ACCOUNTING STANDARD- 21

CONSOLIDATED FINANCIAL STATEMENT

OBJECTIVE
To formulate principles and procedures for preparation and presentation of CONSOLIDATED FINANCIAL STATEMENT. Consolidated financial statements are intended to present financial information about a parent and its subsidiary as a single economic entity to show the economic resources controlled by the group, the obligations of the group and results the group achieves with its resources.

SCOPE
Applicable to following enterprises: Group of enterprises under the control of a parent. Investments in subsidiaries. Excluded cases: Amalgamation Investments in associates Investments in Joint Venture

DEFINITIONS
More than one-half of the voting power of an enterprise;
or Control of the composition of Board of Directors in the case of company so as to obtain economic benefits from its activities.

COMPOSITION OF CONSOLIDATED FINANCIAL STATEMENT

Consolidated statement of profit and loss, Consolidated Balance sheet, Notes, additional statements and explanatory material that outline an essential part thereof Consolidated cash flow statement, if parent company presents its own cash flow statement. NOTE: The consolidated financial statements are presented, to the extent possible, in the same format as adopted by the parent for its separate financial statement.

SCOPE OF CONSOLIDATED FINANCIAL STATEMENT

The consolidated financial statements are compiled on the basis of financial statements of PARENT and all enterprises that are controlled by the parent. The consolidated financial statement of a parent organization should encompass all the subsidiaries, both domestic and foreign companies.

However, the parent shall not include its subsidiaries when:

Control is intended to be for a short term and the subsidiary is acquired with a view to its subsequent disposal in the near future; or It operates under severe long term restrictions, which significantly impair its ability to transfer funds to the parent.

CONSOLIDATED PROCEDURES
BASIC PROCEDURE The financial statement of the parent and its subsidiaries should be combined on a ONE TO ONE BASIS by grouping together the like terms of assets, liabilities, incomes and expenses.

OTHER PROCEDURE
The Holding company should eliminate its cost of investment in each of its subsidiaries If cost of Investment > Holdings share in equity

GOODWILL
If cost of Investment < Holdings share in equity CAPITAL RESERVE

CONSOLIDATED PROCEDURES- Cont.

Minority interests in the net income should be identified and adjusted against the income of the group in order to arrive at the net income attributable to the owners of the parent; and Minority interests in the net assets should be identified and presented in the consolidated balance sheet separately from liabilities and the equity of the parents shareholders.

DISCLOSURES
The consolidated financial statements should disclose by way of a note- all subsidiaries including the name, country of incorporation or residence, proportion of ownership interest Intragroup balances and transactions and resulting unrealized profits should be wholly discarded. The financial statements used in the consolidation should be drawn up to the same reporting date.

The consolidated financial statements should disclose the following wherever applicable:
The nature of the relationship between the parent and a subsidiary The effect of the acquisition and disposal of subsidiaries on the financial position the names of the subsidiary of which reporting date is different from that of the parent and the differences in reporting dates.

 Minority interests should be presented in the consolidated balance sheet separately from liabilities and the equity of the parents shareholders. Consolidated financial statements should be prepared using uniform accounting policies. In case such uniform accounting policies cannot be incorporated in preparation of consolidated financial statements the same shall be disclosed.