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borrowings paid after applicable of audit committee

24 May 2017

audit committee is applicable for one company based on paid up capital and borrowings. Once borrowings paid in the next year then the same section 177 is applicable for next year's. Please share the answer.

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Sudhir Todkar (CS Professional) (1021 Points)
Replied 25 May 2017

The Board of directors of every listed companies and the following classes of companies shall constitute an Audit Committee and a Nomination and Remuneration Committee of the Board-

(i) all public companies with a paid up capital of ten crore rupees or more;

(ii) all public companies having turnover of one hundred crore rupees or more;

(iii) all public companies, having in aggregate, outstanding loans or borrowings or debentures or deposits exceeding fifty crore rupees or more.

Explanation.- The paid up share capital or turnover or outstanding loans, or borrowings or debentures or deposits, as the case may be, as existing on the date of last audited Financial Statements shall be taken into account for the purposes of this rule.

In your case if all the above 3 (Capital, turnover & borrowing) threshold limits are not attracting for 3 CONSECUTIVE FINANCIAL year then such Company need not to constitute:

Audit Committee.
Nomination Remuneration Commitee and
Not required to appoint or reappoint independent director.

Feel free if you need more clarification