The Financial Conduct Authority (FCA) and the Financial Reporting Council (FRC) have published a joint statement reminding companies of certain continuing temporary reliefs for reporting published financial information.
The statement encourages stakeholders, particularly listed company boards, to re-familiarise themselves with the measures and use them to ensure the quality of reporting is not compromised during this busy period for preparing, auditing and publishing financial information. It is also intended to alert investors and other users of financial information, including lenders assessing covenant breaches, that reporting timetables for companies might be extended and view those changes in the context of current events.
A summary of the measures currently in place is as follows.
Corporate Reporting for listed companies
An additional 2 months to publish annual financial reports (ie within 6 rather than 4 months of the financial year end date) together with an additional month to publish half yearly financial reports (ie within 4 rather than 3 months of the financial half year end date).
Extended period for filing accounts at Companies House
Currently the deadline for filing any accounts with Companies
House is extended by 3 months. While this automatic extension
expires on 5 April 2021, it will be replaced with an application
process to Companies House, with companies granted a discretionary
3-month extension where they cite coronavirus as a factor impacting
the timely completion and/or audit of accounts.
Only one filing extension is permissible for an accounting period and the extension cannot take the filing date later than 12 months after the end of the accounting period.
Delaying or adapting Annual General Meetings
The temporary ability to postpone AGMs provided by the Corporate Insolvency and Governance Act 2020 expired on 30 September 2020. However, measures to provide flexibilities around the conduct of AGMs have been extended to 30 March but there is no scope to extend them beyond that date. The Department for Business, Energy and Industrial Strategy has stated that it is working with stakeholders and will produce further guidance.
Companies are also reminded of the FRC's guidance for companies on corporate governance and reporting during the pandemic, and it is suggested that audit committees consider disclosing in their annual reports the measures taken to ensure high-quality reporting and audit for the period affected.
Finally, the joint statement also reminds companies of their continuing obligations under the UK Market Abuse Regulation concerning inside information. Companies must continue to assess carefully what information constitutes inside information, recognising that the global pandemic and policy responses to it may alter the nature of information that is material to a business's prospects.
Companies are now in the busiest period of the year for preparing, auditing and publishing financial information which has coincided with the added restrictions of the national lockdown in the UK. The joint statement recognises the heightened challenges that companies face. If you need help navigating those challenges, please make contact with one of our team.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.