The Ministry of Corporate affairs has issued General Circular no. 07/2015 dated 10th April, 2015 to provide clarification on the matter relating to the payment period for the remuneration paid to the managerial personnel in accordance with Schedule XIII of the Companies Act, 1956 which is now Schedule V of the Companies Act, 2013.
Stakeholders have drawn attention to the provisions of Schedule Xll (sixth proviso to Para (C) of Section ll of Part ll) of the Companies Act, 1956 (Earlier Act) and as clarified vide Circular number 14l11/2O12-CL-VII dated 16th August,2012, which allowed listed companies and their subsidiaries to pay remuneration, without approval of Central Government, in excess of limits specified in para II Para (C) of such Schedule if the managerial person met the conditions specified therein. Stakeholders have expressed that since similar provisions are not available in the Schedule V of the Companies Act, 2013, there is a need for a clarification that a managerial person appointed in accordance with such provision of Schedule XIII of Earlier Act may receive relevant remuneration for the period as approved by the company in accordance with such provisions of Earlier Act.
The matter has been examined in the light of earlier clarifications on transitional matters issued by the Ministry. It is clarified that a managerial person referred to in para 1 above may continue to receive remuneration for his remaining term in accordance with terms and conditions approved by company as per relevant provisions of Schedule XIII of earlier Act even if the part of his/her tenure falls after 1st April, 2014.