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independent director and audit committee

Ankit Agarwal (Student) (86 Points)

22 September 2017

a public company has no requirement to appoint an independent director as the limits specified are not yet met. It has appointed 2 independent directors. Is is now mandatory to constitute an audit committee also?

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4 Replies

Kalpesh Veer (PCS) (795 Points)
Replied 22 September 2017

Not required to constitute Audit committee

Ankit Agarwal (Student) (86 Points)
Replied 22 September 2017

thanks sandeep

Sudhir Todkar (CS Professional) (1021 Points)
Replied 23 September 2017

Not required.

But if it attracts any one or all of the criteria (i.e. paid up capital or turnover or borrowing) as specified in act should constitute audit committee and should appoint 1/3rd of the total number of directors as Independent Director.

For Example in the financial year 2016 - 2017 borrowing was 60 Crore but in subsequent financial year 2017 - 2017 the borrowings was 40 Crore In such case also company should comply with the provisions of the CA 2013 for 3 consecutive financial year from 2017-2018.

After 3 consecutive financial year if it doesn't attracts the criteria then Company need not to comply.