Companies Act 2014 section 303

Subsidiary undertakings included in the group financial statements

Section 303 sets out the general rule that all subsidiary undertakings must be consolidated in group financial statements prepared under the Companies Act, and identifies the limited circumstances in which a subsidiary may be excluded from consolidation.

• All subsidiary undertakings of a holding company must normally be included in the Companies Act group financial statements.
• A subsidiary may be excluded if it is not material to the true and fair view, but multiple exclusions are only permitted if the subsidiaries concerned are immaterial when taken together.
• Exclusion is also permitted where severe long-term restrictions hinder the holding company's rights, where necessary information cannot be obtained without disproportionate expense or undue delay, or where the interest is held exclusively for subsequent resale.
• The rights and interests referred to in the exclusion conditions are those defined in section 7 of the Act, without which the company would not qualify as a holding company.