SEBI Asks Listed Companies to Disclose Financial Impact of Lockdown on Business

Securities and Exchange Board Of India (Sebi) has asked listed companies to disclose the expected impact of lockdown on business revenues and profits. Lockdown has resulted in distortions in the market due to the unavailability of the operations information of a company.
This aims to assist investors in assessing the damage that happened to business because of disruption in business operations.
SEBI said on Wednesday in a circular,” It is very significant for all listed company to ensure all the information about the impact of COVID-19 or lockdown imposition or extension on a company and how much these events affecting company’s operation; should be communicated in a logical and timely manner to investors and to its stakeholders”.
In present scenarios, rules have been made making compulsory for companies to disclose any disruption in the availability of materials that have any effect on the company’s performance or operations due to natural calamity, Force majeure, and other events.
The Exchange said most of the companies have announced about shutting down operations due to COVID-19 pandemic and extending lockdowns. However, the number of companies disclosed the financial impact is Small scale.
Companies also need to assess and specify the impact of these events on their ability to service debt along with assets, misc. financial arrangements, supply chain, demand for goods, and services in their financial statements.
Zerick Dastur, founder of Zerick Dastur Advocates and Solicitors said, “The objective of regulation seems to build a regulatory framework consisting of transparency, clarity, uniformity, consistency in a disclose based regime”.

Leave a Reply

Your email address will not be published. Required fields are marked *