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THE INTEGRATED REPORTINGINITIATIVE

OVERVIEW AND UPDATE

June 2013

Presented by Mervyn E King SC

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Corporate Legal Advisers

HISTORY

Great depression

Almost universal FR

Business model of 19th and early 20thcentury

Exclusive approach

Mindset company apart from society

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FORESEEABILITY

Growth of middle class

Population explosion

Natural assets seemed limitlessGrowth of companies MNEs

More complex

Reporting standards more complex

Exacerbated by Enron, Tyco, Worldcom

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INTANGIBLES

80/20 S&P 500

Intangible assets

FR did not reflect valueLed to initiatives

EBR, VR, TR, BBBR, CBRMAt same time sustainability reports

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THE IIRC

Geneva and St James Palace

Reform of corporate reporting

Knowledge lost in informationOnly world is a sustainable one

Needs companies with sustainable strategies

Investors need to make informed assessmentsTrustees of pension funds duty of care

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INTEGRATED REPORTING

Changed world

Intent of IR

Explain in clear concise and understandable language

How company creates and sustains value

Short, medium and long term

6 capitals (resources)

Key stakeholders Embed sustainability into long term strategy

Investors can make an informed assessment

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INTEGRATED THINKING

Resources

Stakeholders

Business

Model

How?

Risks

Opportunities

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AN ORGANISATIONS VALUE

CREATION PROCESS

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BUSINESS MODEL

Business model is the chosen system of inputs,business activities, outputs and outcomes which aimto create value over the short, medium and long

term.Value for the purpose of IR includes all forms of value

created through the increase, decrease ortransformation of the capitals, each of which may

ultimately impact financial return.

This is a change from the traditional meaning of valuewhich has been narrowly associated with the present

value of expected future cash flows11

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PROGRESS

25 full time staff, 340 voluntary workers

9 different cities and countries

Sept 2011 discussion paper, prototype

Draft Framework of 16 April

90 Iconic companies September 2012

30 Investor networkReform of corporate reporting urgent

Important for investors and for sustainability ofplanet

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THANK YOU

Prof Mervyn E King SC