Part 16U.K.Audit

Chapter 1U.K.Requirement for audited accounts

[F1Exemption from audit: qualifying subsidiariesU.K.

479A Subsidiary companies: conditions for exemption from auditU.K.

(1)A company is exempt from the requirements of this Act relating to the audit of individual accounts for a financial year if—

(a)it is itself a subsidiary undertaking, and

(b) its parent undertaking is established under the law of [F2any part of the United Kingdom].

(2)Exemption is conditional upon compliance with all of the following conditions—

(a)all members of the company must agree to the exemption in respect of the financial year in question,

(b)the parent undertaking must give a guarantee under section 479C in respect of that year,

(c)the company must be included in the consolidated accounts drawn up for that year or to an earlier date in that year by the parent undertaking in accordance with—

[F3(i)if the undertaking is a company, the requirements of Part 15 of this Act, or, if the undertaking is not a company, the legal requirements which apply to the drawing up of consolidated accounts for that undertaking, or]

(ii)[F4UK-adopted international accounting standards (within the meaning given by section 474(1))],

(d)the parent undertaking must disclose in the notes to the consolidated accounts that the company is exempt from the requirements of this Act relating to the audit of individual accounts by virtue of this section, and

(e)the directors of the company must deliver to the registrar on or before the date that they file the accounts for that year—

(i)a written notice of the agreement referred to in subsection (2)(a),

(ii)the statement referred to in section 479C(1),

(iii)a copy of the consolidated accounts referred to in subsection (2)(c),

(iv)a copy of the auditor's report on those accounts, and

(v)a copy of the consolidated annual report drawn up by the parent undertaking.

(3)This section has effect subject to—

• section 475(2) and (3) (requirements as to statements contained in balance sheet), and

• section 476 (right of members to require audit).

479B Companies excluded from the subsidiary companies audit exemptionU.K.

A company is not entitled to the exemption conferred by section 479A (subsidiary companies) if it was at any time within the financial year in question—

[F5(a)a traded company as defined in section 474(1),]

(b)a company that—

(i) is an authorised insurance company, a banking company, an e-money issuer, a MiFID investment firm or a UCITS management company, [F6 or]

(ii)carries on insurance market activity, or

[F7(iii)is a scheme funder of a Master Trust scheme within the meanings given by section 39(1) of the Pension Schemes Act 2017 [F8or section 39(1) of the Pension Schemes Act (Northern Ireland) 2021] (interpretation of Part 1), or]

(c) a special register body as defined in section 117(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 (c 52) or an employers' association as defined in section 122 of that Act or Article 4 of the Industrial Relations (Northern Ireland) Order 1992 (S.I. 1992/807) (NI 5).

479C Subsidiary companies audit exemption: parent undertaking declaration of guaranteeU.K.

(1)A guarantee is given by a parent undertaking under this section when the directors of the subsidiary company deliver to the registrar a statement by the parent undertaking that it guarantees the subsidiary company under this section.

(2)The statement under subsection (1) must be authenticated by the parent undertaking and must specify—

(a)the name of the parent undertaking,

[F9(b)the registered number (if any) of the parent undertaking,]

F10(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)the name and registered number of the subsidiary company in respect of which the guarantee is being given,

(e)the date of the statement, and

(f)the financial year to which the guarantee relates.

(3)A guarantee given under this section has the effect that—

(a)the parent undertaking guarantees all outstanding liabilities to which the subsidiary company is subject at the end of the financial year to which the guarantee relates, until they are satisfied in full, and

(b)the guarantee is enforceable against the parent undertaking by any person to whom the subsidiary company is liable in respect of those liabilities.]