WHAT IS AN ANNUAL SECRETARIAL COMPLIANCE REPORT (ASCR) UNDER SEBI LODR?

 WHAT IS AN ANNUAL SECRETARIAL COMPLIANCE REPORT (ASCR) UNDER SEBI LODR?

SEBI by Regulation 24A(2) of the SEBI (LODR) Regulations, 2015 prescribed that “Every listed entity shall submit a secretarial compliance report in such form as specified, to stock exchanges, within sixty days from end of each financial year.(30th May 2025)

 

APPLICABILITY

·      Applicable to all listed entities (whose equity shares are listed on stock exchanges).

·      Specifically required under Regulation 24A of SEBI LODR, read with SEBI circular CIR/CFD/CMD1/27/2019 dated February 8, 2019.

CONTENTS OF THE REPORT

The report includes:

·      Review of compliance with SEBI laws and regulations during the financial year.

·      Observations and comments of the Peer-viewed PCS regarding:

·      Any non-compliance

·      Deviations

·      Actions taken by the company

·      Details of actions taken by SEBI or stock exchanges (if any) and the company’s response.

·      The recently added regulation 46(2)(za) of the LODR Regulations. Which states that “Employee Benefit Scheme Documents, excluding commercial secrets and such other information” is required to be disclosed on the website of the listed entities.

·      All the Peer-Viewed Practising Company Secretaries while issuing the compliance report is required to give confirmation of the aforesaid disclosure on the website of the listed entity in the latest prescribed format.

WHETHER AN LISTED COMPANY'S MATERIAL UNLISTED SUBSIDIARIES HAS TO FILE ANNUAL SECRETARIAL COMPLIANCE REPORT?

Under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR), the requirement to file the Annual Secretarial Compliance Report is primarily applicable to listed entities, not directly to their subsidiaries — whether listed or unlisted.

However, there are nuances:

MATERIAL UNLISTED SUBSIDIARY:

The material unlisted subsidiary itself is not required to file the ASCR under SEBI LODR directly, because the regulation applies to listed companies. However:

The listed parent company must ensure compliance with provisions related to its material unlisted subsidiaries, such as having an independent director on the board of such subsidiaries (Regulation 24).

The operations of the material unlisted subsidiary may be covered in the parent company's ASCR in terms of compliance oversight.

Material unlisted subsidiaries do not have to file the SEBI Annual Secretarial Compliance Report themselves.

Only the listed parent company has to file this.

However, such subsidiaries may still be subject to secretarial audit under the Companies Act, 2013.

CONSEQUENCES OF NON-COMPLIANCE

Failure to submit the Annual Secretarial Compliance Report may result in:

·      Penalties by stock exchanges

·      Possible SEBI action

·      Negative impact on corporate governance ratings

R V SECKAR, FCS, LLB

79047 19295