2.04 Neither report gives the unexpired term of the service contracts of the directors proposed for re-election
UK Company B · a UK-listed technology and logistics group · Compliance or disclosure gap
In brief
A UK listed company's annual financial report must state the unexpired term of the service contract of [wording masked] re-election at the next AGM, and say so where a proposed director has no service contract. All directors stand for re-election at the 2026 AGM (one for election), but neither the 2025 nor the 2024 report contains this statement: the words 'unexpired', 'service contract' and 'contracts of service' appear nowhere, and the remuneration report refers readers to the policy in the 2023 Annual Report and on the website.
The evidence, as filed
Screenshot withheld to protect the company’s identity: Annual Report 2025, page 115; Annual Report 2024, page 106; Annual Report 2025, page 138. Their wording or layout could lead back to the company even with names and figures masked; the evidence list below records what each page shows.
What the report shows, and what the rule requires
| What the annual report shows | What the rule requires |
|---|---|
| What the annual report shows p.115: '[wording masked] [name], will submit themselves for re-election'; no statement of unexpired contract terms in either report; p.138: the full Policy is 'on our website ... and on pages 191 to 201 of the FY23 Annual Report'. | What the rule requires A statement such as: 'The Executive Directors have rolling service contracts terminable on [12] months' notice with no fixed expiry; the Non-Executive Directors have letters of appointment, not service contracts, for terms expiring on [dates].' |
What we checked: Governance report, remuneration report, directors' report and shareholder information in both years; whole-report searches.
The rule
UK Listing Rules, UKLR 6.6.6R(7)
Version relied on: FCA Handbook, UK Listing Rules (UKLR), in force from July 2024, as at the financial year end
a statement setting out details of the unexpired term of any director’s service contract of a director proposed for election or re-election at the forthcoming annual general meeting, and, if any director proposed for election or re-election does not have a directors’ service contract, a statement to that effect
Why it applies here: the Listing Rule requires the statement in the annual financial report itself.
Why it matters
- Shareholders voting on re-election are not told what contractual commitment the company has to each director, which is the information the rule exists to give.
- The FCA can treat a missing Listing Rule statement as a breach of the continuing obligations.
Shareholders voting on re-election are not told what contractual commitment the company has to each director, which is the information the rule exists to give. The FCA can treat a missing Listing Rule statement as a breach of the continuing obligations.
Exposure
Possible FCA enquiry or a request to include the statement in the next annual financial report; in practice cured by adding the statement.
Our workings
the 2025 report says all current directors except one will stand for re-election at the 2026 AGM and that one is subject to election; the 2024 report said the same for the 2025 AGM. Neither report states the unexpired term of any director's service contract, or that the non-executive directors have no service contract; the only references to directors' contractual terms are a statement that each non-executive director's appointment letter sets a minimum time commitment a statement that a retiring director's fees were paid under her letter of appointment, and the statements that the Senior Independent Director's appointment has been extended by a further year, which say nothing of the other directors' terms. The remuneration report says the full policy is on the website and in the 2023 Annual Report.
none.
A policy published in an earlier year's report or on the website is not part of this year's annual financial report, and the annual financial report must be complete in itself; nor does the rule allow the details to be left to the AGM notice. The omission is small in substance but complete, and repeated in both years.
Management’s best defence, and our reply
Management would say the notice periods and contract terms are set out in the Directors' Remuneration Policy, which shareholders approved in 2024 and which is published on the website and in the 2023 Annual Report, and that the AGM notice and the terms available for inspection give shareholders what they need before voting. They might add that the non-executive directors have letters of appointment, not service contracts, so there is little to report. The answer: UKLR 6.6.6R(7) requires the statement in this annual financial report, including a statement where a director has no service contract; a policy published in an earlier report or on a website is not part of it, and the 2025 report does not cross-refer to any such statement.
The fix
- Add to the governance report under 'Director re-election': 'The Executive Directors' service contracts have no fixed term and are terminable on [x] months' notice by either party; the Non-Executive Directors, including the Chair, do not have service contracts; their letters of appointment run until [date] and are terminable on [x] months' notice.'
Evidence relied on
| # | What it shows | Type | Where |
|---|---|---|---|
| 1 | Directors proposed for re-election and election at the 2026 AGM | Document | Annual Report 2025, page 115 |
| 2 | The policy is not reproduced in this report | Document | Annual Report 2025, page 138 |
| 3 | 2024 report: directors proposed for re-election at the 2025 AGM | Document | Annual Report 2024, page 106 |
Absence check
- Document
- Annual Report 2025
- Where it would appear
- Director re-election
- What is missing
- the unexpired term of each proposed director's service contract, or a statement that a director has none
- Pages looked at
- p.100-116, 131-168, 282-286
- Result
- 'notice period' hits only page 165 (a customer agreement with [customer]); 'appointment letter' hits page 114 (minimum time commitment of non-executive directors) and 'letter of appointment' hits page 154 (fees paid to a retiring director); none states the term of any director's contract. The other terms do not hit.
Absence check
- Document
- Annual Report 2024
- Where it would appear
- Director re-election
- What is missing
- the unexpired term of each proposed director's service contract, or a statement that a director has none
- Pages looked at
- Annual Report [amount].90-108, 124-155
- Result
- 'notice period' hits only page 152 (the [customer] agreement) and 'appointment letter' hits page 105 (time commitment); neither gives a contract term. The other terms do not hit.
Prepared by Pramanex from the company’s published annual reports, without the company’s involvement, to show how an annual report review reads. The company is not named, and nothing on this page is a statement about any identifiable company. Observations are not an audit, review or other assurance engagement, and not legal advice. A regulator-style question is a question, not a conclusion.
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