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Policy On Determining Material Subsidiaries

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16 views

Policy On Determining Material Subsidiaries

Uploaded by

Arbaaz Khan
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Policy on determining

Material subsidiaries

Adopted on December 17, 2014


Revised on February 4, 2016
Further Revised on March 29, 2019
GLOSSARY

implies the audit committee constituted by the Board of Directors of the


“Audit Committee”
Company from time to time under provisions of the Listing Regulations
and Section 177 of the Companies Act, 2013.

“Board” implies Board of Directors of Tata Steel Limited.

“Company” implies Tata Steel Limited.


shall include the right to appoint majority of the directors or to control the
management or policy decisions exercisable by a person or persons
“Control” acting individually or in concert, directly or indirectly, including by virtue
of their shareholding or management rights or shareholders’ agreements
or voting agreements or in any other manner.
“Directors” implies all the Directors on the Board.

“ED” implies Executive Director of the Company.

implies a non-executive Director of the Company, other than a nominee


“Independent Director” or
Director and who is neither a promoter nor belongs to the promoter group
“ID”
of the company, and who satisfies other criteria for independence
mentioned in the Companies Act, 2013 and the Listing Regulations.

implies the Securities and Exchange Board of India (Listing Obligations


“Listing Regulations” and Disclosure Requirements) Regulations, 2015 and amendments
thereto.

implies a subsidiary whose income or net worth exceeds 10% of the


“Material Subsidiary” consolidated income or net worth respectively, of the Company and its
subsidiaries in the immediately preceding accounting year.

implies this policy on determination of Material Subsidiaries of the


“Policy”
Company.

implies any individual transaction or arrangement that exceeds or is likely


“Significant Transaction to exceed 10% of the total revenues or total expenses or total assets or
or Arrangement” total liabilities, as the case may be, of the unlisted subsidiary for the
immediately preceding accounting year.

shall mean as defined under the Companies Act, 2013 Act and the Rules
“Subsidiary”
made thereunder.

Any other term not defined herein shall have the same meaning as defined in the Companies Act,
2013, the Listing Regulations, Securities Contract (Regulation) Act, 1956 or any other applicable law
or regulation, as amended from time to time.
1. PURPOSE OF THE POLICY

The purpose of this Policy is determination of Material Subsidiaries and disclosure thereof as
required under the Listing Regulations. The Policy also intends to ensure governance of
Material Subsidiary companies by complying with directorship requirements, review of financial
statements, bringing to the attention of the Board certain transactions/arrangements, rules
regarding disinvestment of shares held by the Company and restrictions on selling/ disposing/
leasing of assets of such subsidiaries by the Company.

2. OBJECTIVE OF THE POLICY

The objective of this Policy is to determine (a) meaning of Material Subsidiary (b) requirement
of Independent Director in certain unlisted material subsidiaries, incorporated in India or not
(c) Restriction on disposal of shares of Material Subsidiary by the Company (d) Restriction on
transfer of assets of Material Subsidiary and (e) disclosure requirements, under the Listing
Regulations, as amended, and any other laws and regulations as may be applicable to the
Company.

3. INDEPENDENT DIRECTOR ON THE BOARD OF MATERIAL UNLISTED SUBSIDIARY


INCORPORATED IN INDIA OR OVERSEAS

At least one Independent Director on the Board of the Company shall be a director on the
board of the unlisted Material Subsidiary, whether incorporated in India or overseas.

Material Subsidiary, here, shall mean a subsidiary whose income or net worth exceeds 20%
of the consolidated income or net worth respectively, of the Company and its subsidiaries in
the immediately preceding accounting year.

4. SIGNIFICANT TRANSACTIONS/ARRANGEMENTS OF UNLISTED SUBSIDIARY


COMPANIES

The management should periodically submit to the Board a statement of all Significant
Transactions and Arrangements entered into by the unlisted Subsidiary company.

5. RESTRICTION ON DISPOSAL OF SHARES OF MATERIAL SUBSIDIARY BY THE


COMPANY

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 or equal to fifty
percent [50%] or cease the exercise of control over the subsidiary without passing a special
resolution in its General Meeting except in such cases where divestment 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 within one day of the resolution plan being approved.

6. RESTRICTION ON DISPOSAL OF ASSETS OF MATERIAL SUBSIDIARY

Selling, disposing and leasing of assets amounting to more than twenty percent [20%] of the
assets of the Material Subsidiary on an aggregate basis during a financial year shall require 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 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 within one day of the resolution plan being approved.
7. REPORTING AND DISCLOSURE

As prescribed by revised Clause 46(2)(h) of the Listing Regulations, this Policy shall be
disclosed on the Company’s website and a web link thereto shall be provided in the annual
report.

8. REVIEW OF THE POLICY

This Policy shall be subject to review as may be deemed necessary as per any regulatory
amendments.

9. COMPLIANCE RESPONSIBILITY

Compliance of this Policy shall be the responsibility of the Company Secretary and Chief Legal
Officer (Corporate & Compliance) of the Company who shall have the power to ask for any
information or clarifications from the management in this regard.

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