Assignment One#

Subject - ACC11059: Using Accounting for Decision MakingCourse Coordinator: John McgrathDue Date: 12th December, 2016

Sneha Kar

/ Melbourne CampusSTEP 1

I have set up my personal profile on moodle:https://moodle.cqu.edu.au/user/profile.php?id=50443

I have set my first ever blog on WordPress:Link: https://snehauniblog.wordpress.com

STEP 2

The Company I have been given for this course is China Unicom (Hong Kong) Limited:

The China Unicom (Hong Kong) Ltd Annual Financial Reports can be found here:http://www.chinaunicom.com.hk/en/ir/reports/ar2012.pdf

http://www.chinaunicom.com.hk/en/ir/reports/ar2013.pdf

http://www.chinaunicom.com.hk/en/ir/reports/ar2014.pdf

http://www.chinaunicom.com.hk/en/ir/reports/ar2015.pdf

China Unicom LTD is a China state-owned telecommunication operator having its Parent Organizations at State Council of the People’s Republic of China. It is the world’s fourth largest mobile service provider by subscriber base. It has its Headquarters at Beijing, China. China Unicom was founded on January 6, 2009.

Some recent news about the company:

1) BRIEF-China Unicom Hong Kong clarifies on media reports regarding reform implementation plan

http://www.reuters.com/article/idUSFWN1DV010

2) BRIEF-China Unicom Hong Kong announces October operational numbers

http://www.reuters.com/article/idUSFWN1DJ04Z

KCQ’s of China Unicom (Hong Kong) Ltd.

In 2015 China Unicom stepped towards the 4G network. It developed the deployment of high speed broadband network with their central focus on 4G network. Throughout the year the company further computed 306000 4G base stations and making a sum total of 399000 4G base stations all together. The 4G network had a good coverage over the urban areas, cities and developed towns and villages. China Unicom accelerated the upgrade towards 4G+ and initiated carrier aggregation pilot schemes, raising its network peak downlink speed to 300 Mbps. The Company also launched an in-depth cooperation with China Telecom to speed up the improvements in network service qualities and working efficiency of assets.

The Company has long been combining social responsibility into its own development determining to create common value for all concerned parties. The Company keenly supported the built out of smart cities and developed information technologies that advanced the livelihood of the general public and executed the “SPEED UPGRADE and TARIFF REDUCTION” initiative by supporting the country’s efforts in improving informatisation and transformation and upgrade of traditional industries.

To provide assurance, suitable and efficient service to its customers, the company strengthened the management of real name registration, improved its service offerings and made a network environment that is environment friendly and secure. Alongside the company not only promoted a culture of fairness and harmony and focused on the development of the careers of the employees and their well being but also brought out activities to eradicate poverty and support education with donation on a regular basis, so as to come back to society and encourage the sustainable development of the country.

One of the major things I have notice about China Unicom is that how beautifully

pleasing its Financial Statement is. It is crystal clear that lots of work has been gone into making this report presentable, it looks to me like some kind of an advertisement. I feel that the firm has an objective of making a positive impression and goodwill with their financial statements.

China Unicom’s financial statements also make it reasonable that they are constantly looking out for serving the interests of their customers and their shareholders. It is apparently clear that they are working in a competitive market, and it seems to me that their commitment to their customers and their association with people and community is what sets China Unicom apart from its competitors.

Distribution Channel: In the last year 2015 the company combined channel and operations by the authority of its Woego platform in making cooperation between the two. The company fully held the “INTERNET +” trend and further extended towards e-commerce into various areas like operations and development, corporate management and customer service with an aspiration to drive customer value.

Customer services: The Company made great effort towards building a customer oriented system which combined customer services, maintenance operation and sales and marketing, fully realized the value of service channels, further continued to improve customer services in main areas and promoted important customer service operations based on work orders.

Services

Through nationwide GSM, 3G and LET networks, The Company provides the following services to the public.

Core services that include domestic long distance call, local call, international long distance call, domestic roaming and long distance call to Hong Kong, Macau and Taiwan, roaming to Hong Kong , Macau and Taiwan, international roaming and high speed mobile broadband service.

It also has new Value Added Services (VAS) such as mobile music, mobile TV, mobile mailbox, WO portal, WO store, WO reading.

Traditional VAS includes SMS, MMS, ring back tone, GPRS, wireless internet access card.

Company’s Challenges

The Company's mobile service came across absolute challenges from "Speed Upgrade and Tariff

Reduction", "One-month Mobile Data Carry-over", "VAT Reform" and growing competition, etc

in 2015. Mobile billing subscribers reduced by 14.26 million to 252.32 million during the

year.RMB46.3 was the Mobile billing subscriber average revenue per user (ARPU). The

Company's competitive edge in 3G service had been quickly disappearing as competitors came

up 4G promotion during the year. The Company strengthened business development in

grouped context and integrated operations by continuing to optimise its cBSS-based mobile

pricing and promotion system and accelerating development of various market sub-segments

such as families, town and villages, campuses, etc. The Company has accelerated 4G+ service

deployment, launched a carrier aggregation pilot programme, optimized 4G product offerings

and fully opened up its 4G network. The Company has gained differentiated edges in terminal

supply and channel service support by attaching its industry-leading Woego platform to support

integrated channel and terminal operations. By targeted initiatives integrating terminal, the

Company promoted subscribers to upgrade their terminals and packages. According to the type

of customer groups in different businesses, China Unicom developed online marketing eco-

system for different groups. The total mobile handset data traffic reached 695.83 billion MB, up

by 60.1% annually. Nearly 2,200 partner companies linked WO+ open platform, with a total of

790 million connection times throughout the year.

Company’s marketing strategies:

In the ever changing business environment the Company took some marketing strategies in 2015 are as follows:

The Company boosted up fibres network upgrade and took hold of the leading position in full service family customers with “Smart WO Family”

The company also achieved combined operations of terminals, channels and business development with its WOEGO platform.

Focusing on the mobile internet, the Company developed an Internet partnership model featuring mutual channels, cooperation in data traffic and joint operations with open capabilities as the foundation.

China Unicom initiated specialized operations in IDC and cloud computing ICT and Internet of Things.

Even it developed the ecosystem in main industries and explored business opportunities in similar application product markets. And as net result revenue from corporate customers maintained continuous growth.

STEP 3I have entered the figures from China Unicom (Hong Kong) Ltd’s the Annual

Reports of the last four years into a spreadsheet (saved as a separate document).

You can find the spreadsheet here:

China Unicom (Hong Kong)Ltd Company Spreadsheet 2016.xlsx

STEP 4Study Guide KCQ’sChapter1

I love the subject accounting from my school days. I am definitely not studying this subject just to fetch marks in my exams but am studying this subject to gain an in-depth knowledge and understanding in it.

What is this Accounting? Well I will presume that accounting is in fact (as Martin suggested) ‘Recording a whole lot of transactions of a business, like a memory aid’ I like the initiative that it could all constructed around such a simple and meaningful idea.

I very well understand the value and importance of keeping record in business. Previously I did not know the background of accounting in such a depth but the history lesson is highly appreciated. I am aware of different ways I personally record transactions in the workplace. I am very keen to see the ways these transactions and the record keeping fits in to the ‘big picture’.

“Two-sides to everything”. Does everything has two sides or it is talking about the accounting aspects?

The 5 Elements of accounting and the accounting equation: These are incredible, I am astonished to find out how these simple elements and equations can provide me, an in depth understanding of the fundamentals and purpose of accounting. It is very much realistic and it is applicable to each and everything. It becomes more clear and practical when I put in the numerical and solving the sum.

The conclusion is beautiful. I got to understand that accounting provides only one part of the truth, and not the entire truth. This is interesting; maybe accounting really could be referred to as a ‘Game’.

Chapter 3 Well I find the starting part of this chapter a bit lengthy and inappropriate. All

these lines about getting to meet new people in a party are has diverted my

mind rather than focusing on the main concept. It made me recall some parties where I knew no one except the host. All that I absorbed from this page is that each financial statement is a unique piece.

I realize the information given on the various reports integrated in firm’s financial statement but on the other hand am having a bit problem in following the writer’s journey. The similarities confuse me rather than simplify. I feel that I learn better if I am given facts and I will be able to develop an understanding of my own and discuss with my friends and others to reach an understanding.

I quite like the idea of just getting introduced to the financial statement. The next thing what I got to know in details is that the word “Dividend”. I heard

the word many a times but did not actually know what exactly means is but now I understood that a dividend is what a firm pays to his share holders. Initially I use to think that dividend was a source of value but no, rather it’s a transfer of value. But is there really any difference between source of value and transfer of value?

Ratios I just can’t imagine only with the help of ratios we can analyse and estimate the forecast of a business. It is still unbelievable to me and I want to learn about it more.

Operating Earnings. Well this was a new term to me but in this chapter the term got clarified. Operating earnings is the earning that is received from the firms daily operating activities. I also learnt the difference between Free Cash Flow (FCF) and other cash flows. I also got to know about EBITDA is a commonly used abbreviation. It is earning before net interest expenses, income tax, amortization, depreciation.