As per S.173 of Companies Act, 2013 (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 like approval of annual financial statements, approval of Board’s report, etc. are not allowed to be dealt with, in any meeting held through video conferencing or other audio visual.
In this regard, Ministry of Corporate Affairs (MCA) had earlier lifted restrictions on transacting such matters in meetings conducted through video conferencing and enabling companies to conduct all the meeting proceedings through audio-visual means, for a period up to December 31, 2020.
Given the ongoing circumstance of surging infections, many countries around the world still have in place travel/visa restrictions and are taking continued taking steps to curtail international travel of people. Hence, it will not be prudent in the current circumstances for companies to have an in-person gathering of senior executives and board members at one place.
In this regard, we have requested MCA to extend the relief relating to conduct of physical board meetings till March 31, 2021, as companies are currently unable to assess the time period it will take for business to resume to normal conditions. This will greatly benefit companies and would not disrupt business functions. The situation can be periodically monitored and withdrawn once COVID-19 pandemic stabilizes and is controlled.
We will keep you posted on further development in this regard.
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