New annual reporting requirements from The Department of Business and Trade
In July this year, The Department of Business and Trade (“DBT”) laid The Companies Strategic Report and Directors’ Report (Amendment) Regulations 2023 (the “Regulations”) in draft for approval by Parliament.
These Regulations derive from the proposals that were set out in the Government’s March 2021 white paper in respect of audit and corporate governance reform.
The Regulations will commence on 1 January 2025 and will apply to a company’s financial year starting from 1 January 2026 and onwards.
The Regulations will have an impact on all companies (and groups) incorporated in the UK that:
· have 750 or more employees; and
· have an annual turnover of £750 million or more.
These Regulations will also impact companies that have shares listed on a regulated market, including the main market of the London Stock Exchange.
The changes will require relevant companies to include an additional note to the accounts concerning distributable profits and other relevant matters or a minimum amount recorded. There will also be a duty placed on the company’s directors to include a resilience statement in the company’s strategic report and to include three additions statements in the director’s report, which comprise of an audit and assurance policy statement, a material fraud statement and a policy statement concerning distributions and purchase of own shares.
The audit and assurance policy must be included in the directors’ report in every third financial year with an update in the intervening financial years.
If you have any questions, please do not hesitate to contact the Corporate Team.