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

Type Statutory-Instrument

Publication 2008-02-19

Last updated 2026-01-01

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

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(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.

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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

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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

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

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(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

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(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

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(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.

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(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

(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.

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(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

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(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

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(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.

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(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

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(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

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(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;

Compensation for past directors

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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;

(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

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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.

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(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

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.

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

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(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.

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(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.

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(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

(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

[^f00001]: 2006 c.46.

[^f00002]: Section 465 is amended by regulation 4(1) of S.I. 2008/393.

[^f00003]: Section 408 is amended by regulation 9 of S.I. 2008/393.

[^f00004]: A number in brackets following any item is a reference to the note of that number in the notes following the formats.

[^f00005]: See regulation 4(3)(a) for exemption for medium-sized companies in accounts delivered to registrar of companies.

[^f00006]: See regulation 4(3)(a) for exemption for medium-sized companies in accounts delivered to registrar of companies.

[^f00007]: See regulation 4(3)(a) for exemption for medium-sized companies in accounts delivered to registrar of companies.

[^f00008]: See regulation 4(3)(a) for exemption for medium-sized companies in accounts delivered to registrar of companies.

[^f00009]: A number in brackets following any item is a reference to the note of that number in the notes following the formats.

[^f00010]: O.J. L222 of 14.8.1978, page 11, as amended in particular by Directives 2001/65/EEC, 2003/51/EEC and 2006/46/EEC of the European Parliament and of the Council (O.J. L238 of 27.12.2001, page 28, O.J. L178 of 17.7.2003, page 16 and O.J. L224 of 16.8.2006, page 1).

[^f00011]: O.J. No. L372 of 31st December 1986, page 1,as amended in particular by Directives 2001/65/EEC, 2003/51/EEC and 2006/46/EEC of the European Parliament and of the Council (O.J. L238 of 27.12.2001, page 28, O.J. L178 of 17.7.2003, page 16 and O.J. L224 of 16.8.2006, page 1).

[^f00012]: 2000 c.8.

[^f00013]: S.I. 2001/544, as amended by S.I. 2001/3544, S.I. 2002/682, S.I. 2002/1310, S.I. 2002/1776, S.I. 2002/1777, S.I. 2003/1475, S.I. 2003/1476, S.I. 2003/2822, S.I. 2004/1610, S.I. 2004/2737, S.I. 2004/3379, S.I. 2005/593, S.I. 2005/1518, S.I. 2005/2114 and S.I. 2006/1969.

[^f00014]: A number in brackets following any item is a reference to the note of that number in the notes following the formats.

[^f00015]: FSA 2006/42.

[^f00016]: O.J. No. L185 of 4th July 1987, p.72.

[^f00017]: O.J. L345 of 19th December 2002, p.1.

[^f00018]: FSA 2006/42.

[^f00019]: See regulation 6(2) for exemption for companies falling within section 408 of the 2006 Act (individual profit and loss account where group accounts prepared).

[^f00020]: FSA 2006/42.

[^f00021]: S.I. 2001/2361.

[^f00022]: S.I. 1993/1820.

[^f00023]: 1993 c.48.

[^f00024]: 1993 c.49.

[^f00025]: 1988 c.1.

[^f00026]: Section 131 is prospectively repealed by the 2006 Act.

[^f00027]: Article 141 is prospectively repealed by the 2006 Act.

[^f00028]: Section 132 is prospectively repealed by the 2006 Act.

[^f00029]: Article 142 is prospectively repealed by the 2006 Act.

[^f00030]: 2005 asp 10.

[^f00031]: O.J.L222 of 14.8.1978, page 11, and O.J. L193 of 18.7.1983, page 1, as amended in particular by Directives 2001/65/EEC and 2003/51/EEC of the European Parliament and of the Council (O.J. L238 of 27.12.2001, page 28, and O.J. L178 of 17.7.2003, page 16).

[^f00032]: Section 143 is prospectively repealed by the 2006 Act.

[^f00033]: Article 153 is prospectively repealed by the 2006 Act.

[^f00034]: Section 146(1)(aa) was inserted by section 102C(5) of 1986 c.53, as inserted by section 1(1) of 1997 c.41. Section 146 is prospectively repealed by the 2006 Act.

[^f00035]: Article 156(1)(aa) was inserted by section 102C(6) of 1986 c.53, as inserted by section 1(1) of 1997 c.41. Article 156 is prospectively repealed by the 2006 Act.

[^f00036]: Section 150 is prospectively repealed by the 2006 Act.

[^f00037]: Article 160 is prospectively repealed by the 2006 Act.

[^f00038]: 1995 c.50.

[^f00039]: O.J. No. L142, 30.4.2004, p.12.

[^f00040]: O.J. L222 of 14.8.1978, page 11, as amended in particular by Directives 2001/65/EEC, 2003/51/EEC and 2006/46/EEC of the European Parliament and of the Council (O.J. L238 of 27.12.2001, page 28, O.J. L178 of 17.7.2003, page 16 and O.J. L224 of 16.8.2006, page 1).

[^f00041]: O.J L374 of 31.12.1991, page 7, as amended in particular by Directives 2001/65/EEC, 2003/51/EEC and 2006/46/EEC of the European Parliament and of the Council (O.J. L238 of 27.12.2001, page 28, O.J. L178 of 17.7.2003, page 16 and O.J. L224 of 16.8.2006, page 1).

[^f00042]: 2000 c.8.

SECTION A — GENERAL RULES

1

(1) Subject to the following provisions of this Schedule—

(a) every balance sheet of a company must show the items listed in either of the balance sheet formats in Section B of this Part, and

(b) every profit and loss account must show the items listed in either of the profit and loss account formats in Section B.

(2) References in this Schedule to the items listed in any of the formats in Section B are to those items read together with any of the notes following the formats which apply to those items.

(3) Subject to paragraph 1A, the items must be shown in the order and under the headings and sub-headings given in the particular format used, but—

(a) the notes to the formats may permit alternative positions for any particular items, and

(b) the heading or sub-heading for any item does not have to be distinguished by any letter or number assigned to that item in the format used.

2

(1) Where in accordance with paragraph 1 a company's balance sheet or profit and loss account for any financial year has been prepared by reference to one of the formats in Section B, the company's directors must use the same format in preparing Companies Act individual accounts for subsequent financial years, unless in their opinion there are special reasons for a change.

(2) Particulars of any such change must be given in a note to the accounts in which the new format is first used, and the reasons for the change must be explained.

3

(1) Any item required to be shown in a company's balance sheet or profit and loss account may be shown in greater detail than required by the particular format used.

(2) The 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 otherwise covered by any of the items listed in the format used, save that none of the following may be treated as assets in any balance sheet—

(a) preliminary expenses,

(b) expenses of, and commission on, any issue of shares or debentures, and

4

(1) Where the special nature of the company's business requires it, the company's directors must adapt the arrangement, headings and sub-headings otherwise required in respect of items given an Arabic number in the balance sheet or profit and loss account format used.

(2) The directors may combine items to which Arabic numbers are given in any of the formats in Section B if—

(a) their individual amounts are not material to assessing the state of affairs or profit or loss of the company for the financial year in question, or

(b) the combination facilitates that assessment.

(3) Where sub-paragraph (2)(b) applies, the individual amounts of any items which have been combined must be disclosed in a note to the accounts.

5

(1) Subject to sub-paragraph (2), the directors must not include a heading or sub-heading corresponding to an item in the balance sheet or profit and loss account format used if there is no amount to be shown for that item for the financial year to which the balance sheet or profit and loss account relates.

(2) Where an amount can be shown for the item in question for the immediately preceding financial year that amount must be shown under the heading or sub-heading required by the format for that item.

6

Every profit and loss account must show the amount of a company's profit or loss ...before taxation.

7

(1) For every item shown in the balance sheet or profit and loss account the corresponding amount for the immediately preceding financial year must also be shown.

(2) Where that 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 must be disclosed in a note to the accounts.

8

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.

9

The company's directors 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

ASSETS

(A) Called up share capital not paid (1)

(B) Fixed assets

(I) Intangible assets

(1) Development costs

(2) Concessions, patents, licences, trade marks and similar rights and assets (2)

(3) Goodwill (3)

(4) Payments on account

(II) Tangible assets

(1) Land and buildings

(2) Plant and machinery

(3) Fixtures, fittings, tools and equipment

(4) Payments on account and assets in course of construction

(III) Investments

(1) Shares in group undertakings

(2) Loans to group undertakings

(3) Participating interests

(4) Loans to undertakings in which the company has a participating interest

(5) Other investments other than loans

(6) Other loans

(7) Own shares (4)

(I) Stocks

(1) Raw materials and consumables

(2) Work in progress

(3) Finished goods and goods for resale

(4) Payments on account

(II) Debtors (5)

(1) Trade debtors

(2) Amounts owed by group undertakings

(3) Amounts owed by undertakings in which the company has a participating interest

(4) Other debtors

(5) Called up share capital not paid (1)

(6) Prepayments and accrued income (6)

(III) Investments

(1) Shares in group undertakings

(2) Own shares (4)

(3) Other investments

(IV) Cash at bank and in hand

(D) Prepayments and accrued income (6)

LIABILITIES

(A) Capital and reserves

(I) Called up share capital (12)

(II) Share premium account

(III) Revaluation reserve

(IV) Other reserves

(1) Capital redemption reserve

(2) Reserve for own shares

(3) Reserves provided for by the articles of association

(4) Other reserves

(V) Profit and loss account

(B) Provisions for liabilities

(1) Pensions and similar obligations

(2) Taxation, including deferred taxation

(3) Other provisions

(1) Debenture loans (7)

(2) Bank loans and overdrafts

(3) Payments received on account (8)

(4) Trade creditors

(5) Bills of exchange payable

(6) Amounts owed to group undertakings

(7) Amounts owed to undertakings in which the company has a participating interest

(8) Other creditors including taxation and social security (9)

(9) Accruals and deferred income (10)

(D) Accruals and deferred income (10)

A

Charges

(1) Cost of sales (14)

(2) Distribution costs (14)

(3) Administrative expenses (14)

(4) Amounts written off investments

(5) Interest payable and similar charges (16)

(6) Tax on profit or loss on ordinary activities

(7) Profit or loss on ordinary activities after taxation

(8) Extraordinary charges

(9) Tax on extraordinary profit or loss

(10) Other taxes not shown under the above items

(11) Profit or loss for the financial year

B

Income

(1) Turnover

(2) Other operating income

(3) Income from shares in group undertakings

(4) Income from participating interests

(5) Income from other fixed asset investments (15)

(6) Other interest receivable and similar income (15)

(7) Profit or loss on ordinary activities after taxation

(8) Extraordinary income

(9) Profit or loss for the financial year

A

Charges

(1) Reduction in stocks of finished goods and in work in progress

(a) Raw materials and consumables

(b) Other external charges

(3) Staff costs

(a) wages and salaries

(b) social security costs

(a) Depreciation and other amounts written off tangible and intangible fixed assets

(b) Exceptional amounts written off current assets

(5) Other operating charges

(6) Amounts written off investments

(7) Interest payable and similar charges (16)

(8) Tax on profit or loss on ordinary activities

(9) Profit or loss on ordinary activities after taxation

(10) Extraordinary charges

(11) Tax on extraordinary profit or loss

(12) Other taxes not shown under the above items

(13) Profit or loss for the financial year

B

Income

(1) Turnover

(2) Increase in stocks of finished goods and in work in progress

(3) Own work capitalised

(4) Other operating income

(5) Income from shares in group undertakings

(6) Income from participating interests

(7) Income from other fixed asset investments (15)

(8) Other interest receivable and similar income (15)

(9) Profit or loss on ordinary activities after taxation

(10) Extraordinary income

(11) Profit or loss for the financial year

SECTION A — ACCOUNTING PRINCIPLES

Preliminary

10

(1) The amounts to be included in respect of all items shown in a company's accounts must be determined in accordance with the principles set out in this Section.

(2) But if it appears to the company's directors that there are special reasons for departing from any of those principles in preparing the company's accounts in respect of any financial year they may do so, in which case particulars of the departure, the reasons for it and its effect must be given in a note to the accounts.

Accounting principles

11

The company is presumed to be carrying on business as a going concern.

12

Accounting policies and measurement bases must be applied consistently within the same accounts and from one financial year to the next.

13

The amount of any item must be determined on a prudent basis, and in particular—

(a) only profits realised at the balance sheet date are to be included in the profit and loss account, ...

(b) all liabilities which have arisen in respect of the financial year to which the accounts relate or a previous financial year must be taken into account, including those which only become apparent between the balance sheet date and the date on which it is signed on behalf of the board of directors in accordance with section 414 of the 2006 Act (approval and signing of accounts), and

(c) all provisions for diminution of value must be recognised, whether the result of the financial year is a profit or a loss.

14

All income and charges relating to the financial year to which the accounts relate must be taken into account, without regard to the date of receipt or payment.

15

In determining the aggregate amount of any item, the amount of each individual asset or liability that falls to be taken into account must be determined separately.

SECTION B — HISTORICAL COST ACCOUNTING RULES

Preliminary

16

Subject to Sections C and D of this Part of this Schedule, the amounts to be included in respect of all items shown in a company's accounts must be determined in accordance with the rules set out in this Section.

General rules

17

(1) The amount to be included in respect of any fixed asset must be its purchase price or production cost.

(2) This is subject to any provision for depreciation or diminution in value made in accordance with paragraphs 18 to 20.

Rules for depreciation and diminution in value

18

In the case of any fixed asset which has a limited useful economic life, the amount of—

(a) its purchase price or production cost, or

(b) where it is estimated that any such asset will have a residual value at the end of the period of its useful economic life, its purchase price or production cost less that estimated residual value,

must be reduced by provisions for depreciation calculated to write off that amount systematically over the period of the asset's useful economic life.

19

(1) Where a fixed asset investment falling to be included under item B.III of either of the balance sheet formats set out in Part 1 of this Schedule has diminished in value, provisions for diminution in value may be made in respect of it and the amount to be included in respect of it may be reduced accordingly.

(2) Provisions for diminution in value must be made in respect of any fixed asset which has diminished in value if the reduction in its value is expected to be permanent (whether its useful economic life is limited or not), and the amount to be included in respect of it must be reduced accordingly.

(3) Provisions made under sub-paragraph (1) or (2) must be charged to the profit and loss account and disclosed separately in a note to the accounts if not shown separately in the profit and loss account.

20

(1) Where the reasons for which any provision was made in accordance with paragraph 19 have ceased to apply to any extent, that provision must be written back to the extent that it is no longer necessary.

(1A) But provision made in accordance with paragraph 19(2) in respect of goodwill must not be written back to any extent.

(2) Any amounts written back under sub-paragraph (1) must be recognised in the profit and loss account and disclosed separately in a note to the accounts if not shown separately in the profit and loss account.

Development costs

21

(1) Where this is in accordance with generally accepted accounting principles or practice, development costs may be included in “other intangible assets” under “fixed assets” in the balance sheet formats set out in Section B of Part 1 of this Schedule.

(2) If any amount is included in a company's balance sheet in respect of development costs, the note on accounting policies (see paragraph 44 of this Schedule) must include the following information—

(a) the period over which the amount of those costs originally capitalised is being or is to be written off, and

(b) the reasons for capitalising the development costs in question.

Goodwill

22

(1) Intangible assets must be written off over the useful economic life of the intangible asset.

(2) Where in exceptional cases the useful life of intangible assets cannot be reliably estimated, such assets must be written off over a period chosen by the directors of the company.

(3) The period referred to in sub-paragraph (2) must not exceed ten years.

(4) There must be disclosed in a note to the accounts the period referred to in sub-paragraph (2) and the reasons for choosing that period.

Current assets

Excess of money owed over value received as an asset item

Assets included at a fixed amount

Determination of purchase price or production cost

Substitution of original stated amount where price or cost unknown

SECTION C — ALTERNATIVE ACCOUNTING RULES

Preliminary

Alternative accounting rules

Application of the depreciation rules

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

Revaluation reserve

SECTION D — FAIR VALUE ACCOUNTING

Inclusion of financial instruments at fair value

Determination of fair value

Hedged items

Other assets that may be included at fair value

Accounting for changes in value

The fair value reserve

SECTION A — GENERAL RULES

1

Subject to the following provisions of this Part of this Schedule—

(a) every balance sheet of a company must show the items listed in the balance sheet format set out in Section B of this Part, and

(b) every profit and loss account must show the items listed in either of the profit and loss account formats in Section B.

2

(1) References in this Part of this Schedule to the items listed in any of the formats set out in Section B, are to those items read together with any of the notes following the formats which apply to those items.

(2) The items must be shown in the order and under the headings and sub-headings given in the particular format used, but—

(a) the notes to the formats may permit alternative positions for any particular items,

(b) the heading or sub-heading for any item does not have to be distinguished by any letter or number assigned to that item in the format used, and

(c) where the heading of an item in the format used contains any wording in square brackets, that wording may be omitted if not applicable to the company.

3

(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 in Section B, the company's directors must use the same format in preparing the profit and loss account for subsequent financial years, unless in their opinion there are special reasons for a change.

(2) Particulars of any change must be given in a note to the accounts in which the new format is first used, and the reasons for the change must be explained.

4

(1) Any item required to be shown in a company's balance sheet or profit and loss account may be shown in greater detail than required by the particular format used.

(2) The 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 format used, save that none of the following may be treated as assets in any balance sheet—

(a) preliminary expenses,

(b) expenses of, and commission on, any issue of shares or debentures, and

5

(1) Items to which lower case letters are assigned in any of the formats in Section B may be combined in a company's accounts for any financial year if—

(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.

(2) Where sub-paragraph (1)(b) applies, the individual amounts of any items so combined must be disclosed in a note to the accounts and any notes required by this Schedule to the items so combined must, notwithstanding the combination, be given.

6

(1) Subject to sub-paragraph (2), the directors must not include a heading or sub-heading corresponding to an item in the balance sheet or profit and loss account format used if there is no amount to be shown for that item for the financial year to which the balance sheet or profit and loss account relates.

(2) Where an amount can be shown for the item in question for the immediately preceding financial year, that amount must be shown under the heading or sub-heading required by the format for that item.

7

(1) For every item shown in the balance sheet or profit and loss account the corresponding amount for the immediately preceding financial year must also be shown.

(2) Where that 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 must be disclosed in a note to the accounts.

8

(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 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).

(3) Charges required to be included in profit and loss account format 1, item 13 or format 2, item A8 may also be set off against income required to be included in format 1, item 14 or format 2, item B6 and the resulting figure shown as a single item (in format 2 at position A8 if negative and at position B6 if positive).

9

(1) Assets must be shown under the relevant balance sheet headings even where the company has pledged them as security for its own liabilities or for those of third parties or has otherwise assigned them as security to third parties.

(2) A company may not include in its balance sheet assets pledged or otherwise assigned to it as security unless such assets are in the form of cash in the hands of the company.

(3) Assets acquired in the name of and on behalf of third parties must not be shown in the balance sheet.

10

SECTION B — THE REQUIRED FORMATS

ASSETS

(1) Cash and balances at central [or post office] banks (1)

(2) Treasury bills and other eligible bills (20)

(a) Treasury bills and similar securities (2)

(b) Other eligible bills (3)

(3) Loans and advances to banks (4), (20)

(a) Repayable on demand

(b) Other loans and advances

(4) Loans and advances to customers (5), (20)

(5) Debt securities [and other fixed-income securities] (6), (20)

(a) Issued by public bodies

(b) Issued by other issuers

(6) Equity shares [and other variable-yield securities]

(7) Participating interests

(8) Shares in group undertakings

(9) Intangible fixed assets (7)

(10) Tangible fixed assets (8)

(11) Called up capital not paid (9)

(12) Own shares (10)

(13) Other assets

(14) Called up capital not paid (9)

(15) Prepayments and accrued income

LIABILITIES

(1) Deposits by banks (11), (20)

(a) Repayable on demand

(b) With agreed maturity dates or periods of notice

(2) Customer accounts (12), (20)

(a) Repayable on demand

(b) With agreed maturity dates or periods of notice

(3) Debt securities in issue (13), (20)

(a) Bonds and medium term notes

(b) Others

(4) Other liabilities

(5) Accruals and deferred income

(6) Provisions for liabilities

(a) Provisions for pensions and similar obligations

(b) Provisions for tax

(7) Subordinated liabilities (14), (20)

(8) Called up share capital (15)

(9) Share premium account

(10) Reserves

(a) Capital redemption reserve

(b) Reserve for own shares

(d) Other reserves

(11) Revaluation reserve

(12) Profit and loss account

MEMORANDUM ITEMS

(1) Contingent liabilities (16)

(1) Acceptances and endorsements

(2) Guarantees and assets pledged as collateral security (17)

(3) Other contingent liabilities

(2) Commitments (18)

(1) Commitments arising out of sale and option to resell transactions (19)

(2) Other commitments

Subordinated assets

11

(1) The amount of any assets that are subordinated must be shown either as a subdivision of any relevant asset item or in the notes to the accounts; in the latter case disclosure must be by reference to the relevant asset item or items in which the assets are included.

(2) In the case of assets items 2 to 5 in the balance sheet format, the amounts required to be shown by note (20) to the format as sub-items of those items must be further subdivided so as to show the amount of any claims included therein that are subordinated.

(3) For this purpose, assets are subordinated if there is a contractual obligation to the effect that, in the event of winding up or bankruptcy, they are to be repaid only after the claims of other creditors have been met, whether or not a ranking has been agreed between the subordinated creditors concerned.

Syndicated loans

12

(1) Where a company is a party to a syndicated loan transaction the company must include only that part of the total loan which it itself has funded.

(2) Where a company is a party to a syndicated loan transaction and has agreed to reimburse (in whole or in part) any other party to the syndicate any funds advanced by that party or any interest thereon upon the occurrence of any event, including the default of the borrower, any additional liability by reason of such a guarantee must be included as a contingent liability in Memorandum item 1(2).

Sale and repurchase transactions

13

(1) The following rules apply where a company is a party to a sale and repurchase transaction.

(2) Where the company is the transferor of the assets under the transaction—

(a) the assets transferred must, notwithstanding the transfer, be included in its balance sheet,

(b) the purchase price received by it must be included in its balance sheet as an amount owed to the transferee, and

(3) Where the company is the transferee of the assets under the transaction, it must not include the assets transferred in its balance sheet but the purchase price paid by it to the transferor must be so included as an amount owed by the transferor.

Sale and option to resell transactions

14

(1) The following rules apply where a company is a party to a sale and option to resell transaction.

(2) Where the company is the transferor of the assets under the transaction, it must not include in its balance sheet the assets transferred but it must enter under Memorandum item 2 an amount equal to the price agreed in the event of repurchase.

(3) Where the company is the transferee of the assets under the transaction it must include those assets in its balance sheet.

Managed funds

15

(1) For the purposes of this paragraph, “managed funds” are funds which the company administers in its own name but on behalf of others and to which it has legal title.

(2) The company must, in any case where claims and obligations arising in respect of managed funds fall to be treated as claims and obligations of the company, adopt the following accounting treatment.

(3) Claims and obligations representing managed funds are to be included in the company's balance sheet, with the notes to the accounts disclosing the total amount included with respect to such assets and liabilities in the balance sheet and showing the amount included under each relevant balance sheet item in respect of such assets or (as the case may be) liabilities.

Vertical layout

(1) Interest receivable (1)

(1) Interest receivable and similar income arising from debt securities [and other fixed-income securities]

(2) Other interest receivable and similar income

(2) Interest payable (2)

(3) Dividend income

(a) Income from equity shares [and other variable-yield securities]

(b) Income from participating interests

(4) Fees and commissions receivable (3)

(5) Fees and commissions payable (4)

(6) Dealing [profits] [losses] (5)

(7) Other operating income

(8) Administrative expenses

(a) Staff costs

(i) Wages and salaries

(ii) Social security costs

(iii) Other pension costs

(b) Other administrative expenses

(9) Depreciation and amortisation (6)

(10) Other operating charges

(11) Provisions

(a) Provisions for bad and doubtful debts (7)

(b) Provisions for contingent liabilities and commitments (8)

(12) Adjustments to provisions

(a) Adjustments to provisions for bad and doubtful debts (9)

(b) Adjustments to provisions for contingent liabilities and commitments (10)

(13) Amounts written off fixed asset investments (11)

(14) Adjustments to amounts written off fixed asset investments (12)

(15) [Profit] [loss] on ordinary activities before tax

(16) Tax on [profit] [loss] on ordinary activities

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

14

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

PART 1 — INTRODUCTORY

1

PART 2 — ANNUAL STATEMENT

Consideration by the directors of matters relating to directors' remuneration

2

Statement of company's policy on directors' remuneration

3

Statement of consideration of conditions elsewhere in company and group

4

Performance graph

5

Service contracts

6

PART 3 — ANNUAL REPORT ON REMUNERATION

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

7

Share options

8

9

10

Long term incentive schemes

11

12

Pensions

13

Excess retirement benefits of directors and past directors

14

Compensation for past directors

15

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

16

PART 4 — DIRECTORS’ REMUNERATION POLICY

17

18

19

20

21

22

SCHEDULE 9 — INTERPRETATION OF TERM “PROVISIONS”

PART 1 — MEANING FOR PURPOSES OF THESE REGULATIONS

Definition of “Provisions”

1

2

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

Financial assistance for purchase of own shares

3

Redemption or purchase by private company out of capital

4

Net asset restriction on public companies distributions

5

Distributions by investment companies

6

Justification of distribution by references to accounts

7

SCHEDULE 10 — GENERAL INTERPRETATION

Capitalisation

1

Financial instruments

2

3

Fixed and current assets

4

Fungible assets

5

Historical cost accounting rules

6

Leases

7

Listed investments

8

Loans

9

Materiality

10

Participating interests

11

Purchase price