investment by holding company in its subsidiary co.

Neha Jain (Company Secretary) (25 Points)

11 November 2009  

 Hi all, 

please help me 

A holding Co.(listed) has given advance to its subsidiary co (Pvt.) for purchase of land. In the balance sheet of both the companies the amount is shown under the head loans & advances.Now the subsidiary company want to issue preference shares(at a premium) in lieu of this advance money. Kindly let me kno is this possible. can an advance be treated as share application money. if yes wat will be the procedure and which section of companies act is to be followed.