Executive summary

Describe about the Accounting and Financial Management for Australian Companies.

Executive summary

The report has produced a detail description about one of the most renowned Australian company Blackmores, the market leader of healthcare services in Australia and its sustainability practice in order to improve its sustainability quotient. The company has consciously applied a range of strategic as well as operational initiatives in order to improve its sustainability as well as moving towards offering superior transparency regarding the environmental impact of the company. The environmental as well as social impacts of the company have been discussed along with its history, location and products. A gap analysis has been performed to calculate the gap between the information provided by the company in its annual report with information collected the other sources as per GRI guidelines, which would be beneficial for the investors and shareholders as well as other stakeholders of the company.        

The company Blackmores is an Australian company and considered as one of the biggest company in healthcare sectors and market leader in Australian on their healthcare sector. The company was established more than eighty years back. The company was started it business operation in the years of 1930 by Maurice Blackmore, who was an English immigrant and his thought was ahead of his time. He initiates the company with a vision to provide the society better healthcare with natural herbs and naturopath treatment for ensuring the better health of the people of the society (Bernard, Abdelgadir, & Belkhir, 2015). Throughout the years of its operation the company has achieved several awards and recognitions and become one of the most trusted brands in Australia. The company has also demonstrated significant economic growth throughout the years and listed among top 100 companies in ASX. The company has mainly vitamins products and about 250 types of vitamins products use to be produced and sold by the company. Besides this, huge range of vitamins products, the company has good range of minerals and herbal products and wide range of nutritional supplements as per the needs and demand of the customers. Besides this, the company has some exciting range of healthcare services, which are useful and popular among the people. The company is opened at Warriewwood on Sydney’s Northern Beaches and the campus of the company provides a standard work place for the new generation that focus on a balanced approach to health, life work and the environment. The size of the campus is around 25,000 Square meters and more than 400 staff works each day.             

The company provides great emphasis on the development of a sustainable business and reduces the environmental impact of the company and in this way the company tends to improve its social acceptance, as presently every public is aware of the environmental impact (Chen, Feldmann, & Tang, 2015). For several reasons like excessive use of automobile and increasing number of factories enhance the pollutant in the air thus enhance the pollution level of the atmosphere. As a result of the pollution, the presence of green house gases, like carbon monoxide, methane has been increased substantially that is the main cause of global warming, which is considered as a danger to the world and the society. In this context the consumer prefers the firms, which are environmentally sustainable (Harrison, Milbers, Mihic, & Anis, 2016). For these reasons the contemporary business organizations provides great emphasis on developing effective CSR strategies in order to establish them as the socially responsible and environmental friendly business organization. The undertaken company Blackmores has been awarded by several recognized organization for its sustainable business practices. The campus of the company has several sustainable elements (Jacobson & Sowa, 2015). The energy is supplied to the campus by gas fired tri-generation plant due to this the emission of carbon die oxide has been reduced substantially. The temperature sensitive windows facilitate to access maximum fresh air and natural light to the campus so decrease the need for artificial light and the power consumption has been reduced considerably (Jones, Comfort, & Hillier, 2015). Beside this, the company use solar chimney that provide facility of natural ventilation. The company is trying to reduce the environmental concentration along with carbon foot print by the initiation of the company. The company save time for activates thus improve the efficiency of the workers. There are 71% of the wastages diverted from the landfill (Karuhanga, 2015). The company has developed environmental management system in order to manage the environmental impact of the company. The organic food waste from the factory of organic food products is used for producing green electricity. Besides this the company has adopted Recycling Label Plant Ark of Australia. The company has faced several threats with the novel initiatives schemes as well as procedures to improve the efficiency of the waste management company as well recycling the energy consumption of the company. The company’s waste implementation scheme enhances its capacities in managing waste streams as well as to set up a novel recovery plan and process (Jacobson & Sowa, 2015). Presently only 29% of the wastages sent to the land fill and the current percentage 29% and the diversion rate is 71%.       

Main body

The GRI report helps in the creation of sustainability report with depending on the organisation’s choice in accordance to the option created by the organisation. This report consists of strategic analysis, general disclosures, organisational profile, identification of the material aspects and the boundaries, stakeholder’s engagement, report profile, governance and ethics and integrity. The analysis provides the general view regarding the stakeholder’s management with providing subsequent support as per the guidelines of the report (Harrison, Milbers, Mihic, & Anis, 2016). The strategy and analysis draws information with thereby creating the strategic topic summarization. The report also provides the strategic statement which presents the vision and strategy of the short term, medium term and the long term views. The key achievements that are included in this case help in providing appropriate judgement and thereby the recognition of the standards are maintained with providing the performance with respect to the targets (“Interpretations on the G4 Guidelines, issued by the Global Sustainability Standards Board, are located at the end of this document, and are to be considered by all users.”, 2016). The challenges for the organisation are depicted with providing the goals for the achievement of performance and thereby the strategic approach seems to be satisfying the items that pertains the organisational approach.

The sustainability report of the Blackmores in the years 2015 and 2016 depicts the minimisation of the risks that are depicted in the environment of the organisation. The importance is provided to the common health and public safety which priorities the initial goal of the organisation. The sustainability for the organisation revolves around the community, employees, shareholders, governance and the investments made for the betterment of the future of the organisation (“Sustainability Reporting Guidelines”, 2016). The commitment provided for the sustainability provides the view for the creation of ingredient traceability, proven efficacy, quality and the strong demand with the engagement of high staff. It provides the report of the increment of inventory on hand with thereby creating direct source with the key ingredients. Strengthening the supplier relationship helps in the creation of the retention process with the sample for the selection of the ongoing tests and the quality evaluations. It also provides sustainable supply chain management in order to encourage the support and facilitate the environmentally and the socially responsible approaches for the supply chain management (Chen, Feldmann, & Tang, 2015).

The difference that is indicated in this report provides the differentiation related to the stakeholders and the shareholders of the both organisations. All the stakeholders are not shareholders but are the shareholders are represented as the shareholders. The shareholders are there in the sustainability report of Blackmores but the shareholders do not consists of any role in the GRI framework of standards (귄기환 & Jong-In Choi, 2015). These are the differences that are created in the both the industry which seems to be depicted in this case and thereby the differentiation with the GAP analysis is made that seems to be successful and there by the framework is depicted by the enhancement of the sustainability report.

GRI report on sustainability practices

The comparison provides the contribution for creating sustainable and tangible results which helps in the achievement of appropriate communication system. The transparency and the accountability comes from the clear communications with thereby helps in representing the versions of GRI released principles depicts the G4 version of the reporting principles (Supriyanto, 2015). The guidelines help in acting as global reporting initiatives. The benefits that are achieved by compiling GRI guidelines with the report provided by Blackmores Analysis seems to be benefitting the potential investors, shareholders and the other stakeholders of the business are as follows:-

The checking of the c-suite commitment: In general a leadership can be formed by recognising the external pressure from the government with thereby helps in recognising the stock exchanges, markets, investors and the society at large to be transparent. This implicates the clear communication process and thereby the progress is created by the enhancement of the sustainability objectives. The consideration of the senior management data needs to be thoroughly checked with creating the impact of the firm’s commitment and thereby the commitment is fixed in the term of time and money (Soni, Giboney, & Yee, 2016).  The management and the commitment create a support base for the sustainability and the drive base for the improvement of the organisation.

A mature materiality process must be considered

The current material issue and the priority for setting the materiality matrix up to date is created with focusing on the implementation of the right methods. The principle distinction between the G3 and the G4 guidelines are differentiated with creating emphasis on the process of reporting in order to provide the guidelines for the analysis which seems to be taking place and thereby the analysis helps in the creating the focus in regard to the present reporting (Singh & Diamond, 2015). For reporting issues that seems to be most relevant represents the relevant key stakeholders and at the same time they become the success for the organisation. Reporting switches from the completeness helps in maintaining the economic, environmental and the societal issues for itself and thereby it proves that the stakeholders and the society is kept at large position for the organisation (Santos & Sehnem, 2016). 

GRI Gap Analysis

The materiality focus helps in creating the user friendly environment with providing sustainability report and thereby the creation of the effort provides the sustainability report for the enhancement of the organisation. The GAP analysis helps in the creation of identity for the organisation with the usage of the GRI indicators which seems to be sufficient according to the new GRI G4 standard Disclosures (Ortiz & Marin, 2014). Furthermore the detection of GAPS helps in indicating the values with creating appropriate guidelines with providing appropriate implementation plan for the analysis              

Conclusion

The report consists of all the necessary reports that are depicted in this case study which provides the framework of the standards which are depicted for both the organisations i.e. the GRI and the Blackmores. The report consists of the workplace community with thereby creating the enhancement of the structures with presenting the structures of the business with the comparison made for the supply chain management. The environmental as well as social impacts of the company have been discussed along with its history, location and products.  Also the differentiation is created for both the organization in respect to the general standards and thereby the consideration of the implementation was mentioned accordingly.   

Sustainability report of Blackmores in 2015 and 2016

Major costs associated with the operations of the Global Therapeutics

The major cost associated with the operations of the Global Therapeutics includes clinical trials, non clinical studies, commercial supplies, marketing cost and other activities. The selling, marketing costs and manufacturing associated with the GBT440 and other products includes time and cost in order to expand the marketing and sales capabilities (Kroetz, 2016). The clinical practice also includes cost of commercial and clinical supplies that includes enrolling patients for the clinical trial in a timely manner. The cost is necessary to develop technologies, future acquisition and maintaining, protecting and expanding the portfolio of intellectual property.  Enforcing and obtaining of patents of biopharmaceutical is costly. The company has also to invest into the research and development of the products. Other cost includes salaries, equipment, rent and insurance. 

The cost associated with a company comprises fixed costs and variable costs. Fixed costs are the cost that does not change with the decrease or increase in the amount of products or services sold or produced. It is the costs that have to be paid by the organization (Kroetz, 2016). Variable costs are the expenses that vary with the production of goods. Therefore, it depends on the volume of production.    

The breakeven analysis will help to estimate and examine the margin of safety of the company on the basis of associated costs and revenue collected. It will enable the company to analyze different level of price relating to different demand level (Lin, Chang, & Chang, 2015). Therefore, it helps to determine the sales level that would be needed to cover fixed costs. The breakeven of point of Global Therapeutics is ($2750000+$880000=$3630000). Breakeven analysis is a useful tool to determine the production level or desired targeted sales mix. It looks at the fixed costs level in relative to the earned profit by each unit sold and produced (Liu & Tyagi, 2016). The net profit margin of a company can be increased with the increase in the revenue and decrease in the cost of production. The production costs can be decreased with the help of implementing appropriate strategies, policies and techniques. 

Break even analysis

Breakeven point

Protein Shakes

Revenue = Variable cost + Fixed cost

Revenue = $53,586.10

Power-up Vitamin Juices

Revenue = Variable cost + Fixed cost

Revenue = $53,586.60

Recharge Bars

Revenue = Variable cost + Fixed cost

Revenue = $48,685.75

To:

From:

Date:

Subject: The analysis of breakeven point and annual profit

The Blackmores should adopt and implement appropriate strategies in order to increase its sale of products as well as developing the market value of the company. The annual profit and breakeven analysis of the company can be enhanced with the increase in selling price and decrease in the variable costs and fixed costs (Entwistle, 2015). The increase in the sales of the products and decrease in the cost of the products will help to increase the profitability and market value of the company. The initiative imposes significant impact on the sales, mix, variable cost, fixed cost and selling price of the products. The increase in operation efficiency, internal control systems, maximizing flow of cash increasing quality of product, determining appropriate price level, adopting marketing activities will help to increase the profit (METAXAS & TSAVDARIDOU, 2016). The managers and finance department plays a significant role in the management of the costs and revenue of the company. The preparation of financial statements will help to determine and evaluate the revenue, expense, asset, liabilities, profit or loss of the company during a period of time. The breakeven analysis will help to estimate and examine the margin of safety of the company on the basis of associated costs and revenue collected (Miranda & Lovell, 2015). The management and allocation of resource helps to achieve the goals of the organization.

References

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