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Send  Share  RSS  Twitter  22 Aug 2016

FINANCE: Excellence in Integrating Reporting Sees Improvements Over the Past Five Years


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EY today announced Kumba Iron Ore Ltd, as the overall winner in its fifth annual Excellence in Integrated Reporting Awards for 2016.
The scope of the awards included the top 100 JSE listed companies based on market capitalisation at 31 December 2015, and top state-owned entities, which were adjudicated by the College of Accounting at the University of Cape Town.
The top ten companies are:

1. Kumba Iron Ore Ltd
2. Oceana Group Ltd
3. Liberty Holdings Ltd
4. Sasol Ltd
5. Redefine Properties Ltd
6. Truworths International Ltd
7. Vodacom Group Ltd
8. Nedbank Group Ltd
9. Anglo American plc
10. Barclays Africa Group Ltd

The state-owned entities were adjudicated on the same basis as the JSE listed entities, however due to the requirements of the Public Finance Management Act (PFMA) they were ranked separately. Of the state-owned entities, the two, which are ranked for their excellent reports are: The Development Bank of Southern Africa and Transnet SOC Ltd.

Larissa Clark, Director Professional Practice Group of Accounting at EY says, “The purpose of the survey is aimed at encouraging excellence in the quality of integrated reporting to investors and other stakeholders by South Africa’s top companies and state-owned entities. In South Africa, we have seen an evolution in integrated reporting over the past five years. From the first integrated reports in 2011, where many companies simply combined their annual financial statements with their sustainability reports, to high quality innovative integrated reports, some are now approaching an ideal report.

This year, we’ve seen many companies raise the bar in their integrated reporting by applying the guiding principles of integrated reporting as set out in the Framework. The top ten companies in this year’s survey are leading in the area of integrated reporting.

We congratulate Kumba Iron Ore Ltd on this outstanding achievement, all companies and state-owned entities for striving to improve the way in which they tell their value creation story.”

Associate Professor Mark Graham of the College of Accounting at the University of Cape Town commenting on the assessment of the survey says, “There is no doubt that the integrated reports of those companies that take integrated reporting seriously are continually improving, whilst the integrated reports of those companies that do not, are showing very little improvement. The gap between those reports that we have ranked as “Excellent” and those that we rank in the “Average” and “Progress to be made” categories is clearly widening each year.

The better integrated reports are forward looking, they provide a clear strategic focus and emphasise the way in which the business creates value. They also demonstrate a high level of connectivity between the various elements of the report. To put it simply, preparers of these reports apply the guiding principles of integrated reporting and cover the content elements of integrated reporting as set out in the Framework.”

The 2016 trends include:

1. Significant improvement in quality of integrated reports over last five years
2. Improved connectedness of information
3. Evidence of innovation in layout and structure
4. Improved articulation of business models
5. Greater use of websites for detailed and compliance information
6. Focus on how governance structures promote value creation
7. Better use of infographics, navigation tools and cross reference
8. Use of ‘pop-up’ narratives to explain key numbers
9. More companies referring to the ‘capitals’
10. Trend towards conciseness

Clark concludes, “There is still a great scope for improvement in the integrated reporting journey, especially as King IV™ is set to emerge later this year. The question will now focus on how boards move to connect integrated thinking and reporting to implement the new code.”

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