constitution of Audit Committee _Query
anjali bansal
shankar shankar
- Constitution of Audit Committee
The Chairman proposed that the Paid-up Capital of the Company being more than Rs.5,00,00,000/- (Rupees Five Crores) an Audit Committee be formed pursuant to Section 292A of the Companies Act, 1956. The Board after discussion:
“RESOLVED THAT pursuant to Section 292A of the Companies Act, 1956 the Board hereby constitute and appoint a Committee of the Board of Directors named as ‘AUDIT COMMITTEE’ comprising of the following Directors of the Company:
1. Mr. K. S
2. Mr. N. K. P
3. Mr. A. K
RESOLVED FURTHER THAT the Audit Committee shall act in accordance with the terms of reference specified in writing by the Board.”
Anjali--
************************************************
Mail your comments, feedback and suggestions on CSMysore to Moderator: datta...@gmail.com and Manager: vivekhe...@gmail.com
Find eNewsletters of ICSI Mysore at: www.icsi.edu/NewsEvents/enewsletters/tabid/1757/Default.aspx
--
CS K.Sankara Subramanian,
Cethar Energy Limited, Trichy.
anjali bansal
Thanks for your help. But i need a resolution which has the terms of reference as well. Pls help if you have such resolution.
shraddha shukla
with regards
Shraddha Shukla
Practicing Company Secretary.
Corporate Law consultant.
Astarag
Audit Committee
Terms of Reference of the Audit Committee
1 Composition:
1. , Chair
2. Mr. ....., Member
3. Ms. ........, Member
4. Mr. .........., Member
2 Quorum, Chairman, Minutes etc for a meeting of the committee:
1. The quorum shall be or one third of the total strength (any fraction contained in that one-third being rounded off as one) or two members whichever is greater.
2. The committee, in the absence of the permanent chairman has the power to appoint one of them to chair any of its meetings.
3. The annual report of the bank shall disclose the composition of the audit Committee.
4. The Company secretary or in his/her absence the compliance officer will act as the secretary to the committee
5. Head of Finance and Resources, Head of Internal Audit, Head of the RBS shall and the Statutory Auditors may attain the meeting but shall not have the voting right.
6. The committee shall meet at least once in a quarter.
7. Minutes of the Committee shall be placed before the Board for information.
3 Powers of the Committee:
The audit committee shall have powers, which should include the following:
1. To investigate any activity within its terms of reference.
2. To seek information from any employee.
3. To obtain outside legal or other professional advice.
4. To secure attendance of outsiders with relevant expertise, if it considers necessary.
5. The committee shall have full access to the information contained in the records of the bank, in respect of matters with in it’s purview
4. Role of the Committee:
The role of the audit committee shall include the following:
1. Oversight of the company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.
2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees.
3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
4. Reviewing, with the management, the annual financial statements before submission to the board for approval, with particular reference to:
a. Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956
b. Changes, if any, in accounting policies and practices and reasons for the same
c. Major accounting entries involving estimates based on the exercise of judgment by management.
d. Significant adjustments made in the financial statements arising out of audit findings.
e. Compliance with listing and other legal requirements relating to financial statements.
f. Disclosure of any related party transactions.
g. Qualifications in the draft audit report.
5. Reviewing, with the management, the half yearly financial statements before submission to the board for approval.
6. Reviewing the RBS report the Head of the RBS should be participate in the meeting.
7. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems.
8. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. Discussion with internal auditors any significant findings reviewing the reports received from them and follow up there on.
9. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board.
10. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.
11. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors.
12. Approval of appointment of any person heading the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate.
13. Review the Report of Annual Finance Inspection by RBI follow up the status of its compliance by the management.
14. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
15. The Committee shall not intervene in the day to day functioning of the management.
Explanation: The term "related party transactions" shall have the same meaning as contained in the Accounting Standard 18, Related Party Transactions, issued by The Institute of Chartered Accountants of India.
5. Review of information by the Committee:
The Audit Committee shall review the following information:
1. Results of operations
2. The Auditors should submit the Statutory Audit Report to the Audit Committee.
3. Statement of significant related party transactions, submitted by management;
4. Report on internal control weaknesses, if any, issued by the statutory auditors;
5. Internal audit reports relating to internal control weaknesses; and
6. The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to review by the Audit Committee.
7. NPA Provisioning for the preceding period;
8. Funds Management and Investments for the preceding period;
9. Report on Frauds and Embezzlements cases.
10. Inter Branch and Inter Bank Reconciliation Report.
11. Report on Balancing of Books for the preceding period.
12. Reports on Disposal of complaints by Branches during the preceding period
13. Report on Statutory Returns submitted to RBI and other Departments during the preceding period.
14. Report on SLR and CRR position for the preceding period
15. Position of suits filed as on August 31, 2010
16. Follow-up status of Compliance with AFI observations
17. Report on status of Compliance on observations in Long Form Audit report
Cs. P.A. Patnaik