Arvind Sharma (ACA) (1432 Points)
05 October 2010Dear all.,
Tell me whether Sitting Fee is considerable as part of Managerial Remuneration while computing limitation on Remuneration...???
Although, I know that there is separate limitation on payment of Sitting Fee..., that means it shall not be treated as part of Managerial Remuneration...
However I am not sure., so please reply....
HARDIK
(COMPANY SECRETARY NCFM (Corporate Governance ))
(664 Points)
Replied 05 October 2010
Ajay Mishra
(Company Secretary)
(74332 Points)
Replied 05 October 2010
Section 309 (2) of the Companies Act, 1956 provides that a director may receive remuneration by way of a fee for each meeting of the Board or a committee thereof attended by him. While sitting fee payable to the directors shall not be included in overall maximum limit of 11% of total remuneration payable by a public company to its directors.
Sitting fee may be paid only to a director who is not a managing director or whole time director i.e. sitting fee may be paid to a non-executive director only. {Department Letter No. 3/1/90CL_V, dated 18th August, 1990}.
The provisions of section are not applicable to private limited company, hence, a private company can pay sitting fee as per their requirements.
Regards
CS Ajay Mishra
sahil
(LEARNER)
(371 Points)
Replied 06 October 2010
I agree with Mr Ajay Mishra i.e a co. shall not pay sitting fees to its MD & WTD for attending BM or Committe meeting becoz it is part of overall duty of MD/WTD to attend & hold BM therefore if sitting fees paid to MD/WTD then it will be counted in 5%,10%.11% of NP i.e MCA Clarification overrules sec 198(2),But if Sitting fees paid to PTD ,then it will not counted in1%,3% and in 11% of NP
Kavitha.S
(Company Secretary)
(369 Points)
Replied 06 October 2010
Sitting fee is not considered as a part of managerial remuneration.It will not be counted for the overall limit of 11% .
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