Sample Board Resolution for Constitution of Audit Committee

Sample Board Resolution for Constitution of Audit Committee

The Securities and Exchange Board of India (SEBI) has mandated that every listed company must have an Audit Committee in place as per Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Section 177 of the Companies Act, 2013 also speaks the constitution of an Audit Committee for every listed company, every public company having a paid-up share capital of Rs. 10 crores or more or having a turnover of Rs. 100 crores or more, and every public company having in aggregate, outstanding loans or borrowings or debentures or deposits exceeding Rs. 50 crores or more.

Section 177 of the Companies Act, 2013 also specifies that the Audit Committee shall consist of a minimum of three directors, with the majority of them being independent directors. The Chairperson of the Audit Committee shall be an independent director.

Sample Board Resolution for Constitution of Audit Committee

Here is a Board Resolution that should be modified according to your needs and passed on the letterhead of the company, duly sealed and signed by directors.

CERTIFIED TRUE COPY OF THE RESOLUTION PASSED BY THE BOARD OF DIRECTORS OF ——————HELD
ON ————- AT THE REGISTERED OFFICE OF THE COMPANY AT ——– A. M. /P.M

RESOLVED THAT pursuant to Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Audit Committee of the Company be and is hereby constituted consisting of the following members:

1. Mr. X, an Independent Director of the Company
2. Mr. Y, an Independent Director of the Company
3. Mr. Z, an Independent Director of the Company
RESOLVED FURTHER THAT Mr. A shall be the Chairman of the Audit Committee.

RESOLVED FURTHER THAT the Audit Committee shall have the powers and perform the functions as specified in Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

RESOLVED FURTHER THAT any two members of the Audit Committee shall form a quorum for the meeting of the Committee.

RESOLVED FURTHER THAT the terms of reference of the Audit Committee and the remuneration payable to the members of the Audit Committee, if any, shall be as determined by the Board of Directors from time to time.

Please note that this resolution is just a sample and you will need to modify it to suit your needs. Please seek professional advice from a certified chartered accountant if you are not sure about anything.