Notes to the Statement of Cash Flowsfor the financial year ended 31 December 2011Consolidated Company31-Dec-11 31-Dec-10 31-Dec-11 31-Dec-10$'000 $'000 $'000 $'000(i)CASH AT THE END OF THE FINANCIAL YEARFor the purposes of the Statement of Cash Flows, cashincludes cash on hand and in banks and investments inmoney market instruments for the parent entity only,net of outstanding bank overdrafts.Cash and cash equivalents at the end of the financial year asshown in the cashflow statement is reconciled to the relateditems in the Statement of Financial Position as follows:Cash and cash equivalents 6,560 2,331 6,560 2,331(ii)FINANCING FACILITIESThe parent entity has access to:Secured bank loan facilities with various maturityAmount usedAmount unused1,004,458 866,855 1,004,458 866,855356,000 335,000 356,000 335,0001,360,458 1,201,855 1,360,458 1,201,855(iii)RECONCILIATION OF PROFIT FOR THE PERIOD TONET CASH FLOWS FROM OPERATING ACTIVITIESProfit for the period 107,576 60,213 107,879 59,910Depreciation expense 79,553 72,025 79,553 72,025Amortisation of borrowing costs 887 399 887 399Profit on sale of plant & equipment (15) (345) (15) (345)Share of profits of associates not received as dividends or distributions - (303) - -Capitalised interest (17,138) (9,085) (17,138) (9,085)Provision for restoration and rehabilitation movement for the year - 7,000 - 7,000Interest unwinding on rehabilitation provision 3,820 3,560 3,820 3,560Changes in assets & liabilities:Increase/(decrease) in income tax payable 1,598 (7,574) 1,598 (7,574)(Increase)/decrease in trade debtors (151) 1,970 (151) 1,970(Increase)/decrease in other assets, prepayments and deferredborrowing costs (4,339) (8,053) (4,339) (8,053)(Increase)/decrease in inventory 576 672 576 672Increase/(decrease) in deferred taxes 5,366 (2,253) 5,366 (2,253)Increase/(decrease) in trade creditors &provisions (234) 9,383 (234) 9,383Net cash flows from operating activities 177,498 127,609 177,800 127,60921
Notes to the financial statementsfor the financial year ended 31 December 2011NOTE 1 SUMMARY OF ACCOUNTING POLICIES USED IN THE FINANCIAL STATEMENTSSummary of Accounting PoliciesStatement of ComplianceThe financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001,Accounting Standards and Interpretations, and complies with other requirements of the law.The financial report includes the separate financial statements of the company and the consolidated financial statements of theGroup.In the current year, the company has adopted all of the new and revised standards and interpretations issued by the AustralianAccounting Standards Board (the AASB) that are relevant to it’s operations and effective for the company’s annual reportingperiod.New and revised standards and interpretations effective for the current reporting period that are relevant to the company included:• AASB 124 Related Party Disclosures• AASB 9 Financial Instruments (adopted in advance of effective date of 1 January 2013)Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards ensuresthat the financial statements and notes of the company and the consolidated entity comply with International ReportingStandards (IFRS).The financial statements were authorised for issue by the Directors on 27 March 2012.Basis of PreparationThe financial report has been prepared on the basis of historical cost, except for the revaluation of certain non-current assetsand financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts arepresented in Australian dollars, unless otherwise noted.The company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments Commission,relating to the "rounding off" of amounts in the financial report. Amounts in the financial report have been rounded off inaccordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.The preparation of financial statements requires management to make judgements, estimates and assumptions that affect theapplication of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results maydiffer from these estimates.The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates arerecognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision andfuture periods if the revision affects both current and future periods. Refer to Note 12 for Management’s assessment of thecompany’s ability to refinance current borrowings.Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies theconcepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events isreported.The principal accounting policies adopted in preparing the financial report of the parent entity, <strong>Port</strong> <strong>Waratah</strong> <strong>Coal</strong> <strong>Services</strong><strong>Limited</strong>, and the consolidated financial report of the consolidated entity comprising the parent entity, and the entities itcontrolled, are stated to assist in a general understanding of these financial reports. These policies have been consistentlyapplied by entities in the consolidated entity except as otherwise noted.Early adoption of Standards and InterpretationsThe Directors have elected under s.334(5) of the Corporations Act 2001 to apply AASB 9 'Financial Instruments' in advance of itseffective date. The standard is not required to be applied until annual reporting periods beginning 1 January 2013. The impact ofthe adoption of this standard results in a reclassification of $2,835,000 disclosed as shares at cost - other corporations toshares at fair value - other corporations on 1 January 2011. An increase to opening retained earnings at 1 January 2011 of$12,591,032 and an increase to shares held at fair value - other corporations of $12,591,032 to reflect the fair value adjustment inthe equity instrument at 1 January 2011. In addition, a fair value in equity instruments reserve recognised an increment of$164,536 reflecting the fair value movement of shares at fair value for the year ended 31 December 2011.22
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