Presentation

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Agenda

Opening & welcome

Discussion Paper walkthrough

<IR> Framework

Pilot Programme

Q&A

Closing

2

Discussion Paper – context for Integrated Reporting

Discussion Paper Overview

Available from 12 th

September 2011

Public comment until 14 th

December 2011

Ten specific questions

Other comments respondents would like to make

Rationale behind Integrated Reporting

Outline of an International Integrated Reporting Framework

Central themes: business model and value creation

Guiding Principles

Content Elements

Benefits and challenges along the reporting supply chain

Future directions

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The percentage of market value represented by physical and financial assets versus intangible factors, some of which are explained within financial statements, but many of which are not.

The world has changed – reporting must too

The world population is increasingly urban

Global population by type of area and by region:

1950-2050

Global economic power is shifting

Top 10 economies by GDP in 2050

The global middle class is rapidly expanding

Population in low- and middle-income countries earning $4,000-$17,000 per capita (purchasing power parity)

Source: UN Population Division, World Population

Prospects: The 2008 Revision, 2008

Greenhouse gas emissions keep rising

GHG emissions by regions

Source: Goldman Sachs, BRICs and Beyond, 2007

Environmental degradation jeopardises people’s quality of life

People living in areas of water stress by level of stress

Source: World Bank, Global Economic Prospects, 2007

The world could be running out of some resources

Global supply forecasts according to the implied ultimate recoverable resources of conventional oil, date of peak production and the postpeak aggregate decline rate

Source: UN Population Division, World Population

Prospects: The 2008 Revision, 2008

Source

– WBCSD Vision 2050

Source: Goldman Sachs, BRICs and Beyond, 2007 Source: World Bank, Global Economic Prospects, 2007

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Reports: Increasing length and complexity

Prudential annual report pages 1850-2008

Source: Investis research - PwC

The evolution of Reporting…

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…Integrated Reporting – the Future

9

Coordinated, International Action Needed

Now

Reporting has a fundamental impact on decision-making

Critical interdependencies need to be made clear

A clear, concise picture of performance, impacts and interdependencies, to:

– drive innovation

– be focused on communication and not just on compliance

– support resource allocation decisions consistent with sustained value creation and with long term economic stability

Build on the many positive developments to date

Bring together divergent strands of reporting

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Aims of the Framework

Support the development of reporting over the coming decades

Reporting organizations – consistency of content and approach

Policy makers and regulators – consistent reporting regimes within and across jurisdictions

Standard-setters – focal point for harmonization

Initial proposals in Discussion Paper – interim guidance to be on the IIRC website

Initial focus – larger companies and the needs of their investors

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What Will it Mean for Me?

Benefits and challenges

12

Future Direction

Continue developing the International Integrated Reporting

Framework

– draw on Pilot Programme experiences

Exposure Draft in 2012

Work with others on measurement and reporting relevant to

Integrated Reporting

Explore with regulators etc opportunities to harmonize reporting requirements within and across jurisdictions

Conduct regional roundtables and other engagement and communications activities

Public consultation regarding ongoing governance of

Integrated Reporting

13

International Integrated Reporting Framework overview

How is Integrated Reporting Different?

Thinking:

Stewardship:

Focus:

Timeframe:

Trust:

Adaptive:

Concise:

Technology enabled:

Disconnected

Financial capital

Past, financial

Short term

Narrow disclosures

Rule bound

Long and complex

Paper based

Integrated

All forms of capital

Past and future, connected, strategic

Short, medium and long term

Greater transparency

Responsive to individual circumstances

Concise and material

Technology enabled

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Central themes

Business model & value creation

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Resources and relationships or “capitals”

Financial capital: The pool of funds available to the organization.

Manufactured capital: Manufactured physical objects, as distinct from natural physical objects.

Human capital: People’s skills and experience, and their motivations to innovate.

Intellectual capital: Intangibles that provide competitive advantage.

Natural capital: Includes water, land, minerals, and forests; and biodiversity and eco-system health.

Social capital: The institutions and relationships established within and between each community, group of stakeholders and other networks to enhance individual and collective well-being.

Includes an organization’s social license to operate.

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Guiding Principles

Strategic focus: An Integrated Report provides insight into the organization’s strategic objectives, and how those objectives relate to its ability to create and sustain value over time and the resources and relationships on which the organization depends.

Connectivity of information: An Integrated Report shows the connections between the different components of the organization’s business model, external factors that affect the organization, and the various resources and relationships on which the organization and its overall performance depend.

Future orientation: An Integrated Report includes management’s expectations about the future, as well as other information to help report users understand and assess the organization’s prospects and the uncertainties it faces.

Responsiveness and stakeholder inclusiveness: An Integrated Report provides insight into the organization’s relationships with its key stakeholders and how and to what extent the organization understands, takes into account and responds to their needs.

Conciseness, reliability and materiality: An Integrated Report provides concise, reliable information that is material to assessing the organization’s ability to create and sustain value in the short, medium and long term.

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Content Elements

Organizational overview and business model: What does the organization do and how does it create and sustain value in the short, medium and long term?

Operating context, including risks and opportunities: What are the circumstances under which the organization operates, including the key resources and relationships on which it depends and the key risks and opportunities that it faces?

Strategic objectives and strategies to achieve those objectives: Where does the organization want to go and how is it going to get there?

Governance and remuneration: What is the organization’s governance structure, and how does governance support the strategic objectives of the organization and relate to the organization’s approach to remuneration?

Performance: How has the organization performed against its strategic objectives and related strategies?

Future outlook: What opportunities, challenges and uncertainties is the organization likely to encounter in achieving its strategic objectives and what are the resulting implications for its strategies and future performance?

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Pilot Programme

What is the Pilot Programme?

A two year programme:

Trying and testing IIRC’s proposed principles for Integrated

Reporting

In support of the development of an International

Integrated Reporting Framework

Asking leading companies and investors to develop and exchange good practice

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Programme Milestones

Expression of

Interest

September 2011 – Dry Run Conducted

Dry Run

(Phase 1)

Pilot Cycle 1

(Phase 2)

17-18 October 2011- Pilot Programme Kick-off

Meeting (Rotterdam, the Netherlands)

September 2012 - Mid-Programme Conference

Pilot Cycle 2

(Phase 3)

November 2013 – Closing Conference

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Questions?

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