414

Ch. 31. No. 1.] Companies.

those companies, have, so far as they concern the holding
company, Leen dealt with in, or for the purposes of, the
accounts of the holding company, and in particular how,
and to what extent—

(a) provision has been made for the losses of a
subsidiary company either in the accounts of that
company or of the holding company, or of both; and

(b) losses of a subsidiary company have been taken
into account by the directors of the holding company
in arriving at the profits and losses of the holding
company as disclosed in its accounts:

Provided that it shall not be necessary to specify in any
such statement the actual amount of the profits or losses of
any subsidiary company, or the actual amount of any part
of any such profits or losses which has been dealt with in
any particular manner.

(2) Hf in the case of a subsidiary company the
auditors’ report on the balance sheet of the company does
not state without qualification that the auditors have
obtained all the information and explanations they have
required and that the balance sheet 1s properly drawn up
so as to exhibit a true and correct view of the state of the
company’ affairs according to the Lest of their information
and the explanations given to them and as shown by the
books of the company, the statement which is to be annexed
as aforesaid to the balance sheet of the holding company
shall contain particulars of the manner in which the report
is qualified.

(3) For the purposes of this section, the profits or
losses of a subsidiary company mean the profits or losses
shown in any accounts of the subsidiary company made up
to a date within the period to which the accounts of the
holding company relate, or, 1f there are no such accounts
of the subsidiary company available at the time when the
accounts of the holding company are made up, the profits
or losses shown in the last previous accounts of the subsidiary
company which became available within that period.

(+) If for any reason the directors of the holding
company are unable to obtain such information as is
necessary for the preparation of the statement aforesaid, the
directors who sign the balance sheet shall so report in writing