Subsidiary information

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Rajiv Agrawal (Querist)
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06 November 2013 Dear all,

whether a shareholder holding 1 share of holding company, can demand annual reports/complete balance sheet of its subsidiary companies?

If yes, under which section of the Act, it is given?

Regards

Rajiv Agrawal

Rajiv Agrawal (Querist)
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16 November 2013 Plz reply as our 1 shareholder is demanding balance sheet of subsidiaries.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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26 July 2025 This is a very practical question involving **shareholder rights** under the **Companies Act, 2013** (since the Companies Act, 1956 was repealed in 2013). Here’s the detailed answer to your query:

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## ✅ **Question:**

Can a **shareholder (even holding 1 share)** of a **holding company** demand the **balance sheet or annual reports of its subsidiary companies**?

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## ✅ **Short Answer:**

**Yes**, a shareholder of the **holding company** can request **financial information of subsidiary companies** — **but** only to the **extent disclosed in the consolidated financial statements**.

The **Companies Act, 2013** provides **limited rights** to shareholders for accessing subsidiary information.

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## 📘 **Relevant Legal Provisions:**

### 🔹 **Section 136(1) of the Companies Act, 2013** (as amended)

> "Every company shall, at least 21 days before the annual general meeting, send a copy of the **financial statements**, including **consolidated financial statements**, **auditor’s report**, and **other documents** to **every member** of the company..."

So:

* The holding company is **required to send** its own **standalone and consolidated financial statements** to its shareholders.
* The **consolidated financial statements (CFS)** include **subsidiary data in aggregated form**, **not the full balance sheet** of each subsidiary.

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### 🔹 **Rule 5 of Companies (Accounts) Rules, 2014**

It clarifies the **availability of subsidiary financials** to shareholders:

> "A company shall provide a copy of the separate audited financial statements of its **subsidiary companies** to any shareholder of the company **on demand**."

✅ **This is key!** So, under the rules:

* **Any shareholder** (even with **1 share**) of the holding company has the **right to demand the full audited financials of the subsidiary**.
* The company **must provide it**, although usually it can be done **on request**, and possibly **at a nominal cost** (e.g., printing or mailing).

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## 🧾 **Summary:**

| Issue | Answer |
| -------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- |
| Can a shareholder of a holding company demand the balance sheet of a subsidiary? | ✅ Yes |
| Is there a minimum shareholding required? | ❌ No minimum; even 1 share is sufficient |
| Legal Basis | 📘 Section 136(1) of the Companies Act, 2013 and 🧾 Rule 5 of Companies (Accounts) Rules, 2014 |
| Mode of sharing | On written request (usually physical or email); the company may charge nominal cost |

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## 📌 Practical Tip:

* The shareholder should make a **written request** (email or physical letter) to the **Company Secretary** of the holding company.
* The company must respond **promptly**, ideally within **7–10 working days**, depending on internal policy.

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Let me know if you’d like a **sample shareholder request letter** format or a response draft from the company!

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