Starting in 2018, small companies will benefit from a reduction in the burden of their management report, but the public limited companies will be required to draw up a report on corporate governance.
Following an order issued this summer, the Small Business Management Report is streamlined. Conversely, that of public limited companies is heightened by a report on corporate governance.
Reduction of Small Business Management Report
As of next year, small companies will benefit from a reduction in the content of their management report. These are those which, at the end of their last financial year, do not exceed two of the following three thresholds: € 4 million in balance sheet total, € 8 million in sales and 50 employees.
From now on, a certain amount of information will no longer have to appear on the management report as “Company’s research and development activities” or the mention of their branches.
In addition, there is no need to mention non-financial key performance indicators related to the specific activity of the company, such as information on environmental and personnel issues or indications of the company’s objectives and policy. Company in respect of hedging of each main category of forecasted transactions for which hedge accounting is used, or even information relating to the company’s exposure to price, credit, liquidity and cash risks.
Obligation to draw up a report on corporate governance for public limited companies
Beginning in 2018 (fiscal years beginning on or after January 1, 2017), all public limited companies and limited partnerships, and not only listed companies, will be required to prepare a report on corporate governance . This report, prepared by the Board of Directors or the Supervisory Board, must be presented at the Annual Meeting of Accounts.
In practice: this new report will take the form of an autonomous report attached to the management report. However, in public limited companies with a board of directors, it may be directly included in the management report (in a specific section).
The report on corporate governance will include information on the functioning of the administrative or management bodies, which were previously mentioned or annexed to the management report, and in particular:
- the list of mandates exercised by each corporate officer;
- agreements between an officer or shareholder with a fraction of the voting rights exceeding 10% and a subsidiary;
- a table of delegations granted by the shareholders’ meeting concerning the capital increase;
- the choice made by the company between one of the two methods of exercising the general management, namely by the Chairman of the Board of Directors or by a Chief Executive Officer (in the first report only or in the event of modification).
Source: Les Echos