Directors’ Loans, Quasi-loans, Credit Transactions and Guarantees – The Disclosures

Disclosure requirements

If the aggregate value of all agreements, transactions and arrangements regarding loans, quasi-loans, credit transactions, guarantees or assignments of liabilities do not exceed €7,500 for that director (including persons connected to that director), then no disclosure is required.

Where the agreements, transactions or arrangements are greater than €7,500, the disclosure requirements with respect to loans, quasi-loans, credit transactions and guarantees entered into with any director of the company or its holding company are dictated by Section 307 of the Act.

Section 307 essentially requires a reconciliation between the value of such arrangements that have been entered into at the start of the year to the end of the year. This reconciliation is required separately for each director and also with respect to the total of the amounts concerned. The required disclosures for loans, quasi-loans or credit transactions are:

  Disclosure required for loans, quasi-loans or credit transactions Disclose individually by Director Disclose in total* Other
a) Name of the person for whom the arrangements were made (if to a connected person, the name of the director to whom they are connected with) x
b) Value of the arrangements at beginning and end of financial year x x Express also as % of net assets
c) Advances made during the financial year x x
d) Repayments made during the financial year x x
e) Amounts of any allowances made during the financial year x x
f) Maximum amount outstanding during the financial year x x Where total amounts are >10% of net assets at any point, state the aggregate amount plus relevant percentage  of net assets concerned
g) Indication of the interest rate x
h) Other main conditions x

*The disclosures required to be shown in aggregate are also required where any arrangements as laid out are in place for other officers (who are not directors) of the company or holding company.

Please note, in the group financial statements of a holding company the above disclosures are required where entered into by the company or any of its subsidiary companies.

Similarly, where a holding company avails itself of an exemption from the requirement to prepare group financial statements in relation to any financial year (read more – Consolidation), the disclosures in the individual holding company financial statements must include details of any loans, quasi-loans, credit transactions or guarantees entered into by the company and any of its subsidiaries.

Illustrated disclosure of directors’ loans:

During the financial year the company entered into arrangements comprising loans [quasi-loans or credit transactions]with directors. The required reconciliations of the movements in values during the financial year are set out below.

Director A [insert name]

 

        31/12/15 31/12/14
        €         €
Value of arrangements at beginning of financial year xxx xxx
Amounts advanced xxx xxx
Repayments (xxx) (xxx)
[Interest (where applicable)] xxx xxx
Provision for allowances (xxx) (xxx)
Value of arrangements at end of financial year xxx xxx

The maximum amount outstanding during the financial year for Director A was €xxx (2014: €xxx). The applicable interest rate applied was x% (2014: x%).

 

Director B [insert name]

 

        31/12/15 31/12/14
        €         €
Value of arrangements at beginning of financial year xxx xxx
Amounts advanced xxx xxx
Repayments (xxx) (xxx)
[Interest (where applicable)] xxx xxx
Provision for allowances (xxx) (xxx)
Value of arrangements at end of financial year xxx xxx

The maximum amount outstanding during the financial year for Director B was €xxx (2014: €xxx). The applicable interest rate applied was x% (2014: x%).

 

 

The total value of all arrangements is set out below.

  31/12/15 31/12/14
  As a percentage of net assets As a percentage of net assets
Value of arrangements at beginning of financial year xxx x% xxx x%
Amounts advanced xxx   xxx  
Repayments (xxx)   (xxx)  
[Interest (where applicable)] xxx   xxx  
Provision for allowances (xxx)   (xxx)  
Value of arrangements at end of financial year xxx x% xxx x%

The maximum amount outstanding during the financial year for all directors was €xxx (2014: €xxx).

 

The above disclosure are with regard to arrangements comprising loans, quasi-loans or credit transactions. Where such an arrangement is not yet in place but there is an agreement to enter into an arrangement the disclosures are as follows:

Disclosure required for agreement to enter into arrangement Disclose by Director Disclose in total
Name of the person for whom the arrangements were made (if to a connected person, the name of the director to whom they are connected with) x
Value of the arrangements agreed to x x
Indication of the interest rate x x
Other main conditions x x

 

Where there is an arrangement or an agreement to enter into an arrangement comprising guarantees entered into or security provided in connection with a loan, quasi-loan or credit transaction, the required disclosures are as follows:

 

Disclosure requirement Guarantees / security Arrangement to provide guarantees / security Other
Name of the person for whom the arrangements were made (if to a connected person, the name of the director to whom they are connected with) x x
Amount of the maximum liability that may be incurred by the company (or any subsidiary) x* x Where total amounts are >10% of net assets at any point, state the aggregate amount plus relevant percentage  of net assets concerned
Any amount paid and any liability incurred by the company (or any subsidiary) for the purpose of fulfilling the guarantee / security provided x* Also disclose any loss incurred by reason of enforcement of the guarantee or loss of the security
Arrangements’ main conditions x x

 

* The total amount for the current and preceding financial year must be stated for these two points as well as the amounts separately for each applicable director.