Comment on the following: Consolidation of financial statements is mandatory for all companies including unlisted companies and private companies.

The Companies Act, 2013 has made preparation of consolidated accounts mandatory for all companies including unlisted companies and private companies having one or more subsidiaries or associates or joint ventures. In accordance with the provisions of the Companies Act, 2013, as contained in section 129(3), where a company has one or more subsidiaries or associates or joint ventures, it shall, in addition to its financial statements for the financial year, prepare a consolidated financial statement of the company and of all the subsidiaries or associates or joint ventures in the same form and manner as that of its own which shall also be laid before the annual general meeting of the company along with the laying of its financial statements, a separate statement containing the salient features of the financial statements of its subsidiaries or associate(s) or joint venture(s) in Form AOC-1(Rule 5). However, for intermediate holding company, the provisions of Rule 6 of Companies (Accounts) Rules, 2014 inter alia provide certain conditions, compliance of which ensures exemption from consolidation of accounts to such intermediate holding company. These conditions are :- intimation to all members for not consolidating the accounts, shares being unlisted or not in process of listing on any stock exchanges and filing of consolidated financial statement by the ultimate Indian holding company whose 100% subsidiary is the intermediate holding company.