PROJECT REPORT ON

A STUDY AND ANALYSIS OF CONSOLIDATED FINANCIAL

STATEMENT OF PENINSULA LAND

UNIVERSITY OF MUMBAI

MASTER OF COMMERCE
(Accountancy)
SEMESTER I
2015-16

SUBMITTED BY
Name: VIRAJ V. BALSARA

Roll No.: 32

PROJECT GUIDE
Subject Teacher name

K.P.B HINDUJA COLLEGE OF COMMERCE

315, NEW CHARNI ROAD, MUMBAI-400 004

M.Com (Accountancy)
1st SEMESTER

A STUDY & ANALYSIS OF CONSOLIDATED

FINANCIAL STAEMENT OF PENINSULA LAND

SUBMITTED BY
VIRAJ BALSARA

008

Roll No.: 32

Smt. P.D. Hinduja Trusts

K.P.B. HINDUJA COLLEGE OF COMMERCE

315, New Charni Road, Mumbai 400 004 Tel.: 022- 40989000 Fax: 2385 93 97. Email:

NAAC Re-Accredited A

THE BEST COLLEGE OF UNIVERSITY OF MUMBAI FOR THE ACADEMIC YEAR 2010-2
Prin. Dr. Minu Madlani (M. Com., Ph. D.)

CERTIFICATE
This is to certify that Ms. VIRAJ V. BALSARA

of

M.Com (Accountancy)

Semester 1st [2015-2016] has successfully completed the Project on

PROCESS COSTING ON PARLE G under the guidance of DR.
NISHIKANT JHA.

________________
Project Guide

________________
Co-coordinator

________________

________________

Internal Examiner

External Examiner

________________

________________

Principal

College Seal

DECLARATION
I Mr. VIRAJ V. BALSARA student of M.Com-Accountancy, 1st semester
(2015-2016), hereby declare that I have completed the project on PROCESS
COSTING ON PARLE G

The information submitted is true and original copy to the best of our
knowledge.

(Signature)
Student

INDEX
SR. No
1
2
3
4
5
6

TOPIC

CHAPTER 1: CONSOLIDATED FINANCIAL STATEMENTS

1.1 INTRODUCTION:

PAGES

In an era of business growth, many corporations are composed of numerous separate

companies and in turn prepare consolidated financial statements. Consolidated financial
statements present the financial position and results of operations for a parent
(controlling entity) and one or more subsidiaries (controlled entities).
Consolidation is required when a corporation owns a majority of another corporations
outstanding common stock. The accounting principles applied in the preparation of the
consolidated financial statements are the same accounting principles applied in
preparing separate company financial statements.
Two companies are considered to be related companies when one controls the other
company. Consolidated financial statements are generally considered to be more useful
than the separate financial statements of the individual companies when the companies
are related. Whether the subsidiary is acquired or created, each individual company
maintains its own accounting records, but consolidated financial statements are needed
to present the companies together as a single economic entity for general purpose
financial reporting.

1.2 DEIFINTION OF HOLDING AND SUBSIDARY COMPANY:

a. HOLDING COMPANY:
As per section 2(46) of companies act 2013, holding company, in relation to one or
more other companies, means a company of which such companies are subsidiary
companies.
b. SUBSIDARY COMPANY:
As per section 2(87) of companies act 2013, subsidiary company, in relation to any
other company, means a company in which the holding companyi.
Controls the composition of the Board of Directors; or
ii.
Exercise or controls more than one half of the total share capital either at its own
or together with one or more of its subsidiary companies.

1.3 MEANING OF HOLDING AND SUBSIDARY COMPANY:

a. HOLDING COMPANY:
Holding company is that who controls another companies or company. In other
words holding company holds the Board of Directors and majority of shares of
other company. (i.e. it holds 51% or more of shareholding of the other company.)

b. SUBSIDARY COMPANY:
Subsidiary company means the company on which holding company exercise its
control.

1.4 EXCEPTION:
Holding company cannot be called as holding company of Subsidiary company by any
of the three ways in following exceptional cases:
a. If the shares are held by holding company or the power is exercisable by the holding
company he is in a fiduciary capacity.
b. Where the shares are held or powers are exercisable by virtue of provision of any
debenture or of trustee for securing any issue of such debentures.

c. Where the shares are held or powers are exercisable by a lending company for the
purpose of transaction entered in ordinary course by way of security.

1.5 PREPARATION OF CONSOLIADTED FINANCIAL STATEMENT

The Companies Act 1956 does not require preparation of consolidated financial
statements (CFS). However listed companies are required to prepare CFS as per
SEBI regulations. The Companies Act 2013 has made preparation of consolidated
accounts mandatory for companies having one or more subsidiaries or associates or
joint ventures. As per section 129 of Companies Act 2013, where company has one
or more subsidiaries or associates or joint venture it shall, in addition to its
financial statements for the financial year, prepare consolidated financial statement
of the company and all the subsidiaries or associates or joint ventures in the same
form and manner as that of its own which shall also be laid before the annual
general meeting of the company along with the laying of its financial statement.
The requirement to prepare CFS is largely consistent with internationally accepted
practices. However internationally, such requirements apply to listed companies;
and unlisted intermediate entities are generally exempted.
The Consolidated financial statements of the company shall be made in accordance
with Accounting Standards, subject to the requirement that if under such
Accounting Standards, consolidation is not required for the reasons that the
company has immediate parent outside India, then such companies will also be
required to prepare CFS in the manner and format as specified under Schedule III
to the Act.
The Schedule III of the Companies Act 2013, provide certain general instruction
for the preparation of CFS. Where a company is required to prepare CFS, i.e.
consolidated balance sheet and consolidated profit and loss, the company shall
mutatis mutandis follow the requirement of Schedule III of the Companies Act
2013 as applicable to company in the preparation of balance sheet and statement of
profit & loss. In addition the CFS shall disclose information as per the requirement
specified in the applicable Accounting Standards including the following:
a. Profit and loss attributable to minority interest and to owners of the parent in
the statement of profit & loss shall be present as allocation for the period.
b. Minority interest in the balance sheet within equity shall be presented
separately from the equity of the owners of the parent.

1.6ADVANTAGES & DISADVANTAGES

FINANCIAL STATEMENT:
a.ADVANTAGES:
i.
ii.

OF

CONSOLIADED

Consolidated financial statements are presented primarily for the benefit of the
shareholders, creditors, and other resource providers of the parent.
Significantly, consolidated financial statements often represent the only means
of obtaining a clear picture of the total resources of the combined entity that
are under the control of the parent company

b. DISADNAVTAGES:
i.
ii.

While consolidated financial statements are useful, their limitations also must
be kept in mind.
Some information is lost any time data sets are aggregated; this is particularly
true when the information involves an aggregation across companies that have
substantially different operating characteristics.

1.7 MINORITY INTEREST:

When one entity or person possesses the requisite majority control, all other
business investors or owners make up the minority, or non-controlling, interest. For
example, suppose you hold 70 percent of the outstanding voting shares in a
corporation. Controlling more than 70 percent of shareholder votes requires you to
prepare consolidated financial statements that include 100 percent of the
corporation's income, losses and assets, as well as all other items that are disclosed
on financial statements. But since you don't own 100 percent of the corporation,
GAAP also requires you to report the amounts attributed to the 30-percent
ownership of minority interest holders.

1.8 MEANING OF GOODWILL & CAPITAL RESERVE:

GOODWILL:
When one company buys another company (by purchasing its shares), the price
paid is usually greater than the value of its net assets. The excess of the purchase
price over the value of its net assets relates to the cost of goodwill.

CAPITAL RESERVE:
The price paid by the holding company for the shares acquired in the subsidiary
company is less than the intrinsic value of the shares acquired; the difference
should be treated as capital profit and credited to capital reserve.

1.9 PREPARATION OF CONSOLIDATED PROFIT & LOSS

STATEMENT:
While preparing the consolidated profit & loss account f the holding company and its
subsidiary, the items appearing in the profit & loss account and subsidiary companies have to
be aggregated. The following adjustments have to be made:
i.

Transfer of goods between the holding and the subsidiary company should be
removed from the purchases and sales appearing in consolidated Profit & Loss
Account.

ii.

iii.

iv.
v.
vi.

Stock Reserve for unrealised profit in respect of inter-company transaction should

be created by debiting consolidated Profit & Loss Account and crediting Stock
reserve Account.
The share of profits of the subsidiary company arising before the date of
acquisition of shares by the holding company that belongs to the holding company
will be debited to the consolidated profit & loss account and credited to capital
reserve or goodwill as the case may be. In case of loss the entry will be just
reserved.
The share of profits or losses belonging to the minority shareholders will be
respectively credited or debited to minority interest account.
Dividend received from subsidiary company by the holding company should be
eliminated from both the sides of the consolidated profit & loss account.
The debenture interest should be eliminated from both the sides of the
consolidated profit & loss account to the extent to which it relates to the
debentures held by the holding company.

CHAPTER 2: STUDY & ANALYSIS OF CONSOLIDATED FINANCIAL

SATATEMENT OF PENINSULA LAND
2.1 INDEPENDENT ADUDITORS REPORT:
a. We have audited the accompanying financial statements of Peninsula land limited,
(hereinafter referred to as holding company); and its subsidiaries (the holding company and
its subsidiaries together referred to as the Group), its associate and jointly controlled

entities which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and
Loss, the Cash Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
b. The Holding Companys Board of Directors is responsible for the matters in section
134(5) of the Companies Act, 2013 (the Act) with respect to the preparation of these
financial statements that give a true and fair view of the financial position, financial
performance and cash flows of the Company (including Subsidiary Company) in
accordance with the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014.
c. This responsibility also includes the maintenance of adequate accounting records in
accordance with the provision of the Act for safeguarding of the assets of the Company and
for preventing and detecting the frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of internal financial control, that
were operating effectively for ensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due to fraud or error
d. The Auditors responsibility is to express an opinion on these financial statements based
on the audit conducted by him.. The auditors have taken into account the provisions of the
Act, the accounting and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made there-under. The audit
conducted in accordance with the Standards on Auditing specified under section 143(10) of
the Act. Those Standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the financial statements are
free from material misstatement.
e. An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Companys preparation of the financial
statements that give true and fair view in order to design audit procedures that are

appropriate in the circumstances. An audit also includes evaluating the appropriateness of

accounting policies used and the reasonableness of the accounting estimates made by
Companys Directors, as well as evaluating the overall presentation of the financial
statements. The audit evidence obtained is sufficient and appropriate to provide a basis for
our audit opinion on the financial statements.
f. In the opinion of the auditor and to the best of information and according to the
explanations given to them, the aforesaid financial statements, give the information required
by the Act in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India;
i. In the case of the Balance Sheet, of the state of affairs of the Company as at March 31,
2015;
ii. In the case of the Statement of Profit and Loss, of the profit for the year ended on that date;
and iii In the case of the Cash Flow Statement, of the cash flows for the year ended on that
date
g. The auditors report also opines on the following
i.

They have sought and obtained all the information and explanations which to the best of
their knowledge and belief were necessary for the purposes of the audit.

ii.

Proper books of account as required by law have been kept by the Company so far as
appears from their examination of those books

iii.

The reports on the accounts of the branch offices of the Company audited under Section
143(8) of the Act by branch auditors have been sent to them and have been properly dealt
by them in preparing the report

iv.

The Balance Sheet, The Statement of Profit and Loss, and Cash Flow Statement dealt in
the Report are in agreement with the books of account.

h. In their opinion the company is a going concern

i.

On the basis of written representations received from the directors as on 31 March, 2015,
taken on record by the Board of Directors, none of the directors is disqualified as on 31
March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

j.

With respect to the other matters included in the Auditors Report and to the best of
information and according to the explanations given to them.
i.

The Company has disclosed the impact of pending litigations on its financial position
in its financial statements

ii.

The Company has made provision, as required under the applicable law or accounting
standards, for material foreseeable losses, if any, on long term contracts including
derivative contracts.

iii.

There has been no delay in transferring amounts, required to be transferred, to the

Investor Education and Protection Fund by the Company [or, following are the
instances of delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the Company or there were no amounts which
required to be transferred

2.2 CONSOLIDATED BALANCE SHEET