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CS Executive · Company Law and Practice · Meetings of Board and its Committees

Zenith Polymers Ltd, a public company, held Board meetings on 5 April, 20 July, 12 November and 10 February in a financial year. Which statement best describes compliance with the frequency requirement of section 173(1) of the Companies Act, 2013?

The company complies. Section 173(1) requires at least four Board meetings a year with no more than 120 days between two consecutive meetings. Here four meetings were held and every gap (106, 115 and 90 days) is within 120 days, so there is no breach.

  1. AIt complies, because four meetings were held in the year
  2. BIt does not comply, because the gap between 5 April and 20 July exceeds 120 days
  3. CIt does not comply, because the gap between 20 July and 12 November exceeds 120 daysCorrect
  4. DIt does not comply, because the gap between 12 November and 10 February exceeds 120 days

Explanation

Section 173(1) needs at least four meetings a year and not more than 120 days between two consecutive meetings. From 5 April to 20 July is 106 days, from 20 July to 12 November is 115 days (11 + 31 + 30 + 31 + 12 = 115), and from 12 November to 10 February is 90 days. Recounting: 20 July to 12 November: 11 days left in July, 31 August, 30 September, 31 October, plus 12 gives 115. Therefore every gap is within 120 days and the company complies with both conditions, so option 1 is the correct one. Options 2, 3 and 4 wrongly treat gaps within 120 days as breaches.

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