seminar on understanding new csr legislation

SEBI Mandates Business Responsibility Reports for Listed Companies

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By Rusen Kumar

Regulator for the securities market in country The Securities and Exchange Board of India (SEBI) has mandated Business Responsibility (BR) Reports for listed firms.

In a circular CIR/CFD/DIL/8/2012 dated August 13, 2012 the requirement to include BR Reports as part of the Annual Reports shall be mandatory for top 100 listed entities based on market capitalisation at BSE and NSE as on March 31, 2012. BSE and NSE shall independently draw up a list of  listed entities to whom the circular would be applicable based on the said criteria and disseminate the same in their websites respectively. Other listed entities may  voluntarily disclose BR Reports as part of their Annual Reports.

Those listed entities which have been submitting sustainability reports to overseas regulatory agencies/stakeholders based on internationally accepted reporting frameworks need not prepare a separate report for the purpose of these guidelines but only furnish the same to their stakeholders along with the details of the framework under which their BR Report has been prepared and a mapping of the  principles contained in these guidelines to the disclosures made in their sustainability reports.

The provisions of this circular shall be applicable with effect from financial year ending on or after December 31, 2012. However, listed entities who are yet to submit their Annual Reports for financial year ended on March 31, 2012 may also  include BR Reports as part of their Annual Reports on a voluntary basis.

Listing conditions are specified in exercise of the powers conferred under Section 11 read with Section 11A of the Securities and Exchange Board of India Act, 1992. The said listing conditions should form part of the existing Listing Agreement of the stock exchange.

SEBI said that all stock exchanges are advised to ensure compliance with this circular and carry out the amendments in their Listing Agreement as per the Annexure to this circular. This circular is available on SEBI website at www.sebi.gov.in under the categories “Legal Framework” and “Issues and Listing”.

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.

Hence, adoption of responsible business practices in the interest of the social set-up and the environment are as vital as their financial and operational performance. This is all the more relevant for listed entities which, considering the fact that they have accessed funds from the public, have an element of public interest involved, and are obligated to make exhaustive continuous disclosures on a regular basis.

Ministry of Corporate Affairs, Government of India, in July 2011, came out with the ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business’. These guidelines contain comprehensive principles to be adopted by companies as part of their business practices and a structured business responsibility reporting format requiring certain specified disclosures, demonstrating the steps taken by companies to implement the said principles.

Above Guidelines and considering the larger interest of public disclosure regarding steps taken by listed entities from a Environmental, Social and Governance (“ESG”) perspective, it has been decided to mandate inclusion of Business Responsibility Reports (“BR reports”) as part of the Annual Reports for listed entities, SEBI said in a Circular.

Rusen Kumar, Editor, INDIACSR. He can be reached at editor@indiacsr.in

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Posted by on Aug 17 2012. Filed under What is CSR. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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