4.2.2 New annual reports standards

Discussion of the Modernisation Directive is limited to the changes that relate to the content of the annual report. Articles 1.14 and 2.10 provide the new minimum standards. The former applies to the single company report. the latter to the annual report that forms part of consolidated accounts. The text of these articles is virtually identical. Whenever article 1.14 is referred to this should also be read as a reference to article 2.10.

Article 1.14 prescribes that the annual report should provide a fair review of the development and performance of the company's business and of its position, together with a description of the principal risks and uncertainties it faces. To achieve this, an analysis should be made of the development and performance of the company, including both financial and, where appropriate, non-financial key performance indicators relevant to the particular business. The non-financial key performance indicators referred to are, amongst others, environmental and employee matters These indicators should be included in the analysis to the extent necessary for an understanding of the company's development, performance or position. Moreover, the analysis should be balanced and comprehensive and consistent with the size and complexity of the company's business. In providing this analysis, the annual report shall, where appropriate, include references to and additional explanations of amounts reported in the annual accounts.