With the pandemic creating a turmoil worldover what is equally important now for Businesses is to plan their steps keeping in view the range of Risks that can walk across ones path. Challenges being faced by companies is quite known to the Regulators as they seek to bring more directions in Disclosures and Transparency. The Regulators have come up with Circulars,Public Statements to provide the ways to deal with the said situation.

The circular on disclosure of material impact due to Covid 19 is partly a restatement of the existing disclosure obligations of listed companies under the Listing Regulations. Given the uncertainties surrounding most sectors, it will be a challenge for companies to provide meaningful guidance on the financial impact of Covid at this stage. Any such disclosures should be in good faith with appropriate disclaimers.

The Efforts taken by the Regulators has been extensively listed below:-

US Securities Exchange Commission’s(SEC) Step

Public statement issued is as follows:-


In the coming weeks, our public companies will be issuing earnings releases and conducting analyst and investor calls. We urge companies to provide as much information as is practicable regarding their current financial and operating status, as well as their future operational and financial planning.  In an effort to facilitate robust disclosure and engagement, we provide the following observations and requests-

  • Company disclosures should reflect this state of affairs and outlook and, in particular, respond to investor interest in:  (1) where the company stands today, operationally and financially, (2) how the company’s COVID-19 response, including its efforts to protect the health and well-being of its workforce and its customers, is progressing, and (3) how its operations and financial condition may change as all our efforts to fight COVID-19 progress.  Historical information may be relatively less significant.
  • High quality disclosure will not only provide benefits to investors and companies, it also will enhance valuable communication and coordination across our economy—including between the public and private sectors—as together we pursue the fight against COVID-19.
  • This transparency can foster confidence in countless specific instances, for example, between a supplier and a manufacturer as well as between an investor and a company, which in combination will benefit all.
  • We encourage companies that respond to our call for forward-looking disclosure to avail themselves of the safe-harbors for such statements and also note that we would not expect good faith attempts to provide appropriately framed forward-looking information to be second guessed by the SEC.

IOSCO’s Step

IOSCO is the leading international policy forum for securities regulators and is recognized as the global standard setter for securities regulation. The organization’s membership regulates more than 95% of the world’s securities markets in more than 115 jurisdictions and it continues to expand.


Madrid, 29 May 2020

IOSCO encourages issuers’ fair disclosure about COVID-19 related impacts The Board of the International Organization of Securities Commissions (IOSCO) issued a public statement highlighting the importance to investors and other stakeholders of having timely and high quality information about the impact of COVID-19 on issuers´ operating performance, financial position and prospects. The pandemic and the uncertainty it has caused have material implications for financial reporting and auditing, including issuers’ disclosures of current and reliable information material to investment decisions. Current circumstances may make disclosures outside the financial statements more challenging and hence make high quality disclosures that much more important.

In light of COVID19, IOSCO confirms its commitment to the development, consistent application and enforcement of high-quality reporting standards and disclosure regulations, which are critical to the proper functioning of the capital markets.

In its Statement on Importance of Disclosure about COVID-19, IOSCO:

  • Reiterates the importance of disclosure of the impact on amounts recognized, measured and presented in the financial statements.
  • Highlights the importance of transparent and complete disclosures, noting that in an environment of heightened uncertainty, disclosures should be entity-specific and transparent, particularly when involving significant judgments and estimates.
  • Restates that in the current environment, it is important that issuers are mindful of the elements of reliable and informative non-GAAP measures.
  • Notes that interim financial information will require more robust disclosures of material information and management’s response to the changing circumstances.
  • Reminds auditors of their responsibilities to report on Key Audit Matters (KAM), including how the auditor addressed the matters.
  • Encourages issuers to balance the flexibility provided by regulators extending the period to file financial information with the responsibility to provide timely and comprehensive financial information that includes reasonable and supportable judgments.


SEBI’s Step

Advisory on disclosure of material impact of CoVID–19 pandemic on listed entities under SEBI Listing Obligations and Disclosure  Requirements)  Regulations, 2015 (‘LODR Regulations’/‘LODR’)

1.While such a lockdown and disruption is unforeseen and beyond the control of the entities, such events can lead to distortions in the market due to the gaps in information available about the operations of a listed entity. Hence, it is important for a listed entity to ensure that all available information about the impact of these events on the company and its operations is communicated in a timely and cogent manner to its investors and stakeholders.

2.Various provisions under the LODR Regulations already require listed entities to disclose material events which have a bearing on its performance / operations. These provisions are reiterated below:

a. Regulation 30(3) of the LODR specifies that a listed entity shall make disclosures of events specified in Para B of Part A of Schedule III of LODR, based on application of the guidelines for materiality. Clause 6 of Para B of Part A of Schedule III of LODR specifies events such as “Disruption of operations of any one or more units or division of the listed entity due to natural calamity (earthquake, flood, fire etc.), force majeure or events such as strikes, lockouts etc.” that shall be disclosed upon application of the guidelines for materiality referred in Regulation 30(4).

b. SEBI vide Circular No. CIR/CFD/CMD/4/2015 dated September 9, 2015, has provided further guidance to the listed entities on such disclosures. Annexure I to the circular, specifically, provides the details to be disclosed in cases of disruptions of operations due to natural calamity, force majeure and other events.

c. Similarly, for non-convertibles, Regulation 51(1) of the LODR requires prompt dissemination to the stock exchange(s) of all information having bearing on the performance/operation of the listed entity, price sensitive information or any action that shall affect payment of interest or dividend. As per Clause 16 of Part B of Schedule III read with Regulation 51(2) of the LODR, a listed entity shall promptly inform to the stock exchange(s) of any other information having bearing on the operation/performance of the listed entity.

3.Listed entities around the world have been making disclosures regarding the impact of the pandemic, including that on financial condition and results of operations, future operations, capital and financial resources, liquidity, assets, internal financial control over financial reporting and disclosure controls and procedures, demand for products/services etc. Regulators have encouraged timely reporting as well as complete and accurate disclosure of the impact, as far as possible.

4.Listed entities should endeavour to ensure that all investors have access to timely, adequate and updated information. Towards this end, entities are encouraged 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-fulfilment 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.

5. Additionally, while submitting financial statements under Regulation 33 of the LODR, listed entities may specify/include the impact of the CoVID-19 pandemic on their financial statements, to the extent possible.

“When listed entities disclose material information related to the impact of COVID-19, they should not resort to selective disclosures, keeping in mind the principles governing disclosures and obligations of a listed entity,” Sebi said, while referring to the regulations regarding disclosure and transparency.

Read the complete Circular:-


Certain Companies have disclosed the influence of Covid-19 on their operations and to have knowledge of few of them, I have listed down the disclosures made by the following companies :-

1. Titan Company Limited

COVID-19 Pandemic Situation- Update on Operations

A. Impact on the business

The lockdowns and restrictions imposed on various activities due to COVID – 19 pandemic have posed challenges to all the businesses of Titan Company Limited (the “Company”/“Titan”) and its Subsidiaries. The Company’s operations were hit substantially from 17th March 2020 till the 1st week of May 2020, when lockdown was gradually lifted. Corporate offices, regional offices, retail operations and manufacturing facilities were fully shut during the period and the Company was able to get only very marginal sales through its online channel at the end of April but delivery for these have been affected due to classification of our products as non-essential so far.

“Akshaya Tritiya”is considered as a very auspicious day for buying gold jewellery and is a big contributor to the jewellery sales for the industry. This year it was on 26th April, which was during the lockdown period and hence almost all the sales related to it were lost except for some online sales. The wedding season is also normally quite strong in the months of April and May and this year almost all weddings in this period have been postponed. The jewellery business of the Company has deferred the launch of two of its collections till a time that most of the stores are re-opened.

B. Ability to maintain operations including the factories/units/office spaces functioning and closed down

As stated earlier, retail stores and manufacturing facilities were shut down entirely during the lockdown phase as the Company was not part of Government denominated essential services. Corporate and regional offices were also shut, but the Company adopted the work from home policy during the entire duration of the lockdown.

C. Schedule, if any, for restarting the operations and steps taken to ensure smooth functioning of operations.

With the lifting of the lockdown restrictions, the Company has started re-opening its stores in the non-containment zones, after establishing thorough and well-rehearsed safety protocols. These protocols include encouraging customers to take appointment before a visit to the stores, making possible cashless payment in all stores, sanitizing products before and after every trial by customers, allowing limited number of persons inside the stores basis the store size, thermal screening, compulsory use of face masks, rotation of store staff, etc. The Company has opened around 43 % of its stores across all businesses till date. All the mall stores however continue to be closed as per Government regulations. Based on representations being made by various Industry associations, the Company is hopeful that malls will also be opened in the next few weeks in non-containment zones along with High Street stores. Manufacturing activities have commenced gradually in most of the facilities. However production ramp up will be based on current inventory levels and the Company’s estimate of demand. In the short term, it is therefore expected that manufacturing activity will be well below the normal. Manning at all facilities is also well below allowed norms and may remain so till production requirements go up to normal levels. The Corporate office at Bengaluru re-opened on 6th May, 2020 with limited staff working from office in the initial phase.

D. Estimation of the future impact of CoVID-19 on its operations

The Company is predominantly dependent on retail operations being robust as it sells its products through nearly 1850 retail outlets in the country. The share of online business is around 2 % of its sales. The sales in stores that have opened up are at around 50 % of the sales in a normal period and is improving gradually. These are early days and the Company is not in a position to gauge with certainty the future impact on operations but expects normalcy to be achieved only after a quarter. Customer sentiment pointing to reduced spends on discretionary items might impact demand for most of the Company’s products. The drop in sales is also expected to impact store profitability in the near term and hence store roll outs will be calibrated in the immediate future till more clarity emerges.



As we continue to monitor the impact of Coronavirus (Covid-19), we would like to recognize the efforts of all health care officials and local authorities across the country in these difficult times. Our efforts continue to be directed in ensuring that all our customers receive their daily essential items.

Given below is a brief update of our business operations:

  • Nearly 50% of our stores remain closed for operations based on directive by the local authorities
    • Footfall at stores that are open, depends on movement and timing restrictions enforced by the local authorities. Overall, they are significantly lower than usual footfalls
  • We continue to sell daily use essential items such as grocery and FMCG products from all our stores and have stopped sale of non-essential items (General Merchandise and Apparel).
  • We have just commenced E-Commerce Home Delivery and Bulk Deliveries to large housing complexes across majority of our stores during the first week of April
    • Customers who have used the service have deeply appreciated these initiatives, however the sales from these channels are inconsequential.
    • E-Commerce and bulk deliveries to societies are initiatives implemented to only manage the current lockdown situation.

Read –


With the pandemic hitting down on every business, what remains is our capacity and adaptability to learn and find ways to make our business operate efficiently despite loops and for us to look from a broader perspective of being committed for the purpose and the Mission.

Thank you for reading. I hope this article would have enhanced your understanding of the topic.

Stay Home, Stay Safe


Absolute Care is taken to prepare this article; however, inadvertently if any errors occur then, the Author shall not be held responsible for any such cause. The Content published is only for educational purpose and shall not be construed as the rendering of any Professional Advice in any manner whatsoever. Readers must exercise their Judgement and refer the original source before any implementation. Further, the Content is an original work of the Author and may be used only after written permission


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