COVID-19 AND ITS IMPACT ON LISTED COMPANIES

The coronavirus disease 2019 (COVID – 19) has brought with it a wave of slowdown for the economy of mostly all the countries across the globe. The listed companies should be aware of few additional compliance requirements as per the Securities and Exchange Board of India (SEBI).

Leeway in Disclosures

  • Under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (Regulations) there have to be periodic disclosures by listed entities of any event that might materially affect the company. 
  • Besides, there are also disclosures with respect to financial results, annual reports and shareholding structure. 
  • The SEBI has permitted an extension in timeline for submission of such information through its circular dated 12 May 2020. 
  • There has also been leeway provided for requirements for fund-raising and notice for board meetings to stock exchange.
  • Listed entities which are banking or insurance companies including ones with banks or insurance companies as subsidiaries may submit consolidated financial results under regulation 33(3)(b) for the quarter ending 30 June 2020 voluntarily. 
  • They shall continue to submit the standalone financial results are required under regulation 33(3)(a) of the Regulations. The listed entities should give reason if they want to submit only standalone financial results and not consolidated ones. 

Meetings via Video-Conferencing

  • There has also been permission to conduct board meetings online until 30 June 2020.
  • Shareholder meeting if required before 30 June 2020 can be conducted online too.
  • The companies are also advised to adopt a work from home policy during this emergency situation. 
  • Listed companies should also have committee of the board to take decisions for the board in response to the pandemic. 
  • Also, the Regulations mandate the listed companies to have a succession plan for board and the management. 
  • Regulation 44(4) mandate sending of proxy forms to holders of securities in all cases and members may vote for or against a resolution. 
  • However, this has been done away with temporarily when meetings are conducted electronically. 
  • This relaxation is given to listed companies that may conduct their annual general meetings thorough electronic mode till 31 December 2020.

Closure of Trading Window

  • The trading window in relation to declaration of results for financial year ended by 31 March 2020 and this would have opened again within forty eight (48) hours after 30 May 2020 but since the last date of submission has been extended to 30 June 2020, the trading window shall also stand extended. 

Payment of Dividend

  • ‘Payable at par’ warrants or cheques will be issued if it is not possible to make payments electronically. 
  • If the amount of dividend exceeds INR 1500/-, then the ‘payable at par’ warrant or cheque can be sent via speed post. 
  • If the email address of the shareholders are available, then the listed entities shall endeavour to obtain their bank account details and make the payments electronically.

Relaxation from Publication in Newspapers

  • SEBI vide circular no. SEBI/HO/CFD/CMD1/CIR/P/2020/48 dated 26 March 2020 had exempted  publication  of  advertisements  in  newspapers,  for  all  events  scheduled  till  15 May 2020. 
  • This is because most newspapers have stopped their print versions due to the pandemic. 
  • Due to the continuation of the lockdown, this has been extended for all events scheduled till 30 June 2020.

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