Section 4 of Companies Act

Company X is a project company.

Company A is holding 51% shares in Company X and Company B is holding 49% in Company X

The Board of Company X has been nominated by Company B and Company A is not showing Company X as its subsidiary in its books of accounts as per Section 212

Furthermore Company X has entered into an agreement with the state government that the shareholding pattern of Company X will be Company A - 51% and Company B - 49% and the same will be locked in for next 5 years

Now the query is Which company should treat Company X as a Subsidiary as per Section 4 of the Companies Act 1956.

Company A ???? who is holding 51% in the equity share capital of Company X

or

Company B ??? who has nominated the board of directors of Company X.

Regards

Karan