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Section 197 - Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits - Companies Act, 2013Extract ..... that, except with the approval of the company in general meeting, 2[by a special resolution,]- (i) the remuneration payable to any one managing director; or whole-time director or manager shall not exceed five per cent of the net profits of the company and if there is more than one such director remuneration shall not exceed ten per cent of the net profits to all such directors and manager taken together; (ii) the remuneration payable to directors who are neither managing directors nor whole-time directors shall not exceed,- (A) one per cent of the net profits of the company, if there is a managing or whole-time director or manager; (B) three per cent of the net profits in any other case. 3[Provided also that, where the company has defaulte ..... x x x x x Extracts x x x x x Section 197 - Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits - Companies Act, 2013 x x x x x Extracts x x x x x ..... to him for the services rendered by him in any other capacity: Provided that any remuneration for services rendered by any such director in other capacity shall not be so included if- (a) the services rendered are of a professional nature; and (b) in the opinion of the Nomination and Remuneration Committee, if the company is covered under sub-section (1) of section 178, or the Board of Directors in other cases, the director possesses the requisite qualification for the practice of the profession. (5) A director may receive remuneration by way of fee for attending meetings of the Board or Committee thereof or for any other purpose whatsoever as may be decided by the Board: Provided that the amount of such fees shall not exceed the amount as ..... x x x x x Extracts x x x x x Section 197 - Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits - Companies Act, 2013 x x x x x Extracts x x x x x ..... .] (11) In cases where Schedule V is applicable on grounds of no profits or inadequate profits, any provision relating to the remuneration of any director which purports to increase or has the effect of increasing the amount thereof, whether the provision be contained in the company's memorandum or articles, or in an agreement entered into by it, or in any resolution passed by the company in general meeting or its Board, shall not have any effect unless such increase is in accordance with the conditions specified in that Schedule 8[***] (12) Every listed company shall disclose in the Board's report, the ratio of the remuneration of each director to the median employee's remuneration and such other details as may be prescribed. ( ..... x x x x x Extracts x x x x x Section 197 - Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits - Companies Act, 2013 x x x x x Extracts x x x x x ..... y director is in excess of the limit laid down under this section and give such other details as may be prescribed. (17) On and from the commencement of the Companies (Amendment) Act, 2017, any application made to the Central Government under the provisions of this section [as it stood before such commencement], which is pending with that Government shall abate, and the company shall, within one year of such commencement, obtain the approval in accordance with the provisions of this section, as so amended.] ******************** Noes:- 1. Omitted vide The Companies (Amendment) Act, 2017 Dated 03-01-2018 w.e.f. 12-09-2018 , before it was read as, "with the approval of the Central Government," 2. Inserted vide The Companies (Amendmen ..... x x x x x Extracts x x x x x Section 197 - Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits - Companies Act, 2013 x x x x x Extracts x x x x x ..... Notwithstanding anything contained in any other provision of this Act but subject to the provisions of this section, an independent director shall not be entitled to any stock option and may receive remuneration by way of fees provided under sub-section (5), reimbursement of expenses for participation in the Board and other meetings and profit related commission as may be approved by the members." 11. Substituted vide THE COMPANIES (AMENDMENT) ACT, 2019 w.e.f 02-11-2018 before it was read as "(15) If any person contravenes the provisions of this section, he shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees." 12. Inserted vide THE COMPANIES (AMENDMENT) ACT, 202 ..... x x x x x Extracts x x x x x Section 197 - Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits - Companies Act, 2013 x x x x x Extracts x x x x x
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