11 October 2010
there are two audit committee,one under company law and second corporate governance as required under listing agreement of clause 49. and both have different provisions regarding formation & other matters. in practical which prevails.
12 October 2010
In case of a listed company provisions of clause 49 shall prevail over section 292 bcoz they are more stringent.
In case of an unlisted company provisions of section 292A shall prevail over clause 49 bcoz listing agreements has nothing to do with an unlisted company.
As per clause 49 of the Listing Agreement, the audit committee shall have minimum three directors as members. Two third of the members of audit committee shall be independent directors. All the members of the audit committee shall be financially literate and at least one member shall have accounting or related financially management expertise. By implication, audit committee can to the extent of one-third of the strength comprise of non-independent directors including executive directors.
As per section 292A of the Companies Act, 1956, not less than three directors or such higher number of the directors as the Board may determine of which two third of the total number of directors shall be a directors other than MD or WTD.
Quorum for Audit Committee Meeting
The quorum for audit committee shall be either two members or one third of the members, whichever, is greater, but there should be a minimum of two independent members present.
Section 292A of the Act is silent with regard to the quorum for the audit committee meeting. Though not specifically provided, in such circumstances section 287 may be applicable.
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