25 September 2009
In pvt company A.y. 2008-2009 Audit by x auditor. That comapny file during the year audit by Y.i.e A.y.2009-2010.is possible. in my doubt normally audit appoint by AGM . In this Case the X auditor Retire in this AGM .Y can Sign the AUDIT Report In A.Y.2009-10. What is procedure .
I think you don't want to continue with auditor "X" and want to appoint new auditor "Y" in this AGM. If this is the case then section 225 is applicable in your case.
25 September 2009
FIND BELOW THE DETAILED PROCEDURE:
APPOINTMENT OTHER THAN A RETIRING AUDITOR [Section 225] As per section 225 a special notice of a resolution to be moved at an annual general meeting for appointing an auditor other than the retiring auditor or removing of an existing auditor is given to the company in the manner as prescribed under the Act.
Requirement of special notice to the company Section 225(1) provides that special notice shall be to be given by a member and such special notice must comply with the requirements of section 190. Following two types of resolutions or notice may be given under section 225 of the Act:—
(a) resolution at an annual general meeting for appointment of a person other than a retiring auditor as auditor; and
(b) resolution at an annual general meeting providing expressly that retiring auditor shall not be reappointed. Special notice has to be given to the company at least 14 days before the date of the meeting. The period of 14 days is exclusive of both the day of meeting and the day of notice. Moreover, special notice has to be given 14 days before the date of the original meeting and not adjourned meeting.
Thus, special notice received after the adjournment of original meeting cannot be taken and acted upon by a company.
In the case of Santosh Mani v New Delhi YMCA (1995) 19 CLA 178 (Del), it was held that even though the resolution moved by a shareholder not to re-appoint a retiring auditor failed to comply with requirement of section 188, yet since it was passed in annual general meeting when notice of resolution was given by company to all members and was carried by a majority, the same could be implemented.
As per Department's Circular No. 5 of 1972, dated 21-2-1972 special notice shall be required for such resolution. Any non-compliance with the provisions of the said section would render such a resolution illegal and ineffective. Section 190 which provide a resolution requiring special notice applies to special notice under section 225.
Section 190 which provide a resolution requiring special notice applies to special notice under section 225.
COMPANY’S DUTY ON RECEIPT OF NOTICE
1. Intimation shall be given by the company to all members on receipt of notice or draft of resolution The company shall on receipt of a notice or draft resolution from a member give intimation of the same to all the members immediately and where it is not possible to do so then give notice to the members by advertisement in the newspaper circulating in the place of its registered office, not less than seven days before the meeting.
2. Intimation shall be given by the company to the retiring auditor On receipt of notice under section 225(1) of the Act, for the removal of a retiring auditor the company shall send a copy of the notice to the retiring auditor forthwith. It is advisable to send the same by registered post with acknowledgement due.
Circulation of the retiring auditors' representation to all the members Where the retiring auditor makes a representation on the notice or resolution for their removal, the company shall circulate the same to all the members of the company, if it is possible to do so before the meeting. If it is not possible to circulate the representation to the members, the auditor may require the same to be read at the meeting, unless the Central Government on an application by the company or an aggrieved person orders that copies of the representation need not be sent to members nor read at the meeting.
Following are the other relevant provisions in this regard:—
(i) In case where the retiring auditor makes with respect thereto representations in writing to the company (not exceeding a reasonable length) and requests their notification to members of the company, the company shall do the following:— (a) the company shall state the fact of the representations having been made, in any notice of the resolution given to members of the company; (b) the company shall send a copy of the representations to every member of the company to whom notice of the meeting is sent, whether before or after the receipt of the representations by the company; (c) the company is not bound to send the copy of representations to members, if the representations are received by it too late to do so; (d) if a copy of the representations is not sent as aforesaid because they were received too late or because of the company's default, the auditor may require that the representations shall be read out at the meeting. This right is in addition to the right of auditor to be heard orally at the meeting.
(ii) Section 225 applies to all companies, whether public or private.
(iii) Any resolution requiring special notice must comply with the requirements of section 190.
Contravention of the provision of section 225 would attract penalty to the company under section 629A.
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