Cash flow statements
For the year ended 30 June 2007
Consolidated Parent entity
Note 2007
$’000
2006
$’000
2007
$’000
2006
$’000
Cash flows from operating activities
Receipts from customers 508,250 490,103 — —
Payments to suppliers and employees (471,126) (485,418) — —
37,124 4,685 — —
Dividends received — — 4,489 76,807
Interest received 534 436 13,009 7,730
Finance costs (5,706) (3,239) (305) —
Income taxes paid (4,265) (4,493) (2,612) (2,920)
Income tax refund 5,680 5,693 2,918 5,693
Reimbursement from/(to) tax consolidated entities — — 1,880 (2,537)
Net cash inflow from operating activities 33 33,367 3,082 19,379 84,773
Cash flows from investing activities
Payments for property, plant and equipment (7,357) (7,997) — —
Proceeds from sale of property, plant and equipment 43 164 — —
Investment in controlled entity — — (5,000) —
Net cash (outflow) from investing activities (7,314) (7,833) (5,000) —
Cash flows from financing activities
Proceeds from share issues
Share buyback
Proceeds from borrowings
Dividends paid
Repayment of borrowings
Loans from/(to) related companies
26
19
(2,290)
74,182
(43,564)
(48,122)
—
650
(629)
26,044
(12,033)
(14,722)
—
19
(2,290)
—
(43,564)
—
30,796
650
(629)
—
(12,033)
—
(72,121)
Net cash (outflow) from financing activities (19,775) (690) (15,039) (84,133)
Net increase/(decrease) in cash held
Cash held at the beginning of the financial year
Effects of exchange rate changes on cash
6,278
16,943
140
(5,441)
22,671
(287)
(660)
708
—
640
68
—
Cash and cash equivalents held at the end of the financial year 7 23,361 16,943
48 708
Financing arrangements 21
Non-cash financing and investing activities 34
The above cash flow statements should be read in conjunction with the accompanying
notes.
Notes forming part of the financial statements
For the year ended 30 June 2007
Note 1.
Summary of
significant
accounting policies
The principal accounting policies adopted
in the preparation of the financial report
are set out below. These policies have
been consistently applied to all the years
presented, unless otherwise stated. The
financial report includes separate financial
statements for Wattyl Limited as an
individual entity and the consolidated
entity consisting of Wattyl Limited and
its subsidiaries.
(a) Basis of preparation
This general purpose financial report
has been prepared in accordance with
Australian equivalents to International
Financial Reporting Standards (AIFRS),
other authoritative pronouncements of the
Australian Accounting Standards Board,
Urgent Issues Group Interpretations and
the Corporations Act 2001.
The financial report has been prepared
on the basis of historical cost.
(b) Statement of compliance
Australian Accounting Standards include
Australian equivalents to International
Financial Reporting Standards (AIFRS).
Compliance with AIFRS ensures that the
consolidated financial statements and
notes of Wattyl Limited comply with
International Financial Reporting Standards
(IFRS). The parent entity financial
statements and notes also comply with
IFRS except that it has elected to apply
the relief provided to parent entities in
respect of certain disclosure requirements
contained in AASB 132 Financial
Instruments: Disclosure and Presentation.
The Group has elected to apply the
following pronouncement to the annual
reporting period beginning 1 July 2006:
•
revised AASB 101 Presentation
of Financial Statements (issued
October 2006).
This includes applying the pronouncement
to the comparatives in accordance with
AASB 108 Accounting Policies, Changes
in Accounting Estimates and Errors.
No adjustments to any of the financial
statements were required for the above
pronouncement, but certain disclosures
are no longer required and have therefore
been omitted.
Critical Accounting Estimates
The preparation of financial statements
in conformity with AIFRS requires the use
of certain critical accounting estimates. It
also requires management to exercise its
judgement in the process of applying the
Group’s accounting policies. Estimates and
judgements are continually evaluated and
are based on historical experience and
other factors, including expectations of
future events that are believed to be
reasonable under the circumstances.
The resulting accounting estimates will, by
definition, seldom equal the related actual
results. The estimates and assumptions
that have a significant risk of causing a
material adjustment to the carrying
amounts of assets and liabilities within
the next financial year are:
•
Note 1(e), 1(l) and 15 contain
information about the assumptions
and their risk factors relating to
impairment.
•
Note 1(n) and 16 contain information
about the principal actuarial
assumptions used in determining
pension obligations for the Group’s
defined benefit plan.
•
Note 1(v) contains information about
the assumptions, estimates and
uncertainty in relation to estimation
of restructuring provisions.
(c) Principles of consolidation
The consolidated financial statements
incorporate the assets and liabilities of
all subsidiaries of Wattyl Limited as at
30 June 2007 and the results of all
subsidiaries for the year then ended.
Wattyl Limited and its subsidiaries together
are referred to in this financial report as the
Group or the consolidated entity.
Subsidiaries are all those entities (including
special purpose entities) over which the
Group has the power to govern the
financial and operating policies, generally
accompanying a shareholding of more
than one-half of the voting rights. The
existence and effect of potential voting
rights that are currently exercisable or
convertible are considered when assessing
whether the Group controls another entity.
Subsidiaries are fully consolidated from the
date on which control is transferred to the
Group. They are de-consolidated from the
date that control ceases.
The purchase method of accounting is
used to account for the acquisition of
subsidiaries by the Group.
Intercompany transactions, balances and
unrealised gains on transactions between
Group companies are eliminated.
Unrealised losses are also eliminated
unless the transaction provides evidence
of the impairment of the asset transferred.
Accounting policies of subsidiaries have
been changed where necessary to ensure
consistency with the policies adopted by
the Group.
(d) Revenue recognition and
receivables
Revenue is measured at the fair value of
the consideration received or receivable.
Amounts disclosed as revenue are net of
returns, rebates and taxes paid. Revenue
is recognised from the sale of paint and
surface coatings. A sale is recorded
when goods have been delivered to the
customer, the customer has accepted
the goods and collection of the related
receivable is probable.
Trade receivables are recognised initially
at fair value and subsequently measured at
amortised cost, less provision for doubtful
debts. Collection of debtors is reviewed on
an ongoing basis. Debts which are known
to be uncollectible are written off and a
provision is raised where there is objective
evidence that the Group will not be able to
collect all amounts due according to the
original terms of the receivables.
(e) Property, plant and equipment
Each class of property, plant and
equipment is carried at cost or deemed
cost less, where applicable, accumulated
depreciation and any accumulated
impairment losses.
Historical cost includes expenditure that
is directly attributable to the acquisition of
the items. Cost may also include transfers
from equity of any gains/losses on
qualifying cash flow hedges of foreign
currency purchases of property, plant
and equipment.
Subsequent costs are included in the
asset’s carrying amount or recognised as a
separate asset, as appropriate, only when
it is probable that future economic benefits
associated with the item will flow to the
Group and the cost of the item can be
measured reliably. All other repairs and
maintenance are charged to the income
statement during the financial period in
which they are incurred.
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