Audit committee

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Nidhi Agrawal (Querist)
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30 November 2012 Hello All,

I am working in a private limited company and just wanted to know whether company is liable to have audit committee? And if yes then what are the acts and regulations would apply on it?

i.e. whether SEC would apply or what else?

Please reply its urjent

CA.Sourabh Sethia

CA.Sourabh Sethia (Expert)
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30 November 2012 it applies to all pubic companies with a paid-up capital of Rs 5 crore or more

Ajay Mishra

Ajay Mishra (Expert)
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30 November 2012 hi

No, it will not apply to your private limited company. The provision of Independent Director is not applicable so constitution will also not possible.

Composition of the Audit Committee

As per clause 49 of the Listing Agreement, the audit committee shall have minimum three directors as members. Two third of the members of audit committee shall be independent directors. All the members of the audit committee shall be financially literate and at least one member shall have accounting or related financially management expertise. By implication, audit committee can to the extent of one-third of the strength comprise of non-independent directors including executive directors.

As per section 292A of the Companies Act, 1956, not less than three directors or such higher number of the directors as the Board may determine of which two third of the total number of directors shall be a directors other than MD or WTD.

Nidhi Agrawal

Nidhi Agrawal (Querist)
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21 January 2013 thanx.....

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