Date:13/04/2004 URL: http://www.thehindubusinessline.com/2004/04/13/stories/2004041302630100.htm

Back IT cos happy with DCA salary disclosure exemption

Gaurav Raghuvanshi
Richa Mishra

Heeding to the demands of the industry, the DCA had recently exempted IT companies from sharing the remuneration details in their annual reports.

New Delhi , April 12

IT is only on a few occasions that the Department of Company Affairs decision finds favour with the industry and here is one. The recent regulatory relief offered by the department to the information technology industry regarding exemption from disclosing the salary details of employees posted overseas has been welcomed by the industry.

"As of now the industry is comfortable with not having to disclose the remuneration particulars of employees posted overseas. It would go a long way in preventing rival companies from poaching talent," Mr Kiran Karnik, President, National Association of Software and Service Companies (Nasscom), said.

Heeding to the demands of the industry, the DCA had recently exempted such companies from sharing the remuneration details in their annual reports. The companies, however, will be required to submit the details of amounts paid to disclosure-exempted employees to the Registrar of Companies (RoCs).

A section of industry has also expressed reservations about this requirement prescribed by the department, saying that the information could easily be accessed by competitors from the RoC offices.

The department is understood to be working out a format in which the companies would be able to submit the details to the RoCs. In fact, according to Finance Ministry sources, "We have noted the industry's concerns and are trying to address the same."

Mr Karnik felt that a certain amount of checks and balances were necessary even at the RoC stage. "We are aware of the possibility of information leaking out of RoC offices. But before taking anything up with the department, we will first discuss the issue with our members."

Concurring with Mr Karnik's views, Mr Vimal Khanna, Hughes Software Solutions Ltd's Vice-President-Finance, said, "It may not be easy to get information out of RoCs offices. However, if any such instances come to light, the department will need to find ways to preserve confidentiality of the information."

The DCA has prescribed that companies in the IT sector need not disclose the remuneration particulars of employees working overseas and drawing more than Rs 24 lakh per annum, provided they are not directors or their relatives. The information, however, is to be provided to the shareholders at an annual general meeting as also to the RoCs.