By Himanshu V. Kishnadwala
Chartered Accountant
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From Notes to Accounts:
(a) Directors’ remuneration:
(i) The above does not include gratuity and leave encashment benefits as the provisions for these are determined for the Company as a whole and therefore separate amounts for the directors are not available.
(ii) Chairman and Managing Director, Chief Executive Office and Executive Director and Executive Director and Chief Operating Officer of the Company are entitled to options under ‘Option Right Plan’ and shares under the ‘Share Ownership Plan’ of Huhtamaki Oyj (the ultimate holding company) which entitles the holder of the option rights to subscribe to the shares of the ultimate holding company at a future date, at a price fixed based on the fair market prices of the shares during specified period plus certain percentage of market value on the exercise date and the recipient of grants under share ownership plan is entitled to receive shares at nil cost, respectively. The schemes detailed above are assessed, managed and administered by the ultimate holding company and there is no cost charged to the Company. The charge taken by Huhtamaki Oyj in its accounts for the year ended 31st December 2010 for these options and shares is Rs.7,193 Thousand (previous year Rs.11,214 Thousand).
(iii) The above remuneration does not include the remuneration of the Chairman and Managing Director of the Company of Rs.11,812 Thousand (previous year Rs.4,196 Thousand) which is received from Huhtamaki Oyj, the ultimate parent company, for his role as Executive Vice-President (‘EVP’) — Flexibles Packaging Global, Huhtamaki Oyj.
(b) Computation of net profit in accordance with sections 198, 349 and 350 of the Companies Act, 1956 and commission payable to Directors as shown in Table 1 on previous page:
The Company depreciates its fixed assets as enumerated in Schedule 16 Policy III wherein estimated useful lives for certain assets are lower than implicit estimated useful lives prescribed by Schedule XIV of the Companies Act, 1956. Thus, the depreciation charge in the books is higher than the minimum prescribed by the Companies Act, 1956. This higher depreciation charges has been considered as deduction for the Computation of Managerial Remuneration above.
