Statutory Instrument 1990 No. 515

The Companies (Summary Financial Statement) Regulations 1990

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© Crown Copyright 1990

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1990 No. 515

COMPANIES

The Companies (Summary Financial Statement) Regulations 1990

The Secretary of State, in exercise of his powers under section 251(1), (2) and (3) of the Companies Act 1985^[1] and of all other powers enabling him in that behalf, hereby makes the following Regulations:

Citation and commencement
    1.    These Regulations may be cited as the Companies (Summary Financial Statement) Regulations 1990 and shall come into force on 1st April 1990.

Interpretation
    2.    In these Regulations, unless otherwise stated:
"the 1985 Act" means the Companies Act 1985 as amended by the Companies Act 1989^[2];
"the 1989 Act" means the Companies Act 1989;
"a listed public company" means a public company whose shares, or any class of whose shares, are listed within the meaning of section 251(1) of the 1985 Act;
"full accounts and reports" means a company's annual accounts, the directors' report and the auditors' report on those accounts required to be circulated to members under section 238(1) of the 1985 Act^[3] and "full" in relation to any balance sheet, profit and loss account, group accounts or directors' report means any such document comprised in the full accounts and reports.

    3.    Regulations 4 to 9 have effect in connection with a summary financial statement of a listed public company for a financial year commencing on or after 23rd December 1989, whilst regulation 10 has effect for adapting those Regulations for a financial year of such a company commencing prior to that date, that is for a financial year to which the transitional arrangements set out in article 7 of, and Part II of Schedule 2 to, the Companies Act 1989 (Commencement No. 4 and Transitional and Saving Provisions) Order 1990^[4] are applicable.

Cases in which a summary financial statement may be sent
    4.—(1)  A listed public company may send a summary financial statement to members of the company in accordance with section 251 of the 1985 Act and these Regulations, instead of copies of its full accounts and reports, in any case where it is not prohibited from doing so by any relevant provision in its memorandum or articles of association.

    (2)  For the purposes of paragraph (1) above, any provision (however expressed) in a company's memorandum or articles of association which requires copies of the full accounts and reports to be sent to members, or which forbids the sending of summary financial statements under section 251 of the 1985 Act, is a relevant provision, save that in the case of a company incorporated prior to 1st July 1985 a provision in its articles of association equivalent to Article 127 of Table A of Schedule 1 to the Companies Act 1948^[5] (whether as originally enacted or as amended by Schedule 2 to the Companies Act 1976^[6]) is not a relevant provision in the case of a financial year of the company which commences prior to 23rd December 1989 in respect of which no accounts have been circulated to members under section 238(1) of the 1985 Act prior to 1st April 1990.

Conditions that must be complied with
    5.    A listed public company may not send out under section 251 of the 1985 Act a summary financial statement to a member, in place of copies of its full accounts and reports, unless the following conditions have been complied with:
 (a) the company must have ascertained, in accordance with section 251(2) of the 1985 Act and regulation 6 below, that the member does not wish to continue to receive copies of those documents;
 (b) the period allowed for laying and delivering full accounts and reports under section 244 of the 1985 Act^[7] for the financial year must not have expired;
 (c) the summary financial statement must have been approved by the board of directors and the original statement signed on behalf of the board by a director of the company;
 (d) the summary financial statement must state the name of the person who signed it on behalf of the board;
 (e) the summary financial statement of a company which is not required to prepare group accounts under Part VII of the 1985 Act must include the following statement in a prominent position: "This summary financial statement does not contain sufficient information to allow for a full understanding of the results and state of affairs of the company. For further information the full annual accounts, the auditors' report on those accounts and the directors' report should be consulted.";
 (f) the summary financial statement of a company which is required to prepare group accounts under Part VII of the 1985 Act must include the following statement in a prominent position: "This summary financial statement does not contain sufficient information to allow for a full understanding of the results of the group and state of affairs of the company or of the group. For further information the full annual accounts, the auditors' report on those accounts and the directors' report should be consulted.";
 (g) the summary financial statement must contain a conspicuous statement of the right of members, under section 239 of the 1985 Act^[8] to demand, free of charge, a copy of the company's last full accounts and reports;
 (h) the summary financial statement must be accompanied by a printed card or form in respect of which any postage necessary for its return to the company has been, or will be, paid by the company and which is so worded as to enable a member, by marking a box and returning the card or form, to notify the company of either or both of the following matters:
 (i) that he wishes to receive full accounts and reports for the financial year covered by the summary financial statement, in reliance on his rights under section 239 of the 1985 Act;
 (ii) that he wishes to receive full accounts and reports for future financial years.

The manner in which the wishes of members are to be ascertained
    6.—(1)  For the purposes of section 251(2) of the 1985 Act, whether or not a member wishes to receive copies of the full accounts and reports for a financial year is to be ascertained:
 (a) from any relevant notification in writing he has given to the company as to whether he wishes to continue to receive (or, having previously chosen to receive a summary financial statement, to receive for the future) copies of the full accounts and reports or as to whether he wishes, instead of copies of those documents, to receive summary financial statements under section 251 of the 1985 Act; or
 (b) failing any such express notification, from any failure to respond to an opportunity given to the member to elect to receive copies of the full accounts and reports as part of a relevant consultation of his wishes by the company.

    (2)  For the purposes of paragraph (1)(a) above, a notification is a relevant notification with respect to a financial year if it relates to that year (whether or not it has been given at the invitation of the company and whether before or after the date of these Regulations) and if it:
 (a) is received by the company not later than 28 days before the first date on which copies of the full accounts and reports are sent out to members in compliance with section 238(1) of the 1985 Act with respect to the financial year; and
 (b) has not been impliedly countermanded, where the notification is of a wish to receive full accounts and reports, by a failure by the member concerned to respond to a subsequent relevant consultation of his wishes.

    (3)  For the purposes of this Regulation, a relevant consultation of the wishes of a member is a notice given to the member which:
 (a) states that for the future he will be sent a summary financial statement instead of the full accounts and reports of the company, unless he notifies the company in writing that he wishes to continue to receive those documents;
 (b) contains a statement in a prominent position that a failure to respond to the notice has important consequences;
 (c) accompanies a copy of the full accounts and reports;
 (d) accompanies a copy of a summary financial statement, prepared in accordance with section 251 of the 1985 Act and these Regulations, with respect to the financial year covered by those full accounts and reports and which is identified in the notice as an example of the document which the member will receive for the future unless he notifies the company to the contrary; and
 (e) is accompanied by a printed card or form, in respect of which any postage necessary for its return to the company has been, or will be, paid by the company, which is so worded as to enable a member, by marking a box and returning the card or form, to notify the company of either or both of the following matters:
 (i) that he wishes to receive full accounts and reports for the next financial year for which he is entitled to receive them,
 (ii) to notify it that he wishes to receive them for all future financial years.

Form and content of summary financial statements: Companies and groups other than banking and insurance companies and groups
    7.—(1)  The summary financial statement of a listed public company the directors of which are not required to prepare group accounts under Part VII of the 1985 Act, other than a banking or insurance company the directors of which have prepared accounts for the financial year in question in accordance with the special provisions of Part VII of the 1985 Act relating to banking and insurance companies, shall be in the form, and contain the information, required by Schedule 1 to these Regulations so far as applicable to such a company.

    (2)  The summary financial statement of a listed public company the directors of which are required to prepare group accounts under Part VII of the 1985 Act, other than the parent company of a banking or insurance group the directors of which have prepared accounts for the financial year in question in accordance with the special provisions of Part VII of the 1985 Act relating to banking and insurance groups, shall be in the form, and contain the information, required by Schedule 1 to these Regulations, so far as applicable to such a company.

Form and content of summary financial statements: Banking companies and groups
    8.—(1)  The summary financial statement of a listed public company the directors of which are not required to prepare group accounts under Part VII of the 1985 Act and who, being entitled to do so by reason of the company being a banking company, have prepared accounts for the financial year in question in accordance with the special provisions of Part VII of the 1985 Act relating to banking companies shall be in the form, and contain the information, required by Schedule 2 to these Regulations, so far as applicable to such a company.

    (2)  The summary financial statement of a listed public company the directors of which are required to prepare group accounts under Part VII of the 1985 Act and who, being entitled to do so by reason of the company being the parent company of a banking group, have prepared accounts for the financial year in question in accordance with the special provisions of Part VII of the 1985 Act relating to banking groups shall be in the form, and contain the information, required by Schedule 2 to these Regulations, so far as applicable to such a company.

Form and content of summary financial statements: Insurance companies and groups
    9.—(1)  The summary financial statement of a listed public company the directors of which are not required to prepare group accounts under Part VII of the 1985 Act and who, being entitled to do so by reason of the company being an insurance company, have prepared accounts for the financial year in question in accordance with the special provisions of Part VII of the 1985 Act relating to insurance companies shall be in the form, and contain the information, required by Schedule 3 to these Regulations, so far as applicable to such a company.

    (2)  The summary financial statement of a listed public company the directors of which are required to prepare group accounts under Part VII of the 1985 Act and who, being entitled to do so by reason of the company being the parent company of an insurance group, have prepared accounts for the financial year in question in accordance with the special provisions of Part VII of the 1985 Act relating to insurance groups shall be in the form, and contain the information, required by Schedule 3 to these Regulations, so far as applicable to such a company.

Requirements relating to financial years commencing prior to 23rd December 1989
    10.    —(1)  In this regulation:
"the unamended 1985 Act" means the provisions of the Companies Act 1985 prior to any repeal, re-enactment or amendment of those provisions by the 1989 Act; and
"relevant financial year" means a financial year of a company commencing prior to 23rd December 1989;

and other expressions shall, unless the contrary appears, bear the meaning they have in Part VII of the unamended 1985 Act.
    (2)  Regulations 4 to 9 above shall apply as if:
 (a) references to "full accounts and reports"were to a company's accounts for a financial year within the meaning of section 239 of the unamended 1985 Act, and "full" in relation to any balance sheet, profit and loss account, group accounts or directors' report meant any such document comprised in the company's accounts for a financial year;
 (b) references to:
 (i) Part VII of the 1985 Act were read as references to Part VII of the unamended 1985 Act;
 (ii) section 238(1) were read as references to section 240(1) of the unamended 1985 Act;
 (iii) section 239 were read as references to section 246 of the unamended 1985 Act;
 (iv) section 244 were read as references to section 242 of the unamended 1985 Act.

    (3)  The summary financial statement of a listed public company for a financial year commencing prior to 23rd December 1989 shall be in the form, and contain the information, required by Schedule 4 to these Regulations so far as applicable to such a company.

John Redwood

Parliamentary Under-Secretary of State for Corporate Affairs, Department of Trade and Industry

7th March 1990

[1] 1985 c. 6; section 251 is inserted into the Companies Act 1985 in place of the existing section of that number by sections 1 and 15 of the Companies Act 1989 (c. 40). back

[2] 1989 c. 40. back

[3] Section 238 is inserted into the 1985 Act in place of the existing section of that number by sections 1 and 10 of the 1989 Act. back

[4] S.I. 1990/355. back

[5] 1948 c. 38. The Table A regulations contained in the First Schedule to the Companies Act 1948 were replaced by the Table A regulations in the Schedule to the Companies (Tables A to F) Regulations 1985 (S.I. 1985/805), as amended by the Companies (Tables A to F) (Amendment) Regulations 1985 (S.I. 1985/1052). back

[6] 1976 c. 69. back

[7] Section 244 is inserted into the 1985 Act in place of the existing provision of that number by sections 1 and 11 of the 1989 Act. back

[8] Section 239 was inserted into the 1985 Act in place of the existing section of that number by sections 1 and 10 of the 1989 Act. back

Explanatory Note