Integrated reporting practices of state-owned entitites

M.Com.Abstract: The publication of the King III report on Corporate Governance for South Africa (King III) in March 2010 and the release of the Integrated Reporting Framework (IR Framework ) in 2013, played a very important role and exerted a significant influence in sanctioning for South African entities to incorporate and champion the idea of integrated reporting (IR) whereby they must report on the strategies, corporate governance, risk management functions, financial sustainability and performance as well as the ability of the entity to create value and sustain it over time. Many significant decisions are made by the stakeholders or users of the current annual reports insofar as they help them to understand an entity’s potential to create value and operate sustainably in the foreseeable future. As a result, the information that is published in these reports is important in enabling users to make informed decisions. However, the same stakeholders also question the relevance and reliability of such reports in imparting adequate information to make sound investment decisions. These corporate reporting challenges, amongst many others, have highlighted the need for a significantly more comprehensive and more integrated corporate reporting model which would merge both financial and non-financial information in a meaningful manner. With the advent of democracy in South Africa in 1994, regulatory reforms such as the Public Finance Management Act (PFMA, 1999), the new Companies Act No 71 of 2008 and King III were instituted in order to improve decision-making processes and corporate governance requirements for all entities, including state-owned entities (SOEs). SOEs primarily assist the state to fulfil the mandate of growing the economy by providing efficient, reliable and affordable services in critical sectors, such as electricity supply, water, health services, transport infrastructure and school facilities. They also make infrastructure improvements that are economically and socially critical to the welfare of the nation. Against this background, and considering the impact that SOEs have on the South African economy, there is a strategic need for an integrated way of reporting the performance and results of SOEs to meet the information requirements of all stakeholders in order to make them understand what drives..