Housing matters.
Community matters.
Annual Report 2018
AVJennings Limited ABN 44 004 327 771
Contents
Chairman’s Report
FY18 Highlights
Chief Executive
Officer’s Report
Community Matters
Creating and Supporting
Communities
Property Portfolio
Project Pipeline
Directors’ Report
Consolidated Statement
of Comprehensive Income
Consolidated Statement
of Financial Position
Consolidated Statement
of Changes in Equity
Consolidated Statement
of Cash Flows
Notes to the Consolidated
Financial Statements
Directors’ Declaration
Independent Auditor’s
Report to the Members
of AVJennings Limited
Shareholder Information
Company Particulars
1
2
4
6
8
10
11
12
25
26
27
28
29
69
70
74
77
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 1
The continuing focus on delivering
traditional housing solutions in prime
markets, as affordably as possible,
maintains our exposure to the deepest
and most stable residential markets.
As at 30 June 2018, we have work in
progress of over 1,900 lots and sales
contracts covering more than 1,000
lots on hand, providing the Company
a solid platform heading into FY19.
Lastly, I would like to thank our
Directors for their invaluable
guidance; our employees for their
dedicated commitment throughout
the year; and our shareholders and
customers for their strong support.
Simon Cheong
Chairman
Chairman’s Report
Dear Fellow Shareholders,
On behalf of the Board of Directors, I am pleased to present our
2018 Annual Report.
This year, the Company recognized
revenue of $374.3 million and profit
before tax of $45.1 million, driven by
strong contribution by projects in New
South Wales. Though overall top-line
and bottom-line figures were lower
compared to FY17, the Company
continues to execute its strategy and
develop in the right direction with
revenue, earnings and dividends on
the uptrend. Over the past four years,
revenue and earnings per share have
increased at compounded annual
growth rates of 10.6% and 13.4%
respectively.
Gross profit margin and profit before
tax margin continue to hold well and
were relatively stable compared to
FY17 at 24.5% and 12.0% respectively.
Strong operating cashflows of
$47.9 million was recorded in FY18,
which allowed the Company to
reduce net debt from $164.1 million
to $130.7 million. Net gearing ratio
dropped to 20.4%, giving greater
financial capacity and flexibility
for future acquisitions.
The consistent financial performance
and strong net operating cash
flow provided the Board with the
confidence to declare a fully franked
final dividend of 3.0 cents per share,
taking total dividends declared for
the year to 5.0 cents per share, in line
with FY17.
The Dividend Reinvestment Plan
was reactivated this year to provide
shareholders additional flexibility
of choice while steadily growing the
Company’s capital base over time.
This will continually strengthen our
position to take advantage of any
opportunities that may emerge.
Our business continues to have
a strong underlying base with a
land bank of more than 9,300 lots
and we look to further grow this
base. Melbourne and Sydney have
been difficult markets in which to
acquire new sites in any volume but
the team continues to assess and
bid on opportunities. Over 880 lot
equivalents were acquired during
the year with notable acquisitions in
Kogarah and Huntley in New South
Wales, and another two greenfield
sites in Brisbane, Ripley and
Deebing Heights.
The geographic diversification of
the Company’s land holdings is
expected to be further enhanced by
the acquisition of a 580 lot, residential
land development site, 37km north of
Auckland’s Central Business District,
that received regulatory approval
after 30 June.
The fundamental drivers of demand
for residential property remain
positive with low interest rates and
inflationary expectations combined
with population growth and
shortages of detached dwellings,
townhouses and low-rise apartments
in Sydney, Melbourne and Auckland.
2 | AVJENNINGS LIMITED · ABN 44 004 327 771
FY18 Highlights
FINANCIAL SCALE
Revenue $374.3m, - 6.8%
PBT $45.1m, -11.7%
Strong net operating cash flow $47.9m (FY17 -$13.2m)
Cash receipts from customers +10.3% to $450.8m
STABLE BUSINESS PLATFORM
Good progress on major projects in Victoria
WIP pipeline of ~2K lots
Exciting NZ acquisition of 575 lots (Hall Farm)
Sales contracts in hand covering > 1,000 lots
Cobbitty Stage 6 to settle (~$6.1m PBT)
•
•
•
•
•
•
•
•
•
BALANCED APPROACH TO CAPITAL MANAGEMENT
• Total dividends maintained at 5 CPS fully franked
• Reduced net debt by -20.3% to $130.7m
• ~9.4k lots under control (~10k incl. Hall Farm)
FY18
FY17
% change
FY16
FY15
Revenue
$374.3m
$401.6m
(6.8)%
$421.9m
$317.9m
Statutory Profit before Tax
$45.1m
$51.0m
(11.7)%
$58.8m
$48.2m
Statutory Profit after Tax
$31.3m
$35.7m
(12.2)%
$40.9m
$34.4m
Gross Margins
24.5%
Inventory Provision Write Back (After tax)
$0.8m
24.0%
$3.5m
Net tangible assets (NTA)
$396.2m
$378.2m
NTA per share
$1.00
$0.99
EPS (cents per share)
Dividend fully franked (CPS)
8.1
5
9.3
5
0.5pp
(78.0)%
4.8%
1.8%
(12.7)%
0%
25.2%
$2.6m
26.8%
$2.6m
$361.1m
$334.5m
$0.95
$0.88
10.7
5
9
4
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 3
FY18 Highlights
Steady growth since FY14
Revenue ($M)
Earnings and dividend growth (CPS)
421.9
421.9
401.6
401.6
374.3
374.3
317.9
317.9
250.6
250.6
DPS
EPS
DPS
EPS
9
9
10.7
10.7
9.3
9.3
8.1
8.1
5
5
5
5
5
5
4.9
4.9
2
2
4
4
FY14
FY14
FY15
FY15
FY16
FY16
FY17
FY17
FY18
FY18
FY14
FY14
FY15
FY15
FY16
FY16
FY17
FY17
FY18
FY18
Revenue linear trend
Revenue linear trend
EPS linear trend
EPS linear trend
Work in progress (lots)
1,681
1,512
1,264
715
2,161
1,949
FY13
FY14
FY15
FY16
FY17
FY18
Settlement volumes by region (cash basis)
1,600
1,400
1,200
1,000
800
600
400
200
0
FY13
NSW
FY14
VIC
FY15
QLD
SA
FY16
NZ
FY17
FY18
NZ
SA
QLD
VIC
NSW
4 | AVJENNINGS LIMITED · ABN 44 004 327 771
Chief Executive Officer’s Report
The most significant of these are
both in Victoria.
Waterline, our large urban infill site in
Williamstown, is progressing well, with
the 12 dwelling “Lonsdale” townhouses
due to settle in the first half of FY19.
The prestigious “Gem” apartment
building will reach practical completion
early next year and is expected to
commence contributing revenue late
in the second half of FY19.
In Lyndarum North, we had 396
contracts on hand as at 30 June 2018
and settlement of these will begin to
flow in the first half of FY19.
In coming years, we will see significant
contributions from these projects and
other even more recent acquisitions
and they will provide future upward
momentum for the business into FY19
and beyond.
There have been other challenges
in our business which we have or
are addressing. South Australia has
had difficult market conditions but
we continue to improve our projects
so that they provide compelling
propositions for our customers.
Queensland has underperformed
this year and we are addressing
operational aspects of that part of
our business. It has a good project
base and we believe will provide much
stronger returns going forward. I know
the Queensland team are passionate
and committed to achieving this.
Overall, this part of our business is
operating at a reasonably mature
level. Had Stage 6 at Acadian Hills
been recognised, the result for FY18
would have been almost the same
as for FY17. It is expected similar
outcomes will be achieved from
these mature projects for the next
financial year, even allowing for
some softening in markets such as
Melbourne and Sydney.
The second part of our business
has been to advance newer projects
to the stage where they are
contributing to profit.
For AVJennings this is important as we
have a number of significant projects
that don’t replace existing projects but
add to them in a whole-of-business
sense. Other than in a minor way,
the results for FY18 don’t adequately
reflect the continued advancement of
relatively new projects which haven’t
formed part of our results in recent
years. It is when these projects are
added to our mature projects that we
will see further growth.
These new projects are also the part
of the business that can experience
the greatest delays due to planning
and other constraints. Much more
so than when you do get to site and
are under way with development.
Delays then tend to be more related
to weather and short term trade
availability issues.
It is disappointing some of these
projects did not contribute to the
FY18 results, however, they are now
very close to doing so and will most
certainly have a material impact on
the FY19 results and beyond.
During the year we continued to
have two parts to our business.
The first part related to projects
which have been mature and ongoing
and formed the basis for over four
years of strong growth. In the main,
these projects continued to see
favourable market conditions in our
larger operations, especially New
South Wales, which underpinned our
reported result for FY18.
This part of our business did have
some challenges and delays in
completing some stages resulted in
certain contracts not reaching the
point necessary for revenue and profit
to be recognised by 30 June. The
most material of these was Stage 6 at
Acadian Hills at Cobbitty, in Sydney,
the impact of which was a deferral of
some $6.1 million net profit before tax.
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 5
As part of our constant search
for improvement we looked at our
operational structure during the
year, which has led to the creation
of a Chief Operating Officer role.
We continue to look at other areas
to improve performance and
create new opportunities, including
innovation in the built form space
trialing new construction techniques
in order to continue to address the
affordability issue.
As our Chairman, Simon Cheong,
points out in his report, we remain
keen to continue to grow the business
and our balance sheet is in excellent
shape to provide capacity for
such growth.
For more than 85 years, AVJennings
has helped people build a brighter
future by creating communities they
feel a part of. I am always proud of the
commitment of the staff of AVJennings
to this and the way they support our
wider involvement in the community,
especially our long term partnership
with the Steve Waugh Foundation.
I thank them and our wonderful
business partners for their efforts
in the last year.
I would also like to thank our
Chairman, Simon Cheong, who
continues to demonstrate his support
and passion for AVJennings, and
my other fellow Directors.
Finally, I would like to thank you, our
shareholders, for your continued
interest and support of AVJennings.
Peter Summers
Chief Executive Officer
6 | AVJENNINGS LIMITED · ABN 44 004 327 771
Community Matters
Australia’s original
community builder is
officially recognised
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 7
Sir Albert Jennings was driven by the desire to
improve the way Australians live long before ‘lifestyle’
shows filled our screens.
AVJennings – both the man and
the company – have always
championed the principles of
community. These principles
are now recognised as central
to good property development.
So it’s fitting to see Sir
Albert’s contribution officially
acknowledged at the Property
Council of Australia Awards, where
he was recently inducted into the
Australian Property Hall of Fame.
Born in Melbourne in 1896,
Albert Jennings trained as a dentist
before switching careers to become
a real estate auctioneer. His work
gave him a clear insight into why
people chose to buy the homes
they did. Through the combined
power of better design, better
planning and better building,
he saw a gap in the market for
quality homes at a lower cost
than previously possible.
In 1932, in the depths of the Great
Depression and with almost one
in three people out of work, Albert
put his money where his principles
were. He mortgaged his family
home and formed the AVJennings
Construction Company. This
business would create new housing
projects and sell off-the-plan – a
strategy that became a hallmark
of his business. Where other home
builders often sold poorly- serviced
weatherboard houses, AVJennings
would match their prices – but
with larger brick houses, with
hot-water systems and already
connected to the sewer system.
By the 1960s, Albert and his
team had cornered the market in
appealing, affordable designs,
well-planned community
developments with display homes
which are common practice today.
Albert’s greatest legacy was
creating an innovation culture
(not that it was called so at the
time) that has since permeated
the entire property industry.
An excellent example of this came
in 1951, when AVJennings was
awarded a contract by the Federal
Government to build 1,850 homes
in Canberra within two years.
Facing labour shortages, Albert
enticed 150 German carpenters
and bricklayers to the nation’s
capital. Remember this is just six
years after the end of World War II.
He affectionately dubbed them
the ‘Jennings Germans’.
Many of his innovations are things
we now take for granted. Before
he introduced them, there were
no display homes, no off-the-
plan sales, no cul-de-sacs, no
new homes complete with fitted
wardrobes. He gave us all of this
and more.
Peter Summers, CEO of
AVJennings, says, “He was
passionate about R&D and
employed a whole department
of people focused on innovation,
long before it was an industry
buzzword.”
At the grand age of 73, Albert
became Sir Albert Jennings,
knighted for his services to the
property industry. In true AV style,
he famously joked with staff that
if any of them called him Sir he
would fine them ‘two bob’.
Sir Albert stepped down from his
company in 1972 but remained
active within the industry. For
21 years after his retirement,
Sir Albert would drive to the
Jennings headquarters in the
Melbourne suburb of Mulgrave
every Wednesday for lunch and
a chat with his staff.
Peter Summers says it was an
honour to represent AVJennings
at this year’s induction ceremony,
saying Sir Albert “left a giant
personal and professional
footprint”. Indeed.
8 | AVJENNINGS LIMITED · ABN 44 004 327 771
Committed to Creating
& Supporting Communities
It is difficult to overstate the
importance of community to
our everyday lives. No matter
how independent we are as
individuals, we want to belong.
We need to feel included. The
author Frances Moore Lappé wrote
that community is vital to our
survival. “It isn’t a luxury, a nice
thing; community is essential
to our wellbeing.”
Indeed, researchers have
discovered that being an active
contributor to the community,
particularly as a volunteer, has a
positive influence on wellbeing. In
other words, when we help others
we feel good about ourselves.
AVJennings believes in being
an active contributor to the
community and we do this in a
variety of ways, some of them
unstructured, such as allowing
individual staff members who
volunteer for organisations like the
S.E.S. (State Emergency Service) to
take time off; other staff members
provide their expertise pro bono
to community organisations such
as Rotary; and both the Company
as a whole and its individual
employees, raise funds for charity
through a variety of activities.
One of the most effective ways
we contribute to the community
is through sponsorship. There
is no denying there is often a
commercial benefit to sponsorship
such as promoting the AVJennings
brand. However, what is equally
important to us is partnering with
organisations who themselves
make a positive contribution to
the community or provide unique
opportunities for our staff
(and sometimes their families) to
engage in personal development.
highest level and girls deserve
to have female role models in
professional sport.
Many of the organisations and
individuals we support are
low profile, but they make a
significant contribution to their
local community such as Puka
Up (mental health) and the
Williamstown Literary Festival.
Other organisations have a
higher profile such as:
• Steve Waugh Foundation
• The Captain’s Ride
• Melbourne Boomers (WNBL)
•
Queensland Firebirds
(Super Netball)
• St Kilda Football Club (AFL)
In 2012, AVJennings became the
founding corporate partner of the
Steve Waugh Foundation which
supports children, young adults
and their families living with a
rare disease who would otherwise
not receive help. Each year the
company and its staff participate
in a range of fundraising activities
for the Foundation, including
the sale of a home in the ‘Renee’
series. Our generous suppliers
pitch in with labour and materials
to construct a new home. This year
two commercial cleaners bought
the ‘Renee 5’ and one of the
reasons they did is because net
proceeds go to the Steve Waugh
Foundation.
We sponsor two professional
women’s sports teams, the
Boomers and the Firebirds,
because we believe in aspiration.
Women should have an equal
opportunity to play sport at the
AVJennings also partners with the
St Kilda Football Club. The Saints
have led the way in promoting
the value of inclusion, a sense of
belonging that is the fabric of a
vibrant community.
We are proud to have three
ambassadors who put a ‘human
face’ to our sponsorships and
more importantly share our values.
Former Australian cricket captain
Steve Waugh has been an
ambassador for our company for
eight years and is one of the most
respected figures in the country,
not only for his success as a
cricketer but for the charitable
work he does in India and Australia.
Another national team captain,
Laura Geitz, who retired from elite
netball this year joined AVJennings
as a corporate ambassador in
2017. As a young mother, Laura
is passionate about promoting
an active and healthy lifestyle,
particularly to other mums, and
she is a wonderful role model to
girls and young women.
And St Kilda key forward Josh
Bruce is not only a successful AFL
player and young father but has
a strong interest in housing. He’s
doing a carpentry apprenticeship
through Trade Industry Victoria.
AVJennings is a community
developer. We do that by creating
great places to live but also
by partnering with others who
improve our community through
inclusion, diversity and belonging.
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 9
Proud sponsors of
10 | AVJENNINGS LIMITED · ABN 44 004 327 771
Property Portfolio
Number of lots at
30 June 2018
9,360
Qld
2,231
WA
239
SA
1,898
NSW
2,146
VIC
2,690
NZ
156
Queensland
MACKAY
New South
Wales
SANDY BEACH
CALOUNDRA
BRIDGEMAN DOWNS
KENMORE
BRISBANE
ROCHEDALE
LEICHHARDT
RIPLEY & DEEBING HEIGHTS
JIMBOOMBA
BETHANIA
WARNERVALE
HAMLYN TERRACE
CENTRAL COAST
KOGARAH
SYDNEY
COBBITTY
SPRING FARM
ELDERSLIE
COOMERA
HUNTLEY
WOLLONGONG
Victoria
WOLLERT
DOREEN
WILLIAMSTOWN
MELBOURNE
PORTARLINGTON
South
Australia
Western
Australia
New
Zealand
PENFIELD
ST CLAIR
ADELAIDE
MURRAY BRIDGE
GOOLWA NORTH
VIVEASH
SUBIACO
PERTH
HOBSONVILLE POINT
AUCKLAND
FERNDALE
KARDINYA
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 11
Project Pipeline
As at 30 June 2018
Project Name
Argyle, Elderslie
Magnolia, Hamlyn Terrace
Evergreen, Spring Farm (South)
Evergreen, Spring Farm (East)
Seacrest, Sandy Beach
Arcadian Hills, Cobbitty Stages 1–8
Arcadian Hills, Cobbitty Stages 9&10
Cobbitty Road, Cobbitty
Warnervale
Evergreen, Spring Farm PDA
Kogarah (apartment project)
Hayes Lane, Huntley
Creekwood, Caloundra
Glenrowan, Mackay
Essington Rise, Leichhardt
Parkside, Bethania
Enclave, Bridgeman Downs
Kersley Lane, Kenmore
Anise, Bridgeman Downs
Riverton, Jimboomba
S
E
L
A
W
H
T
U
O
S
W
E
N
D
N
A
L
S
N
E
E
U
Q
Deebing Springs, Deebing Heights
Rochedale
Ripley 1
Z
N
Hobsonville Point, Buckley B
I
A
R
O
T
C
V
I
Lyndarum, Wollert
Lyndarum North, Wollert JV
Arlington Rise, Portarlington
Hazelcroft, Doreen
Waterline, Williamstown
A Pathways, Murray Bridge
H
T
U
O
S
I
L
A
R
T
S
U
A
River Breeze, Goolwa North
St Clair
Eyre at Penfield
N
R
E
T
S
E
W
A
I
L
A
R
T
S
U
A
Indigo China Green, Subiaco Fine China Precinct
Viridian China Green, Subiaco Fine China Precinct
The Heights Kardinya
Viveash
Parkview, Ferndale
Remaining
# of Lots
Pre
FY 2019
FY 2020
FY 2021
FY 2022
Post
164
62
91
453
79
201
67
57
595
79
67
231
80
177
6
94
11
19
63
1196
210
81
294
156
95
2129
50
1
415
53
80
292
1473
83
14
94
16
32
TOTAL NO. OF REMAINING LOTS
9,360*
*excludes 11 remnant lots
12 | AVJENNINGS LIMITED · ABN 44 004 327 771
The Directors of AVJennings Limited present their report together with the Financial Report of the Group (referred to hereafter
as “AVJennings” or “Group”) and the Auditor’s Report thereon for the year ended 30 June 2018. The Group comprises
AVJennings Limited (“Company” or “Parent”) and its controlled entities.
DIRECTORS
The Directors of AVJennings Limited during the financial year and up until the date of this Report are as follows. Directors were
in office for the entire period unless otherwise stated.
S Cheong
RJ Rowley
Non-Executive Chairman
Non-Executive Deputy Chairman
PK Summers
Managing Director and Chief Executive Officer
E Sam
B Chin
Non-Executive Director
Non-Executive Director
BG Hayman
Non-Executive Director
TP Lai
BL Tan
Non-Executive Director
Non-Executive Director
PRINCIPAL ACTIVITY
The principal activity of the Group during the year was Residential Development.
OPERATING RESULTS
The consolidated profit after tax for the financial year was $31.3 million (2017: $35.7 million).
DIVIDENDS
Dividends paid to members during the financial year were as follows:
Cash dividends declared and paid
2016 final dividend of 3.5 cents per share,
paid 23 September 2016. Fully franked @ 30% tax
2017 interim dividend of 1.5 cents per share,
paid 7 April 2017. Fully franked @ 30% tax
2017 final dividend of 3.5 cents per share,
paid 19 September 2017. Fully franked @ 30% tax
2018 interim dividend of 2.0 cents per share,
paid 19 April 2018. Fully franked @ 30% tax
2018
$’000
2017
$’000
–
–
13,455
7,688
13,455
5,766
–
–
Total cash dividends declared and paid
21,143
19,221
The Dividend Reinvestment Plan (DRP) was activated for the 2018 interim dividend. Details of shares issued under the DRP are
disclosed in note 14(a).
Subsequent to the end of the financial year, the Directors have declared a fully franked final dividend of 3.0 cents per share
to be paid on 11 October 2018 (2017: 3.5 cents). The DRP remains active. Any DRP shortfall for the final dividend will not be
underwritten.
Directors’ Report AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 13
OPERATING AND FINANCIAL REVIEW
Balance Sheet and Land Holdings
Controlled land inventory fell moderately to 9,373 lots
(30 June 2017: 9,654 lots) as settlements outweighed
acquisitions, which included an apartment site in Kogarah,
New South Wales (67 lot equivalents) and land projects
at Huntley, New South Wales (231 lot equivalents) and in
Queensland at Ripley (294 lot equivalents), Deebing Heights
(210 lot equivalents) and Rochedale (81 lot equivalents).
The geographic diversification of the Company’s land
holdings will be further enhanced by the pending acquisition
of a 575 lot, residential land development site, 35km north of
Auckland’s CBD. The acquisition remains subject to regulatory
approval however, the approval application is at an advanced
stage and settlement is expected in October/November 2018.
Strong cash from operations has assisted a reduction in net
debt to $130.7 million, down from $164.1 million at 30 June
2017. As such, gearing remains low with net debt to total
assets of only 20% (30 June 2017: 23%) and the Company
extended its Club banking facilities by a further 12 months to
30 September 2020.
Outlook
The fundamental drivers of demand for residential property
remain positive with low interest rate and inflationary
expectations combined with population growth and shortages
of detached dwellings, townhouses and low-rise apartments in
Sydney, Melbourne and Auckland.
Activity in key residential markets has been very high in recent
years, placing significant pressure on development and
construction processes. The Company believes that, as some
markets soften, it will benefit as activity eventually returns to
levels that are more sustainable over the longer term.
The Company continues to be confident about the future as
its continuing focus on delivering traditional housing solutions
in prime markets as affordably as possible exposes it to the
deepest and most stable residential markets.
In FY2019, the Company expects to benefit from continued
strength in the Sydney market and settlements from the
Lyndarum North and Waterline projects in Victoria in
particular.
The Company expects positive revenue and earnings
momentum given current levels of production, strong pre-sales
volumes and continued progress of key projects.
Financial Results
For the year ended 30 June 2018, the Company reported
a profit before tax of $45.1 million. Profit after tax was
$31.3 million (30 June 2017: $35.7 million). When adjusted
for the impact of the writeback in the inventory loss
provision of $1.1 million before tax (FY2017: $5.1 million),
the underlying profit before and after tax declined
approximately 4% and 5% respectively.
On 6 August 2018, the Company provided a market
update in relation to its year end result. Determination of
the result involved resolution of the timing, and not the
certainty, of revenue recognition of a stage at Arcadian Hills,
Cobbitty, New South Wales which had a PBT contribution
of approximately $6.1 million. The issues involved were
complicated and required time to review. After considering
accounting and other requirements, a decision was made to
exclude the item from the FY2018 result.
Business Overview
The FY2018 result has been primarily driven by projects that
have been in production over recent years. The Company
expects that contributions from more recent acquisitions
will provide future upward momentum for the business into
FY2019.
A significant contributor will be Lyndarum North (joint
venture) at Wollert, Melbourne. A small amount of revenue and
profit was booked from this project very late in FY2018. This
was limited by the Company not being able to recoup lost
time which mainly resulted from previous planning delays.
At 30 June 2018, there were 396 contracts on hand for this
project which have not been realised as FY2018 revenue or
profit. Settlements on these lots are due to commence in the
first half of FY2019 with approximately 361 lots of the pre-
sales due to settle in FY2019 (AVJ share is 49%).
Sales of the GEM apartments at Waterline continue at a solid
rate with 63% of the apartments sold at 30 June, including
the first penthouse. Construction for the GEM apartments is
progressing satisfactorily.
The final new project of scale that is currently under
construction is Riverton at Jimboomba in Brisbane.
Earthworks for stage 1 have commenced and some presales
achieved. However, significant advancement of the project is
not expected until the back end of FY2019.
Directors declared a fully franked final dividend of 3.0 cents
per share be paid in October 2018, taking total dividends
declared for FY2018 to 5.0 cents per share, in line with the
prior year.
The Company’s Directors have determined that the Dividend
Reinvestment Plan (DRP) will apply to the final dividend.
Shares issued under the DRP will attract a 2.5% discount to
the weighted average market price over the 5 trading days
from the ex-dividend date. The DRP will not be underwritten.
Directors’ Report 14 | AVJENNINGS LIMITED · ABN 44 004 327 771
SIGNIFICANT EVENTS AFTER THE BALANCE
SHEET DATE
No matter or circumstance has arisen since 30 June 2018
that has significantly affected, or may significantly affect:
a) the Group’s operations in future financial years; or
b) the results of those operations in future financial years; or
c) the Group’s state of affairs in future financial years.
FUTURE DEVELOPMENTS, PROSPECTS AND
BUSINESS STRATEGIES
The prospects and business strategies of the Group are
discussed in the operating and financial review of this Report.
Jerome Rowley SF Fin, FAICD
Director since 22 March 2007. Mr Rowley has been a career
banker since the early 1970s with Citigroup, Morgan Grenfell
and ABN Amro. From 1992 until 2002, he served as Managing
Director and CEO of ABN Amro Australia and Head of
Relationship Management and Structured Finance for ABN
Amro, Asia Pacific. He has been active in both wholesale and
investment banking domestically and internationally. During
his career, Mr Rowley devoted considerable effort towards
the recognition, understanding and management of risk as a
means of profit optimization. Of particular significance was
his involvement in advising and funding including debt, equity
and hybrids, of infrastructure projects in both Australia and
Asia Pacific. Resident of Sydney.
ENVIRONMENTAL REGULATION
Responsibilities:
The Group’s operations are subject to various environmental
regulations under both Commonwealth and State legislation,
particularly in relation to its property development activities.
The Group’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
requirements.
To the best of the Directors’ knowledge, property development
activities have and are being undertaken in compliance with
these requirements.
INFORMATION ON THE DIRECTORS
Simon Cheong B.Civ.Eng. MBA
Director since 20 September 2001. Mr Cheong has over
35 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 twice elected President of the prestigious Real Estate
Developers’ Association of Singapore (REDAS) for 2 terms
from 2007 until 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. On 1 June 2017,
Mr Cheong was appointed as a non-executive Director of
Singapore Airlines Limited. 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:
Singapore Airlines Limited from 1 June 2017.
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.
Peter K Summers B.Ec. CA
Director since 27 August 1998. Mr Summers is a Chartered
Accountant and has been employed with the Company
and its related corporations since 1984, when he joined
the Jack Chia Australia Ltd 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.
Directorships held in other listed entities:
None.
Directors’ Report AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 15
INFORMATION ON THE DIRECTORS (continued)
Teck Poh Lai B.A. Hons. (Economics)
Bobby Chin CA (ICAEW) B.Acc.
Director since 18 October 2005. Mr Chin is currently the
Chairman of NTUC Fairprice Co-operative Limited, NTUC
Fairprice Foundation Limited and the Housing & Development
Board. He is the Deputy Chairman of NTUC Enterprise
Co-operative Limited and a Director of Singapore Labour
Foundation. He serves as 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 an Associate Member of the Institute
of Chartered Accountants in England and Wales. Resident of
Singapore.
Responsibilities:
Non-Executive Director, Chairman of Audit Committee,
Member of Nominations Committee (effective 14 August
2018).
Directorships held in other listed entities:
Yeo Hiap Seng Limited, since 15 May 2006.
Ho Bee Investment Limited, since 29 November 2006.
Singapore Telecommunications Limited, since 1 May 2012.
Other Directorships:
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, Member of
Investments Committee.
Directorships held in other listed entities:
PT Bank OCBC NISP Tbk (Commissioner) since
4 September 2008.
Temasek Holdings (Private) Limited, since 10 June 2014.
Oversea-Chinese Banking Corporation since 1 June 2010.
Bruce G Hayman
Director since 18 October 2005. Mr Hayman has many
years commercial management experience with over 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 now known as AUSTCHAM Singapore.
He has also served as CEO of the Australian Rugby Union
and as Chairman of the Board of the Rugby Club Ltd. He is
Chairman of the Ella Foundation and a Director of Diabetes
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.
Boon Leong Tan DipUrbVal (Auckland University, NZ)
Director since 9 June 2017. Mr Tan has over 36 years of
experience in real estate investment and asset management.
He is a non-executive Director of SC Global Developments Pte
Ltd, the Company’s major shareholder.
Mr Tan last held the position of Group Chief Operating
Officer cum Chief Executive Officer (Singapore Investments)
in Mapletree Investments Pte Ltd, a real estate company
wholly-owned by Temasek Holdings (Private) Limited. Prior to
his career in Mapletree Investments, Mr Tan served in Temasek
Holdings (Private) Limited from 1995 to 2003 and held the
position of Managing Director (Strategic Investments). His
portfolio included Temasek Holdings’ investments in real
estate in Asia and Australia. His eight year career in Temasek
Holdings included stints in venture capital investments in
the IT sector, infrastructure investments in the energy and
transportation sectors, and investments in financial services.
Mr Tan had also served in the Inland Revenue Authority of
Singapore (IRAS) from 1975 to 1995 where he last held the
position of Tax Director in the Superscale grade. Resident of
Singapore.
Responsibilities:
Directorships held in other listed entities:
Non-Executive Director, Member of Investments Committee.
None.
Directorships held in other listed entities:
None.
Directors’ Report 16 | AVJENNINGS LIMITED · ABN 44 004 327 771
INFORMATION ON THE COMPANY SECRETARY
Carl D Thompson LLB B. Comm
Company Secretary since 12 January 2009. Mr Thompson
previously held the company secretary and general counsel
role at Downer EDI Limited. Prior to that he was a partner at
national law firm Corrs Chambers Westgarth, practising in
corporate and commercial work. Resident of Melbourne.
REMUNERATION REPORT (Audited)
This Remuneration Report is provided in accordance with the
requirements of the Corporations Act 2001 (the Act) and has
been audited as required by section 308(3C) of the Act.
1. Key Management Personnel (KMP) defined
The name and position of each KMP whose remuneration is
disclosed in this Report are set out below:
(i)
Directors
S Cheong
RJ Rowley
PK Summers
Non-Executive Chairman
Non-Executive Deputy Chairman
Managing Director and Chief
Executive Officer
E Sam
B Chin
Non-Executive Director
Non-Executive Director
BG Hayman
Non-Executive Director
TP Lai
BL Tan
Non-Executive Director
Non-Executive Director
(ii)
Executives
CD Thompson
L Mahaffy
SC Orlandi (1)
L Hunt
Company Secretary/
General Counsel
Chief Financial Officer
Chief Operating Officer
General Manager,
Human Resources
2.3 Non-Executive Director (NED) Remuneration
Arrangements
At the Annual General Meeting (AGM) in the year 2000,
shareholders approved a maximum annual aggregate fee
pool of $400,000 for NEDs. The allocation to individual
NEDs is determined after considering factors such as time
commitment, the size and scale of the Company’s operations,
skill sets, participation in committee work, in particular
chairmanship of committees and fees paid to directors of
comparable companies. NEDs do not receive any retirement
benefits or performance-based remuneration.
Three NEDs, Mr S Cheong, Mrs E Sam and Mr BL Tan do not
receive fees. However, AVJennings pays a consulting fee to the
Ultimate Parent Entity, SC Global Developments Pte Ltd. This
consulting fee is not included in the NEDs fee pool. The fees
are paid pursuant to a consultancy and advisory agreement
for the provision of the following:
• Services of at least two directors on the Board;
• Assistance in sourcing and facilitating financial and
banking requirements particularly from Asian- based and
other institutions;
• Assistance in secretarial and administrative matters in
connection with the Company’s Singapore listing;
• Sourcing and facilitating business, commercial and
investment opportunities; and
• Ancillary advice.
The appropriateness of the agreement and the
reasonableness of the fees is assessed annually by the
Australian-based independent NEDs taking into account
the actual services provided, comparable market data for
similar services, the benefits to the Company and the likely
cost of replacement of the services provided. This review has
been undertaken annually over the past few years and the
Australian-based NEDs have, on each occasion, concluded
that the fee is appropriate in all the circumstances. The
annual fees payable are $600,000 and have been fixed at
this level for over ten years. The agreement may be terminated
by either party giving six months’ notice or by the Company
on 30 days’ notice for cause.
(1)
Appointed Chief Operating Officer on 14 August 2018. Prior to this,
Mr Orlandi was Chief Strategy Officer.
The remuneration of NEDs is detailed on page 21.
2. Remuneration Framework
2.1 Remuneration Governance
The Board has established a Remuneration Committee which
comprises four Non-Executive Directors and is responsible for
determining and reviewing remuneration arrangements for
KMP and other senior management personnel.
The Committee is responsible for providing a remuneration
structure that attracts, retains and motivates staff, which is
aligned with shareholder interests and addresses market and
other stakeholder views.
2.2 External Advisers
No remuneration consultant made any remuneration
recommendation as defined in Section 9B of the Corporations
Act 2001 during the year ended 30 June 2018.
2.4. Executive Remuneration Arrangements
Executive remuneration includes a mix of fixed and variable
remuneration. Variable remuneration includes short term
incentives, long term incentives and retention components.
i) Fixed Remuneration
Fixed Remuneration is represented by Total Employment
Cost (TEC) which comprises base remuneration and
superannuation contributions.
TEC is reviewed annually or on promotion/appointment to the
role. TEC is benchmarked against market data for comparable
roles in the market. The Company sets TEC based on relevant
market analysis, the scope and nature of the role and the
individual’s performance, skills and responsibilities.
The fixed component of remuneration of other KMP’s is
detailed on page 22.
Directors’ Report AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 17
REMUNERATION REPORT (Audited) (continued)
2.4. Executive Remuneration Arrangements (continued)
ii) Variable Remuneration
A) Short Term Incentive (STI)
Executives participate in a STI plan which assesses achievement against Key Performance Measures (KPM). Each executive
has KPMs that are aligned to company, business unit and individual performance. An STI payment is awarded to the extent
performance is achieved against the KPMs set at the beginning of the financial year, as appropriate, and with regards to
relevant business unit and company performance.
STI awards for the executive team in the 2018 financial year were based on the scorecard measures and weightings disclosed
below. These targets were set by the Remuneration Committee and align with the Group’s strategic and business objectives.
They are reviewed annually.
The CEO has a target STI opportunity of 35% of TEC and other Executives have a STI opportunity of 17% to 30% of TEC.
The variable “at risk” component of executive remuneration ensures that a proportion of remuneration varies with performance
(both of the individual and, as appropriate, the business unit and the Company as a whole).
Allocation of Overall Performance Incentive between Components (shown as % of TEC)
Position
CEO
Senior Executives
State General Managers
Total At Risk (%)
STI (%)
LTI (%)
Retention (%)
100
33
50
35
17
30
40
8
10
25
8
10
The proportions of STI, LTI and retention components take into account:
• Market practice;
•
•
The objectives that the Board seeks to achieve and the behaviours which support that outcome;
The desirability of Senior Executives having a significant equity interest in the Company so as to better align their interest
with shareholders;
The desire for Senior Executives to receive equity as a proportion of remuneration; and
The service period before Executives can receive equity rewards.
•
•
The table below provides an overview of the STI against key financial and non-financial performance measures.
Financial and Business Performance
Underlying Profit
Performance
• Group profit before tax.
• Return on NFE (Net Funds Employed).
• Cost to income ratio.
• Appropriate and efficient capital management.
• Alignment of priorities and allocation of resources.
• Market conditions, in particular performance in the
Business
Performance
prevailing market.
• Implementation of Company strategy and improvement
in underlying health of the Company.
• Increase in the Group’s market share of residential
CEO
Senior
Executives
State
General
Managers
70%
30% to 40%
50%
Non-Financial
Customer and
Stakeholder
Performance
People
Safety and
Environment
property sector.
• Risk management.
• Customer Advocacy.
• Employee retention and engagement.
• Leadership.
• Providing a safe work environment.
• Minimise the impact of our activities on the environment.
30%
60% to 70%
50%
Directors’ Report 18 | AVJENNINGS LIMITED · ABN 44 004 327 771
REMUNERATION REPORT (Audited) (continued)
2.4. Executive Remuneration Arrangements (continued)
The Remuneration Committee determines the STI to be paid
based on an assessment of the extent to which the KPMs
are met. The STI payment is made within two months of the
financial year end. The Committee has the discretion to
adjust STIs upwards or downwards in light of unexpected
circumstances or unintended consequences.
Based on achievements of the Group in the 2018 financial
year and performance against individual KPMs, the
Remuneration Committee determined that Executives
achieved between 40% and 100% of their target opportunity
(average 84%). In making this assessment, the Committee
considered the following factors:
• Performance in implementing Company strategy.
• Performance in the prevailing market.
•
• Performance against individual KPMs.
The financial result.
B) Long Term Incentive (LTI)
LTI awards are only made to Executives who are in a position
to have an impact on the Group’s performance and the
creation of shareholder value over the longer term.
LTI remuneration is provided by the Issue of Rights and
includes a performance and a retention component. The
use of Rights as an incentive reduces the upfront cash
requirements of the Company (as shares do not need to
be acquired for allocations). Participants do not receive
dividends on Rights (as distinct from shares).
LTI and Retention
Retention Rights are granted in three equal tranches which
vest in each of the three succeeding years following the year
of grant.
The operation of the EPS, ROE and Retention hurdles are set
out below.
AVJennings’ EPS growth
rate over the three year
performance period
< 5%
5%
5% –10%
>=10%
Percentage of rights
vesting
Nil
50% of the allocation
for the hurdle
Pro-rata between
50% and 100%
100% of the allocation
for the hurdle
AVJennings’ ROE over the three
year performance period
Percentage of rights
vesting
<12%
12%
15%
>=18%
Nil
50% of the allocation
for the hurdle
75% of the allocation
for the hurdle
100% (Straight line
interpolation between
12% and 18%)
Rights have been granted to KMP as detailed in the table on
page 19.
The delayed May 2015 Grant was made for the FY15 year
(with performance conditions testing in September 2018).
The September 2015 Grant was made for the FY16 year
(with performance conditions testing in September 2018).
The September 2016 Grant was made for the FY17 year
(with performance conditions testing in September 2019).
Retention component
– years of service
Percentage of rights
vesting
The September 2017 Grant was made for the FY18 year
(with performance conditions testing in September 2020).
The fair value of the Rights at the date of the Grant is
determined by the Plan manager using an appropriate
valuation model. The fair value is expensed over the period in
which the performance and/or service conditions are fulfilled
with a corresponding increase in share-based payment
reserve in equity. The cumulative expense recognised for
equity-settled transactions at each reporting date until the
vesting date reflects the extent to which the vesting period has
expired and the Group’s best estimate of the number of equity
instruments that will ultimately vest. The expense or credit
in the Consolidated Statement of Comprehensive Income
represents the movement in cumulative expense recognised
between the beginning and end of that period.
one year
two years
three years
LTI and performance
33.33%
33.33%
33.34%
Up to 50% of the Performance Rights granted vest depending
on AVJennings’ average growth rate in Earnings Per Share
(EPS) over the three financial years for performance
comparison.
Up to 50% of the Performance Rights granted vest depending
on AVJennings’ Return on Equity (ROE) over the three
financial years for performance comparison. The Return on
Equity (ROE) component of the Performance Rights uses
market capitalisation as a proxy for equity.
The performance conditions are tested at the end of the three-
year measurement period. The service rights are split into
three tranches that progressively vest each year subject to
satisfaction of the service condition. The CEO’s participation
was determined as 40% (Performance Rights) and 25%
(Service Rights) of TEC respectively.
Directors’ Report
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 19
REMUNERATION REPORT (Audited) (continued)
2.4. Executive Remuneration Arrangements (continued)
The following is the status of Rights granted to KMP under the FY15 and subsequent year LTI Plans:
Year of
Grant
Fair Value at
grant date
Rights at
beginning of
the year
Rights
granted
FY15
FY16
FY17
FY18
FY15
FY16
FY17
FY18
FY15
FY16
FY17
FY18
FY15
FY16
FY17
FY18
FY15
FY16
FY17
FY18
$386,528
$341,129
$372,970
$384,170
$51,035
$59,904
$65,649
$67,621
$46,660
$54,769
$60,022
$61,825
$41,301
$48,479
$53,129
$54,725
$31,538
$37,021
$40,571
$41,789
Rights
vested
(82,654)
(78,997)
(87,309)
–
–
–
636,504
–
–
–
–
(14,186)
(18,077)
(19,978)
499,760
485,872
721,355
–
–
76,267
125,641
–
110,981
–
53,874
69,729
114,872
–
–
–
(12,969)
(16,527)
(18,266)
–
101,469
–
47,686
61,721
101,680
–
36,414
47,133
77,646
–
–
–
–
89,816
–
–
–
(11,479)
(14,629)
(16,168)
–
(8,766)
(11,172)
(12,347)
68,586
–
Rights at end
of the year
417,106
406,875
634,046
636,504
44,740
58,190
105,663
110,981
40,905
53,202
96,606
101,469
36,207
47,092
85,512
89,816
27,648
35,961
65,299
68,586
KMP
PK Summers
PK Summers
PK Summers
PK Summers
CD Thompson
CD Thompson
CD Thompson
CD Thompson
L Mahaffy
L Mahaffy
L Mahaffy
L Mahaffy
SC Orlandi
SC Orlandi
SC Orlandi
SC Orlandi
L Hunt
L Hunt
L Hunt
L Hunt
Total
$2,300,835
2,578,576
1,007,356
(423,524)
3,162,408
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 securities.
3. Group Performance
The table below shows the Group’s earnings performance as well as the movement in the Group’s Earnings per Share (EPS),
Total Shareholder Return (TSR) and Market Capitalisation over the last 5 years.
Financial
Report
Date
30 June 2014
30 June 2015
30 June 2016
30 June 2017
30 June 2018
Profit
After Tax
$’000
18,782
34,385
40,912
35,717
31,347
Basic
EPS
Cents
4.94
9.03
10.71
9.31
8.13
TSR*
Cents
13.0
10.5
(4.0)
15.0
10.0
Market
Capitalisation
$’000
Return on Market
Capitalisation
%
216,715
245,694
213,968
253,164
278,074
8.67
14.00
19.12
14.11
11.27
* TSR is the aggregate of the movement in the share price and dividends paid per share during the year ended 30 June.
Directors’ Report 20 | AVJENNINGS LIMITED · ABN 44 004 327 771
REMUNERATION REPORT (Audited) (continued)
5. Remuneration of KMP
4. Employment Contracts
i) Chief Executive Officer
Mr Summers’ employment contract 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 22.
ii) Other Executives
The other Executives are full time permanent employees with
employment contracts. The employment contracts do not
have termination dates or termination payments. However,
they specify a notice period of three months.
Details of the nature and amount of each element of
remuneration of Directors and Executives are set out in the
tables on pages 21 and 22. 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.
7. Shareholdings of KMP
The number of shares in the Company held during the financial year by each KMP of the Group, including their related parties,
are set out below.
Opening
Balance
Vested as
Remuneration
On market
Purchase/
(Disposal)
Other (2)
Closing
Balance
For the year ended 30 June 2018
Directors
S Cheong
E Sam
PK Summers
RJ Rowley
Executives
CD Thompson
L Mahaffy
SC Orlandi
L Hunt
203,818,030
209,349
3,920,188
252,000
1,372,557
182,447
367,431
239,075
–
–
248,960
–
52,241
47,762
42,276
32,285
–
–
–
–
5,568,796
5,719
31,168
6,502
209,386,826
215,068
4,200,316
258,502
–
(100,713)
–
–
13,661
–
3,916
1,256
1,438,459
129,496
413,623
272,616
Total
210,361,077
423,524
(100,713)
5,631,018
216,314,906
For the year ended 30 June 2017
Directors
S Cheong
E Sam
PK Summers
RJ Rowley
D Tsang (1)
Executives
CD Thompson
L Mahaffy
SC Orlandi
L Hunt
192,318,030
209,349
3,119,775
252,000
837,396
1,227,106
49,463
249,720
149,186
–
–
800,413
–
–
145,451
132,984
117,711
89,889
11,500,000
–
–
–
–
–
–
–
–
(837,396)
203,818,030
209,349
3,920,188
252,000
–
–
–
–
–
–
–
–
–
1,372,557
182,447
367,431
239,075
Total
(1) Resigned 9 June 2017.
198,412,025
1,286,448
11,500,000
(837,396)
210,361,077
(2) Includes shares acquired under the Dividend Reinvestment Plan. Refer to note 14.
Directors’ Report AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 21
REMUNERATION REPORT (Audited) (continued)
8. Remuneration Tables
i) Non-Executive Directors
S Cheong (1)
RJ Rowley
E Sam (1)
B Chin
BG Hayman
TP Lai
BL Tan (1)
Total
Total
Year
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
Short-Term
Fees
$
Post Employment
Superannuation(2)
$
–
–
77,626
58,219
–
–
60,000
60,000
45,662
45,662
50,000
50,000
–
–
233,288
213,881
–
–
7,374
26,781
–
–
–
–
4,338
4,338
–
–
–
–
11,712
31,119
Total
$
–
–
85,000
85,000
–
–
60,000
60,000
50,000
50,000
50,000
50,000
–
–
245,000
245,000
(1)
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.
(2) Payments to Defined Contribution Plans consist of Superannuation Guarantee Contribution payments as well as employee voluntary contributions.
(a)
Directors are also reimbursed for airfares (other than the international airfares for those Directors referred to in (1) above), and other expenses relating
to the provision of their services.
Directors’ Report 22 | AVJENNINGS LIMITED · ABN 44 004 327 771
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Directors’ Report
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 23
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
Held
5
5
5
5
5
5
5
5
Attended
5
5
5
5
5
5
5
5
Held
–
3
–
–
3
–
3
–
Attended
–
3
–
–
3
–
3
–
Meetings of Committees
Remuneration
Held
1
–
–
1
–
1
1
–
Attended
1
–
–
1
–
1
1
–
Nominations
Held
1
1
–
1
–
1
–
–
Attended
1
1
–
1
–
1
–
–
Risk Management
Attended
–
2
–
–
–
2
–
–
Held
–
2
–
–
–
2
–
–
S Cheong
RJ Rowley
PK Summers
E Sam
B Chin
BG Hayman
TP Lai
BL Tan
Investments Committee
The Investments Committee does not formally meet in person. It conducts physical inspections of certain major development
sites and receives detailed briefings from management on all major development sites prior to consideration of formal
acquisition proposals which are dealt with by way of circular resolution.
DIRECTORS’ INTERESTS
INDEMNIFICATION OF AUDITORS
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
209,386,826
215,068
4,200,316
258,502
INDEMNIFYING OFFICERS
During the year, the Group 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 Group. In accordance
with common practice, the insurance policy prohibits
disclosure of the nature of the liability insured against and
the amount of the premium.
To the extent permitted by law, the Company has agreed to
indemnify its auditors, Ernst & Young, as part of the terms
of its audit engagement agreement against claims by third
parties arising from the audit (for an unspecified amount).
No payment has been made to indemnify Ernst & Young
during or since the financial year.
ROUNDING
ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191 is applicable to the Group and in
accordance with that Instrument, amounts in the Financial
Report and the Directors’ Report are rounded to the nearest
thousand dollars, unless otherwise indicated.
AUDITOR’S INDEPENDENCE DECLARATION
The Auditor’s Independence Declaration is set out on page 24.
Directors’ Report 24 | AVJENNINGS LIMITED · ABN 44 004 327 771
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
As lead auditor for the audit of AVJennings Limited for the financial year ended 30 June 2018, I declare to the best of my
knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of AVJennings Limited and the entities it controlled during the financial year.
Ernst & Young
5 September 2018
Mark Conroy
Partner
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
NON-AUDIT SERVICES
The Group’s auditor, Ernst & Young, has not provided any non-audit services during the year.
Signed in accordance with a resolution of the Directors.
Simon Cheong
Director
5 September 2018
Peter Summers
Director
Directors’ Report
Consolidated Statement of Comprehensive Income
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 25
Revenues
Cost of sales
Gross profit
Share of profits/(losses) of associates and joint venture
entities accounted for using the equity method
Change in inventory loss provisions
Selling and marketing expenses
Employee expenses
Other operational expenses
Management and administration expenses
Depreciation expense
Finance costs
Profit before income tax
Income tax
Profit after income tax
Other comprehensive income (OCI)
Foreign currency translation
Other comprehensive loss for the year
Total comprehensive income for the year
Profit for the year attributable to owners of the Company
Total comprehensive income for the year attributable to
owners of the Company
Earnings per share (cents per share):
Basic earnings per share
Diluted earnings per share
Note
2018
$’000
2017
$’000
2
374,317
401,632
(282,710)
(305,053)
91,607
96,579
2
2
2
3
226
1,111
(7,285)
(24,392)
(7,534)
(8,192)
(269)
(190)
45,082
(13,735)
(28)
5,057
(10,297)
(24,600)
(7,069)
(8,120)
(298)
(195)
51,029
(15,312)
31,347
35,717
(714)
(714)
(109)
(109)
30,633
35,608
31,347
35,717
30,633
35,608
30
30
8.13
8.13
9.31
9.31
26 | AVJENNINGS LIMITED · ABN 44 004 327 771
Consolidated Statement of Financial Position
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Total current assets
NON-CURRENT ASSETS
Trade and other receivables
Inventories
Equity accounted investments
Available-for-sale financial asset
Plant and equipment
Intangible assets
Total non-current assets
Total assets
CURRENT LIABILITIES
Trade and other payables
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
Contributed equity
Reserves
Retained earnings
Total equity
Note
2018
$’000
2017
$’000
4
5
6
7
5
6
22
8
9
10
11
12
3(c)
13
11
12
3(d)
13
8,491
95,096
193,340
7,150
15,562
121,872
211,073
3,073
304,077
351,580
24,329
38,131
295,037
308,133
10,721
2,880
536
2,816
8,449
2,880
792
2,816
336,319
361,201
640,396
712,781
38,358
13,407
10,597
6,019
75,553
2,607
5,257
5,607
68,381
89,024
23,397
125,799
23,079
742
37,449
177,016
27,422
867
173,017
242,754
241,398
331,778
398,998
381,003
14
15(a)
15(c)
167,943
160,436
6,906
6,622
224,149
213,945
398,998
381,003
Consolidated Statement of Changes in Equity
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 27
Attributable to equity holders
of AVJennings Limited
Total
equity
Foreign
Currency
Translation
Reserve
Share-based
Payment
Reserve
Retained
Earnings
Contributed
Equity
Note
$’000
$’000
$’000
$’000
$’000
160,436
3,833
2,189
197,449
363,907
–
–
–
(109)
–
–
35,717
35,717
–
(109)
–
(109)
–
35,717
35,608
28(a)
28(a)
16
–
–
–
–
–
–
–
(110)
819
–
–
(110)
819
–
(19,221)
(19,221)
–
709
(19,221)
(18,512)
At 1 July 2016
Comprehensive income:
Profit for the year
Other comprehensive loss for the year
Total comprehensive (loss)/income for
the year
Transactions with owners in their
capacity as owners
– Share-based payment expense
reversed (forfeited shares)
– Share-based payment expense
– Dividends paid
Total transactions with owners
in their capacity as owners
At 30 June 2017
160,436
3,724
2,898
213,945
381,003
At 1 July 2017
Comprehensive income:
Profit for the year
Other comprehensive loss for the year
Total comprehensive (loss)/income
for the year
Transactions with owners in their
capacity as owners:
– Ordinary share capital raised
– Treasury shares acquired
– Share-based payment expense
– Dividends paid
Total transactions with owners
in their capacity as owners
160,436
3,724
2,898
213,945
381,003
–
–
–
–
(714)
(714)
14(a)
14(b)
28(a)
16
7,688
(181)
–
–
7,507
–
–
–
–
–
–
–
–
–
–
998
31,347
31,347
–
(714)
31,347
30,633
–
–
–
7,688
(181)
998
–
(21,143)
(21,143)
998
(21,143)
(12,638)
At 30 June 2018
167,943
3,010
3,896
224,149
398,998
28 | AVJENNINGS LIMITED · ABN 44 004 327 771
Consolidated Statement of Cash Flows
CASH FLOW FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Finance costs including interest paid
Income tax paid
Net cash from/(used in) operating activities
CASH FLOW FROM INVESTING ACTIVITIES
Payments for plant and equipment
Interest received
Dividends received from joint venture entity
Additional investment in joint venture entity
Net cash (used in)/from investing activities
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from borrowings
Repayment of borrowings
Payment for treasury shares
Dividends paid
Proceeds from issue of shares
Net cash used in financing activities
NET DECREASE IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of year
Effects of exchange rate changes on cash and cash equivalents
Note
2018
$’000
2017
$’000
2
3(c)
17
9
2
22
22
14(b)
16
14(a)
450,776
408,600
(378,095)
(394,782)
(12,212)
(12,575)
(10,544)
(16,501)
47,894
(13,227)
(15)
1,410
–
(2,047)
(652)
(119)
860
208
–
949
154,182
230,975
(194,599)
(226,875)
(181)
–
(21,143)
(19,221)
7,688
–
(54,053)
(15,121)
(6,811)
15,562
(260)
(27,399)
43,086
(125)
CASH AND CASH EQUIVALENTS AT END OF YEAR
4
8,491
15,562
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 29
Section A – How the numbers are calculated
Section A1 Segment information
1. OPERATING SEGMENTS
AVJennings operates primarily in residential development.
The Group determines segments based on information that is provided to the Managing Director who is the chief operating
decision maker (CODM). The CODM assesses the performance and makes decisions about the resources to be allocated to the
segment. Each segment prepares a detailed finance report on a monthly basis which summaries the following:
• Historic results of the segment; and
• Forecast of the segment for the remainder of the year.
Reportable segments
Australian states and New Zealand where the company operates:
Includes activities relating to Land Development, Integrated Housing and Apartments Development.
Other:
Includes numerous low value items, amongst the most significant of which is interest.
Notes to the Consolidated Financial Statements 30 | AVJENNINGS LIMITED · ABN 44 004 327 771
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Notes to the Consolidated Financial Statements
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 31
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Notes to the Consolidated Financial Statements
32 | AVJENNINGS LIMITED · ABN 44 004 327 771
Section A2 Profit and Loss information
2. REVENUES AND EXPENSES
Revenues
Sales of land and built form
Interest received
Management fees received/receivable
Other
Total revenues
Revenue recognition
2018
$’000
2017
$’000
371,190
1,410
977
740
399,450
860
1,084
238
374,317
401,632
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 generally 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.
Interest revenue
Revenue is recognised as interest accrues using the effective interest rate method.
Management fees
Revenue is recognised as services are performed.
Dividends
Dividends are recognised as revenue when the right to receive payment is established.
Notes to the Consolidated Financial Statements 2. REVENUES AND EXPENSES (continued)
Expenses
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 33
Note
2018
$’000
2017
$’000
Cost of sales include:
Amortisation of finance costs capitalised to inventories
17,220
12,898
Depreciation expense
Leasehold improvements
Plant, equipment and motor vehicles
Total depreciation expense
Finance costs
Bank loans and overdraft
Less: Amount capitalised to inventories
Finance costs expensed
Impairment of assets
Net decrease in inventory loss provisions
9
9
28
241
269
29
269
298
12,212
(12,022)
10,544
(10,349)
190
195
1,111
5,057
For the year ended 30 June 2018, the movement in inventory loss provisions resulted from a realignment of future assumptions
with current market conditions specifically relating to relevant projects in New South Wales and Queensland.
Notes to the Consolidated Financial Statements 34 | AVJENNINGS LIMITED · ABN 44 004 327 771
3.
INCOME TAX
(a) Income tax expense
The major components of income tax are:
Current income tax
Current income tax charge
Adjustment for prior year
Deferred income tax
Current temporary differences
Adjustment for prior year
Income tax reported in the Consolidated
Statement of Comprehensive Income
2018
$’000
2017
$’000
17,955
11,332
(7)
(7)
(4,212)
(1)
3,977
10
13,735
15,312
(b) Numerical reconciliation between aggregate tax recognised in the Consolidated Statement of Comprehensive
Income and tax calculated per the statutory income tax rate
Accounting profit before income tax
Tax at Australian income tax rate of 30% (2017 – 30%)
Share of equity accounted Joint Venture (profit)/losses
Other non-deductible items
Foreign jurisdiction (losses)/gains
Effect of lower tax rate in foreign jurisdictions
Adjustment for prior year
Income tax expense
Effective tax rate
(c) Numerical reconciliation from income tax expense to income taxes paid
Income tax expense
Timing differences recognised in deferred tax
Adjustment for prior year
Exchange rate translation difference
Current year tax payable at year end
Prior year tax paid in current year
45,082
51,029
13,525
15,309
(69)
363
(21)
(55)
(8)
8
144
2
(154)
3
13,735
15,312
30%
30%
13,735
15,312
4,213
(3,987)
7
(20)
(10,597)
5,237
7
(45)
(5,257)
10,471
Cash taxes paid per Consolidated Statement of Cash Flows
12,575
16,501
Notes to the Consolidated Financial Statements
3.
INCOME TAX (continued)
(d) Recognised deferred tax assets and liabilities
Deferred income tax movement for the
year ended 30 June 2018:
Deferred tax assets
– inventories
– prepayments and accruals
– provisions on employee entitlement
– other
Deferred tax assets
Deferred tax liabilities
– inventories
– unearned revenue
– prepayments and accruals
– brand name
– other
Deferred tax liabilities
Net deferred tax liabilities
Deferred income tax movement for the
year ended 30 June 2017:
Deferred tax assets
– inventories
– prepayments and accruals
– provisions on employee entitlement
– other
Deferred tax assets
Deferred tax liabilities
– inventories
– unearned revenue
– prepayments and accruals
– provisions on employee entitlement
– brand name
– other
Deferred tax liabilities
Net deferred tax liabilities
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 35
Opening
balance
Expense
/(benefit)
Foreign
exchange
variance
Closing
balance
$’000
$’000
$’000
$’000
4,251
1,164
1,518
214
(1,179)
(297)
109
(77)
–
–
3,072
867
(1)
1,626
–
137
7,147
(1,444)
(1)
5,702
(21,851)
(11,459)
(368)
(845)
(46)
1,594
3,842
220
-
1
–
(20,257)
131
(7,486)
–
–
–
(148)
(845)
(45)
(34,569)
5,657
131
(28,781)
(27,422)
4,213
130
(23,079)
6,769
1,344
1,446
288
(2,518)
(180)
72
(74)
9,847
(2,700)
(22,190)
339
–
–
–
–
–
–
4,251
1,164
1,518
214
7,147
(21,851)
(9,954)
(1,507)
2
(11,459)
(135)
(152)
(845)
(8)
(233)
152
-
(38)
–
–
–
–
(368)
-
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(46)
(33,284)
(1,287)
2
(34,569)
(23,437)
(3,987)
2
(27,422)
Notes to the Consolidated Financial Statements 36 | AVJENNINGS LIMITED · ABN 44 004 327 771
3. INCOME TAX (continued)
(e) Tax consolidation legislation
AVJennings Limited and its wholly owned Australian controlled
entities are in a tax consolidated group.
The entities in the tax consolidated group have entered into
a tax sharing agreement which limits the joint and several
liabilities of the wholly owned entities in the case of a default
by the head entity, AVJennings Limited.
The entities in the tax consolidated group have also entered
into a tax funding agreement to fully compensate/be
compensated by AVJennings Limited for current tax balances
and deferred tax assets or unused tax losses and credits
transferred.
Section A3 Balance Sheet information
4. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Accounting
(f) Accounting
Income tax expense is calculated at the applicable tax rate
and recognised in the profit and loss for the year, unless
it relates to other comprehensive income or transactions
recognised directly in equity.
The tax expense comprises current and deferred tax. Broadly,
current tax represents the tax expense paid or payable for
the current year. Deferred tax accounts for tax on temporary
differences. Temporary differences generally occur when
income and expenses are recognised by tax authorities and
for accounting purposes in different periods.
Deferred tax assets, including those arising from tax losses,
are only recognised to the extent it is probable that sufficient
taxable profits will be available to utilise the losses in the
foreseeable future.
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.
2018
$’000
8,491
2017
$’000
15,562
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, which are subject to an insignificant risk of changes in value.
Notes to the Consolidated Financial Statements 5.
TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Related party receivables
Other receivables
Total current trade and other receivables
Non-current
Trade receivables
Related party receivables
Other receivables
Total non-current trade and other receivables
(i) Accounting
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 37
2018
$’000
2017
$’000
81,731
2,060
11,305
113,999
3,580
4,293
95,096
121,872
14,003
32,583
5,492
4,834
1,096
4,452
24,329
38,131
Receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest rate
method, less an allowance for impairment.
Individual receivables that are known to be uncollectible are written-off when identified. A provision for impairment is recognised
when there is objective evidence that the collection of the receivable is doubtful. The provision is calculated as the difference
between the carrying amount of the receivable and the present value of estimated future cash flows, discounted at the effective
interest rate.
(ii) Allowance for impairment loss
No impairment loss (2017: $Nil) has been recognised by the Group in the current year.
At 30 June, the ageing analysis of trade receivables is as follows:
Number of days overdue
Total
$’000
Not due
$’000
0-30
$’000
31-60
$’000
61-90
$’000
+ 91
$’000
+ 91#
$’000
2018
2017
95,734
95,731
146,582
146,570
–
–
–
6
–
3
3
3
–
–
# Considered impaired.
The carrying value of receivables is assumed to approximate their fair value.
The Group does not have any significant credit risk exposure to a single customer. Receivables in respect of land and built form
require full settlement prior to passing of title.
Notes to the Consolidated Financial Statements
38 | AVJENNINGS LIMITED · ABN 44 004 327 771
6.
INVENTORIES
Current
Broadacres
Land to be subdivided – at cost
Borrowing and holding costs capitalised
Impairment provision
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
Impairment provision
Total work–in–progress
Completed inventory
Completed houses and apartments – at cost
Completed residential land lots – at cost
Borrowing and holding costs capitalised
Impairment provision
Total completed inventory
Total current inventories
Non–current
Broadacres
Land to be subdivided – at cost
Borrowing and holding costs capitalised
Impairment provision
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
Impairment provision
Total work–in–progress
Completed inventory
Completed residential land lots – at cost
Borrowing and holding costs capitalised
Impairment provision
Total completed inventory
Total non–current inventories
Total inventories
Note
2018
$’000
2017
$’000
6(a)
6(a)
6(a)
6(a)
6(a)
6(a)
35,320
2,844
(875)
8,980
3,894
(480)
37,289
12,394
51,444
22,169
24,125
12,372
(607)
61,529
45,796
19,033
15,563
(1,838)
109,503
140,083
35,633
8,802
2,367
(254)
45,980
10,974
2,757
(1,115)
46,548
58,596
193,340
211,073
219,527
202,243
26,380
(8,015)
24,319
(10,000)
237,892
216,562
39,829
8,003
2,145
7,210
(202)
39,102
32,629
9,722
9,958
–
56,985
91,411
178
11
(29)
160
178
11
(29)
160
295,037
308,133
488,377
519,206
Notes to the Consolidated Financial Statements AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 39
6.
INVENTORIES (continued)
(a) Borrowing costs attributable to qualifying assets are capitalised. These include interest, fees and costs associated with
interest rate derivatives and have been capitalised at a weighted average rate of 6.27% (2017: 6.12%).
(b) Inventory with a carrying value of $116,235,000 (2017: $110,179,000) was pledged as security for project specific
borrowings (refer to note 12(b)). The Group’s remaining inventory has been pledged as security for the main banking
facility (refer to note 12(a)).
Accounting
Inventories are carried at the lower of cost and net realisable value (NRV).
Cost includes costs of acquisition, development, interest capitalised 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.
NRV is the estimated selling price in the ordinary course of business less the estimated costs to complete and sell the inventory.
NRV is estimated using the most reliable evidence at the time, including expected fluctuations in selling price and estimated
costs to complete and sell.
Movement in impairment provisions
At beginning of year
Amounts utilised
Amounts reversed
At end of year
7. OTHER ASSETS
Prepayments
Deposits
Total other current assets
2018
$’000
13,462
(2,369)
(1,111)
2017
$’000
21,027
(2,508)
(5,057)
9,982
13,462
2018
$’000
2,249
4,901
2017
$’000
2,971
102
7,150
3,073
Notes to the Consolidated Financial Statements 40 | AVJENNINGS LIMITED · ABN 44 004 327 771
8. AVAILABLE-FOR-SALE FINANCIAL ASSET
Property Fund Units
2018
$’000
2017
$’000
2,880
2,880
These comprise units in unlisted property funds which don’t have an active market. As the range of reasonable fair values can be
significant and estimates cannot be made reliably, the units are measured at cost less impairment.
The Company intends to hold the property fund units until development activity is completed, and all product sold.
Impairment testing
Available-for-sale financial assets (AFS) are tested when an indicator of impairment exists.
An asset is impaired if the recoverable amount, calculated as the higher of value in use and fair value less costs to sell, is less
than its carrying amount.
None of the financial assets are either past due or impaired.
Notes to the Consolidated Financial Statements 9. PLANT AND EQUIPMENT
Leasehold improvements
At cost
Less: accumulated depreciation
Total leasehold improvements
Plant and equipment
At cost
Less: accumulated depreciation
Total plant and equipment
Total plant and equipment
(i) Reconciliations
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 41
2018
$’000
376
(314)
62
6,715
(6,241)
474
536
2017
$’000
376
(286)
90
6,711
(6,009)
702
792
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning and end of the year are set
out below:
For the year ended 30 June 2017
Note
Carrying amount at 1 July 2016
Additions
Disposals
Depreciation charge
Carrying amount at 30 June 2017
For the year ended 30 June 2018
Carrying amount at 1 July 2017
Additions
Disposals
Depreciation charge
Carrying amount at 30 June 2018
(ii) Accounting
2
2
Leasehold
improve-
ments
$’000
Plant and
equipment
$’000
120
2
(3)
(29)
90
90
–
–
(28)
62
865
117
(11)
(269)
702
702
15
(2)
(241)
474
Total
$’000
985
119
(14)
(298)
792
792
15
(2)
(269)
536
Plant and equipment is stated at historical cost less accumulated depreciation and impairment.
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets using the following rates which
are consistent with the prior year:
Plant and equipment
Leasehold improvements
3-7 years
3-10 years
Notes to the Consolidated Financial Statements 42 | AVJENNINGS LIMITED · ABN 44 004 327 771
10. INTANGIBLE ASSETS
Brand name at cost
Less: accumulated amortisation
Total intangible assets
2018
$’000
9,868
(7,052)
2,816
2017
$’000
9,868
(7,052)
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 was amortised over the expected useful
life. In accordance with the accounting policy discussed below, 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 2018, there
were no indicators of impairment.
Accounting
Intangible assets acquired separately are measured at cost on initial recognition. The cost of intangible assets acquired in a
business combination is 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.
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 useful life from
indefinite to finite is made on a prospective basis.
11. TRADE AND OTHER PAYABLES
Current
Unsecured
Land creditors
Trade creditors
Related party payables
Deferred Income
Other creditors and accruals
Total current payables
Non-Current
Unsecured
Land creditors
Related party payables
Deferred Income
Total non-current payables
Accounting
2018
$’000
2017
$’000
12,229
43,332
8,298
150
2,158
9,766
150
1,029
15,523
21,276
38,358
75,553
18,884
32,742
2,978
1,535
2,978
1,729
23,397
37,449
Trade and other payables are initially recognised at fair value and subsequently carried at amortised cost. They represent
liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid.
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 6.86% (2017: 6.01%).
Notes to the Consolidated Financial Statements 12. INTEREST-BEARING LOANS AND BORROWINGS
Current
Bank overdraft
Bank loans
Total current interest-bearing liabilities
Non-current
Bank loans
Total non-current interest-bearing liabilities
Accounting
Borrowing costs
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 43
2018
$’000
2017
$’000
–
3
13,407
2,604
13,407
2,607
125,799
177,016
125,799
177,016
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part
of the cost of that asset whilst in active development. Qualifying assets are assets that take a substantial period of time to get
ready for their intended use or sale. Other borrowing costs are expensed as incurred.
Borrowing costs consist of interest and other costs incurred in connection with the borrowing of funds.
Interest-bearing loans and borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable
transaction costs. Subsequently, interest-bearing loans and borrowings are measured at amortised cost 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 repayment for at least 12 months
after the reporting date.
Notes to the Consolidated Financial Statements 44 | AVJENNINGS LIMITED · ABN 44 004 327 771
12. INTEREST-BEARING LOANS AND BORROWINGS (continued)
Financing arrangements
The Group has access to the following lines of credit:
30 June 2018
Main banking facilities
– bank overdraft
– bank loans
– performance bonds
Project funding facilities
– bank loans
Contract performance bond facilities
– performance bonds
30 June 2017
Main banking facilities
– bank overdraft
– bank loans
– performance bonds
Project funding facilities
– bank loans
Contract performance bond facilities
– performance bonds
Note
12(a)
12(b)
12(c)
Note
12(a)
12(b)
12(c)
Available
$’000
Utilised
$’000
Unutilised
$’000
5,000
225,000
20,000
–
98,586
7,079
5,000
126,414
12,921
250,000
105,665
144,335
70,000
40,620
29,380
45,000
28,531
16,469
Available
$’000
Utilised
$’000
Unutilised
$’000
5,000
3
225,000
139,000
20,000
9,931
4,997
86,000
10,069
250,000
148,934
101,066
92,000
40,620
51,380
35,000
26,936
8,064
At 30 June 2018 main banking facilities are interchangeable up to $47 million (2017: $47 million) between the bank loans and
performance bonds.
During the current and prior year, there were no defaults or breaches of any covenants relating to the facilities.
Notes to the Consolidated Financial Statements
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 45
12. INTEREST-BEARING LOANS AND BORROWINGS (continued)
Significant terms and conditions
(a) Main banking facilities
The Group’s main banking facilities mature on 30 September 2020. These facilities are secured by a fixed and floating charge
over all the assets and undertakings of the entities within the Group that are obligors under the main banking facilities, and
by first registered mortgages over various real estate inventories other than those controlled by the Group under project
development agreements and those assets pledged as security for project funding (see note 12(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 (see note 21). The weighted average interest rate including margin on the main banking facilities
at 30 June 2018 was 3.32% (2017: 3.00%). Subsequent to the year end, the main banking facilities have increased from
$250 million to $300 million.
(b) Project funding facilities
Project funding facilities are secured by:
• a fixed and floating charge over the assets of the entity involved in the relevant project, namely, AVJennings Waterline
Pty Ltd; and
• a first registered mortgage over certain real estate inventories of the entity involved in the relevant project, namely,
AVJennings Waterline Pty Ltd.
The lines of credit shown are maximum limits which are available progressively as projects are developed. The expiry date for
the facility at the reporting date was November 2019. The project funding facilities are to reduce to $50 million in June 2019.
The outstanding amounts are expected to be repaid or refinanced prior to expiry of the facility. As at 30 June 2018, the balance
outstanding on the bank loan facilities was $40,620,000 (2017: $40,620,000).
The carrying amounts of the pledged assets are as follows:
Waterline, Victoria
2018
$’000
2017
$’000
117,703
111,021
The weighted average interest rate including margin on the project funding loans at 30 June 2018 was 3.37% (2017: 3.17%).
(c) Contract performance bond facilities
The Group has entered into Contract performance bond facilities of $45,000,000 (2017: $35,000,000) which are subject to
review annually. The facilities expire on 31 December 2018 and management expects the annual review which is underway, to
be completed shortly and the facilities extended for a further 12 months. The performance bond facilities are secured by Deeds
of Indemnity between the Parent Entity and various controlled entities. Details of the controlled entities, included in the Deeds of
Indemnity are set out in note 21.
13. PROVISIONS
Current
Employee benefits
Total current provisions
Non-current
Employee benefits
Total non-current provisions
Accounting
Provisions
2018
$’000
6,019
6,019
742
742
2017
$’000
5,607
5,607
867
867
A provision is recognised when there is a present obligation (legal or constructive) as a result of a past event, it is probable that
an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the obligation.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present
obligation at the reporting date. The non-current portion is discounted using corporate bond rates.
Notes to the Consolidated Financial Statements 46 | AVJENNINGS LIMITED · ABN 44 004 327 771
14. CONTRIBUTED EQUITY
Ordinary shares
Treasury shares
Share Capital
(a) Movement in ordinary share capital
2018
Number
2017
Number
2018
$’000
2017
$’000
394,926,905
384,423,851
170,481
162,793
(495,632)
(842,089)
(2,538)
(2,357)
394,431,273
383,581,762
167,943
160,436
At beginning of year
384,423,851
384,423,851
162,793
162,793
Issued under the Dividend Reinvestment Plan
Issued pursuant to the Underwriting Agreement
7,252,488
3,250,566
–
–
5,309
2,379
–
–
At end of year
394,926,905
384,423,851
170,481
162,793
On 23 February 2018, the Company announced a fully franked interim dividend of 2 cents per share to be paid on 19 April 2018.
The Company also announced that the Dividend Reinvestment Plan (DRP) would be reactivated for this dividend.
The DRP offered shares in the capital of the Company (Shares) to each shareholder of the Company with a registered address
in Australia and New Zealand (and otherwise as determined pursuant to the DRP) by way of reinvestment of some or all of their
Dividend entitlement.
On 23 March 2018, the Company announced it had entered into an underwriting agreement to underwrite the subscription
of shares offered under the DRP held by shareholders other than the ultimate parent entity, SC Global Developments Pte Ltd,
who had elected to fully participate in the DRP. The issue price per share under the DRP was $0.732, being the average of the
daily volume weighted average price of all AVJennings’ shares sold on the ASX during the Pricing Period, which commenced
on 23 March 2018 and concluded on 29 March 2018, less a 2.5% discount.
On 19 April 2018, AVJennings issued:
• 7,252,488 Shares to shareholders of AVJennings under the DRP; and
• 3,250,566 Shares to the Underwriter pursuant to the Underwriting Agreement.
The shares issued under the DRP and the Underwriting Agreement raised $7,688,000 in total.
(b) Movement in treasury shares
2018
Number
2017
Number
2018
$’000
2017
$’000
At beginning of year
(842,089)
(2,338,154)
(2,357)
(2,357)
On market acquisition of shares
Employee Share Scheme Issue
(248,020)
–
594,477
1,496,065
(181)
–
–
–
At end of year
(495,632)
(842,089)
(2,538)
(2,357)
During the year, 248,020 treasury shares were purchased by the AVJ Deferred Employee Share Plan Trust at a cost of
$181,000.
Holders of ordinary shares are entitled to dividends and to one vote per share at shareholder meetings.
Accounting
Incremental costs directly attributable to the issue of ordinary shares are shown in equity as a deduction, net of tax, from
the proceeds.
Shares held by the AVJ Deferred Employee Share Plan Trust are disclosed as treasury shares and deducted from contributed
equity.
Notes to the Consolidated Financial Statements AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 47
Foreign
Currency
Translation
Reserve
$’000
Share-based
Payment
Reserve
$’000
Total
$’000
3,833
2,189
6,022
(109)
–
–
709
(109)
709
3,724
2,898
6,622
(714)
–
–
998
(714)
998
3,010
3,896
6,906
Note
28(a)
28(a)
15. RESERVES AND RETAINED EARNINGS
(a) Reserves
At 1 July 2016
Foreign currency translation
Share-based payment expense
At 30 June 2017
Foreign currency translation
Share-based payment expense
At 30 June 2018
(b) Nature and purpose of reserves
Foreign currency translation reserve
Exchange differences arising on translation of foreign operations are recognised in other comprehensive income as
explained in note 36(e) and accumulated in a separate reserve within equity. The cumulative amount is reclassified to the
Consolidated Statement of Comprehensive Income when the net investment is disposed of.
Share-based payment reserve
The share-based payment reserve is used to recognise the fair value of rights to shares or shares issued to employees, with
a corresponding increase in employee expense in the Statement of Comprehensive Income.
(c) Retained earnings
Movements in retained earnings were as follows:
At beginning of year
Profit after income tax
Dividends declared and paid
At end of year
2018
$’000
2017
$’000
213,945
197,449
31,347
(21,143)
35,717
(19,221)
224,149
213,945
Notes to the Consolidated Financial Statements 48 | AVJENNINGS LIMITED · ABN 44 004 327 771
16. DIVIDENDS
Cash dividends declared and paid
2016 final dividend of 3.5 cents per share,
paid 23 September 2016. Fully franked @ 30% tax
2017 interim dividend of 1.5 cents per share,
paid 7 April 2017. Fully franked @ 30% tax
2017 final dividend of 3.5 cents per share,
paid 19 September 2017. Fully franked @ 30% tax
2018 interim dividend of 2.0 cents per share,
paid 19 April 2018. Fully franked @ 30% tax
2018
$’000
2017
$’000
–
–
13,455
5,766
13,455
7,688
–
–
Total cash dividends declared and paid
21,143
19,221
Dividends proposed
2017 final dividend of 3.5 cents per share,
paid 19 September 2017. Fully franked @ 30% tax
2018 final dividend of 3.0 cents per share,
to be paid 11 October 2018. Fully franked @ 30% tax
Total dividends proposed
The Company’s DRP has been re-activated.
Dividend franking account
Franking credits available for subsequent
financial years based on a tax rate of 30%
–
13,455
11,848
–
11,848
13,455
22,951
15,652
The above balance is based on the balance of the dividend franking account at year-end adjusted for:
•
•
franking credits that will arise from the payment of the amount provided for income tax; and
franking debits that will arise from the payment of dividends proposed at year-end.
Notes to the Consolidated Financial Statements AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 49
Section A4 Cash Flow information
17. CASH FLOW STATEMENT RECONCILIATION
Reconciliation of profit after tax to net cash flow used in operating activities
Profit after tax
Adjustments for non-cash items:
Depreciation
Net loss on disposal of plant and equipment
Interest revenue classified as investing cash flow
Share of (profit)/losses of associates and joint venture entities
Change in inventory loss provisions
Share-based payments expense
Change in operating assets and liabilities:
Decrease in inventories
Decrease/(increase) in trade and other receivables
Increase in other current assets
(Decrease)/increase in deferred tax liability
Increase/(decrease) in current tax liability
Decrease in trade and other payables
Increase/(decrease) in provisions
2018
$’000
2017
$’000
31,347
35,717
269
2
(1,410)
(226)
(3,480)
998
34,309
40,578
(4,077)
(4,343)
5,502
(51,862)
287
298
14
(860)
28
(7,565)
709
41,396
(32,249)
(933)
3,985
(5,237)
(47,949)
(581)
Net cash from/(used in) operating activities
47,894
(13,227)
Notes to the Consolidated Financial Statements 50 | AVJENNINGS LIMITED · ABN 44 004 327 771
Section B – Risk
19. FINANCIAL RISK MANAGEMENT
18. JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of financial statements involves the use
of certain critical accounting estimates and requires
management to exercise judgement. These estimates and
judgements are continually reviewed based on historical
experience, current and expected market conditions as well as
other relevant factors.
(i) Judgements
In applying the Group’s accounting policies, management
makes judgements, which can significantly affect the
amounts recognised in the Consolidated Financial
Statements. This includes the determination of whether
revenue recognition criteria have been satisfied on sales of
land lots with deferred settlement terms.
(ii) Estimates and assumptions
Estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year include:
Estimates of net realisable value of inventories:
Estimates of net realisable value are based on the most
reliable evidence available at the time the estimates are made
of the net amount expected to be realised from the sale of
inventories, and the estimated costs to complete.
Profit recognised on developments:
The calculation of profit for land lots and built form is based
on actual costs to date and estimates of costs to complete.
The Group’s principal financial instruments comprise
receivables, payables, loans and borrowings, financial
guarantee contracts, available-for-sale financial asset, cash
and short-term deposits.
The Group’s treasury department focuses on the following
main financial risks: interest rate risk, foreign currency
risk, credit risk and liquidity risk. Financial risk activities
are governed by appropriate policies and procedures and
financial risks are identified, measured and managed in
accordance with policies and risk objectives.
Responsibility for the monitoring of financial risk exposure
and the formulation of appropriate responses rests with the
Chief Financial Officer.
The Board reviews and approves these policies.
(i) Interest rate risk
Interest rate risk is the risk that the fair value of a financial
instrument or associated future cash flows will fluctuate
because of changes in market interest rates. The exposure
to market interest rates primarily relates to interest-bearing
loans and borrowings issued at variable rates.
In assessing interest rate risk, the Group considers loan
maturity and cash flow profiles and the outlook for interest
rates.
The Group uses various techniques, including interest rate
swaps, caps and floors to hedge the risk associated with
interest rate fluctuations. These derivatives do not qualify for
hedge accounting and changes in fair value are recognised
in profit and loss. However, the forecast cash position together
with the current benign outlook for medium term interest rates
has resulted in the Group retaining all of the drawn debt at
variable rates of interest.
Notes to the Consolidated Financial Statements AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 51
19. FINANCIAL RISK MANAGEMENT (continued)
(i) Interest rate risk (continued)
Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into and their
fair value is reassessed at the end of each reporting period. Derivative financial instruments are not held for trading purposes.
At balance date, the following variable rate borrowings were outstanding:
Cash
Bank overdrafts
Bank loans
Net financial liabilities
Borrowings not hedged
2018
2017
Weighted
average
interest rate
%
1.43
–
3.33
Balance
$‘000
(8,491)
–
139,206
130,715
130,715
Weighted
average
interest rate
%
1.48
5.50
3.03
Balance
$‘000
(15,562)
3
179,620
164,061
164,061
The following table shows the impact on profit after tax if interest rates changed by 50 basis points. The calculation is based on
borrowings and cash held at year-end. It assumes that interest is capitalised to qualifying assets as shown in note 2:
+50 basis points
– 50 basis points
(ii) Foreign currency risk
Profit After Tax
Higher/(Lower)
2018
$’000
(153)
153
2017
$’000
(108)
108
Foreign currency risk arises from NZD denominated assets (balance sheet risk) or from transactions or cash flows denominated
in NZD (cash flow risk).
The following table demonstrates the sensitivity to a change in AUD/NZD exchange rates on exposures existing at balance date.
With all other variables held constant, profit after tax and equity would have been affected as follows:
AUD/NZD +10%
AUD/NZD – 10%
(iii) Credit risk
Profit After Tax
Higher/(Lower)
Equity
Higher/(Lower)
2018
$’000
(102)
102
2017
$’000
(413)
413
2018
$’000
(173)
173
2017
$’000
(424)
424
Credit risk is the risk that a counterparty will not meet its contractual obligations under a financial instrument, leading to a
financial loss. Credit risk arises from cash and cash equivalents, trade and other receivables, available-for-sale financial asset,
financial instruments and from granting of financial guarantees.
Contracts for Land, Integrated Housing and Apartments usually require payment in full prior to passing of title to customers
and collateral is therefore unnecessary. In the event that title is to pass prior to full payment being received, appropriate credit
verification procedures are performed before contract execution.
Credit risk from balances with banks and financial institutions is managed by the Group’s treasury department in accordance
with Group policy. Surplus funds are typically applied to repay drawn loans to minimise borrowing costs. Counterparties are
limited to financial institutions approved by the Board.
The granting of financial guarantees also exposes the Group to credit risk, being the maximum amount that would have to be
paid if the guarantee is called on. As the amounts payable under the guarantees are not significantly greater than the original
liabilities, this risk in not material. See note 33 for details regarding financial guarantees.
The Group has no significant concentrations of credit risk.
Notes to the Consolidated Financial Statements 52 | AVJENNINGS LIMITED · ABN 44 004 327 771
19. FINANCIAL RISK MANAGEMENT (continued)
(iv) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group manages its liquidity risk by monitoring forecast cash flows on a fortnightly basis and matching the maturity
profiles of financial assets and liabilities. These are reviewed by the Chief Financial Officer and presented to the Board as
appropriate. The objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans
and committed available credit facilities.
The current main banking facilities are due to mature on 30 September 2020 and are therefore non-current. In addition, the
Group operates certain project funding facilities which are discussed in note 12(b). The maturity profile of all debt facilities is
monitored on a regular basis by the Chief Financial Officer and ongoing financing plans presented to the Board for approval
well in advance of maturity.
At 30 June 2018, 9.6% (2017: 1.5%) of the Group’s interest-bearing loans and borrowings will mature in less than one year.
The table below summarises the maturity profile of the Group’s financial assets and liabilities based on contractual
undiscounted payments.
Year ended 30 June 2018
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
8,491
61,716
–
–
33,380
24,329
8,491
119,425
70,207
33,380
24,329
127,916
28,567
2,326
2,135
9,791
15,643
23,397
130,275
–
–
61,755
148,244
2,135
33,028
25,434
153,672
212,134
Net maturity
37,179
7,946
(129,343)
(84,218)
Year ended 30 June 2017
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
15,562
100,505
–
–
21,367
38,131
15,562
160,003
116,067
21,367
38,131
175,565
61,881
2,701
2,135
13,672
5,280
37,449
183,923
–
–
113,002
191,904
2,135
66,717
18,952
221,372
307,041
Net maturity
49,350
2,415
(183,241)
(131,476)
* 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 short term assets to meet short term payments, at reporting date, the Group has
approximately $190 million (2017: $161 million) of unused credit facilities available. Please refer to note 12.
Notes to the Consolidated Financial Statements AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 53
19. FINANCIAL RISK MANAGEMENT (continued)
(v) Fair value
The following table provides the fair value measurement hierarchy of the Group’s financial assets and financial liabilities:
Year ended 30 June 2018
Year ended 30 June 2017
Quoted
prices
in active
markets
(Level 1)
$’000
Significant
observable
inputs
Significant
unobservable
inputs
Total
(Level 2)
$’000
(Level 3)
$’000
$’000
Quoted
prices
in active
markets
(Level 1)
$’000
Significant
observable
inputs
Significant
unobservable
inputs
Total
(Level 2)
$’000
(Level 3)
$’000
$’000
Financial liabilities
Interest-bearing loans
and borrowings
–
–
139,206
139,206
–
–
139,206
139,206
–
–
179,623
179,623
–
–
179,623
179,623
Management assessed that the fair values of cash and short-term deposits, trade receivables, trade payables, bank overdrafts
and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
20. CAPITAL MANAGEMENT
In managing capital, management’s objective is to achieve an efficient capital structure which optimises the weighted average
cost of capital commensurate with business requirements and prudential considerations.
During the year ended 30 June 2018, a total dividend of $21,143,000 was paid (2017: $19,221,000).
Management monitors capital mix through the debt to equity ratio (net debt/total equity) and the debt to total assets ratio
(net debt/total assets) calculated below:
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
Consolidated
2018
$’000
139,206
(8,491)
2017
$’000
179,623
(15,562)
130,715
164,061
398,998
381,003
640,396
712,781
32.8%
20.4%
43.1%
23.0%
Notes to the Consolidated Financial Statements
54 | AVJENNINGS LIMITED · ABN 44 004 327 771
Section C – Group Structure
21. CONTROLLED ENTITIES
(a) Investment in controlled entities
The following economic entities are the controlled entities of AVJennings Limited:
ECONOMIC ENTITY (1)
2018
2017
2018
2017
% 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
AVJ ODP Pty Limited(4)
AVJennings (Cammeray) Pty Limited
AVJennings Syndicate No 3 Limited
AVJennings Syndicate No 4 Limited(3)
AVJennings Officer Syndicate Limited(3)
AVJennings Properties SPV No 1 Pty Limited
AVJennings Properties SPV No 2 Pty Limited
AVJennings Properties SPV No 4 Pty Limited
AVJennings Wollert Pty Limited
AVJ Erskineville Pty Limited
AVJ Hobsonville Pty Limited
AVJennings Properties SPV No 9 Pty Limited
AVJennings SPV No 10 Pty Limited
AVJennings SPV No 19 Pty Limited
AVJennings SPV No 20 Pty Limited
AVJennings SPV No 22 Pty Limited
AVJennings SPV No 23 Pty Limited
AVJennings SPV No 24 Pty Limited
AVJBOS Nominees Pty Limited(4)
AVJBOS Eastwood Developments Pty Limited(4)
AVJBOS Eastwood Finance Pty Limited(4)
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
Yes
No
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
No
Yes
No
No
No
No
No
No
No
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
No
Yes
No
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
No
No
No
No
Notes to the Consolidated Financial Statements AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 55
21. CONTROLLED ENTITIES (continued)
(a) Investment in controlled entities (continued)
ECONOMIC ENTITY (1)
2018
2017
2018
2017
% Equity Interest
Included in Banking Cross
Deed of Covenant (2)
Entities excluded from the Closed Group
(continued)
Creekwood Developments Pty Limited(3)
Portarlington Nominees Pty Limited
AVJennings St Clair Pty Limited
St Clair JV Nominee Pty Limited
AVJennings Properties Wollert SPV Pty Limited
AVJennings Waterline Pty Limited
100
100
100
100
100
100
100
100
100
100
100
100
Yes
Yes
Yes
Yes
No
No
Yes
Yes
Yes
Yes
No
No
(1)
All entities are incorporated in Australia. With the exception of AVJ Hobsonville Pty Limited which has a branch in New Zealand, all entities operate
within Australia.
These entities, including AVJennings Limited, are included under the Banking Cross Deed of Covenant referred to in note 12(a).
These entities, including AVJennings Limited, are included in the Deeds of Indemnity for performance bond facilities referred to in note 12(c).
(2)
(3)
(4) Deregistered on 8 August 2018.
(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 Corporations Instrument 2016/785 issued by the Australian Securities and Investments
Commission (ASIC). Those entities included in the Closed Group are listed in note 21(a). These entities represent a “Closed
Group” for the purposes of the Corporations Instrument, 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) Corporations Instrument closed group
Certain controlled entities were granted relief by ASIC (under provisions of Corporations Instrument) 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 21(c)).
The Extended Closed Group referred to in the Directors’ Declaration therefore comprises all of the entities within the
Corporations Instrument. Certain entities falling outside of the Extended Closed Group are listed in note 21(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 property development sold
Other expenses
Profit before income tax
Income tax
Profit after income tax
Closed Group
2018
$’000
2017
$’000
240,082
209,949
(170,670)
(144,675)
(39,315)
(39,220)
30,097
(9,214)
26,054
(8,079)
20,883
17,975
Notes to the Consolidated Financial Statements 56 | AVJENNINGS LIMITED · ABN 44 004 327 771
21. CONTROLLED ENTITIES (continued)
(d) Corporations Instrument closed group (continued)
The Consolidated Statement of Financial Position for those controlled entities which are party to the deed is as follows:
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Total current assets
NON-CURRENT ASSETS
Trade and other receivables
Inventories
Equity accounted investments
Available-for-sale financial asset
Plant and equipment
Intangible assets
Total non-current assets
Total assets
CURRENT LIABILITIES
Trade and other payables
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
Contributed equity
Reserves
Retained earnings
Total equity
2018
$’000
2017
$’000
7,433
177,186
98,337
1,782
15,035
221,428
110,102
2,504
284,738
349,069
17,708
5,548
114,356
112,828
7,709
2,880
536
2,816
5,431
2,880
792
2,816
146,005
130,295
430,743
479,364
21,871
30,483
9,717
5,896
4,307
5,491
37,484
40,281
11,917
94,000
20,788
742
18,167
139,000
23,482
867
127,447
181,516
164,931
221,797
265,812
257,567
167,943
160,436
3,896
93,973
2,898
94,233
265,812
257,567
Notes to the Consolidated Financial Statements AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 57
21. CONTROLLED ENTITIES (continued)
(d) Corporations Instrument 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 year
Comprehensive income:
Profit for the year
Total comprehensive income for the year
Transactions with owners in their capacity as owners
– Ordinary share capital raised
– Treasury shares acquired
– Share-based payment expense
– Dividends paid
Total transactions with owners in their capacity as owners
At end of year
22. EQUITY ACCOUNTED INVESTMENTS
Associate
Joint Ventures
Closed Group
2018
$’000
2017
$’000
257,567
258,104
20,883
20,883
17,975
17,975
7,688
(181)
998
(21,143)
(12,638)
–
–
709
(19,221)
(18,512)
265,812
257,567
2018
$’000
–
10,721
2017
$’000
5
8,444
Total equity accounted investments
10,721
8,449
Accounting
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the
net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only
when decisions about the relevant activities require unanimous consent of the parties sharing control.
Investments in associate and joint ventures are accounted for using the equity method. Under the equity method, investments in
these entities are carried at cost plus post acquisition changes in the Group’s share of net assets of these entities.
The aggregate of the Group’s share of profit or loss after tax of associate and joint ventures is disclosed in the Consolidated
Statement of Comprehensive Income. The Group’s share of movements is recognised in reserves. Dividends received from an
associate or a joint venture are recognised as a reduction in the carrying amount of the investment. Unrealised gains and losses
resulting from transactions between the Group and the associate or joint venture are eliminated to the extent of the interest in
the associate or joint venture, until the underlying assets are realised by the associate or joint venture on consumption or sale.
If there is objective evidence that the investment in the associate or joint venture is impaired, the Group calculates the amount
of impairment as the difference between the recoverable amount of the investment and its carrying value and recognises it in
the Consolidated Statement of Comprehensive Income.
The operations of the Associate have been wound down over the past few years. The partnership was terminated during the year.
Notes to the Consolidated Financial Statements 58 | AVJENNINGS LIMITED · ABN 44 004 327 771
22. EQUITY ACCOUNTED INVESTMENTS (continued)
Interest in Joint Ventures
Joint Venture and principal activities
Woodville – Land Development and Building Construction
Pindan Capital Group Dwelling Trust – Building Construction
Movements in carrying amount
At beginning of year
Contributions made
Dividends received
Share of profit/(loss)
At end of year
Interest held
2018
2017
50.0%
33.3%
2018
$’000
8,444
2,047
–
230
50.0%
33.3%
2017
$’000
8,680
–
(208)
(28)
10,721
8,444
The Group’s share of the individually immaterial Joint Ventures’ assets, liabilities, revenues 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 revenues and expenses
Revenues
Cost of property developments sold
Expenses
Profit/(loss) before income tax
Income tax
Profit/(loss) after income tax
2018
$’000
2017
$’000
222
13,871
14,093
648
2,724
3,372
3,495
11,947
15,442
4,580
2,418
6,998
10,721
8,444
4,920
(3,594)
(1,097)
229
1
230
1,513
(804)
(722)
(13)
(15)
(28)
Notes to the Consolidated Financial Statements AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 59
23. INTEREST IN JOINT OPERATIONS
A number of controlled entities have entered into Joint Operations. Information relating to the Joint Operations is set out below:
Interest Held
2018
2017
Joint Operation name, principal place of business and principal activities
Wollert Joint Venture (Victoria) – Land Development and Building Construction
Cusack Lane Development Joint Venture (Queensland) – Land Development
49%
50%
49%
50%
Accounting
A Joint Operation is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to
the assets and obligations for the liabilities of the Joint Operation. Joint control is the contractually agreed sharing of control
of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties
sharing control. The proportionate interests in the assets, liabilities, revenues and expenses of Joint Operations have been
recognised in the Financial Statements under the appropriate headings.
The Group’s share of the individually immaterial Joint Operations’ assets, liabilities, revenues 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 revenues and expenses
Revenues
Cost of property developments sold
Other expenses
Loss before income tax
Income tax
Loss after income tax
Total comprehensive loss for the year
2018
$’000
2017
$’000
17,793
49,690
67,483
3,376
8,174
11,550
7,395
51,387
58,782
2,581
10,077
12,658
55,933
46,124
898
(672)
(786)
(560)
168
(392)
(392)
9
–
(511)
(502)
151
(351)
(351)
Notes to the Consolidated Financial Statements 60 | AVJENNINGS LIMITED · ABN 44 004 327 771
Section D – Other information
25. STATEMENT OF COMPLIANCE
24. CORPORATE INFORMATION
The Consolidated Financial Statements of AVJennings Limited
for the year ended 30 June 2018 were authorised for issue in
accordance with a resolution of the Directors on 5 September
2018.
AVJennings Limited (the Parent) is a for-profit Company
limited by shares domiciled and incorporated in Australia
whose shares are publicly traded on the Australian Securities
Exchange and the Singapore Exchange through SGX
Globalquote. The Ultimate Parent is SC Global Developments
Pte Ltd, a company incorporated in Singapore which owns
53.02% of the ordinary shares in AVJennings Limited.
The Group (“AVJennings” or “Group”) consists of AVJennings
Limited (“Company” or “Parent”) and its controlled entities.
The nature of the operations and principal activities of the
Group are provided in the Directors’ Report.
These Consolidated Financial Statements are general purpose
financial reports. They have been prepared in accordance
with Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards
Board, the Corporations Act 2001 and International Financial
Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB).
26. BASIS OF PREPARATION
These Financial Statements have been prepared on a going
concern basis, using historical cost convention. All figures in
the financial statements are presented in Australian dollars
and have been rounded to the nearest thousand dollars in
accordance with ASIC Corporations Instrument 2016/191,
unless otherwise indicated.
Where necessary, comparative information has been restated
to conform to the current year’s disclosures.
27. 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 entitiess
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:
Fully paid ordinary shares
Owned by Directors directly,
or indirectly or beneficially
2018
Number
2017
Number
214,060,712
208,199,567
(c) Entity with significant influence over AVJennings Limited
209,386,826 ordinary shares equating to 53.02% of the total ordinary shares on issue (2017: 203,818,030 and 53.02%
respectively) were held by SC Global Developments Pte Ltd and its subsidiaries in the Parent Entity at 30 June 2018. 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
An impairment assessment is undertaken each reporting period to determine whether there is objective evidence that a related
party receivable is impaired. At 30 June 2018, there is no evidence of impairment and recoverability is considered probable
(2017: Nil).
Notes to the Consolidated Financial Statements
27. RELATED PARTY DISCLOSURES (continued)
(e) Transactions with related parties
Entity with significant influence over the Group:
SC Global Developments Pte Ltd
Consultancy fee paid/payable
Joint Ventures:
Eastwood JV
Dividends received
Woodville JV
Accounting services fee received/receivable
Joint Operations:
Wollert JV
Management fee received/receivable
Accounting services fee received/receivable
Cusack Lane Development JV
Management fee received/receivable
Accounting services fee received/receivable
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 61
Note
2018
$
2017
$
(i)
600,000
600,000
(ii)
–
207,500
1,684
19,500
642,631
50,000
845,929
50,000
317,626
50,000
215,231
33,881
(i) Consultancy fees paid to SC Global Developments Pte Ltd of $600,000 (2017: $600,000).
(ii) Ceased to be a joint venture on 22 February 2017.
(f) Joint ventures and Joint operations in which related entities in the Group are venturers
Joint arrangements in which the Group has an interest are set out in notes 22 and 23.
(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
Non-current receivables
Joint Ventures and others
Current payables
SC Global Developments Pte Ltd
(h) Amounts advanced to and received from related parties
Amounts advanced
Joint Ventures and others
Amounts received
Joint Ventures
2018
$’000
2017
$’000
2,060
973
4,336
1,096
150
150
1,156
2,607
2,978
2,978
Notes to the Consolidated Financial Statements 62 | AVJENNINGS LIMITED · ABN 44 004 327 771
27. RELATED PARTY DISCLOSURES (continued)
(i) Remuneration of Key Management Personnel (KMP)
Short-term
– Salary/Fees
– Accrued annual leave
– STI
– Other (1)
Post employment
– Superannuation (2)
Long-term
– Accrued Long service leave
Share-based payment
2018
$
2017
$
1,983,855
1,927,428
46,965
370,870
91,828
21,123
399,822
70,309
111,957
129,323
83,696
674,467
77,413
605,343
3,363,638
3,230,761
‘Other’ represents the value of motor vehicle benefits.
(1)
(2) Payments to Defined Contribution Plans consist of Superannuation Guarantee Contribution payments as well as employee voluntary contributions.
(j) 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.
28. 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
Expense reversed on forfeiture of shares
Total expense arising from share-based payment transactions
The share-based payment plan is described in note 28(b).
2018
$’000
998
–
998
2017
$’000
819
(110)
709
Notes to the Consolidated Financial Statements AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 63
28. SHARE-BASED PAYMENT PLANS (continued)
(b) Type of share-based payment plan
The operation of the EPS, ROE and Retention hurdles are set
out below.
LTI awards are only made to executives who are in a position
to have an impact on the Group’s performance and the
creation of shareholder value over the long term.
AVJennings’ EPS growth
rate over the three year
performance period
LTI remuneration is provided by the Issue of Rights and
includes a performance and a retention component. The
use of Rights as an incentive reduces the upfront cash
requirements of the Company (as shares do not need to be
acquired for allocations) and because participants do not
receive dividends on Rights (as distinct from shares).
LTI and retention
Retention Rights are granted in three equal tranches which
vest in each of the three succeeding years following the year
of grant.
Retention component
– years of service
Percentage of rights
vesting
one year
two years
three years
LTI and performance
33.33%
33.33%
33.34%
Up to 50% of the Performance Rights granted vest depending
on AVJennings’ average growth rate in Earnings Per Share
(EPS) over the next three financial years.
Up to 50% of the Performance Rights granted vest depending
on AVJennings’ Return on Equity (ROE) over the next three
financial years. The Return on Equity (ROE) component of the
Performance Rights uses market capitalisation as a proxy for
equity.
The performance conditions are tested at the end of the three-
year measurement period. The service rights are split into
three tranches that progressively vest each year subject to
satisfaction of the service condition. The CEO’s participation
was determined as 40% (Performance Rights) and 25%
(Service Rights) of TEC respectively.
< 5%
5%
5% –10%
>=10%
Percentage of rights
vesting
Nil
50% of the allocation
for the hurdle
Pro-rata between
50% and 100%
100% of the allocation
for the hurdle
AVJennings’ ROE over the three
year performance period
Percentage of rights
vesting
<12%
12%
15%
>=18%
Accounting
Nil
50% of the allocation
for the hurdle
75% of the allocation
for the hurdle
100% (Straight line
interpolation between
12% and 18%)
The fair value of the Rights at the date of the grant is
determined using an appropriate valuation model. The fair
value is expensed over the period in which the performance
and/or service conditions are fulfilled with a corresponding
increase in share-based payment reserve in equity. The
cumulative expense recognised for equity-settled transactions
at each reporting date until the vesting date reflects the
extent to which the vesting period has expired and the
Group’s best estimate of the number of equity instruments
that will ultimately vest. The expense or credit in the
Consolidated Statement of Comprehensive Income represents
the movement in cumulative expense recognised between the
beginning and end of that period. No expense is recognised
for awards that do not ultimately vest because non-market
performance and/or service conditions have not been met.
Where awards include a market or non-vesting condition, the
transactions are treated as vested irrespective of whether the
market or non-vesting condition is satisfied, provided that all
other performance and/or service conditions are satisfied.
Notes to the Consolidated Financial Statements 64 | AVJENNINGS LIMITED · ABN 44 004 327 771
28. SHARE-BASED PAYMENT PLANS (continued)
(c) Summary of rights granted
The following is the status of rights granted (both KMP and other executives) from FY15 onwards under the restructured
share-based remuneration:
FY2015 Grant
FY2016 Grant
FY2017 Grant
FY2018 Grant
Total
29. AUDITOR’S REMUNERATION
Ernst & Young
Audit and assurance services
Total
rights
granted
Rights
vested
to date
Rights
forfeited
to date
Unvested
rights at
30 June 2018
1,363,583
(474,158)
(252,408)
1,587,251
(592,493)
(232,816)
637,017
761,942
1,859,171
(252,799)
(97,085)
1,509,287
1,671,573
–
–
1,671,573
6,481,578
(1,319,450)
(582,309)
4,579,819
2018
$
2017
$
– Audit and review of the financial reports of the Group
297,540
303,974
– Share of audit and review costs of the financial reports of the Group’s joint ventures
6,499
3,901
Total auditor’s remuneration
304,039
307,875
30. EARNINGS PER SHARE (EPS)
Basic EPS is calculated by dividing the profit for the year attributable to ordinary equity holders of the Parent by the weighted
average number of ordinary shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to ordinary equity holders of the Parent by the sum of
the weighted average number of ordinary shares outstanding during the year (adjusted for treasury shares) and the weighted
average number of ordinary shares, if any, that would be issued on conversion of all the dilutive potential ordinary shares into
ordinary shares.
The following reflects the income and share data used in the basic and diluted EPS computations:
Profit attributable to ordinary equity holders of the Parent
Weighted average number of ordinary shares
Treasury shares
2018
$’000
31,347
2017
$’000
35,717
2018
Number
2017
Number
386,247,296
384,423,851
(495,632)
(842,089)
Weighted average number of ordinary shares for EPS
385,751,664
383,581,762
Notes to the Consolidated Financial Statements AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 65
31. 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
Contributed equity
Reserves
Share-based payment reserve
Retained earnings
Total equity
Profit for the year
Total comprehensive income for the year
2018
$’000
2017
$’000
61,959
53,454
225,245
216,740
6
6
6
6
167,943
160,436
3,896
53,400
2,898
53,400
225,239
216,734
–
–
–
–
(b) Guarantees entered into by the Parent Entity
The Parent Entity has not provided any financial guarantees other than those mentioned in notes 12(a), 12(c) 21(c) and 33.
(c) Contingent liabilities of the Parent Entity
Please refer to note 33 for details of the Parent Entity’s contingent liabilities.
32. COMMITMENTS
Operating lease commitments – Group 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
2018
$’000
2017
$’000
2,255
1,977
2,143
3,144
4,232
5,287
3,754
478
5,271
16
4,232
5,287
Notes to the Consolidated Financial Statements
66 | AVJENNINGS LIMITED · ABN 44 004 327 771
33. 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 21(c).
Contract performance bond facilities
The Parent Entity has entered into Deeds of Indemnity with
various controlled entities to indemnify the obligation of
those entities in relation to the Contract performance bond
facilities. Details of these entities are set out in note 21.
Contingent liabilities in respect of certain performance bonds,
granted by the Group’s financiers, in the normal course
of business as at 30 June 2018 amounted to $28,531,000
(2017: $26,936,000).
No liability is expected to arise.
Legal issues
From time to time a controlled entity defends actions served
on it in respect of rectification of building faults and other
issues. It is not practicable to estimate the amount, if any,
which the entity could be liable for in this respect. The
Directors anticipate that the resolution of any such matters
currently outstanding will not have a material effect on the
Group’s results.
Secured
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 21.
Performance guarantees
Contingent liabilities in respect of certain performance
guarantees, granted by the Group bankers in the normal
course of business to unrelated parties, at 30 June 2018,
amounted to $4,943,000 (2017: $7,796,000). No liability is
expected to arise.
Financial guarantees
Financial guarantees granted by the Group’s bankers
to unrelated parties in the normal course of business at
30 June 2018, amounted to $2,135,000 (2017: $2,135,000).
No liability is expected to arise.
34. SIGNIFICANT EVENTS AFTER THE BALANCE
SHEET DATE
No matter or circumstance has arisen since 30 June 2018
that has significantly affected, or may significantly affect:
a) the Group’s operations in future financial years; or
b) the results of those operations in future financial years; or
c) the Group’s state of affairs in future financial years.
35. NEW ACCOUNTING STANDARDS AND
INTERPRETATIONS
The new and amended standards adopted by the Group
for the year ended 30 June 2018 have not had a significant
impact on the current period or any prior period and are not
likely to have a significant impact on future periods.
Certain new accounting standards have been published
that are not mandatory for the year ended 30 June 2018
and have not been adopted early by the Group. The Group’s
assessment of the impact of these new standards is set out
below:
AASB 9 Financial Instruments: (effective 1 January 2018 /
applicable for the Group 1 July 2018)
AASB 9 addresses the classification, measurement and
derecognition of financial assets, financial liabilities and
hedging and a new impairment model for financial assets.
The adoption of AASB 9 is not expected to have a material
impact.
AASB 15 Revenue from Contracts with Customers: (effective
1 January 2018 / applicable for the Group 1 July 2018)
AASB 15 establishes a comprehensive framework for
determining whether, how much and when revenue is
recognised. It replaces existing revenue recognition guidance,
including AASB 118 Revenue and AASB 111 Construction
Contracts.
The core principle of AASB 15 is that revenue is recognised
when control of goods or services passes to the customer.
AASB 15 is unlikely to have a material impact on land and
built form revenue currently recognised on settlement.
However, the standard is expected to have a material impact
on the recognition of revenue from land sales prior to
settlement. AVJennings currently recognises revenue when an
unconditional contract for sales exists, the significant risks
and rewards of ownership have been transferred to the buyer,
and there is no managerial involvement to a degree usually
associated with ownership.
Notes to the Consolidated Financial Statements AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 67
AVJennings has performed an assessment of AASB 16 on its
existing operating lease arrangements as a lessee. Based
on the preliminary assessment and using a discount rate of
approximately 6.86%, the Group would recognise right of use
assets approximating 1% of total assets and lease liabilities
approximating 2% of total liabilities if the Standard were to be
implemented at 30 June 2018. Assuming there are no material
changes to the business, AVJennings expects the percentage
of right of use assets and lease liabilities to remain at similar
levels. The transition adjustment is yet to be determined and
will be calculated upon the finalisation of the assessment.
36. OTHER ACCOUNTING POLICIES
Significant accounting policies relating to particular items
are set out in the relevant notes. Other significant accounting
policies adopted in the preparation of the financial report are
set out below.
a) Basis of consolidation
The Consolidated Financial Statements comprise the financial
statements of AVJennings Limited and its subsidiaries as at
30 June 2018. Subsidiaries are entities over which the Group
has control. Control is achieved when the Group is exposed
to, or has rights to variable returns from its involvement with
the entity and has the ability to affect those returns through
its power to direct the activities of the entity. Subsidiaries are
consolidated from the date on which control is transferred to
the Group and deconsolidated from the date control ceases.
The financial statements of subsidiaries are prepared for the
same period as the Parent, adopting consistent accounting
policies. All intra-group assets and liabilities, equity, income,
expenses and cash flows are fully eliminated in preparing the
Consolidated Financial Statements.
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.
b) Business combinations
Business combinations are accounted for using the
acquisition method. This involves recognising at acquisition
date, separately from goodwill, the identifiable assets
acquired, the liabilities assumed and any non-controlling
interest in the acquiree. The identifiable assets acquired and
the liabilities assumed are measured at their acquisition date
fair values. Acquisition-related costs are expensed as incurred.
35. NEW ACCOUNTING STANDARDS AND
INTERPRETATIONS (continued)
AASB 15 Revenue from Contracts with Customers (continued)
AASB 15 establishes a five-step model to account for revenue
arising from contracts with customers and includes increased
disclosure requirements. The new standard is based on the
principle that revenue is recognised at a point in time when
control of the goods or service passes to the customer. For
certain contracts, the substance as well as legal clauses
will need to be considered in determining the point at which
control passes. This will require judgement, however, we have
summarised below the types of contractual arrangements
where revenue is currently recognised prior to settlement and
the Group’s assessment of the potential impact:
•
In the year to 30 June 2018, the company recognised
revenue on sales of land on deferred terms to builders
in New Zealand. Adoption of AASB 15 is not expected to
impact revenue recognition as the builder gains control
of the land on completion of the physical works and can
commence building at that point.
• Sales of englobo land on deferred terms are also not
expected to be impacted by the new standard. Control
passes when the contract is unconditional, physical works
are complete and the purchaser has unfettered rights to
the land - which can be before settlement.
• Revenue on sales to builders in Australia under put
and call arrangements, historically recognised prior to
settlement, may be deferred until settlement if it is only
at this point that control is considered to pass.
The Company intends to adopt the standard using the
modified retrospective approach which means that the
cumulative impact of the adoption will be recognised in
retained earnings as of 1 July 2018 with no restatement
of comparatives. Consequently, for contracts that had
not settled and control had not passed at 30 June 2018,
but revenue could be recognised under AASB 118 Revenue
because the significant risks and rewards had transferred
to the buyer, revenue and costs will be recognised again on
settlement from 1 July 2018. The post-tax profit effect of
amounts recognised in the year ended 30 June 2018 will be
reversed by adjusting opening retained earnings.
For contracts where control is deemed to have passed
to the purchaser before 30 June 2018, revenue will not
be recognised again on settlement and there will be no
adjustment to retained earnings.
AASB 16 Leases: (effective 1 January 2019/applicable
for the Group 1 July 2019)
AASB 16 sets out the principles for the recognition,
measurement, presentation and disclosure of leases. This
standard will predominantly affect lessees, bringing all major
leases on balance sheet. Whilst the total amount of expense
recorded in the income statement is expected to remain
unchanged over the full lease term, the timing of expense
recognition could accelerate. The expense would be re-
characterised as interest expense and amortisation expense
instead of rent. Assets and liabilities will increase as “right of
use assets” and “leasing liabilities” are recorded for operating
leases.
Notes to the Consolidated Financial Statements 68 | AVJENNINGS LIMITED · ABN 44 004 327 771
36. OTHER ACCOUNTING POLICIES (continued)
e) Foreign currency translation
c) Leases
Leases where the Group, as lessee, has substantially all
the risks and rewards of ownership are classified as finance
leases. The Group did not have any finance leases at
year end.
Leases in which a significant portion of the risks and rewards
of ownership are not transferred to the Group as lessee,
are classified as operating leases. Payments made under
operating leases (net of any incentives received from the
lessor) are recognised as an expense on a straight-line basis
over the period of the lease.
Lease income from operating leases where the Group is a
lessor is recognised in income on a straight-line basis over the
lease term. The respective leased assets are included in the
Consolidated Statement of Financial Position based on their
nature.
(i) Functional and presentation currency
The Group’s functional and presentation currency is
Australian Dollars.
(ii)
Translation of Group Companies’ functional currency
to presentation currency
The results and financial positions 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 Statement of Financial
•
Position presented are translated at the closing rate at the
date of that Statement of Financial Position;
income and expenses for each Statement of
Comprehensive Income are translated at average
exchange rates; and
• all resulting exchange differences are recognised in other
d) Goods and services tax (GST)
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
operation 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.
Revenues, expenses and assets are recognised net of the
amount of GST except:
• when the GST incurred on a sale or purchase of assets or
services is not payable to or recoverable from the taxation
authority, in which case the GST is recognised as part of
the revenue or as part of the cost of acquisition of the
asset or 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.
Commitments and contingencies are disclosed net of the
amount of GST recoverable from, or payable to, the taxation
authority.
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.
Notes to the Consolidated Financial Statements
Directors’ Declaration
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 69
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 Group’s financial position as at 30 June 2018 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 25; and
iii) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
2) This declaration has been made after receiving the declarations required to be made to the Directors in accordance with
section 295A of the Corporations Act 2001 for the financial year ended 30 June 2018.
3) In the opinion of the Directors, as at the date of this declaration, there are reasonable grounds to believe that the members
of the Closed Group identified in note 21 will be able to meet any obligations or liabilities to which they are or may become
subject, by virtue of the Deed of Cross Guarantee.
On behalf of the Board
Simon Cheong
Director
5 September 2018
Peter Summers
Director
70 | AVJENNINGS LIMITED · ABN 44 004 327 771
Independent Auditor’s Report to the Members
of AVJennings Limited
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
We have audited the financial report of AVJennings Limited (the Company) and its subsidiaries (collectively the Group), which
comprises the consolidated statement of financial position as at 30 June 2018, 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 to the financial statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2018 and of its consolidated
financial performance for the year ended on that date; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the
ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description
of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to
respond to our assessment of the risks of material misstatement of the financial report. The results of our audit procedures,
including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying
financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 71
Independent Auditor’s Report to the Members
of AVJennings Limited (continued)
1. Net realisable value (NRV) of inventories
Why significant
How our audit addressed the key audit matter
Approximately 76% of the Group’s total assets comprise
development inventories. Inventories are carried at the lower
of cost and net realisable value and the directors assess this
with reference to the following:
Our audit procedures focused on assessing the judgments
and assumptions made by the Group in the feasibilities
underpinning the net realisable value assessments.
Our procedures included the following:
Inventory costs incurred to date
Capitalised costs to date
Forecast costs to complete
Average historic and forecast selling price
and sales rate per project
This was considered a key audit matter as it involves a
significant degree of judgment and can present a range
of alternative outcomes. The net realisable value analysis
performed was based on a combination of the current
project feasibility models and an overlay analysis that takes
into account changes to the underlying assumptions based
on the impact of changing market conditions and changes to
strategy.
There is judgment involved in determining the appropriate
allocation of cost of sales recognised upon the realisation
of inventories.
Disclosure of inventories is included in Note 6 of the
financial report.
Disclosure of significant judgments is included in Note 18
of the financial report.
2. Revenue and gross margin recognition
Why significant
The Group’s policy is to recognise revenue when the
significant risks, rewards and ownership and effective
control has been transferred to the buyer. This is generally
once settlement has occurred, however revenue may be
recognised prior to settlement when a signed unconditional
contract for sale exists, and the significant risks and rewards
of ownership and effective control have been transferred to
the buyer, and there is no ongoing management involvement
to the degree usually associated with ownership.
The Group recognised $95.2 million in sales revenue prior to
settlement as at 30 June 2018.
Revenue recognition for unsettled sales is considered an area
of judgment.
The gross margin recognised on development sales is based
upon the costs attributed to the inventory asset prior to sale
and which can be subject to judgment.
Disclosure of revenue is included in Note 2 of the financial
report.
Disclosure of significant judgments is included in Note 18 of
the financial report.
Assessed and tested the effectiveness of relevant
controls over cost accumulation
Interviewed Project Managers to understand the status
and progress of a sample of developments
Assessed the impairment methodology, project
margin analysis and feasibility models prepared by
management for a sample of developments in progress
Identified higher risk projects, based on our judgment, and
evaluated the assumptions adopted. In doing so, we:
Compared the forecast sales revenue assumptions
to the most recent historical or comparable sales
and external market data where available
Corroborated the costs projected to signed contracts
or actual costs incurred for current or comparable
projects
Assessed contingency estimates for remaining
development risks
Performed sensitivity analyses in relation to the key
forward looking assumptions including sales price
achieved, cost per lot and escalation rates
Tested the mathematical accuracy of the feasibilities
tested.
How our audit addressed the key audit matter
Our audit procedures included the following:
Assessed the accounting policies and judgments
applied by the Group on the recognition of revenue
and determination of cost of sales for appropriateness.
Assessed the recognition of revenue for a sample
of unsettled sales to ensure compliance with the
Group’s accounting policies. In doing so, for
identified samples, we:
Reviewed underlying sales contracts
Performed site visits close to year end
Obtained relevant documents to determine the
status of the projects at year end
We assessed whether revenue and cost of sales
were recognised in the correct period for revenue
recognised around the balance sheet date.
Assessed the appropriate recognition of cost of
sales for the contracts selected.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
72 | AVJENNINGS LIMITED · ABN 44 004 327 771
Independent Auditor’s Report to the Members
of AVJennings Limited (continued)
Information Other than the Financial Report and Auditor’s Report
The directors are responsible for the other information. The other information comprises the information in the Company’s
Annual Report for the year ended 30 June 2018, but does not include the financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form of
assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based upon the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors 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 control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
• Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the
financial report represents the underlying transactions and events in a manner that achieves fair presentation.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 73
Independent Auditor’s Report to the Members
of AVJennings Limited (continued)
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, related safeguards.
From the matters communicated to the Directors, we determine those matters that were of most significance in the audit of the
financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 16 to 22 of the Directors’ Report for the year ended 30 June 2018.
In our opinion, the Remuneration Report of AVJennings Limited for the year ended 30 June 2018, complies with section 300A of
the Corporations Act 2001.
Responsibilities
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.
Ernst & Young
Mark Conroy
Partner
Sydney
5 September 2018
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
74 | AVJENNINGS LIMITED · ABN 44 004 327 771
Shareholder Information
As at 12 September 2018
1. NUMBER OF SHAREHOLDERS AND DISTRIBUTION OF EQUITY SECURITIES
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
Australian
Securities
Exchange
Singapore
Exchange
Total
613
862
376
914
179
2,944
371
265
593
189
203
26
1,276
126
878
1,455
565
1,117
205
4,220
497
Ordinary
Shares
%
209,386,826
53.02
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 75
Shareholder Information
As at 12 September 2018
3. TWENTY LARGEST SHAREHOLDERS ON THE AUSTRALIAN REGISTER
Name
The Central Depository (Pte) Ltd
BNP Paribas Nominees Pty Ltd
HSBC Custody Nominees (Australia) Ltd
Citicorp Nominees Pty Ltd
Brazil Farming Pty Ltd
Gillcorp Pty Limited
John E Gill Operations Pty Ltd
John E Gill Trading Pty Ltd
Pacific Custodians Pty Ltd
JP Morgan Nominees Australia Ltd
Horrie Pty Ltd
Luton Pty Ltd
URB Investments Ltd
Mr D R M Gill and Mrs J M Gill
Mr Bradley John Newcombe
Jamplat Pty Ltd
Ago Pty Ltd
Hillmorton Custodians Pty Ltd
Peter Summers
Carlcorp Pty Ltd
Total
Ordinary
Shares
%
216,203,146
54.75
16,038,210
15,440,157
10,121,647
7,271,016
6,343,003
5,609,105
5,598,712
4,958,808
4,163,713
3,585,355
2,773,770
2,353,693
1,958,511
1,825,000
1,700,000
1,682,044
1,236,954
1,171,953
1,125,313
4.06
3.91
2.56
1.84
1.61
1.42
1.42
1.26
1.05
0.91
0.70
0.60
0.50
0.46
0.43
0.43
0.31
0.30
0.28
311,160,110
78.79
76 | AVJENNINGS LIMITED · ABN 44 004 327 771
Shareholder Information
As at 12 September 2018
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
Lim Chin Tiong
Raffles Nominees (Pte) Ltd
Tsang Sze Hang
DBS Nominees Pte Ltd
Rowland Wong Kwok Ho
Vesmith Investments Pte Ltd
Pansbury Investments Pte Ltd
Hexacon Construction Pte Ltd
UOB Kay Hian Pte Ltd
OCBC Nominees Singapore Pte Ltd
Teo Chiang Long
Ng Poh Cheng
Chng Bee Suan
Wee Kim Choo @ Elizabeth Sam
Lim Kong Wee
Chua Hung Koon Edmond
Total
Ordinary
Shares
%
184,115,725
46.62
11,570,545
1,705,293
1,502,060
1,408,420
1,045,424
860,275
836,015
769,292
652,222
509,716
368,480
338,613
275,162
257,496
220,627
218,620
215,068
206,465
197,900
2.93
0.43
0.38
0.36
0.26
0.22
0.21
0.19
0.17
0.13
0.09
0.09
0.07
0.07
0.06
0.06
0.05
0.05
0.05
207,273,418
52.48
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 394,926,905.
Company Particulars
AVJENNINGS LIMITED · ANNUAL REPORT 2018 | 77
DIRECTORS
Mr Simon Cheong
Mr Jerome Rowley
Mrs Elizabeth Sam
Mr Bobby Chin
Mr Lai Teck Poh
Mr Bruce Hayman
Mr Tan Boon Leong
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
200 George Street
Sydney NSW 2000
BANKERS
SHARE REGISTRY
Australia
Link Market Services Ltd
Tower 4
727 Collins Street, Docklands Vic 3008
Telephone: +61 1300 554 474
Singapore
The Central Depository (Pte) Ltd
11 North Buona Vista Drive #06-07
The Metropolis Tower 2
Singapore 138589
Telephone +65 6535 7511
ANNUAL GENERAL MEETING
The Annual General Meeting of the Company
will be held at:
Metropol Meeting Room 2
Crown Metropol Melbourne
8 Whiteman Street
Southbank Vic 3006.
Friday, 23 November 2018 at 10.00 a.m.
DIVIDENDS
Commonwealth Bank of Australia Ltd (Bankwest Division)
DBS Bank
HSBC Bank Australia Ltd
United Overseas Bank Ltd
Oversea-Chinese Banking Corporation Ltd
Dividends paid in the year under review:
Final Dividend of $0.035 for FY17 paid on 19 September 2017
Interim Dividend of $0.02 for FY18 paid on 19 April 2018
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
11 North Buona Vista Drive #06-07
The Metropolis Tower 2
Singapore 138589
through SGX Globalquote (formerly known as
the Central Limit Order Book System (CLOB)).