Top 3 Blogs

Of the blogs I looked at, my top three in no particular order are:

 

Ben Patchett

http://bensassignment1blog.blogspot.com.au

I like Ben’s blog as he has kept it simple and relevant.  He has shown that he understands the assignment tasks.  I can relate to Ben as like me, he has a Trade background and other things going on his life than Uni. 

 

Jade Thomas

http://jadethomas1995.blogspot.com.au/

Jade’s blog has lots of content as well as visuals and she has still managed to keep it neat and simple; making it an easy read.  She has included content and links from her firm’s website as well as including plenty of original articles detailing her KCQ’s. 

Emily Aitchison
http://emilyaitchison.blogspot.com.au/

Emily’s blog is really well thought out.  It is like a blueprint to her assignment.  I like that she has included plenty of content that is based around her KCQ’s and not just things she has copied and pasted from her firms website.   She seems to have a great understanding of her company and the assignment.

 

 

KCQ - Equity Raising

As equity raising has been one of the primary sources of income, my company’s financial statements and accompanying reports go into great detail about how this equity has been raised.  This is a big part that I do not fully understand and don’t think I will at this early stage of my study.  I think investing, shares and equity funding is a discipline of study in its own right.  Here are some terms I’m yet to wrap my head around:

·         Conversion of loan funds to issue shares

·         Equity funding by a renounceable rights issue

·         Share options

The Statement of Cashflow really highlighted for me the amount of money the company raised through the issue of shares. This contributed to the huge cash movement and position from 2012 to 2013. This increase in cash enabled the company to earn further revenue by way of credit interest on its bank account balances. In 2013 the Interest income increased by 90% from the previous financial year to $108,505. In turn their total finance costs had decreased.

 

The Annual Report features a summary of the equity funding events that occurred during the year in the Directors’ Report section:

KCQ - Corporate Governance Statement

I found it interesting that my company stated in its Corporate Governance Statement the percentage of their workforce who are female.  I wondered whether this is a requirement per the likes of the AASB or was this a point of interest my company wanted to mention? 

KCQ - Income Tax Calculation

I also don’t understand the income tax calculation.  The calculation shows adjustments for various income and expenses which I assume are not assessable or deductible but as my company has been making losses for consecutive years now I wouldn’t think they’d be paying any tax?  Terms in the tax calculation I don’t understand are: 

·         Deferred Tax Assets

·         Unrecognised Tax Losses

·         Temporary Differences

I'd say these terms are well beyond on ACCT11059 but any thoughts?

KCQ - Loss provisions

My company has in their liabilities a “provision for loss on engineering services contract”.  I don’t understand whether this is a loss the company has actually incurred as a result of this contract, e.g. it cost them more to do the work than the revenue they were to receive per the contract?  Or, is this item an expression of the costs yet to be outlaid as the completion of the project isn’t expected until 2014? 

KCQ - Looking at comparative figures

When reviewing AnaeCo's figures, I noticed from 2012 to 2013 there was an increase to income due to the R&D Tax Incentive declared in 2013 for both years.  There was also a huge reduction in costs, particularly in the area of project delivery.  Finance costs also reduced dramatically, perhaps because they converted so many loans to shares?  This got me thinking that it is probably a good idea when looking at figures you look at two years worth side by side as it uncovers the why’s about the different events/transactions that occurred and also the effect they have on the business and the different areas of the reports.  I guess this all goes back to the concept of Double Entry.

KCQ - Depreciation vs Amortisation

Something I wasn't fully clear on and did some extra research for was Depreciation and Amortisation.  My company depreciated property, plant and equipment but amortised patents, licences and intellectual property.  I did some research and found the concept of the two are similar however it is depreciation you apply to assets whose useful life is variable and amortisation is applied to assets where the exact life is fixed and known.  So depreciation is applied to physical assets prone to wear and tear and amortisation is applied to intangible assets. 

KCQ - Remuneration

The Annual Report has a huge amount of detail about Executive Remuneration and its Employee Share Schemes.  I found these sections to be very complex and detailed and I honestly just lost interest when reading these.  However the part I did find interesting though is the great deal of thought put into the remuneration packages and how they are strategic in generating employee performance and retention.  Put very simply, key performance indicators are set and employees have to reach these to be paid accordingly.  If employee shares are involved in remunerating, employees can only get the benefit from these shares if they remain as employees of the company. 

Significant milestone met

Read the latest news out of AnaeCo detailing recent milestones.

KCQ - what is the R&D Tax Incentive?

To fund its projects, my company has been largely dependent on receiving a government grant called the R&D Tax Incentive.  One of the first things I noticed about AnaeCo Ltd is that it isn't 'trading' like other businesses and that its main source of Income comes from the R&D Tax Incentive.  I haven't come across this in anyone elses businesses as yet.  

Here are some presumptions I have made:

• I gather from company's financial statements that they have to apply for the grant after the fact.  That is, they have to fork out the money for their research and development work and then apply to be reimbursed. 
• They make provisions for what they expect they are going to receive.  I assume this has something to do with using accrual accounting. 
• It appears as though this grant is partially not assessable. That is the company does not have to pay tax on this income as they have made various adjustments in their tax calculation detailed in the financial statements notes. 

Here is a link I have found detailing the R&D Tax Incentive Program.

 

Has anyone else come across firms who are dong R&D work?

My thoughts so far

Hi everyone I am happy with the company I have been given as it is an Australian Company. Although I don't know a lot about the industry in which it operates, at least because it is Australian I do have some background knowledge of the state of our economy & general business challenges - you know the general stuff you hear on the news etc. I see other students have been given non-Australian companies and so they'd be dealing with the different currencies & trading conditions, like you have all mentioned above.

My company differs to many as at this point in time it doesn't have currency conversion challenges, although it does look like it may face these challenges as it expands its market overseas.
My company develops Waste Management Systems. As my company is still in the project phase of these developments, it has not been 'trading' like a normal business. It's main source of income has been Research & Development Incentive grants from the government.

I agree with many others that I'm not struggling with any of our course subject matter as yet, but more with the time involved being across all the social media interaction, peerwise, weekly study guide and the assignments. Obviously there is a lot I don't understand when I read everyone's annual reports, but I think a lot of the content is beyond this course.

Slowely I'm getting around to check out everyone's blogs and company reports. I'm aiming to post my top three by the end of the week as well as finalising my KCQ's.

My Blog is the best place to start checking out my company as I have now made a few posts with links to all it's information.  I'm doing it all through my blog to keep everything in one place and use it as a blueprint for the assignment.

Cheers

 

 

Hot off the Press....

...or not so hot off the press.  Here are some articles about by firm.  Unfortunately at this stage I haven't been able to locate anything more current. 

World Renewable Energy Conference visits AnaeCo Facility - 31 Jul 13 - Article by AnaeCo

AnaeCo close to success with bio-waste project - 11 May 13 - Article by The West Australian

Commercialization Outlook Improves - 01 Apr 13 - Article by Eco Investor

AnaeCo Ltd - Positive Start to 2013, Next Step - Commercialisation

In a previous post I mentioned the positive outlook for future revenues for my company as their project nears completion and they win deals for the supply of their new waste management system. 

 

I found this interesting report published by RM Research.  Their recommendation to investors is that they have labelled AnaeCo has a "Speculative Buy", meaning "we forecast strong earnings growth or value creation that may achieve a return well above that of the broader market" (stated on page 11 of their report).   

ASX Company Snapshot

Did a search for my company on the ASX website.  From an investor point of view the ASX website looks to be a great tool to use for research as you can get general company information that you would find on company websites as well as up to date information about share prices, market announcements, dividends and much more.  It also presents some information in the form of charts for those of us that rather pictures over numbers. 

 

Here is the company snapshot results from the ASX website for my firm. 

 

Have you done a search for your firm on the ASX website?

Annual Report analysis

At this stage of my analysis of AnaeCo, I feel their Financial Statements are a reflection of the company's vision and objectives.  They have invested a great deal of money into the research and development of a new waste management system and reporting losses incurred as a consequence of their project being at the R&D stage.  Going forward the market indicates they will soon capitalise on their efforts (I will post articles indicating this shortly) and continue to operate as a going concern as indicated in their financial statements. 

 

AnaeCo limited has an investor section on their website which includes the past six years Annual Reports.  You can check them out here. 

A pioneer of its industry

On their homepage, AnaeCo label themselves as "an innovative leader in Advanced Waste Treatment".  They have spent the past 14 years developing their technology which has seen them become the inventor and owner of an Advanced Waste Treatment System patented under their recently rebranded business name.  Other companies have been involved in the development of their technology and various associated projects.  These companies being the major shareholders. 

 

To read more information about my firm visit http://www.anaeco.com/