Disclosure norms for IT companies eased
By siliconindia   |   Thursday, 01 April 2004, 20:30 IST
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NEW DELHI : Information technology companies will not be required to make disclosures of employees working at overseas destinations in the statements forming part of board of directors’ reports. An exemption to adhering to a disclosure norm that required companies to provide particulars of employees paid more than Rs 24 lakh per annum or Rs 2 lakh per month has been notified by the department of company affairs. Under the Companies (Particulars of Employees) Rules, 1975, all companies are required to disclose names, remuneration, terms of employment and nature of the person as well as his qualifications and experience and date of joining in the statement attached to the balance sheet for all employees drawing upwards of Rs 24 lakh per annum or Rs 2 lakh per month in a financial year. The latest notification amending this rule states that IT companies as defined in the Sebi's Disclosure and Investor Protection Guidelines 2000 will not be required to adhere to this requirement for employees who are working in overseas offices, provided that the person concerned is not a director of the company or a relative of a director. The companies will, however, be required to make the disclosure in its report filed with the Registrar of Companies and to any shareholder who seeks the information at an annual general meeting. The exemption comes as a relief to companies providing services at client's site and for those with large presence in overseas, particularly to the likes of Infosys, Wipro, TCS and Satyam. The Companies Act, 1956, requires companies to make various disclosure in the board of director's report that is attached to the balance sheet and this includes statement on the state of affairs of the company, dividends recommended, reserves being created and compliance with various regulatory requirements.