Mandatory Consolidated Financial Statements as per Companies Act 2013

Under the new provisions of Companies Act 2013, any holding company (private or listed) shall prepare a Consolidated Financial Statement of the company alongwith its subsidiaries, associates and joint ventures and lay before the AGM. The earlier Companies Act only mandated listed companies to publish consolidated accounts.

The Financial Statement shall be in the form as provided in Schedule III which is in line with Revised Schedule VI.

In case subsidiaries, associates or JV’s have not been considered for consolidation, the same have to be disclosed alongwith reasons for non consolidation.

Companies should seriously evaluate the possibility of automating their process for preparing standalone and consolidated financial statements:

  • To ensure data consistency between internal MIS statements and other financial statements
  • For speeding up time consuming manual process in completing statutory audits and preparation of final consolidated reports
  • For correct treatment of complex consolidation related calculations – viz. Minority Interests, Goodwill Calculation, Intercompany eliminations, Foreign Exchange translation etc.
  • For standardisation of multi-geography reporting (e.g. Sch VI, US GAAP, IFRS etc.)
  • For having one unified system for internal and external financial reporting
  • To discover opportunities and improvement areas through flexible analytics and customisable management reporting