2009 sp4 - unisa acg27 - assignment 2 - financial report
TRANSCRIPT
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PMA Limited Annual Report 2010
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PMA Limited Australian Business Number (ABN): 33 051 248 363
Financial Report
As at 30 June 2010
Corporate Governance Statement .......................................................................................................... 4
Director’s Report ..................................................................................................................................... 7
Directors’ Declaration ........................................................................................................................... 13
Independent Auditor’s Report .............................................................................................................. 14
Statement of Comprehensive Income .................................................................................................. 16
Statement of Financial Position ............................................................................................................ 17
Statement of Changes in Equity ............................................................................................................ 18
Statement of Cash Flow ........................................................................................................................ 19
Notes to the Financial Statements ........................................................................................................ 20
1. General Information ..................................................................................................................... 20
2. Statement of Significant Accounting Policies ............................................................................... 21
3. Income .......................................................................................................................................... 24
4. Analysis of Expenses ..................................................................................................................... 25
5. Sale of Equipment ......................................................................................................................... 26
6. Analysis of Trade and Other Receivables ...................................................................................... 26
7. Analysis of Property, Plant and Equipment .................................................................................. 27
8. Analysis of Intangible Assets ......................................................................................................... 27
9. Analysis of Trade and other Payables ........................................................................................... 28
10. Analysis of Provisions .................................................................................................................. 28
11. Reserve ........................................................................................................................................ 29
12. Analysis of Distributions.............................................................................................................. 29
13. Share Capital ............................................................................................................................... 29
14. Auditor ........................................................................................................................................ 30
15. Non-adjusting events after the reporting date ........................................................................... 30
16. Adjusting events after the reporting date .................................................................................. 30
17. Contingent Liabilities................................................................................................................... 31
18. Non-Financial Disclosures ........................................................................................................... 31
19. Capital ......................................................................................................................................... 32
References ............................................................................................................................................ 33
Appendix A - Calculations ..................................................................................................................... 34
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Corporate Governance Statement
While PMA Limited is not a listed Company, ‘it has adopted, where applicable, practices in
compliance with the relevant section of the ASX Corporate Governance Council, Corporate Principles
and Recommendations’. (TT-Line Company Pty Ltd 2009).
Principle 1. Lay solid foundations for management and oversight:
‘The Board is accountable to the shareholders and is responsible for:
Setting strategic and financial objectives;
monitoring the Company’s performance and financial position and overseeing the financial
accounts and reporting;
identifying and managing business and compliance risk;
managing the Company’s investment portfolio;’ (Australian United Investment Company
Limited 2009)
determining the dividend policy of the Company;
appointing and determining conditions of service including remuneration and performance
monitoring procedures for the Chief Executive Officer and senior management;
reviewing and monitoring risk management and internal compliance control;
reviewing and monitoring all major policies.’ (TT-Line Company Pty Ltd 2009)
Principle 2. Structure the Board to add value:
‘The composition of and appointments to the Board are prescribed by the Company’s constitution.
Appointments are made directly by the two shareholders.’ (TT-Line Company Pty Ltd 2009)
‘The Chairman and all other Directors are independent non-executive Directors. The details of the
individual Directors are set out on page 5.’ (TT-Line Company Pty Ltd 2009)
Principle 3. Promote ethical and responsible decision-making:
PMA Limited has adopted a Code of Conduct and Ethics which governs the Company commercial
operations and the conduct of Directors, employees, consultants and all other people engaged
somehow with PMA Limited operations. The Company Code of Conduct and Ethics can be found on
its website www.pmalimited.com.au. (TT-Line Company Pty Ltd 2009)
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Corporate Governance Statement (continued)
Principle 4. Safeguard integrity in financial reporting:
The Chief Executive Officer is responsible for assuring that the Company’s financial reports represent
the concept of true and fair view and are in accordance with Australian Accounting Standards or any
other relevant accounting standards.
The Company’s external auditor is ABC Accounting. (TT-Line Company Pty Ltd 2009)
Principle 5. Make timely and balanced disclosure:
PMA Limited is not a public listed Company and therefore is not required reporting to the stock
exchange. (TT-Line Company Pty Ltd 2009)
Principle 6. Respect the rights of the shareholders:
‘The Company communicates with shareholders through:
The annual report;
the half year report;
the website, including email contact;
telephone availability of the Company Secretary at the representative office;
Annual General Meeting including Chairman’s address and question time;
mailing of Chairman’s Address to all shareholders and posting to website.
the external auditor is to be available for questioning at the Annual General Meeting.’
(Australian United Investment Company Limited 2009)
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Corporate Governance Statement (continued)
Principle 7. Recognise and manage risk:
‘The Company is committed to ensuring that all key risks are identified, assessed and appropriately
managed. In this regard, consideration is given to balancing the potential costs of the risk, the
benefits from exposure to the risk and the cost of controlling the risks.
The Board, and in particular the audit and risk committee, oversee the establishment,
implementation, and periodic review of the Company’s risk management systems. Management has
established and implemented a system for assessing, monitoring and managing operational,
financial reporting, and compliance risks for the Company.
A formal risk assessment process, to document the organisational strategic risk profile, has been
undertaken and this profile is subject to regular periodic update. The outputs from this process are
reviewed by management and the audit and risk committee and ultimately are reported to the
Board. Each business unit is responsible and accountable for implementing and managing the extent
of exposure to identified risks.’ (TT-Line Company Pty Ltd 2009)
Principle 8. Remunerate fairly and responsibly:
‘The Board has established a remuneration committee which is responsible for ensuring that PMA’s
remuneration policies and practices are fair and nationally competitive. The remuneration
committee is responsible for reviewing and approving changes to executive and senior management
remuneration policies and incentive programmes. The committee approves market movement
increases as part of the annual remuneration review for executives and senior managers. The
remuneration committee is responsible for recommending to the Board movements in senior
management salary levels.’ (TT-Line Company Pty Ltd 2009)
The remuneration committee is chaired by A Cole and its other members are P Paterson and M
Barendrecht.
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Director’s Report
Introduction
The Board of Directors of the consolidated entity PMA Limited (‘the company’) has the pleasure in
submitting the company’s annual financial report for the year ended 30 June 2010. In order to
comply with the provisions of the Corporations Act 2001, the directors report as follows:
Directors and senior management
The Directors of the company in office during the financial year and until the date of this report are
as follows:
Mr A Cole (Chairman)
Ms P Paterson (CEO)
Mr M Barendrecht
Miss E Liot
Dr A Dobe
The senior management team are the following persons, considering their current position was held
during the financial year and until the disclosure date of this report:
H.P. Boak (CFO)
I.B. Man (GM, manufacturing goods department)
P.G. Howard (Operation Manager)
B.R. Lee (GM, service and repair department)
A.K. Mohammad (Company secretary)
Company Secretary
Mr A.K. Mohammad, Chartered Accountant, has held the position of company secretary of the
company since last financial year. He joined the company in 2008 and previously held a company
secretary position at another large manufacturing company.
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Director’s Report (continued)
Principal activities
The principal activities of the company during the financial year were the research, development,
manufacture, marketing and distribution of agricultural implements. During the financial year the
company decided to pursue a new arm of the business, service and repair, to supplement the
existing manufacturing and retail arms. Details of the revenue are in note 3 to the financial
statements.
Operating Results
The profit of the company for the financial year, after providing for income tax, amounted to $9,765
million. This resulted in an increase of the company’s retained earnings to $18,419 million, a 41%
increase on the previous figure of $13,054 million.
Other revenue of $7,5 million from sale of equipment was collected during the year as well as $1,5
million from the new service arm implemented by the company in May 2010.
Dividends
According to the financial year ended 30 June 2009, as declared by the directors in last year’s
directors report a dividend of 10.00 cents per share, fully franked at 30%, was paid to the holders of
shares on 10 October 2009.
As for this year, a final dividend of 20.00 cents per share, fully franked at 30%, has been declared to
be taken out of this year’s profit, but has not been paid yet nor any date supplied.
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Director’s Report (continued)
Ordinary shares
In May 2004, the company issued 6 million shares at a cost of $2.50 each. A final call was made on
these shares of $0.50 per share in October 2009, with all the money received by December 2009.
As at 30 June 2010 2009 Note $000’s $000’s
PMA Limited - Ordinary Shares Number of shares issued ............................................................................... 6 000 6 000 Amount paid for shares ................................................................................. $ 2.50 $2.00 Amount unpaid for shares ............................................................................. - 0.50
On the 15 September 2010, the company announced plans to raise capital via an issue of 2 million
ordinary shares at $4.50 per share. A prospectus will be released by the 31 October 2010.
Indemnity and Insurance to officers and auditors
Over the course of the financial year, the company has paid an insurance premium for the directors,
executive officers, company secretary, all named above, of the company and any subsidiaries against
a liability ‘incurred as such a director, secretary or executive officer to the extent permitted by the
Corporations Act 2001’ (Deloitte 2009, p. 9)
Disclosure of the nature of the liability and the premium amount paid cannot be released under the
circumstances of the insurance contract.
During the financial year, the company has not indemnified an auditor, or officer of the company, or
any subsidiaries bodies, against a liability that happened as such an auditor or officer.
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Director’s Report (continued)
Review of Operations
The most significant activity during the year has been the implementation of a new service arm. The
services offered by this arm consist of servicing and repairing products manufactured in the existing
arm of the company. This new activity has generated extra revenue for the year which amounted to
$1,5 million. The directors are very confident on expanding this new venture and generating more
profit in the coming years.
The company holds a strong financial position. The extra revenue of the new service only reflects 2
months of the financial year presented in this annual report. The forecast revenue of this new arm of
the business could generate up to $9 million, based on the 2 months figures.
Another one of the director’s strategies is to raise the capital via an issue of 2 million shares at $4.50
each. The newly generated capital of $9 million would be used to acquire other businesses and to
retire debt.
Changes in state of affairs
Other than those disclosed in this report, or in the financial statements, there are no significant
changes in the state of affairs of the company during the financial year.
Significant events after year end
Other than those disclosed in this report, or in the financial statements, the company, and its
directors are not aware of any matter or circumstance which has arisen since the end of the financial
year, which has significantly affected or may significantly affect the operations of the consolidated
entity, the results of those operations or the state of affairs of the company in subsequent financial
years.
Likely Developments Business Strategies and Future Prospects
In the medium term, the Company will continue to grow through developing the new service and
repair arm of the business. Refer to section ‘review of operations’ of this director’s report for further
information.
Also, as mentioned in the same section, the directors of the company are planning on acquiring
other businesses which will have a positive impact on the Company’s financials.
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Director’s Report (continued)
Remuneration report
Remuneration of directors and senior management:
The total remuneration package comprises of options of shares and fixed remuneration. The key
standards for composing the package take into account the market competition, so the highly skilled
executives can be attracted and retained within PMA Limited.
Share options granted to directors and senior management
The directors and the five highest remunerated officers of PMA limited have been granted shares, as
part of their remuneration packages during the course of the year and until the release of this
report:
Year Ending 30 June 2010 2009 Note Shares Shares
Ordinary Shares granted to Directors and Senior Management P. Paterson ..................................................................................................... 150 000 - H. P. Boak ....................................................................................................... 100 000 - I. B. Man ......................................................................................................... 35 000 - B. R. Lee .......................................................................................................... 35 000 - P. G. Howard .................................................................................................. 5 000 -
Total Ordinary Shares granted to Directors and Senior Management ........ 325 000 -
Fixed remuneration:
In respect of the financial year report, this information cannot be completed due to a lack of
accurate information at the end of the financial year and after, until the release of this report for
PMA Limited.
Year Ending 30 June 2010 2009 Note $000’s $000’s
Fixed Remuneration of Directors and Senior Management P. Paterson ..................................................................................................... 100 80 H. P. Boak ....................................................................................................... 85 75 I. B. Man ......................................................................................................... 50 45 B. R. Lee .......................................................................................................... 50 45 P. G. Howard .................................................................................................. 35 30
Total Fixed Remuneration of Directors and Senior Management .............. 320 275
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Director’s Report (continued)
Environmental regulations
The company maintains management systems for the environment that are consistent with
recognised internationally standards to help ensure that its facilities operate to those standards to
help protect the environment.
Also, the consolidated entity’s environmental obligations and waste discharge quotas are regulated
under applicable Australian laws. All environmental obligations are monitored by the Directors and
subjected here and then to government agency audits and site inspections.
The consolidated entity also focus on minimising the environmental impact of its operations by
recycling waste paper, oil, glass and other materials and by the responsible management and
disposal of all product packaging.
The Environmental Protection Authority has not notified PMA limited of any environmental breaches
in the Australian Capital Territory, Australia, in relation to the Company’s operations during the year
ended 30 June 2010.
This report is made in accordance with a resolution of the directors.
Andrew Cole
Andrew Cole
Chairman
Canberra, 19 August 2010
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Directors’ Declaration
The directors of PMA Limited (‘the Company’) declare that:
a) The financial statements, notes and director’s report are in accordance with the corporation
Act 2001 which state that:
The company must give a true and fair view of the performance and financial
position of PMA Limited at the financial year ending the 30 June 2010.
The company must comply with the Australian Accounting Standard, the
International Financial Reporting Standard and the Corporation regulation 2001.
b) There are reasonable grounds to believe that the company will be able to pay its debts as
and when they become due and payable (Deloitte 2010, p.24)
There are reasonable grounds to believe that the company will be able to meet any obligations or
liabilities to which they are or may become subject to by virtue of the deed of cross guarantee by
reference to ASIC Class Order 98/1418. (Deloitte 2010, p.24)
Signed in accordance with resolution of the directors.
Andrew Cole Patricia Paterson
Andrew Cole Patricia Paterson
Chairman CEO
Canberra, 30 September 2010
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Independent Auditor’s Report
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Independant Auditor’s Report (continued)
The financial notes below form part of these statements.
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Statement of Comprehensive Income
For the year ended 30 June 2010
Year ended 30 June 2010 2009 Note $000’s $000’s
Income ......................................................................................................... 3 82 250 - Expenses ...................................................................................................... 4 (67 700) - Loss on Sale of Equipment ........................................................................... 5 (600)
Profit before income tax expense ............................................................ 13 950 -
Income tax expense ....................................................................................... (4 185) -
Profit for the year ................................................................................... 9 765 -
Other Comprehensive Income ....................................................................... - -
Total Comprehensive Income for the Year ............................................... 9 765 -
The financial notes below form part of these statements.
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Statement of Financial Position
As at 30 June 2010
As at 30 June 2010 2009 Note $000’s $000’s
Current assets Cash and Cash Equivalents ............................................................................. 515 - Trade and Other Receivables ....................................................................... 6 32 225 - Inventories ..................................................................................................... 9 590 -
Total Current Assets ....................................................................................... 42 330 -
Non-current Assets Property, Plant and Equipment ................................................................... 7 23 850 - Intangible Assets .......................................................................................... 8 5 900 -
Total Non-current Assets ............................................................................... 29 750 -
Total assets ............................................................................................. 72 080 -
Current Liabilities Trade and Other Payables ............................................................................ 9 11 250 - Current Tax Liabilities..................................................................................... 4 185 - Damages Payable ........................................................................................... 200 Provisions ................................................................................................... 10 1 773 Final Dividend Payable ................................................................................... 1 200 -
Total Current Liabilities .................................................................................. 18 608 -
Non-current Liabilities Borrowings ..................................................................................................... 15 000 - Provisions ................................................................................................... 11 1 118
Total Non-current Liabilities .......................................................................... 16 118 -
Total liabilities ........................................................................................ 34 726 -
Net assets ............................................................................................... 37 354 -
Equity Share capital ................................................................................................... 14 985 - Reserve ....................................................................................................... 11 3 950 - Retained earnings .......................................................................................... 18 419 -
Total equity ............................................................................................ 37 354 -
The financial notes below form part of these statements.
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Statement of Changes in Equity For the year ended 30 June 2010
Share Capital
Reserve Retained Earnings
Total
Note $000’s $000’s $000’s $000’s
Balance as at 1 July 2008 ................................ 11 985 750 13 654 25 789 Comprehensive Income ..................................... - - - - Share call received ............................................. - - - - Dividend ......................................................... 12 - - (600) - Transfers ............................................................ - - - -
Balance as at 30 June 2009 11 985 750 13 054 25 789
Balance as at 1 July 2009 ................................ 11 985 750 13 054 25 789 Total Comprehensive Income ............................ - - 9 765 9 765 Share call received ............................................. 3 000 - - 3 000 Dividend ......................................................... 12 - - (1 200) (1 200) Transfers ............................................................ - 3 200 (3 200) -
Balance as at 30 June 2010 ............................. 14 985 3 950 18 419 37 354
The above Statement of Changes in Equity should be read in conjunction with notes 11 and 13.
The financial notes below form part of these statements.
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Statement of Cash Flow
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Notes to the Financial Statements
1. General Information AASB101 paragraph 138
AASB101 paragraph 46a
Professional Manufacturing Australia Limited (‘the Company’) is a public company incorporated and
operating independently in Australia.
The company’s registered office and its principal place of business are as follows:
Registered Office
12 Chandler St,
Belconnen
ACT 2617
Australia
Principal place of business
Heard Street
Mawson
ACT 2607
Australia
The company’s principal activities are the manufacturing and retailing of agricultural implements. In
May 2010 the business decided to pursue a new arm of the business, service and repair, to
supplement the existing business.
The company is required to prepare financial reports in accordance with Part 2M.3 of the
Corporations Act, and is a reporting entity.
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Notes to the Financial Statements (continued)
2. Statement of Significant Accounting Policies AASB101 paragraph 117
These general purpose financial statements have been prepared in accordance with Australian
Accounting Standards, in particular:
AASB 5 Non-current Assets held for Sale and Discontinued Operations;
AASB 7 Financial Instruments: Disclosures;
AASB 101 Presentation of Financial Statements;
AASB 102 Inventories;
AASB 107 Cash Flow Statements;
AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors;
AASB 112 Income Taxes;
AASB 116 Property, Plant and Equipment;
AASB 118 Revenue;
AASB 121 The Effects of Changes in Foreign Exchange Rates;
AASB 137 Provisions, Contingent Liabilities and Contingent Assets;
AASB 138 Intangible Assets; and
AASB 139 Financial Instruments: Recognition and Measurement.
As well as the Framework for the Preparation and Presentation of Financial Standards.
These statements comply with the requirements of the IFRSs.
Statement of Compliance
AASB 101 paragraph 114 (a)
‘This financial report is a general purpose financial report prepared in accordance with the requirements of the Australian Corporations Act 2001 and Accounting Standards applicable in Australia. This financial report also complies with Accounting Standards and Interpretations published by the International Accounting Standards Board’ (Telstra annual report 2009). Basis of Preparation
AASB 101 paragraph 16
‘The financial report has been prepared on the basis of historical cost, except for the revaluation of
certain non-current assets and financial instruments. Cost is based on the fair values of the
consideration given in exchange for assets. All amounts are presented in Australian dollars, unless
otherwise noted’ (Deloitte report 2009) and are rounded to the nearest thousand dollars.
AASB set out accounting policies that would generate a sum of information being reliable and
relevant contained in the financial report.
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Notes to the Financial Statements (continued)
2. Statement of Significant Accounting Policies (continued)
Summary of Accounting Policies AASB 101 paragraph 117
a. Income tax
Income tax is the current tax payable on the taxable income of the year ending 30 June 2010 b. Inventories
Inventories are measured at the lower cost or net realisable value. c. Property, Plant and Equipment
Items of property, plant and equipment are carried out at cost or fair value less accumulated
depreciation and impairment losses.
An annual revision and assessment of the carrying amount ensure residual value and useful life are
up to date.
Fixed assets are depreciated using the straight line method over its expected useful life and the rates
are as follow:
Rate Years
Buildings ......................................................................................................... 2.5% Equipment ...................................................................................................... 4 The Gain or loss on disposal of items of property, plant and equipment is determine by comparing carrying amount against proceeds from the sale and is included in the statement of comprehensive income. d. Intangible assets
Goodwill: ‘Goodwill represents the difference between the cost of acquisition and the fair value of the net identifiable asset required’ (Qantas Airways Limited 2009) Patent: at cost and net of amortisation / depreciation, without a specific period of time. e. Financial instruments
Ensure that PMA Limited will be able to continue as a going concern.
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Notes to the Financial Statements (continued)
2. Statement of Significant Accounting Policies (continued)
f. Employee benefits
‘Liabilities for employee benefits for wages, salaries, annual leave and sick leave vesting to employee
expected to be settled within 12 months of the end represent present obligations resulting from
employees services provided to balance date’ (Qantas Airways Limited 2009).
Contributions are made by the company to an employee superannuation fund.
‘Provision has been recognised for employee benefits relating to long service leave. In calculating the
present value of future cash outflow, the probability of long service leave being taken is based on
historical data’. (Canberra Raiders Leagues Club (Southside) Limited 2009)
g. Payable
‘Liabilities for trade creditors and other amount payable are carried at cost’. (Qantas Airways Limited 2009) h. Provisions
Provisions are put together when an entity has obligations, resulting from past events, for which there is a probability of a cash outflow. The measurement of outflow must be reliable. i. Cash and cash equivalents
‘Cash and cash equivalents include cash on hand, deposits held at call with banks and bank overdrafts’. (Canberra Raiders Leagues Club (Southside) Limited 2009) j. Revenue recognition
Revenue from the sale of goods, revenue from the rendering of services and revenue from interest are recognised for the entity. ‘Revenue from the sale of goods and services are recognised upon delivery of goods and services to customers’. (Canberra Raiders Leagues Club (Southside) Limited 2009) ‘Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount’ (Deloitte 2009). k. Good and service tax (GST)
It is assumed that all revenue, expenses and assets are recognised net of GST.
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Notes to the Financial Statements (continued)
3. Income AASB 101 paragraph 81
AASB 178 paragraph 35b
Year ended 30 June 2010 2009 Note $000’s $000’s
Sales Revenue ......................................................................................... 80 650 -
Other revenue/income Service and repair revenue ............................................................................ 1 500 Interest ........................................................................................................... 100
Total Other revenues/income ................................................................. 1 600 -
Total Income ........................................................................................... 82 250 -
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Notes to the Financial Statements (continued)
4. Analysis of Expenses AASB 101 paragraph 97
Year ended 30 June 2010 2009 Note $000’s $000’s
Costs of Sales .......................................................................................... 50 500 - Administration Expense Printing, Postage and Stationary.................................................................... 350 - Insurance ........................................................................................................ 515 -
Total Administration Expense .................................................................. 865 -
Employee Benefit Expense Salaries and Wages ........................................................................................ 5 100 - Employee Benefits ......................................................................................... 520 -
Total Employee Benefit Expense 5 620 -
Finance Costs Auditors ...................................................................................................... 14 90 - Doubtful Debts ............................................................................................... 250 - Interest Expense on Loan ............................................................................... 350 -
Total Finance Costs ................................................................................. 690 -
Occupancy Expense Retail Outlets Rent ......................................................................................... 1 500 - Electricity........................................................................................................ 900 - Repairs ........................................................................................................... 600 - Depreciation – Buildings ................................................................................ 250 -
Total Occupancy Expense ........................................................................ 3 250 -
Warrantee Expense ................................................................................. 2 100 -
Other Expense Depreciation – Equipment ............................................................................. 900 - Expense for Legal Case ................................................................................... 550 - Auditors (Non-Auditing Services) ............................................................... 14 90 - Other .............................................................................................................. 3 135
Total Other Expense ................................................................................ 4 675 -
Total Expense ......................................................................................... 67 700 -
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Notes to the Financial Statements (continued)
5. Sale of Equipment AASB 101 paragraph 98 c
As at 30 June 2010 2009 Note $000’s $000’s
Equipment At Cost ............................................................................................................ 20 000 - Accumulated depreciation ............................................................................. (11 900) -
Carrying amount ............................................................................................ 8 100 -
Carrying amount ............................................................................................ (8 100) - Proceed from sale .......................................................................................... 7 500 -
Gain / (Loss) ................................................................................................... (600) -
To record the disposal of a non-current asset with an historic cost of $20 million which generated a
sale of $7,5 million, but a loss of $600 000 against the carrying amount.
6. Analysis of Trade and Other Receivables AASB 101 paragraph 78 b
As at 30 June 2010 2009 Note $000’s $000’s
Receivables from trade customers Accounts Receivable ...................................................................................... 32 900 - Less: Allowance for Doubtful Debts ............................................................... (740) -
Total Receivables from trade customers .................................................. 32 160 -
Prepayments Prepaid Insurance .......................................................................................... 65 -
Total Prepayments .................................................................................. 65 -
Total Trade and other receivables ........................................................... 32 225 -
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Notes to the Financial Statements (continued)
7. Analysis of Property, Plant and Equipment AASB 101 paragraph 54 a
As at 30 June 2010 2009 Note $000’s $000’s
Land
At Cost ............................................................................................................ 11 500 -
Equipment At Cost ............................................................................................................ 4 500 - Accumulated depreciation ............................................................................. (900) -
3 600 -
Buildings At Cost ............................................................................................................ 10 000 - Accumulated depreciation ............................................................................. (1 250) -
8 750 -
Total property, plant and equipment ........................................................... 23 850 -
8. Analysis of Intangible Assets AASB 101 paragraph 54 c
As at 30 June 2010 2009 Note $000’s $000’s
Patent ............................................................................................................. 3 900 - Goodwill ......................................................................................................... 2 000 -
Total Intangible Assets ............................................................................ 5 900 -
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Notes to the Financial Statements (continued)
9. Analysis of Trade and other Payables AASB 101 paragraph 54 h
As at 30 June 2010 2009 Note $000’s $000’s
Accounts Payable ........................................................................................... 10 900 - Interest Accrued ............................................................................................. 350 -
Total Trade and other receivables ........................................................... 11 250 -
10. Analysis of Provisions AASB 101 paragraph 78 d
As at 30 June 2010 2009 Note $000’s $000’s
Current Provisions Provision for Legal Case ................................................................................. 500 - Provision for Warrantees ............................................................................... 450 - Provision for Employee Benefits .................................................................... 823 -
Total Current Provisions .......................................................................... 1 773 -
Non-Current Provisions Provision for Warranties ................................................................................ 1 050 - Provision for Employee Benefits .................................................................... 68 -
Total Non-Current Provisions .................................................................. 1 118 -
Total Provisions ...................................................................................... 2 891 -
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Notes to the Financial Statements (continued)
11. Reserve AASB 101 paragraph 79 b
The company holds only one category of Reserve, that of General Reserve.
General Reserve is made up of undistributed profit, and is held to fund future expansion and to meet
future liabilities.
12. Analysis of Distributions AASB 101 paragraph 107
Year Ending 30 June 2010 2009 Note $000’s $000’s
Distributions ................................................................................................... 1 200 - Per Share ($) ................................................................................................... 0.20 -
13. Share Capital AASB101 paragraph 79 a
AABS101 paragraph 22 f
Ordinary Shares As at 30 June 2010 2009 Note 000’s 000’s
Authorised Shares .......................................................................................... 6 000 6 000 Fully Paid ........................................................................................................ 6 000 - Not Fully Paid ................................................................................................. - 6 000
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Notes to the Financial Statements (continued)
14. Auditor AASB 101 paragraph Aus138.1
The company and these Financial Reports have been audited by:
Mickael Renou
Director
ABC Accounting
Canberra, ACT
ABC Accounting was paid the following amounts by the company:
Year Ending 30 June 2010 2009 Note $000’s $000’s
Audit Services ................................................................................................. 90 - Non-Audit Services ......................................................................................... 90 -
Total Payments ....................................................................................... 180 -
15. Non-adjusting events after the reporting date AASB 110 paragraph 22(d)
A non-adjusting event (fire) that occurred on the 5th of July 2010 had generated a damage totalling
$1,25 million. The insurance will only cover 50% of the damage.
16. Adjusting events after the reporting date AASB 110 paragraph 9(a)
PMA Limited, which was involved in a legal dispute with one of its supplier settled out of court on
29th of July 2010 and agreed to compensate for an amount of $200 000 on the 1st of October 2010.
An amendment to the provision for legal case has been added to the financial statements.
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Notes to the Financial Statements (continued)
17. Contingent Liabilities AASB 137 paragraph 27 / 86
A provision of $500 000 for a legal case has been put together as a claim had been lodged on the 28th
of June 2010, but only advised on the 10th of August 2010 by PMA Limited’s lawyer. The lawyer
advised again, there was 70% chance of the company being found guilty. An amendment to the
provision for legal case has been added to the financial statements.
18. Non-Financial Disclosures AASB 101 paragraph 114 d ii
AASB 7
Financial Risk Management Policies
The company’s financial instruments consist mainly of deposits with bank, accounts receivable,
accounts payable and loans. The company does not have any derivative instruments as at 30 June
2010’. (Canberra Raiders Leagues Club (Southside) Limited 2009)
Financial Risk Exposures and Management
Liquidity Risk
‘The company manages liquidity risk by monitoring forecast and actual cash flows’ (Canberra Raiders
Leagues Club (Southside) Limited 2008). Cash flows are expected to increase over the next financial
year.
Credit Risk
The company has not issued any loans or material lines of credit and is therefore not exposed to any
material credit risk. The accounts receivable are expected to be paid during the next financial year,
and an Allowance for Doubtful Debts has been established against non-payment of same.
Interest Rate Risk
While the company does have significant lending, and is therefore exposed to any fluctuations in the
interest rate, this is considered an acceptable risk. The company plans to pay off its lending over the
next 12 months, through a share issue and increased revenue from new services.
- 32 -
Notes to the Financial Statements (continued)
19. Capital AASB 101 paragraph 134
‘The directors control the capital of the company in order to maintain a good debt to equity ratio
and to ensure that the company can fund its operations and continue as a going concern. There have
been no changes in the strategy since last year.’ (Canberra Raiders Leagues Club (Southside) Limited
2008)
As at 30 June 2010 2009 Note $000’s $000’s
Debt ................................................................................................................ 15 000 - Cash and cash equivalents ............................................................................. (515) -
Net Debt ................................................................................................. 14 485 -
Equity ............................................................................................................. 37 354 -
Net debt to Equity ratio .......................................................................... 38% -
- 33 -
References
Australian National Audit Office 2009, Annual Report 2008-2009, Retrieved January 19 2010, from
<http://www.anao.gov.au/annualreport_08-09/pdf/ANAO_AR_0809_whole.pdf>
Australian United Investment Company Limited 2009, Corporate Governance Statement, Retrieved
on January 25 2010, from
<http://www.aui.com.au/resources/Corporate%20Governance/Corporate%20Governance%20State
ment%20-%20Website%2024.9.09.pdf>
Avoca Resources Limited 2009, 2009 Annual Report, Retrieved January 19 2010, from
<http://www.avocaresources.com.au/downloads/company_reports/annual/avo_ar2009-7.pdf>
Canberra Raiders Leagues Club (Southside) Limited 2008, Financial Report for the year ended 31
October 2008, Retrieved January 20 2010, from
<http://www.mawsonclub.com.au/documents/2009AnnualReport.pdf >
Canberra Raiders Leagues Club (Southside) Limited 2009, Financial Report for the year ended 31
October 2009, Retrieved January 23 2010, from
<http://www.mawsonclub.com.au/documents/2010AnnualReport.pdf >
Coca Cola Amatil 2009, Annual Report 2009, Retrieved January 19 2010, from
<http://ar08.reports.ccamatil.com.au/ind_auditors_report.php>
Ngiam, J & Shying, M (eds) 2009, CPA Australia Accounting Handbook 2009, Pearson Education
Australia, Melbourne, VIC.
Qantas Airways Limited 2009, Financial Report for the year ending 30 June 2009, Retrieved 20
January 2010,
<http://annualreport.qantas.com.au/assets/pdfs/QantasFinancialReport200901DirectorsReport.pdf
>
TT-Line Company Pty Ltd 2009, Annual Report 2008-2009, Retrieved January 19 2010, from
<http://www.spiritoftasmania.com.au/dms/sot/documents/annual-report-
0809/Annual%20Report%2008-09.pdf>
- 34 -
Appendix A - Calculations
$000’s $000’s
(a) Oct-09 Final Call 3 000
Share Capital
3 000
6,000,000 shares x $0.50
Dec-09 Cash
3 000
Share Capital
3 000
Money received for final call
(c)
Depreciation on Building Expense
$10,000,000 x 2.5% = $250,000
Depreciation on Equipment Expense - Useful life 5 years
Carrying Amount 09 $4,500,000
Carrying Amount 10 $3,600,000 = $900,000
Accum'd Dep'n 11 900
Proceeds from sale 7 500
Loss on Disposal 600
Equipment at Cost
20 000
Accounting for the disposal of equipment
(e)
Interest Expense 350
Interest Accrued
350
($15,000,000 x 7%) x (12/4 months)
(f) 29/06 Retained Earnings 1 200
Final Dividend Payable
1 200
6,000,000 shares x $0.20
- 35 -
Appendix A – Calculations (continued)
$000’s $000’s
Retained Earnings 3 200
General Reserve
3 200
Money transfer
Operating Results (refer to Directors Report):
Retained Earnings
(18419 - 13054) / 13054 = 41.09% rounded to 41%
(i)
Expense for Legal Case 500
Provision for Legal Case
500
Recognising possible court case settlement
(j)
Expense for Legal Case 50
Provision for Legal Case 150
Damages Payable
200
Recognising court case settlement
Calculations for Provisions (refer to Note 10):
Warrantees
$1,500,000 x 30% = $450,000 -- current liability
$1,500,000 - $450,000 = $1,050,000 -- non-current liability
Employee Benefits
Long service leave = $38,000 (1/7/09) + $30,000 (2010 expense) = $68,000