Part VI Accounts and Audit
Records F6. . .
I168 Accounting records F1...
1
Every friendly society and every registered branch shall—
a
cause accounting records to be kept; F2. . .
F2b
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in accordance with this section.
2
The accounting records must be sufficient to show and explain the transactions of the society or branch and—
a
disclose, with reasonable accuracy and promptness, the financial position of the society or branch at any time;
b
enable the committee of management properly to discharge the duties imposed on them by or under this Act or the 1974 Act F20(and, where applicable, Article 4 of the IAS Regulation) and their function of direction of the affairs of the society or branch; and
c
enable the society or branch properly to discharge the duties imposed on it by or under this Act or the 1974 Act F20(and, where applicable, Article 4 of the IAS Regulation),
and must be kept in an orderly manner.
3
The accounting records shall in particular contain—
a
entries from day to day of all sums received and paid by the society or branch and the matters in respect of which they are received or paid;
b
entries from day to day of every transaction entered into by the society or branch which will or there is reasonable ground for expecting may give rise to liabilities or assets of the society or branch other than insignificant assets or liabilities in respect of the management of the society or branch; and
c
a record of the assets and liabilities of the society or branch.
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8
The accounting records shall be kept at the registered office of the society or branch or at such other place or places as the committee of management thinks fit, and shall at all times be open to inspection by the committee of management.
9
Accounting records shall be preserved for 6 years from the date on which they were made.
10
Where an incorporated friendly society has subsidiaries or jointly controls other bodies, the society shall also secure that such accounting records are kept F4. . . by them as will enable the society to comply with the requirements of this section in relation to the business of the society and those subsidiaries and jointly controlled bodies.
F511
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Annual accounts of friendly societies and registered branches
F1669 Duty to prepare accounts.
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69AF16Duty to prepare individual accounts
1
The committee of management of every friendly society or registered branch must prepare accounts for the society or branch for each of its financial years. Those accounts are referred to in this Part as the society’s or branch’s “individual accounts”.
2
The individual accounts of a friendly society or registered branch of a society may be prepared—
a
in accordance with section 69B (“Friendly Societies Act individual accounts”), or
b
in accordance with international accounting standards (“IAS individual accounts”).
This subsection is subject to subsection (3) and section 69I (consistency of accounts).
3
After the first financial year in which the committee of management of a friendly society or registered branch prepares IAS individual accounts (“the first IAS year”), all subsequent individual accounts of the society or branch must be prepared in accordance with international accounting standards unless there is a relevant change of circumstance.
4
There is a relevant change of circumstance if, at any time during or after the first IAS year—
a
the society or branch becomes a subsidiary undertaking of another undertaking and individual accounts for that undertaking are not prepared in accordance with international accounting standards,
b
the society or branch ceases to be a society or part of a society with securities admitted to trading on a regulated market, or
c
a parent undertaking of the society or branch ceases to be an undertaking with securities admitted to trading on a regulated market.
In this subsection “regulated market” has the same meaning as it has in F28Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments.
5
If, having changed to preparing Friendly Societies Act individual accounts following a relevant change of circumstance, the committee of management again prepares IAS individual accounts for the society or branch, subsections (3) and (4) apply again as if the first financial year for which such accounts are again prepared were the first IAS year.
69BFriendly Societies Act individual accounts
1
Friendly Societies Act individual accounts must comprise—
a
a balance sheet as at the last day of the financial year, and
b
an income and expenditure account.
2
The balance sheet must give a true and fair view of the state of affairs of the society or branch as at the end of the financial year; and the income and expenditure account must give a true and fair view of the income and expenditure of the society or branch for the financial year.
3
Friendly Societies Act individual accounts must comply with the requirements of regulations made under section 69C as to the form and content of the balance sheet and income and expenditure account and additional information to be provided by way of notes to the accounts or otherwise.
4
Where compliance with the provisions of those regulations, and the other provisions of this Act as to the matters to be included in a society’s or branch’s individual accounts or in notes to those accounts, would not be sufficient to give a true and fair view, the necessary additional information must be given in the accounts or in a note to them.
5
If in special circumstances compliance with any of those provisions is inconsistent with the requirement to give a true and fair view, the committee of management must depart from that provision to the extent necessary to give a true and fair view.
6
Particulars of any such departure, the reasons for it and its effect must be given in a note to the accounts.
7
The Treasury may by regulations –
a
add to the classes of documents to be comprised in a society’s or branch’s Friendly Societies Act individual accounts under subsection (1);
b
make provision as to the matters to be included in any document so added;
c
modify the requirements of this Part as to the matters to be stated in any document comprised in the society’s or branch’s Friendly Societies Act individual accounts;
d
reduce the classes of documents to be comprised in a society’s or branch’s Friendly Societies Act individual accounts.
8
Regulations under subsection (7) –
a
may make different provision for different cases, and
b
may include incidental and supplementary provisions.
69CForm and contents of Friendly Societies Act individual accounts
1
The Treasury must by regulations make provision with respect to the form and content of Friendly Societies Act individual accounts.
2
The Treasury may by regulations make provision with respect to additional information to be contained in Friendly Societies Act individual accounts, whether in the form of notes or otherwise.
3
The regulations may, in particular–
a
prescribe accounting principles and rules;
b
require corresponding information for a preceding financial year;
c
make different 'provision for different descriptions of society or branch.
69DIAS individual accounts
Where the committee of management of a friendly society prepare IAS individual accounts for a society or branch, it must state in the notes to those accounts that the accounts have been prepared in accordance with international accounting standards.
69EDuty to prepare group accounts
1
If at the end of a financial year an incorporated friendly society has subsidiary undertakings, the committee of management, in addition to preparing individual accounts for the year, must prepare consolidated accounts for the year for the society and those undertakings taken as a whole, except as provided by regulations under subsection (7).
Those accounts are referred to in this Part as the society’s “group accounts”.
2
Certain friendly societies are obliged by Article 4 of the IAS Regulation to prepare their group accounts in accordance with international accounting standards (“IAS group accounts”).
3
The group accounts of other friendly societies may be prepared –
a
in accordance with section 69F (“Friendly Societies Act group accounts”), or
b
in accordance with international accounting standards (“IAS group accounts”).
This subsection is subject to the following provisions of this section and section 69I (consistency of accounts).
4
After the first financial year in which the committee of management of a friendly society prepares IAS group accounts (“the first IAS year”), all subsequent group accounts of the society must be prepared in accordance with international accounting standards unless there is a relevant change of circumstance.
5
There is a relevant change of circumstance if, at any time during or after the first IAS year—
a
the society becomes a subsidiary undertaking of another undertaking and accounts for that undertaking and its subsidiary undertakings (taken as a whole) are not prepared in accordance with international accounting standards,
b
the society ceases to be a society with securities admitted to trading on a regulated market, or
c
a parent undertaking of the society ceases to be an undertaking with securities admitted to trading on a regulated market.
In this subsection “regulated market” has the same meaning as it has in F29Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments.
6
If, having changed to preparing Friendly Societies Act group accounts following a relevant change of circumstance, the committee of management again prepares IAS group accounts for the society, subsections (4) and (5) apply again as if the first financial year for which such accounts are again prepared were the first IAS year.
7
The Treasury may by regulations exempt specified descriptions of incorporated friendly societies with subsidiaries from any duty to prepare group accounts.
8
Regulations under subsection (7) may exempt societies by reference to any criterion and may make different provision for different descriptions of societies.
69FFriendly Societies Act group accounts
1
Friendly Societies Act group accounts must comprise—
a
a balance sheet dealing with the state of affairs of the society and its subsidiary undertakings;
b
an income and expenditure account showing the income and expenditure of the society and its subsidiary undertakings.
2
Friendly Societies Act group accounts must give a true and fair view of the state of affairs as at the end of the financial year, and the income and expenditure for the financial year, of the society and the subsidiary undertakings included in the group accounts as a whole, so far as concerns the members of the society.
3
Friendly Societies Act group accounts must comply with the requirements of regulations made under section 69G as to the form and content of the group accounts and additional information to be provided by way of notes to the accounts or otherwise.
4
Where compliance with the provisions of those regulations, and the other provisions of this Act as to the matters to be included in a society’s group accounts or in notes to those accounts, would not be sufficient to give a true and fair view, the necessary additional information must be given in the accounts or in a note to them.
5
If in special circumstances compliance with any of those provisions is inconsistent with the requirement to give a true and fair view, the committee of management must depart from that provision to the extent necessary to give a true and fair view.
6
Particulars of any such departure, the reasons for it and its effect must be given in a note to the accounts.
7
The Treasury may by regulations—
a
add to the classes of documents to be comprised in a society’s Friendly Societies Act group accounts under subsection (1);
b
make provision as to the matters to be included in any document so added;
c
modify the requirements of this Part as to the matters to be stated in any document comprised in the society’s Friendly Societies Act group accounts; and
d
reduce the classes of documents to be comprised in a society’s Friendly Societies Act group accounts.
8
Regulations under subsection (7)—
a
may make different provision for different descriptions of society; and
b
may include incidental and supplementary provisions.
69GForm and content of Friendly Societies Act group accounts
1
The Treasury must by regulations make provision with respect to the form and content of Friendly Societies Act group accounts.
2
The Treasury may by regulations make provision with respect to additional information to be contained in Friendly Societies Act group accounts, whether in the form of notes or otherwise.
3
The regulations may, in particular—
a
prescribe accounting principles and rules;
b
require corresponding information for a preceding financial year; and
c
make different provision for different descriptions of society.
69HIAS group accounts
Where the committee of management of a friendly society prepares IAS group accounts, it must state in the notes to those accounts that the accounts have been prepared in accordance with international accounting standards.
69IConsistency of accounts
1
The committee of management of a friendly society that prepares group accounts must secure that the individual accounts of—
a
the friendly society,
b
each of its subsidiary undertakings, and
c
each of its registered branches,
are all prepared using the same financial reporting framework, except to the extent that in their opinion there are good reasons for not doing so.
2
Subsection (1) only applies to accounts of subsidiary undertakings which are—
a
required to be prepared under F30Part 15 of the Companies Act 2006, or
b
required to be prepared under Part 6 of this Act.
3
Subsection (1) does not require accounts of undertakings that are charities to be prepared using the same financial reporting framework as accounts of undertakings which are not charities.
4
Subsection (1)(a) does not apply where the committee of management of a friendly society prepares IAS group accounts and IAS individual accounts.
5
The committee of management of a society which has subsidiary undertakings must ensure that, except where in its opinion there are good reasons against it, the financial year of each of its subsidiary undertakings coincides with the society’s own financial year.
69JF17Disclosures relating to members of the committee of management and employees of the society
1
The information specified in Schedule 13D must be given in notes to a friendly society’s or a registered branch’s annual accounts, subject to the provisions of subsection (5).
2
In that Schedule—
Part 1 relates to emoluments and other benefits of members of the committee of management and others and to loans and other dealings in favour of members of the committee and connected persons; and
Part 2 relates to information about the employees of a society.
3
It is the duty of any member of the committee of management, and any person who has been at any time in the preceding five years a member of the committee, to give notice to the society of such matters relating to himself as may be necessary for the purposes of Part 1 of Schedule 13D.
4
A person who makes default in complying with subsection (3) commits an offence and is liable on summary conviction to a fine not exceeding level 3 on the standard scale.
5
Paragraphs 11 and 13 of Schedule 13D do not apply to non-directive friendly societies or their registered branches.
6
The annual accounts of a friendly society which is required to produce group accounts under section 69E must include the material specified by paragraphs 11 to 13 not only in respect of the society but also in respect of the society and its subsidiaries in combination.
7
The Treasury may, by order, modify the provisions of Schedule 13D.
8
An order under this section may—
a
make consequential amendments or repeals of other provisions of this Act;
b
make such transitional or saving provisions as appear to the Treasury to be necessary or expedient;
c
make different provision for different cases.
69KDisclosures about related undertakings
1
The information specified in Schedule 13E must be given in notes to a friendly society’s or a registered branch’s annual accounts.
2
In the case of a friendly society whose committee of management is not required to prepare consolidated accounts, the information specified in Part 1 of that Schedule must be given.
3
In the case of a friendly society whose committee of management is required to prepare consolidated accounts, the information specified in Part 2 of that Schedule must be given.
4
The Treasury may, by order, modify the provisions of Schedule 13E.
5
An order under this section may also—
a
make consequential amendments of or repeals in other provisions of this Act;
b
make such transitional or saving provisions as appear to the Treasury to be necessary or expedient;
c
make different provision for different cases.
69LF36Disclosures relating to off-balance-sheet arrangements
1
If in any financial year—
a
a friendly society or registered branch has been party to arrangements that are not reflected in its balance sheet, and
b
at the balance sheet date the risks or benefits arising from those arrangements are material,
the information required by this section must be given in notes to the society’s or branch’s annual accounts.
2
The information required is—
a
the nature and business purpose of the arrangements, and
b
the financial impact of the arrangements on the society or branch.
3
The information need only be given to the extent necessary for enabling the financial position of the society or branch to be assessed.
4
Where a friendly society is required to prepare consolidated group accounts, this section applies in relation to those accounts as if the undertakings included in the consolidation were a single friendly society.
69MF37Disclosure of auditor remuneration
1
The information specified in Schedule 13F must be given in notes to a friendly society’s or a registered branch’s annual accounts.
2
The Treasury may, by order, modify the provisions of Schedule 13F.
3
An order under this section may—
a
make consequential amendments or repeals of other provisions of this Act;
b
make such transitional or saving provisions as appear to the Treasury to be necessary or expedient, or
c
make different provision for different cases.
F1670 Contents and form of annual accounts.
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Committee of management’s annual report
I271 Report on a friendly society’s affairs by the committee of management.
1
The committee of management of a friendly society shall prepare for submission to the annual general meeting of the society a report on the activities of the society containing—
F21a
a fair review of the business of the society, its subsidiary undertakings and bodies that it jointly controls (if any) complying with section 71A;
aa
a description of the principal risks and uncertainties facing the society, its subsidiary undertakings and bodies that it jointly controls (if any);
C1b
such information relating to such aspects of the activities of the society as may be prescribed by regulations made by the F7. . . Treasury; and
c
a statement whether any and, if so, what activities carried on during the year by the society are believed to have been carried on outside its powers.
F221A
If the friendly society has subsidiary undertakings, the report may, where appropriate, give greater emphasis to those matters which are significant to the society and its subsidiary undertakings taken as a whole.
2
Where an incorporated friendly society has subsidiaries or jointly controls other bodies, the report shall-
C2a
contain such information relating to such aspects of the activities of any subsidiaries or bodies which it jointly controls as may be prescribed by regulations made by the F7. . . Treasury;
F23b
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c
contain a statement whether any and, if so, what activities carried on during the year by any of its subsidiaries or by any body which it jointly controls are believed to have been carried on outside the powers of the subsidiary or jointly controlled body.
3
If a report under this section does not contain the prescribed information or the information in the report is not given in accordance with the regulations, each member of the committee of management shall be guilty of an offence and liable—
a
on conviction on indictment, to a fine; and
b
on summary conviction, to a fine not exceeding the statutory maximum.
71AF18Business review
1
The review required for the purposes of section 71(1)(a) is a balanced and comprehensive analysis of—
a
the development and performance of the business of the friendly society, its subsidiary undertakings and bodies that it jointly controls (if any) during the financial year, and
b
the position of the friendly society, its subsidiary undertakings and bodies that it jointly controls (if any) at the end of that year,
consistent with the size and complexity of the business.
2
The review must, to the extent necessary for an understanding of the development, performance or position of the business of the society, its subsidiary undertakings and bodies that it jointly controls (if any), include—
a
analysis using financial key performance indicators, and
b
where appropriate, analysis using other key performance indicators, including information relating to environmental matters and employee matters.
3
The review must, where appropriate, include references to additional explanations of amounts included in the annual accounts of the society.
4
In this section “key performance indicators” means factors by reference to which the development, performance or position of the business of the society, any subsidiary undertakings it has and any bodies that it jointly controls, can be measured effectively.
Auditors
I372 Auditors’ appointment, tenure, qualifications, etc.
1
Every friendly society and every registered branch shall at each annual general meeting appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting.
2
Schedule 14 to this Act has effect as regards—
a
the appointment of auditors;
b
their qualifications and grounds of disqualification;
c
the resignation and removal of auditors; and
d
the remuneration of auditors.
Auditors’ report on annual accounts
I473F34Auditor’s report.
1
2
The F40auditor of a friendly society or registered branch shall, in preparing F41his report, carry out such investigations as will enable F42him to form an opinion as to—
a
whether proper accounting records have been kept under section 68 above;
F8b
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c
whether the annual accounts are in agreement with the accounting records;
3
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F244A
The F49auditor shall, in his report,—
a
state whether in F50his opinion the information given in the report of the committee of management for the financial year for which the annual accounts are prepared is consistent with those accounts; and
b
state whether in F50his opinion that report has been prepared in accordance with this Act and the regulations made under it.
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F255A
The F51auditor shall, in his report, include—
a
an introduction identifying the annual accounts that are the subject of the audit and the financial reporting framework that has been applied in their preparation;
b
a description of the scope of the audit identifying the auditing standards in accordance with which the audit was conducted.
5B
5C
The F54auditor shall, in his report, state in particular whether the annual accounts give a true and fair view in accordance with the relevant financial reporting framework—
a
in the case of an individual balance sheet, of the state of affairs of the society or branch as at the end of the financial year;
b
in the case of an individual income and expenditure account, of the income and expenditure of the society or branch for the financial year;
c
in the case of the group accounts of an incorporated friendly society, of the state of affairs as at the end of the financial year and of the income and expenditure for the financial year of the society and the subsidiary undertakings dealt with in the group accounts, so far as concerns members of the society.
5D
The F55auditor’s report —
a
shall be either unqualified or qualified, and
b
shall include a reference to any matters to which the F56auditor wishes to draw attention by way of emphasis without qualifying the report.
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74F38Signature of auditor’s report
1
The auditor’s report to the members of a friendly society or registered branch must state the name of the auditor and be signed and dated.
2
Where the auditor is an individual, the report must be signed by him.
3
Where the auditor is a firm, the report must be signed—
a
in the case of a friendly society to which the Audit Directive applies, by the senior statutory auditor in his own name, for and on behalf of the firm;
b
in any other case—
i
in the name of the firm by a person authorised to sign on its behalf, or
ii
if the firm has identified a senior statutory auditor in relation to the audit, by that person, in his own name, for and on behalf of the firm.
74AF38Senior statutory auditor
1
The senior statutory auditor means the individual identified by the firm as senior statutory auditor in relation to the audit in accordance with the standards or guidance mentioned in section 504(1) of the Companies Act 2006.
2
The person identified as senior statutory auditor must be eligible for appointment as auditor of the society in question in accordance with—
a
in the case of a friendly society to which the Audit Directive applies, Chapter 2 of Part 42 of the Companies Act 2006;
b
in any other case, Schedule 14 to this Act.
3
The senior statutory auditor is not, by reason of being named or identified as senior statutory auditor or by reason of his having signed the auditor’s report, subject to any civil liability to which he would not otherwise be subject.
74BF38Names to be stated in copies of auditor’s report filed or published
1
The copies of the auditor’s report sent to the Authority under section 78(1) or (2) below, and every copy of the auditor’s report that is published by or on behalf of the friendly society or registered branch, must—
a
state the name of the auditor and (where the auditor is a firm and the report is signed by a senior statutory auditor) the name of the person who signed it as senior statutory auditor, or
b
if the conditions in section 74C (circumstances in which names may be omitted) are met, state that a resolution has been passed and notified to the Authority in accordance with that section.
2
For the purposes of this section a society or branch is regarded as publishing the report if it publishes, issues or circulates it or otherwise makes it available for public inspection in a manner calculated to invite members of the public generally, or any class of members of the public, to read it.
3
If a copy of the auditor’s report is sent to the Authority or published without the statement required by this section, an offence is committed by—
a
the society or branch, and
b
every officer of the society or branch who is in default.
4
A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale.
74CF38Circumstances in which names may be omitted
1
The auditor’s name, and (where applicable) the name of the person who signed the report as senior statutory auditor, may be omitted from—
a
the copies of the report sent to the Authority under section 78(1) or (2) below, and
b
published copies of the report,
if the following conditions are met.
2
The conditions are that the friendly society or registered branch—
a
considering on reasonable grounds that statement of the name would create or be likely to create a serious risk that the auditor or senior statutory auditor, or any other person, would be subject to violence or intimidation, has resolved in general meeting that the name should not be stated, and
b
has given notice of the resolution to the Authority, stating—
i
the name of the society or branch,
ii
the financial year of the society to which the report relates, and
iii
the name of the auditor and (where applicable) the name of the person who signed the report as senior statutory auditor.
I575F35Auditor’s rights to information and to attend meetings.
1
The F57auditor of a friendly society is entitled—
a
to access at all times to the books, accounts and vouchers of the society;
b
to require from the officers of the society such information and explanations F58as he thinks necessary for the performance of his duties as auditor;
c
to receive from the society—
i
notice of any general meeting of the society and of any matter relating to the business of such a meeting of which notice is given (by whatever means) to the society’s members; and
ii
copies of any communications sent to the society’s members with respect to any such meeting; and
d
to attend any general meeting of the society and to be heard on any part of the business of the meeting which concerns F59him as auditor;
and the F60auditor of a registered branch has the corresponding rights to those specified in paragraphs (a) to (d) above, with the substitution for references to the society of references to the branch.
2
The right to attend or be heard at a meeting is exercisable in the case of a body corporate or partnership by an individual authorised by it in writing to act as its representative at the meeting.
3
An officer of a friendly society is guilty of an offence if he knowingly or recklessly makes to the society’s F61auditor a statement (whether written or oral) which—
a
conveys or purports to convey any information or explanations which the F62auditor requires, or is entitled to require, as auditor of the society; and
b
is misleading, false or deceptive in a material particular.
4
An officer of a registered branch is guilty of an offence if he knowingly or recklessly makes to the F63auditor of the branch a statement (whether written or oral) which—
a
conveys or purports to convey any information or explanations which the F64auditor requires, or is entitled to require, as auditor of the branch; and
b
is misleading, false or deceptive in a material particular.
5
A person guilty of an offence under subsection (3) or (4) above is liable —
a
on conviction on indictment, to imprisonment for a term not exceeding 2 years, or to a fine, or to both; and
b
on summary conviction, to imprisonment for a term not exceeding 6 months or to a fine not exceeding the statutory maximum, or to both.
F736
Where a subsidiary of a friendly society is a company (as defined in section 1(1) of the Companies Act 2006), the subsidiary and its auditors must give to the auditors of the friendly society such information and explanations as they may reasonably require for the purposes of their duties as auditors of the society.
7
If—
a
a subsidiary to which subsection (6) above applies fails to comply with that subsection; or
b
an auditor of such a subsidiary fails without reasonable excuse to comply with that subsection,
the subsidiary or auditor is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.
8
An incorporated friendly society having a subsidiary to which subsection (6) above does not apply shall, if required by F65its auditor to do so, take all such steps as are reasonably open to it to obtain from the subsidiary such information and explanations as F66he may reasonably require for the purposes of F67his duties as auditor of that society.
9
If an incorporated friendly society fails to comply with subsection (8) above, it is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.
I676 Approval and signing of accounts.
1
The annual accounts of a friendly society or a registered branch shall be approved by the committee of management.
2
The accounts so approved shall be signed by the secretary of the society or branch; and the signature shall be on the balance sheet.
3
Every copy of the balance sheet which is laid before the society or branch in general meeting, or is otherwise circulated, published or issued, shall state the name of the secretary of the society or branch.
4
The copy of the balance sheet of a friendly society or a registered branch which is sent to the F9Authority under section 78 below shall be signed by the secretary of the society or branch.
5
If annual accounts of a society or branch are approved which do not comply with the requirements of this Act, every member of the committee of management who is party to their approval and who knows that they do not comply or is reckless as to whether they comply is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.
For this purpose every member of the committee at the time the accounts are approved shall be taken to be a party to their approval unless he shows that he took all reasonable steps to prevent their being approved.
6
If a copy of the balance sheet of a society or branch—
a
is laid before the society or branch, or otherwise circulated, published or issued, without the balance sheet having been signed as required by this section or without the required statement of the signatory’s name being included; or
b
is sent to the F9Authority without being signed as required by this section,
the society or branch and every officer of it who is in default is guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.
I777 Information on appointed actuary to be annexed to balance sheet.
1
This section applies to any copy of a friendly society’s balance sheet which—
b
is laid before the society at its annual general meeting; or
c
is furnished to a member at his request.
2
Subject to the provisions of this section, a friendly society shall annex to each copy of its balance sheet to which this section applies as respects every person who, at any time during the financial year to which the balance sheet relates, was its appointed actuary, a statement of the following information—
a
whether the actuary was a member of the society or any subsidiary of the society at any time during that year;
b
particulars of any pecuniary interest of the actuary in any transaction between the actuary and the society or any subsidiary of the society and subsisting at any time during that year or, in the case of transactions of a minor character, a general description of such interests;
c
the aggregate amount of any remuneration and the value of any other benefits other than a pension or other future or contingent benefit under any contract of service of the actuary with, or contract for services by the actuary to, the society or any subsidiary of the society, receivable by the actuary in respect of any period in that year; and
d
a general description of any other pecuniary benefit (including any pension and other future contingent benefit) received by the actuary from the society or any subsidiary of the society in that year or receivable by him from the society or any such subsidiary,
together with a statement that the society has made a request to the actuary to furnish to it the particulars specified in this subsection and identifying any particulars furnished pursuant to the request.
3
Subsection (2) above applies in relation—
a
to the actuary’s spouse F27or civil partner;
b
to a partner of the actuary;
c
to any child or step-child of the actuary who is under 18;
d
to any person (other than the society concerned or any subsidiary of that society) of whom the actuary is an employee; and
e
to any body corporate (other than the society concerned or any subsidiary of that society) of which the actuary is a director or which is controlled by him,
as it applies in relation to the actuary.
4
For the purposes of subsection (3) above, an actuary shall be taken to control a body corporate if he is a person—
a
in accordance with whose directions or instructions the directors of that body corporate or of a body corporate of which it is a subsidiary are accustomed to act; or
b
who, either alone or with any other person falling within that subsection, is entitled to exercise or controls the exercise of, one-third or more of the voting power at any general meeting of the body corporate or of a body corporate of which it is a subsidiary.
5
If a friendly society fails to annex the statement required by subsection (2) above to a copy of its balance sheet to which this section applies, the society concerned shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.
Laying and furnishing of accounts and reports
I878 Laying and furnishing of accounts and reports.
F121
The committee of management of a friendly society shall in each year—
a
lay before the society, at the annual general meeting, copies of the annual accounts for the last financial year, the report of the committee of management for that year and the F68auditor’s report on those accounts; and
b
send to the Authority, not later than 30th June or 14 days before the annual general meeting, whichever is earlier, two copies of those accounts and reports.
2
The committee of management of a registered branch shall in each year—
a
lay before the branch, at the annual general meeting, copies of the annual accounts for the last financial year and the F69auditor’s report on those accounts; and
b
send to the Authority, not later than 30th June or 14 days before the annual general meeting, whichever is earlier, two copies of those accounts and that report.
3
Every friendly society shall, as from the date by which at the latest its committee of management is required by subsection (1) above to send them to the F13Authority—
a
make copies of the annual accounts, the report of the committee of management and the F70auditor’s report available free of charge to members of the society at every office of the society; and
b
send, free of charge, copies of those documents to any member of the society who demands them;
and that duty shall cease, as respects those accounts, when the society comes to be under the same duty in respect of the accounts for the next financial year.
4
Every registered branch shall, as from the date by which at the latest its committee of management is required by subsection (2) above to send them to the F13Authority—
a
make copies of the annual accounts and the F71auditor’s report available free of charge to members of the branch at every office of the branch; and
b
send, free of charge, copies of those documents to any member of the branch who demands them;
and that duty shall cease, as respects those accounts, when the branch comes to be under the same duty in respect of the accounts for the next financial year.
F744A
A friendly society or registered branch is to be regarded as sending a copy of a document to a member for the purposes of subsection (3)(b) or (4)(b) if it makes the document available to the member on a website; and the end date for the purposes of section 119AB(4)(b) is the date when the duty ceases.
5
If default is made in complying with subsection (1) or (2) above, every person who was a member of the committee of management of the society or, as the case may be, the branch, at any time during the relevant period shall be guilty of an offence and liable on summary conviction—
a
to a fine not exceeding level 5 on the standard scale; and
b
in the case of a continuing offence, to an additional fine not exceeding one-tenth of that level for every day during which the offence continues.
6
If, on demand made of it under subsection (3) or (4) above, a friendly society or registered branch fails, in accordance with that subsection, to make available or, as the case may be, within 7 days of the demand, to send to a person a copy of the annual accounts, the society or branch shall be guilty of an offence and liable on summary conviction—
a
to a fine not exceeding level 3 on the standard scale; and
b
in the case of a continuing offence, to an additional fine not exceeding one-tenth of that level for every day during which the offence continues.
7
In subsection (5) above “the relevant period” means the period beginning at the end of the last financial year and ending with the date which falls 14 days before the annual general meeting following the end of that year.
8
The F14Authority shall keep one of the copies of documents received by it from a friendly society under subsection (1) above in the public file of the society.
78AF19Interpretation of Part 6
1
In this Part—
“annual accounts”, in relation to a friendly society or registered branch, means—
- a
the individual accounts required by section 69A, and
- b
any group accounts required by section 69E,
together with the notes to those accounts;
- a
F31“the Audit Directive” means Directive 2006/43/EC of the European Parliament and of the Council on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC (as to friendly societies to which the Directive applies, see subsection (3) below);
F72“firm” means any entity, whether or not a legal person, that is not an individual and includes a body corporate, a corporation sole, and a partnership or other unincorporated association;
“IAS accounts” means IAS individual accounts or IAS group accounts;
“IAS Regulation” means EC Regulation No. 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards ;
“income and expenditure account”, in relation to a friendly society or registered branch which prepares IAS accounts, includes an income statement or other equivalent financial statement required to be prepared by international accounting standards;
“international accounting standards” means the international accounting standards, within the meaning of the IAS Regulation, adopted from time to time by the European Commission in accordance with the IAS Regulation;
“non-directive friendly society” means a registered friendly society —
- a
to which subsections (2) and (3) of section 37 (restriction of combinations of business do not apply; and
- b
which does not carry on reinsurance business;
- a
“parent undertaking” and “subsidiary undertaking” shall be construed in accordance with the provisions of F33section 1162 of the Companies Act 2006, read in conjunction with section 1161(1) of and Schedule 7 to that Act.
F72“senior statutory auditor” has meaning given by section 74A(1) above;
2
References in this Part to accounts giving a “true and fair view” are references—
a
in the case of Friendly Societies Act individual accounts, to the requirement under section 69B that such accounts give a true and fair view;
b
in the case of Friendly Societies Act group accounts, to the requirement under section 69F that such accounts give a true and fair view; and
c
in the case of IAS accounts, to the requirement under international accounting standards that such accounts achieve a fair presentation.
F323
References in this Part to a friendly society to which the Audit Directive applies are to a friendly society that is an insurance undertaking within the meaning given by Article 2.1 of Council Directive 1991/674/EEC on the annual accounts and consolidated accounts of insurance undertakings.
Words in the cross-heading repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 4); S.I. 2001/3538, art. 2(1)