Balance sheet and cash flow statement

MEMORANDUM
To: The Board of Directors of BHP.
From:
Cc:
Subject: Introduction of BHP and the aspects of its consolidation.
Date: 28th August 2019
This memorandum is issued to provide complete assistance to the board of directors and the
stakeholders of BHP’s, in case of realising the present market condition of the business along
with the compositions, business performance from the managerial points of aspects. BHP is
mainly the composition of different parent companies and subsidiary companies, joint
venture companies and some other related associates. According to the provision of AASB
10, each parent company needs to maintain a consolidated financial statement annually. In
the case of BHP, it’s a responsibility to keep the consolidated financial report in case of
providing the regarding and comparable financial information to the board of directors and
also to the individual stakeholders (Aasb.gov.au 2019). This organisation conduct their
operations over 20 countries around the world, and it has mainly three industries; petroleum,
mining and metals related activities. It is also engaged in manufacturing some commodities
like; coal, petroleum products, iron ore, nickel, copper and also potash (Huang 2019).
According to the provision of AASB 10 the parent company need to maintain the
consolidated financial statement, which is the combination of both the parent and subsidiary
companies financial statement, whether or not the subsidiaries are preparing their financial
report as a separate legal entity (Aasb.gov.au 2019). The main reason behind the preparation
of the consolidated financial report is to disclose all the relevant information to the
stakeholders and directors so that they would able to take proper economic and business
decisions. Generally, using the consolidated account, the stakeholder’s can able to analyse the
comparable reports for both of the parent and subsidiary company (BHP 2018). With the

consolidated statement, the BHP can maintain proper accountability because it is a
responsibility of the parent company to account the complete group activities.
Figure 1: Consolidated Income statement, Balance sheet, and cash flow statement.
In the annual report of BHP’s is representing the organization’s different policies relating to
the governance. In case of section 2 in the annual report 2018 shows some relevant

information regarding corporate governance policies, which is referring to various aspects of
the company’s operations. The main reason behind internal governance policies is to perform
the board of directors meeting, shareholder’s meeting, and for other supervisorial and
managerial meeting smoothly. For initial coordination between the stakeholders and the
company, it requires some proper internal and external system to arise the scientific and
efficient decisions of the company and also to provide the ultimate control and safeguard to
the interest of each and individual affected persons (Habib, Jiang, Zhou 2015).
An audit committee generally defined as the operating committee, which is mainly engaged
supervising and disclosing of the financial report. Followed the annual report 2018 of BHP’s
providing the complete details of their audit committee and also the performance of such a
committee concerning risk and management. Such audit committee is engaged in production
relating to maintaining the integrity of financial statement, supervision, disclosure,
investigation, related problems, information regarding whistle-blower, strength and weakness
of the management, required improvement inefficiencies, all the internal units and
departments need to operate as per the provisions of applicable laws etc. so that the
organization can able to achieve their desired objectives. In the Annual report 2018 company
disclose the name of individual persons who are related to the risk and audit committee
during the year (BHP 2018).
Figure 2: Members of Risk and Audit committee during the year 2018(BHP 2018).