Business Responsibility Reproting (BRR) Analysis

Trend Analysis

1. Determinant of Business Responsibility Reporting (BRR) and Quality of Disclosure: An Empirical Evidence from India Mohd Merajuddin Inamdar, Lecturer. National Institute of Securities Markets 2019

2. Introduction Mr. Mervyn King who presented the first modern corporate governance code (famously called King Report, South Africa,1993) and strong supporter of integrated reporting said: “Quarterly financial reporting drives short term thinking and myopic view, when investors lose the trust and confidence in the company, value destroyed quickly ”. The corporate sustainability is to create long term stakeholder value without comprising the current generation need.

3. Global Scenario Globally there are number of sustainability reporting standards, codes and principles such as UN Principle of responsible investing ( UNPRI ) Sustainability Reporting Standards (GRI ) International Integrated Reporting Council (IIRC) framework Sustainability Accounting standard board (SASB ) Task Force on Climate-Related Financial Disclosures ( TCFD )

4. Indian Scenario 2009-First voluntary guideline on corporate social responsibility issued by the MCA 2011- NVGs (National Voluntary Guidelines) on social, environmental and economic responsibilities of business 2013- BRR by SEBI for top 100 listed cos 2016- BRR for top 500 listed cos.

5. BRR Principles

6. Objective of the Study To evaluate quality of ESG disclosure for midcap companies To compare BRR standards of disclosure with international disclosure

7. Literature Review Companies appear to increasingly engage in disclosure related to their governance, environmental and social impacts (KPMG, 2011; KPMG 2013 ) Bloomberg ESG disclosure score as proxies for management quality (Eccles et.al 2011, Nabil et al 2017) lack of completeness and credibility of CSR information (Adams, 2004; Adams and Evans, 2004; Dando and Swift, 2003 ; Doane , 2000; Gray , 2010) Lack of potential benefits from disclosures to investors and financial stakeholders (Bird et al., 2007; Cormier et al., 2005; Dhaliwal et al., 2012; Dhaliwal et al. 2014 )

8. Research Methodology- Sample 500 cos chosen as per market cap Excluded top 100 Removed banking and financial, service, information technology and consultancy companies Random sample of 25 cos Content analysis for 2016-2019 BRR

9. Sr No Company name Company Industry Type Incorporation year NSE first traded date 1 ADVANCED ENZYME TECHNOLOGIES LTD. Other chemical products 1989 01-08-2016 2 ATUL LTD. Other chemical products 1975 15-11-1994 3 CASTROL INDIA LTD. Lubricants 1979 03-11-1994 4 CEAT LTD. Tyres & tubes 1958 03-11-1994 5 DILIP BUILDCON LTD. Other construction & allied activities 2006 11-08-2016 6 D L F LTD. Other construction & allied activities 1963 05-07-2007 7 DR. REDDY'S LABORATORIES LTD. Drugs & pharmaceuticals 1984 03-11-1994 8 EMAMI LTD. Drugs & pharmaceuticals 1983 03-08-2006 9 ENDURANCE TECHNOLOGIES LTD. Other automobile ancillaries 1999 19-10-2016 10 HONEYWELL AUTOMATION INDIA LTD. Other electronics 1984 04-01-1995 11 I R B INFRASTRUCTURE DEVELOPERS LTD. Infrastructural construction 1998 25-02-2008 12 KALPATARU POWER TRANSMISSION LTD. Infrastructural construction 1981 10-05-1995 13 MAHARASHTRA SCOOTERS LTD. Other fund based financial services 1975 04-01-1995 14 MAHANAGAR GAS LTD. Natural gas trading & distribution 1995 01-07-2016 15 MINDA CORPORATION LTD. Other automobile ancillaries 1985 30-12-2011 16 NATIONAL ALUMINIUM CO. LTD. Aluminium & aluminium products 1981 03-11-1994 17 NATIONAL FERTILIZERS LTD. Fertilisers 1974 28-12-2006 18 OIL INDIA LTD. Crude oil & natural gas 1959 30-09-2009 19 PRAJ INDUSTRIES LTD. Industrial machinery 1985 22-05-1995 20 RALLIS INDIA LTD. Pesticides 1948 30-11-1994 21 SUPREME INDUSTRIES LTD. Plastic furniture 1942 30-11-1994 22 T G B BANQUETS & HOTELS LTD. Hotels & restaurants 1999 17-05-2007 23 THERMAX LTD. Boilers & turbines 1980 14-06-1995 24 TITAN COMPANY LTD. Gems & jewellery 1984 03-11-1994 25 VARDHMAN TEXTILES LTD. Cotton & blended yarn 1973 19-01-1995

10. Principle 1: Ethics Transparency and Accountability

11. Principle 2: Product Lifecycle

12. Principle 3: Employee Wellbeing

13. Principle 4: Stakeholder Engagement

14. Principle 5: Human Rights

15. Principle 6: Environment

16. Principle 7: Public Advocacy

17. Principle 8 : Inclusive Growth

18. Principle 9: Customer value

19. Results & Sugesstion Evidence indicating that disclosures by GRI followers are more likely to be balanced, comparable and precise as compare to BRR . As compare to Nifty 100 companies disclosure quality, there is scope for improvement for midcap cos. For investors for comparing with companies, the data type and disclosure should be standardize so that it can be compared and used for more advanced study . Making awareness among institutional investors, Asset manager and companies about the importance of ESG reporting and how to incorporate the ESG factors in investment decision making. Although in India, companies are complaint under different regulators, the same kind of data can be disclosed under BRR .

20. References Eccles, R.G., Ioannis , I. and Serafeim , G. (2014), “The impact of corporate sustainability on organizational processes and performance”, Management Science, Vol. 60 No. 11, pp. 2835-2857 . KPMG. (2011). KPMG International Survey of Corporate Responsibility Reporting. KPMG International Cooperative. KPMG. (2013). KPMG International Survey of Corporate Responsibility Reporting. KPMG International Cooperative.

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