The Companies Act 2006 (Strategic Report and Directors Report) Regulations 2013 (the Regulations) came into force on 1 October 2013. However, some directors may have overlooked the extent and importance of the Regulations.
The Regulations now require companies to publish a strategic report rather than a business review. However, the Regulations do not apply if the company is entitled to the small companies exemption. The strategic report is designed to provide information to the members of the company and help them assess whether directors have performed their duties. It must contain a review of the company’s business and a description of the principal risks and uncertainties. The Regulations do not differ from the draft Regulations that were published in June of last year, but still apply to all financial years ending on or after 30 September 2013. This is another reporting requirement for directors and should include a comprehensive analysis of development performance, and the company’s business at the end of the financial year.
For quoted companies the position is even more onerous. The strategic report must consider business trends and factors for the future; information about environmental impact by the company; details of the company’s employees; and social, community and human rights issues.
The full regulations can be found here