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BU1002/BU1902 CASE STUDY WORKBOOK

Introduction to Real-World Annual Reports Company explored in the case study: Sea Link Travel Group Ltd Student Name and Id Number: Tashi Tendhar 13709721

Table of Contents

Overview:..............................................................................................................2 Part 1 – Introduction to Company Annual Report and Financial Statements.........5 Part 2 – Financial Statements................................................................................6 Part 3 – Financial Statement Analysis Tools...........................................................8 Part 4 – Group Response Instructions..................................................................11

BU1002/BU1902 – (BNE/SNG)

CASE STUDY WORKBOOK

Overview: The case study assignment is an assessment item worth a total of 30% of the final grade for this subject. Note; this assessment is NOT a hurdle assessment; however, students are required to attempt all assessments in order to pass the subject. The case study provides students with the opportunity to: 1. explore subject topics using a real-world example; 2. develop skills required for financial analysis; 3. work collaboratively on a piece of academic work; and 4. learn from their peers regarding their own behavior in group work. The questions in this case study workbook have been designed to introduce and prompt students to answer questions based on the concepts and principles learned the topic content throughout the study period. The workbook consists of; »

Part 1 – develop a background of the company and an overview of the company’s corporate governance principles.

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Part 2 – familiarise students with the published annual reports and identify differences between results over a period of time.

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Part 3 – conduct ratio analysis on the company annual report.

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Part 4 – prepare a comparative analysis of the 4 companies assigned to the group, summarise the findings and present as a response to the investor.

In your first tutorial class, your tutor will assign you a company for the case study assignment. You will work as an individual on the assignment completing all of questions for parts 1, 2 and 3 in the case study workbook. Once census date has passed, your tutor will assign you to a group with a maximum of 4 students. Each student in the group will be assigned a different company, this means that there will be 4 different companies within each group. Students may choose members for their group, but each member must have been assigned a different company for analysis. The purpose of the group work component is to conduct a comparative analysis of all 4 companies using the information prepared as individuals Before starting the written response you should read over the marking criteria sheet. The essay should be typed and APA referencing should be used (see http://libguides.jcu.edu.au/apa ). The written submission will be awarded a mark out of 100, which will in turn be converted to a score out of 30. This will be awarded collectively to each group member that has authored the group essay. Group Process The ability to “lead, manage and contribute effectively to teams” is a key JCU Generic skill and an important skill sought by employers. An important function of this assessment is for students to work effectively and on a collaborative basis. To facilitate this process, each group will have its own dedicated BU1002/BU1902 Group site on LearnJCU.

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Establishment of Group Site and Participation: You will have access to your group site within the BU1002/BU1902 subject site on LearnJCU once the groups have been formed after census date. Each Group site on LearnJCU will incorporate links to the following facilities: group Information, file exchange, group discussion, group journal and send emails. All students are required to use their Group site to document all group activity relating to this assessment. It is also expected that once the group site has been formed, each member of the group will upload the answers for their company to the questions in Parts 1 and 2 of the case study workbook. This is a progressive assignment, therefore students will need to continue to prepare answers for their company to the questions in part 3 of the case study workbook to be able to complete the group analysis. The academic staff on your campus will provide you with memo stating the due dates when these answers must be uploaded to the group site. Time will be allocated in tutorial classes for group work on the assignment to facilitate and encourage group collaboration. These tutorial classes will be compulsory for all group members to attend. The compulsory classes will be listed in the Subject Outline. Please use the group site on LearnJCU to provide supporting documentation e.g. meeting agendas and minutes and use the other facilities to communicate with group members regarding the response in part 4. Working in Groups »

Assessment Criteria and Skills Development: Assessment will be based on the criteria set out in the Subject Outline and or LearnJCU.

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It should also be noted that the Group site will provide the lecturer with information on the extent of each student’s contribution and how early, late and consistently they engaged with the site. This information may in some instances, where there seems to be an imbalance in contribution levels across a group and / or a formal complaint has been lodged, be used as a basis upon which to rescale the marks awarded to individuals within the group.

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Team Conflict and Disbandment: Should you have conflict in your group or a group member withdraws from your group or the subject, it is important to advise the lecturer as soon as possible and well ahead of the due date. Failure to upload content by the stipulated timeframes without reason may also be grounds for removal from the group. The lecturer will retain the right (after hearing claims from students and reviewing the Group site) to decide when a group should be disbanded. In exceptional circumstances, individual assessment options are available to students only after a concerted effort has been made to work with other team members. Where a student has been removed from a group, the remaining members will prepare a comparative analysis on the remaining companies. Students who will be asked to complete the assignment as an individual will be required to complete a comparative assessment of their assigned company with another company provided by the lecturer. The second company will be provided when the student has been removed from the group.

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Working in groups, under proper conditions, encourages peer learning and peer support. Individual students who do not collaborate within the specified timeframes may be removed from the group and will be required to complete the assignment as an individual. The comparative analysis will be based on the collaboration of remaining group members.

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Where a student has been removed from a group and will submit as an individual, the maximum weighting for the assignment will be adjusted to 20% for failure to complete in a group.

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Sometimes individual members of a group will not contribute equally to the task resulting in some students carrying higher workload in the group. This subject uses a peer evaluation sheet to alleviate student concerns about the contribution of individual group members. The lecturer reserves the right to reject peer and self-evaluations that are deemed inconsistent with the information obtained from the Group site.

Students who do not contribute to the group essay will receive zero marks for this piece of assessment.

Resources: Students will be provided with the following information: 

Case Study Workbook.

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Company Annual Reports for the past 3 years.

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Company financial data (excel spreadsheet) – to conduct ratio analysis.

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Link to the Company website on LearnJCU.

Students are not expected to research beyond these references for this assessment item. The case study contains questions related to weekly study topics for weeks 1 – 6 inclusive.

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CASE STUDY WORKBOOK

Part 1 – Introduction to Company Annual Report and Financial Statements The purpose of part 1 is to begin your exploration of your company’s annual report and corporate governance structure. Part 1 – Question 1: Write a background summary of your assigned company including the following: 

When and why did your company first commence operation?

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What is the main or core business of the company?

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Some companies are diversified and have investments in other industries, for example, Wesfarmers has diverse business operations that cover supermarkets, department stores, home improvement and office supplies; coal production and export; chemicals, energy and fertilisers; and industrial and safety products. Is your assigned company diversified? What industries does the company operate in? Does your assigned company operate solely within Australia or does it operate internationally? Identify the operational locations.

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HISTORY OF SEA LINK LTD Sea link Ltd is a public company in Australia that operates in travel and tourist services. It was founded in 1989, with the purchase of Kangaroo island sea link Business. It commenced services by October 13 under the Australia securities and Exchange by promoting travelers in Australia and tourist to explore on water and land. Sea Link is without a doubt the main driver of tourism to and on Kangaroo Island and made it an international market Sea link supports the community through its role as the major freight service provider and through the off of special resident fares and sponsorships to the education, sporting, health and community service areas on the Island. Se al i nkt r a v e lo pe r a t e si t sb us i ne s si ss e tupi nBa yi s l a nd, Br un yi s l a nd,Da r wi n,Fr a z e rI s l a nd, Gl a ds t o ne ,Mur r yRi v e rPe r t ha n dFr e ma nt l e ,Rot t ne s tI s l a nd,Sout hAus t r a l i aa ndka n ga r ooi s l a nd, St r a dbr ok ei s l a nd, Syd ne yHa r bour , To wn s vi l l e . Part 1 - Question 2:

(related content – topic 1)

What are the headings and sub-headings of the discussion on corporate governance? Note, if not presented in the Company Annual Report, review the Company website. Principle 1. Lay solid foundation for management and over sight. 1.1 Principles of the Board and Management The Board of Director is responsible for the operational and financial performance of the company with the over view of business strategy and improving its strategic direction. 1.2 Appointment of the director. Directors should be appointed to the seat with search on the experience, qualification, interest for the company and what the candidate to can bring the table. In which the company uses an external consultant to search on the candidate for any illegal activity. 5|Page

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CASE STUDY WORKBOOK

1.3 Written agreement with the directors and senior executives Non-Executive Directors are engaged by the Company under letters of appointment and Senior Executives are engaged under service contracts. These address the roles and responsibilities of individuals. Details of remuneration and key elements of contracts for Senior Executives are set out in the Remuneration Report in the Annual Report. 1.4 Company secretary accountability Where by the Company Secretary reports directly to the Directors, through the chairman for all company secretarial matters. 1.5 Diversity Sea link focuses on talent and workforce which renders competitive mind sets as well as ethnicity and cultural background who are experience and have perceptive on what ways they can provide for the company. 1.6 Board Performance assessment This is a process on the individual performance and assessments for the directors by the board with the use of an external consultant. With the results provided, the board act upon on the result. 1.7 performance evaluation of senior executives The evaluation is done through formal arrangement in which the performance of the executives are managed and taken care of by the remuneration committee. 2. Structure the board to add value. The Board oversee the management for the company and establishes a committee to help assist them in the process. The composition of the committees is as set out in the Company’s Annual Report. Each committee has a Charter approved by the Board, and maintains minutes of its meetings, circulated to all Directors. 2.1 remuneration and nomination committee. The committee is responsible for the following: • Remuneration policy and any changes to remuneration policy and practices for the Key Management Personnel (“KMP”) of the Company; • The remuneration for the Managing Director and members of the Executive Management Team who report to the Managing Director; • Performance based (at-risk) components of Executive remuneration, including targets for the Company’s financial performance as they relate to those performance based components; • Allocations made under all equity-based remuneration plans; • Remuneration for non-executive Directors including the Chair and Committee Chairs and payments to non-executive Directors for additional duties undertaken on behalf of the Company; • The review and assessment of the effectiveness of the Company’s remuneration policies; • Corporate Governance process relating to remuneration; • The Remuneration Report and processes supporting its preparation; • Board composition and Board skills matrix; • Director, Board and Committee performance assessment; • Board succession planning; • Managing Director and Senior Executive succession planning 2.2 board skills matrix The skills required for the board skills are as follows:

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BU1002/BU1902 – (BNE/SNG)

CASE STUDY WORKBOOK

• Public Company;• Tourism & Transport Industries;• Tourism/Marketing/Sales; • Finance / Accounting; • Risk Management; • Strategic Planning; • Government Relations; • Mergers & Acquisitions; • Legal / Regulatory / Business contracts • Board Corporate Governance; • Industrial Relations / People Management; • Marine and Asset Knowledge – vessels, buses 2.3 and 2.4 Director’s Independence The Board is conscious of the need for independence and requires Directors to disclose where a conflict of interest may arise. Should that occur, the relevant Director(s) leave the meeting to ensure a full and frank discussion of the matter(s) under consideration by the rest of the Board. Those Directors who have interests in specific transactions or potential transactions do not receive Board papers related to those transactions or potential transactions, do not participate in any part of a Directors’ meeting which considers those transactions or potential transactions, are not involved in the decision making process in respect of those transactions or potential transactions, and are asked not to discuss those transactions or potential transactions with other Directors. 2.5 Independent Chairman and Managing director The chairman is an independent director in which the Chairman and managing director are separated. 2.6 Company induction and professional development of Directors. The Company has a program for the induction of new Directors. This induction covers all aspects of the business including the provision of information, past meeting details, business plans, access to Senior Management and site visits to ensure that the new Director can fulfil their responsibilities. 3. Act ethically and responsibly 3.1 code of conduct The standards expected of all employees embodied in the code include to: • Be honest and act with high standards of personal integrity; • Act in the best interests of the Company and not do anything that would negatively affect SeaLink’s reputation; • Carry out their role to the best of their ability; • Treat others with respect; • Carry out their role safely; • Comply with the laws and regulations that apply to SeaLink and its operations; • Comply with SeaLink’s policies and procedures; • Not participate in any unethical activity, including the giving or receiving of improper payments or benefits; • Take proper care of SeaLink confidential information, and not take advantage of SeaLink property or information for personal gain; and • Speak up if they become aware of conduct by anyone else that does not meet the requirements of our expected standards. 4. SAFEGUARDING INTEGRITY IN CORPORATE REPORTING 4.1 Audit and Risk Committee This Committee provides assistance to the Board in fulfilling its corporate governance responsibilities in relation to the Company’s effectiveness of its control environment in the areas of business risk, financial risk, and compliance with legal/regulatory requirements. The ommittee’s primary responsibilities are to: 7|Page

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CASE STUDY WORKBOOK

• Assess whether the Company’s external reporting is legally compliant, consistent with committee members’ information and knowledge and suitable for Shareholder needs; • Assess the management processes supporting external reporting; Liaise with the external auditors and ensure that the audit review is conducted in an effective manner; • Make recommendations for the appointment or removal of auditors; • On an annual basis, assess the performance and independence of the external auditors; • Monitor the coordination of the internal and external audits in so far as they relate to the responsibilities of the committee; • Recommend to the Board and then promulgate clear standards of ethical behaviour required of Directors and key executives and encourage observance of those standards; • Recommend to the Board and then promulgate and maintain a sound system of risk oversight and management and internal control which: o Identifies, assesses, manages and monitors risk; o Informs investors of material changes to the Company’s risk profile; and o Ensures compliance with all environmental and occupational health and safety regulations and legislation. a. – Financial Declarations from the Managing Director and Chief Financial Officer (CFO) The Managing Director and CFO are required to make a declaration that the Company’s financial reports present a true and fair view in all material respects of the Company’s financial condition and operational results and are in accordance with relevant accounting standards, and to provide assurance that the declaration is founded on a safe system of risk management and internal controls, and that the system is operating efficiently in all material respects. 4.3 – External Auditors The policy of the Company and the Audit Committee is to appoint an external auditor who clearly demonstrates quality and independence. The performance of the auditor is assessed by the Audit and Risk Committee annually. The external auditor is required to attend the Annual General Meeting and be available to answer any shareholder questions about the conduct of the audit and the preparation and the content of the audit report. 5 – MAKING TIMELY AND BALANCED DISCLOSURE 5.1 – Disclosure Policy The Company complies with the continuous disclosure obligations of the Corporations Act and ASX Listing Rule requirements to disclose immediately to the ASX and the market any information concerning the Company that a reasonable person would expect to have a material effect on the price or value of the Company’s shares. This helps ensure that all shareholders and investors have equal access to the C...