S.I. No. 201/1992 - European Communities (Companies: Group Accounts) Regulations, 1992

S.I. No. 201 of 1992.

EUROPEAN COMMUNITIES (COMPANIES: GROUP ACCOUNTS) Regulations, 1992.

I, DESMOND O'MALLEY, Minister for Industry and Commerce, in exercise of the powers conferred on me by section 3 of the European Communities Act, 1972 (No. 27 of 1972), and for the purpose of giving effect to the provisions of Council Directive No. 83/349/EEC of 13 June, 1983^(1) hereby make the following Regulations:

PRELIMINARY AND GENERAL

1 Citation, commencement and construction.

1.

1. (1) These Regulations may be cited as the European Communities (Companies: Group Accounts) Regulations, 1992.

• (2) These Regulations shall be construed as one with the Companies Acts, 1963 to 1990.

2 Application.

2.

2. These Regulations shall apply to group accounts and directors' reports for financial years beginning on or after the 1st day of September, 1992.

3 Interpretation.

3.

3. (1) In these Regulations, unless the context otherwise requires—

"associated undertaking" has the meaning assigned to it by Regulation 34;

"the Directive" means EEC Council Directive 83/349/EEC;

"directors' report" is the report referred to in Regulation 37;

"group accounts" has the meaning assigned to it by Regulation 13;

"Member State" means a State which is a member of the European Communities;

"the Minister" means the Minister for Industry and Commerce;

^(1)O.J. No. L193, 18-7-1983 PP. 1-17

"parent undertaking" means an undertaking that has one or more subsidiary undertakings;

"participating interest" has the meaning assigned to it by Regulation 35;

"the Principal Act" means the Companies Act, 1963 ;

"an undertaking" means a body corporate, a partnership, or an unincorporated body of persons engaged for gain in the production, supply or distribution of goods, the provision of a service or the making or holding of investments;

"undertakings dealt with in the group accounts" shall be construed as a reference to the parent undertaking drawing up the group accounts together with any subsidiary undertakings of that parent dealt with in the group accounts (excluding any undertakings dealt with in the group accounts in accordance with Regulation 32) ;

"the 1986 Act" means the Companies (Amendment) Act, 1986 ;

"the 1990 Act" means the Companies Act, 1990 .

• (2) In these Regulations, a reference to the directors of a company shall be construed, in the case of an undertaking which does not have a board of directors, as references to the corresponding persons appropriate to such an undertaking.

• (3) In these Regulations, unless the context otherwise requires, a reference to a Regulation is to a Regulation of these Regulations, a reference to a paragraph is to the paragraph of the Regulation and a reference to a subparagraph is to the subparagraph of the paragraph, in which the reference occurs.

• (4) In these Regulations, a reference to voting rights in an undertaking means the rights conferred on shareholders in respect of their shares or, in the case of an undertaking not having a share capital, on members, to vote at general meetings of the undertaking on all, or substantially all, matters.

• (5) In these Regulations, in relation to an undertaking which does not have general meetings at which matters are decided by the exercise of voting rights, the references to holding a majority of the voting rights in an undertaking shall be construed as references to having the right under the constitution of the undertaking to direct the overall policy of the undertaking or to alter the terms of its constitution.

4 Subsidiary undertaking.

4.

4. (1) For the purposes of these Regulations, an undertaking shall be deemed to be a subsidiary of another, if but only if—

( a ) that other—

• (i) holds a majority of the shareholders' or members' voting rights in the undertaking, or

• (ii) is a shareholder or member of it and controls the composition of its board of directors, or

• (iii) is a shareholder or member of it and controls alone, pursuant to an agreement with other shareholders or members, a majority of the shareholders' or members' voting rights; or

( b ) that other has the right to exercise a dominant influence over it—

• (i) by virtue of provisions contained in its memorandum or articles, or

• (ii) by virtue of a control contract; or

( c ) that other has a participating interest in it and—

• (i) that other actually exercises a dominant influence over it, or

• (ii) that other and the subsidiary undertaking are managed on a unified basis; or

( d ) the undertaking is a subsidiary of any undertaking which is that other's subsidiary undertaking.

• (2) In determining whether one undertaking controls the composition of the board of directors of another for the purposes of paragraph 1 (a) (ii), subsection (2) of section 155 of the Principal Act shall apply to undertakings subject to these Regulations as it applies to companies subject to that section.

• (3) For the purposes of paragraph (1) (a)—

( a ) subject to paragraphs (c) and (d), any shares held or power exercisable—

• (i) by any person as a nominee for that other; or

• (ii) by, or by a nominee for, a subsidiary undertaking of that other, not being the subsidiary undertaking whose shares or board of directors are involved;

shall be treated as held or exercisable by that other,

( b ) any shares held or power exercisable by that other or a subsidiary undertaking of that other, on behalf of a person or undertaking that is neither that other nor a subsidiary undertaking of that other shall be treated as not held or exercisable by that other,

( c ) any shares held or power exercisable by that other or a nominee for that other or its subsidiary undertaking shall be treated as not held or exercisable by that other if they are held as aforesaid by way of security provided that such power or the rights attaching to such shares are exercised in accordance with instructions received from the person providing the security,

( d ) any shares held or power exercisable by that other or a nominee for that other or its subsidiary undertaking shall be treated as not held or exercisable by that other if the ordinary business of that other or its subsidiary undertaking, as the case may be, includes the lending of money and the shares are are held as aforesaid by way of security provided that such power or the rights attaching to such shares are exercised in the interests of the person providing the security.

• (4) For the purposes of paragraphs (1) (a) (i) and (iii), the total of the voting rights of the shareholders or members in the subsidiary undertaking shall be reduced by the following:—

( a ) the voting rights attached to shares held by the subsidiary undertaking in itself, and

( b ) the voting rights attached to shares held in the subsidiary undertaking by any of its subsidiary undertakings, and

( c ) the voting rights attached to shares held by a person acting in his own name but on behalf of the subsidiary undertaking or one of its subsidiary undertakings.

• (5) For the purposes of paragraph 1 (b) an undertaking shall not be regarded as having the right to exercise a dominant influence over another undertaking unless it has a right to give directions with respect to the operating and financial policies of that other undertaking which its directors are obliged to comply with.

• (6) A "control contract" as specified in paragraph 1 (b) means a contract in writing conferring such a right which—

( a ) is of a kind authorised by the memorandum or articles of the undertaking in relation to which the right is exercisable, and

( b ) is permitted by the law under which that undertaking is established.

• (7) Paragraph (5) shall not be read as affecting the construction of the expression "actually exercises a dominant influence" in paragraph 1 (c).

5 Requirement to present group accounts.

5.

5. (1) At the end of its financial year a parent undertaking shall prepare group accounts in accordance with these Regulations and such accounts shall be laid before the annual general meeting at the same time as the undertaking's annual accounts are so laid.

• (2) The group accounts referred to in (1) shall deal with the state of affairs and profit or loss of the parent undertaking and without prejudice to Regulations 10, 11 and 12, all its subsidiary undertakings including those in liquidation and those with registered offices outside the State.

• (3) Paragraph (1) shall only apply to a parent undertaking if it is established as

( a ) a company limited by shares; or

( b ) a company limited by guarantee.

• (4) In the case of an undertaking to which these Regulations apply, references in the Companies Acts, 1963 to 1990, to group accounts shall be construed as references to group accounts prepared in accordance with these Regulations and the provisions of these Regulations relating to group accounts supersede the corresponding provisions of those Acts.

• (5) A parent undertaking to which this Regulation applies shall not be entitled to take advantage of section 154 of the Principal Act in relation to the preparation of group accounts or subsections (2) or (3) of section 151 of the Principal Act in relation to the form of group accounts.

6 ..

6.

6. (1) The provisions of these Regulations concerning the layout of group accounts, the valuation methods used for determining the amounts to be included in those accounts and the information to be given in the notes on those accounts may be departed from:

( a ) with regard to an undertaking to be dealt with in the group accounts to which this Regulation applies;

( b ) where the undertakings to be dealt with in group accounts comprise principally undertakings to which this Regulation applies.

• (2) This Regulation applies to the following undertakings:

( a ) an undertaking that is the holder of a licence under the Central Bank Act, 1971 ,

( b ) an undertaking that is a trustee savings bank certified under the Trustee Savings Banks Acts, 1863 to 1965,

( c ) an undertaking engaged solely in the making of hire-purchase agreements (within the meaning of the Hire-Purchase Act, 1946 ) and credit-sale agreements (within the meaning of that Act), in respect of goods owned by the undertaking,

( d ) an undertaking engaged in the business of accepting deposits or other repayable funds or granting credit for its own account,

( e ) Agricultural Credit Corporation, public limited company,

( f ) Industrial Credit Corporation, public limited company,

( g ) an undertaking that is the holder of an authorisation under the European Communities (Non-Life Insurance) Regulations, 1976 ( S.I. No. 115 of 1976 ), or an authorisation under the European Communities (Life Assurance) Regulations, 1984 ( S.I. No. 57 of 1984 ).

7 Exemptions related to size of group.

7.

7. (1) Subject to paragraphs (2) to (8), Regulation 5 shall not apply to a parent undertaking that is a private company in any financial year if, at the balance sheet date of the parent undertaking in that financial year and in the financial year of that undertaking immediately preceding that year, the parent undertaking and all of its subsidiary undertakings together, on the basis of their latest annual accounts satisfy two of the following three qualifying conditions:

( a ) the balance sheet total of the parent undertaking and its subsidiary undertakings together does not exceed £6,000,000,

( b ) the amount of the turnover of the parent undertaking and its subsidiary undertakings together does not exceed £12,000,000, and

( c ) the average number of persons employed by the parent undertaking and its subsidiary undertakings together does not exceed 250.

• (2) In this Regulation, "balance sheet total" in relation to any financial year, means—

( a ) where Format 1 of the balance sheet Formats set out in the Schedule to the 1986 Act is adopted in the group accounts, the aggregate of the amounts shown in the consolidated balance sheet for that year under the headings corresponding to items A and B in that Format, and

( b ) where Format 2 of those formats is adopted by the company, the aggregate amounts so shown under "Assets".

• (3) In this Regulation, "amount of the turnover", in relation to any financial year, means the amounts of the turnover shown in the consolidated profit and loss account under headings corresponding to the relevant items in any of the Formats of profit and loss accounts set out in the Schedule to the 1986 Act.

• (4) In the application of this Regulation to any period which is a financial year for the purpose of the group accounts but is not in fact a year, the amounts specified in paragraph (1) (b) shall be proportionally adjusted.

• (5) An undertaking which before the commencement of these Regulations is not a parent undertaking but which becomes a parent undertaking on or after the commencement of these Regulations may avail of the exemption in paragraph (1) in respect of the financial year in which it becomes a parent if the requirements of paragraph (1) are met in that financial year.

• (6) An undertaking which was a parent undertaking before such commencement may avail of the exemption in paragraph (1) in the first financial year in which accounts of the group are to be prepared in accordance with these Regulations if the requirements of paragraph (1) are met in that financial year or in the financial year immediately preceding that year.

• (7) Where a parent undertaking qualifies to avail of the exemption provided for in paragraph (1) it shall continue to be so qualified, unless in the latest financial year of the undertaking and the financial year of the undertaking immediately preceding that year the requirements of paragraph (1) are not met.

• (8) This Regulation shall not apply where—

( a ) any shares, debentures or other debt securities of the parent undertaking or of one of its subsidiary undertakings have been admitted to official listing on a stock exchange established in a Member State, or

( b ) the parent undertaking or any of its subsidiary undertakings is an undertaking to which Regulation 6 applies.

• (9) For the purposes of this Regulation, the average number of persons employed shall be that required to be disclosed in accordance with paragraph 15 of the Schedule to these Regulations.

• (10) In determining for the purposes of paragraph (6) whether two of the three qualifying conditions therein mentioned have been met in respect of a financial year in a case where consolidated accounts in respect of that year are not prepared in accordance with these Regulations, paragraph (2) shall be construed as referring to the aggregate of any amounts included in the balance sheets of the parent and its subsidiary undertakings which correspond to the amounts mentioned in subparagraph (a) or (b), as may be appropriate, of that paragraph.

8 Exemptions for parent undertakings that are fully or 90 per cent owned subsidiary undertakings of EC undertakings.

8.

8. (1) Subject to paragraphs (3) and (4), Regulation 5 shall not apply to a parent undertaking if that parent undertaking ("the exempted parent") is itself a subsidiary undertaking of another undertaking established under the laws of a Member State ("that other parent undertaking"), and

( a ) that other parent undertaking holds all the shares in the exempted parent undertaking; or

( b ) that other parent undertaking holds 90 per cent or more of the shares of the exempted parent undertaking and the remaining shareholders in or members of the exempted parent have approved the exemption.

• (2) In determining whether paragraph (1) (a) applies shares held by directors of the exempted parent pursuant to an obligation in law or in its articles of association shall be disregarded.

• (3) Paragraph (1) shall only apply if the following conditions are met:

( a ) the exempted parent and, without prejudice to Regulations 10, 11 and 12, all of its subsidiary undertakings must be dealt with in group accounts prepared by a parent undertaking which is established under the law of a Member State, and of which the exempted parent is a subsidiary undertaking;

( b ) the group accounts referred to in subparagraph (a) and the report of the directors of the parent undertaking drawing up those group accounts must be prepared and audited according to the law of the Member State in which that parent undertaking is established and in accordance with the Directive;

( c ) the following must be annexed to the annual return of the exempted parent next after the group accounts have been prepared in accordance with subparagraph (a);

• (i) the group accounts referred to in subparagraph (a),

• (ii) the directors' report referred to in subparagraph (b), and

• (iii) the report of the person responsible for auditing the accounts referred to in subparagraph (a);.

( d ) the notes on the annual accounts of the exempted parent must disclose;

• (i) the name and registered officer of the parent undertaking that draws up the group accounts referred to in subparagraph (a), and

• (ii) the exemption from the obligation to draw up group accounts and a directors' report;

( e ) If the group accounts, directors' report or auditor's report referred to in subparagraph (c) are in a language other than the English language or the Irish language, there shall be annexed to each such document a translation in the English language or the Irish language certified in the prescribed manner to be a correct translation.

• (4) Paragraph (1) shall not apply to a parent undertaking any of whose shares, debentures or other debt securities have been admitted to official listing on a stock exchange established in a Member State.

9 Exemptions for other parent undertakings that are subsidiary undertakings of EC undertakings.

9.

9. (1) In cases not falling within Regulation 8 (1), and subject to paragraphs (2) and (3), Regulation 5 shall not apply to a parent undertaking if that parent undertaking ("the exempted parent") is itself a subsidiary undertaking of another undertaking established under the law of a Member State, and shareholders or members holding an aggregate of 10 per cent or more in nominal value of the total share capital of the exempted parent undertaking have not, at least six months before the end of the financial year of that undertaking, requested the preparation of group accounts in accordance with Regulation 5.

• (2) Paragraph (1) shall only apply if the conditions set out in paragraph (3) of Regulation 8 are met.

• (3) Paragraph (1) shall not apply to a parent undertaking any of whose shares, debentures or other debt securities have been admitted to official listing on a stock exchange established in a Member State.

10 Exclusions from consolidation.

10.

10. (1) A subsidiary undertaking need not be included in group accounts where its inclusion is not material for the purposes of Regulation 14 (1).

• (2) Where two or more undertakings satisfy the requirements of paragraph (1) they shall, notwithstanding that paragraph, be included in group accounts if taken together they are material for the purposes of Regulation 14 (1).

11 ..

11.

11. A subsidiary undertaking need not be included in group accounts where:

( a ) severe long-term restrictions substantially hinder the parent undertaking in the exercise of its right over the assets or management of that subsidiary undertaking, or

( b ) the information necessary for the preparation of group accounts in accordance with these Regulations cannot be obtained without disproportionate expense or undue delay, or

( c ) the shares of the subsidiary undertaking are held by the parent undertaking exclusively with a view to their subsequent resale.

12 ..

12.

12. (1) Where the activities of one or more subsidiary undertakings are so different from those of other undertakings to be dealt with in the group accounts that their inclusion would be incompatible with the obligation under Regulation 14 (1) to give a true and fair view, those undertakings shall be excluded from the group accounts.

• (2) Paragraph (1) shall not apply merely because some of the undertakings are industrial, some commercial and some provide services or because they carry on industrial or commercial activities involving different products or provide different services.

• (3) Without prejudice to paragraph 54 of the Schedule to the 1986 Act, any application of paragraph (1) and the reasons therefor must be disclosed in the notes on the group accounts.

• (4) The annual and group accounts, if any, of a subsidiary undertaking excluded from group accounts by virtue of the application of paragraph (1) must be returned to the registrar of companies attached to the group accounts returned by the parent undertaking or, where that parent undertaking is not required to return group accounts, to the parent's annual return.

• (5) Paragraph (4) shall not apply where the subsidiary undertaking itself has returned its annual and, where appropriate, group accounts to the registrar of companies with its own annual return.

13 General provisions in relation to group accounts.

13.

13. For the purpose of these Regulations group accounts shall comprise—

( a ) a consolidated balance sheet dealing, as provided for in these Regulations, with the state of affairs of the parent undertaking and its subsidiary undertakings as a whole,

( b ) a consolidated profit and loss account dealing, as provided for in these Regulations, with the profit or loss of the parent undertaking and its subsidiary undertakings as a whole, and

( c ) notes on the accounts giving additional information as provided for in these Regulations.

14 ..

14.

14. (1) Group accounts shall give a true and fair view of the state of affairs as at the end of the financial year and the profit or loss for the financial year of the parent undertaking and subsidiary undertakings as a whole.

• (2) Where group accounts drawn up in accordance with these Regulations would not provide sufficient information to comply with paragraph (1), any necessary additional information shall be provided in those accounts.

• (3) Where, owing to special circumstances, the preparation of group accounts in accordance with Regulations 15 to 36 and the Schedule would prevent those accounts from complying with paragraph (1) (even if additional information were provided under paragraph (2) of this Regulation), the directors of the parent undertaking shall depart from the requirements of those Regulations in preparing those group accounts so far as is necessary in order to comply with that paragraph.

• (4) Where, pursuant to paragraph (3), the directors of a parent undertaking depart from the requirements of these Regulations, they shall attach a note to the group accounts giving details of the particular departures made, the reasons therefore and the effect of those departures on the group accounts.

15 Format of accounts.

15.

15. (1) Section 4 and the Schedule to the 1986 Act shall apply to group accounts prepared in compliance with these Regulations as they apply to annual accounts prepared under that Act, with any necessary modifications to take account of differences between group accounts and annual accounts or the provisions of these Regulations.

• (2) In particular, for the purposes of paragraph 45 of the Schedule to the 1986 Act, as substituted by Paragraph 4 (2) of the Schedule to these Regulations, (dealings with or interests in group undertakings) as it applies to group accounts—

( a ) any subsidiary undertakings of the parent undertaking not dealt with in the group accounts shall be treated as a subsidiary undertaking of the group, and

( b ) if the parent undertaking is itself a subsidiary undertaking, the group shall be treated as a subsidiary undertaking of any parent undertaking of the parent undertaking, and the reference to fellow subsidiary undertakings shall be construed accordingly.

• (3) Where, in the opinion of the directors, undue expense would be incurred in showing separately items BI1 to BI4 in Balance Sheet Formats 1 and 2, those items may be combined in the group balance sheet and shown as a single item under the heading "Stocks".

16 Group balance sheet and group profit and loss account.

16.

16. The group balance sheet and group profit and loss account shall combine in full the information contained in the separate balance sheets and profit and loss accounts of the parent undertaking and of the subsidiary undertakings included in the group accounts but with adjustments required or permitted under these Regulations.

17 Acquisition and merger accounting.

17.

17. (1) The provisions set out in Regulations 18 to 22 shall apply where an undertaking becomes a subsidiary undertaking of the parent undertaking.

• (2) The event described in paragraph (1) is referred to in those provisions as an "acquisition", and references to the "undertaking acquired" shall be construed accordingly.

18 ..

18.

18. An acquisition shall be accounted for by the acquisition method of accounting unless the conditions for accounting for it as a merger are met and the merger method of accounting is adopted.

19 ..

19.

19. (1) The acquisition method of accounting is as follows.

• (2) The identifiable assets and liabilities of the undertaking acquired shall be included in the consolidated balance sheet at their fair values as at the date of acquisition. In this paragraph the "identifiable assets or liabilities" means the assets or liabilities which are capable of being disposed of or discharged separately, without disposing of a business of the undertaking.

• (3) The income and expenditure of the undertaking acquired shall be brought into the group accounts only as from the date of acquisition.

• (4) There shall be set off against the acquisition cost of the interest in the shares of the undertaking held by the undertakings dealt with in the group accounts, the interest of the undertakings dealt with in the group accounts in the adjusted capital and reserves of the undertaking acquired.

For this purpose—

"the acquisition cost" means the amount of any cash consideration and the fair value of any other consideration, together with such amounts (if any) in respect of fees and other expenses of the acquisition as the parent undertaking may determine, and

"the adjusted capital and reserves" of the undertaking acquired means its capital and reserves at the date of the acquisition after adjusting the identifiable assets and liabilities of the undertaking to fair values as at that date.

• (5) The resulting amount is positive shall be treated as goodwill and the provisions of the Schedule to the 1986 Act in relation to goodwill shall apply.

• (6) The resulting amount if negative shall be treated as a negative consolidation difference.

20 ..

20.

20. (1) Paragraph (2) shall apply where a parent undertaking acquired a subsidiary undertaking before the introduction of these Regulations but has not previously included that subsidiary undertaking in its group accounts.

• (2) For the purposes of applying the acquisition method of accounting in accordance with Regulation 19, where

( a ) there is no record of—

• (i) the fair values as at the date of acquisition of the identifiable assets and liabilities of the undertaking acquired, or

• (ii) the acquisition cost of the interest in the shares of the acquired undertaking held by the undertakings dealt with in the group accounts, or

( b ) where any such records cannot be obtained without unreasonable expense or delay,

the values of the identifiable assets and liabilities and the acquisition cost shall be taken to be the values and cost ascribed to them in the earliest available record made after the acquisition of that subsidiary undertaking.

21 ..

21.

21. (1) The conditions for accounting for an acquisition as a merger are—–

( a ) that at least 90 per cent of the nominal value of the relevant shares in the undertaking acquired is held by or on behalf of the undertakings dealt with in the group accounts,

( b ) that the proportion referred to in paragraph (a) was attained pursuant to the arrangement providing for the issue of equity shares by the undertakings dealt with in the group accounts,

( c ) that the fair value of any consideration other than the issue of equity shares given pursuant to the arrangement by the undertakings dealt with in the group accounts did not exceed 10 per cent of the nominal value of the equity shares issued.

• (2) The reference in paragraph (1) (a) to the "relevant shares" in an undertaking acquired is to those carrying unrestricted rights to participate both in distributions and in the assets of the undertaking upon liquidation.

22 ..

22.

22. (1) The merger method of accounting is as follows.

• (2) The assets and liabilities of the undertaking acquired shall be brought into the group accounts at the figures at which they stand in the undertaking's accounts, subject to any adjustment authorised or required by these Regulations.

• (3) The income and expenditure of the undertaking acquired shall be included in the group accounts for the entire financial year, including the period before the acquisition.

• (4) The group accounts shall show corresponding amounts relating to the previous financial year as if the undertaking had been included in the consolidation throughout that year.

• (5) There shall be set off against the aggregate of—–

( a ) the appropriate amount in respect of shares issued by the undertakings dealt with in the group accounts as part of the arrangement referred to in Regulation 20 (1) (b) in consideration for the acquisition of shares in the undertaking acquired, and

( b ) the fair value of any other consideration for the acquisition of shares in the undertaking acquired, determined as at the date when those shares were acquired,

the nominal value of the issued share capital of the undertaking acquired held by the undertakings dealt with in the group accounts.

• (6) The resulting amount shall be shown as an adjustment to the consolidated reserves.

23 ..

23.

23. (1) Where a group is acquired, Regulations 18 to 22 apply with the following adaptations.

• (2) References to shares of the undertaking acquired shall be construed as references to shares of the parent undertaking of the group.

• (3) Other references to the undertaking acquired shall be construed as references to the group; and references to the assets and liabilities, income and expenditure and capital and reserves of the undertaking acquired shall be construed as references to the assets and liabilities, income and expenditure and capital and reserves of the group after making the set offs and other adjustments required by these Regulations in the case of group accounts.

24 Methods of consolidation.

24.

24. (1) The methods of consolidation shall be applied consistently from one financial year to the next.

• (2) If it appears to the directors of a parent undertaking that there are special reasons for departing from the principle specified in paragraph (1), they may so depart, but particulars of the departure, the reasons for it and its effect on the balance sheet and profit or loss of the parent undertaking and subsidiaries as a whole must be disclosed in the notes to the accounts.

25 ..

25.

25. Group accounts shall show the assets, liabilities, state of affairs as at the end of the financial year and profit or loss of the parent undertaking and its subsidiary undertakings dealt with in the group accounts as if they were single undertaking. In particular:

• (i) debts and claims between the undertakings dealt with in the group accounts shall be eliminated from those accounts,

• (ii) income and expenditure relating to transactions between the undertakings dealt with in the group accounts shall be eliminated from those accounts,

• (iii) where profits and losses resulting from transactions between the undertakings dealt with in the group accounts are included in the book values of assets, they shall be eliminated from those accounts.

• (iv) paragraphs (i) to (iii) need not be complied with where the amounts involved are not material for the purpose of giving a true and fair view as required by Regulation 14.

26 ..

26.

26. (1) Group accounts must be drawn up as at the same date as the annual accounts of the parent undertaking.

• (2) If the financial year of a subsidiary undertaking dealt with in the group accounts differs from that of the parent undertaking, the group accounts shall be drawn up—

( a ) from the accounts of the subsidiary undertaking for its financial year last ending before the end of the parent undertaking's financial year provided that year ended no more than three months before that of the parent undertaking, or

( b ) from interim accounts drawn up by the subsidiary undertaking as at the end of the parent undertaking's financial year.

27 Changes in composition of group

27.

27. If the composition of the undertakings dealt with in the group accounts has changed significantly in the course of a financial year, the group accounts must include information which makes the comparison of successive sets of group accounts meaningful.

28 Valuation.

28.

28. In determining the amounts to be included in the group accounts, sections 5 and 6 of, and the valuation methods contained in the Schedule to, the 1986 Act shall apply and shall be applied consistently within those accounts.

29 ..

29.

29. (1) Subject to paragraph (2), a parent undertaking shall apply the same methods of valuation in drawing up group accounts as it applies in drawing up its annual accounts.

• (2) Subject to Regulation 28, paragraph (1) shall not apply where, in the opinion of the directors, a departure from the provisions of that paragraph is necessary for the purposes of Regulation 14 (1).

• (3) Any application of paragraph (2) and the reasons therefore shall be disclosed in the notes to the group accounts.

30 ..

30.

30. (1) Where the assets and liabilities of an undertaking to be dealt with in the group accounts have been valued by a different method to that being used in the group accounts they shall be revalued in accordance with the method used in the group accounts and subject to paragraphs (2) and (3), shall be included in the group accounts on the basis of such revaluation.

• (2) The revaluation in paragraph (1) need not be made where it is not material for the purposes of Regulation 14 (1).

• (3) If in the opinion of the directors of the parent undertaking there are special reasons for departing from the provisions of paragraph (1) they may do so and any such departure and the reasons therefore shall be stated in the notes to the group accounts.

31 ..

31.

31. Account shall be taken in the group accounts of any difference arising on consolidation between the tax chargeable for the financial year and for preceding financial years and the amount of tax paid or payable in respect of those years, provided that it is probable that an actual charge to tax will arise within the foreseeable future for one of the undertakings dealt with in the group accounts.

32 Joint ventures.

32.

32. (1) Where a parent undertaking or one of its subsidiary undertakings dealt with in the group accounts manages another undertaking jointly with one or more undertakings not dealt with in the group accounts, that other undertaking ("the joint venture") may, if it is not—–

( a ) a body corporate, or

( b ) a subsidiary undertaking of the parent undertaking,

be proportionally consolidated in the group accounts in proportion to the rights in its capital held by the parent undertaking or the subsidiary undertakings dealt with in the group accounts as the case may be.

• (2) The provisions of these Regulations relating to the preparation of group accounts shall apply, with any necessary modifications, to the inclusion of joint ventures in the consolidated accounts by proportional consolidation in accordance with paragraph (1).

33 Associated undertakings.

33.

33. (1) The interest of an undertaking dealt with in the group accounts in an associated undertaking, and the amount of profit or loss attributable to such an interest, shall be shown in the group accounts by way of the equity method of accounting including dealing with any goodwill arising in accordance with paragraphs 5 to 7 and 9 of the Schedule to the 1986 Act.

• (2) Where the associated undertaking is itself a parent undertaking, the net assets and profits or losses to be taken into account are those of the parent and its subsidiary undertakings (after making any consolidation adjustments).

• (3) The equity method of accounting need not be applied if the amounts in question are not material for the purpose of giving a true and fair view.

34 ..

34.

34. (1) For the purposes of these Regulations an "associated undertaking" means an undertaking in which an undertaking dealt with in the group accounts has a participating interest and over whose operating and financial policy it exercises a significant influence and which is not—

( a ) a subsidiary undertaking of the parent undertaking, or

( b ) a joint venture proportionally consolidated in accordance with Regulation 32.

• (2) Where an undertaking holds 20 per cent or more of the voting rights in another undertaking, it shall be presumed to exercise such an influence over it unless the contrary is shown.

• (3) Paragraphs (3) and (4) of Regulation 4 shall apply in determining for the purposes of this Regulation whether an undertaking holds 20 per cent or more of the voting rights in another undertaking.

35 Participating Interest.

35.

35. (1) A "participating interest" means a qualifying capital interest held by one undertaking in another on a long term basis for the purpose of securing a contribution to that undertaking's own activities by the exercise of control or influence arising from or related to that interest.

• (2) In this Regulation "qualifying capital interest"

( a ) in relation to an undertaking with share capital means an interest in shares comprised in the allotted share capital of that undertaking,

( b ) in relation to an undertaking with capital but no share capital means an interest conferring rights to share in the capital of the undertaking,

( c ) in relation to an undertaking without capital means interests—

• (i) conferring any right to share in the profits or liability to contribute to the losses of the undertaking, or

• (ii) giving rise to an obligation to contribute to the debts or expenses of the undertaking in the event of a winding up; and

( d ) includes an interest which is convertible into a qualifying capital interest as well as an option to acquire any such qualifying capital interest.

• (3) Where an undertaking holds a qualifying capital interest in another undertaking and such an interest represents 20 per cent or more of all such interests in the other undertaking it shall be presumed to hold that interest on the basis and for the purpose mentioned in paragraph (1) of this Regulation unless the contrary is shown.

• (4) The percentage of qualifying capital interests held in an undertaking with share capital shall be the percentage that the nominal value of the shares held represents of the nominal value of the allotted share capital of that undertaking.

• (5) For the purpose of this Regulation an interest held on behalf of an undertaking shall be treated as held by it.

• (6) For the purposes of this Regulation as it applies in relation to the expression "participating interest" in Regulation 4 (1) (c) (subsidiary undertaking)—–

( a ) there shall be attributed to an undertaking any interests held by any of its subsidiary undertakings, and

( b ) the references in paragraph (1) to the purpose and activities of an undertaking include the purpose and activities of any of its subsidiary undertakings and of the group as a whole.

• (7) In the balance sheet and profit and loss formats set out in the Schedule to the 1986 Act, as amended by the Schedule to these Regulations, "participating interest" does not include an interest in a group undertaking.

36 Publication of information.

36.

36. (1) Subject to paragraph (2) the information specified in paragraphs 18 to 22 of the Schedule to these Regulations may, in lieu of being stated in the notes to the group accounts for any particular financial year, be given in a statement in writing signed by a director and the secretary of the parent undertaking and annexed to the first annual return made by the parent undertaking next after the group accounts for that year are laid before the annual general meeting of the parent undertaking if, in the opinion of the directors of the parent undertaking, compliance with paragraphs 18 to 22 would require a note to the group accounts of excessive length.

• (2) Paragraph (1) of this Regulation shall not apply in relation to information concerning any particular undertaking if the financial state of that undertaking, as disclosed by its accounts, has in the opinion of the directors of the parent undertaking, a substantial effect on the profit or loss, or the amount of the assets of the parent undertaking and its subsidiaries taken as a whole.

• (3) A copy of a statement annexed, pursuant to paragraph (1) of this Regulation, to the annual return referred to in that paragraph made by a parent undertaking shall be certified both by a director and the secretary of the parent undertaking to be a true copy of such statement.

37 ..

37.

37. (1) In the case of a parent undertaking preparing group accounts in accordance with these Regulations, the report of the directors of that undertaking under section 158 of the Principal Act, shall contain, in addition to the information specified in that section, the following information:

( a ) a fair review of the development of the business of the parent undertaking and its subsidiary undertakings taken as a group during the financial year ending with the relevant balance sheet date;

( b ) particulars of any important events affecting the parent undertaking or any of its subsidiary undertakings which have occurred since the end of that year;

( c ) an indication of likely future developments in the business of the parent undertaking and its subsidiary undertakings, taken as a group;

( d ) an indication of the activities, if any, of the parent undertaking and its subsidiary undertakings, taken as a group, in the field of research and development, and

( e ) the number and nominal value of shares in the parent undertaking held by that undertaking itself, by its subsidiary undertakings or by a person acting in his own name but on behalf of those undertakings.

• (2) The information required by subparagraph (1) (e) may be given in the notes to the group accounts.

• (3) Subsections (4) and (5) of section 158 of the Principal Act shall not apply to an undertaking to which this Regulation applies.

38 ..

38.

38. It shall be the duty of the auditors of a parent undertaking, in preparing the report on group accounts required by section 193 of the Companies Act, 1990 , to consider whether the information given in the report of the directors on the state of affairs of the parent undertaking and its subsidiary undertakings, as a group, relating to the financial year concerned is consistent with the group accounts for that year and they shall state in the report whether, in their opinion, such information is consistent with those accounts.

39 ..

39.

39. (1) Subject to the provisions of these Regulations, copies of the following documents shall be documents to be annexed to the annual return of the parent undertaking:

( a ) group accounts drawn up by the parent undertaking in accordance with these Regulations;

( b ) the report of the directors required by Regulation 37;

( c ) the auditor's report referred to in Regulation 38;

and each such copy document shall be certified both by a director, and the secretary, of the parent undertaking to be a true copy of such accounts or reports, as the case may be.

• (2) Where any such document is in a language other than the English language or the Irish language, there shall be annexed to each such document a translation in the English language or the Irish language certified in the prescribed manner to be a correct translation.

40 ..

40.

40. (1) Where a parent undertaking publishes its full group accounts, it shall also publish with those accounts the auditor's report in relation to those accounts referred to in Regulation 38.

• (2) Where a parent undertaking publishes abbreviated group accounts relating to any financial year, it shall also publish a statement indicating—

( a ) that the group accounts are not the group accounts, copies of which are required by these Regulations to be annexed to the annual return,

( b ) whether the copies of the group accounts so required to be annexed have in fact been so annexed,

( c ) whether the auditors of the parent undertaking have made a report under section 193 of the 1990 Act in respect of the group accounts of the parent undertaking which relate to any financial year with which the abbreviated group accounts purport to deal,

( d ) whether the report of the auditors under the said section 193 contained any qualifications.

• (3) Where a parent undertaking publishes abbreviated group accounts, it shall not publish with those accounts the report of the auditors mentioned in subparagraph (2) (c) of this Regulation.

• (4) In this Regulation—

"abbreviated group accounts", in relation to a parent undertaking, means any group balance sheet or group profit and loss account, or summary or abstract of a group balance sheet or group profit and loss account, relating to a financial year of the parent undertaking which is published by the parent undertaking otherwise than as part of the full group accounts of the parent undertaking and its subsidiary undertakings for that financial year;

"full group accounts", in relation to a parent undertaking, means group accounts and the report of the directors of the parent undertaking referred to in Regulation 37.

"publish", in relation to a document, includes issue, circulate or otherwise make it available for public inspection in a manner calculated to invite the public generally, or any class or members of the public, to read the document, and cognate words shall be construed accordingly.

41 Offences.

41.

41. (1) If a parent undertaking fails to comply with a provision of Regulation 39 or 40, the parent undertaking and every officer of the undertaking who is in default shall be liable on summary conviction to a fine not exceeding £1,000.

• (2) If any person, being a director of a company to which these Regulations apply, fails to take all reasonable steps to secure compliance with a requirement of Regulation 39 or 40, he shall, in respect of each offence, be liable on summary conviction to imprisonment for a term not exceeding 12 months or, at the discretion of the court, to a fine not exceeding £1,000, or to both.

• (3) In any proceedings against a person for an offence under paragraph (2) of this regulation, it shall be a defence for a director to prove that he had reasonable grounds to believe and did believe that a competent and reliable person was charged with the duty of ensuring that the provisions of these regulations were complied with and that the latter person was in a position to discharge that duty, and a person shall not be liable to be sentenced to imprisonment for an offence under the said paragraph (2) unless, in the opinion of the court, the offence was committed wilfully.

42 Amendments to the 1986 Act.

42.

42. Section 1 of the 1986 Act is hereby amended by the insertion of the following subsection—

• "(3) In this Act, except where the context otherwise requires, a reference to a subsidiary is to a subsidiary undertaking as defined in Regulation 4 of the European Communities (Companies: Group Accounts) Regulations, 1992, and a reference to a holding company shall be construed accordingly.".

43

43.

43. Section 3 of the 1986 Act is hereby amended by the substitution for subsections (2) and (3) of the following—

• "(2) Subsection (1) of this section shall not apply to the profit and loss account of a company if—

( a ) the company is a parent undertaking, and

( b ) the company is required to prepare and does prepare group accounts in accordance with the European Communities (Companies: Group Accounts) Regulations, 1992, and

( c ) the notes to the company's individual balance sheet show the company's profit or loss for the financial year determined in accordance with this Act.

• (3) Where, in the case of a company, advantage is taken of subsection (2) of this section, that fact shall be disclosed—

( a ) in the notes on the company's individual accounts, and

( b ) in the notes on the group accounts referred to in subsection 2 (b).".

44 ..

44.

44. Section 16 of the 1986 Act is hereby amended—

( a ) by the substitution for paragraph (b) of subsection (1) of the following—

"( b ) holds a qualifying capital interest equal to 20 per cent. or more of all such interests in an undertaking that is not its subsidiary undertaking (in this section referred to as "an undertaking of substantial interest"),";

( b ) by the addition of the following paragraphs after the paragraph inserted by paragraph (a):

"( c ) for the purposes of subparagraph (b), interests held by persons acting in their own name but on behalf of the company shall be deemed to be held by the company,

( d ) in this section, "qualifying capital interest" shall have the meaning assigned to it in Regulation 35 (2) of the European Communities (Companies: Group Accounts) Regulations, 1992,

( e ) paragraph (4) of Regulation 35 of the European Communities (Companies: Group Accounts) Regulations, 1992, shall apply in determining the percentage of qualifying capital interests held by a company in an undertaking with share capital, for the purposes of this section.";

( c ) by the substitution in that section for the term "associated company" wherever occurring of "undertaking of substantial interest";

( d ) by the substitution for subsection (2) of the following—

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

( a ) in respect of a subsidiary undertaking of a company, if the company prepares group accounts in accordance with the European Communities (Companies: Group Accounts) Regulations, 1992, and either—

• (i) the subsidiary undertaking is dealt with in the group accounts prepared by the company, or where the company avails of the exemption in Regulation 8 or Regulation 9 of the said Regulations the group accounts referred to in Regulation 8 (3) (a) of those Regulations, or

• (ii) the qualifying capital interest of the company in the subsidiary undertaking is included in or in a note to the company's accounts by way of the equity method of valuation,

( b ) in respect of an undertaking of substantial interest of a company if the qualifying capital interest in the undertaking of substantial interest 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 undertaking or the undertaking of substantial interest is not required to publish its accounts, and

• (ii) the qualifying capital interest held in the subsidiary undertaking or the undertaking of substantial interest do not amount to at least 50 per cent. of all such interests,

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

( e ) by the deletion of subsections (4) and (6).

45 ..

45.

45. The 1986 Act is hereby amended by the substitution for section 17 of the following section—

"Exemption for subsidiaries from section 7.

( a ) every person who is a shareholder of the company on the date of the holding of the next annual general meeting of the company after the end of that financial year, shall declare his consent to the exemption,

( b ) there is in force in respect of the whole of that financial year an irrevocable guarantee by the parent undertaking of the liabilities of the company referred to in section 5 (c) of this Act in respect of that financial year and the company has notified in writing every person referred to in paragraph (a) of this subsection of the guarantee,

( c ) the annual accounts of the company for that financial year are consolidated in the group accounts prepared by the parent undertaking and the exemption of the company under this section is disclosed in a note to the group accounts,

( d ) a notice stating that the company has availed of the exemption under this section in respect of that financial year and a copy of the guarantee and notification referred to in paragraph (b) of this subsection, together with a declaration by the company in writing that paragraph (a) of this subsection has been complied with in relation to the exemption, is annexed to the annual return for the financial year made by the company under the Principal Act to the registrar of companies,

( e ) the group accounts of the parents undertaking are drawn up in accordance with the requirements of the Seventh Council Directive*, and

• (f) the group accounts of the parent undertaking are annexed to the annual return aforesaid and are audited in accordance with Article 37 of the said Seventh Council Directive*.

• (2) The Minister may make such orders (if any) as may be necessary for the purpose of enabling this section to have full effect.

*Council Directive No. 83/349/EEC (OJ No. L 193 of 18.7.1983).".

46 ..

46.

46. Section 19 of the 1986 Act is hereby amended by the insertion of the following subsection after subsection (3)—

• "(3A) Where a company publishes its full individual accounts for a financial year it shall indicate if group accounts have been prepared and, if so, where those group accounts can be obtained.".

SCHEDULE

PART 1

Amendments to the Schedule to the 1986 Act

• (2) That expression occurs—

( a ) in Balance Sheet Format 1, in items A. III. 1 and 2, B.II.2, B.III.1, C.6, and F.6;

( b ) in Balance Sheet Format 2—

• (i) under the heading "ASSETS", in items A.III.1 and 2, B.II.2, and B.III.1;

• (ii) under the heading "LIABILITIES" in item C.6;

( c ) in the Profit and Loss Accounts Formats—

• (i) in Format 1, Item 7;

• (ii) in Format 2, Item 9;

• (iii) in Format 3, Item B.3;

• (iv) in Format 4, Item B.5;

( d ) in notes (12) and (13) on the Profit and Loss Accounts Formats;

( e ) in the second sentence of paragraph 39 (2) (exclusion to state separately certain loans).

• (2) That expression occurs—

( a ) in Balance Sheet Format 1, Item A.III.3;

( b ) in Balance Sheet Format 2, under the heading "ASSETS", in Item A. III.3;

( c ) in the Profit and Loss Accounts Formats—

• (i) in Format 1, Item 8;

• (ii) in Format 2, Item 10;

• (iii) in Format 3, Item B.4;

• (iv) in Format 4, Item B.6.

• (2) Those contexts are—

( a ) in Balance Sheet Format 1, in Items A.III.4, B.II.3, C.7, and F.7;

( b ) in Balance Sheet Format 2—

• (i) under the heading "ASSETS", in Items A.III.4 and B.II.3;

• (ii) under the heading "LIABILITIES" in Item C.7.

"PART V

Special Provisions where a company is a parent undertaking or subsidiary undertaking".

• (2) The Schedule to the 1986 Act is hereby amended by the substitution in Part V of the following for paragraph 45—

"45. (1) This Part applies where the company is a parent undertaking, whether or not it is itself a subsidiary undertaking.

• (2) Where a company is a parent undertaking or a subsidiary undertaking and any item required by Part I of this Schedule to be shown in the company's balance sheet, in relation to group undertakings, includes—

( a ) amounts attributable to dealings with or interests in any parent undertaking or fellow subsidiary undertaking, or

( b ) amounts attributable to dealings with or interests in any subsidiary undertaking of the company,

the aggregate amounts within paragraph (a) and (b) respectively shall be shown as separate items, either by way of subdivision of the relevant item in the balance sheet or in a note to the company's accounts.".

• (3) The Schedule to the 1986 Act is hereby amended by the insertion of the following paragraph after paragraph 45—

"Guarantees and other financial commitments in favour of group undertakings

45A. Commitments within any of subparagraphs (1) to (6) of paragraph 36 (guarantees and other financial commitments) which are undertaken on behalf of or for the benefit of—

( a ) any parent undertaking or fellow subsidiary undertaking, or

( b ) any subsidiary undertaking of the company,

shall be stated separately from the other commitments within that subparagraph, and commitments within paragraph (a) shall also be stated separately from those within paragraph (b).".

• (4) The Schedule to the 1986 Act is hereby amended by the substitution in Part V of the following for paragraph 46—

"46. (1) Subject to subparagraph (2) of this paragraph, where the company is a parent undertaking, the number, description and amount of the shares in, and debentures of the company held by its subsidiary undertakings or their nominees shall be disclosed in a note to the company's accounts.

• (2) Subparagraph (1) of this paragraph does not apply in relation to any shares or debentures—

( a ) in the case of which the subsidiary undertaking is concerned as personal representative, or

( b ) in the case of which it is concerned as trustee:

Provided that in the latter case neither the company nor a subsidiary undertaking of the company is beneficially interested under the trust, otherwise than by way of security only for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money.".

• (5) The Schedule to the 1986 Act is hereby amended by the insertion of the following paragraph after paragraph 46—

"46A. (1) Where a company is a subsidiary undertaking, the following information shall be stated with respect to the parent undertaking of—

( a ) the largest group of undertakings for which group accounts are drawn up and of which the company is a member, and

( b ) the smallest such group of undertakings.

• (2) The name of the parent undertaking shall be stated.

• (3) There shall be stated—

( a ) if the undertaking is incorporated, the country in which it is incorporated;

( b ) if it is unincorporated, the address of its principal place of business.

• (4) If copies of the group accounts referred to in subparagraph (1) are available to the public, there shall also be stated the addresses from which copies of the accounts can be obtained.".

• (6) The Schedule to the 1986 Act is hereby amended by the deletion of the following—

( a ) paragraph 36 (7),

( b ) paragraphs 47 to 53, and

( c ) paragraph 59.

"63. References in this Schedule to 'fellow subsidiary undertakings' are to undertakings which are subsidiary undertakings of the same parent undertaking but are not parent undertakings or subsidiary undertakings of each other.".

"Group Undertakings

( a ) a parent undertaking or subsidiary undertaking of that undertaking, or

( b ) a subsidiary undertaking of any parent undertaking of that undertaking.

• (2) For the purposes of this paragraph, 'undertaking' shall have the meaning assigned to it by Regulation 3 of the European Communities (Companies: Group Accounts) Regulations, 1992.".

"73. For the purposes of this Schedule, 'participating interest' shall have the meaning assigned to it in Regulation 35 of the European Communities (Companies: Group Accounts) Regulations, 1992.".

Application of Formats of Schedule to 1986 Act to Group Accounts

Minority Interest

( a ) in Format 1 after item H, and

( b ) in Format 2 under the general heading "Liabilities", between items A and B.

• (2) The amount to be shown under the heading "Minority Interest" referred to in paragraph (1) shall be the amount of capital and reserves attributable to shares in subsidiary undertakings dealt with in the group accounts held by or on behalf of persons other than the parent undertaking and its subsidiary undertakings.

( a ) in Format 1, between items 14 and 15,

( b ) in Format 2, between items 16 and 17,

( c ) in Format 3, between items 7 and 8 in both Section A and Section B, and

( d ) in Format 4, between items 9 and 10 in both Section A and in Section B.

• (2) The amount to be shown under the heading minority interest in accordance with paragraph (1) shall be the amount of any profit or loss on ordinary activities attributable to shares in subsidiaries dealt with in the group accounts held by or on behalf of persons other than the parent undertaking and its subsidiary undertakings.

• (3) In applying Profit and Loss Formats 1, 2, 3 and 4 of the 1986 Act to group accounts a separate item under the heading "Minority Interest" shall be shown—

( a ) in Format 1, between items 18 and 19,

( b ) in Format 2, between items 20 and 21,

( c ) in Format 3, between items 9 and 10 in Section A and between items 8 and 9 in Section B, and

( d ) in Format 4, between items 11 and 12 in Section A and between items 10 and 11 in Section B.

• (4) The amount to be shown under the heading minority interest in accordance with paragraph (3) shall be the amount of any profit or loss on extraordinary activities attributable to shares in subsidiaries dealt with in the group accounts held by or on behalf of persons other than the parent undertaking and its subsidiary undertakings.

• (2) In the Balance Sheet Formats the items headed "Participating interests", that is—

( a ) in Format 1, item A.III.3, and

( b ) in Format 2, item A.III.3 under the heading "ASSETS",

shall be replaced by two items, "Interests in associated undertakings" and "Other participating interests".

• (3) In the Profit and Loss Account Formats, the items headed "Income from participating interests", that is—

( a ) in Format 1, item 8,

( b ) in Format 2, item 10,

( c ) in Format 3, item B.4, and

( d ) in Format 4, item B.6,

shall be replaced by two items, "Income from interests in associated undertakings" and "Income from other participating interests".

PART 2

Information required by way of notes to the group accounts

• (2) In relation to acquisitions taking place in the financial year, there shall be stated in the notes to the group accounts—

( a ) the name and registered office of the undertaking acquired, or where a group was acquired, the name and registered office of the parent undertaking of that group, and

( b ) whether the acquisition has been accounted for by the acquisition or the merger method of accounting.

( a ) the aggregate amount of any debts included under that heading which are payable or repayable otherwise than by instalments and fall due for payment or repayment after the end of the period of five years beginning with the day next following the end of the financial year,

( b ) the aggregate amount of any debts so included which are payable or repayable by instalments any of which fall due for payment after the end of that period,

( c ) the aggregate amount of any debts included under that heading in respect of which any security has been given, and

( d ) an indication of the nature of the securities so given.

( a ) the average number of persons employed in the financial year, by the undertakings dealt with in the group accounts, and

( b ) the average number of persons employed within each category of persons employed of those undertakings.

• (2) In respect of all persons employed by the undertakings dealt with in the group accounts during the financial year who are taken into account in determining the relevant annual number for the purposes of subparagraph (1) (a) of this paragraph, there shall also be stated the aggregate amount of staff costs, save insofar as this amount is stated in the group profit and loss account.

• (3) The categories of persons employed by the undertakings included in the group accounts by reference to which the number required to be disclosed by subparagraph (1) (b) is to be determined shall be such as the directors of the parent undertaking may select, having regard to the manner in which the activities of the undertakings dealt with in the group accounts are organised.

• (4) For the purposes of clauses (a) and (b) of subparagraph (1) of this paragraph, the average number of persons employed by the undertakings dealt with in the group accounts shall be determined by adding together the averages, for each such undertaking, calculated by the method set out in subparagraph (4) of paragraph 42 of the Schedule to the 1986 Act.

• (5) The average number of persons employed during the financial year by an undertaking proportionally consolidated pursuant in Regulation 32, calculated by the manner specified in subparagraph (4), shall also be stated.

• (2) Section 191 of the Principal Act shall not apply to group accounts prepared in accordance with these Regulations.