Jayanta Bandyopadhyay 20 November 2024

Mca-form aoc-4 and subsidiary company as defined under clause (87) of section 2

AOC-4 requires disclosure of subsidiary company, as defined under clause (87) of section 2 .

We have a wholly owned and two step down subsidiary companies in Mauritius. Do we require to tick "Yes" , then there is no CIN.

Further, beyond wholly owned subsidiary, we do not consolidate books of accounts. Even step down subsidiaries(100% as well as 70% stake owned by our wholly owned subsidiary) books of accounts are not consodliated in Wholly owned subsidiary's accounts. Auditor simply mentions this fact. Is it tanamount to qualification / adverse remark or not?

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Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 ) 21 November 2024

Based on the information provided, it appears that your company has a wholly-owned subsidiary and two step-down subsidiaries in Mauritius.

Since these subsidiaries are not registered in India, they do not have a CIN (Corporate Identification Number). In this case, you would need to tick "Yes" in the AOC-4 form, indicating that you have subsidiary companies.

However, since the subsidiaries are not registered in India, you will not be able to provide the CIN.

Regarding the consolidation of accounts, it seems that your company does not consolidate the accounts of the step-down subsidiaries.

The auditor has simply mentioned this fact in the audit report. This may be considered a qualification or adverse remark in the audit report, as it indicates a departure from the generally accepted accounting principles (GAAP) and the Companies Act, 2013, which require consolidation of accounts of subsidiaries.

However, the impact of this qualification or adverse remark will depend on the specific circumstances and the auditor's opinion.

Additionally, you may want to consider the following: -

Review the accounting standards and regulatory requirements applicable to your company and its subsidiaries. -

Consult with the auditor to understand the reasoning behind the qualification or adverse remark.

- Evaluate the potential impact on your company's financial statements and reputation. - Consider seeking legal advice to ensure compliance with the Companies Act, 2013, and other relevant regulations.

Jayanta Bandyopadhyay 21 November 2024

Many thanks, Sir.

All step down subsidiary cos are consistently incurring losses. As these are financed by our wholly owned subsidiary. This impacts parent Co as well. Both foreign and India based auditors are simply mentioning non consolidation

Co Secretary faces a dilemma

What will be her role, when everybody is not taking call. But CS is kmp and compliance officer.