Nitu Poddar and Ambika Mehrotra
As one maybe aware that during this period of disruptions caused by COVID 19, several relaxations have ben provided by the Ministry of Corporate Affairs (MCA) vide its Notifications dated 19th March, 2020 and March 24, 2020 and the Securities and Exchange Board of India (SEBI) vide its Circular dated March 19, 2020. Further the Institute of Company Secretaries of India has also issued its Guidance dated April 4, 2020 on the applicability of Secretarial Standards on board and general meetings.
A snapshot of the relaxations granted by the above authorities wrt board meetings are:-
|S. No||MCA for Companies Act, 2013||SEBI for LODR|
|1.||Time gap for conducting board meetings relaxed to 180 days from present 120 days – for the first two quarters of FY 2020-2021
i.e BM from 24th March 2020 till 30th September 2020 can be conducted with a larger gap of 180 days
|Time gap for conducting board and audit committee meeting has been relaxed without any upper limit – for meetings held / proposed to be held between December 1, 2019 and June 30, 2020.
However, it is to be ensured that there are 4 meeting of board and audit committee held during the FY.
|2.||Board meetings can be held through video conferencing or other audio visual means for all matters including the otherwise restricted matters mentioned in Rule 4 of the MBP Rules.
|The time limit for submitting the annual financial results with the stock exchange has also been extended to June 30 from May 15 (for unaudited results) and May 30 (for audited results)|
|3.||For the FY 2019-20, a ID meeting per se as per Schedule VI has been relaxed. If the IDs so deem necessary, the views may be shared through telephone / email or any other mode of communication
On close perusal of the relaxations granted by MCA and SEBI, it is understood that the relaxations are different for a listed and an unlisted company and the quarter for which the meeting pertains to. The major points to be kept in mind with respect to board meetings are:
- There has to be minimum 4 meetings in the FY;
- The maximum gap between two board meeting cannot be more than 180 days (stricter of the provisions to be applicable – MCA allows maximum time gap of 180 days and SEBI does not prescribes any maximum time gap.
Mostly, listed companies might have had their last board meeting held in the month of Feb, 2020. In that case, the next meeting can be held within 180 days but before 30th June, 2020 since that is the last date of filing financial results for Q4 of FY 2019-20 for both equity and debt listed companies.
It is to be noted that the debt listed companies are required to make half-yearly intimation of financial result u/r 52 of LODR. However, where a debt-listed company is a subsidiary / joint venture or associate of an equity listed company, it needs to prepare and gets its results approved quarterly for the purpose of consolidation.
For unlisted company, the maximum time gap of 180 days is extended till all board meeting 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.
In view of the same, we have put together the timelines wrt listed and unlisted companies in the table below:-
|BMs to be held/held during the quarter||MCA Relaxation||SEBI Relaxation||Equity Listed||Debt Listed||Unlisted|
|FY 2019-20 – Q4
|Maximum time gap between two meetings can be 180 days||Results of Q4 to be approved latest by June 30, 2020
|BM to be held within June 30, 2020||BM to be held within June 30, 2020||Maximum time gap between two meetings can be 180 days|
|FY 2020-21 – Q1
|Maximum time gap between two meetings can be 180 days||No relaxation currently for approving results of Q1
|BM to be held within August 14, 2020||If the financial results are consolidated with an equity listed company – BM to be held within August 14, 2020
If the financial results are not consolidated with an equity listed company – will have to ensure that the gap between two board meeting is not more than 180 days
|FY 2020-21 – Q2
|Maximum time gap between two meetings can be 180 days||No relaxation currently for approving results of Q2
|BM to be held within November 14, 2020|