The Companies (Summary Financial Statement) Regulations 2008

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations concern the summary financial statements which companies may send out in place of their full accounts and reports under sections 426 to 428 in Part 15 of the Companies Act 2006 (c.46) (“the 2006 Act”). They replace the Companies (Summary Financial Statement) Regulations 1995 (S.I. 1995/2092) (“the 1995 Regulations”) which were made under the corresponding provisions of the Companies Act 1985 (c.6), and the Companies (Summary Financial Statement) Regulations (Northern Ireland) 1996 (S.R. 1996/179) (“the 1996 Regulations”), made under provisions in the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)).

The Regulations come into force on 6th April 2008, and apply in relation to companies’ financial years beginning on or after that date (regulation 1(2)). They extend to the whole of the United Kingdom, reflecting the extent of the 2006 Act.

Regulation 3 extends the persons to whom summary financial statements may be sent to cover not only members, debenture holders and persons entitled to receive notice of general meetings, but also persons nominated to enjoy information rights under section 146 of the 2006 Act.

Part 2 of the Regulations re-enacts the conditions for sending out summary financial statements. Regulation 4 restates the circumstances in which the sending out of such a statement is prohibited, substituting references to a company’s constitution for references to its memorandum and articles. Part 2 also restates the provisions relating to the manner in which it is to be ascertained whether a person entitled to receive copies of the full accounts and reports wishes to receive summary financial statements in their place.

Part 3 of the Regulations re-enacts the provisions concerning the form and content of summary financial statements. Regulation 10(1) specifies that explanatory material which certain publicly traded companies are required to include in their directors’ report by paragraph 14 in Part 6 of Schedule 7 to the Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulations 2008 must either be included in a summary financial statement or sent separately at the same time as the statement. Regulation 10(2) specifies particular matters derived from the directors’ remuneration report which must be contained in the summary financial statements of quoted companies (as defined in section 385 of the 2006 Act).

Under Part 3 of the Regulations, where the company prepares Companies Act accounts (as defined in sections 395(1)(a) and 403(2)(a) of the 2006 Act) the form and content of the appropriate summary financial statements are specified in regulation 11(2) to (7) of, and Schedules 1 to 6 to, the Regulations. These cross refer to the form and content of the full accounts and reports of such companies which are set out in the Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008 and the Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulations 2008. The form and content of summary financial statements of companies preparing IAS accounts (as defined in sections 395(1)(b) and 403(1) and (2)(b) of the 2006 Act) are specified in regulation 11(8) and (9) of, and Schedules 7 and 8 to, the Regulations.

Part 4 of the Regulations revokes the 1995 and 1996 Regulations (but preserves them for financial years beginning before 6th April 2008), and makes transitional provision concerning continuation of choices as to whether to receive full accounts and reports or summary financial statements.

An Impact Assessment has not been produced for these Regulations as they have only a negligible impact on the costs of business, charities or voluntary bodies.