(a) You are required to prepare a value added statement to be included in the corporate repor t of Hythe plc for the year ended 31 December 20X6, including the comparatives for 20X5, using the information given below:

20X6 20X5 £000 £000 Fixed assets (net book value) 3,725 3,594 Debtors 870 769 Creditors 530 448 14% debentures 1,200 1,080 6% preference shares 400 400 Ordinar y shares (£1 each) 3,200 3,200 Sales 5,124 4,604 Materials consumed 2,934 2,482 Wages 607 598 Depreciation 155 144 Fuel consumed 290 242 Hire of plant and machiner y 41 38 Salaries 203 198 Auditors’ remuneration 10 8 Corporation tax provision 402 393 Ordinar y share dividend 9p 8p Number of employees 40 42

(b) Although value added statements were recommended by The Corporate Repor t, as yet there is no accounting standard related to them. Explain what a value added statement is and provide reasons as to why you think it has not yet become mandator y to produce such a statement as a component of current financial statements either through a Financial Repor ting Standard or company law.