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Constitution of Audit Committee as per Companies Act, 2013 & Companies Act, 1956

Particulars Companies Act, 2013 Companies Act, 1956
Audit Committee
  Section 177 Section 292A
Applicability Every listed companies and
  1. all public companies with a paid up capital of Rs. 10 Crores or more;
  2. all public companies having turnover of Rs. 100 Crores or more;
  3. all public companies, having in aggregate, outstanding loans or borrowings or debentures or deposits exceeding Rs. 50 Crores or more,
shall have to constitute Audit Committee.
Every Public Company having paid up capital of not less than Rs. 5 Crores shall have to constitute Audit Committee.
Composition
  • Minimum of 3 directors.
  • Independent Directors forming a majority.
  • Majority of members including chairperson shall be persons with ability to read and understand the financial statements.
The Audit Committee shall consist of not less than 3 directors and such number of other directors as the Board may determine of which 2/3rd of the total number of members shall be directors, other than Managing or Whole-time Director.
Right to attend Meeting of Audit Committee The auditors of a company and the KMP shall have a right to be heard in the meetings of the Audit Committee when it considers the auditor’s report but shall not have the right to vote. The auditors and the director-in-charge of finance shall attend and participate at the meeting of the Audit Committee but shall not have right to vote.
Penalty The company shall be punishable with fine of Rs. 1 Lakh to Rs. 5 Lakhs and every officer of the company who is in default shall be punishable with imprisonment up to 1 year or with fine of Rs. 25,000/- to Rs. 1 Lakh, or with both. The company, and every officer who is in default, shall be punishable with imprisonment up to 1 year, or with fine of Rs. 50,000/-, or  with both.

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  • By Revanth Gopidi  0 Comments   

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