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 The tenth edition of Interpreting Company Reports and Accounts guides the reader through the many

Reports and accounts

Interpreting Company
conventions and complexities of company accounts, explaining how to assess the financial and trading position Tenth Edition
of a company from year to year, how to spot undue risk-taking and ‘cosmetic accounting’, and where to look

Interpreting
for clues on the quality of management.
This book is intended as a practical guide to the interpretation of reports and accounts. It contains frequent
reference to the legal and accounting requirements in the UK, both as regards to IFRS (International Financial
Reporting Standards) and UK GAAP (UK Generally Accepted Accounting Practice). This is done in the context of
interesting information to look out for, rather than how a set of accounts should be prepared.
Packed with relevant real world examples, this highly accessible book shows readers how to analyse company
reports and accounts, both qualitatively and quantitatively. The analysis is illustrated with numerous published
Company Reports
and accounts
accounts, extracts and examples and references to corporate websites.

Key Features
• Key points from company accounts are highlighted and explained throughout the book Geoffrey Holmes
• Each topic chapter examines the implications of adopting IFRS Alan Sugden
• The chapter ‘Putting it all together’ takes readers step by step through the reports, accounts
and press cuttings of an AIM company and Paul Gee
• The authors comment as well as inform - previous editions highlighted the serious weaknesses
of both Polly Peck and Maxwell Communications Corporation well ahead of their collapse

New to this edition

• Explains the key differences between UK GAAP and IFRS Tenth
• Analyses how companies present the impact of the transition from UK GAAP to IFRS Edition
• Coverage of small and medium-sized entities (SMEs) reporting
• Includes recent developments in narrative reporting: Operating and Financial Review
Developments; Business Review; and Corporate Social Responsibility Reporting

Holmes, Sugden and Gee

Interpreting Company Reports and Accounts is suitable for intermediate or advanced undergraduate accounting
and finance courses, as well as MBA courses. The book is recommended reading for several professional
examinations and will also be highly relevant to practitioners.

Geoffrey Holmes FCA, FTII was, for more than 20 years, the highly regarded and much respected Editor of
Accountancy, the Journal of the Institute of Chartered Accountants.
Alan Sugden is a Sloan Fellow of the London Business School and a retired director of Schroder Investment
Management. He spent nearly 20 years in the City as an analyst and fund manager, running the £100 million
Schroder Recovery Fund for several years.
Paul Gee BA (Econ) FCA is a member of the National Assurance Technical
Group of Smith & Williamson and lectures widely in the UK on financial reporting.

Front cover image www.pearson-books.com

An imprint of © Getty Images

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Interpreting Company
Reports and Accounts

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We work with leading authors to develop the
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Interpreting Company
Reports and Accounts
TENTH EDITION

Geoffrey Holmes
Alan Sugden
Paul Gee

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Pearson Education Limited
Edinburgh Gate
Harlow
Essex CM20 2JE
England
and Associated Companies throughout the world

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First published 1979

Tenth edition published 2008

© Geoffrey Holmes and Alan Sugden 1979, 1983, 1986, 1990, 1994, 1997, 1999
© The Estate of Geoffrey Holmes; Alan Sugden and Paul Gee 2002, 2005, 2008

The rights of Geoffrey Holmes, Alan Sugden and Paul Gee to be identified as authors
of this work have been asserted by them in accordance with the Copyright, Designs
and Patents Act 1988.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, electronic, mechanical,
photocopying, recording or otherwise, without either the prior written permission of the
publisher or a licence permitting restricted copying in the United Kingdom issued by the
Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street,
London EC1N 8TS.

ISBN: 978-0-273-71141-4

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library

Library of Congress Cataloging-in-Publication Data

Holmes, Geoffrey Andrew.
Interpreting company reports and accounts / Geoffrey Holmes, Alan Sugden, Paul Gee. --
10th ed.
p. cm.
ISBN-13: 978-0-273-71141-4
1. Financial statements. 2. Corporation reports. I. Sugden, Alan. II. Gee, Paul. III. Title.
HF5681.B2H63 2008
657′.3--dc22
2007049783

10 9 8 7 6 5 4 3 2 1
12 11 10 09 08

Typeset in 9.75/12 Times by 35

Printed and bound by Ashford Colour Press., Gosport

The publisher’s policy is to use paper manufactured from sustainable forests.

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 Brief contents

Contents vii
Preface xi
Publisher’s acknowledgements xii

1 Overview of the regulatory scene 1

2 International Financial Reporting Standards (IFRS) overview 8
3 Accounting principles 11
4 The annual report 22
5 Chairman’s statement and the operating and financial review 34
6 Corporate governance and the auditors’ report 43
7 The profit and loss account: overall structure 52
8 The profit and loss account: turnover and revenue recognition 55
9 The profit and loss account: further disclosure areas 62
10 The profit and loss account: interpretation, ratio analysis, segmental analysis and earnings per share 74
11 Equity statements, dividends and prior period adjustments 88
12 The balance sheet: an introduction 95
13 Tangible fixed assets 99
14 Intangible fixed assets 109
15 Fixed asset investments 116
16 Stocks and long-term contracts 122
17 Debtors and other receivables 131
18 Current asset investments; cash at bank and in hand 141
19 Creditors and provisions 145
20 Tax in the balance sheet 155
21 Bank loans and overdrafts 163
22 Loan capital 167
23 Derivatives and other financial instruments 185
24 Equity share capital and reserves 197
25 Balance sheet disclosures 209
26 Cash flow statements 217
27 Financial reporting for SMEs (small and medium-sized entities) 230
28 Group accounts, acquisitions and mergers 234
29 Joint ventures, associates and foreign operations 243
30 Historical summaries, ratios and trends 258
31 Inflation 269

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vi Brief contents

32 Half-yearly reports (interim reports) 273

33 UK GAAP and IFRS compared 278
34 Adopting IFRS for the first time 281
35 Putting it all together 290

Appendix 1 UK GAAP: Current Financial Reporting Standards and Exposure Drafts 296
Appendix 2 International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) 297
Appendix 3 Useful website addresses 298
Appendix 4 Present value 299
Appendix 5 Retail Price Indices since 1950 300
Appendix 6 Problems and solutions 300
Index 312

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 Contents

Page
Preface xi
Publisher’s acknowledgements xii

1 Overview of the regulatory scene 1

Purpose of the book. The regulatory structure in the UK. The annual report and accounts. The objective
of financial statements. The Financial Reporting Council’s role. International Financial Reporting
Standards (IFRS). UK company law. Categories of companies. Extracts from published accounts.

2 International Financial Reporting Standards (IFRS) overview 8

Introduction. Terminology. The Standards. Who must adopt IFRS? Convergence. Approach followed
in the book.

3 Accounting principles 11
What is UK GAAP? Accounting principles. The profit and loss account – UK GAAP. The balance
sheet – UK GAAP. Worked example – putting the accounts together. Format and terminology differences
– UK GAAP and IFRS compared. Accounting policies – UK GAAP. Accounting policies – IFRS.

4 The annual report 22

Information other than the financial statements. What is the annual report? The directors’ report. The business
review. The enhanced business review. Presenting the business review in practice. Annual review and
summary financial statements. Sequence of study of a report and accounts. The need to read the notes.

5 Chairman’s statement and the operating and financial review 34

Presenting the annual report in practice. Corporate social responsibility (CSR) report. Chairman’s statement.
Chief executive’s report. Enhanced business review. The operating and financial review (OFR).

6 Corporate governance and the auditors’ report 43

Corporate governance. The Combined Code. Directors. Directors’ remuneration. Accountability and audit.
Relations with shareholders. Going concern. The auditors’ report. Audit reports other than those which
are unqualified.

7 The profit and loss account: overall structure 52

Introduction. The format of the profit and loss account under UK GAAP. The format of the income
statement under International Financial Reporting Standards (IFRS).

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viii Contents

8 The profit and loss account: turnover and revenue recognition 55

Turnover and revenue. Revenue recognition under UK GAAP. Revenue recognition under IFRS.

9 The profit and loss account: further disclosure areas 62

Introduction. Basic disclosure areas. Directors’ and staff costs. Other expenses. Pension costs
(retirement benefits). Share option charges. Research and development expenditure. Exceptional items.
Discontinued and continuing operations. Comparative figures. Finance costs. Investment income.
Taxation. Segment reporting. Group issues.

10 The profit and loss account: interpretation, ratio analysis, segmental analysis and earnings per share 74
Interpretation and ratio analysis. Segment analysis. Earnings per share. Investment ratios.

11 Equity statements, dividends and prior period adjustments 88

Introduction. The statement of total recognised gains and losses (STRGL). Reconciliation of movement
in shareholders’ funds. Prior period adjustments. Equity dividends. Preference dividends. Equity statements
under IFRS.

12 The balance sheet: an introduction 95

Introduction. The format of the balance sheet under UK GAAP. International Financial Reporting Standards.

13 Tangible fixed assets 99

Tangible fixed asset categories. Depreciation. Revaluation of fixed assets. Sales and other disposals
of fixed assets. Investment properties. Government grants. Ratios.

14 Intangible fixed assets 109

Intangible fixed asset categories. Goodwill. Capitalised development costs. Computer software.
Other intangibles. Impairment. Revaluation.

15 Fixed asset investments 116

Fixed asset investment categories. UK GAAP. International Financial Reporting Standards.

16 Stocks and long-term contracts 122

Different classes of stock. UK GAAP. The inclusion of overheads in stock. Net realisable value.
Consignment stocks. The danger of rising stocks. Long-term contracts. Stock ratios. International
Financial Reporting Standards.

17 Debtors and other receivables 131

Categories of trade debtors and other debtors. Hire purchase and credit sales transactions.
Factoring and invoice discounting. Loans receivable. International Financial Reporting
Standards.

18 Current asset investments; cash at bank and in hand 141

Current asset investments – UK GAAP. Cash at bank and in hand. Disclosure requirements. Current
asset investments – IFRS. Cash at bank and in hand – IFRS.

19 Creditors and provisions 145

Creditors. Working capital and liquidity ratios. Provisions. Leases. IFRS.

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 Contents ix

20 Tax in the balance sheet 155

Introduction. UK GAAP – current taxation. UK GAAP – deferred tax. UK GAAP – the tax charge in
the profit and loss account. UK GAAP – accounting policies. UK GAAP – the tax reconciliation note.
UK GAAP – tax in the balance sheet. IFRS.

21 Bank loans and overdrafts 163

Bank facilities. Overdrafts. Bank loans. The big picture. Cash flow statements.

22 Loan capital 167

Company borrowings generally. Debentures, unsecured loan stock and bonds. Accounting for finance costs.
Share capital. Convertible loan capital. Financial instrument disclosure issues. Reporting the substance
of transactions, FRS 5. Gearing ratios. International Financial Reporting Standards.

23 Derivatives and other financial instruments 185

Introduction. UK GAAP. Definition of a derivative. Risk management and derivative trading. Narrative
disclosures. Common types of derivatives. Numerical disclosures. Counterparty risk. Concern about
derivatives. But why bother with derivatives? Benefits of disclosure. International Financial Reporting
Standards.

24 Equity share capital and reserves 197

Introduction. Share capital. Issue of further shares. Dividends. Reserves. Share-based payment
arrangements including share options. Purchase and reduction of shares. International Financial
Reporting Standards.

25 Balance sheet disclosures 209

Introduction. Related party disclosures. Operating leases. Contingent liabilities and contingent assets.
Capital commitments. Events after the balance sheet date.

26 Cash flow statements 217

Overview of the cash flow statement and related notes. Cash flow – definitions and ratios. International
Financial Reporting Standards.

27 Financial reporting for SMEs (small and medium-sized entities) 230

Introduction. Small companies and concessions available. The Financial Reporting Standard for Smaller
Entities (FRSSE). The International Financial Reporting Standard for SMEs. Medium-sized companies
and concessions available. Small and medium-sized groups.

28 Group accounts, acquisitions and mergers 234

Acquisitions of businesses. Group accounts. The consolidated balance sheet. The consolidated profit and
loss account. Acquisitions and mergers. Acquisition accounting. Merger accounting. International Financial
Reporting Standards.

29 Joint ventures, associates and foreign operations 243

Introduction. Joint arrangement that is not an entity. Joint venture. Associates. Foreign exchange.

30 Historical summaries, ratios and trends 258

Historical summaries. Ratios. Trends. International Financial Reporting Standards.

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x Contents

31 Inflation 269
Introduction. Historical cost (HC) accounting.

32 Half-yearly reports (interim reports) 273

Background. Practical issues. The new Disclosure and Transparency Rules (DTR).

33 UK GAAP and IFRS compared 278

Introduction. Where UK GAAP and IFRS are identical. Where UK GAAP is similar but where differences
remain. Where UK GAAP and IFRS are markedly different. The future.

34 Adopting IFRS for the first time 281

The impact of the change from UK GAAP to IFRS. Timing of IFRS implementation and different categories
of companies. The impact of IFRS 1, First-time adoption of IFRS. Explaining the impact on key ratios.
Making use of company websites. New disclosure opportunities under IFRS – some examples.

35 Putting it all together 290

Introduction. Charterhouse Communications. Question 1: What does the company do? Question 2: How large is
Charterhouse? Question 3: Recent history? Question 4: Does anyone have control? Any other information?
Summary. Conclusion.

Appendix 1 UK GAAP: Current Financial Reporting Standards and Exposure Drafts 296
Appendix 2 International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) 297
Appendix 3 Useful website addresses 298
Appendix 4 Present value 299
Appendix 5 Retail Price Indices since 1950 300
Appendix 6 Problems and solutions 300
Index 312
 Preface

The aim of this book IFRS

In the Preface to the first edition we wrote: In the UK, fully listed companies have had to start com-
plying with IFRS from 2005, whilst AIM-listed companies
‘Given a sound knowledge of the basic components of
were given a choice between early adoption (2005) or late
a balance sheet and profit and loss account, anybody
adoption (2007). It appears that relatively few unlisted
with a reasonably enquiring mind can learn a great deal
companies have yet adopted IFRS.
about a company by studying its report and accounts
and by comparing it with other companies. We have
written this book to provide the basic knowledge Narrative reporting
required . . .’
Corporate governance, business reviews and corporate
The aim remains the same, although there have been
social responsibility reporting are now a well-established
significant developments since the first edition was pub-
part of corporate life for bigger companies. This current edi-
lished in 1979.
tion addresses the fast-moving developments in this area.

UK GAAP
Approach
The Accounting Standards Board (ASB) set up in 1990
This edition seeks to provide a bridge between UK GAAP
has now issued 29 Financial Reporting Standards which,
and IFRS. The earlier chapters in the book examine vari-
together with earlier standards, are referred to as UK
ous topics, initially from the perspective of UK GAAP and
Generally Accepted Accounting Practice (or UK GAAP).
then conclude with the implications of adopting IFRS.
ASB’s main challenge is now to bring UK GAAP closer
Two chapters pull together the comparisons between UK
in line with International Financial Reporting Standards
GAAP and IFRS, and the conversion processes required.
(IFRS). Much progress has been made but the overall
The book concludes with an analytical chapter, ‘Putting it
process is likely to take several more years before the pro-
all together’, based on a real company. As with earlier
ject comes to final fruition.
editions, we use the Key Points symbol to help the reader
sort out the wheat from the chaff.

Alan Sugden
Paul Gee
 Publisher’s acknowledgements

We are grateful to the following for permission to First Choice Holidays PLC is no longer a public listed
reproduce copyright material: company; Chapter 19, page 150, from the Investors
Chronicle extract, 26 March 1993 (Investors Chronicle,
Chapter 1, page 4, a Wiggins Group article from the
1993); Chapter 23, page 185, extracts taken from the
Daily Telegraph, 8 March 2001 (Daily Telegraph, 2001);
Daily Telegraph, 6 October 1995 (Daily Telegraph, 1995);
Chapter 4, pages 26–27, Chapter 9, page 68, Chapter 14,
Chapter 35, pages 293–295, extracts from the Investors
page 113, Chapter 20, pages 161–162 and Chapter 34,
Chronicle, cuttings since 1998 (Investors Chronicle, 1998);
pages 285–287, extracts containing information on the
Chapter 35, pages 291–292, extracts from Charterhouse
Management Consulting Group, from Management
Annual Reports/data (Charterhouse Communications, 2002–
Consulting Group Director’s Report 2006, Management
2007).
Consulting Group Annual Report 2006, Management
Consulting Group Interim Report 2005, Management In some instances we have been unable to trace the owners
Consulting Group Annual Report and Accounts Year of copyright material, and we would appreciate any infor-
Ending 31 December 2005, reprinted with permission of mation that would enable us to do so.
Management Consulting Group PLC; Chapter 4, pages 28
and 31 and Chapter 9, pages 65–67, extracts containing We are grateful to the Financial Times Limited for
information on the Wilmington Group, from Wilmington permission to reprint the following material:
Group Director’s Report 2006 and Wilmington Group Chapter 6 Tomkins, © Financial Times, 1 July 2000;
Annual Report 2006 (Wilmington, 2006); Chapter 14, Chapter 8 Revenue recognition, © Financial Times, 9 July
pages 111, 113–114, Chapter 22, page 183 and Chapter 23, 2001; Chapter 8 PwC wins costs against Jarvis, ©
page 194, extracts containing information on First Choice Financial Times, 15 July 2000.
Holidays, from First Choice Holidays Annual Report 2006
We are grateful to the following for permission to use
(First Choice, 2006). These examples are taken from the
copyright material:
First Choice Holidays PLC Annual Report and reflect
the trading position at that time. However, First Choice Chapter 8 How accounting executives looked the wrong
Holidays PLC has since undergone a merger with the way from The Financial Times Limited, 13 August 2002,
tourism division TUI AG to form TUI Travel PLC, and © Robert Howell.
 CHAPTER 1 Overview of the regulatory scene

UK adoption of IFRS
Purpose of the book
Whether particular categories of company may or must
This book is intended as a practical guide to the inter-
adopt IFRS is referred in Chapter 2. Wherever applicable,
pretation of reports and accounts. In it frequent reference
the impact of IFRS (International Financial Reporting
is made to the legal and accounting requirements in the
Standards) is referred to throughout the book at the end each
UK, both as regards UK GAAP (UK Generally Accepted
relevant chapter, and in summary in Chapters 33 and 34.
Accounting Practice) and IFRS (International Financial
Reporting Standards). This is done in the context of inter-
esting information to look out for, rather than how a set of
accounts should be prepared. The annual report and accounts

The purpose of the annual report

The regulatory structure in the UK The report and accounts, normally produced annually, is
the principal way in which shareholders and others keep
Introduction themselves informed of the activities, progress and future
plans of a company. The style and content of the annual
What needs to be included in a set of financial statements report vary somewhat in line with the directors’ views on
is governed by a mixture of company law requirements its use as a public relations vehicle.
(presently the Companies Act 1985) and accounting stand-
ards. Companies that have a full listing on the London
What has to be included?
Stock Exchange are required to comply with additional
rules set by the Financial Services Authority (FSA), which
There is a minimum of information that must be disclosed
is the UK Listing Authority.
to comply with the law. In addition, the form and content
In the UK, reporting requirements are in a state of
of accounts are subject to Financial Reporting Standards.
flux. Companies listed on the London Stock Exchange
The detailed requirements of annual reports are dealt with
and the Alternative Investment Market (AIM) are required
in subsequent chapters.
to comply with International Financial Reporting Stand-
ards (IFRS). Other companies may choose between UK
GAAP (shorthand for UK Generally Accepted Account- The financial statements
ing Practice – see Chapter 3 for details) and IFRS. These
requirements are explained in this and the following The financial statements are a key part of a company’s
chapter. annual report. The annual report of the auditors to the
2 Interpreting company reports and accounts

company’s shareholders begins ‘We have audited the deal of important information on a wide range of issues,
financial statements on pages xx to yy, [i.e. the pages including the principal activities of the business, the names
containing the financial statements]’. The audit report of the company’s directors. Listed companies must give
then goes on to add a lot more detail before concluding details of their shareholdings and share option arrange-
(provided the auditors think all is well with the company) ment. It also contains a business review which should refer
with the opinion that ‘the financial statements give a true to business performance, principal risks and uncertainties,
and fair view . . .’ (see Chapter 6 for more detail, which and key performance indicators (KPIs). The directors’
includes the audit report on the financial statements of report is dealt with in Chapter 4.
Associated British Foods).
Under UK GAAP, the financial statements include four
Narrative reporting
primary financial statements:

n profit and loss account, In recent years ‘Narrative reporting’ has emerged as a
n statement of total recognised gains and losses, high-profile issue. Annual reports of larger companies
n balance sheet, contain information over and above that required by law
n cash flow statement. and accounting standards. Sometimes this information
has to be provided because the company is fully listed on
Financial statements also include: the London Stock Exchange – see the corporate govern-
ance and remuneration report requirements in Chapter 6.
n notes to the financial statements, Sometimes the information is provided as best practice by
n statement of accounting policies. companies whose shares are publicly-traded – see Chap-
ter 5. The quality of a company’s narrative reporting can
The notes and the primary financial statements form an
impact on its reputation within the financial community.
integrated whole, and should be read as such to obtain a
The various aspects of narrative reporting, including
complete picture. Chapter 4 refers in more detail to the
recent developments and trends, are dealt with in
content and structure of the annual report.
Chapters 4, 5 and 6.

The profit and loss account

The profit and loss account (referred to under IFRS as the The objective of financial statements
income statement) is a record of the company’s activities
over a stated period of time, usually a year. Chapter 3 Overall objective
explains how the profit and loss account is compiled and
prepared. More detailed requirements are dealt with in The key objective is to provide information about the
Chapters 8 to 10. financial position and performance of an entity that is
useful to a wide range of users for assessing the steward-
The balance sheet ship of management and for making economic decisions
(ASB’s Statement of Principles (StoP), Chapter 1).
The balance sheet is a statement of the company’s assets
and liabilities at close of business on a given date, referred Users and their information needs
to as the balance sheet date. Again, Chapter 3 explains
how the balance sheet is compiled and prepared. Later Financial information about the activities and resources of
chapters deal with specific issues in detail. an entity is typically of interest to many stakeholders.
Although some of them are able to command the prep-
The directors’ report aration of special purpose financial reports in order to
obtain the information they need, the rest – usually the vast
The Companies Act 1985 requires a company’s annual majority – will need to rely on general purpose financial
report to contain a directors’ report. This contains a great reports (StoP, para 1.1). As the StoP points out, annual
 Chapter 1 Overview of the regulatory scene 3

reports and accounts, and interim reports, are of interest In January 2003, the Secretary of State for Trade and
not only to investors, but also to: Industry announced that reform would be introduced in
three areas:
n lenders (although banks demand and get a lot more
timely and detailed information than is generally n raising standards of corporate governance;
available); n strengthening the accounting and auditing professions;
n suppliers and other trade creditors (to decide how much n providing for an independent system of regulation for
credit to allow a company); those professions.
n customers (e.g., a retailer who needs to assess the finan-
cial strength of a potential supplier); This reform was to be achieved by means of an enhanced
n employees (whether to buy some shares or to start look- role for the then existing Financial Reporting Council
ing for another job); (FRC) which was to become the ‘new, single, independent
n governments and their agencies; and regulator’.
n the general public (e.g. where a company makes a sub-
stantial contribution to a local economy by providing
employment and using local suppliers). The Financial Reporting Council (FRC)

The FRC has responsibility for:

What users look for
n corporate governance;
Economic decisions often require an evaluation of the n setting accounting and auditing standards;
entity’s ability to generate cash and the timing and cer- n proactively enforcing and monitoring them;
tainty of its generation. To do this, users focus on the n overseeing the self-regulatory professional bodies.
entity’s (i) financial position, (ii) performance, and (iii)
cash flows, and use these in predicting expected cash flows.
Two key bodies which report to the FRS are:
The financial position of an entity encompasses the
resources it controls, its financial structure, its liquidity
and solvency, and its capacity to adapt to changes in the n the Financial Reporting Review Panel (FRRP) and
environment in which it operates. Much, but not all, of the n the Accounting Standards Board (ASB).
information on financial position needed is provided by
the balance sheet.
The Financial Reporting Review Panel (FRRP)
The performance of an entity comprises the return
obtained by the entity on the resources it controls, includ-
The FRRP enquires into financial statements where it
ing the cost of its financing. Information on performance is
appears that the requirements of the Companies Act 1985
provided by the profit and loss account and the statement
(CA 85), principally that the financial statements show a
of total recognised gains and losses.
true and fair view, might have been breached. The FRRP
is autonomous in carrying out its function. Whilst large
private companies are within the Panel’s remit, the Panel
has announced that it intends to focus its resources on
The Financial Reporting Council’s role larger listed companies.
The role of the FRRP is to examine departures from the
Introduction accounting and disclosure requirements of both CA 85 and
applicable accounting standards, and if necessary to seek
The collapse of ENRON and WORLDCOM in the USA an order from the court to remedy such departures. This
led the government to undertake a wide-ranging review of may refer either to compliance with UK Financial
both accountancy regulation and corporate governance in Reporting Standards (UK GAAP) or with International
the UK. Financial Reporting Standards (IFRS).
4 Interpreting company reports and accounts

Until comparatively recently, FRRP did not actively Now isn’t that an interesting point of view?
scrutinise accounts unless they were brought to its atten-
The article ended ‘Wiggins shares fell 3/4 to 311/4p’, and
tion. It now has a proactive role and scrutinises accounts
they went on falling, as Figure 1.1 shows.
of larger companies on a sample basis. In Press Notice
88 (FRRP PN 88, www.frc.org.uk) FRRP noted that it
had ‘developed a more systematic approach to accounts
selection based on business sectors, accounting themes
and company-specific factors’. In December 2004, it
announced its 2005 Risk-based Proactive Programme,
which referred to monitoring activity focusing on five
industry sectors: Automobile; Pharmaceutical; Retail;
Transport; and Utilities. In December 2005, it announced
that it would continue to select accounts from the priority
sectors referred to above, but that ‘the strategy should be
widened to include some companies providing services to
these sectors.’
Further details of the Panel’s remit and activities are
available from the FRRP section of the Financial Report-
ing Council website (www.frc.org.uk).
Where a company has to revise its accounts, its repu-
tation can be seriously damaged. For example, WIGGINS
GROUP had to revise its accounts for the year to 31 March
2000, as the Daily Telegraph reported.

Figure 1.1 Wiggins Group: loss of confidence

The FRRP issued a Press Notice in March 2001 dealing

WIGGINS GROUP Extract from Daily Telegraph with the above company’s accounts (FRRP PN 65) avail-
8 March 2001 able from the FRRP section of the Financial Reporting
Council website (www.frc.org.uk), see also page 56.
Wiggins sees profit restated as £10m loss
Wiggins Group, the airport and property manager,
yesterday restated its accounts for the second time The Accounting Standards Board (ASB)
in six months after regulators intervened.
The new accounts show that the company made a
£9.9m pre-tax loss in the year to March 2000 instead
The ASB develops and issues UK accounting standards (UK
of a pre-tax profit of £25.1m. Generally Accepted Accounting Practice or UK GAAP)
The restatements mean that Wiggins incurred and keeps them up to date.
losses totalling £25.2m in the years 1995 to 2000 An important part of its role now is to help converge UK
rather than making profits of £48.9m as initially standards with standards developed by the International
recorded.
The Financial Reporting Review Panel said
Accounting Standards Board (IASB). The IASB’s stand-
Wiggins had mistakenly booked a £21.5m profit from ards are referred to as International Financial Reporting
redeveloping Manston airport, and failed to account Standards or IFRS (see Chapter 2).
for £3m losses from starting an international airport
network.
Oliver Iny, Wiggins chief executive, said ‘We did The Urgent Issues Task Force (UITF)
wrong, and we’ve admitted we did so, but it had no
impact on the fundamental value of the company . . .’ The UITF is a sub-committee of ASB. Its main role is to
assist the ASB on emerging issues where there is evidence
 Chapter 1 Overview of the regulatory scene 5

of unsatisfactory reporting practice. The UITF issues n Companies listed on the Alternative Investment Market
‘Abstracts’ to provide interim rules pending the issue of, or (AIM), are required to adopt IFRS for accounting
amendment to, an accounting standard. periods which start on or after 1 January 2007. For
periods starting before this date, AIM companies may
adopt either UK GAAP or IFRS.
Financial Reporting Standards (FRSs)
n All other categories of companies (including those listed
only on PLUS Markets) may presently adopt either UK
CA 85 includes the definition of ‘accounting standards’
GAAP or IFRS.
and requires that directors of companies preparing
accounts under UK GAAP follow standards issued by
the Accounting Standards Board. These include both
Financial Reporting Standards (FRSs) issued by ASB,
UK company law
Statements of Standard Accounting Practice (SSAPs)
issued by ASB’s predecessor body, and Abstracts issued
The Companies Act 1985 (CA 85) sets out relevant dis-
by the Urgent Issues Task Force. Current standards and
closure requirements for companies adopting UK GAAP.
Abstracts are listed in Appendix 1.
These do not apply to UK companies who adopt IFRS
Prior to issue of a standard in final form, ASB issues an
which has its own requirements.
exposure draft for comment and discussion (this is referred
Other parts of CA 85 apply to all UK companies,
to as a Financial Reporting Exposure Draft or FRED).
whether they adopt UK GAAP or IFRS. These include audit
FREDs do not have mandatory status until converted into
requirements, rules on distributable profit, filing accounts
an FRS.
at Companies House, duties of directors and so on.
Accounting standards concessions for small companies
The Companies Act 2006 (CA 2006) received Royal
are dealt with in Chapter 27.
Assent in November 2006. CA 2006 will eventually
replace most of CA 85. However, different parts of the Act
Statements of Recommended Practice (SORPs) come into force at different times, ranging from early 2007
to late 2008. Commencement procedures will be referred
SORPs are developed by bodies recognised by the ASB to to in the text wherever relevant. Details can be found on
provide guidance on the application of accounting stand- www.berr.gov.uk/bbf by clicking on Companies Act 2006
ards to specific industries for example, banking, insurance, on the left-hand panel.
investment trusts, charities and higher education. Informa-
tion about current SORPs and where these can be obtained,
may be found on www.frc.org.uk.
Categories of companies

Limited companies
International Financial Reporting Standards
(IFRS)
The key purpose of forming a company is to
These are issued by the International Accounting Standards limit the liability of its shareholders.
Board (IASB). The activities of IASB, and implications
for UK companies, are referred to in Chapter 2 and, where
applicable, throughout the remainder of the book. Before the first Companies Act in 1862 introduced the
The current position for UK companies is as follows: company as a separate legal entity, the proprietor of a
business (and his or her business partners) had unlimited
n Fully listed groups are required to adopt IFRS for their liability. If the business failed, the proprietor(s) were per-
group accounts for all accounting periods which started sonally liable for settling the debts of the business, even if
on or after 1 January 2005. this required selling the home and personal possessions.
6 Interpreting company reports and accounts

Companies limited by shares relations. These offer quick and easy access to public
documents such as annual reports, interim reports, and
Limited companies are usually formed as limited by shares corporate social responsibility and environmental reports.
(see below for companies limited by guarantee). If the Many larger companies post presentations to analysts and
shares are fully paid, the members’ liability is limited to conference calls.
the money they have put up: the maximum risk a share-
holder runs is to lose all the money he has paid for his
shares, and no further claim can be made on him for AIM listed
liabilities incurred by the company. In rare cases where
shares are issued only partly paid, shareholders can be AIM listed companies shares are traded and share prices
called upon to subscribe some or all of the unpaid part, but published in the financial press. However AIM listed
no more than that. companies vary greatly in size and the extent to which
Limited companies may be formed as either private shares are held by major shareholders, directors and
companies or public companies. financial institutions. Some AIM-listed companies are
effectively under the control of one person and family
members.
Private companies Useful information is available through the following
London Stock Exchange links.
Most UK limited companies are private – their constitu-
tion does not allow their shares to be traded. Many of n www.londonstockexchange.com/aim
these companies have only one or two shareholders. The n http://www.londonstockexchange.com/en-gb/
company name ends with the word limited (often abbre- pricesnews/statistics/factsheets/aimmarketstats.htm
viated to Ltd ).
PLUS Markets
Public companies
For many regulatory purposes, companies who trade
A public company is a company which is registered as solely on PLUS Markets are regarding as ‘unlisted’.
such. Its share capital must be at least £50,000 and its The market was previously referred to as OFEX. The
name must end either with the words ‘Public limited PLUS Markets website (www.plusmarketsgroup.com) is
company’ or with the abbreviation ‘PLC’ or ‘plc’. extremely comprehensive and gives details of companies
A public limited company does not automatically have whose shares are traded, their share prices and so on.
its shares listed on the London Stock Exchange despite
popular belief! Small and medium-sized enterprises (SMEs)
In practice, many PLCs are fairly large, and are listed
on a market such as the London Stock Exchange, the Small and medium-sized enterprises (SMEs) are defined
Alternative Investment Market or PLUS Market. A num- by the Companies Act 1985 – please refer to Chapter 27
ber of PLCs are companies which have de-listed due to for the special features of these companies and the finan-
acquisition of shares by private equity groups. Some PLCs cial information which has to be made available.
are fairly small and are privately-owned businesses.

Unlimited companies
Fully listed companies
By contrast with a limited company, the members have
Fully listed companies trade their shares on the London joint and several liability in the same way as a partnership
Stock Exchange and are subject to considerable public (each member can individually be held entirely respons-
scrutiny. These companies usually have sophisticated ible). The principal advantage of forming an unlimited
websites that feature important sections on investor company is that it is not required to file its accounts each
 Chapter 1 Overview of the regulatory scene 7

year at Companies House. This form of company is

Extracts from published accounts
relatively uncommon today.
The book includes practical examples of company
Companies limited by guarantee
accounts presented both in accordance with UK GAAP
and with IFRS. These are allocated within the appropriate
This method is used for charitable and similar organis-
sections of each chapter.
ations, where funds are raised by donations and no shares
are issued. The liability is limited to the amount each
member can personally guarantee, which is the maximum UK GAAP
amount each member may be called upon to pay in the
event of liquidation. This form of incorporation is not Most unlisted companies and a large number of AIM-listed
normally used for a commercial business. companies continue to use UK GAAP. (However, for AIM
listed companies this choice ceases to be available for
Limited liability partnerships (LLPs) accounting periods which started on or after 1 January
2007: they will be required to move over to IFRS.)
A limited liability partnership (LLP) is a relatively new Many UK GAAP illustrations taken from a few years
legal vehicle – the relevant legislation came into force in ago continue to be useful (most of these relate to fully
April 2001. Companies House described it as an ‘altern- listed companies which have now moved over to IFRS).
ative corporate business vehicle that gives the benefits of Where these illustrations give clear presentation and would
limited liability but allows its members the flexibility of still be acceptable if published today under UK GAAP, we
organising their internal structure as a traditional part- have retained them. UK GAAP is likely to be around for
nership. The LLP is a separate legal entity and, while the some time to come.
LLP itself will be liable for the full extent of its assets, the
liability of the members will be limited.’
The main difference between an LLP and a limited IFRS
company is that an LLP has the organisational flexibility
of a partnership and is taxed as a partnership. Apart from We have provided a large number of IFRS illustrations
this, an LLP is very similar to a company. Many large including reference to useful websites for those readers
accountancy and legal firms are now constituted as LLPs. who want to research further.
 CHAPTER 2 International Financial Reporting
Standards (IFRS) overview

modern) term is IFRS – this is the term we will use

Introduction
throughout the book.
We referred to the International Accounting Standards
Board (IASB) in Chapter 1. IASB is an independent body,
responsible for developing and setting Standards and The Standards
Interpretations.
For companies operating within the European Union The Standards referred to in the extract above are listed in
(EU) and producing accounts under IFRS, the Standards Appendix 1. ‘IFRS GAAP’ is effectively a combination of
used must have been officially approved (‘endorsed’) by International Accounting Standards issued by the former
the EU. Companies in their accounting policies usually International Accounting Standards Committee (these are
start referring to ‘basis of preparation’ and state words referred to as IAS 1, IAS 2, etc.) and International
similar to: Financial Reporting Standards issued by the current body,
‘These accounts have been prepared in accordance with the International Accounting Standards Board (these are
International Financial Reporting Standards (“IFRS”), referred to as IFRS 1, IFRS 2, etc.).
including International Accounting Standards (“IAS”)
and interpretations issued by the International Account-
ing Standards Board (“IASB”) and its committees, and
Who must adopt IFRS?
as adopted by the EU [emphasis added] . . .’
At present in the UK, the only two mandatory categories
are companies that are fully listed on the London Stock
Exchange and companies whose shares are traded on AIM
Terminology
(the Alternative Investment Market). This position is cur-
rently under review.
The terms ‘International Financial Reporting Standards’
(IFRS) and ‘International Accounting Standards’ (IAS)
are effectively interchangeable. Fully listed companies
The term IAS originates from the earlier standards
issued by the IASB’s (International Accounting Standard In June 2002, EU Member States adopted the Regulation
Board) predecessor body, the International Accounting on the Application of International Accounting Standards
Standards Committee. These standards are still applicable, (the ‘IAS Regulation’).
although several have been substantially revised in recent This requires companies governed by the law of a
years. member state to prepare their consolidated accounts in
The Companies Act 1985 and the relevant tax legisla- conformity with international accounting standards if their
tion refer to ‘IAS’. However, the more widely-used (and securities are admitted to trading on a regulated market of
 Chapter 2 International Financial Reporting Standards (IFRS) overview 9

any member state. In the UK, this applies to consolidated as an alternative to UK accounting standards. This option
accounts of fully listed companies. extends to SMEs as well as large unlisted companies.
The IAS Regulation applies to each financial year For unlisted companies, the choice between UK
commencing on or after 1 January 2005. For example, GAAP and IFRS is likely to remain an option for some
a fully listed group with a 31 March year-end first had years to come.
to apply IFRS to its full-year consolidated accounts to
31 March 2006.
The above requirement is only applicable to the consol- How does this affect different categories of
idated accounts (the accounts of the combined group). We companies?
refer to the concept of consolidated accounts in Chapter
28. The Companies Act 1985 permits the individual parent Examples of the possible impact are summarised in the
company and subsidiary company accounts to be prepared table below.
on the basis of either UK GAAP or IFRS. The Accounting Standards Board issued a Press Notice
on 10 May 2006 (ASB PN 289) setting out proposals for
However, it is the consolidated accounts that extending the mandatory categories that might be required
are used as the primary basis for analysts. to adopt IFRS including all public quoted and other pub-
licly accountable entities and UK subsidiaries of group
Alternative Investment Market (AIM) companies companies that applied IFRS in the group accounts. A fur-
ther announcement is awaited.
The Rules of the London Stock Exchange require all AIM
companies to adopt IFRS for financial years commencing
on or after 1 January 2007. Several AIM companies adopted Convergence
IFRS earlier, for example for 31 December 2005 year-
ends. What does ‘convergence’ mean?

The term ‘convergence’ may be used in two separate but

Unlisted companies
interlinked contexts:
For financial years commencing on or after 1 January n convergence of UK GAAP with IFRS,
2005, all British companies have the option of using IFRS n convergence of IFRS and US GAAP.

Type of company Application of IFRS

Traded on PLUS Markets For regulatory purposes, companies whose shares are traded on PLUS Markets are
(formerly OFEX) regarded as unlisted and there is therefore no mandatory date for transition to IFRS.
However, such companies should consider strategic issues such as how late adoption
of IFRS might be viewed in the marketplace, particularly for those companies
intending to move over to AIM or the full market.
UK listed parent company CA 85 offers a choice between adopting UK GAAP and adopting IFRS.
UK subsidiaries of UK fully All UK subsidiary companies within a group must adopt either UK GAAP or IFRS (see
listed groups above). In practice, many adopt IFRS in order to ease the preparation of consolidated
accounts under IFRS.
UK subsidiaries of foreign Although UK company law does not require these subsidiaries to adopt IFRS, the
listed groups that are overseas parent may require IFRS accounts from them so that it can itself prepare
adopting IAS IFRS consolidated accounts.
Unlisted companies These companies can for the moment choose whether and when they adopt IFRS. The
decision may be affected by a number of considerations, including the desires of the
major shareholder(s), whether the company has future plans for ‘going public’ and its
relations with suppliers and customers outside the UK.
10 Interpreting company reports and accounts

Convergence of UK GAAP with IFRS has been taking UK standards should be introduced with a common
place for a large number of years, for example the respec- effective date.
tive standards on accounting for provisions (FRS 12 and ASB issued a Press Notice on 10 May 2006 (ASB PN
IAS 37) are identical. More recent years have seen an 289), seeking views on the future application of reporting
acceleration of the convergence process, for example, the requirements for UK companies. This effectively proposes
areas of accounting for financial instruments and share- further extensions to the categories of companies for
based payment transactions such as accounting for share which IFRS would be mandatory.
option schemes. We will refer to the extent of convergence
in the chapters that follow. Transition from UK GAAP to IFRS
Convergence of IFRS and US GAAP is a relatively
recent development. It is hoped that bringing the two We refer to the ‘conversion process’ in Chapter 34, includ-
accounting frameworks closer together will eventually ing the extent to which invaluable information is available
mean that large UK companies with share listings in the in the investor relations and archive sections of corporate
USA will no longer have to publish tables reconciling websites.
their respective profits and assets between IFRS and US
GAAP.
Approach followed in the book

UK convergence strategy Whilst fully listed and many AIM companies are now
following IFRS, most UK companies are still using UK
The ASB’s Technical Plan, published on 22 June 2005, set GAAP. In the current edition of the book, each chapter
out a ‘phased approach’. The original plan was to bring will initially consider the relevant UK GAAP requirements
UK standards into line with IFRS by bringing a number (including those of the Companies Act 1985) and their
of standards on related topics into effect each year over implications for the interpretation of company accounts.
a three to four-year period (e.g. FRSs based on FREDs This will be followed by a concise summary of the key dif-
25 and 28 were originally planned to be brought into UK ferences for companies that adopt IFRS.
GAAP during 2005/06). Chapter 33 contains a summary of the key differences
At a public meeting held in January 2006, ASB pro- over the relevant profit and loss account and balance sheet
posed an alternative strategy whereby further changes to areas.
 CHAPTER 3 Accounting principles

n best practice – as adopted by leading UK companies

What is UK GAAP?
(e.g. leading FTSE companies) or sectors; UK GAAP
may also reflect best practice in particular industry
Terminology
sectors such as the construction industry;
n guidance from the leading professional bodies, for ex-
‘GAAP’ stands for Generally Accepted Accounting Practice
ample, guidance on revenue recognition (see Chapter 8)
(but it can also stand for Generally Accepted Accounting
issued by the Consultative Committee of Accountancy
Principles). UK GAAP is effectively a package of prin-
bodies (CCAB);
ciples, rules and guidance statements used by companies
n feedback from regulators such as the Financial Report-
to measure profits and assets, and also to determine what
ing Review Panel (FFRP) on appropriate company
disclosures must be given in the company’s annual
reporting practice.
accounts or financial statements.

Main components of UK GAAP

Accounting principles
In practice, in the UK, this set of rules and guidance
derives from a number of diverse sources, including: Statement of principles for financial reporting

n the Statement of Principles for Financial Reporting ASB issued its Statement of Principles for Financial
(StoP) – issued by the Accounting Standards Board Reporting (StoP) in 1999. In the words of ASB:
(ASB);
n Statements of Standard Accounting Practice (SSAPs) – ‘This Statement of Principles for Financial Reporting
issued by the ASB’s predecessor body; sets out the principles that the Accounting Standards
n Financial Reporting Standards (FRSs) – issued by the Board believes should underlie the preparation and pres-
ASB; entation of general purpose financial statements.
n Abstracts – issued by the Urgent Issues Task Force ‘The primary purpose of articulating such principles is
(UITF); to provide a coherent frame of reference to be used by
n Companies Act 1985 requirements (as subsequently the Board in the development and review of accounting
amended by the Companies Act 2006 and Regulations standards and by others who interact with the Board
expected to be issued during 2007); during the standard-setting process.
n Statements of Recommended Practice (SORPs) – issued
by ASB-recognised industry committees; ‘Such a frame of reference should clarify the concep-
n Reporting Statements, such as the guidance on the tual underpinnings of proposed accounting standards
Operating and Financial Review (OFR, see Chapter 5) – and should enable standards to be developed on a con-
issued by the ASB; sistent basis. . . .’
12 Interpreting company reports and accounts

StoP is a lengthy document consisting of eight chapters Comparability

over some 57 pages (excluding appendices). It was clearly
important in the development of the numerous Financial Users need to be able to able to compare an entity’s
Reporting Standards (FRSs) issued after its publication. financial information over time in order to identify trends
It is now rather less important as more recent FRSs in its financial performance and financial position. They
such as FRS 25, Financial Instruments – Disclosure and also need to be able to compare the financial information
Presentation (see Chapter 24) are based on standards of different entities in order to evaluate their relative finan-
issued by the International Accounting Standards Board cial performance and financial position.
following the policy of converging UK GAAP with When companies change their accounting policies,
International Financial Reporting Standards (IFRS) – see figures for the previous year will be restated in line with
Chapter 2. IASB has its own statement of principles the new policy so that current and previous year figures are
referred to as ‘The Framework’. comparable.
Comparability between companies can be distorted by:
FRS 18 – Accounting policies
n companies adopting different accounting policies, for
The term ‘accounting policies’ refers to the rules that the example, companies in similar business sectors depre-
company uses for dealing with particular transactions, for ciating similar equipment over different useful lives;
example, how they are recognised and presented in the n companies financing assets in different ways, for ex-
financial statements, and whether assets are stated at his- ample, a retailer that owns all its outlets cannot be fairly
torical cost or a current valuation figure. The application to compared with a similar retailer that rents all its outlets,
particular transactions and situations will be dealt with unless the analyst adjusts the figures to allow for the
in the chapters in the book that deal with individual finan- difference;
cial statement topics, for example, fixed assets, revenue n the effects of inflation (see Chapter 31).
recognition and stocks.
FRS 18 sets out principles to be followed in selecting Consistency
accounting policies and the disclosures required. An ex-
ample of a typical company accounting policy statement Consistency is viewed against the objective of compar-
under UK GAAP is included later in this chapter. ability, which can be achieved through a combination
FRS 18 does highlight two particular concepts that are of consistency and disclosure. The consistency concept
crucial in dealing with particular transactions and in assumes that accounting treatment of like items is con-
preparing and presenting financial statements. These are sistent from one period to the next.
the going concern assumption and accruals.

Going concern assumption Substance over form

Financial statements are usually prepared on the assump- This concept was introduced by FRS 5 but is now incor-
tion that the entity will continue in operational existence porated within the Companies Act 1985. It requires
for the foreseeable future. The going concern basis is not transaction to be accounted to reflect their commercial
used if the entity is being liquidated or has ceased trading, substance rather than their legal form, should these differ.
or if the directors have no alternative but to liquidate or For example, where a company may not technically be
cease trading. the legal owner of an asset but for practical purposes may
effectively have the risks and rewards of ownership of the
Accruals
asset. In this situation, the asset should be included in the
The accruals basis of accounting assumes that revenues company’s balance sheet. This could occur, for example,
and costs are accrued (accounted for) as they are earned or in a hire-purchase transaction where a company was
incurred, not as money is received or paid. Revenues are already deriving virtually all the commercial benefits from
matched with associated costs and expenses to determine an asset, and had an indefinite option to buy it from its
profit, by including them in the same accounting period. legal owner for a nominal sum.
 Chapter 3 Accounting principles 13

Materiality
TERMINOLOGY
Information is material if its omission or misstatement
could influence the economic decisions of users taken on UK GAAP: Profit and loss account
the basis of those financial statements. Materiality must be
judged in terms of its significance to the reporting entity. The profit and loss account is a monetary record of
the activities of a business during an accounting period,
which is normally one year. A balance sheet is drawn
Estimation techniques
up on the last day of the company’s accounting period.
Turnover (also called sales) is money received, or
Estimation techniques are the method a company adopts to to be received, by the business for goods or services
arrive at estimated monetary amounts – for example: sold during the year.
n depreciation charges; Expenses are costs incurred in producing those
n provisions for slow-moving or obsolete stock; goods and services, normally divided into:
n warranty provisions for expected returns. (i) Cost of sales, i.e. the cost of the goods them-
selves, e.g. raw materials and wages
Gross profit = Turnover – Cost of sales
The profit and loss account – UK GAAP (ii) Distribution costs, i.e. the cost of getting the
goods to the customer
The profit and loss account (also referred to in IFRS as the (iii) Administrative expenses, i.e. other expenses
income statement) is a record of the activities of a which cannot be or are not allocated to particu-
company for a stated period of time. This period, called the lar products (i.e. which do not form part of cost
accounting reference period, is normally a year. of sales) or appear under other headings.
Example 3.1 shows a typical profit and loss account; the Operating profit or trading profit
terminology box below explains the terms used. = Turnover − Expenses (i.e. (i) to (iii) above).
Where expenses (i) to (iii) above exceed turnover, the
difference is an operating loss.
Example 3.1 A typical profit and loss account (iv) Other operating income is income and expenses
Profit and loss account for the year ended which fall outside (i) to (iii) above, e.g. property
30 June 2007 income of a trading company, or patent income.
(v) Interest paid on borrowed money interest
£000 £000 received represents income from interest on
Turnover 7,200 money lent (e.g. deposits at the bank).
Cost of sales 3,600
Pre-tax profit = Operating profit + (iv) +/− (v)
Gross profit 3,600
Distribution costs 1,100 Depreciation is an expense appearing as part of (i) to
Administrative expenses 1,300 (iii) above, as appropriate.
The cost of each fixed asset is written off over its
2,400
expected life. Using the most common method of
1,200 depreciation, the straight line method:
Other operating income 95
Depreciation Cost of asset − Residual value
Trading or operating profit 1,295 =
for the year Expected useful life
Interest receivable 20
Corresponding figures or ‘comparatives’ are those
1,315 for the same item for the preceding accounting period.
Interest payable 100
Note: Dividends are distributions to the shareholders.
Pre-tax profit on ordinary activities 1,215 As dividends on equity (or ordinary) shares are not
Taxation 415
an expense of the business, they are not entered in
Profit for the year 800 the profit and loss account (see Chapter 24).
14 Interpreting company reports and accounts

Note
Accounts are required to include the figures
for two periods, normally those for the year Dividends paid are not entered in the profit and loss
being reported on and corresponding (or account, as they are not an expense of the company.
comparative) figures for the previous year. For Dividends paid are charged direct to reserves (see also
simplicity, at this stage we show only figures Chapter 24). The profit and loss account in last year’s
for the year being reported on. balance sheet at 30 June 2006 amounted to £600. The
profit for the year amounted to £800 (see Example 3.1).
The dividends paid during the year amounted to £560.
The balance sheet – UK GAAP The above figures may be reconciled to the closing
profit and loss reserves of £840 as follows:
The balance sheet is a statement of the assets and liabilities
of a company at the close of business on a given day, i.e. on
the balance sheet date. The balance sheet is always drawn
£
up on the last day of the company’s accounting period.
Example 3.2 shows a typical balance sheet; the termino- Profit and loss reserves at 1 July 2006 600
logy box below explains the main terms used in balance Profit for the year 800
Equity dividends paid (560)
sheets.
Profit and loss reserves at 30 June 2007 840

Example 3.2 A typical balance sheet

Balance sheet as at 30 June 2007

TERMINOLOGY
£000 £000 £000
Fixed assets UK GAAP: balance sheet
Freehold land and 950
buildings A balance sheet is a statement of the assets and
Fixtures and fittings 175 liabilities and ownership interest of an enterprise at
Motor vehicles 535 the close of business on the balance sheet date.
1,660 Assets are things which a business owns and on
Current assets which a book value can be placed.
Stock (of goods) 500
Debtors 1,040
Book value is cost less accumulated depreciation
Cash 5 or, if the asset has been revalued, it is the valuation
figure less any subsequent depreciation.
1,545
Less: Current liabilities: Liabilities are amounts owed by a business.
Creditors due within Net assets = All assets – All liabilities.
1 year: Fixed assets are assets (like land and buildings,
Trade creditors 860 plant and machinery) not held for resale but for use by
Taxation payable 415 the business.
Overdraft 90
Fixed assets can be either tangible, from the Latin
1,365 tango, I touch (e.g. motor vehicle, land and buildings)
Net current assets 180 or intangible, i.e. not susceptible to touch (e.g. patent
Net assets 1,840 rights and trademarks).
Current assets are cash and other assets that the
Capital and reserves
Ordinary share capital 1,000 company expects to turn into cash (e.g. stock).
Profit and loss account 840 Current liabilities, which are usually described as
Ordinary shareholders’ funds 1,840
Creditors due within one year, are the liabilities that
s

the company expects to have to meet within 12 months.

 Chapter 3 Accounting principles 15

The members (shareholders) of a company pro- credit). These suppliers become creditors of the company
vide some or all of the finance in the form of share – immediately following receipt of the goods, the amount
capital (that is, they subscribe for shares) in the owing to them is a liability.
expectation that the company will make profits, and No actual trading took place during the year, i.e. no
pay dividends. goods were sold and so the entire purchases of £200,000
Ordinary shareholders’ funds are made up of represent unsold stocks at the end of the year.
ordinary share capital and all accumulated reserves. The company’s cash position at the end of the first year
Financial statements is the term which covers the is as follows:
annual accounts as a whole, i.e. the profit and loss
account, balance sheet, cash flow statement and state-
£
ments forming part of the statutory accounts.
Initial cash introduced by the shareholders 300,000
Freehold shop (200,000)
Shop fittings (75,000)
Purchase of goods (50% × £200,000) (100,000)
Motor van (10,000)
Overdrawn bank account (85,000)

Worked example – putting the accounts

The balance sheet of the company at the end of the first
together
year as follows:
The initial transactions
£000 £000
A company is formed with a share capital of 300,000 ordi- Fixed assets
Freehold land and buildings 200,000
nary shares, each with a nominal value of £1. The director/ Fixtures and fittings 75,000
shareholders subscribe for these at par (= nominal value) Motor vehicles 10,000
by payment of cash.
285,000
At the same time, the directors of the company negotiate Current assets
with the bank and agree an overdraft facility of £150,000. Stock (of goods) 200,000
As the company is new, the bank requires personal securi- Current liabilities:
ties from the directors – for example against their personal Creditors 100,000
assets such as their properties. This facility enables the Overdraft 85,000
company to overdraw by up to £150,000. However, this 185,000
figure does not appear in the accounts.
Net current assets 15,000
300,000
Acquiring assets and getting started – the first year of
Capital
the business Ordinary share capital 300,000

The company:
Comment
1. buys a freehold shop for £200,000
2. acquires fixtures and fittings for £75,000 Fixed assets are held not for resale but for use by the
3. stocks the shop with £200,000 of goods business. Current assets are cash and other assets that
4. buys a van for £10,000. the company expects to turn into cash (e.g. stock). Current
liabilities (usually described as creditors due within one
The above are all acquired by payment of cash except for year, are all the liabilities that the company expects to have
the purchase of goods. Half of these are bought for cash to meet within 12 months. In balance sheets prepared and
and half are bought on credit terms requiring payment presented in accordance with UK GAAP, current liabilities
within four weeks following delivery (i.e. four weeks are deducted from current assets to arrive at a sub-total
16 Interpreting company reports and accounts

referred to as ‘net current assets’. Presentation under IFRS In our example, using the straight-line method, the
may be quite different from this (see Chapter 12). depreciation charges for the buildings, fittings and van are
set out below. Note that the land element of the land and
buildings (assumed to be £75,000) is not depreciated as
Trading transactions during the second year of trading
its life is assumed to be infinite and not subject to wear
and tear. The figures below show both the depreciation
The company:
expense in the profit and loss account (£12,000) as well
as the amount for fixed assets in the balance sheet
5. sells goods for £1,200,000
(£273,000).
6. buys goods for £850,000
Calculation of depreciation charge in the profit and loss
7. incurred expenses for wages and other expenses of
account using the straight line method (see Chapter 13):
£280,000.
Cost of asset
Depreciation for the year =
Expected useful life
Calculating profit for the year
For our company the depreciation charge for the year
To work out the profit for the year, further information is would be worked out as follows:
required:

Closing stock Fixed asset Cost Life Annual

depreciation
Some of the goods purchased were not actually sold, so £
the cost of these goods must be excluded from the profit Buildings 125,000 50 years 2,500
calculation. They will be included in the year-end balance Fittings 75,000 10 years 7,500
sheet as a current asset. Assume that the cost of these Motor van 10,000 5 years 2,000
goods amounts to £250,000. Depreciation 12,000
charge for the year

Depreciation

Allowance must be made for the wear and tear on fixed

assets during the year. This is done by means of a pro- Net book amount of fixed assets in the balance sheet
vision for depreciation. Depreciation is simply a way of
spreading the cost of the fixed asset over the period it is
being used. For example, assume a machine costs £5,000 Cost Accumulated Net book
and it will be used for ten years and at the end of this depreciation amount
period its value will be negligible. One way of calculating £ £ £
the depreciation charge would be to spread it evenly over Land 75,000 – 75,000
the ten years, charging an expense of £500 against the Buildings 125,000 2,500 122,500
profits of each year. 200,000 197,500
In practice, fixed assets will usually have some value at Fixtures and fittings 75,000 7,500 67,500
the end of their ‘useful lives’. This is referred to as resid- Motor vehicles 10,000 2,000 8,000
ual value (see also Chapter 13). 285,000 12,000 273,000
 Chapter 3 Accounting principles 17

The profit and loss account The balance sheet at the end of year 2

The profit and loss account for the second year is as This may now be completed:
follows:

£ £ £
Fixed assets
Sales (or turnover) 1,200,000 Freehold land and buildings 197,500
Less cost of goods sold (800,000) Fixtures and fittings 67,500
Motor vehicles 8,000
£
Opening stocks 200,000 273,000
Purchases 850,000 Current assets
1,050,000 Stock 250,000
Less: closing stock 250,000 Debtors 80,000
800,000 330,000
Current liabilities (or creditors due within 1 year)
Gross profit 400,000 Trade creditors 120,000
Wages and other expenses (280,000) Taxation payable 27,000
Depreciation (12,000) Overdraft 75,000
Profit before tax 108,000 222,000
Corporation tax 27,000 Net current assets 108,000
Profit for the year 81,000 Total assets less current liabilities 381,000

The bank account

The movement on the bank account is summarised as Capital and reserves

follows: £
Ordinary share capital 300,000
£ £ Profit and loss reserves 81,000
Overdrawn bank account at
beginning of year (85,000) 381,000
Receipts from sales 1,120,000

Sales during the year 1,200,000

Less amounts not yet received
(represented by debtors) (80,000)
Cash collected 1,120,000
Format and terminology differences – UK GAAP
and IFRS compared
Payments to suppliers for goods (830,000)
Some of the more common terminology differences are as
Owing at beginning of year 100,000 follows. Other differences will be referred to in specific
Purchases during the year 850,000
chapters later in the text.
950,000
Less amounts owing at end
of year (represented by
creditors) 120,000
UK GAAP term IFRS term
Cash paid 830,000
Profit and loss account Income statement
Wages and expenses (280,000) Turnover Revenue
Debtors Trade and other receivables
Overdrawn bank account at
Stocks Inventories
end of year (75,000)
18 Interpreting company reports and accounts

Stocks are valued at the lower of cost and net realis-

Accounting policies – UK GAAP
able value, after making due allowance for obsolete
and slow-moving items.
Financial Reporting Standard 18 (FRS 18) on Accounting
Assets held under hire-purchase agreements are
policies, states that the standard ‘sets out the principles to
capitalised and disclosed under tangible fixed assets
be followed in selecting accounting policies and the dis-
at their fair value. The capital element of the future
closures needed to help users to understand the accounting
payments is treated as a liability and the interest is
policies adopted and how they have been applied’.
charged to the profit and loss account on a straight
line basis.
Example – Statement of accounting policies Rentals applicable to operating leases where sub-
stantially all of the benefits and risks of ownership
This usually appears in the annual report at the start of the remain with the lessee are charged against profits on
section dealing with the notes to the accounts. The state- a straight line basis over the period of the lease.
ment begins with the accounting convention or basis of The company operates a defined contribution
accounts, and then deals in turn with each major account- pension scheme for employees. The assets of the
ing area. The following is a typical example: scheme are held separately from those of the com-
pany. The annual contributions payable are charged
to the profit and loss account.
Deferred tax is provided in full in respect of
taxation deferred by timing differences between the
Basis of accounting treatment of certain items for taxation and accounting
purposes. The deferred tax balance has not been dis-
The accounts have been prepared under the historical counted. Deferred tax assets are recognised only
cost convention. when recovery is likely.
Turnover comprises the fair value of the consider- Assets and liabilities in foreign currencies are
ation received or receivable for the provision of print- translated into sterling at the rates of exchange ruling
ing services, and is net of value added tax. at the balance sheet date. Transactions in foreign
Turnover is recognised when the service has been currencies are translated into sterling at the rate
provided and all obligations to the customers have of exchange ruling at the date of the transaction.
been fulfilled. Exchange differences are taken into account in arriv-
Amortisation is calculated so as to write off the ing at the operating profit.
cost of an asset, less its estimated residual value, over
the useful economic life of that asset as follows:
Goodwill – 10% straight line
Depreciation is calculated so as to write off the cost Accounting policies – IFRS
of an asset, less its estimated residual value, over the
useful economic life of that asset as follows: The accounting policies statement under IFRS is more
detailed and complex than its UK GAAP counterpart.
Freehold Property – nil A typical example for a listed company appears below
Plant & Machinery – 20–33% straight line to give a flavour at this stage in the book. Each topic area
Computer Equipment – 33% straight line under IFRS is referred to at the end of each relevant chap-
Motor Vehicles – 33% straight line ter. Readers may wish to revisit the example below when
Office Equipment – 33% straight line they have completed the relevant chapters.
 Chapter 3 Accounting principles 19

ROK PLC Annual Report 2006 thereafter for subsequent changes in the Group’s
share of net assets.
Notes to the consolidated Financial Statements
Revenue and profit recognition
1. Accounting Policies
Building
Basis of preparation Revenue recognised on building activities reflects
Rok plc (the Company) is a company domiciled in the value of work performed. The amount of profit
the United Kingdom. Both the Company financial attributable to the stage of completion of a contract
statements and the Group financial statements have is recognised when the outcome of the contract can
been prepared and approved by the directors in be foreseen with reasonable certainty. The results
accordance with International Financial Reporting for the year include adjustments for the outcome of
Standards as adopted by the EU (Adopted IFRSs). On contracts executed in both the current and preceding
publishing the Company financial statements here years. These adjustments arise from claims by
together with the Group financial statements, the customers or third parties in respect of work carried
Company is taking advantage of the exemption in out and claims and variations on customers or third
s230 of the Companies Act 1985 not to present its parties for variations to the original contract.
individual income statement and related notes that Provision for claims against the Group is made
form a part of these approved financial statements. as soon as it is believed that a liability will arise.
At the date of issue of these financial statements Claims and variations made by the Group are
the following standards and interpretations, which not recognised in the income statement until the
have not been applied in these financial statements, outcome is reasonably certain. Where it is foreseen
were in issue but not yet effective: that a loss will arise on a contract, provision for the
IFRS 7 Financial Instruments Disclosures expected loss is made in the current year.
IFRIC 7 Applying the Restatement Approach under
IAS 29 Financial Reporting in Maintenance
Hyperinflationary Economies Revenue and profit is recognised on projects which
IFRIC 8 Scope of IFRS 2 have been completed.
IFRIC 9 Reassessment of Embedded Derivatives
Development
The directors anticipate that the adoption of these Revenue and profit on the Group’s development
standards and interpretations, in future periods will activities are recognised as follows. Revenue on the
have no material impact on the financial statements sale of development properties is recognised when
of the Group. the group has transferred to the buyer the significant
The financial statements have been prepared on risks and rewards of ownership of the development
the historical cost basis, except where otherwise property. This is achieved when legal title is
indicated. The principal accounting policies adopted transferred to the buyer if a property is pre-sold
are set out below. and the Group has construction work to complete
or rental guarantees in respect of un-let space are
Subsidiaries and joint ventures outstanding, the Group reviews the nature and extent
The consolidated financial statements comprise of its continuing involvement to assess whether
the Company and its subsidiaries and the Group’s it is appropriate to recognise revenue. Where the
interest in jointly controlled entities. conditions for the recognition of revenue are met
The results of subsidiary undertakings acquired or but the Group still has significant acts to perform,
disposed of are included in the consolidated income revenue is recognised as the acts are performed.
statement from the date of acquisition until the Revenue and profit on all other commercial property
date of disposal. The Company’s investments in development activities is recognised on legal
subsidiaries are stated at cost less any impairment. completion.
The consolidated financial statements include
the Group’s appropriate share of joint venture Goodwill and other intangible assets
undertakings’ post tax profits in the consolidated All business combinations are accounted for by
income statement after aligning the accounting applying the purchase method. In respect of business
policies with those of the Group. Investments in joint combinations that have occurred since 1 January
venture undertakings are accounted for under the 2004, goodwill represents the difference between the
equity method, initially stated at cost and adjusted cost of the acquisition and the fair value of the net
s
20 Interpreting company reports and accounts

identifiable assets acquired. In respect of acquisitions Finance leases

prior to this date, goodwill is included at the Assets obtained under finance leases and hire
carrying amount recorded under UK GAAP at the purchase contracts are capitalised at their fair value
date of transition. on acquisition and depreciated over their estimated
Goodwill is stated at cost less any accumulated useful lives, The corresponding liability to the lessor
impairment losses. Goodwill is allocated to is included in the balance sheet as a finance lease
cash-generating units and is tested annually for obligation. The finance charges are allocated over
impairment and more frequently if there are the period of the lease in proportion to the capital
indications of impairment. Any excess of the fair element outstanding.
value of net identifiable assets acquired over the
cost of an acquisition is recognised directly in the Taxation
consolidated income statement. Income tax on the profit or loss for the year
Intangible assets other than goodwill acquired comprises current tax and deferred tax. Income tax
by the Group are stated at cost less accumulated is recognised in the consolidated income statement
amortisation and impairment losses. Amortisation is except to the extent that it relates to items recognised
charged on a straight-line basis over the intangible directly in shareholders’ equity.
assets’ useful economic life. These have been Current tax is the tax expected to be payable on the
estimated as follows: taxable profit for the year, calculated using tax rates
enacted or substantively enacted by the balance sheet
Brands – between 4 and 5 years date, and any adjustment to tax payable in respect of
Customer relationships – 10 years previous years.
Deferred tax is recognised on temporary differences
Intangible assets are tested for impairment if there are
between the carrying amounts of assets and liabilities
circumstances which indicate that an impairment
in the balance sheet and the amounts attributed to
might have arisen.
such assets and liabilities for tax purposes. Deferred
tax liabilities are generally recognised for all taxable
Property, plant and equipment temporary differences and deferred tax assets are
Property, plant and equipment is stated at cost less recognised to the extent that it is probable that
accumulated depreciation. Depreciation is charged future taxable profits will be available against which
on a straight-line basis so as to write off the cost deductible temporary differences can be utilised.
over their useful economic lives. These have been Deferred tax relating to charges made directly to
estimated as follows: equity is recognised in equity.
Leasehold improvements – lower of the remaining
life of the lease or 10 years Employee benefits
Plant and machinery – between 4 and 7 years The Group operates a defined contribution pension
Office and computer equipment – between 3 and scheme ‘Rokplan’ and contributions to the scheme
5 years are charged to the consolidated income statement as
incurred.
The Group also has three defined benefit pension
Work in progress schemes which are closed to new members and
Development work in progress is carried at the future service accrual. The assets of the schemes
lower of cost and net realisable value, net of progress are held separately from those of the Group.
payments, interest charges incurred in respect of Pension scheme assets are measured using fair
development projects are charged to the income values as at the respective balance sheet dates.
statement as incurred. Pension scheme liabilities are stated at their
Building and Maintenance work in progress is present value calculated by discounting at the current
stated at the lower of cost and net realisable value, rate of return on a high quality corporate bond of
less interim receipts. Cost comprises direct materials, equivalent term and currency as the liabilities. The
direct labour and subcontractor costs. expected return on scheme assets and the increase
during the period in the present value of the
Operating leases schemes’ liabilities arising from the passage of time
Operating lease rentals paid are charged on a are included in other finance charges. Actuarial gains
straight-line basis to the consolidated income and losses are recognised in equity and presented in
statement in the period to which the rentals relate. the statement of recognised income and expenses.
s
 Chapter 3 Accounting principles 21

Share-based payments Trade receivables

Charges for employee services received in exchange Trade receivables do not carry any interest and
for share-based payments have been made for all are stated at their nominal value as reduced by
options granted after 7 November 2002 in accordance appropriate allowances for estimated irrecoverable
with IFRS 2 ‘Share-Based Payment’. amounts.
Options granted under the Group’s employee share
schemes are equity settled. The fair value of such Trade payables
options has been calculated using a stochastic model, Trade payables are not interest bearing and are stated
based upon publicly available market data, and is at their normal value.
charged to the consolidated income statement over
the vesting period. Dividends
Dividends are recorded in the Group’s financial
Cash and cash equivalents statements in the period in which they are approved
Cash and cash equivalents as stated in the cash flow or paid.
statement include the Group’s cash balances and
overdrafts.
 CHAPTER 4 The annual report

annual reports are generally available on

Information other than the financial statements
request from the company’s registered office
but a quicker way of obtaining the information
In this and the following two chapters we look at what
is to visit the relevant company’s website and
can be learned from those parts of the report of a company
to look for the section that deals with ‘investor
that are not strictly part of the accounts. The directors’
relations’ (or a similar title).
report has long been part of the reporting system and is
required by the Companies Act 1985 (to be replaced by the
Companies Act 2006). The other documents covered in Most companies archive annual reports and interim
these chapters include the chairman’s statement, the chief accounts so that it is possible to make comparisons over
executive’s review, the operating and financial review, the past years.
corporate governance report, and the remuneration report.

The mandatory parts of the annual report

This list is a moving target – narrative reporting disclosure

What is the annual report? requirements for fully listed companies will be extended
when the relevant requirements of the Companies Act
We referred to the term ‘annual report and accounts’ in 2006 come into force for accounting periods commencing
Chapter 1. The annual report is effectively a corporate on or after 1 October 2007.
document that includes a package of information both The key components and the chapters in which further
numerical and narrative. Some of this information is information is included are as shown below.
required by law, accounting regulation, the Financial
Services Authority (FSA) or the London Stock Exchange.
Other information is included as a result of following
recommended guidance or industry best practice. Key components Chapter
This chapter is concerned with those parts of the annual
Directors’ report 4
report that are mandatory. Corporate governance require- Business review 4
ments specific to fully listed companies are dealt with in Annual accounts:
Chapter 6. The operating and financial review and best Profit and loss account (referred to as income
practice narrative reporting are dealt with in Chapter 5. statement under IFRS) 7
Balance sheet 12
Equity statement 11
Cash flow statement 26
In this and subsequent chapters we refer to a Notes to the accounts Various
large number of practical examples – either Remuneration report (directors’ remuneration) 6
by including extracts from a report or by Corporate governance statement (mandatory
reference to a website. The relevant hard copy for fully listed companies only) 6
 Chapter 4 The annual report 23

Best practice (non-mandatory) parts of the annual Results and dividends

report
These should be disclosed in the directors’ report although
These include the following – but note the information is some companies give fairly brief information and cross-
structured and packaged in different ways by different refer to more detailed disclosures elsewhere in the notes
companies and groups. to the financial statements. The following example from
COMPUTACENTER is typical of the level of disclosure.

Non-mandatory part Chapter

Chairman’s report 5 COMPUTACENTER Extract from the Directors’

Chief executive’s report 5 Report 2005
Operating and financial review (OFR) 5
Corporate social responsibility report 5 The Group’s activities resulted in a profit before
Environmental report 5 tax of £34.0 million (2004: £9.8 million). Due to
Social and community issues 5 the implementation of IFRS, Dividends are now
recognised in the accounts in the year in which they
are paid, or in the case of a final dividend, when
approved by the shareholders. As such, the amount
The directors’ report recognised in the accounts, as described in note 10, is
made up of last year’s final dividend and the interim
Disclosure requirements dividend of this year.
The final dividend, if approved, will be paid on
30 May 2006 to those shareholders on the register
The Companies Act 1985 requires all companies to pres- as at 5 May 2006. The company paid an interim
ent a directors’ report as part of the annual report presented dividend of £4.6 million on 21 October 2005.
to shareholders. In practice, information provided in the
directors’ report may be:
n required by law, in particular the Companies Act 1985; Research and development
n required for listed companies by the Financial Services
Authority (FSA); The directors’ report should include an indication of the
n voluntary information, recommended as best practice activities (if any) in the field of research and development
disclosure. as ENODIS discloses.

Unless indicated otherwise, the following are required by

law to be disclosed within the report.
ENODIS Extract from the Directors’ Report 2005

Principal activities 4. Research and development

During the period the Group incurred expenditure
The report must give details of the principal business of on research and development of £11.7m (2005:
£10.1m). The Group’s major research and
the company and its subsidiaries, and any significant
development facility, the Enodis Technology Center
changes. (‘ETC’) at New Port Richey near Tampa, Florida,
provides a central resource for the Group’s research
Business review and development activity. Many of the Group’s
operating companies also have local development
facilities.
All companies, except for those that are classified as
small in size (see Chapter 27) must include a business
review, either as part of the directors’ report, or cross-
referenced to it. The business review must contain a fair Directors and directors’ interests in shares
review of the business of the company and other matters –
detailed content requirements are referred to later in this The report should disclose names of persons who were
chapter. directors at any time during the year and their interests in
24 Interpreting company reports and accounts

shares or debentures of the company, both at the beginning

of the financial year (or date of appointment as director, if During the year we continued to use the
later) and at the end of the year. Government’s ‘two tick’ disability symbol to
Unlisted companies are no longer required to present demonstrate our commitment to interviewing those
people with disabilities who fulfil the minimum
this information for directors’ reports that are signed on or criteria, and endeavouring to retain employees
after 6 April 2007. Fully listed companies must still give in the workforce if they become disabled during
this information because of Listing Rules requirements. employment. We will actively retrain and adjust
their environment where possible to allow them
to maximise their potential. We continue to work
Post-balance sheet events with external organisations to provide workplace
opportunities on the ‘Workstep Programme’.
The report should include particulars of any important
events that have occurred since the balance sheet date
as WORKSPACE shows (note also the requirements of
FRS 21/IAS 10 – see page 215). Employee consultation and involvement

Companies with more than 250 employees are required to

WORKSPACE GROUP Extract from the Directors’ Report include a statement describing the action that has been
2006 taken regarding provision of information, consultation,
Post-balance sheet events and future developments encouraging involvement in the company’s performance
Following the year end, the Group’s interest through employee share schemes, etc., and achieving
in the Stevenage Business Centre was sold for a awareness of employees in financial and economic factors.
consideration of £3.2m, Wharf Road for £7.0m and Companies vary in the extent of detail given in this area.
the Group purchased No 1 Morie Street, London
SW18 for a consideration of £4.4m. The Group plans Good examples are MARKS AND SPENCER and WORKSPACE
to continue the development and expansion of its GROUP.
business and has targeted the acquisition of at least
£60m of new property in the current year. Further,
the Group plans to extend its activities to exploit the
potential for improving, extending and changing the
use of selected properties. Following the year end MARKS AND SPENCER GROUP Extract from Directors’
the Group advised that it had reached agreement Report 2006
to sell a portfolio of properties with potential for
improvement to a joint venture with a developer, Employee involvement
Glebe, in which the Group would take a 50% stake. We have maintained our commitment to employee
involvement throughout the business.
Employees are kept well informed of the
performance and objectives of the Group through
Employees with disabilities personal briefings, regular meetings and e-mail. These
are supplemented by our employee publication, and
Companies with more than 250 employees are required to video presentations. Business involvement Groups in
stores, and head office locations represent employees
disclose policies for employment, training, career develop-
in two-way communication and are involved in
ment and promotion regarding employees with disabilities the delivery of change and driving business
as MARKS AND SPENCER shows. improvement.
The eleventh meeting of the European Council
took place last July. This council presents an
MARKS AND SPENCER GROUP Extract from Directors’
additional forum for communicating with employee
Report 2006 representatives from the countries in the European
Community.
Employees with disabilities Directors and senior management regularly visit
It is our policy that people with disabilities should stores and discuss, with employees, matters of
have full and fair consideration for all vacancies. current interest and concern to the business.
s
 Chapter 4 The annual report 25

We continue to support employee ownership Health and safety

through long-established employee share schemes, The Group’s policy is to provide and maintain
membership of which is service-related, details of safe and healthy working conditions, equipment
which are given on pages. . . . and systems of work for all of its employees and to
We maintain contact with retired staff through provide such information, training and supervision
communications from the Company and the Pension as they need for this purpose. The Group accepts
Trust. Elections are currently under way to appoint responsibility for the health and safety of other
member-nominated trustees to the Pension Fund people who may be affected by its activities.
Board, including employees and pensioners. Our Whilst all employees of the Group have a
retired staff have also recently benefited from a responsibility in relation to health and safety matters,
significant increase in their M&S discount certain staff have been designated ‘workplace’
entitlement. responsibilities or other co-ordinating responsibilities
throughout the Group, and ultimately, at Board level,
Equal opportunities the Chief Executive has overall responsibility. Reports
The Group is committed to an active Equal on health and safety are made to each Board meeting.
Opportunities Policy from recruitment and selection,
through training and development, appraisal and
promotion to retirement. It is our policy to promote
an environment free from discrimination, harassment Environmental policies
and victimisation, where everyone will receive equal
treatment regardless of gender, colour, ethnic or Increasingly, larger companies are providing non-
national origin, disability, age, marital status, sexual
mandatory disclosures on environmental policies either
orientation or religion. All decisions relating to
employment practices will be objective, free from within the directors’ report (see AMSTRAD below) or in a
bias and based solely upon work criteria and separate part of the annual report (see Chapter 5).
individual merit.
The Group is responsive to the needs of its
employees, customers and the community at large
AMSTRAD Extract from the Directors’
and we are an organisation that endeavours to use
Report 2005/2006
everyone’s talents and abilities to the full.
Environmental matters
The company seeks to minimise the environmental
impact of its business and to operate in accordance
with the standards required by law and codes of
best practice.
WORKSPACE GROUP Extract from the Directors’ The company is currently preparing for compliance
Report 2006 with the Waste Electrical and Electronic Equipment
(‘WEEE’) Directive. The WEEE Directive sets goals
Employment policies for the recycling of electrical goods and is currently
The Group aims to create a working environment planned to come into effect in the UK in 2007. The
in which every current or prospective employee is Restriction of Hazardous Substances in Electrical and
given equal opportunity in selection, development Electronic Equipment (‘RoHS’) Directive came into
and promotion. effect on 1 July 2006 and prohibits the use of lead
During the year a Staff Forum has been established solder and certain other restricted substances. The
to improve communication and consultation with Group’s products imported after that date comply
employees. with the RoHS Directive.
[Additionally, Section 2 of the Workspace Annual
Report contains a number of individual reports, one
of which is ‘Our people’ – this sets out the Group’s
key priorities for its people policies, and refers
specifically to: Investment in people; Organisation Supplier payment policy
structure, leadership and succession; Composition of
workforce; Training and development; Remuneration,
performance and retention; Staff and customer The directors’ report should disclose the policy for the
surveys.] payment of creditors and the average period of payment of
creditors (often referred to as ‘creditor days’). For a group
26 Interpreting company reports and accounts

of companies, this should be disclosed for both the group and

for the parent company (see MANAGEMENT CONSULTING MARKS AND SPENCER GROUP Extract from Directors’
GROUP below). The number of payment days should be Report 2006
calculated by dividing the aggregate amount of trade cred- Purchase of ordinary shares
itors at the balance sheet date by the aggregate amount of The company is authorised by the shareholders to
purchases and expenses for the year. purchase, in the market, the Company’s own shares,
as permitted under the Company’s Articles of
Association. The Company engages in share buy-
backs to create value for the shareholders, when
cash flow permits and there is not an immediate
alternative investment use for the funds. During
MANAGEMENT CONSULTING GROUP Extract from the the year, no shares were bought back under this
Directors’ Report 2006 authority. This authority is renewable annually
and approval will be sought from shareholders at
Creditor payment policy the Annual General Meeting in 2006 to renew the
The Group’s policy, in relation to all of its suppliers, authority for a further year. It is the Company’s
is to agree the terms of payment when first present intention to cancel any shares it buys
contracting with the supplier and to abide by those back, rather than hold them in Treasury.
terms provided that it is satisfied that the supplier
has provided the goods or services in accordance
with the agreed terms and conditions. The Group
does not follow any code on payment practice
but operates a prompt payment policy on settling Substantial shareholdings
invoices. The amount of trade creditors shown in
the balance sheet at 31 December 2006 represents Fully listed companies are required to disclose individual
50 days of average purchases during the year (2005: shareholdings which amount to 3% or more of the com-
24 days) for the Company and 20 days (2005: 15 days)
for the Group.
pany’s issued share capital (MANAGEMENT CONSULTING
GROUP below). There is a separate CA 85 requirement to
disclose directors’ shareholdings (see above) and there is
no de minimis for this.

Charitable and political donations

MANAGEMENT CONSULTING GROUP Extract from the
If the combined amount of charitable and political Directors’ Report 2006
donations exceeds £200, the Report should disclose
Substantial share interests
the split between the two totals. Where the amount of
As at 6 March 2007 (the latest practicable date
an individual political donation exceeds £200, the report prior to the issue of this Report), the Company has
should disclose the name of the recipient and the amount been notified, in accordance with Chapter 5 of the
given. Disclosure and Transparency Rules issued by the
MARKS AND SPENCER GROUP give details in their 2006 Financial Services Authority, of the following
interests in the ordinary share capital of the
directors’ report of charitable donations. The report also
Company:
refers to political donations making clear that it is com-
pany policy not to make such donations, but also draws
attention to the complexities and potential pitfalls of the Number of Percentage of
relevant legislation. ordinary issued share
shares capital
Purchase of own shares Schroders PLC 31,980,090 11.8
Barclays PLC 23,868,211 8.81
Companies must give detailed disclosures regarding acqui- Legal and General 10,861,907 4.01
Group PLC
sitions of their own shares. MARKS AND SPENCER GROUP is
a typical example.
 Chapter 4 The annual report 27

Going concern companies disclose varies considerably. Many companies

publish separate CSR reports – either as part of the overall
The directors’ report should make reference to the going annual report or within a specifically designated section
concern assumption. This is not a legal requirement but of their corporate website. CSR reports are discussed in
is always included in view of its fundamental importance Chapter 5, but the extract below, relating to MANAGEMENT
and reference to it elsewhere in the annual report, as CONSULTING GROUP, is an example of a company that
WORKSPACE GROUP shows. includes this within its directors’ report.

WORKSPACE GROUP Extract from the Directors’ MANAGEMENT CONSULTING GROUP Extract from the
Report 2006 Directors’ Report 2006
Going concern Corporate social responsibility
After making enquiries, the directors have a The Group is committed to making a positive
reasonable expectation that the Group and the social and economic contribution in all the places
Company have adequate resources to continue in it operates. This is driven by the Board. Emphasis is
operational existence for the foreseeable future. placed on ensuring that we continue to create and
For this reason, they continue to adopt the going maintain trust in and loyalty to our Group by all
concern basis in preparing the accounts. our stakeholders.
The Board annually assess the social,
environmental and ethical (SEE) impact of the
Group’s business and ensures that any risks arising
Risk management are being managed appropriately as recommended by
the Association of British Insurers (ABI). The Board
Companies other than those which are small must give has carried out an assessment of its SEE risks and
an indication in the directors’ report of the financial risk based on feedback from management has concluded
that the Group’s exposure to SEE risks is limited,
management objectives and policies of the company and primarily due to the nature of its operations.
the exposure of the company to various categories of risk. Further information on the environmental and
WORKSPACE GROUP includes this and also cross-refers to ethical policies adopted are provided below. . . .
detailed extracts elsewhere in its annual report. (The Report then continues to provide information
covering two pages on the following: Environmental
policy; Energy use and climate change; Waste and
recycling; Water; Health and Safety; Whistleblowing;
WORKSPACE GROUP Extract from the Directors’ Employees. These have not been reproduced below
Report 2006 but are available on page 25 of the Annual Report for
2006 – see www.mcgplc.com.)
Risk Management
The financial risk management objectives and
policies of the Company are set out in note 17(g)
to the financial statements and in the Corporate Statement of directors’ responsibilities
Governance section of the report on page 44.
This is not a legal requirement but is always included in
view of its fundamental importance and reference to it
Corporate Social Responsibility (CSR) elsewhere in the annual report (e.g. audit report and
corporate governance statement), as WILMINGTON GROUP
Much of the disclosure under this heading is best practice shows. The wording follows that in the Auditing Practices
rather than mandatory, and hence the extent to which Board Bulletin 2006/6, Appendix 5.
28 Interpreting company reports and accounts

aware, there is no relevant audit information of which

WILMINGTON GROUP Extract from Directors’ the company’s auditors are unaware, and the director
Report 2006 has taken all the steps in order to make himself aware of
Directors’ responsibilities any relevant audit information (see WILMINGTON GROUP
The Directors are responsible for preparing the below). This requirement applies to all companies, includ-
annual report and the financial statements in ing small companies, except those that have taken audit
accordance with applicable law and International exemption.
Financial Reporting Standards as adopted by the
European Union. They are also responsible for
ensuring that the annual report includes information
required by the Listing Rules of the Financial WILMINGTON GROUP Extract from Directors’
Services Authority. Report 2006
Company law requires the Directors to prepare
Disclosure of information to auditors
financial statements for each financial year which
Each of the Directors has confirmed that:
give a true and fair view of the state of affairs of the
Company and Group and of the profit or loss of the (a) so far as he is aware, there is no relevant audit
Group for the period. In preparing these financial information of which the Company’s auditors
statements the Directors are required to: are unaware, and
(b) he has taken all the steps that he ought to have
n select suitable accounting policies and then apply
taken as a Director in order to make himself
them consistently;
aware of any relevant audit information and to
n make judgements and estimates that are reasonable
establish that the Company’s auditors are aware
and prudent;
of that information.
n state whether applicable accounting standards have
been followed, subject to any material departures
disclosed and explained in the financial
statements;
n prepare the financial statements on the going
concern basis unless it is inappropriate to presume The business review
that the Company will continue in business.
The Directors are responsible for keeping proper Overview of requirements
accounting records that disclose with reasonable
accuracy at any time the financial position of the CA 85 requires the directors of all companies other than
Company and the Group and enable them to ensure
that the financial statements comply with the small companies to include a business review as part of
Companies Act 1985. They are also responsible for the directors’ report. This must contain a fair review of the
safeguarding the assets of the Group and hence for business of the company, and a description of the principal
taking reasonable steps for the prevention and risks and uncertainties facing the company.
detection of fraud and other irregularities. The business review should be a balanced and compre-
The Directors are responsible for the maintenance
and integrity of the corporate and financial hensive analysis (consistent with the size and complexity
information included on the Company’s website. of the business) of the development and performance of
Legislation in the United Kingdom governing the the business of the company during the financial year, and
preparation and dissemination of the financial the position of the company at the end of that year.
statements and other information included in The review should include analysis relating to finan-
annual reports may differ from legislation in other
jurisdictions. cial ‘key performance indicators’ (KPIs), to the extent
necessary to understand the development, performance or
position of the business.
Companies other than medium-sized companies are also
Disclosure of information to auditors required to include information relating to non-financial
key performance indicators.
CA 85 requires that the directors’ report must contain The above requirement became mandatory for financial
a statement to the effect that so far as each director is years that commenced on or after 1 April 2005.
 Chapter 4 The annual report 29

General disclosure examples our rights could involve substantial costs and the
outcome cannot be predicted with certainty.
WILMINGTON GROUP Annual Report 2006 – Business
Commercialisation
Review, pp. 4–13 (www.wilmington.co.uk) The Group’s commercial progress depends upon
WOLSELEY Annual Report 2006 – Performance its ability to establish and maintain successful
Review, pp. 20–41 (www.wolseley.com) relationships with appropriate licensees and other
DSG INTERNATIONAL Annual Report 2005/6 – third parties to successfully exploit IVT through
development, manufacturing and distribution
Directors’ Report, pp. 30–37 (www.dsgplc.com)
agreements.

Competition
It is possible that competitors may develop
Principal risks and uncertainties technologies that compete with the group’s
technologies. The ability of the group to defend
The directors’ report must contain a description of the its competitive advantages rests on maintenance
principal risks and uncertainties facing the company. of appropriate development capacity as well as
A good example from the retail sector is the 2006 securing the commercialisation described above
with appropriate lead times.
annual report of MARKS AND SPENCER GROUP PLC, page 37
(www.marksandspencer.com/the company). The principal Financial
risks and uncertainties are set out in a table covering a page The group’s present financial resources, whilst
and are grouped under five main areas: believed to be sufficient to support the planned
commercialisation of the group’s technology, are
limited such that, if sufficient revenue cannot be
n clothing and home, generated within anticipated timescales from
n food, royalties, sales of products and services and
n people, dividends from joint ventures, or if new
n stores, expenditure is required to exploit additional
n business interruption. business opportunities, it may become necessary
to raise additional funds.

For each of these five risk areas, the table sets out Employees and skills
descriptions of the main issues and examples of ‘mitigating Retention of key employees remains a critical
activities’. factor in the group’s successful delivery of its
The relevant extract from the directors’ report of business plan.
These areas and uncertainties are reviewed,
TOROTRAK is as follows.
controlled and mitigated according to risk
procedures described on page 19 [not reproduced].

TOROTRAK Extract from Directors’ Report 2006

Principal risks
The key risks and uncertainties facing the group
include the following:
Other disclosure examples

Patent protection WS ATKINS Annual Report 2006 – Operating and

The continuing ability to establish, protect and Financial Review, p. 41 (www.atkinsglobal.com)
enforce our proprietary rights is fundamental to DSG INTERNATIONAL Annual Report 2005/6 –
the group. This is principally achieved through the
process of patent application and establishing patent
Directors’ Report, pp. 32–35 (www.dsgplc.com)
protection. However, should these applications or WILMINGTON GROUP Annual Report 2006 – Business
granted patents be challenged, then the defence of Review, p. 7 (www.wilmington.co.uk)
30 Interpreting company reports and accounts

Financial key performance indicators (KPIs) n customer retention,

n new business from existing customer referrals,
The business review must (to the extent necessary for an n environmental spillage,
understanding of the development, performance or pos- n waste disposal,
ition of the company’s business) include analysis using n CO2 emissions,
key performance indicators. Examples of financial KPIs n employee health and safety,
include: n accident statistics,
n staff satisfaction levels,
n gross profit margins, n staff retention levels,
n net operating margin, n efficiency (complaints as percentage of total output).
n return on capital employed,
n gearing/interest cover, For more details of possible non-financial KPIs appropri-
n sales growth, ate to different business sectors, see the ASB’s Reporting
n sales per employee, Statement on Operating and Financial Review, Imple-
n sales per square foot, mentation Guidance examples.
n operating cash flow,
n liquid asset ratio,
n hire income as a percentage of fleet cost. Disclosure examples

WORKSPACE GROUP Annual Report 2006, pp. 2, 82

(www.workspacegroup.co.uk)
WORKSPACE GROUP Sustainability Report, p. 32
Disclosure examples
(www.workspacegroup.co.uk)
WM MORRISON SUPERMARKETS Corporate Social Re-
TESCO Annual Report 2006 – Operating and Financial
Review (www.tescocorporate.com) sponsibility Report 2007, p. 3 (www.morrisons.co.uk)
GEORGE WIMPEY Annual Report 2006, pp. 20, 21
WOLSELEY Annual Report 2006 – Performance
Review, pp. 20–41 (www.wolseley.com) (www.georgewimpeyplc.co.uk)
GEORGE WIMPEY Corporate Social Responsibility
DSG INTERNATIONAL Annual Report 2005/6 –
Directors’ Report, p. 36 (www.dsgplc.com) Report 2006, p. 7 (www.georgewimpeyplc.co.uk/csr)
TESCO Annual Report 2006, p. 7 (www.
MARKS & SPENCER Annual Report 2006 – Operating
and Financial Review (www.marksandspencer.com) tescocorporate.com)
WS ATKINS Annual Report 2006 – Operating and
Financial Review, p. 41 (www.atkinsglobal.com)
WILMINGTON GROUP Annual Report 2006 – Business
Review, p. 7 (www.wilmington.co.uk)
Non-financial key performance indicators (KPIs)

The business review must (to the extent necessary for an

understanding of the development, performance or posi-
tion of the company’s business) include where appropriate The enhanced business review
analysis using other key performance indicators including
information relating to environmental matters and em- New requirements in the Companies Act 2006 will require
ployee matters. Medium-sized companies are exempt from fully listed companies (only) to include additional dis-
this disclosure requirement. closures in the business review, including main trends and
Examples of non-financial KPIs include: factors likely to affect the future development, perform-
ance and position of the company’s business. These dis-
n market share, closures referred to in Chapter 5 become mandatory for
n number of subscribers, accounts periods beginning on or after 1 October 2007.
 Chapter 4 The annual report 31

Presenting the business review in practice 2. Enhanced Business Review Requirements

The Group is obliged to comply with the Enhance
The business review is presented by companies in a variety Business Review disclosures required by the
of different ways, including: Companies Act 1985 as amended to comply with
the EU Modernisation Directive. The Group has
chosen to include much of the disclosure within its
n as a separate statement entitled ‘Business review’; Operating and Financial Review (‘OFR’) including
n as a separate component of the directors’ report; the following:
n referred to in the directors’ report ‘by reference’ to other
n disclosure of key performance indicators for the
parts of the annual report such as the chairman’s state- Group on page 18;
ment, the chief executive’s statement, the operating and n disclosure of principal risks and uncertainties
financial review, or the finance director’s review. affecting the business on page 21;
n disclosure of financial risk management policy
including the use of financial instruments on
Different approaches to presenting the pages 28 and 29 and pages 73 to 77.
business review In addition the Group has made certain disclosures
about its environmental impact in the current year
Two examples are shown here – WILMINGTON GROUP and in the Corporate Social Responsibility Statement on
ENODIS. pages 30 and 31.

WILMINGTON GROUP Annual Report 2006

The Annual Report of Wilmington plc for 2005 is a Annual review and summary financial
good example of a self-contained business review statements
which contains the following main headings and sub-
headings:
Several large companies take advantage of the CA 85
n IFRS (International Financial Reporting Standards); option to send an annual review and summary financial
n Overview of the Group’s financial performance;
n Earnings per share;
statements, as an alternative to sending the full annual
n Taxation; report and accounts. The relevant qualifying conditions for
n Cashflow; sending out such statements and what they must include
n Treasury policy; are set out in the Companies Act 1985.
n Business objectives and strategy;
n Key financial and operational targets (including
KPIs);
n Principal risks and uncertainties; MORRISON SUPERMARKETS The company issued an
n Wilmington’s people; Annual Review and Summary Financial Statement
n Review operations (covering business groupings 2007, covering the period up to 4 February 2007
and operations within each grouping); (www.morrisons.co.uk), containing the following:
n Social and community;
n Environmental policies. n Chairman’s statement;
n Chief Executive’s operating review;
n Board of Directors;
n Summary Directors’ Report;
n Summary Corporate governance report;
ENODIS Annual Report 2005 n Corporate social responsibility report summary;
n Independent auditors’ statement to the members;
Enodis plc is a good example of a business Review n Summary financial statement;
‘by reference’. The Annual Report for 2005 includes n Seven year summary of results;
the following paragraph as part of its Directors’ n Summary Directors’ remuneration report;
report: n Investor relations information.
32 Interpreting company reports and accounts

Having then studied the accounts (a process we will

Other examples discuss in detail in Chapters 30 and 35) and having exam-
ined any segmental analysis of turnover and pre-tax profits
SMITH & NEPHEW Summary Financial Statements 2006 between classes of business and any geographical analysis
(www.smith-nephew.com) of turnover and trading results outside the UK, the reader
TESCO Annual Review and Summary Financial will have a good idea of how the company has fared in the
Statements 2006 (www.tesco.com/corporate) past year, but little idea why (except in the context of hap-
pening to know that it was a good, average or bad year for
the industry or industries in which the company operates),
and little idea of how the company is likely to do in the
current year and beyond. It is to the chairman’s statement
and the operating review, if there is one, that we should
Sequence of study of a report and accounts look for this information.
A useful website for reviewing directors’ dealings in
It is difficult to lay down a set of rules as to the best order shares is www.digitallook.com. From the home page, click on
in which to study a report and accounts, and each indi- Investing, then on UK shares, then on directors’ dealings.
vidual will – indeed should – develop their own method.
The important thing is not to miss information regardless
of where it is presented.
One stockbroker tells us he always goes straight to The need to read the notes
the directors’ holdings to see if they are reducing their
holdings! Indeed, one co-author maintains on file details of The role of the notes is to amplify and explain the primary
all directors’ share transactions in their own companies financial statements, and it can be very misleading to read
and spends a few minutes each week studying them. the primary statements in isolation.
That the directors have sharply reduced their holdings Memorandum disclosure in the notes to the financial
in the company certainly tends to be a warning sign – but statements is not a substitute for recognition in the finan-
it is unwise for a director (or any other investor) to have cial statements, and does not correct or justify a misrepres-
too many eggs in one basket. Thus reductions are not entation or omission in the primary financial statements.
necessarily a warning signal – an individual director may However, some companies have certainly tried it on in the
have special, personal, financial needs at a particular time. past, and will probably do so in future. Let us give you two
Similarly, an increase in directors’ holdings tends to be examples from the accounts of now defunct companies:
encouraging particularly where a company’s shares seem
undervalued or under pressure, but directors can and do A year or so before its demise, the Southampton-based
get it wrong, personally as well as commercially, pouring golfing and tennis company LEADING LEISURE’s P&L
good money after bad even when it is their own. account showed a pre-tax profit of £6.7m. Note 1 to the
Major own-share activity on the part of one or more accounts reported that trading profit generated by the dis-
directors does, however, focus attention: something seems posal of properties to joint ventures amounted to £10m.
to be happening. One needs to find out what. Note 12 revealed additions to loans to related companies
It is certainly helpful to start by glancing at the chair- of £35.8m.
man’s statement and the directors’ report simply to see A sceptical analyst might suspect that Leading Leisure
whether anything has occurred which would invalidate a had loaned its joint venture partner the money to buy a
straightforward comparison between one year and another. 50% stake in the properties, and that the price of the 50%
If, for instance, a major acquisition took place early in the stake had been pitched to give Leading Leisure a £10m
year under review, almost all operating and financial ratios trading profit.
are likely to have been affected. This does not mean that Among other little gems in the notes, note 6 showed an
the ratios are useless: simply that the analyst must bear in extraordinary item (a now defunct accounting term) of
mind that change in composition every time he compares £1.3m ‘Reorganisation and aborted fund raising costs’.
one ratio with another. There was obviously more than one Doubting Thomas
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országról? Hol a vásárfia? Az «aranyos hintó»? Elrepültek azzal a
bagolyfejü pillék!
Julianna kivette a kebléből az ezüstgyopár csokrot s azt nyujtá a
kis fiának.
– Hm! mondá az, azzal a bölcs biráló tekintettel szemlélve meg
az ajándékot, a milyennel a hozzáértők szokták felbecsülni a kapott
kincs értékét: igaz-e az, vagy hamis?
Aztán csendesen bólintott a fejével.
– Köszönöm szépen. Ez épen jó lesz ide az én kriptámhoz
koszorunak az én kis halottaim számára.
S odatüzte a kis gyopárcsokrot a kis épületke homlokfalába.
Julianna kétségbeesetten kulcsolta össze a kezeit.
– Fiacskám! kis angyalom! Mit játszol te a halállal? Nem félsz
tőle?
– Nem, anyókám. Nem félek én semmitől. Látod, mikor elküldtél
magadtól: kis leánynak öltöztettél, azt mondtad maskarába
megyünk! Jaj de rossz dolog volt! Ha te azt megtudnád! Majd
megfagytunk; majd éhen elvesztünk. A farkasok is kergettek. Azután
sokáig feküdtem az ágyban. De sokat kiabáltam utánad éjszaka,
mikor rémitettek! iszonyukat láttam! De te csak nem jöttél! Aztán
csak elpihentem. Azt mondják, meghaltam. Már a kis koporsómat is
megcsináltatták. Megláthatod, ott van a tornáczban. Nem olyan rossz
ám az! Mikor halva voltam, nem álmodtam rosszat. Nem is tudom,
minek költöttek fel? Nézd: a szép hajam, hogy ott maradt a
másvilágon.
Ezek voltak aztán azok a gyilokdöfések, a mik keresztül járják azt
a dölyfös, nagyravágyó lelket; ezek a fulánkok, a mik beleszakadnak
abba a ravaszsággal, kiszámitással teljes szivbe! Hát van-e a
heraldikának annyi águ koronája, a melyik kárpótlást adjon azért az
aranyhajért, a mi e gyermekfőről eltünt? A világ minden fénye,
gazdagsága mentségnek elég-e egy elmulasztott éjszakáért a beteg
gyermek kórágya mellett?
Julianna a földön fetrengve sirt, és a homlokát verte a kezeivel.
A gyermek pedig nem segített neki sirni.
Gondosan betámasztá egy nehéz kővel a miniatur kripta nyilását,
hogy sirdúló bogarak be ne törhessenek, s aztán nagy okosan
rátámasztva az állát az öklére, ilyen bölcs reflexiókkal oktatá az
anyját:
– Én nem félek a haláltól, anyókám; de te félhetsz tőle. Előre
megmondom, hogy vigyázz magadra. Nagyapó azt mondta, hogy a
mikor meglát, rögtön meg fog ölni.
– No hát lásson meg. Rebegé Julianna és felkelt a földről.
A kis bölcs férfiu azonban megfogta a köntöse ránczát és
visszatartá:
– Várj még. Ne siess. Ott jön egy felhő. Villámlik. Várd meg, míg
mennydörögni fog. Nagyapótól akkor nem kell félni. Akkor ő fél.
Bebujik az üveg kalitkába. Én meg nevetek rajta. Én nem félek a
villámlástól, mennydörgéstől. Egész éjjel elnézném. Ő meg fél tőle.
Várj addig. Én aztán majd odavezetlek.
S mint a ki bölcs tanácsadása után még arról is meg van
győződve, hogy magas pártfogása mennyi sulylyal bir a jelen
esetben, felkérezkedett az anyja ölébe, s átkarolta annak a nyakát –
protectióból.
 XXXIII. FEJEZET.

A DÜHÖS OROSZLÁN AZ
ÜVEGKALITBAN.
Az öreg Ghéczy Zsigmond kastélya nem olyan volt, milyenek más
rendes uri házak szoktak lenni, a miknél a főszempont a lakályosság.
Ez egy valóságos labyrinth volt, örökké csukott ajtókkal, a miknek a
zárait tudomány volt kinyitni, se kulcs, se kilincs nem
engedelmeskedett ott a rendes erőműtani szabályoknak: azt ki
kellett tanulni, hogy mint kell a kilincset fél kézzel lenyomni, aztán a
zárpléhet másik kézzel felemelni, akkor hirtelen a térddel egyet
taszítani az ajtón, hogy felnyiljék. Azután következett egy hosszú
folyosó, a melyiknek a közepén van egy ajtó. Azt ki lehet nyitni. Van
benne egy sok fióku állvány, tele tányérokkal és csészékkel. Azt az
ember becsukja s békét hágy neki. A folyosó végén van egy szűk
lépcső, azon fölmegy az ember, talál maga előtt egy másik folyosót,
annak a közepén van egy ajtó, azon benyit, s egy fülkében találja
magát, mely tele van bundákkal. Ott nem marad: tovább keres; a
folyosó tulsó végén talál egy másik lépcsőt, azon megint lemehet s
ott van, a hol az előbb volt, a bejáratnál. Élő teremtésre pedig nem
talál, a ki megmagyarázza neki, hogy ha ezt meg amazt a rézkarikát
így meg amúgy elfordítja, hát akkor kimozdul a sarkából az egész
tányéros állvány s annak az üregében következik egy igazi lépcső, a
melyen aztán felmehet a ház belsejébe, s ha ott még egynéhány
csapó ajtóval meg tudott alkudni, s az üres, lakatlan szobák,
tornáczok tévesztőin el nem vesztette magát, valahogy elvégre
ráakad arra a donjonforma kerek toronyszobára, a hol az öreg úr
megtalálható, ha csakugyan otthon van. Ennek a toronyszobának
vastag pohárfenék üvegekből készült teteje van, azon keresztül
kapja a világosságot, azonkivül három lőrésforma szük ablaka, egyik
szögletében pedig van egy sülyesztő, melynek fogaskerekü
gépezetével a szobából egész a pinczébe lehet leereszkedni, a
honnan aztán kijárás van a rézbánya tárnáiba, s azokon keresztül az
erdők mélységeibe.
Zsigmond úrnak ezen napon különösen szorgos munkája volt.
Levelei érkeztek külföldről, Lengyelországból és Törökországból, a
menekült kuruczok vezéreitől. Azokban fontos utasítások voltak az
idebenn bujdosó kurucz vezérekhez. Új felkelést terveztek. Rákóczy
nem ismerte el a szatmári békekötést, épen úgy, mint a bécsi
magyar urak sem. Ő is folytatni akarta a harczot. Voltak új
szövetségesek, a kik ellenállásra biztatták, az orosz czár, I. Péter és a
török szultán. XIV. Lajos is igért, a mit igérhetett. Több volt mind
ennél az elkeseredés ide benn, a mit a bécsi urak garázdálkodása
okozott. A fegyvert lerakott sereg fő-fő emberei meg voltak sértve
büszkeségükben, fenyegetve, elmellőzve. Erről mind értesíté Ghéczy
Zsigmond a fejedelmet.
Királya sincs az országnak ez idő szerint, fejetlen az ellenfél.
Az új összeesküvésnek minden szála Ghéczy Zsigmond kezében
fut össze.
Ma valami elhatározó lépésnek kell végbemenni.
A kastély kiholtnak látszik, csak az udvar hátulján levő
ispánlakban volt valami élet. Ott lakik az öreg Ghéczy Julianna,
Zsigmond úrnak a nénje, egy évvel idősebb, mint ő, évek óta ágyban
fekszik már, hanem azért az esze most is helyén van, s onnan a
nyoszolya dunnái közül vezeti az egész gazdaságát az öcscsének, aki
azzal nem törődik. Ennél főznek is Zsigmond úr számára, ha eszébe
jut az ebéd ideje, de sokszor elfelejti s napokig beéri egy darab
kenyérrel, meg avas szalonnával, mikor nagyon benne van a
munkában.
 Ma is csak úgy a kezéből kollácziózgatott, az éles görbe késsel
nyiszálva a szalonnát a kenyérhéjon, miközben a titkos irásjegyekkel
szerzett leveleket betüzgeté.
Finom hallását már régóta ütögeti valami közeledő moraj, de még
nem birja kivenni, hogy mi az? kocsizörej-e vagy égdörgés?
Egyszer aztán közelebb jön a dübörgés. Hintó gördült be az
udvarra.
Zsigmond úr az ablakhoz rohan s kikémlel az udvarra. Nem akar
hinni a szemeinek. Ez a hintó? Ez a leánya hintaja! Nem az ő leánya!
az ördögé! A kocsisára is ráismer. Ide mert jönni az átkozott! A
«lőcsei fehér asszony!» Haza mert jönni a kigyó, a dühös oroszlán
barlangjába, nem fél tőle, hogy összetépi?
A hintó megáll a bejárat alatt s nemsokára hallja Ghéczy
Zsigmond a hiradó jeleket, hogy jön valaki fel hozzá. Minden ajtó el
van látva csengetyüvel, a mi megszólal, a mint felnyitják.
Ghéczy Zsigmond első furiájában ökölre fogja azt a görbe kést s
úgy szaladgál alá s fel a szobájában; majd a lőrésen kiabálva ki a
kocsisnak: «Fordulj vissza! ki ne fogj! Takarodjatok innen!» majd
meg a szomszéd szobába a leánya ellen: «Be ne tedd a lábad!
Kiontom a véred! Te pokolvirága! Te Jézabel! Te Goneril! Te gyilkos
Darvulia! Puskát fogok rátok!»
Ekkor aztán jött egy másik dörgés; de ez már nem hintógördülés
volt, hanem a felhők beszéde egymással; a zivatar üdvözlése. S erre
a hangra egyszerre eldobta kezéből az öreg azt a kést, azt a
villámvonzó vasat; elkezdett reszketni, délczeg alakja összegörnyedt,
arcza zöldes fakó szinre sápadt; az ajkai még ismételték a
szitokneveket, de már vékony, félelemtől reszketős hangon: «eh te
Jezabel! hej te Darvulia, czudar! s a közben rakta le magáról, a mi
érczféle volt: zsebéből az órát, derekáról az ezüstcsattos övet,
saruiról a felkötött sarkantyukat oldozgatta le, s aztán sietett, mint a
hidegleléstől rázott beteg az ágyba, a maga menedékébe, a
gyantaszigeten épült üvegkalitkába, a hol összekuporodva meghúzta
magát s onnan már most elő nem mer jönni, a mig csak a zivatar
utolsó dörgését visszhangozzák a bérczek.
Az a rettenthetetlen szivű ember, a ki daczolni mert mindennap a
királyok pallosaival, a ki neki rohant a kartácsos ágyuknak, egyszerre
gyávább lett a kisértetmeséktől reszkető gyermeknél, a mint az
égdörgést meghallotta. Már egyszer megkapta az ütését ennek a
rettentő lángpallosnak. Akkor még csak a lapjával ütött rá. De az
ütésnek emléke, a vakító lángoszlop rettentő csapása rabbá tette
minden érzékeit. Mikor villámlott, mennydörgött, hasonlatos volt
azokhoz, a kik már a túlvilágra mentek, az ismeretlen regiókba, s ott
állnak az örök itélő biró előtt; csakhogy ő még ezt a büszke alakot
hordozza magával e rettenetes törvényszék elé, hogy tanuljon
reszketni.
Hanem azért nem imádkozik. Védi magát a tudomány paizsával.
Az üvegen nem tör keresztül a mennykő.
Ott kuporog már az üveg ketreczben, mikor a leánya belép a
szobájába, karján a gyermekével.
A mint őt meglátja, csaknem erőt vesz a bőszült indulat az
ösztönszerű félelmen. Közel van hozzá, hogy szétrúgja maga körül
az egész üvegkalitkát, s nem törődve égzengéssel, villámlással,
rárohanjon erre az asszonyra s kitépje belőle a lelket! Azt hiszi, ez
most őt boszantani jön; megtudva, hogy minő igézet alatt tartják
ilyenkor az idegei: felhasználja azt az órát, a mikor az apját
erőtlenné teszi az Isten haragjától való félelem, s gunyolódni akar.
Még jobban elkeserítette az, hogy a gyermekét az ölében hozza.
Hát nem eléggé meggyülöltette ő ezzel a fiuval az anyját? Nem
mondta el neki, micsoda kigyó, micsoda boszorkány az ő anyja,
számtalanszor? Elég volt egy találkozás, egy hizelgő szó, egy ölelés,
s újra megszerette? Megszeretteti ez magát mindenkivel, a kinek
gyülölnie kellene őt: még a kis gyerekével is! Mert varázsló
boszorkány!
 Hanem egy hatalmas csattanás, mely úgy hangzott, mintha a
kastélyba csapott volna le a villám, egyszerre kioltá az öreg
haragtüzét. Az egész épület rengett, a míg a sziklák visszadörögték a
villámcsattanást; s a mint a zápor egyszerre elkezdett szakadni, éjjeli
sötétet támasztva, ebben a sötétben úgy fénylett, valami rejtelmes,
villó derengésben minden ércztárgya a szobának; és még az is, a mi
nem volt érczből: annak az asszonynak az alakja.
Olyan volt, mint egy rémlátvány, mint egy kisértet.
Odament, a gyermekével karján, ahoz az elszigetelt asztalhoz, a
hol az a félő öreg ember, azzal az öreg Istent ábrázoló
tiszteletreméltó fővel ül, a villámoktól elzárkózva.
S ott letérdepel eléje.
– Miért jöttél ide? kérdi fogvaczogva az öreg. Te bünös asszony!
– Az vagyok! szól Julianna, nyugodt, szelid szóval. Hozzád jöttem,
a ki birám vagy. Elmondok előtted mindent, a mit tettem; te itéld
meg mekkora volt bünöm, hogy bünhödjem érte.
– Hazudsz, hazafutsz, apád mellé kuporodsz, ott is egy nagyot
hazudsz! (Ezzel a mondással szokták a hazug gyermekeket
gunyolni.)
– Többet fogok neked elmondani, mint a miket az ellenségeim
beszélnek felőlem: tetteket és járásokat, a miket csak Isten és én
magam tudok; még a titkos érzéseimet is meggyónom, a miket soha
meg nem találna a szivemben senki.
– S lesz bátorságod a gyermeked előtt beszélni?
– Sőt szükséges, hogy ő azokat hallja. Nem fogja megérteni;
nem foghatja még fel, mi volt az mind, a miért meg kellett az
anyjának halni? (Mert bizonyára, ha mindent elmondok előtted, te
engem élve nem hagysz; s ha magad nem, másokkal öletsz meg.)
De arra az egyre vissza fog emlékezni, a míg csak élte tart, hogy a
mit vétettem, ő miatta tettem. Én nagy bolondságaim, én sürű
vétkeim, engem kárhoztatnak el; de a miből mindaz ered vala, az én
végtelen nagy szerelmem volt az én szegény kis árvámhoz. Kérlek,
hallgasd végig, a miket elmondok.
Julianna elkezdett vallani. Nyilt szívvel, őszintén, a legtitkosabb
részleteiben elmondta egész életének titkát, a melyről olyan hiressé
lett. Egy-egy égdördülés, egy-egy apaátok osztotta szakaszokra ezt a
rémmesét. Odafenn a jégzápor verte az üvegtetőt, idebenn a fogoly
öreg ember ökleivel a homlokát. A nő folytatta csendesen. A
gyermek hallgatva bámult, s azt gondolta magában, milyen szép ez a
villámlás, milyen szép az ilyen bűnös asszony.
Az öreg a hosszú fehér hajával törülgette a könnyeket szeméből:
a szégyen és keserüség adóját.
Csak a vallomást tevő nem sirt.
Mikor aztán végtül-végig elmondott mindent az apjának,
következett a befejező catastropha, a csalódás.
A kassai téren látott rémjelenetre való visszaemlékezés úgy
elzsibbasztá erejét Juliannának, hogy nem birta azt végig elmondani.
Ha csak színjátszás volna az, a mit most mivel, lett volna elég
alkalma a sikoltozásokra, a rémlátó elmeredezésre, a hajtépő
átkozódásra, a tragikus kitörésekre: semmit sem tett meg abból.
Eltakarta két kezével az arczát s lecsüggesztett fővel rebegé: «ott
voltam, mikor Czelder Orbánt lefejezték».
Ez a nehéz, elfulladó hangon ejtett szó erősebb hatású volt
minden pathetikus előadásnál.
De hisz ő neki a gyermeke álmára is kellett gondolni.
Ghéczy Zsigmond meggyőződhetett róla, hogy a miket a leánya
most elmondott, az mind igaz volt. Sokkal rosszabb dolgokat beszélt
el magáról, mint a miket a leggonoszabb rágalmazói hirleltek el
felőle. Akkor tehát a megbánása is igaz.
– Hát most miért jöttél ide? kérdezé a leányától.
 – Hogy a gyermekemet meglássam, és meghaljak.
– A gyermekedet láttad már; hát meghalni hogyan akarsz?
– Most, hogy fiamat látom, szeretnék addig élni, a míg újra
egészséges lesz s aztán megint szeretni fog.
– Látod, hogy mivé tetted?
– Én nagy bűnöm.
– De nem kapod ám őt vissza soha.
– Soha?
– Ha csak az itéleten keresztül nem mégy.
– Kinek az itéletén?
– Mindenikén, a ki csak birád. Birád az ország, az Isten, az apád,
a férjed, még a fiad is.
– A fiam itéletét már megkaptam. Megmondta, hogy nem szeret.
Ez még fájt, a többitől nem rettegek.
– Hát halld meg a többiekét is. Igazán megbántad, hogy oly
átkozott árulást követtél el?
– Az égbe vágytam, s a porba estem, van ennél nagyobb bánat?
– Hallod, hogy dörög odafenn! Engem már lesujtott egyszer az
Isten haragja; pedig én nem árultam el a hazámat, csak az Isten
nevét káromoltam. Az álnokságért harmadiziglen, az Isten
káromlásért ezeriziglen bünteti meg a Zebaoth a gyermekeket.
Melyikünknek a büneért akarod, hogy az ivadékaid lakoljanak? Van-e
lelked egy ilyen zimankó idején kimenni az erdőre, a hol most a
villámtól felgyujtott fenyőfák lobognak, s azt az Istenharagot, a mitől
én reszketve bujok el üvegbarlangomba, a fejedre lehivni?
– Ha elűzesz magadtól, úgy sincs hová mennem, mint a villámos
ég alá.
 – Dehogy űzlek. Inkább nagyon is szépen kérlek, hogy eredj. Te
elmondtad nekem a magad keserüségét. Elhiszem, keserű. Most én
elmondom neked az én gyönyörüségemet. Te hidd el nekem, hogy
édes. Pedig egy dolog a kettő. Az enyimet úgy hiják, hogy
boszuállás. Akarsz belőle kóstolni?
– Hogyan?
– Akarod visszafizetve látni azt a nagy tartozást, a mivel a
kevélyek kapujai alól elkergettek? Megalázni azt a dölyfös hadat, a
melyiknek nem volt elég, hogy a magyar férfiaknak a becsületét csak
úgy szárazon egye meg, még az asszonyainknak a gyalázata is
kellett neki hozzá, hogy abba mártogassa, mint a czvibakot a
csokoládéba!
Julianna felugrott a térdeiről s daczosan felemelte a fejét, a
szemei ragyogtak.
– Bizz rám akármit! Bármilyen nagy dolgot.
– No hát «édes?» Azt szeretem. Belehalhatsz, ha beveszed. Mert
méreg. Hát hallgass ide. Nekem ma épen ebben az órában el kellene
mennem egy olyan helyre, a hol az ilyen fajta új poklot készítik,
azoknak a számára, a kik bele valók.
– Új összeesküvés? kérdé Julianna, a kis fiucskát kötényével
eltakargatva.
– Ne féltsd te őtet. Tud ő mindent, s nem fecseg ki semmit. Nem
új összeesküvés, csak folytatása a réginek. Itt vannak a közelben. Én
rám várnak. Az én dolgom átadni nekik az izeneteket a távollevőktől,
a kik velünk egy czélt akarnak. És még más dolgom is van. A
cselekvéshez pénz kell, ingyen a halált sem adják. S azt, hogy hol
van elrejtve az a pénz, a mi a munka megindítására szükséges, csak
én tudom. Soha senki rá nem fog akadni. A hány esztendő elmulik,
annyival mélyebben lesz elrejtve. Ma és ebben az órában kellene azt
nekik megmondanom. Ők nem jöhetnek ide hozzám; mert a
labanczok minden utat, a mi a házamhoz vezet, megraktak
kémekkel, vadászaik, dragonyosaik el vannak helyezve az erdőben,
szénégetők, pásztorkunyhók, tárnabejárások közé; az én hiveim a
napvilágon nem mutathatják magukat. Hanem én odamehetnék
hozzájuk a magam buvó útjain. Ők várnak rám. De én nem tudok
megmozdulni. Rettegek a villámlástól. Meg vagyok átkozva. Gyáva
vagyok. Árulónak fognak tartani, s aztán szélylyel mennek; ember
soká nem állhatja ki azon a helyen, a hol ők összegyültek. És én még
sem mehetek oda, a míg ez a zivatar tombol a fejem fölött. Emberi
szó nem fejezheti ki azt a félelmet, a mi engem kínoz. Minden
villámlás a szivemen nyilal keresztül, s a mennydörgéstől olyan a
szivem, mintha két malomkő közé szorult volna. Ha most egy
pálczával összezúznád ezt az üveg kalitkát a fejem fölött, bizony
rögtön szörnyet halnék a rémület miá’.
Julianna még a selyemkendőjét is levetette a nyakáról, azt is
rátakarta az üvegkalitra. Tudta, hogy a selymet is perhorrescálja az
égi tűz.
– Hát oda mernél menni most helyettem azok közé, a kik rám
várnak?
– Oda megyek.
– Ebben a zivatarban?
– Felveszem a «gyöngyösi privilégiumot», nem ázom meg.
(Gyöngyösi privilégiumnak hítták valaha azt a köpönyeget, a min
semmi zápor keresztül nem hatolt; ma már nincsen.)
– Elvinnéd azokat a leveleket, a miket ha a labancz portyázók
megkapnak nálad, egy fokkal magasabbra akasztanak fel, mint a
levelek iróit?
– Nagyobbat is végeztem én annál.
– És azután leszállnál egy szál kötélen egy mély oduba, a minél a
pokol kürtője semmivel sem rettenetesebb, hogy ott felkeress
eldugott pénzes zsákokat, a miket a sárkányok őriznek?
 – Nem hiszek a rémekben.
– Hát nem hiszesz a rémekben. Pedig elhihetnéd, hogy vannak
olyanok. Teszem: ha csak egyszerre eléd toppanna az urad,
Korponay János?
– Az valóban rémítőbb volna rám nézve minden kisértő léleknél.
– Aztán meg az öreg Fabriczius, azzal a hosszú kardjával.
– A hóhér a maga pallosával nem volna rám nézve iszonytatóbb.
– No hát ott, a hová küldelek, megtalálod az uradat, meg az öreg
Fabricziust.
Julianna összeborzadt. Fásultságát megtörte ez a két név. Nem
bátorság volt az, a mi őt biztatta, csak megvetése mindennek, a mi
él. Hanem ezt a kettőt nem tudta megvetni. Ingadozott.
– Ne félj, anyókám, szólalt meg a kis öreg ott mellette. Én majd
veled megyek, a nyakadba kapaszkodom. Nem bánt senki, ha engem
meglátnak.
Ez a szó megolvasztá a jeges szivét, odaborult térdre a kis fiu
mellé; elkezdett zokogni: ölelte, csókolta; majd hogy meg nem ette.
Hát mégis csak szereti!
– Nem, pulyácskám, tégedet itt hagylak zálogban a nagyapónál,
hogy bizonyos legyen róla: a mit rám bizott, elvégzem, megint
visszajövök. Te csucsulj el, aludjál addig szépen. Mondja kelmed
apám uram, mit végezzek? Ha az Isten haragjától nem rettegek, az
uram haragjával is majd csak szembeszállok. Ő fogja ereszteni a
kötelet, a min a mélységbe szállok, az öreg Fabriczius pedig mellette
fog állni a nagy pallossal. Mondja kegyelmed a többit.
Azzal elkezdte dönczölgetni a kis fiát az ölében s dudolta neki a
legújabb nótát:

«Hová lettél nyalka kurucz,

 Ki kevély voltál, mint a strucz!»

Addig dudolta, addig ringatta, a míg szépen elaltatta.

Az öreg Ghéczy Zsigmond azalatt elmondta reszkető szóval,
merre legyen a járása, mi legyen a mondása? A mennydörgő
mennykő csak úgy hullott jobbra-balra; a dörgés egy pillanatig sem
szünt; néha az egész házat megrázta, hogy az üvegek a háztetőn
csak úgy csörömpöltek bele.
 XXXIV. FEJEZET.

A JÉGBARLANG.
A magyar föld természeti ritkaságainak Kohinoorja, a dobsinai
jégbarlang még akkor csak kevés ember előtt volt ismerve. A kik
tudtak róla, nehéz eskü alatt kötelezték magukat nem beszélni felőle
másnak, mint a híveknek.
Itt e hegy mélyében lakik az egyik demiurgus, a földszellem, a ki
jégből alakít. Aeonok óta foly a munka. Kezdi mint bányász, mély
üregeket váj, vízzel, szénsavval, azután folytatja mint építész, óriási
boltozatokat emel a mélységek fölé, rengeteg oszlopokkal jégből,
építészi remekeiben utánozza a zuhatagot, a lugast, a szőnyegeket,
nem kellenek neki a doriai, a korynthi módok. Aztán oltárt emel,
magasat, széles grádicsokkal. Nem feledkezik meg a boltozatos
folyosókról sem, miknek karzatain csak párosával lehet áthaladni,
vannak szép tündér grottái, alvó szobácskák talán, czirádákkal,
czikornyákkal felcziczomázva, aztán egy-egy fejszédítő harántlap,
csapinós eséssel mélyed alá a sötét végtelenbe, mint egy pyramid
oldala, óriásoknak való szánkapálya, a mesebeli üveghegy, hanem a
főtermében a tükörpadlaton egész mulatozó emberi társaság
számára van elég hely. Azután beáll kárpitosnak, ezüstművesnek, a
colossusi építményeket betakargatja drága szőnyegekkel, mik a
légben függnek, egymást emelik, fentartják, finom jégkristályból
szőtt, font, filigránozott, zsinegmódra tekert czafrangjaik le a
padlatig érnek, rengeteg sátorok csupa kristálytűkből. Mikor épít,
vakmerő, mint egy titán, mikor diszít, gyöngéd, mint egy tündér.
 Mikor a földlakók itt ünnepet tartanak, ezernyi mesterséges
fénynyel világítva be a barlang üregeit, akkor az egész isteni
alhambra átlátszó lesz, át meg át ragyog az óriási jégdóm, mintha
gyöngyházzal volna kirakva, szivárvány töréseket tündököltet, a
kárpitok ezüstje összefoly a merész zuhatagok átlátszó zöldjével, a
belül üreges oszlopok, az oltárok tovább adják a keresztül törő fényt.
Kívül felczifrázva fantasztikus képletekkel, a mik virágot, madarat,
lófarkat, csipkézetet mimelnek; áttört ötvösmunkával,
gyöngyfüzérekkel pazaron befonva. És a látogató elkezdi számlálni
az óriás jégfalon, mely mellett elhalad, az évek sorait. A hány
esztendő, annyi réteg. Mint egy nagy könyv egymáson fekvő lapjai.
A meddig a világosság eléri, talán ezerig is el lehet számlálni. De hát
a mi a jégpadlón alul van, hány ezredévet számlálhat az?
E jégbarlang bejárását a Gölnitz-völgy felől rég ismerték a
dobsinaiak. Azt is tudták, hogy ott jég van. Nyári mulatságaik
alkalmával odaeresztették le a seres hordóikat, de leszállni bele csak
e század utolsó évtizedeiben mert két fiatal tudós, a ki azután ez
isteni remeket a világ előtt feltárta.
A Rákóczy hadjárat idejében ez volt a találkozási rejteke a kurucz
összesküvőknek.
Rendesen ott a barlang előtt ütöttek össze egy lábtót
fenyőszálakból, a miken leszálltak a barlangba, s mikor visszajöttek,
a lábtót összetörték, elégették.
Hogy a gölnitzvölgyi szádán kivül még egy másik bejárata is van
a jégbarlangnak, ez csak a Ghéczy titka volt.
Mikor a közelmult években e barlang hirre kapott, egy dobsinai
vén lakos felemlegeté, hogy ő is volt már ebben a barlangban fiatal
korában; de egészen más nyiláson jutott bele, a «Hanneshöhe»
oldalán. De nem tudott a helyre rávezetni többé.
Ez volt az a bejárat, melyen keresztül a Ghéczy Zsigmond
kastélyából ide lehetett jutni, a hegyoldalból előtörő patak mentén
lóháton.
 Mikor Ghéczy Zsigmond az ő hajdan kedves czimboráját, Józsa
István prédikátor-kapitányt áruló átszökése után azon forrójában
utolérte s agyonverte, egyúttal azokat a kincseket is prédára ejté, a
miket ők együtt Körmöcz- és Selmeczbányából elhoztak, sok hordóra
menő arany- és ezüstpénzt. Ezt ő akkor hazahozta a gölnitzvölgyi
kastélyba, s aztán zsákokba töltögetve áthordta a hanneshöhei
üregen át a jégbarlangba, ottan dugdosta el. Nem mind egy helyre.
Fiókokra osztá. Számozva voltak; ennyi ezer itt, annyi amott. Ez volt
az igazi Wertheim-pénztár! Hatalmas egy szekrény: igazán
felnyithatatlan. A jégtündér már az első esztendőben betakarta a
rejteket egy réteggel; minden évben egy új lapot borított rá. Nincsen
ennek a zárnak kulcsa. – Ha majd egyszer szükség lesz rá, ha
minden segítség elfogyott, akkor előadja Ghéczy Zsigmond az
eldugott kincset. Addig érjék be a jó czimborák azzal, a mit a
rézbányája keres. Ő maga beéri szalonnával, kenyérrel.
Hát most itt volt az idő. Újra kellett szervezni a szétzüllött
kurucztábort. Izeneteket kellett hozni jószágaikba visszatért hajdani
vezérektől, s az országon kivül történtekről; aztán csoportba gyüjtött
lappangó hadaknak fentartásáról gondoskodni. Fel kellett nyitni a
pénztárt.
Ez hozta ide a régi bajtársakat, a kiknek egyike jött
Lengyelországból Rákóczytól, a másik Temesvárról, a török
nagyvezértől, a harmadik Erdélyből, a többi innen-onnan az
erdőkből, a pusztákról, a Fehérhegyekből, az ecsedi lápból, a hol
még fegyverfogásra kész ezrek lesik a jelszót; mind valamennyinek
egy utasítása volt: ezen napon, holdújsággal délután a gölnitzvölgyi
jégbarlangban megjelenni, s ott várni Ghéczy Zsigmondra, a ki
átadja a kincseket, s a kincsetérő leveleket a kurucz főuraktól.
Ezeknek már hajnalelőtt, mikor még sötét volt, át kellett vonulni
az erdőkön, hogy a dobsinai labanczok figyelmét kijátszszák, s
elhelyezkedni a jégbarlangban. Hoztak magukkal bundát, nem
fagytak meg. Tüzet rakniok nem volt tanácsos, mert a kiszüremlő
füst elárulta volna, hogy itt emberek vannak.
 Lehettek valami huszan. Közöttük volt Fabriczius, a ki most járta
be a Szepességet, Pongrácz, a ki a Czelder Orbán catastrophája elől
menekült, s újra összeszedte a szétrebbent hajduit, Korponay János,
a ki a fejedelemtől érkezett, és a többek között Pelargus,
valamennyinek a közös izenethordója. Ez most is parasztleány
ruhában volt, a többiek mind gölnitzvidéki hevérnek öltözve.
Három szál viaszgyertya tartott világosságot a sátorban, a hol
letelepedtek. Most «beduinsátornak» hivják azt a jéggrottát.
Az urak, untokban, a jövő terveit fejtegették egymás előtt. Mind
nagyszerü volt az, és mind kivihető, csakhogy mindegyikhez pénz
kellett. Azt pedig honnan venni? A «libertás» rézforintoknak még az
anyamintáit is összetörték már, s ki lett hirdetve, hogy a
szabadságpénz egy fabatkát sem ér többé.
Azalatt Pelargus egy jégtaburetten ülve, jegyezgetett valamit egy
darab pergamentre.
– Mit kalkulálsz, fiacskám? kérdezé Korponay.
– Azt számítom össze, hogy a jelenlevő uraknak a fejeire, kire
mennyi díj vagyon kitüzve. Ha a fejeinket úgy el lehetne adnunk, a
mennyire azok becsülve vannak, mindjárt nem kellene a fejünket
törnünk, hogy hol vegyük a pénzt?
Jót nevettek a tréfán. – Igazán kellemes érzés egy olyan
társaságban lenni, a hol minden ember azzal a tudattal hordja fenn a
fejét, hogy erre száz, erre meg kétszáz arany van kitüzve. Legtöbbet
ért a Korponayé, mert az háromszáz aranyat képviselt.
– De mégis legtöbbet ér az én buksim, enyelgett Pelargus, mert
ha kevesebb is, de minden városban van rá feltéve valami. Hol
ötven, hol száz tallér. Ha összeszámítom, megüti az ezret.
– No, majd meghozza a nervus bellit a Zsiga bátyánk.
Csakhogy a Zsiga bátya nagyon soká váratott magára. Fabriczius
ezüst órája már mutatta a holdújságot. Jönni kellene már neki. Itt a
jégpalotában nem kellemes a várakozás. Csak a lengyel pálinka
melegített. Aztán meg valami más. – Bolondság!
Már erősen zugolódott minden ember. Beszéltek
cserbenhagyásról, gyávaságról, egy mormogó hang árulást is
emlegetett. Egyszer csak megneszeli Pelargus éleshalló füle a föld
felett dühöngő vihar moraját.
– Zivatar van odafenn. Akkor mi szépen süthetjük itt a makkot,
mert az én Zsiga bátyám neki megy ugyan minden ördögnek, még
az olyannak is, a ki a farkát a fején viseli, de az úr Istentől
szertelenül retteg. A tizenkét zsidó patriárka, szent Dáviddal a
hegyében, együtt nem félt úgy a Zebaóth Istentől, mint a jó Ghéczy
Zsigmond, a mióta a tüzes mennykővel megczirógatta. Az most
nekünk ki nem jön az üvegkalitkájából, ha mi adunk is neki annyi
aranyat, a mennyit ő tőle akarunk kapni.
Lett erre nagy káromkodás.
A kurucz különben sem igen szokta kapiczányon tartani a nyelvét,
mikor a mennybeli hatalmakkal kellett feleselni, most pedig épen
tehette, mert itt nagyon biztos helyen volt a jégbarlangban.
S a zivatar csak nem akart mulni. A körül fekvő hegyek belseje
csupa vas, azzal pedig a villám szeret csókolódni; minden mennykő a
hegyoldalba csap le, s a sujtott szikla fenékig megrendül.
Az összeesküvők türelmetlensége chorusban tör elő; az az
istenesebb, a ki jobban átkozódik.
Egyszer aztán egy olyan földrengéssel járó zuhanat rázza meg az
egész jégbarlangot, hogy a kristályfalak és oszlopok megrendülnek
bele; a villám oly apocalypticus hatalommal sujtott le a «hegyes
bérczre», hogy betörte annak a tetejét, keresztülfúrta magát a
sziklákon, lehatolt a jégbarlangba, egy pillanatra túlvilági
ragyogványnyal árasztva el a felséges kristályépületet, minden
oszlopaival, boltozataival, hogy e káprázatos fénytől a szem elveszté
világát; a következő pillanatban aztán sűrű sötétség lett, a miben
rémséges zuhanatok hosszantartó dörgése rémíté el a szivet; a
hegytető beomlott.
(Ez a hegyomlás ma is látható fenn a tetőn s alant a barlangban
a lezuhant tömérdek sziklatömeg.)
S az iszonyu légnyomás eloltotta mind a három gyertyát.
Addig, a mig a lezuhanó sziklák robogása hangzott, miknek
némelyike a száz ölnyi mélységbe gördült le (a mit most «pokol»-nak
czimeznek), addig emberi hang nem szólalt meg ide lent. S mikor
már a zuhanatnak vége volt, még sokáig lehetett rá lesni, hogy
pendülnek, kondulnak meg a jégkolosszok, meg-megrepedezve,
hogy cziterázik a magasból aláhulló jégkristályok permetege a
jégtáblákon.
– Meg kellene gyujtani a gyertyákat, suttogá valaki a sötétben.
Erre a szóra többen elővették a tűzszerszámaikat; azt mindenki
magával hordta; volt hozzá kénfonal is. De nem lehetett kicsiholni. A
tapló úgy meg volt nyirkosodva, hogy nem kapott bele a szikra.
Utoljára mind valamennyien elkezdtek a tűzkővel, kovával dolgozni…
Olyan volt az, mintha dæmontábor szórná a szikrákat maga körül,
pokoli sötétség közepében. Semmi sikere nem volt. A kioltott
gyertyákat nem lehetett újra meggyújtani.
Most következett el még csak a rémület ideje.
A kik ide lenn vannak, e vak sötétségben, soha ki nem találnak a
jégtömkelegből az Isten világára.
Kétségbeeshettek.
Előttük a csúf halál, a mi ellen semmi ész, semmi erő nem való a
védelemre.
E szívzsibbasztó csüggedés közepett úgy tetszik, mintha a
barlang mélyéből valami derengés hajnallana fel.
Pelargus vette azt legelőször észre.
 – Világosságot látok! kiáltá, oda mutatva.
– Az a Ghéczy Zsiga! mondák a kurucz urak s elkezdének happ-
happot kiabálni, hogy észrevegye őket a sötétben a közelítő. S aztán
megint elővették a tűzszerszámaikat s nekieredtek a csiholásnak,
hogy hollétük helyét észrevétessék a jég Bábelben.
Mert nem olyan könnyü annak az alsó részéből a felső emeletébe
áthatolni. A feljárás meredek és tükörsima, megszakgatva széles
rianásoktól, mik feneketlen mélységet mutatnak.
A világosság azonban közeledett. Már ki lehetett venni az
emberalakot, mely azt magával hozta.
Férfi alaknak látszott, bányász öltözetben. A világosságot egy szál
viaszgyertya terjeszté, mely magas, nemezből készült süvegébe volt
tüzve, mint egy tartóba. Hogy miért nem hozott magával inkább
bányászlámpát, a mit a bőrövre akasztanak, azt megmagyarázta a
sűrű előre-hátra bukdosása a sikos jégúton; estében kialudt volna a
lámpa, míg a süveg felül maradt a gyertyával.
Keserves küzködése volt, a míg a jégbarlang felső emeletébe fel
tudott jutni; félig meggörnyedve haladt felmentében a párkányzaton
végig, vaskampós botjával meg-megkapaszkodva. Térdeire kötött
vaskarmokkal kúszott fel egy meredélyen, gémberedő kézzel fogózva
a jégkolonczokba, s szeges talpu saruival akadályozva
lecsuszamodását.
Már odáig jutott, hogy csak egy meredek, kürtőforma
mélyedésen kellett felhatolnia. Itt egy kötelet leoldott a derekáról, s
azt a végére kötött vaskapocscsal felhajítá a párkányzat orgonasíp
alaku jégcsapjaira, s aztán a térdvasai segélyével elkezdett egy
faderék vastagságu jégcsapon felfelé kúszni.
– Ez nem a Ghéczy Zsiga! dörmögé Pelargus. Nem látom a nagy
fehér szakállát.
– Csak nem őrült meg, hogy másra bizza a titkainkat! mondá rá
Fabriczius.
 Korponay azonban segíteni akart a felmászással küzködőnek, s
kampós botjával lenyulva a horgával megkapaszkodott kötélért,
annálfogva elkezdte azt felfelé vontatni.
– Ez nem az öreg Ghéczy! dörmögék valamennyien, a mint az
alak a mélységből fölmerült. A mint a kezével megkaphatta a
jégmellvédet, egy pattanós szökéssel fölveté magát a sík jégpadlóra.
– Nem! Hanem a leánya, suttogá fuldokló hangon a megérkezett,
lekapva fejéről a bányászsüveget az égő gyertyával: szép sárga haja
izzadságtól csapzottan hullott lángoló arczába.
– Árulás! ordítá Fabriczius, s rohant a jégsátorhoz, hogy valami
fegyvert kapjon a kezébe.
Korponay János pedig ugyanazt a kötelet, a melyen felhúzta a
feleségét, hirtelen annak a nyaka körül keríté s úgy nézett annak az
arczába, mint egy őrült. Nem szólt neki semmit, csak a szemeivel
ölte, a kötél két hurokszálát egy markában tartá összeszorítva.
Julianna még csak egy mozdulatot sem tett a védelmére.
Ha azt a kezében tartott süveget gyertyástól a földhöz vágja, hát
azzal eltemeti magát is, meg valamennyit a pokol sötétjében. Akkor
aztán az jár jobban, a kit hamarább megölnek.
De nem tette. Odanyújtá a legközelebb állónak az égő gyertyát, s
a legcsendesebb hangon szólalt meg.
– Itt vagyok, uraim. Apám küldött. Nektek hoztam üzenetet.
Hallgassátok azt meg, aztán tehetitek velem, a mit haragtok rám
mért.
– Meg ne hagyd szólalni a kigyót, Korponay! ordítá Fabriczius a
jégsátorból; fojtsd bele a szót: mert megront, ha beszélni hagyod.
Korponay még szilajabb dühvel nézett Julianna szemébe s kezdte
szorosabbra húzni az öklébe szorított hurkot.
 – De biz azt a bolondot nem teszed! kiáltá Pelargus, s odaugorva
Korponay mellé, sarlóforma éles késével kettévágta a kötelet s
kirántva az asszonyt az ura kezéből, odaállt eléje, saját testével
védve azt mindenki ellen. «Hozzá ne nyuljon valaki az én
asszonyomhoz, mert akkor nem ismerek sem Istent, sem embert! –
Hát megbolondultatok, hogy megakarjátok ölni, a ki minket
megszabadít? Az üzenethozót. Pongrácz ezredes úr! parancsoljon
kegyelmed a kapitányoknak, vagy vér folyik köztünk!»
A kurucz vezérek csakugyan közbevetették magukat, hogy a
dühöngő Korponayt félreczibálják, s az átkozódó Fabricziust
elcsitítsák; amaz szidta a tacskó Pelargust, mit avatkozik az ő
felesége dolgába, holott még szeretője sem volt, csak üvegen
keresztül nyalta a mézet: az asszony bolondja.
– Bolond az, a ki kihallgatás nélkül itél! vágta vissza Pelargus.
Eddig csak vádolták, de nem védte senki! Igazság ez? Egy gyönge
asszony ellen annyi férfinak összeröffenni! Leventeség ez? A hitves
asszonyát a saját urának elrágalmazni! Becsület ez? – Nem bánom,
mondjatok bolondnak: én nem hiszek el felőle semmi rosszat! Csak
az irigyei találtak ki rá minden csihést a szépsége miatt!
Julianna megsimogatta a gyermekhős fejét.
– Köszönöm jó Pelargus, hogy védelmemre keltél, magad vagy
ebben a világban. – Hagyd abba, s azzal odalépve a férfiak
csoportjába, megállt közöttük nyugodtan, ölébe leeresztett kezekkel:
«Uraim! Biráim! Nincsen mit tagadnom. Hogy elkövettem az árulást
az ország ellen Lőcsén, azt bevallom. Hogy vétkemet megbántam,
azt bizonyítja az, hogy itten állok. Hogy helyre hozhatom-e azt?
itéljétek meg, ha azt, a mi rám lett bizva, átadtam és elvégeztem. Ha
úgy találjátok, hogy a jó, a mit ügyetekért teszek, felér azzal a
roszszal, a mit ellene tettem, akkor feloldotok; – ha abban állapodtok
meg, hogy marad fenn tartozásom: itt vagyok: végezhetitek életem;
senki sem sirat meg. – És aztán, ha ti föl találtok menteni, még
marad itt egy birám, ki fölöttem itél: az én hites uram. A mi
közöttünk van, az nem dolga senkinek, csak a mi kettőnké. Ti
hagyjatok bennünket kettőnket hátra, mikor eltávoztok a gölnitzi
szádon. Az uram majd később utánatok megyen. Hogy én merre
mentem el: jobbra-e, balra-e, lefelé vagy fölfelé? Azt csak az Isten
tudja meg.
A daliák e nyugodt beszéd által egészen meg voltak nyerve. Maga
Fabriczius és Korponay is elhallgattak, hanem azért egymás mellé
álltak, kezüket egymás vállára téve. Pongrácz ezredes volt köztük a
fő; neki mondá el Julianna Ghéczy Zsigmond üzeneteit; az ő kezébe
tette le a leveleket, a mik a hajdani kurucz főuraktól jöttek. És
azután, atyja kipéczézése nyomán rávezette őket azokra a
rejtekekre, a mikben a bányavárosokból elhozott arany- és ezüstpénz
el voltak dugva. Minden előkerült. A kezdethez elég. Annyi kincs,
hogy minden itt levőnek jut belőle czipelni való.
– Bevégeztem küldetésemet, szólt Julianna, mikor a rejtekekből
előhordott pénzes zsákok egymás mellé voltak rakva, s azzal
egyenesen Fabriczius felé fordult. Kegyelmed főbiró uram, ezen
hivatalában legtudósabb, mondja ki rám az itéletet.
De bizony a jó Pelargus nem hagyta azt megtörténni, hogy
itéletet mondjanak ki – prókátor közbejötte nélkül, odafurakodott
Fabriczius elé, s az egyik kezével megfogta a biró vállán a puffos
bányász mándlit, a másikkal pedig hevesen hadonázva, magyarázva,
s a biró mellét ugyan ütögetve, megtartá a competens védőreplicát
az ő imádott szép asszonya mellett.
– Hát ti urak, hogyha birák akartok lenni, ismeritek a just,
ismeritek a logikát, ismeritek a principiumokat. Tudjátok, hogy mi az
«in dubiis charitas». Ha tudna azzal az angyalarczczal, azzal a
galambtekintettel asszony oly szörnyü árulást elkövetni, a milyennel
őt ti, a férje, az egész világ és az ő saját szája is vádolják: hát nem
módjában lett volna százszorta nagyobb és sulyosabb árulást
elkövetni most, a midőn egy intés, egy szó kellett volna csak tőle,
hogy mindnyájunkat a hóhér kezére adjon, hogy egy új felkelés
tervét még a csirájában elfojtsa? Ha lehető volna, hogy ebbe a
szivbe a hitszegés beleférjen, hát nem siethetett volna az a rábizott
levelekkel egyenest az ellenségeinkhez, s felfedezve az
összesküvésünket, nem vihetett volna-e annyi főurat a vérpadra,
hogy ugyancsak válogathatott volna a birtokaik közül vérdíj fejében?
Ha ennek az asszonynak itt, csak úri pompa, fényűzés, duskálkodás
gyönyörködtetné szivét-lelkét: így állna-e itt most közöttünk, sáros,
tépett hevérruhában, összekarczolt kezekkel, hogy nekünk rejtett
pénzbányák oduit fedezgesse fel, holott elhordhatta volna innen
azokat a kincseket a maga gyönyörüségére, úgy hogy még a kakas
sem kukorítana utána? Ilyen ábrázata van a bűnnek? Így festik-e a
rossz lelkiismeretet? – Ime, nem csúsz-mász térdepelve előttetek,
kezeit tördelve; nem vagdalja magát a földhöz, a hogy a bűnösök
szokták. – Itt áll nyugodtan, mint egy martyr a római circusban az
oroszlánok között. Nem hivogat sem szenteket segítségül, sem
élőket tanubizonyságul, nem szépíti tettét, nem magyarázza, nem
tagadja. Azt mondja, a mit tettem, megtettem. Nagy okai lehettek
rá. Magában áll-e? Nem! Százan, ezren tették azt, a mit ő. Hittek a
csábító szónak, biztak az esküvésben, a hatalmasok pecsétes
leveleiben. Hány férfi, hány fővezér közülünk tette le a zászlóját egy
ilyen mézes-mázos szóért. S ő, a gyönge asszony vétett volna
csupán, mikor ráhallgatott? S mi az elpártoltat, ha megutálja tettét, s
ismét hozzánk tért, tárt karral fogadjuk. Itt a leveleik a kezeinkben,
áhitattal olvassuk, gyönyörködünk a megtérésükben; kérve-kérjük,
jertek vissza, legyetek újra vezéreink, tanácsadóink; emeljük őket a
fejünk fölé. Csak ezt az egyet dobjuk le a mélységbe? Azért mert
asszony? azért, mert gyönge asszony? Azért, mert szép asszony? A
mennydörgő ég odafenn, s ez a jégpokol idelenn úgy tartson meg és
úgy veszítsen engem, a hogy esküvel bizonyitom, hogy ez az
asszony ártatlan és igaz, mint ez a szűz jégoszlop itt előttünk.
Fejemmel állok jót érte!
Az ifjú trubadur lángja elharapózott a többi keblekbe is. Az urak
helyeslő mormogása hangzott közbe. A birói serpenyő mérlege
valóban a szép asszony részére hajlott. Az érdemei súlya lenyomta a
bűneiét. A megtérőt be kell fogadni, kivált a ki ily erős próbát kiállt,
miként ez.

Ő
 Az öreg Fabriczius intett a kezével, hogy legyenek csendesen. Ő
maga leült egy jégkolonczra, mint valami birói karszékbe, a többiek
körülállták.
Valamennyi gyertyát meggyujtottak már most, a jégsátor egész
világos lett bele.
Fabricziusnak egy kasza volt a kezében, ő kaszás hanáknak volt
álczázva. Úgy nézett ki vele, mint a vén Kronosz. Azzal, ha akarta, le
is üthette a nyakát az előtte állónak.
Megszólalt, nehéz csend után.
– Halljad a mit mondok, te, kinek nincs neve, «lőcsei fehér
asszony». Nem mondok én te rád itéletet. Az az Isten dolga. El is
fogja hozni. De elveszem fejedről fenyegető kezemet s azt mondom,
senki se bántson. Nem tudom, ki vagy? Nem ismerlek. Elfelejtem,
hogy valaha utamon keresztül mentél. Te emlékezni fogsz rá, hogy
miket vétettél, más ne emlékezzék. Nem azért, a miket ez a nederes
fiú beszélt a védelmedre, nem azért a csengő érczekért, a miket
kezünkbe adtál, nem azért a gyertyavilágért, a mivel bennünket a
pokoli sötétségből megváltottál, a ki nélkül veszve lettünk volna,
nem ezzel váltottad meg magadat. Hanem azzal, hogy az apádtól
küldve jösz most ide. Csak egy embert ismerek a világon, a ki
nálamnál törhetlenebb szivű, csak egy embert, a ki hazáját
irtóztatóbb lélekkel szereti, mint én, az a te apád. S csak egy ember
van a világon, a ki ellen nagyobbat vétettél, mint én ellenem, mert
nagyobb csorbát ütöttél a czimerén, mint az enyémen; s a ki ezért
téged jobban keresett a halálra, mint a hogy én kerestelek: ez az
apád. Ha te meg tudtad venni Garamszegi Ghéczy Zsigmond szivét,
ha ő te rád bizta azon titkait, miket soha senkinek el nem mondott:
akkor valami varázslat jár veled, a mibe az én véges eszem be nem
tud hatolni. Térj vissza apádhoz, a mely uton jöttél, s vidd el neki azt
a levelet, a mit neked adok, nem sok szó lesz benne, de elég:
«leányod betölté küldetését».
 Fabriczius papirost kért a körülállóktól, mert nála nem volt. A
többinél sem volt. Pelargus oda adta neki azt a darab pergament, a
mire az imént társai nevét felfirkálta, utánuk téve a fejeikre kitűzött
díjakat.
– Ez jó lesz, monda a biró. Már a neveink is rajta vannak.
Azzal a pergamen elejére felirta azt a három szót.
A pergamen sorra járt; mindegyik vezér oda írta a neve után:
«vidi».
Szándékosan hagyták Korponayt utoljára.
Ő nem irta a neve után a «láttam»-ot, hanem bedugta a
pergament a köntösébe.
Igaz. A nagy hazafiak, a törhetlen szabadságharczosok
elintézhették a maguk perpatvarát azzal, a ki őket egyszer elárulta.
Ha másszor jó szolgálatot tett: ki van egyenlítve a rovás. De hát a
férj számadása ki van-e?
Az még nehéz egy szó lehet.
Nem mondtak ellene. Összeszólalkoztak. Kiki felvett a vállára a
pénzes zsákok közül; fogta a gyertyát s indult a jégbarlang kifelé
vezető sikátora felé. A távozó alakokat egyenkint eltakarták a
jégkárpitok, a bolygó fények eltünedeztek az átlátszó falak mögött.
Csak két gyertya maradt hátra: Korponayé és az asszonyáé.
Ott álltak egymással szemközt: körülöttük a fehér éjszaka, a
csillámló jégpokol. A padmalyról perczenkint egy-egy vízcsepp hullott
alá a jégsátorra, mint egy folytonos óraütés számlálva az örökkévaló
időt.
Julianna a férfiöltözetben is tökéletesen asszonynak látszott
most: kérő, esdeklő meghajlása, összekulcsolt kezei, mik térdeit
érinték meghajoltában, lecsüggesztett feje, árnyékvető szempillái
alól kisugárzó szemei rávallottak, hogy asszony.
 Szava nem volt, csak azt tette, hogy az összefogott két kezét
felemelé lassan s úgy nyujtá ki karjait ama másik alak felé, a kinek
még a jégfalra vetett árnyéka is tudatá, hogy férfi.
Visszautasítólag intett a kezével.
– Ne szólj hozzám. Mind hasztalan volna. Ha ezt az egész
jégbarlangot meg tudnád is olvasztani egy lehelleteddel, engem nem
olvasztanál meg benne. Nincs közöttünk semmi közös érzés: még a
gyülölet sem.
– Elfelejthednéd-e kis árva gyermekünket? rebegé az asszony.
– Ne hozd elő, mert még megátkozom az órát, a mikor született.
– Az volt a vétkem, hogy őt oly nagyon szerettem.
– Tudom. Azért akarnám elfeledni, hogy fiam van. Mert jobban
tettem volna, hogyha szétzuzom a fejét, minthogy keresztvizre
tartám, mert az én dicsőségem az, hogy egy poronty született, egy
Antikrisztus, a ki nem megváltója, hanem elvesztője lett a világnak!
Ott lesz a nép imádságaiban: «fogantatott a gonosz lélektől!»
örömhír lesz rám, ha azt hallom, hogy meghalt.
– Az Isten szerelméért! Hogy mondhatod ki ezt a szót?
– Térjünk másra. Hisz nincs nekünk semmi okunk a czivakodásra.
Megcsaltak, úgy-e? A kik arany hegyeket igértek. Hogyne csaltak
volna meg? Hisz Fabriczius leányát is kiforgatták az apja birtokából;
pedig azt császári tiszthez adtad, hitét elhagyattad vele; apját,
szülővárosát elárulni te tanítottad meg. Most az is földönfutó, mint
te.
Ez egy új nehéz kő volt Julianna szivére. Hát az ő kedvenczét is
szerencsétlenné tették azok, a kikben bizott? Ez is az ő lelkére
támadó vád, az ő álmainak réme?
– Értelek már most egészen, mondá Korponay. Csalva vagy,
sértve vagy, semmivé vagy téve. Magad üldözöd magadat. Dehogy
kergetlek, dehogy állom el az utadat; hagylak magad elől futni.
Velünk egy uton futsz most, azt látom; el is hiszem; belekerültél
abba a forgószélbe, a mi bennünket sodor magával. Boszut akarunk
állni, mink is, te is. Ebben találkozánk s még úgy jöhet, hogy sokszor
fogunk egymás jöttére várni, a hogy ma vártunk s az is meglehet,
hogy egyszer a hóhér a fejeinket egy kosárba dobja. De az én ajkam
a tiedet megcsókolni még ottan sem fogja. Rám nézve nem vagy
asszony, nemnélküli lény vagy. Úgy beszélek hozzád.
– Hallgatok csendesen.
– S felelsz egyenesen. Még én nem irtam alá az elbocsátó
leveledet, elébb meg kell alkudnod velem. Mondd meg, hova tüntél
akkor, a mikor még annyira tele volt veled a szivem, hogy
haragomban meg akartalak ölni?
– Ott voltam a közeledben, a fali tükör mögött levő rejtekben.
– Az volt a titkos átjáró a szomszédházba?
– Igen.
– A honnan «ő» is átjöhetett te hozzád, te is «ő» hozzá, a mikor
tetszett?
– Igen.
– Mikor előlem menekültél, oda mentél ő hozzá?
– Akkor nem, mert a vezérek és a senátorok ott voltak nála s a
capitulatióról tanakodtak. Hanem korábban voltam ott. A mint a
császáriak megrohanták a szobájában s kelepczébe keríték. Akkor
segítségére siettem.
– Hát e szerint a tábornok nem tud semmit az árulásról?
– Semmit sem. Mikor a rejtett átjárót felnyitottam, akkor épen
karddal készült magát életre-halálra védelmezni a császári katonák
ellen, a kik szobájába tódultak.
 – S te hogy segítettél rajta?
– Pisztolyt szegeztem a főtiszt homlokának s arra ő kiparancsolta
a szobából a muskétásokat s azután tanácskozhattak egyenlő sors
mellett.
– S hogy nem menekült «ő» ki azon az uton, a melyen te
bejutottál hozzá?
– Mert kényes volt az én asszonyi becsületemre.
– «Ő» az volt, te nem! Tehát Andrássy egész tudatlan volt a
lőcsei árulásban? Te voltál az, a ki őt elcsábítottad; a te mézes
szavad, a te sugáros két szemed, a te varázstudó ajkad volt az a
titkos hatalom, a mi őt megfordította. Nem arany gyapjuval, hanem
arany hajszállal huzták ki a helyéből.
– Úgy van.
– Hát ez «úgy van». Már most hallgasd meg, a mit mondani
fogok én, urad, birád, gyilkosod, czimborád, a hogy akarod,
választhatsz. Te elcsábítottad a magyar hadsereg egyik legjobbik
vezérét, a győrvári viadort, a hősök mustráját, hogy eltántoruljon a
nemzet zászlajától s átbukjék az ellenségei közé; most eredj oda
hozzá és csábítsd őt vissza.
– Hogyan? kérdé a nő, elsápadva szörnyen.
– Hogyan? Azt te tudod! Ugyanazokkal a mézszavakkal,
ugyanazzal a varázslattal, csókkal, öleléssel, a mivel a tévutra vitted,
hozd az igaz utra vissza. Adj neki mindent, a mit a szív kiván, hozd
mámorba, tedd őrjöngővé, hogy kövessen megint, a hova te viszed.
Vedd elő azt az arany hajszálat, mivel őt tőlünk elkötözted, s lánczold
vissza hozzád.
Julianna arczra veté magát és elkezdett zokogva sirni.
– Ne sirj itten! Könnyed jéggé válik, a mint kihull. Hideg dolgokról
beszélek én most. Nincs ebben semmi érezni való. Adunk és
veszünk. Veszszük, a mire szükségünk van, s adjuk érte azt, a miért
az megkapható. Nekünk Andrássy Istvánra szükségünk van. Őt
tartjuk a legalkalmasabb fővezérünknek, ő van egy hatalmas várnak
a birtokában, fegyverrel, ágyúkkal ellátva. A régi kuruczság még
most is bálványozza őt. Ha ő kezébe kapja a zászlót, az egész
ország, mint egy tábor sereglik körüle. Őt nem vehetjük meg
pénzzel, megveszszük tehát egy asszony csókjaival. Kelj fel hát és
emeld a fejedet magasra. Dicsőséges dolgot mivelsz majd.
Sértő, szivig bántó volt mindenik szava tanubizonysága a hideg
megvetésnek; a nő megszünt sirni, fölállt, összefonta karjait s azt
mondá: «jól van, odamegyek!»
– No lásd! Ez okos szó. És már most vedd eszedbe utasításomat.
Nem elég az, hogy odamégy s visszajösz. Bizonyosság is kell felőle,
hogy nem jártál hiába. Ez a tanubizonyság az lesz. Most küldi a bécsi
kanczellária Gömörbe Andrássy Pétert, a legöregebb testvért, az
aulicust, a ki az alatt, míg valamennyi öcscse mind a szabadságért
harczolt, ő maga ott maradt Bécsben s megtartá a hűséget. Most ezt
nevezték ki gömöri főispánnak, a mi eddig Andrássy István vala.
Utasítása van, hogy egy labancz ezreddel szállja meg Krasznahorkát,
mert hisz a megye tanácskozó terme ebben a várban van; az öcscsét
pedig, a megkegyelmezett kurucz tábornokot, szállítsa ki a sikra,
betléri kastélyába. Ha te most elmégy és visszajösz s azután az fog
történni, hogy Andrássy István bezárja vára kapuját az új főispán
előtt s kiutasítja a labancz szállásmestereket, hát akkor ez annak a
tanubizonysága lesz, hogy két csillagnak még mindig van elég
bűvsugára.
Arra a két csillagra nehéz szempillák borultak.
– Elvállalom, suttogá Julianna.
– Akkor készen vagyunk, mondá a férfi s elővonva ködmene
belsejéből az elbocsátó lapot, ő is oda irta a neve után e szót:
«vidi».
S aztán oda nyujtá a nőnek.
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