CIMAPRO19-CS3-1 Dumps - Strategic Case Study Exam

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<p>CIMAPRO19-CS3-1</p><p>Exam Name: Strategic Case Study Exam</p><p>Full version: 45 Q&As</p><p>Full version of CIMAPRO19-CS3-1 Dumps</p><p>Share some CIMAPRO19-CS3-1 exam dumps</p><p>below.</p><p>1. In recognition of Slide’s greater expertise, Fouce Oil will offer its entire portfolio of existing</p><p>exploration rights to this venture, without any charge to Slide. Fouce Oil will also pay for 55% of</p><p>any and all exploration costs, leaving Slide responsible for the remaining 45%.</p><p>2. Be the preferred supplier of raw wood-based materials to a broad customer base.</p><p>1 / 22</p><p>https://www.certqueen.com/CIMAPRO19-CS3-1.html</p><p>3. Memorandum of Understanding between Fouce Oil and Slide</p><p>It is proposed that Fouce Oil and Slide will temporarily combine their exploration activities, with</p><p>Slide taking overall control in recognition of the greater expertise of its professional exploration</p><p>staff.</p><p>This collaboration will work as follows:</p><p>4. From: Jan Archibald, Group Chief Financial Officer, Fouce Oil</p><p>To: William Seaton, Director of Finance</p><p>Subject: Sale of oil fields</p><p>Dear William,</p><p>As you know, the Board of Fouce Oil is keen that you should operate in an autonomous</p><p>manner. However, we believe that it is our duty to ask you to reconsider a key issue in Slide’s</p><p>approach to doing business.</p><p>Over the years you have been very successful indeed in finding significant oil fields and bringing</p><p>those to production. We have been gratified to observe your efforts in doing so and we believe</p><p>that all shareholders have benefitted from the wealth that you have created.</p><p>The Board of Fouce Oil believes that the time has come for Slide to stop giving the fruits of its</p><p>labour away to other companies. We believe that Slide should retain any successful oil wells</p><p>and start to earn revenues from the sale of the oil itself rather than the sale of the oil wells. We</p><p>believe that the stock market would respond favourably to such a development, to the mutual</p><p>benefit of all.</p><p>Best Wishes</p><p>Jan</p><p>Answer:</p><p>5. Topic 3, Norland Telegraph (NEW)</p><p>Arrfield targeted by environmentalists</p><p>2 / 22</p><p>Environmental campaigners have criticized fuel suppliers at Norland's airports for selling</p><p>aviation fuel more cheaply than in other countries The N$ is strong, making it possible to import</p><p>fuel more cheaply Most suppliers are passing some of the savings on to airlines in order to</p><p>boost revenues.</p><p>Airlines are responding by buying more when they refuel aircraft in Norland This means they</p><p>need to buy less fuel for the return flight from their destination Environmentalists are concerned</p><p>because this means that aircraft are carrying tonnes more fuel on their outward journeys and so</p><p>consume more fuel and cause more pollution in the process.</p><p>Airlines refer to this as "tankerage" because aircraft are effectively acting as fuel tankers on their</p><p>outbound journeys An airline spokesperson defended the practice, stating that it is a cheaper</p><p>way to fly even though fuel consumption is increased.</p><p>SIMULATION</p><p>Hello</p><p>I have attached a news article</p><p>Arrfield does not set the price for aviation fuel sold at our airports, but we do receive a</p><p>percentage of the revenues earned by the fuel companies.</p><p>I need your help to prepare for a Board meeting to discuss this matter Please write a paper</p><p>covering the following</p><p>* Firstly, explain the impact that the criticisms voiced by the environmental campaigners will</p><p>have on the frequent PESTEL analysis that Arrfield's Board conducts.</p><p>[sub-task (a) = 34%</p><p>* Secondly, evaluate the commercial logic of Arrfield's strategy of basing charges for non-</p><p>aeronautical services (such as fuel sales and retail activities) on percentages of the revenues</p><p>generated by the companies that operate at its airports [sub-task (b) = 33%)</p><p>* Thirdly, recommend with reasons whether Arrfield should attempt to justify strategic decisions</p><p>to its shareholders when the commercial logic of those decisions is not immediately obvious</p><p>[sub-task (c) = 33%}</p><p>Thanks</p><p>3 / 22</p><p>Romuald Marek</p><p>Chief Finance Officer</p><p>Answer:</p><p>Requirement 1</p><p>The criticism from the environmental campaigns for sale of cheap fuel at the Arrfield airports is</p><p>not a good sign but the prices of the fuel are not set by the Arrfield. In most of the countries the</p><p>fuel prince are regulated through Oil and Gas regulatory authorities. As the Arrfield airports are</p><p>providing the facilities to airlines to refill fuel at the airport which is necessary for the flying of the</p><p>plane on commission bases, it contribute a significant portion of profit of the Arrfield.</p><p>The environmental campaigners criticism is on the usage use of fuel which cause carbon</p><p>emissions. The Govt, of the Norland may set the price of the fuel in Norland and regulate the</p><p>prices of the fuel in Norland. After the criticism Govt, of Norland may think to not allowing the</p><p>fuel companies to pass the cheap fuel import to the airlines. This may be hostile of the Arrfiled</p><p>business. Many airline may choose the Norland for the flight operation due to gaining advantage</p><p>of cheaper fuel refill.</p><p>As the airlines are buying more fuel which makes the plane heavier and burn more fuel which</p><p>harm to the environment is a great concern. This could lead to legal and environmental litigation</p><p>and penalties. The reputation risk is also here if corrective actions are not taken by Arrfield.</p><p>Requirement 2</p><p>As the Airfield also rely heavily on the non-aeronautical revenues to make profits and the it</p><p>increase from a substantial percentage in 2020 as to the preceding year. The fuel companies</p><p>operate in Arrfied airports which is intrinsic in the airport business. It will be difficult for the</p><p>Arrfield to provide the fuel by itself. It is worthwhile that the Arrfieid earning commission without</p><p>involving the fuel operations.</p><p>As the Norland is being liked by the airlines for refueling its plane is good for the Arrfield to</p><p>make profit. Arrfield earn commission as much as the airline buy fuel from fuel companies. But</p><p>by decreasing the price of the fuel it is also worth mentioning that the Arrfield commission is also</p><p>remains at lower side.</p><p>There are three elements in the scenario: 1- Higher sale higher commission. 2- Sale at lower</p><p>price lower commission. 3-Reputational and environmental risk involved.</p><p>Requirement 3</p><p>The shareholders are major stakeholders of the company. They are key players have high</p><p>amount of power and high level of interest. The Arrfield must communicate true affairs of the</p><p>business to its shareholders. If the commercial logic of decision are not obvious then the poor</p><p>understanding of the affairs may lead to chaos. The managers are representative of the</p><p>shareholders and should do everything in the best interest of the shareholders. If they will make</p><p>4 / 22</p><p>the decisions which are not logically understandable then, the shareholders may lose their trust</p><p>in the management.</p><p>The shareholders must not be justified to the shareholder if they are not commercially valuable.</p><p>Whether or not the decisions are profitable these may be communicated to shareholders which</p><p>represent true picture of the decisions breach of CIMA ethical principles.</p><p>6. You have received the following email from Marcus Svenson, Finance Director:</p><p>From: Marcus Svenson, Finance Director</p><p>To: Senior Finance Manager</p><p>Subject: Biomass proposal</p><p>Hi,</p><p>The Board has just heard a presentation by an engineering consultancy concerning a proposal</p><p>to develop a biomass power station adjacent to our North Forest.</p><p>The Board has asked us to put together some thoughts about the merits of this proposal. We</p><p>would proceed on the basis that we would build the power station and sell the resulting</p><p>electricity to the national power generator which has a number of coal-fired power stations, each</p><p>of which is nearing the end of its useful life and the coal has to be shipped in, so we should find</p><p>it relatively easy to guarantee sales. The power generator has indicated that it</p><p>would be</p><p>possible to negotiate a three year contract in the first instance, with the expectation that this</p><p>would be extended by subsequent three year contracts, subject to price and performance.</p><p>We would be responsible for building and operating the power plant and we would also have to</p><p>pay for 50% of the cost of power lines for connecting to the national electricity grid, with the</p><p>other 50% being funded by the national power generator.</p><p>Please draft a briefing paper that I can present to the Board on the following:</p><p>How can we predict whether the share price is likely to increase or decrease if we commit</p><p>ourselves to this project? You should identify the challenges associated with answering that</p><p>question and indicate how we might address them.</p><p>What are the long-term risks associated with future revenues from the sale of electricity? How</p><p>might we manage these?</p><p>Marcus</p><p>Reference Material:</p><p>5 / 22</p><p>Answer:</p><p>6 / 22</p><p>7. Wodd’s Chairman enters your office:</p><p>"I am glad I caught you, I am looking for some advice, but I do not wish to involve your boss at</p><p>this stage, or any of the other executive directors.</p><p>I have been approached by Darrell’s Chairman concerning the possibility of a merger between</p><p>our two companies. I was a little surprised because it has apparently, according to a press</p><p>article, been in talks with at least one of our competitors and I suspect that it is keen to merge</p><p>with any large company that can offer some synergy. I understand that Tabel, another major</p><p>forestry company, has already rejected its proposal.</p><p>I happen to know that Darrell has invested a little too heavily in its new MDF factory. It is state of</p><p>the art, but it has to operate at close to full capacity in order to be economic and Darrell just</p><p>hasn’t got sufficient forestry resources to keep the factory operating at full volume without</p><p>destroying its own forests.</p><p>We are attractive to merge with because we own large forests that can sustain Darrell’s needs.</p><p>We don’t manufacture MDF ourselves, but we have lots of experience of supplying this market</p><p>with raw material. We would divert lots of this output to Darrell’s factory. Darrell believes that it</p><p>would be possible to dominate the MDF industry if it merged with a company such as ourselves.</p><p>The fact that we were quite liquid at the end of last year also helps, because I understand that</p><p>Darrell is having a few cash flow problems.</p><p>Its Chairman proposes a full merger. This will be achieved by the creation of a new parent</p><p>company which will acquire existing equity in both companies through an exchange of shares.</p><p>He and I will head a special nomination committee to select the most suitable Board for the new</p><p>company and then I will step down from the Board while he continues as Chairman of the new</p><p>company.</p><p>Needless to say, this is all highly confidential.</p><p>Do you think that it sounds as if there are potential and achievable synergies between Wodd</p><p>and Darrell?</p><p>Would you regard it as a gross ethical breach to keep this conversation just between the two of</p><p>us for the time being, without warning your boss, until I have had the chance to negotiate further</p><p>with my counterpart at Darrell?"</p><p>Reference Material:</p><p>7 / 22</p><p>Answer:</p><p>8. The Director of Finance, William Seaton, has invited you into his office.</p><p>“This will come as a bit of a shock, but the Board has decided that it would be in our best</p><p>interests to relocate our Head Office from Kayland to the Middle East. We have interests there,</p><p>including a regional office, already. We know that the oil industry is welcome and there are</p><p>several governments which are very open to such foreign direct investment from the West.</p><p>Nothing has been decided for certain, but there are compelling tax advantages to us relocating.</p><p>We would also be subject to slightly less restrictive legal requirements. We can retain our listing</p><p>on the Kayland stock exchange, albeit as a foreign company.</p><p>Things are very much under consideration at the moment, so please don’t tell anybody about</p><p>this conversation.</p><p>I want to check that I have thought of everything at the strategic level before we make an</p><p>irreversible decision to move. I need you to write me a report on the following:</p><p>What are the strategic implications of moving our Head Office from Europe to the Middle East?</p><p>What are the strategic risks that might arise and how might we deal with them?</p><p>I need to have your thoughts soon because the Board is holding a special meeting this</p><p>afternoon.”</p><p>Answer:</p><p>9. Topic 2, Slide Company</p><p>Pre-seen case study</p><p>8 / 22</p><p>You are a senior Finance Manager who works for the Slide Group (‘Slide’). You report directly</p><p>to the parent company’s Board and advise on special projects and strategic matters. You have</p><p>compiled the following facts about the company.</p><p>Slide C company background</p><p>Slide was founded in 1954 by Henry Jones. His family owned a large piece of land on a</p><p>Caribbean Island and a chance discovery revealed the possibility of oil deposits under that land.</p><p>The family registered Slide as a company to raise finance in order to explore this opportunity</p><p>and the subsequent find exceeded all expectations.</p><p>The success of this first venture encouraged the Jones family, who owned 75% of Slide’s</p><p>equity shares at that time, to purchase oil exploration rights and to conduct exploratory drilling.</p><p>The company soon developed considerable expertise in the successful purchase and</p><p>exploitation of</p><p>exploration rights.</p><p>Henry Jones’ family lived in Kayland, a European country. Slide was listed on Kayland’s stock</p><p>exchange in 1965. Henry Jones was Chief Executive Officer (CEO) of Slide until 1976. He was</p><p>replaced by his son, Michael, who served as CEO until 1998. Michael’s nephew, Andrew</p><p>Jones, took over and continues as CEO.</p><p>Over the years, the ownership interest of the founding family has declined. Some of their shares</p><p>were placed on the stock exchange when the company was first listed. Since then, various</p><p>holdings have been sold. By 2015, Andrew Jones retained 10% of the issued equity and a</p><p>further 8% was retained by a number of other relatives.</p><p>Fouce Oil, an Asian company based in Country C and listed on C’s stock market, purchased</p><p>25% of Slide’s equity in 2010. At the time, Fouce Oil made a formal public announcement that it</p><p>would not purchase further equity shares in Slide. In response to this assurance, Fouce Oil has</p><p>the right to select two Non-executive Directors to serve on Slide’s Board.</p><p>The Slide Group has wholly owned subsidiaries operating in seven countries around the world.</p><p>Each subsidiary is responsible for acquiring oil exploration rights in its host country and</p><p>arranging for the necessary work to be undertaken in order to explore for oil.</p><p>Kayland’s home currency is the K$.</p><p>9 / 22</p><p>The oil industry operates on a global basis and virtually all transactions are priced in terms of</p><p>United States Dollar (USD). Strategic case study exam C May 2015 C pre-seen materials</p><p>3 ©CIMA 2015. No reproduction without prior consent</p><p>Oil Exploration</p><p>Crude oil is created by natural processes. Organic matter that is trapped underground and</p><p>compressed while it decomposes can form pools of crude oil over a period of millions of years.</p><p>The time taken for oil to be created through this process means that it is effectively irreplaceable</p><p>once it has been extracted and consumed.</p><p>Natural gas is formed by the same process. Oil wells often have a pocket of gas trapped above</p><p>the well. The pressure from the gas can be used to force oil to the surface once a well has been</p><p>drilled into the rock.</p><p>Natural gas can be collected and distributed as a fuel or it can sometimes be regarded as a by-</p><p>product of oil.</p><p>The process of searching for oil requires an understanding of geology. Geologists have</p><p>discovered that certain types of rock formations are associated with the presence of oil.</p><p>Geologists</p><p>conduct surveys that include the analysis of the fossils that can indicate that an area</p><p>was once rich in the plant and animal life that could have provided the organic matter required</p><p>for the creation of oil.</p><p>Oil fields can be discovered on land or under the sea. Exploration and drilling for oil is possible</p><p>in either setting, with each offering its own challenges.</p><p>If an oil company believes that an area is worth exploring then it must seek permission from the</p><p>owner of the mineral rights, who is not necessarily the owner of that land or stretch of water at</p><p>surface level. In some countries the government owns all mineral rights. In other countries it is</p><p>possible for the surface land and the mineral rights to be owned by different people or entities.</p><p>Mineral rights at sea generally belong to governments. The law relating to ownership of minerals</p><p>under the sea can be complicated and national rights can be a matter for international law, with</p><p>some countries’ rights extending hundreds of miles from the shoreline and others being quite</p><p>restricted.</p><p>10 / 22</p><p>11 / 22</p><p>Onshore oil drilling rig</p><p>Oil companies often supplement the geological surveys with seismic surveys. These involve</p><p>creating a loud bang by generating a small explosive charge. The resulting sound waves</p><p>penetrate the rock layer and create echoes, which are recorded for detailed analysis. The</p><p>echoes can indicate a great deal about the conditions under the rock, including the possible</p><p>presence of oil.</p><p>Seismic survey ship</p><p>Ultimately, the only way to ensure that there are exploitable quantities of oil in a particular site is</p><p>to drill an exploratory well. On land, this would involve building a drilling rig in place. At sea, this</p><p>would require the use of a special ship or drilling rig that would be anchored in place during</p><p>drilling operations. Drilling is always expensive and there is always a risk that the well will either</p><p>turn out to be dry or to contain too little oil to be worth extracting.</p><p>The viability of an oil well can be affected by the price of oil. When oil prices rise it can become</p><p>12 / 22</p><p>financially viable to spend more on extraction and transportation from a well that was previously</p><p>classed as marginal or even unproductive.</p><p>If suitable oil reserves are found then the drilling rig is replaced by a production rig that is</p><p>equipped to bring the oil to the surface and to pipe it to storage tanks or pipelines so that it can</p><p>be collected and taken to the refinery.</p><p>Crude oil must usually be refined before it can be used. The only major exception being that</p><p>some oil-fired electrical power stations can burn crude oil as fuel.</p><p>Oil refinery</p><p>Crude oil is a mixture of different grades of hydrocarbon. These can range from light and volatile</p><p>fractions such as aviation fuel and petrol to heavier fluids such as diesel fuel and lubricants right</p><p>down to heavy tars and bitumen. Refining involves separating crude oil into these different</p><p>grades. Each oil field has its own unique mixture of different fractions, which affects the price.</p><p>For historical reasons, quantities of oil are measured in terms of ‘barrels’. A barrel of oil is</p><p>equivalent to 42 US gallons, which is roughly 159 litres. This measure dates from the times</p><p>when oil was shipped in barrels, but this is no longer the case with the advent of pipelines and</p><p>tankers.</p><p>13 / 22</p><p>The following information is extracted from Slide’s corporate website:</p><p>Slide’s business strategy</p><p>The oil industry distinguishes ‘upstream’ activity from ‘midstream’ and ‘downstream’.</p><p>Upstream activities involve exploring for oil or gas and bringing potentially productive wells into</p><p>production.</p><p>Midstream activities deal with the transportation of oil or gas to the refinery.</p><p>Downstream activities comprise the refining of the oil or the purifying of the gas and its</p><p>subsequent distribution and sale to customers.</p><p>Slide’s principal interest is in upstream activities. The company employs a number of leading</p><p>experts in identifying suitable opportunities for the detection of exploitable oil reserves. It has</p><p>developed its own models for the discovery of oil in areas that were previously considered to be</p><p>of limited interest. As a result, Slide often operates in areas where there is limited competition</p><p>for exploration rights.</p><p>Slide is also good at finding ways to exploit marginal wells that other companies would regard</p><p>as potentially unprofitable.</p><p>Once Slide has brought a well to production then it will sell the resulting crude oil downstream,</p><p>but it tends to sell most of its oil wells so that it can release resources from operational wells and</p><p>concentrate on fresh discoveries. Slide views its strengths as being upstream and so it leaves</p><p>the midstream and downstream aspects of the industry to larger and more general oil</p><p>companies.</p><p>Slide normally buys exploration rights to investigate on its own account. Slide also makes use of</p><p>the arrangements to farm-out or farm-in exploration rights.</p><p>Farming-in and farming-out are common practices in the oil exploration industry. An oil company</p><p>can farm-out by granting another company an agreed share of the revenues from a well. It may</p><p>do so in return for a cash payment, but it is also quite common for the counterparty to this</p><p>arrangement to offer a particular service instead, such as agreeing to conduct the seismic</p><p>survey of the area. This means that both companies share the risks. The farm-out arrangement</p><p>also means that there is less need to fund the costs of exploring and so cash flow is maintained.</p><p>A company might decide to farm-in as a speculative venture in order to participate in a</p><p>successful exploration, or it may offer to farm-in on condition that the primary owner makes use</p><p>of facilities that it owns, such as infrastructure to support exploration or midstream activities. For</p><p>example, the company that decides to farm-in may make it a condition that the venture uses a</p><p>particular subcontractor, in whom it has an interest, to provide the drilling equipment.</p><p>Oil companies often rely heavily on specialist subcontractors to supply equipment and</p><p>operators. That may be because some companies operate in a variety of remote locations and it</p><p>is cheaper to lease equipment that is already in that geographical region. There can also be a</p><p>14 / 22</p><p>need for specialist skills in operating in particular climatic conditions or on particular geological</p><p>structures.</p><p>Slide’s strategy</p><p>Slide’s main strategic priority is to maintain market dominance and become the world leader in</p><p>oil exploration. The company requires continuing investment in new technology and in skilled</p><p>employees.</p><p>Slides’ directors have prepared the following outline SWOT analysis:</p><p>Mission</p><p>Slide aspires to become the most successful oil exploration company in the world, while</p><p>contributing to the wellbeing of people and the environment.</p><p>Slide’s strategic objectives for 2014/15 are:</p><p>Deliver a sustainable business</p><p>Focus on exploration led growth</p><p>Continue to investigate areas for fracking overseas</p><p>Complete 2015 operations safely and without significant negative environmental impact</p><p>Maintain a balanced portfolio</p><p>15 / 22</p><p>Hold a balanced asset portfolio</p><p>Maintain strong financial statements</p><p>Seek growth</p><p>Continue to investigate areas for exploration and diversification</p><p>Our Goals</p><p>Summary of 2014/15 goals:</p><p>Deliver a sustainable business</p><p>Preserve cash for future investments</p><p>Maintain a balanced portfolio</p><p>Grow the reserves and resources base to provide the funding for future growth and cash flow</p><p>Seek operational excellence</p><p>Continue to improve on our operational efficiency</p><p>16 / 22</p><p>Fracking</p><p>Shale rock is found deep underground. This rock contains natural gases and crude oil.</p><p>Advances in technology over the last ten years have meant that this oil and gas</p><p>can be</p><p>extracted from deep underground, even if the shale rock is in a populated area, including</p><p>formations that extend underneath towns.</p><p>In the USA more than a quarter of all gas production comes from shale rock.</p><p>17 / 22</p><p>Extracting these minerals involves a process called ‘fracking’. Fracking breaks up the shale</p><p>rock, which releases the oil and gas. Water mixed with sand and chemicals is forced into the</p><p>rock so that the oil and gas can seep out and be collected.</p><p>The oil and gas industry has dismissed claims that fracking is bad for the environment, although</p><p>it is unlikely that the effects of the process are fully understood. One concern is the volume of</p><p>water which is required in order to force the water mixture through the rock, another is whether</p><p>the whole process could affect the stability of the surrounding rock. The oil and gas companies</p><p>themselves admit in their annual reports that fracking is associated with risks of leaks, spills,</p><p>explosions and environmental damage.</p><p>Widespread use of fracking has reduced the pressure on the USA to import oil and gas. Gas</p><p>prices, in particular, fell in the USA over the past decade. The price of oil has taken longer to</p><p>respond to this new source, but recent decreases in oil prices have been attributed in part to the</p><p>flow of shale oil. Oil and gas from this source has been a huge source of revenue in the USA.</p><p>Kayland’s government has been reluctant to allow widespread fracking due to uncertainty over</p><p>the long term effects, but is interested in the potential revenue stream that could be obtained if</p><p>fracking was successful. There have been protests outside the offices of many of the larger oil</p><p>and gas companies because environmentalists claim that the ecosystem is being damaged by</p><p>fracking and that the long term effects are unknown. However, Kayland’s government has</p><p>issued some licenses in recent months to large oil and gas exploration companies.</p><p>Oil and Gas Reserves</p><p>The most commonly accepted definitions of oil reserves are based on those approved by the oil</p><p>industry in 2007. There are two major classifications of reserves: proven and unproven.</p><p>Proven Reserves</p><p>Proven reserves are those reserves claimed to have a reasonable certainty, at least 90%</p><p>confidence, of being recoverable under existing economic and political conditions, with existing</p><p>technology. Industry specialists refer to this as “P90” or “1P”.</p><p>Unproven reserves</p><p>Unproven reserves are based on the same type of geological data that are used to estimate</p><p>proven reserves. However there are technical, contractual, or regulatory uncertainties that</p><p>prevent the reserves being classified as proven. Unproven reserves are useful for oil companies</p><p>for future planning purposes. There are two classifications for unproven reserves, probable and</p><p>possible.</p><p>18 / 22</p><p>Probable reserves are reserves which have a 50% confidence level of recovery. The oil industry</p><p>refers to them as "P50" as they have a 50% certainty of being produced or 2P (proven plus</p><p>probable).</p><p>Possible reserves are reserves that have a less likely chance of being recovered than probable</p><p>reserves. These reserves usually have at least a 10% certainty of being produced and are</p><p>known as "P10" or “3P” (proven plus probable plus possible). Two of the reasons that reserves</p><p>could be classified as possible are geologists not agreeing on the likelihood of oil and reserves</p><p>not able to be produced at a commercial rate.</p><p>By definition, a reserve must meet four criteria:</p><p>10. Two months have passed since the threatened disruption of the building work on the</p><p>biomass power station. The threat has been resolved and work is again under way on the</p><p>development.</p><p>You have received the following email from Peter Sorchi, CEO:</p><p>From: Peter Sorchi, Chief Executive Officer</p><p>To: Senior Finance Manager</p><p>Subject: Wildlife survey</p><p>Hi,</p><p>I tried to obtain some trustworthy advice from your boss this afternoon, but have come away</p><p>feeling quite unsure that we are on the same wavelength.</p><p>As you know, the law in Marland is very clear concerning the protection of rare species of</p><p>wildlife. Before building work commences on our new power station the Government will send a</p><p>survey team to check for the presence of protected species. The attached article shows how</p><p>sensitive an issue this can be.</p><p>As part of our corporate social responsibility, every one of Wodd’s forestry teams has a small</p><p>team of wildlife officers, whose job is to survey the forest and to identify all natural habitats.</p><p>Trees can grow undisturbed for many years in a commercial forest before they are harvested</p><p>and so natural habitats can become well established. Our wildlife surveys enable us to limit the</p><p>harm done when trees are felled.</p><p>One of Wodd’s wildlife officers in the North Forest has submitted a report on the sighting of a</p><p>rare species of bat in the area that will be cleared for the power station. The report states that</p><p>these creatures tend to be difficult to observe because they only come out very late at night and</p><p>tend to roost in dense forest. This could, potentially, delay the start of work for six months while</p><p>the bats are captured and relocated. Relocating the bats will also be expensive.</p><p>19 / 22</p><p>The Finance Director’s advice was to ask the wildlife officer to change the report, stating that</p><p>the original version was submitted in error and that the sighting occurred in a completely</p><p>different part of the forest, well away from the planned construction site. There is only a small</p><p>possibility that the Government inspectors will find the bats during their own inspection. In the</p><p>event that they do then Wodd can claim that it was unaware of the bats’ presence.</p><p>This whole exchange raises a number of issues for me.</p><p>Should we spend shareholder money on protecting wildlife in our forests?</p><p>What are the implications for our internal control system of the Finance Director asking for this</p><p>report to be changed?</p><p>What are the difficulties in motivating our wildlife officers and how might we overcome these?</p><p>The Chairman is always complaining about how the executive directors are too aggressive</p><p>when it comes to making a profit.</p><p>How might I address that concern?</p><p>I would appreciate your response on each of the above issues.</p><p>Peter</p><p>20 / 22</p><p>Answer:</p><p>21 / 22</p><p>More Hot Exams are available.</p><p>350-401 ENCOR Exam Dumps</p><p>350-801 CLCOR Exam Dumps</p><p>200-301 CCNA Exam Dumps</p><p>Powered by TCPDF (www.tcpdf.org)</p><p>22 / 22</p><p>https://www.certqueen.com/promotion.asp</p><p>https://www.certqueen.com/350-401.html</p><p>https://www.certqueen.com/350-801.html</p><p>https://www.certqueen.com/200-301.html</p><p>http://www.tcpdf.org</p>