In this post, we have combined some common draft Minutes required in a Company to execute the decisions taken in Committee Meetings of the Company. The only evidence of compliance with sections 177 and 178 is Certified Copies to Minutes of the Meetings.

Before moving ahead, you are requested to make necessary changes required as per the Companies Act, 2013 or any other law.

Audit Committee

Section 177 of the Companies Act, 2013 talks about the Audit Committee, The purpose of this Committee is to monitor the Finance, accounts, and Monetary events of the company which is headed by Members from the field of Accounts, Finance & Taxation. It also keeps an eye on the related party transaction that takes place in the company.

Moving further for some draft copies of Minutes of the Audit Committee Meetings of the Company.

Sample Draft Minutes of Audit Committee Meetings

S/No. of Audit Committee Meeting: 1/ 2021-2022

MINUTES OF THE MEETING OF AUDIT COMMITTEE OF M/s ABC INDUSTRIES LIMITED HELD ON MAY 28, 2022  THE THURSDAY AT 11.30 A.M. AT THE REGISTERED OFFICE OF THE COMPANY.

PRESENT:

  1. ZZZZZZZZ                                                                                                                         Chairman
  2. YYYYYYYY                                                                                                                        Member
  3. AAAAAAAA                                                                                             Member

All the members were physically present at the Nomination & Remuneration Committee Meeting of the Board of Directors of the company.

IN ATTENDANCE:

Singhii                                                                                                        Head of Corporate Affairs

Adhitii                                                                                                         Company Secretary

At 11.30 A.M. the Chairman commenced the meeting by welcoming the members to the Audit Committee Meeting. The Chairman announced that the requisite quorum being present, the meeting was called to order.

1. Leave of Absence

All the committee members were present; no leave of absence was required.

2. To consider and approve the minutes of the previous Audit Committee meeting.

The minutes of the previous Audit Committee meeting was considered, confirmed, and signed by the Chairman of the meeting.

3. To Review Internal Control And Internal Audit System

The committee was briefed about the internal control and internal audit system presently being prevailed in the company. The Internal Audit Report of the Internal Auditors was placed before the Board for discussion. The Board discussed the same.

4. To Review the Accounting Policy of the Company

The committee was briefed about the accounting policy presently being followed in financial statements by the company. The Board reviewed and discussed the same.

5. Recommendation of Appointment of M/s BB & Co., Chartered Accountants, as Internal  Auditors in the Board Meeting of the company

The chairman of the committee of directors pursuant to the provisions of Section 138 of Companies Act, 2013 decided to recommend to the Board for the appointment of M/S BB & Co., Chartered Accountants, Chennai as an Internal Auditors of the company to conduct an internal audit of the functions and activities of the company for the Financial Year 2022-20.

6. Recommendation of Appointment of M/s ZZ & Co., Chartered Accountants, as Statutory  Auditors in the Board Meeting of the company

The eligibility certificate was received from the Statutory Auditors M/S. ZZ & Co., Chartered Accountants, Chennai, intimating the Company that their appointment, if made at the ensuing Annual General Meeting, would be in accordance with the limits prescribed under Section 139(1) & Section 141 of Companies Act, 2013, was placed before the Committee.

The Committee after taking into consideration the experience and previous work done by the statutory auditors, decided to recommend to the Board the re-appointment of M/S. ZZ & Co., Chartered Accountants, Jaipur, as Auditors of the Company in the ensuing Annual General Meeting of the company to hold office from the conclusion of Eleventh Annual General Meeting to the conclusion of 16th Annual General Meeting of the company.  

Audit Committee Minutes

7. Review of annual financial statements for the year ended March 31, 2022

The annual financial statements for the year ended 31st March, 2022 were placed before the committee. After discussing in detail with statutory auditors of the company, the committee approved the same for submission to the Board of Directors of the company for their approval and thereafter passed the following resolution:

RESOLVED THAT annual financial statements of the company comprising Balance Sheet as at 31st March, 2022: Profit And Loss Account for the year ended 31st March, 2022 together with the notes forming part thereof and Cash Flow Statement for the year ended 31st March,2022  placed before the meeting, be and are hereby approved and that the same be recommended to the Board of Directors for their approval. “

RESOLVED FURTHER THAT following item charged or appropriated in the accounts are hereby approved and the same is recommended to the Board of Directors for their approval:-

           1. Depreciation                                                                Rs. 270,11,202

            2. Transfer to Capital Redemption Reserve               Rs. 200,00,000    

            3. Provision for Current Tax                                                   –

            4. Donation                                                                       Rs. 1,55,000

            5. Addition in Fixed Assets                                           Rs. 235,44,150

            6. Remuneration to Auditors                                        Rs. 100,000

8. To ratify the related party transactions entered into in the financial year 2021-2022

It was informed to the committee that pursuant to the applicable provisions of the Companies Act, 2013, all the related party transactions entered during the financial year 2021-22 are to be ratified if prior approval for the same has not been taken. The statement containing details of related party transactions entered during the year 2021-2022 was placed before the board. After discussion, the following resolution was passed unanimously by the Audit Committee:-   

“RESOLVED THAT pursuant to the applicable provisions of Companies Act, 2013, consent of the Audit Committee of Board of Directors of the company be and is hereby accorded to all the transactions entered into by the company with the related party during the financial year ended March 31, 2016 and the same be recommended to the Board of Directors of the company for their approval. (Statement stating details of related party transactions are annexed herewith). “

9. Presentation of Annual Budget for Financial Year 2021-2022

The chairman informed the committee that Chief Financial Officer has presented the Annual Budget for F.Y. 2021-2022 in the meeting and the same has to be presented to Board for review. After some discussion, the following resolution was passed unanimously:-

“RESOLVED THAT the annual Budget of the company for the year 2021-2022 as submitted by the Chief Financial Officer be and is hereby reviewed by the committee and to be presented to Board in the next Board meeting for approval of the same.

10. To review the Unaudited financial results for the quarter ended June 30, 2022

The un-audited financial results for the quarter ended June 30, 2017 were placed before the committee. After discussing with statutory auditors, the committee approved the same for submission to the Board of Directors of the company for their approval and thereafter passed the following resolution:

 “RESOLVED THAT pursuant to the Regulation 33 of the SEBI(Listing Regulations), 2015, the un-audited financial results for the quarter ended June 30, 2022  be and are hereby approved and the same be recommended to Board of Directors of the company for their approval.”

Vote of Thanks

There being no other business to transact, the meeting concluded with a vote of thanks to the chair.

Date of Entry                                                                                                                       CHAIRMAN

Date of Signing

Nomination and Remuneration Committee

Section 178 of the Companies Act, 2013 talks about the Nomination and Remuneration Committee, The purpose of this Committee is to monitor the Remuneration, Sitting Fee, Stipend, Perks or Bonus paid to top-level management of the Company. It also recommends and nominates the candidates for Top Level Management of the Company.

Based upon the recommendation of the Nomination and Remuneration Committee the Board of directors takes their decision to Appoint the senior personnel and variation in remuneration paid to the same.

Moving further for some draft copies of Minutes of the NMR Committee Meetings of the Company.

S/No. of NMR Committee Meeting: 1/ 2021-2022

MINUTES OF THE MEETING OF NOMINATION & REMUNERATION COMMITTEE OF M/s ABC INDUSTRIES LIMITED HELD ON MAY 18, 2022 THE THURSDAY AT 11.30 A.M. AT THE REGISTERED OFFICE OF THE COMPANY.

PRESENT:

  1. ZZZZZZZZ                                                                                                                         Chairman
  2. YYYYYYYY                                                                                                                        Member
  3. AAAAAAAA                                                                                             Member

All the members were physically present at the Nomination & Remuneration Committee Meeting of the Board of Directors of the company.

IN ATTENDANCE:

Singhii                                                                                                        Head of Corporate Affairs

Adhitii                                                                                                         Senior HR

At 11.30 A.M. the Chairman commenced the meeting by welcoming the members to the Nomination & Remuneration Committee Meeting. The Chairman announced that the requisite quorum being present, the meeting was called to order.

1. Leave of Absence

All the committee members were present; no leave of absence was required.

2. To consider and approve the minutes of the previous Nomination & Remuneration Committee meeting.

The Chairman informed the committee members that the draft minutes of the previous meeting of the Nomination and Remuneration Committee held on 16th March 2022 were circulated to the members of the Committee and none of the committee members had given any suggestion or comment on the draft minutes and the minutes were then entered into minute’s book on 30th March 2022.

The Chairman placed the signed minutes of the previous meeting of the Nomination and Remuneration Committee held on 16th March 2022 before the Committee which was signed in the meeting of the Board of Directors held on 28th April 2022 and taken on record.

3. Consider and approve the Resignation of Mr. Manoj Kumar, an Independent Director of the Company.

The Chairman informed that the Board has given a reference to the committee for consideration of the matter of resignation of Mr. Manoj Kumar from the post of Independent Director of the Company.

4. Recommendation of Appointment of Mr. Joshi as Additional Director (Non-Executive, Independent) of the company upto the date of Ensuring Annual General Meeting of the Company.

The Chairman informed that the Board has given a reference to the committee for consideration and recommendation on the appointment of Mr. Joshi as an additional director of the Company. Hence, in view of his qualification, past performance, vast knowledge, and experience, the committee is of the opinion that for the smooth and efficient running of the business, the services of Mr. Joshi should be available to the company.

In terms of the provisions of the Companies Act, 2013 and Articles of Association of the Company, it is proposed to approve the appointment of Mr. Joshi as an Additional Director (Non-Executive Independent) up to the date of the ensuing Annual General Meeting subject to the approval of shareholders and the term of office shall be decided by the shareholders at the ensuing Annual General Meeting of the Company. Accordingly the same was recommended to the Board for their approval.

5.  To Consider and recommend the appointment of Mr. XYZ as a Chief Financial Officer (CFO) of the Company.

The Chairman informed the members that Mr. XYZ was appointed as Chief Financial Officer (KMP) of the Company w.e.f. 20th December 2021. He further informed the committee members that Mr. Pradeep Gangwal has resigned from the post of Chief Financial Officer (KMP) of the Company vide his resignation letter dated 19th October, 2021. The resignation letter as received from Mr. Pradeep Gangwal was placed before the Committee.

The Committee took note of the Resignation of Mr. XYZ from the post of Chief Financial Officer (KMP) of the Company due to his personal reasons w.e.f. 31st October 2021. The Committee discussed the matter and passed the following resolution in this regard:

“RESOLVED THAT pursuant to applicable provisions of the Companies Act, 2013 and the rules made there under (including any statutory modification(s) or amendment(s) thereto or re-enactment(s) thereof for the time being in force) and relevant provisions of the Articles of Association of the Company, subject to the approval of Board of Directors, the committee be and hereby accepts the resignation tendered by Mr. XYZ from the post of Chief Financial Officer (KMP) of the Company with effect from 31st October, 2021 and records the appreciation for the services rendered by him during his tenure as Chief Financial Officer (KMP) of the Company. 

 RESOLVED FURTHER THAT the Chairman of the Committee be and is hereby authorized to place the copy of the said resignation letter before the Board, for their consideration and record.

6. Recommendation of re-appointment of Mr. ABC as Managing Director of the Company

It was informed to the members of the committee that Mr. ABC was appointed as Managing Director of the company for the period of 5 years. Now the tenure of Mr. Avinash is expiring on September 25, 2021. Hence, in view of his qualification, past performance in the company, vast knowledge and experience, the committee is of the opinion that for smooth and efficient running of the business, the services of Mr. ABC should be available to the company.

In terms of the provisions of the Companies Act, 2013 and Articles of Association of the Company, it is proposed to approve the re-appointment of Mr. ABC as Managing Director for the further period of 3 years i.e. w.e.f. September 26, 20121 subject to the approval of shareholders at the ensuing Annual General Meeting of the company. Accordingly, the same was recommended to the Board for their approval.

7. Recommendation of Nomination and Remuneration Policy

In accordance with the provisions of Section 178 of Companies Act, 2013 read with applicable rules thereto, the Nomination and Remuneration Committee of the company has formulated the criterion for determining qualifications, positive attributes, and independence of Directors and laid down policy relating to remuneration for directors, key managerial personnel and other employees.

Thereafter, the committee discussed the policy:-

The said Policy of the company is designed to attract, retain and motivate the Senior Management Personnel including its key managerial personnel (“KMP”), Board, and employees of the company. The policy ensures that –

 (a) The level and composition of remuneration are reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;

 (b) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(c) Remuneration to directors, KMPs, and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

Thereafter, the committee decided to recommend the aforementioned policy to the Board of Directors of the company for their approval and adoption.  

8. Recommendation of revision in remuneration of Mr. ABC, Managing Director to the
Board of Directors of the company

It was informed to the members of the Committee that after considering his previous experience in the company and in terms of the provisions of the Companies Act, 2013, it is proposed to revise the remuneration (basic salary) of Mr. ABC, Managing Director of the company from Rs. 1,50,000/- to Rs. 2,50,000/- per month for the remaining period of his tenure w.e.f. October 1, 2022, to October 14, 2022, subject to the approval of the Board of Directors and shareholders of the company.

Accordingly, the same was recommended to the Board of Directors of the company for their approval.

9. To evaluate every director’s performance and their contribution to growth.

The Chairman brief that in compliance with the provisions of Section 178 (2) of the Companies Act, 2013 performance of the Individual Directors and Independent Directors is required to be reviewed annually.

The Chairman along with the other members of the Committee carried out the evaluation of every Director’s performance on the basis of pre-determined parameters, as per the procedure and criteria as stated in the Nomination and Remuneration Policy of the company and eligibility criteria.

The performance of the Managing Director was evaluated on certain parameters, such as Performance of the Company leadership, relationships and communications, recognition and awards to the Company and appropriate benchmarks set as per industry standards and his individual performance.           

Independent Director:

The evaluation of independent directors was done by the entire board of directors; the director who was being evaluated did not participate in the same.

Some of the performance indicators based on which Independent Directors were evaluated include:

  • The devotion of sufficient time and attention towards professional obligations for independent decisions and acting in the best interest of the Company.
  • Provides strategic guidance to the Company and determines important policies with a view to ensuring long-term viability and strength.
  • Bringing external expertise and independent judgment that contributes to the objectivity of the Board’s deliberation, particularly on issues of strategy, performance, and conflict management.

The Committee was informed that Company had provided suitable training to the Independent Directors and a familiarization program was conducted so as to familiarize them with the company, their roles, rights, and responsibilities in the company.

The evaluation forms were provided to Independent Directors and after completing the same were submitted to the Company Secretary for the record.

Non- Independent Director:

 The evaluation of the Non- Independent Director was done of the basis of the following criteria:

  • Knowledge to perform the role;
  • Time and level of participation;
  • Performance of duties and level of oversight; and
  • Professional conduct and independence.

The Committee was informed that Company had provided suitable training to the    Non-Independent Directors. The evaluation forms were provided to Non- Independent Directors and after completing the same were submitted to the Company Secretary for the record.

After considering the above factors it was concluded that there is an opportune discharge of key functions and other responsibilities prescribed under the various laws by the Board of Directors contributing to clearly defining the corporate objectives and plans of the Company, and the performance of the Board as a whole is satisfactory.

10. To review & recommend the re-appointment of the Director liable to retire by rotation.

The Chairman informed the Members that pursuant to Section 152(6) of the Companies Act, 2013, not less than 2/3 of the total number of Directors (unless otherwise provided) shall be liable to retire by rotation at every Annual General Meeting and pursuant to Section 152(6) (c) of the Companies Act, 2013, 1/3 of the such number of directors who are liable to retire by rotation shall retire from office. He further added that the Directors liable to retire by rotation shall be those who have been longest in office since their last appointment of Mr. PQR (DIN: 00000000), Director is retiring by rotation at the ensuing Annual General Meeting and whose period has been longest in the office since his last appointment, being eligible seeks re-appointment and has given his consent to act as Director of the Company which was placed before the meeting.

The members discussed the matter and the following resolution was passed in this regard:

“RESOLVED THAT pursuant to the provisions of Section 152 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 8 of the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or amendment(s) thereto or re-enactment(s) thereof for the time being in force) and in terms of Articles of Association of the Company and subject to the approval of Board of Directors and the shareholders of the Company at the ensuing Annual general meeting, the consent of the Nomination and Remuneration Committee be and is hereby accorded for the re-appointment of Mr. PQR  (DIN: 00000000),  as Director of the Company who retires by rotation at the ensuing Annual General Meeting, and being eligible offers himself for re-appointment.

RESOLVED FURTHER THAT Chairman of the Committee be and is hereby authorized to place the copy of the said resolution as a recommendation from the Committee, before the Board, for their consideration and approval.”

Vote of Thanks

There being no other business to transact, the meeting concluded with a vote of thanks to the chair.

Date of Entry                                                                                                                                            CHAIRMAN

Date of Signing

Kindly Make Necessary Changes Wherever Required during Drafting of the Committee Meeting’s Minutes.

References

  1. https://www.sciencedirect.com/science/article/abs/pii/S0304405X12002218
  2. https://meridian.allenpress.com/accounting-horizons/article-abstract/15/2/105/52279/Audit-Committee-Composition-Gray-Directors-and

By csannusharma

Annu Sharma is a qualified Company Secretary as well as a Certified CSR Professional and a Law graduate with rich experience of 4 years in secretarial, corporate legal affairs, management and corporate governance; in different industry sectors. Featured on Tax Guru.In, Compliance Calendar LLP and Blogger.com.