PART I—MATTERS TO BE DISCLOSED UNDER SECTION 383
1. Group financial statements shall contain the particulars required by this Schedule of—
(a) any transaction or arrangement of a kind described in section 296 of this Act entered into by the company or by a subsidiary of the company for a person who at any time during the year was a director of the company or its holding company, or was connected with such a director ;
(b) an agreement by the company or by a subsidiary of the company to enter into any such transaction or arrangement for a person who was at any time during the year a director of the company or its holding company, or was connected with such a director ; and
(c) any other transaction or arrangement with the company or subsidiary of it in which a person who at any time during the year was a director of the company or its holding company had, directly or indirectly, a material interest.
2. The accounts prepared by a company other than a holding company shall contain the particulars required by this Schedule of—
(a) any transaction or arrangement of a kind described in section 296 of this Act entered into by the company for a person who at any time during the year was a director of it or of its holding company or was connected with such a director ;
(b) an agreement by the company to enter into any such transaction or arrangement for a person who at any time during the year was a director of the company or its holding company or was connected with such a director ; and
(c) any other transaction or arrangement with the company in which a person who, at any time during the year, was a director of the company or of its holding company had, directly or indirectly, a material interest.
3.—(1) For purposes of paragraphs 1 (c) and 2 (c), a transaction or arrangement between a company and a director of it or of its holding company, or a person connected with such a director, is to be treated, as a transaction, arrangement or agreement in which that director is interested.
(2) An interest in such a transaction or arrangement is not material for purposes of subparagraph (1) and this subparagraph if, in the board’s opinion it is not so, but this shall be without prejudice to the question whether or not such an interest is material in a case where the board has not considered the matter.
(3) For the purpose of subparagraph (2), the board” means the directors of the company preparing the accounts, or a majority of those directors, but excluding, in either case, the director whose interest it is.
4. Paragraphs 1 and 2 shall not apply, for the purposes of accounts prepared by a company which is, or is the holding company of a recognised bank, in relation to a transaction or arrangement of a kind described in section
296 of this Act or an agreement to enter into such a transaction or arrangement, to which that recognised bank is a party.
5. Paragraphs 1 and 2 shall not apply in relation to—
(a) a transaction, arrangement or agreement between one company and another in which a director of the former or of its subsidiary or holding company is interested only by virtue of his being a director of the latter ;
(b) a contract of service between a company and one of its directors or a director of its holding company, or between a director of a company and any of that company’s subsidiaries ; or
(c) a transaction, arrangement or agreement which was not entered into during the year and which did not subsist at any time during that year.
6. Paragraphs 1 and 2 shall apply whether or not—
(a) the transaction or arrangement was prohibited by section 296 of this
Act ;
(b) the person for whom it was made was a director of the company or was connected with a director of it at the time it was made ; and
(c) in the case of a transaction or arrangement made by a company which at any time during a financial year is a subsidiary of another company, it was a subsidiary of that other company at the time the transaction or arrangement was made.
7. Neither paragraph 1 (c) nor 2 (c) applies in relation to any transaction or arrangement if—
(a) each party to the transaction or arrangement which is a member of the same group of companies (meaning a holding company and its subsidiaries) as the company entered into the transaction or arrangement in the ordinary course of business ; or
(b) the terms of the transaction or arrangement are not less favourable to any such party than it would be reasonable to expect if the interest mentioned in that subparagraph had not been an interest of a person who was a director of the company or of its holding company.
8. Neither paragraph 1(c) nor 2 (c) applies in relation to any transaction or arrangement if—
(a) the company is a member of a group of companies (meaning a holding company and its subsidiaries) ;
(b) either the company is a wholly-owned subsidiary or no body corporate
(other than the company or a subsidiary of the company) which is a member of the group of companies, which includes the company’s ultimate holding company, was a party to the transaction or arrangement ;
(c) the director in question was at some time during the relevant period associated with the company ; and
(d) the material interest of the director in question in the transaction or arrangement would not have risen if he had not been associated with the company at any time during the relevant period.
THE PARTICULARS REQUIRED BY THIS PART
9. (1) Subject to paragraph 10, the particulars required by this Part are those of the principal terms of the transaction, arrangement or agreement.
(2) Without prejudice to the generality of subparagraph (1), the following particulars are required—
(a) a statement of the fact either that the transaction, arrangement or agreement was made or subsisted (as the case may be) during the year ;
(b) the name of the person for whom it was made and, where that person is or was connected with a director of the company or of its holding company, the name of that director ;
(c) in a case where paragraph 1(c) or 2(c) applies, the name of the director with the material interest and the nature of that interest ;
(d) in the case of a loan or an agreement for a loan or an arrangement within section 296 of this Act relating to a loan—
(i) the amount of the liability of the person to whom the loan was or was agreed to be made, in respect of principal and interest, at the beginning and at the end of the year,
(ii) the maximum amount of that liability during that year,
(iii) the amount of any interest which, having fallen due, has not been paid, and
(iv) the amount of any provision (within the meaning of the First
Schedule to this Act), made in respect of any failure or anticipated failure by the borrower to repay the whole or part of the loan or to pay the whole or part of any interest on it ;
(e) in the case of a guarantee, security or an arrangement within section
296 of this Act relating to a guarantee or security—
(i) the amount for which the company (or its subsidiary) was liable under the guarantee or in respect of the security both at the beginning and at the end of the year,
(ii) the maximum amount for which the company (or its subsidiary) may become so liable, and
(iii) any amount paid and any liability incurred by the company (or its subsidiary) for the purpose of fulfilling the guarantee or discharging the security (including any loss incurred by reason of the enforcement of the guarantee or security) ; and
(f ) in the case of any transaction, arrangement or agreement other than those mentioned in paragraphs 11 (2).
10. Paragraph 9 (2) (c)-(f) shall not apply in the case of a loan or quasi-loan made or agreed to be made by a company to or for a body corporate which is either—
(a) a body corporate of which that company is a wholly-owned subsidiary ;
(b) a wholly-owned subsidiary of a body corporate of which that company is a wholly-owned subsidiary ; or
(c) a wholly-owned subsidiary of that company, if particulars of that loan, quasi- loan or agreement for it would not have been required to be included in that company’s annual accounts if the first-mentioned body corporate had not been associated with a director of that company at any time during the relevant period.
Transactions excluded from Section 383
11.—(1) In relation to a company’s accounts for a year, compliance with this Part is not required in the case of transactions of a kind mentioned in subparagraph (2) which are made by the company or a subsidiary of it for a person who at any time during that financial year was a director of the company or of its holding company, or was connected with such a director, if the aggregate of the values of each transaction, arrangement or agreement so made for that director or any person connected with him, less the amount (if any) by which the liabilities of the person for whom the transaction or arrangement was made has been reduced, did not at any time during the year exceed N10,000.
(2) The transactions in question are—
(a) credit transactions ;
(b) guarantees provided or securities entered into in connection with credit transactions ;
(c) arrangements within section 296 of this Act relating to credit transactions ; and
(d) agreements to enter into credit transactions.
12. In relation to a company’s accounts for a financial year, compliance with this Part shall not be required by virtue of paragraph 1 (c) or 2 (c) in the case of any transaction or arrangement with a company or any of its subsidiaries in which a director of the company or its holding company had, directly or indirectly, a material interest if the—
(a) value of each transaction or arrangement within paragraph 1 (c) or 2
(c) (as the case may be) in which that director had (directly or indirectly) a material interest and which was made after the commencement of the year with the company or any of its subsidiaries ; and
(b) value of each such transaction or arrangement which was made before the commencement of the year less the amount (if any) by which the liabilities of the person for whom the transaction or arrangement was made have been reduced, did not at any time during the year exceed in the aggregate N3,000 or, if more, did not exceed N19,000 or one per cent of the value of the net assets of the company preparing the accounts in question as at the end of the year, whichever is less.
For this purpose, a company’s net assets are the aggregate of its assets less the aggregate of its liabilities (“liabilities” to include any provision for liabilities or charges within paragraph 83 of the First Schedule to this Act).
PART II—MATTERS TO BE DISCLOSED UNDER SECTION 384
13. This Part of this Schedule shall apply in relation to the following classes of transactions, arrangements and agreements—
(a) loans, guarantees and securities relating to loans, arrangements of a kind described under section 296 of this Act relating to loans and agreements to enter into any of the foregoing transactions and agreements ;
(b) quasi-loans, guarantees and securities relating to quasi-loans, arrangements of a kind described in either of those subsections relating to quasi-loans and agreements to enter into any of the foregoing transactions and arrangements ;
(c) credit transactions, guarantees and securities relating to credit transactions and arrangements of a kind described in either of those subsections relating to credit transactions and agreements to enter into any of the foregoing transactions and arrangements.
14.—(1) To comply with this Part of this Schedule, the accounts must contain a statement, in relation to transactions, arrangements and agreements, made as mentioned in section 296 (1) of this Act—
(a) the aggregate amounts outstanding at the end of the financial year under transactions, arrangements and agreements within subparagraphs
13 (a), (b) and (c) ; and
(b) the number of officers for whom the transactions, arrangements and agreements falling within each of those sub-paragraphs, were made.
(2) This paragraph does not apply to transactions, arrangements and agreements made by the company or any of its subsidiaries for an officer of the company if the aggregate amount outstanding at the end of the year under such transactions, arrangements, and agreements do not exceed N5,000.