Understanding the Relaxation of Board Meeting Intervals under Companies Act 2013 Amidst COVID-19: Implications and Compliance Clarifications

ACCORDING TO SECTION 173(1) OF COMPANIES ACT 2013 , EVERY COMPANY IS REQUIRED TO HOLD A MINIMUM NUMBER OF FOUR(4) MEETINGS OF ITS BOARD OF DIRECTORS EVERY YEAR IN SUCH A MANNER THAT NOT MORE THAN ONE HUNDRED AND TWENTY(120) DAYS SHALL INTERVENE BETWEEN TWO CONSECUTIVE MEETINGS OF THE BOARD.

Secretarial Standard -1 also provides that company shall hold at least four Meetings of its Board in each Calendar Year with a maximum interval of one hundred and twenty days between any two consecutive Meetings.

Further Ministry of Corporate Affairs (MCA) vide General circular 11/2020 dated 25/03/2020 in order to support and enable Companies in India to focus on taking necessary measures to address the COVID-19 threat, including the economic disruptions caused by it, have relaxed the mandatory requirement of holding meetings of the Board of the companies within the intervals provided in section 173 of the Companies Act, 2013 (CA13) by a period of 60 days till next two quarters i.e., till 30th September.

Accordingly, as a one time relaxation the gap between two consecutive meetings of the Board may extend to 180 days till the next twoquarters, instead of 120 days as required in the Companies Act,2013.

It can be concluded that if company fails to hold meeting of Directors of Company as per Section 173(1) of the Act meetings of its Board of Directors every year in such a manner that not more than one hundred and twenty(120) days shall intervene between two consecutive meetings of the Board, same will not be considered as Non compliance and does not attract any penal provision as mentioned under the law,

Nor it will defeat the provision of four Board Meetings to be conducted in a CALENDER YEAR.

Special GST Registration Procedure for Corporate Debtors Undergoing Insolvency Proceedings

GST Notification: Notification No. 11/2020 – Central Tax

The Government, on the recommendations of the Council, hereby notifies those registered persons(hereinafter referred to as the erstwhile registered person), who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), undergoing the corporate insolvency resolution process and the management of whose affairs are being undertaken by interim resolution professionals (IRP) or resolution professionals (RP), as the class of persons who shall follow the following special procedure, from the date of the appointment of the IRP/RP till the period they undergo the corporate insolvency resolution process, as mentioned below.

Registration.- The said class of persons shall, with effect from the date of appointment of IRP / RP, be treated as a distinct person of the corporate debtor, and shall be liable to take a

new registration (hereinafter referred to as the new registration)in each of the States or Union territories where the corporate debtor was registered earlier, within thirty days of the appointment of the IRP/RP: Provided that in cases where the IRP/RP has been appointed prior to the date of this

notification, he shall take registration within thirty days from the commencement of this notification, with effect from date of his appointment as IRP/RP.

Notification Link: http://www.cbic.gov.in/…/notfctn-11-central-tax-english…

Relaxations under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: SEBI has decided to grant the following relaxations from compliance stipulations specified under the SEBI (LODR) Regulations, 2015 to listed entities through its Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/38 dated March 19, 2020 which shall come into force with immediate effect.

A. Extension of timeline for filings:

Regulation and associated filing Due Date Extended Date

Regulation 7(3): Compliance Certificate on share transfer facility April 30, 2020 May 31, 2020

Regulation 13(3): Statement of Investor complaints April 21, 2020 May 15, 2020

Regulation 24A: Secretarial Compliance report May 30, 2020 June 30, 2020

Regulation 27(2): Corporate Governance report April 15, 2020 May 15, 2020

Regulation 31: Shareholding Pattern April 21, 2020 May 15, 2020

Regulation 33 Relating to Financial Results (Quarterly) May 15, 2020 June 30, 2020

Regulation 33 relating to Financial Results (Annually) May 30, 2020 June 30, 2020

B. Relaxation of time gap between two board / Audit Committee meetings:

The Board of directors and Audit Committee of the listed entity are exempted from observing the maximum stipulated time gap between two meetings for the meetings held or proposed to be held between the period December 1, 2019 and June 30, 2020. However the board of directors / Audit Committee shall ensure that they meet atleast four times a year, as stipulated under regulations 17(2) and 18(2)(a) of the LODR.

The circular is available at: https://www.sebi.gov.in/…/relaxationfrom-compliance…

Announcement by Finance Minister Today From 2:25Pm

1. For FY 2018-19-Last Date To File ITR Extended to 30-06-2020, Interest rate on delayed Payment Reduced to 9% from 12%

2. On Delayed Deposit of TDS Interest Reduced to 9%

3. Adhaar and Pan Card Linking Extended to 30th June 2020

4. Scheme of Vivad sai Vishvas Extended to 30th June 2020.

5. Investment for Deduction under 80C Also Extended to 30-06-2020

6. GST Last Date For filling GST Returns for Mar, Apr and May 2020 is extended to 30-06-2020

7. Companies having turnover Less than 5Cr – No Interest, No Late Fee, No Penalty.

8. Under GST Date for opting for Composition Scheme is also Extended to 30-06-2020.

9. Custom and Excise Scheme Sabka Vishvas is further extended to 30-06-2020

10. Custom Clearance will operate 24X7 upto 30th June 2020

11. MCA21 RELATED- Moratorium issued upto 30-06-2020. There will be no additional fees for filling of various Forms. Relaxing Board Meeting by 60 Days for Next 2 Quarters.

12. CARO New Order now applicable From FY 2020-21.

13. For Newly Incorporated Companies- Filling of Commencement of Business intimation was to be done within 6 Month is further extended by 6 Month.

14. Every Company Required to Create a Deposit Reserve of 20% of the deposits maturing within Next 1yrs by 30-04-2020. This deadline extended to 30-06-2020. Similar requirement was there for Debenture maturing. It is also extended to 30-06-2020.

15. IBC Basic Limit of 1 Lac Increased to 1Cr for filing of Case

Notice regarding Board meetings under the Companies Act, 2013

Reg: Board meetings under the Companies Act, 2013: Considering the need to take precautionary steps to overcome the outbreak of the coronavirus (Covid-19), the Government has in-principle decided to relax the requirement of holding Board meetings with physical presence of directors under section 173 (2) r/w 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 may till 30th June, 2020 be held through video conferencing or other audio visual means by duly ensuring compliance of rule 3 of the said rules. The necessary changes in the rules in this regard are expected to be notified soon.

http://mca.gov.in/Ministry/pdf/Meeting_18032020.pdf

MCA Update: In continuation to General Circular No.03/ 202O dated 31.01.2020 and keeping in view of the requests received from various stakeholders stating that due to disturbances in internet services and the normal work was affected in the UT of J&K and UT of Ladakh and sought extension of time for filing of financial statements for the Financial year ended 31.03.2019. Therefore, it has been decided to further extend the due date for filing of e-forms AOC-4, AOC-4 (CFS) AOC4 XBRL and e-form MGT-7 upto 30.O6.2O2O, for companies having jurisdiction in the UT of J&K and UT of Ladakh without levy of additional fee.

Link: http://www.mca.gov.in/Ministry/pdf/Circular_12032020.pdf

http://www.mca.gov.in/Ministry/pdf/Circular8_06032020.pdf

Filing of forms in the Registry (MCA-21) by the Insolvency Professional (Interim Resolution Professional (IRP) or Resolution Professional (RP) or Liquidator) appointed under Insolvency Bankruptcy Code, 2016 (IBC, 2016).

http://www.mca.gov.in/Ministry/pdf/Circular_06032020.pdf

Extension of the last date of filing of Form NFRA-2

In continuation of the Ministry’s General Circular No. 14/2019 dated 27th November, 2019 and after due examination, it has been decided that the time limit for filing of Form NFRA-2, for the reporting period Financial Year 2018-19, will be 150 days from the date of deployment of this form on the website of National Financial Reporting Authority (NFRA).

2. This issues with the approval of Competent Authority.

Moreover, its an earnest request to ICSI Central Counsel to take steps on war level to protect the Interest of Members as well as CS Aspirants.