SDF Ltd. an unlisted company has shared the following financial data for the F.Y. 2024-25: Equity Paid-up capital 48 crore Turnover 195 crore…

(a) (i) According to the provisions of section 138 of the Companies Act, 2013, read with Rule 13 of the Companies (Accounts) Rules, 2014, the following class of companies shall be required to appoint an internal auditor which may be either an individual or a partnership firm or a body corporate, namely: (1) Every listed company; (2) Every unlisted public company having: (A) Paid up share capital of 50 crore rupees or more during the preceding financial year; or (B) Turnover of 200 crore rupees or more during the preceding financial year; or (C) Outstanding loans or borrowings from banks or financial institutions exceeding one hundred crore rupees or more at any point of time during the preceding financial year; or (D) Outstanding deposits of twenty-five crore rupees or more at any point of time during the preceding financial year. Referring to the above provisions we can conclude that the appointment of an Internal Auditor shall be mandatory as the loans outstanding on one instance i.e. 30.09.2024 is 100.59 crore, which is above - 100.00 crore, as mandated in the above provisions for compulsory appointment of an Internal Auditor. (ii) Section 138 (1) provides that such class or classes of companies as may be prescribed shall be required to appoint an internal auditor, who shall either be a chartered accountant or a cost accountant, or such other professional as may be decided by the Board to conduct internal audit of the functions and activities of the company. Explanation to Rule 13 (1) of Companies (Accounts) Rules, 2014 provides that the internal auditor may or may not be an employee of the company. In terms of the above provisions, Mr. G can be appointed as an internal auditor of the Company.