Lita Ltd is a Japanese entity that has successfully developed a material. It is an essential input
Question:
Lita Ltd is a Japanese entity that has successfully developed a material. It is an essential input for Tera Ltd and Yoyo Ltd’s manufacturing processes and both of these companies are customers of Lita Ltd. Below are the details of Nara Ltd’s shareholders and directors.
Name of shareholder, % of ordinary voting shares owned, Number of positions held on Lita Ltd board of directors
Tera Ltd 31% 4
Yoyo Ltd 23% 2
Yaris Ltd 24% 2
The remaining shares are widely held by several independent unrelated individuals. Tera Ltd is not related to Yoyo Ltd or Yaris Ltd, but Yoyo Ltd is a wholly-owned subsidiary of Yaris Ltd. The other three of the 11 seats on Lita Ltd’s board of directors are held by independent directors.
On the basis of the above information and requirements of AASB10, discuss whether Lita Ltd is a subsidiary of Tera Ltd, Yoyo Ltd, or Yaris Ltd.