Pre-released statement for Paper 1

Key terms

Key Term Definition and Explanation Contextualized Example

For BON, if the total cost to organize one

Average cost is the total cost of production
festival is $350,000 and they produce 3
Average Cost divided by the number of units produced. It
festivals, the average cost per festival would
includes all fixed and variable costs.
be $116,666.67.

A challenge in business refers to any obstacle

BON considers environmental sustainability a
or difficulty that a company must overcome to
significant challenge, indicating they need to
Challenge achieve its goals. Challenges can be internal,
find ways to minimize their festivals' ecological
like operational inefficiencies, or external,
footprint while still hosting successful events.
such as economic downturns.

A company is a legal entity formed by a group

of individuals to engage in and operate a
business—commercial or
Company industrial—enterprise. A company may be
organized in various ways for tax and
financial liability purposes depending on the
corporate law of its jurisdiction.
Before One PLC (BON) is a company that
organizes music festivals across Europe and
has transitioned from a private limited
company to a public limited company to
expand its operations.

Contracts are legally binding agreements

between two or more parties, often outlining
the provision of goods or services in
Contracts
exchange for payment. They define the terms
and conditions of the agreement and are
enforceable by law.
BON has contracts with five farmers to use
their farmland for music festivals, specifying
the fee, duration, and conditions like clean-up
post-festival.

The Covid-19 pandemic refers to the global
outbreak of the novel coronavirus, which led
Covid-19
to unprecedented public health challenges,
Pandemic
economic disruptions, and changes in social
behavior.
Credit cards are financial tools issued by
financial institutions that allow cardholders to
borrow funds within a pre-approved credit
Credit Cards
limit for purchases or cash advances. Interest
is charged if the balance is not paid in full by
the due date.
A director in a company is an individual
elected by shareholders or appointed by other
board members to manage and oversee the
Director company's affairs and strategic direction.
Directors are responsible for making crucial
business decisions and ensuring the
company's long-term success.
Employees are individuals who work for a
company or another person and receive
compensation for their labor. They can be
Employees
full-time, part-time, temporary, or on a
contract basis and are crucial for the
operational success of a business.
The Covid-19 pandemic likely impacted BON
by necessitating the cancellation or
rescheduling of music festivals, introducing
new health and safety protocols, and affecting
the company's financial stability due to
decreased attendee numbers.
Attendees at BON’s music festivals might use
credit cards to purchase tickets online or buy
merchandise and food at the event, offering a
convenient payment method that also helps
BON manage and forecast its revenue.
BON’s directors regard environmental
sustainability as a significant challenge,
indicating their role in steering the company
towards more eco-friendly practices while
organizing music festivals.
BON has 60 permanent employees who
contribute to the planning, organization, and
execution of its music festivals, supplemented
by temporary workers and freelancers to meet
the increased workload during the festival
season.
 Environmental sustainability involves
engaging in practices and decisions that BON faces a challenge in ensuring
ensure the long-term preservation and health environmental sustainability by needing to
Environmental
of the planet's ecosystems. It emphasizes clean up after festivals and minimize the
Sustainability
minimizing the environmental impact of ecological footprint of their events, striving to
activities to conserve resources for future leave farmland as they found it.
generations.

Expansion in business refers to the strategies

BON’s conversion from a private limited
and actions undertaken by a company to
company to a public limited company in 2016
grow its business operations, which can
Expansion was a strategic move aimed at raising finance
include entering new markets, increasing
for expansion, indicating their intention to grow
product lines, or scaling up production
beyond their current scale of operations.
capacity.

BON pays an average fee of $100,000 to

A fee is a fixed charge for a service or
farmers for using their farmland for music
privilege, often agreed upon in a contract or
Fee festivals, compensating the landowners for the
set by an organization for the provision of its
privilege and the impact the event may have
services.
on their property.

Finance refers to the management of money

BON’s decision to become a public limited
and includes activities such as investing,
company was driven by the need to raise
borrowing, lending, budgeting, saving, and
finance for expansion, highlighting the
Finance forecasting. Companies manage their
importance of financial management in
finances to ensure they can cover their costs,
supporting the company’s growth and
invest in growth opportunities, and return
sustainability.
value to shareholders.
 BON relies on freelancers, especially during
A freelancer is a self-employed individual who
the festival season, for roles such as stage
earns money by providing services to multiple
setup, sound engineering, and security,
Freelancer clients. Freelancers are not committed to a
allowing the company to scale its workforce as
particular employer long-term and often
needed without committing to permanent
provide specialized skills or services.
employment costs.

Greenwashing is a deceptive marketing

If BON claimed to be eco-friendly without
strategy used by a company to falsely present
effectively managing waste or reducing its
its products, services, or operations as
Greenwashing festivals' environmental impact, it could be
environmentally friendly. This practice
accused of greenwashing, underscoring the
misleads consumers and stakeholders about
importance of genuine sustainability efforts.
the company's environmental impact.

An interest rate is the cost of borrowing

BON might deal with interest rates when
money or the return on invested funds,
financing its expansion or managing credit
expressed as a percentage of the principal.
Interest Rate card transactions for festival ticket sales,
Interest rates are a fundamental aspect of
influencing the company's financial planning
financial markets, affecting loans, credit
and operational costs.
cards, and investments.

BON’s commitment to environmental

A landfill site is a designated area used for
sustainability includes managing the waste
the disposal of waste materials by burial. It is
generated by its music festivals, with a
Landfill Site a common method of waste management but
significant challenge being how to dispose of
poses environmental concerns, including
waste without relying on landfill sites, thereby
pollution and land degradation.
minimizing environmental harm.
 A line manager is a direct supervisor
responsible for managing employees and
At BON, line managers for the logistics,
resources in a specific department or
security, and clean-up teams are crucial for the
segment of a company. Line managers play a
Line Manager smooth operation of each festival, ensuring
critical role in the operational execution of
that setup, event management, and
business strategies, providing support,
dismantling processes are efficiently executed.
guidance, and performance evaluation for
their team.

BON selects festival locations based on

Location refers to the specific place or
various factors, including accessibility,
position where something is situated or
suitability of the farmland for large-scale
Location occurs. In business, location decisions can
events, and the potential environmental
significantly impact operations, marketing,
impact, demonstrating the importance of
and logistics.
strategic location planning.

A music concert is a live performance by

While BON primarily organizes music festivals,
artists in front of an audience, typically
these events can include multiple music
featuring songs or compositions from various
Music Concert concerts featuring different artists across
genres. Concerts can range from small,
various stages, showcasing a wide range of
intimate performances to large, multi-day
musical talent and genres.
events.

A music festival is an organized series of

concerts, typically held outdoors and
BON organizes five music festivals each year,
spanning several days, featuring
offering attendees a diverse array of music
Music Festival performances by various artists across
genres and experiences in unique locations,
multiple stages. Music festivals often include
from farmland to public-owned parks.
additional amenities such as camping and
food vendors.
 A music genre is a category that identifies
pieces of music as belonging to a shared BON’s festivals cater to a variety of music
tradition or set of conventions. Music genres genres, allowing them to attract a wide
Music Genre
are used to classify music into groups with audience with different musical tastes and
similar characteristics, such as rock, jazz, preferences, enriching the festival experience.
classical, or electronic.

A music performance refers to the act of
performing music by an individual artist or
Music
group in front of an audience. Performances
Performance
can vary in size, style, and setting, from solo
performances to large bands or orchestras.
Each music festival organized by BON
features numerous music performances,
showcasing the talents of both emerging and
established artists, forming the core of the
festival's entertainment offerings.

Before its conversion in 2016, BON operated

A private limited company is a type of
Private Limited as a private limited company, focusing on
business entity that is privately held, with
Company building its brand and solidifying its operations
ownership restricted to a limited number of
(Privately held within the music festival industry without the
shareholders. Shares in a private limited
company) financial pressures and scrutiny that come with
company cannot be offered to the public.
being publicly traded.

A public limited company is a business BON’s transition to a public limited company

Public Limited
organization that has offered shares to the allowed it to raise finance through the sale of
Company
general public and has limited liability. Shares shares to the public, supporting its expansion
(Publicly held
of a public limited company can be bought and enabling more ambitious festival planning
company)
and sold on public stock exchanges. and execution.
 A reservoir is a large natural or artificial lake
In organizing festivals, BON might need to
used as a source of water supply. Reservoirs
consider the availability of water sources such
are critical for managing water resources,
Reservoir as reservoirs, especially for events in remote
especially in areas requiring water for
locations, to ensure adequate water supply for
agriculture, consumption, and various
sanitation, hydration, and other needs.
industrial processes.

Solar power refers to the conversion of

BON could incorporate solar power into its
energy from sunlight into electricity, either
festival operations, such as powering lights
directly using photovoltaics or indirectly using
Solar Power and sound systems, to reduce its
concentrated solar power. It is a sustainable
environmental impact and promote
and renewable energy source that can
environmental sustainability.
significantly reduce carbon footprints.

Temporary workers are employed on a

BON relies on temporary workers and
non-permanent basis, often to meet seasonal
freelancers during the festival season to
demand, complete specific projects, or cover
Temporary handle the increased workload, such as setting
for absent employees. They can be an
Workers up stages, providing security, and managing
essential part of a flexible workforce, allowing
clean-up efforts, ensuring that each event runs
companies to adjust labor costs based on
smoothly and efficiently.
workload.