Appointment of auditor in a government company
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
06 January 2012
In case of government companies statutory auditor is appointed by CAG. So, whether in govt. companies the approval of shareholders in the AGM in not necessary for the appointment of Statutory Auditor as it is to be appointed BY CAG.
07 January 2012
Yes Shareholders Approval not required. (Provisions of Sec 619 will apply)
The Statutory Auditors of any Private Sector company are appointed or re-appointed by the shareholders at their Annual General Meeting(AGM) on the basis of the recommendations of the Board of Directors and their remuneration is also fixed accordingly.
However, this is not so in case of Government companies. In terms of section 617 of the Act a Govt company has been defined to mean a company in which not less then 51 per cent of the paid up share capital is held by the Central Government or any State Govt(s) or partly by the Central and partly by the State Govt(s). Under section 619 of the Act the Statutory Auditor of a Govt company is appointed by the Comptroller & Auditor General of India (CAG) who has the power to give directions regarding the manner in which the audit is to be conducted. The auditor is required to submit his report to the CAG who shall then have the power to comment on the same or even supplement it. Such comments shall be then placed before the shareholders at their AGM.
The Statutory Auditors of any Private Sector company are appointed or re-appointed by the shareholders at their Annual General Meeting(AGM) on the basis of the recommendations of the Board of Directors and their remuneration is also fixed accordingly.
However, this is not so in case of Government companies. In terms of section 617 of the Act a Govt company has been defined to mean a company in which not less then 51 per cent of the paid up share capital is held by the Central Government or any State Govt(s) or partly by the Central and partly by the State Govt(s). Under section 619 of the Act the Statutory Auditor of a Govt company is appointed by the Comptroller & Auditor General of India (CAG) who has the power to give directions regarding the manner in which the audit is to be conducted. The auditor is required to submit his report to the CAG who shall then have the power to comment on the same or even supplement it. Such comments shall be then placed before the shareholders at their AGM.
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