Critique of Analysis and Reporting using the PwC Value Framework

This report critically evaluates Evonik's analysis and reporting practices through the lens of the PwC Value Framework, focusing on elements like strategy, resources, relationships, and organizational performance. It assesses the accessibility and comprehensiveness of information presented in Evonik's 2017 annual report, examining aspects such as strategic goals, business model, governance, risk management, remuneration, financial and physical assets, customer relationships, people and culture, innovation, brands and intellectual assets, processes and supply chain, and various dimensions of organizational performance (operational, economic, social, environmental, and segmental). The report identifies both strengths and weaknesses in Evonik's reporting, ultimately providing a comprehensive critique of the company's performance communication in relation to the PwC framework and the concept of materiality. Desklib offers this solved assignment along with a wide array of study resources for students.

Running head: EVALUATION OF ANALYSIS AND REPORTING
Evaluation of Analysis and Reporting
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1EVALUATION OF ANALYSIS AND REPORTING
Table of Contents
PwC value framework elements:.....................................................................................................1
Strategy: Goals and objectives.........................................................................................................1
Report extract: Page 10................................................................................................................1
Reporting critique:.......................................................................................................................1
Accessibility:...............................................................................................................................2
Comprehensiveness:....................................................................................................................2
Overall conclusion:......................................................................................................................2
Strategy: Business model.................................................................................................................3
Report extract: Page 11 and Page 12...........................................................................................3
Report critique:............................................................................................................................3
Accessibility:...............................................................................................................................3
Comprehensiveness:....................................................................................................................3
Overall conclusion:......................................................................................................................4
Strategy: Governance.......................................................................................................................4
Report extract: Page 67................................................................................................................4
Report critique:............................................................................................................................4
Accessibility:...............................................................................................................................5
Strategy: Risk...................................................................................................................................5
Comprehensiveness.....................................................................................................................5

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Report extract: Page 46................................................................................................................6
Accessibility................................................................................................................................6
Strategy: Remuneration...................................................................................................................6
Comprehensiveness.....................................................................................................................6
Report extract: Page 79 to Page 87..............................................................................................7
Accessibility................................................................................................................................7
Resources and relationship: Financial assets...................................................................................8
Comprehensiveness.....................................................................................................................8
Report extract: Page 123..............................................................................................................8
Accessibility................................................................................................................................8
Resources and relationship: Physical assets....................................................................................9
Comprehensiveness.....................................................................................................................9
Report extract: Page 94................................................................................................................9
Accessibility..............................................................................................................................10
Customers......................................................................................................................................10
People and culture..........................................................................................................................11
Innovation......................................................................................................................................11
Brands and IA................................................................................................................................12
Processes and Supply Chain..........................................................................................................13
Organizational Performance..........................................................................................................13

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Operational....................................................................................................................................13
Economic...............................................................................................................................14
Social.....................................................................................................................................14
Environmental........................................................................................................................15
Segmental..............................................................................................................................15
Nature of Materiality.....................................................................................................................17
Conclusion.....................................................................................................................................17
Reference List................................................................................................................................18

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PwC value framework elements:
Strategy: Goals and objectives
Report extract: Page 10
Reporting critique:
This element helps in forming the strategy and goals of an organization comprising of
short-term as well as long-term goals. In other words, it aims to provide the users with the
necessary information of the future plans of the organisation and accordingly, they could
undertake significant decisions.

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Accessibility:
The strategic targets and objectives of Evonik could be accessed easily from Page 10 of
its annual report. The target of the organisation is represented in the form of a heading in bold.
The format of the extract is simple supported by clear descriptions for identifying the long-term
value intended to deliver. In case of Evonik, the principles and objectives of the organisation are
laid out in Page 12 of the Annual Report, in which they are associated with previous
performance and future priorities to represent the significance of long-term value.
Comprehensiveness:
On Page 12 of the Annual Report, Evonik discloses its strategy and yearly priorities for
increasing its business value and they include the following:
 Properly balanced and specialty portfolio
 Customer-concentrated and sustainable innovation
 Performance-oriented and open culture
Along with this, quantitative data related to each of the aspects are mentioned in the annual
report along with their past performance for explaining the relationship between the target of
long-term value and actual outcomes achieved.
Overall conclusion:
The 2017 annual report of Evonik helps in clear description of the strategic targets and
objectives of the organisation via effectively formatted information and understandable
reporting. Thus, the proper use of quantitative and qualitative data in association with the
priorities of the organisation increases the performance indication quality.

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Strategy: Business model
Report extract: Page 11 and Page 12
Report critique:
The business model of an organisation signifies the way of creating value for the same
and the interrelated factors.
Accessibility:
The business model of Evonik could be found from pages 11 and 12 of its annual report,
which is easily accessible for the readers, since it is disclosed as a separate section under the
heading business model.
Comprehensiveness:
The extract above represents four inter-associated elements with brief descriptions of the
interpretation of the business model. As a result, this enables in further explanation of the context
of the ways the elements intend to accomplish the objective of long-term value.

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Overall conclusion:
Evonik clearly cites its business model effectively over two pages and thus, the readers
could find such information easy to comprehend. This is because the elements describe the
operating processes of the organisation to ensure effective element quality.
Strategy: Governance
Report extract: Page 67
Report critique:
The governance performance indicator depicts the commitment of an organisation in
terms of reporting transparency. It helps in identifying the operating structures and the rules for
the board and its compliance committee.

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Accessibility:
The 2017 annual report of 2017 contains a section of corporate governance in order to
communicate performance information about governance reporting. This section contains 23
pages of the annual report and the users could find it easily from the section of contents.
Strategy: Risk
Comprehensiveness
Risk management is the application of management procedures, practices and policies
with regard to identification, analysis, treatment, assessment, communication and monitoring.
Evonik’s risk management strategies form the central element under the management of
company. At the company level the management of risk is assigned to CFO and is organized on
decentralized approach in compliance with the organizational structure of the company (McNeil,
Frey and Embrechts 2015). Further, the corporate divisions, segments and the service units are
primarily responsible for the risk management responsibility. It assists in identification of risk at
early stages and estimation of its implications.

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Report extract: Page 46
Accessibility
The risk management approach and strategies of Evonik can easily be assessed from the
company’s annual report for the year ended 2017. It is stated in clear and concise manner in the
annual report. Therefore, it is concluded that the organization’s health with regard to risk element
under the value framework is good.
Strategy: Remuneration
Comprehensiveness
The remuneration report states the principles of remuneration system applicable for the
members of Supervisory Board and Executive board together with structure and individual
remuneration level. The remuneration structure for Executive Board is formed to assure that the
members receive sufficient remuneration for their responsibilities and tasks and to receive the

10EVALUATION OF ANALYSIS AND REPORTING
direct amount due on account of performance for each member of the company and each
member of Executive board (Farmer, Archbold and Alexandrou 2013). Further, the
remuneration is regularly reviewed by supervisory board where appropriate, based on the
remuneration reports received from the independent consultants.
Report extract: Page 79 to Page 87
Accessibility
The remuneration strategies of Evonik can easily be assessed from the company’s annual
report for the year ended 2017. It is stated in clear and concise manner in the annual report.
Therefore, it is concluded that the organization’s health with regard to remuneration under the
value framework is good.

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Resources and relationship: Financial assets
Comprehensiveness
Financial assets are the assets generated from the contractual agreements from the future
cash flows or from owing of equity instruments of any other company. The financial assets of the
company are included in the balance sheet of the company under the distinct head of financial
asset. Financial asset of the company includes securities and same kind of assets, receivables
from the derivatives, loans and various other financial assets Corporate.evonik.com 2018).
Report extract: Page 123
Accessibility
The financial assets of Evonik can easily be assessed from the company’s annual report
for the year ended 2017. It is stated in clear and concise manner in the annual report. Therefore,
it is concluded that the organization’s health with regard to financial asset under the value
framework is good.