After section 394 of the 2006 Act, insert -

"394A Individual accounts: exemption for dormant subsidiaries

(1) A company is exempt from the requirement to prepare individual accounts for a financial year if -

(a) it is itself a subsidiary undertaking,

(b) it has been dormant throughout the whole of that year, and

(c) its parent undertaking is established under the law of an EEA State.

(2) Exemption is conditional upon compliance with all of the following conditions -

(a) all members of the company must agree to the exemption in respect of the financial year in question,

(b) the parent undertaking must give a guarantee under section 394C in respect of that year,

(c) the company must be included in the consolidated accounts drawn up for that year or to an earlier date in that year by the parent undertaking in accordance with -

(i) the provisions of the Seventh Directive (83/349/EEC), or

(ii) international accounting standards,