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The Ministry of Corporate Affairs (MCA) has given three more months for independent directors to register in the online databank launched in December last year.
Independent directors of companies had to register by June 30 this year, but can now do so till end of September, the MCA has said.
In a separate development, the MCA has also extended by three more months — ie up to September 30 — the window for conduct of board meetings through video conferencing for approval of annual financial statements; audit committee meetings; board’s report; prospectus and approvals relating to amalgamation, mergers etc.
The latest move comes in the backdrop of the Covid-19 induced lockdown affecting functioning of corporates in the country.
Independent directors’ registration
It may be recalled that the independent directors databank was jointly launched by the MCA and Indian Institute of Corporate Affairs (IICA) on December 2 last year. This databank aims to strengthen the institution of independent directors, create a pool of skilled professionals and build an ecosystem to serve existing independent directors, aspiring professionals and companies.
Initially, the MCA wanted independent directors to register within three months, ie, by February, but later extended it by two months, till the end of April. The timeline was last month extended to end June. Now, this timeline has been again extended by three more months to end September.
After registration with the databank, the independent directors are required to take an online proficiency self-assessment test conducted by the IICA. The test is based on relevant topics on functioning of an individual acting as an independent director, such as companies law, securities law, basic accountancy and corporate governance.
Experts’ take
Sandeep Jhunjhunwala, Partner, Nangia Andersen LLP, said that these better-late-than-never relief announcements would help ease compliances for the managements of companies that are currently focussed on revival of their business.
Aseem Chawla, Managing Partner, ASC Legal, said that the latest MCA move of providing additional time to conduct board meetings virtually is a relief for Corporate India.
Sandeep Grover, Partner, Ortis Law Offices, said: “Considering the health emergency in India, this move by MCA would ensure that the corporates can continue conducting their essential business like approving financial statements, board reports, prospectus, matters relating to merger, demerger, acquisitions etc smoothly and efficiently without worrying about the physical presence of directors and other members.”
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