|Dr. Reddy’s Laboratories Limited|
Policy on Determination of Materiality
(as approved by the Board on December 23, 2015)
1. Purpose and Scope
The policy on determination of materiality is mandated by the provisions of Regulation 30 of Chapter IV of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR”). The Company has to make disclosure of certain events based on the application of the guidelines for materiality.
The purpose of this document is to enable Dr. Reddy’s Laboratories Limited and all its subsidiaries (the “Company”) to disclose any material events / information in accordance with the provisions of LODR.
The policy is intended to provide guidance to the Board of Directors, Key Managerial Personnel’s (KMPs) and officers working in the Company, on determination of materiality. The policy lays down responsibility of the Company to make public such events / information which may materially affect its performance and securities prices.
The policy is framed to identify, categorize, review and disclose to the Stock Exchanges, the details of event / information which are considered material and may have a bearing on the performance of the Company / materially affect the securities price of the Company.
2. Guidelines for materiality
Information is material if omitting it or misstating it could influence decisions that users make on the basis of financial information about the reporting entity.
Materiality will be determined on case to case basis depending on specific facts and circumstances relation to the event / information. Further determination of materiality is primarily driven by qualitative factors.
In addition to the qualitative factors, the Company also considers quantitative factors mentioned below in evaluating whether any particular transaction is material. Examples of such quantitative factors include the following:
The Company shall determine the events which are classified under different categories to be material and / or other events having a bearing on the performance of the Company and on the securities prices of the Company, which needs to be disclosed to the stock exchanges as per the time span specified against each category.
Category A :- Event / information considered Material in view of the Board of Directors which needs to be disclosed to the stock exchanges as soon as possible but not later than 24 hours from the occurrence of the event / decision taken at the Board Meeting without any application of the guidelines for materiality are :
Category B :- Events / information considered Material in view of the Board of Directors which needs to be disclosed to the stock exchanges within 30 minutes of the closure of the Board Meeting without any application of the guidelines for materiality are :
Category C :- Miscellaneous events / information which shall be disclosed upon application of the guidelines for materiality are :
Unless otherwise as specified in law, the disclosure shall be made as per the Company’s Internal & External disclosure processes.
Any other event / information that may be considered by the Board / KMPs of the Company as material and may need the Company to appraise its position and to avoid the establishment of a false market.
The Board authorises the KMPs to disclose such other events or information that in their wisdom may be necessary, to the stock exchange.
4. Authority for determination of Materiality of events / information.
Chairman, CEO & Managing Director and Chief Financial Officer are hereby severally authorised to determine whether an event / information in relation to the Company is material or not and about its time line for disclosure based on the category of information as specified above to the stock exchanges. Such determination would be required to be communicated to the Company Secretary, head of Corporate Communication and head of Investor Relations for taking appropriate action.
5. Website Updation and Archival
The Company shall host / update all disclosures made under the regulations to the stock exchanges on its website and shall continue to host in the website for a minimum period of five years and thereafter these disclosures may be handled as per Company’s Archival process / policy, as applicable.
The Company shall provide future material developments on any event that may have been earlier communicated to the Stock Exchanges.
6. Authorisation to KMPs to report and clarify any event or information.
Chairman, CEO & Managing Director, Chief Financial Officer and Company Secretary are hereby severally authorised to report and clarify any event or information to the Stock Exchanges.
7. Review of the Policy
This policy shall be subject to review as may be deemed necessary to comply with any statutory modifications.
All the words and expressions used in this Policy, shall have meaning respectively assigned to them under the LODR and in the absence of its definition or explanation therein, as per the Companies Act, 2013 and the Rules, Notifications and Circulars made/issued thereunder, as amended from time to time. The disclosures would be made in terms of the guidance note on Regulation 30 of the LODR.
Pursuant to Regulation 30(5) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 the contact details of the persons authorised for determining the materiality of any event or information: