Section 228

Consolidated financial statements.—(1) There shall be attached to the financial statements of a holding company having a subsidiary or subsidiaries, at the end of the financial year at which the holding company’s financial statements are made out, consolidated financial statements of the group presented as those of a single enterprise and such consolidated financial statements shall comply with the disclosure requirements of the relevant Schedule and financial reporting standards notified by the Commission:

Provided that nothing in this sub-section shall apply to a private company and its subsidiary, where none of the holding and subsidiary company has the paid-up capital exceeding one million rupees.

(2) Where the financial year of a subsidiary precedes the day on which the holding company’s financial year ends by more than ninety days, such subsidiary shall make an interim closing, on the day on which the holding company’s financial year ends, and prepare financial statements for consolidation purposes.

(3) Every auditor of a holding company appointed under section 246 shall also report, in the specified form, on consolidated financial statements and exercise all such rights and duties as are vested in him under sections 248 and 249 respectively.

(4) There shall be disclosed in the consolidated financial statements any note or saving contained in such accounts to call attention to a matter which, apart from the note or saving, would properly have been referred to in such a qualification, in so far, the matter which is the subject of the qualification or note is not covered by the holding company’s own accounts and is material from the point of view of its members.

(5) Every consolidated financial statement shall be signed by the same persons by whom the individual financial statements of the holding company are required to be signed, under section 232.

(6) All provisions of sections 223, 233, 234, 235 and 236 shall apply to a holding company required to prepare consolidated financial statements under this section as if for the word “company” appearing in these sections, the words “holding company” were substituted.

(7) The Commission may, on an application of a holding company, direct that the provisions of this section shall not apply to such extent as may be specified in the direction.

(8) Any contravention or default in complying with requirements of this section shall be an offence liable to a penalty of level 2 on the standard scale.