|
| |
|
(b) | where the company prepares group accounts, undertakings excluded |
| |
| |
(3) | If advantage is taken of subsection (2)— |
| |
(a) | there must be included in the notes to the company’s annual accounts |
| |
a statement that the information is given only with respect to such |
| 5 |
undertakings as are mentioned in that subsection, and |
| |
(b) | the full information (both that which is disclosed in the notes to the |
| |
accounts and that which is not) must be annexed to the company’s next |
| |
| |
| For this purpose the “next annual return” means that next delivered to the |
| 10 |
registrar after the accounts in question have been approved under section 420. |
| |
(4) | If a company fails to comply with subsection (3)(b), an offence is committed |
| |
| |
| |
(b) | every officer of the company who is in default. |
| 15 |
(5) | A person guilty of an offence under subsection (4) is liable on summary |
| |
conviction to a fine not exceeding level 3 on the standard scale and, for |
| |
continued contravention, a daily default fine not exceeding one-tenth of level |
| |
| |
417 | Information about employee numbers and costs |
| 20 |
(1) | In the case of a company not subject to the small companies regime, the |
| |
following information with respect to the employees of the company must be |
| |
given in notes to the company’s annual accounts— |
| |
(a) | the average number of persons employed by the company in the |
| |
| 25 |
(b) | the average number of persons so employed within each category of |
| |
persons employed by the company. |
| |
(2) | The categories by reference to which the number required to be disclosed by |
| |
subsection (1)(b) is to be determined must be such as the directors may select |
| |
having regard to the manner in which the company’s activities are organised. |
| 30 |
(3) | The average number required by subsection (1)(a) or (b) is determined by |
| |
dividing the relevant annual number by the number of months in the financial |
| |
| |
(4) | The relevant annual number is determined by ascertaining for each month in |
| |
| 35 |
(a) | for the purposes of subsection (1)(a), the number of persons employed |
| |
under contracts of service by the company in that month (whether |
| |
throughout the month or not); |
| |
(b) | for the purposes of subsection (1)(b), the number of persons in the |
| |
category in question of persons so employed; |
| 40 |
| and adding together all the monthly numbers. |
| |
(5) | In respect of all persons employed by the company during the financial year |
| |
who are taken into account in determining the relevant annual number for the |
| |
purposes of subsection (1)(a) there must also be stated the aggregate amounts |
| |
| 45 |
|
| |
|
| |
|
(a) | wages and salaries paid or payable in respect of that year to those |
| |
| |
(b) | social security costs incurred by the company on their behalf; and |
| |
(c) | other pension costs so incurred. |
| |
| This does not apply in so far as those amounts, or any of them, are stated |
| 5 |
elsewhere in the company’s accounts. |
| |
| |
“pension costs” includes any costs incurred by the company in respect |
| |
| |
(a) | any pension scheme established for the purpose of providing |
| 10 |
pensions for persons currently or formerly employed by the |
| |
| |
(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 |
| 15 |
| |
“social security costs” means any contributions by the company to any |
| |
state social security or pension scheme, fund or arrangement. |
| |
(7) | Where the company prepares group accounts, this section applies as if the |
| |
undertakings included in the consolidation were a single company. |
| 20 |
418 | Information about directors’ benefits: remuneration |
| |
(1) | The Secretary of State may make provision by regulations requiring |
| |
information to be given in notes to a company’s annual accounts about |
| |
| |
(2) | The matters about which information may be required include— |
| 25 |
(a) | gains made by directors on the exercise of share options; |
| |
(b) | benefits received or receivable by directors under long-term incentive |
| |
| |
(c) | payments for loss of office (as defined in section 214); |
| |
(d) | benefits receivable, and contributions for the purpose of providing |
| 30 |
benefits, in respect of past services of a person as director or in any |
| |
other capacity while director; |
| |
(e) | consideration paid to or receivable by third parties for making available |
| |
the services of a person as director or in any other capacity while |
| |
| 35 |
(3) | Without prejudice to the generality of subsection (1), regulations under this |
| |
section may make any such provision as was made immediately before the |
| |
commencement of this Part by Part 1 of Schedule 6 to the Companies Act 1985 |
| |
| |
(4) | For the purposes of this section, and regulations made under it, amounts paid |
| 40 |
| |
(a) | a person connected with a director, or |
| |
(b) | a body corporate controlled by a director, |
| |
| are treated as paid to or receivable by the director. |
| |
| The expressions “connected with” and “controlled by” in this subsection have |
| 45 |
the same meaning as in Part 10 (company directors). |
| |
|
| |
|
| |
|
| |
(a) | any director of a company, and |
| |
(b) | any person who is or has at any time in the preceding five years been a |
| |
| |
| to give notice to the company of such matters relating to himself as may be |
| 5 |
necessary for the purposes of regulations under this section. |
| |
(6) | A person who makes default in complying with subsection (5) commits an |
| |
offence and is liable on summary conviction to a fine not exceeding level 3 on |
| |
| |
419 | Information about directors’ benefits: advances, credit and guarantees |
| 10 |
(1) | In the case of a company that does not prepare group accounts, details of— |
| |
(a) | advances and credits granted by the company to its directors, and |
| |
(b) | guarantees of any kind entered into by the company on behalf of its |
| |
| |
| must be shown in the notes to its individual accounts. |
| 15 |
(2) | In the case of a parent company that prepares group accounts, details of— |
| |
(a) | advances and credits granted to the directors of the parent company, by |
| |
that company or by any of its subsidiary undertakings, and |
| |
(b) | guarantees of any kind entered into on behalf of the directors of the |
| |
parent company, by that company or by any of its subsidiary |
| 20 |
| |
| must be shown in the notes to the group accounts. |
| |
(3) | The details required of an advance or credit are— |
| |
| |
(b) | an indication of the interest rate, |
| 25 |
(c) | its main conditions, and |
| |
| |
(4) | The details required of a guarantee are— |
| |
| |
(b) | the amount of the maximum liability that may be incurred by the |
| 30 |
company (or its subsidiary), and |
| |
(c) | any amount paid and any liability incurred by the company (or its |
| |
subsidiary) for the purpose of fulfilling the guarantee (including any |
| |
loss incurred by reason of enforcement of the guarantee). |
| |
(5) | There must also be stated in the notes to the accounts the totals— |
| 35 |
(a) | of amounts stated under subsection (3)(a), |
| |
(b) | of amounts stated under subsection (3)(d), |
| |
(c) | of amounts stated under subsection (4)(b), and |
| |
(d) | of amounts stated under subsection (4)(c). |
| |
(6) | References in this section to the directors of a company are to the persons who |
| 40 |
were a director at any time in the financial year to which the accounts relate. |
| |
(7) | The requirements of this section apply in relation to every advance, credit or |
| |
guarantee subsisting at any time in the financial year to which the accounts |
| |
| |
(a) | whenever it was entered into, |
| 45 |
|
| |
|
| |
|
(b) | whether or not the person concerned was a director of the company in |
| |
question at the time it was entered into, and |
| |
(c) | in the case of an advance, credit or guarantee involving a subsidiary |
| |
undertaking of that company, whether or not that undertaking was |
| |
such a subsidiary undertaking at the time it was entered into. |
| 5 |
(8) | Banking companies and the holding companies of credit institutions need only |
| |
state the details required by subsections (3)(a) and (4)(b). |
| |
Approval and signing of accounts |
| |
420 | Approval and signing of accounts |
| |
(1) | A company’s annual accounts must be approved by the board of directors and |
| 10 |
signed on behalf of the board by a director of the company. |
| |
(2) | The signature must be on the company’s balance sheet. |
| |
(3) | If the accounts are prepared in accordance with the provisions applicable to |
| |
companies subject to the small companies regime, the balance sheet must |
| |
contain a statement to that effect in a prominent position above the signature. |
| 15 |
(4) | If annual accounts are approved that do not comply with the requirements of |
| |
this Act (and, where applicable, of Article 4 of the IAS Regulation), every |
| |
director of the company who— |
| |
(a) | knew that they did not comply, or was reckless as to whether they |
| |
| 20 |
(b) | failed to take reasonable steps to secure compliance with those |
| |
requirements or, as the case may be, to prevent the accounts from being |
| |
| |
| |
(5) | A person guilty of an offence under this section is liable— |
| 25 |
(a) | on conviction on indictment, to a fine; |
| |
(b) | on summary conviction, to a fine not exceeding the statutory |
| |
| |
| |
| 30 |
| |
421 | Duty to prepare directors’ report |
| |
(1) | The directors of a company must prepare a directors’ report for each financial |
| |
| |
(2) | For a financial year in which— |
| 35 |
(a) | the company is a parent company, and |
| |
(b) | the directors of the company prepare group accounts, |
| |
| the directors’ report must be a consolidated report (a “group directors’ report”) |
| |
relating to the undertakings included in the consolidation. |
| |
|
| |
|
| |
|
(3) | A group directors’ report may, where appropriate, give greater emphasis to |
| |
the matters that are significant to the undertakings included in the |
| |
consolidation, taken as a whole. |
| |
(4) | In the case of failure to comply with the requirement to prepare a directors’ |
| |
report, an offence is committed by every person who— |
| 5 |
(a) | was a director of the company immediately before the end of the period |
| |
for filing accounts and reports for the financial year in question, and |
| |
(b) | failed to take all reasonable steps for securing compliance with that |
| |
| |
(5) | A person guilty of an offence under this section is liable— |
| 10 |
(a) | on conviction on indictment, to a fine; |
| |
(b) | on summary conviction, to a fine not exceeding the statutory |
| |
| |
422 | Contents of directors’ report: general |
| |
(1) | The directors’ report for a financial year must state— |
| 15 |
(a) | the names of the persons who, at any time during the financial year, |
| |
were directors of the company, and |
| |
(b) | the principal activities of the company in the course of the year. |
| |
(2) | In relation to a group directors’ report subsection (1)(b) has effect as if the |
| |
reference to the company was to the undertakings included in the |
| 20 |
| |
(3) | Except in the case of a company subject to the small companies regime, the |
| |
report must state the amount (if any) that the directors recommend should be |
| |
| |
(4) | The Secretary of State may make provision by regulations as to other matters |
| 25 |
that must be disclosed in a directors’ report. |
| |
| Without prejudice to the generality of this power, the regulations may make |
| |
any such provision as was formerly made by Schedule 7 to the Companies Act |
| |
| |
423 | Contents of directors’ report: business review |
| 30 |
(1) | Unless the company is subject to the small companies’ regime, the directors’ |
| |
report must contain a business review. |
| |
(2) | The purpose of the business review is to inform members of the company and |
| |
help them assess how the directors have performed their duty under section |
| |
173 (duty to promote the success of the company). |
| 35 |
(3) | The business review must contain— |
| |
(a) | a fair review of the company’s business, and |
| |
(b) | a description of the principal risks and uncertainties facing the |
| |
| |
(4) | The review required is a balanced and comprehensive analysis of— |
| 40 |
(a) | the development and performance of the company’s business during |
| |
| |
(b) | the position of the company’s business at the end of that year, |
| |
|
| |
|
| |
|
| consistent with the size and complexity of the business. |
| |
(5) | In the case of a quoted company the business review must, to the extent |
| |
necessary for an understanding of the development, performance or position |
| |
of the company’s business, include— |
| |
(a) | the main trends and factors likely to affect the future development, |
| 5 |
performance and position of the company’s business; and |
| |
| |
(i) | environmental matters (including the impact of the company’s |
| |
business on the environment), |
| |
(ii) | the company’s employees, and |
| 10 |
(iii) | social and community issues, |
| |
| including information about any policies of the company in relation to |
| |
those matters and the effectiveness of those policies. |
| |
| If the review does not contain information of each kind mentioned in |
| |
paragraph (b)(i), (ii) and (iii), it must state which of those kinds of information |
| 15 |
| |
(6) | The review must, to the extent necessary for an understanding of the |
| |
development, performance or position of the company’s business, include— |
| |
(a) | analysis using financial key performance indicators, and |
| |
(b) | where appropriate, analysis using other key performance indicators, |
| 20 |
including information relating to environmental matters and employee |
| |
| |
| “Key performance indicators” means factors by reference to which the |
| |
development, performance or position of the company’s business can be |
| |
| 25 |
(7) | Where a company qualifies as medium-sized in relation to a financial year (see |
| |
sections 473 to 475), the directors’ report for the year need not comply with the |
| |
requirements of subsection (6) so far as they relate to non-financial |
| |
| |
(8) | The review must, where appropriate, include references to, and additional |
| 30 |
explanations of, amounts included in the company’s annual accounts. |
| |
(9) | In relation to a group directors’ report this section has effect as if the references |
| |
to the company were references to the undertakings included in the |
| |
| |
(10) | Nothing in this section requires the disclosure of information about impending |
| 35 |
developments or matters in the course of negotiation if the disclosure would, |
| |
in the opinion of the directors, be seriously prejudicial to the interests of the |
| |
| |
424 | Contents of directors’ report: statement as to disclosure to auditors |
| |
(1) | This section applies to a company unless— |
| 40 |
(a) | it is exempt for the financial year in question from the requirements of |
| |
Part 17 as to audit of accounts, and |
| |
(b) | the directors take advantage of that exemption. |
| |
(2) | The directors’ report must contain a statement to the effect that, in the case of |
| |
each of the persons who are directors at the time the report is approved— |
| 45 |
|
| |
|
| |
|
(a) | so far as the director is aware, there is no relevant audit information of |
| |
which the company’s auditor is unaware, and |
| |
(b) | he has taken all the steps that he ought to have taken as a director in |
| |
order to make himself aware of any relevant audit information and to |
| |
establish that the company’s auditor is aware of that information. |
| 5 |
(3) | “Relevant audit information” means information needed by the company’s |
| |
auditor in connection with preparing his report. |
| |
(4) | A director is regarded as having taken all the steps that he ought to have taken |
| |
as a director in order to do the things mentioned in subsection (2)(b) if he has— |
| |
(a) | made such enquiries of his fellow directors and of the company’s |
| 10 |
auditors for that purpose, and |
| |
(b) | taken such other steps (if any) for that purpose, |
| |
| as are required by his duty as a director of the company to exercise reasonable |
| |
care, skill and diligence. |
| |
(5) | Where a directors’ report containing the statement required by this section is |
| 15 |
approved but the statement is false, every director of the company who— |
| |
(a) | knew that the statement was false, or was reckless as to whether it was |
| |
| |
(b) | failed to take reasonable steps to prevent the report from being |
| |
| 20 |
| |
(6) | A person guilty of an offence under subsection (5) is liable— |
| |
(a) | on conviction on indictment, to imprisonment for a term not exceeding |
| |
two years or a fine (or both); |
| |
(b) | on summary conviction— |
| 25 |
(i) | in England and Wales, to imprisonment for a term not |
| |
exceeding twelve months or to a fine not exceeding the |
| |
statutory maximum (or both); |
| |
(ii) | in Scotland or Northern Ireland, to imprisonment for a term not |
| |
exceeding six months, or to a fine not exceeding the statutory |
| 30 |
| |
425 | Approval and signing of directors’ report |
| |
(1) | The directors’ report must be approved by the board of directors and signed |
| |
on behalf of the board by a director or the secretary of the company. |
| |
(2) | If the report is prepared in accordance with the small companies regime, it |
| 35 |
must contain a statement to that effect in a prominent position above the |
| |
| |
(3) | If a directors’ report is approved that does not comply with the requirements |
| |
of this Act, every director of the company who— |
| |
(a) | knew that it did not comply, or was reckless as to whether it complied, |
| 40 |
| |
(b) | failed to take reasonable steps to secure compliance with those |
| |
requirements or, as the case may be, to prevent the report from being |
| |
| |
| 45 |
(4) | A person guilty of an offence under this section is liable— |
| |
|
| |
|