A few companies refuse to divulge employee remuneration details
At a time when every regulator and investor is beating the drum for greater transparency through disclosures and ministers are expressing concerns about obscene salaries, several companies are blatantly flouting disclosure requirements specified by the Companies Act, 1956. The Act, which outlines the regulatory and legal framework for companies in India, lays down specific guidelines regarding disclosures to be made by companies in their annual reports. One such guideline requires companies to disclose particulars of employees who draw a certain amount of salary (now Rs2 lakh per month) as an annexure to the director’s report. The disclosure includes the name, designation, qualification, experience and the name of the previous company where employed. The purpose is to enable shareholders of the company to know if salary is in fact commensurate with the experience and qualification of such employees.
 
However, several companies have decided to ignore this aspect and have not disclosed these details in their annual reports. These companies include ABG Shipyard, Aptech, Core Projects, Sterlite Industries, Mangalore Refineries and Petrochemicals Ltd and Network18, among others. In their defence, the companies are quoting a certain provision in the Companies Act and a SEBI circular to avoid the disclosure.
 
Section 217(2A) of the Companies Act makes it mandatory for every listed company to include in the director’s report a statement showing the name of every employee who is in receipt of remuneration (currently not less than Rs2 lakh) or which is in excess of that drawn by managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than 2% of the equity of the company. The section also requires that the statement mention whether such person is a relative of any director or manager of the company and if so, the name of such director. 
 
However, companies are skipping this section by taking recourse to Provisio (b)(iv) of Section 219(1) of the Companies Act and SEBI circular dated 26.04.2007 on sending abridged annual reports to the shareholders. The provision gives a listed company the option to send a statement containing salient features of balance sheet, profit and loss account and auditors’ report to the members of the company. The SEBI circular, in order to align Clause 32 of the Equity Listing Agreement with the provisions of Section 219(iv) made an amendment in the clause to permit listed companies to send a statement containing salient features of the above documents instead of sending full balance sheet and annual report. Using these legal aspects to their advantage, companies are not sending the required list of employees along with the annual report and are instead asking shareholders to write back to them in case they need the list.
 
This amounts to going against the Act as it supersedes all other enactments. Also, there is no way a company can abridge its director’s report or any of its annexures as it is dealt with a separate section (section 217 and not Section 219). Nowhere in the SEBI circular is there any clause which gives a listed company an option not to send the list of employees covered under section 217(2A) which is a part of the director’s report.
 
These companies should take a leaf out of the book of corporate governance biggies like Infosys Technologies and Tata Group of companies, who have set a good example by regularly making necessary disclosures in their annual reports.
Sanket Dhanorkar [email protected]
 
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COMMENTS

P P Valsan

8 years ago

This is nothing blatant violation of the provisions of act by some fraudulant people. By not sending salary details how much papers or cost they are saving? Most of the annual reports tom toms about their social commitments and imaginery achievements. If an investor have to write for getting information, he have to spend extra money and time which is not justifiable.

Gammon Infra lowest bidder for NHAI project
 
If things fall in place, Gammon Infrastructure Projects Ltd (GIPL) will soon have a new project and thus a new wholly-owned subsidiary too. GIPL has claimed to be the lowest bidder for National Highways Authority of India (NHAI) project connecting Patna to Muzaffarpur.
 
“We are the lowest bidders for the project and are awaiting a notification of intent (NOI) from NHAI,” said Parvez Umrigar, managing director, GIPL.
 
The project is on an annuity model connecting Patna to Muzaffarpur, to be built on a BOT basis. GIPL has a total committed capital expenditure of Rs10,000 crore across various sectors and Rs2,000 crore in the road sector alone.
 
GIPL creates a new subsidiary or special purpose vehicle for every new project it wins. At present, the company has some 16 projects, out of which it holds majority stake in 13 projects.
- Amritha Pillay [email protected]
 
 
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From Rajlakshmi to Kanya Suraksha: UTI learns its lessons
UTI Mutual Fund has a new scheme for the girl child - the Kanya Suraksha yojana scheme. But it has learnt from the Rajlakshmi scheme disaster and joined hands with the Bihar government this time

UTI Mutual Funds today marked the 'successful' completion of one year of the launch of its girl child scheme named Mukhya Mantri Kanya Suraksha Yojana. To many investors of Rajlakshmi, the fact that an offshoot of Unit Trust of India has dared to launch another scheme for the girl child would itself be a matter of great agitation. But there is a difference. This scheme for the girl child has been launched with the Bihar government chipping in with the initial investment. And unlike the Rajlakshmi scheme, which was launched in 1992 and discontinued in 2000, the returns are not an unrealistic 16% and more.
 
Under the Mukhya Mantri Kanya Suraksha Yojana, the Government of Bihar contributes Rs2,000 for every girl child falling below the poverty line born on or after November 22, 2007. The benefits of the scheme are limited to two girls per family falling below the poverty line. The amount of Rs2,000 is invested by the Women Development Corporation, Patna, Bihar, on behalf the Government of Bihar in UTI-Children's Career Balanced Plan-Growth Option. On completion of 18 years the amount equal to the maturity value will be paid to the girl child. Mukhya Mantri Kanya Suraksha Yojana was launched by Government of Bihar, a year back, under its various activities for the welfare of the girl child.
 
U K Sinha, Chairman and Managing Director, UTI Asset Management Company said, "Within a year the scheme has become the largest scheme of its kind in the country." 
 
In contrast, under the Rajlakshmi scheme, a minimum of Rs1,500 was to be deposited in the name of the girl child and the proceeds would be paid to the child on completion of 16-20 years of age. However, it was abruptly discontinued after the debacle of 2000, when UTI itself had to be bailed out with a huge infusion of tax-payer funds and investors had to be satisfied with a redemption amount.
 
The investment monolith of the 1980s and 1990s was then split into UTIMF and Special Undertaking -Unit Trust of India. 
 
The Rajlakshmi scheme too, had received a very good response from the investors initially. UTI's website then mentioned that the Rajlakshmi scheme, launched in 1992, offered an implicit return of 16.16% to 16.75% based on estimated returns available from capital market instruments then. What it probably means is that its expert fund managers made all the wrong assumptions in 1992 when they believed that high interest rates and a buoyant capital market would last forever.
 
UTI also had to face legal cases filed by investors after the discontinuation of the scheme. However, UTI was cleared of all the 50 odd legal cases in 2002. UTI had around 12.5 lakh investors for that particular scheme
- Amritha Pillay
 
 
 
 
 
 
 
 
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COMMENTS

mahesh chandra sharma

6 years ago

i purched Rajlaxmi certificate for my girl child VIDHI but i have lost original certificate and no record is with me can you help me about thia how can i go

lakshman prasad

7 years ago

I purchase UNIT TRUST OF INDIA (RAJ LAKSHI UNIT SCHEME)
Number Of Units: 500 units
Name Of Unit Holder : Rubi Kumari
Name of Applicant : Kishun Mahto,c/o bisheshwar Prasad,Touring veterinary officer, markacho,
Dist: koderma( Jharkhand)
Certificate no.R932057005664 issuing in Jamsedpur Office Jharkhand
Dated : 04/01/1993
e-mail: [email protected]
Dear Sir/Madam,
I have taken a UTI Rajalakshmi 500 UNITS in 1993 for Rs 5, 000 under my daughter name Miss RUBI KUMAR and its maturing on 04-01-2010.The Maturity Amount is Rs 65, 000.
Kindly let me know where I Can submit my Cert of 500 Units and collect the maturity amount.
Appreciate your reply in this regard...09810305746 mail id [email protected]

kishun mahto

7 years ago

i have purchase uti RAJ LAKSHMI UNIT YOJNA in year 1993

unit certificate no. R932057005664

please tell status

madhukar rasane

8 years ago

respt sir,
plesce mumbai address is rajlaxmi kanya surkhsya uti & phone no.

than you,
m.rasane

GOPAL LAL PANCHAL

8 years ago

POLICY NO.R944037016805 KA BHUGTAN AAJ TAK NAHI HUA HAI.

Gopal lal panchal

8 years ago

my policy no.R944037016805 Macurity in 22.11.2009 ka bhugtan aaj tk prapt nahi hua hai.

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