In view of the coronavirus-led lockdown restrictions, markets regulator Sebi has asked listed companies to disclose to investors and stakeholders the impact of coronavirus pandemic on their businesses in a timely and cogent manner.
Listed entities should evaluate the impact of COVID-19 pandemic on their business, performance and financials, both qualitatively and quantitatively, to the extent possible and disseminate the same to investors, the Securities and Exchange Board of India (Sebi) said in a circular on Wednesday.
The Sebi said that order will come into force with immediate effect, while it advised the stock exchanges (BSE and NSE) to bring the provisions of this circular to the notice of all listed entities and also disseminate the same on their websites.
The list of information that listed entities have been asked to disclose, subject to the application of materiality, include impact of the COVID-19 outbreak on the business; ability to maintain operations including the factories/units/office spaces functioning and closed down; schedule, if any, for restarting the operations; steps taken to ensure smooth functioning of operations; estimation of the future impact of coronavirus on its operations.
Sebi also suggested companies to provide details on capital and financial resources, profitability, liquidity position, assets, ability to service debt and other financing arrangements, internal financial reporting and control, supply chain and demand for its products and services.
Sebi observed that many listed entities have made disclosures under LODR (Listing Obligation and Disclosure Requirements) Regulations, primarily intimating shutdown of operations owing to the pandemic and resultant lockdowns.
Some listed entities have provided information relating to actions taken towards sanitation, safety, among others. However, the number of entities that have disclosed the financial impact is small, it added.
Further, to have continuous information about the impact of COVID-19 on operations, listed entities have been asked to provide regular updates, as and when there are material developments. Depending on circumstances, the companies shall revisit, refresh, or update its previous disclosures time to time, it said.
According to Sebi, lockdown and disruption is beyond the control of the entities and such events can lead to distortions in the market due to the gaps in information available about the operations of a listed firm. Hence, it is important for a listed entity to ensure that all available information about the impact of these events on the company and its operations is communicated in a timely and cogent manner to its investors and stakeholders, it said.
In view of the coronavirus outbreak, Sebi has granted several relaxations to listed entities in terms of timelines for filing of various reports or disclosures under LODR Regulations.