SEBI Circular: Requiring listed companies to disclose material impact of CoVID–19 pandemic
SEBI has earlier today, May 20 issued a circular (“SEBI Circular”) requiring listed companies to disclose material impact of CoVID–19 pandemic on listed entities under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LoDR”).
The SEBI has advised / encouraged listed entities 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, if any, 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 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;
demand for its products/services;
Existing contracts/agreements where non-fulfillment 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.
As a matter of principle, it has been advised that listed entities 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. The listed entities have also been advised to provide regular updates, as and when there are material developments.
It has also been advised by SEBI that, while submitting financial statements under Regulation 33 of the SEBI LoDR, listed entities may specify/include the impact of the CoVID-19 pandemic on their financial statements, to the extent possible.
