TaxTMI 
TaxTMI 
Appointment of Managerial Personnel and payment of Managerial Remuneration in case of Companies having no profit or inadequate profit - rationalization thereof.
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....earness 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 capital of the company is Monthly remuneration payable shall not exceed ------------------------------------------------------------------------------------------------------------------------------ (i) less than rupees 1 crore rupees 75,000 (ii) rupees 1 crore or more but less than rupees 1,00,000 rupees 5 crores (iii) &nbs....
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....f Industry in the relevant sector (viii) Foreign investment and foreign collaborations (ix) Expansion/Diversification/Modernisation/Technology upgradation (x) Qualification, experience, period of association and contribution of the proposed appointee. (xi) Requirement of personal skill and challenges ahead (xii) Past remuneration of the proposed appointee. (xiii) Creativity/innovativeness of the proposed appointee/company. (xiv) Recognition/Award obtained by the proposed appointee/company. (xv) The amount of remuneration proposed to be paid including salary, allowances, perquisites and whether it will have any effect on the overall financial health of the Company. (xvi) Any other factors relevant to the proposal, which the company may like to bring to the notice of the Govt. justifying their proposal. 5. Deficiencies generally observed in respect of the applications on the above subject are listed below: - (i) Applic....
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....is made, is not given even if the application is made towards the end of Financial Year/after the end of Financial Year, unaudited figures of working results are not furnished. (xi) In case of proposal for mid-term increase for remaining period, it is not indicated how the requirement of section 269 (2) of the Companies Act, 1956 read with part I & II of Schedule XIII was met at the time of appointment of MD/WTD/Manager and how the mid-term increase in remuneration is justified in terms of working results of the Company. (xii) Papers/documents attached 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). &n....
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....sp; (i) Proper application fee in the manner provided vide GSR No. 501(E) dtd. 6.7.99. (ii) Copies of public notices in English and in local newspaper in local language. (iii) Monetary value of each of the perquisites and allowances and total remuneration package (in the form of statement annexed) valued as per actual cost. (iv) Appropriate and clear resolution in support of the proposal. (v) In case of appointment as Managerial personnel in two or more companies the manner in which compliance of section 316(2)/(4) has been made. (vi) Reasons for loss/inadequacy of profit, steps taken to improve the financial performance and future projections. (vii) Full & proper justification for proposed appointment/ remuneration. (viii) The manner in which compliance of section 269(2) of the Companies Act was met at the time of appointment/ reappointment of the managerial person where mid term increase in remuneration is proposed. (ix) Application for condonation....