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Council on Corporate Disclosure and Governance Media Release - Public Consultation on the Operating and Financial Review (OFR)

04 Aug 2003

1. The Council on Corporate Disclosure and Governance ("CCDG") is seeking public feedback on a proposed Guide for the operating and financial review ("OFR") for listed companies. The Guide is intended to provide best practice guidance to listed companies in the preparation of the OFR in their annual reports.


2. Under Rules 1207(4)(a) and (b) of the Listing Manual of the Singapore Exchange ("SGX"), listed companies are required, in essence, to provide an OFR in their annual reports, as follows:-

a) A review, in as much detail as possible, of the operating and financial performance of the issuer and its principal subsidiaries in the last financial year. Any developments which would materially affect the issuer's operating and financial performance must be identified.

b) An analysis of the business outlook.

Issues for consultation

3. The aim of the OFR is to provide users with a good understanding of the company by providing a historical and prospective analysis of the company's businesses as seen through the eyes of the directors and management. It should include discussion and interpretation of the performance and financial condition of the company, in the context of opportunities and risks impacting the operations of the company and known or reasonably expected changes in the environment in which it operates.

Guidance on the Framework and Contents of the OFR

4. To enhance disclosure practices of listed companies, the CCDG proposes that a Guide be issued to provide guidance on the framework and contents of the OFR that listed companies include in their annual reports. Compliance with the Guide will not be mandatory. Listed companies are encouraged to apply these best practices for disclosure of information in their OFRs. The proposed approach is consistent with the practices currently adopted in Australia and the UK.

Presentation of the OFR

5 The CCDG also proposes that listed companies be required to present their OFR in a distinct section of the annual report. If discussions or analyses relevant to the OFR are presented in another part of the annual report, such as the Chairman's report or Directors' report, the company may include a reference in the OFR section to that information. Nonetheless, the OFR should be the principal channel for conveying the relevant information to shareholders.

6. The public consultation paper and the proposed Guide for the OFR are posted on the CCDG website at Interested parties are invited to provide their comments and feedback via email to or via fax to (65) 6337-4134.

Appendix 1: Public consultation paper on the Operating and Financial Review

Appendix 2: Proposed Guide for the OFR