9911796707
TMI BlogNew guidelines for approval of managerial remuneration ‑ Effective from April 1, 1983 in supersession of guidelines of 1978 as modified in 1979X X X X Extracts X X X X X X X X Extracts X X X X ..... oint No. 1 ‑ Part 2 of the revised guidelines states that applications received on or after 1‑4‑1983 will be considered in accordance with revised guidelines. Applications received prior to this date but pending on that date will be considered for fixing remuneration for the period up to 31‑12‑1983 in accordance with the guidelines and the same for subsequent period in terms of the new guidelines. The question which arises in this behalf is as to whether the Department would necessitate/insist upon the fresh consent from the companies so as to be governed by the new guidelines? Can the earlier consent which related to the previous guidelines and was given at a time when the new guidelines were not even exist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, be necessary and the prescribed legal procedure (e.g., issue of a notice under section 640B) will also have to be followed in all such cases. Point No. 3 ‑ There are companies whose shareholders have approved the salaries for their managing/whole‑time directors at Rs. 7,500 per month, plus 50 per cent commission and perquisites (subject to the approval of the Central Government). They had perforce to give a consent to be governed by the old guidelines and accordingly the salaries in those cases have been fixed at a level of Rs. 5,000 per month or less. Will such companies be asked to apply afresh under section 310 of the Companies Act, or can they simply make a representation and request for enhancement of the rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of resolutions, etc.? Clarification ‑ Proposals for higher perquisites (in accordance with the revised guidelines) will also amount to proposals for increase in remuneration for which an application under section 310 will be necessary, and the prescribed legal procedure shall also have to be followed. Point No. 5 ‑ In case of payment of any fees or variable amount such as ex gratia, will such payment be treated as commission on net profits? Clarification ‑ No ex gratia payment is permissible under the guidelines. Point No. 6 ‑ Whether the ceiling of Rs. 45,000 applies to the perquisites mentioned in Part A of sub‑para III of the revised guidelines? Clarification ‑ The answer is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gas, electricity, water and furnishing will be valued as per the Income‑tax Rules, 1962. The value of these has, however, been subject to a ceiling of 10 per cent of the salary of the managerial personnel. Point No. 10 ‑ Will the term salary include commission also for the purpose of determining provident fund, pension fund, etc.? Clarification ‑ The term salary does not include commission for the purpose of determining the terminal benefits like provident fund, annuity, etc. Terminal benefits specified in para 1 of Part B are admissible only to those who are paid salary or both salary and commission. In the scheme of the revised guidelines, terminal benefits like provident fund, superannuation f ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
