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Query regarding section 134 of companies act 2013

Ankur Garg (Company Secretary and Compliance Officer) (114783 Points)

16 September 2014

This query is regarding Section 134 (5)(f) of Companies Act, 2013, which says Directors are required to state in the Directors’ Report that “the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.”

So is there any formal need to devise Compliance Management Process in the Company and pass a separate resolution for the same in first board meeting of FY 2014-15. Further I would request members to share any document regarding Compliance Management system.

Thanks

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3 Replies

CS GK Murty (Company Secretary) (225 Points)
Replied 16 September 2014

Section 134 (5)(f) of Companies Act, 2013, mandates that directors are required to state in the Directors’ Report that “the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

There is no need to pass a separate resolution for the same in first board meeting of FY 2014-15. As regards CMS, there is no specific format, as laws are innumerable and none has really got an idea as to how many laws would be applicable to a company.

I would suggest one can devise own format for your company to ensure compliance of applicable laws.

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P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 17 September 2014

Ankurji,

Yes directors would like to ensure that proper system for compliance of laws is in place. Therre are some software available in the market for legal compliance. Bigger companies which can afford cost can go for that:

https://www.google.co.in/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=legal%20compliance%20software%20india

Smaller companies can have the system of placing before Board legal compliance certificate as a part of regular agenda for Board meetings duly signed by CS or some other official.

Thanks

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