AMBA CoSec

ACSP REGISTRATION HAS BEEN DELAYED Companies House has announced that their service to register as an Authorised Corporate Service Provider (ACSP) has been delayed. The launch of Companies House service to register as an ACSP has been delayed. At present no new date has been given. AMBA will advise you once updates are given.

For many companies, the Annual Report and accounts (ARA) aren’t just a regulatory and legal requirement; they’re a powerful tool to showcase financial health, strategic direction, corporate transparency, and communication with shareholders, so they are worth investing in. A well-crafted ARA strengthens investor confidence and positions your company for future success. Several factors contribute to a successful ARA, but at the centre is organisation and planning: • Set a timetable – have clear targets for drafting, reviewing and completing the ARA. • Tell your story – beyond the numbers, stakeholders want to understand your company’s performance, challenges, and future vision. Make it engaging. • Clearly present the financial statements – investors and analysts rely on this data to make informed decisions. • Transparency builds trust – address risks, governance, and ESG factors. • Timeliness matters – late or unclear reporting can raise red flags. Stay proactive throughout the year and well-prepared. Organising ARA can be a huge undertaking and AMBA is here to help. We offer assistance to project manage the process, draft and review the ‘front-end’ sections within the ARA, and liaise with the registrar and printer in respect of mailing the ARA to shareholders. For more information, get in touch with AMBA at info@ambacosec.com #AnnualReports #InvestorRelations #CorporateTransparency #CorporateGovernance

Key Updates in the 2023 QCA Corporate Governance Code & Next Steps The 2023 QCA Code introduces significant changes to corporate governance. Here’s what companies need to know: Board Independence ·       At least 50% of the board must be independent NEDs. ·       The chair should be independent. Board Diversity Expands beyond gender diversity to include: ·       Socio-economic background;  ·       Ethnicity & cultural background; and ·       Age & experience. ESG Integration ·       Stronger alignment of environmental & social factors with strategy and reporting. ·       Clear ESG disclosures linked to long-term value creation. Succession Planning ·       A proactive Nomination Committee in ensuring leadership continuity. Remuneration Transparency ·       New principle in the 2023 QCA Code requiring greater transparency in executive pay. ·       Encourages annual shareholder votes on remuneration policies.

In November 2023, the Quoted Companies Alliance (QCA) released an updated QCA Corporate Governance Code (2023 QCA Code), marking its first revision since 2018. While the Code remains structured around its 10 core principles, key updates emphasise: • Stakeholder engagement • Board composition & independence • Succession planning • Environmental, Social, and Governance (ESG) integration • Remuneration policies & transparency Implementation Timeline: • The 2023 QCA Code applies to financial years starting on or after 1 April 2024. • Companies have a 12-month grace period for full adoption. • The first mandatory disclosures will be expected in 2025. To ensure compliance, companies must: • Apply all 10 principles and clearly explain their approach. • Provide a transparent explanation if they deviate from any principle. Stay tuned for AMBA’s next post, where we’ll outline the key updates and steps companies should take to ensure compliance. #CorporateGovernance #QCA #QCA2023 #BoardLeadership #ESG

Do you need interim company secretarial support for your in-house team? AMBA can provide flexible and experienced interim support to your in-house Company Secretarial team for busy times or when your own team is under resourced. Additional support from AMBA’ s expert team can help to manage workloads when deliverable timeframes are short. Ad-hoc support from the AMBA team at critical times can make all the difference and our services are tailored to suit each of our clients’ requirements, be it a single assignment or managing all of your Corporate Governance and Company Secretarial requirements. “AMBA provided flexible and high-quality support to the in- house Company Secretarial team. They acted professionally at all times, and I cannot recommend them highly enough.” Company Secretary, J O Hambro Capital Management Limited We can support your in-house team across many areas, including: 1. Corporate Governance - In-depth experience and expert guidance on corporate governance matters and best practices. 2. Board and Committee Support - Production of agendas and board packs, accurate and impartial minutes, and resolutions for board and committee meetings. 3. Statutory Services – Preparation and filing of statutory filings with Companies House. 4. Annual Reports – Expert drafting of ‘front-end’, governance sections. 5. Expertise in Listed Companies – Specific services for Main market, AIM or Aquis clients. 6. FCA regulated businesses – Provision of expert support to meet the stricter governance, reporting and compliance obligations. 7. Transaction Support – Support with corporate transactions and ad-hoc projects. 8. Annual General Meetings – Co-ordinating all proceedings for AGMS and GMs. 9. Board Evaluations – Assessing the Board’s performance, governance practices and individual member contributions. To learn more about our specific interim services to support your in-house team, please contact the team on 0118 203 0686 or email us at enquiries@ambacosec.com

As of the 25 February 2025, AMBA will be registering as an Authorised Corporate Service Provider (ACSP) and will be able to carry out identity verification checks on directors, PSCs and those delivering documents to the Registrar of Companies . This requirements is being introduced as part of the Economic Crime and Corporate Transparency Act (ECCTA), which became law in October 2023.

As ESG considerations remain at the forefront of topics being considered by companies, we at AMBA have observed some developing trends. Recent changes in EU legislation will affect international companies and may change how groups conduct themselves. In December 2024, QatarEnergy’s CEO criticised the EU’s new strict ESG reporting directive as burdensome and ill-suited to its global operations, calling the one-size-fits-all approach as making “absolutely no sense.” Saad Al-Kaabi suggested that if commonsense did not prevail QatarEnergy would cease to export gas to the EU. This might appear to be an extreme stance, but it has been echoed elsewhere in Europe, with some countries delaying the implementation of EU regulations regarding ESG reporting. The burden is not only operational but also financial, as ESG audits can double the costs of audit fees. Given that audit scopes are often ill-defined due to their novelty, this is the starting point. However, an additional unseen cost is the time spent implementing policies, procedures, and systems to comply, plus the hours spent chasing suppliers to understand their ESG compliance. On the flipside, sustainability has become a key selling point for some companies. Not only in terms of the environment but also in terms of the emphasis on diversity and social impact and what it can do to enhance profitability is being fully embraced. Some boards see B Corp Certification as evidence to demonstrate to stakeholders that they are serious about their obligations and that they recognise that ESG has a lot to offer them. At AMBA, we have seen some companies creating a culture based on impact, and early signs are that this is a powerful tool that resonates with people, shareholders, potential investors, customers, and third-party relationships. However, we have also observed that small companies listed on secondary markets, such as AIM, struggle to comply despite having no ESG audit requirements due to their size. This is not because they do not want to comply but because if your entire company has a handful of people and your future is uncertain, profitability is the only real goal.  AMBA has performed gap analyses to identify where these companies are complying and where they need to explain in more detail. Again, a commonsense approach is needed. For example, adopting an ‘Equality and Diversity Policy’ is more of an expression of intention rather than a reality for many companies, and the costs of employing an external advisor to draft such a policy would not be in the interests of any stakeholder. In conclusion, there is a lot about ESG to embrace, but the implementation is falling short because, in some cases, it makes no sense. Even if a total overhaul of the legislation is impractical and probably undesirable, it is hoped that regulators and stakeholders alike will appreciate the hurdles and view failure to comply not as a desire to rebel but will accept the explanations offered with alacrity.

A well-structured Annual Report is essential for regulatory compliance, investor confidence, and stakeholder engagement. Early drafting and planning are key to a smooth reporting process, allowing sufficient time for review, alignment with regulatory changes, and clear communication of strategic priorities. Governance and regulatory requirements increase the importance of ensuring that each section provides well-thought-out content that is informative and provides transparency. Key Governance sections within your Company’s Annual Report include: 1. Stakeholder Engagement Narrative on how the Company engages with shareholders, employees, customers, suppliers, and communities. It should outline engagement activities, communication channels, and how feedback influences decision-making, ensuring alignment with governance codes, strategy and ESG expectations. 2. Corporate Governance Statement This section provides clarity on the Company’s Corporate Governance structure, how it complies with its chosen Corporate Governance code, and how strong governance is instilled throughout the business from the top down. 3. Board Composition & Activities A transparent account of the Board and committee structures, diversity, independence, and skills matrix are essential. It should detail the Board’s responsibilities, succession planning, leadership effectiveness, and key activities, highlighting governance strength. 4. Committee Reports Detailed reports on Board committees, including Audit, Nomination, and Remuneration, are requisite to ensure compliance with the chosen Corporate Governance Code. The reports highlight each committee’s role, activities, key discussions, and impact, enhancing transparency and investor confidence. 5. Directors’ Remuneration Report With increased scrutiny on executive pay, well-drafted, clear, and regulatory-compliant remuneration disclosures are vital. The report should include detailed pay policies, performance-linked incentives, remuneration outcomes, and shareholder engagement on pay matters, aligning with regulatory and investor expectations. 6. s172 Report A well-structured s172 demonstrates how directors uphold their duty to consider stakeholders in decision-making. This ensures compliance with CA2006 by clearly articulating how decisions impact employees, suppliers, communities, and long-term success of the company. 7. Statement of Directors’ Responsibilities Provides a clear and legally compliant outline of directors’ responsibilities regarding financial statements, corporate governance, risk management, and going concern considerations. By leveraging AMBA’s expertise, your company can produce a polished, compliant, and strategically aligned annual report. Our drafting and project management services transform regulatory obligations into a compelling corporate narrative that fosters trust and transparency while keeping your reporting process efficient and stress-free.

Lessons learnt – a reminder for directors and company secretaries to ensure that PDMRS understand their obligations under MAR On 26 November 2024, the FCA imposed a financial penalty of £123,500 on András Sebők, chief supply chain officer of Wizz Air Holdings plc, for breaches under Article 19 (1) and 19(11) of the Market Abuse Regulations (MAR). The penalty imposed followed a settlement between the FCA and Mr Sebők, reducing the fine by 30%. The breaches were in respect of 115 trades in shares of Wizz Air without notifying the FCA or Wizz Air within the required timeframes. On 18 occasions, trades were executed during a close period. Unlike previous FCA fines for PDMR breaches, there was no fine imposed on Wizz Air for failing to have adequate systems and processes in place to ensure that PDMRs understand their obligations. This serves as a reminder of the importance of ensuring that there are robust procedures and controls in place to ensure that PDMRs are aware of their obligations under MAR, not only for the individual’s protection but for mitigating the risk of reputational damage and financial penalties for companies. Boards should be looking at their policies and procedures to ensure: 1. Comprehensive Policies and Training: Detailed insider trading and disclosure policies are in place that align with MAR. Regular training for PDMRs is essential to ensure they understand their duties, ensuring PDMRs confirm in writing their understanding of their obligations. 2. Obtaining clearance to deal / trading windows: Companies should establish and communicate clear trading windows to PDMRs, during which transactions can occur and ensure that PDMRs understand the requirement to obtain clearance to deal prior to any trade. 3. Notification of Obligations: PDMRs must be formally informed of their obligations under MAR, includes their duty to disclosing personal transactions involving the company’s securities within three business days and ensuring no trades occur during closed periods unless permitted under pre-agreed exceptional circumstances. 4. Insider Lists: Maintaining an up-to-date insider list is crucial. PDMRs included on such lists must acknowledge their obligations in writing and confirm their understanding of MAR restrictions. 5. Monitoring and Escalation Procedures: Robust systems to monitor PDMR transactions and ensure compliance with disclosure requirements are critical. Any breaches or potential violations should be escalated to compliance teams promptly. 6. Ongoing Communication: Regular updates on regulatory changes and best practices ensure that PDMRs stay informed of evolving obligations. If you would like to learn more about how AMBA can help to ensure that your company has robust procedures and controls in place, please contact us directly. Please contact the AMBA team today on T: 0118 203 0686 #corporategovernance #boardevaluation #boardevaluation

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