Question

Calculation of net profit approach in managerial remuneration

Answer 1

Answer:

Profit calculation for managerial remuneration

The manager of a company may receive remuneration by way of a monthly payment and/or by way of a specified percentage on net profit calculate according to Sees. 349, 351 provided that such remuneration shall not exceed in the aggregate of 5% of the net profit without the approval of the Central Government— Sec. 387.

Answer 2

Section 198 lays down the manner of calculation of Net Profit of a company in any financial year for the purpose of both CSR and Managerial Remuneration. Profits, by way of premium on shares or debentures of the company, which are issued or sold by the company. Profits on sales by the company of forfeited shares.