Disclosures in Notes II
Companies Act
Information on related undertakings
314. (1) Where at the end of a financial year of the company, a company—
(a) has a subsidiary undertaking, or
(b) holds an interest in any class of equity shares equal to 20 per cent or more of all such interests (in that class) in an undertaking that is not its subsidiary undertaking (in this section referred to as an “undertaking of substantial interest”),
a note shall be included in the statutory financial statements of the company for that year distinguishing between the subsidiary undertakings and the undertakings of substantial interest and giving the following information in relation to them:
(i) the name and registered office or, if there is no registered office, the principal place of business of each subsidiary undertaking or undertaking of substantial interest and the nature of the business carried on by it;
(ii) the identity of each class of shares held by the company in each subsidiary undertaking or undertaking of substantial interest and the proportion of the nominal value of the allotted shares in the subsidiary undertaking or undertaking of substantial interest of each such class represented by the shares of that class held by the company;
(iii) the aggregate amount of the net assets of each subsidiary undertaking or undertaking of substantial interest as at the end of the financial year of the subsidiary undertaking or undertaking of substantial interest ending with or last before the end of the financial year of the company to which the statutory financial statements relate; and
(iv) the profit or loss of the subsidiary undertaking or undertaking of substantial interest for its financial year identified in paragraph (iii).
(2) The notes to the statutory financial statements of a company shall contain the following particulars regarding each undertaking of which the company is a member having unlimited liability unless the information is not material to the true and fair view given by the statutory financial statements of the company:
(a) the name and registered office of each such undertaking;
(b) if the undertaking does not have a registered office, its principal place of business; and
(c) the legal form of the undertaking.
(3) Subsection (1) is subject to section 315 which provides for exemptions in respect of the information specified in subsection (1)(iii) and (iv).
(4) Subsections (1) and (2) are subject to section 316 which provides for exemptions generally in respect of the information specified in them.
(5) For the avoidance of doubt, the information required by subsections (1) and (2) is required for the financial year to which the statutory financial statements relate and comparable information for the preceding financial year need not be given.
(6) For the purposes of paragraph (b) of subsection (1), interests held by persons acting in their own name but on behalf of the first-mentioned company in that subsection shall be deemed to be held by that company and “an interest in any class of equity shares” in subsection (1) includes an interest in an instrument that is convertible into equity shares as well as an option to acquire equity shares.
Information on related undertakings: exemption from disclosures
315. The information on related undertakings required by paragraphs (iii) (net assets) and (iv) (profit or loss) of section 314 (1) need not be given in statutory financial statements—
(a) in respect of a subsidiary undertaking of a company, if the company prepares group financial statements and either—
(i) the subsidiary undertaking is consolidated in the statutory financial statements prepared by the company, or
(ii) the interest of the company in the equity shares of the subsidiary undertaking is included in or in a note to the company’s statutory financial statements by way of the equity method of accounting,
or
(b) in respect of a subsidiary undertaking of a company, if the company is exempt from the requirement to prepare group financial statements because it is relying on the consolidated accounts of a higher holding undertaking in accordance with section 299 or 300 or in accordance with IFRS, and either—
(i) the subsidiary undertaking is consolidated in the consolidated accounts of the higher holding undertaking, or
(ii) the interest of the company in the equity shares of the subsidiary undertaking is included in or in a note to the higher holding undertaking’s consolidated accounts by way of the equity method of accounting,
or
(c) in respect of an undertaking of substantial interest of a company, if the interest in the equity shares of the undertaking of substantial interest is included in or in a note to the company’s statutory financial statements by way of the equity method of accounting, or
(d) if—
(i) the subsidiary undertaking or the undertaking of substantial interest is not required to publish its financial statements, and
(ii) the interest held in the equity shares of the subsidiary undertaking or the undertaking of substantial interest does not amount to at least 50 per cent of all such interests,
or
(e) in relation to any undertaking, if the information required by paragraphs (iii) and (iv) of section 314 (1) is not material to the true and fair view given by the statutory financial statements.
Information on related undertakings: provision for certain information to be annexed to annual return
316. (1) If the directors of a company form the opinion that the number of undertakings in respect of which the company is required to disclose information under section 314 is such that compliance with the provisions of that section would result in a note to the statutory financial statements of excessive length, the information mentioned in that section need only be given in such a note in respect of—
(a) the undertakings whose assets, liabilities, financial position or profit or loss, in the opinion of the directors, principally affected the amounts shown in the company’s statutory financial statements, and
(b) undertakings excluded from the consolidation under section 303 (3).
(2) If advantage is taken of subsection (1)—
(a) there shall be included in the notes to the company’s statutory financial statements a statement that the information given deals only with the undertakings mentioned in that subsection, and
(b) the information specified in section 348 (4) shall be annexed to the annual return of the company to which the statutory financial statements are annexed.
(3) If a company fails to comply with subsection (2), the company and any officer of it who is in default shall be guilty of a category 3 offence.
(4) In subsection (3) “officer” includes any shadow director and de facto director.
Disclosures of particulars of staff
317. (1) The following information shall be given in the notes to the entity financial statements of a company with respect to the employees of the company—
(a) the average number of persons employed by the company in the financial year concerned, and
(b) the average number of persons employed within each category of persons employed by the company in that year.
(2) 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 shall also be stated the aggregate amounts respectively of—
(a) wages and salaries paid or payable in respect of that year to those persons,
(b) social insurance costs incurred by the company on their behalf,
(c) other retirement benefit costs so incurred, and
(d) other compensation costs of those persons (such costs to be specified by type) incurred by the company in the financial year.
(3) In relation to the aggregate of all amounts stated for the purposes of subsection (2) there shall be shown the amount capitalised into assets and the amount treated as an expense or loss of the financial year.
(4) The categories of persons employed by the company by reference to which the number required to be disclosed by subsection (1)(b) is to be determined shall be such as the directors may select, having regard to the manner in which the company’s activities are organised.
(5) For the purposes of subsection (1)(a) and (b), the average number of persons employed by the company shall be determined by dividing the relevant annual number by the number of months in the financial year of the company.
(6) For the purposes of subsection (5), the relevant annual number shall be determined by ascertaining for each month in the financial year of the company concerned—
(a) in the case 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), and
(b) in the case of subsection (1)(b), the number of persons in the category in question of persons so employed,
and, in either case, adding together all the monthly numbers.
(7) Where the company prepares group financial statements, those group financial statements shall contain the information required by subsections (1) to (3) for the company and its subsidiary undertakings included in the consolidation taken as a whole and subsections (4) to (6) have effect as if references in them to the company were references to the company and its subsidiary undertakings included in the consolidation.
(8) In this section—
“retirement benefit costs” includes any expenses incurred by the company in respect of—
(a) any retirement benefit scheme established for the purpose of providing retirement benefits for persons currently or formerly employed by the company,
(b) any amounts set aside for the future payment of retirement benefits directly by the company to current or former employees, and
(c) any retirement benefits paid directly by the company to such persons without first being so set aside;
“social insurance costs” means any contribution by a company to any state social insurance, social welfare, social security or retirement benefit scheme (including provision amounting to such under the Social Welfare Acts) or to any fund or arrangement, being a fund or arrangement connected with such a scheme, and “social insurance” means any such scheme, fund or arrangement;
“wages and salaries” in a company’s profit and loss account shall be determined by reference to payments made or expenses incurred in respect of all persons employed by the company during the financial year concerned who are taken into account in determining the relevant annual number for the purposes of subsection (1)(a).
Details of authorised share capital, allotted share capital and movements
318. (1) The following information shall be given in the notes to the entity financial statements of a company with respect to the company’s share capital:
(a) the number and aggregate nominal value of the shares comprised in the authorised (if any) share capital;
(b) where shares of more than one class have been allotted, the number and aggregate nominal value of shares of each class allotted;
(c) in relation to each class of allotted share capital, the amount that has been called up on those shares and of this the amount that has been fully paid up at the financial year end date;
(d) an analysis of allotted and called up share capital by class between—
(i) shares presented as share capital, and
(ii) shares presented as a liability;
and
(e) where shares are held as treasury shares, the number and aggregate nominal value of the treasury shares and, where shares of more than one class have been allotted, the number and aggregate nominal value of each class held as treasury shares.
(2) In the case of any part of the allotted share capital that consists of redeemable shares, the following information shall be given:
(a) the earliest and latest dates on which the company has power to redeem those shares;
(b) whether those shares must be redeemed in any event or are liable to be redeemed at the option of the company or the shareholder and at who’s option; and
(c) whether any (and, if so, what) premium is payable on redemption.
(3) If the company has allotted any shares during the financial year to which the entity financial statements relate, the following information shall be given:
(a) the reason for making the allotment;
(b) the classes of shares allotted;
(c) in respect of each class of shares, the number allotted, their aggregate nominal value and the consideration received by the company for the allotment; and
(d) whether the shares are presented as share capital or as a liability.
(4) With respect to any contingent right to the allotment of shares in the company, the following particulars shall be given:
(a) the number, description and amount of the shares in relation to which the right is exercisable;
(b) the period during which it is exercisable; and
(c) the price to be paid for the shares allotted.
(5) In subsection (4), “contingent right to the allotment of shares” means any option to subscribe for shares and any other right to require the allotment of shares to any person whether arising on the conversion into shares of securities of any other description or otherwise.
(6) Subject to subsection (7), where the company is a holding company, the number, description and nominal value of the shares in the company held by its subsidiary undertakings or their nominees and the consideration paid for those shares shall be disclosed in the notes to the entity financial statements of the company.
(7) Subsection (6) does not apply in relation to any shares—
(a) in the case of which the subsidiary undertaking is concerned as personal representative, or
(b) subject to subsection (8), in the case of which the subsidiary undertaking is concerned as trustee.
(8) The restriction on the application of subsection (6) by subsection (7)(b) does not have effect if the company or a subsidiary undertaking of the company is beneficially interested under the trust and is not so interested only by way of security for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money.
Financial assistance for purchase of own shares
319. (1) The entity financial statements of a company shall show the aggregate amount of financial assistance provided by the company, in the financial year to which the financial statements relate, that is permitted by section 82 (including the aggregate amount of any outstanding loans, guarantees and securities at the financial year end date) and shall separately disclose the aggregate of—
(a) the amount of any money provided, in that financial year, by the company in accordance with a scheme referred to in section 82 (6)(f), and
(b) the amount of any loans referred to in section 82 (6)(g) that have been made in that financial year by the company.
(2) Where a company prepares group financial statements, those group financial statements shall contain the information required by subsection (1) for the company and its subsidiary undertakings included in the consolidation taken as a whole.
(3) The entity and group financial statements shall show for the financial year immediately preceding the financial year to which those statements relate amounts corresponding to the amounts required to be shown by subsection (1) in those statements for the latter year.
Holding of own shares or shares in holding undertaking
320. (1) Where a company, or a nominee of a company, holds shares in the company or an interest in such shares, such shares or interest shall not be shown as an asset but the consideration paid for such shares or interest—
(a) shall be shown in the company’s entity financial statements as a deduction from the company’s capital and reserves (and the profits available for distribution shall accordingly be restricted by the amount of such deduction); and
(b) shall be shown in the company’s group financial statements, if any, as a deduction from group capital and reserves.
(2) Where a company, or a nominee of the company, holds shares in its holding undertaking or an interest in such shares, the profits of the company available for distribution shall be restricted by the amount of the consideration paid for such shares or interest.
(3) In addition to the requirements of subsection (2), in the case of the holding of shares by a company, or a nominee of the company, in its holding company (or the holding by a company or its nominee of an interest in such shares), the consideration paid for such shares or interest shall be shown in the holding company’s group financial statements, if any, as a deduction from group capital and reserves.
(4) The notes to the company’s entity financial statements (and, as the case may be, the group financial statements of the company or its holding company) shall give separately for the shares referred to in each of the preceding subsections—
(a) the number and aggregate nominal value of those shares and, where shares of more than one class have been acquired, the number and aggregate nominal value of each class of such shares, and
(b) particulars of any restriction on profits available for distribution by virtue of the application of subsection (1) or (2).
Disclosure of accounting policies
321. (1) A company shall disclose in the notes to its entity financial statements the accounting policies adopted by the company in determining—
(a) the items and amounts to be included in its balance sheet, and
(b) the items and amounts to be included in its profit and loss account.
(2) Where a company prepares group financial statements, the notes to those financial statements shall disclose the accounting policies adopted by the company in determining—
(a) the items and amounts to be included in its consolidated balance sheet, and
(b) the items and amounts to be included in its consolidated profit and loss account.
Disclosure of remuneration for audit, audit-related and non-audit work
322. (1) In this section—
“group auditor” means the statutory auditor carrying out the audit of group financial statements;
“remuneration” includes benefits in kind, reimbursement of expenses and other payments in cash.
(2) Subject to subsection (5), a company shall disclose in the notes to its entity financial statements relating to each financial year the following information:
(a) the remuneration for all work in each category specified in subsection (3) that was carried out—
(i) for the company,
(ii) in respect of that financial year,
by the statutory auditors of the company;
(b) the remuneration for all work in each category specified in subsection (3) that was carried out—
(i) for the company,
(ii) in respect of the preceding financial year,
by the statutory auditors of the company;
(c) where all or part of the remuneration referred to in paragraph (a) or (b) is in the form of a benefit in kind, the nature and estimated monetary value of the benefit.
(3) Remuneration shall be disclosed under subsection (2) for each of the following categories of work:
(a) the audit of entity financial statements;
(b) other assurance services;
(c) tax advisory services;
(d) other non-audit ser vices.
(4) Where the statutory auditors of a company are a statutory audit firm (within the meaning of the European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010 ( S.I. No. 220 of 2010 )), any work carried out by a partner in the firm or a statutory auditor on its behalf is considered for the purposes of this section to have been carried out by the audit firm.
(5) A company need not make the disclosure required by subsection (2) where—
(a) the company is to be treated as a small company in accordance with section 350 , or
(b) the company is to be treated as a medium company in accordance with section 350 , or
(c) the company is a subsidiary undertaking, the holding company of which is required to prepare and does prepare group financial statements, provided that—
(i) the subsidiary undertaking is included in the group financial statements, and
(ii) the information specified in subsection (8) is disclosed in the notes to the group financial statements.
(6) Where a company that is to be treated as a medium company in accordance with section 350 does not make the disclosure of information required by subsection (2) it shall provide such information to the Supervisory Authority when requested so to do.
(7) A holding company that prepares group financial statements shall disclose in the notes to those statements relating to each financial year the following information:
(a) the remuneration for all work in each category specified in subsection (8) that was carried out in respect of that financial year by the group auditor for the holding company and the subsidiary undertakings included in the consolidation;
(b) the remuneration for all work in each category specified in subsection (8) that was carried out in respect of the preceding financial year by the group auditor for the holding company and those undertakings;
(c) where all or part of the remuneration referred to in paragraph (a) or (b) is in the form of a benefit in kind, the nature and estimated monetary value of the benefit.
(8) Remuneration shall be disclosed under subsection (7) for each of the following categories of work:
(a) the audit of the group financial statements;
(b) other assurance services;
(c) tax advisory services;
(d) other non-audit services.
(9) Where more than one statutory auditor (whether a statutory auditor or a statutory audit firm) has been appointed as the statutory auditors of a company in a single financial year, separate disclosure in respect of the remuneration of each of them shall be provided in the notes to the company’s entity financial statements.
Information on arrangements not included in balance sheet
323. (1) Subject to subsection (2), the nature and business purpose of any arrangements of a company that are not included in its balance sheet and the financial impact on the company of those arrangements shall be provided in the notes to the statutory financial statements of the company if the risks or benefits arising from such arrangements are material and in so far as the disclosure of such risks or benefits is necessary for assessing the financial position of the company.
(2) In the case of a holding company that prepares group financial statements—
(a) subsection (1) shall be read as requiring the information there referred to in respect of arrangements there referred to, whether of the company or of any subsidiary undertaking included in the consolidation, to be provided in the notes to the group financial statements in so far as the disclosure of the risks or benefits concerned is necessary for assessing the financial position, taken as a whole, of the holding company and the subsidiary undertakings included in the consolidation, and
(b) the notes to the entity financial statements of the holding company shall not be required to provide information that is provided in the notes to its group financial statements in compliance with subsection (1), as it is to be read in accordance with this subsection.
CHAPTER 8
Approval of statutory financial statements
Approval and signing of statutory financial statements by board of directors
324. (1) Where the directors of a company are satisfied that the statutory financial statements of the company give a true and fair view and otherwise comply with this Act or, where applicable, with Article 4 of the IAS Regulation, those statements shall be approved by the board of directors and signed on their behalf by 2 directors, where there are 2 or more directors.
(2) Without prejudice to the generality of section 11 and its application to the other provisions of this section, where the company has a sole director subsection (1) operates to require that director, if he or she is satisfied as to the matters referred to in that subsection in respect of the statements, to approve and sign the statutory financial statements.
(3) Where group financial statements are prepared, the group financial statements and the entity financial statements of the holding company shall be approved by the board of directors of that company at the same time.
(4) The signature or signatures evidencing approval of the financial statements by the board shall be inserted on the face of the entity balance sheet and any group balance sheet.
(5) Every copy of every balance sheet which is laid before the members in general meeting or which is otherwise circulated, published or issued shall state the names of the persons who signed the balance sheet on behalf of the board of directors.
(6) If statutory financial statements are approved which do not give a true and fair view or otherwise comply with the requirements of this Act or, where applicable, of Article 4 of the IAS Regulation, every director of the company who is party to their approval, and who knows that they do not give such view or otherwise so comply or is reckless as to whether that is so, shall be guilty of a category 2 offence.
(7) For that purpose, every director of the company at the time the statutory financial statements are approved shall be taken to be a party to their approval unless he or she shows that he or she took all reasonable steps to prevent their being approved.
(8) If any copy of a balance sheet is—
(a) laid before the members or otherwise issued, circulated or published without the balance sheet (the original of it as distinct from the copy) having been signed as required by this section or without the required statement of the signatory’s name on the copy being included, or
(b) delivered to the Registrar without the balance sheet (the original of it as distinct from the copy) having been signed as required by this section or without the required statement of the signatory’s name on the copy being included,
the company and any officer of it who is in default shall be guilty of a category 2 offence.
(9) Subsection (8) shall not prohibit the issue, circulation or publication of—
(a) a fair and accurate summary of any statutory financial statement after such statutory financial statement shall have been signed on behalf of the directors,
(b) a fair and accurate summary of the profit or loss figures for part of the company’s financial year.
(10) In subsection (8) “officer” includes any shadow director and de facto director.
The text in italics on this page is sourced from the Irish Statute Book and is re-published under the Licence for Re-Use of Public Sector Information made pursuant to Directive 2003/98/EC Directive 2013/37/EU of the European Parliament and of the Council on the re-use of public sector information transposed into Irish law by the European Communities (Re-Use of Public Sector Information) Regulations 2005 to 2015.