Companies Act 1985

261 Directors' report

(1) Where a company's individual accounts are special category, the following applies with respect to the directors' report accompanying the accounts.

(2) Paragraphs (a) and (b) of section 235(1) do not apply as regards the contents of the report; but the report shall deal with the company's state of affairs, the amount (if any) which the directors recommend should be paid as dividend, and the amount (if any) which they propose to carry to reserves (within the meaning of Schedule 9).

(3) Information which is otherwise required to be given in the accounts, and allowed to be given in a statement annexed, may be given in the directors' report instead of in the accounts. If any information is so given, the report is treated as forming part of the accounts for the purposes of audit, except that the auditors shall report on it only so far as it gives that information.

(4) Where advantage is taken of subsection (3) to show an item in the directors' report instead of in the accounts, the report shall also show the corresponding amount for (or, as the case may require, as at the end of) the immediately preceding financial year of that item, except where the amount would not have had to be shown had the item been shown in the accounts.

(5) Schedule 7 applies to the directors' report only in respect of the matters to be stated, and the information to be given, under paragraphs 1 to 5 (but excluding paragraph 2(3)) and 9, 10 and 11 ; and paragraph 1 of the Schedule does not apply if the company has the benefit of any provision of Part III of Schedule 9.

(6) The report shall, in addition to complying with those paragraphs of Schedule 7, also comply with Schedule 10. where and so far as applicable (disclosure of recent share and debenture issues; turnover and profitability ; size of labour force and wages paid; and other general matters); but in that Schedule, paragraphs 2 to 4 and 6 do not apply to a directors' report attached to any accounts unless the documents required to be comprised in those accounts include group accounts which are special category.

(7) Section 237(6) does not apply.