The information required within the directors’ report depends on the size and nature of the company or group. Different disclosures are required for each category of company.

For most companies, a directors’ report must include: 

• the names of the persons who, at any time during the financial year, were directors of the company; 
• qualifying third party indemnity provisions in force for the benefit of one or more directors of the company;
• the amount (if any) that the directors recommend should be paid by way of dividend; and 
• a statement in respect of disclosures provided to the auditors.

Any company that is not a wholly owned subsidiary of a UK company must also disclose information on political donations and expenditure including contributions to non-UK political parties.

If the company has taken advantage of the small companies exemption in preparing the directors’ report, it does not have to contain the statement as to the amount that the directors recommend be paid by way of dividend. If taking up the small companies exemption, the directors’ report must contain a statement above the director’s or secretary’s signature and printed name to that effect.

Read further information on the reporting simplifications available to companies that are entitled to the small companies regime.

The additional information required in the directors’ report will depend on a number of different factors, including whether a company is small, medium-sized, large or quoted.  

Companies must apply the requirements relevant to them in either:

• SI 2008/409 The Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008; or 
• SI 2008/410 The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.

Depending on which category a company falls into, directors may be required to disclose: 

• overseas branches;
• share capital and securities;
• acquisition of own shares;
• employment of disabled persons;
• employee engagement statement;
• statement of engagement with suppliers, customers and others;
• corporate governance arrangements; and
• GHG emissions, energy consumption and energy efficiency. 

The faculty’s Strategic Report and Directors’ Report factsheet (Financial Reporting Faculty members only) covers in detail the various categories of company and the disclosures required for companies that fall within them. The requirements are complex and companies may find that they fall into multiple categories.

The directors’ report must be approved by the board of directors and signed on behalf of the board by a director or secretary of the company.

A small company has the option not to file a copy of the directors’ report with the Registrar of Companies. If this option is taken, the balance sheet must contain a statement that the accounts have been delivered in accordance with the provisions applicable to the small companies regime.

• Read the Financial Reporting Faculty’s Strategic Report and Directors’ Report factsheet (Faculty members only).
• View guidance on The strategic report and how to prepare one.
• View this Financial Reporting Faculty webinar: Streamlined Energy and Carbon Reporting (Faculty members only).