Holding undertakings
In addition to preparing their own Financial statements, holding undertakings are required to prepare consolidated group financial statements and to lay them before the AGM at the same time as their own annual financial statements. The requirement to prepare group financial statements is contained in section 293 Companies Act 2014, and states that: “Where at the end of its financial year a company is a holding company, the directors of the company, as well as preparing entity financial statements for the financial year, shall prepare group financial statements for the holding company and all its subsidiary undertakings for that financial year.”

A Small Group may also be eligible for audit exemption under section 359 Companies Act 2014.


Exemption from requirement to prepare group financial statements
Exemption from consolidation: section 293 Companies Act 2014 as amended by section 19 Companies (Accounting) Act 2017- for financial years beginning on or after 1 January 2017. A holding company that qualifies for the small company regime under section 280B or the micro company regime under section 280E shall be exempt from the requirement to prepare group financial statements.

Section 280B: The qualifying conditions for a small group are satisfied by a group if, in relation to a financial year, it fulfils 2 or more of the following requirements:

  • ● (a) the aggregate amount of turnover of the group does not exceed €12 million net (or €14.4 million gross);
  • ● (b) the aggregate balance sheet total of the group does not exceed €6 million net (or €7.2 million gross);
  • ● (c) the aggregate average number of employees of the group does not exceed 50.


Section 280B(11) states:  For the purposes of this section, in relation to the aggregate figures for turnover and balance sheet total—
‘net’ means after set-offs and other adjustments made to eliminate group transactions—
(i) in the case of Companies Act financial statements, in accordance with Schedule 4, and
(ii) in the case of IFRS financial statements, in accordance with international financial reporting standards;
‘gross’ means without those set-offs and other adjustments

The group filing exemption based on size (section 293 CA 2014 as amended) applies to LTD companies, Designated Activity Companies (DACs), Companies Limited by Guarantee (CLG) and Public Unlimited Companies without a share capital (PULC) but does not apply to Public Limited Companies (PLC) or Public Unlimited Companies with a share capital (PUC).

There is a further exemption under section 300 Companies Act 2014, being an exemption from the requirement to prepare group financial statements for a holding undertaking which is a fully or 50 per cent owned subsidiary undertaking of an EEA undertaking.

This exemption is not limited to private companies so a plc which meets the section 299 conditions may avail of it, but section 1377 Companies Act 2014 provides the exemption does not apply to a holding undertaking any of whose shares, debentures or other debt securities have been admitted to trading on a regulated market in an EEA Member State. So a listed plc cannot avail of the exemption.

Section 300 contains another exemption. This may be availed of by a holding undertaking which is itself a subsidiary undertaking of another undertaking established under the law of a non EEA Member State whose shareholders or members holding an aggregate of 50 per cent of the shares in the holding undertaking and notice requesting the preparation of group financial statements has not served on the company, at least 6 months before the end of the financial year of that undertaking.

A listed plc, is not entitled to avail of any of the three exemptions, and so must always prepare and file the group financial statements with its annual return.

Filing requirements
Sections 294/295 set out the filing requirement in relation to group financial statements. It requires a certified copy of group financial statements drawn up by the holding undertaking to be annexed to the annual return of the holding undertaking.

So unless a holding undertaking is entitled to avail of the exemptions under Chapter 5 Part 6 of the Companies Act 2014, it is obliged to annex the group financial statements to its annual return when filing same in CRO. A group can be exempted under the Audit Exemption (section 358(2)) where requirements are met.

Public Limited Companies and Public Unlimited Companies are not eligible for audit exemption.

A private company that is a subsidiary of another undertaking which is established in another EEA Member State is exempted from the requirement to annex financial statements and reports to the annual return if certain conditions are fulfilled.

In this case, the following documents must be filed with the subsidiary company’s annual return, pursuant to section 294 Companies Act 2014:

1. Notice stating that the company has availed of the exemption under sections 293-304 Companies Act 2014.
2. A copy of an irrevocable guarantee by the holding undertaking of the liabilities of the subsidiary company’s annual return, pursuant to section 357(1)(b).
3. Notification by the company to the shareholders of the guarantee pursuant to section 357(1)(c).
4. A declaration by the subsidiary that all the shareholders have declared their consent to the exemption, this declaration to be signed by the secretary or a director (section 357(1)(f)(ii) requires the consent of all the shareholders).
5. Consolidated financial statements of the holding undertaking (the exemption of the subsidiary should be disclosed in a note to the Financial statements) drawn up in accordance with the requirements of section 294 and duly audited must be attached to the subsidiary undertakings annual return (section 357(1)(h)).

Example of the text of guarantee which is acceptable:
By this guarantee, X Limited of (registered office, etc.) as the holding undertaking of Y Limited and for the purposes of the exemptions referred to in section 357 of the Companies Act 2014, and not otherwise, hereby irrevocably guarantees in respect of the whole of the financial year of Y Limited ending on the ** day of *** 20**, all of the commitments entered into by Y Limited including amounts shown as liabilities in the statutory financial statements; provided that this guarantee shall not extend to any liability or commitment of Y Limited which shall not have arisen otherwise than in respect of that financial year or which shall not constitute a liability or loss.