Many listed companies have already started including new strategic report measures in this year's annual reports, well ahead of their mandatory implementation, according to research by Deloitte.
From 30 September 2013 the 'business review' format was replaced by the Strategic Report, which is designed to allow the company to tell its story, starting with the strategy and business model, and the principle risks and challenges the company has faced. Companies are also required to provide more information in areas such as human right, diversity and green house gas emissions.
Deloitte's survey,A new beginning examined the annual reports of 100 listed UK companies published between 1 September 2012 to 31 August 2013.
The research found nearly half (42%) are already disclosing some limited numbers on greenhouse gas emissions, while 21% are providing employee gender diversity figures. Deloitte says risk and uncertainty reporting is maturing, with 83% clearly disclosing principal risks and 91% discussing mitigating activities. Just 5% of reports were judged to have only provided a 'boilerplate' list of principal risks and uncertainties.
Veronica Poole, Deloitte's UK national head of accounting, said: 'It is encouraging to see many companies making real efforts to tell their story and bring the numbers in their financial statements to life. In going above and beyond the requirements and implementing changes ahead of schedule, companies see the annual report as much more than just a compliance exercise.'
However, Deloitte says companies fared less well in their attempts to make their reports truly integrated for stakeholders and shareholders. Only 28% linked all parts of the annual report, although this was an increase of 14% from last year's survey.
Compared to the narrative reporting arena, Deloitte's survey found there was no appetite for early adoption of new accounting standards or amendments. The numbers themselves revealed that impairments are still a big issue, with 80% of companies reporting such losses.
Poole said: 'There are many changes facing reporters this year, including the new strategic report, increased reporting by audit committees and significantly changed directors' remuneration reports; some of these are complex and companies will need to be alert to stay one step ahead. But as the results of the survey suggest, for the best reporters that already communicate effectively with stakeholders embracing the changes will be more of an evolution than a revolution.'
