FRIENDLY SOCIETIES ACT 1992 (c. 40)

(The document as of February, 2008)

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63 Confidentiality of certain information

(1) Subject to section 64 below, no restricted information which relates to the business or other affairs of a friendly society, a registered branch of a friendly society or any other person shall be disclosed (otherwise than to an officer or employee of the primary recipient) by--

(a) the primary recipient; or

(b) any person obtaining the information directly or indirectly from him,

without the consent of the person from whom the primary recipient obtained the information and, if different, the person to whom it relates.

(2) For the purposes of this section--

"the primary recipient" means the Commission, the Chief Registrar, the central office or any officer or servant of any such person; and
"restricted information" means information which is obtained by the primary recipient for the purposes of, or in the discharge of his functions under, this Act or the 1974 Act;

but information shall not be treated as restricted information if it has been made available to the public by virtue of being disclosed in any circumstances in which, or for any purpose for which, disclosure is not precluded by this section.

(3) Any information disclosed to the Commission or the Chief Registrar by an overseas regulatory authority (within the meaning of section 64 below) shall be treated as restricted information for the purposes of this section.

(4) A person who discloses information in contravention of this section shall be guilty of an offence and liable--

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both; and

(b) on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding the statutory maximum, or both.

64 Exceptions from restrictions on disclosure

(1) Information which is restricted information for the purposes of section 63 above may be disclosed--

(a) to any person with a view to the institution of, or otherwise for the purposes of, relevant proceedings;

(b) if it is information which is or has been available to the public from other sources;

(c) in the form of a summary or collection of information so framed as not to enable information related to any particular body or person to be ascertained from it;

(d) to the extent that it is information which is provided for the purpose, under any provision of this Act or the 1974 Act, of its being made available to the public in any manner;

(e) in pursuance of any Community obligation;

(f) for the purpose of facilitating the discharge by the Commission, the Chief Registrar or the central office of any of their functions under this Act or the 1974 Act;

(g) to the Treasury, if the disclosure is made for the purpose of facilitating the discharge of any functions of the Treasury under this Act or the 1974 Act or otherwise in the interests of members of friendly societies or in the public interest;

(h) for the purpose of enabling or assisting any person appointed investigator under section 65 below or inspector under section 66 below to discharge his duties under that section; or

(i) for the purpose of facilitating the discharge by the auditors of a friendly society of their duties to the Commission.

(2) For the purposes of subsection (1)(a) above "relevant proceedings" are--

(a) any criminal proceedings;

(b) any civil proceedings by or at the relation of or against the Commission or the Chief Registrar arising out of the discharge of any of their functions under this Act or the 1974 Act;

(i) the exercise by a solicitor, auditor, accountant, actuary or valuer of his professional duties;

(ii) the discharge by a public servant of his duties;

and in paragraph (c) above "public servant" means an officer or servant of the Crown (including an officer or servant of the Crown in right of Her Majesty's Government in Northern Ireland) or of any public or other authority designated for the purpose by order made by the Treasury.

(3) Nothing in section 63 above prohibits the disclosure of information to the Secretary of State or the Department of Economic Development in Northern Ireland in circumstances where it is desirable or expedient--

(a) that the information should be disclosed in the interests of members of a friendly society or in the public interest; or

(b) it is desirable or expedient that the information should be disclosed for the purpose of facilitating the discharge--

(i) by the Secretary of State, of any functions of his under the enactments relating to companies, insurance companies, or insolvency or under the [1986 c. 60.] Financial Services Act 1986 or any provision of Parts II, III or VII of the [1989 c. 40.] Companies Act 1989; or

(ii) by the Department, of any of its functions relating to companies or insolvency, or under Part III of the [S.I. 1990/593 (N.I. 5).] Companies (Northern Ireland) Order 1990 or Part II or V of the [S.I. 1990/1504 (N.I. 10).] Companies (No. 2) (Northern Ireland) Order 1990;

nor does that section prohibit further disclosure of the information by the Secretary of State or the Department with the consent of the Commission.

(4) Nothing in section 63 above prohibits the disclosure of information to an authority mentioned in subsection (5) below (a "relevant authority") in circumstances where, in the opinion of the Commission, it is desirable or expedient that the information should be disclosed--

(a) in the interests of members of a friendly society or in the public interest; or

(b) with a view to facilitating the discharge by the authority, of any functions of the authority (including functions in relation to proceedings) mentioned in that subsection ("relevant functions");

nor does that section prohibit further disclosure of the information, with the consent of the Commission.

(5) The relevant authorities mentioned in subsection (4) above and the relevant functions in relation to each such authority, are as follows--

Authority	Functions
An inspector appointed under Part XIV of the Companies Act 1985, Part XV of the Companies (Northern Ireland) Order 1986 or section 94 or 177 of the Financial Services Act 1986.	Functions under that Part or that section or Article.
A person authorised to exercise powers under section 44 of the Insurance Companies Act 1982, section 447 of the Companies Act 1985, section 106 of the Financial Services Act 1986 or section 84 of the Companies Act 1989 or Article 440 of the Companies (Northern Ireland) Order 1986.	Functions under that section or Article.
The Policyholders Protection Board.	Functions under the Policyholders Protection Act 1975.
A designated agency within the meaning of the Financial Services Act 1986.	Functions under that Act or Part VII of the Companies Act 1989.
A transferee body or the competent authority within the meaning of the Financial Services Act 1986.	Functions under that Act.
A body administering a scheme under section 54 of the Financial Services Act 1986.	Functions under the scheme.
A recognised self-regulating organisation, recognised professional body, recognised investment exchange, recognised clearing house, or recognised self-regulating organisation for friendly societies (within the meaning of the Financial Services Act 1986).	Functions in its capacity as an organisation, body, exchange or clearing house recognised under that Act.
The Bank of England.	Functions under the Banking Act 1987 and any other functions.
A body established by order under section 46 of the Companies Act 1989.	Functions under Part II of that Act.
A recognised supervisory or qualifying body within the meaning of Part II of the Companies Act 1989.	Functions as such a body.
The Industrial Assurance Commissioner for Northern Ireland.	Functions under the enactments relating to industrial assurance.
The Insurance Brokers Registration Council.	Functions under the Insurance Brokers (Registration) Act 1977.
The Official Receiver or the Official Receiver for Northern Ireland.	Functions under the enactments relating to insolvency.
A recognised professional body (within the meaning of section 391 of the Insolvency Act 1986).	Functions in its capacity as such a body under that Act.
The Building Societies Commission.	Functions under the Building Societies Act 1986.
The Director-General of Fair Trading.	Functions under the Financial Services Act 1986.

(6) The Commission, with the consent of the Treasury, may by order--

(a) amend the Table in subsection (5) above so as to--

(i) add any public or other authority to the Table and specify the relevant functions of that authority;

(ii) remove any authority from the Table; or

(iii) add functions to, or remove functions from, those which are relevant functions in relation to an authority specified in the Table;

(b) restrict the circumstances in which information may, by virtue of subsection (4) above, be disclosed or further disclosed; and

(7) Nothing in section 63 above prohibits the disclosure to an overseas regulatory authority of information for the purpose of assisting that authority in the discharge of its functions.

(8) In this section--

"authority" includes any body (corporate or unincorporate) which is charged with the regulation of the carrying on of any description of financial or insurance business or the practice of any profession to which the carrying on of such business is incidental;
"overseas regulatory authority" means any government department or public or other authority in a country or territory outside the United Kingdom which is charged under the law of that country or territory with the regulation of companies, insurance companies, financial services, banking or any business corresponding to the business which may be carried on by friendly societies (or their subsidiaries); and
"regulation", in relation to any public or other authority, means regulation in the public interest or for the protection of private interests.

Inspections etc.

65 Investigations on behalf of Commission

(1) If it appears to the Commission desirable to do so for the purpose of its supervisory functions in relation to a friendly society, the Commission may appoint one or more competent persons to investigate and report to it on the state and conduct of the activities of the society, or any particular aspect of those activities.

(2) If a person appointed under subsection (1) above thinks it necessary for the purposes of his investigation, he may also investigate the activities of any body corporate which is or has at any relevant time been a subsidiary of, or jointly controlled by, the society under investigation.

(3) It shall be the duty of every person who is or has been an officer, employee and agent of a friendly society or other body which is under investigation--

(a) to produce to the persons appointed under subsection (1) above all records, books and papers relating to the body concerned which are in his custody or power; and

(b) to attend before those persons when required to do so;

(c) to answer any question which is put to him by those persons with respect to any friendly society or other body which is under investigation,

and otherwise to give to those persons all assistance in connection with the investigation which he is reasonably able to give.

(4) A person who, without reasonable excuse--

(a) fails to produce any records, books or papers which it is his duty to produce under subsection (3)(a) above; or

(b) fails to comply with his duty under subsection (3)(b) or (c) above;

shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.

(5) A person who is or has been an officer, employee or agent of a friendly society or other body and who knowingly or recklessly furnishes to any person appointed under subsection (1) above any information which is false or misleading in a material particular, shall be guilty of an offence and liable--

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both; and

(b) on summary conviction, to a fine not exceeding the statutory maximum.

(6) In this section--

"agent", in relation to a friendly society or other body whose activities are under investigation, includes its bankers, accountants, solicitors and auditors and the appropriate actuary;
"the purposes of its supervisory functions", in relation to the Commission, has the same meaning as in section 62 above.

66 Inspections and special meetings: general

(1) In the circumstances mentioned in subsection (2) below, the Commission may--

(a) appoint one or more competent inspectors to investigate and report on the affairs of a friendly society; or

(b) call a special meeting of a friendly society to consider its affairs; or

(c) appoint (whether on the same or on different occasions) an inspector or inspectors and call a special meeting for those purposes;

and, in the circumstances mentioned in subsection (3) below, the investigation or consideration may extend to the affairs of any body corporate which is or at any relevant time has been a subsidiary of or jointly controlled by the society concerned.

(2) The powers conferred by subsection (1) above may be exercised either--

(a) on the application of the requisite number of members of the society concerned; or

(b) where the Commission is of the opinion that an investigation should be held into the affairs of the society, or that the affairs of the society call for consideration by a meeting of its members;

but paragraph (a) above shall not apply to a registered society with branches (regardless of the number of members) except with the consent of the central body of that society.

(3) The powers conferred by subsection (1) above may be exercised so as to extend the investigation or consideration to the affairs of a body which is or has been a subsidiary of or jointly controlled by a friendly society either--

(a) where an application referred to in subsection (2)(a) above so requests; or

(b) where the Commission is of the opinion that it is necessary for the purposes of the investigation into or consideration of the affairs of the friendly society that the affairs of the subsidiary or other body should also be investigated or considered.

(4) Where the inspectors are of the opinion mentioned in subsection (3)(b) above in relation to a subsidiary of or a body jointly controlled by the society under investigation they may, with the consent of the Commission, extend their investigation to the affairs of the subsidiary or other body and make their report accordingly.

(5) For the purposes of subsections (1) to (3) above the requisite number of members--

(a) in the case of a friendly society having more than 1,000 members, is 100; and

(b) in the case of any other friendly society, is one-tenth of the whole number of members of the society.

(6) Where an application is made as mentioned in subsection (2) above--

(a) the application shall be supported by such evidence as the Commission may require for the purpose of showing that the applicants have good reason for making the application and are not actuated by malicious, frivolous, vexatious or scandalous motives;

(b) such notice of the application shall be given to the society concerned and, if the application extends to the affairs of a subsidiary of or body jointly controlled by that society, to that subsidiary or other body, as the Commission may direct;

(c) the Commission may require the applicants to give security for payment of the costs of the investigation or meeting before the inspector is appointed or the meeting is called subject, in the case of the costs of an investigation, to an amount not exceeding the corresponding Companies Act limit; and

(d) as regards the expenses of or incidental to the investigation or meeting--

(i) in the case of an investigation (in whichever way instituted), the expenses shall be defrayed in the first instance by the Commission but without prejudice to its rights to contribution under section 67(10) below;

(ii) in the case of a meeting, the expenses shall be defrayed by the applicants, or out of the funds of the society, or by the members or officers or former members or officers of the society, in such proportions as the Commission may direct.

(7) Before exercising its powers under subsection (1) above in a case falling within subsection (2)(b) above, the Commission shall inform the society of the action which it proposes to take and the grounds for that action, and the society shall, within 14 days of receiving the information, be entitled to give the Commission an explanatory statement in writing by way of a reply.

(8) Where the Commission proposes to exercise its powers under subsection (1) above in a case falling within subsection (3)(b) above, subsection (7) above shall apply in relation to the subsidiary or jointly controlled body as it applies in relation to the society.

(9) Inspectors appointed under this section shall, in addition to having the powers which are necessary for or incidental to the discharge of their functions under this section, have the power specified in section 67 below.

(10) Where a special meeting is called under this section--

(a) the Commission may--

(i) direct at what time and place the meeting is to be held and what matters are to be discussed and determined at the meeting; and

(ii) direct which members may attend and vote at the meeting,

and may give such other directions as it thinks fit with respect to the call, holding and conduct of the meeting;

(b) the Commission may appoint a person to be chairman at the meeting or, in default of such an appointment, the meeting may appoint its own chairman;

and the provisions of this subsection and any direction given under it shall have effect notwithstanding anything in the rules of the society.

(11) In this section "the corresponding Companies Act limit", in relation to security for the payment of the costs of an investigation, is £5,000 or such other sum as is specified for the time being in an order under section 431(4) of the [1985 c. 6.] Companies Act 1985 or Article 424(4) of the [S.I. 1986/1032 (N.I. 6).] Companies (Northern Ireland) Order 1986.

67 Inspections: supplementary provision

(1) In this section--

"the body under investigation" means--
(i)
the friendly society whose affairs are the subject of the investigation, or
(ii)
the friendly society, and each subsidiary of or body jointly controlled by the society, whose affairs are so subject,

as the case may be;
"the inspectors" means the person appointed by the Commission under section 66 above to conduct the investigation;
"the investigation" means the investigation under section 66 above which the inspectors have been appointed to hold;

and references to officers, employees or agents include past, as well as present, officers, employees or agents; and "agents", in relation to a friendly society or any subsidiary of or body jointly controlled by an incorporated friendly society, includes its bankers, accountants, solicitors and auditors and the appropriate actuary.

(2) When the inspectors have been appointed, it is the duty of all officers, employees and agents of the body under investigation--

(a) to produce to the inspectors all documents and material of or relating to the body under investigation which are in their custody or power;

(b) to attend before the inspectors when required to do so; and

(c) otherwise to give the inspectors all assistance in connection with the investigation which they are reasonably able to give.

(3) If the inspectors consider that a person other than an officer, employee or agent of the body under investigation is or may be in possession of information concerning its affairs, they may require that person to produce to them any documents or material in his custody or power relating to the body under investigation, to attend before them and otherwise to give them all assistance in connection with the investigation which he is reasonably able to give; and it is that person's duty to comply with the requirement.

(4) The inspectors may examine on oath the officers, employees and agents of the body under investigation, and any such person as is mentioned in subsection (3) above, in relation to the affairs of the body under investigation, and may administer an oath accordingly.

(5) An answer given by a person to a question put to him under the foregoing provisions of this section may be used in evidence against him.

(6) If an officer, employee or agent of the body under investigation or any such person as is mentioned in subsection (3) above--

(a) refuses to produce any document or material which it is his duty under this section to produce; or

(b) refuses to attend before the inspectors when required to do so; or

(c) refuses to answer any question put to him by the inspectors with respect to the affairs of the body under investigation,

the inspectors may certify the refusal in writing to the High Court; and the court may thereupon enquire into the case and, after hearing any witnesses who may be produced against or on behalf of the alleged offender and after hearing any statement which may be offered in defence, may punish the offender in like manner as if he had been guilty of contempt of the court.

(7) The inspectors may, and if so directed by the Commission shall, make interim reports to the Commission, but they may at any time in the course of the investigation, without making an interim report, inform the Commission of matters coming to their knowledge as a result of the investigation tending to show that an offence has been committed.

(8) The Commission may, if it thinks fit--

(a) send a copy of any report made by the inspectors to the body whose affairs are or were the subject of the investigation;

(b) furnish a copy of any such report on request and on payment of the prescribed fee to--

(i) any member of the body whose affairs are or were the subject of the investigation;

(ii) the auditors of that body;

(iii) any person whose conduct is referred to in the report;

(iv) any other person whose financial interests appear to the Commission to be affected by matters dealt with in the report, whether as creditor or otherwise; and

(9) A copy of a report of inspectors appointed under section 66 above to hold an investigation under that section, certified by the Commission to be a true copy, is admissible in any legal proceedings as evidence of the opinion of the inspectors in relation to any matter contained in the report; and a document purporting to be such a certificate shall be received in evidence and be deemed to be such a certificate, unless the contrary is proved.

(10) The Commission shall be entitled to be repaid the expenses of the investigation defrayed by it under section 66(6)(d) above as provided in the following paragraph, that is to say--

(a) by the applicants for the investigation, to such extent (if any) as the Commission may direct;

(b) by any body whose affairs were the subject of the investigation, to such extent (if any) as the Commission may direct;

(c) by any person convicted of an offence in proceedings instituted as a result of the investigation, to such extent (if any) as the court by or before which he was convicted may order;

and a person liable under any one of paragraphs (a) to (c) above is entitled to contribution from any other person liable under the same paragraph, according to the amount of their respective liabilities under it.

(11) In the application of this section to a friendly society whose registered office is in Scotland or Northern Ireland, any reference to the High Court shall be read as a reference to the Court of Session or, as the case may be, to the High Court in Northern Ireland.

Part VI Accounts and Audit

Records and systems

68 Accounting records and systems of business control

(1) Every friendly society and every registered branch shall--

(a) cause accounting records to be kept; and

(b) establish and maintain systems of control of its business and records and of inspection and report,

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 and their function of direction of the affairs of the society or branch; and

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

(4) The system of control which is to be established and maintained by a friendly society or a registered branch is a system for the control of the conduct of its activities in accordance with this Act and the decisions of the committee of management and for the control of the accounting and other records of its activities.

(5) The system of inspection and report which is to be established and maintained by a friendly society or registered branch is a system of inspection on behalf of and report to the committee of management on the operation of the system of control of the activities of the society or branch and records required by subsection (1)(b) above.

(6) The systems of control and of inspection and report must be such as to--

(a) enable the committee of management properly to discharge the duties imposed on them by or under this Act or the 1974 Act and their functions of direction of the affairs of the society or branch; and

(b) enable the society or branch properly to discharge the duties imposed on it by or under this Act or the 1974 Act;

and no such system of control shall be treated as established or maintained unless there is kept available to the committee of management a detailed statement in writing of the system as in operation for the time being.

(7) Without prejudice to the generality of subsection (6) above, the systems of control and of inspection and report must be such as to secure that the activities of the society or branch are so conducted and its records so kept that--

(a) the information necessary to enable the committee of management and the society or branch to discharge their duties and functions is sufficiently accurate, and is available with sufficient regularity or at need and with sufficient promptness, for those purposes; and

(b) the information regularly obtained by or furnished to the Commission under or for the purposes of this Act is sufficiently accurate for the purpose for which it is obtained or furnished and is regularly furnished;

and in this subsection, in its application in relation to the Commission, "regularly" includes that regularity requested by or agreed with the Commission.

(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 and such systems of control and of inspection and report are established and maintained 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.

(11) The committee of management of every friendly society shall within the period of 6 months beginning with the end of each financial year make and send to the Commission a statement of their opinion whether the requirements of this section have been complied with in respect of that year by the society and also, in the case of a registered friendly society with registered branches, by each of those branches, and the statement shall be signed by the chairman on behalf of the committee of management and by the chief executive.

Annual accounts of friendly societies and registered branches

69 Duty to prepare accounts

(1) The committee of management of a friendly society or registered branch shall prepare for each financial year of the society or branch--

(a) a balance sheet as at the last day of the year, and

(b) an income and expenditure account.

(2) Except as provided by regulations under subsection (4) below, if at the end of its financial year an incorporated friendly society has subsidiaries, the committee of management shall also prepare group accounts.

(3) Group accounts shall be consolidated accounts comprising--

(a) a consolidated balance sheet dealing with the state of affairs of the society and its subsidiaries; and

(b) a consolidated income and expenditure account dealing with the income and expenditure of the society and its subsidiaries.

(4) The Commission may by regulations made with the consent of the Treasury exempt specified descriptions of incorporated friendly societies with subsidiaries from any duty to prepare group accounts.

(5) Regulations under subsection (4) above may exempt societies by reference to any criterion and may make different provision for different descriptions of societies.

70 Contents and form of annual accounts

(1) The annual accounts of a friendly society or a registered branch shall conform to the requirements of this section and regulations made under it.

(2) The balance sheet shall give a true and fair view of the state of the affairs of the society or branch as at the end of the financial year.

(3) The income and expenditure account shall give a true and fair view of the income and expenditure of the society or branch for the financial year.

(4) Subsections (2) and (3) above, in their application to the group accounts of an incorporated friendly society, are to be read as referring to the society and (so far as it concerns the members of the society) the subsidiaries dealt with in the group accounts.

(5) The annual accounts shall also contain, whether in the form of notes or otherwise, such supplementary information as is prescribed.

(6) The Commission shall, by regulations made with the consent of the Treasury, make provision with respect to the contents and the form of the annual accounts.

(7) Without prejudice to the generality of subsections (5) and (6) above, the regulations may--

(a) prescribe accounting principles and rules;

(b) require corresponding information for a preceding financial year;

(d) require the accounts to give particulars of the emoluments, pensions, compensation for loss of office and financial interests of members of the committee of management, other officers and employees of prescribed descriptions of the society;

(e) add to the classes of documents to be comprised in the annual accounts;

(f) make provision as to the matters to be included in any document so added;

(g) modify the requirements of this Part of this Act as to the matters to be stated in any document comprised in the annual accounts; and

(h) reduce the classes of documents to be comprised in the annual accounts;

and the regulations may make different provision for different cases.

(8) Where compliance with regulations under this section would not be sufficient to give a true and fair view, the necessary additional information shall be given in the accounts or in a note to them.

(9) If in special circumstances compliance with any provisions contained in regulations is inconsistent with the requirement to give a true and fair view, the committee of management shall depart from that provision to the extent necessary to give a true and fair view.

(10) Particulars of any such departure, the reasons for it and its effect shall be given in a note to the accounts.

(11) It is the duty of every member of the committee of management, other officer and employee of a society or registered branch as respects whom prescribed particulars are by virtue of subsection (7)(d) above required to be given in the accounts to give notice to the society of such matters as may be necessary to enable the society to give those particulars in the accounts.

Committee of management's annual report

71 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--

(a) a fair review of the development of the activities of the society during the financial year and of its position at the end of it; and

(b) such information relating to such aspects of the activities of the society as may be prescribed by regulations made by the Commission with the consent of the 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.

(2) Where an incorporated friendly society has subsidiaries or jointly controls other bodies, the report shall-

(a) 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 Commission with the consent of the Treasury;

(b) review the development of any such subsidiaries and bodies during the year and their position at the end of it; and

(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.

Auditors

72 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;

(d) the remuneration of auditors.

Auditors' report on annual accounts

73 Auditors' report

(1) The auditors of a friendly society or of a registered branch shall make a report to the members on the annual accounts which are to be laid before the society or branch at the annual general meeting during their tenure of office.

(2) The auditors of a friendly society or registered branch shall, in preparing their report, carry out such investigations as will enable them to form an opinion as to--

(a) whether proper accounting records have been kept under section 68 above;

(b) whether satisfactory systems of control of the business and records of the society or branch and of inspection and report under that section have been maintained; and

and, if the auditors are of the opinion that proper accounting records have not been kept, they shall state that fact in their report.

(3) If the auditors fail to obtain all the information and explanations and the access to documents which, to the best of their knowledge and belief, are necessary for the purposes of their audit, they shall state that fact in their report.

(4) The auditors shall, in their report, also make a report to the members on the report of the committee of management, in so far as subsection (7) below requires them to do so.

(5) The auditors' report shall state whether in the auditors' opinion the annual accounts have been properly prepared in accordance with this Act and the regulations made under it and in particular whether a true and fair view is given--

(a) in the case of the income and expenditure account, of the income and expenditure of the society or branch for the financial year; and

(b) in the case of the balance-sheet, of the state of the affairs of the society or branch as at the end of the financial year; and

(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 of the society and any subsidiaries of the society.

(6) Subsection (5) above, in its application to the group accounts of an incorporated friendly society, is to be read as referring to the society and (so far as it concerns the members of the society) the subsidiaries dealt with in the group accounts.

(7) The auditors' report, in so far as it deals with the report of the committee of management, shall state whether in the auditors' opinion it has been prepared in accordance with this Act and the regulations made under it and whether the information given in the report of the committee of management is consistent with the accounting records and the annual accounts for the financial year.

74 Signature of auditors' report

(1) The auditors' report to the members of a friendly society or registered branch shall state the names of the auditors and be signed by them.

(2) The copies of the auditors' report which are sent to the Commission or the central office under section 78(1) or (2) below shall be signed by the auditors.

(3) Every copy of the auditors' report which is laid before the society or branch in general meeting, sent to the Commission or the central office or is otherwise circulated, published or issued shall state the names of the auditors.

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