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Subject F3: Financial Strategy

9 B,C, E

The other two points are relevant to the GRI’s G4 guidance, not to Integrated
Reporting.

10 C

Guiding principles – these underpin the preparation of an integrated report,
informing the content of the report and how information is presented.

Content elements – the key categories of information required to be included in
an integrated report under the Framework.

Principles for defining report content and principles for defining report quality
relate to the GRI G4 Guidelines, not the Integrated Reporting framework.

11 D

Earnings per share is (profit after tax (PAT)/no. of shares).

Current year PAT is forecast to be [($5m × 1.10) – 1m] × (1 – 0.28) = $3.24
million.

So EPS is $3.24 given that there are 1 million shares in issue.

12 C

Average annual growth is √(5.06/4.57) – 1 = 5.2%.

Current year PAT is forecast to be [($5.06m × 1.052) – 1.85m] × (1 – 0.20) =
$2.78 million.

So dividend (40%) is expected to be 40% × $2.787m – $1.11 million.

13 A, B, E

Regulatory bodies don’t usually have a specific objective to identify fraudulent
activity. Similarly, they don’t necessarily have to achieve an operating surplus.

14 A

Under fair value hedge accounting, the changes in fair value of both the hedged
item and the hedging instrument are recognised in profit or loss each year.

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