Sustainability Reporting & Management Accounting

Assessment item 2
Sustainability Reporting & Management Accounting
Value: 20%
Due date: 19-Sep-2016
Return date: 14-Oct-2016
Submission method options
Alternative submission method
Task
This assignment continues our consideration of the case firm, Blackmores. This assignment is broken into three parts and the totals marks available is 100.

Part A (70 Marks)

In recent years, directors and CEOs of companies have been placing more importance on holistic reporting of company activities rather than simply reporting what is required by the Accounting Standards, the Corporations Act and other legislation. The Global Reporting Initiative (GRI) is an international not-for-profit organisation that has pioneered and developed the world?s most widely used voluntary Sustainability Reporting Framework.
www.asx.com.au/documents/public-consultations/global-reporting-initiative-and-sba-submission-15Nov13.pdf

In 2013, the fourth iteration of the Sustainability Reporting Framework guidelines were released. These can be accessed via the link below.
www.globalreporting.org/resourcelibrary/GRIG4-Part1-Reporting-Principles-and-Standard-Disclosures.pdf

As explored in Assessment 1, Blackmores is one of Australia?s largest healthcare businesses. Blackmores has been conscious to implement a range of strategic and operational initiatives to enhance the sustainability of their operations and has been moving towards providing greater transparency in regards to their environmental impacts.

Required:

With specific reference to Section 5.1 of the Sustainability Reporting Guidelines of the GRI, your task is to write a report that:

Describes the key features of Blackmores (i.e. size, products, history, locations of operation) and provides an overview of the environmental and social impacts (positive and negative) of the firm?s operations (15 Marks).
Applies gap analysis to analyse how fully applying the GRI guidelines might alter the information presented by Blackmores within their Annual Report and within other sources provided through their corporate website (25 Marks).
Evaluates whether and how complying with the GRI guidelines would benefit potential investors, shareholders and other stakeholders of Blackmores (20 Marks).

The report is to be 2,000 ? 2,500 words in length and presented in a standard business report format comprising an:

Executive summary
Table of contents
Introduction
Body
Conclusion.
(marks available for academic writing: 10 Marks)

This assignment requires individual research. The links below are provided to get you started on your research. Please note you may be required to register to access the materials.
www.globalreporting.org/network/regional-networks/gri-focal-points/focal-point-australia/Pages/default.aspx
www.globalreporting.org/information/sustainability-reporting/Pages/default.aspx

Part B (20 Marks)

It was recently reported that Blackmores had acquired Byron Bay firm Global Therapeutics for $23 million. This acquisition was part of Blackmores? strategy to increase their share of the Chinese herbal medicine market.

Required:

Identify the likely major costs associated with the ongoing operations of Global Therapeutics (2 Marks).
Estimate the cost behaviour (fixed, variable or otherwise) of each of the major costs identified above in part 1 (2 Marks).
Given your understanding of the cost behaviour of the major costs associated with the ongoing operations of Global Therapeutics, critically evaluate whether the use of break-even analysis would be a useful and reliable screening tool for Blackmores as they assessed the desirability of the Global Therapeutics acquisition (6 Marks).
Develop a balanced scorecard that could be used to evaluate the success of Global Therapeutics. For each perspective, identify two objectives and include a range of financial and non-financial measures and goals. Discuss the key features of your scorecard and the reasons behind your chosen measures (10 Marks).

Part C (10 Marks)

In 2015, Blackmores opened its first flagship Retail Store in Bondi. The following discussion presents information in regards to a hypothetical new concept in which Blackmores will fit-out their new flagship store with a ?Recharge Bar?. Through this bar, customers will be able to purchase protein shakes, power-up vitamin juices and recharge bars. The following table presents sales mix, selling price and cost per unit forecasts for these three product lines.

Protein Shakes
Power-up Vitamin Juices
Recharge Bars
Expected Annual Sales (units)
15,000
15,000
7,000
Selling price
$7.80
$9.50
$5.60
Ingredient cost
$3.10
$3.60
$2.75
Packaging cost
$0.35
$0.35
$0.05

Staffing and facilities related costs associated with running the Recharge Bar are expected to total $117,000 per annum. The installation of the Recharge Bar is expected to increase the firm?s marketing costs by $28,000 per annum.

Required:

Calculate the number of protein shakes, power-up vitamin juices and recharge bars that will need to be sold to:
break-even, and
achieve an after-tax profit of $150,000 (provide workings) (3 Marks).
Prepare a memo which suggests a number of possible strategic initiatives that Blackmores could implement in relation to the Recharge Bar concept to enhance the break-even point and/or annual profit. These initiatives could impact the firm?s sales mix, selling prices, variable or fixed costs. Provide workings which illustrate how your proposed initiatives could influence the break-even point and forecast profit (7 Marks).

Rationale
Assessment Task 2 is designed to assess your understanding of the learning outcome ?Explain and evaluate the concepts behind the management decision processes associated with the efficient allocation of business resources? covered by Topics 5, ?Social and Environmental Accounting?, and Topic 6, ?Management Accounting and Professional Ethics?.

Marking criteria

CRITERIA High Distinction (HD) 85% to 100% Distinction (DI) 75% to 84% Credit (CR) 65% to 74% Pass (PS) 50% to 64%
Description of key features of the Super Retail Group and overview of the environmental and social impacts (positive and negative) from the firm?s operations.
Overview is comprehensive, covering all key features of the firm and the firm?s social and environmental impacts. Overview is comprehensive, covering most of the key features of the firm and the firm?s social and environmental impacts. Overview is moderately comprehensive, identifying the major facets of the firm and the firm?s social and environmental impacts. Overview is adequate, identify major facets of firm and the firm?s social and environmental impacts with minimal depth.
Use gap analysis as an accounting and finance concept to interrogate financial and non financial data in an annual report and other sources. Interpret the results of the gap analysis and discuss any alterations in information that might result. Gaps in information presented are identified and evaluated with reasoning for their inclusion or exclusion, supported by valid references. Elements of the framework are evaluated with reference to how they are used in guiding the inclusion or exclusion of information. Gaps in information presented are identified and discussed with reasoning for their inclusion or exclusion, supported by valid references. Elements of the framework are analysed with reference to how they are used in guiding the inclusion or exclusion of information. Identifies gaps in reporting of company activities with reference to the Sustainability Reporting Framework. Interprets results with comparison of possible alterations in reporting of information. Identifies gaps in reporting of company activities with reference to the Sustainability Reporting Framework. Some attempt to interpret results with description of possible alterations in reporting of information.
Evaluate the usefulness of compliance with the Sustainability Reporting Framework as a decision making tool for stakeholders Discusses how the tool benefits investors and stakeholders, supporting their reasoning with valid arguments, fully referenced. Discusses the usefulness of compliance with the framework with explanation of how it is used to benefit stakeholders in the decision making process, fully referenced. Describes and explains the usefulness of compliance with the framework, fully referenced. Explains how compliance with the framework assists as a decision making tool for investors and stakeholders, fully referenced.
Describes and applies management accounting tools and techniques to support the management of Blackmores to implement initiatives which promote organisational performance. Discusses and applies a range of management accounting tools to support management. Calculations are completely correct and analysis is supported with detailed and valid arguments and examples. Fully referenced. Discusses and applies a range of management accounting tools to support management. Minor calculative errors. Analysis is supported with valid arguments and examples. Fully referenced. Discusses and applies a range of management accounting tools to support management. A small number calculative errors. Analysis is supported with valid arguments. Fully referenced. Discusses and applies a range of management accounting tools to support management. Calculations are mostly correct. Limit support is provided for analysis Fully referenced.
Academic Writing Excellent written expression and very clear articulation of ideas and concepts. Superior grammar and spelling skills. References presented show evidence of significant research and are used accurately.
A professional report structure is adopted with an outstanding executive summary, introduction, body, and conclusion. A table of contents is provided and headings and sub-headings are well defined. Consistently clear and concise expression of ideas. No spelling errors and only minor grammatical errors. References presented show evidence of significant research and are used accurately.
A professional report structure is adopted with a high quality executive summary, introduction, body, and conclusion. A table of contents is provided and headings and sub-headings are well defined. A satisfactory standard of expression. Expression of concepts is clear and concise. Very few spelling and/or grammar errors. Several references are presented and used accurately.
A professional report structure is adopted with an effective executive summary, introduction, body, and conclusion. A table of contents is provided and headings and sub-headings are well defined. Some inconsistency in sentence structure. Clarity of expression could be enhanced by some revision. Some spelling errors and/or poor grammar. At least two references included and used appropriately.
A professional report structure is adopted with a satisfactory executive summary, introduction, body, and conclusion. A table of contents is provided and headings and sub-headings are used to a satisfactory level.

Presentation
Your assignment must be submitted as a standard Word or PDF report and presented as a standard business report including an executive summary, a table of contents, an introduction and a conclusion. Please use 12 point font and 1.5 line spacing when preparing your report. The gap analysis must be presented in an appendix. Please ensure that you use correct referencing.

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