Companies Act, 1963

SIXTH SCHEDULE.

Accounts.

Preliminary.

Sections 62 , 149 , 152 , 158 , 395 .

1. Paragraphs 2 to 11 apply to the balance sheet and 12 to 14 to the profit and loss account and are subject to the exceptions and modifications provided for by Parts II and III of this Schedule; and this Schedule has effect in addition to sections 191 and 192.

Part I.

General Provisions as to Balance Sheet and Profit and Loss Account.

Balance Sheet.

2. The authorised share capital, issued share capital, liabilities and assets shall be summarised, with such particulars as are necessary to disclose the general nature of the assets and liabilities, and there shall be specified—

(a) any part of the issued capital that consists of redeemable preference shares, the amount of the premium (if any) payable on redemption, the earliest and latest dates on which the company has power to redeem those shares and whether redemption is at the option of the company or obligatory;

(b) any part of the issued capital that consists of preference shares which are redeemable in accordance with a resolution passed under section 65, the amount of the premium (if any) payable on redemption, the earliest and latest dates on which the company has power to redeem those shares and whether redemption is at the option of the company or obligatory;

(c) the amount of the share premium account;

(d) any sums allowed by way of discount in respect of any pany has power to reissue.

3. There shall be stated under separate headings, so far as they are not written off—

(a) the preliminary expenses;

(b) any expenses incurred in connection with any issue of share capital or debentures;

(c) any sums paid by way of commission in respect of any shares or debentures;

(d) any sums allowed by way of discount in respect of any debentures; and

(e) the amount of the discount allowed on any issue of shares at a discount.

4. (1) Subject to subparagraphs (2) and (3), the reserves, provisions, liabilities and fixed and current assets shall be classified under headings appropriate to the company's business. Amounts set aside to meet future tax liabilities or for tax equalisation purposes shall be treated as provisions but separately indicated.

(2) Where the amount of any class is not material, it may be included under the same heading as some other class.

(3) Where any assets of one class are not separable from assets of another class, those assets may be included under the same heading.

(4) Fixed assets shall also be distinguished from current assets.

(5) The method or methods used to arrive at the amount of the fixed assets under each heading shall be stated.

5. (1) The method of arriving at the amount of any fixed asset shall, subject to subparagraph (2), be to take the difference between—

(a) its cost or, if it stands in the company's books at a valuation, the amount of the valuation; and

(b) the aggregate amount provided or written off since the date of acquisition or valuation, as the case may be, for depreciation or diminution in value;

and for the purposes of this paragraph the net amount at which any assets stand in the company's books on the operative date (after deduction of the amounts previously provided or written off for depreciation or diminution in value) shall, if the figures relating to the period before the operative date cannot be obtained without unreasonable expense or delay, be treated as if it were the amount of a valuation of those assets made on the operative date and, where any of those assets are sold, the said net amount less the amount of the sales shall be treated as if it were the amount of the valuation so made of the remaining assets.

(2) Subparagraph (1) shall not apply—

(a) to assets for which the figures relating to the period beginning with the operative date cannot be obtained without unreasonable expense or delay; or

(b) to assets the replacement of which is provided for wholly or partly—

(i) by making provision for renewals and charging the cost of replacement against the provision so made; or

(ii) by charging the cost of replacement direct to revenue; or

(c) to any investments of which the market value (or, in the case of investments not having a market value, their value as estimated by the directors) is shown either as the amount of the investments or by way of note; or

(d) to goodwill, patents or trademarks.

(3) For the assets under each heading whose amount is arrived at in accordance with subparagraph (1), there shall be shown—

(a) the aggregate of the amounts referred to in head (a) of that subparagraph; and

(b) the aggregate of the amounts referred to in head (b) thereof.

(4) As respects the assets under each heading whose amount is not arrived at in accordance with subparagraph (1) because their replacement is provided for as mentioned in subparagraph (2) (b), there shall be stated—

(a) the means by which their replacement is provided for; and

(b) the aggregate amount of the provision (if any) made for renewals and not used.

6. (1) Subject to subparagraph (2), the aggregate amounts respectively of capital reserves, revenue reserves and provisions (other than provisions for depreciation, renewals or diminution in value of assets) shall be stated under separate headings.

(2) Subparagraph (1) shall not require a separate statement of any of the 3 amounts referred to in that subparagraph which is not material.

7. (1) There shall also be shown (unless it is shown in the profit and loss account or a statement or report annexed thereto or the amount involved is not material)—

(a) where the amount of the capital reserves, of the revenue reserves or of the provisions (other than provisions for depreciation, renewals or diminution in value of assets) shows an increase as compared with the amount at the end of the immediately preceding financial year, the source from which the amount of the increase has been derived; and

(b) where—

(i) the amount of the capital reserves or of the revenue reserves shows a decrease as compared with the amount at the end of the immediately preceding financial year; or

(ii) the amount at the end of the immediately preceding financial year of the provisions (other than provisions for depreciation, renewals or diminution in value of assets) exceeded the aggregate of the sums since applied and amounts still retained for the purposes thereof;

the application of the amounts derived from the difference.

(2) Where the heading showing any of the reserves or provisions aforesaid is divided into subheadings, this paragraph shall apply to each of the separate amounts shown in the subheadings instead of applying to the aggregate amount thereof.

8. There shall be shown under separate headings—

(a) the aggregate amounts respectively of the company's quoted investments and unquoted investments;

(b) the amount of the goodwill so far as ascertainable from the books of the company or from any contracts or documents relating to the purchase or sale of property and so far as not written off;

(c) the amount of the patents and trademarks so far as ascertainable and so far as not written off;

(d) the aggregate amount of any outstanding loans permitted by section 60 (other than loans to which paragraph (a) of subsection (13) refers) indicating separately loans permitted by paragraphs (b) and (c) of subsection (13);

(e) the aggregate amount of bank loans and overdrafts;

(f) the net aggregate amount (after deduction of income tax) which is recommended for distribution by way of dividend.

9. Where any liability of the company is secured otherwise than by operation of law on any assets of the company, the fact that that liability is so secured shall be stated but it shall not be necessary to specify the assets on which the liability is secured.

10. Where any of the company's debentures are held by a nominee of or a trustee for the company, the nominal amount of the debentures and the amount paid for such debentures by the company shall be stated.

11. (1) The matters referred to in subparagraphs (2) to (10) shall be stated by way of note, or in a statement or report annexed, if not otherwise shown.

(2) The amount of any arrears of fixed cumulative dividends on the company's shares and the period for which the dividends or, if there is more than one class, each class of them are in arrear, the amount to be stated before deduction of income tax, except that, in the case of tax free dividends, the amount shall be shown free of tax and the fact that it is so shown shall also be stated.

(3) Particulars of any charge on the assets of the company to secure the liabilities of any other person, including, where practicable, the amount secured.

(4) The general nature of any other contingent liabilities not provided for and, where practicable, the aggregate amount or estimated amount of those liabilities, if it is material.

(5) The aggregate amount or estimated amount, if it is material, of contracts for capital expenditure, so far as not provided for.

(6) If in the opinion of the directors any of the current assets have not a value, on realisation in the ordinary course of the company's business, at least equal to the amount at which they are stated, the fact that the directors are of that opinion.

(7) The aggregate market value of the company's quoted investments where it differs from the amount of the investments as stated, and the stock exchange value of any investments of which the market value is shown (whether separately or not) and is taken as being higher than their stock exchange value.

(8) The basis on which foreign currencies have been converted into Irish currency where the amount of the assets or liabilities affected is material.

(9) The basis on which the amount, if any, set aside for taxation on profits is computed.

(10) Except in the case of the first balance sheet laid before the company after the operative date, the corresponding amounts at the end of the immediately preceding financial year for all items shown in the balance sheet.

Profit and Loss Account.

12. There shall be shown—

(a) the amount charged to revenue by way of provision for depreciation, renewals or diminution in value of fixed assets;

(b) the amount of the interest on the company's debentures and other fixed loans;

(c) the amount of the charge for income tax and other taxation on profits including income tax and other taxation payable outside the State on profits and distinguishing where practicable between income tax and other taxation;

(d) the amounts respectively provided for redemption of share capital and for redemption of loans;

(e) the amount set aside or proposed to be set aside to, or withdrawn from reserves, excluding amounts which would not, in accordance with good accountancy practice, normally pass through the profit and loss account;

(f) the amount set aside to provisions other than provisions for depreciation, renewals or diminution in value of assets or, as the case may be, the amount, if material, withdrawn from such provisions and not applied for the purposes thereof, excluding amounts which would not, in accordance with good accountancy practice, normally pass through the profit and loss account;

(g) the amount of income from investments;

(h) the aggregate amount of the dividends paid;

(i) the aggregate amount of the dividends proposed.

13. The amount of remuneration of the auditors shall be shown under a separate heading, and for the purposes of this paragraph, any sums paid by the company for the auditors' expenses shall be deemed to be included in the expression “remuneration”.

14. (1) The matters referred to in subparagraphs (2) to (7) shall be stated by way of note, if not otherwise shown.

(2) If depreciation or replacement of fixed assets is provided for by some method other than a depreciation charge or provision for renewals, or is not provided for, the method by which it is provided for or the fact that it is not provided for, as the case may be, but this subparagraph shall not apply to freehold land.

(3) The basis on which the charge for income tax and other taxation on profits (whether payable in or outside the State) is computed.

(4) Whether or not the amount stated for dividends paid is for dividends subject to deduction of income tax.

(5) Whether or not the amount stated for dividends proposed is for dividends subject to deduction of income tax.

(6) Except in the case of the first profit and loss account laid before the company after the operative date, the corresponding amounts for the immediately preceding financial year for all items shown in the profit and loss account.

(7) Any material respects in which any items shown in the profit and loss account are affected—

(a) by transactions of a sort not usually undertaken by the company or otherwise by circumstances of an exceptional or non-recurrent nature; or

(b) by any change in the basis of accounting.

Part II.

Special Provisions where the Company is a Holding Company or a Subsidiary Company.

Modifications of and Additions to Requirements as to Company's own Accounts.

15. (1) This paragraph shall apply where the company is a holding company, whether or not it is itself a subsidiary of another body corporate but subparagraphs (4), (5) and (6) shall not apply to a private company taking advantage of subsection (1) of section 154 nor to a company which is at the end of its financial year the wholly owned subsidiary of another body corporate incorporated in the State.

(2) The aggregate amount of assets consisting of shares in, or amounts owing (whether on account of a loan or otherwise) from, the company's subsidiaries, distinguishing shares from indebtedness, shall be set out in the balance sheet separately from all the other assets of the company, and the aggregate amount of its indebtedness (whether on account of a loan or otherwise) to the company's subsidiaries shall be so set out separately from all its other liabilities, and—

(a) the references in Part I to the company's investments shall not include investments in its subsidiaries required by this paragraph to be separately set out; and

(b) paragraph 5, subparagraph (a) of paragraph 12, and subparagraph (2) of paragraph 14 shall not apply in relation to fixed assets consisting of interests in the company's subsidiaries.

(3) There shall be shown by way of note on the balance sheet or in a statement or report annexed thereto the number, description and amount of the shares in and debentures of the company held by its subsidiaries or their nominees, but excluding any of those shares or debentures in the case of which the subsidiary is concerned as personal representative or in the case of which it is concerned as trustee and neither the company nor any subsidiary thereof 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.

(4) Where group accounts are not submitted, there shall, subject to subparagraph (5), be annexed to the balance sheet a statement showing—

(a) the reasons why subsidiaries are not dealt with in group accounts;

(b) the net aggregate amount (so far as it concerns members of the holding company) of the subsidiaries' profits after deducting the subsidiaries' losses, or vice versa, for the respective financial years of the subsidiaries ending with or during the financial year of the company—

(i) so far as dealt with in the company's accounts for that year; and

(ii) so far as not so dealt with;

(c) the net aggregate amount, so far as concerns members of the holding company, of the subsidiaries' profits after deducting the subsidiaries' losses, or vice versa, for their previous financial years since they respectively became subsidiaries of the holding company—

(i) so far as dealt with in the company's accounts for the year referred to in head (b) (i); and

(ii) so far as not dealt with in the company's accounts for that or previous years;

(d) any qualifications contained in the report of the auditors of the subsidiaries on their accounts for their respective financial years ending as aforesaid, and any note or saving contained in those accounts to call attention to a matter which, apart from the note or saving, would properly have been referred to in such a qualification, in so far as the matter which is the subject of the qualification or note is not covered by the company's own accounts and is material from the point of view of its members;

or, in so far as the information required by this subparagraph is not obtainable, a statement that it is not obtainable.

(5) Heads (b) and (c) of subparagraph (4) shall apply only to profits and losses of a subsidiary which may properly be treated in the holding company's accounts as revenue profits or losses.

(6) Where group accounts are not submitted, there shall be annexed to the balance sheet a statement showing, in relation to the subsidiaries, if any, whose financial years did not end with that of the company—

(a) the reasons why the company's directors consider the subsidiaries' financial years should not end with that of the company; and

(b) the dates on which the subsidiaries' financial years ending last before that of the company respectively ended or the earliest and latest of those dates.

16. (1) The balance sheet of a company which is a subsidiary of another body corporate, whether or not it is itself a holding company, shall show the aggregate amount of its indebtedness to all bodies corporate of which it is a subsidiary or a fellow subsidiary and the aggregate amount of the indebtedness of all such bodies corporate to it, distinguishing in each case between indebtedness in respect of debentures and otherwise.

(2) For the purposes of this paragraph a company shall be deemed to be a fellow subsidiary of another body corporate if both are subsidiaries of the same body corporate but neither is the other's.

Consolidated Accounts of Holding Company and Subsidiaries.

17. Subject to paragraphs 18 to 22, the consolidated balance sheet and profit and loss account shall combine the information contained in the separate balance sheets and profit and loss accounts of the holding company and of the subsidiaries dealt with by the consolidated accounts, but with such adjustments, if any, as the directors of the holding company think necessary.

18. Subject as aforesaid and to Part III, the consolidated accounts shall, in giving the said information, comply, so far as practicable, with the requirements of this Act as if they were the accounts of an actual company.

19. Sections 191 and 192 shall not, by virtue of paragraphs 17 and 18 apply for the purpose of the consolidated accounts.

20. Paragraph 7 shall not apply for the purpose of any consolidated accounts laid before a company with the first balance sheet so laid after the operative date.

21. In relation to any subsidiaries of the holding company not dealt with by the consolidated accounts—

(a) subparagraphs (2) and (3) of paragraph 15 shall apply for the purpose of those accounts as if those accounts were the accounts of an actual company of which they were subsidiaries; and

(b) there shall be annexed the like statement as is required by subparagraph (4) of that paragraph where there are no group accounts, but as if references therein to the holding company's accounts were references to the consolidated accounts.

22. In relation to any subsidiaries (whether or not dealt with by the consolidated accounts), whose financial years did not end with that of the company, there shall be annexed the like statement as is required by subparagraph (6) of paragraph 15 where there are no group accounts.

Part III

Exceptions for Special Classes of Company.

23. (1) A banking or discount company shall not be subject to the requirements of Part I other than—

(a) in relation to its balance sheet, those of paragraphs 2 and 3, paragraph 4 (so far as it relates to fixed and current assets), paragraph 8 (except subparagraph (e)), paragraphs 9 and 10 and paragraph 11 (except subparagraph (7)); and

(b) in relation to its profit and loss account, those of subparagraphs (h) and (i) of paragraph 12, paragraph 13 and subparagraphs (1), (4), (5) and (6) of paragraph 14;

but where in its balance sheet capital reserves, revenue reserves or provisions (other than provisions for depreciation, renewals or diminution in value of assets) are not stated separately, any heading stating an amount arrived at after taking into account such a reserve or provision shall be so framed or marked as to indicate that fact, and its profit and loss account shall indicate by appropriate words the manner in which the amount stated for the company's profit or loss has been arrived at.

(2) The accounts of a banking or discount company shall not be deemed, by reason only of the fact that they do not comply with any requirements of Part I from which the company is exempt by virtue of this paragraph, not to give the true and fair view required by this Act.

(3) In this paragraph, “banking or discount company” means any company which satisfies the Minister that it ought to be treated for the purposes of this Schedule as a banking company or as a discount company.

24. In relation to an assurance company within the meaning of the Insurance Acts, 1909 to 1961, which is subject to and complies with the requirements of those Acts, relating to the preparation and deposit with the Minister of a balance sheet and profit and loss account, paragraph 23 shall apply as it applies in relation to a banking or a discount company, and such an assurance company shall also not be subject to the requirements of subparagraph (a) of paragraph 8 and subparagraphs (3), (4), (6) and (9) of paragraph 11.

25. (1) A company to which this paragraph applies shall not be subject to the following requirements of this Schedule:

(a) in relation to its balance sheet, those of paragraph 4 (except so far as that paragraph relates to fixed and current assets) and paragraphs 5, 6 and 7; and

(b) in relation to its profit and loss account, those of subparagraph (a), (e) and (f) of paragraph 12;

but a company taking advantage of this paragraph shall be subject, instead of the said requirements, to any prescribed conditions in relation to matters to be stated in its accounts or by way of note thereto and in relation to information to be furnished to the Minister or a person authorised by the Minister to require it.

(2) The accounts of a company shall not be deemed, by reason only of the fact that they do not comply with any of the requirements of Part I from which the company is exempt by virtue of this paragraph, not to give the true and fair view required by this Act.

(3) Subject to subparagraph (4), this paragraph applies to companies of any class prescribed for the purposes thereof, and a class of companies may be so prescribed if it appears to the Minister desirable in the public interest.

(4) If the Minister is of opinion that any of the conditions prescribed for the purposes of this paragraph have not been complied with in the case of any company, the Minister may direct that so long as the direction continues in force this paragraph shall not apply to the company.

26. Where a company entitled to the benefit of any provision contained in this Part is a holding company, the references in Part II to consolidated accounts complying with the requirements of this Act shall, in relation to consolidated accounts of that company, be construed as referring to those requirements in so far only as they apply to the separate accounts of that company.

Part IV.

Interpretation of Schedule.

27. (1) For the purposes of this Schedule—

(a) “provision” shall, subject to subparagraph (2), mean any amount written off or retained by way of providing for depreciation, renewals or diminution in value of assets or retained by way of providing for any known liability of which the amount cannot be determined with substantial accuracy;

(b) “reserve” shall not, subject as aforesaid, include any amount written off or retained by way of providing for depreciation, renewals or diminution in value of assets or retained by way of providing for any known liability;

(c) “capital reserve” shall not include any amount regarded as free for distribution through the profit and loss account, and “revenue reserve” shall mean any reserve other than a capital reserve;

and in this paragraph “liability” shall include all liabilities in respect of expenditure contracted for and all disputed or contingent liabilities.

(2) Where—

(a) any amount written off or retained by way of providing for depreciation, renewals or diminution in value of assets, not being an amount written off in relation to fixed assets before the operative date; or

(b) any amount retained by way of providing for any known liability;

is in excess of that which in the opinion of the directors is reasonably necessary for the purpose, the excess shall be treated for the purposes of this Schedule as a reserve and not as a provision.

28. For the purposes aforesaid “quoted investment” means an investment for which there has been granted a quotation or permission to deal on a recognised stock exchange within the State or on any stock exchange of repute outside the State, and “unquoted investment” shall be construed accordingly.