24 November 2017
It is a pvt limited company and section 139(2) applicable ( borowing exceed Rs. 50 crores) on 01.04.2014 ( ie the provision from enactment of companies act 2013. I know section 139(2) will be applicable when subsequently the condition(s) satisfied by pvt limited company.
My query is subsequently the company fall below paid up capital ie Rs. 20 crores (present limit Rs. 50 crores) or turnover below Rs. 50 crores, say year ended 31.03.2017 (ie the end of transaction period) , how we make auditor appointment whether according to section 139(2) or 139(1).
My second query is if 139(1) applicable, whether retiring auditor is eligible for reappoin ment? ,
if eligible whether for 2 years (ie the balance period from the act 2013 applicable) or fresh period of five years.
05 December 2017
Section 139(2) read with Rule, 5 of C(A&A), Rule, 2014, deals with the rotation of auditor if any of the condition mentioned in the said rule is satisfied and in above query, condition of borrowing is being touched (as borrowing is above 50cr at present), so provision of rotation of auditor shall apply (i.e. Sec. 139(2)). Ans1. Auditor shall be appointed as per section 139(2).
As per the explanation of section 139(1), Appointment includes reappointment.
Ans 2. He/it is eligible for reappointment subjected to the provision of 139(2) i.e. it depends on the point how long the concerned auditor have been with the company as an auditor continuously in recent past, because transition of 3 year from 1.4.1014 has been provided by Law so it needs to be checked and he/it can be reappointed for the remaining period (remaining period from 5 year /10 year as the case may be), but once the maximum period of 5 year (one term including transition period) in case of individual or 2 terms of 5 years in case of audit firm, has been completed, he/it can not be reappointed for next five years (cooling period).
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