The old requirements for disclosure of directors’ pay and transactions were set out in Section 191 of the 1963 Act. They are now set out in Section 305 and Section 306. The section is an amended re-enactment. The rules are not new, but there are some definitions which seek to provide greater clarity (“qualifying services”, “emoluments”, “long-term incentive scheme” and so on)
The term director includes any shadow or de facto director.
If a director is in receipt of money from any other body corporate, and he was elected to a directorship of that body corporate because of his position in the company, or owes it to the company in any direct or indirect way, he must include in his disclosure any amounts received from that body corporate.
If a director is a beneficiary of loans, quasi-loans, credit transactions and guarantees given by a company, Section 307 sets out the information she must disclose in relation to them. This section is an amended re-enactment of s 42 of the CA 1990.
If the material interest of a given director is a sum below €15,000 or 1% of the value of the net assets in a financial year, that director does not need to disclose the transaction, loan, etc (Section 309(6)).
The provisions in relation to licensed banks and companies which are the holding companies of licensed banks used to be contained in Section 44 of the CA 1990. These provisions are now found at Section 310, et seq. Such banks and holding companies must maintain a register of directors’ dealings (previously known as the “Section 44 Register”).
Certain information must be disclosed in the notes to the financial statements about subsidiary companies. The most important points to be aware of are:
1. The note should distinguish between the subsidiary undertakings and the undertakings of substantial interest. This is the case where (1) the company has a subsidiary undertaking or (2) the company has a 20% interest (or more) in the equity shares in an undertaking that is not its subsidiary, or where the company has an unlimited liability interest.
2. The information that must be included in the note is as follows: the name and registered office of each subsidiary, etc; the identity of each class of shares held; the profit and loss of the subsidiary, etc; the aggregate amount of the net assets of each subsidiary, etc. (Section 314).
3. These rules were previously found in Section 16(1) and 16A of the C(A)A 1986.
4. If the directors think that if this rule were complied with to the letter, the note would be excessively long, Section 316 provides the solution. In such cases they need only refer in the note to the undertakings whose assets, liabilities, etc, “principally affects the amounts shown in the company’s statutory financial statements”. This also applies where there is an exemption from consolidation on the basis of severe long-term restrictions, undue expense and delay, or the interest of the holding company is held exclusively with a view to subsequent resale (Section 303(3)).
5. If the directors take the view outlined above, they may simply annex certain information to the annual return. That information can be found here (Section 348 (4)).
6. Also required to be disclosed in the notes is the average number of persons employed by the company in the financial year. This must be broken down into each category of persons employed by the company. (Section 317).
7. The notes must include information concerning the company’s share capital, set out here (Section 318). This was a requirement under the 1986 Act. The only difference is the wording has been changed slightly. Now the Act recognises that some shares will be included as a liability in the financial statements. Also, the note must include information about contingent rights, which is new.
8. The entity financial statements of the company must show the aggregate amount of financial assistance which the company provided in purchasing its own shares (Section 319). Similar information must be given in group financial statements.
9. Where a company holds shares in itself, those shares must not be shown as an asset. The consideration paid for the shares must be shown as a deduction from the company’s capital and reserves, and must be shown in as such in the company’s group financial statements (Section 320). The same applies if it is a nominee of the company which holds the shares in the company.
10. In the notes to the company’s entity financial statements, the company must disclose the policies it adopted in determining the items and amounts to be determined on the balance sheet and the same, with regard to the profit and loss account (Section 321).
11. The requirements for the disclosure of remuneration paid to the auditor for audit (or non-audit, or audit related) work are set out in Section 322. This will be familiar to practitioners from s 161D of the 1963 Act.
12. Any off-balance sheet arrangement that the company is party to during the financial year must be disclosed, as set out in Section 324.