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Definition

The Companies Act (71 of 2008), states that a company is considered to be a subsidiary of another company if the parent company owns more than 50 % of voting rights in that company or it has the right to appoint or remove directors holding the majority of voting rights at board meetings. In terms of the Companies Act the balance sheet, income statement and flow of funds statement of a subsidiary must be consolidated with that of its parent to make group financial statements.

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