217. Board' s report.
There shall be attached to every balance sheet laid before a company in general meeting, a report by its Board of directors, with respect to-
the state of the company' s affairs;
the amounts, if any, which it proposes to carry to any reserves 2[ in such balance sheet 3[
the amount, if any, which it recommends should be paid by way of dividend;
1[ material changes and commitments, if any; affecting the financial position of the company which have occurred between the end of the financial year of the company to which the balance sheet relates and the date of the report.]
2[ the conservation of energy technology absorption, foreign exchange earnings and outgo, in such manner as may be prescribed.]
The Board' s report 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 of any of its subsidiaries, deal with any changes which have occurred during the financial year-
in the nature of the company' s business:
in the company' s subsidiaries or in the nature of the business carried on by them; and
generally in the classes of business in which the company has an interest.
3[ (a) The Board' s report shall also include a statement showing the name of every employee of the company who-
if employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than 4[ such sum as may be prescribed]; or
if employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than 4[ such sum per month as may be prescribed; or]
5[ if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole- time director or manager and holds by himself or along with his spouse and dependent children, not less than two per cent., of the equity shares of the company.
The statement referred to in clause (a) shall also indicate,-
whether any such employee is a relative of any director or manager of the company and if so, the name of such director, and
such other particulars as may be prescribed. Explanation.-" Remuneration" has the meaning assigned to it in the Explanation to section 198.]
The Board shall also be bound to give the fullest information and explanations in its report aforesaid, or in cases falling under the proviso to section 222, in an addendum to that report, on every reservation, qualification or adverse remark contained in the auditors' report.
The Board' s report and any addendum thereto shall be signed by its chairman if he is authorised in that behalf by the Board; and where he is not so authorised, shall be signed by such number of directors as are required to sign the balance sheet and the profit and loss account of the company by virtue of sub- sections (1) and (2) of section 215.
If any person, being a director of a company, fails to take all reasonable steps to comply with the provisions of subsections (1) to (3), or being the chairman, signs the Board' s report otherwise than in conformity with the provisions of sub- section (4), he shall, in respect of each offence, be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to two thousand rupees, or with both: Provided that no person shall be sentenced to imprisonment for any such offence unless it was committed wilfully: Provided further that in any proceedings against a person in respect of an offence under sub- section (1), it shall be a defence to
prove 1[ that a competent and reliable person was charged with the duty of seeing that the provisions of that sub- section were complied with and was in a position to discharge that duty.
If any person, not being a director, having been charged by the Board of directors with the duty of seeing that the provisions of sub- sections (1) to (3) are complied with, makes default in doing so, he shall, in respect of each offence, be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to two thousand rupees, or with both: Provided that no person shall be sentenced to imprisonment for any such offence unless it was committed wilfully.