I always find reading the notes to financial statements is where you find the nitty gritty.
Upon reading them, I see these interesting notes.
Starting in 2015-16, CAFC started using, as a "first time adoption", a law called FRS102 to file their reports. On page 15, part 2.1, it gives the reason why...
"FRS102 utilizes some critical accounting estimates." Specifically, it allows CAFC to "take advantage of certain exceptions from disclosing management personnel compensation."
Uhhhhh. Hello?
In other words, in the parts of the report where they claim "director compensation was nil", that may not be the case? I always felt it was ridiculous for them to claim they never paid themselves. Katy gotta eat!
FRS102 allows them to NOT disclose how much "key management" make, as long as the "consolidated" accounts are "true and fair." It also claims that by using FRS102, they don't have to show a "cash flow statement" that might have the real data about what flowed where. It also allows them to not show certain payments between parent and subsidiary companies.
Who is "key management"?
FRS102 defines key management as "those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. Compensation includes all employee benefits in exchange for services rendered to the entity." Sounds like RD and KM to me!
Looking at many articles about this, it seems the kind of compensation that is hidden by KRS102 is not actual pay, but is usually a scheme where "share-based payments using equity in an entity" is used. Any chance that maybe KM has been given equity recently so she gets paid in case of sale? Perhaps Murray, as well?
One thing the law makes clear though is that you can only avoid disclosing payments in your financials under KRS102 as long as "aggregate compensation" for those individuals is listed in the parent company's account. Arent those coming out soon?
If an accountant in England can add to this or clear it up, would love to hear more.
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This may be why they have posted the CAFC Ltd accounts on the website in order to to try to distract attention from the Baton accounts, which will appear on the Companies House site shortly, but if that's the case it's a feeble effort. Does the UK law allow the renumeration to hidden in the ultimate parent company accounts abroad, i.e. Staprix?
I was told that KM's remuneration is split between Charlton and Staprix, and to expect the figure that emerges to be £80k, with the balance of the total £250k through Staprix, but I cannot vouch for the accuracy of that.
FRS 102 is the new accounting standard applicable to almost all unlisted companies in the UK, as a replacement to the old 'UK GAAP' (Generally Accepted Accounting Practice) standards which would have been used previously. Old UK GAAP was no longer permitted from accounting periods starting on or after 1 January 2015, therefore the vast majority of UK companies moved across to FRS 102 last year. There is no big conspiracy here.