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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board Disclosures and Website Disclosures

Lakshya Components Ltd is a listed company. Its draft Directors' Responsibility Statement confirms that applicable accounting standards were followed, policies were consistently applied, adequate records were maintained and accounts were prepared on a going concern basis. Which further statement is required specifically because the company is listed?

A listed company's Directors' Responsibility Statement must also state that the directors had laid down internal financial controls and that those controls are adequate and were operating effectively. This requirement applies specifically to listed companies under the Directors' Responsibility Statement provisions.

  1. AThat the directors had laid down internal financial controls and that these are adequate and operating effectivelyCorrect
  2. BThat the dividend recommended is within the free reserves limit
  3. CThat the company has no related party contracts
  4. DThat the auditor has not reported any fraud

Explanation

Section 134(5)(e) requires, in the case of a listed company, a statement that the directors had laid down internal financial controls which are adequate and operating effectively. The other items are not parts of the Directors' Responsibility Statement. Clause (f), on systems for compliance with applicable laws, applies to all companies.

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