Section 397 CAMA 2020
Section 397 Companies and Allied Matters Act is about Modified financial statements of holding company. It is under Chapter 14 (Financial statements, audit and accounting records) of the Act.
(1) This section applies to a holding company where in respect of a year section 379 requires the preparation of group financial statements for the company and its subsidiaries.
(2) The directors of the holding company may not under section 396 of this Act deliver financial statements modified as for a small company, unless the group (that is to say, the holding company and its subsidiaries together) isin that year a small group and the group is small if it qualifies under section394 of this Act (applying that section as provided under subsections (3) and(4), as if it were all one company).
(3) The figures to be taken into account in determining whether the group is small are 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
(4) In the case of each subsidiary omitted from the group financial statements, the figures relevant as regards turnover, and balance sheet total are 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), the relevant year of the subsidiary is—
(a) if its year ends with that of the holding company to which the group financial statements relate, that year ; and
(6) If the directors are entitled to deliver modified financial statements,they may also deliver modified group financial statements, and such group financial statements if—
(a) consolidated, may be in accordance with Part II of the Sixth Schedule(while otherwise comprising or corresponding with group financial statements prepared under section 379 of this Act) ; and
(b) not consolidated, may be such as (together with any notes) give the same or equivalent information as required by paragraph (a), and Part III to the Sixth Schedule to this Act applies to modified group financial statements whether consolidated or not.
