3 per cent of the net profits of the company in any other case.

Higher remuneration may be paid with the approval of the Central Government. A director may receive remuneration by way of a fee for each meeting of

the Board,

or a committee thereof, attended by him.

A whole-time director or a managing director may be paid remuneration either by way of a monthly payment or at a specified percentage of the ne profits

of the company or partly by one way and partly by the other. However, except with the approval of the Central Government such remuneration shall not

exceed 5 per cent of the net profits for one such director and if there are more than one such director, 10 per cent for all of them together.

The net profits of the company for the aforesaid purpose shall be computed in the manner prescribed in Section 198 (1).

If any director draws or receives, directly or indirectly, by way of remuneration any sum in excess of the limits stated above, without the sanction of the

Central Government, where it is required, he shall have to refund such sum to the company and until the refund is made, the money will be held by him in

trust for the company. The company cannot waive the recovery of any sum refundable to it, unless permitted by the Central Government.

The aforesaid provisions of Section 309 which lay down limits to the remuneration payable to directors individually do not apply in respect of an

independent private company.

As regards remuneration payable to a Manager, Section 387 provides that he may receive remuneration either by way of a monthly payment or by way of a

specified percentage of the net profits, or partly by one way and partly by the other. Such remuneration, however, must not exceed in the aggregate 5 per

cent of the net profits except with the approval of the Central Government.