Accountancy Age Awards 2001 – Keeping in touch.

The importance of clear annual reports and accurate accounts has been brought to the forefront this year, with high-profile cases of overstated revenues and allegations of fiddled finances.

Since January and SSL international – have been plunged into dire straits after dubious accounting. A third, Independent Insurance, is facing liquidation after an external probe found huge losses arising from claims that had not been entered into the company’s accounting system.

All this has also had negative effects on individuals. E-district’s former chief executive is facing a lawsuit, while those members of SSL’s managing board connected with the overstated accounts were fired.

Auditors for companies producing poor accounts have also ended up with egg on their faces. KPMG, Independent Insurance’s auditors, may find themselves in a lawsuit with disgruntled creditors for signing off inaccurate accounts.

So what makes a good annual report? Clarity and honesty are the most important traits in an annual report, according to Andrew Sawers, editor of Accountancy Age’s sister publication Financial Director.

He says: ‘The reader has to get a very good understanding of the direction in which the management is taking the business, and a lucid explanation of the opportunities and the risks. The whole purpose of a set of accounts is to ensure directors are accountable. That means there has to be a good account of what has happened, what went wrong and what management is doing about it,’ he adds.

‘We see lots of fancy, fiddly annual reports that have cost a lot of money to design, produce and post to shareholders. But gimmicks don’t win prizes – especially if they get in the way of communication.’

Unclear accounts tend to make readers uneasy, prompting them to think that the company is trying to hide a loss or the fact that things are not going as well as they should. According to Sawers, good annual reports should be more than mere historical documents – they should be forward-looking.

The Annual Report and Accounts of the year award is open to business and public sector bodies. Both paper and online entries are invited.

Last year’s winner of the Annual Report and Accounts award was The British Land Company, the UK’s second largest property company and one of the largest landlords in the City, with more than half of its holdings in London.

The company’s extensive portfolio posed a challenge to the finance team to produce clear and accurate accounts. Accountancy Age’s awards judges found that British Land lived up to these expectations.

British Land added to its holdings buying cheap property, but admitted it was having difficulties finding tenants for its office space. Last year, it also purchased a 30% stake in rival Liberty International.

The booming property company used securitisation to fund its Broadgate acquisitions last year and is continuing the trend this year, acquiring 35 Sainsbury stores and a 50% stake in competitor London & Henley for #18m, among others.

If you believe your organisation’s annual report and accounts, hard copy or web-based, are a model of clarity and forward thinking, enter them into the competition and let us recognise their excellence.

For more details on how to enter, awards sponsorship or to book a table, please visit our website at awards, call 020 7316 9762 or email

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