CONDUCTING OF BOARD MEETING THROUGH VIDEO CONFERENCING MODE

The Ministry of Corporate Affairs has vide its notification dated 19^th March, 2020 ameliorated the Companies (Meetings of Board and its Powers) Rules, 2014. The Rules are called as Companies (Meetings of Board and its Powers) Amendment Rules, 2020.

The Ministry of Corporate Affairs has amended the said rules as palladium against the outbreak of Novel Coronavirus (COVID-19) across the world.

As the Companies registered in India has Indian as well as foreign directors, thus, the Ministry of Corporate Affairs has relaxed the above said rules and has allowed the meeting of Board of Directors through video conferencing on the matters which were restricted.

What does video conferencing or other audio-visual means?

“Video conferencing or other audio-visual means” 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.

Under Rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014 the following matters have been restricted to be transacted through Video Conferencing mode:

• 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 financial statement including consolidated financial statement if any, to be approved by the board under sub-section (1) of section 134of the Act and
• the approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover

However, pursuant to the aforementioned amendment, the meetings of Board of Directors for the above said matters can also be held through video conferencing mode till 31^st December, 2020.

Also, the meetings held through video conferencing have to be in compliance with Rule 3 of Companies (Meetings of Board and its Powers) Rules, 2014.

Key points to be noted:

• Is notice of Board meeting to be held through Video Conferencing is given?

Yes, The notice of the meeting shall be sent to all the directors in accordance with the provisions of sub-section (3) of section 173 of the Act.

• Are minutes prepared for the Board meetings held through video conferencing mode?

Yes, Pursuant to Rule 3 of Companies (Meetings of Board and its Powers) Rules, 2014 every company holding meeting through Video Conferencing mode has to record the proceedings and prepare the minutes of the meeting.

• Are the draft minutes circulated amongst the directors for their approval?

Yes, Pursuant to sub-rule 12 of Rule 3 of Companies (Meetings of Board and its Powers) Rules, 2014 the draft minutes are circulated amongst the directors within 15 days of the meeting for their approval and the directors have to within seven days or such reasonable time as decided by the Board, give their approval.