Actual Provision as per Section 173 of companies act, 2013:
- Every company shall hold the first meeting of the Board of Directors within thirty days of the date of its incorporation and thereafter hold a minimum number of four meetings of its Board of Directors every year in such a manner that not more than 120 days shall intervene between two consecutive meetings of the Board.
- Provided that the Central Government may, by notification, direct that the provisions of this subsection shall not apply in relation to any class or description of companies or shall apply subject to such exceptions, modifications, or conditions as may be specified in the notification.
According to recent guidance's issued by MCA through a notification dated 23rd June 2020:
- MCA further relaxes the requirement of holding Board meetings with the physical presence of directors under section 173 (2) read with rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014 for approval of the annual financial statements, Board's report, etc. Such meetings till 30th September 2020 be held through video conferencing or other audiovisual means by duly ensuring compliance of rule 3 of the said rules.
As per above notification:
- The following matters shall be dealt with in Board meeting held through video conferencing or other audiovisual means
- The approval of the annual financial statements;
- The approval of the Board's report;
- The approval of the prospectus;
- The Audit Committee Meetings for consideration of accounts;
- The approval of the matter relating to amalgamation, merger, demerger, acquisition, and takeover.
- For unlisted company, the maximum time gap of 180 days is extended till all board meetings to be held before September 30, 2020.
- The relaxation is only with respect to the approval of financial results of Q4 of FY 19-20 which is till June 30, 2020
- There is no relaxation w.r.t the approval of financial results for Q1 of FY 20-21. Accordingly, the same will have to be held within 45 days of the end of the quarter; i.e. by 14th August 2020.
Points to be noted for conducting Board Meeting:
1. Notice, Agenda & Notes to Agenda:
a. To be given By:
- Company Secretary or (when Company secretary is not present)
- Any director or
- Any other person authorized by the board
b. To be Given To:
- All the Directors
c. The time period for giving notice:
- At least 7 days before the date of a Board meeting or
- Any other longer duration as prescribed by Articles of association
- By hand or
- By Speed post or
- By Registered post or
- By courier or
- By Email or
- By any other Electronic means
e. The notice shall specify the availability of participation through electronic mode and provide necessary information to avail such facility
- Each item of Business requiring approval in board meeting has to be supported with relevant notes prescribing relevant facts and details for the understanding of directors
- Draft of the resolution to be passed in case of assent is also mentioned
2. Place of meeting:
When the directors are participating in the meeting through video conference then anyone director location (as per notice) is considered as the place of the meeting and others have joined him through video conference
3. What is Considered as Non-participation of Director:
- If the participation of such director through video conferencing cannot be recorded, recognized, and stored.
- If the director is attending the meeting through teleconference (i.e. no visual communication)
4. The Quorum for a Board Meeting:
- 1/3rd of the total strength of the Board, or 2 Directors, whichever is higher
- Directors participating through electronic mode shall be counted for Quorum.
5. Roll call:
At the commence of meeting, a roll call shall be taken by the chairperson of the meeting which has to be recorded in minutes
6. Access to the Meeting:
- Company secretary
- Any other person whose presence is required by the Board of Directors
- If Any person is invited at the meeting such details are to be recorded in Minutes of the meeting
- No other person should have access to Meeting
7. Discussion on Agenda:
- Every person shall identify himself before speaking on any item of business for the record,
- In case of any disturbance during the communication, then chairperson or company secretary shall request such Communication to be repeated
8. Announcing the summary of Decisions:
At the end of the decision on each agenda item
- The chairperson shall announce the summary of the decision
- Names of the directors who have dissented from the decision taken by a majority shall be recorded in Minutes
- Such draft of minutes are to be preserved till the confirmation of the draft minutes
9. The signing of the statutory registers:
Where ever it is required by the directors to sign the statutory registers, such registers are deemed to be signed
- once the consent of the director who is participating through video conference is given and
- Such consent is recorded in the minutes. (Recording in minutes is essential)
a. Details of the directors to be noted
- Names of the directors present in person or
- Names of the directors present through Video conferencing or any audiovisual mode
- Directors absent at the meeting
- Leave of absence granted to any director
b. Circulation of draft minutes of meetings
- The draft minutes are to be circulated among all the directors within 15 days of meeting in written or electronic mode as decided by the board of directors
- All the directors present in the meeting shall give their consent or comments in writing about the Draft minutes of the board meeting within 7 days or reasonable time as decided by the Board
- After receipt of the draft, minutes failing to give approval by any director shall be presumed to be given.
c. The signing of the minutes of the meeting.
- After completion of the meeting, the minutes shall be entered in the minute book and signed by the Chairperson.
- The minutes of the next meeting of the Board shall include a point relating to noting of minutes of the previous meeting of the Board of Directors.
11. Primary responsibilities of the Chairperson and Company secretary, if any, in the Board meeting conducted through video conference or any other audio-visual conference
- To safeguard the integrity of the meeting by ensuring sufficient security and identification procedures;
- To ensure availability of proper facilities for providing transmission of the communications for effective participation of the directors;
- To record proceedings and prepare the minutes of the meeting;
- To store for safekeeping and marking the tape recording(s);
- To ensure that no person other than the director concerned is attending or has access to the proceedings of the meeting; and
- To ensure that participants attending the meeting through audio-visual means can hear and see the other participants clearly during the course of the meeting. The summary of the above points shall be part of the minutes of the meeting;
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