Annual or integrated report Flashcards
What is the eligibility criteria for micro companies?
Name 2 company types that are excluded from being treated as micro?
What are the 5 filing requirements for a micro?
What must the balance sheet contain?
Where and when must the company accounts be sent?
Eligibility = company that meets any 2 of the below:
* Turnover equal to or less than £632,000
* Balance sheet total equal to or less than £316,000
* No. of employees equal to or less than 10
- an investment undertaking;
- an insurance institution; or
A. Optional Directors’ report
B. Abridged and optional P&L account
C. Abridged Balance sheet
D. Auditor’s report (if audited)
E. Notes (if there is any information to be disclosed that assists the reader in understanding the accounts)
a statement above the director’s signature that the accounts have been prepared in accordance with the micro-entity provisions
must be sent to all members and a copy submitted to the Registrar within 9 months of the financial year-end
What is the eligibility criteria for small companies?
Name 2 company types that are excluded from being treated as small.
What are the 6 filing requirements for a small company?
What must the balance sheet contain?
Where and when must the company accounts be sent?
Eligibility = company that meets any 2 of the below (for individual accounts):
* Turnover equal to or less than £10.2 million
* Balance sheet total equal to or less than £5.1 million
* No. of employees equal to or less than 50
A. a public company
B. A company that carries out insurance market activity
- Optional Directors’ report
- Optional Strategic report (no s.172 statement)
- Abridged and optional P&L account
- Abridged balance sheet
- Auditor’s report (if audited, small co exempt)
- Notes (if there is any information to be disclosed that assists the reader in understanding the accounts)
a statement above the director’s signature that the accounts have been prepared in accordance with the small companies’ regime
must be sent to all members and a copy submitted to the Registrar within 9 months of the financial year-end
What is the eligibility criteria for medium-sized companies?
Name 2 company types that are excluded from being treated as medium-sized
What are the 6 filing requirements for a medium-sized company?
Where and when must the accounts be sent?
Eligibility = company that meets any of the 2 criteria below:
* Turnover of £36 million
* Balance sheet total of £18 million
* Employees 250
A. public company
B. A company that carries out insurance market activities
- Directors’ report
- Abridged Strategic report (no s.172 statement)
- Abridged P&L account
- Abridged balance sheet
- Auditor’s report (if audited)
- Notes (if there is any information to be disclosed that assists the reader in understanding the accounts)
must be sent to all members and a copy submitted to the Registrar within 9 months of the financial year-end
FULL ACCOUNTS
Accounts may be prepared either in accordance with what?
What 6 things comprise full accounts?
Where must a plc lay its audited accounts?
Where and when must the company accounts be sent?
CA2006 or IAS
- Directors’ report
- Strategic report
- P&L account
- Balance sheet
- Auditor’s report
- Notes (if there is any information to be disclosed that assists the reader in understanding the accounts)
CA2006 = plc must lay its audited accounts before members in a GM within 6 months of the financial year-end
Must be sent to all members, and a copy submitted to the Registrar within 9 months of the financial year-end (private), or within 6 months of the financial year-end (plc), or 4 months (quoted/listed under DTR 4.1.3 = published in 4 months not filed)
What is a listed company?
What is the definition of a quoted company?
In addition to the 6 things that are required for full accounts, what are the:
(a) 2 things the annual report of a quoted company must include?
(b) 4 things the annual report of a listed company must include?
Must listed companies have their accounts audited?
Listed= a company that has securities listed in the Official List maintained by the FCA and are eligible for trading on a regulated market
Quoted = a company whose equity share capital has been:
* listed in the UK;
* officially listed in an EEA state; or
* admitted to dealing on the New York Stock Exchange or Nasdaq
(definition inlcudes listed companies)
Quoted:
A. Directors’ Remuneration Report
B. Any separate corporate governance statement
Listed:
1. A Corporate Governance Report
2. DTR 4 = management report = details of important events in last year
3. DTR 4 = responsibility statement = confirm financial statements give a true and fair view and prepared in accordance with applicable accounting standards
4. LR 9 = if company incorporated in UK = Going Concern Statement
DTR 4.1.7R = the financial statements must be audited and the full text of the audit report made public
What is a dormant company?
Are dormant companies exempt from audit?
Name 2 types of dormant companies that are not exempt from an audit.
Which form is used to file dormant company accounts at CH?
= company that has had no significant accounting transactions as defined by s.1169 CA2006 since the end of its previous financial year/incorporation
Yes, provided company was dormant throughout period and all members agree
- A company that carries out insurance market activities
- a banking company
Companies (not subsidiaries) that have been dormant since incorporation can use Form AA02 to file dormant company accounts
STRATEGIC REPORT (X micro, OP small, AB medium)
What is the purpose of the strategic report as required by S.414A CA2006?
Name 4 things that should be in the strategic report.
What is a s.172 statement?
Who must the strategic report be approved by?
To informs members and help them assess how directors have performed their s.172 duty
S.414C:
1. A fair, balanced, and comprehensive review of the development and performance of the company’s business during the year and position at the end of the year
- A description of the principal risks and uncertainties facing the company and explanation of how these are managed/mitigated
- An analysis using KPIs
- s.414CZA = A s.172 statement (unless a small or medium-sized company)
S.414CZA CA2006 = S.172 statement = describes how the directors have had regard to the matters set out in section 172(1)(a) to (f) when performing their duty under s.172 (small and medium-sized exempt)
Must be approved by the board and signed on their behalf by a director or the company secretary = every copy must state the name of the person who signed it
STRATEGIC REPORT - QUOTED AND LISTED COMPANIES
Name 4 additional things that should be included in the strategic report of a quoted company in accordance with S.414C CA2006.
What is the other content required for a listed company and the 2 provisions in the UK CG Code that relate to it?
Can directors exclude and not disclose information?
- breakdown of gender of director, senior management and employees
- environmental matters
- description of business model
- the main trends and factors likely to affect the future of the company’s business
Viability Statement:
Provision 1 = strategic report must include a statement from directors to explain main trends and factors affecting long-term success of the company
Provision 31 = board explain how assessed prospects of company, over what period, and why it considers that period to be appropriate
Yes if, in their opinion, disclosure would be seriously prejudicial to the commercial interests of the company
DIRECTORS’ REPORT
Is the directors’ report mandatory?
What is the report intended to do? (2)
Name 4 things the report must include.
What else must the report include if the company is a large company? (3)
Who must the report be approved by?
Yes, s.415 CA2006 = directors of a company must prepare a directors’ report for each financial year (optional for micro-entities and small)
Intended to:
A. provide an overview of the company’s financial position at the end of each financial period
B. allow easier comparison over time and as between different companies (due to prescribed format)
- Names of directors holding office at any time during the financial year
- Details of qualifying indemnity provided for directors
- Research and development
- details of the acquisition by the company of any of its own shares
2008 Regulation = large companies must make a corporate governance statement:
i. Which CG Code, if any, company applied in financial year;
ii. How company applied code;
iii. Explain any reasons for deaparture from Code, or if no code adopted, the reasons for this and explain what other CG arrangements were in place in year
Must be approved by the board and signed on their behalf by a director of the company or secretary = every copy must state the name of the person who signed it
DIRECTORS’ REMUNERATION REPORT
Which companies must prepare a directors’ remuneration report? What is the consequence?)
What 3 components is the directors’ remuneration report usually made up of?
Name 2 requirements for each category.
What 3 other things must be included in the annual remuneration report for a listed company? (UK CG Code)
S.420 CA2006 = directors of quoted companies must prepare a remuneration report in respect of each financial year (failure to comply = offence punishable by fine)
- Statement from Remuneration Committee Chair
* Major decisions on directors’ remuneration
* Substantial changes made in year - Annual remuneration report = Implementation report
*Total pension entitlements for each director
*Payments to past directors and for loss of office - Remuneration policy (if being voted on)
* Table describing each component of remuneration package
* Policy on payments for loss of office
Provision 41 UK CG Code =
* Strategic rationale for EDs remuneration policies
* Engagement with shareholders and workforce and how impacted policy
Listing Rule 9 = Long-term incentive schemes
DIRECTORS’ REMUNERATION REPORT
What are the different shareholding voting requirements for the annual remuneration report and the remuneration policy?
What happens if the remuneration policy is rejected by shareholders??
i. Implementation report = must be put to an advisory vote at GM where the financial report is received (if voted down does not invalidate payment of directors’ remuneration = policy must be put to vote at next AGM)
ii. Remuneration policy = must be put to a binding vote at least once every 3 years
Part 10 CA2006 = no remuneration can be paid unless consistent with approved policy.
Policy should be revised in consultation with major shareholders and then put to vote in a GM
AUDITOR’S REPORT
Which 3 types of companies are exempt from an audit and therefore an audit report?
What is the purpose of the statutory audit and what 3 things must the audit report state?
Name 6 other things the auditor’s report must include
Small, dormant, subsidiary
= to provide an independent opinion to the members on whether the accounts:
1. have been prepared in accordance with the relevant reporting framework
2. have been prepared in accordance with CA2006 requirements; and
3. have given a true and fair view of the balance sheet, P&L account, and state of affairs as the end of the financial year
A. identity of company subject to audit
B. Description of annual accounts
C. Description of financial reporting framework used
D. Description of scope of audit
E. Statement on any material matters auditor wishes to draw attention to without qualifying the report
F. Whether strategic report (if any) and director’s report are consistent with accounts and contain any material misstatements
AUDITOR’S REPORT - QUOTED AND LISTED COMPANIES
What 4 things are additionally required in the auditor’s report for an auditor of a quoted company? (NB: quoted companies encompass listed companies)
What 2 things are additionally required in the auditor’s report for an auditor of a listed company?
How is the auditor’s report signed?
Include details on the auditable sections of:
- directors’ remuneration report = amount of each director’s pay, details on share options, and pensions (and whether, in their opinion, the directors’ remuneration report has been properly prepared in accordance with CA2006)
- the strategic report
- directors’ report
- whether any CG statement is compliant with DTR 7
Details on:
A. director’s going concern statement
B. parts that relate to UK CG Code
Report must be signed and dated by auditor and state name of auditor (if joint auditors = both sign and date name, if audit firm = senior statutory auditor sign in own name on behalf of firm)
REPORT TO AUDIT COMMITTEE
What is the new requirement for auditors of a PIE under Article 11 of the Audit Regulation?
Name 4 things to be included in this report.
COMMITTEE REPORTS
For a listed company, which committee reports should be included in the annual report?
= auditors of a PIE must provide a detailed audit committee report
- Identify audit partner(s) responsible for audit
- a description of the scope and timing of the audit
- description of methodology used
- quantitative level of materiality applied
The work of the:
1. nomination committee = Provision 23 UK CG Code
2. audit committee = Provision 26
3. remuneration committee = Provision 41
Where and when must the annual accounts and reports be made available for quoted companies?
For how long must quoted/listed companies make them available?
How long do companies have to file their ARA with the Registrar?
In addition to sending the ARA to the Registrar, where else must listed companies publish them?
Which companies do not need to file their financial accounts with the Registrar?
S.430 AC2006 = quoted companies must post ARA on website as soon as reasonably practicable until next years are then made available
DTR 4.1.4 = must be publicly available for at least 10 years (for quoted/listed companies)
Access to website must be continuous and free of charge to everyone (members and public)
Private = within 9 months of the year-end
Plc = within 6 months of year-end
DTR 4.1.3 = with the FCA (via the European Single Electronic Format) within 4 months of the year-end (publish not file)
Those that are unlimited companies
