AMENDMENTS TO THE ASSOCIATIONS WITH CHARITABLE AND NOT FOR PROFIT OBJECTS REGULATIONS, 2018

 

SECP vide Notification No. S.R.O.131 (I)/2021 dated February 01, 2021 made amendments to the Associations with Charitable and Not for Profit Objects Regulations, 2018, (afterwards referred as “Regulations”).

 

Amendments relate to payment / entitlement of Meeting Fee for attending Meeting of Board or Committee of Board and its disclosure in Directors’ Report as attached to the financial statements of Association shall disclose the payment of meeting fee and reimbursement of actual expenses incurred by each director including chief executive for attending meetings of board and committees of board:

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Detail discussion is as under: –

 

Amendment No. 1

 

The terms “Benefits” and “Remuneration” defined under Regulations are amended and now cover / address the payment / entitlement of Meeting Fee for attending the Board Meeting or a Committee of Board.

 

Amended definition of “Benefit” and “Remuneration” under regulations are as follows: –

 

Benefits: –

“Benefits” means all monetary and non-monetary favors of any kind received from the company directly or indirectly including but not limited to company maintained car, medical plan, house rent, loans and advances but does not include official travelling reimbursements, boarding and lodging expenses incurred on attending official meetings or expenses incurred in attending office as per entitlement or any meeting fee for attending the meetings of the board or a committee of board, as determined by the board of directors.

 

Remuneration: –

“Remuneration” means reward or compensation for employment in the form of pay, salary or wage including all other perquisites and non-cash incentives but does not include meeting fee for attending meetings of board or committee of board and reimbursement for boarding or lodging for attending board meetings.

 

Amendment No. 2

 

Clause (vi) under Regulation 7 (titled: “Conditions applicable to section 42 companies”) is entirely substituted.

 

Earlier; Directors and Chief Executive Officer were only entitled for reimbursement of Actual Expenses for attending Meetings. Whereas now Directors and Chief Executive Officers are also entitled to receive Meeting Fee for attending Meeting of the Board or a Committee of Board along with reimbursement of Actual Expenses for attending Meetings.

 

Further disclosure about the payment to Directors & Chief Executive Officer in Director’s Report on account of reimbursement of expenses for attending Meeting was also not required; and now made compulsory for NPOs to disclose in Directors’ Report about payment of Meeting Fee and Reimbursements of Expenses for attending Meeting of Board and of Committee of Board, as determined by the Board.

 

Clause (vi) under Regulation 7 (titled: “Conditions applicable to section 42 companies”) shall now be read as follows: –

 

(vi)       The Directors and the Chief Executive Officer shall be entitled for reimbursement or payment of actual expenses incurred by them for attending meetings and they may also receive fee for attending meetings of the board or a committee of board, as determined by the board: –

 

Provided that the directors’ report as attached to the financial statements of Association shall disclose the payment of meeting fee and reimbursement of actual expenses incurred by each director including chief executive for attending meetings of board and committees of board:

 

Provided further that the board, in the case of public sector company, shall also comply with all applicable laws, instructions and policies of the relevant line ministry, if any, while approving amount of meeting fee for attending meetings of board and committee of the board;

 

Notification-amendment-to-S-42-regulations (1)