Objective

The Audit Committee assists the Board in its responsibility for overseeing the quality and integrity of the accounting, auditing and reporting practices of the Company and its compliance with the legal and regulatory requirements. The Committee's purpose is to oversee the accounting and financial reporting process of the Company, the audits of the Company's financial statements, the appointment, independence, performance and remuneration of the statutory auditors including the Cost auditors, the performance of internal auditors and the Company's risk management.

Powers of the Committee

• To investigate any activity within its terms of reference.
• To seek information from any employee.
• To obtain outside legal or other professional advice.
• To secure attendance of outsiders with relevant expertise, if it considers necessary.

Terms of Reference

• Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
• Recommend appointment, remuneration and terms of appointment of auditors, including cost auditors, of the Company;
• Approval of payment to statutory auditors, including cost auditors, for any other services rendered by them;
• Review with the management, the annual financial statements and auditor's report thereon before submission to the Board for its approval, with particular reference to:
  • a) matters required to be included in the Directors’ responsibility statement to be included in the Board’s report in terms of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013;
  • b) changes, if any, in accounting policies and practices and reasons for the same;
  • c) major accounting entries involving estimates based on the exercise of judgement by management;
  • d) significant adjustments made in the financial statements arising out of audit findings;
  • e) compliance with listing and other legal requirements relating to financial statements;
  • f) disclosure of any related party transactions;
  • g) modified opinion(s) in the draft audit report.
• Review with the management, the quarterly financial statements before submission to the Board for approval;
• Review with the management, the statement of uses/application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilised for the purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;
• Review and monitor the auditor's independence and performance, and effectiveness of audit process;
• Approval or any subsequent modification of transactions with related parties of the Company;
• Scrutiny of inter-corporate loans and investments;
• Valuation of undertakings or assets of the Company, wherever it is necessary;
• Evaluation of internal financial controls and risk management systems;
  • a) Review with the management, performance of statutory and internal auditors.
  • b) Review with the management adequacy of the internal control systems.
• Review the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;
• Discuss with internal auditors of any significant findings and follow-up thereon;
• Review the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;
• Discuss with statutory auditors before the audit commences, about the nature and scope of audit as well as post audit discussion to ascertain any area of concern;
• Look into the reasons for substantial defaults, in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;
• Review the functioning of the Whistle Blower mechanism / oversee the vigil mechanism;
• Approval of appointment of Chief Financial Officer after assessing qualifications, experience and background, etc. of the candidate;
• Mandatorily review the following:
  • a) Management Discussion and Analysis of financial condition and results of operations;
  • b) Statement of significant related party transactions (as defined by the Audit Committee), submitted by management;
  • c) Management letters / letters of internal control weaknesses issued by the statutory auditors;
  • d) Internal audit reports relating to internal control weaknesses;
  • e) Appointment, removal and terms of remuneration of the chief internal auditor;
• Note report of compliance officer as per SEBI (Prohibition of Insider Trading) Regulations, 2015;
• Formulate the scope, functioning, periodicity of and methodology for conducting the internal audit;
• Review show cause, demand, prosecution notices and penalty notices, which are materially important;
• Review any material default in financial obligations to and by the Company, or substantial non-payment for goods sold by the Company;
• Review any issue, which involves possible public or product liability claims of substantial nature, including any judgement or order which, may have passed strictures on the conduct of the Company or taken an adverse view regarding another enterprise that may have negative implications on the Company;
• Details of any joint venture or collaboration agreement;
• Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material;
• Carry out any other function as is mandated by the Board from time to time and/or enforced by any statutory notification, amendment or modification as may be applicable.

Terms of Reference

• Formulate the criteria for determining qualifications, positive attributes and independence of a Director, and recommend to the Board a policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees;
• Formulate the criteria for evaluation of performance of Independent Directors and the Board of Directors;
• Devise a policy on Board diversity;
• Identify persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board their appointment and/or removal;
• Consider extension or continuation of the term of appointment of Independent Directors based on performance evaluation;
• Specify the manner for effective evaluation of performance of Board, Committees and Individual Directors;
• Review Human Resource policies and overall human resources of the Company;
• Recommend/review remuneration of the Managing Director(s) and Whole-time Director(s) based on performance and assessment criteria;
• Administer, monitor and formulate detailed terms and conditions of Employees’ Stock Option Schemes;
• Review recruitment and remuneration of senior officers just below Board level including appointment/removal of CFO and Company Secretary;
• Review significant labour problems and proposed solutions;
• Review significant developments in Human Resources / Industrial Relations;
• Recommend to the Board all remuneration payable to senior management;
• Carry out any other function as mandated by the Board or statutory modifications.

Terms of Reference

• Formulate and recommend to the Board a Corporate Social Responsibility (CSR) Policy indicating the activities to be undertaken by the Company;
• Recommend the amount of expenditure to be incurred on CSR activities;
• Monitor Company’s compliance with Corporate Governance Guidelines and applicable laws and regulations;
• Monitor CSR Policy of the Company from time to time;
• Monitor CSR activities undertaken by the Company;
• Ensure compliance with corporate governance norms prescribed under SEBI Regulations, Companies Act and other statutes;
• Advise the Board periodically regarding developments in corporate governance practices;
• Observe practices of Corporate Governance and suggest remedial measures wherever necessary;
• Review and assess adequacy of Corporate Governance Manual, Code of Conduct and internal governance policies;
• Formulate/approve governance related codes and policies;
• Provide correct inputs to media to preserve and protect the Company’s image and standing;
• Disseminate factually correct information to investors, institutions and the public;
• Establish oversight on important corporate communication;
• Ensure institution of standardised channels of internal communication across the Company;
• Carry out any other function as mandated by the Board or statutory modifications.

Terms of Reference

• Oversee and review all matters connected with transfer of Company’s securities;
• Approve issue of duplicate shares/debentures certificates;
• Oversee the performance of the Company’s Registrars and Transfer Agents;
• Monitor implementation and compliance with the Company’s Code of Conduct for Prohibition of Insider Trading;
• Consider, resolve and monitor various aspects of shareholders’, debenture holders’ and security holders’ grievances;
• Review measures taken for effective exercise of voting rights by shareholders;
• Review adherence to service standards adopted by the Company in respect of services rendered by the Registrar & Share Transfer Agent;
• Review measures and initiatives for reducing unclaimed dividends and ensuring timely receipt of dividend warrants, annual reports and statutory notices;
• Carry out any other function as mandated by the Board or statutory modifications.