A group company is defined as a holding company (also known as a Parent company) and its subsidiaries that together form a group due to a common source of control.
A group company will be exempt from annual audit of its accounts if the holding and all subsidiary companies individually:
- Fulfil at least 2 of the small company qualifying conditions and
- Belong to a “small group”
To qualify as a “small group”, the group (comprising of all the companies) must fulfil two out of the following three conditions in the immediate two preceding financial years:
- The consolidated revenue must not exceed S$ 10 million;
- The consolidated total assets must not exceed S$ 10 million;
- The total number of employees of the group must not exceed 50.
In other words, this means that to qualify for the audit exemption, the individual subsidiary companies as well as the holding company, as a group, must fulfil the eligibility criteria of a small company.