Listed Companies to provide Impact of COVID-19 on Business, Financials, Ops in Financial Statements : SEBI
Securities and Exchange Board of India has issued a Circular dated May 20, 2020 regarding Advisory on disclosure of the material impact of CoVID–19 pandemic on listed entities under SEBI. Listed entities should endeavour to ensure that all investors have access to timely, adequate and updated information. Towards this end, entities are encouraged to evaluate the impact of the CoVID-19 pandemic on their business, performance and financials, both qualitatively and quantitatively, to the extent possible and disseminate the same.
An illustrative list of information that listed entities may consider disclosing, subject to the application of materiality, is given below:
- Impact of the CoVID-19 pandemic on the business;
- Ability to maintain operations including the factories /units/office spaces functioning and closed down;
- Schedule, for restarting the operations;
- Steps taken to ensure smooth functioning of operations;
- Estimation of the future impact of CoVID-19 on its operations;
- Details of the impact of CoVID-19 on listed entity’s – capital and financial resources, profitability, liquidity position, ability to service debt and other financing arrangements, assets, internal financial reporting and control, supply chain and demand for its products/services;
- Existing contracts/agreements where non-fulfilment of the obligations by any party will have significant impact on the listed entity’s business;
- Other relevant material updates about the listed entity’s business.
The above list is only illustrative and not exhaustive. Further, to have continuous information about the impact of CoVID-19 on operations, listed entities may provide regular updates, as and when there are material developments. Listed entities should not resort to selective disclosures.
Additionally, while submitting financial statements under Regulation 33 of the LODR, listed entities may specify/include the impact of the CoVID-19 pandemic on their financial statements, to the extent possible.
When listed entities disclose material information related to the impact of CoVID-19, they should not resort to selective disclosures, keeping in mind the principles governing disclosures and obligations of a listed entity as prescribed in LODR Regulations, more specifically, having regard to the requirements of Regulation 4(2)(e) of the LODR on disclosure and transparency. Depending on circumstances peculiar to a listed entity and on
account of passage of time, the listed entity shall revisit, refresh, or update its previous disclosures