Section 279 of the Companies Act, 2013
Section 279 of the Companies Act, 2013 deals with the composition of the Audit Committee in a company.
📘 Section 279 – Audit Committee Composition
✅ Key Provisions:
Applicability:
This section applies to:
Listed companies, and
Certain other classes of companies as prescribed (mainly public companies with specific thresholds).
Constitution of Audit Committee:
The company shall constitute an Audit Committee of the Board consisting of not less than three directors.
Two-thirds of the members of the Audit Committee should be independent directors.
All members of the Audit Committee must be financially literate and at least one member should have accounting or related financial management expertise.
Chairman:
The Chairman of the Audit Committee shall be an independent director.
The Chairman shall be present at the Annual General Meeting to answer shareholder queries on financial matters.
📝 Background:
This section replaced the older Section 292A of the Companies Act, 1956 and aligns with SEBI LODR (Listing Obligations and Disclosure Requirements) regulations.
📌 Example:
If ABC Ltd. is a listed company, it must form an Audit Committee with at least 3 directors, out of which 2 must be independent directors with financial literacy and expertise.
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