Companies Act, 1973 (Act No. 61 of 1973)Chapter X: AuditorsAppointment269A. Audit committees for public interest companies |
| 1) | In every financial year in which a company is a widely held company, its board of directors shall appoint an audit committee for the following financial year. |
| 2) | Subsection (1) shall not apply to a company- |
| a) | if the audit committee of a holding company will perform the functions required under section 270A(1) on behalf of that company; |
| b) | if the company ceases to be a widely held company in the manner contemplated in section 1(7); |
| c) | if the company belongs to a category of companies specified by the Minister under section 269B. |
| 3) | An audit committee must have at least two members and consist only of non-executive directors of the company who must act independently. |
| 4) | For the purposes of this Chapter- |
| a) | "financial year" shall be construed in accordance with section 285; |
| b) | a director is a non-executive director of a company if the director- |
| i) | is not involved in the day to day management of the business and has not in the past three financial years been a full-time salaried employee of the company or its group; |
| ii) | is not a member of the immediate family of an individual mentioned in subparagraph (i); |
| c) | a director acts independently if that director- |
| i) | expresses opinions, exercises judgment and makes decisions impartially; |
| ii) | is not related to the company or to any shareholder, supplier, customer or other director of the company in a way that would lead a reasonable and informed third party to conclude that the integrity, impartiality or objectivity of that director is compromised by that relationship. |