TMI BlogDisclosure of material events / information by listed entities under Regulations 30 and 30A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015X X X X Extracts X X X X X X X X Extracts X X X X ..... d July 11, 2023 ( Master Circular ). 2. In order to bring more transparency and to ensure timely disclosure of material events / information by listed entities, the proposal to amend LODR Regulations was deliberated by the Primary Market Advisory Committee (PMAC) of SEBI and subsequently placed for public consultation for comment. Based on the above, pursuant to approval by the Board, amendments to the LODR Regulations were notified (link). 3. Accordingly, this circular consists of four annexures with respect to disclosure requirements under regulations 30 and 30A (inserted by the aforesaid amendment) of the LODR Regulations which are given below: i. ANNEXURE I specifies the details that need to be provided while disclosing events given in Part A of Schedule III (Annexure 18 to the Master Circular). ii. ANNEXURE II specifies the timeline for disclosing events given in Part A of Schedule III . iii. ANNEXURE III provides guidance on when an event / information can be said to have occurred ( Annexure 19 to the Master Circular ). iv. ANNEXURE IV provides guidance on the criteria for determination of materiality of events / information. 4. The Master Circular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r form and details of the same; h) cost of acquisition and/or the price at which the shares are acquired; i) percentage of shareholding / control acquired and / or number of shares acquired; j) brief background about the entity acquired in terms of products/line of business acquired, date of incorporation, history of last 3 years turnover, country in which the acquired entity has presence and any other significant information (in brief); 1.2. Amalgamation/ Merger: a) name of the entity(ies) forming part of the amalgamation/merger, details in brief such as, size, turnover etc.; b) whether the transaction would fall within related party transactions? If yes, whether the same is done at arm s length ; c) area of business of the entity(ies); d) rationale for amalgamation/ merger; e) in case of cash consideration amount or otherwise share exchange ratio; f) brief details of change in shareholding pattern (if any) of listed entity. 1.3. De-merger: a) brief details of the division(s) to be demerged; b) turnover of the demerged division and as percentage to the total turnover of the listed entity in the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existing securities including forfeiture, reissue of forfeited securities, alteration of calls, redemption of securities etc. 2.1. Issuance of securities: a) type of securities proposed to be issued (viz. equity shares, convertibles etc.); b) type of issuance (further public offering, rights issue, depository receipts (ADR/GDR), qualified institutions placement, preferential allotment etc.); c) total number of securities proposed to be issued or the total amount for which the securities will be issued (approximately); d) in case of preferential issue the listed entity shall disclose the following additional details to the stock exchange(s) : i. names of the investors; ii. post allotment of securities - outcome of the subscription, issue price / allotted price (in case of convertibles), number of investors; iii. in case of convertibles - intimation on conversion of securities or on lapse of the tenure of the instrument; e) in case of bonus issue the listed entity shall disclose the following additional details to the stock exchange(s): i. whether bonus is out of free reserves created out of profits or share premium accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s; h) any cancellation or termination of proposal for issuance of securities including reasons thereof. 2.2. Split/consolidation of shares: a) split/consolidation ratio; b) rationale behind the split/consolidation; c) pre and post share capital authorized, paid-up and subscribed; d) expected time of completion; e) class of shares which are consolidated or subdivided; f) number of shares of each class pre and post split or consolidation; g) number of shareholders who did not get any shares in consolidation and their pre-consolidation shareholding. 2.3. Buy back of securities: a) number of securities proposed for buyback; b) number of securities proposed for buyback as a percentage of existing paid up capital; c) buyback price; d) actual securities in number and percentage of existing paid up capital bought back; e) pre post shareholding pattern. 2.4. Any restriction on transferability of securities: a) authority issuing attachment or prohibitory orders; b) brief details and reasons for attachment or prohibitory orders; c) name of registered holders against whom restr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capitalization including the date on which such bonus shares would be credited/dispatched; 4.6. reissue of forfeited shares or securities, or the issue of shares or securities held in reserve for future issue or the creation in any form or manner of new shares or securities or any other rights, privileges or benefits to subscribe to; 4.7. short particulars of any other alterations of capital, including calls; 4.8. financial results; 4.9. decision on voluntary delisting by the listed entity from stock exchange(s); The intimation of outcome of meeting of the board of directors shall also contain the time of commencement and conclusion of the 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: 5.1. name(s) of parties with whom the agreement is entered; 5.2. purpose of entering into the agreement; 5.3. shareholding, if any, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the counterparties (including name and relationship with the listed entity); b) if listed entity is not a party to the agreement, i. name of the party entering into such an agreement and the relationship with the listed entity; ii. details of the counterparties to the agreement (including name and relationship with the listed entity); iii. date of entering into the agreement. c) purpose of entering into the agreement; d) shareholding, if any, in the entity with whom the agreement is executed; e) significant terms of the agreement (in brief); f) extent and the nature of impact on management or control of the listed entity; g) details and quantification of the restriction or liability imposed upon the listed entity; h) whether, the said parties are related to promoter/promoter group/ group companies in any manner. If yes, nature of relationship; i) whether the transaction would fall within related party transactions? If yes, whether the same is done at arm s length ; j) in case of issuance of shares to the parties, details of issue price, class of shares issued; k) any other disclosures related to such ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in sub-para 7B of Para A of Part A of Schedule III of LODR Regulations. 7C. As specified in sub-para 7C of Para A of Part A of Schedule III of LODR Regulations. 7D. As specified in sub-para 7D of Para A of Part A of Schedule III of LODR Regulations. 8. Appointment or discontinuation of share transfer agent: 8.1. reason for appointment or discontinuation; 8.2. date on which above would become effective. 9. As specified in sub-para 9 of Para A of Part A of Schedule III of LODR Regulations. 10. One time settlement (OTS) with a Bank: 10.1. reasons for opting for OTS; 10.2. brief summary of the OTS. 11. Winding-up petition filed by any party / creditors: 11.1. reasons for such a petition; 11.2. impact of such petition on listed entity. 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 and the following: 12.1. date of notice/call letters/resolutions etc.; 12.2. brief details viz. agenda (if any) proposed to be taken up, resolution to be passed, manner of appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in brief; viii. whether the acquisition would fall within related party transactions and whether the promoter/ promoter group/ group companies have any interest in the entity being acquired? If yes, nature of interest and details thereof and whether the same is done at arm s length ; ix. size of the entity(ies); x. rationale and benefit expected. b) In the event that any such arrangement is called off for any reason, the same shall be disclosed along with the reasons for calling off the proposal. 2.2. Adoption of new line(s) of business: a) industry or area to which the new line of business belongs to; b) expected benefits; c) estimated amount to be invested. 2.3. Closure of operations of any unit, division or subsidiary (in entirety or in piecemeal): a) date of such binding agreement, if any, entered for sale of such unit/division, if any; b) amount percentage of turnover or revenue or income and net worth of the listed entity contributed by such unit or division during the last financial year; c) date of closure or estimated time of closure; d) reasons for closure. 3. Capacity addition or pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ? If yes, whether the same is done at arm s length . 4.3. Amendment or termination of orders/contracts: a) name of parties to the order(s)/contract(s); b) nature of the order(s)/contract(s); c) date of execution of the order(s)/contract(s) d) details of amendment or reasons for terminations and impact thereof (to the extent possible); 5. Agreements (viz. loan agreement(s) or any other agreement(s) which are binding and not in normal course of business, revision(s) or amendment(s) and termination(s) thereof: Only important terms and conditions which may be as under needs to be disclosed: a) name(s) of parties with whom the agreement is entered; b) purpose of entering into the agreement; c) size of agreement; d) shareholding, if any, in the entity with whom the agreement is executed; e) significant terms of the agreement (in brief) special rights like right to appoint directors, first right to share subscription in case of issuance of shares, right to restrict any change in capital structure etc.; f) whether, the said parties are related to promoter/promoter group/ group companies in any manner. If yes, nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e listed entity shall notify the stock exchange(s) upon it or its director or its key management personnel or its senior management or its promoter or its subsidiary becoming party to any litigation, assessment, adjudication, arbitration or dispute in conciliation proceedings or upon institution of any litigation, assessment, adjudication, arbitration or dispute including any ad-interim or interim orders passed against or in favour of the listed entity, the outcome of which can reasonably be expected to have an impact. In case the amount involved in ongoing litigations or disputes with an opposing party become material on a cumulative basis, then the same shall also be required to be disclosed to the stock exchange(s). 8.1. At the time of becoming the party: a) brief details of litigation viz. name(s) of the opposing party, court/ tribunal/agency where litigation is filed, brief details of dispute/litigation; b) expected financial implications, if any, due to compensation, penalty etc.; c) quantum of claims, if any; 8.2. Regularly till the litigation is concluded or dispute is resolved: a) the details of any change in the status and / or any deve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or surety was given; b) whether the promoter/ promoter group/ group companies have any interest in this transaction? If yes, nature of interest and details thereof and whether the same is done at arm s length ; c) brief details of such guarantee or indemnity or becoming a surety viz. brief details of agreement entered (if any) including significant terms and conditions, including amount of guarantee; d) impact of such guarantees or indemnity or surety on listed entity. The above details for giving of guarantees or indemnity or becoming a surety, by whatever name called, including comfort letter, side letter, etc., shall also be required to be disclosed in case the amount involved in terms of outstanding guarantees, indemnity or surety for a third party become material on a cumulative basis. 12. Granting, withdrawal, surrender, cancellation or suspension of key licenses or regulatory approvals: a) name of the regulatory or licensing authority; b) brief details of the approval/license obtained/ withdrawn/ surrendered; c) impact/relevance of such approval/license to the listed entity; d) withdrawal/cancellation or suspension of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, the timeline for disclosure of events specified in Part A of Schedule III of the LODR Regulations is given in the table below: Table I: Timeline for disclosure of events specified in Part A of Schedule III of the LODR Regulations 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 secur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Timeline as specified in sub-para 7A of Para A of Schedule III. 7B. Resignation of independent director including reasons for resignation. Timeline as specified in sub-para 7B of Para A of Schedule III. 7C. Letter of resignation along with detailed reasons for the resignation as given b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Within 12 hours * (for agreements where listed entity is a party); Within 24 hours (for agreements where listed entity is not a party). 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement or signing an agreement to enter into such agreements. ii. Subsisting agreements (proviso to Reg. 30A(1)): a. 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. b. Timeline for the listed entity to disclose all such subsisting agreements to the stock exchange(s) and on its website: August 14, 2023. 4. As specified in sub-regulation (4) of LODR Regulations, 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. ANNEXURE III GUIDANCE ON WHEN AN EVENT / INFORMATION CAN BE SAID TO HAVE OCCURRED FOR DISCLOSURES UNDER REGULATION 30 OF THE LODR REGULATIONS 1. The listed entity may be confronted with the question as to when an event/information can be said to have occurred for making disclosures under regulation 30 read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st audited consolidated financial statements of the listed entity, except in case the arithmetic value of the net worth is negative; iii. 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; 2. In respect to the above, it is clarified that the average of absolute value of profit or loss is required to be considered by disregarding the sign (positive or negative) that denotes such value as the said value / figure is required only for determining the threshold for materiality of the event and not for any commercial consideration. The following illustration is provided in this regard for clarity: Table I: Illustration for calculation of average of absolute value of profit or loss after tax Amount in Rs. crore) Profit/loss after tax Absolute value of profit/loss after tax Average of absolute value of profit /loss after tax for the 3 years FY 2020-21 (20) 20 FY ..... X X X X Extracts X X X X X X X X Extracts X X X X
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