Holding subsidiary relation and consolidation of financials


As per section 2(87) of Companies Act, 2013, A subsidiary company is a one in which more than one-half of the total share capital of the company is being held by any other company.
 
Further, as per Rule 2(1)(r) of the Companies (Specification of Definition Details) Rules, 2014, total share capital consists of paid up equity share capital and convertible preference share capital
 
In view of the above 2 sections, in case the existing preference shares are converted into compulsory redeemable preference shares, then the holding-subsidiary relation will cease to exist and Consolidation of Financials will not be applicable to it?

 
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