You are the Company Secretary of ABC Ltd., the turnover of your company as per last audited financial statement has crossed ₹ 100 crore. As per requirement of Section 177 (i) of the Companies Act, 2013 your company is re

The constitution of Audit Committee is mandated under the Companies Act, 2013, and the SEBI (Listing Obligations and Disclosure Requirements (LODR)) Regulations, 2015. Section 177(1) of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 provides that every listed company and all public companies with a paid up capital of ₹ 10 crores or more, or having turnover of ₹ 100 crores or more, or having in aggregate outstanding loans or borrowing debenture or deposits exceeding ₹ 50 crores or more shall constitute an Audit Committee. Section 177(2) of the Companies Act, 2013 provides that Audit Committee shall consist of a minimum of three directors and the majority of directors shall be independent directors. The Act further provides that majority of members of Audit Committee including its Chairperson shall be persons with ability to read and understand the financial statement. Regulation 18(1) of the SEBI (LODR) Regulations, 2015 also provides that Audit Committee shall consist of a Minimum three directors as members. Two-thirds (2/3rd) of the members shall be independent directors and all members of Audit Committee shall be financially literate and at least one member shall have accounting or related financial management expertise. The chairperson of the Audit Committee shall be an independent director and company secretary shall act as its secretary. Draft Resolution for the appointment of Audit Committee "RESOLVED THAT pursuant to the provisions of Section 177 of the Companies Act, 2013, Regulation 18(1) of the SEBI (LODR) Regulations, 2015 and Article No. ________ of the Articles of Association of the Company, the Board hereby constitute the Audit Committee consisting of the following directors of the company: S. No. Name Designation Position in the committee 1. Mr. X Director (Independent Director) Chairman 2. Mr. Y Director (Independent Director) Member 3. Ms. Z Managing Director Member RESOLVED FURTHER THAT the Audit Committee shall have the terms of reference in accordance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 18(1) of the SEBI (LODR) Regulations, 2015. RESOLVED FURTHER THAT the quorum of Audit Committee shall either be two members or one third of the members of the audit committee, whichever is greater, with at least two independent directors."