1974-HKRS28-16-22_Part05 — Page 55

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"group accounts" has the meaning assigned to it by sub

section (1) of section 124;

"officer", in relation to a body corporate, includes a

director, manager or secretary;"; and

(6) by inserting after subsection (2) the following new sub-

sections-

"(3) References in this Ordinance to a body cor- porate or to a corporation shall be construed as not including a corporation sole but as including a company incorporated outsitle Hong Kong.

(4) For the purposes of this Ordinance, a company sball, subject to the provisions of subsection (6), be deemed to be a subsidiary of another company, if-

(a) that other company-

(1) controls the composition of the board of directors of the first-mentioned company:

(ii) controls more than half of the voting power of the first-mentioned company; or

(iii) holds more than half of the issued share capital of the first-mentioned company (exclud- ing any part of it which carries no right to participate beyond a specified amount in a dis- tribution of either profits or capital); or

(b) the first-mentioned company is a subsidiary of any company which is that other company's subsidiary.

(5) For the purposes of subsection (4), the composi tion of a company's board of directors shall be deemed to be controlled by another company if that other com- pany by the exercise of some power exercisable by it, without the consent or concurrence of any other person, can appoint or remove all or a majority of the directors, and, for the purposes of this provision, that other com- pany shall be deemed to have power to make such an appointment if-

(a) a person cannot be appointed as a director without the exercise in his favour by that other company of such a power; or

(b) a person's appointment as a director follows necessarily from his being a director or other officer of that other company.

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(6) In determining whether one company is a sub- sidiary of another company-

(a) any shares held or power exercisable by that other company in a fiduciary capacity shall be treated as not held or exercisable by it;

(b) subject to paragraphs (c) and (d), any shares

held or power exercisable-

(i) by any person as a nominee for that other company (except where that other com- pany is concerned only in a fiduciary capacity);

or

(i) by, or by a nominee for, a subsidiary of that other company, not being a subsidiary which is concerned only in a fiduciary capacity, shall be treated as held or exercisable by that other company;

(c) any shares held or power exercisable by any person by virtue of the provisions of any debentures of the first-mentioned company or of a trust deed for securing any issue of such debentures shall be disregarded; and

(d) any shares held or power exercisable by, or by a nomince for, that other company or its sub- sidiary (not being held or exercisable as men- tioned in paragraph (c)) shall be treated as not beld or exercisable by that other company if the ordinary business of that other company or its subsidiary, as the case may be, includes the leading of money and the shares are held or power is exercisable as aforesaid by way of security only for the purposes of a transaction entered into in the ordinary course of that business.

(7) A reference in this Ordinance to the holding company of a company shall be read as a reference to a company of which that last-mentioned company is a subsidiary.",

3. Section 47 of the principal Ordinance is repealed.

Repeal of Section 47.

4. Section 48 of the principal Ordinance is amended by Amendment deleting subsection (2).

of section 48.