January 21, 2002

‘7’

    The Government in the Department of Company Affairs (DCA) has issued a notification enhancing the managerial remuneration in the corporate sector from the existing Rs.75,000 minimum per month to Rs.1,50,000 per month for companies with effective capital of less than Rs. 1 crore and a maximum of Rs.4,00,000 per month for companies with effective capital of Rs.100 crores or more from the existing Rs.2,00,000 per month.

    The managerial remuneration, which has been doubled, will be Rs.2,00,000 for companies with effective Capital of over Rs. 1 crore but less than rupees five crores from the existing rupees 1,00,000, Rs,2,50,000 per month for companies with effective capital of rupees five crores or more but less than rupees 25 crores from the existing Rs.1,25,000 per month, rupees 3,00,000 per month for companies with effective capital of over rupees 25 crores and less than Rs.50 crores from the existing Rs.1,50,000 per month, rupees 3,50,000 per month for companies with effective capital of rupees 50 crore or more but less than rupees 100 crores for the existing Rs.1,75,000 per month and Rs.4.00.000 per month from the existing Rs.2,00,000 per month from companies with effective capital of rupees 100 crores or more.

    The enhanced managerial remuneration will be subject to approval by a resolution of the Remuneration Committee of a company provided the company has not defaulted in repayment of any of its debts including public deposits or debentures or interest payable thereon for a continuous period of 30 days in the preceding financial year before the date of appointment of such managerial person. It will also be accompanied by a special resolution passed at the general meeting of the company for payment of remuneration for a period not exceeding three years. The shareholders of the company will have to be informed of the remuneration package of the managerial person. Besides, the company shall mention disclosures regarding managerial remuneration in the Board of Directors’ report under the heading "Corporate Governance"’, attached to the annual report.

    The Notification has been issued under sub-Section (1) of Section 641 of the Companies Act, 1956 amending Schedule XIII to the said Act.

    The last revision in the managerial remuneration was effected on March 02, 2002.