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[With effect of (Amended 35 of 2018 s. 42), a written agreement of all members can also be used for the same purpose. See Company Ordinance (Cap. 622) Section 379, (3)(c) below for details.]

[HJK LIMITED]

[Company Address]

Memorandum for

Non preparation of Consolidated Financial Statements

Date:

Director [ABC] and Director [PKL] of [HJK LIMITED] (“the Company”), at least 6 months before the end of the financial year ended DD MMMM YYYY (“the financial year”), have notified the members [(name 1), (name 2) (listing all members)] of the Company in writing of the directors' intention not to prepare consolidated financial statements for the financial year, and the notification does not relate to any other financial year; and as at a date falling 3 months before the end of the financial year, no member has responded to the notification by giving the directors a written request for the preparation of consolidated financial statements for the financial year.

Signed by:

 

 

__________________              __________________

Director [ABC]                         Director [PKL]

 

 

__________________              __________________

Member [name 1]                     Member [name 2] 

asked by (9.9k points)
edited by

3 Answers

0 votes

Relevant Company Ordinance (Cap. 622) clauses (extra only):

Section: 379 

Heading: Directors must prepare financial statements

(1) A company’s directors must prepare for each financial year statements that comply with sections 380 and 383.

(2) Subject to subsection (3A), if the company is a holding company at the end of the financial year, the directors must instead prepare for the financial year consolidated statements that comply with sections 380, 381 and 383.

(3) Subsection (3A) applies— (Amended 35 of 2018 s. 42)

  • (a) if the company is a wholly owned subsidiary of another body corporate at the end of the financial year;
  • (b) if—
    • (i) the company is a partially owned subsidiary of another body corporate at the end of the financial year;
    • (ii) at least 6 months before the end of the financial year, the directors notify the members in writing of the directors’ intention not to prepare consolidated statements for the financial year, and the notification does not relate to any other financial year; and
    • (iii) as at a date falling 3 months before the end of the financial year, no member has responded to the notification by giving the directors a written request for the preparation of consolidated statements for the financial year; or
  • (c) if—
    • (i) the company is a partially owned subsidiary of another body corporate at the end of the financial year; and
    • (ii) all members agree in writing before the end of the financial year that consolidated statements will not be prepared for the financial year, and the agreement does not relate to any other financial year. (Added 35 of 2018 s. 42)

(3A) If this subsection applies because of—

  • (a) subsection (3)(a)—the directors must prepare for the financial year—
    • (i) statements that comply with sections 380 and 383; or
    • (ii) consolidated statements that comply with sections 380, 381 and 383; or
  • (b) subsection (3)(b) or (c)—the directors must prepare for the financial year statements that comply with sections 380 and 383. (Added 35 of 2018 s. 42)

[Version before (Amended 35 of 2018 s. 42), superseded now]

(1) A company’s directors must prepare for each financial year statements that comply with sections 380 and 383.

(2) Despite subsection (1), if the company is a holding company at the end of the financial year, the directors must instead prepare for the financial year consolidated statements that comply with sections 380, 381 and 383.

(3) Subsection (2) does not apply—

  • (a) if the company is a wholly owned subsidiary of another body corporate in the financial year; or
  • (b) if—
    • (i) the company is a partially owned subsidiary of another body corporate in the financial year;
    • (ii) at least 6 months before the end of the financial year, the directors notify the members in writing of the directors’ intention not to prepare consolidated statements for the financial year, and the notification does not relate to any other financial year; and
    • (iii) as at a date falling 3 months before the end of the financial year, no member has responded to the notification by giving the directors a written request for the preparation of consolidated statements for the financial year.
answered by (9.9k points)
edited by
0 votes

P.S.: 

  1. as no resolution of shareholders required for the procedures, the form of memo is sufficient for independent third party's records and no need to fill it to CR. An insulated memo should be prepared for each year's audit, etc.
  2. we are of the opinion that requirements about consolidation on accounting standards are consistent with the Company Ordinance (Cap. 622).
answered by (9.9k points)
0 votes

Memorandum for exclusion of subsidies/y from consolidation by applying SME-FRS Section 19.3:

[HJK LIMITED]

[Company Address]

Memorandum

for 

exclusion of subsidiaries/y 

from

consolidation of financial statements

Date:

Director [ABC] and Director [PKL] of [HJK LIMITED] (“the Company”), at at least 1 months before the approval of the financial year ended DD MMMM YYYY (“the financial year”), has/have notified the members [(name 1), (name 2) (listing all members)] of the Company in writing for the directors' intention of exclusion of subsidiaries/y from consolidation for the financial year.

The subsidiary(ies) [list of all subsidiary to be excluded] was/were excluded from consolidation.

the directors’ reasons for believing that the inclusion of the subsidiary or subsidiaries in the consolidated financial statements may involve expense and delay out of proportion to the value to the shareholders were:

  • [The subsidiary(ies) has/have not begun any business];
  • [Member(s) of the Company could get financial results of the subsidiary(ies) from the subsidiary(ies) directly]

No member objected this exclusion.

Signed by:

 

 

__________________         __________________

Director [ABC]                     Director [PKL]

 

 

__________________         __________________

Member [name 1]                    Member [name 2] 

answered by (9.9k points)
edited by

The notice of no inclusion in consolidation for subsidiary or subsidiaries should be given to members ONE MONTH BEFORE the approval of the relevant financial statements:

Reference: Alert No. 9 Updates on financial reporting and auditing (botton of page 3 andtop of page 4): 

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