On the 18 November 2009, the European Communities (Directive 2006/46/EC) Regulations (S.I. 450 of 2009) ("the Regulations"), which implements Directive 2006/46/EC on company reporting in Ireland was signed into law.
Directive 2006/46/EC amends four other Directives; namely Directive 78/660/EEC (the "4th Company Law Directive"), Directive 83/349/EEC (the "7th Company Law Directive"), Directive 86/635/EEC (the "Credit Institutions Directive") and Directive 91/674/EEC (the "Insurance Undertakings Directive").
The key changes arising from the Regulations can be summarised as follows:
It is now a requirement for an Irish incorporated company whose securities are admitted to trading on a regulated market or on a multi-lateral trading facility to include a corporate governance statement in respect of each financial year end in the annual (directors') report; All Irish incorporated companies (listed and unlisted) will be subject to disclosures of "off balance sheet arrangements" and "related party transactions" in certain circumstances; Amendments have been made to existing fair value rules contained in Irish legislation. Both the E.C. (Credit Institutions: Accounts) Regulations 1992 (S.I. 294 of 1992) and the E.C. (Insurance Undertakings: Accounts) Regulations 1996 (S.I. 23 of 1996) have been amended accordingly to reflect the above requirements.
We will now examine each of these changes in more detail.
Corporate Governance Statement
Regulation 13 of the Regulations amends Section 158 of the Companies Act, 1963 (as amended) to include a new requirement whereby a company whose securities are admitted to trading on a regulated market or on a multi-lateral trading facility will now be required to include a corporate governance statement in the annual (directors') report in respect of the financial year end.
The corporate governance statement is required to include at least the following information:
A description of the main features of the company's internal control and risk management systems in relation to it financial reporting process; A description of the operation of the shareholder meeting, the key powers of the shareholder meeting, shareholders' rights and the exercise of such rights; The composition and operation of the board of directors and the committees of the board of directors with administrative, management and supervisory functions; The corporate governance code, which the company is subject to or which the company has voluntarily decided to apply and where the text of the relevant code is publically available; All relevant information concerning corporate governance practices applied by the company which are additional to any statutory requirements, and where this information...