NASSCOM’s Representation to Ministry of Corporate Affairs on relaxation of norms for conducting Board Meetings by companies
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As per section 173 of Companies Act, participation of directors in Board Meeting may be either in person or through video conferencing or other audio visual means capable of recording and recognizing the participation of directors as well as recording and storing the proceedings of meetings.
Further, as per Rule 4 of Companies (Meetings of Board and its Powers) Rules, 2014 (“Rules”), certain matters including approval of annual financial statements of a company shall not be dealt with in any meeting held through video conferencing or other audio visual. However, where there is quorum presence in a meeting through physical presence of directors, any other director may participate through video conferencing or other audio visual means.
Listed Companies generally conduct their Board meetings for approval of annual financial statements and annual report during the month of April every year.
In light of disruption caused by the pandemic COVID-19, there is a growing concern regarding the health and safety of people due to which all travel (including domestic and international) has been affected. With recent surge in the number of cases of COVID-19 across the globe, it would not be practical for companies to mandate physical presence of board members.
To cater to the above, we have requested Ministry of Corporate Affairs (MCA) to temporarily relax restrictions on transacting certain matters at a meeting through audio visual means till the time the situation on global epidemic stabilizes. For the purpose of quorum, MCA should also consider directors attending meeting through audio visual means and treat such meetings at par with physically convened meetings. This will greatly benefit the companies and would not disrupt business functions.
We will keep you posted on further developments in this regard.
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