Sweat equity shares may be issued to employee

Sweat equity shares may be issued to employee, director
Employees
Directors
A company whose equity
shares are listed on a
recognized stock
exchange may issue
sweat equity shares in
accordance with Section
54 of Companies Act,
2013 and these
Regulations to its
Special Resolution
For the purposes of passing a special resolution under clause (a) of sub section (1) of Section 54 of the

142 PP-CF&L
Companies Act, 2013, the Board of Directors at the time of sending notice to the shareholders shall send
additional information for approving the issuance of sweat equity shall, inter alia , contain the following information:
a) The total number of shares to be issued as sweat equity.
b) The current market price of the shares of the company.
c) The value of the intellectual property rights or technical know how or other value addition to be received
from the employee or director along with the valuation report / basis of valuation.
d) The names of the employees or directors or promoters to whom the sweat equity shares shall be issued
and their relationship with the company.
e) The consideration to be paid for the sweat equity.
f) The price at which the sweat equity shares shall be issued.
g) Ceiling on managerial remuneration, if any, which will be affected by issuance of such sweat equity.
h) A statement to the effect that the company shall conform to the accounting policies as specified by
SEBI.
i) Diluted Earning Per Share pursuant to the issue of securities to be calculated in accordance with
International Accounting Standards / standards specified by the Institute of Chartered Accountants of
India.
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.
Pricing of Sweat Equity Shares
“Relevant date” for this purpose means the date which is thirty days prior to the date on which the
meeting of the General Body of the shareholders is convened, in terms of clause (a) of sub section
(1) of section 54 of the Companies Act, 2013.

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Indian Equity- Non Fund Based
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If the shares are not quoted on the given date, then the share price on the next trading
day shall be considered.
If the share price is quoted on more than one stock exchange, then the stock exchange where there
is highest trading volume during that date shall be considered.
If the shares are listed on more than one stock exchange, but quoted only on one stock exchange on
given date, then the price on the stock exchange shall be considered.
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.
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
The price of sweat equity shares shall not be less than the higher of the following:
Valuation of intellectual Property
•