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Understanding the Format of Annual Secretarial Compliance Report: A Complete Guide for CS Professionals

In the corporate compliance landscape, Regulation 24A(2) of the SEBI (LODR) Regulations, 2015 mandates all listed companies to submit an Annual Secretarial Compliance Report (ASCR). This report, certified by a Practising Company Secretary (PCS), ensures that the listed entity has complied with various SEBI laws, circulars, and regulations.

In this post, we break down the format and key components of the report that every CS student and professional must understand.

๐Ÿ“Œ What is the Annual Secretarial Compliance Report?

The ASCR is a formal, regulatory document that verifies whether a listed entity has complied with:

  • SEBI Act, 1992 and its rules

  • Securities Contracts (Regulation) Act, 1956

  • SEBI (LODR) Regulations, 2015 and other applicable SEBI regulations

It must be submitted within 60 days of the financial year's end.

๐Ÿข Header and Certification

The report is to be issued on the letterhead of the PCS, addressed to the listed company, certifying the compliance for the financial year. The PCS examines:

  • Company documents

  • Stock exchange filings

  • Website disclosures

  • Other relevant records

๐Ÿ“˜ Key SEBI Regulations Covered

Some of the major SEBI regulations examined include:

  • SEBI (LODR) Regulations, 2015

  • SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018

  • SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011

  • SEBI (Buyback of Securities) Regulations, 2018

  • SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021

  • SEBI (Prohibition of Insider Trading) Regulations, 2015

(Note: List to be customised as per the entity’s applicable laws.)

๐Ÿ” Section A: Current Year Compliance Deviations

This section reports any deviations or non-compliances observed during the review period, along with:

  • Specific Regulation/Clause

  • Nature of Deviation

  • Action Taken (Fine, Advisory, Show Cause, etc.)

  • Observations/Remarks by PCS

  • Management’s response

๐Ÿ” Section B: Follow-up on Previous Observations

If the PCS made observations in the previous year(s), this section records:

  • Status of compliance

  • Actions/remedies taken by the entity

  • Comments by PCS on the adequacy of the actions taken

๐Ÿ“‹ Section C: Detailed Compliance Checklist

A tabular format records the compliance status (Yes/No/NA) and PCS remarks for various parameters:

  1. Secretarial Standards

  2. Policy Adoption & Timely Updates

  3. Website Maintenance & Disclosures

  4. Director Disqualifications

  5. Subsidiary Disclosures

  6. Preservation of Documents

  7. Board and Committee Performance Evaluation

  8. Related Party Transactions

  9. Disclosure under Regulation 30 (LODR)

  10. Insider Trading Compliance

  11. SEBI/Exchange Actions

  12. Resignation of Statutory Auditors

  13. Any Additional Non-Compliance

๐Ÿ“Ž Disclosure of Employee Benefit Schemes

This is specifically reported under Regulation 46(2)(za) of the SEBI LODR Regulations, ensuring entities comply with employee benefit documentation disclosures.

⚠️ Assumptions and Limitations

At the end, the PCS outlines the scope and limitations of the report:

  • Management holds responsibility for compliance

  • PCS reports are based only on documents/explanations provided

  • It is not an audit or assurance on future performance

๐Ÿ–‹️ Signature and Certification

The report is concluded with:

  • PCS Signature

  • ACS/FCS and CP Number

  • UDIN and Peer Review/Firm Registration Details

๐Ÿ“Œ Final Thoughts

For CS students and professionals, the ASCR serves as a comprehensive template for assessing SEBI compliance. Mastering this format helps in:

  • Drafting and certifying reports

  • Preparing for audits

  • Identifying governance gaps

๐Ÿ“ฅ Downloadable Format

You can refer to the full official format as prescribed by SEBI here (link to original PDF or company source).

1. What is the purpose of the Annual Secretarial Compliance Report (ASCR)?

Answer:
The ASCR serves as a regulatory tool to ensure that a listed entity has complied with applicable provisions of SEBI regulations during a financial year. Certified by a Practising Company Secretary (PCS), it provides an independent confirmation of the company’s adherence to corporate governance norms, disclosure requirements, insider trading rules, and other relevant SEBI guidelines. The report enhances transparency and accountability and helps stakeholders assess the compliance health of a company.

2. Who is responsible for preparing and certifying the ASCR?

Answer:
The ASCR must be certified by a Practising Company Secretary (PCS). The PCS conducts a detailed review of various documents, records, and filings of the listed entity. Based on this examination, the PCS provides its professional opinion on whether the company has complied with the relevant laws and regulations during the review period.

3. What is the deadline for submitting the ASCR?

Answer:
The ASCR is required to be submitted within 60 days from the end of the financial year. For instance, for the financial year ending March 31st, the ASCR must be submitted by May 30th of the same calendar year.

4. Which regulations are typically reviewed in the ASCR?

Answer:
The ASCR covers a wide range of SEBI regulations, including but not limited to:

  • SEBI (LODR) Regulations, 2015

  • SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018

  • SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011

  • SEBI (Buyback of Securities) Regulations, 2018

  • SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021

  • SEBI (Prohibition of Insider Trading) Regulations, 2015

The applicable regulations are selected based on the nature and operations of the listed entity.

5. What types of documents does a PCS examine while preparing the ASCR?

Answer:
A PCS reviews a wide array of documents, including:

  • Corporate filings with stock exchanges

  • Board and committee resolutions

  • Disclosures on the company’s website

  • Statutory registers and compliance records

  • Minutes of meetings

  • Previous years’ compliance reports
    These documents help the PCS determine the company’s adherence to SEBI norms and circulars.

6. How are non-compliances reported in the ASCR?

Answer:
Non-compliances are detailed in a tabular format, listing:

  • The regulation or circular violated

  • Nature of the deviation

  • Actions taken (fine, warning, show cause, etc.)

  • Remarks from PCS

  • Response from management

This ensures accountability and helps track the company's efforts to resolve regulatory issues.

7. What is the significance of reporting past observations in the ASCR?

Answer:
The ASCR requires the PCS to comment on whether past observations have been addressed. This historical review:

  • Ensures continuity in compliance tracking

  • Highlights persistent or unresolved issues

  • Holds management accountable for remedial actions

If past observations are not addressed, they are flagged again to prompt corrective measures.

8. How is compliance with Secretarial Standards reported?

Answer:
The PCS must verify whether the company has complied with Secretarial Standards (SS-1 and SS-2) issued by the ICSI. These standards govern board and general meetings. Compliance status is marked as ‘Yes’, ‘No’, or ‘NA’ with accompanying remarks.

9. What role does website maintenance play in the ASCR?

Answer:
A listed company must maintain a functional website with:

  • Updated policies

  • Financial disclosures

  • Corporate governance reports

  • Web-links to filings as per Regulation 27(2) of SEBI LODR

The PCS verifies if the website is compliant and accessible to stakeholders.

10. How are Related Party Transactions (RPTs) addressed in the ASCR?

Answer:
The PCS must confirm:

  • Whether prior approval of the Audit Committee was obtained for all RPTs

  • If not, whether the transactions were later ratified/rejected
    This ensures transparency and prevents conflicts of interest in dealings with related parties.

11. Why is the performance evaluation of the board and directors checked?

Answer:
SEBI requires listed companies to conduct annual performance evaluations of:

  • The Board as a whole

  • Independent Directors

  • Committees

This helps assess the effectiveness of governance structures and is verified by the PCS during the review.

12. How is compliance with insider trading regulations verified?

Answer:
The PCS ensures the company has complied with:

  • Maintenance of structured digital databases (Regulation 3(5))

  • Access restrictions and log maintenance (Regulation 3(6))

These help in tracking and preventing insider trading violations.

13. What disclosures are required under Regulation 30 of SEBI LODR?

Answer:
Regulation 30 mandates the timely disclosure of material events or information. The PCS checks whether:

  • Such events were disclosed within prescribed timelines

  • The disclosures were complete and accurate

This builds investor confidence and ensures market transparency.

14. How is the disqualification of directors verified in the ASCR?

Answer:
The PCS confirms that none of the directors are disqualified under Section 164 of the Companies Act, 2013, based on declarations by the company and available records.

15. What is Regulation 46(2)(za) about and how is it reflected in the report?

Answer:
Regulation 46(2)(za) of SEBI LODR pertains to the disclosure of employee benefit schemes on the company's website. The PCS checks whether these schemes are published and whether they comply with SEBI norms.

16. What does the PCS declare at the end of the ASCR?

Answer:
The PCS includes:

  • Declaration of review methodology

  • Disclaimer that the report is not an audit or assurance

  • Confirmation of scope limitations
    This reinforces the objectivity and limited nature of the compliance report.

17. How are material subsidiaries addressed in the ASCR?

Answer:
The PCS examines:

  • Identification of material subsidiaries

  • Disclosure requirements under LODR
    This ensures that group-level governance is transparent and regulated.

18. What is the importance of the peer review number in the ASCR?

Answer:
The Peer Review Number confirms that the PCS’s practice is peer-reviewed by ICSI, adding credibility and ensuring adherence to professional standards in issuing the report.

19. What is a UDIN, and why is it mentioned in the ASCR?

Answer:
The Unique Document Identification Number (UDIN) is issued by ICSI to validate the authenticity of the PCS certificate. It prevents misuse and provides traceability of the certification.

20. What is the role of SEBI’s Standard Operating Procedures (SOPs)?

Answer:
If SEBI or Stock Exchanges take action under SOPs (e.g., fines, suspensions), these actions must be mentioned in the ASCR. This helps stakeholders assess the compliance track record of the company.

21. What happens if a statutory auditor resigns?

Answer:
In case of resignation of auditors, the PCS checks whether:

  • The company has disclosed the reasons

  • SEBI circulars and LODR provisions were complied with
    This ensures accountability and transparency in audit practices.

22. What does the section on document preservation cover?

Answer:
The PCS verifies that the listed entity has policies for:

  • Preservation of statutory records

  • Timely disposal of documents
    This is a compliance requirement under SEBI LODR Regulations.

23. What is the implication of ‘NA’ (Not Applicable) in compliance status?

Answer:
‘NA’ indicates a regulation was not applicable during the review period. The PCS must provide reasons for marking NA to prevent misuse and ensure transparency.

24. Why is the adoption and timely update of policies emphasised?

Answer:
SEBI requires all governance-related policies to be:

  • Approved by the Board

  • Periodically reviewed

  • Updated as per the latest SEBI guidelines

The PCS checks whether this protocol is followed to maintain compliance integrity.

25. Can the PCS rely solely on management explanations for the ASCR?

Answer:
No. While management input is necessary, the PCS must verify through documentation, website checks, and stock exchange filings to ensure objective reporting.

26. What is the scope of a PCS in the ASCR?

Answer:
The PCS’s role is limited to reporting based on examination of records. It does not include:

  • Financial auditing

  • Expressing assurance

  • Predicting future viability

This limitation is clearly stated in the report.

27. What if a company fails to file the ASCR?

Answer:
Non-submission or delayed submission of the ASCR can attract penalties under the SEBI LODR Regulations. It also reflects poorly on the company’s governance and compliance culture.

28. What is the significance of the actions taken by SEBI in the ASCR?

Answer:
Any actions (fines, bans, notices) taken by SEBI or Stock Exchanges during the review period must be reported. This helps investors and regulators assess the seriousness of compliance failures.

29. Why is this report crucial for company secretary students?

Answer:
For CS students, the ASCR:

  • Provides hands-on exposure to regulatory compliance

  • Reinforces understanding of SEBI LODR provisions

  • Prepares them for practical responsibilities as PCS or in listed entities

30. How can a company ensure better ASCR compliance?

Answer:
Companies should:

  • Maintain detailed and organised records

  • Regularly review SEBI updates and amend policies

  • Conduct internal secretarial audits

  • Train compliance teams

  • Use compliance management tools

This proactive approach minimises the risk of non-compliance and builds investor trust.

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