ACCY801 Business Accounting Report Editing and Proof Reading Services

ACCY801 Business Accounting Report Editing and Proof Reading Services

Introduction

This ACCY801 Business Accounting Report Assignment Help contains information regarding Newcrest Mining Ltd. that is operating in the mining industry or sector. In this report summary about Newcrest Mining Ltd and its board of directors has been provided. Matters related to corporate governance and recommendation provided by Australian stock exchange to Newcrest Mining Ltd has been reported and analysed. Another concept that is discussed in this report is of ratio analysis that is calculated from the financial statements of Newcrest Mining Ltd. Liquidity, profitability, solvency and efficiency ratios has been demonstrated in this report. At last significance of majority or large investors or stakeholders were analysed.

1: Brief summary of Newcrest Mining Ltd

In 1990, Newmont Australia Limited is converted into Newcrest Mining Ltd i.e. Newmont Australia acquired Australmin holding limited and then merged with BHP Gold to form new company i.e. Newmont Australia Limited. Newcrest Mining Ltd has its business operations wide spread in many countries of the world. Newcrest Mining Ltd is engaged in mining business or belongs to mining industry. Apart from gold extraction they are engaged in gold reserves and pipeline of growth options. They are engaged mainly in exploration and mining of gold in different countries. Newcrest Mining Ltd is Australian company and has been listed in Australian Stock Exchange. Primary activities of Newmont Australia Limited include mining and exploration of gold in different countries of the world (Limited 2015). As per present business operations of Newmont Australia Limited, they had extended their business operation of gold extraction to mainly four countries Indonesia, Australia, PNG and Cote D’lvoire. Newmont Australia Limited has earnings before interest and tax margin of 23% which is better than other companies operating under same industry. Newmont Australia Limited has earned cash from business operations of AUD 1589 million during 2015. During 2015 they has 29.3% of gearing ratio that suggests better solvency position in terms of long term debt and equity in the total capital employed. Sales revenue of Newmont Australia Limited during 2015 is $ 4344 which is 7.52 % more than previous year.

2: Details of Board of Directors

Table showing details of board of directors of Newmont Australia Limited

1: Peter Hay

2: Sandeep Biswas

(Limited 2015)

 3: Gerard Bond

4: Philip Aiken AM

5: Vince Gauci

(Limited 2015)

6: Lady Winifred Kamit

7: Richard Knight

8: Roger Higgins

9: Rick Lee AM

(Limited 2015)

10: Xiaoling Liu

11: John Spark

Brief about board composition

Newmont Australia Limited has consists of 11 members in its board composition. It can be observed that there are majority of non-executive directors in board of Newmont Australia Limited. Newmont Australia Limited has diversified composed board of directors in terms of qualification and experience. There are vastly experienced board members in terms of different fields, companies, institutions and other organisations. Newmont Australia Limited has only one board member which belongs to finance and banking back ground i.e. Mr. Gerard Bond. On the other hand, there is only one non-executive director in overall board composition.

3: Corporate Governance recommendation

A: Outline the key recommendations of the ASX CGC in table format.

Following is the recommendations of the ASX CGC that has been issued to the Newcrest Mining Ltd:

B: Who is NCM’s auditor?

Ernst and young is NCM’s auditor.

C: What amount of remuneration did the auditors receive from NCM during the year?

AUD 3054,000 is the amount that is received by the auditors of NCM for the audit and other for providing other services to NCM. Following is the bifurcation of AUD 3161,000:

D: Briefly discuss the role of the external audit function and how this may/may not be achieved.

Role of the external audit function: External audit is the process under which company’s records and other relevant matters will be checked by some outside body. Main function of external audit is to detect and correct flaws and errors in financial statement and other records of the company for reporting period. Most important function of external audit is to conduct compliance check i.e. compliance with various laws and legal policies of government and regulatory bodies.

It may or may not be achieving in following manner:

• Reliable and experienced audit firm shall be appointed for the external audit then only external audit function can be achieved otherwise it may not be achieved.
• Independence of auditor is another factor that shall be taken into account for the success and failure of external audit function.

4: Financial Statement Analysis

(Peavler 2014)

Analysis of financial statements in terms of following aspects:

• Liquidity-Liquidity is the measure under which availability of cash and cash equivalents at right time i.e. as and when obligations are required to be paid. Liquidity of the business organisation can be measured through current and quick ration i.e. they measures availability of cash and cash equivalents in the working capital during the year.
• Efficiency-Efficiency ratios are those ratios which reflect efficiency of the business organisation in terms of its daily operations i.e. inventory management, debtors management, etc. Efficiency ratios include inventory ratio that reflect that period within which inventory is converted into sale revenue during the reporting period. Newcrest Mining Ltd has maintained this ratio at optimum level and has maintained efficiency in the business cycle. Therefore their business efficiency is at optimum level.
• Solvency-Solvency ratio measures the solvency position of the business organisation during the reporting period. Solvency position indicates use of debt and equity in total capital employed of the business organisation. Solvency ratio includes asset turnover ratio and debt to equity ratio. According to asset turnover ratio, use of assets in earning turnover during the reporting is analysed and measured. In this case, Newcrest Mining Ltd has shown effective use of assets in earning turnover during the year. On the other hand, debt to equity ratio is the solvency ratio that denotes propionate use of long term debt and equity in the overall capital employed of the Newcrest Mining Limited. Newcrest Mining Limited has adequate level of solvency ratio.
• Profitability-Profitability ratio is the ratio under which profit earning capacity of the business organisation is analysed and measured with the help of different ratios. Gross profit ratio indicates profit making capacity of the business from core or primary business operation. In terms of gross profit ratio Newcrest Mining Ltd, has earned adequate gross profit. Net profit ratio indicates administrative efficiency of the business organisation and in this case Newcrest Mining Ltd has not maintained adequate level of net profit during the year (Jackson 2013). Return on assets indicates profit earning capacity of the business organisation by using assets. They have earned adequate level of profit by using average assets of during the year. At last return on equity is the profitability ratio that indicates profit earned for the equity shareholders.

5: Four of NCM’s investors hold over 80% of the issued capital of the company. Who are these four investors? What is the significance of their ownership stake in NCM?

Newcrest Mining Ltd has major four investors in their company that holds more than 80 % of issued capital and they are as follows:

Majority ownership can be defined as the one or more investor having major stake in the business organisation during the year.

Significance of their ownership

In terms of Newcrest Mining Ltd, these four investors had contributed major part in terms of issued share capital. Their contribution has played major role in terms of providing funds to company so that they are able to operate their business more effectively (Jebri 2013). Since if any of these stakeholders pull back their funds from Newcrest Mining Ltd then major amount of funds will be drawn from capital and it can cause majored breakdown in business operations. Therefore it is very much important for Newcrest Mining Ltd to retain and manage these four stakeholders (Mulley, Williamson and Kirkby 2014).

Conclusion

From the above ACCY801 Business Accounting Report Assignment Help it can be concluded that Newcrest Mining Ltd has adequate level and composition of board of directors. One thing that Newcrest Mining Ltd has to change or amend is to increase women directorship on its board composition and same has been recommended by ASX CGC 2015. According to ratio analysis, Newcrest Mining Ltd has to improve their quick assets in working capital, shall manage its net profit ratio and return on assets for the business operations. Newcrest Mining Ltd shall maintain these four majority stakeholders other their employed capital may get reduced and this will made negative impact on business operations.

Bibliography

• Campbell, Bill. Effect on Financial Statements and Ratio. 18 January 2014. http://financialexamhelp123.com/leases-iii-effect-on-financial-statements-and-ratios/ (accessed June 28, 2016).
• Jackson, Amy. Ratio Analysis And Industry Benchmarking Reveal Hidden Messages In Your Financial Statements. 03 June 2013. http://www.mondaq.com/unitedstates/x/320334/Audit/Ratio+Analysis+and+Industry+Benchmarking+Reveal+Hidden+Messages+in+Your+Financial+Statements (accessed June 28, 2016).
• Jebri, Aymen. “Effect of Large controlling Shareholder's Presence and BOD.” Faculty of economic science and management, 2013: 183-186.
• Limited, Newcrest Mining. “Newcrest Mining Limited Annual Report 2015.” Newcrest Mining Ltd,2015: 92-130.
• Mulley, Greg, Shaun Williamson, and Antonia Kirkby. “The controlling Shareholders.” PLC Magazine, 2014: 22-27.
• Peavler, Rosemary. What are the five categories of financial ratios and what does each measure? 15 December 2014. http://bizfinance.about.com/od/financialratios/f/finratioanal2.htm (accessed June 28, 2016).
• Statement, Corporate Governance. “Newcrest Mining Limited CGS 2015.” CGS 2015, 2015: 1-8.
• Subramanian, Guhan. “Corporate Governance.” Harvard Business review, 2015: 1.