PART 3OTHER MODIFICATIONS OF PROVISIONS RELATING TO ACCOUNTS
Disclosures in relation to financial instruments13
1
In Schedule 7 to the 1986 Order (disclosures to be made in directors' report)15, after paragraph 5 insert –
5AFinancial instruments
1
In relation to the use of financial instruments by a company and by its subsidiary undertakings, the directors' report must contain an indication of –
a
the financial risk management objectives and policies of the company and its subsidiary undertakings included in the consolidation, including the policy for hedging each major type of forecasted transaction for which hedge accounting is used, and
b
the exposure of the company and its subsidiary undertakings included in the consolidation to price risk, credit risk, liquidity risk and cash flow risk,
unless such information is not material for the assessment of the assets, liabilities, financial position and profit or loss of the company and its subsidiary undertakings included in the consolidation.
2
In sub-paragraph (1) the expressions “hedge accounting”, “price risk”, “credit risk”, “liquidity risk” and “cash flow risk” have the same meaning as they have in Council Directive 78/660/EEC on the annual accounts of certain types of companies, and in Council Directive 83/349/EEC on consolidated accounts, as amended16
2
In Article 254(4) of the 1986 Order (exemptions for small companies from disclosures in directors' report)17, after sub-paragraph (b) insert –
ba
paragraph 5A of Schedule 7 (disclosures relating to the use of financial instruments);