If your client has shown amount due to subsidiaries in their books of accounts, you can verify it in the following ways:

• Examine whether the subsidiary company is authorized by its Memorandum of Association to advance the loan to the holding company.
• Verify the interest rate at which the loan has been obtained and particulars of the security that has been furnished for confirming the amount of interest and disclosure of the charge in the Balance Sheet.
• Inspect the documents executed by the holding company which constitute the basis of the loan and the provision in the Memorandum under which the loan has been raised.
• Verify by reference to the Balance Sheet of the subsidiary company that the loan is duly reflected in the Balance Sheet as a loan due from the holding company.
• Amounts due to subsidiary companies may be on account of credit purchases at goods or services which should be verified with the relevant documentary evidences.
• Confirm whether the provisions of section 189 of the Companies Act, 2013 (related to maintenance of register of contracts or arrangements), wherever applicable, have been complied with.
• Verify that the loan has been properly reflected in the Balance Sheet as per the requirements of Schedule III to the Companies Act, 2013.