Welcome to

ACCA’s Practice to Pass Session

March 2020 Attempt

(Day 2)

Pakistan & UAE

WhatsApp +971 555 245 672
 Day Wise Plan
DAY 2:
• Exam Technique:
o Time Management

• Topics:

o Social & Environmental Factors Dec 2018 (Hilite Hotels) Q2A

o PESTEL Mar / Jun 2019 (SmartWear) Q1A

o Porter 5 Forces Specimen Paper 1 (DCS) Q1A i

o Integrated Reporting / 6 Capital Specimen Paper 1 (DCS) Q1A ii &

Dec 2018 (Hilite Hotels) Q2B

• Professional skill :
o Evaluation skill, communication skill

• Formats:
o Press release, briefing paper, report
 Technique# 2:
Time Management
 Reading & Planning Time
• Normally 3 Exhibits contains information to be used in multiple questions
o These are time consuming Exhibits

o First read these Exhibits and do your marking and referencing

o E.g. includes Board Minutes, Annual Reports, Website, Newspaper Articles,

Interviews

• And 3 Exhibits contains information to be used in one particular question

(i.e. 1 to 1 Exhibit)
o Just take a quick look (say 1-2 minutes)

o Read these AFTER you have completed reading your main Exhibits

o E.g. includes financial projections, any specific data or analysis, etc.

• What to do if Reading Time is Up?

 Writing Time

• How to Keep Track Of Your Time

o Write ending time in front of each question as soon as you receive the question Paper

o Keep an eye on the watch and strictly follow the ending time mentioned against each question

• Length of Your Answer

o 5 lines per total mark (excluding format)
[

• Number of Points
o 1 point = 2 marks

o Exception:

▪ If weakness plus recommendation is required then 1 point = 3 marks

▪ If weakness plus implication plus recommendation is required then 1 point = 4 marks

TIME

10
MARKS

LENGTH # OF POINTS
• What To Do If Writing Time Is Up

o Leave some lines and move to next question

o If in the end you are left with time then you can always
come back and complete
 Today’s Topics
Social & Environmental Footprint
PESTEL
Porter 5 Forces
Integrated Reporting & 6 Capital

Professional skills: Formats:

✓ Evaluation skill ✓ Press release
✓ Communication skill ✓ Briefing paper
✓ Report
 Social Footprint
Employees Customers / Suppliers Society / Community

▪ Staff turnover ▪ Quality of product ▪ Job opportunities

▪ Staff training ▪ Product safety ▪ CSR

▪ Working conditions ▪ Personal data & privacy

▪ Reasonable pay scales ▪ Fair business practices Fair

play with suppliers
▪ Gender equality

▪ No discrimination

▪ Health and safety

▪ Diversity
 Environmental Footprint
▪ Carbon footprint ▪ Spillage

▪ CO2 Emissions ▪ Use of scarce resources (e.g. oil, trees, etc.)

▪ Recycling ▪ Green

▪ Pollution ▪ Environmentally friendly products

 Topic:
Social & Environmental Footprint

SBL December 2018: Hilite Hotels

Q2A
 P E S T E L (Country / Macro Env)
Political: Technological:
• Government • Plant & machinery
• Govt policies • Skilled workers
• Govt Subsidies • IT / technology
• Govt approvals / license • Internet / online
• Taxes • Roads and infrastructure
• Political stability
Ecological:
Economy: • CO2 Emission
• Economy • Carbon footprint
• Economic growth • Recycling
• Economic downturn • Pollution
• Recession
Legal:
Social: • Laws
• Prosperous developed nation • Regulations
• Standard of living • Legislations
• Educated population • Patent / trademark / copyright
• Unemployment

▪ Favorable or unfavorable
Mention FAVOURABLE or UNFAVOURABLE
▪ Over lapping points
 Porter 5 Forces (Industry / Micro Env)
Bargaining power of customer:
• Words to look for:
o Customers
o Consumers

• Factors to decide HIGH or LOW:

o Size of customer (e.g. large global customer)
o Any uniqueness?
o Customer willing to pay any premium?

Mention HIGH or LOW

Bargaining power of supplier:
• Words to look for:
o Supplier
o Vendor
o Manufacturer

• Factors to decide HIGH or LOW:

o Size of supplier (e.g. large global supplier)
o Any switching cost
o Are we willing to pay any premium?
Threat of new entrants:
• Look for Barriers to Entry:
o Patents
o Govt approvals
o Govt license

• If Barrier is High, then Threat is LOW (i.e. opposite relationship)

Threat of Competition:
• Words to look for:
o Competition Mention HIGH or LOW
o Rivalry
o Number of competitors
o Market share

Threat of Substitute Product:

• Words to look for:
o Alternate
o Alternatives
 Strategic Position Analysis
Includes 3 things in your answer:

1. External Factors
a. PESTEL

b. Porter 5 Forces

2. Internal Factors
a. Human resource

b. Financial resource

c. IT

d. Brand
 Integrated Reporting / 6 Capital
Difference Between Financial Statements and Integrated Report
Financial Statements Integrated Reporting
Focus on financial information Focus on overall business performance
Focus on historic performance Focus on future strategies
Focus on share capital Focus on 6 capitals
Less emphasis on social and environmental Integrates social and environmental aspects in
aspects strategies and decision making
Short term / annual results Long term value creation

Role (Definition) of Integrated Reporting

An Integrated Reporting is a concise communication demonstrating the link between:

▪ Governance (Mission / objectives)

▪ Strategy
▪ Financial performance; and
▪ Social and environmental context

And shows how organization creates ‘value’ in short, medium and long term.
Contents of An Integrated Report
▪ Organization’s overview

▪ External environment (PESTEL / P5F)

▪ SWOT analysis

▪ Future strategies

▪ 6 capitals
The Six Capitals

▪ Financial Capital
o Overall financial performance and position of the company
o Sources of funds for future strategies

▪ Manufactured Capital
Tangible assets
o Non-current assets such as plant and machinery
o Current assets such as inventories

▪ Intellectual Capital
o R&D and innovation
o Brand
o Patents
o Technical / skilled staff
▪ Human Capital
Employee matters
o Knowledge, skills and experience of employees
o Productivity and efficiency
o Staff turnover

▪ Social Capital
Relationship and trust built with key stakeholders i.e.
o Customers
o Suppliers
o Communities
o Government

▪ Natural Capital
Environmental matters
o Carbon footprint / Green
o CO2 Emissions
o Recycling / Disposal of waste products

o Pollution / Spillage
o Use of scarce resources (e.g. oil, trees, etc.)
Advantages Of Integrated Reporting
▪ As IR is voluntary disclosure, it enhances organization’s image and reputation for transparency
▪ Effective communication with all stakeholders
▪ Integrates social and environmental aspects in strategies and decision making
▪ Focus on 6 capitals of the organization
▪ Demonstrate how organization creates value
▪ Better understanding and decision making by shareholders, stakeholders and potential investors
▪ Attracts investment at a lower cost of capital (due to availability of greater information)
▪ Gives competitive edge over other companies

Disadvantages
▪ Too much commercial information / strategy is disclosed
▪ Valuation of 6 capitals is subjective in nature
 Topic: PESTEL

SBL Mar/Jun 2019: SmartWear Clothing

Q1A
 Topic: Porter 5 Forces

SBL Specimen Paper 1: DCS

Q1A i
Topic: Integrated Reporting / 6 Capital

SBL Specimen Paper 1: DCS

Q1A ii
Topic: Integrated Reporting / 6 Capital

SBL December 2018: Hilite Hotels

Q2B
 Professional Skills
Analysis
Thoroughly review given information and investigate reasons of the current status

Hint: Explain and comment in detail on a particular set of info / data and question appropriateness of any
assumptions used

Evaluation
Assess proposals or arguments in a balanced way (i.e. giving both pros and cons) so that it could be used for
decision making. Demonstrate professional judgement

Hint: Mention both pros and cons

Communication
Express clearly and convincingly keeping in mind the target audience, for e.g. are you writing to Chairman, NED,
Finance Director, HR Director, Shareholders, General Public, etc.

HINT: Use appropriate format for Report, Briefing Notes, Presentation Slides, Letter or Press Release wherever
required
 Commercial Acumen
Understanding of overall business and external factors. To be able to able to give commercially sound comments
and recommendations.

HINT: Use words like opportunities, threats, customers, competitors, market-share, risks, etc.

Scepticism
Ask questions or challenge someone’s views or opinions with facts and figures in order to present the complete
issue picture or issue

Hint: Adopt a questioning tone in your answer, using words like ‘I disagree’, or ‘its incorrect’, or ‘its not clear’ or
‘should be further investigated’