ABC Limited is a closely held public limited company. During last year (2008) the company had re-appointed its MD for further period of three years. Suitable remuneration was recommended by Remuneration Committee. The remuneration was also approved by Board and Members. The remuneration to MD is Rs.3.00 lacs per month. Since the company had inadequacy of profits, it took the Schedule XIII route to pay remuneration of Rs.3.00 lacs per month.

The remuneration was approved under Sub Paragraph (B) of Section II of Part II to Schedule XIII (Remuneration payable by companies having no profits or inadequate profits) to the Companies Act, 1956. For effective capital of Rs.25.00 crore or more but less than Rs.50.00 crores, the company can pay maximum remuneration of Rs.3.00 lacs per month under schedule XIII

The remuneration paid to MD during the year is more than 5% of the Net Profits. However I am 100% sure that this is not a violation of the Act. This is due to the fact that the remuneration is being paid under Sub-Paragraph B of Section II of Part II of Schedule XIII, which permits companies with no profits or inadequate profits to pay such remuneration as laid down under Schedule XIII.

The accounts for year ended 31.03.2009 are being drawn for approval of Board / Members. In the Notes on Accounts the remuneration paid to MD during the year will be shown separately.

(1) Kindly advise whether it is mandatory for the company to prepare and include in the Notes on Accounts a statement containing “Computation of Net Profit as per Section 198, 309 and 349”.

(2) If the above said “computation” statement is mandatory, then what type of note should I provide in the Notes on Accounts, clarifying about the mismatch between the 5% net profits and actual remuneration paid.

(3) Whether MD remuneration to be disclosed and attached with Boards Report as per Section 217(2A) . Whether MD will be an employee of the company to be covered under Section 217(2A).

I look forward for kind advise

With regards

Muralidharan

Dear Freinds,

Is it possible to convert a private limited company into LLP unit?

Please comments/suggestions.

Hello! Friends,

We've registered a company at ROC in 2005.
But, due to some reasons we didn't do any transactions in that company and doesn't file any IT/ROC/Sales Tax returns as on date.
The company was still active in ROC. And recently the auditor of the company also expired due to in-healthy.

Now, shall we go thru another auditor and file IT/ROC as on position. Request your good comments on this.

regards

G Ganesh

dear friends ,
what are the registers a private limited company has to maintain as per sec301 of companies act . pls explain in a simple term

When a senior employee is appointed as an alternate director to a foreign director will the provisions of sec 314 be attracted? There is a 1964 DCA circular confirming this, but is there any more recent ruling on this?

AS PER COMPANIES(DISCLOSURE OF PARTICULARS IN THE DIRECTOR REPORT)RULE 1988,SCHEDULE OF LIST OF INDUSTRIES WHICH SHOULD PROVIDE INFORMATION OF CONSERVATION OF ENERGY IS GIVEN IN IT.BUT IN SAME RULES, LIST OF INDUSTRIES TO PROVIDE INFORMATION OF TECHNOLOGY ABSORPTION IS NOT GIVEN.
WHAT DOES IT MEAN?DT ALL COMPANIES HAVE TO GIVE INFORMATION OF TECHNOLOGY ABSORPTION IN "ANNEXURE B" WHOSE FORMAT IS GIVEN IN RULES.PLZ CAN ANY ONE CLARIFY OR INTERPRET THIS.THANKS IN ADVANCE FOR CONSIDERING.

ON WHICH COMPANIES ACCOUNTING STANDARD 15 (GRATUITY)APPLY.THANKS IN ADVANCE

our unlisted closely held pvt. co. wants to issue sweat equity can any body told me the procedure for valuation of intellectual property and how the amount of discount calculated.

What is the basic diff. between an executive and non-executive director.
Can A person become an executive director in more than one company???????????
A person has four companies. He is director in all companies and looking after the activities of all of them. He can be an executive director in all of them or not???????????????

Please send check list for issue of sweat equity shares by private companies.

Thanks
Ashish Shrivastava
C.S.Final
Assistant Company Secretary