Integrated Reporting - Truworths International LTD, Naspers LTD - Case Study Example

Integrated Reporting Name: Institution: Date: Introduction Integrated reporting aims at bringing together material information concerning a given organization, it describes the organization’s strategies, governance, its general performance and the prospects it has made over a given period of time. Integrated reporting has of late been considered as the primary means of an organization’s reporting means. Reporting has been attributed to influencing the behavior of a given organization; integrated reporting gives a broader explanation of the general performance of a given organization unlike the traditional way of reporting. Through integrated reporting, a given organization is able to improve the quality of information that is available to its financial providers hence fostering a more efficient and productive funds allocation. It also aids in enhancing accountability in various sectors of the organization and promotes understanding about the interdependencies of these organizations, integrated reporting further supports integrated thinking, decision-making and fosters actions that enhance the short, medium and long-term goals of the organization. Integrated reporting is majorly centered and focused on the business model of any given organization. A business model describes the process by which an organization seeks to create, improve and maintain its value. The business model of an organization is influenced by the external factors that either present risks or opportunities which create the context writhing which the business runs (Adams, 2013). Integrated reports of two businesses have been analyzed; the first company is Truworths International LTD which is an investment holding and Management Company majorly based in South Africa, the second company is Naspers LTD, a multinational media group having principal operations in internet services and ecommerce, its business is spread across Eastern and Central Europe, China, Russia, Southern Asia, Africa and the Middle East. Business Models of the firms. The business models of the two companies are integrated within their business philosophy (Adams, Cohen & Baraka, 2014). Truworths International Limited is a fashion clothing, footwear and accessories company located in South Africa which offers internationally inspired apparel for ladies, men and children. It aims at being a top quality fashion destination; it is a long-term investment venture and believes in management’s capacity to execute innovative strategies that lead to the delivery of significant growth. Truworths aim at ensuring the youthful and fashionable South Africans look attractive and feel enthused with confidence, it recognizes excellence of their leaders and teams including the courage to contribute to ideas and investing in innovation for future potential (Pretorius, 2010). Naspers Ltd is a multinational group of ecommerce and media platforms, it aims at providing services such as trading opportunities, entertainment, information and gaming activities. The expertise of Naspers lies in ecommerce, connecting people all over the globe, distribution of media products and creation of media content for selling and advertisement. Naspers Ltd is driven by the common values of innovation, transactions, cultural diversity, doing business with integrity and providing an environment through which entrepreneurs can succeed. Engagement with Stakeholders Stakeholders are important in determining the success of any given company, Truworths International recognizes this and hence develop an appropriate and systematic way through which the stakeholders are engaged. Several stakeholders who include shareholders, investors, customers, employees and regulatory bodies influence the company’s business. The management believes that the stakeholders who have been identified in the company’s vision who include the customers, shareholders and employees have a material influence in the running of the organization. The shareholders are always invited to participate in decision making meetings of the company Other the other hand, Naspers Ltd has got a different approach when it comes to stakeholder’s engagement. Employees are engaged through the use of employee newsletters, surveys, management briefings and intranet sites. The customers are always interacted to using user-experience ratings found on ecommerce platforms. Interaction with subscribers is done via different channels; these include feedback through letters to the editor, emails, text messages and various social media sites. Industrial groups are always held in order to develop shared practices, the company also engages with local communities through corporate citizenship activities. There are always one-on-one meetings with different suppliers and partners. Naspers Ltd has developed a Net Promoter Score in most businesses which aids in measuring the customer’s satisfaction trends on the delivery of services. All the various divisions have got active social media platforms, the editorial teams of these divisions use Facebook and Twitter as interactive platforms which enable them to engage with audiences on topical issues. Trade-offs between six capitals in the year Naspers Ltd recorded various results in the trade-offs of the six capitals in the year, there was an increase in one capital and a decrease in the other capital by the same event. In terms of revenue, the company recorded an increase in revenue from 2013 where it was at a rate of R80, 000m and R100, 000 million in 2014. Trading profits of the group increased R1.3m up to R1.5m. There was a reduction in core helps which dropped from 2300 cents to 2100 cents, free cash flow reduced from R3.5m down to R’m0. The development spend increased from R4000m in 2013 to R8000m in 2014, in terms of dividends per share, there was an increase from 380cents in 2013 up to 400cents in 2014. Truworths International Ltd on the other hand had various financial positions. The loans and receivables of the company decreased from R19m to R99m, this was as a result of partial settlement of loans. Its current assets increased from R6.0billion in the year 2013 to R6.7billion, trade and other variables. The share capital and share premium increased by R75million from R88 million due to the issue of shares. The total liabilities of the company increased to R1.4 billion from R1.1 billion in the year ended 2013. The non-current liabilities of the company decreased by R8 million to R88 million, the current liabilities increased to R1.3 billion. The cash and cash equivalents increased by R263 million to R1.6 billion, the group generated R2.5 billion in cash from operating activities. The trading expenses increased by 15 percent to R3.7 billion, trading profit however declined by 5 percent to R2.4 billion as the trading margin decreased. The total interest received by the company increased R917 million to R814 million, the investment income received was R1 million which was lower at R89 million. Differentiating Human Capital with Social and Intellectual Capital Truworths International Ltd illustrates its commitment on investing in its human capital by ensuring sustainable performance and continued industrial leadership. It follows an equal opportunity employment; it invests in talent and recognizes excellence. Truworths group favors internal appointments and promotions; this is done by rewarding consistent outstanding performance and the overall contribution of the employees. The strategies of rewarding employees is aimed at attracting, motivating and retention of the employees, the remuneration practices are therefore linked to the philosophy of the group. The reporting year ended 2014 saw Truworths Company employing 10565 people a group that comprised of 3344 permanent and 7221 flextime employees. Various initiatives were put in place to strengthen employee engagement which included the introduction of a flexi-hours policy. In terms of human capital management, Truworths company values management strategy and define ways in which management interacts with the employees. The reviews of succession are always conducted regularly, this enables the identification of high potential employees, and these employees are then selected and placed on individual developmental programmes so as to enhance their leadership skills. In order to achieve employment equity, the group’s approach has been about driving sustainable transformation in the medium-term rather than the short-term solution in order to create a more diverse workforce. Employee remuneration in Truworths is conducted through market surveys which ensure that the deserving employees are rewarded competitively in consideration of their performance, contribution and potential. There is an annual review of salaries which is majorly based on group and individual performances. Various ways are used to motivate employees, these include short-term cash incentive schemes that are designed to drive performance and retain key talent, there is an employee recognition program that motivates and recognizes employees for their outstanding achievements in various sectors. Talent and skill development is achieved through training and development programs and regular benchmarking ensures an international standing training. The company aims at training 7870 employees and had already trained 9876 in different courses at a cost of R87 million. The main aim of training program is developing and retaining employees mostly in areas of scarce skills. Naspers limited on the other hand aims at maintenance of a sustainable business which is not only in terms of the business environment but also in relation to sustainable profits, the company aims at not only making profits but also improving the living conditions of their employees, their families and the community. Value Creation The general overview of the two companies comprising Truworths and Naspers tend to give a varying implication of the contribution the two companies are making both towards internal development and growth of the company and the outside environment. Truworths Company has got a clear and well defined strategy that comprises the development of its internal employees through provision of various sources of motivation and rewarding good performances. The company also develops the skills of its employees through provision of training to boost their skills and benchmarking opportunities. Such activities not only benefit the company in terms of output but also the employees in ensuring personal development. In general, Truworths Company seems to create greater value in terms of company, employee and community development. Conclusion The main purpose of an integrated report is to give providers a clear explanation concerning the financial capital on how a given organization creates value over time. A well-documented integrated report will serve the interests of the stakeholders (Busco, n.d.). The study reveals two different companies with a common goal of making profits, the integrated report however give a varying approach through which the companies have embraced in order to ensure their business model is upheld. The various approach used by the companies is the main factor that distinguishes the companies that create value in the course of their operation and up to which extend. References Adams, C. (2013). Understanding integrated reporting. London: DoSustainability. Adams, C., Cohen, E., & Baraka, D. (2014). Better Corporate Reporting. London: DoSustainability. Busco, C. Integrated reporting. Crowther, D. (2012). A social critique of corporate reporting. Farnham, Surrey: Gower Pub. 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