Appointment of new auditors in egm: possibilities

Discussion in 'Corporate Law' started by kanchan, Sep 10, 2013.

  1. kanchan

    kanchan Member

    A Pvt Ltd Company held its AGM for Accounting Year 2009-10 on 15th Nov 2010(we will leave aside the fact that it should have been done upto 30th Sept 2010). Say a CA Firm M/s ABC was appointed in the AGM. Now, there was an EGM on held on 25th July 2011 and a new auditor was appointed say a CA Firm M/s XYZ. Consequently, the Company sent an intimation to the new auditor firm on 28th July 2011. M/s XYZ then obtained a NOC from previous auditor on 11th Aug 2011 and completed the audit on 25th Sept 2011. AGM was called on 27th Sept 2011. Now, my questions to the above situation are as follows: 1) Can an auditor be appointed in EGM as it has been done in the above case? Is there any problems in doing so? 2) If an auditor is removed prior to his term, prior approval of Central Govt is obtained. The term is usually until the conclusion of next AGM. But in this case, it was an EGM. So does the prior approval of CG has to be obtained? And does it matter if this hasn't been obtained but the Auditor has(like in the above case) given his NOC to the new auditor? 3) Appointment of auditor is usually done for a period and not for any financial year. So just wanted to confirm that in the above case the auditor appointed in July 2011 can audit for financial year ended 31st March 2011. In other words, want to confirm that despite the auditor wasn't in office for any day in the financial year for which the books are being audited but can still audit?? Share on linkedin pramod yadav Assistant Company Secretary [ Scorecard : 123] Thank User Send PM Posted about a year ago Quote Dear yashsir, 1. yes auditor can be appointed by egm. 2. yes , II. ORDINARY RESOLUTION PASSED AT THE EGM FOR REMOVING EXISTING AUDITORS SUBJECT TO APPROVAL OF REGIONAL DIRECTOR “RESOLVED THAT pursuant to the provision of section 224(7) of the Companies Act, 1956 and subject to the approval of the Central Government (Powers delegated to the Regional Director), M/s ABC & Co., Chartered Accountants of Kanpur, who were appointed as the Auditors of the Company at the last Annual General Meeting to hold office up to the conclusion of the next Annual General Meeting of the Company, be and are hereby removed from such office of the Auditors, before the expiry of their term.” III. ORDINARY RESOLUTION PASSED AT THE EGM FOR APPOINTING NEW AUDITORS SUBJECT TO APPROVAL OF REGIONAL DIRECTOR “RESOLVED THAT pursuant to the provision of section 224, 224(1B) and 225 of the Companies Act, 1956 and subject to the approval of the Central Government (Powers delegated to the Regional Director) for the removal of the existing Auditors of the Company, M/s Jain & Co., Chartered Accountants of Mysore, M/s Malhotra & Associates, Chartered Accountants of Kanpur, be and are hereby appointed as the Auditors of the Company to hold office from the date of order of removal of the Auditors as approved by the Regional Director up to the conclusion of the next Annual General Meeting of the Company on a remuneration of Rs. 6,500 plus out of pocket expenses. SPECIMEN OF THE BOARD RESOLUTION FOR AUTHORIZING TO FILE APPLICATION “RESOLVED THAT an application in the prescribed e-Form 24A for approval for the removal of Auditor u/s 224(7) of the Companies Act, 1956 be made to the Regional Director, Ministry of Company Affairs, Western Region, Mumbai. RESOLVED FURTHER THAT Mr. Manoj, Director and/or Company Secretary of the Company be and is hereby authorised to sign the application on behalf of the Board and execute an affidavit verifying the contents of the application. RESOLVED FURTHER THAT Company Secretary be and is hereby authorised to file the above said application with the Regional Director, Western Region, Department of Company Affairs and to appear before the Regional Director on behalf of the Company and to do all such acts, deeds and things as may be required in the matter and to give all details, statements as may be required by the Regional Director.” The resolution is proposed to give the necessary authority to the Board of Directors in this behalf. No director is interested or concerned in the resolution. 3. no, it can audit only financial year 201.-11 only.

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