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Financial details of arms: DCA against waiver

Richa Mishra

NEW DELHI, March 17

THE Department of Company Affairs (DCA) is not in favour of doing away with the current requirement of enclosing the financial statements of subsidiaries along with that of the holding companies in the latter's annual reports.

"The Department had been receiving applications from public sector undertakings (PSUs) as well as multinationals for such exemptions. DCA has been taking decisions on these exemptions on case-to-case basis," sources told Business Line.

Section 212 of the Companies Act, 1956 provides that the balance sheet of holding company will include certain particulars as to its subsidiaries including the balance sheet of the subsidiary, profit and loss account, report of the board of directors and auditor reports. "Cases where the situation has been beyond the control of the company, the Department has been using its discretion and granting exemptions," sources said.

One of the excuses of the companies has been that attachment of these documents makes the annual report more heavy and involves high costs.

Brushing aside the excuses, professionals say that anyway the companies have to prepare balance sheets for the individual companies before they are consolidated, and therefore, attachment of the accounts should not pose any problem.

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