Answer / chalapathi rao govada

Accounting stnadard 21 issued by ICAI

A company which holds or controls the other company either
by share holdings or Majority on Board of directors either
singly or along with its subsidiaries the former company is
known as Holding company.

summary:
One company controls the other company by way of

1)Holding more than 50% of the paid up share capital
2)Holding the majority of on the Board of directors.

either singly or together with its subsidiaries, the first
company is known as holding company and the later company
is known as subsidiary compnay.

AS-21 explains the methodology for preparation of
consolidated financial statements for holding companies to
represents its holdings in its subsidiaries.

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