LR 9.8 Annual 1financial report1

In addition to the requirements set out in DTR 4.1 a listed company1 must include in its annual financial report1, where applicable, the following:

1. (1)

   a statement of the amount of interest capitalised by the group during the period under review with an indication of the amount and treatment of any related tax relief;

2. (2)

   any information required by LR 9.2.18 R (Publication of unaudited financial information);

3. (3)

   details of any small related party transaction as required by LR 11.1.10R (2)(c);

4. (4)

   details of any long-term incentive schemes as required by LR 9.4.3 R;

5. (5)

   details of any arrangements under which a director of the company has waived or agreed to waive any emoluments from the company or any subsidiary undertaking;

6. (6)

   where a director has agreed to waive future emoluments, details of such waiver together with those relating to emoluments which were waived during the period under review;

7. (7)

   in the case of any allotment for cash of equity securities made during the period under review otherwise than to the holders of the company's equity shares in proportion to their holdings of such equity shares and which has not been specifically authorised by the company's shareholders:

   1. (a)

      the classes of shares allotted and for each class of shares, the number allotted, their aggregate nominal value and the consideration received by the company for the allotment;3

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   2. (b)

      the names of the allottees, if less than six in number, and in the case of six or more allottees a brief generic description of each new class of equity holder (e.g. holder of loan stock);

   3. (c)

      the market price of the allotted securities on the date on which the terms of the issue were fixed; and

   4. (d)

      the date on which the terms of the issue were fixed;

8. (8)

   the information required by paragraph (7) must be given for any unlisted major subsidiary undertaking of the company;

9. (9)

   where a listed company has listed shares in issue and is a subsidiary undertaking of another company, details of the participation by the parent undertaking in any placing made during the period under review;

10. (10)

    details of any contract of significance subsisting during the period under review:

    1. (a)

       to which the listed company, or one of its subsidiary undertakings, is a party and in which a director of the listed company is or was materially interested; and

    2. (b)

       between the listed company, or one of its subsidiary undertakings, and a controlling shareholder;

11. (11)

    details of any contract for the provision of services to the listed company or any of its subsidiary undertakings by a controlling shareholder, subsisting during the period under review, unless:

    1. (a)

       it is a contract for the provision of services which it is the principal business of the shareholder to provide; and

    2. (b)

       it is not a contract of significance;

12. (12)

    details of any arrangement under which a shareholder has waived or agreed to waive any dividends; and

13. (13)

    where a shareholder has agreed to waive future dividends, details of such waiver together with those relating to dividends which are payable during the period under review.

In the case of a listed company incorporated in the United Kingdom, the following additional items must be included in its annual financial report1:

1. (1)

   a statement setting out all the interests (in respect of which transactions are notifiable to the company under DTR 3.1.2 R) 4of each person who is4 a3 director of the listed company as at the end of4 the period under review including:

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   1. (a)

      all changes in the interests of each director that have occurred between the end of the period under review and a date not more than 3one month prior to the date of the notice of the annual general meeting; or

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   2. (b)

      if there have been no changes in the period described in paragraph (a), a statement that there have been no changes in the interests of each director.4

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   Interests of each director includes the interests of connected persons of which the listed company is, or ought upon reasonable enquiry to become, aware.43

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2. (2)

   a statement showing, as at a date not more than one month prior to the date of the notice of the annual general meeting:

   1. (a)

      all information disclosed to the listed company in accordance with DTR 52; or

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   2. (b)

      that there have been no disclosures, if no disclosures have been made.

3. (3)

   a statement made by the directors that the business is a going concern, together with supporting assumptions or qualifications as necessary, that has been prepared in accordance with Going Concern and Financial Reporting: Guidance for Directors of listed companies registered in the United Kingdom, published in November 1994;

4. (4)

   a statement setting out:

   1. (a)

      details of any shareholders' authority for the purchase, by the listed company, of its own shares that is still valid at the end of the period under review;

   2. (b)

      in the case of purchases made otherwise than through the market or by tender to all shareholders, the names of sellers of such shares purchased, or proposed to be purchased, by the listed company during the period under review;

   3. (c)

      in the case of any purchases made otherwise than through the market or by tender or partial offer to all shareholders, or options or contracts to make such purchases, entered into since the end of the period covered by the report, information equivalent to that required under Part IIof Schedule 7 to the Companies Act 1985 (Disclosure required by company acquiring its own shares, etc); and

   4. (d)

      in the case of sales of treasury shares for cash made otherwise than through the market, or in connection with an employees' share scheme, or otherwise than pursuant to an opportunity which (so far as was practicable) was made available to all holders of the listed company's securities (or to all holders of a relevant class of its securities) on the same terms, particulars of the names of purchasers of such shares sold, or proposed to be sold, by the company during the period under review;

5. (5)

   a statement of how the listed company has applied the principles set out in Section 1 of the Combined Code, in a manner that would enable shareholders to evaluate how the principles have been applied.

6. (6)

   a statement as to whether the listed company has:

   1. (a)

      complied throughout the accounting period with all relevant provisions set out in Section 1 of the Combined Code; or

   2. (b)

      not complied throughout the accounting period with all relevant provisions set out in Section 1 of the Combined Code and if so, setting out:

      1. (i)

         those provisions, if any it has not complied with;

      2. (ii)

         in the case of provisions whose requirements are of a continuing nature, the period within which, if any, it did not comply with some or all of those provisions; and

      3. (iii)

         the company's reasons for non-compliance; and

7. (7)

   a report to the shareholders by the Board which contains all the mattersset out in LR 9.8.8 R.

An overseas company with a primary listing must disclose in its annual report and accounts:

1. (1)

   whether or not it complies with the corporate governance regime of its country of incorporation;

2. (2)

   the significant ways in which its actual corporate governance practices differ from those set out in the Combined Code; and

3. (3)

   the unexpired term of the service contract of any director proposed for election or re-election at the forthcoming annual general meeting and, if any director for election or re-election does not have a service contract, a statement to that effect.

The report to the shareholders by the Board required by LR 9.8.6R (7) must contain the following:

1. (1)

   a statement of the listed company's policy on executive directors' remuneration;

2. (2)

   information presented in tabular form, unless inappropriate, together with explanatory notes as necessary on:

   1. (a)

      the amount of each element in the remuneration package for the period under review of each director, by name, including but not restricted to, basic salary and fees, the estimated money value of benefits in kind, annual bonuses, deferred bonuses, compensation for loss of office and payments for breach of contractor other termination payments;

   2. (b)

      the total remuneration for each director for the period under review and for the corresponding prior period;

   3. (c)

      any significant payments made to former directors during the period under review; and

   4. (d)

      any share options, including Save-as-you-earn options, for each director, by name, in accordance with the requirements of the Directors' Remuneration Report Regulations;

3. (3)

   details of any long-term incentive schemes, other than share options as required by paragraph (2)(d), including the interests of each director, by name, in the long-term incentive schemes at the start of the period under review;

4. (4)

   details of any entitlements or awards granted and commitments made to each director under any long-term incentive schemes during the period, showing which crystallize either in the same year or in subsequent years;

5. (5)

   details of the monetary value and number of shares, cash payments or other benefits received by each director under any long-term incentive schemes during the period;

6. (6)

   details of the interests of each director in the long-term incentive schemes at the end of the period;

7. (7)

   an explanation and justification of any element of a director's remuneration, other than basic salary, which is pensionable;

8. (8)

   details of any directors' service contract with a notice period in excess of one year or with provisions for pre-determined compensation on termination which exceeds one years salary and benefits in kind, giving the reasons for such notice period;

9. (9)

   details of the unexpired term of any directors' service contract of a director proposed for election or re-election at the forthcoming annual general meeting, and, if any director proposed for election or re-election does not have a directors' service contract, a statement to that effect;

10. (10)

    a statement of the listed company's policy on the granting of options or awards under its employees' share schemes and other long-term incentive schemes, explaining and justifying any departure from that policy in the period under review and any change in the policy from the preceding year;

11. (11)

    for money purchase schemes3 details of the contribution or allowance payable or made by the listed company in respect of each director during the period under review; and

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12. (12)

    for defined benefit schemes3:

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    1. (a)

       details of the amount of the increase during the period under review (excluding inflation) and of the accumulated total amount at the end of the period in respect of the accrued benefit to which each director would be entitled on leaving service or is entitled having left service during the period under review;

    2. (b)

       either:

       1. (i)

          the transfer value (less director's contributions) of the relevant increase in accrued benefit (to be calculated in accordance with Actuarial Guidance Note GN11 but making no deduction for any under-funding) as at the end of the period; or

       2. (ii)

          so much of the following information as is necessary to make a reasonable assessment of the transfer value in respect of each director:

          1. (A)

             age;

          2. (B)

             normal retirement age;

          3. (C)

             the amount of any contributions paid or payable by the director under the terms of the scheme during the period under review;

          4. (D)

             details of spouses and dependants benefits;

          5. (E)

             early retirement rights and options;

          6. (F)

             expectations of pension increases after retirement (whether guaranteed or discretionary); and

          7. (G)

             discretionary benefits for which allowance is made in transfer values on leaving and any other relevant information which will significantly affect the value of the benefits; and

    3. (c)

       no disclosure of voluntary contributions and benefits.

A listed company must ensure that the auditors review each of the following before the annual report is published:

1. (1)

   LR 9.8.6R (3) (statement by the directors that the business is a going concern); and

2. (2)

   the parts of the statement required by LR 9.8.6R (6) (corporate governance) that relate to the following provisions of the Combined Code:

   1. (a)

      C1.1;

   2. (b)

      C.2.1; and

   3. (c)

      C3.1 to C3.7.

A listed company must ensure that the auditors review the following disclosures:

1. (1)

   LR 9.8.8R (2) (amount of each element in the remuneration package and information on share options);

2. (2)

   LR 9.8.8R (3), LR 9.8.8R (4) and (5) (details of long term incentive schemes for directors);

3. (3)

   LR 9.8.8R (11) (money purchase schemes); and

4. (4)

   LR 9.8.8R (12) (defined benefit schemes).

If, in the opinion of the auditors the listed company has not complied with any of the requirements set out in LR 9.8.11 R the listed company must ensure that the auditors report includes, to the extent possible, a statement giving details of the non-compliance.

Any summary financial statement issued by a listed company as permitted under the Companies Act 19854, must disclose:

1. (1)

   earnings per share; and

2. (2)

   the information required for summary financial statements set out in the Companies Act 19854.

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