Enquiry:

Paragraph IV B of Part 1 to the fourth schedule to the Companies Act, 2017 defines “executive” as an employee, other than the chief executive and directors, whose basic salary exceeds twelve hundred thousand rupees in a financial year, for the purposes of disclosure required under paragraph VI 35 of the fourth schedule. Similarly, disclosures also have to be given for executives under paragraph V 29 of the fifth schedule to the Act, but the term ‘executive’ has not been defined in that Schedule.

 

Opinion:

Your attention to the following wordings of the fifth schedule of the Companies Act, 2017, which clearly states if an expression is defined in the fourth schedule it shall have the same meaning thereby the meaning of ‘executive’ will be same for both the schedules:

“Any word or expression used herein but not defined in the Act and/or fourth schedule shall have the same meaning as under the applicable Accounting Framework”.

Accordingly, the definition of executive contained in the fourth schedule of the Companies Act, 2017 will be relevant for the fifth schedule disclosure requirements.

 

(October 02, 2017)