Financial Accounting: Statement of Profit and Loss, Financial Position, Changes in Equity, Notes to Accounts, Directors Declaration, Annual Directors Report, Annual Auditors Report

This document provides an overview of financial accounting including Statement of Profit and Loss, Financial Position, Changes in Equity, Notes to Accounts, Directors Declaration, Annual Directors Report, Annual Auditors Report. It also includes information on Income, Expenses, Tax Expenses, Cash and Cash Equivalents, Receivables, Inventories, Property, Plant and Other Equipment, Goodwill and Other Intangible Assets, Provisions, Capital Management, Dividends and Distributions, and Contingent Liabilities.

Running head: FINANCIAL ACCOUNTING
Financial Accounting
Name of the Student
Name of the University
Authors Note
Course ID

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Table of Contents
Statement of Profit and Loss or Other Comprehensive Income:...............................................2
Statement of Financial Position:................................................................................................3
Statement of Changes in Equity:................................................................................................4
Notes to Accounts:.....................................................................................................................4
Directors Declaration:................................................................................................................8
Annual directors Report:..........................................................................................................10
Annual auditors Report:...........................................................................................................13
Bibliographies:.........................................................................................................................17

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Statement of Profit and Loss or Other Comprehensive Income:

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Statement of Financial Position:

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Statement of Changes in Equity:
Notes to Accounts:
1: Income:

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2: Expenses:
3: Tax Expenses:
4: Cash and Cash Equivalents:
The cash at bank during the date of preparing the balance sheet stands $563,000
5: Receivables:
Accounts receivables during the date of preparing the balance sheet stood $27, 62,000
6: Inventories:
Recognition and Measurement: The inventories are measured at lower cost and based on
net realizable worth. The net realizable value of the inventories represents the amount which

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can only be recovered after the sale of inventories following the deduction of cost that can be
recovered after selling. During the date of preparing the balance sheet the values of
inventories stood $49, 47,800.
7: Property, Plant and Other Equipment:
8: Goodwill and Other Intangible Assets:
9: Provisions:

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10: Capital Management:
The main purpose of this company is to provide its shareholders an adequate returns
based on the investment made by them. This will be attained by the company by increasing
the ROIC in respect of the cost of capital and assuring that the shareholders are content with
the returns given.
11: Dividends and Distributions:
The dividends that were paid and distributed for the year stood $12, 48,000. During
the month of June a dividend of $13 cents per share was declared but it is yet to be approved
by board in the AGM and therefore it is avoided from being recorded in the books of
accounts.
12: Contingent Liabilities:
A contingent liability relating to legal provisions that were not anticipated to be
realized and valued at $3, 70,500 is not yet recorded in the financial statements since it is not

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anticipated to be recovered in the present financial year by the organization and therefore it is
disclosed in a separate manner.
Directors Declaration:
As per the declaration of directors;
 As per the opinion of directors, there are adequate reason to consider that the
company is capable of paying its debts as and when they become due.
 As per the opinion of directors, the attached financial report adheres with the
International Financial Reporting Standards (IFRS).
 As per the opinion of directors, the attached financial report along with the statements
complies with the Corporation Act 2001 (Cth). The financial report also complies
with the necessary accounting standards and gives a true and faire view of company’s
financial position together with its overall performance.
At the date of declaration, the company falls within the class of company that is
impacted by the instrument 2016/785 of the ASIC Corporation. The cross deed provides
guarantee where the company is viewed as party to guarantees of deed and every creditor are
paid of their full debt in respect of the cross deed agreement.
As per the opinion of director, a reasonable ground is to believe that the company to
which the deeds are applicable are proficient enough to satisfy the obligations and liabilities
to which the company may be within obligation in relation to the cross deed guarantee. The
directors also declare that the annual report presents the financial performance of the
company for the year 2019. As per the opinion of director, it notifies that the company has
strengthened the capital allocation framework by sharpening its organization culture and
productivity and has delivered a strong financial results. This has enabled the firm to declare
the dividend of $13 cents per share.

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As per the opinion of director, the company has made investment in future projects as
throughout the year the board has accepted funds for capital expenses relating to its project in
Australia after making a detailed assessment of capital allocation framework. As per the
opinion of director investment in capital projects would help the company in yielding returns
for the shareholders and ultimately it would contribute to the overall performance of the
organization. The director is please share in his report that the company has delivered a
strong financial result and has made reposition of its financial position to assure that it has
right environment for sustainable value creation. The director’s opinion denotes that changes
in company and those that are in progress is directed by unwavering promise of achieving
business objective by providing satisfactory returns to its shareholders.
As per the opinion of director, the business has rendered strong financial result with
revenues from continuous operations and excepting the significant items. The net profit after
tax represents the trading profit. The revenues derived by company has freed it from
operating profit, future capital and lease obligations as well as organization’s financial
position. Based on its operations in Australia, as per the opinion of director the company has
rendered a strong sales revenue and it can be reflected as the constant improvement in its
customer offer through making investment in price and services.
The directors in their opinion states that the revenues reported for the year is
estimated to be greater than the projected figure due to the annualized present year
investment in customer offers, one-off items and lower convenience earnings. Overall, it can
be fairly seen that the company has rendered a strong rise in revenue and momentum in sales
all through the year because of improvement in its customer service and retail execution.
The business in its segmental performance has delivered a strong growth in revenues
by building position with its suppliers as the leader of international product development

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company and discount retailer. With the help of reduced cost and inventory control the
company was successful in improving its earnings in the current year. The conditions for
trading to attain the targeted performance has been challenging in the present year and the
same is reflected in the current non-cash impairment identified during the year. The company
also looks forward to invest in sophisticated consumer oriented channel which provides
excellent value and suitability to the consumers.
The director is pleased to inform that the company has witnessed a stupendous growth
in its business model. Understandably the business has attained capacity in moving swiftly to
manage its portion and renewal flexibility. To extend the divisional autonomy model the
business has the exceptional ability of retaining its customers and deliver strong performance
based on the changes in time. As per the opinion of director, the company is capable of
providing satisfactory returns to its shareholders by forming a long-term shareholders value,
team members, suppliers and community where it carries out its business operations. As per
the opinion of director, the company has contributed towards workplace safety, lower
emissions, consolidation of business process through ethical sourcing. With the help of
customers and team members the company looks forward to make community contributions.
Annual directors Report:
A strong corporate governance is treated as the vital element in an organization’s
approach towards improving long-term shareholders value. The board of directors and
management are committed towards organizational policies and practices that meets the
compliance of higher level disclosure.
Insurance and indemnification of directors and officers:
After the end of financial year, a premium is paid by the company in respect of the
contracts which insures the directors and officers of the organizations against particular

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liabilities which occurs within that capacity. The disclosure relating to the nature liability is
duly covered within the premiums and insurance paid and it is subjected to confidentiality
under the insurance contract obligations. By adhering with the company’s constitution, the
company formed a deed of indemnity, insurance which has access to each directors within the
organization. The deed comprises of;
 Completely indemnifying the directors up to the extent which is permitted by the law
against liabilities occurred by directors working in capacity of company’s officer or
in respect of body corporate.
 Insuring the directors against the liabilities incurred by them.
 Granting the director with constant access while in office and for specific time period
after the director ceases from its position for a certain documents of company that is
related to period in office of director.
Along with this, the organization’s constitution provides indemnity to officers of the
company or from any liability that might occur in capacity of person. No such indemnity
payment has been made throughout the year for any documents which is stated above.
Corporate governance:
By understanding the requirement for higher corporate governance standard and
accountability, the directors supports and follows the the third edition principles and
recommendations of ASX Corporate governance councils.
Proceeding on behalf of the company:
During the year no proceedings have being bought on behalf of the company, neither
there is any application has been made by the organization with respect to the section 237 of
the Corporation Act 2001.

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Environmental regulation and performance:
The activities carried out by the company is subjected to environmental regulations by
several authorities across Australia and other states where the company carries its operations.
Licenses granted to the company regulates the management of air and water quality and
quantity. The licenses takes into account the storage and carriage of hazardous waste,
disposal of wastes and other environmental matters which relates to operations of company.
Review of Portfolio:
The company is dedicated in providing its shareholders with reasonable returns by
managing its portfolio in a proactive manner, strengthening the underperforming business
assets and making investment in value related growth opportunities. During the financial year
of 2019 a number of important decisions were made which mainly aimed at placing the
company in a position from where it can render a strong performance and returns to its
shareholders in the long run. The board of directors have faith in the result of inducements by
correctly recognizing and rewarding the performance.
The remuneration of CEO and Executive Management is presented in the short-term
incentives which is set below the target. The company has been successful in rendering a
strong financial performance to meet the targeted needs of its stakeholders such as customers
and suppliers by making constant progress towards set target. The short-term incentive plan is
directly in accordance with Relative Total Shareholder Return and Earnings per share of its
shareholders prior to the transformation. As per the opinion of directors, combining the
arrangement of STI from CEO to team members acts as the important element for customers
and company’s primary approach in transforming the business.

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Overall, there has been a rise in engagement and responsibility all through the
business in maintaining the focus towards important performance areas. Some of the
shareholders have shared their feedback with company all through the year. The directors
assures that the company is committed towards the shareholders need since it forms the
central element in development of remuneration approach.
Fixed annual remuneration:
The company does not increases the fixed remunerations or indexation as the
substance of course. The changes are reliant on the merit, material changes in the
responsibilities and roles, the market rate for the comparable roles arising materially or as the
result of internal relatives while protecting the investment of the company in developing
essential talent.
Annual auditors Report:
Report on Audit of Financial Report:
Opinion:
The financial reports have been audited for the company and it 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 twelve months ended and the notes to
financial statements along with the significant policies of accounting and the director’s
declaration. As per the opinion of the auditors, the financial reports of the organization
complies with the Corporation Act 2001 and provides;
 True and fair view of the organization’s financial standing on 30th June 2019 and its
financial performance for the current year ended.

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 Complying with the Australian Accounting Standards and Corporation Regulations
2001.
Basis for Opinion:
The auditors have performed the audit of financial reports based on the Australian
Auditing Standards. The auditor’s responsibilities include the standards which is further
illustrated in the auditor’s responsibilities under the audit section of financial reports. The
auditors are independent of companies in accordance with auditor’s requirement of
Corporation Act 2001 along with the ethical requirements of Accounting Professional and
Ethical Standard Board’s APES 110 Code of Ethics for the professional accountants which is
applicable to the audit of financial reports in Australia. The auditors have adhered with
ethical responsibilities in respect of code.
The auditors also confirm in their independent declaration that is required by
Corporation Act 2001 which is provided to the company’s directors, would in identical terms
if given to the directors while preparing the auditor’s report. According to auditors they
believe that the audit evidences which is obtained has sufficient and adequate to provide a
basis of opinion.
Key Audit Matters:
The key audit matters represents those which in the auditors professional judgement
holds high significance to audited financial reports for the current period. The key audit
matters are viewed as significant and it is addressed in respect of the audit of financial

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statements to form an audit opinion thereon. The auditors does lay down any separate opinion
relating to matters addressed below.
Key Audit Matter How the audit scope responded to the
Key Audit Matter
Valuing property, plant and equipment
and lease considerations
The key audit matter includes the value of
property, plant and equipment as the assets
that has carrying amount of $43,000. A
lease and rental agreement amounts to
$32,60,000. The audit emphasis on working
the recoverable amount of assets that is
greater than the recoverable and whether
any form of addition that needs to be
classified under the lease contracts. The
auditors have placed their focus on
necessary judgments and estimations in
respect of future of trading performance and
company’s cash flow including the project
EBIT.
Process included but not restricted to:
 By understanding the control of
company over the assessment of
recoverable value of assets and
calculation of lease or rental
agreement to ascertain whether any
kind of provisions were impaired.
 Understanding the method used by
company and their documentations
on the basis of vital assumptions and
estimations.
 Testing the samples on the basis of
arithmetical correctness relating to
cash flow models and complying
with the necessary data for budgets
approval and present forecast.
Other Information:
The directors of the organization holds the responsibility of other information. This
information includes the info involved in organization’s yearly report but does not comprises

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of financial report and auditors report. The opinion stated in the financial report does not
considers the information and the auditors do not express any form of assurance for the
conclusion made.
In relation with the audit of financial statements, the responsibility of auditors include
reading the other information and consider the necessary information that are materially
inconsistent with the financial report or auditor’s knowledge.
Auditor’s responsibility of Financial Report:
In agreement with AASB the responsibility auditors denotes;
a. Assessing the risks in material misstatements of financial report due to error or fraud
and carrying out audit in relation to those risks.
b. Evaluating the correctness of accounting policies used in estimation of accounts
relating to disclosures made by directors.

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