Annual Report
for year ended 30 June 2009
ABN 23 106 719 868
CORPORATE DIRECTORY
Directors
Robert Dobson Millner
Non-Executive Director and Chairman
David Capp Hall
Non-Executive Director
Alexander James Payne
Non-Executive Director
Geoffrey Guild Hill
Non-Executive Director
Ian Thomas Huntley
Non-Executive Director (appointed 10 February 2009)
Chief Executive Officer
Thomas Charles Dobson Millner
Secretary
Richard James Pillinger
Registered Office
Level 2, 160 Pitt Street Mall,
Sydney NSW 2000
Telephone:
(02) 9210 7000
Facsimile:
(02) 9210 7099
Postal Address: GPO Box 5015, Sydney 2001
Auditors
Ruwald & Evans
Level 1, 276 Pitt Street, Sydney NSW 2000
Share Registry
Computershare Investor Services Pty Limited
60 Carrington Street,
Sydney 2000
Australian Stock Exchange Code
Ordinary Shares
BKI
Website
http//:www.brickworksinvestments.com.au
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
Contents
Page No.
Financial Highlights
List of Securities at 30 June 2009
Group Profile
Chairman’s Address
Directors’ Report
Corporate Governance
Consolidated Income Statement
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Auditor’s Independence Declaration
ASX Additional Information
2
4
7
8
11
19
26
27
28
30
31
51
52
53
54
2009 Annual Report
1
FINANCIAL HIGHLIGHTS
(cid:2) Revenue Performance
Dividend/distribution income - Ordinary
Dividend/distribution income - Special
(cid:2) Profits
Operating profit before tax but before special dividend
income, realised and unrealised losses on investment
portfolio and discount on acquisition
Dividend income - Special
Up
Up
Up
Up
Realised and impairment losses on investment portfolio
after tax
Down
Discount recognised on acquisition of controlled entity
Total income tax credit / (expense)
Net loss attributable to Minority Interests
Up
Up
Up
Net profit for the year attributable to shareholders
Down
% Change
15.5%
45.2%
13.8%
45.2%
247.7%
100.0%
218.1%
100.0%
2.1%
$’000
19,907
1,295
21,753
1,295
(6,833)
3,323
2,428
146
22,112
to
to
to
to
to
to
to
to
to
(cid:2) Portfolio
Total Portfolio Value
(cid:2) Earnings per share*
Up
9.3%
to
478,275
Basic earnings per share before special dividend income
and realised gains on investment portfolio
Down
8.7%
Basic earnings per share after special dividend income
and realised gains on investment portfolio
Down
20.8%
to
to
5.93
6.34
* Includes increased share capital post the acquisition of Huntley Investment Company Limited
(cid:2) Net Tangible Asset (NTA) History:
30/06/04
30/06/05
30/06/06
30/06/07
30/06/08
30/06/09
NTA Before Tax
NTA After Tax
$1.08
$1.06
$1.28
$1.20
$1.43
$1.32
$1.69
$1.51
$1.52
$1.41
$1.22
$1.19
2
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
FINANCIAL HIGHLIGHTS (continued)
(cid:2) Fully franked final dividend of 3.0 cents per share.
This brings the total fully franked dividends for the year to 6.0 cents per share on the increased share capital arising
from the takeover of Huntley Investment Company Limited (2008: 6.0 cents per share).
(cid:2) Dividend History (cents per share)
Interim
Final
Special
Total
30/06/04
30/06/05
30/06/06
30/06/07
30/06/08
30/06/09
-*
2.0
-
2.0
2.1
2.2
-
4.3
2.5
2.5
1.0
6.0
2.6
2.7
-
5.3
3.0
3.0
-
6.0
3.0
3.0
-
6.0
* This Company was listed on ASX 12 December 2003, no interim dividend is applicable.
2009 Annual Report
3
List of securities held and their market value at 30 June 2009 were (combined Investment and
Trading Portfolios):
Stock
Banks
Australia and New Zealand Banking Group Limited
Bank of Queensland Limited
Bendigo Bank Limited
Commonwealth Bank
National Australia Bank Limited
Westpac Banking Corporation
Westpac SPS II Institutional Offer
Westpac Stapled Preferred Securities
Capital Goods
GWA International Limited
United Group Limited
Commercial Services & Supplies
Brambles Limited
Campbell Brothers Limited
Salmat Limited
Seek Limited
Skilled Group Limited
The MAC Services Group Limited
Transfield Services Limited
Consumer Durables & Apparel
Gazal Corporation Limited
Consumer Services
Crown Limited
Invocare Limited
Tabcorp Holdings Limited
Tattersall's Limited
Diversified Financials
Australian Securities Exchange Limited
Choiseul Investments Limited
Macquarie Group Limited
Milton Corporation Limited
Perpetual Limited
4
Shares
Held
320,224
281,273
486,092
820,000
1,764,191
1,135,465
90,165
20,840
1,310,000
100,000
905,952
318,629
786,085
459,246
394,826
750,035
400,000
211,865
90,574
751,000
253,900
951,872
174,000
1,082,985
162,213
106,606
149,510
Market
Value
($’000)
5,295
2,537
3,369
31,920
39,590
22,930
9,400
2,038
117,079
3,000
1,032
4,032
5,354
6,487
2,712
1,916
484
881
912
18,746
206
206
657
4,356
1,798
2,418
9,229
6,424
4,689
6,334
1,546
4,256
23,249
Portfolio
Weight
1.11%
0.53%
0.70%
6.67%
8.28%
4.79%
1.97%
0.43%
24.48%
0.63%
0.22%
0.84%
1.12%
1.36%
0.57%
0.40%
0.10%
0.18%
0.19%
3.92%
0.04%
0.04%
0.14%
0.91%
0.38%
0.51%
1.93%
1.34%
0.98%
1.32%
0.32%
0.89%
4.86%
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
List of securities (continued):
Stock
Energy
Caltex Australia Limited
New Hope Corporation Limited
Santos Limited
Woodside Petroleum Limited
Food, Beverages & Tobacco
Coca Cola Amatil Limited
Graincorp Limited
Lion Nathan Limited
Food & Staples Retailing
AWB Limited
Metcash Limited
Wesfarmers Limited
Woolworths Limited
Health Care Equipment & Services
Clover Corporation Limited
Sonic Healthcare Limited
Insurance
AMP Limited
AXA Asia Pacific Holdings Limited
Insurance Australia Group Limited
QBE Insurance Group Limited
Suncorp-Metway Limited
Suncorp-Metway Limited Convertible
Preference Shares
Materials
Alumina Limited
BHP Billiton Limited
Bluescope Steel Limited
Boral Limited
Brickworks Limited
Onesteel Limited
Orica Limited Step up Preference Securities
Rio Tinto Limited
2009 Annual Report
Shares
Held
Fair
Value
($’000)
Portfolio
Weight
%
86,950
14,760,452
98,000
360,000
618,000
93,444
227,300
782,000
1,505,833
638,570
609,000
858,000
42,500
973,833
426,000
1,076,446
594,244
390,000
40,000
1,021,912
1,361,000
233,568
81,000
435,000
800,000
10,000
49,562
1,200
67,310
1,428
15,550
85,488
5,296
663
2,627
8,586
919
6,430
14,280
16,050
37,679
176
519
695
4,743
1,653
3,746
11,810
2,597
3,464
28,013
1,472
47,190
591
330
5,903
2,056
890
2,179
60,611
0.25%
14.07%
0.30%
3.25%
17.87%
1.11%
0.14%
0.55%
1.80%
0.19%
1.34%
2.99%
3.36%
7.88%
0.04%
0.11%
0.18%
0.99%
0.35%
0.78%
2.47%
0.54%
0.72%
5.86%
0.31%
9.87%
0.12%
0.07%
1.23%
0.43%
0.19%
0.46%
12.67%
5
List of securities (continued):
Stock
Media
Consolidated Media Holdings
Fairfax Media Limited
Ten Network Holdings Limited
West Australian Newspapers Holdings Limited
Real Estate
The GPT Group
Westfield Group
Retailing
Shares
Held
75,574
2,100,000
747,429
372,458
1,000,000
193,157
ARB Corporation Limited
673,437
Telecommunications Services
SP Telemedia Limited
Telstra Corporation Limited
Transportation
Lindsay Australia Limited
Macquarie Infrastructure Group
Qantas Airways Limited
Transurban Group
Utilities
AGL Energy Limited
APA Group
Total Investments
Bank Deposit
3,322,223
5,228,000
3,120,034
762,892
602,500
134,581
1,056,000
790,000
TOTAL PORTFOLIO
Fair
Value
($’000)
Portfolio
Weight
%
171
2,552
871
1,609
5,203
485
2,192
2,677
2,390
2,390
1,179
17,670
18,849
546
1,087
1,205
560
3,398
14,170
2,157
16,327
442,457
35,818
478,275
0.04%
0.53%
0.18%
0.34%
1.09%
0.10%
0.46%
0.56%
0.50%
0.50%
0.25%
3.69%
3.94%
0.11%
0.23%
0.25%
0.12%
0.71%
2.96%
0.45%
3.41%
92.51%
7.49%
100.00%
The Group is not a substantial shareholder in any of the investee corporations in accordance with the
Corporations Act 2001, as each equity investment represents less than 5% of the issued capital of the
investee corporation.
6
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
GROUP PROFILE
Brickworks Investment Company Limited (the Group) is a Listed Investment Company on the Australian Stock
Exchange. The Group invests in a diversified portfolio of Australian shares, trusts and interest bearing securities.
Shares were listed on the Australian Stock Exchange Limited commencing 12 December 2003.
Corporate Objectives
The Group aims to generate an increasing income stream for distribution to its shareholders in the form of fully
franked dividends, to the extent of its available imputation tax credits, through long-term investment in a
portfolio of assets that are also able to deliver long term capital growth to shareholders.
Investment Strategy
The Group is a long-term investor in companies, trusts and interest bearing securities with a focus on
Australian entities. It primarily seeks to invest in well-managed businesses with a profitable history and with the
expectation of sound dividend and distribution growth.
Dividend Policy
The Group will pay the maximum amount of realised profits after tax to its shareholders in the form of fully
franked dividends to the extent permitted by the Corporations Act, the Income Tax Assessment Act and
prudent business practices from profits obtained through interest, dividends and other income it receives from
its investments.
Dividends will be declared by the Board of Directors out of realised profit after tax, excluding realised capital
profit from any disposals of long-term investments.
Management
As previously announced, on 1 December 2008 the Group internalised the portfolio management function.
Prior to this, Souls Funds Management Limited acted as Portfolio Manager.
The Group also engages Corporate and Administrative Services Pty Ltd to provide accounting and group
secretarial services.
2009 Annual Report
7
CHAIRMAN’S ADDRESS
Dear Shareholders,
I am pleased to enclose the 6th Annual Report of Brickworks Investment Company Limited for the year ended
30 June 2009.
Income from operating activities before special investment revenue and net gains / (losses) on investment
portfolio increased 11% to $23.2m. Whilst Special Investment Revenue increased 45% to $1.3m.
BKI has increased net operating profit before special investment revenue and net gains / (losses) on investment
portfolio by 13% to $20.7m. Net Profit After Tax was $22.1m, down 2% on the previous corresponding period.
Performance
BKI’s Net Portfolio Return (after all operating expenses, payment of both income and capital gains tax and the
reinvestment of dividends) for the 12 months to 30 June 2009 was negative 15.7% compared to the S&P/ASX
300 Accumulation Index which declined by 20.3%. The chart below shows historical portfolio returns
benchmarked to the S&P/ASX 300 Accumulation Index:
BKI’s Share Price Performance (including the reinvestment of dividends) for the 12 months to 30 June 2009
was negative 8.9%. This compares favourably to the S&P/ASX 300 Accumulation Index which returned
negative 20.3% over the same period, an out performance of 11.4%. The chart below shows historical share
price performance benchmarked to the S&P/ASX 300 Accumulation Index:
8
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
CHAIRMAN’S ADDRESS - Continued
Portfolio Movements
BKI continues to focus on investing for the long term with major investments over the 12 months to 30 June 2009
including BHP Billiton, Telstra Corporation, Coca-Cola Amatil, Metcash Limited, Westpac Banking Corporation
SPSII, United Group, ARB Corporation and Woolworths Limited.
BKI also participated in numerous capital raisings through Entitlement Offers, Placements and Share Purchase
Plans with major investments including Commonwealth Bank, Wesfarmers Limited, Alumina Limited, Bluescope
Limited, OneSteel Limited, GPT Group and Seek Limited.
The investment portfolio is continually reviewed by the Investment Committee to determine if any stocks held
within it are, in the view of the committee, impaired. This review primarily focuses on the ability of the company
to pay dividends over the long term.
If there is objective evidence found that may impact future cash flows of the company resulting from significant
changes in the technological, market, economic or legal environment in which that company operates BKI will
consider it impaired and normally dispose of the stock. In the event that an investment is considered impaired,
but has not yet been disposed of, an impairment charge is recognised in the Income Statement.
The impairment review undertaken by the Investment Committee identified an unrealised impairment loss of $1.4m.
The portfolio is re-valued daily on a mark to market basis and as such the impairment charge does not impact BKI’s NTA.
In accordance with BKI’s investment strategy, there is an expectation from companies in which we invest that
they continue to pay dividends over the long term. Major divestments from the BKI Investment Portfolio as a
result of significantly reduced dividend payments include Babcock & Brown Infrastructure Group, BBI EPS
Limited, Alesco Corporation, Wattyl Limited, Vision Group Holdings, Specialty Fashion Group, Bravura
Solutions and CBD Energy. These sales resulted in a realised loss of $5.4m.
St George Bank Limited was also divested following the successful takeover by Westpac Banking Corporation.
List of Top 20 Securities held as at 30 June 2009:
Stock
New Hope Corporation Limited
BHP Billiton Limited
National Australia Bank Limited
Commonwealth Bank
1
2
3
4
5 Westpac Banking Corporation
6
Telstra Corporation Limited
7 Woolworths Limited
8 Woodside Petroleum Limited
9 Wesfarmers Limited
10 AGL Energy Limited
11 QBE Insurance Group Limited
12 Westpac Banking Corporation SPSII
13 Campbell Brothers Limited
14 Metcash Limited
15 Australian Securities Exchange Limited
16 Macquarie Group Limited
17 Brickworks Limited
18 Brambles Limited
19 Coca Cola Amatil Limited
20 Australia and New Zealand Banking Group Limited
2009 Annual Report
Shares
Held
14,760,452
1,361,000
1,764,191
820,000
1,135,465
5,228,000
609,000
360,000
638,570
1,056,000
594,244
90,165
318,629
1,505,833
174,000
162,213
435,000
905,952
618,000
320,224
Fair
Value
($’000)
67,310
47,190
39,590
31,920
22,930
17,670
16,050
15,550
14,280
14,170
11,810
9,400
6,487
6,430
6,424
6,334
5,903
5,354
5,296
5,295
Portfolio
Weight *
14.07%
9.87%
8.28%
6.67%
4.79%
3.69%
3.36%
3.25%
2.99%
2.96%
2.47%
1.97%
1.36%
1.34%
1.34%
1.32%
1.23%
1.12%
1.11%
1.11%
9
CHAIRMAN’S ADDRESS - Continued
Huntley Investment Company Limited
The Huntley Investment Company acquisition was completed under compulsory acquisition
on the 23rd January 2009. Managing Director of Huntley Investment Company, Mr Ian Huntley has since
accepted positions on the BKI Board and Investment Committee. Ian brings a wealth of knowledge and
experience to BKI.
Dividends
The Final Dividend has been maintained at 3 cents per share fully franked on the increased share capital
resulting from the takeover of Huntley Investment Company Limited during the year. The record date will be
21 August 2009 with a payment date of 4 September 2009.
As at 30 June 2009 BKI was trading on a historical fully franked dividend yield of 5.7%.
Operating Expenses
Operating Expenses were $1.4m as at the 30 June 2009, a reduction of 29% on the corresponding period.
BKI’s Management Expense Ratio (MER) has decreased from 0.46% to 0.31% over the financial year. It is
important to note that the latest MER figure also contains 5 months of fees from the previous external
management arrangement. Based on the present level of net tangible assets, BKI is confident that the MER at
financial year end 2010 should be approximately 0.20% - 0.25%.
Outlook
BKI is expecting a substantial fully franked special dividend payment from New Hope Corporation Limited (to
be paid in conjunction with the final 2009 year dividend in November 2009). This additional income places BKI
in a very strong position for the upcoming financial year.
Despite some negativity surrounding company earnings and reduced dividend income expected in the
forthcoming reporting season, there continues to be opportunities for the long term investor. There are many
well managed, profitable businesses with strong balance sheets and attractive dividend yields within the
Australian market.
As at 30 June 2009 BKI held $38.7m in cash and dividends receivable, representing some 8.0% of the total
assets. The strong cash position places the company well and we will continue to take advantage of
investment opportunities when they arise.
Yours sincerely,
Robert Millner
Chairman
Sydney, 11 August 2009
10
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
DIRECTORS’ REPORT
The directors of Brickworks Investment Company Limited present the following report on the Company and its
controlled entities (the Group) for the year ended 30 June 2009.
1. Directors
The following persons were directors since the start of the financial year and up to the date of this report unless
otherwise stated:
Robert Dobson Millner, FAICD – Non-Executive Director and Chairman
Mr Millner has 25 years experience as a Company Director. During the past three years, Mr Millner has also
served as a Director of the following other listed companies:
• Milton Corporation Limited*
• Choiseul Investments Limited*
• New Hope Corporation Limited*
• Washington H Soul Pattinson and Company Limited*
• SP Telemedia Limited*
• Brickworks Limited*
• Souls Private Equity Limited*
• Australian Pharmaceutical Industries Limited*
* denotes current directorship
Special Responsibilities:
• Chairman of the Board
• Chairman of the Nomination Committee
• Chairman of the Investment Committee
• Member of the Remuneration Committee
David Capp Hall, FCA, FAICD – Independent Non-Executive Director
Mr Hall is a Chartered Accountant with experience in corporate management and finance. He holds
directorships in other companies and is the Chairman of the audit committee. During the past three years,
Mr Hall also served as a Director of the following listed companies:s
• Undercoverwear Limited
Special Responsibilities:
• Chairman of the Audit Committee
• Member of the Remuneration Committee
• Member of the Nomination Committee
2009 Annual Report
11
DIRECTORS’ REPORT
Alexander James Payne, B.Comm, Dip Cm, FCPA, FCIS, FCIM - Non-Executive Director
Mr Payne is Chief Financial Officer of Brickworks Limited and has considerable experience in finance and
investment and is a member of the Audit Committee.
Special Responsibilities:
• Member of the Audit Committee
• Member of the Investment Committee
• Chairman of the Remuneration Committee
• Member of the Nomination Committee
Geoffrey Guild Hill, B.Econ., MBA, FCPA, ASIA FAICD – Independent Non-Executive Director
A merchant banker, Mr Hill has identified and implemented mergers and takeovers and has acted for a wide
range of corporate clients in Australia and overseas.
During the past three years, Mr Hill has served as a Director of the following listed companies:
• Heritage Gold NZ Limited*
• Hills Industries Limited*
• Centrex Metals Limited*
• Metals Finance Corporation Limited*
• Souls Private Equity Limited (alternate director)
• Huntley Investment Company Limited
• Enterprise Energy NL
• Biron Capital Limited
• Undercoverwear Limited
* denotes current directorship
Special Responsibilities:
• Member of the Audit Committee
• Member of the Remuneration Committee
• Member of the Nomination Committee
Ian Thomas Huntley, BA – Independent Non-Executive Director
After a career in financial journalism Mr Huntley acquired “Your Money Weekly” newsletter in 1973. Over the
following 33 years, Mr Huntley built the Your Money Weekly newsletter into one of Australia’s best known
investment advice publications. He and partners sold the business to Morningstar Inc of the USA in mid 2006.
Mr. Huntley continues an active role as Publisher, Huntley’s Your Money Weekly.
During the past three years, Mr Huntley has served as a Director of the following listed companies:
• Huntley Investment Company Limited
Special Responsibilities:
• Member of the Investment Committee
• Member of the Remuneration Committee
• Member of the Nomination Committee
12
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
DIRECTORS’ REPORT - Continued
2. Company Secretary
Richard Pillinger, BSc, CA
Mr. Pillinger is a Chartered Accountant with extensive experience in public practice and commercial financial roles.
3. Principal Activities
The principal activities of the Group during the financial year were that of a Listed Investment Company (LIC)
primarily focused on long term investment in ASX listed securities. There have been no significant changes in
the nature of those activities during the year.
4. Operating Results
The consolidated profit of the Group after providing for income tax amounted to $22,112,000 (2008: $22,576,000).
5. Review of Operations
The Australian share market endured a difficult period during the year ending 30 June 2009 as a result of credit
issues and global financial turmoil. Despite this, the group enjoyed another successful year with total income
from operating activities increasing by 11.2% and overall profits after tax but before net gains / (losses) on the
investment portfolio increasing by 14.4%.
The investment focus during the year again concentrated on managing the existing portfolio by continuing to
add on existing holdings as well as adding new companies and investment products to the investment
portfolio. Major investments over the 12 months to 30 June 2009 included BHP Billiton, Telstra Corporation,
Coca-Cola Amatil, Metcash Limited, Westpac Banking Corporation SPSII, United Group, ARB Corporation and
Woolworths Limited.
The group also participated in numerous capital raisings through Entitlement Offers, Placements and Share
Purchase Plans with major investments including Commonwealth Bank, Wesfarmers Limited, Alumina Limited,
Bluescope Limited, OneSteel Limited, GPT Group and Seek Limited.
The takeover of Huntley Investment Company Limited added further diversification to the investment portfolio
which has strengthened the Group’s position. A discount on acquisition of $3.32 million was recognised in the
consolidated results of the Group for the year.
An unrealised impairment charge of $1.0 million after tax on the investment portfolio was recognised in net
profits during the year. The portfolio is continuously marked to market through the revaluation reserve during
the year, so this impairment charge has no impact on the net tangible assets of the group.
6. Financial Position
The net assets of the Group increased during the financial year by $59.7 million to $471.1 million.
This movement has largely resulted from the following factors;
• Net assets acquired on takeover of Huntley Investment Company Limited of $105.8 million;
• Market value decrease in the investment portfolio of $39.9 million net of tax.
7. Employees
The Group has one employee as at 30 June 2009 (2008: Nil)
2009 Annual Report
13
DIRECTORS’ REPORT - Continued
8. Significant changes in the state of affairs
Other than as stated above and in the accompany Financial Report, there were no significant changes in the
state of affairs of the Group during the reporting year.
9. Likely Developments and Expected Results
The operations of the Group will continue with planned investments in Australian equities and fixed interest
securities. No information is included on the expected results of those operations and the strategy for particular
investments, as it is the opinion of the directors that this information would prejudice the interests of the Group
if included in this report.
10. Significant Events after Balance Date
The directors are not aware of any matter or circumstance that has arisen since the end of the year to the date
of this report that has significantly affected or may significantly affect:
i. the operations of the Company and the entities that it controls;
ii. the results of those operations; or
iii. the state of affairs of the Company in subsequent years.
11. Dividends
There were two dividend payments during the year ended 30 June 2009.
On 29 August 2008, a final ordinary dividend of $8,728,998 (3.0 cents per share fully franked) was paid out of
retained profits at 30 June 2008.
On 12 March 2009, an interim ordinary dividend of $11,743,934 (3.0 cents per share fully franked) was paid
out of retained profits at 31 December 2008.
In addition, the directors have declared a final ordinary dividend of $11,824,290 (3.0 cents per share fully
franked) to be paid out of out of retained profits at 30 June 2009 and payable on 4 September 2009.
At 30 June 2009 there are $11,916,000 of franking credits available to the Group (2008: $3,069,000) after
allowing for payment of the final, fully franked dividend.
12. Environmental Regulations
The Group’s operations are not materially affected by environmental regulations.
14
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
DIRECTORS’ REPORT - Continued
13. Meetings of Directors
The numbers of meetings of the Board of Directors and each Board Committee held during the year to
30 June 2009, and the numbers of meetings attended by each Director were:
Board
Investment
Audit
Remuneration
Attended
Eligible
to attend
Attended
Eligible
to attend
Attended
Eligible
to attend
Attended
Eligible
to attend
RD Millner 1
AJ Payne
DC Hall
GG Hill 2
IT Huntley 3
9
9
9
5
2
9
9
9
7
2
12
12
-
-
4
12
12
-
-
4
2
2
2
2
-
2
2
2
2
-
-
1
1
1
-
-
1
1
1
-
1 – Mr R Millner was ineligible to attend the Remuneration Committee meeting to avoid any potential conflict of interest.
2 – Mr G Hill was ineligible to attend two Board meetings where the acquisition of Huntley Investment Company Limited
was under discussion in order to avoid any potential conflict of interest.
3 – Mr I Huntley was ineligible to attend any meetings prior to his appointment to the Board on 10 February 2009.
14. Remuneration Report (Audited)
This remuneration report outlines the Director and executive remuneration arrangements of the Company in
accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this
report, key management personnel of the Company are defined as those persons having authority and
responsibility for planning, directing and controlling the major activities of the Company, directly or indirectly.
Remuneration Policy
The Board is responsible for determining and reviewing remuneration arrangements for the Directors
themselves and the Chief Executive Officer. It is the Group’s objective to provide maximum shareholder benefit
from the retention of a high quality Board and Executive Team by remunerating Directors and key executives
fairly and appropriately with reference to relevant employment market conditions and their experience and
expertise.
Elements of director and executive remuneration
Remuneration packages may contain the following key elements:
(a) Primary benefits – salary/fees, bonuses and non-monetary benefits including the provision of a motor
vehicle or the payment of a car allowance where necessary.
(b) Post employment benefits including superannuation.
(c) Other benefits
The following disclosures detail the remuneration of the directors and the highest remunerated executives of
the Parent and controlled entities.
2009 Annual Report
15
DIRECTORS’ REPORT - Continued
14. Remuneration Report (Audited) (continued)
The names and positions held of group directors and key management personnel in office at any time during
the financial year are:
Name
RD Millner
DC Hall
AJ Payne
GG Hill
IT Huntley
Position
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director (appointed 10 February 2009)
TCD Millner
Chief Executive Officer (appointed 1 December 2008)
There are no other employees of the Parent and controlled entities.
Details of the nature and amount of each Non – Executive Director’s and key management personnel’s
emoluments from the Parent and controlled entities in respect of the year to 30 June were:
Directors
2009
RD Millner
DC Hall
AJ Payne
GG Hill
IT Huntley 1
Total
2008
RD Millner
DC Hall
AJ Payne
GG Hill
Total
Primary
Superannuation
$
40,000
30,000
25,000
25,000
13,625
$
3,600
2,700
2,250
2,250
-
133,625
10,800
40,000
30,000
25,000
25,000
120,000
3,600
2,700
2,250
2,250
10,800
1 – Appointed 10 February 2009
Equity
Compensation
$
Other
Compensation
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
43,600
32,700
27,250
27,250
13,625
144,425
43,600
32,700
27,250
27,250
130,800
Payment to non-executive directors is fixed at $300,000 until shareholders, by ordinary resolution, approve
some other fixed sum amount. This amount is to be divided amongst the Directors as they may determine.
16
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
DIRECTORS’ REPORT - Continued
Key Management Primary
Personnel
2009
$
TCD Millner 2
Total
133,792
133,792
2008 - $Nil
2 – Appointed 1 December 2008
Superannuation
$
12,041
12,041
Equity
Compensation
$
Other
Compensation
$
-
-
-
-
Total
$
145,833
145,833
There were no retirement allowances provided for the retirement of non-executive directors.
There is no link between remuneration paid to Directors and key management personnel and Company
performance.
These fees exclude any additional fee for any service based agreement which may be agreed from time to
time, and also excludes statutory superannuation and the reimbursement of out of pocket expenses.
Contract of Employment
Mr T Millner is employed by the Company under a contract of employment. This is an open ended contract
with a notice period of one month required to terminate employment. Remuneration is fixed at $250,000 per
annum inclusive of superannuation.
Remuneration is reviewed annually by the Remuneration Committee.
15. Beneficial and relevant interest of Directors and Key Management
Personnel in Shares
As at the date of this report, details of Directors and Key Management Personnel who hold shares for their own
benefit or who have an interest in holdings through a third party and the total number of such shares held are
listed as follows:
RD Millner
DC Hall
AJ Payne
GG Hill
IT Huntley
TCD Millner
Number of Shares
5,621,223
221,749
169,612
841,303
11,004,901
1,500
16. Directors and Officers’ Indemnity
The Constitution of the Parent provides indemnity against liability and legal costs incurred by Directors and
Officers to the extent permitted by Corporations Act.
During the year to 30 June 2009, the Group has paid premiums of $54,841 in respect of an insurance contract
to insure each of the officers against all liabilities and expenses arising as a result of work performed in their
respective capacities.
2009 Annual Report
17
DIRECTORS’ REPORT - Continued
17. Proceedings on Behalf of Group
No person has applied for leave of the Court to bring proceedings on behalf of the Group or intervene in any
proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all
or any part of those proceedings.
The Group was not a party to any such proceedings during the year.
18. Non-audit Services
The Board of Directors is satisfied that the provision of non-audit services during the year is compatible with
the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are
satisfied that the services disclosed below did not compromise the external auditor’s independence for the
following reasons:
• all non-audit services are reviewed and approved by the Board of Directors prior to commencement to
ensure they do not adversely affect the integrity and objectivity of the auditor; and
• the nature of the services provided do not compromise the general principles relating to auditor
independence as set out in the Institute of Chartered Accountants in Australia and CPA Australia’s
Professional Statement F1: Professional Independence.
No fees for non-audit services were paid to the external auditor, Ruwald & Evans, during the year ended
30 June 2009.
19. Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 30 June 2009 has been received and can be found
on page 53.
This report is made in accordance with a resolution of the Directors.
Robert D Millner
Director
Sydney, 11 August 2009
18
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
CORPORATE GOVERNANCE
Brickworks Investment Company Limited (the Group) are committed to achieving and demonstrating the
highest standards of corporate governance. Unless otherwise stated, the Group has followed the revised best
practice recommendations effective from 1 January 2008 set by the ASX Corporate Governance Council during
the reporting year.
This report summarises the Group’s application of the 8 Corporate Governance Principles and
Recommendations.
Principle 1 – Lay solid foundations for management and oversight
Recommendation 1.1: Companies should establish the functions reserved to the Board and those delegated
to Senior Executives and disclose those functions.
The Board of Directors (hereinafter referred to as the Board) are responsible for the corporate governance of
the Parent and its controlled entities. The Directors of the Parent and its controlled entities are required to act
honestly, transparently, diligently, independently, and in the best interests of all shareholders in order to increase
shareholder value.
The Directors are responsible to the shareholders for the performance of the Group in both the short and the
longer term and seek to balance sometimes competing objectives in the best interests of the Group as a
whole. Their focus is to enhance the interests of shareholders and other key stakeholders and to ensure the
Group is properly managed.
Role of the Board
The responsibilities of the Board include:
(cid:2) contributing to the development of and approving the corporate strategy
(cid:2) reviewing and approving business results, business plans, the annual budget and financial plans
(cid:2) ensuring regulatory compliance
(cid:2) ensuring adequate risk management processes
(cid:2) monitoring the Board composition, Director selection and Board processes and performance
(cid:2) overseeing and monitoring:
- organisational performance and the achievement of the Group’s strategic goals and objectives
- compliance with the Group’s code of conduct
(cid:2) monitoring financial performance including approval of the Annual Report and Half-Year Financial Reports
and liaison with the Group’s auditors
(cid:2) appointment and contributing to the performance assessment of the Chief Executive Officer and external
service providers
(cid:2) enhancing and protecting the reputation of the Group
(cid:2) reporting to shareholders.
Role of Senior Executives
The responsibilities of Senior Executives include:
(cid:2) organisation and monitoring of the investment portfolio
(cid:2) managing organisational performance and the achievement of the Group’s strategic goals and objectives
(cid:2) management of financial performance
(cid:2) management of internal controls
Recommendation 1.2: Companies should disclose the process for evaluating the performance of Senior
2009 Annual Report
19
CORPORATE GOVERNANCE - Continued
Executives.
Performance of Senior Executives is measured against relative market indices and financial and strategic goals
approved by the Board. Performance is measured on an ongoing basis using management reporting tools.
Principle 2 – Structure the Board to add value
The key elements of the Board composition include:
(cid:2) ensuring, where practicable to do so, that a majority of the Board are Independent Directors
(cid:2) Non-Executive Directors bring a fresh perspective to the Board’s consideration of strategic, risk and
performance matters and are best placed to exercise independent judgement and review and
constructively challenge the performance of management
(cid:2) the Group is to maintain a mix of Directors on the Board from different backgrounds with complimentary
skills and experience
(cid:2) the Board seeks to ensure that:
- at any point in time, its membership represents an appropriate balance between Directors with
experience and knowledge of the Group and Directors with an external perspective
- the size of the Board is conducive to effective discussion and efficient decision making.
Details of the members of the Board, their experience, expertise, qualifications and independent status are set
out in the Directors’ report under the heading “Directors”.
Recommendation 2.1: A majority of the Board should be Independent Directors
The Group has followed recommendation 2.1 as the Board currently comprises 3 independent Non-Executive
Directors and 2 Non-Executive Directors.
Mr Huntley is defined as independent as his shareholding in the Group at less than 5% of issued capital is not
considered substantial.
In relation to Directors independence, materiality is determined on both quantitative and qualitative bases. An
amount of over 5% of annual turnover of the Group is considered material. In addition, a transaction of any
amount or a relationship is deemed material if knowledge of it impacts the shareholders’ understanding of the
director’s performance.
Recommendation 2.2: The Chair should be an Independent Director.
When assessing the independence of the Chairman under recommendation 2.1 of the best practice
recommendations released by the Australian Stock Exchange Corporate Governance Council, Mr Millner,
although meeting other criteria, and bringing independent judgement to bear on his role, is not defined as
independent, primarily due to the fact that Mr Millner is an officer of Washington H. Soul Pattinson and
Company Limited, which is a substantial shareholder of the Parent.
Recommendation 2.1 has not been followed due to the following reasons;
(cid:2) The Board are of the opinion that all Directors exercise and bring to bear an unfettered and independent
judgement towards their duties. Brickworks Investment Company Limited listed on the Australian Stock
exchange on 12 December 2003 to take over the investment portfolio of Brickworks Limited and the
Board is satisfied that Mr Millner plays an important role in the continued success and performance of
the portfolio.
20
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
CORPORATE GOVERNANCE - Continued
Recommendation 2.3: The roles of Chair and Chief Executive Officer should not be exercised by the same
individual
The role of chair and Chief Executive Officer is not occupied by the same individual.
Recommendation 2.4: The Board should establish a Nomination Committee
The Group established a Nominations Committee effective from 12 December 2003.
The Nomination Committee consists of the following members:
RD Millner (Chairman)
DC Hall
AJ Payne
GG Hill
IT Huntley (appointed 10 February 2009)
The main responsibilities of the Committee are to:
(cid:2) assess the membership of the Board having regard to present and future needs of the Group
(cid:2) assess the independence of Directors to ensure the majority of the Board are Independent Directors
(cid:2) propose candidates for Board vacancies in consideration of qualifications, experience and domicile
(cid:2) oversee Board succession
(cid:2) evaluating Board performance.
Recommendation 2.5: Companies should disclose the process for evaluating the performance of the Board, its
Committees and Individual Directors
The Board undertakes an annual self assessment of its collective performance. The self assessment:
(cid:2) compares the performance of the Board with goals and objectives
(cid:2) sets forth the goals and objectives of the Board for the upcoming year
The performance evaluation is conducted in such manner as the Board deems appropriate. In addition, each
Board Committee undertakes an annual self assessment on the performance of each Committee and
achievement of Committee objectives.
The Chairman annually assesses the performance of individual Directors, where necessary and meets privately
with each directors to discuss this assessment. The Chairman’s performance is reviewed by the Board.
Principle 3 – Promote ethical and responsible decision-making
Recommendation 3.1: Companies should establish a Code of Conduct.
The Group has developed a Code of Conduct (the Code) which has been fully endorsed by the Board and
applies to all Directors, employees and external service providers. The Code is regularly reviewed to ensure it
reflects the highest standards of behaviour and professionalism and the practices necessary to maintain
confidence in the Group’s integrity.
In summary, the Code requires that at all times all Group personnel act with the utmost integrity, objectivity and
in compliance with the letter and the spirit of the law and company policies. This includes taking into account:
(cid:2) their legal obligations and the reasonable expectations of their stakeholders
(cid:2) their responsibility and accountability for reporting and investigating reports of unethical practices.
2009 Annual Report
21
CORPORATE GOVERNANCE - Continued
Recommendation 3.2: Companies should establish a policy concerning trading in company securities by
Directors, Senior Executives and employees, and disclose the policy or a summary of that policy.
The Group has developed a Share Trading Policy which has been fully endorsed by the Board and applies to all
Directors and employees.
Directors, Executives and employees may deal in company securities; however they may not do so if in
possession of information which is price sensitive or likely to be price sensitive to the security’s market price.
Changes in a Director’s interest are required to be advised to the Group within 3 days for notification to the
ASX.
The Directors are satisfied that the Group has complied with its policies on ethical standards, including trading
in securities.
Principle 4 – Safeguard integrity in financial reporting
Recommendation 4.1: The Board should establish an Audit Committee
The members of the Audit Committee at the date of this Annual Financial Report are:
DC Hall (Chairman)
AJ Payne
GG Hill
Recommendation 4.2: The Audit Committee should be structured so that it:
(cid:2) consists only of Non-Executive Directors
(cid:2) consists of a majority of Independent Directors
(cid:2) is chaired by an Independent Chair, who is not Chair of the Board
(cid:2) has at least three members
The Audit Committee consists only of Non-Executive Directors. Two of three members are independent.
The Chairman of the Audit Committee is an Independent, Non-Executive Director who is not Chairman of the
Board. The Chairman of the Audit Committee is also required to have accounting or related financial expertise,
which includes past employment, professional qualification or other comparable experience. The other
members of the Audit Committee are all financially literate and have a strong understanding of the industry in
which the Group operates.
Recommendation 4.3: The Audit Committee should have a formal charter
The main responsibilities of the Audit Committee are to:
(cid:2) review, assess and approve the Annual Report, Half-Year Financial Report and all other financial
information published by the Group or released to the market
(cid:2) reviewing the effectiveness of the organisation’s internal control environment covering:
- effectiveness and efficiency of operations
- reliability of financial reporting
- compliance with applicable laws and regulations.
(cid:2) oversee the effective operation of the risk management framework
22
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
CORPORATE GOVERNANCE - Continued
(cid:2) recommend to the Board the appointment, removal and remuneration of the external auditors, and
review the terms of their engagement, the scope and quality of the audit and assess performance and
consider the independence and competence of the external auditor on an ongoing basis. The Audit
Committee receives certified independence assurances from the external auditors
(cid:2) review and approve the level of non-audit services provided by the external auditors and ensure it does
not adversely impact on auditor independence. The external auditor will not provide services to the
Group where the auditor would have a mutual or conflicting interest with the Group; be in a position
where they audit their own work; function as management of the Group; or have their independence
impaired or perceived to be impaired in any way.
(cid:2) review and monitor related party transactions and assess their priority
(cid:2) report to the Board on matters relevant to the Committee’s role and responsibilities
The external auditor will attend the Annual General Meeting and be available to answer shareholder questions
about the conduct of the audit and the preparation and content of the audit report.
Principle 5 – Make timely and balanced disclosure
Recommendation 5.1: Companies should establish written policies designed to ensure compliance with ASX
Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance
and disclose those policies or a summary of those policies
The Chairman and Company Secretary have been nominated as being the persons responsible for
communications with the Australian Stock Exchange (ASX). This role includes the responsibility for ensuring
compliance with the continuous disclosure requirements in the ASX listing rules and overseeing and co-
ordinating information disclosure to ASX. The Chairman is responsible for disclosure to analysts, brokers and
shareholders, the media and the public.
The Parent has written policies and procedures on information disclosure that focus on continuous disclosure
of any information concerning the Group that a reasonable person would expect to have a material effect on
the price of the Company’s securities.
Principle 6 – Respect the rights of shareholders
Recommendation 6.1: Companies should design a communications policy for promoting effective
communication with shareholders and encouraging their participation at general meetings and disclose their
policy or a summary of that policy
The Board aims to ensure that shareholders are informed of all major developments affecting the Group.
Shareholders are updated with the Group’s operations via monthly ASX announcements of the Net Tangible
Asset (NTA) backing of the portfolio and other disclosure information. All recent ASX announcements and
Annual Reports are available on the ASX website, or alternatively, by request via email, facsimile or post. In
addition, a copy of the annual report is distributed to all shareholders who elect to receive it, and is available on
the Group’s website.
The Board encourages participation by shareholders at the Annual General Meeting to ensure a high level of
accountability and to ensure that shareholders remain informed about the Group’s performance and goals.
2009 Annual Report
23
CORPORATE GOVERNANCE - Continued
Principle 7 – Recognise and manage risk
Recommendation 7.1: Companies should establish policies for the oversight and management of material
business risks and disclose a summary of those policies
The Board is committed to the identification and quantification of risk throughout the Group’s operations.
Considerable importance is placed on maintaining a strong control environment. There is an organisational
structure with clearly drawn lines of accountability. Adherence to the code of conduct is required at all times
and the Board actively promotes a culture of quality and integrity.
Recommendation 7.2: The Board should require management to design and implement the risk management
and internal control system to manage the company’s material business risks and report to it on whether those
risks are being managed effectively. The Board should disclose that management has reported to it as to the
effectiveness of the Company’s management of its material business risks.
The Board operates to minimise its exposure to investment risk, in part, by implementing stringent processes
and procedures to effectively manage investment risk.
Management of investment risk is fundamental to the business of the Group being an investor in Australian
listed securities. An Investment Committee has been established to perform, among other roles, investment
risk mitigation.
The Investment Committee consists of the following members:
RD Millner (Chairman)
AJ Payne
IT Huntley (appointed 10 February 2009)
TCD Millner (appointed 1 December 2008)
The main responsibilities of the Committee are to:
(cid:2) assess the information and recommendations received from the Chief Executive Officer in his role as
portfolio manager regarding the present and future investment needs of the Group
(cid:2) assess the performance of the Chief Executive Officer in his role as portfolio manager
(cid:2) evaluate investment performance.
Recommendation 7.3: The Board should disclose whether it has received assurance from the Chief Executive
Officer (or equivalent) and the Chief Financial Officer (or equivalent) that the declaration provided in accordance
with section 295A of the Corporations Act is founded on a sound system of risk management and internal
control and that the system is operating effectively in all material respects in relation to financial reporting risks.
The Chief Executive Officer and the administrative and company secretarial service provider, namely Mr T Millner
and Corporate & Administrative Services Pty Ltd have made the following certifications to the Board in
accordance with Section 295A of the Corporations Act:
(cid:2) that the Group’s financial reports are complete and present a true and fair view, in all material respects,
of the financial condition and operational results of the Parent and its consolidated entities in accordance
with all mandatory professional reporting requirements.
(cid:2) that the above statement is founded on a sound system of internal control and risk management which
implements the policies adopted by the Board and that the Group’s risk management and internal
control is operating effectively and efficiently in all material respects in relation to financial reporting risks.
24
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
CORPORATE GOVERNANCE - Continued
Principle 8 – Remunerate fairly and responsibly
Recommendation 8.1: The Board should establish a Remuneration Committee.
The Group has established a Remuneration Committee consisting of the following members:
AJ Payne (Chairman)
DC Hall
RD Millner
GG Hill
IT Huntley (appointed 10 February 2009)
The Remuneration Committee oversees and reviews remuneration packages and other terms of employment
for Executive Management. In undertaking their roles the Committee members consider reports from external
remuneration experts on recent developments on remuneration and related matters.
Executive remuneration and other terms of employment are reviewed annually by the Remuneration Committee
having regard to personal and corporate performance, contribution to long term growth, relevant comparative
information and independent expert advice. Performance is measured against relative market indices.
Any person engaged in an executive capacity is required to sign a formal employment contract at the time of
their appointment covering a range of matters including their duties, rights, responsibilities, and any
entitlements on termination.
As well as a base salary, remuneration in such circumstances could be expected to include superannuation,
performance-related bonuses and fringe benefits.
Recommendation 8.2: Companies should clearly distinguish the structure of Non-Executive Directors’
remuneration from that of Executive Directors and Senior Executives.
Fees for Non-Executive Directors reflect the demands on and responsibilities of our Directors. Non-Executive
Directors are remunerated by way of base fees and statutory superannuation contributions and do not
participate in schemes designed for the remuneration of Executives. Non-Executive Directors do not receive
any options, bonus payments nor are provided with retirement benefits other than statutory superannuation.
The Remuneration Committee’s terms of reference include responsibility for reviewing any transactions between
the organisation and the Directors, or any interest associated with the Directors, to ensure the structure and
terms of the transaction are in compliance with the Corporations Act 2001 and are appropriately disclosed.
2009 Annual Report
25
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2009
Revenue from investment portfolio
Revenue from bank deposits
Other income
Other gains
Income from operating activities before special
investment revenue and net gains / (losses)
on investment portfolio
Operating expenses
Operating profit before income tax expense,
special investment revenue and net gains /
(losses) on investment portfolio
Income tax expense
Net operating profit before special investment
revenue and net gains / (losses) on investment
portfolio
Note
2 (a)
2 (c)
2 (d)
2 (e)
3
4
Consolidated
Parent
2009
$’000
19,907
2,382
19
871
2008
$’000
17,385
3,731
5
-
2009
$’000
17,875
2,129
13
720
2008
$’000
17,385
3,731
5
-
23,179
21,121
20,737
21,121
1,426
2,006
1,359
2,005
21,753
(1,093)
19,115
19,378
19,116
(819)
(871)
(819)
20,660
18,296
18,507
18,297
Special investment revenue
2 (b)
1,295
892
1,295
892
Net operating profit before net gains / (losses)
on investment portfolio
21,955
19,188
19,802
19,189
Realised (losses) / gains on investment portfolio
(5,396)
4,625
(4,340)
4,625
Tax credit / (expense) relating to net realised
(losses) / gains on investment portfolio
Net realised (losses) / gains on investment portfolio
Unrealised impairment loss on investment portfolio
Tax credit relating to unrealised impairment
loss on investment portfolio
Net unrealised impairment loss on investment portfolio
Discount on acquisition of controlled entity
Profit for the year after net (losses)/gains on
investment portfolio, discount on acquisition and
unrealised impairment loss
4
4
3,090
(2,306)
(1,437)
431
(1,006)
3,323
(1,237)
3,388
-
-
-
-
1,302
(1,237)
(3,038)
(1,437)
431
(1,006)
-
3,388
-
-
-
-
21,966
22,576
15,758
22,577
Net loss attributable to Minority Interest
146
-
-
-
Profit for the year attributable to members
of the Company
22,112
22,576
15,758
22,577
Basic earnings per share
Diluted earnings per share
20
20
Cents
6.34
6.34
Cents
8.01
8.01
This Income Statement should be read in conjunction with the accompanying notes
26
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2009
Consolidated
Parent
2009
$’000
2008
$’000
2009
$’000
2008
$’000
Note
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Held for trading financial assets
Prepayments
Total Current Assets
NON-CURRENT ASSETS
Available for sale financial assets
Property, Plant & Equipment
Deferred tax assets
Total Non-Current Assets
Total Assets
CURRENT LIABILITIES
Trade and other payables
Current tax liabilities
Employee Benefits
Total Current Liabilities
NON-CURRENT LIABILITIES
Trade and other payables
Deferred tax liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
EQUITY
Share capital
Revaluation reserve
Realised capital gains reserve
Retained profits
Total Equity
6
7
8
8
9
10
11
12
13
11
14
15
16
17
18
35,818
2,919
247
39
43,645
4,413
-
15
35,000
2,682
43,642
4,413
24
17
-
15
39,023
48,073
37,723
48,070
442,210
394,001
639,515
489,387
11
3,300
-
498
10
3,087
-
497
445,521
394,499
642,612
489,884
484,544
442,572
680,335
537,954
84
2,043
3
2,130
166
172
-
338
74
2,043
3
2,120
-
-
203,679
166
172
-
338
96,460
30,811
11,275
11,275
13,405
30,811
30,811
31,149
12,165
215,844
127,271
217,964
127,609
471,139
411,423
462,371
410,345
420,925
322,915
420,925
322,915
27,448
3,742
19,024
67,381
6,048
15,079
28,064
3,010
10,372
69,333
6,048
12,049
471,139
411,423
462,371
410,345
This Balance Sheet should be read in conjunction with the accompanying notes
2009 Annual Report
27
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2009
CONSOLIDATED ENTITY
Share
Capital
$’000
Revaluation
Reserve
$’000
Realised
Capital
Gains
Reserve
$’000
Retained
Profits
$’000
Total
Equity
$’000
Total equity at 1 July 2007
268,834
100,128
2,660
11,317
382,939
Issue of shares, net of cost
54,081
Dividends paid or provided for
Revaluation of investment portfolio
Provision for tax on unrealised losses
Profit for the year
-
-
-
-
-
-
(46,567)
13,820
-
-
-
-
-
54,081
(15,426)
(15,426)
-
-
(46,567)
13,820
-
3,388
19,188
22,576
Total equity at 30 June 2008
322,915
67,381
6,048
15,079
411,423
Total equity at 1 July 2008
322,915
67,381
6,048
15,079
411,423
Issue of shares, net of cost
98,010
Dividends paid or provided for
Revaluation of investment portfolio
Provision for tax on unrealised losses
Net unrealised impairment loss on
investment portfolio
Profit / (Loss) for the year
-
-
-
-
-
-
-
(58,484)
17,545
1,006
-
-
-
-
-
-
98,010
(20,473)
(20,473)
-
-
-
(58,484)
17,545
1,006
-
(2,306)
24,418
22,112
Total equity at 30 June 2009
420,925
27,448
3,742
19,024
471,139
This Statement of Changes in Equity should be read in conjunction with the accompanying notes
28
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
PARENT STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2009
PARENT
Share
Capital
$’000
Revaluation
Reserve
$’000
Realised
Capital
Gains
Reserve
$’000
Retained
Profits
$’000
Total
Equity
$’000
Total equity at 1 July 2007
268,834
102,080
2,660
8,286
381,860
Issue of shares, net of cost
54,081
Dividends paid or provided for
Revaluation of investment portfolio
Provision for tax on unrealised losses
Profit for the year
-
-
-
-
-
-
(46,567)
13,820
-
-
-
-
-
54,081
(15,426)
(15,426)
-
-
(46,567)
13,820
-
3,388
19,189
22,577
Total equity at 30 June 2008
322,915
69,333
6,048
12,049
410,345
Total equity at 1 July 2008
322,915
69,333
6,048
12,049
410,345
Issue of shares, net of cost
98,010
Dividends paid or provided for
Revaluation of investment portfolio
Provision for tax on unrealised losses
Net unrealised impairment loss on
investment portfolio
Profit / (Loss) for the year
-
-
-
-
-
-
-
(60,393)
18,118
1,006
-
-
-
-
-
-
98,010
(20,473)
(20,473)
-
-
-
(60,393)
18,118
1,006
-
(3,038)
18,796
15,758
Total equity at 30 June 2009
420,925
28,064
3,010
10,372
462,371
This Statement of Changes in Equity should be read in conjunction with the accompanying notes
2009 Annual Report
29
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2009
Consolidated
Parent
2009
$’000
2008
$’000
2009
$’000
2008
$’000
Note
Cash flows from operating activities
Payments to suppliers and employees
(2,143)
(2,257)
(1,448)
(2,256)
Other receipts in the course of operations
Dividends and distributions received
Payments for held for trading financial assets
Proceeds from sale of held for trading financial
assets
Interest received
Income tax refund/(paid)
31
22,141
(2,046)
2,965
2,621
(204)
269
17,461
-
-
3,736
-
30
269
19,753
(1,472)
2,168
2,398
(254)
17,461
-
-
3,736
-
Net cash inflows from operating activities
19(a)
23,365
19,209
21,175
19,210
Cash flows from investing activities
Cash acquired on acquisition of controlled entity
Purchase costs for acquisition of controlled entity
16,636
(1,412)
-
-
-
(1,412)
-
-
Payment for available for sale investments
(34,779)
(75,606)
(34,484)
(75,606)
Proceeds from sale of available for sale investments
5,365
10,321
2,423
10,321
Payments for plant and equipment
Loans from controlled entities
(13)
-
-
-
(12)
20,657
-
-
Net cash (outflow) from investing activities
(14,203)
(65,285)
(12,828)
(65,285)
Cash flows from financing activities
Proceeds from issues of ordinary shares less
issue costs
(78)
50,957
(78)
50,957
Dividends paid
5(a)
(16,911)
(12,783)
(16,911)
(12,783)
Net cash (outflow) / inflow from financing
activities
Net (decrease) in cash held
Cash at the beginning of the year
Cash at the end of the year
(16,989)
(7,827)
43,645
35,818
38,174
(7,902)
51,547
43,645
(16,989)
38,174
(8,642)
43,642
35,000
(7,901)
51,543
43,642
This Cash Flow Statement should be read in conjunction with the accompanying notes
30
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial report is a general purpose financial report that has been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the
Australian Accounting Standards Board and the Corporations Act 2001.
The financial report covers the parent entity of Brickworks Investment Company Limited and controlled entities,
and Brickworks Investment Company Limited as an individual parent entity. Brickworks Investment Company
Limited is a listed public company, incorporated and domiciled in Australia.
The financial report of Brickworks Investment Company Limited and controlled entities, and Brickworks
Investment Company Limited as an individual parent entity comply with all International Financial Reporting
Standards (IFRS) in their entirety.
The following is a summary of the material accounting policies adopted by the group in the preparation of the
financial report. The accounting policies have been consistently applied, unless otherwise stated.
Basis of Preparation
The accounting policies set out below have been consistently applied to all years presented.
Reporting Basis and Conventions
The financial report has been prepared on an accruals basis and is based on historical costs modified by the
revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis
of accounting has been applied.
Accounting Policies
a.
Principles of Consolidation
A controlled entity is any entity Brickworks Investment Company Limited has the power to control the
financial and operating policies of so as to obtain benefits from its activities.
A list of controlled entities is contained in Note 24 to the financial statements. All controlled entities have
a June financial year-end.
All inter-company balances and transactions between entities in the group, including any unrealised
profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been
changed where necessary to ensure consistencies with those policies applied by the parent entity.
Where controlled entities have entered or left the group during the year, their operating results have been
included/excluded from the date control was obtained or until the date control ceased.
Minority equity interests in the equity and results of the entities that are controlled are shown as a
separate item in the consolidated financial report.
b.
Income Tax
The charge for current income tax expense is based on the profit for the year adjusted for any
non-assessable or disallowed items. It is calculated using the tax rates that have been enacted or are
substantially enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a
business combination, where there is no effect on accounting or taxable profit or loss.
2009 Annual Report
31
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
b.
Income Tax (continued)
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised
or liability is settled. Deferred tax is credited in the income statement except where it relates to items that
may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be
available against which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the
assumption that no adverse change will occur in income taxation legislation and the anticipation that the
group will derive sufficient future assessable income to enable the benefit to be realised and comply with
the conditions of deductibility imposed by the law.
Brickworks Investment Company Limited and its wholly-owned Australian subsidiaries have formed an
income tax consolidated group under the tax consolidation regime. Each entity in the group recognises its
own current and deferred tax liabilities, except for any deferred tax balances resulting from unused tax losses
and tax credits, which are immediately assumed by the parent entity. The current tax liability of each group
entity is then subsequently assumed by the parent entity. The group notified the Australian Tax Office that it
had formed an income tax consolidated group to apply from 12 December 2003. The tax consolidated
group has entered a tax sharing agreement whereby each group in the group contributes to the income tax
payable in proportion to their contribution to the net profit before tax of the tax consolidated group.
c.
Financial Instruments
Recognition
Financial instruments are initially measured at cost on trade date, which includes transaction costs, when
the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are
measured as set out below.
Financial assets at fair value through income
A financial asset is classified in this category if acquired principally for the purpose of selling in the short
term or if so designated by management and within the requirements of AASB 139: Recognition and
Measurement of Financial Instruments. Derivatives are also categorised as held for trading unless they
are designated as hedges. Realised and unrealised gains and losses arising from changes in the fair
value of these assets are included in the income statement in the period in which they arise.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market and are stated at amortised cost using the effective interest rate method.
Held-to-maturity investments
These investments have fixed maturities, and it is the group’s intention to hold these investments to
maturity. Any held-to-maturity investments held by the group are stated at amortised cost using the
effective interest rate method.
Available-for-sale financial assets
Available-for-sale financial assets include any financial assets not included in the above categories.
Available-for-sale financial assets are reflected at fair value. Unrealised gains and losses arising from
changes in fair value are taken directly to equity.
Fair value
Fair value is determined based on current bid prices for all quoted investments.
32
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
d.
Impairment of Assets
At each reporting date, the group reviews the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication
exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell
and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over
its recoverable amount is expensed to the income statement.
e.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term
highly liquid investments with original maturities of 12 months or less, and bank overdrafts. Bank
overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.
f.
Revenue
Sale of investments occur when the control of the right to equity has passed to the buyer.
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to
the financial assets.
Dividend revenue is recognised when the right to receive a dividend has been established.
Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.
All revenue is stated net of the amount of goods and services tax (GST).
g.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of
GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the balance sheet are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating cash flows.
h.
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
Rounding of Amounts
The parent has applied the relief available to it under ASIC Class Order 98/100 and accordingly, amounts
in the financial report and directors’ report have been rounded off to the nearest $1,000.
Critical Accounting Estimates and Judgments
Deferred Tax Balances
i.
j.
The preparation of this financial report requires the use of certain critical estimates based on historical
knowledge and best available current information. This requires the directors and management to
exercise their judgement in the process of applying the Group’s accounting policies.
The carrying amounts of certain assets and liabilities are often determined based on estimates and
assumptions of future events. In accordance with AASB 112: Income Taxes deferred tax liabilities have been
recognised for Capital Gains Tax on unrealised gains in the investment portfolio at the current tax rate of 30%.
As the Group does not intend to dispose of the portfolio, this tax liability may not be crystallised at the
amount disclosed in Note 14. In addition, the tax liability that arises on disposal of those securities may
2009 Annual Report
33
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
j.
Critical Accounting Estimates and Judgments (continued)
be impacted by changes in tax legislation relating to treatment of capital gains and the rate of taxation
applicable to such gains at the time of disposal.
Apart from this, there are no other key assumptions or sources of estimation uncertainty that have a risk of causing
a material adjustment to the carrying amount of certain assets and liabilities within the next reporting period.
Impairment
The investment portfolio is continually reviewed by the Investment Committee to determine if any stocks
held within it are, in the view of the committee, impaired. This review primarily focuses on the ability of
the company to pay dividends over the long term and whether any long term fall in the valuation of the
company has arisen from changes to the environment in which it operates. The group will normally
dispose of any stock which the Investment Committee considers is impaired and any loss is recognised
in Realised Gains or Losses in the Income Statement. Where an investment is considered impaired, but
has not been disposed of, an impairment charge is recognised in the Income Statement.
k.
Australian Accounting Standards not yet effective
The Group has not yet applied any Australian Accounting Standards or Australian Accounting Interpretations
that have been issued as at balance date but are not yet mandatory for the year ended 30 June 2009.
The impact of these new standards and interpretations has been assessed and is set out below:
1. Revised AASB 101 Presentation of Financial Statements and AASB 2007-8 Amendments to
Australian Accounting Standards arising from AASB 101
A revised AASB 101 was issued in September 2007 and is applicable for annual reporting periods beginning
on or after 1 January 2009. It requires the presentation of a statement of comprehensive income and makes
changes to the statement of changes in equity, but will not affect any of the amounts recognised in the
financial statements. If an entity has made a prior period adjustment or has reclassified items in the financial
statements, it will need to disclose a third balance sheet (statement of financial position), this one being as at
the beginning of the comparative period. The Group intends to apply the revised standard from 1 July 2009.
No other non-mandatory standards are considered applicable to the Group.
2. REVENUES
(a) Revenue from investment portfolio
Rebateable dividends:
- other corporations
Non-rebateable dividends:
- other corporations
Distributions:
- other corporations
Interest received - notes
(b) Special investment revenue
Rebateable dividends - special:
- other corporations
34
Consolidated
Parent
2009
$’000
2008
$’000
2009
$’000
2008
$’000
18,121
16,410
16,491
16,410
1,216
537
825
537
570
-
19,907
289
149
17,385
559
-
17,875
289
149
17,385
1,295
892
1,295
892
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
2. REVENUES (continued)
(c) Revenue from bank deposits
Interest received
(d) Other income
Other revenue
(e) Other gains / losses
Net gain on sale of investments held for trading
Unrealised net gain on investments held for trading
Consolidated
Parent
2009
$’000
2008
$’000
2009
$’000
2008
$’000
2,382
3,731
2,129
3,731
19
778
93
871
5
-
-
-
13
711
9
720
5
-
-
-
Total Income
24,474
22,013
22,032
22,013
3. OPERATING EXPENSES
Administration expenses
Occupancy costs
Employment expense
Professional fees
Depreciation
Management fees
Total Expenditure
4. TAX EXPENSE
428
5
295
166
2
530
1,426
314
-
131
143
-
1,418
2,006
382
4
295
146
2
530
1,359
313
-
131
143
-
1,418
2,005
The aggregated amount of income tax expense attributable to the year differs from the amounts prima facie
payable on profits from ordinary activities. The difference is reconciled as follows:
(a) Operating profit before income tax expense
and net gains on investment portfolio
23,048
20,007
20,673
20,008
Tax calculated at 30% (2008:30%)
6,914
6,002
6,202
6,002
Tax effect of amounts which are not deductible (taxable)
in calculating taxable income:
- Franked dividends and distributions received
- (Over)/Under provision in prior year
Net tax expense on operating profit before net gains
on investments
(5,822)
-
(5,190)
7
(5,331)
-
(5,190)
7
1,093
819
871
819
2009 Annual Report
35
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
4. TAX EXPENSE (continued)
Consolidated
Parent
2009
$’000
2008
$’000
2009
$’000
2008
$’000
(a) Operating profit before income tax expense
and net gains on investment portfolio (continued)
Net gains on investments
Tax calculated at 30% (2008: 30%)
(5,396)
(1,619)
4,625
1,388
(4,340)
(1,302)
4,625
1,388
Tax effect of:
- difference between accounting and tax cost bases
for capital gains purposes
Tax expense on net gains on investments
Unrealised impairment loss on investment portfolio
Tax calculated at 30% (2008: 30%)
Total Tax (credit) / expense
(b) The components of tax expense comprise
Current tax
Deferred tax
(Over)/Under provision in prior year
5. DIVIDENDS
(a) Dividends paid during the year
Final dividend for the year ended 30 June 2008 of 3.0
cents per share (2007: 2.7 cents per share) fully franked
at the tax rate of 30%, paid on 29 August 2008
Interim dividend for the year ended 30 June 2008 of
3.0 cents per share (2007: 2.6 cents per share) fully
franked at the tax rate 30%, paid on 12 March 2009
Total
Dividends paid in cash or invested in shares under
the dividend reinvestment plan ("DRP")
Paid in cash
Reinvested in shares via DRP
Total
Franking Account Balance
Balance of the franking account after allowing for tax
payable in respect of the current year's profits and the
receipt of dividends recognised as receivables
Impact on the franking account of dividends declared
but not recognised as a liability at the end of the
financial year (b) below
Net available
36
(1,471)
(3,090)
(1,437)
(431)
(2,428)
2,043
(4,471)
-
(2,428)
(151)
1,237
-
-
2,056
172
1,877
7
2,056
-
(1,302)
(1,437)
(431)
(862)
829
(1,691)
-
(862)
(151)
1,237
-
-
2,056
172
1,877
7
2,056
8,729
6,811
8,729
6,811
11,744
20,473
8,615
15,426
11,744
20,473
8,615
15,426
16,911
3,562
20,473
12,783
2,643
15,426
16,911
3,562
20,473
12,783
2,646
15,429
16,984
6,810
16,984
6,810
(5,068)
11,916
(3,741)
3,069
(5,068)
11,916
(3,741)
3,069
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
5. DIVIDENDS (continued)
(b) Dividends declared after balance date
Since the end of the financial year the directors have declared a final dividend for the year ended 30 June 2009
3.0 of cents per share (2008: final 3.0 cents per share) fully franked at the tax rate of 30%, payable on
4 September 2009, but not recognised as a liability at the end of the financial year.
6. CURRENT ASSETS - CASH AND CASH EQUIVALENTS
Cash at bank
Short term bank deposits
Consolidated
Parent
2009
$’000
27,012
8,806
35,818
2008
$’000
2,623
41,022
43,645
2009
$’000
27,012
7,988
35,000
2008
$’000
2,623
41,019
43,642
7. CURRENT ASSETS - TRADE AND OTHER RECEIVABLES
Dividends receivable
Distributions receivable
Interest receivable
Amounts receivable from controlled entities
Outstanding settlements
Other receivable
2,723
-
167
-
-
29
2,919
2,948
197
406
-
833
29
4,413
2,533
-
137
-
-
12
2,682
2,948
197
406
-
833
29
4,413
8. FINANCIAL ASSETS - INVESTMENT PORTFOLIO
Current Investment Portfolio
Listed securities at fair value held for trading:
- Shares in other corporations
Non-Current Investment Portfolio
Listed securities at fair value available for sale:
- Shares in other corporations
247
-
24
-
442,210
394,001
442,180
394,001
Shares in controlled entities at cost
-
-
197,335
95,386
442,210
394,001
639,515
489,387
Total Investment Portfolio
442,457
394,001
639,539
489,387
2009 Annual Report
37
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
9. PROPERTY, PLANT AND EQUIPMENT
Office equipment, furniture & fittings at cost
Accumulated depreciation
Total
Reconciliation of the carrying amounts of each class of
asset at the beginning and end of the financial year:
Office equipment, furniture & fittings at cost
Carrying value at 1/7
Additions
Disposals
Depreciation expense
Carrying value at 30/6
Consolidated
Parent
2009
$’000
19
(8)
11
2008
$’000
6
(6)
-
2009
$’000
12
(2)
10
2008
$’000
-
-
-
-
13
-
(2)
11
-
-
-
-
-
-
12
-
(2)
10
10. NON CURRENT ASSETS - DEFERRED TAX ASSETS
The deferred tax asset balance comprises the following
timing differences and unused tax losses:
Transaction costs on equity issues
Accrued expenses
Tax losses
553
19
2,728
3,300
489
9
-
498
355
16
2,716
3,087
-
-
-
-
-
488
9
-
497
38
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
10. NON CURRENT ASSETS - DEFERRED TAX ASSETS (continued)
Credited/
(Charged) Credited/ Balances
Tax
Tax
Balance
Opening to Income (Charged) Transferred
Balance Statement
Closing
to Equity On Takeover Transferred Provision Balance
Over
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Parent
Transaction costs on equity
issues
Accrued expenses
Tax losses
416
9
649
(407)
-
(617)
479
-
-
Balance as at 30 June 2008 1,074
(1,024)
479
Transaction costs on equity
issues
488
(133)
Accrued expenses
Tax losses
9
-
Balance as at 30 June 2009
497
Consolidated
Transaction costs on equity
issues
Accrued expenses
Tax losses
417
9
624
7
1,302
1,176
(407)
-
(617)
-
-
-
-
479
-
-
Balance as at 30 June 2008 1,050
(1,024)
479
-
-
-
-
-
-
-
-
-
-
-
-
Transaction costs on equity
issues
Accrued expenses
Tax losses
489
9
-
Balance as at 30 June 2009
498
(133)
(17)
3,090
2,940
-
-
-
-
197
27
-
224
11. TRADE AND OTHER PAYABLES
-
-
(25)
(25)
-
-
1,414
1,414
-
-
-
-
-
-
(362)
(362)
-
-
(7)
(7)
-
-
-
-
-
-
(7)
(7)
-
-
-
-
488
9
-
497
355
16
2,716
3,087
489
9
-
498
553
19
2,728
3,300
Current liabilities
Creditors and accruals
Non current liabilities
Amount due to controlled entities
2009 Annual Report
Consolidated
Parent
2009
$’000
2008
$’000
2009
$’000
2008
$’000
84
-
166
74
166
-
203,679
96,460
39
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
12. CURRENT TAX LIABILITIES
Provision for income tax
13. EMPLOYEE BENEFITS
Aggregate employee benefits
Analysis of provisions:
Current
Non current
Consolidated
Parent
2009
$’000
2,043
2008
$’000
172
2009
$’000
2,043
2008
$’000
172
3
3
-
3
-
-
-
-
3
3
-
3
-
-
-
-
14. NON CURRENT LIABILITIES - DEFERRED TAX LIABILITIES
The deferred tax liability balance comprises
the following timing differences:
Revaluation of investments held
Non rebateable dividend receivable and
interest receivable
Movements in deferred
tax liabilities
Parent
Revaluation of investment portfolio
Non rebateable dividends
receivable and interest receivable
Balance as at 30 June 2008
Revaluation of investment portfolio
Non rebateable dividends
receivable and interest receivable
Balance as at 30 June 2009
Consolidated
Revaluation of investment portfolio
Non rebateable dividends
receivable and interest receivable
Balance as at 30 June 2008
Revaluation of investment portfolio
Non rebateable dividends
receivable and interest receivable
Balance as at 30 June 2009
40
11,241
30,603
12,124
30,603
34
11,275
208
30,811
41
12,165
208
30,811
(Credited)/
Charged
to Income
Statement
$'000
(Credited)/
Charged
to Equity
$'000
Tax
Balances
Transferred Closing
Balance
$'000
In
$'000
Opening
Balance
$'000
(348)
(17,769)
(362)
12,124
43,617
806
(13,820)
160
43,777
30,603
208
30,811
48
854
-
(13,820)
(167)
(515)
-
(17,769)
43,617
806
(13,820)
160
43,777
48
854
-
(13,820)
-
-
-
30,603
208
30,811
-
-
-
-
-
41
12,165
30,603
208
30,811
30,603
(1,356)
(17,644)
(362)
11,241
208
30,811
(174)
(1,530)
-
(17,644)
-
-
34
11,275
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
15. SHARE CAPITAL
a) Issued and paid-up capital
394,143,000 ordinary shares fully paid
(2008: 290,966,594)
(b) Movement in ordinary shares
Beginning of the financial year
Issued during the year:
- share placement
- dividend reinvestment plan
- share purchase plan
- issued as consideration on takeover
- less net transaction costs
End of the financial year
Consolidated
2009
$’000
2008
$’000
Parent
2009
$’000
2008
$’000
420,925
322,915
420,925
322,915
2009
$’000
Number of
Shares
2008
$’000
Number of
Shares
290,966,594
322,915
252,247,770
268,834
-
3,813,744
-
99,362,662
394,143,000
-
3,562
-
94,526
(78)
420,925
34,000,000
2,007,442
2,711,382
-
290,966,594
49,300
2,644
3,254
-
(1,117)
322,915
The Parent does not have an authorised share capital and the ordinary shares on issue have no par value.
Between December 2008 and January 2009, the Parent issued 99,362,662 fully paid ordinary shares at as
consideration for the takeover of Huntley Investment Company Limited.
Holders of ordinary shares participate in dividends and the proceeds on a winding up of the parent entity in
proportion to the number of shares held.
At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands.
(c) Capital Management
The Group’s objective in managing capital is to continue to provide shareholders with attractive investment
returns through access to a steady stream of fully-franked dividends and enhancement of capital invested,
with goals of paying an enhanced level of dividends and providing attractive total returns over the medium to
long term.
The Group recognises that its capital will fluctuate in accordance with market conditions and in order to
maintain or adjust the capital structure, may adjust the amount of dividends paid, issue new shares from
time-to-time or return capital to shareholders.
The Group’s capital consists of shareholders equity plus net debt. The movement in equity is shown in the
Consolidated Statement of Changes in Equity. At 30 June 2009 net debt was $ Nil (2008: $Nil).
2009 Annual Report
41
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
16. REVALUATION RESERVE
The Revaluation reserve is used to record increments and decrements on the revaluation of the investment
portfolio.
Consolidated
Parent
2009
$’000
2008
$’000
2009
$’000
2008
$’000
Balance at the beginning of the year
67,381
100,128
69,333
102,080
Revaluation of investment portfolio
(40,939)
(32,747)
(42,275)
(32,747)
Net unrealised impairment loss on investment
portfolio transferred to retained profits
Balance at the end of the year
1,006
27,448
-
1,006
-
67,381
28,064
69,333
17. REALISED CAPITAL GAINS RESERVE
The Realised capital gains reserve records gains or losses after applicable taxation arising from the disposal of
securities in the investment portfolio.
Balance at the beginning of the year
6,048
2,660
6,048
2,660
Net (losses) / gains on investment portfolio
transferred from retained profits
Balance at the end of the year
(2,306)
3,742
3,388
6,048
(3,038)
3,010
3,388
6,048
18. RETAINED PROFITS
Retained profits at the beginning of the year
Net profit attributable to members of the company
15,079
22,112
11,317
22,576
12,049
15,758
8,286
22,577
Net losses / (gains) on investment portfolio transferred
to realised capital gains reserve
2,306
(3,388)
3,038
(3,388)
Dividends provided for or paid
(20,473)
(15,426)
(20,473)
(15,426)
Retained profits at the end of the year
19,024
15,079
10,372
12,049
42
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
19. RECONCILIATION OF CASH FLOW
Consolidated
Parent
2009
$’000
2008
$’000
2009
$’000
2008
$’000
21,966
22,576
15,758
22,577
2,306
(3,323)
1,006
2
48
1,178
512
(710)
3
(493)
870
23,365
(4,625)
-
-
-
-
(797)
1,031
(2)
-
854
172
19,209
3,038
-
1,006
2
(24)
867
488
(92)
3
(528)
657
21,175
(4,625)
-
-
-
-
(797)
1,031
(2)
-
854
172
19,210
(a) Reconcilation of cash flow from operating
activities to operating profit
Net Profit from ordinary activities
Non cash item :
- net losses / (gains) on investment portfolio
- discount on acquisition of controlled entity
- unrealised impairment loss on available for
sale financial assets
- depreciation expense
Change in assets and liabilities, net of the effects
of purchase of subsidiaries
(Increase) / Decrease in available for sale financial assets
(Increase) / Decrease in receivables and prepayments
(Increase) / Decrease in deferred tax assets
Increase / (Decrease) in payables
Increase / (Decrease) in employee entitlements
Increase / (Decrease) in deferred tax liabilities
Increase / (Decrease) in current tax liabilities
Net cash (outflow) / inflow from operating activities
(b) Non-cash financing and investing activities
i) Dividend reinvestment plan
Under the terms of the Dividend Reinvestment Plan, $3,561,656 (2008: $2,644,000) of dividends were
paid via the issue of 3,813,744 shares (2008: 2,007,442).
ii) Transfer of investment portfolio to parent entity
During 2009, the Company transferred $86,000,030 of listed investments from its wholly owned
subsidiary, Huntley investment Company Limited at carrying value into the Company investment portfolio.
The transfer consideration was $86,000,030 and was settled via inter-company loan.
There was no share transfer in 2008.
2009 Annual Report
43
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
19. RECONCILIATION OF CASH FLOW (continued)
(c) Acquisition of controlled entities
During 2009, the Group completed the takeover of Huntley Investment Company Limited and at balance date
owns 100% of the share capital of the company. Purchase consideration was the issue of 99,362,662 ordinary
shares of Brickworks Investment Company Limited.
Payment for investment:
Issue of shares
Transaction costs
Shares transferred from available for sale investments
Total cost of acquisition
Fair value of assets acquired:
Cash and cash equivalents
Trade and other receivables
Held for trading financial assets
Prepayments
Available for sale financial assets
Deferred tax assets
Trade and other payables
Current tax liabilities
Minority interests during acquisition phase:
Recognised in income statement
Recognised in reserves
Discount on acquisition
No controlled entities were acquired in 2008.
20. EARNINGS PER SHARE
Profit for the year
Earnings used in calculating basic and diluted
earnings per share
Weighted average number of ordinary shares used
in the calculation of basic and diluted earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
44
$’000
94,526
1,412
6,012
101,950
16,636
585
295
7
89,707
224
(628)
(1,001)
105,825
146
406
552
3,323
Consolidated
2009
$’000
2008
$’000
22,112
22,576
22,112
22,576
2009
2008
No. ('000) No. ('000)
348,548
281,950
6.34
6.34
8.01
8.01
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
21. AUDITOR’S REMUNERATION
Remuneration of the auditor of the parent entity for:
(a) Auditing the financial report of the
Parent and the controlled entities
(b) Taxation services
Consolidated
Parent
2009
$’000
2008
$’000
2009
$’000
2008
$’000
22
-
22
29
2
31
22
-
22
29
2
31
22. KEY MANAGEMENT PERSONNEL REMUNERATION
(a) The names and positions held of group directors and key management personnel in office at any time
during the financial year are:
Name
RD Millner
DC Hall
AJ Payne
GG Hill
IT Huntley
TCD Millner
Position
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director (appointed 10 February 2009)
Chief Executive Officer (appointed 1 December 2008)
There are no other employees of the Parent and controlled entities.
Details of the nature and amount of each Non – Executive Director’s and key management personnel’s
emoluments from the Parent and controlled entities in respect of the year to 30 June have been included in the
Remuneration Report section of the Directors’ Report.
Payment to Non-Executive Directors is fixed at $300,000 until shareholders, by ordinary resolution, approve
some other fixed sum amount. This amount is to be divided amongst the Directors as they may determine.
These fees exclude any additional fee for any service based agreement which may be agreed from time to
time, and also excludes statutory superannuation and the reimbursement of out of pocket expenses.
23. SUPERANNUATION COMMITMENTS
The Group contributes superannuation payments on behalf of Directors and employees in accordance with
relevant legislation. Superannuation funds are nominated by the individual Directors and employees and are
independent of the Group.
2009 Annual Report
45
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
24. RELATED PARTY TRANSACTIONS
Related parties of the Group fall into the following categories:
(i) Controlled Entities
(a) Acquisition of controlled entities
During 2009, the Group completed the takeover of Huntley Investment Company Limited and at balance date
owns 100% of the share capital of the company. Purchase consideration was the issue of 99,362,662 ordinary
shares of Brickworks Investment Company Limited. A discount on acquisition of $3,323,000 was recognised in
the income statement of the Group in the current year resulting from this acquisition.
The effective date that control was gained was 1 December 2008. The contribution to the consolidated profit of
the group by Huntley Investment Company Limited from that date to 30 June 2009 was $2,146,000.
No controlled entities were acquired in 2008.
At 30 June 2009, subsidiaries of the Parent were:
Country of Incorporation
Percentage Owned (%)
Brickworks Securities Pty Limited
Pacific Strategic Investments Pty Limited
Huntley Investment Company Limited
Australia
Australia
Australia
2009
100
100
100
2008
100
100
4
Transactions between the Parent and its controlled entities consist of loan balance due from the Parent to its
controlled entities. No interest is charged on the loan balance by the controlled entities and no repayment
period is fixed for the loan.
(b) Disposal of controlled entities
There was no disposal of controlled entities in 2009 (2008: Nil).
(ii) Directors/Officers Related Entities
Persons who were Directors/Officers of Brickworks Investment Company Limited for part or all of the year
ended 30 June 2009 were:
Directors:
RD Millner
DC Hall
AJ Payne
GG Hill
IT Huntley
Chief Executive Officer:
TCD Millner
Company Secretary:
RJ Pillinger
Pitt Capital Partners Limited
The Company appointed Pitt Capital Partners Limited, an entity in which Mr RD Millner has an indirect interest
to act as the Company’s corporate advisor during the takeover of Huntley Investment Company Limited. Fees
paid to Pitt Capital Partners Limited were $1,115,720 inclusive of GST (2008: $Nil). No fees remain payable at
30 June 2009 (2008: $Nil).
46
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
(ii) Directors/Officers Related Entities (contiuned)
Souls Funds Management Limited
From the period 1 July 2008 to 30 November 2008, the Group utilised the services of Souls Funds
Management Limited, an entity in which Messrs. RD Millner and GG Hill have an indirect interest, to act as
investment manager. Under the agreement between the two parties, the Group agrees to pay Souls Funds
Management Limited a monthly management fee equal to one-twelfth of 0.35% of the assets of the Group in
the preceding month under their management.
Management fees paid or payable for the period ending 30 November 2008 were $529,802 (2008:
$1,417,805); and the management fee owed by the Group to Souls Funds Management Limited at 30 June
2009 was $Nil (2008: $126,413).
Corporate and Administrative Services Pty Limited
The Group has appointed Corporate & Administrative Services Pty Limited, an entity in which Mr. RD Millner
has an indirect interest to provide the Group with administration, company secretarial services and preparation
of all financial accounts.
Administration and secretarial fees paid for services provided to the Parent and its controlled entities for the
year ending 30 June 2009 were $111,540 (2008: $111,540), including GST and are at standard market rates.
No administration fees were owed by the Group to Corporate & Administrative Services Pty Limited as at
30 June 2009.
(iii) Transactions in securities
Aggregate number of securities acquired or disposed of by Directors or their Director-related entities:
Acquisition - Shares
Disposal - Shares
2009
No. of Shares
11,846,886
-
2008
No. of Shares
2,039,795
-
During the year ended 30 June 2009, entities related to Directors acquired, under normal commercial terms,
shares in the Parent as follows:
(i) Entities related to Mr RD Millner:
716,023 shares (2008: 1,989,907 shares)
(ii) Entities related to Mr DC Hall:
Nil shares (2008: 11,916 shares)
(iii) Entities related to Mr AJ Payne:
49,026 shares (2008: 33,806 shares)
(iv) Entities related to Mr. GG Hill:
76,936 shares (2008: 4,166 shares)
(v) Entities related to Mr. IT Huntley*
11,004,901 shares (2008: Nil shares)
* Mr. IT Huntley was issued these shares as consideration for his holding in Huntley Investment Company
Limited under the terms of the takeover.
Directors acquired shares through Dividend Reinvestment Plan or on-market purchase.
There has been no other change to Directors’ shareholdings during the year ended 30 June 2009.
Messrs RD Millner, DC Hall, AJ Payne GG Hill and IT Huntley, or their associated entities, being shareholders
are entitled to receive dividends.
2009 Annual Report
47
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
25. FINANCIAL REPORTING BY SEGMENTS
The Group operates predominately in the securities industry in Australia.
26. MANAGEMENT OF FINANCIAL RISK
The risks associated with the holding of financial instruments such as investments, cash, bank bills and
borrowings include market risk, credit risk and liquidity risk. The Audit Committee has approved the policies
and procedures that have been established to manage these risks. The effectiveness of these policies and
procedures is reviewed by the Audit Committee.
a) Financial instruments’ terms, conditions and accounting policies
The Group’s accounting policies are included in note 1, while the terms and conditions of each class of
financial asset, financial liability and equity instrument, both recognised and unrecognised at the balance date,
are included under the appropriate note for that instrument.
b) Net fair values
The carrying amounts of financial instruments in the balance sheets approximate their net fair value determined
in accordance with the accounting policies disclosed in note 1 to the accounts.
c) Credit risk
The risk that a financial loss will occur because counterparty to a financial instrument fails to discharge an
obligation is known as credit risk.
The credit risk on the Group’s financial assets, excluding investments, is the carrying amount of those assets.
The Group’s principal credit risk exposures arise from the investment in liquid assets, such as cash and bank
bills, and income receivable.
The spread of cash and bank bills between banks is reviewed monthly by the board to determine if it is within
agreed limits. Income receivable is comprised of accrued interest and dividends and distributions which were
brought to account on the date the shares or units traded ex-dividend.
There are no financial instruments overdue or considered to be impaired.
d) Market risk
Market risk is the risk that changes in market prices will affect the fair value of the financial instrument.
The Group is a long term investor in companies and trusts and is therefore exposed to market risk through the
movement of the share prices of the companies and trusts in which it is invested.
As the market value of individual companies fluctuates throughout the day, the market value of the portfolio
changes continuously. The change in the market value of the portfolio is recognised through the Revaluation
Reserve. Listed Investments represent 92% (2008: 89%) of total assets.
A 5% movement in the market value of each of the companies and trusts within the portfolio would result in a
5% (2008: 4%) movement in the net assets before provision for tax on unrealised capital gains at 30 June 2009.
The net asset backing before provision for tax on unrealised capital gains would move by 5.6 cents per share
at 30 June 2009 (2008: 6.8 cents).
The performance of the companies within the portfolio is monitored by the Investment Committee and the
Board as a whole.
48
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
26. MANAGEMENT OF FINANCIAL RISK (continued)
d) Market risk (continued)
The Group seeks to reduce market risk at the investment portfolio level by ensuring that it is not, in the opinion
of the Investment Committee, overly exposed to one Group or one particular sector of the market.
At 30 June, the spread of investments is in the following sectors:
Percentage of total investment
Amount
Sector
Banks
Energy
Materials
Food & Staples Retailing
Bank deposits
Insurance
Diversified Financials
Telecommunications Services
Commercial Services & Supplies
Utilities
Consumer Services
Food, Beverages & Tobacco
Media
Capital Goods
Transportation
Real Estate
Retailing
Health Care Equipment & Services
Consumer Durables & Apparel
2009
%
24.48
17.87
12.67
7.88
7.49
5.86
4.86
3.94
3.92
3.41
1.93
1.80
1.09
0.84
0.71
0.56
0.50
0.15
0.04
100.0
2008
%
23.21
20.85
13.19
7.22
9.97
4.49
5.15
2.50
3.68
1.73
1.16
1.31
2.20
1.03
1.07
0.72
0.42
0.03
0.09
100.0
2009
$’000
117,079
85,488
60,611
37,679
35,818
28,013
23,249
18,849
18,746
16,327
9,229
8,586
5,203
4,032
3,398
2,677
2,390
695
206
478,275
2008
$’000
101,596
91,252
57,719
31,588
43,645
19,629
22,526
10,927
16,105
7,565
5,061
5,730
9,610
4,494
4,669
3,141
1,854
133
402
437,646
Securities representing over 5% of the investment portfolio at 30 June were:
Percentage of total investment
Amount
Company
New Hope Corporation Limited
BHP Billiton Limited
National Australia Bank Limited
Commonwealth Bank
Westpac Banking Corporation
2009
%
14.1%
9.9%
9.0%
7.2%
5.2%
45.4%
2008
%
16.9%
9.2%
9.6%
6.7%
0.9%
43.3%
2009 Annual Report
2009
$’000
67,310
47,190
39,590
31,920
22,930
208,940
2008
$’000
74,099
40,361
41,920
29,307
4,063
189,750
49
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009 (continued)
26. MANAGEMENT OF FINANCIAL RISK (continued)
d) Market risk (continued)
The relative weightings of the individual securities and relevant market sectors are reviewed at each meeting of
the investment Committee and the Board, and risk can be managed by reducing exposure where necessary.
There are no set parameters as to a minimum or maximum amount of the portfolio that can be invested in a
single company or sector.
The Group is not exposed to foreign currency risk as all its investments are quoted in Australian dollars. The
fair value of the Group’s other financial instruments is unlikely to be materially affected by a movement in
interest rates as they generally have short dated maturities and fixed interest rates.
e) Liquidity risk
Liquidity risk is the risk that the Group is unable to meet its financial obligations as they fall due.
The Group has a zero level of gearing, and sufficient cash reserves to meet operating cash requirements at
current levels for well in excess of 5 years.
The Group’s other major cash outflows are the purchase of securities and dividends paid to shareholders and
the level of both of these is fully controllable by the Board.
Furthermore, the majority of the assets of the Group in the form of readily tradable securities which can be sold
on-market if necessary.
f) Capital risk management
The Group invests its equity in a diversified portfolio of assets that aim to generate a growing income stream for
distribution to shareholders in the form of fully franked dividends.
The capital base is managed to ensure there are funds available for investment as opportunities arise. Capital is
increased annually through the issue of shares under the Dividend Reinvestment Plan. Other means of
increasing capital include Rights Issues, Share Placements and Share Purchase Plans.
27. CONTINGENT LIABILITIES
The Group has no contingent liabilities at 30 June 2009.
28. AUTHORISATION
The financial report was authorised for issue on 11 August 2009 by the Board of Directors.
50
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
DIRECTORS’ DECLARATION
The Directors of Brickworks Investment Company Limited declare that:
1.
The financial statements and notes, as set out on pages 11 to 50, are in accordance with the
Corporations Act 2001 and:
a.
b.
comply with Accounting Standards and the Corporations Regulations; and
give a true and fair view of the financial position as at 30 June 2009 and of the performance
for the year ended on that date of the consolidated and parent entities;
2.
3.
In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable;
This declaration has been made after receiving the declaration required to be made to the Directors
in accordance with section 295A of the Corporations Act 2001 for the financial year ending
30 June 2009.
This declaration is made in accordance with a resolution of the Board of Directors.
Robert D Millner
Director
Sydney
11 August 2009
2009 Annual Report
51
AUDITOR’S REPORT
52
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
AUDITOR’S INDEPENDENCE DECLARATION
2009 Annual Report
53
ASX Additional Information
1) Equity Holders
At 31 July 2009, there were 8,466 holders of ordinary shares in the capital of the Parent. These holders were
distributed as follows:
No. of Shares held
1
– 1,000
1,001
– 5,000
5,001
– 10,000
10,001 – 100,000
100,001 and over
Total
Holding less than a marketable parcel of 417 shares
Votes of Members
Article 5.12 of the Company’s Constitution provides:
No. of Shareholders
501
2,002
1,934
6,066
512
11,015
234
a) Subject to this Constitution and any rights or restrictions attached to a class of Shares, on a show of
hands at a meeting of Members, every Eligible Member present has one vote.
b) Subject to this Constitution and any rights or restrictions attached to a class of Shares, on a poll at a
meeting of Members, every Eligible Member present has:
(i) one vote for each fully paid up Share (whether the issue price of the Share was paid up or credited or
both) that the Eligible Member holds; and
(ii) a fraction of one vote for each partly paid up Share that the Eligible Member holds. The fraction is
equal to the proportion which the amount paid up on that Share (excluding amounts credited) is to
the total amounts paid up and payable (excluding amounts credited on that Share).
54
2009 Annual Report
B r i c k w o r k s I n v e s t m e n t C o m p a n y L i m i t e d
ASX Additional Information (continued)
The 20 largest holdings of the Parent’s shares as at 31 July 2009 are listed below:
Name
Washington H Soul Pattinson & Company Ltd
Argo Investments Limited
Huntley Group Investments Pty Ltd
Bougainville Copper Limited
J S Millner Holdings Pty Limited
Huntley Investment Company Limited
Huntley Family Holdings Pty Ltd
UBS Wealth Management Australia Nominees Pty Ltd
Chiatta Pty Ltd
Mr David McKee + Mrs Pamela Forbes McKee
T G Millner Holdings Pty Limited
D E C Investments Pty Limited
Mr Galfrid Leslie Melville
Farjoy Pty Ltd
Aust Executor Trustees Ltd
Mrs Patricia Roberta Huntley
Trephant Pty Ltd
Libraries Board of South Australia
Mr Philip Kidman Reid + Mrs Jean Phillips Reid
Belanna Pty Limited
Total top 20 security holders
Total number of shares on issue
2) Substantial Shareholders
Shares Held
53,561,922
8,311,237
8,206,475
7,297,357
2,971,846
1,866,429
1,820,737
1,591,649
1,464,328
1,257,079
1,140,731
1,028,408
957,043
917,655
895,927
890,052
840,000
833,161
820,887
792,070
%
13.59%
2.11%
2.08%
1.85%
0.75%
0.47%
0.46%
0.40%
0.37%
0.32%
0.29%
0.26%
0.24%
0.23%
0.23%
0.23%
0.21%
0.21%
0.21%
0.20%
97,464,993
394,143,000
24.71%
As at 31 July 2009 the name and holding of substantial shareholder as disclosed in a notice received by the
Parent is:
Substantial Shareholders
No. of Shares
% of Total
Washington H Soul Pattinson & Company Ltd
53,561,922
13.59%
2009 Annual Report
55
ASX Additional Information (continued)
3) Other Information:
• There is no current on-market buy-back in place.
• There were 171 (2008: 417) transactions in securities undertaken by the Parent and the total brokerage
paid or accrued during the year was $81,124 (2008: $292,959)
4) Management Fees
Management fees paid and accrued during the year ended 30 June 2009 to Souls Funds Management Limited
were $529,802 (2008: $1,417,805).
5) Management Expense Ratio:
The Management Expense Ratio (“MER”) is the total expenses of the Group for the financial year, as shown
in the income statement, expressed as a percentage of the average total assets of the Group for the financial
year.
30/06/04
30/06/05
30/06/06
30/06/07
30/06/08
30/06/09
0.69%
0.71%
0.56%
0.46%
0.46%
0.31%
56
2009 Annual Report