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Listed holding companies should pay attention, supervise functioning of unlisted subsidiaries. There are more requirements for Unlisted Material Subsidiaries (Contributed 20% or more of consolidated net income or net worth in immediately preceding accounting year)
All Unlisted Subsidiaries
1. Bring to notice of BOD of listed company all significant transactions & arrangements (exceed 10% of totals as per preceding year) entered by such subsidiary
2. Minutes of BOD meetings should be placed at BOD meeting of listed company.
3. Audit Committee should review financial statements (in particular investments)
Material Unlisted Subsidiaries
1. At least one independent director from holding company should be director at such company.
2. Shall not dispose shares and reduce holding below 50% or cease control unless approved by special resolution or approval by court / tribunal
3. Shall not sale / dispose / lease more than 20% of assets during financial year unless approved by special resolution or approval by court / tribunal
Above requirements will also be applicable for listed subsidiaries with respect to its subsidiaries.)