40 Clause (xi) of Para 3 requires the auditor to report whether managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Sec. 197 read with schedule V to the Companies Act? In which of the following case auditor is required to report the particulars required as requisite approval is not taken:
(a) ABC Ltd. pay 4% of net profits to its managing director without passing any Special Resolution.
(b) ABC Ltd. pay 9% of net profits to its managing director and two whole time directors without passing any Special Resolution.
(c) ABC Ltd. a listed company pay 4% of net profits to directors other than managing directors and wholetime directors by passing ordinary resolution.
(d) ABC Ltd. pay 15% of net profits to its directors, including managing director and whole-time directors, by passing ordinary resolution, without obtaining approval of Central Government.
To break 11% limit ordinary resolution is fine
To break 5%, 10%, 3%, 1% limits special resolution is required
So from above “c” should be the answer to break 3% special resolution was required