The Hindu Business Line : Companies Act

The Lok Sabha is to consider amendments to the Companies Act,1956 in the ensuing winter session. In this context, the Lok Sabha should consider amending Section 292A of the Act relating to the Audit Committee of the Board. According to sub-section (10) of the Section, the Chairman of the Audit Committee shall attend the annual general meetings of the company to provide clarification on matters relating to audit.

If the Committee Chairman fails to be so present, he will be punishable with imprisonment up to one year or fine up to Rs.50,000 or both. Evidently, this is a stringent provision. It is also anomalous in that it is not likewise mandatory for even the Chairman of the Company to attend the Annual General Meetings.

Further, it is possible that the Chairman of the Audit Committee may not be able to be present for genuine reasons such as illness, bereavement in the family and last minute flight cancellation. It is, therefore, necessary to provide that in case the Chairman of the Audit Committee is unable to be present, any other member of the Committee may attend on his behalf.

N. Ganga Ram

Mumbai

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