Annual Report Analysis

This document provides a detailed analysis of an annual report, including the statement of profit or loss, statement of financial position, statement of changes in equity, notes to accounts, directors declaration, annual directors report, and annual auditors report. It also includes information on income, expenses, assets, liabilities, equity, capital management, dividends and distributions, and contingent liabilities.

ANNUAL REPORT ANALYSIS
ANNUAL REPORT ANALYSIS
Name of the Student
Name of the University
Authors Note
Course ID

ANNUAL REPORT ANALYSIS
Table of Contents
Statement of Profit or Loss and Other Comprehensive Income................................................3
Statement of Financial Position.................................................................................................3
Statement of changes in equity..................................................................................................6
Notes to Accounts......................................................................................................................7
Directors Declaration:..............................................................................................................11
Annual directors Report:..........................................................................................................15
Annual auditors Report:...........................................................................................................17
Bibliography:............................................................................................................................23

ANNUAL REPORT ANALYSIS
Statement of Profit or Loss and Other Comprehensive Income
Note $
Continuing Operations
Revenue 1 47388800
Expenses 2
Cost of Sales 25619870
Employee Benefit Expenses 2 3031000
Occupancy related expenses 2 3260000
Depreciation and Amortisation 2 1444530
General Operating Expenses 2 2940000
Other expenses 2 4650000
Total Expenses 40945400
Other Income 492000
Earnings befor Interest and income tax
expense
6935400
Finance Costs 2 60000
Profit Before Income Tax 6875400
Income Tax 2062620
Profit from continuing operations 4812780
Statement of Financial Position

ANNUAL REPORT ANALYSIS
Statement of Financial
Position
Note $
Assets
Current Assets
Cash and Cash Equivalents 4 5630000
Interim Div 5 2662000
Final Div Declared 6 4947800
Others 28000
Total Current Assets 13239800
Non-current Assets
Machinery 7 3780400
Vehicles 7 2105800
Office furniture and fittings 7 2984500
Goodwill 8 162000
Total Non-current Assets 9032700
Total Assets 22272500
Liabilities
Current Liabilities
Trade and Other Payables 2218460
Interest bearing loans and
borrowings
500000
Income Tax Payable 2062620

ANNUAL REPORT ANALYSIS
Provisions 9 453910
Other 23980
Total Current Liabilities 5258970
Non-current Liabilities
Legal Expenses 414250
Total Non-current liabilities 414250
Total Liabilities 5673220
Net Assets 18026540
Equity
Issued Capital 12741000
Retained Earnings 3785540
Reserves 1500000
Total Equity 18026540
Statement of changes in equity

ANNUAL REPORT ANALYSIS
Issued
Capita
l
Reserve
d
Shares
Retained
Earnings
Hedging
Reserve
Other
Reserve
s
Total
Equit
y
0
Opening balance
at 30 June 2018
77020
00
1420760 300000 9422
760
Additional
Capital Issued
50390
00
5039
000
Profit for the
year
4812780 4812
780
Interim Div 0
Final Div
Declared
0
Transfer to GR -
1200000
120000
0
0
Dividend Paid -
1248000
-
1248
000
Closing Balance 12741
000
0 3785540 0 150000
0
1802
6540
Notes to Accounts
1. Income
2019 $

ANNUAL REPORT ANALYSIS
Sale of Goods 40634800
Rendering of Services 6730000
Providing services to Hope Limited 24000
Revenue 47388800
Gains on disposal of property, equipment and assets 492000
Other Income 47880800
2. Expenses
Salaries and Wages 2590000
Bonus 243000
Annual leave expense 198000
Employee Benefit Expenses 3031000
Lease payments 3260000
Occupancy related expenses 3260000
Depreciation on Machinery 494730
Depreciation on Vehicles 358900
Depreciation on office furniture and fittings 590900
Depreciation and Amortisation 1444530
Power and Other Utility Expenses 730000
Cleaning Expenses 367000
Insurance Expenses 97000
Other Expenses 1746000
General Operating Expenses 2940000
Marketing Expenses 1027000
Doubtful debts expense 194500
Warranty Expenses 2410000

ANNUAL REPORT ANALYSIS
Loss from Sale of Fittings 420000
Payment to Auditors 245000
Expenses on Legal Provision 310000
Other Expenses 4606500
Interest Expense 60000
Finance Costs 60000
3. Tax Expense
Tax as per current balance sheet 4812780
Deferred Tax Expenses N/A
4. Cash and Cash Equivalents
Cash at bank on the date of preparation of balance sheet is $563000.
5. Receivables
Accounts receivable on the date of preparing the balance sheet are valued at
$2762000.
6. Inventories

ANNUAL REPORT ANALYSIS
Recognition and Measurement: Inventories are measured at lower of cost and net
realisable value. Net realisable value of inventory is the amount that can be recovered by
selling the inventory after deducting the costs which will be recovered to sell. On the date of
preparing the balance sheet, these are valued at $4947800.
7. Property, Plant and Other Equipment
Machinery Vehicles Office furniture and
fittings
Year ended 30 June
2018
4659130 2551200 4055400
Accumulated
depreciation and
impairment
494730 358900 590900
Value of assets
disposed
384000 43000 480000
Net Carrying
amount
3780400 2149300 2984500
8. Goodwill and Other Intangible Assets
Year Ended 30 June 2018
Cost -
Accumulated amortisation and impairment -
Net carrying amount 162000

ANNUAL REPORT ANALYSIS
9. Provisions
Allowance for Doubtful Debts 25910
Provision for breach of contract 248000
Claim for Damages 25910
5493170
10. Capital Management
The primary objective of the entity is to provide the shareholders with satisfactory
returns on their investments. This will be achieved by the organisation by increasing
returns on invested capital in return to the cost of capital and making sure that the
shareholders are satisfied with the returns provided.
Equity and Reserves
Issued Capital 12741000
Reserved Shares -
Retained Earnings 3785540
Reserves 1500000
18026540
Total Interest-Bearing Debt 500000
Less: Cash and Cash equivalents 5630000
Net Capital 12896540
11. Dividends and Distributions

ANNUAL REPORT ANALYSIS
Dividends distributed and paid during the year amounted to $1248000. A dividend of 13
cents per share was declared in June but it has not yet been approved in the AGM and hence
should be avoided from the books of accounts.
12. Contingent Liabilities
A contingent liability for the legal provisions which is not expected to be realised and
amounts to $370500 has not been presented in the financial statements as it is not expected to
be recovered during the current financial year by the company and hence is being disclosed
separately.
Directors Declaration:
The directors declare that;
a. According to the director’s view, there are sufficient ground to consider the company
would be capable of paying its debts and when they are unpaid and outstanding.
b. According to the director’s view, the financial report that is attached are complying
with the IFRS.
c. According to the director’s view, the financial report that is attached and the
statements thereon are in agreement with the Corporation Act 2001 (Cth), together
with the agreement with the accounting standards and provides a correct and accurate
view of the business position and overall performance of the business.
During the date of this statement, the business is inside the class of businesses that is
effected by the ASIC Corporation instrument 2016/785. The character of cross deed carries
the guarantee where each company is regarded as the party to the guarantees of deed and for
every creditor imbursement in full debt in agreement with the deed of cross guarantee.

ANNUAL REPORT ANALYSIS
According to the director’s view, there are sufficient reasons to have faith in the
company and companies to which the deeds are applicable would be capable of meeting the
commitments or liabilities to which they are or might be the subject with respect to the deed
of cross guarantee.
The declaration of the director is to provide the annual statements of the corporation’s
performance for the financial year ended 2019. The declaration of the director further notifies
that it has simplified and strengthened the company by improving its framework of capital
allocation, sharpened by its culture and productivity and rendered a strong set of financial
outcomes. This has enabled the company to declare a record dividend 10c per share.
The company has also made investment in future as during the year the board has
approved funds for capital expenditure for its project in Australia following the detailed
assessment against capital allocation framework. Investment in capital project offers
attractive returns for the shareholders and would improve the overall performance of
company. The director is pleased to inform that the company has made good progress and has
made reposition of its portion to make sure that it has correct situations in place for the
continuous value formation. The variations that is made by the company and those that are in
progress are directed by the dedicated assurance towards the central objective of delivering a
suitable return to the stockholders.
Over and done with such changes, the business has provided a robust financial result
with revenues from continuing operations and barring the significant items. The reported
profit after tax portrays the trading profit. While this year has been an unsatisfactory venture,
the revenues has freed the company of operating profit, future capital and lease obligations
and has also the company’s business position. The company in Australia has delivered a

ANNUAL REPORT ANALYSIS
robust year with continuous sales force has reflected a continuous development in its
customer offer through the help of investment in price, range and service.
The incomes reported by the company has been higher than the estimate figure
because of the annualisation of the current year’s investment in the consumer offers, one-off
items and reduced convenience earnings. It was fair to witness that the company has
delivered a strong growth in revenue and strong momentum in sales throughout the year due
to the improvement in consumer service and retail execution.
The business division of the company has recorded a strong revenue under the
ownership of the company with its suppliers building its place as the world-wide product
expansion corporation and discount seller. Board was capable in enhancing the earnings on
the previous year with the help of better cost and inventory control being the reorganization
of it its present continuous offer. The trading conditions for the target has been challenging
and this was reflected in the current non-cash impairment identified throughout the year. The
office works continues to be constructed on its solid and reliable performance with the
another positive result. The company also aims to make investment in its sophisticated
customer oriented channel that renders exceptional value and suitability to the customers.
The year witnessed a growth of strength in its business model. Notably the capacity of
the business to move swiftly to administer its portfolio and flexibility in renewal. To further
extend the model of divisional autonomy offers the business with the operational ability of
retaining the laser like concentration on its consumers and rendering a robust performance
outcome at the time of change. The company believes that it can deliver a pleasing return to
its stockholders by building a long term value for its stakeholders, team members, suppliers
and the community in which it operates. Throughout the year the company paid $3,031,000
as employee salaries and wages of $2,590,000 with bonus of $243,000 and yearly leave

ANNUAL REPORT ANALYSIS
expenditure of $198,000. The company is also bringing enhancements in the workplace
safety, reductions in emissions, consolidation of its process across ethical sourcing. The
business also aims to make community contributions with the help of customers and team
members.
People:
The company has employee strength of more than 200 team participants across its
business. The robust performance of the business operations is reflected in its commitment of
hard working teams. The retail advisors of the company have bought an extraordinary
improvement in the fortunes of business and lately it has overseen the target and has returned
to success.
Outlook:
While imitating on the strong point of its balance sheet, big business dealings and the
teams, the director is assertive that the finest times of operations for the company lies ahead.
The director anticipate that its business will continue to deliver continuous growth in earnings
with the help of additional investment and improvements in its consumer offers by expanding
its offers to customers, addressing markets and providing even better products. The emphasis
of the business will be to improve the safety and functional efficiency at the time of assessing
the new chances to influence its competences and wealth.
The director also declares that the company aims to further progress the numerical
and data competences. Across the group the company is focussed on creating a great team of
talent and promote a spirit of entrepreneurship. These areas describe the competitive benefit
of the company in the year to come. The company would carry on taking the long term

ANNUAL REPORT ANALYSIS
opinion in retaining its strong balance sheet and capital discipline to allow the company in
taking advantage of the opportunities to form a value for shareholder.
In conclusion the director would like to extend its appreciations to the devoted team
members all through the group during the period of changes.
Annual directors Report:
Good corporate governance is regarded as the essential to the company’s
methodology towards improving the value of long-term shareholders. The company’s board
and administration are dedicated towards the rules and practices which satisfies the greater
level of disclosure and compliance.
Insurance and indemnification of directors and officers:
Following the conclusion of the fiscal year, the corporation has paid the premiums in
relation to the agreement that insures all the directors and officers of the company against
certain liabilities that is incurred within that capability. The revelation regarding the nature of
accountability is enclosed by the insurance and premiums that is paid is subjected to privacy
obligations under the agreement of insurance. In agreement with the constitution of company,
the organization has entered in the deeds of indemnity, insurance and access with every
directors of the organization. The deeds include;
a. Indemnifying the directors to the complete extent that is allowable by law against the
liability that is occurred by director as the officer of the organization or as the related
body corporate;
b. Provide the insurance against particular liabilities occurred by the director
c. Providing the director with the continuous access, whereas in the office and for the
particular time period following the director stops being the director, for a certain
documents of company which is associated to the period in office of the director.

ANNUAL REPORT ANALYSIS
In addition to this, the constitution of the company also provides for insurance of
officers of the organization or from the liability that may be occurred in capacity of a person.
During the year no indemnity payment has been made under any of the documents that is
referred above.
Environmental regulation and performance:
The undertakings of the company are subjected to ecological regulation by numerous
authorities all through the Australia and other states in which the company has its operations.
Licences that are granted to company regulates the controlling of air and water quantity and
quality as well. The licences also include the storage and carriage of hazardous materials,
disposing the waste and other related ecological matters that are related with the processes of
the company.
Proceeding on behalf of the company:
There are no proceedings bought on behalf of the firm, nor does there are any
application that has been made by the firm under the section 237 of the Corporation Act
2001.
Corporate governance:
In knowing the requirement for higher standards of corporate governance and
responsibility, the directors of the company support and have complied with the third edition
principles and recommendations of ASX Corporate governance councils.
Portfolio review:
The company is committed towards providing a satisfactory return to shareholders by
actively handling its portfolio, investment in value-oriented developmental prospects and
improving the underperforming businesses. During the financial year of 2019 there were

ANNUAL REPORT ANALYSIS
number of significant decisions were undertaken that were aimed to position the company in
delivering the strong results and returns for the shareholders over the long period of time. The
board believes in the outcome of incentives appropriately identifying and rewarding the
performance.
The remuneration that is earned by the CEO and the Executive Key Management
Personnel is reflected in the short term incentives that is set slightly below the target. The
company has managed to deliver a strong financial result and continued to meet the need of
its targeted customers even though following a strong improvement and progress against the
set target. The short-term incentive plan is in line with the Relative Total Shareholder Return
and Earnings per Share of its shareholders before the transformations. The director believes
that the alignment of its STI arrangement from the CEO to the team members forms the key
element for the customers and company’s initial approach towards transforming the business.
As a result, there has been an increase in engagement and responsibility across the business in
general and maintaining the focus on the vital performance areas. There are several
stakeholders that have shared their response with the company throughout the year. The
director here provides the assurance that the company is committed towards making sure that
the needs of the shareholders forms the central and main element in the development of the
remuneration approach.
Fixed annual remuneration:
The company has the practice of not increasing the fixed remuneration with reference
to remuneration or indexation as the substance of course. The variations are dependent on
merit, substantial alteration in roles and accountability, the market rate for the similar roles
originating substantially or as the outcome of internal relativities while simultaneously
shielding the investment of the company in development of key talent.

ANNUAL REPORT ANALYSIS
Annual auditors Report:
Independent Auditor’s Report to the Members of the company
Report on Audit of Financial Report:
Opinion:
An audit has been conducted on the financial report of the company that includes the
Statement of Financial Position as on 30th June 2019, the comprehensive income statement,
statement of changes in equity and statement of cash flows for the 52 weeks ended and the
notes to financial statements together with the significant policies of accounting and the
directors’ declaration.
According to the opinion of the auditors, the accompanying financial report of the
company is in agreement with the Corporation Act 2001 together with;
a. Providing a correct and impartial understanding of the business’s monetary situation
as on 30th June 2019 and its financial performance for the year ended.
b. Adhering with the Australian Accounting Standards and Corporation Regulations
2001.
Basis for Opinion:
The auditors have conducted the audit in compliance with the Australian Auditing
Standards. The accountabilities of the Auditor under those standards is additionally labelled
in the accountabilities of Auditors for the audit of the financial report section of its report.
The auditor is independent of the company’s in agreement with the auditor independence
requirements of the Corporation Act 2001 and the ethical requirements of the Accounting
Professional and Ethical Standard Board’s APES 110 Code of Ethics for Professional

ANNUAL REPORT ANALYSIS
Accountants that is applicable to the audit of the financial report in Australia. The auditors
have complied with the ethical accountabilities in agreement with the code.
The auditors hereby approve the independence declaration that is needed by the
Corporation Act 2001, that has been provided to the directors of the company, would be in
the similar terms if provided to the directors at the time of auditor’s report. The auditors
believe that the evidences of audit that is found is adequate and suitable to offer a basis of
opinion.
Key Audit Matters:
The KAM are those that in the qualified judgement of auditors were highly significant
to the audit of financial report for the present period. These substances were regarded as
significant and addressed in relation to the audit of financial statements as a whole and in
creating the audit judgement thereon. The auditors do not provide any distinct view on the
matters addressed.
Key Audit Matter How the audit scope responded to the
Key Audit Matter
Valuation of property, plant and
equipment and consideration of lease
provisions
Included inside the value of property, plant
and equipment is the assets related with the
carrying value of $43,000. The company has
Procedures included by not restricted to:
 Understanding the company’s
control over the assessment of
recoverable amount of company’s
assets and the computation of leases
to ascertain whether any provision

ANNUAL REPORT ANALYSIS
leases and rental agreement with gross
operating commitment of $32, 60,000.
The audit is focussed on working out the
recoverable value of assets to assess
whether the carrying amount of assets is
greater than their recoverable amount and
whether any kind of added must be
classified in the lease contracts.
As a whole, the auditor have focussed on
the vital judgements and estimation in
relation to the future trading performances
and cash flow of the company including the
forecast earnings before interest and tax.
This helps in reflecting the future growth of
revenues and margins of gross profit as well
as the effect on general economic
environment on the sectors under which the
company operates and the effect of
competition on the market share. The key
decisions and estimations are made in
respect of the several year reversal plan that
are approved by the board.
for impairment were needed.
 Understanding the company’s
methodologies and their
documentation basis for its key
assumption and estimates.
 Testing the sample on the basis of
mathematical correctness of the cash
flow models and agreeing with the
relevant data to approved budgets
and current forecasts.
 Conducting the sensitivity analysis
in respect to the vital assumptions by
focussing on the drivers of EBIT
particularly the growth in revenues
and margins of gross profit along
with the use of discount rates used
for depreciation.
Accounting for rebates:
The company receives significant amount of
rebates and discount from the suppliers and
Procedures included but not restricted to:
 Getting an understanding of the
important elements of control that is

ANNUAL REPORT ANALYSIS
identifies most of these deduction as the
reduction in cost of sales depending on the
nature of rebate and discount.
The judgement is needed provided the non-
standard rebates to make sure that they are
valid and not overstated. In addition to this,
the timeliness and accuracy of keeping
record of these arrangement might have
effect on the results of company.
established by the company in
respect of the non-standard rebates
and discounts.
 Testing the non-standard rebates,
discounts on the basis of samples
obtained by complying with the
supporting documents together with
the approval of suppliers and
confirming that they have recorded
in the right period.
 Evaluating the correctness of the
accounting for the non-standard
processed rebates, discounts in the
financial reports.
Other information:
The directors of the company are accountable for the other info. The other
information includes the facts that is involved corporation’s annual statement but does not
involve financial report and the auditor’s report. The view on the monetary report does not
takes into the account the info and the auditors does not express does express any kind of
guarantee thereon.
In association with the audit of monetary report, our accountability is to read the other
information and taking into the account the other necessary information that are substantially

ANNUAL REPORT ANALYSIS
varying with the financial report or our knowledge that is found in the audit or else appears to
be misstated substantially.
Directors’ responsibility for the financial report:
The directors are accountable for the preparation of financial report which provides
correct and reasonable view in agreement with the Australian Accounting Standards and
Corporation Act 2001 and for this kind of internal control the directors determine the
preparation of the necessary financial report which provides true and fair view of the material
misstatement because of error or fraud.
At the time preparing the financial report, the directors are accountable for evaluating
the ability of the group in continuing as the going concern, disclosing as and when needed,
matters associated to going concern and using the going concern accounting unless the
directors intends to liquidate the company or stop the operations.
Auditor’s Responsibility for Audit of Financial Report:
The responsibility of the auditors in agreement with AASB are as follows;
a. Identifying and assessing the risks relating to material misstatement in financial report
because of error or fraud and conducting audit procedure in respect to those risks.
b. Measuring the suitability of the accounting policies that is used along with the
reasonableness of accounting estimation associated to the disclosures made by the
directors.

ANNUAL REPORT ANALYSIS

ANNUAL REPORT ANALYSIS
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