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Appointment of new auditor

Postby jitesh_cs » Thu Aug 21, 2008 12:02 pm

Dear All,

The present auditors dont want to be re-appointed in the forthcoming AGM, so we need to appoint new auditors,

My Qusetion is that:
1) Do we need to give name of proposed auditors in the AGM notice or else we can just simply say that "To appoint new auditors in place of retiring auditors"
2) What are the other provisions,which we need to keep in mind while calling for a Board Meetinf for AGM, In NOtice of AGM and in the AGM it self.

rgds,
Jitesh Agarwal
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Re: Appointment of new auditor

Postby rupeshpurwar » Thu Aug 21, 2008 12:14 pm

Hi Jitesh,

If the present auditors do not want to be re-appointed and thus resigned, in such case you should give following resolution in the notice of AGM for appointment of new Auditors:

“Resolved that M/s ...................& Co., Chartered Accountants, be and are hereby appointed Auditors of the Company to fill the vacancy caused by the resignation of M/s ...................& Associates, Chartered Accountants, to hold office until the conclusion of the next Annual General Meeting of the Company and their remuneration be determined by the Board of Directors."
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Re: Appointment of new auditor

Postby Riyas2009 » Thu Aug 21, 2008 2:05 pm

dear Rupesh, Will it amount to casual vacancy since the retirement is at the AGm and not in between two AGMs?
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Re: Appointment of new auditor

Postby sanjayskr.3 » Thu Aug 21, 2008 2:45 pm

Dear riya,

as per Section 224 (3) of the Act, if any auditor is not appointed or re-appointed at the AGM, the central government may fill the casual vacancy and moreover why it will amount to casual vacancy as we are appointing the auditor in the AGM at the place of retiring/resigning auditor which is according to the provisions of Act.

The Notice of AGM will contain the unwillingness of the existing auditor and appointment of new auditor as O/B.
The Directors report will also contain the noting of this fact i.e. uwillingness and appointment.
The Board meeting convening Notice of AGM will also consider the fact and resignation from the existing auditor along with a certificate from the new auditor u/s- 224 (1B) & (1C), if its unwillingness is known at the time of that BODM, but if he resigns before AGM that will amount to casual vacancy and it can also be filled at the coming AGM if no AGM then EGM (please refer section 224 (6)
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Re: Appointment of new auditor

Postby Riyas2009 » Thu Aug 21, 2008 4:04 pm

Yes, as u said, if they resign before the AGM, there will be a time span till the date of AGM while the company will have no auditors. what about this situation? should company appoint auditor just for that short period? I think this only can be called as casual vacancy. plz correct if i am wrong...
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Re: Appointment of new auditor

Postby jitesh_cs » Thu Aug 21, 2008 4:51 pm

Well the queiry here is :

Appointment of new auditors in AGM in place of Retiring auditors,
it can not be called casual vacancy as the old auditors will continue till AGM and the new auditors will be appointed in the AGM.
So in this situation what all is required......................
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Re: Appointment of new auditor

Postby Riyas2009 » Thu Aug 21, 2008 7:03 pm

you can simply quote the resolution given by Mr.Rupeshpurwar..
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Re: Appointment of new auditor

Postby jitesh_cs » Fri Aug 22, 2008 9:46 am

But this is not a casual vacancy, since the auditors are retiring in AGM and new auditors are joining from AGM only, so this resolution will not work.
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Re: Appointment of new auditor

Postby Riyas2009 » Fri Aug 22, 2008 10:47 am

As rightly meant by Mr. Sanjay, I understood that the expression 'casual vacancy' has no where been defined in the Act. Simply stated, a casual vacancy in the office of an auditor means a vacancy caused in the office of an auditor by his death, disqualification, resignation, etc. Now I understood it doesn't matter whether the resignation is at AGM or in between two AGMs. See Proviso to sec. 224(6)(a). Here I believe this case will also be touched by Sec.225(1) where special notice or express provision in the notice requires since a new person is being appointed as Auditors.

The resolution may be like this:
"Resolved that, pursuant to proviso to sub sec.(6)(a) of Sec.224 of the C.A-1956,M/s------------------,CAs be and are hereby appointed as auditors of the company to fill the vacancy caused by the resignation of M/s -------------------, CAz,present auditors of the company, to hold the office from the date of this meeting until the conclusion of the next annual general meeting of the company on a remuneratin of Rs-------"

Expl.stt:
Proviso to SEc 224(6)(a) lays down that where vacancy in the office of an auditor is caused by the resignation of the existing auditor, the vacancy shall be filled only by the company in GM. Hence this resolution for approval by the members. The letter of resignation of M/s -----may be inspected at the registered office of the company at-------during the business hours on any working day.

None of the directos is interested or concerned in the proposed resolution.,

OTHER VIEWS, IF ANY, PLEASE COME OUT..
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Re: Appointment of new auditor

Postby sanjayskr.3 » Fri Aug 22, 2008 10:55 am

sorry riya b'coz i couldn't answer your last query yesterday, due to my urgent office work,

as u say the auditor will be appointed for a short period i.e. upto coming AGM in case of Casual Vacancy but we will regularise him in that AGM by their reappointment.

thanks
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Re: Appointment of new auditor

Postby Riyas2009 » Fri Aug 22, 2008 11:09 am

thank u Mr. Sanjay, you please go through my suggestion, and please correct if there any faults...
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Re: Appointment of new auditor

Postby alpana » Fri Aug 22, 2008 11:46 am

Hi,

I think there is no casual vacancy in this case as the auditors are completing their term of appointment, i.e the date of AGM. The resoultion should be on following lines:

“Resolved that M/s ...................& Co., Chartered Accountants, be and are hereby appointed as Auditors of the Company in place of M/s ______________, Chartered Accountants, who have expressed their desire not to be reappointed, to hold office until the conclusion of the next Annual General Meeting and their remuneration be determined by the Board of Directors."

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