Need of security from associates & employee
Premier LPG Ltd. is a public limited company, engaged in marketing, bottling and transportation of LPG & Auto LPG. The shareholding in the firm is not open to the general public. As per the corporate conventions, the company is managed by the Board of Directors, headed by a Managing Director of the company. PLL conducts an “Annual General Meeting” of shareholders, where the principal decisions are reviewed, approved or revised. Some of the statutory obligations to be discharged by the company are as under:-
- To adhere to all provisions of the company.
- To conduct audit by a firm of chartered accountants as approved by the shareholders in the A.G.M.
From the foregoing paragraph, it will be clear that everyone in the management of the company has to abide by strict accountability adhering to norms prescribed. The company on account of the size and volume of its planned operations has professionalized its management, systems and procedures. With this background, the company enters into service contracts with quite a number of parties. In a contract for material purchase, there is simultaneous exchange of value for material purchased. But a service contract is a continuous performance contract, which needs utmost good faith on the part of the performer. Moreover, find below some of the reasons for asking security deposit from Associates:
- LPG & Auto LPG fall under the essential commodity category. There are mandatory rules and regulations listed by Central & State Govt. that associates and the company must follow.
- To protect the goodwill of the firm and to follow the norms established by the management.
- As being an explosive item, security measures are to be followed by an associate as per guidelines given by the Chief Controller of explosives while handling the cylinder.
- To avoid the instances where cylinders are filled illegally or used in illegal activities.
In return of the security deposit, we offer you:
- Annual simple interest as per the agreed rate
- Occasionally, in some exceptional conditions, when Associate is unable to make payment in advance for the material needed, deposit can be used as collateral
- After consistent performance of the Associate, up to 80% of the deposit amount can be used against the material
Security norms for employees
The company is aware of the limitation of the applicants seeking employment to provide security commensurate with the powers and authority delegated by the company to them. Company is therefore not insisting provision of monetary security from a majority of its employees but simply ask 3rd party Guarantee from two persons acceptable to the company (normally government employees/working/retired or reputed person).
Security norms for staff handling company’s cash
As per the management decision and advice by the external auditors, there is a mandatory requirement to obtain security from staff, which is entrusted to the company's cash.
Field staff, who are allowed imprest cash by the company, or who are allowed to collect receivables from dealers and distributors have been identified, as those to whom security norms should be made applicable. However in order to minimize hardships, the norms are made flexible as under:-
- Security to be provided by field staff for Rs. 20,000/-, if need imprest/advance or are authorized to collect receivables from dealers/distributors and deposit in the company's account.
- Security may be provided either by cash (interest allowed at 12% p.a.) or by way of fixed deposit made in the name of the employee and endorsed as security deposit and lodged with the company. The bank to acknowledge the security in lieu of the company and to make payment only when the FDR is released in lieu by the company.
- By bank guarantee for the amount.
- By depositing the original educational and professional certificates by the employees (against acknowledgement from the company) with distinct understanding that the certificate will be returned to the employee, when quitting service, after they duly hand over full charge.
Concerned employees may be guided accordingly and convey their choice, when joining service.