The importance of video conferencing is burgeoning in the current scenario not only in the corporate world but also in other administrative machinery. In corporate milieu, there are a plethora of laws and compliances, and sometimes it is difficult for directors and others to attend the meeting in person, here comes the video conferencing for our rescue.
So let us discuss the provisions of video conferencing under the Companies Act 2013 and Companies (Meeting of Directors and its Powers) Rules 2014.
What is video conferencing or audio-visual means
As per Explanation of Rule 3 of Companies (Meeting of Directors and its Powers)Rules 2014, video conferencing or other audio visual 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.
The following are the important provisions that should be complied with while conducting a meeting through video conferencing or other audio visual means.
1. Participation of directors in a meeting of Board through video conferencing or other audio visual means.
Section 173(2) of the Companies Act 2013 says the participation of directors in a meeting of the Board may be either in person or through video conferencing or other audio visual means, as may be prescribed, which are capable of recording and recognizing the participation of the directors and recording and storing the proceeding of such meetings along with the date and time.
2. Restricted matters
As per the first proviso of Section 173(2), there are certain matters which cannot be dealt with in a meeting through video conferencing or other audio visual means.
As per Rule 4, the following matters shall not be dealt with in any meeting held through video conferencing or other audio visual means.
1. The approval of the annual financial statements.
2. The approval of the Board’s report.
3. The approval of the prospectus.
4. The audit Committee meetings for consideration of financial statements including consolidated financial statements, if any, to be approved by the Board under subsection (1) of section 134 of the Act.
5. The approval of the matter relating to amalgamation, merger, demerger, acquisition, and takeover.
But if there is a quorum in a meeting through the physical presence of Directors, any other director may participate in the above-restricted matters through video conferencing or other audio visual means in such meetings.
3. Procedure for conducting meetings through video conferencing or other audio visual means.
Rule 3 dealt with the procedure of conducting a meeting through video conferencing or other audio visual means.
Following are the important steps to be followed while conducting video conferencing
1. Every company shall make necessary arrangements to avoid the failure of video or audio visual connection
2. The Chairperson of the meeting and company secretary shall ensure the following:
3. To safeguard the integrity of the meeting by ensuring sufficient security and identification procedures.
4. To ensure the 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.
5. To record the proceedings and prepare the minutes of the meeting.
6. To store for safekeeping and marking the tape recordings 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.
7. To ensure that no person other than the concerned director is attending or having access to the proceedings of the meeting through video conferencing or other audio visual means.
8. To ensure that participants attending the meeting through audio visual means are able to hear and see other participants clearly during the course of the meeting. Provided that differently- abled persons may request the Board to allow a person to accompany him.
9. Notice of the meeting (Section 173, Secretarial Standard-1)
Seven days notice or shorter notice shall be sent to all directors as per section 173 of the Act specifying the option available to them to participate through video conferencing or audio visual means and shall provide all necessary information to enable the directors to participate through video conferencing mode or other audio visual means. Shorter notice is subject to the condition that at least one Independent Director shall be present in the meeting. In case of absence of Independent Director, the decision taken shall be circulated to all directors and shall be final only on ratification thereof by at least one Independent Director if any. In case the Company does not have any Independent Director the decision taken shall be final only on ratification of a majority of directors of the company unless such decisions were approved at the meeting itself by a majority of Directors of the company.
4. If a director intending to participate through video conferencing or audio visual means he shall give prior intimation to the Chairperson or Company Secretary of the company, sufficiently in advance so that company can make required arrangements. In the absence of such intimation, it shall be assumed that the director shall attend the meeting in person
5. 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. But such an intimation will never debar him from participation in the meeting in person, in that case, he shall intimate in advance of his intention to participate in person.
6. 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:
- Name
- The location from where he is participating
- That he has received the agenda and all the relevant material for the meeting and
- That no one other than the concerned director is attending or having access to the proceedings of the meeting at the location from where he is participating.
7. After the roll call, the Chairperson or the Company Secretary shall inform the Board about the names of the 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. A director participating in a meeting through video conferencing or other video visual means shall be counted for quorum unless he is excluded for any items of business under any provisions of the Act or the rules.
8. The Chairperson shall ensure that the required quorum is present throughout the meeting
9. The venue of the meeting shall be the venue scheduled for the meeting as set forth in the notice calling the meeting and all recordings of the proceedings at the meeting shall be deemed to be made at such place.
10. 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 the effect and it is so recorded in the minutes of the meeting.
11. Every participant shall identify himself for the record before speaking on any item of business on the agenda. If a statement of a director in the meeting through video conferencing or other audio visual means is interrupted or garbled, the Chairperson or the Company Secretary shall request for a repeat or reiteration by the Director.
12. 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.
13. 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.
14. At the end of the discussion on each agenda item, the Chairperson of the meeting shall announce the summary of the decision taken on such items along with the names of the directors, if any, who dissented from the decision taken by the majority. The minutes shall disclose the particulars of the directors who attended the meeting through video conferencing or other audio visual means and the draft minutes shall be preserved till the finalization of the minutes.
15. 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. 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 other reasonable time as decided by the Board, after receipt of the draft minutes falling which his approval shall be presumed.
16. 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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