Directors' report (disclosure of employees)

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Pankaj Arya (Querist)
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15 November 2012 Dear Experts

The names, qualifications etc. of employees drawing more than 5 lakhs per month are required to be disclosed in the Directors Report.

Is this requirement also applicable for Whole Time Directors who are drawing salary more than 5 lakhs per month.

Please guide...
Thanks

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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15 November 2012 Applicable to All. i.e WTD Also

Pankaj Arya

Pankaj Arya (Querist)
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16 November 2012 Thanks Ayush for the guidance...

The appointment resolution is like this

"..........hereby appointed at a remuneration of .... lakhs per month, plus actual expenses for official purposes including mobile, car expenses etc."

Please guide whether besides the monthly salary, should we disclose all the amount paid for mobile bills, car expenses, driver's salary(driver is on Company's rolls). Mobile and Car is being used for both Official & personal purposes

Please guide
thanks & regards

Ajay Mishra

Ajay Mishra (Expert)
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16 November 2012 Hi

The provisions applicable on employee whether he is WTD/MD or other employee draw remuneration 5 lakhs p.m..

TATEMENT SHOWING PARTICULARS OF EMPLOYEE [SECTION 217(2A)]
Section 217(2A) of the Companies Act, 1956 provides that the Directors’ Report shall contain information in a statement about employees who are in receipt of remuneration of such sum as may be prescribed, per annum if employed in the whole of the last year or per month if employed for part of the year. The particulars required to be given in the statement to the Directors’ Report shall be in accordance with Companies (Particulars of Employees) Rules, 1975. The salary limit of employees for the purpose of the above Rule has been raised by Notification GSR 289 (E) dated 31.03.2011 from Rs. 24 lakhs to Rs. 60 lakhs per annum in respect of employees employed throughout of the year or from Rs. 2 lakhs to Rs. 5 lakhs per month if employed for the part of the year.
MCA has clarified vide its Circular No. 23/2011, dated 03.05.3011 that increase in remuneration limit is applicable to all Directors’ Report approved by the Board of Directors on or after 01.04.2011 irrespective of the accounting year, being approved by the Board.

Ajay Mishra

Ajay Mishra (Expert)
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16 November 2012 Hi

What details is required to be given in Director Report is given in above mention rule. That information is sufficient.

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