The Outline Of Pwc Value Frameworks Commerce Essay

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Value reporting Framework approach was introduced by PWC. The need of this approach arises because annual reports were not meeting the needs of companies. So PWC introduced Value Reporting Framework Approach for shareholders and for stakeholders.

This report gives a detail picture of the performance of companies. Not only financial but non financial as well.

Value Reporting Framework comprises of four categories

Market overview describes the competitive environment, regulatory environment and macro environment of companies. We will describe each of these elements one by one.

Competitive Environment

All those forces and elements. That affects the current and future environment of business. For instance, market position and competitors etc.

Regulatory Environment

All those authorities, which imposes rules and regulations on business and companies. Such as IASB standards or Government.

Macro Economic Environment

All those current and future elements, that have realistic influence on company's performance for instance, interest rate, economic situation, demographic affects.

Regardless of so much importance of market overview information, research reveals that this information often not presented properly so it's hard to get clear idea from this information. Companies often excuse by saying that, if anyone keen for this information can collect it from other sources.

2. STRATEGY & STRUCTURE

Goals and Objectives

A well written statement explains the company short term and long term goal.

Governance

It tells how company resolves the authority issues.

Risk Framework

It tells the way how group control different risks

Organizational Design

It tells the way how current organization structure maintains overall strategy and how their strategy makes it possible to compete. Moreover, it tells how these strategies would be helpful for further growth.

3. MANAGING FOR VALUE

Besides the strategies companies have to explain to investors about their supply chain. i.e. how they give value to their brand, what efforts they make to maintain the image of their product, how they deal with customers and their suppliers. Companies have to explain all these information so it would be easy for investors to make decision with help of this information.

4. PERFORMANCE

Economic

Internal and external assess of value making that stress the importance of cash flow returns above the cost of capital as determined by the market

Operating

This information is mostly about non financial consequences

Environmental, social & ethical

It tells about the strategies of companies for sustainable environment.

Segmental

It tells entity business performance by geography, business unit or product area, spotlight on the internal control of value creation and operating performance This class of the Reporting Framework focus internally and externally. Risk, Return and Growth within the Performance category have been given little attention.

The Corporate Reporting Framework does that by approaching performance in a more diverse way.

Significant feature of performance by major individual business segments is that, how business focuses and deals with environmental, social and ethical issues. While the Framework still have important role in financial performance, it doesn't restricted focus of the reporting model.

(2)

Good practices in Corporate Reporting' document for 2 public listed companies

Car Max

Insurance Australian Group

Trends 2009

Good Practices in Corporate Reporting

CarMax, Inc. the US used-vehicle retailer provides a clear overview of its market along with its strengths and its strategy for growth. It provides a "unique consumer offer" through the business' key processes and systems, such as financing and purchasing.

Market over view

Competitive Environment

CarMax is the nation's largest retailer of used cars, based on the 345,465 used vehicles we retailed during the fiscal year ended February 28, 2009. As of the end of fiscal 2009, we operated 100 used car superstores in 46 metropolitan markets. We sell more than seven times the number of used cars per store compared with the average franchised dealer based on our selection, quality and customer service advantages.

The U.S. used car marketplace is highly fragmented and competitive. The franchised auto dealers are our primary competitors who sell the majority of late-model used vehicles. We believe our customer-friendly, low-pressure sales methods are points of competitive differentiation.

Our principal competitive advantages in used vehicle retailing:

High degree of customer satisfaction

Competitively low prices

Most popular makes & models available both on site and via our website: carmax.com

Quality of vehicles

Proprietary information system

Locations of our retail stores

Strategy & Structure

Goals & objectives

Compelling Market

Skilled Dedicated People

Unique Consumer Offer

Strong Results

Solid Growth Opportunity

The collateral risk - the risk of the vehicle - is minimized by the consistent, high quality of cars, large percentage of vehicles covered by extended service plans, and the consistency of the relationship between wholesale and retail values for CarMax vehicles.

The "intermediary" risk - the risk introduced by the person between the customer and the finance source - is eliminated with the price of all components fixed, value-oriented, and non-negotiable at CarMax.

Managing for value

Each store's inventory is tailored to the buying preferences of the customers in that store's trade area.

Extended service plans are offered on every vehicle that provide up to 6 years of coverage.

All customers are welcomed to the stores regardless of age, economic status, nationality, colour, or beliefs.

Unique corporate culture and maintain good employee relations. No associate is subject to a collective bargaining agreement. We focus on providing our associates with the information and resources they need to offer exceptional corporate service.

Performance

CarMax has grown from one store in Richmond to 100 stores across the country through hard work and dedication. Its operations are conducted through subsidiaries.

Its operations are in geographically diverse locations around US. Its operations deal with the management contracts, and other fees and the operation of the stores.

Strict mechanical, electrical, and safety standards are compulsory for every used vehicle.

Every used vehicle is put through a thorough, 125-point inspection and needed repairs are made and the car is thoroughly detailed inside and out.

Funding programs that show measurable results and benefits to the community and supporting organizations that are fiscally responsible, transparent, and well managed

Insurance Australian Group Limited (IAG) focuses on four fundamental principles to remain in the competitive insurance industry. Paying the claims, understanding and pricing the risk, managing cost and reducing the risk are considered as IAG`s specific agenda to run a business. IAG explains the long term plans as a key to generate reliable and steady return to enhance shareholder and costumer values.

Market over view

Competitive Environment

IAG demonstrates its strength and capabilities by pointing out its significant performance which ended the $261 million net loss in 2008 to the $181 million net profit after tax.

Strategy & Structure

Goals & objective

IAG illustrates its goals to increase shareholders` value by the highest shareholder return in the market, to attain "return on equity of at least 1.5 times weighted average cost of capital", to improve its financial strength and to be qualified as an AA company.

2008

$m

2009

$m

Gross Written Premium

7,842

7,793

Net Earned Premium

7,233

7,295

Net Claims Expense

5,370

5,155

Return on Equity

4.10%

5.9%

Insurance Margin

7.1

5.4

Managing for value

IAG believes that showing the profitability, providing the secured financial back up for the costumers and demonstrating a respectable reputation in the society will lead to absorb costumers trust.

IAG mentions that the business demands customers` satisfaction as well as their trust. IAG continues that the company will not be able to satisfy its customers unless it knows the customers` needs and puts an effort to meet their needs. Thus the best level of customer services is been provided.

2009

2008

2007

2006

Customer satisfaction

84

84

83

80

Performance

IAG submitted its mission to sustainable environment by reducing carbon dioxide (CO2) by 11.8%. It also increased its recyclable wastes. Moreover, IAG emphasizes on the importance of the employees. It is revealed its significant performance to satisfy its employees` needs such as: Training, work safety, legal resalable salary and gender with regarding to ethics.

VRF- Value Analysis Matrix

Car Max Inc. Australian Insurance Group

Market Overview

Competitive environment

one of the "100 Best Companies to work For" by Fortune magazine for the sixth consecutive year (Jan 2010).

The largest retail segment of the economy, used vehicles comprise nearly half of the U.S. auto retail market.

Every used car is unique, reflecting differences in mileage, condition and age unlike new cars. This uniqueness provides CarMax the opportunity to add value.

Showing its strength and capability to be counted on by covering the net loss in 2008 and showing the profitability in 2009.

Regulatory environment

Most of its reports are based on Corporation Act 2001 Australian Accounting Standards (AASBs).

Macro environment

The Australian Prudential Regulation Authority (APRA) revealed proposed extensions to APRA`s prudential standards for general insurers to remuneration.

Strategy & structure

Goals and Objectives

Compelling Market

Skilled Dedicated People

Unique Consumer Offer

Strong Results

Solid Growth Opportunity

Top quartile total shareholder return.

Return on equity at least 1.5 times weighted average cost of capital.

Expand the organisation within the Australia and oversees

Maintain a 'AA' category rating

Building a resilient, engaged and high performing workforce.

Governance

Our code of business conduct contains provisions relating to honest & ethical behaviour, including the handling of conflicts of interest between personal & professional relationship, corporate opportunities, the handling of confidential information, fair dealing, protection and proper use of company assets, compliance with laws & other matters.

Attaining the highest level of corporate governance to ensure the future sustainability of the organisation and long term value for its shareholders.

Risk Framework

The collateral risk - the risk of the vehicle - is minimized by the consistent, high quality of cars, large percentage of vehicles covered by extended service plans, and the consistency of the relationship between wholesale and retail values for CarMax vehicles.

The "intermediary" risk - the risk introduced by the person between the customer and the finance source - is eliminated with the price of all components fixed, value-oriented, and non-negotiable at CarMax.

The risk is known as an undividable part of the business. Thus it explains that managing the risk is rather than eliminating all risks. IAG expects from risk management to identify, understand, assess the risk in different levels of occurrence, manage and monitor it.

IAG uses different ways to approach its principles as listed below:

1. Set of assessment question which is provided every 6 months.

2. Report from CEO/ CFO.

3.report from business group executive

4. Report from internal audit.

5. Report from risk managing group.

Organisational design

1. Internal: board, group management committees, CEO & executive team, group actually, group risk, corporate treasurer and group legal.

2. External: customers, shareholders, community and regulators.

Managing for Value

Financial Assets

1. Raising net asset from $4351 m in 2008 to $4836 m in 2009.

2. Decreasing the total liability from $15029 m in 2008 to $14479 m in 2009.

3. Repurchasing of €144 m of GBP subordinated term notes.

Physical Assets

Increasing the property & equipment from $291 m in 2008 to $308 m in 2009.

Customers

Each store's inventory is tailored to the buying preferences of the customers in that store's trade area.

Extended service plans are offered on every vehicle that provide up to 6 years of coverage.

All customers are welcomed to the stores regardless of age, economic status, nationality, colour, or beliefs.

1. Communicating with the customers as much as possible trough customer services.

2. Providing sufficient and clear information for customers.

People

Offering paid parental leave options, carers' leave, shorter working year and study leave options to give right choice to the right one.

Investing in talent development.

Increasing employee benefits provision from $243 m in 2008 to $321 m in 2009.

Trying not to exclude potential employee based on their genders.

Providing good training for employee.

Guiding and helping the employees to recognise and grow their talents and skills.

Culture

Unique corporate culture and maintain good employee relations. No associate is subject to a collective bargaining agreement. We focus on providing our associates with the information and resources they need to offer exceptional corporate service.

Building a culture that rewards performance, integrity, respect and a considered sense of urgency.

Innovation

Working from home options.

The Carbon Disclosure Project (CDP).

Brand & intellectual assets

IAG is the name behind some of the most trusted and respected insurance brands in the regions in which it operates. It operates brands across three continents and provides a wide range of general insurance products to protect the homes, lifestyles and businesses of its millions of customers such as: NRMA Insurance, SGIC, SGIO, CGU, Swann Insurance, and The Buzz.

Processes & Supply chain

More than half the cars CarMax retail is purchased directly from customers, an excellent source of quality, high-demand vehicles. Customer vehicle purchases that do not meet its retail standards are sold at its own in-store auctions, which are an economic and efficient means of disposal.

Performance

Economic position

2009

2008

Gross Written Premium

$7,842

$7,793

Net Earned Premium

$7,233

$7,295

Net Claims Expense

$5,370

$5,155

Return on Equity

4.10%

5.9%

Insurance Margin

7.1

5.4

Operating

CarMax has grown from one store in Richmond to 100 stores across the country through hard work and dedication. Its operations are conducted through subsidiaries.

Its operations are in geographically diverse locations around US. Its operations deal with the management contracts, and other fees and the operation of the stores.

Increasing the good will from $1875 m in 2008 to $1875 m in 2009.

2. Satisfying 84% of the customers.

Environmental, Social, Ethical

Strict mechanical, electrical, and safety standards are compulsory for every used vehicle.

Every used vehicle is put through a thorough, 125-point inspection and needed repairs are made and the car is thoroughly detailed inside and out.

Funding programs that show measurable results and benefits to the community and supporting organizations that are fiscally responsible, transparent, and well managed

Environmental

Reducing the production of carbon dioxide (CO2) by 11.8%.

Increasing the recyclable wastes by 1119 tons in 2009.

Social

Following the rule either of common wealth or state legislation.

Investing in the community.

Ethical

Committing to admit clarified ethic cods in any level of company.

Segmental

Mega Superstores

Standard Superstores

Satellite Superstores

1.Business Segment Primary reporting 9 July 2008

2.Geographical Segment Secondary reporting

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