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audit committee

harsh patel (Student CA IPC / IPCC) (35 Points)

05 April 2018

what is the rule 4 of the audit committee for applicability of audit committee

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3 Replies

CS Smreti (cs) (641 Points)
Replied 06 April 2018

applicability of Audit Committee is given in section 177 read with Rule 6 of Chapter 12.

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Rahul Prajapati (Student) (2282 Points)
Replied 06 April 2018

As per Sec 177 of Companies Act, 2013

Applicability of Audit Committee:

The Board of directors of every listed companies and the following classes of companies, as prescribed under Rule 6 of Companies (Meetings of Board and its powers) Rules,2014 shall constitute an Audit Committee.

(i) all public companies with a paid up capital of Rs.10 Crores or more;

(ii) all public companies having turnover of Rs.100 Crores or more;

(iii) all public companies, having in aggregate, outstanding loans or borrowings or debentures or deposits exceeding Rs.50 Crores or more. T

The paid up share capital or turnover or outstanding loans, or borrowings or debentures or deposits, as the case may be, as existing on the date of last audited Financial Statements shall be taken into account for the purposes of this rule.

Composition:

The Audit Committee shall consist of a minimum of 3 directors with independent directors forming a majority.

The majority of members of Audit Committee including its Chairperson shall be persons with ability to read and understand, the financial statement.

The Board’s report under section 134(3) shall disclose the composition of an Audit committee and where the Board had not accepted any recommendation of the Audit Committee, the same shall be disclosed in such report along with the reasons there for.