Articles

SEBI: ISSUES INFORMAL GUIDANCE ON BRSR APPLICABILITYTO ENTITY IN ‘TOP 1000 TILL FY-2020-21’

Background:

  • As per Regulation 34 of the SEBI (LODR) Regulations 2015 and the BRSR circular dated May 10, 2021, SEBI highlights that with effect from FY-2022-23 filing of Business Responsibility and Sustainability Reporting (BRSR) shall be mandatory for top 1000 listed entities based on market capitalization and shall replace the existing BRR report. Further, Regulator underscores that by virtue of Reg. 3(2), any listed entity which is amongst the top 1000 listed entities in the FY ending on March 31, 2022 viz. FY 2021-22, or any financial year thereafter, shall continue to submit the BRSR, as the case may be, even for the FYs wherein such entities fall below the threshold of the top 1000 listed entities by market capitalization.

Given Case:

  • In regard of the above provisions, Nectar Lifesciences Ltd (company) have sought clarification regarding the applicability of BRSR for FY-2022-23. The Company has not been in the list of top 1000 entities based on market capitalization as on March 31, 2022 and also as on March 31, 2023 although the company was in the list as on March 31, 2021 and thus liable to comply with the provisions regarding submission of Business Responsibility Report (BRR) for the year 2020-21.

Conclusion:

  • SEBI in response, provided the company with informal guidance stating that the company’s responsibility, as per the aforementioned provisions, was solely to submit the Business Responsibility Report (BRR) for the fiscal year 2020-21. Additionally, SEBI noted that the company was not included in the list of top 1000 listed entities based on market capitalization as on March 31, 2022 and March 31, 2023; therefore the requirement of filing the BRSR report will not become applicable to the company.
  • SEBI determined that the Company was not required to continue with the submission of BRR since the Company was in the list of top 1000 listed entities as on March 31, 2021 and not thereafter, thus concluded that the Company will not be required mandatorily to submit the BRSR under the LODR Regulations.
SW Point of View: All the entities that fall in the list of ‘Top 1000 listed entities’ as on March 31, 2022 and thereafter are mandatorily required to submit BRSR in the format as specified by the board from time to time. If the listed entities fall below the specified threshold in subsequent period, they are still required to fulfill their responsibility of submitting the business responsibilities and sustainability report (BRSR). This obligation persists because these entities have previously come under the purview of Regulation 34 of the LODR and the BRSR circular dated May 10, 2021. 

Aditya Rawat, Audit Associate, SW India

Latest Articles

Category