1.Notwithstanding Articles 4 (2), 5 and 6, a Member State shall exempt from the obligation imposed in Article 1 (1) any parent undertaking governed by its national law which is also a subsidiary undertaking if its own parent undertaking is governed by the law of a Member State in the following two cases: (a) where that parent undertaking holds all of the shares in the exempted undertaking. The shares in that undertaking held by members of its administrative, management or supervisory bodies pursuant to an obligation in law or in the memorandum or articles of association shall be ignored for this purpose; or (b) where that parent undertaking holds 90 % or more of the shares in the exempted undertaking and the remaining shareholders in or members of that undertaking have approved the exemption. In so far as the laws of a Member State prescribe consolidation in this case at the time of the adoption of this Directive, that Member State need not apply this provision for 10 years after the date referred to in Article 49 (2).
2.Exemption shall be conditional upon compliance with all of the following conditions: (a) the exempted undertaking and, without prejudice to Articles 13, 14 and 15, all of its subsidiary undertakings must be consolidated in the accounts of a larger body of undertakings, the parent undertaking of which is governed by the law of a Member State; (b) (aa) the consolidated accounts referred to in (a) above and the consolidated annual report of the larger body of undertakings must be drawn up by the parent undertaking of that body and audited, according to the law of the Member State by which the parent undertaking of that larger body of undertakings is governed, in accordance with this Directive; (bb) the consolidated accounts referred to in (a) above and the consolidated annual report referred to in (aa) above, the report by the person responsible for auditing those accounts and, where appropriate, the appendix referred to in Article 9 must be published for the exempted undertaking in the manner prescribed by the law of the Member State governing that undertaking in accordance with Article 38. That Member State may require that those documents be published in its official language and that the translation be certified; (c) the notes on the annual accounts of the exempted undertaking must disclose: (aa) the name and registered office of the parent undertaking that draws up the consolidated accounts referred to in (a) above; and (bb) the exemption from the obligation to draw up consolidated accounts and a consolidated annual report.
3.A Member State need not, however, apply this Article to companies the securities of which have been admitted to official listing on a stock exchange established in a Member State.