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Query

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Arpit Pachisia

734 Points Posted on 16 August 2014

Hello Friends,

As per previous defination of Subsidiary co. while calculating Holding % we took %on "paid up equity share capital".

But now as per Co. act 2013 Defination of subsidiary: it states: Holding co which exercises or controls more than 50% of the " TOTAL SHARE CAPITAL"

So now if A B Equity capital

Eq capital 500,000 300,000

Pref sh capital 300,000 200,000

A Co. holds 200,000 Equity shares and 40,000 preference shares of B Co. than what will be the holding Ratio to be used in Calculation of Minority interest, Cost of control.

What will be the ratios to be used while calculating CONSOLIADTED FIN. ST. Questions in NOV 2014?

Thanking you

Replies (1)

RoHaN k

CA & CS

308 Points Posted on 16 August 2014

“Total Share Capital”, for the purposes of clause (6) and clause (87) of section 2, means the aggregate of the -

(a) paid-up equity share capital; and
(b) convertible preference share capital.

As per my view ,in your case while calculating Holding % you may take seperate % for Equity and prefrence. If there are convertible preference shares into equity then only it will come under purview of Total Share Capital and according will have to decide holding %.