BACKGROUND:

Board Meetings are considered to be important part of every organization in building Strong Financial Position, Qualitative Management Decisions, Customer Relationship Management (CRM), Employee Relationship, and Future Prospects of the Company. It oversees the management of the company to ensure that the interest of non-controlling shareholders is protected.

In light of the unprecedented times faced by the companies in India due to COVID 19, several relaxations have been provided by the Ministry of Corporate Affairs (MCA) vide its notifications dated March 19, 2020 and March 24, 2020 and the Securities and Exchange Board of India (SEBI) vide its Circular dated March 19, 2020. Further the Institute of Company Secretaries of India has also issued its Guidance dated April 4, 2020 on the applicability of Secretarial Standards on board and general meetings.

SOME OF THE RELAXATIONS GRANTED BY THE AUTHORITIES W.R.T. BOARD MEETINGS ARE:

Sr No. MCA for Companies Act, 2013 SEBI for LODR,2015
1. Time gap for conducting Board meetings relaxed to 180 days from present 120 days – for the first two quarters of FY 2020-2021

i.e. BM from March 24, 2020 till September 30, 2020 can be conducted with a larger gap of 180 days.

Time gap for conducting board and audit committee meeting has been relaxed without any upper limit – for meetings held / proposed to be held between December 1, 2019 and June 30, 2020.

However, it is to be ensured that there are 4 meeting of board and audit committee held during the FY.

2. Board meetings can be held through video conferencing or other audio visual means for all matters including the otherwise restricted matters mentioned in Rule 4 of the MBP Rules. The time limit for submitting the annual financial results with the stock exchange has also been extended to June 30 from May 15 (for unaudited results) and May 30 (for audited results)
3. For the FY 2019-20, an ID meeting per se as per Schedule VI has been relaxed. If the IDs so deem necessary, the views may be shared through telephone / email or any other mode of communication

Procedure for convening and conducting the Board meetings through video conferencing or other audio visual means.

Compliance Requirements under the Act & the rule and SS2
Meaning Meaning of “video conferencing or other audio visual means” is given in the Rule of the Companies (Meetings of Board and its Powers) Rules, 2014 which means audio- visual electronic communication facility employed which enables all the persons participating in a meeting to communicate concurrently with each other without an intermediary and to participate effectively in the meeting.
Notice Notice convening the meeting shall specify clearly regarding the option available to the Directors 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.
Pre-requisites for Conducting Meeting through VC or OAVM

1. That the Company shall make necessary arrangements to avoid failure of video or audio visual connection;

2. That measures are taken to safeguard the integrity of the meeting by ensuring sufficient security and identification procedures;

3. That the Company shall 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;

4. That the recording of the meeting is stored safely 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 Statutory Audit/ Secretarial Audit of that particular year;

5. That the Chairman of the meeting and each Director to ensure that no person other than the concerned director is attending or have access to the proceedings of the meeting through video conferencing mode or other audio visual means;

6. That the Chairperson 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. Provided that the persons, who are differently abled, may make request to the Board to allow a person to accompany him.

During the Meeting

1. Chairperson to ensure that at the commencement of the meeting, a roll call shall be taken and the Director participating through video conferencing or other audio visual means shall state, for the record purpose each time his Name, location from where he/she is participating, confirming that he/she has received the Notice and Agenda along with all the relevant material for the meeting and that no one other than him/ her is in the room from where he/she is attending the meeting;

2. After the roll call, the Chairperson or the Company Secretary to inform the Board about the names of persons other than the Director, if any, who is present in the meeting at the request or with the permission of the Chairperson and confirm that the required quorum is present and then the meeting should open;

3. Chairperson shall ensure that the required quorum is present throughout the meeting;

4. Every participant shall identify himself for the record before speaking on any item of business on the agenda and 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.

5. 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.

6. 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 minutes shall disclose the particulars of the Directors who attended the meeting through video conferencing or other audio visual means.

7. 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.

Venue 1. The scheduled venue of the meeting as mentioned in the Notice convening the meeting is deemed to be the place of the meeting and all recordings of the proceedings at the meeting shall be deemed to be made at such venue.
Statutory Registers

1. The Statutory registers which are required to be placed in the Board Meeting as per the provisions of the Companies Act, 2013 are required to be placed at the scheduled venue of the meeting.

2. For taking the statutory register outside the registered Office, the necessary Board approval should be taken in advance. However if the Company is keeping the Statutory registers in a single bound book, we advise to not to take such statutory register outside the registered Office and in the next Board Meeting the entry in the register can be made by the Company Secretary.

3. The Directors participating through electronic mode if they give their respective consent to sign the Statutory Register placed at the schedule venue, then the same shall be deemed to have been signed by the Directors participating through electronic mode and it is so recorded in the minutes of the meeting.

Minutes

1. The draft minutes of the meeting shall be circulated among all the directors within 15 (fifteen) days from the date of the meeting either in writing or in electronic mode as may be decided by the Board.

2. That the Minutes of the meeting shall contain a fair and correct summary of the proceedings thereat. Minutes shall be evidence of the proceedings recorded therein and hence the Minutes should be proper.

3. After completion of the meeting, the Minutes of the meeting shall be entered in the minute book in 30 (thirty) days of the conclusion of the meeting, in the book kept for that purpose with their pages consecutively numbered along with the date of such entry.

4. 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 7 (seven) days or some reasonable time as decided by the Board, after receipt of the draft minutes failing which his approval shall be presumed.

5. Each page of Minute shall be initialed or signed and the last page of the Minute of the meeting shall be dated and signed by the Chairperson of the said meeting or the Chairperson of the next succeeding meeting.

6. The minute’s books of the Board and Committee meetings shall be preserved permanently and kept in the custody of the Company Secretary of the Company or any director duly authorized by the Board for the purpose and shall be kept in the Registered Office of the Company or such place as the Board may decide.

Conclusion:

Due to current situation of Covid-19 Pandemic and subsequent nationwide lockdown the norms of Social Distancing has encouraged the Board members to conduct the BM through VC or OAVM facilities. With this relaxation, the management and compliance team can plan conducting the AGM this year with clarity.

Bibliography:

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

https://taxguru.in/company-law/covid-19-special-relief-measures-companies-llp.html

https://taxguru.in/sebi/sebi-relaxes-certain-listing-regulation-due-covid-19-virus.html

https://taxguru.in/company-law/icsi-clarifies-applicability-secretarial-standards-meetings.html

https://taxguru.in/sebi/covid-19-sebi-relaxes-timeline-ncd-ncrps-cps-mds.html

Jaya Sharma-Singhania and Jatin Gade
Founder- Jaya Sharma & Associates
jaya@jsa-cs.com
Associate
Jaya Sharma & Associates
bodha@jsa-cs.com

Disclaimer:

Absolute care is taken to prepare this article however inadvertently if any errors occurs then the Author shall not be held responsible for any such cause. The Content published is only for educational purpose and shall not be construed as rendering of any Professional Advice in any manner whatsoever. The Readers must exercise their own Judgment and refer the original source before any implementation. Further the content is an original work of the author and may be used only after written permission.

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