ACT No. XXXI of 2015 AN ACT to introduce amendments to the Companies Act and to implement Directive 2013/34/EU.

I assent.

M ARIE L OUISE

(L.S.)

C OLEIRO P RECA

President

6th November, 2015

ACT No. XXXI of 2015

AN ACT to introduce amendments to the Companies Act and to

implement Directive 2013/34/EU.

BE IT ENACTED by the President, by and with the advice and

consent of the House of Representatives, in this present Parliament

assembled, and by the authority of the same, as follows:-

(1) The short title of this Act is the Companies

(Amendment) Act, 2015, and this Act shall be read and construed as

one with the Companies Act, hereinafter referred to as "the principal

Act".

(2) The provisions of this Act shall come into force and are to

apply to annual accounts for accounting periods beginning on or after

1 January 2016, except for the provisions of articles 6 and 20 which

shall come into force on 1 January 2016.

The table entitled "Arrangement of Act" appearing

immediately before article 1 of the principal Act shall be amended as

follows

(a) for the title of the Third Schedule there shall be

substituted the words "Additional Provisions Applicable to the

Annual Financial Accounts of Large Undertakings, Medium-

Sized Undertakings and Certain Other Undertakings, where

applicable and Additional Provisions Applicable to

Consolidated Accounts"; and

(b)

for the title of the Fourth Schedule there shall be

substituted the words "Report on Payments to governments".

Article 2 of the principal Act shall be amended as follows

Amendment of

article 2 of the

principal Act.

(a)

sub-article (1) thereof shall be amended as follows

(i) immediately

after

the

definition

"approval", there shall be added the following new

definition

" "associated undertaking" means an under-

taking in which another undertaking has a

participating interest, and over whose operating

and financial policies that other undertaking

exercises significant influence. An undertaking is

presumed to exercise a significant influence over

another undertaking where it has 20% or more of

the shareholders’ or members’ voting rights in that

other undertaking;";

(ii) the

definition

"financial

holding

company" shall be deleted;

(iii) in the definition "group company",

immediately after the words "shall be construed

accordingly" there shall be added "as well as

meaning a parent undertaking and all its subsidiary

undertakings";

(iv) for the definition "participating interest"

there shall be substituted the following

" "participating interest" means rights in the

capital of other undertakings, whether or not

represented by certificates, which, by creating a

durable link with those undertakings, are intended

to contribute to the activities of the undertaking

which holds those rights. The holding of part of the

capital of another undertaking is presumed to

constitute a participating interest where it exceeds

twenty per cent of the said capital. An interest in

shares includes an interest which is convertible into

an interest in shares and an option to acquire an

interest in shares. Interests in shares held by

subsidiary undertakings or held by third parties on

behalf of the company or its subsidiary

undertakings shall be deemed to be held by the

company;";

(v) immediately after the definition "public

company" there shall be added the following new

definition

" "public-interest entities" means under-

takings or entities as defined in article 2(1) of

the Accountancy Profession Act;";

(b)

sub-article (2) thereof shall be amended as follows

(i) in sub-paragraph (iii) of paragraph (a)

thereof the words "of which it is a member" shall

be deleted;

(ii) in sub-paragraph (v) of paragraph (a)

thereof, immediately after the words "in another

undertaking and" there shall be added the words

"has the power to exercise, or";

(iii) at the end of paragraph (a) thereof,

immediately after the words "and "parent

undertaking" shall be construed accordingly" there

shall be added the words "and shall include an

undertaking which controls one or more subsidiary

undertakings"; and

(iv) paragraph (c) thereof shall be substituted

by the following

"(c) The term "subsidiary undertaking" shall

be construed in accordance with paragraph (a) and

shall include an undertaking controlled by a parent

undertaking including any subsidiary undertaking

of an ultimate parent undertaking.".

Article 3A of the principal Act shall be amended as

(a)

paragraphs (a) and (c) thereof shall be deleted;

(b) paragraphs (b), (d), (e), (f), (g), (h), (i), (j), (k), (l),

(m), (n) and (o) thereof shall be renumbered as paragraphs (a),

(b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (l) and (m) respectively;

(c)

paragraphs (p) and (q) thereof shall be renumbered

as paragraphs (o) and (p) respectively; and

(d)

immediately after paragraph (m) thereof there shall

be added the following new paragraph

"(n) Directive 2013/34/EU of the European

Parliament and of the Council of 26 June 2013 on

the annual financial statements, consolidated

financial statements and related reports of certain

types of undertakings, amending Directive 2006/

43/EC of the European Parliament and of the

Council and repealing Council Directives 78/660/

EEC and 83/349/EEC hereinafter in this Act

referred to as the "Accounting Directive;".

Article 167 of the principal Act shall be amended as Amendment of

article 167 of

the principal

Act.

(a) in sub-article (1) thereof, immediately after the

words "any other financial statements" there shall be added the

words "and other information"; and immediately after the words

"These documents shall constitute a composite whole." there

shall be added the words "The name, registration number, legal

form and registered office address of the company and where

appropriate, the fact that the company is being wound up shall

be indicated in these accounts.";

(b) in sub-article (2) thereof, immediately after the

words "shall be drawn up" there shall be added the word

"clearly"; and for the words "accounting principles and

practice:" there shall be substituted the words "accounting

principles and practice and the provisions of this Act including,

where applicable, the requirements of the Third Schedule.";

(c)

the proviso to sub-article (2) thereof shall be

deleted; and

(d) sub-article (3) thereof shall be substituted by the

"(3) The individual accounts shall give a true

and fair view of the undertaking’s assets, liabilities,

financial position and profit or loss. Where the

application of this Act would not be sufficient to

give a true and fair view of the undertaking’s

assets, liabilities, financial position and profit or

loss, such additional information as is necessary to

comply with that requirement shall be given in the

notes to the financial statements.".

Article 168 of the principal Act shall be amended as

(a) the marginal note thereof shall be substituted by the

following "Annual accounts of certain types of undertakings.";

(b) sub-article (1) thereof shall be substituted by the

"(1) The provisions of this Chapter and the

Schedules enacted under it shall apply only to the

extent that they are not inconsistent with, or

contradicted by provisions on the financial

reporting of certain types of undertakings or

provisions regarding the distribution of an

undertaking’s capital which are laid down in other

legislative acts in force in Malta.";

(c)

sub-article (3) thereof shall be substituted by the

"(3) Insurance and reinsurance undertakings

shall comply with any Insurance Rules made under

the Insurance Business Act in respect of their

annual accounts."; and

(d) in sub-article (4) thereof, the words "and of financial

holdings companies" shall be deleted, and for the words "and

Fourth Schedules" there shall be substituted the word

"Schedule".

In paragraph (b) of sub-article (4) of article 170 of the

principal Act, for the words "prepared by the parent company.", there

shall be substituted the words "prepared by the parent company; or"

and immediately thereafter there shall be added the following new

"(c) in extremely rare cases, where the information

necessary for the preparation of consolidated accounts in

accordance with the provisions of this Act cannot be obtained

without disproportionate expense or undue delay.".

Sub-article (2) of article 171 of the principal Act shall be

substituted by the following

"(2) Without prejudice to articles 170, 173 and 174, and

to the provisions of article 2(2) and the Ninth Schedule, insofar

as may be relevant to articles 170, 173 and 174, the consolidated

accounts shall be drawn up in accordance with generally

accepted accounting principles and practice and the provisions

of this Act including, where applicable, the requirements of the

Third Schedule

Provided that the disclosure in indent (ii) of sub-

paragraph (1) of paragraph 3 of Part I of the Third Schedule

shall apply to the consolidated accounts as if the undertakings

included in the consolidation were a single company and the

disclosures in indents (iv) and (vi) of sub-paragraph (1) of

paragraph 2 of Part II of the Third Schedule shall apply to the

consolidated accounts.".

Article 172 of the principal Act shall be substituted by the Substitution of

article 172 of

following

the principal

Act.

" Responsibility

172. The directors of a company, acting

and liability for

within the competences assigned to them by law,

drawing up and

have collective responsibility for ensuring that

publishing the

financial

(a)

the annual financial statements,

statements and

the directors’

the directors’ report and, when provided

report.

separately, the corporate governance

statement; and

(b) the

consolidated

financial

statements, consolidated directors’ reports,

and when provided separately, the

consolidated

corporate

governance

statement,

are drawn up and published in accordance with

the requirements of this Act.".

Article 173 of the principal Act shall be amended as Amendment of

article 173 of

follows

the principal

Act.

(a)

in sub-article (1) thereof, for the words "laid down in

article 185(6)" there shall be substituted the words "laid down in

article 185(5)";

(b) in the proviso to sub-article (1) thereof, for the

words ''official listing'' there shall be substituted the word

''trading'' and for the words "in a non-Member State or non-EEA

State." there shall be substituted the words "in a non-Member

State or non-EEA State:", and immediately thereafter there shall

be added the following new proviso

"Provided further that none of the group

companies is a public-interest entity."; and

(c) sub-article (2) thereof shall be deleted, and sub-

article (1) thereof shall become the new article 173.

Article 174 of the principal Act shall be amended as

(a) in paragraph (d) of sub-article (2) thereof,

immediately after the words "the name" there shall be added the

words "and registered office";

(b) in sub-article (3) thereof, for the words "any of

whose securities" there shall be substituted the words "any of

whose transferable securities"; and for the words "official

listing" there shall be substituted the word "trading"; and

(c)

sub-article (6) thereof shall be deleted.

Article 177 of the principal Act shall be amended as

(a) in sub-article (2) thereof, for the words "and of their

position at the end of that period." there shall be substituted the

following

"and of their position at the end of that period together

with a description of the principal risks and

uncertainties that they face.

The review shall be a balanced and comprehensive

analysis of the development and performance of the

undertaking’s business and of its position, consistent

with the size and complexity of the business.

To the extent necessary for an understanding of the

undertaking’s development, performance or position,

the analysis shall include both financial and, where

appropriate, non-financial key performance indicators

relevant to the particular business, including

information relating to environmental and employee

matters. In providing the analysis, the directors’ report

shall, where appropriate, include references to, and

additional explanations of, amounts reported in the

annual financial statements."; and

(b) immediately after sub-article (4) thereof there shall

be added the following new sub-articles

"(5) The consolidated directors’ report shall,

as a minimum, in addition to any other information

required under other provisions of this Act, set out

the information required by this article and the

Sixth Schedule, taking account of the essential

adjustments resulting from the particular

characteristics of a consolidated directors’ report as

compared to a directors’ report in a way which

facilitates the assessment of the position of the

undertakings included in the consolidation taken as

a whole.

(6) Where a consolidated directors’ report is

required in addition to the directors’ report, the two

reports may be presented as a single report.".

Article 179 of the principal Act shall be amended as Amendment of

article 179 of

the principal

Act.

(a) in sub-article (3) thereof, immediately after the

words "they shall state that fact in their report." there shall be

added the following new paragraph

"The auditors shall also

(a) express an opinion on whether the

directors’ report has been prepared in accordance

with the applicable legal requirements;

(b) state whether, in the light of the

knowledge and understanding of the undertaking

and its environment obtained in the course of the

audit, they have identified material misstatements

in the directors’ report, and shall give an indication

of the nature of any such misstatements.";

(b) sub-article (4) thereof shall be substituted by the

"(4) The auditors’ report shall be signed and

dated by the auditor. Where an audit firm carries

out the statutory audit, the audit report shall bear

the signature of at least the auditor(s) carrying out

the statutory audit on behalf of the audit firm.";

(c)

sub-article (12) thereof shall be deleted; and

(d) sub-article (13) thereof shall be re-numbered as sub-

article (12) and immediately after sub-article (12) thereof there

shall be added the following new sub-article

"(13) The audit report on the consolidated

financial statements shall comply with the

requirements set out in this article. In reporting on

the consistency of the directors’ report and the

financial statements the auditor or audit firm shall

consider the consolidated financial statements and

the consolidated directors’ report. Where the

annual financial statements of the parent

undertaking are attached to the consolidated

financial statements, the audit reports required by

this article may be combined.".

Article 182 of the principal Act shall be amended as

(a)

sub-article (3) thereof shall be deleted;

(b) sub-articles (4) and (5) thereof shall be renumbered

as sub-articles (3) and (4) respectively; and

(c)

in paragraph (a) of sub-article (4) thereof, as re-

numbered, for the words "subarticles (2) to (4)" there shall be

substituted the words "sub-articles (2) and (3)".

Article 183 of the principal Act shall be amended as

(a)

sub-article (2) thereof shall be substituted by the

"(2) A company which qualifies as a small

company in terms of article 185(1) need not deliver

to the Registrar the directors’ report

Provided that where the company which

qualifies as a small company is a private company

having the status of an exempt company, it need

not deliver to the Registrar the directors’ report and

the profit and loss account

Provided further that where the exempt

company also qualifies in terms of article 185(2), it

need also not deliver to the Registrar an auditors’

report.";

(b)

sub-article (3) thereof shall be substituted by the

following

"(3) Where the directors of a company take

advantage of any of the exemptions conferred by

sub-article (2), a declaration on the prescribed form

signed by the same directors who signed the

balance sheet shall, together with the annual

accounts, be delivered to the Registrar confirming

that the company qualifies for the exemption or

exemptions.";

(c)

sub-articles (4) to (7) thereof shall be deleted; and

(d) sub-articles (8), (9) and (10) thereof shall be

renumbered as sub-articles (4), (5) and (6) respectively.

Article 185 of the principal Act shall be amended as Amendment of

article 185 of

the principal

Act.

(a)

the marginal note thereof shall be substituted by the

following: "Exemptions for certain small companies.";

(b) sub-article (1) thereof shall be substituted by the

following

"(1) Companies which on their balance sheet

dates do not exceed the limits of two of the three

following criteria

-

balance sheet total: four million euro

(4,000,000);

-

turnover: eight million euro (8,000,000);

-

average number of employees during the

accounting period: fifty (50);

shall in this Chapter be designated as "small companies"

and shall be exempted from the requirement imposed by

article 177. When advantage is taken of this exemption the

information required in paragraph 3 of the Sixth Schedule

regarding the acquisition by a company of its own shares

shall be given in the notes to the accounts.";

(c) sub-article (2) thereof shall be substituted by the

following

"(2) Private

companies

which

on

their

balance sheet dates do not exceed the limits of two

of the three following criteria

-

balance sheet total: forty-six thousand six

hundred euro (46,600);

-

turnover: ninety-three thousand euro

(93,000);

-

average number of employees during the

accounting period: two (2);

shall be exempted from the provisions of Chapter IX of

Title I of Part V and from the requirements imposed by

article 179 and the Third Schedule.";

(d)

sub-article (3) thereof shall be deleted;

(e)

sub-article (4) thereof shall be renumbered as sub-

(f)

in sub-article (3) thereof, as re-numbered, for the

words "indicated in subarticle (1)" there shall be substituted the

words "indicated in sub-articles (1) and (2); and for the words

"that subarticle" there shall be substituted the words "those sub-

(g) immediately after sub-article (3) thereof, as re-

numbered, there shall be added the following new sub-article

"(4) The balance sheet total referred to in this

article shall be calculated by taking the amount of

total assets shown in the balance sheet drawn up in

accordance with generally accepted accounting

principles and practice.";

(h) sub-article (5) thereof shall be substituted by the

"(5) A parent company shall not be treated as

qualifying as a small company in relation to an

accounting period unless the group of which it is

parent qualifies as a small group. A group qualifies

as a small group in relation to an accounting period

if it consists of parent and subsidiary undertakings

to be included in a consolidation and which on a

consolidation basis do not exceed the limits of two

of the three following criteria on the balance sheet

date of the parent undertaking

- aggregate balance sheet total: four

million euro (4,000,000) net or four million eight

hundred thousand euro (4,800,000) gross;

- aggregate turnover: eight million euro

(8,000,000) net or nine million and six hundred

thousand euro (9,600,000) gross

-

aggregate number of employees: fifty

(50)

Provided that the provisions of this sub-

article shall not apply to a parent company which is

exempted from the requirement to prepare

consolidated accounts in accordance with article

174.";

(i)

sub-article (6) thereof shall be substituted by the

"(6) The provisions of sub-article (3) shall

apply to parent companies as though the reference

to company were a reference to parent company.";

(j)

sub-article (7) thereof shall be deleted;

(k) sub-article (8) thereof shall be renumbered as sub-

article (7), and for the words "with subarticles (1) and (6)" there

shall be substituted the words "with sub-articles (1), (2) and

(l)

sub-article (9) thereof shall be renumbered as sub-

(m) immediately after sub-article (8) thereof, as re-

numbered, there shall be added the following new sub-article

"(9) When

calculating

the

thresholds

mentioned in this article, undertakings shall

include income from other sources for which "net

turnover" is not relevant.";

(n)

sub-articles (10) and (11) thereof shall be deleted;

(o)

sub-article (12) thereof shall be renumbered as sub-

article (10).

Article 193 of the principal Act shall be amended as

(a) in the marginal note thereof, the word "public" shall

be deleted;

(b) in paragraph (c) of sub-article (3) thereof, for the

words "or reorganisation of capital duly made; and" there shall

be substituted the words "or reorganisation of capital duly

made;";

(c)

paragraph (d) of sub-article (3) thereof shall be re-

numbered as paragraph (f); and

(d) immediately after paragraph (c) thereof there shall

be added the following new paragraphs

"(d) the difference by which the profit

attributable to the participating interest and

recognised in the profit and loss account exceeds

the amount of dividends already received or the

payment of which can be claimed;

(e) the amount of development costs

included under ‘Assets’ which have not been

completely written off; and".

Sub-article (2) of article 196 of the principal Act shall be

substituted by the following

"(2) The provisions of sub-article (1) shall not apply to

any part of that amount representing an unrealised profit made

on revaluation of those costs.".

Immediately after article 213 of the principal Act there

shall be added the following new article

" Undertakings

213A. (1)Large undertakings, as defined in

required to

the Third Schedule, and all public-interest entities

report on

active in the extractive industry or the logging of

payments to

governments.

primary forests shall prepare and make public a

report on payments made to governments on an

annual basis.

(2) That obligation shall not apply to any

undertaking governed by the law of a Member

State which is a subsidiary or parent undertaking,

where both of the following conditions are

fulfilled

(a)

the parent undertaking is subject

to the laws of a Member State; and

(b) the payments to governments

made by the undertaking are included in the

consolidated report on payments to

governments drawn up by that parent

undertaking in accordance with paragraph 3

of the Fourth Schedule.

(3) All undertakings which qualify to

make the report mentioned in sub-article (1) shall

abide by the requirements provided for in the

Fourth Schedule.".

Sub-article (1) of article 329B of the principal Act shall be Amendment of

article 329B of

amended as follows

the principal

Act.

(a)

paragraph (d) thereof shall be deleted; and

(b) paragraphs (e) and (f) thereof shall be re-numbered

as paragraphs (d) and (e) respectively.

Article 387 of the principal Act shall be amended as Amendment of

article 387 of

follows

the principal

Act.

(a) in sub-article (1) thereof, for the words "forty-two

days from the end of the period referred to in article 182(2) and

(3)" there shall be substituted the words "within twelve months

from the end of every accounting period";

(b)

in paragraph (a) of sub-article (2) thereof, for the

words "the Third Schedule" there shall be substituted the words

"generally accepted accounting principles and practice";

(c)

in paragraph (b) of sub-article (2) thereof, for the

words "the Third Schedule" there shall be substituted the words

"generally accepted accounting principles and practice''; and

(d) in paragraph (c) of sub-article (2) thereof, for the

words "the Third Schedule" there shall be substituted the words

"generally accepted accounting principles and practice".

Sub-article (1) of article 425 of the principal Act shall be

amended as follows

(a)

paragraphs (n) and (o) thereof shall be re-numbered

as paragraphs (o) and (p) respectively; and

(b) immediately after paragraph (m) thereof there shall

be added the following new paragraph

"(n) require undertakings other than small

undertakings to disclose information in their

annual financial statements which is additional to

that required pursuant to this Act;".

The Third Schedule to the principal Act shall be

substituted by the following

"THIRD SCHEDULE

(Articles 167 and 171)

PART I

ADDITIONAL PROVISIONS APPLICABLE TO THE ANNUAL

FINANCIAL ACCOUNTS OF LARGE UNDERTAKINGS,

MEDIUM-SIZED UNDERTAKINGS AND CERTAIN OTHER

UNDERTAKINGS, WHERE APPLICABLE

1. For the purpose of Chapter X of Title I of Part V and this

Schedule, the following definitions shall apply

"large groups" means groups consisting of parent and subsidiary

undertakings to be included in a consolidation and which, on a

consolidated basis, exceed the limits of at least two of the three

following criteria on the balance sheet date of the parent undertaking

(i)

balance sheet total: EUR 20 000 000 computed net,

or €24,000,000 computed gross;

(ii) net turnover: EUR 40 000 000 computed net, or

€48,000,000 computed gross;

(iii) average number of employees during the financial

year: 250;

"large undertakings" means undertakings which on their balance

sheet dates exceed at least two of the three following criteria

(i)

balance sheet total: EUR 20 000 000;

(ii)

net turnover: EUR 40 000 000;

(iii) average number of employees during the financial

year: 250;

"medium-sized groups" means groups which are not small

groups, which consist of parent and subsidiary undertakings to be

included in a consolidation and which, on a consolidated basis, do not

exceed the limits of at least two of the three following criteria on the

balance sheet date of the parent undertaking

(i)

balance sheet total: EUR 20 000 000 computed net,

or €24,000,000 computed gross;

(ii) net turnover: EUR 40 000 000 computed net, or

€48,000,000 computed gross;

(iii) average number of employees during the financial

year: 250;

"medium-sized undertakings" means undertakings which are not

small companies, as defined in article 185(1), and which on their

balance sheet dates do not exceed the limits of at least two of the three

following criteria

(i)

balance sheet total: EUR 20 000 000;

(ii)

net turnover: EUR 40 000 000;

(iii) average number of employees during the financial

year: 250.

Matters applicable to medium-sized and large undertakings

2. (1) Intangible assets shall be written off over the useful

economic life of the intangible asset.

In exceptional cases where the useful life of goodwill and

development costs cannot be reliably estimated, such assets shall be

written off within a maximum period of 10 years. An explanation of

the period over which goodwill is written off shall be provided within

the notes to the financial statements.

(2) Where an asset or liability relates to more than one layout

item, its relationship to the other item or items shall be disclosed

either under the item where it appears or in the notes to the accounts,

if such disclosure is essential to the comprehension of the individual

accounts.

Additional disclosures for medium-sized and large undertakings

and public-interest entities

3. In the notes to the financial statements public-interest

entities, large undertakings and medium-sized undertakings shall, in

addition to the information required under other provisions of this Act

and generally accepted accounting principles and practice, disclose

information in respect of

(i)

the amount and nature of individual items of income

or expenditure which are of exceptional size or incidence;

(ii) the average number of employees during the

financial year broken down by categories and, if they are not

disclosed separately in the profit and loss account, the staff

costs relating to the accounting period broken down between

wages and salaries, social security costs and pension costs.

4. In the notes to the financial statements, medium-sized and

large undertakings and public-interest entities shall, in addition to the

information required under this Schedule and any other provisions of

this Act, disclose information in respect of the following matters

(a)

the existence of any participation certificates,

convertible debentures, warrants, options or similar securities or

rights, with an indication of their number and the rights they

confer;

(b) the name and registered office of each of the

undertakings in which the undertaking, either itself or through a

person acting in his own name but on the undertaking’s behalf,

holds a participating interest, showing the proportion of the

capital held, the amount of capital and reserves, and the profit or

loss for the latest financial year of the undertaking concerned

for which financial statements have been adopted; the

information concerning capital and reserve and the profit or loss

may be omitted where the undertaking concerned does not

publish its balance sheet and is not controlled by the

undertaking;

(c)

the name, the head or registered office and the legal

form of each of the undertakings of which the undertaking is a

member having unlimited liability;

(d) the name and registered office of the undertaking

which draws up the consolidated financial statements of the

largest body of undertakings of which the undertaking forms

part as a subsidiary undertaking;

(e)

the name and registered office of the undertaking

which draws up the consolidated statements of the smallest

body of undertakings of which the undertaking forms part as a

subsidiary undertaking and which is also included in the body of

undertakings referred to in sub-paragraph (d);

(f)

the place where copies of the consolidated financial

statements referred to in sub-paragraphs (c) and (d) may be

obtained, provided that they are available;

(g) the nature and business purpose of the undertaking’s

arrangements that are not included in the balance sheet and the

financial impact on the undertaking of those arrangements,

provided that the risks or benefits arising from such

arrangements are material and insofar as the disclosure of such

risks or benefits is necessary for the purposes of assessing the

financial position of the undertaking.

Additional disclosures applicable to large undertakings and

public-interest entities

5. In the notes to the financial statements, large undertakings

and public-interest entities shall, in addition to the information

required under this Schedule and any other provisions of this Act,

disclose information in respect of the total fees for the financial year

charged by each auditor or audit firm for the statutory audit of the

annual financial statements, and the total fees charged by each auditor

or audit firm for other assurance services, for tax advisory services

and for other non-audit services

Provided that this requirement shall not apply to the annual

financial statements of an undertaking where that undertaking is

included within the consolidated financial statements required to be

drawn up under article 170, provided, however, that such information

shall be given in the notes to the consolidated financial statements.

PART II

ADDITIONAL PROVISIONS APPLICABLE

TO CONSOLIDATED ACCOUNTS

The preparation of consolidated financial statements

1. An undertaking which draws up consolidated financial

statements shall apply the same measurement bases as are applied in

its annual financial statements. However, other measurement bases in

accordance with generally accepted accounting principles and

practice may be used in consolidated financial statements. Where an

undertaking uses such other measurement bases, that fact shall be

disclosed in the notes to the consolidated financial statements and

reasons given.

The notes to the consolidated financial statements

2. The notes to the consolidated financial statements of large

groups and medium-sized groups shall set out the information

required by Part 1 of this Third Schedule, in addition to any other

information required under other provisions of this Act, in a way

which facilitates the assessment of the financial position of the

undertakings included in the consolidation taken as a whole, taking

account of the essential adjustments resulting from the particular

characteristics of consolidated statements as compared to annual

financial statements, including the following

in disclosing the amounts of emoluments and advances and

credits granted to members of the administrative, managerial

and supervisory bodies, only amounts granted by the parent

undertakings to members of the administrative, managerial and

supervisory bodies of the parent undertaking shall be disclosed.

3. The notes to the consolidated financial statements shall, in

addition to the information required under this Act, set out the

following information

(a) in relation to

undertakings included in the

consolidation

(i) the names and registered offices of those

undertakings;

(ii) the proportion of the capital held in those

undertakings, other than the parent undertaking, by

the undertakings included in the consolidation or

by persons acting in their own names but on behalf

of those undertakings, and

(iii) information as to which of the conditions

referred to in sub-articles (2), (3) and (8) of article

2 of this Act following the application of sub-

articles (4), (5) and (6) of the said article 2 has

formed the basis on which the consolidation has

been carried out. This disclosure may, however, be

omitted where consolidation has been carried out

on the basis of paragraph (a) of sub-article (2)(a)(i)

of article 2 of this Act and where the proportion of

the capital and the proportion of the voting rights

held are the same;

(b) The information set out in sub-paragraph (a) of this

paragraph shall be given insofar as it is applicable in respect of

undertakings excluded from a consolidation on the basis that the

effect of their inclusion in the consolidation would be

immaterial pursuant to the provisions of sub-article (3) of article

170, and an explanation must be given for the exclusion of the

undertakings referred to in sub-article (4) of that article;

(c)

the names and registered offices of associated

undertakings included in the consolidation and the proportion of

their capital held by undertakings included in the consolidation

or by persons acting in their own names but on behalf of those

undertakings; and

(d) in relation to each of the undertakings, other than

those referred to in sub-paragraphs (a) and (b), in which

undertakings included in the consolidation, either themselves or

through persons acting in their own names but on behalf of

those undertakings, hold a participating interest

(i) the name and registered offices of those

undertakings;

(ii) the proportion of the capital held;

(iii) the amount of the capital and reserves,

and the profit or loss for the latest financial year of

the undertaking concerned for which financial

statements have been adopted.

The information concerning capital and reserves and the profit

or loss may also be omitted where the undertaking concerned does not

publish its balance sheet.

4. The information required by paragraph 3(a) to (d) may take

the form of a statement filed with the Registrar. The filing of such a

statement shall be disclosed in the notes to the consolidated financial

statements. Such information may be omitted when its nature is such

that its disclosure would be seriously prejudicial to any of the

undertakings to which it relates and the Registrar agrees that the

information need not be disclosed. Any such omission shall be

disclosed in the notes to the consolidated financial statements.".

The Fourth Schedule to the principal Act shall be

substituted by the following

"FOURTH SCHEDULE

(Article 213A)

REPORT ON PAYMENTS TO GOVERNMENTS

Definitions relating to reporting on payments to governments

1. For the purpose of this Schedule, the following definitions

shall apply

"undertaking active in the extractive industry" means an

undertaking with any activity involving the exploration, prospection,

discovery, development, and extraction of minerals, oil, natural gas

deposits or other materials, within the economic activities listed in

Section B, Divisions 05 to 08 of Annex 1 to Regulation (EC) No.

1893/2006 of the European Parliament and of the Council of 20

December 2006 establishing the statistical classification of economic

activities NACE Revision 2;

"undertaking active in the logging of primary forests" means an

undertaking with activities as referred to in Section A, Division 02,

Group 02.2 of Annex I to Regulation (EC) No. 1893/2006, in primary

forests;

"government" means any national, regional or local authority of

a Member State or of a third country. It includes a department, agency

or undertaking controlled by that authority;

"project" means the operational activities that are governed by a

single contract, licence, lease, concession or similar legal agreements

and form the basis for payment liabilities with a government.

Nonetheless, if multiple such agreements are substantially

interconnected, this shall be considered a project;

"payment" means an amount paid, whether in money or in kind,

for activities, as described in the definitions "undertaking active in the

extractive industry" and "undertaking active in the logging of primary

forests", of the following types

(a)

production entitlements;

(b) taxes levied on the income, production or profits of

companies, excluding taxes levied on consumption such as

value added taxes, personal income taxes or sales taxes;

(c)

royalties;

(d)

dividends;

(e)

signature, discovery and production bonuses;

(f)

licence fees, rental fees, entry fees and other

considerations for licences and, or concessions; and

(g)

payments for infrastructure improvements;

"large undertakings" and "public-interest entities" shall have the

same meaning as defined in the Third Schedule and article 2 of this

Act respectively.

Contents of the report

2. (1) Any payment, whether made as a single payment or

as a series of related payments, need not be taken into account in the

report if it is below EUR 100 000 within a financial year.

(2) The report shall disclose the following information in

relation to activities as described in the definitions "undertaking

active in the extractive industry" and "undertaking active in the

logging of primary forests" in respect of the relevant financial year

(a) the total amount of payments made to each

government;

(b) the total amount per type of payment as specified in

paragraphs (a) to (g) of the definition "payment" in paragraph 1

of this Schedule made to each government;

(c)

where those payments have been attributed to a

specific project, the total amount per type of payment as

specified in paragraphs (a) to (g) of the definition "payment" in

paragraph 1 of this Schedule, made for each such project and the

total amount of payments for each such project.

Payments made by the undertaking in respect of obligations

imposed at entity level may be disclosed at the entity level rather than

at project level.

(3) Where payments in kind are made to a government, they

shall be reported in value and, where applicable, in volume.

Supporting notes shall be provided to explain how their value has

been determined.

The disclosure of the payments referred to in this Schedule shall

reflect the substance, rather than the form, of the payment or activity

concerned. Payments and activities may not be artificially split or

aggregated to avoid the application of this requirement.

Consolidated report on payments to governments

3. (1) Any large undertaking or any public-interest entity

active in the extractive industry or the logging of primary forests shall

draw up a consolidated report on payments to governments in

accordance with this Schedule if that parent undertaking is under the

obligation to prepare consolidated financial statements as laid down

in article 170 of the Act.

A parent undertaking is considered to be active in the extractive

industry or the logging of primary forests if any of its subsidiary

undertakings are active in the extractive industry or the logging of

primary forests.

The consolidated report shall only include payments resulting

from extractive operations and, or operations relating to the logging

of primary forests.

(2) The obligation to draw up the consolidated report referred

to in sub-paragraph (1) shall not apply to

(a) a parent undertaking of a small group, as defined in

article 185(5), except where any affiliated undertaking is a

public-interest entity;

(b) a parent undertaking of a medium-sized group, as

defined in the Third Schedule, except where any group

undertaking is a public-interest entity; and

(c)

a parent undertaking governed by the law of a

Member State which is also a subsidiary undertaking, if its own

parent undertaking is governed by the law of a Member State.

(3) An undertaking, including a public-interest entity, need not

be included in a consolidated report on payments to governments

where at least one of the following conditions is fulfilled

(a)

severe long-term restrictions substantially hinder the

parent undertaking in the exercise of its rights over the assets or

management of that undertaking;

(b) extremely rare cases where the information

necessary for the preparation of the consolidated report on

payments to governments in accordance with this Schedule

cannot be obtained without disproportionate expense or undue

delay; and

(c)

the shares of that undertaking are held exclusively

with a view to their subsequent resale.

The above exemptions shall apply only if they are also used for

the purposes of the consolidated financial statements.

Publication

4. (1) The report referred to in article 213A and this

Schedule and the consolidated report referred to in paragraph 3 of this

Schedule on payments to governments shall be delivered to the

Registrar for registration within the period allowed by article 183.

(2) The directors shall have responsibility for ensuring that, to

the best of their knowledge and ability, the report on payments to

governments is drawn up and published in accordance with the

requirements of this Schedule.

Equivalence criteria

5. Undertakings referred to in article 213A and paragraph 3

of this Schedule that prepare and make public a report complying

with third-country reporting requirements assessed, as equivalent to

the requirements of this Schedule are exempt from the requirements

of this Schedule except for the obligation to publish this report as laid

down in paragraph 4(1) of this Schedule.".

The Sixth Schedule to the principal Act shall be amended Amendment of

the Sixth

as follows

Schedule to the

principal Act.

(a)

in sub-paragraph (b) of paragraph 3 thereof,

immediately after the words "and the reasons for their purchase"

there shall be added the words "or, in the absence of a nominal

value, the accountable par of the shares acquired and disposed

of during the financial year and the proportion of the subscribed

capital which they represent";

(b) sub-paragraphs (c) to (h) of paragraph 3 thereof

shall be deleted; and

(c)

immediately after paragraph (b) thereof there shall

be added the following new paragraphs

"(c) in the case of acquisition or disposal for a

value, the consideration of the shares;

(d) the number and nominal value of all the

shares acquired and held by the company and the

proportion of the subscribed capital which they

represent;

(e) in relation to the undertaking’s use of

financial instruments and where material for the

assessment of its assets, liabilities, financial

position and profit or loss

(i) the

undertaking’s

financial

risk

management objectives and policies, including its

policy for hedging each major type of forecasted

transaction for which hedge accounting is used;

and

(ii) the undertaking’s exposure to price risk,

credit risk, liquidity risk and cash flow risk.";

(d) paragraph 4 thereof shall be substituted by the

"4. Small undertakings shall be exempted

from the obligation to prepare directors’ reports,

provided that they shall provide the information

referred to in paragraph 2 and paragraph 3(a) to (c)

of this Schedule concerning the acquisition by an

undertaking of its own shares to be given in the

notes to the financial statements."; and

(e)

immediately after paragraph 4 thereof there shall be

added the following

"5. Medium-sized undertakings shall be

exempted from the obligation set out in the third

paragraph of sub-article (2) of article 177 insofar as

it relates to non-financial information.

6. Where a consolidated directors’ report is

required in terms of article 177, the following

adjustment to the information required by that

article and this Schedule shall apply namely that in

reporting details of own shares acquired, the

consolidated directors’ report shall indicate the

number and nominal value of all the parent

undertaking’s shares held by that parent

undertaking, by subsidiary undertakings of that

parent undertaking or by a person acting in his own

name but on behalf of any of those undertakings.

The disclosure of these particulars is required in the

notes to the consolidated financial statements.

7. Where a consolidated management report

is required in addition to the directors’ report, the

two reports may be presented as a single report.".

Passed by the House of Representatives at Sitting No. 312 of the

26th October, 2015.

A NĠLU F ARRUGIA

Speaker

R AYMOND S CICLUNA

Clerk of the House of Representatives

€2.52