Remuneration And Financial Statement Analysis Of Caltex Australia Limited

Financial Statements analysis

Caltex limited Australia is a public traded limited company that deals with purchase, distribution, refining and marketing of the petroleum products in Singapore and Australia primarily. Its operations is through supply and marketing and the sale of lubricants, fuels, special products and refilling stores through a network of Caltex branded service stations (Drever et al., 2007). The service branded refilling stations includes Caltex gas stations, Ampol and Caltex Woolworth. It also markets and sells its products through company owned non- equity resellers to corporate customers. Non-equity resellers sell Caltex products through depots, pipelines, terminals and transportation companies with tankers. There is also a segment called the Lytton segment and refines crude oil into jet fuel, petrol, diesel and other various forms like the LPG gasses (Zingel, 2008).

The key executives of Caltex Australia Limited include,

• Julian Segal B.Sc. , MBA- CEO
• Simon Hepworth- CFO
• Viv Da Ros- CIO
• Lyndall Stoyles- Legal & Corporate Affairs / Company Secretary
• Joanne Taylor- Human resources.

Total Assets

Annual

Net Operating Cash Flow

The study provides information on the salaries of the most representative posts in the Australian petroleum  company, grouped into three sections depending on the professional level (Directors, Heads and Managers, and General Staff) and each level is classified in eight functional areas ( Management and Common, Human Resources, Administration, Informatics, Commercial, Marketing, Operations, and Technique).

Each of the jobs included in the Report includes the following information:

Job description: mission, main functions, competencies, etc.

Wage consultation: global remuneration table, segmented descriptive statistics and inferential statistics (multiple regression). These last two are characteristic and distinctive characteristics that allow the personalization of wage information to their specific circumstances: Segmented Descriptive Statistics and Multiple Regression (Drever et al., 2007).

The Segmented Descriptive Statistics offers for each of the positions in our catalog, in addition to the global statistics, information segmented for different variables: The Multiple Regression is a technique of inferential statistics that analyzes and quantifies the relationship between different independent variables and a dependent variable, which is the total remuneration. The variables used to predict wages are:

The report or audit report of annual accounts is a document, issued by the auditors, subject in terms of the content, requirements and formalities to the regulatory regulation of the audit activity. It will reflect the professional opinion of the auditor on the financial statements, constituting the means by which the statutory auditor communicates with potential users (shareholders, creditors, employees and the general public) that considers it as a guarantee Or a certificate for decision making (Engdahl, 2011).

Remuneration report

A first question that arises is whether or not such payments have a remunerative nature. Since if we are textual we will see that the standard refers to the consideration received by the services, a situation that would exclude concepts not directly related to the effective services of the worker, such as Legal gratuities or holiday pay, among others.

There is no doubt that the payment of the remuneration corresponds as consideration to the effective services, as well as those in which the employee has been made available (without actual benefit), both situations being constituted or understood as an effective benefit (and therefore Both counter-responsive).

The others (those that do not imply effective provision, and in which there is also no provision) are recognized (based on the theory of global or generic counter-balances) that, despite not being or constitute an effective benefit (periods of rest, For example) have remunerative nature.

Despite this precision, the definition of remuneration continues to be very general, so in order to continue trying to define its scope, we must resort to the legal definition of non-remuneratory concepts (Feldstein, Hines and Hubbard, 2007).

Participation in the profits of the company; The cost or value of working conditions; The Christmas basket or the like; The value of transport, provided that it is subject to attendance at the workplace and reasonably covers the respective transfer; Education allowance or bonus; The allowances or bonuses for birthdays, marriage, birth of children, death and those of such nature; The goods that the company grants to its workers, of their own production, in a reasonable quantity for their direct consumption and of their family; The amounts that are granted to the worker for the full performance of his work or on the occasion of his functions (mobility, travel expenses, representation expenses, costumes and in general all that reasonably fulfills such object and does not constitute a benefit or equity advantage for the worker ); The food provided directly by the employer that has the quality of working condition because it is indispensable for the provision of services, the food benefits granted under the indirect supply modality according to its corresponding law, or when it derives from a legal mandate; And the food provided directly by the employer who has the status of work condition because it is indispensable for the provision of services or when it derives from a legal mandate (Financial analysis, 2008).

First, it is made up of those concepts that are given to the workers, but whose delivery does not imply a free disposition of the sum or delivered, and rather on which the worker must be accountable for the destination. This is the case, for example, of representation expenses, per diems or working conditions, which are delivered as a result of the employment relationship itself, and for the worker to fulfill his obligations. Often they are subject to accountability.

One second is made up of those concepts that would not necessarily constitute a working condition, which probably have a free availability of workers, but which do not constitute a patrimonial advantage for them, do not come to be considered as remuneration. This is the case, for example, of the value of transport contingent upon attendance at the workplace or of the company’s own production assets which it grants to its workers in a reasonable quantity for direct consumption and that of their family.

Finally, we have the case of the concepts that constitute a patrimonial advantage, or being freely available, are not considered remunerative for having considered the norm. This is the case, for example, of the participation in profits (Financial analysis, 2008). This is the case, for example, of representation expenses, per diems or working conditions, which are delivered as a result of the employment relationship itself, and for the worker to fulfill his obligations. Often they are subject to accountability.

Auditors report

The Consolidated Annual Accounts are the Financial Statements that are obliged to present the companies that form a group, as if they were a single economic unit. Companies that form a group and are obliged to consolidate must prepare and submit, in addition to their individual accounts, Financial Statements as if they were a single economic unit, which is referred to as Financial Statements or Consolidated Annual Accounts (Weygandt, Kimmel and Kieso, 2015).

As regards the preparation and format of the annual accounts of consolidated groups, there are two possibilities:

However, certain articles of the Commercial Code must also apply:

Relating to the obligation to consolidate and exceptions or waivers.

Referring to the inclusion of additional information in the Management Report (Article 48 Report) and in the Management Report ,

On the other hand, unlisted groups, that is to say that they have no values ??quoted in the EU, can choose between the application of the Spanish national legislation, included in the Commercial Code, It should be noted that there is currently a situation of uncertainty in this area, since, on the one hand, international accounting standards governing business combinations (IFRS 3 and IAS 27) have recently been revised and are still pending approval-

 Adoption by the Australian; On the other hand, at the national level, the Commercial Code has been modified and a new General Accounting Plan has been drafted, but it is still pending to approve the rules that replace the Consolidated Annual Financial Reporting Standards (which are presumed to be carried out Once the corresponding IFRS have been adopted in order to avoid further divergence in the annual accounts).
Accordingly, for unlisted groups, and according to that Note, the annual accounts should be formulated in accordance with the provisions of the Commercial Code, Accounting Plan and following the models approved by regulation for individual annual accounts approving new models for the presentation in the Mercantile Registry of the annual accounts), with the modifications that are necessary to adapt to the nature that is proper to the consolidated accounts. This results in presenting the group of companies as a single subject to which the accounts refer, so specific items such as:

    – Consolidation goodwill.
    – External partners.
    – Reserves in consolidated companies.
    – Reserves in companies accounted for by the equity method.    – Other adjustments for changes in value of companies accounted for by the equity method.
    – Grants, donations and bequests received in consolidated companies.

How remuneration affects organization culture and bonus payment

The consolidated report does not have a specific format, however, a minimum content commonly referred to as points of the report has been set.
 Combinations of businesses and joint ventures that may exist

Criteria applied to the specific items of the consolidation (for example, “Consolidation goodwill” and “Negative goodwill”, homogenization of items, disposal criteria applied, conversion of the annual accounts to the presentation currency, etc.)

Varied information (name, domicile, shareholding, percentage of voting rights held directly or not) of companies subject to consolidation, and even those that are outside consolidation, because they have a negligible interest in relation to the true image.

The same or similar information for companies accounted for using the equity method or equity method and multi-group companies.

Information on holdings in companies not included in the consolidation and in excess of 5% of the capital of the companies (BPP LEARNING MEDIA., 2016).

Data on the staff employed in the exercise by the different companies in the group (categories, staff costs, etc.), with special attention to senior management and members of the board of directors (salaries, per diems, Pensions or life insurance, advances or credits granted, etc.).

If it is significant for the true image, it should also include information on the nature, business purpose pursued and results obtained with the agreements not included in the consolidated balance sheet (Pesqueux, 2005).

The amount of the remuneration or fees of the auditors of the accounts (broken down by concept).

Breakdown of “external partners” as regards the participation of these minority shareholders in the net worth of the group.

According to the General Chart of Accounts, the allocation of income and expenses to the financial year to which the annual accounts relate and which affect it must be made regardless of the date on which the cash flow of the payment or collection derived from they. In addition “The effects of transactions or economic facts will be recorded when they occur”.

The temporary imputation of income and expenses must be made in function of the actual current that these expenses and income represent and not at the moment in which the monetary or financial stream derived from them occurs.

Once adopted a criterion in the application of these principles, it must be maintained uniformly in time and space as long as the assumptions that have motivated the choice of said criterion are not altered. If justified alteration of the criteria used, this should be mentioned in the Annex, indicating the reasons, as well as their quantitative and, as the case may be, qualitative impact in the periodic financial statements (Insights into IFRS, 2016).

In your discussion using examples from annual reports (of many companies) will assist however focus should be on your company (ies)

GPFR – general purpose financial reports – for users to make financial decisions

Perhaps to affect profit rather than in accordance with AASB or conceptual framework

For financial analysis; the essay on Caltex Australia Limited is made up of three sections. The first section is made up of the need for financial analysis and their purposes, the second is the instruments of financial analysis and the last is the importances of decision making in financial statements.

It shows in each of them a brief but very complete definition, approaching the subjects from different points of view, consulting information of documents of websites on the analysis of financial statements, where the students in administration and related careers orient their attention to this subject, Who when they become graduated professionals, their approach changes, all of the above is through the execution of the financial diagnosis with a business approach, in which entrepreneurs easily identify the current state in which they are, proposals and suggestions from the situation To achieve the objectives set in your company (Rayman, 2013).

In order to identify the purpose of the analysis of financial statements, it is necessary to define them:

The accounting treatment of the finance lease is described in NRV 8 of the PGC, which states that leasing is understood, for the purposes of this standard, any agreement, regardless of its legal instrument, by which the lessor assigns to the lessee , In exchange for receiving a lump sum of money or a series of payments or installments, the right to use an asset for a specified period of time, irrespective of whether the lessor is obliged to provide services in connection with the operation or maintenance of Said asset (Millman, 2008).

The qualification of the contracts as financial or operating leases depends on the circumstances of each of the parties to the contract and therefore may be qualified differently by the lessee and the lessor.

The PGC says that when the economic conditions of a lease agreement indicate that all the risks and rewards inherent in the ownership of the contract asset are transferred, that agreement is to be classified as a finance lease and recorded under the terms Established in the following sections (Rayman, 2013).

AASB has formulated standards in which companies state the different levels of accounts in their financial statements. Accounts receivables are treated as expense account for Caltex Australia Ltd. They are also used as unreceived income for the company, example; unrecieved money from fuel suppliers.

Overstate is declared in the financial statements footnotes. Any overstatement or understatement is written in the financial statements preferably the income statements footnotes.

Bad and doubtful debts are covered in Caltex Australia income statement. However, according to AASB, the balance sheet should include the bad and doubtful debts.

References

BPP LEARNING MEDIA. (2016). IFRS EXPLAINED. [Place of publication not identified]: BPP LEARNING MEDIA.

Drever, M., Stanton, P., McGowan, S., Raar, J., Sofocleous, S. and Ravlic, T. (2007). Contemporary issues in accounting. 1st ed. Milton, Qld.: John Wiley & Sons Australia.

Engdahl, S. (2011). Taxation. 1st ed. Farmington Hills, MI: Greenhaven Press.

Feldstein, M., Hines, J. and Hubbard, R. (2007). The Effects of Taxation on Multinational Corporations. Chicago: The University of Chicago Press.

Financial analysis. (2008). 4th ed. London: BPP Learning Media.

Insights into IFRS. (2016). London: Sweet & Maxwell.

Jones, S. (2012). Contemporary Issues in Sustainability Accounting, Assurance and Reporting. 1st ed. Bradford: Emerald Group Pub.

Liesegang, C. and Runkel, M. (2009). Corporate income taxation of multinationals and fiscal equalization. 1st ed. Munich: Univ., Center for Economic Studies.

Millman, G. (2008). IFRS and privately-held companies. Florham Park, NJ: Financial Executives Research Foundation.

Mulford, C. and Comiskey, E. (2011). The Financial Numbers Game. 1st ed. New York, NY: John Wiley & Sons.

Pesqueux, Y. (2005). Stakeholders in perspective. 1st ed. [Bradford]: Emerald Group Publishing.Rayman, R. (2013). Accounting Standards. 1st ed. Hoboken: Taylor and Francis.Weygandt, J., Kimmel, P. and Kieso, D. (2015). Financial accounting. Hoboken, NJ: John Wiley & Sons, Inc.

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