This article provides an in-depth understanding of Regulation 30 and 30A of SEBI (LODR) Regulation, 2015. These regulations require listed entities to disclose material events or information deemed significant by the board of directors. The article explores the criteria for determining materiality, timelines for disclosure, and the need for framing a materiality policy. Compliance with these regulations is crucial for ensuring transparency and providing stakeholders with relevant information.
- Every listed entity shall make disclosures of any events or information which, in the opinion of the board of directors of the listed company, is material.
- Events specified in Para A of Part A of Schedule III are deemed to be material events and listed entity shall make disclosure of such events.
- The listed entity shall make disclosure of events specified in Para B of Part A of Schedule III, based on application of the guidelines for materiality, as based on specified criteria for determination of materiality of events.
Criteria for Determination of Materiality of Events
(a) the omission of an event or information, which is likely to result in discontinuity or alteration of event or information already available publicly; or
(b) the omission of an event or information is likely to result in significant market reaction if the said omission came to light at a later date;
(c)* the omission of an event or information, whose value or the expected impact in terms of value, exceeds the lower of the following:
1. two percent of turnover, as per the last audited consolidated financial statements of the listed entity;
2. two percent of net worth, as per the last audited consolidated financial statements of the listed entity, except in case the arithmetic value of the net worth is negative;
3. five percent of the average of absolute value of profit or loss after tax, as per the last three audited consolidated financial statements of the listed entity;
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*Note- In respect of above point (c) , it is clarified that average of absolute value of profit or loss is required to be considered by disregarding the sign ( positive or negative ) in figure or value . llustration for calculation of average of absolute value of profit or loss after tax
Further, it is clarified that in case a listed entity does not have a track record of three years of financials, say, in case of a demerged entity, the aforesaid average may be taken for the period / number of years as may be available. |
(d) In case where the criteria specified in sub-clauses (a), (b) and (c) is not applicable, an event or information may be treated as being material if in the opinion of the board of directors of the listed entity, the event or information is considered material.
Frame Policy for Determination of Materiality of Events
The listed entity shall frame a policy for determination of materiality, based on criteria specified in this sub-regulation, duly approved by its board of directors, which shall be disclosed on its website.
Time Line for Disclosure of Event Or Information
The listed entity shall first disclose to the stock exchange(s) all events or information which are material in terms of the provisions of this regulation as soon as reasonably possible and in any case not later than the following:
| Particulars | Timeline |
| In case the decision pertaining to the event or information has been taken; | thirty minutes from the closure of the meeting of the board of directors |
| In case the event or information is emanating from within the listed entity | twelve hours from the occurrence of the event or information |
| In case the event or information is not emanating from within the listed entity i.e. from external Sources | twenty four hours from the occurrence of the event or information |
Disclosure with respect to events for which timelines have been specified in Part A of Schedule III shall be made within such timelines:
Provided further that in case the disclosure is made after the timelines specified under this regulation, the listed entity shall, along with such disclosure provide the explanation for the delay.
The listed entity shall disclose all events or information with respect to subsidiaries which are material for the listed entity- for the purpose of any material event or information of which BYPL is party to such event or information related to transaction entered by BYPL which is material for listed entity.
The listed entity shall disclose all events or information with respect to subsidiaries which are material for the listed entity.
Manner of Disclosure of Agreements entered by BYPL in which R-infra is not the party to agreement by R-infra
1. All the shareholders, promoters, promoter group entities, related parties, directors, key managerial personnel and employees of a listed entity or of its holding, subsidiary and associate company, who are parties to the agreements specified in clause 5A of para A of part A of schedule III to these regulations, shall inform the listed entity about the agreement to which such a listed entity is not a party, within two working days of entering into such agreements or signing an agreement to enter into such agreements:
2. The agreements that subsist as on the date of notification(w.e.f.15.07.2023) of clause 5A to para A of part A of schedule III, the BYPL to the agreements shall inform the listed entity, about the agreement to which such a listed entity is not a party and the listed entity shall in turn disclose all such subsisting agreements to the Stock Exchanges and on its website within the timelines as specified by the Board.
3. The listed entity shall disclose the number of agreements that subsist as on the date of notification of clause 5A to para A of part A of schedule III, their salient features, including the link to the webpage where the complete details of such agreements are available, in the Annual Report for the financial year 2022-23 or for the financial year 2023-24.
Timelines for disclosure of material events or information
The timeline for disclosure of events specified in Part A of Schedule III of the LODR Regulations is given in the table below:
| Para/Sub Para | Events | Timeline for Disclosure |
| A | Events which shall be disclosed without any application of the guidelines for materiality as specified in sub-regulation (4) of regulation (30): | |
| 1. | Acquisition(s) (including agreement to acquire), Scheme of Arrangement (amalgamation/merger/ demerger/restructuring), sale or disposal of any unit(s), division(s), whole or substantially the whole of the undertaking(s) or subsidiary of the listed entity, sale of stake in the associate company of the listed entity or any other restructuring | Within 12 hours |
| 2. | Issuance or forfeiture of securities, split or consolidation of shares, buyback of securities, any restriction on transferability of securities or alteration in terms or structure of existing securities including forfeiture, reissue of forfeited securities, alteration of calls, redemption of securities etc. | Within 12 hours |
| 3. | New Ratings(s) or Revision in Rating(s) | |
| 4. | Outcome of Meetings of the board of directors | Within 30 minutes of conclusion of Board Meeting |
| 5. | Agreements (viz. shareholder agreement(s), joint venture agreement(s), family settlement agreement(s) (to the extent that it impacts management and control of the listed entity), agreement(s)/treaty(ies)/contract(s) with media companies) which are binding and not in normal course of business, revision(s) or amendment(s) and termination(s) thereof | Within 12 hours(for agreements where listed entity is a party);
Within 24 hours (for agreements where listed entity is not a party). |
| 5A. | Agreements entered into by the shareholders, promoters, promoter group entities, related parties, directors, key managerial personnel, employees of the listed entity or of its holding, subsidiary or associate company, among themselves or with the listed entity or with a third party, solely or jointly, which, either directly or indirectly or potentially or whose purpose and effect is to, impact the management or control of the listed entity or impose any restriction or create any liability upon the listed entity, shall be disclosed to the Stock Exchanges, including disclosure of any rescission, amendment or alteration of such agreements thereto, whether or not the listed entity is a party to such agreements:
Provided that such agreements entered into by a listed entity in the normal course of business shall not be required to be disclosed unless they, either directly or indirectly or potentially or whose purpose and effect is to, impact the management or control of the listed entity or they are required to be disclosed in terms of any other provisions of these regulations. |
Within 12 hours * (for agreements where listed entity is a party);
Within 24 hours (for agreements where listed entity is not a party). |
| 6. | Fraud or defaults by a listed entity, its promoter, director, key managerial personnel, senior management or subsidiary or arrest of key managerial personnel, senior management, promoter or director whether occurred within India or abroad. | Within 24 hours |
| 7. | Change in directors, key managerial personnel (Managing Director, Chief Executive Officer, Chief Financial Officer, Company Secretary etc.), senior management, Auditor and Compliance Officer. | Within 12 hours * (except in case resignation);
Within 24 hours (in case of resignation) |
| 7A. | In case of resignation of the auditor of the listed entity, detailed reasons for resignation of auditor, as given by the said auditor. | As soon as possible but not later than 24 hours of receipt of such reasons from the auditor |
| 7B. | Resignation of independent director including reasons for resignation. | Within 7 days from date of such resignation |
| 7C. | Letter of resignation along with detailed reasons for the resignation as given by the key managerial personnel, senior management, Compliance Officer or director. | Within 7 days from date of such resignation |
| 7D. | In case the Managing Director or Chief Executive Officer of the listed entity was indisposed or unavailable to fulfil the requirements of the role in a regular manner for more than forty five days in any rolling period of ninety days, the same along with the reasons for such indisposition or unavailability, shall be disclosed to the stock exchange(s). | Within 12 hours |
| 8. | Appointment or discontinuation of share transfer agent. | Within 12 hours |
| 9. | Resolution plan/ Restructuring in relation to loans/borrowings from banks/financial institutions | Within 24 hours |
| 10. | One time settlement with a bank | Within 24 hours |
| 11. | Winding-up petition filed by any party / creditors. | Within 24 hours |
| 12. | Issuance of notices, call letters, resolutions and circulars sent to shareholders, debenture holders or creditors or any class of them or advertised in the media by the listed entity. | Within 12 hours * |
| 13. | Proceedings of annual and extraordinary general meetings of the listed entity. | Within 12 hours * |
| 14. | Amendments to memorandum and articles of association of listed entity, in brief. | Within 12 hours * |
| 15. | (a) Schedule of analysts or institutional investors meet and presentations made by the listed entity to analysts or institutional investors.
(b) Audio or video recordings and transcripts of post earnings/quarterly calls, by whatever name called, conducted physically or through digital means. |
(a) Atleast 2 working days in Advance (excluding the date of intimation and date of meet)
b) before next trading day or within 24 hours from the conclusion of such calls, whichever is earlier. Transcript of such calls shall be available on website within 5 working days of conclusion of such calls |
| 16. | Events in relation to the corporate insolvency resolution process (CIRP) of a listed corporate debtor under the Insolvency Code. | Within 24 hours |
| 17. | Initiation of Forensic audit: In case of initiation of forensic audit,(by whatever name called), the following disclosures shall be made to the stock exchanges by listed entities:
(a) The fact of initiation of forensic audit along-with name of entity initiating the audit and reasons for the same, if available; (b) Final forensic audit report (other than for forensic audit initiated by regulatory / enforcement agencies) on receipt by the listed entity along with comments of the management, if any. |
Within 12 hours * (if initiated by the listed entity);
Within 24 hours (if initiated by external agency) |
| 18. | Announcement or communication through social media intermediaries or mainstream media by directors, promoters, key managerial personnel or senior management of a listed entity, in relation to any event or information which is material for the listed entity in terms of regulation 30 of these regulations and is not already made available in the public domain by the listed entity. | Within 24 hours |
| 19. | Action(s) initiated or orders passed by any regulatory, statutory, enforcement authority or judicial body against the listed entity or its directors, key managerial personnel, senior management, promoter or subsidiary, in relation to the listed entity, in respect of the following:
(a) search or seizure; or (b) re-opening of accounts under section 130 of the Companies Act, 2013; or (c) investigation under the provisions of Chapter XIV of the Companies Act, 2013; |
Within 24 hours |
| 20. | Action(s) taken or orders passed by any regulatory, statutory, enforcement authority or judicial body against the listed entity or its directors, key managerial personnel, senior management, promoter or subsidiary, in relation to the listed entity, in respect of the following:
(a) suspension; (b) Imposition of fine or penalty; (c) settlement of proceedings; (d) debarment; (e) disqualification; (f) closure of operations; (g) sanctions imposed; (h) warning or caution; or (i) any other similar action(s) by whatever name called; |
Within 24 hours |
| 21. | Voluntary revision of financial statements or the report of the board of directors of the listed entity under section 131 of the Companies Act, 2013. | Within 12 hours |
| B. | Events which shall be disclosed upon application of the guidelines for materiality referred sub-regulation (4) of regulation (30) | |
| 1. | Commencement or any postponement in the date of commencement of commercial production or commercial operations of any unit/division | Within 12 hours |
| 2. | Any of the following events pertaining to the listed entity:
(i) arrangements for strategic, technical, manufacturing, or marketing tie-up; or (ii) adoption of new line(s) of business; or (iii) closure of operation of any unit, division, or subsidiary (entirety or piecemeal) |
Within 12 hours |
| 3. | Capacity addition or product launch. | Within 12 hours |
| 4. | Awarding, bagging/ receiving, amendment or termination of awarded/bagged orders/contracts not in the normal course of business. | Within 24 hours |
| 5. | Agreements (viz. loan agreement(s) or any other agreement(s) which are binding and not in normal course of business) and revision(s) or amendment(s) or termination(s) thereof. | |
| 6. | Disruption of operations of any one or more units or division of the listed entity due to natural calamity (earthquake, flood, fire etc.), force majeure or events such as strikes, lockouts etc. | Within 24 hours |
| 7. | Effect(s) arising out of change in the regulatory framework applicable to the listed entity | Within 24 hours |
| 8. | Pendency of any litigation(s) or dispute(s) or the outcome thereof which may have an impact on the listed entity | Within 24 hours |
| 9. | Frauds or defaults by employees of the listed entity which has or may have an impact on the listed entity | Within 24 hours |
| 10. | Options to purchase securities including any ESOP/ESPS Scheme | |
| 11. | Giving of guarantees or indemnity or becoming a surety, by whatever name called, for any third party. | |
| 12. | Granting, withdrawal, surrender, cancellation or suspension of key licenses or regulatory approvals. | Within 24 hours |
| 13. | Delay or default in the payment of fines, penalties, dues, etc. to any regulatory, statutory, enforcement or judicial authority | |
| C. | Any other information/event viz. major development that is likely to affect business, e.g. emergence of new technologies, expiry of patents, any change of accounting policy that may have a significant impact on the accounts, etc. and brief details thereof and any other information which is exclusively known to the listed entity which may be necessary to enable the holders of securities of the listed entity to appraise its position and to avoid the establishment of a false market in such securities. | Within 24 hours |
| D. | Without prejudice to the generality of para (A), (B) and (C) above, the listed entity may make disclosures of event/information as specified by the Board from time to time | Timeline as specified by the Board. |
Timeline for Disclosure of any continuing Event or information
Any continuing event or information which becomes material pursuant to the notification of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2023 shall be disclosed by the listed entity within thirty days from the date of coming into effect of the amendment regulations, i.e., by August 14, 2023.
Timeline for Disclosure under Regulation 30 A
The timeline for making disclosure under Regulation 30A of the LODR Regulations is given below:
1. Future agreements (Reg. 30A(1)): the parties to the agreements shall inform the listed entity about the agreement to which such a listed entity is not a party within two working days of entering into the agreement or signing an agreement to enter into such agreements.
2. Subsisting agreements (proviso to Reg. 30A(1)):
3. Timeline for the parties to the subsisting agreements to inform the listed entity about the agreement to which such a listed entity is not a party: July 31, 2023.
4. Timeline for the listed entity to disclose all such subsisting agreements to the stock exchange(s) and on its website: August 14, 2023.
Conclusion: Understanding the provisions of Regulation 30 and 30A of SEBI (LODR) Regulation, 2015 is essential for listed entities. These regulations emphasize the disclosure of material events or information, ensuring transparency and providing stakeholders with timely and relevant information. Compliance with the criteria for determining materiality, framing a materiality policy, and adhering to disclosure timelines are crucial for maintaining regulatory compliance and fostering investor confidence. By following these regulations, listed entities can demonstrate good corporate governance practices and enhance transparency in their operations.
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