British American Tobacco
Answer:
British American Tobacco (BAT)
Introduction:
British American Tobacco came in to existence in the year 1902 and was first listed in 1912. Today, It is one of the top 10 companies that are listed on the Stock Exchange of the London. Company is also listed on the Johannesburg Stock Exchange. The cigarettes made by the company are chosen by the adult smokers all over the world and it is a market leader in about 55 countries. For ensuring sustainable future for it the company is delivering brand, quality and value to its customers.
The Area that is covered by British American Tobacco Australasia Area includes Australia, the South Pacific Islands and New Zealand. The export business of the company supplies its products to various countries that in
cludes: Vanuatu, French Polynesia, Nauru, East Timor, Cook Islands, Niue Tuvalu, Kiribati, Wallis & Futuna and New Caledonia.
Conceptual Framework
The IASB has provided a new concept in the accounting field which is the conceptual framework. The presentation and the grounding of the financial statements are included in the conceptual framework. (BAT 2015)The conceptual framework helps in identification of the concepts that will be used in revising and establishing the IFRSs. Earlier, there were many setters for the standard of accounting those have operated without having a formal framework that further lead to the hazards in accounting standards. The earlier standards were inconsistent with each other and increased the risk of standards due to which preparing the financial statements became difficult. The IASC issued the “Framework for the Preparation and Presentation of Financial Statements” in the year 1989 and in the 2001 it was adopted by IASC.
Relevancy and Faithful Representation in Financial Statement-Minatory
IAS 1 presentation of financial statements year 2015 includes the following:
- Financial position statement
- Profit and loss statement
- Explanatory records and accounting policies
- Changes in equity
- Comparative information statement
The annual report of BAT includes all the information required as per the IAS along with an audit report for proving the fair presentation of the BAT. (BAT 2015)
The BAT includes the governance report in its report which is a must for all the publically listed companies. Though sustainability report is not mandatory but the company includes it as well in its annual report. There is chairman’s report as well as Director report which is important according to the ASX compliance policies.
Key Risk Factors
For creating the faith of the investor about the company the company shall present the real information about itself in its report which is the social responsibility of the company.
In the same way BAT has accepted the risk of tobacco and made efforts for reducing the same. The company has taken various steps to reduce the short term as well as long term risks involved in the industry. (Qusetion more 2015)
Whistleblowing
There is a whistle blowing policy set by the standards according to which the employees and staff can raise any issues without any kind of fear. There are local procedures for the policy for the group and at the London headquarters of the group. (Connett 2015)The quarterly reports are received by the committee about the incidents of whistle blowing that are discussed in detail. It helps in investigation of the various raised matters and taking follow up actions. There has been increase in the incidents in the year 2015 due to the results of adaption of new standards and awareness during 2015. (Durante 2015)
Tax
Tax is charged on the profits along with deferred tax. The calculation of the current tax is according to the basic tax laws in the countries where the companies, its subsidiaries, joint arrangements operate and income is generated. The liability method is used in deferred tax so that the temporary differences in the liabilities and assets can be known in the financial reports. The temporary difference that normally arise in the various assets and liabilities on those difference there is application of the deferred tax that mainly arises on the various investments etc. The deferred liabilities and assets are not discounted as per the IAS 12 Income Taxes, deferred tax assets and liabilities are not discounted. The payment and the recovery of taxes are exposed by the group with the deferred tax. Liabilities or assets that arise for these payments or recoveries are recognized when the amount can be estimated reasonably. (British American Tobacco 2015)
Corporate Governance
It means a commitment towards transparency.
For the continuous growth and sustainable development of BAT, it commits towards following the corporate governance. The BAT standards of business conduct reflects these principles that demonstrate the good corporate behaviour of BAT. They follow best business practice for which they are in the fore front for many years. All the staff and the group company follows the corporate governance all over the world. The company has designed the BAT statement of business principles for reflecting the expectations of the stakeholders.
CSR (Corporate Social Responsibility)
The British American Tobacco Australasia Governance Committee monitors the CSR of the BAT Australia along with the members of the Management board of British American Tobacco Australasia.
The Committee is responsible for CSR performance in markets in the Australasia region that enables best practices all over the area. (Bristish American Tobacco 2015) The corporate management responsibilities are demonstrated by the area marketers that are monitored by the Australasia management. The Statement of Business Principles guides the activities of the committee. For discussing the various matters the Committee meets twice a year. The resulting outputs of the above meetings are further referred to the CSR committee and the Asia Pacific Regional Audit .(5 2013)
Bibliography
5, E 2013, Bath University, viewed 30 August 2016, < Hyperlink "https://blogs.bath.ac.uk/tcrg/2013/01/22/new-research-explains-why-corporate-social-responsibility-is-unlikely-to-change-big-tobacco/"https://blogs.bath.ac.uk/tcrg/2013/01/22/new-research-explains-why-corporate-social-responsibility-is-unlikely-to-change-big-tobacco/ >.
BAT2015,Bat.com,viewed30August2016,<Hyperlink"https://www.bat.com/group/sites/UK__9D9KCY.nsf/vwPagesWebLive/DO6FKEVZ" https://www.bat.com/group/sites/UK__9D9KCY.nsf/vwPagesWebLive/DO6FKEVZ >.
BAT 2015, BAT.com, viewed 30 August 2016, < Hyperlink "https://www.bat.com/principles" https://www.bat.com/principles >.
Bristish American Tobacco 2015, CSR governance, viewed 30 August 2016, <Hyperlink "https://www.bat.com/csrgovernance" https://www.bat.com/csrgovernance >.
British American Tobacco 2015, Bat.com, viewed 30 August 2016, < Hyperlink "qhttps://www.bat.com/tax" qhttps://www.bat.com/tax >.
Connett, D 2015, Independent, viewed 30 August 2016, <Hyperlink "https://www.independent.co.uk/news/uk/crime/bullets-prostitutes-and-mass-corruption-how-a-tobacco-giant-british-american-tobacco-s-mr-fix-it-a6779226.html"https://www.independent.co.uk/news/uk/crime/bullets-prostitutes-and-mass-corruption-how-a-tobacco-giant-british-american-tobacco-s-mr-fix-it-a6779226.html >.
Durante, N 2015, Bat.com, t" https://www.bat.com/group/sites/uk__9d9kcy.nsf/vwPagesWebLive/DO9EAMHQ/$FILE/medMD9NNJRF.pdf?openelement >.
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