Pursuant to section 35B of the Financial Reporting Act 1993 (“the Act”), the Registrar of Companies gives the following notice (to which is appended a statement of reasons of the Registrar).
N o t i c e
1. Title—This notice is the Financial Reporting Act (United Kingdom Parent Companies) Exemption Notice 2009.
2. Commencement—This notice comes into force on its notification in the New Zealand Gazette.
3. Expiry—This notice expires on the close of 31 July 2014.
4. Application—An exemption granted by this notice applies to the following accounting periods of an exempt overseas company:
(a) an accounting period of the exempt overseas company that commenced before the exemption is granted (including an accounting period that ended before the exemption is granted) if:
(i) in the case of copies of financial statements or group financial statements for that period that are required to be delivered for registration under section 19 of the Act, the exemption is granted before those documents are required to be delivered for registration under that section; or
(ii) in any other case, the exemption is granted before the financial statements or group financial statements for that period are required to be completed; and
(b) subsequent accounting periods.
5. Interpretation—In this notice, unless the context otherwise requires:
Act means the Financial Reporting Act 1993
exempt overseas company means a company that:
(a) is incorporated in the United Kingdom; and
(b) is a parent company of a group that is able to take advantage of the exemption provided under section 230 of the Companies Act 1985 (UK) not to publish its individual statement of financial performance; and
(c) is a company to which section 19 of the Act applies; and
(d) has specified financial statements prepared in respect of it.
specified financial statements, in relation to an exempt overseas company, means:
(a) a statement of financial position and a statement of cash flows for the exempt overseas company; and
(b) the group financial statements that are required to be prepared in respect of the group of which the exempt overseas company is parent in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.
6. Exemptions for directors of exempt overseas companies—Every director of an exempt overseas company is exempted from the following provisions in respect of the exempt overseas company:
(a) sections 10(1) of the Act:
(i) to the extent that it requires a statement of financial performance in relation to the exempt overseas company to be completed, dated and signed; and
(ii) to the extent that it requires any other financial statements in relation to the exempt overseas company to comply with section 11 of the Act; and
(b) sections 11(1) and 14(1) of the Act;
(c) section 13 of the Act to the extent that it requires group financial statements to be prepared in relation to the exempt overseas company to comply with section 14 of the Act; and
(d) section 19(3) of the Act to the extent that it requires a copy of a statement of financial performance in relation to the exempt overseas company to be delivered to the Registrar for registration.
7. Conditions—The exemptions in clause 6 are subject to the conditions that:
(a) the exempt overseas company, in relation to its specified financial statements, complies with
the laws of the United Kingdom that relate to the preparation, content, auditing, and public filing of those statements; and
(b) the specified financial statements of the exempt overseas company comply with IFRS as adopted by the European Union; and
(c) if, in complying with IFRS, the specified financial statements do not give a true and fair view of
the matters to which they relate, the directors of the exempt overseas company add information and explanations that will give a true and fair view of those matters; and
(d) the specified financial statements are accompanied by an audit report that complies with the requirements of the law of the United Kingdom.
Dated at Wellington this 6th day of April 2009.
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Statement of Reasons
This notice, which comes into force on the day after
its notification in the New Zealand Gazette and expires on 31 July 2014, exempts the directors of certain overseas companies incorporated in the United Kingdom (the “UK”) from various provisions of the Financial Reporting Act 1993 (“the Act”).
Under section 230 of the Companies Act 1985 (UK), a parent company that prepares group accounts may omit its own individual statement of financial performance from
its published annual accounts providing:
? the parent company produces group accounts in accordance with IFRS;
? the notes to the group accounts state the amount of the parent company’s profit for the financial year; and
? the notes to the group accounts state that the exemption under section 230 applies.
The exemption applies to overseas companies that are incorporated in the UK and which are able to take advantage of the exemption under section 230 (the “exempt overseas companies”). The effect of the exemption is to allow the directors of the exempt overseas companies to provide
the financial statements that the exempt overseas companies are required to provide under the financial reporting requirements in the UK. The principal differences in financial statements provided by overseas companies relying on the exemptions are:
? The directors of the exempt overseas company will prepare and register consolidated financial statements, and a parent statement of financial position and statement of cash flows, but not a stand-alone parent statement of financial performance;
? the financial statements and consolidated financial statements will comply with generally accepted accounting principles in the UK (rather than generally accepted accounting practice in New Zealand); and
? the financial statements and consolidated financial statements will be audited in accordance with the requirements set out in UK legislation and the auditor’s report will provide the information required by UK legislation instead of the Act.
The Registrar considers that it is appropriate to grant the exemptions because:
? the effect of the exemptions is to allow the exempt overseas companies to provide the accounts that they are required to prepare under the reporting requirements of the UK;
? an exempt overseas company relying on the exemptions will still be required to file:
? a stand alone statement of financial position and statement of cash flows for the parent company;
? consolidated group financial statements;
? financial statements for the group’s New Zealand business prepared in accordance with New Zealand generally accepted accounting practice as if the members of the group were companies formed and registered in New Zealand;
? the Registrar has had regard to the financial reporting and audit requirements that the exempt overseas companies must comply with in relying on the exemptions and is satisfied that the financial statements required to be published under UK financial reporting laws provide sufficient information to avoid any detriment to members of the public who have dealings with the exempt overseas companies; and
? the exemptions address the particular difficulties experienced by the exempt overseas companies that would not be required to publish a stand alone parent company statement of financial performance, but for
the requirements of the Act in New Zealand. The exemptions are not broader than what is reasonably necessary to address these difficulties.
Date of notification in the New Zealand Gazette: 9 April 2009.
This notice is administered by the Registrar of Companies.