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Sebi Allows Companies More Time To File Earnings Reports Amidst COVID 19 Pandemic

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Sebi Allows Companies More Time To File Earnings Reports Amidst COVID 19 Pandemic
Yagnesh Kansara - 20 March 2020

Mumbai: In order to help the Indian Inc to cope up with curbs imposed by the government to contain the spread of the coronavirus pandemic the markets regulator Securities and Exchange Board of India (Sebi), eased the deadline for publicly traded companies to file their earnings reports, including certain other relaxations.

Companies, which had 45 days from the end of the quarter to file their quarterly earnings, will now get an extra 45 days. Also, annual audited figures, which needed to be filed in 60 days period have now been extended by a month. In effect, the deadline to file both has been extended till June 30.

Currently, a company can delay release of its earnings for reasons such as auditor resignation, or if directed by the court. Thursday’s relaxations by Sebi follows severe business disruptions as travel restrictions bite and many employees work from home.

“Developments arising due to the spread of the virus have warranted the need for temporary relaxations in compliance requirements for listed entities," Sebi mentioned in a press statement.

Sebi also relaxed the deadline for submitting governance reports by a month and quarterly shareholding patterns by three weeks. The governance report for this quarter is due by April 15 but now companies can submit them by May 15. The shareholding pattern is due on April 21; now companies can submit it by May 15.

These steps follow the corporate affairs ministry’s decision on Wednesday late evening to relax the requirement for holding physical board meetings.

“Sebi’s decision to extend the reporting timelines for Q4 and annual financial reporting for 2020 in the light of disruption caused due to Covid-19 is a welcome relief for corporate India. Many companies have proactively announced work-from-home in the recent weeks and this extension will be helpful for them to focus on the current business exigencies. Further, it will provide more time to financial market regulators and business leaders to assess potential accounting guidance or additional disclosure requirements due to Covid-19," said Khazat Kotwal, partner, Deloitte India.

This will provide much-needed respite to companies, since Covid-19 has created significant concerns related to business continuity, said Shruti Rajan, partner, Cyril Amarchand Mangaldas. “Good to see Sebi make allowances where possible. I would say this is a step ahead of even the US SEC, which has been granting conditional targeted reliefs and extensions for listed companies. Globally, regulators are also encouraging companies to disclose the impact Covid is likely to have on their businesses, earnings, revenues, pipeline, etc, so that is likely to be the next step here as well,” concludes Rajan.

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