DRINKING EARTHEN POT WATER is magical for our Corporate Culture!

Dear Folks, 

Smiles for all

Hope you all are doing well there!

In this write up I am sharing with you all the health benefits of drinking “Matke Ka Paani” during this hot summer where temperature is rising day by day and gradually we are losing immunity of our body by having chilled water from our fridge or refrigerator, though the water we drink in this summer 2020 from our refrigerators gives very soothing feel to our mouth but on the other hand its harming our digestive system and immunity. So in my opinion if in our corporate culture we start adopting this habit of storing water in a earthen pot, this will make our environment eco-friendly and this change in our work culture can improve the health of our working personnel’s.

It is an indigenous way of storing water in the summer season to keep it cool and fit for drinking. Our real thirst can only be removed by drinking Earthen Pot Water as per our natural science; it contains multiple health benefits along with boost of our immunity. Let’s get some core understanding about earthen pot water; here is why we should try adopting the practice this summer season in our offices and home as well.

1. Prevents heat strokes: The vitamins and minerals that one gets from water, especially water stored in clay pots can help in improving health, and also preventing heatstrokes. Cool water can help in cooling off the body and prevent problems caused due to excessive heat. Drinking water stored in clay pots can be a healthy practice.

2. Relief from Skin Problems: By Drinking Earthen Pot Water we can get rid of multiple kinds of skin problems.

3. Alkaline properties: The human body is acidic in nature, while clay has alkaline properties. Drinking water stored in earthen pots can help maintain the pH of the body, keeping acidity and gastric problems at bay. The water stored in earthen pots is also appropriately cool, which helps in keeping the body healthy.

4. Improves metabolism and digestion: Hydration itself plays a very important role in improving digestion and speeding up metabolism. When water is stored in a clay pot and consumed, it ensures even better functions as it does not contain chemicals as the BPA found in plastic bottles which are used to store water in the fridge. This helps improve digestion which helps in weight loss and keeping the body healthy, in general to stay focused on work.

5. Porous: Clay is porous. In the similar way, an earthen pot is also porous. When you store water in “Matka”, the evaporation happens. This process grounds cooling as water particles gain energy in the form of heat, then change to gas and get mixed with air. A clay pot has small holes visible at the microscopic level during which water seeps out and gains energy to become gas and gets evaporated causing cooling. Heat and moisture circulate all through the pot.

6. Cost effective: The very special benefit that every corporate budget demands is cost effective in comparison to spending thousands on RO-UV and aquagaurd etc.

ALL IN ALL: Drinking water stored in clay pot/Bottle can do wonders to your health as well boost your immunity in long run, so that you can give productive results by having purity in your soul. It is imperative to store drinking water in a clay pot or matka at your work place. The theme of matka might create some antique image in few minds but it will really do wonders for your professional life.

Compliance Checklist for AGM

Introduction

All companies registered in India other than a One Person Company is required to hold an annual general meeting each year in addition to other General Meeting. There should not be a gap of more than 15 months between one Annual General Meeting and the next and one meeting should be held in each of the calendar year.

All newly incorporated companies are required to convene its first Annual General Meeting within a period of 9 months from the date of closing of the first financial year of the company and in any other case, within a period of six months, from the date of closing of the financial year. If a company holds its first annual general meeting as aforesaid, it shall not be necessary for the company to hold an annual general meeting in the year of its incorporation. In this article, we look at Checklist for annual general meeting and notice format. 

Compliance Checklist for Annual General Meeting:

Section	Action
Section 134	Convene Board Meeting For Finalization of Director’s report and Financial Result.
Section 101(2) of Companies Act, 2013 and section 102 and Para 1.2.4 and Para 1.2.10 of SS2	Prepare and Finalize AGM Notice and Annual Report : Notice shall have (complete address, venue, date, hour and agenda of the meeting) Keep following documents ready: 1. AGM Notice ( to include attendance slip, Proxy form, Route map, Explanatory statement) 2. Directors Report + all Annexure 3. Statutory Auditors Report and 4. Financials (including Balance Sheet +P&L + Cash Flow Statement + Notes to Accounts+ Schedules)
Section 96(2)	Send the Notice by hand delivery/ email / ordinary post/ speed post / registered post / courier / fax. If sent through e-mail – ensure delivery proof. AGM to be called during business hours (9AM to 6PM) except National Holiday (2ndOct, 15th Aug, 26th Jan), in the same city where the Registered Office is situated. AGM Notice with Documents mentioned above to be sent 21 clear days in advance of meeting. If Notice is sent by post/ courier- send 25 days in advance.
Section 101(3) of Companies Act, 2013 +Para 1.2.1 of SS2	Notice shall be given to: 1. Members, (legal representative of deceased member or assignee if an insolvent member) 2. Statutory auditors 3. Secretarial auditors 4. All directors 5. Debenture trustee (if any)
Para 1.2.3 and 8.5.2 of SS2	Arrange for upload of AGM notice (giving route map), on the website, if there is a website
Section 101(1) of Companies Act, 2013	Meeting can be convened on a shorter notice with consent of the shareholders holding 95% paid up share capital
	Prepare Attendance Registers , Proxy Register
S. 189(4), 6.8 of SS2, 1.2.5 of Secretarial Standard	Keep ready following docs for Inspection at AGM : 1. Register of Contracts ready for Inspection during AGM ( Any person having right to attend AGM can inspect) 2. Proxies (request from Member should be received at least 3 days before the mtg.) Can be inspected from 24 hours before AGM time till AGM conclusion time. 3. Statutory Audit Rep, Secretarial Audit Rep, MOA, AOA- all docs referred to in Notice of AGM- to be made available for inspection at Regd. office during business hours/ Corp Office/ Head Office
Para 6.4.2 of SS2	To follow up with the representatives of the Corporate members to send Board Resolutions and Proxy forms, if any.
Section 113	Ensure the proxy forms are received by the Company at least 48 hours before the time fixed for holding the AGM (including major shareholders and representation letters from financial institutions)
4.1 of SS2	Check if Chairman of the Audit, NRC and SRC Committees have confirmed their attendance at AGM. If they are not attending get them to authorize another Committee Member of that Committee to attend the AGM.
Para 4.2 and 4.3 of SS2	To follow up with statutory auditors and secretarial auditors and ensure that either they or their representative (ensure that their representative is also qualified to act as Statutory Audit Rep, Secretarial Audit Rep.) Attends the AGM. Company can exempt them from attending.
	Ensure that the proxy file, proxy register, Attendance Slips, Attendance Register, Companies Act, Memorandum & Articles of Association, Annual Report, additional copies of Notice of the Meeting, AGM/EGM Minutes Book, etc. are kept ready at the meeting
Section 103(1) of Companies Act, 2013	On the day of AGM Ensure Quorum is present : i.e. Quorum is based on the number of the members of the Company Quorum – Private Co. 2 members personally present Public Company : 5/15/30 depending on no. of members
	ü  Make arrangements for recording attendance, collect attendance slips at the Meeting ü  Conduct the AGM as per AGM Proceedings
Para 13.1 of SS2	The qualifications, observations or comments or other remarks on the financial transactions or matters which have any adverse effect on the functioning of the company, if any, mentioned in the Statutory Auditor’s Report shall be read at the Annual General Meeting and attention of the Members Present shall be drawn to the explanations / comments given by the Board of Directors in their report.
	Note down conclusion time of the AGM
Section 118 of Companies Act, 2013	AGM Minutes to be finalized and given for review( circulate internally within 15 days of AGM)
Section 139(1) of Companies Act, 2013	Filing of Form ADT- 1 within 15 days of AGM (ratification of appointment of auditors)
Section 137 of Companies Act, 2013	Filing form AOC 4 XBRL or AOC 4(as applicable) within 30 days of AGM : Chapter 9B Rule 3
Section 92 of Companies Act, 2013 and Rule 11 and 12(2) of Companies (Management and Administration) Rules, 2014	Filing Form MGT 7 within 60 days of AGM (Annual Return)
Section 117(1) and (3)(a) of 2013 Act	Filing Form MGT 14 as applicable within 30 days of AGM

Draft format of Notice of Annual General Meeting

NOTICE

Notice is hereby given that the 34th Annual General Meeting of the Members of the ABC Ltd will be held at the Registered Office of the Company at Unit 602A, ……………………….., India on Monday, 24th September, 2018 at 10.00 hours, to transact the following business:

ORDINARY BUSINESS

To consider and if thought fit to pass, the following as Ordinary Resolutions:

1. To consider, approve and adopt the Audited Financial Statements of the Company comprising the Balance Sheet as on March 31, 2018, Statement of Profit & Loss and Cash Flow Statement and Notes thereto for the financial year ended on March 31, 2018 together with the Report of the Board of Directors and Auditors’ thereon.

2. To take note of the appointment of M/S. XYZ & CO., CHARTERED ACCOUNTANTS (FIRM REGISTRATION NUMBER ________), who were appointed as the Statutory Auditors of the Company for a period of four years in the 31st Annual General Meeting of the Company held on 30th September, 2015, to hold their office from the conclusion of the 31st Annual General Meeting till the conclusion of 35th Annual General Meeting (up to the Financial Year ending 2019).

By the order of the Board

______________________

(Kevin Charles Woody)

Managing Director

DIN: …………….

Date: 30th August’2018

Place: ……….

NOTES FOR MEMBERS’ ATTENTION:

1. A member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint a proxy to attend and vote on a poll instead of him and the proxy need not be a member of the Company. The instrument appointing the proxy should, however, be deposited at the registered office of the Company not less than forty-eight hours before the commencement of the Meeting.

2. A person can act as a proxy on behalf of members not exceeding fifty and holding in the aggregate not more than ten percent of the total share capital of the Company carrying voting rights. A member holding more than ten percent of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or shareholder.

3. The Register of Directors and their shareholding, maintained u/s 170 of the Companies Act, 2013 and Register of Contracts or Arrangements in which Directors are interested maintained u/s 189 of the Companies Act, 2013 and all other documents referred to in the notice and explanatory statement, will be available for inspection by the members of the Company at Registered office of the Company during business hours 10:00 A.M. to 06:00 P.M. (except Saturday and Sunday) up to the date of Annual General Meeting and will also be available during the Annual General Meeting.

4. During the period beginning 24 hours before the time fixed for the commencement of the meeting and ending with the conclusion of the meeting, a member would be entitled to inspect the proxies lodged at any time during the business hours of the Company, provided that not less than three days of notice in writing is given to the Company.

5. A Route Map along with Prominent Landmark for easy location to reach the venue of Annual General Meeting is annexed with the notice of Annual General Meeting.

6. Members/proxies attending the meeting are requested to bring their duly filled admission/ attendance slips sent along with the notice of annual general meeting at the meeting.

7. Corporate members intending to send their authorized representatives to attend the meeting are advised to send a duly certified copy of the Board Resolution authorizing their representative to attend and vote at the meeting.

Author Can Be Reached at ; csannusharma123@gmail.com              

    or call at : 7021848742

A Brief about ESOP- Employee Stock Option Plan

Dear Professionals

Smiles for All

In this write will be discussing about Employee Stock option plan (ESOP), how this impact an organization?, How It gives benefits to organization and employees and what are the regulatory requirements in case of Private Companies Mainly.

Employee Stock Option Plan (ESOP) is the option provided to employees to purchase the shares of the company at a future date at a pre-determined price. ESOPs give the employee a right to purchase the share, but not an obligation, to buy a certain amount of shares in the company at a predetermined price for a certain number of years. Therefore, if the shares of the company are valued at less than the option exercise price, then the employee need not excise the right to buy the shares of the company.

KEY POINTS

·         An employee stock ownership plan gives workers ownership interest in the company.

·         ESOP is usually formed to allow employees the opportunity to buy stock in a closely held company to facilitate succession planning.

·         ESOPs encourage employees to do what's best for shareholders since the employees themselves are shareholders and provide companies with tax benefits, thus incentivizing owners to offer them to employees.

·         Companies typically tie distributions from the plan to vesting.

COST OF IMPLEMENTATION OF ESOP TO COMPANY:

Apart from dilution in shareholding of promoters, the company should keep the following expenses in mind:

Fees payable to Registered valuer and the Merchant Banker for Valuation of shares

Fees payable to consultant for implementation and supervision of ESOP.

Administration cost throughout it’s tenure

OPERATIVE ASPECTS OF ESOP (Employee Stock Option Plan)

1. ESOPs have an exercise period – the pre-determined period within which the option must be exercised   by the employee. There must be a minimum period of one year between the grant of option and vesting of option.

2. Option granted to employees is not transferable to any other person.

3. ESOPs have a Vesting Period and Vesting Percentage. Vesting period is the amount of time the employee needs to work with the company to be eligible for the ESOP.

4. It can’t be offered to Promoters or Directors who directly or indirectly hold 10% shares in the company nor can be offered to non-employees.

5. A typical lifecycle of ESOP can be depicted as under:

6. Valuation shall be done (Fair value of shares) at the time of “grant of Option” and “exercise of option” by registered valuer as per “Guidance note on accounting for employee share-based payment” and pursuant to the Rule 40D of Income Tax Rules ,1962 which provides that FMV of ESOP shall be as determined by a merchant banker on the specified date Therefore, valuation is to be done every time when the options are granted and /or exercised. Valuation not older than six months will be considered valid.

7. There is no ready market for shares of a Pvt Ltd Co. unlike listed companies. Marketability of such shares are generally discussed at the time of launch of the scheme and generally promoters come forward with assurances and commitment through scheme document. Employees would have following Exit options for disposal of shares:

IPO

To Strategic buyer / Investor, etc

Company buyback

Selling to an external buyer, subject to the Articles of Association

TAXATION IN THE HANDS OF EMPLOYEE CONCERNED:

Taxation takes place at 2 stages i.e. when the option is exercised and secondly when the shares are disposed:

While selling – in the form of capital gain. An employee might sell his shares after buying them. In case he sells these shares at a price higher than FMV on the exercise date, he would be liable for capital gains tax.

REGULATORY REQUIREMENTS FOR A PVT LTD COMPANY FOR IMPLEMENTING ESOP

1. Maximum Number of shareholders in   Private Limited Company    is allowed to be 200.  If this limit is breached by ESOP, the company has to be converted into a Public Limited Company.

2. Articles of Association i.e. Charter of company should   have enabling provisions or allowing the ESOP.  If not, then amendment would be required by convening AGM/EGM.

3. There has to be sufficient authorized capital to accommodate the ESOP allotments.  If not, then MOA and AOA need alterations.

4. EGM (Extra Ordinary General Meeting) has to be conducted for ESOP Scheme approval by shareholders by way of a special resolution. Disclosures in the Explanatory Statement (Rule 12(2)) for passing the special resolution should cover following aspects:

Total number of stock options to be granted

Identification/ Appraisal process for determining the eligibility of employees;

Requirements of vesting and vesting period and the maximum period within which the option shall be vested;

Exercise Price/Pricing Formula/Exercise Period/Method of valuation;

Lock in period, if any;

Maximum no. of ESOPs to be granted per employee and in aggregate;

5. Each year, the Board of Directors in the Directors Report must report the following details of the ESOP plan:

Options granted/vested/exercised/lapsed.

Total number of shares arising as a result of exercise of options;

Exercise Price;

Variation of terms of options;

Money realized by exercise of options;

Total no. of options in force

Employee wise details of options granted to:

6. The company must maintain an ESOP Register (Form SH-6 (Rule 12(10),   giving information about the option granted to employees.

CONCLUDING NOTE:

Once the ESOPs are established, the company needs a proper administration including the third-party administration, trustee, valuation, legal costs. Company owners and the management must be aware of the ongoing costs. In case the cash flow which is dedicated to ESOPs limits the cash available for reinvesting in the business over a long-term, the ESOP scheme isn’t a good fit for such a company.

(The author is a Jaipur based Company Secretary and can be reached on 7021848742, csannusharma123@gmail.com)