Financial Analysis of Vita Group Limited: Corporate Governance Report

This report provides a comprehensive financial analysis of Vita Group Limited, examining its financial statements, corporate governance practices, and key performance indicators. The report begins with an introduction to Vita Group Limited, its operations, and its position in the market. It then delves into the company's corporate governance structure, including the composition of the board, ethical decision-making processes, and risk management strategies. The report further analyzes the company's financial statements, including an assessment of its assets, liabilities, equity, revenue, and profit. It also explores the company's controlled entities and provides a comparative analysis of its financial performance over several years. The analysis covers key aspects such as net assets, total equity, current assets, non-current liabilities, and net profit, providing a detailed understanding of Vita Group Limited's financial health and performance trends. The report references relevant academic literature to support its findings and conclusions.

Running head: ACCOUNTING FOR DECISION-MAKING
Accounting for Decision-Making
Name of the Student:
Name of the University:
Author Note:

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Table of Contents
Part 1................................................................................................................................................2
Introduction to Vita Group Limited annual report and financial statements...................................2
Question 1........................................................................................................................................2
Question 2........................................................................................................................................3
Discussion on Corporate Governance.............................................................................................3
Question 3........................................................................................................................................5
Information included in the corporate governance report of Vita Group Limited..........................5
Question 4........................................................................................................................................7
Composition and total remuneration of the highest paid board members.......................................7
Question 5........................................................................................................................................8
Controlled entities of Vita Group Limited.......................................................................................8
Part 2................................................................................................................................................8
Financial Statements........................................................................................................................8
Question 1........................................................................................................................................8
Question 2........................................................................................................................................9
Question 3......................................................................................................................................10
Question 4......................................................................................................................................10
Question 5......................................................................................................................................11
Question 6......................................................................................................................................12
Question 7......................................................................................................................................12
Question 8......................................................................................................................................13
Question 9......................................................................................................................................14
Reference List................................................................................................................................15

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Part 1
Introduction to Vita Group Limited annual report and financial statements
Question 1
Vita Group Limited is one of the retailers that operate under the brands of Telstra and
Fone Zone (Vita Group Limited. 2017). Vita Group Limited is public limited company that is
listed in Australian Stock Exchange and operates in industries such as telecommunications,
technology accessories as well as Information Communication Technology and Athleisure. Vita
Group Limited had began its operation in the year 1995 when co-founder and CEO made the
daring move to open first mobile phone retail outlet in Australia named as Fone Zone. Fone Zone
was one of the first licensed dealers of Telstra that was founded with the knowledge that
customers will get access to best possible products as well as services that combines with an
unbeatable in-store experience. Vita Group Limited aims at delivering exceptional as well as
personalized experience and products for solving current and future needs of customers (Baker &
Burlaud, 2015). Vita Group operates in diversification activities in areas such as communication,
electronics and information technology products and service sector. The Group worked with
world-class strategic partners such as Telstra and Apple where the company adopted rapid
transformation into multi-faceted company by providing broad range of products serving both
retail and Business to Business markets. Vita Group gained noteworthy global
telecommunications, experienced in sales, management as well as operates globally in UK and
Australia (Weygandt, Kimmel & Kieso, 2014).

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Question 2
Discussion on Corporate Governance
From the annual report of Vita Group Limited, the Corporate Governance Statement is
organized under the headings in the Australian Stock Exchange Corporate Governance Council’s
Corporate Governance Principles as well as Recommendations with 2010 Amendments dated
30th of June 2010. The Corporate Governance Statement follows supporting documents and
posted in the websites of Vita Group Limited (Weil, Schipper & Francis, 2013).
Principle 1- Laying solid foundations for management and oversight
 Appointment of Non-Executive Directors
 Appointment and Evaluation of Senior Managers (Vita Group Limited. 2017)
Principle 2- Structure the Board to add value
 Independence of Directors
 Independent Professional Advice
 Director’s interests (Vita Group Limited. 2017)
 Remuneration and Nomination Committee
 Board Performance
 Induction and Education (Vita Group Limited. 2017)
Principle 3- Ethical and responsible decision-making
 Code of Business Practice and Ethics
 Trading in Company Securities by Directors, Officers and Employees

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 Diversity at Vita Group (Vita Group Limited. 2017)
Principle 4- Integrity in Financial Reporting
 Audit, Compliance and Risk Committee
 Auditor Appointment
 Auditor Independence (Vita Group Limited. 2017)
Principle 5- Timely and balanced disclosure
Principle 6- Rights of shareholders
 Communications strategy
Principle 7- Risk Management
 Certification of Risk Management Controls (Vita Group Limited. 2017)
Principle 8- Remuneration

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Question 3
Information included in the corporate governance report of Vita Group Limited
Vita Group Limited is in full conformity with ASX Principles and Recommendations.
The Board Charter is reviewed on annual basis (Anderson et al., 2015). It is responsibility of the
Board members to approve and monitor strategies as well as budgets and plans. They need to
approve policies as well as code of conduct. They need to review as well as monitor scheme of
risk administration, authoritarian observance and internal manage activities. The Board needs
approval and monitors progress of acquisitions as well as disposals for any of the significant
asset and business function. Vita Group Limited is delegated to management that include
operations, financial operations, information technology, human resources, customer service,
marketing, capital management activities as well as relationship with analysts, investors and
media (Wagenhofer, 2015).
Vita Group Limited has accepted a formal declaration of Delegated Authorities that set
out monetary as well as other limits that is entrusted to administration and matters presented after
support from the Board (Vita Group Limited. 2017). The Group is accountable for overseeing the
business as well as completion by administration of risk supervision systems and understanding
the effectiveness of the systems. Vita Group Limited has established a Continuous Disclosure
Policy for timely disclosure of material information that relates with the company. This policy
takes into account internal reporting procedures that ensure any material price sensitive
information as reported by the COO and CFO (Vita Group Limited. 2017). All the policies as
well as procedures need to be reviewed on regular basis that ensure that Vita Group Limited
complies with its compulsion at law under Australian Stock Exchange Listing Rules. The

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Secretary is accountable for communications with the Australian Stock Exchange that include
accountability as it ensures fulfillment with the permanent revelation requirements as mentioned
in ASX Listing rules as well as looking at information as it concerns shareholders and other
interested parties (Reimers, 2013).

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Question 4
Composition and total remuneration of the highest paid board members
Name Short-term employee benefits Post
Employment
benefits
Long-term benefits Total
Cash salary
and Fees ($)
Termination
Payments ($)
Non-
Monetary
Benefits ($)
Cash
Bonus
($)
Superannuation Cash bonus ($) Long
Service
Leave ($)
Dick Simpson
2015 2016 2015 2016 2015 2016
169,223 191,058 - - 16,076 14,825 - - 185,29
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205,883
Neil Osborne
2015 2016 2015 2016 2015 2016
84,611 94,011 - - 8,038 8,931 - - 92,649 102,942
Paul Wilson
2015 2016 2015 2016
92,650 102,942 - - - - 92,650 102,942
Robyn Watts
2015 2016 2015 2016 2015 2016
84,611 94,011 - - 8,038 8,931 - - 92,649 102,942

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Question 5
Controlled entities of Vita Group Limited
Figure: Controlled entities of Vita Group Limited
(Source: Vita Group Limited. 2017)
Part 2
Financial Statements
Question 1
The net assets of Vita Group Limited for the current year (2016) arrive at
158,033,000 (Vita Group Limited. 2017). To that, net assets for the year 2014

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were 102,632,000 and 129,376,000 in the year 2015. There was constant increase
in net assets for three consecutive years 2014, 2015 and 2016. Increase in net
assets means that the company has the capability to generate revenue in the near
future. Net asset is one of the most fundamental measurements in accounting and
finance (Vita Group Limited. 2017). It is understood that Vita Group Limited
acquires high profits as it is more preferable as compared to low profits. Vita
Group Limited can use higher profits for purchase of new equipment as well as
eliminate debt and even make payments to the shareholders on time. Vita Group
Limited need to meet certain profits each year for maintaining their loan
covenants with their lenders (Reeve et al., 2014).
Question 2
The total equity of Vita Group Limited for the year 2016 arrives at
67,986,000. In the year 2014, total equity arrives at 30,740,000 and 48,992,000.00
for the year 2015 (Vita Group Limited. 2017). There is constant increase in equity
from 2014 to 2016 and this means that Vita Group Limited can easily issue equity
shares and pay the dividend on time. Total equity is high for the company and it is
typically favorable condition. In addition, higher speculation levels by the
shareholders indicate possible shareholders where the business is worth investing
where investors show interest in financing the company (Vita Group Limited.
2017). Higher equity indicates possible creditors that the business is more
sustainable as well as less risky for lending future loans. Vita Group Limited has
higher equity that means the company should have less financing as well as debt

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service costs as compared to other companies who have lower ratios (Rajan, Datar
& Horngren, 2015).
Question 3
The total current assets of Vita group for the financial year 2016 stood at $
72844 compared to $ 59479 in year 2015. Component of total current assets of the
Vita group involves cash and cash equivalent, term deposits, inventories, trade
and other receivables (Vita Group Limited. 2017). Value of total current assets for
the financial year 2014 stood at $ 44254. From the given figure, there exists a vast
difference in the value of total current assets. There has been continuous increase
in the value of current assets year-on-year. The balances of trade receivables are
not past due and they are expected to be reviewed when they are due. Increase in
total value of current assets is because of significant increase in cash and cash
equivalent. There was a term deposit worth $ 5025 in year 2016 that was not there
in previous years. Total current assets value of Vita limited has also increased due
to increase in amount of trade and other receivables (Anderson et al., 2014).
Inventories contributed to increase in total current assets value in year 2015 as the
amount stood at $ 14567 as against $ 11900. However, there was less increase in
inventories value in current year (Potter, 2014).
Question 4
The items that are listed in non-current liabilities of Vita limited includes
trade and other receivables, provisions, interest bearing loans and other
borrowings (Hoskin, Fizzell & Cherry, 2014). For the past three years, the items

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under non-current liabilities include the items mentioned herein. It can be
depicted from the figures provided in the annual report of organization that there
is considerable decline in the value of non-current liabilities from $ 22205 in year
2014 to $ 11996 in year 2015 and further declined to $ 8610 in year 2016
respectively. Reduction in non-current liabilities of the group is attributable to the
fact that there have been reduced provisions, interest bearing liabilities and trade
and other payables. Low amount of non-current liabilities is due to persistent fall
in the value of items listed under total non-current liabilities (Baker & Burlaud,
2015). It can be seen from the annual report that there are no new items in the
non-current liabilities.
Question 5
The net profit of Vito group for the financial year 2016 is recorded at $
35371 as compared to $ 25402 in year 2015. Net loss for the financial year 2014
stood at $ 4642 (Grahame, 2014). When comparing the net profit for the three
consecutive years, it is witnessed from the figure that financial year 2014
generated net loss to business. However, there was increase in profit of business
to $ 25402 that further increased to $ 35271. Increase in profit for the year 2015
was attributable to falling finance cost, advertising and marketing expenses and
there was no expense relating to the impairment of Next Byte business.
Substantial increase in the profit is due to increase in profit before income tax.
However, there has been increase in income tax expenses. Vito Group also due to
increase in amount of revenue generates increase in profit for the year. It is

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mainly due to increase in sales of goods and services and increase in fees and
commission revenue.
Question 6
From the figure depicted in the annual report of Vita Group, it can be seen
that total revenue generated in current year is more as compared to previous year
(Graham, Harvey & Puri, 2015). Total amount of revenue generated for financial
year 2016 stood at $ 645112 and $ 541509 for the financial year 2015. Figure of
total revenue value for financial year 2014 stood at $ 450054. Total revenue in the
current year is more than total revenue the previous years. Year 2016 delivered an
increase in revenue of 8% resulting from continuing operations (Bettner, 2014).
There has been increase in revenue from retail channels of the group by 5%. Slow
growth in sales of device is offset by increase in growth of income generated from
fees. Revenue generated from enterprise channel experienced 16% growth (Bevis,
2013). Revenue generated from sprout increased by 28% that resulted from their
party customer base expansion and internal distribution channel growth.
Organization has significant opportunity for improving productivity and growth in
revenue. Sustained growth of Vita group was primarily driven by higher revenue
growth from enterprise and SMB channel (Reeve et al., 2013).
Question 7
Items included under the operating activities involves receipt from
customers, payment made to suppliers and employees, finance cost, interest
received and the payment made in tax, of income tax (Bebbington, Unerman &

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O'Dwyer, 2014). Net cash flows from operating activities in current year that is
financial year 2016 stood at $ 49097 as compared to $ 34295 in financial year
2015. For the financial year 2014, net cash flow from operating activities is
recorded at $ 17625 (vitagroup.com.au, 2017). The largest outflow item in the
operating activities was payment made to suppliers and employees followed by
payment of income tax by Vito Limited. The largest inflow item of the operating
activities section is receipt from customers that included the valuation of GST.
Receipt from customers is the largest inflow item that has offset all the outflow
items and generated net cash flows from continuing operations (Bettner, 2014).
Total amount of interest received by group did not increased significantly.
Operating cash flow of the group for the current financial year stood at $ 49.1
million and generated $ 35.3 million in previous year (Butterfield, 2016).
Question 8
Items involved in cash from investing activities includes purchase of plant
and equipment, purchase of software, purchase of acquisitions and proceeds
generated from plant, property and equipment (Deegan, 2013). Net cash used in
investing activities of Vito group for the financial year 2014 stood at $ 19668 as
compared to $ 15974 in year 2015. Cash used in investing activities increased
further to $ 31324 in year 2016. Organization has increased investment made in
plant and equipment. Investment made by organization in purchasing software
declined to $ 278 in year 2015 compared to $ 1476. Furthermore, there was
increase in investment by purchasing software to $ 3272 (vitagroup.com.au,
2017). There was no investment made in store sale and funds invested in the

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financial year 2015. Considerable amount of investment was made in store sale
and funds invested in financial year 2016 and the amount stood at $ 770 and $
4975 respectively. The new investing cash flow is the store sales and additional
amount of funds invested in investing activities. Largest cash outflow from
investing activities is payment made for acquisitions followed by purchase of
plant and equipment (Christensen et al., 2013). Additional items that formed cash
outflow and inflow in financial year 2016 involves sale of store and funds
invested. The essential part of cash management of the group is net of outstanding
bank overdraft that is payable on demand (Collier, 2015).
Question 9
A significant cash flow is generated by the operating platform and the cash
flow at the end of financial year 2016 stood at $ 19419 as compared to 15616 in
year 2015 (Christensen, Cottrell & Baker, 2013). Cash flow for the financial year
2014 stood at $ 6808. From the figure, it can be seen that there is a significant
increase in cash flow or cash and cash equivalent from the financial year 2014 to
financial year 2015 and 2016 respectively. The cash-generating unit of Vita
Group as defined as computing and telecommuting business that is at the lowest
levels where the ascertaining of cash flow can be done by distributing future cash
flow (Collier, 2015)

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Reference List
Anderson, D. R., Sweeney, D. J., Williams, T. A., Camm, J. D., & Cochran, J. J.
(2015). An introduction to management science: quantitative approaches
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Bebbington, J., Unerman, J., & O'Dwyer, B. (Eds.). (2014). Sustainability
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Bettner, M. (2014). Using Accounting and Financial Information: Analyzing,
Forecasting & Decision-Making. Business Expert Press.
Bevis, H. W. (2013). Corporate Financial Accounting in a Competitive Economy
(RLE Accounting). Routledge.
Butterfield, E. (2016). Managerial Decision-making and Management Accounting
Information.
Christensen, T., Cottrell, D., & Baker, R. (2013). Advanced Financial
Accounting. McGraw-Hill.
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information for decision making. John Wiley & Sons.

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user perspective. Wiley Global Education.
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Education for the University of Melbourne.
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Higher Ed.
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Vita Group Limited. (2017). Vitagroup.com.au. Retrieved 11 September 2017,
from http://www.vitagroup.com.au/script/cus/financial-reports.asp