FDF Company, an unlisted public company had paid-up share capital of ₹51 crore and turnover of ₹150 crore during the preceding Financial Year (FY) 2022-23. The company had outstanding loans and borrowings of ₹100 crore &

Under section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014, every unlisted public company having: Paid up share capital of ₹50 crore or more during the preceding financial year; or Turnover of ₹200 crore or more during the preceding financial year; or Outstanding loans and borrowings from banks or public financial institutions exceeding ₹100 crore or more at any point of time during the preceding financial year; or Outstanding deposits of ₹25 crore or more at any point of time during the preceding financial year shall appoint an internal auditor. In the given question: Paid up Capital is ₹51 crore which is more than ₹50 crore during the preceding financial year; Turnover is of ₹150 crore which is less than ₹200 crore during the preceding financial year; and Outstanding loans and borrowing of ₹100 crore and outstanding deposits of ₹25 crore as on 31st March, 2023. As Rule 13(1)(b)(iii) & Rule 13(1)(b)(iv) states that outstanding loans and borrowings and outstanding deposits exceeding the certain limit at any point of time during the preceding Financial year requires to comply with provisions of internal audit. Even though the loans and borrowings & deposits were not outstanding during the preceding full previous year and were outstanding only for one day that too on the last day of the F.Y. i.e. on 31st March 2023, the conditions mentioned at (iii) and (iv) are satisfied, as the said conditions refers to "at any point of time during the preceding financial year". Conclusion: As the conditions specified in (i), (iii) and (iv) mentioned above are satisfied, FDF Company has to appoint an internal auditor. The stand of the company is incorrect.