The Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 (SI 2013/1970) were published on 9 August, together with an explanatory memorandum. These regulations set out details of the new structure for narrative reporting which replaces the requirement for a business review, as part of the directors' report, with a requirement for a stand-alone strategic report. The final regulations remain in the form published by the Department for Business, Innovation and Skills (BIS) in June 2013 and come into force on 1 October 2013. Please see the article in our July newsletter for more details. Click here for the final regulations and here for the explanatory memorandum.
The Financial Reporting Council (FRC) has published for consultation an Exposure Draft which sets out guidance on the application of the new strategic report requirements. The FRC's objectives are to:
- ensure relevant information that meets the needs of shareholders is included in the strategic report and that immaterial information is excluded so as not to obscure key messages and impair understanding of what is being said
- encourage companies to be innovative in the drafting of their annual reports so they are written in a way that best 'tells the story' to investors, and
- promote cohesiveness in the annual report by linking what is in the strategic report with what is in the rest of the annual report.
The guidance is intended for directors and is aimed at quoted companies. Feedback on the Exposure Draft is required by 15 November 2013. The FRC will be holding an event to discuss the proposed guidance in October. Click here to see a copy of the Exposure Draft and here to see the FRC's press release.
Click here to read our article on the proposed changes to the Listing Rules as a result of the final regulations coming into force.