18 January 2011
Nothing special is done. Like a routine meeting only. You can induct the members of the respective committees and define the scope of the committee in the first meeting.
"RESOLVED THAT, SHRI......MD and SHRI.....Director, SHRI.......Directors of the company be and are hereby appointed to constitute an Audit Committee of the Board to deal with internal audit control systems, the scope of audit, review of half yearly and annual financial systems before their submission to the board and also to ensure compliance of internal control systems.
"RESOLVED FURTHER that the same committee do have authority to investigate into any matter in relation to areas specified above or refered to it by the board and for this purpose will have full access to information contained in the records of the company and external professional advice, if necessary.
"RESOLVE FURTHER that the recommendations of the said committee on any matter relating to financial management including the audit report be finding on the Board.
"RESOLVED FURTHER that the members of the said committee do elect a chairman from amongst themselves to be the chairman of the said committee whose tenure of office will also be decided by the members of the committee.
18 January 2011
Here is the specimen copy of minutes of firt meeting.
MINUTES OF THE MEETING OF AUDIT COMMITTEE OF DIRECTORS
MINUTES OF THE FIRST MEETING OF AUDIT COMMITTEE OF ...................LIMITED HELD AT 18, COMMUNITY CENTRE ON MONDAY, THE 10th DAY OF JANUARY, 20XX AT 11:30 A.M.
The following Members were present :- 1. XXXXXXXXXXX >> Chairman 2. XXXXXXXXXXX >> Member 3. XXXXXXXXXXX >> Member In Attendance :- 1. XXXXXXXXXXX >> Company Secretary By Invitation :- 1. XXXXXXXXXXX >> Managing Director (Finance) 2. XXXXXXXXXXX >> Internal Auditors
ITEM NO. : 1
(1) ELECTION OF CHAIRMAN OF COMMITTEE
XXXXXXXXXXX, Committee Member informed the Committee that pursuant to provision of Section 292A(3) of the Companies Act, 1956, any Member of the Committee may be appointed as a Chairman of the Audit Committee of the Company.
He also read the said Section 292A(3) and after concurrence of XXXXXXXXXXX, he proposed the name of XXXXXXXXXXX as the Chairman of the Audit Committee of the Company.
After some deliberations, the members of the Committee present at the Meeting thanked XXXXXXXXXXX to accept the position of Chairman of Audit Committee of the Company and decided to appoint XXXXXXXXXXX as a Chairman of the this Meeting and subsequent Meetings until otherwise decided. Then the following Resolution was passed unanimously.
"RESOLVED THAT pursuant to Section 292A(3) of the Companies Act, 1956, XXXXXXXXXXX be and is hereby appointed to hold the office of the Chairman of this meeting and every subsequent Meetings of the Audit Committee until otherwise decided."
ITEM NO.: 2 TERMS & REFERENCE MADE BY THE BOARD OF DIRECTORS OF THE COMPANY GIVING SCOPE OF WORK FOR AUDIT COMMITTEE :-
XXXXXXXXXXX, Chairman of the Meeting informed the members that the Board of Directors of the Company at their meeting held on 22nd February, 2001 has defined Terms & Reference giving scope of work to be performed by the Audit Committee. XXXXXXXXXXX, then placed before the Committee a paper on Terms & Reference made by the Board about the scope of work to be performed by the Audit Committee, duly initialed by him for the purpose of identification.
The Members of the Committee discussed various points stated of the scope of the Audit Committee at length and then passed the following resolutions.
"RESOLVED THAT the following terms & reference made by the Board of Directors of the Company at their meeting held on XXXXXXXXXXX be and are hereby noted. i. Reviewing internal controls and internal audit function with the management/internal auditors. ii. Oversight of financial reporting process/disclosures and review of interim & annual financial statements before the Board approval. iii. Periodic discussion with the statutory auditors of the company (whether before, during or after the audit) on internal systems, nature and scope of audit, audit observations and areas of concern, if any. v. Review the outcome of internal investigations of material fraud, irregularity and failure of internal system. vi. Review financial & risk management policies. vii. To look into substantial defaults, if any, in payments to creditors and shareholders. viii. In addition to the above, the committee may look into any matter pertaining to finance and accounts areas, as it may deem fit and for this purpose the Audit Committee shall have full access to information contained in the records of the Company and external professional advise, if necessary.
FURTHER RESOLVED THAT the Audit Committee shall conduct discussions with the internal auditors and statutory auditors periodically about internal control systems, the scope of audit including the observations of the auditors.
FURTHER RESOLVED THAT the Audit Committee shall review the quarterly and annual financial statements and submit the same to the Board with its recommendations, if any.
FURTHER RESOLVED THAT the recommendations made by the Audit Committee on any matter relating to financial management including the audited report shall be binding on the board.
FURTHER RESOLVED THAT the statutory auditors and the internal auditors of the Company be requested as and when required to attend and participate at meetings of the audit committee, without right to vote.
FURTHER RESOLVED THAT audit committee shall meet periodically, as it deems fit, and in any case, have atleast four meetings in a financial year of the Company.
FURTHER RESOLVED THAT the Audit Committee have the minutes of its meetings drawn and approved by the Chairman of the Committee and the same be circulated to the members of the Board within thirty days from the date of such meeting.
FURTHER RESOLVED THAT the Company Secretary of the Company shall be the Secretary of the Audit Committee.
FURTHER RESOLVED THAT the Chairman of the Audit Committee shall attend the annual general meeting of the Company to provide any clarification on the matter relating to audit as may be required by the members of the Company.
ITEM NO. : 3
PROCEDURE FOR CONDUCT OF MEETINGS :-
The Chairman then explained in detail the need and necessity of outlining the procedure for conduct of the Meetings in proper manner and with this intents the members present at the Meeting deliberated the matter from various angles and then decided the following requisites.
1) Notice of the meeting shall be served on all members in advance.
2) The Chairman in consultation with other members shall decide the need of other representatives, i.e. Statutory Auditors, Internal Auditors, Functional Head/Representative of the concerned Departments of the Company. All invitees shall sign the Attendance Register.
3) Two members shall form quorum of the Committee, in absence of proper quorum, the Meeting shall be adjourned next day at the same time and place. At the adjourned meeting, if the required number of members are not present to form proper quorum within half an hour of the time, the member/s present shall be deemed to be a proper quorum for that meeting and the business transacted shall be considered as valid.
4) Absent Member may send his comments on the Agenda/business of the Meeting to the Chairman or the Company Secretary.
The Chairman shall read out the comment of such absent member at the Meeting.
5) The Chairman of the meeting shall preside over the meeting and shall ascertain the sense of the meeting.
In case of equality of vote, the Chairman shall exercise the casting vote.
6) Minutes of each meeting shall be prepared by the Company Secretary in consultation with the Chairman of the Meeting and the shall be confirmed at the next meeting.
ITEM NO. : 4
INTERNAL CONTROL SYSTEM OF THE COMPANY :- Then the Chairman took up the next business of the Agenda to study and review of the existing Internal Control System of the Company and circulated Operational Procedure prepared by the various Department Heads of the Organisation.
The members of the meeting over viewed the Operational Procedure of various Departments. Yet, the members expressed their views that in depth study of the Operational Procedure is required and therefore deferred the matter of discussion on this business for the succeeding Meeting.
Thereafter the members reviewed the current format of the Internal Auditors Report and they asked several questions and explanations regarding Internal control, Audit and other operational aspects, which were suitably replied by the XXXXXXXXXXX, Managing Director (Finance) and the Internal Auditors XXXXXXXXXXX.
ITEM NO. : 5
MANAGEMENT INFORMATION SYSTEM :-
XXXXXXXXXXX then requested XXXXXXXXXXX to apprise the Committee Members about the Management Information System (MIS) of the Company. XXXXXXXXXXX apprised the members in general about the nature of information and reports generated by the EDP Department of the Company.
To apprise in more detail, XXXXXXXXXXX asked the Company Secretary to inform XXXXXXXXXXX to remain present at the next meeting of the Committee.
DATE FOR NEXT MEETING :-
Thereafter members decided to convene next meeting on XXXXXXXXXXX at XXXXXXXXXXX at the office XXXXXXXXXXX
There being no other business left on agenda, the meeting was closed with a vote of thanks to the chair.
18 January 2012
Which are the subject matters to be there in routine (half yearly) Audit committee meeting? Is it compoulsory for Stat. Auditor to attend the meeting?
CAclubindia
