law: Companies Act, 2013 
  177.
  
    Audit
  
  Committee.
  1.      The Board of
  
  Directors of every listed company and such other class or classes of companies,
  
  as may be prescribed, shall constitute an Audit Committee.
  2.      The Audit Committee
  
  shall consist of a minimum of three directors with independent directors
  
  forming a majority:
  Provided
  
  that majority of members of Audit Committee including its Chairperson shall be
  
  persons with ability to read and understand, the financial statement.
  1.     
  2.     
  3.      Every Audit Committee
  
  of a company existing immediately before the commencement of this Act shall,
  
  within one year of such commencement, be reconstituted in accordance with
  
  sub-section (2 ).
  4.      Every Audit Committee
  
  shall act in accordance with the terms of reference specified in writing by the
  
  Board which shall, inter alia, include,—
               
  
   i.        
  
    the
  
  recommendation for appointment, remuneration and terms of appointment of
  
  auditors of the company;
              
  
   ii.        
  
    review
  
  and monitor the auditor’s independence and performance, and effectiveness of
  
  audit process;
             
  
   iii.        
  
    examination
  
  of the financial statement and the auditors’ report thereon;
             
  
   iv.        
  
    approval
  
  or any subsequent modification of transactions of the company with related
  
  parties;
              
  
   v.        
  
    scrutiny
  
  of inter-corporate loans and investments;
             
  
   vi.        
  
    valuation
  
  of undertakings or assets of the company, wherever it is necessary;
            
  
   vii.        
  
    evaluation
  
  of internal financial controls and risk management systems;
           
  
   viii.        
  
    monitoring
  
  the end use of funds raised through public offers and related matters.
  1.     
  2.     
  3.     
  4.     
  5.      The Audit Committee
  
  may call for the comments of the auditors about internal control systems, the
  
  scope of audit, including the observations of the auditors and review of
  
  financial statement before their submission to the Board and may also discuss
  
  any related issues with the internal and statutory auditors and the management
  
  of the company.
  6.      The Audit Committee
  
  shall have authority to investigate into any matter in relation to the items
  
  specified in sub-section (4 ) or referred to it by the Board and for this
  
  purpose shall have power to obtain professional advice from external sources
  
  and have full access to information contained in the records of the company.
  7.      The auditors of a
  
  company and the key managerial personnel shall have a right to be heard in the
  
  meetings of the Audit Committee when it considers the auditor’s report but
  
  shall not have the right to vote.
  8.      The Board’s report
  
  under sub-section (3 ) of section 134 shall disclose the composition of
  
  an Audit Committee and where the Board had not accepted any recommendation of
  
  the Audit Committee, the same shall be disclosed in such report along with the
  
  reasons there for.
  9.      Every listed company
  
  or such class or classes of companies, as may be prescribed, shall establish a
  
  vigil mechanism for directors and employees to report genuine concerns in such
  
  manner as may be prescribed.
  10.   The vigil mechanism
  
  under sub-section (9 ) shall provide for adequate safeguards against
  
  victimisation of persons who use such mechanism and make provision for direct
  
  access to the chairperson of the Audit Committee in appropriate or exceptional
  
  cases:
  Provided
  
  that the details of establishment of such mechanism shall be disclosed by the
  
  company on its website, if any, and in the Board’s report.