Can MD be a member of audit committee?

A whole Time Director can be appointed as a member of Audit Commitee,as long as you comply with  sec 292A / clause 49 of the listing agreement as the case may be .

As per section 292A of Companies Act , every public Company having a paid up capital of not less than  Rs. 5 Crore shall constitute Audit Committee consisting ofatleast 3 members of which two- third shall be the directors other than managing or whole time director.

In the case of listed Company, clause 49 states that:

1. The audit committee shall have minimum three directors as members.Two-thirds of the members of audit    committee shall be independent directors.

2. All members of audit committee shall be financially literate and at least one member shall have accounting or related financial management expertise.

For details, you can refer the listing agreement. 

Yes, a whole time director can be a member of audit committee if your company having more than two third director other than Managing Director or Whole time director i.e. two director should be independent/non-executive.

All the best.

agreed with rajesh                                                 

Useful Information Rajesh

Thanks for sharing

Provision given in Law:

Section 292A (1): Every public company having paid-up capital of not less than five crores of rupees shall constitute a committee of the Board knows as "Audit Committee" which shall consist of not less than three directors and such number of other directors as the Board may determine of which two thirds of the total number of members shall be directors, other than managing or whole-time directors.

My Analysis:

Minimum members for an Audit committee are 3. Out of these 3 members 2/3 members i.e. 2 members should be simple directors and 1 director can be a MD or WTD.

Hence we may conclude that there is no restriction in section 292A regarding MD being member of Audit committee.

RG  

Can any one  please Explain ......Suppose if the simple Director has been appointed as the member of Audit Committee after such appointment he turned as Whole Time Director (WTD) is this appointment is valid or not ?

AGREE WITH RAJESH..................

Dear kalyan,

Yes his appointment is valid. But you have to check the composition of Audit Committee keeping in view the provisions of section 292A(1).

RG

agree with arun kumar

AUDIT COMMITTEE CHARTER(of Mindspeed org.)

The Committee shall consist of no fewer than three members.  Each member of the 

Committee shall meet, as determined by the Board, the independence and other requirements, 

including restrictions on compensation and affiliation prohibitions, of The Nasdaq Stock Market

No Committee member shall have participated in the preparation of the financial 

statements of the Company or any current subsidiary of the Company at any time during the 

prior three years.

But a MD or a WTD will surely participate in the preperation of financial statements

and it may affect the independence requirements of the members of the audit committee.....

Can a manging director be a member of any committee of any other company ???

No.

Committee is the sub committee  of the BOard of Directors of the Company only.