BABC001 - Integrated Reporting: An Analysis of Iluka Resources Ltd

This report elucidates the concept of integrated reporting (IR), addressing the erosion of stakeholder trust due to corporate scandals. It highlights the Reporting board's introduction of IR to present both financial and non-financial organizational information transparently. The report details the importance, purpose, and benefits of IR, emphasizing its role in fostering better communication and value creation. Guiding principles such as conciseness and stakeholder relationships are examined for their contribution to transparency, using Iluka Resource Limited as a case study. The analysis assesses Iluka's annual reports to determine the effectiveness of their integrated reporting practices, particularly in conveying a clear understanding of organizational processes to stakeholders and maintaining robust relationships. The report concludes that IR offers a more comprehensive and transparent approach compared to traditional annual reporting, benefiting investors and stakeholders by providing a holistic view of organizational value creation. Desklib offers a range of similar solved assignments and resources for students.

Running head: INTEGRATED REPORTING
INTEGRATED REPORTING
Name of the Student
Name of the University
Author Note

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Executive Summary
The given report throws light on the concept of integrated reporting. With the rise in scandals
and other related aspects of the businesses, the stakeholders seemed to be having losing their
trust from the organizational activities. For this purpose the Reporting board came up with an
integrated reporting format for organizations which would help them in portraying financial and
non financial information about the organization as well. The report follows a structured format
whereby an introduction is followed by the meaning and importance of integrated reporting. The
guiding principles of conciseness and shareholder relationship have been used to determine
whether the reports reflect transparency or not. The example of Iluka Resource Limited has been
used.

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Table of Contents
Introduction and Overview..............................................................................................................3
Importance, purpose, and benefits of Integrated Reporting............................................................3
Guiding Principles of Conciseness and Stakeholder relationship uses to achieve the main purpose
of IR.................................................................................................................................................6
Analysis of Company report............................................................................................................8
Conclusion.......................................................................................................................................8
References......................................................................................................................................10

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Introduction and Overview
With companies becoming more advanced and the advent of technology, the shareholders
and investors have become more conscious about the working of the organizations and the
employment of their money in the organization. The given report will reflect upon the
importance of integrated reporting and the primary purpose of it. The key benefits of the
integrated reporting will also be discussed along with reference to the guiding principles in
enhancing the reporting format (de Villiers, Rinaldi and Unerman 2014). As a practical example,
the annual reports of Iluka Resource Limited will be analyzed to see to it whether the
organization is successful in portraying an integrated reporting or not.
Importance, purpose, and benefits of Integrated Reporting
Integrated Reporting can be described as an integral coalition of companies, investors and
regulators, accounting professionals and various nongovernmental organizations which aims to
inculcate an environment of better communication and creation of value. The given concept is a
revolution in the field of corporate reporting. Integrated reporting not only involves reporting the
financial aspects of an organization in an organization but involving the non-financial aspects as
well.
Purpose of IR:
The primary purpose of Integrated Reporting is to build on developments in reporting in
order to incorporate a holistic form of reporting with respect to the value created by a business.
This new reporting style would also reflect upon the non-financial resources which include social

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capital, human capital and the intellectual capital along with the incorporation of the financial
capital (Adams 2015).
According to Abeysekera (2013), an analysis of the way in which these stated capitals
have an impact on the society in general and on the business in particular requires critical
thinking with regard to ensuring that various business activities such as strategy, sustainability,
operations and human resources are included in reporting. Normal annual reporting just involves
consideration of the financial aspect but this should not be the case. A report should collectivity
comprise of all aspects of the organization and prove to be a clear picture of the value creation
process of an organization (Iluka.com. 2018).
Users of Integrated Reporting
The Integrated Reporting approach is used by various countries since its inception in
2010 during the development of the IIRC. The report format is practiced in retail, South Africa,
UK, Netherland, Spain, USA, Japan and Singapore.
Benefits
The primary benefits of the usage of Integrated Reporting have been given as follows:
1. Facilitates Integral Thinking
Integral thinking is the consideration adopted by an organization which looks after the
various relationships that exist between the different operational and function al units of the
given organization. This integrated reporting often reflects in integral thinking and decision
making which leads to better results for the organization (Integratedreporting.org. 2018). The
reporting style promotes a holistic culture and helps the business to grow and serve better

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societies. It considers connectivity and interdependencies between various factors in an
organization`s realm.
2. Change in Corporate Behaviour
The integrated reporting process can lead to a change in the various corporate behavioral
aspects of the organization in a two way process. The first is that it affects the ideal culture
which helps the management to start undertaking various sustainable risks. It also impacts that an
organization might face (Stubbs and Higgins 2014). This helps the organization in creating
strategies which then help the firm in communicating effectively with the stakeholders.
Secondly integrated reporting also helps an organization to bring about necessary changes in
corporate behaviour.
3. New mechanism for Corporate Governance
The integrated form of reporting also helps in formation of an effective corporate
governance tool which helps a firm to interact with its key stakeholders. The transparency with
the board helps in helping the various stakeholders to clearly access information with respect to
the organizations structure of governance and helping them to understand the objectives of the
organization (Integratedreporting.org. 2018). Hence, due to this it becomes the responsibility of
the company to disclose information relating to financial and non-financial performance of the
firm. This serves as guidance for corporate governance
4. Ensures stakeholder management

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The emerging cases of various organizations relating to corporate and financial scandals
made reporting and disclosure an integral part of engaging with the various stakeholders.
Stakeholders prefer to deal with companies with a closure which can actually display such
evidences which might lead to unforeseen circumstances. Companies publishing reports like
these, ensure sustainable reporting.
5. Enhances corporate reputation and Performance
The disclosures about the value creation process of a company make the whole process
very transparent and tend to enhance the reputation of the firm. This is the reason why it is
advised to incorporate this reporting in order to build a good image of thee company in the eyes
of the customers (Integratedreporting.org. 2018). This better image of the organization allows
the firm to negotiate with the host governments, attract opportunities, attract employees and
allows them to charge premium prices for the various services being offered. This also leads to
lowered capital cost.
Guiding Principles of Conciseness and Stakeholder relationship uses to achieve the main
purpose of IR
1. Conciseness
The guiding principle of conciseness reflects that an integrated reporting system needs to
be extremely concise. This means that the information which is reflected in the report need to be
full of content and include enough context in order to ensure that governance, strategy and
various prospects without being exposed to information which is unnecessary and not required.
Any integrated reporting system needs to ensure that the various guiding principles are balanced
with the given principle of conciseness (Dergipark.gov.tr. 2018).

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In order to ensure that a given report is concise, it needs to be seen to it that the report is
following a concise structure with various internal and cross references which is generally
implemented to avoid repetition (Flower 2015). Instead the report should aim to link the data
present in the report into more detailed information which remains stable and does not keep
changing. The various concepts which the company wants to introduce to the audience needs to
be explained in the beginning briefly. Furthermore, plain and simple language needs to be use in
order to avoid confusion. According to Iluka.com (2018), generic disclosures need to be avoided
as they are often considered to be boilerplate and not organization focused.
2. Stakeholder relationships
An integrated reporting system also goes a long way in providing a deeper insight into
the kind of relationship an organization shares with its various stakeholders. It tends to be a
reflection upon how an organization tends to understand and convey the correct message to an
organization (Iluka.com. 2018). It also reflects how the organization responds to the interests and
the needs of the various customers. It is believed that value is not created within a firm alone but
through maintaining healthy relationships with the key stakeholders. Very often insights from the
various stakeholders prove to be an important source of information which helps in helping the
firm to improve its processes; the stakeholders are also a reflection of the various environmental,
economical, social and other issues
In the ordinary course of business, the stakeholders generally tend to communicate with the
various organizational members but a report helps in serving an integrated thinking in the
business domain. As an integral reporting system reflects transparency, long term trusts with
shareholders are built which then help the firm to increase its brand value. Furthermore, the

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concept of stewardship and responsibility of a give firm helps in indulging in acts which tend to
promote ethical responsibility.
Analysis of Company report
For the purpose of analyzing whether ILUKA Limited Resources makes use of relevant
integrated reporting techniques in its annual reporting method, with special reference to the
above guiding principles, the reports of the year 2016 and 2017 were analyzed. In terms of
conciseness, it can be stated that the annual reports of both the chosen years tends to follow a
systematized format where the report follows a given flow and structure followed by a brief
overview upon all the necessary information related to the given organization. The report was all
inclusive but at the same time was successful in ensuring that the firm does not indulge in
showing too much to its target audience.
The second guiding principle of Stakeholders relations which stresses upon the fact that
the origination needs to portray a deeper and clear understanding of processes which they are
want to share with the various employees and guides it in maintaining good relations. The reports
of Iluka Limited go a long way in ensuring that the reports reflect upon and give out various
details about the various functions of an organization in front of the stakeholders. ILUKA
understands that engaging in the long term relationship with its suppliers would go a long way in
determining the firm`s success (Icas.com 2018). The report not only consists of the financial
information but also information related to the human process aspects. The report also comprises
of a letter to the stakeholders and helps them to implement and analyze for the same.

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Conclusion
Therefore from the given analysis on the importance of integrated reporting it could be
gathered that the old format of annual formatting is extremely outdated and just provided the
organizational stakeholders and related interest parties in obtaining information about the
financial aspect of any organization. However, integrated reporting goes a long way in ensuring
that the organization is able to reflect both financial and non financial information to the various
investors and related parties to ensure transparency.

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References
Abeysekera, I., 2013. A template for integrated reporting. Journal of Intellectual Capital, 14(2),
pp.227-245.
Adams, C.A., 2015. The international integrated reporting council: a call to action. Critical
Perspectives on Accounting, 27, pp.23-28.
de Villiers, C., Rinaldi, L. and Unerman, J., 2014. Integrated Reporting: Insights, gaps and an
agenda for future research. Accounting, Auditing & Accountability Journal, 27(7), pp.1042-1067.
Dergipark.gov.tr. ,2018. Dergipark.gov.tr. [online] Available at:
http://dergipark.gov.tr/download/article-file/364169 [Accessed 21 Apr. 2018].
Flower, J., 2015. The international integrated reporting council: a story of failure. Critical
Perspectives on Accounting, 27, pp.1-17.
Icas.com ,2018. Icas.com [online] Available at: https://www.icas.com/ca-today-news/what-is-
integrated-reporting-why-it-matter [Accessed 21 Apr. 2018].
Iluka.com. ,2018. [online] Available at: https://iluka.com/docs/default-source/asx-releases/iluka-
annual-report-2017-including-appendix-4eedecf2a9140e66fb8b60ff0000e79da7 [Accessed 21
Apr. 2018].
Iluka.com. ,2018. [online] Available at:
https://iluka.com/docs/default-source/annual-reports/iluka-sustainability-report-2016 [Accessed
21 Apr. 2018].

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Iluka.com. ,2018. Annual Reports. [online] Available at: https://iluka.com/investors-media/asx-
disclosures/annual-reports [Accessed 21 Apr. 2018].
Integratedreporting.org. ,2018. Integratedreporting.org. (2018). [online] Available at:
http://integratedreporting.org/wp-content/uploads/2017/08/IFAC_CreatingValueforSMEs.pdf
[Accessed 21 Apr. 2018]. [online] Available at:
http://integratedreporting.org/wp-content/uploads/2017/08/IFAC_CreatingValueforSMEs.pdf
[Accessed 21 Apr. 2018].
Integratedreporting.org. ,2018. Integratedreporting.org. [online] Available at:
http://integratedreporting.org/wp-content/uploads/2014/09/IIRC.Black_.Sun_.Research.IR_.Impa
ct.Single.pages.18.9.14.pdf [Accessed 21 Apr. 2018].
Integratedreporting.org. ,2018. Integratedreporting.org. [online] Available at:
https://integratedreporting.org/wp-content/uploads/2013/12/13-12-08-THE-INTERNATIONAL-
IR-FRAMEWORK-2-1.pdf [Accessed 21 Apr. 2018].
Stubbs, W. and Higgins, C., 2014. Integrated reporting and internal mechanisms of
change. Accounting, Auditing & Accountability Journal, 27(7), pp.1068-1089.