MCA has vide its notification dated 30th June, 2016 amended the Companies (Appointment & Remuneration to Managerial Personnel) Rules, 2014 as follows:
- Henceforth form MR-1 is not required to be filed for appointments of CEO, CFO and Company Secretary
- Clauses (v), (vi), (vii), (ix), (x) & (xi) of Rule 5(1) has been omitted. Rule 5(1) pertains to disclosure in the Board report by listed companies of the various matters related to remuneration of Key Managerial Personnel. So now by this amendment, companies need not disclose (v) the explanation on the relationship between average increase in remuneration and company performance; (vi) comparison of the remuneration of the Key Managerial Personnel against the performance of the company; (vii) variations in the market capitalisation of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the net worth of the company as at the close of the current financial year and previous financial year; (ix) comparison of the each remuneration of the Key Managerial Personnel against the performance of the company; (x) the key parameters for any variable component of remuneration availed by the directors; (xi) the ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year;
- Rule 5(2) has been amended as follows. Basically Rule 5(2) specifies disclosure of names of employees of the company who are drawing remuneration above a certain specified limit. Now the disclosure is required in respect of .. “the names of the top ten employees in terms of remuneration drawn and the name of every employee”. So additional disclosure of top ten employees have to be given in the Board report and top ten is in respect of the remuneration drawn.
- Further the threshold limits in Rule 5(2) have been revised upwards from Rs.60 lakhs per annum to Rs.1.02 crores per annum and from Rs.5.00 lakhs per month to Rs.8.50 lakhs per month.
- Form MR-1 has also been revised.