CaseWare Australia & New Zealand Large General Purpose Company

Transcription

1 CaseWare Australia & New Zealand Large General Purpose Company Financial Statements Disclaimer: These financials include illustrative disclosures for a large proprietary company who is a reporting entity and is not intended to be and is not comprehensive in relation to its subject matter. This document is not a substitute for reading technical pronouncements relating to the preparation of financial statements. To the extent permitted by law, CaseWare Australia and New Zealand, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences arising from the reliance on the information contained in this document or for any decisions based on it.

2 Contents Financial Statements Directors' Report 1 Auditors Independence Declaration under Section 307C of the Corporations Act Statement of Profit or Loss and Other Comprehensive Income 4 Statement of Financial Position 5 Statement of Changes in Equity 6 Statement of Cash Flows 7 8 Directors' Declaration 30 Independent Audit Report 31 Page

3 Directors' Report 30 June The directors present their report on CaseWare Australia & New Zealand Large General Purpose Company for the financial year ended 30 June. Information on directors The names of each person who has been a director during the year and to the date of this report are: Andrew Ball Jeremy Smith Anthony Locke Sarah McBride Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. Principal activities The principal activity of CaseWare Australia & New Zealand Large General Purpose Company during the financial year was the manufacture and retail of safety clothes and equipment in Australia. No significant changes in the nature of the Company's activity occurred during the financial year. Operating results and review of operations The profit of the Company after providing for income tax amounted to 2,420,496 (: 2,297,899). This was as a result of increased sales during the year arising from the introduction of new product lines and improved marketing campaigns. The cash balance of the company also increased during the year which improves the liquidity and an increase in the net assets to 27.4m put the company in a strong financial position. Dividends paid or recommended No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has been made. Significant changes in state of affairs There have been no significant changes in the state of affairs of the Company during the year. Events after the reporting date No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in future financial years. Environmental issues The Company's operations are not regulated by any significant environmental regulations under a law of the Commonwealth or of a state or territory of Australia. Indemnification and insurance of officers and auditors No indemnities have been given or insurance premiums paid, during or since the end of the financial year, for any person who is or has been an officer or auditor of CaseWare Australia & New Zealand Large General Purpose Company. 1

4 Directors' Report 30 June Auditor's independence declaration The lead auditor's independence declaration in accordance with section 307C of the Corporations Act 2001 for the year ended 30 June has been received and can be found on page 3 of the financial report. Signed in accordance with a resolution of the Board of Directors: Director:... Andrew Ball Director:... Jeremy Smith Dated 30 September 2

5 Auditors Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of CaseWare Australia & New Zealand Large General Purpose Company I declare that, to the best of my knowledge and belief, during the year ended 30 June, there have been: (i) (ii) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit. ABC Auditors A N Auditor 30 September Melbourne 3

6 Statement of Profit or Loss and Other Comprehensive Income Sales revenue 4 63,489,011 61,811,141 Cost of sales (28,083,270) (28,108,215) Gross profit 35,405,741 33,702,926 Other income 4 2,691,313 2,859,676 Distribution costs (969,050) (1,131,998) Marketing expenses (1,433,103) (1,511,700) Occupancy costs (3,644,894) (3,511,448) Administrative expenses (27,866,368) (27,006,672) Finance costs (426,402) (218,145) Profit before income tax 3,757,237 3,182,639 Income tax expense 6 (1,336,741) (884,740) Profit for the year 2,420,496 2,297,899 Items that will be reclassified to profit or loss when specific conditions are met Net fair value movements for available-for-sale financial assets (31,582) 75,059 Other comprehensive income for the year, net of tax (31,582) 75,059 Total comprehensive income for the year 2,388,914 2,372,958 Note The accompanying notes form part of these financial statements. 4

7 Statement of Financial Position 30 June ASSETS CURRENT ASSETS Cash and cash equivalents 7 898,607 71,852 Trade and other receivables 8 4,398,253 5,819,281 Inventories 9 18,829,121 17,124,965 Other assets 13 1,466,452 1,278,930 TOTAL CURRENT ASSETS 25,592,433 24,295,028 NON-CURRENT ASSETS Financial assets , ,131 Property, plant and equipment 11 4,924,982 5,736,395 Deferred tax assets , ,902 Intangible assets 12 1,793,285 2,151,518 TOTAL NON-CURRENT ASSETS TOTAL ASSETS Note 7,840,998 8,859,946 33,433,431 33,154,974 LIABILITIES CURRENT LIABILITIES Trade and other payables 14 1,732,349 3,712,433 Borrowings 15 1,458,706 2,151,102 Current tax liabilities 830, ,742 Employee benefits 17 1,770,775 1,760,104 Other financial liabilities 16 45,490 9,637 TOTAL CURRENT LIABILITIES 5,837,561 7,948,018 NON-CURRENT LIABILITIES Employee benefits , ,510 TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS 233, ,510 6,071,071 8,181,528 27,362,360 24,973,446 EQUITY Issued capital 18 3,259,673 3,259,673 Reserves 190, ,678 Retained earnings 23,912,591 21,492,095 TOTAL EQUITY 27,362,360 24,973,446 The accompanying notes form part of these financial statements. 5

8 Statement of Changes in Equity Ordinary Shares Retained Earnings Financial Assets Reserve Balance at 1 July 3,259,673 21,492, ,678 24,973,446 Profit or loss attributable to members of the parent entity - 2,420,496-2,420,496 Fair value adjustment on Available-for-sale investments - - (31,582) (31,582) Balance at 30 June 3,259,673 23,912, ,096 27,362,360 Total Balance at 1 July ,259,673 19,194, ,619 22,600,488 Profit or loss attributable to members of the parent entity - 2,297,899-2,297,899 Fair value adjustments on Available-for-sale investments ,059 75,059 Balance at 30 June 3,259,673 21,492, ,678 24,973,446 The accompanying notes form part of these financial statements. 6

9 Statement of Cash Flows Note CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers 67,203,841 63,266,639 Payments to suppliers and employees (64,209,173) (60,982,257) Interest received 27,711 72,661 Interest paid (426,402) (218,145) Income taxes paid (821,242) (1,005,533) Net cash provided by (used in) operating activities 28 1,774,735 1,133,365 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of plant and equipment 187,855 51,226 Payment for intangible asset (2,939) - Purchase of property, plant and equipment (440,500) (144,998) Net cash used by investing activities (255,584) (93,772) CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of borrowings (692,396) (1,102,165) Net cash used by financing activities (692,396) (1,102,165) Net increase (decrease) in cash and cash equivalents held 826,755 (62,572) Cash and cash equivalents at beginning of year 71, ,424 Cash and cash equivalents at end of financial year 7 898,607 71,852 The accompanying notes form part of these financial statements. 7

10 The financial report covers CaseWare Australia & New Zealand Large General Purpose Company as an individual entity. CaseWare Australia & New Zealand Large General Purpose Company is a for-profit proprietary Company, incorporated and domiciled in Australia. The functional and presentation currency of CaseWare Australia & New Zealand Large General Purpose Company is Australian dollars. The financial report was authorised for issue by the Directors on 30 September. Comparatives are consistent with prior years, unless otherwise stated. 1 Basis of Preparation The financial statements are general purpose financial statements that have been prepared in accordance with the Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act These financial statements and associated notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. The financial statements have been prepared on an accruals basis and are based on historical costs modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. Significant accounting policies adopted in the preparation of these financial statements are presented below and are consistent with prior reporting periods unless otherwise stated. 2 Summary of Significant Accounting Policies (a) Income Tax The tax expense recognised in the statement of profit or loss and other comprehensive income comprises of current income tax expense plus deferred tax expense. Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (loss) for the year and is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates and laws that have been enacted or substantively enacted by the end of the reporting period. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred tax assets are recognised for all deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and losses can be utilised. Current and deferred tax is recognised as income or an expense and included in profit or loss for the period except where the tax arises from a transaction which is recognised in other comprehensive income or equity, in which case the tax is recognised in other comprehensive income or equity respectively. 8

11 2 Summary of Significant Accounting Policies continued (b) Leases Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor, are charged as expenses on a straight-line basis over the life of the lease term. (c) Revenue and other income Revenue is recognised when the amount of the revenue can be measured reliably, it is probable that economic benefits associated with the transaction will flow to the Company and specific criteria relating to the type of revenue as noted below, has been satisfied. Revenue is measured at the fair value of the consideration received or receivable and is presented net of returns, discounts and rebates. All revenue is stated net of the amount of goods and services tax (GST). Sale of goods Revenue is recognised on transfer of goods to the customer as this is deemed to be the point in time when risks and rewards are transferred and there is no longer any ownership or effective control over the goods. Interest revenue Interest is recognised using the effective interest method. Other income Other income is recognised on an accrual basis when the company is entitled to it. (d) Borrowing costs All borrowing costs are recognised as an expense in the period in which they are incurred. (e) Goods and Services Tax (GST) Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). Receivables and payable are stated inclusive of GST. The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payables in the statement of financial position. Cash flows in the statement of cash flows are included on a gross basis and the GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows. 9

12 2 Summary of Significant Accounting Policies continued (f) Inventories Inventories are measured at the lower of cost and net realisable value. Cost of inventory is determined using the first-in-first-out basis and is net of any rebates and discounts received. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the costs necessary to make the sale. Net realisable value is estimated using the most reliable evidence available at the reporting date and inventory is written down through an obsolescence provision if necessary. (g) Property, Plant and Equipment Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment of losses. Depreciation Property, plant and equipment, is depreciated on a straight-line basis over the assets useful life to the Company, commencing when the asset is ready for use. Leased assets and leasehold improvements are amortised over the shorter of either the unexpired period of the lease or their estimated useful life. The estimated useful lives used for each class of depreciable asset are shown below: Fixed asset class Useful life Buildings Plant and Equipment Furniture, Fixtures and Fittings Motor Vehicles Computer Equipment Leasehold improvements 6-25 years 7-11 years 4-10 years 5-12 years 5-7 years 8-12 years At the end of each annual reporting period, the depreciation method, useful life and residual value of each asset is reviewed. Any revisions are accounted for prospectively as a change in estimate. (h) Financial instruments Financial instruments are recognised initially using trade date accounting, i.e. on the date that Company becomes party to the contractual provisions of the instrument. On initial recognition, all financial instruments are measured at fair value plus transaction costs (except for instruments measured at fair value through profit or loss where transaction costs are expensed as incurred). Financial Assets Financial assets are divided into the following categories which are described in detail below: loans and receivables; and available-for-sale financial assets. 10

13 2 Summary of Significant Accounting Policies continued (h) Financial instruments continued All income and expenses relating to financial assets are recognised in the statement of profit or loss and other comprehensive income in the finance income or finance costs line item respectively. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers but also incorporate other types of contractual monetary assets. After initial recognition these are measured at amortised cost using the effective interest method, less provision for impairment. Any change in their value is recognised in profit or loss. The Company s trade and most other receivables fall into this category of financial instruments. Significant receivables are considered for impairment on an individual asset basis when they are past due at the reporting date or when objective evidence is received that a specific counterparty will default. The amount of the impairment is the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. In some circumstances, the Company renegotiates repayment terms with customers which may lead to changes in the timing of the payments, the Company does not necessarily consider the balance to be impaired, however assessment is made on a case-by-case basis. Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that do not qualify for inclusion in any of the other categories of financial assets or which have been designated in this category. The Company's available-for-sale financial assets include listed securities. Available-for-sale financial assets are measured at fair value, with subsequent changes in value recognised in other comprehensive income. Gains and losses arising from financial instruments classified as available-for-sale are only recognised in profit or loss when they are sold or when the investment is impaired. In the case of impairment or sale, any gain or loss previously recognised in equity is transferred to the profit or loss. Financial liabilities The Company s financial liabilities include borrowings, trade and other payables (including finance lease liabilities), which are measured at amortised cost using the effective interest rate method. Impairment of financial assets At the end of the reporting period the Company assesses whether there is any objective evidence that a financial asset or group of financial assets is impaired. 11

14 2 Summary of Significant Accounting Policies continued (h) Financial instruments continued Financial assets at amortised cost If there is objective evidence that an impairment loss on financial assets carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset s carrying amount and the present value of the estimated future cash flows discounted at the financial assets original effective interest rate. Impairment on loans and receivables is reduced through the use of an allowance accounts, all other impairment losses on financial assets at amortised cost are taken directly to the asset. Subsequent recoveries of amounts previously written off are credited against other expenses in profit or loss. Available-for-sale financial assets A significant or prolonged decline in value of an available-for-sale asset below its cost is objective evidence of impairment, in this case, the cumulative loss that has been recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment. Any subsequent increase in the value of the asset is taken directly to other comprehensive income. (i) Impairment of non-financial assets At the end of each reporting period the Company determines whether there is an evidence of an impairment indicator for non-financial assets. Where this indicator exists the recoverable amount of the asset is estimated. Where assets do not operate independently of other assets, the recoverable amount of the relevant cashgenerating unit (CGU) is estimated. The recoverable amount of an asset or CGU is the higher of the fair value less costs of disposal and the value in use. Value in use is the present value of the future cash flows expected to be derived from an asset or cashgenerating unit. Where the recoverable amount is less than the carrying amount, an impairment loss is recognised in profit or loss. Reversal indicators are considered in subsequent periods for all assets which have suffered an impairment loss. (j) Intangible Assets Software Software has a finite life and is carried at cost less any accumulated amortisation and impairment losses. It has an estimated useful life of between one and three years. Amortisation Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. 12

15 2 Summary of Significant Accounting Policies continued (j) Intangible Assets continued Amortisation continued Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. (k) Cash and cash equivalents Cash and cash equivalents comprises cash on hand, demand deposits and short-term investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. (l) Employee benefits Provision is made for the Company's liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be wholly settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits expected to be settled more than twelve months after the end of the reporting period have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy vesting requirements. Cashflows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cashflows. Changes in the measurement of the liability are recognised in profit or loss. Employee benefits are presented as current liabilities in the statement of financial position if the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date regardless of the classification of the liability for measurement purposes under AASB 119. Defined contribution schemes Obligations for contributions to defined contribution superannuation plans are recognised as an employee benefit expense in profit or loss in the periods in which services are provided by employees. (m) Provisions Provisions are recognised when the Company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions are measured at the present value of management's best estimate of the outflow required to settle the obligation at the end of the reporting period. The discount rate used is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the unwinding of the discount is taken to finance costs in the statement of profit or loss and other comprehensive income. (n) Adoption of new and revised accounting standards There were no new accounting standards adopted during the year which had a significant impact on the reported position of performance of the company. 13

16 2 Summary of Significant Accounting Policies continued (o) New Accounting Standards and Interpretations The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods. The Company has decided not to early adopt these Standards. The following table summarises those future requirements, and their impact on the Company where the standard is relevant: These are sample disclosures only and entities must review the list of latest standards for their application to the entity. For the latest standards, please visit Standard Name AASB 9 Financial Instruments and amending standards AASB / AASB / AASB / AASB -1 / AASB -7 / AASB-8 AASB 15 Revenue from contracts with customers and amending standards AASB -5 Effective date for entity Requirements Impact 30 June 2019 Significant revisions to the classification and measurement of financial assets, reducing the number of categories and simplifying the measurement choices, including the removal of impairment testing of assets measured at fair value. The amortised cost model is available for debt assets meeting both business model and cash flow characteristics tests. All investments in equity instruments using AASB 9 are to be measured at fair value. 30 June 2018 AASB 15 introduces a five step process for revenue recognition with the core principle of the new Standard being for entities to recognise revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the entity expects to be entitled in exchange for those goods or services. The available for sale investments held will be classified as fair value through OCI and will no longer be subject to impairment testing. Other impacts on the reported financial position and performance have not yet been determined. The changes in revenue recognition requirements in AASB 15 may cause changes to the timing and amount of revenue recorded in the financial statements as well as additional disclosures. The impact of AASB 15 has not yet been quantified. 14

17 3 Critical Accounting Estimates and Judgments The directors make estimates and judgements during the preparation of these financial statements regarding assumptions about current and future events affecting transactions and balances. These estimates and judgements are based on the best information available at the time of preparing the financial statements, however as additional information is known then the actual results may differ from the estimates. The significant estimates and judgements made have been described below. Key judgments - provision for impairment of receivables The value of the provision for impairment of receivables is estimated by considering the ageing of receivables, communication with the debtors and prior history. The value of the provisional and credit quality of receivables in monitored on a monthly basis. Key judgments - provision for inventories At the year end management do not believe there is any need for an obsolescence provision for inventory. The inventory held is reviewed on a monthly basis to determine whether there is any old, damaged or obsolete stock or any other stock items which need to be written down to NRV. 4 Revenue and Other Income Sales revenue - sale of goods 63,489,011 61,811,141 Other Income Finance income 27,711 72,661 Other income 2,663,602 2,787,014 2,691,313 2,859,675 5 Result for the Year Expenses Interest expense on financial liabilities not at fair value through profit or loss: bank loans 426, ,145 15

18 6 Income Tax Expense (a) The major components of tax expense (income) comprise: Current tax expense Local income tax - current period 1,336, ,740 (b) Reconciliation of income tax to accounting profit: Prima facie tax payable on profit from ordinary activities before income tax at 30% (: 30%) 1,127, ,792 Add: Tax effect of: - non-deductible expenses 180,916 84,647 - changes in recognised temporary differences 28,654 - Less: 1,336,741 1,039,439 Tax effect of: - tax incentives - 154,699 Income tax expense 1,336, ,740 Weighted average effective tax rate 36 % 27 % The increase in the weighted average effective tax rate for is a result of increased non-deductible expenses and changes in estimation of balances. (c) Income tax relating to each component of other comprehensive income: Before-tax Amount Tax (Expense) Benefit Net-of-tax Amount Before-tax Amount Fair value movement on availablefor-sale financial assets (31,582) 9,475 (22,107) 75,059 (22,578) 52,481 Tax (Expense) Benefit Net-of-tax Amount 16

19 7 Cash and cash equivalents Note Cash at bank and in hand 308,194 57,907 Short-term bank deposits 590,413 13, ,607 71,852 Reconciliation of cash Cash and Cash equivalents reported in the statement of cash flows are reconciled to the equivalent items in the statement of financial position as follows: Cash and cash equivalents 898,607 71,852 8 Trade and other receivables CURRENT Trade receivables 3,178,196 4,752,454 Provision for impairment (a) (45,889) (6,921) 3,132,307 4,745,533 Loans to directors, managers and employees 1,154, ,891 Other receivables 111,124 87,857 Total current trade and other receivables 4,398,253 5,819,281 (a) Impairment of receivables Reconciliation of changes in the provision for impairment of receivables is as follows: Balance at beginning of the year 6,921 21,569 Additional impairment loss recognised 158,413 29,068 Provision used (119,445) (43,716) Balance at end of the year 45,889 6,921 The carrying value of trade receivables is considered a reasonable approximation of fair value due to the short-term nature of the balances. 9 Inventories CURRENT At cost: Raw materials and consumables 624, ,504 Work in progress 119,954 97,292 Finished goods 17,923,662 16,211,903 Goods in transit 160, ,266 18,829,121 17,124,965 Write downs of inventories to net realisable value during the year were NIL (: NIL). 17

20 10 Other financial assets Note NON-CURRENT Available for sale financial assets (a) 499, ,131 (a) Available-for-sale financial assets comprise: NON-CURRENT Listed investments - shares in listed entities - fair value 499, , Property, plant and equipment Buildings At cost 3,646,400 3,619,410 Accumulated depreciation (1,887,801) (1,458,637) Total buildings 1,758,599 2,160,773 Plant and equipment At cost 3,414,732 3,353,848 Accumulated depreciation (2,023,294) (1,755,986) Total plant and equipment 1,391,438 1,597,862 Furniture, fixtures and fittings At cost 242, ,085 Accumulated depreciation (141,273) (125,856) Total furniture, fixtures and fittings 100,841 67,229 Motor vehicles At cost 432, ,239 Accumulated depreciation (294,828) (280,435) Total motor vehicles 137, ,804 Computer equipment At cost 1,850,791 1,672,709 Accumulated depreciation (1,269,764) (1,037,139) Total computer equipment 581, ,570 Leasehold Improvements At cost 1,221,126 1,202,053 Accumulated depreciation (266,047) (160,896) Total leasehold improvements 955,079 1,041,157 Total property, plant and equipment 4,924,982 5,736,395 18

21 11 Property, plant and equipment continued (a) Movements in carrying amounts of property, plant and equipment Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year: Buildings Plant and Equipment Furniture, Fixtures and Fittings Motor Vehicles Computer Equipment Leasehold Improvements Total Year ended 30 June Balance at the beginning of year 2,160,773 1,597,862 67, , ,570 1,041,157 5,736,395 Additions 26, ,340 49, ,068 19, ,500 Disposals - written down value - (82,456) - (81,413) (23,986) - (187,855) Depreciation expense (429,164) (267,308) (15,417) (14,393) (232,625) (105,151) (1,064,058) Balance at the end of the year 1,758,599 1,391, , , , ,079 4,924,982 Year ended 30 June Balance at the beginning of year 2,651,368 1,948,235 74, , ,783 1,124,467 6,929,746 Additions - 15,588 3, , ,004 Disposals - written down value (51,226) - (51,226) Depreciation expense (490,595) (365,961) (10,447) (53,954) (282,862) (83,310) (1,287,129) Balance at the end of the year 2,160,773 1,597,862 67, , ,570 1,041,157 5,736,395 19

22 12 Intangible Assets Computer software Cost 3,162,730 3,159,791 Accumulated amortisation (1,369,445) (1,008,273) Total Intangibles 1,793,285 2,151,518 (a) Movements in carrying amounts of intangible assets Computer software Year ended 30 June Balance at the beginning of the year 2,151,518 Additions 2,939 Amortisation (361,172) Closing value at 30 June 1,793,285 Year ended 30 June Balance at the beginning of the year 2,514,050 Amortisation (362,532) Closing value at 30 June 2,151, Other non-financial assets CURRENT Prepayments 661, ,780 Other current assets 804, ,150 1,466,452 1,278, Trade and other payables CURRENT Unsecured liabilities Trade payables 458,988 2,081,111 Operating lease payables 35, ,076 Sundry payables and accrued expenses 232, ,418 Royalties payable 998,040 1,175,151 Other payables 6,964 76,677 1,732,349 3,712,433 20

23 14 Trade and other payables continued All amounts are short term and the carrying values are considered to be a reasonable approximation of fair value. 15 Borrowings CURRENT Secured liabilities: Bank loans 1,458,706 2,151,102 Whilst the whole loan balance is classified as current in accordance with AASB 101 Presentation of Financial Statements, the directors expect that 400,000 of the balance will be repaid within 12 months in accordance with the loan agreement with the remainder being paid over the next 2-5 years. (a) Bank loans First Mortgage: - freehold land and buildings 1,500,000 1,500,000 The bank debt is secured by a registered first mortgage over certain freehold properties owned by the Company. Covenants imposed by the bank require total bank debt not to exceed 30% of total tangible assets, total liabilities not to exceed 20% of total tangible assets, and borrowing costs not to exceed 15% of EBIT. The financial assets pledged as collateral represent a floating charge and cannot be disposed of without consent of the financier. (b) Defaults and breaches During the current and prior year, there were no defaults or breaches on any of the loans. 16 Other Financial Liabilities CURRENT Deferred income 45,490 9, Employee Benefits Current liabilities Long service leave 562, ,894 Provision for employee benefits 1,208,414 1,163,210 1,770,775 1,760,104 Non-current liabilities Long service leave 233, ,510 21

24 18 Issued Capital 3,000,000 (: 3,000,000) Ordinary shares 3,259,673 3,259,673 (a) Ordinary shares No. No. At the beginning and end of the reporting period 3,000,000 3,000,000 The holders of ordinary shares are entitled to participate in dividends and the proceeds on winding up of the Company. On a show of hands at meetings of the Company, each holder of ordinary shares has one vote in person or by proxy, and upon a poll each share is entitled to one vote. The Company does not have authorised capital or par value in respect of its shares. (b) Capital Management The key objectives of the Company when managing capital is to safeguard its ability to continue as a going concern and maintain optimal benefits to stakeholders. The Company defines capital as its equity and net debt. There has been no change to capital risk management policies during the year. The Company manages its capital structure and makes funding decisions based on the prevailing economic environment and has a number of tools available to manage capital risk. These include maintaining a diversified debt portfolio, the ability to adjust the size and timing of dividends paid to shareholders and the issue of new shares. The Board monitors a range of financial metrics including return on capital employed and gearing ratios. A key objective of the Company's capital risk management is to maintain compliance with the covenants attached to the Company's debt. Throughout the year, the Company has complied with these covenants. 19 Reserves Financial asset reserve Change in the fair value of available for sale investments are recognised in other comprehensive income - financial asset reserve. Amounts are reclassified to profit or loss on disposal of the investment or when an impairment arises. 22

25 20 Capital and Leasing Commitments (a) Operating Leases Minimum lease payments under non-cancellable operating leases: - not later than one year 76,000 76,000 - between one year and five years 208, ,000 - later than five years 654, , ,000 1,004,000 Leases are for buildings used in regional areas and have terms ranging from 5 to 15 years. (b) Contracted Commitments CaseWare Australia & New Zealand Large General Purpose Company has placed an order for additional plant and machinery to be delivered in November. The cost of this equipment is 125, Financial Risk Management The Company is exposed to a variety of financial risks through its use of financial instruments. The Company s overall risk management plan seeks to minimise potential adverse effects due to the unpredictability of financial markets. The Company does not speculate in financial assets. The most significant financial risks to which the Company is exposed to are described below: Specific risks Liquidity risk Market risk - interest rate risk Credit risk Financial instruments used The principal categories of financial instrument used by the Company are: Trade receivables Cash at bank Investments in listed shares Trade and other payables Floating rate bank loans 23

26 21 Financial Risk Management continued Objectives, policies and processes Risk management is carried out by the Company s Board of Directors. The Finance Manager has primary responsibility for the development of relevant policies and procedures to mitigate the risk exposure of the Company, these policies and procedures are then approved by the Board. Reports are presented at each Board meeting regarding the implementation of these policies and any risk exposures which are appropriate for discussion by the whole Board. Specific information regarding the mitigation of each financial risk to which the Company is exposed is provided below. Liquidity risk Liquidity risk arises from the Company s management of working capital and the finance charges and principal repayments on its debt instruments. It is the risk that the Company will encounter difficulty in meeting its financial obligations as they fall due. The Company s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities as and when they fall due. The Company maintains cash and marketable securities to meet its liquidity requirements for up to 30- day periods. Funding for long-term liquidity needs is additionally secured by an adequate amount of committed credit facilities and the ability to sell long-term financial assets. The Company manages its liquidity needs by carefully monitoring scheduled debt servicing payments for long-term financial liabilities as well as cash-outflows due in day-to-day business. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on the basis of a rolling 30-day projection. Long-term liquidity needs for a 180-day and a 360-day period are identified monthly. At the reporting date, these reports indicate that the Company expected to have sufficient liquid resources to meet its obligations under all reasonably expected circumstances and will not need to draw down any of the financing facilities. The Company s liabilities have contractual maturities which are summarised below: within 12 months 1 to 2 years greater than 2 years Trade payables 1,732,349 3,712, Bank loans 1,458,706 2,151, Total 3,191,055 5,863,

27 21 Financial Risk Management continued Market risk (i) Interest rate risk The Company is exposed to interest rate risk as funds are borrowed at floating rates. The following table illustrates the sensitivity of the net result for the year and equity to a reasonably possible change in interest rates of +0.25% and -0.50% (: +0.25%/-1.00%), with effect from the beginning of the year. These changes are considered to be reasonably possible based on observation of current market conditions and economist reports. The calculations are based on the financial instruments held at each reporting date. All other variables are held constant % -0.50% +0.25% -1.00% Net results (10,551) 21,023 (19,981) 79,924 Equity (10,511) 21,023 (19,981) 79,924 Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposure to customers, including outstanding receivables and committed transactions. The Company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. The utilisation of credit limits by customers is regularly monitored by line management. Customers who subsequently fail to meet their credit terms are required to make purchases on a prepayment basis until creditworthiness can be re-established. Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable. The Board receives monthly reports summarising the turnover, trade receivables balance and aging profile of each of the key customers individually and the Company's other customers analysed by industry sector as well as a list of customers currently transacting on a prepayment basis or who have balances in excess of their credit limits. Management considers that all the financial assets that are not impaired for each of the reporting dates under review are of good credit quality, including those that are past due. The credit risk for liquid funds and other short-term financial assets is considered negligible, since the counterparties are reputable banks with high quality external credit ratings. The Company has no significant concentration of credit risk with respect to any single counterparty or group of counterparties. The class of assets described as 'trade and other receivables' is considered to be the main source of credit risk related to the Company. 25

28 21 Financial Risk Management continued The following table details the Company's trade and other receivables exposure to credit risk (prior to collateral and other credit enhancements) with ageing analysis and impairment provided for thereon. Amounts are considered as 'past due' when the debt has not been settled, within the terms and conditions agreed between the Company and the customer or counter party to the transaction. Receivables that are past due are assessed for impairment by ascertaining solvency of the debtors and are provided for where there is objective evidence indicating that the debt may not be fully repaid to the Company. The balances of receivables that remain within initial trade terms (as detailed in the table) are considered to be of high credit quality. Past due but not impaired Gross amount Past due and impaired < 30 (days overdue) Within initial trade terms Trade and term receivables 3,178,196 45, , ,440-2,166,543 Total 3,178,196 45, , ,440-2,166,543 Trade and term receivables 4,752,454 6,921 1,414,456 75,652-3,255,425 Total 4,752,454 6,921 1,414,456 75,652-3,255,425 The Company does not hold any financial assets with terms that have been renegotiated, but which would otherwise be past due or impaired. The other classes of receivables do not contain impaired assets. 22 Tax assets and liabilities Recognised deferred tax assets and liabilities Deferred tax assets 623, , Key Management Personnel Disclosures The totals of remuneration paid to the key management personnel of CaseWare Australia & New Zealand Large General Purpose Company during the year are as follows: Short-term employee benefits 932, ,554 Post-employment benefits 90,448 89,682 1,022,902 1,014,236 Other key management personnel transactions For details of other transactions with key management personnel, refer to Note 27: Related Parties. 26

29 24 Remuneration of Auditors Remuneration of the auditor of the Company, ABC Auditors, for: - auditing or reviewing the financial statements 84,281 82,649 - taxation services 10,123 10,000 Total 94,404 92,649 Taxation services relate to tax compliance work, including preparation of the tax return. 25 Fair Value Measurement The Company measures the following assets and liabilities at fair value on a recurring basis: Financial assets Shares in listed entities Fair value hierarchy AASB 13 Fair Value Measurement requires all assets and liabilities measured at fair value to be assigned to a level in the fair value hierarchy as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date. Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 Unobservable inputs for the asset or liability. The table below shows the assigned level for each asset and liability held at fair value by the company: 30 June Recurring fair value measurements Level 1 Level 2 Level 3 Financial assets Shares in listed entities 499, ,549 Total 30 June Recurring fair value measurements Financial assets Shares in listed entities 531, , Contingencies In the opinion of the Directors, the Company did not have any contingencies at 30 June (30 June :None). 27

30 27 Related Parties (i) Key management personnel: Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity are considered key management personnel. For details of remuneration disclosures relating to key management personnel, refer to Note 23: Key Management Personnel Disclosures. Other transactions with KMP and their related entities are shown below. Other related parties include close family members of key management personnel and entities that are controlled or significantly influenced by those key management personnel or their close family members. Transactions with related parties Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. Loans are made to directors of the chief entity and controlled entity. Interest payable at 4% and monthly principal and interest repayments are made of the terms ranging from 1 to 4 years. CaseWare Australia & New Zealand Large General Purpose Company used the services of Locke Partners, a legal firm during the year. Anthony Locke is a Partner of this firm. All work performed was charged at commercial rates and was performed by a partner in a different division from Anthony. 28 Cash Flow Information (a) Reconciliation of result for the year to cashflows from operating activities Reconciliation of net income to net cash provided by operating activities: Profit for the year 2,420,496 2,297,899 Cash flows excluded from profit attributable to operating activities Non-cash flows in profit: - depreciation and amortisation 1,425,230 1,649,661 Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries: - (increase)/decrease in trade and other receivables 1,589,960 (476,627) - (increase)/decrease in other assets (538,732) (854,889) - (increase)/decrease in inventories (1,704,156) (681,692) - increase/(decrease) in trade and other payables (1,944,233) (679,717) - increase/(decrease) in income taxes payable 515,499 (120,793) - increase/(decrease) in employee benefits 10,671 (477) Cashflow from operations 1,774,735 1,133,365 28

31 28 Cash Flow Information continued (b) Loan facilities The major facilities are summarised as follows: Balance used at reporting date 1,458,706 2,151,102 Balance unused at reporting date 1,041, ,898 Total facilities 2,500,000 2,500,000 Finance will be provided under all facilities provided CaseWare Australia & New Zealand Large General Purpose Company have not breached any borrowing requirements and the required financial ratios are met. 29 Events Occurring After the Reporting Date No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years. 30 Company Details The registered office of the company is: CaseWare Australia & New Zealand Large General Purpose Company 101 High Street Melbourne Victoria

32 Directors' Declaration The directors of the Company declare that: 1. the financial statements and notes for the year ended 30 June are in accordance with the Corporations Act 2001 and: a. comply with Accounting Standards, which, as stated in basis of preparation note 1 to the financial statements, constitutes explicit and unreserved compliance with International Financial Reporting Standards (IFRS); and b. give a true and fair view of the financial position and performance of the Company; 2. In the directors' opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors. Director... Andrew Ball Director... Jeremy Smith Dated 30 September 30

33 Independent Audit Report to the members of CaseWare Australia & New Zealand Large General Purpose Company Report on the Financial Report We have audited the accompanying financial report of CaseWare Australia & New Zealand Large General Purpose Company, which comprises the statement of financial position as at 30 June, the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration. Directors' Responsibility for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards. Auditor s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of CaseWare Australia & New Zealand Large General Purpose Company, would be in the same terms if given to the directors as at the time of this auditor s report. 31