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A listed public company has passed resolution in Sept. 2010 for re-appointment of Managing Director for 5 years i.e (Sept. 2010 to Sept. 2015) & their remuneration in Remuneration Committee, Board Meeting & Shareholders Meeting under the Companies Act, 1956. The Co. has obtained MCA approval for remuneration payment (5% of Profits) to MD year 2013-14 due to inadequate Profits. The Company has inadequate Profits in current year 2014-15 and required MCA approval. The Co. has not passed any resolution in Remuneration Committee, Board Meeting & Shareholders Meeting under the Companies Act, 2013 during the Year 2014-15. As per MCA Circular 32/2014 dated 23.07.2014 – Clarification on transitional period for resolutions passed under the Companies Act, 1956. It is clarified that resolutions approved or passed by companies under relevant applicable provisions of the old act during the period from 01st Sept, 2013 to 31st March 2014 can be implemented in accordance with provisions of old act, notwithstanding the repeal of the relevant provisions subject to the conditions a) That the implementation of the resolution actually commenced before 01st April, 2014 and b) That this transitional arrangement will be available upto expiry of one year from the passing of the resolution or 6 months from the commencement of the corresponding provision in new Act whichever is later. Now what are the options available to the company: 1. Apply to MCA for their approval on the basis of resolutions passed under the Old Act – The Companies act, 1956. Or 2. The company pass related resolutions in next AGM -2015 and apply to MCA after passing of resolutions for waiver of remuneration payment made to MD during the year 2014-15.

Remuneration to KMP

Posted By: Sunil kumar agrawal 10 year(s) ago

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    Akansha

In the cited case, resolution was passed in September 2010 and as per MCA circular No. 32/2014, only those resolution are valid under old law for a certain period as stated in circular which were passed during the period starting from September 1, 2013 to March 31, 2014. Thus, we suggest you to hold the extraordinary general meeting for the purpose of passing the resolution for appointment and fixing the remuneration of Managing Director in pursuant to sec 196 and 197 of the Act. Thereafter file an application after March 31, 2015 to Central Government for waiver of remuneration payment made to MD during the year 2014-15

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