CA Intermediate · Corporate and Other Laws · Accounts of Companies

Vistara Components Ltd has a net worth of Rs 480 crore and turnover of Rs 1,200 crore in the preceding financial year. In a year in which the board's report is prepared, the company's directors ask which of the following statements about the Directors' Responsibility Statement included in the board's report is correct for a listed company under section 134.

The statement must confirm that accounting standards were followed with explanation of material departures, policies were consistently applied, adequate accounting records were maintained, accounts were prepared on a going concern basis, and for a listed company that internal financial controls are adequate and operating effectively. It is the directors' statement, not the auditors'.

1. AIt is optional for listed companies and applies only to unlisted companies
2. BThe statement need only confirm that dividends were recommended and need not cover accounting standards
3. CThe statement is signed by the auditors, who certify that directors have followed accounting standards
4. DThe statement must say that applicable accounting standards were followed with proper explanation of material departures, that accounting policies were applied consistently, that proper and sufficient care was taken for maintaining adequate accounting records, that the accounts were prepared on a going concern basis, and, for a listed company, that internal financial controls were laid down and are adequate and operating effectivelyCorrect