Profit of S Ltd. before remuneration of Managing Director was ₹20,10,000 for the year ended on 31st March, 2018. The said profit has been calculated considering the following figures: ₹ Capital Expenditure 8,25,000 Depre

CS Executive · Company Accounts & Auditing Practices · PYQS · June 2018
Profit of S Ltd. before remuneration of Managing Director was ₹20,10,000 for the year ended on 31st March, 2018. The said profit has been calculated considering the following figures: ₹ Capital Expenditure 8,25,000 Depreciation as per section 123 read with schedule II of Companies Act, 2013 70,000 Bonus to technicians 3,15,000 Compensation paid to workman 70,000 Loss on sale of fixed assets 70,000 Subsidy from Government 4,20,000 Multiple shift allowance 1,05,000 Provision for taxation 28,00,000 Ex-gratia payment to an employee 35,000 Profit on sale of building 2,10,000 Determine the maximum remuneration payable to Managing Director of S Ltd. from the above information.

Answer & Explanation:

Calculation of Profit as per Section 198 of the Companies Act Particulars Amount (₹) Net Profit 20,10,000 Add: Capital Expenditure 8,25,000 Loss on Sale of Fixed Assets 70,000 Provision for taxation 28,00,000 Ex-gratia payment to an employee 35,000 Less: Profit on Sale of Building (2,10,000) Total 55,30,000 Remuneration payable under Companies Act, 2013 (₹55,30,000 * 5%) 2,76,500

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