TMI BlogAppointment of Managerial Personnel and payment of Managerial Remuneration in case of Companies having no profit or inadequate profit - rationalization thereof.X X X X Extracts X X X X X X X X Extracts X X X X ..... rivate Companies which are subsidiaries of Public Companies are submitting applications to the Department of Company Affairs for approval of the Central Govt. for appointment of and/or payment of remuneration to managerial personnel in excess of the limits prescribed in sections 269, 310 , 311 387 and in terms of section 198(4) read with schedule XIII to the Companies Act, 1956, which provides scales of remuneration (salary, dearness allowance, perquisites and any other allowance). 2. The scales of monthly remuneration prescribed in para 1 of section II of part II of Schedule XIII have since been revised vide notification GSR No. 215(E) dated 02.03.2000. The revised scales are as under: - Where the effective c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation the following factors (detailed note on each as applicable be furnished) and give a detailed justification. The application for increase in the remuneration should not be submitted in a mechanical way: (i) Reasons for loss/inadequacy of profit. (ii) Steps taken to improve the performance of the company. (iii) Financial health/performance of the Company as may be reflected by effective capital, Net worth, Turnover, Profit/loss, dividend declared, etc. (iv) Nature of industry - high technology area, core sector, infrastructure field, etc. (v) Export performance and net foreign exchange earned. (vi) Performance of the Company in socio-economic activities. (vii) General performance of Indus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . should be filled up implying 'Not Applicable'. (iii) Applications are submitted after remuneration in excess of Schedule III has already been paid to the managerial person. (iv) Certified copies of Newspaper clippings of notices, in original, published in the Newspaper in English and in local Newspaper in local language as required in terms of section 640-B of the Companies Act are not furnished. (v) Certified copies of Directors report and audited accounts of the company for each of the last 5 financial years of the company are not enclosed. (vi) In case of foreign collaboration, certified copy of the FIPB approval letter(s) is not furnished. (vii) Remuneration drawn by the proposed appointee fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the application are not authenticated and seal of the company is not put on each paper. 6. Attention is also invited to explanation to Section 198 of the Companies Act, 1956 which states that 'Remuneration' includes any expenditure incurred by the Company giving benefit to its directors/managers on items mentioned at (a) to (d) of the said explanation i.e. (i) In providing any rent free accommodation or any other benefit or amenity in respect of accommodation free of charge, to any of the persons specified in sub section (1). (ii) In providing any other benefit or amenity free of charge or at a concessional rate to any of the persons aforesaid; (iii) In respect of any obligation or service which but for su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roper filing of the applications. It is hoped that with filing of complete application disposal would be quicker. 8. Copy of this circular is also available at the Web Site of the Department of Company Affairs at the following address: http/www.nic.in/dca. 9. PLEASE cooperate by furnishing all the above requirements to facilitate expeditious clearance of your proposal. (B.N. PRASAD) Under Secretary to the Government of India To, As per mailing list attached. CHECK LIST Please ensure before submitting the application that the following information/ documents have been furnished: - (i) Proper application fee in the manner provided vide GSR No. 501(E) dtd. 6.7.99. (ii) Copies of public notices in English ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f foreign collaboration/ investment. (xiv) Each page of application and documents attached is authenticated under the seal of the applicant company. STATEMENT OF REMUNERATION PROPOSED In Rupees/Rupees equivalent per month A. SALARY Basic Salary Bonus Gratuity (Non taxable) Contribution to Provident fund (Non taxable) Contribution to Superannuation fund/ Annuity fund (Non taxable) B. ALLOWANCES Entertainment allowance Special allowance C. PERQUISTIES Accommodation Gas/Electricity/Water expenses Children education Transport and driver Leave Travel concession (Non taxable) Medical reimbursement (Non taxable) Insurance (a) Personal effect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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