Vide SEBI Circular[1] , Industry Standard Forum has prescribed a materiality threshold to the standardised list prescribed vide an erstwhile Master Circular. Accordingly, with an objective of facilitating ease of doing business by the listed entities, Section III-B of the Master Circular read with Para 7 of the SEBI Circular dated June 26, 2025 is modified as under; the additional change is with reference to smaller RPT which requires reduced disclosure.
Details of the paragraph to be modified | Threshold for the approval |
Paragraph 4 under Part A of Section III-B of the Master Circular shall stand substituted by the following paragraph: The listed entity shall provide the audit committee with the information as specified in the Industry Standards on “Minimum information to be provided to the Audit Committee and Shareholders for approval of Related Party Transactions”, while placing any proposal for review and approval of an RPT” | Provided that if a transaction with a related party, whether individually or taken together with previous transaction(s) during a financial year (including transaction(s) which are approved by way of ratification), do not exceed 1% of annual consolidated turnover of the listed entity as per the last audited financial statements of the listed entity or Rupees Ten Crore, whichever is lower, the listed entity shall provide ‘Minimum information to the Audit Committee or Shareholders (as the case may be) for approval of Related Party Transactions’ specified in Annexure-13A of this circular. Provided further that the above requirements, shall not be applicable to transaction(s) with a related party to be entered into individually or taken together with previous transactions during a financial year (including which are approved by way of ratification) which does not exceed Rs. One Crore.” |
Paragraph 6 under Part B of Section III-B of the Master Circular shall stand substituted by the following paragraph: “The notice being sent to the shareholders seeking approval for any RPT shall, in addition to the requirements under the Companies Act, 2013, include the information as part of the explanatory statement as specified in the Industry Standards on “Minimum information to be provided to the Audit Committee and Shareholders for approval of Related Party Transactions” |
For detailed discussion, please feel free to contact devadhaantu@devadhaantu.in
_____________________________________________________________
[1] SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/135, dated October 13, 2025
