Kamadenu Sugars Ltd. decided to issue Sweat equity shares to its employees for which it has passed the required special resolution and completed other formalities on it. Decide the validity of the following in respect th

Section 53 of Companies Act, 2013 read with Rule 8(1) of Companies (Share Capital and Debentures) Rules, 2014 deal with issue of sweat equity share by a company. Accordingly. Employee as per explanation to Rule 8(1) of Companies (Share Capital and Debentures) Rules, 2014 is as under: "Employee" means- a permanent employee of the company who has been working in India or outside India, for at least last one year or; a director of the company, whether a whole-time director or not; or an employee or a director as defined in sub-clauses (a) or (b) above of a subsidiary, in India or outside India, or of a holding company of the company; Considering the above, (a) Issuance of sweat equity shares by Kamadenu Sugars Ltd. to temporary employee accounts to non-compliance of the provisions of Companies Act, 2013. (b) Further issuance of sweat equity shares by Kamadenu Sugars Ltd. to part time director of the company is valid as employee includes 'a director of the company whether a whole time director or not'.