TERMS USE IN THE LISTING REGULATIONS
TERMS USE IN THE LISTING REGULATIONS
I.
“DESIGNATED SECURITIES”
Means 1specified securities, 2non-convertible
debt securities, 3non-convertible redeemable preference shares, 4perpetual
debt instrument, 5perpetual non-cumulative preference shares, 6Indian
depository receipts, 7securitized debt instruments, 8units
issued by mutual funds and any other securities as may be specified by the
Board.
1Specified securities,
Non-convertible
debt securities, non-convertible redeemable preference shares, perpetual debt
instrument, perpetual non-cumulative preference shares, Indian depository
receipts, securitized debt instruments, units issued by mutual funds and any
other securities as may be specified by the Board. [Regulation 2(1) (h) of SEBI
(LODR) Regulations, 2015]
2Non-convertible debt securities:
‘Non
– Convertible Debt Securities’ which is ‘debt securities’ as defined under
regulation 2(1)(e) of the Securities and Exchange Board of India (Issue and
Listing of Debt Securities) Regulations, 2008. [Regulation 2(1)(t) of SEBI
(LODR) Regulation 2015]
Debt Securities
“Debt
Securities” means a non-convertible debt securities which create or acknowledge
indebtedness, and include debenture, bonds and such other securities of a body
corporate or any statutory body constituted by virtue of a legislation, whether
constituting a charge on the assets of the body corporate or not, but excludes
bonds issued by Government or such other bodies as may be specified by the
Board, security receipts and securitized debt instruments. [Regulation 2(1)(e)
of SEBI(ILDS) Regulations 2008]
Debt
securities include debentures and bonds. Bond issued by government companies
and statutory bodies also included in the definition but sovereign bonds issued
by government are not included.
3Non – Convertible Redeemable Preference
Shares
means
a preference share which is redeemable in accordance with the provisions of the
Companies Act, 1956 (or the Companies Act, 2013) and does not include a
preference share which is convertible into or exchangeable with equity shares
of the issuer at a later date, with or without the option of the holder.
[Regulation 2(1)(k) of SEBI (Issue and Listing of Non-Convertible Redeemable
Preference Shares) Regulations 2013].
4perpetual debt instrument
“Perpetual
Debt Instrument” means an innovative perpetual debt instrument issued by a bank
in accordance with the guidelines framed by the Reserve Bank of India.
[Regulation 2(1)(h) of SEBI (Issue and Listing of Non-Convertible Redeemable
Preference Shares) Regulations 2013].
5perpetual non-cumulative preference shares
“Perpetual
Non – Cumulative Preference Share” means a perpetual noncumulative preference
share issued by a bank in accordance with the guidelines framed by the Reserve
Bank of India. [Regulation 2(1)(l) of SEBI (Issue and Listing of
Non-Convertible Redeemable Preference Shares) Regulations 2013]
6Indian depository receipts
Indian
depository receipts’ means Indian depository receipts as defined in sub-section
(48) of section 2 of the Companies Act, 2013 securitised debt instruments.
[Regulation 2(1)(n) of SEBI (LODR) Regulations, 2015.
“Indian
Depository Receipt” means any instrument in the form of a depository receipt
created by a domestic depository in India and authorised by a company
incorporated outside India making an issue of such depository receipts.
[Section 2(48) of the Companies Act, 2013]
7Securitized debt instruments:
‘Securitised
Debt Instruments’ as defined in the Securities and Exchange Board of India
(Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008.
[Regulation 2(1)(zg) of SEBI (LODR) Regulations 2015]
“Securitised
Debt Instrument” means any certificate or instrument, by whatever name called,
of the nature referred to in sub-clause (ie) of clause (h) of section 2 of the
Securities Contracts (Regulation) Act, 1956 issued by a special purpose
distinct entity. [Regulation 2(1)(s) of SEBI (Public Offer and Listing of
Securitised Debt Instruments) Regulations, 2008].
8units issued by mutual funds
“Unit”
means the interest of the unit holders in a scheme, which consists of each unit
representing one undivided share in the assets of a scheme. [Regulation 2(z) of
the SEBI (Mutual Funds) Regulations, 1996].
II.
Recognized
stock exchange:
As
per “The
Securities Contracts (Regulation) Act, 1956,
“Recognized Stock Exchange [Section 2(f)] means a stock exchange which is
for the time being recognized by the Central Government under Section 4 of the
Act.
III.
Key managerial personnel:2(o)
Section 2(51) of Companies Act, 2013“key
managerial personnel”, in relation to a company, means—
(i)
the Chief Executive
Officer or the managing director or the manager;
(ii)
the company secretary;
(iii)
the whole-time
director;
(iv)
the Chief Financial
Officer; and
(v)
such other officer as
may be prescribed
IV.
"Listed entity"2(P)
Listed entity means an entity which has
listed, on a recognized stock exchange(s), the designated securities issued by
it or designated securities issued under schemes managed by it, in accordance
with the listing agreement entered into between the entity and the recognized
stock exchange(s);
V.
“Listing agreement” 2(q)
Listing Agreement shall mean an agreement
that is entered into between a recognized stock exchange and an entity, on the
application of that entity to the recognized stock exchange, undertaking to
comply with conditions for listing of designated securities;
VI.
“main board” 2(R)
Main board as defined
in *clause (a) of sub-regulation (1) of regulation 106N of the Securities and
Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009;
*“Main Board” means a recognized stock
exchange having nationwide trading terminals, other than SME exchange;
VII.
"Promoter" and "promoter
group" 2(w)
It shall have the same meaning as assigned
to them respectively in clauses (za) and (zb) of sub-regulation (1) of
regulation 2 of the Securities and Exchange Board of India (Issue of Capital
and Disclosure Requirements) Regulations, 2009.
Promoter:
“Promoter”
includes:
(i) the person or
persons who are in control of the issuer;
(ii) the person or persons who are instrumental in the
formulation of a plan or programme pursuant to which specified securities are
offered to public;
(iii)
the person or persons named in the offer document as
promoters:
A
director or officer of the issuer or a person shall not be deemed as a
promoter, if such director or officer or person is acting as such merely in his
professional capacity. A financial institution, scheduled bank, foreign
portfolio investor other than Category III foreign portfolio investor, and
mutual fund shall not be deemed to be a promoter merely by virtue of the fact
that ten percent or more of the equity share capacity of the issuer is held by
such person. A financial institution, scheduled bank and foreign portfolio
investor other than Category III foreign portfolio investor shall be treated as
promoter for the subsidiaries or companies promoted by them or for mutual fund
sponsored by them.
VIII.
"PUBLIC" 2(x)
Public
as defined under clause (d) of rule 2 of the Securities Contracts (Regulation)
Rules, 1957;
Clause
(d) of rule 2 of the Securities Contracts (Regulation) Rules, 1957 “Public”
means Persons Other Than –
(i)
The promoter and promoter group;
(ii)
Subsidiaries and associates of the company.
Explanation: For the purpose of
this clause the words „promoter‟ and „promoter group‟ shall have the same
meaning as assigned to them under the Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations, 2009.
IX.
"Public shareholding" 2(y)
Public
Shareholding as defined under clause (e) of rule 2 of the Securities Contracts
(Regulation) Rules, 1957.
Clause
(e) of rule 2 of the Securities Contracts (Regulation) Rules, 1957. “Public
Shareholding” means equity shares of the company held by public and
shall exclude shares which are held by custodian against depository receipts
issued overseas.‟
X.
"Securities laws" 2(zf)
Securities
Law means the Act,
i.
The Securities Contracts (Regulation) Act, 1956,
ii.
The Depositories Act, 1996, and
iii.
the Companies Act, 1956 the rules, regulations, circulars
or guidelines
iv.
Companies Act, 2013, and the rules, regulations, circulars
or guidelines made there under.
XI.
“SME Exchange” 2(zi)
SME
Exchange means an SME exchange as defined under clause (c) of sub-regulation
(1) of regulation 106N of the Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations, 2009;
“SME
exchange” means a trading platform of a recognised stock exchange having
nationwide trading terminals permitted by the Board to list the specified
securities issued in accordance with this Chapter and includes a stock exchange
granted recognition for this purpose but does not include the Main Board;
NOTE:
If any
words and expressions is not defined under these regulations then that word shall
have the same meaning as respectively assigned to them in below mentioned Acts
or rules or regulations or any statutory modification or re-enactment thereto,
as the case may be
·
The Companies Act, 2013,
·
The Securities Contracts (Regulation) Act, 1956,
·
The Depositories Act, 1996
and/or the rules and regulations made
thereunder.
XII.
"Control" Regulation
16(1)(a)
Control
shall have the same meaning as assigned to it under the Securities and Exchange
Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,
2011;
SEBI
(Substantial Acquisition of Shares and Takeovers) Regulation, 2015:
“Control”
Includes; below mentioned exercisable by a person or persons acting
individually or in concert, directly or indirectly, including by virtue of
their shareholding or management rights or shareholders agreements or voting
agreements or in any other manner:
·
The
right to appoint majority of the directors or
·
To
control the Management Decision or
·
To
control Policy Decisions
Condition: A director or officer of a target
company shall not be considered to be in control over such target company,
merely by virtue of holding such position;
XIII.
“Material subsidiary” Regulation 16(1)(C)
Material Subsidiary shall mean a subsidiary
defined below, whose income or net worth exceeds 20% (Twenty Percent) of
the consolidated income or net worth respectively, of the listed entity and its
subsidiaries in the immediately preceding accounting year.
Explanation:
- The listed entity shall formulate a policy for determining ‘material’
subsidiary.
Example: If Net worth of Subsidiary (A) is
Rs. 25,00,000/- and Consolidated net worth of listed entity(B) along with all
subsidiaries is Rs. 10,000,000-.
Therefore,
percentage of net worth of subsidiary (A) is 25% of total consolidated net
worth of listed entity (B).
Subsidiary
(A) is Material Subsidiary for the listed entity (B)
Subsidiary:
“Subsidiary” means a subsidiary as
defined under sub-section (87) of section 2 of the Companies Act, 2013;
As per Companies Act,
2013:- 2(87) “subsidiary company” or
“subsidiary”, in relation to any other company (that is to say the holding
company), means a company in which the holding company—
(i) Controls the composition of the Board of
Directors; or
(ii)
Exercises or controls more than one-half of the total share capital either at
its own or together with one or more of its subsidiary companies:
Provided
that such class or classes of holding companies as may be prescribed shall not
have layers of subsidiaries beyond such numbers as may be prescribed.
Explanation: - For the purposes of this clause,—
(a) A company
shall be deemed to be a subsidiary company of the holding company even if the
control referred to in sub-clause (i) or sub-clause (ii) is of another
subsidiary company of the holding company;
(b) The
composition of a company’s Board of Directors shall be deemed to be controlled
by another company if that other company by exercise of some power exercisable
by it at its discretion can appoint or remove all or a majority of the
directors;
(c) The expression “company” includes any body
corporate;
(d) “Layer”
in relation to a holding company means its subsidiary or subsidiaries;
XIV.
“senior management” Regulation 16(1)(d)
Senior
Management shall mean officers/personnel of the listed entity
·
who
are members of its core management team; excluding
board of directors and
·
Normally this shall comprise all members of
management one level below the executive directors, including all functional
heads.
XV. “RELATED PARTY” means a related party as defined under sub-section (76) of
section 2 of the [1]Companies
Act, 2013 or under the applicable accounting standards:
Not
Applicable: This definition shall not be applicable for the units
issued by mutual funds which are listed on a recognized stock exchange(s);
Condition-1
·
A transfer of Resources,
·
A transfer of Services or
·
A transfer of obligations
Condition-2:
Between a
Listed Entity and a Related Party.
Condition-3:
Regardless
of whether a price is charged and
Non Applicability: This definition shall not be applicable
for the units issued by mutual funds which are listed on a recognised stock exchange(s);
XVII.
Materiality of Related Party Transaction:
A transaction with a related party shall be considered
material,
o
if
the transaction(s) to be entered into individually or taken together with
previous transactions during a financial year,
o
exceeds
10% of the annual consolidated turnover of the listed entity
o
As
per the latest Audited Financial Statements.
XVIII.
Definition of Significant Transactions and
Arrangements:
Any
individual transaction or arrangement that exceeds or is likely to exceed below
given limits of the unlisted material subsidiary for the immediately preceding
accounting year.
·
10%
(ten percent) of the total revenues OR
·
10%
(ten percent) of the total expenses OR
·
10%
(ten percent) of the total assets OR
·
10%
(ten percent) of the total liabilities,
XIX.
professionally managed entity:
§
No person or group along with persons
acting in concert taken together shall hold more than one per cent paid-up equity
capital of the entity including any holding of
convertibles/outstanding warrants/ Depository Receipts.
§ Any mutual fund, bank, insurance company, financial
institution, foreign portfolio investor may individually hold up to ten
per cent paid-up equity capital of the entity including any holding
of convertibles/outstanding warrants/Depository Receipts.
§ Such promoter shall not continue to have any special rights
through formal or informal arrangements.
§ All shareholding agreements granting special rights to such
entities shall be terminated.
§ Such promoters and their relatives shall not act as key
managerial person for a period of more than three years from the date of
shareholders’ approval.
XX.
Monitoring agency
If
the issue size exceeds five hundred crore rupees, the issuer shall make
arrangements for the use of proceeds of the issue to be monitored by a public
financial institution or by one of the scheduled commercial banks named in the
offer document as bankers of the issuer: Provided that nothing contained in
this clause shall apply to an offer for sale or an issue of specified
securities made by a bank or public financial institution 47[or an insurance
company].
(Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES
Company Secretary in Practice from Delhi and can be contacted at
csdiveshgoyal@gmail.com)
Disclaimer: The entire contents of this document have been
prepared on the basis of relevant provisions and as per the information
existing at the time of the preparation. The observations of the author are personal view and the authors do not take
responsibility of the same and this cannot be quoted before any authority
without the written
I.
“DESIGNATED SECURITIES”
Means 1specified securities, 2non-convertible
debt securities, 3non-convertible redeemable preference shares, 4perpetual
debt instrument, 5perpetual non-cumulative preference shares, 6Indian
depository receipts, 7securitized debt instruments, 8units
issued by mutual funds and any other securities as may be specified by the
Board.
1Specified securities,
Non-convertible
debt securities, non-convertible redeemable preference shares, perpetual debt
instrument, perpetual non-cumulative preference shares, Indian depository
receipts, securitized debt instruments, units issued by mutual funds and any
other securities as may be specified by the Board. [Regulation 2(1) (h) of SEBI
(LODR) Regulations, 2015]
2Non-convertible debt securities:
‘Non
– Convertible Debt Securities’ which is ‘debt securities’ as defined under
regulation 2(1)(e) of the Securities and Exchange Board of India (Issue and
Listing of Debt Securities) Regulations, 2008. [Regulation 2(1)(t) of SEBI
(LODR) Regulation 2015]
Debt Securities
“Debt
Securities” means a non-convertible debt securities which create or acknowledge
indebtedness, and include debenture, bonds and such other securities of a body
corporate or any statutory body constituted by virtue of a legislation, whether
constituting a charge on the assets of the body corporate or not, but excludes
bonds issued by Government or such other bodies as may be specified by the
Board, security receipts and securitized debt instruments. [Regulation 2(1)(e)
of SEBI(ILDS) Regulations 2008]
Debt
securities include debentures and bonds. Bond issued by government companies
and statutory bodies also included in the definition but sovereign bonds issued
by government are not included.
3Non – Convertible Redeemable Preference
Shares
means
a preference share which is redeemable in accordance with the provisions of the
Companies Act, 1956 (or the Companies Act, 2013) and does not include a
preference share which is convertible into or exchangeable with equity shares
of the issuer at a later date, with or without the option of the holder.
[Regulation 2(1)(k) of SEBI (Issue and Listing of Non-Convertible Redeemable
Preference Shares) Regulations 2013].
4perpetual debt instrument
“Perpetual
Debt Instrument” means an innovative perpetual debt instrument issued by a bank
in accordance with the guidelines framed by the Reserve Bank of India.
[Regulation 2(1)(h) of SEBI (Issue and Listing of Non-Convertible Redeemable
Preference Shares) Regulations 2013].
5perpetual non-cumulative preference shares
“Perpetual
Non – Cumulative Preference Share” means a perpetual noncumulative preference
share issued by a bank in accordance with the guidelines framed by the Reserve
Bank of India. [Regulation 2(1)(l) of SEBI (Issue and Listing of
Non-Convertible Redeemable Preference Shares) Regulations 2013]
6Indian depository receipts
Indian
depository receipts’ means Indian depository receipts as defined in sub-section
(48) of section 2 of the Companies Act, 2013 securitised debt instruments.
[Regulation 2(1)(n) of SEBI (LODR) Regulations, 2015.
“Indian
Depository Receipt” means any instrument in the form of a depository receipt
created by a domestic depository in India and authorised by a company
incorporated outside India making an issue of such depository receipts.
[Section 2(48) of the Companies Act, 2013]
7Securitized debt instruments:
‘Securitised
Debt Instruments’ as defined in the Securities and Exchange Board of India
(Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008.
[Regulation 2(1)(zg) of SEBI (LODR) Regulations 2015]
“Securitised
Debt Instrument” means any certificate or instrument, by whatever name called,
of the nature referred to in sub-clause (ie) of clause (h) of section 2 of the
Securities Contracts (Regulation) Act, 1956 issued by a special purpose
distinct entity. [Regulation 2(1)(s) of SEBI (Public Offer and Listing of
Securitised Debt Instruments) Regulations, 2008].
8units issued by mutual funds
“Unit”
means the interest of the unit holders in a scheme, which consists of each unit
representing one undivided share in the assets of a scheme. [Regulation 2(z) of
the SEBI (Mutual Funds) Regulations, 1996].
II.
Recognized
stock exchange:
As
per “The
Securities Contracts (Regulation) Act, 1956,
“Recognized Stock Exchange [Section 2(f)] means a stock exchange which is
for the time being recognized by the Central Government under Section 4 of the
Act.
III.
Key managerial personnel:2(o)
Section 2(51) of Companies Act, 2013“key
managerial personnel”, in relation to a company, means—
(i)
the Chief Executive
Officer or the managing director or the manager;
(ii)
the company secretary;
(iii)
the whole-time
director;
(iv)
the Chief Financial
Officer; and
(v)
such other officer as
may be prescribed
IV.
"Listed entity"2(P)
Listed entity means an entity which has
listed, on a recognized stock exchange(s), the designated securities issued by
it or designated securities issued under schemes managed by it, in accordance
with the listing agreement entered into between the entity and the recognized
stock exchange(s);
V.
“Listing agreement” 2(q)
Listing Agreement shall mean an agreement
that is entered into between a recognized stock exchange and an entity, on the
application of that entity to the recognized stock exchange, undertaking to
comply with conditions for listing of designated securities;
VI.
“main board” 2(R)
Main board as defined
in *clause (a) of sub-regulation (1) of regulation 106N of the Securities and
Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009;
*“Main Board” means a recognized stock
exchange having nationwide trading terminals, other than SME exchange;
VII.
"Promoter" and "promoter
group" 2(w)
It shall have the same meaning as assigned
to them respectively in clauses (za) and (zb) of sub-regulation (1) of
regulation 2 of the Securities and Exchange Board of India (Issue of Capital
and Disclosure Requirements) Regulations, 2009.
Promoter:
“Promoter”
includes:
(i) the person or
persons who are in control of the issuer;
(ii) the person or persons who are instrumental in the
formulation of a plan or programme pursuant to which specified securities are
offered to public;
(iii)
the person or persons named in the offer document as
promoters:
A
director or officer of the issuer or a person shall not be deemed as a
promoter, if such director or officer or person is acting as such merely in his
professional capacity. A financial institution, scheduled bank, foreign
portfolio investor other than Category III foreign portfolio investor, and
mutual fund shall not be deemed to be a promoter merely by virtue of the fact
that ten percent or more of the equity share capacity of the issuer is held by
such person. A financial institution, scheduled bank and foreign portfolio
investor other than Category III foreign portfolio investor shall be treated as
promoter for the subsidiaries or companies promoted by them or for mutual fund
sponsored by them.
VIII.
"PUBLIC" 2(x)
Public
as defined under clause (d) of rule 2 of the Securities Contracts (Regulation)
Rules, 1957;
Clause
(d) of rule 2 of the Securities Contracts (Regulation) Rules, 1957 “Public”
means Persons Other Than –
(i)
The promoter and promoter group;
(ii)
Subsidiaries and associates of the company.
Explanation: For the purpose of
this clause the words „promoter‟ and „promoter group‟ shall have the same
meaning as assigned to them under the Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations, 2009.
IX.
"Public shareholding" 2(y)
Public
Shareholding as defined under clause (e) of rule 2 of the Securities Contracts
(Regulation) Rules, 1957.
Clause
(e) of rule 2 of the Securities Contracts (Regulation) Rules, 1957. “Public
Shareholding” means equity shares of the company held by public and
shall exclude shares which are held by custodian against depository receipts
issued overseas.‟
X.
"Securities laws" 2(zf)
Securities
Law means the Act,
i.
The Securities Contracts (Regulation) Act, 1956,
ii.
The Depositories Act, 1996, and
iii.
the Companies Act, 1956 the rules, regulations, circulars
or guidelines
iv.
Companies Act, 2013, and the rules, regulations, circulars
or guidelines made there under.
XI.
“SME Exchange” 2(zi)
SME
Exchange means an SME exchange as defined under clause (c) of sub-regulation
(1) of regulation 106N of the Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations, 2009;
“SME
exchange” means a trading platform of a recognised stock exchange having
nationwide trading terminals permitted by the Board to list the specified
securities issued in accordance with this Chapter and includes a stock exchange
granted recognition for this purpose but does not include the Main Board;
NOTE:
If any
words and expressions is not defined under these regulations then that word shall
have the same meaning as respectively assigned to them in below mentioned Acts
or rules or regulations or any statutory modification or re-enactment thereto,
as the case may be
·
The Companies Act, 2013,
·
The Securities Contracts (Regulation) Act, 1956,
·
The Depositories Act, 1996
and/or the rules and regulations made
thereunder.
Control
shall have the same meaning as assigned to it under the Securities and Exchange
Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,
2011;
SEBI
(Substantial Acquisition of Shares and Takeovers) Regulation, 2015:
“Control”
Includes; below mentioned exercisable by a person or persons acting
individually or in concert, directly or indirectly, including by virtue of
their shareholding or management rights or shareholders agreements or voting
agreements or in any other manner:
·
The
right to appoint majority of the directors or
·
To
control the Management Decision or
·
To
control Policy Decisions
Condition: A director or officer of a target
company shall not be considered to be in control over such target company,
merely by virtue of holding such position;
XIII.
“Material subsidiary” Regulation 16(1)(C)
Material Subsidiary shall mean a subsidiary
defined below, whose income or net worth exceeds 20% (Twenty Percent) of
the consolidated income or net worth respectively, of the listed entity and its
subsidiaries in the immediately preceding accounting year.
Explanation:
- The listed entity shall formulate a policy for determining ‘material’
subsidiary.
Example: If Net worth of Subsidiary (A) is
Rs. 25,00,000/- and Consolidated net worth of listed entity(B) along with all
subsidiaries is Rs. 10,000,000-.
Therefore,
percentage of net worth of subsidiary (A) is 25% of total consolidated net
worth of listed entity (B).
Subsidiary
(A) is Material Subsidiary for the listed entity (B)
Subsidiary:
“Subsidiary” means a subsidiary as
defined under sub-section (87) of section 2 of the Companies Act, 2013;
As per Companies Act,
2013:- 2(87) “subsidiary company” or
“subsidiary”, in relation to any other company (that is to say the holding
company), means a company in which the holding company—
(i) Controls the composition of the Board of
Directors; or
(ii)
Exercises or controls more than one-half of the total share capital either at
its own or together with one or more of its subsidiary companies:
Provided
that such class or classes of holding companies as may be prescribed shall not
have layers of subsidiaries beyond such numbers as may be prescribed.
Explanation: - For the purposes of this clause,—
(a) A company
shall be deemed to be a subsidiary company of the holding company even if the
control referred to in sub-clause (i) or sub-clause (ii) is of another
subsidiary company of the holding company;
(b) The
composition of a company’s Board of Directors shall be deemed to be controlled
by another company if that other company by exercise of some power exercisable
by it at its discretion can appoint or remove all or a majority of the
directors;
(c) The expression “company” includes any body
corporate;
(d) “Layer”
in relation to a holding company means its subsidiary or subsidiaries;
XIV.
“senior management” Regulation 16(1)(d)
Senior
Management shall mean officers/personnel of the listed entity
·
who
are members of its core management team; excluding
board of directors and
·
Normally this shall comprise all members of
management one level below the executive directors, including all functional
heads.
XV. “RELATED PARTY” means a related party as defined under sub-section (76) of
section 2 of the [1]Companies
Act, 2013 or under the applicable accounting standards:
Not
Applicable: This definition shall not be applicable for the units
issued by mutual funds which are listed on a recognized stock exchange(s);
Condition-1
·
A transfer of Resources,
·
A transfer of Services or
·
A transfer of obligations
Condition-2:
Between a
Listed Entity and a Related Party.
Condition-3:
Regardless
of whether a price is charged and
Non Applicability: This definition shall not be applicable
for the units issued by mutual funds which are listed on a recognised stock exchange(s);
XVII.
Materiality of Related Party Transaction:
A transaction with a related party shall be considered
material,
o
if
the transaction(s) to be entered into individually or taken together with
previous transactions during a financial year,
o
exceeds
10% of the annual consolidated turnover of the listed entity
o
As
per the latest Audited Financial Statements.
XVIII.
Definition of Significant Transactions and
Arrangements:
Any
individual transaction or arrangement that exceeds or is likely to exceed below
given limits of the unlisted material subsidiary for the immediately preceding
accounting year.
·
10%
(ten percent) of the total revenues OR
·
10%
(ten percent) of the total expenses OR
·
10%
(ten percent) of the total assets OR
·
10%
(ten percent) of the total liabilities,
XIX.
professionally managed entity:
§
No person or group along with persons
acting in concert taken together shall hold more than one per cent paid-up equity
capital of the entity including any holding of
convertibles/outstanding warrants/ Depository Receipts.
§ Any mutual fund, bank, insurance company, financial
institution, foreign portfolio investor may individually hold up to ten
per cent paid-up equity capital of the entity including any holding
of convertibles/outstanding warrants/Depository Receipts.
§ Such promoter shall not continue to have any special rights
through formal or informal arrangements.
§ All shareholding agreements granting special rights to such
entities shall be terminated.
§ Such promoters and their relatives shall not act as key
managerial person for a period of more than three years from the date of
shareholders’ approval.
XX.
Monitoring agency
If
the issue size exceeds five hundred crore rupees, the issuer shall make
arrangements for the use of proceeds of the issue to be monitored by a public
financial institution or by one of the scheduled commercial banks named in the
offer document as bankers of the issuer: Provided that nothing contained in
this clause shall apply to an offer for sale or an issue of specified
securities made by a bank or public financial institution 47[or an insurance
company].
(Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES
Company Secretary in Practice from Delhi and can be contacted at
csdiveshgoyal@gmail.com)
Disclaimer: The entire contents of this document have been
prepared on the basis of relevant provisions and as per the information
existing at the time of the preparation. The observations of the author are personal view and the authors do not take
responsibility of the same and this cannot be quoted before any authority
without the written
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