Background
-
There is a Pvt Company which is not required to constitute Audit Committee under the Companies Act 2013 (As per Section 177 read with rules).
-
This Company is also not required to appoint “Independent Director”
-
However provisions of “Vigil Mechanism” is applicable (As per Section 177 read with rules).
Query:
Can this Pvt. Company form an Audit Committee to oversee vigil mechanism without having any Independent Director in the said Audit Committee Meeting.
Thought 1
Since the Company is not required to appoint Independent Director, it can form an Audit Committee with existing Directors (being non-independent) which can oversee the vigil mechanism. And this Audit Committee can also be treated as the Audit Committee as per Section 177.
Thought 2
However the Company is not required to appoint Independent Director, it can form an Audit Committee with Independent Directors only as per Section 177 which can oversee the vigil mechanism.
Pl give your valuebale comments on the above.
CAclubindia
