Under the Indian Companies Act, it is generally required to hold an Annual General Meeting (AGM) within 6 months from the financial year-end (Sec. 96: Companies Act). Similarly, as in other countries, companies are mandated to submit the prepared financial statements to the AGM (Sec. 129(2): Companies Act).
However, Indian companies are generally obligated to prepare consolidated financial statements (Sec. 129(3): Companies Act). Additionally, even non-listed companies are required to undergo audits as a standard practice (Sec. 143: Companies Act). This is the background for Japanese subsidiaries with a parent company in India sometimes undergoing audits.
(However, “Small Companies” are exempt from the audit obligation. As per the recent Companies Act, Small Companies are defined as companies with (1) paid-up share capital of 20 million rupees or less or (2) turnover of 200 million rupees or less. Please note that the Indian Companies Act was amended in 2021, so it is essential to keep abreast of the latest information.)
Based on the above provisions, if the Indian parent company is of considerable size, it will generally be subject to mandatory auditing by a Chartered Accountant (CA) in India. Since the preparation of consolidated financial statements is also required, Japanese subsidiaries, related companies, and joint ventures often need to undergo audits.
At our firm, we conduct audits for such Japanese subsidiaries of Indian-based companies while coordinating with the auditors of the parent company. We also provide consultations and estimates, so please feel free to contact us.
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Our Advantageous Points
・A certified public accountant with experience in auditing a Japanese subsidiary of a major audit firm handles the engagement.
・They offer flexible advice on accounting standards such as IFRS and US-GAAP.
・They also cater to requests for reporting and explanations in English.
・The level of service provided is comparable to that offered by major audit firms.
・Due to a small and efficient team, the workload is minimized, resulting in reasonable audit fees.