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COVID-19 update: Companies permitted to do virtual board meetings to approve financial statements etc.

In a step to enable health safety and business continuity, Ministry of Corporate Affairs (MCA) has permitted companies to conduct virtual Board meetings for approval of annual financial statements, Board reports etc. This relaxation is available till June 30, 2020. Read the communication here. Last week, NASSCOM made a representation to MCA to relax the norms for conducting Board Meetings by companies. Our representation to MCA is available at:

https://community.nasscom.in/communities/policy-advocacy/nasscoms-representation-to-ministry-of-corporate-affairs-on-relaxation-of-norms-for-conducting-board-meetings-by-companies.html

The relaxation is important as Listed Companies generally conduct their Board meetings for approval of annual financial statements and annual report during the month of April every year. The requirements under Rule 4 of Companies (Meetings of Board and its Powers) Rules, 2014 (“Rules”) pose a challenge as certain matters including approval of annual financial statements of a company  cannot be dealt with in any meeting held through video conferencing or other audio visual where quorum is not available through physical presence of directors.

The relaxation will provide the much-needed relief to companies, while safeguarding health of individuals and ensuring compliance with statutory provisions.

Necessary changes in the rules are expected to be notified soon. We shall keep you posted on further developments in this regard.

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