Issues to address ahead of the reporting season - Crowe Clark Whitehill

Issues to address ahead of the reporting season - Crowe Clark Whitehill: "With many listed companies having a December year end, thoughts will be turning to the Annual Report process and how to evolve it from last year. The Financial Reporting Council (FRC) have recently issued a number of documents highlighting areas for improvement. Here are main points you need to consider.

Cutting clutter

As in previous years, the FRC has been keen to remind Boards of the need to cut clutter and focus on the important aspects. Their comments follow the results of a survey to investors, which emphasised the length and accessibility of Annual Reports as an area of concern. To overcome this, Boards should undertake to:

Set the scene – a clear explanation of the business model and strategy should let a reader understand how money is made and where management want to take the business.
Tell the story of the year – focus on the key points and areas of change from last year but also be balanced, discussing the failures as well as the successes.
Consider how the story is told – avoid complex or technical language, summarise information where appropriate and cross-reference to avoid repetition. Be consistent with measures used from year to year.
Give insight – the section on risks and uncertainties should be key and not an afterthought. Well written, it shows a Board that is aware of the risk factors affecting the company and reassures investors that the Board has appropriate mitigation actions in place. For the current year, Boards should consider whether to discuss Brexit risks as part of their disclosure on principal risks."



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