Board Resolution

Board Resolution:-


The sub-Section (2) of Section 233B inter-alia provides that the auditor under this Section shall be
appointed by the Board of directors of the company in accordance with the provisions of sub-
Section (1B) of Section 224 and with the previous approval of the Central Government.

The company has to make an application to the Central Government for obtaining an approval
for an appointment of Cost Auditor in Form No. 23-C. As per clause 12, a certified copy of the
resolution passed by the Board of Directors of the company sanctioning the proposal for which the
Government’s approval has been sought is to be attached along with Form 23-C.

 Hence, it is imperative that a resolution has to be passed by the Board of Directors for the appointment
of the Cost Auditor. Since, the appointment of the Cost Auditor is subject to the previous approval
of the Central Government, the Board Resolution (Appendix I-C) should specifically mention that,
`subject to the approval of the Central Government and pursuant to the provisions of Section 233B of
the Companies Act, 1956, Mr. / M/s ................ be and is hereby appointed as Cost Auditor(s)...’.

On receipt of approval of the Central Government (Appendix I-E), the company should send letter
of appointment to Cost Auditor(s).