Reimbursement of medical expenses incurred in excess of limits laid down under Schedule XIII of the Companies Act, 1956 - Companies Law - Circular : No. 1 of 1991,

Circular : No. 1 of 1991, dated 12 2 1991. Managerial remuneration - Reimbursement of medical expenses Reimbursement of medical expenses incurred in excess of limits laid down under Schedule XIII of the Companies Act, 1956 Clarifications on I am directed to say that in accordance with the provisions of Part II of Schedule XIII to the Companies Act, 1956, expenses incurred on medical treatment of the managing director/whole time director/manager of a company and his/her family members are limited to one month s salary in a year or three months salary over a period of three years. This Department has been receiving proposals for reimbursement of expenditure incurred on specialised medical treatment abroad of managing director/whole time director/manager of public limited companies over and above the ceiling laid down in Schedule XIII. Any proposal for reimbursement of medical expenses incurred by managerial personnel on specialised treatment abroad in excess of the aforesaid limits requires approval of the Central Government under section 310 of the Act. You may, therefore, advise your constituent members that an application for this purpose should be preferred with the Central Government in the prescribed form after complying with the required formalities. You may also like to advise your members that such proposals are normally considered by the Central Government within the framework of the policy as stated below : (a) Having regard to the improved medical facilities available in India, the managerial personnel should obtain specialised treatment abroad only in exceptional and deserving cases. All proposals for reimbursement on specialised medical treatment abroad must invariably be accompanied by an essentiality certificate issued and signed by the Director General of Health Services of the concerned State/Union Government. (b) The ceiling on reimbursement of medical expenses on specialised medical treatment abroad (inclusive of airfare, boarding/lodging for the patient and the attendant, where the Director General of Health Services considers it necessary that the attendant should accompany the patient) is Rs. 3 lakhs only. (c) The proposals for increase in the remuneration by way of reimbursement of medical expenses on specialised treatment abroad is considered in respect of the managerial personnel himself/herself and not his/her family members or the dependants. (d) The application under section 310 of the Companies Act, 1956, in this regard, should be preferred within the currency of the tenure of the managerial personnel concerned.