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TMI BlogChapter XII - The Companies (Meetings of Board and its Powers) Rules, 2014.X X X X Extracts X X X X X X X X Extracts X X X X ..... ise requires, - (a) Act means the Companies Act, 2013; (b) Annexure means the Annexure appended to these rules; (c) Fees means the fees as specified in the Companies (Registration Offices and Fees) Rules, 2014 ; (d) Form or e-Form means a form set forth in Annexure to these rules which shall be used for the matter to which it relates; (e) Related party means a director or key managerial personnel of the holding company or his relative with reference to a company, shall be deemed to be a related party; (f) section means the section of the Act. (2) Words and expressions used in these rules but not defined and defined in the Act or in the Companies (Specification of Definitions Details) Rules, 2014 , shall have the same meanings respectively assigned to them in the Act or in the said Rules. 3. Meetings of Board through video conferencing or other audio visual means.- A company shall comply with the following procedure, for convening and conducting the Board meetings through video conferencing or other audio visual means. (1) Every Company shall make necessary arrangements to avoid failure of video or audio visual connection. (2) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under clause (c), it shall be assumed that the director shall attend the meeting in person. (4) At the commencement of the meeting, a roll call shall be taken by the Chairperson when every director participating through video conferencing or other audio visual means shall state, for the record, the following namely:- (a) name; (b) the location from where he is participating; (c) that he has received the agenda and all the relevant material for the meeting; and (d) that no one other than the concerned director is attending or having access to the proceedings of the meeting at the location mentioned in clause (b); (5) (a) After the roll call, the Chairperson or the Company Secretary shall inform the Board about the names of persons other than the directors who are present for the said meeting at the request or with the permission of the Chairperson and confirm that the required quorum is complete. Explanation.- A director participating in a meeting through video conferencing or other audio visual means shall be counted for the purpose of quorum, unless he is to be excluded for any items of business under any provisions of the Act or the rules. (b) Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectronic mode as may be decided by the Board. (b) Every director who attended the meeting, whether personally or through video conferencing or other audio visual means, shall confirm or give his comments in writing, about the accuracy of recording of the proceedings of that particular meeting in the draft minutes, within seven days or some reasonable time as decided by the Board, after receipt of the draft minutes failing which his approval shall be presumed. (c) After completion of the meeting, the minutes shall be entered in the minute book as specified under section 118 of the Act and signed by the Chairperson. Explanation.- For the purposes of this rule, 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. 4. Matters not to be dealt with in a meeting through video conferencing or other audio visual means.- (1) The following matters shall not be dealt with in any meeting held through video conferencing or other audio visual means.- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors who avail of the vigil mechanism and also provide for direct access to the Chairperson of the Audit Committee or the director nominated to play the role of Audit Committee, as the case may be, in exceptional cases. (5) In case of repeated frivolous complaints being filed by a director or an employee, the audit committee or the director nominated to play the role of audit committee may take suitable action against the concerned director or employee including reprimand. 8. Powers of Board.- In addition to the powers specified under sub-section (3) of section 179 of the Act, the following powers shall also be exercised by the Board of Directors only by means of resolutions passed at meetings of the Board.- (1) to make political contributions; (2) to appoint or remove key managerial personnel (KMP); (3) to take note of appointment(s) or removal(s) of one level below the Key Management Personnel; (4) to appoint internal auditors and secretarial auditor; (5) to take note of the disclosure of director s interest and shareholding; (6) to buy, sell investments held by the company (other than trade investments), constituting five percent or more of the paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urposes of clause (a) of sub-section (11) of section 186 , the expression business of financing of companies shall include, with regard to a Non-Banking Financial Company registered with Reserve Bank of India, business of giving of any loan to a person or providing any guaranty or security for due repayment of any loan availed by any person in the ordinary course of its business . (3) No company registered under section 12 of the Securities and Exchange Board of India Act, 1992 and also covered under such class or classes of companies which may be notified by the Central Government in consultation with the Securities and Exchange Board, shall take any inter-corporate loan or deposits, in excess of the limits specified under the regulations applicable to such company, pursuant to which it has obtained certificate of registration from the Securities and Exchange Board of India. 12. Register.- (1) Every company giving loan or giving guarantee or providing security or making an acquisition of securities shall, from the date of its incorporation, maintain a register in Form MBP 2 and enter therein separately, the particulars of loans and guarantees given, securities provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery 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 or other securities beneficially held by the company but which are not held in its own name and the company shall also record the reasons for not holding the investments in its own name and the relationship or contract under which the investment is held in the name of any other person. (2) The company shall also record whether such investments are held in a third party s name for the time being or otherwise. (3) The register shall be maintained at the registered office of the company. The register shall be preserved permanently and shall be kept in the custody of the company secretary of the company or if there is no company secretary, any director or any other officer authorised by the Board for the purpose. (4) The entries in the register shall be authenticated by the company secretary of the company or by any other person authorised by the Board for the purpose. 15. Contract or arrangement with a related party.- A company shall enter into any contract or arrangement with a related party subject to the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or rendering of any services directly or through appointment of agents exceeding ten percent. of the net worth as mentioned in clause (d) and clause (e) of sub-section (1) of section 188 ; (b) appointment to any office or place of profit in the company, its subsidiary company or associate company at a monthly remuneration exceeding two and half lakh rupees as mentioned in clause (f) of sub-section (1) of section 188 ; or (c) remuneration for underwriting the subscription of any securities or derivatives thereof of the company exceeding one percent. of the net worth as mentioned in clause (g) of sub-section (1) of section 188 . Explanation.- (1) The Turnover or Net Worth referred in the above sub-rules shall be on the basis of the Audited Financial Statement of the preceding Financial year. (2) In case of wholly owned subsidiary, the special resolution passed by the holding company shall be sufficient for the purpose of entering into the transactions between wholly owned subsidiary and holding company. (3) The explanatory statement to be annexed to the notice of a general meeting convened pursuant to section 101 shall contain the following particulars namely:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lars are disclosed to the members of the company and they pass a resolution at a general meeting approving the payment of such amount - (a) name of the director; (b) amount proposed to be paid; (c) event due to which compensation become payable; (d) date of Board meeting recommending such payment; (e) basis for the amount determined; (f) reason or justification for the payment; (g) manner of payment - whether payable in cash or otherwise and how; (h) sources of payment; and (i) any other relevant particulars as the Board may think fit. (2) Any payment made by a company by way of compensation for the loss of office or as a consideration for retirement from office or in connection with such loss or retirement, to a managing director or whole time director or manager of the company shall not exceed the limit as set out under section 202 . (3) No payment shall be made to the managing director or whole time director or manager of the company by way of compensation for the loss of office or as consideration for retirement from office (other than notice pay and statutory payments in accordance with the terms of appointment of such director or manager, as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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