Resolution Auditor Appointment in Casual Vacancy (resignation)

Clause (i) of sub-section (8) of Section 139 of the Companies Act, 2013, reads as under:—

 Any casual vacancy in the office of an auditor shall, in the case of a company other than a company whose accounts are subject to audit by an auditor appointed by the Comptroller and Auditor-General of India, be filled by the Board of Directors within thirty days, but if such casual vacancy is as a result of the resignation of an auditor, such appointment shall also be approved by the company at a general meeting convened within three months of the recommendation of the Board and he shall hold the office till the conclusion of the next annual general meeting.

Template of resolution to be passed at the general meeting for such appointment is as follows—

SAMPLE

(Format of Ordinary Resolution passed in the AGM hold within 3 months of Board's recommendation) (Modify the resolution as per your requirement with necessary details)

#. Appointment of the Statutory Auditors

(A) To fill in the casual vacancy

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

"RESOLVED THAT pursuant to the provisions of section 139 of the Companies Act, 2013 ('the Act') read with rules framed thereunder, as amended from time to time, the consent of the members of the company be and is hereby accorded for the appointment of M/s. ............................. (Firm Registration No. .......................) as the Auditors of the company, with effect from ..(date).., to fill the casual vacancy caused by the resignation of M/s. ............................. (Firm Registration No. .......................), to hold the office till the conclusion of this Annual General Meeting, at such remuneration as may be mutually agreed upon between the Board of Directors and the Auditors.

RESOLVED FURTHER THAT the Board of Directors of the company, including a Committee thereof, be and is hereby authorised to do all such acts, deeds and take such steps as may be considered necessary and expedient to give effect to the foregoing resolution."

(B) For a term of five years

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

"RESOLVED THAT in accordance with the provisions of Section 139 and all other applicable provisions, if any, of the Companies Act, 2013 ('the Act') and the rules framed thereunder, as amended from time to time, approval of the members of the company be and is hereby accorded for the appointment of M/s. ............................. (Firm Registration No. .......................), as the Auditors of the company, for a term of five years from the conclusion of this Annual General Meeting till the conclusion of the ...th Annual General Meeting to be held in the year 20XX, at such remuneration as may be mutually agreed upon between the Board of Directors and the Auditors.

RESOLVED FURTHER THAT the Board of Directors of the company, including a Committee thereof, be and is hereby authorised to do all such acts, deeds and take such steps as may be considered necessary and expedient to give effect to the foregoing resolution."

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ANNEXURE TO THE NOTICE DATED ...........................

EXPLANATORY STATEMENT PURSUANT TO THE PROVISIONS OF SECTION 102 OF THE COMPANIES ACT, 2013

ITEM NO. .......:

(The explanation for this item is given for the information of the members, though strictly not required as per Section 102 of the Companies Act, 2013)

The members of the company at the ...th Annual General Meeting ('AGM') held on ..(date).., had approved the appointment of M/s. ............................. (Firm Registration No. .......................), as the Auditors of the company for a term of five years, till the conclusion of the ...th AGM to be held in the year 20XX. M/s. ............................. has since tendered their resignation as the Auditors of the company, expressing their inability to continue as the Auditors due to other time bound and compelling assignments, resulting in a casual vacancy in the office of the Auditors of the company, with effect from ..(Date).., as per section 139(8) of the Companies Act, 2013 ('the Act').

In accordance with the aforesaid provisions of the Act, the casual vacancy caused by the resignation of Auditors shall be filled by the Board within a period of thirty days and such appointment shall also be approved by the members of the company within three months of the recommendation of the Board. Accordingly, based on the recommendation of the Audit Committee and the confirmation received from M/s. ............................. (Firm Registration No. .......................) on their eligibility, the Board recommends to the members their appointment, as the Auditors of the company:

 (a) to fill the casual vacancy caused by the resignation of M/s. ............................. and to hold the office up to the conclusion of this AGM; and

 (b) for a period of 5 years from the conclusion of this AGM till the conclusion of the ...th AGM of the company to be held in the year 20XX.

Brief Profile of M/s. .............................:

M/s. ............................. (Firm Registration No. .......................), ("the Audit Firm"), is a firm of Chartered Accountants registered with the Institute of Chartered Accountants of India (ICAI). The Audit Firm was established in the year .... and is presently situated at ..................... The Audit Firm has valid Peer Review certificate. The Audit Firm primarily renders audit and assurance services to its clients engaged in Financial Services, ......, etc. Its presence spans across various cities in India with ...partners and over ...professionals.

None of the Directors, Key Managerial Personnel and their relatives is concerned or interested in Item No. ... of the Notice.

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

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Imp. Note: Please refer the latest provisions of the Act and rules thereunder, and any other applicable provisions before finalising the resolution. The above mentioned resolution is only a draft for reference purpose only.