Provision Applicable to both private and public companies



The provisions of section 217 are applicable to both private limited and public limited companies.

Form and Contents of balance sheet and contents of profit and loss account.

Balance sheet and profit and loss account to contain details as per schedule VI to the act section 211 has been amended so as to include the following additional provisions:

Every company balance sheet and profit and loss account shall follow with the accounting standards.

Accounting Standards framed by Institute of Chartered Accounts officially recognized

By the introduction of the above provisions in section 211, the central government has given official recognition to the important contribution made by the Institute of Chartered Accounts of India in recommending accounting standards on various matters touching the accountancy profession. The company registration office may be varied on their incorporation.

Penalties increased by companies amendment act 2000

For failure of director as per sub-section (5) of section 217, a director is punishable with a fine of up to six months or pay fine up to Rs.20000 or with both. The following further information and certificates shall be furnished in the annual director’s report.

Composition of Audit committee and another aspect

Section 292A inserted by the Companies (Amendment) Act, 2000 provides for the constitution of an audit committee of the board by certain public companies. The sub-section(4) requires that the composition of the audit committee shall be disclosed in the annual report of the directors.

Compliance certificate by secretary in practice

Certain companies public and private are required to file with the registrar a compliance certificate and copy of such certificate shall be attached with the boards report sent to members.

Failure to complete buy-back if any

Where a company has failed to complete buy-back within 12 months as specified in section 77A(4), if any, the boards report shall specify the reasons for the failure. The company registration offices and their registrars may be verified by the incorporation certificates.

Reservation qualification or adverse remark of auditor

The directors report or an addendum thereto shall contain suitable explanation of any adverse remark or qualification made by the auditors in their report on the accounts examined by them. This aspect is dealt with in the chapter on auditors.

Signing of the directors report

The directors report and any addendum thereto, if any, shall be signed by the chairman if so authorized by the board or by two directors, one of whom shall be the managing director if there is one.

Report on corporate governance

In the annual report of a listed company (Directors Report) there shall be a separate section on Corporate Governance. The suggested items to be included in this report is given in annexure 1 of clause 49 of listing agreement. The section 209 register both private limited companies or public limited companies.

Compliance certificate

The company shall earn a certificate form either the practicing company secretary or auditors regarding compliance of conditions or corporate governance as stipulated in clause 49. The said certificate shall be annexed to the director’s report which is sent to the shareholders annually.

Submission to stock exchanges ‘

The above certificate shall also be sent to the stock exchanges along with the annual report of the company. Both the private and public company registration office in Coimbatore and Chennai.

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