Dear Professional,
I have a query that how to interpretate the clause B of Section II of Part II of Schedule V of the Companies Act, 2013 in case Remuneration is to be paid to Managerial Person in case of inadequacy of Profits:
In above case, remuneration can be paid to managerial person not exceeding the higher of the limits specified
under (A) and (B)
(A) Certian Limits of yearly remuneration as per effective Capital of the Company
(B) In the case of a managerial person who was not a security holder holding securities of the company of nominal value of rupees five lakh or more or an Employee or a Director of the company or not related to any Director or Promoter at any time during the 2 years prior to his appointment as a managerial person, — 2.5% of the current relevant profit:
Q 1. If Company is going to increase the remuneration of MP (managerial person) who is already the MD of the Company from last 10 years., and condition of clause B is not staisfying then even Company can pay remuneration as per the limits specified under clasue (A).?
Regards
Shilpa
CAclubindia
