FYZ Ltd., an unlisted public company, has six directors on the Board with a quorum of 3 directors physically present for any board meeting. The Company convened a board meeting to approve the annual financial statements

Section 173 read with Rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014 provides that approval of the financial statements cannot be dealt with in any meeting held through video conferencing. Further, the 173 (2) Second proviso read with Rule 4 provides that where there is quorum presence in a meeting through physical presence of directors, any other director may participate conferencing through video or other audio-visual means. Para 3.3 of Secretarial Standard on Board meetings (SS-1) clarifies that any director participating through electronic mode in respect of the restricted items (like approval of financial statements) with the express permission of the Chairman shall however neither be entitled to vote nor be counted for the purpose of quorum in respect of such restricted item of business. FYT Ltd. has four directors physically present at the board meeting who will make the quorum for the meeting and the subject of approval of financial statements. Therefore, the participation of the two directors through video conferencing will not invalidate the meeting and the approval of the financial statements.