Sweat Equity Shares

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Sweat Equity Shares : 

Sweat Equity Shares

Definition : 

Definition “Sweat Equity Shares” means equity shares issued by the company to employees or directors at a discount or for consideration other than cash for providing know how or making available rights in the nature of intellectual property rights or value additions, by whatever name called.

Sweat equity shares may be issued to employee, promoter. : 

Sweat equity shares may be issued to employee, promoter. A company whose equity shares are listed on a recognized stock exchange may issue Sweat equity shares in accordance with Section 79A of Companies Act, 1956 and These Regulations to its – (a) Employees (b) Directors

Issue of Sweat Equity Shares to Promoters. : 

Issue of Sweat Equity Shares to Promoters. In case of Issue of sweat equity shares to promoters, the same shall also be approved by simple majority of the shareholders in General Meeting; (2) Each transaction of issue of Sweat Equity shall be voted by a separate resolution.

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(3) The resolution for issue of Sweat Equity shall be valid for a period of not more than twelve months from the date of passing of the resolution. For the purposes of passing the resolution, the explanatory statement shall contain the disclosures as specified in the Schedule.

Pricing of Sweat Equity Shares. : 

Pricing of Sweat Equity Shares. (1) The price of sweat equity shares shall not be less than the higher of the following: (a) the average of the weekly high and low of the closing prices of the related equity shares during last six months preceding the relevant date; or (b) the average of the weekly high and low of the closing prices of the related equity shares during the two weeks preceding the relevant date.

Accounting Treatment : 

Accounting Treatment (a) where the non cash consideration takes the form of a depreciable or amortizable asset, it shall be carried to the balance sheet of the company in accordance with the relevant accounting standards; or (b) where clause (a) is not applicable, it shall be expensed as provided in the relevant accounting standards.

Placing of Auditors Before Annual General Meeting : 

Placing of Auditors Before Annual General Meeting In the General meeting subsequent to the issue of sweat equity, the Board of Directors shall place before the shareholders, a “certificate from the auditors of the company that the issue of sweat equity shares has been made in accordance with the Regulations and in accordance with the resolution passed by the company authorizing the issue of such Sweat Equity Shares”.

Lock-in of sweat equity shares. : 

Lock-in of sweat equity shares. (1) The Sweat Equity shares shall be locked in for a period of three years from the date of allotment.

Contents of explanatory statement : 

Contents of explanatory statement Date of the Board Meeting in which the Directors approved the proposal for issue of sweat equity shares. Reasons/justification for the issue. Number of shares, consideration for shares and class of person to whom the shares are to be issued.

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Value of sweat equity shares along with valuation report/basis of valuation and the price at which the sweat equity shares will be issued. Names of persons to whom the shares will be issued and the person’s relationship with the company.

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A statement to the effect that the company shall conform to the accounting policies specified by the Central Government. Diluted earning per share pursuant to the issue of securities to be calculated in accordance with the Accounting Standards specified by the Institute of Chartered Accountants of India.

Kochi IPL Team : 

Kochi IPL Team In the midst of controversy involving her and Union minister Shashi Tharoor over Kochi IPL, Sunanda Pushkar has offered to surrender her equity of Rs70 crore in the franchise. She has offered to give up her 'sweat equity' of nearly 19% in the IPL Kochi franchise, a source close to the developments said.