Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Audit Commitee

Himani (NA) (54 Points)

18 March 2009

Dear All

Pl tell me whether Audit Committee is required in unlisted public Co. which meets minimum paid up capital requirement of Rs 5 crore. or is it required only in case of listed public Co.?

Reply
Follow
Share

4 Replies

HARDIK (COMPANY SECRETARY NCFM (Corporate Governance )) (664 Points)
Replied 18 March 2009

Section 292A clearly states that every public company having paid up capital of 5 Crores or more have audit committee whether it is a listed or not.

Upgrade to CAclubindia Pro. Subscribe Now!

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 18 March 2009

Formation of Audit Committee in a listed co. is governed by Listing agreements along with sec 292A of companies act, 1956. But remember provisions of listing agreements shall prevail over companies act in case of any contradiction.

Sec 292A is applicable to every public co. whether it is listed or unlisted.

Regards

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 18 March 2009

Dear Himani,

Under Section 292A of the Companies Act, 1956 every public company having paid up capital of not less than Rs. 5 Crore is required to constitute an Indipendent Audit Committee.

When the company is listed it is required to constitute an Audit Committee, the limit of 5 crore is done away by the Listing Agreement.

Thus in case of unlisted companies :- Audit committee is required when the paid up capital of the company is Rs. 5 crore or more.

In case of Listed companies:- Every company is required to constitute an indipendent audit committee.