Sourav, Soumyadip, Sucharita and Sohini are four directors of Supershine Detergents Ltd. They decided to convene a meeting on 20th February, 2025 to discuss, consider and solve some issues the company is facing in the co

The Companies Act, 2013 has introduced the system of rotation of auditors under section 139(2) of the Act and rule 5 of the Companies (Audit and Auditors) Rules, 2014, which is applicable to: all listed companies; all unlisted public companies having paid up share capital of rupees 10 crore or more; all private limited companies having paid up share capital of rupees 50 crore or more; all companies having paid up share capital of below threshold limit mentioned in (a) and (b) above, but having public borrowings from financial institutions, banks or public deposits of rupees 50 crore or more; The concept of rotation of auditors shall not apply to one-person companies and small companies. All the companies mentioned above shall not appoint or re-appoint an individual as an auditor of the company for more than one term of 5 consecutive years. An individual auditor, who has completed his term of 5 consecutive years, shall not be eligible for re-appointment as auditor in the same company for 5 years from the date of completion. In light of the above Supershine Detergents Private Ltd. is not a 'small company'. Being a private company, it has borrowings from financial institutions worth ₹60 crore which is higher than ₹50 crore and thus is hit by the mandatory rotation provisions of auditors. Accordingly, S. Nagori & Associates who has acted as auditor for five years from FY 2019-20 to end on FY 2023-24 cannot be reappointed as statutory auditor in the company for FY 2024-25 though audit committee is happy with auditor's performance.