Draft Board Resolution Appointment of Cost Auditor Section 148

The Board of Directors of certain classes of companies are mandatorily required to appoint Cost Auditor for their companies.

Refer Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014 to have more clarity on the detailed provisions in this regard.

Such appointment of the cost auditor are made on the recommendations of the Audit committee, if any, which shall also recommend remuneration for such cost auditor, which is then considered and approved by the Board of Directors and subsequently ratified by the shareholders. In case, an audit committee is not there, the Board recommends the remuneration and shareholders' ratifies it.

Templates of board resolutions for appointment of cost auditors are given hereunder—

SAMPLE #1

#. To Appoint the Cost Auditors of the Company

“RESOLVED THAT pursuant to the provisions of section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014, and any other relevant applicable provisions, and subject to the approval of the members of the company, M/s. .................... & Co., Cost Accountants (Firm Regn. No. ........................), be and is hereby appointed as the Cost Auditors of the company to audit the cost records of the company for the financial year 20xx-xx.”

“RESOLVED FURTHER THAT Ms. .......... ............., Managing Director  of the company be and is hereby authorized to finalize the remuneration of the Cost Auditors at such fee and on such terms and conditions as may be mutually decided and agreed upon between the Cost Auditors and the company, and subject to the approval/ratification of the members of the company.”

“RESOLVED FURTHER THAT Mr. ......... ............., Company Secretary of the company be and is hereby authorized to do all such acts, deeds and things as may be necessary or incidental in this regard to give effect to the foregoing resolution.”

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SAMPLE #2

#. To Appoint the Cost Auditors of the Company

The Company Secretary informed the Board that the company is required to maintain the cost records for the company's products/services in its books of account and to get its cost records audited, the appointment of Cost Auditors is necessary as per Section 148 of the companies Act, 2013 and rules made thereunder.

The Managing Director recommended the appointment of M/s. ............... & Associates, Cost Accountants (Firm Regn. No. ...................) as the Cost Auditors of the company. M/s. ............... & Associates is a reputed firm with ...years of expertise in cost audit and related works of various companies. He further requested the Board to consider their appointment on a yearly retainership basis for their work.

The Board considered the same and passed the following resolution unanimously:

“RESOLVED THAT pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014, and any other relevant applicable provisions, and subject to the approval of the members of the company, M/s. .................... & Co., Cost Accountants (Firm Regn. No. ........................), be and is hereby appointed as the Cost Auditors of the company to audit the cost records of the company for the financial year 20xx-xx, on a remuneration of Rs. ............ per annum plus applicable tax and out of pocket expenses that may be incurred, and on such terms and conditions as may be mutually agreed upon.”

“RESOLVED FURTHER THAT Mr. ......... ............., (Designation) be and is hereby authorized to do all such acts, deeds and things as may be necessary or incidental in this regard.”

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Relevant Resolution(s):

Ordinary Resolution for Ratification of Remuneration of Cost Auditor - available here

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NOTE: These resolution samples here are only for your 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.