Section 138
Internal Audit
[Section 138 and refer rule 13 of Chapter IX Companies (Accounts) Rules, 2014]
The following class of companies shall be required to appoint an internal auditor or a firm of
internal auditors, namely –
(a) Every listed company
(b) Every unlisted Public company having –
(i) Paid up share capital of rupees greater than 50 crore during the preceding financial
year; or
(ii) Turnover of Rupees greater than 200 crore rupees during the preceding financial
year; or
(iii) Outstanding loans or borrowings from banks or public financial institutions of rupees
greater than 100 crore at any point of time during the preceding financial year; or
(iv) Outstanding deposits of rupees greater than 25 crore at any point of time during the
preceding financial year; and
(c) Every private company having –
(i) Turnover of rupees greater than 200 crore during the preceding financial year; or
(ii) Outstanding loans or borrowings from banks or public financial institutions of rupees
greater than 100 crore at any point of time during the preceding financial year.
Transition period:
An existing company covered under any of the above criteria shall comply with the
requirements of section 138 and this rule within six months of commencement of such
section.
Section 177
Audit Committee
Applicable:
(i) Every listed company or
(ii) Other class of companies :
a) All public companies with a paid-up capital or rupees 10 crore or more
b) All public companies having turnover of rupees 100 crore or more
c) All public companies, having in aggregate outstanding loans or borrowings or
debentures or deposits of rupees exceeding rupees 50 crore or more
Constitution of Audit Committee:
Minimum of 3 (three) directors with independent directors forming a majority. Majority of
members including chairperson should be able to read and understand the financial
statement.
Commencement:
Commencement from 01-04-2014.

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