A strategic report is a narrative report in a company's annual accounts that reviews its business, principal risks and performance. Medium-sized and large companies must prepare one; small companies are exempt.
What it contains
The strategic report gives a fair review of the company’s business and a description of the principal risks and uncertainties it faces. It includes a balanced analysis of its development and performance during the year and its position at the year end, using financial key performance indicators. Larger companies must also cover areas such as environmental and employee matters.
Who needs one
Companies that do not qualify as small. A medium-sized company (up to £54 million turnover, £27 million balance sheet total and 250 employees, meeting two of the three, for financial years beginning on or after 6 April 2025; £36 million, £18 million and 250 employees for years beginning before that date) must prepare one, though it can leave out non-financial KPIs. It is approved by the board, signed by a director or the company secretary, and filed with the accounts.
Small companies and micro-entities do not need a strategic report. A small company’s accounts include a directors’ report for the members, which does not have to be filed at Companies House. A micro-entity does not have to prepare a directors’ report at all.