MARKETS | 1

MARKETS

SOON TO BE CLBS CAPITAL

MAY 2013

LMBS Magazine

The benefits of a floating currencyBitcoin: the financial phenomenon

BUSINESSWhat if she ruled the world

FUNDAMENTALS

WHAT YOU NEED TO KNOW

The Corporate reporting revolution

Surviving the jobless economy

03

A NOTE FROM THE EDITORLast month the UK’s biggest retailer, Tesco, recorded massive pre-tax losses of more than 50% for this year – their worst recorded year to date. Currently the retailer is shying away from the supermarket space race and concentrating on securing a larger capital base and online presence.

The losses in the company highlight a important trend in the UK, the polarisation of retail consumers towards the high and low ends of the market. Waitrose and Aldi have became much more popular than Tesco which boasts a 20min journey for 95% of the UK population.

New Look Retail Group Ltd became another store to watch when it announced the issuance of £800m in corporate bonds in order to refinance itself. Presently the company holds £1.1Bn of debt, five times the companies 2012 operating profits.

The IMF reduced the UK’s growth forecast from 0.8% to 0.2% representing a fastening contraction within the UK. This is in context to the wider picture of world economic output. The IMF now expects a decline in total European output of -0.3%; only a 1.9% growth in the US; 6.1% in India; 2.5% in Brazil; and 8% in China. Only Japan and Sub-Saharan Africa saw increases.

In this issue of The Capital the City Investment Society’s Gabrielle Cippitelli gives us a run down of Gold and the reasons for it’s current volatility in the market. While Claudio De Pietro starts talking about the currency, Bitcoin, that has became an increasingly interesting phenomenon this year.

Andree Marie Wohi of Females in Finance shows us why the UK is behind most other developed nations in the gender equality of their courts. Why this may be less a statistical note and more of a far reaching biased system ready for change.

The Accounting Society’s Dipesh Meisuria shows us how financial statements are changing to incorporate more ‘non-financial’ information. Changes are increasingly being pressured as the world grows more complex and investors need more information to work with.

This issue concludes the 2013 year at London Metropolitan University. From all of the staff here at the LMBS Capital would like to personally wish you onto better things or into a rejuvenating summer.

The Capital is now looking for new team members – if you are interested in operations, coordination, writing or editing send an e-mail to me at P-Corby@Hotmail.co.uk and next year you could be involved in the universities leading business magazine.

3 |

07

09

11

Banking

Economics

Investment

MARKETS

Sustainable Investing & Growth

The Benefits of a floating currencyMelting icebergs a hazard or an opportunity?

What does the future have in store for Gold?Bitcoin: The financial phenomenon...

CONTENTS

| 4

15

17

19

23

27

Business

Entrepreneurs

Females in Finance

Accounting

What you need to know

BUSINESS

FUNDAMENTALS

WE ASK THE QUESTIONS

Hatching an Entrepreneur

Encourage risk taking

What if She ruled the World?

A real bourne legacy

StARS: Surviving in a jobless economy

The corporate reporting revolution: bringing value to the investors

Understanding the difference between Industry and Practice

5 |

MARKETS | 6

MARKETS

Sustainable Investing & GrowthThe Benefits of a floating currency

Melting icebergs a hazard or an opportunity?What does the future have in store for Gold?

Bitcoin: The financial phenomenon...

SUSTAINABLE INVESTING & GROWTH

By Bobby Todorov

7 | MARKETS

BANKING

As a society we put a lot of emphasis on economic growth and its implications; financial markets and industry commentators are obsessed with the notion. To secure this growth banks necessarily and fundamentally transform and adapt their economics, businesses, and cultures to an ever changing environment.

We have to ask: is it actually reasonable to expect this kind of infinite economic growth? The answer is simply no - there is no such thing as infinite growth on a finite planet. The notion simply is not mathematically possible over a sustained period.

Pursuing growth at all costs and in the way we observed pre-2007 leads to the creation of financial bubbles. So why are we concerned with rapid growth to seemingly nowhere but back down? This question has again become important in the shadow of the 2007-08 financial meltdown.

Those who have forgot should be reminded that 2007 was not the first and won’t be the last financial bubble we see. The Dotcom bubble in the 90’s is an excellent example, the NASDAQ

exchange lost nearly 75% of its value from its peak. Lets repeat that, just over a decade before 2007 more than half of the listed companies on the NASDAQ went bust as a conclusion to the notion of ‘rapid infinite growth’.

The notion of infinite growth is not true and more over leads to prolonged financial meltdowns and adjustment periods that have long, drawn-out repercussions for society.

Perhaps then it is time to adopt a more balanced approach and evaluate the possibilities. Such legislation as Solvency II, Basel III and Dodd-Frank are just such balances to reduce uncontrolled, infinite growth.

But from a banking perspective, however, these legislations are forcing investors to carry a lower return on investment and are therefore not attractive to fund managers and respectively their ever so demanding clients. This high demand was the main reason why Glass Steagall was repealed, to allow banks an ever looser lead to infinite rapid growth.

In fact, one of the most common

statements made by investors is that sustainable investments are hard to find in such a volatile market and provide lower gains in longer periods. They are a combination of doing well for society and not doing harm to investment returns and therefore are founded on a trade off between short term big gains and lower sustainable gains.

Things are beginning to turn around as a recent report by Deutsche Bank concluded that this field is beginning to attract more and more attention. It goes further in suggesting that funds implementing a sustainable investment strategy are enjoying superior risk-adjusted returns than comparable peers who expose themselves to mass volatility.

A Corporate Social Responsibility report (CSR) by Xuerning and Bhattacharya (2006) analysed stock returns for 113 publicly traded Fortune 500 Companies from 2001-2004. The findings concluded that: “A typical company from the sample set had an average market value of approximately $48 billion, and that one unit of CSR (a unit to measure social responsibility) increased profits by nearly $17 million.” Overall CSR

MARKETS | 8

and implementation of sustainable investments increase customer satisfaction, which in turn leads to positive financial returns.

Another interesting case is the recent initiative by University of Alabama that has set up a new fund providing $1 million over five years to develop sustainable projects. The main aim is to promote sustainability among students but this has also sent a message across other Universities outlining the importance of the subject.

Sustainability does not just encapsulate itself to finance though, it is also a means of long term thinking about rapidly investing in finite resources also. ‘FusionExperience’, a business and technology company has recently launched a Sustainable Investment Research Portal that enables fund managers to monitor the environmental conduct of the companies that clients invest in, they can then ensure their returns themselves without relying on materials that could become exposed.

A lot has been done recently with regards to promoting and increasing awareness of the subject of

sustainability. Curtis Ravenel, Global Head of Sustainability to Bloomberg, in support of this programme has said that:

“Mainstreaming sustainable investing is essentially an educational challenge”.

To summarise, the topic of sustainable investment has gained a lot of support

recently and it attracts investors’ attention from both a credit and social risk perspective. It also provides fund managers with new opportunities of diversity when searching for ever higher returns. Sustainable investment is not simply a nice idea to have but it has real-life implications which could lead to a much smoother ride for all of us.

“Those who have forgot should be reminded that 2007 was not the first and won’t be the last financial bubble we see”

9 | MARKETS

ECONOMICS “ the UK and Spain are very similar: In 2007, the ratio in the UK is 93% and in Spain is 95%”

MARKETS | 10

For the last three months UK GDP rose by 0.3% If the economy had contracted again in the first quarter of this year, the UK would have fallen into its third recession in the past five years.

The economic crisis has taught us how important it is to have a freely floating currency, Its main benefit is monetary and fiscal autonomy. The main advantage of a floating currency, without the politics of creating a fixed currency, is this autonomy. Yet the high depreciation allowed by the UK’s floating system contributed less to the adjustment of the UK current account than was expected – so there are still problems.

Professor Paul De Grauwe, a Belgian economist currently at the London School of Economics, has stated that the clear benefit of having a free currency is visible in the post-crisis interest rates paid on long-term public debt, that is, that rate can somewhat be controlled by the state.

The International Monetary Fund’s (IMF) forecasts for the ratio of net public debt to gross domestic product for the UK and Spain are very similar: In 2007, the ratio in the UK is 93% and in Spain is 95%.

Bond yield in the UK is under 2%, the lowest yield in history for the UK. Spain’s bond yield after the last ten years is just under 5% which means that Spain has much bigger problems for financing of its debt considering that the country is going

THE BENEFITS OF A FLOATING CURRENCY

By Raluca Ungureanu

towards depletion.

The large difference between the two countries is mainly due to the fact that Spain is a part of the Eurozone. This threatens all countries involved and all the countries involved threaten Spain – there is more risk. The UK however has many more options available to it than the imposing strategies from the IMF due to it’s autonomy.

The UK is thought to be a great place for asset safety due to this autonomy, again less risk. A point discussed by Martin Weale, a member of the Bank of England’s Monetary Policy Committee is the impact of devaluation of sterling, roughly 20% less risk on a trade-weighted basis since late 2007.

In 2007, the UK had a current account deficit of 2.3% of GDP, against 10% in Spain, 10.1% in Portugal and 14.6% in Greece. But, 5 years later in 2012, the UK’s deficit is predicted to be up to 3.5% of GDP, much higher than its neighbouring countries, Spain with 1.1%, Portugal with 1.5% and Greece with 2.9%.

There are positive factors and negative factors about floating currency, the currency can change slightly and it can reduce the fiscal deficit and allow the private sector to flourish. As a barrier, if the account does not adjust, there will be no consolidation. The UK can only function for itself because of the flexible exchange rate.

Climate change is happening, we know this, but what are the risks and what potential could it release? Arctic melting could create earth tremors and further cause tsunamis. By the end of this century or maybe even earlier, arctic summers will be more frequent with no sea ice at all. But resources could be unlocked.

For thousands of years man’s hand has been changing everything, from burning forests to changing the landscape. That is how societies have developed. Many people believe that warmer Arctic will open new opportunities increase resources and new industries will flourish around them. Even if the ice melts and the temperature gets higher, the Arctic will stay cold, expensive and hard to operate. However, arctic

MELTING ICEBERGS A HAZARD OR AN OPPORTUNITY?

By Ona Štramaitytė

oil could make a change to arctic economies. This could be as much as 10% of the global supply. The Arctic is the main field where Russia is interacting with the Western World.

However, the new opportunities for arctic countries would not compensate the costs of losing whole ecosystems. Even though everyone is happy to profit from it, this is a tragedy for mankind. If the Greenland ice sheet is going to continue to melt over the next two centuries, sea levels will rise catastrophically. Governments will have to get serious about it, costs will be greater than the profits that they are expecting. To avoid those costs, policies through tax or the market system have to be implemented now.

11 | MARKETS

INVESTMENT

April saw the price of gold tumble down from the high of $1,600 on the 1st of the month to $1,328 by the 16th. The 8.5% fall was sharpest fall since the 1980s, marking a new two year low for the precious metal.

The down-trend was widely believed to have been caused by weak Chinese growth, as well as the expectation that nations in need of liquidity, such as Cyprus, would become sellers and auction their gold reserves for funds.

In the following week after the fall gold registered its biggest weekly gain in more than a year with a 4% increase; that uptrend was not expected to last. The Chinese economy, which is the second biggest global consumer of gold, planned to take a three days holiday from the 29th of April to celebrate May Day, significantly decreasing the support from the buyers’ market.

Investors cautioned from the expected reduction in physical demand, with at the current rally struggled to break the $1,480-$1,500 level. The technical resistance level was set at $1,525.

The prices of commodities such as metals are highly sensitive to changes in demand. Gold plummeted during the recession with lows set in mid-November 2008 followed by an uptrend and a peak set during late September 2012. Post 2012 the

WHAT DOES THE FUTURE HAVE IN STORE FOR GOLD?

By Gabrielle Cippitelli

gold market turned bearish for about a twelve months.

Last year, speculators including Peter Schiff, the chief executive and chief global strategist of Euro Pacific Capital, said that the gold might skyrocket to an incredible $5,000 an ounce due to a possible devaluation of the dollar in the coming years.

The main factor which could lead to the weakening of the dollar is the monetary policy of the Federal Reserve (FED), Ben Bernanke the governor of the FED, has promised to maintain easing policies until an improvement of the United States economy and a lower level of unemployment. Continuous monetary expansion can only lead to an depreciation in the purchasing power of the US Dollar.

Erica Rannestad from CPM Group highlighted indications of bearish sentiment by stating that many people are dumping gold as an investment alternative and transferring money to stocks. This was regurgitated by Walter de Wet at Standard Bank who believed the large price decline had reduced investment demand.

But if analysts are right then gold can be expected to reach the astonishing price of $5,000 per ounce with the future. The fundamental analysis seem to incline towards hinting a new rally of the precious metal.

“Risk comes from not knowing what you’re doing” - Warren Buffet

MARKETS | 12

There is a buzzword which is slowly gaining more and more attention from the media and the investing public globally: bitcoin. Allegedly the creation of Satoshi Nakamoto, an alias whose real identity is unlikely to ever be revealed, bitcoin is a virtual digital currency not subject to any regulation or central power. These characteristics, combined with the free market which governs its trading, are hailed by bitcoin patrons as the fundamental features of its prospective success.

Its secret lies in the self-regulatory mechanism at the base of the system for the acquisition of bitcoins. Essentially there are only two ways in which bitcoins can be acquired. They can be “mined” solving mathematic algorithms, a process which requires an increasing formidable amounts of CPU as the number of bitcoins available rises. This would generate an incentive to create new coins only when the price is at a level that covers the computer costs involved.

Or they can be “stolen”, hacking existing virtual bitcoin depots, which would be tantamount to illegally printing money. If hacking took place confidence and trust in the system (essential components of a fiat currency) would fall and so would the price of bitcoins, including the stolen ones.

BITCOIN: THE FINANCIAL PHENOMENON...

By Claudio De Pietro

Although this principle does not stop governments or money launderers from printing.

There is also an expanding secondary market for bitcoins, which works similarly to any over-the-counter market like, for example, the foreign exchange market. The motives for buying bitcoins are, for the moment, confined to speculation and a more idealistic forward-looking investment. This idea is built around the belief that bitcoin will soon be the one and only virtual currency of the world.

Even though its advocates foresee a time when you will be able to pay with bitcoins at your favourite coffee shop, their practical use is nowadays limited only to Silk Road, an online marketplace for illegal goods.

However, this has not prevented bitcoin to grow in popularity, and since last summer it can also count on the patronage of the first celebrities confident enough to invest in a large sum. The Winklevoss brothers, besides being the worst enemies of Mark Zuckerberg, now are also the owner of one the biggest portfolios of the digital currency worth $11 million.

PONZI SCHEME? CURRENCY OF THE FUTURE? BUBBLE? ONLY TIME WILL TELL.

In London Met’s student business Hatchery, you can turn your idea into incomeThe university’s Hatchery programme provides budding entrepreneurs with a low risk environment to set-up their business.

Amazing opportunituyAs part of the Hatchery, you get:

•hot desk office space in Shoreditch with 24/7 access

•use of networked PC & Mac computers

•access to start-up grants and funding

• the opportunity to network with other young entrepreneurs

•one-to-one specialist advice across a wide range of areas

•access to regular workshops and networking events

How much does it cost?As a London Met student or graduate, there’s no cost to you. But space is limited, so apply now.

To learn more & applyvisit londonmetstudententerprise.co.uk/hatchery

BUSINESS | 14

BUSINESS

Hatching an Entrepreneur Encourage risk taking

What if She ruled the World?A real bourne legacy

15 | BUSINESS

As the lectures begin to come to a close and the seminars are winding down, this is surely the sign of summer. When the rush of revision is becoming apparent and the endurance of exams is starting up, this is surely summer.

Summer transposes the academic year of responsibility and restraint setting free the spirit of spontaneity, chance, and yet again, entrepreneurialism.

Entrepreneurialism, boiled down, way down, past the conventional meaning, embodies a spirit. A spirit of character, a spirit of strength, of the willingness to feel more, experience more and challenge oneself. It is this that sets the entrepreneur aside from others.

The temptation to merely indulge and play over the summer is intense as well as necessary, however true entrepreneurs must see summer as an opportunity. One that offers time and space to indulge in personal projects and experiences.

Oscar Wilde once said: “Anyone who lives within their means suffers from a lack of imagination” There are two interpretations to this. It could be that Wilde is saying that

anyone who spends less money than they have is dull. However another interpretation is that anyone who does not try and break boundaries, exceed their expectations and try to experience more from life is dull. We like the second interpretation.

This summer is a fantastic time of revelations and excitement. Think to yourself, is this Summer 2013 the time that YOU should open up a business? London Met Entrepreneurs is based in The Accelerator, a business incubator initiative by London Metropolitan University in Shoreditch.

The Accelerator helps students from London Metropolitan University and its recent alumni to get their dreams off the ground and help them to start a business.

If you think that this could be you, visit the Accelerator website at www.accelerator-london.com and book an appointment with Simon Boot, Student Enterprise Manager. This gentleman may just be able to help you.

On behalf of the London Met Entrepreneurs, may we wish you a prosperous summer.

ENTREPRENEURS

HATCHING AN ENTREPRENEUR

By Christopher Bird

Oscar Wilde once said: “Anyone who lives within their means suffers from a lack of imagination”

BUSINESS | 16

The entrepreneurs of our society are those that implement ideas, create businesses and provide job creation, they hold a significant role in social prosperity.

The role of entrepreneurship right now is more necessary than ever, in an economy where big businesses such as HSBC are looking to cut another 14,000 jobs, they cannot be relied on to create jobs or even stabilise employment.

It takes both leadership and management to turn a promising idea into a practical venture. The success and failure of an idea rests on a practical knowledge (analysing the market, deciding when to release the product) and an ability to seize opportunities inside this mist of uncertainty and risk.

ENCOURAGE RISK TAKING

By Patrick Corby

An entrepreneurial individual needs a positive perspective to this risk when seeking to deal within the future ambiguous landscape and therefore not only needs knowledge but an ability to creatively manoeuvre in uncertainty.

Entrepreneurs make themselves through actively challenging themselves and diving into the uncertainty of the future in an attempt to foster the creativity that is so elusive yet so vital to the mindset of any entrepreneur.

Within the economy right now there has never been a greater need or necessity for those that can hold a positive perspective on risk and take the chance on creating their own future.

17 | BUSINESS

FEMALES IN FINANCE

A recent article posted in the Stylist Magazine was rather interesting In regards to the gender bias to female judges that occurs in the English legal system. The article laid out in specific detail how men dominate the courtrooms in an environment where almost 63% of those joining the legal profession each year are in fact women.

According to statistics In respect to this ratio of ‘opting-in’ to ‘being-in’ England and Wales are close to fourth from bottom in Europe, with only 23% court room judge being females. Whereas in countries such as France (65%), Greece (64%) and Slovenia (78%) women constitute the majority of the profession.

And that is just the tip of the iceberg, in England and Wales all the head of divisions i.e. the Lord Chief Justice, the master of the Rolls, the President of the Queen’s Bench are all men. 85% of the High Court judges are male as well as 83% of circuit judges. Females in finance, wonders what would happen if she really did rule the world?

Growing reports shows that male and females do not both have the same outlook on cases such as sexual assault; divorce and property issues. Female judges it seems share a very different point of view as to those of their male counterparts. With the lowest rape conviction rate in Europe the UK could probably do with more females ruling the court. In the UK one in thirty can expect their attacker was brought to justice, there are currently up to 100,000 sexual assault cases reported every year. Out of the 14,700 sex discrimination cases recorded in April 2011 to March 2012,

only 4,500 reach settlement.In 2012 alone, 55 men guilty of rape and 1,115 men who where found guilty of sexually assaulting women were given a sentence such as community services or were fined. Would this be the case if ruling where done by men and women?

There a growing number of reports stating that females may be more driven towards empathy and more concerned with social goods compared to men, and therefore potentially could make fairer, better judges. It’s been shown by The Quartly journal of Economics that women tend to have more empathy for others then men, who swerve between being selfish or selfless – not the kind of characteristics that should be left to rule our courts if there is a more balanced way we can produce order.

Just in case your wondering right now reports also show that females judges don’t equate to greater lenience towards women, in fact it is men who seem more reluctant to send women to prison for fear of seeming to hard; otherwise known as the “chivalry effect”.

Females on the other hand don’t seem to have the same qualms. A study that took place in the University of Nebraska, USA demonstrated that male judges sent 12% of women to prison compared to 20% by female judges.

The movement for change is slow but sure gaining stride in the law profession as the major of large law firm are promotion and endorsing diversity programmes. Some say it a question on personal aspirations, there are opportunities to go up the ladder and it’s up for the individual to go for it.

WHAT IF SHE RULED THE WORLD?

By Andree-Marie Wohi

BUSINESS | 18

19 | BUSINESS

BUSINESS

A REAL BOURNE LEGACY

By James Anthony

The same principle holds true for any profession: those that hold awareness of marketing give themselves, and their employers, the benefits of accessibility.

To become successful one must be business aware and consider themselves a product, in that way employers can understand what skills are on offer; what they are paying for. Those at the top review and alter themselves constantly as products to maintain their development, edge and

“Some see marketability as the pandering to the masses, selling themselves and turning themselves into something to be moulded and bought. But this does not have to be the reality”

employability. Some see marketability as the pandering to the masses, selling themselves and turning themselves into something to be moulded and bought. But this does not have to be the reality.

In the last decade even Hollywood’s elite have become ever more socially aware, rushing to align themselves with countless charities in an effort to market themselves more effectively. The smart set up and develop their

own: The Clooneys, DiCaprios and Jolies of the entertainment world have their own causes or social enterprises, which are actively campaigned by them. They create their own social image as a product – people want to go and see a movie with a charitable, charismatic star more than a self-entitled, wanton half-doer.

To the cynic, it is easy to question their motives and ask if this is just simply to enhance their public image. But

BUSINESS | 20

this is not the only reason to increase your profile, some do it for themselves and in turn succeed through pleasing themselves more than expectations would have them moulded. When it comes to DIY philanthropy Matt Damon, who actively rides on those posing for causes, is better positioned to succeed than most personally and socially. Damon ascertained first-hand experience to the problems and trauma created by poverty in his teenage years by accompanying his mother, a professor of early childhood education,

White (a scientist without marketing ability but with a strong cause) cofounding the charity Water.org. Together they focused on and developed the concept of WaterCredit. WaterCredit uses funds to guarantee microfinance for communities in need. The loans enable the communities to purchase, build and maintain wells themselves.

Through this mechanism people take ownership of projects themselves and pride in resolving their own issues. Water.org focuses on ‘Community

on trips to third world countries. He found a personal cause.Gary White had also noticed that in response to water crises, charities and NGOs had a tendency to drill wells in communities, pose for publicity shots and then leave. This approach worked initially, although when wells fell into disrepair communities where simply back to square one, if not worse off due to contamination.

In 2009 Matt Damon (with his public image and personal cause) and Gary

engagement’ without which 50% of all other similar projects fail. They rally people together, aiming to get 80% of the community on board and educated in regard to maintenance and loan repayments, thus ensuring wells remain maintained and lenders are reimbursed. This risky ‘bottom up’, as opposed to the traditional ‘top down’

concept, has proven to work and with any good success story it has since been replicated by others.

Why am I telling you this? Marketability in business is not just selling yourself to your employers. Employers want skilled, passionate and dedicated individuals. This is hard to find when most pose as

if they can do it and end up wasting dedicated individuals time. You place yourself in much higher ranks by doing what you feel your passionate about and then showing how this has developed you, created skills and why your the right person for the job, instead of a time waster.

FUNDAMENTALS | 22

FUNDAMENTALS

The corporate reporting revolution: bringing value to the investorsUnderstanding the difference between Industry and Practice

23 | FUNDAMENTALS

ACCOUNTING

Price waterhouse Coopers (PwC), the International Federation of Accountants (IFA) and the Chartered Institute of Management Accountants (CIMA) have joined forces to investigate how a company’s financial report reflects their business model.

The paper ‘Business Model’ found a wide variation in how organisations define their respective business models. Which they concluded led to confusion for stakeholders and investors as to how each individual firm creates and sustains value.

The paper highlights the need for a clear, universally-applicable definition of what a business model is and what is trying to be defined when a companies talks of it’s own; what exactly is it trying to accomplish and how.

PwC’s previous review on reporting practices found that found 77% of FTSE350 firms mention business models in their accounts but only 40% provide insightful data about their model strategies.

The companies director, Mark O’Sullivan, has stated that the pace of technological change and growing complexity in business now demands more insight into business models and the implementation of strategy to give a clear perspective to investors in an ever complex environment.

In an attempt to integrate non-monetary information into reports the International Integrated Reporting Council (IIRC) has now released a prototype framework to over 300 organisations within 25 countries. The prototype provides those that are compiling financial reports an easier platform to integrate non-financial information into their financial statements, such as socio economic and environmental costs.

According to the European Council the current cost for a large company to produce a comprehensive report on social and environmental factors would be between €30,000 and €600,000 per annum but the new proposal promises to reduce that cost to less than €5,000 a year.

The movement aims to modernise corporate reporting by implementing wider considerations. Peter Baker, president of the World Business Council for Sustainable Development, said: “The launch will challenge the status quo of value creation and transparency in reporting”

The initiative is spreading with over 15 global events, 6 being hosted on stock exchanges, one caution is that increased disclosure would signal a higher burden on financial reports.

Chief Executive of CIMA, Charles Tilly, has pointed out that 30 years ago 80% of a company’s market value relied on the balance sheet but today that figure is closer to 20%. This has altered the company value from just the two elements of people and brand to having six essential elements; financial, manufactured, intellectual, human, social and relationship, and natural.

The IIRC’s consultation was launched in line with the European Commission’s proposition to have large companies, which employ more than 500 staff, disclose more information in their reports about their social and environmental impact including risk, human rights, anti-corruption, bribery and diversity on the boards of directors.

This new law, which includes the ‘comply or explain’ policy, will affect 18,000 companies, promoting these businesses to be sustainable and accountable rebuilding public trust.

THE CORPORATE REPORTING REVOLUTION: BRINGING VALUE TO THE INVESTORS

By Dipesh Meisuria

FUNDAMENTALS | 24

Accelerating your career prospects is an advantage at any stage in life, but utilising your experience is necessary for pursuit in the right direction.

The role of an accountant is appealing to the masses: 26% of the graduate market positions are within accounting, this is because it is always in demand, it guarantees job security and financial stability and can be pursued no matter what degree you study. But there are two separate fields which classify this role.

Industry is where an accountant works within the company’s financial operations; performing receivables, payables, budgeting, forecasts, bank reconciliation and handling ledgers which contribute to compiling financial statements and reports.

Industry accounting is being part of the team, participating in the organisations success no matter where you work. It is a position that is necessary in every company, charity, institution, sector and industry. Most people who pursue this direction have a numerical degree.

Practice on the other hand is usually open to any degree. This involves being employed in an accounting firm that provides services to a range of client companies. You do not perform any accounting duties but work in teams as supervisors to review the client’s financial information.

Such roles in practice are auditors or tax advisors. A role in practice requires someone who is keen to progress with a great level of technical knowledge to apply to different businesses.

Both directions can be further enhanced by a chartered qualification that most companies sponsor. After 3 years or so, by the time you become qualified, your pay will be between £25,000 and £60,000 but still can grow if a senior position is taken up.

Around 60% of qualified accountants move from practice to industry. The top position in practice is partner whilst industry has financial directors.

UNDERSTANDING THE DIFFERENCE BETWEENINDUSTRY AND PRACTICE

By Dipesh Meisuria

25 |

THE CAPITAL IS NOW LOOKING FOR NEW TEAM MEMBERS

If you are interested in operations, coordination, writing or editing send an e-mail to me at P-Corby@Hotmail.co.uk and next year you could be involved in the universities leading business magazine.

WHAT YOU NEED TO KNOW | 26

04 WHAT YOU NEED TO KNOW

StARS: Surviving in a jobless economy

27 | WHAT YOU NEED TO KNOW

StARS “Doing the same thing over and over again and expecting different results”

WHAT YOU NEED TO KNOW | 28

The statistics are startling: according to the International Labour Organization 6% out of 15 to 24 year olds in developed countries, or 75 million, are unemployed. This number is higher than ever before, 26 million are among NEETS (Not in Employment Education or Training). According to the Economist 290 million, or a quarter of world’s youth, are neither working nor studying.

Today what was once the only prerequisite for entering the job market, a simple college degree, is just not enough. Alternatives to finding a job do exist though, the case is not that there are no positions left, but that a different skill set is needed for the existing job vacancies and the job hunt.

Einstein defined insanity as: “Doing the same thing over and over again and expecting different results.” Applying for the very same positions the same way as everybody else is the modern equivalent. It will likely bring the result: “We regret to inform you that we cannot offer you employment with our company” also known as the dreaded, yet increasingly common, rejection letter. How to successfully modify your career pursuit then? A jack of all trades and a master of none is an old age saying not applicable today. As a generation Z member it is becoming increasingly common to change our geographical location, industry or even our field of work in order to stay competitive.

You are not defined by what you do but by what you aspire to be. Guy Laliberté, the founder and CEO of the world famous Cirque du Soleil, started as a folk musician and a busker. Today he holds the reins of US$2.6 billion industry and is also a philanthropist, space tourist and a professional poker player.

In 2011 Frits van Paasschen, CEO of Starwood Hotels & Resorts, moved his company’s headquarters into China for a month. Developing a global mind-set within his team was one of his main

incentives to do so, he plans to do it again in 2013, this time to Dubai. Moving abroad on your own as a career choice today is also much easier due to national boundaries becoming far less pronounced. Crisis-ridden Greece or Spain might not be your first choice but Asia, the Middle East or Nordic countries are viable options. While Scandinavian countries beat the rankings for work-life balance, Abu Dhabi, Dubai, Doha and Bahrain strike the best balance between quality and cost of life in their economic environment.

Haruki Murakami, a postmodern award-winning Japanese novelist, studied drama, worked in a record store, ran a coffee house and a jazz club before switching to a becoming a writer at age 29. Except for realizing ones potential and achieving personal satisfaction the benefits of changing your sector may translate into higher income streams, enhanced job experience and a widened skill set.

In March CEO Nick D’Aloisio sold his start-up Summly for $30 million to Yahoo while still only 17 years old. The future for him is bright and his success serves as an inspiration to ignite the entrepreneurial spark within high school or college graduates.

Portfolio careers, or choosing to re-train and have a number of different

specialities, might be the right career move for you. A study by Dr Barry Hopson suggests that people that pursue several careers at once earn more in two years than they ever did as a full-time employee. You can diversify your income streams either by combining a corporate career with entrepreneurship exploration or dedicating your entire time to creating your own workplace.

Being aware of the possible pathways while in a transition period is also a powerful weapon to escape unemployment scarring. The long-term effects of networking, be it in the traditional way or through social media, are not to be dismissed. Being a multilingual job hunter, learning a new software or commence on a PhD course are all feasible alternatives that you can embark on today so as to reap the benefits tomorrow.

By custom designing your personal and career development, staying open to what lies ahead and pro actively seeking opportunities you will create a breathing space for job serendipity to knock on your door. As Theodore Roosevelt, a cunning diplomat and a comprehensive visionary himself, has said: “In any moment of decision, the best thing you can do is the right thing. The worst thing you can do is nothing.”

“IN ANY MOMENT OF DECISION, THE BEST THING YOU CAN DO IS THE RIGHT THING.THE WORST THING YOU CAN DO IS NOTHING”

SURVIVING IN A JOBLESS ECONOMY

By Natalie Dimitrova

CREDITS

Editor In ChiefPatrick Corby

Special thanks to:

Stephen PerkinsJustin LanceKen Smale

Banking:Bojidar TodorovImage courtesy of Alamy

Economics:Raluca UngureanuOna ŠtramaitytėImage courtesy of David Russel

EDITOR TEAM: ACKNOWLEDGEMENTS:

BUSINESS SCHOOL SOCIETY WRITERS:

Managing EditorDipesh Meisuria

Investment:Gabrielle Cippitelli Claudio De Pietro Image courtesy of Elise Zhang

Creative DirectorVictoria Pashkova

Females In Finance:Andree-Marie WohiImage courtesy of Creative Commons

Entrepreneurs:Christopher BirdImage courtesy of Rick Nice

PhotographerIsabelle Castro

Business:James AnthonyImage courtesy of Bilal Reed

Accounting:Dipesh MeisuriaImage courtesy of Creative Commons

www.londonmet.ac.uk