Fwd: Appointment of Auditors-ratification by shareholders

[Prathima Tellis]

Dear Professional friends,

X company has appointed statutory auditors for a term of 5 years and issued an appointment letter in this regard (subject to ratification by shareholders every year till their term).

At the Annual General Meeting (FY 2014-15) the appointment was not ratified by the members of X and as per explanation to Rule 3 of Companies (Audit & Auditors), Rule 2014, “If shareholder not ratified the appointment, Board can appoint another auditor as per the procedure laid down in the Act”. 

 

X is a listed company and required to have audit committee and no auditor could be appointed without audit committee’s recommendations and in case of companies which do not have to constitute an audit committee, the Board should recommend it to the members.

 

I could think of the following way out, please suggest,

 

1. Call Annual General Meeting for ratifying the appointment of existing auditor

2. At the Annual General Meeting the appointment of auditors not ratified by the members  

3. Adjourn the Annual General Meeting

4. Conduct audit committee / board meeting (@ shorter notice) for recommending the appointment of another auditor

5. At the adjourned meeting appoint another auditor

6. File ADT-1 intimating appointment of another auditor.

    

   Could this be so simple??....

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Best Regards
Prathima
Company Secretary