Kridhan Policies

Policies > Policy For Determining Material Subsidiaries

Policy For Determining Material Subsidiaries

Legal Framework

The Board of Directors (the “Board”) of Kridhan Infra Limited (the “Company”) has adopted the following policy and procedures with regard to determination of “Material Subsidiaries” in order to comply with the requirements of Regulation 16(1)(c) and Regulation 24 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as may be amended (the “SEBI Listing Regulations”). The Board/ its Committee may review this policy from time to time.

Definitions

1. “Act”: Act means Companies Act, 2013 & Rules made thereunder.
2. “Board of Directors” or “Board”: Means the Board of directors of Kridhan Infra Limited, as constituted from time to time.
3. “Holding Company”: Holding Company in relation to one or more other companies, means a company of which such companies are subsidiary companies.
4. “Subsidiary Company”: Subsidiary Company shall be as defined under the Act.
5. “Material Subsidiary”: Shall mean a subsidiary, whose income or net worth exceeds 10% (Ten percent) of the consolidated income or net worth respectively, of the company and its subsidiaries in the immediately preceding accounting year.
6. “Significant transactions or arrangement”: “significant transaction or arrangement” shall mean any individual transaction or arrangement that exceeds or is likely to exceed 10% (Ten percent) of the total revenues or total expenses or total assets or total liabilities, as the case may be, of the unlisted subsidiary for the immediately preceding accounting year.
7. “Networth”: means net worth as defined in sub-section (57) of section 2 of the Companies Act, 2013;
8. “Audit Committee”: Audit Committee means the committee formed under Section 177 of the Act by the Board of the Company, from time to time.

Guiding Principles

A subsidiary shall be a Material Subsidiary, if its income or net worth exceeds 10% (Ten percent) of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year.
Provisions with regard to Subsidiaries
1. The Audit Committee of the Company shall also review the financial statements, in particular the investments made by the unlisted subsidiary company on a quarterly basis;

2. The Minutes of the Board Meetings of the Unlisted Subsidiary company shall be placed at the meeting of the Board of Directors of the Company;

3. The Management of the Unlisted Subsidiary shall periodically bring to the notice of the Board of Directors of the Company, a statement of all significant transactions & arrangements entered into by the unlisted subsidiary company;
Explanation.- For the purpose of this provisions the term “significant transaction or arrangement” shall mean any individual transaction or arrangement that exceeds or is likely to exceed ten percent of the total revenues or total expenses or total assets or total liabilities, as the case may be, of the unlisted subsidiary for the immediately preceding accounting year.

Provisions with regard to Material Subsidiaries
1. At least one Independent Director on the Board of Directors of the listed entity shall be a director on the board of directors of an unlisted material Subsidiary company whether incorporated in India or not.
Explanation- For the purpose of this provision, notwithstanding anything to the contrary contained in Regulation 16 of the SEBI Listing Regulations, the term “Material ” shall mean a subsidiary, whose Income or Net Worth is exceeds 20% (Twenty percent) of the consolidated Income or Net Worth respectively, of the Company and its Subsidiaries in the immediately preceding accounting year.

2. The Company shall not dispose off 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 Material Subsidiary without passing a special resolution in its general meeting except in cases where such disinvestment is made under a scheme of arrangement duly approved by a court/tribunal, or under a resolution plan duly approved under Section 31 of the Insolvency Code and such an event is disclosed to the recognized stock exchanges with one day of the resolution plan being approved;

3. The Company shall not sell, dispose & lease of assets amounting to more than 20% of the assets of the Material Subsidiary on an aggregate basis during a financial year without the prior approval of the shareholders by way of passing special resolution in its General Meeting, unless the sale/disposal/lease is made under a scheme of arrangement duly approved by court/tribunal, or under a resolution plan duly approved under Section 31 of the Insolvency Code and such an event is disclosed to the recognized stock exchanges with one day of the resolution plan being approved;

4. Every listed entity and its material unlisted subsidiaries incorporated in India shall undertake secretarial audit and shall annex with its annual report, a secretarial audit report, given by a company secretary in practice, in such form as may be specified.

Disclosures

The policy on identification of material subsidiary shall be disclosed on the Company’s website & a web link thereto shall be provided in the Annual Report.

Amendment

This policy will be reviewed by the Board of Directors of the Company or by any of its Committee (as may be authorized by the Board of Directors in this regard) as they deem necessary. Any change in the Policy shall be approved by the Board of Directors of the Company or its Committee. The Board of Directors or its Committee (as may be authorized by the Board of Directors in this regard) shall have the right to withdraw and/or amend any part of this Policy or the entire Policy, at any time, as it deems fit, or from time to time, and the decision of the Board of Directors in this respect shall be final and binding. Any subsequent amendment/modification in the Companies Act, 2013 or the Rules framed thereunder or the Listing Regulations and/or any other laws in this regard shall automatically apply to this Policy.