May-2015

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COVER PRESIDENT’S STORY COMMUNIQUE formation relating to social and environmental most financial reports still do not address the information needs of all company’s stakeholders. In order to assess fulfillment of the environmental, social and governance responsibilities of listed entities SEBI mandate listed entities to submit Business Responsibility Reports, as a part of their Annual Reports, describing measures taken by them along the key principles enunciated in the 'National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business’ framed by the Ministry of Corporate Affairs (MCA). To start with, this requirement is applicable to top 100 companies in terms of market capitalization and would be extended to other companies in a phased manner. Integrated reporting is the integration of a company’s financial report and its corporate social responsibility or sustainability report into a single document. An integrated report provides readers with a complete picture of how an organization is performing by including non-financial information on environmental, social and governance performance along with financial information. Integrated Reporting is based on integrated thinking involving consideration of various types of capital, their interaction and impact on short, medium and long term prospects of the company and linkage with strategy, performance and governance. Integrated reporting framework is expected to : 1. Support the information needs of longterm investors, by showing the broader and longer-term consequences of decision making; 2. Reflect the interconnections between environmental, social, governance, and financial factors in decisions that affect long term performance and condition, making clear the link between sustainability and economic value 3. Provide the necessary framework for environmental and social factors to be taken into account systematically in reporting and decision-making 4. Rebalance performance metrics away from an undue emphasis on short-term financial performance; and 5. Bring reporting closer to the information required by management to run the business on a day to day basis. Apprehensions impeding Integrated Reporting Even though the benefits of Integrated Reporting are largely understood, the development and acceptability of the concept is yet tardy. Unless the companies reach a level where they feel that apprehensions are not insurmountable they will not be able to walk the talk. Following apprehensions if addressed appropriately shall pave the way for faster assimilation of Integrated Reporting • How to identify what to include in the Integrated Report • How to ensure credibility of information contained in the Integrated Report • Who will own the process of development of the Integrated Report • Professional assistance not available for compiling Integrated Report • How to quantify non financial aspects of the business • How to ensure that Integrated Report does not become a sales document • How to ensure that both positives and negatives of the business are fairly reported • How to ensure that Integrated Reporting provides a true and fair view of the business Integrated Reporting – getting started In spite of genuine apprehensions and concerns about Integrated Reporting , companies must realize that the benefits far outweigh the efforts and the stumbling blocks. Following is a suggestive approach for implementation of Integrated Reporting • Top management must constitute an Integrated Reporting committee with cross functional representation • Clearly communicate that the committee shall own the process of compiling Integrated Report • Lay down materiality thresholds for reporting information on Economic, Social and Environmental aspects • Involve professional content writer for clarity and conciseness in Integrated Report • Involve a credible agency for assurance of Integrated Report • Adopt a fair approach towards positive and negative aspects of in Integrated Reporting • Set a time line for compilation of Integrated Report • Look at the journey of other companies in the process of compiling Integrated Report and imbibe learnings • Acknowledge and reward the efforts of the Committee in compiling Integrated Report Integrated Reporting is not a matter of choice. The stakeholders will in future demand information on Social and environmental aspects of business and companies which rise to the challenge shall be rewarded with higher valuations and enhanced corporate image. cbst.skgupta@gmail.com 28 the MANAGEMENT ACCOUNTANT MAY <strong>2015</strong> www.icmai.in
A STUDY OF INTEGRATED REPORTING IN INDIAN BANKS Indian banks should adopt and establish a sound reporting process for identifying its material issues and target audience, stakeholders before embarking on the integrated reporting agenda. The more they project their sustainability the higher their stakeholders’ confidence Dr. V. Usha Kiran Professor Osmania University, Hyderabad M. Maschender Goud Research Scholar, Osmania University, Hyderabad www.icmai.in MAY <strong>2015</strong> the MANAGEMENT ACCOUNTANT 29
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Page 6 and 7: FROM THE EDITOR’S DESK Greetings!
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2. assessment of total environment
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Table 1.3 shows an ideal framework
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that reduction of the same is possi
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National Seminar on "Capital Market
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The Institute of Cost Accountants o
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cept and functions of PB, restricti
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As per RBI guidelines, PB refers to
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pected to grow at 10-15% annually.
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www.icmai.in MAY 2015 the MANAGEMEN
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ECONOMY UPDATES Income Tax CBDT Not
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can be utilized for payment of the
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Interest Rates on Deposits In refer
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ELECTIONS 2015 www.icmai.in MAY 201
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ISSN 0972-3528 Registered KOL RMS/1
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May-2015

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