CS Vinita Kulkarni (CS + IPR + Teaching) (143 Points)
10 April 2014Executive Director of a Private Limited Company has got Rs. 40 lakhs as performance based commission for the year 2013-14. A Board Resolution has been passed for approval of such commission.
Does this attracts the provision of Section 314?
What should the Compliance Report for the year should state?
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 14 April 2014
I think your query is based on Companies Act 1956. Now things have changed a lot after notification of several sections of Companies Act 2013 from 1.4.2014. As per Sec.196(4) of CA 2013 remuneration needs approval of members. Approval of CG is also required if the remuneration is not as per conditions given in Sch.XIII. Sec.314 of CA 1956 is now Sec.188 of CA 2013. However, the department had clarified that directors' remuneration covered u/s 269 of CA 1956 will not be covered u/s 314 also.
CAclubindia
