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Wool Stocktake : AWI Annual Report 2007-08
notes to the FinAnciAl stAtements 27 contingencies (a) Contingent liabilities The parent entity and Group had contingent liabilities at 30 June 2008 in respect of: Completion accounts Key net tangible assets of Australian Wool Services Limited (AWS) was acquired by Australian Wool Innovation Limited (AWI) on 5 October 2007 at an agreed value of nil. As part of the completion process AWI had the opportunity to contest the balance sheet values assigned by AWS to these assets and liabilities. The Share Purchase and Sale Agreement contained a provision whereby any disputes that could not be agreed by the parties would be referred to any independent expert for determination. Disputes with a maximum potential value of $1.896 million were referred to Chapman Eastway on 1 August 2008. As the annual accounts were being finalised a determination was received from Chapman Eastway. Discussions with GIC in relation to the settlement terms have not been finalised and therefore no classification changes made to the Balance Sheet. If reflected the major impact would be to reduce the value of fixed assets and increase cash. The disputes are focused on the adequacy of the provisions and accruals. Any offsetting adjustment would be made against cash with a nil effect on net assets and no income statement impact. AWI has currently adopted the values set out in the audited Completion Accounts by AWS. Should AWI be successful the impact would be a Balance Sheet reclassification with cash, provisions and accruals all increasing with a nil net impact on net assets. Included in the disputed items are liabilities for tax in two Asian countries. If it is proven that a liability exits then the responsibility for settlement rests with Graziers’ Investment Company Limited. (b) Contingent assets Japan tax losses IWS Nominee Company Limited - Japan is receiving a tax deduction for pension payments to former staff associated with a Pension Scheme that was terminated in 1998. No deferred tax benefit has been recognised in the Completion Accounts as the amount is dependent on future performance of the Company’s operations. The potential tax benefit is approximately $2.4 million. 28 commitments (i) Research and development consoLidated 2008 $ commitments in relation to research and development, technical proving and transfer and, the cost of various goods, services and acquisitions contracted for at the end of the reporting date but not recognised as liabilities, payable: Within one year Later than one year but not later than five years (ii) Non-cancellable operating leases consoLidated 2008 $ commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows: Within one year Later than one year but not later than five years 1,793 4,942 6,735 1,083 4,343 5,426 843 3,970 4,813 960 4,108 5,068 2007 $ 2008 $ PaRent 2007 $ 13,077 4,465 17,542 51,169 14,230 65,399 13,077 4,465 17,542 51,169 14,230 65,399 2007 $ 2008 $ PaRent 2007 $ 98 FINANCIALS AWI 07/08
AWI Annual Report 2008-09
Annual Report 2006-07