Financial statements CONTENTS Notes to the financial statements 73 Income statement 77 1: Corporate information 74 Balance sheet 77 2: Summary of significant accounting policies 75 Cash flow statement 89 3: Segment information 76 Statement of recognised income and expense 92 4: Revenue and expenses 77 Notes to the financial statements 93 5: Income tax 149 Directors’ report 95 6: Earnings per share 154 Remuneration snaphot 2009 96 7: Dividends paid and proposed 157 Remuneration report 2009 (audited) 97 8: Cash and cash equivalents 174 Directors’ declaration 98 9: Trade and other receivables 175 Independent auditor’s report 100 10: Inventories 176 Annual statement of coal resources and reserves 100 11: Investments backing insurance contracts 178 Shareholder information 100 12: Other current assets 180 Five year financial history 101 13: Available-for-sale financial investments 101 14: Other financial assets 101 15: Investments in associates 104 16: Property, plant and equipment 106 17: Intangible assets and goodwill 109 18: Other non-current assets 109 19: Trade and other payables 110 20: Interest-bearing loans and borrowings 112 21: Provisions 114 22: Insurance liabilities 116 23: Other liabilities 116 24: Contributed equity 118 25: Retained earnings 119 26: Reserves 120 27: Business combinations 120 28: Financial risk management objectives and policies 130 29: Hedging activities 132 30: Commitments and contingencies 133 31: Events after the balance sheet date 133 32: Interest in jointly controlled assets 134 33: Subsidiaries 140 34: Deeds of cross guarantee 142 35: Related party transactions 143 36: Auditor’s remuneration 143 37: Share-based payment plans 145 38: Pension plan 147 39: Director and executive disclosures 72 WESFARMERS ANNUAL REPORT 2009 Income statement for the year ended 30 June 2009 – Wesfarmers Limited and its controlled entities CONSOLIDATED PARENT 2009 2008 2009 2008 Note $m $m $m $m REVENUE Sale of goods 49,023 31,650 150 129 Rendering of services 1,618 1,651 207 59 Interest – subsidiaries – – 7 22 Interest – other 146 121 39 16 Dividends – subsidiaries – – 1,696 1,943 Dividends – other – 32 – – Other 195 130 – – 50,982 33,584 2,099 2,169 EXPENSES Raw materials and inventory purchased (33,719) (21,788) (82) (69) Employee benefits expense 4 (6,535) (4,464) (97) (58) Insurance expenses (1,203) (1,104) (58) (45) Freight and other related expenses (802) (499) – – Occupancy-related expenses 4 (2,008) (1,231) (9) (5) Depreciation and amortisation 4 (1,024) (660) (2) (2) Other expenses (2,833) (1,745) (177) (43) (48,124) (31,491) (425) (222) Other income 4 169 96 10 – Finance costs 4 (963) (800) (851) (698) Share of profits and losses of associates 15 (50) 40 – – Profit before income tax 2,014 1,429 833 1,249 Income tax (expense)/benefit 5 (479) (366) 249 234 Profit attributable to members of the parent 1,535 1,063 1,082 1,483 Earnings per share (cents per share) 6 – basic for profit for the period attributable to ordinary equity holders of the parent 160.0 174.2 – diluted for profit for the period attributable to ordinary equity holders of the parent 159.6 173.3 Dividends per share paid or declared out of profits for the year (cents per share) 7 110.0 200.0 WESFARMERS ANNUAL REPORT 2009 73 Balance sheet as at 30 June 2009 – Wesfarmers Limited and its controlled entities CONSOLIDATED PARENT 2009 2008 2009 2008 Note $m $m $m $m ASSETS Current assets Cash and cash equivalents 8 2,124 725 1,785 131 Trade and other receivables 9 1,893 2,022 6,530 6,295 Inventories 10 4,685 4,638 – – Derivatives 29 38 138 235 181 Investments backing insurance contracts 11 1,003 871 – – Other 12 221 211 – – Total current assets 9,964 8,605 8,550 6,607 Non-current assets Receivables 9 211 135 18,995 19,403 Available-for-sale investments 13 18 36 – – Other financial assets 14 – – 2,899 2,899 Investment in associates 15 392 465 – – Deferred tax assets 5 765 489 144 30 Property, plant and equipment 16 7,126 6,561 35 27 Identifiable intangible assets 17 4,365 4,408 – – Goodwill 17 16,273 16,269 – – Derivatives 29 147 149 168 149 Other 18 34 61 5 11 Total non-current assets 29,331 28,573 22,246 22,519 Total assets 39,295 37,178 30,796 29,126 LIABILITIES Current liabilities Trade and other payables 19 4,037 3,905 130 137 Interest-bearing loans and borrowings 20 634 1,261 437 1,007 Income tax payable 27 106 40 240 Provisions 21 1,066 1,083 180 63 Insurance liabilities 22 1,198 1,137 – – Derivatives 29 413 53 446 180 Other 23 336 277 – – Total current liabilities 7,711 7,822 1,233 1,627 Non-current liabilities Payables 19 3 25 2 – Interest-bearing loans and borrowings 20 5,535 8,256 5,149 7,902 Provisions 21 1,042 922 325 18 Insurance liabilities 22 503 340 – – Derivatives 29 153 89 163 150 Other 23 96 126 24 5 Total non-current liabilities 7,332 9,758 5,663 8,075 Total liabilities 15,043 17,580 6,896 9,702 Net assets 24,252 19,598 23,900 19,424 EQUITY Equity attributable to equity holders of the parent Contributed equity 24 23,286 18,173 23,280 18,167 Employee reserved shares 24 (62) (76) (59) (73) Retained earnings 25 1,183 1,176 714 1,123 Reserves 26 (155) 325 (35) 207 Total equity 24,252 19,598 23,900 19,424 74 WESFARMERS ANNUAL REPORT 2009 Cash flow statement for the year ended 30 June 2009 – Wesfarmers Limited and its controlled entities CONSOLIDATED PARENT 2009 2008 2009 2008 Note $m $m $m $m Cash flows from operating activities Receipts from customers 54,169 35,826 380 391 Payments to suppliers and employees (49,909) (33,561) (65) (187) Dividends received from subsidiaries – – 1,696 1,943 Dividends and distributions received from associates 51 27 – – Dividends received from others – 32 – – Interest received 147 121 47 37 Borrowing costs (816) (620) (729) (561) Income tax paid (598) (374) (352) (354) Reimbursements received from tax consolidated entities – – 402 557 Net cash flows from operating activities 8 3,044 1,451 1,379 1,826 Cash flows from investing activities Net acquisition of insurance deposits (132) (55) – – Purchase of property, plant and equipment and intangibles 16 (1,503) (1,241) (10) (5) Proceeds from sale of property, plant and equipment 61 72 – – Proceeds from sale of controlled entities 9 23 – – Net investments in associates and joint ventures (46) (80) – – Acquisition of subsidiaries, net of cash acquired (16) (4,198) – – Purchase of available-for-sale financial assets – (22) – – Net repayments to subsidiaries – – 245 (6,116) Net cash flows from investing activities (1,627) (5,501) 235 (6,121) Cash flows from financing activities Proceeds from borrowings 2,242 10,489 2,242 10,339 Repayment of borrowings (5,706) (8,178) (5,648) (8,178) Proceeds from exercise of in-substance options under the employee share plan 24 6 24 6 24 Equity dividends paid (1,066) (754) (1,066) (754) Proceeds from issue of shares 24 4,646 2,952 4,646 2,952 Transaction costs from issue of shares (53) (61) (53) (61) Net cash flows from financing activities 69 4,472 127 4,322 Net increase in cash and cash equivalents 1,486 422 1,741 27 Cash and cash equivalents at beginning of period 638 216 44 17 Cash and cash equivalents at end of period 8 2,124 638 1,785 44 WESFARMERS ANNUAL REPORT 2009 75 Statement of recognised income and expense for the year ended 30 June 2009 – Wesfarmers Limited and its controlled entities CONSOLIDATED PARENT 2009 2008 2009 2008 Note $m $m $m $m Foreign currency translation reserve Exchange differences on translation of foreign operations (7) (19) – – Available-for-sale financial assets reserve Changes in the fair value of available-for-sale assets net of tax (2) 26 – – Cash flow hedge reserve Changes in the fair value of cash flow hedges net of tax (468) 51 (242) 54 Restructure tax reserve Recognition of tax losses arising on the 2001 ownership simplification plan – 40 – 40 Retained earnings Actuarial loss on defined benefit plan 25 (41) (21) (4) (1) Net profit/(loss) recognised directly in equity (518) 77 (246) 93 Net profit for the period 1,535 1,063 1,082 1,483 Total recognised income for the period 1,017 1,140 836 1,576 76 WESFARMERS ANNUAL REPORT 2009 Notes to the financial statements for the year ended 30 June 2009 – Wesfarmers Limited and its controlled entities 1: Corporate information In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and The financial report of Wesfarmers Limited (referred to as losses resulting from intra-group transactions have been eliminated. ‘Wesfarmers’ or ‘the Company’) for the year ended 30 June 2009 was authorised for issue in accordance with a resolution of the Subsidiaries are consolidated from the date on which control is directors on 15 September 2009. Wesfarmers is a company limited transferred to the Group and cease to be consolidated from the by shares incorporated in Australia whose shares are publicly traded date on which control is transferred out of the Group. Investments on the Australian Securities Exchange. in subsidiaries are accounted for by the parent at cost less any allowance for impairment. The nature of the operations and principal activities of Wesfarmers Limited and its subsidiaries (‘the Group’) are described in note 3.