Strong Ltd. was incorporated on 10th March, 2015 as an Indian company having registered office at Indore with six directors. It deals in manufacture of fertilizers. It has a foreign subsidiary incorporated in Korea since

Fourth proviso to section 137(1) of the Companies Act, 2013 requires that a company shall attach along with its financial statements to be filed with the Registrar, the accounts of its subsidiary(ies) which have been incorporated outside India and which have not established their place of business in India. Ministry of Corporate Affairs vide its General circular 11/2015 dated 21 July, 2015 has clarified the issue raised in question. Clarification has been sought on: Whether a company covered under above provisions can place/file unaudited accounts of a foreign subsidiary if the audit of such foreign subsidiary is not a mandatory legal requirement in the country where such foreign subsidiary has been incorporated and such audit has not been conducted. and: The matter has been examined in the Ministry and it is clarified 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 company 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. In view of the above, if Strong Ltd. decides to get the accounts of the subsidiary company incorporated in Korea audited by its own auditor, it can do so provided: The accounts of the subsidiary company abroad are translated in English, if the original accounts are not in English; and the format of accounts of foreign subsidiary 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 of Strong Ltd.