Companies (Amendment) Act, 1986

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Publication of information regarding subsidiary and associated companies.

16.—(1) Subject to the provisions of this section, where at the end of the financial year of a company, the company—

(a) has a subsidiary, or

(b) is beneficially entitled to more than 20 per cent. in nominal value of the shares carrying voting rights (other than voting rights which arise only in specified circumstances) in another body corporate that is not its subsidiary (in this section referred to as “an associated company”) or to more than 20 per cent. in nominal value of the allotted share capital of another body corporate that is not its subsidiary (in this section also referred to as “an associated company”),

a note shall be included in the accounts of the company for that year annexed to the annual return distinguishing between the subsidiaries and the associated companies and giving the following information in relation to them—

(i) the name and registered office of each subsidiary or associated company and the nature of the business carried on by it,

(ii) the identity of each class of shares held by the company in each subsidiary or associated company and the proportion of the nominal value of the allotted shares in the subsidiary or associated company of each such class represented by the shares of that class held by the company,

(iii) the aggregate amount of the capital and reserves of each subsidiary or associated company as at the end of the financial year of the subsidiary or associated company ending with or last before the end of the financial year of the company to which the accounts relate, and

(iv) the profit or loss of the subsidiary or associated company for the financial year thereof mentioned in paragraph (iii) of this subsection.

(2) Paragraphs (iii) and (iv) of subsection (1) of this section shall not apply—

(a) in respect of a subsidiary of a company, if the company is exempt from preparing group accounts by virtue of section 150 (2) (a) of the Principal Act or the company prepares group accounts and either—

(i) the accounts of the subsidiary are included in the group account, or

(ii) the investment of the company in the shares of the subsidiary is included in or in a note to the company's accounts by way of the equity method of valuation,

or

(b) in respect of an associated company of a company if the investment of the company in the shares of the associated company is included in or in a note to the company's accounts by way of the equity method of valuation,

or

(c) if—

(i) the subsidiary or the associated company is not required to publish its accounts, and

(ii) the shares held by the company in the subsidiary or the associated company do not amount to at least one-half in nominal value of the allotted share capital of the subsidiary or the associated company,

or

(d) if the information specified in subsection (1) of this section is not material.

(3) (a) Subject to paragraph (b) of this subsection, the information specified in subsection (1) of this section may, in lieu of Being stated in a note to the accounts of the company concerned for any particular financial year of the company, be given in a statement in writing signed by a director, and the secretary, of the company and annexed to the first annual return made by the company next after its accounts for that year are laid before the annual general meeting of the company if, in the opinion of the directors of the company, compliance with subsection (1) of this section would require a note to the accounts of the company of excessive length.

(b) Paragraph (a) of this subsection shall not apply in relation to information concerning a subsidiary or associated company of a company (referred to subsequently in this paragraph as the “second-mentioned company”) if the financial state of the subsidiary or associated company, as disclosed by its accounts, has, in the opinion of the directors of the second-mentioned company, a substantial effect on the profit or loss, or the amount of the assets, of the second-mentioned company and its subsidiaries.

(c) A copy of a statement annexed, pursuant to paragraph (a) of this subsection, to the annual return referred to in that subsection made by a company shall be certified both by a director, and the secretary, of the company to be a true copy of such statement.

(4) For the purpose of this section, shares in a company being a subsidiary or associated company of another company, shall be treated as being held, or as not being held, by that other company if they would, by virtue of section 155 (3) of the Principal Act be treated as being held or, as the case may be, as not being held by that the company for the purpose of determining whether the first-mentioned company is that other company's subsidiary.

(5) Subsections (4) and (5) of section 158 of the Principal Act shall not apply to a company to which this section applies.

(6) In addition to applying to a company, this section applies to a body corporate which, if it were a company, would be a subsidiary or an associated company.