Assignment Task 1 - Step 3 - 6

                                   

Website:  https://www.recce.com.au/

Annual Reports: https://www.recce.com.au/company-announcements/

YouTube Channel: https://www.youtube.com/channel/UC593iI6zOhRy67Iqs-0AjMQ

Company Overview

Australia's Recce Pharmaceuticals is a biotechnology business dedicated to creating an innovative class of synthetic antibiotics. The company's main product, RECCE 327 (formerly known as R327), is well-known for its ability to specifically target and eradicate bacteria, including types resistant to antibiotics. With a distinct mode of action, Recce's anti-infectives aim to provide doctors with a therapeutic tool that works against various germs and may be used repeatedly. RECCE 327 has the potential to be effective against a broad spectrum of bacterial illnesses, including those brought on by types of bacteria that are resistant to antibiotics. The growing global issue of antibiotic resistance makes the research of new antibiotics imperative. As of 2023, Recce has been listed on the Australian Securities Exchange for seven years. Leading the way in the development of new and innovative therapeutics designed to treat serious infections, Recce is a well-known global leader in the field of anti-infectives. The dedication of the company to this goal is demonstrated by their actions. With four fully owned patent families, totalling more than forty patents or patent applications, Recce's intellectual property portfolio is always growing, diversifying, and improving.

To date, Recce Pharmaceuticals has received four Australian patents: 

Patent Family 1: Preserving Recce's distinct and extremely cost-effective production method. 

Patent Family 2: Safeguarding Recce's pharmaceutical distribution prospects.

Patent Family 3: Viral infection treatment technique and antiviral medication.

Patent Family 4: Process for Preparing Biologically Active Copolymer.

 

First Impressions on Recce

I had never really thought to just go to a corporate website and look around and study the financials and the rationale for the firm, so I found Recce Pharmaceuticals' website to be extremely interesting. It really got me thinking; almost everyone has taken antibiotics at some point in their lives for various reasons. But have you ever given the origin of the antibiotic much thought? Do you know anything about its history, or do you just take it because your doctor has prescribed it? The fact that there were fourteen members of the board of directors caught my attention. This led me to wonder why a corporation needed so many directors; we will look at that question a little later in this piece.

I quickly understood that the company I was working for was not a tiny one as I skimmed through the Annual Report for 2023. We were talking about millions of dollars in medical research, but one thing I did notice was the lack of income, the company was running large losses each year, and this left me wondering how they could continue to keep going in the years ahead.  In my research on this company, I came across an article on the Simply Wall St website that caught my attention, you can read this article at the following link: Here's Why We're Watching Recce Pharmaceuticals' (ASX:RCE) Cash Burn Situation. I found this article interesting, particularly the graph showing how the cash balance has been changing over the last few years. As I discover more about this organisation and what they do, I cannot wait to investigate its finances in more detail.

KCQ’s on Annual Report

While Reading through the company’s annual report I found myself asking questions, these questions led me to further research and had me digging deeper to find the answers.

KCQ 1:  What is a Shareholder and why do companies need them?

An individual, organisation, or other entity that owns stock or shares in a corporation, and therefore becomes a partial owner of that business, is known as a shareholder. A shareholder who owns shares in a corporation is entitled to a share of the assets and profits of the company. Additionally, shareholders have the right to vote in annual meetings to participate in the company's decision-making processes. Companies issue shares to the public primarily to raise capital. A business can raise money through the sale of shares to finance operations, make investments in new ventures, carry out research and development, or settle debt. Depending on how many shares they own, shareholders are entitled to a certain percentage of the company. They can vote on significant corporate issues and participate in the election of the board of directors, among other key choices made by the corporation. Nonetheless, the quantity of shares held determines the degree of impact. Shares of publicly traded corporations frequently trade on a liquid market. On stock exchanges, shareholders can purchase or sell their shares, creating liquidity and determining the company's market value. Employees may receive shares or stock options from their employers as part of their benefits. Because both parties have an interest in the company's success, this aligns the interests of the employees and the shareholders. Disparate shareholder groups can aid in risk distribution. Companies having many shareholders are less vulnerable to the effects of individual actions or financial difficulties than those that are dependent on a single organisation or a small number of investors. Transparency requirements are frequently stronger when an entity is publicly traded. Companies are required to provide the public and shareholders with information about their activities, finances, and future, which can increase credibility and confidence. Possessing a sizable shareholder base may help in merger and acquisition talks. The decision of a firm to accept or reject an acquisition offer may be made by its shareholders. It is important to remember that, even though shareholders are vital to a company's ability to raise capital and shape its decisions, businesses nonetheless need to strike a balance between their interests and the organisation's long-term objectives. Applicable laws, rules, and moral principles frequently control a company's relationship with its shareholders.

KCQ 2: When a business is losing money why is it possible for shareholders to make money?

A company’s stock value usually declines when it is losing money because its entire performance and financial health are negatively impacted. Nonetheless, there are still instances in which shareholders can profit, though these are frequently dependent on a variety of variables. Share prices are impacted by investors' expectations of a company's prospects in addition to its current financial performance. Investors may keep onto or even purchase more shares in anticipation of future returns if they think the firm can improve its operations and earn a profit in the future. Investor views and market conditions have an impact on share prices. Even if the company is currently losing money, positive news, strategic moves, or perceived advantageous leadership changes might cause share values to rise. The general state of the sector in which the business works may influence the performance of its stock. Despite their current losses, shareholders may perceive opportunities for future profits if the industry is predicted to recover. Some investors trade speculatively to profit from sudden changes in stock prices. They might purchase shares at a discount, hoping for a quick gain in value, and then sell the shares to turn a profit. Even though it is less typical for businesses with long-term losses to do so, some may nevertheless decide to use capital allocation strategies such as dividend payments or share buybacks. Dividends and higher share prices from fewer share buybacks are two ways that shareholders can profit. A company's total worth may be influenced by the inherent value of its possessions, such as real estate, patents, or intellectual property. There may be occasions when investors feel that a company's value is greater than its current market valuation, which could result in profitable prospects. It is important to remember that there are no assurances of favourable returns when investing in companies that are losing money. Before making an investment, investors should carefully consider a company's financial standing, management style, and prospects for the future, particularly if the business is currently losing money.

KCQ 3: Why are there so many members on a board of directors?

Depending on the size, structure, and governance policies of the organisation, a board of directors may have fewer or more members. Boards frequently seek to include people with a variety of abilities, backgrounds, and knowledge pertinent to the business's operations and sector. Because of its variety, the board can offer comprehensive advice and insights. Larger boards may be chosen by organisations with complicated operations, numerous corporate divisions, or a global presence to include a wider variety of viewpoints and specialties. A larger board is better equipped to handle the complexities involved in a wide range of business operations. There are some governments and regulatory agencies that have the authority to set minimum and maximum numbers of directors for a firm. Firms must adhere to these regulatory standards, and their boards may be constituted accordingly. Shareholders choose directors to represent their interests. Greater inclusivity in the representation of different shareholder viewpoints can be facilitated by larger boards, particularly in businesses with a broad shareholder base. Committees (such as audit and pay committees) are frequently formed by boards to concentrate on facets of governance. The creation of these committees, which are made up of directors with the necessary experience, can be facilitated by larger boards. The composition of a board has an impact on how decisions are made. A more collaborative decision-making process is supported by larger boards in some organisations, whereas efficiency may lead to smaller boards in others. The number of eligible people who are willing to serve on the board may determine how big it is. Companies occasionally broaden their board of directors to include particular people who provide important expertise and experience. Boards may aim to interact with a wider variety of stakeholders, including as clients, staff members, and local officials. A larger board with a range of viewpoints can help to encourage this kind of involvement. Striking a balance is crucial, even while a larger board can have benefits in terms of variety and experience. Boards with exceptionally large memberships may experience difficulties with communication, coordination, and decision-making effectiveness. As a result, when deciding on the ideal size for their board of directors, businesses carefully analyse their unique demands as well as the applicable governance standards.

KCQ 4: Why does a company need an annual report? Would just a Profit and Loss statement be enough?

An annual report provides a more thorough summary of the company's performance and activities, even if a Profit and Loss (P&L) statement is an essential part of a financial report. The P&L statement, balance sheet, and cash flow statement are all included in annual reports. When taken as a whole, these financial statements provide a more thorough picture of the company's financial situation and health. The Management Discussion and Analysis is a component that is usually included in annual reports. In this segment, the management talks about the financial performance of the company, presents possibilities and problems, and gives insights into plans. Annual reports are a common tool used by businesses to showcase key performance indicators, accomplishments, and noteworthy changes from the previous year. Shareholders and other stakeholders can better grasp the company's operations considering this information. Annual reports include information on executive compensation, the board of directors, and other governance-related topics. They also provide information on corporate governance practices. Gaining the trust of stakeholders and shareholders is facilitated by this transparency. Businesses usually include information about potential risks in their annual reports so that investors are aware of the difficulties and unknowns that could affect the company. This aids in the decision-making process for investors. An effective means of communicating with shareholders and the public is through annual reports. They give the business a stage on which to communicate its story, its performance, and its vision. Annual reports are frequently used to interact with a wider range of stakeholders, such as staff members, clients, suppliers, and the community, in addition to shareholders. Accountability and transparency are promoted by this message. Businesses may provide assurances to stakeholders and shareholders regarding the authenticity of the financial information by including audited financial statements in their annual reports.

KCQ 5: How does this company keep going from year to year when it seems to have losses in the millions each year?

As I work through the financials for this company, I see that at the end of each year, the company has usually experienced a loss, and I mean a loss in the millions. This got me wondering how the company can keep operating, sustaining a pharmaceutical company would require a strategic approach. This is a question I am still pondering as I write this assessment piece.

Recce Pharmaceuticals – Am I Happy?

I am not unhappy to have received Recce Pharmaceuticals as the company to work on for this unit.  I do have concerns about how the company will continue to be sustainable from year to year carrying the losses it does and wonder where the money comes from to continue its research into pharmaceuticals, but after further research and looking at more data, I believe a lot of their funds are through fundraising.  I look forward to further looking at the financials for this company and better understanding how this business continues to run.

Studiosity Feedback

I was very pleased when I received my work back from Studiosity. The feedback was comprehensive and made me very pleased to read the comments and suggestions on how to make the assessment piece more academic. The suggestions given on essential grammar and punctuation challenges and the insightful information on sentence structure, paragraph structure, and general layout helped me greatly to improve my work and address issues that I know my work sometimes contains. I improved the assignment's quality by applying the recommended adjustments. I think Studiosity is a great service and will use it for future tasks owing to my pleasant experience.

Top 3 Blogs

Emma Rach - https://emmarach0.wixsite.com/the-stressed-student/post/why-study-at-all

While still very much a work in progress, I chose Emma’s blog as one of my top 3 because, firstly the title of the blog caught my attention (The Stressed Student Account) and made me feel as though I could relate to Emma immediately.  Upon clicking on the About Me section of Emma’s blog I found that Emma and I were very similar in that we both had families and chose to come back to study some years after finishing high school.  Her blog was also effortless to navigate.  I look forward to following Emma on her accounting journey.

Abektika Adhikari https://adhikariabektika.wixsite.com/abektika-adhikari

I love the title of this blog, who is not drawn to a mystery?  If I am to be honest when scrolling through the list of blog links, this was the first one I chose to click on. Abetika’s blog is simple and easy to navigate.  As someone who has not had anything to do with writing blogs, or even reading other people's blogs, I found this one extremely straightforward and had me clicking for more. The layout looks fantastic, and I look forward to following Abetika on the journey of Accounting.

Nicola Mossman - https://nikam98.wixsite.com/nmossman/blog

Nicola’s blog was the second blog I looked at and I was immediately drawn to the loveable face of Toby, Nicola’s dog.  The layout of Nicola’s blog, like the others I have chosen, is simple and easy to navigate.  When you are challenged by technology like I am, easy-to-navigate is just what you look for.  Nicola was also the very first person to respond to my link on the Blogs Link forum and made me feel like a part of the unit.  As I study fully online it is easy to sometimes feel disconnected from the rest of the group, so Nicola’s welcoming message and professional blog fills me with anticipation to see where her journey takes her.

Company Financial Statements

FinancialStatements for Recce Pharmaceuticals

Reflections and Reactions to Chapters 2 & 3 (Sections 3.1 and 3.2)

As I read through the Study Guide, I saw several important concepts that I regarded as necessary for understanding. As I think about these ideas, my thoughts inevitably turn to the data and consider what each statistic means to me. In Chapter 2, Accounting is referred to as “the Game” and one of the first sentences that I remembered reading was “To play the game, you have to learn the rules”, highlighting how important it is to understand the complexities of the accounting field. Chapter 2 provides an understanding of the variables affecting the similarities and differences found in the information contained in and displayed on financial statements. We learn more about the common practices among businesses and the factors that contribute to the unique aspects of financial reporting by examining the regulatory environment.

One question I kept coming back to while reading this chapter was, who made these rules? In our ever-evolving world, are these rules easily changed or modified and who is responsible for this? I also found it interesting to read that while the accounting standards are legally binding in Australia, they do not apply to everyone, this is not something I had ever really considered before. The words of Peter Ducker really stuck in my mind – “Quality in a product or service is not what the supplier puts in. It is what the customer gets out.” This sums up why different people can have the same product, yet each person will have a differing opinion on this item.

Chapter 3 introduces the financial statements of firms, I immediately felt that at this point, I would start to lose my way, the Study Guide mentions financial statements being just like remembering someone’s name at a party and this is something I am terrible at.  After reading this chapter on the annual report's use as a marketing tool, things became clearer. It is clear from the report's varied audience—which includes customers, workers, and both present and potential investors—that using it to shape their behaviour is a calculated risk. It was enlightening to learn that companies might choose balance dates other than the widely accepted June 30th. Knowing that businesses can select any date for their balance sheets provides insight into the range of methods used by various organisations.

This is a very important document because it provides a thorough means of communicating every aspect of your business to potential investors, effectively letting you highlight your advantages. It's exciting to think about this chance to highlight our products, principles, and future motivations, making sure that these things stay front and centre when analysing the data and planning the company's future course.

Another level of understanding was provided by the discovery that, in contrast to other assets, changes in cash balances have their own specific financial statements. I had always assumed that a large loss of assets would be the primary cause of a business's downfall, therefore I was curious to hear that the key is the exhaustion of one particular asset: cash. This comprehensive knowledge debunks the myth that a corporation going bankrupt or going into liquidation is only caused by a significant loss of assets, whether they be cash or in other forms.

Peer feedback provided 

Feedback From:      Sheryn Ruddell           

Feedback To:         Nicola Mossman.

	My Comments
Step 1 KCQs	Your Step 1 KCQs demonstrate a thorough understanding of the larger business environment and your excellent ability to apply theoretical knowledge to real-world situations.
Step 2	The introduction was a clear and engaging piece of writing and including a link to your blog allows readers to learn more about you if they so choose. The way your blog is set up is amazing; it has a personal touch that gives readers insightful peeks into your life outside of study, which is very refreshing.
Introductory words in the description box
Photo and description
Link to your blog/Set up blog
Step 3	After reading the information on your company, I what it was the company did and had an idea of how well they perform. Your thorough examination of the financial statements and perceptive comments on the possible difficulties brought about by the present status of the economy demonstrated careful thought. Reading about Nuix from your point of view was interesting and educational.  You provided detailed and helpful input for other students in the Top 3 Blogs area. Your kind words not only recognised their efforts but also provided insightful advice that will help them improve their work.
Background information on company
Comments/KCQs
Top 3 blogs
Step 4	This information appears to have been entered correctly, and the display is easy to understand.
Input company’s financial statements
Step 5	It seems to me that you have an in-depth understanding of each concept you have thought about.
KCQs
Step 6 Individual feedback with others	It is incredible how engaged you are in discussions with other students in the forum. It's admirable that you're encouraging people, and I'm sure they appreciate and gain from your helpful comments!
Overall ASS#1	I enjoyed reading your Assessment 1 draft in general. Your work is well-written, and I like how you organised your ideas. Your blog was the easiest to use out of all the ones I read; it was simple to navigate and understand the content.

 

Feedback From:      Sheryn Ruddell           

Feedback To:         Darcy Cavanough.

 

	My Comments
Step 1 KCQs	This step was not included in the draft or posted on the blog so I am unable to give feedback on this step.
Step 2	Your introduction was to the point and helped me learn a little about you.  I liked that you included a picture of you playing the drums as this made it more personal.
Introductory words in the description box
Photo and description
Link to your blog/Set up blog
Step 3	You have done some good research on Domain Group.  It was great to read about the company from your perspective.  I was a real estate agent for many years before coming back to study so this is a company I knew quite a bit about, but you have taught me even more. Great Work.  One thing I would recommend is to try to start your paragraphs with different starters, both paragraphs under the “My first thoughts” heading begin with As I looked………
Background information on company
Comments/KCQs
Top 3 blogs
Step 4	I was unable to find the section with your spreadsheets so I am unable to offer feedback on this step
Input company’s financial statements
Step 5	It seems to me that you have an in-depth understanding of each concept you have thought about.
KCQs
Step 6 Individual feedback with others	I could not see where you had provided feedback to others so I cannot comment on this step.
Overall ASS#1	I enjoyed reading your Assessment 1 draft in general. Your work is well-written, and I like how you organised your ideas. Keep up the great work and good luck with your studies.

 

Feedback From:      Sheryn Ruddell           

Feedback To:         Ayden Williams.

 

	My Comments
Step 1 KCQs	This step was not included in the draft or posted on the blog, so I cannot give feedback on this step.
Step 2	Your introduction was well written, it would be great if you could post a picture of yourself as I feel that this would help us to get to know you a little better and would make it more personal. A link to your blog would also help in your profile section.
Introductory words in the description box
Photo and description
Link to your blog/Set up blog
Step 3	I am not sure if I was looking at the correct post (Bod Science: Pioneering Cannabis Innovation), but I would have liked to have Seen a little bit more about this company. A link to the company website would have been helpful or even some links to news Articles or similar.
Background information on company
Comments/KCQs
Top 3 blogs
Step 4	You have done a good job with the spreadsheet, the layout is simple and easy to read.
Input company’s financial statements
Step 5	It seems to me that you have an in-depth understanding of each concept you have thought about.
KCQs
Step 6 Individual feedback with others	I could not see where you had provided feedback to others so I cannot comment on this step.
Overall ASS#1	I enjoyed reading your Assessment 1 draft in general. A little more Information on the background of your company would help to Know who they are and what they do.  It would be great to see a picture of you on your profile to personalise it a little more.  Keep up the great work and good luck with the rest of your studies.

Opinion of feedback received - coming soon