manegireal remuneration
- 1. Appointment and Remuneration of Managerial Personnel COMPANIES ACT 2013 BY VENKATESH
- 2. APPOINTMENT OF MD, WTD & MANAGER SEC 196 (1) (2) No Company shall employ at the same time a MD and Manger. No person shall appoint or Re – appoint for a term exceeding 5 years as MD or Whole Time Director or Manager. Provided no Re – appointment shall be made earlier than one year before the expiry of the present term.
- 3. DISQUALIFICATIONS FOR APPOINTMENT SEC 196 (3) The Persons below the age of 21 years and above the age of 70 years are not eligible. (Exp) An Un discharged Insolvent. The Persons who suspended payment to his Creditors or Makers at any time. Convicted by a Court of law of an offence and sentenced for a period of more than 6 months.
- 4. PROCEDURE FOR APPOINTMENT SEC 196 (4) (5) All terms & conditions and Remuneration payable them has to be approved by Board of directors. The above appointment has to be approved by next General meeting. If the appointment is not approved in the general meeting any acts done by him before approval shall not deemed to be invalid. With in 6 months from the appointment of MD or WTD or CEO or CS or CFO, file a Return of Form MR.1 along with prescribed fee.
- 5. OTHER CONDITIONS FOR APPOINTMENT OF KMP SEC.203 Every listed company and public company having a paid up capital of 10 crore or more shall appoint – MD/CEO/Manager, CS, CFO. No person can act as KMP at the same time in more than one company but act as Director in other co. with the approval of board. (Exp.) If the office of KMP is vacated, fill up the vacancy with in 6 months from the date of vacation of that position. If any company contravenes the provisions of this Sec.- shall be punishable with fine which shall not less than 1 lakh but which may extend to 5 Lakhs and every person in default shall be liable to a fine which may extend to 50,000 and Rs.1000 for every day till the default continues.
- 6. MAXIMUM REMUNERATION PAYABLE TO MANAGERIAL PERSONNEL The total remuneration payable by a Public company, to its Directors including MD,WTD and its manager shall not exceed 11% of net profit of that FY. Provided that the company in general meeting with the approval of CG may authorise the payment of remuneration exceeding 11% of net profits. Provided further that, - The maximum remuneration payable to one MD or manager shall not exceed 5%. - If more than one MD or manager the remuneration shall not exceed 10%. o In case of other directors, - shall not exceed 1% if MD or manager are there. - shall not exceed 3% if MD or manager are NOT there. The above percentages are exclusive of Sitting Fee payable to them.
- 7. REMUNERATION IN CASE OF LOSS OR INADEQUATE PROFITS Not with standing any thing contained in this act – the shall not pay any remuneration to its directors including MD or Manager, but subject to schedule V. (exp.) The above payment shall not include sitting fee and payment towards its services rendered based on his professional capacity. Provided that no Independent Director shall not hold any option and eligible to get sitting fee & reimbursement of expenses and profit related commission approved in the general meeting. If any person contravenes the provisions of this Sec.- shall be punishable with fine which shall not less than 1 lakh but which may extend to 5 Lakhs.
- 8. OTHER RELATED TOPICS Sec. 198 – computation of profits. Sec. 199 – Recovery of remuneration in certain cases. Sec. 200 – Central Government or Company fix limits with regard to remuneration. Sec. 201 – Forms of and procedure in relation to, certain Applications. Sec. 202 – Compensation for loss of office of MD/WTD/Manager. Details about employee drawing more salary than directors and discloser in the board of directors report.
- 9. DISCLOSURE IN THE BOARD OF DIRECTORS REPORT The listed shall disclose in the Board’s report - the ratio of remuneration of each director to the median remuneration of the employees of the company. The % increase in the remuneration of each key managerial personnel in that FY. Comparison of key managerial personnel against the company’s performance. The key parameters for any variable component of remuneration payable to them. The % increase in the remuneration of key managerial personnel against the % increase in the remuneration of employees of the company. Details about the employee who is not a director but drawing more than director’s remuneration (exp).
- 10. APPOINTMENT OF COMPANY SECRETARY & SECRETARIAL AUDIT Every company having paid up capital 5 crore or more has to appoint whole time company secretary. Evert listed co. and co. having 50 crore or more paid up capital or having turnover of 250 crores or more has to disclose secretarial audit report along with its board of directors report . If any qualification is given by CS in the secretarial audit report , the BOD have to give an explanation to the qualification. If the Co. or CS contravenes the provisions of this Sec.- shall be punishable with fine which shall not less than 1 lakh but which may extend to 5 Lakhs.
- 11. FUNCTIONS & DUTIES OF COMPANY SECRETARY To report to the board about compliance of provisions of this act and rules and other related laws. To ensure the compliance and application of secretarial standards issued by ICSI. To give guidance to directors in discharging their duties & responsibilities . In conducting & attending the meetings & maintaining the minutes of the meeting.( Board/ Committee/GM). To represent before various regulators and other authorities to discharge duties under this Act. To assist & advice the directors in Co. affairs & in implementing good corporate governance & To discharge such other duties as specified under this Act.
- 12. FORMS RELATED TO THIS TOPICS E-Form MR – 1 : Return for Appointment of KMP. E-Form MR – 2 : Form of application to CG where the company is going to pay the excess remuneration specified in this sections. P-Form MR – 3 : Secretarial Audit Report.