Meetings of Board and its Powers

Companies act 2013Companies act, 2013

Meetings of Board through d fvideo conferencing

A company can conduct, the Board meetings through videoconferencing or other audio visual means.g

A company shall comply with the following procedure:‐Every Company shall make necessary arrangements to

avoid failure of video or audio visual connection.The Chairperson of the meeting and the company

secretary, if any, shall take due and reasonable care :‐1. to safeguard the integrity of the meeting by ensuring

sufficient security and identification procedures;sufficient security and identification procedures;2. to record proceedings and prepare the minutes of the

meeting;The notice of the meeting shall be sent to all the directorsThe notice of the meeting shall be sent to all the directorsin accordance with the provisions of sub‐section (3) ofsection 173 of the Act.The director, who desire, to participate may intimate hisi t ti f ti i ti th h th l t i d tintention of participation through the electronic mode atthe beginning of the calendar year and such declarationshall be valid for one calendar year.

Meetings of Board through video f i conferencing

The statutory registers which are required to be placed in theBoard meeting as per the provisions of the Act shall be placed atthe scheduled venue of the meeting and where such registers arerequired to be signed by the directors .Every participant shall identify himself for the record beforespeaking on any item of business on the agenda.If a motion is objected to and there is a need to put it to vote, theChairperson shall call the roll and note the vote of each directorwho shall identify himself while casting his vote.At the end of discussion on each agenda item, the Chairperson ofthe meeting shall announce the summary of the decision taken onsuch item along with names of the directors, if any, who dissentedfrom the decision taken by majority.The minutes shall disclose the particulars of the directors whoattended the meeting through video conferencing or other audiovisual means.

Meetings of Board through video f i conferencing

The draft minutes of the meeting shall be circulated among all thedirectors within fifteen days of the meeting.directors within fifteen days of the meeting.Every director who attended the meeting, whether personally orthrough video conferencing or other audio visual means, shallconfirm or give his comments in writing, about the accuracy ofrecording of the proceedings of that particular meeting in the draftminutes, within seven days or some reasonable time as decided bythe Board, after receipt of the draft minutes failing which hisapproval shall be presumedapproval shall be presumed.After completion of the meeting, the minutes shall be entered in theminute book as specified under section 118 of the Act and signed bythe Chairperson.pFrom the commencement of the meeting and until the conclusion ofsuch meeting, no person other than the Chairperson, Directors,Company Secretary and any other person whose presence is requiredby the Board shall be allowed access to the place where any directorby the Board shall be allowed access to the place where any directoris attending the meeting either physically or through videoconferencing without the permission of the Board.

Matters not to be dealt with in a i h h id f imeeting through video conferencing

The following matters shall not be dealt with in any meetingh ld th h id f iheld through video conferencing:-

(i) the approval of the annual financial statements;

(ii) the approval of the Board’s report;

(iii) the approval of the prospectus;

(iv) the Audit Committee Meetings for consideration oft daccounts; and

(v) the approval of the matter relating to amalgamation,merger demerger acquisition and takeovermerger, demerger, acquisition and takeover.

Committees of the BoardCommittees of the BoardThe Board of directors of every listed companies

d th f ll i g l f i h lland the following classes of companies shallconstitute an Audit Committee and a Nominationand Remuneration Committee of the Board:-

(i) all public companies with a paid up capital of ten crorerupees or more;rupees or more;

(ii) all public companies having turnover of one hundredcrore rupees or more;

(iii) all public companies having in aggregate outstanding(iii) all public companies, having in aggregate, outstandingloans or borrowings or debentures or deposits exceeding fiftycrore rupees or more.

EstablishmentEstablishment ofof vigilvigil mechanismmechanismEvery listed company and the companies belonging to the following class or

classes shall establish a vigil mechanism for their directors and employees toreport their genuine concerns or grievances:-

(a) the Companies which accept deposits fromthe public;

(b) the Companies which have borrowed moneyfrom banks and public financial institutionsin excess of fifty crore rupees.

The vigil mechanism shall provide for adequate safeguards againstvictimisation of employees and directors who avail of the vigil mechanism andalso provide for direct access to the Chairperson of the Audit Committee.

In case of repeated frivolous complaints beingfiled by a director or an employee, the auditcommittee or the director nominated to playh l f di i kthe role of audit committee may take

suitable action against the concerneddirector.

Powers of Board Powers of Board The following powers shall also be exercised by the Boardof Directors only by means of resolutions passed at

ti f th B dmeetings of the Board :-(1) to make political contributions; (2) to appoint or remove key managerial personnel (2) to appoint or remove key managerial personnel

(KMP); (3) to appoint internal auditors and secretarial auditor; (4) to take note of the disclosure of director’s interest ;(5) to invite or accept or renew public deposits ;(6) to review or change the terms of public deposit; (7) to approve quarterly, half yearly and annual financial

statements; andstatements; and(8) to buy, sell investments held by the company .

Disclosures by a director of his Disclosures by a director of his interest interest

Every director shall disclose his concern or interest inany company or companies or bodies corporate (includingshareholding interest), firms or other association ofindividuals, by giving a notice in writing in Form MBP 1.individuals, by giving a notice in writing in Form MBP 1.

It shall be the duty of the director giving notice ofinterest to cause it to be disclosed at the meeting heldimmediately after the date of the notice.

All notices shall be kept at the registered office and suchnotices shall be preserved for a period of eight yearsp p g yfrom the end of the financial year.

Loans to Director etc.  section 185 No company shall, directly or indirectly, advance any loan, including any loan 

represented by a book debt, to any of its directors or to any other person in whom the director is interested or give any guarantee or provide any security in connection with any loan taken by him or such other person:

Provided that nothing contained in this sub‐section shall apply to—

(a) the giving of any loan to a managing or whole‐time director—

(i) as a part of the conditions of service extended by the company to all it(i) as a part of the conditions of service extended by the company to all it employees; or

(ii) pursuant to any scheme approved by the members by a special resolution; or

(b) a company which in the ordinary course of its business provides loans or gives guarantees or securities for the due repayment of any loan and in respect of 

h l i i h d l h h b k d l dsuch loans an interest is charged at a rate not less than the bank rate declared by the Reserve Bank of India.

Loans to Director etc.  section 185 Section 295/296

Companies Act 1956Section 185

Companies Act 2013

1.It was applicable only to publicCompanies.

1.This Section is applicable to allCompanies including Private Company.

2.Previously it was restricted.It was allowed with the previous

l f t l t

2.Now it is Strictly prohibited.

approval of central government.

3.Imprisonment could be avoided byfully repaying the loan.

3.Inspite of repayment of the fullamount imprisonment is still bey p y g

4.The word Book Debt is not included.

pinflicted.

4.The word Book Debt is included.

Loans & Investments by Company-Sec 186

• List of exemptions taken off (Private Ltd & Subsidiary Companies)

• Scope no longer limited to inter-corporate loans & investments, but expanded

to include loans to personsto include loans to persons.

• Rate of interest on loans to be linked to government securities instead of

prevailing bank rate.

• The full particulars of the loan given, investment made or guarantee given or

security provided and the purpose to be disclosed in the financial statement.Investment Limits: Loan Limits not requiring ShareholderInvestment Limits:

Not more than two layers of investment companies

This shall not affect:

Loan Limits not requiring Shareholder Approval:

Not exceeding 60% of  paid up This shall not affect:-A company can acquire any other companyincorporated in a country outside India, withsubsidiaries beyond 2 layers as per the laws ofsuch country

capital +  free reserves                   whichever+ securities premium     is

OR MORE100% of free reservessuch country.

- A subsidiary company having any investmentsubsidiary to meet the requirement under law.

100% of free reserves  +  Securities premium       

Loans & Investments by Company

Every company giving loan or giving guarantee or providingsecurity or making an acquisition of securities shall, fromy g q ,the date of its incorporation, maintain a register in FormMBP 2.

Investments of company to be held in its own name -Every company shall, from the date of its registration,Every company shall, from the date of its registration,maintain a register in Form MBP 3 and enter therein,chronologically, the particulars of investments in shares orother securities beneficially held by the company but whichother securities beneficially held by the company but whichare not held in its own name and the company shall alsorecord the reasons for not holding the investments in itsown name and the relationship or contract under which theinvestment is held in the name of any other person.

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