query regarding holding %age

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H limited and its subsidiary S limited

 

Equity shares (Rs. 10) fully paid of H limited =12000 lakh

Equity shares (Rs. 10) fully paid of S limited = 4800 lakh

 

  1. H Limited purchased 180 lakhs shares in S Ltd. on 01-04-2008.
  2. On 01-01-2009 S Ltd. issued 3 fully paid-up shares for every 5 shares held as bonus shares out of balances in its general reserve as on 30-03-2008.

 

Doubt

 

  1. What date should be considered for calculating the number of shares held by holding company to know the holding status?
  2. If, holding % is calculated after adding the bonus shares issued by subsidiary company then logically the % will remain the same as the total number of shares increases automatically. 

 

As per study material

On 01-04-2008 Original purchase-180 lakh shares

On 01-01-2009 Bonus issue 180*3/5=108 lakh shares

On 31-03-2009 total number of shares held by H ltd. in S ltd. =288 lakh shares

 

Total shares outstanding in S ltd (4800 lakh/Rs10) =480

% of holding (288/480) =60%

 

Why the bonus shares are not included in the total shares outstanding on 31-03-2009.

Replies (1)

4800 lakh shares of S ltd includes bonus shares as well....

The Status of Equity capital given is that of Date of consolidation, i.e. on 31.03.2009...

note that bonus issue was on 1.01.2009, thus its adjustment is already done in the books..

before bonus the number of equity shares in S ltd was- 300 ie. 180/60% ( H ltd's Holding was of 180 shares)

Bonus issue was 300*3/5= 180 shares, of which H ltd got 60% ie 108 shares,

thus H ltd's total holding is 180+108 shares= 288 shares, which is 60%. Thus Holding Ratio remains same....

Also,  Answer to First Query will be same as there was 60% holding frm the beginning so no Question arises regarding date of holding. it will be same as 1.4.2008


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