Top 10 companies awarded for embracing the journey towards integrated reporting
Ernst & Young today announced the release of the inaugural Ernst & Young Excellence in Integrated Reporting Awards. The scope of the awards included the Top 100 JSE listed companies and the Top 10 state-owned entities in South Africa. The evaluation covered the financial year ends including up to 31 December 2011 and were undertaken by an independent team of researchers from the College of Accounting at the University of Cape Town.
The Top 10 companies recognised by the Awards, in alphabetical order, are:
- ABSA GROUP LTD
- AFRICAN RAINBOW MINERALS LTD
- EXXARO RESOURCES LTD
- GOLD FIELDS LTD
- LIBERTY HOLDINGS LTD
- NEDBANK GROUP LTD
- SASOL LTD
- STANDARD BANK GROUP LTD
- TRUWORTHS INTERNATIONAL LTD
- VODACOM GROUP LTD
The state-owned enterprises were adjudicated differently due to the requirements of the Public Finance Management Act (PFMA) and ranked separately. The top two state-owned enterprises identified by the Awards are Transnet and Eskom.
Garth Coppin, National Director of Accounting at Ernst & Young, says, “The aim of the Awards is to celebrate and recognise companies that embrace an integrated reporting approach which is able to connect material financial and sustainability information. Many companies have made a great effort to comply with the new integrated reporting expectations, providing a clear message of the value adding potential to the company. However, due to a lack of guidance on this new type of report, it has resulted in more experimentation which may, in the long term, result in better integrated reports.”
Coppin further adds, “The top companies recognised in this year’s survey are shown to be leading in this area. We were pleasantly surprised at the standard of their integrated reports and acknowledge the amount of expertise, effort and work that has gone into their preparation. In addition, we applaud the state-owned entities for setting the benchmark along with the best performing companies.”
Prof Alex Watson of the College of Accounting at the University of Cape Town commenting on the assessment of the survey says, “Overall companies did a good job of making their reports accessible with improved standards of indexing, cross referencing and the use of presentation tools such as graphics, colours and page layouts just to name a few elements.”
“In many instances it was not made clear if the board of directors had endorsed the integrated report, which is an important comment to note because if an integrated report is to achieve its status of being the primary report, it is important that the directors make it clear that they endorse the contents of the entire report.”
Coppin, says, “Ideally an integrated report needs to be holistic, touching on issues that pose risks to their company and how those risks are mitigated. It also needs to speak to the performance indicators that are used to appraise how successful the company was in achieving its strategy in the past and how it will do so in the future.”
He continues by saying, “There is still a great scope for improvement in reporting, especially in respect to future looking information. In addition the majority of companies presented statutory reports as ‘add-ons’ and accordingly could improve the link between these reports and other aspects of financial reporting.”
Watson concludes “The point is often made that integrated reporting is a journey. No single company has reached its destination, but many companies are well on their way on that journey.”
Notes to the Editor
Each of the integrated reports of the companies has been separately marked by each of the three adjudicators from the College of Accounting at the University of Cape Town. The pre-agreed mark plan has been developed by the adjudicators in conjunction with Ernst Young’s Professional Practice Department.
A further evaluation then resulted in the ten best integrated reports being identified from amongst those identified as excellent. This year no attempt has been made to rank the top ten as it is felt there are too many uncertainties in integrated reporting to make marginal judgments on quality.
Guidance on what should be included in the integrated report has been sought by reviewing both the Discussion Paper issued by the Integrated Reporting Committee of South Africa in January 2011 and the Discussion Paper issued by the International Integrated Reporting Committee (IIRC) in September 2011. Cognisance has also been taken of the Summary of Responses to the September 2011 Discussion Paper that was issued by the IIRC in May 2012.
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