Acts Online
GT Shield

Companies Act, 1973 (Act No. 61 of 1973)

Chapter X: Auditors

Appointment

269A. Audit committees for public interest companies

 

 

1) In every financial year in which a company is a widely held company, its board of directors shall appoint an audit committee for the following financial year.

 

2) Subsection (1) shall not apply to a company-
a) if the audit committee of a holding company will perform the functions required under section 270A(1) on behalf of that company;
b) if the company ceases to be a widely held company in the manner contemplated in section 1(7);
c) if the company belongs to a category of companies specified by the Minister under section 269B.

 

3) An audit committee must have at least two members and consist only of non-executive directors of the company who must act independently.

 

4) For the purposes of this Chapter-
a) "financial year" shall be construed in accordance with section 285;
b) a director is a non-executive director of a company if the director-
i) is not involved in the day to day management of the business and has not in the past three financial years been a full-time salaried employee of the company or its group;
ii) is not a member of the immediate family of an individual mentioned in subparagraph (i);
c) a director acts independently if that director-
i) expresses opinions, exercises judgment and makes decisions impartially;
ii) is not related to the company or to any shareholder, supplier, customer or other director of the company in a way that would lead a reasonable and informed third party to conclude that the integrity, impartiality or objectivity of that director is compromised by that relationship.