Business report for Coca-Cola...

Subject code and Subject Name: ACCY801: Accounting and Financial Management

Submission Type: Online

Assignment Title: Business Report-Coca Cola Amatil Limited

Family name: ……………………………………………………………..

First Name: ………………………………………………………………..

Student number:……………………………………………………..

Contact Number: ……………………………………………………

Email:………………………………………………………………………

Company Summary

Coca cola Amatil is an Australian company that operates in the competitive beverage industry. The company has subsidiaries in Fiji, Indonesia, New Guinea and New Zealand. The company has more than 130 brands in it is brand portfolio which makes it one of the company with several beverage brands in the world. Presently, the company has more than 13,000 employees in areas that it operate with more than 950,000 customers in a target market of about 270, 000 population. The company currently has 36 production plants and more than 45 warehouses in areas that it operates which makes it easy for the company to distribute its products to demanding customers (Chance, 2017). The main products that are produced by the company include carbonated drinks, coffee, alcoholic drinks and non-sugary drinks. However, the company has been able to venture in other beverage other than alcoholic and carbonated drinks. The company has been able to attain its current success because of the able management team lead by the company directors who have been the engine that is driving the company. Ethical decision making at the company has been another thing that has contributed to success at Amatil Company. The company has been able to make good investment decisions that are strategic which has also been another reason for its success. The year 2017 presented mixed fortunes for the company. The overall company performance in 2017 indicates that the company’s strengths is in it is divert of brand portfolio (Chance, 2017). The company shares revenue increased by 2.2 percent but its trading revenue reduced by 2.8 percent. Although the company performance in 2017 can be termed to be average, the company was not able to avoid challenges that come with managing a huge company with several subsidiaries. Trade trajectory in Australia where realized but other subsidiaries such inn Fiji and Papua New Guinea reported reduced trade revenues.

Board of Directors Details

No	Name	Age	Gender	Career History	Remuneration	Marital Status	Education
1	Ilana Atlas Chairperson	62	Female	Experience in business, worked at Westpac Banking Corporation, worked as a lawyer for 22 years	490,000	Married	Bachelor of Jurisprudence (Honors) and Bachelor of Laws (Honors) (The University of Western Australia); and Masters of Laws (The University of Sydney)
2	Alison Watkins-Group Managing Director	53	Female	Former managing director at GrainCorp Limited, was also formerly a partner with McKinsey & Company	4,228,408	Married	Bachelor of Commerce (University of Tasmania); Fellow, Australian Institute of Company Directors; Fellow, Chartered Accountants Australia and New Zealand; and Senior Fellow, Financial Services Institute of Australasia.
3	John Borghetti, AO-Non-Executive Director	61	Male	Has worked at Qantas as part of his 40 years in Aviation industry, worked as chief executive officer and become a managing director Virgin Australian Airline Group	169, 100	Married	Bachelor in Business Administration (University of Melbourne)
4	Catherine Brenner-Non-Executive Director	45	Female	Has worked as acquisition, privatization, merger and capita raising advisor as a senior investment bank, financial advisor, and worked as a public company director. She has also chaired remuneration, nomination, audit and risk safety committees	169, 100	Married	Bachelor of Laws and Bachelor of Economics (Macquarie University); and Master of Business Administration (MBA) (Australian Graduate School of Management)
5	Julie Coates-Non-executive director	55	Female	She is the managing director of Goodman Fielder Australia and Goodman Fielder New Zealand, worked at Woolworths limited and was once managing director of Big W, Chief Logistics Officer. She also worked a human resources director at the same company. She was also a board member at Woolworth Limited’s management board.	169, 100	Married	She has Bachelor of Arts and Diploma of Education (University of Melbourne); she also has Advanced Management Program (Harvard University)
6	Martin Jansen Non-executive director	58	Male	Mr. Jansen was formerly the regional director for Bottling Investment Group in China and managed the entire Asia and middle east. He was introduced to Coca-Cola company in Egypt as chief operating officer. He was appointed the managing director for Coca-Cola anchoring 12 countries in Africa and Asia. He is currently working as a director of Equatorial Coca-Cola bottling company.	169, 100	Married	Bachelor of Commercial Economics (HEAO Groningen, Netherlands); and Graduate of the Executive Development Program at Northwestern University Kello_ School of Management.
7	Krishnakumar Thirumalai- Non-executive director	57	Male	He is currently the Coca-Cola company president in India and south west Asia. He also worked as the regional director for TCCC in the west Asia nations. He is an expert in sales, marketing, emerging markets, distribution and supply. He also have vast experience in the fast moving consumer goods.	169, 100	Married	Bachelor of Engineering (Electronics and Communication (Madras University); MBA (Indian Institute of Management); and Advanced Management Program (Wharton Business School).
8	Paul O’Sullivan-Non-executive director	57	Male	He has vast experience in banking, telecommunications and oil and gas sector. He has worked in Australia and outside Australia where he worked with Singapore telecommunication company. He was also the chief executive officer of Optus. Apart from these positions, Paul also worked with Colonial Group and the Royal Dutch Shell Group in Canada, the Middle East, Australia and United Kingdom.	169, 100	Married	Bachelor of Arts (Economics) (Trinity College, University of Dublin); and Graduate of the Advanced Management Program (Harvard University).
9	Mark Johnson	58	Male	He was the CEO of PricewaterhouseCooper. He worked for the company in different senior positions which he held for more than 30 years of his career. He has vast experience in auditing, due diligence, risk and governance, accounting, and fund raising.	169,100	married	Bachelor of Commerce (The University of New South Wales); Fellow, Chartered Accountants Australia and New Zealand; CPA Australia; and Fellow, AICD.

Board of Directors Assessment

There is no doubt that Coca-Cola Amatil has been able to attain its current success because of the several able and vast experienced members of its board of directors. It is true that experience is the best teacher and it what contribute immensely to the success of every organization (Fund, 2017). This is true based on the experience that members of the board at Amatil bring to the organization. With an average of about 55 years, Amatil board of directors has all the required experience to ensure that the company is successful. Beginning with the very Chairperson, Ms. Atlas has vast experience in different business field more so finance which is highly required to manage such a vast organization. The expertise that she brings to the board from the banking sector cannot be measured. Apart from the banking expertise, she is also well vast in law which make it easy for her to run the company. Diversity is another thing that is very clear from the composition of the board members. The board is made not only of women with high experience and expertise in different fields but it is also made up of men with long working experience in different fields of business and management (Chance, 2017). Most of the recent industrialists have indicated that diversity is gender and age in organizational leadership is very important. This is directly witnessed at Amatil Company and the leadership of this organization act as the living proof of this argument. Expertise and experience are not the only things that are important in organizational success. From the perspective of Coca-Cola Amatil, it is very clear that leadership is very important as far as success of the organization is concern. Effective leadership is reflected in the board members at the company as it is made of leaders with vast experience from different field of business and professional endeavors.

Investment and Financial Decision Made In 2017

Coca Cola Amatil company made several financial decisions in the year 2017. Through its strong relationship with Coca Cola Company, the company made a huge decision to introduce incidence pricing its Australian market (Chance, 2017). The company also decided to commit itself to the Accelerated Australian Growth Plan of which it was to help in finance the program. This are two bold financial undertaking as they will not only increase the company customer base but will also enhance the company’s social corporate responsibility. The incidence pricing will increase the popularity of the company products and make the company more competitive in the vast competition-oriented industry. The company in the same where initiated an on-market share buy-back initiative. The program was completed in November and through it, it was able to buy shares at an average of $8.84 per share and spent a warping $350 million (Chance, 2017). As expected, the buy-back program was able to recover the shares and return them to the company shareholders. The company was also now in position to balance and maintain a strong balance sheet which gave the company enough funds to invest in other areas where opportunities presented. It was because of this that the company made a decision in the same year to introduce new product development initiative in multiple markets.

ASX and CGC Key Recommendations

No	Ask Key Recommendations	CGC key Recommendation
1	Organizations should have a well-established board of directors	Organizations should ensure inclusion and diversity
2	Organizations should publish their financial report every year	Organizations should enhance communication with stakeholders through publication of reports
3	Organization should ensure that its board of directors follow the required structure and roles of the board members are well spelt	Organizations should ensure that they have well developed policies and practices that guide its internal and external conduct.
4	The organization should have established corporate governance framework to ease of governance.	The organization should have a well-established risk framework that will protect its internal stakeholder’s practices.

Coca Cola Amatil Audit Firm

Coca-Cola Amatil is a huge company that involves several activities in its operations. The company is audited by a company Ernst & Young that has its headquarters in Sydney Australia (Isnasari et al, 2017). The Ernst & Young is of the views in their report that their independence cannot be compromised because they conduct the audit based on the Australian Accounting Standards and the Corporations Regulations 2001. The company’s independence is also achieved through the observation of the auditor’s responsibilities as described in Auditor’s Responsibilities for the Audit of the Financial Report section of our report. The company believes that the Amatil Company provided sufficient accounting evidence that was required for the company to conduct a genuine audit (Isnasari et al, 2017). The company is of the views that their main focus in the audit focused on issues that were of professional judgment which were well addressed by the Coca Cola Amatil organization and they were satisfied by the financial reports that they were provided with as evidence. It is in this regard that Ernest & Young auditing firm is of the views that the audited report meets all the ethical and professional standards of auditing and it can be relied on in the future.

Measures To Adhere To Ethical and Ethics in Judgment

Amatil Company is one of the biggest known organizations in Australia in matters assets and size. In this regard, the company is expected to face several challenges that come with large scale operations (Ashley, 2017). Ethics and ethical practices are the major issues that affect the existence and success of any organization. In this regard, Coca-Cola Amatil has put in place several measures to ensure that its employees make judgments based on ethics and ethical practices.

To start with, the company has established two major policies that guide the activities of its employees (Isnasari et al, 2017). The company has established a new code of conduct that requires its employees and other stakeholders to conduct their business in fairness, lawfully, and morally.

The organization has also developed a long and standalone policy that focus on anti-bribery, corruption practices and rights of all its stakeholders.

To also ensure that there is transparence in the company, the company has formed several committees that look it the affairs of its employees and other stakeholders (Ashley, 2017). These committees include audit and finance committee, nomination committee, people committee, risk and sustainability committee and related party committee which are aimed at protecting the rights of the people in the organization and ensure that all practices are done in ethical ways.

Top Five Investors at Amatil and Their Significance

Amati has been able to rise and it currently offer around 130 products to the market. This has not been able because of the company working in isolation (Fund, 2017). The company has several shareholders and partners that has made it to be possible.

One of the leading shareholder and partner is Coca-Cola Company. By year 2017, Coca-Cola was earning more than 34% of the company’s total shares. Coca-Cola Company has been very important partner to the company because of the strategic moves that it has been able to help the company achieve (Fund, 2017). The company has used helped the Amatil company in conducting its marketing activities all over the world. Secondly, this is every important shareholder as it also provide raw material to the company.

The other important investor in the company is Monster Company. This is every important investor because of the fact that it does not only own shares in Amatil company but the company has entered into an agreement to allow Amatil manufacture and distribute its Monster energy drinks and other products which has contributed immensely to its product portfolio.

Beam Santory is another very important investor in Amatil Company. The investor is very important to the company has it has given Amatil the rights to sell and distribute Beam Santory’s premium spirit in Australia and in New Zealand (Ashley, 2017). This is a very important investor as has helped the company to add to its product portfolio.

The other leading investor at Amatil is Molson Coors International. Molson Coors International is a very important investor to Amatil Company as they have entered into an agreement to distribute Molson Coors products in Australia (Ashley, 2017).

Casella Family Brands and Australia Beer Company is another major investor in Amatil Company. The company has entered into an agreement with Casella Family Brands to for a business venture that will form the Australian Beer Company (Ashley, 2017). This was a huge boost to the company product portfolio as the company produce variety types of beer drinks.

Financial Statements of Coca Cola Amatil Limited for 2017 Analysis

From the analysis of the company’s financial statements, it is true that the company has been on a growth trend from 2016-2016.

Liquidity of the company

Current assets	Current liabilities	liquidity	year
3104.8	1843.1	1.68	2016
2799.6	1838.8	1.5	2017

From the calculation, it is very clear that the company liquidity has reduced drastically which means that it is reducing its debts and increasing its cash.

Efficiency

The company’s efficiency has been increasing year in year out. From the analysis of the financial report, it is very clear that the company has been able to reduce its accrued salaries. This is a clear indication that the company is becoming more efficiency in its operations (Fund, 2017). The company has been able to increase its financial efficiency something that has reduced its accrued salaries.

Leverage

Leverage is any technique that organizations use to debts rather borrowed money to fund the purchase of assets instead of using fresh equity. This is done by most organizations to ensure that the organization reduce the cost because of equity tax that may result from the fresh equity. From the analysis of the financial statements, it is true that the company has been reducing its equity and increasing the debt which implies that the company has been opting for borrowing cash to fund its new assets other than opting for equity (Fund, 2017). This is important in most cases as the company is able to reduce its long-term liabilities as it increases its assets in the process.

Profitability

Profitability is the ability of a company to make profits. In accounting, profitability of an organization is determined by subtracting the costs rather expenses from revenue. All organizations in the business work to ensure that they get profits and it is because of this that they work hard to ensure that they are competitive enough to overcome their competitors. Analysis of financial states at Amati indicates that the company has been profitable for the last five years (Fund, 2017). The revenue of the company has been more than the company expenses for the last five years. This is clear indication that the company has been having a huge profit margin. The company has been able to grow and open up new subsidiaries because of its huge profitability.

Market value

Market value is the price any product will be sold at when taken to the market. It is also a term that is used to refer to market capitalization in accounting practices and in publicly traded business organizations. Market capitalization is calculated by multiplying the number of available shares by the market prevailing prices of the shares. From the analysis of the financial statements, it is true that Amalti Company’s products are fetching high prices in the market.

Cash flow management

Cash flow management is the process that publicly traded organizations use to track the amount of money coming in and going out of the organization (Fund, 2017). It is the measure of how much money the company is receiving at a particular time from one point to the other. In accounting, cash flow management is to analyze the changes in liquid money in the organization.

Overall performance and financial status

The company performance in general has been positive. From the analysis of the financial statements, it is very clear that the company overall financial performance is positive since the company has been making profits year in year out (Fund, 2017). The financial status of the organization is perfect given the positive flow of the money in and out of the organization.

Conclusion

The main products that are produced by the company include carbonated drinks, coffee, alcoholic drinks and non-sugary drinks. However, the company has been able to venture in other beverage other than alcoholic and carbonated drinks. The company has been able to attain its current success because of the able management team lead by the company directors who have been the engine that is driving the company. Ethical decision making at the company has been another thing that has contributed to success at Amatil Company. The company has been able to make good investment decisions that are strategic which has also been another reason for its success. The year 2017 presented mixed fortunes for the company. The company has had a perfects and positive financial performance. Leadership is another factor that has increased the expansion and profitability of the organization. If the company continues like this, it will be the best company in the world gradually.

Bibliography

There are no sources in the current document.

References

Ashley, R. (2017). Coca-Cola Amatil: Insights from the company monitor. Equity, 31(6), 16.

Chance, M. J. (2017). Quality Control Air Produk Minuman Berkabonasi Fanta Strawberry RGB 295 Ml Secara Mikrobiologi Di PT Coca Cola Amatil Indonesia Central Java.

Fund, M. B. (2017). Annual Report to Shareholders. Manhattan Bond Fund.

Isnasari, N., Rahadjo, M., & Dewanti, N. A. Y. (2017). EVALUASI KINERJA SISTEM PENGOLAHAN AIR LIMBAH PT. COCA-COLA AMATIL INDONESIA CENTRAL JAVA. Jurnal Kesehatan Masyarakat (e-Journal), 5(5), 790-797.

Wilson, R. E. (2017). Coca-cola amatil: A bottler recharging growth with energy drinks. Kellogg School of Management Cases, 1-15.