The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008

• (3) In the profit and loss account formats replace the items headed “Income from participating interests”, that is—

• (a) in format 1, item 8, and

• (b) in format 2, item 10,

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

by two items: “Income from interests in associated undertakings” and “Income from other participating interests”.

21

• (1) The interest of an undertaking in an associated undertaking, and the amount of profit or loss attributable to such an interest, must be shown by the equity method of accounting (including dealing with any goodwill arising in accordance with paragraphs 17 to 20 and 22 of Schedule 1 to these Regulations).

• (2) Where the associated undertaking is itself a parent undertaking, the net assets and profits or losses to be taken into account are those of the parent and its subsidiary undertakings (after making any consolidation adjustments).

• (3) The equity method of accounting need not be applied if the amounts in question are not material for the purpose of giving a true and fair view.

Related party transactions

22

Paragraph 72 of Schedule 1 to these Regulations applies to transactions which the parent company, or other undertakings included in the consolidation, have entered into with related parties, unless they are intra group transactions.

PART 2 — MODIFICATIONS FOR BANKING GROUPS

General application of provisions applicable to individual accounts

23

In its application to banking groups, Part 1 of this Schedule has effect with the following modifications.

24

In paragraph 1 of this Schedule—

• (a) the reference in sub-paragraph (1) to the provisions of Schedule 1 to these Regulations is to be construed as a reference to the provisions of Schedule 2 to these Regulations, and

• (b) sub-paragraph (2) is to be omitted.

Minority interests and associated undertakings

25

• (1) This paragraph adapts paragraphs 17 and 20 (which require items in respect of “non-controlling interests” and associated undertakings to be added to the formats set out in Schedule 1 to these Regulations) to the formats prescribed by Schedule 2 to these Regulations.

• (2) In paragraph 17—

• (a) in sub-paragraph (1), for the reference to Schedule 1 to these Regulations, substitute a reference to Schedule 2,

• (b) sub-paragraph (3) is to apply as if the reference to “a separate item” were a reference to “separate items” and the reference to “the amount of any profit or loss” were a reference to the following—

• (i) the amount of any profit or loss on ordinary activities, and

• (ii) the amount of any profit or loss on extraordinary activities, and

• (c) sub-paragraph (4) is not to apply, but for the purposes of paragraph 5(1) of Part 1 of Schedule 2 to these Regulations (power to combine items) the additional items required by the foregoing provisions of this paragraph are to be treated as items to which a letter is assigned.

• (3) Paragraph 20(2) is to apply with respect to a balance sheet prepared under Schedule 2 to these Regulations as if it required assets item 7 (participating interests) in the balance sheet format to be replaced by the two replacement items referred to in that paragraph.

• (4) Paragraph 20(3) is not to apply, but the following items in the profit and loss account formats—

• (a) format 1 item 3(b) (income from participating interests),

• (b) format 2 item B2(b) (income from participating interests),

are replaced by the following—

• (i) “Income from participating interests other than associated undertakings”, to be shown at position 3(b) in format 1 and position B2(b) in format 2, and

• (ii) “Income from associated undertakings”, to be shown at an appropriate position.

26

In paragraph 21(1) of this Schedule, for the references to paragraphs 17 to 20 and 22 of Schedule 1 to these Regulations substitute references to paragraphs 23 to 26 and 28 of Schedule 2 to these Regulations.

Related party transactions

27

In paragraph 22 of this Schedule, for the reference to paragraph 72 of Schedule 1 to these Regulations substitute a reference to paragraph 92 of Schedule 2 to these Regulations.

Foreign currency translation

28

Any difference between—

• (a) the amount included in the consolidated accounts for the previous financial year with respect to any undertaking included in the consolidation or the group's interest in any associated undertaking, together with the amount of any transactions undertaken to cover any such interest, and

• (b) the opening amount for the financial year in respect of those undertakings and in respect of any such transactions,

arising as a result of the application of paragraph 50 of Schedule 2 to these Regulations may be credited to (where (a) is less than (b)), or deducted from (where (a) is greater than (b)), (as the case may be) consolidated reserves.

29

Any income and expenditure of undertakings included in the consolidation and associated undertakings in a foreign currency may be translated for the purposes of the consolidated accounts at the average rates of exchange prevailing during the financial year.

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

30

• (1) The following provisions apply where the parent company of a banking group has a subsidiary undertaking which—

• (a) is a credit institution of which shares are held as a result of a financial assistance operation with a view to its reorganisation or rescue, and

• (b) is excluded from consolidation under section 405(3)(c) of the 2006 Act (interest held with a view to resale).

• (2) Information as to the nature and terms of the operations must be given in a note to the group accounts, and there must be appended to the copy of the group accounts delivered to the registrar in accordance with section 441 of the 2006 Act a copy of the undertaking's latest individual accounts and, if it is a parent undertaking, its latest group accounts. If the accounts appended are required by law to be audited, a copy of the auditor's report must also be appended.

• (3) Any requirement of Part 35 of the 2006 Act as to the delivery to the registrar of a certified translation into English must be met in relation to any document required to be appended by sub-paragraph (2).

• (4) The above requirements are subject to the following qualifications—

• (a) an undertaking is not required to prepare for the purposes of this paragraph accounts which would not otherwise be prepared, and if no accounts satisfying the above requirements are prepared none need be appended;

• (b) the accounts of an undertaking need not be appended if they would not otherwise be required to be published, or made available for public inspection, anywhere in the world, but in that case the reason for not appending the accounts must be stated in a note to the consolidated accounts.

• (5) Where a copy of an undertaking's accounts is required to be appended to the copy of the group accounts delivered to the registrar, that fact must be stated in a note to the group accounts.

PART 3 — MODIFICATIONS FOR INSURANCE GROUPS

General application of provisions applicable to individual accounts

31

In its application to insurance groups, Part 1 of this Schedule has effect with the following modifications.

32

In paragraph 1 of this Schedule—

• (a) the reference in sub-paragraph (1) to the provisions of Schedule 1 to these Regulations is to be construed as a reference to the provisions of Schedule 3 to these Regulations, and

• (b) sub-paragraph (2) is to be omitted.

Financial years of subsidiary undertakings

33

In paragraph 2(2)(a), for “three months” substitute “ six months ”.

Assets and liabilities to be included in group accounts

34

In paragraph 3, after sub-paragraph (1) insert—

(1A) Sub-paragraph (1) is not to apply to those liabilities items the valuation of which by the undertakings included in a consolidation is based on the application of provisions applying only to insurance undertakings, nor to those assets items changes in the values of which also affect or establish policyholders' rights. (1B) Where sub-paragraph (1A) applies, that fact must be disclosed in the notes to the consolidated accounts.

Elimination of group transactions

35

For sub-paragraph (4) of paragraph 6 substitute—

(4) Sub-paragraphs (1) and (2) need not be complied with— (a) where a transaction has been concluded according to normal market conditions and a policyholder has rights in respect of the transaction, or (b) if the amounts concerned are not material for the purpose of giving a true and fair view. (5) Where advantage is taken of sub-paragraph (4)(a) that fact must be disclosed in the notes to the accounts, and where the transaction in question has a material effect on the assets, liabilities, financial position and profit or loss of all the undertakings included in the consolidation that fact must also be so disclosed.

Minority interests

36

In paragraph 17—

• (a) in sub-paragraph (1), for the reference to Schedule 1 to these Regulations, substitute a reference to Schedule 3,

• (b) sub-paragraph (3) is to apply as if the reference to “a separate item” were a reference to “separate items” and as if the reference to “the amount of any profit or loss” were a reference to the following—

• (i) the amount of any profit or loss on ordinary activities, and

• (ii) the amount of any profit or loss on extraordinary activities, and

• (c) for sub-paragraph (4), substitute—

(4) Paragraph 3(1) of Schedule 3 to these Regulations (power to combine items) does not apply in relation to the additional items required by the above provisions of this paragraph.

Associated undertakings

37

In paragraph 20—

• (a) in sub-paragraph (1), for the reference to Schedule 1 to these Regulations substitute a reference to Schedule 3 to these Regulations, and

• (b) for sub-paragraphs (2) and (3) substitute—

(2) In the balance sheet format, replace asset item C.II.3 (participating interests) with two items, “Interests in associated undertakings” and “Other participating interests”. (3) In the profit and loss account format, replace items II.2.(a) and III.3.(a) (income from participating interests, with a separate indication of that derived from group undertakings) with— (a) “Income from participating interests other than associated undertakings, with a separate indication of that derived from group undertakings”, to be shown as items II.2.(a) and III.3.(a), and (b) “Income from associated undertakings”, to be shown as items II.2.(aa) and III.3.(aa).

38

In paragraph 21(1) of this Schedule, for the references to paragraphs 17 to 20 and 22 of Schedule 1 to these Regulations, substitute references to paragraphs 36 to 39 and 42 of Schedule 3 to these Regulations.

Related party transactions

39

In paragraph 22 of this Schedule, for the reference to paragraph 72 of Schedule 1 to these Regulations substitute a reference to paragraph 90 of Schedule 3 to these Regulations.

Modifications of Schedule 3 to these Regulations for purposes of paragraph 31

40

• (1) For the purposes of paragraph 31 of this Schedule, Schedule 3 to these Regulations is to be modified as follows.

• (2) The information required by paragraph 11 (additional items) need not be given.

• (3) In the case of general business, investment income, expenses and charges may be disclosed in the non-technical account rather than in the technical account.

• (4) In the case of subsidiary undertakings which are not authorised to carry on long-term business in the United Kingdom, notes (8) and (9) to the profit and loss account format have effect as if references to investment income, expenses and charges arising in the long-term fund or to investments attributed to the long-term fund were references to investment income, expenses and charges or (as the case may be) investments relating to long-term business.

• (5) In the case of subsidiary undertakings which do not have a head office in the United Kingdom, the computation required by paragraph 52 must be made annually by an actuary or other specialist in the field on the basis of recognised actuarial methods.

• (6) The information required by paragraphs 85 to 88 need not be shown.

SCHEDULE 7 — MATTERS TO BE DEALT WITH IN DIRECTORS' REPORT

PART 1 — MATTERS OF A GENERAL NATURE

Introduction

1

In addition to the information required by section 416 of the 2006 Act, the directors' report must contain the following information.

Asset values

2

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

Political donations and expenditure

3

• (1) If—

• (a) the company (not being the wholly-owned subsidiary of a company incorporated in the United Kingdom) has in the financial year—

• (i) made any political donation to any political party or other political organisation,

• (ii) made any political donation to any independent election candidate, or

• (iii) incurred any political expenditure, and

• (b) the amount of the donation or expenditure, or (as the case may be) the aggregate amount of all donations and expenditure falling within paragraph (a), exceeded £2000,

the directors' report for the year must contain the following particulars.

• (2) Those particulars are—

• (a) as respects donations falling within sub-paragraph (1)(a)(i) or (ii)—

• (i) the name of each political party, other political organisation or independent election candidate to whom any such donation has been made, and

• (ii) the total amount given to that party, organisation or candidate by way of such donations in the financial year; and

• (b) as respects expenditure falling within sub-paragraph (1)(a)(iii), the total amount incurred by way of such expenditure in the financial year.

• (3) If—

• (a) at the end of the financial year the company has subsidiaries which have, in that year, made any donations or incurred any such expenditure as is mentioned in sub-paragraph (1)(a), and

• (b) it is not itself the wholly-owned subsidiary of a company incorporated in the United Kingdom,

the directors' report for the year is not, by virtue of sub-paragraph (1), required to contain the particulars specified in sub-paragraph (2). But, if the total amount of any such donations or expenditure (or both) made or incurred in that year by the company and the subsidiaries between them exceeds £2000, the directors' report for the year must contain those particulars in relation to each body by whom any such donation or expenditure has been made or incurred.

• (4) Any expression used in this paragraph which is also used in Part 14 of the 2006 Act (control of political donations and expenditure) has the same meaning as in that Part.

4

• (1) If the company (not being the wholly-owned subsidiary of a company incorporated in the United Kingdom) has in the financial year made any contribution to a non-UK political party, the directors' report for the year must contain—

• (a) a statement of the amount of the contribution, or

• (b) (if it has made two or more such contributions in the year) a statement of the total amount of the contributions.

• (2) If—

• (a) at the end of the financial year the company has subsidiaries which have, in that year, made any such contributions as are mentioned in sub-paragraph (1), and

• (b) it is not itself the wholly-owned subsidiary of a company incorporated in the United Kingdom,

the directors' report for the year is not, by virtue of sub-paragraph (1), required to contain any such statement as is there mentioned, but it must instead contain a statement of the total amount of the contributions made in the year by the company and the subsidiaries between them.

• (3) In this paragraph, “contribution”, in relation to an organisation, means—

• (a) any gift of money to the organisation (whether made directly or indirectly);

• (b) any subscription or other fee paid for affiliation to, or membership of, the organisation; or

• (c) any money spent (otherwise than by the organisation or a person acting on its behalf) in paying any expenses incurred directly or indirectly by the organisation.

• (4) In this paragraph, “non-UK political party” means any political party which carries on, or proposes to carry on, its activities wholly outside the United Kingdom.

Charitable donations

5

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

Financial instruments

6

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

Miscellaneous

7

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

PART 2 — DISCLOSURE REQUIRED BY COMPANY ACQUIRING ITS OWN SHARES ETC.

8

This Part of this Schedule applies where shares in a public company—

• (a) are purchased by the company or are acquired by it by forfeiture or surrender in lieu of forfeiture, or in pursuance of any of the following provisions (acquisition of own shares by company limited by shares)—

• (i) section 143(3) of the Companies Act 1985 ,

• (ii) Article 153(3) of the Companies (Northern Ireland) Order 1986 , or

• (iii) section 659 of the 2006 Act, or

• (b) are acquired by another person in circumstances where paragraph (c) or (d) of any of the following provisions applies (acquisition by company's nominee, or by another with company financial assistance, the company having a beneficial interest)—

• (i) section 146(1) of the Companies Act 1985 ,

• (ii) Article 156(1) of the Companies (Northern Ireland) Order 1986 , or

• (iii) section 662(1) of the 2006 Act applies, or

• (c) are made subject to a lien or other charge taken (whether expressly or otherwise) by the company and permitted by any of the following provisions (exceptions from general rule against a company having a lien or charge on its own shares)—

• (i) section 150(2) or (4) of the Companies Act 1985 ,

• (ii) Article 160(2) or (4) of the Companies (Northern Ireland) Order 1986 , or

• (iii) section 670(2) or (4) of the 2006 Act.

9

The directors' report for a financial year must state—

• (a) the number and nominal value of the shares so purchased, the aggregate amount of the consideration paid by the company for such shares and the reasons for their purchase;

• (b) the number and nominal value of the shares so acquired by the company, acquired by another person in such circumstances and so charged respectively during the financial year;

• (c) the maximum number and nominal value of shares which, having been so acquired by the company, acquired by another person in such circumstances or so charged (whether or not during that year) are held at any time by the company or that other person during that year;

• (d) the number and nominal value of the shares so acquired by the company, acquired by another person in such circumstances or so charged (whether or not during that year) which are disposed of by the company or that other person or cancelled by the company during that year;

• (e) where the number and nominal value of the shares of any particular description are stated in pursuance of any of the preceding sub-paragraphs, the percentage of the called-up share capital which shares of that description represent;

• (f) where any of the shares have been so charged the amount of the charge in each case; and

• (g) where any of the shares have been disposed of by the company or the person who acquired them in such circumstances for money or money's worth the amount or value of the consideration in each case.

PART 3 — DISCLOSURE CONCERNING EMPLOYMENT ETC. OF DISABLED PERSONS

10

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

PART 4 — ENGAGEMENT WITH EMPLOYEES, SUPPLIERS, CUSTOMERS AND OTHERS

11

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

PART 5 — POLICY AND PRACTICE ON PAYMENT OF CREDITORS

12

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

PART 6 — DISCLOSURE REQUIRED BY CERTAIN PUBLICLY-TRADED COMPANIES

13

• (1) This Part of this Schedule applies to the directors' report for a financial year if the company had securities carrying voting rights admitted to trading on a UK regulated market at the end of that year.

• (2) The report must contain detailed information, by reference to the end of that year, on the following matters—

• (a) the structure of the company's capital, including in particular—

• (i) the rights and obligations attaching to the shares or, as the case may be, to each class of shares in the company, and

• (ii) where there are two or more such classes, the percentage of the total share capital represented by each class;

• (b) any restrictions on the transfer of securities in the company, including in particular—

• (i) limitations on the holding of securities, and

• (ii) requirements to obtain the approval of the company, or of other holders of securities in the company, for a transfer of securities;

• (c) in the case of each person with a significant direct or indirect holding of securities in the company, such details as are known to the company of—

• (i) the identity of the person,

• (ii) the size of the holding, and

• (iii) the nature of the holding;

• (d) in the case of each person who holds securities carrying special rights with regard to control of the company—

• (i) the identity of the person, and

• (ii) the nature of the rights;

• (e) where—

• (i) the company has an employees' share scheme, and

• (ii) shares to which the scheme relates have rights with regard to control of the company that are not exercisable directly by the employees,

how those rights are exercisable;

• (f) any restrictions on voting rights, including in particular—

• (i) limitations on voting rights of holders of a given percentage or number of votes,

• (ii) deadlines for exercising voting rights, and

• (iii) arrangements by which, with the company's co-operation, financial rights carried by securities are held by a person other than the holder of the securities;

• (g) any agreements between holders of securities that are known to the company and may result in restrictions on the transfer of securities or on voting rights;

• (h) any rules that the company has about—

• (i) appointment and replacement of directors, or

• (ii) amendment of the company's articles of association;

• (i) the powers of the company's directors, including in particular any powers in relation to the issuing or buying back by the company of its shares;

• (j) any significant agreements to which the company is a party that take effect, alter or terminate upon a change of control of the company following a takeover bid, and the effects of any such agreements;

• (k) any agreements between the company and its directors or employees providing for compensation for loss of office or employment (whether through resignation, purported redundancy or otherwise) that occurs because of a takeover bid.

• (3) For the purposes of sub-paragraph (2)(a) a company's capital includes any securities in the company that are not admitted to trading on a regulated market.

• (4) For the purposes of sub-paragraph (2)(c) a person has an indirect holding of securities if—

• (a) they are held on his behalf, or

• (b) he is able to secure that rights carried by the securities are exercised in accordance with his wishes.

• (5) Sub-paragraph (2)(j) does not apply to an agreement if—

• (a) disclosure of the agreement would be seriously prejudicial to the company, and

• (b) the company is not under any other obligation to disclose it.

• (6) In this paragraph—

• “securities” means shares or debentures;

• “takeover bid” has the same meaning as in paragraph 20(1) of Schedule 1C to the Companies Act 2006;

• ...

• “voting rights” means rights to vote at general meetings of the company in question, including rights that arise only in certain circumstances.

14

The directors' report must also contain any necessary explanatory material with regard to information that is required to be included in the report by this Part.

SCHEDULE 8 — QUOTED COMPANIES ...: DIRECTORS’ REMUNERATION REPORT

PART 1 — INTRODUCTORY

1

• (1) In the directors’ remuneration report for a financial year (“the relevant financial year”) there must be shown, subject to sub-paragraph (2), the information specified in Parts 2, 3, and 4.

• (2) The directors’ remuneration policy as specified in Part 4, may, subject to sub-paragraph (3), be omitted from the directors’ remuneration report for a financial year, if the company does not intend, at the accounts meeting at which the report is to be laid, to move a resolution to approve the directors’ remuneration policy in accordance with section 439A of the 2006 Act.

• (3) Where the directors’ remuneration policy is omitted from the report in accordance with sub-paragraph (2), there must be set out in the report the following information—

• (a) the date of the last general meeting of the company at which a resolution was moved by the company in respect of that directors’ remuneration policy and at which that policy was approved; and

• (b) where, on the company’s website or at some other place, a copy of that directors’ remuneration policy may be inspected by the members of the company.

PART 2 — ANNUAL STATEMENT

Consideration by the directors of matters relating to directors' remuneration

2

• (1) Information required to be shown in the report for or in respect of a particular person must be shown in the report in a manner that links the information to that person identified by name.

• (2) Nothing in this Schedule prevents the directors setting out in the report any such additional information as they think fit, and any item required to be shown in the report may be shown in greater detail than required by the provisions of this Schedule.

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

• (3) Where the requirements of this Schedule make reference to a “director” those requirements may be complied with in such manner as to distinguish between directors who perform executive functions and those who do not.

• (4) Any requirement of this Schedule to provide information in respect of a director may, in respect of those directors who do not perform executive functions, be omitted or otherwise modified where that requirement is not applicable to such a director and in such a case, particulars of, and the reasons for, the omission or modification must be given in the report.

• (5) Any requirement of this Schedule to provide information in respect of performance measures or targets does not require the disclosure of information which, in the opinion of the directors, is commercially sensitive in respect of the company.

• (6) Where information that would otherwise be required to be in the report is not included in reliance on sub-paragraph (5), particulars of, and the reasons for, the omission must be given in the report and an indication given of when (if at all) the information is to be reported to the members of the company.

• (7) Where any provision of this Schedule requires a sum or figure to be given in respect of any financial year preceding the relevant financial year, in the first directors’ remuneration report prepared in accordance with this Schedule, that sum or figure may, where the sum or figure is not readily available from the reports and accounts of the company prepared for those years, be given as an estimate and a note of explanation provided in the report.

• (8) A person is to be treated as a director of a company for the purposes of this Schedule (other than in the references to directors in paragraphs 2(2), 2(5), 3, 5(2), 6(1)(b), 10(3), 22(1), 23(c), 24(4), and 48) if the person—

• (a) is the company’s chief executive officer (however described) ..., but

• (b) is not a director of the company.

Statement of company's policy on directors' remuneration

3

The directors’ remuneration report must contain a statement by the director who fulfils the role of chair of the remuneration committee (or, where there is no such person, by a director nominated by the directors to make the statement) summarising for the relevant financial year—

• (a) the major decisions on directors’ remuneration;

• (aa) any discretion which has been exercised in the award of directors’ remuneration;

• (b) any substantial changes relating to directors’ remuneration made during the year; and

• (c) the context in which those changes occurred and decisions have been taken.

Statement of consideration of conditions elsewhere in company and group

4

• (1) The directors’ remuneration report must, for the relevant financial year, for each person who has served as a director of the company at any time during that year, set out in a table in the form set out in paragraph 5 (“the single total figure table”) the information prescribed by paragraphs 6 and 7 below.

• (2) The report may set out in separate tables the information to be supplied in respect of directors who perform executive functions and those who do not.

• (3) Unless otherwise indicated the sums set out in the table are those in respect of the relevant financial year and relate to the director’s performance of, or agreement to perform, qualifying services.

Performance graph

5

• (1) The form of the table required by paragraph 4 is—

Single Total Figure Table	Single Total Figure Table	Single Total Figure Table	Single Total Figure Table	Single Total Figure Table	Single Total Figure Table	Single Total Figure Table	Single Total Figure Table	Single Total Figure Table
	a	b	c	d	e	Total	. . .	. . .
Director 1	xxx	xxx	xxx	xxx	xxx	xxx	. . .	. . .
Director 2	xxx	xxx	xxx	xxx	xxx	xxx	. . .	. . .

• (2) The directors may choose to display the table using an alternative orientation, in which case references in this Schedule to columns are to be read as references to rows.

Service contracts

6

• (1) In addition to the columns described in paragraph 7, columns—

• (a) must be included to set out any other items in the nature of remuneration (other than items required to be disclosed under paragraph 15) which are not set out in the columns headed “(a)” to “(e)”; and

• (b) may be included if there are any sub-totals or other items which the directors consider necessary in order to assist the understanding of the table.

• (2) Any additional columns must be inserted before the column marked “Total”.

PART 3 — ANNUAL REPORT ON REMUNERATION

Amount of each director's emoluments and compensation in the relevant financial year

7

• (1) Subject to paragraph 9, in the single total figure table, the sums that are required to be set out in the columns are—

• (a) in the column headed “a”, the total amount of salary and fees;

• (b) in the column headed “b”, all taxable benefits;

• (c) in the column headed “c”, money or other assets received or receivable for the relevant financial year as a result of the achievement of performance measures and targets relating to a period ending in that financial year other than—

• (i) those which result from awards made in a previous financial year and where final vesting is determined as a result of the achievement of performance measures or targets relating to a period ending in the relevant financial year; or

• (ii) those receivable subject to the achievement of performance measures or targets in a future financial year;

• (d) in the column headed “d”, money or other assets received or receivable for periods of more than one financial year where final vesting—

• (i) is determined as a result of the achievement of performance measures or targets relating to a period ending in the relevant financial year; and

• (ii) is not subject to the achievement of performance measures or targets in a future financial year;

• (e) in the column headed “e”, all pension related benefits including—

• (i) payments (whether in cash or otherwise) in lieu of retirement benefits;

• (ii) all benefits in year from participating in pension schemes;

• (f) in the column headed “Total”, the total amount of the sums set out in the previous columns;

• (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) Where it is necessary to assist the understanding of the table by the creation of sub-totals the columns headed “a” to “e” may be set out in an order other than the one set out in paragraph 5.

Share options

8

• (1) In respect of any items in paragraph 7(1)(c) or (d) where the performance measures or targets are substantially (but not fully) completed by the end of the relevant financial year—

• (a) the sum given in the table may include sums which relate to the following financial year; but

• (b) where such sums are included, those sums must not be included in the corresponding column of the single total figure table prepared for that following financial year; and

• (c) a note to the table must explain the basis of the calculation.

• (2) Where any money or other assets reported in the single total figure table in the directors’ remuneration report prepared in respect of any previous financial year are the subject of a recovery of sums paid or the withholding of any sum for any reason in the relevant financial year—

• (a) the recovery or withholding so attributable must be shown in a separate column in the table as a negative value and deducted from the column headed “Total”; and

• (b) an explanation for the recovery or withholding and the basis of the calculation must be given in a note to the table.

• (3) Where the calculations in accordance with paragraph 10 (other than in respect of a recovery or withholding) result in a negative value, the result must be expressed as zero in the relevant column in the table.

9

• (1) Each column in the single total figure table must contain, in such manner as to permit comparison, two sums as follows—

• (a) the sum set out in the corresponding column in the report prepared in respect of the financial year preceding the relevant financial year; and

• (b) the sum for the relevant financial year.

• (2) When, in the single total figure table, a sum is given in the column which relates to the preceding financial year and that sum, when set out in the report for that preceding year was given as an estimated sum, then in the relevant financial year—

• (a) it must be given as an actual sum;

• (b) the amount representing the difference between the estimate and the actual must not be included in the column relating to the relevant financial year; and

• (c) details of the calculation of the revised sum must be given in a note to the table.

10

• (1) The methods to be used to calculate the sums required to be set out in the single total figure table are—

• (a) for the column headed “a”, cash paid to or receivable by the person in respect of the relevant financial year;

• (b) for the column headed “b”, the gross value before payment of tax;

• (c) for column “c”, the total cash equivalent including any amount deferred, other than where the deferral is subject to the achievement of further performance measures or targets in a future financial year;

• (d) for column “d”—

• (i) the cash value of any monetary award;

• (ii) the value of any shares or share options awarded, calculated by—

• (aa) multiplying the original number of shares granted by the proportion that vest (or an estimate);

• (bb) multiplying the total arrived at in (aa) by the market price of shares at the date on which the shares vest; and

• (iii) the value of any additional cash or shares receivable in respect of dividends accrued (actually or notionally);

• (e) for the column headed “e”,—

• (i) for the item in paragraph 7(1)(e)(i), the cash value;

• (ii) for the item in paragraph 7(1)(e)(ii), what the aggregate pension input amount would be across all the pension schemes of the company or group in which the director accrues benefits, calculated using the method set out in section 229 of the Finance Act 2004 where—

• (aa) references to “pension input period” are to be read as references to the company’s financial year, or where a person becomes a director during the financial year, the period starting on the date the person became a director and ending at the end of the financial year;

• (bb) all pension schemes of the company or group which provide relevant benefits to the director are deemed to be registered schemes;

• (cc) all pension contributions paid by the director during the pension input period are deducted from the pension input amount;

• (dd) in the application of section 234 of that Act, the figure 20 is substituted for the figure 16 each time it appears;

• (ee) subsections 229(3) and (4) do not apply; and

• (ff) section 277 of that Act is read as follows—

(277) For the purposes of this Part the valuation assumptions in relation to a person, benefits and a date are— (a) if the person has not left the employment to which the arrangement relates on or before the date, that the person left that employment on the date with a prospective right to benefits under the arrangement, (b) if the person has not reached such age (if any) as must have been reached to avoid any reduction in the benefits on account of age, that on the date the person is entitled to receive the benefits without any reduction on account of age, and (c) that the person’s right to receive the benefits had not been occasioned by physical or mental impairment.

• (2) For the item in paragraph 7(1)(e)(ii) where there has not been a company contribution to the pension scheme in respect of the director, but if such a contribution had been made it would have been measured for pension input purposes under section 233(1)(b) of the Finance Act 2004, when calculating the pension input amount for the purposes of sub-paragraph (1)(e)(ii) it should be calculated as if the cash value of any contribution notionally allocated to the scheme in respect of the person by or on behalf of the company including any adjustment made for any notional investment return achieved during the relevant financial year were a contribution paid by the employer in respect of the individual for the purposes of section 233(1)(b) of the Finance Act 2004.

• (3) For the purposes of the calculation in sub-paragraph (1)(d)(ii)—

• (a) where the market price of shares at the date on which the shares vest is not ascertainable by the date on which the remuneration report is approved by the directors, an estimate of the market price of the shares shall be calculated on the basis of an average market value over the last quarter of the relevant financial year; and

• (b) where the award was an award of shares or share options, the cash amount the individual was or will be required to pay to acquire the share must be deducted from the total.

Long term incentive schemes

11

• (1) In paragraph 7(1)(b) “taxable benefits” includes—

• (a) sums paid by way of expenses allowance that are—

• (i) chargeable to United Kingdom income tax (or would be if the person were an individual, or would be if the person were resident in the United Kingdom for tax purposes), and

• (ii) paid to or receivable by the person in respect of qualifying services; and

• (b) any benefits received by the person, other than salary, (whether or not in cash) that—

• (i) are emoluments of the person, and

• (ii) are received by the person in respect of qualifying services.

• (2) A payment or other benefit received in advance of a director commencing qualifying services, but in anticipation of performing qualifying services, is to be treated as if received on the first day of performance of the qualifying services.

12

• (1) In respect of the sum required to be set out by paragraph 7(1)(b), there must be set out after the table a summary identifying—

• (a) the types of benefits the value of which is included in the sum set out in the column headed “b”; and

• (b) the value (where significant).

• (2) For every component the value of which is included in the sums required to be set out in the columns headed “c” and “d” of the table by paragraphs 7(1)(c) and (d), there must be set out after the table the relevant details.

• (3) In sub-paragraph (2) “the relevant details” means—

• (a) details of any performance measures and the relative weighting of each;

• (b) within each performance measure, the performance targets set at the beginning of the performance period and corresponding value of the award achievable;

• (c) for each performance measure, details of actual performance relative to the targets set and measured over the relevant reporting period, and the resulting level of award; and

• (ca) the amount of the award or, where this is not ascertainable, an estimate of the amount of the award, that is attributable to share price appreciation;

• (d) where any discretion has been exercised in respect of the award, particulars must be given of how the discretion was exercised , how the resulting level of award was determined and whether the discretion has been exercised as a result of share price appreciation or depreciation.

• (4) For each component the value of which is included in the sum set out in the column headed “c” of the table, the report must state if any amount was deferred, the percentage deferred, whether it was deferred in cash or shares, if relevant, and whether the deferral was subject to any conditions other than performance measures.

• (5) Where additional columns are included in accordance with paragraph 6(1)(a), there must be set out in a note to the table the basis on which the sums in the column were calculated, and other such details as are necessary for an understanding of the sums set out in the column, including any performance measures relating to that component of remuneration or if there are none, an explanation of why not.

Pensions

13

• (1) The directors’ remuneration report must, for each person who has served as a director of the company at any time during the relevant financial year, and who has a prospective entitlement to defined benefits or cash balance benefits (or to benefits under a hybrid arrangement which includes such benefits) in respect of qualifying services, contain the following information in respect of pensions—

• (a) details of those rights as at the end of that year, including the person’s normal retirement date;

• (b) a description of any additional benefit that will become receivable by a director in the event that that director retires early; and

• (c) where a person has rights under more than one type of pension benefit identified in column headed “e” of the single total figure table, separate details relating to each type of pension benefit.

• (2) For the purposes of this paragraph, “defined benefits”, “cash balance benefits” and “hybrid arrangement” have the same meaning as in section 152 of the Finance Act 2004.

• (3) “Normal retirement date” means an age specified in the pension scheme rules (or otherwise determined) as the earliest age at which, while the individual continues to accrue benefits under the pension scheme, entitlement to a benefit arises—

• (a) without consent (whether of an employer, the trustees or managers of the scheme or otherwise), and

• (b) without an actuarial reduction,

but disregarding any special provision as to early repayment on grounds of ill health, redundancy or dismissal.

Excess retirement benefits of directors and past directors

14

• (1) The directors’ remuneration report must for each person who has served as a director of the company at any time during the relevant financial year contain a table setting out—

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

• (b) for each scheme interest—

• (i) a description of the type of interest awarded;

• (ii) a description of the basis on which the award is made;

• (iii) the face value of the award;

• (iv) the percentage of scheme interests that would be receivable if the minimum performance was achieved;

• (v) for a scheme interest that is a share option, an explanation of any difference between the exercise price per share and the price specified under paragraph 14(3) ...;

• (vi) the end of the period over which the performance measures and targets for that interest have to be achieved (or if there are different periods for different measures and targets, the end of whichever of those periods ends last); and

• (vii) a summary of the performance measures and targets if not set out elsewhere in the report.

• (2) In respect of a scheme interest relating to shares or share options, “face value” means the maximum number of shares that would vest if all performance measures and targets are met multiplied by either—

• (a) the share price at date of grant or

• (b) the average share price used to determine the number of shares awarded.

• (3) Where the report sets out the face value of an award in respect of a scheme interest relating to shares or share options, the report must specify—

• (a) whether the face value has been calculated using the share price at date of grant or the average share price;

• (b) where the share price at date of grant is used, the amount of that share price and the date of grant;

• (c) where the average share price is used, what that price was and the period used for calculating the average.

Compensation for past directors

15

The directors’ remuneration report must, for the relevant financial year, contain details of any payments of money or other assets to any person who was not a director of the company at the time the payment was made, but who had been a director of the company before that time, excluding—

• (a) any payments falling within paragraph 16;

• (b) any payments which are shown in the single total figure table;

• (c) any payments which have been disclosed in a previous directors’ remuneration report of the company;

• (d) any payments which are below a de minimisthreshold set by the company and stated in the report;

• (e) payments by way of regular pension benefits commenced in a previous year or dividend payments in respect of scheme interests retained after leaving office; and

• (f) payments in respect of employment with or any other contractual service performed for the company other than as a director.

Sums paid to third parties in respect of a director's services

16

The directors’ remuneration report must for the relevant financial year set out, for each person who has served as a director of the company at any time during that year, or any previous year, excluding payments which are below a de minimisthreshold set by the company and stated in the report—

• (a) the total amount of any payment for loss of office paid to or receivable by the person in respect of that financial year, broken down into each component comprised in that payment and the value of each component;

• (b) an explanation of how each component was calculated;

• (c) any other payments paid to or receivable by the person in connection with the termination of qualifying services, whether by way of compensation for loss of office or otherwise, including the treatment of outstanding incentive awards that vest on or following termination; and

• (d) where any discretion was exercised in respect of the payment, an explanation of how it was exercised.

PART 4 — DIRECTORS’ REMUNERATION POLICY

17

The directors’ remuneration report for the relevant financial year must contain, for each person who has served as a director of the company at any time during that year—

• (a) a statement of any requirements or guidelines for the director to own shares in the company and state whether or not those requirements or guidelines have been met;

• (b) in tabular form or forms—

• (i) the total number of interests in shares in the company of the director including interests of connected persons (as defined for the purposes of section 96B(2) of the Financial Services and Markets Act 2000);

• (ii) total number of scheme interests differentiating between—

• (aa) shares and share options; and

• (bb) those with or without performance measures;

• (iii) details of those scheme interests (which may exclude any details included elsewhere in the report); and

• (iv) details of share options which are—

• (aa) vested but unexercised; and

• (bb) exercised in the relevant financial year.

18

• (1) The directors’ remuneration report must—

• (a) contain a line graph that shows for each of—

• (i) a holding of shares of that class of the company’s equity share capital whose listing, or admission to dealing, has resulted in the company falling within the definition of “quoted company” ..., and

• (ii) a hypothetical holding of shares made up of shares of the same kinds and number as those by reference to which a broad equity market index is calculated,

a line drawn by joining up points plotted to represent, for each of the financial years in the relevant period, the total shareholder return on that holding; and

• (b) state the name of the index selected for the purposes of the graph and set out the reasons for selecting that index.

• (2) The report must also set out in tabular form the following information for each of the financial years in the relevant period in respect of the director undertaking the role of chief executive officer—

• (a) total remuneration as set out in the single total figure table;

• (b) the sum set out in the table in column headed “c” in the single total figure table expressed as a percentage of the maximum that could have been paid in respect of that component in the financial year; and

• (c) the sum set out in column headed “d” in the single total figure table restated as a percentage of the number of shares vesting against the maximum number of shares that could have been received, or, where paid in money and other assets, as a percentage of the maximum that could have been paid in respect of that component in the financial year.

• (3) For the purposes of sub-paragraphs (1), (2) and (6), “relevant period” means the specified period of financial years of which the last is the relevant financial year.

• (4) Where the relevant financial year—

• (a) is the company’s first financial year for which the performance graph is prepared in accordance with this paragraph, “specified” in sub-paragraph (3) means “five”;

• (b) is the company’s “second”, “third”, “fourth”, “fifth” financial year in which the report is prepared in accordance with this Schedule, “specified” in sub-paragraph (3) means “six”, “seven”, “eight”, “nine” as the case may be; and

• (c) is any financial year after the fifth financial year in which the report is prepared in accordance with this Schedule, “specified” means “ten”.

• (5) Sub-paragraph (2) may be complied with by use of either—

• (a) a sum based on the information supplied in the directors’ remuneration reports for those previous years, or,

• (b) where no such report has been compiled, a suitable corresponding sum.

• (6) For the purposes of sub-paragraph (1), the “total shareholder return” for a relevant period on a holding of shares must be calculated using a fair method that—

• (a) takes as its starting point the percentage change over the period in the market price of the holding;

• (b) involves making—

• (i) the assumptions specified in sub-paragraph (7) as to reinvestment of income, and

• (ii) the assumption specified in sub-paragraph (9) as to the funding of liabilities; and

• (c) makes provision for any replacement of shares in the holding by shares of a different description;

and the same method must be used for each of the holdings mentioned in sub-paragraph (1).

• (7) The assumptions as to reinvestment of income are—

• (a) that any benefit in the form of shares of the same kind as those in the holding is added to the holding at the time the benefit becomes receivable; and

• (b) that any benefit in cash, and an amount equal to the value of any benefit not in cash and not falling within paragraph (a), is applied at the time the benefit becomes receivable in the purchase at their market price of shares of the same kind as those in the holding and that the shares purchased are added to the holding at that time.

• (8) In sub-paragraph (7) “benefit” means any benefit (including, in particular, any dividend) receivable in respect of any shares in the holding by the holder from the company of whose share capital the shares form part.

• (9) The assumption as to the funding of liabilities is that, where the holder has a liability to the company of whose capital the shares in the holding form part, shares are sold from the holding—

• (a) immediately before the time by which the liability is due to be satisfied, and

• (b) in such numbers that, at the time of the sale, the market price of the shares sold equals the amount of the liability in respect of the shares in the holding that are not being sold.

• (10) In sub-paragraph (9) “liability” means a liability arising in respect of any shares in the holding or from the exercise of a right attached to any of those shares.

19

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

20

• (1) The directors’ remuneration report must set out in a graphical or tabular form that shows in respect of the relevant financial year and the immediately preceding financial year the actual expenditure of the company, and the difference in spend between those years, on—

• (a) remuneration paid to or receivable by all employees of the group;

• (b) distributions to shareholders by way of dividend and share buyback; and

• (c) any other significant distributions and payments or other uses of profit or cash-flow deemed by the directors to assist in understanding the relative importance of spend on pay.

• (2) There must be set out in a note to the report an explanation in respect of sub-paragraph (1)(c) why the particular matters were chosen by the directors and how the amounts were calculated.

• (3) Where the matters chosen for the report in respect of sub-paragraph (1)(c) in the relevant financial year are not the same as the other items set out in the report for previous years, an explanation for that change must be given.

21

• (1) The directors’ remuneration report must contain a statement describing how the company intends to implement the approved directors’ remuneration policy in the financial year following the relevant financial year.

• (2) The statement must include, where applicable, the—

• (a) performance measures and relative weightings for each; and

• (b) performance targets determined for the performance measures and how awards will be calculated.

• (3) Where this is not the first year of the approved remuneration policy, the statement should detail any significant changes in the way that the remuneration policy will be implemented in the next financial year compared to how it was implemented in the relevant financial year ....

• (4) This statement need not include information that is elsewhere in the report, including any disclosed in the directors’ remuneration policy.

22

• (1) If a committee of the company’s directors has considered matters relating to the directors’ remuneration for the relevant financial year, the directors’ remuneration report must—

• (a) name each director who was a member of the committee at any time when the committee was considering any such matter;

• (b) state whether any person provided to the committee advice, or services, that materially assisted the committee in their consideration of any such matter and name any person that has done so;

• (c) in the case of any person named under paragraph (b), who is not a director of the company (other than a person who provided legal advice on compliance with any relevant legislation), state—

• (i) the nature of any other services that that person has provided to the company during the relevant financial year;

• (ii) by whom that person was appointed, whether or not by the committee and how they were selected;

• (iii) whether and how the remuneration committee has satisfied itself that the advice received was objective and independent; and

• (iv) the amount of fee or other charge paid by the company to that person for the provision of the advice or services referred to in paragraph (b) and the basis on which it was charged.

• (2) In sub-paragraph (1)(b) “person” includes (in particular) any director of the company who does not fall within sub-paragraph (1)(a).

• (3) Sub-paragraph (1)(c) does not apply where the person was, at the time of the provision of the advice or service, an employee of the company.

• (4) This paragraph also applies to a committee which considers remuneration issues during the consideration of an individual’s nomination as a director.

SCHEDULE 9 — INTERPRETATION OF TERM “PROVISIONS”

PART 1 — MEANING FOR PURPOSES OF THESE REGULATIONS

Definition of “Provisions”

1

• (1) In these Regulations, 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 or the notes to them set out in Schedule 1, 2 or 3 to these Regulations 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.

2

References in these Regulations to provisions for liabilities or, in the case of insurance companies, to provisions for other risks 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.

PART 2 — MEANING FOR PURPOSES OF PARTS 18 AND 23 OF THE 2006 ACT

Financial assistance for purchase of own shares

3

The specified provisions for the purposes of section 677(3)(a) of the 2006 Act (Companies Act accounts: relevant provisions for purposes of financial assistance) are provisions within paragraph 2 of this Schedule.

Redemption or purchase by private company out of capital

4

The specified provisions for the purposes of section 712(2)(b)(i) of the 2006 Act (Companies Act accounts: relevant provisions to determine available profits for redemption or purchase out of capital) are provisions of any of the kinds mentioned in paragraphs 1 and 2 of this Schedule.

Net asset restriction on public companies distributions

5

The specified provisions for the purposes of section 831(3)(a) of the 2006 Act (Companies Act accounts: net asset restriction on public company distributions) are—

• (a) provisions within paragraph 2 of this Schedule, and

• (b) in the case of an insurance company, any amount included under liabilities items Ba (fund for future appropriations), C (technical provisions) and D (technical provisions for linked liabilities) in a balance sheet drawn up in accordance with Schedule 3 to these Regulations.

Distributions by investment companies

6

The specified provisions for the purposes of section 832(4)(a) of the 2006 Act (Companies Act accounts: investment companies distributions) are provisions within paragraph 2 of this Schedule.

Justification of distribution by references to accounts

7

The specified provisions for the purposes of section 836(1)(b)(i) of the 2006 Act (Companies Act accounts: relevant provisions for distribution purposes)—

• (a) are provisions of any of the kinds mentioned in paragraphs 1 and 2 of this Schedule, and

• (b) in the case of an insurance company, any amount included under liabilities items Ba (fund for future appropriations), C (technical provisions) and D (technical provisions for linked liabilities) in a balance sheet drawn up in accordance with Schedule 3 to these Regulations.

SCHEDULE 10 — GENERAL INTERPRETATION

Capitalisation

1

“Capitalisation”, in relation to work or costs, means treating that work or those costs as a fixed asset.

Financial instruments

2

Save in Schedule 2 to these Regulations, 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 where 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 (for banking companies, see the definition in paragraph 94 of Schedule 2 to these Regulations).

3

• (1) Save in Schedule 2 to these Regulations, the expressions listed in sub-paragraph (2) have the same meaning as they have in Directive 2013/34/EC of the European Parliament and of the Council of 26 June 2013 on the annual financial statements etc of certain types of undertakings and Council Directive 91/674/EEC of 19 December 1991 on the annual accounts and consolidated accounts of insurance undertakings (for banking companies, see the definition in paragraph 96 of Schedule 2 to these Regulations).

• (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”.

Fixed and current assets

4

“Fixed assets” means assets of a company which are intended for use on a continuing basis in the company's activities, and “current assets” means assets not intended for such use.

Fungible assets

5

“Fungible assets” means assets of any description which are substantially indistinguishable one from another.

Historical cost accounting rules

6

References to the historical cost accounting rules are to be read in accordance with paragraph 30 of Schedule 1, paragraph 38 of Schedule 2 and paragraph 36(1) of Schedule 3 to these Regulations.

Leases

7

• (1) “Long lease” means a lease in the case of which the portion of the term for which it was granted remaining unexpired at the end of the financial year is not less than 50 years.

• (2) “Short lease” means a lease which is not a long lease.

• (3) “Lease” includes an agreement for a lease.

Listed investments

8

• (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 the United Kingdom.

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

Loans

9

A loan or advance (including a liability comprising a loan or advance) is treated as falling due for repayment, and an instalment of a loan or advance 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

10

Amounts which in the particular context of any provision of Schedules 1, 2 or 3 to these Regulations are not material may be disregarded for the purposes of that provision.

Participating interests

11

• (1) A “participating interest” means an interest held by an undertaking in the shares of another undertaking which it holds on a long-term basis for the purpose of securing a contribution to its activities by the exercise of control or influence arising from or related to that interest.

• (2) A holding of 20% or more of the shares of the undertaking is to be presumed to be a participating interest unless the contrary is shown.

• (3) The reference in sub-paragraph (1) to an interest in shares includes—

• (a) an interest which is convertible into an interest in shares, and

• (b) an option to acquire shares or any such interest,

and an interest or option falls within paragraph (a) or (b) notwithstanding that the shares to which it relates are, until the conversion or the exercise of the option, unissued.

• (4) For the purposes of this regulation an interest held on behalf of an undertaking is to be treated as held by it.

• (5) In the balance sheet and profit and loss formats set out in Schedules 1, 2 and 3 to these Regulations, “participating interest” does not include an interest in a group undertaking.

• (6) For the purpose of this regulation as it applies in relation to the expression “participating interest”—

• (a) in those formats as they apply in relation to group accounts, and

• (b) in paragraph 19 of Schedule 6 (group accounts: undertakings to be accounted for as associated undertakings),

the references in sub-paragraphs (1) to (4) to the interest held by, and the purposes and activities of, the undertaking concerned are to be construed as references to the interest held by, and the purposes and activities of, the group (within the meaning of paragraph 1 of that Schedule).

Purchase price

12

“Purchase price”, in relation to an asset of a company or any raw materials or consumables used in the production of such an asset, includes any consideration (whether in cash or otherwise) given by the company in respect of that asset or those materials or consumables, as the case may be.

Realised profits and realised losses

13

“Realised profits” and “realised losses” have the same meaning as in section 853(4) and (5) of the 2006 Act.

Staff costs

14

• (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—

• (a) 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,

• (b) any sums set aside for the future payment of pensions directly by the company to current or former employees, and

• (c) 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 must 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.

Scots land tenure

15

In the application of these Regulations to Scotland, “land of freehold tenure” means land in respect of which the company is the owner; “land of leasehold tenure” means land of which the company is the tenant under a lease.

Signed

Gareth Thomas — Parliamentary Under Secretary of State for Trade and Consumer Affairs, — 2008-02-19

Explanatory note

(This note is not part of the Regulations)

Footnotes