The objective of this guide is to assist private equity owned portfolio companies to improve the transparency and disclosure in their financial and narrative reporting by highlighting good practice examples.

The Guidelines Monitoring Group (the ‘Group’) was established to monitor conformity of the UK private equity industry with the Guidelines for Disclosure and Transparency in Private Equity (the ‘Guidelines’). The Guidelines resulted from an independent review of the adequacy of disclosure and transparency in reporting by private equity owned companies undertaken by Sir David Walker at the request of the British Private Equity and Venture Capital Association (‘BVCA’). The Group is also responsible for making recommendations to the BVCA for changes to the Guidelines, if required. The Group aims to guide and assist the industry in improving overall levels of disclosure and transparency in reporting.

In December 2013, the Group issued its sixth annual report on monitoring conformity by qualifying private equity firms and portfolio companies. It was good to see a high level of compliance in the companies who were subject to the Guidelines for the first time. The overall standard of corporate reporting continued to improve across the population, as in general most companies reached a good level of compliance. The quality and usefulness of disclosures continues to be heavily in focus, and updated guidance has been issued by the Department of Business, Innovation and Skills (‘BIS’) to cover what should be included in respect of narrative reporting for both private and quoted companies.

The Group is responsible for ensuring that the Guidelines evolve with changes in the industry and financial reporting over time. We are committed to implementing changes that ensure portfolio companies report to, or exceed, the standard seen in the FTSE 350. With this in mind, we will review how those areas of the new requirements of BIS and the FRC applicable to listed companies will be incorporated into the Guidelines. The updated Guidelines will be applicable for reporters in scope for September 2014 year ends onwards and further guidance will be shared in the spring and finalised by June 2014. The Group has commissioned this guide to help portfolio companies conform under the current Guidelines and to understand the appropriate level of disclosure. This guide also includes an analysis of the detailed requirements of the Guidelines and a summary of good practice, using examples from the reviews conducted since the introduction of the Guidelines.

The Group encourages all private equity houses and portfolio companies to build on the achievements of the last six years and continue to enhance their levels of disclosure and transparency in reporting by using this guide.

The Group would like to thank PwC for their continued efforts in assisting the Group with the review of the portfolio companies and the production of this guide.