Committees and Mechanism to be formed under Companies Act, 2013

S.No.

Committee/Mechanism to be adopted

Applicability

Constitution

Section and Rules applicable

1.

Audit Committee

1. Public Companies having:

• Paid up share capital>= 10 cr.

• Turnover>= 100Cr.

• Aggregate outstanding loans /borrowings/debentures/deposits> =50cr

2. Listed Companies.

1. Minimum 3 directors (Independent directors with majority)

Section 177 read with Rule 6 of Companies (Meeting of board and its powers) Rules, 2014

 2

Vigil Mechanism/whistle blower policy

1. Listed companies.2. Companies which accept deposits from the public; and3. Companies which have borrowed money from banks and public financial institutions >Rs50 crore.

1. Companies which are required to constitute audit committee shall operate the vigil mechanism through the audit committee.2. Other Public Companies: BOD shall nominate a director to play the role of audit committee to whom other directors and employees can report their concerns.

Section 177 read with Rule 7 of Companies (Meeting of board and its powers) Rules, 2014

 3

Nomination and Remuneration Committee

1. Public Companies having:

• Paid up share capital>= 100 cr.

• Aggregate outstanding loans /borrowings/debentures/deposits> =200cr

2. Listed Companies.

NED>=3 (1/2 should be IDs)*Chairman of the Company may be appointed as the member but shall not chair such committee

Section 178 read with Rule 6 of Companies (Meeting of board and its powers) Rules, 2014

4

Stakeholders Relationship Committee

– Companies having a combined membership of the shareholders, debenture holders, deposit holders and other security holders > 1000 at any time during a financial year shall constitute

– NED Chairperson- Other members as may be appointed by the board

Section 178 read with Rule 6 of Companies (Meeting of board and its powers) Rules, 2014

5.

Internal Audit

1. Listed Companies2. Unlisted Public Company having:

• Share capital > =50 Crore

• Turnover>= 200Cr.

• Outstanding loans/borrowings/debentures/deposit >=100cr

• Outstanding Deposit>= 25Cr

3. Private Company having:

• Turnover>= 200 Cr.

• Outstanding loans/borrowings/debentures/deposit >=100cr

*Note every public and private company having Outstanding loans/ borrowings/debentures/deposit>=100cr need to appoint internal auditors

Chartered Accountants/Cost Accountants/Any other professional as may be appointed by the board

Section 138 read with rule 13 of The Companies (Accounts) Rules, 2014

6.

Secretarial Audit

1. Public Company having

• Paid up Share Capital>= 50 Cr

• Turnover>= 250cr

Company Secretary in Practice

Section 204 read with rule 9 of the Companies (appointment of Personnel) Rules, 2014