SECTION 217 OF Company Law
Company Law's Section 217(1) states that Board's Report prepared by its Board of Directors should be attached with every Balance-Sheet, and then should place before a Company in it's General Meeting. which should contain the following dealings of company:-
1. Company's Affair.
2. Amounts which proposes to carry to any reserves in such Balance-Sheet.
3. Amount, which it recommends to be paid by way of Dividend
4. Material changes and commitments, affecting the financial position of the company between the end of the financial year of the company related with Balance-Sheet and the dates of report.
5. Conservation of energy, technology, absorption, foreign exchange earning and outgo, in such manner as prescribed.
The above requisites are essential to prepare a Board's Report hence, the Board's Report should be made according to the Regulations.
So far as Positive Reception of company is concern Section 217 (2) evidently states that the Board's Report is material for the appreciation of the company's affair by its members and should not be harmful to the business or its subsidiaries, deal with any changes occurred during the financial year, in the Board's opinion in regarding to company's business, Company's subsidiaries or in the nature of the business carried on by them and classes of business in which company has an interest.
The Board's Report should include a statement where name of every employee of the company shall be mentioned [217(2)A].
Board's Report also include a Director's Responsibility Statementunder 217(2AA) which indicate that (a) While preparing of the annual accounts, the applicable accounting standards should be followed along with proper explanation relating to material departure. (b) To give a true and fair view to the affairs of the company at the end of the financial year and profit or loss of the company for that period the directors had already selected such accounting policies so they should apply them consistently and should have make the judgments and estimates which are reasonable & prudent.(c) In statement it should be mention that director had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of this Act for safeguarding the assets of the company and for preventing & detecting fraud and other irregularities. (d) Lastly, it should be mention that Directors had prepared annual accounts on a going concern basis. The point namely (a), (b), (c) & (d) are the requisites which should be follow before to make Director's Responsibility Statement.
Hence in above paragraphs we have mentioned the following descriptions of Section 217 of Company Law:
1. Board's Report prepared by its Board of Directors should be attached with every Balance-
2. Appreciationof the Company's Affair 217(2)
3. Name of Employees on Board's Report [217(2)A].
4. Director's Responsibility Statement 217(2AA).