POLICY ON MATERIAL SUBSIDIARIES
UNDER CLAUSE 49 OF THE LISTING AGREEMENT
-----------------------------------Limited
Introduction
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.
Objective
To determine the Material Subsidiaries of the Company and
to provide the governance framework for such subsidiaries.
DEFINITIONS
“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.
5. Policy
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.
6. Disclosures
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.
Amendment
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.
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