Professionals have the ability to learn conscientiousness, interpersonal skills, adaptability and integrity. In this competitive world, to retain the professionalism, one has to undergo CPDs and CPEs to enhance their job performance and to sustain the market. Various authorities and institutions has understood the importance of CPD and CPE and started adapting them into their regulations to their professional members.
In this edition, we will be seeing about the (Investment Advisers) and the regulations that SEBI made in relation to their qualification and certification requirements. We will have our usual Legal terms and News Bites related to notifications by MCA, SEBI, RBI, IT and GST following the article.
CS Saranya Deivasigamani,
CEO
Business Responsibility Reports
Business Responsibility Reports (BRR) is a new reporting system recommended by the Ministry of Corporate Affairs (MCA) to better reflect the intent and scope of reporting on non-financial parameters. The BRR would be integrated with the MCA 21 portal. The information captured through BRR filings should be used to develop a Business Responsibility-Sustainability Index for companies.
The top 1000 listed companies are to undertake this reporting mandatorily. The reporting requirement may be extended by MCA to unlisted companies above specified thresholds of turnover and/or paid-up capital.
Evolution of Business Responsibility Reporting in India:
1. Corporate Voluntary Guidelines in 2009;
2. Endorsement of United Nations Guiding Principles on Business & Human Rights by India in 2011;
3. MCA issued ‘National Voluntary Guidelines on Social, Environmental and Economical Responsibilities of Business’ which encourages reporting on environment, social and governance issues in 2011;
4. SEBI mandates top 100 listed companies by market capitalization to file Business Responsibility Reports (BRR) based on NVGs in 2012;
5. SEBI extends BRR reporting to top 500 companies by market capitalization in 2015;
6. National Guidelines on Responsible Business Conduct (NGRBC) released in 2019.
The BRR framework is divided into five sections:
Section A: General Disclosures
The objective of this section is to obtain basic information about the company – size, location, products, number of employees, CSR activities, etc. The proposed formats include additional disclosures on proximity of a company’s operations to environmentally sensitive sites such as protected areas, water-stressed zones, etc.
In the proposed format, this section includes:
1. Company Details
2. Products/Services
3. Operations
4. Employees
5. Holding, Subsidiary and Associate Companies (including joint ventures)
6. CSR Details
7. Transparency and Disclosures Compliances
Section B: Management and Process
In this section, the company is required to disclose information on policies and processes relating to the NGRBC Principles concerning leadership, governance, and stakeholder engagement. Wherever relevant, companies have been asked to provide links to their websites where these policies are available.
The purpose of this section is to understand whether the company has the building blocks in place that will enable and ensure responsible business conduct. It reflects the belief that policies and processes are foundational in nature to ensuing action.
In the proposed format, this section includes:
1. Policy and Procedures
2. Governance, leadership and oversight
3. Stakeholder Engagement
Section C: Principle-wise performance
Responses to Section C indicate how a company is performing in respect of each Principle and Core Element of the NGRBCs. This section requires companies to demonstrate their intent and commitment to responsible business conduct through actions and outcomes. The questions in this section have been divided into two categories:
1. Essential: Those that are mandatory for all companies.
2. Leadership: Those that are voluntary and which provide an opportunity for companies to present their impacts and outcomes. It is expected that in the next cycle of review, questions from the Leadership category would be moved to the Essential category and so companies should see this as a pathway to transitioning to a more comprehensive disclosures regime.
In the proposed format, this section includes:
1. PRINCIPLE 1 Businesses should conduct and govern themselves with integrity in a manner that is Ethical, Transparent and Accountable.
2. PRINCIPLE 2 Businesses should provide goods and services in a manner that is sustainable and safe
3. PRINCIPLE 3 Businesses should respect and promote the well-being of all employees, including those in their value chains
4. PRINCIPLE 4 Businesses should respect the interests of and be responsive to all its stakeholders
5. PRINCIPLE 5 Businesses should respect and promote human rights
6. PRINCIPLE 6 Businesses should respect and make efforts to protect and restore the environment
7. PRINCIPLE 7 Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent
8. PRINCIPLE 8 Businesses should promote inclusive growth and equitable development
9. PRINCIPLE 9 Businesses should engage with and provide value to their consumers in a responsible manner
The detailed format of the report can be viewed at MCA Portal.
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Legal Terms
Racketeering
n. the federal crime of conspiring to organize to commit crimes, particularly as a regular business (“organized crime” or “the Mafia”).
MCA Updates
- Companies (Indian Accounting Standards) Amendment Rules, 2020.
SEBI Updates
- Relaxation from compliance with provisions of the SEBI (Issue and Listing of Debt Securities) Regulations, 2008 (“ILDS Regulation”), SEBI (Non-Convertible Redeemable Preference Shares) Regulations, 2013 (“NCRPS Regulations”) and SEBI Circulars relating to Listing of Commercial Papers .
- Manner and mechanism of providing exit option to dissenting unit holders pursuant to Regulation 22(5C) and Regulation 22(7) of SEBI (Infrastructure Investment Trusts Regulations), 2014
- Manner and mechanism of providing exit option to dissenting unit holders pursuant to Regulation 22(6A) and Regulation 22(8) of SEBI (Real Estate Investment Trusts Regulations), 2014
- Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2020.
- Extension of time for submission of financial results for the quarter/half year/ financial year ended 30th June 2020
- Guidance Note on SEBI (Issue and Listing of Municipal Debt Securities) Regulations, 2015
- Procedural Guidelines for Proxy Advisors
- Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2020
- Securities and Exchange Board of India (Employees’ Service) (Amendment) Regulations, 2020
- Administration and Supervision of Investment Advisers
- SEBI (International Financial Services Centres) Guidelines, 2015 – Amendment
RBI Updates
- Fair Practices Code for Asset Reconstruction Companies.
- Implementation of Indian Accounting Standards.
- Resolution Framework for COVID-19-related Stress.
- Micro, Small and Medium Enterprises (MSME) sector – Restructuring of Advances.
- Online Dispute Resolution (ODR) System for Digital Payments.
- Review of Guidelines for Core Investment Companies.
IT Updates
- Amendment of rule 31AA, Form 27EQ.
- Notification u/s 138 of the Income Tax Act, 1961 in respect of Competition Commission of India.
- Amendment of Income-tax Rules, 1962 rules for providing conditions and guidelines for Pension Funds u/s 10(23FE) of the Income-tax Act, 1961- reg.Income-tax (15th Amendment) Rules, 2020
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