However as per Rule 6 of The Companies (Meetings of Board and its Powers) Rules, 2014 notified on 27 ^st March, 2014, the board of directors of a company are required to form “Audit Committee” along with “Nomination and Remuneration Committee” if any of the following condition is fulfilled:

(i)    The company is a listed company ;

(ii)    The company is a public companies with a paid up capital of ten crore rupees or more;

(iii)   The company is a public companies having turnover of one hundred crore rupees or more; and

(iv)   The company is a public companies, having in aggregate, outstanding loans or borrowings or debentures or deposits exceeding fifty crore rupees or more

Since the section 292A of the Companies Act 1956 required formation of Audit Committees linked with paid up share capital only, by this notification Rule 6 has been amended to provide that board of those companies which are covered under any of the conditions prescribed under Rule 6, should also constitute their Audit Committee within on e . year from the commencement of these rules   or appointment   of independent directors by them, whichever is earlier.

Further on the same lines, it has been provided that that board of the public companies covered under Rule 6 shall constitute their “Nomination and Remuneration Committee” within one year from the commencement of these rules or appointment of independent directors by them, whichever is earlier.

Government of India

Ministry of Corporate Affairs

Notification

· New Delhi, the 12 ^th June, 2014

G.S.R ............. In exercise of the powers conferred under sections 173, 175,177,178, 179,184, 185 , 186, 187, 188, 189 and section   191 read   with   section   469   of  the . Companies Act, 2013 (18 of 2013), the Central Government · hereby makes the following rules to amend the Companies (Meetings and Powers of Board) Rules, 2014, namely:-

1.   (1)    These rules may be called the Companies {Meetings and Powers of Board) Amendment Rules, 2014
(2) They shall come into force on the date of their publication in the Official Gazette.

2.   In the Companies (Meetings and Powers of Board) Rules, 2014, in rule 6, after the explanation, the following shall be inserted, namely:-

"Provided that public companies . covered under this rule which were not required to constitute Audit Committee under section 292A of the Companies Act, 1956 (1 of1956) shall constitute their Audit Committee within on e . year from the commencement of these rules   or appointment of independent directors by them, whichever is earlier:

Provided further that public companies covered under this rule shall constitute their Nomination and Remuneration Committee within one year from the commencement of these rules or appointment of independent directors by them, whichever is earlier ".

[F.No.1/32/2013-CL-V P t]

(Amardeep Singh Bhatia)

Joint Secretary to the Govt. of India

Note:- The principal notification was published in the Gazette of India vide No. G.S.R. 265(E) dated 31.03.2014

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