Please someone explain me the meaning of term'Material non listed Indian Subsidiary' as per Listing Agreement in simple words. If possible, please explain it with the help of an example.
The term material non-listed Indian subsidiary is defined under Explanation I of Clause 49 III of Listing Agreement:
The term “material non-listed Indian subsidiary” shall mean an unlisted subsidiary, incorporated in India, whose turnover or net worth (i.e. paid up capital and free reserves) exceeds 20% of the consolidated turnover or net worth respectively, of the listed holding company and its subsidiaries in the immediately preceding accounting year.
For Example:
A Limited (Listed Company) and B Limited (Subsidiary Company ) consolidated turnover/networth is 150 Crores on March 31, 2010.
If B Limited turnover/net worth is 25 crores as on March 2010, in that case it will not be considered as material non-listed Indian subsidiary.
If B Limited turnover/net worth is 40 crores as on March 2010, in that case it will be considered as material non-listed Indian subsidiary.
In case B Ltd. is a Material Non Listed Indian Subsidiary of A Ltd. then 1 Independent Director from the Board of A Ltd. will have to be appointed on the Board of B Ltd.
This will be mentioned in the Annual Report of 2009-10 or 2010-2011??????
CAclubindia
