ANNuAL
rEporT 2011
AV JENNINGS LIMITED ABN 44 004 327 771
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coNTENTS
Managing Director’s Statement
Company Highlights
Chairman’s Report
1
3
4
Creating and Supporting Communities 7
Property Portfolio
Directors’ Report
Consolidated Statement
of Comprehensive Income
Consolidated Statement
of Financial Position
Consolidated Statement
of Changes in Equity
Consolidated Statement
of Cash Flows
Notes to the Consolidated
Financial Statements
Directors’ Declaration
Independent Auditor’s Report to
the Members of AVJennings Limited
Corporate Governance Statement
Shareholder Information
Company Particulars
Front Cover:
Elysium, Noosa Heads, Queensland
Steve Waugh AO, Corporate Ambassador
8
12
23
24
25
26
27
80
81
82
86
88
To build a community
means understanding how
people want to interact
with their surroundings.
Welcome to
the AVJennings
2011 AnnuAl RepoRt.
While this R epoRt is mAinly A bout
the eVents of the pAst yeAR it is A lso
About ouR pAst A nd ouR futu Re, ouR
stR Ategies A nd V ision.
AVJennings has been creating
residential communities across
Australia since 1932. In that time we
have learnt much about what buyers
want in their homes, in their streets
and in their communities.
Diversity and choice of land
and housing options is the key
to our approach in developing our
residential projects. Our objective
is to plan and then develop land to
create the right infrastructure and
community spaces to meet the
varied needs of our customers
and their families.
We recognise that choosing a place
to live is the biggest economic and
emotional decision for most of our
customers. AVJennings is proud
of its long history of delivering
innovative, quality, affordable land
and housing to meet the needs and
dreams of Australians.
Peter Summers
Managing Director
2 |
AVJennings limited · A bn 44 004 327 771
good design meets mARket demAnd, is
efficient A nd cost effectiVe to deVelop
And is AffoRdAble foR ouR bu yeRs
– i t’s A simple p Remise foR A design led
eVolution of AVJennings pR oJects.
compAny
highlights
26.6
30
25
16.4
20
16.2
15
9.7
25.9
11.2
10
AVJennings deliVeRs solid
m
$
A
Results in unceRtAin mARket.
5
AnnuAl R epoRt 2011
| 3
14.2
14.6
12.9
· Solid result in face of difficult market conditions; focus
5.4
now on delivering Land and Integrated Housing projects
9.6
· The Company continues to deliver housing products
-1.7
that are affordable in its chosen markets
0
-5
-10
-15
-20
m
$
A
30
25
20
15
10
5
0
-5
-10
-15
-20
-10.4
-6.7
· Reflecting buying opportunities that exist in the
-4.6
Australian residential market, AVJennings added 3,000
lots across 4 states.
-12.7
-14.7
-18.1
2006
2007
(annualised)
2008
2009
2010
2011
Profit After Tax 2006–2011
26.6
16.2
-10.4
16.4
9.7
-6.7
25.9
11.2
-14.7
5.4
-12.7
-18.1
Developments
Reported Result
Contract Building
14.2
9.6
-4.6
14.6
12.9
-1.7
(one month)
2006
2007
(annualised)
2008
2009
2010
2011
Key financial highlights to 30 June 2011
A$m (unless stated otherwise)
Revenues from Continuing Operations
Profit before tax from Continuing Operations
Profit after tax from Continuing Operations
Loss after tax from Discontinued Operations†
Net Profit after Tax
Net Debt (includes share of JV debt)
Net Debt (Balance Sheet)
Gross Margins
Earnings per share – Continuing Operations
Earnings per share – All Operations
Net Assets per share
Net Tangible Assets per share
† Division sold 2 August 2010. * Restated.
Developments
Contract Building
Reported Result
FY11 v FY10
% Change
-21.4
+5.9
+2.5
Not applicable
+34.1
+1.1
-1.7
+7.7
+2.8
+34.5
+1.8
+1.9
FY11
210.2
19.9
14.6
(1.7)
12.9
82.3
56.9
26.1%
5.35c
4.72c
$1.11
$1.10
FY10
267.6*
18.8
14.2
(4.6)
9.6
81.4
57.9
18.4%*
5.20c
3.51c
$1.09
$1.08
4 |
AVJennings limited · A bn 44 004 327 771
chAiRmAn’s
RepoRt
to my felloW sh AReholdeRs
A final fully franked dividend of 1.5 cents was declared,
bringing total dividends for the year to 2.5 cents.
Market Overview
Capital Management
The 2011 financial year provided many challenges.
The uncertainty in global economic market conditions
has generally led to greater caution with consumer
confidence at lower levels. Additionally, the wet weather
experienced by most of the eastern Australian states for
much of the year created difficulties in developing and
completing inventory for the Company’s operations.
Despite these challenges, the Company was able to
achieve a solid result for the financial year.
Residential property markets are cyclical. Often, the
best times for acquiring new projects are the times when
selling conditions are less favourable. However, buying
counter to the cycle requires careful capital management
and strict adherence to robust land acquisition strategies,
policies and procedures. During the year, the Company
acquired four projects totalling some 3,000 lots. These
projects were spread across the four states in which we
currently operate and increase the Company’s overall
land bank it controls or manages to some 11,300 lots as
at our financial year end.
Staying focused on the overarching strategic plan
is essential in current times. While not blind to the
challenges of the economic conditions, the Board is
confident that the work it has done to build robust
business systems and property analysis models will
provide a solid foundation as we develop our broad
range of projects across Australia and in New Zealand.
2011 Results
The Company increased its Net Profit after Tax by 34.1%
to $12.9m for the full year to 30 June 2011. Profit from
Continuing Operations was $19.9m before tax, an increase
of 5.9%, and $14.6m after tax. Discontinued Operations,
which consisted of Contract Building, lost $1.7m after tax
from 1 July to 31 July 2010, being the date of its sale.
Revenue at $225.8m was lower from $471.2m due
primarily to the inclusion of only one month’s revenue
of $15.5m for this financial year from Contract Building
prior to its sale. Revenue from Continuing Operations
also dipped, however increased margins resulted in an
overall improved result.
Earnings per share from All Operations rose solidly by
34.5% to 4.72 cents per share (2010: 3.51 cents).
An on-going focus of the Company has been capital
management. As mentioned, the Company has been able
to make significant progress in growing its land base.
Through appropriate structuring using a combination
of term payments, joint ventures and development
agreement structures, it has been able to achieve this
whilst maintaining overall net debt levels at similar levels
to the previous year.
Importantly, the Company also renewed its main banking
facilities for the next two years on generally improved
terms. We value both the support of our banking
partners and the strong relationships we have developed
with them over the years. We look forward to continuing
to build and strengthen those relationships in the future.
Land and Integrated Housing
The sale of Contract Building in early August 2010
enabled Management to focus fully on AVJennings’
core strengths—land development, integrated housing
and low-rise apartments. While the separation did take
a considerable amount of management time, we used
the sale as an opportunity to restructure and streamline
business processes across all parts of the Company and
the Board is pleased with the progress made to date.
AVJennings is focused on providing quality product
choice for its customers, whether that be land for
building, or housing and low-rise apartments constructed
by the Company on its projects. It strives to provide this
product choice within high quality developments that
create great communities.
One of the well-documented issues facing some
consumers is affordability. It is also well-documented
that much of this relates to government land release
and taxing policies. The Company, through its land
management and urban design skills, together with its
internal building capabilities, is well placed to provide
solutions to this issue. The issue of affordability may
have escalated in recent times, but it is not new. For
generations, Australians, especially younger Australians,
have faced the issues of saving a deposit and entering
the market. Over eight decades, AVJennings has been
there to meet these challenges.
AnnuAl R epoRt 2011
| 5
A sense of arrival to an AVJennings project
is part of the overall master planning of a
community. Welcome home.
AVJennings cites its point of difference
as providing a greater range of affordable
living choices with land sales playing a
vital role in delivering this promise.
Our Staff
Despite the challenging year, our staff have remained
focused on the job at hand. We continue to invest in
our staff through the provision of internal scholarships,
training and leadership and mentoring programs.
Board
The Board recognises that the past year has not been
an easy one and is pleased with the drive and dedication
that everyone has shown to produce a solid result in
the 2011 financial year. The Board, through its individual
and collective skills has been able to assist Peter and his
management team to refine the Company’s business
models and develop further its Land and Integrated
Housing processes.
Outlook
Despite the uncertainty in the residential market, the
underlying long term fundamentals remain in place.
There is a gap between having enough adequate supply
to meet demand for housing with factors such as
infrastructure and affordability weighing more largely
in this equation.
Recent months have seen continuing challenging market
conditions, due primarily to lower consumer confidence
levels. On a more positive note, pressure to increase
interest rates has now been replaced with expectations of
no change or possibly a reduction. Likewise the carbon
tax, while it will affect housing costs post its introduction,
could in the short-term act as an incentive for new home
buyers seeking to avoid the additional imposts.
On behalf of the Board, I would like to thank the
professional and dedicated work of our staff as they
have risen to meet the new challenges and changes over
the past year. I also take this opportunity to thank my
fellow directors for their continued support, dedication
and guiding hand in steering AVJennings through these
challenging times.
The foundations we establish and build on today will
serve us well in the long-term. The strength of our
business and brand, our ability to adapt and meet market
conditions, and the dedication and continued efforts of
our staff will be the key drivers of our future.
Simon Cheong
Chairman
6 |
AVJennings limited · A bn 44 004 327 771
Community infrastructure – sports facilities,
health and medical centres, recreational
parks are at the core of our planning.
AVJennings takes seriously its role as a
corporate citizen supporting a broad range
of community and charitable activities.
Staff with balanced lives contribute
better not only to their careers, but
also their communities.
AnnuAl R epoRt 2011
| 7
AVJennings – cReAting And
suppoRting communities
AcRoss the yeARs the
AVJennings bR And hAs come
to RepResent quAlity And
ReliAbility. We hAVe cReAted
communities foR countless
thousA nds of AustR AliAns.
As AVJennings enters its 80th year, we recognise that
many of our customers are not first-time buyers and
many are making their second or even third purchase
from AVJennings. That is something that gives us great
pride. AVJennings is built on its understanding of what
buyers want. To deliver on that over a sustained period
requires many skills, including the ability to move with
changing times.
Choosing a place to live is part of the great Australian
dream. Our investment in innovative design, excellent
land management practices, delivering outstanding
community facilities and great living environments are our
way of staying true to our goal of creating high-quality
communities. We also recognise that we have a crucial
role in ensuring that as many Australians as possible can
achieve that dream by providing affordable choice.
Recently, AVJennings appointed Steve Waugh AO as our
first corporate ambassador. His personal qualities reflect
qualities of AVJennings—dedication to a goal, positive
leadership and integrity, community entrepreneurship
and caring for others. As our ambassador, Steve will
assist AVJennings to ensure that we build connections
with all generations of buyers. Steve will also play a
critical role in helping the Company and its staff in being
the best we can be and being true to those values which
the AVJennings brand stands for.
As a Company whose foundations are in the creating of
communities, we recognise that it is also our role to lend
a helping hand where we can. Great communities support
each other. We recognise that we all need a helping hand
at different times in our lives.
The staff we attract have a strong commitment to their
own communities. As a Company we recognise that
staff with balanced lives contribute better not only to
their careers, but also their communities. To this end
AVJennings has always encouraged its staff to take an
active role in volunteering and supporting charitable
activities and to provide opportunities for them to do so.
AVJennings has also announced its commitment to
support the Steve Waugh Foundation, which works to
improve the quality of life for children and their families
affected by rare diseases. The Foundation and our
staff work together on various fundraising initiatives
to generate significant revenue for the Foundation for
medication, specialised equipment and support programs.
The qualities that
Steve Waugh AO brought
to the cricket field
reflect qualities of the
AVJennings brand. Steve
is the Company’s first
Corporate Ambassador.
8 |
AVJennings limited · A bn 44 004 327 771
pRopeRty
poRtfolio
undeRpinning AVJennings’
stRength As A ResidentiAl
pRopeRty deVelopeR is ouR
bRoAd R Ange of pRoJects. this
spReAd meAns We cAn pRoV ide
A diVeRse R Ange of housing
And lAnd options.
Whether it is land or a completed home or apartment,
AVJennings has the solution, and our commitment to our
projects delivers true peace of mind to our buyers who
can see our attention to detail in all aspects of our work.
Additionally, the geographic spread of our projects across
four states and New Zealand gives the Company greater
scope to weather economic cycles. This competitive
advantage means the Company has the ability to adapt
to changing market conditions as property markets
across Australia often move in different cycles.
As noted in the Chairman’s Report, AVJennings added just
under 3,000 lots across four projects in the past twelve
months, bringing the total number of lots under control
or management to approximately 11,300 (2010: 9,500).
These projects add depth to our project range and further
strengthen growth opportunities over the coming years.
In particular, the projects acquired in South Australia
(Penfield) and New South Wales (Cobbitty) will assist our
growth in these two states for a significant period.
AVJennings is committed to developing housing products
that are affordable to the broadest cross section of home
buyers. We are constantly working to achieve this goal.
Our developments cater for all walks of life delivering
good community infrastructure, well planned parks and
open spaces and access to transport and schools.
With a long tradition in providing quality living options,
AVJennings has become the choice for many Australians
seeking the reassurance that comes with buying from a
trusted Company that offers experience and expertise,
integrity and understanding.
Portfolio strategy balances market cycles and conditions
Projects
No of lots
(at 30 June 2011)
NSW
11
VIC
8
QLD
12
SA
9
2,087
3,496
2,221
2,912
NZ
1
543
TOTAL
41
11,259
Note: Total includes 18 remnant lots across all projects
% of Net Funds Employed
% of Lots by State
New South Wales
Victoria
Queensland
South Australia
New Zealand
38%
23%
24%
13%
2%
New South Wales
Victoria
Queensland
South Australia
New Zealand
18%
31%
20%
26%
5%
AnnuAl R epoRt 2011
| 9
The Ridges, New South Wales
Fitzgibbon Chase, Queensland
Lyndarum internal, Victoria
queenslAnd
NOOSA HEADS
CALOUNDRA
MANGO HILL
FITZGIBBON
BRISBANE
LEICHHARDT
RICHLANDS
CALAMVALE
BETHANIA
COOMERA
AVJennings added two new projects in 2011. The 318
lot Big Sky project at Coomera and the 174 lot project,
Elysium at Noosa Heads. While the Queensland market
has been subdued, the Company’s range of projects will
provide a good base for future years. The Company has
focused on the delivery of innovative, quality affordable
housing options for this market.
Map: Plus Project Mackay
Location
# of Lots
Pre
FY12
FY13
FY14
FY15
FY16
Post
Halpine Lake Stage 10, Mango Hill
Northgate, Mango Hill
Creekwood, Caloundra
Glenrowan, Mackay
Essington Rise, Leichhardt
Nottingham Square, Calamvale
Creekwood Stage 7, Caloundra
Villaggio, Richlands
Bethania
Fitzgibbon Chase, Fitzgibbon
Elysium, Noosa Heads
Big Sky, Coomera
183
42
666
258
135
206
6
128
102
3
174
318
Current projects
Under development
Major city
Pre-delivery Re-zoning and obtaining development approval etc.
Development Construction period
Start of Settlements Date where settlements are scheduled to commence
10 |
AVJennings limited · A bn 44 004 327 771
VictoR iA
MERNDA
WOLLERT
EPPING NORTH
MELBOURNE
OFFICER
PORTARLINGTON
Lyndarum continues to be a stand-out project,
providing a wide choice of land, housing, and
lifestyle options for the growing Epping and Wollert
corridor. Ideally situated near main arterial transport
infrastructure, the development is near a newly opened
shopping centre and sports facilities. During the year we
acquired an interest in Arlington Rise, a 300 lot project at
Portarlington. The Company’s other major project, Arena
at Officer is in the south-east region and has been a solid
performer for a number of years.
Location # of Lots
Pre
FY12
FY13
FY14
FY15
FY16
Post
Riverdale on Plenty, Mernda
Arena at Officer
Lyndarum North, Wollert
5
247
774
Wollert (options) 1,820
Lyndarum, Epping North
Lyndarum JV, 100 O’Herns Rd, Epping North
Lyndarum, 150 O’Herns Rd, Epping North
Arlington Rise, Portarlington
133
121
109
287
neW s outh WAles
HAMLYN TERRACE
WADALBA
CENTRAL COAST
SCHOFIELDS
EASTWOOD
WEST HOXTON
SYDNEY
SYDNEY
OLYMPIC
PARK
COBBITTY
ELDERSLIE
SPRING FARM
GOULBURN
WOLLONGONG
The acquisition of 469 lots at Cobbitty marked the first
acquisition in NSW for some years. The project is in the
rapidly growing south-west sector of Sydney. In recent
years, the Company has looked to increase the amount of
integrated housing in its projects. This has enabled greater
land efficiency to be achieved and resulted in delivering
to customers greater choice at lower price points.
Cavanstone at Eastwood continues to demonstrate
AVJennings’ capabilities in brown-field developments.
A former brickworks site, it is now a high quality project
offering a range of housing choices to customers.
Map: Plus Project Sandy Beach
Location # of Lots
Pre
FY12
FY13
FY14
FY15
FY16
Post
The Ridges, Elderslie
Hamlyn Terrace
Spring Farm
Ravensworth Heights, Goulburn
Seacrest, Sandy Beach
Schofields
Cavanstone, Eastwood
Charterwood, Wadalba
West Hoxton
Boulevard, Sydney Olympic Park
365
440
185
189
137
13
192
45
42
2
Cobbitty
469
AnnuAl R epoRt 2011
| 11
The 1,750 lot Penfield development acquired in
December 2010, is situated north-west of Adelaide
and will be a staged project. The development further
demonstrates AVJennings’ history of partnering with
governments. It ideally complements another joint
venture project, St Clair.
south AustR AliA
PENFIELD
CHELTENHAM
WOODVILLE
ADELAIDE
MURRAY BRIDGE
HUNTFIELD HEIGHTS
GOOLWA
Location
# of Lots
Pre
FY12
FY13
FY14
FY15
FY16
Post
Paringa View, Huntfield Heights
Pathways, Murray Bridge
River Breeze, Goolwa North
St Clair Cheltenham JV, Cheltenham
St Clair Woodville JV, Woodville
5
92
86
924
21
Penfield
1,750
Charles Matthew Circle, Woodville
Brocas Terrace, St Clair
Cameo
2
9
13
neW Ze AlAnd
HOBSONVILLE
AUCKLAND
Hobsonville Point, the redevelopment of the old New
Zealand Air Force base in Auckland, is a joint venture
with the New Zealand government. The project is the first
public, private partnership of its type in New Zealand.
All involved in the project are committed to making
Hobsonville Point the leading project in Auckland and
establishing it as a benchmark for the future.
Location
# of Lots
Pre
FY12
FY13
FY14
FY15
FY16
Post
Hobsonville Point, Hobsonville
543
Current projects
Under development
Major city
Pre-delivery Re-zoning and obtaining development approval etc.
Development Construction period
Start of Settlements Date where settlements are scheduled to commence
12 |
AVJennings limited · A bn 44 004 327 771
diR ectoRs’ RepoRt
foR the yeAR ended 30 June 2011
Your Directors present their Report on the Consolidated
Entity (referred to hereafter as “AVJennings”,
“Consolidated Entity” or “Group”) consisting of
AVJennings Limited (“Company” or “Parent”) and the
entities it controlled at the end of, or during, the year
ended 30 June 2011.
DIRECTORS
The names and details of the Company’s Directors in
office during the financial year and until the date of this
Report are as follows. Directors were in office for this
entire period unless otherwise stated.
S Cheong
RJ Rowley
PK Summers
Chairman (Non-Executive)
Deputy Chairman (Non-Executive)
Managing Director and
Chief Executive Officer
E Sam
Director (Non-Executive)
HR Hochstadt Director (Non-Executive)
Director (Non-Executive)
B Chin
Director (Non-Executive)
BG Hayman
COMPANY SECRETARY
The names of the Company Secretaries in office during
the financial year and until the date of this Report (unless
otherwise stated) are as follows:
CD Thompson
PK Summers
SA Vogiatzakis
PRINCIPAL ACTIVITY
The principal activity of the Consolidated Entity during
the year was Residential Development.
On 1 August 2010 the Company ceased Contract
Building, other than in relation to a Home Improvements
operation in South Australia.
OPERATING RESULTS
The consolidated profit after tax for the financial year
was $12.9 million (2010: $9.6 million).
DIVIDENDS
Dividends paid to members during the financial year
were as follows:
2011
$’000
4,119
2,746
2010
$’000
-
-
2010 final of 1.5 cents per fully paid
share, paid 30 September 2010.
Fully franked @ 30% tax
2011 interim of 1.0 cent per fully
paid share, paid 18 April 2011. Fully
franked @ 30% tax
Total dividends paid
6,865
-
In addition to the above dividends, since the end of
the financial year, the Directors have recommended a
fully franked final dividend of 1.5 cents per share to be
paid on 19 October 2011 (2010: 1.5 cents). The Dividend
Reinvestment Plan remains suspended.
REVIEW OF OPERATIONS
Financial Results
The Company increased its Net Profit after Tax by
34.1% to $12.9m for the full year to 30 June 2011. Profit
from Continuing Operations was $19.9m before tax, an
increase of 5.9%, and $14.6m after tax. Discontinued
Operations, Contract Building, lost $1.7m after tax from
1 July to 31 July 2010, being the date of its sale.
Revenue, at $225.8m, was down from $471.2m due
primarily to the inclusion of only one month’s revenue of
$15.5m from Contract Building prior to its sale. Revenue
from continuing operations was also lower, however
increased margins resulted in an overall improved result.
The Company has produced a solid result in what
were generally difficult trading conditions. Weather
remained one of the biggest hurdles to the Company
reaching its internal revenue targets. The result was
also affected by continuing poor market conditions in
Queensland and while New South Wales has shown some
improvement, it still is a market operating at levels which
are very low historically.
AnnuAl R epoRt 2011
| 13
diR ectoRs’ RepoRt
foR the yeAR ended 30 June 2011
REVIEW OF OPERATIONS (CONTINUED)
Outlook
Business Overview
Overall, the year has seen an increased profit
achieved in difficult market conditions, an increase in
the Company’s inventory levels that support a more
sustainable business, continued low debt levels and a 2
year extension of the Company’s main banking facilities,
and the completion of the sale of its former Contract
Building division.
During the financial year, the Company acquired one
or more projects in each of the Australian States in
which it operates. At 30 June 2011, the total number of
lots under control or management was approximately
11,300 compared to some 9,500 at the start of the year.
The increased inventory levels provide a more solid and
longer term basis for the Company’s operations. The
projects acquired in South Australia and New South
Wales, in particular, will underpin operations in those
States for a significant period.
While market conditions remain difficult in many
regions, the market for acquiring land is very healthy.
The Company still believes medium to long term
fundamentals are solid and is therefore still actively
pursuing acquisitions.
The Company has continued to strengthen its balance
sheet maintaining the emphasis of the past three years
on capital management. The Company is therefore well
placed to grow appropriately the number of projects
under control or management.
As at 30 June 2011, Net Debt, including a proportionate
share of joint venture debt, was $82.3m, almost on par
with the previous year, and a 57.6% reduction from 2008
when Net Debt was $194.3m.
Since year end, the Company has also renewed its main
banking facilities. The facilities, which were due to expire
in September 2011, have been renewed for a further 2
years on generally more favourable terms.
The sale of the loss-making Contract Building operations
has enabled the Company to focus more strongly on its
core strengths of land development, integrated housing
and low-rise apartment construction. However, the
process also required considerable time and effort in
restructuring, particularly in areas such as administration.
This has all been completed during the year and the
Company starts the new financial year better placed in
this regard.
Accordingly, the Board and Management were pleased
with the progress made for the year, in that the Company
as a whole managed well those issues that were within
its control.
As the Company enters the new financial year, there
are certainly challenges ahead with a softening of
market conditions in most States in which the Company
operates. Consumer confidence remains low and
the continued focus on global economic concerns is
reinforcing this.
However, there have been some signs in recent months
in relation to factors that may lead to some improvement
in the new residential housing sector. The significant
upward pressure on interest rates that existed for much
of the first 6 months of the 2011 calendar year has
moderated to some extent. Furthermore, the forecast
uplift in immigration levels from the previous year is
expected to assist demand for housing. There have
also been some more positive signs emerging in New
South Wales following the recent election and change in
government although any improvements are coming off
a very low base.
The introduction of the carbon tax, whilst increasing
the cost of housing post introduction of the tax, will
provide an incentive for purchasers in the short term. The
Company is well placed to capitalise on any such activity.
The recently announced $10,000 grant for new
residential housing in Queensland, which commenced
on 1 August 2011, will hopefully also improve activity.
The Queensland market has suffered from a number
of setbacks in recent times. However, it remains a
traditionally strong market and is expected to return
to more normal levels at some point.
Affordability remains a factor in potential purchasers’
ability to transact, despite the chronic shortage of
housing in many areas. AVJennings has been a market
leader in meeting the challenges of delivering high
quality, affordable land and housing and will continue
to focus on this area.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
The Consolidated Entity’s main banking facilities mature
on 30 September 2011. As a result, the borrowings under
these facilities are shown as a current liability on the
Consolidated Statement of Financial Position at
30 June 2011.
As mentioned in the Review of Operations, subsequent
to the end of the financial year, the Company has
renewed its main banking facilities for a further 2 years
to 30 September 2013.
Ownership of the Contract Building Division was
transferred to Sekisui House Limited effective 1 August
2010. Results for the year ended 30 June 2011 include the
result of the Contract Building Division, as a discontinued
operation for the month of July 2010.
14 |
AVJennings limited · A bn 44 004 327 771
diR ectoRs’ RepoRt
foR the yeAR ended 30 June 2011
SIGNIFICANT EVENTS AFTER THE BALANCE
SHEET DATE
Other than matters relating to the renewal of the
Consolidated Entity’s main banking facilities detailed in
note 24(a), no matter or circumstance has arisen since
30 June 2011 that has significantly affected, or may
significantly affect:
a) the Consolidated Entity’s operations in future financial
years; or
b) the results of those operations in future financial years;
or
c) the Consolidated Entity’s state of affairs in future
financial years.
FUTURE DEVELOPMENTS, PROSPECTS
AND BUSINESS STRATEGIES
Future developments in the operations of the
Consolidated Entity and the expected results of those
operations have not been included in this Report as the
Directors believe that the inclusion of such information
would be likely to result in unreasonable prejudice to the
Consolidated Entity.
The prospects and business strategies of the Consolidated
Entity are discussed on pages 12 to 13 of this Report.
ENVIRONMENTAL REGULATION
The Consolidated Entity’s operations are subject
to various environmental regulations under both
Commonwealth and State legislation, particularly in
relation to its property development activities. The
Consolidated Entity’s practice is to ensure that where
operations are subject to environmental regulations,
those obligations are identified and appropriately
addressed. This includes the obtaining of approvals,
consents and requisite licences from the relevant
authorities and complying with their conditions.
There have been no significant known breaches of
environmental regulations to which the Consolidated
Entity is subject.
INFORMATION ON THE DIRECTORS
Simon Cheong B.Civ.Eng. MBA
Director since 20 September 2001. Mr Cheong has
over 30 years experience in real estate, banking and
international finance. He currently serves as Chairman
and Chief Executive Officer of SC Global Developments
Limited. Mr Cheong has formerly held positions with
Citibank (Singapore) as their Head of Real Estate Finance
for Singapore as well as with Credit Suisse First Boston
as a Director and Regional Real Estate Head for Asia
(excluding Japan).
In 1996, Mr Cheong established his own firm, SC Global
Pte Limited, a real estate and hotel advisory and direct
investment group specialising in structuring large
and complex transactions worldwide. He was elected
President of the prestigious Real Estate Developers’
Association of Singapore (REDAS) for 2 terms from
2007 until 2010. In April 2008, he was supported to
serve on the Board of the Institute of Real Estate Studies,
National University of Singapore. In August 2008,
he was appointed to the Republic Polytechnic Board
of Governors. He was also a Council Member of the
Singapore Business Federation, a position he held from
2007 to 2010. Resident of Singapore.
Responsibilities:
Chairman of the Board, Non-Executive Director, Chairman
of Investments Committee, Member of Remuneration
Committee, Member of Nominations Committee.
Directorships held in other listed entities:
SC Global Developments Limited, Chairman and Chief
Executive Officer, since 14 March 2000.
Jerome Rowley SF Fin, FAICD
Director since 22 March 2007. Mr Rowley has been
a career banker since the early 1970s with Citigroup,
Morgan Grenfell and ABN Amro. From 1992 until 2002,
he served as Managing Director and CEO of ABN Amro
Australia and Head of Relationship Management and
Structured Finance for ABN Amro, Asia Pacific. He has
been active in both wholesale and investment banking
domestically and internationally. During his career,
Mr Rowley devoted considerable effort towards the
recognition, understanding and management of risk as
a means of profit optimization. Of particular significance
was his involvement in advising and funding including
debt, equity and hybrids, of infrastructure projects in
both Australia and Asia Pacific. Resident of Sydney.
Responsibilities:
Deputy Chairman of the Board, Non-Executive Director,
Chairman of Risk Management Committee, Member of
Audit Committee, Member of Investments Committee,
Member of Nominations Committee.
Directorships held in other listed entities:
Anaeco Limited, from 15 August 2005 to 30 April 2009.
AnnuAl R epoRt 2011
| 15
diR ectoRs’ RepoRt
foR the yeAR ended 30 June 2011
INFORMATION ON THE DIRECTORS (CONTINUED)
Peter K Summers B.Ec. CA
Director since 27 August 1998. Mr Summers is a
Chartered Accountant and has been employed with
the Company and its related corporations since 1984,
when he joined the Jack Chia Australia Limited Group
from Price Waterhouse (now PricewaterhouseCoopers).
During Mr Summers’ early period with the group, he
held various management and directorship roles within
the Group. Following the acquisition of the AVJennings
residential business in September 1995, Mr Summers
was appointed Chief Financial Officer, becoming
Finance Director of AVJennings in August 1998. He was
appointed Managing Director and Chief Executive Officer
of the Company on 19 February 2009. Mr Summers
has extensive experience in general and financial
management as well as mergers and acquisitions.
Resident of Melbourne.
Responsibilities:
Managing Director and Chief Executive Officer.
Directorships held in other listed entities:
None.
Elizabeth Sam B.A. Hons (Econ)
Director since 20 September 2001. Mrs Sam has over 40
years experience in international banking and finance.
She has served on numerous high level Singaporean
government financial and banking review committees
and was the Chairman of the Singapore International
Monetary Exchange from 1987 to 1990 and 1993 to 1996.
Resident of Singapore.
Responsibilities:
Non-Executive Director, Chairman of Nominations
Committee, Chairman of Remuneration Committee,
Member of Audit Committee.
Directorships held in other listed entities:
Boardroom Limited, since 15 August 2000.
Kasikorn Bank Plc, Thailand, since 29 March 2001.
SC Global Developments Limited, since 23 July 2002.
Banyan Tree Holdings Limited, since 23 March 2004.
The Straits Trading Company Limited, since 30 April 2008.
Herman R Hochstadt B.A. (Hons), AMP (Stanford-Insead)
Director since 30 June 2004. Mr Hochstadt has over
40 years experience in public administration in several
Singaporean government departments, including over 10
years in the Ministry of Finance and Monetary Authority
of Singapore, and in business, including as Chairman of
Export Credit Insurance Corporation of Singapore, the
Neptune Orient Lines and APL and as a Board Director
of Singapore Airlines. He was Chairman of the Singapore
Turf Club and a member of the Economic Development
Board, Inland Revenue Authority of Singapore, Mass
Rapid Transit Corporation, Port of Singapore Authority
and National Productivity Board; and served as Special
Advisor to the Port & Maritime Authority of Singapore
and as High Commissioner for Singapore to Botswana,
Mauritius, Namibia, South Africa, Swaziland and Tanzania.
Mr Hochstadt is currently Pro-Chancellor of the Nanyang
Technological University. Resident of Singapore.
Responsibilities:
Non-Executive Director, Member of Nominations
Committee, Member of Remuneration Committee.
Directorships held in other listed entities:
None.
Bobby Chin CA (ICAEW) B.Acc.
Director since 18 October 2005. Mr Chin is the
Chairman of Singapore Totalisator Board and serves
on the Boards of Competition Commission of Singapore
and Singapore Labour Foundation. He is also a member
of the Singapore Council of Presidential Advisers.
Mr Chin served 31 years with KPMG Singapore and
was its Managing Partner from 1992 until September
2005. He is a Fellow of the Institute of Certified Public
Accountants in Singapore, and an Associate Member of
the Institute of Chartered Accountants in England and
Wales. Resident of Singapore.
Responsibilities:
Non-Executive Director, Chairman of Audit Committee.
Directorships held in other listed entities:
Oversea-Chinese Banking Corporation Limited,
since 1 October 2005.
Yeo Hiap Seng Limited, since 15 May 2006.
Ho Bee Investment Limited, since 29 November 2006.
Neptune Orient Lines Limited, since 26 December 2006.
Sembcorp Industries Limited, since 1 December 2008.
Bruce G Hayman
Director since 18 October 2005. Mr Hayman has over
42 years commercial management experience with
20 of those at operational Chief Executive or General
Manager Level. He is currently Chairman of Chartwell
Management Services where he brings his very wide
business experience to clients by way of the leadership,
marketing, business performance and coaching
programs he offers. He has fulfilled senior management
roles both in Australia and overseas for companies such
as Nicholas Pharmaceutical Group, Dairy Farm Group,
Hong Kong Land and Seagram Corporation. During his
time in Singapore, he held the position of Foundation
President of the Singapore Australia Business Council. He
has also served as CEO of the Australian Rugby Union.
For his contribution to tourism in Australia, he has been
recognised by Tourism Training Australia with a Platinum
award. He is Chairman of the Board of The Rugby Club
Ltd and is the Deputy Chairman and a Director of the
Australian Diabetes Council – NSW. Resident of Sydney.
16 |
AVJennings limited · A bn 44 004 327 771
diR ectoRs’ RepoRt
foR the yeAR ended 30 June 2011
INFORMATION ON THE DIRECTORS (CONTINUED)
The Remuneration Report is presented under the
following sections:
Bruce G Hayman (Continued)
Responsibilities:
Non-Executive Director, Member of Remuneration
Committee, Member of Nominations Committee,
Member of Investments Committee, Member of Risk
Management Committee.
Directorships held in other listed entities:
None.
INFORMATION ON COMPANY SECRETARIES
Carl D Thompson LLB B. Comm.
Company Secretary since 12 January 2009.
Mr Thompson previously held the company secretary
and general counsel role at Downer EDI Limited.
Prior to that he was a partner at national law firm
Corrs Chambers Westgarth, practising in corporate
and commercial work. Resident of Melbourne.
Sandra A Vogiatzakis B.A.
Company Secretary since 9 November 2004.
Mrs Vogiatzakis has been with the Company and its
related corporations since 1990 and was appointed
Executive Officer in April 2006. Resident of Melbourne.
REMUNERATION REPORT (AUDITED)
This Remuneration Report outlines the remuneration
arrangements of the Company and its controlled entities
in accordance with the requirements of the Corporations
Act 2001 (the Act) and its regulations. This information
has been audited as required by section 308(3C) of
the Act.
The Remuneration Report details the remuneration
arrangements of Key Management Personnel (KMP)
who are defined as those persons having authority and
responsibility for planning, directing and controlling
the major activities of the Company and its controlled
entities, directly or indirectly, including any Director
(whether executive or otherwise) of the Parent Entity
and certain of the Executive Committee members. In
addition, information relating to the five executives
receiving the highest remuneration is provided.
1. Individual Key Management Personnel disclosures
Details of KMP including the top five remunerated
executives are set out below:
(i) Directors
S Cheong
RJ Rowley
PK Summers
E Sam
HR Hochstadt
B Chin
BG Hayman
(ii) Executives
Chairman (Non-Executive)
Deputy Chairman
(Non-Executive)
Managing Director and
Chief Executive Officer
Director (Non-Executive)
Director (Non-Executive)
Director (Non-Executive)
Director (Non-Executive)
Executive Committee Members (KMP)
M Henesey-Smith Chief Operating Officer
SC Orlandi
CD Thompson
Chief Financial Officer
Company Secretary/
General Counsel
General Manager,
Human Resources
L Hunt
Other Executives
(not KMP but in top five remunerated)
P Vlitas
G Marshall
State Manager (Victoria)
State Manager (Queensland)
2. Principles Used to Determine the Nature and Amount
of Remuneration
2.1 The Remuneration Committee
The Remuneration Committee is responsible for making
recommendations to the Board on the remuneration
arrangements for Directors and Executives.
The Remuneration Committee assesses the
appropriateness of the nature and amount of
remuneration of Directors and Executives on a periodic
basis by reference to relevant employment market
conditions, with the overall objective of ensuring
maximum stakeholder benefit from the retention of a high
performing Board and Executive team. The Remuneration
Committee comprises four Non-Executive Directors.
The Chief Executive Officer attends Remuneration
Committee Meetings at the invitation of the Committee’s
Chairman.
2.2 Remuneration Strategy
AVJennings’ remuneration strategy is designed to
attract, motivate and retain employees and Directors
by identifying and rewarding high performers and
recognising the contribution of each employee to the
continued growth and success of the Consolidated Entity.
AnnuAl R epoRt 2011
| 17
diR ectoRs’ RepoRt
foR the yeAR ended 30 June 2011
REMUNERATION REPORT (AUDITED)
(CONTINUED)
2.3 Remuneration Structure
In accordance with best practice corporate governance,
the structure of Non-Executive Director and Executive
remuneration is separate and distinct.
2.4 Non-Executive Director Remuneration
The Board seeks to set aggregate remuneration at a level
that provides the Consolidated Entity with the ability to
attract and retain Directors of the highest calibre, whilst
incurring a cost that is acceptable to Shareholders.
The amount of aggregate remuneration sought to be
approved by Shareholders and the fee structure is
reviewed periodically against fees paid to Non-Executive
Directors of comparable companies.
Two Non-Executive Directors, Mr S Cheong and
Mrs E Sam, do not receive fees, however AVJennings
pays a consulting fee to the Ultimate Parent Entity, SC
Global Developments Limited.
Non-Executive Directors do not participate in any
incentive programs.
The remuneration of Non-Executive Directors for the
years ended 30 June 2011 and 30 June 2010 is detailed
on page 20 of this Report.
2.5 Executive Remuneration
AVJennings aims to reward Executives with a level and
mix of remuneration commensurate with their position
and responsibilities and aligned with market practice.
Targets are set for the Consolidated Entity, each business
unit and individual performance, and Executives are
rewarded against these.
The Chief Executive, members of the Executive
Committee and other senior executives receive a mix of
fixed and variable remuneration. The proportion of fixed
and variable remuneration varies for different levels within
the organisation based on the capacity of managers to
influence the overall outcome of the Consolidated Entity’s
operations and returns to Shareholders.
In addition, AVJennings has in place a Long Term
Incentive (LTI) scheme. The scheme structure was
approved by the Board in April 2010 and allocations were
made to executives in September 2010.
i) Fixed Remuneration
Fixed Remuneration is represented by Total Employment
Cost (TEC) which comprises base salary, superannuation
contributions and other benefits.
Executive contracts of employment do not include any
guaranteed base pay increases. TEC is reviewed annually
by the Remuneration Committee. The process consists
of a review of the Consolidated Entity, business unit
and individual performance, and relevant comparative
remuneration internally and externally.
The fixed component of executive remuneration is
detailed in the tables on page 21.
ii) Variable Remuneration – Short Term Incentive (STI)
A formal STI program has been developed for senior
executives. The objective of the STI program is to link
executive remuneration with appropriate performance
targets. STI’s for corporate executives are linked to
corporate results as well as individual performance targets,
whereas STI’s for state executives are linked to business
unit results as well as individual performance targets.
An STI program exists for operational management. The
objective of the STI program is to link the achievement
of the Consolidated Entity’s operational targets with the
remuneration received by the Executives charged with
meeting those targets. The potential STI available is set at
a level so as to provide sufficient incentive to the Executive
to achieve the operational targets and such that the cost
to AVJennings is reasonable in the circumstances.
Actual STI payments awarded depend on the extent
to which specific targets set at the beginning of the
financial year are met. The targets consist of a number
of Key Performance Indicators (KPIs) relating to financial
outcomes (such as contribution to net profit before tax
for the business unit or the business segment); business
outcomes (such as efficient and effective performance
of functions); and cultural factors (such as improved
safety performance and leadership). These measures
were chosen because they represent the key drivers for
the short-term success of the business and provide a
framework for delivering long-term value.
On an annual basis, after consideration of the
performance against the KPIs, the Remuneration
Committee determines the amount, if any, of the short-
term incentive to be paid to each Executive. This usually
occurs within two months of the reporting date. Amounts
payable are delivered as a cash bonus in the following
reporting period.
18 |
AVJennings limited · A bn 44 004 327 771
diR ectoRs’ RepoRt
foR the yeAR ended 30 June 2011
REMUNERATION REPORT (AUDITED)
(CONTINUED)
2.5 Executive Remuneration (Continued)
iii) Variable Remuneration – Long Term Incentive (LTI)
Share-based compensation
The AVJ Deferred Employee Share Plan (the Plan) was
formed to administer the employee share scheme. The
Plan operates schemes under which shares may be
acquired by the Plan Trustee on behalf of employees
for no cash consideration subject to certain vesting
conditions being satisfied. Shares acquired under the
Plan for employees are acquired on-market. Employees
may elect not to participate in the scheme. Shares held
by the Plan’s trust and not yet allocated to employees
at the end of the reporting period are shown as treasury
shares in the financial statements.
Share-based compensation benefits are provided to
Executives via the Plan. These equity-settled transactions
are measured at fair value at the grant date. The original
cost of the shares is treated as a reduction in share capital
and the underlying shares identified separately as treasury
shares. The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a
straight-line basis over the vesting period and the credit
taken to share-based payment reserve in equity.
Vesting subject to service condition only
The Chief Executive Officer was granted 1,000,000
shares on 7 March 2009 which vest in equal proportions
on the first, second and third anniversary of his
appointment. The vesting dates are 19 February 2010,
19 February 2011 and 19 February 2012. The market
value of the shares at the grant date is taken to be the
fair value. The service condition is the continuity of
employment over the 3 years. The unvested shares are
held by the AVJ Deferred Employee Share Plan Trust.
Vesting subject to both service and performance
conditions
A total of 1,375,452 shares were granted on
28 September 2010 to certain executives. As detailed in
the table on page 19, these include 1,136,816 shares for
KMP and 97,800 shares for executives who are amongst
the five highest remunerated. The remaining shares
were granted to executives who were neither KMP nor
amongst the five highest remunerated.
These shares are subject to both service and
performance conditions and will vest to the extent that
each of these conditions is satisfied.
The service vesting condition is that the employee must
still be employed by AVJennings at 30 September 2013,
except in the event of death or permanent disablement in
which case the shares will vest to the estate. In the event
that the employee is retrenched, the shares may vest
subject to certain conditions.
•
The performance vesting conditions are:
•
Total Shareholder Return (TSR) performance
measured against the ASX Small Industrials Index; and
Earnings Per Share (EPS) growth. AVJennings’ EPS
growth for the performance period must meet or
exceed the target set. The EPS hurdle for total vesting
of this grant is 10% p.a. growth for the three financial
years to 30 September 2013.
Half of the allocation is assessed against each
performance condition. The vesting schedule for the TSR
performance condition is set out in the table below. The
holder of the shares is entitled to receive all dividends
paid between grant and vesting date.
AVJennings’ TSR rank against
companies in the Index
Percentage vesting
< median
At the median
Nil
50%
> median but < 75th percentile
Pro-rata between 50th
and 75th percentiles
>=75th percentile
100%
The fair value of the EPS element of the shares is the
market value at grant date. The Monte Carlo Model is
used to fair value the TSR element. The Model simulates
AVJennings’ TSR and compares it against the ASX Small
Industrials Retail Index. The Model takes into account
historic dividends, share price volatilities and the risk-free
yield on an Australian Government Bond at the grant
date matching the remaining effective life of 3 years.
AnnuAl R epoRt 2011
| 19
diR ectoRs’ RepoRt
foR the yeAR ended 30 June 2011
REMUNERATION REPORT (AUDITED) (CONTINUED)
2.5 Executive Remuneration (Continued)
iii) Variable Remuneration – Long Term Incentive (LTI) (Continued)
Name
Executive Committee
Members (KMP)
PK Summers
PK Summers
M Henesey-Smith
CD Thompson
SC Orlandi
L Hunt
Other Executives (not KMP
but in top five remunerated)
P Vlitas
G Marshall
Total
Shares Granted
Number of Shares Vested
Year
Granted
Number
Fair Value
Unvested
at 1 July
2010
Vested
during the
year
Unvested
at 30 June
2011
2009
2011
2011
2011
2011
2011
2011
2011
1,000,000
$ 180,000
666,667
333,333
333,334
691,591
$ 312,945
691,591
158,344
$
71,651
158,344
106,183
$ 48,048
102,458
$ 46,362
106,183
102,458
78,240
$ 35,404
78,240
51,229
46,571
$
$
23,181
21,074
51,229
46,571
-
-
-
-
-
-
-
691,591
158,344
106,183
102,458
78,240
51,229
46,571
2,234,616
$ 738,665
1,901,283
333,333
1,567,950
AVJennings prohibits Executives from entering into arrangements to protect the value of unvested LTI awards.
This prohibition includes entering into hedging arrangements in relation to AVJennings shares.
3. Group Performance
The table below shows the Consolidated Entity’s earnings performance as well as the movement in the Consolidated
Entity’s Earnings Per Share (EPS) and Total Shareholder Return (TSR) over the current and previous 4 years.
Financial Report
Date
30 June 2007
30 June 2007
30 June 2008
30 June 2009
30 June 2010
30 June 2011
* Pro-rata for 12 months.
Financial Period
15 months
12 months annualised *
12 months
12 months
12 months
12 months
Profit / (Loss)
After Tax
$’000
12,164
9,731
11,231
(12,724)
9,616
12,893
Basic EPS Cents
TSR Cents
5.50
4.40
4.87
(4.68)
3.51
4.72
(0.02)
(0.02)
(0.67)
(0.34)
0.21
0.05
4. Employment Contracts
i) Chief Executive Officer
Mr Summers’ contract of employment does not have a
termination date and does not stipulate a termination
payment. However, it specifies a six month notice period.
Details regarding the remuneration paid to Mr Summers
are contained in the table on page 20.
During the year no options were either granted to,
or exercised by, Mr Summers. There are currently no
unexercised or outstanding options.
ii) Other Executives
The remaining AVJennings Executives are full time
permanent employees with executive employment
contracts. The employment contracts do not have
termination dates or termination payments. However,
they specify a notice period of three months. There are
no other terms or conditions that differ significantly from
the standard employment contracts applicable to other
AVJennings employees. During the year, no options were
granted to, or exercised by, the Executives. There are
currently no unexercised or outstanding options.
20 |
AVJennings limited · A bn 44 004 327 771
diR ectoRs’ RepoRt
foR the yeAR ended 30 June 2011
REMUNERATION REPORT (AUDITED) (CONTINUED)
5. Remuneration of Key Management Personnel and the five highest paid Executives of the Company and the
Consolidated Entity
Details of the nature and amount of each element of remuneration of Directors and Executives are set out in the tables
on pages 20 and 21. The Directors are the same as those identified in the Directors’ Report and Executives include the
five highest paid Executives.
6. Remuneration Options: Granted and Vested During the Year
No options were either granted or exercised during the year. There are currently no unexercised or outstanding
options. None of the Directors or Executives hold any options.
Directors
Short-Term
Post Employment
Long-Term
Share-
based
Payment
Total
Performance
Related
Salary /
Fees
$
Cash
Bonus
$
Other
$
Superannuation(3)
$
Long Service
Leave
$
Shares
$
$
%
30 June 2011
S Cheong(1)
-
RJ Rowley
77,982
-
-
-
-
-
7,018
-
-
-
-
-
85,000
-
-
PK Summers(2) 424,847 123,750 63,200
46,543
38,192 163,989
860,521
23.47
E Sam(1)
-
HR Hochstadt
50,000
B Chin
60,000
BG Hayman
45,872
-
-
-
-
-
-
-
-
-
-
-
4,128
-
-
-
-
-
-
-
-
-
50,000
60,000
50,000
658,701 123,750 63,200
57,689
38,192 163,989 1 ,105,521
30 June 2010
S Cheong(1)
-
RJ Rowley
82,482
-
-
-
-
PK Summers(4) 453,254 87,500 262,500
E Sam(1)
-
HR Hochstadt
50,000
B Chin
60,000
BG Hayman
60,872
-
-
-
-
-
-
-
-
-
50,585
25,000
-
-
-
5,478
-
-
-
-
-
133,067
12,508
60,000
900,762
38.86
-
-
-
-
-
-
-
-
-
50,000
60,000
66,350
-
-
-
-
706,608 87,500 262,500
81,063
12,508
60,000 1,210,179
(1) These Directors were not paid fees. A consulting fee of
(a) Directors are also reimbursed for airfares (other than the
$50,000 per month was paid to the ultimate parent entity
SC Global Developments Limited which covers the services
of these Directors. International airfares to attend meetings
are paid for by a related entity.
(2) ‘Other’ relates to the value of motor vehicle benefits.
(3) Payments to Defined Contribution Plans. Consists of
Superannuation Guarantee Contribution payments as well as
employee voluntary contributions. The Consolidated Entity
does not contribute to any Defined Benefit Plans.
(4) ‘Other’ relates to a non-cash bonus. The post-tax amount of
the bonus was allocated to the existing Employee Share Plan
to purchase AVJennings shares which vested immediately. The
shares cannot be sold or transferred until 8 September 2013.
international airfares for those Directors referred to in (1)),
and other expenses relating to the provision of
their services.
(b) With the exception of share-based compensation for the
Chief Executive referred to in 2.5(iii), there were no other
share-based payments made to Directors in the year
under review.
-
-
-
-
-
-
AnnuAl R epoRt 2011
| 21
diR ectoRs’ RepoRt
foR the yeAR ended 30 June 2011
REMUNERATION REPORT (AUDITED) (CONTINUED)
Executives
Short-Term
Post
Employment
Salary /
Fees
$
Cash
Bonus
$
Other (1)
$
Superannuation (2)
$
Long-
Term
Long
Service
Leave
$
Share-
Based
Payment
Shares
$
Total
Performance
Related
$
%
30 June 2011
M Henesey-Smith
285,828
42,500
15,000
SC Orlandi
282,216
8,250
CD Thompson
222,227
21,375
L Hunt
196,615
10,500
-
-
-
Other Executives
P Vlitas
G Marshall
266,584
-
17,951
222,127
30,000
9,489
52,128
15,199
56,599
15,199
20,575
23,989
18,074
17,913
431,443
9,490
11,591
326,746
3,067
12,012
315,280
1,758
8,851
232,923
15,441
5,795
326,346
9,826
5,268
300,699
14.00
6.07
10.59
8.31
1.78
11.73
1,475,597 112,625 42,440
183,689
57,656
61,430 1,933,437
30 June 2010
M Henesey-Smith
265,051
80,000
15,577
A Soutar(3)
SC Orlandi
272,370
-
-
260,517
20,000
20,025
CD Thompson
249,347
25,000
L Hunt
197,441
15,000
-
-
49,812
49,708
13,747
37,135
13,966
11,409
1,768
7,403
1,624
807
-
-
-
-
-
421,849
18.96
323,846
321,692
313,106
227,214
-
6.22
7.98
6.60
Other Executives
P Vlitas
249,435
40,000
18,641
18,692
9,766
-
336,534
11.89
1,494,161 180,000 54,243
183,060
32,777
- 1,944,241
(1) Represents the value of motor vehicle benefits.
(2) Payments to Defined Contribution Plans. Consists of Superannuation Guarantee Contribution payments as well as employee
voluntary contributions. The Consolidated Entity does not contribute to any Defined Benefit Plans.
(3) Transferred with the discontinued Contract Building division.
MEETINGS OF DIRECTORS AND DIRECTORS’ COMMITTEES
The number of meetings of Directors and Directors’ committees held during the year, for the period the Director was
a Member of the Board or a Committee, and the number of meetings attended by each Director are detailed below.
Full Meetings
of Directors
Meetings of Committees
Audit
Remuneration
Nominations
Risk Management
Held Attended
Held Attended
Held Attended
Held Attended
Held Attended
S Cheong
RJ Rowley
PK Summers
E Sam
HR Hochstadt
B Chin
BG Hayman
7
7
7
7
7
7
7
7
7
7
7
7
7
7
-
3
-
3
-
3
-
-
3
-
3
-
3
-
1
-
-
1
1
-
1
1
-
-
1
1
-
1
1
1
-
1
1
-
1
1
1
-
1
1
-
1
-
1
-
-
-
-
1
-
1
-
-
-
-
1
Investments Committee
The Investments Committee does not formally meet in person. It conducts physical inspections of certain major
development sites and receives detailed briefings from management on all major development sites prior to
consideration of formal acquisition proposals which are dealt with by way of circular resolution.
22 |
AVJennings limited · A bn 44 004 327 771
diR ectoRs’ RepoRt
foR the yeAR ended 30 June 2011
DIRECTORS’ INTERESTS
The relevant interests of the Directors in the shares of the
Company at the date of this Report are:
Director
S Cheong
E Sam
PK Summers
RJ Rowley
Number
137,370,023
149,534
942,147
180,000
INDEMNIFYING OFFICERS
During the year, the Consolidated Entity paid a premium
in respect of a contract insuring its Directors and
employees against liabilities that may be incurred in
defending civil or criminal proceedings that may be
brought against the Officers in their capacity as Officers
of entities in the Consolidated Entity. In accordance
with common practice, the insurance policy prohibits
disclosure of the nature of the liability insured against
and the amount of the premium.
ROUNDING OF AMOUNTS
The amounts contained in this Report and in the
Financial Statements have been rounded to the
nearest $1,000 (where rounding is permitted) under the
option available to the Company under the Australian
Securities and Investments Commission (ASIC) Class
Order 98/100. The Company is an entity to which the
Class Order applies.
AUDITOR’S INDEPENDENCE DECLARATION
We have obtained the following Independence Declaration from our auditors, Ernst & Young:
In relation to our audit of the financial report of AVJennings Limited for the financial year ended 30 June 2011, to the
best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the
Corporations Act 2001 or any applicable code of professional conduct.
Ernst & Young
28 September 2011
NON-AUDIT SERVICES
David Simmonds
Partner
Liability limited by a scheme approved under Professional
Standards Legislation
A number of non-audit services were provided by the Consolidated Entity’s auditor, Ernst & Young. These non-audit
services are detailed in note 8 to this Financial Report. The Directors are satisfied that the provision of non-audit services
is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The nature
and scope of each type of non-audit service provided means that auditor independence was not compromised.
This Report is made in accordance with a resolution of the Directors.
Simon Cheong
Director
28 September 2011
Peter Summers
Director
consolidAted stAtement of compRehensiVe i ncome
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 23
Note
2011
$’000
2010
$’000
Continuing operations
Revenues
Share of profits of associates and joint venture entities
accounted for using the equity method
Change in inventories, finished goods and work-in-progress
5
210,246
267,639
1,779
(153,986)
2,124
(219,083)
Other operational expenses
Advertising expenses
Display costs
Employee expenses
Depreciation and amortisation expense
Finance costs
Fair value gain on interest rate derivatives
Other expenses
Profit from continuing operations before income tax
Income tax expense
Profit from continuing operations after income tax
Discontinued operations
(5,375)
(3,437)
(1,088)
(21,535)
(486)
(914)
441
(5,702)
19,943
(5,343)
14,600
5
5
9
(4,030)
(3,389)
(1,096)
(21,869)
(1,639)
(641)
2,856
(2,043)
18,829
(4,584)
14,245
Loss from discontinued operations after income tax
10
(1,707)
(4,629)
Net profit for the year
12,893
9,616
Other comprehensive income
Foreign currency translation
Other comprehensive loss for the year net of tax
(427)
(427)
(1)
(1)
Total comprehensive income for the year
12,466
9,615
Earnings per share for profit from continuing operations
attributable to ordinary equity holders of the parent:
Cents
Cents
Basic earnings per share
Diluted earnings per share
Earnings per share for profit attributable to ordinary
equity holders of the parent:
Basic earnings per share
Diluted earnings per share
12
12
12
12
5.35
5.19
4.72
4.57
5.20
5.16
3.51
3.48
24 |
AVJennings limited · A bn 44 004 327 771
consolidAted s tAtement of f inAnciAl p osition
As At 30 June 2011
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Assets of disposal group classified as held for sale
Total current assets
NON-CURRENT ASSETS
Inventories
Investments accounted for using the equity method
Property, plant and equipment
Intangible assets
Total non-current assets
Total assets
CURRENT LIABILITIES
Trade and other payables
Derivative financial instruments
Interest-bearing loans and borrowings
Tax payable
Provisions
Liabilities directly associated with the assets classified as held for sale
Total current liabilities
NON-CURRENT LIABILITIES
Trade and other payables
Interest-bearing loans and borrowings
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Note
2011
$’000
2010
$’000
13
14
15
16
15
17
21
22
23
24
25
27
23
24
26
27
12,260
17,159
131,231
1,300
-
24,110
15,409
100,571
1,712
43,228
161,950
185,030
285,630
41,131
1,087
2,816
241,591
41,268
1,866
2,816
330,664
287,541
492,614
472,571
48,485
68
62,529
3,540
3,235
-
34,288
509
67,212
905
3,565
21,966
117,857
128,445
43,400
6,619
19,516
694
11,650
15,014
17,398
646
70,229
44,708
188,086
173,153
304,528
299,418
Equity attributable to equity holders of the parent
Contributed equity
Reserves
Retained earnings
Total equity
28
29(a)
29(c)
121,835
122,578
(94)
81
182,787
176,759
304,528
299,418
consolidAted s tAtement of chAnges in equity
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 25
At 1 July 2009
Profit for the year
Other comprehensive loss for the year
Total comprehensive income for the year
Transactions with owners in their capacity
as owners:
- Share-based payment reserve
At 30 June 2010
Profit for the year
Other comprehensive loss for the year
Total comprehensive income for the year
Transactions with owners in their
capacity as owners:
Attributable to equity holders of the Parent
Total equity
Foreign
Currency
Translation
Reserve
Share-based
Payment
Reserve
Retained
Earnings
Issued
capital
Note
$’000
$’000
$’000
$’000
$’000
122,578
1
21
167,143
289,743
-
-
-
-
-
-
(1)
(1)
-
-
-
9,616
9,616
-
(1)
9,616
9,615
-
60
-
60
(1)
60
9,616
9,675
122,578
-
-
-
-
-
(427)
(427)
81
176,759
299,418
-
-
-
-
-
242
12,893
12,893
-
(427)
12,893
12,466
-
-
-
(743)
10
242
-
(6,865)
(6,865)
- Treasury shares acquired
28(b)
(743)
-
- Foreign currency translation reserve
- Share-based payment reserve
- Dividends paid
11
-
-
-
10
-
-
At 30 June 2011
121,835
(417)
323
182,787
304,528
(743)
(417)
242
6,028
5,110
26 |
AVJennings limited · A bn 44 004 327 771
consolidAted s tAtement of cA sh f loWs
foR the yeAR ended 30 June 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers, land vendors and employees
Interest paid
Income tax paid
Note
2011
$’000
2010
$’000
248,672
(254,104)
(10,863)
(1,157)
491,400
(434,203)
(13,751)
-
Net cash (used in) / from operating activities
30
(17,452)
43,446
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
21
Proceeds from sale of discontinued operations
Interest received
Distribution received
Dividends received
Investments in associates and joint venture entities
Net cash from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings
Loans from related parties
Repayment of borrowings
Payment of finance lease liability
Payment for treasury shares
Equity dividends paid
28(b)
819
(657)
21,304
907
4,510
1,000
(3,594)
24,289
124,238
2,000
(137,120)
(207)
(743)
(6,865)
629
(756)
-
567
1,120
-
(243)
1,317
136,098
-
(162,549)
(677)
-
-
Net cash used in financing activities
(18,697)
(27,128)
NET INCREASE (DECREASE) IN CASH HELD
Cash and cash equivalents at beginning of year
Effects of exchange rate changes on cash and cash equivalents
(11,860)
24,110
10
17,635
6,475
-
CASH AND CASH EQUIVALENTS AT END OF YEAR
13
12,260
24,110
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 27
1. CORPORATE INFORMATION
b) New accounting standards and interpretations
The Consolidated Financial Report of AVJennings
Limited for the year ended 30 June 2011 was authorised
for issue in accordance with a resolution of the Directors
on 28 September 2011.
AVJennings Limited (the Parent) is a Company limited
by shares incorporated in Australia whose shares are
publicly traded on the Australian Securities Exchange
and the Singapore Exchange through the Central Limited
Order Book (CLOB). The ultimate parent is SC Global
Developments Limited, a company incorporated in
Singapore which owns 50.03% of the ordinary shares
in AVJennings Limited.
The Consolidated Entity (“AVJennings”, “Consolidated
Entity” or “Group”) consists of AVJennings Limited (the
“Company” or the “Parent Entity”) and its controlled
entities. The nature of the operations and principal
activities of the Consolidated Entity are described in
the Directors’ Report.
2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of preparation
The Financial Report is a general purpose financial
report, which has been prepared in accordance
with the requirements of the Corporations Act 2001,
Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards
Board. The Financial Report has also been prepared
on a historical cost basis, except for derivative financial
instruments which have been measured at fair value.
The preparation of financial statements requires the use
of certain critical accounting estimates. It also requires
management to exercise its judgement in the process
of applying accounting policies. The areas involving a
higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the
Financial Statements, are disclosed in note 4.
The Financial Report is presented in Australian Dollars
and all values are rounded to the nearest thousand
dollars ($’000) unless otherwise stated.
a) Compliance with IFRS
The Financial Report also complies with the International
Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board.
The accounting policies adopted are consistent with
those of the previous financial year except as follows:
The following new Standards and amendments to
Standards are mandatory for the first time for the
financial year beginning 1 July 2010. The adoption of
these Standards did not have any impact on the current
period or any prior period and is not likely to affect future
periods:
•
•
•
AASB 2009-8 Amendments to Australian Accounting
Standards – Group Cash-settled Share-based Payment
Transactions [AASB 2] effective 1 January 2010
AASB 2009-5 Further Amendments to Australian
Accounting Standards arising from the Annual
Improvements Project [AASB 5, 8, 101, 107, 117, 118, 136
& 139] effective 1 January 2010
AASB 2010-3 Amendments to Australian Accounting
Standards arising from the Annual Improvements
Project effective 1 July 2010
Australian Accounting Standards and Interpretations
that have recently been issued or amended but are not
yet effective have not been adopted by AVJennings for
the annual reporting period ended 30 June 2011. The
Directors believe that these new or amended Standards
and Interpretations do not have any material effect on
the Financial Statements presented.
c) Basis of consolidation
The Consolidated Financial Statements incorporate the
assets and liabilities of all subsidiaries of AVJennings
Limited as at 30 June 2011 and the results of all
subsidiaries for the year then ended.
Subsidiaries are all entities (including special purpose
entities) over which the Group has the power to
govern the financial and operating policies, generally
accompanying a shareholding of more than one-half of
the voting rights. The existence and effect of potential
voting rights that are currently exercisable or convertible
are considered when assessing whether a Group controls
another entity.
Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account
for business combinations by the Group (refer to note 2(d)).
Intercompany transactions, balances and unrealised gains
on transactions between group companies are eliminated.
28 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
c) Basis of consolidation (Continued)
Unrealised losses are also eliminated unless the
transaction provides evidence of the impairment of the
asset transferred. Accounting policies of the subsidiaries
are consistent with the policies adopted by the Group.
Non-controlling interests are allocated their fair share
of the net profit or loss after tax in the Consolidated
Statement of Comprehensive Income and are presented
within equity in the Consolidated Statement of Financial
Position, separately from the equity of the owners of the
parent.
The Group has formed the AVJ Deferred Employee Share
Plan Trust to administer the Group’s employee share
scheme. This Trust is consolidated, as substance of the
relationship is that the trust is controlled by the Group.
Shares held by the Trust are disclosed as treasury shares
and deducted from contributed equity.
d) Business combinations
Business combinations are accounted for using the
acquisition method. The consideration transferred for
the acquisition of a subsidiary comprises the fair values
of the assets transferred, the liabilities incurred and the
equity interests issued by the Consolidated Entity. The
consideration transferred also includes the fair value
of any asset or liability resulting from a contingent
consideration arrangement and the fair value of any
pre-existing equity interest in the subsidiary. Acquisition-
related costs are expensed as incurred. For each business
combination, the Group recognises any non-controlling
interest in the acquiree either at fair value or at the
non-controlling interest’s proportionate share of the
acquiree’s net identifiable assets.
The excess of the consideration transferred, the amount
of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previous equity interest
in the acquiree over the fair value of the group’s share
of the net identifiable assets acquired is recorded as
goodwill. If those amounts are less than the fair value of
the net identifiable assets of the subsidiary acquired and
the measurement of all amounts has been reviewed, the
difference is recognised directly in profit and loss as a
bargain purchase.
Where settlement of any part of the cash consideration
is deferred, the amounts payable in the future are
discounted to their present value as at the date of
exchange. The discount rate used is the entity’s
incremental borrowing rate, being the rate at which a
similar borrowing could be obtained from an independent
financier under comparable terms and conditions.
Contingent consideration is classified either as equity
or a financial liability. Amounts classified as a financial
liability are subsequently remeasured to fair value with
changes in fair value recognised in profit and loss.
e) Investments in subsidiary companies and controlled
entities
Investments in controlled entities are accounted for in the
Consolidated Financial Statements as set out in note 2(c).
Joint ventures are accounted for as set out in note 2(f)
and investments in associates are accounted for as set
out in note 2(g).
f) Joint ventures
Jointly controlled assets:
Interest in jointly controlled assets is accounted for using
proportionate consolidation. AVJennings recognises its
interest in the jointly controlled assets by recognising its
interest in the assets and liabilities of the joint venture. It
also recognises its share of expenses and income from
the use and output of the jointly controlled asset. Details
of the jointly controlled assets are set out in note 20.
Joint venture entities:
The interest in a joint venture entity is accounted for
using the equity method after initially being recognised
at cost. Under the equity method, the share of the profits
or losses of the joint venture entity are recognised in
the profit and loss, and the share of post-acquisition
movements in reserves is recognised in other
comprehensive income. Dividends received from joint
venture entities are recognised as a reduction in the
carrying amount of the investment. Details relating to
joint venture entities are set out in note 17(b).
Profits or losses on transactions with joint venture
entities are eliminated to the extent of the Consolidated
Entity’s ownership interest until such time as they are
realised by the jointly controlled entity on consumption
or sale. However, a loss on the transaction is recognised
immediately if the loss provides evidence of a reduction
in the net realisable value of current assets, or an
impairment loss.
g) Investments in associates
Investments in associates are accounted for using the
equity method of accounting. Associates are entities over
which the Consolidated Entity has significant influence
and that are neither subsidiaries nor joint ventures.
Under the equity method, investments in associates
are carried in the Consolidated Statement of Financial
Position at cost plus post-acquisition changes in the
Consolidated Entity’s share of the net assets of the
associates, less any impairment with respect to the net
investment in the associate.
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 29
2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
g) Investments in associates (Continued)
The Consolidated Entity’s share of an associate’s profits
or losses is recognised in the Consolidated Statement of
Comprehensive Income. The cumulative post-acquisition
movements are adjusted against the carrying amount of
the investment. Dividends receivable from associates are
recognised as a reduction in the carrying amount of the
investment. Details relating to associates are set out in
note 17(a).
When the Consolidated Entity’s share of losses in an
associate equals or exceeds its interest in the associate,
including any unsecured long-term receivables, the
Consolidated Entity does not recognise further losses,
unless it has incurred obligations or made payments on
behalf of the associate.
Profits or losses on transactions with associates are
eliminated to the extent of the Consolidated Entity’s
ownership interest until such time as they are realised by
the associate on consumption or sale. However, a loss
on the transaction is recognised immediately if the loss
provides evidence of a reduction in the net realisable
value of current assets, or an impairment loss.
The reporting dates of the associate and the
Consolidated Entity are identical and the associate’s
accounting policies conform to those used by the
Consolidated Entity.
h) Segment reporting
Operating segments are reported in a manner consistent
with the internal reporting provided to the chief
operating decision maker. Discreet financial information
is available for each segment to assess its performance
and enable the chief operating decision maker to make
decisions about allocation of resources.
Operating segments that meet the quantitative criteria
as prescribed by AASB 8 are reported separately.
However, an operating segment that does not meet the
quantitative criteria is still reported separately where
information about the segment would be useful to users
of the Financial Statements.
Information about the business activities and operating
segments that are below the quantitative criteria are
combined and disclosed in a separate category called
“other”.
i) Property, plant and equipment
Property, plant and equipment are stated at historical
cost less accumulated depreciation and any accumulated
impairment losses.
Depreciation is calculated on a straight-line basis over the
estimated useful life of the specific assets as follows:
Plant, equipment, and motor vehicles
Motor vehicles
Leasehold improvements
3–7 years
2–3 years
3–10 years
Assets held under finance leases are depreciated over
their expected useful lives on the same basis as owned
assets.
An asset’s carrying amount is written down immediately
to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by
comparing proceeds with the carrying amount.
These are included in the Consolidated Statement of
Comprehensive Income.
The assets’ useful lives and amortisation methods are
reviewed, and adjusted if appropriate, at each financial
year-end.
Derecognition:
An item of property, plant and equipment is
derecognised upon disposal or when no further future
economic benefits are expected from its use or disposal.
j) Borrowing costs
Borrowing costs consist of interest and other costs that
are incurred in connection with the borrowing of funds.
A condition of the main banking facilities (refer to
note 24(a)) is that the Consolidated Entity manages
interest rate risk by entering into interest rate derivative
contracts. To the extent that borrowings under the main
banking facilities relate to qualifying assets, the net
amounts payable under these derivative contracts are
capitalised to the cost of the underlying assets.
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, (i.e.
assets that necessarily take a substantial period of
time to get ready for their intended use or sale), are
capitalised as part of the cost of those assets during the
period of time required to complete and prepare the
assets for their intended use or sale.
Temporary investment income earned on borrowings
pending their expenditure on qualifying assets is
deducted from borrowing costs eligible for capitalisation.
All other borrowing costs are expensed.
30 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
k) Intangible assets
Intangible assets acquired separately or in a business
combination are initially measured at cost. The cost of
an intangible asset acquired in a business combination is
its fair value as at the date of the acquisition. Following
initial recognition, intangible assets are carried at cost
less any accumulated amortisation and any accumulated
impairment losses. The Consolidated Entity does not
capitalise any expenditure resulting in the creation of
internally generated intangible assets.
The useful lives of intangible assets are assessed to be
either finite or indefinite. Intangible assets with finite
lives are amortised over the expected useful life of
the asset and tested for impairment whenever there
is an indication that the asset may be impaired. The
amortisation period and the amortisation method for
an intangible asset is reviewed at least at each financial
year-end. Changes in the expected useful life or the
expected pattern of consumption of future economic
benefits embodied in the asset are accounted for
prospectively by changing the amortisation period or
method, as appropriate, which is a change in accounting
estimate. The amortisation expense on intangible assets
with finite lives is recognised in profit or loss in the
expense category consistent with the function of the
intangible asset.
Intangible assets with indefinite useful lives are tested for
impairment annually. Such intangibles are not amortised.
The useful life of an intangible asset with an indefinite life
is reviewed each reporting period to determine whether
indefinite life assessment continues to be supportable. If
not, the change in the useful life assessment from indefinite
to finite is accounted for as a change in accounting estimate
and is thus accounted for on a prospective basis.
l) Inventories
Inventories are stated at the lower of cost and net
realisable value. Net realisable value is the estimated
selling price in the ordinary course of business, less
estimated costs of completion and the estimated costs
necessary to make the sale. Estimates of net realisable
value are based on the most recent evidence available
at the time the estimates are made, of the amount the
inventories are expected to realise and the estimate of
costs to complete.
Development projects and land:
Cost includes the costs of acquisition, development,
borrowings and all other costs directly related to specific
projects. Borrowing and holding costs such as rates
and taxes incurred after completion of development
and construction are expensed. Costs expected to
be incurred under penalty clauses and rectification
provisions are also included.
Construction contracts:
Construction work-in-progress is stated at the aggregate
of contract costs incurred to date plus recognised profits
less recognised losses and progress billings. Contract
costs include all costs directly related to specific contracts,
and costs that are specifically chargeable to the customer
under the terms of the contract. The stage of completion
is measured using the percentage of completion method.
m) Non-current assets (or disposal groups) held for sale
and discontinued operations
Non-current assets and disposal groups are classified as
held for sale and measured at the lower of their carrying
amount and fair value less costs to sell if their carrying
amount will be recovered principally through a sale
transaction instead of use. For an asset or disposal group
to be classified as held for sale, it must be available for an
immediate sale in its present condition and its sale must
be highly probable.
An impairment loss is recognised for any initial or
subsequent write-down of the asset (or disposal group)
to fair value less costs to sell. A gain is recognised for
any subsequent increases in fair value less costs to sell
of an asset (or disposal group), but not in excess of any
cumulative impairment loss previously recognised. A gain
or loss not previously recognised by the date of the sale
of the non-current asset (or disposal group) is recognised
at the date of derecognition.
A discontinued operation is a component of the entity
that has been disposed of or is classified as held for sale
and that represents a separate major line of business and
is part of a single coordinated plan to dispose of such a
line of business. The results of discontinued operations
are presented separately on the face of the Consolidated
Statement of Comprehensive Income and the assets and
liabilities are presented separately on the face of the
Consolidated Statement of Financial Position.
n) Trade and other receivables
Trade receivables are carried at the amount invoiced less
a provision for impairment.
Settlement terms for trade receivables are:
Development housing and land sales –
•
generally between 30 and 180 days
Contract building (progress billing) –
generally between 7 and 30 days
•
Collectability of trade receivables is reviewed on an
ongoing basis. Individual debts that are known to be
uncollectible are written-off when identified. A provision
for impairment is recognised when there is objective
evidence that the Consolidated Entity will not be able
to collect the receivable. The amount of the impairment
loss is the difference between the carrying amount of
the receivable and the present value of estimated future
cash flows, which are not discounted for short-term
receivables as the effect of discounting is immaterial.
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 31
The discount rate used to determine the present value
reflects current market assessments of the time value of
money and the risks specific to the liability. The increase
in the provision resulting from the passage of time is
recognised in finance costs.
r) Employee benefits
Wages, salaries, annual leave and sick leave:
Liabilities for wages and salaries, including non-monetary
benefits and annual leave expected to be settled
within 12 months of the reporting date, are recognised
in respect of employees’ services up to the reporting
date. They are measured at the amounts expected to be
paid when the liabilities are settled. Expenses for non-
accumulating sick leave are recognised when the leave is
taken and are measured at the rates paid or payable.
Long service leave:
The liability for long service leave is recognised and
measured as the present value of expected future
payments to be made in respect of services provided
by employees up to the reporting date using the project
unit credit method. Consideration is given to expected
future wage and salary levels, experience of employee
departures and periods of service. Expected future
payments are discounted at a pre-tax rate that reflects
the time value of money.
Superannuation contributions:
Contributions to superannuation plans are recognised
as an expense in the Consolidated Statement of
Comprehensive Income as they become payable.
Bonus entitlements:
A liability is recognised for bonus entitlements where
contractually obliged or where there is a past practice
that has created a constructive obligation.
s) Share-based payment transactions
Share-based compensation benefits are provided to
Executives via the AVJ Deferred Employee Share Plan.
These equity-settled transactions are measured at fair
value at the grant date.
The original cost of equity-settled transactions is treated
as a reduction in share capital and the underlying shares
identified separately as treasury shares. The fair value
determined at the grant date of the equity-settled share-
based payments is expensed on a straight-line basis over
the vesting period and the credit taken to share-based
payment reserve in equity.
2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
n) Trade and other receivables (Continued)
Where a receivable is expected to be settled more than
twelve months after the reporting date, its carrying
amount is discounted using the effective interest rate
method. The difference between the carrying amount
and the present value is recorded in the Statement of
Comprehensive Income.
o) Cash and cash equivalents
Cash and cash equivalents in the Consolidated Statement
of Financial Position comprise cash at bank and in hand
and short-term deposits with a maturity of three months
or less, that are readily convertible to known amounts
of cash, and which are subject to an insignificant risk of
changes in value.
For the purposes of the Consolidated Statement of
Cash Flows, cash and cash equivalents consist of cash
and cash equivalents as defined above, net of bank
overdrafts. Bank overdrafts are included within interest-
bearing loans and borrowings in current liabilities in the
Consolidated Statement of Financial Position.
p) Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at the
fair value of the consideration received less directly
attributable transaction costs. The difference between
the proceeds (net of transaction costs) and the
redemption amount is recognised in profit and loss over
the period of the borrowings using the effective interest
method. Fees paid on establishment of loan facilities
are capitalised as a prepayment and amortised over the
period of the facility to which it relates.
Borrowings are classified as current liabilities unless
there is an unconditional right to defer settlement of the
liability for at least 12 months after the reporting date.
q) Provisions
Provisions are recognised when the Consolidated Entity
has a present legal or constructive obligation as a result
of a past event, it is probable that an outflow of resources
will be required to settle the obligation and the amount
can be reliably estimated.
When the Consolidated Entity expects some or all of
a provision to be reimbursed, for example under an
insurance contract, the reimbursement is recognised
as a separate asset but only when the reimbursement
is virtually certain. The expense relating to any
provision is presented in the Consolidated Statement of
Comprehensive Income net of any reimbursement.
Provisions are measured at the present value of
management’s best estimate of the expenditure required
to settle the present obligation at the reporting date.
32 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
t) Leases
Consolidated Entity as lessee:
Finance leases, which transfer to the Consolidated
Entity substantially all the risks and benefits incidental
to ownership of the leased item, are capitalised at the
inception of the lease at the fair value of the leased asset
or, if lower, at the present value of the minimum lease
payments. Lease payments are apportioned between the
finance charges and reduction of the lease liability so as
to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are recognised as
an expense in profit or loss.
Capitalised leased assets are depreciated over the
shorter of the estimated useful life of the asset and the
lease term if there is no reasonable certainty that the
Consolidated Entity will obtain ownership by the end of
the lease term.
Operating lease payments are recognised as an expense
in the Consolidated Statement of Comprehensive Income
on a straight-line basis over the lease term. Operating
lease incentives are recognised as a liability when
received and subsequently reduced by allocating lease
payments between rental expense and reduction of the
liability.
Consolidated Entity as lessor:
Leases in which the Consolidated Entity retains
substantially all the risks and benefits of ownership of
the leased asset are classified as operating leases. Initial
direct costs incurred in negotiating an operating lease
are added to the carrying amount of the leased asset
and recognised as an expense over the lease term on the
same basis as rental income.
u) Revenue recognition
Revenue is measured at the fair value of the
consideration received or receivable. Revenue is
recognised for the major business activities as follows:
Development projects and land sales:
Revenue from the sale of land, houses and apartments
is recognised when the risks and rewards have been
transferred and the Consolidated Entity retains neither
continuing managerial involvement to the degree
associated with ownership, nor effective control over
the units sold. This is usually considered to occur on
settlement. In certain circumstances, land sales are
recognised prior to settlement where there is a signed
unconditional contract for sale.
Construction contracts:
Contract building relates to Home Building Agreements
and the like, where there is a contract to build a house or
provide other residential construction services. Contract
revenue and expenses are recognised in accordance
with the percentage of completion method unless the
outcome of the contract cannot be reliably estimated.
Where the outcome of a contract cannot be reliably
estimated, contract costs are recognised as an expense
as incurred, and where it is probable that the costs will be
recovered, revenue is recognised to the extent of costs
incurred. Where it is probable that a loss will arise from
a construction contract, the excess of total costs over
revenue is recognised as an expense immediately.
Interest revenue:
Revenue is recognised as interest accrues using the
effective interest rate method.
Management fees:
Revenue is recognised upon delivery of the services.
v) Income tax
Current tax assets and liabilities for the current year are
measured at the amount expected to be recovered from,
or paid to, the taxation authorities based on current
year’s taxable income. The tax rates and tax laws used
to compute the amount are those that are enacted or
substantively enacted at the reporting date.
Current income tax relating to items recognised
directly in equity is recognised in equity and not in the
Consolidated Statement of Comprehensive Income.
Deferred income tax is provided on all temporary
differences at the reporting date between the tax bases
of assets and liabilities and their carrying amounts for
financial reporting purposes.
Deferred income tax assets are recognised for all
deductible temporary differences, carry-forward of
unused tax credits and unused tax losses, to the extent
that it is probable that taxable profit will be available
against which the deductible temporary differences, and
the carry-forward of unused tax credits and unused tax
losses can be utilised.
The carrying amount of deferred income tax assets is
reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable
profit will be available to allow all or part of the deferred
income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed
at each reporting date and are recognised to the extent
that it has become probable that future taxable profit will
allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured
at the tax rates that are expected to be applied in the
year when the asset is realised or the liability is settled,
based on tax rates (and tax laws) that have been enacted
or substantively enacted at the reporting date.
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 33
2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
Commitments and contingencies are disclosed net of
the amount of GST recoverable from, or payable to, the
taxation authority.
v) Income tax (Continued)
Deferred tax assets and deferred tax liabilities are offset
only if a legally enforceable right exists to set-off current
tax assets against current tax liabilities and the deferred
tax assets and liabilities relate to the same taxable entity
and the same taxation authority.
Tax consolidation:
AVJennings Limited and its wholly-owned controlled
entities implemented the Tax Consolidation Legislation as
of 1 July 2002.
The Head Entity, AVJennings Limited, has entered into an
agreement with its wholly-owned subsidiary, AVJennings
Properties Limited, under which AVJennings Properties
Limited will account for the current and deferred tax
amounts of the controlled entities in the Tax Consolidated
Group. The Consolidated Entity has applied the group
allocation approach in determining the appropriate
amount of current taxes and deferred taxes to allocate to
the members of the Tax Consolidated Group.
In addition to its own current and deferred tax amounts,
AVJennings Properties Limited also recognises the
current tax liabilities (or assets) and the deferred tax
assets arising from unused tax losses and unused tax
credits assumed from controlled entities in the Tax
Consolidated Group.
Assets or liabilities arising under tax funding agreements
with the tax consolidated entities are recognised as
amounts receivable from, or payable to, other entities in
the Group.
w) Other taxes
Revenues, expenses and assets are recognised net of the
amount of GST except:
•
when the GST incurred on purchase of goods and
services is not recoverable from the taxation authority,
in which case the GST is recognised as part of the cost
of acquisition of the asset or as part of the expense
item as applicable
receivables and payables, which are stated with the
amount of GST included.
•
The net amount of GST recoverable from, or payable to,
the taxation authority is included as part of receivables
or payables in the Consolidated Statement of Financial
Position.
Cash flows are included in the Consolidated Statement of
Cash Flows on a gross basis and the GST component of
cash flows arising from investing and financing activities,
which is recoverable from, or payable to, the taxation
authority is classified as part of operating cash flows.
x) Derivative financial instruments
The Consolidated Entity uses interest rate swaps and
caps to hedge its risk associated with interest rate
fluctuations. These derivatives do not qualify for hedge
accounting and changes in fair value are recognised
immediately as income or expenses in profit and loss.
Derivative financial instruments are initially recognised
at fair value on the date a derivative contract is entered
into and are subsequently remeasured to their fair value
at the end of each reporting period. Derivative financial
instruments are not held for trading purposes.
y) Trade and other payables
Trade and other payables represent liabilities for goods
and services provided to the Consolidated Entity prior
to the end of the financial year which are unpaid. The
amounts are unsecured and are usually paid within 30 to
60 days of recognition.
z) Earnings per share
Basic earnings per share is calculated as net profit
attributable to members of the parent, adjusted to
exclude any costs of servicing equity (other than
dividends), divided by the weighted average number of
ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit
attributable to members of the parent, adjusted for:
• costs of servicing equity (other than dividends);
• the after tax effect of dividends and interest
•
associated with dilutive potential ordinary shares that
have been recognised as expenses; and
other non-discretionary changes in revenues or
expenses during the period that would result from
the dilution of potential ordinary shares, divided by
the weighted average number of ordinary shares and
dilutive potential ordinary shares, adjusted for any
bonus element.
aa) Contributed equity
Ordinary shares are classified as equity. Incremental
costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax,
from the proceeds.
Treasury shares:
The Company’s own equity instruments, which are
reacquired for later use in employee share-based
payment arrangements (treasury shares), are deducted
from equity. No gain or loss is recognised in profit or
loss for the purchase, sale, issue or cancellation of the
Company’s own equity instruments.
34 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
ab) Foreign currency translation
(i) Functional and presentation currency:
Both the functional and presentation currency of
AVJennings Limited and its Australian subsidiaries
is Australian Dollars ($). A controlled entity, AVJ
Hobsonville Pty Limited, has a branch in New Zealand
whose functional currency is New Zealand Dollars
which is translated to the presentation currency for
consolidation reporting.
(ii) Transactions and balances:
Foreign currency transactions are translated into the
Entity’s functional currency at the rates of exchange
prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement
of such transactions and from the translation at reporting
date exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in
profit and loss, except when they are deferred in equity
as they are attributable to part of the net investment in a
foreign operation.
Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated
using the exchange rates as at the date of the initial
transaction. Non-monetary items measured at fair value
in a foreign currency are translated using the exchange
rates at the date when the fair value was determined.
(iii) Translation of Group Companies’ functional currency
to presentation currency:
The results and financial position of foreign operations
that have a functional currency different from
the presentation currency are translated into the
presentation currency as follows:
•
assets and liabilities for each balance sheet presented
are translated at the closing rate at the date of that
balance sheet;
income and expenses for each statement of
comprehensive income are translated at average
exchange rates;
•
• all resulting exchange differences are recognised in
other comprehensive income.
On consolidation, exchange differences arising from
the translation of any net investment in foreign entities
are recognised in other comprehensive income. When
a foreign investment is sold, the proportionate share of
such exchange difference is reclassified to profit and loss
as part of the gain or loss on sale where applicable.
ac) Comparative figures
To enable meaningful comparison, some comparatives
have been reclassified to conform with the current year’s
presentation.
3. FINANCIAL RISK MANAGEMENT
The Consolidated Entity’s principal financial instruments
comprise receivables, payables, finance leases,
derivatives, cash, bank loans and overdrafts.
Risk Management is carried out by a central treasury
department under policies approved by the Board of
Directors. The objective of the policies is to support the
delivery of financial targets and manage key financial
risks such as interest rates, foreign currency, credit and
liquidity. The overall risk management program focuses
on the unpredictability of financial markets and seeks
to minimise potential adverse effects on the financial
performance of the Consolidated Entity.
AVJennings enters into derivative transactions,
principally interest rate cap and interest rate swap
contracts, to hedge interest rate risk exposures.
Derivatives are exclusively used for hedging purposes, i.e.
not as trading or other speculative instruments.
The Consolidated Entity uses different methods to
measure and manage different types of risks to which it
is exposed. These methods include sensitivity analysis in
the case of interest rates and ageing analysis for credit
risk. Liquidity risk is managed through the development
of future rolling cash flow forecasts and the continuity of
funding through the facilities mentioned in notes 24(a)
and 24(b).
Primary responsibility for identification and control of
financial risks rests with management under the authority
of the Board. The Board reviews and agrees on policies
for managing each of the risks identified below.
(i) Interest rate risk
The Consolidated Entity’s exposure to market interest
rates relates to the obligations arising from interest-
bearing loans and overdraft. The level of debt is disclosed
in note 24.
The policy is to manage finance costs using a mix
of fixed and variable rate debt with a target to have
approximately 50% of forecast average borrowings
at fixed or capped rates of interest. Forecast average
borrowings are derived from periodic rolling cash flow
forecasts which include an allowance for potential
acquisitions. Please refer to the table on page 35 for the
position at the reporting date.
To manage the mix of fixed and variable debt in a cost
efficient manner, the Consolidated Entity enters into
interest rate cap and floating-to-fixed interest rate swap
contracts. It is acknowledged that fair value exposure on
derivatives is a by product of the Consolidated Entity’s
attempt to manage the cash flow volatility arising from
interest rate changes.
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 35
3. FINANCIAL RISK MANAGEMENT (CONTINUED)
(i) Interest rate risk (Continued)
Interest rate cap contracts are entered into for a notional principal amount by paying an upfront premium that covers
a specific period. The strike rates for these contracts are benchmarked against the BBSY bid rate (Australian Bank
Bill Swap Reference Rate - Average Bid Rate) on a quarterly basis. Settlement occurs quarterly, in favour of the
Consolidated Entity, should the BBSY bid rate be above the cap strike rate (movements in the variable rate are directly
proportional to movements in the BBSY bid rate).
By entering into interest rate swaps, the Consolidated Entity agrees to exchange, at the end of each quarter, the
difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional
principal amount.
The Consolidated Entity’s interest rate derivatives do not qualify for hedge accounting treatment. Gains or losses
arising from changes in fair value are recognised in profit or loss.
At the reporting date, the following variable rate borrowings, interest rate swap and interest rate cap contracts
were outstanding:
Weighted
average
interest rate
%
4.04
6.72
9.16
2011
2010
Weighted
average
interest rate
%
4.04
6.98
8.33
Balance
$’000
(24,110)
82,000
226
58,116
(65,000)
(65,000)
(71,884)
Balance
$’000
(12,260)
69,119
29
56,888
(15,000)
(15,000)
26,888
Cash
Bank loans
Lease liabilities
Net financial liabilities
Interest rate caps
Interest rate swaps
Under/(over)-hedged borrowings
Interest rate derivative contracts are exposed to fair value movements if interest rates change. Details of these
contracts are outlined in note 24(e).
At 30 June 2011, after taking into account the effect of interest rate swaps, approximately 17.3% of available borrowings
are at fixed or capped rates of interest (2010: 76.0%).
The Consolidated Entity constantly analyses its interest rate exposure. Within this analysis, consideration is given to
potential renewals of existing positions, alternative financing, alternative hedging positions and the mix of fixed and
variable interest rates.
The following sensitivity analysis is based on the interest rate exposures in existence at the balance sheet date.
At 30 June 2011, if interest rates had moved, as illustrated in the table below, with all other variables held constant, post
tax profit and other comprehensive income would have been affected as follows:
+1.00% (100 basis points)
+0.50% (50 basis points)
-0.50% (50 basis points)
Post Tax Profit
Higher/(Lower)
Other Comprehensive Income
Higher/(Lower)
2011
$’000
203
94
(84)
2010
$’000
48
24
(7)
2011
$’000
-
-
-
2010
$’000
-
-
-
36 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
3. FINANCIAL RISK MANAGEMENT (CONTINUED)
(i) Interest rate risk (Continued)
The above fluctuations in post tax profit and other comprehensive income are net of interest capitalised to inventories.
The effect on the basis that no interest is capitalised, would be as follows:
Post Tax Profit
Higher/(Lower)
Other Comprehensive Income
Higher/(Lower)
2011
$’000
(54)
(34)
44
2010
$’000
48
24
(24)
2011
$’000
-
-
-
2010
$’000
-
-
-
+1.00% (100 basis points)
+0.50% (50 basis points)
-0.50% (50 basis points)
(ii) Foreign currency risk
AVJ Hobsonville Pty Limited is a subsidiary which has a branch in New Zealand. The entire operations of the branch,
including purchases of inventory denominated in New Zealand Dollars, are funded by AVJennings Properties Limited
(another subsidiary) through an intragroup account.
The Consolidated Statement of Financial Position can be affected by the exchange rate movements between New
Zealand Dollar and Australian Dollar. This exposure is not hedged as the effects are not considered to be material.
The Consolidated Entity also has transactional exposures. Such exposure arises from sales or purchases by an
operating entity in currencies other than the functional currency. This exposure is not material in relation to the branch
in New Zealand.
At balance date, the Consolidated Entity had the following exposure to New Zealand Dollar foreign currency that is not
designated in cash flow hedges:
Financial Assets
Cash and cash equivalents
Trade and other receivables
Total Financial Assets
Financial Liabilities
Trade and other payables
Total Financial Liabilities
Net exposure
2011
NZ$’000
2010
NZ$’000
1,390
4,080
5,470
(12,342)
(12,342)
(6,872)
610
481
1,091
(9,611)
(9,611)
(8,520)
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 37
3. FINANCIAL RISK MANAGEMENT (CONTINUED)
(ii) Foreign currency risk (Continued)
At balance date, had the Australian Dollar moved, the effect of exposure to New Zealand Dollar foreign currency that is
not designated in cash flow hedges is illustrated in the following table:
Post Tax Profit
Higher/(Lower)
Other Comprehensive Income
Higher/(Lower)
2011
$’000
2010
$’000
-
-
-
-
-
-
2011
$’000
(834)
483
1,019
2010
$’000
(706)
409
863
Consolidated
AUD/NZD +10%
AUD/NZD - 5%
AUD/NZD -10%
(iii) Price risk
The Consolidated Entity does not have commodity and
equity securities price risk.
(iv) Credit risk
Credit risk arises from financial assets which comprise
cash and cash equivalents, trade and other receivables,
derivative instruments and the granting of financial
guarantees. Exposure to credit arises from potential
default of the counterparty, with a maximum exposure
equal to the carrying amount of the financial assets (as
outlined in each applicable note) as well as $15,663,000
(2010: $871,000) in relation to financial guarantees
granted – see note 32 for further information.
Contracts for Land, Integrated Housing and Apartments
usually require payment in full prior to passing of title to
customers. In the event that title is to pass without full
payment being received, appropriate credit verification
procedures are performed prior to executing the contract.
Derivative counterparties and cash deposits are limited
to financial institutions approved by the Board.
The Consolidated Entity has no significant concentrations
of credit risk and does not hold any credit derivatives to
offset its credit exposure.
(v) Liquidity risk
Liquidity risk arises from the financial liabilities of the
Consolidated Entity and its ability to repay them as and
when they fall due.
The objective is to maintain a balance between
continuity of funding and flexibility through the use
of bank overdrafts, bank loans, finance leases and
committed available credit facilities. Liquidity risk is
managed by monitoring forecast cash flows on a monthly
basis and matching the maturity profiles of financial
assets and liabilities.
The current main banking facilities were due to mature
on 30 September 2011. Subsequent to the year-end, the
Consolidated Entity has received approval to extend
these for a further 2 years to 30 September 2013.
Documentation is in the process of being completed
and is expected to be signed by 30 September 2011,
as outlined in note 24(a). In addition, the Consolidated
Entity operates certain project funding facilities which
are discussed in note 24(b).
At 30 June 2011, 90.4% (2010: 81.7%) of the Consolidated
Entity’s interest bearing loans and borrowings will
mature in less than one year. Based upon the approved
extension of the Company’s main banking facilities to
30 September 2013, 18.1% of the Consolidated Entity’s
debt at 30 June 2011 will mature in less than one year.
A. Non-derivative financial liabilities:
The liquidity risk disclosures on page 38 reflect all
contractually fixed pay-offs, repayments and interest
resulting from recognised financial liabilities and financial
guarantees as of 30 June 2011. For the other obligations,
the respective undiscounted cash flows for the respective
upcoming fiscal years are presented. The timing of cash
flows is based on the contractual terms of the
underlying contract.
However, where the counterparty has a choice of
when the amount is paid, the liability is allocated to the
earliest period in which it can be required to be paid. For
financial guarantee contracts, the maximum amount of
the guarantee is allocated to the earliest period in which
the guarantee can be called.
The risk implied from the values shown in the table
on page 38, reflects a balanced view of cash inflows
and outflows of non-derivative financial instruments.
The Consolidated Entity ensures that sufficient liquid
assets are available to meet all the required short-term
cash payments.
38 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
3. FINANCIAL RISK MANAGEMENT (CONTINUED)
(v) Liquidity risk (Continued)
A. Non-derivative financial liabilities: (Continued)
Year ended 30 June 2011
Liquid Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Interest-bearing loans and borrowings*
Financial Guarantees
< 6 months
$’000
6–12 months
$’000
> 1–5 years
$’000
Total
$’000
12,260
17,159
29,419
27,045
58,805
15,663
-
-
-
-
-
-
21,440
5,266
-
43,400
7,132
-
12,260
17,159
29,419
91,885
71,203
15,663
101,513
26,706
50,532
178,751
Net maturity
(72,094)
(26,706)
(50,532)
(149,332)
Year ended 30 June 2010
Liquid Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Interest-bearing loans and borrowings*
Financial Guarantees
< 6 months
$’000
6–12 months
$’000
> 1-5 years
$’000
Total
$’000
24,110
15,409
39,519
27,233
66,337
871
-
-
-
-
-
-
7,055
3,052
-
11,650
17,505
-
24,110
15,409
39,519
45,938
86,894
871
94,441
10,107
29,155
133,703
Net maturity
(54,922)
(10,107)
(29,155)
(94,184)
*
Expected settlement amounts of interest-bearing loans and borrowings include an estimate of the interest payable to the date of
expiry of the facilities.
In addition to maintaining sufficient liquid assets to meet short-term payments, at reporting date, the Consolidated
Entity has approximately $135 million (2010: $106 million) of unused credit facilities available for its immediate use.
Please refer to note 24(a).
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 39
3. FINANCIAL RISK MANAGEMENT (CONTINUED)
(v) Liquidity risk (Continued)
B. Derivative financial liabilities:
The table below details the liquidity risk arising from the derivative liabilities held by the Consolidated Entity at balance date.
Year ended 30 June 2011
Derivatives
Net settled (interest rate swaps)
Net maturity
Year ended 30 June 2010
Derivatives
Net settled (interest rate swaps)
Net maturity
(vi) Fair value
< 6 months
$’000
6–12 months
$’000
> 1-5 years
$’000
Total
$’000
15
15
-
-
-
-
< 6 months
$’000
6–12 months
$’000
> 1-5 years
$’000
273
273
-
-
-
-
15
15
Total
$’000
273
273
The methods used in estimating the fair value of a financial instrument are:
Level 1 - the fair value is calculated using quoted prices in active markets.
Level 2 - the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for
the asset or the liability, either directly (as prices) or indirectly (derived from prices).
Level 3 - the fair value is estimated using inputs for the asset or liability that are not based on observable market data.
The fair value of the financial instruments as well as the methods used to estimate the fair value are summarised in the
table below.
Year ended 30 June 2011
Year ended 30 June 2010
Total
Quoted
market
price
(Level 1)
Valuation
technique
- market
observable
inputs
(Level 2)
Valuation
technique -
non market
observable
inputs
(Level 3)
Quoted
market
price
(Level 1)
Valuation
technique
- market
observable
inputs
(Level 2)
Valuation
technique -
non market
observable
inputs
(Level 3)
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Financial liabilities
Derivative instruments
Interest rate swaps
-
-
68
68
-
-
68
68
-
-
509
509
-
-
509
509
40 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
3. FINANCIAL RISK MANAGEMENT (CONTINUED)
(i) Critical accounting judgements
(vi) Fair value (Continued)
Quoted market price represents the fair value
determined based on quoted prices in active markets
as at the reporting date without any deduction of
transaction costs. The fair value of the listed equity
investments are based on quoted market prices.
For financial instruments not quoted in active markets,
valuation techniques such as present value techniques,
comparison to similar instruments for which market
observable prices exist and other relevant models
used by market participants are used. These valuation
techniques use both observable and unobservable
market inputs.
Financial instruments that use valuation techniques with
only observable market inputs or unobservable inputs
that are not significant to the overall valuation include
interest rate swaps not traded on a recognised exchange.
The fair value of unlisted debt and equity securities, as
well as other instruments that do not have an active
market, are based on valuation techniques using market
data that is not observable. Where the impact of credit
risk on the fair value of a derivative is significant, and
the inputs on credit risk (e.g. CDS spreads) are not
observable, the derivative would be classified as based
on non observable market inputs (Level 3).
There were no transfers between any of the categories
during the year.
4. SIGNIFICANT ACCOUNTING JUDGEMENTS,
ESTIMATES AND ASSUMPTIONS
Judgements, estimates and assumptions affect
the amounts reported in the Financial Statements.
Management continually evaluates its judgements and
estimates in relation to assets, liabilities, contingent
liabilities, revenues and expenses. Judgements and
estimates are based on historical experience and on
other relevant factors which form the basis of the
carrying values of assets and liabilities.
Judgements, estimates and assumptions made in the
preparation of these Financial Statements are outlined
in the following column. Actual results may differ from
these estimates and may materially affect financial
results or the financial position reported in future periods.
Further details of the nature of these assumptions and
conditions may be found in the relevant Notes to the
Consolidated Financial Statements.
Recovery of deferred tax assets:
Deferred tax assets are recognised for deductible
temporary differences and tax losses as management
considers that it is probable that future taxable profits
will be available to utilise these.
Cost of goods sold:
Management uses judgement in determining the method
to be used for cost apportionment. Costs may be
apportioned based on yield, unit entitlement, percentage
of revenue or other equitable methods. Costs include
costs incurred to date as well as forecast costs to bring
the inventory into a saleable state.
(ii) Critical accounting estimates and assumptions
Estimates of net realisable value of inventories:
The net realisable value is the estimated selling price
in the ordinary course of business less the estimated
costs of completion and costs of selling. Estimates take
into consideration fluctuations in price or cost. The key
assumptions used in this exercise require the use of
management judgement and are reviewed half yearly.
Profit recognised on developments:
Profit on developments is generally recognised on
settlement as discussed in note 2(u). The calculation of
profit for projects that are in progress, is based on actual
costs to date and estimates of costs to complete.
Share-based payment transactions:
The cost of equity settled securities allocated to
employees is measured by reference to the fair value
of the equity instruments at the date on which they
are granted. As explained in note 35(b), the fair value
of some equity instruments is determined using the
Monte Carlo simulation model which includes a number
of judgements and assumptions. These judgements
and assumptions have no impact on the carrying value
of assets and liabilities in the Consolidated Statement
of Financial Position but may impact the share-based
payment expense taken to profit and loss.
Valuation of derivatives:
Derivatives not quoted in an active market are valued
based on certain assumptions and estimates. These
valuations can change depending on market volatility.
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 41
5. REVENUES AND EXPENSES
Profit from ordinary activities before income tax includes the following revenues and expenses:
Revenues from continuing operations
Developments
Home Improvements
Interest revenue
Management fees
Rental revenue
Royalty revenue
Sundry revenue
Total revenues
Note
2011
$’000
2010
$’000
194,995
256,854
7,993
958
3,579
47
1,655
1,019
6,380
685
3,012
67
-
641
210,246
267,639
Changes in inventories, finished goods and work-in-progress
Amortisation of finance costs capitalised to inventories
6,246
14,319
Depreciation and amortisation expense
Depreciation
Leasehold improvements
Plant, equipment and motor vehicles
Amortisation
Motor vehicles under lease
Brand name
Total depreciation and amortisation expense
Other expenses
Minimum operating lease payments
Finance costs
Bank loans and overdrafts
Finance charges payable under finance leases
Total finance costs
Less: Amount capitalised to inventories
Finance costs expensed
21
21
21
22
101
325
60
-
486
222
895
276
246
1,639
3,346
4,267
10,844
19
10,863
(9,949)
914
13,676
75
13,751
(13,110)
641
42 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
6. OPERATING SEGMENTS
Operating segments
States:
This includes activities relating to Land Development,
Integrated Housing, Apartments Development and Home
Improvements.
Other:
This includes corporate transactions entered into by the
Head Office which are not state based.
Contract Building:
The customer contracts to build a home with AVJennings
on land they have sourced themselves. This is a
discontinued operation as discussed in note 10.
Identification of reportable segments
The Consolidated Entity has identified its operating
segments based on the internal reports that are reviewed
and used by the chief operating decision makers in
assessing performance and in determining the allocation
of resources.
The operating segments are identified by management
based on the states in which the Consolidated Entity sells
its products and services. Discrete financial information
about each of these operating businesses is reported on
a monthly basis.
Types of products and services
The Consolidated Entity operates primarily in residential
development.
Accounting policies
The accounting policies used in reporting segments
are the same as those contained in note 2 to the
Financial Report.
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 43
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6
44 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
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notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 45
7. KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Compensation of Key Management Personnel and the five highest paid Executives
Short-term
- Salary/Fees
- Cash bonus
- Other (1)
Post employment
- Superannuation (2)
Long-term
- Long service leave
Share-based payment
2011
$
2010
$
2,134,298
2,200,769
236,375
105,640
267,500
316,743
241,378
264,123
95,848
225,419
45,285
60,000
3,038,958
3,154,420
(1) ‘Other’ represents the value of motor vehicle benefits (2010: includes the value of motor vehicle benefits and a non-cash bonus of
$262,500 to the Chief Executive Officer. The post-tax amount of the bonus was allocated to the existing Employee Share Plan to
purchase AVJennings shares which vested immediately. The shares cannot be sold or transferred until 8 September 2013).
(2) Payments to Defined Contribution Plans: consist of Superannuation Guarantee Contribution payments as well as employee
voluntary contributions. The Consolidated Entity does not contribute to any Defined Benefit Plans.
Detailed remuneration disclosures are provided in the Remuneration Report on pages 20 and 21.
(b) Shareholdings of Key Management Personnel
The number of shares in the Company held during the financial year by each Key Management Personnel of the
Consolidated Entity, including their personally related parties, are set out below and on page 46. Details of shares
granted as compensation during the reporting period are given in note 7(d).
Number of shares held in AVJennings Limited
For the year ended 30 June 2011
Directors
S Cheong
E Sam
PK Summers(1)
RJ Rowley
Executives
CD Thompson
Total
For the year ended 30 June 2010
Directors
S Cheong
E Sam
PK Summers
RJ Rowley
Total
Opening
Balance
Vested as
Remuneration
Net Other
Change(2)
Closing
Balance
137,370,023
149,534
-
-
333,333
608,814
180,000
-
-
-
-
-
-
-
137,370,023
149,534
942,147
180,000
319,500
319,500
138,032,890
608,814
319,500
138,961,204
137,370,023
149,534
-
-
-
333,333
-
-
-
150,000
-
30,000
137,370,023
149,534
333,333
180,000
137,669,557
333,333
30,000
138,032,890
(1) Includes 333,333 shares vested during the year (refer to note 7(d)) and 275,481 shares purchased by the AVJ Deferred Employee
Share Plan in lieu of 2010 non-cash bonus, which vested immediately.
(2) The “net other change” relates to shares acquired on market.
46 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
7. KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED)
(b) Shareholdings of Key Management Personnel (Continued)
No other Key Management Personnel held shares in AVJennings Limited at any time during the year.
All equity transactions with Key Management Personnel have been entered into under terms and conditions no more
favourable than those the Company would have adopted if dealing at arm’s length.
(c) Compensation options: granted and vested during the year
No options were granted or exercised during the year. There are currently no unexercised or outstanding options.
None of the Key Management Personnel hold any options.
(d) Equity instrument disclosures relating to Key Management Personnel
Share-based compensation benefits based on different vesting conditions are provided to certain Key Management
Personnel via the AVJ Deferred Employee Share Plan.
Vesting subject to service condition only
The Chief Executive Officer was granted 1,000,000 shares on 7 March 2009 which vest in equal proportions on the
first, second and third anniversary of his appointment. The vesting dates are 19 February 2010, 19 February 2011 and
19 February 2012. The market value of the shares at the grant date is taken to be the fair value. The service condition
is the continuity of employment over the 3 years. The unvested shares are held by the AVJ Deferred Employee Share
Plan Trust.
Vesting subject to both service and performance conditions
A total of 1,375,452 shares were granted on 28 September 2010 to certain Executives. As detailed below, these include
1,136,816 shares for KMP and 97,800 shares for executives who are amongst the five highest remunerated.
The remaining shares were granted to executives who were neither KMP nor amongst the five highest remunerated.
Name
Executive Committee
Members (KMP)
PK Summers
PK Summers
M Henesey-Smith
CD Thompson
SC Orlandi
L Hunt
Other Executives (not KMP
but in top five remunerated)
P Vlitas
G Marshall
Total
Shares Granted
Number of Shares Vested
Year
Granted
Number
Fair Value
Unvested
at 1 July
2010
Vested
during the
year
Unvested
at 30 June
2011
2009
2011
2011
2011
2011
2011
2011
2011
1,000,000
$ 180,000
666,667
333,333
333,334
691,591
$ 312,945
158,344
$
71,651
106,183
$ 48,048
102,458
78,240
$
$
46,362
35,404
691,591
158,344
106,183
102,458
78,240
51,229
46,571
$
$
23,181
21,074
51,229
46,571
-
-
-
-
-
-
-
691,591
158,344
106,183
102,458
78,240
51,229
46,571
2,234,616
$ 738,665
1,901,283
333,333
1,567,950
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 47
7. KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED)
(d) Equity instrument disclosures relating to Key Management Personnel (Continued)
Vesting subject to both service and performance conditions (Continued)
These shares are subject to both service and performance conditions and will vest to the extent that each of these
conditions is satisfied.
The service vesting condition is the employee must still be employed by AVJennings at 30 September 2013 for the
shares to vest, except in the event of death or permanent disablement in which case the shares vest to the estate. In
the event that the employee is retrenched, the shares may vest subject to certain conditions.
The performance vesting conditions include the achievement of an Earnings per Share (EPS) hurdle and a Total
Shareholder Return (TSR) hurdle. The fair value of the EPS element of the shares is the market value at grant date. The
Monte Carlo Model is used to fair value the TSR element. The model simulates AVJennings TSR and compares it against
the ASX Small Industrials Retail Index. The model takes into account historic dividends, share price volatilities and the
risk-free yield on an Australian Government Bond at the grant date matching the remaining effective life of 3 years.
Please refer to note 2(s), note 28(b) and note 35(b).
(e) Loans to Key Management Personnel
There are currently no outstanding loans receivable from Key Management Personnel. No loans were made to Key
Management Personnel during the year.
(f) Other Transactions with Key Management Personnel
Services:
A Director, Mr. BG Hayman, is the Chairman of Chartwell Management Services Pty Limited. Chartwell Management
Services Pty Limited provided consulting services to AVJennings Limited and its controlled entities on normal
commercial terms and conditions in the year ended 30 June 2010. No service was provided in the year ended 30 June
2011. The amount recognised as an expense for the year ended 30 June 2011 is $Nil (2010: $63,712).
8. AUDITOR’S REMUNERATION
Amounts received or due and receivable by Ernst & Young (Australia) for:
An audit or review of the 30 June full-year and 31 December interim financial
reports of the Entity and other entities in the Consolidated Group
2011
$
2010
$
225,450
312,000
- Share of audit or review costs of the financial reports of the Consolidated
-
1,000
Entity’s joint ventures
- Other services in relation to the Entity and any other entities in the
Consolidated Group
- non-audit related fees
Total auditor’s remuneration
15,000
-
240,450
313,000
48 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
9. INCOME TAX
Income tax expense
The major components of income tax expense are:
Current income tax
Current income tax charge
Adjustment for prior periods
Deferred income tax
Current year temporary differences
Adjustment for prior periods
Income tax expense reported in the Consolidated Statement of
Comprehensive Income
Numerical reconciliation between aggregate tax expense recognised
in Consolidated Statement of Comprehensive Income and tax expense
calculated per the statutory income tax rate:
Accounting profit before income tax from continuing operations
Loss before income tax from discontinued operations
Note
2011
$’000
2010
$’000
3,522
117
2,000
(9)
771
20
1,766
43
5,630
2,600
10
19,943
(1,420)
18,829
(6,613)
Total accounting profit before income tax
18,523
12,216
Tax at Australian income tax rate of 30% (2010 – 30%)
Adjustment for prior periods
Equity accounted share of Joint Venture profits
Other non-deductible items and variations
Aggregate income tax expense
Aggregate income tax expense is attributable to:
Continuing operations
Discontinued operations
5,557
108
(520)
485
3,665
(559)
(544)
38
5,630
2,600
5,343
287
4,584
(1,984)
5,630
2,600
Tax losses
The Consolidated Entity has capital tax losses of $1,013,526 (2010: $1,013,526) for which no deferred tax asset has
been recognised. These are available indefinitely for offset against future capital gains subject to satisfaction of the
relevant statutory tests.
Tax consolidation
AVJennings Limited and its wholly-owned resident entities have formed a tax consolidated group with effect
from 1 July 2002 and are therefore taxed as a single entity from that date. The accounting policy in relation to tax
consolidation is set out in note 2(v).
The Head Entity, AVJennings Limited, has entered into an agreement with its wholly-owned subsidiary, AVJennings
Properties Limited, under which AVJennings Properties Limited will account for the current and deferred tax amounts
of the controlled entities in the Tax Consolidated Group. The Group has applied the group allocation approach
in determining the appropriate amount of current taxes and deferred taxes to allocate to members of the Tax
Consolidated Group.
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 49
9. INCOME TAX (CONTINUED)
Nature of tax funding arrangements and tax sharing agreements
Entities within the Tax Consolidated Group have entered into a tax funding arrangement and a tax sharing agreement
with the Head Entity. Under the terms of the Tax Funding Arrangement, each of the entities in the Tax Consolidated
Group has agreed to pay or receive a tax equivalent payment to, or from, the Head Entity, based on the current tax
liability or current tax asset of the entity. Such amounts are reflected in amounts receivable from, or payable to, other
entities in the Tax Consolidated Group.
The Tax Sharing Agreement entered into between members of the Tax Consolidated Group provides for the
determination of the allocation of income tax liabilities between the entities should the Head Entity default on its tax
payment obligations or if an entity should leave the Tax Consolidated Group. The effect of the Tax Sharing Agreement
is that each member’s liability for tax payable by the Tax Consolidated Group is limited to the amount payable to the
Head Entity under the Tax Funding Arrangement.
Taxation of financial arrangements (TOFA)
Legislation is in place which changes the tax treatment of financial arrangements including the tax treatment of
hedging transactions. The Consolidated Entity has assessed the potential impact of these changes on its tax position.
No impact has been recognised and no adjustments have been made to the deferred tax and income tax balances at
30 June 2011 (2010: $Nil).
10. DISCONTINUED OPERATIONS
During the year, total proceeds amounting to $21.3 million were received in respect of the sale of the Contract Building
Division to Sekisui House Limited. AVJennings will retain ownership of the “AVJennings” brand and continue to use
this brand for its developments operations. It has licensed to Sekisui House the “AVJennings” brand and associated
trade marks for use in the contract building business in return for a cash royalty based generally on the revenue and
cumulative profit for the business for a three year term effective 1 August 2010.
The results of the discontinued operations for the current year (the month of July 2010 only) and prior year
(12 months) are presented below:
External sales
Other revenue
Change in inventories, finished goods and work-in-progress
Other expenses
Loss from discontinued operations before tax
Tax (expense)/benefit
2011
$’000
2010
$’000
15,503
203,345
13
(12,794)
(4,142)
(1,420)
(287)
172
(165,252)
(44,878)
(6,613)
1,984
Loss from discontinued operations after tax
(1,707)
(4,629)
Reconciliation to segment results
Segment results
Other revenue
Indirect expenses
Interest expense
Loss from discontinued operations before tax
Tax (expense)/benefit
Note
6
6
2011
$’000
(251)
13
(1,119)
(63)
(1,420)
(287)
2010
$’000
6,775
172
(13,339)
(221)
(6,613)
1,984
Loss from discontinued operations after tax
(1,707)
(4,629)
50 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
11. DIVIDENDS
Dividends paid and recognised during the year
2010 final dividend of 1.5 cents per fully paid share,
paid 30 September 2010. Fully franked @ 30% tax
2011 interim dividend of 1.0 cent per fully paid share,
paid 18 April 2011. Fully franked @ 30% tax
Total dividends paid
Dividends proposed
2010 final dividend of 1.5 cents per fully paid share,
paid 30 September 2010. Fully franked @ 30% tax
2011 final dividend of 1.5 cents per fully paid share,
to be paid 19 October 2011. Fully franked @ 30% tax
Total dividends proposed
Dividends proposed after the year-end have not been recognised as a liability as
at 30 June 2011 but will be brought into account during the 2012 financial year.
The Company’s Dividend Reinvestment Plan remains suspended.
Franking credit balance
Franking credits available for subsequent financial years
based on a tax rate of 30%
2011
$’000
2010
$’000
4,119
2,746
6,865
-
-
-
-
4,119
4,119
4,119
-
4,119
23,880
23,030
The above amounts represent the balance of the franking account as at the reporting date, adjusted for franking
credits that will arise from the payment of the amount of the provision for income tax.
The impact on the franking account of the dividend recommended by the Directors since the end of the reporting
period, but not recognised as a liability at the reporting date, will be a reduction in the franking account of $1,765,000
to $22,115,000.
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 51
12. EARNINGS PER SHARE
(a) Earnings used in calculating earnings per share
For basic earnings per share:
Net profit from continuing operations attributable to
ordinary equity holders of the parent
Loss attributable to discontinued operations
Net profit attributable to equity holders of the parent
For diluted earnings per share:
Net profit from continuing operations attributable to
ordinary equity holders of the parent (from basic EPS)
Tax effected share-based payment expense
- liability component
Net profit from continuing operations attributable to
ordinary equity holders adjusted for the effect of
future share-based payment expense
Loss attributable to discontinued operations
Net profit attributable to equity holders of the parent
(b) Weighted average number of shares used as denominator
Weighted average number of ordinary shares
(excluding treasury shares) for basic earnings per share
Effect of dilution:
Treasury shares
Weighted average number of ordinary shares for
diluted earnings per share
2011
$’000
2010
$’000
14,600
(1,707)
14,245
(4,629)
12,893
9,616
14,600
14,245
(336)
(69)
14,264
(1,707)
14,176
(4,629)
12,557
9,547
2011
Number
2010
Number
272,879,908
273,922,027
1,708,786
666,667
274,588,694
274,588,694
There have been no transactions involving ordinary shares that would significantly change the number of ordinary
shares outstanding between the reporting date and the date of completion of these Financial Statements.
13. CASH AND CASH EQUIVALENTS
Reconciliation to Consolidated Statement of Cash Flows
For the purposes of Consolidated Statement of Cash Flows,
cash and cash equivalents comprise the following at 30 June:
Cash at bank and in hand
12,260
24,110
2011
$’000
2010
$’000
52 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
14. TRADE AND OTHER RECEIVABLES
Current
Amounts due under construction contracts and trade receivables
Related parties receivables
Other receivables
Allowance for impairment of other receivables
2011
$’000
2010
$’000
5,046
6,014
6,177
(78)
9,065
4,208
2,304
(168)
Total current trade and other receivables
17,159
15,409
(a) Allowance for impairment loss
No impairment loss has been recognised by the Consolidated Entity in the current year (2010: $Nil).
At 30 June, the ageing analysis of trade receivables is a follows:
Number of days outstanding
Total
$’000
0–30
31–60
$’000
$’000
5,046
3,949
9,065
8,369
96
464
61–90
PDNI*
$’000
132
84
+ 91
PDNI*
$’000
869
148
+ 91
CI#
$’000
-
-
2011
2010
* Past due not impaired (PDNI)
# Considered impaired (CI)
With regards to receivables past due not impaired (PDNI), the relevant debtors have been directly contacted and the
Consolidated Entity is satisfied that payment will be received in full.
Movements in provision for impairment of trade and other receivables
At the beginning of the year
Amounts recovered during the year
Amounts written-off during the year
At the end of the year
2011
$’000
168
(90)
-
2010
$’000
334
-
(166)
78
168
(b) Related party receivables
For terms and conditions relating to related party receivables, refer to note 34.
(c) Other receivables
Other receivables generally arise from transactions outside the usual operating activities of the Consolidated Entity.
These receivables are not past due or impaired.
(d) Fair value and credit risk
Due to the short-term nature of these receivables, their carrying value is assumed to approximate their fair value.
The maximum exposure to credit risk is the fair value of receivables. Collateral is not held as security, nor is it the
Consolidated Entity’s policy to transfer (on-sell) receivables to special purpose entities.
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 53
15. INVENTORIES
Current
Home Improvements
Work-in-progress on contracts
Cost plus attributable profits
Less: progress billings
Excess progress billings on contracts
Land, Housing and Apartments Developments
Broadacres
Land to be subdivided - at cost
Borrowing and holding costs capitalised
Total Broadacres
Work-in-progress
Note
2011
$’000
2010
$’000
7,677
(8,683)
3,501
(3,630)
(1,006)
(129)
15(a)
3,458
1,347
18,028
4,777
4,805
22,805
Land subdivided or in the course of being subdivided - at cost
Development costs capitalised
Houses and apartments under construction - at cost
Borrowing and holding costs capitalised
15(a)
Total work-in-progress
Completed inventory
Completed houses and apartments - at cost
Completed residential land lots - at cost
Borrowing and holding costs capitalised
Total completed inventory
Total current inventories
15(a)
34,617
26,688
18,181
11,929
17,103
16,680
11,695
6,663
91,415
52,141
23,642
10,902
1,473
11,643
12,687
1,424
36,017
25,754
131,231
100,571
54 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
15. INVENTORIES (CONTINUED)
Non-current
Land, Housing and Apartments Developments
Broadacres
Land to be subdivided – at cost
Borrowing and holding costs capitalised
Total Broadacres
Work-in-progress
Land subdivided or in the course of being subdivided – at cost
Development costs capitalised
Borrowing and holding costs capitalised
Total work-in-progress
Completed inventory
Completed houses and apartments – at cost
Completed residential land lots – at cost
Borrowing and holding costs capitalised
Total completed inventory
Note
2011
$’000
2010
$’000
15(a)
117,444
29,126
86,676
23,790
146,570
110,466
15(a)
15(a)
90,797
22,862
19,922
49,707
59,077
22,341
133,581
131,125
1,483
3,608
388
5,479
-
-
-
-
Total non-current inventories
285,630
241,591
Total inventories
416,861
342,162
(a)
(b)
Borrowing costs are recognised as part of the carrying amount of the qualifying asset. Borrowing costs include
interest, fees and costs associated with interest rate derivatives. These costs have been capitalised at a weighted
average rate of 13.96% (2010: 13.04%).
Inventory with a book value of $87,772,000 (2010: $87,687,000) had been pledged as security for project
specific borrowings (refer to note 24(b)). The Consolidated Entity’s remaining inventory has been pledged as
security for the main banking facility (refer to note 24(a)).
(c) No inventory write-downs were recognised during the year (2010: $Nil).
16. OTHER CURRENT ASSETS
Prepayments
Deposits
Total other current assets
2011
$’000
1,182
118
2010
$’000
1,570
142
1,300
1,712
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 55
17. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Investment in Associate – unincorporated
Interest in Joint Venture Entities – unlisted
Total equity accounted investments
Note
17(a)
17(b)
2011
$’000
2010
$’000
1,484
39,647
1,614
39,654
41,131
41,268
Investments in Associates are accounted for in accordance with the policy outlined in note 2(g) while Joint Venture
Entities are accounted for in accordance with note 2(f).
(a) Investment in Associate
The Consolidated Entity has significant influence over the Associate because it is represented on the project governing
body and its employees provide essential technical knowledge to the project. The Associate is an unincorporated
partnership which trades in Australia. It has a 30 June year-end and its principal activity is the development and sale
of residential lots.
Investment details
Associate name and principal activity
Epping JV – Land Development
Movements in carrying amount
At the beginning of year
Distribution received
Share of net profit
At the end of year
Interest held
2011
2010
10%
10%
2011
$’000
1,614
(370)
240
2010
$’000
1,423
(120)
311
1,484
1,614
Summarised financial information of the Associate:
The Consolidated Entity’s share of the results of the Associate and its aggregated assets and liabilities are as follows:
Assets
Liabilities
Revenues
Profit
Impairment
2011
$’000
1,624
140
1,677
240
2010
$’000
1,766
151
1,084
311
The Consolidated Entity’s investment in the Associate was not impaired at any time during the year.
Share of Associate’s commitments and contingent liabilities
The Associate’s commitments and contingent liabilities have been entered into on a non-recourse basis and therefore
the Consolidated Entity has no exposure to the Associate’s commitments and contingent liabilities as at the date of
this Report.
The share of contingent liabilities in respect to certain performance guarantees granted by the Associate in the normal
course of business to unrelated parties, at 30 June 2011, amounted to $163,968 (2010: $98,967).
56 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
17. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD (CONTINUED)
(b) Interest in Joint Venture Entities
Investment details
Joint Venture Entity and principal activities
Meridan Plains - Land Development and Building Construction
Eastwood - Land Development and Building Construction
Sydney Olympic Park - Commercial Development and Construction
Woodville - Land Development and Building Construction
Arlington Rise - Land Development and Building Construction
Movements in carrying amount
At the beginning of year
Contributions to the joint venture entities
Distributions received
Dividends received
Share of net profit
At the end of year
Interest held
2011
2010
50%
50%
50%
50%
45%
50%
50%
50%
50%
-
2011
$’000
2010
$’000
39,654
38,598
3,594
(4,140)
(1,000)
1,539
243
(1,000)
-
1,813
39,647
39,654
The Consolidated Entity’s share of the Joint Venture Entities’ assets (including goodwill), liabilities, revenue and
expenses are as follows:
Share of assets and liabilities
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilites
Net assets
Share of revenue, expenses and results
Revenues
Expenses
Profit before tax
Tax
Profit after tax
2011
$’000
2010
$’000
39,511
31,174
70,685
12,970
18,068
31,038
17,404
50,685
68,089
2,600
25,835
28,435
39,647
39,654
30,014
(28,032)
1,982
(443)
1,539
19,893
(17,172)
2,721
(908)
1,813
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 57
18. PARENT ENTITY FINANCIAL INFORMATION
(a) Summary financial information
The individual financial statements for the Parent show the following aggregate amounts:
Balance Sheet
Current assets
Total assets
Current liabilities
Total liabilities
Shareholders’ equity
Issued capital
Reserves
Share-based payment reserve
Retained earnings
Contributed equity
Profit for the year
Total comprehensive income
2011
$’000
31,382
194,668
19,118
19,118
2010
$’000
31,382
194,668
18,751
18,751
121,835
122,578
323
53,392
81
53,258
175,550
175,917
135
135
-
-
(b) Guarantees entered into by the parent entity
The parent entity has not provided any financial guarantees.
(c) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2011 (2010: Nil).
58 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
19. CONTROLLED ENTITIES
(a) Investment in controlled entities
The following economic entities are the controlled entities of AVJennings Limited:
ECONOMIC ENTITY (1)
2011
2010
2011
2010
% Equity Interest
Included in Banking Cross
Deed of Covenant (2)
Entities included in the Closed Group
A.V. Jennings Real Estate Pty Limited
AVJennings Real Estate (VIC) Pty Limited
AVJennings Holdings Limited^
AVJennings Properties Limited^
Jennings Sinnamon Park Pty Limited
Long Corporation Limited^
Orlit Pty Limited^
Sundell Pty Limited^
AVJennings Housing Pty Limited^
AVJennings Housing VIC. Pty Limited*
AVJennings Housing N.S.W. Pty Limited*
AVJennings Housing S.A. Pty Limited*
AVJennings Housing QLD. Pty Limited*
AVJennings Home Improvements S.A. Pty Limited^
AVJennings Mackay Pty Limited^
100
100
100
100
100
100
100
100
100
-
-
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
No
No
Yes
Yes
No
Yes
Yes
Yes
Yes
N/A
N/A
N/A
N/A
Yes
Yes
No
No
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
(1) All entities are incorporated in Australia.
(2) These entities, including AVJennings Limited, are included under the Banking Cross Deed of Covenant referred to in note 24(a).
^ These entities, including AVJennings Limited, are included in the Deed of Indemnity for Surety bond facility referred to in note 24(c).
* These entities were transferred to Sekisui House Australia on 2 August 2010.
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 59
19. CONTROLLED ENTITIES (CONTINUED)
(a) Investment in controlled entities (Continued)
ECONOMIC ENTITY (1)
2011
2010
2011
2010
% Equity Interest
Included in Banking Cross
Deed of Covenant (2)
Entities excluded from the Closed Group
Crebb No 12 Pty Limited
Dunby Pty Limited
Epping Developments Limited
Montpellier Gardens Pty Limited
Sirda Pty Limited
AVJ ODP Pty Limited
AVJennings (Cammeray) Pty Limited
AVJennings Syndicate No 2 Limited
AVJennings Syndicate No 3 Limited
AVJennings Syndicate No 4 Limited
AVJennings Syndicate No 5 Limited (3)
AVJennings Syndicate No 6 Limited (3)
AVJennings Officer Syndicate Limited
AVJennings Hindmarsh Syndicate Limited (3)
AVJennings Properties SPV No 1 Pty Limited
AVJennings Properties SPV No 2 Pty Limited
AVJennings Properties SPV No 3 Pty Limited
AVJennings Properties SPV No 4 Pty Limited
AVJennings Wollert Pty Limited
AVJ Erskineville Pty Limited
AVJ Hobsonville Pty Limited
AVJ SPV No 8 Pty Limited
AVJennings Properties SPV No 9 Pty Limited
AVJennings SPV No 10 Pty Limited
AVJennings Properties SPV No 11 Pty Limited
AVJennings Properties SPV No 12 Pty Limited (3)
AVJennings Properties SPV No 13 Pty Limited (3)
AVJennings Properties SPV No 14 Pty Limited (3)
AVJennings Properties SPV No 15 Pty Limited
AVJennings Properties SPV No 16 Pty Limited (3)
AVJennings Properties SPV No 17 Pty Limited (3)
AVJennings Properties SPV No 18 Pty Limited (3)
100
100
100
100
100
100
100
100
100
100
-
-
100
-
100
100
100
100
100
100
100
100
100
100
100
-
-
-
100
-
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Yes
Yes
No
Yes
No
No
No
No
No
Yes
No
No
Yes
No
No
No
No
No
No
No
Yes
No
No
No
No
No
No
No
No
No
No
No
Yes
Yes
No
Yes
No
No
No
No
No
Yes
No
No
Yes
No
No
No
No
No
No
No
Yes
No
No
No
No
No
No
No
No
No
No
No
(1) All entities are incorporated in Australia. With the exception of AVJ Hobsonville Pty Limited, which has a branch in New Zealand, all
entities operate within Australia.
(2) These entities, including AVJennings Limited, are included under the Banking Cross Deed of Covenant referred to in note 24(a).
(3) These entities were deregistered during the year.
(b) Ultimate parent
AVJennings Limited is the ultimate Australian parent entity. SC Global Developments Limited is the ultimate parent entity.
60 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
19. CONTROLLED ENTITIES (CONTINUED)
(c) Deeds of cross guarantee
Certain entities within the Group are parties to deeds of cross guarantee under which each controlled entity
guarantees the debts of the others. By entering into these deeds, the controlled entities are relieved from the
requirement to prepare Financial Statements and Directors’ Reports under Class Order 98/1418 (as amended by Class
Orders 98/2017, 00/321, 01/1087, 02/248, 02/1017, 04/663, 04/682, 04/1624, 05/542, 06/51, 08/11, 08/255, 08/618
and 09/626) issued by the Australian Securities and Investments Commission (ASIC). Those entities included in the
Closed Group are listed in note 19(a). These entities represent a “Closed Group” for the purposes of the Class Order,
and as there are no other parties to the deeds of cross guarantee that are controlled by AVJennings Limited, they also
represent the “Extended Closed Group”.
(d) Class order closed group
Certain controlled entities were granted relief by ASIC (under provisions of Class Orders) from the requirement to
prepare separate audited financial statements, where deeds of indemnity have been entered into between the Parent
Entity and the Controlled Entities to meet their liabilities as required (refer to note 19(c)).
The Extended Closed Group referred to in the Directors’ Declaration therefore comprises all of the entities within the
Class Order. Certain entities falling outside of the Extended Closed Group are listed in note 19(a), and are therefore
required to prepare separate annual financial statements.
The Consolidated Statement of Comprehensive Income for those controlled entities which are party to the deed is as
follows:
Continuing operations
Revenues
Cost of sales
Other expenses
Profit from continuing operations before income tax
Income tax expense
Closed Group
2011
$’000
2010
$’000
97,331
196,315
(56,139)
(34,684)
(164,131)
(28,278)
6,508
(5,221)
3,906
(4,415)
Profit/(loss) from continuing operations after income tax
1,287
(509)
Discontinued operations
Loss from discontinued operations after income tax
(1,707)
(4,629)
Loss for the year
(420)
(5,138)
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 61
19. CONTROLLED ENTITIES (CONTINUED)
(d) Class order closed group (Continued)
The Consolidated Statement of Financial Position for those controlled entities which are party to the deed is as follows:
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Assets of disposal group classified as held for sale
Total current assets
NON-CURRENT ASSETS
Inventories
Property, plant and equipment
Intangible assets
Total non-current assets
Total assets
CURRENT LIABILITIES
Trade and other payables
Derivative financial instruments
Interest-bearing loans and borrowings
Tax payable
Short-term provisions
Liabilities directly associated with the assets classified as held for sale
Total current liabilities
NON-CURRENT LIABILITIES
Trade and other payables
Interest-bearing loans and borrowings
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Equity attributable to equity holders of the parent
Contributed equity
Reserves
Retained earnings
Total equity
Closed Group
2011
$’000
2010
$’000
11,017
60,850
79,494
1,143
-
16,307
95,849
74,340
1,703
43,228
152,504
231,427
236,947
167,250
1,090
2,816
1,869
2,816
240,853
171,935
393,357
403,362
-
68
4,432
509
50,029
62,212
3,540
3,235
-
905
3,565
21,966
56,872
93,589
43,401
11,650
-
19,341
694
14
17,273
646
63,436
29,583
120,308
123,172
273,049
280,190
121,835
122,578
323
81
150,891
157,531
273,049
280,190
62 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
19. CONTROLLED ENTITIES (CONTINUED)
(d) Class order closed group (Continued)
The Consolidated Statement of Changes in Equity for those controlled entities which are party to the deed is as follows:
Closed Group
2011
$’000
2010
$’000
At beginning of the year
280,190
274,821
Changes in equity due to members entering/exiting the closed group
Loss for the year
Total income and expenses for the year
Equity transactions
- Treasury shares acquired
- Share-based payment reserve
- Dividends received from non closed group member
- Dividends paid to equity holders of parent
645
(420)
747
(5,138)
225
(4,391)
(743)
242
-
(6,865)
-
60
9,700
-
(7,141)
5,369
At end of the year
273,049
280,190
20. INTEREST IN JOINT VENTURE OPERATIONS
A number of controlled entities have entered into joint venture operations. Information relating to the Joint Ventures is
set out below:
Joint Venture name and principal activities
Cammeray Joint Venture – Apartments Development
Cheltenham Joint Venture – Land Development and Building Construction
Hobsonville Joint Venture – Land Development
INTEREST IN OUTPUT
2011
2010
50%
50%
50%
50%
50%
50%
The Consolidated Entity’s interest in the profits and losses of the Joint Venture Operations are included in the
Consolidated Statement of Comprehensive Income, in accordance with the accounting policy described in note 2(f),
under the following classifications:
Revenues
Cost of sales
Other expenses
Profit / (loss) before income tax
Income tax (expense) / credit
2011
$’000
10,364
(8,783)
(803)
778
(233)
2010
$’000
63
-
(312)
(249)
75
Net profit / (loss) for the year
545
(174)
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 63
20. INTEREST IN JOINT VENTURE OPERATIONS (CONTINUED)
The Consolidated Entity’s interest in the assets and liabilities of Joint Venture Operations are included in the Consolidated
Statement of Financial Position, in accordance with the policy described in note 2(f), under the following classifications:
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
NON-CURRENT ASSETS
Inventories
Total non-current assets
Total assets
CURRENT LIABILITIES
Trade and other payables
Total current liabilities
NON-CURRENT LIABILITIES
Trade and other payables
Total non-current liabilities
Total liabilities
Net assets
2011
$’000
2010
$’000
129
831
948
6
314
-
11,000
83
1,914
11,397
39,651
29,024
39,651
29,024
41,565
40,421
127
127
7,745
7,745
12,555
11,650
12,555
11,650
12,682
19,395
28,883
21,026
64 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
21. PROPERTY, PLANT AND EQUIPMENT
Leasehold improvements
At cost
Less: accumulated depreciation
Total leasehold improvements
Plant, equipment and motor vehicles
At cost
Less: accumulated depreciation
Total plant and equipment
Motor vehicles under finance lease
At cost
Less: accumulated amortisation
Total motor vehicles under finance lease
2011
$’000
2010
$’000
789
(587)
202
1,967
(1,493)
474
8,222
(7,366)
11,551
(10,371)
856
1,180
45
(16)
29
407
(195)
212
Total property, plant and equipment
1,087
1,866
Reconciliations
Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of
the year are set out below:
For the year ended 30 June 2010
Note
Carrying amount at 1 July 2009
Additions
Disposals
Depreciation/amortisation charge for the year
5
Depreciation on assets held for sale
Leasehold
improvements
$’000
921
37
(86)
(222)
-
Plant,
equipment
and motor
vehicles
$’000
3,130
719
(359)
(895)
(15)
Leased
motor
vehicles
$’000
1,156
-
(411)
(276)
-
Total
$’000
5,207
756
(856)
(1,393)
(15)
Assets reclassified as assets held for sale
(176)
(1,400)
(257)
(1,833)
Carrying amount at 30 June 2010
474
1,180
212
1,866
For the year ended 30 June 2011
Carrying amount at 1 July 2010
Additions
Disposals
Depreciation/amortisation charge for the year
5
474
21
(192)
(101)
1,180
636
(635)
(325)
212
1,866
-
(123)
(60)
657
(950)
(486)
Carrying amount at 30 June 2011
202
856
29
1,087
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 65
22. INTANGIBLE ASSETS
Brand name at cost
Less: accumulated amortisation
Total intangible assets
Reconciliation
Note
2011
$’000
9,868
(7,052)
2,816
2010
$’000
9,868
(7,052)
2,816
Reconciliation of the carrying amount of the intangible asset at the beginning and end of the year is set out below:
Carrying amount at beginning of year
Amortisation charge for the year
Carrying amount at end of year
5
2,816
-
2,816
3,062
(246)
2,816
The intangible asset relates to the value of the “AVJennings” brand name which was acquired as part of a business
combination in 1995. On recognition, the asset was determined to have a finite life of 20 years and has since been
amortised over the expected useful life. In accordance with the accounting policy discussed in note 2(k), the
amortisation period and the amortisation method for an intangible asset are reviewed at least each financial year-end.
A review carried out at 31 December 2009 determined that the brand name has indefinite useful life. This change in
accounting estimate has been applied prospectively with amortisation ceasing as of 31 December 2009.
The brand name is tested for impairment annually, or more frequently if there are indicators of impairment.
At 30 June 2011, there were no indicators of impairment.
23. TRADE AND OTHER PAYABLES
Current
Secured
Land creditors
Unsecured
Land creditors
Trade creditors
Related party payables
Other creditors and accruals
Total current payables
Non-Current
Secured
Land creditors
Unsecured
Land creditors
2011
$’000
2010
$’000
5,300
-
23,235
10,380
2,300
7,270
13,959
8,982
-
11,347
43,185
34,288
48,485
34,288
5,600
-
37,800
11,650
Total non-current payables
43,400
11,650
66 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
23. TRADE AND OTHER PAYABLES (CONTINUED)
Land creditors
The amounts due to secured land creditors are secured over the title to properties acquired by way of either
mortgage back or bank guarantee in favour of the land vendor. These security arrangements remain in place until
final settlement of the amounts due to the land vendor. Titles for the unsecured land creditors only transfer to the
Consolidated Entity on full payment of the amount outstanding or upon provision of some other security.
Related party payables
For terms and conditions relating to related party payables, refer to note 34.
Fair value
Due to the short-term nature of these payables, their carrying amount is assumed to approximate their fair value.
24. INTEREST-BEARING LOANS AND BORROWINGS
Current
Secured
Bank loans
Unsecured
Lease liabilities
Note
2011
$’000
2010
$’000
62,500
67,000
31(b)
29
212
Total current interest-bearing liabilities
62,529
67,212
Non-current
Secured
Bank loans
Unsecured
Lease liabilities
6,619
15,000
31(b)
-
14
Total non-current interest-bearing liabilities
6,619
15,014
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 67
24. INTEREST-BEARING LOANS AND BORROWINGS (CONTINUED)
Financing arrangements
The Consolidated Entity has access to the following lines of credit:
30 June 2011
Main banking facilities
- bank overdraft
- bank loans
- performance bonds and other non-cash facilities (1)
Project funding
- bank loans
- performance bonds and other non-cash facilities
Surety bond facility
- performance bonds
Leasing facilities
30 June 2010
Main banking facilities
- bank overdraft
- bank loans
- performance bonds and other non-cash facilities
Project funding
- bank loans
- performance bonds and other non-cash facilities
Note
Available
$’000
Utilised
$’000
Unutilised
$’000
24(a)
24(b)
24(c)
2,200
137,800
31,000
-
50,000
16,298
2,200
87,800
14,702
171,000
66,298
104,702
33,500
23,500
19,119
17,669
14,381
5,831
57,000
36,788
20,212
10,000
1,139
8,861
24(d)
1,200
29
1,171
24(a)
24(b)
2,200
137,800
31,000
-
62,000
19,706
2,200
75,800
11,294
171,000
81,706
89,294
31,000
20,000
11,000
5,000
-
5,000
36,000
20,000
16,000
Leasing facilities
24(d)
1,200
482
718
(1) At 30 June 2011 these facilities are interchangeable up to $5 million (2010: $10 million) between the bank loans and performance
bonds/other non-cash facilities.
Significant terms and conditions
(a) Main banking facilities
The main banking facilities are secured by a fixed and floating charge over all the assets and undertakings of the
entities within the Consolidated Entity, other than those assets pledged as security for project funding (see note
24(b)), and those assets pledged as security for properties acquired as detailed in note 23 (secured land creditors).
The Parent Entity has entered into a cross deed of covenant with various controlled entities to guarantee obligations of
those entities in relation to the main banking facilities. Details of entities included in the cross deed of covenant are set
out in note 19. There is no overdraft utilisation at year-end and the current interest rates on the bank loans range from
6.88% to 7.07% (2010: 7.28% to 7.30%).
The Consolidated Entity’s main banking facilities which were due to mature on 30 September 2011 have been renewed
for a further 2 years to 30 September 2013. Documentation is in the process of being completed and is expected to
be signed by 30 September 2011. The renewed main banking facilities will be secured by a fixed and floating charge
over all the assets and undertakings of the entities within the Consolidated Entity as mentioned above, and by first
registered mortgages over various real estate inventories other than those assets pledged as security for project
funding (see note 24(b)) and secured land creditors (see note 23).
68 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
24. INTEREST-BEARING LOANS AND BORROWINGS (CONTINUED)
(a) Main banking facilities (Continued)
The renewed facilities are expected to be sufficient for the Consolidated Entity’s normal ongoing business operations.
The renewed main banking facilities currently being documented are:
Main banking facilities
- bank overdrafts
- bank loans
- performance bonds and other non-cash facilities
Total facilities
(b) Project funding
Facilities as at
30 June 2011
$’000
Facilities
Renewed
$’000
2,200
137,800
31,000
5,000
134,000
33,600
171,000
172,600
Project funding facilities are secured by:
•
fixed and floating charge over all assets and undertakings of the entity involved in the relevant project, namely,
AVJennings Wollert Pty Limited;
• first registered mortgage over the real estate inventories of the entity involved in the relevant project, namely,
•
•
•
AVJennings Wollert Pty Limited;
fixed and floating charge over the assets and undertakings of a related company involved in the relevant project,
namely, St Clair JV Nominee Pty Limited;
deed of mortgage over the shares held by the relevant entity, namely, AVJennings Properties SPV No 4 Pty Limited,
in a related company, namely, St Clair JV Nominee Pty Limited; and
fixed and floating charge over the assets and undertakings, including project rights, of a relevant entity, namely,
AVJennings Properties SPV No 4 Pty Limited.
At 30 June 2011 the facilities shown are interchangeable up to $5,000,000 (2010: $5,000,000) between the bank
loans and performance bonds/other non-cash facilities. The lines of credit shown are maximum limits which are
available progressively as projects are developed. The expiry dates for the facilities are between February 2014 and
March 2014. Individual projects are expected to be completed and the outstanding amounts repaid or refinanced
prior to expiry of each facility. As at 30 June 2011, the balance outstanding on these facilities was $19,119,000 (2010:
$20,000,000).
The carrying amounts of the pledged assets are as follows:
Wollert, Victoria
Cheltenham, South Australia
2011
$’000
2010
$’000
47,211
41,509
47,663
40,361
The weighted average interest rate on the project funding loans at the year-end was 6.07% (2010: 6.03%).
(c) Surety bond facility
The Consolidated Entity has entered into a Surety bond facility of $10,000,000 (2010: $Nil). The Surety bond facility
is subject to review annually. The next review is due by 30 April 2012. The Surety bond facility is secured by a Deed of
Indemnity between the Parent Entity and various controlled entities. Details of the controlled entities, included in the
Deed of Indemnity are set out in note 19.
(d) Leasing facilities
No separate security has been provided by the Consolidated Entity in relation to lease liabilities. The rights to the
leased assets revert to the lessor in the event of default. The facility was due to mature on 30 September 2011.
A renewed facility of $1,200,000 has been approved by its bankers for a further 2 years to 30 September 2013.
Documentation is in the process of being completed and is expected to be signed by 30 September 2011. The current
interest rates on finance leases range from 8.95% to 9.36% (2010: 6.51% to 10.14%). The lease terms are 36 months.
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 69
24. INTEREST-BEARING LOANS AND BORROWINGS (CONTINUED)
(e) Interest rate hedge instruments
The Consolidated Entity manages the cash flow effect of interest rate risk by entering into interest rate cap and
interest rate swap contracts.
Interest rate cap contracts are entered into for a principal Australian Dollar amount by paying an upfront premium that
covers a specific period. The strike rates for these contracts are benchmarked against the BBSY bid rate (Australian
Bank Bill Swap Reference Rate – Average Bid Rate) on a quarterly basis. Settlement occurs quarterly, in favour of the
Consolidated Entity, should the BBSY bid rate be above the cap strike rate (movements in the variable rate are directly
proportional to movements in the BBSY bid rate).
Under the interest rate swaps, at the end of every quarter, the Consolidated Entity and the counterparty agree to
exchange the difference between the interest calculated by applying the fixed contract rates and that calculated by
applying the BBSY bid rate to the principal Australian Dollar amounts.
Details of interest rate derivative contracts are as follows:
Type of derivative
Expiry Date
14 January 2013
14 January 2013
14 January 2013
14 January 2013
1 July 2010
1 July 2010
1 July 2010
Interest rate cap
Interest rate cap
Interest rate swap
Interest rate swap
Interest rate cap
Interest rate swap
Interest rate swap
25. TAX PAYABLE
Income tax payable
26. DEFERRED TAX LIABILITIES
The provision for deferred income tax is made up as follows:
- capitalisation of development costs
- accrued income
- prepayments, accruals/provisions and investments
- brand name
- unrealised loss on interest derivatives
Deferred tax liabilities
Strike
Rate
%
5.35
5.39
-
-
7.75
-
-
Fixed
Rate
%
-
-
5.35
5.39
-
7.60
7.62
Principal amount
2011
$’000
7,500
7,500
7,500
7,500
2010
$’000
-
-
-
-
-
-
-
65,000
35,000
30,000
2011
$’000
2010
$’000
3,540
905
2011
$’000
2010
$’000
19,542
-
(850)
845
(21)
17,951
713
(1,958)
845
(153)
19,516
17,398
70 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
26. DEFERRED TAX LIABILITIES (CONTINUED)
Reconciliations
Reconciliations of the carrying amount of the deferred tax liability at the beginning and end of the year are set out below:
Carrying amount at beginning of year
Arising temporary differences
Carrying amount at end of year
Tax losses
2011
$’000
17,398
2,118
2010
$’000
15,651
1,747
19,516
17,398
The Consolidated Entity has capital tax losses of $1,013,526 (2010: $1,013,526) which are available indefinitely for offset
against future capital gains subject to satisfaction of the relevant statutory tests.
27. PROVISIONS
Current
Employee benefits
Other
Total current provisions
Non-current
Employee benefits
Total non-current provisions
28. CONTRIBUTED EQUITY
Ordinary shares
Treasury shares
Share capital
2011
$’000
2010
$’000
2,739
496
2,915
650
3,235
3,565
694
694
646
646
Note
2011
Number
2010
Number
2011
$’000
2010
$’000
28(a)
274,588,694
274,588,694
122,837
122,837
28(b)
(1,708,786)
(666,667)
(1,002)
(259)
121,835
122,578
(a) Movement in ordinary share capital
Number
Number
$’000
$’000
As at the beginning of the year
274,588,694
274,588,694
122,837
122,837
As at the end of the year
274,588,694
274,588,694
122,837
122,837
Fully paid ordinary shares carry one vote per share and carry the right to dividends. There are currently no unexercised
or outstanding options. No options were exercised during the year.
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 71
28. CONTRIBUTED EQUITY (CONTINUED)
(b) Movement in treasury shares
2011
Number
2010
Number
2011
$’000
As at the beginning of the year
(666,667)
(1,000,000)
(259)
Acquisition of shares by AVJ Deferred
Employee Share Plan Trust
Employee share scheme issue
(1,375,452)
-
333,333
333,333
(1,042,119)
333,333
(743)
-
(743)
2010
$’000
(259)
-
-
-
As at the end of the year
(1,708,786)
(666,667)
(1,002)
(259)
Treasury shares are shares in AVJennings Limited that are held by the AVJ Deferred Employee Share Plan Trust for the
purpose of issuing shares to Executives via the AVJ Deferred Employee Share Plan.
The original cost of the shares is treated as a reduction in share capital and the underlying shares identified separately
as treasury shares.
(c) Capital risk management
When managing capital, management’s objective is to ensure that the Consolidated Entity continues as a going
concern. Management also aims to maintain an optimal capital structure that reduces the cost of capital.
In order to maintain or adjust the capital structure, management may change the amount of dividends paid to
shareholders, offer a dividend reinvestment plan, return capital to shareholders, issue new shares or sell assets to
reduce debt.
During the year ended 30 June 2011, a total dividend of $6,865,000 was paid (2010: $Nil).
Management monitors the capital mix through the debt to equity ratio (net debt/total equity) and the debt to total
assets ratio (net debt/total assets). Based on continuing operations of the Consolidated Entity, these ratios are as follows:
Interest-bearing loans and borrowings *
Less: cash and cash equivalents
Net debt
Total equity
Total assets
Net debt to equity ratio
Net debt to total assets ratio
* Excludes leased liabilities amounting to $29,000 (2010: $226,000).
2011
$’000
2010
$’000
69,119
(12,260)
82,000
(24,110)
56,859
57,890
304,528
299,418
492,614
472,571
18.7%
19.3%
11.5%
12.3%
72 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
29. RESERVES AND RETAINED EARNINGS
(a) Reserves
At 1 July 2009
Foreign currency translation
Share-based payment
At 30 June 2010
Foreign currency translation
Share-based payment
At 30 June 2011
(b) Nature and purpose of reserves
Foreign currency translation reserve
Foreign Currency
Translation Reserve
$’000
Share-based
Payment Reserve
$’000
1
(1)
-
-
(417)
-
(417)
21
-
60
81
-
242
323
Total
$’000
22
(1)
60
81
(417)
242
(94)
The foreign currency translation reserve is used to record exchange differences arising from the translation of the
Financial Statements of subsidiaries which have functional currency different to the Australian dollar. Refer to note 2(ab).
Share-based payment reserve
The share-based payment reserve is used to recognise the grant date fair value of shares issued to employees. Refer
to notes 2(s) and 7(d) for further details of the plan.
(c) Retained earnings
Movements in retained earnings were as follows:
At the beginning of the year
Net profit for the year
Dividends
At the end of the year
2011
$’000
2010
$’000
176,759
12,893
(6,865)
167,143
9,616
-
182,787
176,759
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 73
30. CASH FLOW STATEMENT RECONCILIATION
Reconciliation of net profit after tax to net cash flows from operations
Net profit after tax
Adjustments for:
Depreciation
Depreciation - Discontinued operations
Amortisation
Net loss on disposal of property, plant
and equipment
Interest income classified as investing cash flow
Share of profits of associates and joint venture entities
Share based payments expense
Fair value adjustment to derivatives
Change in operating assets and liabilities:
(Increase)/decrease in inventories
(Increase)/decrease in trade and other receivables
Decrease in prepayments and deposits
Increase in deferred tax liability
Increase in current tax liability
Increase/(decrease) in trade and other payables
Decrease in provisions
Increase in net operating assets held for sale
2011
$’000
2010
$’000
12,893
9,616
426
-
60
15
(907)
(1,779)
242
(441)
1,117
15
522
224
(567)
(2,124)
60
(2,856)
(70,948)
63,811
3,288
352
1,990
2,635
35,004
(282)
-
(180)
2,655
1,747
905
(10,347)
(1,467)
(19,685)
Net cash flows from (used in) operating activities
(17,452)
43,446
Non-cash financing and investing activities
Property, plant and equipment held for sale
Lease liability associated with assets held for sale
-
-
(1,833)
256
74 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
31. COMMITMENTS
(a) Capital commitments
Conditional contracts for the acquisition of land which have not yet been recognised in the Financial Statements
are as follows:
Within one year
Total expenditure commitments
2011
$’000
5
5
2010
$’000
5
5
(b) Finance lease commitments – Consolidated Entity as lessee
Finance leases are employed as a means of funding the acquisition of employer provided motor vehicles. Lease
payments are generally fixed. Where leases have renewal or purchase options, they are exercisable at market prices.
No finance lease arrangements create restrictions on other financing transactions.
Future minimum lease payments under finance leases and hire purchase contracts together with the present value of
the net minimum lease payments are as follows:
Finance leases
Analysis of finance lease commitments
Minimum lease payments
Within one year
After one year, but not more than five years
Total minimum lease payments
Less amounts representing finance charges
Within one year
After one year, but not more than five years
Total finance charges
Present value of minimum lease payments
Present value of lease payments
Within one year
After one year, but not more than five years
Total present value of minimum lease payments
Note
2011
$’000
2010
$’000
30
-
30
(1)
-
(1)
29
29
-
29
24
24
224
15
239
(12)
(1)
(13)
226
212
14
226
The Consolidated Entity has no finance lease arrangements where the Consolidated Entity is the lessor.
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 75
31. COMMITMENTS (CONTINUED)
(c) Operating lease commitments – Consolidated Entity as lessee
Operating leases include property, display homes, computer equipment leases and leases for motor vehicles provided
under novated leases. Certain property leases include inflation escalation and market review clauses. No renewal or
purchase options exist in relation to operating leases, and no operating leases contain restrictions on financing or
other leasing activities.
Future minimum rentals payable under non-cancellable operating leases as at 30 June 2011 are as follows:
Operating leases
Commitments in relation to leases contracted for at the
reporting date but not recognised as liabilities:
Within one year
After one year, but not more than five years
Total operating leases
Represented by:
Non-cancellable operating leases
Cancellable operating leases
Total operating leases
2011
$’000
2010
$’000
844
1,082
1,926
1,926
-
1,926
3,126
1,558
4,684
3,818
866
4,684
(d) Operating lease commitments – Consolidated Entity as lessor
Operating leases include property leases.
Future minimum rentals receivable under non-cancellable operating leases as at 30 June 2011 are as follows:
Commitments in relation to leases contracted for at the
reporting date but not recognised as assets:
Within one year
Total operating leases
2011
$’000
-
-
2010
$’000
17
17
76 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
32. CONTINGENCIES
33. SIGNIFICANT EVENTS AFTER THE BALANCE
SHEET DATE
Other than matters relating to the renewal of main
banking facilities detailed in note 24(a), no matter or
circumstance has arisen since 30 June 2011 that has
significantly affected, or may significantly affect:
a) the Consolidated Entity’s operations in future financial
years; or
b) the results of those operations in future financial years;
or
c) the Consolidated Entity’s state of affairs in future
financial years.
Unsecured
Cross guarantees
The Parent Entity has entered into deeds of cross
guarantee in respect of the debts of certain of its
controlled entities as described in note 19.
Banking facilities
The Parent Entity has entered into a cross deed of
covenant with various controlled entities to guarantee
the obligations of those entities in relation to the banking
facilities. Details of these entities are set out in note 19.
Surety bond facility
The Parent Entity has entered into a Deed of Indemnity
with various controlled entities to indemnify the
obligation of those entities in relation to the Surety bond
facility. Details of these entities are set out in note 19.
Contingent liabilities in respect of certain performance
bonds, granted by the Consolidated Entity’s financiers,
in the normal course of business as at 30 June 2011,
amounted to $1,139,000 (2010: $Nil). No liability is
expected to arise.
Legal issues
From time to time a controlled entity defends actions
served on it in respect of rectification of building faults
and other issues. It is not practicable to estimate the
amount, if any, which the entity could be liable for in this
respect. The Directors anticipate that the resolution of
any such matters currently outstanding will not have a
material effect on the Consolidated Entity’s results.
Secured
Performance guarantees
Contingent liabilities in respect of certain performance
guarantees, granted by the Consolidated Entity bankers
in the normal course of business to unrelated parties,
at 30 June 2011, amounted to $18,304,000 (2010:
$18,836,000). No liability is expected to arise.
Financial guarantees
Financial guarantees granted by the Consolidated
Entity’s bankers to unrelated parties in the normal course
of business at 30 June 2011, amounted to $15,663,000
(2010: $871,000). No liability is expected to arise.
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 77
34. RELATED PARTY DISCLOSURES
(a) Ultimate parent
AVJennings Limited is the ultimate Australian parent entity. SC Global Developments Limited (incorporated in
Singapore) is the ultimate parent entity.
(b) Share and share option transactions with Directors and Director-related entities
The aggregate number of shares and options held at the reporting date either directly or indirectly or beneficially by
the Directors or by an entity related to those Directors of AVJennings Limited are as follows:
Owned by Directors directly, or indirectly or beneficially
2011
Number
2010
Number
Fully paid ordinary shares
138,641,704
138,308,371
Directors and Director-related entities received normal dividends on these ordinary shares.
(c) Entity with significant influence over AVJennings Limited
137,370,023 ordinary shares equating to 50.03% of the total ordinary shares on issue (2010: 137,370,023 & 50.03%
respectively) were held by SC Global Developments Limited and its associates in the Parent Entity at 30 June 2011.
Certain Directors of SC Global Developments Limited are also Directors of AVJennings Limited. Details of Directors’
interests in the shares of the Parent Entity are set out in the Directors’ Report.
(d) Parent Entity amounts receivable from and payable to controlled entities
At 30 June 2011, the Parent Entity has not set up any provisions against debts owed by related parties as recoverability
is considered probable (2010: $Nil). An impairment assessment is undertaken each financial year-end to determine
whether there is objective evidence that a related party receivable is impaired. If evidence of impairment exists, the
impairment loss is recognised immediately.
78 |
AVJennings limited · A bn 44 004 327 771
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
34. RELATED PARTY DISCLOSURES (CONTINUED)
(e) Transactions with related parties
Entity with significant influence over the Consolidated Entity:
SC Global Developments Limited
Consultancy fee paid/payable
Reimbursement of sundry expenses
Associate:
Epping JV
Note
2011
$
2010
$
(i)
(ii)
600,000
9,552
663,712
7,612
Management fee received/receivable
527,386
1,162,833
Joint Ventures:
Meridan Plains
Management fee received/receivable
Accounting services fee received/receivable
Eastwood
Management fee received/receivable
Accounting services fee received/receivable
Arlington Rise
Management fee received/receivable
Woodville
Licence fees paid to access land
Dividends received
419,736
50,000
586,253
50,000
1,768,632
1,262,976
50,000
50,000
367,440
2,274,162
1,000,000
-
-
-
(i) Consultancy fees paid to SC Global Developments Limited of $600,000 (2010: $600,000 consultancy fees paid to SC Global
Developments Limited and $63,712 consulting fees paid to Chartwell Management Services Pty Limited of which a Director,
BG Hayman is the Chairman).
(ii) Overseas airfares reimbursed for HR Hochstadt and B Chin to attend meetings in Australia.
(f) Joint ventures in which related entities in the Consolidated Entity are venturers
Joint ventures in which the Consolidated Entity has an interest are set out in note 17 and note 20.
(g) Outstanding balances arising from provision of services
The following balances are outstanding at the end of the reporting period in relation to transactions with related parties.
Current receivables
Joint Ventures
(h) Loans from related party
Loan received
Joint Venture
2011
$’000
2010
$’000
6,014
4,208
2,000
-
(i) Terms and conditions of transactions with related parties
Transactions with related parties are made at arm’s length both at normal market prices and on normal commercial terms.
Outstanding balances at year-end are unsecured, interest free, at call and settlement occurs in cash.
notes to the consolid Ated fin AnciAl stAtements
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 79
35. SHARE-BASED PAYMENT PLANS
(a) Recognised share-based payment expenses
Total expenses arising from share-based payment transactions were recognised by AVJennings Properties Limited.
The amount recognised as part of employee benefit expenses is shown in the table below:
Expense arising from equity-settled share-based payment transactions
Total expense arising from share-based payment transactions
2011
$’000
242
242
2010
$’000
60
60
Vesting subject to both service and performance conditions
A total of 1,375,452 shares were granted on 28 September
2010 to certain executives. These shares are subject to
both service and performance conditions and will vest to
the extent that each of these conditions is satisfied.
The service vesting condition is that the employee must
still be employed by AVJennings at 30 September 2013,
except in the event of death or permanent disablement in
which case the shares will vest to the estate. In the event
that the employee is retrenched, the shares may vest
subject to certain conditions.
The performance vesting conditions include the
achievement of an Earnings Per Share (EPS) hurdle and
a Total Shareholder Return (TSR) hurdle. The fair value
of the EPS element of the shares is the market value at
grant date. The Monte Carlo Model is used to fair value
the TSR element. The Model simulates AVJennings TSR
and compares it against the ASX Small Industrials Retail
Index. The Model takes into account historic dividends,
share price volatilities and the risk-free yield on an
Australian Government Bond at the grant date matching
the remaining effective life of 3 years.
The share-based payment plan is described in note 35(b).
There have been no cancellations or modifications to the
plan during 2011.
(b) Type of share-based payment plan
AVJ Deferred Employee Share Plan
The AVJ Deferred Employee Share Plan (the Plan) was
formed to administer the employee share scheme. The
Plan operates schemes under which shares may be
acquired by the Plan Trustee on behalf of employees
for no cash consideration subject to certain vesting
conditions being satisfied. Shares acquired under the
Plan for employees are acquired on-market. Employees
may elect not to participate in the scheme. Shares held
by the Plan’s trust and not yet allocated to employees
at the end of the reporting period are shown as treasury
shares in the financial statements.
Share-based compensation benefits are provided to
Executives via the Plan. These equity-settled transactions
are measured at fair value at the grant date. The original
cost of the shares is treated as a reduction in share capital
and the underlying shares identified separately as treasury
shares. The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a
straight-line basis over the vesting period and the credit
taken to share-based payment reserve in equity.
Vesting subject to service condition only
The Chief Executive Officer was granted 1,000,000
shares on 7 March 2009 which vest in equal proportions
on the first, second and third anniversary of his
appointment. The vesting dates are 19 February 2010,
19 February 2011 and 19 February 2012. The market
value of the shares at the grant date is taken to be the
fair value. The service condition is the continuity of
employment over the 3 years. The unvested shares are
held by the AVJ Deferred Employee Share Plan Trust.
80 |
AVJennings limited · A bn 44 004 327 771
diR ectoRs’ decl AR Ation
In accordance with a resolution of the Directors of AVJennings Limited, we state that:
1) In the opinion of the Directors:
i) the Financial Statements and Notes of the Consolidated Entity are in accordance with the Corporations Act 2001,
including;
a) giving a true and fair view of the Consolidated Entity’s financial position as at 30 June 2011 and of their
performance for the year ended on that date; and
b) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
Corporations Regulations 2001;
ii) the Financial Statements and Notes also comply with International Financial Reporting Standards as disclosed in
note 2; and
iii) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
2) This declaration has been made after receiving the declarations required to be made to the Directors in accordance
with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2011.
3) In the opinion of the Directors, as at the date of this declaration, there are reasonable grounds to believe that the
members of the Closed Consolidated Entity identified in note 19 will be able to meet any obligations or liabilities to
which they are or may become subject, by virtue of the Deed of Cross Guarantee.
On behalf of the Board
Simon Cheong
Director
28 September 2011
Peter Summers
Director
independent AuditoR’s R epoRt
to the membeRs of AVJennings limited
AnnuAl R epoRt 2011
| 81
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF AVJENNINGS LIMITED
Report on the financial report
We have audited the accompanying financial report of
AVJennings Limited, which comprises the consolidated
statement of financial position as at 30 June 2011, the
consolidated statement of comprehensive income,
the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year
then ended, notes comprising a summary of significant
accounting policies and other explanatory information,
and the directors’ declaration of the consolidated entity
comprising the company and the entities it controlled at the
year’s end or from time to time during the financial year.
Directors’ responsibility for the financial report
The directors of the company are responsible for the
preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001 and for such
internal controls as the directors determine are necessary
to enable the preparation of the financial report that is
free from material misstatement, whether due to fraud
or error. In Note 2, the directors also state, in accordance
with Accounting Standard AASB 101 Presentation of
Financial Statements, that the financial statements
comply with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the
financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards.
Those standards require that we comply with relevant
ethical requirements relating to audit engagements
and plan and perform the audit to obtain reasonable
assurance about whether the financial report is free from
material misstatement.
An audit involves performing procedures to obtain
audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend
on the auditor’s judgment, including the assessment
of the risks of material misstatement of the financial
report, whether due to fraud or error. In making those
risk assessments, the auditor considers internal controls
relevant to the entity’s preparation and fair presentation
of the financial report in order to design audit procedures
that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness
of the entity’s internal controls. An audit also includes
evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall
presentation of the financial report.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
audit opinion.
Independence
In conducting our audit we have complied with the
independence requirements of the Corporations Act
2001. We have given to the directors of the company a
written Auditor’s Independence Declaration, a copy of
which is included in the directors’ report.
Opinion
In our opinion:
a. the financial report of AVJennings Limited is in
accordance with the Corporations Act 2001, including:
i
giving a true and fair view of the consolidated
entity’s financial position as at 30 June 2011 and of
its performance for the year ended on that date; and
ii
complying with Australian Accounting Standards
and the Corporations Regulations 2001; and
b. the financial report also complies with International
Financial Reporting Standards as disclosed in Note 2.
Report on the remuneration report
We have audited the Remuneration Report included
in pages 16 to 21 of the directors’ report for the year
ended 30 June 2011. The directors of the company are
responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A
of the Corporations Act 2001. Our responsibility is to
express an opinion on the Remuneration Report, based
on our audit conducted in accordance with Australian
Auditing Standards.
Opinion
In our opinion, the Remuneration Report of AVJennings
Limited for the year ended 30 June 2011, complies with
section 300A of the Corporations Act 2001.
Ernst & Young
David Simmonds
Partner
Sydney
28 September 2011
82 |
AVJennings limited · A bn 44 004 327 771
coRpoR Ate goVeRnAnce stAtement
foR the yeAR ended 30 June 2011
This Corporate Governance Statement indicates
the Company’s conformance with the Australian
Securities Exchange’s (“ASX”) Corporate Governance
Council’s, “Corporate Governance Principles and
Recommendations” (2nd Edition), as required by the ASX
Listing Rules.
The AVJennings Corporate Governance Statement is
structured with reference to the ASX recommendations.
Areas of non compliance will be disclosed under the
relevant principle. All corporate practices within this Report
were in place for the entire year unless otherwise indicated.
This Statement refers to documents that support the
Company’s Corporate Governance framework and it
is posted in the Corporate Governance section on the
Company’s website: www.avjennings.com.au.
Principle 1: Lay solid foundations for management and
oversight by the Board
Recommendation 1.1 of the ASX Corporate Governance
Principles requires the Company to establish and
disclose the functions reserved for the Board and those
delegated to management. The roles and responsibilities
of the Company’s Board, Board Committees and senior
management have been established through Board
approved Charters, which have been operational
throughout the period and are disclosed on the
Company’s website at www.avjennings.com.au.
All persons who are invited and agree to act as a Director
of the Company do so by a formal letter of consent.
To assist it in carrying out its responsibilities, the Board
has established several standing Board Committees of its
members. Director appointments to Board Committees
are by formal resolutions of the Board. The Chairman of
each Committee reports on any matters of substance
at the next full Board Meeting. Membership of Board
Committees and attendance at Board and Committee
meetings is tabulated in the Director’s Report.
The Board Committees are:
• Audit Committee
• Nominations Committee
• Remuneration Committee
Investments Committee
•
Risk Management Committee (incorporating the
•
Occupational Health, Safety and Environment
sub-committee)
The roles and responsibilities of the Chief Executive
Officer and senior management are established through
key performance objectives. They are assessed against
those objectives on an annual basis, or more frequently
if that is indicated. During the period, the Nominations
Committee has reviewed the performance of Board
members.
The Remuneration Committee monitors the performance
of the Chief Executive Officer. It also monitors the
performance of the Chief Financial Officer and the
Company Secretary in consultation with the Chief
Executive Officer. The Chief Executive Officer assesses
the performance of senior management and these
assessments are reviewed by the Remuneration
Committee. The process for evaluating the performance
of senior executives is set out in the Remuneration Report.
The Board has also approved financial delegations and
personnel delegations which cover specific areas of
delegated responsibility to the Managing Director and
senior management.
During the period, the Board has considered broad
Corporate Governance matters, including the
continuing relevance of existing committees and its own
performance and reaffirmed its belief that the Committee
structures provided sound oversight of Management, by
the Board.
Principle 2: Structure the Board to add value
Directors
The Company’s Constitution and Section 201A of the
Corporations Act 2001 stipulate that a public company
must have at least three Directors.
The Board has adopted guidelines concerning its
composition. For the time being, the Board has
determined that there shall be at least five Directors,
increasing where additional expertise is required.
The current Directors of the Company are listed in
the Directors’ Report with a brief description of their
qualifications, experience, special responsibilities and
status as Executive, Non- Executive or Independent
Director.
The Board includes both Executive and Non-Executive
Directors with a majority of Non-Executive Directors. The
Non-Executive Directors include both independent and
non-independent Directors. There is a strong element of
independence on the Board, with four of the six Non-
Executive Directors being independent, determined in
accordance with the ASX guidelines on independence.
The other two Non-Executive Directors, who represent
SC Global Developments Limited, a substantial
shareholder, have no involvement in the operational
management of the Company. The Managing Director is
an Executive Director.
coRpoR Ate goVeRnAnce stAtement
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AnnuAl R epoRt 2011
| 83
The Chairman of the Board is selected by the full Board.
The current Chairman of the Board, Mr Simon Cheong, is
also Chairman of the Board of a substantial shareholder,
SC Global Developments Limited. Although there is no
lead Independent Director as recommended by the ASX
Principles, the Deputy Chairman, Mr Jerome Rowley, is
an Independent Director. The roles of the Chairperson
and Chief Executive Officer are exercised by different
individuals.
The Board meets around seven times a year either in
person or by teleconference. Meeting venues are planned
to enable Directors to familiarise themselves with major
development projects. A formal agenda is in place for
each meeting.
New Directors are inducted individually on the
Company’s financial, strategic, operational and risk
management positions. Directors have access to
Company records and information through the Company
Secretary and other relevant senior officers. They receive
regular detailed reports on financial and operational
aspects of the Company’s business and may request
elaboration or explanation of those reports at any time.
Each Director has the right to seek independent
professional advice at the Company’s expense. Prior
approval of the Chairman is required but this may not
be unreasonably withheld. Any advice obtained is made
available to the Chairman.
Nominations Committee
The Board has a Nominations Committee,
comprising three Independent Directors, Mr RJ Rowley,
Mr HR Hochstadt, and Mr BG Hayman and two Non-
Executive Directors, Mr S Cheong and Mrs E Sam, who
is also Chairperson of the Committee.
The Nominations Committee Charter sets out its role,
responsibilities, composition, structure, membership
requirements and guidelines and is posted on the
Corporate Governance section of the Company’s
website. The purpose of the Committee is to consider
the performance of Directors and the appointment
of new Directors. The Committee may make use of
external consultants if that is deemed appropriate. The
Committee meets at least annually.
Company Secretary
The Board appoints the Company Secretary and
all Directors have access to the Company Secretary.
Details of the Company Secretary’s experience and
qualifications are set out in this Report.
The role of the Company Secretary is to support the
effectiveness of the Board by monitoring and advising
the Board on its Corporate Governance responsibilities
by means of its charters, procedures and updates on
legislation and regulation. The Company Secretary is
also responsible for lodgements with relevant regulators,
management of dividend payments and/or Dividend
Reinvestment Plan allotments and management of the
relationship between shareholders and the share registry.
Principle 3: Promote ethical and responsible decision
making
Code of Conduct
The Company has a Code of Conduct which sets out
the behaviour required of all Board members, senior
management, employees and contractors throughout
the period. The content of the Code is integrated into
management practices and forms part of the terms
of employment of all Company employees. The Code,
which is disclosed on the Company’s website, provides a
mechanism to employees to report breaches of the Code
without fear of retribution. Senior management deals
with breaches of the Code and monitors compliance.
The Company Secretary and the Chief Executive Officer
report to the Board and the Audit Committee on various
aspects of Code Compliance.
Dealing in AVJennings’ shares
The Company’s Securities Trading Policy places
restrictions on the ability of Directors, officers and
employees to trade in the Company’s shares during
specified restricted “black out” periods. The restrictions
are designed to minimise the risk of actual or perceived
insider trading.
Principle 4: Safeguard integrity in financial reporting
Audit Committee
The Company has an Audit Committee comprising
of two Independent Directors, Mr B Chin (who is a
Chartered Accountant and is also the Chairman of the
Committee), Mr RJ Rowley and one Non-Executive
Director, Mrs E Sam. The Chairman of the Committee is
a different individual to the Chairman of the Board. The
Audit Committee Charter sets out its role, responsibilities,
composition, structure and membership requirements
and is posted on the Corporate Governance section of
Company’s website.
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AVJennings limited · A bn 44 004 327 771
coRpoR Ate goVeRnAnce stAtement
foR the yeAR ended 30 June 2011
All other members of the Board are invited to attend
Audit Committee meetings as observers and in a non
voting capacity. Usually, all Board members attend
all Audit Committee meetings either as members or
observers. The Audit Committee papers, including the
minutes of the previous Committee Meetings, are sent to
all Board members.
The Chief Executive Officer, Chief Financial Officer,
Company Secretary, Internal Auditor and the External
Auditor attend Audit Committee meetings at the
discretion of the Committee. The Committee also meets
privately with the External Auditor at least once a year
and usually twice per year, without management being
present. In addition, the Internal Auditor reports directly
to the Audit Committee and the Committee meets
privately with the Internal Auditor at least once per year.
The Minutes of each Committee meeting are circulated
after the meeting and the signed minutes tabled at the
subsequent meeting of the Committee. The Chairman
of the Committee is available to report on or answer
questions about the Committee’s conclusions and
recommendations to the Board. The Committee meets at
least three times during the year.
Audit Governance
The Company has a policy on the provision of auditing
and related services. The Committee is satisfied with the
independence of the External Auditor.
During the reporting period, the Company had its 2010
Annual Report and Audit Committee Charter posted on
its website. The Annual Report has details of the Audit
Committee’s membership and the number of meetings
held and attended.
Financial Reporting
The Board receives regular reports about the financial
condition and operational results of the Company
throughout the year. In relation to the half year and
annual Financial Statements, senior management is
required to sign off on the systems and processes within
their area of responsibility. This procedure supports
the Managing Director and Chief Financial Officer in
their certification to the Board in effect stating that the
Company’s accounts present a true and fair view, in all
material aspects, of the Company’s financial condition
and operational results and accord with the relevant
accounting standards.
Principle 5: Make timely and balanced disclosure
A continuous disclosure regime operates throughout the
Group. Policies and Procedures are in place to ensure
matters that a person could reasonably expect to have a
material effect on the share price are announced to the
ASX and Singapore Exchange (SGX) in a timely manner.
These policies and procedures have been formally
communicated to all relevant staff. The Company
Secretary is the nominated Continuous Disclosure
Officer. The Board is advised of any notifiable events.
The Board approves, or is advised of, all releases that are
made to the ASX and the SGX. All announcements made
by the Company are posted on the Company’s website in
the “Shareholder” section.
Principle 6: Respect the rights of Shareholders
The Company endeavours to keep its Shareholders fully
informed of matters likely to be of interest to them. It
does this through:
• Reports to the ASX, SGX and the press;
• Half and full year profit announcements;
• Annual Reports;
•
Investor briefings and information provided to
analysts, (which are released to the ASX and SGX prior
to being provided to the analysts);
Continuous disclosure to the ASX pursuant to the ASX
Listing Rules and notification of the same information
to the SGX; and
Posting all the above and any other notifications made
by the Company to Shareholders, on its website.
•
•
The Company’s website – www.avjennings.com.au has a
section titled “Shareholders” with sub sections on:
•
•
The Company’s previous Annual Financial Reports
and Half Yearly Reports;
The Company’s share price on the ASX- provided by a
link to the ASX web site;
• Announcements made to the ASX and SGX;
• Copies of investor presentations;
•
Corporate Governance Charters and Policies including
a Shareholder Communication Policy;
Terms and conditions of the Company’s Dividend
Reinvestment Plan; and
•
• Media releases.
At the Annual General Meeting, the Chairman
encourages questions and comments from Shareholders
and seeks to ensure the Meeting is managed to give
the maximum number of Shareholders an opportunity
to participate. In the interests of clarity, questions on
operational matters may be answered by the Chief
Executive Officer or another appropriate member of
senior management.
The External Auditor attends the Company’s Annual
General Meeting and is available to respond to questions
about the conduct of the audit and the preparation and
content of the Independent Audit Report.
coRpoR Ate goVeRnAnce stAtement
foR the yeAR ended 30 June 2011
AnnuAl R epoRt 2011
| 85
Principle 7: Recognise and manage risk
The Board has ultimate responsibility for risk
management, compliance and control functions
across the Group. These functions are aligned with the
Company’s strategy and business objectives.
The Company has in place internal controls intended
to identify and manage significant business risks.
These include the review of development proposals
and the management of their ongoing performance.
Management prepares the Risk Management Plan and
the Board is responsible for reviewing and approving it.
The Board has established a Risk Management
Committee, which incorporates a sub-committee
responsible for occupational health, safety and
environmental matters. The Committee comprises two
Independent Directors, Mr RJ Rowley (Chairman) and
Mr BG Hayman, and generally meets quarterly. The
Committee is supported by the Chief Executive Officer,
Chief Financial Officer and the Company Secretary.
The Risk Management Committee is responsible for
identifying and considering new risks and for monitoring
management’s implementation of the Risk Management
Plan, taking the Internal Auditor’s review into account.
The Company’s assets are insured under a comprehensive
insurance program which is reviewed annually.
The Company also has an Investments Committee
comprising one Non-Executive Director, Mr S Cheong,
two Independent Directors, Mr BG Hayman and
Mr RJ Rowley and one Non-Director member,
Mr David Tsang. The Committee considers all major
land development acquisition and disposal proposals
that are over monetary limits delegated to management.
It also conducts a pre-commencement review
and ongoing project reviews during the life of all
development projects.
The Chief Executive Officer and the Chief Financial
Officer are required to provide the Board with a written
statement in accordance with section 295A of the
Corporations Act to the effect that:
•
•
The integrity of the Financial Statements is founded
on a sound system of risk management and internal
compliance and control which implements the policies
adopted by the Board; and
The Company’s risk management and internal
compliance and control system, in so far as it relates
to financial risk, is operating efficiently and effectively
in all material respects.
Principle 8: Remunerate fairly and responsibly
The Board has established a Remuneration
Committee to review and determine, among other
things, remuneration policies and packages applicable
to any Executive Directors, the Company Secretary and
direct reports to the CEO. It also reviews remuneration to
senior managers of the Company and the remuneration
policies of the Company. The Committee meets at least
annually and usually twice per year and its Charter is
available on the Company’s web site under the Corporate
Governance Section.
The Committee consists of two Non-Executive
Directors, Mrs E Sam (Chairperson) and Mr S Cheong,
and two Independent Directors, Mr HR Hochstadt
and Mr BG Hayman. The Board is of the view that the
Committee, which consists entirely of Non-Executive
Directors, albeit without an independent majority or
Chairperson, is structured appropriately to perform its
functions in reviewing the remuneration of Company
executives and staff.
The Committee reviews and reports to the Board on:
•
Conditions of service and remuneration of the Chief
Executive Officer and his direct reports;
• Performance of the Chief Executive Officer;
•
Remuneration of the Chief Financial Officer and the
Company Secretary;
Remuneration policies for the Company, which include
the performance review of all employees, senior
management and Board members;
•
• Proposals for reward initiatives;
• Succession plans for senior management; and
• Other related matters as directed by the Board.
The Chief Executive Officer attends meetings of the
Remuneration Committee by invitation when required to
report on, and discuss, senior management performance
and remuneration matters. He is excluded from
Committee deliberations relating to his position.
The Committee is empowered to seek external professional
advice on any matter within its terms of reference.
Senior managers of the Company receive a balance of
fixed and variable (at risk) remuneration. The proportions
vary at different levels within the Company, reflecting the
capacity of the senior managers to influence the overall
outcome of the Company’s operations and returns to
Shareholders. The bonuses (if any) to executives are
based on a review of individual executive performance as
well as the Company’s overall financial performance.
Director’s fees paid to Non-Executive Directors and
Independent Non-Executive Directors are determined by
the Board, and are within the aggregate limits approved
by Shareholders at a General Meeting. The Independent
Non-Executive Directors currently receive fees paid by
the Company. The Committee has available to it data on
fees paid to independent directors by a wide range of
Companies. The remaining two Non-Executive Directors
do not receive fees, however the Company pays a
consulting fee to the substantial Shareholder, SC Global
Developments Limited.
86 |
AVJennings limited · A bn 44 004 327 771
shAReholdeR infoR mAtion
As At 16 septembeR 2011
1.
NUMBER OF SHAREHOLDERS AND DISTRIBUTION OF EQUITY SECURITIES
Australian
Securities
Exchange
Singapore
Exchange
584
991
345
416
52
2,388
628
738
1,734
526
469
35
3,502
801
Total
1,322
2,725
871
885
87
5,890
1,429
Range of Holdings of Ordinary Shares
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
Total number of holders
Number of holders of less than a marketable parcel
2.
SUBSTANTIAL SHAREHOLDERS
As disclosed by latest notices received by the Company:
Name
SC Global Developments Ltd
Guinness Peat Group plc
Orbis Australia Group
3.
TWENTY LARGEST SHAREHOLDERS ON THE AUSTRALIAN REGISTER
Name
The Central Depository (Pte) Limited
GPG Australia Nominees Limited
Citicorp Nominees Pty Limited
National Nominees Limited
JP Morgan Nominees Australia Ltd
AVJ Employee Share Plan Managers Pty Ltd
John E Gill Trading Pty Ltd
John E Gill Operations Pty Ltd
HSBC Custody Nominees (Australia) Limited
Gillcorp Pty Limited
Allabah Pty Ltd
Avoca Equities Pty Limited
GPG Nominees Pty Ltd
Luton Pty Ltd
Ago Pty Ltd (Superannuation Fund A/c)
John E Gill Operations Pty Ltd
Di Iulio Homes Pty Ltd
D R M Gill & J M Gill (Gill Super Fund A/c)
Savoy Management Pty Ltd
Scorpio Nominees Pty Ltd (Gwenton A/c)
Ordinary Shares
%
137,370,023
20,938,920
14,133,206
50.03
7.63
5.15
Ordinary Shares
%
171,630,250
62.50
20,110,858
12,916,769
11,755,809
9,347,710
3,209,825
3,109,991
3,050,288
2,450,990
2,274,801
2,110,402
1,322,065
1,054,289
1,050,000
928,427
849,660
658,468
643,201
560,758
538,209
7.32
4.70
4.28
3.40
1.17
1.13
1.11
0.89
0.83
0.77
0.48
0.38
0.38
0.34
0.31
0.24
0.23
0.20
0.20
Total
249,572,770
90.89
AnnuAl R epoRt 2011
| 87
shAReholdeR infoR mAtion
As At 16 septembeR 2011
4.
TWENTY LARGEST SHAREHOLDERS ON THE SINGAPORE REGISTER
Name
UOB Nominees (2006) Pte Ltd
United Overseas Bank Nominees
DBS Nominees Pte Ltd
UOB Kay Hian Pte Ltd
Trimount Pte Ltd
Oei Hong Leong Foundation Pte Ltd
OCBC Nominees Singapore
Lim Chin Tiong
Tsang Sze Hang
Rowland Wong Kwok Ho
Vesmith Investments Pte Ltd
Tan Chee Jin
Pansbury Investments Pte Ltd
Ooi Kim Sew
Hexacon Construction Pte Ltd
Phillip Securities Pte Ltd
Teo Chiang Long
HSBC (Singapore) Nominees Pte Ltd
Mohamed Salleh So Kadir
Goh Choon Eng
Ordinary Shares
%
128,031,646
46.63
9,567,400
1,650,214
1,597,820
1,185,672
1,044,366
871,545
714,800
598,140
527,738
453,483
400,000
354,400
280,000
263,200
251,864
250,648
248,963
241,532
188,905
3.48
0.60
0.58
0.43
0.38
0.32
0.26
0.22
0.19
0.17
0.15
0.13
0.10
0.10
0.09
0.09
0.09
0.09
0.07
Total
148,722,336
54.16
Percentages are calculated on the total number of shares on issue.
5.
VOTING RIGHTS
Ordinary Shareholder
On a show of hands, every member present in person or by representative, proxy or attorney shall have one vote,
and on a poll each fully paid share shall have one vote.
6.
TOTAL NUMBER OF SHARES
The total number of shares on issue and listed on the Australian Securities Exchange is 274,588,694.
SHARE REGISTRY
Australia
Computershare Investor Services Pty Ltd
Yarra Falls
452 Johnston Street
Abbotsford VIC 3067
Telephone +61 3 9415 5000
Singapore
The Central Depository (Pte) Ltd
4 Shenton Way
#02-01 SGX Centre 2
Singapore 068807
Telephone +65 6535 7511
ANNUAL GENERAL MEETING
The Annual General Meeting of the Company
will be held at:
Meeting Rooms 23.01 and 23.02
Level 23, Ernst & Young Building
8 Exhibition Street
Melbourne VIC 3000
Friday, 18 November 2011 at 10.00am
DIVIDENDS
An interim dividend of 1.00 cent per share (fully franked)
was paid on 18 April 2011. A final dividend of 1.50 cents
per share (fully franked) will be paid on 19 October 2011.
88 |
AVJennings limited · A bn 44 004 327 771
compAny pARticulAR s
DIRECTORS
Mr Simon Cheong
Mr Jerome Rowley
Mr Herman Hochstadt
Mrs Elizabeth Sam
Mr Bobby Chin
Mr Bruce Hayman
Mr Peter Summers
COMPANY SECRETARIES
Mr Peter Summers
Mr Carl Thompson
Mrs Sandra Vogiatzakis
PRINCIPAL REGISTERED
OFFICE IN AUSTRALIA
1 Lakeside Drive
Burwood East VIC 3151
Telephone +61 3 9210 9888
AUDITORS
Ernst & Young
680 George Street
Sydney NSW 2000
BANKERS
Australia and New Zealand Banking Group Ltd
BOS International (Australia) Ltd
HSBC Bank Australia Ltd
United Overseas Bank Limited
STOCK EXCHANGE LISTINGS
Australia
The Company is listed on:
The Australian Securities Exchange
525 Collins Street
Melbourne VIC 3000
Singapore
The Company’s shares are also quoted and traded on:
The Singapore Exchange
2 Shenton Way
#19-00 SGX Centre 1
Singapore 068804
through the Central Limit Order Book System (CLOB).
ANNuAL
rEporT 2011
AV JENNINGS LIMITED ABN 44 004 327 771
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