Medium-sized companies still see role for OFR

Almost a third of medium-sized companies are planning to produce an operating
and financial review, despite the government’s decision to scrap requirements to
produce one.

A report by KPMG has
revealed that of 200 UK companies surveyed, 31% plan to produce an operating and
financial review.

The obligation to produce an
OFR has been
replaced with the requirement for all companies to compile a business review for
periods beginning on or after 1 April 2005, in line with EU legislation.

Half the survey respondents, whose turnover ranged from £5m to £500m, planned
to disclose the trends and factors likely to affect future performance, although
they are not obliged to do so.

The decision on the OFR, intended as a headline-grabbing piece of
deregulation, has been met with dismay by many.

KPMG corporate governance director Tim Copnell said, ‘There has been an
assumption that the vast majority of companies will confine themselves to doing
no more than they strictly have to.

‘A significant number of middle-market companies are aware there is a real
role for narrative reporting to better explain and contextualise their
performance.’