The draft company rules have proposed to halve the threshold for disclosing details of employees drawing remuneration above a certain level in the director's report to Rs 12 lakh (Rs 1.2 million) per annum.
This is expected to disclose a long list of employees in the bigger companies as every body with a pay packet of Rs 100,000 per month will make it to the annual report.
The draft rules also specify that the audit committees constituted by the board of directors of the company would require to have at least two independent directors.
In the existing Companies Act, there is no concept of independent directors. The same was introduced in the concept paper released by the Ministry of Company Affairs in August 2004.
The existing Companies Act requires the board's report to disclose details of those employees who take home at least Rs 24 lakh (Rs 2.4 million) per annum.
If an employee has not worked for the full year and earned less than Rs 12 lakh (Rs 1.2 million) in the year, then too disclosure would be required if the amount works out to be at least Rs 100,000 per month.
The statement referred to in clause should also indicate whether any such employee is a relative of any director or manager of the company and shares the same name.
Draft Rules
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Employees with salary of more than Rs 1 lakh will have to be listed in the annual report
- Audit committees must have at least two independent directors
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