Accounting and Financial Management Report for Premier Investments

This report provides a comprehensive analysis of Premier Investments' accounting and financial management practices, focusing on the application of the Global Reporting Initiative (GRI) guidelines. The report examines the company's environmental disclosures, stakeholder engagement, and the impact of its operations. It explores how Premier Investments utilizes GRI disclosures to communicate its sustainability efforts, including environmental performance, social impact, and economic considerations. The report further compares Premier Investments with Myer, another Australian retail business, highlighting the depth and quality of their environmental performance information. The analysis covers the benefits of GRI compliance for shareholders, investors, and other stakeholders, emphasizing the importance of transparency, accountability, and ethical business practices in the context of the global financial environment. The report also discusses the positive and negative impacts of Premier's operations on the environment and society, providing an overview of the company's sustainability initiatives and challenges.

Accounting Financial Management 1
Accounting Financial Management

Accounting Financial Management 2
Table of Contents
Executive Summary.........................................................................................................................3
Introduction......................................................................................................................................4
Part A...............................................................................................................................................5
Conclusion of Part A.....................................................................................................................11
Part B.............................................................................................................................................11
Part C.............................................................................................................................................18
Conclusion.....................................................................................................................................23
References......................................................................................................................................24

Accounting Financial Management 3
Executive Summary
In today’s competitive business environment, business organizations are moving towards
application of uniform accounting system to fulfil their business objectives, which are also
driven by their self-interest along with society and the environment. In this context, Global
Reporting System helps the business organizations in gauging as much as they can out of
economy run by the governments and their authorities (Fonseca et al., 2014). The importance of
transparency, Accountability, and ethics in business and financial reporting have increased than
ever in the era of the global financial crisis. Professional accountants are crucial
business advisors who assist in protecting the interests of the stakeholders in every industry. The
GRI institute is at the forefront of promoting and ensuring ethical business practices in the
Australian companies. Relevant stakeholders to take effective decision, which should be guided
by the accounting principles, use the financial reports. These stakeholders include
owners, managers, investors, or analysts, who find the information relevant to understand and
manage the business. The accounting principles also help companies in filling a tax return, to
lodge on a public register such as the stock exchange, for banks, or to help with effective
management of the business.
This report examines the impact of voluntary environmental disclosure on the cost of firm value
and equity capital, while affecting the public insight about a firm’s environmental presentation.
Further, the report has found that the voluntary environmental disclosure is positively linked with
the stakeholders’ outlook regarding the Premier’s environmental performance (Jones et al, 2016).
However, there was no data found about the voluntary environmental disclosures influencing the
cost of capital of the business.

Accounting Financial Management 4
Introduction
In today’s globalized era, the Executives and Directors of organizations are emphasizing more on
an integrated and sustainable reporting system. It covers the information about all the activities
of the organizations required not only by the Accounting standards but also by the Corporation
Law and other applicable Acts. In this context, the Global Reporting Initiative (GRI) which is a
worldwide charity organisation has designed the world’s most valuable and voluntary
Sustainability Reporting structure.
The following report is designed to provide a brief knowledge and understanding of accounting
and financial management skills in today’s business environment. For the purpose, an Australian
firm has been taken into account named; Premier Investment Limited. Premier Investments
operate a range of retail fashion chains across Australia and other parts of the world such as
Singapore, New Zealand, the UK, Hong Kong, and Malaysia. In order to get success, accounting
financial management practices have become must for every organization. The report explains
this in three parts. In part A, this report will provide the relevance of GRI guidelines followed by
Premier to stay transparent with its stakeholders.

Accounting Financial Management 5
Part A
1. The operations of Premier Investment Limited are focussed on their vision of enhancing the
delivery of sustainable value through an effective exploitation of resources and relationships.
The company also makes commitments for creating the positive impacts of its business on the
society and environment and minimizing the negative impacts. By applying the principles of
Global Reporting System (GRI), Premier participates in the Australian Packaging Covenant
which is a voluntary agreement between the industry and the government (Lodhia, and Martin,
2014). This agreement facilitated Premier with the tools, which helped it in minimizing its
business operations, impact on the environment through recycling, reusing, product stewardship
and ecological packaging design. The company adopted the importance of energy efficient and
low environmental effect lighting system and has been applying improved lightning standards for
managing the energy usage efficiently.
In this regard, the company has also made investment in its more than 200 stores to upgrade LED
lightening. It resulted in emission of less heat, which reduced the level of overall heat load on the
stores and decreased the unnecessary expenditure on cooling tools. On the other hand, the
practices of Premier in accordance with GRI supported and promoted a number of charities,
educational programs and organizations for children (Uyar, 2017). The company has also
launched a number of society fundraising initiatives at local as well as global level to assist
schools, sports, and various academic events. The company contributed around $ one lakh in
such events.
The reporting of GRI has indicated a range of positive and negative indirect economic impacts,
which Premier’s operations have caused. These include Change in the efficiency of

Accounting Financial Management 6
organizations, divisions, and the entire economy, Economic growth in the regions of high
scarceness, Economic impact of refining or weakening social and environmental surroundings,
accessibility to products and services for those earning low incomes, Increasing skills and
awareness among a professional community in a geographical areas. The impacts were also seen
in supporting the supply chain and distribution channels by facilitating foreign direct investment
in the Australia. The negative impacts caused by Premier on the environment are:
 Heating and carbon emissions by the machines into the atmosphere increase the
greenhouse effect.
 The materials used in building business premises are made of non-renewable resources
which make their availability at stake (Lawrence, and Weber, 2014).
 A lot of waste is discharged by the company into the physical environment as they
regularly upgrade their equipment to stay competitive.
The negative social impacts are:
 The company sometimes engages in offering bribes to get work done or to gain other
financial benefits
 Also, involves in accounting fraud, and breaching regulations in their operations
 Pay low wages to the labours and charge higher prices from the customers (Ballou et al.,
2016)
2. Following are the four main GRI disclosures that are likely to be of most importance to the
stakeholders of Premier Investments:
Disclosure 102-2

Accounting Financial Management 7
This disclosure informs the stakeholders regarding the products and services, brands, and
operations of Premier. It also reveals the description of each expansion activity that the company
has adopted or planning to adopt along with the details of those goods and services, which are
prohibited in certain markets.
GRI 102-2 is useful for stakeholders as it provides appropriate information about the company
and its sustainability reporting methods (Martínez‐Ferrero et al., 2016). It also contains data
regarding the organization profile, ethics, governance, and strategies, which are relevant for
stakeholders in understanding the social and economic impacts of the organizational activities.
Disclosure 102-4
According to GRI disclosure 102-4, Premier informs the stakeholders about the number and
names of different countries where the company carries out its business and significant
operations. This information is helpful for stakeholders in knowing whether the company is
complying with all the applicable laws effectively. It also tells about the expansion capacity of
the organization in future by analysing its existing channels. It ultimately helps the investors in
their decision-making.
Disclosure 102-7
This disclosure is also important for the stakeholders of Premier as it reports about the size of the
company’s functions and other relevant data such as the total number of employees, net sales
volume and overall revenues (Uyar, 2017). It also informs about the amount of total
capitalization and how much is broken down into equity and debt, and about the actual quantity
of goods and services.

Accounting Financial Management 8
This helps the stakeholders in determining how the company manages the relationship with them
in an effective manner. The performance level of the company can also be better analysed by
knowing the business background. Also, the financial information in the disclosure provides the
details about the credibility and financial strength of the company.
Disclosure 102-9
This disclosure reports the stakeholders of Premier about the details of company’s supply chain
including the key components, which are linked with organization’s primary brands, products,
and activities. It includes how the company delivers its products to the market from various
channels. The stakeholders also get to know the quality standards maintained by the company
while producing, and packaging the products for the ultimate consumers. The stakeholders also
come to know the different methods and processes adopted by the company in creating
sustainable impact on the environment and the society.
Disclosure 102-10
This disclosure provides stakeholders important information about the location of Premier’s
premises and operations, and the changes in the location, including any changes in the capital
mix and capital formation, its sources, and maintenance. This information helps the stakeholders
in determining the ways in which the company meets out the former’s current needs without
comprising the ability to satisfy the expectations of the potential stakeholders.
3. The quality and depth of environmental performance information provided by Myer and
Premier are quite efficient and valuable. However, the operations of Premier are not subject to
any major environmental regulations (Lodhia, 2015). The codes of conduct of Premier reveal

Accounting Financial Management 9
that its Board of directors are committed to do business in an environmental friendly and ethical
way. The Board gives due respect and importance to its stakeholders such as employees,
customers, suppliers, and investors. In order to provide better information, Just Group Limited,
which is a subsidiary of Premier, also participates in Australian Packaging Covenant.
On the other hand, Myer is engaged in reducing the effects of its business operations on the
society as well as environment while unifying the accountability and environmental management
across all the divisions. The company puts more efforts on the most substantial environmental
impacts of energy consumption and related carbon release, waste management, packaging, and
recycling of packaging materials (Uyar, 2017). The company ensures that the products and
services it sales are safe and useful for customers as well as environment. In this regard, the
management complies with all the standards and monitors the product labelling and packaging
before final distribution. As part of the FY2014 instructions carried out, Myer has attained over
95 percent environment performance, which is more than that of Premier.
Moreover, Myer holds the new retail environment through a flawless Omni-channel practice
which is a combination of digital and physical retailing starting on the users’ device and ends in
Myer’s store or on users’ doorstep. The basic environmental practices adopted by the company
are regarding managing emery emissions, waste and recycling, and stewardship and packaging.
Also, during 2015, Myer adopted a comprehensive reassessment of its strategies to address the
growing retail landscape and analyse the strategic course best suited to the modern environment.
On the other hand, the Support system of Premier Investment Limited recycles all paper and
continues its co-mingled recycling program for plastics and glass on every floor in the whole
building (Fonseca et al., 2014). All paper bought for the company’s Support Centre is qualified

Accounting Financial Management 10
from sources of The Forest Stewardship Council which is a worldwide network promoting
responsible management of the world’s forests. The company has also implemented sustainable
packaging guidelines to reduce the environmental impacts.
4. The extensive compliance with the GRI guidelines by Australian retail businesses would
definitely benefit existing shareholders, potential investors, and other stakeholders of Premier
Investments. GRI is defined as a multi stakeholder procedure, which provides guidelines for
designing and spreading international reporting system (Zhang, 2017). It aims to integrate the
active involvement of representatives from different businesses, investment, accountancy, human
rights, research and labour institutions, and environmental organizations across the globe. A
large number of Australian companies consider sustainability reporting as a source to do greater
innovation through their products and business operations and gain a competitive edge over
others in the industry. Not only, the existing shareholders but also the potential investors, the
government, and other stakeholders are directly benefitted from the GRI principles. The
compliance with GRI also shows positive influence on environmental, social, and human right
matters.
The compliance with GRI guidelines would allow the Australian companies to effectively
address their social, economic as well as environmental performances to the stakeholders. It
directs the way in which reporting is made to the stakeholders (Lodhia, 2015). The Australian
organisations would be guided to apply various approaches to ‘prove’ their impact. Since GRI is
a universally adopted reporting structure, the stakeholders would get a better picture of business
inside operations and would be able compare one company’s performance with that of others.

Accounting Financial Management 11
GRI guidelines are designed to provide useful information to a wide set of stakeholders ranging
from shareholders, customers, creditors, debt holders, suppliers, government authorities, and the
general public. Meeting the information needs of these various stakeholders is the main objective
of the GRI framework by providing them relevant information in a compatible manner. For
example, banks always determine and analyse the liquidation value of the firm’s assets in order
to assess the real value of their collateral, whereas shareholders are interested in knowing the
future value of the assets and the dividend paid by the company (Zhang, 2017). Similarly, the
customers come to know about the quality and safety standards of the product and services,
while the government confirms the adherence of regulations by the company.
Conclusion of Part A
From the analysis of part A, it is reflected that Premier Limited adopts the various disclosure
policies of GRI guidelines in order to enhance the credibility of its reporting system. However,
the company is advised to use external assurance for maintaining the sustainability reporting
system besides the internal resources. Also, the company can implement internal control systems
for maintaining desired integrity of the report. The above discussion indicated that both Just
Group limited and Premier limited undertake activities to generate positive impact on the society
and environment while minimizing the negative impacts. Moreover, the GRI guidelines maintain
a strong relationship among the company and stakeholders by creating transparency and
accuracy in the business operations.
Part B

Accounting Financial Management 12
1. For the on-going operations of Smiggle and Peter Alexander, some major costs would be
incurred by the management. These major costs include fixed costs, variable costs, and
equipment operating costs. For example, total store rent expenses will occur to open new stores
in Asia and UK. The brands will be launched in the new market, which will increase the
advertisement and promotion costs of the business. The new start-up costs of new stores will
require increased expenditures such as investigation costs related with the creation or purchasing
the trademark. The pre-opening costs of the new stores will also be incurred to produce income,
maintain profitability, and anticipate the future trends in the market. New stores will need spaces,
which would require paying rental costs or leases Han, K. and Mithas, S., (2013). For the
additional stores, new labours and personnel will be hired which will increase the total wages
and salary costs of the business in at particular financial year. In order to maintain the efficiency
of worker and employees, high training and development costs will also be incurred and to
produce quality materials, upgraded technologies and machines will be introduced which will
add to the overall expansion cost of the business. The equipment operating costs include
leasehold improvement cost, cost of furniture and fixtures, expenses on elements of interior
design, and inventory cost.
2. The costs identified above have different nature or behaviour. While some of the costs are
fixed, others are variable ones. The other costs are incurred in opening up of new stores (Lee,
2017). These may include rent or lease expense for the space the new stores will occupy, such as
shopping mall space. It also includes casual payroll for those workers who are employed for a
shorter period of time to meet out the urgent operations. In addition, the expense of depreciation
on the equipment and tools for production is a forms the part of fixed cost. The payment of
salaries and wages is also the fixed cost Han, K. and Mithas, S., (2013). The fixed costs do not