ARCHIVES HISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(74)191
Vol.1974/0029

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COMMISSION OFTHEEURO'rEiVN COMMUMTÎBS
COM(74)191 final
Brussels ,21February 1974
MEETBEDPROPOSAL FORAFOURTH COUNCIL DIRECTIVE
forcoordination ofnational legislation regarding
theannualaccounts oflimitedliability companies
(presented bytheCommission totheCouncilpursuantto
thesecondparagraph ofArticle149oftheEECTreaty)
COM(74)191final

EXPi.AiJ/.TORYvmopmwm
Both theEuropean Parliament and .theEconomic andSocial Committee have
delivered their Opinions ontheProposal foraFourth Council Directive
onthebasis ofArticle 54(3 )(g)"'".
TheCommission considered that ,inorder totake account ofthese
Opinions ,itsproposal should "beamended pursuant tothesecond paragraph
ofArticle 149 "the F3ECTreaty . '
.The opportunity hasbeen taken also torn^ke certain further amendments
totheoriginal proposal totake into ;account ,the lawn ofthenowMember
States . ■ . . ; .
TheEECAccountants Study Group ,inwhich theprofessional organiza­
tions ofthenewMember States arealso represented ,hassubmitted twome-
moranda totheCommission ontheproposal forafourth .Directive ,dated 26
June 1972 and21February 1973 respectively ."The'Commission hasalso made cer­
tain amendments toitsproposal onthobasis ofsuggestions contained in
these memoranda .
Artide 1
The scope oftheDirective hasbeen ,extended tocover those forms of
company under United Kingdom ,Danish andIrish lawwhich correspond tothe
forms ofcompany which were taken into account inthe original Member Sta­
tes .For this purpose thesame distinctions haVe been made asinDirective
68/15l/EECof9March 1968 andmore particularly inArticle 2(l)(f )thereof ,
2asamended bytheActofAccession .Asregards Ireland ,"private companies ",
endasregards theUnited Kingdom ,"private companies "inNorther Ireland ,
■'•Opinion of .theEuropean Parliament ,OJNoC129»11December 1972 »pp.3&
etseq .
Opinion oftheEconomic a^dSocial ,Comrn ttee ,OJNoC39»7June 1973 , '
pp.31 ,etseq ,
2Actconcerning thoConditions ofAccession andtheAdjustments tothe
Treaties ,Annex I,III (h),OJNoL73»27Harch 1972 ,p.89.

aretreated as"sociétés àresponsabilité limitée ".Foradéfinition of
such "private companies "reference ismade toArticle 6(ll)(l )ofDirec­
tive of \
Article 2
1 "11 "■ v
Thenewwording hasbeen drafted inresponse tothewiehos of "both
the Jluropean Parliament andtheEconomic andSocial Committee .It "brings
outmore cle?rly theessential principle that theannual accounts should
bedrawn upinsuch away astogive atrue andfair view oftheposition
ofthecompany .This principle implies that should thespecific provisions
oftheDirective beofthemselves insufficient toensure that this objec­
tive isattained ,thecompany will belegally obliged toprovide further
information .
Ithasbeen possible todelete thereference totheprinciples ofre­
gular andproper accounting since therequirement ofatrue sjidfair view
necessarily implies that such principles must beobserved . 1
Article 4
Paragraph 2isaalight 1;"Tended version ofasuggestion made bythe
Parliament .Thewords "Inexceptional cases "have been deleted ,since ,where
thespecial nature ofanundertaking requires adifferent lay-out forthe
accounts ,thelay-out must bechosen soastogive atrue andfair view of
theposition ofthecompany .
Under Paragraph 3,inthecircumstances mentioned insub-paragraphs
(a)and (b),companies mayregroup various items without prior authorization
Amendment totheproposal foraSecond Council Directive ,presented by
theCommission totheCouncil pursuant tothesecond paragraph ofArticle
149 .
^./• '

) .
-IXÏ-
fromtheMemberStateconcerned ;thiswastotakeaccountof comments from
theUconomic and.SocialCommittee .Regrouping undersubparagraph .(b)»which
doesnotentailanylessinformation beingprovided andmerelyenables some
itemstobedealtwitheitherintheaccounts orinthenotes,wasmade
poss?Lble soastoallowgreaterflexibility inthelay-outofaccounts .
Articles 3and9'
Soastopermitwhatisafairlycommonpracticeincertainofthenew
MemberStates,authorisation isgivenforlossestoappearontheliabili­
tiessideofthebalancesheetasadeduction fromthetotalofcapitalsub­
scribedplusreserves .
Thepossibility ofshowingvalueadjustments asaseparate balancesheet
item(Article8,Liabilities 0;Article9»J)hasbeenexcluded.Firstly,
itisintheinterests ofclaritythattheassetssideshouldshowthenet
valueofthevariousassets.Secondly ,theinclusion ofvalueadjustments
asaseparate itemontheliabilities sideincreases thebalancesheetto­
talartificially .
Valueadjustments mustappeareitherinthebalancesheet,asclear
deductions fromtheitemsconcerned ,orinthenotesontheaccounts (see
amendedversionofArticle12),
Article 12 - ;
Seecommentary onArticles 8and9.
Articles 15and13
Theimproper inclusion undertheitems"Prepayments "and"Accruals "
ofanticipatory items,thatistosay,ofearnings notyetreceived and
payments notyetmade,istobeavoided.Torthisreason,inaccordance
withasuggestion fromtheParliament ,itisprovidedthatsuchitemsmust
beexplained inthenotesontheaccounts wheretheamountinvolvedis
considerable .

Articles 20to22 ',
Assuggested ,"bytheParliament andtheEconomic andSocialCommittee ,
theitem"Staffcosts"hasbeensubdivided ,particularly toshowtheamount
ofwagosandsalaries asopposedtosocialsecurity costs.
Thenumbering ofArticles 20(ill19)and22(ill17)hasbeenchanged
because,astheEconomic andSocialCommittee rightlypointedout,theitem
"Sub-total "isnotapartoftheitem"Exceptional Result",butthetotal
ofresultsunderI,IIandIII.
Article 24
Thisamendment wasnecessary becausevalueadjustments maynolonger
appearontheliabilities sideofthebalancesheet.Articles49(2)and
50(2)(a)havebeensimilarly amended.
Article 2b ■1
Additions mustbemadetothegeneralprinciples ofvaluation enumera­
tedinArticle28,soastotakeaccountofcertainprinciples whichare
moreparticularly observedinprofessional practiceincertainofthenew
MemberStates.Theprinciple ofconservative valuation ,alreadyreferredto'
byimplication inparagraphl(b),(c)?nd(d)intheoriginalversion,is
nowstatedexpresslyinparagraphl(c)andtwofurtherprinciples havebeen
added.Thefirstisthegeneralrulethatthevaluations intheannual
accounts mustbemadeonthebasisthatthecompanywillnotbewoundup
butwillcontinuetocarryonbusiness (par?.graph 1(a)).Paragraphl(d)
setsforththeprinciple wherebyearnings andchargesarisingduringthecourse
ofaparticular yearmustbetakeninrelationtoeachother.
Thewordingofparagraphl(f)hasbeenimprovedalsoonasuggestion
by-theEconomic andSocialCommittee .

Article 30
'.'liechoiceopen "toMemberStatesTinderthisArticleofintroducing or
maintaining -methodsofvaluation whichdepartfromthe.classicmethodlaid
down "byArticle 29isconsiderably widenedintheamendedversion.Economic
developments haveshownthedesirability ofhavingthegreatest possible
flexibility inthisrespect.Newmethodsofvaluation haverecently been
developed whichallowfortheeffectsofinflation ontheaccounts unlilce
thosebasedonreplacement value.Whatthefinaloutcomeofsuchdevelop­
mentswillbecannotasyetbeforeseen .Promthepointofviewofharmo­
nization ,however,thereisnothingagainstsuchnewvaluation methods .
beingallowedprovidedthattheycanbecompered withexisting methods..
Paragraph l(b)therefore authorizes theMemberStatestointroduce other
valuation methods,basedoncurrentvalues,whilstArticles30(2),12(3)(c)
and4(^)provideforthecomparison ofsuchmethodswithexisting methods.
Thevaluation methodsenvisaged byparagraphl(b)arethosewherebythe
trendincurrentvaluesfromone"accounting periodtoanotherisregularly
followed byandreflected intheannualaccounts ,asopposedtorevaluation ,
asauthorized byArticle31,whichwilltakeplaceonlyoncoiaawhile.
Paragraphs 2,4and6havebeenamendedtotakeaccountofthenewpro­
visionsofparagraph l(b).'
Theamendment tothelastsubparagraph ofthefirstparagraph wasmade
intheinterests ofclarity.
l-Iherenecessary ,futuretaxation mustbeshownasacleardeduction
fromitemscarriedtotherevaluation reserve (paragraph 2).Thisprovision
isdesignedtopreventthereaderofthebalancesheetfrombeingmisled
as.totheamountofthecompany'sowncapital.

-VI-
Article 31
The-texto;"thesecondsubparagraph ofparagraph 1hasbeenamendedin
thesamewayasthelastsubparagraph ofArticle30(l).
Article 33
valueadjustments maynolongerbemadeinrespectoffixedassetsto
taiceaccountofdepreciations invaluewhichmayormaynotbepermanent
(paragraph l(;c)(aa).Withtheexception ofparticipating interests andother
financial assets,itisnotadvisable totakeaccountoffluctuations in
thevaluesofitemsoffixedassetswhichmayturnouttobeonlytempo­
rary.
Thewordingofparagraphl(d)hasbeenimproved.Furthermore ,apro­
visionhasbeenintroduced whichrequiresfuturetaxation inrespectof
whichvalueadjustments aremadetobeindicated inthenotesontheac­
counts,toavoidmisunderstanding astotheeffectoftheamountofsuch
adjustments onthetradingprofit.
»'Inparagraph 3(b)ithasbeenmademandatory ,asopposedtopermissi­
ble,toaddtotheproduction costareasonable proportion ofthemanufac­
turingcostswhichareonlyindirectly attributable totheproductin
question .Thecompulsory addition ofindirect manufacturing coststothe
production costiscomingtobeconsidered moreandmoreinbusiness
practice asbeinginaccordance withbasicaccounting principles .
Paragraph 4hasbeenamendedinaccordance withthewishesofthe
Economic andSocialCommittee .Companies aregiventhechoiceofincluding
interest onborrowedcapitalintheproduction cost.Thepossibility of
including interest on^thecompany *sowncapitalintheproduction costhas
beenexcluded ,sincetheeconomicjustification forsuchameasureisa
matterofsomecontroversy .

-VII-
Article 36
Thete;rfcofparagraph .l(e)hasbeenamendedinthesamewayasArticle
33(l)(d).andforthesamereasons.
Article 37
Thermountatwhichstocksarevaluedinthebalancesheetmayvary
considerably depending onthemethodusedforcalculating thepurchase pri-
beorproduction cost.Article37givescompanies awidediscretion asto
themethodtobeused.Itistherefore providedthatwherethevalueof
stocksinthebalancesheetascalculated byagivenmethoddifferbya
considerable amountfromthevalueonthebasisoftheactualpurchase
price,anindication oithedifference mustbeincludedinthenoteson
theaccounts .
Article 40
ThetextofthisArticle hasbeen,amendedtoaccordwiththeamended
textofArticle2(2).
Article 41
Inviewoftheincreasing volumeofinternational business transacted
betweencompanies andthecontinued fluctuations incurrency valu.es,the
methodusedbythecompany ^orcalculating itsrateof.exchange forcre­
ditorsanddebtorsin'"oreigncurrency should,forcompleteness ofinfor­
mation,beindicatedinthenotesontheaccounts(l).

-VIII -
Therecording ofthenetamount ofturnover asaseparate item isof
great importance foranappraisal ofthecompany 'sposition ,andparticular­
lyofitsprofitability .Since most undertakings have diversified activities ,
this information will beallthemore valuable ifanindication isgiven of
therespective contributions ofthevarious commercial andindustrial acti­
vities ofthecompany totheturnover andtotheyear 'sresults .Abreak­
down oftheturnover figure bygeographical markets isalso ofinterest ,
particularly toshow towhat extent thecompany isdependent onexports
andtowhich country .These item3 ofinformation aremoreover already requi­
red ofcompanies inone ofthenewMember States .Intheinterests ofpro­
viding adequate information forshareholders andthird parties this practice
should beextended throughout theCommunity .
Article 41(6 )obviously cannot apply toanycompanies which have been
exempted under Article 24from showing their netamounts ofturnover .This
isprovided forbyArticle 42(2 ).However ,this provision maybeapplied
independently ofArticle 24.Thus ,Member States whodonotexercise the
option given them byArticle 24andtherefore require companies towhich
that Article applies topublish their net amounts ofturnover ,maynever­
theless exempt them from giving theinformation required byArticle 41(6)•
Therequirement ofadditional information concerning thenumber of
persons employed ,andstaff costs ,wasincluded inresponse toaproposal
bytheParliament andtheEconomic andSocial Committee (7)» '-
Therequirement ofinformation concerning retirement pensions forex-
managers ofthecompany (10)wasalso included attherequest ofthePar­
liament .
Article 42
Seethecommentary onArticle 41(6 ).
Article 43
Theactivities ofthecompany inthefield ofresearch anddevelopment
areimportant elements fortheappreciation o:"thecompany 'sfuture evolu­
tion .This information must therefore begiven intheannual report ,as
hasbeen suggested bytheParliament .

-IX
Article 44
Theauditor'sreportwhichArticle 44requires tobepublished isnot
thereportsubmitted bytheauditortothe:management organof.thecompany.
AstheParliament andtheEconomic .andSocialCommittee rightlypointedout,
publication ofthelatterwouldnotbe,advisable ,firstlybecauseitwould
betoodetailed ,andsecondly becauseitoften ..containsconfidential infor­
mation.ThereporttowhichArticle44refersisanextractfromthatra-
port.To;avoidanymisunderstanding ,itisspecified thatthecontentof
thereporttobepublished isdefinedinArticle60ofDirective
of 1.
Article 49
Theannualreport,asreferredtoinArticle 43?willnecessarily con­
tainstatements ofopinionbythemanagers ofthecompany onpresentand
futuredevelopments .Obviously theauditorcannotinhiscertificate give
anyguarantee astotheoutcomeofsuchforecasts .
Hec?nontheotherhandverifyandcertifythatthereisnoincon­
sistency betweentheinformation givenintheannualreportandtheview
givenbytheannualaccountsofthecompany'sposition (paragraphl(b)).
Asregardstheamendment toparagraph 2,seethecommentary onAr­
ticle24.
OJNO0131,13December 1972,pp.49etseq
(ProposalforafifthDirective ,onthebasisofArticle54(3)(g),sub­
mittedbytheCommission totheCouncilon9October1972).
./•

-χ--
Article 50
,Asregardstheamendments toparagraph 2(a),seethecommentary on
Article 24• ;
Inparagraph 2(b),itisprovidedthatintheabridgedbalancesheet,
asdefinedbythatparagraph ,debtorsandcreditors mustbebrokendown
byreference tothetimewhensuchitemsbecomedueandpayable,asrequi­
redbyArticles8arid9«?hisistoensurethat,inabridgedbalancesheets
also,thelay-outsrequiredunderArticles 8and9i^ndmoreparticular­
lyunderliabilities itemEinArticle8anditemsPandIinArticle 9»
arethesame.
I
I
■I
I',

ORIGINAL PROPOSAL
AMENDED PROPOSAL FORA
FOURTH COUNCIL DIRECTIVE
onthe"basisofArticle54(3)(g)for
coordination ofthosafeguards required
fromcompanies intheMemberStatesto
protecttheinterests bothofmembers
andofthirdparties,asregardsthe
presentation andcontent oftheannual
accounts andreport,methodsofvaluation
andpublication ofthosedocuments
(presented "bytheCommission tothe
Counoilon16thNovember 1971)
THECOUNCIL OFTHEEUROPEAN COMMUNITIES
HavingregardtotheTreatyestablishing
thoEuropean Economic Corcmuniijr ,andin
particular Article54(3)(g)thereof 5
Havingregardtothoproposal from
theCommissions ■
HavingregardtothoOpinionofthe
European Parliament !
HavingregardtotheOpinionoftho
Economic andSocialCommittoej
"Whereascoordination ofthonational
provisions concerning thepresentation and
contonts oftheannualaccounts andreport,
methodsofvaluation andpublication of
thosedocuments inrespectofthesocieta
anonyme,theAktiengosellschaf t,the
Societaperazioniandthenaamloze vei>-
nootschap andinrespectofthesocilte
arosponsabilite limitee,theGesellschaft
mitbcschranktor Haftung,theSocietaa
responsabilita limitata andthovennoot-
schapmetbeperkte aansprakelijkheid is
ofspecialimportance fortheprotection
ofmembersandthirdparties !
.Whereas simultaneous coordination is
requisite inthesefieldsforthoseforms
ofcompanybeoause,ontheonehand,the
activities ofthosecompanies frequently

-2-
extend "beyondthefrontiers oftheir
nationalterritory and,ontheother .
hand,thoyoffernosafeguards tothird
parties "beyondtheamountoftheirnet
assets;whereasmoreover thenecessity
andurgently ofsuchcoordination have
"beenrecognised andconfirmed inArticle 2
(l)(f).ofDirective Ho.68/15I/EECof
9Ilaroh19685
TJheroasitisalsoneoessary to
establish intheCommunity equivalent
legalrequirements asregardstheextent
ofthefinancial information thatshould
"bomadeavailable tothepublicby
companies thatareincompetition with
onoanotherandhavethesamelegalforms
s•
Whereas theannualaccounts mustre­
flectasaccurately aspossible the
company'sassetsandliabilities ,
financial position andresults;whereas
tothisendaSsy-outcompromising items
thatinprinciple areobligatory mustbe
proscribed fordrawingupthebalanco
sheetandprofitandlossaccount ;and
whoroas ontheotherhandthedifferent
jE.otii.odspormitted intheMemberStates
-r^orvaluation ofassetsandliabilities
mustbocoordinated toensurethat
annualaccounts presentequivalent in­
formation ;whereas theannualaccounts must
giveatrueandfairviewofthe
company'sassetsandliabilities ,
financial position andresults ;whereas
tothisendalay-outcompromising items
thatinprinciple areobligatory nustbe
prescribed fordrawingupthebalance
sheetandprofitandlossaccount ;and
whereas ontheotherhandthedifferent
methodspermitted intheMemberStates
forvaluation ofassetsandliabilities
mustbecoordinated toensurethat
annualaccounts presentequivalent in-
formations

Choreastheannualaccounts ofsocietes -»unchanged .
anonymos,Aktiengosellschaf ton,societaper,
azioniandnaamlozo vcnnootschappon must "bo
availa"blo inthefullestpossible measure
toshareholders andthirdparties ;and . ,-
whorcas tothatenditisessential that , -
they "bopublished infullinanational
gazettes
Whereas sofarasregardssocietes a ■
responsabilite limitee,Gesellschaften
Bitbeschrankter Haftung,societäa
rosponsabilita limitata andvennoots chap-
pennet "boporkto aansprakclijkheid a .
distiiaction nayhemade "betweenthe
information tohogiventothemembers
andthattobegiventothirdparties ;
whereas thomembers thereof shouldbe
givonthesameinformation asthoshare­
holdersinasociete anonym©,Aktien-
gesollschaf t,societaperazioniand
naamloze ,vonnootschap ;.whereasfortho
information ofthirdpartiesthesame
particulars shouldasageneralrulebe ■ '"
disclosed asinthecaseoftheselatter .r
"typesofcompany by-reasonofthefact ..■ - .
thattheliabiliiy ofthomembersis *
limited,butsomereliefcannevertheless ''
boallowed'inthecaseofthesmaller
companies ;
' Tihcrrsas whenacompanybelongsto
...... ..agroup,onlythepresentation of.
consolidated .accounts ofthogrounca
giveatrueandfair,aswellasacor^
viewofthesituation ofthocompanies
■ concerned ;wheroasinanticipation of
■•; thocoordination ofnational rulesin
... thisfieldandinviewofthofactt!-.;.
theCommission hascommitted itcolf i.3
submitaproposal assoonaapossible ?
MemberStateswilltakecarothatcor<~
....,. solidated accounts provided forbytl-.
-... ..... legislation areestablished inconfer\
. •.-.■... withtheprinciples ofthisdirective ,
IIASADOPTED THISDIE3CTIVE ; HASADOPTED THISDIRECTIVES

Article 1
1.(a)Thecoordination measuresprescribed
"byArticles 2to47ofthisDirective ;
apply 'tothelaws?regulations and
administrative provisions oftheMember
Statesrelating tothefolio-wing iypes
ofoompanys
–mGornany :
dieAktiengesellschaft ,dieKommandit­
gesellschaft aufAktions
–inBolgium :
lasociété anonyme,denaamloze ven-
nootschap ,lasociétéencommandite
paractions,decommanditaire ven-
noots^ihap opaandelen ;
«■*'xnFrance s
.lasociété anonyme,lasociétéen
commandite paractions ;Article 1
-unchanged r
-mGermany s
dieAktiengesellschaft ,dieKommandit­
gesellschaft aufAktien;
-inBelgiums
lasociétéanonyme,donaamloze ven-
nootschap ,lasociétéencommandite
paractions,docommanditaire ven-
nootschap opaandelen ;
-inDonmark :
Aktieselskab,Kommandit-Aktieselskab;
-xnFi-ance :
lasociété anonyme,lasociétéen
''commandite paractions ;
-inIrelandî
companies incorporated withlimited
.liability ,with;theexception ofthosereferredtoinArticle 6(il)
(l)ofDirective no,of'
.(1)5
-inItaly:....
lasocietàporazioni,lasocietàin
accomandita perazioni;
–inLuxembourg :
lasociétéanonyme,lasociétéen
commandite paractions;' --
-intheNethorlandss
denaamloze vennootschap ,decommanr »
ditairevennootschap opaandelen ;
-intheUnitedKingdom :
companies incorporated -withlimited
liability ,withtheexception as
regardsNorthern Ireland,ofthosereferredtoinArticle 6(ll)(l);of
Directive no.of (l).
(l)Amendment totheProposalfora
SecondCouncilDirective ,sub­
mittedtotheCouncil bythe
Commission pursuant tothesecond
paragraph ofArticle 149«–inItaly:
lasooietaperazioni,lasocietàin
accxixrixcSKifc.' porazioni *
-■inLuxembourg ;
■lasociétéanonyme,lasociétéen
commandite paractions ;
–intheNcthorlands :
.denaamloze vennootschap ,decomman-
,ditairevennootschap opaandelen ;

.(b)Thocoordination mcasurosprescribed
byArticles 48to5°ofthisDirective
applytothelaws,regulations and
administrative provisions oftheMember
Statesrelating tothefollowing types
ofcompany :
-mGormany
dieGesellschaft mit "beschrankter
Haftung ;
-inEolgiums
lasociété depersonnes àresponsa­
bilitélimitée,depersonenvennoot -
sohapmetboporkte aansprakolijkhoid }
-inFranoo :
lasociétéàresponsabilité limitées
-xnItalys
lasocietàaresponsabilità limitata }
-inLuxembourg s
lasociétéaresponsabilité limitée }
-intheNethorlandss
dobesloten vennootschap motbeperkte
aansprakelijkheids–unchanged '
-mGermanys
dieGesellschaft mitbeschränkter
Haftung ;
–inBelgiumt
lasociété depersonnes àrosponsa~
bilitélimitée,doporsonenvonnoot -
cchapmotboperkte aansprakelijkheid ;
-inDenmarks
anpartsselskabcr ;
-inPrances
lasociétéàresponsabilité limitées
–inIrelands
companies incorporated withlimited
liability ,asreferred toinArticle
6(ll)(l)ofDirective no.of
(1)5
-inItalys
-lasccictaaresponsabilità limitata }
-inLuxembourg s
lasociétéàresponsabilité limitée ;
-intheNetherlands :
debesloten vennootschap metbeperkts
aansprakelijkheid }
–inthoUnitedICingdoms
asregardsNorthernIreland ^companion
incorporated withlimitedliability ,
asreferredtoinArticle6(11)(/l)
ofDirective No, of
(1).
(l)Amendment totheProposalfora
SecondCouncilDirective ,sub­
mittedtotheCouncil bytho
Commission pursuant tothesocond
paragraph ofArticle 14.9*

-6–
,2;Untilthosafeguards required of ■_-unchanged "
creditinstitutions andinsurance companies '■
areinduocoursecoordinated ,itshall "be
permissible fortheMemberStatesnotto
applythoprovisions ofthisDirootivo
tothosoundertakings .

-7~
SECTIOM 1
Generalrequiremcnts
Article 2
1.Thoannualaccounts shallcompromise
the"balancesheet,theprofitandloss
account andthonotesontheaccounts .
Thesedocuments shallconstitute a
composito whole.
2.Thoannualaccounts shalloonform
tothoprinciples ofregularandproper
accounting .
3.Thoyshallhedrawnopclearlyand,
inthecontextoftheprovisions regarding
thevaluation ofassetsand.liabilities
andtholay-outofaccounts,shallre­
flectasaccurately aspossible the
company'sassets,liabilities ,financial
position andresults.S5STICTT 1
Generalrequirements
Article 2
–uncnanged
2.'Theannualaccountsshallgive
atrue .andfairviewofthecompany's
assets,liabilities ,financial position
andresults ,
3.Theyshallhedrawnupclearly .
andinconformity withtheprovisions
ofthisDirective .
••*(•*•

SECTION 2r-tii
SECÏT'OîT 2
■'Lay-cutroftthe-varrnua^aacoourit s Lay-out oftheannualaccounts
Article 3 Artiole3
Thelay-outofthebalancesheet uncharged
andofthoprofitandlossaccount,
particularly asregardsthoformadopted
forthoirpresentation ,maynot "be
ohangodfromoneyeartothenext.
Departures fromthisprinciple .shall
"bepermitted inexceptional cases.
Whoreitisdoparted from,anindication
thereofshall "bogiveninthenoteson
thoaocounts togothor withanexplanation
ofthereasons therefore .

IrtiOle 4
„!«■ ,'Inthebalance sheet ,andalso in
theprofit andloss account ,theitems
referred toinArticles 8,9*an<!20to
23ofthis Directive shall "beshown
separately .Amore detailed sub–division
oftheitems that arepreceded "byArabic
numerals isauthorized ,
2. Inexceptional cases adifferent
lay-out shall ,whore thespecial nature
oftheundertaking 30requires ,"bo
permitted for thebalance sheet and
profit and loss account items that are
preceded "byArabic numerals .Any such
different lay-out shall ,however ,present
anequivalent view andbeexplained in
the notes onthe accounts .
3. BioMember States mayauthorize a
regrouping ofthebalance sheet and
profit and loss account items that are
preceded byArabic numerals where they
are ofsecondary interests only in
relation totheobject ofArticle 2(3)
ofthis Directive .Article 4"
1. .-unchanged .
4. inrespect ofeach balance sheet
andprofit and loss account item the
figures for thepreceding financial year
shall boshown .2. Nodifferent lay-out shall be
permitted for thebalance sheet and
profit and loss account items that are
preceded byArabic numerals unless the
special nature oftheundertaking so
requires .Any such different lay-out
shall ,however ,prosent anequivalent
view .andbeexplained inthenotes on
the accounts . "
3. Thebalance sheet and profit and
loss eocount items that are preceded
byArabic numerals mayberegrouped
where 1
(a)they areofsecondary interest
only inrelation totheobject of .
Article 2(2)ofthis Directive ?or
(b)such regrouping makes forgreater
clarity ,provided that there­
grouped items aredealt with
separately inthenotes tothe
accounts .
4. -unchanged

-10-
Article 5
TheMemberStatesmayauthorize
adaptation ofthelay-outofthe "balance
sheetandprofitandlossaccountin
orderto"bringouttheallocation ofthe
results .
Article 6
Anyset-offbetweenassetsand
liabilities ,orbetweenexpenditure and
inoomo,isprohibited .Article 5
–unchanged
Article 6
-unchanged
SSCH01T 3
Balancesheetlay-out
.Article7
Forthepresentation ofthebalance
sheet,theMemberStatesshallintroduce
intotheirlegislation thelay-outs
prescribed byArticles 8and9this
Directive ,andshallleavethecompanies
tochocsobetween them.SECIION3
Balancesheetlay-out
Article 7
–unchanged '

-11-
Articla 8 Article 8
iAssets Assets
A.Subscribed capital U1TPAID
-ofwhichtherehas "beencalled.A.-unchanged
B.Formation expenses insofarasthe...B.,–unchangod
national lawpermits thorn -to:"be
rocordodas assets,
1.Costofresearch anddevelopment
insofarasthenational law
permits themto"berecorded as
assets,
2.Concessions ,patents,licences ,
trademarks,,andsimilarrights .
andvalues,iftheyweres
(a)acquiredforvaluable'
consideration andare
nottobeshownTinder
(b)createdbytheundertaking
itsolf,insofarasthe
national lawpermits them
toberecorded asassets,
3,Goodwill ^totheextentthatit
wasacquired forvaluable consi­
deration ,
4.Payments onaccount .
II.Tangibleassets: II.-unchanged
1.Landandbuildings ,
2.Plantandmachinezy , i
3.Otherfixtures ,toolsand
équipaient ,
4.Payments onaccount andtangible
assetsinprocessofconstruc­
tion.C,Fixedassets C.Fixedassets
I.Intangible assets I,-unchanged
CL(3),

-12-
III.-Participating interests andother III.-unchangod
fmancial assetsr
1.Holdingsinassociated under-
takings,
2.Claimsonassociated -undertakings ,
3.Participating interests ,
4.Claimsonundertakings /with'which ,
thecompanyisassociated by
■virtueofaparticipating irt-
terest, ■
5.Securities rankingasfixed 1
assets,
6,Otherclaims,
7.O-vmshares(indicating their
nominalvalueorproportionate
value)totheextentthattho
.national lawpermits thornto"be
included inthebalanoe sheet.
DjCurrcntas3etsî Cixrrentassets
I.Stocks I.-unchanged
1.Itawandauxiliary materials ,
2.Goodsincourseofproduction
andwasteproducts .
3«Finished products andstockxn
hand,
4»Payments onaccount .
II.Debtors: II,-uncharged
(Amountsbecoming duoandpayable
withinoneyearshallheshown
separately foreachitem)
1.Claimsinrespectofsalesand
servioes rendered.

-13-
2.Claiinsonassociated undertakings
;3»Claimsonundertakings inwhich
thecompanyhasaparticipating
interest ,
4.Othcrclaims.
III,Securities formingpartofthe
currentassets,andliquidassets s
1.Holdings inassociated under-
takings,
2.Billsofexchange ,
3-.Bankbalances ,postalcheque
accountbalances ,chequesand
cashinhand,
4.Ownshares(indicating their
nominalvalueorproportionate
value)totheextentthatthe
national lawpermits themto
beincluded inthebalance
sheet,
5.Othersecurities .
D»Pre-payments .
r'.Losss
I,Fortheyear,
II.Broughtforward.
Liabilities
AmSubscribed capital
(ihesharesmustbeshownbyclasses,
indicating theirnominalvalueor
proportionate value).III.-unchanged
E.-unchanged
F,Losss
(insofarasthelossesarenot
shownunderliabilities )
I.Fortheyear,
II.Broughtforward.
Liabilities
A.–unchanged

-14-*
Baserves : B.-uncharged
I.Legalreservo,
2.Sharepremiunacoount,
3,Revaluation reserve,
4»Reserveforownshares,
5#Statutory reserves ,
6,Optionalreserves .
Valueadjustments totheextentthat
thesedonotappearamougtheassets
orinthenotesontheaccounts s
1.Onformation expenses,
2.Onintangible fixedassets,
3.Ontangiblefixedassets,
4.Onparticipating interests ana
otherfinancial assets,
5.Onstocks,
0.Onclaimsformingpartofthe
currentassets,
7.Onsecurities formingpartof
thecurrentassetsandliquid
assets.
,(Asregardsthefiguresmentioned in
items2to7>acorresponding break­
downtothatusedontheassetsside
should "beincluded).
Provisions forcontingencies and
charges :
1.Provisions forpensions andsimilar
obligations ,-
2.Provisions fortaxation including
futuretaxation ,
3.Otherprovisions ,
Creditors :
(Amountsbeooming duoandpayable
id.thinoneyear,amountsbecoming
dueandpayableaftermorethanfive
years,andamountscoveredbyC.Totalofsubscribed capitaland
reserves,lesslosses,insofar
asthesearenotshownunderassets
(theresultfortheyearandresult
broughtforward mustbeshownas
separateitems).
D.–uncharged
E.–unchanged

■15-
valualle security furnished "bythé-.'
company ,must "boshowi separately
yr.£o?'each item )
1.Debenture loans ,showing convertible
loans separately ,
L
2.Délits tocrédit institutions ,
3.Payments received onaccount -of
orders ,
4•Do"bts inrespeot ofpurchases and
services received ,
Debts represented "byhills ofex­
change ,
6,Dehts toassociated undertakings ,
7.Debts toundertakings with which
thecompany isassociated "byvirtue
ofaparticipating interest ,
8.Othor creditors .
F. Accruals F,-unchanged
G«Profits ' G. -unchanged
/
I.For theyear
II. .Brought forward . /

-16-
Article 9
A.Subscribed capital UNPAID
-ofwhichtherehas"beencalled.
B,Formation expenses insofarasthe
national lawpermits themto"be
reoorded asassets.
C.Fixedassets:
I,Intangible assets:
1.
2.Concessions ,
trademarks,patents,licences,
andsimilarrightsArticle 9
A.-unchanged
B.-unchar-god
C.-unchanged
I.-unchanged
Costofresearch anddevelopment
insofarasthenational law
permits themto"berocorded as
assets-
andvalues,iftheywere:
(a)acquiredforvaluable
consideration andare
nottoheshownunder
C1.(3),
(b)created "bytheundertaking
' itself,insofarasthe
national lawpermits them
toberecorded asassets,
3.Goodwill ,totheextentthatit
wasacquired forvaluable consi­
deration,
4»Payments onaccount.
II.Tangible assets:
1.Landandbuildings ,
2,Plantandmachinery ,
3-Otherfixtures,toolsand
equipment ,
4.Payments onaccountandtangible
assetsinprocessofconstruc­
tion.y
II.-unchanged
*••J•*»

-17-
III,Participating interests andotherIII,-unchanged
fmancial assetss
1,Holdings inassociated under­
takings,
2.Claimsonassociated undertakings ,• .-'.1
3,Participa txnginterests ,
4,Claimsonundertakings with,which
thecompanyisassociated "by
virtueofaparticipating in­
terest,
5»Securities rankingasfixed
.assets,
6,Ctherclaims,
7,Ownshares(indicating their
nominalvalueorproportionate
value)totheextentthatthe :
national lawpermits themto"be
included inthe"balancesheet,
D,Qurrontassets D.,-unchanged
..I,Stocksi I,-unchange d
1,Rawandauxiliary materials ,
2,Goodsincourseofproduction
andwasteproducts ,
3.Fmished products andstockin
hand,
4.Payments onaocount .
II,.Debtors J II,-unchanged
(Amounts "becoming dueandpayable .
-withinoneyoarmustheshown "!
separately ineachcase) <
1,Claimsinrespectofsalesand
services rendered ,

2,Claimsonassociated' under­
.takings,
3»Claimsonundertakings with
whichthecompanyisassociated
byvirtueofaparticipating
interest,
4.Otherclaims.
III,Socuritios formingpartofthe
currentassets,andliquidassets s
1,Holdings inassociated undo3>-
.takings,
2.Billsofexchange,
3.Bank .balances,postalcheque
aocount "balances ,chequesand
cashinhand,
4.Ounshares(indicating their
nominalvalueorproportionate
value)totheextentthatthe
national lawpermits themto.
"beinoludod inthe "balance
.sheet.III»–unchanged
5»Othorsecurities .
E.Pre-paymcnts
F.Debts "becoming duoandpayablein.thin
oneyear:
(Amountscoveredbyvaluablesecurity
furnished bythecompanymustbeshown
separately foreachitem)
1.Debenture loans,showingconvertible
loansseparately ,
2«Debtstocréditinstitutions ,E,–unchanged
F.,–unchanged
«■> •w1

-19-
3«Payments received onaccountof
.orders,
4«Debtsinrespectofpurchases
.andservices received ,
5«Debtsrepresented "by"billsof
exchange ,
6,Debtstoassociated undertakings ,
7.Debtstoundertakings withwhich
thecompanyisassociated "by
virtueofaparticipating
interest ,
8.Otherdebts.
G,Currentassetsinexcessofthedebts G,–unchanged
becoming dueandpayablewithinone
year.
E,Totalamountofassetitemsafter H.-unchanged
deduction ofthedebtsbecoming due
andpayablewithinoneyear.
I,Creditors foramountsbecoming dueI.-unchanged
andpayableafternorethanone
yearï
(Amountsbecoming duoandpayable
aftermorethanfiveyearsand
amountscoveredbyvaluable security
furnished bythecompanymustbe
shownseparately foreachitem)
ltDebenture loans,showingconvertible
loansseparately ,
2,Dobtstocréditinstitutions ,
3.Payments received onaccountof
orders,
4.Debtsinrespect ofpurchases and
services received ,

-20-
5.Debtsrepresented "bybillsof
exchange,
6,Debtstoassociated undertalcings ,
7.Debtstoundertakings withwhich
thecompanyisassociated by
virtuoofaparticipatif '
interest,
8.Othercreditors#
J.valueadjustmonts tothsextentthatJ.-deleted
thesedonotappearinthenoteson
theaccounts :
1.Onformation expenees,
2.Onintangiblo fixodassets,
3.Ontangiblofixedassots, ' , '
4»Onparticipating interests and
otherfinancial assets,
5»Onstocks. ,
6,Onclaimsinrespectofcurrent
assets,
7«Onsecurities formingpartcftho
currentassetsandliquidassets.
(Asregardsthofiguresmentionedin
items2to7}acorresponding break­
downtothatusedunder CandD '
shouldbeincluded) l
K.Provisions forcontingencies and J.#Provisions forcontingencies and
charges : charges
1.Provisions forpensions and 1to3-unchanged
similarobligations ,
2»Provisions fortaxation ,
including futuretaxation,
3»Otherprovisions »
L,Accruals . K.Accruals .

-21-
M.Subscribed capital. L.Subscribed capital
–unchanged (Thesharesmustbeshewnbyclasses,
indicating theirnominal'valueor
proportionate value)
ÏT.Réserves ! M*Réserves î
1.Légalreserve. 1too*•.unchanged
2»Sharepremiuinaccount,
3.Revaluation reserve,
4«Reserveforownsharos,
5.Statutory reserves,
6,Optional reserves ,
C.Resultfortheyear, IT,Resultfortheyear.
P,Results ,broughtforward. 0.Resultsbroughtforward.

-22-
i
Article 10 Article 10
1.Tnoreacomponent ofthoassetsor-unchanged
liabilities pertains toseveralitemsin
thebalanoesheet,itsrelationship to
otheritemsshall "beindicated either
undertheitemwhoreitappearsorin
thenotesontheaccounts,unlesssuch
indication isnotessential "tothe
comprehension oftheannualaccounts .
2,Ownsharesandholdings in
assooiaiod undertakings shall "beshown
onlyundertheitemrespectively that
relates thereto.
Article 11 Article 11
Alloommitmont3 "bywayofguarantee -unchanged
ofanykindenteredintoforaccountof
thirdpartiesshall,ifthereisno
obligation toshowthemunderliabilities ,
beclearlysotoutbelowthobalancesheet
orinthonotesontheaccounts,distinguish­
ingbotwoon thovarioustypesofguarantee
whichthonational lawrecognizes ,and
specifying whatvaluable security,if
any,hasbeenprovided .Commitments of
thiskindexisting inrespectofassociated
undertakings shallbeshownseparately *

-23-
SECTICŒT 4
Special provisions relating to
certain items inthe "balance sheet
Article 12
1. Whether particular assets are
toboclassified asfixed assets or
current assets shall depend upon the
purpose forwhich they areintended ,
2. Fixed assets shall comprise those
elements which are intended to "beused
onacontinuing "basis toenable the
undertaking tooperate ,
3.(a)Movements inthevarious item3
offixed assets shall beshown inthe
balanoo shoot orinthe notes onthe
accounts *Tothis end there shall bo
shown ,starting with theinitial
purchase prioo orproduction cost ,
soparately for each oftheitems of
fixed assets ,onthe onehand the
additions ,disposals ,transfers and
upward corrections during theyear ,
and onthe other hand the cumulative
valuo adjustments asatthedate of
thebalance sheet .Ifthevaluo adjust­
ments are indicated inthe balance sheet
they nayboshown under either assets or
liabilities .
(b)TChoro atthetime thefirst annual
accounts arc drawn upinaccordance withSECTION 4 .
Special provisions relating to
certain items inthebalance sheet
Article 12
1, –unchanged
2, -unchanged
3,(a)Movements inthevarious items
offixed assets shall boshown inthe
balance sheet orinthe .notes cnthe
accounts .Tothis end there shall be
shown ,starting with thepurchase
price crproduction cost ,
separately for each oftheitems of
fixed -assets ,ontheonehand the
additions ,disposals ,transfers and
upward corrections during theyear ,
and onthe other hand the cumulative
value adjustments asatthe date of
thebalance sheet ,Valuo adjustments
shall beshown either inthe balance
sheet ,asacloar deduction from the
relevant item ,crinthenotes onthe
accounts ,
(b)-unchanged

24 -
this Directive ,thopurchase price or
production cost ofanelement offixed
assets .cani-ot bo ..detormined without
untoward expense ordelay ,theresidual
value attho "beginning oftheyear may
betreated asthopurchase prioe or .
produotion cost .Anyuse made ofthis ■
provision must "bementioned inthe
notes onthoaccounts ,,
(o)Inthocase ofapplication of (o)-unchanged
Articles 30and31ofthis Directive ,
thopresentation ofthemovements in
thevarious items offixed assosts
referred tounder (a)shall he
supplemented "byseparate mention ,for
each ofthovarious items ,ofthe •
cumulative amounts atthe date ofthe
balanoe sheet ,ontheonehand ofthe .
differences referred toinArticle 30
(2)andinArticle 31(2),andontho
other hand ofthe additional value
adjustments .
4»(a)Movements inthevarious items' 4.(a)Movements inthevarious items
ofcurrent assets shall bepresented ofcurrent assets shall bepresented
inthebalance sheet orthe notos on inthebalanoe sheet orthe notes on
theaccounts .Tothis end there shall theaccounts .Tothis end there shall
bosho*m ,separately foreach oftho beshown ,separately for'each ofthe
items ofcurrent assets ,ontheono items ofcurrent assets ,ontheone
hand thopurchase price orproduction hand thepurchase prioe orproduction
cost oftheelements shown inthe t cost oftheelements shown inthe
balance sheet ,andontheother hand balance sheet ,andontheother hand
thevalue adjustments .Ifthevalue thevalue adjustments .Value adjust -
adjustmonts areindicated inthe ments shall beshown either inthe
balance shoot they nayb'sshorn undenr balance sheet ,asaclear deduction
either assets orliabilities . from the relevant item ,orinthe
•notes onthe accounts .(o)-unchanged
4.(a)Movements inthevarious items
ofcurrent assets shall bepresented
inthebalanoe sheet orthe notes on
theaccounts .Tothis end there shall
beshown ,separately for'each ofthe
items ofcurrent assets ,ontheone

(h)Theprovisions ofparagraph 3(o)
shallapplytothepresentation ofthe
itemrelating tostocks.
5.Theprovisions ofparagraph 3(a)
and("b)shallapplytothepresentation
ofthoitem"formation expenses "*25~~■
(h)–unchanged .
5*'–unchanged

-26-
Article 13 Article 13
Undertheitem"landandbuildings "-unchanged
shall "boshownlandnot "builtonaswell
astheland "builtonandthebuildings
thereon,.together withfixtures and
fittings .
wherenational lawauthorizes the
inclusion underassetsofrightsinreal
estatewhichareoflikenaturetorights
ofownership ,theyshall "beincluded
undertheitem"landand "buildings ".
Article 14 Article 14
Theterm"participating interests ".'-unchanged
isusedinthisDirective tomeanrights
inthecapitalofotherundertakings ,
whetherornotrepresented "bycertificates
which "bycreating adurablelinkwith
them,areintended tocontribute tothe
activities ofthecompany.Aholdingof
10°/oofthesubscribed capitalofanother
undertalcingshallbepresumed to
oonstitute aparticipating interest.

-27-
Under"Pre~payments "on..the
assetssideshall "beshewnexpenditure
incurred duringtheyearhutrelating
toasubsequent year,together with
theearningsrelating totheyearto
thoextentthattheywillnothe
rcoeived untilafterthecloseofthe
year.Thelatter,however,nayalsohe
shownunderdebtors .Article •15
Under"Pre-payments "onthe
assetssideshallhoshownexpenditure
incurred duringtheyearhutrelating
toasubsequent year,together with
theearningsrelating totheyearto
theextentthattheywillnotbe-
receiveduntilafterthecloseofthe
year.Thelatter,however,mayalsobe
shownunderdebtors.Wheretheamount
involvedisconsiderable ,anexplanation
mustbegiveninthenote3onthe
accounts .

-28-
Article 16 Article 16
Thevaluoadjustments aroadjust- unchangod
menfitemsrelating toelements ofassets
andarointended totakeaccount of
depreciation established inrespectof
those .olonents atthedateofthe "balance
andchargesareintended tocovereither
thecertaincostofmajormaintenance
workorofmajorrepairs -which -willho
1incurredinthecourseofsubsequent
yoars,orlossesorchargesthenature
ofwhichisclearlydefined "butwhich
atthedateofthe "balance sheetaro
eitherlikelyto"beincurrod,orare
oortain to"boincurred "butare
indotemiinate astoamountorasto
thedateonwhichtheywillarise#
Theprovisions forcontingencies
andchargosshallnot "beusedtoadjust
thevalueofelements ofassets.shoot,whetherthatdepreciation is
dofirifcive ornot.
Article 17
Eheprovisions forcontingencies unchangedArticle 17

-29-
Articlo 18
Under"Accruals "onthe
liabilitios sideshall "beshown
incomerecoived befoyethedateof
*the"balancesheet "butattributable
toasubsequent year,together with
chargeswhich,thoughrelating tothe
yearinquQstion,willonlybopaid
inthecourseofasubsequent year.
latter,however,mayalso "beshown
undercreditors .Article 18
Under"Accruals "onthe
.liabilities sideshallboshown
incomereceived beforethedateof
thobalance sheetbutattributablo
toasubsequent year,togother with
chargeswhich,thoughrelating totho
yearinquestion,willonlybepaid
Inthoocureeofasubsequent year.
Tholatter,however,nayalsobeshown
undercreditors .Whorethoamount
involvedisconsiderable ,anexplana­
tionmustbegiveninthonoteson
thoaccounts .
#••/••#

-30-
SECTION 5 SECTION 5
Lay-outoftheProfit
andLossaccountLay-outoftheProfit
.andLossAccount
Article 19 Article 19
Forthepresentation oftheprofit –unchanged
andlossaccount,theMemberStatesshall
adoptintotheirlawsthelay-outs
appearing inArticles 20to23ofthis
Directive ,andshallleavethocompanies
toohoose "between them.
/

31-
Article 20 Article 20 .*
I.Operatingresult(excluding anyearningsX;-«unchanged
andchargesshownunderII)* ■\.•
1.Netturnover, 1to5>-unchanged
2.Changesinstooksoffinished and
semi-finished products ,
3.Workeffected "bytheundertaking ".
foritsownaccount andshown
.underassets,
4«Otheroperating receipts,
5.Costofrawandauxiliary -matorials ,
6β οο3ΐ;β· 6#5Ί)αίίοοδΐβί ,ιΛ
(d)Wagesandsalaries,
v (h)Compulsory socialsocurity
costs,
(c)Othersocialsecurity .cost^
showingas,.aseparate item
thoserelating toold-ago
pensions .
7.(a)Yalueadjustments inrespectof 7"t°9»«""unchanged
formation expansés andof.
tangible andintangible fixed
assets,
(b)Valueadjustments inrespectof
olements ofcurrentassets, '''
8«Otheroperating expenses,
• »
9.Operating resuit.
I.Financial result:. xl»~unchanged
10«Earnings fromparticipating interests ,
showingseparately thosederived from ."
associated undertakings ,
11,Earnings fromothersecurities and -
fromclaimsformingpartofthe
fixedassets,showingseparately
thosederived fromassociated under­
takings.
•••/•»«

-i12-
«•>'■'
12,Otherinterest -andsimilar
earnings ,showingseparately
thosederived fromassociated
undertakings ,;•
13.Valueadjustments inrespect
ofparticipating interests and
otherfinancial assetsandof
securities formingpartofthe
currentassets,
14*Ihterest andsimilarcharges, .,
showingseparately thosecon­
cerningassociated undertakings ,
15»Financial resuit »
III.Exceptional result III.-unchanged
16.Exceptional earnings , 16to18.,-unchanged
17»Exceptional charges,
18.Exceptional resuit,
19.Sub-total . 19.-deleted
IV.Sub-total .
IV.Taxes:
20.Taxesontheresuit:v.Taxes:
19.Taxesontheresult:
-actual,
-future,-actual,
-future,
21.Othertaxesnotshownunder
I,IIorIIIabove.20.Othertaxesnotshownunder
I,IIorIIIabove.
V.Resuitfortheyear. VIoResultfortheyear.
•'./•.•

Article 21 Article 21
Charges A.-unchanged
I.Operating expenses (excluding I,-unchanged
enyshownunderII):
laReduction inthestockof 1and2.-unchanged
finished andsemi-finished
products ,
2.Costofrawandauxiliary ■
materials -
3aStaffcosts, , 3.Staffcosts:
a)Wagesandsalaries,
b)Compulsorysocial
security costs.
c)Othersocialsecurity
costs,showingasa
separate itemthoserelet-
tingtooldagepensions ,
4®a)Valueadjustments in 4and5«-unchanged
respectofformation
expenses andoftangible
andintangible fixed
assets,
b)Valueadjustments in
respectofelements of
■currentassets,
5«Otheroperating expenses.
II«Financial charges: II«-unchanged
1»Valueadjustments inrespect
ofparticipating interests >
andotherfinancial assets ■* .
andofsecurities forming
partofthecurrentassets,
2aInterest andsimilar char­
ges,showingseparately those
concerning associated under­
takings a
III»Exceptional chargesa III«-unchanged

-34-
IV.Tnxes: IV.-unchanged
1.Taxesontheresuit:
-actual,
i-future,
2.Othertaxesnotshownunder
I,IIandIIIabove.
V.Resultfortheyear. V.-unchanged
B.Receipts B.Receipts
ImOperatingreceipts (excluding I.-unchanged
anyshovmunderII):
1.Netturnover ,
2.Increase instocksoffini­
shedandsemi-finished pro­
ducts,
3.Workeffected "bytheunder­
takingforitsownaccount
andshownunderassets,
4»Otheroperating receipts.
II.Financial earnings : II.-unchanged
1.Earnings fromparticipating .
interests ,showingsepara­
telythosederivedfromasso­
ciatedundertakings ,
2.Earnings fromothersecuri­
tiesandfromclaimsforming
partofthefixedassets,
showingseparately thosede­
rivedfromassociated under­
takings,

3*Or,herinterest andsimilar
earrings ,showingseywrately
thosedarived fromassociated
unclerialcings.
Ill#Exceptional earnings.
IV.Resuitfortheyear.III.-unchanged
IV,-unchanged

Article 22 Article 22
I.Operatingresult(excluding anyI.-unchanged
earnings andcharges shownunder
II):
1»Netturnover ,
2.Production costsofoutputsup­
pliedandmaking-up theturnover
(including valueadjustments ),
3»Grossresultachieved from
turnover ,
4»Distribution expenses (inclu­
dingvalueadjustments ),
5.Administrative expenses (inclu­
dingvalueadjustments ),
6«Otheroperating receipts ,
7«Operating resuit.
II.Financial result; II.-unchanged
8*Earnings fromparticipating in­
terests,showingseparately
thosederived fromassociated
undertakings ,
9«Earnings fromothersecurities
andfromclaimsformingpart
ofthefixedassets,showing
separately thosederived from
associated untertakings ,
10.Otherinterest andsimilar
earnings ,showingseparately
thosederived fromassociated
undertakings ,
11.Valueadjustments inrespect
ofparticipating interests and
otherfinancial fixedassets
andofsecurities formingpart
ofthecurrentassets,
•••/•••

37-
12#Interest andsimilar charges ,
showing separately those con­
cerning associated underta­
kings ,
13»Financial resuit .
III .Exceotional resuit :
14.Exceptional earnings ,
15.Exceptional charges ,
16.Exceptional result ,
17»Sub-total .
TV.Taxes :
18.Taxes onthe resuit :
-actual ,
-future ,
ly.Other taxe3 not shown under
I,IIorIIIabove .
V.Resuit fortheyear .III .-unchanged
14to16.-unchanged
17.-deleted
IV.Sub-total »
V.Taxes :
17.Taxes ontheresuit :
-actual ,
-future ,
18.Other taxes not shown -under
I,IIorIIIabove .. '
/
VI.Resuit fortheyear .
•o/•••

-38-
Artxcle 23 " Article 23
A'Chax^s •'-unchanged
I.Operating expenses (excluding
anyshown under II);
V
1».Production costs ofoutput
supplied andmaking-up the
turnover (including value
adjustments ),
1 i
2.Distribution expenses
(including value adjust­
ments ), ....
3»Administrative expenses
(including value adjust­
ments ),
II*Financial charges ?
1.Value adjustments inrespect
ofparticipating interests
andother financial fixed
assets and ofsecurities
forming part ofthecurrent
assets ,
2#Interest andsimilar charges ,
showing separately those
concerning associated under­
takings .
III.Exceptional charges .
Xv.Taxes :
1.Taxes ontheresuit :
1,-actual ,
–future ,
2#Other taxes notshown under
I,IIorIIIabove .
V.Result fortheyear .

-39-
B.Receipts
I*Operatingreceipts (exclu-
.dinganyshownunderII):
1.Eetturnover ,
2.Otheroperating receipts.
II.Financial earnings :
1.Earnings fromparticipating
interests ,showingseparately
thosederived fromassocia­
tedundertakings ,
2.Earnings fromothersecu­
ritiesandfromclaimsfor­
mingpartofthefixed
assets,showingseparately
thosederived fromassocia­
tedundertakings ,
3.Otherinterest andsimilar
earnings ,showingseparately
thosederived fromasso­
ciatedundertakings .
III.Exceptional earnings.
IV»Resuitfortheyear»
••*/•••

-40-
Article 24 Article 24
TheMemberStatesmayauthorize
companies forwhichatthedateof
the "balance sheet:TheMemberStatesmayautorize
companies forwhichatthedateof
thebalance sheet:1
-thebalance sheettotalreduced
bythevalueadjustments ,ifthese
areenteredunderliabilities ,does
notexceedonemillionunitsofac­
count,
-thenetturnover doesnotexceed ■
twomillionunitsofaccount,
-theaveragenumberofemployees ■
duringtheyeardidnotexceedone
hundred,
toadoptlay-outsdifferent from •j
thoseappearing inArticles 20to
23ofthisDirective withinthe
foilox-iinglimits:
a)inArticle20,underI,items1
to5inclusive maybegroupedtogether
underoneitemcalledGrossresult;
b)inArticle21,itemsAX,1and
2,andBI,1to4inclusive maybe
groupedtogether underoneitemcal­
ledGrossearnings orGrosscharges
asthecasemaybe;
c)inArticle22,underI,items1,
2,3and6maybegroupedtogether
underoneitemcalledGrossresult;
d)inArticle23fitemsAI,1and
BI,1and2,maybegroupedtogether
underoneitemcalledGrossearnings or
Grosschargesaathecasemaybe.-thebalance sheettotaldoesnot
exceedonemillionunitsofaccount,
-unchanged
-unchanged
-unchanged
•*•/•••

-41-
I?subsequently anyoneofthe
numerical limitssetoutaboveis
exceeded ,theexemptions provided
forinthisprovision mayagainbe
appliedonlyifalltheconditions
specified abovearesatisfied for
twoconsecutive years.
Theamounts inunitsofaccount
specified inthisprovision mayvary
bynotmoretanlOfoupordownfor
purposes ofconversion intonational
currencies#-unchanged
-unchanged

42-
SECTIOiT 6 SECTION 6
Specialprovisions relating
tocertain itemsinthe
profitandlossaccount
Article 25
Thenetamountofturnover in­
cludesreceipts fromsalesofproducts ,
goodsandservicesfallingwithinthe
usualoperations ofthecompany,after
allowingforanyprice-reduction in
respectofthosesales,andforvalue-
addedtaxandothertaxesdirectly
tiedtotheturnover .Specialprovisions relating
tocertain itemsinthe
profitandlossaccount
Article 25
-unchanged
Article 26
1.UndertheitemsExceptional
earnings andExceptional charges,
shallheshownearnings andcharges
thatareattributable toanotheryear,
together withanyearnings andcharges
thatdonotariseoutoftheusual
operations oftheundertaking#
2»Unlesssuchearnings andcharges
areofnoimportance intheassessment
oftheresults,explanations oftheir
amountandnatureshallbegivenin
thenotesontheaccounts .Article 26
unchanged
Article 27 Article 2?
UndertheitemTaxesontheResult -unchanged
shallbeshowntheactualamountof
taxespayablefortheyear,andsepa­
rately,theamountofthefuturelia­
bilitytotax.

-43-
SECTION 7
Valuation rules
Article 28
1,TheIlemberStatesshallensure
thfcitthevaluation oftheitemsshown
intheannualaccounts ismadeinac­
cordance withthe.following general -
principles :-
a)Themethods ,ofvaluation may
not"bechangedfrom ,oneyearto
another. . ^
b)Onlytheprofitsearnedatthe
dateofthebalancesheetmaybein­
cludedinit;accountshallneverthe­
lessbetakenofallcontingencies
foreseeable atthatdate,
c)Accountshallbetakenofany
deficiencies thatdonotbecomeap­
parentuntilafterthedateofthe
balancesheet,butbeforeitis
drawnup,iftheyaroseinthecourse
oftheyeartowhichtheannualac­
countsrelate.SECTIOÏT 7
Valuation rules
Article .28
1.-unchanged
a)Thecompanyshallbepresumed
tocontinue .itsbusiness asagoing
concern .
b)Themethodsofvaluation maynot
bochangedfromoneyeartoanother.
c)Valuation mustbemadeon.aconser­
vativebasis,anqLinparticular :
aa)Onlytheprofitsearnedatthe
dateofthebalancesheetmaybe
included init;accountshall
nevertheless betakenofallcon-'
tingencies foreseeable atthat
date.
bb)Accountshallbetakenofany
deficiencies thatdonotbecome
apparentuntilafterthedateof
thebalancesheet,butwhichdo
becomeapparent beforeitisdrawn
up,iftheyariseinthecourseof
theyeartowhichtheannualac­
countsrelate.
cc)Accountshallbetakenofany
depreciation ,whethertheyear
closeswithalossorwitha
profit.
D/••*

T44-
d)Accountshall "betakenofany
depreciation ,whethertheyearcloses
withalossorwithaprofit#
e)Thecomponents oftheassetand
liability itensshall "bevaluedsepa­
rately.
f)Thebalancesheetattheclose
ofoneyearshallcorrespond tothe
openingbalancesheetforthefollo­
wingyear.d)Accountshallbetakenofearnings
andchargesarisingduringtheyear
towhichtheaccountsrelate,irrespec­
tive .ofthedateoforreceiptof
paymentofsuch,earnings orcharges.
e)Thecomponents oftheassetand
liability itensshallbevaluedsepa­
rately.
f)Theopeningbalancesheetfor
eachyearshallcorrespond tothe
closingbalancesheetfortheprece-
.dingyear.
2.Departures fromthesegeneral
principles shallbepermitted in
exceptional cases.Wheretheyare
departed from,anindication thereof
shallbegiveninthenote3onthe
accountstogether withanexplanation
ofthereasons andanassessment of
theeffectontheassets,liabilities ,
financial position andresult.' \.2.-unchanged

The valuation ,ofthe items -unchanged .
shown inthe annual accounts shall
hemade inaccordance with Articles
32to39ofthis Directive ,based ,on
purchase price orproduction cost .

/
-46-
Article 30
1.Notwithstanding theprovisions
ofArticle29ofthisDirective ,the
MemberStates ,mayauthorize valuation
onthebasisofreplacement valuefor
tangible fixedassetswithalimited
usefullife,andforstocks.
Theyshallmakeprovision that
incaseswherethismethodisemployed
anindication thereofshallbegiven
inthenotesontheaccounts ,speci­
fyingtheitemsconcerned ,andthat
theuseofthatmethodisjustified
asregardsthevalueshown.Article 30
1.Notwithstanding theprovisions
ofarticle29ofthisDirective ,the
MemberStatesmayauthorise :
a)fortangiblefixedassetswitha
limitedusefullifeandforstocks,
valuation bythereplacement value
method;and
b)fortangiblefixedassets,for
participating interests andother
financial assetsandforstocks,
valuation bymethodsotherthan
thatmentioned inparagraph a)and
whichtakeintoaccountcurrent
values.
Wheresuchauthorization isgiven
andisimplemented ,anindication
thereofshallbegiveninthenotes
ontheaccounts ,specifying theba­
lancesheetorprofitandlossaccount
itemsconcerned ,andthemethodby
whichthevalueshowniscalculated .
2.Whereparagraph 1isappliedthe
amountofthedifference invaluation
onthebasisofreplacement valueand
valuation inaccordance withthege­
neralrulecontained inArticle 29
shallbeshownunderliabilities in
theitemRevaluation Reserve.This
itemshallbesub-divided into:2.Whereparagraph 1isapplied,the
amountofthedifference between valua­
tionbythereplacement valuemethod
orothermethodasaforesaid an$
valuation inaccordance withthegeneral
rulecontained inArticle 29shallbe
shownunderliabilities in.theitem
Revaluation Reserve,withanyfuture
taxationbeingshownclearlyasade­
duction.Thisitemshallbesub-divided
into:

-47-
-Reservefortangible fixedassets,
-Reserveforstocks.
3.TheRevaluation reserve maybe
capitalized atanytime.
4*TheRevaluation ,reserveshallbe
reducedtothe;extentthattheamounts
transferred theretoarenolongerre­
quiredforthepurposeofreplacement
oftheassetitemsconcerned .The'
amountsinquestionshallbeaddedto
theresultfortheyear.Theyshall
beshownseparately intheprofit
andlossaccount.
5.Saveasprovided inparagraphs
3and4"theRevaluation reserveshall
notbereduced.
6mThevalueadjustments shallbe
calculated eachyearonthebasisof
thereplacement valueadoptedforthe
yearinquestion.-Reservefortangible fixedassets,
-Reserveforparticipating interests
andotherfinancial assets,
-Reserveforstocks.
3•-unchanged
I:
4*TheRevaluation reserveshallbe
reducedtotheextentthattheamounts
transferred theretoarenolongerneces­
sarytomaintainthepotential ofthe
undertaking .-Theamountsinquestion
shallbeaddedtotheresultTorthe
year.Theyshallbeshownseparately
inthe'profitaridlossaccount.
5.•-unchanged - •1
6.Valueadjustments -shallbecalcu­
latedeachyearonthebasisofthe "
valueshownfortheyearin*question..

-48-
Artide 31 Artide 31
1«ITotvd.thstan.ding Article29of1*notwithstanding theprovisions of
thisDirective theMemberStatesmayArticle29ofthisDirective ,theMember
authorize revaluation ofthetangible Statesmayauthorize revaluation ofthe
fixedassetsandtheparticipating tangible fixedassets,participating
interests andotherfinancial assets,interests andotherfinancial assets.
Theyshallmaleprovision that Wheresuchauthorization isgiven
incaseswhere^evaluation takesplaceandisimplemented ,anindication
anindication thereofshallbegiventhereofshallbegiveninthenoteson
inthenotesontheaccounts ,speci-theaccountsspecifying thebalance
fyingtheitemsconcerned andthat sheetorprofitandlossaccountitems
themakingoftherevaluation is concerned,' andthemethodbywhichthe
justified asregardsthevalueshown,valueshowniscalculated .
2.In.theeventofparagraph 1being2..-unchanged
applied,theamountpfthedifference
invaluation madeinaccordance with
paragraph 1aboveandthevaluation
madeinaccordance withthegeneral
rulecontained inArticle29shallbe
shownunderliabilities intheReva^-
luationReserve.Thisitemshallbe
sub-divided into:
-Reservefortangiblefixedassets.
-Reserveforparticipating interests
andotherfinancial assets.
3.TheRevaluation reserve maybe3.-unchanged
capitalized atanytine.

-49-
4«TheRevaluation -reserve -shall 4*
"L>ereducedtotheextentthatthe
increases invalueconcerned have
beenactuallyrealised.Theamounts
inquestion shallbeaddedtothere­
sultfortheyear.Theyshallbo
cho:mseparately in.the.profit–and
Ices-acc-ouni ;»---unchanged
0*oaveasprovided inparagraphs
3arid4"theRevaluation reserveshall
notbereduced.5--unchanged

-.50-
Article 32 . ■Article 32
1.a)Wherethenationallawautho--unchanged
rizestheinclusion offormation
expenses underassets,theyshall
bewrittenoffoveramaximumperiod
offiveyears.
b)Insofarastheformation
expenses havenotbeencompletely
writtenoff,nodistribution ofpro­
fitsshalltakeplaceunlessthe
amountoftheoptional reservesis
atleastecmaltotheamountofthe
expenses notwrittenoff.
2#Theamountsentered underthis
itemshallbeexplained inthenotes
ontheaccounts .
•O•/•••

-51-
Aiticle33.-
1.a).Theitemsoffixedassets
shallTwithoutprejudicetothepro­
visionsofb)andc)below,bevalued
atpiuxjtiase -priceorproduction cost.
b)Thepurchasepricecrproduc­
tioncostoftheitemsoffixedassets
whichhavealimitedusefullifeshall
bereducedbyvalueadjustments calcu­
latedc.cccrding toamethodthatsa­
tisfiestherequirements ofgoodma­
nagement •
c)-aa)Valueadjustments may
bemadeinrespectoftheitemsof
fixedassets,whetherornottheir
usefullifeislimited,sothatthey
arevaluedatthelowestfigureattri­
butabletothematthedateofthe
balance sheet.
-bb)Valueadjustments shall
bemadeifthedepreciation invalue
isexpectedtobepermanent ."Article 33
1*a)-unchanged
b)-unchanged
c)-aa)Valueadjustments may
bemadeinrespectoftheparticipating
interests andotherfinancial interests ,
sothattheyarevaluedatthelowest
figuretobeattributed totheniat
thedateofthebalancesheet.
-bb)Valueadjustments shall
bemadeinrespectoftheitemsof
fixedassets,whetherornottheir
usefullifeislimited,sothatthey
arevaluedatthelowestfiguretobe
attributed tothematthedateofthe
balancesheet,ifitisexpectedthat
thedepreciation invaluewillbe
permanent .
*•©/»••

-.5?-
-cc)--orchanged
-dd/-unchanged–cc)Thevalueadjustments
referredtoinaa)andbb)'shallbe
shownseparately intheprofitand
Iocsaccount orinthenotesonthe
accounts .
-dd)Valuation atthelowest
valueprovidedforinaa)andbb)shall
bediscontinued ifthereasonsfor
whichthevalueadjustments weremade
haveceasedtoapply.
[
d)Iftheitemsoffixedassets d)Iftheiterasoffixedassets
arethesubjectofexceptional valuearethesubjectofexceptional value
adjustments underfiscal .law,the adjustments solelyforthepurposeof
amountoftheadjustments shallbefiscallaw,theamountoftheadjust-
indicated inthenotesontheaccounts.mentsandthereasonsformakingthem,
together withtherelevant futuretaxa­
tion,shallbeindicated inthenotes
ontheaccounts.d)Iftheitemsoffixedassets
arethesubjectofexceptional value
adjustments solelyforthepurposeof
fiscallaw,theamountoftheadjust-
2.Thepurchasepriceshallbecal-2.
culatedbyaddingtothepricepaid
theezpensesincidental thereto.-unchanged
3.a)Theproduction costshc.llbe3<
calculated byaddingtothepurchase
priceoftherawandauxiliary mate­
rialsthemanufacturnngcostsdirectly
attributable totheproductinquestion.
b)Areasonable proportion ofthea)-unchanged
b)Areasonable proportion ofthe
manufacturing costswhichareonlyin–manufacturing costswhichareonlyin­
directly ,attributable totheproduct
inquestion maybeaddedtothepro­
ductioncosttotheextentthatthey
relatetotheperiodofmanufacture .
c)Costsofdistribution shall
notbeincludedinproduction cost.directlyattribuaole totheproduct
inquestionshallbeaddedtothepro­
ductioncoststotheextentthatthey
relatetotheperiodofmanufacture .
c)-unchanged
•••/•••

-53-
4.a)TheMemberStatesmayautho­
rizetheinclusion inproduction cost
ofinterest oncapitalborrowed to
financethemanufacture offixedas­
setstotheexrtentthatitrelates
totheperiodofsuchmanufacture .In
thateventtheyshallmakeprovision
foranindication tobegiveninthe
notesontheaccounts thatsuchinte­
restisincluded underassets.
b)TLeymayalsoauthorize the
inclusion intheproduotion costof
interest onowncapitalutilized for
thepurposecffinancing themanufac­
tureoffixedassetstotheextent
thatitrelatestotheperiodofsuch
canufacture.j Inthateventtheyshall
makeprovision fortheamountthereof
tobeshowninthenotesontheac­
counts.4«Interest oncapitalborrowedto
finance themanufacture offixedas­
setsmaybeincluded inproduction
costtotheextentthatitrelates
totheperiodofmanufacture .In
thatevent,anindication shallbe
giveninthenotesontheaccounts
thatsuchinterest isincluded under
assets. ■■ ■
b)-deleted
•••/•••

-54-
unchpjif-ced
2.Article32(l)(a)shallapplyto
itemCI3tinderArticles 8and9.
Article 35
Tangiblefixedassets,rawand
auxiliary materials ,whichareconstant­
lybeingreplaced andofwhichthe
overallvalueisofsecondary importance
totheundertaking maybeshownunder
assetsatafixedquantity andvalue,
ifthequantity ,valueandcomposition
thereofdonotvaryappreciably .Artikel 34
'» +
1.Article 32of.thisdirective shall
applytotheitem"Costofresearch and
development ".
-imchm^ei

-55-
Article 36
1.a)Theitemsofcurrentassetsshall
bevaluedatpurchase priceorproduc­
tioncost,withoutprejudice tothepro­
visionsof(b)and(c)below.
b)Vr-lueadjustments shallbemade
inrespectoftheitemsofcurrentas­
setssothattheyarevaluedatthe
lowestfigureattributable tothemat
thedateofthebalance sheet.
c)TheKeraberStatesmayauthorize
exceptional valueadjustments if,on
thebasisofareasonable commercial
assessment ,thesearenecessary sothat
tlievaluation oftheseitemsdoesnot
havetobomodified inthenearfuture
because offluctuations invalue.The
amountofthesevalueadjustments shall
beshownseparately intheprofitand
lossaccount orinthenote3onthe
accounts ,
d)Valuation atthelowestvalue
providedforinb)andc)shallbe
discontinued ifthereasonsforwhich
thevalueadjustments weremadehave
ceasedtoaoply.Article 36
a)unchanged
b)unchanged
c)unchanged
d)unchanged

-56-
e)Iftheitemsofcurrentassets
arethesubjectofexceptional value
adjustments underfiscallaw,the
amountoftheadjustments shallbein­
dicatedinthenotesontheaccounts .e)Iftheitemsofcurrentassets
arethesubjectofexceptional vr.lue
adjustments solelyforthepurposeof
fiscallaxr,theamountoftheadjust­
mentsandthereasonsformaking
them,together withtherelevant fu­
turetaxation ,shallbeindicated in
thenotesontheaccounts .
2.Thedefinitions ofpurchaseprice2.
andofproduction costcontained inAr­
ticle33(2)to(4)shallapply.-unchanged

-57-
Article 37 Article 37
Thepurchase price orproduction 1.-unchanged
cost ofstocks ofgoods inthe same
category msyalso becalculated either
onthebasis ofweighted average prices
orbythe ,;First in-First out"(Fifo )
method orLast in-first out ;i(Lifo )
method ,orsome similar method .
2. Where the value shown inthe
balance sheet asaresult ofthe
method used differs considerably
from the value onthe basis ofthe
actual purchase price ,thedifference
shall beindicated inthe notes on
the accounts­

-58-
Article 3° Article 38
1.Wheretheamountofanydebtre­
payableisgreaterthantheamount
received ,thedifference maybeshown
asonasset.Itshallbeshownsepara­
telyinthebalancesheetorinthe
notesontheaccounts .unchanged
2.Theamountofsuchdifference shall
bewrittenoffnotlaterthanthetime
whenrepayment ofthedebtismade.
Article 39
Provisions forcontingencies and
chargesshallnotexceedinamountthe
sumswhichareasonable businessman would
consider necessary .Article 39
unchanged
Theprovisions showninthebalance
sheetundertheitem'Otherprovisions "
shallbespecified inthenotesonthe
accountsiftheyareatallsubstantial .

-59-
SECTION 8
Contents ofthenotes
ontheaccounts
/
Article âOSECTION 8
Contents ofthenotes
ontheaccounts
Article40
Thenotesontheaccounts shall
containcommentary onthebalance
sheetandprofitandlossaccount
insuchmannerastogiveastrueand
fairaviewaspossible ofthecompa­
ny'sassets,liabilities ,'financial
position andresults.Thenotesontheaccounts shall
contain commentary onthebalance
sheetandprofit -andlossaccountin
suchmannerastogiveatrueand 1
fairviewofthecompany'sassets,
liabilities ,financial position and
results.

Article 41 Article 41
Inaddition "tothe information
required under other provisions of
this Directive ,thenotes ontheac­
counts shall set out inforuation in
respect ofthefollowing matters in
anyevent :
1*Thevaluation methods applied
tothe various items inthe annual
accounts ,andthemethods employed
incalculating thevalue adjustments;'-unchanged
1» .Thevaluation methods applied to
thevarious items intheannual accounts ,
andthemethods employed incalcula­
ting thevalue adjustments .For foreign
currency debtors andcreditors ,the
method used forcalculating therate
ofexchange must "beshown ;
2, The name and head office address 2,
ofeach oftheundertakings inwhioh
thecompany holds atleast 10^ofthe
capital ,showing theproportion of
thecapital held andtheamount ofthe
subscribed capital ,theamount ofthe
reserves and the resuls for the latest
business year oftheundertaking
concerned 4-unchanged
3.Thewayinwhich theauthorized
capital hasbeen employed ,ifany
such capital hasbeen created ;3.-unchanged
4.Whether ,there areanyentitle - 4«-unchanged
ments carrying theright toashare
ofprofits ,andwhether there areany
convertible debentures orsimilar se­
curities orrights ,specifying thenum­
berthereof andwhat rights they confer ;
5.Theoverall amount ofthefinan -5«
cial commitments that are not shown in
thebalance sheet ,insofarasthis-unchanged

61–
information isofassistance inasses-.
singthefinancial position.Commit-... •".
mentsexisting withregardtoassocia­
tedundertakings shallbeshownsepa- "
rately: ,
-new .*6mThenetamountofturnover within
6.Thewholeofthepersonnel costs7*Thenumberofpersons .employed
relatingtotheaccounting periodun-duringtheyear,"brokendownbycate-
lesstheyareshownseparately inthegoriesand,iftheyarenotshownse-
7.Thetaxesincludedintheopera-8.Thetaxesincludedintheopera­
tingresult,thefinancial resultortingresult,thefinancial resultorthemeaningofArticle25ofthisDi­
rective ,brokendownbycategories of
products andactivities andbygeogra­
phicalmarkets.Theamountcontributed
byeachcategory andmarkettotheresult
fortheyearmustbeindicated :
profitandlossaccount : parately intheprofitandlossaccount ,,
thewholeofthepersonnel costsrela^
tingtotheaccounting period,broken
downasprovided byArticle20.1.6;
exceptional resuit: exceptional resuit:
8.Theamountofthechangesin9»Theamountofthechangesinthe
theresultfortheyearduetothe'resultfortheyearduetotheappli-
application offiscallaws cationoffiscallaws:

*r,62–
-.t..
9«Theamountoftheemoluments ,10.Theamountoftheemoluments gran-
grantedduringtheyeartothemem-tedduringtheyeartothemembersof
lbersoftheadministrative ,manage-.theadministrative ,managerial andsu-
rialandsupervisory "bodies "byreason .pervisory bodiesbyreasonoftheir
oftheirresponsibilities ,showingtheresponsibilities ,andanycommitments
totalforeachcategory : arisingorenteredintoinrespectof
10.Theamountofadvances andere-11.Theamountofadvances andcredits
ditsgrantedtothemembersofadmi-grnntedtothemembersofadninistra -
nistrative ,managerial andsupervisory tive,managerial andsupervisory bodies,
bodies,andcommitments enteredintoandcommitments enteredintoontheir
ontheiraccountbywayofguarantees accountbyway.ofguarantees ofanyretirement pensions forex-members -of
thosebodies,showingthetotalfor
eachcategory :
i
ofanykind,showingthetotalfor
eachcategory .kind,showingthetotalforeach
category.

Article 42 Article 42
TheMemberStatesmayallowthe1.-unchanged
particulars prescribed ,byArticle41»
2):
a)totaketheformofastatement de-*•
positedinaccordance sithArticle
3,paragraphes 1and2ofDirecti­
ve68/151/CEEof9March1968.This
•shallbementioned inthenoteson
theaccounts } !.
b)tobeomittedwhentheirnatureis
suchthat,intheviewofareaso­
nablebusiness man,theywouldbe
seriously prejudicial toanyofthe
undertakings towhichthisprovi­
sionrelates.Theomission ofthe
particulars shallbementioned in
thenotesontheaccounts ,
2*Subjecttotheprovisions ofthe
secondparagraph ofArticle24ofthis
Directive ,theMemberStatesmayautho­
rizetheomission bycompanies towhich
thatArticleappliesoftheinforma­
tionrequiredunderArticle41»6).

rscTiON 9
Contents oftheannualreport
Article 43
!•Theannualreportshallcontain
adetailed reviewofthedevelopment
ofthecompany'sbusiness andofits
position .
2,Thereportshallalsogivepar­
ticulars of:
a)anyimportant eventsthathave
occurred sincethecloseofthe
business year;
b)thecompany'slikelyfuturedeve­
lopment.SECTION 9
Contents oftheannualreport
.Article 43
1•-unchanged
2,Thereportshallalsogivepar­
ticulars of:
a)-unchanged
b)-unchanged y
c)theactivities irithefieldof"
research anddevelopment andthe
coststhereof.

r.'j .-
-65-
SECTIOU 10
Publication - ■
Article 44
1»Theannual accounts duly approved
andtheannual report ,together with
thereport submitted feytheperson res­
ponsible forauditing theaccounts ,shall
"bedeposited without delay inaccordance
with Article 3(l)and (2)ofDirective
68/15l/ESCof9March I968 .(1)
2.Inderogation from Article 3(4)
ofthat Directive ,theannual accounts
shall hepublished infull inanational
gazette designated bythemember Ste.te .
The report submitted bythe person res­
ponsible forauditing theaccounts shall
bepublished therein atthe seme time .
3.The annual report shall bepubli­
shed inaccordance with therequire­
ments ofArticle 3(4)oftheDirective
referred toinparagraph 1.SECïIOft 10
• Publication
■ Article 44
1..Theannual accounts duly approved
andtheannual report ,together with
the report submitted bytheperson res­
ponsible forauditing theaccounts ,as
referred toinArticle 60of
Directive No of ^
shall bedeposited without delay in
accordance with Article 3(1) (2)
ofDirective 68/15I/SECcf9March
1968 .
2.Inderogation from Article 3(4)
ofthat Directive ,theannual accounts
shall bepublished infull inanational
gaZette designated bytheMember State .
The report submitted bytheperson res­
ponsible forauditing theaccounts ,as
referred toinparagraph 1,shall be
published therein atthe same time . -
3.-uncha
,(l)0JNoC131 ,13December .1972 pp.49
etseer .(Proposal forafifth Direc­
tive under Article 54(3)(g )»'submit­
tedtothe Council bythe ,Commission
on9October 1972 .

-66-
Article 45 Article 45
Onanyotheroccasion whenpublica­
tionismadeinfull,theannualaccounts
andreportshallbereproduced inthe
formandtextonthebasisofwhichthe
personresponsible forauditing the
accounts drewuphisreport.Theyshall
beaccompanied bythe'fulltextofthe
certificate .Iftheperson'responsible !
forauditing theaccounts madeanyqua­
lifications orrefusedtocertifythe
accounts ,thefactshallbestatedrnd
thereasonsgiven.unchanged
Article4°
Iftheannualaccounts arenotpu­
blishedinfull,itshallbepointedout •
thattheversionpublished isabridged ,
andreference shallbemadetothenatio­
nalgazetteinwhichtheywerepublished .
Thecertificate ofthepersonrespon­
sibleforauditing theaccounts shall
notaccompany thispublication ,butit
shallbestatedwhether thecertificate
wasmadewithorwithoutqualification ,
orwasrefused .Article46
unchan,^ed
Article 47
'■Thereshallbepublished alongwith
theannualaccounts ,andinlike-manner:
;-theproposed allocation ofthe
result,
-theallocation oftheresults
incaseswheretheseitemsdonotappear
intheannualaccounts .Article 47
unchanged

SECTION 11 S3CTI0N 11
Specialprovisions relating tothe
societearesponsatilite limitee,
theGesellschaft mitboschrahkter
Haftung,theSocietaaresponsabilita
limitata andtheVennootschap metbe-
perkteasnsprakeli jkheid
Article4°
Thecompanies referred toin
Articlel(l)(b)shalldrawuptheir
annualaccounts andreportforthe
information oftheirmembers inaccor­
dancewiththerequirements ofArticle
2to23and25to43ofthisDirec­
tive,subjecttothefollowing qualifi­
cations :
^a)InArticle8aseparateitem,
'Claimsonmembers shallbeinclu­
dedunderassetsatCIIIandDII
endafurtherseparateit.-n,'Debts
tocambers' junderliabilities atE;
(b)InArticle9aseparateitem,
"Claimsonmembers",shallbeinclu­
dedatCIIIandDIIandafurther
separate item,"Debtstomembersat
PaidI.Specialprevisions i\=lyfcir.~tjthe
societearesponsabilice linitee,
theGesellschaft mitbeschrankter
Eaftung ,theSocietaaresponsabilita
limitata andtheVennootschap metbe-
perkteaanspralceli jkheid
Article 43
-unchanged

Article 49 Article 49
1,Thecompanies referred toin
Article 1,(l)(t>)shallcausetheir
annualaccounts andreporttobeau­
ditedbyoneormorepersonsauthori­
zedbythelawofthecountrytoaudit
accounts .
2.TheMemberStatesmayexemptfrom
theobligation imposedunderparagraph
1companies ofwhichatthedateof
theirbalance sheet:
-thebalcncesheettotalreduced by
thevalueadjustments ,iftheseare
enteredunderliabilities ,doesnot
exceedonehundred thousand units
ofaccount,
-thenetturnover asdefined in
Article 25ofthisDirective does
notexceed twohundred thousand units
ofaccount ,
-theaveragenumberofemployees
duringtheyeardidnotexceed
twenty.,
Inthatcasetheysha,nintroduce
appropriate sanctions intotheirlawfor
casesinwhichtheannualaccounts and
reportsofsuchcompenies arenotdrawn
upinaccordance withtherequirements
ofthi3Directive .1.(a)Thecompaniesreferredtoin
Article 1,(l)(b)shallcausetheir
annualaccountstobeaudited byone
ormorepersonsauthorized bythena­
tionallawtoauditaccounts .
(b)Thepersonorpersonsresponsi­
bleforauditing theaccountsshall
alsoverifythattheannualreportis
consistent withtheannualaccounts of
theyeartowhichitrefers.
2.-unchanged
-thebalance sheettotaldoesnot
exceed onehundred thousand units
ofaccount,
-unchanged
-unchanged 1
-unchrnged

-69-
Ifsubsequently anyoneofthe -unchanged
numerical limitssetoutaboveis
exceeded ,theexemption providedfor
inthisprovision mayagainbeapplied
onlyifalltheconditions specified
abovearesatisfied fortwoconsecutive
years.
Theamountsinunitsofaccount -unchanged
specified inthisprovision mayvaryby
notmorathan10$upordownforpurposes
ofconversion intonational currencies .

-70-
Article 50 Article 50
1.(a)Thecompanies referredtoin
Articlel,(l)(b)shallpublishtheir
annualaccounts andreport,andthe
reportdrawnupbythepersonrespon­
sibleforauditing theaccounts ,in
accordance withArticle 44ofthis
Directive .
(b)Articles 45"to47ofthisDi­
rectiveshallequallyapplytothe
companies referredtoinparagraphl(a).
2.Notwithstanding paragraphl(a),
theMemberStatesmaypermit
(a)companies otherthanthosere­
ferredtoinArticle49(2),inthecase
ofwhichatthedateoftheirbalance
sheet:
-thebalancesheettotalreduced by
thevalueadjustments ,iftheseare
enterodunderliabilities ,doesnot
exceedonemillionunitsofaccount ;1.(a)-unchanged
(b)-unchanged
2.-unchanged
(a)-unchanged
-thenetturnover asdefinedin -unchanged
Article 25ofthisDirective doesnot
exceedtwomillionunitsofaccount }
-theaveragenumberofemployees during-unchanged
theyeardidnotexceedonehundred,-thebalance sheettotaldoesnot
exceedonemillionunitsofac­
count.
-unchanged

-topublish their profit andloss account
intheabridged form provided forin
Article 24ofthis Directive .Ifsubse­
quently anyoneofthenumerical limits
setoutabove isexceeded ,theexemption
provided forinthis provision may again
beapplied only ifalltheconditions
specified above aresatisfied fortwo
consecutive years .
The amounts inunits ofaccount
specified inthis provision mayvary by
notmore than 10$upordown forpur­
poses ofconversion into national cur­
rencies .
(b)thecompanies referred toin
Article 49(2 )ofthis Directive topu­
blish merely anabridged balance sheet
showing only theitems preceded by
letters and Roman numerals set out in
Articles 8and9with separate particu­
lars ofthe claims onand debts tomem- .
bers andnotes onthe accounts but not
necessarily including theexplanations
required under Article 41(4 )to(l0):-unchanged
(c)thepublication requirements
laid down forthecompanies referred
toin(a) -and (b)tobeeffected in
manner prescribed byArticle 3of
Directive 68/151/EECof9March 1968 .-unchanged
(b)thecompanies referred toin
Article 49(2 )ofthis Directive topu-'
blisb merely anabridged balance sheet
showing only theitems preceded by
letters and Roman numerals set out in
Articles 8end9with separate parti­
culars of:
-theinformation required bythe
provisions inbrackets under items
DIIofthe assets and Eofthe
liabilities inArticle 8andunder
items DII,U1andIinArticle 9»
butshowing thetotal fortheitems
concerned ;
-claims onanddebts tomembers ,
andnotes cnthe accounts
butnotnecessarily including the
explanations required under Article
41(4 )to(11);
(c)-unchanged

-72-
SECTIOÏT 12 SÏÏCTIOÎT 12
Finalprovisions Pir.alprovisions
Article 51 Article 51
1.(a)TheMemberStatesshall,within -unchanged
eighteen monthsofnotification ofthis
Directive ,m?iceallthenecessary amend­
mentstotheirlaws,regulations and
administrative provisions soastocom­
plywiththeprovisions ofthisDirec­
tive,andshallinformtheCommission
thereofimmediately .Theyshallbring
theamendments intoforcewithinthirty
monthsofnotification ofthisDirec­
tive.
(b)TheGovernment softhel'enter
Statesshallcommunicate totheCommis- ■■
sionforinformation thedrafttexts , .
ofthelawsandregulations together
withthestatements ofgrounds,rela­
tingtothe.matterscoveredbythis
Directive .Thoseshallbeconuaxmicated
atleastsixmonthsbeforetne.date
envisaged forfinaladoption oftho
texts. -
2.Theobligation toshowinthean­
nualaccounts theitensprescribed by
Articles 8,920to23whichrelate
toassociated undertakings }andthe'
obligation toprovideinformation con­
cerningtheseundertakings inaccordance
withArticles 10(2),11or4l(5)of
thisDirective shallenterintoforce '. .:
simultaneously withaCouncilDirective
relatingtoconsolidated accounts .

-73-
Article 52 Article 52
ThisDirective isaddressed tothe -unchanged
MemberStates.