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To cope with the adverse economic impact of the coronavirus-induced lockdown, India Inc has sought a slew of regulatory relaxations, including extending the financial and tax year upto June 30, extension of timelines for CSR spending and more time for appointment of women and independent directors.
These formed part of the suggestions that came at a video conference that Corporate Affairs Secretary Injeti Srinivas had with the top brass of Confederation of Indian Industry (CII), FICCI, Assocham and PHDCCI, sources said.
Relaxation of board rules
CII Director-General Chandrajit Banerjee, had admitted that there was a need to relax few more provisions in addition to the several initiatives already taken by the MCA post the lockdown announcement.
These include allowing companies to pass circular resolutions for restricted matters without the requirement of conducting a board meeting for approval for a period up to June 30.
CII has also now made a case for relaxation of mandatory requirement of holding a meeting in case of appointment of directors, including independent directors, in casual vacancy.
Also, in view of a complete lockdown, it may not be possible even for the IT and administrative staff to go to office to facilitate recording of the video conferencing. In such a situation, the MCA may temporarily dispense the requirement of recording, the CII has suggested.
On stamp duty, CII has suggested that the government may consider an online system for payment of stamp duty and receipt of an online certificate of such payments, which can be used as evidence of due payment of stamp duty for both issuance and transfer of shares.
CII has also called for extension of date for utilisation of CSR spends to June 30.
Extensions sought
On its part, PHD Chamber of Commerce and Industry (PHDCCI), represented by SP Sharma, Chief Economist, has made several suggestions including extension of financial year and tax year till June 30. It has also called for extension in registration of independent directors for database and for appearing for exams.
The chamber has also suggested relaxation of provisions in company law to enable companies donate more than 5 per cent of average net profit of last three years (for fighting Covid-19) without holding an EGM of shareholders.
The MCA has already relaxed several procedures to ensure corporate actions and work is unhindered. Besides allowing video conferencing for board meetings, the MCA had announced moratorium from April 1 to September 30 in respect of any ROC filing. It had also waived off additional fees and relaxed mandatory requirement of holding two board meetings with a gap of 120 days up to September 30.
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