HL Deb 13 November 1989 vol 512 cc1141-7

373 Schedule 7, page 192, line 2, leave out from beginning to end of line 3.

374 Page 192, line 5, at end insert — '1A. In section 209(5)(a)(i) for "an authorised institution" substitute "a banking company".'.

375 Page 192, line 17, leave out from 'with' to 'insurance' in line 18 and insert 'the special provisions of Part VII relating to banking or'.

376 Page 192, line 21, at end insert — '8A. In sections 338(4), 339(4), 343(1) and 344(2) for "an authorised institution", wherever occurring, substitute "a banking company".'.

377 Page 192, line 22, after '343(2)' insert 'and 4'.

378 Page 192, line 23, leave out 'Schedule 9B' and insert 'Part IV of Schedule 9'.

379 Page 192, line 24, leave out paragraph 10.

380 Page 193, line 12, leave out from beginning to end of line 14 and insert — '702. —(1) An overseas company shall in respect of each financial year of the company deliver to the registrar copies of the accounts and reports prepared in accordance with section 700. If any document comprised in those accounts or reports is in a language other than English, the directors shall annex to the copy delivered a translation of it into English, certified in the prescribed manner to be a correct translation.'.

381 Page 193, line 16, leave out 'the delivering of' and insert 'delivering'.

382 Page 193, line 23, leave out from 'Britain' to end of line 26.

383 Page 193, line 29, leave out 'for delivering accounts'.

384 Page 193, line 41, leave out from beginning to end of line 43 and insert — '703. —(1) If the requirements of section 702(1) are not complied with before the end of the period allowed for delivering accounts and reports, or if the accounts and reports delivered do not comply with the requirements of this Act, the company and every person who immediately before the end of that period was a director of the company is guilty of an offence and liable to a fine and, for continued contravention, to a daily default fine. (2) It is a defence for a person charged with such an offence to prove that he took all reasonable steps for securing that the requirements in question would be complied with. (3) It is not a defence in relation to a failure to deliver copies to the registrar to prove that the documents in question were not in fact prepared as required by this Act.'.

385 Page 193, line 45, at end insert — '13A. For section 742 (expressions used in connection with accounts) substitute —

"Expressions used in connection with accounts.

742. —(1) In this Act, unless a contrary intention appears, the following expressions have the same meaning as in Part VII (accounts)— annual accounts", accounting reference date" and "accounting reference period", balance sheet" and "balance sheet date", current assets", financial year", in relation to a company, fixed assets", parent company" and "parent undertaking", profit and loss account", and subsidiary undertaking".

(2) References in this Act to "realised profits" and "realised losses", in relation to a company's accounts, shall be construed in accordance with section 262(2A).'.

386 Page 193, line 45, at end insert — '13B. In section 744 (interpretation), omit the definition of "authorised institution" and at the appropriate place insert — 'banking company' means a company which is authorised under the Banking Act 1987;".

387 Page 194, leave out from '(1)' to 'and' in line 6 and insert omit paragraph 60(2) of Schedule 4, or paragraph 19(3) of Schedule 9";'.

388 Page 194, line 9, leave out '(2)' and insert '(1)'.

389 Page 194, line 12, leave out sub-paragraph (5) and insert — '(5) In paragraph 4—

  1. (a) in sub-paragraph (1) omit "(whether as personal representative or otherwise)", and
  2. (b) in sub-paragraph (2) omit ", paragraph 60(2) of Schedule 4 and paragraph 19(3) of Schedule 9";
and at the end add — (3) As respects sections 145, 146 and 148, sub-paragraph (1) above applies where a company is a personal representative as it applies where a company is a trustee.".'.

390 Page 195, line 24, leave out '(whether as personal representative or otherwise)'.

391 Page 195, line 34, leave out sub-paragraph (2) and insert — '(2) "Undertaking" and "shares", in relation to an undertaking, have the same meaning as in Part VII.'.

392 Page 195, line 46, at end insert — '15A. —(1) Part II of Schedule 3 (prospectuses: auditors' and accountants' reports to be set out) is amended as follows. (2) In paragraph 16 (auditors' reports), in sub-paragraph (2) for "subsidiaries" substitute "subsidiary undertakings" and for sub-paragraph (3) substitute — (3) If the company has subsidiary undertakings, the report shall —

  1. (a) deal separately with the company's profits or losses as provided by sub-paragraph (2), and in addition deal either —
    1. (i) as a whole with the combined profits or losses of its subsidiary undertakings, so far as they concern members of the company, or
    2. (ii) individually with the profits or losses of each of its subsidiary undertakings, so far as they concern members of the company,
    or, instead of dealing separately with the company's profits or losses, deal as a whole with the profits or losses of the company and (so far as they concern members of the company) with the combined profits and losses of its subsidiary undertakings; and
  2. (b) deal separately with the company's assets and liabilities as provided by sub-paragraph (2), and in addition deal either —
    1. (i) as a whole with the combined assets and liabilities of its subsidiary undertakings, with or without the company's assets and liabilities, or
    2. (ii) individually with the assets and liabilities of each of its subsidiary undertakings,
    indicating, as respects the assets and liabilities of its subsidiary undertakings, the allowance to be made for persons other than members of the company.".
(3) For paragraph 18 (accountants' reports) substitute — 18. —(1) The following provisions apply if —
  1. (a) the proceeds of the issue are to be applied directly or indirectly in any manner resulting in the acquisition by the company of shares in any other undertaking, or any part of the proceeds is to be so applied, and
  2. (b) by reason of that acquisition or anything to be done in consequence of or in connection with it, that undertaking will become a subsidiary undertaking of the company.
 (2) There shall be set out in the prospectus a report made by accountants upon —
  1. (a) the profits or losses of the other undertaking in respect of each of the five financial years immediately preceding the issue of the prospectus, and
  2. (b) the assets and liabilities of the other undertaking at the last date to which its accounts were made up.
 (3) The report shall —
  1. (a) indicate how the profits or losses of the other undertaking would in respect of the shares to be acquired have concerned members of the company and what allowance would have fallen to be made, in relation to assets and liabilities so dealt with, for holders of other shares, if the company had at all material times held the shares to be acquired, and
  2. (b) where the other undertaking is a parent undertaking, deal with the profits or losses and the assets and liabilities of the undertaking and its subsidiary undertakings in the manner provided by paragraph 16(3) above in relation to the company and its subsidiary undertakings.
 (4) In this paragraph "undertaking" and "shares", in relation to an undertaking, have the same meaning as in Part VII.". (4) In paragraph 22 (eligibility of accountants to make reports), for sub-paragraph (2) substitute — (2) Such a report shall not be made by an accountant who is an officer or servant, or a partner of or in the employment of an officer or servant, of —
  1. (a) the company or any of its subsidiary undertakings,
  2. (b) a parent undertaking of the company or any subsidiary undertaking of such an undertaking.".'.

393 Page 194, line 49, leave out paragraph 17 and insert — 17. —(1) Schedule 11 is amended as follows. (2) For the heading substitute 'MODIFICATIONS OF PART VIII WHERE COMPANY'S ACCOUNTS PREPARED IN ACCORDANCE WITH SPECIAL PROVISIONS FOR BANKING OR INSURANCE COMPANIES'. (3) In paragraphs 1 and 2(a) for "Schedule 9" substitute "Part I of Schedule 9". (4) In paragraph 4 —

  1. (a) in sub-paragraph (a) for "Schedule 9" substitute "Part I of Schedule 9", and
  2. (b) omit sub-paragraphs (b) and (c).
(5) In paragraph 5 —
  1. (a) in sub-paragraph (a) for "Part III of Schedule 9" substitute "paragraph 27 or 28 of Schedule 9", and
  2. (b) omit sub-paragraph (b).
 (6) In paragraph 6 —
  1. (a) in sub-paragraph (a), for "section 228" substitute "section 226" and for "section 258 and Schedule 9" substitute "section 255 and Part I of Schedule 9", and
  2. (b) in sub-paragraph (b), for "Part III of Schedule 9" substitute "paragraph 27 or 28 of Schedule 9".
 (7) In paragraph 7(a) for "Schedule 9" substitute "Part I of Schedule 9".'.

394 Page 196, line 7, leave out paragraph 18 and insert — '18. —(1) In Schedule 15A (renumbered 15B) (provisions applicable to mergers and divisions of public companies), paragraph 6 (documents to be made available for inspection) is amended as follows. (2) In sub-paragraph (1)(b) (directors' report on merger or division), after "directors' report" insert "referred to in paragraph 4 above". (3) For sub-paragraph (1)(d) and (e) substitute —"(d) the company's annual accounts, together with the relevant directors' report and auditors' report, for the last three financial years ending on or before the relevant date; and (e) if the last of those financial years ended more than six months before the relevant date, an accounting statement in the form described in the following provisions.". (4) In sub-paragraph (1), after the paragraphs add — In paragraphs (d) and (e) "the relevant date" means one month before the first meeting of the company summoned under section 425(1) or for the purposes of paragraph 1.". (5) For sub-paragraphs (2) to (5) substitute — (2) the accounting statement shall consist of —

  1. (a) a balance sheet dealing with the state of the affairs of the company as at a date not more than three months before the draft terms were adopted by the directors, and
  2. (b) Where the company would be required to prepare group accounts if that date were the last day of a financial year, a consolidated balance sheet dealing with the state of affairs of the company and its subsidiary undertakings as at that date.
(3) The requirements of this Act as to balance sheets forming part of a company's annual accounts, and the matters to be included in notes thereto, apply to any balance sheet required for the accounting statement, with such modifications as are necessary by reason of its being prepared otherwise than as at the last day of a financial year. (4) Any balance sheet required for the accounting statement shall be approved by the board of directors and signed on behalf of the board by a director of the company. (5) In relation to a company within the meaning of Article 3 of the Companies (Northern Ireland) Order 1986, the references in this paragraph to the requirements of this Act shall be construed as reference to the corresponding requirements of that Order.".'.

395 Page 196, line 35, at end insert — '18A. In Schedule 22 (provisions applying to unregistered companies), in the entry relating to Part VII, in column I, for "Schedule 10" substitute "Schedules 10 and 10A".'.

396 Page 196, line 36, leave out paragraph 19.

397 Page 196. line 45, column 2, leave out '224(4)' and insert '222(4)'.

398 Page 197, line 1, column 2, at end insert —

'In column 2, for "the section" substitute 'Part VII".'.

399 Page 197, line 7, column 2, at end insert —

'In column 2, for "company accounts" substitute "company's annual accounts, directors' report and auditors' report".'.

400 Page 197, line 8, leave out the words in column 2 and insert 'Omit the entry.'.

401 Page 197, line 15, leave out from beginning to 'requirements' in line 16 and insert 'Failure to comply with'.

402 Page 197, line 20, at end, insert —

'233(4A) Approving defective accounts 2. On indictment A fine.
2. Summary. The statutory maximum.'.

403 Page 197, line 26, at end insert —

'252(6) Failure to comply with requirements in relation to summary financial statements. Summary. One-fifth of the statutory maximum.',

404 Page 197, line 26, at end insert — '(4) In the entry for section 703(1) (failure by oversea company to comply with requirements as to accounts and reports), in column 2 for the words from "s. 700" to the end substitute "requirements as to accounts and reports".'.

405 Page 198, line 12, at end insert —

'Aircraft and Shipbuilding Industries Act 1977

23A. —(1) Section 17 of the Aircraft and Shipbuilding Industries Act 1977 (British Shipbuilders: accounts and audit) is amended as follows.

(2) In subsection (1)(c) (duty to prepare consolidated accounts) for "subsidiaries" substitute "subsidiary undertakings".

(3) In subsection (9) (copies of accounts to be sent to the Secretary of State) for "subsidiaries" substitute "subsidiary undertakings" and for "subsidiary" substitute "subsidiary undertaking".

(4) After subsection (9) add — (10) In this section "subsidiary undertaking" has the same meaning as in Part VII of the Companies Act 1985.".

Crown Agents Act 1979

23B. In section 22 of the Crown Agents Act 1979 (accounts and audit), in subsection (2) (duty to prepare consolidated accounts) for "subsidiaries" (three times) substitute "subsidiary undertakings", and at the end of that subsection add — In this subsection "subsidiary undertaking" has the same meaning as in Part VII of the Companies Act 1985.".'.

406 Page 198, line 15, leave out '(3)(c)(i)' and insert '(1)(c)(i)'.

407 Page 198, line 23, at end insert —

'Oil and Pipelines Act 1985

26A. In Schedule 3 to the Oil and Pipelines Act 1985 (Oil and Pipelines Agency: financial and other provisions), in paragraph 9(2) (duty to prepare consolidated accounts) for "subsidiaries" (three times) substitute "subsidiary undertakings", and at the end of that sub-paragraph add — In this sub-paragraph "subsidiary undertaking" has the same meaning as in Part VII of the Companies Act 1985.".

Patents, Designs and Marks Act 1986

26B. In Schedule 2 to the Patents, Designs and Marks Act 1986 (service marks), in paragraph 1(2) (provisions in which reference to trade mark includes service mark) for sub-paragraph (ii) substitute — (ii) Part I of Schedule 4 and paragraphs 5(2)(d) and 10(1)(b) and (2) of Schedule 9 (form of company balance sheets); and".'.

408 Page 198, line 27, leave out from '(b)' to end of line and insert '(default orders)—

  1. (a) in sub-paragraph (i) for "section 244" substitute "section 242(4)", and
  2. (b) after that sub-paragraph insert—
(ia) section 245B of that Act (order requiring preparation of revised accounts),'.

409 Page 199, line 15, at end insert — '(1A) In section 46(2) (duties of auditor of authorised institution), in paragraph (c) for "section 236" substitute "section 235(2)" and for "section 237" substitute "section 235(3) or section 236"; and in section 46(4) (adaptation of references for Northern Ireland) for "236 and 237" substitute "235(2) and 235(3) and 236".'.

410 Page 199, line 41, at end insert—

'Income and Corporation Taxes Act 1987

30. —(1) The Income and Corporation Taxes Act 1988 is amended as follows.

(2) In section 180 (annual return of registered profit related pay scheme), in subsection (3) for "section 242(3)" substitute "section 244(3)".

(3) In section 565(6) (conditions for exemption from provisions relating to sub-contractors in construction industry: compliance with requirements of Companies Act 1985), in paragraph (a) for "section 227 and 241" substitute "sections 226, 241 and 242".

Dartford-Thurrock Crossing Act 1988 (c.20)

31. In section 33 of the Dartford-Thurrock Crossing Act 1988 (duty to lay before Parliament copies of accounts of persons appointed to levy tolls), for subsection (2) substitute — (2) In relation to a company "accounts" in subsection (1) means the company's annual accounts for a financial year, together with the relevant directors' report and the auditors' report on those accounts. Expressions used in this subsection have the same meaning as in Part VII of the Companies Act 1985.".'.

Lord Trefgarne

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 373 to 410. They simply tidy up and complete Schedule 7 to the Bill which makes changes consequential on Part I of the Bill.

Moved, That the House do agree with the Commons in the said amendments.—(Lord Trefgarne.)

Lord Williams of Elvel

My Lords, this is a large grouping to which we have not objected although a large number of points are covered. As the Minister has said, they are in general tidying up amendments. I wish to ask one question concerning banking companies which are the subject of Amendments Nos. 374 and 376. I understand that within the European Community there are moves to issue a draft directive on banking company accounts. As the noble Lord is aware, we on this side of the House believe that banking companies should be treated in exactly the same way as other companies. Can the noble Lord give us any indication of what progress is being made so that we can know roughly how long these amendments will stay on the statute?

Lord Trefgarne

My Lords, I am afraid that I do not have that information to hand. However, I shall very readily find that out and convey it to the noble Lord.

On Question, Motion agreed to.