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Quorum for Audit Committee

Muralidharan (Self Employed) (1034 Points)

22 June 2009

A Closedly held Public Limited Company has Six Directors out of which one is MD. The company in compliance with Section 292A has constituted a Audit Committee consisting of three directors (MD is not a member of this committee). The audited accounts for year ended 31.3.2009 are ready and needs to be approved by both the "Audit Committee" as well as by the "Board of Directors". One of the Director (member of the audit commitee) is out of country. Only two members of the committee are available in India and will be present to approve the accounts.

Members are requested to advice"

Will this form the sufficient quorum for the audit committee meeting.

Whether all the three members of the committee has to be present for quorum and approve the accounts

with regards

Muralidharan

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8 Replies

Mayank Mehta (Student) (383 Points)
Replied 22 June 2009

no it wont make aquorum

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

Composition of the Audit Committee

As per clause 49 of the Listing Agreement, the audit committee shall have minimum three directors as members. Two third of the members of audit committee shall be independent directors. All the members of the audit committee shall be financially literate and at least one member shall have accounting or related financially management expertise. By implication, audit committee can to the extent of one-third of the strength comprise of non-independent directors including executive directors.

As per section 292A of the Companies Act, 1956, not less than three directors or such higher number of the directors as the Board may determine of which two third of the total number of directors shall be a directors other than MD or WTD.

Quorum for Audit Committee Meeting

The quorum for audit committee shall be either two members or one third of the members, whichever, is greater, but there should be a minimum of two independent members present.

Section 292A of the Act is silent with regard to the quorum for the audit committee meeting. Though not specifically provided, in such circumstances section 287 may be applicable.

Best Regard

1 Like

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 22 June 2009

Hello Murali Ji,

You don't have to worry at all if your company is a Unlisted Public Company. As in your Audit Committe Meeting Quorum is present and you can go ahead with your Agenda.

Even if your company is a Listed Public company Quorum is very much present but make sure 2 members should be independent directors as desired by Listing Agreement. No Need to invoke Section 287.

Best Regards

zahid chaudhry (Assistant Manager Internal Audit) (21 Points)
Replied 03 February 2012

i am Assistant Manager Internal Audit of the non-listed public limited company and my querris are

1. if the two member of the Audit Committee (other than Chairman) is not present in the Audit Committee Meeting and they give their proxies to other person than;

A. is the quorum completed? and

B. the Characteristics of proxy holder is also defined?

regards,

Muhammad Zahid Chaudhry

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 03 February 2012

Originally posted by : zahid chaudhry
	hi i am Assistant Manager Internal Audit of the non-listed public limited company and my querris are 1. if the two member of the Audit Committee (other than Chairman) is not present in the Audit Committee Meeting and they give their proxies to other person than; A. is the quorum completed? and B. the Characteristics of proxy holder is also defined? regards, Muhammad Zahid Chaudhry

Hello,

Committee meetings are somewhere the extension/system of delegation of work of board meetings. So the basic characteristics of Committee meetings are same as in the board meetings.

Proxies are not allowed in board meeting. So as per my interpretation proxies are also not allowed in the Committee meetings. Position of board committee membership is a position of responsibility and cannot be delegated further.

This is my understanding. You may wait for other opinions.

Regards

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(Guest)

Agree with Ankur jee.

Members of committee of board can not appoint proxy to represent them in committee meetings. Proxy are allowed only in general meetings by the Companies Act.

Bharat Patel ( COMPANY SECRETARY) (32 Points)
Replied 04 February 2012

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

The Board of directors of the company shall have an optimum combination of executive and non-executive directors with not less than fifty percent of the board of directors comprising of non-executive directors.

Where the Chairman of the Board is a non-executive director, at least one-third of the Board should comprise of independent directors and in case he is an executive director, at least half of the Board should comprise of independent directors.

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

The Chairman of the Audit Committee shall be an independent director.

The Company Secretary shall act as the secretary to the committee.