Policy on Identification of Group Companies, Material Creditors and Material Litigations.
A. INTRODUCTION
This Policy has been formulated to define the materiality for identification of group companies, outstanding litigation and outstanding dues to creditors in respect of Nanta Tech Limited (the "Company"), pursuant to the disclosure requirements under Schedule VI of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended.
B. APPLICABILITY AND OBJECTIVE
This policy shall be called the "Policy on Identification of Group Companies, Material Creditors and Material Litigations" ("Policy").
The Board of Directors of the Company/ These Policy shall be effective from the date of approval of the Board. The Board of Directors is responsible for identification and determination of (i) material creditors, (ii) material litigations and (iii) Group Companies pursuant to the provisions of SEBI ICDR Regulations, details of which shall be disclosed in the Offer Documents.
"Offer Documents" means the Draft Red Herring Prospectus and the Prospectus to be filed by the Company in connection with the proposed initial public offering of its equity shares on the Stock Exchanges where the equity shares of the Company are proposed to be listed, as applicable.
Words and expressions used and not defined in this Policy shall have the same meanings ascribed to such words in the Offer Documents in this Policy unless the context otherwise requires:
- Words denoting the singular shall include the plural and vice versa.
- References to the words "include" or "including" shall be construed without limitation.
C. POLICY PERTAINING TO THE IDENTIFICATION OF MATERIAL GROUP COMPANIES, MATERIAL CREDITORS AND MATERIAL LITIGATIONS
The Policy with respect to the identification of the group companies, material creditors and material litigation shall be as follows:
Identification of Material Group Companies:
As per the SEBI ICDR Regulations, the Company shall make relevant disclosure in the Offer Documents for group companies as per the Indian Accounting Standards (Ind AS), Indian Accounting Standard 24 (AS 24) as articulated as per the restated consolidated financial statements for three (3) financial years and any subsequent such period preceding the date of the Offer Document, shall also any such companies as considered material by the board of directors of the Company.
Policy on Materiality:
A company shall be considered material and disclosed as a Group Company if a material substantial change in such company can lead to a material adverse effect on the Company, and its investments in such company represents or accounts for more than [__] percent in accordance with the applicable accounting standards (AS 18) as per the latest audited and restated consolidated financial statements of the Company included in the Offer Document.
For avoidance of doubt, it is hereby clarified that the Subsidiaries shall not be considered as Group Companies for the purpose of disclosure in the Offer Documents.
Identification of Material Creditors
As per the SEBI ICDR Regulations, the Company shall make relevant disclosures in the Offer Documents for outstanding dues to creditors:
- Based on the policy on materiality defined by the Board and as disclosed in the Offer Document, disclosure for such creditors;
- Consolidated information on outstanding dues to credit scale undertakings and other creditors, separately giving details of number of cases and amount involved; and
- Details of creditors with outstanding dues exceeding 5% of the current liabilities, separately giving details of a web link thereto in the offer document Policy on materiality;
Policy on Materiality:
For identification of material creditors, in terms of point (i) above, a creditor of the Company, shall be considered to be material for the purpose of disclosure in the Offer Documents, if amounts due to such creditor exceeds 5% of the long-term liabilities on the date of the restated financial statements or as the Company otherwise considers material in the Offer Documents.
Disclosures in Offer Document Regarding Creditors and SSUs and MSMEs:
For creditors identified as "material" based on the aforementioned filing, information on outstanding dues to such material creditors shall be disclosed in the Offer Documents along with details on such creditors and the nature of goods/services provided or the date of the latest outstanding business documents in the Offer Document.
For outstanding dues to small scale undertakings ("SSU") or a micro small and medium enterprises ("MSME"), the disclosure will be based on information available with the Company regarding the creditor at the date as on the MSME or registration documents, if any, as amended, as has been relied upon by the statutory auditors in preparing their audit report. Information for any unclassified SSUs or MSMEs creditors shall be provided in the Offer Documents in the following manner:
- Aggregate amounts due to such creditors; and
- Number of creditor cases involved
as of the date of the latest restated consolidated financial statements included in the Offer Document
In respect of all creditors of the Company, consolidated information on outstanding dues to the creditors shall be disclosed in the Offer Documents comprising the number of creditors and amount involved in an aggregate basis and of the latest restated consolidated financial statements included in the Offer Document.
Disclosure Requirements:
The Company shall make relevant disclosures before the Audit Committee/ Board of directors as required by applicable law from time to time.
Identification of Material Litigation
Requirement:
As per the requirements of SEBI ICDR Regulations, the Company shall disclose all the litigation involving the Company, its subsidiaries, joint ventures, promoters, directors and group companies is required to be disclosed in the Offer Documents in the Company, directors, promoters, key managerial personnel, principal officers or group companies as the case may be. In any such pending litigation or arbitration proceeding exceeds the lower of the following in the Offer Document/Offer Documents to be filed in pursuance of the initial public offer of the Company named in one of the above categories:
- ten percent of net worth, as per the latest audited restated financial statements of the issue, except in case the arithmetic value of the net worth is negative; or
- five percent of the average of absolute value of profit or loss after tax, as per the last three annual restated financial statements of the issue
such litigation or arbitration proceeding where the monetary liability is not quantifiable, or which does not fulfill the threshold specified in (a) above, but the outcome of such litigation or arbitration proceeding could nonetheless have a material adverse effect on the business, operations, performance, prospects, financial position or reputation of the Company
D. AMENDMENT
The Board (including its duly constituted committees where appropriate), shall have the power to amend any of the provisions of this Policy, substitute any of the provisions with a new provision, or replace this Policy entirely with a new Policy. This Policy shall be subject to review/changes as may be deemed necessary in accordance with regulatory amendments from time to time.
