Particulars of employees - u/s 217 (2A) of Companies Act 1956

The Companies (Particulars of Employees) Rules, 1975 makes it compulsory for every company to provide prescribed details of all the employees that earns Rs.60.00 Lacs in a year or more than Rs.5.00 Lacs per month. Details of employees serving part of the year shall also be included based on the criteria of monthly remuneration i.e greater than Rs.5.00 Lacs.

The new limit of Rs.60.00 lacs has been enhanced from the earlier limit of Rs.24.00 lacs with effect from 31 March 2011.

Vide Circular No.22/76 File No.8/27 (217A) 75-CL V Dated 6th August, 1976 Department of Company affairs has clarified that the word remuneration means the entire remuneration paid to the employee in a commercial and common parlance this remuneration should be the Cost to Company [CTC]. The circular states

"....In this connection, I am directed to clarify that the expression "remuneration received" occurring in the aforesaid rules will include all expenses incurred by the companies in providing any benefit or amenity to the employees and the word 'remuneration' has the meaning assigned to it in section 198 of the Companies Act, 1956. All companies should, therefore, indicate the salary and perquisites drawn by the employees in term of the actual expenditure incurred by the company."

Below is the text to be included in the the Directors report to avoid specifying the entire list of employees who are earning salary beyond the limit specified under the Companies Act 1956

"As required under the provisions of Section 217(2A) of the Companies Act 1956, read with the Companies (Particulrs of employees rules 1975) as amended, the names and other particulrs of the employees are set out in the Annexure to the Directors' Report. However in terms of the provisions of Section 219(1)(b)(iv) of the Companies Act 1956, the Report and the Accounts is being sent to all shareholders of the Company excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of said Annexure may write to the Company Secretary at the Registered office of the Company."