Fact: ABC Pvt Ltd and DEF Pvt Ltd have same Directors and same shareholders
Now I want to know that whether the company is required to prepare its consolidated financial statement.
Reference to queries are as below:
Section 129(3) has been substituted via Company Amendment Act, 2017 with the following clause
Where a company has one or more subsidiaries or associate companies, it shall, in addition to financial statements provided under sub-section (2), prepare a consolidated financial statement of the company and of all the subsidiaries and associate companies in the same form and manner as that of its own and in accordance with applicable accounting standards, which shall also be laid before the annual general meeting of the company along with the laying of its financial statement under sub-section (2):
Provided that the company shall also attach along with its financial statement, a separate statement containing the salient features of the financial statement of its subsidiary or subsidiaries and associate company or companies in such form as may be prescribed
Section 2(6): Associates company in relation to another company means a company in which that other company has significant influence, but which is not a subsidiary company having such influence and includes a joint venture
Explanation- Significant influence means control of atleast twenty percent of total voting power, or control of or participation in business decisions under an agreement;
Section 2(27): Control shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner.
Please advice.
CAclubindia
