1. A Member State shall require any undertaking governed by its national law to draw
up consolidated accounts and a consolidated annual report if that undertaking (a parent undertaking):
(a)
has a majority of the shareholders' or members' voting rights in another undertaking
(a subsidiary undertaking); or
(b)
has the right to appoint or remove a majority of the members of the administrative,
management or supervisory body of another undertaking (a subsidiary undertaking) and is at the
same time a shareholder in or member of that undertaking; or
(c)
has the right to exercise a dominant influence over an undertaking (a subsidiary
undertaking) of which it is a shareholder or member, pursuant to a contract entered into with that undertaking or to a provision in its
memorandum or articles of association, where the law governing that subsidiary undertaking permits its being subject to such
contracts or provisions. A Member State need not prescribe that a parent undertaking must be a shareholder in or
member of its subsidiary undertaking. Those Member States the laws of which do not provide for such contracts or
clauses shall not be required to apply this provision; or
(d)
is a shareholder in or member of an undertaking, and:
(aa)
a majority of the members of the administrative, management or supervisory bodies of that undertaking
(a subsidiary undertaking) who have held office during the financial year, during the preceding financial year
and up to the time when the consolidated accounts are drawn up, have been appointed solely as a result of the
exercise of its voting rights; or
(aa)
controls alone, pursuant to an agreement with other shareholders in or members of that undertaking
(a subsidiary undertaking), a majority of shareholders' or members' voting rights in that undertaking. The Member
States may introduce more detailed provisions concerning the form and contents of such agreements.
The Member States shall prescribe at least the arrangements referred to in (bb) above.
They may make the application of (aa) above dependent upon the holding's representing 20 % or
more of the shareholders' or members' voting rights.
However, (aa) above shall not apply where another undertaking has the rights referred to in
subparagraphs (a), (b) or (c) above with regard to that subsidiary undertaking.
2 . Apart from the cases mentioned in paragraph 1 above and pending subsequent coordination, the Member States may
require any undertaking governed by their national law to draw up consolidated accounts and a consolidated annual
report if that undertaking (a parent undertaking) holds a participating interest as defined in Article 17 of
Directive 78/660/EEC in another undertaking (a subsidiary undertaking), and:
(a)
it actually exercises a dominant influence over it; or
(b)
it and the subsidiary undertaking are managed on a unified basis by the parent undertaking.