General Criteria Applicable to all Divisions

Reports should be clear and concise, with material in a logical order. Graphs, tables and photographs should enhance key messages. ARA looks for three informal components:

1. Overview, objectives, highlights, etc. of the entity

2. Review of operations or activities

3. Details and analyses of financial performance/position and its relationship with its stakeholders.

1. Overview/Objectives/Highlights

The early pages of the report should cover:

§ the organisation’s history and profile

§ mission/vision/purpose/values and specific objectives

§ strategies for achieving objectives/outcomes.

§ highlights of the year at a glance, including:

§ progress towards achievement of the purpose, values and objectives

§ important events from the year and the outlook

§ performance measures and indicators, key financial* and non-financial features covering performance over two years and percentage changes

§ a summary of key shareholder/ stakeholder information.

*Note:

ARA encourages a comprehensive discussion of financial performance early in the report that should provide useful financial information for stakeholders, explain how the financial results were achieved and be presented in a reader-friendly format, supported by easily understood tables and graphics.

2. Review of operations or activities

2.1. The overall organisation

Describe the operations as a whole, with comparisons, which should include:

§ discussion and analysis of financial and non-financial results

§ details of business risks and profit sensitivity to competition, the business environment, market share, export performance, product price, interest rates and foreign exchange

§ any Total Quality Management (TQM) programs/standards adopted which may include ISO 9000 Quality Management Systems, ISO 14000 Environmental Management, and Six Sigma, and compliance with these programs/standards

§ any strategic management programs adopted including the Balanced Scorecard and Digital Dashboard, and the performance outcomes achieved, represented through key performance measures/indicators

§ capital expenditure (capex) - distinguishing between operational capex (recurring business expenditure) and expansion/acquisition capex

§ research and development and technology-related issues

§ impact of government policies

§ environmental performance - discussion of the impact on the environment and actions to improve performance

§ community involvement and/or philanthropy

§ details of political contributions

§ outlook for the organisation

§ governance issues - including aspects of the role of the directors and management and the code of conduct such as: accountability; independence; appointment and retirement of directors; obtaining independent advice; compensation; management of significant business risks; and ethical standards (For further guidance, see detail under ‘Corporate Governance Award Criteria’ in the Special Awards Section)

§ a concise financial report with relevant commentary, cross-referenced (See comment above).

2.2. Activities of divisions or major products/ activities/programs

Provide information which should include:

§ a summary of key information on each division including its purpose and strategies; major products and services; major brand names and trademarks; divisional funding; financial results; locations and markets, including growth and outlook

§ details of divisional performance and costs

§ outlook /objectives for the following year

§ marketing arrangements including: world market position, competition, market share, marketing and pricing strategies, major supply sources, and exports.

2.3. Management, personnel, industrial relations and safety

Disclosures in this category should cover:

§ the Board of Directors - including photos, experience, qualifications, terms of appointment, and financial and other benefits

§ senior executives - including individual or collective photos of key staff, their experience, responsibilities and qualifications

§ A detailed statement of Governance policy, practices, approach to published principles for both private and public sector organisations and disclosure of performance (Further details can be found in the ARA Criteria for Special Awards)

§ measurement and disclosure of all forms of remuneration and benefits to directors and senior executives of the entity as well as related parties. Examples include share-based payments, options, bonuses, pensions, medical benefits, termination benefits, travel and accommodation benefits, and other benefits required by both accounting standard AASB 124 Related Party Disclosures and remuneration requirements under the Corporations Act

§ the organisation or corporate structure

§ personnel issues - including training and development; industrial relations; equal employment initiatives; productivity; relevant industrial awards; enterprise agreements; workforce details including full-time equivalents/productive labour and an explanation for significant variations in staff numbers; union representation; wages and superannuation; and employee share plans

§ outcomes of action taken by external authorities regarding monopolistic or anti-trust regulations

§ occupational health and safety - including policies and procedures, lost-time injuries, any fatalities or serious injuries and significant breaches of occupational health and safety laws. Include both positive and negative outcomes.

3. Details and analysis of financial performance, financial statements and related notes

1. Comprehensive financial discussion, preferably early in the report that provides useful financial information for stakeholders to allow them to judge the organisation’s financial performance.

2. Full formal Financial Statements that comply with legislative requirements, International Financial Reporting Standards and appropriate equivalent accounting standards.

Coverage should include:

§ a Balance Sheet;

§ an Income Statement (profit oriented organisation), or Operating Statement (non-profit oriented);

§ a Cash Flow Statement;

§ concise notes in conformity with Accounting Standards appropriate to International Financial Reporting Standards or Australian or New Zealand equivalents, explaining major changes in assets and liabilities - including specific information (rather than general statements) e.g. impairment and write-off of intangible assets.

§ a signed statement from the directors as to their view of the financial statements;

§ a signed report from the auditor

§ a signed statement from key executives.

Features of notes include, but are not limited to:

§ an index;

§ description or treatment of unusually large items, e.g. disposal of assets, discontinued operations or restructuring costs;

§ details of significant policies such as derivatives and intangibles;

§ revenue recognition;

§ reconciliations of classes of non-current assets;

§ cross-references between the statements and the notes.

4. Statistical summaries

Reports should include comparative information for key financial and non-financial activities covering at least five (5) years, where possible.

The information provided should include:

§ key balance sheet and income statement items, ratios, gearing, liquidity and performance indicators

§ physical data incorporating changes in key performance indicators

§ an explanation or definition of the main terms used, along with the explanatory notes.

5. Other

Other items include:

§ an index of contents, preferably with some description

§ a table of definitions and/or glossary of terms

§ the locations of major activities - include maps (where appropriate), addresses, website, email, telephone and fax numbers

§ a calendar of events

§ discussion of shareholder value, and shareholder and stakeholder benefits

§ for a listed company, discussion of liquidity in share trading and dividend policy

§ shareholder listing covering at least the top 20 shareholders in each class of share or option

§ a table of announcements to Stock Exchanges (continuous disclosure)

§ the availability of the report through print or electronic means, including the comprehensiveness and ease of access to information via the Internet.