COMPANIES ACT - 1963 (ACT 179)

    Section - 127 - Group Accounts

    (1) The provisions of this section shall apply where, at the end of the company's financial year, a company has subsidiaries.

    (2) Accounts and statements dealing, as hereinafter mentioned, with the profit or loss and the state of affairs of the company and the subsidiaries, in this Code called group accounts, shall, subject to subsection (3) of this section, be sent to the members and debentureholders of the company with the company's own profit and loss account and balance sheet pursuant to section 124 of this Code.

    (3) Notwithstanding anything contained in the foregoing subsection,

    (a) group accounts shall not be required where the company at the end of the company's financial year is the wholly owned subsidiary of another company;

    (b) subject to the approval of the Registrar, group accounts need not deal with a subsidiary of the company if the company's directors are of opinion that,

    (i) it is impracticable or would be of no real value to the members and debentureholders of the company in view of the insignificance of the amount involved; or

    (ii) it would involve expense or delay out of proportion to the value to members and debentureholders of the company; or

    (iii) the result would be misleading or harmful to the business of the company or any of its subsidiaries; or

    (iv) the business of the holding company and that of the subsidiaries are so different that they cannot reasonably be treated as a single undertaking.

    (4) Subject to subsection (5) of this section, the group accounts shall be consolidated accounts comprising;

    (a) a consolidated profit and loss account dealing with the profit or loss of the company and all subsidiaries to be dealt with in the group accounts;

    (b) a consolidated balance sheet dealing with the state of affairs of the company and those subsidiaries.

    (5) If the company's directors are of the opinion that it is better for the purpose of presenting the same or equivalent information in a form which may be more readily appreciated by the members and debentureholders, the group accounts may be prepared in a form other than that required by subsection (4) of this section and, in particular, may consist of more than one set of consolidated accounts dealing respectively with the company and various groups of subsidiaries or of separate accounts, dealing with each of the subsidiaries, attached to the company's accounts or of statements expanding the information about the subsidiaries in the company's own accounts, or any combination of those forms.

    (6) The group profit and loss account may be wholly or partly incorporated in the company's own profit and loss account and a consolidated profit and loss account dealing with the company and all or any of its subsidiaries shall be deemed to be a profit and loss account of the company complying with subsection (3) of section 125 of this Code, so long as it complies with the requirements of this section and shows how much of the consolidated profit or loss for the financial year is dealt with in the accounts of the company.

    (7) The group accounts shall give a true and fair view of the profit or loss and of the state of affairs of the company and the subsidiaries dealt with thereby as a whole, so far as concerns the interests of the company.

    Fourth Sch. Part III.

    (8) The accounts of the company and the group accounts, if any, shall comply with the requirements of Part III of the Fourth Schedule to this Code.

    (9) The Registrar may, on the application or with the consent of the company's directors, modify in relation to that company any of the requirements in Part III of the Fourth Schedule for the purpose of adapting them to the circumstances of the company but no such modification shall derogate from the obligation imposed by subsection (7) of this section to give a true and fair view of the profit or loss and the state of affairs of the company and the subsidiaries as a whole, so far as concerns the interests of the company.

    (10) A holding company's directors shall secure that, except where in their opinion there are good reasons against it, in which case their reasons shall be stated in a note on the company's accounts, the financial year of each of its subsidiaries shall coincide with the company's own financial year, and the group accounts shall deal with the affairs of the holding company and the subsidiaries for the same financial year.

    (11) Where it appears to the Registrar desirable for a holding company or subsidiary company to extend its financial year so that the subsidiary's financial year may end with that of the holding company, and for that purpose to postpone the despatch of the accounts and reports referred to in section 124 of this Code from one calendar year to another, the Registrar may direct that the despatch thereof by one or other of these companies shall not be required in the earlier of the said calendar years.

    (12) If the financial year of a subsidiary does not coincide with that of the holding company the group accounts shall, unless the Registrar shall otherwise direct, deal with the subsidiary's profit or loss for, and the state of affairs as at the end of, its financial year ending last before that of the holding company.