Background of Medibank Private Limited

Question:

Write a memorandum to the board of directors of Medibank Ptv Ltd. it must be memorandum form. report form not mark.
 

Medibank private limited

To:  The Board of Directors

From: MEDIBANK private limited

Date: 25.05.2016

Subject: Memorandum of technical aspects consolidation including annual report with financial statements of the group

The main business operation of the group focuses for providing the best health care service with the rising cost. It also focuses on the proper benefit claims that are arranged on the further cooperation with the creation of large and sustainable health care benefits for the growth and increment of the sustainability in the rising market competition (Elliott and Elliott, 2008). It also helps in signifying the values and the overheads management for the creation of proper benefits for the company or the group. Strong performance and the provision of the high quality health care are included for the proper enhancement of the business operations. The group consists of the members that include the community, team and the shareholders that creates support for the company and makes the company to feel proud for the creation of the MEDIBANK Community Fund (Epstein and Lee, 2011). Apart from all these, the company is also enhanced by the innovative ideas provided by the members for the process of innovative implementation.

The consolidated statements are helpful for the creation of the limitations which are created for the company’s financial statements. It is constructed both by the parent entity as well as the subsidiary entity for the proper maintenance of the individual structures in the group (Holton, 2012). Thus, it facilitates the usage of the enhancement that is created for the proper growth of the business group. Since the subsidiary statements are legally separated from the group, it represents that claims cannot be made by the parent for the increment of the profits in the subsidiary organisation. Hence in this case, MEDIBANK private limited could not claim on the profits that are earned by the MEDIBANK Community Fund (Kieso, Weygandt and Warfield, 2011). It creates the significant differences that in one way are helpful for the company for the considerations of the risks evaluations made during its own evaluation. Thus, the company creates a safeguard for itself for the proper continuation of the regulations regarding the maintenance of the information related to the financial statements of the company. Henceforth the consolidated statements are prepared by parent entity and the legal entity is created by the subsidiary company (Kieso et al., 2010).  

There are several different types of funding options available for the business organizations in order to raise requisite finance for the necessary business activities of the company. The companies use to raise fund from the banking institutes, besides this, the companies issue share and debentures for raising funds from the public (Kimmel, Weygandt and Kieso, 2007). Debenture is a debt fund, and for the debenture the companies have to give a fixed interest to the debenture holders, when the term of the debenture will be completed and the companies are obligated to provide this interest along with the capital to the debenture holders in any case whether the companies are making profit or not. Besides this, if the company incurring loss then also the company has to pay the amount capital along with interest to the debenture holders (Spiceland, Sepe and Nelson, 2011). The Medibank is an insurance company, which is mainly focus on the health insurance and it is Australia’s biggest private health insurance company. The company is using both the funding instruments shares and debentures in order to raise fund from the market. For shares the company has to pay share of the profits to the share holders but in case of loss the share holders has also incur the loss (Stittle and Wearing, 2008). Besides this the company has dedicated investors and bankers, from where also the company raise requisite fund for the required activities. The company has to provide bonuses to the shareholders and debentures holders in case of profit. 

Consolidated Statements and Subsidiary Entities

The general purpose of the financial statements is to provide information to the users of the financial statements and it is prepared as per the Australia Accounting Standards. The financial statements should be complying with the International Financial Reporting Standards as issued by International Accounting Standards (Warren, Reeve and Fess, 2005). The financial statement of the company reveals the corporate governance statement in order to maximize the corporate performance, maximum returns to the shareholders and its value, sustaining the development and success of the company. It includes risk management processes, corporate governance practices and policies and risk management processes. The audit committee analyses the financial statements of the organization in order to determine the value of the company as well as its performance in the current market environment (Wolf, 2008). The sustainability of the organization can be determined and evaluated on the basis of the information given in the financial statements. The income statement shows the expense, income and profit or loss of the company. It helps to determine the long term performance of the company. The annual report can be categorized as financial, regulatory, strategy and operational risks and it also includes economic sustainability risk. The solvency risk of the company can be analyzed with the help to calculating current ratio, debt equity and financial leverage ratio from the information given in the financial statements (Elliott and Elliott, 2008).

The non controlling interest is the amount of interest on the outstanding shares of the organization. The non controlling interest is shown in the balance sheet of the company. The non controlling interests are the amount paid on the outstanding shares of the company within the accounting year. The excess of transferred consideration and amounts of the non controlling interests in acquire over fair value of the share of the group of net assets acquired which is recorded as the goodwill (Epstein and Lee, 2011). On acquisition basis, the group determines the non controlling interests to acquire either at the fair value or at proportionate of the non controlling interest of net identifiable assets of the acquiree. The consolidated balance sheet of the company shows the non controlling interest. The balances, unrealised gains and intercompany transactions between the group organizations are eliminated and the unrealised losses are eliminated till the transaction provides the impairment of transferred asset.               

The goodwill use to be improved by the acquisition activities performed by the companies as it indicates good financial health of the company. As at the time of the better financial position the companies use to intend to acquire other companies (Holton, 2012). When the company by the efficient acquisition strategy achieve a good acquisition of a promising company then the reputation of the company is immensely increased. Thus, the acquisition strategy of the company has direct relation on the goodwill of the company. In bargain purchase any of traders either the buyer or the seller use to gain. In case of able to reduce the rate of the object the buyer achieves gain and if the rate of the object is not reduced then the seller do gain. In the financial statement, when the company buy any important thing or sale any important thing then it can be find (Kieso, Weygandt and Warfield, 2011).

Funding Options of Medibank

The foreign currency transactions are taking place in the case of the company MEDIBANK private limited. Thus the risks are also evaluated relating to the foreign currency transactions, for the creation of the growth of the company MEDIBANK private limited. The foreign currency contracts and the other related instrument derivatives are traded by the company. For the proper continuation of the trading, the company MEDIBANK private limited reviews its policies for the betterment of the foreign currency exchanges that also helps in forecasting the growth of the company and also enhances the growth of the limits and the credit expenditures. The trading of the exchanges is also included for the company MEDIBANK private limited which helps n the proper initiation of the expenses (Kieso et al., 2010). Thus it also helps in the initiation of the interests that are created by the company for the proper enhancement of the investments. The company’s risks are also related to the foreign exchanges that are created for the enhancement of the policies. The subsidiary company that are referred for the foreign subsidiary are the MEDIBANK Community Fund and the HATCHTECH Pty Limited. The HATCHTECH Pty Limited is a company of Biotechnology that is related to the international Federation of the Health plans. The other subsidiaries for the company are the Australian Health Management Group Pty Ltd and MEDIBANK Health Solutions Pty Ltd with their individual companies is also related to the growth of the company. As per the accounting of the financial statements, these companies consist of the current balances which consist of the ordinary shares (Kimmel, Weygandt and Kieso, 2007). It also helps in the generation of the proper structures for the environment and thus it also helps the company MEDIBANK private limited for the proper continuation of the foreign exchanges.

According to the Australian Security Exchanges or ASX, the company seems to have the growth with the ongoing years and the financial statements of the company MEDIBANK private limited is seemed to be providing the increment of the benefits that advantageous for the employees. In the year 2014, the benefit of the company is seemed to be 3.9 million but in the year 2015, the benefits achieved by the company are seemed to be 5.1 million (Spiceland, Sepe and Nelson, 2011). Thus, the company MEDIBANK private limited is seemed to be in a state of maximal profit achievement that is gained by the foreign exchange trades and the internal trading. Hence forth the company can be able to strengthen the base and also helps in securing the future perspectives and the benefits of the company. Thus it also helps the company to be benefitted by the removal of the challenges that are forecasted by the financial statement of the company MEDIBANK private limited.      

References

Elliott, B. and Elliott, J. (2008). Financial accounting and reporting. Harlow: Financial Times Prentice Hall.

Epstein, M. and Lee, J. (2011). Advances in management accounting. Bingley, UK: Emerald.

Holton, R. (2012). Global finance. Abingdon, Oxon: Routledge.

Kieso, D., Weygandt, J. and Warfield, T. (2011). Intermediate accounting. Hoboken, NJ: John Wiley & Sons.

Kieso, D., Weygandt, J., Warfield, T. and Kieso, D. (2010). Intermediate accounting. Hoboken, N.J.: Wiley.

Kimmel, P., Weygandt, J. and Kieso, D. (2007). Financial accounting. Hoboken, NJ: John Wiley.

Spiceland, J., Sepe, J. and Nelson, M. (2011). Intermediate accounting. New York: McGraw-Hill Irwin.

Stittle, J. and Wearing, B. (2008). Financial accounting. Los Angeles: SAGE Publications.

Warren, C., Reeve, J. and Fess, P. (2005). Financial & managerial accounting. Mason, Ohio: Thomson/South-Western.

Wolf, M. (2008). Fixing global finance. Baltimore, Md.: Johns Hopkins University Press.