Corporate Accounting Report: Financial Performance of Woolworths Group

This report provides a comprehensive analysis of the corporate accounting practices of Woolworths Group Ltd. It begins with an examination of the company's board of directors, including the composition, experience, and committee memberships of both executive and non-executive directors. The report then delves into the financial performance of Woolworths Group, highlighting the significant improvement in net profit from a loss in the previous year. It explores the dividend payments, strategic investments, and the company's approach to risk management, particularly in the context of the changing retail environment. Furthermore, the report addresses the preparation and use of financial statements, emphasizing the importance of consolidated financial statements for stakeholders and the treatment of non-controlling interests according to accounting standards. The report concludes with a discussion of the users of financial statements and their focus on the overall financial performance of the group, including subsidiaries and branches.

Running head: CORPORATE ACCOUNTING
Corporate Accounting
Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
Answer to Question 1......................................................................................................................2
Part A...........................................................................................................................................2
Part B...........................................................................................................................................4
Answer to Question 2......................................................................................................................6
Requirement A.............................................................................................................................6
Profit and Loss Statement and Comprehensive Income Statement.............................................6
Requirement B.............................................................................................................................7
Reference.........................................................................................................................................8

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Answer to Question 1
Part A
Composition of the Board of Directors
The company which is selected for the purpose of this assignment is Woolsworths Group
Ltd. The company is engaged in retail distribution business among the customers of the business
and operates in Australia. The board of directors of Woolworth group ltd is made up of both
executive and non-executive directors which are either independent or dependent which is stated
in the financial statements of the business (Woolworthsgroup.com.au. 2018). The independent
directors of the business are Gordon Cairns, Brad Banducci, Jillian Broadbent, Holly Kramer,
Siobhan Mckenna, Scott Perkins, Kathryn Tesija and Michael Ullmer.
The board of directors of the company is made up of 8 directors in total and gender of
men is to women which makes the composition of the board of directors in the ratio of 1:1. In
other words, there are four female directors and four directors which forms the board of directors
of the business.
The independent chairman of the board of directors Gordon Cairns has a MA(hons)
degree and he has an over 30 years experience in retail and food industry. Brad Banducci is the
managing director of the company and has a degree of MBA, LLB, B.Com (Accounts) and has a
vast experience. Prior to working for the company, he has a working experience of 15 years with
Boston Consultancy Group which forms just a part of his experience. Holly Kramer is an
independent non-executive director of the company and has a degree of BA(hons) and MBA
degree as well. Holly Kramer has over 20 year’s worth of experience in management, sales,
Marketing and also had a job at Fords Motor Company, Telstra.

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Gordon Cairns who is the chairman of the board also is a member of all significant
committees which operates in the company which are Audit Risk Management and Compliance
Committee, People’s Performance Committee, Sustainability Committee and Nomination
Committee. Gordon Cairns is also the chairman of the nomination committee. Brad Banducci is
only a member of the board of directors and is not a member of any committee. Jillian Broadbent
is a member of all the committees which are mentioned above expect People’s Performance
Committee. Holly Kramer is a member of all the committees except for Audit Risk Management
and Compliance Committee and she is also the chairman of People’s Performance Committee as
per the financial statements of the company (Woolworthsgroup.com.au. 2018). Siobhan
Mckenna is a member of all the committees except for sustainability committee. Scott Perkins is
a member of all the committees and he is also the chairman of the sustainability committee
which focuses on sustainable practices of the business. Kathryn Tesija is only engaged as a
member of the nomination committee. Michael Ullmer is a member of all the committees except
for people’s performance committee. He is also the chairman of Audit Risk Management and
Compliance Committee.
As per the financial statement of the company, the company does not have a many
operating sites other than Australia and New Zealand where the business operates as a retail store
and food supplying brand. The company has variety of diversified business such as hotel
business, Endeavour Drinks, Big W and other unallocated business. The net financing cost of the
business is shown to have fallen by 21.2% which is due to the lower average debt which is
employed by the business and also due to lower borrowing costs for the same.
Woolsworth Group is regarded to be one of the top companies of Australia and is also
one of the largest revenue generating companies in Australia. The reason for choosing such a

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company is due to the overall involvement of the company in retail and food supply business in
Australia and also due to the financial performance of the business during the year 2017.
Part B
The net profit which is generated by the company during the year is shown to be $ 1533.5
million which is attributable to the shareholders of the business and such has improved from the
previous year’s figure tremendously. In previous year, the company faced a loss of about $
1234.8 million as shown in the statement of profit and loss account of the company. The
performance of the business is commendable as it has turned a loss situation into profit one. The
amount of dividend which is paid by the business during 2017 has reduced from previous year
and it I shown as $ 540.9 million in 2017 and $ 1184.8 million in 2016. The board of directors of
the business has declared a 50 cents dividend for the current year thus making the total dividend
offered by the company at 84 cents per share which shows that the dividend rate of the country
has increased from previous year by 9.1% and in addition to this, the business offers regular
dividend to its shareholders from year to year basis as per the chairman’s report.
As per the plan of the management of Woolsworth, the company will be focusing on
making more investments in Big W as this is an area which is quite preferred by the customers.
The company has not been making that much profit from the area but still the plan of the
business is to continue its investment in the product. The business will continue to invest in the
business which is established in New Zealand which is clear from the annual reports of 2017 of
the company. The main focus of the company is on the five strategic areas which are establish a
customer and store led customer team, generating sustainable performance in food, Evolving the

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drink business, empowering the business portfolio and becoming a lean retailer through end to
end process and system excellence.
One of the major challenges which the business faces is due to the changing environment
of retail business and the new entrants and the level of competition which is exist in the market
and the management of Woolsworth has developed an enterprise risk management framework
which focuses on taking care of any risks which the business faces (Sadgrove 2016). The
business has put the interest of the customers at the center of the business and therefore enjoys
good reputation which is an asset for the company as such breeds brand loyalty which can
combat the changing market risks and threats of competitors. The company has launched its
corporate social responsibility plan during the year which targets to achievement by 2020. The
plan aims to promote sustainability and reduce the impacts on the environment which the
business influences (Pyo and Lee 2013). The different methods which is used for classification
of the business expenses is to ensure that there is simplicity in the displaying the various
expenses which is incurred by the business.

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Answer to Question 2
Requirement A
Profit and Loss Statement and Comprehensive Income Statement
Particulars Notes Amount
Sales Revenue $6,50,000
Cost of Sales -$4,10,000
GROSS PROFIT $2,40,000
Other Incomes 1 $6,500
TOTAL REVENUE $2,46,500
Operating Expenses:
Research & Development Cost 2 -$25,500
Selling & Marketing Expenses 3 -$87,500
General & Administration Expenses 4 -$79,500
Total Operating Expenses -$1,92,500
Net Operating Income $54,000
Other Non-Operating Income/(Expenses):
Gain on Sale of Plant $13,000
Net Income before interest & tax $67,000
Net Finance Cost 5 -$16,000
Net Profit before Tax $51,000
Income Tax Expenses -$15,500
Net Profit after Tax $35,500
Other Comprehensive Income:
Gain on Revaluation of Land $50,000
Tax Effect on Gain on Revaluation -$15,000
Net Other Comprehensive Income $35,000
Total Comprehensive Income for the period $70,500

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Requirement B
The prime users of the financial statements who are the shareholders of the company are
not only concerned with the information which is provided on the parent company but also with
the financial performance of the entire group which includes subsidiaries, branches of the
company (Carraher and Van Auken 2013). The main reasons for preparation of the financial
statement of the company and present the same is done so that the financial performance of the
business can be depicted to the prime users of the financial statements (Bisogno, Santis and
Tommasetti 2015).
As per AASB 10, non-controlling interest are to be treated as part of the consolidated
equity and should not be included in the debt capital of the business as such non-controlling
interest refers to the shareholders of the subsidiary company which are not owned by the holding
company (Howieson 2013). If such is taken as debt than it will violate the provisions of AASB
10 and the treatment will be wrong.

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Reference
Bisogno, M., Santis, S. and Tommasetti, A., 2015. Public-Sector consolidated financial
statements: An analysis of the comment letters on IPSASB’s exposure draft no. 49. International
Journal of Public Administration, 38(4), pp.311-324.
Carraher, S. and Van Auken, H., 2013. The use of financial statements for decision making by
small firms. Journal of Small Business & Entrepreneurship, 26(3), pp.323-336.
Howieson, B., 2013. Defining the Reporting Entity in the Not‐for‐Profit Public Sector:
Implementation Issues Associated with the Control Test. Australian Accounting Review, 23(1),
pp.29-42.
Pyo, G. and Lee, H.Y., 2013. The association between corporate social responsibility activities
and earnings quality: Evidence from donations and voluntary issuance of CSR reports. Journal
of Applied Business Research, 29(3), pp.945-962.
Sadgrove, K., 2016. The complete guide to business risk management. Routledge.
Woolworthsgroup.com.au. (2018). Investors - Woolworths Group. [online] Available at:
https://www.woolworthsgroup.com.au/page/investors/ [Accessed 19 May 2018].