Forward Troopers Ltd. is a public limited company engaged in the manufacturing of wearable protective gear and accessories including helmets and…

(i) As per the provision of section 67 (2) of the Companies Act, 2013, no public company shall give, whether directly or indirectly and whether by means of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of, or in connection with, a purchase or subscription made or to be made, by any person of or for any shares in the company or in its holding company. But as per the provision of section 67 (3) (b), the above provision of section 67 (2) shall not apply to the provision by a company of money in accordance with any scheme approved by company through special resolution and in accordance with such requirements as may be prescribed, for the purchase of, or subscription for, fully paid-up shares in the company or its holding company, if the purchase of, or the subscription for, the shares held by trustees for the benefit of the employees or such shares held by the employee of the company. As per Rule 16 of the Companies (Share Capital and Debentures) Rules, 2014, which deals with the provision of money by company for purchase of its own shares by employees or by trustees for the benefit of employees, states that: Rule 16 (1) - A company shall not make a provision of money for the purchase of, or subscription for, shares in the company or its holding company, if the purchase of, or the subscription for, the shares by trustees is for the shares to be held by or for the benefit of the employees of the company, unless it complies with some conditions including that the scheme of provision of money for purchase of or subscription for the shares as aforesaid is approved by the members by passing special resolution in a general meeting and the value of shares to be purchased or subscribed in the aggregate shall not exceed five per cent, of the aggregate of paid up capital and free reserves of the company. In terms of the provisions of section 67 (2) , section 67 (3) (b) read with the Rule 16 (1) as stated above, the value of shares that can be purchased or subscribed in the aggregate shall not exceed - 107.85 crore, i.e. [5% of (₹ 1145+1012) crore]. Therefore, the decision by the Board of Directors of Forward Troopers Limited suggested to provide a loan of 110crore to the Trust (responsible for purchase of shares of the Company itself), to aid the employees to buy its shares is not valid as the amount is beyond the maximum permissible limit. (ii) As per the provision of section 67 (3) (c), the above provision of section 67 (2) shall not apply to the giving of loans by a company to persons in the employment of the company other than its directors or key managerial personnel, for an amount not exceeding their salary or wages for a period of six months with a view to enabling them to purchase or subscribe for fully paid-up shares in the company or its holding company to be held by them by way of beneficial ownership. In terms of the above provision, the contention of Mr. Strong opposing the plan of the Board of Directors of Forward Troopers Limited providing loan directly to the employees to the maximum of their 5 months' salary to enable them to buy fully paid shares in its holding company Security Troopers Ltd. is not valid.