University:
Cypress College
Course:
BUS 100 C | Introduction to Business
Academic year:

2018
Views:

109

Pages:

10
Author:

himeromdwx

Managerial Remuneration: Remuneration to: Managing Director (MD) Manager Whole Time Director (WTD) Director (Part-Time Director) Limit of Yearly Remuneration: In case the manager has worked for less than a year, the limit becomes proportionate. Example Calculation: Company X Ltd. Loss: 50,000 Effective Capital: 320 crore Formula: 60 lakh + 0.01% x 7000 lakh Ordinary Resolution: ₹68,70,000 p.a. Special Resolution: ₹1,21,40,000 p.a. With CG (Central Government) Approval: ₹1,21,40,000 p.a. Resolutions: Ordinary Resolution: In favor > 50% Special Resolution: In favor > 75% 2.5% of Net Profit if: Managerial person within 2 years of appointment is not: Holding security ≥ ₹5 lakh Employee of Director Relative of Director or Promoter Profit Computation (u/s 198): Profit before Tax as per P/L A/c Add Depreciation in book, Managerial Remuneration, Provision for Bad Debts Deduct Depreciation as per Schedule II Result: Profit u/s 198 Effective Capital: Components: PSC (Paid-up Share Capital) ESC (Equity Share Capital) Reserves (excluding Revaluation Reserve) Deposits Investments (other than trade investments) Preliminary Expenditure (not written off) Formula for Managerial Remuneration: Ordinary Resolution: ₹30 lakh p.a. Special Resolution: ₹60 lakh p.a. With CG Approval: Above ₹60 lakh p.a. Depreciation (Schedule II): Assets are depreciated over their useful life based on tangible/intangible assets. For roads under BOT (Build, Own, Operate, Transfer), use toll revenue for amortization rate. Dividend u/s 123(1): Can be paid from: Current Year Profit Balance of P/L A/c & General Reserve Money from Government (if any) Restrictions on Declaration: Rate of Dividend ≤ Avg. rate of the last 3 years. Maximum amount drawn from reserves is 10% of total. Example Calculation: Dividend to be paid: ₹80 lakh (16%) Conditions for Withdrawal from Reserves: Average Dividend Rate: 12% Max Amount = 10% of (Paid-up Capital + Free Reserves) Reserve balance post-withdrawal ≥ 15% of Paid-up Capital. Dividend Distribution Tax (DDT): DDT rate: 16.995% Example: Declared Dividend: ₹1,00,000 Gross Dividend = ₹1,20,475 Corporate Social Responsibility (CSR): CSR Conditions: Net Worth ≥ ₹500 crore Turnover ≥ ₹1000 crore Net Profit ≥ ₹5 crore CSR Expenditure: 2% of the average profit of the last 3 years. Example Calculation: Average Profit: ₹126.667 crore CSR Expense: 2% = ₹2.53333 crore Provision to be made in short-term liabilities.