Consolidated Financial includes particulars of subsidiaries: 186. Balance sheet of holding company to include certain particulars as to its subsidiaries
:-(1) There shall be
attached to the balance sheet of a holding company having a subsidiary or subsidiaries as the end of the financial year as at
which the holding company's balance sheet is made out, the following documents in respect of such subsidiary or each such
subsidiary, as the case may be-
(a) a copy of the balance sheet of the subsidiary;
(b) a copy of the its profit and loss account;
(c) a copy of the report of its Board of Directors;
(d) a copy of the report of its auditors;
(e) a statement of the holding company's interest in the subsidiary as specified in sub-section (6);
(f) the statement referred to in sub-section (80, if any; and
(g) the report referred to in sub-section (9), if any.
(2) The balance sheet referred to in clause (a) of sub-section (1) shall be made out in accordance with the requirement of
this Act as at the end of the financial year of the subsidiary next before the day as at which the holding company's balance
sheet is made out.
(3) The profit and loss account and the reports of the Board of directors and of the auditors referred to in clause (b), (c) and
(d) of subsection
(1) shall
be made out in accordance with the requirements of this Act for the financial year of the
subsidiary referred to in sub-section (2).
(4) the financial year aforesaid of the subsidiary shall not end on a day which the holding company's financial year ends by
more than six months.
(5) Where the financial year of subsidiary is shorter in duration than that of its holding company, reference to the financial
year of the subsidiary in sub-sections (2), (3) and (4) shall be construed as reference to two or more financial years of the
subsidiary the duration of which, in the aggregate is not less than the duration of the holding company's financial year.
(6) The statement referred to in clause (e) of sub-section (1) shall specify-
(a) The extent of the holding company's interest in the subsidiary at the end of the financial year or at the end of the last of
the financial years of the subsidiary;
(b) the net aggregate amount, so far as it concerns members of the holding company and is not dealt with in the company's
accounts, of the subsidiary profits after deducting its losses or vice-versa-
(i) for the financial year or years of the subsidiary as aforesaid; and
(ii) for the previous financial years of he subsidiary since it became the holding company's subsidiary;
(c) the nest aggregate amount of the profits of the subsidiary after deducting its losses or vice-versa-
(i) for the financial year or years of the subsidiary as aforesaid; and
(ii) for the previous financial years of the subsidiary since it become the holding company's subsidiary;
so far as those profits are dealt with, or provision is made for those losses, in the company's accounts.
(7) Clauses (b) and (c) of sub-section (6) shall apply only to profits and losses of the subsidiary which may properly be
treated in the holding company's accounts as revenue profits or losses; and profits or losses attributable to any other of its
subsidiaries shall not, for that or any other purpose, be treated as aforesaid so far as they are profits or losses for the period
before the date of or as from which the shares were acquired by the company or any of its subsidiaries, except that they may
in a proper case be so treated where-
(a) the holding company is itself he subsidiary of another body corporate; and
(b) the shares were acquires from that body corporate or a subsidiary of this.
Explanation:- For the purpose of determining whether any profits or losses are to be treated as profits or losses for the said
period, the profits or loss for any financial year of the subsidiary may, if it isn't practicable to apportion it with reasonable
accuracy by reference to the facts, be treated as accruing from day to day during that year and be apportioned accordingly.
(8) Where the financial year or years of a subsidiary referred to insub-section (5)) do not coincide with the financial year of
the holding company, a statement containing information on the followingmaters had also to be attached to the balance
sheet of the holding company:-
(a) whether there had been any changes and, if so what change took place in the holding company's interest in the
subsidiary between the end of the financial year or of the last of the financial years of the subsidiary and the end of the
holding company's financial year;
(b) details of any material change, which have occurred between the end of the financial year or of the last of the financial
years of the subsidiary and the end of the holding company's financial year in respect of
(i) the subsidiary's fixed asset;
(ii) its investments;
(iii) the moneys borrowed by its for nay purpose other than that of meeting cured liabilities.
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