Page 21 - CIMA OCS Workbook May 2019 - Day 1 Tasks

FINANCIAL REPORTING AND TAXATION (F1) - PRACTICE TASKS

EXERCISE THREE (CORPORATE GOVERNANCE)

UPDATE
VitaMine is currently considering whether it should seek a flotation of its shares on the Eastland
stock Exchange.

TRIGGER

Today you receive the following email from Juliette Goh.

From: Juliette Goh, Finance Director
To: Finance Officer
Subject: Corporate governance.

You may be aware that VitaMine is undergoing a period of expansion in terms of organic growth
through expansion of our customer base and also in terms of seeking to acquire control of a
suitable target company. This is likely to require a substantial sum to be raised in finance, and one
possible source of finance would be to issue shares on the Eastland stock exchange.

I know that there are corporate governance requirements associated with raising finance on the
Eastland stock exchange, but I am not up-to-date with the detail of best practice in this area. It
would save me some research time if you could do some work for me.

Could you produce a set of briefing notes that explains the key elements of corporate governance
that I can present at the next directors’ board meeting? Your briefing notes should also include
steps that VitaMine could take to improve corporate governance.

If the board has an understanding of the issues involved, it can then start to put in place
appropriate policies and procedures that VitaMine could demonstrate to regulators that would
support a future issue of shares on the Eastland stock exchange.

Thanks
Juliette Goh (Finance Director)

TASK

Prepare the briefing notes requested by Juliette Goh.
(Time allowed 30 Minutes)

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