Board’s report ‑ Whether events occurring after balance sheet date can be incorporated in directors’ report - Companies Law - Letter: No. 8/16(1)/61‑PR,

Letter: No. 8/16(1)/61 ‑ PR, dated 9 ‑ 5-1961. Subject:- Board s report ‑ Whether events occurring after balance sheet date can be incorporated in directors report Usually, an event occurring after the balance sheet date, which affects materially the solvency of the undertaking of the company or is otherwise of great importance to the shareholders, cannot be taken into account in drawing up the balance sheet or the profit and loss account. Professional bodies in advanced countries have recommended that such an event should be brought to the notice of the shareholders either in the directors report or in the chairman s statement accompanying the accounts. Although the expression material changes and commitments, if any, affecting the financial position of the company . occurring in the new clause (d) of sub‑section (1) of section 217 seems to be clear enough in itself, it may be stated, purely by way of illustration, that the expression would include events such as the following namely, the disposal of a substantial part of the undertaking, the profit or loss whether of a capital or revenue nature, changes in the capital structure, alteration in the wage structure arising out of trade union negotiations, purchases, construction, sale or any catastrophe befalling the fixed assets, incurring or a reduction of long‑term indebtedness, awards in litigation, entering into or cancellation of contracts and refund of taxes or completion of assessments.