Companies House report identifies inconsistent subsidiary disclosure in FTSE 350 company financial statements
11 Sep, 2013
A report by Companies House, at the request of the Secretary of State for Business, Innovation and Skills (BIS), reveals that 124 out of 290 FTSE 350 companies failed to adequately disclose a complete list of their subsidiaries in the notes to their financial statements, therefore not complying with UK company law.
Section 409 of the Companies Act 2006 requires that companies disclose a complete list of their subsidiaries in the notes to their financial statements which are submitted to Companies House. Where the number of subsidiaries is too extensive, Section 410 of the Companies Act 2006 permits a company to list the ‘principal’ information in their financial statements and then provide the full listing within their next annual return.
Companies House have written to those companies where disclosure was incomplete and will continue to monitor full compliance by FTSE 350 companies on a permanent basis.
At a time when corporate transparency is coming under increasing scrutiny, not least with the recent endorsement by G20 finance ministers on a new global standard, it is important that all companies comply with the Companies Act requirements.
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