AIM ducks business review responsibility

Only 54% of AIM companies produced a business review, compared with all of
their main market peers.

The Business Review and AIM report focused on how four key areas of
information were reported: the business environment, company strategy, key
performance indicators and identification of principal risks and uncertainties.
While only two areas – KPIs and principal risks and uncertainties – are explicit
requirements of the business review, PwC believed that a description of the
business environment and strategy to compete within that environment were key if
KPIs and risk were to be put into a meaningful context.

David Snell, PwC’s AIM market leader, said: ‘AIM companies should regard the
business review not just as more regulation but as an opportunity to tell their
story, give the market an understanding of what they are trying to achieve and
differentiate themselves from their competitors.’

The business review legislation was rolled out to allow AIM-quoted corporates
to communicate clearly in a highly competitive market for capital, but a
significant number have failed to fully take advantage of it.

The study also looked at the quality of narrative reporting in their annual
reports before and after the business review came into effect and highlighted
areas where AIM companies could improve their review.

Snell added: ‘Good narrative reporting in the accounts as covered by the
business review is an effective method to get the company’s key messages across
clearly and in a way that is easily understood. If done well, this can help
attract investors and increase investor confidence.


Baker Tilly joins fight over US online gaming ban

Baker Tilly has emerged at the forefront of efforts to overturn controversial
US legislation outlawing online gambling. Online gaming was banned by Washington
last October, but the US has taken the first step towards scrapping the sanction
with the introduction of a bill that will allow licensed operators to do

Congressman Barney Frank, the Democrat chairman of the House Committee on
Financial Services, introduced the bill, but the proposed legislation was
written with the help of UK internet payment service provider UC Group and Baker
Tilly. Frank has criticised the ban, and launched the bill in a bid to establish
a regulatory framework allowing licensed operators to accept bets.

Republican attempt to limit Sarbox fails

The US Senate has foiled an attempt by the Republicans to weaken
Sarbanes-Oxley by removing the requirement for certain companies to comply with
internal controls requirements. The body set aside an amendment to make
compliance with section 404 optional for companies valued at less than $400m
(£200.6m). The amendment was put forward by Republican Jim DeMint, who tried to
attach it to a bill on the Senate floor on boosting investment in research, and
improving science, engineering and maths education. Federal regulators are
working on reforming section 404, which has been criticised as being onerous.

Sage chairman resigns

The chairman of FTSE 100 software group Sage, Julian Horn-Smith, resigned
suddenly last week, citing differences in leadership style with the Sage board.
He had only been in the position for eight months. In a statement to the stock
exchange, Sage said that Horn-Smith had resigned with immediate effect, and
would be replaced by non-executive director Tony Hobson, until a new chairman is

Despite the announcement Sage’s share price was virtually unchanged at around
263p last week. In a statement Horn-Smith said: ‘After careful consideration the
board agreed that the differences in styles and culture meant that change was
necessary. I felt that the best solution was for me to stand down as chairman.’

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