Companies Act 1985

• (b) details of the scheme interests awarded to the person during the relevant financial year;

• (c) details of the scheme interests that the person has at the end of the relevant financial year or if earlier on the cessation of the person’s appointment as a director of the company;

• (d) for each scheme interest within paragraphs (a) to (c)—

• (i) the end of the period over which the qualifying conditions for that interest have to be fulfilled (or if there are different periods for different conditions, the end of whichever of those periods ends last); and

• (ii) a description of any variation made in the terms and conditions of the scheme interests during the relevant financial year; and

• (e) for each scheme interest that has vested in the relevant financial year—

• (i) the relevant details (see sub-paragraph (3)) of any shares,

• (ii) the amount of any money, and

• (iii) the value of any other assets,

that have become receivable in respect of the interest.

• (2) The details that sub-paragraph (1)(b) requires of a scheme interest awarded during the relevant financial year include, if shares may become receivable in respect of the interest, the following—

• (a) the number of those shares;

• (b) the market price of each of those shares when the scheme interest was awarded; and

• (c) details of qualifying conditions that are conditions with respect to performance.

• (3) In sub-paragraph (1)(e)(i) “the relevant details”, in relation to any shares that have become receivable in respect of a scheme interest, means—

• (a) the number of those shares;

• (b) the date on which the scheme interest was awarded;

• (c) the market price of each of those shares when the scheme interest was awarded;

• (d) the market price of each of those shares when the scheme interest vested; and

• (e) details of qualifying conditions that were conditions with respect to performance.

12

• (1) The directors’ remuneration report shall, for each person who has served as a director of the company at any time during the relevant financial year, contain the information in respect of pensions that is specified in sub-paragraphs (2) and (3).

• (2) Where the person has rights under a pension scheme that is a defined benefit scheme in relation to the person and any of those rights are rights to which he has become entitled in respect of qualifying services of his—

• (a) details

• (i) of any changes during the relevant financial year in the person’s accrued benefits under the scheme, and

• (ii) of the person’s accrued benefits under the scheme as at the end of that year;

• (b) the transfer value, calculated in a manner consistent with “Retirement Benefit Schemes—Transfer Values (GN 11)” published by the Institute of Actuaries and the Faculty of Actuaries and dated 6th April 2001, of the person’s accrued benefits under the scheme at the end of the relevant financial year;

• (c) the transfer value of the person’s accrued benefits under the scheme that in compliance with paragraph (b) was contained in the director’s remuneration report for the previous financial year or, if there was no such report or no such value was contained in that report, the transfer value, calculated in such a manner as is mentioned in paragraph (b), of the person’s accrued benefits under the scheme at the beginning of the relevant financial year;

• (d) the amount obtained by subtracting—

• (i) the transfer value of the person’s accrued benefits under the scheme that is required to be contained in the report by paragraph (c), from

• (ii) the transfer value of those benefits that is required to be contained in the report by paragraph (b),

and then subtracting from the result of that calculation the amount of any contributions made to the scheme by the person in the relevant financial year.

• (3) Where—

• (a) the person has rights under a pension scheme that is a money purchase scheme in relation to the person, and

• (b) any of those rights are rights to which he has become entitled in respect of qualifying services of his,

details of any contribution to the scheme in respect of the person that is paid or payable by the company for the relevant financial year or paid by the company in that year for another financial year.

13

• (1) Subject to sub-paragraph (3), the directors’ remuneration report shall show in respect of each person who has served as a director of the company—

• (a) at any time during the relevant financial year, or

• (b) at any time before the beginning of that year,

the amount of so much of retirement benefits paid to or receivable by the person under pension schemes as is in excess of the retirement benefits to which he was entitled on the date on which the benefits first became payable or 31st March 1997, whichever is the later.

• (2) In subsection (1) “retirement benefits” means retirement benefits to which the person became entitled in respect of qualifying services of his.

• (3) Amounts paid or receivable under a pension scheme need not be included in an amount required to be shown under sub-paragraph (1) if—

• (a) the funding of the scheme was such that the amounts were or, as the case may be, could have been paid without recourse to additional contributions; and

• (b) amounts were paid to or receivable by all pensioner members of the scheme on the same basis;

and in this sub-paragraph “pensioner member”, in relation to a pension scheme, means any person who is entitled to the present payment of retirement benefits under the scheme.

• (4) In this paragraph—

• (a) references to retirement benefits include benefits otherwise than in cash; and

• (b) in relation to so much of retirement benefits as consists of a benefit otherwise than in cash, references to their amount are to the estimated money value of the benefit;

and the nature of any such benefit shall also be shown in the report.

14

The directors’ remuneration report shall contain details of any significant award made in the relevant financial year to any person who was not a director of the company at the time the award was made but had previously been a director of the company, including (in particular) compensation in respect of loss of office and pensions but excluding any sums which have already been shown in the report under paragraph 6(1)(d).

15

• (1) The directors’ remuneration report shall show, in respect of each person who served as a director of the company at any time during the relevant financial year, the aggregate amount of any consideration paid to or receivable by third parties for making available the services of the person—

• (a) as a director of the company, or

• (b) while director of the company—

• (i) as director of any of its subsidiary undertakings, or

• (ii) as director of any other undertaking of which he was (while director of the company) a director by virtue of the company’s nomination (direct or indirect), or

• (iii) otherwise in connection with the management of the affairs of the company or any such other undertaking.

• (2) The reference to consideration includes benefits otherwise than in cash; and in relation to such consideration the reference to its amount is to the estimated money value of the benefit.

The nature of any such consideration shall be shown in the report.

• (3) The reference to third parties is to persons other than—

• (a) the person himself or a person connected with him or a body corporate controlled by him, and

• (b) the company or any such other undertaking as is mentioned in sub-paragraph (1)(b)(ii).

PART 4 — INTERPRETATION AND SUPPLEMENTARY

16

• (1) In this Schedule—

• “amount”, in relation to a gain made on the exercise of a share option, means the difference between—the market price of the shares on the day on which the option was exercised; andthe price actually paid for the shares;

• “company contributions”, in relation to a pension scheme and a person, means any payments (including insurance premiums) made, or treated as made, to the scheme in respect of the person by anyone other than the person;

• “defined benefit scheme”, in relation to a person, means a pension scheme which is not a money purchase scheme in relation to the person;

• “emoluments” of a person—includes salary, fees and bonuses, sums paid by way of expenses allowance (so far as they are chargeable to United Kingdom income tax or would be if the person were an individual) but,does not include any of the following, namely—the value of any share options granted to him or the amount of any gains made on the exercise of any such options;any company contributions paid, or treated as paid, in respect of him under any pension scheme or any benefits to which he is entitled under any such scheme; orany money or other assets paid to or received or receivable by him under any long term incentive scheme;

• “long term incentive scheme” has the meaning given by paragraph 10(5);

• “money purchase benefits”, in relation to a person, means retirement benefits the rate or amount of which is calculated by reference to payments made, or treated as made, by the person or by any other person in respect of that person and which are not average salary benefits;

• “money purchase scheme”, in relation to a person , means a pension scheme under which all of the benefits that may become payable to or in respect of the person are money purchase benefits in relation to the person;

• “pension scheme” means a retirement benefits scheme within the meaning given by section 611 of the Income and Corporation Taxes Act 1988;

• “qualifying services”, in relation to any person, means his services as a director of the company, and his services at any time while he is a director of the company—as a director of an undertaking that is a subsidiary undertaking of the company at that time;as a director of any other undertaking of which he is a director by virtue of the company’s nomination (direct or indirect); orotherwise in connection with the management of the affairs of the company or any such subsidiary undertaking or any such other undertaking;

• “retirement benefits” means relevant benefits within the meaning given by section 612(1) of the Income and Corporation Taxes Act 1988;

• “shares” means shares (whether allotted or not) in the company, or any undertaking which is a group undertaking in relation to the company, and includes a share warrant as defined by section 188(1);

• “share option” means a right to acquire shares;

• “value” , in relation to shares received or receivable on any day by a person who is or has been a director of the company, means the market price of the shares on that day.

• (2) In this Schedule “compensation in respect of loss of office” includes compensation received or receivable by a person for—

• (a) loss of office as director of the company, or

• (b) loss, while director of the company or on or in connection with his ceasing to be a director of it, of—

• (i) any other office in connection with the management of the company’s affairs, or

• (ii) any office as director or otherwise in connection with the management of the affairs of any undertaking that, immediately before the loss, is a subsidiary undertaking of the company or an undertaking of which he is a director by virtue of the company’s nomination (direct or indirect);

• (c) compensation in consideration for, or in connection with, a person’s retirement from office; and

• (d) where such a retirement is occasioned by a breach of the person’s contract with the company or with an undertaking that, immediately before the breach, is a subsidiary undertaking of the company or an undertaking of which he is a director by virtue of the company’ s nomination (direct or indirect)—

• (i) payments made by way of damages for the breach; or

• (ii) payments made by way of settlement or compromise of any claim in respect of the breach.

• (3) References in this Schedule to compensation include benefits otherwise than in cash; and in relation to such compensation references in this Schedule to its amount are to the estimated money value of the benefit.

• (4) References in this Schedule to a person being “connected” with a director, and to a director “controlling” a body corporate, shall be construed in accordance with section 346.

17

• (1) For the purposes of this Schedule emoluments paid or receivable or share options granted in respect of a person’s accepting office as a director shall be treated as emoluments paid or receivable or share options granted in respect of his services as a director.

• (2) Where a pension scheme provides for any benefits that may become payable to or in respect of a person to be whichever are the greater of—

• (a) such benefits determined by or under the scheme as are money purchase benefits in relation to the person; and

• (b) such retirement benefits determined by or under the scheme to be payable to or in respect of the person as are not money purchase benefits in relation to the person,

the company may assume for the purposes of this Schedule that those benefits will be money purchase benefits in relation to the person, or not, according to whichever appears more likely at the end of the relevant financial year.

• (3) In determining for the purposes of this Schedule whether a pension scheme is a money purchase scheme in relation to a person or a defined benefit scheme in relation to a person, any death in service benefits provided for by the scheme shall be disregarded.

18

• (1) The following applies with respect to the amounts to be shown under this Schedule.

• (2) The amount in each case includes all relevant sums paid by or receivable from—

• (a) the company; and

• (b) the company’s subsidiary undertakings; and

• (c) any other person,

except sums to be accounted for to the company or any of its subsidiary undertakings or any other undertaking of which any person has been a director while director of the company, by virtue of sections 314 and 315 of this Act (duty of directors to make disclosure on company takeover; consequence of non-compliance), to past or present members of the company or any of its subsidiaries or any class of those members.

• (3) References to amounts paid to or receivable by a person include amounts paid to or receivable by a person connected with him or a body corporate controlled by him (but not so as to require an amount to be counted twice).

19

• (1) The amounts to be shown for any financial year under Part 3 of this Schedule are the sums receivable in respect of that year (whenever paid) or, in the case of sums not receivable in respect of a period, the sums paid during that year.

• (2) But where—

• (a) any sums are not shown in the directors’ remuneration report for the relevant financial year on the ground that the person receiving them is liable to account for them as mentioned in paragraph 18(2), but the liability is thereafter wholly or partly released or is not enforced within a period of 2 years; or

• (b) any sums paid by way of expenses allowance are charged to United Kingdom income tax after the end of the relevant financial year or, in the case of any such sums paid otherwise than to an individual, it does not become clear until the end of the relevant financial year that those sums would be charged to such tax were the person an individual,

those sums shall, to the extent to which the liability is released or not enforced or they are charged as mentioned above (as the case may be), be shown in the first directors’ remuneration report in which it is practicable to show them and shall be distinguished from the amounts to be shown apart from this provision.

20

Where it is necessary to do so for the purpose of making any distinction required by the preceding paragraphs in an amount to be shown in compliance with this Part of this Schedule, the directors may apportion any payments between the matters in respect of which these have been paid or are receivable in such manner as they think appropriate.

21

This Schedule requires information to be given only so far as it is contained in the company’s books and papers, available to members of the public or the company has the right to obtain it.

SCHEDULE 7B

Part 1 — Specified persons

1

The Secretary of State.

2

The Department of Enterprise, Trade and Investment for Northern Ireland.

3

The Treasury.

4

The Bank of England.

5

The Financial Services Authority.

6

The Commissioners of Inland Revenue.

Part 2 — Specified descriptions of disclosures

7

A disclosure for the purpose of assisting a body designated by an order under section 46 of the Companies Act 1989 (delegation of functions of Secretary of State) to exercise its functions under Part 2 of that Act.

8

A disclosure with a view to the institution of, or otherwise for the purposes of, disciplinary proceedings relating to the performance by an accountant or auditor of his professional duties.

9

A disclosure for the purpose of enabling or assisting the Secretary of State or the Treasury to exercise any of their functions under any of the following—

• (a) this Act;

• (b) the insider dealing legislation;

• (c) the Insolvency Act 1986;

• (d) the Company Directors Disqualification Act 1986;

• (e) the Financial Services and Markets Act 2000.

10

A disclosure for the purpose of enabling or assisting the Department of Enterprise, Trade and Investment for Northern Ireland to exercise any powers conferred on it by the enactments relating to companies or insolvency.

11

A disclosure for the purpose of enabling or assisting the Bank of England to exercise its functions.

12

A disclosure for the purpose of enabling or assisting the Commissioners of Inland Revenue to exercise their functions.

13

A disclosure for the purpose of enabling or assisting the Financial Services Authority to exercise its functions under any of the following—

• (a) the legislation relating to friendly societies or to industrial and provident societies;

• (b) the Building Societies Act 1986;

• (c) Part 7 of the Companies Act 1989;

• (d) the Financial Services and Markets Act 2000.

14

A disclosure in pursuance of any Community obligation.

Part 3 — Overseas regulatory bodies

15

A disclosure is made in accordance with this Part of this Schedule if—

• (a) it is made to a body within paragraph 16, and

• (b) it is made for the purpose of enabling or assisting that body to exercise the functions mentioned in that paragraph.

16

A body is within this paragraph if it exercises functions of a public nature under legislation in any country or territory outside the United Kingdom which appear to the authorised person to be similar to his functions under section 245B of this Act.

17

In determining whether to disclose information to a body in accordance with this Part of this Schedule, the authorised person must have regard to the following considerations—

• (a) whether the use which the body is likely to make of the information is sufficiently important to justify making the disclosure; and

• (b) whether the body has adequate arrangements to prevent the information from being used or further disclosed other than for the purposes of carrying out the functions mentioned in paragraph 16 or any other purposes substantially similar to those for which information disclosed to the authorised person could be used or further disclosed.

SECTION A — INDIVIDUAL ACCOUNTS

SECTION B — GROUP ACCOUNTS

SECTION C — SUPPLEMENTARY PROVISIONS

Section A — General Rules

5A

The directors of a company must, in determining how amounts are presented within items in the profit and loss account and balance sheet, have regard to the substance of the reported transaction or arrangement, in accordance with generally accepted accounting principles or practice.

Section B — The Required Formats for Accounts

Preliminary

Balance Sheet Formats

Share capital and debentures

A

Called up share capital not paid(1)

B

Fixed assets

• (I) Intangible assets

• (1) Goodwill(2)

• (2) Other intangible assets(3)

• (II) Tangible assets

• (1) Land and buildings

• (2) Plant and machinery etc.

• (III) Investments

• (1) Shares in group undertakings and participating interests

• (2) Loans to group undertakings and undertakings in which the company has a participating interest

• (3) Other investments other than loans

• (4) Other investments(4)

C

Current assets

• (I) Stocks

• (1) Stocks

• (2) Payments on account

• (II) Debtors(5)

• (1) Trade debtors

• (2) Amounts owed by group undertakings and undertakings in which the company has a participating interest

• (3) Other debtors

• (III) Investments

• (1) Shares in group undertakings

• (2) Other investments

• (IV) Cash at bank and in hand

D

Prepayments and accrued income(6)

E

Creditors: amounts falling due within one year

• (1) Bank loans and overdrafts

• (2) Trade creditors

• (3) Amounts owed to group undertakings and undertakings in which the company has a participating interest

• (4) Other creditors(7)

F

Net current assets (liabilities)(8)

G

Total assets less current liabilities

H

Creditors: amounts falling due after more than one year

• (1) Bank loans and overdrafts

• (2) Trade creditors

• (3) Amounts owed to group undertakings and undertakings in which the company has a participating interest

• (4) Other creditors(7)

I

Provisions for liabilities

J

Accruals and deferred income(7)

K

Capital and reserves

• (I) Called up share capital(9)

• (II) Share premium account

• (III) Revaluation reserve

• (IV) Other reserves

• (V) Profit and loss account

Balance Sheet Formats

General

A

Called up share capital not paid(1)

B

Fixed assets

• (I) Intangible assets

• (1) Goodwill(2)

• (2) Other intangible assets(3)

• (II) Tangible assets

• (1) Land and buildings

• (2) Plant and machinery etc.

• (III) Investments

• (1) Shares in group undertakings and participating interests

• (2) Loans to group undertakings and undertakings in which the company has a participating interest

• (3) Other investments other than loans

• (4) Other investments(4)

C

Current assets

• (I) Stocks

• (1) Stocks

• (2) Payments on account

• (II) Debtors(5)

• (1) Trade debtors

• (2) Amounts owed by group undertakings and undertakings in which the company has a participating interest

• (3) Other debtors

• (III) Investments

• (1) Shares in group undertakings

• (2) Other investments

• (IV) Cash at bank and in hand

D

Prepayments and accrued income(6)

A

Capital and reserves

• (I) Called up share capital(9)

• (II) Share premium account

• (III) Revaluation reserve

• (IV) Other reserves

• (V) Profit and loss account

B

Provisions for liabilities

C

Creditors(10)

• (1) Bank loans and overdrafts

• (2) Trade creditors

• (3) Amounts owed to group undertakings and undertakings in which the company has a participating interest

• (4) Other creditors(7)

D

Accruals and deferred income(7)

Notes on the balance sheet formats

Profit and loss account formats

Profit and loss account formats

5.

7.

Profit and loss account formats

A. Charges

B. Income

Profit and loss account formats

A. Charges

2.

4.

B. Income

Notes on the profit and loss account formats

Section A — Accounting Principles

Preliminary

Accounting principles

Departure from the accounting principles

Section B — Historical Cost Accounting Rules

Preliminary

Fixed assets

Rules for determining particular fixed asset items

Current assets

Miscellaneous and supplementary provisions

Excess of money owed over value received as an asset item

24

• (1) Where the amount repayable on any debt owed by a small company is greater than the value of the consideration received in the transaction giving rise to the debt, the amount of the difference may be treated as an asset.

• (2) Where any such amount is so treated—

• (a) it shall be written off by reasonable amounts each year and must be completely written off before repayment of the debt; and

• (b) if the current amount is not shown as a separate item in the company’s balance sheet it must be disclosed in a note to the accounts.

Assets included at a fixed amount

25

• (1) Subject to the following sub-paragraph, assets which fall to be included—

• (a) amongst the fixed assets of a small company under the item “tangible assets”; or

• (b) amongst the current assets of a small company under the item “raw materials and consumables”;

may be included at a fixed quantity and value.

• (2) Sub-paragraph (1) applies to assets of a kind which are constantly being replaced, where—

• (a) their overall value is not material to assessing the company’s state of affairs; and

• (b) their quantity, value and composition are not subject to material variation.

Determination of purchase price or production cost

26

• (1) The purchase price of an asset shall be determined by adding to the actual price paid any expenses incidental to its acquisition.

• (2) The production cost of an asset shall be determined by adding to the purchase price of the raw materials and consumables used the amount of the costs incurred by the company which are directly attributable to the production of that asset.

• (3) In addition, there may be included in the production cost of an asset—

• (a) a reasonable proportion of the costs incurred by the company which are only indirectly attributable to the production of that asset, but only to the extent that they relate to the period of production; and

• (b) interest on capital borrowed to finance the production of that asset, to the extent that it accrues in respect of the period of production;

provided, however, in a case within paragraph (b) above, that the inclusion of the interest in determining the cost of that asset and the amount of the interest so included is disclosed in a note to the accounts.

• (4) In the case of current assets distribution costs may not be included in production costs.

27

• (1) Subject to the qualification mentioned below, the purchase price or production cost of—

• (a) any assets which fall to be included under any item shown in a small company’s balance sheet under the general item “stocks”; and

• (b) any assets which are fungible assets (including investments);

may be determined by the application of any of the methods mentioned in sub-paragraph (2) below in relation to any such assets of the same class.

• (2) Those methods are—

• (a) the method known as “first in, first out” (FIFO);

• (b) the method known as “last in, first out” (LIFO);

• (c) a weighted average price; and

• (d) any other method similar to any of the methods mentioned above.

• (3) For the purposes of this paragraph, assets of any description shall be regarded as fungible if assets of that description are substantially indistinguishable one from another.

Substitution of original stated amount where price or cost unknown

28

Where there is no record of the purchase price or production cost of any asset of a small company or of any price, expenses or costs relevant for determining its purchase price or production cost in accordance with paragraph 26, or any such record cannot be obtained without unreasonable expense or delay, its purchase price or production cost shall be taken for the purposes of paragraphs 17 to 23 to be the value ascribed to it in the earliest available record of its value made on or after its acquisition or production by the company.

Section C — Alternative Accounting Rules

Preliminary

29

• (1) The rules set out in section B are referred to below in this Schedule as the historical cost accounting rules.

• (2) Those rules, with the omission of paragraphs 16, 21 and 25 to 28, are referred to below in this Part of this Schedule as the depreciation rules; and references below in this Schedule to the historical cost accounting rules do not include the depreciation rules as they apply by virtue of paragraph 32.

30

Subject to paragraphs 32 to 34, the amounts to be included in respect of assets of any description mentioned in paragraph 31 may be determined on any basis so mentioned.

Alternative accounting rules

31

• (1) Intangible fixed assets, other than goodwill, may be included at their current cost.

• (2) Tangible fixed assets may be included at a market value determined as at the date of their last valuation or at their current cost.

• (3) Investments of any description falling to be included under item B.III of either of the balance sheet formats set out in Part I of this Schedule may be included either—

• (a) at a market value determined as at the date of their last valuation; or

• (b) at a value determined on any basis which appears to the directors to be appropriate in the circumstances of the company;

but in the latter case particulars of the method of valuation adopted and of the reasons for adopting it shall be disclosed in a note to the accounts.

• (4) Investments of any description falling to be included under item C.III of either of the balance sheet formats set out in Part I of this Schedule may be included at their current cost.

• (5) Stocks may be included at their current cost.

Application of the depreciation rules

32

• (1) Where the value of any asset of a small company is determined on any basis mentioned in paragraph 31, that value shall be, or (as the case may require) be the starting point for determining, the amount to be included in respect of that asset in the company’s accounts, instead of its purchase price or production cost or any value previously so determined for that asset; and the depreciation rules shall apply accordingly in relation to any such asset with the substitution for any reference to its purchase price or production cost of a reference to the value most recently determined for that asset on any basis mentioned in paragraph 31.

• (2) The amount of any provision for depreciation required in the case of any fixed asset by paragraph 18 or 19 as it applies by virtue of sub-paragraph (1) is referred to below in this paragraph as the adjusted amount, and the amount of any provision which would be required by that paragraph in the case of that asset according to the historical cost accounting rules is referred to as the historical cost amount.

• (3) Where sub-paragraph (1) applies in the case of any fixed asset the amount of any provision for depreciation in respect of that asset—

• (a) included in any item shown in the profit and loss account in respect of amounts written off assets of the description in question; or

• (b) taken into account in stating any item so shown which is required by note (11) of the notes on the profit and loss account formats set out in Part I of this Schedule to be stated after taking into account any necessary provision for depreciation or diminution in value of assets included under it;

may be the historical cost amount instead of the adjusted amount, provided that the amount of any difference between the two is shown separately in the profit and loss account or in a note to the accounts.

Additional information to be provided in case of departure from historical cost accounting rules

33

• (1) This paragraph applies where the amounts to be included in respect of assets covered by any items shown in a small company’s accounts have been determined on any basis mentioned in paragraph 31.

• (2) The items affected and the basis of valuation adopted in determining the amounts of the assets in question in the case of each such item shall be disclosed in a note to the accounts.

• (3) In the case of each balance sheet item affected (except stocks) either—

• (a) the comparable amounts determined according to the historical cost accounting rules; or

• (b) the differences between those amounts and the corresponding amounts actually shown in the balance sheet in respect of that item;

shall be shown separately in the balance sheet or in a note to the accounts.

• (4) In sub-paragraph (3) above, references in relation to any item to the comparable amounts determined as there mentioned are references to—

• (a) the aggregate amount which would be required to be shown in respect of that item if the amounts to be included in respect of all the assets covered by that item were determined according to the historical cost accounting rules; and

• (b) the aggregate amount of the cumulative provisions for depreciation or diminution in value which would be permitted or required in determining those amounts according to those rules.

Revaluation reserve

34

• (1) With respect to any determination of the value of an asset of a small company on any basis mentioned in paragraph 31, the amount of any profit or loss arising from that determination (after allowing, where appropriate, for any provisions for depreciation or diminution in value made otherwise than by reference to the value so determined and any adjustments of any such provisions made in the light of that determination) shall be credited or (as the case may be) debited to a separate reserve ( “the revaluation reserve”).

• (2) The amount of the revaluation reserve shall be shown in the company’s balance sheet under a separate sub-heading in the position given for the item “revaluation reserve” in Format 1 or 2 of the balance sheet formats set out in Part I of this Schedule, but need not be shown under that name.

• (3) An amount may be transferred—

• (a) from the revaluation reserve—

• (i) to the profit and loss account, if the amount was previously charged to that account or represents realised profit, or

• (ii) on capitalisation,

• (b) to or from the revaluation reserve in respect of the taxation relating to any profit or loss credited or debited to the reserve;

and the revaluation reserve shall be reduced to the extent that the amounts transferred to it are no longer necessary for the purposes of the valuation method used.

• (4) In sub-paragraph (3)(a)(ii) “capitalisation”, in relation to an amount standing to the credit of the revaluation reserve, means applying it in wholly or partly paying up unissued shares in the company to be allotted to members of the company as fully or partly paid shares.

• (5) The revaluation reserve shall not be reduced except as mentioned in this paragraph.

• (6) The treatment for taxation purposes of amounts credited or debited to the revaluation reserve shall be disclosed in a note to the accounts.

SECTION D — FAIR VALUE ACCOUNTING

Inclusion of financial instruments at fair value

34A

• (1) Subject to sub-paragraphs (2) to (4), financial instruments (including derivatives) may be included at fair value.

• (2) Sub-paragraph (1) does not apply to financial instruments which constitute liabilities unless–

• (a) they are held as part of a trading portfolio, or

• (b) they are derivatives.

• (3) Sub-paragraph (1) does not apply to–

• (a) financial instruments (other than derivatives) held to maturity;

• (b) loans and receivables originated by the company and not held for trading purposes;

• (c) interests in subsidiary undertakings, associated undertakings and joint ventures;

• (d) equity instruments issued by the company;

• (e) contracts for contingent consideration in a business combination;

• (f) other financial instruments with such special characteristics that the instruments, according to generally accepted accounting principles or practice, should be accounted for differently from other financial instruments.

• (4) If the fair value of a financial instrument cannot be determined reliably in accordance with paragraph 34B, sub-paragraph (1) does not apply to that financial instrument.

• (5) In this paragraph–

• “associated undertaking” has the meaning given by paragraph 20 of Schedule 4A; and

• “joint venture” has the meaning given by paragraph 19 of that Schedule.

Determination of fair value

34B

• (1) The fair value of a financial instrument is determined in accordance with this paragraph.

• (2) If a reliable market can readily be identified for the financial instrument, its fair value is determined by reference to its market value.

• (3) If a reliable market cannot readily be identified for the financial instrument but can be identified for its components or for a similar instrument, its fair value is determined by reference to the market value of its components or of the similar instrument.

• (4) If neither sub-paragraph (2) nor (3) applies, the fair value of the financial instrument is a value resulting from generally accepted valuation models and techniques.

• (5) Any valuation models and techniques used for the purposes of sub-paragraph (4) must ensure a reasonable approximation of the market value.

Inclusion of hedged items at fair value

34C

A company may include any assets and liabilities that qualify as hedged items under a fair value hedge accounting system, or identified portions of such assets or liabilities, at the amount required under that system.

Other assets that may be included at fair value

34D

• (1) This paragraph applies to–

• (a) investment property, and

• (b) living animals and plants,

that, under international accounting standards, may be included in accounts at fair value.

• (2) Such investment property and such living animals and plants may be included at fair value, provided that all such investment property or, as the case may be, all such living animals and plants are so included where their fair value can reliably be determined.

• (3) In this paragraph, “fair value” means fair value determined in accordance with relevant international accounting standards.

Accounting for changes in value

34E

• (1) This paragraph applies where a financial instrument is valued in accordance with paragraph 34A or 34C or an asset is valued in accordance with paragraph 34D.

• (2) Notwithstanding paragraph 12 of this Schedule, and subject to sub-paragraphs (3) and (4) below, a change in the value of the financial instrument or of the investment property or living animal or plant must be included in the profit and loss account.

• (3) Where–

• (a) the financial instrument accounted for is a hedging instrument under a hedge accounting system that allows some or all of the change in value not to be shown in the profit and loss account, or

• (b) the change in value relates to an exchange difference arising on a monetary item that forms part of a company’s net investment in a foreign entity,

the amount of the change in value must be credited to or (as the case may be) debited from a separate reserve (“the fair value reserve”).

• (4) Where the instrument accounted for–

• (a) is an available for sale financial asset, and

• (b) is not a derivative,

the change in value may be credited to or (as the case may be) debited from the fair value reserve.

The fair value reserve

34F

• (1) The fair value reserve must be adjusted to the extent that the amounts shown in it are no longer necessary for the purposes of paragraph 34E(3) or (4).

• (2) The treatment for taxation purposes of amounts credited or debited to the fair value reserve must be disclosed in a note to the accounts.

Preliminary

35

Any information required in the case of any small company by the following provisions of this Part of this Schedule shall (if not given in the company’s accounts) be given by way of a note to those accounts.

Minority interests and associated undertakings

35A

There must be stated–

• (a) any amount set aside or proposed to be set aside to, or withdrawn or proposed to be withdrawn from, reserves,

• (b) the aggregate amount of dividends paid in the financial year (other than those for which a liability existed at the immediately preceding balance sheet date),

• (c) the aggregate amount of dividends that the company is liable to pay at the balance sheet date, and

• (d) the aggregate amount of dividends that are proposed before the date of approval of the accounts, and not otherwise disclosed under paragraph (b) or (c).

Disclosure of accounting policies

36

The accounting policies adopted by the company in determining the amounts to be included in respect of items shown in the balance sheet and in determining the profit or loss of the company shall be stated (including such policies with respect to the depreciation and diminution in value of assets).

Information supplementing the balance sheet

37

Paragraphs 38 to 47 require information which either supplements the information given with respect to any particular items shown in the balance sheet or is otherwise relevant to assessing the company’s state of affairs in the light of the information so given.

Share capital and debentures

38

• (1) The following information shall be given with respect to the company’s share capital—

• (a) the authorised share capital; and

• (b) where shares of more than one class have been allotted, the number and aggregate nominal value of shares of each class allotted.

• (2) In the case of any part of the allotted share capital that consists of redeemable shares, the following information shall be given—

• (a) the earliest and latest dates on which the company has power to redeem those shares;

• (b) whether those shares must be redeemed in any event or are liable to be redeemed at the option of the company or of the shareholder; and

• (c) whether any (and, if so, what) premium is payable on redemption.

39

If the company has allotted any shares during the financial year, the following information shall be given—

• (a) the classes of shares allotted; and

• (b) as respects each class of shares, the number allotted, their aggregate nominal value, and the consideration received by the company for the allotment.

Fixed assets

40

• (1) In respect of each item which is or would but for paragraph 3(4)(b) be shown under the general item “fixed assets” in the company’s balance sheet the following information shall be given—

• (a) the appropriate amounts in respect of that item as at the date of the beginning of the financial year and as at the balance sheet date respectively;

• (b) the effect on any amount shown in the balance sheet in respect of that item of—

• (i) any revision of the amount in respect of any assets included under that item made during that year on any basis mentioned in paragraph 31;

• (ii) acquisitions during that year of any assets;

• (iii) disposals during that year of any assets; and

• (iv) any transfers of assets of the company to and from that item during that year.

• (2) The reference in sub-paragraph (1)(a) to the appropriate amounts in respect of any item as at any date there mentioned is a reference to amounts representing the aggregate amounts determined, as at that date, in respect of assets falling to be included under that item on either of the following bases, that is to say—

• (a) on the basis of purchase price or production cost (determined in accordance with paragraphs 26 and 27); or

• (b) on any basis mentioned in paragraph 31,

(leaving out of account in either case any provisions for depreciation or diminution in value).

• (3) In respect of each item within sub-paragraph (1)—

• (a) the cumulative amount of provisions for depreciation or diminution in value of assets included under that item as at each date mentioned in sub-paragraph (1)(a);

• (b) the amount of any such provisions made in respect of the financial year;

• (c) the amount of any adjustments made in respect of any such provisions during that year in consequence of the disposal of any assets; and

• (d) the amount of any other adjustments made in respect of any such provisions during that year;

shall also be stated.

41

Where any fixed assets of the company (other than listed investments) are included under any item shown in the company’s balance sheet at an amount determined on any basis mentioned in paragraph 31, the following information shall be given—

• (a) the years (so far as they are known to the directors) in which the assets were severally valued and the several values; and

• (b) in the case of assets that have been valued during the financial year, the names of the persons who valued them or particulars of their qualifications for doing so and (whichever is stated) the bases of valuation used by them.

Investments

42

• (1) In respect of the amount of each item which is or would but for paragraph 3(4)(b) be shown in the company’s balance sheet under the general item “investments” (whether as fixed assets or as current assets) there shall be stated how much of that amount is ascribable to listed investments.

• (2) Where the amount of any listed investments is stated for any item in accordance with sub-paragraph (1), the following amounts shall also be stated—

• (a) the aggregate market value of those investments where it differs from the amount so stated; and

• (b) both the market value and the stock exchange value of any investments of which the former value is, for the purposes of the accounts, taken as being higher than the latter.

42A

• (1) This paragraph applies where financial instruments have been valued in accordance with paragraph 34A or 34C.

• (2) There must be stated–

• (a) where the fair value of the instruments has been determined in accordance with paragraph 34B(4), the significant assumptions underlying the valuation models and techniques used,

• (b) for each category of financial instrument, the fair value of the instruments in that category and the changes in value–

• (i) included in the profit and loss account, and

• (ii) credited to or (as the case may be) debited from the fair value reserve,

in respect of those instruments, and

• (c) for each class of derivatives, the extent and nature of the instruments, including significant terms and conditions that may affect the amount, timing and certainty of future cash flows.

• (3) Where any amount is transferred to or from the fair value reserve during the financial year, there must be stated in tabular form–

• (a) the amount of the reserve as at the date of the beginning of the financial year and as at the balance sheet date respectively;

• (b) the amount transferred to or from the reserve during that year; and

• (c) the source and application respectively of the amounts so transferred.

42B

• (1) Sub-paragraph (2) applies if–

• (a) the company has financial fixed assets that could be included at fair value by virtue of paragraph 34A,

• (b) the amount at which those assets are included under any item in the company’s accounts is in excess of their fair value, and

• (c) the company has not made provision for diminution in value of those assets in accordance with paragraph 19(1) of this Schedule.

• (2) There must be stated–

• (a) the amount at which either the individual assets or appropriate groupings of those individual assets are included in the company’s accounts,

• (b) the fair value of those assets or groupings, and

• (c) the reasons for not making a provision for diminution in value of those assets, including the nature of the evidence that provides the basis for the belief that the amount at which they are stated in the accounts will be recovered.

42C

• (1) This paragraph applies where the amounts to be included in a company’s accounts in respect of investment property or living animals and plants have been determined in accordance with paragraph 34D.

• (2) The balance sheet items affected and the basis of valuation adopted in determining the amounts of the assets in question in the case of each such item must be disclosed in a note to the accounts.

• (3) In the case of investment property, for each balance sheet item affected there must be shown, either separately in the balance sheet or in a note to the accounts–

• (a) the comparable amounts determined according to the historical cost accounting rules; or

• (b) the differences between those amounts and the corresponding amounts actually shown in the balance sheet in respect of that item.

• (4) In sub-paragraph (3) above, references in relation to any item to the comparable amounts determined in accordance with that sub-paragraph are references to–

• (a) the aggregate amount which would be required to be shown in respect of that item if the amounts to be included in respect of all the assets covered by that item were determined according to the historical cost accounting rules; and

• (b) the aggregate amount of the cumulative provisions for depreciation or diminution in value which would be permitted or required in determining those amounts according to those rules.

Reserves and provisions

43

• (1) Where any amount is transferred—

• (a) to or from any reserves; or

• (b) to any provisions for liabilities or

• (c) from any provision for liabilities otherwise than for the purpose for which the provision was established;

and the reserves or provisions are or would but for paragraph 3(4)(b) be shown as separate items in the company’s balance sheet, the information mentioned in the following sub-paragraph shall be given in respect of the aggregate of reserves or provisions included in the same item.

• (2) That information is—

• (a) the amount of the reserves or provisions as at the date of the beginning of the financial year and as at the balance sheet date respectively;

• (b) any amounts transferred to or from the reserves or provisions during that year; and

• (c) the source and application respectively of any amounts so transferred.

• (3) Particulars shall be given of each provision included in the item “other provisions” in the company’s balance sheet in any case where the amount of that provision is material.

Details of indebtedness

44

• (1) For the aggregate of all items shown under “creditors” in the company’s balance sheet there shall be stated the aggregate of the following amounts, that is to say—

• (a) the amount of any debts included under “creditors” which are payable or repayable otherwise than by instalments and fall due for payment or repayment after the end of the period of five years beginning with the day next following the end of the financial year; and

• (b) in the case of any debts so included which are payable or repayable by instalments, the amount of any instalments which fall due for payment after the end of that period.

• (2) In respect of each item shown under “creditors” in the company’s balance sheet there shall be stated the aggregate amount of any debts included under that item in respect of which any security has been given by the company.

• (3) References above in this paragraph to an item shown under “creditors” in the company’s balance sheet include references, where amounts falling due to creditors within one year and after more than one year are distinguished in the balance sheet—

• (a) in a case within sub-paragraph (1), to an item shown under the latter of those categories; and

• (b) in a case within sub-paragraph (2), to an item shown under either of those categories;

and references to items shown under “creditors” include references to items which would but for paragraph 3(4)(b) be shown under that heading.

45

If any fixed cumulative dividends on the company’s shares are in arrear, there shall be stated—

• (a) the amount of the arrears; and

• (b) the period for which the dividends or, if there is more than one class, each class of them are in arrear.

Guarantees and other financial commitments

46

• (1) Particulars shall be given of any charge on the assets of the company to secure the liabilities of any other person, including, where practicable, the amount secured.

• (2) The following information shall be given with respect to any other contingent liability not provided for—

• (a) the amount or estimated amount of that liability;

• (b) its legal nature; and

• (c) whether any valuable security has been provided by the company in connection with that liability and if so, what.

• (3) There shall be stated, where practicable, the aggregate amount or estimated amount of contracts for capital expenditure, so far as not provided for.

• (4) Particulars shall be given of—

• (a) any pension commitments included under any provision shown in the company’s balance sheet; and

• (b) any such commitments for which no provision has been made;

and where any such commitment relates wholly or partly to pensions payable to past directors of the company separate particulars shall be given of that commitment so far as it relates to such pensions.

• (5) Particulars shall also be given of any other financial commitments which—

• (a) have not been provided for; and

• (b) are relevant to assessing the company’s state of affairs.

• (6) Commitments within any of sub-paragraphs (1) to (5) which are undertaken on behalf of or for the benefit of—

• (a) any parent undertaking or fellow subsidiary undertaking, or

• (b) any subsidiary undertaking of the company,

shall be stated separately from the other commitments within that sub-paragraph, and commitments within paragraph (a) shall also be stated separately from those within paragraph (b).

Miscellaneous matters

47

Particulars shall be given of any case where the purchase price or production cost of any asset is for the first time determined under paragraph 28.

Information supplementing the profit and loss account

48

Paragraphs 49 and 50 require information which either supplements the information given with respect to any particular items shown in the profit and loss account or otherwise provides particulars of income or expenditure of the company or of circumstances affecting the items shown in the profit and loss account.

Particulars of turnover

49

• (1) If the company has supplied geographical markets outside the United Kingdom during the financial year in question, there shall be stated the percentage of its turnover that, in the opinion of the directors, is attributable to those markets.

• (2) In analysing for the purposes of this paragraph the source of turnover, the directors of the company shall have regard to the manner in which the company’s activities are organised.

Miscellaneous matters

50

• (1) Where any amount relating to any preceding financial year is included in any item in the profit and loss account, the effect shall be stated.

• (2) Particulars shall be given of any extraordinary income or charges arising in the financial year.

• (3) The effect shall be stated of any transactions that are exceptional by virtue of size or incidence though they fall within the ordinary activities of the company.

General

51

• (1) Where sums originally denominated in foreign currencies have been brought into account under any items shown in the balance sheet or profit and loss account, the basis on which those sums have been translated into sterling shall be stated.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dormant companies acting as agents

51A

Where the directors of a company take advantage of the exemption conferred by section 249AA, and the company has during the financial year in question acted as an agent for any person, the fact that it has so acted must be stated.

PART IV — INTERPRETATION OF SCHEDULE

52

The following paragraphs apply for the purposes of this Schedule and its interpretation.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52A

References to “derivatives” include commodity-based contracts that give either contracting party the right to settle in cash or in some other financial instrument, except when such contracts–

• (a) were entered into for the purpose of, and continue to meet, the company’s expected purchase, sale or usage requirements,

• (b) were designated for such purpose at their inception, and

• (c) are expected to be settled by delivery of the commodity.

52B

• (1) The expressions listed in sub-paragraph (2) have the same meaning as they have in Council Directive 78/660/EEC on the annual accounts of certain types of companies, as amended.

• (2) Those expressions are “available for sale financial asset”, “business combination”, “commodity-based contracts”, “derivative”, “equity instrument”, “exchange difference”, “fair value hedge accounting system”, “financial fixed asset”, “financial instrument”, “foreign entity”, “hedge accounting”, “hedge accounting system”, “hedged items”, “hedging instrument”, “held for trading purposes”, “held to maturity”, “monetary item”, “receivables”, “reliable market” and “trading portfolio”

Historical cost accounting rules

53

References to the historical cost accounting rules shall be read in accordance with paragraph 29.

53A

“Investment property” means land held to earn rent or for capital appreciation.

Listed investments

54

• (1) “Listed investment” means an investment as respects which there has been granted a listing on—

• (a) a recognised investment exchange other than an overseas investment exchange; or

• (b) a stock exchange of repute outside Great Britain.

• (2) “Recognised investment exchange” and “overseas investment exchange” have the meaning given in Part 18 of the Financial Services and Markets Act 2000.

Loans

55

A loan is treated as falling due for repayment, and an instalment of a loan is treated as falling due for payment, on the earliest date on which the lender could require repayment or (as the case may be) payment, if he exercised all options and rights available to him.

Materiality

56

Amounts which in the particular context of any provision of this Schedule are not material may be disregarded for the purposes of that provision.

Provisions

57

• (1) References to provisions for depreciation or diminution in value of assets are to any amount written off by way of providing for depreciation or diminution in value of assets.

• (2) Any reference in the profit and loss account formats set out in Part I of this Schedule to the depreciation of, or amounts written off, assets of any description is to any provision for depreciation or diminution in value of assets of that description.

58

References to provisions for liabilities are to any amount retained as reasonably necessary for the purpose of providing for any liability the nature of which is clearly defined and which is either likely to be incurred, or certain to be incurred but uncertain as to amount or as to the date on which it will arise.

Staff costs

59

• (1) “Social security costs” means any contributions by the company to any state social security or pension scheme, fund or arrangement.

• (2) “Pension costs” includes any costs incurred by the company in respect of any pension scheme established for the purpose of providing pensions for persons currently or formerly employed by the company, any sums set aside for the future payment of pensions directly by the company to current or former employees and any pensions paid directly to such persons without having first been set aside.

• (3) Any amount stated in respect of the item “social security costs” or in respect of the item “wages and salaries” in the company’s profit and loss account shall be determined by reference to payments made or costs incurred in respect of all persons employed by the company during the financial year under contracts of service.

SCHEDULE 8A

PART I — BALANCE SHEET FORMATS

1

A small company may deliver to the registrar a copy of the balance sheet showing the items listed in either of the balance sheet formats set out in paragraph 2 below in the order and under the headings and sub-headings given in the format adopted, but in other respects corresponding to the full balance sheet.

2

The formats referred to in paragraph 1 are as follows—

Balance Sheet Formats

Format 1

A

Called up share capital not paid

B

Fixed assets

• (I) Intangible assets

• (II) Tangible assets

• (III) Investments

C

Current assets

• (I) Stocks

• (II) Debtors(1)

• (III) Investments

• (IV) Cash at bank and in hand

D

Prepayments and accrued income

E

Creditors: amounts falling due within one year

F

Net current assets (liabilities)

G

Total assets less current liabilities

H

Creditors: amounts falling due after more than one year

I

Provisions for liabilities

J

Accruals and deferred income

K

Capital and reserves

• (I) Called up share capital

• (II) Share premium account

• (III) Revaluation reserve

• (IV) Other reserves

• (V) Profit and loss account

Balance Sheet Formats

Information as to undertaking in which shares held as a result of financial assistance operation

A

Called up share capital not paid

B

Fixed assets

• (I) Intangible assets

• (II) Tangible assets

• (III) Investments

C

Current assets

• (I) Stocks

• (II) Debtors(1)

• (III) Investments

• (IV) Cash at bank and in hand

D

Prepayments and accrued income

A

Capital and reserves

• (I) Called up share capital

• (II) Share premium account

• (III) Revaluation reserve

• (IV) Other reserves

• (V) Profit and loss account

B

Provisions for liabilities

C

Creditors(2)

D

Accruals and deferred income

Notes on the balance sheet formats

PART II — NOTES TO THE ACCOUNTS

Preliminary

3

Any information required in the case of any small company by the following provisions of this Part of this Schedule shall (if not given in the company’s accounts) be given by way of a note to those accounts.

Disclosure of accounting policies

4

The accounting policies adopted by the company in determining the amounts to be included in respect of items shown in the balance sheet and in determining the profit or loss of the company shall be stated (including such policies with respect to the depreciation and diminution in value of assets).

Information supplementing the balance sheet

Share capital and debentures

5

• (1) The following information shall be given with respect to the company’s share capital—

• (a) the authorised share capital; and

• (b) where shares of more than one class have been allotted, the number and aggregate nominal value of shares of each class allotted.

• (2) In the case of any part of the allotted share capital that consists of redeemable shares, the following information shall be given—

• (a) the earliest and latest dates on which the company has power to redeem those shares;

• (b) whether those shares must be redeemed in any event or are liable to be redeemed at the option of the company or of the shareholder; and

• (c) whether any (and, if so, what) premium is payable on redemption.

6

If the company has allotted any shares during the financial year, the following information shall be given—

• (a) the classes of shares allotted; and

• (b) as respects each class of shares, the number allotted, their aggregate nominal value, and the consideration received by the company for the allotment.

Fixed assets

7

• (1) In respect of each item to which a letter or Roman number is assigned under the general item “fixed assets” in the company’s balance sheet the following information shall be given—

• (a) the appropriate amounts in respect of that item as at the date of the beginning of the financial year and as at the balance sheet date respectively;

• (b) the effect on any amount shown in the balance sheet in respect of that item of—

• (i) any revision of the amount in respect of any assets included under that item made during that year on any basis mentioned in paragraph 31 of Schedule 8;

• (ii) acquisitions during that year of any assets;

• (iii) disposals during that year of any assets; and

• (iv) any transfers of assets of the company to and from that item during that year.

• (2) The reference in sub-paragraph (1)(a) to the appropriate amounts in respect of any item as at any date there mentioned is a reference to amounts representing the aggregate amounts determined, as at that date, in respect of assets falling to be included under that item on either of the following bases, that is to say—

• (a) on the basis of purchase price or production cost (determined in accordance with paragraphs 26 and 27 of Schedule 8); or

• (b) on any basis mentioned in paragraph 31 of that Schedule,

(leaving out of account in either case any provisions for depreciation or diminution in value).

• (3) In respect of each item within sub-paragraph (1)—

• (a) the cumulative amount of provisions for depreciation or diminution in value of assets included under that item as at each date mentioned in sub-paragraph (1)(a);

• (b) the amount of any such provisions made in respect of the financial year;

• (c) the amount of any adjustments made in respect of any such provisions during that year in consequence of the disposal of any assets; and

• (d) the amount of any other adjustments made in respect of any such provisions during that year;

shall also be stated.

Foreign currency translation

7A

• (1) Sub-paragraph (2) applies if–

• (a) the company has financial fixed assets that could be included at fair value by virtue of paragraph 34A of Schedule 8,

• (b) the amount at which those assets are included under any item in the company’s accounts is in excess of their fair value, and

• (c) the company has not made provision for diminution in value of those assets in accordance with paragraph 19(1) of that Schedule.

• (2) There must be stated–

• (a) the amount at which either the individual assets or appropriate groupings of those individual assets are included in the company’s accounts,

• (b) the fair value of those assets or groupings, and

• (c) the reasons for not making a provision for diminution in value of those assets, including the nature of the evidence that provides the basis for the belief that the amount at which they are stated in the accounts will be recovered.

Details of indebtedness

8

• (1) For the aggregate of all items shown under “creditors” in the company’s balance sheet there shall be stated the aggregate of the following amounts, that is to say—

• (a) the amount of any debts included under “creditors” which are payable or repayable otherwise than by instalments and fall due for payment or repayment after the end of the period of five years beginning with the day next following the end of the financial year; and

• (b) in the case of any debts so included which are payable or repayable by instalments, the amount of any instalments which fall due for payment after the end of that period.

• (2) In respect of each item shown under “creditors” in the company’s balance sheet there shall be stated the aggregate amount of any debts included under that item, in respect of which any security has been given by the company.

9

• (1) Where sums originally denominated in foreign currencies have been brought into account under any items shown in the balance sheet or profit and loss account, the basis on which those sums have been translated into sterling shall be stated.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9A

Where the directors of a company take advantage of the exemption conferred by section 249AA, and the company has during the financial year in question acted as an agent for any person, the fact that it has so acted must be stated.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exceptions for certain companies

28A

Where a company is entitled to, and has availed itself of, any of the provisions of paragraph 27 or 28 of this Schedule, section 235(2) only requires the auditors to state whether in their opinion the accounts have been properly prepared in accordance with this Act.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER 1 — GENERAL RULES AND FORMATS

SECTION A — GENERAL RULES

1

• (1) Subject to the following provisions of this Part of this Schedule:

• (a) every balance sheet of a company shall show the items listed in the balance sheet format set out below in section B of this Chapter of this Schedule; and

• (b) every profit and loss account of a company shall show the items listed in either of the profit and loss account formats so set out;

in either case in the order and under the headings and sub-headings given in the format adopted.

• (2) Sub-paragraph (1) above is not to be read as requiring the heading or sub-heading for any item to be distinguished by any number or letter assigned to that item in the format adopted.

• (3) Where the heading of an item in the format adopted contains any wording in square brackets, that wording may be omitted if not applicable to the company.

2

• (1) Where in accordance with paragraph 1 a company’s profit and loss account for any financial year has been prepared by reference to one of the formats set out in section B below, the directors of the company shall adopt the same format in preparing the profit and loss account for subsequent financial years of the company unless in their opinion there are special reasons for a change.

• (2) Particulars of any change in the format adopted in preparing a company’s profit and loss account in accordance with paragraph 1 shall be disclosed, and the reasons for the change shall be explained, in a note to the accounts in which the new format is first adopted.

3

• (1) Any item required in accordance with paragraph 1 to be shown in a company’s balance sheet or profit and loss account may be shown in greater detail than so required.

• (2) A company’s balance sheet or profit and loss account may include an item representing or covering the amount of any asset or liability, income or expenditure not specifically covered by any of the items listed in the balance sheet format provided or the profit and loss account format adopted, but the following shall not be treated as assets in any company’s balance sheet:

• (i) preliminary expenses;

• (ii) expenses of and commission on any issue of shares or debentures; and

• (iii) costs of research.

• (3) Items to which lower case letters are assigned in any of the formats set out in section B below may be combined in a company’s accounts for any financial year if either:

• (a) their individual amounts are not material for the purpose of giving a true and fair view; or

• (b) the combination facilitates the assessment of the state of affairs or profit or loss of the company for that year;

but in a case within paragraph (b) the individual amounts of any items so combined shall be disclosed in a note to the accounts and any notes required by this Schedule to the items so combined shall, notwithstanding the combination, be given.

• (4) Subject to paragraph 4(3) below, a heading or sub-heading corresponding to an item listed in the balance sheet format or the profit and loss account format adopted in preparing a company’s balance sheet or profit and loss account shall not be included if there is no amount to be shown for that item in respect of the financial year to which the balance sheet or profit and loss account relates.

4

• (1) In respect of every item shown in the balance sheet or profit and loss account, there shall be shown or stated the corresponding amount for the financial year immediately preceding that to which the accounts relate.

• (2) Where the corresponding amount is not comparable with the amount to be shown for the item in question in respect of the financial year to which the balance sheet or profit and loss account relates, the former amount may be adjusted and particulars of the non-comparability and of any adjustment shall be given in a note to the accounts.

• (3) Paragraph 3(4) does not apply in any case where an amount can be shown for the item in question in respect of the financial year immediately preceding that to which the balance sheet or profit and loss account relates, and that amount shall be shown under the heading or sub-heading required by paragraph 1 for that item.

5

• (1) Subject to the following provisions of this paragraph and without prejudice to note (6) to the balance sheet format, amounts in respect of items representing assets or income may not be set off against amounts in respect of items representing liabilities or expenditure (as the case may be), or vice versa.

• (2) Charges required to be included in profit and loss account format 1, items 11(a) and 11(b) or format 2, items A7(a) and A7(b) may however be set off against income required to be included in format 1, items 12(a) and 12(b) or format 2, items B5(a) and B5(b) and the resulting figure shown as a single item (in format 2 at position A7 if negative and at position B5 if positive).