Assignment 1

step 3 – My company Novita Healthcare Ltd

Janice Sia

CQUniversity

Initial thoughts

As I have mentioned on my blog post https://wordpress.com

“when I first saw Novita Healthcare Limited listed against my name on Friday evening, I was not

surprised by the fact that I was given a company that I have never heard of before. I told myself to be

wildly enthusiastic about carrying out my research and discovering what my firm engages in. But one

of the hilarious things happened after clicking on my company’s URL was, I decided to try other

search options and I ended up skimming through Novita’s (South Australian community-based

children’s service organisation’s) background and jotting notes down on my laptop. And this took me

almost a week to question the information and disregard it.”

My firm

Now, let me introduce you to my company – Novita Healthcare Ltd (Est 2004). It is a Melbourne

based Australian Medical Technology firm that accentuates innovation, production and

commercialization of TALI Technology and TALI Health. With the vision of becoming a leader in

evaluation and improvement of childhood concentration difficulties among children with

developmental delay, Novita Healthcare is attentively making its way into the future with production

of innovative medical technology. https://novitahealthcare

Prior to carrying out research on Novita Healthcare Limited, I thought that the firm works single-

handed regarding development of its products, but I was wrong. The company is in partnership with

the three other organisations - Monash University, Grey Innovation and Torus Games. For further

information regarding their partnership visit: https://novitahealthcare.com.au or

https://www.monash.edu/neuro.

The area of interest I found while browsing through Novita Healthcare’s web page was the TALI

Train, a programme developed to allow an early intervention into childhood to improve attention

difficulties. Around the world, 11% percent of children live with severe attention difficulties and

Novita Healthcare aims to assist these kids to train their brains to maintain focus, boost learning at

school, concentrate while learning new things, ignore or prevent interruptions, avert impulsive

behaviour, avoid fidgeting and switch between jobs. The research revealed that Novita Healthcare is

continually seeking suitable investments to fund its business activities. At the same time, it is

engaging in research to collect scientific data to complement the development of its products and

extend its market position. If Novita’s TALI Train excites you then you can watch this video:

https://www.youtube.com/watch?v=BiV7BR0-opw

Financial reports

As revealed by the research, Novita Healthcare is listed on Australian Securities Exchange.

https://www.asx.com.au/asx/share-price-research/company/NHL/details .Oh, hold on, in our chapter 2

reading we discovered that the firms listed on ASX are required to comply with the accounting

standards set by Australian Accounting Standard Board. During the 2017 financial year Novita

Healthcare’s financial position was $941,017 (2016: $388,374). It reported making:

A profit of $262782 at $566,156 ($303374 in 2016).

And a net loss of $1,366,472.

According to FY 2017 annual report, Novita Healthcare involved in certain activities including:

The distribution of 104, 379,472 original shares from a one for one Non-Renounceable Rights

Issue at distribution price of $0.022 per ordinary share which raised $2.1 million (net of

costs).

The approval of Tranche 2 of the share placement and earnings of $2.0 million (before cost)

The take-up of the Rights Issue entitlements and the Top-Up Facility applications lodged by

eligible shareholders pursuant to the Entitlement Offer which resulted in company receiving

$0.6 million and issuing $20.7 million shares at $0.03 per share.

The placement of the shortfall to the Entitlement Offer received $0.4 million and issued 13.2

million shares at $0.03 per share.

Management

Novita Healthcare possesses payment strategy specifically designed to entice, inspire and retain

employees and NEDs by recognising and rewarding high performers and recognising the contribution

of each employee to the continued growth and success of the Company. It employs fixed

compensation, performance-linked compensation strategies and salary continuous cover. In addition

to these, there is indemnification and insurance for its employees.

Regarding the risk assessment Novita Healthcare has:

Board endorsed operating scheme and fund and Board observation of progression against

these funds, including the set up and observation of KPIs of both a financial and non-financial

nature.

The established committees to report on specific business risks including strategic

investments.

When I first started reading through the firm’s financial report I thought that it was unusual to have an

annual report consisting of 47 pages. But I continued reading and it was interesting to outline that the

company acquired Newly Pty Ltd, an innovative online marketplace that connects care and assistance

professionals with individuals and organisations in need. https://novitahealthcare.com.au/newly/.

Halfway through the same year the firm attained a share sale facility and reduced the number of

shareholders on the register which decreased registry expense and shareholder communication cost.

But then, this had me questioning:

What was the financial effect of acquiring Newly Pty Ltd?

Are there negative effects of attaining share sale facility in the long term?

During the 2017 financial period there were no dividend payments made to shareholders, was

this the impact of acquiring Newly Pty Ltd and the completion of share sale facility?

Well, I was not able to find answers to these questions. I hope that the research I will be providing

some insights.

One of the areas of Novita Healthcare’s financial reports that I did not understand was the layout of its

income statements for the years prior to 2016. There was a significant difference on how figures were

expressed. While working on my spreadsheet, I was able identify that there was inconsistency, but I

had no idea about how to fix it. The firm officially changed its name from Avexa in 2016, was this

slight change in the layout of income statement related to this?

The slight change in income statement is evident in the following annual reports:

https://www.asx.com.au/asxpdf/20151026/pdf/432dlc1f75kbqy.pdf ( page 16)

The further research into this company’s business activities expressed that apart from developing and

commercializing TALI Technology, Novita Healthcare aims to generate shareholder wealth and

further enhance its products to mental health and the education markets. https://novitahealthcare

Opportunities and challenges

In order to identify Novita Healthcare’s opportunities, we must consider certain concepts mentioned

above. This includes the Novita Healthcare’s target market and the product or a service demand. In

Australia alone, there are 400,000 children with attention difficulties and 650,000 with developmental

delay. In addition to this, there are no other companies within Australia that are competing with

Novita Healthcare regarding TALI Health and TALI Technology. This gives Novita Healthcare the

opportunity of monopolising the market and the chance of being successful with greater segment of

target market domestically and internationally if possible.

Novita Healthcare’s challenges include:

Meeting operating cash requirements through its economic activities

Managing negative operating cash flows

Finance deficit

Foreign currency fluctuations

Technical and commercial progress of the projects

Relationship building with health clinics and institutions and internal innovation

Building the business and partnerships to establish self-sustaining revenue streams and total

shareholder value.

Concluding thoughts

While carrying out my research I found peer interaction very helpful. I cannot think of a better way to

appreciate my four peer group members for all the support they have given me in person. In addition

to this, Studiosity was also an immense help. Although I was bit mad about not being able to submit

my whole draft, I learnt a lot from little feedback that I received for the part of the assessment.

Links?

Assessment 1 step 5

Chapters 2 & 3 reactions and reflections

Chapter 2- understanding the game

Understanding the game: When I came across this heading I knew straight away that the game

referred to accounting, a concept that is defined as the process of using information to connect to a

firm’s economic reality. These paragraphs reminded me of my first day at primary school. My class

was introduced to footy where footy rules were spelled out. Having gone through them, we found it

much easier to comply with them during all-girls mini match. When I read the heading, I knew that it

was same for the accounting concept in the business atmosphere. One needs to understand the

accounting and the policies that are in place to effectively provide guidance to his/her organisation to

maintain the competitive edge.

Regulations imposed on firms in Australia – In a business atmosphere there is a relationship between

the company, its customers, suppliers, publics such as financial publics, marketing intermediaries and

the competitors. And there is a likelihood that decision made by one of these parties will affect the

others. Therefore, there are policies in place to ensure that business activities that are conducted meet

a certain accepted standard. Our chapter 2 reading outlined the rules – Generally Accepted

Accounting Principles that apply to the preparation and issuing of financial reports to external parties.

These rules ensure that financial statements meet a certain standard. When I first read the beginning

of the paragraph, I wondered if I was going to discover that there was regulation for every single

concept. I also thought that all the firms in Australia need to comply with these rules.

The reading about financial reports in chapter 2 had me questioning this:

Why is financial accounting distinct from management accounting?

Does this difference represent a concept that there is some piece of information that cannot

be disseminated to external parties?

If not, it is the information user’s level of understanding of the issue or an information that

accountants take into consideration when preparing financial reports?

US Securities Act 1993 -This regulation gave equity investors the right to have access to their firm’s

financial information in order to understand its business activities. How cool! To be honest with

myself, this reminded me of my family’s experience 10 years ago. We purchased shares in a micro

finance banking firm. During the first 4 years, the company operated smoothly, and everything

seemed promising. However, after few years the firm stopped providing financial reports to the

shareholders. The turning point was that it gave loans to a couple of its shareholders without proper

security. Within months the company became bankrupt and ceased to exist. This was a nightmare for

my family, we ended up losing all our investment that we made for 7 solid years.

The source of accounting rules, GAAP and Accounting standards

The source of accounting rules: The Generally Accepted Accounting Principles (GAAP) are the

guidelines that companies registered on Australian Stock Exchange need to comply with while

preparing financial reports for the external parties. These rules are taken from the Australian

Accounting Standard Board (AASB), the Australian Securities and Investment Commission (ASIC)

and the Australian Stock Exchange (ASX). Regarding accounting standards, AASB and ASIC work

together to ensure that there are accounting standards in place to guide the companies in preparing

financial reports. AASB adopts International Financial Reporting Standard (IFRS) developed by

International Accounting Standards Board (IASB) and ASIC implements them.

At first, I thought that it was a nightmare to ingest all these acronyms after working on the other

assessments prior to reading this chapter. My head started to ache like nobody’s business interrupting

my ability to interpret and make sense of the content. It felt like it was going to explode at any time.

My brain thought that there were ten acronyms, which only made the situation worse. After few

minutes I decided to take a break and as I was moving away from my study table, I asked myself, how

in the world can I grasp all this stuff? But then, I recalled a sentence that I came across while

skimming through the chapter. The sentence stated that the learning takes effort. This made me feel

bit better as I peacefully moved away from my laptop.

University education is not passing assessments and getting a degree: As mentioned, university

education is not all about achieving good grades and graduating with a degree, instead, this is where

one learns and absorbs all the required information that is necessary in the future. This takes effort to

learn, reflect and think to question and understand certain concepts. I will be perfectly honest with

myself to bring my high school experience forward. I used to focus on passing assessments and

getting good grades. I was a pro at going through the notes that I was yet to be tested on and abandon

them after the test. I was good at memorising the theory, but, on the other hand, I used to feel that I

could not apply them in real life. When I was first introduced to this unit, my perspective of learning

begun to take a new shape that I have never imagined previously. I felt that this was the beginning of

the journey of being equipped with applicable concepts. So far, I have managed to write few posts on

my blog and the questions on Peerwise. It was also amazing to start my research on Novita Healthcare

Ltd and enter its annual reports on my spreadsheet.

Accrual accounting: I could not remember if this term crossed my ears during the previous years.

From how my brain responded it was obvious that my accounting background was too narrow to

include this concept. However, based on the reading accrual accounting is the recognition of the

firm’s financial transactions or other economic activities on the day or a date of occurrence, which

might be prior to receiving cash in hand. I had to dig bit deeper into my brain to recall my 1 week stay

in Port Moresby while waiting for my visa to be processed. I did not pay for the service prior to

moving to Rainbow Missionary Home, instead, the management sent the invoice to my sponsor’s

office and the payment was made the following week.

While reading through the paragraph outlining accrual accounting, I had these questions:

Why do firms use accrual rather than cash accounting?

Is it a size or a structure of the firm that determines which business uses accrual accounting?

If it is a size or a structure that is considered, would it be too much for the firm to handle its

financial transactions and other economic activities while accounting on a cash basis?

How does accrual accounting affect the firm?

Martin’s example of customers paying before buying a product helped me to view the opposite of

what happens when the firm sells the product before receiving the cash. This was an awesome

example!

Quality of information: Accounting involves making judgement about the information and identifying

the right time certain information should be disseminated to the users. From our reading, the

information that is provided needs to be comparable, relevant, verifiable, understandable and it must

possess faithful representation to be useful. When I first downloaded my firm’s annual report I got the

shock of my life regarding the size of the document. I was like, what? What am I going to do with all

this stuff? After all, I was expecting a single paged financial statement. But, I stopped worrying when

Dr Maria mentioned that financial reports are quite long. I tried to identify whether the document

reflected the key qualities mentioned above and, it was all good, but it was unfortunate that I had

comparability missing from my own spreadsheet.

Chapter 3 - Introduction to financial statements

Haha. I Just could not stop laughing my head off regarding how I was introduced into chapter 3.

There was nothing better than being absorbed into four different financial statements with an ease. I

had to recall their names just like recalling four people’s names at the party.

It was interesting to understand these four different financial statements: Balance sheet, income

statement, statement of changes in equity and cash flow statement. Balance sheet outlines firm’s

financial position in terms of assets, liabilities and equity at a specific date. Income statement reflects

the firm’s profit and loss and shows how the firm’s economic activities influence the investors over a

period. The role of statement of equity is to outline different changes in shareholder equity and the

financial transactions that take place between the firm and the owners over a period. And lastly, cash

flow statement outlines the difference on how cash changed between one balance sheet and the next.

When I was reading through my firm’s annual report and entering the figures on my spreadsheet, I

had no idea about the purpose of each financial statement. I entered the figures just because I needed

to. But I was fortunate to come across chapter 3 reading and understand the concept represented in

each financial statement.

Trust relationship: Trust relationship in business atmosphere refers to delegation of firm with

resources in exchange for equality and liabilities by the external parties. Wow! I knew that such

process exists in business, but I never knew that it could be referred to as a trust relationship. Anyway,

I am always like this, there are some things that I am fully aware of their existence, but I do not know

their appropriate names. So, bear with me as I reflect on chapter readings!

During the previous years, the ratio was one of the concepts that I thought to be inapplicable to

accounting. I knew it was math, but I had no idea as to how it could be used in accounting. From my

understanding ratio is a relationship between two or more items. It was interesting to review its

history and identify how it is applied in accounting.

Discounted dividend model: The process of appraising firm’s stock price based on the dividends

expected to be received discounted back to their current value using relevant discount rate. I thought

that this was an interesting method. Again, I never thought that such method exists in the business

atmosphere. I had an enjoyable time discovering concepts that I was not familiar with throughout the

reading.

Chapters 2 and 3 outlined rules of accounting that are used to connect to a firm’s business reality and

the financial statements with balance sheet and the income statement being the most important. Out of

these chapters I took out the subjects that I thought to be new to me. I also outlined the ones that I

found bit confusion. With this, I feel that I have been equipped with great wealth of information from

these two chapters.

Cheers!

My top 3 Blogs

I do not think I had a problem choosing my top three blogs. Beginning from week when everyone

created their blogs, I had this notion of following only the best blogs that I come across. Since I am a

detailed-person, I chose only the ones that introduced themselves in depth. I considered the content of

the blog posts and the way information was communicated (in terms of boring or interesting).

Interaction with these peers over a longer period enabled me to favour certain blogs over the others.

This made my process much easier. Now lets surf my top three blogs.

1.Hayley Wilkinson

You might be wondering why this girl’s blog made it to my top three list. Well, I do not think I have

met Hayley personally, but she was the first student I contacted on blog because her site was just

fantastic. Her posts are written in a way that gives you insights of the issues discussed while keeping

you interested. One of the things that makes her blog extremely pleasure is the well-organised basic

design. Once you’re on her page, you will not get lost, believe me, you will navigate on her page like

a pro. Check her page on https://hayleywilko.wordpress.com/ and prove it yourself.

2. Hannah Briggs

Yes! My second choice! Visit her blog

https://wordpress.com/view/bloggingwithbriggsy.wordpress.com . Hannah is a first student I met

on Wednesday week 1. I have worked with her for the past 4 weeks and mind you, she is an incredible

team worker one could have to keep the team functioning. Her blog page is basic and easy to

navigate. She has well written posts which I love reading so much. The content of her work is very

interesting.

3.Ashleigh Neal

My third choice is Ashleigh Neal, visit her site https://ashleighlouisecqu.wordpress.com/. Again, it is

the simplicity and the well written posts that grabbed my attention. I have never met Ashleigh

personally, but I have managed to visit her blog. She’s one of the distant students.

Step 6

So far, I have managed to provide 2 peers with feedback using feedback form. The others I just

commented on their blog. The below are the feedback forms that I have compiled for my peers.

PEER FEEDBACK SHEET: ASS#1

Feedback From: Janice Sia

Feedback To: Ailyne Tareavi .

My Comments

Step 1

KCQs

N/A

Step 2

N/AIntroductory words in Description box

Photo and description

Link to your blog/Set up blog

Step 3 Splendid work! You have provided detailed company’s background information including financials. It is also well written with KCQs outlined clearly. I really enjoyed reading through the content.

However, I personally suggest that you provide links to comments that you have made on your peers’ blogs or any discussion that you involved.

Background information on company

Comments/KCQs

Comments on other’s blogs

Step 4 N/A

Input company’s financial statements

Step 5 Again, I enjoyed reading step 5. It was well written with KCQs outlined clearly. The writing reflected your understanding of the 2 chapters which was great.

KCQs

Step 6

Individual feedback with others

N/A

Overall ASS#1 The overall assessment is fantastic especially the content. You provided just the right amount of information. My only suggestion here is you make overall proofread for any grammatical errors and you’ll be done. Cheers! you’re almost there!

PEER FEEDBACK SHEET: ASS#1

Feedback From: Janice Sia

Feedback To: Felicity Kuitai .

My Comments

Step 1

KCQs

N/A

Step 2 I like your blog, it is basic and easy to navigate. The way you introduced yourself and your firm was quite interesting. You’ve made a great start as a first-time bloggerIntroductory words in Description box

Photo and description

Link to your blog/Set up blog

Step 3 I fully understand how you felt at first because I felt the same, but then I had

to accept the challenge and move on.

I loved reading through your content and I personally think that you provided

just the right amount of information which reflects that you have developed a

good understanding of your firm. It was also interesting to read KCQs which

you have clearly stated.

However, to be honest with myself, I personally think that some of your

sentencs are too long, for example, your introductory sentence. I would

suggest that you consider either inserting a commar or break them into couple

of sentences. The overall job is just great! You’re doing well!

Oh and one more thing! It was wonderful knowing that you have included my blog in your top 3 blog list. I’m yet to choose mine!

Background information on company

Comments/KCQs

Comments on other’s blogs

Step 4

N/AInput company’s financial statements

Step 5 Again, I enjoyed reading step 5. The writing displayed your understanding of the chapters 2 & 3 in a simple layout. However, I would suggest that you consider proofreading for grammatical errors. You’re almost there! KCQs

Step 6

Individual feedback with others

N/A

Overall ASS#1 The overall work is a pleasure to read, especially considering the content that you have provide and the layout. It reflects the potential that you have. You are doing great! Cheers!