icmap reporting reduced lhr speech nov102012 (3) filecorporate reporting presentation delivered...

CORPORATE REPORTING

PRESENTATION DELIVEREDPRESENTATION DELIVERED

LOCATION DATE TOPIC Lahore 28‐08‐2012 Corporate Governance 2012 – A means of

C t G d TCorporate Governance and Transparency

Islamabad 30‐08‐2012 Corporate Governance 2012 – A means of Corporate Governance and Transparency

Karachi 08‐10‐ 2012 Best Corporate Awards 2011‐12p

Faisalabad 07‐11‐2012 Corporate Governance 2012 – a means of Corporate Governance and Transparency

Lahore 10‐11‐2012 SAFA Summit on Emerging Trends in Professional Accountancy

11/16/2012 1Presentation by Abdul Rahim Suriya

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Professional Accountancy

Objectives of my presentation

Need of transparency for

decision making

Overview stakeholders’ Overview stakeholders

expectations for reporting

Achieve excellence in

corporate reporting incorporate reporting in

Pakistan by applying

best practices around the world211/16/2012 2Presentation by Abdul Rahim Suriya

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Take awaysTake aways

By the end of this session you should be able to:By the end of this session , you should be able to:

Appreciate the importance of annual reports

as tool for business decision making:

as tool for business decision making

Guide management in developing the annual

reports with changing expectations of

stakeholdersstakeholders.


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Task of the Professionals

In a world of instant communication

and ever changing business models,

the traditional task of the professional

accountants in business is evolving. g

There is :

• increased governance requirementsincreased governance requirements

• more regulations

• more emphasis on documentationmore emphasis on documentation

• more intervention from governments

• limited opportunity for expanding business• limited opportunity for expanding business


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have increased the focus on bothhave increased the focus on both

the role of the Board and

its effectiveness in executing its responsibilities11/16/2012 5

Presentation by Abdul Rahim Suriya www.arsuriya.com

Boards are under intense scrutiny ‐ from shareholders,regulatorsregulators, politicians, the mediathe media,company employees, other stakeholders.

Directors are in the line of fire when things go wrong.


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Given these challenges directors should focus on

Discharging their responsibilities thoughtfully andDischarging their responsibilities thoughtfully and

thoroughly.

There is Gap between What shareholders and regulators What shareholders and regulators

expect Boards to do ?

What Boards can realistically deliver ?

The internal and external reporting on Corporate

Governance also imposes challengesGovernance also imposes challenges.11/16/2012 7


Corporate Governance is aboutpromotingpromoting

Corporate fairness

Transparency

Accountability Accountability


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Corporate Governance in Pakistan

• The corporate sector in Pakistan has had its

Corporate Governance in Pakistan

The corporate sector in Pakistan has had its fair share of Corporate failures, scams and scandalsscandals

• Nationalized banks have written off billions of rupees

• Victim being the general publicVictim being the general public

• Leads to a hue and cry over regulating the icompanies


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Corporate Governance in Pakistan ‐

• I947 ‐‐‐Indian Companies Consolidation Act, 1913Historyp ,

• Companies Ordinance 1984

• Various specific laws to regulate specialized• Various specific laws to regulate specialized corporate entities are in place like :

(Modarba Companies and Modarba (Floatation and Control) Ordinance, 1980,

State Bank of Pakistan Act 1956,

the Insurance Ordinance, 2000,


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Code of Corporate Governance

• Code of Corporate Governance on ICAP ‘s

and ICAP’s role Code of Corporate Governance on ICAP s initiative in the conference in December 1998.

• Recommendations were sent to SECP after b i d b f ICAP d hbeing exposed to members of ICAP and the general public in 2001 .

• SECP made it a part of the respective listing p p gregulations of the three stock exchanges.


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Why need arose for Corporate Governance

Scandals Unveiled


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• In the 20th century aftermath of theWall Street Crash of 1929 legal scholarsStreet Crash of 1929 legal scholars continues to have a profound influence on the conception of corporate governance in scholarly debates.

• In 1990 corporate governance in the U.S. received considerable press attention wavereceived considerable press attention wave of CEO dismissals f IBM K d k H ll) b th i b dof IBM, Kodak,Honeywell) by their boards


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• In 1997 East Asian Financial Crisis in Thailand Indonesia South Korea MalysiaThailand , Indonesia ,South Korea ,Malysia

and The Philippines severely affected by the exit of foreign capital after property assets collapsed.assets collapsed.

• In the early 2000s, massive bankruptcies (and criminal malfeasance) of Enron Worldcom andcriminal malfeasance) of Enron ,Worldcom and satyam led to increased shareholders and governmental interest in corporate governancegovernmental interest in corporate governance


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Governance Reporting

Good corporate governance is essential to

p g

create trust

engagement

between companies and their investors,

Whatever Governance is in practice requiresqualitative reporting.q p g


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Corporate Reporting –a means for Corporate Governance and

Th ntin d t communicatedTransparency

The accounting data are communicatedthrough Financial Statements

and

Corporate Governance is Communicatedpthrough Annual Report.


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Why Corporate Reporting

In Deen e Islam, our life is all about deeds andIn Deen e Islam, our life is all about deeds and performance and about life time rewards and punishments ( JAZA and SAZZA ) that wepunishments ( JAZA and SAZZA ) that we actually see but the ultimate is the final reward d i h h ill i hi hand punishment that will start within the grave

and reach its climax on the day of Resurrection.


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Why Corporate Reporting

So, similar to our individual lives are the life ofSo, similar to our individual lives are the life of corporations basically composed of the same people going through their individual strugglespeople going through their individual struggles.

M d i h f ll i il lModern corporation has to follow similar rules –its deeds in the form of performance will earn it kudos if they are according to the Shariah and Barakat will fall on them.


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The OECD Principals of Corporate Governance

The OECD Principals of Corporate Governance (2004) state

that

“The corporate governance framework shouldThe corporate governance framework should

ensure that timely and accurate disclosure

is made on all material matters regarding the

corporation, including the financial situation, performance, ownership and governance of the company”11/16/2012 19


Why Transparency ?

Transparency leadsto accountabilityto accountability

Transparent information on current and future corporate performance is the raw future corporate performance is the rawmaterial of effective decision‐making


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Transparency through IFRS

Financial disclosures increasingly getting

Transparency through IFRS

Financial disclosures increasingly getting improved through IFRSs to achieve the t d i d b th dtransparency desired by the readers.


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Do IFRSs helps management in d kdecision making ?

Operating management still prepares separatep g g p p pset of Management accounts for their decisionMaking despite so many disclosures required byMaking despite so many disclosures required byIFRS .


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Annual Report

Annual report tells how the company did financially d ti ll d ft l i th f itand operationally and often explains the scope of its

business mission and management philosophy .

High quality annual reports reflects high quality management.management.

Corporate Reporting refers to the presentation and p p g pdisclosure aspects –as distinct from accounting/measurementg/


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Financial Statements vsCorporate Report

Financial Annual Report

Corporate Report

Statements

Reflects historic results ‐operations

Reflects current and possible future results of the company’sand its financial

position

of the company s operations

Governed by legal and regulatory framework

Additional information

Governance Reporting framework p g


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Annual ReportAnnual Report

A good Annual Report helps externalA good Annual Report helps externalstakeholders like shareholders bankers,creditors, and investors to know about anorganization through other Informationorganization through other Informationin the Annual Report in orderto make their economic decisions .


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other informationother informationAs per IAS # 720 the Other Information meansp

“Financial and non financial information“Financial and non‐financial information (other than the financial statements and the auditor’s report thereon) which is includedauditor’s report thereon) which is included, either by law, regulation or custom, in a document (Annual Report)”document (Annual Report)”

•


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Other informationOther informationAs per IAS # 720 the Other Information includes :• a report by management or those charged with governance on operations,

• financial summaries or highlights,

• employment data,

• planned capital expenditures,

• financial ratios,

• names of officers and directors and

• selected quarterly data. q y


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Auditors’ Responsibility for other information

The auditor has no specific responsibility for determining whether or not other information is properly stated. The auditor reads the other information because the credibility of the audited financial statements may be undermined by material inconsistencies between the audited financial statements and other information.Under CCG the auditors carry out independent

f f l b28

review of Statement of Compliance by Directors11/16/2012

Presentation by Abdul Rahim Suriyawww.arsuriya.com

Investors’ view

Investors are becoming increasingly vocal

Investors view

Investors are becoming increasingly vocal about reporting that passes regulatory

t b t f il t id f ll t tmuster but fails to provide a fully transparent view of a company’s health and prospects.

The pressure is on for companies to report b d t f fi i lon a broad set of non‐financial measures

that can help investors to better judge the corporate performancecorporate performance. 11/16/2012 29


Investors’ view

Investors equate high quality annual reports with

Investors view

high quality management.Existing financial statements are not ofExisting financial statements are not, of themselves, sufficient to meet the needs of investors to assess the quality and sustainability of corporate performance. The current p preporting status quo is unsatisfactory. Investors know this and sodo the regulatorsknow this and so do the regulators.


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Donors’ view

A donor would like to see that his donation is

Donors view

not only used properly but it has also been utilized for specific purpose forwhich itwasutilized for specific purpose for which it was donated.I would like to quote here few highlights of the speech delivered by Mr. NadeemMustafa Khan FCA p yat a ceremony organized by ICAP and ICMAP for Best CorporateAwardonOctober8 2012Corporate Award on October 8, 2012


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Donors’ view

“d fi it l th t h ld t h t i f

Donors view

“definitely the report should touch on topics of interest for potential donors. After all the report is a statement of the company‐to thereport is a statement of the company‐to the reader particularly the users, the disclosures should have a feel for inspiring “Trust”.Whenshould have a feel for inspiring Trust . When trust comes, passions are excited and the extraordinary occurs.y


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Donors’ view

On trust, a famous story told in a book “F d t Mid i ht” b t th Q id“Freedom at Midnight” about the Quaid‐e ‐Azam speaking at the rally in pre‐partition Indiain English to an audience who barely understoodin English to an audience who barely understood any English. When a news reporter asked one of the persons at the rally the reason for hisof the persons at the rally the reason for his excitement although he could not understand anything the Quaid said, his response was y gspontaneous “whatever he says, he tells the truth


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Annual Report‐Annual Report

is it specifically required by law?


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Is Annual Report required by law

Th i No

Is Annual Report required by law

• The answer is No

• No specific law requires to publish Annual ReportAnnual Report

• Various statutes authorities and best• Various statutes , authorities and best practices that require the contents embodied in itembodied in it.


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Annual Report

International Standard on Auditing # 720 “An entity ordinarily issues on an annual basis a document which includes itsbasis a document which includes its audited financial statements together with th dit ’ t th Thithe auditor’s report thereon. This document is frequently referred to as the “Annual Report”.


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Where Code of Corporate Governance talks about Annual Reporttalks about Annual Report‐

It is interesting to note that CCG does not provide anyF k f C R iFrame work for Corporate Reporting .

However it specifically requires Annual report to contain:However it specifically requires Annual report to contain:

the names of the non executive, executive and independent director(s)

details of the aggregate remuneration separately of executive and non executive directorsexecutive and non executive directors

The names of members of the committees of the board All trades in the shares carried out by its directors, y

executives and their spouses and minor children11/16/2012 37


Best Corporate Report Award

• Initiated by SAFA in 1997

• In Pakistan this Award ceremony is initiated in2000 d i i b l f t l ti hi2000 and it is a symbol of strong relationshipbetween two professional accountancyInstitutes in Pakistan ICAP & ICMAPInstitutes in Pakistan ICAP & ICMAP

• History of this competition in SAFA countries:• History of this competition in SAFA countries:

IndiaIndia 19561956S iS i L kL k 19641964SriSri LankaLanka 19641964


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Pakistan’s Experience

For the last 12 years organizing the

Significant

y g gCompetition for Best Corporate Reports

Significant improvements is witnessed in presentation of annual reports in PakistanPakistan


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Objectives of BCR

To encourage and give recognition to g g gexcellence in corporate reporting

To promote corporate accountability

andand transparency


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Corporate Reporting –a means

of Corporate Governance and Transparencyof Corporate Governance and Transparency

what framework is followed ?What are the best practices ?


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Criteria for Best Corporate Reports

In Pakistan the ‘Criteria’ for BCR award comprises : mandatory requirement and mandatory requirement, and voluntary requirement to

encourages to adopt best practiceencourages to adopt best practice

C i i f 2013 iCriteria for 2013 is www.icap.org.pkwww.icmap.com.pk


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Requirements to develop a good annual report in Pakistanannual report in Pakistan

Mandatory /Compulsory/ i i l1‐ IFRS/IAS For Financial Statements

2 Companies Ordinance For Financial Statements and Directors’2‐Companies Ordinance For Financial Statements and Directors’ Report ,Notice of Meeting

3‐ Code of Corporate Governance

To follow code of corporate governance additional reports , statements and analysisp , y

Voluntary/y/Recommendatory4‐ ICAP and ICMAP best corporate report criteria

For voluntary disclosures and analysis as welgovernance practices and their reporting 11/16/2012 43

Presentation by Abdul Rahim Suriya

Basis voluntary disclosureBasis voluntary disclosure

IFRS Practice Statement Management Commentaryissued by IASB (It is a narrative report accompanying, but not partof, the financial statements, It is recommendatory but not mandatory. It is not IFRS),

International Auditing Standard 720 on Other information

Best practices around the worldBest practices around the world

the experience and intellect of the BCR CommitteepMembers

Stock market from investor point of viewOperational managers having knowledge of stakeholder needsOperational managers having knowledge of stakeholder needs


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No Reporting Framework in CCG 2012p g

Corporate Reporting is not properlyCorporate Reporting is not properly emphasized. SECP may consider ICAP and ICMAP criteria for Best Corporate Report forICMAP criteria for Best Corporate Report for making it as a part of CCG reporting

irequirement

ICAP and ICMAP are ahead in reforms :

BCR criteria had already incorporated few reporting requirements which were laterreporting requirements which were later made part of CCG by SECP 4511/16/2012


Information annexed to directors’ reportp

CGG requires many items as attachment of Directors’CGG equ es a y te s as attac e t o ecto sReport ,where necessary, for example Key operatingData for last six yearsData for last six yearsPractically its difficult to get approved so manydisclosures from BOD particularly when time isdisclosures from BOD particularly when time isshort, therefore, in my view ,these should be part of

l h d f lAnnual Report , so that CEO and CFO can finalizesuch additional disclosures instead of making all asa part of Directors Report

4611/16/2012Presentation by Abdul Rahim Suriya

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Certification by Directorsy

Directors to certify thaty FS show true position Proper books are

i i dMy comments

maintained Appropriate policies IFRS have been followed

My comments

• When 2/3 are non executive directors it is IFRS have been followed

Internal Control is sound and implemented

executive directors ,it is not possible n logical to expect from them to confirm all these No significant doubt for

going concernconfirm all these.

• CFO and CEO may be made responsible to pcertify


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Responsibility Statement‐Example of AdidasExample of Adidas

Responsibility Statement coversTo the best of our knowledge and in accordance with theapplicable reporting principles :

• Financial Statements give a true and fair viewFinancial Statements give a true and fair view

• Management Report includes a fair review ofh d l d f f hthe development and performances of thebusiness and the position of company

• a description of the principal opportunities and riskassociated with the expected development of thecompanycompany .

This is signed by CEO ,CFO and Operation Directors 11/16/2012 48


Highlights of ADDITIONAL DISCLOSUREShi h i d b l i P kiwhich are not required by law in Pakistan

The disclosures made in annual reports in Pakistan are at par and inreports in Pakistan are at par and in some areas better than disclosures made by companies of developed world.world.


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Highlights of Voluntary Disclosuresin BCR CRITERIA 2012in BCR CRITERIA 2012 Forward looking informationCompaniesworldwideareincreasinglybeingencouragedtoplaceanemphasisCompanies worldwide are increasingly being encouraged to place an emphasis on providing a more forward‐looking orientation in their reporting whether through regulatory requirements, guidance or evolving good practice.g g y q g gg p

• Forward‐looking information in narrative or quantitative form including projections orquantitative form including projections or forecasts

• Explanation as to how the performance of the• Explanation as to how the performance of the

entity meets/exceeds and why it was short of

forward‐looking disclosures made in the prior period.11/16/2012 50


Guide to forward‐looking information by PWCinformation by PWC

Don’t fear the future: Communicating with confidence – some concernsWill it require that you provide competitively sensitive

i f i b ?information about your company?And what about the reliability of such forward‐looking

information?information?Will your company face litigation if your reporting doesn't

pass muster?pMore important, will this mean making profit forecasts?The issue remains:H ll d ti ti l t th di ti fHow well does your reporting articulate the direction of

travel ?11/16/2012 51Presentation by Abdul Rahim Suriya

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Forward looking information

If we look at our capital market , it moves up and down based on future expectation . For example , let’s see P/E ratio of Engro Food , it is 30 whereas gaverage P/E of our Capital Market is 8. The reason of its highP/E is that investor give toomuchweight ageits high P/E is that investor give too much weight age to expected revenues . The disclosure of Risk Management is also a step in samedirectionofManagement is also a step in same direction of guessing futuristic scenario


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seven pillars for effective communication

Guide to forward‐looking information by PWC of 2007suggests that it can be provided without specific reference to profits. It suggest that by considering the

ill f ff i i iseven pillars for effective communication , companies will be providing investors with the forward looking orientation increasinglyforward‐looking orientation increasingly demanded.

l h l bl1. Explain the resources available to your company that help to attain your objectives and how they are managed.


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2. Describe the principal risks and uncertainties that may affect your company’s long‐term value or prospects.

3. Clarify the significant relationships with stakeholders that are likely to influence theperformanceof your companyare likely to influence the performance of your company and its value.

4 Providequantifieddata relating to trendsand factors4. Provide quantified data relating to trends and factors likely to affect your company’s future prospects.


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5. Spell out any uncertainties underpinning forward‐looking information.information.

6. Communicate targets relating to those key performance indicators (KPIs) used tomanageyourbusinessindicators (KPIs) used to manage your business.

7. Demonstrate the linkage of other content areas within o r reporting to o r longer termobjecti es and theyour reporting to your longer‐term objectives and the strategies to achieve those objectives.


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Highlights of ADDITIONAL DISCLOSURES IN THE BCR CRITERIA 2012

Stakeholders’ Information‐6 years data for • Cash flow statement• Cash flow statement• Vertical and Horizontal analysis ( this is not

found in annual reports of developed countries )found in annual reports of developed countries )

• Ratios CCG l i k ti dCCG only requires key operating and financial data. It doesn’t suggest any specific ratios Our criteria provide a listspecific ratios. Our criteria provide a list of ratios and their formula are also displayed on our websitesdisplayed on our websites


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Stakeholders’ Information• Comments on the results of the

analysis including ratios, cash flows y g ,and financial statements . (in some countries it is reported under the head of Business Performance)

• Statement of Value Added and how distributed with graphical presentationdistributed with graphical presentation

• Investors’ Related section on the t b itcorporate website


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2013DIRECTORS REPORT

Strategy to overcome liquidity problem and the company's plan toproblem and the company s plan to manage its repayment of debts and recover losses.recover losses.

Di l f k f i i Disclose of key sources of estimation uncertainty .


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2013DIRECTORS REPORT

Efforts made to mitigate the d i t f i d t i ladverse impact of industrial effluents by adapting techniques, creating awareness and providing training etc to the surroundingtraining etc to the surrounding communities


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Directors’ Report• Market share information preferably from an independent sourcean independent source

• Description of energy saving measures taken ‐‐‐‐how the company is planning to p y p govercome the escalating energy crisis


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Highlights of ADDITIONAL DISCLOSURES IN THE BCR CRITERIA 2012IN THE BCR CRITERIA 2012

Directors’ Report f b i i l di b i d l• Nature of business including business model

discussions

• Management's objectives and strategies ‐

addressing threats and opportunities of marketaddressing threats and opportunities of market

trends

• Significant changes in an entity’s objectives and strategies from the previous period or periodsstrategies from the previous period or periods


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Directors’ Report • The relationship between :

the entity’s results the entity s results ,

management’s objectives and

management’s strategies for achieving those objectives.j


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Description of the entity's most significant:• Resources, including an analysis of liquidity, cash flows financing arrangements humancash flows, financing arrangements, human capital;

l l d d• Capital structure including any inadequacies in the capital structure and plans to address such inadequacies;


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• Significant changes in financial position, g g p ,liquidity and performance compared with those of the previous period;those of the previous period;

• Risks, including strategic, commercial l d f l koperational and financial risks;

• Plans and strategies for mitigating these g g grisks and potential opportunities;


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Relation with StakeholdersRelation with Stakeholders

• The significant relationships that the entity has with stakeholders, how those relationships are likely to affect therelationships are likely to affect the performance and value of the entity, d h th l ti hiand how those relationship are

managed


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Comparison of the entity's financial and nonfinancial performance from:

the last year and

description of the future prospects, including whether the performance mayincluding whether the performance may be indicative of the future performance


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• Description of critical performance measures and indicators ‐‐‐‐against stated objectives of the entity and whether theobjectives of the entity and whether the indicators used currently will continue to be relevant in the futurerelevant in the future

• Human resource management policies including preparation of a succession plan


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A l i f h f h i• Analysis of the prospects of the entity including targets for financial and non‐financial measures and explanation as to why the results from performancewhy the results from performance measures have changed or how the indicators have changedindicators have changed


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2013DisclosuresDisclosures

Specific Disclosures ‐‐‐‐‐‐‐‐ 14 marks

• Cash flow statement based on Direct Method‐‐‐ 2 marks

Specific disclosures ‐‐‐‐‐‐‐‐ 12 marksSpecific disclosures 12 marks

• Disclosure of fair value of property, plant & equipment

• Summary of significant/ material assets or immovable

propertyp p y

• WDV reconciliation as per IAS 16

• Income Tax reconciliation as per IFRS11/16/2012 69


2013Stakeholders’ InformationStakeholders Information

Analysis of variation in results reportedAnalysis of variation in results reportedin quarterly accounts

Video presentation of CEO placed oncompany’s website detailing financialposition and performance of the companyand major products launched, projectsaccomplished, or planned to initiated in thenext year. And future prospects


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2013Stakeholders’ InformationStakeholders Information

P li d d f t k h ld ’ Policy and procedure for stakeholders’engagement

SWOT analysis

Share price sensitivity analysis

Policy for safety of records of the\company


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Highlights of ADDITIONAL DISCLOSURESIN THE BCR CRITERIA 2012IN THE BCR CRITERIA 2012

Report Presentation p

• Theme on the cover• Effectiveness of photographs and their• Effectiveness of photographs and their

relevanceEff i f h d hi f• Effectiveness of charts and graphic for Financial Statements

• Calendar of major events during the year


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Highlights of ADDITIONAL DISCLOSURESIN THE BCR CRITERIA 2012IN THE BCR CRITERIA 2012

Report Presentation p• Comprehensiveness of corporate

information e.g. website, email addressesg ,

• Complete and accessible annual report onComplete and accessible annual report on the website

• Definition and glossary of terms


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Highlights of ADDITIONAL DISCLOSURESIN THE BCR CRITERIA 2012

Corporate Governance • Timely authorization by BOD within 30 days

• Organization ChartOrganization Chart

• The Board structure and its committees

Ch i f h B d h h h CEO• Chairman of the Board other than the CEO

• Name of non‐executive directors, indicating their independence, with at least one independent non‐executive director having relevant industry experience


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• Profile of Directors and their engagement in other companies/ entities as CEO, Director, CFO or Trustee

• Salient features of the Audit Committee's and other Board Committees’ TOR and attendance in meetings heldCommittees TOR and attendance in meetings held

• All members of Audit and HR Committees to be non‐executive Directors ( in CCG requires majority non executive Directors , including preferably an independent director)

• Criteria to evaluate Board’s performance

CEO f i• CEO performance review

• Formal orientation at induction and regular continuous professional development Programs of BODprofessional development Programs of BOD


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2013Corporate GovernanceCorporate Governance

CONFLICT OF INTERESTCONFLICT OF INTERESTDisclosure of Policy for actual andperceived conflicts of interest relating tomembers of the Board of directors and adisclosure that how such a conflict ismanaged and monitoredmanaged and monitored


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2013Corporate GovernanceCorporate Governance

Disclosure of IT Governance Policy Disclosure of IT Governance Policy Report of the Audit Committee Di l i Disclosing Whistle blowing policy

and procedures Risk and Opportunity Report


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We have considered every potential risk except the risk of avoiding all risksthe risk of avoiding all risks


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WAY FORWARD

Still a long way to go!


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Report LeadershipReport Leadership

Report Leadership is a multi‐stakeholder group that aims to challenge established thinking on corporate reporting.

The contributors to this initiative are the CIMA, PWC and Radley Yeldar.

.


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Telling the Governance Story

How can we bring the governance story to life ?

Ideas for improving the i i f k

.

communication of key aspects of governanceg


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Telling the Governance Story

1. Tone from the top

2. How the board works as a team

3. The key Actions of the board and its committees

4. Board effectiveness

. 5. Communication and engagement withstakeholders


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Best practice for CorporatebReporting by PWC

Few extracts from the Annual ReportFew extracts from the Annual Report

of FTSE 350 companies


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Best practice for CorporateReporting by PWC

Subject Company Name

What is our approach to Governance Marks and SpencerWhat is our approach to Governance

Chairman and CEO , Chairman’s i d d

First Group plc, Prudential plc

independence

How does the Board demonstrate independence

Marks and Spencer

.

independence

Justification of independence Tesco plc , MITIE Group plc

Information and professional development

Kingfisher plc,Roll Royce11/16/2012 84


Best practice for CorporateReporting by PWCReporting by PWC

Subject Company Name

Access to independent advice National GridAccess to independent advice

Directors Performance Evaluation British American Tobaccob h lDebenhams plc

Going Concern Old Mutual Plc

.

Internal Control British Airways plc

Whistleblowing Wolseley plcWhistleblowing

Dialogue with Institutional Shareholders

Wolseley plc

British Airways plc11/16/2012 85Presentation by Abdul Rahim Suriya

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Sustainability Reporting

CCG requires BOD to consider Report on CSR It is bringing a new era in the eve of corporate reporting in Pakistan. This initiative

h ld fencourages the corporate world to focus beyond single bottom line financial performance to triple bottom lineperformance to triple bottom line:

–economiceconomic, –environmental and social performance–social performance


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BEST SUSTAINABILITY REPORT AWARD

A separate award from 2010 is announced by BCR committee. The Criteria of this award is based on Reporting Initiative (GRI), an international standard on Sustainability Reporting which has also been recommended by the International Federation of Accountants (IFAC)


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Legal requirement for Sustainability Reporting

In India Sustainability Reporting has been made mandatory for all listed companies for year ending Dec31,2012.

In Pakistan SECP has also issued draftIn Pakistan SECP has also issued draft guideline and sought comments on S t i bilit R ti It i t d th tSustainability Reporting . It is expected that a round table would shortly be organized by SECP to take views of variety of stakeholders


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Criticism – why not use of web

The annual report is the major means of disclosure although as time movesof disclosure although as time moves on, users are more likely to use the web and the website and the websiteweb and the website and the website will become the greater focus in the f tfuture.


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Recommendation to SECP

In order to further strengthen transparency and accountabilitytransparency and accountability,

SECP to consider corporate reporting p p gcriteria of ICAP and ICMAP as a part f C d f C t Gof Code of Corporate Governance .


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Conclusion

ICAP and ICMAP have indeed taken a major k h dstep in Pakistan in the corporate reporting and

our Capital Market need to appreciate and we should understand that it is an opportunity toshould understand that it is an opportunity to inspire potential investors, lenders and donorsdonors. Ultimately use the corporate report as

f d ill d b ildia weapon of good will and building trust‐that will advance Pakistan Brand INSHALLAH.


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The views expressed in this presentation p pare those of the presenter.

Questions or comments?


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