*MCA UPDATES*

*MCA UPDATES*

*MCA21 system will be intermittently unavailable* from Saturday, 09 Feburary 2019 10:00 PM to Sunday, 10th Feburary 2019 10.00 AM IST *due to maintenance activity* Stakeholders are requested to plan accordingly.*_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _*
*_Format for annual secretarial audit report and annual secretarial compliance report for listed entities and their material subsidiaries_* 1.   The Committee on Corporate Governance, constituted under the Chairmanship of Shri Uday Kotak, in its report dated October 05, 2017, recommended the following in view of the *criticality of secretarial functions to efficient board functioning*
a.    *Secretarial audit to be made compulsory for all listed entities* under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Regulations”) in line with the provisions of the Companies Act, 2013.b.    Secretarial audit to be *extended to all material unlisted Indian subsidiaries in line with the recommendations* of the Committee on strengthening group oversight and improving compliance at a group level for listed entities.
2.    The aforesaid *recommendations were accepted* and in order to implement the same, the  SEBI (Listing  Obligations and Disclosure Requirements) Regulations, 2015 have been *amended* to include the following Regulation 24A:
*“24A: Secretarial Audit*_Every listed entity and its material unlisted subsidiaries incorporated in India shall undertake secretarial audit and shall annex with its  annual report, a secretarial audit report, given by a company secretary in practice, in such form as may be prescribed with effect from the year ended March 31, 2019.”_
3.    Accordingly, the following shall be *complied with by a listed entity and its material unlisted subsidiaries* as applicable:
a.    *Annual secretarial audit report*(i)    Currently, Section 204 of the Companies Act, 2013 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel)  Rules,  2014  requires  Secretarial  Audit  by  Practicing Company  Secretaries  (PCS)  for  listed  companies  and  certain unlisted companies above a certain threshold in From No. MR-3.(ii)    In order to avoid duplication, the listed entity and its unlisted material subsidiaries shall continue to use the same *Form No. MR-3 as required* under Companies Act, 2013 and the rules made thereunder for the purpose of compliance with Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as well.
b.    *Annual secretarial compliance report*(i)    While the annual secretarial audit shall cover a broad check on compliance with all laws applicable to the entity, listed entities shall additionally, on an annual basis, require a check by the PCS on compliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunder, consequent to which, the PCS shall submit a report to the listed entity in the manner specified in this circular.(ii)    The *format for the annual secretarial compliance report is placed at Annex-A*(iii)    The annual secretarial compliance report in the aforesaid format shall be submitted by the listed entity to the stock exchanges within 60 days of the end of the financial year.c.    The listed entities and their material subsidiaries shall provide all such documents/information as may be sought by the PCS for the purpose of providing a certification under the Regulations and this circular.
4.    *ICSI may consider issuing a guidance note to Practising Company Secretaries* to enable them  to undertake certifications in accordance with the Regulations and this circular in letter and in spirit.
5.    The Stock Exchanges are advised to bring the provisions of this circular to notice of the listed entities and also to disseminate on their websites.
6.    This *circular shall come into force* as under:a.    With respect to the annual secretarial audit report, in the annual reports of the listed entities and the material unlisted subsidiaries from the financial year ended March 31, 2019 onwards.b.    With respect to the annual secretarial compliance report, applicable to listed entities, with effect from the financial year ended March 31, 2019 on wards.
7.    The circular is issued in exercise of the powers conferred under sections 11 and 11A of the Securities and Exchange Board of India Act, 1992 read with Regulations 24A and 101 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
8.    The circular is available on SEBI website.

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