MAC4863 Assignment 2 (ANSWERS) 2025 - DISTINCTION GUARANTEED

Well-structured MAC4863 Assignment 2 (ANSWERS) 2025 - DISTINCTION GUARANTEED. (DETAILED ANSWERS - DISTINCTION GUARANTEED!)..... Question 1 (25 marks) (This question comes from the Jan/Feb 2025 supplementary exam) Aero Ltd is a chain of grocery stores. Aero Ltd was founded in 1927 by a group of ethically oriented investors. Its mission was stated as "...to sell the best quality groceries at the lowest prices." Due to their religious values, the original investors prohibited Aero Ltd from selling any alcohol or tobacco goods. This restriction mirrored what was considered responsible corporate conduct at the time. However, this restriction was informal and did not exist in Aero’ss mission statement, memorandum, or articles of association. Aero Ltd was listed on the Johannesburg Stock Exchange (JSE) in 1929. By 1967 Aero Ltd had opened 100 stores. Its current market value is R950 million. Its current shareholders consisted of: Shareholders % share of capital No of investors Motive for investing Aero Ltd charitable trust 10% 1 Uses funds to benefit the local communities Aero Ltd employees 10% 5080 Part of remuneration Aero Ltd directors 2% 6 Part of remuneration Pension Funds 15% 2 Long-term security for pensioners Investment Trusts 15% 4 Medium/long-term investors Private Equity Fund 25% 1 Seeks short-term profits Private Bank 20% 1 Aero Ltd is a client Private Investors 3% 15 000 Various reasons In order to compete, Aero Ltd has decided to become a 24/7/365 grocer. Aero Ltd has found that many of its customers want to buy alcohol and tobacco products, particularly those customers using its shops between 2 am and 6 am. The Board has decided to implement a new retailing strategy and sell alcohol and tobacco products. Aero Ltd believes that this will give a major boost to its profits. However, one of its shareholders the Aero Ltd Charitable Trust is not happy with this decision and stated that this goes against Aero‘s core principles. Downloaded by samay pipper () lOMoARcPSD| MAC4863/A02 5 REQUIRED: (Students must refer to the above scenario in their answers) 1.1 Using Mendelow's matrix, evaluate the levels of power and interest of Aero'ss shareholders in the decision to sell alcohol and tobacco. You must justify your evaluations. (15 marks) 1.2 Advise Aero’ss Board of THREE other stakeholders who would be interested in the decision to sell alcohol and tobacco apart from the one’s discussed above in the scenario. You should state the reason for the interest of these stakeholders. (6 marks) 1.3 Advise Aero'ss Board on how it could respond to the increasing demands by society for responsible business practice. (9 marks) [30 marks] Downloaded by samay pipper () lOMoARcPSD| 6 Question 2 (50 marks) Troubles Mount With Chinese Mining In Zimbabwe Farai Maguwu is the founder and executive director of the Centre for Natural Resource Governance, a Harare-based organisation that seeks to defend, protect and support communities impacted by mining. His center summed up the state of affairs in a September 2024 report titled, “Investments or Plunder: An Analysis of Chinese Investments in Zimbabwe’s Extractive Sector.” “Chinese mining ventures have led to widespread environmental degradation, disregard for the cultural rights of host communities, and, in many cases, the violation of the country’s labour laws, often with apparent impunity,” the report stated. Maguwu has collected stories and testimonies throughout Zimbabwe for years. Some are heartbreaking, some disturbing, and each is accompanied by a call to action. The common thread is Chinese mining operations and their destructive effects on local communities and the environment. Complaints are mounting in Zimbabwe, where Chinese mining companies have a well-documented history of labour, environmental and human rights abuses. It’s the same story across the continent, as China has been accused of using its Belt and Road Initiative to tap into vast reserves of cobalt, copper, gold, lithium and other minerals. More African countries are now drawing attention to the negative impacts of exploitative and illegal Chinese mining, as well as the environmental and socioeconomic problems and the surge in the local militancy and violence that have accompanied them. “Looking at what is happening on the ground in Africa right now — we see China’s imperialism, we see human rights and the environment both at high risk, and we see rampant corruption and a lack of good governance,” Amani Matabaro Tom, a fellow at the Harvard Kennedy School’s Carr Center for Human Rights Policy, wrote in January. Downloaded by samay pipper () lOMoARcPSD| MAC4863/A02 7 Chinese-owned companies account for an estimated 90% of Zimbabwe’s mining industry, according to Maguwu. Several have been implicated for labour and rights abuses, displacement of local communities and environmental abuses, including water and soil pollution and habitat loss. “In 2023 alone, [Chinese] investments in Zimbabwe’s mining sector saw 121 investors contributing a staggering $2.79 billion,” Maguwu said. A spate of violent confrontations in January 2025 that included two incidents in which Chinese nationals shot at Zimbabwean employees prompted a harsh rebuke from local trade unions. Justice Chinhema, general secretary of the Zimbabwe Diamond and Allied Minerals Workers Union, said workers at Chinese-operated mines are frustrated by “poverty wages” and being forced to work up to 14 hours a day. “At least 95% of these workers at Chinese mines are working under short-term, fixed contracts with no medical care, pension or any other benefit needed when retiring,” he told Kenyan newspaper The East African. “Worse, they are intimidated and victimized for participating in any trade union activity or joining trade unions, making it difficult for them to collectively bargain for better conditions.” The recent violence also brought to mind a 2024 viral video taken at Makanga mine in Bindura in which two Chinese nationals were seen hanging two local mine employees by their hands on the bucket of a front-end loader before it was lifted. Zimbabwean authorities took swift action and deported the men. Maguwu said disputes over wages and violent episodes are not uncommon. “At the heart of the increasing tension between Chinese nationals and Zimbabwean workers are poor labour practices, including meagre wages, lack of contracts and gross human rights abuses,” he told The East African. “Needless to say, this is lawlessness as has never been witnessed in Zimbabwe’s mining sector since independence in 1980.” Source: REQUIRED: (Students must refer to the above scenario in their answers.) 2.1 Analyse Zimbabwe’s mining industry by using the PESTEL framework. For each category of the PESTEL discuss one element that will have a strategic impact on the Chinese mining companies and one element on the host country’s (Zimbabwe) stakeholders. (12 marks) 2.2 Discuss how the Government of Zimbabwe can ensure and enforce that Chinese mining organisations adopt higher labour, environmental and governance standards (10 marks) 2.3 Develop an Environmental, Social and Governance (ESG) framework for a Chinese mining organisation operating in Zimbabwe. Your framework should include the following: 2.3.1 Identify and discuss three(3) strategic ESG objectives (one environmental, one social, one governance) (6 marks) Downloaded by samay pipper () lOMoARcPSD| 8 2.3.2 Recommend corresponding initiatives and targets for each of the objectives you identified in 2.3.1. (6 marks) 2.3.3 Explain how ESG performance would be disclosed to both Zimbabwean regulators and international investors. (6 marks) 2.4 Advise how a Management Accountant working within a Chinese mining organisation in Zimbabwe can provide decision-relevant information to support the integration of an Environmental, Social and Governance (ESG) strategy. (10 marks)