Disclose commodity risks in transparent and uniform manner: Sebi to listed cos

New Delhi: To benefit the shareholders and to bring clarity in disclosures, Sebi Thursday asked listed entities to disclose their risk management activities during the year, including their commodity hedging positions, in a more transparent and uniform manner.

The move comes after the regulator's board in March this year accepted this recommendation made by the Uday Kotak-led Corporate Governance Committee.

"Listed entities should disclose their risk management activities during the year, including their commodity hedging positions in a more transparent, detailed and uniform manner for easy understanding and appreciation by the shareholders," Sebi said in a circular.

The regulator has mandated listed entities to make disclosures regarding commodity price risk and hedging activities in the 'Corporate Governance Report' section of the annual report of a listed entity.

The Securities and Exchange Board of India (Sebi) believes that the move will benefit the shareholders and to bring further clarity in disclosures to be made in the annual reports by the listed entities.

The risk management policy would take into account total exposure of the entity towards commodities, commodity risks faced by the entity, hedged exposures among others.