As per the provisions of clause (a) of fourth proviso to section 136(1) which require every company having a subsidiary or subsidiaries to place on its website, if any, separate audited accounts in respect of each of its subsidiary,
Further, fourth proviso to section 137(1) requires that a company shall attach along with its financial statements to be filed with the Registrar of Companies, the accounts of its subsidiary(ies) which have been incorporated outside India and which have not established their place of business in India.
Clarification has been sought on –
(a) Whether a company covered under above provisions can place/file unaudited accounts of a foreign subsidiary if the audit of such foreign subsidiary is not a mandatory legal requirement in the country where such foreign subsidiary has been incorporated and such audit has not been conducted
and
(b) Whether accounts of such foreign subsidiary would need to be as per format under Schedule III/Accounting Standards or the format as per country of incorporation of the foreign subsidiary would be sufficient.
It is clarified that in case of a Foreign subsidiary, which is not required to get its accounts audited as per legal requirements prevalent in the country of its incorporation and which does not get such accounts audited, the holding/parent Indian may place/file such unaudited accounts to comply with requirements of Section 136(1) and 137(1) as applicable. These, however would need to be translated in English, if the original accounts are not in English.
Further, the format of accounts of foreign subsidiaries should be, as far as possible, in accordance with requirements under Companies Act, 2013. ln case this is not possible, a statement indicating the reasons for deviation may be placed/held along with such accounts.
Read the full Circular dated 21.07.2015 @ http://www.mca.gov.in/Ministry/pdf/General_Circular_11-2015_21072015.pdf
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