COMPANY LAW AND
COMPLIANCES
CERTIFICATE COURSE
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DEVELOPED BY
MODULE - 3
DAY-TO-DAY COMPLIANCE
3.1 Introduction accessible in India for being used subsequent. This
mandate of the Act with regard to making such
For any company to have a smooth day-to-day electronic data easily as it is important to keep the
functioning it needs to comply with certain records updated on day-to-day basis.
provisions of the law on a day to day basis. Such
aspects of day-to-day compliance include The Act makes it mandatory that the company
accounting, maintaining books of record, needs to have a proper system of storage, retrieval,
maintaining such other documents and records, display or printing out as considered appropriate
auditing etc. This chapter will mainly focus on the by the Audit Committee. The information which is
aspects of accounts and audit, maintaining books received by branch offices of the company should
of records, and such other documents and records. be kept and maintained without alteration and
must depict information as it was originally
3.2 Accounts received. The company must store and maintain
such information as and when it received.
Section 128 of the Companies Act 2013, mandates
that every company registered under the Section 338(2) of the company further mandates
Companies Act must prepare and maintain at its that if a company is involved in dealing with goods,
registered office books of accounts and other then the company must maintain a record of
relevant books, papers and financial statements statements of the annual stock taking, and must
for every financial year which gives the true and record the daily transactions of the company with
fair view of the state of the company. The proviso respect to the goods sold and purchased, along
to section 128 of the act permits the company to with the information of the buyers and sellers as
maintain such accounts as mentioned under well. Section 2(13) and section 128(1) read with
section 128(1) of the act in digital or electronic section 338(2) of the act provides for the
format and such accounts should be made
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maintenance of proper books of account and such or clauses which should be included in the auditor’s
other documents which include cost accounting report include:
records, and stock records along with the normal
books of account. ● Maintenance of records related to fixed
assets, where there should be regular
Section 128(5) of the Companies Act 2013 updates of information with regard to the
provides the books of account of all the companies assets holding of the company.
are to be stored for a period which is not less than
eight years immediately preceding the current ● Maintenance of records relating to the
financial year. To comply with this kind of mandate inventories of the company, even this
by the Act it requires regular checking and clause in the auditor’s report should
updation of the data. consist of the stocks, goods etc which are
bought and sold should be maintained on a
There has been a practice which has been daily basis.
developed by the companies over the years where
the notes which are made while maintaining and ● Cost records of the company must be
updating the accounts. It becomes important to maintained in compliance with the
store these notes which are made on a day-to-day directives issued by the Reserve Bank of
basis while maintaining the accounts so as to India and with sections 73 to 76 of the
produce such notes at the Annual General Companies Act, 2013.
Meeting. These notes which are made even
includes the secretarial standards. Annexure 3 ● Maintenance of records of any non-cash
provides for format in which the statement of transaction which the company enters with
profit and loss should be filed.i the directors or any other persons should
be recorded in compliance with section
3.3 Maintenance of Records 192 of the Companies Act, 2013.
The Companies (Auditors’ report) order 2016, ● All the records with respect to the
makes it mandatory that the auditor should utilization of the funds which is raised
maintain such records on a daily basis. The matter through an IPO or further public offer.
3.4 Establishment of Vigil Mechanism
Every listed company as per the mandate of the
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Section 177(9) of the companies act has to the minimum essential requirements for an
establish a vigil mechanism for the directors and effective internal whistle-blowing policy.
employees to report genuine concerns in such
manner as prescribed under Rule 7 of the 3.5 Maintenance of Cost Records
Companies (Meeting of Board and its Power)
Rules, 2014. The main objective of establishment Section 143(1) of the Companies Act 2013 read
of vigil mechanism is to safeguard the person from with Rule 3 Companies (Cost Records and Audit)
victimization and for providing direct access to the Rules 2014 mandates that every company must
chairman of the Audit Committee in exceptional or maintain a detailed cost records in the books of
appropriate cases. It can further be observed that accounts. Rule 3 specifies the classes of company
the intent behind introducing such a mechanism which should compulsorily maintain the Cost
within a company aims at having an internal Records, those are
whistleblower policy where the employees and the
directors of the company can raise concerns ● Companies which are engaged in
regarding unethical, illegal or illegitimate practices production and manufacture of goods in
which are taking place in the company. This strategic sectors,
mechanism has a further statutory and legal
backing, where the establishment of the vigil ● Companies engaged in industrial sectors
mechanism of the company is incorporated in which is regulated by the Government; or
Regulation 22 of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2014. Even ● Companies involving public interest; and
though mechanism so established in the company ● Companies engaged in the manufacture,
plays an important role in maintaining
transparency in the company, it fails to establish production, import and supply of specific
medical devices.
i Section 2(40) of the Companies Act, 2013 provides for filing
of the financial statements.
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