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In due diligence for foreign collaboration, which approval route under FDI policy allows investment without prior government approval, subject to sectoral caps and conditions?

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2026 Statistics

Key Facts: CS Professional CMADD Exam

100

Marks (Descriptive Paper)

ICSI Syllabus

3 hrs

Exam Duration

ICSI

40 / 60

Compliance vs Audit Marks

ICSI Study Material

MR-3

Secretarial Audit Form

Section 204, Companies Act 2013

40%

Minimum Pass Mark

ICSI Regulations

This paper is a 100-mark, 3-hour offline descriptive examination in the ICSI CS Professional Programme, split into Compliance Management (40 marks) and Audit & Due Diligence (60 marks). It tests Section 204 secretarial audit in Form MR-3, secretarial standards SS-1 and SS-2, internal audit and controls, and due diligence for issue of securities, M&A, bank, competition, and foreign collaboration. The real ICSI paper is subjective, not MCQ; this bank offers 100 MCQs as knowledge prep aligned to the syllabus. The pass standard is 40% in the paper and 50% aggregate in the group.

Sample CS Professional CMADD Practice Questions

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1Under Section 204 of the Companies Act, 2013, the Secretarial Audit Report must be issued in which prescribed form?
A.Form MGT-7
B.Form MR-3
C.Form AOC-4
D.Form MR-1
Explanation: Section 204 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 requires the Secretarial Audit Report to be in Form MR-3, annexed to the Board's Report under Section 134(3).
2Which professional is authorised under the Companies Act, 2013 to conduct and sign the Secretarial Audit Report in Form MR-3?
A.An advocate enrolled with a State Bar Council
B.A Chartered Accountant in practice
C.A Cost Accountant in practice
D.A Company Secretary in practice
Explanation: Section 204 specifies that secretarial audit shall be conducted by a Company Secretary in Practice (PCS). The PCS independently verifies compliance with applicable laws and reports in Form MR-3.
3A public company has a paid-up share capital of Rs 60 crore but a turnover of only Rs 80 crore. Is secretarial audit under Section 204 mandatory for it?
A.Yes, only if it is also a subsidiary of a listed entity
B.No, because its turnover is below Rs 250 crore
C.Yes, because its paid-up capital is Rs 50 crore or more
D.No, because only listed companies require secretarial audit
Explanation: Rule 9 makes secretarial audit mandatory for every public company with paid-up capital of Rs 50 crore or more OR turnover of Rs 250 crore or more. The thresholds are alternative, so meeting the paid-up capital test alone triggers applicability.
4Under the rules, a company with outstanding loans or borrowings from banks or public financial institutions of which amount or more must obtain secretarial audit?
A.Rs 100 crore
B.Rs 250 crore
C.Rs 500 crore
D.Rs 50 crore
Explanation: Rule 9 of the Companies (Appointment and Remuneration) Rules extends secretarial audit to every company having outstanding loans or borrowings from banks or public financial institutions of Rs 100 crore or more, irrespective of capital or turnover.
5The Secretarial Audit Report in Form MR-3 is required to be annexed to which document of the company?
A.The Auditor's Report on financial statements
B.The Board's Report prepared under Section 134(3)
C.The Notice of the Annual General Meeting
D.The Directors' Responsibility Statement only
Explanation: Section 204(1) requires the Secretarial Audit Report to be annexed to the Board's Report prepared under Section 134(3). This ensures shareholders receive the compliance assessment along with the directors' report.
6Effective from April 1, 2025, under amended SEBI LODR Regulation 24A, the secretarial auditor of a listed entity must additionally satisfy which qualification requirement?
A.Hold a post-qualification diploma in corporate governance
B.Be a Chartered Accountant with a UDIN
C.Be a Peer Reviewed Company Secretary holding a valid peer review certificate from ICSI
D.Be empanelled with the stock exchange
Explanation: Following the SEBI LODR (Third Amendment) Regulations, 2024, from April 1, 2025 the secretarial auditor appointed for a listed entity must be a Peer Reviewed Company Secretary with a valid ICSI peer review certificate, strengthening audit quality.
7Under Regulation 24A of SEBI (LODR) Regulations, 2015, the Annual Secretarial Compliance Report must be submitted to the stock exchanges within how many days from the end of the financial year?
A.90 days
B.30 days
C.45 days
D.60 days
Explanation: Regulation 24A requires listed entities to submit the Annual Secretarial Compliance Report to the stock exchanges within 60 days from the end of each financial year, certifying compliance with applicable SEBI regulations and circulars.
8The Secretarial Standards SS-1 and SS-2 issued by ICSI deal respectively with which matters?
A.Board meetings and General meetings
B.Dividend and Annual return
C.Maintenance of registers and Audit
D.Related party transactions and Disclosures
Explanation: SS-1 is the Secretarial Standard on Meetings of the Board of Directors and SS-2 is the Secretarial Standard on General Meetings. Both are mandatory under Section 118(10) of the Companies Act, 2013.
9Compliance by a company with the applicable Secretarial Standards has been made mandatory by which provision of the Companies Act, 2013?
A.Section 92(1)
B.Section 118(10)
C.Section 134(3)
D.Section 173(1)
Explanation: Section 118(10) provides that every company shall observe Secretarial Standards specified by ICSI with respect to general and board meetings and approved by the Central Government, giving SS-1 and SS-2 statutory binding force.
10Which of the following best describes 'due diligence' in the context of a business transaction?
A.An internal payroll reconciliation exercise
B.A statutory audit of annual financial statements
C.A pre-emptive investigative process to assess risks and verify facts before a transaction
D.A post-transaction tax assessment by authorities
Explanation: Due diligence is a pre-emptive, investigative process undertaken before a transaction to provide the desired comfort level and minimise risks such as hidden liabilities, poor growth prospects, or overvaluation, enabling an informed decision.

About the CS Professional CMADD Practice Questions

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