POLICY ON MATERIAL SUBSIDIARIES UNDER CLAUSE 49 OF THE LISTING AGREEMENT
The Board of Directors (the “Board”) of ---------Limited (the “Company”) has adopted the following policy and procedures with regard to determination of Material Subsidiaries as defined below with the discretionary power to amend this policy from time to time.
This Policy will be applicable to the Company effective 1 October 2014. This Policy is formed as per the requirement of terms of Clause 49 of the Listing Agreement with the Stock Exchanges.
To determine the Material Subsidiaries of the Company and to provide the governance framework for such subsidiaries.
“Audit Committee or Committee” means “Audit Committee” constituted by the Board of Directors of the Company, from time to time, under provisions of Listing Agreement with the Stock Exchanges and The Companies Act, 2013.
“Board of Director” or “Board” means the Board of Directors of -----------Limited, as constituted from time to time.
“Company” means ---------------Limited
“Independent Director” means a director of the Company, not being a whole time director and who is neither a promoter nor belongs to the promoter group of the Company and who satisfies other criteria for independence under the Companies Act, 2013 and the Listing Agreement with the Stock Exchanges.
“Policy” means Policy on Material Subsidiary.
Material Non Listed Indian Subsidiary shall mean a Material Subsidiary which is incorporated in India and is not listed on the Indian Stock Exchanges.
“Significant Transaction or Arrangement” shall mean any individual transaction or arrangement that exceeds or is likely to exceed 10% of the total revenues or total expenses or total assets or total liabilities, as the case may be, of the material unlisted subsidiary for the immediately preceding accounting year.
“Subsidiary” shall be as defined under the Companies Act, 2013 and the Rules made there under.
1. A subsidiary shall be a Material Subsidiary, if any of the following conditions are satisfied:
a. In which the Investment of the Company/Proposed Investment, exceeds 20% of its consolidated net worth as per the audited balance sheet of the previous financial year;
b. Which have generated twenty per cent of the consolidated income of the Company during the previous financial year.
2. One Independent Director of the Company shall be a director on the Board of the Material Indian Subsidiary Company.
3. The Audit Committee of Board of the Company shall review quarterly as well as annual financial statements of such subsidiary company.
4. The minutes of the Board Meetings of the Subsidiary Companies shall be placed before the Board of the Company on quarterly basis.
5. The management shall on a half yearly basis bring to the attention of the Board of Directors of the Company, a statement of all Significant Transactions and Arrangements entered into by the unlisted subsidiary company.
Disposal of Material Subsidiary
The Company, without the prior approval of the members by Special Resolution, shall not:
a. dispose shares in Material Subsidiaries that reduces its shareholding (either on its own or together with other subsidiaries) to less than 50%; or b. ceases the exercise of control over the Subsidiary; or
c. sell, dispose or lease the assets amounting to more than twenty percent of the assets of the material subsidiary.
The Policy for determining material subsidiaries is to be disclosed to the Stock Exchanges and in the Annual Report of the Company, as per the provisions of laws in force. The policy shall also be uploaded on the website of the Company at--------.com.
The Company reserves its right to amend or modify this Policy in whole or in part, at any time without assigning any reason whatsoever. However, no such amendment or modification will be binding on the employees and directors unless the same is notified to the employees and directors in writing.