MD's Remuneration

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 May 2010 Can anybody kindly explain the audit procedure to verify the following:

1.Managerial remuneration
2.Derivative Loss

CA Kishore Tallam

CA Kishore Tallam (Expert)
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26 May 2010 1. Managerial Remuneration
- Obtain the Board / Shareholders resolution in which the remuneration was fixed.
- Compute the profits as per Section 349 & 350 of the companies act, 1956 and compute the amount eligible to be paid.
- Review the General ledger account for the expenditure booked.
- Compare the same with the eligible amount.
- Ensure disclosures in the financials.
- If approval of shareholders is pending, mention the same in the Annual Report circulated to the shareholders.
2. Derivative Loss:
- Obtain the original contracts for derivatives.
- Compute the gain / loss on the closing date and book the loss and show it separately in financials and disclose the details of the contract in notes on accounts.
- Obtain confirmations for outstanding derivative contracts on closing date from all the bankers and ensure completeness.

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