Analysis of Woolworths Group Limited Annual Report

sTable of Contents
Brief about the company.............................................................................................................................1
Sections of business dominating the report................................................................................................1
Summary of the Director’s report...............................................................................................................2
Summary of the Auditor’s report................................................................................................................3
Change in the sales and analysis..................................................................................................................3
Change in the net cash flow and analysis....................................................................................................4
Change in Retained Earnings and Analysis..................................................................................................4
Ratio Analysis..............................................................................................................................................4
References...................................................................................................................................................9

Brief about the company
Organization name: Woolworths Group Limited
Year of Establishment: The Company came into existence with the opening of its first
store on December 5th, 1924.
History & Background: When the company was opened, it started with a share capital of
just one hundred and eighty-five thousand pounds which were subscribed a little over six
hundred people which includes its five founding members. By 1929, the company
expanded its operations in New Zealand and opened its first store in the country in the
city of Wellington (Belton, 2017). The company had a landmark moment in the year of
1955 when it opened its 200th store. In the year 1981, the company introduced itself in the
electronics retail market by acquiring Dick Smith. From the 1970‘s to the late 1980’s the
company began a transition phase of moving from variety stores to supermarket stores.
By 1985, Woolworths had transformed itself into the largest food retailer in the country
of Australia. The company entered into the fuel supply market in the year 1996 by
opening petrol outlets. It expanded itself into liquor business by acquiring Dan Murphy in
the year 1998. In 2005, Woolworths Group ventured into the hotel business by the
acquisition of ALH group (Alexander, 2016).
In 2011, Woolworths came up with its first home improvement store. They offer
furniture, bathroom fittings and other varieties of home furnishing items.
Sections of business dominating the report
Going through the contents page, it can be concluded that the business review and the
financial report are the two sections that overwhelmingly dominate the entire annual
report.
The business review majorly entails the performance of the different verticals of the
business namely the Food divisions in Australia and New Zealand, its liquor division of
Dan Murphy, Retail giant Big W and hotels (Bromwich & Scapens, 2016). Highlights of
the balance sheet, cash flows are also given. This part also contains information on the
operations that have been discontinued and the expansion plans of the company.
The financial report comprises of the auditors as well as the directors report and the
financial statements of the entity.

Summary of the Director’s report
Base on the Director’s report section of the annual report, the four main directors of the
entity are:
 Gordon Cairns (Also the chairman of the board)
 Michael Ullmer (Also Chairman of the audit, risk management & compliance
committee)
 Holly Kramer (Also the Chairman of the People Performance Committee)
 Scott Perkins (Also the chairman of the sustainability Committee)
The initial page of the report states the gender composition of the board (comprising
of half male and half female members), the average tenure of the board members
ranging between zero to nine years and the pie charts depicting the experience of the
members of the board in different areas like Finance, retail, risk management among
others. The report also highlights the experience and backgrounds of the directors and
other executive committee members (Choy, 2018). The reports enlist the main
business activities that the group undertakes. It also gives director wise details for
both executive and non-executive details of the number of meetings of the board and
various committee meetings that they have participated in throughout the year. This is
a disclosure required from a corporate governance perspective. The report names the
two company secretaries of the company. The report contains a declaration on the
compliance of environment regulation and director’s indemnity against lawsuits. It
states that certain non-audit services were rendered by its auditors which are within
the compliance purview of the Code of ethics for auditors (Das, 2017). A significant
part of the director’s report is the remuneration report of the key managerial
personnel and directors. The report covers the financial and other performances of the
company Vis a Vis the remuneration paid. It covers the fixed as well as other short
term and long term incentives paid to the directors and key managerial personnel. It
has details about the set targets for the executive KMP and how much of it has been
achieved and its comparison with the actual remuneration received by them during
the year. The report has a financial year 2019 outlook on the payments to be made to

them. Among other things the remuneration report lays down policy guidelines
related to the minimum shareholding requirement of the independent directors,
restrictions on securities trading for the senior executives and the roles and
responsibilities of the people performance committee (Dichev, 2017).
Summary of the Auditor’s report
The statutory auditors of the company are Deloitte Touché Tohmatsu. AV Griffiths is the
signing partner from Deloitte for the company. As per the opinion stated in the report, the
financial statements of the group depict a true and fair view of the view of the financial
performance of the company. The report states that in preparing the financial statements,
the regulation of the Corporations Act 2001 and the Australian accounting standards have
been complied with. In the Basis for opinion paragraph, the auditors state that the basis of
their opinion is the statutes under the act and the audit evidences obtained during the
audit which are sufficient and appropriate (Gooley, 2016). The report covers three key
audit matters that were significant in the audit of the financial statements. The three
major matters include:
 Valuation of the Property, plant and equipment of Big W and the consideration of
provisions related to onerous lease.
 Evaluation of the accounting methodologies used for the accounting of rebates.
 Testing of IT controls (Vieira, et al., 2017).
Change in the sales and analysis
Compared to the previous year figures, the sales have increased. The reason for the
change in sales could be attributable to the following:
 There has been a 4.3 percent increase in the revenues from the Australian food
division and 4.5% growth in Endeavour drinks which has been the major driver in
pushing the sales figures upwards.
 Another reason for the increase in sales was the first full year comparable growth
since financial year 2009 in the segment Big W. Lower prices and improved
product ranges triggered the growth in this division (Werner, 2017).