Title

This Policy shall be called “Policy for determining Material Subsidiary”.

Purpose and Scope

The Policy for determining a ‘material’ subsidiary company has been framed in accordance with the provisions of Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), as may be amended from time to time.

All the words and expressions used in this Policy, unless defined hereinafter, shall have meaning respectively assigned to them under the Listing Regulations and in the absence of its definition or explanation therein, as per the Companies Act, 2013 (‘the Act’) and the Rules, Notifications and Circulars made / issued thereunder, as amended, from time to time.

Definitions

1. “Act” means the Companies Act, 2013 including the rules, schedules, clarifications and guidelines issued by the Ministry of Corporate Affairs from time to time.
2. “Board” refers to the Board of Directors of Berger Paints India Limited.
3. “Company” means “Berger Paints India Limited”
4. “Subsidiary(s)” shall mean subsidiaries of the Company as defined under Section 2(87) of the Act and the Rules made there under and as per the applicable accounting standards.
5. “Independent Director” means an Independent Director as defined under Section 2(47) of the Act read with Listing Regulations and as may be amended from time to time.
6. “Policy” means “Policy for determining Material Subsidiary”

Criteria for Determining Material Subsidiary

A subsidiary, whether listed or unlisted, shall be considered as material, if its income or net worth exceeds 10 [ten] percent of the consolidated income or net worth respectively, of the Company and its subsidiary(ies) in the immediately preceding accounting year as stipulated under Regulation 16(1)(c) of the Listing Regulations on the date of the adoption of this Policy(hereinafter referred as “Material Subsidiary”). The criteria mentioned herein defining Material Subsidiary will automatically get amended with the corresponding amendment in the relevant Regulation of the Listing Regulations.

Governance of Material Subsidiaries

1. The Company shall appoint at least one of its Independent Directors on the Board of Directors of an unlisted Material Subsidiary, whether incorporated in India or not. Explanation : For the purpose of the above, the term “unlisted material subsidiary” shall mean an unlisted subsidiary, whose income or net worth exceeds twenty percent (20%) of the consolidated income or net worth respectively, of the Company and its subsidiaries in the immediately preceding accounting year.
2. The Company and its unlisted material subsidiary incorporated in India shall undertake secretarial audit. The Company shall along with its secretarial audit report annex the secretarial audit report of the unlisted material subsidiary, given by a company secretary in practice, in such form as specified, in its annual report.
3. The Company shall not dispose of shares in its material subsidiary resulting in reduction of its shareholding (either on its own or together with other subsidiaries) to less than [or equal to] 50% (fifty percent) 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[, 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.
4. The Company shall not sell, dispose and lease assets amounting to more than 20 % (twenty percent) 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.

The Management of the Company shall monitor and ensure that as and when any of the subsidiary is determined as a Material Subsidiary the same shall be intimated to the Audit Committee. The Audit Committee shall review the same and make suitable recommendations to the Board to ensure compliance with the Listing Regulations in this regard.

Disclosure

This Policy will be hosted on the website of the Company and its web link shall be disclosed in the Report of the Corporate Governance forming part of the Annual Report of the Company.

Interpretation

Any words used in this policy but not defined herein shall have the same meaning ascribed to it in the Companies Act, 2013 or Rules made thereunder, SEBI Act or rules and regulations made thereunder, or any other relevant legislation / law applicable to the Company. In case of any conflict between the law and the policy, the law shall prevail. Any subsequent amendment or modification in the regulations, Act and/or applicable laws in this regard shall automatically apply to this Policy.

Amendments

This Policy may be amended by the Board from time to time to be in line with any amendments made to the Listing Regulations , the Act and such other guidelines issued by SEBI.