Arham Logistics Limited, a listed company, has duly constituted an Audit Committee. One of the matters considered by the Audit Committee, was quarterly internal audit report. Board was informed by Chairman of the Audit C

As per the provisions of Section 149 (12) the Companies Act, 2013 – Notwithstanding anything contained in this Act, – (i) an independent director & (ii) a Non-Executive Director not being promoter or Key Managerial Personnel, shall be held liable, only in respect of such acts of omission or commission by a company which had occurred with his knowledge, attributable through Board processes, and with his consent or connivance or where he had not acted diligently. Accordingly, while the non executive and independent directors may be able to take shelter under the above provisions, where the audit report is not placed before the Board, the executive and promoters directors cannot do so. Directors other than members and Chairman of audit committee will be right in taking a stand by relying on the briefing by Chairman of Audit Committee that there was no adverse thing reported in the internal audit report. Directors may rightfully assert that if in future, anything turns out to be different or adverse, only audit committee and its members including its Chairman will be held responsibly and not the other Directors.