The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 specifies the requirement for determination and disclosure of
a. Companies which are considered to be material as a group company
of the Company within the meaning of ‘Group Company’ defined under
the SEBI Regulations;
b. material litigation involving the issuer company, its directors,
its subsidiaries (if any), its promoters and its group Companies;
and
c. material outstanding dues to creditors.
In view of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, the Board of Directors (“Board”) of Addictive Learning Technology Limited (“Company”) has adopted this policy and procedures for determination of:
i. Group Companies;
ii. Material Litigations; and
iii. Material Creditors.
This policy shall be called the ‘Policy on Identification of Material Creditors and Material Litigations’ (“Policy”).
Identification of the Group Companies
The Company is required to disclose certain matters in relation to its “group Companies” in the Draft Prospectus Red Herring / Red Herring Prospectus/ Prospectus. The SEBI Regulations define “group Companies” as:
“The words “group Companies”, wherever they occur, shall include such Companies (other than promoter(s)) with which there were related party transactions, during the period for which financials information is disclosed, as covered under applicable accounting standards and also other Companies as considered material by the board of the issuer.”
In the opinion of the Board of the Company, “group Companies” and “Related Parties” shall be Companies/entities as given below.
Policy on Materiality:
a. Companies disclosed as related parties in accordance with the
relevant accounting standard, i.e Accounting Standard-18,
Regulations, the Companies (other than promoters and subsidiaries)
with which there were related party transactions as per the restated
financial statements of the Company during last three financial
years vis-à-vis March 31, 2021, March 31, 2022, March 31, 2023 and
eleven Months period ended 29th February, 2024 in respect of which
restated financial statements are included in the Issue Documents
(“Relevant Period”), shall be identified as the group Companies of
the Company
b. for the purposes of disclosure in Issue Documents as prescribed
by the SEBI ICDR Regulations, such Companies (other than the
promoters) with which there were related party transactions for the
period beginning from 1st April 2024 [after the period in respect of
which, restated financial statements are included in the Issue
Documents until the date of filing of the Issue Documents] shall be
considered material by the Board to be eligible as group Companies.
Accordingly, for the purposes of disclosure as a group company in
the Issue Documents, following Companies considered as group
Companies.
c. For the purpose of the offer documents, a company shall be
considered “Material” and will be disclosed as a “Group Company” in
the offer documents, if Such company forms part of the Promoter
Group in the immediately preceding accounting year, (Such period
collectively referred to as the “Relevant Period”); and/ or For
avoidance of doubt, it is clarified that any Companies which,
subsequent to the Relevant Period, have ceased to be related parties
of the Company in terms of Accounting Standard 18 solely on account
of there being no significant influence/ control over such company
in terms of Accounting Standard 18 after the Relevant period shall
not be considered as “Group Companies”, for the purpose of
disclosure in the offer documents.
Requirement:
As per the requirements of SEBI (ICDR) Regulations 2018, the Company shall disclose all the litigation involving the Company, its joint venture(s) and directors related to:
i. All criminal proceedings;
ii. All actions by statutory / regulatory authorities;
iii. Disciplinary action including penalty imposed by SEBI or stock
exchanges against the promoters in the last five financial years
including outstanding action;
iv. Claims related to direct and indirect taxes, in a consolidated
manner giving details of number of cases and total amount; and
v. Other material pending litigations - as per policy of materiality
defined by the Board and disclosed in the Offer Documents.
Additionally, in terms of the SEBI (ICDR) Regulations 2018, the Company is required to disclose any outstanding litigation involving the group Companies, which may have a material impact on the Company. For the purposes of determining the outstanding litigation involving the group Companies, which may have a material impact on the Company, the criteria specified under “Policy on materiality” herein below shall apply.
Policy on Materiality:
For the purpose of point no. (v) above, any other pending litigation involving the Company, its directors and joint venture(s) shall be considered “material” for the purpose of disclosure in the Offer Documents if: -
a) the aggregate monetary amount of claim by or against the Company,
its Directors and/or Promoters in any such pending litigation is
equal to or in excess of 10% of the total revenue of the Company as
per the last audited financial statements of the Company for a
complete financial year, as included in the Offer Documents; or
a) where the decision in one case is likely to affect the decision
in similar cases, even though the amount involved in an individual
litigation does not exceed the amount determined as per clause (a)
above, and the amount involved in all of such cases taken together
exceeds the amount determined as per clause (a) above; and
b) Any such litigation which does not meet the criteria set out in
(a) above and an adverse outcome which would materially and
adversely affect the operations or financial position of the
Company.
Requirement:
As per the requirements of SEBI (ICDR) Regulations 2018, the Company shall make relevant disclosures in the Offer Documents for outstanding dues to creditors:
a) Based on the policy of materiality defined by the Board of
Directors of the Company and as disclosed in the Offer Document,
disclosure for such creditors which include the consolidated number
of creditors and the aggregate amount involved;
b) Consolidated information on outstanding dues to micro, small and
medium enterprises and other creditors, separately giving details of
number of cases and amount involved; and
c) Complete details about outstanding overdues to material creditors
along with the name and amount involved for each such material
creditor shall be disclosed on the website of the Company with a web
link thereto.
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 exceed 10% of the total consolidated trade payables of the Company as per the latest audited financial statements of the Company, as disclosed in the Offer Documents.
Disclosures in the Offer Documents regarding material creditors:
a) For creditors identified as ‘material’ based on the
above-mentioned Policy, information on outstanding dues to such
material creditors shall be disclosed in the Offer Documents along
with the details of the material creditors, which include the
consolidated number of creditors and amount involved on an aggregate
basis,
as of the date of the latest audited financial statements included in the Offer Documents.
b) For outstanding dues to micro, small and medium enterprises
(“MSMEs”), the disclosure will be based on information available
with the Company regarding the status of the creditors as MSMEs as
defined under Section 2 of the Micro, Small and Medium Enterprises
Development Act, 2006, as amended, as has been relied upon by the
statutory auditors in preparing their audit report. Information for
such identified MSMEs creditors shall be provided in the Offer
Documents in the following manner:
a. aggregate amounts due to such MSME creditors; and
b. aggregate number of such MSME creditors.
as of the date of the latest audited financial statements included in the Offer Documents.
c) Complete details about outstanding over dues to the material creditors along with the name and amount involved for each such material creditor shall be disclosed on the website of our Company with a web link in the Offer Documents.
The Company shall make relevant disclosures before the Audit Committee/ Board of Directors as required by applicable law from time to time.
The Board (including its duly constituted committees wherever permissible) shall have the power to amend this Policy, substitute any of the provisions with a new provision or replace this Policy entirely with a new Policy. This Policy shall automatically stand amended to reflect any changes to the SEBI Regulations, to the extent the same is the subject matter of this Policy.
The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 requires the same to be disclosed in its draft red herring prospectus/ red herring prospectus /prospectus of the company.
This code is adopted in meeting of Board of Directors June 17, 2024.