A new product: tracking and reporting for a Major FTSE 100 Company
All listed entities have an obligation to include details of their directors’ share interests (including any interests held by directors’ connected persons) in their annual report. This information, the underlying data and supporting evidence also requires review and sign off by the company’s auditors.
The level of administrative resource plus the costs of external auditors to manage this process led our client to the decision to develop an in-house recording system.
The system developed by the company (DITTO) was successfully implemented in 2010. DITTO recorded details of transactions and provided a detailed audit trail for review by their external auditors, as well as a range of reports that could be used to create the annual report tables.
It was estimated that DITTO significantly reduced annual audit fees as well as providing the ability to produce accurate data quickly and reliably.
After eight years of use and as business requirements evolved, DITTO required a major overhaul to utilise new technologies, introduce a higher level of security and to further develop functionality. Ultimately however, with the company moving from a culture of supporting in-house developments and the risks of maintaining outdated software, the decision was made to outsource the development of a new version of DITTO.
Cytec Solutions, a valued existing partner, were identified as the preferred provider for the development of the new version of DITTO.
From early on, it was determined that Cytec’s existing Share plan software would be an ideal platform to develop a solution that could satisfy the company’s requirements.
Key software features required included:
- Ability to track holdings under various share plans and registers for both the company’s directors, PDMRs and their closely associated persons
- Upload supporting evidence when recording transactions
- Track and report on share ownership requirements
- Generate directors’ interests certificates detailing all share-related transactions for a given period
- Create the various directors’ interests tables as used in the report and accounts
- Full audit trail of all transactions entered into the application
Workshops were held to gather requirements and document a detailed functional specification. From this, screen mock-ups were produced which enabled the company to appreciate how the application would work and allowed input into the designs.
Daily calls ensured that both parties were aware of progress and that any changes could be managed quickly and efficiently. A continual testing programme throughout the development phase also meant that any defects or amendments to the design could be addressed quickly without disrupting the overall project timelines.
Despite the sheer volume and different data structure of DITTO, migration of the data to Sharetrack was completed with relative ease due to the attention focussed on cleansing and re-structuring existing data once it had been extracted to Excel.
Due to the detailed nature of the information and the added complexity of how to accommodate those directors and their connected persons who were not in place for the full financial year, re-creating the annual report tables was a major challenge. However, close communication during the development of the reports together with continual testing meant that the reports were continually refined and were able to accommodate all possible scenarios.
After four months of development the new system went live in Feb 2019 and the company was able to use the reports for their year-end reporting. Following a short period with both systems being run in parallel, the original DITTO application has been timetabled to de-commission.
Future potential enhancements include;
- Ability for directors to view and sign off their holdings and transactions via a portal
- Directors to view their position against the company’s share ownership requirements via a portal
- Integrating Sharetrack directly with one or more of the company’s share plan providers to remove the need for the company to upload the transactions
The new system is easier to update with additional time savings being delivered through improved reporting for both the company and their auditors.
Cytec will maintain the new application, be responsible for future enhancements and for maintaining DITTO on an up-to-date technology platform. The company will benefit from Cytec’s secure environment, robust process and the controls that they have in place to ensure data security.