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Draft Shareholders Resolution for appointment of Branch Auditor

In case, a company has branch office(s), whether within India or in any other place outside of India, the company is required to have the accounts of that branch office audited.

Where the branch office is in India - the audit could be done either by the statutory auditor appointed for the company under the Companies Act or the accounts could be audited by any other person qualified for appointment as an auditor of the company.

resolution for appointment of branch auditorWhere the branch office is outside India - the audit could be done either by the company’s statutory auditors or by an accountant or by any other person duly qualified to act as an auditor of the accounts of the branch office in accordance with the laws of that country.

Generally, through an ordinary resolution passed at a general meeting, the members/shareholders of the company authorise the Board of Directors or any committee thereof to appoint branch auditors; or the resolution could be passed for appointment of a specific audit firm along with clear terms of their appointment.

[Refer - Section 143(8) of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014]



SAMPLE #1
[Appointment of Auditors for Branch Offices for branches only outside India]

#. Appointment of Branch Auditors

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 143(8) and any other applicable provisions of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, (including any statutory modification(s) or re-enactment thereof for the time being in force), the Board of Directors of the company or a duly constituted committee thereof be and is hereby authorized to appoint and fix the remuneration of Branch Auditors, in consultation with the company's auditors, any person(s) qualified to act as Branch Auditors, for any branch office of the company, whether existing or which may be opened/acquired hereafter, outside India.”

Explanatory Statement:
Pursuant to the provisions of Section 102 (1) of the Companies Act, 2013

Item No. ... :

Your company has established/acquired some branches outside India and may also, in future, open / acquire new branches outside India. In order to carry out the audit of the accounts of such branches, it is necessary to appoint branch auditors for these branches.

Therefore, the Members are requested to authorize the Board of Directors of the company to appoint branch auditors who are qualified to act as the auditors of all such branches, in consultation with the Statutory Auditors of the company and to fix their remuneration.

None of the Directors or Key Managerial Personnel (KMP) or their relatives is concerned or interested in the Resolution set out at Item No. ...

The Board commends the Resolution at Item No. ... for approval by the Members.

..........................................................


SAMPLE #2
[Ratification of Re-Appointment of Joint Branch Auditors]

To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED that pursuant to the provisions of Section 143(8) and all other applicable provisions of the Companies Act, 2013 (the “Act”) and the Companies (Audit and Auditors) Rules, 2014, as amended from time to time, the company hereby ratifies the appointment of M/s. ............ & Co., Chartered Accountants (Regn. No. .................) and M/s. ................. & Associates, Chartered Accountants (Regn. No. .................) as the Joint Branch Auditors of “(......... Business)” unit at (City) and all other offices of .................... business wherever situated in India and abroad to hold office from the conclusion of this meeting until the conclusion of the ..th Annual General Meeting to be held for the financial year .... - .... on such remuneration as may be determined by the Board of Directors or committee thereof.”

Explanatory Statement under section 102 of the Companies Act, 2013:

At the ...th Annual General Meeting held on (Date), Members had approved the appointment of M/s. ................ & Co., Chartered Accountants and M/s. ............... & Associates, Chartered Accountants as the Joint Branch Auditors for five consecutive financial years for ‘..................... Business’ at (City) and all other branch offices of the such business units wherever situated across the world.

As per Rule 3(7) of the Companies (Audit and Auditors) Rules, the appointment of the auditor shall be subject to ratification by the members at every annual general meeting till the expiry of the term of the Auditor. Hence, the appointment of the said Joint Branch Auditors from the conclusion of this Meeting until the conclusion of the Annual General Meeting to the held for the financial year .... - .... is being placed for members’ ratification.

None of the Directors and Key Managerial Personnel (KMP) of the company and their respective relatives are concerned or interested in the passing of the foregoing resolution.

The Board commends the passing of the Resolution at Item No. ...

..........................................................

SAMPLE #3
[Re-Appointment of Branch Auditors]

#. Re-Appointment of Branch Auditors

To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution:

"Resolved that in accordance with the provisions of Section 143(8) and all other applicable provisions of the Companies Act, 2013 reads with applicable rules made thereunder, M/s. ............. & Associates, Chartered Accountants (Firm Regn. No. ...................), be and are hereby re-appointed as Branch Auditors for the company's ......... Unit at (Address), to hold office from the conclusion of this meeting till the conclusion of the ...th AGM of the company, for auditing the accounts of the said Branch unit of the company at such remuneration as may be determined by the Board of Directors of the company or a Committee thereof."

EXPLANATORY STATEMENT

Pursuant to the provisions of Section 102 (1) of the Companies Act, 2013

Your company has a .............. business branch unit at (Address). It is proposed to re-appoint M/s. ............... & Associates, Chartered Accountants, as Branch Auditors for the said branch unit. M/s. ......... & Associates, Chartered Accounts have confirmed their willingness to act as the Branch Auditors for the said branch, if appointed.

None of the Directors or Key Managerial Personnel of the company and their relatives is concerned or interested, financial or otherwise, in the resolution set out at Item No. ... of this Notice.

The Board commends their appointment as branch auditors for approval of the members.

..........................................................

SAMPLE #4
[Appointment of Branch Auditors for Overseas Branches]

#. Appointment of Branch Auditors

To consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of section 143 (8) and all other applicable provisions of the Companies Act, 2013 (the 'Act'), the Board of Directors of the company or duly constituted committee thereof be and is hereby authorized to appoint the Branch Auditors of ..............Branch Offices in (Country Names) and any the Overseas Branches which may be opened/acquired hereafter in consultation with the company’s Statutory Auditors, any person(s) who is qualified to act as Branch Auditor within the provisions of section 143(8) of the said Act and to fix their remuneration.”

Explanatory Statement under section 102 of the Companies Act, 2013:

Item no. ...

The company has established ........(Name)....... Branch Offices in (Name of the Countries) and may also open/acquire new Branches outside India in future. It would be necessary to carry out an audit of the accounts of such Branch Offices and hence it would be required to appoint Branch Auditors for such branches.

The Members are requested to authorize the Board of Directors of the company to appoint and fix the remuneration of such Branch Auditors in consultation with the company’s Statutory Auditors.

None of the Directors or Key Managerial Personnel (KMP) or relatives of directors and KMP is concerned or interested, financially or otherwise, in the foregoing Resolution.

The Board commends the Resolution at Item No. ... for approval by the Members.

..........................................................

SAMPLE #5
[Appointment of Auditor(s)/Accountant(s) qualified to act as Auditor of Branch Offices in India and outside India]

#. Appointment of Branch Auditors

To consider and if thought fit, to pass, with or without modifications, the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 143(8) and other applicable provisions, if any, of the Companies Act 2013 ('the Act'), the Board of Directors be and is hereby authorised to appoint the company’s auditors, so far as the Branch offices in India are concerned or accountant(s) duly qualified to act as Auditor(s) of the Branch Offices of the company situated in countries outside India, in accordance with the laws of respective countries, to audit the accounts for the financial year .... - .... of the company’s Branch Offices in India and abroad, respectively, whether existing or which may be opened hereafter, and to fix their remuneration.

RESOLVED FURTHER THAT Ms. ............., CEO & Managing Director, be and is hereby authorized to do all such acts, deeds, things and matters as may be necessary and expedient to give effect to the foregoing resolution”


EXPLANATORY STATEMENT

Pursuant to the provisions of Section 102 (1) of the Companies Act, 2013

Item no. ...

The company has established Branch Offices in various locations outside India in addition to the branches in India. Some more branches may also be opened or acquired in different places in the overseas at any point of time in future.

In accordance with the provisions of Section 143(8) of the Companies Act, 2013 and respective rules made thereunder, the accounts of such Branch offices are required to be audited by qualified Auditors/Accountants.

Hence, authorization of the Members is being sought in order to enable the Board of Directors of your company to appoint the Branch Auditors/Accountants for auditing the accounts of such Indian and overseas Branch offices.

None of the Directors of the company, Key Managerial Personnel (KMP) and their respective relatives are concerned or interested, financially or otherwise, in the Resolution at Item No. ...

The Board recommends the passing of the foregoing Resolution.



..........................................................

NOTE: The resolution samples here are only for reference, to help you with drafting. Do refer the exact provisions of the Act, relevant rules framed thereunder and any other applicable laws to be able to not to miss out anything important while drafting.

Comments

  1. P Raghavendra7/22/2019

    The variety in samples really helped me in learning how the resolutions are drafted. Thanks a lot. Served the purpose.

    ReplyDelete

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