Date:15 march 2013
The International Integrated Reporting Council (IIRC) defines an integrated report as a concise communication about how an organization’s strategy, governance, performance and prospects lead to the creation of value over the short, medium and long term. The need for integrated reports originated from the increased realization that success of a company is determined by other non-financial factors which are not presented in the financial statements. In South Africa the Integrated Reporting Committee has been recently formed to provide guidance on integrated reporting. The King III code requires companies to produce integrated reports. Mega Mines Limited is listed on the Johannesburg Stock Exchange which requires compliance with the King III code therefore it is compulsory the company to produce integrated reports. Currently there has been a global move towards integrated reporting. Various bodies have been formed to provide guidance on how to produce integrated reports. The benefits of issuing integrated reports are listed below. Encouraging investing and improved relations with stakeholders Socially responsible investors increasingly demand information about environmental performance. Integrated reporting gives this information and if adopted more investors will be willing to invest in the company. Mega Mines will be able to get cheaper and more ready access to finance. Socially and environmentally responsible suppliers will also be willing to do more business and support the company. Improved scrutiny of future opportunities, risks and changes in business environment Mega Mines management will be able to identify more factors around the company. For example part of disclosure will be on the effect of the company’s operations on the environment, which the company will be able to address accordingly in time before regulators may intervene by imposing penalties...