Most Recent CIMAPRO19-CS3-1 Exam Dumps

Press clipping from today's Financial News:

Yesterday's announcement of yet another major oil find by Slide should keep everybody happy. Nobody will be happier than the directors of Fouce Oil, whose continuing ownership of one quarter of Slide's shares continues to confuse industry insiders. Perhaps there are hidden depths to the relationship between Slide and Fouce Oil.

Show Answer Hide Answer

You have received the following email from Marcus Svenson, Finance Director:

From: Marcus Svenson, Finance Director

To: Senior Finance Manager

Subject: Investment opportunity

Hi,

The Board is considering an investment opportunity to buy a forest in Bravador, a country in South Americ

a. This will be a major expansion and will also enable us to diversify into new lines. For example, the forest contains lots of hardwood varieties that we could sell to companies in the double glazing industry or to furniture manufacturers. I downloaded the attached extract from an online encyclopaedia for your information.

The forest that we are planning to buy has not been used for commercial purposes until now. The land belonged to the Government for many years and it has been left to grow naturally. The Government is now keen to sell the land and has agreed that it may be used for commercial forestry purposes.

This investment will enable us to increase our output of softwoods by up to 20% per year, in addition to enabling us to enter the hardwood market.

I need two things from you. I need you to recommend a suitable approach to managing our relationship with the Bravadorian Government. I also need you to identify and explain the political risks that will remain even if we succeed in creating a sound relationship with the Government.

Marcus

Reference Material:

Show Answer Hide Answer

Six months have passed since you first heard of the possibility that Slide might relocate its Head Office to the Middle East.

You have been called into William Seaton, the Director of Finance's office:

''After lots of deliberation, the Board has reached a final decision on the Head Office move. It has been decided that we will relocate to the Middle East.

I need you to draft a report on the following matters:

First of all, we need a strategy for the choice of country to which we are going to relocate. I need you to think about the strategic decisions that will have to be taken so that we obtain the best possible value from the relocation.

Secondly, we have to think about the change management issues with respect to Slide's senior managers. We have a good team of senior managers and Board members and we wish to see them relocate with the company. I need your thoughts on this.

Thirdly, there will be significant change issues for the other staff members. We cannot justify moving all of them to the Middle East, but we will be relying on them to ensure an orderly transition from the current Head Office to the new one. They will be busy for several months, then most will be made redundant. The rest will be offered new jobs with Slide because we will need a scaled down administrative presence in Kayland. Again, I need your suggestions for this.

Finally, we need to put together a transition team to deal with the many administrative issues that the move will create. I need you to suggest a clear job description for the transition team that explains the main operational tasks required, so that the directors can be left free to focus on the strategic management.''

Show Answer Hide Answer

Wodd's Chairman enters your office:

"I am glad I caught you, I am looking for some advice, but I do not wish to involve your boss at this stage, or any of the other executive directors.

I have been approached by Darrell's Chairman concerning the possibility of a merger between our two companies. I was a little surprised because it has apparently, according to a press article, been in talks with at least one of our competitors and I suspect that it is keen to merge with any large company that can offer some synergy. I understand that Tabel, another major forestry company, has already rejected its proposal.

I happen to know that Darrell has invested a little too heavily in its new MDF factory. It is state of the art, but it has to operate at close to full capacity in order to be economic and Darrell just hasn't got sufficient forestry resources to keep the factory operating at full volume without destroying its own forests.

We are attractive to merge with because we own large forests that can sustain Darrell's needs. We don't manufacture MDF ourselves, but we have lots of experience of supplying this market with raw material. We would divert lots of this output to Darrell's factory. Darrell believes that it would be possible to dominate the MDF industry if it merged with a company such as ourselves. The fact that we were quite liquid at the end of last year also helps, because I understand that Darrell is having a few cash flow problems.

Its Chairman proposes a full merger. This will be achieved by the creation of a new parent company which will acquire existing equity in both companies through an exchange of shares. He and I will head a special nomination committee to select the most suitable Board for the new company and then I will step down from the Board while he continues as Chairman of the new company.

Needless to say, this is all highly confidential.

Do you think that it sounds as if there are potential and achievable synergies between Wodd and Darrell?

Would you regard it as a gross ethical breach to keep this conversation just between the two of us for the time being, without warning your boss, until I have had the chance to negotiate further with my counterpart at Darrell?"

Reference Material:

Show Answer Hide Answer

Two months have passed since the threatened disruption of the building work on the biomass power station. The threat has been resolved and work is again under way on the development.

You have received the following email from Peter Sorchi, CEO:

From: Peter Sorchi, Chief Executive Officer

To: Senior Finance Manager

Subject: Wildlife survey

Hi,

I tried to obtain some trustworthy advice from your boss this afternoon, but have come away feeling quite unsure that we are on the same wavelength.

As you know, the law in Marland is very clear concerning the protection of rare species of wildlife. Before building work commences on our new power station the Government will send a survey team to check for the presence of protected species. The attached article shows how sensitive an issue this can be.

As part of our corporate social responsibility, every one of Wodd's forestry teams has a small team of wildlife officers, whose job is to survey the forest and to identify all natural habitats. Trees can grow undisturbed for many years in a commercial forest before they are harvested and so natural habitats can become well established. Our wildlife surveys enable us to limit the harm done when trees are felled.

One of Wodd's wildlife officers in the North Forest has submitted a report on the sighting of a rare species of bat in the area that will be cleared for the power station. The report states that these creatures tend to be difficult to observe because they only come out very late at night and tend to roost in dense forest. This could, potentially, delay the start of work for six months while the bats are captured and relocated. Relocating the bats will also be expensive.

The Finance Director's advice was to ask the wildlife officer to change the report, stating that the original version was submitted in error and that the sighting occurred in a completely different part of the forest, well away from the planned construction site. There is only a small possibility that the Government inspectors will find the bats during their own inspection. In the event that they do then Wodd can claim that it was unaware of the bats' presence.

This whole exchange raises a number of issues for me.

Should we spend shareholder money on protecting wildlife in our forests?

What are the implications for our internal control system of the Finance Director asking for this report to be changed?

What are the difficulties in motivating our wildlife officers and how might we overcome these?

The Chairman is always complaining about how the executive directors are too aggressive when it comes to making a profit. How might I address that concern?

I would appreciate your response on each of the above issues.

Peter

Show Answer Hide Answer