1. Searing Point Limited T/A Searing Point Chartered Accountants, Tax Advisors & Registered Auditors Accounting & Finance | Taxation | Debt Resolution | Consulting | Human Resources Searing Point Chartered Accountants Companies Act 2014 Major changes coming for Directors of Irish Companies...

2. Major changes coming for Directors of Irish Companies…. The Companies Act 2014 (2014 Act) was signed into law on 23 rd December 2014 and is expected to be enacted in June 2015. The new Bill reduces red tape and will make the legislation easier to understand. New companies will also see cost saving benefits from a reduction in administration. The Companies Act 2014 will incorporate the following key changes: 1.New Company Structures – New and existing companies must avail of new company structures as outlined in Sections 1 – 25 of the Companies Act 2014. 2.Audit Exemption for small groups and guarantee companies – For the first time, Companies limited by Guarantee and certain group companies will now be able to claim audit exemption provided they meet certain criteria. 3.Codification of director’s common law fiduciary duties - The Companies Act 2014 gives statutory recognition, in relation to director’s fiduciary duties and compliance with the Companies and Taxation Acts. 4.Directors Compliance Statements - Directors of PLC’s and large companies will be obliged to sign a statement acknowledging responsibility for compliance with company law obligations. 5.Summary Approval Procedures - Certain transactions must be declared by way of a declaration and delivered to the Companies Registration Office within 21 days of the transaction 6.Changes to Insolvency & Corporate Recovery Regimes - The Act will reduce the courts supervisory role in court liquidations and will give the Director of Corporate Enforcement greater powers of intervention and scrutiny of liquidations. 7.Priority of charges and registration of charges - where security is taken over assets of the company, the priority will rest with the person who has been the first to register the security interest with the Companies Registration Office. Companies Act 2014

3. Searing Point Limited T/A Searing Point Chartered Accountants, Tax Advisors & Registered Auditors Accounting & Finance | Taxation | Debt Resolution | Consulting | Human Resources Be Constructive Grow Clever Give Back Look ForwardStay Solid Companies Act 2014 Overview The Companies Act 2014 (2014 Act) was signed into law on 23 rd December 2014 and is expected to be enacted in June 2015. Once enacted, the 2014 Act will replace the Companies Acts 1963 to 2013. The 2014 Act was first introduced in 2012 with the purpose of reforming company legislation within Ireland. This will be achieved by replacing the various Acts from 1963 to 2013 with one single piece of legislation, which is published in two volumes and incorporates 1,429 sections, spread over 25 parts. There are a number of important factors for both company Directors and company members / shareholders to consider before the 2014 Act is enacted. Listed below are some of the key factors. New Company Structures Introduction Under the 2014 Act there will be a number of new company structures. As outlined above, the 2014 Act will comprise of 25 parts divided over two volumes and each separate entity will be governed by specific parts of the 2014 Act. Such a structure is expected to make it easier to identify which parts of the Act are relevant to each company structure, unlike the current legislation. Under the current legislation, matters relating to each company type are spread across the various acts. The following is a summary of the new company structures to be introduced, along with the parts of the 2014 Act: Parts 20 to 25 of the 2014 Act cover areas such as Re-Registration, Unregistered Companies and Joint Stock Companies, Investment Companies and other matters. New Company Structure DescriptionApplicable Part of The Companies Act 2014 CLSNew model private company limited shares 1 to 15 DACDesignated Activity Company16 PLCPublic Limited Company17 CLGCompany Limited by Guarantee 18 UCUnlimited Company19

4. Searing Point Limited T/A Searing Point Chartered Accountants, Tax Advisors & Registered Auditors Accounting & Finance | Taxation | Debt Resolution | Consulting | Human Resources Be Constructive Grow Clever Give Back Look ForwardStay Solid While there are a number of options available to Irish companies under the 2014 Act, it is expected that most SME companies will adopt the “CLS” structure, which will allow the company to avail of the new company law procedures as outlined in parts 1 to 15 of the Companies Act 2014. The “DAC” structure more closely resembles the existing private limited company and would be suitable for special purpose companies (for example, regulated companies). Key Points There are many similarities between the CLS structure and the existing private limited company. However there are some significant differences: ` The Memorandum & Articles of Association have been replaced by a single constitution document “Ultra Vires” (acting beyond the scope of powers granted by the company’s objectives clause) will no longer apply CLS Companies will only require 1 Director The right to dispense with the holding of a physical AGM (Annual General Meeting) A director will continue to be able to act as the company secretary, however in a situation where the company has only one Director, such person is forbidden from also acting as secretary No requirement to have an authorised share capital There is an additional benefit for group structures included in the bill as they will now be able to avail of the audit exemption, if the group, when taken as a whole, can meet the relevant requirements to claim audit exemption In the case of a DAC structure, the following still apply: A DAC will have a two part constitution similar to the existing memorandum & articles of association A DAC is still required to have at least two Directors A DAC must hold an AGM, unless it is a single member company A DAC is required to have an authorised share capital All private companies will be obliged to register as a CLS or DAC and will be given an 18 month transition period to do so. Any company that has taken no action to convert will automatically default to a CLS structure. It should be noted that in this case, shareholders and creditors can take a view that the DAC is more appropriate, challenge the status and argue that they were prejudiced by the Directors failure to act.

5. Searing Point Limited T/A Searing Point Chartered Accountants, Tax Advisors & Registered Auditors Accounting & Finance | Taxation | Debt Resolution | Consulting | Human Resources Be Constructive Grow Clever Give Back Look ForwardStay Solid of audit exemption, however Registered Charities will still be required to prepare audited accounts. Previously, the exemption did not apply where a company was a parent or a subsidiary company and these companies will now be able to claim the exemption if they meet other criteria. Companies will only have to meet 2 of the 3 size criteria to qualify as a “small company” for the purposes of claiming an audit exemption. Under the Bill, the audit exemption will be extended to parent and subsidiary companies and this is contained in subsection 294-295 of the act. Dormant companies will be able to avail of audit exemption once their annual returns are filed on time. Listed below are the Company types can avail of audit exemption: Company Limited by Shares (CLS) Designated Activity Company (DAC) Company Limited By Guarantee Small Groups Non-designated Private Unlimited Company (ULC) Small Company Conditions The qualifying conditions for a small company are satisfied by a company in relation to a financial year in which it fulfils 2 or more of the following requirements in the current & preceding financial year: Making the Transition to the New Company Formats All private companies will be obliged to register as a CLS or DAC and will be given an 18 month transition period to do so. The transition period commences once the Act becomes live. Once the Act is in force, all private limited companies will be categorised as DAC until conversion to CLS takes place. Adopting the DAC Structure Pass a shareholders resolution to become a DAC up to three months before the end of the transition period (18 months). Amending resolution and new Memo & Arts to be filed with CRO, and the name of the Company changed. This structure is more likely to be adopted by “special purpose” companies. Other Areas of The Act A. Audit Exemption for small groups and guarantee companies The new Companies Act 2014 will make significant changes to certain companies who under current legislation do not qualify for the audit exemption. The new rules will apply to financial years commencing on or after the 1st June 2015. Under the new legislation, Companies Limited by Guarantee will for the first time, be able to avail

6. Searing Point Limited T/A Searing Point Chartered Accountants, Tax Advisors & Registered Auditors Accounting & Finance | Taxation | Debt Resolution | Consulting | Human Resources Be Constructive Grow Clever Give Back Look ForwardStay Solid B. Codification of director’s common law fiduciary duties The Companies Act 2014 gives statutory recognition, in relation to director’s fiduciary duties and compliance with the Companies and Taxation Acts, which will provide greater clarity for Directors. Duties include: Act in good faith and in the best interests of the company Act with honesty and integrity in relation to the conduct of company affairs Have regard to the interest of employees and the shareholder of the company C.Directors Compliance Statements Directors of PLC’s and large companies (Balance Sheet exceeding €12.5m & Revenues exceeding €25m) will be obliged to sign a statement acknowledging responsibility for compliance with company law obligations. D.Summary Approval Procedures Any transactions which include loans to Directors, mergers, financial assistance for the purchase of own shares or a reduction of share capital, must be declared by way of a declaration and delivered to the Companies Registration Office within 21 days of the transaction. 1.The amount of the turnover of the company does not exceed €8.8 million; 2.The balance sheet total of the company does not exceed €4.4 million; 3.The average number of employees of the company does not exceed 50 Small Group Conditions A group qualifies as small in relation to a subsequent financial year of the holding company: 1.If the qualifying conditions are satisfied in respect of that year and the preceding financial year; 2.If the qualifying conditions are satisfied in respect of that year and the group qualified as small in relation to the preceding financial year; 3.If the qualifying conditions were satisfied in respect of the preceding financial year and the group qualified as small in relation to that year. The qualifying conditions for a small group are satisfied by a group in relation to a financial year in which it fulfils 2 or more of the following requirements: 1.The amount of the turnover of the company does not exceed €8.8 million; 2.The balance sheet total of the company does not exceed €4.4 million; 3.The average number of employees of the company does not exceed 50

7. Searing Point Limited T/A Searing Point Chartered Accountants, Tax Advisors & Registered Auditors Accounting & Finance | Taxation | Debt Resolution | Consulting | Human Resources Be Constructive Grow Clever Give Back Look ForwardStay Solid Furthermore, a Special Resolution giving the Directors authority to carry out the transaction must be passed no more than 12 months before the event (24 months in the case of a merger). E.Changes to Insolvency & Corporate Recovery Regimes The Act will reduce the courts supervisory role in court liquidations and will give the Director of Corporate Enforcement greater powers of intervention and scrutiny of liquidations. F.Priority of charges and registration of charges Under the Act, where security is taken over assets of the company, the priority will rest with the person who has been the first to register the security interest with the Companies Registration Office. Considerations for a Company Director Seek advice on Company Type Advice should be sought on which type of private limited company which would best suit your company. All registered companies will be obliged to register as either a CLS or a DAC within the 18- month transition period. During this period all companies will be subject to company law applicable to a DAC type company. CLS V DAC As stated above, most small companies will adopt the CLS company type. CLS is similar to the existing limited company structure but with the additional benefit of having one document constitution and no objects clause. The DAC will mostly be used by special purpose companies. Conversion Procedure CLS 1.Shareholders resolution to be passed to adopt new form constitution three months prior to end of transition period. Resolution is then registered with the CRO. 2.New Certificate of Incorporation (CLS) issued DAC 1.Shareholders resolution to be passed to adopt new form constitution three months prior to end of transition period. 2.Amending resolution, Memo & Articles and change of name is then filed with the CRO. Company Types : Key Differences CLSDAC Directorship (Minimum) 12 ConstitutionSingle DocumentTwo Documents Authorised Share Capital Not RequiredRequired Objects ClauseUnlimitedRestricted AGMNon CompulsoryCompulsory

8. Searing Point Limited T/A Searing Point Chartered Accountants, Tax Advisors & Registered Auditors Accounting & Finance | Taxation | Debt Resolution | Consulting | Human Resources Be Constructive Grow Clever Give Back Look ForwardStay Solid Overview: Key Points Directors Certain companies a director’s compliance statement will be required whereby they must acknowledge compliance with both company and tax law; and The directors’ report in accounts to confirm there is no relevant audit information of which auditors are unaware which will lead to increased accountability. Financial Statements and audits Large companies/groups (turnover exceeds €50 million in both the last two financial years) will be obliged to have audit committees; Audit exemption for small groups and guarantee companies has been introduced; An introduction of a provision for revision of defective financial statements; and All companies will now have a limit on changing their financial year end. Miscellaneous All offences will now be categorised and increased penalties imposed for more serious offences (including imprisonment); A requirement for auditors’ reporting for offences falling into category 1 or 2 only; Merger provisions for Irish private entities have been introduced; Companies can now be single member; All liquidators and examiners must now be qualified to act; Directors of insolvent companies to show that they co-operated with liquidator to avoid restriction; There is an optional two-stage registration process for charges; change to definition of charges so that charge over cash and/or bank account no longer required to be registered; and Companies to notify the CRO of anyone who is appointed to bind the company generally, other than directors or officers and the CRO will register the appointment. This appointment will be known as the “registered person”. Conclusion Until the new Companies Acts are affected, the Companies Acts 1963 to 2013 still apply to all registered companies in the State. Until such time, Directors should give consideration to the impending amendments as outlined above and prepare for these in the short term.

9. Contact Us Kieran Noone ACCA, Director T +353 (0) 1 5312400 E kieran@searingpoint.ie Who We Are Searing Point is a firm of accountants founded on the principles of honesty, integrity, rigour, acumen, accessibility, empathy and tenacity. These principles inform the work we do on behalf of our clients every day. We are responsive Accessibility is a key service requirement for our clients. We are available to assist our clients in addressing financial and business issues as they arise. This means that we will revert and acknowledge our clients needs in a timely manner. We are progressive, yet conservative. Our business sense, commercial antennae and understanding of our clients businesses maximise our ability to channel potential opportunity to client businesses and to advise our clients in a strategic and tactical sense. We value integrity, independence, ethics and accessibility as paramount principles. We are honoured to work with clients who share our guiding principles, with whom we can look forward to share a journey of mutual respect and success. Searing Point Limited T/A Searing Point Chartered Accountants Tax Advisors & Registered Auditors Locations Sandyford: Beacon Hub, Bracken Road, Sandyford, Dublin 18 Ph +353 1 531 2400 Malahide: 11 James Terrace, Malahide, Co. Dublin Ph +353 1 845 1200 Gemma Scott Executive Assistant T +353 (0) 1 5312400 E gemma@searingpoint.ie