RESEARCH TOPIC
Polaris Ltd is a public company which is listed on the Australian Securities Exchange and has numerous small shareholders. Polaris Ltd owns 35% of the issued ordinary shares of Beta Ltd. The remaining shares of Beta Ltd are widely distributed among numerous small shareholders, none of which own more than 4% of Beta Ltd. Beta Ltd's constitution provides that at general meetings of the company, ordinary shareholders are entitled to vote on resolutions and elect directors, on the basis of one vote per ordinary share.
At general meetings of Beta Ltd, resolutions proposed by Polaris Ltd are invariable passed, and candidates for directorships nominated by Polaris Ltd are invariable elected, because many small shareholders in Beta Ltd do not exercise their right to attend general meetings and vote.
REQUIRED
Advise Polaris Ltd whether it is required to produce consolidated financial statements (CFS). Consider the levels of control and the members' rights in your answer.