Article 7 Limit on aggregation

In determining the extent to which the internally audited interim profit, revaluation reserve, general provisions for bad debt and supplementary capital of a society are to be aggregated with the reserves of the society for the purpose of the first criterion in section 45(3) of the Act there shall be disregarded (in addition to any amount of supplementary capital disregarded under the Supplementary Capital Order) the amount (if any) by which the aggregate of the supplementary capital falling to be aggregated with the reserves of the society under the Supplementary Capital Order, internally audited interim profit, revaluation reserve and general provisions for bad debt of the society exceeds the society’s primary capital.

For the purposes of paragraph (1) above “primary capital” means the aggregate of the society’s verified interim profit, aggregable deferred shares, aggregable old deferred shares and reserves, less the aggregate of any intangible assets and any interim loss.

Where a society has subsidiary undertakings, the determination in paragraph (1) above shall be made on a consolidated basis, by reference to the group accounts and accounting records of the society and its subsidiary undertakings.