Consolidation of financial statement (cfs)

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CA Shraddha Vora (Querist)
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09 September 2016 We have a group of 4 companies out of which 3 are unlisted public company and 1 private company which are associates of each other, the question is whether consolidation is applicable to all these companies u/s 129 (3) of the Companies Act, 2013 and the Rule 6 of Companies (Accounts) Rules, 2014? As per amendment dated 27.07.2016 the Companies are exempted to prepare CFS if the following conditions are satisfied -

(i) it is a wholly-owned subsidiary, or is a partially-owned subsidiary of another company and all its other members, including those not otherwise entitled to vote, having been intimated in writing and for which the proof of delivery of Such intimation is available with the company, do not object to the company not presenting consolidated financial statements;
(ii) it is a company whose securities are not listed or are not in the process of listing on any stock exchange, whether in India or outside India; and
(iii) its ultimate or any intermediate holding company files consolidated financial statements with the Registrar which are in compliance with the applicable Accounting Standards.”

in our case there is no holding subsidiary relation so should we prepare CFS? Because the Section 129 (3) states that for the purpose of this sub section the word subsidiary shall include associate company and joint venture.

Pratik Shah

Pratik Shah (Expert)
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09 September 2016 Yes, considering the fact you have given and provisions of Companies Act, each of your company shall consolidate accounts of its associate company. Thanks.