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Abstract and Memorandum of Concern or Interest under Section 302

Where a company -
(a) enters into a contract for the appointment of a manager of the company, in which contract any director of the company is in any way, whether directly or indirectly, concerned or interested; or
(b) varies any such contract already in existence and in which a director is concerned or interested as aforesaid;

the company shall, within 21 days from the date of entering into the contract or of the varying of the contract, as the case may be, send to every member of the company an abstract of the terms of the contract or variation, together with a memorandum clearly specifying the nature of the concern or interest of the director in such contract or variation.


Where a company enters into a contract for the appointment of a managing director of the company, or varies any such contract which is already in existence, the company shall send an abstract of the terms of the contract or variation to every member of the company within the time specified above (21 days); and if any other director of the company is concerned or interested in the contract or variation, a memorandum clearly specifying the nature of the concern or interest of such other director in the contract or variation shall also be sent to every member of the company with the abstract aforesaid.

Where a director becomes concerned or interested as aforesaid in any such contract as is referred to in subsection (1), (2) or (3) after it is made, the abstract and the memorandum, if any, referred to in the said sub-section shall be sent to every member of the company within twenty-one days from the date on which the director becomes so concerned or interested.

A format of the same is given hereunder:

Format of Abstract and Memorandum of Concern or Interest under Section 302 of the Companies Act, 1956
(On the Company’s Letterhead)

To
The Members
_____ Limited

Sub: Abstract and Memorandum under section 302 of the Companies Act, 1956.

Dear Members,

The Board of Directors of the Company have, at their Meeting held on _____, on the recommendations of the Remuneration Committee and subject to the approval of the Members in the General Meeting, has approved and re-appointed Mr. _______ as the Executive Director of  the Company for a period of 5 years with effect from _________.

Mr. _______ holds a ___ degree from _____ and is a Master of Business in Marketing. Mr. ________ has been associated with the Company since ______, looking after the Corporate Affairs of the Company. He has vast experience in ______ matters. He has vital contribution to the progress of the company.

In compliance with the requirements of Section 302 of the Companies Act, 1956, an abstract of the terms of re-appointment and remuneration payable to Mr. _____, Executive Director as per the Board Resolution and the Memorandum of Concern or Interest of the Directors, are furnished herein below:

TERMS OF APPOINTMENT

(a) Tenure - ________ to ________

(b) Nature of Duties
Mr. ______, Executive Director shall devote his whole time and attention to the business of the Company and carry out such duties as may be entrusted to him by the Board and/or the Managing Director from time to time and exercise such powers as may be assigned to him, subject to superintendence, control and directions of the Board in connection with and in the best interests of the business of the Company and the business of any one or more of its associated companies and / or subsidiaries, including performing duties as assigned by the Board from time to time by serving on the boards of such associated companies and / or subsidiaries or any other executive body or any committee of such a company.

(b) Remuneration:
1. Basic Salary of Rs. ____/- (Rupees ___only) per month with an authority to the Board to grant such further increases from time to time as they may deem fit, within the limits specified in Schedule XIII Part II of the Act, as may be amended from time to time
2. Perquisites, allowances and amenities:
i. Leave: Entitled for leave with full pay or encashment thereof as per the rules of the Company.
ii. Company's  contribution  to Provident Fund  and Gratuity  which  shall  not  be  included  in  the computation of limits for remuneration or perquisites.
iii. Bonus:  As per the company’s policy.
iv. Housing:  Rent free Company accommodation.
v. Medical Expenses: Reimbursement of all medical expenses including hospitalization and surgical charges incurred for self and dependents.
vi. Club Fees: Fees of 2 clubs including admission and life membership fees.
vii. Car: The Company shall provide two cars with chauffeurs, for official as well as personal use.
viii. Conveyance Facilities:  The Company shall provide suitable vehicle. All the repairs, maintenance and running expenses including driver's salary shall be reimbursed by the Company.
ix. Telephone and other communication facilities: The Company shall provide telephone and other communication facilities at the Executive Director's residence.  All the expenses incurred shall be reimbursed by the Company.
x. Gratuity: One month’s salary for each completed year of service.

Overall Remuneration: The above remuneration shall be subject to the overall ceiling laid down under section 198 and 309 read with Schedule XIII of  the Companies Act, 1956 and the above remuneration
shall be payable as minimum remuneration in accordance with the Schedule XIII to the Companies Act, 1956, if  the Company has no profits or its profits are inadequate in any financial year during the currency of  this appointment.

Minimum Remuneration: In the event of loss or inadequacy of profits in any financial year during the currency of tenure of service of the Executive Director, the payment of salary, performance bonus, perquisites and other allowances shall be governed by the limits prescribed under Section II of Part II of Schedule XIII of the Companies Act, 1956 as may be for the time being in force.

Other Terms and Conditions:
(a) Mr. _______, shall not be liable to retire by rotation whilst he continues to hold office of Executive Director.
(b) Mr. _______, shall keep strictly confidential all Confidential Information of the Company solely for the Company purposes during the term of the appointment and thereafter.
(c) The Company or Mr. _____, ED shall be entitled to terminate the re-appointment, by giving to the other party 45 days notice in writing.
(d) The terms and conditions of the said re-appointment may be altered/amended from time to time by the Board of Directors or Committee thereof in consultation with Mr. ______, ED, as may be permissible under the Companies Act, 1956.


MEMORANDUM OF CONCERN OR INTEREST

None of the directors is in any way concerned or interested in the above re-appointment except Mr. __________, to the extent remuneration payable to him.

Inspection of Resolution:

A Copy of the aforesaid resolution passed by the Board of Directors on ______, the agreement entered into with Mr. ______, ED in respect of the above reappointment and Articles of Association of the company are available for inspection by the members at the Registered Office of the company between 11.00 a.m. to 01.00 p.m. on any working day except Saturday and public holidays.

For __________LIMITED

Place:                                                                                                                                  ___________
Date:                                                                                                       Company Secretary / Director
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