1. in Article 2(1) the following subparagraph shall be added: "Member States may permit or require the inclusion of other statements in the annual accounts in addition to the documents referred to in the first subparagraph.";
2. in Article 4, the following paragraph shall be added:
"6. Member States may permit or require the presentation of amounts within items in the profit and loss account and balance sheet to have regard to the substance of the reported transaction or arrangement. Such permission or requirement may be restricted to certain classes of company and/or to consolidated accounts as defined in the Seventh Council Directive 83/349/EEC of 13 June 1983 on consolidated accounts(10).";
3. in Article 8 the following paragraph shall be added: "Member States may permit or require companies to adopt the presentation of the balance sheet set out in Article 10a as an alternative to the layouts otherwise prescribed or permitted.";
4. in Article 9, under "Liabilities", in point B, the title "Provisions for liabilities and charges" shall be replaced by "Provisions";
5. in Article 10, point J, the title "Provisions for liabilities and charges" shall be replaced by "Provisions";
6. the following Article shall be inserted:
"Article 10a
Instead of the presentation of balance sheet items in accordance with Articles 9 and 10, Member States may permit or require companies, or certain classes of company, to present those items on the basis of a distinction between current and non-current items provided that the information given is at least equivalent to that otherwise required by Articles 9 and 10.";
7. Article 20 shall be amended as follows:
(a) Paragraph 1 shall be replaced by the following:
"1. Provisions are intended to cover liabilities the nature of which is clearly defined and which at the date of the balance sheet are either likely to be incurred, or certain to be incurred but uncertain as to amount or as to the date on which they will arise.";
(b) Paragraph 3 shall be replaced by the following:
"3. Provisions may not be used to adjust the values of assets.";
8. in Article 22, the following paragraph shall be added: "By way of derogation from Article 2(1), Member States may permit or require all companies, or any classes of company, to present a statement of their performance instead of the presentation of profit and loss items in accordance with Articles 23 to 26, provided that the information given is at least equivalent to that otherwise required by those Articles.";
9. Article 31 shall be amended as follows:
(a) in paragraph 1(c), point (bb) shall be replaced by the following:
"(bb) account must be taken of all liabilities arising in the course of the financial year concerned or of a previous one, even if such liabilities become apparent only between the date of the balance sheet and the date on which it is drawn up,";
(b) the following paragraph shall be inserted:
"(1a) In addition to those amounts recorded pursuant to paragraph (1)(c)(bb), Member States may permit or require account to be taken of all foreseeable liabilities and potential losses arising in the course of the financial year concerned or of a previous one, even if such liabilities or losses become apparent only between the date of the balance sheet and the date on which it is drawn up.";
10. in Article 33(1), point (c) shall be replaced by the following:
"(c) revaluation of fixed assets";
11. in Article 42, the first paragraph shall be replaced by the following: "Provisions may not exceed in amount the sums which are necessary.";
12. the following Articles shall be inserted:
"Article 42e
By way of derogation from Article 32, Member States may permit or require in respect of all companies or any classes of company the valuation of specified categories of assets other than financial instruments at amounts determined by reference to fair value.
Such permission or requirement may be restricted to consolidated accounts as defined in Directive 83/349/EEC.
Article 42f
Notwithstanding Article 31(1)(c), Member States may permit or require in respect of all companies or any classes of company that, where an asset is valued in accordance with Article 42e, a change in the value is included in the profit and loss account.";
13. in Article 43(1)(6) the reference to "Articles 9 and 10" shall be replaced by a reference to "Articles 9, 10 and 10a";
14. Article 46 shall be amended as follows:
(a) paragraph 1 shall be replaced by the following:
"1. (a) The annual report shall include at least a fair review of the development and performance of the company's business and of its position, together with a description of the principal risks and uncertainties that it faces.
The review shall be a balanced and comprehensive analysis of the development and performance of the company's business and of its position, consistent with the size and complexity of the business;
(b) To the extent necessary for an understanding of the company's development, performance or position, the analysis shall include both financial and, where appropriate, non-financial key performance indicators relevant to the particular business, including information relating to environmental and employee matters;
(c) In providing its analysis, the annual report shall, where appropriate, include references to and additional explanations of amounts reported in the annual accounts.";
(b) the following paragraph shall be added:
"4. Member States may choose to exempt companies covered by Article 27 from the obligation in paragraph 1(b) above in so far as it relates to non-financial information.";
15. in Article 48, the third sentence shall be deleted;
16. in Article 49, the third sentence shall be replaced by the following: "The report of the person or persons responsible for auditing the annual accounts (hereinafter: the statutory auditors) shall not accompany this publication, but it shall be disclosed whether an unqualified, qualified or adverse audit opinion was expressed, or whether the statutory auditors were unable to express an audit opinion. It shall also be disclosed whether the report of the statutory auditors included a reference to any matters to which the statutory auditors drew attention by way of emphasis without qualifying the audit opinion.";
17. Article 51(1) shall be replaced by the following:
"1. The annual accounts of companies shall be audited by one or more persons approved by Member States 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 of accounting documents(11).
The statutory auditors shall also express an opinion concerning the consistency or otherwise of the annual report with the annual accounts for the same financial year.";
18. the following Article shall be inserted:
"Article 51a
1. The report of the statutory auditors shall include:
(a) an introduction which shall at least identify the annual accounts that are the subject of the statutory audit, together with the financial reporting framework that has been 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 statutory audit was conducted;
(c) an audit opinion which shall state clearly the opinion of the statutory auditors as to whether the annual accounts give a true and fair view in accordance with the relevant financial reporting framework and, where appropriate, whether the annual accounts 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, a disclaimer of opinion;
(d) a reference to any matters to which the statutory auditors draw attention by way of emphasis without qualifying the audit opinion;
(e) an opinion concerning the consistency or otherwise of the annual report with the annual accounts for the same financial year.
2. The report shall be signed and dated by the statutory auditors.";
19. Article 53(1) shall be deleted;
20. the following Article shall be inserted:
"Article 53a
Member States shall not make available the exemptions set out in Articles 11, 27, 46, 47 and 51 in the case of companies whose securities are admitted to trading on a regulated market of any Member State within the meaning of Article 1(13) of Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field(12).";
21. in Article 56(1) the reference to "Articles 9, 10" shall be replaced by a reference to "Articles 9, 10, 10a";
22. in Article 60, first paragraph, the words "on the basis of their market value" shall be replaced by "on the basis of their fair value";
23. in Article 61a, the reference to "Articles 42a to 42d" shall be replaced by a reference to "Articles 42a to 42f".