Guide to forward looking information: Don't fear the future - communicating with confidence

January 2006

Following the Chancellors announcement on November 28, the requirement that all UK quoted companies must publish an Operating and Financial Review (OFR) is in the process of being repealed and replaced with the requirement to publish a Business Review.

Until the Government provides greater clarity, we believe that the concept of an OFR has not disappeared. The degree to which the content of the Business Review is consistent with the OFR, either explicitly or implicitly is a matter of much debate. However, it is clear that many of the fundamental requirements of the OFR, such as business objectives and strategy, risks and uncertainties and key performance indicators, will remain. This view is supported by the Government's statement that "the central requirements of the business review are largely the same as those of the statutory OFR".

Our best advice to companies is therefore to continue with the processes they have already put in place. This stance is consistent with the Financial Reporting Council's who recently announced that, in their view, the existing ASB Reporting Standard will remain as voluntary good practice guidance.

We remain committed to helping our clients get the most out of their corporate reporting and it is for this reason that we have published our Guide to forward-looking information. Whilst many believe this aspect of the OFR has disappeared following the announcement, the DTI, in their invitation for comments on the Business Review published on 15 December, made it clear that the:

"Government is committed to improving strategic, forward-looking narrative reporting by companies, and to enhanced dialogue with shareholders based on such reporting."

This publication aims to provide practical guidance on how companies can use financial and non-financial information to provide the view of the future that we know investors need.

The guide draws on PricewaterhouseCoopers' expertise, gained through several years of investor and director-based research and initiatives such as ValueReporting ^TM and the Building Public Trust Awards. However, this is not just a theoretical paper - progressive companies, both in the UK and elsewhere, are are already adopting a forward-looking orientation in their corporate reporting. To bring our view on reporting alive, we have included a collection of good practice examples from some of these companies that demonstrate aspects of what we believe is effective communication of the future and that others can earn from.

Please register at our dedicated OFR site to download a free copy of this guide and to find out more information.