SEBI expands the ambit of Business Responsibility Reporting (BRR) by notification No. SEBI/LAD-NRO/GN/2019/45 dated 26.12.2019 (Securities and Exchange Board of India – Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations, 2019. Before discussing the amendments, first we understand the concept and relevant provisions.
Business Responsibility Report is a disclosure of adoption of responsible business practices by a listed company to all its stakeholders. At a time and age when enterprises are increasingly seen as critical components of the social system, they are accountable not merely to their shareholders from a revenue and profitability perspective but also to the larger society which is also its stakeholder.
As per clause (f) of sub regulation (2) of regulation 34 of Listing Regulations, the annual report shall contain a business responsibility report describing the initiatives taken by the listed entity from an environmental, social and governance perspective in the prescribed format*1 (Link is given in the last).
The BRR framework is divided into five sections:
a) Section A: General Information about the Organisation – Industry Sector, Products & Services, Markets, other general information
(b) Section B: Financial Details of the Organisation – Paid up capital, Turnover, Profits, CSR (Corporate Social Responsibility) spend.
(c) Section C: Other Details – BR initiatives at Subsidiaries and Supply-chain Partners
(d) Section D: BR Information – Structure, Governance & Policies for Business Responsibility
(e) Section E: Principle-wise Performance – Indicators to assess performance on the 9 Business Responsibility principles as envisaged by the National Voluntary Guidelines (NVGs)
|Pre- Amendment||Post- Amendment|
|Top 500 listed companies by market capitalization to file Business Responsibility Reports (BRR).||Top 1000 listed companies by market capitalization to file Business Responsibility Reports (BRR).|
Listed entities other than top 1000 listed companies based on market capitalization and listed entities which have listed their specified securities on SME Exchange, may include these business responsibility reports on a voluntary basis.
Market capitalization to be calculated as on March 31 of every financial year.
The High level Committee on CSR in 2018 was also of the same view that the ambit of reporting on BRR be expanded gradually and at this juncture, it be extended to top 1000 companies.
Format of Business Responsibility Reporting: https://taxguru.in/sebi/sebi-issues-format-business-responsibility-report-brr.html
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