Appointment of Auditors not ratified at the General Meeting

10.1 The Explanation to Rule 3(7) of Companies (Audit and Auditors) Rules, 2014 states that if the appointment is not ratified by the members of the company, the Board of Directors shall appoint another individual or firm as its auditor following the procedure laid in the Act. The Committee has recommended for removal of the ratification requirement. Consequential changes only would be required once the change is carried out.

Auditor appointment ratification removed - board may reappoint auditors under statutory procedure following proposed rule amendments. Removal of the member ratification requirement for auditor appointments is proposed, replacing the current mechanism under which the Board of Directors must appoint another auditor if members do not ratify; only consequential amendments to the Rules would follow.