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Contents and form of accounts; computation and treatment of profits and losses.
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149.—(1) Every balance sheet of a company shall give a true and fair view of the state of affairs of the company as at the end of its financial year, and every profit and loss account of a company shall give a true and fair view of the profit or loss of the company for the financial year.
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(2) A company's balance sheet and profit and loss account shall comply with the requirements of the Sixth Schedule so far as applicable thereto.
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(3) Save as expressly provided in the following provisions of this section or in Part III of the Sixth Schedule, the requirements of subsection (2) and of the Sixth Schedule shall be without prejudice either to the general requirements of subsection (1) or to any other requirements of this Act.
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(4) Subsections (1) and (2) shall not apply to a company's profit and loss account if—
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(a) the company has subsidiaries; and
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(b) the profit and loss account is framed as a consolidated profit and loss account dealing with all or any of the company's subsidiaries as well as the company; and—
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(i) complies with the requirements of this Act relating to consolidated profit and loss accounts, and
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(ii) shows how much of the consolidated profit or loss for the financial year is dealt with in the accounts of the company.
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(5) The profits or losses attributable to any shares in a subsidiary for the time being held by a holding company or any other of its subsidiaries shall not, for any purpose, be treated in the holding company's accounts as revenue profits or losses so far as they are profits or losses for the period before the date on or as from which the shares were acquired by the company or any of its subsidiaries, and for the purpose of determining whether any profits or losses are to be treated as profits or losses for the said period the profit or loss for any financial year of the subsidiary may, if it is not practicable to apportion it with reasonable accuracy by reference to the facts, be treated as accruing from day to day during that year and be apportioned accordingly. Provided, however, that where the directors and the auditors are satisfied and so certify that it would be fair and reasonable and would not prejudice the rights and interests of any person, the profits or losses attributable to any shares in a subsidiary may be treated in a manner otherwise than in accordance with this subsection.
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(6) (a) A capital surplus arising on the revaluation of unrealised fixed assets shall not be treated as being available, directly or indirectly, for distribution in dividends or for paying up debentures or other loan stock or for paying calls on partly paid shares.
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(b) An unrealised net capital surplus (established by bona fide revaluation of all the fixed assets of the company) in excess of the previous book value of the assets may be used in paying up unissued shares of the company, other than redeemable preference shares, to be issued to members as fully paid bonus shares.
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(7) If any person being a director of a company fails to take all reasonable steps to secure compliance in relation to any account laid before the annual general meeting of a company with this section and with the other requirements of this Act as to the matters to be stated in accounts, he shall, in respect of each offence, be liable on summary conviction to imprisonment for a term not exceeding 6 months or to a fine not exceeding £100 or to both, so, however, that—
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(a) in any proceedings against a person in respect of an offence under this section, it shall be a defence to prove that he had reasonable ground to believe and did believe that a competent and reliable person was charged with the duty of seeing that the said provisions or the said other requirements, as the case may be, were complied with and was in a position to discharge that duty; and
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(b) a person shall not be sentenced to imprisonment for any such offence unless, in the opinion of the court dealing with the case, the offence was committed wilfully.
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(8) For the purposes of this section and the following provisions of this Act, unless the contrary intention appears—
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(a) any reference to a balance sheet or profit and loss account shall include any notes thereon or document annexed thereto giving information which is required by this Act and is thereby allowed to be so given; and
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(b) any reference to a profit and loss account shall be taken, in the case of a company not trading for profit, as referring to its income and expenditure account, and references to profit or to loss and, if the company has subsidiaries, references to a consolidated profit and loss account shall be construed accordingly.
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