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Page 1 of 6 Page 1 of 6 Deakin's Bachelor of Commerce and MBA are internationally EPAS accredited. Deakin Business School is accredited by AACSB. MAF302 – Corporate Finance Trimester 2, 2018...

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Page 1 of 6

Deakin's Bachelor of Commerce and MBA are internationally EPAS accredited.
Deakin Business School is accredited by AACSB.
MAF302 – Corporate Finance
Trimester 2, 2018

Assignment 1 – Individual Critical Analysis

DUE DATE AND TIME: Intra-trimester
eak, 13/08/2018, 05.00pm
PERCENTAGE OF FINAL GRADE: 20%
HURDLE DETAILS: Achieve at least 40% in this assessment to pass the unit
Learning Outcome Details
Unit Learning Outcomes (ULOs) Graduate Learning Outcomes (GLO)
ULO1: A sound understanding and an ability to apply
elevant theoretical and practical financial knowledge.
GLO1: A
oad understanding of theoretical and
practical knowledge in the finance discipline
ULO2: An ability to communicate information
effectively in a written form.
GLO2: An ability to effectively communicate
financial information and knowledge in oral
and/or written form to a
oad range of
audiences.
ULO3: An ability to evaluate and critically analyse
elevant data and information.
GLO4: An ability to evaluate and critically analyse
data and information to aid corporate decision
making.
ULO6: An appreciation for the importance of
sustainable development, corporate governance,
and/or corporate social responsibilities.
GLO8: A recognition of the value of sustainable
development and corporate social responsibility.
Assessment Feedback:

Students who submit their work by the due date will receive their marks and feedback on
CloudDeakin within 15 business days.
Requirements

This assignment is to be completed individually. There is a word limit of 2000 words for this
assignment. You must co
ectly use the Harvard style of referencing in this assessment.
https:
www.efmd.org/index.php/accreditation-main/epas
http:
www.aacsb.edu
http:
www.deakin.edu.au/students/study-support
eferencing/harvard
Page 2 of 6

Deakin's Bachelor of Commerce and MBA are internationally EPAS accredited.
Deakin Business School is accredited by AACSB.
Submission Instructions

An electronic copy of the final report must be uploaded to the unit website on Cloud Deakin by
5.00pm, 13 August 2018. Do not include the assignment questions in your submission as Turnitin will
mistakenly identify a high level of similarity with another source.

The submission dropbox will open 7 days before the due date and close 5 days after the due date. If
possible, please submit well before the cut-off time as you may experience high traffic closer to the
cut-off time. The uploaded soft copy in CloudDeakin will be considered the official copy and it is the
time of upload of this copy that will determine whether the assignment is submitted on time. Hard
copies will not be accepted.

You must keep a backup copy of every assignment you submit, until the marked assignment has been
eturned to you. In the unlikely event that one of your assignments is misplaced, you will need to
submit your backup copy. Any work you submit may be checked by electronic or other means for the
purposes of detecting collusion and/or plagiarism. When you are required to submit an assignment
through your CloudDeakin unit site, you will receive an email to your Deakin email address confirming
that it has been submitted. You should check that you can see your assignment in the Submissions
view of the Assignment dropbox folder after upload, and check for, and keep, the email receipt for
the submission.

Late Submission

The following marking penalties will apply if you submit an assessment task after the due date
without an approved extension: 5% will be deducted from available marks for each day up to five
days, and work that is submitted more than five days after the due date will not be marked. You will
eceive 0% for the task. 'Day' means working day for paper submissions and calendar day for
electronic submissions. The Unit Chair may refuse to accept a late submission where it is
unreasonable or impracticable to assess the task after the due date.

Academic misconduct, extension, and other issues

For more information about academic misconduct, special consideration, extensions, and
assessment feedback, please refer to the document: Your rights and responsibilities as a student in
this Unit in the first folder next to the Unit Guide of the Resources area in the CloudDeakin unit site.

Extensions can only be approved by the Unit Chair (Dr Tze Chuan ‘Chewie’ ANG). Extensions can be
granted for documented serious illness (not just on the day the assignment is due) or for
compassionate reasons under extenuating circumstances. The unit chair can ask to see how much
work has been completed before granting an extension. Work or holiday reasons are NOT grounds
for an extension – you are expected to manage these issues as part of your studies. You are strongly
encouraged to start early and to continually backup your assignment as you progress. Computer
crashes or co
upted files will NOT be accepted as valid reasons for an extension of any length. For
further information about Special Consideration, visit
http:
www.deakin.edu.au/students/assessments/special-consideration.
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Page 3 of 6

Deakin's Bachelor of Commerce and MBA are internationally EPAS accredited.
Deakin Business School is accredited by AACSB.
Building evidence of your experiences, skills and knowledge (Portfolio)

Building a portfolio that evidences your skills, knowledge and experience will provide you with a
valuable tool to help you prepare for interviews and to showcase to potential employers. There are
a number of tools that you can use to build a portfolio. You are provided with cloud space through
OneDrive, or through the Portfolio tool in the Cloud Unit Site, but you can use any storage repository
system that you like. Remember that a Portfolio is your tool. You should be able to store your
assessment work, reflections, achievements and artefacts in your Portfolio. Once you have
completed this assessment piece, add it to your personal Portfolio to use and showcase your learning
later, when applying for jobs, or further studies. Curate your work by adding meaningful tags to your
artefacts that describe what the artefact represents.


































https:
www.efmd.org/index.php/accreditation-main/epas
http:
www.aacsb.edu
Page 4 of 6

Deakin's Bachelor of Commerce and MBA are internationally EPAS accredited.
Deakin Business School is accredited by AACSB.
Bega Cheese Limited




Background

Dairying started in the Bega Valley in the 1850’s. In those days each farmer produced and sold
products, such as cheese and butter from their dairy. After a period of time, local farmers decided to
improve their individual production and marketing activities and banded together to establish The
Bega Co-operative Creamery Company in 1899. Bega’s original factory was opened in Bega in 1900.

From 2007 to date, Bega acquired the cheese assets of Kraft Foods, purchased the assets and
operations of De Cicco Industries, and created a wholly owned subsidiary – Tatura Milk Industries. In
August 2011, Bega was listed on the Australia Securities Exchange (ASX). In July 2017, Bega expanded
its portfolio beyond dairy to include some of Australia’s most iconic and loved food
ands and
products, including Vegemite, ZoOSh, and Bega Peanut Butter.

Today, with sites from Bega to Melbourne and Northern Victoria, Bega now employs approximately
2,000 people. The company has evolved from its modest and localised co-operative heritage in Bega
into a significant and innovative player in the Australian and international dairy industry. Bega’s
original site at Lagoon Street still operates today, producing cheddar and mozzarella cheese and whey
powders. There are now approximately 500 farms supplying the Bega group. The Company’s
production of approximately 236,000 tonnes of dairy products equates to a sales turnover in excess
of $1.2 billion per annum.


Source: Bega Cheese Limited website at https:
www.begacheese.com.au/investors





https:
www.efmd.org/index.php/accreditation-main/epas
http:
www.aacsb.edu
Page 5 of 6

Deakin's Bachelor of Commerce and MBA are internationally EPAS accredited.
Deakin Business School is accredited by AACSB.
Your task

You graduated from Deakin Business School recently. You are now a financial analyst at an
investment and consulting firm in Australia. Your team leader, John is considering whether to include
Bega Cheese Limited in a newly created investment fund, called Corporate and Social Responsible
(CSR) Fund. He would like to include firms with a
oader corporate objective in the fund. Specifically,
he is interested in firms that not only maximize shareholders’ wealth, but also care for their
stakeholders, which include their customers, employees, the society, and the environment. He values
the importance of the board structure of firms, corporate governance, and compensation packages,
which are helpful in aligning the interests of managers to those of shareholders’.

John wants you to write up a report about Bega’s corporate governance and corporate social
esponsibility, which includes the following points:

 A summary of Bega’s cu
ent structure of the board of directors and an evaluation of such a
structure using the recommended guidelines of good corporate governance.

 An outline of the compensation package of Bega’s CEO and top executives and an evaluation of
its effectiveness in delivering total returns to shareholders.

 An identification of two major sources of risks that Bega may potentially face and an analysis of
the strategies that Bega has in place to manage these risks.

 A
ief highlight of Bega’s other internal and external corporate governance mechanisms and a
ief comparison of the differences between the corporate governance mechanisms in Australia
and Europe.

 A summary of Bega’s corporate social responsibility program, which includes its commitment to
the environment, its employees, the community and other stakeholders; and an evaluation of the
adequacy of Bega’s corporate social responsibility given the nature of its business and its mission.

Answered Same Day Aug 07, 2020 MAF302 Deakin University

Solution

Sarabjeet answered on Aug 09 2020
155 Votes

Individual Critical Analysis
Individual Critical Analysis
Individual Critical Analysis
Student Name
University Name
Executive Summary
Bega Cheese is Australia's one-of-a-kind
and. Founded in 1899, the company has gained image as major player in dairy sector globally, supplying natural as well as processed items to the retail moreover food service markets in the Australia and a
oad. Bega cheese organization is one of the public companies listed in the successful IPO in 2011. Since the year 2007, Bega cheese has doubled in size in six years, is a buy buyer. Bega Cheese is completely proud of their strong, yet strong business strategy; Bega is tremendously disciplined to manage cash along with capital." The main focus is Bega cheese, which is a strong balance sheet as well as Bega, is in a position to understand when opportunities arise. Bega Cheese Limited in a newly created investment fund called Corporate as well as Social Responsible Fund. Bega cheese has a
oader corporate objective in the fund. This report highlight the Bega cheese board structure of firms, corporate governance, and compensation packages, which are helpful in aligning the interests of managers to those of shareholders. This report highlights Bega’s business operations are sustainable and highlights how the Bega satisfy the industry standard in terms of corporate governance and corporate social responsibility.
Contents
Introduction    3
Bega’s cu
ent structure of the board of directors    3
Recommended guidelines of good corporate governance    4
Compensation package of Bega’s CEO and top executives    4
Effectiveness in delivering total returns to shareholders    5
Identification of two major sources of risks that Bega may potentially face    6
Analysis of the strategies that Bega has in place to manage these risks    7
Bega’s other internal and external corporate governance mechanisms and    7
Differences between the corporate governance mechanisms in Australia and Europe    9
Bega’s corporate social responsibility program    9
Conclusion    10
References    12
Introduction
In the 1850s, the dairy industry in Bega Valley began. That time every farmer produced and sold products like butter and cheese from their dairy products. Today, Bega has a website from the Bega to Melbourne and northern Victoria and now has about 2,000 employees. The company has evolved from Bega's modest and localized partnership tradition to become an important innovator in the Australian and international dairy industry. The Bega is still operating at the original site of Lagoon Street, producing cheddar cheese and mozzarella cheese and whey powder. There are now about 500 farms supplying the Bega Group. The company produces approximately 236,000 tons of dairy products equivalents to annual sales of more than $1.2 billion.
Bega’s cu
ent structure of Bega’s board of directors (BoD)
The cu
ent BoD consists of five supplier directors, such as Executive Chairman and external independent director who have no business or other relationship or interest with the company or any other relevant person. The board of directors intends to appoint a second external independent director shortly after the company's listing on the ANZ Securities Exchange. There is a very clear division of roles and responsibilities between chairman and CEO roles. The Company believes that with its extensive experience in the design and implementation of strategic business plans and a comprehensive understanding of the dairy industry, the Chairman will provide the Group with the prospects and expertise of the Group's strategic development to the continued development of a Group and it is important for the success. Therefore, in the company's view, it is reasonable for the chairman's executive role to overlap with the CEO's responsibilities (Analytics, 2018). In all other respects, the roles of chairman and chief executive are still clearly divided and separated.
Recommended guidelines of good corporate governance
In developing these policies, the Board of Directors of Bega Cheese has also followed a “Corporate Governance rules and Principles as well as Recommendations” issued by the ASX Corporate Governance Committee. The CGS outlines the level to which company's corporate governance practices and policies are reliable with the recommendations at the initial public offering and listing time, based on the prospectus submitted to ASIC. The Board did not consider that all Recommendations were applicable to the Company and at this time and as a background for the cooperative business (Annualreports.com, 2017).
Compensation package of Bega’s CEO and top executives
BGA's CEO compensation program is designed to promote greater consistency with shareholders. Another case that could trigger a dangerous signal is a significant difference in the growth rate of a company's earnings compared to executive revenue. For example, if earnings growth falls by more than 20% and the CEO increases wages by more than 20%, coordination between shareholders and insiders may be problematic. BGA investors should be reassured because the company's situation is not the case, as earnings per share increased by 43.72% in the past year, while CEO compensation rose by 41.09%. The BGA CEO’s salary is $637,666, which is higher than the reasonable salary I think is based on the equation. CEO and executive compensation is a good indicator of the company's leadership and good relationships with our other shareholders. But it is certainly not enough to make investment decisions based solely on this indicator (Mallick, 2017).
Effectiveness in delivering total returns to shareholders
The BG Group announces the importance of allotment of shareholder returns and will announce the final dividend of 5.0 cents per share, which will include the total dividend paid and declared at 10.0 cents per share in the financial year 2017 and the increase in 0.5 cents per share in FY12 Throughout history, Bega cheese group is eager to make a difference. Increased support for the farmers of milk producers, milk producers, and providers of services, personal contact with customers and awareness of the importance of
and and corporate prestige has given high returns for shareholders. From the end of the cu
ent fiscal year, the above director has proposed to pay a final dividend of $ 9.3 million (5.0 percent per share) on September 13, 2017. Financial Year 2017 will be considered for the historic Bega Group as a year, in the strongest corporate dealings, strong support from our Dairy Suppliers and shareholders and the stable financial performance in a very challenging industry environment is proud of the group. Most compensation for each KMP is directly related to budgetary profits, cash flows, security and strategic personal aimed goals. While reviewing the KMP compensation for the financial year 2017, human resources general manager has received cu
ent pay market information for revenue, market capitalization, number of employees and comparative organizations based on industry (Becker, 2018). Directors of the remuneration board of directors have set the total annual total annual total amount of $ 1,200,000 in shareholders' annual general meeting of shareholders. To maintain impartiality and independence, the CEO are not eligible for any kind of encouragement and their level of expenditure is not determined on the basis of group performance measures (Atradius.com.au, 2018).
Identification of two major sources of risks that Bega may potentially face
The BG Group announces the importance of allotment of shareholder returns and will announce the final dividend of 5.0 cents per share, which will include the total dividend paid and declared at 10.0 cents per share in the financial year 2017 and the increase in 0.5 cents per share in FY12 Throughout history, Bega group is eager to make a difference. Increased support for the farmers of milk producers, milk producers, and providers of services, personal contact with customers and awareness of the importance of
and and corporate prestige has given high returns for shareholders. From the end of the cu
ent fiscal year, the above director has proposed to pay a final dividend of $ 9.3 million (5.0 percent per share) on September 13, 2017. Financial Year 2017 will be considered for the historic Bega Group as a year, in the strongest corporate dealings, strong support from our Dairy Suppliers and shareholders and the stable financial performance in a very challenging industry environment is proud of the group. Most compensation for each KMP is directly related to budgetary profits, cash flows, security and strategic personal aimed goals. Giving additional risk-reward (RAR) payments to each KMP target, on which success of performance standards directly results directly in the impact of the group's income and its shareholders' shareholders. While reviewing the KMP compensation for the financial year 2017, human resources general manager has received cu
ent pay market information for revenue, market capitalization, number of employees and comparative organizations based on industry (Ausfoodnews, 2016). Directors of the remuneration board of directors have set the total annual total annual total amount of $ 1,200,000 in shareholders' annual general meeting of shareholders.
Analysis of the strategies that Bega has in place to manage these risks
Recognizing risks related to the business of the board and managing it properly is a very important priority board. Bega has accepted a risk management plan that is suitable for its business. This strategy emphasizes the risks associated with the operation of Bega. The senior management group is responsible for the designing as well as implementing risks for reducing and controlling the risks associated with the operation of the group and reports these risks to the ARC and the Board of Directors on a regular basis. The ARC group is also responsible for monitoring and evaluating financial or non-financial risk management moroever compliance processes. To ensure that the framework is consistent, the Board reviews the group's risk management plan every year. The Board of Directors has reviewed the report contained in this annual report. The Board and the CFO have reported on the effectiveness of the Bega Group to manage their significant business risks. Bega Cheese has a strong risk management plan that deals with the risks of understanding the problem of the community and understanding the needs of the customers, maintaining a high supply relationship, maintaining a secured and fast workforce, and sharing risks with shared values plus valid code (Begacheese.com.au, 2016). The internal audit work, the Bega Group's risk management, adequate availability and internal control and administration system give the effectiveness and assurances of recommendations to improve efficiency and efficiencies of these systems and processes.
Bega’s other internal and external corporate governance mechanisms
Internal Corporate Governance Mechanisms
The internal mechanism is the method and method used by the company to help management improve shareholder value. The components of the internal mechanism of Bega Cheese include the ownership structure, the board of directors, audit committee, and compensation committee.
Board of Directors: The board of directors is Bega Cheese main staff. For Bega Cheese they are the backbone of the company. They have more power and responsibility for commercial companies, they track and control all activities of management to keep performance on the track and protect the interests of stakeholders (CSRHub - Sustainability and Corporate Social Responsiblity (CSR) ratings on over 18,193 of the world’s largest public and private companies., 2018).
Board Committee: The Board Committee is an additional part of the board. They participate in those activities that are assigned to them by directors. According to the nature of the business, the board committee is regulated by laws and regulations promulgated by Bega Cheese. It all depends on national laws and regulations.
External Corporate Governance Mechanisms
Financial markets: The stock market plays a significant role in the ups and downs of the company. There is a direct relationship between Bega Cheese market value and the manager's efficiency. If the shareholder starts selling the Bega Cheese stock for some reason, and if the process proceeds further, the market value of the company will naturally begin to decline.
Markets for goods and services: Competition is another factor in leading commercial companies. If society does not like the products and services offered by commercial companies, then their business will begin to decline and become natural and may lead to lower profit margins for commercial companies (Harjoto, 2017). Therefore, Bega Cheese needs to adopt researchers and surveys in a timely manner in order to mine resources according to market demand.
Differences between the corporate governance mechanisms in Australia and Europe
Within Australia, it is believed that very “good” corporate governance can support company performance, which has affected the expansion of corporate governance, not only legal conformity issues. Despite the rich academic research between corporate performance and corporate governance systems, it is unclear whether this “linkage” between governance and performance is causal or merely relevant. In any case, although it is difficult to conclude that good governance can lead to good performance, it is clear that poor governance practices combined with poor performance can expose companies to serious risks of corporate failure. Due to the special approach is taken by Australian corporate governance reforms, especially legislative reforms; the cu
ent corporate governance system has led to “over-regulation” in many areas. Prominent examples include laws that impose personal responsibility on directors and salary reporting requirements under the Companies Act (Hinson and Ndhlovu, 2011). On the other hand, the wider the distribution of equity, the greater the role of the market in exercising control of the company, and the need to establish rules to fully and effectively control the company. The equity of several continental countries in Europe is quite concentrated, making corporate governance issues less frequent or obvious.
Bega’s corporate social responsibility program
Bega's CSR program includes a commitment to the environment, employees, communities and other stakeholders; and in view of Bega's business nature and mission, assess whether Bega's social responsibility is adequate. Every size company has CSR to reduce greenhouse gas emissions to achieve greater benefits for the planet. Corporate Social Responsibility focuses on treating ethical stakeholders in an ethical or socially responsible manner, which will ultimately protect and promote Bega
and's active development to stakeholders and communities and secure employees and organization’s environment (Trong Tuan, 2012). Bega provides the Bega community with Huge CSR; the community relies on the riches of cheese makers that provide manufacturing jobs and buys local dairy production. Bega understands its CSR benefits and therefore
anding as a part of a community and through a large number of the investment has won the trust and respect of the town (Kelly, 2014). The ca
on tax on greenhouse gases has made Bega pay more attention to corporate social responsibility related to raw materials, production, and impact on the Bega community and the world (Masoud, 2017). The Bega has launched many projects to balance employee benefits and dairy farmers who have already suffered enormous financial pressures in the industry. An article published in the Daily Telegraph "estimates that according to the ca
on tax, the energy costs of farmers in New South Wales will be $7,691 higher." Bega Cheese should first continue to use "printing ads to promote stakeholder CSR actions, including a wide society because communication and the connection between business and society can be established. Secondly, continue to form alliances with farmers, researchers, stakeholders and the government to ensure that the entire process, for instance “soil chemistry analysis”, is improved to understand the process to lessen the ca
on emissions (Mallick, 2017).
Conclusion
This study concludes that Bega’s business operations are sustainable and they completely satisfy the industry standard in terms of corporate governance and corporate social responsibility. Bega cheese work under the scrutiny from Environment Department, Conservation as well as Climate Change the Company i
adiates the su
ounding fields with nutrient-loaded water from the production process and gives another benefit to the local farmers. Bega cheese has an unparalleled reputation in the dairy industry and tries to achieve many successes every day. The quality assurance of the company is not the second it has been given quality standards of pharmaceutical quality and the product separates its commitment to innovation from the competition. Company provides maximize shareholders’ wealth, and also care for their stakeholders, which include their customers, employees, the society, and the environment.
References
Analytics, I. (2018). Bega Cheese Limited: Risk analysis (BGA | AUS | Food Products) - Infront Analytics. [online] Infrontanalytics.com. Available at: https:
www.infrontanalytics.com/fe-EN/32776AA/Bega-Cheese-Limited/gprv-risk [Accessed 9 Aug. 2018].
Annualreports.com. (2017). ANNUAL REPORT 2017 Bega Cheese. [online] Available at: http:
www.annualreports.com/HostedData/AnnualReports/PDF/ASX_BGA_2017.pdf [Accessed 9 Aug. 2018].
Atradius.com.au. (2018). Bega Cheese Case study, Atradius. [online] Available at: https:
atradius.com.au/products/case-study/credit-insurance-for-the-dairy-industry.html [Accessed 9 Aug. 2018].
Ausfoodnews.com.au. (2016). Bega Cheese publishes its first sustainability report | Australian Food News. [online] Available at: http:
www.ausfoodnews.com.au/2016/07/06
ega-cheese-publishes-its-first-sustainability-report.html [Accessed 9 Aug. 2018].
Becker, J. (2018). Bega Cheese yearly profit falls. [online] ABC Rural. Available at: http:
www.abc.net.au/news
ural/2015-08-28
ega-cheese-profit-down/6732010 [Accessed 9 Aug. 2018].
Begacheese.com.au. (2016). Bega Cheese: SUSTAINABILITY REPORT 2016. [online] Available at: https:
www.begacheese.com.au/wp-content/uploads/2017/03/Bega_Cheese_Sustainability_Report-2016.pdf [Accessed 9 Aug. 2018].
CSRHub - Sustainability and Corporate Social Responsiblity (CSR) ratings on over 18,193 of the world’s largest public and private companies. (2018). CSR information for Bega Cheese Ltd. [online] Available at: https:
www.csrhub.com/CSR_and_sustainability_information/Bega-Cheese-Ltd [Accessed 9 Aug. 2018].
Harjoto, M. (2017). Corporate social responsibility and corporate fraud. Social Responsibility Journal, 13(4), pp.762-779.
Hinson, R. and Ndhlovu, T. (2011). Conceptualising corporate social responsibility (CSR) and corporate social investment (CSI): the South African context. Social Responsibility Journal, 7(3), pp.332-346.
Kelly, B. (2014). Bega Cheese Limited Release of Preliminary Results for the Year Ended 30 June 2014. [online] Member.afraccess.com. Available at: http:
member.afraccess.com/media?id=CMN:
3A410366&filename=20140822/BGA_01545211.pdf [Accessed 9 Aug. 2018].
Mallick, V. (2017). Bega Cheese Limited (ASX:BGA): What To Watch For In CEO Compensation. [online] Simply Wall St. Available at: https:
simplywall.st/news
ega-cheese-limited-asxbga-what-to-watch-for-in-ceo-compensation/ [Accessed 9 Aug. 2018].
Masoud, N. (2017). How to win the battle of ideas in corporate social responsibility: the International Pyramid Model of CSR. International Journal of Corporate Social Responsibility, 2(1).
Trong Tuan, L. (2012). Corporate social responsibility, ethics, and corporate governance. Social Responsibility Journal, 8(4), pp.547-560.
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