Full Steam Ahead to 2005

Deadlines ruled the waves on board the P&O ship Aurora at the sixth annual Richmond Events Finance Directors’ Forum. With time ticking away until new regulation comes into force in the middle of the decade, this year’s Forum programme was designed to get FDs ready for changes to the way they produce company accounts, deal with pensions and work with their banks.

First up was Isobel Sharp of Deloitte & Touche, who presented a keynote speech on International Accounting Standards that are due to be implemented in 2005.

Finance directors, she said, have to convert this year-end’s balance sheet in IASs if they are going to be able to get comparative figures for producing IAS-compliant accounts for 2004 and 2005 when the new standards become mandatory.

But far from ploughing through the standards’ piecemeal, Sharp took a humorous and direct approach. Yes standards are dull, and yes the Americans and the rest of the world can’t agree on how the standards are going to look, or whether they will be rules- or principles-based, but IAS is not a subject that is going to go away. “There is no one-size-fits-all approach to IASs,” Sharp said. “But you should panic equally.”

Steve Sprigens from Barclays Bank warned delegates at the treasury and cash management workshop that the upcoming introduction of the Basel II capital adequacy regulations for banks would have significant impact on lenders’ relationships with their corporate borrowers as the banks will in future have to set aside reserves in accordance with the credit risk of individual loans. Hence, they will be pricing more keenly and be anxious to ensure they are making the right return on their exposure.

Sprigens offered practical advice, such as encouraging FDs to negotiate seasonal loan facilities if that’s all their business required, as even a facility that’s not drawn down will drain bank reserves.

Coming straight after a session on wine-tasting, you may have thought that a keynote speech on pensions would be a good opportunity for a snooze.

But as always, Pensions Personality of the Year Steve Bee of Scottish Life had the audience in stitches. Wearing dark glasses and sporting a sense of humour slightly downbeat of Jack Dee, Bee explained that the government will introduce new pensions rules on 6 April 2005 that will limit the amount of money executives can put in their pension pot to £1.4m.

Bee began with a totally blank slide. “This slide has been with my compliance people for 10 days and they haven’t found anything wrong with it yet,” he said. Then, with use of an overhead projector and some felt-tip pens, Bee explained the complicated and sometimes illogical world of pensions regulation.

During a lively question and answer session, Bee had one word of warning.

“I will answer any question, apart from the ones beginning with ‘Why …?'” We recommend you go to his website www.technical-central.co.uk/beehive to find out more.