Registered independent director Past Ch
8229 Points
Joined March 2007
Fourth proviso to Sec.139(1) requires ADT.1 to be filed for "appointment" of auditor at AGM. First proviso to this section requires ratification of appointment at every AGM. The provison relating to ratification is meaningless. Ratification is done when some other authority has done something beyond its powers, but which was within powers of the authority ratifying the same. For example, Board can approve excess payment of remuneration to a director subject to ratification by members in general meeting. However, in this case authority appointing the auditors and the authority ratifying the appointment is the same, i.e. the shareholders and hence requirement of ratification is meaningless. Realising this, MCA is now removing provision of ratification vide Companies (Amendment) Bill 2016.
In any case, ratification is not appointment and there is no need to file ADT.1 every year.