Remuneration to md

Sitting Fee cannot be paid to Managing Director.

Kindly note that Managing Director is not entitled by law for the payment of sitting fee. As per DCA if you want to pay sitting fee to the Managing Director then you may pay but that would be counted for the purpose of calculating the overall managerial remuneration limit. So due to DCA mandate payment of sitting fee to Managing Director is more or less payment of managerial remuneration.

So paying extra amount to Managing Director is fine but via sitting fee payment that too when you are crossing the limit of Sch XIII is not advisable at all.

Further if you still follow sitting fee path you have to bound yourself with sitting fee limits prescribed by law even if you are ready to follow Sch. XIII guidelines. Hope you are getting my point.

Regards

Originally posted by : Ankur Garg
	Sitting Fee cannot be paid to Managing Director.   Kindly note that Managing Director is not entitled by law for the payment of sitting fee. As per DCA if you want to pay sitting fee to the Managing Director then you may pay but that would be counted for the purpose of calculating the overall managerial remuneration limit. So due to DCA mandate payment of sitting fee to Managing Director is more or less payment of managerial remuneration.   So paying extra amount to Managing Director is fine but via sitting fee payment that too when you are crossing the limit of Sch XIII is not advisable at all.   Further if you still follow sitting fee path you have to bound yourself with sitting fee limits prescribed by law even if you are ready to follow Sch. XIII guidelines. Hope you are getting my point.   Regards

First of all thanks for your reply :)

But my question here is related to year 2011 - 2012 whereby we have already paid the sitting fees to the MD alongwith other directors and now when the accounts are being finalized we have realized that we have crossed the limit of 5% of net profits and are now falling in the category of "inadequate profits". Should we approach Central Government for this increase in remuneration which is just Rs. 20,000/- for the whole year or should we constitute a remuneration committee and then rectify the payment made

Hope you are getting my problem

I am also facing the same issue  in one of our group companies, we are paying a fix remueration to our MD.  However as we are in loss this year, as per Schecule XIII, we can pay only upto 1.25 lacs per month which totals to 15 lacs a year, we are almost at double the amount, can we pass a special resolution for approving the same in our forthcoming AGM (to be held in sept 2012) with retrospectuve effect (i mean ratifying the payment thus made in FY 2011-12). please advise

Originally posted by : Khushboo Maheshwari
	First of all thanks for your reply :) But my question here is related to year 2011 - 2012 whereby we have already paid the sitting fees to the MD alongwith other directors and now when the accounts are being finalized we have realized that we have crossed the limit of 5% of net profits and are now falling in the category of "inadequate profits". Should we approach Central Government for this increase in remuneration which is just Rs. 20,000/- for the whole year or should we constitute a remuneration committee and then rectify the payment made

I would not advise you to go for CG approval for this kind of tiny amount. Simply use the power given in section 309(5A) and recovered the excess amount from MD and ask your account department to adjust the money. Pay this amount to your MD by any other mode like reimbursement of expenses solely incurred for office purpose.

Regards

Originally posted by : Ankur Garg
	I would not advise you to go for CG approval for this kind of tiny amount. Simply use the power given in section 309(5A) and recovered the excess amount from MD and ask your account department to adjust the money. Pay this amount to your MD by any other mode like reimbursement of expenses solely incurred for office purpose.   Regards

:)

Thanks for your reply.....