Can anyone please explain me in lay man terms what section 197(13) says with an example
1 Replies
CS Rashi Jain
(Practicing Company Secretary @ RASHI JAIN & ASSOCIATES)
(1295 Points)
Replied 09 October 2020
It means if Insurance is taken by the Company on behalf of the KMP. KMP shall indemnify the Company for any loss caused due to NDMBB and Insurance Company directly indemnify the KMP.
If KMP are held guilty of NDMBB, insurance premium paid by the company shall be included to the Managerial Remuneration, otherwise not.
KMP - Key Managerial Persons (i.e. CEO / MD / WTD / CFO / CS)
NDMBB - Negligence, Default, Misfeasance, Breach of Duty or Breach of Trust
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