1. Can any one tell me that how much Minimum & maximum no. of Independant Directors should be there in listed Company?
2.Who can be chairman of the Audit Committeee? whether Criminal Lawyer (Consultant of the listed Company) be as Chairman of the Audit Committee Meetings?
3.Whether Report on Corporate Governance should be filed compulsorily to SEBI or not? if yes then how much penalty on the same if not filed within time?
10 May 2010
Ans 1: If the chairman is non executive then atleast 1/3 of total no. of directors shall be independent directors.
If chairman is executive or non executive but relate to promoter category then atleast 1/2 of total no. of directors shall be independent directors.
Ans 2: The Chairman of the Audit Committee shall be an independent director.
All members of audit committee shall be financially literate and at least one member shall have accounting or related financial management expertise.
Criminal lawer can't be chairman as he is not the director of the company. consultant can't be appted as chairman of audit committee meeting.
Ans: 3 Listed co. need to file coporate governance report within 15 days after the closure of quarter to the stock exchange where the shares of co. is listed. However Annual Report of the co. should also contian a report on corporate governance.
And there is no need to file Corporate governance report to SEBI.
FOR BETTER UNDERSTANDING PLS GO THROUGH WITH CLAUSE 49 OF LISTING AGREEMENT.
Only some confusion in my 2nd question pls resolve:
If suppose the Criminal Lawyer is the independent Director and also member in the Audit Committee of Listed Company then can it be possible to him to hold the chair as a Chairman for Audit Committee or Accounts and financial knowledge should be there for everyAudit Committee Member?
11 May 2010
Dear Somnath, As per Clause 49 of Listing Agreement, All members of audit committee shall be financially literate and at least one member shall have accounting or related financial management expertise.
"financially literate” means the ability to read and understand basic financial statements i.e. balance sheet, profit and loss account, and statement of cash flows.
Hence every audit committee member should be financial literate.
CAclubindia
