{"id":30678,"date":"2020-04-11T16:08:08","date_gmt":"2020-04-11T10:38:08","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=30678"},"modified":"2020-11-24T16:37:56","modified_gmt":"2020-11-24T11:07:56","slug":"sebi-guidelines-on-business-responsibility-reporting","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/sebi-guidelines-on-business-responsibility-reporting\/","title":{"rendered":"SEBI Guidelines on Business Responsibility Reporting"},"content":{"rendered":"

Every organization should have a framework for governance in an organization. Governance can be understood as the relationship between the internal components and the external components of the business. Governance plays a crucial role, as it directly affects the goodwill of the organization. Therefore every company must make sure to have a good governance system in place<\/strong>. However, it is not enough to have a governance system in an organization. The governance system of an organization should also be accompanied by internal controls and a proper policy of monitoring. Monitoring can be done internally and externally. Apart from internal monitoring, there is a requirement to compulsory adopt the policy regarding external monitoring and reporting. <\/p>\n\n\n\n

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In India, the institution governing securities and listing in stock exchanges is the Securities Exchange Board of India (SEBI).  This is the primary institution that monitors the policy regarding listing done by companies in stock exchanges.  SEBI also overlooks the scenario that every business submits a Business Responsibility Report.<\/strong><\/div>\n\n\n\n

What is the Business Responsibility Report (BRR)?<\/strong><\/h2>\n\n\n\n

In 2011 there was a discussion headed by the\nMinistry of Corporate Affairs (MCA) on certain requirements such as the\nNational Voluntary Guidelines on the Social, Economic, and Environmental\naspects which corporate has to take into consideration<\/strong>. With this\nconsultation, the Government of India considered that certain responsibilities\nhave to be adopted by companies voluntarily. In the consultation, some of the\nmain considerations of companies were related to the social responsibility of\norganizations.  <\/p>\n\n\n\n

This was considered by the monitoring agency, SEBI<\/a><\/em><\/strong>, to come up with certain guidelines regarding the reporting standards of the business.  SEBI took a view of the continuous failures of the governance mechanism of Indian corporate in spite of having stringent regulations<\/strong>. Because of this, the SEBI brought out the system of Business Responsibility Reporting (BRR)<\/strong>. Companies have to submit a business responsibility report as per the requirement of the SEBI. However, this was only limited to the companies that were listed in a recognized stock exchange. Apart from this, the overall picture of the Business Responsibility Report is for effective compliance for corporate governance norms of listed entities.<\/p>\n\n\n\n

The Business\nResponsibility Report, which was required to be submitted by companies, had to\nbe approved and implemented in a phased manner. In order to avoid confusions\nregarding the division, the SEBI had divided the requirement into two stages.\nThese stages, also called phases are as follows: <\/p>\n\n\n\n

Also, Read:<\/b> Corporate Social Responsibility under Companies Act 2013<\/a><\/mark>.<\/p><\/div>\n\n\n\n

Stage I-<\/strong> In this phase, the SEBI had considered the requirement of mandatory submitting a Business Responsibility Report. The requirement of submitting the business responsibility report was only for the top 100 listed Entities.  This was included in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the SEBI LODR Regulations.<\/strong> In the above Act, under Regulation 34(2) f – the top 100 entities must include the Business Responsibility Report in their Annual Report as per the prescribed format.<\/strong><\/p>\n\n\n\n

Stage- II-<\/strong> In this\nphase, the extension of the Business responsibility reporting was on the basis<\/a>\nof the Market<\/a> Capitalisation of the top\n500 listed entities<\/strong>. This phase was brought out in the year 2016.<\/p>\n\n\n\n

Apart from the\nabove two phases as mandated by SEBI, there were many such notifications and\nregulations brought about to improve the requirement of a company when\nsubmitting the business responsibility report. \nThese notifications were introduced and have an effect now.<\/p>\n\n\n\n

Principles Related to the Business Responsibility Report<\/strong><\/h2>\n\n\n\n

A Business Responsibility Report must portray the following core elements:<\/em><\/p>\n\n\n\n