Holding- subsidiary relationship

AS 21 simply states that where an enterprise / company elect to prepare CFS then it has to comply with AS21 unless any other requires a separate disclosure.

As per the existing norms, SEBI requires listed entities to prepare & publish CFS.

Accordingly, AS 21 does not exempt Private companies from its applicability.

Conclusion:

Where a Company [Public or Private] prepares CFS, it has to comply with AS 21 and related other Accounting Standards.

In the second case the only remedy lies is to issue further shares to one of the member such that to reduce the shareholding less then 51%.

Regards,

Hitesh K

www.cautility.in