25 July 2012
Is it necessary for a Holding Company to consolidate its subsidiary's accounts in the unaudited financials to be submitted in the board meeting?
Yes, for listed company, as per clause 41 of listing agreement:
41. The company agrees to comply with the following provisions:
I) Preparation and Submission of Financial Results
a) The financial results filed and published in compliance with this clause shall be prepared on the basis of accrual accounting policy and in accordance with uniform accounting practices adopted for all the periods. b) The company shall submit its quarterly, year to date and annual financial results to the stock exchange in the manner prescribed in this clause. c) The company has an option either to submit audited or unaudited quarterly and year to date financial results to the stock exchange within forty-five days of end of each quarter (other than the last quarter), subject to the following: (i) In case the issuer opts to submit unaudited financial results, they shall be subjected to limited review by the statutory auditors of the issuer (or in case of public sector undertakings, by any practicing Chartered Accountant) and such limited reviewed results (financial results accompanied by the limited review report) shall be submitted within forty-five days from the end of the quarter. (ii) In case the company opts to submit audited financial results, they shall be accompanied by the audit report. d) The issuer shall submit audited financial results for the entire financial year, within sixty days of the end of the financial year. The issuer shall also submit the audited financial results in respect of the last quarter alongwith the results for the entire financial year, with a note that the figures of last quarter are the balancing figures between audited figures in respect of the full financial year and the published year to date figures upto the third quarter of the current financial year e) If the company has subsidiaries, - (i) it may, in addition to submitting quarterly and year to date stand alone financial results to the stock exchange under item (c) i.e. within forty-five days of the end of the quarter, also submit quarterly and year to date consolidated financial results within forty-five days from the end of the quarter; and (ii) while submitting annual audited financial results prepared on stand-alone basis under item (d), it shall also submit annual audited consolidated financial results to the stock exchange within sixty days from the end of the financial year.
26 July 2012
Sir, as per clause 41 I (e), while submitting quarterly results the consolidation is only optional as the word " may " is used. And in case of annual audited balance sheet it is mandatory as the word "shall" is used.
Please correct me if I am interpreting it wrongly.
Yes, it is not mandatory but as a good corporate practice, if the company have subsidiary company then, for shareholders it is required to give consolidated result also in addition to standalone.
CAclubindia
