Increase in sitting fee beyond the limit
This query is : Resolved
12 December 2012
Procedure for increase in Sitting Fee beyond the limit.
Ajay Mishra
(Expert)
12 December 2012
Hi
Sitting fees paid for attending meeting are excluded from overall managerial remuneration ceiling:
The limit of 11% of the net profits on overall maximum managerial remuneration shall be exclusive of any sitting fees payable to directors for attending each meeting of the Board or committee.
Approval of the Central Government is not required for increase in sitting fee within the prescribed limit:
No approval of the Central Government under section 198 will be necessary for an increase in the amount of sitting fee so long as such increase is within the limits prescribed by the Government.
By Notification No. GSR 580(E), dated 24-7-2003, the government has increased the fees payable to directors of public companies and private companies which are subsidiaries of public companies for attending the Board meetings and Committee thereof w.e.f. 24-7-2003 as under:
(a) Companies with a paid-up share capital and free reserves of Rs. 10 crore and above or turnover of Rs. 50 crore and above shall be paid sitting fees not exceeding the sum of twenty thousand rupees; and
(b) Other companies shall pay sitting fees not exceeding the sum of ten thousand rupees.
Provisions in the Articles of Association:
The Articles shall contain a provision authorising payment of sitting fees to directors. Where the articles provide that sitting fees to directors may be paid in conformity with the provisions of the Companies Act, 1956 as may be applicable from time to time, then the Board of the said company could increase the sitting fees on the basis of the provision in the said Rules from time to time.
Sitting fees paid for attending meeting are excluded from overall managerial remuneration ceiling:
The limit of 11% of the net profits on overall maximum managerial remuneration shall be exclusive of any sitting fees payable to directors for attending each meeting of the Board or committee.
Approval of the Central Government is not required for increase in sitting fee within the prescribed limit:
No approval of the Central Government under section 198 will be necessary for an increase in the amount of sitting fee so long as such increase is within the limits prescribed by the Government.
By Notification No. GSR 580(E), dated 24-7-2003, the government has increased the fees payable to directors of public companies and private companies which are subsidiaries of public companies for attending the Board meetings and Committee thereof w.e.f. 24-7-2003 as under:
(a) Companies with a paid-up share capital and free reserves of Rs. 10 crore and above or turnover of Rs. 50 crore and above shall be paid sitting fees not exceeding the sum of twenty thousand rupees; and
(b) Other companies shall pay sitting fees not exceeding the sum of ten thousand rupees.
Provisions in the Articles of Association:
The Articles shall contain a provision authorising payment of sitting fees to directors. Where the articles provide that sitting fees to directors may be paid in conformity with the provisions of the Companies Act, 1956 as may be applicable from time to time, then the Board of the said company could increase the sitting fees on the basis of the provision in the said Rules from time to time.
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