POLICY ON MATERIAL SUBSIDIARIES
Obligations of listed entity which has listed its specified securities
Policy for determining Material Subsidiary
[In accordance with the Chapter IV- Obligations of listed entity which has listed its specified securities Regulation 16(c) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.]
Purpose and Scope
The Policy for determining ‘material’ subsidiary companies has been framed in accordance with the provisions of regulation 16(c) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. (Listing Regulations)
The Policy will be used to determine the Material Subsidiaries of the Company and to provide the governance framework for such subsidiaries.
All the words and expressions used in this Policy, unless defined hereafter, shall have meaning respectively assigned to them under the Listing Regulations and in absence of its definition or explanation therein, as per the Companies Act, 2013 and the Rules, Notifications and Circulars made/issued there under, as amended, from time to time.
Identification of ‘Material’ Subsidiary:
A subsidiary shall be considered as “material subsidiary” whose income or net-worth exceeds ten percent of the consolidated income or net-worth respectively, of the Company and its subsidiaries in the immediately preceding account year.
Material non-listed Indian subsidiary shall mean an unlisted subsidiary, incorporated in India, whose income or net worth (i.e. paid up capital and free reserve) exceeds 10 per cent of the consolidated income or net worth respectively, of the listed holding company and its subsidiaries in the immediately preceding financial year.
i. The Audit Committee of Board of the Company shall review the financial statements, in particular, the investment made by the unlisted subsidiary Company.
ii. The minutes of the Board Meeting of the Unlisted Subsidiary Companies shall be placed before the Board.
iii. The management shall periodically 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.
iv. One Independent Director of the Company shall be a director on the Board of Material Non-Listed Indian Subsidiary Company.
Disposal of Material Subsidiary:
The Company shall not:
a. dispose of shares in its material subsidiary which would reduce its shareholding (either on its own or together with other subsidiaries) to less than 50% or cease the exercise of control over the subsidiary without passing a special resolution in its General Meeting, except in cases where such divestment is made under a scheme of arrangement duly approved by a Court/Tribunal.
b. sell, dispose off and lease assets amounting to more than twenty percent of the assets of the material subsidiary on an aggregate basis during a financial year without prior approval of shareholders by way of special resolution, unless the sale/disposal/lease is made under a scheme of arrangement duly approved by a Court/Tribunal.
The policy shall be subject to review as may be deemed necessary and in accordance with any regulatory amendments.