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 of 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 as needed.

After consultation with the market, the Guidelines have been refreshed for the first time in seven years in order to reflect recent developments in corporate reporting. The need for this has arisen largely from the implementation of The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 (the ‘Strategic Report Regulations’). This legislation removes the requirement for a Business Review in the directors’ report which was the foundation of the Guidelines’ enhanced disclosure requirements. The areas previously covered in the ‘Business Review’ are now covered in a new ‘Strategic Report’ together with some new reporting matters. The disclosure requirements differ between quoted companies, large private companies and other companies.

The Group has taken the view that the Guidelines should be aligned with the requirements for quoted companies, with a few exceptions, in order to continue to meet our expectation for large private equity corporate reporting to be in line with that of the FTSE 350 Group.

In setting out the Guidelines for Disclosure and Transparency in Private Equity revised July 2014 (the ‘updated Guidelines’) we have continued to make it clear which areas are specific to the Guidelines due to private equity ownership, which would be required by large private companies in any case, and which areas are incremental due to our aspiration of matching the standard of quoted company reporting.

The updated Guidelines are applicable to relevant portfolio companies for September 2014 year ends onwards although early adoption is encouraged where possible for earlier year ends.

The Group has commissioned PwC to produce this guide to illustrate how the updated Guidelines should be implemented and to share examples of good practice from both the world of private equity and also other companies that have produced disclosures relevant to strategic reports. The Group has also asked PwC to examine the compliance of a sample of portfolio accounts with the updated Guidelines for September 2014 year ends onwards. Our first report on compliance with the updated Guidelines will be issued in December 2015.