13.1 Form MR-1 has been prescribed under Section 196(4) for filing a return of appointment of managerial personnel but has also been extended for use of filing returns for CS, CFO and CEO who are KMPs. The details of KMPs are captured through Form DIR-12. The Committee, therefore, recommended for appropriate changes in the Form to restrict it to managerial personnel only.

13.2 The Committee also recommends that the disclosures under Rule 5 may be pruned to exclude information prescribed under Rule 5(1) except 5(1)(i) and 5(1)(iv). Further, the reporting requirement threshold of ₹ 60 lakh per annum for reporting of details of employees under Rule 5(2) may be changed to the top ten employees in terms of remuneration and employees receiving beyond the threshold of ₹ 102 lakh per annum (₹ 8.5 lakh per month).

13.3 The Committee also deliberated on the requirements for reporting on compliance with company and other laws as part of Secretarial Audit. It felt that the Secretarial Auditor being an expert in corporate laws couldn’t be expected to report compliance on other laws applicable to a company. Keeping this in view, it is expected that the Secretarial Auditor has to, therefore, satisfy himself that there are appropriate board processes as well as systems in the company to monitor and ensure the compliance with applicable laws. The reporting is accordingly prescribed in the Form MR-3. The Committee took the view that no change in these prescriptions is required.

Managerial appointment reporting: revision limits MR 1 to managerial personnel and narrows remuneration disclosures and thresholds. The proposals confine Form MR 1 to managerial personnel appointments only, excluding KMPs reported via Form DIR 12, and prune Rule 5 disclosures to a limited set while shifting remuneration reporting to the top ten employees and those above a high remuneration threshold. Secretarial Auditors are to verify existence of board processes and systems for legal compliance rather than certify compliance with all other laws, with reporting to follow Form MR 3.