Indian Ministry of Corporate Affairs on 21st July 2015 came out with another clarification in form of General Circular 11 of 2015.
According to clause (a) of fourth proviso to Section 136(1), every company having a subsidiary or subsidiaries shall,—
(a) place separate audited accounts in respect of each of its subsidiary on its website, if any;
(b) provide a copy of separate audited financial statements in respect of each of its subsidiary, to any shareholder of the company who asks for it.
Further, According to fourth proviso to Section 137(1), a company shall, along with its financial statements to be filed with the Registrar, attach the accounts of its subsidiary or subsidiaries which have been incorporated outside India and which have not established their place of business in India.
Now, Para 2.2 of this circular clarify 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 in case this is not possible, a statement indicating the reasons for deviation may be placed/filed along with such accounts.
- If in county of incorporation of subsidiary does not require audit, audited financial statements are not required to place or file under these section.
- Accounts need to be placed in English if not originally in English.
- Format of Accounts should be as per the Companies Act, 2013
- Any reason for deviation should also be placed/filed.
This circular interprets expressed provision of the Act in some other way beyond its authority. Matter dealt herein should be placed in the Companies Act itself.
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