Business Review

Under Section 327 of the Act, all companies are required to include a fair review of the business. This business review is required to include:

  • A fair review of the business of the company, and
  • A description of the principal risks and uncertainties facing the company

 

The business review should be a balanced and comprehensive analysis of the development and performance of the business during the financial year; and a balanced and comprehensive analysis of the assets and liabilities and financial position of the company at the end of the financial year consistent with the size and complexity of the business.

The review must also, to the extent necessary for an understanding of the development, performance, financial position and assets and liabilities, include:

  • an analysis of financial key performance indicators; and
  • where appropriate, an analysis using non-financial key performance indicators, including information relating to environmental and employee matters.

‘Key performance indicators’ in this section means factors by reference to which the development, performance and financial position of the company can be measured effectively.

The business review should also include an indication of likely future developments in the business of the company and where appropriate, include additional explanations of amounts included in the financial statements.

Where a company is ‘small’ under the relevant definition in the Companies Act, it is not required to provide in the directors’ report for the period concerned an analysis of key performance indicators during that period.