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The Companies (Revision of Defective Accounts and Reports) Regulations 2008

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The Companies (Revision of Defective Accounts and Reports) Regulations 2008 List of acts
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CONTENTS

Statutory Instruments

2008 No. 373

COMPANIES

The Companies (Revision of Defective Accounts and Reports) Regulations 2008

Made                                          19th February 2008

Laid before Parliament                 20th February 2008

Coming into force                                6th April 2008

PART 1 INTRODUCTION

PART 2 REVISED ACCOUNTS AND REPORTS

PART 3 AUDITOR’S REPORTS

PART 4 EFFECT OF REVISION

PART 5 PUBLICATION, LAYING AND DELIVERY OF REVISED ACCOUNTS ETC

PART 6 ABBREVIATED ACCOUNTS AND SUMMARY FINANCIAL STATEMENTS

PART 7 COMPANIES EXEMPT FROM AUDIT

PART 8 FINAL PROVISIONS

Signature

Explanatory Note

 

The Secretary of State makes the following Regulations in exercise of the powers conferred by sections 454(3) and (4) and 1292(1)(a) and (c) of the Companies Act 2006(1).

PART 1

INTRODUCTION

Citation, commencement and application

1.—(1) These Regulations may be cited as the Companies (Revision of Defective Accounts and Reports) Regulations 2008.

(2) These Regulations come into force on 6th April 2008 and apply in relation to companies’ financial years beginning on or after that date.

Interpretation

2.—(1) In these Regulations—

“the 2006 Act” means the Companies Act 2006;

“date of the original annual accounts” means the date on which the original annual accounts were approved by the board of directors under section 414 of the 2006 Act (approval and signing of accounts);

“date of the original directors’ remuneration report” means the date on which the original directors’ remuneration report was approved by the board of directors under section 422 of the 2006 Act (approval and signing of directors’ remuneration report);

“date of the original directors’ report” means the date on which the original directors’ report was approved by the board of directors under section 419 of the 2006 Act (approval and signing of directors’ report);

“date of revision” means the date on which revised accounts are approved by the board of directors under regulation 4 or (as the case may be) a revised directors’ report or directors’ remuneration report is approved by them under regulation 5 or 6;

“original”, in relation to annual accounts, or a directors’ report or directors’ remuneration report, means the annual accounts or (as the case may be) directors’ report or directors’ remuneration report which are the subject of revision by, respectively, revised accounts or a revised report and, in relation to abbreviated accounts or a summary financial statement, means abbreviated accounts or a summary financial statement based on the original annual accounts or directors’ report or directors’ remuneration report;

“revised accounts” mean revised annual accounts of a company prepared by the directors under section 454 of the 2006 Act (voluntary revision of accounts etc), either through revision by replacement or revision by supplementary note; in the latter case the revised accounts comprise the original annual accounts together with the supplementary note;

“revised report” means a revised directors’ report or directors’ remuneration report prepared by the directors under section 454 of the 2006 Act, either through revision by replacement or revision by supplementary note; in the latter case the revised report comprises the original directors’ report or directors’ remuneration report together with the supplementary note;

“revision by replacement” means revision by the preparation of a replacement set of accounts, directors’ report or directors’ remuneration report, in substitution for the original annual accounts, directors’ report or directors’ remuneration report; and

“revision by supplementary note” means revision by the preparation of a note indicating corrections to be made to the original annual accounts, directors’ report or directors’ remuneration report.

(2) References in these Regulations to a member or members of a company include a reference to a person nominated to enjoy information rights under section 146 of the 2006 Act (traded companies: nomination of persons to enjoy information rights).

(3) References in these Regulations to provisions or requirements of the 2006 Act as to matters to be included in annual accounts and reports include relevant provisions of the Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008(1) and the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008(2).

PART 2

REVISED ACCOUNTS AND REPORTS

Content of revised accounts or revised report

3.—(1) Subject to regulation 19(1), the provisions of the 2006 Act and, where applicable, Article 4 of the IAS Regulation as to the matters to be included in the annual accounts of a company apply to revised accounts as if the revised accounts were prepared and approved by the directors as at the date of the original annual accounts.

(2) In particular—

(a)in the case of Companies Act accounts—

(i)section 393 of the 2006 Act (accounts to give true and fair view),

(ii)section 396(2) of that Act (Companies Act individual accounts: true and fair view), and

(iii)section 404(2) of that Act (Companies Act group accounts: true and fair view), and

(b)in the case of IAS accounts, section 393 of the 2006 Act and international accounting standards,

apply so as to require a true and fair view to be shown in the revised accounts of the matters referred to in those accounts, viewed as at the date of the original annual accounts.

(3) In the case of Companies Act accounts, paragraph 13(b) of Schedule 1 to the Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008 or (where applicable) paragraph 13(b) of Schedule 1 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 apply to revised accounts as if the reference in those paragraphs to the date on which the accounts were signed was to the date of the original annual accounts.

(4) The provisions of the 2006 Act as to the matters to be included in a directors’ report or directors’ remuneration report apply to a revised report as if the revised report was prepared and approved by the directors of the company as at the date of the original directors’ report or directors’ remuneration report.

Approval and signature of revised accounts

4.—(1) Section 414 of the 2006 Act applies to revised accounts, save that in the case of revision by supplementary note, it applies as if it required a signature on the supplementary note instead of on the company’s balance sheet.

(2) Where copies of the original annual accounts have been sent out to members under section 423(1) of the 2006 Act (duty to circulate copies of annual accounts and reports), laid before the company in general meeting under section 437(1) of that Act (public companies: laying of accounts and reports before general meeting) in the case of a public company, or delivered to the registrar under section 441(1) of that Act (duty to file accounts and reports with the registrar), the directors must before approving the revised accounts under section 414, cause statements as to the following matters to be made in a prominent position in the revised accounts (in the case of a revision by supplementary note, in that note)—

(a)in the case of a revision by replacement—

(i)that the revised accounts replace the original annual accounts for the financial year (specifying it),

(ii)that they are now the statutory accounts of the company for that financial year,

(iii)that they have been prepared as at the date of the original annual accounts and not as at the date of revision and accordingly do not deal with events between those dates,

(iv)the respects in which the original annual accounts did not comply with the requirements of the 2006 Act, and

(v)any significant amendments made consequential upon the remedying of those defects,

(b)in the case of a revision by supplementary note—

(i)that the note revises in certain respects the original annual accounts of the company and is to be treated as forming part of those accounts, and

(ii)that the annual accounts have been revised as at the date of the original annual accounts and not as at the date of revision and accordingly do not deal with events between those dates,

and must, when approving the revised accounts, cause the date on which the approval is given to be stated in them (in the case of revision by supplementary note, in that note); section 414(4) and (5) apply with respect to a failure to comply with this paragraph as if the requirements of this paragraph were requirements of Part 15 of that Act.

Approval and signature of revised directors’ report

5.—(1) Section 419 of the 2006 Act applies to a revised directors’ report, save that in the case of revision by supplementary note, it applies as if it required the signature to be on the supplementary note.

(2) Where copies of the original directors’ report have been sent out to members under section 423(1) of the 2006 Act, laid before the company in general meeting under section 437(1) of that Act in the case of a public company, or delivered to the registrar under section 441(1), the directors must, before approving the revised report under section 419, cause statements as to the following matters to be made in a prominent position in the revised report (in the case of a revision by supplementary note, in that note)—

(a)in the case of a revision by replacement—

(i)that the revised report replaces the original report for the financial year (specifying it),

(ii)that it has been prepared as at the date of the original directors’ report and not as at the date of revision and accordingly does not deal with any events between those dates,

(iii)the respects in which the original directors’ report did not comply with the requirements of the 2006 Act, and

(iv)any significant amendments made consequential upon the remedying of those defects,

(b)in the case of a revision by supplementary note—

(i)that the note revises in certain respects the original directors’ report of the company and is to be treated as forming part of that report, and

(ii)that the directors’ report has been revised as at the date of the original directors’ report and not as at the date of the revision and accordingly does not deal with events between those dates,

and must, when approving the revised report, cause the date on which the approval is given to be stated in them (in the case of a revision by supplementary note, in that note); section 419(3) and (4) of the 2006 Act apply with respect to a failure to comply with this paragraph as if the requirements of this paragraph were requirements of Part 15 of that Act.

Approval and signature of revised directors’ remuneration report

6.—(1) Section 422 of the 2006 Act applies to a revised directors’ remuneration report, save that in the case of revision by supplementary note, it applies as if it required the signature to be on the supplementary note.

(2) Where copies of the original directors’ remuneration report have been sent out to members under section 423(1) of the 2006 Act, laid before the company in general meeting under section 437(1) of that Act in the case of a public company, or delivered to the registrar under section 441(1) of that Act, the directors must, before approving the revised report under section 422, cause statements as to the following matters to be made in a prominent position in the revised report (in the case of a revision by supplementary note, in that note)—

(a)in the case of a revision by replacement—

(i)that the revised report replaces the original report for the financial year (specifying it),

(ii)that it has been prepared as at the date of the original directors’ remuneration report and not as at the date of revision and accordingly does not deal with any events between those dates,

(iii)the respects in which the original directors’ remuneration report did not comply with the requirements of the 2006 Act, and

(iv)any significant amendments made consequential upon the remedying of those defects,

(b)in the case of a revision by supplementary note—

(i)that the note revises in certain respects the original directors’ remuneration report of the company and is to be treated as forming part of that report, and

(ii)that the directors’ remuneration report has been revised as at the date of the original directors’ remuneration report and not as at the date of the revision and accordingly does not deal with events between those dates,

and must, when approving the revised report, cause the date on which the approval is given to be stated in it (in the case of a revision by supplementary note, in that note); section 422(2) and (3) of the 2006 Act apply with respect to a failure to comply with this paragraph as if the requirements of this paragraph were requirements of Part 15 of that Act.

PART 3

AUDITOR’S REPORTS

Auditor’s report on revised accounts and revised report

7.—(1) Subject to paragraph (2), a company’s current auditor shall make a report or (as the case may be) further report under section 495 of the 2006 Act (auditor’s report on company’s annual accounts), to the company’s members under this regulation on any revised accounts prepared under section 454 of that Act and—

(a)section 498 of that Act (duties of auditor) applies with any necessary modifications, and

(b)section 495(1) does not apply with respect to the revised accounts.

(2) Where the auditor’s report on the original annual accounts was not made by the company’s current auditor, the directors of the company may resolve that the report required by paragraph (1) is to be made by the person or persons who made that report, provided that that person or those persons agree to do so and would be qualified for appointment as auditor of the company.

(3) Subject to regulation 19(1), an auditor’s report under this regulation must state whether in the auditor’s opinion the revised accounts have been properly prepared in accordance with the provisions of the 2006 Act and, where applicable, Article 4 of the IAS Regulation as they have effect under these Regulations, and in particular whether a true and fair view, seen as at the date the original annual accounts were approved, is given by the revised accounts with respect to the matters set out in section 495(3)(a) to (c) of that Act.

The report must also state whether in the auditor’s opinion the original annual accounts failed to comply with the requirements of the 2006 Act and, where applicable, Article 4 of the IAS Regulation in the respects identified by the directors (in the case of a revision by replacement) in the statement required by regulation 4(2)(a)(iv) or (in the case of a revision by supplementary note) in the supplementary note.

(4) The auditor must also state whether the information contained in the directors’ report for the financial year for which the annual accounts are prepared (which is, if the report has been revised under these Regulations, that revised report) is consistent with those accounts.

(5) Sections 503 to 506 of the 2006 Act (signature of auditor’s report) apply to an auditor’s report under this regulation as they apply to an auditor’s report under section 495(1) of that Act, with any necessary modifications.

(6) An auditor’s report under this regulation shall, upon being signed under section 503 of the 2006 Act as so applied, be, as from the date of signature, the auditor’s report on the annual accounts of the company in place of the report on the original annual accounts.

Auditor’s report where company ceases to be exempt from audit

8.—(1) Where as a result of the revisions to the accounts, the company is no longer entitled to exemption from audit under Chapter 1 of Part 16 of the 2006 Act, the company shall cause an auditor’s report on the revised accounts to be prepared.

(2) The auditor’s report must be delivered to the registrar within 28 days after the date of revision of the accounts.

(3) Sections 451 (default in filing accounts and reports: offences) and 452 (default in filing accounts: court order) of the 2006 Act apply with respect to a failure to comply with the requirements of this regulation as they apply with respect to a failure to comply with the requirements of section 441 of that Act but as if—

(a)the references in section 451(1) and in section 452(1)(a) to “the period for filing those accounts and reports” were references to the period of 28 days referred to in paragraph (2); the reference in section 451(1) and (2) to “that period” are to be construed accordingly, and

(b)the references in section 451(3) to “the documents in question” and “this Part” were, respectively, a reference to the auditor’s report referred to in paragraph (2) and the provisions of Part 16 of the 2006 Act as applied by these Regulations.

Auditor’s report on revised report alone

9.—(1) Subject to paragraph (2), a company’s current auditor shall make a report or (as the case may be) further report under section 496 or 497 of the 2006 Act (as the case may be) to the company’s members under this regulation on any revised report prepared under section 454 of that Act if the relevant annual accounts have not been revised at the same time.

(2) Where the auditor’s report on the annual accounts for the financial year covered by the revised report was not made by the company’s current auditor, the directors of the company may resolve that the report required by paragraph (1) is to be made by the person or persons who made that report, provided that that person or those persons agree to do so and would be qualified for appointment as auditor of the company.

(3) Where a revised directors’ report is prepared under section 454 of the 2006 Act, the auditor’s report must state whether in his opinion the information given in that revised report is consistent with the annual accounts for the relevant year (specifying it).

(4) Where a revised directors’ remuneration report is prepared under section 454 of the 2006 Act, the auditor’s report must state whether in his opinion any auditable part of that revised report has been properly prepared (“auditable part” being a part containing information required by Part 3 of Schedule 8 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008).

(5) Sections 503 to 506 of the 2006 Act apply to an auditor’s report under this regulation as they apply to an auditor’s report under section 495 of that Act, with any necessary modifications.

PART 4

EFFECT OF REVISION

Effect of revision of accounts

10.—(1) Upon the directors approving revised accounts under regulation 4, the provisions of the 2006 Act have effect as if the revised accounts were, as from the date of their approval, the annual accounts of the company in place of the original annual accounts.

(2) In particular, the revised accounts shall as from that date be the company’s annual accounts for the relevant financial year for the purposes of the following provisions of the 2006 Act—

(a)section 431 (right of member or debenture holder to copies of accounts and reports: unquoted companies),

(b)section 432 (right of member or debenture holder to copies of accounts and reports: quoted companies),

(c)section 434(3) (requirements in connection with publication of statutory accounts), and

(d)sections 423 (duty to circulate copies of annual accounts and reports), 437 (public companies; laying of accounts and reports before general meeting) and 441 (duty to file accounts and reports with the registrar), if the requirements of those sections have not been complied with prior to the date of revision.

Effect of revision of report

11.—(1) Subject to the following provisions of these Regulations, upon the directors approving a revised report under regulation 5 or 6 the provisions of the 2006 Act have effect as if the revised report was, as from the date of its approval, the directors’ report or the directors’ remuneration report (as the case may be) in place of the original directors’ report or directors’ remuneration report (as the case may be).

(2) In particular, the revised report shall as from that date be the directors’ report or the directors’ remuneration report for the relevant financial year for the purposes of—

(a)sections 431 and 432 of the 2006 Act, and

(b)sections 423 , 437 and 441 of that Act if the requirements of those sections have not been complied with prior to the date of revision.

PART 5

PUBLICATION, LAYING AND DELIVERY OF REVISED ACCOUNTS ETC

Publication of revised accounts and reports

12.—(1) This regulation has effect where the directors have prepared revised accounts or a revised report under section 454 of the 2006 Act and copies of the original annual accounts or report have been sent to any person under section 423 or 146 of that Act.

(2) The directors must send to any such person—

(a)in the case of a revision by replacement, a copy of the revised accounts, or (as the case may be) the revised report, together with a copy of the auditor’s report on those accounts, or (as the case may be) on that report, or

(b)in the case of a revision by supplementary note, a copy of that note together with a copy of the auditor’s report on the revised accounts, or (as the case may be) on the revised report,

not more than 28 days after the date of revision.

(3) The directors must also, not more than 28 days after the revision, send a copy of the revised accounts or (as the case may be) revised report, together with a copy of the auditor’s report on those accounts or (as the case may be) on that report, to any person who is not a person entitled to receive a copy under paragraph (2) but who is, as at the date of revision—

(a)a member of the company,

(b)a holder of the company’s debentures, or

(c)a person who is entitled to receive notice of general meetings,

unless the company would be entitled at that date to send to that person a summary financial statement under section 426 of the 2006 Act (option to provide summary financial statement). Section 423(2) to (4) of that Act apply to this paragraph as they apply to section 423(1).

(4) Section 425 of the 2006 Act (default in sending out copies of accounts and reports: offences) applies to a default in complying with this regulation as if the provisions of this regulation were provisions of section 423 and as if the references in that section to “the company” and “every officer of the company who is in default” were a reference to each of the directors who approved the revised accounts under regulation 4 or revised report under regulation 5 or 6.

(5) Where, prior to the date of revision of the original annual accounts, the company had completed sending out copies of those accounts under section 423 of the 2006 Act, references in that Act to the day on which accounts are sent out under section 423 are to be construed as referring to the day on which the original accounts were sent out (applying section 423(5) as necessary) notwithstanding that those accounts have been revised; where the company had not completed, prior to the date of revision, the sending out of copies of those accounts under that section, such references are to the day, or the last day, on which the revised accounts are sent out.

Laying of revised accounts or a revised report

13.—(1) This regulation has effect where the directors of a public company have prepared revised accounts or a revised report under section 454 of the 2006 Act and copies of the original annual accounts or report have been laid before a general meeting under section 437 of that Act.

(2) A copy of the revised accounts or (as the case may be) the revised report, together with a copy of the auditor’s report on those accounts, or (as the case may be) on that report, must be laid before the next general meeting of the company held after the date of revision at which any annual accounts for a financial year are laid, unless the revised accounts, or (as the case may be) the revised report, have already been laid before an earlier general meeting.

(3) Section 438 of the 2006 Act (public companies: offence of failure to lay accounts and reports) applies with respect to a failure to comply with the requirements of this regulation as it has effect with respect to a failure to comply with the requirements of section 437 of that Act but as if—

(a)the reference in section 438(1) to “the period allowed” was a reference to the period between the date of revision of the revised accounts or (as the case may be) the revised report and the date of the next general meeting of the company held after the date of revision at which any annual accounts for a financial year are laid; references in section 438(1) and (2) to “that period” are to be construed accordingly; and

(b)the references in section 438(3) to “the documents in question” and “this Part” were, respectively, a reference to the documents referred to in paragraph (2) and the provisions of Part 15 of the 2006 Act as applied by these Regulations.

Delivery of revised accounts or a revised report

14.—(1) This regulation has effect where the directors have prepared revised accounts or a revised report under section 454 of the 2006 Act and a copy of the original annual accounts or report has been delivered to the registrar under section 441(1) of that Act.

(2) The directors of the company must, within 28 days of the date of revision, deliver to the registrar—

(a)in the case of a revision by replacement, a copy of the revised accounts or (as the case may be) the revised report, together with a copy of the auditor’s report on those accounts or (as the case may be) on that report, or

(b)in the case of a revision by supplementary note, a copy of that note, together with a copy of the auditor’s report on the revised accounts or (as the case may be) on the revised report.

(3) Sections 451 (default in filing accounts and reports: offences) and 452 (default in filing accounts: court order) of the 2006 Act apply with respect to a failure to comply with the requirements of this regulation as they apply with respect to a failure to comply with the requirements of section 441 of that Act but as if—

(a)the references in section 451(1) and in section 452(1)(a) to “the period for filing those accounts and reports” were references to the period of 28 days referred to in paragraph (2); the references in section 451(1) and (2) to “that period” are to be construed accordingly, and

(b)the references in section 451(3) to “the documents in question” and “this Part” were, respectively, a reference to the documents referred to in paragraph (2) and the provisions of Part 15 of the 2006 Act as applied by these Regulations.

 
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