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Members of Audit Committee

Rakhee (Company Secretary) (62 Points)

20 May 2009

Director (finance) being a whole-time director can attend Audit Committee meetings but does not have a right to vote. Now being a whole-time director, can he be included as a member of the committee? If not why? Is there any precedent regarding this topic?

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3 Replies

CS Ekta (Company Secretary) (309 Points)
Replied 21 May 2009

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 of atleast 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:

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

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.

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Ajay Mishra (Company Secretary) (74337 Points)
Replied 22 May 2009

Hi Rakhee

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.

Regards

Ajay

Rakhee (Company Secretary) (62 Points)
Replied 25 May 2009

Originally posted by :Rakhee
"	Director (finance) being a whole-time director can attend Audit Committee meetings but does not have a right to vote. Now being a whole-time director, can he be included as a member of the committee? If not why? Is there any precedent regarding this topic?	"

It would be better if the answer is specific regarding Director (Finance)