TMI BlogImplementation of schemes through trust.X X X X Extracts X X X X X X X X Extracts X X X X ..... to the condition that a fresh approval of the shareholders by a special resolution is obtained prior to implementing such a change and that such a change is not prejudicial to the interests of the employees: Provided further that if the scheme(s) involves secondary acquisition or gift or both, then it shall be mandatory for the company to implement such scheme(s) through a trust(s). (2) A company may implement several schemes as permitted under these regulations through a single trust: Provided that such single trust shall keep and maintain proper books of account, records and documents for each scheme so as to explain its transactions and to disclose at any point of time, the financial position of each scheme and in particular gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for the purposes of the scheme(s). (7) The trust shall not deal in derivatives and shall undertake only delivery-based transactions for the purposes of secondary acquisition as permitted by these regulations. (8) Subject to the requirements of the Companies Act, 2013 (18 of 2013) read with Companies (Share Capital and Debenture) Rules, 2014, as amended from time to time, as may be applicable, the company may lend monies to the trust on appropriate terms and conditions to acquire the shares either through new issue or secondary acquisition, for the purpose of implementation of the scheme(s). (9) For the purpose of disclosures to the recognised stock exchange, the shareholding of the trust shall be shown as non-promoter and non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onus shares, split, rights issue, buy-back or scheme of arrangement. Explanation 2, - If a company has multiple trusts and schemes, the aforesaid ceiling limit shall be applicable for all such trusts and schemes taken together at the company level and not at the level of individual trust or scheme. Explanation 3, -The above ceiling limit will not be applicable where shares are allotted to the trust by way of new issue or gift from promoter or promoter group or other shareholders. Explanation 4, -In the event that the options, shares or SAR granted under any of the schemes exceeds the number of shares that the trust may acquire through secondary acquisition, then such shortfall of shares shall be made up by the company through ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares in secondary market except under the following circumstances: (a) to enable the employee to fund the payment of the exercise price, the amount necessary to meet his/her tax obligations and other related expenses pursuant to exercise of options granted under the ESOS; (b) on vesting or exercise, as the case may be, of SAR under the scheme covered by Part C of Chapter III of these regulations; (c) in case of emergency for implementing the schemes covered under Part D and Part E of Chapter III of these regulations, and for this purpose - a. the trustee(s) shall record the reasons for such sale; and b. money so realised on sale of shares shall be utilised within a definite time period as stipulated under the scheme or trus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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