The government gave more time to companies to hold their board meetings.

Currently, the Companies Act, 2013, says that there should be at least four board meetings in a year and that the gap between two consecutive such meetings should not exceed 120 days. This has now been extended by 60 days. “The mandatory requirement of holding meetings of the board of the companies within prescribed interval provided in the Companies Act (120 days), 2013, shall be extended by a period of 60 days till next two quarters-till September 30,” a statement from the finance ministry said.

The relaxation comes just days after Sebi gave companies more time to declare their quarterly or annual financial results.

This would therefore mean that financial results declared by listed firms for the period ended March 31, 2020 could be delayed. Companies usually start reporting their numbers from the second week or third week of the following month.

Presently, listed companies have to declare their quarterly numbers within 45 days from the end of the quarter for quarterly results and 60 days from the end of financial year for the annual results. The market regulator had extended this by 45 days and one month respectively. Consequently, listed firms declaring their annual results have time till June 30 to announce their numbers as against the earlier deadline of May 30 while in the case of quarterly results, the revised deadline is June 30 as against May 15.

Observers said that the decision of the Government while welcome comes as companies have been unable to hold board meetings due to the ongoing coronavirus and calls for social distancing to reduce its spread. While this does lead to the question of whether a video conferencing can be held among the directors, the current rules stipulate that board members have to be physically present for considering certain matters like declaration of financial results, the board’s report or consideration of an acquisition.

However, recently, the Corporate Affairs Ministry gave some leeway in this front. `Considering the need to take precautionary steps to overcome the outbreak of Covid-19, the Government has in-principle decided to relax the requirement of holding Board meetings with physical presence of directors’’, it had said in a notice. The Ministry had said that this relaxation would apply till June 30.