As the May 30, 2025 deadline approaches, listed companies must prioritize compliance with Regulation 24A of the SEBI Listing Obligations and Disclosure Requirements (LODR). This comprehensive guide explains everything you need to know about the Annual Secretarial Compliance Report, why it matters, and how to ensure your company meets all requirements on time.
What is the Annual Secretarial Compliance Report?
The Annual Secretarial Compliance Report (ASCR) is a mandatory disclosure required by the Securities and Exchange Board of India (SEBI) from all listed entities. Introduced through an amendment to the SEBI LODR in 2021, this report serves as an independent assessment of a company’s compliance with securities laws and regulations.
Unlike standard secretarial audits, the ASCR specifically focuses on securities law compliance and must be prepared by the Secretarial Auditor or by a peer reviewed Practicing Company Secretary (PCS) who conducts an independent examination of records, documents, and compliance systems.
Regulatory Framework and Legal Basis
The requirement for the Annual Secretarial Compliance Report stems from:
- Regulation 24A of SEBI (LODR) Regulations, 2015: Mandates that every listed entity must submit a secretarial compliance report annually
The report must be submitted to stock exchanges within 60 days from the end of each financial year, making May 30, 2025, the deadline for companies following the standard April-March financial year.
Who Needs to Comply?
The following entities must submit the Annual Secretarial Compliance Report:
- All listed companies: Companies with equity shares listed on recognized stock exchanges
Exemptions: Certain entities may be exempt based on specific SEBI notifications, including:
- Companies exclusively listed on SME exchanges
- Companies having paid up equity share capital not exceeding Rs. 10 crore and net worth not exceeding Rs. 25 crore, as on the last day of the previous financial year.
If these provisions become applicable to a listed entity at a later date, it shall ensure compliance with the same within 6 months from such date.
If these provisions become applicable they shall continue to apply till equity share capital and net worth reduces and remains below the specified threshold for a period of 3 consecutive financial years.
Report Contents and Format Requirements
The Annual Secretarial Compliance Report must follow the prescribed format and include:
1. Compliance with SEBI Regulations
Detailed examination of compliance with all applicable 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 (Prohibition of Insider Trading) Regulations, 2015
- SEBI (Buyback of Securities) Regulations, 2018
- SEBI (Share Based Employee Benefits) Regulations, 2021
- Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021
2. Compliance with Circulars and Guidelines
Verification of adherence to:
- Circulars and guidelines issued by SEBI
- Notices from stock exchanges
- Other securities-related directives
3. Deviations and Actions Taken
The report must explicitly highlight:
- Any deviations from regulatory requirements
- Observations made during the examination
- Actions taken by the company to address previous non-compliance
- Corrective measures implemented
- Details of Violation
- Fine Amount
- Remarks of the Practicing Company Secretary
- Management Response
4. Format Specifications
The report must follow the format prescribed by Institute of Company Secretaries of India (ICSI).
Step-by-Step Compliance Process (Recommended timeline: April-May 2025)
Phase 1: Preparation
- Appoint a qualified PCS (only if the listed entity does not want the report to be signed by Secretarial Auditor): Select a Peer Reviewed Practicing Company Secretary with expertise in securities laws
- Gather documentation: Compile all relevant records including:
- Board and committee meeting minutes
- Statutory Registers
- All SEBI and stock exchange filings
- Compliance certifications and reports
- Stock Exchange communications
- Website disclosures
Phase 2: Examination
- Conduct preliminary assessment: The Secretarial Auditor/ PCS will review:
- Compliance frameworks and systems
- Previous years’ observations and action taken reports
- Changes in applicable regulations during the year
- Detailed verification: Thorough examination of:
- Board composition and committees
- Related party transactions
- Corporate governance requirements
- Disclosure compliance
- Event-based compliance (e.g., corporate actions)
- Structured Digital Database
Phase 3: Reporting and Submission
- Draft report preparation: The Secretarial Auditor/ PCS prepares the initial report highlighting:
- Compliance status
- Observations
- Recommendations
- Management review: Company management reviews the draft and provides explanations or documentation for any noted deviations
- Final report issuance: The Secretarial Auditor/ PCS issues the final signed report
- Submission to stock exchanges: File the report to the stock exchange(s) before May 30, 2025 in PDF and XBRL.
- Public disclosure: Ensure the report is available on the company’s website as required.
Penalties for Non-Compliance
Failure to submit the Annual Secretarial Compliance Report by the deadline can result in:
- Financial penalties: Fines starting from ₹2,000 per day of non-compliance, potentially escalating based on the nature and duration of the violation
- Trading restrictions: Stock exchanges may impose limitations on trading of the company’s securities
- Enhanced scrutiny: Placement under increased regulatory surveillance
- Reputational damage: Loss of investor confidence and negative market perception
- Personal liability: In severe cases, directors and key officers may face legal consequences
- Stock exchange actions: Potential entire freezing of entire shareholding of the promoter(s) in extreme cases.
Best Practices for Streamlined Compliance
- Adopt a proactive stance: Treat compliance as an ongoing process rather than an annual event
- Digitize compliance management: Implement specialized software for real-time monitoring and documentation
- Establish clear ownership: Designate specific responsibility for each compliance area with accountability mechanisms
- Conduct regular internal audits: Schedule quarterly reviews to identify and address issues promptly
- Document everything: Create audit trails for all compliance-related actions and decisions
- Implement a compliance calendar: Set internal deadlines well ahead of regulatory timeframes
- Learn from past observations: Establish a system to track and address previous years’ findings
- Benchmark against peers: Stay informed about industry best practices and common pitfalls
Frequently Asked Questions
Q1: What is the difference between a Secretarial Audit Report and an Annual Secretarial Compliance Report?
A: While both reports assess regulatory compliance, they differ significantly:
- Secretarial Audit Report: Required under Section 204 of the Companies Act, 2013, covers compliance with all corporate and economic laws, and is filed with the Registrar of Companies as an annexure to the Board’s Report.
- Annual Secretarial Compliance Report: Mandated by SEBI under Regulation 24A, focuses specifically on securities laws and SEBI regulations, and is submitted directly to stock exchanges.
Q2: Can the same PCS prepare both the Secretarial Audit Report and the Annual Secretarial Compliance Report?
A: Yes, the same Practicing Company Secretary can prepare both reports. In fact, this is often preferred for consistency and efficiency. However, the PCS must ensure that each report meets its specific requirements and follows the prescribed format.
Q3: Is the Annual Secretarial Compliance Report mandatory for newly listed companies?
A: Yes, newly listed companies must submit the report for the financial year in which they got listed. However, the scope of examination would be limited to the period starting from the listing date until the end of that financial year.
Q4: Can companies submit the Annual Secretarial Compliance Report after the May 30, 2025 deadline?
A: The report must be submitted by May 30, 2025. Late submission constitutes non-compliance and may attract penalties. In case of genuine difficulties, companies should proactively communicate with the stock exchanges, though this doesn’t guarantee exemption from penalties.
Q5: Is there a specific format for filing the report with stock exchanges?
A: Yes, the report must be submitted in the format prescribed by ICSI.
Q6: Should the Annual Secretarial Compliance Report include observations about all non-compliances, regardless of their materiality?
A: Yes, the report should include all observations related to securities laws compliance, regardless of perceived materiality. The PCS should not make subjective judgments about materiality – all deviations must be reported.
Q7: How should companies address observations from previous years’ reports?
A: Companies should implement an “Action Taken Report” mechanism that tracks all observations from previous reports and documents specific corrective actions taken. The current year’s report should explicitly mention these previous observations and the status of remedial measures.
Q8: Does the Annual Secretarial Compliance Report need to cover subsidiaries and joint ventures?
A: The report primarily covers the listed entity itself. However, for material unlisted subsidiaries (as defined in Regulation 16(1)(c) of SEBI LODR), separate reports are required. For other subsidiaries and joint ventures, the report covers only aspects that impact the listed entity’s compliance with securities laws.
Q9: Can the statutory auditor prepare the Annual Secretarial Compliance Report?
A: No, the report must be prepared by a Practicing Company Secretary or Secretarial Auditor specifically.
Q10: What is the liability of the PCS if the report contains incorrect information?
A: The PCS can face disciplinary action from the ICSI, potential regulatory action from SEBI, and may also be subject to legal proceedings for professional negligence. The PCS certification carries significant professional responsibility.
Conclusion
The Annual Secretarial Compliance Report represents more than just a regulatory checkbox—it’s a comprehensive governance tool that demonstrates your company’s commitment to transparency and compliance. By understanding the requirements and implementing a systematic approach to preparation, listed companies can transform this annual obligation into a strategic advantage.
As the May 30, 2025, deadline approaches, proactive companies that start the compliance process early will not only avoid penalties but also strengthen their corporate governance framework and enhance stakeholder confidence.
Click here to view the latest format of ASCR issued by ICSI.
Additional Resources
- SEBI Official Website
- ICSI Guidance Note on Annual Secretarial Compliance Report
- Stock Exchange Filing Platforms (BSE/NSE)
This article is for informational purposes only and does not constitute legal advice. Companies should consult with qualified legal and compliance professionals regarding their specific circumstances.
Ready to Ensure Your Compliance?
Don’t wait until the last minute to prepare your Annual Secretarial Compliance Report. The May 30, 2025 deadline approaches quickly!
Keywords: Annual Secretarial Compliance Report, SEBI Regulation 24A, listed company compliance, secretarial audit, corporate governance, LODR compliance, securities law compliance, stock exchange filing, compliance deadline 2025, practicing company secretary, regulatory compliance, SEBI LODR regulations, corporate secretarial compliance
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