Query for Consolidate Financial Statement

[Navneet Rathal]

Dear Professionals,

I have some doubts/query for consolidation of financial statements.

One of my client have Pvt. Ltd Company in India and there are only two directors and whole shares hold by these directors. Further the above directors formed new company in US (Foreign Country) and both hold 25-25% voting power and both are the directors in the same company and Indian Company hold 50% voting power in US based company and management of both companies are same. There is no concept of minimum capital as per law of such foreign country and company has not made any capital contribution or financial transactions with such foreign company till date.

Please clarify the the following doubts:

1. Is it necessary to consolidate the financial statement of both companies ?
2. Is is necessary to consolidated the financial statement of associate company ?
3. Will the foreign company be treated as an associate company or a subsidiary company ?

Thanks & Regards,

CS Navneet Rathal 

Rathal & Associates, Company Secretaries 

Address: Flat No. 11, Radharam Krushna Building, Second Floor, Near Tilak Smarak Mandir, Gopal Gyan Samaj Lane, Pune - 411030, Maharashtra, India.

Contact No.:  +91 9166263177, 9928763177

Email: csnavneet...@gmail.com