Audit Committee

Nooral,

 

Sec 292A is applicable to public company having paid up capital of Rs. 5 Crores or more..

So, the constitution of audit committee is mandatory in ur case...

I vll post the complete details tomorrow..

You have to workout on the composition of your board of director to form an Audit Committee in accordance with section 292A.

Regards

The formation of Audit Committee is mandatory in your case.

Since you have three directors, the Audit Commitee shall consist of all the 3 directors, provided 2 among 3 directors are not executive directors.

The Audit Committee can be formed by means of a resolution in a Board Meeting. 

As per section 292A every Public Company having paid up capital of more than Rs. 5 crores shall constitute a Audit Committee which shall consist of not less than 3 directors and such number of other directors as the Board may determine of which 2/3 of the total number of members shall be other than whole time directors.

Further, the provisions of Section 292A must be complied with in constituting Audit Committee.

Dear Nooral,

In your case all the 3 directors must be in Audit Committee and 2 of them must be non executive.

Dear Nooral,

In your case all the 3 directors must be in Audit Committee and 2 of them must be non executive.

Imp Points :-

1. Only a director can become a member of the committee. (director will include addittional director for this purpose)

2. Minimum 3 members.

3. Minimum 2/3rd of total number of members of the committee shud be the directors otherthan MD/WTD.

4. Only member of committee can be appointed as a CHAIRMAN. Elected by members of committee. & chairman shall attend AGMs to provide clarifications on matters relating to audit..

So in ur case, minimum two directors otherthan MD/WTD must be appointed if audit committee is formed with 3members..

If u need any further help, then let me know...

Adarsh

Dear as per provision of sec 292A of companies Act 1956, sec is appllicbale to those public compnay whose paid up capital is more than rs. 5 crore or more now in ur case u have not clearly explained that what is paid up capital of your company. The authorized capital does not stand any matter. as per sec 292A composition of audit commitee is:

there should be minimum 3 no of board member out of which 2/3 should be non-executive i.e. other than WTD/MD and additional director is also a non-executive director in general practive until or unless you would not appoint him a MD. so you can consititute a valid audit committee. there is no such provision in the sec 292A regarding prohibition of additional director as member of audit committee.

Originally posted by : nooral
	Thanks lot friends. I may require your guidelines in many other matters too hope you will. My concern is about position of additional director who should vacate the office in next AGM as per sec 260 of the act then the entire process will have to be duplicated if the same directors vacate the office.

Yes Nooral.. !! in case of additional director, the entire process vll hv to be duplicated..

can anyone provide me draft resolution of constituing an audit committee accompanying terms of reference and other conditions of audit committee of an public limited unlisted company.

CS.Sachin Sinha