In March 2012 BIS published the Government response to its consultation on the future of narrative reporting (see our January update).1
As outlined in the consultation paper2 , the Government will introduce a new structure for narrative reporting, replacing the directors' report and the business review with:
- a strategic report providing an overview of the company's key strategic information; and
- an annual director's statement providing more detailed information in a more closely prescribed format including the directors' remuneration report (which will be split into two sections as outlined in the Government's consultation on executive pay (see Enhanced shareholder voting rights in respect of executive pay), the corporate governance statement and the audit committee report.
BIS will now work with the FRC to develop the detail and information that should be included in these reports.
As part of its Red Tape Challenge and with the aim of making reports more user-friendly, BIS will further develop proposals to remove some of the disclosure requirements contained in the Companies Act 2006.
These changes will not, as originally announced, become effective from 1 October 2012. Instead, BIS is proposing to bring these changes into force in April 2013 to allow companies more time to adjust to the new reporting framework.