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Small and medium company

Karan (Employee) (77 Points)

26 September 2014

Hi all,

Is a subsidiary of Non-SMC always a Non-SMC?

All your answers are appreciated

thank you

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P C Agrawal (Registered independent director Past Ch) (8229 Points)
Replied 13 November 2014

Yes, refer Rule 2(1)(f) of Companies (Accounting Standards) Rules 2006 which reads as under:

(f) "Small and Medium Sized Company" (SMC) means, a company—

(i) whose equity or debt securities are not listed or are not in the process of listing on any stock exchange, whether in India or outside India;

(ii) which is not a bank, financial institution or an insurance company;

(iii) whose turnover (excluding other income) does not exceed rupees fifty crore in the immediately preceding accounting year;

(iv) which does not have borrowings (including public deposits) in excess of rupees ten crore at any time during the immediately preceding accounting year; and

(v) which is not a holding or subsidiary company of a company which is not a small and medium-sized company.

Explanation : For the purposes of clause (f), a company shall qualify as a Small and Medium Sized Company, if the conditions mentioned therein are satisfied as at the end of the relevant accounting period.