Comparative Analysis of the Old & New Format of Annual Secretarial Compliance Report (ASCR)
- Blog|Company Law|
- 3 Min Read
- By Taxmann
- |
- Last Updated on 23 December, 2023
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The ICSI has recently revised the format of the Annual Secretarial Compliance Report (ASCR) to make it easier for Practising Company Secretaries to issue the ASCR. The SEBI vide. Notification Dated May 5, 2021, inserted Regulation 24A in SEBI (LODR) Regulations, 2015. This regulation requires a listed entity and its material unlisted Indian subsidiaries to annex an ASCR by the PCS in its annual report.
In addition to this, the SEBI vide. Circular No. Dated October 18, 2019, prescribed certain provisions relating to the resignation of statutory auditors from listed entities and their material subsidiaries that must be included in the ASCR.
Further, both the Stock Exchanges i.e. BSE Ltd. and NSE Ltd. vide circulars dated March 16, 2023, and April 10, 2023, respectively prescribed a few additional affirmations by PCS that need to be provided while submitting the Annual Secretarial Compliance Report.
In this regard, the Institute felt the need to provide a format that collates all the amendments for the ease of the Company Secretaries in Practice (PCS) issuing ASCR.
This write-up aims to highlight the comparative analysis of the key changes in the newly introduced format of the Annual Secretarial Compliance Report as under:
| S No. | Particulars | Old ASCR format | New ASCR format | Comments |
| 1. | Enhanced Reporting Requirements for listed entities; Detailed Compliance status based on a specific checklist | In the old format, listed entities were only required to showcase the exceptions where it has not complied with the provisions along with the observations/remarks of the Practising Company Secretary. | In the new format, the listed entities are provided with a specific checklist of the applicable laws, regulations, secretarial standards, etc. that must be complied with. They are required to mark the status of compliance as yes or no., along with observations/remarks by PCS. | The new format promotes greater transparency and accountability by providing a clear and concise compliance checklist that ensures listed entities comply with all applicable laws. |
| 2. | Introduction of ‘compliances related to the resignation of statutory auditors’ from listed entities and their material subsidiaries | In the old format, there was no clause present that gave information regarding instances of compliance or non-compliance related to the resignation of statutory auditors. | In the new format, a new section has been introduced that requires listed entities to provide details about compliance related to the resignation of statutory auditors from their material subsidiaries. Now, listed entities must mark their compliance/non-compliance in status sheet. Also, the Practising CS must provide observations/remarks regarding compliance related to the resignation of an auditor. | The requirement to mark compliance status in the sheet will likely lead to increased compliance and non-compliance will be more closely monitored. Further, SEBI prescribed certain provisions relating to the resignation of statutory auditors that must be included in the ASCR. Thus, the new format aims to bring it in line with the SEBI circular. |
| 3. | Enhanced disclosures are to be made in the exception box | In the old format, there was a table that specified instances of exceptions to compliances with applicable laws, regulations, etc. as well as deviations. The PCS was specifically required to mention any deviations and provide observations/remarks on the same. | The new format introduces a more detailed table specifying the exceptions in compliance with various provisions of the Regulations and circulars/guidelines issued thereunder. Now, PCS is required to specify details of deviations, actions taken, the type of action, violation details, fine amount, etc. This new table will enhance the disclosures provided in the Compliance Report, making it more informative. | The new format will increase transparency and accountability in compliance reporting. Also, the inclusion of violation details and fine amounts will provide greater visibility into non-compliance issues. |
| 4. | Enhanced disclosure requirements w.r.t violation and action taken by listed entity/material subsidiaries | Earlier, in the old format, PCS was required to specifically mention the details of violation as well as details of actions taken by listed entity/material subsidiaries e.g. fines, warning letters etc. Also, PCS was required to provide observations/remarks on actions taken and his comments on such actions. | With the introduction of the new format for the report, disclosure norms have been enhanced. The PCS is required to provide more detailed information on deviations, actions taken, type of action, details of violation, management response, and fine amount. | The enhanced disclosure norms will ensure proper identification and addressing of deviations and non-compliance issues, resulting in more transparent and accountable disclosure norms. |
| 5. | Mandatory mentioning of UDIN and PR No. | In the old format of the Annual Secretarial Compliance Report, the Practising Company Secretary was only required to mention their name, ACS/FCS No. and CP No. (Certificate of Practise number.) | In the new format, in addition to the information required in the earlier format, the PCS must also provide their Unique Document Identification Number (UDIN) and Professional Registration (PR) number. | The addition of UDIN and PR number in the new format will improve accuracy and transparency. This change helps to track the work of PCS and strengthens corporate governance. |
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