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Part XI 

Financial Statement and Audit

 

Chapter l

Financial Statements

 

Accounting records

 

 

331.   (1)         Every company shall cause accounting records to be kept in accordance with this section.

 

  (2)          The accounting records shall be sufficient to show and explain the transactions of the company and shall be such as to

 

(a)             disclose with reasonable accuracy, at any time, the financial position of the company; and

 

(b)             enable the directors to ensure that any financial statements prepared under this Part comply with the requirements of this Act as to the form and content of the company's statements.

 

  (3)          The accounting records shall, in particular, contain-

 

(a)             entries from day to day of all sums of money received and expended by the company, and the matters in respect of which the receipt and expenditure took place; and

 

(b)             a record of the assets and liabilities of the company;

 

  (4)          If the business of the company involves dealing in goods, the accounting records shall contain

 

(a)             statements of stocks held by the company at the end of each year of the company;

 

(b)             all statements of stocktakings from which any such statement of stock as is mentioned in paragraph (a) of this subsection has been or is to be prepared; and

 

(c)             except in the case of goods sold by way of ordinary retail trade, statements of all goods sold and purchased, showing the goods and the buyers and sellers in sufficient detail to enable all these to be identified.

 

332.  (1)         The accounting records of a company shall be kept at its registered office or such other place in Nigeria as the directors think fit, and shall at all times be open to inspection by the officers of the company.

 

  (2)          Subject to any direction with respect to the disposal of records given under winding-up rules made under section 635 of this Act, accounting records which a company is required by section 331 of this Act to keep shall be preserved by it for a period of six years from the date on which they were made.

 

333.   (1)         If a company fails to comply with any provision of section 331 or 332(1) of this Act, every officer of the company who is in default shall be guilty of an offence unless he shows that he acted honestly and that in the circumstances in which the business of the company was carried on, the default was excusable.

 

  (2)          An officer of a company shall be guilty of an offence if he fails to take all reasonable steps, for securing compliance by the company with section 332 of this Act, or has intentionally caused any default by the company under it.

 

  (3)          A person guilty of an offence under this section, shall be liable to imprisonment for a term not exceeding six months or to a fine of N 500.

 

334.   (1)         In the case of every company, the directors shall in respect of each year of the company, prepare financial statements for the year.

 

  (2)          Subject to subsection (3) of this section, the financial statements required under subsection (1) of this section shall include -

 

(a)            statement of the accounting policies;

 

(b)            the balance sheet as at the last day of the year; 

 

(c)            a profit and loss account or, in the case of a company not trading for profit, an income and expenditure account for the year;

 

(d)            notes on the accounts;  

 

(e)            the auditors' reports;

 

(f)            the directors' report;

 

(g)          a statement of the source and application of fund;

 

(h)          a value added statement for the year;

 

(i)            a five-year financial summary; and

(j)            in the case of a holding company, the group financial statements.

 

  (3)          The financial statements of a private company need not include the matters stated in paragraphs (a), (g), (h) and (i) of subsection (2) of this section.

 

  (4)          The directors shall at their first meeting after the incorporation of the company, determine to what date in each year financial statements shall be made up, and they shall give notice of the date to the Commission within fourteen days of the determination.

 

  (5)          In the case of a holding company, the directors ensure that, except where in their opinion there are reasons against it, the year of each of its subsidiaries coincide with the year of the company.

 

 

Form and content of company individual and group financial statements

 

 

335.   (1)         The financial statements of a company prepared under section 334 of this Act, shall comply with the requirements of the Second Schedule to this Act (so far as applicable) with respect to their form and content, and with the accounting standards laid down in the Statements of Accounting Standards issued from time to time by the Nigerian Accounting Standards Board to be constituted by the Minister after due consultation with such accounting bodies as he may deem fit in circumstances for this purpose;

 

Provided that such accounting standards do not conflict with the provisions of this Act or the Second Schedule to this Act.

 

 

  (2)          The balance sheet shall give a true and fair view of the state of affairs of the company as at the end of the year; and the profit and loss account shall give a true and fair view of the profit or loss of the company for the year.

 

 

  (3)          The statement of the source and application of funds shall provide information on the generation and utilisation of funds by the company during the year.

 

  (4)          The value added statement shall report the wealth created by the company during the year and its distribution among various interest groups such as the employees, the government, creditors, proprietors and the company.

 

  (5)          The five-year financial summary shall provide a report for a comparison over a period of five years or more of vital financial information.

 

  (6)          Subsection (2) of this section shall override-

 

(a)             the requirements of the Second Schedule to this Act; and

 

(b)             all other requirements of this Act as to the matters to be included in the accounts of a company or in notes to those accounts;

 

and accordingly the provisions of subsections (7) and (8) of this section shall have effect.

 

  (7)          If the balance sheet or profit and loss account drawn up in accordance with those requirements would not provide sufficient information to comply with subsection (2) of this section, any necessary additional information shall be provided in that balance sheet or profit and loss account, or in a note to the accounts.

 

  (8)          If, owing to special circumstances in the case of any company compliance with any such requirement in relation to the balance sheet or profit and loss account would prevent compliance with subsection (2) of this section, (even if additional information were provided in accordance with subsection (4) of this section, the directors shall depart from that requirement in preparing the balance sheet or profit and loss account (so far as necessary) in order to comply with subsection (2) of this section.

 

  (9)          If the directors depart from any such requirements, particulars of the departure, the reasons for it and its effects shall be given in a note to the accounts.

 

 (10)         Subsections (1) to (9) of this section, shall not apply to group accounts prepared under section 336 of this Act and subsections (1) and (2) of this section shall not apply to a company's profit and loss account (or require the notes otherwise required in relation to that account) if

 

(a)             the company has subsidiaries; and

 

(b)             the profit and loss account is framed as a consolidated account dealing with all or any of the subsidiaries of the company as well as the company;

(i)             complies with the requirements of this Act relating to consolidated profit and loss account, and

 

(ii)             shows how much of the consolidated profit and loss for the year is dealt with in the individual financial statements of the company.

 

 (11)         If group financial statements are prepared and advantage is taken of subsection (7) of this section, that fact shall be disclosed in a note to the group financial statements.

 

336.  (1)         If, at the end of a year a company has subsidiaries, the directors shall, as well as preparing individual accounts for that year, also prepare group financial statements being accounts or statements which deal with the state of affairs and profit or loss of the company and the subsidiaries.

 

  (2)          The provisions of subsection (1) of this section shall not apply if the company is a wholly owned subsidiary of another body corporate incorporated in Nigeria.

 

  (3)          A group financial statement may not deal with a subsidiary, if the directors of the company are of the opinion that

 

(a)             it is impracticable, or would be of no real value to the members, in view of the insignificant amounts involved; or

 

(b)             it would involve expense or delay out of proportion to its value to members of the company; or

 

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

 

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

 

  (4)          The group financial statements of a company shall consist of a consolidated-

 

(a)              balance sheet dealing with the state of affairs of the company and all the subsidiaries of the company; and

 

(b)             profit and loss account of the company and its subsidiaries.

 

  (5)          If the directors are of the opinion that it is better for the purpose of presenting the same or equivalent information about the state of affairs and profit or loss of the company and its subsidiaries, and that to so present it may be readily appreciated by the members of the company, the group financial statements may be prepared in a form not consistent with subsection (1) of this section and in particular the group financial statement may consist of

 

(a)              more than one set of consolidated financial statements dealing respectively with the company and one group of subsidiaries and with other groups of subsidiaries; or

 

(b)             separate financial statements dealing with each of the subsidiaries; or

 

(c)             statements expanding the information about the subsidiaries in individual financial statements of the company, or in any other form.

 

  (6)          The group financial statements may be wholly or partly incorporated in the individual balance sheet and profit and loss account of the holding company.

 

337.  (1)         The group financial statements of a holding company shall comply with the requirements of the Second Schedule to this Act, so far as applicable to group financial statements in the form in which those accounts are prepared with respect to the form and content of those statements and any additional information to be provided by way of notes to those accounts.

 

  (2)          Group financial statements together with any notes thereon shall give a true and fair view of the state of affairs and profit or loss of the company and the subsidiaries dealt with by those statements as a whole.

 

  (3)          Subsection (2) of this section shall override

 

(a)             the requirements of the Second Schedule to this Act; and

 

(b)             all other requirements of this Act as to the matters to be included in group financial statements or in notes to those statements, and accordingly subsections (4) and (5) of this section shall have effect.

 

  (4)          If group financial statements are not in accordance with the requirements of this Act by not providing sufficient information in compliance with subsection (2) of this section, any necessary additional information shall be provided in, or in a note to, the group financial statements.

 

  (5)          If; owing to special circumstances in the case of any company, compliance with any requirements of the Second Schedule to this Act in relation to its group financial statements would prevent the statements from complying with subsection (2) of this section, (even if additional information were provided in accordance with subsection (4) of this section) the directors may depart from that requirement in preparing the group financial statements.

 

338.     (1)         Subject to subsection (4) of this section, a company shall for the purposes of this Act be deemed to be a subsidiary of another company if -

 

(a)             the company -

 

(i)             is a member of it and controls the composition of  its board of directors, or

 

(ii)             holds more than half in nominal value of its equity share capital; or

 

(b)             the first-mentioned company is a subsidiary of any company which is that other's subsidiary.

 

(d)             any shares held or power exercisable by, or by a nominee for, the other or its subsidiary (not being held or exercisable as mentioned in paragraph (c) of this subsection shall be treated as not held or exercisable by the other, if the ordinary business of the other or its subsidiary (as the case may be) includes the lending of money and the shares are held or the power is exercisable as above mentioned by way of security only for the purposes of a transaction entered into in the ordinary course of that business.

 

  (5)          For the purposes of this Act

 

(a)             a company shall be deemed to be the holding company of another, if the other is its subsidiary; and

 

(b)             a body corporate shall be deemed to be the wholly-owned subsidiary of another, if it has no member except that other and that other's wholly owned subsidiaries are its or their nominees.

 

  (6)          In this section, "company" includes any body corporate.

 

339.   (1)         The additional matters contained in Schedule 3 to this Decree shall be disclosed in the company's financial statements for the year; and in that Schedule, where a thing is required to be stated or shown or information is required to be given, it shall be construed to mean that the thing shall be stated or shown, or the information is to be given in note or those statements.

 

  (2)          In schedule 3 to this Decree -

 

(a)          Parts 1 and 11 deal respectively with the disclosure of particulars of the subsidiaries of the company and its shareholders;

 

(b)             Part III deals with the disclosure of financial information relating to subsidiaries;

 

(c)             Part IV requires a subsidiary company to disclosure its ultimate holding company;

 

(d)             Part V deals with the emoluments of directors, including emoluments waived, pensions of directors and compensation for loss of office to directors and past directors; and

 

(e)             Part VI deals with disclosure of the number of the employees of the company who are remunerated at higher rates.

 

  (3)          Whenever it is stated in Schedule 3 to this Decree that this subsection shall apply to certain particulars or information, that particulars or information shall be annexed to the annual return first made by the company after copies of its financial statements have been laid before its share holders in a general meeting and if a company fails to satisfy an obligation thus imposed, the company and every officer of it who is in default shall be guilty of an offence and liable to a fine of 50 and for continued contravention, to a daily default fine of 10.

 

  (4)          It shall be the duty of any director of a company to give notice to the company of such matters relating to himself as may be necessary for the purposes of Part V of Schedule 3 to this Decree and this applies to persons who are or have at any time in the preceding 3 years been officers as it applies to directors.

 

  (5)          A person who makes default in complying with the provisions of subsection (4) of this section shall be guilty of an offence and liable to a fine of 10 for every day during which the default continues.

 

340.   (1)         The group financial statements of a holding company for a year shall comply with Part 1 of Schedule 4 to this Decree (so far as applicable) as regards the disclosure of transactions, arrangements and agreements mentioned therein, including loans, quasi loans and other dealings in favour of directors.

 

  (2)          In the case of a company other than a holding company, its individual accounts shall comply with Part 1 of Schedule 4 to this Decree (so far as applicable) as regards disclosure matters contained therein.

 

  (3)          Particulars which are required to be contained in Part 1 of Schedule 4 to this Decree in any financial statements shall be required in respect of shadow directors as well as a director given by way of notes.

 

  (4)          Where by virtue of subsection (2) or (3) of section 336 of this Decree, a company does not prepare group financial statements for a year, it shall disclose such matters in its individual statements as would have been disclosed in group financial statements.

 

  (5)          The requirements of this section shall apply with such modifications as are necessary to bring them in line with Part 1 of Schedule 4 to this Decree (including with particulars of exceptions in respect of recognised banks) it shall disclose.

 

341.   (1)         The group financial statements of a holding company for a year shall comply with Part II of Schedule 4 to this Decree (so far as applicable as regards transactions, arrangements and agreements made by the company or a subsidiary of it for persons who at any time during that year were officers of the company but not directors.

 

  (2)          In the case of a company other than a holding company, its individual accounts shall comply with Part II of Schedule 4 to this Decree (so far as applicable) as regards matters contained therein.

 

  (3)          Subsections (1) and (2) of this section shall not apply in relation to any transaction or agreement made by a recognised bank for any of its officers or for any of the officers of its holding company.

 

  (4)          Particulars required by Part II of Schedule 4 to this Decree to be in any accounts shall be given by way of notes to the accounts.

 

  (5)          Where by virtue of subsection (2) or (3) of section 336 of this Decree, a company does not prepare group financial statements for year, it shall disclose this fact in its individual financial statements as required by subsection (1) of this section.

 

 

Directors' Reports

 

 

342.   (1)         In the case of every company, there shall be prepared in respect, of each year a report by the directors -

 

(a)             containing a fair view of the development of the business of the company and its subsidiaries during the year and of their position at the end of it; and

 

(b)             stating the amount (if any) which they recommend should be paid as dividend and the amount (if any) which they propose to carry to reserves.

 

 (2)          The directors' report shall state the names of the persons who, at any time during the year, were directors of the company, and the financial activities of the company and its subsidiaries in the course of the year and any significant change in those activities in the year.

 

  (3)          The report shall also state the matters, and give the particulars, required by Part 1 of Schedule 5 to this Decree.

 

  (4)          Part II of Schedule 5 to this Decree shall apply as regards the matters to be stated in the report of the directors in the circumstances specified therein.

 

  (5)          Part III of Schedule 5 to this Decree shall apply as regards the matters to be stated in the directors' report relative to the employment, training and advancement of disabled persons, the health, safety and welfare at work of the employees of the company and the involvement of employees in the affairs, policy and performance of the company.

 

  (6)          In respect of any failure to comply with the requirements of this Decree as to the matters to be stated, and the particulars to be given, in the directors' report, every person who was a director of the company immediately before the end of the period prescribed for laying and delivering financial statements shall be guilty of an offence and liable on conviction to a term of imprisonment for not more than 6 months or to a fine of 500.

 

  (7)          In proceedings for an offence under subsection (6) of this section, it shall be a defence for the person to prove that he took all reasonable steps for securing compliance with the requirements in question.

 

 

Procedure on completion of financial statements

 

 

343.   (1)         A company's balance sheet and every copy of it which is laid before the company in general meeting or delivered to the Commission shall be signed on behalf of the board by two of the directors of the company

 

  (2)          If a copy of the balance sheet -

 

(a)             is laid before the company or delivered to the Commission without being signed as required by this section; or

 

(b)             not being a copy so laid or delivered, is issued, circulated or published in a case where the balance sheet has not been signed as so required or where (the balance sheet having been so signed) the copy does not include a copy of the signature as the case may be,

 

the company and every officer of it who is in default shall be guilty of an offence and liable on conviction to a fine of 300.

 

  (3)          A company's profit and loss account and so far as not incorporated in its individual balance sheet or profit and loss account, any group accounts of a holding company shall be annexed to the balance sheet, and the auditors' report and the directors' report shall also be attached to the balance sheet.

 

   (4)          The balance sheet and the profit and loss account annexed to it shall be approved by the board of directors and signed on their behalf by two directors authorised to do so.

 

344.    (1)         In the case of every company, a copy of the company's financial statements for the year shall, not less than 21 days before the date of the meeting at which they are to be laid in accordance with section 345 of this Decree be sent to each of the following persons -

 

(a)             every member of the company (whether or not entitled to receive notice of general meetings);

 

(b)             every holder of the company's debentures, (whether or not so entitled); and

 

(c)             all persons other than members and debenture holders, being persons so entitled.

 

  (2)          In the case of a company not having a share capital, subsection (1) of this section shall not require a copy of the financial statements to be sent to a member of the company who is not entitled to receive notices of general meetings of the company, or to a holder of the company's debenture who is not so entitled.

 

  (3)          Subsection (1) of this section shall not require copies of the financial statements to be sent to -

 

(a)             a member of the company or a debenture holder, being in either case a person who is not entitled to receive notices of general meetings, and of whose address the company is unaware; or

 

(b)             more than one of the joint holders of any shares or debentures none of whom are entitled to receive such notices; or

 

(c)             those who are not so entitled in the case of joint holders of shares or debentures some of whom are not entitled to receive such notices.

 

  (4)          If copies of the financial statements are sent less than 21 days before the date of the meeting, it shall, notwithstanding that fact, be deemed to have been duly sent if it is so agreed by all the members entitled to attend and vote at the meeting.

 

  (5)          If default is made in complying with subsection (1) of this section, the company and every officer of it who is in default shall be guilty of an offence and is liable to a fine of N250.

 

345.    (1)         In respect of each year, the directors shall at a date not later than 18 months after incorporation of the company and subsequently once at least in every year, lay before the company in general meeting copies of the financial statements of the company made up to a date not exceeding nine months previous to the date of the meeting.

 

  (2)          The auditors' report shall be read before the company in general meeting, and be open to the inspection of any member of the company.

 

  (3)          In respect of each year, the directors shall deliver with the annual return to the Commission a copy of the balance sheet, the profit and loss account and the notes on the statements which were laid before the general meeting as required by this section.

 

  (4)          In the case of an unlimited company, the directors shall not be required by subsection (3) of this section to deliver a copy of the accounts if -

 

(a)             at no time during the accounting reference period has the company been, to its knowledge, the subsidiary of a company that was then limited and at no such time, to its knowledge have there been held or been exercisable, by or on behalf of two or more companies that were then limited, shares or powers which, if they had been held or been exercisable by one of them, would have made the company its subsidiary; and

 

(b)             at no such time has the company been the holding company of a company which was then limited.

 

  (5)          References in this section to a company that was limited at a particular time are to a body corporate (under whatever law incorporated) the liability of whose members was at that time limited.

 

346.    (1)         If in a year any of the requirements of section 345 (1) or (3) of this Decree is not complied with by any company every person who immediately before the end of that period was a director of the company shall in respect of each of those subsections which is not so complied with, be guilty of an offence and liable to a daily default more fine of 50 in the case of a small company, a company limited by guarantee or an unlimited company, and 500 in the case of any other company.

 

  (2)          If a person is charged with an offence in respect of any of the requirements of subsection (1) or (3) of section 345 of this Decree, it shall be a defence for him to prove that he took all reasonable steps for securing that those requirements be complied with before the end of the period allowed for laying and delivering accounts.

 

  (3)          In proceedings under this section with respect to a requirement to lay a copy of a document before a company in general meeting, or to deliver a copy of a document to the Commission, it shall not be a defence to prove that the document in question was not in fact prepared as required by this Part of this Decree.

 

347.  (1)         If -

 

(a)             in respect of a year, any of the requirements of subsections (1) and (3) of section 345 of 345 Decree has not been complied with by a company before the end of the period allowed for laying and delivering financial statements; and

 

(b)             the directors of the company fail to make good the default within 14 days after the service of a notice on them requiring compliance, the court may on application by any member or creditor of the company or by the Commission make an order directing the directors (or any of them) to make good the default within such time as may be specified in the order.

 

  (2)          The court's order may provide that all costs of and incidental to the application shall be borne by the directors.

 

  (3)          Nothing in this section shall affect the provisions of section 346 of this Decree.

 

348.   (1)         If any financial statements of a company (other than its group financial statement) of which a copy is laid before the shareholders in general meeting or delivered to the Commission do not comply with the requirement of this Decree as to the matters to be included in, or in a note to, those financial statements, every person who at the time when the copy is laid or delivered is a director of the company shall be guilty of an offence and in respect of each offence, liable to a fine of 100.

 

  (2)          If any group financial statements of which a copy is laid before a company in a general meeting or delivered to the Commission do not comply with section 345(4) to (7) or section 346 of this Decree and with the other requirements of this Decree as to the matters to be included in or in a note to those financial statements, every person who at the time when the copy was so laid or delivered was a director of the company shall be guilty of an offence and liable to a fine of 250.

 

  (3)          In proceedings against a person for an offence under this section, it shall be a defence for him to prove that he took all reasonable steps for securing compliance with the requirements in question.

 

349.   (1)         Any member of a company, whether or not he is entitled to have sent to him copies of the company's financial statements, and any holder of the company's debentures (whether or not so entitled) shall be entitled to be furnished (on demand and without charge) with a copy of the company's last financial statements.

 

  (2)          If, when a person makes a demand for a document with which he is entitled by this section to be furnished, default is made in complying with the demand within 7 days after its making, the company and every officer of it who is in default shall be guilty of an offence and liable to a daily default fine of 100, unless it is proved that the person has already made a demand for, and been furnished with, a copy of the documents.

 

 

Modified financial statements

 

 

350.   (1)         In certain cases a company's directors may, in accordance with Part 1 of Schedule 6 to this Decree, deliver modified financial statements in respect of a year as a small company.

 

  (2)          For the purposes of sections 351 to 353 and Schedule 6 to this Decree, "deliver' means deliver to the Commission.

 

351.    (1)         A company qualifies as a small company in a year if for that year the following conditions are satisfied -

 

(a)             it is a private company having a share capital;

 

(b)             the amount of its turnover for that year is not more than 2 million or such amount as may be fixed by the Commission;

 

(c)             its net assets value is not more than 1 million or such amount as may be fixed by the Commission;

 

(d)             none of its members is an alien;

 

(e)             none of its members is a Government or a Government corporation or agency or its nominee, and

 

(f)             the directors between them hold not less than 51 per cent of its equity share capital.

 

  (2)          In applying subsection (1) of this section, to a period which is a company's year but not in fact a year, the maximum figures for turnover in paragraph (b) of that subsection shall be proportionately adjusted.

 

352.   (1)         The directors of a company may (subject to section 353 of this Decree where the company has subsidiaries) deliver individual financial statements modified as for a small company in the cases specified in subsection (2); and (3) of this section; and Part 1 of Schedule 6 shall apply with respect to the delivery of financial statements so modified.

 

  (2)          In respect of the company's first year the directors may deliver financial statements modified as for a small company, if in that year it qualifies as small.

 

  (3)          The directors may in respect of a company's year subsequent to the first -

 

(a)             deliver financial statements modified as for a small company if the company qualifies as small and it also so qualified in the preceding year;

 

(b)             deliver financial statements modified as for a small company (although not qualifying in that year as small), if in the preceding year it so qualified and the directors were entitled to deliver financial statements so modified in respect of that year;

 

(c)             deliver financial statements modified as for small company if, in that year the company qualifies as small and the directors were entitled under paragraph (b) of this subsection to deliver financial statements so modified for the preceding year (although the company did not in that year qualify as small).

 

353.    (1)         This section shall apply to a holding company where in respect of a year section 336 of this Decree requires the preparation of group financial statements for the company and its subsidiaries.

 

  (2)          The directors of the holding company may not under section 352 of this Decree deliver financial statements modified as for a small company, unless the group (that is to say, the holding company and its subsidiaries together) is in that year a small group and the group is small if it would so qualify under section 351 of this Decree (applying that section as directed by subsection (3) and (4) of this section, if it were all one company.

 

  (3)          The figures to be taken into account in determining whether the group is small shall be the group account figures, that is -

 

(a)             where the group financial statements are prepared as consolidated financial statements the figures for turnover and balance sheet total; and

 

(b)             where the group financial statements are not prepared as consolidated financial statements, the corresponding figures given in the group financial statements, with such adjustment as would have been made if the statements had been prepared in consolidated form;

 

aggregated in either case with the relevant figures for the subsidiaries (if any) omitted from the group accounts (excepting those for any subsidiary omitted under section 336 (3)(a) of this Decree on the ground of impracticability).

 

  (4)          In the case of each subsidiary omitted from the group financial statements, the figures relevant as regards turnover, and balance sheet total shall be those which are included in the financial statements of that subsidiary prepared in respect of its relevant year (with such adjustment as would have been made if those figures had been included in group financial statements prepared in consolidated form).

 

  (5)          For the purposes of subsection (4) of this section, the relevant year of the subsidiary shall be-

 

(a)             if its year ends with that of the holding company to which the group financial statements relate, that year; and

 

(b)             if not, the subsidiary's year ending last before the end of the year of the holding company.

 

  (6)          If the directors are entitled to deliver modified financial statements, they may also deliver modified group financial statements, and such group financial statements -

 

(a)             if consolidated, may be in "accordance with Part II of Schedule 7 (while otherwise comprising or corresponding with group financial statements prepared under section 336 of this Decree); and

 

(b)             if not consolidated, may be such as (together with any notes) give the same or equivalent information as required by paragraph (a) of this subsection;

 

and Part III to the Schedule to this Decree shall apply to modified group financial statements whether consolidated or not.

 

 

Publication of Financial Statements

 

 

354.    (1)         This section shall apply to the publication by a company of full individual of group financial statements, that is to say, the statements required by section 345 of this Decree to be laid before the company in general and delivered to the Commission including the directors' report, unless dispensed with under paragraph 3 of Schedule 6 to this Decree, but does not apply to interim financial statements.

 

  (2)          If a company publishes individual financial statements (modified or other) for a year, it shall publish with them the relevant auditors' report.

 

  (3)          If a company required by section 336 of this Decree to prepare group financial statements for a year, publishes individual financial statements for that year, it shall also publish with them its group financial statements (which may be modified financial statements but only if the individual financial statements are modified).

 

  (4)          If a company publishes group financial statements (modified or not) otherwise than together with its individual financial statements, it shall publish with them the relevant auditors' report.

 

  (5)          References in this section to the relevant auditor's report are to the auditors' report under section 359 of this Decree or, in the case of modified financial statements (individual or group), the auditors' special report under paragraph 10 of Schedule 6 to this Decree.

 

  (6)          A company which contravenes any provision of this section and any officer of it who is in default, shall be guilty of an offence and liable to a daily default fine of 100.

 

355.  (1)          This section shall apply to the publication by a company of abridged financial statements, that is to say, any balance sheet or profit and loss account relating to a year of the company or purporting to deal with any such year, otherwise than as part of full financial statements (individual or group ) to which section 354 of this Decree applies.

 

  (2)          The reference in subsection (1) of this section to a balance sheet or profit and loss account, in relation to financial statements published by a holding company, includes an account in any form purporting to be a balance sheet of profit and loss account for the group consisting of the holding company and its subsidiaries.

 

  (3)          If the company publishes abridged financial statements, it shall publish with those statements, a statement indicating -

 

(a)             that the statements are not full financial statements;

 

(b)             whether full individual or full group financial statements according as the abridged statements deal solely with the company's own affairs or with the affairs of the company and any subsidiaries have been delivered to the Commission or, in the case of an unlimited company exempted under section 345(4) of this Decree from the requirement to deliver financial statements, that the company is so exempted;

 

(c)             whether the company's auditors have made a report under section 359 of this Decree on the company's financial statements for any year with which the abridged financial statements purport to deal; and

 

(d)             whether any report so made was unqualified (meaning that it was a report, without qualification, to the effect that in the opinion of the person making it, the company's financial statements had been properly prepared).

 

  (4)          Where a company publishes abridged financial statements, it shall not publish with those statements any such report of the auditors as is mentioned in subsection (3) (c) of this section.

 

  (5)          A company which contravenes any provision of this section, and any officer of it who is in default, shall be guilty of an offence and liable to a daily default fine of 100.

 

 

Supplementary

 

 

356.          The Minister may after consultation with the Nigerian Accounting Standards Board by regulations in a statutory instrument -

 

(a)             add to the classes of documents -

 

(i)             to be comprised in a company's financial statements for a year to be laid before the company in general meeting as required by section 345, of this Decree; or

 

(ii)             to be delivered to the Commission under that section, and make provision as to the matters to be included in any document to be added to either class;

 

(b)             modify the requirements of this Decree as to the matters to be stated in a document of any such class; or

 

 

(c)             reduce the classes of documents to be delivered to the Commission under section 343 of this Decree.

 

 

 

Chapter 2 

Audit

 

 

357.    (1)         Every company shall at each annual general meeting appoint an auditor or auditors to audit the financial statements of the company, and to hold office from the conclusion of that, until the conclusion of the next, annual general meeting.

 

  (2)          At any annual general meeting a retiring auditor, however appointed, shall be re-appointed without any resolution being passed unless -

 

(a)             he is not qualified for re-appointment; or

 

(b)             a resolution has been passed at that meeting appointing some other person instead of him on or providing expressly that he shall not be re-appointed; or

 

(c)             he has given the company notice in writing of his unwillingness to be re-appointed:

 

Provided that where notice is given of an intended resolution to appoint some person or persons in place of a retiring auditor, and by reason of the death, incapacity or disqualification of that person or of all those persons, as the case may be, the resolution cannot be proceeded with, the retiring auditor shall not be automatically re-appointed by virtue of this subsection.

 

  (3)          Where at an annual general meeting, no auditors are appointed or re-appointed, the directors may appoint a person to fill the vacancy.

 

  (4)          The company shall, within one week of the power of the directors under subsection (3) of this section becoming exercisable, give notice of that fact to the Commission; and if a company fails to give notice as required by this subsection, the company and every officer of the company who is in default shall be guilty of an offence and liable to a fine of 100 for every day during which the default continues.

 

  (5)          Subject as hereinafter provided, the first auditors of a company may be appointed by the directors at any time before the company is entitled to commence business and auditors so appointed shall hold office until the conclusion of the next annual general meeting:

 

Provided that -

 

(a)             the company may at a general meeting remove any such auditors and appoint in their place any other person who have been nominated for appointment by any member of the company and of whose nomination notice has been given to the members of the company not less than 14 days before the date of the meeting; and

 

(b)             if the directors fail to exercise their powers under this subsection; the company may, in a general meeting convened for that purpose appoint the first auditors and thereupon the said powers of the directors shall cease.

 

  (6)         The directors may fill any casual vacancy in the office of auditor but while any such vacancy continues, the surviving or continuing auditor or auditors, if any, may act.

 

358.    (1)         The provisions of the Institute of Chartered Accountants Act 1965 shall have effect in relation to any investigation or audit for the purposes of this Decree so however that none of the following persons shall be qualified for appointment as auditor of a company, that is-

 

(a)             an officer or servant of the company;

(b)             a person who is a partner of or in the employment of an officer or servant of the company;

(c)             a body corporate,

 

(d)             in the decree wherever the word "accountant" appears there shall be substituted the words "chartered accountant"

 

and inferences in this subsection to an officer or servant shall be construed as not including inferences to

 

Part XII

Annual Returns

 

 

370.        Every company shall, once at least in every year, make and deliver to the Commission an annual return in the form, and containing the matters specified in sections 371, 372 or 373 of this Decree as may be applicable:

 

Provided that a company need not make a return under this section either in the year of its incorporation or, if it is not required by section 213 of this Decree to hold an annual general meeting during the following year, in that year.

 

371.    (1)         The annual return by a company having shares other than a small company shall contain with respect to the registered office of the company, registers of members and debenture holders, shares and debentures, indebtedness, past and present members and directors and secretary, the matters specified in Part 1 of Schedule 8 to this Decree, and the said return shall be in the form set out in Part II of that Schedule or as near to it as circumstances admit.

 

  (2)          Where the company has converted any of its shares into stock and given notice of the conversion to the Commission, the list referred to in paragraph 5 of Part 1 of Schedule 8 to this Decree shall state the amount of stock held by each of the existing members instead of the amount of shares and the particulars relating to shares required by that paragraph.

 

  (3)          The return may, in any year, if the return for either of the two immediately preceding years has given as at the date of that return the full particulars required by the said paragraph 5 of Schedule 8 to this Decree, gives only such particulars required by that paragraph as relate to persons ceasing to be or becoming members since the date of the last return and to shares transferred since that date in the amount of stock held by a member.

 

372.         The annual return by a small company shall contain the matters specified in Part 1 of Schedule 9 to this Decree and the return shall be in the form set out in Part II of that Schedule or as near to it as circumstances admit.

 

373.    (1)         The annual return by a company limited by guarantee shall be in the form prescribed in Schedule 10 to this Decree or as near to it as circumstances admit.

 

  (2)          There shall be annexed to the return a statement containing particulars of the total amount of the indebtedness of the company in respect of all mortgages and charges which are required to be registered with the Commission under this Decree.

 

374.         The annual return shall be completed within 42 days after the annual general meeting for the year, whether or not that meeting is the first or only ordinary general meeting, of the company in that year, and the company shall forthwith forward to the Commission a copy signed both by a director and by the secretary of the company.

 

375.    (1)         Subject to the provisions of section 377 of this Decree, there shall be annexed to the annual return -

 

(a)             a written copy, certified both by a director and by the secretary of the company to be a true copy, of every balance sheet and profit and loss account laid before the company in general meeting held in the year to which the return relates (including every document required by law to be annexed to the balance sheet); and

 

(b)             a copy certified as aforesaid, of the report of the auditors on, and of the report of the directors accompanying, each such balance sheets.

 

  (2)          If any such balance sheet as is mentioned in subsection (1) of the section or document required by law to be annexed does not comply with the requirement of the law as in force at the date of the audit with respect to the form of balance sheets or documents aforesaid, as the case may be, there shall be made such additions to and corrections in the copy as would have been required to be made in the balance sheet or document in order to comply with the requirements, and the fact that the copy has been so amended shall be stated on it.

 

376.    (1)         A private company shall send with the annual return required by section 371, 372 or 373 of this Decree a certificate signed both by a director and by the secretary of the company that the company has not, since the date of the last return, or, in the case of a first return, since the date of the incorporation of the company, issued any invitation to the public to subscribe for any shares or debentures of the company, and, where the annual return discloses the fact that the number of members of the company exceeds 50, also a certificate so signed that the excess consists wholly of persons who under subsection (3) of section 22 of this Decree are not included in reckoning the number of 50.

 

  (2)          A small company shall in addition to the certificate required under subsection (1) of this section, send with the annual return a certificate signed by a director and the secretary that -

 

(a)             it is a private company limited by shares;

 

(b)             the amount of its turn-over for that year is not more than 2 million or such amount as may be fixed by the Commission;

 

(c)             its net assets value is not more than 1 million or such amount as may be fixed by the Commission;

 

(d)             none of its members is an alien;

 

(e)             none of its members is Government, a Government agent or nominee; and

 

(f)             the directors among them hold not less than 51 per cent of the equity share capital of the company.

 

377.    (1)         An unlimited company shall be exempted from the requirements imposed by section of this Decree 375 as to documents to be annexed of this Decree to the annual return if, but only if-

 

(a)             at no time during the period to which the return relates has it been to its knowledge, the subsidiary of a company that was then limited and at no such time to its knowledge, have there been held or exercisable by or on behalf of two or more companies that were limited, shares or powers which had they been held or exercisable by one of them, would have made the company its subsidiary;

 

(b)             at no such time has it been the holding company of a company that was then limited.

 

  (2)          A small company shall also be exempted from the requirements imposed by section 375 of this Decree provided that it complies with the provision of section 351 of this Decree.

 

378.    (1)         If a company required to comply with any of the provisions of sections 370 to 376 of this Decree fails to do so, the company and every director or officer of the company who is in default shall be guilty of an offence and liable to a fine of 1,000 in the case of a public company and 100 in the case of a private company.

 

  (2)          For the purposes of subsection (1) of this section, "officer" includes any person in accordance with those directions or instructions the directors of the company are accustomed to act.

 

 

 

 

 

 

Part XIII 

Dividends and Profits

 

 

379.    (1)         A company may, in general meeting, declare dividends in respect of any year or other period only on the recommendation of the directors.

 

  (2)          The company may from time to time pay to the members such interim dividends as appear to the directors to be justified by the profits of the company.

 

  (3)          The general meeting shall have power to decrease the amount of dividend recommended by the directors, but shall have no power to increase the recommended amount.

 

  (4)          Where the recommendation of the directors of a company with respect to the declaration of a dividend is varied in accordance with subsection (3) of this section by the company in general meeting, a statement to that effect shall be included in the relevant annual return.

 

  (5)          Subject to the provisions of this Decree, dividends shall be payable to the shareholders only out of the distributable profits of the company.

 

380.         Subject to the company being able to pay its debts as they fall due, the company may pay dividends out of the following profits -

 

(a)             profits arising from the use of the company's property although it is a wasting assets;

 

(b)             revenue reserves;

 

(c)             realised profit on a fixed asset sold, but where more than one asset is sold, the net realised profit on the assets sold.

 

381.         A company shall not declare or pay dividend if there are reasonable grounds for believing that the company is or would be, after the payment unable to pay its liabilities as they become due.

 

382.    (1)         Where dividends are returned to the company unclaimed, the company shall send a list of the names of the persons entitled with the notice of the next annual general meeting to the members.

 

 (2)          After the expiration of 3 months of the notice mentioned in subsection (1) of this section, the company may invest the unclaimed of this section dividend for its own benefit in an investment outside the company and no interest shall accrue on the dividends against the company.

 

  (3)          Where dividends have been sent to members and there is an omission to send to some members due to the fault of the company, the dividends shall earn interest at the current bank rate from three months after the date on which they ought to have been posted.

 

  (4)          For the purpose of liability, the date of posting the dividend warrant shall be deemed to be the date of payment and proof of whether it has been sent is a question of fact.

 

383.      The directors may, before recommending any dividend, set aside out of the profits of the company such sums as they think proper as a reserve or reserves which shall, at the discretion of the directors, be applicable for any purpose to which the profits of the company may be properly applied, and pending such application may, at the like discretion, either be employed in the business of the company or be invested in such investments (other than shares of the company) as the directors may from time to time think fit; and the directors may also without placing the same to reserve, carry forward any profits which they may think prudent not to distribute.

 

  (2)          The company in general meeting may upon the recommendation of the directors resolve that it is desirable to capitalise any part of the amount for the time being standing to the credit of any of the company's reserve accounts or to the credit of the profit and loss account or otherwise available for distribution.

 

  (3)          Such sum may be set free for distribution among the members who would have been entitled to dividends in the same proportions on condition that the same be not paid in cash but be applied either on or towards paying up any amounts for the time being unpaid on any shares held by such members respectively or paying up on full unissued shares or debentures of the company to be allotted and distributed to creditors as fully paid up.

 

  (4)          The company may decide by a resolution what part is to be distributed in cash or ion shares and the directors shall give effect to such resolution.

 

  (5)          Share premium account and a capital redemption reserve fund may, for the purposes of this subsection, only be applied in the paying up of unissued shares to be issued to members of the company as fully paid bonus shares.

 

  (6)          Where a resolution is under subsections (2) to (5) of this section passed, the directors shall make all appropriations and applications of the undivided profits resolved to be capitalised thereby, and all allotments and issues of fully-paid shares or debentures, if any, and generally do all acts and things required to give effect to it.

 

  (7)          The directors shall have power to make such provision by the issue of fractional certificates or by payment in cash or otherwise as they think fit in the case of shares or debentures becoming distributable in fractions.

 

  (8)          Any person may be authorised by the directors to enter on behalf of all the members entitled under this section into an agreement with the company to provide for the allotment to them respectively, credited as fully paid up, of any further shares or debentures to which they may be entitled upon such capitalization, or (as may required for the payment up by the company on their behalf of the case amounts or any part of the amounts remaining unpaid on their existing shares, and any agreement made under such authority shall be effective and binding on all such members.

 

384.         If under his contract of service, an employee is entitled to share in the profits of the company as an incentive, he shall be entitled to share in the profits of the company, whether or not dividends have been declared.

 

385.         Dividends shall be special debts due to, and recoverable by, shareholders within 12 years, and actionable only when declared.

 

386.    (1)         All directors who knowingly pay, or are party to the payment of dividend out of capital or otherwise in contravention of this Part of this Decree shall be personally liable jointly and severally to refund to the company any amount so paid.

 

  (2)          Such directors shall have the right to recover the dividend from shareholders who receive it with knowledge that the company had no power to pay it.

 

 

 

Part XIV 

Receivers and Managers

 

Appointment of Receivers and Managers

 

 

387.  (1)         The following persons shall not be appointed or act as receivers or managers of any property or undertaking of any company -

 

(a)             an infant,

 

(b)             any person found by a competent court to be of unsound mind;

 

(c)             a body corporate;

 

(d)             an undischarged bankrupt, unless he shall have been given leave to act as a receiver or manager of the property or undertaking of the company by the court by which he was adjudged bankrupt;

 

(e)             a director or auditor of the company;

 

(f)             any person convicted of any offence involving fraud, dishonesty, official corruption or moral turpitude and who is disqualified under section 254 of this Decree.

 

  (2)          Any appointment made in contravention of the provisions of subsection (1) of this section shall be void and if any of the persons named in paragraphs (c), (d), (e) and (f) of that subsection shall act s a receiver or manager, he shall be guilty of an offence and liable to a fine not exceeding 2,000 in the case of a body corporate or, in the case of an individual to imprisonment for a term not exceeding 6 months or to a fine not exceeding 500.

 

  (3)          Where any of the persons mentioned in subsection (1) of this section is at the commencement of this Decree acting as a receiver or manager, he may be removed by the Court on an application by a person interested.

 

388.         Where an application is made to the court to appoint a receiver on behalf of the debenture holder or other creditors of a company which is being wound up by the court, an official receiver may be appointed.

 

389.   (1)         Notwithstanding the provisions of paragraph (d) of subsection (1) of section 209 of this Decree, the court may, on the application of a person interested, appoint a receiver or a receiver and manager of the property or undertaking of a company if -

 

(a)             the principal money borrowed by the company or the interest is in arrear; or

 

(b)             the security or property of the company is in jeopardy.

 

  (2)          A receiver or manager of any property or undertaking of a company appointed by the court shall be deemed to be an officer of the court and not of the company and shall act in accordance with the directions and instructions of the court.

 

390.   (1)         A receiver or manager of any property or undertaking of a company appointed out of court under a power contained in any instrument shall, subject to section 393 of this Decree, be deemed to be an agent of the person or persons on whose behalf he is appointed and, if appointed manager of the whole or any part of the undertaking of a company he shall be deemed to stand in a fiduciary relationship to the company and observe the utmost good faith towards it in any transaction with it or on its behalf.

 

  (2)          Such a manager shall-

 

(a)             act at all times in what he believes to be the best interests of the company as a whole so as to preserve its assets, further its business, and promote the purposes for which it was formed, and in such manner as a faithful, diligent, careful and ordinarily skilful manager would act in the circumstances;

 

(b)             in considering whether a particular transaction or course of action is in the best interest of the company as a whole may have regard to the interests of the employees, as well as the members of the company, and, when appointed by, or as a representative of, a special class of members or creditors may give special, but not exclusive, consideration to the interests of that class.

 

  (3)          Nothing contained in the articles of a company, or in any contract, or in any resolution of a company shall relieve any manager from the duty to act in accordance with subsection (2) of this section or relieve him from any liability incurred as a result of any breach of such duty.

 

391.         A receiver or manager of the property of a company appointed in accordance with the provisions of subsection (1) of section 390 of this Decree may apply to the court for direction in relation to any particular matter arising in connection with the performance of his functions, and on any such application, the court may give such directions or make such order declaring the rights of persons before the court or otherwise, as it thinks just.

 

392.    (1)         Where a receiver or manager of the property of a company has been appointed, notice shall be given to the Commission within 14 days, indicating the terms of and remuneration for the appointment, and every invoice, order for goods or business letter issued by or on behalf of the company, or the receiver or manager or the liquidator of the company being a document on or in which the company's name appears, shall contain a statement that a receiver or manager has been appointed.

 

  (2)         If default is made in complying with this section, the company and any of the following persons, who knowingly and willfully authorises or permits the default, namely, any officer of the company, any liquidator of the company and any receiver or manager, shall be guilty of an offence and liable to a fine not exceeding 25 for every day during which the default continues.

 

 

Duties, powers and liabilities of receivers and managers

 

 

393.   (1)         A person appointed a receiver of any property of a company shall subject to the rights of prior incumbrancers, take possession of and protect the property, receive the rents and profits and discharge all out-goings in respect thereof and realise the security for the benefit of those on whose behalf he is appointed, but unless appointed manager he shall not have power to carry on any business or undertaking.

 

 

  (2)          A person appointed manager of the whole or any part of the undertaking of a company shall manage the same with a view to the beneficial realisation of the security of those on whose behalf he is appointed.

 

  (3)          Without prejudice to subsection (1) or (2) of this section, where a receiver or manager is appointed for the whole or substantially the whole of a company's property, the powers conferred on him by the debentures by virtue of which he was appointed shall be deemed to include (except in so far as they are inconsistent with any of the provisions of those debentures) the powers specified in Schedule 11 to this Decree.

 

  (4)          As from the date of appointment of a receiver or manager, the powers of the directors or liquidators in a members' voluntary winding up to deal with the property or undertaking over which he is appointed shall cease unless and until the receiver or manager is discharged.

 

  (5)          If, on the appointment of a receiver or manager, the company is being wound up under the provision relating to creditors' voluntary winding up, or the property concerned is in the hands of some other officer of the court, the liquidator or officer shall not be bound to relinquish control of such property to the receiver or manager except under the order of the court.

 

394.   (1)         A receiver or manager of any property or undertaking of a company shall be personally liable on any contract entered into by him except in so far as the contract otherwise expressly provides.

 

  (2)          As regards contracts entered into by a receiver or manager in the proper performance of his functions, such receiver or manager shall, subject to the rights of any prior incumbrancers, be entitled to an indemnity in respect of liability thereon out of the property over which he has been appointed to act as receiver or manager.

 

  (3)          A receiver or manager appointed out of court under a power contained in any instrument shall also be entitled, as regards contracts entered into by him with the express or implied authority of those appointing him, to an indemnity in respect of liability thereon from those appointing him to the extent to which he is unable to recover in accordance with subsection (2) of this section.

 

395.           The Court may, on the application of the company or the liquidator of a company, by order fix the amount to be paid by way of remuneration to any person who, under the powers contained in any instrument, has been appointed as receiver or manager of the property of the company.

 

  (2)          The powers of the Court under subsection (1) of this section shall, where no previous order has been made with respect thereto under that subsection-

 

(a)             extend to fixing the remuneration for any period before the making of the order or the application therefor; and

 

(b)             be exercisable notwithstanding that the receiver or manager has died or ceased to act before the making of the order or the application therefor; and

 

(c)             extend where the receiver or manager has been paid or has retained for his remuneration for any period before the making of the order any amount in excess of that so fixed for that period, to requiring him or his personal representatives to account for the excess or such part thereof as may be specified in the order:

 

Provided that the power conferred by paragraph (c) of this subsection shall not be exercised as respects any period before the making of the application for the order unless in the opinion of the court there are special circumstances making it proper for the power to be so exercised.

 

  (3)          The court may from time to time on an application made either by the company or the liquidator or by the receiver or manager, vary or amend an order made under subsection (1) of this section.

 

  (4)          This section shall apply whether the receiver or manager has been appointed before or after the commencement of this Decree, and to periods before, as well as to periods after, the commencement of this Decree.

 

 

Procedure after appointment

 

 

396.  (1)         Where a receiver or manager of the whole or substantially the whole of the property of a company (hereafter in this section and in section 397 of this Decree referred to as "the receiver") has been appointed on behalf of the holders of any debentures of the company secured by a floating charge, then subject to the provisions of this section and of section 397 of this Decree-

 

(a)             the receiver shall forthwith send notice to the company of his appointment and the terms; and

 

(b)             there shall, within 14 days after receipt of the notice, or such longer period as may be allowed by the court or by the receiver, be made out and submitted to the receiver in accordance with section 397 of this Decree, a statement in the prescribed form as to the affairs of the company and

 

(c)             the receiver shall within 2 months after receipt of the said statement send -

 

(i)             to the Commission or to the court a copy of the statement and of any comments he sees fit to make thereon and in the case of the Commission also a summary of the statement and of his comments if any thereon;

 

(ii)             to the company a copy of any such comments as aforesaid or if he does not see fit to make any comment, a notice to that effect; and

 

(iii)             to any trustees for the debenture holders on whose behalf he has been appointed and, so far as he is aware of their addresses, to all such debenture holders a copy of the said summary.

 

  (2)          The receiver shall within 2 months, or such longer period as the court may allow after the expiration of the period of 12 months from the date of his appointment and of every subsequent period of 12 months, and within 2 months or such longer period as the court may allow after he ceases to act as receiver or manager of the property of the company, send to the Commission, to any trustees for the debenture holders of the company on whose behalf he was appointed, to the company and (so far as he is aware of their addresses) to all such debenture holders an abstract in the prescribed form showing his receipts and payments during that period of 12 months, or, where he ceases to act as aforesaid, during the period from the end of the period to which the last preceding abstract relate up to the date of his so ceasing, and the aggregate amounts of his receipts and of his payments during all preceding periods since his appointments.

 

  (3)          Where the receiver is appointed under the powers contained in any instrument, this section shall have effect-

 

(a)             with the omission of the references to the court in subsection (1) of this section; and

 

(b)             with the substitution for the references to the court in subsection (2) of this section, of references to the Commission; and in any other case references to the court shall be taken as referring to the court by which the receiver was appointed.

 

  (4)          Subsection (1) of this section shall not apply in relation to the appointment of a receiver or manager to act with an existing receiver or manager or in place of a receiver or manager dying or ceasing to act, except that, where that subsection applies to a receiver or manager who dies or ceases to act before it has been fully complied with, the references in paragraphs (b) and (c) thereof to the receiver shall subject to subsection (5) of this section, include references to his successor and to any continuing receiver or manager and nothing in this subsection shall be taken as limiting the meaning of the expression "the receiver" where used in, or in relation to, subsection (2) of this section.

 

  (5)          This section and section 397 of this Decree, where the company is being wound up, shall apply notwithstanding that the receiver or manager and the liquidator are the same person.

 

  (6)          Nothing in subsection (2) of this section shall be taken to prejudice the duty of the receiver to render proper accounts of his receipts and payments to the persons to whom, and at the times at which he may be required to do so apart from that subsection.

 

  (7)          If the receiver makes default in complying with the requirements of this section, he shall be guilty of an offence and liable to a fine of 25 for every day during which the default continues.

 

397.   (1)         The statements as to the affairs of a company required by section 396 of this Decree, to be submitted to the receiver (or his successor) shall show as at the date of the receiver's appointment, the particulars or the company's assets, debts and liabilities, the names, residences and occupations of its creditors, the securities held by them respectively, the dates when the securities were respectively given and such further or other information as may be prescribed.

 

  (2)          The statement shall be submitted by, and be verified by affidavit of one or more of the persons who are at the date of the receiver's appointment, the directors and by the person who is at that date the secretary of the company, or by such of the persons hereafter in this subsection mentioned as the receiver (or his successor), subject to the direction of the court, may require to submit and verify the statement, that is to say, persons -

 

(a)             who are or have been officers of the company;

 

(b)             who have taken part in the information of the company at any time within one year before the date of the receiver's appointment;

 

(c)             who are in the employment of the company, or have been in the employment of the company within the year, and are in the opinion of the receiver capable of giving the information required;

 

(d)             who are or have been within the said year officers of or in the employment of a company which is, or within the said year was, an officer of the company to which the statement relates.

 

  (3)          Any person making the statement and affidavit shall be allowed, and shall be paid by the receiver (or his successor) out of his receipts, such costs and expenses incurred in and about the preparation and making of the statement and affidavit as the receiver (or his successor) may consider reasonable, subject to an appeal to the court.

 

  (4)          Where the receiver is appointed under the powers contained in any instrument, this section shall have effect with the substitution for references to the court of references to the commission and references to an affidavit, of references to a statutory declaration; and in any other case references to the court shall be taken as referring to the court by which the receiver was appointed.

 

  (5)          If any person without reasonable excuse makes default in complying with the requirements of this section, he shall be guilty of an offence and liable to a fine of 50 for every day during which the default continues.

 

  (6)          References in this section to the receiver's successor shall include a continuing receiver or manager.

 

 

Accounts by receiver or manager

 

 

398.    (1)         Except where section 396 (2) of this Decree applies, every receiver or manager of the property of a company who has been appointed under the powers contained in any instrument shall, within one month or such longer periods as the Commission may allow, after the expiration of the period of 6 months from the date of his appointment, and of every subsequent period of 6 months, and within one month after he ceases to act as receiver or manager, deliver to the Commission for registration an abstract in the prescribed form showing his receipts and his payments during that period of 6 months, or where he ceases to act as aforesaid during the period from the end of the period to which the last preceding abstract relate up to the date of his ceasing, and the aggregate amount of his receipts and of his payments during all preceding periods since his appointment.

 

  (2)          Every receiver or manager who makes default in complying with the provisions of this section shall be guilty of an offence and liable to a fine of 25 for every day during which the default continues.

 

 

Duty as to returns

 

 

399.    (1)         If any receiver or manager of the property of a company having -

 

(a)             made default in filing, delivering or making any returns, account or other document, or in giving any notice, which a receiver or manager is by law required to file, delivers, makes or gives or fails to make good the default within 14 days after the service on him of a notice requiring him to do so; or

 

(b)             been appointed under the powers contained in any instrument has, after being required at any time by the liquidator of the company so to do, fails to render proper accounts of his receipts and payment and to vouch the same and to pay over to the liquidator the amount properly payable to him, the Court may, on an application made for the purpose, make an order directing the receiver or manager, as the case may be; to make good the default within such time as may be specified in the order.

 

  (2)          In the case of any such default as is mentioned in paragraph (a) of subsection (1) of this section, an application for the purposes of this section may be made by any member or by the Commission, and in the case of any such default as is mentioned in paragraph (b) of that subsection, the application shall be made by the liquidator, and in either case the order may provide that all costs shall be borne by the receiver or manager, as the case may be.

 

  (3)          Nothing in this section shall be taken to prejudice the operation of any enactment imposing penalties on receivers in respect of any such default as is mentioned in subsection (1) of this section.

 

 

Construction of references

 

 

400.         It is hereby declared that, except where the context otherwise requires -

 

(a)             any reference in this Decree to a receiver or manager of the property of a company, or to a receiver thereof, includes a reference to a receiver or manager, or as the case may be to a receiver of part only of that property and to a receiver only of the income arising from that property or from part thereof; and

 

(b)             any reference in this Decree to the appointment of a receiver or manager under powers contained in any instrument, includes a reference to an appointment made under powers which, by virtue of any enactment, are implied in and have effect as if contained in an instrument.

 

 

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