Sustainable Workplace Policy Implementation

This assignment delves into the implementation of sustainable workplace policies. It explores how organizations can develop and execute effective strategies to promote sustainability within their operations. The document emphasizes the importance of stakeholder involvement, clear communication, and continuous monitoring for successful policy implementation. It also highlights the benefits of sustainability for businesses, including enhanced reputation, cost savings, and improved employee morale.

MORTGAGE BROKING
Table of Content

s
ASSIGNMENT 1......................................................................................................................................1
ASSIGNMENT 2......................................................................................................................................5
PART A THE CLIENT................................................................................................................................5
1. Prepare needs analysis and fact finding document.......................................................................5
2. Proposal Documents......................................................................................................................6
PART B THE LENDER...............................................................................................................................9
ASSIGNMENT 3....................................................................................................................................14
QUESTION 1.........................................................................................................................................14
Describe gathering of information when establishing the client’s complex lending requirements. 14
QUESTION 2.........................................................................................................................................14
Describe how you record and document your interaction with clients...........................................14
QUESTION 3.........................................................................................................................................14
Describe how you research and consider complex broking solutions based on client’s needs.......14
QUESTION 4.........................................................................................................................................15
Describe evidence of how you identify and manage risk when dealing with clients with loan
requirements...................................................................................................................................15
QUESTION 5.........................................................................................................................................16
Give example of presenting loan options to the client....................................................................16
QUESTION 6.........................................................................................................................................17
Before presentation, identify any concerns that the client may raise and what preparations was
completed to respond these concerns............................................................................................17
ASSIGNMENT 4....................................................................................................................................18
QUESTION 1.........................................................................................................................................18
PART A.................................................................................................................................................18
PART B.................................................................................................................................................19
PART C.................................................................................................................................................19
QUESTION 2.........................................................................................................................................20
A TRUST...............................................................................................................................................20
What is a Unit Trust?.......................................................................................................................20
What is a Discretionary Trust?.........................................................................................................20
What is a Hybrid Trust?...................................................................................................................20
What is a Trustee?...........................................................................................................................20
Difference between different kinds of trust....................................................................................20

Provide an example of different types of Trust...............................................................................21
B COMPANY.........................................................................................................................................21
What are the legal requirements of a company?............................................................................21
What are the personal obligations of directors by law?..................................................................21
Can anyone be a director of a company?........................................................................................21
What is the minimum number of directors required?.....................................................................22
QUESTION 3.........................................................................................................................................22
What is a Balance sheet?.................................................................................................................22
What is a Profit and loss statement?...............................................................................................22
What is Depreciation?.....................................................................................................................22
What is Liquidity ratio?....................................................................................................................22
What is current ratio?......................................................................................................................22
What is Debt to equity ratio?..........................................................................................................22
What is cash flow statement?.........................................................................................................23
What is an asset?.............................................................................................................................23
What is Liability?..............................................................................................................................23
How is a Net profit determined?.....................................................................................................23
How would you define equity?........................................................................................................23
Allowable expenses under Australian taxation conditions..............................................................23
QUESTION 4.........................................................................................................................................24
Define the following........................................................................................................................24
Commercial Bank Bill.......................................................................................................................24
Invoice or Factoring finance............................................................................................................24
Chattel Mortgage.............................................................................................................................24
Asset finance product or Equipment Finance..................................................................................24
QUESTION 5.........................................................................................................................................24
List 6 risk management principles and state brief about the principle............................................24
QUESTION 6.........................................................................................................................................25
Explain the importance of categorizing all the risks........................................................................25
ASSIGNMENT 5....................................................................................................................................25
Define scope of sustainability policy................................................................................................25
Gather information from different sources to develop the policy...................................................25
Identify and consult stakeholders for the development of policy...................................................26
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Craft strategies for decreasing use of reducing toxic material and hazardous chemical use and
employing life cycle management approaches................................................................................26
Make recommendations for policy options based on likely effectiveness, time and cost...............26
Develop policy that reflects the organisation’s commitment to sustainability as an integral aspect
.........................................................................................................................................................26
Methods of implementation and performance indicators..............................................................27
Promote workplace sustainability policy.........................................................................................27
Inform those involved in implementing the policy about the expected outcome...........................27
Develop and communicate procedures to implement workplace sustainable policy......................27
Execute strategies for continuous improvement.............................................................................27
Establish and assign responsibility for recording systems...............................................................27
Document Outcomes and provide feedback to key personnel and stakeholders...........................27
Monitor records to identify trends that may require remedial action and promote continuous
improvement of performance.........................................................................................................28
Modify policy or procedures as required to ensure improvements are made................................28
REFERENCES........................................................................................................................................29
4

ASSIGNMENT 1
Borrower Details
Borrower 1
Name Andrew Mark Bisset
DOB 29/07/1965
Driver’s License 2945758
Address 12 Currumbin Close, Carindale QLD 4152
Period:
Tel: Mobile:
Status: Married Dependants:2
Employment Employer: Bisset’s real estate Ltd
Occupation: Real estate agent Period: 22
years
Income: $78000
Assets House at 12 Currumbin Close Carindale
QLD $560000
Share Portfolio $345000
Motor vehicles $60000
Furniture $85000
Cash at Bank $45000
Business Goodwill $250000
Plant Equipment $35000
Debtors $30000
Total $1410000
Liabilities Home loan with ABZ Bank $190000
ABZ Bank Credit Card $10000
ABZ Bank Overdraft $30000
Total $230000
Net worth $1180000
Borrower 2
Name Jane Elizabeth Bisset
DOB 15/06/1967
Driver’s License 2786454
1

Address 12 Currumbin Close
Carindale QLD 4152 Period:
Tel: Mobile:
Status: Married Dependants:2
Employment Employer: Bisset’s real estate Ltd
Occupation: Property manager
Period: 21 years
Income: $43000
Assets House at 12 Currumbin Close Carindale
QLD $560000
Share Portfolio $345000
Motor vehicles $60000
Furniture $85000
Cash at Bank $45000
Business Goodwill $250000
Plant Equipment $35000
Debtors $30000
Total $1410000
Liabilities Home loan with ABZ Bank $190000
ABZ Bank Credit Card $10000
ABZ Bank Overdraft $30000
Total
Net worth $1180000
Background Positive aspects of Andrew Bisset is his
long-term experience in real estate
business for 22 years that shows the
total corpus held by them. He jointly
owns 6 shops at 55 park road, Belmont.
Under the name of Bisset’s family trust,
they also run a shopping center whose
earlier value was $1450000 and at
present bank mortgage value is
$625000.
Out of 6 owned shops, 5 are rented out for a
sum of $96000 and the last one is utilized by
Bisset’s real estate business which pays the
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annual rent of $42000 top family trust that it
means total rental income of the family trust
is $118000 as this amount excludes the
excess $138000. The owner has spent the
longest time as a real estate agent and his
wife Jane as real estate manager for 21 years
but Bisset’s real estate business has just
formed in the last financial year. Higher
experience of these two borrowers ensures
the timely payment of the loan instalments on
time.
Loan Purpose Existing banker of the client Andrew and
Jane is ABZ bank who handles all the
business transactions of the clients. Shifting
from ABZ banker to another banker is due to
the higher interest rate on the commercial
loan is 7% and 9% for an overdraft. These
two rates are not suitable for an entity as their
quantity of business transactions is higher
than another business.
Land located at 423 Belmont road $600000
Total purchase price $600000
Add: Stamp duty $25000
Total funding required $625000
Less: Contribution $20000
Loan sought $605000
Facility Details Investment loan of $605000 taken by the
client for a long-term period of 10 years at
3% interest rate. The fixed interest rate is
considered by the client as variable interest
rates will increase the cost burden incurred
on an entity in a given span of time.
Funds Position Land located at 423 Belmont road $600000
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Total purchase price $600000
Proposed Loan $605000
Borrower’s equity $5000
LVR= 99.17%
Servicing capability Debt service coverage ratio
Profit after tax
Net profit* (1-30%)
$50000*(1-30%)
= $35000
Interest $52000
Depreciation $25000
DSCR= PAT+Depreciation+Interest/ Interest
= $35000+52000+25000/52000
= $112000/$52000
= 2.15
Higher debt service coverage shows the
caliber of an entity in paying off all their
debts with the available income held by an
entity.
Security Existing property held by Andrew and Jane
utilize as a collateral security in meeting
higher debt incurred by the business concern.
The shopping centre, 55 park road, Belmont
QLD 4171, Lot 43 on RP 9542, Zoning
commercial and Area of 1850 are existing
property held by the client used as a
collateral security.
Risk assessment and management The clients have good credit history as they
have taken home loan from ABZ bank and
bank overdraft secured by their residence for
$40000. The capacity of Andrew and Jane is
higher as they have salary income, rental
income, and partnership income to meet their
4

future obligations. Ownership of residence
and shops will act as a collateral security.
Recommendations  Joint ownership of shops to ensure
higher earnings
 Good credit history of the borrowers
 Net surplus of the borrower is
$1180000.
 Available cash at bank of $45000
 Higher Debt service coverage ratio of
2.15
 Higher rental receipts of $138000
 Existing properties held by all the
individuals Represents good source of
income
Attachments  Serviceability assessment
 Identity card of the client
 Bank Statements of Andrew and Jane
 Property papers of Bisset’s real estate,
and family trust
 Copy of home loan statements
 Copy of borrower’s income
 Copy of credit card statements
 Copy of bank overdraft
 Partnership deed
 Rental income copy
ASSIGNMENT 2
PART A THE CLIENT
1. Prepare needs analysis and fact finding document
 What type of loan you want to take?
 What is the maximum period of loan you want to take?
 Do you choose variable or fixed interest rate and why?
 From which sources, do you earn income?
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 Do you find stable or decreasing financial position of your firm?
 What is the current interest rate of your loan and how you compare the current interest
rate with the earlier loan?
 Do you think your current loan is better than your previous loan?
 What additional fees you need to pay for the current loan?
 Are you confident about the decreasing of debt over the years or not?
2. Proposal Documents
Submission for the client
To- Ray Henley and Steve Manning
Subject- Commercial Equipment Finance
From- XYZ broker
Date- 29-11-2017
Hi Ray and Steve,
This is to inform that your loan application has assessed after analyzing your firm’s
financial position to ensure the future cost compensation by you people. You run a successful
business of transportation with wide client’s base located in a conscious management
strategy. Payment terms and contract deadline is set as 30 days term period. They have
trading experience in this sector for 34 months with the solid business plan.
Security
They have seed capital of 500k taken from a private investor on a guaranteed return of
45k annually for a term of 5 years. Principal instalment payment of 100k annually along with
Owner occupied the property of $850000 with credit card limit of $25000, superannuation
$550000 and a motor vehicle worth $40000. Steve manning’s occupied the property of
$500000, credit card limit of $10000, superannuation worth $1500000 and motor vehicle of
$25000. Common cash account for their business is $25000.
Facility
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Current loan application of Ray and Steve is for commercial equipment
finance raised through this loan. This equipment finance has arranged to expand it’s in the
future to increase the overall earnings. Actual limit of the equipment finance is 500k to
purchase trucks and dog trailers. This loan is requiring in funding the lease of the second
depot at cost of $6000 per month to retain the current depot.
Lender details
A future plan of the client is to acquire Henman transportation to boost the current
earnings of the business concern. It is recommended to the client to convince the lender in
investing their business to get the desired return in exchange. They have two option available
to them includes meeting the leasing costs or arranging the whole sum of 500k for the
expansion projects.
Confirmation of requirements
Approval of the overall requirements of the ray and Steve to purchase the commercial
equipment finance of 500k for the expansion project will be approved by analyzing the entire
performance of the clients. A broker will give quotations of all loan offers by different
lenders to consider the best suitable loan as per the current position of an enterprise.
Personnel
Financial advisor of the Ray and Steve play an important role in guiding the business
towards the best suitable path to get the desired return over the years. Acquisition of Henman
transport is a result of the advice of the accountants who assess the financial performance of
the business.
Process
The current process is use to arrange the finance from the lender within 5-15 working
days.
 Generate reliable information and required documentation from the clients
 Provide proposal documents to client along with broker’s recommendations
 File completed application to the lender to seek their consent
 Lender investigates credit history of the client and confirms the loan application
7

 Property inspect by the lender’s selling agent
 Values of the property analyze b the actuarial department to assess the worth of the
collateral security.
 Broker advises the client about the minimum sum of insurance based on the
recommendation letter.
 Authenticity of the application checks by the broker to remove all the errors
 Returning attest mortgaged documents to the lender
 Broker will confirm the settlement between the client and the selling agent
Documentation
 Copy of application letter given to the lender
 Copy of property papers
 Copy of financial statements
 Copy of bank statements
 Copy of possession of land and income
 Copy of Guarantor of the application
Fees and charges
Particulars Interest rate Establishment fee Monthly fee
CBA 6.50% $750 Nil
Bank West 6.51% $700 Nil
Westpac 6.65% $850 $8
ANZ 6.49% $750 $10
NAB 6.69% $600 Nil
These are predictive 5 year fixed rates of different securities offers by different bank
along with different establishment and monthly fees. These interest rates will help an
individual in considering the best suitable future options.
Notes
It will include the summary of difficulties faced by the client while submitting their
loan application with the lender. Approval of the lender plays a significant role in getting the
8

loan to fund the need of the transportation company. The complexity of the overall process
imposes a burden on an entity to get the desired fund within the passage of time.
PART B THE LENDER
Borrower details
Name Ray Hanley
Status: married Dependants: 0
Employment Employer: Transportation company
Occupation: Partner
Income: $100,000
Assets Property $850000
Superannuation $550000
Motor vehicles $40000
Debtors $220000
Contents $100000
Total $1760000
Liabilities Debt $265000
Credit Card $25000
Creditors $100000
Total $390000
Net worth $1370000
Background Ray and Steve jointly own the successful
business of transportation with a large base
of customers. Financial accounts of ray show
increasing earnings over the years portray a
good image of the client.
Loan Purpose Equipment finance $500000
Total purchase price $500000
Add: Stamp duty $72000
Total funding required $572000
Less: Contribution $25000
Loan sought $547000
Facility Details Investment loan of $547000 taken by the
client for 20 years on a variable interest rate
9

@4% as this interest will beneficial for the
client in paying the interest only when they
take utilize loan amount.
Funds Position Owner property $500000
Total purchase price $500000
Proposed Loan $547000
Borrower’s equity $47000
LVR= 91.40%
Servicing capability Debt service coverage ratio
Profit after tax
Net profit* (1-30%)
$100000*(1-30%)
= $70000
Interest $18000
Depreciation $3000
DSCR= PAT+Depreciation+Interest/ Interest
= $70000+$18450+0/$18450
= $88450/$18450
= 4.79
Higher debt service coverage signifies the
ability of an enterprise in generating higher
earnings within a given span of time.
Security A superannuation fund is a retirement fund
act as a collateral security in paying off the
future obligations of the business. Motor
vehicle, credit card property owned by the
client in meeting all the expenses.
Risk assessment and management Cash flow position of the client is analyzed to
take decisions in the favour of the client. The
debt obligation is required in reducing with
the passage of time to improve the overall
business performance.
Recommendations  Tax is divided among two partners
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equally
 A tax deduction reduces the overall
tax liabilities.
 Higher income is invested into
different sources to generate income.
Attachments  Serviceability assessment
 Identity card of the client
 Bank Statements of Andrew and Jane
 Property papers of Bisset’s real estate,
and family trust
 Copy of home loan statements
 Copy of borrower’s income
 Copy of credit card statements
 Copy of bank overdraft
 Partnership deed
 Rental income copy
Borrower details
Name Steve manning
Status: Single Dependants: 0
Employment Employer: Transportation company
Occupation: Partner
Income: $100,000
Assets Property $550000
Superannuation $150000
Motor vehicles $25000
Debtors $220000
Contents $85000
Total $1030000
Liabilities Debt $368000
Credit Card $10000
Creditors $100000
Total $4780000
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Net worth $552000
Background Ray and Steve jointly own the successful
business of transportation with a large base
of customers. Financial accounts of ray show
increasing earnings over the years portray a
good image of the client.
Loan Purpose Equipment finance $500000
Total purchase price $500000
Add: Stamp duty $72000
Total funding required $572000
Less: Contribution $25000
Loan sought $547000
Facility Details Investment loan of $547000 taken by the
client for 20 years on a variable interest rate
@4% as this interest will beneficial for the
client in paying the interest only when they
take utilize loan amount.
Funds Position Owner property $500000
Total purchase price $500000
Proposed Loan $547000
Borrower’s equity $47000
LVR= 91.40%
Servicing capability Debt service coverage ratio
Profit after tax
Net profit* (1-30%)
$100000*(1-30%)
= $70000
Interest $27450
DSCR= PAT+Depreciation+Interest/ Interest
= $70000+$27450+0/$27450
= $97450/$27450
= 3.55
Debt service coverage ratio of Steve is less
12

than Rey Hanley.
Security A superannuation fund is a retirement fund
act as a collateral security in paying off the
future obligations of the business. Motor
vehicle, credit card property owned by the
client in meeting all the expenses.
Risk assessment and management Cash flow position of the client is analyzed to
take decisions in the favour of the client.
Debt obligation is require in reducing with
the passage of time to improve the overall
business performance.
Recommendations  Tax is divided among two partners
equally
 A tax deduction reduces the overall
tax liabilities.
 Higher income is invested into
different sources to generate income.
Attachments  Serviceability assessment
 Identity card of the client
 Bank Statements of Andrew and Jane
 Property papers of Bisset’s real estate,
and family trust
 Copy of home loan statements
 Copy of borrower’s income
 Copy of credit card statements
 Copy of bank overdraft
 Partnership deed
 Rental income copy
13

ASSIGNMENT 3
QUESTION 1
Describe gathering of information when establishing the client’s complex lending
requirements.
 Offering credit consultation service
 Suggesting the best lending options
 Analyzing the financial performance of the firm
 Submitting loan application with the lender
 Open end and close end questions asked by a broker to gather information about the
client
 English is the common language use by a broker to talk freely with the client
 Polite tone and unambiguous words are use to convince clients to get their personal
information.
 Complimentary service is offered to retain most of the customers with an entity.
QUESTION 2
Describe how you record and document your interaction with clients
 Needs analysis is use in which requirements of the client is recorded to suggest
lending options according to their requirements.
 A telephonic conversation of the client with the broker is use as an legal evidence for
record of all the information.
 Questionnaires filled by the client will help a broker in filing and submitting the
application on time.
 Third party confirmation is use to verify the income details of the client
 Excel sheet is used to complete the financial statements as per the correct accounting
format
 Recommendation letter offer by broker to the client is a record of the final
information supply to an individual.
QUESTION 3
Describe how you research and consider complex broking solutions based on client’s needs
· On first meeting with the client, information about the client is taken by the broker to
craft special strategies for improving credit performance of the client. Information gathered
14

from the client includes personal information, employment history, credit history, income
details, assets, and liabilities.
· Situation of the client is assessed in the form of determining opportunities and a
constraint which is considered while preparing loan application for the client.
· Loan structures and options are presented to the notice of the client out of which the
client will choose the best suitable option.
· Home loan is analyzed into various parameters such as economic, legislation, taxation,
legal and insurance to consider the desired loan type. Interest charge on the home is tax
deductible which, in turn, decreases the overall tax liabilities. Additional fees charged by the
bank increases cost burden.
· After getting approval from the client, financial advisor‘s advice is essential for the client
to include all the financial details to the lender in the application form.
· Interest rate, time period, instalments will change the decision of an individual while
choosing the best suitable loan options which gives a high level of flexibility to the client.
· Before, filling the loan application with the lender, financial details if the client will
verify by CPA to follow all the rules.
· Information included in the loan application is shared with the different parties by
sending an email about the status of the file simultaneously.
QUESTION 4
Describe evidence of how you identify and manage risk when dealing with clients with loan
requirements
Risk of the lending option has categorized into various criteria’s such as financial and
nonfinancial risks to determine the likelihood of the risks. Value of the property held by the
client is determined by the lender to know the actual value of the assets. Ascertained value is
compared with the previous value to know the gap in the value of the property.
· A concern to the loan application is communicated to the client by arranging a meeting to
discuss all the parameters of the application.
15

· Issues and complaints raised by the client are resolves by the lender within a short span
of time. A probability of risk is determined to complete the loan application with higher
accuracy.
· Stakeholders of the loan application is filed with the lender includes client and broker
· A standard of the industry is comply by the client by keeping watch on all the principles
and utilize the same in the working practices.
· Information on external industry trade patterns, interest rates are analyzed to decide the
suitable interest rate option of the client.
QUESTION 5
Give example of presenting loan options to the client
Different lending options offer by the broker too the client is assessed on various
parameters such as advantages, disadvantages, risks and financial implications to test the
efficiency of the business is mention as below:
Basis Investment loan Home loan
Advantages It helps in expanding the
business
It give shelter to an
individual with minimum
interest
Disadvantages Higher value of loan
increases higher interest
burden.
It imposes long term burden
on an individual
Risks Sudden rise in the interest
rate is not fruitful for an
entity.
Higher exit fees payable by
the client from its own
pocket.
Financial implications Negative gearing effect when
the income from the
investment is less than the
total costs arises on the
investments.
16

 Fees, charges and commission payable by lender to the broker will include in the total
sum paid by the client to the lender. The rate of commission range from 0.65% to
0.7% along with GST is upfront commission and trail commission starts from 0.165%
to 0.275% + GST.
 The compliance and regulatory guidelines follow by all the individuals who cover all
the fees and charges applicable on the loan application file by the client with the
lender. Hidden terms and condition will mention in the guideline to guide the client
about their future obligations.
 Documents such as financial statements of the client used as evidence to showcase the
financial performance of the business. It includes copy of income statement, balance
sheet and cash flow statement.
 Accountants and financial advisors analyses the financial performance of an entity to
show the actual earnings of the client.
 Requirements of the clients is to identify by filing the loan application
 Grievance redressal system set up by the lender to deal with all the internal and
external disputes.
QUESTION 6
Before presentation, identify any concerns that the client may raise and what preparations
was completed to respond these concerns.
Research and documentation materials
 Fact finding questionnaire given to the client to get the desired information from the
client
 Lenders details identify by the brokers
 Lending’s options identify according to the budget of the client
Alternative recommendations
It is recommended to client to expand their loan application by increasing collateral
security higher than the loan value to increase the chances of getting the credit.
Regulatory limits and financier guidelines
 Confidentiality maintained by the broker by keeping all the information of the client
secretly.
 Fixed fees charge from the client without increasing the charges
17

 Client can inquire about their credit application through mail, telephone and personal
meeting only within the business hours.
ASSIGNMENT 4
QUESTION 1
PART A
Ratio Formula 2014 2015
Risk
Grade
Current assets
3258
2
3519
7
Current liabilities
3512
8
3212
9
Current ratio Current assets/current liabilities 0.93 1.10 High
Inventory 5596 5876
Quick asset current assets-inventory
2698
6
2932
1
Current liabilities
3512
8
3212
9
Quick ratio Quick assets/current liabilities 0.77 0.91 High
Net income
3277
8
3582
5
Equity
4579
6
5144
8
ROE Net Inncome/Equity 0.72 0.70 Low
Net income
3277
8
3582
5
Assets
4579
6
5144
8
ROA Net income/assets 0.72 0.70 Low
Debt
5438
4
4342
4
Debt to equity ratio Debt/equity 1.19 0.84 Low
Debt to assets ratio Debt/assets 1.188 0.844 Low
Total liabilities
5438
4
4342
4
Equity
4579
6
5144
8
Leverage ratio Total liabilities/equity 1.188 0.844 Low
Interest 4372 3735
EBIT
3277
8
3582
5
Interest coverage ratio Interest/EBIT 0.13 0.10 Low
Net operating income
3277
8
3582
5
Debt service
2225
6
1129
5
18

Debt servicing cover
ratio
Net operating income/debt
service 1.47 3.17 High
PART B
Particulars 30-Jun-14 30-Jun-15
Net Profit before tax $ 32,778.00 $ 35,825.00
Potential add backs
Interest $ 4,372.00 $ 3,735.00
Depreciation $ 15,250.00 $ 13,400.00
Director's salaries/superannuation $ 32,000.00 $ 35,000.00
Other non cash items $ 500.00 $ 500.00
Non-recurring expenses $ 1,000.00 $ 1,100.00
EBITDA $ 85,900.00 $ 89,560.00
Taxation allowance $ 25,770.00 $ 26,868.00
Available for debt service $ 60,130.00 $ 62,692.00
Interest coverage ratio
Proposed deductible interest costs
Existing@% 4372 $ 3,735.00
Plus Proposed@2% 6050 6050
Total proposed interest cost 10422 9785
Proposed interest cover $ 8.24 $ 9.15
Debt service cover ratio
Existing overdraft 3600 2800
Existing loan payments 12696 12696
Proposed loan repayments 13598.52 13598.52
Total commitment proposed 29894.52 29094.52
DSCR $ 2.01 $ 2.15
PART C
Serviceability analysis is categorized into two segments to evaluate the efficiency of
debt utilize by an entity. It considers two variables such as interest coverage ratio and debt
service coverage ratio to tests the efficiency of the business. Interest coverage checks the
capability of the firm to pay off their obligations on time. Proposed interest a cost is
increasing from 2014 to 2015 depicts higher performance of the concern in meeting all
incurred costs. However, the debt service coverage ratio tests calibre of entire debt utilizes in
business to accomplish the desired firm’s objectives. Increasing Debt service coverage
portrays the image of an entity in front of all the external market users.
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QUESTION 2
A TRUST
What is a Unit Trust?
Single fund system establishes to facilitate the needs of a large number of people by
raising funds in a collaborative way. The fund is administered by a trustee with the help of
trust deed to handle all the disputes.
What is a Discretionary Trust?
According to English law, criteria’s included in the trust deed are flexible in nature as
these are framed by all the members as per their choice and convenience. Trustees play an
integral role in the case proceedings of the trust as they decide the share of the beneficiaries.
What is a Hybrid Trust?
Mixed traits of the unit and discretionary trust are renowned as hybrid trust, in which
beneficiaries have no assurance about the share they receive as the trustee will determine
their actual share.
What is a Trustee?
A trustee manages and supervises the entire trust by preparing a record of all the members.
They have the responsibility of managing the whole trust by taking decisions on the basis of
prima facie evidence.
Difference between different kinds of trust
Basis Revocable trust Irrevocable trust
Define It is that kind f trust which
can be revoked by an
individual at any time.
It is non controllable trusts in
which right once transfer by
an individual will not taken
back.
Ownership Principal lends the right to its
agent for managing their
property in absence of the
principal as it is known as
living trusts. Ownership lies
in the hand of the principal.
Ownership lies in the hands
of agent as in this kind of
trust the transferor gives the
right to the agent will not
taken back.
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Provide an example of different types of Trust
Charitable trust Special need trust Revocable trust
NGO Medical rehabilitation
centres
Property rights transfers by
son to his mother in their
absence.
B COMPANY
What are the legal requirements of a company?
There are various requirements for establishing a company in Australia is mention as
below:
 Registered premises
 Legal place of business
 Disclosing firm’s director’s personal information
 Financial statements and records
 Application fees
 Keep up to date with the changes in the company’s details
 Checking solvency of the business
 Act in the interest of the business
 Using appropriate information of an enterprise
What are the personal obligations of directors by law?
 Be honest with the company and act in the interest of the firm
 Investigate business matters with due care and diligence
 Protect entity from external and internal conflicts
 Safeguard the business from bankruptcy
 Report to the official liquidator in case of the insolvency of the business
Can anyone be a director of a company?
An individual eligible for the post of director of the company if they cross the age
limit of 18 years and give their consent for becoming the director. Some restrictions for the
post of the director include undischarged bankrupt, insolvent individual, a person banned by
ASIC, and an individual sentenced to imprisonment.
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What is the minimum number of directors required?
In Proprietor Company, one director is requiring who is a resident individual of the
Australia. For a public company, three directors are required and out of two lives in the
Australia.
QUESTION 3
What is a Balance sheet?
The financial position of an entity is tracked by preparing this statement that
determines the balance of the business in the form of higher liabilities and assets.
What is a Profit and loss statement?
The motive of the firm is to earn a higher profit by operating their business in the
external entity. Feasibility of the business is tested by preparing income statements that show
the burden of taxation on the desired profit.
What is Depreciation?
The decrease in the value of assets with the passage of time as these is noncash expenses.
There are two methods to calculate the depreciation are a straight-line method and written
down value method.
What is Liquidity ratio?
An asset convertible into cash is essential to meet all the short term liabilities imposed
on a corporation. Higher the liquidity of business better will be its desired output in a given
span of time.
What is current ratio?
It checks the compatibility of current assets by compensating higher current liabilities
to boost the entire strength of the firm. A higher current asset is required to pay off trade
creditors.
What is Debt to equity ratio?
Balance in an entity is essential to showcase the improved version of the business in
front of all the external market users. Debt and equity are two important ingredients for
preparing the capital structure. A different proportion of these two components strengthen the
overall financial position within a short span of time. Total liabilities are divided by
shareholder’s equity to know the influence of debt or equity in an entity.
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What is cash flow statement?
Cash is a liquid component that resolves the issue of liquidity trap to meet all the daily
routine expenses. Cash flow statement shows the net cash balance received by an entity from
the external source. Three segments of cash flow statements are operating, investing and
financing activities cover all the three financial statements integrated into one statement to
know the actual cash available in the business.
What is an asset?
Property owned by an individual held in a business is renowned as an asset. An asset
held for short term period is known as current assets and asset use for the long-term purpose
is known as a fixed asset.
What is Liability?
Obligation or burden of debt imposed on an entity in as particular financial year
refers to a liability. It includes debt, trade creditors, expenses which will payable by the firm
over the years.
How is a Net profit determined?
Tax deducted from operating profit is called as net profit from which all the expenses
such as selling and distribution, administration and tax expenses get deducted.
How would you define equity?
A stock owned by an individual in an entity that lends dividend every tear is regarded
as equity. Shareholders give money in exchange of equity share and ownership in Ann entity.
Allowable expenses under Australian taxation conditions
 Vehicle and travel expenses
 Clothing, laundry and dry-cleaning expenses
 Gifts and donations
 Home office Expenses
 Interest, Dividends and other investment income
 Self-education expenses
 Tools, equipment and other equipment
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QUESTION 4
Define the following
Commercial Bank Bill
It is a medium to raise money to meet the desired investment needs of the bank. In the
commercial bank bill, the interest remains the same for the total term period.
Invoice or Factoring finance
In this practice, an entity sells their trade debtors to the third party on discounting rate
from the actual market rate. This method is used by an entity to meet the problem of finance
as immediate cash is generated through this mode.
Chattel Mortgage
It is commercial car finance mortgage for long term purpose on movable property of
an individual.
Asset finance product or Equipment Finance
Equipment finance is that lending option in which loan taken by an individual for a
specific equipment such as truck or trailer for specific terms and interest rates.
QUESTION 5
List 6 risk management principles and state brief about the principle
Principle Outline of Principle
Creates and protects value Create objectives in reviewing the processes
and systems
Be an integral part of organisational
processes
Make informed decisions by considering
governmental guidelines.
Be part of decision making Prioritize the actions of an individuals
Explicitly address uncertainty Controls and treatments use to increase the
chances of gain and decrease the loss.
Be systematic, structured and timely Efficiency, consistency and reliability of the
generated output.
Based on the best available information Information gathers from the client to ensure
its survival.
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QUESTION 6
Explain the importance of categorizing all the risks
Risks play an integral role while creating the credit statements and filing the loan
application with the lender. A risk depicts the negative aspect which affects the performance
of an entity in a given span of time. There are two kinds of risks incurred by an entity such as
controllable or non-controllable risks which is an inherited factor in an entity. It is essential to
categorize the risks and prioritize them into various aspects such as low, moderate and high
risks. The condition of the business is determined by the ranking system of low, medium and
higher risks.
Various risks factors are life cycle, demographic, cost, economic environment,
political environment, buyer impact, and supplier impact, the threat of new entrant and threat
of substitute. These risk factors show internal as well as external industry factors in
generating higher earning of the business concern in a given span of time. Segmentation of
the overall risks into various aspects helps in avoiding overlapping of business activities that
helps in generating the desired income in short span of time.
ASSIGNMENT 5
Define scope of sustainability policy
Sustainability is a symbol of balanced interaction between artificial and nature
atmosphere. The interaction between these components is expressed into three factors such as
environment, social and economy (Hands and Anderson, 2017). Environments consider is a
parent whose Childs are society and economy. A change in the overall environment affects
the society and the economy of the country. Climate change in Australia will affect the lives
of the entire society which, in turn, affects the overall economy of the Australia as people will
migrate from one country to another.
Gather information from different sources to develop the policy
 Carbon Pollution Reduction scheme
 National Greenhouse and Energy Reporting system
 Greenhouse gas Reduction Scheme
 Minimum Energy Performance standards
Information has gathered from all these sources to develop the sustainability policy of
the workplace to respect the natural things crafted by god.
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Identify and consult stakeholders for the development of policy
Stakeholders are the key users and targeted audience for whom the sustainability
policy has crafted by an entity. A different stakeholder in this policy is customers, owner,
investors, government, and society and community members. An entity who intends to
establish a business in Australia by developing sustainable policy is require to rake
permission of local authorities of the Australia as every action of business would affect the
environment. Giving employment to society members will boost the entire economy of the
country.
Craft strategies for decreasing use of reducing toxic material and hazardous chemical use and
employing life cycle management approaches
The toxic material can get decreasing by restricting the production of toxic and non-
degradable materials by an entity as this will decrease by promoting recycling production.
Chemical wastage of industries will dumped into garbage area instead of dumping into
drainages and lakes as this will creates pollutions which indirectly spoils the healthy lifestyle
of all individuals living near the industries. Safety system used by the firm to protect the
interest of all the residents living the industries by establishing factories far away from the
local residential area to avoid the discrepancies.
Make recommendations for policy options based on likely effectiveness, time and cost
Time, cost and quality are three constraints which will decrease or increase the overall
earnings of the business in a given time period. These three factors are related whit each other
as changes in one factor will lead to changes in another factor. Absorption costing is used to
analyse the feasibility of the project by including eco-friendly resources to deliver the quality
oriented services to retain all the customers with the business for a long period of time. The
loyalty of the customer is important to ensure the survival of the firm for a longer period in
the external entity.
Develop policy that reflects the organisation’s commitment to sustainability as an integral
aspect
Measures and action of an entity clearly reflects the sustainability policy craft by an
entity. Customers are the king of the external market whose need is fulfilled by offering
quality oriented services as this helps an entity in attaining the sustainable competitive
advantage over other competitors. Corporate social responsibility is that weapon which an
entity will use to grab the attention of the majority of the society members. Fair pay offer to
male and female fighting for the common posts without any gender discrimination shows a
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