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An Audit Committee was formed on 9th March, 2000 in accordance with the provisions of the Listing Agreement and the Companies Act, 1956. The Committee consists of three non-executive, independent, professional Directors with expertise in Finance, Accounts, treasury and Company Law.
The Audit Committee possesses adequate powers and terms of reference to play an effective role as mentioned in Clause 49 of the Listing Agreement.
Role and powers of Audit Committee
The terms of reference of the Audit Committee comprise:
· Review with the management, statutory and internal auditor, the adequacy of internal control systems and audit procedures.
· Overview of the Company’s financial reporting process and disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.
· Recommend the appointment and removal of the statutory auditor, fixation of the audit fee and also approval for payment of any other services.
· Review with the management, the annual financial statements before submission to the Board.
· Review the adequacy of the internal audit function, including the structure of the internal audit department, reporting structure coverage and frequency of internal audit.
· Discussion with the internal auditors any significant findings and follow-up thereon.
· Review the findings of any internal investigations by the Internal Auditors into matters where there is a suspected irregularity or failure of internal control systems of a material nature and report the matter to the Board.
· Discussion with statutory auditors before the audit commences regarding the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.
· Review the Company’s financial and risk management policies.
· To look into the reasons for substantial defaults if any, in the payment to debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.
· Review performance of internal and statutory auditors of the Company.
· Review of Auditors’ Reports and actions taken by the management with respect to observations and qualifications of the auditors.
· To investigate any activity within its terms of reference.
· To seek information from any employee.
· To obtain external legal or other professional advice.
· To secure attendance of outsiders with relevant expertise, if it considers necessary.
The Audit Committee mandatorily reviewed the following:
· Management discussion and analysis of the financial condition and results of operation.
· Statement of significant annual related-party transactions.
· Management letters/letters of internal control weakness issued by the statutory auditors.
· Internal audit reports relating to internal control weakness.
· The appointment, removal and terms of remuneration of the Chief Internal Auditor.
Meetings are scheduled well in advance. The Audit Committee consider and recommend the financial results for approval by the Board. The statutory auditors are invited to attend the meeting. The head of the internal audit function attends the Audit Committee meetings; the Committee also invites senior executives to be present.
The composition of the present Audit Committee is as follows:
Shri Nitin K. Jage, General Manager (Taxation) & Company Secretary of the Company acts as Secretary to the Committee.
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