POLICY ON IDENTIFICATION OF GROUP COMPANIES, IDENTIFICATION OF MATERIAL OUTSTANDING CREDITORS, AND IDENTIFICATION OF MATERIAL OUTSTANDING LITIGATIONS

Background

SEBI vide its notification dated August 14, 2015, notified the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations (Fourth Amendment) Regulation, 2015 whereby SEBI

  1. Modified the definition of the “group companies”
  2. Modified the disclosure requirements pertaining to litigation involving the issuer company, its directors, its subsidiaries (if any), its promoters and its group companies; and
  3. Modified the disclosure requirement pertaining to the outstanding dues to creditors.

Accordingly, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulation, 2018 as amended (“Regulations”) stands amended to this extent.

OBJECTIVE

In view of the 4th Amendment Regulations, the Board of Directors (“Board”) of M/s. SSMD Agrotech India Limited (“the Company”) has adopted this policy and procedures for determination of:

  1. Companies which are considered to be material as a Group Company of the Company within the meaning of “Group Company” defined under SEBI Regulations;
  2. Material Creditors;
  3. Material Litigation

DEFINATIONS

In this policy, unless the context otherwise requires:

  1. Words denoting the singular shall include the plural and vice versa;
  2. References to the words “include” or “including” shall be constructed without limitation.

IDENTIFICATION OF GROUP COMPANIES

As per Schedule VI of the Regulations, the company is required to define materiality policy, for identification and disclosure of “Group Companies” in its draft prospectus as:

“The words “group companies”, wherever they occur, shall include such companies as covered under applicable accounting standards and also other companies as considered material by the board of Issuer.”

For the purpose of identification of “Group Company”, our company has considered those companies as our Group Companies which is covered under the applicable accounting standard (AS-18) issued by the Institute of Chartered Accountants of India as per the Restated Financial Statements and also other companies as considered material by the board of Issuer pursuant to the Regulations. The materiality policy framed by the Board covers such companies as our Group Companies which fulfills both (i) and (ii) conditions as mentioned below:

  1. Such company that forms part of the promoter group of our company in terms of Regulation 2 (1) (pp) (iv) of the SEBI Regulations; and
  2. Our company has entered into one or more transactions with such company in preceding fiscal or audit period as the case may be exceeding ten per cent of total revenue of the company as per restated financial statements.

IDENTIFICATION OF MATERIAL OUTSTANDING CREDITORS

Our company is required to disclose pursuant to Para 12 (A) (2) of Part A of Schedule VI of Regulation in the Draft Prospectus/ Prospectus, the details of the outstanding dues to the creditors:

  • based on the policy of materiality of our board, complete disclosure for such creditors;
  • Consolidated information on outstanding dues to small scale undertakings, and other creditors, separately giving details of number of cases and amount involved.

Additionally, our company is required to provide complete details about outstanding dues to creditors as per (i) and (ii) above on the webpage of the company with a web link thereto in the Draft Prospectus/ Prospectus which is as follows:

For identification of material creditors, any creditor of the company shall be considered to be material, if the amount due to any one of them exceeds five per cent of trade payables as per the last audited financial statements of the company.

IDENTIFICATION OF MATERIAL OUTSTANDING LITIGATION

Our company is required to disclose in the Draft Prospectus/ Prospectus all outstanding:

  1. Criminal proceedings
  2. Actions by statutory or regulatory authorities; and
  3. Taxation matters (Indirect or Direct Taxes); and
  4. Other pending material litigation, involving our company, our Directors, our Promoters, and our Group Companies.
  1. For the purpose of disclosure pursuant to Para 12 (A)(1) of Para A of Schedule VI of Regulations and the materiality policy, following litigations are considered to be material for disclosure in Draft Prospectus/ Prospectus:-

All pending litigation involving our company, Directors, Promoters and Group Companies, other than criminal proceedings and statutory or regulatory actions, would be considered “material” if the monetary amount of claim by or against the entity or person in any such pending proceeding is in excess of one percent of the profit after tax of our company as per the last audited financial statements.

  • For the purposes of determining material litigation(s) involving our Directors in (iv) above, our Board shall consider all outstanding litigation involving each Director and it believes that if any such litigation has an adverse outcome and therefore, would materially and adversely affect the reputation , operations or financial position of our company, it shall be considered as material litigation and accordingly, each of our directors shall identify and provide information relating to such outstanding litigation involving themselves.

AMENDMENT

Any change in policy shall be approved by the Board of the Company. The board 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 in this respect shall be final and binding.

In case any provisions of this policy are contrary to or inconsistent with the provisions of Companies Act, 2013 rules framed thereunder and Listing Regulations (“Statutory Provisions”), the provisions of statutory provisions shall prevail.

DISSEMINATION OF THE POLICY

The policy shall be hosted on the website of the company i.e. www.houseofmanohar.com