Audit committee
This query is : Resolved
10 July 2012
Hi,
Please guide me whether an unlisted company having an authorised capital of more than 20 crore Rs. needs to have an audit committee as per section 292(A) of the Companies Act, 1956 If yes, then please clarify that whether any family member can be appointed as the additional director and the provisions can be complied or an independent director has to be appointed for this purpose. Thanking You,
Thanks & Regards
Ritu Agarwal
C.S. & LL.B.
Please guide me whether an unlisted company having an authorised capital of more than 20 crore Rs. needs to have an audit committee as per section 292(A) of the Companies Act, 1956 If yes, then please clarify that whether any family member can be appointed as the additional director and the provisions can be complied or an independent director has to be appointed for this purpose. Thanking You,
Thanks & Regards
Ritu Agarwal
C.S. & LL.B.
10 July 2012
The requirement is with regard to the paid up capital.
Section 292A of the Companies Act, 1956
Section 292A requires that every public company having paid-up capital of not less than Rs. 5 crore shall constitute an Audit Committee of the Board. The other requirements are given as under:—
1. It will consist of not less than three directors; two thirds of its total strength shall be of director other than managing and whole-time directors.
2. The members of the Audit Committee shall exercise such powers and perform such functions as may be specified by the Board.
3. The members will elect one amongst themselves as chairman.
4. The Auditors of the company, the internal Auditor, if any, and the director in charge of finance will participate in the meetings and shall not have right to vote.
5. The Audit Committee shall have discussions with the Auditor periodically about internal control systems, the scope of audit etc. and review the half-yearly and annual accounts before submission to the Board.
6. The Audit Committee shall have authority to investigate any matter above stated and shall have access to records of the company.
7. The composition of the Audit Committee shall be mentioned in the annual directors' report.
8. The recommendations of the Audit Committee relating to financial management, an audit report shall be binding on the Board.
9. If the Board does not accept the recommendations of the Audit Committee, it shall record the reasons therefor and communicate such reasons to the shareholders.
10. The Chairman of the Committee shall attend the annual general meetings of the company to provide clarification on any matter relating to audit.
**Clause 49 of the listing agreement not applicable since it is an unlisted company.
Section 292A of the Companies Act, 1956
Section 292A requires that every public company having paid-up capital of not less than Rs. 5 crore shall constitute an Audit Committee of the Board. The other requirements are given as under:—
1. It will consist of not less than three directors; two thirds of its total strength shall be of director other than managing and whole-time directors.
2. The members of the Audit Committee shall exercise such powers and perform such functions as may be specified by the Board.
3. The members will elect one amongst themselves as chairman.
4. The Auditors of the company, the internal Auditor, if any, and the director in charge of finance will participate in the meetings and shall not have right to vote.
5. The Audit Committee shall have discussions with the Auditor periodically about internal control systems, the scope of audit etc. and review the half-yearly and annual accounts before submission to the Board.
6. The Audit Committee shall have authority to investigate any matter above stated and shall have access to records of the company.
7. The composition of the Audit Committee shall be mentioned in the annual directors' report.
8. The recommendations of the Audit Committee relating to financial management, an audit report shall be binding on the Board.
9. If the Board does not accept the recommendations of the Audit Committee, it shall record the reasons therefor and communicate such reasons to the shareholders.
10. The Chairman of the Committee shall attend the annual general meetings of the company to provide clarification on any matter relating to audit.
**Clause 49 of the listing agreement not applicable since it is an unlisted company.
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10 July 2012
Thanks for clarifying my doubts. It is very much beneficial to me .
10 July 2012
You may also refer to article from below link for more information on this topic---
https://www.caclubindia.com/articles/audit-committee-an-overview-12433.asp
https://www.caclubindia.com/articles/audit-committee-an-overview-12433.asp
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