A foreign parent needs two different things from its Indian subsidiary, and confusing them is the source of most friction. Group reporting is the parent's monthly view: results under the group's accounting framework, in its format and currency, on its timetable. Statutory reporting is India's view: books and financial statements under Indian accounting standards and the Companies Act, with Indian tax and regulatory filings, on India's April to March year. A good monthly pack delivers the first, keeps the second current, and reconciles the two. Done monthly, year-end becomes a confirmation exercise for the parent's auditors rather than a reconstruction.
Statutory and group reporting are different jobs
Statutory (India). An Indian company keeps its books under the Companies Act, 2013. It prepares financial statements under Ind AS or the Companies (Accounting Standards), depending on which framework applies to it, for a financial year ending 31 March. These accounts are audited by the statutory auditor and filed with the Registrar. They are also the basis of the income tax return and transfer pricing filings.
Group (parent). The parent consolidates the subsidiary under its own framework, often IFRS or US GAAP. It uses its chart of accounts, its reporting calendar (often a calendar year) and its currency. Its auditors review the subsidiary as a component of the group audit.
The two diverge in predictable places: revenue recognition on contracts, leases, employee benefits, deferred tax, and the timing of accruals. The monthly pack should carry a short, standing list of these GAAP differences and their amounts, so that statutory and group figures can always be reconciled.
The monthly pack
A workable pack for the parent has seven parts.
- Results in the group format. Profit and loss account, balance sheet and cash flow, mapped to the group chart of accounts, in rupees and in the group's reporting currency. State the exchange rates used.
- Commentary on variances against budget and prior month: the drivers in plain terms, not a restatement of the numbers.
- Inter-company reconciliation. Every inter-company balance and transaction for the month, agreed with the counterparty in the invoice currency, with any differences explained. The parent's consolidation depends on this more than on anything else.
- Transfer pricing tracking. If the subsidiary is remunerated on a cost-plus or similar basis, show the cost base, the mark-up applied and the year-to-date result against the policy. Correcting during the year is far easier than a year-end adjustment.
- Cash and funding. Bank balances, a short-term cash forecast, and any planned capital injection, loan or repatriation, each of which has FEMA consequences.
- Compliance tracker. GST returns, TDS deposits and returns, payroll contributions, advance tax and regulatory filings for the month: done, due, or late, with reasons.
- GAAP differences schedule. The standing list described above, updated for the month.
Keep the pack the same every month. Its value lies in consistency, not in new analysis.
FEMA: the filings the parent's transactions create
Most FEMA obligations arise from transactions the parent itself initiates, so the parent's finance team needs to know them.
- Fresh capital. When the subsidiary issues shares to the parent, Form FC-GPR is filed through the authorised dealer bank, generally within 30 days of allotment. Pricing and timing rules apply to the share issue itself.
- Share transfers between residents and non-residents are reported in Form FC-TRS, generally within 60 days of the transfer or of receipt or remittance of the consideration, whichever is earlier.
- Loans from the parent are external commercial borrowings, subject to the borrowing regulations and ECB reporting through the bank. RBI revised the ECB reporting forms in February 2026; confirm the current filing frequency with the bank.
- Annual return on Foreign Liabilities and Assets. Companies with foreign investment file the FLA return with RBI by 15 July each year for the position at 31 March. If the audit is not complete, provisional figures are filed and later revised.
- Export receipts and import payments follow the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, in force from 1 October 2026, which replaced the 2015 export regulations. This matters if the subsidiary invoices the parent for services.
Treat any capital injection, loan, repatriation or change in shareholding as a FEMA event. Plan it with the bank and the adviser before the money moves.
Transfer pricing: documentation, not just pricing
Transactions between the subsidiary and the parent, or other group companies, are international transactions with associated enterprises and must be at arm's length. In practice, the parent needs three things from India.
- A written inter-company agreement that matches what actually happens: services, pricing basis, invoicing frequency and payment terms.
- Contemporaneous documentation maintained during the year, including a benchmarking analysis supporting the margin or price.
- The accountant's report on international transactions, filed each year with the tax authorities. It was Form 3CEB under the Income-tax Act, 1961. Under the Income-tax Act, 2025 and the Income-tax Rules, 2026, it is Form 48. Larger groups also have master file and country-by-country reporting obligations that involve the parent directly.
The monthly transfer pricing tracker in the pack is what keeps the year-end report from containing surprises.
The close calendar
A calendar that serves both reporting lines:
- Working days 1 to 3: bank reconciliations, payroll, accruals and the inter-company match.
- Working day 4 or 5: group pack submitted to the parent.
- By the 7th: TDS deposited for the previous month.
- By the 11th and the 20th (monthly filers): GSTR-1 and GSTR-3B.
- Quarterly: TDS returns, advance tax instalments, and a fuller review of the GAAP differences and the transfer pricing position.
If the group's year ends in December, plan a hard close at 31 December for group reporting, with the statutory year still ending on 31 March. The proviso to section 2(41) of the Companies Act allows a company with a foreign holding company to apply to the Central Government (through the Regional Director) for a different financial year to align with the group. Income tax in India still runs April to March. Many groups simply run both closes.
What the parent's auditor will ask for at year-end
Expect requests along these lines, and build the monthly discipline around them:
- the group reporting package, tied to the subsidiary's trial balance;
- the reconciliation of statutory to group figures, with the GAAP differences explained;
- confirmations of inter-company balances, agreed with the counterparties;
- related-party transaction schedules, and the transfer pricing documentation supporting them;
- the tax provision and deferred tax workings;
- the status of the statutory audit and any matters raised by the Indian auditor;
- subsequent events up to the date the group signs.
A subsidiary that has reconciled inter-company balances and GAAP differences every month can answer most of these within days.
Where this fits
If the subsidiary invoices the parent for services, see GST on export of services after the Finance Act 2026 intermediary change and FIRC and e-BRC: the paper trail your service exports need.
Wissen Solutions prepares monthly group reporting packs, maintains statutory books and coordinates FEMA and transfer pricing compliance for Indian subsidiaries through our Virtual CFO services.
Sources (checked 24 October 2026; regulatory deadlines should be confirmed for the transaction concerned)
- Stratrich: FEMA compliance calendar for foreign-owned Indian companies (commentary): FC-GPR, FC-TRS, FLA, ECB-2 timelines
- RBI: Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026
- Income Tax Department: Form 48 FAQs (formerly Form 3CEB)
- RBI: FEMA (Non-debt Instruments) reporting, Regulation 4: FC-GPR and FC-TRS timelines
- RBI: FAQs on the FLA return
- Companies Act, 2013, section 2(41), as amended by the Companies (Amendment) Act, 2019