Loan Application For Bisset Family Trust - Details And Purpose

In order to be deemed competent, you will need to evidence the ability to:

• Develop detailed broking options designed to maximise the client’s outcomes and reach client objectives which incorporate elements from research and which address complex needs and issues
• Identify and describe key assumptions upon which the plan is based
• Provide a detailed analysis of research strategies and findings
• Test and make appropriate checks on a proposed plan for its integrity and compliance
• Assess the impacts of taxation, social security, economic and other government policies on client investment and financial requirements
• Interpret and comply with industry regulations and codes of practice
• Identify the roles of associated financial advisers and work effectively with them
• Assess broking options, financial markets and investment characteristics
• Use appropriate sales and marketing methodologies and provide justification and research evidence
• Gain client feedback on and/or agreement to the plan
• Prepare materials and personnel to effectively implement complex loan structures
• Establish appropriate audit trails and effectively document records and data.

This form in relation to the loan submission gives out all the precise information that is vital for the applicants in order to make an apply for the loan so that precise assessment can be done after which the loan application can either be sanctioned or can be disallowed. All the aspects in relation to the loan application for Mrs and Mrs Bisset is presented as follows:

Borrower Details

Name	Andrew Mark Bisset	Jane Elizabeth Bisset
Salutation	Mr Bisset	Mrs Bisset
Age	52	50
Marital status	Married	Married
Home address	Currumbin Close, Carindale QLD 4152	Currumbin Close, Carindale QLD 4152
Health	Good	Good
Smoker	No	No
Occupation	Business	Business Partner
Projected retirement age	Not thought about it	Not thought about it

The phone number of the appointed accountant for the couple who is Ainslie and Partners is 07 3349 9999.

Background of the Client

Andrew Bisset is known to be a real estate agent and has been in this profession for over 20 years and on the other hand his wife has been working with him. They have 6 shops in Belmont. They even have a shopping centre that is registered under Bisset Family Trust. The overall value of the property is $1,450,000 and this value has been taken 2 years ago. The couple have a mortgage at ANZ Bank with a value of $ 625,000. The couple have rented out five shops and the value is $96,000 and the last shop is utilised by Mr Bisset for their own business and for the use, the company pays a rent of $42,000 annually in the family trust. The rent paid by the company has been paying higher than the actual fair market rental value as the rent amount is $20,000. Mr Bisset is a specialised real agent and is expertise in the field of commercial and industrial properties. Mr Bisset draws a gross salary of $78,000 from the company and further more withdraws $55,000 from the partnership business with Joseph Hooper.

The business was founded in the last financial year and their aim had been to acquire the real estate market. This business was previously operated with the help of the partnership between Mr Bisset and Joseph Hooper. Bisset Real Estate took over the business after Joseph retired and therefore at the current time period, Andrew Bisset is the only director for the existing business.

On the other hand, Mrs Jane Bisset had earlier been a property manager and she had been working as a property manager since the partnership agency was taken over by Bisset Real Estate Pty. She on the other hand withdraws a salary of $43,000.

Purpose of the loan

The couple are having the idea of applying for the loan as the couple as well as the company has the intention of buying a property of 3000 m² because of the fact that this land is closer to their shopping centre and the couple have a plan holding into the land for the next 2 years and thereafter wait for the purpose of rezoning. The value of the land is $600,000 and it is seen that is land was previously under the State Government Dental and Health Care Centre but this centre became obsolete after the building was destroyed. The land has been marked under the “Special Purpose” but it is seen that the local municipal council has declared the land to be  made use of for the purpose of future use commercially and it is due to the fact that this land has been declared within the Town Planning Scheme. The land has an address of 43 Belmont Road and the feature of the land is that there are two frontages and the traffic frequency has been high. The client has made the contract of buying the property as the trustees of their trust and the settlement amount to be due within 60 days. The client even wants to gain 100% of the property value from the loan and an extra $25,000 in order to pay out the financing amount, stamp duty and the conveyance expenses. A guarantee for the loan that they want to undertake comprises of the shopping centre and the land they want to purchase. The client has the idea of paying additional $20,000 in order to pay for the cost for the purpose of re-zoning of the land and thereafter receiving the approval to build the shopping centre on that land. This is the real plan for the client in order to take the loan from the desired bank.

Background of the Client

Details of the Facility

The land in accordance to which the client is looking forward to take the loan is discovered to be that the land was in use previously by the State Government for their Dental Health Care services. The land has been marked for “Special Purpose” by the state government but on the other hand the local council has declared the land for the purpose of future commercial property use and therefore has been named as Town Planning Scheme.

Fund position

Fund is one of the significant factor by taking assistance of which the client will be capable of buying the property which has a value of $600,000 and it is due to this fact that they are looking forward to take the loan. The overall loan amount that they are looking to take is $625,000 as the additional money would be used in order to pay for the stamp duty and the other related expenses. They are looking forward to keep the shopping centre and the purchased land as the guarantee for the loan. On the other hand, it is seen that the couple have an existing mortgage from ANZ Bank and this has a value of $625,000 and after assessing the financial scenario of the couple, one can say that annual income of the couple is sufficient in order to get their loan sanctioned. It is seen that they have the capability to pay out the loan within the stipulated time and therefore they are financially sound.

As the security of the loan, the client has the idea of keeping their existing shopping centre land and the land that would be purchased with the help of the loan. The value of the land where the shopping centre is situated has been $1,450,000 two years earlier and hence, this will be adequate as collateral in order to pay for the loan in case the couple is unable to pay for the same.

Risk Assessment

The extent of risk for the client has been low mainly because of the fact that they have their own business and being a business that is acquired from a well established business it is seen that the level of profit earned and the income received is high. The risk related to them has been the health factor for the couple as they are middle aged now and anything in their health can have an impact on their business and their activities as well. The changes in the tax regulations or unprecedented economic events can have an impact their business. Therefore, the recognition of these risks would be helpful in the reduction of risks and thereby have a peaceful future life ahead. This would be helpful in the pay out for the loan and the mortgage that are existent to them and even maintain their level of income.

Purpose of the Loan

Recommendations

The client need to purchase an insurance for their business and individually so that this insurance would compensate for the any kind of unexpected events. All the documents related to the client need to be presented in an orderly manner and all financial documents of the collateral provided needs to be submitted beforehand. The couple need to increase their profit level and income and should even assess their financial condition from time to time in order to maintain balance in their portfolio.

Attachment

• Address Proof of the client
• Financial and income statement of the applicant
• Documents of the collateral

List of Questions

Question 1:	What are the annual income and the present age of Ray and Steve?
Question 2:	What are the key income sources of two of you?
Question 3:	Why are you interested in growing your business?
Question 4:	What sort of income do you expect to create from the business?
Question 5:	What is the present budget you need to start the business?
Question 6:	What are yearly expenses?
Question 7:	Please cite the aims and objectives for developing your business
Question 8:	Please explain the need of the investments you are looking forward to
Question 9:	What is your present bank balance?
Question 10:	What is the basic capital required to assist the expansion?
Question 11:	What is the role you want us to perform?
Question 12:	Have you followed the investment rules that are disclosed by the Australian government?
Question 13:	What would be your actions if the investment amount reduces in next 40 years?
Question 14:	Explain the current demands of going into new investment for the business
Question 15:	What is the actual source of the income for your business?
Question 16:	What do you desire; short-term gains or long-term returns?
Question 17:	Does any sort of short-term risk have an impact on the development of the business portfolio?
Question 18:	Specify the actions taken during the investment loss
Question 19:	Explain your investment strategy, which is being that is currently being undertaken during the procedure of making decisions in order to mitigate risk
Question 20:	How much effectively do you have knowledge about the demands in the investment market?
Question 21:	Kindly specify the past decisions associated to investment and its effect on profit
Question 22:	Please identify the conciliation priority level of you have
Question 24:	Kindly explain the criteria you desire to gain success
Question 25:	Highlight the procedure of borrowing undertaken from your side for growing the business
Question 26:	Explain investment method of your business
Question 27:	Identify the present financial scenario of the business
Question 28:	What are the other investments that you may undertake in future?
Question 29:	What qualities and qualifications are demanded by you from the consultants?
Question 30:	Are there any geographical limitations of your business?
Question 31:	What are the geographical advantages of your business?
Question 32:	Do you have the ability to maintain the extent of income till the time of loan?
Question 33:	What is your risk tolerance?
Question 34:	Address your current disposable income

Report

This document is given to the customer to gain knowledge of their actual position, the demand for taking the loan in order to develop their business and thereby raise their extent of profit.

The case study is related to approval of the loan for Steve and Ray who are entrepreneurs for a transport company and have been having a good business in the Australian economy. They are in the intention of growing their business and therefore has been looking to start a new business where trailers would be given out as rent and other tools would even be provided to the current firm of Steve and Ray, which would be helpful in the development of the business performance for both the companies and thereby there would be a rise in the extent of income as the money would remain within the two businesses. This is even helpful for the existing company to reduce their reliance on the external suppliers. The issue that is to be taken into consideration that there are numerous lending companies from where they can take the loan but the selection of the company would be based on the objectives of the customers.    

Security

The transport company has been operational for over 34 months and therefore gains significant amount of returns. The financial statement of the company has been appreciable and the profit attained is ideal for them to get their loan sanctioned. The security that would be given out by the clients will be their entire transpiration business and even the property over which the company is established. The overall income and the value of property will be sufficient to be the collateral for the loan.

Facility

The customers have the aim of growing their business and in order to develop their existing business and in order to do the same is looking to start a trailer renting business and the rent will be given to the existing company of the customer. This in a way will be helpful in the rise in the extent of profit for the business as it is seen that the external suppliers will not be dependent on by the current business. In order to start the business they are looking to take a land on lease and the rent will be $6000 per month.

Details of the Facility

Lender Details

The details for the precise lender are given as follows:

Loan Providers	Commercial equipment finance
ANZ	· Rate of interest at 7.00% · No Application Fees · No Annual Fees · 5 to 30 years minimum term loan · $10,000 to $100,000,000 loan amount provided · LVR 80%
BOQ	· Interest rate 5.00% · No Application Fees · No Annual Fees · 5 to 15 years minimum term loan · $200,000 to $100,000,000 loan amount provided · LVR 65%
Commercial Bank	· Interest rate 7.80% · No Application Fees · No Annual Fees · Maximum 15 years term loan provided · $25,000 to $100,000,000 loan amount provided · LVR 85%

Client’s Requirement

The client is in the need of a commercial finance for the tools and the vehicles that is essential for the couple in order to initiate the new company with the help of which they can develop their entire business operation. They are in need of a loan which would be helpful in the development of an effective business process with the help of lower extent of risk and interest, which is ideal for the customers. The customers are in need of an additional finance of $500k for the purpose of future development of the business. The client has generated a new business in the name of Henman Holdings Pty Limited. The tools that are needed would be used up internally in the existing company and the income that would be received as rent will be utilised for the repayment of the loan. In this manner, the loan can be repaid from the profit without any additional expense to the external parties and thereby the tools can be attained from the lender and the profit for the business would increase as well.

Personnel

The owners in order to complete their business in an effective and orderly manner would be in need of a solicitor and an accountant, who would provide advice and suggest the process of payment of the loan and the purpose of finance structuring in accordance to the income of the client. The solicitor has the role of reviewing and preparing the contracts in order to get into agreement with the lender and thereby the aspect of the client would be safe as well.

Process timing

The process timing is dependent on the degree and the efficiency with the help of which all the documents that are required by the lender will be submitted by the client. The address proof, the income statement and the other related documents of the company would be helpful in the determination of an idea for the client with the help of which the lender would have an idea whether the client is competent enough to pay for the loan.

Name	Ray Henley	Steve Manning
Salutation	Mr Henly	Mrs Manning
Age	NA	NA
Marital status	Married	Single
Home address	NA	NA
Health	Good	Good
Smoker	No	No
Occupation	Business	Business Partner
Projected retirement age	Not thought about it	Not thought about it

Ray and Steve are partners and have been operating a transportation company for a long time. They are financial controllers for transportation companies earlier and it is seen that Steve has a marketing degree and on the other hand Ray has a MBA degree. Steve is currently pursuing a HR degree as he feels that this degree would be helpful in the operational activity of their current business.

Fund position

Background

The client Steve and Ray have been partners for a transport company and their business has been productive in the economy. The company has been looking to expand their business with the advent of new orders and contracts. Therefore, in order to reduce their dependency on the external suppliers and thereby reduce their cost, the partners have decided to start a new business by the name of Henman Holding Pty Ltd and this company would be providing trailers to their existing company on behalf of a rent. The income on behalf of the rent would be used for the purpose of paying for the loan and in this manner profit would increase and the cost would reduce as well. The required loan amount is $500k.

Purpose of the loan

The loan that would be taken will be used in order to purchase trailers, trucks and transport gadgets that would be put out for rent to their parent company and in this manner an income would be created that would be used to pay for the loan. The loan amount will even be used for the purpose of paying for the land that would be used in order to maintain office for the new company.

Facility Details

The facilities that is required from the loan comprises of lower level of interest rate and minimum amount of risk that would safeguard the operational activity of the business. The loan needs to have a higher payment tenure and thereby needs to have flexible payment value so that one can pay higher when required and pay less when the business is not doing ell.

Fund Position

The company is need of a loan amount of $500k that would be used for the purpose of buying the trailers, trucks and other goods and even paying for the land. This would assist the client to bring in new orders and contracts within their business and lowering their external costs with the help of which the business would develop and accordingly new agreements and orders can be taken into account.   

The client is in the idea of keeping collateral for the loan and therefore the documents of the existing business would be kept for the loan. The value of the property that would be used for the purpose of collateral is equivalent to the amount of loan that would be taken and therefore the security will be adequate.

Risk Assessment

Risk Assessment

The risk associated to the business has been the liquidity scenario and the changes in the external factors for the business. The rise in the price of oil and other market risks can reduce the extent of income and thereby can hamper the payment for the loan.  

Recommendations

The client has to assess their operational activities on a frequent basis in order to understand the extent of profit and losses for the company. In order to maintain effective level of business, it is seen that the client need to assess the market in order to understand the risks that are existent so that plans and actions can be taken in order to mitigate the same.

Attachment

• Address Proof of the client
• Financial and income statement of the applicant
• Documents of the collateral

In order to gather the information in accordance to the information that is essential for understanding the complex requirement of the client, it is primarily essential to conduct a meeting with the client. Once the meeting has been fixed, all the services and the consultancies that would be provided to the client is properly explained so that the client has proper idea about the services they would receive and thereby dissatisfaction reduces. The clients are even made aware of the post consultation services so that the client can take their assistance even when they are having issues even after making the investment.

In order to understand the requirement of the client, one has to say patient and therefore would look forward to the understanding all the demands and the desires of the client. The questioning technique used would be in some cases can be direct and in certain instances would be indirect and indirect questions are asked with respect to the personal information of the client. The indirect questions provide answers that advisers can understand thereby better results can be given. An informal relationship should be maintained with the client so that they feel relaxed and do not hesitate to share their actual concerns.   

The language that would be used should adhere to a common aspect and would not be based on some sort of culture. The questions as well as the behaviour will be in a neutral sense so that the customers feel that they are intolerant to the cultural issues and look at everyone to be the same.

The interpersonal skills play a significant role because of the fact that this helps in the development of a better relationship with the client. The interpersonal skills make the client more relaxed and comfortable and therefore assist them in answering in a comfortable manner.  This is done with the help of understanding the feelings of the client and the attitude.

Recommendations

Rapport is created with the client with the help of soft talks and light snacks to the client with the help of which the client can gain trust on the adviser. The extent of professionalism is understood with the help of the understanding the desire of the client and accordingly meet their demands and requirements. The complex broking process will be delivered in a simple and logical way to the client so that they understand in a very effective manner and this is done with the help of the communication skill.

Answer to Question No 2

The process of recording the information is done with the help of a pre-designed template and the questions within the template are asked in the initial interview and the answers are recorded within the template as well. In case the meeting is done through telephone or video chat, then all the information is recorded with the help of a recording device and thereby the conversations can be looked upon by the adviser at any future point of time. A distinctive process is created with the help of which an effective timing and the sorting according to the priority is created. In this manner the information can be sorted according to the priority and thereby can be incorporated in the planning process accordingly. There are several kinds of electronic technologies used for the purpose of recording the information and one of them is saving the data in the hard drive as it would be safeguarded and will not be available for use by the external parties. The company has their own software that are used so that all the information is recorded within the company and no leaks are done outside in accordance to the information. All the suggestions and advices that are given to the client are provided according to the structure laid down by the company and these advices are even recorded so that in case of any discrepancy comparison can be made with the same.        

Answer to Question No 3

The complex features of the situation of the client are understood in accordance to the objectives of the research and all these aspects are reviewed in accordance to the past documents of other clients and making a comparison with the financial condition of the client and their desire for an effective portfolio. These aspects are clarified and in case there are any issues, these elements are discussed with the client in order to resolve them. The opportunities and the constraints that are seen in the scenario of the client needs to be understood with the help of which effective level of advices can be given to the client. After the assessment of the condition of the client, an assessment is done so that suitable loan structure for the client can be constructed. The structuring of the loan process is done with the help of the taxation, economic, legislation and other factors are even taken into consideration with the help of which the financial issues existent with them would be understood and thereby a better loan process would be understood. In case it is seen that the financial scenario of the client is unstable then they are asked to refer to a One Tier advisor so that they can construct a precise financial statement for the client. The loan structure is assessed in comparison to the benchmarking structure with the help of which the effectiveness of the structure can be recognised. The checks with the compliance policies are done after they are found to be inappropriate then the options that are found to be unsuitable are rejected. The assessment is done by comparing with the objectives of the client and assessments are made in order to discover the fact that all the aspects have been covered. Once all the aspects are attained then this option is incorporated.

Attachment

Answer to Question No 4

In order to recognise the risks that are related to the client, it is essential to primarily discover the risks that are related to the client. After the various kinds of risks that are related to the client are discovered, then they categorically segmented into high, moderate and low. In this manner, advises can be given by the adviser to the client. There are several risk assessment tools that are available but generally the valuation practices are undertaken with the help of which the extent of risk with the portfolio of the client can be understood. A direct face to face discussion is generally done with the client in order to communicate the aspect and the results of the valuation of the risk to the client. The chances of risk are even explained so that the client would be ready for these consequences. A risk related questionnaire is constructed with the help of which the risk taking ability of the client is understood and thereby the capability of the facing the risks can be understood as well. The information regarding the risk would be portrayed on a frequent basis so that betterment of the client can be attained. Any new controlling mechanism for the extent of risk would be addressed to the client so that their extent of risk can be reduced by a significant margin.    

Answer to Question No 5

The presentation of the loan option to the client is done with the help of a precise and effective structure that would be useful for the betterment of the business. The benefits and the limitations of the loan options are discussed with the client in order to provide them with the understanding of the reason the concerned loan option has been given to them. The brokerage fees and charges that are associated to the risk is even addressed so that no issues related to the fees structure would be existent among the client. The scenario of the lender is even addressed to the client so that they would have an understanding of the policies and the regulations that the companies need to comply with in order to stay in line with the rules of the government. This would be helpful for the lending company to perform in an effective manner and maintain ethics within their organizational framework. The documentation is given to the client after proper scrutiny and in a proper way with the help of which the clients can have a better understanding of the documents provided to them. The client are even informed about the services they would require from other parties like the accountants and the solicitors so that all their policies and plans will maintained in an effective manner. A consent form is provided to the so that sign the same as an evidence that all the advices provided to them are understandable and they agree to the same. in case of any issue related to the advice the advisers would provide further assistance. All the information related to the complaints resolution procedure is even given to the client with the help of which all the information in accordance to the external and the internal matters and this is forwarded with the help of a form.

List of Questions

Answer to Question No 6

There are several kinds of concerns that can be raised by the client and therefore it is essential to prepare plans and strategies in order to discover with the same. It is due to the fact that the documents that are gathered from the client are assessed comprehensively so that recommendation that would be given would be precise and accurate for the client. In some cases alternate plans and recommendations are even constructed in order to provide the same if the client is not satisfied. The financial guidelines and regulatory limits are even addressed to the client so that they abide by the same and maintain effective financial portfolio.

Part A

RATIO	2016	2017	Risk Grade
1. Current Ratio	1.01	1.10	Low
2. Quick Ratio (Acid Test)	0.84	0.91	Low
3. Return on Equity (ROE)	0.71	0.69	Moderate
4. Return on Assets (ROA)	0.32	0.37	Low
5. Debt to Equity Ratio	1.19	0.84	Moderate
6. Debt to Assets Ratio	0.04	0.04	Low
7. Leverage Ratio	2.18	1.84	High
8. Interest Cover Ratio (ICR) – Existing Debt/s	7.50	9.59	High
9. Debt Servicing Cover Ratio (DSCR) – Existing Debt	NA	NA

Part B

	30 June 20 16	30 June 20 17
Net Profit Before Tax (Note 1)	32778	35825
Potential Add Backs
Interest	4372	3735
Depreciation / Amortisation (Note 2)	9500	8150
Directors Salaries / Superannuation (Note 3)	32000	35000
Other non-cash items	NA	NA
Extraordinary / Non recurring expenses (may be Plus or Minus) (Note 4)	NA	NA
Earnings Before Interest, Taxation, Depreciation, and Amortisation (EBITDA)	78650	82710
Taxation allowance on Net Profit (Note 5)**	30%	30%
Available for Debt Service	23595	24813
Interest Cover Ratio	7.50	9.59
Proposed Deductible Interest Costs:
Existing $  k @  % *	9%	9%
Plus Proposed $  k @  %*	2%	1.5%
Total Proposed Interest Costs	4459	3791
Proposed Interest Cover (Note 6) (EBITDA divided by Proposed Interest Cost)	17.63	21.81
Debt Service Cover Ratio
Existing O/D or Credit Card assumed fully drawn at prevailing interest rate interest only*	80,000	57800
Existing Loan Repayments	7200	5202
Proposed Loan Repayments	6000	5000
Total Commitment Proposed	13200	10202
DSCR (Note 7) (Available for Debt Service divided by Total Commitment Proposed)

Part C

The serviceability analysis addresses the fact that the client needs to maintain effective level of income in order to pay the loan in an effective manner. The financial scenario of the client is not effective and therefore careful assessment and a proper streamlining advice towards the channelling of their income would improve their financial scenario and their ability to make payments.

A : TRUSTS

What is a Unit Trust?

A unit trust can be defined as an unincorporated mutual fund structure that permits funds to hold assets and gives profits that goes straight to owners of the individual unit, instead of reinvesting them back into the fund.

What is a Discretionary Trust?

A Discretionary Trust can be defined as a trust in which the number of shares of each and every beneficiary are fixed by the discretion of the trustees and not by the settlor in the trust deed.

What is a Hybrid Trust?

A cross between a Discretionary and a Unit Trust is called as a Hybrid Trust, it is quite appealing as it includes the benefits of both and is an extremely useful structure.

What is a Discretionary Family Trust?

The term family trust is referred to as a discretionary trust set up to hold a family's assets or to conduct a family business. In this the beneficiaries do not have a fixed entitlement or interest in the trust funds and the trustee has the full discretion to determine which of the beneficiaries are to get the capital and income of the trust and how much.

What is a Trustee?

A Trustee is an individual person or member of a board, who has got the full control or powers of administration of property in trust with a legal obligation to administer it exclusively for the specified purposes.

Define the differences of each type of Trust, including the obligation/s of the Trustee

Each of the trust has their own functions and therefore they are different from each other and each one of them has been addressed in the earlier questions.

Provide an example of when each type of Trust would be used.

Unit Trust- Stock of a company

Discretionary Trust- Will of an individual  

Hybrid Trust- Low risk assets

Family Discretionary Trust- Family trust any trust deed for a religious property

B COMPANY

What are the legal requirements of a company?

Following are the legal requirements of a company:

• To have a registered office
• To have a principal place of business
• To disclose the personal details of the directors
• Always to keep financial and other records
• Payment of relevant fees to ASIC
• Keep ASIC notified for any changes
• Always to check annual statements
• To ensure that the company is solvent
• Always to act in companies best interest
• Appropriate use of information

What are the personal obligations of directors by law (please summarise)?

There are many and important legal responsibilities executedby directors under the Corporations Act 2001 and other laws, including the general law. Among these duties, some which are the most significant are as follows:

• To act in the best interest and good faith of the company having a proper purpose
• To implement care and diligence
• To avoid conflicts between the interests of the company and one’s personal interests
• To avoid the company trading while insolvent (i.e. unable to pay its debts as they fall due)
• If the company is being wound up, then to:
• Report to the liquidator about the affairs of the company
• Help the liquidator (e.g. by giving the company books and records in your possession to the liquidator).

Can anyone be a director of a company?

For a person to be eligible to become a director of a company, s/he must be:

• Be at least 18 years of age and
• Have consent to taking on the role and responsibilities of a director.

What is the minimum number of directors required?

Based on the type of the company the minimum numbers of directors are as follows:

• In case of a proprietary company there have to be at least one director, who must live in the country.
• Where as in case of a public company there have tobe at least three directors (not counting alternate directors), among whoat least two of the directors must live in the country.

What is a Balance sheet?

A Balance sheet is a statement of the assets, liabilities, and capital of a business or other organization at a particular point in time, briefly detailing the balance of income and expenditure over the preceding period.

What is a Profit and Loss statement?

A profit and loss statement is basically a financial statement that sums up all the revenues, costs and expenses incurred during a specified period, which is usually a fiscal quarter or year.

What is Depreciation?

Depreciation is an accounting process which allocates the cost of a tangible asset over its beneficial life and is also used to account for the declines in value over time.

What is Liquidity Ratio?

A liquidity ratio is a calculation that is used to measure a company's ability to pay its short-term debts. It is basically the ratio between the liquid assets and the liabilities of a bank or other institution

What is Current Ratio?

The current ratio is a liquidity ratio that finds a company's capability to pay short-term and long-term obligations.

What is Debt to Equity Ratio?

The debt-to-equity ratio (D/E) is a financial ratio which shows the relative share of shareholders' equity and debt used to finance a company's assets.

What is a Cash flow Statement?

A cash flow statement, which is also known as statement of cash flows, is a financial statement that indicates the different changes in balance sheet accounts and income and how this changes affects cash and cash equivalents, and breaks the analysis down to operating, investing and financing activities.

What is an Asset?

Anything of value which can be converted into cash is known as an Asset.

What is Liability?

An obligation which is also reported on to a company's balance sheet is known as Liability.

How is a Net Profit determined?

Total Revenue -Total Expenses = Net Profit

How would you define Equity?

Equity can be defined as the amount of capital contributed by the owners or the difference between a company's total assets and its total liabilities.

Under Australian taxation conditions, what are allowable expenses (provide 3

Acceptable examples)

• Gifts and donations
• Self-education expenses
• Home office expenses

Answer to Question No 4

Commercial Bank Bill

A commercial bill helps to raise the finance that is needed for investment purposes through negotiable bank bills.

Invoice or Factoring Finance

Invoice or Factoring Finance can be defined as the selling of invoices of a company to a third party company to improve cash flow and reduce bad debt.

Chattel Mortgage

It is a commercial finance product by the help of which a customer takes ownership of the vehicle (chattel) at the time of purchase of that vehicle.

Asset Finance product or Equipment Finance

It is a type of lending that provides the access to business assets such as equipment, machinery and vehicles, or permits to discharge cash from the value in assets owned.

Answer to Question No 5

Principle	Outline of Principle
Creation and protection of value	Assists in the attainment of the objectives of the company with the help of frequent review of their systems.
Be an integral part of the company process	The risk management process need to be incorporated with the governance structure and be part of the process of planning
Be a part of making decisions	Helpful in making informed choices and recognize the priorities choose the suitable action
Address any kind of uncertainty	Recognize the potential risks so that the company can incorporate the controlling method in order to maintain profit and reduce the extent of loss
Be timely, systematic and structured	The method of management of risk need to be stable among the company in order o maintain consistency and effectiveness of the outcome
Be transparent and inclusive	This is done with the help of engaging the stakeholders within the overall risk management process.

Answer to Question No 6

It is essential to categorise risk mainly because of the fact that there are several kinds of risks that are related to the business and industrial activities. It is essential for the companies to understand the kind of risks that can have adverse impact on their operational process and understand the risks that can have an impact but the impact will be low or may affect at a latter point of time. The risks have to be categorised based on the priority of the company and therefore it is essential for the companies to categorise the risks based on the impact they would have and the time of impact of the risks. In this manner, better plans and policies can be constructed with the help of which these issues can be mitigated and the company can have an effective operational activity. The companies categorise the risk on the basis of high, moderate and low grades and takes plans and actions on the risks that are high as these risks would have adverse impacts and after taking care of these risks, they plan and strategise in order to take care of the other risks. This leads to the development of an effective risk management process so that all the risks can be resolved within a timely manner. 

A sustainability plan and policy is essential for any company to construct in order to maintain the goals and objectives in accordance to which the company would move ahead with their operational activities and thereby maintain competitive edge in the economy. This sustainability plan is constructed for Joe and Wilson Mortgage Broking Ltd, which is a mortgage broking company that has been functional in the market for more than a year.

The scope of the sustainability policy has been to provide quality and the most effective services to their customers and thereby maintain competitive edge and at the same time earn desired profit. Customers are the key source of the business and therefore satisfying and fulfilling the needs of the customers have been their priority. On the other hand, the most effective and quality services can be provided with the help of satisfied employees and therefore taking care of the needs and desires of the employees have been the goal for the company as well.

The policy that has been constructed is prepared by taking assistance from several sources and the key source that has been used has been looking into the policies that have been disclosed by the rival companies. This is helpful in the determination of the aspects and the elements that would be taken into consideration so that these aspects can be incorporated in their plans as well. The policy is prepared by taking feedback from the employees and even from their existing customers in order to have an idea about the aspects that are desired from their side. This is helpful in the development of the plan that would satisfy the factors for whom this plan has been constructed. It is due to this fact that all the stakeholders are made aware of the policy and thereby their perspective and point of view is considered in order to generate an effective plan for the company.

The policy constitutes of the incorporation of several plans and strategies and the significant ones out of them have been taking care of the environment. The company in their plan has looked to minimise the use of any kind of toxic materials and minimising the use of the non-renewable resources. In this way, taking care of the awareness is done and in the same way the safeguard of the natural environment can be maintained and in this way the society where they are operational can be satisfied as well. The other aspect that has been taken into consideration has been complying with the rules and the regulations that have been constructed by the government so that ethical standards can be maintained. In order to provide quality services, the company even has the plan of providing training to their employees on a timely manner in order to keep them updated to the changing working environment and thereby assisting the employees to stay competent in order to take care of the desires of their customers. Providing rewards and recognition to the potential employees would even motivate them and their peers as they would give out their best effort in order to gain these recognitions and rewards.

The incorporation of these strategies would be helpful in the development of the business due to the fact that employee training would be lead to better services from their part and hence all the aspects desired by the customers can be satisfied. In order to provide training a cost would be incurred and therefore the company has maintained a contingency for the same as well in order to meet these expenses. The training process would be given during the lean season that is during the month of Christmas as the extent of customers is less at that point of time.

The policy is even constructed in order to create an understanding of the commitment of the firm towards sustainability and this is seen with the help of the regulations and plans that have been laid down by the company, which asks the employees as well as the management to comply with the same. This would lead to the creation of better business opportunity. The sustainability report is in compliance with the performance indicators and therefore the effectiveness of the plan would be understood.           

The development of workplace sustainability can be attained with the help of the motivating the employees and keeping proper supervision over the workplace activities. All the outcome of the company and their operational activities need to be disclosed to the stakeholders so that they would have knowledge about the same and accordingly provide feedback if required. The stakeholders are informed about the policies that have been incorporated so that they are aware of the result and are even aware about their accountabilities. The communication process is a to way one as the feedback of the employees are even taken into consideration and the decisions of the management are even conveyed to the employees. This leads to a better working environment and the development of trust. The assessment of the market is even done on a frequent basis in order to have an understanding of the changes that are taking place and accordingly make changes in their policies in order to maintain resource efficiency sustainable development of their business. The responsibilities are distributed among the employees and the management and each one of them are allocated with a job in order to perform them in an effective manner. Feedbacks would even be taken from the customers and the employees in order to understand the changes that are essential in order to enhance their business activities. It is seen that all the aspects that are recorded in the sustainability policy need to be assessed and monitored in order to have an understanding how the performance has been improving and what actions can be taken further in order to improve their business performance and activities. The sustainability plan even acts as a trend for the business that can be taken into consideration at any future course of time in order to discover certain aspects that are essential for the development of the business in an effective manner.