AVJENNINGS LIMITED ABN 44 004 327 771
Contents
Managing Director’s Statement 1
Company Highlights
Results Summary to
30 June 2013
Chairman’s Report
Creating and Supporting
Communities
Property Portfolio
Directors’ Report
3
3
4
6
8
12
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
22
23
24
25
26
Directors’ Declaration
Independent Auditor’s
Report to the Members of
AVJennings Limited
Corporate Governance
Statement
Shareholder Information
Company Particulars
71
72
73
78
80
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
1
WelCome to the 2013 AnnuAl report
A year of transition and recovery
2013 was a year of transition and recovery for AVJennings. Having
successfully weathered very subdued market conditions in 2012 by hunkering
down and conserving cash, the Company was well-positioned to capitalise
on improvement in consumer sentiment by expanding built form production
from the middle of last year.
Product delivered in one half is typically realised in the next and the strong
turnaround in AVJennings’ performance in the second half of 2013 is testimony
to this fact. The long-awaited but slow and steady return of consumers to the
marketplace underpins our decision to prudently elevate work in progress
back towards more normal sustainable levels. Importantly, the outlook
for new residential property is improving and is supported by favourable
macroeconomic conditions, improved affordability and a chronic under-supply
of housing that is recognised by all levels of Government.
Strengthening its balance sheet with fresh equity raised during the year,
AVJennings looks forward with confidence, anticipating the roll out of product
from exciting new estates such as ‘Arcadian Hills’ in Cobbitty, New South Wales
and ‘Hazelcroft’ in Doreen, Melbourne. It is through the creation of communities
such as these – in places where people want to live – that AVJennings honours
the values with which its brand is so closely associated in the minds of
generations of consumers: quality, affordability and reliability.
Peter Summers
Managing Director
2 | AVJENNINGS LIMITED · ABN 44 004 327 771
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
3
CompAny highlights
• Strong improvement in second half (2H13)*:
– Revenue up 99.6%
– PAT excluding impairment up 226.7%
• Lots under development increased by:
– 125% from June 2012
– 29% from December 2012
• Main banking facilities extended for 2 years
• Successful completion of $40m Entitlement Offer
• Signs of continuing improvement in market conditions
• No impairments recorded in second half (2H13)
* Based on 2nd half (2H13) compared to 1st half (1H13)
Profit
$3.8m
Revenue
$105.6m
$52.9m
2H13
1H13
2H13
1H13
$(3.0)m
Profit after tax, excludes impairment
results summAry to 30 June 2013
Revenues
Profit/(Loss) after Tax:
– statutory
– excluding provision for impairment
Gross Margins
Total Assets (at lower of historic cost or NRV)
Inventory Impairment:
– after tax
– book value of inventory
Total Number of Lots (under control)
Net Tangible Assets Per Share
$158.5 million
($15.3 million)
$0.8 million
21.1%
$462.9 million
$16.1 million
5.5%
9,952
$0.76
4 | AVJENNINGS LIMITED · ABN 44 004 327 771
Artists impression
ChAirmAn’s report
To My Fellow Shareholders
Market Overview
2013 was a year of inflation from
the Company’s perspective.
The first half suffered from the
confidence-sapping effects of
longstanding themes, some of
which were discussed in my 2012
report (continuing global economic
uncertainty, a sense of lassitude in
the domestic electorate and the
mixed blessings conferred by the
uncharacteristically high Australian
dollar) albeit with diminishing effect,
whereas activity in the second half
accelerated significantly.
Having prudently reduced work
in progress levels during 2012 in
response to very subdued market
conditions, management detected
subtle indications of a lift in the
consumer mood from around the
middle of the first half, leading the
Company to expand production,
particularly in built form. This
decision was disclosed to the
market in the first half and bore
fruit shortly thereafter as second
half revenue nearly doubled
and a first half loss before tax
and impairments was more than
reversed.
Capitalising on a culture of tight
cost control, the Company’s
productivity continues to rise as
greater use is made of existing
capacity to steadily and prudently
lift work in progress back up to
long term sustainable levels in
response to increasingly visible
demand signals.
Previously the long-missed piece,
consumer confidence to transact is
steadily returning to complete the
jigsaw presented by such factors
as ongoing low mortgage rates
and inflation, a relatively stable
unemployment rate, chronic under-
supply of housing in some of the
Company’s markets, and generally
improved affordability.
This favourable back-drop is
enhanced by various State
subsidies for first home buyers
that are explicitly focused on new
production, together with State
and Federal affordable housing
investment incentives such as the
National Rental Assistance Scheme.
2013 Results
The Company recorded an after
tax loss of $15.3 million for the
financial year to 30 June 2013 (2012:
$29.8 million loss after tax). A full
year profit after tax of $0.8 million
was recorded before the impact
of provisions for loss on inventory
taken up as at 31 December 2012
(no inventory provisions were
recorded in the second half).
The profit after tax for the
second half significantly improved
to $3.8 million (six months to
31 December 2012: $3.0 million
loss after tax and before inventory
provisions), reflecting ramped up
activity compared with the first half.
Full year revenue of $158.5 million
was down from $188.8 million in
the previous year. However, second
half revenue of $105.6 million
almost doubled that of the six
months to 31 December 2012 due
to the completion of inventory
and gradually improving market
conditions, particularly in New
South Wales.
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
5
Our Brand
Our People
On behalf of the Board, I would like
to take this opportunity to thank
the senior management team and
staff of AVJennings whose diligent
commitment to the Company’s
values during tougher times and
their willingness to make hard
decisions has left AVJennings well
positioned to benefit from emerging
positive market trends.
Our Board
As Chairman, I would also like to
acknowledge the support of my
fellow Directors, whose active
engagement, skill and business
experience strike the right balance
between guidance and oversight
to facilitate management’s efforts
in the interests of all the Company’s
stakeholders.
Simon Cheong
Chairman
AVJennings is an iconic
Australian brand with a corporate
history more than 80 years in the
making. Representing quality,
affordability and reliability, the
brand continues to facilitate retail
sales and business to business
revenue generating opportunities
alike, as well as instilling a sense
of confidence in the Company’s
other stakeholder-partners in
Australia and New Zealand.
The Company’s focus on land
development and construction
of pre-planned, integrated
communities in desirable locations
enables it to respond to customer
demands for good quality, well
designed and affordable product
by optimising land use with built
form tailored to the site. AVJennings
has a high degree of control over
the ‘look and feel’ of the estates it
delivers, a key feature that helps
explain why some customers
choose to purchase their second
or even third homes from the
Company. Having developed vibrant
communities for more than three
quarters of a century means the
Company is increasingly drawing
its customers from multiple
generations within families.
The agreement with Sekisui
House to use the trade mark
‘AVJennings Contract Homes’
following the sale of the Company’s
contract building business in
2010, expired in August 2013. Full
stewardship of the brand has now
returned to the Company and is
therefore a welcome development.
Two significant funding events
occurred during the year. Firstly, a
successful Entitlement Offer in the
second half raised $40.0 million
after transaction costs and enabled
the Company to fund increased
production, make settlement
payments in respect of previous
acquisitions and reduce debt.
Secondly, core banking facilities
were extended for two years to
30 September 2015.
The Company remains compliant
with all lending covenants
and is working towards further
diversification of its funding sources.
No dividends were paid or declared
during the year.
Outlook
The working capital cycle of a
residential developer is typically
lengthy and where it extends
across balance dates can mean that
reported results sometimes do not
clearly reflect market conditions
within a single period. The Company
is steadily rebalancing its work in
progress mix as lower margin lots
from older projects are gradually
replaced with higher margin product
from newer estates, without allowing
completed, unsold stock to build up
to unacceptable levels.
With the uncertainty created by
the Federal election now behind us
and a benign domestic economic
outlook ahead, the Board and
management increasingly expect
that a sustainable recovery is taking
root in the critical New South Wales,
Queensland and some Victorian
residential housing markets, which
augers well for the Company’s
medium term future as its key
projects are all either actively selling
or under construction.
6 | AVJENNINGS LIMITED · ABN 44 004 327 771
CreAting AnD supporting Communities
Steve Waugh AO –
AVJennings Corporate Ambassador
Acknowledged as one of Australia’s Living Treasures, Steve Waugh is
not only a champion cricketer, he is also a great Australian statesman
internationally, an active philanthropist and a dedicated family man.
Steve has visited many AVJennings communities in his role as
Corporate Ambassador, meeting residents, touring projects and
involving himself in day-to-day on site activities.
As our Corporate Ambassador, Steve assists AVJennings and our
staff to be the best we can be, while ensuring we continue to build
connections with all generations of buyers.
Steve’s personal qualities
reflect our qualities:
dedication to a goal,
positive leadership and
integrity, community
entrepreneurship and
caring for others.
Peter Summers
CEO, AVJennings
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
7
The AVJennings team continues its good work to support and raise
much needed funds for the Steve Waugh Foundation. The Foundation is
somewhere to turn for children suffering from rare diseases. It strives to
improve their quality of life by providing medication, treatment, specialised
equipment and support for families affected by rare disease.
Additionally, through the partnership with the Foundation, AVJennings
has committed to designing, constructing and selling a home in one of its
communities where the profits from the sale are directed to the Foundation.
The first being ‘The Renee’, a house auctioned in the Charterwood estate
in Wadalba, New South Wales. The house has been named after Renee
Eliades, an official Steve Waugh Foundation Ambassador. Renee has a form
of rare disease and like many young Australians will benefit from the money
raised by the sale.
In completing ‘The Renee’ over 80 AVJennings suppliers contributed labour
and materials. AVJennings was thrilled by how many suppliers and friends
raised their hands to help out with this special project. It was just fantastic
and we are thrilled with the final result and sale of the house.
With the resounding success of ‘The Renee’, AVJennings is planning a
further project and has commenced construction of ‘The Renee II’, located
at AVJennings’ Lyndarum Estate in Victoria.
“ The partnership between the
Steve Waugh Foundation and
AVJennings brings together two
iconic Australian brands who
share one vision to significantly
change the lives of young
Australians who suffer from
rare diseases”.
Steve Waugh AO, Chairman and Founder,
Steve Waugh Foundation.
8 | AVJENNINGS LIMITED · ABN 44 004 327 771
property portfolio
AVJennings controls a well diversified portfolio of land on which it continues
a proud tradition of developing attractive, affordable but above all livable
residential communities in locations where people really want to live.
With 9,952 lots spread over four
mainland States and Auckland, New
Zealand the Company is well placed
into the medium term to continue
delivering a timely, flexible supply of
appropriately zoned and developed
land to meet the changing
level of demand experienced in
each of the locations in which it
operates. Alert to the need to
replenish land stock for the longer
term, management periodically
assesses opportunities to acquire
or assume control of suitable land
in a prudent and capital efficient
manner. However, the current focus
is on preparing existing controlled
land for development, dwelling
construction and sale, particularly
in the revived New South Wales
and Auckland markets and the
reviving Queensland market, where
consumers willingness to transact
is obviously improving. Demand
in Victoria and South Australia
remains steady and the maturity
of the Company’s key projects in
those States means that it is now
better positioned to offer consumers
attractive but affordable lifestyle
solutions. By drawing upon its
supply of land from projects that are
at an advanced stage of planning
and development, AVJennings can
nimbly respond to the requirements
of its customers with blocks of
land of varying sizes and high quality
and affordable, pre-planned free-
standing homes, townhouses and
low-rise apartments.
Developments Pipeline Analysis as at 30 June 2013
Number of Lots
by Location
Net Funds Employed
by Location
Lots Under
Development
QLD 19%
VIC
32%
NSW 19%
SA
27%
NZ
3%
QLD 22%
VIC
27%
NSW 31%
SA
15%
NZ
5%
667
572
554
715
318
30 June 2011
31 Dec 2011
30 June 2012
31 Dec 2012
30 June 2013
SA
No. of lots: 2,699
VIC
No. of lots: 3,176
QLD
No. of lots: 1,881
NSW
No. of lots: 1,914
NZ
No. of lots: 282
QueenslAnD
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
9
NOOSA HEADS
MACKAY
CALOUNDRA
MANGO HILL
BRISBANE
LEICHHARDT
RICHLANDS
CALAMVALE
BETHANIA
COOMERA
Project
Acquired
Project
Commenced
Original
No. of Lots
Remaining
No. of Lots
FY
2013
FY
2014
FY
2015
FY
2016
FY
2017
FY
2018
Post
Total Project
Value
Halpine Lake, Mango Hill Mar 2004
Jul 2004
Creekwood, Caloundra Nov 2007
Apr 2009
Glenrowan, Mackay Aug 2008
Jul 2010
Essington Rise, Leichhardt Dec 2009 Mar 2010
Nottingham Square, Calamvale
Sept 2007
Aug 2009
Villaggio, Richlands
Jul 2009
Jun 2010
Bethania
Jun 2010
NC
Elysium, Noosa Heads Nov 2010
Jan 2011
Big Sky, Coomera
Jun 2011
Oct 2011
689
682
278
158
258
142
113
174
334
125
612
191
119
141
112
113
153
315
# Projects are Development Agreements, so not all revenues flow to AVJennings. NC: Not commenced.
$150.1m
$165.8m
$53.8m
$18.6m#
$91.6m
$46.3m
$35.4m
$57.7m
$54.5m#
ViCtoriA
WOLLERT
EPPING NORTH
DOREEN
MELBOURNE
OFFICER
PORTARLINGTON
Project
Acquired
Project
Commenced
Original
No. of Lots
Remaining
No. of Lots
FY
2013
FY
2014
FY
2015
FY
2016
FY
2017
FY
2018
Post
Total Project
Value
Arena, Officer
Jul 2004
Mar 2008
Lyndarum North, Wollert
Jul 2007
Mar 2010
685
856
116
565
Wollert (Options)
Purchase not yet finalised
1,820
1,820
Lyndarum, Epping North Aug 2003
Nov 2007
Arlington Rise, Portarlington Mar 2011
Apr 2011
Hazelcroft, Doreen Aug 2011
Jul 2013
945
256
365
64
245
365
Does not include 1 remnant lot.
$128.1m
$156.4m
–
$204.5m
$48.3m
$68.6m
10 | AVJENNINGS LIMITED · ABN 44 004 327 771
neW south WAles
HAMLYN TERRACE
WADALBA
SANDY BEACH
CENTRAL COAST
THE PONDS
EASTWOOD
SYDNEY
COBBITTY
ELDERSLIE
SPRING FARM
GOULBURN
WOLLONGONG
Project
Acquired
Project
Commenced
Original
No. of Lots
Remaining
No. of Lots
FY
2013
FY
2014
FY
2015
FY
2016
FY
2017
FY
2018
Post
Total Project
Value
The Ridges, Elderslie Oct 1999
Aug 2005
Hamlyn Terrace
Jul 2001
Spring Farm Jan 2002
NC
NC
Ravensworth Heights, Goulburn
Apr 2007
Aug 2007
Seacrest, Sandy Beach
Sep 2007 May 2010
Cavanstone, Eastwood Oct 2007
Aug 2008
Charterwood, Wadalba May 2001
Aug 2002
Arcadian Hills, Cobbitty Oct 2010
Jun 2013
Lakes Edge, The Ponds Oct 2012
Apr 2013
578
440
206
279
141
274
152
457
87
309
440
206
145
122
129
10
457
87
$241.4m
$182.0m
$102.0m
$89.2m
$22.0m
$253.1m#
$50.9m
$166.5m
$52.8m#
# Project either a Joint Venture or Development Agreement, so not all revenues flow to AVJennings. Note: does not include 9 remnant lots.
NC: Not commenced.
south AustrAliA
PENFIELD
ST CLAIR
ADELAIDE
MURRAY BRIDGE
GOOLWA NORTH
Project
Acquired
Project
Commenced
Original
No. of Lots
Remaining
No. of Lots
FY
2013
FY
2014
FY
2015
FY
2016
FY
2017
FY
2018
Post
Total Project
Value
Pathways, Murray Bridge
Jul 2005
Mar 2006
River Breeze, Goolwa North
Jun 2007
Mar 2008
St Clair, St Clair Nov 2007
May 2009
238
130
937
Eyre, Penfield
Jan 2011
May 2012
1,763
62
81
797
1,748
$22.6m
$14.6m
$321.9m#
$392.0m#
# Project either a Joint Venture or Development Agreement, so not all revenues flow to AVJennings. Note: does not include 11 remnant lots.
neW ZeAlAnD
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
11
HOBSONVILLE POINT
AUCKLAND
Hobsonville Point, Hobsonville
Apr 2008
Aug 2009
605
282
$67.8m#
Project
Acquired
Project
Commenced
Original
No. of Lots
Remaining
No. of Lots
FY
2013
FY
2014
FY
2015
FY
2016
FY
2017
FY
2018
Post
Total Project
Value
# Project is a Development Agreement, so not all revenues flow to AVJennings.
12 | AVJENNINGS LIMITED · ABN 44 004 327 771
Directors’ report
For the year ended 30 June 2013
Your Directors present their Annual Financial Report
(“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 2013.
DIRECTORS
The names 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
Chairman (Non-Executive)
RJ Rowley
Deputy Chairman (Non-Executive)
PK Summers
E Sam
B Chin
Managing Director and
Chief Executive Officer
Director (Non-Executive)
Director (Non-Executive)
BG Hayman
Director (Non-Executive)
TP Lai
Director (Non-Executive)
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
Resigned 1 January 2013
SA Vogiatzakis
Resigned 1 January 2013
PRINCIPAL ACTIVITY
REVIEW OF OPERATIONS
Financial Results
The Company recorded an after tax loss of $15.3 million
for the financial year to 30 June 2013 (2012: $29.8 million
loss after tax). A full year profit after tax of $0.8 million was
recorded before the impact of provisions for loss on inventory
taken up as at 31 December 2012 (no inventory provisions
were recorded in the second half).
The profit after tax for the second half significantly improved
to $3.8 million (six months to 31 December 2012: $3.0 million
loss after tax and before inventory provisions), reflecting
ramped up activity compared with the first half.
Full year revenue of $158.5 million was down from $188.8
million in the previous year, however, second half revenue
of $105.6 million almost doubled that of the six months to
31 December 2012 due to the completion of inventory and
gradually improving market conditions, particularly in New
South Wales.
These results were achieved despite relatively subdued lender
appetite for residential property at both the producer and
consumer ends of some micro-markets.
Two further significant events occurred in the second half.
Firstly, the Company successfully concluded discussions
with its Club Lenders and the Club Facility maturity date
was extended to 30 September 2015. The Company
remains compliant with all lending covenants and is actively
progressing its strategy of diversifying funding sources.
Secondly, the Company successfully completed an
Entitlement Offer that raised $40.0 million after transaction
costs. This more than offset the effect of increased production
and settlement payments in respect of previous acquisitions.
The principal activity of the Consolidated Entity during the
year was Residential Development.
Net Debt at balance date on a proportionate consolidation
basis was $83.3 million (2012: $129.0 million).
OPERATING RESULTS
Business Overview and Outlook
The consolidated loss after tax for the financial year was
$15.3 million (2012: $29.8 million loss after tax).
DIVIDENDS
Dividends paid to members during the financial year were as
follows:
2011 final dividend of 1.5 cents per
fully paid share, paid 19 October 2011.
Fully franked @ 30% tax.
2012 interim dividend of 0.5 cents per
fully paid share, paid 11 April 2012.
Fully franked @ 30% tax.
Total dividends paid
2013
$’000
2012
$’000
-
-
-
4,119
1,373
5,492
The working capital cycle in residential property development
is typically longer than that of most other industries and,
where it extends beyond balance dates, can mean that
reported results sometimes do not clearly reflect market
conditions over the whole of the period under review. Time
and money expended on rebuilding work in progress levels
in one period may therefore be disproportionately reflected
in increased sales, settlements and revenue in succeeding
periods.
Although demand was relatively subdued over much of
the financial year, activity in the second half significantly
outstripped that in the preceding six months during which the
Company expanded investment in production (especially built
form). This investment is in line with the strategy disclosed
to the market and directly responds to the ongoing benign
interest rate environment, low inflationary expectations and
the chronic under-supply of housing in some areas, as well as
the Company’s perception of improvements in other demand
drivers such as affordability, consumer confidence, subsidies
for first home buyers that are now more explicitly focused on
new production, together with tightening rental vacancy rates
in certain areas of Sydney.
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
13
Directors’ report
For the year ended 30 June 2013
Total lots under control stood at 9,952 at balance date.
Although the Company has not purchased land since late
2010 -11 and remains adequately positioned into the medium
term, it is actively exploring capital-efficient mechanisms to
secure future development opportunities in specific micro-
markets.
Market fundamentals remain positive, with improvements
in affordability, low interest rates and inflation, underlying
housing shortages in some markets (especially Sydney and
Auckland), positive population growth and a relatively stable
macroeconomic outlook over 2014-2015 supporting the
nascent rise in consumer confidence and transaction levels
experienced in some markets.
SIGNIFICANT CHANGES IN THE STATE
OF AFFAIRS
The Consolidated Entity has extended its Club
Borrowing Facility expiry date from 30 September 2013
to 30 September 2015.
Pursuant to an Entitlement Offer for 2 new shares for every
5 held, the Company raised $39,956,388 after transaction
costs and issued 109,835,157 new fully paid ordinary shares
on 3 June 2013, increasing the total number of fully paid
ordinary shares on issue to 384,423,851.
SIGNIFICANT EVENTS AFTER THE BALANCE
SHEET DATE
No matter or circumstance has arisen since 30 June 2013 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
The prospects and business strategies of the Consolidated
Entity are discussed on pages 12 and 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.
REVIEW OF OPERATIONS (continued)
Consumer confidence in the key New South Wales market
seems to have lifted over the last six months in particular,
reversing a decade-long trend, while that in southern
Queensland has shown more recent signs of improvement
as pricing has realigned with historical relativities to the
other eastern capitals. Performance of the Company’s
Victorian estates remains stable and fair, reflecting the
Company’s belief that the local market is steadily correcting
for the oversupply of developed stock built up in some
locations during the overheated market of 2010-11. The
South Australian market is stable but subdued, however, the
Company’s key projects in that State (‘St Clair’ and ‘Eyre’ at
Penfield) have reached important milestones and are now
much better placed than in the previous period to capture
their share of available demand in the future. The Auckland
residential market is experiencing significant demand that
should continue to leave the Company’s Hobsonville Point
joint venture project with Government fortunately placed for
the foreseeable future.
Pleasingly, the Company benefitted from the solid rise in
second half contract signings and settlements without undue
margin sacrifice or the need to offer significant inducements
of the sort anecdotally reported.
The following table illustrates the up-tick in lots under
development (both land only and built form) since the low
point of early in fiscal 2012:
• 667 at 30 June 2011;
• 572 at 31 December 2011;
• 318 at 30 June 2012;
• 554 at 31 December 2012; and
• 715 at 30 June 2013
A substantial amount of the work in progress reported as at
31 December 2012 was completed during the second half,
with 177 lots at ‘Hobsonville Point’ NZ, 60 lots at ‘Arena’ VIC
and 33 lots at ‘Arlington Rise’ VIC (amongst others) being
finalised.
While the production cycle is lengthy, headway is being made
with older lots exiting work in progress being progressively
replaced as newer projects reach maturity or come on
stream (notably the first stage of ‘Arcadian Hills’, Cobbitty
NSW following the resolution of a lengthy planning-related
preliminary works delay), leaving management confident
that the Company is firmly on the path towards lifting work
in progress and revenue to levels it has not seen for several
years.
Completed and unsold stock is at acceptable levels.
Although customer preference continues to favour built
form in most markets, the Company has recently noticed a
resurgence of interest in land only on some of its estates,
which if sustained will help smooth the inherently higher
demand that increased production can place upon working
capital.
An appropriate focus on overhead and cost control is now
ingrained in the Company’s culture and that control is
expected to be enhanced in the future as the new accounting
system is bedded down.
14 | AVJENNINGS LIMITED · ABN 44 004 327 771
Directors’ report
For the year ended 30 June 2013
INFORMATION ON THE DIRECTORS
Peter K Summers B.Ec. CA
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 Pte Ltd. 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 Ltd, 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 till
2010. He served on the Board of the Institute of Real Estate
Studies, National University of Singapore from 2008 to 2011
and was a board member of the Republic Polytechnic Board
of Governors from 2008 to 2011. 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:
None.
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 optimisation. 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:
None.
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. (Economics)
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 International Monetary Exchange
from 1987-1990 and 1993-1996. Mrs Sam is a Director of
SC Global Developments Pte Ltd, the Company’s major
shareholder. 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 18 August 2000.
Banyan Tree Holdings Limited, since 23 March 2004.
The Straits Trading Company Limited, since 30 April 2008.
Bobby Chin CA (ICAEW) B.Acc.
Director since 18 October 2005. Mr Chin is the Deputy
Chairman of NTUC Enterprise Co-operative Limited and a
Director of Singapore Labour Foundation and NTUC Fairprice
Co-operative Limited. 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
Singapore Chartered Accountants, 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.
Sembcorp Industries Limited, since 1 December 2008.
Singapore Telecommunications Limited, since 1 May 2012.
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
15
Directors’ report
For the year ended 30 June 2013
INFORMATION ON THE DIRECTORS (continued)
INFORMATION ON COMPANY SECRETARY
Bruce G Hayman
Carl D Thompson LLB B. Comm.
Director since 18 October 2005. Mr Hayman has over 44
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 and as Chairman of the Board of the Rugby Club Ltd.
For his contribution to tourism in Australia, he has been
recognised by Tourism Training Australia with a Platinum
award. He is Chairman of the Ella Foundation and is the
Deputy Chairman and a Director of the Australian Diabetes
Council – NSW. Resident of Sydney.
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.
Teck Poh Lai B.A. Hons. (Economics)
Director since 18 November 2011. Mr Lai has been a career
banker since the late 1960s. He joined Citibank Singapore
in April 1968, rising through the ranks to become Vice
President and Head of the Corporate Banking Division.
During his time with Citibank, Mr Lai undertook international
assignments with Citibank in Jakarta, New York and London.
His last position with Citigroup was as Managing Director
of Citicorp Investment Banking Singapore Ltd (Corporate
Finance and Capital Market Activities) from 1986 to 1987. Mr
Lai joined Oversea-Chinese Banking Corporation (OCBC) in
January 1988 as Executive Vice President and Division Head
of Corporate Banking. He moved on to various other senior
management positions in OCBC, such as Head of Information
Technology and Central Operations and Risk Management.
He was head of Group Audit prior to retiring in April 2010.
Resident of Singapore.
Responsibilities:
Non-Executive Director, Member of Audit Committee,
Member of Remuneration Committee.
Directorships held in other listed entities:
WBL Corporation Limited since 2 August 1993.
PT Bank OCBC NISP Tbk (Commissioner) since
4 September 2008.
Oversea-Chinese Banking Corporation since 1 June 2010.
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.
REMUNERATION REPORT (Audited)
This Remuneration Report outlines the remuneration
arrangements of the Company and the Group 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 the Group, directly or indirectly, including
any Director (whether executive or otherwise) of the Parent
Entity and some of the Executive Committee members.
The Remuneration Report is presented under the following
sections:
1.
Individual Key Management
Personnel disclosures
Details of KMP are set out below:
(i)
Directors
S Cheong
RJ Rowley
PK Summers
E Sam
B Chin
Chairman (Non-Executive)
Deputy Chairman (Non-
Executive)
Managing Director and
Chief Executive Officer
Director (Non-Executive)
Director (Non-Executive)
BG Hayman
Director (Non-Executive)
TP Lai
Director (Non-Executive)
(ii)
Executives
KMP Executive Committee Members
M Henesey-Smith
A Soutar
L Mahaffy
Executive General
Manager (QLD, SA & NZ)
Executive General Manager
(NSW & VIC) – Appointed
12 July 2012
Chief Financial Officer –
Appointed 1 November 2012
SC Orlandi
Chief Strategy Officer
CD Thompson
L Hunt
Company Secretary/
General Counsel
General Manager,
Human Resources
16 | AVJENNINGS LIMITED · ABN 44 004 327 771
Directors’ report
For the year ended 30 June 2013
REMUNERATION REPORT (Audited) (continued)
2.3 Non-Executive Director Remuneration Arrangements
2.
Principles Used to Determine the Nature
and Amount of Remuneration
2.1 The Remuneration Committee
The Remuneration Committee comprises four Non-Executive
Directors.
The Remuneration Committee has delegated decision making
authority for some matters related to the remuneration
arrangements for Executive Directors and Executives, and is
required to make recommendations to the Board on other
matters such as equity-based performance plans.
The Committee approves the remuneration arrangements
of the Chief Executive Officer and other Executives which
includes awards made under the long-term incentive (LTI)
plan. The Board sets the fees for Non-Executive Directors.
The objective is to ensure that remuneration policies and
structures are fair and competitive and aligned with the long-
term interests of the Group.
The Chief Executive Officer attends Remuneration Committee
Meetings by invitation, where management input is required.
The Chief Executive Officer is not present during any
discussions related to his own remuneration arrangements.
2.2 Use of Remuneration Consultants
In January 2013, the Remuneration Committee engaged
Godfrey Remuneration Group (GRG) to review and report
on market benchmarking of remuneration for Non-
Executive Directors, Executive Directors and Executives.
Under the terms of the engagement, GRG provided
remuneration recommendations as defined in Section 9B
of the Corporations Act 2001 and was paid $29,000 for
these services.
GRG has confirmed that the recommendations have
been made free from undue influence by members of
AVJennings KMP.
The following arrangements were made to ensure that the
remuneration recommendations were free from undue
influence:
• GRG was engaged by, and reported directly to, a member
of the Remuneration Committee. The agreement for the
provision of the remuneration consulting services was
executed by the Chair of the Remuneration Committee
under delegated authority on behalf of the Board.
• The report containing the remuneration recommendations
was provided by GRG directly to a member of the
Remuneration Committee.
• GRG was permitted to speak to management throughout
the engagement to understand company processes,
practises, and other business issues and obtain
management perspectives. However, GRG was not
permitted to provide any member of management with
a copy of their draft or final report that contained the
remuneration recommendations.
As a consequence, the Board is satisfied that the
recommendations were made free from undue influence from
any member of the Management team.
The Board seeks to set aggregate remuneration at a level
that provides the Group with the ability to attract and retain
Directors of the highest calibre, whilst incurring a cost that is
acceptable to Shareholders.
Fees and payments to Non-Executive Directors reflect the
demands which are made on, and the responsibilities of, the
Directors.
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
Pte Ltd.
Non-Executive Directors do not participate in any incentive
programs.
The remuneration of Non-Executive Directors for the years
ended 30 June 2013 and 30 June 2012 is detailed on page 19
of this Report.
2.4 Executive Remuneration Arrangements
AVJennings executive remuneration strategy is designed to
attract, motivate and retain high performing individuals and
align the interests of Executives and Shareholders.
The executive remuneration framework consists of fixed
remuneration and short and long-term incentives as outlined
below.
AVJennings aims to reward Executives with a level and mix
of remuneration commensurate with their position and
responsibilities, and aligned with market practice.
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 to
ensure that the Executive’s pay is competitive with the market.
An Executive’s pay is also reviewed on promotion.
The fixed component of executive remuneration is detailed in
the tables on page 20.
ii) 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.
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
17
Directors’ report
For the year ended 30 June 2013
REMUNERATION REPORT (Audited) (continued)
FY2012 Grant
2.4. Executive Remuneration Arrangements (continued)
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, leadership,
compliance and governance issues). 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. These measures also take
into account current market conditions and the associated
opportunities and risks.
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.
iii) Long Term Incentive (LTI)
LTI awards are made to executives in order to align
remuneration with the creation of shareholder value over the
long-term. As such, LTI awards are only made to executives
who are in a position to have an impact on the Group’s
performance against the relevant long-term performance
measures.
Share-based compensation:
The AVJ Deferred Employee Share Plan (the LTI Plan)
administers employee share schemes under which shares may
be purchased on-market by the LTI Plan Trustee on behalf
of employees. These shares vest to employees for no cash
consideration subject to certain conditions being satisfied.
Employees may elect not to participate in the scheme. Shares
held by the LTI 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 of the shares at the grant date is
expensed on a straight-line basis over the vesting period with
a corresponding increase in share-based payment reserve in
equity.
Vesting subject to both service and performance conditions:
FY2011 Grant
A total of 1,375,452 shares were granted on 28 September
2010 to certain executives. As detailed in the table on page
18, these include 1,136,816 shares for KMP. The remaining
shares were granted to executives who were not KMP. A total
of 96,124 shares from this grant have been forfeited.
An additional 1,695,735 shares were granted on 5 September
2011 to certain executives. As detailed in the table on page
18, these include 1,454,555 shares for KMP. The remaining
shares were granted to executives who were not KMP. A total
of 124,383 shares from this grant have been forfeited.
FY2013 Grant
An additional 513,168 shares were granted on 12 September
2012 to certain executives. As detailed in the table on page
18, these include 280,712 shares for KMP. The remaining
shares were granted to executives who were not KMP.
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 (for the
FY2011 grant), 30 September 2014 (for the FY2012 grant)
and 30 September 2015 (for the FY2013 grant). In the event
of death or permanent disablement, the shares may vest
to the estate at the Board’s discretion. In the event that the
employee is retrenched, the shares may vest subject to Board
discretion. If the employee resigns (in certain circumstances)
or is terminated, the unvested shares will be forfeited.
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 for each grant
is as follows:
FY2011 grant – 10% p.a. growth for the three financial
years to 30 September 2013
FY2012 grant – 10% p.a. growth for the three financial
years to 30 September 2014
FY2013 grant – 10% p.a. growth for the three financial
years to 30 September 2015
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
> median but < 75th percentile
Nil
50%
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 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.
18 | AVJENNINGS LIMITED · ABN 44 004 327 771
Directors’ report
For the year ended 30 June 2013
REMUNERATION REPORT (Audited) (continued)
2.4. Executive Remuneration Arrangements (continued)
Name
KMP Executive Committee
Members
PK Summers
PK Summers
M Henesey-Smith
M Henesey-Smith
A Soutar
SC Orlandi
SC Orlandi
CD Thompson
CD Thompson
L Hunt
L Hunt
Total
Shares Granted
Number of Shares Vested
Year
Granted
Number
Fair Value
Unvested
at 1 July
2012
Vested
during the
year
Unvested
at 30 June
2013
2011
2012
2011
2012
2013
2011
2012
2011
2012
2011
2012
691,591
$312,945
884,891
$311,924
158,344
202,601
280,712
102,458
131,094
106,183
135,861
78,240
100,108
$71,651
$71,417
$74,389
$46,362
$46,211
$48,048
$47,891
$35,404
$35,288
691,591
884,891
158,344
202,601
–
102,458
131,094
106,183
135,861
78,240
100,108
2,872,083
$1,101,530
2,591,371
–
–
–
–
–
–
–
–
–
–
–
–
691,591
884,891
158,344
202,601
280,712
102,458
131,094
106,183
135,861
78,240
100,108
2,872,083
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 2009
30 June 2010
30 June 2011
30 June 2012
30 June 2013
Financial
Period
12 months
12 months
12 months
12 months
12 months
Profit / (Loss)
After Tax
$’000
(12,724)
9,616
12,893
(29,828)
(15,266)
Basic
EPS
Cents
(4.68)
3.51
4.72
(10.99)
(5.46)
TSR
Cents
(0.34)
0.21
0.05
(0.17)
0.14
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 19.
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.
5.
Remuneration of Key Management Personnel
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 19 and 20. The Directors are the same as
those identified in the Directors’ Report.
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.
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
19
Directors’ report
For the year ended 30 June 2013
REMUNERATION REPORT (Audited) (continued)
Directors
Short-Term
Post
Employment
Salary /
Fees
$
Cash
Bonus
$
Other
$
Superannuation(3)
$
Long-
Term
Long
Service
Leave
$
Share-
based
Total
Performance
Related
Shares
$
$
%
30 June 2013
S Cheong(1)
RJ Rowley
-
77,982
-
-
-
-
-
7,018
-
-
-
-
-
85,000
-
-
PK Summers(2)
408,415
95,597
61,617
25,000
13,716
205,480
809,825
37.18
E Sam(1)
B Chin
BG Hayman
TP Lai(4)
-
60,000
45,872
50,000
-
-
-
-
-
-
-
-
-
-
4,128
-
-
-
-
-
-
-
-
-
-
60,000
50,000
50,000
642,269
95,597
61,617
36,146
13,716
205,480 1,054,825
30 June 2012
S Cheong(1)
RJ Rowley
-
77,982
-
-
-
-
-
6,982
-
-
-
-
-
84,964
-
-
-
-
-
-
PK Summers(2)
384,803
95,597
61,053
50,000
22,585
201,496
815,534
34.85
E Sam(1)
B Chin
BG Hayman
TP Lai(4)
-
60,000
45,872
32,820
-
-
-
-
-
-
-
-
-
-
4,128
-
-
-
-
-
-
-
-
-
-
60,000
50,000
32,820
-
-
-
-
601,477
95,597
61,053
61,110
22,585
201,496
1,043,318
(1)
(2)
(3)
These Directors were not paid fees. A consulting fee of $50,000 per
month was paid to the ultimate parent entity SC Global Developments
Pte Ltd which covers the services of these Directors. International
airfares to attend meetings are paid for by a related entity.
‘Other’ relates to the value of motor vehicle benefits.
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.
(4) Appointed 18 November 2011.
(a)
(b)
Directors are also reimbursed for airfares (other than the international
airfares for those Directors referred to in (1)), and other expenses
relating to the provision of their services.
With the exception of share-based compensation for the Chief
Executive referred to in 2.4(iii), there were no other share-based
payments made to Directors in the year under review.
20 | AVJENNINGS LIMITED · ABN 44 004 327 771
Directors’ report
For the year ended 30 June 2013
Executives
Short-Term
Post
Employment
Salary /
Fees
$
Cash
Bonus
$
Other (1)
$
Superannuation(2)
$
Long-
Term
Long
Service
Leave
$
Share-
based
Total
Performance
Related
Shares
$
$
%
30 June 2013
M Henesey-Smith
297,086
35,020
15,000
A Soutar(3)
L Mahaffy(4)
SC Orlandi
329,864
43,775
207,028
9,600
282,702
14,118
CD Thompson
295,625
16,145
L Hunt
193,704
10,815
-
-
-
-
-
24,747
25,000
12,353
16,470
16,470
24,117
4,232
47,046
423,131
1,798
20,105
420,542
935
-
229,916
19,070
30,441
362,801
13,686
31,548
373,474
6,174
23,246
258,056
1,606,009
129,473
15,000
119,157
45,895
152,386
2,067,920
30 June 2012
M Henesey-Smith
306,319
43,775
15,000
SC Orlandi
284,114
14,163
CD Thompson
239,465
14,678
L Hunt
194,166
10,815
-
-
-
50,000
15,775
44,575
24,775
15,597
43,186
473,877
12,286
27,943
354,281
4,616
2,838
28,960
332,294
21,339
253,933
1,024,064
83,431
15,000
135,125
35,337
121,428
1,414,385
19.39
15.19
4.18
12.28
12.77
13.20
18.35
11.88
13.13
12.66
(1)
(2)
Represents the value of motor vehicle benefits.
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.
(3) Appointed 12 July 2012.
(4) Appointed 1 November 2012.
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
Audit
Remuneration
Nominations
Risk Management
Meetings of Committees
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Attended
S Cheong
RJ Rowley
PK Summers
E Sam
B Chin
BG Hayman
TP Lai
7
7
7
7
7
7
7
Investments Committee
7
7
7
5
6
7
7
-
4
-
4
4
-
4
-
4
-
2
4
-
4
3
-
-
3
-
3
3
3
-
-
2
-
3
3
1
1
-
1
-
1
-
1
1
-
1
-
1
-
-
5
-
-
-
5
-
-
5
-
-
-
5
-
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.
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
21
Directors’ report
For the year ended 30 June 2013
DIRECTORS’ INTERESTS
INDEMNIFYING OFFICERS
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
192,318,030
209,349
2,416,266
252,000
* Does not include unvested shares under the AVJ Deferred Employee
Share Plan. Refer to page 43.
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:
AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF AVJENNINGS LIMITED
In relation to our audit of the financial report of AVJennings Limited for the financial year ended 30 June 2013, 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
27 September 2013
Mark Conroy
Partner
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
NON-AUDIT SERVICES
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
27 September 2013
Peter Summers
Director
22 | AVJENNINGS LIMITED · ABN 44 004 327 771
consoliDateD statement of comprehensive income
For the year ended 30 June 2013
Revenues
Share of profits of associates and joint venture entities
accounted for using the equity method
Cost of property developments sold
Provision for loss on inventories
Provision for loss on equity accounted investments
Other operational expenses
Selling and marketing expenses
Employee benefits expenses
Depreciation expense
Finance costs
Fair value gain/(loss) on interest rate derivatives
Management and administration expenses
Loss before income tax
Income tax credit
Loss after income tax
Other comprehensive income
Foreign currency translation (recyclable through profit and loss)
Other comprehensive income for the year
Note
2013
$’000
2012
$’000
5
5
5
5
5
5
9
158,462
188,809
1,294
(125,061)
(22,964)
-
(4,729)
(6,209)
(16,712)
(381)
(492)
187
5,759
(151,244)
(48,621)
(1,311)
(5,595)
(5,656)
(19,088)
(353)
(475)
(119)
(6,686)
(8,060)
(23,291)
(45,954)
8,025
16,126
(15,266)
(29,828)
1,380
1,380
160
160
Total comprehensive loss for the year
(13,886)
(29,668)
Earnings per share for loss from continuing operations attributable
to ordinary equity holders of the parent:
Basic earnings per share
Diluted earnings per share
Cents
Cents
11
11
(5.46)
(5.49)
(10.99)
(11.03)
consoliDateD statement of financial position
As at 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
23
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Tax receivable
Other current assets
Total current assets
NON-CURRENT ASSETS
Trade and other receivables
Inventories
Investments accounted for using the equity method
Property, plant and equipment
Deferred tax assets
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
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
12
13
14
15
13
14
16
20
21
22
23
24
25
27
23
24
26
27
Note
2013
$’000
11,649
23,033
109,068
-
1,211
2012
$’000
4,560
33,690
73,872
514
2,112
144,961
114,748
4,120
281,745
25,181
993
3,087
2,816
1,832
353,152
24,407
1,174
-
2,816
317,942
383,381
462,903
498,129
65,365
-
7,171
449
4,036
46,946
187
1,100
-
3,667
77,021
51,900
6,956
82,720
-
845
47,520
123,137
5,938
641
90,521
177,236
167,542
229,136
295,361
268,993
Equity attributable to equity holders of the parent
Contributed equity
Reserves
Retained earnings
Total equity
28
29(a)
29(c)
160,960
121,096
2,200
430
132,201
147,467
295,361
268,993
24 | AVJENNINGS LIMITED · ABN 44 004 327 771
consoliDateD statement of changes in equity
For the year ended 30 June 2013
Attributable to equity holders of the Parent
Total equity
Foreign
Currency
Translation
Reserve
Share-
based
Payment
Reserve
Contributed
Equity
Retained
Earnings
Note
$’000
$’000
$’000
$’000
$’000
121,835
(417)
323
182,787
304,528
At 1 July 2011
Loss for the year
Other comprehensive income for the
year
Total comprehensive loss for the year
Transactions with owners in their
capacity as owners
- Treasury shares acquired
28(b)
(739)
- Share-based payment reserve
- Dividends paid
10
-
-
-
-
-
-
160
160
-
-
-
(739)
160
-
-
-
-
364
-
364
(29,828)
(29,828)
-
160
(29,828)
(29,668)
-
-
(739)
364
(5,492)
(5,492)
(35,320)
(35,535)
At 30 June 2012
121,096
(257)
687
147,467
268,993
Loss for the year
Other comprehensive income for the
year
Total comprehensive loss for the year
Transactions with owners in their
capacity as owners
- Ordinary share capital raised
- Treasury shares acquired
- Share-based payment reserve
-
-
-
-
-
(15,266)
(15,266)
1,380
1,380
-
-
-
1,380
(15,266)
(13,886)
28(a)
28(b)
39,956
(92)
-
-
-
-
-
-
390
-
-
-
39,956
(92)
390
39,864
1,380
390
(15,266)
26,368
At 30 June 2013
160,960
1,123
1,077
132,201
295,361
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
25
consoliDateD statement of cash flows
For the year ended 30 June 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers, land vendors and employees
Interest paid
Income tax paid
Note
2013
$’000
2012
$’000
182,136
(171,824)
(9,822)
(40)
188,798
(230,949)
(10,809)
(3,498)
Net cash from/(used in) operating activities
30
450
(56,458)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
20
Interest received
Distribution received
Investments in associates and joint venture entities
Net cash from/(used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings
Repayment of borrowings
Payment of finance lease liability
Payment for treasury shares
Equity dividends paid
Proceeds from issue of shares
33
(228)
492
520
-
817
53
(641)
481
1,380
(1,361)
(88)
77,932
(112,278)
-
(92)
-
103,601
(48,482)
(30)
(739)
(5,492)
28(b)
28(a)
39,956
-
Net cash from financing activities
5,518
48,858
NET INCREASE/(DECREASE) IN CASH HELD
Cash and cash equivalents at beginning of year
Effects of exchange rate changes on cash and cash equivalents
6,785
4,560
304
(7,688)
12,260
(12)
CASH AND CASH EQUIVALENTS AT END OF YEAR
12
11,649
4,560
26 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
1. CORPORATE INFORMATION
The Consolidated Financial Statements of AVJennings
Limited for the year ended 30 June 2013 were authorised
for issue in accordance with a resolution of the Directors
on 27 September 2013.
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 Limit Order
Book System (CLOB). The ultimate parent is SC Global
Developments Pte Ltd, 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 with variations reflected in the profit and loss
account.
The preparation of consolidated 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 Consolidated
Financial Statements, are disclosed in note 4. AVJennings is a
for-profit entity for the purpose of preparing the Consolidated
Financial Statements.
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.
b) New accounting standards and interpretations
The accounting policies adopted are consistent with those
of the previous financial year.
None of the new Standards and amendments to Standards
that are mandatory for the first time for the financial year
beginning 1 July 2012 affected any of the amounts recognised
in the current period or any prior period and are not likely to
affect future periods. However, amendments made to AASB
101 Presentation of Financial Statements effective 1 July 2012
now require the Consolidated Statement of Comprehensive
Income to show the items of comprehensive income grouped
into those that are not permitted to be reclassified to profit
and loss in a future period and those that may have to be
reclassified if certain conditions are met.
c) Basis of consolidation
The Consolidated Financial Statements incorporate the assets
and liabilities of all subsidiaries of AVJennings Limited as at
30 June 2013 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 de-consolidated
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.
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 in the results and equity of
subsidiaries are shown separately in the Consolidated
Statement of Comprehensive Income, Consolidated
Statement of Changes in Equity and the Consolidated
Statement of Financial Position respectively.
The AVJ Deferred Employee Share Plan Trust was formed to
administer the Group’s employee share scheme. This Trust is
consolidated, as the 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. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a
business combination are measured at their fair values at the
acquisition date. 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 and the amount
of any non-controlling interest in the acquiree over the fair
value 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.
notes to the consoliDateD financial statements
For the year ended 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
27
2.
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
d) Business combinations (continued)
Where settlement of any part of 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 or loss.
e) Joint ventures
Joint venture operations:
The proportionate interests in the assets, liabilities and
expenses of joint venture activities have been incorporated
in the financial statements under the appropriate headings.
Details of the joint ventures are set out in note 19.
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
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 16(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 joint venture 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.
At each reporting date, the Group determines whether
there is any objective evidence that the investment in the
joint venture entity is impaired. Where evidence exists, the
impairment is calculated as the difference between the
recoverable amount of the joint venture entity and its carrying
value, and recognised in the profit and loss.
f)
Investments in associates
An associate is an entity over which the Consolidated Entity
has significant influence but not control or joint control.
Investments in associates are accounted for using the equity
method.
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 net assets of the associates.
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 16(a).
At each reporting date, the Group determines whether there
is any objective evidence that the investment in the associate
is impaired. Where evidence exists, the impairment is
calculated as the difference between the recoverable amount
of the associate and its carrying value, and recognised in the
profit and loss.
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.
Unrealised gains on transactions with associates are
eliminated to the extent of the Consolidated Entity’s interest
in the associates.
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.
g) Segment reporting
Operating segments are reported in a manner consistent with
the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible
for allocating resources and assessing performance of the
operating segments, has been identified as the Executive
Committee.
Information regarding business activities that are below the
quantitative criteria are combined, and disclosed in a separate
category called “other”.
h) Property, plant and equipment
Property, plant and equipment are stated at historical cost
less accumulated depreciation and accumulated impairment
losses, if any.
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 under finance lease
• 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 to its recoverable
amount if the carrying amount is greater than the 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.
28 | AVJENNINGS LIMITED · ABN 44 004 327 771
Directors’ report
For the year ended 30 June 2013
2.
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
i) Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, 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.
Interest income on borrowings pending their expenditure on
qualifying assets is deducted from borrowing costs eligible for
capitalisation.
All other borrowing costs are expensed.
j)
Intangible assets
Intangible assets acquired separately are measured at cost
on initial recognition. The cost of intangible assets acquired
in a business combination are their fair value as at the date
of the acquisition. Following initial recognition, intangible
assets are carried at cost less any accumulated amortisation
and 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 as either
finite or indefinite.
Intangible assets with finite lives are amortised over the
useful economic life and assessed for impairment whenever
there is an indication that the asset may be impaired. The
amortisation period and the amortisation method for an
intangible asset with a finite useful life is reviewed at least at
the end of each reporting period. Changes in the expected
useful life or the expected pattern of consumption of future
economic benefits embodied in the asset are accounted
for by changing the amortisation period or method, as
appropriate, and are treated as changes in accounting
estimates. The amortisation expense on intangible assets
with finite lives is recognised in the income statement in
the expense category consistent with the function of the
intangible assets.
Intangible assets with indefinite useful lives are not amortised,
but are tested for impairment annually. The assessment of
indefinite life is reviewed annually to determine whether
the indefinite life continues to be supportable. If not, the
change in the useful life from indefinite to finite is made on a
prospective basis.
k)
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 the 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. Refer to note 4(ii).
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.
l)
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.
m) Trade and other receivables
Trade receivables are carried at the amount invoiced less a
provision for impairment.
Settlement terms for trade receivables are generally between
30 and 180 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.
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.
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
29
Directors’ report
For the year ended 30 June 2013
the period in which the employees render the related service
is recognised in the provision for employee benefits and
measured as the present value of expected future payments
to be made in respect of services provided by employees up
to the reporting period 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.
r) Share-based payment transactions
Share-based compensation benefits are provided to
Executives via the AVJ Deferred Employee Share Plan.
Information relating to the plan is set out in note 35.
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 of the shares at
the grant date is expensed on a straight-line basis over the
vesting period with a corresponding increase in share-based
payment reserve in equity.
s) 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 commencement of
the lease at the fair value of the leased property or, if lower,
at the present value of the minimum lease payments. Lease
payments are apportioned between 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 finance costs in the Consolidated
Statement of Comprehensive Income.
The property, plant and equipment acquired under finance
leases is depreciated over the asset’s useful life or over the
shorter of the asset’s useful life and the lease term if there
is no reasonable certainty that the Consolidated Entity will
obtain ownership at the end of the lease term.
Leases in which a significant portion of the risks and rewards
of ownership are not transferred to the Consolidated Entity
as lessee are classified as operating leases. Payments made
under operating leases (net of any incentives received from
the lessor) are charged to profit or loss on a straight-line basis
over the period of the lease.
Consolidated Entity as lessor:
Leases in which the Consolidated Entity does not transfer
substantially all the risks and benefits of ownership of an 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 over the lease
term on the same basis as rental income.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
n) 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.
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.
o)
Interest-bearing loans and borrowings
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.
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.
p) Provisions
Provisions are recognised when the Consolidated Entity has
a present legal or constructive obligation as a result of past
events, it is probable that an outflow of resources will be
required to settle the obligation and the amount has been
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.
Where there are a number of similar obligations, the
likelihood that an outflow will be required in settlement
is determined by considering the class of obligations as a
whole. A provision is recognised even if the likelihood of an
outflow with respect to any one item included in the same
class of obligations may be small.
q) Employee benefits
Short-term employee benefit obligations:
Liabilities for wages and salaries, including non-monetary
benefits and annual leave expected to be settled within 12
months after the end of the reporting period in which the
employees render the related service are recognised in
respect of employees’ services up to the end of the reporting
period. They are measured at the amounts expected to be
paid when the liabilities are settled. The liability for annual
leave is recognised in the provision for employee benefits. All
other short-term employee benefit obligations are presented
as payables.
Other long-term employee benefit obligations:
The liability for long service leave and annual leave which is
not expected to be settled within 12 months after the end of
30 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
2.
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
t) 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 significant risks, rewards of ownership
and effective control have been transferred to the buyer. This
has been determined to occur on settlement.
Revenue from land sales is recognised prior to settlement
when a signed unconditional contract for sale exists,
the significant risks, rewards of ownership and effective
control have been transferred to the buyer, and there is no
management involvement to the degree usually associated
with ownership.
The carrying amount of deferred 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 profits will allow the
deferred tax asset to be recovered.
Deferred 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.
Deferred tax assets and deferred tax liabilities are offset if a
legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred taxes relate to
the same taxable entity and the same taxation authority.
Construction contracts:
Tax consolidation:
Contract building relates to Home Building Agreements
or similar, 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.
u)
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 tax assets are recognised for all deductible
temporary differences, the carry forward of unused tax credits
and any unused tax losses. Deferred tax assets are recognised
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.
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.
v) 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.
notes to the consoliDateD financial statements
For the year ended 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
31
2.
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
aa) 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 or any borrowings forming part of the net
investment are repaid, the associated exchange differences
are reclassified to profit or loss, as part of the gain or loss on
sale.
ab) Comparative figures
To enable meaningful comparison, some comparatives
have been reclassified to conform with the current year’s
presentation.
v) Other taxes (continued)
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.
Commitments and contingencies are disclosed net of the
amount of GST recoverable from, or payable to, the taxation
authority.
w) 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.
x) 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.
y) 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.
z) Contributed equity
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are shown in
equity as a deduction, net of tax, from the proceeds.
Treasury shares:
Shares acquired on-market for use in employee share-based
payment plans are referred to as treasury shares. The cost
of these shares is deducted from equity. No gain or loss is
recognised in profit or loss for the purchase, sale, issue or
cancellation of the Company’s shares.
32 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
3. FINANCIAL RISK MANAGEMENT
(i)
Interest rate risk
The Consolidated Entity’s principal financial instruments
comprise receivables, payables, finance leases, derivatives,
cash and bank loans.
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.
The Consolidated Entity’s exposure to market interest rates
relates to the obligations arising from interest-bearing loans.
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 below 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.
The 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.
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:
Cash
Bank loans
Net financial liabilities
Interest rate caps
Interest rate swaps
Borrowings not hedged
2013
2012
Weighted
average
interest rate
%
2.31
4.23
Balance
$‘000
(11,649)
89,891
78,242
-
-
78,242
Weighted
average
interest rate
%
2.03
5.29
Balance
$‘000
(4,560)
124,237
119,677
(15,000)
(15,000)
89,677
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 2013, none of the available borrowings are at fixed or capped rates of interest (2012: 18.4%).
The Consolidated Entity analyses its interest rate exposure on an ongoing basis. 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.
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
33
notes to the consoliDateD financial statements
For the year ended 30 June 2013
3. FINANCIAL RISK MANAGEMENT (continued)
(i)
Interest rate risk (continued)
The following sensitivity analysis is based on the interest rate exposures in existence at the balance sheet date.
At 30 June 2013, 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)
2013
$’000
(70)
(35)
35
2012
$’000
(29)
(14)
14
2013
$’000
2012
$’000
-
-
-
-
-
-
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:
+1.00% (100 basis points)
+0.50% (50 basis points)
-0.50% (50 basis points)
(ii) Foreign currency risk
Post Tax Profit
Higher/(Lower)
Other Comprehensive Income
Higher/(Lower)
2013
$’000
(548)
(274)
274
2012
$’000
(668)
(333)
333
2013
$’000
2012
$’000
-
-
-
-
-
-
AVJ Hobsonville Pty Limited is a subsidiary which has a branch in New Zealand. The operations of the branch, including
purchases of inventory denominated in New Zealand Dollars, are funded by AVJennings Properties Limited (another
subsidiary) through an intragroup account.
The Consolidated Statement of Financial Position is affected by the exchange rate movements between the New Zealand
Dollar and Australian Dollar. This exposure is not hedged as the effects are not considered to be material.
The Consolidated Entity also has transactional exposures. Such exposure arises from sales or purchases by an operating
entity in currencies other than the functional currency. This exposure is not considered to be material in relation to the
branch in New Zealand.
At balance date, the Consolidated Entity had the following exposure to New Zealand Dollar foreign currency that is not
designated in cash flow hedges:
Financial Assets
Cash and cash equivalents
Trade and other receivables
Total Financial Assets
Financial Liabilities
Trade and other payables
Total Financial Liabilities
Net exposure
2013
NZ$’000
2012
NZ$’000
41
18,865
18,906
(18,142)
(18,142)
764
1,024
7,698
8,722
(13,489)
(13,489)
(4,767)
34 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
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)
2013
$’000
2012
$’000
-
-
-
-
-
-
2013
$’000
(1,202)
696
1,470
2012
$’000
(934)
541
1,141
The current main banking facilities are due to mature on
30 September 2015. In addition, the Consolidated Entity
operates certain project funding facilities which are discussed
in note 24(b).
At 30 June 2013, 8.0% (2012: 0.9%) of the Consolidated
Entity’s interest-bearing loans and borrowings will mature in
less than one year.
A. Non-derivative financial liabilities:
The liquidity risk disclosures on page 35 reflect all
contractually fixed pay-offs, repayments and interest resulting
from recognised financial liabilities and financial guarantees
as of 30 June 2013. 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
35, 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.
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 $12,470,000 (2012: $15,846,000) 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 arises from the financial liabilities of the
Consolidated Entity and the 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 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.
notes to the consoliDateD financial statements
For the year ended 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
35
3. FINANCIAL RISK MANAGEMENT (continued)
(v) Liquidity risk (continued)
A. Non-derivative financial liabilities: (continued)
Year ended 30 June 2013
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
11,649
16,338
27,987
58,422
3,796
12,470
-
6,695
6,695
6,943
7,093
-
-
4,120
4,120
6,956
87,100
-
11,649
27,153
38,802
72,321
97,989
12,470
74,688
14,036
94,056
182,780
Net maturity
(46,701)
(7,341)
(89,936)
(143,978)
Year ended 30 June 2012
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
4,560
30,132
34,692
24,172
4,415
15,846
-
3,558
3,558
22,774
3,241
-
-
1,832
1,832
47,520
125,338
-
4,560
35,522
40,082
94,466
132,994
15,846
44,433
26,015
172,858
243,306
Net maturity
(9,741)
(22,457)
(171,026)
(203,224)
* 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 assets to meet short-term payments, at reporting date, the Consolidated Entity has
approximately $95 million (2012: $74 million) of unused credit facilities available for its immediate use. Please refer to note 24.
36 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
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 2013
Derivatives
Net settled (interest rate swaps)
Net maturity
Year ended 30 June 2012
Derivatives
Net settled (interest rate swaps)
Net maturity
(vi) Fair value
< 6 months
$’000
-
-
< 6 months
$’000
42
42
6-12
months
$’000
-
-
6-12
months
$’000
-
-
> 1-5 years
$’000
Total
$’000
-
-
-
-
> 1-5 years
$’000
Total
$’000
-
-
42
42
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 2013
Year ended 30 June 2012
Quoted
market
price
(Level 1)
Valuation
technique
– market
observable
inputs
(Level 2)
$’000
$’000
Valuation
technique
– non
market
observable
inputs
(Level 3)
$’000
Total
Quoted
market
price
(Level 1)
Valuation
technique
– market
observable
inputs
(Level 2)
$’000
$’000
$’000
Valuation
technique
– non
market
observable
inputs
(Level 3)
$’000
Total
$’000
Financial liabilities
Derivative instruments
Interest rate swaps
-
-
-
-
-
-
-
-
-
-
187
187
-
-
187
187
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.
notes to the consoliDateD financial statements
For the year ended 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
37
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 as per note 2(k). Estimates
take into consideration fluctuations in price or cost, and
development time and sales rates. The key assumptions used
in this exercise require the use of management judgement
and are reviewed at least half-yearly.
Profit recognised on developments:
Profit on developments is generally recognised on settlement
as discussed in note 2(t). 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.
4.
SIGNIFICANT ACCOUNTING JUDGEMENTS,
ESTIMATES AND ASSUMPTIONS
The preparation of consolidated financial statements
requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the disclosure of
contingent liabilities, at the end of a reporting period.
However, uncertainty about these assumptions and estimates
could result in outcomes that require a material adjustment to
the carrying amount of the asset or liability affected, in future
periods.
(i) Critical judgements in applying accounting policies
In applying the Group’s accounting policies, management
has made the following judgements, which have the
most significant effect on the amounts recognised in the
consolidated financial statements:
Recovery of deferred tax assets:
The Group has recognised deferred tax assets relating to
carried forward tax losses to the extent there are sufficient
taxable temporary differences (deferred tax liabilities) relating
to the same taxation authority against which the unused tax
losses can be utilised. However, utilisation of the tax losses
also depends on the ability of the consolidated entity to
generate future taxable profits and satisfy certain tests at the
time the losses are recouped. If the entity fails to satisfy the
tests, carried forward deferred tax assets of $10,498,000 would
have to be written-off to income tax expense.
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
Key assumptions concerning the future and other key
sources of estimating uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities are described
below. Assumptions and estimates are based on parameters
currently available. Existing circumstances and assumptions
about future developments, however, may change due to
changes in market conditions or circumstances arising beyond
the control of the Group. Future assumptions are altered as
these changes occur.
38 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
5. REVENUES AND EXPENSES
Loss 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
2013
$’000
2012
$’000
150,516
181,022
303
492
4,535
5
1,007
1,604
2,060
481
2,913
18
1,258
1,057
158,462
188,809
Changes in inventories, finished goods and work-in-progress
Amortisation of finance costs capitalised to inventories
6,089
6,998
Employee benefits expenses
Defined contribution superannuation expense
Other employee benefits expenses
Total employee benefits expenses
Depreciation expense
Depreciation
Leasehold improvements
Plant, equipment and motor vehicles
Total depreciation expense
Other expenses
Minimum operating lease payments
Finance costs
Bank loans
Less: Amount capitalised to inventories
Finance costs expensed
Impairment of assets
Provision for loss on inventories
Equity accounted investments impaired
Total impairment
1,185
15,527
1,286
17,802
16,712
19,088
20
20
22
359
381
48
305
353
1,863
2,379
9,822
(9,330)
492
10,809
(10,334)
475
22,964
-
48,621
1,311
22,964
49,932
The current year movement in provision resulted from a realignment of future assumptions with current market conditions
predominantly driven by projects in Queensland.
notes to the consoliDateD financial statements
For the year ended 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
39
6. OPERATING SEGMENTS
Identification of reportable segments
Operating segments
States:
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 the Financial Report.
This includes activities relating to Land Development,
Integrated Housing, Apartments Development and Home
Improvements.
New Zealand has been identified and disclosed as a separate
segment as it is now assessed separately by the chief
operating decision makers. The 30 June 2012 comparatives
have been restated to reflect this new segment.
Other:
This includes corporate transactions entered into by the Head
Office which are not state based.
40 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
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notes to the consoliDateD financial statements
For the year ended 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
41
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42 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
7. KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Compensation of Key Management Personnel
Short-term
- Salary/Fees
- Cash bonus
- Other (1)
Post employment
- Superannuation (2)
Long-term
- Long service leave
Share-based payment
2013
$
2012
$
2,248,278
1,625,541
225,070
76,617
179,028
76,053
155,303
196,235
59,611
357,866
57,922
322,924
3,122,745
2,457,703
(1)
(2)
‘Other’ represents the value of motor vehicle benefits.
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 19 and 20.
(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. Details of shares granted as compensation during the
reporting period are given in note 7(d).
Number of shares held in AVJennings Limited
Opening
Balance
Vested as
Remuneration
Net Other
Change(1)
Closing
Balance
For the year ended 30 June 2013
Directors
S Cheong
E Sam
PK Summers
RJ Rowley
Executives
A Soutar
L Mahaffy
SC Orlandi
CD Thompson(2)
L Hunt
Total
For the year ended 30 June 2012
Directors
S Cheong
E Sam
PK Summers
RJ Rowley
Executives
CD Thompson
L Hunt
Total
(1)
(2)
Includes shares acquired and through the Rights Issue.
Includes 244,000 shares acquired on market.
137,370,023
149,535
1,275,481
180,000
-
-
-
319,500
2,222
-
-
-
-
-
-
-
-
-
54,948,007
192,318,030
59,814
209,349
1,140,785
2,416,266
72,000
252,000
212,131
19,967
143,337
503,652
39,694
212,131
19,967
143,337
823,152
41,916
139,296,761
-
57,139,387
196,436,148
137,370,023
149,535
942,147
180,000
319,500
-
-
-
333,334
-
-
-
-
-
-
-
-
2,222
137,370,023
149,535
1,275,481
180,000
319,500
2,222
138,961,205
333,334
2,222
139,296,761
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
43
notes to the consoliDateD financial statements
For the year ended 30 June 2013
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 both service and performance conditions:
FY2011 Grant
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. The remaining shares were granted to executives who were not KMP. A total of 96,124 shares from this
grant have been forfeited.
FY2012 Grant
An additional 1,695,735 shares were granted on 5 September 2011 to certain executives. As detailed below, these include
1,454,555 shares for KMP. The remaining shares were granted to executives who were not KMP. A total of 124,383 shares from
this grant have been forfeited.
FY2013 Grant
An additional 513,168 shares were granted on 12 September 2012 to certain executives. As detailed in the table below, these
include 280,712 shares for KMP. The remaining shares were granted to executives who were not KMP.
Name
KMP Executive Committee
Members
PK Summers
PK Summers
M Henesey-Smith
M Henesey-Smith
A Soutar
SC Orlandi
SC Orlandi
CD Thompson
CD Thompson
L Hunt
L Hunt
Total
Shares Granted
Number of Shares Vested
Year
Granted
Number
Fair Value
Unvested
at 1 July
2012
Vested
during the
year
Unvested
at 30 June
2013
2011
2012
2011
2012
2013
2011
2012
2011
2012
2011
2012
691,591
$312,945
884,891
$311,924
158,344
202,601
280,712
102,458
131,094
106,183
135,861
78,240
100,108
$71,651
$71,417
$74,389
$46,362
$46,211
$48,048
$47,891
$35,404
$35,288
691,591
884,891
158,344
202,601
–
102,458
131,094
106,183
135,861
78,240
100,108
–
–
–
–
–
–
–
–
–
–
–
691,591
884,891
158,344
202,601
280,712
102,458
131,094
106,183
135,861
78,240
100,108
2,872,083
$1,101,530
2,591,371
–
2,872,083
These shares are subject to both service and performance conditions and will vest to the extent that each of these conditions is
satisfied.
44 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
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 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(r), 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.
7.
KEY MANAGEMENT PERSONNEL
DISCLOSURES (continued)
(d) Equity instrument disclosures relating to Key
Management Personnel (continued)
The service vesting condition is that the employee must still
be employed by AVJennings at 30 September 2013 (for the
FY2011 grant), 30 September 2014 (for the FY2012 grant)
and 30 September 2015 (for the FY2013 grant), 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 for each grant
is as follows:
–
–
–
FY2011 grant – 10% p.a. growth for the three
financial years to 30 September 2013
FY2012 grant – 10% p.a. growth for the three
financial years to 30 September 2014
FY2013 grant – 10% p.a. growth for the three
financial years to 30 September 2015
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
> median but < 75th percentile
Nil
50%
Pro-rata between
50th and 75th
percentiles
>=75th percentile
100%
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
- Share of audit or review costs of the financial reports of the
Consolidated 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
2013
$
2012
$
250,460
272,593
2,730
2,215
10,300
12,360
263,490
287,168
notes to the consoliDateD financial statements
For the year ended 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
45
9.
INCOME TAX
The major components of income tax credit 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 credit reported in the Consolidated
Statement of Comprehensive Income
2013
$’000
2012
$’000
916
(383)
196
(710)
(8,556)
(2)
(16,450)
838
(8,025)
(16,126)
Numerical reconciliation between aggregate tax expense recognised in the Consolidated Statement of Comprehensive
Income and tax expense calculated per the statutory income tax rate:
(23,291)
(45,954)
(6,987)
(13,787)
(686)
(368)
16
128
(1,603)
(864)
(8,025)
(16,126)
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
2013 (2012: $Nil).
Accounting loss before income tax
Tax at Australian income tax rate of 30% (2012 – 30%)
Adjustment for prior periods
Equity accounted share of Joint Venture profits
Other non-deductible items and variations
Aggregate income tax credit
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(u).
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.
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.
46 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
10. DIVIDENDS
Dividends paid and recognised
2011 final dividend of 1.5 cents per fully paid share,
paid 19 October 2011. Fully franked @ 30% tax.
2012 interim dividend of 0.5 cents per fully paid share,
paid 11 April 2012. Fully franked @ 30% tax.
Total dividends paid
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%
2013
$’000
2012
$’000
-
-
-
4,119
1,373
5,492
20,817
21,485
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.
11. EARNINGS PER SHARE
(a) Earnings used in calculating earnings per share
For basic earnings per share:
2013
$’000
2012
$’000
Net loss attributable to ordinary holders of the parent
(15,266)
(29,828 )
For diluted earnings per share:
Net loss attributable to ordinary holders of the parent
Tax effected share-based payment expense
- liability component
Net loss attributable to ordinary equity holders adjusted
for the effect of future share-based payment expense
(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
(15,266)
(260)
(29,828)
(470)
(15,526)
(30,298)
2013
Number
2012
Number
279,649,305
271,517,507
3,365,100
3,071,187
Weighted average number of ordinary shares for diluted earnings per share
283,014,405
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 Consolidated Financial Statements.
12. 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
11,649
4,560
2013
$’000
2012
$’000
notes to the consoliDateD financial statements
For the year ended 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
47
13. TRADE AND OTHER RECEIVABLES
Current
Amounts due under construction contracts and trade receivables
Related parties receivables
Funds held in solicitors trust accounts
Other receivables
Allowance for impairment of other receivables
2013
$’000
11,936
2,497
5,359
3,251
(10)
2012
$’000
4,277
3,299
21,896
4,228
(10)
Total current trade and other receivables
23,033
33,690
Non-current
Amounts due under construction contracts and trade receivables
4,120
1,832
Total non-current trade and other receivables
4,120
1,832
(a) Allowance for impairment loss
No impairment loss (2012: $10,000) has been recognised by the Consolidated Entity in the current year.
At 30 June, the ageing analysis of trade receivables is a follows:
Number of days outstanding
Total
$’000
0-30
$’000
31-60
$’000
16,056
11,147
537
6,109
6,010
-
61-90
PDNI*
$’000
-
-
+ 91
PDNI*
$’000
4,362
89
+ 91
CI#
$’000
10
10
2013
2012
* 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 provided for during the year
At the end of the year
(b) Related party receivables
2013
$’000
10
-
-
10
2012
$’000
78
(78)
10
10
For terms and conditions relating to related party receivables, refer to note 34(i).
(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.
48 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
14. INVENTORIES
Current
Home Improvements
Work-in-progress on contracts
Cost plus attributable profits
Less: progress billings
Total work-in-progress
Land, Housing and Apartments Developments
Broadacres
Land to be subdivided - at cost
Borrowing and holding costs capitalised
Provision for loss on inventories
Total broadacres
Work-in-progress
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
Provision for loss on inventories
Total work-in-progress
Completed inventory
Completed houses and apartments - at cost
Completed residential land lots - at cost
Borrowing and holding costs capitalised
Provision for loss on inventories
Total completed inventory
Total current inventories
Note
2013
$’000
2012
$’000
-
-
-
9,860
(9,791)
69
27,958
12,195
(3,237)
25,906
6,729
(2,028)
36,916
30,607
24,553
4,600
4,211
2,660
(819)
4,816
5,021
1,760
2,045
(1,004)
35,205
12,638
11,861
29,819
2,789
(7,522)
14,893
16,455
1,581
(2,371)
36,947
30,558
109,068
73,872
14(a)
14(a)
14(a)
notes to the consoliDateD financial statements
For the year ended 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
49
14. INVENTORIES (continued)
Non-current
Land, Housing and Apartments Developments
Broadacres
Land to be subdivided - at cost
Borrowing and holding costs capitalised
Provision for loss on inventories
Total broadacres
Work-in-progress
Land subdivided or in the course of being subdivided - at cost
Development costs capitalised
Borrowing and holding costs capitalised
Provision for loss on inventories
Total work-in-progress
Completed inventory
Completed residential land lots - at cost
Borrowing and holding costs capitalised
Provision for loss on inventories
Total completed inventory
Total non-current inventories
Total inventories
Note
2013
$’000
2012
$’000
14(a)
14(a)
14(a)
240,755
55,014
(41,258)
288,226
53,287
(37,487)
254,511
304,026
32,254
2,702
1,090
(12,060)
28,773
12,213
7,267
(5,229)
23,986
43,024
3,248
-
-
3,248
6,253
353
(504)
6,102
281,745
353,152
390,813
427,024
(a)
(b)
(c)
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 8.31%
(2012: 10.73%).
Inventory with a book value of $100,227,000 (2012: $102,230,000) 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)).
Write-downs of inventories to net realisable value recognised as an expense during the year ended 30 June 2013 amounted
to $22,964,000 (2012: $48,621,000). The expense has been disclosed as a separate item on the Consolidated Statement of
Comprehensive Income.
Movements in provision for loss on inventories
At the beginning of the year
Amounts utilised
Provisions created
At the end of the year
2013
$’000
48,621
(6,689)
22,964
2012
$’000
-
-
48,621
64,896
48,621
50 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
15. OTHER CURRENT ASSETS
Prepayments
Deposits
Total other current assets
2013
$’000
1,067
144
2012
$’000
1,985
127
1,211
2,112
16. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Investment in Associate - unincorporated
Interest in Joint Venture Entities - unlisted
Note
16(a)
16(b)
2013
$’000
46
25,135
2012
$’000
499
23,908
Total equity accounted investments
25,181
24,407
Investments in Associates are accounted for in accordance with the policy outlined in note 2(f) while Joint Venture Entities are
accounted for in accordance with note 2(e).
(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
2013
2012
10%
2013
$’000
499
(520)
67
46
10%
2012
$’000
1,484
(1,380)
395
499
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
2013
$’000
55
9
419
67
2012
$’000
557
119
1,153
395
notes to the consoliDateD financial statements
For the year ended 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
51
16. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD (continued)
(a) Investment in Associate (continued)
Impairment
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 2013, amounted to $18,000 (2012: $58,000).
(b) Interest in Joint Venture Entities
Investment details
Joint Venture Entity and principal activities
Eastwood – Land Development and Building Construction
Sydney Olympic Park – Commercial Development and Construction(1)
Woodville – Land Development and Building Construction
Movements in carrying amount
At the beginning of year
Contributions made
Share of net profit
AVJennings' acquisition of joint venture assets
Write-down of investment(1)
At the end of year
Interest held
2013
2012
50%
-
50%
2013
$’000
23,908
-
1,227
-
-
50%
50%
50%
2012
$’000
39,647
1,361
5,364
(21,153)
(1,311)
25,135
23,908
(1)
During the year, the investment in Sydney Olympic Park Development amounting to $1,311,000, which was fully provided for in the previous year, was
written off due to termination of the agreement.
The Consolidated Entity’s share of the Joint Venture Entities’ assets, 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 liabilities
Net assets
Share of revenue, expenses and results
Revenues
Expenses
Profit before tax
Tax
Profit after tax
2013
$’000
20,185
13,648
33,833
3,588
6,714
10,302
2012
$’000
19,883
16,707
36,590
7,194
5,488
12,682
23,531
23,908
19,882
(18,129)
1,753
(526)
1,227
18,785
(12,231)
6,554
(1,190)
5,364
52 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
17. PARENT ENTITY FINANCIAL INFORMATION
(a) Summary financial information
The individual financial statements for the parent entity 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
(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 2013 (2012: Nil).
2013
$’000
69,176
232,462
17,025
17,025
2012
$’000
31,382
194,728
19,545
19,545
160,960
121,096
1,077
53,400
215,437
-
-
687
53,400
175,183
8
8
notes to the consoliDateD financial statements
For the year ended 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
53
18. CONTROLLED ENTITIES
(a) Investment in controlled entities
The following economic entities are the controlled entities of AVJennings Limited:
ECONOMIC ENTITY (1)
2013
2012
2013
2012
% 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(3)
AVJennings Properties Limited(3)
Jennings Sinnamon Park Pty Limited
Long Corporation Limited(3)
Orlit Pty Limited(3)
Sundell Pty Limited(3)
AVJennings Housing Pty Limited(3)
AVJennings Home Improvements S.A. Pty Limited(3)
AVJennings Mackay Pty Limited(3)
Entities excluded from the Closed Group
Crebb No 12 Pty Limited
Dunby Pty Limited
Epping Developments Limited
Montpellier Gardens Pty Limited
Sirda Pty Limited(4)
AVJ ODP Pty Limited
AVJennings (Cammeray) Pty Limited
AVJennings Syndicate No 2 Limited(4)
AVJennings Syndicate No 3 Limited
AVJennings Syndicate No 4 Limited
AVJennings Officer Syndicate Limited
AVJennings Properties SPV No 1 Pty Limited
AVJennings Properties SPV No 2 Pty Limited
AVJennings Properties SPV No 3 Pty Limited(4)
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(4)
AVJennings Properties SPV No 9 Pty Limited
AVJennings SPV No 10 Pty Limited
AVJennings Properties SPV No 11 Pty Limited
AVJennings Properties SPV No 15 Pty Limited(4)
Creekwood Developments Pty Limited
Portarlington Nominees 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
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
No
No
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
No
No
Yes
No
No
Yes
Yes
No
No
No
No
No
Yes
Yes
No
Yes
Yes
Yes
No
Yes
No
No
No
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
No
No
No
No
No
Yes
Yes
No
No
No
No
No
No
Yes
No
No
No
No
No
Yes
No
(1)
(2)
(3)
(4)
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.
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 Contract performance bond facility referred to in note 24(c).
These entities are in the process of being deregistered.
54 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
18. CONTROLLED ENTITIES (continued)
(b) Ultimate parent
AVJennings Limited is the ultimate Australian parent entity. SC Global Developments Pte Ltd is the ultimate parent entity.
(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 18(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 18(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 18(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:
Revenues
Cost of sales
Other expenses
Loss before income tax
Income tax
Loss after income tax
Dividend from non closed goup member
Loss for the year
Closed Group
2013
$’000
98,616
(97,701)
(31,205)
(30,290)
9,820
2012
$’000
108,054
(89,386)
(78,199)
(59,531)
17,139
(20,470)
(42,392)
4
-
(20,466)
(42,392)
notes to the consoliDateD financial statements
For the year ended 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
55
18. 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
Tax receivable
Other current assets
Total current assets
NON-CURRENT ASSETS
Inventories
Property, plant and equipment
Deferred tax assets
Intangible assets
Total non-current assets
Total assets
CURRENT LIABILITIES
Trade and other payables
Derivative financial instruments
Short-term provisions
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
2013
$’000
2012
$’000
10,804
137,730
56,774
-
931
3,162
110,348
46,347
669
1,977
206,239
162,503
169,688
210,247
993
5,572
2,816
1,174
-
2,816
179,069
214,237
385,308
376,740
57,969
-
4,015
-
187
3,667
61,984
3,854
-
75,000
-
845
37,692
103,000
3,922
641
75,845
145,255
137,829
149,109
247,479
227,631
160,960
121,096
1,077
85,442
687
105,848
247,479
227,631
56 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
18. 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:
At beginning of the year
Changes in equity due to members entering/exiting the closed group
Loss for the year
Total income and expenses for the year
Equity transactions
- Ordinary share capital raised
- Treasury shares acquired
- Share-based payment reserve
- Dividends paid to equity holders of parent
2013
$’000
2012
$’000
227,631
273,049
60
(20,466)
(20,406)
39,956
(92)
390
-
19,848
2,841
(42,392)
(39,551)
-
(739)
364
(5,492)
(45,418)
At end of the year
247,479
227,631
19. 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
2013
2012
-
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(e), under the following
classifications:
Revenues
Cost of property developments sold
Other expenses
Profit before income tax
Income tax
Net profit for the year
2013
$’000
31,240
(22,376)
(1,702)
7,162
(2,149)
5,013
2012
$’000
12,549
(10,358)
(1,641)
550
(165)
385
notes to the consoliDateD financial statements
For the year ended 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
57
19. 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(e), 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
Property, plant and equipment
Total non-current assets
Total assets
CURRENT LIABILITIES
Trade and other payables
Interest-bearing loans and borrowings
Total current liabilities
NON-CURRENT LIABILITIES
Trade and other payables
Interest-bearing borrowings
Total non-current liabilities
Total liabilities
Net assets
2013
$’000
810
2,999
15,299
16
2012
$’000
534
5,878
4,612
10
19,124
11,034
29,400
39,569
3
-
29,403
39,569
48,527
50,603
4,713
313
4,984
-
5,026
4,984
6,956
4,338
9,578
7,287
11,294
16,865
16,320
21,849
32,207
28,754
58 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
20. 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
Total property, plant and equipment
Reconciliations
2013
$’000
2012
$’000
399
(330)
69
8,133
(7,209)
924
993
378
(307)
71
7,966
(6,863)
1,103
1,174
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 2012
Note
Consolidated
Carrying amount at 1 July 2011
Additions
Disposals
Depreciation charge
Carrying amount at 30 June 2012
For the year ended 30 June 2013
Consolidated
Carrying amount at 1 July 2012
Additions
Disposals
Depreciation charge
Carrying amount at 30 June 2013
5
5
Plant,
equipment
and motor
vehicles
$’000
Leased
motor
vehicles
$’000
Leasehold
improvements
$’000
202
38
(121)
(48)
856
603
(51)
(305)
71
1,103
29
-
(29)
-
-
Total
$’000
1,087
641
(201)
(353)
1,174
71
20
-
(22)
69
1,103
208
(28)
(359)
924
-
-
-
-
-
1,174
228
(28)
(381)
993
notes to the consoliDateD financial statements
For the year ended 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
59
21. DEFERRED TAX ASSETS
The provision for deferred income tax is made up as follows:
- capitalisation of development costs
- prepayments, accruals/provisions and investments
- brand name
- unrealised loss on interest derivatives
- provisions for assets impairments
- tax loss carried forward
Deferred tax assets
Reconciliations
Note
2013
$’000
2012
$’000
(22,336)
(3,699)
(845)
-
19,469
10,498
3,087
-
-
-
-
-
-
-
Reconciliations of the carrying amount of the deferred tax asset at the beginning and end of the year are set out below:
Transferred from deferred tax liabilities
Arising temporary differences
Carrying amount at end of year
22. INTANGIBLE ASSETS
Brand name at cost
Less: accumulated amortisation
Total intangible assets
26
2013
$’000
(5,938)
9,025
3,087
2012
$’000
-
-
-
2013
$’000
9,868
(7,052)
2012
$’000
9,868
(7,052)
2,816
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(j), 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 2013,
there were no indicators of impairment.
60 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
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
Unsecured
Land creditors
Total non-current payables
Land creditors
2013
$’000
2012
$’000
-
5,600
47,342
25,196
8,689
2,750
6,584
9,239
2,450
4,461
65,365
41,346
65,365
46,946
6,956
47,520
6,956
47,520
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(i).
Fair value
Due to the short-term nature of current payables, their carrying amount is assumed to approximate their fair value. Non-current
land creditors have been discounted using a rate of 7.59% (2012: 9.54%).
24. INTEREST-BEARING LOANS AND BORROWINGS
Current
Secured
Bank loans
Total current interest-bearing liabilities
Non-current
Secured
Bank loans
Total non-current interest-bearing liabilities
2013
$’000
2012
$’000
7,171
1,100
7,171
1,100
82,720
123,137
82,720
123,137
notes to the consoliDateD financial statements
For the year ended 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
61
24. INTEREST-BEARING LOANS AND BORROWINGS (continued)
Financing arrangements
The Consolidated Entity has access to the following lines of credit:
30 June 2013
Main banking facilities
- bank loans
- performance bonds and other non-cash facilities
Project funding
- bank loans
- performance bonds and other non-cash facilities (1)
Contract performance bond facility
- performance bonds
Note
24(a)
24(b)
Available
$’000
Utilised
$’000
Unutilised
$’000
140,000
18,600
75,000
7,838
65,000
10,762
158,600
82,838
75,762
24,128
19,750
14,891
12,442
9,237
7,308
43,878
27,333
16,545
10,000
7,396
2,604
(1)
At 30 June 2013 these facilities are interchangeable up to $5 million (2012: $5 million) between the bank loans and performance
bonds /other non-cash facilities.
30 June 2012
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
24(a)
24(b)
5,000
134,000
33,600
-
103,000
11,334
5,000
31,000
22,266
172,600
114,334
58,266
24,078
23,500
47,578
21,237
17,775
39,012
2,841
5,725
8,566
5,576
1,200
Contract performance bond facility
24(c)
- performance bonds
Leasing facilities
Significant terms and conditions
(a) Main banking facilities
10,000
4,424
24(d)
1,200
-
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)). 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 18. The current interest
rates on the bank loans range from 4.34% to 4.54% (2012: 5.09% to 5.97%).
The Consolidated Entity’s main banking facilities mature on 30 September 2015. These facilities are 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)).
62 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
24. INTEREST-BEARING LOANS AND BORROWINGS (continued)
(b) Project funding
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;
• fixed and floating charge over the assets and undertakings, including project rights, of a relevant entity, namely,
AVJennings Properties SPV No 4 Pty Limited;
• fixed and floating charge over the assets of the entity involved in the relevant project, namely, Portarlington
Nominees Pty Limited; and
• first registered mortgage over certain real estate inventories of the entity involved in the relevant project,
namely, Portarlington Nominees Pty Limited.
At 30 June 2013 the facilities shown are interchangeable up to $5,000,000 (2012: $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 March 2014 and September 2015. Individual projects
are expected to be completed and the outstanding amounts repaid or refinanced prior to expiry of each facility. As at
30 June 2013, the balance outstanding on these facilities was $14,891,000 (2012: $21,237,000).
The carrying amounts of the pledged assets are as follows:
Wollert, Victoria
Cheltenham, South Australia
Arlington Rise, Victoria
2013
$’000
40,250
48,527
18,480
2012
$’000
45,492
50,422
16,431
The weighted average interest rate on the project funding loans at year-end was 3.52% (2012: 4.40%).
(c) Contract performance bond facility
The Consolidated Entity has entered into a Contract performance bond facility of $10,000,000 (2012: $10,000,000). The Contract
performance bond facility is subject to review annually. This facility expires on 31 October 2013 and management expects
the annual review which is underway, to be completed shortly and the facility extended for a further 12 months. The Contract
performance 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 18.
(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. This facility was cancelled during the year ended 30 June 2013.
(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.
There were no interest rate derivative contracts in place at 30 June 2013.
notes to the consoliDateD financial statements
For the year ended 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
63
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
- prepayments, accruals/provisions and investments
- brand name
- unrealised loss on interest derivatives
- provisions for assets impairments
- tax loss carried forward
Deferred tax liabilities
Reconciliations
2013
$’000
2012
$’000
449
-
2013
$’000
2012
$’000
-
-
-
-
-
-
-
21,078
1,413
845
(44)
(14,979)
(2,375)
5,938
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
Transferred to deferred tax assets
Carrying amount at end of year
27. PROVISIONS
Current
Employee benefits
Other
Total current provisions
Non-current
Employee benefits
Total non-current provisions
Note
21
2013
$’000
5,938
-
(5,938)
2012
$’000
19,516
(13,578)
-
-
5,938
2013
$’000
3,056
980
2012
$’000
2,911
756
4,036
3,667
845
845
641
641
64 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
28. CONTRIBUTED EQUITY
Ordinary shares
Treasury shares
Share capital
Note
28(a)
28(b)
2013
Number
2012
Number
2013
$’000
2012
$’000
384,423,851
274,588,694
162,793
122,837
(3,365,100)
(3,071,187)
(1,833)
(1,741)
160,960
121,096
(a) Movement in ordinary share capital
Number
Number
$’000
As at the beginning of the year
274,588,694
274,588,694
122,837
$’000
122,837
Issued pursuant to the Rights Issue
3 June 2013
109,835,157
-
39,956
-
As at the end of the year
384,423,851
274,588,694
162,793
122,837
On 24 April 2013, the Company announced a Non-Renounceable Entitlement Offer (Entitlement Offer). The Entitlement Offer
was undertaken on the basis of 2 new shares for every 5 held on 3 May 2013. The shares were offered at $0.375 per new share
which represented a 4.5% discount to the volume weighted average price of the shares on the 20 trading days to 19 April 2013.
Shareholders with registered addresses situated outside Australia, New Zealand and Singapore were not eligible to participate
in the Entitlement Offer. The additional funds were applied to reduce debt and support general working capital requirements
including:
settlement of development sites previously acquired and development of these projects;
•
• development of owned land and land controlled under project development agreements; and
•
investment in built form on selected projects.
The Entitlement Offer raised $39,956,388 after net transaction costs of $1,231,796. On 3 June 2013, 109,835,157 new fully paid
ordinary shares were issued increasing the total number of fully paid ordinary shares on issue to 384,423,851.
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.
(b) Movement in treasury shares
As at the beginning of the year
Acquisition of shares by AVJ Deferred
Employee Share Plan Trust
Employee share scheme issue
Number
Number
$’000
$’000
(3,071,187)
(1,708,786)
(1,741)
(1,002)
(293,913)
(1,695,735)
-
333,334
(293,913)
(1,362,401)
(92)
-
(92)
(739)
-
(739)
As at the end of the year
(3,365,100)
(3,071,187)
(1,833)
(1,741)
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.
notes to the consoliDateD financial statements
For the year ended 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
65
28. CONTRIBUTED EQUITY (continued)
(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 2013, no dividend was paid (2012: $5,492,000).
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
2013
$’000
89,891
(11,649)
2012
$’000
124,237
(4,560)
78,242
119,677
295,361
462,903
26.5%
16.9%
268,993
498,129
44.5%
24.0%
AVJennings Limited has complied with the financial covenants of its borrowing facilities during the 2013 and 2012 reporting
periods.
29. RESERVES AND RETAINED EARNINGS
(a) Reserves
Foreign
Currency
Translation
Reserve
$’000
(417)
160
-
(257)
1,380
-
Share-based
Payment
Reserve
$’000
323
-
364
687
-
390
Total
$’000
(94)
160
364
430
1,380
390
1,123
1,077
2,200
At 1 July 2011
Foreign currency translation
Share-based payments
At 30 June 2012
Foreign currency translation
Share-based payments
At 30 June 2013
(b) Nature and purpose of reserves
Foreign currency translation reserve
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(aa).
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(r) and 7(d) for further details of the plan.
66 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
29. RESERVES AND RETAINED EARNINGS (continued)
(c) Retained earnings
Movements in retained earnings were as follows:
At the beginning of the year
Net loss for the year
Dividends
At the end of the year
30. CASH FLOW STATEMENT RECONCILIATION
Reconciliation of loss after tax to net cash flows from operations
Loss after tax
Adjustments for:
Depreciation
Net (gain)/loss on disposal of property, plant and equipment
Interest income classified as investing cash flow
Share of profits of associates and joint venture entities
Provision for loss on equity accounted investments
Movement in provision for loss on inventories
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
(Increase)/decrease in prepayments and deposits
Increase in deferred tax assets
Decrease in deferred tax liability
Increase/(decrease) in current tax liability
(Increase)/decrease in current tax assets
Increase/(decrease) in trade and other payables
Increase in provisions
2013
$’000
2012
$’000
147,467
(15,266)
-
182,787
(29,828)
(5,492)
132,201
147,467
2013
$’000
2012
$’000
(15,266)
(29,828)
381
(5)
(492)
(1,294)
-
16,275
390
(187)
19,936
8,369
901
(3,087)
(5,938)
449
514
(21,069)
573
353
222
(481)
(5,759)
1,311
48,621
364
119
(58,784)
(18,363)
(812)
-
(13,578)
(3,540)
(514)
23,833
378
Net cash flows from/(used in) operating activities
450
(56,458)
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
67
notes to the consoliDateD financial statements
For the year ended 30 June 2013
31. COMMITMENTS
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 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
32. CONTINGENCIES
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 18.
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 18.
Contract performance 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 Contract performance
bond facility. Details of these entities are set out in note
18. 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 2013, amounted to
$7,396,000 (2012: $4,424,000). No liability is expected to arise.
2013
$’000
2012
$’000
1,679
2,052
3,731
3,058
673
1,891
3,524
5,415
5,271
144
3,731
5,415
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
2013, amounted to $7,811,000 (2012: $13,263,000). 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 2013, amounted to $12,470,000 (2012: $15,846,000).
No liability is expected to arise.
33. SIGNIFICANT EVENTS AFTER THE
BALANCE SHEET DATE
No matter or circumstance has arisen since 30 June 2013
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
Legal issues
financial years.
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.
68 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
34. RELATED PARTY DISCLOSURES
(a) Ultimate parent
AVJennings Limited is the ultimate Australian parent entity.
SC Global Developments Pte Ltd (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
2013
Number
2012
Number
Fully paid ordinary shares
195,195,645
138,975,039
Directors and Director-related entities received normal
dividends on these ordinary shares.
(e) Transactions with related parties
Entity with significant influence over the Consolidated Entity:
SC Global Developments Pte Ltd
Consultancy fee paid/payable
Associate:
Epping JV
(c)
Entity with significant influence over AVJennings
Limited
192,318,030 ordinary shares equating to 50.03% of the total
ordinary shares on issue (2012: 137,370,023 and 50.03%
respectively) were held by SC Global Developments Pte
Ltd and its associates in the Parent Entity at 30 June 2013.
Certain Directors of SC Global Developments Pte Ltd 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 2013, the Parent Entity has not set up any
provisions against debts owed by related parties as
recoverability is considered probable (2012: $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.
Note
2013
$’000
2012
$’000
(i)
600,000
600,000
Management fee received/receivable
809,882
669,246
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
-
-
67,915
8,333
2,219,741
1,516,363
50,000
50,000
Reversal of over accrued management fee receivable
-
(42,440)
Cheltenham JV
Accounting services fee received/receivable
72,000
54,000
Woodville
Accounting services fee received/receivable
72,600
54,000
(i)
Consultancy fees paid to SC Global Developments Pte Ltd of $600,000 (2012: $600,000).
(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 16 and note 19.
notes to the consoliDateD financial statements
For the year ended 30 June 2013
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
69
34. RELATED PARTY DISCLOSURES (continued)
(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
2013
$’000
2012
$’000
2,497
3,299
2013
$’000
2012
$’000
2,600
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.
(j) Transactions with Key Management Personnel
Disclosures relating to Key Management Personnel are set out in note 7.
(k) Entitlement offer
The Company conducted an entitlement offer in April 2013 of 2 shares for every 5 shares held at an offer price of 37.5 cents
per share. Those Directors who held shares either directly or indirectly, took up their entitlement in full. Executive (non-director)
KMP also acquired shares under the Entitlement offer by participating in the offer and by sub-underwriting a proportion of the
shortfall. The shares acquired under the entitlement offer by KMP are disclosed in note 7.
35. SHARE-BASED PAYMENT PLANS
(a) Recognised share-based payment expenses
Total expenses arising from share-based payment transactions and disclosed as part of employee benefit expenses are shown in
the table below:
Expense arising from equity-settled share-based payment transactions
Total expense arising from share-based payment transactions
2013
$’000
390
390
2012
$’000
364
364
The share-based payment plan is described in note 35(b). There have been no cancellations or modifications to the plan
during 2013.
(b) Type of share-based payment plan
AVJ Deferred Employee Share Plan
The AVJ Deferred Employee Share Plan (the LTI Plan) administers employee share schemes under which shares may be
purchased on-market by the LTI Plan Trustee on behalf of employees. These shares vest to employees for no cash consideration
subject to certain conditions being satisfied. Employees may elect not to participate in the scheme. Shares held by the LTI Plan’s
trust and not yet allocated to employees at the end of the reporting period are shown as treasury shares in the Consolidated
Financial Statements.
Share-based compensation benefits are provided to Executives via the LTI 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 of the shares at the grant date is expensed on a straight-line basis over
the vesting period with a corresponding increase in share-based payment reserve in equity.
70 | AVJENNINGS LIMITED · ABN 44 004 327 771
notes to the consoliDateD financial statements
For the year ended 30 June 2013
35. SHARE-BASED PAYMENT PLANS (continued)
The performance vesting conditions are:
(b) Type of share-based payment plan (continued)
Vesting subject to both service and performance conditions:
FY2011 Grant
A total of 1,375,452 shares were granted on 28 September
2010 to certain executives. As detailed in the tables on page
18 and page 43, these include 1,136,816 shares for KMP.
The remaining shares were granted to executives who were
not KMP. A total of 96,124 shares from this grant have been
forfeited.
FY2012 Grant
An additional 1,695,735 shares were granted on 5 September
2011 to certain executives. As detailed in the tables on page
18 and page 43, these include 1,454,555 shares for KMP. The
remaining shares were granted to executives who were not
KMP. A total of 124,383 shares from this grant have been
forfeited.
FY2013 Grant
An additional 513,168 shares were granted on 12 September
2012 to certain executives. As detailed in the table on page
18, these include 280,712 shares for KMP. The remaining
shares were granted to executives who were not KMP.
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 (for the
FY2011 grant) and 30 September 2014 (for the FY2012 grant)
and 30 September 2015 (for the FY2013 grant). In the event
of death or permanent disablement the shares may vest
subject to Board discretion. In the event that the employee is
retrenched, the shares may vest subject to Board discretion.
If the employee resigns (in certain circumstances) or is
terminated, the vested shares will be forfeited.
• 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 for each grant
is as follows:
–
FY2011 grant - 10% p.a. growth for the three
financial years to 30 September 2013
FY2012 grant - 10% p.a. growth for the three
financial years to 30 September 2014
FY2013 grant - 10% p.a. growth for the three
financial years to 30 September 2015
–
–
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
> median but < 75th percentile
Nil
50%
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 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.
Directors’ Declaration
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
71
In accordance with a resolution of the Directors of AVJennings Limited, we state that:
1)
In the opinion of the Directors:
i)
the Consolidated Financial Statements and Notes 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 2013 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 Consolidated Financial Statements and Notes also comply with International Financial Reporting Standards
as disclosed in note 2(a); 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.
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 2013.
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 18 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.
2)
3)
On behalf of the Board
Simon Cheong
Director
27 September 2013
Peter Summers
Director
72 | AVJENNINGS LIMITED · ABN 44 004 327 771
inDepenDent auDitor’s report to the members
of avJennings limiteD
Report on the financial report
Independence
We have audited the accompanying financial report of
AVJennings Limited, which comprises the consolidated
statement of financial position as at 30 June 2013, 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(a),
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.
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:
giving a true and fair view of the consolidated
i
entity’s financial position as at 30 June 2013 and of its
performance for the year ended on that date; and
complying with Australian Accounting Standards
and the Corporations Regulations 2001; and
ii
b. the financial report also complies with International
Financial Reporting Standards as disclosed in Note 2(a).
Report on the remuneration report
We have audited the Remuneration Report included in
pages 15 to 20 of the Directors’ Report for the year ended
30 June 2013. 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 2013, complies with
section 300A of the Corporations Act 2001.
Ernst & Young
Mark Conroy
Partner
Sydney
27 September 2013
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
73
corporate governance statement
For the year ended 30 June 2013
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 section of the Company’s Annual 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.
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 section of this Annual 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 of this
Annual 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 Pte Ltd, a substantial shareholder, have no
involvement in the operational management of the Company.
The Managing Director is an Executive Director.
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 Pte Ltd. 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 at least six scheduled times a year either in
person or by teleconference and occasionally on an ad-hoc
basis if required. 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, the culture and values of the Company and
meeting arrangements. 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.
74 | AVJENNINGS LIMITED · ABN 44 004 327 771
corporate governance statement
For the year ended 30 June 2013
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 two
Independent Directors, Mr R J Rowley, and Mr B G Hayman
and two Non-Executive Directors, Mr S Cheong and Mrs E
Sam, who is also Chairperson of the Committee. 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.
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 review and make recommendations
to the Board on Board composition, to establish the criteria
for Board and Board Committee membership and to evaluate
Board performance and the performance of Directors.
The Nominations Committee assists the Board in identifying,
evaluating and recommending candidates to the Board,
having regard to the relevant skills, experience, personal
attributes, diversity, availability and time commitments
required of new Directors. The Committee may make use of
external consultants if that is deemed appropriate.
The Committee meets at least annually.
A Board skills matrix has been developed and is used to
assess the skills and experience available on the Board and
to identify gaps in skills, if any. Development of strategy
and policy, financial literacy, industry experience, banking
and finance, risk management, compliance oversight, sales
and commercial experience are some of the desirable skills
identified and these are collectively available on the Board.
In November 2012, through the Nominations Committee,
the Directors reviewed the performance of the whole Board
and Board Committees. The review considered each
Director’s expertise, skill and experience, along with their
understanding of the company’s business, preparation
for meetings, relationships with other Directors and
management, awareness of ethical and governance issues,
and overall contribution. The outcomes of the review were
discussed and considered by all the Directors and the
general conclusion was that the Board and each of the
Board Committees were operating well. The Company had
experienced a challenging year in difficult market conditions
and the Board had provided good oversight of management’s
actions and provided strategic direction to those activities.
It was also considered that the respective committees had
done likewise within their spheres of responsibility.
Details of Directors’ experience and qualifications and
attendance at Board and Committee Meetings are set out on
pages 14 to 15 and page 20 of the Directors’ Report in this
Annual Report.
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 Annual 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.
Diversity
In accordance with the ASX recommendations, the Board
has established a Diversity Policy and has set measurable
objectives to achieve its goals on diversity. The Company’s
progress towards achieving these objectives, together with
details of the proportion of women employees in the whole
organisation, women in senior executive positions and women
on the Board, are shown on page 77 of this Annual Report.
The Diversity Policy is available for viewing on the Company’s
website at www.avjennings.com.au.
Principle 4:
Safeguard integrity in financial reporting
Audit Committee
The Company has an Audit Committee comprising of three
Independent Directors, Mr B Chin (who is a Chartered
Accountant and is also the Chairman of the Committee),
Mr R J Rowley, Mr Teck Poh Lai 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.
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.
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
75
corporate governance statement
For the year ended 30 June 2013
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 2012
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. The Company has in place a formal disclosure policy,
contained within the Shareholder Communication Policy,
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.
This policy has 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.
The policy addresses:
• Compliance with continuous disclosure obligations;
• Maintenance of confidentiality where appropriate;
• Timely and factual release of information where
appropriate;
• Clarity and balance in reporting;
• Equal and timely access to information.
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. The
Shareholder Communication Policy outlines the process
through which the Company will endeavour to ensure
timely and accurate information is provided equally to all
shareholders. Information is communicated to shareholders
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.
All shareholders are encouraged to attend AVJennings’
AGM in person or participate by sending a proxy as their
representative. 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.
76 | AVJENNINGS LIMITED · ABN 44 004 327 771
corporate governance statement
For the year ended 30 June 2013
The Committee consists of two Non-Executive Directors,
Mrs E Sam (Chairperson) and Mr S Cheong, and two
Independent Directors, Mr B G Hayman and Mr Teck Poh Lai.
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. 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 Pte Ltd.
AVJennings’ Remuneration Report is set out on pages 15 to
20 of the Directors’ Report in this Annual Report.
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 R J Rowley (Chairman) and Mr B G 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 B G Hayman and Mr R J 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 and
ASX Corporate Governance Principle 7 to the effect that:
• The integrity of 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 website under
the Corporate Governance Section.
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
77
Diversity report
For the year ended 30 June 2013
Responsibility for Diversity
Employees at all levels of employment are responsible for
the creation and implementation of a diverse, inclusive and
tolerant workplace, and for elimination of discriminatory
practices.
The Board is responsible for monitoring the development and
implementation of diversity initiatives, policies and practices.
The Board reports annually on these matters.
Diversity Targets
This report reflects AVJennings’ focus during the reporting
period on the reporting on gender diversity as required
under the ASX Corporate Governance Council Principles and
Recommendations.
This Diversity Annual Report of AVJennings Limited
(“AVJennings”) is issued in compliance with ASX Corporate
Governance Council Principles and Recommendations.
Approach to Diversity
AVJennings aims to embed equity and diversity principles
in its work practices and organisational environment. To
ensure that these practices remain appropriate and foster
an inclusive environment, AVJennings annually reviews
its workforce diversity profile, its policies and any relevant
external developments.
To enhance efficiency and productivity, employment decisions
such as selection, promotion and training are made based
on merit rather than personal attributes (gender, race, marital
status, age and other characteristics (which can vary based
on the jurisdiction)). AVJennings also actively takes steps to
eliminate discriminatory behaviour and harassment in the
work place.
Measurable Objective
Progress Response
1. At least one female
Board Director
2. At least one female
Executive Committee
Member
3. Non-Discriminatory
Recruitment
4. Non-Discriminatory
Selection
5. Data Collection
6.
EOWA Reporting
One (1) female Board Director of seven (7) as at the reporting date.
Three (3) female Executive Committee Members of ten (10), including the
CEO, as at the reporting date.
The Company’s Recruitment, Selection and Appointment to Role policies
reflect our position on diversity.
All recruitment, internal and external, identifies that AVJennings is an Equal
Opportunity Employer.
Selection is based on merit and the recruitment process requires that the
Selection Advisory Committee (Interview Panel) comprise both genders.
External recruitment suppliers, where applicable, are requested to provide
a balanced short list.
During the reporting period, 32% of all new hires were female.
Diversity information is sought from employees when they commence
employment. It is provided on a voluntary basis and includes information
on disability, ethnic origin and proficiency in languages other than English.
The diversity statistics are based primarily on this data. During the reporting
period, all employees had the opportunity to review and update their profile.
Data collection is an ongoing process.
Data that is collected is reviewed and action taken as appropriate. During
the reporting period, with a focus on gender diversity, female participation
was reviewed across the different job families in the business, pay equity and
female attrition rates.
Further analysis, subject to data available, will provide a platform for ongoing
improvement in our broader equity and diversity policies.
2013 report submitted to EOWA was reviewed by the Board. During the
reporting period there was an improved ratio of women in Management and
Professional/ Technical level roles.
Women accounted for around 42% of employees in March 2013.
7. No Cultural Impediments
No impediments identified during reporting period.
KEY:
met or above target
on track to meet target
below target
As at 30 June 2013, women accounted for 43% of total current permanent employees and the proportion of women at various
levels of the Company was:
Level and Role
Non-executive Director 17%
Executive Team 30%
Company 43%
78 | AVJENNINGS LIMITED · ABN 44 004 327 771
shareholDer information
As at 1 October 2013
1. NUMBER OF SHAREHOLDERS AND DISTRIBUTION OF EQUITY SECURITIES
Australian
Securities
Exchange
Singapore
Exchange
Total
553
865
293
399
76
2,186
426
683
1,627
553
500
37
3,400
525
1,236
2,492
846
899
113
5,586
951
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
SCGlobal Developments Pte Ltd
Paradice Investment Management Pty Ltd
3. TWENTY LARGEST SHAREHOLDERS ON THE AUSTRALIAN REGISTER
Name
The Central Depository (Pte) Ltd
National Nominees Ltd
Citicorp Nominees Pty Ltd
JP Morgan Nominees Australia Ltd
HSBC Custody Nominees (Australia) Ltd
BNP Paribas Nominees Pty Ltd
John E Gill Operations Pty Ltd
AVJ Employee Share Plan Managers Pty Ltd
HSBC Custody Nominees (Australia) Ltd-NT Comnwlth Super Corp
Yoshiaki Murakami
John E Gill Trading Pty Ltd
Gillcorp Pty Limited
Citicorp Nominees Pty Limited
D R M Gill & J M Gill (Gill Super Fund A/c)
Luton Pty Ltd
Avoca Equities Pty Ltd
Di Iulio Homes Pty Ltd (Di Iulio Super Fund A/c)
Peter Summers
Eva Xiradis
Carlcorp Pty Ltd
Ordinary
Shares
192,318,030
32,104,387
%
50.03
8.35
Ordinary
Shares
%
227,552,566
59.19
33,593,442
16,315,321
16,212,030
15,163,767
5,762,351
5,459,927
4,640,581
4,384,465
4,040,849
4,039,100
3,733,346
2,411,562
1,617,858
1,610,000
1,572,065
1,228,700
1,140,785
1,000,000
823,152
8.74
4.24
4.22
3.94
1.50
1.42
1.21
1.14
1.05
1.05
0.97
0.63
0.42
0.42
0.41
0.32
0.30
0.26
0.21
Total
352,301,867
91.64
AVJENNINGS LIMITED · ANNUAL REPORT 2013 |
79
shareholDer information
As at 1 October 2013
4. TWENTY LARGEST SHAREHOLDERS ON THE SINGAPORE REGISTER
Name
UOB Nominees (2006) Pte Ltd
United Overseas Bank Nominees Pte Ltd
Trimount Pte Ltd
Oei Hong Leong Foundation Pte Ltd
DBS Nominees Pte Ltd
UOB Kay Hian Pte Ltd
Lim Chin Tiong
Tsang Sze Hang
Rowland Wong Kwok Ho
OCBC Nominees Singapore Private Ltd
Vesmith Investments Pte Ltd
Pansbury Investments Pte Ltd
Hexacon Construction Pte Ltd
Phillip Securities Pte Ltd
Mohamed Salleh S/o Kadir Mohideen Saibu Maricar
HSBC (Singapore) Nominees Pte Ltd
Ooi Kim Sew
Chng Bee Suan
Teo Chiang Long
Wee Kim Choo @ Elizabeth Sam
Total
Ordinary
Shares
179,235,872
12,213,254
1,659,940
1,462,112
1,402,979
1,297,345
1,000,720
837,396
738,833
737,042
634,876
496,160
368,480
352,921
338,144
280,353
280,000
257,320
250,648
209,349
%
46.62
3.18
0.43
0.38
0.36
0.34
0.26
0.22
0.19
0.19
0.17
0.13
0.10
0.09
0.09
0.07
0.07
0.07
0.07
0.05
204,053,744
53.08
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 384,423,851.
SHARE REGISTRY
Australia
Boardroom Pty Limited
Level 7, 207 Kent Street
Sydney NSW 2000
Telephone: 1300 737 760 (within Australia)
+61 2 9290 9600 (outside Australia)
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:
Garden Room 1
Crown Towers
8 Whiteman Street
Southbank VIC 3006
Friday, 22 November 2013 at 10.00am.
DIVIDENDS
No dividends were paid in the year under review.
80 | AVJENNINGS LIMITED · ABN 44 004 327 771
company particulars
DIRECTORS
Mr Simon Cheong
Mr Jerome Rowley
Mrs Elizabeth Sam
Mr Bobby Chin
Mr Teck Poh Lai
Mr Bruce Hayman
Mr Peter Summers
COMPANY SECRETARY
Mr Carl Thompson
PRINCIPAL REGISTERED OFFICE IN AUSTRALIA
Level 4, 108 Power Street
Hawthorn Vic 3122
Telephone +61 3 8888 4800
AUDITORS
Ernst & Young
680 George Street
Sydney NSW 2000
BANKERS
Australia and New Zealand Banking Group Ltd
HSBC Bank Australia Ltd
United Overseas Bank Limited
National Australia Bank Ltd
STOCK EXCHANGE LISTINGS
Australia
The Company is listed on:
The Australian Securities Exchange
Level 4, 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).