Kuala Lumpur: Market transparency through full disclosure of                                                                                          
financial and business information becomes vitally important                                                                                          
as corporations rely more on the capital market for                                                                                                   
fund-raising exercises.                                                                                                                               
                                                                                                                                                      
As such, the annual report has become the most important                                                                                              
vehicle of communication between an organisation and its                                                                                              
audience, including shareholders, creditors, customers and the                                                                                        
mass media, said KLSE executive chairman Datuk Nik Mohamed Din                                                                                        
Datuk Nik Yusoff.                                                                                                                                     
                                                                                                                                                      
"The annual report is expected to provide reliable indicators                                                                                    
and factual information on the corporation's financial                                                                                                
performance, its prospects and plans for the future as well as                                                                                        
its management team," he said after launching the National                                                                                       
Annual Corporate Reports Award (Nacra) 1997 here yesterday.                                                                                           
                                                                                                                                                      
He noted that the quality of reporting via the annual report                                                                                          
has a significant impact on the success and integrity of the                                                                                          
capital market.                                                                                                                                       
                                                                                                                                                      
Nik Din commended the accountancy profession for having worked                                                                                        
together with the government and the regulatory bodies in                                                                                             
developing a structure and comprehensive accounting and                                                                                               
reporting standards to foster a more competitive and                                                                                                  
transparent capital market and inculcate high standards of                                                                                            
corporate governance.                                                                                                                                 
                                                                                                                                                      
With the establishment of the Malaysian Accounting Standards                                                                                          
Board, he said the standards of financial reporting will be                                                                                           
further enhanced and this will boost investors' confidence in                                                                                         
relying on the annual report as the basis to gauge company's                                                                                          
performance and growth potential.                                                                                                                     
                                                                                                                                                      
In addition, the KLSE encouraged the dissemination of                                                                                                 
financial information via the Internet in light of the                                                                                                
globalisation of the capital market.                                                                                                                  
                                                                                                                                                      
"We hope to see an investment environment where the perception                                                                                   
of share value and its drivers are evidenced by cogent and                                                                                            
reliable facts," he said.                                                                                                                        
                                                                                                                                                      
As at end-August 1997, a total of 681 companies are listed on                                                                                         
the KLSE, of which 438 are on the main board and 243 on the                                                                                           
second.                                                                                                                                               
                                                                                                                                                      
Meanwhile, Nacra Organising Committee chairman Abdul Samad                                                                                            
Alias said the organisation has introduced a new criteria for                                                                                         
adjudication to promote the improvement of communication by                                                                                           
organisations through the publication of timely, informative,                                                                                         
factual and reader friendly annual reports.                                                                                                           
                                                                                                                                                      
He said: "While points will continue to be reserved for                                                                                          
compliance with regulatory and accepted standards of                                                                                                  
disclosure, the emphasis is on quality and comprehensiveness                                                                                          
of disclosure of the key aspects of the new criteria."                                                                                           
                                                                                                                                                      
In line with new objective, new awards introduced will                                                                                                
recognise overall excellence in reporting.                                                                                                            
                                                                                                                                                      
He said three levels of award will be presented for listed                                                                                            
companies - overall excellence, industry excellence and                                                                                               
presentation awards plus a special award for non-listed                                                                                               
organisations.