Under Section 139 of the Companies Act, 2013, a retiring auditor may be re‐appointed subject to several conditions. The key conditions are as follows:

1. Eligibility and Non-Disqualification:
   The auditor must satisfy the eligibility criteria laid down under Section 141—that is, he must not be disqualified from appointment (for example, by virtue of being connected with the company in a manner that compromises independence).

2. Appointment by Shareholders at the General Meeting:
   The re‐appointment of a retiring auditor is made in the general meeting of the company. The shareholders must approve the re‐appointment by passing an ordinary resolution.

3. Consent of the Auditor:
   The auditor must furnish his consent to be re‐appointed. This consent must be in accordance with the prescribed forms and requirements.

4. Compliance with the Company’s Articles and Regulatory Provisions:
   The re‐appointment must be consistent with the company’s Articles of Association as well as any applicable regulations (for example, SEBI regulations in the case of listed companies). For listed companies, additional recommendations by the Audit Committee may be required.

5. Term and Rotation Provisions:
   The auditor is typically appointed for a term of five years. In case of re‐appointment for a second term (or beyond, where permitted by law), the auditor’s continued independence and the statutory rotation requirements must be adhered to.

Relevant Provisions

• Section 139(3) of the Companies Act, 2013:
  This section deals with the appointment and re‐appointment of auditors at the general meeting. It implies that the re‐appointment of the retiring auditor is subject to ratification by the shareholders through an ordinary resolution.

• Section 141 of the Companies Act, 2013:
  This section lists the disqualifications for appointment as auditor. The auditor must not fall under any of the disqualifications specified here to be eligible for re‐appointment.