DTI Invitation for Comments on the Business Review

The Chancellor announced on 28 November that the Government had decided no longer to require quoted companies to prepare a statutory Operating and Financial Review (OFR), in addition to the Business Review.

In the Pre-Budget Report, the Chancellor made clear that the position had been reviewed in response to concerns over the proportionality of the burden imposed by the statutory requirement for an OFR, over and above the minimum requirements of the EU Accounts Modernisation Directive.

Alun Michael has now made regulations to implement this announcement. The regulations repeal the requirement on quoted companies to prepare an Operating and Financial Review for financial years starting on or after 1st April 2005. Quoted companies, however, have to include a Business Review as part of the Directors’ Report, in compliance with the minimum requirements of the EU Modernisation Directive.

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Views are now invited on:

• whether any particular requirements of the Business Review need to be clarified to achieve more effectively the Government’s objectives regarding the Business Review;

• any other considerations which Ministers should consider in deciding how to frame suitable amendments for the Company Law Reform Bill on these matters.

In view of the Parliamentary timetable for the Bill, and in the light of the extensive consultation there has already been on these issues, views are invited by 15 February.