Section 192 of the 1963 Act requires certain details of loans to directors to be disclosed. Since the provisions of Part III of the Bill are considerably more demanding this requires that section 192 should be repealed. This section does this but also makes provision for certain necessary transitional arrangements. Thus paragraph (a) of the section provides that the repeal of section 192 of the 1963 Act will not affect any company accounts or directors' reports prepared in respect of financial years ending before the section comes into effect. Therefore, such accounts and reports must still be prepared in accordance with the provisions of section 192. The paragraph makes it clear that there will be no element of retrospection in respect of completed financial years before the commencement of Part III.
Paragraph (b) of section 44 makes special provision for accounts and directors' reports prepared in respect of the first financial year ending after the section comes into effect. It recognises that there will be two kinds of transactions in that financial year: (1) transactions entered into during the financial year before the commencement of section 44 but which do not subsist after such commencement and (2) transactions entered into during that financial year but before the commencement of section 44 and which continue to exist after that. What section 44 (b) is saying is that in the case of transactions entered into before the commencement of the section but which have been paid off, or whatever, section 192 will not apply and the disclosure to be made is that in accordance with Part III of the Bill. On the other hand, in the case of transactions entered into before the commencement of section 44 which continue to exist after that date, the accounts for the first financial year after the commencement will have to comply not just with the new disclosure provisions in Part III of the Bill but also with section 192 of the 1963 Act. It is recognised that the accounts for this particular financial year will be covered by two different sets of rules; it is also recognised that this might be slightly burdensome for some companies for the first year of operation of the new provisions but this is unavoidable. We wish them to be effective from the commencement of the section while at the same time ruling out any elements of retrospection.