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Deloitte survey highlights variable reporting practices in New Zealand company annual reports

Results of the 2013 Deloitte New Zealand Financial Reporting Survey highlight significant variability in the reporting practices of company annual reports, particularly in relation to the nature and extent of management commentary provided.

The survey, which looked at the 2012 annual reports of 100 listed and other large companies with publicly available information, found that management commentary ranged from 0 to 74 pages; from a focus on current year performance to providing significant detail on the company’s business model, divisional performance and prospects.

Deloitte technical partner Denise Hodgkins says that some variability in commentary is expected due to the differing regulatory requirements, size and complexity of companies in the sample.

“However, the results raise the important question as to what information should be included in an annual report,” says Ms Hodgkins.

“Better reports use imagery such as maps and charts to explain the company’s business model and objectives, and report results against those objectives. Some also include diversity and sustainability information.”

Information on diversity is a new requirement for NZX listed entities, which from December 2012 are required to include information on the gender composition of directors and officers, and details on any existing diversity policy.

“Nineteen of the companies surveyed already disclose that they have a diversity policy but what they consider to be diversity is also variable with some focusing on gender, and others expanding to include ethnicity, age, backgrounds and others.  On average 13% of board members and 14% of executives were female,” says Ms Hodgkins.

Other results from the 2013 survey include:

  • Companies continued to provide alternative profit measures such as EBITDA, normalised earnings and operating profit, with 253 alternative measures provided by 90 companies in the sample. This is consistent with 2012 survey results and is unsurprising given that guidance issued by the Financial Markets Authority did not become applicable until 2013.
  • Management commentary continued to reference the challenging global economic environment, but was generally more positive in respect of the year ahead.
  • Financial statements made up 55% of the annual report on average, a slight increase from the previous year.

To read the 2013 issues from the financial reporting series, Issue 9: Perspectives on annual reporting and Issue 10: Underlying profit 2012, visit 

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Matt Huntington
Deloitte New Zealand
Job Title:
Communications Manager
04 470 3771
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