Subsidiary Accounts explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A shareholder who receives only consolidated numbers cannot see which subsidiary is losing money. The website requirement is the answer.
The requirement
As per fourth proviso to Section 136(1) of the CA 2013, every company having a subsidiary or subsidiaries shall place separate audited accounts in respect of each of its subsidiary on its website, if any. Therefore, there is no requirement of placing standalone financial statements of associates/joint ventures on the website of the company.
Consolidation is informative and concealing at the same time. It shows the group as one economic entity — and in doing so it nets a profitable subsidiary against a loss-making one, merges borrowings of very different quality, and hides where within the group the value and the risk actually sit.
A member reading only consolidated figures cannot tell whether the group's profit came from the core business or from one unusual subsidiary, or which entity carries the debt. Circulating full accounts of every subsidiary to every member would be impractical for a group of any size; publishing them is not.
Hence separate audited accounts in respect of each of its subsidiary on the website. Anyone who wants entity-level detail can get it, and nobody has to be sent it.
The exclusion of associates and joint ventures follows from control. A subsidiary is controlled by the company: the group decides its policies, and its results are consolidated line by line. An associate is not controlled — the company holds significant influence, accounts for it by the equity method, and often has no right to publish its accounts at all. Requiring publication would demand something the company may be unable to deliver.
The two accommodations for a foreign subsidiary address the same practical limit. Where the subsidiary is statutorily required to prepare consolidated financial statement under the law of any country, those accounts suffice. Where the foreign subsidiary is not required to audit its financial statements, the unaudited financial statement may be placed instead — because Indian law cannot compel an audit in a jurisdiction that does not require one. And if the language is not English, a translated copy of the same shall be placed on the website, since accounts nobody can read disclose nothing.
What goes up
| Entity | On the website? |
|---|---|
| Each subsidiary | Yes — separate audited accounts |
| Associate | No |
| Joint venture | No |
| Foreign subsidiary consolidating abroad | Those consolidated accounts suffice |
| Foreign subsidiary with no audit requirement | Unaudited statements accepted |
| Foreign subsidiary reporting in another language | Translated copy |
Note on currency
Section 136 and the Companies (Accounts) Rules have been amended since this FAQ was issued, including on what must be sent to members and what may be placed on the website in its place. Verify the current text of section 136 and the applicable rules before settling a group's disclosure package.
Common mistakes
- Publishing consolidated group accounts and treating that as covering the subsidiary accounts requirement.
- Placing associate and joint venture statements on the website under a mistaken reading of the proviso.
- Omitting a foreign subsidiary because its accounts are unaudited abroad.
- Uploading accounts in a language the members cannot read, without a translation.