Financial Reporting Analysis of K & S Corporation Limited

This report analyzes the financial aspects and reporting issues of K & S Corporation Limited, including property, plant & equipment, intangible assets, provisions, contingent liabilities, leases, and revenue accounting.

2018
P ATK & S COR OR ION
M TLI I ED

Table of Contents
ntrod ctionI u .................................................................................................................................................3
Propert Plant ipmenty, & Equ .......................................................................................................................3
ntan i le a etI g b ss s..........................................................................................................................................3
Pro i ion ontin ent ia ilitie commitment and ontin ent A etv s s, C g L b s ( s) C g ss s...................................................4
ea eL s s..........................................................................................................................................................5
e en eR v u .......................................................................................................................................................5
oncl ionC us ...................................................................................................................................................6
e erenceR f s...................................................................................................................................................7

Introduction
T e compan ic a een anal ed ere i orporation imited ic i li ted on t eh y wh h h s b yz h s K & S C L , wh h s s h
A tralian toc c an e t deal in lo i tic tran portation are o e mana ementus S k Ex h g . I s g s s, s , w h us g ,
di tri tion c annel mana ement and contract mana ement t i ead artered in A tralias bu h g g . I s h qu us
and a ma or di i ion namel el A tralian tran port and t e e ealand Tran porth s 3 j v s s y Fu s, us s h N w Z s .
T e el di i ion o t e compan i dealin in di tri tin o el to t e c tomer rom arioh fu v s f h y s g s bu g f fu s h us s f v us
ector li e t o e o i in armin and ot er retail ector c tomer in t e o t ea t A tralias s k h s f f sh g, f g h s us h S u h s us
elton(B , 2017) T e e ealand tran port di i ion i en a ed in pro idin t e lo i tic er ice. h N w Z s v s s g g v g h g s s v s
to t e c tomer in e ealand and imilar i t e ca e or A tralia Tran port T e i enh us s N w Z s s h s f us s . h g v
report i li t t eh gh gh s h inancial a pect and t e reportin i e it re pect to t e tan i le andf s s h g ssu s w h s h g b
intan i le a et o compan t e pro i ion contin ent a et and lia ilitie appearin in t eg b ss s f y, h v s , g ss s b s g h
oo and t e re en e and lea e acco ntin To ard t e end o t e t d nece arb ks h v u s s s u g. w s h f h s u y, ss y
concl ion a e een dra n on t e i en a pectus s h v b w h g v s s rom ic capen(B w h & S s, 2016).
Property, Plant & Equipment
T e alance o propert plant and e ipment o t e compan a onh b f y, qu f h y s 30th ne tand atJu 2017 s s $
M T e plant and e ipment are ein al ed at co t red ced acc m lated350.998 N. h s qu ’s b g v u s u by u u
depreciation and t e impairment lo e i an a o date imilarl t e land and ildin areh ss s, f y, s f . S y, h bu gs
ein al ed at air al e red ced acc m lated depreciation and t e impairment lo e ib g v u f v u s u by u u h ss s, f
an till date ince it i a non deprecia le a ety, s s - b ss a(D s, 2017).
Alternati el t e plant and t e e ipment can al o e al ed at mar et price le t ev y, h s h qu s b v u k ss h
acc m lated depreciation till date T e mar et al e i omet in at ic t e er and elleru u . h k v u s s h g wh h h buy s
or t e a et or lia ilit i illin to e c an e t e ame at arm len t price n c ah ss b y s w g x h g h s ’s g h s. I su h
tran action it i a med t at ot t e partie in ol ed in t e tran action are a ins , s ssu h b h h s v v h s h v g
con idera le no led e o al ation o t e a et and lia ilitie and no deci ion i ein dones b k w g f v u f h ss s b s s s b g
nder comp l ion n ca e t e al ation i ein done in t i manner it ill o a tr e and airu u s . I s h v u s b g h s , w sh w u f
mar et al e o a et in t e oo a on t e i en alance eet date a t e al e o a etk v u f ss h b ks s h g v b sh s h v u f ss s
ne er remain con tant con iderin time al e o monev s s s g v u f y Ale ander( x , 2016).
Intangible assets
A per t e Ann al eport o t e compan t e intan i le o t e compan incl de ood ill ands h u R f h y, h g b s f h y u G w
ot er intan i le a et A per A relea ed nternational Acco ntin tandard oard t eh g b ss s. s I S 38 s by I u g S s B , h
compan a iced all t e di clo re re irement it re pect to intan i le a et A pery h s suff h s su qu s w h s g b ss s. s
t e A t e intan i le o ld e al ed at co t initiall and later on t e ame can eh I S, h g b s sh u b v u s y h s b
reco ni ed eit er at co t or it can e re al ed a ell A compan i al o re ired to i eg z h s b v u s w . y s s qu g v

in ormation on t e di erent cla e o intan i le a et appearin in t e alance eetf h ff ss s f g b ss g h b sh
di erentiatin et een t e el enerated and t e ac ired intan i leff g b w h s f-g h qu g b s arlin(C , 2009).
T e met od adopted orporation or al ation o t e ood ill a een clearlh h by K & S C f v u f h G w h s b y
di clo ed in t e note to acco nt t i not el enerated t a een ac ired in t e ines s h s u s. I s s f-g bu h s b qu h bus ss
com ination T e compan a di clo ed t at t e a e al ed t e ood ill at co t leb . h y h s s s h h y h v v u h g w s ss
impairment lo i an T e impairment lo i an on t e ood ill cannot e re er edss, f y. h ss, f y, h g w b v s .
imilarl t e compan a di clo ed t e al ation o ot er intan i le a et a ell alon itS y, h y h s s s h v u f h g b ss s s w g w h
t e e l li e t at a e een con idered or eac o t e a et T e a et ic are a inh us fu v s h h v b s f h f h ss s. h ss s wh h h v g
t e inite li e are ein amorti ed o er t e e l li e period onlh f f b g z v h us fu f y ic e(D h v, 2017).
Provisions, Contingent Liabilities (commitments) and Contingent
Assets
Pro i ion ma e de ined a lia ilit ic a not et een materiali ed t ic i certain tov s y b f s b y wh h h s y b z bu wh h s
occ r in t e comin t re and ic can e mea red it relia ilit t i a reco ni ed in t eu h g fu u wh h b su w h b y. I s g z h
oo en t e o li ation ari e d e to ome pa t e ent and ic in ol e t e o t lo ob ks wh h b g s s u s s v s wh h v v s h u f w f
re o rce and a relia le e timate o t e ame can e done T e compan a di clo ed all t es u s b s f h s b . h y h s s s h
pro i ion alon it t e a i in t e note on inancial tatement and al o mentionedv s s g w h h b s s h s f s s s
in ormation a o t it re er alf b u s v s li(Fé x, 2017) t e compan i e pectin t e amo nt to e. If h y s x g h u b
reim r ed t en t e reim r a le amo nt i ein o n a a et and e pen e net obu s , h h bu s b u s b g sh w s ss s x s s f
reim r ement i ein o n on t e lia ilit n ca e t e time al e i in ol ed t e companbu s s b g sh w h b y. I s h v u s v v , h y
a ed t e concept o di co ntin t e pro i ion amo nt a e i tin mar et rate T eh s us h f s u g h v s u s x s g k . h
compan alance eet a ot c rrent and non c rrenty’s b sh h s b h u - u pro i ion in t e orm o emplo eev s s h f f y
ene it and or men compen ation pro i ion etcb f s w k s v s s, .
ontin ent lia ilit i a lia ilit ic ma e inc rred on t e appenin o ome e ent ic iC g b y s b y wh h y b u h h g f s v wh h s
c rrentl ncertain T i i omet in ic a not et materiali ed and t ere ore i einu y u . h s s s h g wh h h s y z h f s b g
o n a note to t e inancial tatement T e compan a di clo ed t e contin ent lia ilitsh w s s h f s s. h y h s s s h g b y
o interloc in arantee i en compan to t e idiarie and t e le al claim in relationf k g gu s g v by y h subs s h g
to t e ameh s erner(W , 2017).
n addition to t e a o e t e compan al o a minor le al claim ic are pendin a ain t itI h b v , h y s h s g s wh h g g s .
T e lia ilit or t e ame a not et een admitted and t e claim are ein de ended in t eh b y f h s h s y b h s b g f h
co rt ere t e amo nt a een con idered to e er in i ni icant t e director T ere areu . H h u h s b s b v y s g f by h s. h
enerall t o ie to reportin o t e contin ent lia ilit ir t i t e amo nt i in i ni icant ag y w v ws g f h g b y, f s f h u s s g f s
in t i ca e and it i not e pected to materiali e t en it di clo re ma a ect in e torh s s s x z , h s s su y ff v s ’s
deci ion de pite not a in critical impact on inancial econdl i t e ame i di clo ed its s h v g f s. S y, f h s s s s ,

lead to tran parenc and ia ilit o t e inancial tatement and t enco ra e lo als s y v b y f h f s hus u g s g b
reportin tandardg s s oole(G y, 2016).
ontin ent a et are a et ic a ain are dependent on t e appenin o ome t re e entC g ss s ss s wh h g h h g f s fu u v
and mi t re lt in a ain A per t e concept o pr dence it i ad i a le not to report an cgh su g . s h f u , s v s b y su h
t ri tic ain or a et in t e oo o acco nt and t ere ore t e i en compan in and afu u s g ss h b ks f u s h f h g v y h h s
not recorded an c a et in it ooy su h ss s b ks.
Leases
T e lea e can e cate ori ed into inance lea e and operatin lea e inance lea e i con ideredh s b g z f s g s . F s s s
a one o t e inancial a et o t e compan n t e i en ca e t e compan a ac ireds f h f ss s f h y. I h g v s , h y h s qu
Propert plant and e ipment ort million t ro inance lea e T e compan ay, qu w h $46.10 h ugh f s . h y h s
a ided AA on lea e and di c ed on t e cla i ication and al ation o t e lea e inb by SB 16 s s s uss h ss f v u f h s s
oob ks e er on(J ff s , 2017) t a cla i ied t o e a et a le el a et t e lea e to e lon term. I h s ss f h s ss s s v 2 ss s, h s b g
lea e and t e e pen e on acco nt o t e ame to es s h x s s u f h s b operatin lea e T e compan ag s s. h y h s
lea ed certain premi e in A tralia e ealand e o t ale ictoria and ort erns s s us , N w Z , N w S u h W s, V N h
Territor T e operatin lea e rental a een cla i ied compan into cate orie namely. h g s h s b ss f by y 3 g s y
le t an mont more t an mont t le t an ear and more t an ear T ess h 12 hs, h 12 hs bu ss h 5 y s h 5 y s. h
compan al o lea e e o t e propert nder non cancella le lea e a reement ran in romy s s s f w f h y u - b s g s g g f
ear to ear ic can rt er e rene ed1 y 15 y s, wh h fu h b w
Revenue
e en e reco nition i one t in ic i er important and critical or an companR v u g s h g wh h s v y f y y. K & S
orporation imited reco ni e re en e en t e condition are met a per t e acco ntinC L g z s v u wh h s s h u g
tandard T e e condition are ri and o ner ip in t e ood m t a e een tran erreds s. h s s sk w sh h g s us h v b sf ,
t e economic ene it i certain to ari e to t e entit and amo nt i collecti le and it can eh b f s s h y u s b b
relia l mea redb y su nec el alterio(K h & S , 2016) t e amo nt i not certain or t e. If h u s h economic
ene it to entit i not certain t e amo nt i not reco ni ed a re en e T e i en companb f y s , h u s g z s v u . h g v y
a mentioned ome peci ic detail it re pect to reco nition o re en e ome o ic areh s s s f s w h s g f v u , s f wh h
mentioned elob w:
1. ale o ood or reco nition o re en e in ca e o ale o ood t e compan m tS f g s: F g f v u s f s f g s, h y us
a e tran erred t e ri and re ard to t e er and t e amo nt m t e mea ra leh v sf h sk w h buy h u us b su b .
T e ri and re ard i con idered to e tran erred on t e deli er o t e ood T eh sk w s s b sf h v y f h g s. h
amo nt reco ni ed a re en e i net o di co nt and ale ret rn n ca e o el t eu g z s v u s f s u s s u . I s f fu , h
re en e i reco ni ed en t e el i pro idedv u s g z wh h fu s v .

2. Pro i ion o er ice T e compan i reco ni ed t e re en e rom are o inv s f s v s: h y s g z h v u f w h us g
mana ement on pro i ion o re i ite er ice and ere t e amo nt i certaing v s f qu s s v s wh h u s ,
collecti le and mea ra leb su b emin a(H w y, 2017).
3. ntere t or reco ni in t e intere t re en e t e compan e t e e ecti e intere tI s : F g z g h s v u , h y us s h ff v s
met od nder t i intere t amo nt i ein calc lated at t e amorti ed co t o t eh . U h s, s u s b g u h z s f h
inancial a et a per t e e ecti e intere t rate ic i t e di co ntin rate and t enf ss s h ff v s wh h s h s u g h
t e intere t re en e i ein allocated o er t e rele ant periodh s v u s b g v h v .
4. i idend T e di idend re en e i reco ni ed en t e ame a een declared t eD v : h v v u s g z wh h s h s b by h
compan and t e ri t to recei e t e ame a een recei edy h gh v h s h s b v .
Conclusion
rom t e a o e di c ion and anal i on t e ann al report o orporation imited itF h b v s uss ys s h u f K & H C L ,
can e concl ded t at t e ann al report or ear endedb u h h u f y 30th ne a een prepared inJu 2017 h s b
compliance it t e A tralian Acco ntin tandard and all t e rele ant note and di clo rew h h us u g S s h v s s su s
a e een made in ann al report All t e al ation re en e acco ntin e timate and t eh v b u . h v u s, v u u g, s s h
a i o a mption a een nicel e plained ma in it tran parent and relia le or t e endb s s f ssu h s b y x k g s b f h
erus .

References
Ale ander T e an in ace o Acco nta ilitx , F., 2016. h Ch g g F f u b y.
T e o rnal o i er d cation
h J u f H gh E u , pp71(4), .
411-431.
elton PB , ., 2017.
ompetiti e trate reatin and tainin perior Per ormance
C v S gy: C g Sus g Su
f . ondon MacatL :
nternational ltdI .
rom ic M capen Mana ement Acco ntin e earc ear onB w h, . & S s, R., 2016. g u g R s h: 25 y s .
Mana ement
g
Acco ntin e earc
u g R s h, pp31(1), . 1-9.
arlin T a ood ill acco ntin in Mala ia and t e tran ition to a complianceC , . F. N. . L. N., 2009. G w u g ys h s IFRS –
a e ment o lar e ir t ear adopterss ss f g f s y s.
o rnal o inancial eportin Acco ntin
J u f F R g & u g,, pp7(1), . 75-104.
a P inancin Pattern and tili ation o i ed A et A t dD s, ., 2017. F g U z f F x ss s - S u y.
A ian o rnal o ocial cience
s J u f S S
t die
S u s, pp2(2), . 10-17.
ic e n t e concept al o ndation o inancial reportinD h v, I., 2017. O h u f u s f f g.
Acco ntin and ine
u g Bus ss
e earc
R s h, pp47(6), . 617-632.
li M A t d on t e e pected impact o on t e tran parenc o inancial tatement oFé x, ., 2017. s u y h x f IFRS 17 h s y f f s s f
in rance companiesu s.
MA T T
S ER HESIS, pp. 1-69.
ooleG y, J., 2016.
Principle o A tralian ontract a
s f us C L w. A tralia e i e ius : L x s N x s.
emin a are older ealt Ma imi ation a a nction o tat te eci ional a andH w y, J., 2017. Sh h W h x z s Fu f S u s, D s L w,
r anic oc mentO g D u s.
SSRN, pp. 1-35.
e er on M ner omple it and ealt Ma imi ation A re prin er it erlandJ ff s , ., 2017. E gy, C x y W h x z , R. y s. S g , Sw z .Tec nolo ical oreca tin and ocial an e
h g F s g S Ch g , pp. 353-354.
nec el alterioK h , W. & S , S., 2016.
A ditin A rance and i
u g: ssu
R sk. o rt ed e or o tled ef u h . N w Y k: R u g .
erner M inancial proce minin Acco ntin data tr ct re dependent control loW , ., 2017. F ss g - u g s u u f w
in erencef .
nternational o rnal o Acco ntin n ormation tem
I
J u f u g I f
Sys s, pp25(1), . 57-80.