Comparison of Cash Flows, Equity and Other Comprehensive Income of Seafarms and Select Harvests

This assignment compares the statement of cash flows, statement of equity and other comprehensive income statement of Seafarms and Select Harvests, two companies in the Food, Beverage and Tobacco sector.

CORPORATE ACCOUNTING 1
CORPORATE
ACCOUNTING

CORPORATE ACCOUNTING 2
Executive summary:
The assignment relates with the selection of 2 companies and then comparing their statement
of cash flows, the statement of equity and the other comprehensive income statement.
The 2 companies chosen in this assignment are Seafarms and Select Harvest limited. Both of
these companies belong to the sector of Food, Beverage and Tobacco (ASX, 2018).

CORPORATE ACCOUNTING 3
Contents
Introduction:...............................................................................................................................4
Owners’ equity:..........................................................................................................................5
Part i:......................................................................................................................................5
Part ii:.....................................................................................................................................8
Cash flow statement:..................................................................................................................9
Part iii:....................................................................................................................................9
Part IV:.................................................................................................................................18
Part v:....................................................................................................................................19
Other comprehensive income statement:.................................................................................20
Part vi:..................................................................................................................................20
Part vii:.................................................................................................................................21
Part viii:................................................................................................................................22
Part ix:..................................................................................................................................22
Accounting for corporate income tax:......................................................................................23
Part x:....................................................................................................................................23
Part xi:..................................................................................................................................23
Part xii:.................................................................................................................................24
Part xiii:................................................................................................................................24
Part xiv:................................................................................................................................24
Part xv:..................................................................................................................................25
Part xvi:................................................................................................................................26
References:...........................................................................................................................28

CORPORATE ACCOUNTING 4
Introduction:
The first company chosen is Seafarms which is one of the biggest aquaculture operations in
the country of Australia. The company sells in its products under the brand name of Crystal
Bay Prawns. The company aims at the strategic intent for the purposes of developing in the
aquaculture operations in order to produce in the highest quality of seafood. The company
has some operations which are large scale in nature. The company is a transformational
aquaculture of the country and this leads to a sustainable development of the production
system which are related to the large scale protein products. The main aim of the company is
the development of the world class Project Sea Dragon which is the standalone marine which
has the production system of shrimp. The production system of the company has about
10,000 hectares in the northern Australia along with 100,000 tonnes of the prawns each year
(Seafarms, 2018).
The second company chosen is Select Harvests which is the country’s biggest vertically
integrated company that supplies the health food and also has its wings in the fields of
Horticulture, Orchard Management, Processing, Sales and Marketing. This would help in the
benefitting of the various different capability throughout the value in chain. The company is
the largest growers of almond and is also a leading manufacturer, processor and the marketer
of the nut products.
The company has many orchards, located in Victoria, South Australia and the New South
Wales. The portfolio of the company sets across about 4,000 hectares of land.
The brands of the company provides a variety of almonds and other such natural products
(Select harvests, 2018).

CORPORATE ACCOUNTING 5
Owners’ equity:
Part i:
The following are the desired statements:
Seafarms:
Owner's equity:
(Amounts in $)
Particulars 2017 2016 Understandin
g
Change Change in %
Contribute
d equity
1015,12,
627.00
790,21,
152.00
this is the
amount of the
money that
each
shareholder
has invested
in the
company
could be due
to new
capital/invest
ment by the
shareholders
28.46%
Other
reserves
52,52,
773.00
52,52,
773.00
this is the
amount of
money that
the company
has put aside
from the net
profits earned
in the
could be due
to addition of
previous years
losses
0.00%

CORPORATE ACCOUNTING 6
previous
years for
some
contingency
that may
arise in future
or for future
unforseen
circumstances
Retained
earnings
-
740,46,7
80.00
-
542,71,3
17.00
these are the
part of the
profits earned
in the
previous
years after
paying off
dividend etc
could be due
to previous
years losses
being
transferred in
this account
36.44%
#DIV/0!
Total 327,18,
620.00
300,02,
608.00
Select Harvests:

CORPORATE ACCOUNTING 7
Particulars 2017 2016
Understandin
g Change
Change in
%
Contributed
equity
1,81,
164.00
1,78,
553.00
this is the
amount of the
money that
each
shareholder has
invested in the
company
could be due to
new
capital/investment
by the
shareholders 1.46%
Reserves
11,
602.00
11,
168.00
this is the
amount of
money that the
company has
put aside from
the net profits
earned in the
previous years
for some
contingency
that may arise
in future or for
future
unforseen
circumstances
could be due to
addition of
previous years
losses 3.89%

CORPORATE ACCOUNTING 8
Retained earnings
84,
853.00
1,01,
180.00
these are the
part of the
profits earned
in the previous
years after
paying off
dividend etc
could be due to
previous year’s
profits/losses
being transferred
in this account -16.14%
Total
2,77,
619.00
2,90,
901.00
Part ii:
The following is the desired analysis:
Seafarmers
Select
Harvests
Particulars 2017 2017
Contributed equity
1015,12,627.0
0
1,81,164.0
0
Reserves
52,52,773.0
0
84,853.0
0
Retained earnings - -

CORPORATE ACCOUNTING 9
740,46,780.00
Total
327,18,620.0
0
2,66,017.0
0
Cash flow statement:
Part iii:
Seafarms:
Cash flow statement:
(Amounts in $)
Particulars 2017 2016 Understanding Change in %
Cash flows from
operating
activities:
Receipts from
customers
366,79,7
84.00
249,41,0
98.00
these are the
amounts that the
company has
received from its
47.07%

CORPORATE ACCOUNTING 10
customers from
the sale of its
goods or services
Payments to
suppliers and
employees
-
504,81,89
0.00
-
346,54,73
2.00
these are the
amounts that have
been paid by the
company to the
suppliers that
supply the goods
that they
ultimtaley sell to
its customers
45.67%
Interest paid -
10,10,193.
00
-
4,70,768.0
0
this is the sum of
the interest paid
on the borrowed
capital by the
company
114.58%
Net cash
provided by
operating
activities
-
148,12,29
9.00
-
101,84,40
2.00
Cash flows from

CORPORATE ACCOUNTING 11
investing
activities:
Payments for
property, plant
and equipment
-
28,17,666.
00
-
11,53,848.
00
these are the
amounts that are
made by the
company towards
the property, plant
and equipment
144.20%
Proceeds
from/(Payments
for) other
financial assets
3,13,1
90.00
-
53,442.00
these are the
amounts that are
made/received by
the company
towards the
financial assets
-686.04%
Loans to related
parties -
-
74,190.00
amounts given to
the outsiders as
loan
-100.00%
Proceeds from
sale of non-
current assets
held for sale
-
12,80,0
00.00
these are the
amounts that are
received by the
company towards
the sale of non-
current assets
-100.00%
Proceeds from 2,0 these are the -100.00%

CORPORATE ACCOUNTING 12
sale of
available-for-
sale financial
assets
- 67.00 amounts that are
received by the
company towards
the sale of
securities
Interest
received
62,7
54.00
72,8
88.00
amounts received
by the company
towards the
interest from loans
given to outsiders
-13.90%
Net cash used in
investing
activities
-
24,41,722.
00
73,4
75.00
Cash flows from
financing
activities
Proceeds from
issues of shares
and other
equity securities
224,91,4
75.00
94,21,2
34.00
amounts received
by the company
from the sale of
equity shares
138.73%
Repayment of
borrowings
-
16,46,148.
-
30,58,000.
amounts paid to
the outsiders for
-46.17%

CORPORATE ACCOUNTING 13
00 00 the loans taken
from them
Net cash used in
financing
activities
208,45,3
27.00
63,63,2
34.00
Net decrease in
cash and cash
equivalents
35,91,3
06.00
-
37,47,693.
00
Net cash from
aggregate of the
activities in the
year
Cash and cash
equivalents at
start of period
82,83,5
32.00
120,31,2
25.00
Cash in the start
Cash and cash
equivalents at
end of period
118,74,8
38.00
82,83,5
32.00
Net cash at the end
of the year
Select Harvest:
Particulars 2017 2016 Understanding Change
Change
in %

CORPORATE ACCOUNTING 14
Cash flows from operating
activities:
Receipts from customers
2,49,969
.00
3,04,30
6.00
these are the
amounts that
the company
has received
from the
customers
-
54,337.00 -17.86%
Payments to suppliers and
employees
-
2,11,212.00
-
2,05,688.0
0
these are the
amounts paid to
the local
vendors of the
company
-
5,524.00 2.69%
Interest received
31
.00
29
4.00
this is the
amount of the
interest
received from
the loans given
to outsiders
-
263.00 -89.46%
Interest paid
-
5,028.00
-
5,156.00
this is the
amount of the
interest paid on
the loans taken
from outsiders
128.
00 -2.48%
Income tax paid
- - amount paid -
3160.90%

CORPORATE ACCOUNTING 15
29,022.00 890.00
towards the
income taxes 28,132.00
Net cash inflow from
operating activities
4,738
.00
92,86
6.00
Cash flows from investing
activities:
Proceeds from Government
grants
2,805
.00
4,11
8.00
amounts
received from
the government
as grants
-
1,313.00 -31.88%
Proceeds from sale of
property, plant and
equipment
12
.00
9,80
0.00
amounts
received from
the sale of
property, plant
and equipment
-
9,788.00 -99.88%
Proceeds from sale and
leaseback transaction -
34,92
2.00
amounts
received from
the sale of
leaseback
property
-
34,922.00 -100.00%
Payment for water rights
-
4,540.00
-
9,591.00
amounts paid
towards the
water rights
5,051.
00 -52.66%

CORPORATE ACCOUNTING 16
Payment for property, plant
and equipment
-
23,581.00
-
32,717.00
amounts paid
towards the
purchase of
property, plant
and equipment
9,136.
00 -27.92%
Acquisition of almond
orchards
-
21,838.00
-
5,285.00
amount paid
towards the
acquisition of
almond
orchards
-
16,553.00 313.21%
Tree development costs
-
9,646.00
-
4,408.00
amount paid
towards the tree
development
costs
-
5,238.00 118.83%
Net cash outflow from
investing activities
-
56,788.00
-
3,161.00
Cash flows from financing
activities:
Proceeds from sale and
leaseback transaction -
28,36
2.00
amounts
received from
the sale of lease
back
transaction
-
28,362.00 -100.00%

CORPORATE ACCOUNTING 17
Proceeds from borrowings
2,09,250
.00
1,97,00
0.00
amounts
received from
borrowing
money from
outside
12,250.
00 6.22%
Repayments of borrowings
-
1,28,750.00
-
2,79,608.0
0
amounts paid
towards the
repayment of
the borrowings
1,50,858.
00 -53.95%
Repayments of finance
leases
-
3,962.00
-
1,911.00
amounts paid
towards the
finance lease
-
2,051.00 107.33%
Dividends on ordinary
shares, net of Dividend
Reinvestment Plan
-
22,964.00
-
31,903.00
amounts paid
towards the
reinvestment
plan
8,939.
00 -28.02%
Net cash (outflow)/inflow
from financing activities
53,574
.00
-
88,060.00
Net decrease in cash and
cash equivalents
1,524
.00
1,64
5.00
Net cash from
aggregate of
the activties in
the year
-
121.00 -7.36%
Cash and cash equivalents at - - Cash in the 1,645. -32.25%

CORPORATE ACCOUNTING 18
start of period 3,455.00 5,100.00 start 00
Cash and cash equivalents
at end of period
-
1,931.00
-
3,455.00
Net cash at the
end of the year
1,524.
00 -44.11%
Part IV:
The following is the desired comparative statement:
Seafarms Select Harvest
Particulars 2017 2016 2015 2017 2016 2015
Net cash from
operating
activities
-
148,12,299.0
0
4,
738.00
-
101,84,402.0
0
4
,738.00
92,
866.00
30,
399.00
Net cash from
financing
activities
208,45,32
7.00
53,
574.00
63,63,23
4.00
53
,574.00
-
88,060.0
0
60,
420.00
Net cash from
investing
activities
-
24,41,722.00
-
56,788.0
0
73,47
5.00
-
56,788.00
-
3,161.00
-
99,932.00
Total
35,91,30
6.00
1,
524.00
-
37,47,693.00
1
,524.00
1,
645.00
-
9,113.00

CORPORATE ACCOUNTING 19
Part v:
In respect of Seafarms, it could be said that the company could be facing a cash crunch which
could be seen from the negative amount of the cash flows in 2015 but the same has then
improved over the years.
In respect of Select Harvest, it could be said that the company could be facing a cash crunch
which could be seen from the negative amount of the cash flows in 2015 but the same has
then improved over the years.
Also, when comparing the 2, the following could be said:
 In year 2017, Seafarms was better in terms of cash in hand
 In year 2016, Select Harvest was better in terms of cash in hand
 In year 2015, none is better
Other comprehensive income statement:
Part vi:
Seafarms:
Statement of comprehensive income
(Amounts in $)
Particulars 2017 2016
Profit/(Loss) for the period -197,75,463.00 -183,60,319.00

CORPORATE ACCOUNTING 20
Total comprehensive loss for the
year/period is attributable to: Owners
of Seafarms Group Limited -197,75,463.00 -183,60,319.00
Select Harvest:
Statement of comprehensive income
(Amounts in $ in
millions)
Particulars 2017 2016
Contributed Equity Reserves Retained Earnings
Profit/(Loss) for the period - -
9,249.0
0
Other comprehensive loss
205.
00
33,796.0
0

CORPORATE ACCOUNTING 21
Total comprehensive income
for the year -
205.
00
43,045.0
0
The company does not have any comprehensive income.
Part vii:
The other comprehensive income comprises of the items that as such do not have an effect on
the balance sheet. But then it is also true that the same cannot be reported in the income
statement of the company. These are the changes that are reported in the statement of
comprehensive income with all of the other amounts from the income statement.
Merely due to the reason that the other comprehensive income has no effect on the net
income, that would lead to a cause in the change in the retained earnings, shareholder’s
equity, etc.
The example include unrealised gains or losses, foreign currency translation adjustments,
unrealised gains or losses on the investments etc. (Accounting coach, 2018).
Part viii:
The following is the desired statement:
Seafarmers
Select
Harvests
Particulars 2017 2017
Comprehensive income
-
197,75,463.00 -

CORPORATE ACCOUNTING 22
If these income form the part of the profit and loss statement, then the company’s profit
earned during the year would increase. Which would in turn benefit the shareholders. But the
company shall be at a loss since it will have to pay taxes on them.
Part ix:
The other comprehensive income comprises of the items that as such do not have an effect on
the balance sheet. But then it is also true that the same cannot be reported in the income
statement of the company. These are the changes that are reported in the statement of
comprehensive income with all of the other amounts from the income statement.
Merely due to the reason that the other comprehensive income has no effect on the net
income, that would lead to a cause in the change in the retained earnings, shareholder’s
equity, etc.
The example include unrealised gains or losses, foreign currency translation adjustments,
unrealised gains or losses on the investments etc.
So, it would not be fair to record these in the income statement.
Accounting for corporate income tax:
Part x:
The following are that tax expense that are shown in the financial statements of the 2
companies:
Seafarmers
Select
Farmers
Particulars 2017 2016
Income taxes
62,69,297.0
0
2,729.0
0

CORPORATE ACCOUNTING 23
The companies have reported the income taxes in their financial statements that have been
paid in by the company on the revenue that it has generated during the ordinary course of
trade.
Part xi:
The following is the desired table:
Effective tax rate
Seafarmers
Select
Farmers
Particulars 2017 2016
Effective tax rate: -46% 23%
Income taxes
62,69,297.0
0
2,729.0
0
Earnings before taxes
-
135,06,166.00
11,978.0
0
Since Seafarms has reported a loss in its financial statements, hence the effective tax rate is
negative for it.

CORPORATE ACCOUNTING 24
Part xii:
Deferred tax assets are the assets that are allowable as an expense for the company in the
future periods. These are the expenses that are disallowed during the current year of the
company due to its timing difference (Taxmann, 2018).
Part xiii:
In respect of Woolworth, there has been an increase in the amount of the deferred tax assets.
In respect of Wesfarmers, there has been an increase in the amount of the deferred tax assets.
Part xiv:
The following is the desired computation:
Particulars Seafarms Select Harvest
Net income
-
197,75,463.00
9,249.0
0
Less: deferred tax assets
38,51,000.0
0
30,591.0
0
Income on which taxes
would have been paid
-
236,26,463.00
-
21,342.00
Part xv:
The following is the desired table:
Particulars Seafarms Select Harvest

CORPORATE ACCOUNTING 25
Income tax
provision - -
Increase in deferred
tax assets
126.1
0 -
Current income
taxes
126.1
0 -
Other income -
2,161.0
0
Taxes paid on other
income -
497.0
3
Unlevered cash
taxes
126.1
0
-
2,658.03
EBITA
-
197,75,463.00
11,978.0
0
Cash tax rate 0.00% -22.19%
In case of Seafarms, since the company has reported a loss during the year, hence the cash
rate is 0% and in the case of Select Harvest, since there are no current year’s income taxes,
deferred taxes, hence, the cash rate is negative. The company Select Harvest has negative
unlevered cash taxes and hence, the final result which is the cash tax rate is also negative.

CORPORATE ACCOUNTING 26
Part xvi:
Cash tax rate is different from the book tax rate since the companies always pay less taxes
than what becomes due.

CORPORATE ACCOUNTING 27
Conclusion:
Both these companies that have bene undertaken for review have represented the transactions
that have been entered into during the year in the utmost beneficial way. But since Seafarms
has reported a loss, it needs to have a discussion with regard to the improvement of its affairs
so that either more revenue could be generated or expense could be decreased.
In respect of equity, Seafarms has more investment made from the outsiders when compared
with Select Harvest. In respect of comprehensive income, Seafarms only has such a statement
reported in its financial statement. In terms of cash flows, Seafarms seems to be better in term
of cash in hand.

CORPORATE ACCOUNTING 28
References:
AccountingCoach.com. (2018). What is other comprehensive income? | AccountingCoach.
[online] Available at: https://www.accountingcoach.com/blog/what-is-other-comprehensive-
income [Accessed 16 Sep. 2018].
Harvests, S. and Harvests, S. (2018). Our Company | Select Harvests. [online] Select
Harvests. Available at: http://selectharvests.com.au/our-company/ [Accessed 16 Sep. 2018].
https://www.taxmann.com. (2018). Difference between Deferred Tax Asset (DTA) and
Deferred Tax Liability (DTL). [online] Available at:
https://www.taxmann.com/blogpost/2000000449/difference-between-deferred-tax-asset-dta-
and-deferred-tax-liability-dtl.aspx [Accessed 16 Sep. 2018].
Martin, F. (2018). About Us | Seafarms Group Limited. [online] Seafarms Group Limited.
Available at: https://seafarms.com.au/about-us/ [Accessed 16 Sep. 2018].
www.seafarms,com. (2018). Annual report 2017. [online] Available at:
https://seafarms.com.au/wp-content/uploads/2015/02/FY17-Financial-Statements.pdf
[Accessed 16 Sep. 2018].
www.seafarms.com. (2018). Annual report 2016. [online] Available at:
https://seafarms.com.au/wp-content/uploads/2016/09/SFG-Annual-Report-28092016.pdf
[Accessed 16 Sep. 2018].
www.selectharvest.com. (2018). Annual report 2015. [online] Available at:
http://www.annualreports.com/HostedData/AnnualReportArchive/S/ASX_SHV_2015.pdf
[Accessed 16 Sep. 2018].

CORPORATE ACCOUNTING 29
www.selectharvest.com. (2018). Annual report 2017. [online] Available at:
http://www.selectharvests.com.au/documents/Select_Harvests_2017_Annual_Report.pdf
[Accessed 16 Sep. 2018].
Asx.com.au. (2018). The official list. [online] Available at:
https://www.asx.com.au/asx/research/listedCompanies.do?coName=S [Accessed 16 Sep.
2018].