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Coronavirus lockdown keeps companies yearly, quarterly results in limbo

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April 19, 2020

A leading company, which usually notifies the date for declaring its yearly and quarterly results within a fortnight of the end of the period, is clueless about when it would be able to do so this time. Members of its team of internal auditors criss-cross the country at this time of the year to take stock of inventories and audit all its production units. But now they are stuck at their respective homes in Mumbai.

Most listed corporate entities in the country are in a similar fix. With the sudden declaration in late March of a nationwide to tackle the Covid-19 pandemic, the final calculations of their financial results for the year 2019-20 (FY20) are hanging in limbo.

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Till April 19, only 41 of the 3,947 listed on the BSE have managed to finalise the dates for the declaration of their yearly financial results. And only three — Wipro, Tata Consultancy Services (TCS), and — have reported the profit and loss accounts for FY20. The rest, or 99 per cent of the listed companies, are uncertain as to when they will be able to complete this annual financial rite.

The country’s largest business entity — (RIL) — is no different. An RIL spokesperson said, “As required by regulations, we will intimate the stock exchanges when we decide about the timelines of our board meeting to consider the annual audited results for the year ended March 31.” So far, only two group firms — Reliance Industrial Infrastructure and Hathway Cable & Datacom — have declared dates.


Corporate behemoths like Maruti Suzuki, ITC, Hindustan Unilever (HUL), Hero MotoCorp, Bajaj Auto, Nestlé India, Marico, Eicher Motors, and Jyothy Laboratories, among others, are undecided, too. While TCS reported its numbers on Thursday, no other Tata Group firm, including the group’s second largest, Titan Company, has been able to decide on when to hold their board meetings.

An spokesperson said that that the management was “continuously monitoring the situation and a final call will be taken based on how things evolve over time”.

An HUL spokesperson said the firm was unable to answer queries on the matter.

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According to Lalit Malik, chief financial officer (CFO) at Dabur India, the company will “schedule the board meeting date for annual financial results after the is lifted”. Nestlé India, one of the top 15 firms on the BSE by market capitalisation, through a ‘special announcement’ informed its shareholders that it was forced to postpone the 61st annual general meeting (AGM) scheduled for May 8.

“Considering the unprecedented situation with the outbreak of the Covid-19 pandemic and advisories issued by the central government and state governments to keep all offices and business establishments in India under lockdown, it has been decided to postpone the 61st AGM, the book closure, and the payment date intimated earlier”.

Sushil Batra, CFO at Relaxo Footwears, said while the firm usually holds its annual board meeting in the second week of May, this time it is likely to be postponed to the last week of May, subject to a return to normalcy.

In view of the challenges owing to the Covid-19 pandemic, markets regulator Securities and Exchange Board of India (Sebi) has allowed to hold their board meetings remotely through videoconferences. It has also extended the date for filing of yearly financial results by a month — from end of May to June 30.

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However, unlike in the field of information technology or banking, firms that manufacture goods, such as Maruti, Hero, ITC, and HUL and many others, undertake a rigorous physical auditing process that involves scrutinising the inventory at their manufacturing units and warehouses. The process of collating financial numbers from ground up — from each sales territory to the all-India level — has also slowed considerably.

Many sales officers have moved back to their native places and are unable to conduct the scrutiny of the distribution channels. “With a 40-day in place, many companies involved in manufacturing activities have not been able to take a count of their stocks. While some might be facing the challenge of consignment stuck in transit, others have not been able to finish the stock audits. However, for services sector companies, the process of finalising the numbers is less cumbersome as the data itself is their product,” said Shriram Subramanian, managing director (MD) of proxy advisory firm InGovern.

According to J N Gupta, co-founder and MD, Stakeholders Empowerment Services, for firms with large establishments, “it is better to be late than report numbers without thorough physical audits, as any lapse may result in loss of face if discrepancies appear later”. Other challenges are cropping up too. A zonal manager at a diversified conglomerate said the final assessment of finances and operations under his supervision got delayed by a day as the broadband connection at his residence faltered. With no servicemen available for a quick fix, he had to postpone the videoconference.

“This is a peculiar situation and it is likely the Sebi may consider extending the dates (for filing numbers and holding mandatory committee meetings) further,” said a senior analyst from a leading financial services firm.

“Overall, it seems unlikely they will be able finish the process before movement normalises,” added Subramanian.

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