We are aware of the destruction that the Coronavirus / COVID – 19 has caused to the global economy. Day to day lives of Humans around the globe has changed by 360 degrees. The pandemic challenges the Board of Directors to safely travel and to conduct meetings during these times. April – September are the months of high importance for professionals where approval of previous year Books of Accounts, Conducting and submission of various Audit reports, Holding Annual General Meetings, Filing Income Tax returns are some of the major events going on all over.

As the Pandemic is going to take a few more months before we can think of things getting normalized it is necessary that the tasks of corporate importance do carry on with the use of technology. Thankfully, Companies Act, 2013 along with various other rules and regulations allows us to hold Board Meetings via Video Conferencing modes.

In light of the above and after taking note of the tough situations the MCA has recently relaxed the provisions of the Companies Act makes it possible for the Boards to hold their meetings for discussing any matter or agenda they feel necessary and important of being dealt with. Further, SEBI has granted certain relaxations in the requirements of its Listing regulations and thereby enabling Companies to conduct their key compliances on electronic mode to the extent possible.

This article is an attempt to consolidate various relaxations along with the existing provisions of the Companies Act, SEBI LODR, and Secretarial Standard issued by ICSI in a FLOWCHART MANNER.

I hope that this shall help the readers as a Checklist for Conducting their upcoming Board Meetings with due compliance of the law.

This article has been prepared as per the law prevailing as on 07.05.2020 readers are expected to keep themselves updated with the changing rules & regulations, circulars & notifications which may be issued by regulators in due course.

Flow Chart for holding BM via VC in COVID -19 Times

Every Company Can Hold A BM Via VC Through Video Conferencing Or Audio Video Means.

Refer: Section 173 of the Companies Act, 2013

The following should be ensured:

> Means of conducting the BM should be capable of recording and recognizing the participation of the directors

> recording and storing the proceedings of such meetings along with date and time

Refer: Section 173(2) of the Act & Rule 3 of the Companies (Meetings of Board and its Powers) Rules 2014

EXEMPTION BY MCA W.R.T AGENDA ITEMS.

Refer Exemption Rules: https://taxguru.in/company-law/companies-meetings-board-powers-amendment-rules-2020.html

The act had restricted certain Agenda Items from being discussed at a BM held via VC.

Considering the present circumstances recently, the MCA in its Amendment Rules dated 19 th March, 2020 has allowed that a BM held via VC on or before 30th June, 2020 can Consider any Agenda which the Board thinks fit.

Since the Exemption is now available we shall now go through the Compliances for Conducting a BM via VC.

Notice of Board Meeting to be held via VC

Refer: Section 173(3) of the Companies Act, 2013 and para 1.3 of SS-1:  https://taxguru.in/chartered-accountant/guidance-note-meeting-board-directors.html

Requirements:

  • Notice to be sent 7 days in advance
  • It can be sent Via Email as other modes may not be feasible in current situation
  • Proof of sending the Notice and its delivery to be maintained by the Co. for 3 yrs from date of BM.
  • Notice shall inform the Directors about the option available to them to participate through Electronic Mode and provide them all the necessary information for joining the Board Meeting.
  • The Directors shall intimate the CS or the Chairman in advance about their intention to join the BM via VC mode so that timely arrangements can be made.
  • Notice shall contain the contact number or e-mail address of the Chairman or the Company Secretary.
  • Notice shall clearly mention the venue of the Meeting and it shall be the place where all the recordings of the proceedings at the Meeting would be made.

Who can participate in Board meeting Held via VC means ?

  • Chairperson,
  • Directors,
  • Company Secretary; and
  • Auditors & Invitees.

Intimation to the Stock Exchanges

Refer: Reg. 29 , Reg 47 of SEBI (LODR)

SEBI Circular dated 17th April, 2020 :  https://taxguru.in/sebi/sebi-lodr-relaxations-due-lockdown-2-0.html

SEBI Circular dated 26th March, 2020:  https://taxguru.in/sebi/sebi-further-relaxes-lodr-regulations-2015.html

  • Prior intimation of Board Meeting shall be made to the Stock Exchanges.
  • Such Intimation may be Digitally Signed – as allowed by SEBI by Circular dated 17th April, 2020
  • The intimation shall be made atleast 2 days before the date of BM. (applicable for all BM held till 31.07.2020) —- 29 of SEBI LODR
  • Publish the Notice of BM where financials are to be discussed in Newspapers simultaneously after intimating the Stock Exchanges. —- 47 of SEBI LODR

NOTE: Requirement to publish Notice of BM in Newspaper under Reg. 47 of LODR has been exempted till 15.03.2020 by the SEBI vide its circular dated 26th March, 2020.

  • Upload the Copy of Intimation made to Stock Exchange on the Company’s Website within 2 working days. — 46 of SEBI LODR.

AGENDA & NOTES ON AGENDA:

(Refer: 1.3.7 of SS – 1.)

  • The Agenda & Notes on Agenda shall be given to the Directors at least seven days before the date of the Meeting. (at least 9 days in advance in case Agenda is sent by speed post or by registered post)
  • Agenda & Notes on Agenda can be provided via e-mail or by any other electronic means as other modes may not be feasible in current situation.
  • Proof of sending Agenda & Notes on Agenda and their delivery shall be maintained by the company for three years from the date of the Meeting.

RESPONSIBILITY OF THE CHAIRMAN AND COMPANY SECRETARY OF THE MEETING:

(REFER: Rule 3 of The COMPANIES (MEETINGS OF BOARD AND ITS POWERS) RULES, 2014)

  • to safeguard the integrity of the meeting by ensuring sufficient security and identification procedures;
  • 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 authorised participants at the Board meeting;
  • to record proceedings and prepare the minutes of the meeting;
  • 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.
  • 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.

POINTS TO BE OBSERVED AT THE COMMENCEMENT OF THE BOARD MEETING

(REFER: Rule 3 of The COMPANIES (MEETINGS OF BOARD AND ITS POWERS) RULES, 2014 and SS 1)

STEP 1: Roll Call:

> Roll call shall be done by the Chairperson/ Secretary of the Company.

> During the Roll call every Director participating shall state:

  • Name
  • location from where he is participating
  • That he has received the Agenda and all the relevant material for the meeting
  • That no one other than the concerned director is attending or having access to the proceedings of the meeting at the location.

STEP 2: Chairman or CS to read out names of the person attending:

> The Chairperson /Secretary shall then read out the names of persons (other than the Directors who are present at the meeting) to assist/guide/witness the proceedings of the Meeting the Board.

> The attendance register shall be deemed to have been signed by the Directors participating through Electronic Mode, if their attendance is recorded by the Chairman or the Company Secretary in the Attendance Register and the Minutes of the Meeting.

STEP 3: Requirement of Quorum & Placing the Statutory Registers:

> The Chairperson /Secretary shall confirm that the required quorum is present throughout the meeting.

> 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 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.

STEP 4: Transaction during Meeting

> Each item of business should be taken up one by one as per the Agenda specified in the Notice.

> Every participant shall identify himself for the record before speaking on each item of business on the agenda.

> If a statement of a director in the meeting is interrupted or garbled, the Chairperson or Company Secretary shall request for a repeat or reiteration by the Director.

> If a motion is objected to and there is a need to put it to vote, the Chairperson shall call the roll that is to say that he shall first announce that he shall be doing the roll call and call out the name of each director who shall identify himself while casting his vote and the Chairperson shall then note the vote of each director.

> The Chairperson shall then 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.

POST MEETING COMPLIANCES

Companies Act Related Compliances:

> Payment of Sitting fees to Directors after the conclusion of the Board Meeting.

(REFER: Rule 4 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014)

> 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.

> Minutes shall disclose the particulars of the directors who attended the meeting through video conferencing or other audio-visual means.

> 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, which includes fax or e-mail, as may be decided by the Board.

> Every director who attended the meeting, whether personally or through VC 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.

> Finally the minutes shall be entered in the minute book as specified under section 118 of the Act and signed by the Chairperson.

(REFER: Rule 3 of The COMPANIES (MEETINGS OF BOARD AND ITS POWERS) RULES, 2014)

SEBI LODR Related Compliances:

> Submission of Intimation to Stock Exchanges of conclusion of BM Within 30 minut

Refer- Reg 30 & 33 Signing this Intimation Digitally is allowed.

> File financial statements / results approved by the Board with Stock Exchanges Within 24 hours of conclusion of BM

> Publish the Financial Results with Newspapers within 48 Hours. (Note: This requirement is exempted for BM held till 15th May, 2020)

Author: CS Rahul Harsh, from Kolkata is an Associate Member of the ICSI and currently designated as Secretary of the Hooghly Chapter of EIRC of ICSI. He has been actively conducting various workshops and writing Articles on Companies Act and related topics. He may be reached at csrahulharsh@gmail.com.

Author Bio

Qualification: CS
Company: Century LED Limited
Location: Kolkata, West Bengal, IN
Member Since: 20 Feb 2018 | Total Posts: 7
CS Rahul Harsh is an Associate Member of the ICSI since 2015. He had cleared his CS executive and professional with exemptions in various subjects. He has won various awards and appreciation from the Institute as well as from other social organizations. He has authored articles on various topics of View Full Profile

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