This article, the sixteenth in our series on the Companies Act 2006, will focus on the strategic report and director’s report, outlining what information needs to be included in each to inform members about the financial position and performance of the company
Reporting by the directors to members is required to accompany annual financial statements. Its nature and extent is dependent on the status of the company. The requirements for public companies are greater. A directors’ report (and in some cases a strategic report) is to be prepared for each financial year.
The requirement for a directorsʼ report is a long-standing provision of companiesʼ legislation. A directorsʼ report is to be prepared for each financial year. The report is included with the companyʼs annual financial statements, is (if the company is a public company) laid before the company in general meeting and delivered to the Registrar of Companies.
The content of the report is prescribed mainly in s416–418 with detailed requirements contained in the accounting regulations (the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410) and the Small Companies and Groups (Accounts and Directorsʼ Reports) Regulations 2008 (SI 2008/409). Exemptions as to content are available to small and medium-sized companies.
