How should AOC-1 be signed and whether Auditor's Signature required?

How should AOC-1 be signed and whether Auditor's Signature required?. Form AOC-1 is required to be attached with the financial statements of a company, as mandated by Section 129(3) of the Companies Act, 2013, and Rule 5 of the Companies (Accounts) Rules, 2014, AOC-1 form presents the salient features of the financial statements of a company’s subsidiary company/subsidiaries, associate company/companies, and joint venture/joint ventures. Form AOC-1 plays a major role in providing the salient features of financial statements of a company’s subsidiaries, associate companies, and joint ventures. It is a statutory requirement that helps to ensure transparency and facilitates a clear understanding of a company’s extended financial performance. While the form must be signed in the same manner as the balance sheet, it is important to note that auditors are not required to sign Form AOC-1. Instead, the responsibility for certification lies with the company’s directors, CFO, and Company Secretary.
Section 129(3) of the Companies Act, 2013
Section 129(3) requires companies that have one or more subsidiaries, associate companies, or joint ventures to prepare a consolidated financial statement (CFS), which must represent the financial performance and position of the holding company and its subsidiaries in one report.
In addition to the consolidated financial statement, companies are required to attach Form AOC-1 with their financial statements, which presents a concise summary of the financial highlights of subsidiaries, associate companies, and joint ventures, which allows shareholders and stakeholders to grasp the financial condition of all entities linked to the parent company.
Rule 5 of Companies (Accounts) Rules, 2014
Rule 5 of the Companies (Accounts) Rules, 2014, explicitly mentions that the statement containing salient features of the financial statement of a company’s subsidiary/subsidiaries, associate company/companies, and joint venture/joint ventures shall be prepared in Form AOC-1. This rule applies universally to all companies, regardless of any exemptions from preparing a consolidated financial statement.
When Is AOC-1 Required?
Even if a company is exempt from preparing a Consolidated Financial Statement (CFS), it is still required to attach Form AOC-1 with its financial statements. In essence, Form AOC-1 must always be attached whenever a company has subsidiaries, associate companies, or joint ventures.
According to the first proviso of Section 129(3), associate companies and joint ventures are included within the term "subsidiary" for the purposes of this section. Therefore, the requirement to attach Form AOC-1 extends beyond subsidiaries and also includes companies in which the reporting company holds a significant shareholding or is a party to a joint venture.
Features of Form AOC-1
Form AOC-1 is divided into two parts to distinguish between the different types of entities associated with the parent company:
Part A: Subsidiaries
This section provides details regarding the financial position of the subsidiary/subsidiaries, including:

Name of the subsidiary,

Reporting period,

Reporting currency,

Share capital, reserves, and total assets,

Total liabilities,

Investments and turnover,

Profit or loss before and after taxation.

Part B: Associates and Joint Ventures
This section includes information on the performance of associate companies and joint ventures, such as:

Names of associates or joint ventures,

Latest audited balance sheet date,

The company's share of profits or losses,

Whether the associate or joint venture is being consolidated.

Form AOC-1 thus serves as a summary document that complements the company’s consolidated financial statements by highlighting the key figures of these entities in a structured format.
Certification and Signing of Form AOC-1
One of the important aspects of Form AOC-1 is the manner of certification. As stated, the form must be signed in the same manner as the certification of the balance sheet. This is a crucial point because the responsibility for signing the form lies with the company’s directors and certain key officers, not the auditor.
Section 134(1) of the Companies Act, 2013: Signing of Financial Statements
Section 134(1) governs the certification of financial statements, stating that the balance sheet, statement of profit and loss, cash flow statement, and other documents must be signed by the following:

The Chairperson of the company, if authorized by the Board,

Two Directors, one of whom shall be the Managing Director,

The CEO, if he or she is a Director in the company,

The CFO (Chief Financial Officer),

The Company Secretary, if the company has one.

Since Form AOC-1 is required to be certified in the same manner as the balance sheet, it is these officers and directors of the company who must sign Form AOC-1 but the auditor is not required to sign Form AOC-1.
Auditor's Role in Signing Financial Statements
While the auditor does not need to sign Form AOC-1, their role in certifying the company's overall financial statements is vital. Section 134(2) and 134(7) of the Companies Act, 2013, highlight the auditor’s responsibility:
1. The auditor must provide a report that is attached to the financial statements.
2. The auditor’s report, along with a signed copy of the financial statement, should be circulated to shareholders and published with the company’s financial statement.
3. The company must ensure that along with the financial statements, the following documents are issued:

Auditor’s report,

Board’s report,

Notes annexed to or forming part of the financial statement,

The statement containing the salient features of the financial statement (i.e., Form AOC-1).

Thus, although the auditor plays a crucial role in the overall certification of the company’s financials, their signature is not required for Form AOC-1 specifically.
Additional Documents to Be Circulated Along with the Financial Statements
When circulating the financial statements, including the consolidated financial statement (if applicable), companies must also include the following documents:

Auditor's report: The auditor’s opinion on whether the financial statements provide a true and fair view of the company's financial position.

Board's report: A report by the company’s directors, outlining key financial data and other important company information.

Notes to the financial statements: Further information clarifying the financial figures presented in the balance sheet and profit and loss statement.

Form AOC-1: The statement containing salient features of the financial statements of the subsidiary/subsidiaries, associate company/companies, and joint venture/joint ventures.

Importance of Form AOC-1 for Stakeholders
Form AOC-1 provides a concise yet comprehensive overview of the financial performance of the subsidiaries( Including Foreign Subsidiaries), associate companies, and joint ventures of a company, helps shareholders and other stakeholders understand the contribution of these entities to the overall financial performance of the parent company. By enclosing AOC-1 to the financial statements, companies at the time of Annual Filing of the Companies in AOC-4 demonstrate a commitment to transparency and good corporate governance and are particularly important for companies with multiple subsidiaries or investments in associate companies and joint ventures, as it allows stakeholders to evaluate how these entities are performing and contributing to the group’s financial health. For any Company Law Advisory, should reach out to Compliance Calendar LLP, having a team of CA/CS/Lawyers who helps in Legal , Tax and Compliances to smooth operation of the Company. 
Download format AOC-1

Form AOC-1 is required to be attached with the financial statements of a company, as mandated by Section 129(3) of the Companies Act, 2013, and Rule 5 of the Companies (Accounts) Rules, 2014, AOC-1 form presents the salient features of the financial statements of a company’s subsidiary company/subsidiaries, associate company/companies, and joint venture/joint ventures. Form AOC-1 plays a major role in providing the salient features of financial statements of a company’s subsidiaries, associate companies, and joint ventures. It is a statutory requirement that helps to ensure transparency and facilitates a clear understanding of a company’s extended financial performance. While the form must be signed in the same manner as the balance sheet, it is important to note that auditors are not required to sign Form AOC-1. Instead, the responsibility for certification lies with the company’s directors, CFO, and Company Secretary.

Section 129(3) of the Companies Act, 2013

Section 129(3) requires companies that have one or more subsidiaries, associate companies, or joint ventures to prepare a consolidated financial statement (CFS), which must represent the financial performance and position of the holding company and its subsidiaries in one report.

In addition to the consolidated financial statement, companies are required to attach Form AOC-1 with their financial statements, which presents a concise summary of the financial highlights of subsidiaries, associate companies, and joint ventures, which allows shareholders and stakeholders to grasp the financial condition of all entities linked to the parent company.

Rule 5 of Companies (Accounts) Rules, 2014

Rule 5 of the Companies (Accounts) Rules, 2014, explicitly mentions that the statement containing salient features of the financial statement of a company’s subsidiary/subsidiaries, associate company/companies, and joint venture/joint ventures shall be prepared in Form AOC-1. This rule applies universally to all companies, regardless of any exemptions from preparing a consolidated financial statement.

When Is AOC-1 Required?

Even if a company is exempt from preparing a Consolidated Financial Statement (CFS), it is still required to attach Form AOC-1 with its financial statements. In essence, Form AOC-1 must always be attached whenever a company has subsidiaries, associate companies, or joint ventures.

According to the first proviso of Section 129(3), associate companies and joint ventures are included within the term "subsidiary" for the purposes of this section. Therefore, the requirement to attach Form AOC-1 extends beyond subsidiaries and also includes companies in which the reporting company holds a significant shareholding or is a party to a joint venture.

Features of Form AOC-1

Form AOC-1 is divided into two parts to distinguish between the different types of entities associated with the parent company:

Part A: Subsidiaries

This section provides details regarding the financial position of the subsidiary/subsidiaries, including:

Name of the subsidiary,
Reporting period,
Reporting currency,
Share capital, reserves, and total assets,
Total liabilities,
Investments and turnover,
Profit or loss before and after taxation.

Part B: Associates and Joint Ventures

This section includes information on the performance of associate companies and joint ventures, such as:

Names of associates or joint ventures,
Latest audited balance sheet date,
The company's share of profits or losses,
Whether the associate or joint venture is being consolidated.

Form AOC-1 thus serves as a summary document that complements the company’s consolidated financial statements by highlighting the key figures of these entities in a structured format.

Certification and Signing of Form AOC-1

One of the important aspects of Form AOC-1 is the manner of certification. As stated, the form must be signed in the same manner as the certification of the balance sheet. This is a crucial point because the responsibility for signing the form lies with the company’s directors and certain key officers, not the auditor.

Section 134(1) of the Companies Act, 2013: Signing of Financial Statements

Section 134(1) governs the certification of financial statements, stating that the balance sheet, statement of profit and loss, cash flow statement, and other documents must be signed by the following:

The Chairperson of the company, if authorized by the Board,
Two Directors, one of whom shall be the Managing Director,
The CEO, if he or she is a Director in the company,
The CFO (Chief Financial Officer),
The Company Secretary, if the company has one.

Auditor's Role in Signing Financial Statements

While the auditor does not need to sign Form AOC-1, their role in certifying the company's overall financial statements is vital. Section 134(2) and 134(7) of the Companies Act, 2013, highlight the auditor’s responsibility:

1. The auditor must provide a report that is attached to the financial statements.

2. The auditor’s report, along with a signed copy of the financial statement, should be circulated to shareholders and published with the company’s financial statement.

3. The company must ensure that along with the financial statements, the following documents are issued:

Auditor’s report,
Board’s report,
Notes annexed to or forming part of the financial statement,
The statement containing the salient features of the financial statement (i.e., Form AOC-1).

Thus, although the auditor plays a crucial role in the overall certification of the company’s financials, their signature is not required for Form AOC-1 specifically.

Additional Documents to Be Circulated Along with the Financial Statements

When circulating the financial statements, including the consolidated financial statement (if applicable), companies must also include the following documents:

Auditor's report: The auditor’s opinion on whether the financial statements provide a true and fair view of the company's financial position.
Board's report: A report by the company’s directors, outlining key financial data and other important company information.
Notes to the financial statements: Further information clarifying the financial figures presented in the balance sheet and profit and loss statement.
Form AOC-1: The statement containing salient features of the financial statements of the subsidiary/subsidiaries, associate company/companies, and joint venture/joint ventures.

Importance of Form AOC-1 for Stakeholders

Form AOC-1 provides a concise yet comprehensive overview of the financial performance of the subsidiaries( Including Foreign Subsidiaries), associate companies, and joint ventures of a company, helps shareholders and other stakeholders understand the contribution of these entities to the overall financial performance of the parent company. By enclosing AOC-1 to the financial statements, companies at the time of Annual Filing of the Companies in AOC-4 demonstrate a commitment to transparency and good corporate governance and are particularly important for companies with multiple subsidiaries or investments in associate companies and joint ventures, as it allows stakeholders to evaluate how these entities are performing and contributing to the group’s financial health. For any Company Law Advisory, should reach out to Compliance Calendar LLP, having a team of CA/CS/Lawyers who helps in Legal , Tax and Compliances to smooth operation of the Company.