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SEBI directs Listed Entities to Disclose Investors Impact of COVID-19 on Businesses [Read Circular]

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The Securities and Exchange Board of India (SEBI) on Wednesday asked companies to tell investors the impact of COVID-19 on their businesses.

The capital markets regulator said that the companies will now have to evaluate and disclose the impact of the pandemic on their performance and financials, both qualitatively and quantitatively.

“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 said in a circular.

The coronavirus pandemic and the consequent lockdown restrictions imposed by national governments have impacted businesses not only in India but all over the world so SEBI has granted several relaxations to listed entities in terms of timelines for filing of various reports or disclosures under Listing Obligation and Disclosure Requirements (LODR ) Regulations.

The disclosures will have to cover the impact on capital and financial resources, profitability, liquidity, ability to service debt and other financial liabilities, assets, internal financial controls, supply chain, demand for products and services, existing contracts that are not being fulfilled and impacting the balance sheet of the company, and most importantly, assessment of the future impact on the business due to coronavirus.

Among others, SEBI suggested that listed entities should disclose about steps taken to ensure smooth functioning of operations, estimation of the future impact of COVID-19 on operations, details of the impact of the pandemic 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 as well as services.

“Depending on circumstances peculiar to a listed entity and on account of the passage of time, the listed entity needs to update its previous disclosures,” the circular added.

“The circular shall come into force with immediate effect,” SEBI said.

To Read the full text of the Circular CLICK HERE
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