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Schedule XIII of Cos, Act,1956

Manish Kumar Soni , Last updated: 18 March 2008  
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REMUNERATION AS PER SCHEDULE XIII

 

(A)       CEILING LIMIT

 

EFFECTIVE CAPITAL                                                        MAX REMUNERATIONP.M.

Less than Rs. 1 Cr.                                                                =    Rs. 75,000

Rs.1 Cr. or more but less than Rs.5 Cr.                                =    Rs. 1, 00,000

Rs.5 Cr. or more but less than Rs.25 Cr.                              =    Rs. 1, 25,000

Rs.25 Cr. or more but less than Rs.50 Cr.                            =    Rs. 1, 50,000

Rs.50 Cr. or more but less than Rs.100 Cr.                          =    Rs. 1, 75,000

Rs.100 Cr or more                                                                  =    Rs. 2, 00,000

 

CONDITION:

 

1.   Remuneration is approved by a resolution passed by the Remuneration Committee.

 

2.   The Company has not made any default in repayment of any of its debts or debenture or interest payable thereon for a continuous period of 30 days in the preceding F.Y. before the date of appointment of such Managerial Personnel.

 

(B) The above ceiling limit can be DOUBLED provided along with the above mentioned condition, a special resolution has been passed at the general meeting of the Company for payment of remuneration for a period not exceeding 3 years.

 

(C)    In case the effective capital of the Company is negative or the Company wants to pay more than the ceiling limit prescribed in ‘B’,

 

Ø            Prior approval of Central Government is required along with the aforesaid conditions.

 

NOTE:

I)                    Certificates from the Auditor or Company Secretary in Whole time Practice is required to certify that requirement of this Schedule have been compiled with.

 

II)         A statement along with a notice calling the general meeting   given to the shareholders containing the following information, namely-

 

a)      General Information:

i)                    Nature of Industry

ii)                   Financial performance of the Company.

iii)                 Foreign Investments or collaborators, if any.

 

b)     Information about the appointee:

i)                    Background Details.

ii)                   Past Remuneration

iii)                 Job Profile and his suitability.

iv)                 Remuneration proposed.

v)                  Comparative Remuneration profile with respect to industry, size of the company, profile of the position & person.

 

c)      Other Information:

i)                    Reason of loss or inadequate profit

ii)                   Steps taken or proposed to be taken for improvement.

iii)                 Expected increase in productivity and profits in measurable terms.

 

 

d)     Disclosures:

               i)          The shareholders of the company shall be informed of the remuneration package of the managerial person.

 

 

 

III)        “Remuneration Committee” means that a committee which consists of at least three non-executive Independent Directors including nominee director/ directors, if any.

 

IV)        Ceiling on remuneration from two companies:

Where a person who is a managerial person in more than one company , the total remuneration drawn from all these companies does not exceed the higher maximum admissible limit from any one of the companies of which he is a managerial person.

 

V)         Reduction in Effective Capital:

Where there is a reduction in effective capital of the company in any financial year, the remuneration is scaled down appropriately to correspond to the revised capital failing which the approval of the Central Government is required.

 

 

VI)        CALCULATION OF EFFECTIVE CAPITAL:

 

Particulars

Amount (Rs.)

Paid Up Share Capital

 

Security Premium

 

Reserve & Surplus (Excluding Revaluation Reserve)

 

Long Term Loans & Deposits

xxxx

 

xxxx

 

xxxx

 

xxxx

Total

XXXXX

 

Less: Investments (Except in case of Investment Company)

 

 

Xxxxx

 

Net Effective Capital

XXXXXXX


Published by

Manish Kumar Soni
(student)
Category Corporate Law   Report

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