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CS Executive · Corporate Accounting and Financial Management · Introduction to Corporate Accounting

Which statement about section 129 of the Companies Act, 2013 is correct?

A company with one or more subsidiaries must, besides its standalone statements, prepare consolidated financial statements of itself and its subsidiaries in the same form and manner as its own, and lay them before the annual general meeting along with the standalone statements, as required by section 129(3).

  1. AWhere a company has subsidiaries, it must also prepare a consolidated financial statement in the same form and manner as its own, to be laid before the annual general meetingCorrect
  2. BConsolidated financial statements need not be laid before the annual general meeting if the standalone statements are laid
  3. CSection 129 applies without exception to banking and insurance companies, which must use Schedule III
  4. DFinancial statements must give a true and fair view only for companies with subsidiaries

Explanation

Section 129(3) requires a company with one or more subsidiaries to prepare a consolidated financial statement in the same form and manner as its own and lay it with the standalone statements at the AGM. The second proviso to section 129(1) excludes insurance, banking and electricity companies from the Schedule III form, so that option is wrong.

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