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Company Law Reform Bill [HL]


Company Law Reform Bill [HL]
Part 15 — Accounts and reports
Chapter 7 — Publication of accounts and reports

186

 

403     

Contents of directors’ remuneration report

(1)   

The Secretary of State may make provision by regulations as to—

(a)   

the information that must be contained in a directors’ remuneration

report,

(b)   

how information is to be set out in the report, and

5

(c)   

what is to be the auditable part of the report.

(2)   

Without prejudice to the generality of this power, the regulations may make

any such provision as was made, immediately before the commencement of

this Part, by Schedule 7A to the Companies Act 1985 (c. 6).

(3)   

It is the duty of—

10

(a)   

any director of a company, and

(b)   

any person who is or has at any time in the preceding five years been a

director of the company,

   

to give notice to the company of such matters relating to himself as may be

necessary for the purposes of regulations under this section.

15

(4)   

A person who makes default in complying with subsection (3) commits an

offence and is liable on summary conviction to a fine not exceeding level 3 on

the standard scale.

404     

Approval and signing of directors’ remuneration report

(1)   

The directors’ remuneration report must be approved by the board of directors

20

and signed on behalf of the board by a director or the secretary of the company.

(2)   

If a directors’ remuneration report is approved that does not comply with the

requirements of this Act, every director of the company who—

(a)   

knew that it did not comply, or was reckless as to whether it complied,

and

25

(b)   

failed to take reasonable steps to secure compliance with those

requirements or, as the case may be, to prevent the report from being

approved,

   

commits an offence.

(3)   

A person guilty of an offence under this section is liable—

30

(a)   

on conviction on indictment, to a fine;

(b)   

on summary conviction, to a fine not exceeding the statutory

maximum.

Chapter 7

Publication of accounts and reports

35

Duty to circulate copies of accounts and reports

405     

Duty to circulate copies of annual accounts and reports

(1)   

Every company must send a copy of its annual accounts and reports for each

financial year to—

(a)   

every member of the company,

40

(b)   

every holder of the company’s debentures, and

 
 

Company Law Reform Bill [HL]
Part 15 — Accounts and reports
Chapter 7 — Publication of accounts and reports

187

 

(c)   

every person who is entitled to receive notice of general meetings.

(2)   

Copies need not be sent to a person for whom the company does not have a

current address.

(3)   

A company has a “current address” for a person if—

(a)   

an address has been notified to the company by the person as one at

5

which documents may be sent to him, and

(b)   

the company has no reason to believe that documents sent to him at

that address will not reach him.

(4)   

In the case of a company not having a share capital, copies need not be sent to

anyone who is not entitled to receive notices of general meetings of the

10

company.

(5)   

Where copies are sent out over a period of days, references in the Companies

Acts to the day on which copies are sent out shall be read as references to the

last day of that period.

(6)   

This section has effect subject to section 408 (option to provide summary

15

financial statement).

406     

Time allowed for sending out copies of accounts and reports

(1)   

The time allowed for sending out copies of the company’s annual accounts and

reports is as follows.

(2)   

A private company must comply with section 405 not later than—

20

(a)   

the end of the period for filing accounts and reports, or

(b)   

if earlier, the date on which it actually delivers its accounts and reports

to the registrar.

(3)   

A public company must comply with section 405 not later than 21 days before

the relevant accounts meeting.

25

(4)   

If in the case of a public company copies are sent out later than is required by

subsection (3), they shall, despite that, be deemed to have been duly sent if it is

so agreed by all the members entitled to attend and vote at the relevant

accounts meeting.

(5)   

Whether the time allowed is that for a private company or a public company is

30

determined by reference to the company’s status immediately before the end

of the accounting reference period by reference to which the financial year for

the accounts in question was determined.

(6)   

In this section the “relevant accounts meeting” means the accounts meeting of

the company at which the accounts and reports in question are to be laid.

35

407     

Default in sending out copies of accounts and reports: offences

(1)   

If default is made in complying with section 405 or 406, an offence is committed

by—

(a)   

the company, and

(b)   

every officer of the company who is in default.

40

(2)   

A person guilty of an offence under this section is liable—

(a)   

on conviction on indictment, to a fine;

 
 

Company Law Reform Bill [HL]
Part 15 — Accounts and reports
Chapter 7 — Publication of accounts and reports

188

 

(b)   

on summary conviction, to a fine not exceeding the statutory

maximum.

Option to provide summary financial statement

408     

Option to provide summary financial statement

(1)   

A company may—

5

(a)   

in such cases as may be specified by regulations made by the Secretary

of State, and

(b)   

provided any conditions so specified are complied with,

   

provide a summary financial statement instead of copies of the accounts and

reports required to be sent out by section 405.

10

(2)   

Copies of those reports and accounts must, however, be sent to any person

entitled to be sent them in accordance with that section and who wishes to

receive them.

(3)   

The Secretary of State may make provision by regulations as to the manner in

which it is to be ascertained, whether before or after a person becomes entitled

15

to be sent a copy of those accounts and reports, whether he wishes to receive

them.

(4)   

A summary financial statement must comply with the requirements of—

section 409 (form and contents of summary financial statement: unquoted

companies), or

20

section 410 (form and contents of summary financial statement: quoted

companies).

(5)   

Regulations under this section are subject to negative resolution procedure.

409     

Form and contents of summary financial statement: unquoted companies

(1)   

A summary financial statement by a company that is not a quoted company

25

must—

(a)   

be derived from the company’s annual accounts, and

(b)   

be prepared in accordance with this section and regulations made

under it.

(2)   

The summary financial statement must be in such form, and contain such

30

information, as the Secretary of State may specify by regulations.

   

The regulations may require the statement to include information derived

from the directors’ report.

(3)   

Nothing in this section or regulations made under it prevents a company from

including in a summary financial statement additional information derived

35

from the company’s annual accounts or the directors’ report.

(4)   

The summary financial statement must—

(a)   

state that it is only a summary of information derived from the

company’s annual accounts;

(b)   

state whether it contains additional information derived from the

40

directors’ report and, if so, that it does not contain the full text of that

report;

 
 

Company Law Reform Bill [HL]
Part 15 — Accounts and reports
Chapter 7 — Publication of accounts and reports

189

 

(c)   

state how a person entitled to them can obtain a full copy of the

company’s annual accounts and the directors’ report;

(d)   

contain a statement by the company’s auditor of his opinion as to

whether the summary financial statement—

(i)   

is consistent with the company’s annual accounts and, where

5

information derived from the directors’ report is included in the

statement, with that report, and

(ii)   

complies with the requirements of this section and regulations

made under it;

(e)   

state whether the auditor’s report on the annual accounts was

10

unqualified or qualified and, if it was qualified, set out the report in full

together with any further material needed to understand the

qualification;

(f)   

state whether, in that report, the auditor’s statement under section 486

(whether directors’ report consistent with accounts) was qualified or

15

unqualified and, if it was qualified, set out the qualified statement in

full together with any further material needed to understand the

qualification;

(g)   

state whether that auditor’s report contained a statement under—

(i)   

section 488(2)(a) or (b) (accounting records or returns

20

inadequate or accounts not agreeing with records and returns),

or

(ii)   

section 488(3) (failure to obtain necessary information and

explanations),

   

and if so, set out the statement in full.

25

(5)   

Regulations under this section may provide that any specified material may,

instead of being included in the summary financial statement, be sent

separately at the same time as the statement.

(6)   

Regulations under this section are subject to negative resolution procedure.

410     

Form and contents of summary financial statement: quoted companies

30

(1)   

A summary financial statement by a quoted company must—

(a)   

be derived from the company’s annual accounts and the directors’

remuneration report, and

(b)   

be prepared in accordance with this section and regulations made

under it.

35

(2)   

The summary financial statement must be in such form, and contain such

information, as the Secretary of State may specify by regulations.

   

The regulations may require the statement to include information derived

from the directors’ report.

(3)   

Nothing in this section or regulations made under it prevents a company from

40

including in a summary financial statement additional information derived

from the company’s annual accounts, the directors’ remuneration report or the

directors’ report.

(4)   

The summary financial statement must—

(a)   

state that it is only a summary of information derived from the

45

company’s annual accounts and the directors’ remuneration report;

 
 

Company Law Reform Bill [HL]
Part 15 — Accounts and reports
Chapter 7 — Publication of accounts and reports

190

 

(b)   

state whether it contains additional information derived from the

directors’ report and, if so, that it does not contain the full text of that

report;

(c)   

state how a person entitled to them can obtain a full copy of the

company’s annual accounts, the directors’ remuneration report or the

5

directors’ report;

(d)   

contain a statement by the company’s auditor of his opinion as to

whether the summary financial statement—

(i)   

is consistent with the company’s annual accounts and the

directors’ remuneration report and, where information

10

derived from the directors’ report is included in the statement,

with that report, and

(ii)   

complies with the requirements of this section and regulations

made under it;

(e)   

state whether the auditor’s report on the annual accounts and the

15

auditable part of the directors’ remuneration report was unqualified or

qualified and, if it was qualified, set out the report in full together with

any further material needed to understand the qualification;

(f)   

state whether that auditor’s report contained a statement under—

(i)   

section 488(2) (accounting records or returns inadequate or

20

accounts or directors’ remuneration report not agreeing with

records and returns), or

(ii)   

section 488(3) (failure to obtain necessary information and

explanations),

   

and if so, set out the statement in full;

25

(g)   

state whether, in that report, the auditor’s statement under section 486

(whether directors’ report consistent with accounts) was qualified or

unqualified and, if it was qualified, set out the qualified statement in

full together with any further material needed to understand the

qualification.

30

(5)   

Regulations under this section may provide that any specified material may,

instead of being included in the summary financial statement, be sent

separately at the same time as the statement.

(6)   

Regulations under this section are subject to negative resolution procedure.

411     

Summary financial statements: offences

35

(1)   

If default is made in complying with any provision of section 408, 409 or 410,

or of regulations under any of those sections, an offence is committed by—

(a)   

the company, and

(b)   

every officer of the company who is in default.

(2)   

A person guilty of an offence under this section is liable on summary

40

conviction to a fine not exceeding level 3 on the standard scale.

Quoted companies: requirements as to website publication

412     

Quoted companies: annual accounts and reports to be made available on

website

(1)   

A quoted company must ensure that its annual accounts and reports—

45

 
 

Company Law Reform Bill [HL]
Part 15 — Accounts and reports
Chapter 7 — Publication of accounts and reports

191

 

(a)   

are made available on a website, and

(b)   

remain so available until the annual accounts and reports for the

company’s next financial year are made available in accordance with

this section.

(2)   

The provisions of section 414 (requirements as to website availability) apply.

5

(3)   

In the event of default in complying with this section (or with the requirements

of section 414 as it applies for the purposes of this section), an offence is

committed by every officer of the company who is in default.

(4)   

A person guilty of an offence under subsection (3) is liable on summary

conviction to a fine not exceeding level 3 on the standard scale.

10

413     

Quoted companies: preliminary statement of results to be made available on

website

(1)   

This section applies where a quoted company prepares a preliminary

statement of its annual results in accordance with the requirements of listing

rules or comparable requirements of the market on which the company’s

15

equity share capital is admitted to trading.

(2)   

The company must ensure that the statement—

(a)   

is made available on a website, and

(b)   

remains so available until the annual accounts and reports for the

financial year are made available in accordance with section 412.

20

(3)   

The provisions of section 414 (requirements as to website availability) apply.

(4)   

A preliminary statement of the company’s annual results means information

published before publication of the company’s annual accounts and reports

that is or purports to be—

(a)   

a balance sheet as at the end of the financial year, or

25

(b)   

a profit and loss account for the financial year,

   

whether on an individual or a consolidated basis.

(5)   

In the event of default in complying with this section (or with the requirements

of section 414 as it applies for the purposes of this section), an offence is

committed by every officer of the company who is in default.

30

(6)   

A person guilty of an offence under subsection (3) is liable on summary

conviction to a fine not exceeding level 3 on the standard scale.

414     

Requirements as to website availability

(1)   

The following provisions apply for the purposes of—

section 412 (quoted companies: annual accounts and reports to be made

35

available on website), and

section 413 (quoted companies: preliminary results to be made available

on website).

(2)   

The information must be made available on a website that—

(a)   

is maintained by or on behalf of the company, and

40

(b)   

identifies the company in question.

 
 

Company Law Reform Bill [HL]
Part 15 — Accounts and reports
Chapter 7 — Publication of accounts and reports

192

 

(3)   

Access to the information on the website, and the ability to obtain a hard copy

of the information from the website, must not be—

(a)   

conditional on the payment of a fee, or

(b)   

otherwise restricted, except so far as necessary to comply with any

enactment or regulatory requirement (in the United Kingdom or

5

elsewhere).

(4)   

The information—

(a)   

must be made available as soon as reasonably practicable, and

(b)   

must be kept available throughout the period specified in the section in

question.

10

(5)   

A failure to make information available on a website throughout the period

referred to in subsection (4)(b) is disregarded if—

(a)   

the information is made available on the website for part of that period,

and

(b)   

the failure is wholly attributable to circumstances that it would not be

15

reasonable to have expected the company to prevent or avoid.

Right of member or debenture holder to demand copies of accounts and reports

415     

Right of member or debenture holder to copies of accounts and reports:

unquoted companies

(1)   

A member of, or holder of debentures of, an unquoted company is entitled to

20

be provided, on demand and without charge, with a copy of—

(a)   

the company’s last annual accounts,

(b)   

the last directors’ report, and

(c)   

the auditor’s report on those accounts (including the statement on that

report).

25

(2)   

The entitlement under this section is to a single copy of those documents, but

that is in addition to any copy to which a person may be entitled under section

405.

(3)   

If a demand made under this section is not complied with within seven days of

receipt by the company, an offence is committed by—

30

(a)   

the company, and

(b)   

every officer of the company who is in default.

(4)   

A person guilty of an offence under this section is liable on summary

conviction to a fine not exceeding level 3 on the standard scale and, for

continued contravention, a daily default fine not exceeding one-tenth of level

35

3 on the standard scale.

416     

Right of member or debenture holder to copies of accounts and reports:

quoted companies

(1)   

A member of, or holder of debentures of, a quoted company is entitled to be

provided, on demand and without charge, with a copy of—

40

(a)   

the company’s last annual accounts,

(b)   

the last directors’ remuneration report,

(c)   

the last directors’ report, and

 
 

 
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