One of the independent directors sought information regarding the appointment of internal auditors for the following Group Companies in accordance…

As per section 138 of the Companies Act, 2013, following class of companies (prescribed in Rule 13 of the Companies (Accounts) Rules, 2014) shall be required to appoint an internal auditor or a firm of internal auditors, namely:- (I) every listed company; (II) every unlisted public company having- (i) paid up share capital of fifty crore rupees or more during the preceding financial year; or (ii) turnover of two hundred crore rupees or more during the preceding financial year; or (iii) outstanding loans or borrowings from banks or public financial institutions exceeding one hundred crore rupees or more at any point of time during the preceding financial year; or (iv) outstanding deposits of twenty five crore rupees or more at any point of time during the preceding financial year; and (III) every private company having- (i) turnover of two hundred crore rupees or more during the preceding financial year; or (ii) outstanding loans or borrowings from banks or public financial institutions exceeding one hundred crore rupees or more at any point of time during the preceding financial year. In the given case, AKR Limited is unlisted public company. The company is having 70crore as equity share capital which is exceeding the prescribed limit of rupees fifty crore as per section 138. Thus, AKR Limited is required to appoint an internal auditor as per section 138 of the Companies Act, 2013. Further, TAK Limited is an unlisted private company and having 90crore as equity share capital,195 crore as turnover and 98crore loan from Bank and PFI. In view of provisions of section 138 of the Companies Act, 2013 discussed above, all the limits are below the prescribed limit for a private company. Therefore, TAK Limited is not required to appoint an internal auditor. Furthermore, PRM Limited is a listed company and as per section 138 of the Companies Act, 2013, every listed company is required to appoint an internal auditor or a firm of internal auditors. Thus, in view of the above, PRM Limited is required to appoint an internal auditor. In view of above, it can be concluded that AKR Limited and PRM Limited are required to appoint the internal auditor as per the provisions of the Companies Act, 2013 whereas TAK Limited is not required to do the same.