1983L0349 — EN — 01.05.2004 — 004.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B SEVENTHCOUNCILDIRECTIVE
of13June1983
basedontheArticle 54(3)(g)oftheTreatyonconsolidatedaccounts
(83/349/EEC)
(OJ L 193, 18.7.1983, p. 1)
Amended by:
Official Journal
No page date
►M1Eleventh Council Directive of 21 December 1989 (89/666/EEC) L 395 36 30.12.1989
►M2Council Directive of 8 November 1990 (90/604/EEC) L 317 57 16.11.1990
►M3Council Directive of 8 November 1990 (90/605/EEC) L 317 60 16.11.1990
►M4Directive 2001/65/EC of the European Parliament and of the Council of
27 September 2001L 283 28 27.10.2001
►M5Directive 2003/51/EC of the European Parliament and of the Council of
18 June 2003L 178 16 17.7.2003
Amended by:
►A1Act of Accession of Spain and Portugal L 302 23 15.11.1985
►A2Act of Accession of Austria, Sweden and Finland C 241 21 29.8.1994
(adapted by Council Decision 95/1/EC, Euratom, ECSC) L 1 1 1.1.1995
►A3Act concerning the conditions of accession of the Czech Republic, the
Republic of Estonia, the Republic of Cyprus, the Republic of Latvia,the Republic of Lithuania, the Republic of Hungary, the Republic of
Malta, the Republic of Poland, the Republic of Slovenia and the Slovak
Republic and the adjustments to the Treaties on which the EuropeanUnion isfoundedL 236 33 23.9.2003
Corrected by:
►C1Corrigendum, OJ L 211, 3.8.1983, p. 31 (83/349/EEC)
NB: This consolidated version contains references to the European unit of account and/or the ecu, which from 1 January 1999
should be understood as references to the euro — Council Regulation (EEC) No 3308/80 (OJ L 345, 20.12.1980, p. 1) andCouncil Regulation (EC) No 1103/97 (OJ L 162, 19.6.1997, p. 1).
▼B
SEVENTHCOUNCILDIRECTIVE
of13June1983
based on the Article 54 (3) (g) of the Treaty on consolidated
accounts
(83/349/EEC)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic
Community, and in particular Article 54 (3) (g) thereof,
Having regard to the proposal from the Commission (1),
Having regard to the opinion of the European Parliament (2),
Having regard to the opinion of the Economic and Social
Committee (3),
Whereason 25 July 1978 the Council adopted Directive 78/660/
EEC (4) on the coordination of national legislation governing the annual
accountsof certain typesof companies ; whereasmany companiesare
members of bodies of undertakings; whereas consolidated accounts
must be drawn up so that financial information concerning such bodiesof undertakingsmay be conveyed to membersand third parties ;whereas national legislation governing consolidated accounts musttherefore be coordinated in order to achieve the objectivesof compar-ability and equivalence in the information which companiesmus t
publish within the Community;
►
C1Whereas, in the determination of the conditions for consolida-
tion, account must be taken not only of cases in ◄which the power
of control is based on a majority of voting rights but also of those in
which it is based on agreements, where these are permitted; whereas,
furthermore, Member States in which the possibility occurs must bepermitted to cover cases in which in certain circumstances control hasbeen effectively exercised on the basis of a minority holding; whereasthe Member States must be permitted to cover the case of bodies ofundertakingsin which the undertakingsexis t on an equal footing with
each other;
Whereas the aim of coordinating the legislation governing consolidated
accounts is to protect the interests subsisting in companies with sharecapital; whereass uch protection impliesthe principle of the preparationof consolidated accounts where such a company is a member of a body
of undertakings, and that such accounts must be drawn up at least
where such a company is a parent undertaking; whereas, furthermore,the cause of full information also requires that a subsidiary undertakingwhich is itself a parent undertaking draw up consolidated accounts;whereas, nevertheless, such a parent undertaking may, and, in certain
circumstances, must be exempted from the obligation to draw up such
consolidated accounts provided that its members and third parties aresufficiently protected;
Whereas, for bodies of undertakings not exceeding a certain size,
exemption from the obligation to prepare consolidated accounts may
be justified; whereas, accordingly, maximum limits must be set for
such exemptions; whereas it follows therefrom that the Member Statesmay either provide that it iss ufficient to exceed the limit of one onlyof the three criteria for the exemption not to apply or adopt limitslower than those prescribed in the Directive;
Whereas consolidated accounts must give a true and fair view of the
assets and liabilities, the financial position and the profit and loss ofall the undertakings consolidated taken as a whole; whereas, therefore1983L0349 — EN — 01.05.2004 — 004.001 — 2
(1) OJ No C 121, 2. 6. 1976, p. 2.
(2) OJ No C 163, 10. 7. 1978, p. 60.
(3) OJ No C 75, 26. 3. 1977, p. 5.
(4) OJ No L 222, 14. 8. 1978, p. 11.
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consolidation should in principle include all of those undertakings;
whereas such consolidation requires the full incorporation of the assetsand liabilitiesand of the income and expenditure of thos e undertakings
and the separate disclosure of the interests of persons outwith such
bodies; whereas, however, the necessary corrections must be made toeliminate the effectsof the financial relationsbetween the undertakingsconsolidated;
Whereasa number of principlesrelating to the preparation of cons oli-
dated accountsand valuation in the context of s uch accountsmus t belaid down in order to ensure that items are disclosed consistently, andmay readily be compared not only asregardsthe methodsus ed in their
valuation but also as regards the periods covered by the accounts;
Whereasparticipating interes tsin he capital of undertakingsover which
undertakings included in a consolidation exercise significant influence
must be included in consolidated accounts by means of the equitymethod;
Whereas the notes on consolidated accounts must give details of the
undertakingsto be cons olidated;
Whereascertain derogationsoriginally provided for on a trans itional
basis in Directive 78/660/EEC may be continued subject to review at
a later date,
HAS ADOPTED THIS DIRECTIVE:
SECTION 1
Conditionsforthepreparationofconsolidatedaccounts
Article 1
1. A Member State shall require any undertaking governed by its
national law to draw up consolidated accounts and a consolidated
annual report if that undertaking (a parent undertaking):
(a) has a majority of the shareholders' or members' voting rights in
another undertaking (a subsidiary undertaking); or
(b) hasthe right to appoint or remove a majority of the membersof the
administrative, management or supervisory body of another under-taking (a subsidiary undertaking) and is at the same time ashareholder in or member of that undertaking; or
(c) hasthe right to exercis e a dominant influence over an undertaking
(a subsidiary undertaking) of which it is a shareholder or member,
pursuant to a contract entered into with that undertaking or to a
provision in its memorandum or articles of association, where thelaw governing that subsidiary undertaking permits its being subjectto such contracts or provisions. A Member State need not prescribethat a parent undertaking must be a shareholder in or member of itssubsidiary undertaking. Those Member States the laws of which do
not provide for each contracts or clauses shall not be required to
apply thisprovis ion; or
(d) isa s hareholder in or member of an undertaking, and:
(aa) a majority of the membersof the adminis trative, management
or supervisory bodies of that undertaking (a subsidiary under-taking) who have held office during the financial year, duringthe preceding financial year and up to the time when theconsolidated accounts are drawn up, have been appointedsolely as a result of the exercise of its voting rights; or
(bb) controls alone, pursuant to an agreement with other share-
holders in or members of that undertaking (a subsidiaryundertaking), a majority of shareholders' or members' votingrightsin that undertaking. The Member Statesmay introducemore detailed provisions concerning the form and contents ofsuch agreements.1983L0349 — EN — 01.05.2004 — 004.001 — 3
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The Member States shall prescribe at least the arrangements
referred to in (bb) above.
They may make the application of (aa) above dependent upon the
holding's representing 20 % or more of the shareholders' ormembers' voting rights.
However, (aa) above shall not apply where another undertaking has
the rightsreferred to in s ubparagraphs(a), (b) or (c) above withregard to that subsidiary undertaking.
2. Apart from the cases mentioned in paragraph 1 the Member
Statesmay require any undertaking governed by their national law to
draw up consolidated accounts and a consolidated annual report if:
(a) that undertaking (a parent undertaking) hasthe power to exercis e,
or actually exercises, dominant influence or control over anotherundertaking (the subsidiary undertaking); or
(b) that undertaking (a parent undertaking) and another undertaking
(the subsidiary undertaking) are managed on a unified basis by the
parent undertaking.
Article 2
1. For the purposes of Article 1 (1) (a), (b) and (d), the voting rights
and the rights of appointment and removal of any other subsidiaryundertaking aswell asthos e of any pers on acting in hisown namebut on behalf of the parent undertaking or of another subsidiary under-
taking must be added to those of the parent undertaking.
2. For the purposes of Article 1 (1) (a), (b) and (d), the rights
mentioned in paragraph 1 above must be reduced by the rights:
(a) attaching to shares held on behalf of a person who is neither the
parent undertaking nor a subsidiary thereof; or
(b) attaching to shares held by way of security, provided that the rights
in question are exercised in accordance with the instructionsreceived, or held in connection with the granting of loansaspartof normal business activities, provided that the voting rights areexercised in the interests of the person providing the security.
3. For the purposes of Article 1 (1) (a) and (d), the total of the
shareholders' or members' voting rights in the subsidiary undertaking
must be reduced by the voting rights attaching to the shares held by
that undertaking itself by a subsidiary undertaking of that undertakingor by a person acting in his own name but on behalf of those undertak-ings.
Article 3
1. Without prejudice to ►
M5Articles13 and 15 ◄, a parent
undertaking and all of its subsidiary undertakings shall be undertakingsto be consolidated regardless of where the registered offices of such
subsidiary undertakings are situated.
2. For the purposes of paragraph 1 above any subsidiary undertaking
of a subsidiary undertaking shall be considered a subsidiary under-taking of the parent undertaking which isthe parent of theundertaking to be consolidated.
Article 4
1. For the purposes of this Directive, a parent undertaking and all of
its subsidiary undertakings shall be undertakings to be consolidated
where either the parent undertaking or one or more subsidiary under-
takings is established as one of the following types of company:
(a)in Germany:
die Aktiengesellschaft, die Kommanditgesellschaft auf Aktien, die
Gesellschaft mit beschränkter Haftung;1983L0349 — EN — 01.05.2004 — 004.001 — 4
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(b)in Belgium:
la société anonyme / de naamloze vennootschap — la société en
commandite par actions/ de commanditaire vennoots chap opaandelen — la société de personnes à responsabilité limitée / de
personenvennootschap met beperkte aansprakelijkheid;
(c)in Denmark:
aktieselskaber, kommanditaktieselskaber, anpartsselskaber;
(d)in France:
la société anonyme, la société en commandite par actions, la
société à responsabilité limitée;
(e)in Greece:
η ανώνυµη εταιρία, η εταιρία περιορισµένης ευθύνης, η
ετερόρρυθµη κατά µετοχές εταιρία;
(f)in Ireland:
public companieslimited by s haresor by guarantee, private
companieslimited by s haresor by guarantee;
(g)in Italy:
la società per azioni, la società in accomandita per azioni, la
società a responsabilità limitata;
(h)in Luxembourg:
la société anonyme, la société en commandite par actions, la
société à responsabilité limitée;
(i)in the Netherlands:
de naamloze vennootschap, de besloten vennootschap met beperkte
aansprakelijkheid;
(j)in the UnitedKingd om:
public companieslimited by s haresor by guarantee, private
companieslimited by s haresor by guarantee;
k)in Spain:
la sociedad anónima, la sociedad comanditaria por acciones, la
sociedad de responsabilidad limitada;
l)in Portugal:
a sociedade anónima de responsabilidade limitada, a sociedade em
comandita por acções, a sociedade por quotas de responsabilidade
limitada;
m)in Austria:
die Aktiengesellschaft, die Gesellschaft mit beschränkter Haftung;
n)in Finland:
osakeyhtiö / aktiebolag;
o)in Sweden:
aktiebolag;
(p)in the Czech Republic:
společnost s ru čením omezeným, akciová spole čnost;
(q)in Estonia:
aktsiaselts, osaühing;
(r)in Cyprus:
∆ηµόσιες εταιρείες περιορισµένης ευθύνης µε µετοχές ή µε
εγγύηση, ιδιωτικές εταιρείες περιορισµένης ευθύνης µεµετοχές ή µε εγγύηση ;
(s)in Latvia:
akciju sabiedr ība, sabiedr ība ar ierobežotu atbild ību;1983L0349 — EN — 01.05.2004 — 004.001 — 5
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(t)in Lithuania:
akcin ėsbendrov ės, uždarosios akcin ėsbendrov ės;
(u)in Hungary:
részvénytársaság, korlátolt felel ősségűtársaság;
(v)in Malta:
kumpanija pubblika — public limited liability company, kumpan-
nija privata — private limited liability company,
soċjeta in akkomandita bil-kapital maqsum f'azzjonijiet — partner-
shipen commandite with the capital divided into shares;
(w)in Poland:
spółka akcyjna, spółka z ograniczon ąodpowiedzialno ścią, spółka
komandytowo-akcyjna;
(x)in Slovenia:
delniška družba, družba z omejeno odgovornostjo, komanditna
delniška družba;
(y)in Slovakia:
akciová spolo čnosť, spolo čnosťsručením obmedzeným.
The first subparagraph shall also apply where either the parent under-
taking or one or more subsidiary undertakings is constituted as one of
the typesof company mentioned in Article 1 (1), s econd or thirdsubparagraph of Directive 78/660/EEC.
2. The Member Statesmay, however, grant exemption from the
obligation imposed in Article 1 (1) where the parent undertaking isnot constituted as one of the types of company mentioned in Article 4(1) of this Directive or in Article 1 (1), second or third subparagraph ofDirective 78/660/EEC.
Article 5
1. A Member State may grant exemption from the obligation
imposed in Article 1 (1) where the parent undertaking is a financialholding company asdefined in Article 5 (3) of Directive 78/660/EEC,and:
(a) it hasnot intervened during the financial year, directly or indir-
ectly, in the management of a subsidiary undertaking;
(b) it hasnot exercis ed the voting rightsattaching to itsparticipating
interest in respect of the appointment of a member of a subsidiaryundertaking's administrative, management or supervisory bodiesduring the financial year or the five preceding financial yearsor,where the exercise of voting rights was necessary for the operation
of the administrative, management or supervisory bodies of the
subsidiary undertaking, no shareholder in or member of the parentundertaking with majority voting rightsor member of the adminis -trative, management or supervisory bodies of that undertaking or ofa member thereof with majority voting rightsisa member of the
administrative, management or supervisory bodies of the subsidiary
undertaking and the members of those bodies so appointed havefulfilled their functionswithout any interference or influence onthe part of the parent undertaking or of any of its subsidiary under-takings;
(c) it hasmade loansonly to undertakingsin which it holdspartici-
pating interests. Where such loans have been made to other
parties, they must have been repaid by the end of the previous
financial year; and
(d) the exemption isgranted by an adminis trative authority after fulfil-
ment of the above conditionshasbeen checked.
2. (a) Where a financial holding company hasbeen exempted, Article
43 (2) of Directive 78/660/EEC shall not apply to its annual1983L0349 — EN — 01.05.2004 — 004.001 — 6
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accounts with respect to any majority holdings in subsidiary
undertakingsasfrom the date provided for in Article 49 (2).
(b) The disclosures in respect of such majority holdings provided
for in point 2 of Article 43 (1) of Directive 78/660/EEC maybe omitted when their nature iss uch that they would be
seriously prejudicial to the company, to its shareholders or
members or to one of its subsidiaries. A Member State maymake such omissions subject to prior administrative or judicialauthorization. Any such omission must be disclosed in the noteson the accounts.
Article 6
1. Without prejudice to Articles4 (2) and 5, a Member State may
provide for an exemption from the obligation imposed in Article 1 (1)if asat the balance s heet date of a parent undertaking the undertakingsto be consolidated do not together, on the basis of their latest annual
accounts, exceed the limits of two of the three criteria laid down in
Article 27 of Directive 78/660/EEC.
2. A Member State may require or permit that the set-off referred to
in Article 19 (1) an the elimination referred to in Article 26 (1) (a) and
(b) be not effected when the aforementioned limitsare calculated. In
that case, the limits for the balance sheet total and net turnover criteriashall be increased by 20 %.
3. Article 12 of Directive 78/660/EEC shall apply to the above
criteria.
4. ThisArticle s hall not apply where one of the undertakingsto be
consolidated is a company whose securities are admitted to trading on
a regulated market of any Member State within the meaning of Article1(13) of Council Directive 93/22/EEC of 10 May 1993 on investmentservices in the securities field (
1).
Article 7
1. Notwithstanding Articles 4 (2), 5 and 6, a Member State shall
exempt from the obligation imposed in Article 1 (1) any parent under-taking governed by its national law which is also a subsidiaryundertaking if itsown parent undertaking isgoverned by the law of aMember State in the following two cases:
(a) where that parent undertaking holdsall of the s haresin the
exempted undertaking. The shares in that undertaking held bymembers of its administrative, management or supervisory bodies.pursuant to an obligation in law or in the memorandum or articlesof association shall be ignored for this purpose; or
(b) where that parent undertaking holds90 % or more of the s haresin
the exempted undertaking and the remaining shareholders in or
membersof that undertaking have approved the exemption.
2. Exemption shall be conditional upon compliance with all of thefollowing conditions:
(a) the exempted undertaking and, without prejudice to ►
M5Articles
13 and 15 ◄, all of its subsidiary undertakings must be consoli-
dated in the accountsof a larger body of undertakings , the parentundertaking of which isgoverned by the law of a Member State;1983L0349 — EN — 01.05.2004 — 004.001 — 7
(1) OJ L 141, 11.6.1993, p. 27. Directive aslas t amended by Directive 2002/87/
EC of the European Parliament and of the Council (OJ L 35, 11.2.2003, p.
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(b) (aa) the consolidated accounts referred to in (a) above and the
consolidated annual report of the larger body of undertakingsmust be drawn up by the parent undertaking of that body and
audited, according to the law of the Member State by which
the parent undertaking of that larger body of undertakingsisgoverned, in accordance with thisDirective;
(bb) the consolidated accounts referred to in (a) above and the
consolidated annual report referred to in (aa) above, the reportby the person responsible for auditing those accounts and,where appropriate, the appendix referred to in Article 9 must
be published for the exempted undertaking in the manner
prescribed by the law of the Member State governing thatundertaking in accordance with Article 38. That Member Statemay require that those documents be published in its officiallanguage and that the translation be certified;
(c) the noteson the annual accountsof the exempted undertaking mus t
disclose:
(aa) the name and registered office of the parent undertaking that
drawsup the cons olidated accountsreferred to in (a) above;and
(bb) the exemption from the obligation to draw up consolidated
accountsand a cons olidated annual report.
3. This Article shall not apply to companies whose securities are
admitted to trading on a regulated market of any Member State withinthe meaning of Article 1(13) of Directive 93/22/EEC.
Article 8
1. In cases not covered by Article 7 (1), a Member State may,
without prejudice to Articles4 (2), 5 and 6, exempt from the obligationimposed in Article 1 (1) any parent undertaking governed by itsnational law which is also a subsidiary undertaking, the parent under-taking of which isgoverned by the law of a Member State, providedthat all the conditionss et out in Article 7 (2) are fulfilled and that the
shareholders in or members of the exempted undertaking who own a
minimum proportion of the subscribed capital of that undertakinghave not requested the preparation of consolidated accounts at leastsix months before the end of the financial year. The Member Statesmay fix that proportion at not more than 10 % for public limited liabi-
lity companies and for limited partnerships with share capital, and at
not more than 20 % for undertakingsof other types .
2. A Member State may not make it a condition for thisexemption
that the parent undertaking which prepared the consolidated accounts
described in Article 7 (2) (a) must also be governed by its national law.
3. A Member State may not make exemption subject to conditions
concerning the preparation and auditing of the consolidated accountsreferred to in Article 7 (2) (a).
Article 9
1. A Member State may make the exemptionsprovided for in Arti-
cles 7 and 8 dependent upon the disclosure of additional information,
in accordance with thisDirective, in the cons olidated accountsreferred
to in Article 7 (2) (a), or in an appendix thereto, if that information isrequired of undertakingsgoverned by the national law of that MemberState which are obliged to prepare consolidated accounts and are in thesame circumstances.
2. A Member State may also make exemption dependent upon the
disclosure, in the notes on the consolidated accounts referred to inArticle 7 (2) (a), or in the annual accountsof the exempted under-taking, of all or some of the following information regarding the body1983L0349 — EN — 01.05.2004 — 004.001 — 8
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of undertakings, the parent undertaking of which it is exempting from
the obligation to draw up consolidated accounts:
— the amount of the fixed assets,
— the net turnover,
— the profit or loss for the financial year and the amount of the capital
and reserves,
— the average number of persons employed during the financial year.
Article 10
Articles 7 to 9 shall not affect any Member State's legislation on the
drawing up of consolidated accounts or consolidated annual reports inso far as those documents are required:
— for the information of employees of their representatives, or
— by an administrative or judicial authority for its own purposes.
Article 11
1. Without prejudice to Articles4 (2), 5 and 6, a Member State may
exempt from the obligation imposed in Article 1 (1) any parent under-taking governed by its national law which is also a subsidiaryundertaking of a parent undertaking not governed by the law of aMember State, if all of the following conditionsare fulfilled:
(a) the exempted undertaking and, without prejudice to ►
M5Articles
13 and 15 ◄, all of its subsidiary undertakings must be consoli-
dated in the accountsof a larger body of undertakings ;
(b) the consolidated accounts referred to in (a) above and, where
appropriate, the consolidated annual report must be drawn up inaccordance with thisDirective or in a manner equivalent to cons o-
lidated accountsand cons olidated annual reportsdrawn up in
accordance with thisDirective;
(c) the consolidated accounts referred to in (a) above must have been
audited by one or more persons authorized to audit accounts underthe national law governing the undertaking which drew them up.
2. Articles7 (2) (b) (bb) and (c) an 8 to 10 s hall apply.3. A Member State may provide for exemptionsunder thisArticle
only if it providesfor the s ame exemptionsunder Articles7 to 10.
Article 12
1. Without prejudice to Articles1 to 10, a Member State may
require any undertaking governed by itsnational law to draw up cons o-lidated accountsand a cons olidated annual report if:
(a) that undertaking and one or more other undertakingswith which it
isnot connected, asdes cribed in Article 1 (1) or (2), are managed
on a unified basis pursuant to a contract concluded with that under-taking or provisions in the memorandum or articles of associationof those undertakings; or
(b) the administrative, management or supervisory bodies of that
undertaking and of one or more other undertakingswith which it
is not connected, as described in Article 1 (1) or (2), consist forthe major part of the same persons in office during the financialyear and until the consolidated accounts are drawn up.
2. Where paragraph 1 above isapplied, undertakingsrelated as
defined in that paragraph together with all of their subsidiary undertak-ings shall be undertakings to be consolidated, as defined in this
Directive, where one or more of those undertakings is established as
one of the typesof company lis ted in Article 4.
3. Articles3, 4 (2), 5, 6, 13 to 28, 29 (1), (3), (4) and (5), 30 to 38
and 39 (2) shall apply to the consolidated accounts and the consoli-dated annual report covered by thisArticle, referencesto parentundertakings being understood to refer to all the undertakings specifiedin paragraph 1 above. Without prejudice to Article 19 (2), however, the1983L0349 — EN — 01.05.2004 — 004.001 — 9
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items ‘capital’, ‘share premium account’, ‘revaluation reserve’,
‘reserves’, ‘profit or loss brought forward’, and ‘profit or loss for thefinancial year’ to be included in the consolidated accounts shall be the
aggregate amountsattributable to each of the undertakingss pecified in
paragraph 1.
Article 13
1. An undertaking need not be included in consolidated accounts
where it isnot material for the purpos esof Article 16 (3).
2. Where two or more undertakings satisfy the requirements of para-
graph 1 above, they must nevertheless be included in consolidated
accountsif, asa whole, they are material for the purpos esof Article
16 (3).
3. In addition, an undertaking need not be included in consolidated
accountswhere:
(a) severe long-term restrictions substantially hinder:
(aa) the parent undertaking in the exercise of its rights over the
assets or management of that undertaking; or
(bb) the exercise of unified management of that undertaking where
it isin one of the relations hipsdefined in Article 12 (1); or
(b) the information necessary for the preparation of consolidated
accountsin accordance with thisDirective cannot be obtained
without disproportionate expense or undue delay; or
(c) the shares of that undertaking are held exclusively with a view to
their subsequent resale.
Article 15
1. A Member State may, for the purposes of Article 16 (3), permit
the omission from consolidated accounts of any parent undertaking not
carrying on any industrial or commercial activity which holds shares ina subsidiary undertaking on the basis of a joint arrangement with oneor more undertakings not included in the consolidated accounts.
2. The annual accountsof the parent undertaking s hall be attached
to the consolidated accounts.
3. Where use is made of this derogation either Article 59 of Direc-
tive 78/660/EEC shall apply to the parent undertaking's annualaccountsor the information which would have res ulted from itsappli-cation must be given in the notes on those accounts.
SECTION 2
Thepreparationofconsolidatedaccounts
Article 16
1. Consolidated accounts shall comprise the consolidated balance
sheet, the consolidated profit-and-loss account and the notes on theaccounts. These documents shall constitute a composite whole.
Member States may permit or require the inclusion of other statements
in the consolidated accounts in addition to the documents referred to inthe first subparagraph.
2. Consolidated accounts shall be drawn up clearly and in accor-
dance with thisDirective.
3. Consolidated accounts shall give a true and fair view of the
assets, liabilities, financial position and profit or loss of the undertak-ingsincluded therein taken asa whole.1983L0349 — EN — 01.05.2004 — 004.001 — 10
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4. Where the application of the provisions of this Directive would
not be sufficient to give a true and fair view within the meaning ofparagraph 3 above, additional information must be given.
5. Where, in exceptional cases, the application of a provision of
Articles17 to 35 and 39 isincompatible with the obligation impos ed
in paragraph 3 above, that provision must be departed from in orderto give a true and fair view within the meaning of paragraph 3. Anysuch departure must be disclosed in the notes on the accounts togetherwith an explanation of the reasons for it and a statement of its effect onthe assets, liabilities, financial position and profit or loss. The Member
States may define the exceptional cases in question and lay down the
relevant special rules.
6. A Member State may require or permit the disclosure in the
consolidated accounts of other information as well as that which mustbe disclosed in accordance with this Directive.
Article 17
1. ►
M5Articles3 to 10a ◄, 13 to 26 and 28 to 30 of Directive
78/660/EEC shall apply in respect of the layout of consolidatedaccounts, without prejudice to the provisions of this Directive andtaking account of the essential adjustments resulting from the particularcharacteristics of consolidated accounts as compared with annual
accounts.
2. Where there are special circumstances which would entail undue
expense a Member State may permit stocks to be combined in the
consolidated accounts.
Article 18
The assets and liabilities of undertakings included in a consolidation
shall be incorporated in full in the consolidated balance sheet.
Article 19
1. The book valuesof s haresin the capital of undertakingsincluded
in a consolidation shall be set off against the proportion which they
represent of the capital and reserves of those undertakings:
(a) That set-off shall be effected on the basis of book values as at the
date as at which such undertakings are included in the consolida-
tions for the first time. Differences arising from such set-offs shallas far as possible be entered directly against those items in theconsolidated balance sheet which have values above or below theirbook values.
(b) A Member State may require or permit set-offs on the basis of the
values of identifiable assets and liabilities as at the date of acquisi-tion of the shares or, in the event of acquisition in two or morestages, as at the date on which the undertaking became asubsidiary.
(c) Any difference remaining after the application of (a) or resulting
from the application of (b) shall be shown as a separate item inthe consolidated balance sheet with an appropriate heading. Thatitem, the methods used and any significant changes in relation tothe preceding financial year must be explained in the notes on theaccounts. Where the offsetting of positive and negative differences
isauthorized by a Member State, a breakdown of s uch differences
must also be given in the notes on the accounts.
2. However, paragraph 1 above shall not apply to shares in the
capital of the parent undertaking held either by that undertaking itselfor by another undertaking included in the consolidation. In the consoli-dated accounts such shares shall be treated as own shares in accordancewith Directive 78/660/EEC.1983L0349 — EN — 01.05.2004 — 004.001 — 11
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Article 20
1. A Member State may require or permit the book valuesof s hares
held in the capital of an undertaking included in the consolidation to beset off against the corresponding percentage of capital only, providedthat:
(a) the shares held represent at least 90 % of the nominal value or, in
the absence of a nominal value, of the accounting par value of theshares of that undertaking other than shares of the kind described inArticle 29 (2) (a) of Directive 77/91 EEC (
1);
(b) the proportion referred to in (a) above hasbeen attained purs uant to
an arrangement providing for the issue of shares by an undertakingincluded in the consolidation; and
(c) the arrangement referred to in (b) above did not include a cash
payment exceeding 10 % of the nominal value or, in the absence
of nominal value, of the accounting par value of the shares issued.
2. Any difference arising under paragraph 1 above shall be added to
or deducted from consolidated reserves as appropriate.
3. The application of the method described in paragraph 1 above,
the resulting movement in reserves and the names and registeredoffices of the undertakings concerned shall be disclosed in the noteson the accounts.
Article 21
The amount attributable to shares in subsidiary undertakings included
in the consolidation held by persons other than the undertakingsincluded in the consolidation shall be shown in the consolidated
balance sheet as a separate item with an appropriate heading.
Article 22
The income and expenditure of undertakingsincluded in a cons olida-
tion shall be incorporated in full in the consolidated profit-and-loss
account.
Article 23
The amount of any profit or loss attributable to shares in subsidiary
undertakings included in the consolidation held by persons other than
the undertakings included in the consolidation shall be shown in theconsolidated profit-and-loss account as a separate item with an appro-priate heading.
Article 24
Consolidated accounts shall be drawn up in accordance with the princi-
plesenunciated in Articles25 to 28.
Article 25
1. The methods of consolidation must be applied consistently from
one financial year to another.
2. Derogations from the provisions of paragraph 1 above shall be
permitted in exceptional cases. Any such derogations must be disclosed
in the noteson the accountsand the reas onsfor them given togetherwith an assessment of their effect on the assets, liabilities, financialposition and profit or loss of the undertakings included in the consoli-dation taken asa whole.1983L0349 — EN — 01.05.2004 — 004.001 — 12
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Article 26
1. Consolidated accounts shall show the assets, liabilities, financial
positions and profits or losses of the undertakings included in a conso-
lidation asif the latter were a s ingle undertaking. In particular:
(a) debtsand claimsbetween the undertakingsincluded in a cons olida-
tion shall be eliminated from the consolidated accounts;
(b) income and expenditure relating to transactions between the under-
takings included in a consolidation shall be eliminated from the
consolidated accounts;
(c) where profits and losses resulting from transactions between the
undertakingsincluded in a cons olidation are included in the book
values of assets, they shall be eliminated from the consolidatedaccounts. Pending subsequent coordination, however, a MemberState may allow the eliminationsmentioned above to be effectedin proportion to the percentage of the capital held by the parentundertaking in each of the subsidiary undertakings included in the
consolidation.
2. A Member State may permit derogationsfrom the provis ionsof
paragraph 1 (c) above where a transaction has been concludedaccording to normal market conditionsand where the elimination ofthe profit or loss would entail undue expense. Any such derogationsmust be disclosed and where the effect on the assets, liabilities, finan-
cial position and profit or loss of the undertakings, included in the
consolidation, taken as a whole, is material, that fact must be disclosedin the notes on the consolidated accounts.
3. Derogationsfrom the provis ionsof paragraph 1 (a), (b) or (c)
above shall be permitted where the amounts concerned are not material
for the purposes of Article 16 (3).
Article 27
1. Consolidated accounts must be drawn up as at the same date as
the annual accountsof the parent undertaking.
2. A Member State may, however, require or permit consolidated
accountsto be drawn up asat another date in order to take account ofthe balance sheet dates of the largest number or the most important of
the undertakings included in the consolidation. Where use is made of
this derogation that fact shall be disclosed in the note on the consoli-dated accountstogether with the reas onstherefor. In addition, accountmust be taken or disclosure made of important events concerning theassets and liabilities, the financial position or the profit or loss of anundertaking included in a consolidation which have occurred between
that undertaking's balance sheet date and the consolidated balance sheet
date.
3. Where an undertaking's balance sheet date precedes the consoli-
dated balance sheet date by more than three months, that undertakingshall be consolidated on the basis of interim accounts drawn up as atthe consolidated balance sheet date.
Article 28
If the composition of the undertakings included in a consolidation has
changed significantly in the course of a financial year, the consolidatedaccounts must include information which makes the comparison ofsuccessive sets of consolidated accounts meaningful. Where such achange isa major one, a Member State may require or permit thisobli-gation to be fulfilled by the preparation of an adjusted opening balance
sheet and an adjusted profit-and-loss account.
Article 29
1. Assets and liabilities to be included in consolidated accounts shall
be valued according to uniform methodsand in accordance withSections7 and 7a and Article 60 of Directive 78/660/EEC.1983L0349 — EN — 01.05.2004 — 004.001 — 13
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2. (a) An undertaking which draws up consolidated accounts must
apply the same methods of valuation as in its annual accounts.However, a Member State may require or permit the use in
consolidated accounts of other methods of valuation in accor-
dance with the abovementioned Articlesof Directive 78/660/EEC.
(b) Where use is made of this derogation that fact shall be disclosed
in the notes on the consolidated accounts and the reasons
therefor given.
3. Where assets and liabilities to be included in consolidated
accountshave been valued by undertakingsincluded in the cons olida-tion by methods differing from those used for the consolidation, theymust be revalued in accordance with the methods used for the consoli-dation, unless the results of such revaluation are not material for the
purposes of Article 16 (3). Departures from this principle shall be
permitted in exceptional cases. Any such departures shall be disclosedin the notes on the consolidated accounts and the reasons for themgiven.
4. Account shall be taken in the consolidated balance sheet and in
the consolidated profit-and-loss account of any difference arising onconsolidation between the tax chargeable for the financial year and for
preceding financial yearsand the amount of tax paid or payable in
respect of those years, provided that it is probable that an actual chargeto tax will arise within the foreseeable future for one of the undertak-ingsincluded in the cons olidation.
5. Where assets to be included in consolidated accounts have been
the subject of exceptional value adjustments solely for tax purposes,they shall be incorporated in the consolidated accounts only after those
adjustments have been eliminated. A Member State may, however,
require or permit that such assets be incorporated in the consolidatedaccounts without the elimination of the adjustments, provided that theiramounts, together with the reasons for them, are disclosed in the noteson the consolidated accounts.
Article 30
1. A separate item as defined in Article 19 (1) (c) which corre-
sponds to a positive consolidation difference shall be dealt with inaccordance with the ruleslaid down in Directive 78/660/EEC for the
item ‘goodwill’.
2. A Member State may permit a positive consolidation difference to
be immediately and clearly deducted from reserves.
Article 31
An amount shown as a separate item, as defined in Article 19 (1) (c),
which corresponds to a negative consolidation difference may be trans-ferred to the consolidated profit-and-loss account only:
(a) where that difference corresponds to the expectation at the date of
acquisition of unfavourable future results in that undertaking, or tothe expectation of costs which that undertaking would incur, in sofar as such an expectation materializes; or
(b) in so far as such a difference corresponds to a realized gain.
Article 32
1. Where an undertaking included in a consolidation manages
another undertaking jointly with one or more undertakingsnot included
in that consolidation, a Member State may require or permit the inclu-sion of that other undertaking in the consolidated accounts inproportion to the rightsin itscapital held by the undertaking includedin the consolidation.
2. Articles13 to 31 s hall apply mutatis mutandis to the proportional
consolidation referred to in paragraph 1 above.1983L0349 — EN — 01.05.2004 — 004.001 — 14
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3. Where thisArticle isapplied, Article 33 s hall not apply if the
undertaking proportionally consolidated is an associated undertakingasdefined in Article 33.
Article 33
1. Where an undertaking included in a consolidation exercises a
significant influence over the operating and financial policy of anundertaking not included in the consolidation (an associated under-taking) in which it holdsa participating interes t, asdefined in Article17 of Directive 78/660/EEC, that participating interest shall be shown
in the consolidated balance sheet as a separate item with an appropriate
heading. An undertaking shall be presumed to exercise a significantinfluence over another undertaking where it has20 % or more of theshareholders' or members' voting rights in that undertaking. Article 2shall apply.
2. When thisArticle isapplied for the firs t time to a participating
interest covered by paragraph 1 above, that participating interest shallbe shown in the consolidated balance sheet either:
(a) at itsbook value calculated in accordance with the valuation rules
laid down in Directive 78/660/EEC. The difference between thatvalue and the amount corresponding to the proportion of capital
and reserves represented by that participating interest shall be
disclosed separately in the consolidated balance sheet or in thenotes on the accounts. That difference shall be calculated as at thedate as at which that method is used for the first time; or
(b) at an amount corresponding to the proportion of the associated
undertaking's capital and reserves represented by that participatinginterest. The difference between that amount and the book value
calculated in accordance with the valuation ruleslaid down in
Directive 78/660/EEC shall be disclosed separately in the consoli-dated balance sheet or in the notes on the accounts. That differences hall be calculated asat the date asat which that method isus edfor the first time.
(c) A Member State may prescribe the application of one or other of
(a) and (b) above. The consolidated balance sheet or the notes on
the accounts must indicate whether (a) or (b) has been used.
(d) In addition, for the purposes of (a) and (b) above, a Member State
may require or permit the calculation of the difference asat thedate of acquisition of the shares or, where they were acquired intwo or more stages, as at the date on which the undertaking became
an associated undertaking.
3. Where an associated undertaking's assets or liabilities have been
valued by methods other than those used for consolidation in accor-
dance with Article 29 (2), they may, for the purpose of calculating the
difference referred to in paragraph 2 (a) or (b) above, be revalued bythe methods used for consolidation. Where such revaluation has notbeen carried out that fact must be disclosed in the notes on theaccounts. A Member State may require such revaluation.
4. The book value referred to in paragraph 2 (a) above, or the
amount corresponding to the proportion of the associated undertaking'scapital and reserves referred to in paragraph 2 (b) above, shall be
increased or reduced by the amount of any variation which has taken
place during the financial year in the proportion of the associatedundertaking's capital and reserves represented by that participatinginterest; it shall be reduced by the amount of the dividends relating tothat participating interest.
5. In so far as the positive difference referred to in paragraph 2 (a)
or (b) above cannot be related to any category of assets or liabilities itshall be dealt with in accordance with Articles 30 and 39 (3).
6. The proportion of the profit or loss of the associated undertakings
attributable to such participating interests shall be shown in the conso-lidated profit-and-loss account as a separate item under an appropriateheading.1983L0349 — EN — 01.05.2004 — 004.001 — 15
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7. The eliminationsreferred to in Article 26 (1) (c) s hall be effected
in so far as the facts are known or can be ascertained. Article 26 (2)and (3) shall apply.
8. Where an associated undertaking draws up consolidated accounts,
the foregoing provisions shall apply to the capital and reserves shown
in such consolidated accounts.
9. ThisArticle need not be applied where the participating interes t
in the capital of the associated undertaking is not material for thepurposes of Article 16 (3).
Article 34
In addition to the information required under other provisions of this
Directive, the notes on the accounts must set out information in respectof the following mattersat leas t:
1. The valuation methodsapplied to the variousitemsin the cons oli-
dated accounts, and the methods employed in calculating the value
adjustments. For items included in the consolidated accounts whichare or were originally expressed in foreign currency the bases ofconversion used to express them in the currency in which theconsolidated accounts are drawn up must be disclosed.
2. (a) The namesand regis tered officesof the undertakingsincluded
in the consolidation; the proportion of the capital held inundertakingsincluded in the cons olidation, other than theparent undertaking, by the undertakingsincluded in the cons o-lidation or by persons acting in their own names but on behalf
of those undertakings; which of the conditions referred to in
Articles1 and 12 (1) following application of Article 2 hasformed the basis on which the consolidation has been carriedout. The latter disclosure may, however, be omitted whereconsolidation has been carried out on the basis of Article 1(1) (a) and where the proportion of the capital and the propor-
tion of the voting rightsheld are the s ame.
(b) The same information must be given in respect of undertakings
excluded from a consolidation pursuant to ►
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and◄an explanation must be given for the exclusion of the
undertakingsreferred to in Article 13.
3 (a) The names and registered offices of undertakings associated
with an undertaking included in the consolidation as describedin Article 33 (1) and the proportion of their capital held by
undertakings included in the consolidation or by persons acting
in their own names but on behalf of those undertakings.
(b) The same information must be given in respect of the asso-
ciated undertakingsreferred to in Article 33 (9), together withthe reasons for applying that provision.
4. The namesand regis tered officesof undertakingsproportionally
consolidated pursuant to Article 32, the factors on which jointmanagement isbas ed, and the proportion of their capital held bythe undertakings included in the consolidation or by persons acting
in their own names but on behalf of those undertakings.
5. The name and registered office of each of the undertakings, other
than those referred to in paragraphs 2, 3 and 4 above, in whichundertakingsincluded in the cons olidation ►
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either themselves or through persons acting in their own names but
on behalf of those undertakings, hold at least a percentage of the
capital which the Member Statescannot fix at more than 20 %,showing the proportion of the capital held, the amount of thecapital and reserves, and the profit or loss for the latest financialyear of the undertaking concerned for which accountshave been
adopted. Thisinformation may be omitted where, for the purpos es
of Article 16 (3), it isof negligible importance only. The informa-tion concerning capital and reserves and the profit or loss may alsobe omitted where the undertaking concerned doesnot publis h itsbalance sheet and where less than 50 % of its capital is held(directly or indirectly) by the abovementioned undertakings.1983L0349 — EN — 01.05.2004 — 004.001 — 16
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6. The total amount shown as owed in the consolidated balance sheet
and becoming due and payable after more than five years, as wellasthe total amount s hown asowed in the cons olidated balance
sheet and covered by valuable security furnished by undertakings
included in the consolidation, with an indication of the nature andform of the security.
7. The total amount of any financial commitmentsthat are not
included in the consolidated balance sheet, in so far as this infor-
mation is of assistance in assessing the financial position of the
undertakingsincluded in the cons olidation taken asa whole. Anycommitmentsconcerning pens ionsand affiliated undertakingswhich are not included in the consolidation must be disclosed sepa-rately.
8. The consolidated net turnover as defined in Article 28 of Directive
78/660/EEC broken down by categoriesof activity and intogeographical markets in so far as, taking account of the manner inwhich the sale of products and the provision of services fallingwithin the ordinary activitiesof the undertakingsincluded in the
consolidation taken as a whole are organized, these categories and
markets differ substantially from one another.
9. a) The average number of persons employed during the financial
year by undertakingsincluded in the cons olidation brokendown by categories and, if they are not disclosed separately in
the consolidated profit-and-loss account, the staff costs relating
to the financial year.
(b) The average number of persons employed during the financial
year by undertakingsto which Article 32 hasbeen applied s hallbe disclosed separately.
10. The extent to which the calculation of the consolidated profit or
loss for the financial year has been affected by a valuation of theitemswhich, by way of derogation from the principlesenunciatedin►
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EEC and in Article 29 (5) of thisDirective, wasmade in the finan-
cial year in question or in an earlier financial year with a view to
obtaining tax relief. Where the influence of such a valuation on thefuture tax chargesof the undertakingsincluded in the cons olidationtaken as a whole is material, details must be disclosed.
11. The difference between the tax charged to the consolidated profit-
and-loss account for the financial year and to those for earlier
financial years and the amount of tax payable in respect of thoseyears, provided that this difference is material for the purposes offuture taxation. This amount may also be disclosed in the balancesheet as a cumulative amount under a separate item with an appro-priate heading.
12. The amount of the emolumentsgranted in res pect of the financial
year to the members of the administrative, managerial and supervi-sory bodies of the parent undertaking by reason of theirresponsibilities in the parent undertaking and its subsidiary under-takings, and any commitments arising or entered into under the
same conditions in respect of retirement pensions for former
members of those bodies, with an indication of the total for eachcategory. A Member State may require that emolumentsgrantedby reason of responsibilities assumed in undertakings linked asdescribed in Article 32 or 33 shall also be included with the infor-
mation specified in the first sentence.
13. The amount of advancesand creditsgranted to the membersof the
administrative, managerial and supervisory bodies of the parentundertaking by that undertaking or by one of its subsidiary under-takings, with indications of the interest rates, main conditions and
any amountsrepaid, aswell ascommitmentsentered into on their
behalf by way of guarantee of any kind with an indication of thetotal for each category. A Member State may require that advancesand creditsgranted by undertakingslinked asdes cribed in Article32 or 33 shall also be included with the information specified inthe first sentence.1983L0349 — EN — 01.05.2004 — 004.001 — 17
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14. Where valuation at fair value of financial instruments has been
applied in accordance with Section 7a of Directive 78/660/EEC:
(a) the significant assumptions underlying the valuation models
and techniqueswhere fair valueshave been determined in
accordance with Article 42b(1)(b) of that Directive;
(b) per category of financial instruments, the fair value, the
changesin value included directly in the profit and los s
account aswell as , in accordance with Article 42c of that
Directive, changesincluded in the fair value res erve;
(c) for each class of derivative financial instruments, information
about the extent and the nature of the instruments, including
significant terms and conditions that may affect the amount,timing and certainty of future cash flows; and
(d) a table showing movements in the fair value reserve during the
financial year.
15. Where valuation at fair value of financial instruments has not been
applied in accordance with Section 7a of Directive 78/660/EEC:
(a) for each class of derivative instruments:
(i) the fair value of the instruments, if such a value can be
determined by any of the methodspres cribed in Article42b(1) of that Directive;
(ii) information about the extent and the nature of the instru-
ments; and
(b) for financial fixed assets covered by Article 42a of that Direc-
tive, carried at an amount in excess of their fair value andwithout use being made of the option to make a value adjust-ment in accordance with Article 35(1)(c)(aa) of that Directive:
(i) the book value and the fair value of either the individual
assets or appropriate groupings of those individual assets;
(ii) the reasons for not reducing the book value, including the
nature of the evidence that providesthe bas isfor the beliefthat the book value will be recovered.
Article 35
1. A Member State may allow the disclosures prescribed in Article
34 (2), (3), (4) and (5):
(a) to take the form of a statement deposited in accordance with
Article 3 (1) and (2) of Directive 68/151/EEC; thismus t bedisclosed in the notes on the accounts;
(b) to be omitted when their nature iss uch that they would be
seriously prejudicial to any of the undertakings affected by theseprovisions. A Member State may make such omissions subject toprior administrative or judicial authorization. Any such omissionmust be disclosed in the notes on the accounts.
2. Paragraph 1 (b) shall also apply to the information prescribed in
Article 34 (8).
SECTION 3
Theconsolidatedannualreport
Article 36
1. The consolidated annual report shall include at least a fair review
of the development and performance of the business and of the position
of the undertakingsincluded in the cons olidation taken asa whole,together with a description of the principal risks and uncertainties thatthey face.
The review shall be a balanced and comprehensive analysis of the
development and performance of the business and of the position of1983L0349 — EN — 01.05.2004 — 004.001 — 18
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the undertakings included in the consolidation taken as a whole, consis-
tent with the size and complexity of the business. To the extentnecessary for an understanding of such development, performance or
position, the analysis shall include both financial and, where appro-
priate, non-financial key performance indicatorsrelevant to theparticular business, including information relating to environmentaland employee matters.
In providing its analysis, the consolidated annual report shall, where
appropriate, provide referencesto and additional explanationsof
amounts reported in the consolidated accounts.
2. In respect of those undertakings, the report shall also give an indi-
cation of:
(a) any important eventsthat have occurred s ince the end of the finan-
cial year;
(b) the likely future development of those undertakings taken as a
whole;
(c) the activitiesof thos e undertakingstaken aswhole in the field of
research and development;
(d) the number and nominal value or, in the absence of a nominal
value, the accounting par value of all of the parent undertaking'sshares held by that undertaking itself, by subsidiary undertakingsof that undertaking or by a person acting in his own name but onbehalf of those undertakings. A Member State may require or
permit the disclosure of these particulars in the notes on the
accounts;
(e) in relation to the use by the undertakings of financial instruments
and, where material for the assessment of assets, liabilities, finan-
cial position and profit or loss,
— the financial risk management objectives and policies of the
undertakings, including their policies for hedging each major
type of forecasted transaction for which hedge accounting is
used, and
— the exposure to price risk, credit risk, liquidity risk and cash
flow risk.
3. Where a consolidated annual report is required in addition to an
annual report, the two reports may be presented as a single report. Inpreparing such a single report, it may be appropriate to give greateremphasis to those matters which are significant to the undertakings
included in the consolidation taken as a whole.
SECTION 4
Theauditingofconsolidatedaccounts
Article 37
1. The consolidated accounts of companies shall be audited by one
or more persons approved by the Member State whose laws govern theparent undertaking to carry out statutory audits on the basis of the
Eighth Council Directive 84/253/EEC of 10 April 1984 on the approval
of persons responsible for carrying out the statutory audits ofaccounting documents(
1).
The person or persons responsible for auditing the consolidated
accounts (hereinafter: the statutory auditors) shall also express anopinion concerning the consistency or otherwise of the consolidated1983L0349 — EN — 01.05.2004 — 004.001 — 19
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annual report with the consolidated accounts for the same financial
year.
2. The report of the statutory auditors shall include:
(a) an introduction which shall at least identify the consolidated
accounts which are the subject of the statutory audit, together with
the financial reporting framework that hasbeen applied in their
preparation;
(b) a description of the scope of the statutory audit which shall at least
identify the auditing standards in accordance with which the statu-tory audit wasconducted;
(c) an audit opinion which shall state clearly the opinion of the statu-
tory auditorsasto whether the cons olidated accountsgive a trueand fair view in accordance with the relevant financial reportingframework and, where appropriate, whether the consolidatedaccounts comply with statutory requirements; the audit opinion
shall be either unqualified, qualified, an adverse opinion or, if the
statutory auditors are unable to express an audit opinion, adisclaimer of opinion;
(d) a reference to any mattersto which the s tatutory auditorsdraw
attention by way of emphasis without qualifying the audit opinion;
(e) an opinion concerning the consistency or otherwise of the consoli-
dated annual report with the consolidated accounts for the samefinancial year.
3. The report shall be signed and dated by the statutory auditors.
4. Where the annual accountsof the parent undertaking are attached
to the consolidated accounts, the report of the statutory auditorsrequired by thisArticle may be combined with any report of the s tatu-
tory auditorson the annual accountsof the parent undertaking required
by Article 51 of Directive 78/660/EEC.
SECTION 5
Thepublicationofconsolidatedaccounts
Article 38
1. Consolidated accounts, duly approved, and the consolidated
annual report, together with the opinion submitted by the personresponsible for auditing the consolidated accounts, shall be published
for the undertaking which drew up the consolidated accounts as laid
down by the lawsof the Member State which govern it in accordancewith Article 3 of Directive 68/151/EEC.
2. The second subparagraph of Article 47 (1) of Directive 78/660/
EEC shall apply with respect to the consolidated annual report.
3. The following shall be substituted for the second subparagraph of
Article 47 (1) of Directive 78/660/EEC: ‘It must be possible to obtain acopy of all or part of any such report upon request. The price of such a
copy must not exceed its administrative cost.’
4. However, where the undertaking which drew up the consolidated
accounts is not established as one of the types of company listed inArticle 4 and isnot required by itsnational law to publis h the docu-ments referred to in paragraph 1 in the same manner as prescribed in
Article 3 of Directive 68/151/EEC, it must at least make them available
to the public at its head office. It must be possible to obtain a copy ofsuch documents upon request. The price of such a copy must notexceed its administrative cost.
5. Articles48 and 49 of Directive 78/660/EEC s hall apply.
6. The Member States shall provide for appropriate sanctions for
failure to comply with the publication obligationsimpos ed in thisArticle.1983L0349 — EN — 01.05.2004 — 004.001 — 20
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7. Paragraphs 2 and 3 shall not be applied in respect of companies
whose securities are admitted to trading on a regulated market of anyMember State within the meaning of Article 1(13) of Directive 93/22/
EEC.
Article 38a
Consolidated accounts may be published in the currency in which they
were drawn up and in ecus, translated at the exchange rate prevailingon the consolidated balance sheet date. That rate shall be disclosed inthe noteson the accounts .
SECTION 6
Transitionalandfinalprovisions
Article 39
1. When, for the first time, consolidated accounts are drawn up in
accordance with thisDirective for a body of undertakingswhich was
already connected, asdes cribed in Article 1 (1), before application of
the provisions referred to in Article 49 (1), a Member State mayrequire or permit that, for the purposes of Article 19 (1) account betaken of the book value of a holding and the proportion of the capitaland reserves that it represents as at a date before or the same as that of
the first consolidation.
2. Paragraph 1 above shall apply mutatis mutandis to the valuation
for the purposes of Article 33 (2) of a holding, or of the proportion of
capital and reserves that it represents, in the capital of an undertakingassociated with an undertaking included in the consolidation, and to theproportional consolidation referred to in Article 32.
3. Where the separate item defined in Article 19 (1) corresponds to
a positive consolidation difference which arose before the date of the
first consolidated accounts drawn up in accordance with this Directive,
a Member State may:
(a) for the purposes of Article 30 (1), permit the calculation of the
limited period of more than five yearsprovided for in Article 37(2) of Directive 78/660/EEC as from the date of the first consoli-dated accountsdrawn up in accordance with thisDirective; and
(b) for the purposes of Article 30 (2), permit the deduction to be made
from reserves as at the date of the first consolidated accountsdrawn up in accordance with thisDirective.
Article 40
1. Until expiry of the deadline imposed for the application in
national law of the Directivess upplementing Directive 78/660/EEC asregardsthe harmonization of the rulesgoverning the annual accountsofbanks and other financial institutions and insurance undertakings, a
Member State may derogate from the provisions of this Directive
concerning the layout of consolidated accounts, the methods of valuingthe itemsincluded in thos e accountsand the information to be given inthe noteson the accounts :
(a) with regard to any undertaking to be consolidated which is a bank,
another financial institution or an insurance undertaking;
(b) where the undertakings to be consolidated comprise principally
banks, financial institutions or insurance undertakings.
They may also derogate from Article 6, but only in so far as the limits
and criteria to be applied to the above undertakingsare concerned.
2. In so far as a Member State has not required all undertakings
which are banks, other financial institutions or insurance undertakingsto draw up consolidated accounts before implementation of the provi-sions referred to in Article 49 (1), it may, until its national law1983L0349 — EN — 01.05.2004 — 004.001 — 21
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implementsone of the Directivesmentioned in paragraph 1 above, but
not in respect of financial years ending after 1993:
(a) suspend the application of the obligation imposed in Article 1 (1)
with respect to any of the above undertakings which is a parentundertaking. That fact must be disclosed in the annual accounts ofthe parent undertaking and the information prescribed in point 2 of
Article 43 (1) of Directive 78/660/EEC must be given for all
subsidiary undertakings;
(b) where consolidated accounts are drawn up and without prejudice to
Article 33, permit the omission from the consolidation of any ofthe above undertakings which is a subsidiary undertaking. Theinformation prescribed in Article 34 (2) must be given in the noteson the accounts in respect of any such subsidiary undertaking.
3. In the cases referred to in paragraph 2 (b) above, the annual or
consolidated accounts of the subsidiary undertaking must, in so far astheir publication is compulsory, be attached to the consolidated
accounts or, in the absence of consolidated accounts, to the annual
accountsof the parent undertaking or be made available to the public.In the latter case it must be possible to obtain a copy of such docu-ments upon request. The price of such a copy must not exceed itsadministrative cost.
Article 41
1. Undertakingswhich are connected asdes cribed in Article 1 (1)
(a), (b) and (d) (bb), and those other undertakings which are similarly
connected with one of the aforementioned undertakings, shall be
affiliated undertakingsfor the purpos esof thisDirective and of Direc-tive 78/660/EEC.
2. Where a Member State prescribes the preparation of consolidated
accountspurs uant to Article 1 (1) (c), (d) (aa) or (2) or Article 12 (1),the undertakings which are connected as described in those Articlesand those other undertakings which are connected similarly, or areconnected asdes cribed in paragraph 1 above to one of the aforemen-tioned undertakings, shall be affiliated undertakings as defined in
paragraph 1.
3. Even where a Member State doesnot pres cribe the preparation of
consolidated accounts pursuant to Article 1 (1) (c), (d) (aa) or (2) or
Article 12 (1), it may apply paragraph 2 of thisArticle.
4. Articles2 and 3 (2) s hall apply.
5. When a Member State appliesArticle 4 (2), it may exclude from
the application of paragraph 1 above affiliated undertakingswhich areparent undertakingsand which by virtue of their legal form are notrequired by that Member State to draw up consolidated accounts inaccordance with the provisions of this Directive as well as parent
undertakingswith a s imilar legal form.
Article 42
The following shall be substituted for Article 56 of Directive 78/660/
EEC:
‘Article 56
1. The obligation to show in annual accounts the items
prescribed by Articles 9, 10 and 23 to 26 which relate to affiliatedundertakings, as defined by Article 41 of Directive 83/349/EEC,and the obligation to provide information concerning these under-takingsin accordance with Articles13 (2), and 14 and point 7 of
Article 43 (1) shall enter into force on the date fixed in Article 49
(2) of that Directive.
2. The notes on the accounts must also disclose:
(a) the name and registered office of the undertaking which draws
up the consolidated accounts of the largest body of undertak-1983L0349 — EN — 01.05.2004 — 004.001 — 22
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ings of which the company forms part as a subsidiary under-
taking;
(b) the name and registered office of the undertaking which draws
up the consolidated accounts of the smallest body of undertak-ings of which the company forms part as a subsidiaryundertaking and which isals o included in the body of undertak-ingsreferred to in (a) above;
(c) the place where copiesof the cons olidated accountsreferred to
in (a) and (b) above may be obtained provided that they areavailable.’
Article 43
The following shall be substituted for Article 57 of Directive 78/660/
EEC:
‘Article 57
Notwithstanding the provisions of Directives 68/151/EEC and 77/
91/EEC, a Member State need not apply the provisions of thisDirective concerning the content, auditing and publication of
annual accountsto companiesgoverned by their national laws
which are subsidiary undertakings, as defined in Directive 83/349/EEC, where the following conditionsare fulfilled:
(a) the parent undertaking must be subject to the laws of a Member
State;
(b) all shareholders or members of the subsidiary undertaking must
have declared their agreement to the exemption from such obli-gation; this declaration must be made in respect of everyfinancial year;
(c) the parent undertaking must have declared that it guarantees the
commitments entered into by the subsidiary undertaking;
(d) the declarations referred to in (b) and (c) must be published by
the subsidiary undertaking as laid down by the laws of the
Member State in accordance with Article 3 of Directive 68/
151/EEC;
(e) the subsidiary undertaking must be included in the consolidated
accountsdrawn up by the parent undertaking in accordance
with Directive 83/349/EEC;
(f) the above exemption must be disclosed in the notes on the
consolidated accounts drawn up by the parent undertaking;
(g) the consolidated accounts referred to in (e), the consolidated
annual report, and the report by the person responsible forauditing those accounts must be published for the subsidiaryundertaking aslaid down by the lawsof the Member State inaccordance with Article 3 of Directive 68/151/EEC.’
Article 44
The following shall be substituted for Article 58 of Directive 78/660/
EEC:
‘Article 58
A Member State need not apply the provisions of this Directive
concerning the auditing and publication of the profit-and-lossaccount to companiesgoverned by their national lawswhich are
parent undertakingsfor the purpos esof Directive 83/349/EEC
where the following conditionsare fulfilled:
(a) the parent undertaking must draw up consolidated accounts in
accordance with Directive 83/349/EEC and be included in theconsolidated accounts;
(b) the above exemption must be disclosed in the notes on the
annual accountsof the parent undertaking;
(c) the above exemption must be disclosed in the notes on the
consolidated accounts drawn up by the parent undertaking;1983L0349 — EN — 01.05.2004 — 004.001 — 23
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(d) the profit or loss of the parent company, determined in accor-
dance with this Directive, must be shown in the balance sheetof the parent company.’
Article 45
The following shall be substituted for Article 59 of Directive 78/660/
EEC:
‘Article 59
1. A Member State may require or permit that participating
interests, as defined in Article 17, in the capital of undertakingsover the operating and financial policiesof which s ignificant influ-ence is exercised, be shown in the balance sheet in accordance with
paragraphs 2 to 9 below, as sub-items of the items “shares in
affiliated undertakings” or “participating interests”, as the casemay be. An undertaking shall be presumed to exercise a significantinfluence over another undertaking where it has20 % or more ofthe shareholders' or members' voting rights in that undertaking.
Article 2 of Directive 83/349/EEC shall apply.
2. When this Article is first applied to a participating interest
covered by paragraph 1, it shall be shown in the balance sheet
either:
(a) at itsbook value calculated in accordance with Articles31 to
42. The difference between that value and the amount corre-
sponding to the proportion of capital and reserves represented
by the participating interest shall be disclosed separately in thebalance sheet or in the notes on the accounts. That differenceshall be calculated as at the date as at which the method isapplied for the first time; or
(b) at the amount corresponding to the proportion of the capital and
reserves represented by the participating interest. The differencebetween that amount and the book value calculated in accor-
dance with Articles 31 to 42 shall be disclosed separately in
the balance sheet or in the notes on the accounts. That differ-ence s hall be calculated asat the date asat which the methodisapplied for the firs t time.
(c) A Member State may prescribe the application of one or other
of the above paragraphs. The balance sheet or the notes on theaccount must indicate whether (a) or (b) above has been used.
(d) In addition, when applying (a) and (b) above, a Member State
may require or permit calculation of the difference asat thedate of acquisition of the participating interest referred to in
paragraph 1 or, where the acquisition took place in two or
more stages, as at the date as at which the holding became aparticipating interest within the meaning of paragraph 1 above.
3. Where the assets or liabilities of an undertaking in which a
participating interest within the meaning of paragraph 1 above isheld have been valued by methods other than those used by thecompany drawing up the annual accounts, they may, for the
purpose of calculating the difference referred to in paragraph 2 (a)
or (b) above, be revalued by the methodsus ed by the companydrawing up the annual accounts. Disclosure must be made in thenoteson the accountswhere s uch revaluation hasnot been carriedout. A Member State may require such revaluation.
4. The book value referred to in paragraph 2 (a) above, or the
amount corresponding to the proportion of capital and reservesreferred to in paragraph 2 (b) above, shall be increased or reduced
by the amount of the variation which hastaken place during the
financial year in the proportion of capital and reserves representedby that participating interest; it shall be reduced by the amount ofthe dividendsrelating to the participating interes t.
5. In so far as a positive difference covered by paragraph 2 (a)
or (b) above cannot be related to any category of asset or liability,it shall be dealt with in accordance with the rules applicable to theitem “goodwill”.1983L0349 — EN — 01.05.2004 — 004.001 — 24
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6. (a) The proportion of the profit or loss attributable to partici-
pating interests within the meaning of paragraph 1 aboveshall be shown in the profit-and-loss account as a separate
item with an appropriate heading.
(b) Where that amount exceedsthe amount of dividendsalready
received or the payment of which can be claimed, theamount of the difference must be placed in a reserve which
cannot be distributed to shareholders.
(c) A Member State may require or permit that the proportion of
the profit or loss attributable to the participating interestsreferred to in paragraph 1 above be shown in the profit-and-loss account only to the extent of the amount corre-
sponding to dividends already received or the payment of
which can be claimed.
7. The eliminationsreferred to in Article 26 (1) (c) of Directive
83/349/EEC shall be effected in so far as the facts are known orcan be ascertained. Article 26 (2) and (3) of that Directive shall
apply.
8. Where an undertaking in which a participating interest within
the meaning of paragraph 1 above isheld drawsup cons olidatedaccounts, the foregoing paragraphs shall apply to the capital andreserves shown in such consolidated accounts.
9. ThisArticle need not be applied where a participating interes t
asdefined in paragraph 1 isnot material for the purpos esof Article2 (3).’
Article 46
The following shall be substituted for Article 61 of Directive 78/660/
EEC:
‘Article 61
A Member State need not apply the provisions of point 2 of Article
43 (1) of thisDirective concerning the amount of capital and
reserves and profits and losses of the undertakings concerned tocompaniesgoverned by their national lawswhich are parent under-takingsfor the purpos esof Directive 83/349/EEC:
(a) where the undertakingsconcerned are included in cons olidated
accountsdrawn up by that parent undertaking, or in the cons o-lidated accountsof a larger body of undertakingsasreferred to
in Article 7 (2) of Directive 83/349/EEC; or
(b) where the holdingsin the undertakingsconcerned have been
dealt with by the parent undertaking in itsannual accountsinaccordance with Article 59, or in the consolidated accountsdrawn up by that parent undertaking in accordance with Article
33 of Directive 83/349/EEC.’
Article 47
The Contact Committee set up pursuant to Article 52 of Directive 78/
660/EEC shall also:
(a) facilitate, without prejudice to Articles169 and 170 of the Treaty,
harmonized application of thisDirective through regular meetings
dealing, in particular, with practical problemsaris ing in connectionwith itsapplication;
(b) advise the Commission, if necessary, on additions or amendments
to thisDirective.
Article 49
1. The Member States shall bring into force the laws, regulations
and administrative provisions necessary for them to comply with this1983L0349 — EN — 01.05.2004 — 004.001 — 25
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Directive before 1 January 1988. They shall forthwith inform the
Commission thereof.
2. A Member State may provide that the provisions referred to in
paragraph 1 above shall first apply to consolidated accounts for finan-
cial yearsbeginning on 1 January 1990 or during the calendar year1990.
3. The Member States shall ensure that they communicate to the
Commission the texts of the main provisions of national law whichthey adopt in the field covered by thisDirective.
Article 50
1. Five yearsafter the date referred to in Article 49 (2), the Council,
acting on a proposal from the Commission, shall examine and if needbe revise Articles 1 (1) (d) (second subparagraph), 4 (2), 5, 6, 7 (1), 12,
43 and 44 in the light of the experience acquired in applying this
Directive, the aimsof thisDirective and the economic and monetarysituation at the time.
2. Paragraph 1 above shall not affect Article 53 (2) of Directive 78/
660/EEC.
Article 50a
Not later than 1 January 2007, the Commission shall review the provi-
sions in Article 29(1), Article 34(10), (14) and (15) and Article
36(2)(e) in the light of the experience acquired in applying provisions
on fair value accounting and taking account of international develop-ments in the field of accounting and, if appropriate, submit a proposalto the European Parliament and the Council with a view to amendingthe abovementioned Articles.
Article 51
This Directive is addressed to the Member States.1983L0349 — EN — 01.05.2004 — 004.001 — 26
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