CHANGES TO THE PUBLICATION OF ANNUAL REPORTS AND AGMs DUE TO CORONAVIRUS
In a joint statement released on 26th March, addressing the unprecedented situation created by the Coronavirus (Covid-19) pandemic, the Financial Conduct Authority (FCA), Financial Reporting Council (FRC) and Prudential Regulation Authority (PRA) announced a series of actions to ensure information continues to flow to investors and support the continued functioning of the UK’s capital markets.
These actions include:
- allowing listed companies an extra 2 months to publish their audited Annual Reports;
- Guidance from the FRC and the PRA, for listed companies and financial institutions, in preparing their financial statements in assessing expected loss provisions under IFRS9 respectively, given the current uncertain environment; and
- Guidance from the FRC for audit firms seeking to overcome challenges in obtaining audit evidence.
In the view of the regulators, during these extraordinary circumstances, previous market practices relating to the timing and content of financial information and audit work surrounding them must change.
These changes are likely to impact on the scope of audit opinions, the inclusion of disclosures by management around any material uncertainties which may cast significant doubt upon the entity’s ability to continue as a going concern, and of course changes for the availability of financial information timetabled prior to the current situation.
Alongside the FRC and PRA guidance, the ICSA has also released supplementary guidance surrounding a company’s AGM, which reflects the Government ban on public gatherings of more than two people. This guidance has been put together by the leading ‘magic circle’ law firms, the FRC, the GC100 and other leading secretarial organisations and has been reviewed Department for Business, Energy and Industrial Strategy.
Companies effectively have five options:
- Adapt the basis on which you hold the AGM
- Delay convening the AGM, if notice has not yet been issued
- Postpone the AGM, if permitted under the articles of association (Articles)
- Adjourn the AGM
- Conduct a hybrid AGM, if permitted under the Articles
The ICSA’s article also provides downloads with practical information which should be reviewed by company secretaries and the board.
For more information, please see:
For information about how Black&Callow can help in these uncertain times, please contact Tim Black on +44 (0)20 3794 1720.