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Procedure of Appointment of New Auditors

Mayuri Lal (officer CS) (748 Points)

24 March 2011  

There is public company ABC which is the subsidiary of a listed company. Now the STATUTORY auditor of ABC wants to resign and in place of him a new auditor has to be appointed so this will happen in the EGM only.

''Can anyone explain me the provisionsa and the procedure regarding the above or the relevant resolution and documents required for the aabove purpose.

 

 

Regards,

Mayuri Lal 


 5 Replies

SANTOSH SHAH (Company Secretary) (749 Points)
Replied 24 March 2011

Originally posted by : Mayuri Lal

There is public company ABC which is the subsidiary of a listed company. Now the STATUTORY auditor of ABC wants to resign and in place of him a new auditor has to be appointed so this will happen in the EGM only.

''Can anyone explain me the provisionsa and the procedure regarding the above or the relevant resolution and documents required for the aabove purpose.

 

 

Regards,

Mayuri Lal 

 Hi Mayuri

Its case of Casual Vacancy of Auditors.

Provisions of Section 224 applicable.

Casual vacancy is caused due to death, resignation or disqualification of auditors.

In case of resignation of auditors, the vacancy needs to be filled only through General Meeting.

 

Section 224(6)(a)

----------------------

(6) (a) The Board may fill any casual vacancy in the office of an auditor; but while any such vacancy continues, the remaining auditor or auditors, if any, may act:

 

Provided where such vacancy is caused by the resignation of an auditor, the vacancy shall only be filled by the company in general meeting.

 

(b) Any auditor appointed in a casual vacancy shall hold office until the conclusion of the next annual general meeting.

==============================================================================

Points to note:

 

1. Call Board Meeting, take note of Resignation

2. Call EGM, Fix  Venue and date of EGM , send notices

3. In EGM, take record of the same, and appoint another statutory auditors , who shall hold office only till

    conclusion of the forthcoming annual general meeting.

4. If resolution is ordinary no need to file form 23, if special do file form 23

5. Also the appointed auditor need to file form 23B from his end within 30 days of appointment.

Before appointing the new auditor, kindly take consent as required to act as auditor till the AGM,

and post EGM, intimate them of their appointment as auditors in place of earlier auditors holding office

Till AGM.

 

If i have missed out anything, experts please advice.

 

regards

Santosh Shah

Jayashree S Iyer (Company Secretary) (3224 Points)
Replied 25 March 2011

Agree with Santhosh.

 

In addition, take an undertaking from the auditors that their appointment would be in accordance with the limits specified in sub-section (1B) of Section 224. Also get the approval of members in general meeting for the remuneration of Auditors.

Sudhir Garg (Service) (236 Points)
Replied 25 March 2011

Hi

As far as ABC is concerned, above replies has covered the required one except receipt of representative letters from the shareholder which is holding company. I also understand being subsidiary of listed company, the matter is also required to be taken up in the board of listed company.

 

Regards- Sudhir

Mayuri Lal (officer CS) (748 Points)
Replied 07 April 2011

THANKK U..

 

Mr. Sudhir u saying the matter is to be taken in the board of holding company, Can u please tell me in addition to this whats holding listed company need to comply with and if u can tell me as to where its written

Sudhir Garg (Service) (236 Points)
Replied 07 April 2011

Dear Mayuri

 

I am not sure with the listing company provisions. But what I understant, any changes in subsidiary company is required to be intimated to SE. Appointment of auditors is not such a minor issue, not to be taken up in BM of holding company.

other members view solicited.

Regards- Sudhir


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