SSM Annual Dialogue 2022: Cross-Referencing of Information to be disclosed to the Directors' Report

Following the recent Annual Dialogue 2022 conducted by Suruhanjaya Syarikat Malaysia (SSM) on 6 October 2022, SSM provided the presentation slides and Summary of Issues and Feedback for the public.

"Cross-Referencing of Information to be disclosed to the Directors' Report" is one of the issues that have been addressed.

Directors’ remuneration of the holding company, as well as its subsidiaries required to be disclosed in the Directors’ Report as well as notes to the financial statements.

As informed at the last CPCF Technical meeting, cross-referencing of directors’ remuneration in the Directors’ Report to notes to financial statements would not be acceptable given both disclosures serve different purposes under different reports for ease of comparison with the previous year’s report. One disclosure is for the purpose of the Directors‘ Report, whilst the other is for the purpose of financial statements.

Does this principle or requirement similarly apply to other items in the directors’ report, such as significant events during the year, subsequent events, material transfers to and from reserves, ESOS etc.?

This will inevitably make the directors’ report of the parent/group lengthy and too detailed.

Recommendation:

SSM to consider allowing cross-referencing to notes of financial statements for most remuneration) for ease of compilation. A condensed report is also easier to read and comprehend.

Feedback:

Each company report serves different purposes, and hence the same requirements of not allowing cross-referencing to financial statements apply to similar items in the Directors' Report.

This is to ensure that the Directors' Report is, on its own, complete.