section 314

Originally posted by : Kunal Trivedi
	Dear All,   The brief facts of my case is as below: Mr. A was a MD of XYZ Ltd and his son Mr. B was WTD. Mr. A stepsdown as MD and is redesignated as NED whereas his son Mr. B is redesignated as MD. Further, it is proposed to pay Mr. A who is now a NED consultancy fees (amount would be more than Rs. 250000 p.m.). Kindly advice whether only SR in General meeting is enough or CG approval is also required considering(sec 314 1B) the fact that he is also a Relative of a Director (father of present MD).

 Hi Kunal

In my view

Amount more than 250000 p.m would lead to violation of Office of Place of Profit Rules 2011 ( Recent),

as the limit is 250000 ( earlier 50000/- )..

So fees within specified limit ie 250000 would not require the approval of CG.

But if it exceeds the limit, then Special resolution at GM and CG Approval would be required in my view.

Other memebers please suggest your views

regards

Santosh Shah

NED stands for Non Executive Director?

yes CG approval is required if payment is beyond 250000