Managerial Remuneration in excess of limit under Schedule XIII

The Department of Company Affairs, through its Circular dated 10.11.2000, has notified that if for any justifiable reason, it is proposed to pay remuneration

in excess of Schedule XIII of the Companies Act, it should be timely resolved in the Board meeting. The Board resolution should clearly justify the increase

giving sustainable adequate reasons for payment of remuneration in excess of the amount indicated in the schedule.

The Circular has further advised companies to make application for Government approval well in time and no payment of remuneration in excess of the

limit under Schedule XIII should be made till the Government order is received.

. In this connection, the Department has directed auditors of the companies, who audit their accounts to ensure that remuneration to the managerial

personnel is not paid in excess of the limit under Schedule XIII without necessary approvals. The company secretary has also been asked to playa

constructive role in ensuring that the matters relating to managerial remuneration are dealt with in the company within the stipulated timeframe.

The Department has further, vide its Circular dated 27.12.2000, advised the companies which submit an application for a remuneration which is higher

than the prescribed limit to take into consideration the following factors (detailed note on each as applicable be furnished) and give a detailed justification.