Audit Committee-Quorum

[Mahaveer Bhansali]

 

 

Dear Sir/Madam

 

In furtherence to our telephonic talk I would like to get clarified the following:

 

1. Whether Audit Committee meeting can be held with Two Directors (including one independent Director ) attending the meeting in person and one independent Director joining the meeting through teleconferencing
2. Whether Audit Committee business may be disposed of through Circular resolution
3. In another Company their 4 Member of Audit Committee in which 3 Members are Independent. Out of 3 Independent Members 2 are currently out of India and would be coming after 2 Months. Now the Company wants to have Audit Committee Meeting for passing unaudit result for quarter ending June 2009 and accounts for the entire financial year. Can 2 Members( 1 Independent and 1 Non-Independent) constitute quorum of the said Meeting to pass the said business as per Listing Agreement.  

Kindly advise at the earlist.

 

Regards

 

M.C.Bhansali

Company Secretary

[chakri hegde]

Respected Sir,

 

Following are my views on your query:

 

1.Whether Audit Committee meeting can be held with Two Directors (including one independent Director ) attending the meeting in person and one independent Director joining the meeting through teleconferencing

 

 As per the Clause 49 II(b) of the Listed Agreement-

The quorum shall be either two members or one third of the members of the audit committee whichever is greater, but there should be a minimum of two independent members PRESENT. Here the LA does not say can they be present through Telecoferencing or Videoconferencing. So we can take advantage of this point.

 

Morover, Precence of Board Member through the Tele/Video conferencing is not permitted  for Bord Meeting as pe the current Co's Act, ( it has been recommended in the New Companies Bill, 2006, which is yet to come into effect.) However, Presence through Tele/Video conferencing for Committee meeting , it is permitted.

So with one person present in person and another through teleconferencing, both being Independent Directors, the meeting will be valid.

 

2.Whether Audit Committee business may be disposed of through Circular resolution

 

Audit committee meeting can not be disposed of through Circular Resolution ( other Members views are solicited on this issue)

 

3.In another Company their 4 Member of Audit Committee in which 3 Members are Independent. Out of 3 Independent Members 2 are currently out of India and would be coming after 2 Months. Now the Company wants to have Audit Committee Meeting for passing unaudit result for quarter ending June 2009 and accounts for the entire financial year. Can 2 Members( 1 Independent and 1 Non-Independent) constitute quorum of the said Meeting to pass the said business as per Listing Agreement

 

As I said above, As per the Clause 49 II(b) of the Listed Agreement-

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

But in this , out of members present, one is Independent and another is not. So meeting is not valid.

But again here you can take the advantage of holding the Audit Committe Meeting through Tele/Video Coferencing.

 

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With Best Wishes
Chakri G Hegde
Indo Nissin Foods Ltd
Bangalore

 

[SUNIL KUMAR B.G.]

I agree with the views of Mr. Chakri.

1. In the absence of clarity in the LA, regarding the audit committee members present in person in the meeting, meeting through teleconferencing is valid.

2. The LA clearly says the "The quorum shall be either two members or one third of the members of the audit committee whichever is greater, but there should be a minimum of two independent members present." so business through circular resolution is not valid.

3. there should be 2 independent directors.

Warm Regards,

Sunil Kumar B.G.

[Mohan B K bk]

Dear Chakri & Sunil

I agree we can take advantage of missing of certain words, but it acts as double edged weapon as they can as well take the contention  that no where  it is specifically stated that the same is allowed. if such a question is raised how do we justify.

 

regards

Mohan

[CS. Dattatri H M]

Dear Mohan,

 

I agree with you. While drafting the law, the presence through video was never imagined/articulated. In our context, present should be interpreted as physically present.

 

May be once new company bill gets green signal at all levels, we may start having video conferencing for Board and other committee meetings.

 

Best Regards,

Dattatri

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From: csmy...@googlegroups.com [mailto:csmy...@googlegroups.com] On Behalf Of Mohan B K bk
Sent: Tuesday, June 23, 2009 11:09 AM
To: csmy...@googlegroups.com
Subject: [CSMysore] Re: Audit Committee-Quorum