Inadequate profit

Viraj Mehta (Job) (69 Points)

13 October 2017

How the decision can be taken that this profit is adequate or inadequate in the context of remuneration payable to the Managerial remuneration

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4 Replies

Ankush Khurana (33 Points)
Replied 16 October 2017

go through schedule 5 of companies Act 2013

P C Agrawal (Registered independent director Past Ch) (8229 Points)
Replied 16 October 2017

1) Work out actual amount of remuneration proposed to be paid to directors in current financial year.

2) Work out estimated net profit u/s 198 of current financial year

3) Take total of (1) and (2) above

4) Work out maximum remuneration that can be paid to directors u/s 197 ( @ 5%/10%/11% as the case may be of (3) above)

5) If amount as per (1) above is not more than (4) above, profit is adequate. Otherwise profit is inadequate.

Viraj Mehta (Job) (69 Points)
Replied 16 October 2017

Thanks to both of you

Himanshu Bhardwaj (51 Points)
Replied 16 October 2017

schedule 5 read where company has no profit than company pay remuneration to director and remuneration as per paid up capital given there.

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