Caltex Annual Report Financial Statements - Click to Get Solution

Questions: 1. How is the group of companies funded? Share capital, debentures? Any options, bonus issues etc. Who owns the group? 2. Does the published set of group financial statements reveal the companys policy on corporate governance? Audit committees? Sustainability? Solvency? Should it? If so, where and why? Answers: 1. From the annual report, it is clear that the funding is done through share capital. The main intent of the company is to have a strong capital that is not burdened by debentures and hence, share capital forms a major part. There are three major substantial shareholder of the company BlackRock Group, Lazard Asset Management Pacific Co and Perpetual limited. Substantial shareholders mean that they provide the major contribution. Caltex has one class of equity shares that is the ordinary shares and the total number of securities comes to 22,465. The annual report signifies the 20 largest shareholder of Caltex (Caltex, 2015). During the period of reporting, 809001 purchases of shares were done on market and the average cost appeared to be $37.05 per share for the equity incentive plan. Other than it, the company also engaged in buyback of shares that amounted to $270 million market share buyback (Caltex, 2015). The share capital of Caltex consists of 270 million ordinary shares that are fully paid. However, no bonus shares or options were provided to any employee in the reported period. 2. Caltex is listed on the ASX and hence adheres to the principles of the governance. The group is committed to provide the best practice through the governance policies and practices. This enables to cater to the need of the stakeholders and shareholders. The published set of financial statements clearly stress on the corporate governance principles. The company clearly discloses all the relevant facts and figures. Caltex has a strong level of compliance that helps in proper and regular disclosure. This can be witnessed by the disclosure of the financial results, dividends, outlook of the profit, main strategic decisions. All are clearly indicated in the annual report. Moreover, full disclosure is provided on the audit committee which is the major highlight of the principles of the corporate governance (Clarke, 2010). The role of the audit committee and its main features is clearly laid down in the annual report. The charter is available atand can be referred at any point of time. S ustainability is even defined in the annual report. It is a forerunner and disclose all the relevant information on emission under the National Pollutant inventory. It is evident from the disclosure that Caltex is a signatory to the Australian Packaging covenant with a compliance of 100% among the product suppliers. The part dealing with the solvency can be easily projected through the financial statements. Financial statements provide detail explanation of every item and hence, a clear cut interpretation can be done related to the solvency of the company. The principles of corporate governance ensure that proper disclosure is done so that the interest of the shareholder is not compromised (Horngren, 2013). By looking at the financial statements it can be commented that the company adheres to the principles of the corporate governance. Therefore, adequate disclosure is justified. All the sections are properly highlighted indicating that it meets the criteria of corporate governance. References Caltex 2015, Caltex: Annual report and accounts 2014, viewed 23 May 2016. Clarke, T 2010, International Corporate Governance, London and New York, Routledge. Horngren, C 2013, Financial accounting, Frenchs Forest, N.S.W, Pearson Australia Group.