United Kingdom Statutory Instruments

(a) in accordance with section 69B ("Friendly Societies Act individual accounts"), or

(b) in accordance with international accounting standards ("IAS individual accounts").

This subsection is subject to subsection (3) and section 69I (consistency of accounts).

    (3) After the first financial year in which the committee of management of a friendly society or registered branch prepares IAS individual accounts ("the first IAS year"), all subsequent individual accounts of the society or branch must be prepared in accordance with international accounting standards unless there is a relevant change of circumstance.

    (4) There is a relevant change of circumstance if, at any time during or after the first IAS year—

(a) the society or branch becomes a subsidiary undertaking of another undertaking and individual accounts for that undertaking are not prepared in accordance with international accounting standards,

(b) the society or branch ceases to be a society or part of a society with securities admitted to trading on a regulated market, or

(c) a parent undertaking of the society or branch ceases to be an undertaking with securities admitted to trading on a regulated market.

(a) the development and performance of the business of the friendly society, its subsidiary undertakings and bodies that it jointly controls (if any) during the financial year, and

(b) the position of the friendly society, its subsidiary undertakings and bodies that it jointly controls (if any) at the end of that year,

consistent with the size and complexity of the business.

    (2) The review must, to the extent necessary for an understanding of the development, performance or position of the business of the society, its subsidiary undertakings and bodies that it jointly controls (if any), include—

(a) analysis using financial key performance indicators, and

(b) where appropriate, analysis using other key performance indicators, including information relating to environmental matters and employee matters.

    (3) The review must, where appropriate, include references to additional explanations of amounts included in the annual accounts of the society.

    (4) In this section "key performance indicators" means factors by reference to which the development, performance or position of the business of the society, any subsidiary undertakings it has and any bodies that it jointly controls, can be measured effectively.".

(a) state whether in their opinion the information given in the report of the committee of management for the financial year for which the annual accounts are prepared is consistent with those accounts; and

(b) state whether in their opinion that report has been prepared in accordance with this Act and the regulations made under it."

(a) an introduction identifying the annual accounts that are the subject of the audit and the financial reporting framework that has been applied in their preparation;

(b) a description of the scope of the audit identifying the auditing standards in accordance with which the audit was conducted.

    (5B) The auditors shall, in their report, state clearly whether in the auditors' opinion the annual accounts have been properly prepared in accordance with the requirements of this Act (and, where applicable, Article 4 of the IAS Regulation).

    (5C) The auditors shall, in their report, state in particular whether the annual accounts give a true and fair view in accordance with the relevant financial reporting framework—

(a) in the case of an individual balance sheet, of the state of affairs of the society or branch as at the end of the financial year;

(b) in the case of an individual income and expenditure account, of the income and expenditure of the society or branch for the financial year;

(c) in the case of the group accounts of an incorporated friendly society, of the state of affairs as at the end of the financial year and of the income and expenditure for the financial year of the society and the subsidiary undertakings dealt with in the group accounts, so far as concerns members of the society.

    (5D) The auditors' report—

(a) shall be either unqualified or qualified, and

(b) shall include a reference to any matters to which the auditors wish to draw attention by way of emphasis without qualifying the report.".

(a) his services as a member of the committee; or

(b) his services while a member of the committee—


(i) as director of any of the society's associated bodies; or

(ii) otherwise in connection with the management of the affairs of the society or any of its associated bodies.

    (3) There must also be shown, separately, the aggregate amounts within sub-paragraph (2)(a), sub-paragraph (2)(b)(i) and sub-paragraph (2)(b)(ii).

    (4) For the purposes of this paragraph the "emoluments" of a person include—

(a) fees and percentages;

(b) sums paid by way of expenses allowance (so far as those sums are chargeable to United Kingdom income tax);

(c) contributions paid in respect of him under any pension scheme; and

(d) the estimated money value of any other benefits received by him otherwise than in cash,

and emoluments in respect of a person's accepting office as a member of the committee must be treated as emoluments in respect of his services as a member of the committee.

(a) the number of members of the committee whose emoluments fell within each of the following bands—


(i) not more than £5,000;

(ii) more than £5,000 but not more than £10,000;

(iii) more than £10,000 but not more than £15,000;



and in successive bands of £5,000;

(b) if the emoluments of any of the members of the committee exceeded that of the chairman, the greatest amount of emoluments of any member of the committee.

    (4) Where more than one person has been chairman during the year, the reference in paragraph (3)(b) to the emoluments of the chairman is to the aggregate of the emoluments of each person who has been chairman, so far as attributable to the period during which he was chairman.

    (5) The information required by sub-paragraph (3)(a) need not be given in respect of a member of the committee who discharged his duties as such wholly or mainly outside the United Kingdom; and any such member of the committee must be left out of account for the purposes of sub-paragraph (3)(b).

    (6) In this paragraph "emoluments" has the same meaning as in paragraph 1, except that it does not include contributions paid in respect of a person under a pension scheme.

(a) the number of members of the committee who have waived rights to receive emoluments in the present financial year or in the future which, but for the waiver, would have fallen to be included in the amount shown under paragraph 1(1) in the present annual accounts or in future annual accounts; and

(b) the aggregate amount of those emoluments.

    (2) For the purposes of this paragraph it must be assumed that a sum not receivable in respect of a period would have been paid at the time at which it was due, and if such sum was payable only on demand, it must be deemed to have been due at the time of the waiver.

    (3) In this paragraph "emoluments" has the same meaning as in paragraph 1.

(a) loss of office as a member of the committee; or

(b) loss, while a member of the committee or in connection with his ceasing to be a member of the committee, of—


(i) any other office in connection with the management of the society's affairs; or

(ii) any office as director or otherwise in connection with the management of the affairs of any associated body of the society,



and must distinguish between compensation in respect of the office of member of the committee or a director of any of its associated bodies, and compensation in respect of other offices.

    (3) References to compensation in this paragraph include benefits otherwise than in cash, and in relation to such compensation—

(a) references to its amount are to the estimated money value of the benefit; and

(b) the nature of the compensation must be disclosed.

    (4) References to compensation for loss of office include compensation in consideration for, or in connection with, a person's retirement from office.

(a) as a member of the committee; or

(b) while a member of the committee—


(i) as director of any of its associated bodies; or

(ii) otherwise in connection with the management of the affairs of the society or any of its associated bodies.

    (2) The reference in sub-paragraph (1) to consideration includes benefits paid or receivable otherwise than in cash, and in relation to such consideration—

(a) references to its amount are to the estimated money value of the benefit; and

(b) the nature of the consideration must be disclosed.

    (3) The reference in sub-paragraph (1) to third parties is to a person other than—

(a) the member of the committee himself or a person connected with him or a body corporate associated with him; and

(b) the society or any of its associated bodies.

Supplementary provisions regarding committee members' emoluments

     7. —(1) The following applies with respect to the amounts to be shown under paragraphs 1, 4, 5 and 6.

    (2) The amount in each case includes all relevant sums paid by or receivable from—

(a) the society;

(b) the society's associated bodies; and

(c) any other person, except sums to be accounted for to the society or any of its associated bodies.

    (3) The amount to be shown under paragraph 5 must distinguish between the sums respectively paid by or receivable from the society, its associated bodies and persons other than the society and its associated bodies.

    (4) References in this paragraph to amounts paid to or receivable by a person, include amounts paid to or receivable by a person connected with him or a body corporate associated with him (but not so as to require an amount to be counted twice).

     8. —(1) The amounts to be shown for any financial year under paragraphs 1, 2, 5 and 6 are the sums receivable in respect of that year (whenever paid) or, in the case of sums not receivable in respect of a period, the sums paid during that year.

    (2) But where—

(a) any sums are not shown in a note to the accounts for the relevant financial year on the ground that the person receiving them is liable to account for them as mentioned in paragraph 7(2), but the liability is thereafter wholly or partly released or is not enforced within a period of 2 years; or

(b) any sums paid by way of expenses allowance are charged to United Kingdom income tax after the end of the relevant financial year

those sums must, to the extent to which the liability is released or not enforced or they are charged as mentioned (as the case may be), be shown in a note to the first accounts in which it is practicable to show them and must be distinguished from the amounts to be shown apart from this provision.

     9. —(1) Where the Chief Executive of the society is not also a member of the committee of the society, he must be treated, for the purposes of paragraphs 1 to 8 as a member of that committee.

    (2) In such circumstances there must be a note in the accounts specifying that the Chief Executive has been so treated.

(a) references to services to an associated body of a society must be taken to refer to services to a body which was an associated body of the society at the time at which the services were rendered, or, in the case only of paragraph 5, immediately before the member of the committee lost his office as member of the committee;

(b) "pension" includes any superannuation allowance, superannuation gratuity or similar payment;

(c) "pension scheme" means a scheme for the provision of pensions in respect of services as a member of the committee or otherwise which is maintained in whole or in part by means of contributions;

(d) "contribution", in relation to a pension scheme, means any payment (including an insurance premium) paid for the purposes of the scheme by or in respect of persons rendering services in respect of which pensions will or may become payable under the scheme except that it does not include any payment in respect of two or more persons if the amount paid in respect of each of them is not ascertainable.

(a) the average number of persons employed by the society in the financial year; and

(b) the average number of persons so employed within each category of persons employed by the society.

    (2) The average number required by sub-paragraph (1)(a) or (b) is determined by dividing the relevant annual number by the number of complete calendar months in the financial year.

    (3) The relevant annual number is determined by ascertaining for each complete calendar month in the financial year—

(a) for the purposes of sub-paragraph (1)(a), the number of persons employed under contracts of service by the society in that month (whether throughout the month or not);

(b) for the purposes of sub-paragraph (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.

    (4) In respect of all persons employed by the society during the financial year who are taken into account in determining the relevant annual number for the purposes of paragraph (1)(a) there must 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 security costs incurred by the society 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 elsewhere in the society's accounts.

    (5) For the purposes of sub-paragraph (1)(b) the categories of person employed by the society are such as the directors may select, having regard to the manner in which the society's activities are organised.

(a) if it is incorporated outside the United Kingdom, the country in which it is incorporated; or

(b) if it is incorporated in the United Kingdom, whether it is registered in England and Wales, Scotland or in Northern Ireland.

    (4) The specific reason why each subsidiary undertaking is not required to be included in consolidated accounts must be stated.

(a) the identity of the class; and

(b) the proportion of the nominal value of the shares of that class represented by those shares.

    (2) The shares held by or on behalf of the society itself must be distinguished from those attributed to the society which are held by or on behalf of a subsidiary undertaking.

(a) the aggregate amount of its capital and reserves as at the end of its relevant financial year; and

(b) its profit or loss for that year.

    (2) The information referred to in sub-paragraph (1) need not be given if the society's investment in the subsidiary undertaking is included in the society's accounts by way of the equity method of valuation or if—

(a) if it is incorporated outside the United Kingdom, the country in which it is incorporated;

(b) if it is incorporated in the United Kingdom, whether it is registered in England and Wales, Scotland or in Northern Ireland.

    (4) It must be stated whether the subsidiary undertaking is included in the consolidation and, if it is not, the reason for excluding it from the consolidation must be given.

    (5) It must be stated with respect to each subsidiary undertaking of the society by virtue of which of the conditions specified in section 258 of the Companies Act 1985 (as applied by section 78A of this Act) it is a subsidiary undertaking of the society.

    (6) Sub-paragraph (5) does not apply in relation to a subsidiary undertaking if—

(a) the relevant condition is that specified in subsection (2)(a) of section 258 of that Act, and

(b) the society that is its immediate parent undertaking (within the meaning of section 258 of the Companies Act 1985) holds the same proportion of the shares in the undertaking as it holds voting rights.

Holdings in subsidiary undertakings

     10. —(1) The following information must be given with respect to the shares of a subsidiary undertaking held—

(a) by the society, and

(b) by the group,

and the information required under paragraphs (a) and (b) must (if different) be shown separately.

    (2) There must be stated—

(a) the identity of each class of shares held, and

(b) the proportion of the nominal value of the shares of that class represented by those shares.

Financial information about subsidiary undertakings not included in the consolidation

     11. —(1) There must be shown with respect to each subsidiary undertaking not included in the consolidation—

(a) the aggregate amount of its capital and reserves as at the end of its relevant financial year, and

(b) its profit or loss for that year.

    (2) The information referred to in sub-paragraph (1) need not be given if the group's investment in the subsidiary undertaking is included in the accounts by way of the equity method of valuation or if—

(a) the subsidiary undertaking is not required by any provision of the Companies Act 1985 or the Companies (Northern Ireland) Order 1986 to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere, and

(b) the holding of the group is less than 50 per cent of the nominal value of the shares in the subsidiary undertaking.

    (3) Information otherwise required by this paragraph need not be given if it is not required in order for the society's group accounts to give a true and fair view.

    (4) For the purposes of this paragraph the "relevant financial year" of a subsidiary undertaking is—

(a) if its financial year ends with that of the society, that year; and

(b) if not, its financial year ending last before the end of the society's financial year.

Jointly controlled bodies

     12. —(1) The following information must be given where a body corporate included in the consolidation has an interest in a jointly controlled body.

    (2) The name of the jointly controlled body must be stated.

    (3) There must be stated—

(a) if the body corporate is incorporated outside the United Kingdom, the country in which it is incorporated; and

(b) if it is incorporated in the United Kingdom, whether it is registered in England and Wales, Scotland or in Northern Ireland.

    (4) The following information must be given with respect to the shares of the jointly controlled body held—

(a) by the society; and

(b) by the group,

and the information required under paragraphs (a) and (b) must (if different) be given separately.

    (5) There must be stated—

(a) the identity of each class of shares in the jointly controlled body held; and

(b) the proportion of the nominal value of the shares of that class represented by those shares.

Other significant holdings of society or group

     13. —(1) The information required by paragraphs 14 and 15 must be given where at the end of the financial year the society has a significant holding in a body corporate which is not one of its subsidiary undertakings and does not fall within paragraph 12 (jointly controlled bodies).

    (2) A holding is significant for this purpose if—

(a) it amounts to 20 per cent or more of the nominal value of the shares in the undertaking; or

(b) the amount of the holding (as stated or included in the society's individual accounts) exceeds one-tenth of the amount of the society's assets (as so stated).

     14. —(1) The name of the body corporate must be stated.

    (2) There must be stated—

(a) if the body corporate is incorporated outside the United Kingdom, the country in which it is incorporated; and

(b) if it is incorporated in the United Kingdom, whether it is registered in England and Wales, Scotland or in Northern Ireland.

    (3) There must also be stated—

(a) the identity of each class of shares in the body corporate held by the society; and

(b) the proportion of the nominal value of the shares of that class represented by those shares.

    (4) The information otherwise required by this paragraph need not be given if it is not material—

(a) for the purposes of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 69(F)(2);

(b) in the case of IAS accounts, to the requirement under international accounting standards that such accounts achieve a fair presentation.

     15. —(1) There must be stated—

(a) the aggregate amount of the capital and reserves of the body corporate as at the end of its relevant financial year; and

(b) its profits or loss for that year.

    (2) That information need not be given in respect of a body corporate if—

(a) the body corporate is not required by any provision of the Companies Act 1985 or the Companies (Northern Ireland) Order 1986 to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere; and

(b) the society's holding is less than 50 per cent of the nominal value of the shares in the undertaking.

    (3) Information otherwise required by this paragraph need not be given if it is not material—

(a) for the purposes of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 69(F)(2);

(b) in the case of IAS accounts, to the requirement under international accounting standards that such accounts achieve a fair presentation.

    (4) For the purposes of this paragraph the "relevant financial year" of an undertaking is—

(a) if its financial year ends with that of the society, that year; and

(b) if not, its financial year ending last before the end of the society's financial year.

     16. —(1) The information required by paragraphs 17 and 18 must be given where at the end of the financial year the group has a significant holding in a body corporate which is not a subsidiary undertaking of the society and does not fall within paragraph 12 (jointly controlled bodies).

    (2) A holding is significant for this purpose if—

(a) it amounts to 20 per cent or more of the nominal value of the shares in the body corporate; or

(b) the amount of the holding (as stated or included in the group accounts) exceeds one-tenth of the amount of the group's assets (as so stated).

     17. —(1) The name of the body corporate must be stated.

    (2) There must be stated—

(a) if the body corporate is incorporated outside the United Kingdom, the country in which it is incorporated; and

(b) if it is incorporated in the United Kingdom, whether it is registered in England and Wales, Scotland or in Northern Ireland.

    (3) There must also be stated—

(a) the identity of each class of shares in the body corporate held by the group; and

(b) the proportion of the nominal value of the shares of that class represented by those shares.

    (4) Information otherwise required by this paragraph need not be given if it is not required in order for the society's group accounts to give a true and fair view.

     18. —(1) There must be stated—

(a) the aggregate amount of the capital and reserves of the body corporate as at the end of its relevant financial year; and

(b) its profit or loss for that year.

    (2) That information need not be given if—

(a) the body corporate is not required by any provision of the Companies Act 1985 or the Companies (Northern Ireland) Order 1986 to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere; and

(b) the holding of the group is less than 50 per cent of the nominal value of the shares in the undertaking.

    (3) Information otherwise required by this paragraph need not be given if it is not material—

(a) for the purposes of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 69(F)(2);

(b) in the case of IAS accounts, to the requirement under international accounting standards that such accounts achieve a fair presentation.

    (4) For the purposes of this paragraph the "relevant financial year" of an undertaking is—

(a) if its financial year ends with that of the society, that year; and

(b) if not, its financial year ending last before the end of the society's financial year.

Construction of references to shares held by society or group

     19. —(1) References in this Part of this Schedule to shares held by the society or the group shall be construed as follows.

    (2) For the purposes of paragraphs 10, 12(4) and (5) and 13 to 15—

(a) shares held on behalf of a society by any person are treated as if they were held by the society; but

(b) shares held on behalf of a person other than the society are not treated as if they were held by the society.

    (3) References to shares held by the group are to any shares held by or on behalf of the society or any of its subsidiary undertakings; but shares held on behalf of a person other than the society or any of its subsidiary undertakings are not treated as if they were held by the group.

    (4) Shares held by way of security are treated as if they were held by the person providing the security—

(a) where apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights attached to the shares are exercisable only in accordance with his instructions; or

(b) where the shares are held in connection with the granting of loans as part of normal business activities and apart from the right to exercise them for the purpose of preserving the value of security, or of realising it, the rights attached to the shares are exercisable only in his interests.

Interpretation: general

     20. In this Schedule "group" means a friendly society and its subsidiary undertakings.".