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Remuneration committee and payment to md


CS MOHIT SALUJA (PRACTICING CS Jalandhar 9914558709)     22 April 2013

CS MOHIT SALUJA
PRACTICING CS Jalandhar 9914558709 
 198 likes  4638 points

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In a unlisted Limited Company, There are 2 WTD and 1 MD. All of the three are being paid a combined sum of rs. 12, 60, 000 for a year i.e. 1,05,000 p.m. i.e. 50, 000 to MD, 30000 TO WTD and 25000 to teh 2nd WTD. Now as on 31.03.2013, the term of MD and one WTD expires and we ahve to re-appoint them for further 5 year. but when i checked the profits of the company a on 31.03.2013, it was Rs. 60, 00, 000 only i.e. company can pay only rs. 600000 salary to all teh directors i.e. 10% of net profits. Now my question is:

1. whether the company has to form Remuneration Committe?

2. if yes, from which date the committee has to be form. as we calculate profits as on 31.03.2013 but i think profits have come down in between the year. so what to do?

3. what will be the working of remuneration committee during the year. as how many times, the commiitee has to hold the meeting.

 

Please elaborate.

avater

Sneha (Company Secretary)     23 April 2013

Sneha
Company Secretary 
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Yes, formation of remuneration committee is required.

 

It can be formed at any date prior to said increase in remuneration.

 

The working of remuneration committee is just to approve the remuneration of the directors and there is no specific provision as to no. of meetings committee needs to hold. It can meet annually or semi annually as required. Kindly note that the meeting of remuneration committee should be held prior to BM and Board will take note of the same.

 

You may revert back for further query or Resolution formats if reqd.

 

avater

CS MOHIT SALUJA (PRACTICING CS Jalandhar 9914558709)     23 April 2013

CS MOHIT SALUJA
PRACTICING CS Jalandhar 9914558709 
 198 likes  4638 points

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Sneha ji, can you please elaborate and send the documents/ resolutions which you have and which you can provide to me at my email id csmohitsaluja @ gmail.com

avater

Sneha (Company Secretary)     23 April 2013

Sneha
Company Secretary 
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/experts/remuneration-of-managing-director-1117919.asp

 

This link will surely clarify your doubts.

avater

Sneha (Company Secretary)     23 April 2013

Sneha
Company Secretary 
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CONSTITUTION OF REMUNERATION COMMITTEE

 

The Chairman explained the Board about the necessity of constituting a remuneration committee for the purpose of analyzing and approving the remuneration of the executive directors of the Company. The constitution of the Committee will be in accordance with the notification of the Ministry of Corporate Affairs dated 8th February, 2011. After some discussions, it was:-

 

“RESOLVED that a remuneration committee be and is hereby constituted to consider, analyse, determine and approve on behalf of the Board the remuneration to be paid to the executive directors of the Company.

 

RESOLVED further that the said remuneration committee be constituted with Mr. ­­­­­­­­­­­­­­­­________, Director, as the Chairman of the committee and Mr. ­­­­­­­­­­­­­­­­­­­­­_____________ and Mr. __________, Directors, as the other members of the committee.”

avater

Sneha (Company Secretary)     23 April 2013

Sneha
Company Secretary 
 285 likes  1594 points

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APPROVAL OF REMUNERATION TO MR. ____________

 

The Chairman informed that it is proposed to re-appoint Mr. _________ at a monthly remuneration of Rs. _________/-. He further informed that Mr. ____________, is a qualified ______having wide experience of over ____ years in various fields of Finance Administration and Management. He was associated with a number of renowned Industrial organizations. As Executive Director of the Company, he heads the entire operation and his long & varied experience has led the Company to diversify its activities. His immense contribution has led the Company to the level it is at today. After some discussion, it was:-

 

“RESOLVED that considering his expertise, wide experience and valuable contribution towards the Company, the Committee hereby approves a monthly remuneration of Rs. _______/- to Mr. _______________, as the MD/Wholetime Director of the Company.”

 


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