8th September 2015
Dear Members
ABC Private Limited is a private limited company with paid up capital of Rs.1.00 lac. There is no operation and there is no income for the past ten years. ABC Private Limited is deemed to be a "Small Company" as defined under Section 2(85) of the Companies Act, 2013.
ABC Pvt Ltd has invested in two other companies "X" Pvt Ltd and "Y" Pvt Ltd. The percentage of holding is 21.70% and 20% respectively. In view of the above shareholding ABC, X and Y are deemed to be associate companies as defined under Section 2(6) of the Companies Act, 2013.
My query is whether ABC Private Limited has to prepare "Consolidated Financial Statements" in respect of its associates X pvt ltd and Y pvt ltd and attach the same with its own financial statements for year ended 31st March 2015.
On plain reading of Section 129 it appears, ABC need not prepare consolidated financial statement. But the explanation given to Sub-Section 3 of Section 129 is confusing and is leading to my above query.
with regards
Muralidharan
CAclubindia
