Notes To The Consolidated Financial Statements: Fill & Download for Free

From your question, I assume that you understand the meaning of financial statements and so, I am not getting into that.Companies Act, 1956/ 2013 required/ requires every company to prepare and present its own financial statements reflecting its state of affairs as at 31st March, profit or loss for the year ended on that date and the net cash inflows/ outflows for the year so ended. Also, when a company has a subsidiary/ associate or joint venture it has to prepare and present consolidated financial statements.Let’s take an example. Reliance Industries Limited (RIL) is a separate legal entity and its subsidiary, Reliance Jio Infocomm Limited (RJIL) is also a separate legal entity. Therefore, as per the law both these companies will prepare their own separate financial statements. However, since RJIL is a subsidiary of RIL, it means RIL controls the operating and financial decisions of RJIL, thereby making them a part of the same GROUP. Therefore, RIL in addition to preparing its own financial statements (which in this case is called Standalone Financial Statements) will also prepare a Consolidated Financial Statements which basically reflects the financials of RIL & RJIL as a GROUP as it controls/ holds majority control in RJIL.Since, RIL also controls/ holds many other companies and firms, they are also a part of the group and in order to disclose the financial position of RIL as a GROUP, RIL consolidates (means adds) the financials of these companies/ Joint Ventures with its own financials (Standalone Financial Statements) to present Consolidated Financial Statements.Note: If you wish to check the names of the companies/ firms that are consolidated in Consolidated Financial Statements (CFS) of a particular company, you can refer to the Notes to CFS of that company which forms part of the Annual Report.Now, taking the second part of your question. Securities & Exchange Board of India (SEBI) which regulates listed companies in India requires every company to provide quarterly results to their Investors on or before a specified date for every quarter. These results may be standalone or consolidated as per the preference of the listed entity. Now, understand the practical difficulties for RIL to provide the consolidated results quarterly. RIL has hundreds of entities as its subsidiaries, associate and joint ventures. These include Indian entities and foreign entities. To present consolidated results every quarter, it would have to direct each of these entities to prepare its financials on a quarterly basis so that these can be consolidated with the standalone results of RIL. These entities may be in the form of a Company (Listed as well as unlisted), Partnership Firms, Jointly Controlled Entities and many other forms. Firstly, why will these entities take the unnecessary burden to prepare the financials quarterly. Secondly, when RIL has the option to not present consolidated results quarterly, why will it take so much burden of getting the financials of these entities prepared and then consolidate the same. As far as Investors are concerned, it is sufficient for them to refer CFS annually. How many of the retail investors do actually refer to CFS or even how many of them know the names of entities included in the CFS? For big investors, they have put the bet on RIL (i.e. the management of RIL) and again, the annual CFS would be sufficient unless otherwise any major event happen in any of these entities. Though, presenting consolidated results quarterly will definitely be a better form of Corporate Governance, but for practical purposes, it involves a huge time and cost factor for the companies and remember, they are there to do BUSINESS not just COMPLIANCE!!Hope this answer makes things amply clear.

I used to be a US CPA. I am also a professional short-seller. Shorting companies on the basis of suspected fraud is highly inefficient and extremely difficult. It is neither scalable nor replicable. I gave up a long time agoBackground:I used to compile consolidated financial statements in Japanese and English for a listed Japanese company. I also did a whole bunch of highly technical stuff such as transfer pricing, M&A integration. I got into finance because of Enron, Worldcom and all those fraudulent companies. People discovered that esoteric stuff called a balance sheet. Back then, very few foreigners were fluent in J & US GAAP. I happily devoured scores of 有価証券報告書 and決算短信. I loved the craftsmanship behind the linesA good analogy is drinking with wine makers. As pros, they naturally dissect wine, tanin, early-mid-late palate, concentration, extraction, residual sugar. I love their company, but the dissecting part takes the fun awayCreative accounting vs fraud:First of all, it is extremely hard to uncover fraud through financial statements. In all my years, i uncovered 3 confirmed and maybe 5 more potential. I found NEC in 2002. It was a revenue recognition problem, due to improper classification of lease. It took 5 days to find that one. That fraud was publicly discovered in 2005. Meanwhile, share price had tripled. First lessonSecond one was J-Bridge. They were a bunch of shady individuals (yakuza related) posturing as real estate securitisation. This is the only meeting i ever got kicked out of… They went bust 2 years later.Common misconceptions are:change in auditor, depreciation, inventory valuation, accruals.channel stuffing: sales within the consolidation perimeter are eliminated in the consolidation process, moot pointValuation of intangibles: goodwill, marked to market securities, patents and IP, potentially contentiousHere is what you need to know:People who have no formal training in accounting often cry fraud when it is just aggressive accounting.Companies have a natural incentive to be aggressive. They are trapped in the hamster wheel of quarterly reportsCompanies commit fraud all the time. They pay fines when caught and move on. Look no further than Trump. He violated the banking law and got fined $10M for that, end of story. Tax optimisation is a national sport. GS and AMZN pay no tax!Companies don’t run around advertising their frauds. They go out of their way to hide it to their auditors, to the tax office and to the law. Good luck finding them alone thenAmoral business model is not a fraud. Bill Ackman learned it the hard way with Herbalife. He lodged a complaint to the FTC, sponsored a documentary but lost in the endEven if you find a fraud, it may not be a profitable short. I read Enron’s financial statements. It was obvious to a trained practitioner. So, what? Price kept going up. The Egyptian superstar short-seller lost money shorting a fraudulent financial companyHow and where to look?You are not going to like this. You won’t find anything in the income statement. There is a saying in the accounting profession that no financial statement is complete until the cash flow statement is complete. Cash flow statement cannot be easily manipulated: follow the money. Start there and work your way through the notes: leasing, off-balance sheet liabilities, asset sales etc. Reconcile with the balance sheet.A good sign is structurally negative operating and positive financing cash flow. This is the VC sponsored model in the Silicon Valley… Companies that supplement their loss making business with financing do not necessarily commit fraud, but 1) it invites cutting corners 2) it clearly indicates a precarious unsustainable business model. Did someone mention the great cash incinerators Lyft, Uber and Slack?There is no efficient way to uncover fraudAs mentioned above, companies go out of their ways to hide their misdeeds. You are on your own and trust me, no-one will help you. Whistle blowers do not have brilliant careers either.It takes enormous effort to find one case. Then, you have market risk. OK, you found something, but until the market starts pricing this in, it will hurt. It is not scalable. You may find one or two a year. So what? At that pace, it will take 10 years to build a short book.ConclusionLooking for fraud might be intellectually satisfying. It is by far the least efficient, hardest way to approach short-selling. I gave up a long time ago.One last thing, forget about the tourists who cry “fraud” on seeking alpha. The polite word for that is motivated reasoning

The reason the numbers look so funky in 2014 was that Yahoo! recorded a $10.3 billion gain from the sale of Alibaba. The resulting anomalous net earnings has nothing to do with their revenues. This is a non-recurring, non-operating transaction.See “Significant Transactions—Alibaba Group Holding Limited Initial Public Offering” above and Note 8—“Investments in Equity Interests Accounted for Using the Equity Method of Accounting” in the Notes to our consolidated financial statements for additional information. > 10-K