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Introduction:

The Board of Directors (the “Board”) of Parag Milk Foods Limited (the “Company) has adopted the following policy and procedures with regard to determination of Material Subsidiaries, as defined in this Policy below.

Objective:

The objective of the Policy is to determine material subsidiaries of the Company and to provide a governance framework for such material subsidiaries.

The Policy is framed in accordance with the requirements of the Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including any amendments thereof).

Identification of ‘Material’ Subsidiary:

A Subsidiary shall be considered as material whose income or net worth exceeds twenty percent of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year.

Governance and Framework:

  1. The Audit Committee of the Board of the Company shall review the financial statements, in particular, the investments made by the unlisted subsidiary Company.

  2. The minutes of the meetings of the board of directors of the unlisted Subsidiary Company shall be placed at the meeting of the board of directors of the Company.

  3. The management shall periodically bring to the attention of the Board of Directors of the Company, a statement of all Significant Transactions and Arrangement entered into by the unlisted subsidiary company.

  4. For the purpose of this regulation, 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 expense or total assets or total liabilities, as the case may be , of the unlisted material subsidiary for the immediately preceding accounting year.

  5. The Company shall not dispose of shares of its material subsidiary resulting in reduction of its shareholding (either on its own or together with other subsidiaries) to less than 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.

  6. Selling , disposing and leasing of assets amounting to more than 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.

Placement of this Policy On Website

Pursuant to the SEBI (LODR) Regulations, 2015, this ‘Policy’ shall be posted on the website of the Company.

Policy Review and Amendment:

The Board may, subject to applicable laws amend any provision(s) or substitute any of the provision(s) with the new provision(s) or replace the Policy entirely with a new Policy, based on the recommendations of the Audit Committee.

The Board may also establish further rules and procedures, from time to time, to give effect to this Policy and to ensure governance of material Subsidiary Companies.

Scope and Limitation

In the event of any conflict between the provisions of this Policy and the Listing Agreement / Regulations/Companies Act, 2013 or any other statutory enactments, rules, the provisions of such Listing Agreement / Companies Act, 2013 or statutory enactments, rules shall prevail over this Policy.