Stewardship Codes for institutional investors
Issued by SEBI, IRDAI and PFRDA, stewardship codes require institutional investors to actively engage with investee companies on governance and voting.
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CS
Company Secretary interview questions
96 questions available.
Difficulty
Independent Director appointment process under listed-entity framework
NRC recommends → Board approves → Shareholders pass Special Resolution; ID must be on IDDB, pass online proficiency test and meet independence criteria.
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Role of the Company Secretary as a Key Managerial Personnel (KMP)
CS ensures board procedures, compliance with laws, secretarial standards, advises board on governance and acts as principal officer for ROC and SEBI filings.
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Whistle-blower mechanism / Vigil Mechanism — Section 177(9)
Mandatory for listed companies, those accepting deposits, and those with bank borrowings > ₹50 cr. Direct access to Chairman of Audit Committee for complainants.
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Corporate Social Responsibility (CSR) — applicability and compliance
Applicable where net worth ≥ ₹500 cr, turnover ≥ ₹1000 cr or net profit ≥ ₹5 cr. Spend 2% of average net profit on Schedule VII activities.
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Board committees mandated under LODR — composition and purpose
Audit, Nomination & Remuneration, Stakeholders Relationship, Risk Management and CSR are the five mandatory committees for listed entities.
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What is the role of an Independent Director under the Companies Act, 2013?
Independent directors safeguard minority interests, bring objective judgment to board decisions, head key committees and review board performance.
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Reporting fraud during Secretarial Audit — Section 143(12) read with Section 204
If PCS suspects fraud, report to Audit Committee/Board if < ₹1 cr, and to Central Government via ADT-4 within 60 days if ≥ ₹1 cr.
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Difference between Secretarial Audit and Annual Secretarial Compliance Report (ASCR)
MR-3 under §204 covers all laws; ASCR under LODR Reg. 24A covers only SEBI regulations. Different signatories, different filing channels.
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Common qualifications in MR-3 reports — what to look for
Late filings, non-constitution of committees, delayed disclosures, RPT approval gaps, SS-1/SS-2 non-compliance, FEMA filing delays.
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Internal audit vs Secretarial audit — interface and overlap
Internal audit (§138) is operational; Secretarial audit is compliance. PCS may rely on internal-audit findings for systems but draws independent opinion.
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Form MR-3 — structure and key annexures
MR-3 covers period, applicable laws, audit observations, board composition, adequate systems and processes, and specific events affecting compliance.
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How does a PCS plan a Secretarial Audit?
Engagement letter → understanding of business → identification of applicable laws → risk-based sampling → audit evidence → drafting MR-3 → communication with management.
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Auditing Standards issued by ICSI for Secretarial Audit
CSAS-1 (Auditing), CSAS-2 (Engagement), CSAS-3 (Audit Procedures), CSAS-4 (Audit Reporting). Effective from April 2020 for §204 audits.
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Difference between Statutory Audit and Secretarial Audit
Statutory audit: financial statements by CA under §139. Secretarial audit: legal compliance by PCS under §204. Different scope, statutes and signatories.
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Scope of Secretarial Audit — laws covered in MR-3
Companies Act, SCRA, Depositories Act, FEMA (FDI/ODI/ECB), SEBI regulations, industry-specific laws and Secretarial Standards (SS-1, SS-2).
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Applicability of Secretarial Audit under Section 204
Every listed company, every public company with paid-up capital ≥ ₹50 cr or turnover ≥ ₹250 cr, and every company having outstanding loans/borrowings ≥ ₹100 cr.
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Difference between QIP and Preferential Allotment
QIP: only to QIBs, faster (no SEBI clearance), 2-week VWAP pricing. Preferential: to identified investors with valuation report, longer lock-in, 90-day VWAP floor.
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Continuous disclosures under PIT Regulations — Reg. 7 trading window
Designated persons cannot trade while window is closed (from UPSI emergence till 48 hours after announcement). Disclose trades > ₹10 lakh in a calendar quarter.
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Role and powers of SEBI under the SEBI Act, 1992
SEBI protects investor interests, regulates securities markets and promotes development. Powers include legislative, executive and quasi-judicial functions.
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