Managerial Remuneration

Sec (198, 350, 349) of Companies Act, 2013

Key Takeaways:

• Meaning of Management
• Meaning of Remuneration
• Maximum Limit of Remuneration.
• Calculation of Net Profits.
• Provisions in the absence of Profits.
• Questions
Meaning of Remuneration
Example 1:

From the particulars of X Ltd, calculate the

managerial remuneration assuming there are two
whole time directors; a part time director and
manager: (i) Net profit before provision for income
tax and managerial remuneration but after
depreciation - Rs. 8,70,410 (ii) Depreciation provided
in the books - Rs 3,10,000 and (iii) Depreciation
allowable as per Companies Act - Rs. 260000. (iv)
Provision for Repairs – Rs 25,000. (v) Actual Repairs:
Rs 15,000.
Remuneration in absence of profits or
shortage of profits