In wake of COVID-19 pandemic, Ministry of Corporate Affairs, Government of India, with a view to provide relief to Companies has introduced various relaxations for conducting Board Meetings. Same are listed below for your ready reference:
1. Relaxations provided vide general circular no. 11/ 2020 dated March 24, 2020 https://taxguru.in/company-law/covid-19-special-relief-measures-companies-llp.html
i. The mandatory requirement of holding meetings of the Board of Directors as per the interval provided in section 173 of the Companies Act, 2013 (CA- 13) (120 days) stands extended by a period of 60 days till next two quarters i.e. till 30th September. Accordingly, as one-time relaxation the gap between two consecutive meetings of the Board may extend to 180 days till the next two quarters, instead of 120 days as required in the CA-13.
ii. As per Para VII (1) of Schedule IV to the CA-13, Independent Directors (IDs) are required to hold at least one meeting without the attendance of Non-Independent directors and members of management. For the financial year 2019-20, if the IDs of a company have not been able to hold such a meeting, the same shall not be viewed as a violation. The IDs, however, may share their views amongst themselves through telephone or e-mail or any other mode of communication, if they deem it to be necessary.
iii. Non-compliance of minimum residency in India for a period of at least 182 days by at least one director of every company, under Section 149 of the CA-13 shall not be treated as a non-compliance for the financial year 2019-20.
2. MCA vide its notification dated March 19, 2020 notified the Companies (Meetings of Board and its Powers) Amendment Rules, 2020 allowing companies to hold Board Meetings through video conferencing or other audio visual means till June 30, 2020 in accordance with Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014. https://taxguru.in/company-law/companies-meetings-board-powers-amendment-rules-2020.html
The said notification further allowed companies to take up the prohibited matters as listed below in any meeting held through video conferencing or other audio visual means till June 30, 2020-
i. the approval of the annual financial statements;
ii. the approval of the Board’s report;
iii. the approval of the prospectus;
iv. the Audit Committee Meetings for 2[consideration of financial statement including consolidated financial statement if any, to be approved by the board under sub-section (1) of section 134 of the Act]; and
v. the approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.
Procedure for convening and conducting the Board meetings through video conferencing or other audio visual means.
1. Notice of Meeting
i. A meeting of the Board shall be called by giving not less than seven days’ notice in writing to every director at his address registered with the company and such notice shall be sent by hand delivery or by post or by electronic means:
ii. Meeting of the Board may be called at shorter notice to transact urgent business subject to the condition that at least one independent director, if any, shall be present at the meeting:
iii. In case of absence of independent directors from such a meeting of the Board, decisions taken at such a meeting shall be circulated to all the directors and shall be final only on ratification thereof by at least one independent director, if any.
iv. The notice of the meeting shall inform the directors regarding the option available to them to participate through video conferencing mode or other audio visual means, and shall provide all the necessary information to enable the directors to participate through video conferencing mode or other audio visual means.
v. A director intending to participate through video conferencing or audio visual means shall communicate his intention to the Chairperson or the company secretary of the company.
vi. Any director who intends to participate in the meeting through electronic mode may intimate about such participation at the beginning of the calendar year and such declaration shall be valid for one year.
Such declaration shall not debar him from participation in the meeting in person in which case he shall intimate the company sufficiently in advance of his intention to participate in person.
vii. In the absence of any intimation under point (v) above, it shall be assumed that the director shall attend the meeting in person.
2. Pre-requisites for Conducting Meeting Through Video Conferencing
i. To make necessary arrangements to avoid failure of video or audio visual connection.
ii. The Chairperson of the meeting and the company secretary, if any, to take due and reasonable care –
a. To safeguard the integrity of the meeting by ensuring sufficient security and identification procedures;
b. To ensure availability of proper video conferencing or other audio visual equipment or facilities for providing transmission of the communications for effective participation of the directors and other authorized participants at the Board meeting;
c. To record proceedings and prepare the minutes of the meeting;
d. To store for safekeeping and marking the tape recording(s) or other electronic recording mechanism as part of the records of the company at least before the time of completion of audit of that particular year.
e. To ensure that no person other than the concerned director are attending or have access to the proceedings of the meeting through video conferencing mode or other audio visual means; and
f. To ensure that participants attending the meeting through audio visual means are able to hear and see the other participants clearly during the course of the meeting:
g. Persons, who are differently abled, may make request to the Board to allow a person to accompany him.
3. During the Meeting
i. At the commencement of the meeting, a roll call shall be taken by the Chairperson when every director participating through video conferencing or other audio visual means shall state, for the record, the following namely: –
b. Location from where he is participating;
c. That he has received the agenda and all the relevant material for the meeting; and
d. That no one other than the concerned director is attending or having access to the proceedings of the meeting at the location
ii. After the roll call, the Chairperson or the Company Secretary shall inform the Board about the names of persons other than the directors who are present for the said meeting at the request or with the permission of the Chairperson and confirm that the required quorum is complete.
iii. The Chairperson shall ensure that the required quorum is present throughout the meeting.
iv. Every participant shall identify himself for the record before speaking on any item of business on the agenda.
v. If a statement of a director in the meeting through video conferencing or other audio visual means is interrupted or garbled, the Chairperson or Company Secretary shall request for a repeat or reiteration by the Director.
vi. If a motion is objected to and there is a need to put it to vote, the Chairperson shall call the roll and note the vote of each director who shall identify himself while casting his vote.
vii. From the commencement of the meeting and until the conclusion of such meeting, no person other than the Chairperson, Directors, Company Secretary and any other person whose presence is required by the Board shall be allowed access to the place where any director is attending the meeting either physically or through video conferencing without the permission of the Board.
viii. At the end of discussion on each agenda item, the Chairperson of the meeting shall announce the summary of the decision taken on such item along with names of the directors, if any, who dissented from the decision taken by majority and the draft minutes so recorded shall be preserved by the company till the confirmation of the draft minutes.
4. Venue of the Meeting
The scheduled venue of the meeting as set forth in the notice convening the meeting, shall be deemed to be the place of the of the said meeting and all recordings of the proceedings at the meeting shall be deemed to be made at such place.
5. Statutory Registers
The statutory registers which are required to be placed in the Board meeting as per the provisions of the Act shall be placed at the scheduled venue of the meeting and where such registers are required to be signed by the directors, the same shall be deemed to have been signed by the directors participating through electronic mode, if they have given their consent to this effect and it is so recorded in the minutes of the meeting.
6. Minutes of the Meeting
i. The minutes shall disclose the particulars of the directors who attended the meeting through video conferencing or other audio visual means.
ii. The draft minutes of the meeting shall be circulated among all the directors within fifteen days of the meeting either in writing or in electronic mode as may be decided by the Board.
iii. Every director who attended the meeting, whether personally or through video conferencing or other audio visual means, shall confirm or give his comments in writing, about the accuracy of recording of the proceedings of that particular meeting in the draft minutes, within seven days or some reasonable time as decided by the Board, after receipt of the draft minutes failing which his approval shall be presumed.
iv. After completion of the meeting, the minutes shall be entered in the minute book as specified under section 118 of the Act and signed by the Chairperson.
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