After the World Health Organization changed the status of the novel coronavirus (COVID-19) as a pandemic, there has been a slew of emergency actions that the Indian Government has taken to prevent further proliferation of the virus. These include strict restrictive measures around movement and public gatherings across the nation, leading to 'work from home' arrangements being implemented by employers. To ease the burden on compliance functions in light of the restricted work arrangements, certain regulatory authorities have granted relaxations to the corporate world, which are summarized below:

 

Regulatory Authority Relaxation Granted
Ministry of Corporate Affairs (MCA)
  1. The following matters can be dealt with in Board Meetings held through video conferencing till 30 June 2020 (which otherwise can only be considered in Board Meetings held in the physical presence of directors):
    • approval of annual financial statements;
    • approval of the Board's report;
    • approval of prospectus;
    • audit committee meetings for consideration of financial statements; and
    • approvals relating to amalgamation, merger, demerger, acquisition, and takeover.
  2. The above relaxation is granted by amending rule 4 of Companies (Meetings of Board and Its Powers) Rules, 2014.
  3. MCA advises companies and LLPs to implement 'work from home' ('WFH') policy as a measure to contain the spread of COVID-19.
  4. MCA introduces a form for 'Company Affirmation of Readiness towards COVID-19' (CAR), to confirm their readiness to deal with the COVID-19 threat. CAR is a simplified web-based form with radio buttons 'YES/NO,' which effectively asks if the company/LLP has implemented WFH policy. There is no requirement of DSC for filing CAR and does not involve payment of any fee. 
National Company Law Tribunal (NCLT) All benches of NCLT to remain closed till 31 March 2020. It was earlier provided that if there is a 'limitation issue,' matters may be filed online at the Delhi, Mumbai, Hyderabad, Amaravati, and Jaipur benches, hard copies of which could be filed upon re-opening of the filing counters. Other than matters which are likely to be hit by limitation, it has been directed that filings may be postponed until the filing counters are re-opened. For NCLT benches other than Delhi, Mumbai, Hyderabad, Amaravati, and Jaipur, applications in matters which are possibly hit by a limitation issue may be filed (without annexures) by way of emails to the Registrars of the respective benches.
 
Securities And Exchange Board of India (SEBI) SEBI issued a circular granting relaxation for the following compliances under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('LODR'):
  1. The date for submitting the certificate relating to the share transfer facility is extended up to 31 May 2020 [Reg. 7(3) of LODR];
  2. The date for submitting the statement of investors' complaints is extended up to 31 May 2020 [Reg. 13(3) of LODR];
  3. The date for filing secretarial compliance report is extended up to 30 June 2020 [Reg.24A of LODR];
  4. The date for submitting the corporate governance report is extended up to 15 May 2020 [Reg. 27(2) of LODR];
  5. The date for submitting the shareholding pattern is extended up to 15.05.2020 [Reg. 31 of LODR];
  6. The date for submitting audited quarterly and yearly financial results is extended up to 30.06.2020 [Reg. 33 of LODR];
  7. A relaxed time gap between two board/audit committee meetings held or proposed to be held between the period 1 December 2019 and 30 June 2020. This move effectively relaxes the gap of 120 days between two meetings (which otherwise mandates that a gap between two meetings cannot exceed 120 days). [Reg. 17(2) & 18(2) (a) of LODR].
However, MCA has yet to come out with circular supporting this relaxation under Companies Act, 2013. 
Hon'ble Supreme Court It is understood that the Hon'ble Supreme Court is also considering the aspect of video conferencing. A decision on the modalities of the same may be taken shortly.

Further, it is also learned that the Hon'ble Supreme Court indefinitely extends the limitation period for filing appeals against orders of High Court or any tribunal before Supreme Court. No appeal is to be time-barred in the wake of the shutdown of the Apex Court due to COVID-19.

Our Comments

Undoubtedly, prevention is the best course of action to contain COVID-19 spread, and in that direction, cooperation from all the stakeholders is expected by the Government. While that expectation is legitimate, the regulators have also responsively issued immediate relief that corporates may require while ensuring their compliance obligations. Moving ahead, further relaxations are expected to come into effect because COVID-19 has effectively impaired the ability of corporate and regulators to comply with regulatory requirements in a time-bound manner.

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