companies act-explanation of following paragraph

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CA Abhishek Singh (Querist)

15 October 2010 hello everyone,
i am studying ca final law from module and was not able to understand the following paragraph from companies act relating to BOARD'S REPORT.

"The Board shall, so far as is material for the appreciation of the state of the company's affairs by its members and will not in the Board's opinion be harmful to the business of the company or any of its subsidiaries, deal with any changes which have occured during the financial year---

a) in the nature of the company's business;
b)in the company's subsidiaries or in the nature of the business carried on by them ; and
c) generally in the classes of business in which the company as an interest."

plz. explain the above paragraph in simple words. Even explanation in hindi & english will do.

Thanks & Regards,
Abhishek Singh
My id abhipcc@rediffmail.com

Ankur Garg

Ankur Garg (Expert)

18 October 2010 Bro i would advise you to study from Munish Bhandari book. Use module as a reference.

To be honest you are unnecessarily wasting your energy.

CA Vinay Gandhi

CA Vinay Gandhi (Expert)

20 October 2010 Hi Abhishek,
The given provision means:-

If the board feels that it is harmful to business of company or its subsidiaries;
the company should not change:-
(i) Nature of its business
(ii) Nature of business of subsidiaries
(iii) Classes of businesses in company company has interest.

If it is not harmful for Company or its subsidiaries, the company may change/modify any of the 3 mentioned above.

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