Our essence is rooted in being honest and straight forward. We advise and advocate what we truly believe.
Our team and collective efforts allow free flow of information and knowledge from top to bottom and vice versa.
Teamwork is rooted in affluence DNA and we very much acknowledge the outcome of team work.
We firmly believe that Confidentiality is the cornerstone of our Profession and strive to maintain it to the fullest possible extent.
We believe that the simplest solution is the best one.
We understand only our profession and we are devoted to it. We are cent percent committed to the delivery of quality services to our clients.
Clause 78 of Section 2 of the Companies Act, 2013 defines “Remuneration” which means any money or its equivalent given or passed to any person for services rendered by him and includes perquisites as defined under the Income-tax Act, 1961.
As per Section 197(1) the total managerial remuneration payable by a public company, to its directors, including managing director and whole-time director, and its manager in respect of any financial year shall not exceed 11% of the net profits of that company for that financial year computed in the manner laid down in section 198 of the Companies Act, 2013, except that the remuneration of the directors shall not be deducted from the gross profits.
Whole time director can be paid remuneration for their services as directors. Also, if the directors have professional qualifications they can be paid for rendering professional services. Remuneration paid to directors for their professional services is not included as part of the remuneration if the services rendered are of a professional nature; and (b) the director possesses the requisite qualification for the practice of the profession in the opinion of the Nomination and Remuneration Committee if the company is covered under sub-section (1) of section 178, else in the opinion of the Board of Directors. So, a heart surgeon on the board of Fortis Hospitals does a bypass surgery at any of Fortis Hospitals in India or abroad and takes a fee for that will not form part of the director’s remuneration as the director here was not paid for performing his duties as a director but was paid for rendering professional services.
A private company that is a subsidiary of a public limited company is also considered as a public limited company. In the Companies Act, 1956 there was a concept of a deemed public company. But under the Companies Act, 2013 there is no concept of Deemed Public Company. So, there are only two types of companies viz. public companies and private companies. As per Section 2(71) of the Companies Act, 2013, a private company which is a subsidiary of a public company is also considered a public company. Hence, the above referred provisions pertaining to managerial remuneration are also applicable to private limited companies that are subsidiaries of public limited companies.
The following components of the salary package are not considered part of managerial remuneration:
Remuneration payable to the director is either decided by Articles of Association or Agreement entered in with by Company or Resolution passed in General meeting of the company.
General practice :
It is seen that approval of directors’ remuneration is taken by way of ordinary resolution for scenarios wherein the company is making a profit.
But there may be a scenario due to unforeseen circumstances wherein the company might face loss or inadequate profits.
In such scenarios the resolution passed would not cater to the need of the company.
According to schedule V of the Companies Act whenever there is a loss or inadequate profits company will not be able to pay remuneration to directors unless certain conditions are met as specified.
So does it mean that companies who have passed an ordinary resolution and not factored in the scenario wherein the company would be in loss or have inadequate profits can company still pay remuneration to WTD without complying with conditions as they could never envisage it?
Would that not be violating the Companies Act,2013?
Also, what does it mean by inadequate profits here as the term is not defined by the Companies Act nor any accounting standard?
What if at the end of the year, the company understands that the remuneration paid to WTD is in excess or the company is in losses and we shouldn’t have paid remuneration?
A few years back Mr Sunil Bharti Mittal had to seek a waiver of remuneration from shareholders as Airtel was into losses and after the end of the financial year, it realised we had paid excess remuneration.
So, companies must be careful in deciding salary structure and taking approval.
Series 2 : Remuneration payment to Non- Executive Directors of Public Company
Valuation opinion requires the right blend of analysis, experience and professional judgement. Our team has a Registered Valuer as required under
We provide financial, tax and corporate law due diligence support to our clients for inbound and outbound transactions.
ESOPs are one of the important tools to attract and retain employees and have long term career with the organization.
There are several compliances specified under FEMA for Indian Companies having FDI and ODI (Indian entities having investments in overseas Joint Venture
We carry experience of 15 years for registration of the NBCF with the RBI or carry out the process for change in management and control of the NBFC.
FinTech Companies are broadly categorized into digital payments or digital lending Companies. At Affluence,
India has emerged as one of the most attractive destinations not only for investments
We provide the entire gamut of Corporate Law Services, essential in rapidly changing regulatory and corporate environment.
SEBI plays an important role in regulating all the players operating in the Indian capital markets. It attempts to protect the interest of investors and aims at
We provide advisory and support services to the corporates/other entities, devising and structuring solutions for stress mitigation in their enterprises/units.
On the journey of transformation of a private company into a public company, success depends a great deal on a coordinated team
The efforts of any management in modern business environment are towards enhancing a shareholder’s value. The taxes (both direct and indirect) and
We at Affluence, adopt a comprehensive approach for implementation and compliances related to the GST and with an object to offer seamless services to our clients listed below.
In the fast-changing environment, procuring and retaining skilled staff is a challenge. Specially in the case of SMEs, in the absence of accounting manual
Today’s businesses across the globe increasingly seek better decision-making and stronger internal controls in order to attain greater shareholder value.
‘Startup India’ is a flagship initiative of the Government of India, intended to catalyze startup culture and build a strong and inclusive ecosystem for innovation and
Assurance and accounting services are directed towards supporting stakeholders such as lenders and investors. Our standardized
Director stand in a fiduciary position with the Company and Director will be held liable if Director do not act diligently in discharging his/her duties.
People are our greatest asset and we believe in our people. Our multi disciplinary team would always go that extra mile to ensure that all the client deliverables are prepared within agreed time frame to technical standards and presentational quality. Our success is greatly dependent on quality and performance of our people.