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Good practice reporting: update

20 March 2014

On 5 February 2014, the Guidelines Monitoring Group (the GMG) published an updated version of its guidance on good practice reporting by private equity portfolio companies under the Walker Guidelines for Disclosure and Transparency in Private Equity (the Guidelines).

The Guidelines were initiated by the private equity industry and were introduced in 2007. They set out a voluntary code applicable to larger private equity firms to provide greater disclosure of their business activities, with the purpose of achieving greater transparency across the industry.

The substantive aspects of the updated guidance do not differ from the version issued in March 2012. However, the updated guidance does include examples of what the GMG has observed to be good reporting practice, which are drawn from recent accounts of portfolio companies.

The updated guidance states that the annual report when taken as a whole should be considered fair, balanced and understandable to a user of the accounts. Good annual reports are:

  • tailored to the business and avoid boilerplate language
  • provide useful and specific information, avoiding generic terms and superficial references
  • are not cluttered with erroneous or repeated information and help the reader focus on and understand the key relevant information, and
  • are consistent throughout and demonstrate linkage between each area.

As part of its role in ensuring that the Guidelines evolve with changes in the industry and financial reporting generally, the GMG confirmed that it will be reviewing how the new reporting requirements of the Department of Business, Innovation and Skills and the Financial Reporting Council applicable to listed companies should be incorporated into the Guidelines.

The GMG advised that the new Guidelines will be applicable for reporting portfolio companies in scope for September 2014 year ends onwards and further guidance will be shared in the spring and finalised by June 2014.

Click here to view the latest guidance.

This article was written by Malcolm MacDougall.

For more information contact Malcolm on +44 (0)20 7427 4544 or malcolm.macdougall@crsblaw.com