, is also a non-executive director.