Securities and Exchange Board of India (SEBI) on February 8, 2019, passed a Circular regarding a new format for annual secretarial audit report and annual secretarial compliance report for listed entities and the material subsidiaries. On October 05, 2017, the Committee on Corporate Governance in view of the criticality of secretarial functions to efficient board functioning, it was recommended that Secretarial audit should be made compulsory for all the listed entities and also recommended that audit to be extended to all Material unlisted Indian subsidiaries.
The above recommendation was accepted and SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 has been amended to include Regulation 2A which defines “secretarial audit” that is every listed entity and its material unlisted subsidiaries in India should undertake secretarial audit and should annex its annual report in the manner as prescribed, from the year ended march 31, 2019.
Currently under section 204 of the Companies Act, 2013, the entities are required to file an annual secretarial audit report by practicing company secretaries. The reports are meant to keep a tab on entities regarding compliance with applicable laws.
The Annual secretarial compliance report should be submitted to the exchanges within 60 days of the end of the financial year. The format is placed in Annex-A (Page No. 4).
The listed entities and their material subsidiaries would have to provide relevant documents and information to the practicing company secretary in order to obtain the certification.
[Circular No. CIR/CFD/CMD1/27/2019]