Bellway

UK Corporate Governance Code

Corporate governance has faced immense scrutiny recently following the high-profile collapses of BHS in 2016 and Carillion in January 2018, with MPs, the media and the public blaming the actions of the directors and auditors and all asking the same question… where was the board?

MPs, shareholders and the public have also been asking how effective the Financial Reporting Council’s (FRC) Corporate Governance Code has been in deterring poor corporate governance at the UK’s largest companies, following a raft of corporate failures. In July 2018 the FRC released a new UK Corporate Governance Code, (the Code) for listed companies in the UK. It also issued an update on its Guidance on Board Effectiveness. The Code is applicable to all companies with a premium listing, whether incorporated in the UK or elsewhere.

The new Code applies to accounting periods beginning on or after 1 January 2019, so with that in mind, this Common Practices report looks at how companies have been reporting on the current Code. We look at some good examples of reporting and look at the “explanations” made regarding compliance with the Code. We also discuss what’s new in the 2018 Code to enable readers to prepare for the upcoming changes.

The annual reports of 25 UK listed companies with year-ends between 31 December 2017 and 30 September 2018 were selected at random for review, across a range of industries. The full list of sample companies detailing company name, period end, auditor and industry classification can be found at the end of this report.

Bellway plc Monitor

Bellway plc Annual Report 2018
CR Monitor Issue: 
2019/0106
Company covered: 
Bellway plc
Period End: 
31 July, 2018
Report issued on 14 January 2019 covered the following practice issues:
Pronouncements
Extended disclosure in respect of the impact of the new accounting standards including IFRS 15 “Revenue from contracts with customers” and IFRS 16 "leases".
Pronouncements
Presentation of a reconciliation of movements in liabilities arising from financing activities following adoption of an amendment to IAS 7 "Statement of cash flows".
Change
Extended disclosure of accounting estimates and judgements includes a sensitivity analysis.

Risk and viability in the strategic report

In light of recent high-profile collapses such as Carillion, the reporting by companies of risks and long-term viability is once again in the spotlight. Investors and other stakeholders expect detailed, specific information in the annual report which clearly sets out the key risks facing the company and the potential impact of these risks on the company’s longer-term viability. This report analyses the consolidated financial statements of 20 UK listed companies to assess the quality of risk and viability reporting in the annual report.

Bellway plc Monitor

Bellway plc Annual Report 2017
CR Monitor Issue: 
2018/0101
Company covered: 
Bellway plc
Period End: 
31 July, 2017
Report issued on 2 January 2018 covered the following practice issues:
Change
Presentation of audit report enhanced by inclusion of overview section and diagrams.
New
Introduction of annual report section discussing alternative performance measures.
New
Disclosure of the sale of a property to a related party in note to the accounts.

Bellway plc Interims Monitor

Interim Financial Report
CR Interim Monitor Issue: 
2016/0405
Period End: 
31 January 2016
Listing Status: 
FTSE Mid 250
ICB Industry Classification: 
3728 Home Construction
Auditor: 
KPMG
New
Expected gain disclosed on joint venture classified as held for sale.

Bellway p.l.c. Monitor

Bellway p.l.c. Annual Report 2014
CR Monitor Issue: 
2014/1503
Company covered: 
Bellway p.l.c.
Period End: 
31 July 2014
Report issued on 12 January 2015 covered the following practice issues:
Pronouncements
Additional disclosure on pension scheme risks and pension asset types.
Change
Five key performance measures identified as principal.

Other Comprehensive Income: Presentation of items by reclassification status an emerging issue under IFRS

This report considers the presentation of other comprehensive income following the issue of amendments to IAS 1 “Presentation of financial statements”. It considers how the various line items that represent other comprehensive income are reported by nature focusing on the presentational split between those items that will not be reclassified subsequently to profit or loss and those that will be reclassified to profit or loss when specific conditions are met. 

Bellway p.l.c. Monitor

Bellway p.l.c. Annual Report 2013
CR Monitor Issue: 
2014/0104
Company covered: 
Bellway p.l.c.
Period End: 
31 July 2013
Report issued on 07 January 2014 covered the following practice issues:
Pronouncements
Director's remuneration disclosures restructured in light of new reporting rules.
Restatement
Directors' remuneration table includes long term incentive gains.
Inconsistent
Disclosure of other comprehensive income falls short of amended IAS 1.
Pronouncements
Disclosure of Board evaluation procedures made in line with impending corporate governance rules.