Financial statement of foreign company

All foreign company shall produce financial statement of its Indian business performances in following with schedule III or all financial year containing:

Register of charges

  • The documents is necessary to be attached in following with the conditions of chapter IX of the act.
  • Documents are describing to copies of latest combined financial statements of the parent foreign company as submitted by it to the specified authority in the country of its registration under the conditions of the law for the tine being in force in that country.
  • The certificates are not in English Language and it is assigned to a verified translation in the English language.
  • Moreover the government has mentioned or relieved various documents for any foreign company or a class of foreign companies, then submitted documents.
  • Such other documents as me be need to be attached with sub-rule (2).

Financial statement

All foreign company shall on with the financial statement need to be filed with the registrar and attach the following documents namely:

  • The declaration of related party transaction contains:
  • Name of the person in India which shall be considered to be the related party within the meaning of clause (76) of section 2 of the act of the foreign company or of any holding company or subsidiary of such foreign company or any firm in which its holding company or foreign company or its subsidiary.
  • Nature and description of transaction.
  • Nature of such relationship.
  • Reason of such transaction
  • Amount of such transaction in the year with opening, closing, highest and lowest balance during the year and conditions made if any in favour of such transactions.
  • Material occurs of such transaction on both the parties.
  • A statement of such transactions were carried out at arm’s length basis.
  • Amount written back or written off in favour of dues from or to the associated parties.
  • Any other informations of the transactions are mandatory to know the financial changes.

(b) Declaration of repatriation of profits contain:

  • Form and dates of repatriation.
  • Beneficiary of the repatriation.
  • Amount of profits repatriated in the year.
  • The components if repatriation form to a jurisdiction other than the address of the beneficiary.
  • Mode of repatriation.
  • Approval of the RBI or any other authority.

Declaration of transfer of funds (containing dividends if any) which shall, in connection of any fund transfer between the location of business of foreign company in India and any other associated party of the foreign company outside India containing its subsidiary, holding and associate company registration contain :

  • Transfer of fund and mode of receipt
  •  Date of such transfer
  • Amount of fund transferred or received
  • Benefits of such receipt or transfer
  • Confirmation of RBI or any other authority
  • The documents mentioned in this rule shall be provided to the registrar within the duration of six months of the near of financial year of the foreign company to which relates the documents.

Financial statement of foreign company

Audit of accounts of foreign company

Every foreign company shall obtain its accounts, relating to the Indian business operations provided in following with the needs of clause (a) of sub-section (1) of section 381 and rule 4, checked by performing chartered accountant in India or limited liability partnership (LLP), or a firm of doing chartered accountants.

Providing a copy of those documents to the registrar:

The government may, by notice, manage that, in the case of any foreign company or class of foreign companies, the needs of clause (a) shall not register or shall apply subject to such modifications and cases as may be mentioned in that notice.

If any such document as is specified in sub-section (1) is not in the English language, there shall be attached to it a verified translation in English language.

List of places of business of foreign company

The foreign company must be file with the registrar on with the financial statement in Form FC.3 and their fees as mentioned companies (registration offices and fees) rules, 2014. A record of all the places of business started by the foreign company registration in India.

Foreign company shall obtain its accounts reviewed concerning to the Indian business performance handled in the needs of this clause.

Foreign company shall assign the combined financial statement of its parent foreign company as referred by such foreign parent company to the suggested authority in the country of its registration. All foreign company shall register the list of places of business in Bangalore in Form FC-3.

Instead of 9 months as issued under the companies’ act 1956, the financial statement with other documents shall be registered within a term of six months of the close of financial year. (Rule 4(3) of the companies (registration of foreign companies) rules, 2014).

The accounts require to be examined by doing chartered accountant in India or LLP or firm of performing chartered accountants.

The punishment has been improved, wherein a foreign company fails to follow with any of the conditions of this clause. The company shall punishable with fine of Rs. One lakh and it may increase to three lakh rupees.

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