UK: Financial Reporting - Annual Report Survey

At the end of last year, Deloitte published its annual survey of FTSE350 companies' annual reports. Its report, titled "Written to Order: Surveying OFRs, EBRs and Narrative Reporting in Annual Reports", contained the following findings (to quote directly from the relevant press release):

(a) Annual reports have again increased in size, with the average number of pages at an all time high of 89, compared to 85 in 2006 and 45 pages in 1996.

(b) The narrative reporting sections are increasing in size. The largest increase was in the top 350 group of companies where the narrative reporting section has increased from an average 70 to 77 pages.

(c) The number of formal Operating and Financial Reviews (OFRs) has decreased from 41% in 2005 to 20% in 2006 to 10% in 2007. The official title, the OFR, is no longer being used to reduce the scrutiny burden on companies.

(d) The number of companies including Key Performance Indicators (KPIs) in their Enhanced Business Reviews (EBR) increased considerably from 67% in 2006 to 81% this year. The average number of KPIs is 6 but there continues to be a wide range in the number of KPIs, with one company in the top 350 disclosing 29.

(e) While the legal requirements are that an EBR must include a description of the principal risks and uncertainties facing the company, only 90% of the companies clearly met this. In particular, only 67% of companies included information on non-financial risks such as on strategic, operational and commercial matters.

The report is available here and there is further information here.