Companies in the course of its day-to-day business require establishing a subsidiary company / companies to pursue different product segment/s of its business (or) same business in different geographical segment/s (or) for regulatory purposes. The Subsidiary Company may be, wholly owned subsidiary (or) majority owned Subsidiary, Material Subsidiary (or) non-material Subsidiary. As compared to other Subsidiaries, Material Subsidiaries warrants more attention and monitoring by the Holding Company. Hence, it becomes imperative to have a Policy, which provide a framework for identifying material subsidiaries for effective monitoring.
“Act” means the Companies Act, 2013 and the rules made thereunder (including any statutory modification / re-enactment thereof for the time being in force).
“VRC” means VRC Constructions (India) Ltd.
“Control” shall include the right to appoint majority of the Directors (or) to Control the Management (or) Policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholder agreements or voting agreements or in any other manner.
“Material Subsidiary” means, unless otherwise expressly defined, a subsidiary, whose turnover or net worth (i.e. paid-up share capital and free reserves) exceed ten percent (10%) of the Consolidated Income (or) Net Worth respectively, of VRC and its Subsidiaries in the immediately preceding accounting year.
“Subsidiary” shall have the same meaning as defined under Section 2(87) of the Act.
Any other term not defined herein, shall have the same meaning ascribed to it under the Act or any other relevant law / regulation applicable to VRC.
a) Selling, disposing and leasing of Assets amounting to more than twenty percent (20%) of the assets of a Material Subsidiary on an aggregate basis during a financial year shall require prior approval of Shareholders of VRC by way of Special Resolution, unless the sale / disposal / lease is made under a scheme of arrangement, duly approved by a Court / Tribunal / Regulatory Authority, or under a resolution plan duly approved under section 31 of the Insolvency Code.
a) The Audit Committee of the Board of Directors of VRC shall review the Financial Statements, in particular, the Investments made by Subsidiary Company, on an annual basis.
b) The Minutes of Subsidiary Companies shall be placed before the Board of VRC.
c) The Management shall periodically bring to the attention of the Board of Directors of VRC, a statement of all Significant Transactions and Arrangements entered into by Subsidiary Company.
a) This Policy shall be subject to review as may be deemed necessary or in accordance with any regulatory amendments, which affects the said Policy
a) VRC shall not dispose its Shareholding held in its Material Subsidiary (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 / Regulatory Authority, or under a resolution plan duly approved under section 31 of the Insolvency Code.
a) In the event of any conflict between the provisions of this Policy or the Act or any other relevant legislation / regulation applicable to VRC, the provisions of the Act or such other relevant law / regulation shall prevail over this Policy.
a) This Policy shall be subject to review by the VRC’s Board of Directors as may be deemed necessary and to comply with any regulatory amendments or statutory modifications. VRC’s Board of Directors may amend this Policy, as may be required to be in line with the changes, amendments and modifications if any in the Companies Act, 2013, Rules made thereunder.
b) In case of any amendment, clarification, circular, notification etc. issued by a competent authority, which is not consistent with the provisions laid down under this Policy, the provisions of such amendment, clarification, circular, notification, etc. shall prevail and this Policy shall stand amended accordingly, without any further action, on and from the date on which such amendment, clarification, circular, notification comes in to effect.
