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| PURPOSE |
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To ensure the preservation of good financial practices throughout the
Company |
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To monitor that internal controls are in force to ensure the integrity of the
financial information reported to the shareholders |
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To provide by way of regular meetings, a line of communication between the
Board and the external and internal auditors |
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| POWERS OF THE COMMITTEE |
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To investigate any activity within its terms of reference |
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To seek information from any employee |
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To obtain outside legal or other professional advice |
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To secure attendance of outsiders with relevant expertise, if it
considers it necessary |
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| TERMS OF REFERENCE |
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Oversight of company’s financial reporting process and disclosure of
its financial information to ensure that the financial statement is
correct, sufficient and credible |
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Reviewing with the management and auditors, the quarterly financial
statements and the annual financial statements with management and
auditors before submission to the Board, for using particularly on:- |
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- 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
- Any changes in accounting policies and practices a nd their
consistency both on a year basis and across the Group and the
appropriateness of those policies having regard to Indian GAAP;
- Major judgmental areas
- Significant adjustments resulting from the audit;
- Compliance with listing and other legal requirements relating to
financial statements
- Disclosure of any related party transactions
- Qualifications in the draft audit report
- Compliance with accounting standards; and
- Management Discussion & Analysis and Result of Operations
statement
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Reviewing with the management, performance of statutory and
internal auditors and adequacy of the internal control systems |
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Consider the appointment, re -appointment and if required, the
replacement or removal of the statutory auditor and the Head of Group
Internal Audit / the outsourced Internal Audit Firm (who has direct
access to the Chairman of the Committee), and any questions of their
resignation or dismissal, and to consider and recommend to the Board
the remuneration of the external auditors; |
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Review the relationship with the external auditors; including
consideration of audit fees as well as any other services and fees in
respect of non audit activities to ensure that a balance of objectivity
and value for money is obtained; |
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Discuss with external auditor before the audit commences the nature
and scope of audit; |
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Discuss with the external auditors problems and reservations rising
from their audits, and any other matters the external auditors may wish
to discuss |
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Review the external auditor’s management letters and management’s
response |
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Review the annual audit programme, ensure co -ordination between
the internal and external auditors and that the internal audit function
has sufficient freedom and resource to carry out its role; |
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Review any reports released by the internal auditors and consider the
major findings of internal investigations into any material failures of
internal controls, irregularities and frauds and to obtain management’s
responses and to convey the results to the board; |
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Review the Company’s statement on internal accounting and
financials control systems prior to endorsement by the Board; and in
particular to review: |
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- The procedures for identifying business risks (including financial
risks) and controlling their financial impact on the Company;
- The Company’s policies for preventing or detecting fraud;
- The Company’s policies for ensuring that it complies with relevant
regulatory and legal requirements;
- The operational effectives of the policies and procedures;
- The Company’s internal financial and non-financial reporting and
internal control framework (including Treasury)
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To look into reasons for substantial defaults in the payment to the
depositors, debenture holders, shareholders (incase of non payment
of declared dividends) and credit ors. |
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To review the functioning of the Whistle Blower Mechanism in case the
same is existing |
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When money is raised through an public / rights / preferential issue
etc., to ensure that the management discloses the uses / applications
of funds by major category (capital expenditure, sales and marketing,
working capital, etc.) on a quarterly basis |
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The Chairman of the Audit Committee shall be present at the Annual
General Meeting to answer shareholder queries on matters within the
Committee’s area of responsibility |
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| CEO / CFO CERTIFICATION |
| The Audit Committee shall review the disclosures, if any, made by CEO /
CFO on : |
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Significant changes in internal control over financial reporting during
the year |
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Significant changes in accounting policies during t he year and that the
same have been disclosed in the notes to the financial statements; and |
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To obtain outside legal or other professional advice |
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Instances of significant fraud of which they have become aware and
the involvement therein, if any, of the management or an employee
having significant role in the company’s internal control system |
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| SUBSIDIARY COMPANY |
| The Audit Committee of the listed holding company shall also review the
financial statements, in particular, the investments made by the unlisted
subsidiary company. |
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| AUTHORITY |
| The Committee is authorized by the Board to oversee any investigation of
activities within its terms of reference and act as a court of last resort. It is authorized to seek any information it requires from any employee and all
employees are directed to co-operate with any request made by the
Committee. The committee may obtain outside legal or other independent
professional advice and will secure the attendance of outsiders with relevant
experience and expertise if it considers this necessary. |
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| MEETINGS |
The Committee should meet, at least four times in a year and not more than
four months shall lapse between two meetings, including before the announcement of the Company’s preliminary and interim results and to
consider whether or not to recommend the reappointment of the external
auditors at the next Annual General Meeting.
The Committee will meet with the Board at least once a year to discuss such
matters as the annual report and the relationship with the external auditors.
Additional meetings may be called by the Chairman of the Committee, or may
be requested by the Chairman, the Managing Director or the Company’s
external auditors.
The quorum for any meeting of the Audit Committee shall be either two
members or one third of the members of the audit committee whichever is
greater, but there should be a minimum of two independent members
present.
In the absence of the Committee Chairman, the remaining members present
shall elect one of the members to chair the meeting bearing in mind legal and
regulatory requirements.
The committee shall periodically meet in private with the external and internal
auditors. |
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| COMPOSITION |
| The Committee members (including Alternate) and Chairman are appointed
by the Board from the non-executive Directors, in compliance with legal and
regulatory requirements. |
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| Chairman |
To be an Independent Director |
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| Members |
[Non-executive Director 1]
[Independent Director 2] |
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| All members shall be financially literate and at least one member, preferably
the Chairman, shall have expertise in accounting or financial management. |
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| In attendance |
Managing Director |
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Internal Auditor |
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External Auditor |
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Chief Financial Officer |
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| Secretary |
Company Secretary |
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| The Managing Director, the CFO, the Internal Auditor and External Auditor
may, at the invitation of the Chairman of the Committee, attend and speak at
meetings of the Committee; other may be called upon or shall be able to
speak by prior arrangements with the Chairman of the Committee. |
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| REPORTING PROCEDURES |
| The Secretary shall circulate the minutes of meetings of the Committee to all
members of the Committee, following their approval by the Chairman of the
Committee. Any Director may obtain copies of the Committee’s agenda and
minutes with the agreement of the Chairman of the Committee. |
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