Policy on Criteria for Determining Materiality of Events / Information

1. Objective

   The Policy is framed in accordance with the requirements of the Regulation 30 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Regulations).

   The objective of the Policy is to determine materiality of events or information of the Company and to ensure that such information is adequately disseminated in pursuance with the Regulations and to provide an overall governance framework for such determination of materiality.

2. Effective Date

   This Policy is effective from the date of approval of the same by the Board of Directors of the Company

3. Definition

   “Act” shall mean the Companies Act, 2013 and the Rules framed thereunder, including any modifications, clarifications, circulars or re-enactment thereof.

   “Board of Directors” or “Board” means the Board of Directors of Pennar Industries Limited, as constituted from time to time.

   “Company” means Pennar Industries Limited.

   “Key Managerial Personnel” mean key managerial personnel as defined in sub-section (51) of section 2 of the Companies Act, 2013;

   “Listing agreement” shall mean an agreement that entered into between a recognized stock exchange and the Company pursuant to Securities and Exchange Board (Listing Obligations and Disclosure Requirements), 2015

   “Material Event” or “Material Information” shall mean such event or information as set out in the Schedule or as may be determined in terms of Clause 3 of the Policy. In the Policy, the words, “material” and “materiality” shall be construed accordingly.

   “Policy” means this Policy on criteria for determining Materiality of events or information and as may be amended from time to time.

   “Regulations” mean Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 including any modifications, clarifications, circulars or re-enactment thereof.

   “Schedule” means a Schedule III of (Listing Obligations and Disclosure Requirements) Regulations, 2015

   Any other term not defined herein shall have the same meaning as defined in the Companies Act, 2013, the Listing Agreement, Regulations or any other applicable law or regulation to the extent applicable to the Company.

4. Guidelines for determining materiality of events or information

   Events / information shall be considered as Material if it meets any of the following criteria:

   1. the omission of an event or information, which is likely to result in discontinuity or alteration of event or information already available publicly; or
   2. The omission of an event or information, which is likely to result in significant market reaction if the said omission came to light at a later date or
   3. The omission of an event or information, whose value or the expected impact in terms of value, exceeds the lower of the following (“Materiality Threshold”):
   1. 2% of turnover, as per the last audited consolidated financial statements;
   2. 2% of net worth, as per the last audited consolidated financial statements, except in case the net worth is negative;
   3. 5% of the average of absolute value of profit or loss after tax, as per the last 3 audited consolidated financial statements. and
   4. any other event/information which is treated as being material in the opinion of the Board of Directors of the Company.

5. Disclosures of events or information

   1. The Company 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:

      1. thirty minutes from the closure of the meeting of the board of directors in which the decision pertaining to the event or information has been taken;
         Provided that in case the meeting of the board of directors closes after normal trading hours of that day but more than three hours before the beginning of the normal trading hours of the next trading day, the listed entity shall disclose the decision pertaining to the event or information, within three hours from the closure of the board meeting:
         Provided further that in case the meeting of the board of directors is being held for more than one day, the financial results shall be disclosed within thirty minutes or three hours, as applicable, from closure of such meeting for the day on which it has been considered
      2. twelve hours from the occurrence of the event or information, in case the event or information is emanating from within the Company;
      3. twenty-four hours from the occurrence of the event or information, in case the event or information is not emanating from within the Company.
         Provided that if all the relevant information, in respect of claims which are made against the listed entity under any litigation or dispute, other than tax litigation or dispute, in terms of sub-paragraph 8 of paragraph B of Part A of Schedule III, is maintained in the structured digital database of the listed entity in terms of provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the disclosure with respect to such claims shall be made to the stock exchange(s) within seventy-two hours of receipt of the notice by the listed entity.
   2. Further such material event shall be uploaded on the company website of the Company viz.,: www.pennarindia.com.

   Provided that in case the disclosure is made alter the timelines specified under this regulation, the Company shall, along with such disclosure(s) provide an explanation for delay.

   3. The Company shall make disclosure of events as specified in Annexure B based on application of guidelines for determining Materiality as per clause 3 of the Policy.
   4. The Company shall make disclosures updating Material developments on a regular basis, till such time the event is resolved/closed, with relevant explanations.
   5. The Company shall provide specific and adequate reply to all queries raised by stock exchange(s) with respect to any events or information and on its own initiative. Further it shall confirm or deny any event or information to stock exchange(s) reported in the media.
   6. In case where an event occurs or information is available with the Company, which has not been indicated in Annexure A or Annexure B, but which may have material effect on it, the Company will make adequate disclosures in regard thereof.

   All the above disclosures would be hosted on the website of the Company for a minimum period of five years and thereafter archived as per Company’s policy for Preservation and Archival of Documents.

6. Authorization to Key Managerial Personnel

   The following Key Managerial Personnel shall severally have the authorization to determine Materiality of any event or information and ensure disclosures of the same are made to stock exchange(s), pursuant to the provisions of this Policy.

   Sl. No.	Name of the Key Managerial Personnel	Designation	Contact details
   1.	Mr. Aditya Rao	Vice-Chairman & Managing Director	Contact No.: 040-40210525 Address: 2-91/14/8/PIL/10 & 11, 7th Floor, Whitefields, Kondapur, Serilingampally, Hyderabad, K.V.Rangareddy - 500084 E-mail ID: adityarao@pennarindustries.com
   2.	Mr. Shrikant Bhakkad	Chief Financial Officer	Contact No.: 040-40210525 Address: 2-91/14/8/PIL/10 & 11, 7th Floor, Whitefields, Kondapur, Serilingampally, Hyderabad, K.V.Rangareddy - 500084 E-mail ID: shri@pebspennar.com
   3.	Mr. Mirza Mohammed Ali Baig	Company Secretary & Compliance Officer	Contact No. 040-40210525 Address: 2-91/14/8/PIL/10 & 11, 7th Floor, Whitefields, Kondapur, Serilingampally, Hyderabad, K.V.Rangareddy - 500084 E-mail ID: mirza.baig@pennarindia.com

7. Amendments

   The Board may subject to the applicable laws amend any provision(s) or substitute any of the provision(s) with the new provision(s) or replace the Policy entirely with a new Policy. However, no such amendment or modification shall be inconsistent with the applicable provisions of any law for the time being in force.

8. Scope and Limitation

   In the event of any conflict between the provisions of this Policy and the Listing Agreement; Companies Act, 2013; Regulations or any other statutory enactments, rules, the provisions of such Listing Agreement / Companies Act, 2013 or statutory enactments, rules shall prevail over this Policy and the part(s) so repugnant shall be deemed to severed from the Policy and the rest of the Policy shall remain in force.

9. Dissemination of Policy

   This Policy shall be hosted on the website of the Company and address of such web link thereto shall be provided in the Annual Report of the Company. This Policy shall also be hosted on Company’s website.

   Annexure A

Annexure A

Events which shall be disclosed without any application of the guidelines for Materiality:

1. Acquisition(s) (including agreement to acquire), Scheme of Arrangement (amalgamation/ merger/ demerger/restructuring), or sale or disposal of any unit(s), division(s) or subsidiary of the Company or any other restructuring;

   1. “Acquisition”: Shall mean-

      1. acquiring control, whether directly or indirectly; or,

      2. acquiring or agreeing to acquire shares or voting rights in, a company, whether directly or indirectly, such that-

         1. the Company holds shares or voting rights aggregating to twenty per cent or more of the shares or voting rights in the said company, or;
         2. there has been a change in holding from the last disclosure and such change exceeds five per cent of the total shareholding or voting rights in the said company.
         3. the cost of acquisition or the price at which the shares are acquired exceeds the threshold specified in sub-clause (c) of clause (i) of sub-regulation (4) of regulation 30. Provided that acquisition of shares or voting rights aggregating to five percent or more of the shares or voting rights in an unlisted company and any change in holding from the last disclosure made under this proviso exceeding two per cent of the total shareholding or voting rights in the said unlisted company shall be disclosed on a quarterly basis in the format as may be specified.

   2. “Sale or disposal of subsidiary” and “sale of stake in associate company” shall include-

      1. an agreement to sell or sale of shares or voting rights in a company such that the company ceases to be a wholly owned subsidiary, a subsidiary or an associate company of the listed entity; or
      2. an agreement to sell or sale of shares or voting rights in a subsidiary or associate company such that the amount of the sale exceeds the threshold specified in sub-clause (c) of clause (i) of sub-regulation (4) of regulation 30.
   3. “undertaking” and “substantially the whole of the undertaking” shall have the same meaning as given under section 180 of the Companies Act, 2013.
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.;
3. New Rating(s) or Revision in Rating(s);

4. Outcome of Meetings of the Board of Directors:

   1. dividends recommended or declared or the decision to pass any dividend and the date on which dividend shall be paid/dispatched;
   2. any cancellation of dividend with reasons thereof;
   3. the decision on buyback of securities;
   4. the decision with respect to fund raising proposed to be undertaken including by way of issue of securities (excluding security receipts, securitized debt instruments or money market instruments regulated by the Reserve Bank of India), through further public offer, rights issue, American Depository Receipts/ Global Depository Receipts/ Foreign Currency Convertible Bonds, qualified institutions placement, debt issue, preferential issue or any other method;
   5. increase in capital by issue of bonus shares through capitalization including the date on which such bonus shares shall be credited/dispatched;
   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;
   7. short particulars of any other alterations of capital, including calls;
   8. financial results;
   9. decision on voluntary delisting by the Company from stock exchange(s).

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 Company), 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;

   5A. Agreements entered into by the shareholders, promoters, promoter group entities, related parties, directors, KMPs, employees of the Company or of its subsidiary or associate company, among themselves or with the Company 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 Company or impose any restriction or create any liability upon the Company, shall be disclosed to the Stock Exchanges, including disclosure of any rescission, amendment or alteration of such agreements thereto, whether or not the Company is a party to such agreements:

   Provided that such agreements entered into by the Company 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 Company or they are required to be disclosed in terms of any other provisions of these Regulations.

   Explanation: For the purpose of above, the term “directly or indirectly” includes agreements creating obligation on the parties to such agreements to ensure that the Company shall or shall not act in a particular manner.

6. Fraud or defaults by the Company, its promoter, director, KMPs, senior management or subsidiary or arrest of KMPs, senior management, promoter or director of the Company, whether occurred within India or abroad;

   For the purpose of this paragraph:

   1. “Fraud” shall include fraud as defined under Regulation 2(1)(c) of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003.

   2. “Default” shall mean non-payment of the interest or principal amount in full on the date when the debt has become due and payable.

      - In case of revolving facilities like cash credit, an entity would be considered to be in ‘default’ if the outstanding balance remains continuously in excess of the sanctioned limit or drawing power, whichever is lower, for more than 30 days.

      - Default by a promoter, director, KMP, senior management, subsidiary shall mean default which has or may have an impact on the listed entity.

      - Fraud by senior management, other than who is promoter, director or key managerial personnel, shall be required to be disclosed only if it is in relation to the listed entity.

7. Change in Directors, KMP, Senior Management, Auditor and Compliance Officer;

   7A. In case of resignation of the auditor of the Company, detailed reasons for resignation of auditor, as given by the said auditor, shall be disclosed by the Company to the stock exchanges as soon as possible but not later than 24 hours of receipt of such reasons from the auditor.

   7B. In case of resignation of an independent director of the Company, within 7 days from the date of resignation, the following disclosures shall be made to the stock exchanges by the Company:

   1. The letter of resignation along with detailed reasons for the resignation as given by the said director.
   2. Names of listed entities in which the resigning director holds directorships, indicating the category of directorship and membership of board committees, if any.
   3. The independent director shall, along with the detailed reasons, also provide a confirmation that there is no other material reasons other than those provided.
   4. The confirmation as provided by the independent director above shall also be disclosed by the Company to the stock exchanges along with the disclosures as specified in sub-clause (i) and (ii) above.

   7C. In case of resignation of KMPs, senior management, Compliance Officer or director other than an independent director; the letter of resignation along with detailed reasons for the resignation as given by the KMPs, senior management, Compliance Officer or director shall be disclosed to the stock exchanges by the Company within 7 days from the date that such resignation comes into effect.

   7D. In case Executive Director remain indisposed or unavailable to fulfil the requirements of the role in a regular manner for more than 45 days in any rolling period of 90 days, the same along with the reasons for such indisposition or unavailability, shall be disclosed to the stock exchange(s).”

8. Appointment or discontinuation of share transfer agent;
9. Resolution plan/ Restructuring in relation to loans/borrowings from banks/financial institutions including the following details: (i) Decision to initiate resolution of loans/borrowings; (ii) Signing of Inter-Creditors Agreement (ICA) by lenders: (iii) Finalization of Resolution Plan; (iv) Implementation of Resolution Plan; (v) Salient features, not involving commercial secrets, of the resolution/ restructuring plan as decided by lenders.;
10. One-time settlement with a bank;
11. winding-up petition filed by any party /creditors;
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 Company;
13. Proceedings of Annual and extraordinary general meetings of the Company;
14. Amendments to memorandum and articles of association of Company, in brief;

15. Schedule of Analyst or institutional investor meet:

    1. 1. Schedule of analysts or institutional investors meet to be given at least two working days in advance (excluding the date of the intimation and the date of the meet);
       2. Presentations prepared by the listed entity for analysts or institutional investors meet, post earnings or quarterly calls shall be disclosed to the recognized stock exchanges prior to beginning of such events.

       Explanation I: For the purpose of this clause ‘meet’ shall mean group meetings or group conference calls conducted physically or through digital means.

       Explanation II: Disclosure of names in the schedule of analysts or institutional investors meet shall be optional for the listed entity.

    2. Audio recordings, video recordings, if any, and transcripts of post earnings or quarterly calls, by whatever name called, conducted physically or through digital means, in the following manner:

       1. The audio recordings shall be promptly made available on the website and in any case, before the next trading day or within twenty-four hours from the conclusion of such calls, whichever is earlier;
       2. the video recordings, if any, shall be made available on the website within forty-eight hours from the conclusion of such calls;
       3. the transcripts of such calls shall be made available on the website along with simultaneous submission to recognized stock exchanges within five working days of the conclusion of such calls.

16. The following events in relation to the corporate insolvency resolution process (CIRP) of a listed corporate debtor under the Insolvency Code:

    1. Filing of application by the corporate applicant for initiation of CIRP, also specifying the amount of default;
    2. Filing of application by financial creditors for initiation of CIRP against the corporate debtor, also specifying the amount of default;
    3. Admission of application by the Tribunal, along with amount of default or rejection or withdrawal, as applicable
    4. Public announcement made pursuant to order passed by the Tribunal under section 13 of Insolvency Code;
    5. List of creditors as required to be displayed by the corporate debtor under regulation 13(2)(c) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016;
    6. Appointment/ Replacement of the Resolution Professional;
    7. Prior or post-facto intimation of the meetings of Committee of Creditors;
    8. Brief particulars of invitation of resolution plans under section 25(2)(h) of Insolvency Code in the Form specified under regulation 36A(5) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016;
    9. Number of resolution plans received by Resolution Professional;
    10. Filing of resolution plan with the Tribunal;
    11. Approval of resolution plan by the Tribunal or rejection, if applicable;

    12. Specific features and details of the resolution plan as approved by the Adjudicating Authority under the Insolvency Code, not involving commercial secrets, including details such as:

        1. Pre and Post net-worth of the company;
        2. Details of assets of the company post CIRP;
        3. Details of securities continuing to be imposed on the companies' assets;
        4. Other material liabilities imposed on the company;
        5. Detailed pre & post shareholding pattern assuming 100% conversion of convertible securities;
        6. Details of funds infused in the company, creditors paid-off;
        7. Additional liability on the incoming investors due to the transaction, source of such funding etc.;
        8. Impact on the investor – revised P/E, RONW ratios etc.;
        9. Names of the new promoters, KMPs, if any and their past experience in the business or employment. In case where promoters are companies, history of such company and names of natural persons in control;
        10. Brief description of business strategy.
    13. Any other material information not involving commercial secrets.
    14. Proposed steps to be taken by the incoming investor/acquirer for achieving the MPS;
    15. Quarterly disclosure of the status of achieving the MPS;
    16. The details as to the delisting plans, if any approved in the resolution plan.

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 the Company:

    1. The fact of initiation of forensic audit along-with name of entity initiating the audit and reasons for the same, if available;
    2. Final forensic audit report (other than for forensic audit initiated by regulatory / enforcement agencies) on receipt by the Company along with comments of the management, if any.
       Explanation - For the purpose of this sub-paragraph, forensic audit refers to the audits, by whatever name called, which are initiated with the objective of detecting any mis-statement in financial statements, mis-appropriation, siphoning or diversion of funds and does not include audit of matters such as product quality control practices, manufacturing practices, recruitment practices, supply chain process including procurement or other similar matters that would not require any revision to the financial statements disclosed by the listed entity.
18. Announcement or communication through social media intermediaries or mainstream media by directors, promoters, KMP or senior management of the Company, in relation to any event or information which is material for the Company in terms of regulation 30 of these regulations and is not already made available in the public domain by the Company.
    Explanation - “social media intermediaries” shall have the same meaning as defined under the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.

19. Action(s) initiated or orders passed by any regulatory, statutory, enforcement authority or judicial body against the Company or its directors, KMP, senior management, promoter or subsidiary, in relation to the Company, in respect of the following:

    1. Search or seizure; or
    2. Re-opening of accounts under section 130 of the Companies Act, 2013; or

    3. investigation under the provisions of Chapter XIV of the Companies Act, 2013; along with the following details pertaining to the actions(s) initiated, taken or orders passed:

       1. name of the authority;
       2. nature and details of the action(s) taken, initiated or order(s) passed;
       3. date of receipt of direction or order, including any ad-interim or interim orders, or any other communication from the authority;
       4. details of the violation(s)/contravention(s) committed or alleged to be committed;
       5. impact on financial, operation or other activities of the listed entity, quantifiable in monetary terms to the extent possible.

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:

    1. suspension;
    2. imposition of fine or penalty;
    3. settlement of proceedings;
    4. debarment;
    5. disqualification;
    6. closure of operations;
    7. sanctions imposed;
    8. warning or caution; or

    9. any other similar action(s) by whatever name called; along with the following details pertaining to the actions(s) taken or orders passed:

       1. name of the authority;
       2. nature and details of the action(s) taken or order(s) passed;
       3. date of receipt of direction or order, including any ad-interim or interim orders, or any other communication from the authority;
       4. details of the violation(s)/contravention(s) committed or alleged to be committed;

       5. impact on financial, operation or other activities of the listed entity, quantifiable in monetary terms to the extent possible.

          [Explanation – Imposition of fine or penalty shall be disclosed in the following manner along with the details pertaining to the action(s) taken or orders passed as mentioned in the sub-paragraph:

          1. disclosure of fine or penalty of rupees one lakh or more imposed by sectoral regulator or enforcement agency and fine or penalty of rupees ten lakhs or more imposed by other authority or judicial body shall be disclosed within twenty four hours.
          2. disclosure of fine or penalty imposed which are lower than the monetary thresholds specified in the clause (i) above on a quarterly basis in the format as may be specified.]
21. Voluntary revision of financial statements or the report of the board of directors of the Company under section 131 of the Companies Act, 2013.