Objective

The Audit Committee assists the Board in its responsibility for overseeing the quality and integrity of the accounting, auditing and reporting practices of the Company and its compliance with the legal and regulatory requirements. The Committee’s purpose is to oversee the accounting and financial reporting process of the Company, the audits of the Company’s financial statements, the appointment, independence, performance and remuneration of the statutory auditors including the Cost auditors, the performance of internal auditors and the Company’s risk management policies.

Powers of the Committee:

• To investigate any activity within its terms of reference.
• To seek information from any employee.
• To obtain outside legal or other professional advice.
• To secure attendance of outsiders with relevant expertise, if it considers necessary.

Terms of Reference of the Committee:

Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;

Recommend appointment, remuneration and terms of appointment of auditors, including cost auditors, of the Company;

Approval of payment to statutory auditors, including cost auditors, for any other services rendered by them;

Review with the management, the annual financial statements and auditor’s report thereon before submission to the Board for its approval, with particular reference to:

• a) matters required to be included in the Directors’ responsibility statement to be included in the Board’s report in terms of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013;
• b) changes, if any, in accounting policies and practices and reasons for the same;
• c) major accounting entries involving estimates based on the exercise of judgement by management;
• d) significant adjustments made in the financial statements arising out of audit findings;
• e) compliance with other legal requirements relating to financial statements;
• f) disclosure of any related party transactions;
• g) modified opinion(s) in the draft audit report.

Review with the management, the quarterly financial statements before submission to the Board for approval;

Review with the management, the statement of uses/ application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilised for the purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;

Approval or any subsequent modification of transactions with related parties of the Company;

Scrutiny of inter-corporate loans and investments;

Valuation of undertakings or assets of the Company, wherever it is necessary;

Evaluation of internal financial controls and risk management systems;

• a) Review with the management, performance of statutory and internal auditors.
• b) Review with the management adequacy of the internal control systems.

Review the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;

Discuss with internal auditors any significant findings and follow-up thereon;

Review the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;

Look into the reasons for substantial defaults, in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;

Review the functioning of the Whistle Blower mechanism / oversee the vigil mechanism;

Approval of appointment of Chief Financial Officer after assessing qualifications, experience and background, etc. of the candidate;

Mandatorily review the following:

• a) Management Discussion and Analysis of financial condition and results of operations;
• b) Statement of significant related party transactions (as defined by the Audit Committee), submitted by management;
• c) Management letters / letters of internal control weaknesses issued by the statutory auditors;
• d) Internal audit reports relating to internal control weaknesses;
• e) Appointment, removal and terms of remuneration of the chief internal auditor
• f) Statement of deviations:

Review financial statements, in particular the investments made by the Company’s unlisted subsidiaries;

Formulate the scope, functioning, periodicity of and methodology for conducting the internal audit;

Review show cause, demand, prosecution notices and penalty notices, which are materially important;

Review any material default in financial obligations to and by the Company, or substantial non-payment for goods sold by the Company;

Review any issue, which involves possible public or product liability claims of substantial nature, including any judgement or order which, may have passed strictures on the conduct of the Company or taken an adverse view regarding another enterprise that may have negative implications on the Company;

Details of any joint venture or collaboration agreement;

Sale of investments, subsidiaries, assets which are material in nature and not in normal course of business;

Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material;

Review the utilisation of loans and / or advances from / investment by the holding company in the subsidiary.

Carry out any other function as is mandated by the Board from time to time and / or enforced by any statutory notification, amendment or modification as may be applicable.