RNS Number:9471P
Coles Myer Ld
19 September 2003
Coles Myer Ltd.
Appendix 4E
Preliminary Final Report
for the 52 weeks ended 27 July 2003
(previous corresponding period: 52 weeks ended 28 July 2002)
Results for announcement to the market
$m
Revenue from ordinary activities up 3.3% to 27,625.6
Profit from ordinary activities after tax attributable to members up 21.4% to *429.5
Net profit for the period attributable to members up 21.4% to *429.5
Dividends Amount per security Franked amount per
security at 30% tax
Interim dividend 13.5 cents 13.5 cents
Final dividend 12.5 cents 12.5 cents
Total dividend 26.0 cents
26.0 cents
Record date for determining entitlements to the dividend 17 October 2003
* Profit is after adjusting for accounting policy changes. The pre tax effect of
supplier promotional rebates $(79.3) million - relating to 2003 $(2.8) million1,
relating to prior periods $(76.5) million. Also relating to 2003, liquor
licenses $10.3 million1 and indirect logistics $5.0 million1. The tax effect of
these accounting policy changes is $22.3 million. The previous corresponding
periods have not been adjusted. Refer page 14 for full detail of accounting
policy changes.
Statement of Financial Performance
2003 2002
$m $m
Sales 27,016.6 25,688.7
Cost of goods sold (19,618.6) (19,419.9)
Gross profit 7,398.0 6,268.8
Other revenues from operating activities 17.7 650.6
Cumulative effect of change in accounting policy for supplier promotional *(76.5)
rebates
Other revenue from non-operating activities 275.3 286.3
Proceeds from sale of property, plant and equipment, and businesses and 392.5 111.8
controlled entities
Net book value of property, plant and equipment, and businesses and (416.8) (123.9)
controlled entities disposed
Borrowing costs (86.9) (102.9)
Advertising expenses (383.8) (323.0)
Selling and occupancy expenses (5,319.1) (5,150.4)
Administrative expenses (1,183.2) (1,126.3)
Profit from ordinary activities before income tax expense 617.2 491.0
Income tax expense (187.7) (137.2)
Net profit 429.5 353.8
Net increase/(decrease) in asset revaluation reserve 83.5 (4.2)
Net decrease in foreign currency translation reserve (17.1) -
Adjustment resulting from change in accounting policy for annual leave (6.6)
entitlements (page 15)
Total revenues, expenses and valuation adjustments attributable to members of 59.8 (4.2)
Coles Myer Ltd. recognised directly in equity
Total changes in equity other than those resulting from transactions with owners 489.3 349.6
as owners
Earnings per share
Basic earnings per share 32.2 cents 26.1 cents
Diluted earnings per share 33.2 cents 27.4 cents
* Profit is after adjusting for accounting policy changes. Supplier promotional
rebates $(79.3) million - relating to 2003 $(2.8) million1, relating to prior
periods $(76.5) million. Liquor licenses $10.3 million1 and indirect logistics
$5.0 million1. The previous corresponding periods have not been adjusted. Refer
page 14 for full detail of accounting policy changes.
Statement of Financial Position
2003 2002
$m $m
Current assets
Cash 905.5 866.0
Receivables 346.0 288.7
Inventories 2,836.8 2,808.9
Other 28.1 53.2
Total current assets 4,116.4 4,016.8
Non-current assets
Receivables 121.5 129.6
Investments 105.8 109.2
Property, plant and equipment 3,340.6 3,499.5
Deferred tax assets 221.9 258.3
Intangibles 494.0 238.2
Other 29.8 37.8
Total non-current assets 4,313.6 4,272.6
Total assets 8,430.0 8,289.4
Current liabilities
Payables 2,476.3 2,270.7
Interest bearing liabilities 10.8 15.3
Tax liabilities 13.6
Provisions 540.8 640.6
Total current liabilities 3,041.5 2,926.6
Non-current liabilities
Interest bearing liabilities 1,143.3 1,552.8
Deferred tax liabilities 175.1 249.5
Provisions 244.4 204.3
Other 49.3 48.6
Total non-current liabilities 1,612.1 2,055.2
Total liabilities 4,653.6 4,981.8
Net assets 3,776.4 3,307.6
Equity
Contributed equity 2,210.3 2,032.3
Reserves 468.8 402.4
Retained profits 1,097.3 872.9
Total equity 3,776.4 3,307.6
Statement of Cash Flows
2003 2002
$m $m
Inflows/(outflows)
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax) 28,904.1 27,540.3
Payments to suppliers and employees (inclusive of goods and services tax) (27,469.2) (26,259.9)
Distributions received from associated entities 6.2 5.6
Interest received 20.0 15.0
Borrowing costs paid (103.6) (105.9)
Income tax paid (179.1) (77.1)
Net cash inflow from operating activities 1,178.4 1,118.0
Cash flows from investing activities
Payments for property, plant and equipment (625.2) (507.7)
Payments for purchase of businesses and controlled entities (241.7) (70.4)
Payment for purchase of associated entity (1.4) (0.1)
Proceeds on sale of property, plant and equipment 37.1 31.1
Proceeds on sale of Sydney Central Plaza 372.8
Proceeds on sale of businesses and controlled entities 57.8
Proceeds on sale of investments 7.6 2.3
Repayment of loan from other entities 13.6 41.6
Net cash (outflow) from investing activities (437.2) (445.4)
Cash flows from financing activities
Proceeds from issue of shares and options - -
Payments for shares bought back (1.4)
Proceeds from borrowings 279.7 924.4
Repayments of borrowings (704.6) (1,022.4)
Dividends paid (287.6) (285.3)
Net cash (outflow) from financing activities (712.5) (384.7)
Net increase in cash held 28.7 287.9
Cash at beginning of the year 866.0 578.1
Cash at end of the year 894.7 866.0
Reconciliation of net cash inflow from operating activities to net profit is as
follows:
Net cash inflow from operating activities 1,178.4 1,118.0
Depreciation and amortisation (504.2) (484.6)
Changes in assets and liabilities
Increase in current receivables 69.5 27.0
(Decrease) in inventories (24.0) (104.1)
(Decrease)/increase in future income tax benefits (38.3) 28.4
(Decrease)/increase in other assets (29.6) 17.9
(Increase) in trade creditors (105.1) (213.8)
(Increase)/decrease in other liabilities (55.0) 90.4
(Increase) in provision for taxation (20.3) (28.1)
(Increase) in provisions (79.2) (44.9)
Decrease/(increase) in deferred income tax 74.4 (29.9)
Net loss on disposal of plant and equipment (31.2) (27.0)
Net profit on sale of freehold properties 1.4 15.0
Net profit/(loss) on sale of businesses and controlled entities 5.5 (0.1)
Write-down of non-current assets to recoverable amounts (12.8) (10.4)
Net profit 429.5 353.8
Statement of Cash Flows (continued)
Acquisitions/Disposals
Details of the aggregate cash flows relating to acquisition and disposal of businesses and controlled entities and the
assets and liabilities at the date of acquisition and disposal are as follows:
Acquisitions* Disposals
2003 2002 2003 2002
$m $m $m $m
Consideration (362.6) (70.4) 372.8 66.5
Cash 3.2 (8.7)
Receivables - current 17.6 (2.1) (1.9)
Inventories 51.8 12.9 (4.1)
Other assets - current 2.4 (1.2) (0.2)
Property, plant and equipment 45.8 25.4 (363.0) (64.6)
Deferred tax assets 2.0 1.4 (3.4)
Intangibles 260.2 37.0 (13.4)
Other assets - non-current (0.3)
Payables - current (19.1) (1.3) (1.0) 18.9
Provisions - current (1.3) (4.5) 6.2
Interest bearing liabilities - non-current (0.5)
Provisions - non-current 1.1
Net assets acquired/(disposed) 362.6 70.4 (367.3) (70.4)
Reconciliation of cash flows:
Cash consideration (362.6) (70.4) 372.8 66.5
Consideration satisfied by share issuance 117.7
Cash acquired/(disposed) 3.2 (8.7)
Cash (Outflow)/Inflow (241.7) (70.4) 372.8 57.8
* Net assets acquired are recorded at fair value
Significant transactions included in the above table
On May 26, 2003 Liquorland (Australia) Pty Ltd., a wholly owned controlled entity of Coles Myer Ltd., acquired 100% of
the issued share capital of Pallas Newco Pty. Ltd. and ALW Newco Pty. Ltd (Theo's NSW) for $179.8 million, plus
associated inventory for $37.4 million, and freehold property for $14.8 million which is currently proposed as a sale
and leaseback transaction. The consideration comprises cash, and the issue of 17,857,143 Coles Myer Ltd. ordinary
shares. Coles Myer Ltd. has guaranteed a value of $7.00 per share throughout a period of three years, commencing 26 May
2003, and will bear any share price risk during that period. Should any consideration become payable it will be brought
to account as a component of goodwill arising on the acquisition. At balance date, no amount would have been payable.
On January 6, 2003 Officeworks Superstores Pty. Ltd., a wholly owned controlled entity of Coles Myer Ltd., acquired 100%
of the issued share capital of Viking Direct Pty. Ltd. and Viking Office Products Pty Ltd. for $38.7 million, plus
associated inventory for $11.1 million, and freehold property for $17.5 million which is currently proposed as a sale
and leaseback transaction.
On March 10, 2003 the Coles Myer Group sold Sydney Central Plaza for $372.8 million, net of transaction and sale related
costs of $17.2 million.
During 2002 Coles Supermarkets (Australia) Pty. Ltd. and Bi-Lo Pty Ltd., both wholly owned controlled entities of Coles
Myer Ltd., acquired 35 ex-Franklins stores for $59.3 million.
On May 27, 2002 Coles Myer Ltd. sold 100% of its investment in the issued capital of Amalgamated Food & Poultry Pty.
Ltd. for $65.0 million.
Statement of Cash Flows (continued)
Reconciliation of Cash
For the purposes of the Statement of Cash Flows, cash includes cash on hand, at bank and on short-term deposit, net of
bank overdraft. Cash at the end of the year as shown in the Statement of Cash Flows is reconciled to the relevant
Statement of Financial Position items as follows:
2003 2002
$m $m
Cash assets 905.5 866.0
Bank overdraft (10.8)
894.7 866.0
Non-cash financing and investing activities
Financing - CML issued ordinary shares under the Dividend Reinvestment Plan for $60.3 million (2002 $60.0 million).
Investments - CML issued ordinary shares for $117.7 million in connection with the purchase of Pallas Newco Pty. Ltd.
and ALW Newco Pty. Ltd.
During 2002, the CML Group disposed of its investments in Power Investment Funding Pty. Ltd., Investment Funding Pty
Ltd., and Label Development Pty. Ltd. for $NIL consideration. As a result, current receivables decreased $115.3 million,
current loans decreased $115.3 million, non-current receivables decreased $17.2 million, non-current loans decreased
$17.2 million and investments decreased $NIL on disposal.
Details of major financing facilities
Credit standby facilities - The CML Group has $580.0 million (2002 $730.0 million) of committed facilities of which
$580.0 million (2002 $730.0 million) was undrawn at balance date. The facilities have maturity dates ranging between
October 2003 and August 2008 (2002 maturity dates ranged between May 2003 and August 2007).
Commercial paper - The CML Group has commercial paper programmes based in Australia and Europe. The programmes are
guaranteed by CML and are supported by the credit standby facilities referred to above. At balance date no commercial
paper was on issue (2002 $NIL).
Medium term notes - The CML Group has issued medium term notes under a debt issuance programme and under medium term
note programmes in both Europe and Australia. It also operated a medium term note programme in the United States on
behalf of Coles Myer Finance (USA) Ltd. Medium term notes issued by Coles Myer Finance Ltd. and Coles Myer Finance (USA)
Ltd. are guaranteed by CML. At balance date $1,052.4 million (2002 $1,244.3 million) equivalent of medium term notes
were on issue.
Other loans - $7.5 million (2002 $18.1 million) equivalent of loans, denominated in Japanese yen, were outstanding at
balance date with a maturity date of July 2004 (2002 July 2004).
$NIL (2002 $327.2 million) of domestic bank loans of various maturities were outstanding at balance date.
Dividends
2003 2002
$m $m
Ordinary shares
Interim dividend of 13.5 cents (2002 13.5 cents) per fully paid ordinary
share paid 12 May 2003 (2002 13 May 2002). Fully franked at 30% tax rate
(2002 30%). (160.6) (159.3)
Final dividend of 12.0 cents per fully paid ordinary share paid on 11
November 2002 recognised as a liability at 28 July 2002 but adjusted against
retained profits at the beginning of the financial year on the change in
accounting policy for providing for dividends (page 14). Fully franked at 30%
tax rate (2002 30%). (142.1) (142.1)
Reset convertible preference shares (ReCAPS)
Dividend of $3.2589 (2002 $3.2589) per share paid 2 December 2002 (2002 30 (22.8) (22.8)
November 2001). Fully franked at 30% tax rate (2002 30%).
Dividend of $3.2411 (2002 $3.2411) per share paid 2 June 2003 (2002 31 May (22.7) (22.7)
2002). Fully franked at 30% tax rate (2002 30%).
Total dividends (348.2) (346.9)
* In previous periods $7.6 million was provided at balance date. As a result of the change in accounting policy this
has been adjusted against retained profits (page 14)
Dividends not recognised at year end
In addition to the above dividends, since year end the directors have
recommended the payment of a final dividend of 12.5 cents per fully paid
ordinary share, fully franked based on tax paid at 30%. The aggregate amount
of the proposed dividend expected to be paid on 10 November 2003 out of
retained profits at 27 July 2003, but not recognised as a liability at year
end as a result of the change in accounting policy for providing for
dividends (page 14), is 151.6
The franked portions of the final dividends recommended after 27 July 2003 will be franked out of existing franking
credits or out of franking credits arising from the payment of income tax in the year ending 25 July 2004.
Franking credits
Franking credits of $141.4 million (at 30%) are available for the consolidated entity, and will enable the payment of
franked dividends for at least the next year.
Dividend reinvestment plan
The company has established a dividend reinvestment plan under which holders of ordinary shares may elect to have their
dividend entitlements satisfied by the issue of new fully paid ordinary shares, rather than being paid in cash. Shares
are issued under the plan at 2.5% discount to the market price. The last date for receipt of election notices for the
dividend is 17 October 2003.
Retained profits
2003 2002
$m $m
Retained profits at the beginning of the financial year 872.9 866.0
Adjustment resulting from change in accounting policy for providing for 149.7
dividends (refer page 14)
Adjustment resulting from change in accounting policy for annual leave (6.6)
entitlements (refer page 15)
Net profit 429.5 353.8
Dividends (348.2) (346.9)
Retained profits at the end of the financial year 1,097.3 872.9
NTA backing
2003 2002
$ $
Net tangible asset backing per ordinary security 2.16 2.02
Interests in associated entities
Investment Ownership interest Principal Balance date
2003 2002 2003 2002 activity
$m $m % %
Unit Trust 72.5 50 50 Property 30 June
ownership
CMS General Trust 76.8
Partnership 2.0 50 Loyalty 31 December
program
Fly Buys Partnership 2.0 50
Proprietary company - - 50 50 Software 30 June
development
Quids Technology Pty Ltd
Segment Revenue
2003 2002
$m $m
Food & Liquor 16,582.2 16,548.9
Kmart & Officeworks 4,385.5 4,039.0
Myer Grace Bros and Megamart 3,291.4 3,372.3
Target 2,661.8 2,472.2
Emerging Businesses 265.1 277.5
Property and Unallocated 448.3 26.8
Eliminated on consolidation (32.4) (26.7)
Subtotal 27,601.9 26,710.0
Interest income 23.7 27.4
Total Revenue 27,625.6 26,737.4
Segment Result*
2003 2002
$m $m
Food & Liquor 566.7 546.9
Kmart & Officeworks 103.8 62.4
Myer Grace Bros and Megamart 9.9 (21.6)
Target 89.9 51.7
Emerging Businesses (10.9) (15.3)
Property and Unallocated (79.0) (57.6)
Subtotal 680.4 566.5
Net borrowing costs (63.2) (75.5)
Profit from ordinary activities before income tax 617.2 491.0
Income tax expense (187.7) (137.2)
Net profit 429.5 353.8
*Segment results are after adjusting for the accounting policy changes as
detailed on page 14. Refer pages 11 to 13 for segment underlying result
reconciliation.
Commentary on Segment Revenue and Result
The net profit after tax (NPAT) for the year of $429.5 million is up $75.7
million or 21.4% from $353.8 million reported for 2002. The increase in NPAT is
reflected by an increase in basic earnings per share of 23.4% from 26.1 cents
per share in 2002 to 32.2 cents per share in 2003.
NPAT after adjusting for the after tax impact of the sale of Sydney Central
Plaza of $2.8 million, the reversal of the Kmart NZ onerous lease provision of
$12.8 million, and accounting policy changes of $41.7 million was $455.6 million
("Underlying" NPAT) in 2003. This is an increase of $101.8 million, or 28.8% on
the 2002 result.
Income tax expense of $187.7 million reflects an effective tax rate of 30.4%.
Food and Liquor
2003 2002
Sales ($m) 16,538.6 15,892.4
Other revenue ($m) 43.6 656.5
Total Segment Revenue ($m) 16,582.2 16,548.9
Segment Result ($m) 566.7 546.9
Accounting policy changes ($m) 34.0
Exited businesses ($m) 2.5 11.3
Underlying Result ($m) 603.2 558.2
Sales have increased from $15,892.4 million to $16,538.6 million, an increase of
$646.2 million, or 4.1%. After adjusting for sales relating to Red Rooster
(business exited in May 2002), sales increased from $15,711.1 million to
$16,538.6 million, an increase of $827.6 million, or 5.3%.
Other revenue has declined as a result of the change in accounting policy for
rebates. Rebates which were previously recorded as other revenue are now
recorded in inventory or cost of goods sold (refer page 14).
The Segment Result (net profit before interest and tax) has increased by $19.8
million, or 3.6% to $566.7 million. The Segment Result after adjusting for
accounting policy changes and exited businesses was $603.2 million for 2003 and
$558.2 million in 2002 ("Underlying Result"). The Underlying Result increased by
$45.0 million, or 8.1%
Refer to the attached Press Release for further commentary on the results.
Kmart and Officeworks
2003 2002
Sales ($m) 4,369.5 3,904.4
Other revenue ($m) 16.0 134.6
Total Segment Revenue ($m) 4,385.5 4,039.0
Segment Result ($m) 103.8 62.4
Accounting policy changes ($m) 12.6
Result ($m) *116.4 62.4
Sales have increased by $465.1 million, or 11.9% to $4,369.5 million.
Other revenue has declined as a result of the change in accounting policy for
rebates. Rebates which were previously recorded as other revenue are now
recorded in inventory or cost of goods sold (refer page 14).
The Segment Result (net profit before interest and tax) has increased by $41.4
million, or 66.3% to $103.8 million. The Segment Result after adjusting for
accounting policy changes is $116.4 million.
*After adjusting for the reversal of the Kmart NZ onerous lease provision of
$12.8 million the result was $103.6 million for 2003 ("Underlying Result"). The
Underlying Result increased by $41.2 million, or 66.0%.
Refer to the attached Press Release for further commentary on the results.
Myer Grace Bros & Megamart
2003 2002
Sales ($m) 3,239.9 3,243.2
Other revenue ($m) 51.5 129.1
Total Segment Revenue ($m) 3,291.4 3,372.3
Segment Result ($m) 9.9 (21.6)
Accounting policy changes ($m) 15.3
Underlying Result ($m) 25.2 (21.6)
Sales have decreased $3.3 million, or 0.1% to $3,239.9 million.
Other revenue has declined as a result of the change in accounting policy for
rebates. Rebates which were previously recorded as other revenue are now
recorded in inventory or cost of goods sold (refer page 14).
The Segment Result (net profit before interest and tax) has increased by $31.5
million to $9.9 million. The Segment Result after adjusting for accounting
policy changes was $25.2 million for 2003 ("Underlying Result"). The Underlying
Result increased by $46.8 million for the year.
Refer to the attached Press Release for further commentary on the results.
Target
2003 2002
Sales ($m) 2,646.9 2,422.4
Other revenue ($m) 14.9 49.8
Total Segment Revenue ($m) 2,661.8 2,472.2
Segment Result ($m) 89.9 51.7
Accounting policy changes ($m) 2.1
Underlying Result ($m) 92.0 51.7
Sales have increased by $224.5 million, or 9.3% to $2,646.9 million.
Other revenue has declined as a result of the change in accounting policy for
rebates. Rebates which were previously recorded as other revenue are now
recorded in inventory or cost of goods sold (refer page 14).
The Segment Result (net profit before interest and tax) has increased by $38.2
million, or 73.9% to $89.9 million. The Segment Result after adjusting for
accounting policy changes was $92.0 million for 2003 ("Underlying Result"). The
Underlying Result increased by $40.3 million, or 77.9%.
Refer to the attached Press Release for further commentary on the results.
Emerging Businesses
2003 2002
Sales ($m) 254.1 253.0
Other revenue ($m) 11.0 24.5
Total Segment Revenue ($m) 265.1 277.5
Segment Result ($m) (10.9) (15.3)
Exited businesses 1.1
Underlying Result ($m) (10.9) (14.2)
Sales (inclusive of intra group sales) have increased from $253.0 million to
$254.1 million, an increase of $1.1 million. After adjusting for sales relating
to Myer Direct (business exited in January 2002), sales increased from $213.4
million to $254.1 million.
The Segment Result (net loss before interest and tax) has improved by $4.4
million to a loss of $10.9 million. The Segment Result after adjusting for
exited businesses was a loss of $14.2 million for 2002 ("Underlying loss").
Refer to the attached Press Release for further commentary on the results.
Property and Unallocated
2003 2002
Segment Result ($m) (79.0) (57.6)
Profit on sale of SCP ($m) (5.5)
Underlying Result ($m) (84.5) (57.6)
The Segment loss (net loss before interest and tax) has increased by $21.4
million, or 37.2% to $79.0 million. The Segment loss after adjusting for the
profit on sale of Sydney Central Plaza (SCP) is $84.5 million for 2003
("Underlying loss"). The Underlying loss increased by $26.9 million, or 46.7%.
Refer to the attached Press Release for further commentary on the results.
Changes in accounting policies & estimates
Change in accounting policy for inventory costing
(a) Supplier Promotional Rebates
Effective 29 July 2002, the CML Group has revised its policy of accounting for supplier promotional rebates such that
accounting for all forms of rebates is reflective of recent guidance given by the Emerging Issues Task Force in the U.S.
(EITF Issue No. 02-16, "Accounting by a Customer (including a Reseller) for Certain Consideration Received from a
Vendor.")
Under this guidance, virtually all forms of rebates (including some which under previous accounting guidance were able
to be taken directly to income) are treated as a reduction in the cost of inventory, deferring the recognition of the
income to as and when the inventory is sold. As a result, rebates previously recorded as other revenue from operating
activities, have now been disclosed as a reduction in cost of goods sold. The only exception is in limited circumstances
in relation to the reimbursement of direct advertising costs incurred on behalf of the supplier, which are recorded as
other revenue from non-operating activities.
On initial adoption of the change at 29 July 2002, the CML Group inventory decreased by $76.5 million (July 2001 $76.7
million). If the accounting policy had always been applied, the impact of the change would have been an increase to
profit before tax by $0.2 million for the year ended 28 July 2002 and a decrease by $2.8 million for the year ended 27
July 2003.
Under the proposed international financial reporting standards coming into effect in the 2006 financial year, voluntary
changes to accounting policies such as this would be made by an adjustment to retained earnings, rather than through the
Statement of Financial Performance.
(b) Indirect Logistics Expenses
Effective 29 July 2002, the CML Group made a modification to its policy of recognising indirect costs of operating
distribution centres as a component of the cost of inventory. Previously, these indirect costs were expensed as
incurred. The modification was made to improve the relevance and reliability of the information presented in the
financial report and to further comply with AASB 1019 Inventories.
On initial adoption of the change at 28 July 2002, the CML Group's inventory increased by $4.5 million. For the year
ended 27 July 2003, the change in accounting policy was an increase to the CML Group's profit before tax by $5.0
million. Had this policy been applied for the previous corresponding period the effect would have been the same.
Change in accounting policy for providing for dividends
Effective 29 July 2002, the CML Group changed its accounting policy for providing for dividends to comply with AASB 1044
"Provisions, Contingent Liabilities and Contingent Assets" released in October 2001. In previous years, in addition to
providing for the amount of any dividends declared, determined or publicly recommended by the directors on or before the
end of the financial year but not distributed at balance date, provision was made for dividends to be paid out of
retained profits at the end of the financial year where the dividend was proposed, recommended or declared between the
end of the financial year and the completion of the financial report.
An adjustment of $149.7 million was made against retained profits at the beginning of the financial year to reverse the
amount provided at 28 July 2002 for the accrued ReCAPS dividend and the proposed final dividend for that year that was
recommended by the directors between the end of the financial year and the completion of the financial report. This
reduced current liabilities - provisions and total liabilities at the beginning of the financial year by $149.7 million
with corresponding increases in net assets, retained profits, total equity and the total dividends provided for or paid
during the current financial year.
Changes in accounting policies & estimates (continued)
Change in accounting policy for annual leave entitlements
Effective 29 July 2002, the CML Group changed its accounting policy for providing for employee benefits to comply with
the revised AASB 1028 "Employee Benefits" released in June 2001. In previous years, liabilities for wages and salaries
and annual leave were measured at current remuneration rates. Under the revised accounting standard these benefits must
be measured at their nominal amounts, using the rates expected to be paid when the obligations are settled, and are not
discounted.
An adjustment of $6.6 million was made at the beginning of the financial year to reduce retained profits, $9.4 million
to increase employee provisions, and $2.8 million to increase the future income tax benefit. If the accounting policy
had always been applied, the impact of the change for the years ended 28 July 2002 and 27 July 2003 would have been
immaterial.
Change in accounting estimate for liquor licenses
Effective 29 July 2002, the CML Group changed its accounting estimate with respect to the useful life of liquor
licenses. The previous estimate recognised that liquor licenses had a useful life not exceeding twenty years.
The revised accounting estimate recognises that in all material respects, liquor licenses have an indefinite life as
they have unlimited legal lives and are unlikely to become commercially obsolete.
As a consequence, no amortisation of liquor licenses has been charged for the year ended 27 July 2003. Had a change in
estimate of useful life not taken place, then an amount of $10.3 million relating to amortisation expense would have
been charged in the year to 27 July 2003.
Events occurring after balance date
Subsequent to balance date, the CML Group has acquired from Shell multi-site franchisees the right to operate 151
service stations and 8 convenience stores in Victoria for $26 million. In addition to this right, inventories and
property, plant and equipment has been acquired for a further $31 million. Shell will supply fuel products and service
station properties and the service stations will be branded both Coles Express and Shell.
As previously announced, the rights to operate the remaining 425 sites nationally will be acquired for $68 million.
Annual Meeting
The annual meeting will be held as follows:
Place Vodafone Arena
Melbourne Park
Swan Street, Melbourne
Date 26 November 2003
Time 10.30 am
Approximate date the annual report will be available
28 October 2003
Compliance Statement
1. This report has been prepared under accounting policies which comply with the
Corporations Act 2001, Australian Accounting Standards and other mandatory
professional reporting requirements in Australia, and the Corporations
Regulations 2001.
2. This report and the financial statements prepared under the Corporations Act
2001, use the same accounting policies.
3. This report gives a true and fair view of the matters disclosed.
4. This report is based on financial statements which have been audited. The
audit report, which was unqualified, will be made available with the
Company's annual report.
This information is provided by RNS
The company news service from the London Stock Exchange
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