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CS Professional · Compliance Management, Audit and Due Diligence · Compliance Framework

Vinayak Textiles Ltd, an unlisted public company, is finalising its Board's report. The Board wants to state in the Directors' Responsibility Statement that it has devised proper systems to ensure compliance with the provisions of all applicable laws and that those systems are adequate and operating effectively. Under section 134(5), this statement is:

The compliance-systems statement in the Directors' Responsibility Statement is not limited to listed companies. Clause (f) of section 134(5) applies generally, whereas the internal financial controls clause (e) is expressly confined to listed companies.

  1. ARequired only for listed companies
  2. BRequired in the statement for companies generally, as clause (f) is not limited to listed companiesCorrect
  3. CRequired only if the secretarial auditor asks for it
  4. DRequired only for companies with a paid-up capital above a prescribed limit

Explanation

Section 134(5)(f) says the directors had devised proper systems to ensure compliance with all applicable laws and that such systems were adequate and operating effectively. Unlike clause (e) on internal financial controls, which says 'in the case of a listed company', clause (f) has no such restriction. So the option limiting it to listed companies is wrong.

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