Companies Act 2014 section 327

Directors' report: business review

Section 327 sets out the requirements for including a business review in the directors' report, covering the scope of the review, the use of key performance indicators, and exemptions available to smaller companies.

• The directors' report must contain a fair review of the business and describe the principal risks and uncertainties facing the company, though companies qualifying for the small or micro companies regime are exempt from this requirement.
• The business review must provide a balanced and comprehensive analysis of the company's development, performance, assets, liabilities, and financial position, proportionate to the size and complexity of the business.
• The review must include an analysis of financial key performance indicators and, where appropriate, non-financial key performance indicators such as environmental and employee matters — although small and micro companies that voluntarily provide the business review may opt out of the non-financial KPI requirement.
• The review must indicate likely future developments in the business, and for group directors' reports the requirements apply to the parent company and its consolidated subsidiary undertakings taken together.