Companies with subsidiaries shall prepare Consolidated Financial Statement   Section 129 of the Companies Act, 2013 lays down that the financial statements shall give a true and fair view of the state of affairs of the Company. All companies shall comply with the Accounting Standards and the format of those financial statements shall be as per Schedule III of CA, 2013. For companies having one or more subsidiaries shall prepare a consolidated financial statement. Such statements are mandated by Sub Section (3) of Section 129 of the Companies Act, 2013. Companies with subsidiaries shall prepare Consolidated Financial Statement.   Applicability of Consolidated Financial Statement (CFS):

• Private Limited Company
• Public Unlisted Company and
• Listed Company

  Note: Subsidiary includes Associate Companies and Joint Ventures both in India and Foreign country.   Accounting Standard (AS) 21, Consolidated Financial Statements, shall be applied in preparation of consolidated financial; statement of a company.

• This Standard should be applied in the preparation and presentation of consolidated financial statements for a group of enterprises under the control of a parent.
• This Standard should also be applied in accounting for investments in subsidiaries in the separate financial statements of a parent.
• In the preparation of consolidated financial statements, other Accounting Standards also apply in the same manner as they apply to the separate financial statements.

  Note: Control: (a)   the ownership, directly or indirectly through subsidiary(ies), of more than one-half of the voting power of an enterprise; or (b)   control of the composition of the board of directors in the case of a company or of the composition of the corresponding governing body in case of any other enterprise so as to obtain economic benefits from its activities.   In case of non-Compliance of Accounting Standards: The Company shall disclose in its financial statements with regard to any deviation from the accounting standards along with the reasons for such deviation and the financial effects, if any arising out of such deviation.   Where a company is required to prepare Consolidated Financial Statements, the company shall mutatis mutandis follow the requirements of the Schedule III as applicable to a company in the preparation of balance sheet and statement of profit and loss. In addition, the consolidated financial statements shall disclose the information as per the requirements specified in the applicable Accounting Standards including the following: (i)     Profit or loss attributable to “minority interest” and to owners of the parent in the statement of profit and loss shall be presented as allocation for the period. (ii)   “Minority interests” in the balance sheet within equity shall be presented separately from the equity of the owners of the parent.   Note: Minority interest is that part of the net results of operations and of the net assets of a subsidiary attributable to interests which are not owned, directly or indirectly through subsidiary(ies), by the parent.   Schedule III provides an option to an entity to disclose the list of subsidiaries or associates or joint ventures which have not been consolidated in the consolidated financial statements along with the reasons of not consolidating.   Penal Provisions for non-compliance of section 129 of CA, 2013: If any company contravenes with the provisions of section 129 of CA, 2013, the following officials viz,

• Managing Director
• Whole Time Director in charge of finance
• Chief Financial Officer
• Any other person authorized by Board with the duty of complying with this provision
• In the absence of any of the officers mentioned above, all the Directors shall be punishable.

  Details of Punishments: (i)     Imprisonment for a term which may extend to one (1) year or (ii)   Fine which shall not be less than Rs. 50,000/- but which may extend to Rs. 5,00,000/- or (iii)With both.  _____________________________________________________________________________