Tag Archives: Managerial Remuneration

Application to Central Government for appointment of Managerial Personnel

Posted on October 5, 2018 | Leave a comment

[NOTE: The law stated in this post is effective from 12^th September 2018. For the law applicable from 1^st April 2014 till 11^th September 2018, please visit here.]

We discussed the appointment of managing director and whole time directors recently here as per the law effective from 12^th September 2018. A careful reading suggests that recent amendment done away with the requirement of the central government for payment of remuneration of managerial personnel. This amendment also eased procedure for appointment of managerial personnel with the limited requirement for central government approval for such an appointment. We will discuss the same, in this post.

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Managerial Remuneration during period of inadequate profit

Posted on September 28, 2018 | Leave a comment

[NOTE: The law stated in this post is effective from 12^th September 2018. For the law applicable from 1^st April 2014 till 11^th September 2018, please visit here and here.]

Any managerial remuneration exceeding 11% of net profit limit may be payable subject to compliance of conditions given in Schedule V.

Where a remuneration of managerial personal exceed respective limits of 1%, 3% 5%, or 10% specified in section 197 in any manner, it becomes remuneration in case of the inadequate profit and attracts approval company in general meeting by special resolution, subject to the provisions of Schedule V.

We have discussed Section 197 as amended update 12^th September 2018 earlier here. In this post, we will discuss managerial remuneration in case of inadequate profit as per Schedule V as on 12^th September 2018.

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MANAGERIAL REMUNERATION

Posted on September 21, 2018 | Leave a comment

[NOTE: The law stated in this post is effective from 12^th September 2018. For the law applicable from 1^st April 2014 till 11^th September 2018, please visit here and here.

In this post, we will discuss managerial remuneration. The managerial remuneration in case of inadequate profit shall be discussed in a future post, soon.

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APPOINTMENT OF MANAGING DIRECTOR AND MANAGER

Posted on September 14, 2018 | 2 comments

[NOTE: The law stated in this post is effective from 12^th September 2018. For the law applicable from 1^st April 2014 till 11^th September 2018, please visit here.]

The Managing Director is Key Managerial Personnel of utmost importance. He is the face of a company and its decision-making mechanism. A person gains significant advantages as the Managing Director which may not be there, in case of his appointment as the Manager or the Chief Executive Officer. While the Chief Executive Officer has no special advantage except his clubbing as a Key Managerial Personnel with the Manager and the Managing Director, the Manager has some advantage. Their definitions speak themselves. Appointment of Managing Director, Whole – Time Director and Manager is governed by the provision of Section 196 of the Companies Act, 2013. They all are a different class of Key Managerial Personnel and has the specific provision of appointment in addition to Section 203, discussed in an earlier post. Continue reading →

2 Comments

Posted in Chapter XIII - CA2013, Companies Act 2013

Tagged Key managerial personnel, Managerial Remuneration

Amendment in Schedule V

Posted on October 1, 2016 | 2 comments

Ministry of Corporate Affairs, on 12^th September 2016 issued notification amending Schedule V of the Companies Act, 2013. Schedule V deals with managerial remuneration in cases of inadequate profit and to some extend managerial appointment in public companies.

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Posted in Chapter XIII - CA2013, Companies Act 2013

Tagged Manager, Managerial Remuneration, Managerial Remuneration in case of inadequate profit, Managing Director, Professional Director

Recent Amendments in Managerial Remuneration Rules

Posted on July 29, 2016 | 2 comments

Ministry of Corporate Affairs came with amendment to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, last month. These rules has been published in official gazette on 30th June 2016 and came into force on that date. In this post, we will discuss these amendments.

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Posted in Chapter XIII - CA2013, Companies Act 2013

Tagged Board Report, Companies (Appointment and Remuneration of Managerial Personnel) amendment Rules 2016, Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, Managerial Remuneration

Board’s Report – 3

Posted on April 28, 2015 | 4 comments

In continuation of our earlier post dealing with Financial Statements and Boards’ Report, we will read Boards’ report of companies other than One Person Companies here.

Managerial Remuneration [Rule 5(1) of Managerial Remuneration Rules]:

Every listed company shall disclose in the Board’s report-

(i) the ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year;

The expression “median” means the numerical value separating the higher half of a population from the lower half and the median of a finite list of numbers may be found by arranging all the observations from lowest value to highest value and picking the middle one. If there is an even number of observations, the median shall be the average of the two middle values.

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4 Comments

Posted in Chapter IX - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged Boards’ Report, Financial Statements, India, Managerial Remuneration, MCA, Ministry of corporate affairs, Particulars of employees, Registrar of Companies, The Companies (Accounts) Rules 2014, The Companies Act 2013

Transition period for Managerial Remuneration

Posted on April 11, 2015 | 10 comments

This is very settled law that law applicable at the time of any act or action is law applicable to that action. This is also applicable on Company Law and for that matter also on managerial remuneration also.

The provisions of Schedule XIII (sixth proviso to Para (C) of Section ll of Part ll) of the Companies Act, 1956 (Earlier Act) and as clarified vide Circular number 14/11/2012-CL-VII dated 16th August, 2012, which allowed listed companies and their subsidiaries to pay remuneration, without approval of Central Government, in excess of limits specified in para II Para (C) of such Schedule if the managerial person met the conditions specified therein.

Similar provisions are not available in the Schedule V of the Companies Act, 2013. There is no need to worry because law that time was clear and applicable to the terms and conditions of agreement entered into that time. However, absence of similar provision in present law, may have a question that whether present law discontinue and invalidate act done under earlier law. Many stakeholders asked for a need for a clarification that a managerial person appointed in accordance with such provision of Schedule XIII of Earlier Act may receive relevant remuneration for the period as approved by the company in accordance with such provisions of Earlier Act.

Now, Ministry of Corporate Affairs through its General Circular 07/2015 dated 10^th April 2015 clarified this transitional matter.

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10 Comments

Posted in Chapter XIII - CA2013, Companies Act 2013

Tagged India, Managerial Remuneration, MCA, Ministry of corporate affairs, Registrar of Companies, The Companies Act 2013

ISSUES RELATED TO MANAGERIAL REMUNERATION

Posted on December 3, 2013 | 3 comments

We have much earlier discussed “Appointment of Managing Director and Manager” and “Managerial Remuneration in case of inadequate profit”. I understand, Section 197 read with Schedule V is a code for managerial remuneration. Now, we will discuss other relevant provision for managerial remuneration.

CALCULATION OF PROFIT (SECTION 198):

In computing the net profit of a company in any financial year credit shall be given for:

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3 Comments

Posted in Chapter XIII - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Directors Remuneration, Inadequate Profit, India, Legal Reforms, Loss of Office, Manager, Managerial Remuneration, Managing Director, Ministry of corporate affairs, Profit and Loss, Recovery of Remuneration, Reforms, Remuneration, Schedule V, Whole – time Director

BOARD MEETING UNDER COMPANIES ACT 2013

Posted on May 24, 2013 | 4 comments

UPDATE: on 30^th August 2013: Companies Bill 2012 became the Companies Act, 2013 (Act 18 of 2013).

The Board of Directors is most powerful body in a company. The Corporate governance is until now is governance of the Board.

The Companies Bill 2012 has dedicated chapter i.e. Chapter XII dealing with Board meetings and its power. In this blog I will discuss Board Meetings and in a future post power of Board of Directors.

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4 Comments

Posted in Chapter XII - CA2013, Companies Act 2013, Company Secretary, CorpGov, Governance and Responsibility, Secretarial Standards

Tagged Board of Directors, Board Resolution, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Director, Independent Director, Key managerial personnel, Manager, Managerial Remuneration, Managing Director, Minutes of Meeting, Notice, Quorum, Reforms, Related Party Transaction, Resolution by Circulation, Whole – time Director

BOARD COMMITTEES IN COMPANIES ACT 2013

Posted on May 17, 2013 | 7 comments

UPDATE: on 30^th August 2013: Companies Bill 2012 became the Companies Act, 2013 (Act 18 of 2013).

Delegation of Power is buzz word in this Companies Bill 2012. This delegation is not only from legislature to Executive but also from Board of Directors to its committees. Committees are not new to Indian Corporate Jurisprudence. Audit Committee was introduced in the present Companies Act, 1956 twelve years ago in year 2000. Schedule XII also has Remuneration committee.

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7 Comments

Posted in Chapter XII - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged Accounts and Audit, Audit Committee, Board Committee, Board of Directors, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Corporate Social Responsibility, Corporate Social Responsibility Committee, Cost Audit, CSR, CSR Committee, Director, Independent Director, Internal Audit, Investor grievances, Key managerial personnel, Legal Reforms, Managerial Remuneration, Managing Director, Ministry of corporate affairs, Nomination and Remuneration Committee, Reforms, Related Party Transaction, Stakeholders Relationship Committee, Statutory Audit, Whistle blower, Whole – time Director

MANAGERIAL REMUNERATION IN CASE OF IN ADEQUATE PROFIT

Posted on May 10, 2013 | 16 comments

UPDATE: on 30^th August 2013: Companies Bill 2012 became the Companies Act, 2013 (Act 18 of 2013).

Managerial remuneration is one of major corporate governance issue in India. Promoters and controlling shareholders consider themselves owner of company and get maximum remuneration. Difference between corporate tax rate and income tax rate also priority to withdraw much money from “owned” company. Indian concept of “owned company” and corporate governance has co – existence in last two decades.

In my last post, I did not analyse legal issues of managerial remuneration in case of inadequate profit under Companies Bill 2012 (Now the Act).

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16 Comments

Posted in Chapter XII - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged Board Committee, Board of Directors, Companies Bill 2012, CorpLaw, Corporate, Corporate Law, Director, Key managerial personnel, Legal Reforms, Manager, Managerial Remuneration, Managing Director, Reforms, Whole – time Director

APPOINTMENT OF MANAGING DIRECTOR AND MANAGER

Posted on May 3, 2013 | 102 comments

UPDATE: on 30^th August 2013: Companies Bill 2012 became the Companies Act, 2013 (Act 18 of 2013).

[NOTE: The law stated in this post is effective from 1^st April 2014 till 11^th September 2018. For the law applicable from 12^th September 2018, please visit here]

Managing Director is Key Managerial Personnel of utmost importance. He is the face of a company and its decision-making mechanism. A person gains significant advantages as Managing Director which may not be there, in case of his appointment as Manager or Chief Executive Officer. While Chief Executive Officer has no special advantage except his clubbing as Key Managerial Personnel with Manager and Managing Director, Manager has some. Their definitions speak themselves. Appointment of Managing Director, Whole – Time Director and Manager is governed by the provision of Section 196 of the Bill. They all are a different class of Key Managerial Personnel and has the specific provision of appointment in addition to Section 203, discussed in an earlier post.

Continue reading →

102 Comments

Posted in Chapter XIII - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged Board Committee, Board of Directors, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Director, India, Key managerial personnel, Legal Reforms, Manager, Managerial Remuneration, Managing Director, Ministry of corporate affairs, Reforms, Whole – time Director

Tag Archives: Managerial Remuneration

Application to Central Government for appointment of Managerial Personnel

Managerial Remuneration during period of inadequate profit

MANAGERIAL REMUNERATION

APPOINTMENT OF MANAGING DIRECTOR AND MANAGER

Amendment in Schedule V

Recent Amendments in Managerial Remuneration Rules

Board’s Report – 3

Transition period for Managerial Remuneration

ISSUES RELATED TO MANAGERIAL REMUNERATION

MANAGERIAL REMUNERATION IN CASE OF IN ADEQUATE PROFIT

APPOINTMENT OF MANAGING DIRECTOR AND MANAGER

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