Muthoot Capital Services

Board Audit Committee Charter

The Audit Committee is committee of Board of Directors charged with oversight of financial reporting and disclosure and provides an ‘independent’ reassurance to the Board through its oversight and monitoring role. It assists the Board to keep a close vigil on the working of the Company.

Authority

The Audit Committee is granted the authority to investigate any activity of the company and its subsidiaries and all employees shall be directed to cooperate with the Committee.

The Committee is also granted the authority to obtain legal or other independent professional advice and assistance if necessary. The Committee will have the authority to retain the professionals with special competence or skills as necessary to assist the Chairman in fulfilling its responsibilities.

Composition

The audit committee shall have minimum three directors as members. Two-thirds of the members of audit committee shall be independent directors.

All members of audit committee shall be financially literate and at least one member shall have accounting or related financial management expertise.

The members of the Audit Committee shall elect a Chairman from amongst themselves, who shall necessarily be an independent director.

The Chairman of the Audit Committee shall be present at Annual General Meeting to answer shareholder queries.

The audit committee may invite such of the executives, as it considers appropriate (and particularly the head of the finance function) to be present at the meetings of the committee, but on occasions it may also meet without the presence of any executives of the company. The finance director, head of internal audit and a representative of the statutory auditor may be present as invitees for the meetings of the audit committee;

The Company Secretary shall act as the secretary to the committee.

Frequency and Attendance

Meetings shall be held at let twice a year. Notice of meetings shall be circulated to the members one week in advance.

The Head of Finance, a representative of the External Auditor and internal Auditor may attend meetings by invitation. Other Board members shall have the right of attendance.

Questions arising at any meeting shall be decided by a majority of votes, each member having one vote and in the event of tie, the Chairman shall have a second or casting vote. However, at meetings where two members form a quorum, or when only two members are competent to vote on an issue, the Chairman will not have a casting vote.

The External Auditors may request a meeting if they consider it necessary. Upon the request of the Auditor, the Chairman of the Audit Committee shall convene a meeting of the Committee to consider any matters the Auditor believes should be brought to the attention of the Directors or shareholders.

Scope and Functions

The scope and functions of the Audit Committee shall be to:

  • Review the internal audit plan submitted by Internal Auditors with the external auditors.
  • Review with the external Auditors, financial statements and reports in order to provide a channel for communication between the Board and Audit function
  • Evaluate the performance of the internal auditors and consequently recommend their appointment.
  • Approve and issue the Audit Committee’s report on the financial statements in the form as may be required by the relevant authorities from time to time.
  • Report to the Board of Directors all pertinent issues.
  • Review with the external auditors, their evaluation of system of internal accounting controls.
  • approve the appointment of Internal Auditors
  • Approve the internal Audit Plan
  • Review the effectiveness of the Internal Audit Function
  • Review the follow up actions Management on the weakness of internal accounting procedures and controls as highlighted by External and Internal Auditors.
  • Review any significant transactions which are not within the normal course on business and any related party that may arise within the Company or group.
  • Review interim financial information and press releases
  • Review accounting policies to determine suitability.
  • Assist in establishing appropriate internal control procedures.
  • Perform any other work that it is required or empowered to do by statutory legislation or guidelines as prepared by relevant Government Authorities.
  • Review and approve the Annual Report prior to presentation to the Board of Directors for approval and subsequent dispatch to the shareholders.
  • Review any MIS or such other management control or audit system that s being proposed for implementation in the Company along with the External and Internal Auditors.

Reporting Responsibilities

The Audit Committee shall periodically update the Board.

The Annual Report of the Company shall disclose the composition of the Audit Committee, brief description of the scope and functions of the Audit Committee, name of members, Chairperson, meetings and attendance.

The recommendations on any matter relating to financial management including the audit report, shall be binding on the Board. If the Board does not accept the recommendations of the Audit Committee, it shall record the reasons therefore and communicate such reasons to the shareholders.

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