COMPANY formation specialist, Oswalds, a Jordans Group company, has warned companies that new requirements are now in force which means they need to produce a very different style report from previous years.
Says a spokesperson: “The changes apply to companies with financial years ending on or after 30 September 2013 come into force as a result of new narrative reporting regulations.”
“The new style approach is intended to provide far greater transparency for shareholders,” said Oswalds director, Andrew Cockburn.
“The downside for those responsible is that a lot more information is now required in a different format – and failure to include that could mean upsetting the Financial Reporting Council (FRC), their shareholders or both.
“Changes will apply to most companies, although just how much new information you will have to disclose will depend on your status. And while larger corporates may have in-house teams or advisors who will be well up to speed on what is required, smaller businesses will also have to fall in line, and they may not have the resources to know what is required.”
The spokesperson continued: “The new narrative reporting regulations require all but the smallest companies to prepare a strategic report which replaces the previous business review. Much of the information will also have to be expanded or presented in a different way.
“Listed companies have the extra task of supplying additional disclosures in relation to the company’s strategy, business model, human rights policy, gender diversity and carbon emissions.
“However, the area that could potentially cause the most controversy is that listed companies will have to set out not only what their directors have received in the last year, but what the remuneration policy is going forward.”
Continued Cockburn: “Directors’ remuneration will be subject to an annual advisory vote by shareholders, but the policy part will be subject to a binding shareholder vote at least every three years.
“This will give shareholders much more clout. And if that information is not clearly set out in the annual report, there is scope for them to reject the remuneration policy or even call for a new policy to be drafted and re-submitted to shareholders.”
UK Corporate Governance Code 2012: here.
Directors’ Remuneration reports: here.
For further information please contact Andrew Cockburn at Oswalds tel 0131 557 6966
Issued on behalf of Oswalds by Liquorice Media tel 0141 297 1699. www.liquorice-media.com
Date: 6th June 2014
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