Fomation of Audit committee on conversion

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 February 2011 Dear Friends

Please note that my company has been recently been changed in Public Limited Company (Unlisted). We have 4 Directors (all appointed as executive director)- 2 promoter directors and 1 director finance and 1 Director operations.
Now as the 2/3 of the Audit should comprise of the Audit Committee plan to appoint one of my promoter director as non executive director and the director operations as non executive director by filing revised form 32 and making them part of the audit committee . Rest my MD and Promoter director will be part of the audit committe and thus my audit committe will be formed.

Pl give your opinion. Correct if I am wrong.

udit sharma

udit sharma (Expert)
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15 February 2011 As per the provisions of section 292A of the Companies Act, 1956 every Public Company or a Private Company which is a subsidiary of a Public Company having a paid up capital of Rs.5 Crores or more is required to constitute a committee of the Directors in the name of 'Audit Committee'. Such Committee shall consist of not less than 3 Directors of whom not less than 2/3 of the total number of members of Audit Committee must be Directors other than Managing Director of WTD i.e. to say other than Executive Directors.

As there are 4 Directors who are to be members of the Audit Committee, at least 2/3rd of 4 i.e. 3 Directors must be NED.

God Bless

CS Udit Sharma

Querist : Anonymous

Querist : Anonymous (Querist)

15 February 2011 Thanks for the reply

But pl note out of the 4 directors we are planning to form the audit committee out these i.e only 3.

Now pl reply

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udit sharma

udit sharma (Expert)
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15 February 2011 Then the above solution quoted by you will meet the requirements.