SIP 7 requires you to include details of dividends to preferential and unsecured creditors, with the dates and amounts of dividends (pence in the £) in receipts and payments accounts or in the reports that accompany them and this is usually done quite well. However, from what we see, the new requirements about disclosure of distributions to members imposed by the 2010 Rules are causing problems in MVLs.
The 2010 Rules introduced specific detailed disclosure requirements for distributions to shareholders in MVLs, but only in the receipts and payments account produced when a final report is issued. Rule 4.126A(4)(xiv) sets out the information relating to distributions to members that must be included in the receipts and payments account accompanying the final report to members. It requires that the following must be included in respect of each separate class of share:
• the amount paid to shareholders – i.e. the total amount distributed to shareholders;
• the amount distributed per share; and
• the nominal value of each share.
We are finding that the last two requirements are often being overlooked.
In view of the wording of the rule, which says that information must be included in the summary of receipts and payments, it is not sufficient just to have the information in the final report. It has to be in the receipts and payments account itself, but it can be included by way of note to the receipts and payments account rather than in the body of the account itself.
There is no corresponding provision for annual reports, which are governed by rule 4.49C, so you only have to disclose the amount distributed in the receipts and payments account.
