-
Cellnet Group Limited and its consolidated entities
Financial Report
Contents
Corporate information
Directors’ report
Statement of financial position
Statement of comprehensive income
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
1 Corporate information
2 Significant accounting policies
3 Financial risk management objectives and policies
4 Segment information
5 Other revenue
6 Expenses
7 Income tax
8 Earnings per share
9 Current assets – cash and cash equivalents
10 Current assets – trade and other receivables
11 Current assets – inventories
12 Current assets income tax receivable
13 Non-current assets – property, plant and equipment
14 Current and non-current liabilities – trade and other payables
15 Current and non-current liabilities – provisions
16 Share-based payments
17 Financial instruments
18 Commitments
19 Financial guarantees
20 Share buy-back
21 Discontinued operation
22 Related party disclosure
23 Key management personnel
24 Subsequent events
25 Parent entity information
26 Contributed equity and reserves
27 Dividend paid and proposed
28 Auditors remuneration
29 Cash flow statement reconciliation
30 Investment in an associate
31 Business combination
32 Intangible assets
Directors’ declaration
Independent auditors’ report
Corporate Governance Statement
ASX Additional Information
Page
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2
Cellnet Group Limited and its consolidated entities
Financial Report
Corporate Information
ABN 97 010 721 749
Directors
A. Beard (Chairman)
M. Brookman
E. Kaplan
Company Secretary
C. Barnes
Principal Registered Office
Cellnet Group Limited
59-61 Qantas Drive
Eagle Farm QLD 4009
Phone: 1300 CELLNET
Fax: 1800 CELLNET
Banker
Westpac Bank Corporation
260 Queen Street
Brisbane QLD 4000
Auditor
Ernst & Young
111 Eagle Street
Brisbane QLD 4000
Share Register
Link Market Services Ltd
Level 15 ANZ Building
324 Queen Street, Brisbane QLD 4000
Phone: +61 2 8280 7454
Securities Exchange
The Company is listed on the Australian Securities Exchange. The Home exchange is Brisbane.
3
Cellnet Group Limited and its consolidated entities
Financial Report
Director’s Report
Your Directors submit their report for the year ended 30 June 2012.
Directors
The names and details of the Company’s Directors in office during the financial year and until the date of this report are as
follows. Directors were in office for this entire period unless otherwise stated.
Names, qualifications, experience and special responsibilities
Alexander Beard,
B.Com, MAICD, FCA
(Non-executive Chairman –appointed Director 15 December 2006 and Chairman 20 August 2007)
Mr. Beard is a Chartered Accountant and an experienced financier of growth companies as well as having gained considerable
industry experience through his investee board roles. He is a fellow of the Institute of Chartered Accountants and a member of
the Institute of Company Directors. Mr. Beard is an Executive Director of CVC Property Fund (ASX code: CJT), Non Executive
Director of Mnet Group (ASX code: MNZ), Non Executive Director of Amadeus Energy Limited (ASX code: AMU), Executive
Director of CVC Limited (ASX code: CVC), Non-Executive Director Villa World Group (ASX code: VLW).
Mel Brookman
(Non-Executive Director – appointed 4 June 1992)
Mr Brookman was a co-founder of Cellnet in 1992. He has over 20 years experience in mobile phone and distribution industries.
Previous Managing Director of the Company from 1999 to November 2002. Chairman of the Audit and Risk Management
Committee. Mr. Brookman is a Non Executive Director of Mnet Group (ASX code: MNZ).
Stuart Smith
B.Com, MAICD, CA
(Chief Executive Officer – appointed 30 January 2009, Managing Director appointed 28 October 2009. Resigned 25 July
2012)
Mr Smith joined the company as Chief Financial Officer in February 2008. He is a Chartered Accountant with previous senior
appointments which include Chief Financial Officer of AAPT Mobile (Cellular One). Member of Audit and Risk Management
Committee.
Elliot Kaplan
B. Acc, CA
(Non-Executive Director – appointed 25 July 2012)
Mr Kaplan is a Chartered Accountant with extensive experience in senior financial and chief executive officer roles in both private
and publicly listed companies. His experience, from both an investor and investee perspective spans a diverse range of
industries including manufacturing, environmental, distribution and services. Mr Kaplan is Managing Director of CVC Private
Equity Limited, Chairman and Non Executive Director of Pro-Pac Packaging Limited (ASX code: PPG), and former Non-
Executive Director of Dolomatrix Limited (ASX code: DMX). Member of Audit and Risk Management Committee.
As at the date of this report, the interest of the directors in the shares and options of Cellnet Group Limited were:
Director
A. Beard
M. Brookman
S. Smith (i)
E. Kaplan
(i) Resigned 25 July 2012.
Number of ordinary
shares
Number of restricted
shares
Number of options
-
-
-
-
-
-
2,000,000
-
-
400,000
900,000
-
4
Cellnet Group Limited and its consolidated entities
Financial Report
Directors Report (continued)
Company Secretary
Chris Barnes
B. Acc, CPA
(Company Secretary and Financial Controller – appointed 9 March 2011)
Mr Barnes has been with the Company since 2006. He holds a Bachelor of Accounting Degree and is CPA qualified. Mr Barnes
replaced Mr Mackenzie, who resigned as Company Secretary on 9 March 2011.
Dividends
Details
Final dividends recommended
Dividends paid in the year:
Interim for the year
Special for the year
Final for 2011 shown as recommended in the
2011 financial report
Special for 2011 shown as recommended in
the 2011 financial report
Principal Activities
Cents
$000
0.0
-
1.0
10.0
1.0
1.5
610
5,770
6,380
613
919
1,532
The principal activities during the year of the entities within the consolidated entity were:
(cid:1) Wholesale distribution of flash memory, mobile phone accessories and CE equipment and accessories, and fulfilment
services to the mobile telecommunications and retail industries in Australia and New Zealand.
(cid:1) Sales and distribution of products on-line.
The company advised on 8 June 2012 that it planned to exit the online business segment. This exit strategy is still in process at
30 June 2012 and as a result the online business segment has been treated as a discontinued operation for the 2012 financial
year. Other than the online business segment being discontinued there has been no other material changes to the nature of
these activities during the year.
Operating and financial review
The pre tax net profit from continuing operations represents a 19.4% increase compared to the prior year. This is an
encouraging result given the generally challenging conditions that have been experienced by the retail sector which the company
services. Revenue from continuing operations has decreased by $10.5 million (14.1%) compared with the prior year, however
gross profit has remained generally consistent due to an improved product mix, and an increased third party logistic offering.
In July 2011 the Board announced its intention to expand into the online retail business segment, with a product offering
including both grocery and opportunistic products. This was viewed as an avenue for diversification and earnings growth, as it
would provide both a new channel to market as well as leverage off the underutilised infrastructure available to the consolidated
entity. After nearly a full year of operation, the Board viewed that not enough traction was gained in the online retail space to
warrant the further investment required to achieve positive earnings. As a result on 8 June 2012 the Board announced that it
would exit the online retail business segment and refocus its energies back to its profitable core business of retail distribution and
third party logistics.
5
Cellnet Group Limited and its consolidated entities
Financial Report
Directors Report (continued)
During the year the company acquired 100% of OYT Pty Ltd. The entities that were discontinued during the current year were
OYT Pty Ltd, Cellnet Online Pty Ltd and Buyii Pty Ltd.
During the year the consolidated entity embarked on a share holder return initiative which resulted in 22.5 cents distributed to
shareholders by way of either fully franked dividend or equal capital return. This consumed approximately $13.2 million of cash
reserves, however the remaining cash balance of continuing operations of approximately $4.6 million is viewed as being
sufficient to fund any potential future acquisition opportunities as well as provide for future distributions to shareholders.
The on market share buy-back program continued in 2012 with a further $0.85 million (2011: $4.1 million) being consumed by
this initiative.
Significant changes in the state of affairs
There have been no acquisitions or disposals of business entities or operations in the current year apart from those outlined
above.
Significant events after balance date
On 25 July 2012 CEO Stuart Smith resigned from all of his positions with the consolidated entity. Mr. Smith’s replacement as
CEO is yet to be determined. His position on the Cellnet Board as an executive director was replaced by Mr. Elliot Kaplan who
will act as a non executive director.
Mr. Kaplan is a Chartered Accountant with extensive experience in both senior financial and chief executive officer roles. His
experience, from both an investor and investee perspective spans a diverse range of industries including manufacturing,
environmental, distribution and services.
Mr. Kaplan is the Managing Director of CVC Private Equity Limited, and Chairman of Pro-Pac Packaging Limited.
Other than as set out above, there are no other matters or circumstances that have arisen since the end of the financial year
which significantly affected or may significantly affect the operations of Cellnet Group Limited, the results of those operations, or
the state of affairs of Cellnet Group Limited in future financial years.
Likely developments
As explained above in respect of strategy and future performance, the consolidated entity is constantly reviewing the strategic
value inherent in the business. In conjunction with this, the consolidated entity will continue to pursue its trading activities to
further improve on operational aspects to produce the most beneficial long-term results for the shareholders of the Company.
Indemnification and insurance of officers
Indemnification
The Company has agreed to indemnify the current and former Directors and some officers of its controlled entities for all
liabilities to another person, other than the Company or a related body corporate that may arise from their position, except where
the liability arises out of conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full
amount of any such liabilities, including costs and expenses.
Insurance premiums
Insurance premiums have been paid in respect of Directors’ and Officers’ Liability Insurance. The Directors have not included
details of the nature of the liabilities covered or the amount of the premium paid in respect of Directors’ and Officers’ liability
insurance as such disclosure is prohibited under the terms of the contract.
6
Cellnet Group Limited and its consolidated entities
Financial Report
Directors Report (continued)
Directors’ meetings
The number of Directors’ meetings (including meetings of committees of Directors) and number of meetings attended by each of
the Directors of the Company during the financial year are:
Number of meetings held:
Number of meetings attended:
A. Beard
M. Brookman
S. Smith
Committee membership
Board
8
8
7
8
Meetings of Committees
Audit & Risk
Mgmt
2
Remuneration
1
1
1
1
2
2
2
As at the date of this report the Company had an Audit and Risk Management Committee and a Remuneration Committee.
Members acting on the committee of the Board during the year were:
Audit and risk management
M. Brookman (Chairman)
A. Beard
S. Smith (resigned 25 July 2012)
E. Kaplan (appointed 25 Jul 2012)
Remuneration
M. Brookman (Chairman)
A. Beard
S. Smith (resigned 25 July 2012)
E. Kaplan (appointed 25 Jul 2012)
Non-audit services
The following non-audit services were provided by the entity’s current auditor, Ernst & Young during the year. The Directors are
satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by
the Corporations Act 2001. The nature and scope of each type of non-audit service provided means that auditor independence
was not compromised.
Ernst & Young received or are due to receive the following amounts for the provision of non-audit services:
Tax compliance services
Rounding
Consolidated
2012
$
2011
$
10,403
10,386
The Company is of a kind referred to in ASIC Class Order 98/0100 dated 10 July 1998 and in accordance with that Class Order,
amounts in the financial report and Directors’ report have been rounded off to the nearest thousand dollars, unless otherwise
stated.
7
Cellnet Group Limited and its consolidated entities
Financial Report
Directors Report (continued)
Share options
2,000,000 shares were issued to S. Smith on 28 October 2009. The shares were issued for $0.35 each. It was accounted for as
an option. The theoretical value of the options was calculated as being $0.1195 per option. For further terms and conditions
refer to note 16 (b).
In the current year, a total of 3,300,000 options were awarded to key management personnel (KMP). The options have a vesting
period of two years. The fair value of these options is being expensed over the vesting period. None of these options have been
exercised as at 30 June 2012. For further details, please refer to note 16(c).
Auditor’s independence declaration
The Auditor’s independence declaration is set out on page 13 and forms part of the Directors’ report for the financial year ended
30 June 2012.
8
Cellnet Group Limited and its consolidated entities
Financial Report
Auditors Independence Declaration
9
Cellnet Group Limited and its consolidated entities
Financial Report
Directors Report (continued)
Remuneration Report (audited)
This remuneration report for the year ended 30 June 2012 outlines the remuneration arrangements of the consolidated entity
in accordance with the requirements of the Corporations Act 2001 (the Act) and its regulations. This information has been
audited as required by section 308 (3C) of the Act. The remuneration report details the remuneration arrangements for key
management personnel (KMP) who are defined as those persons having authority and responsibility for planning, directing
and controlling the major activities of the consolidated entity, directly or indirectly, including any director (whether executive or
otherwise) receiving the highest remuneration.
Remuneration report approval at FY11 AGM
The FY11 remuneration report received positive shareholder support at the FY11 AGM with a vote of 97% in favour.
For the purposes of this report, the term “executive” includes the Managing Director (MD), executive directors, senior executives,
general managers and secretaries of the consolidated entity and the term “director” refers to non-executive directors only.
The remuneration report is presented under the following sections:
1. Individual key management personnel disclosures
2. Remuneration at a glance
3. Board oversight of remuneration
4. Non-executive director remuneration arrangements
5. Executive remuneration arrangements and the link to company performance
6. Executive contractual arrangements
7. Additional statutory disclosures
1. Individual key management personnel disclosures
Key management personnel
(i) Directors
A. Beard
M. Brookman
S. Smith
(i) Resigned 25 July 2012
Chairman (non-executive)
Director (non-executive)
Managing Director and Joint Company Secretary (i)
(ii) Executives
D. Clarke
J. Laun
J. Phua
M. Wallace
C. Barnes
B. Watts
General Manager New Zealand
Information Technology Manager
General Manager Product Development & Supply Chain
General Manager Retail Sales
Financial Controller and Company Secretary
Logistics Manager
2. Remuneration at a glance
Remuneration levels for key management personnel are competitively set to attract and retain appropriately qualified and
experienced executives. The Board as necessary obtains independent advice on the appropriateness of remuneration packages of
the consolidated entity given trends in comparative companies both locally and internationally and the objectives of the Company’s
remuneration strategy.
10
Cellnet Group Limited and its consolidated entities
Financial Report
Directors Report (continued)
Remuneration Report (audited)
2. Remuneration at a glance (continued)
Non-Executive Directors receive a fixed fee for their services.
The remuneration structures explained below are designed to attract suitably qualified candidates, reward the achievement of
strategic objectives, and achieve the broader outcome of creation of value for shareholders. The remuneration structures
take into account:
•
•
•
the capability and experience of the key management personnel;
the key management personnel’s ability to control performance;
the consolidated entity’s performance including:
-
the consolidated entity’s earnings; and
-
the growth in share price and delivering of constant returns on shareholder wealth;
the amount of incentives within each key management person's remuneration.
•
Remuneration packages include a mix of fixed and variable remuneration including short and long-term performance-based
incentives.
3. Board oversight of remuneration
Remuneration committee
The remuneration committee is responsible for making recommendations to the board on the remuneration arrangements of
non-executive directors and executives.
The remuneration committee assesses the appropriateness of the nature and amount of remuneration of non-executive
directors and executives on a periodic basis by reference to the relevant employment market conditions, with the overall
objective of ensuring maximum stakeholder benefit from the retention of a high performing director and executive team.
Remuneration strategy
Cellnet Group Limited’s remuneration strategy is designed to attract, motivate and retain employees and non executive
directors by identifying and rewarding high performers and recognising the contribution of each employee to the continued
growth and success of the consolidated entity.
To this end, key objectives of the Company’s reward framework are to ensure that remuneration practices:
•
•
•
are aligned to the consolidated entity’s business strategy
offer competitive remuneration benchmarked against the external market
provide strong linkage between individual and the performance and rewards of the consolidated entity
Remuneration structure
In accordance with best practice corporate governance, the structure of non-executive director and executive remuneration is
separate and distinct.
4. Non-executive director remuneration arrangements
Total remuneration for all Non-Executive Directors, last voted upon by shareholders at the 1999 AGM, is not to exceed
$300,000 per annum.
The Chairman’s base fee is $54,500 per annum and Non-Executive Directors’ base fees are presently $50,000 per annum.
Non-Executive Directors do not receive performance related remuneration. Directors’ fees cover all major Board activities
and membership of the Audit and Risk Management Committee.
11
Cellnet Group Limited and its consolidated entities
Financial Report
Directors Report (continued)
Remuneration Report (audited)
5. Executive remuneration arrangements and the link to company performance
The processes adopted seek to consider performance across a wide spectrum of the business of the consolidated entity. As
necessary, reliance is placed on external sources to provide analysis and advice to ensure the remuneration is competitive.
Senior Executive remuneration is also reviewed upon promotion.
5.1 Fixed remuneration
Fixed remuneration consists of base remuneration (which is calculated on a total cost basis and includes any fringe benefits
tax charges related to employee benefits including motor vehicles) as well as employer contributions to superannuation
funds. Remuneration levels are reviewed annually by the Board.
5.2 Variable remuneration – short term incentive (STI) and long term incentive (LTI)
Performance linked remuneration includes both STI and LTI and is designed to reward key management personnel for
meeting or exceeding their financial and personal objectives. The STI is an ‘at risk’ bonus provided in the form of cash.
5.3 STI bonus
The consolidated entity operates an annual STI program that applies to executives and awards a cash bonus subject to the
attainment of clearly defined consolidated entity, business unit and individual measures. Actual STI payments awarded to
each executive depends on the extent to which specific targets set at the beginning of each six months are met. The targets
consist of a number of key performance indicators (KPIs) covering financial and non-financial, corporate and individual
measures of performance. A summary of these measures and weightings are set out below.
Earnings per share
Gross profit
Non financial measures:
•
Implementation of key growth
initiatives;
• Customer service
• Leadership/team contribution
Managing Director
General Manager Retail Sales
Other KMP
100%
-
-
-
100%
-
-
-
100%
These performance indicators were chosen as they represent the key drivers for the short term success of the business and
provide a framework for delivering long-term value.
On a biannual basis, after consideration of performance against KPI’s the Managing Director, in line with his responsibilities,
determine the amount, if any, of the short term incentive to be paid to each KMP. On an annual basis, after consideration of
the KPI’s, the board will determine the amount, if any, of the short term incentive to be paid to the Managing Director.
At the end of the financial year the Board assesses the actual performance of the consolidated entity and individual against
the KPI’s set at the beginning of the financial year. A percentage of the pre-determined maximum amount is awarded
depending on results, between 0% and 100 % for reaching target performance for non-financial objectives, and uncapped
beyond 100% in respect of financial performance objectives. No bonus is awarded where performance falls below the
minimum.
12
Cellnet Group Limited and its consolidated entities
Financial Report
Directors Report (continued)
Remuneration Report (audited)
5.3 STI bonus (continued)
STI awards for 2011 and 2012 financial years
For the 2012 financial year, a total payment of $278,985 was made which represents 94.8% of the total STI cash bonus
previously accrued in that period which has vested to executives. This was paid in bi-annual instalments in both the 2012 and
2013 financial years. The forfeitures amounted to $15,174. For the 2011 financial year, a total payment of $180,684 was
made which represents 88.1% of the total STI cash bonus previously accrued in that period which has vested to executives.
This was paid in bi-annual instalments in both the 2011 and 2012 financial years. The forfeitures amounted to $33,044.
5.4 LTIs- Executive Share Option Plan
Executive Share Option Plan
The Board established an Executive Share Option Plan which is designed to provide incentives to the Executives of the
consolidated entity. The plan was approved by shareholders at the Annual General Meeting held 18 December 2007.
Under the plan the Board has the discretion to issue options to Executives as long as the issue does not result in the
Executive owning or controlling the exercise of voting power attached to 5% or more of all shares then on issue. Each option
is convertible to one ordinary share. The exercise price of the options is determined by the Board.
The rules governing the operation of the plan may be amended, waived or modified, at any time by resolution of the Board
provided there is no reduction of rights to Executives in the plan. If an amendment reduces the rights of Executives in the
plan, it requires written consent of three-quarters of affected Executives.
The plan may be terminated or suspended at any time by a resolution of the Board, provided the termination or suspension
does not materially adversely affect the rights of persons holding shares issued under the plan at that time. There were a
total of 3,300,000 options issued in the current year to directors and KMP (2011: nil).
LTl Plan
The Board established a Long Term Incentive Plan which is designed to provide incentives to the Executives of the
consolidated entity. The plan was approved by shareholders at the Annual General Meeting held 18 December 2007.
The purpose and rules of the plan are the same as the Executive Share Option Plan described above, except that there is no
prohibition on issuing shares if it would result in an Executive owning (legally or beneficially) or controlling the exercise of
voting power attached to 5% or more of all shares then on issue. No shares were issued in the current year (2011: nil).
5.5 STI structure
The Board considers that the above performance-linked remuneration structure is appropriate at this time. It provides both
short-term focus on operating performance and longer term focus on share price growth.
Improving the performance of the operations was the main focus in setting the financial year 2012 short-term incentive.
13
Cellnet Group Limited and its consolidated entities
Financial Report
Directors Report (continued)
Remuneration Report (audited)
5.6 Consequences of performance on shareholder wealth
In considering the consolidated entity’s performance and benefits for shareholder wealth, the Board has regard to the
following indices in respect of the current financial year and previous financial years.
Details
Net profit attributable to equity holders
of the Company
Dividends paid
Reduction of share capital
Change in share price
Working capital days at year end
Cash flow
2012
2011
2010
2009
2008
($488,000)
$7,912,000
$5,308,000
($0.19)
63
($15,211,000)
$1,041,000
$699,000
-
$0.09
46
($708,000)
$1,472,000
-
-
$0.05
46
$557,000
($16,288,000)
-
-
($0.03)
18
$10,435,000
($4,702,000)
-
-
(0.65)
43.3*
$14,105,000
* As disclosed in 2009 Annual Financial Report, the 2007 cash and trade receivables were corrected in the previous reporting
period. This had an impact on the trade receivables which have been restated to reflect the correct position.
5.7 Other benefits
During the current and prior year, there were no non-cash bonuses or benefits paid to key management personnel.
6. Executive contractual arrangements
It is the consolidated entity’s policy that service contracts for key management personnel are unlimited in term but capable of
termination as per the relevant period of notice and that the consolidated entity retains the right to terminate the contract
immediately, by making payment that is commensurate with pay in lieu of notice.
The service contract outlines the components of remuneration paid to the key management person but does not prescribe
how remuneration levels are modified year to year. Remuneration levels are reviewed each year to take into account cost-of-
living changes, any change in the scope of the role performed by the senior executive and any changes required to meet the
principles of the remuneration policy.
At 30 June 2012, Stuart Smith, the Managing Director, has a contract of employment dated 19 December 2007, which was
subsequently amended with the change in positions. The Managing Directors’ termination provisions are as follows:
Details
Employer initiated
termination
Termination for
serious misconduct
Employee initiated
termination
Notice Period
12 months
Payment in lieu of
notice
12 months
None
None
12 months
12 months
Treatment of STI on
termination
Pro-rated for time and
performance
Unvested awards
forfeited
Pro-rated for time and
performance
Treatment of LTI on
termination
Board discretion (i)
Unvested awards
forfeited
Unvested awards
forfeited subject to
Board discretion.
On the 25 July 2012 Stuart Smith, Managing Director submitted his resignation to the Board. His termination benefits were
paid on that date and were as per the terms and conditions detailed above. The final payment to Mr smith totalled $275,000
which equated to 12 months of his normal salary at the date of his resignation.
(i) On the date of his resignation Mr Smith held 2,000,000 shares and 900,000 options for which both were awarded under
the employee long term incentive plan. As per the conditions of the long term incentive plan, since Mr Smith is no longer
an employee of the consolidated entity the entitlement to both his shares and share options are currently at the discretion
of the Board.
14
Cellnet Group Limited and its consolidated entities
Financial Report
Directors Report (continued)
Remuneration Report (audited)
6. Executive contractual arrangements (continued)
Standard KMP termination provisions apply to all members of the KMP. The standard KMP provisions are as follows:
Details
Employer initiated
termination
Termination for
serious misconduct
Employee initiated
termination
Notice Period
3 months
Payment in lieu of
notice
12 months
None
None
3 months
3 months
Treatment of STI on
termination
Pro-rated for time and
performance
Unvested awards
forfeited
Pro-rated for time and
performance
15
Cellnet Group Limited and its consolidated entities
Financial Report
Director’s Report (continued)
Remuneration Report (Audited) (continued)
6.1 Directors’ and executive officers’ remuneration
The remuneration report details the remuneration arrangements for key management personnel (KMP) who are defined as those persons having authority and responsibility for planning, directing
and controlling the major activities of the consolidated entity, directly or indirectly, including any director (whether executive or otherwise). Remuneration of Directors and KMP are as follows:
Short-term
Salary &
fees
$
STI cash
bonus
$
Motor Vehicle
allowances
$
Non
monetary
benefits
$
Year
Non-executive Directors
A. Beard
S. Harrison
(Resigned 31.07.10)
M Brookman
Total non-executive directors
Executive Director
S. Smith
(Resigned 25.07.12)
2012
54,500
2011
54,500
2012
-
2011
4,167
2012
50,000
2011
50,000
2012
104,500
2011
108,667
-
-
-
-
-
-
-
-
2012
285,046
27,500
2011
268,752
20,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Post
Employment
Superannuation
benefits
$
-
-
-
-
-
-
-
-
22,375
15,199
Long-term benefits
Share –based
payment
% performance
related
Cash
Incentives
$
Long Service
Leave
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
54,500
54,500
-
4,167
51,354
50,000
105,854
108,667
$
-
-
-
-
1,354
-
-
-
-
-
-
-
-
-
-
-
82,703
79,661
417,624
383,612
6.63
5.21
16
Cellnet Group Limited and its consolidated entities
Financial Report
Director’s Report (continued)
Remuneration Report (Audited) (continued)
6.1 Directors’ and five highest paid Executives officers, remuneration (continued)
Other key management
personnel
D.Clark
J. Laun
J. Phua
B. Watts
M. Wallace
E. Schillinger
(Resigned on 31.10.11 )
C. Barnes
Total executive and KMP
Totals
Year
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
Short-term
Post
Long-term benefits
Share –based
Salary &
fees
$
STI cash
bonus
$
Motor
Vehicle
allowances
$
Non
monetary
benefits
$
Employment
Superannuation
benefits
$
Cash
Incentives
$
Long Service
Leave
$
payment
$
Total
$
% performance
related
105,074
34,988
10,406
95,079
11,343
8,387
122,944
25,000
118,496
19,000
164,065
60,000
155,939
45,000
132,000
33,850
132,000
7,000
153,333
62,909
140,000
63,525
-
-
-
-
-
-
-
-
35,000
9,738
5,000
105,000
21,409
15,000
124,624
25,000
112,916
23,750
-
-
1,122,086
278,985
15,406
1,128,182
211,027
23,387
1,226,586
278,985
15,406
1,236,849
211,027
23,387
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,579
13,864
20,188
16,182
14,926
12,915
16,953
15,752
4,476
11,826
13,916
11,681
106,413
97,419
106,413
97,419
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,931
462
-
-
-
-
-
-
12,187
-
-
-
15,118
462
15,118
462
1,354
-
1,354
-
1,354
-
-
-
1,354
-
-
-
1,354
-
89,473
79,661
90.827
79,661
151,822
114,809
165,808
151,821
245,607
217,121
180,776
151,915
234,549
219,277
66,401
153,235
164,894
148,347
1,627,481
1,540,137
1,733,335
1,648,804
23.25
9.88
15.20
12.51
24.56
20.73
18.72
4.61
26.98
28.97
14.67
13.97
15.29
16.01
17.25
13.70
16.20
12.80
17
Cellnet Group Limited and its consolidated entities
Cellnet Group Limited and its consolidated entities
Financial Report
Director’s Report (continued)
Director’s Report (continued)
Remuneration report (Audited) (continued)
Remuneration report (Audited) (continued)
Additional statutory disclosures
7. Additional statutory disclosures
This section sets out the additional disclosures required under the Corporations Act 2001. The table below
This section sets out the additional disclosures required under the Corporations Act 2001
the share options granted to executives as remuneration during the current financial year.
the share options granted to executives as remuneration during the current financial year.
The table below discloses
Options awarded and vested during the year
Options awarded and vested during the year
Options
Options
awarded
awarded
during the
during the
year
year
.
No.
Award date
Fair
value of
option at
award
date ($)
Vesting date
No. v
No. vested
during year
during year
No. lapsed
during
year
Executive Directors
M Brookman
S Smith
Other key
management
personnel
D Clark
J Laun
J Phua
M Wallace
C Barnes
Year
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
400,000
400,000
-
900,000
900,000
-
21 Oct 2011
-
21 Oct 2011
-
$0.02
-
$0.02
-
21 Oct 2013
-
21 Oct 2013
-
400,000
400,000
-
400,000
400,000
-
400,000
400,000
-
400,000
400,000
-
400,000
400,000
-
21 Oct 2011
-
21 Oct 2011
-
21 Oct 2011
-
21 Oct 2011
-
21 Oct 2011
-
$0.02
-
$0.02
-
$0.02
-
$0.02
-
$0.02
-
21 Oct 2013
-
21 Oct 2013
-
21 Oct 2013
-
21 Oct 2013
-
21 Oct 2013
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Value of options awarded, exercised and lapsed during the year
Value of options awarded, exercised and lapsed during the year
Value of
Value of
options
options
granted
granted
during the
during the
year
year
$
$8,000
$8,000
$18,000
$18,000
$8,000
$8,000
$8,000
$8,000
$8,000
$8,000
$8,000
$8,000
$8,000
$8,000
Value of
options
exercised
during the
year
$
Value of
options
lapsed
during
the year
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Remuneration
consisting of
share options
for the year
%
2.6%
0.7%
0.9%
0.8%
0.6%
0.6%
0.8%
M Brookman
S Smith
D Clark
J Laun
J Phua
M Wallace
C Barnes
This report is made with a resolution of the Directors:
This report is made with a resolution of the Directors:
_____________________
Alexander Beard
Chairman
Signed at Brisbane on 17 August 2012
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18
Cellnet Group Limited and its consolidated entities
Financial Report
Statement of financial position
As at 30 June 2012
Consolidated
Note
2012
$000
2011
$000
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax receivable
Assets classified as held for sale
Total current assets
Non-current assets
Property, plant and equipment
Deferred tax assets (net)
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Liabilities directly associated with the assets classified as
held for sale
Total current liabilities
Non-current liabilities
Provisions
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
9
10
11
12
21
13
7
14
15
21
15
26(a)
4,623
10,951
5,194
17
20,785
20,044
9,260
5,259
94
34,657
532
4
21,317
34,661
1,213
2,661
3,874
1,517
2,754
4,271
25,191
38,932
9,821
543
10,364
9,316
491
9,807
127
-
10,491
9,807
412
412
10,903
14,288
31,699
752
(18,163)
14,288
327
327
10,134
28,798
37,861
700
(9,763)
28,798
The above statement of financial position should be read in conjunction with the accompanying notes.
19
Cellnet Group Limited and its consolidated entities
Financial Report
Statement of comprehensive income
For the year ended 30 June 2012
Continuing operations
Sales of goods
Rendering of services
Other revenue
Revenue
Cost of sales
Gross Profit
Other income
Distribution expenses
Sales and marketing expenses
Administrative expenses
Bad debts (expenses)/recoveries
Other expenses
Profit from continuing operations before income tax
Income tax expense
Profit from continuing operations after income tax
Discontinued operations
Loss from discontinued operations after income tax
Net profit / (loss) for the period
Other comprehensive income
Foreign currency translation
Total comprehensive income for the period
Earnings per share for profit from continuing operations
attributable to the ordinary equity holders of the
Company
Basic earnings per share
Diluted earnings per share
Earnings per share for profit attributable to the ordinary
equity holders of the Company
Basic earnings per share
Diluted earnings per share
Consolidated
Note
2012
$000
2011
$000
5
6(d)
61,633
1,662
847
64,142
(47,610)
16,532
72,534
1,116
1,019
74,669
(58,273)
16,396
5
943
-
(2,609)
(5,224)
(7,739)
(63)
(506)
1,334
(93)
1,241
(2,551)
(5,152)
(7,069)
69
(576)
1,117
87
1,204
(1,729)
(488)
(163)
1,041
(39)
(527)
(149)
892
$0.02
$0.02
$0.02
$0.02
($0.01)
($0.01)
$0.02
$0.02
6(a)
7
21
8
8
8
8
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
20
Cellnet Group Limited and its consolidated entities
Financial Report
Statement of changes in equity
For the year ended 30 June 2012
Consolidated
Share
capital
$000
Reserve
for
own
shares
$000
Foreign
currency
translation
reserve
$000
At 1 July 2011
37,861
(25)
Loss for the period
Foreign currency translation
Total comprehensive income for
the period
Transactions with owners in their
capacity as owners:
Dividends paid
Share buy-back
Share based payments
Share capital reduction
Balance as at 30 June 2012
At 1 July 2010
Profit for the period
Foreign currency translation
Total comprehensive income for
the period
Transactions with owners in their
capacity as owners:
Dividends paid
Share buy-back
Share based payments
Balance as at 30 June 2011
-
-
-
-
-
(854)
-
(5,308)
31,699
41,993
-
-
-
(4,132)
-
37,861
-
-
-
-
-
-
-
-
(25)
(25)
-
-
-
-
-
(25)
36
-
(39)
(39)
-
-
-
-
-
(3)
185
-
(149)
(149)
-
-
-
36
The above statement of changes in equity should be read in conjunction with the accompanying notes.
Share based
payment
reserve
Accumulated
losses
Total
equity
$000
$000
$000
689
(9,763)
28,798
-
-
-
-
-
-
91
-
(488)
-
(488)
(488)
(39)
(527)
-
(7,912)
-
-
-
-
(7,912)
(854)
91
(5,308)
780
(18,163)
14,288
609
(10,105)
32,657
-
-
-
-
80
689
1,041
-
1,041
1,041
(149)
892
(699)
-
-
(699)
(4,132)
80
(9,763)
28,798
21
Cellnet Group Limited and its consolidated entities
Financial Report
Statement of cash flows
For the year ended 30 June 2012
Consolidated
Note
2012
$000
2011
$000
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Net income taxes received
Net cash flows from operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Interest received
Acquisition of property, plant and equipment
Acquisition of subsidiary
Net cash flows from/(used in) investing activities
Cash flows from financing activities
Share buy back
Return of capital
Dividend
Net cash flows from/(used in) financing activities
5
13
20
26(a)
27(a)
Net increase/(decrease) in cash and cash equivalents
Net foreign exchange differences
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
9
The above statement of cash flows should be read in conjunction with the accompanying notes.
67,921
(69,234)
80
(1,233)
22
847
(223)
(550)
96
(854)
(5,308)
(7,912)
(14,074)
(15,211)
(25)
20,044
4,808
82,821
(79,498)
-
3,323
-
1,019
(219)
-
800
(4,132)
-
(699)
(4,831)
(708)
(78)
20,830
20,044
22
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
1. Corporate Information
Cellnet Group Limited (the ‘Company’) is a company limited by shares and incorporated in Australia. The consolidated
financial report of the Company for the financial year ended 30 June 2012 comprises the Company and its subsidiaries
(together referred to as the ‘consolidated entity’). The financial statements of the subsidiaries are prepared for the same
reporting period as the parent company.
The financial report was authorised for issue by the Directors on 17 August 2012.
The nature of the operations and principal activities of the consolidated entity are described in the director’s report.
2. Significant accounting policies
(a) Basis of preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of
the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian
Accounting Standards Board.
The financial report is prepared on the historical cost basis and is presented in Australian dollars.
The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 (updated by CO 05/641 effective 28
July 2005 and CO 06/51 effective 31 January 2006) and in accordance with that Class Order, amounts in the financial
report and directors’ report have been rounded off to the nearest thousand dollars, unless otherwise stated.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision
and future periods if the revision affects both current and future periods.
Compliance with IFRS
The financial report complies with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board.
(b) New Accounting Standards and Interpretations
(i) Changes in accounting policy and disclosures
The accounting policies adopted are consistent with those of the previous financial year except as follows:
The Group has adopted the following new and amended Australian Accounting Standards and AASB interpretations as of 1
July 2011.
►AASB 124 Related Party Disclosures (amendment) effective 1 July 2011
►AASB 1054 Australian Additional Disclosures effective 1 July 2011
►Improvements to AASBs
The adoption of the standards or interpretations is described below:
AASB 124 Related Party Disclosures (amendment)
The revised AASB 124 Related Party Disclosures (December 2009) simplifies the definition of a related party, clarifying its
intended meaning and eliminating inconsistencies from the definition, including:
(a) The definition now identifies a subsidiary and an associate with the same investor as related parties of each other.
(b) Entities significantly influenced by one person and entities significantly influenced by a close member of the family of
that person are no longer related parties of each other.
(c) The definition now identifies that, whenever a person or entity has both joint control over a second entity and joint
control or significant influence over a third party, the second and third entities are related to each other.
A partial exemption is also provided from the disclosure requirements for government-related entities. Entities that are
related by virtue of being controlled by the same government can provide reduced related party disclosures.
23
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(b) New Accounting Standards and Interpretations (continued)
AASB 1054 Australian Additional Disclosures
Australian Additional Disclosures
This standard is a consequence of phase 1 of the joint Trans-Tasman Convergence project of the AASB and FRSB.
This standard, with AASB 2011-1 relocates all Australian specific disclosures from other standards to one place and revises
disclosures in the following areas;
(a) Compliance with Australian Accounting Standards;
(b) The statutory basis or reporting framework for financial statements;
(c) Whether the entity is a for-profit or not-for-profit entity;
(d) Whether the financial statements are general purpose or special purpose;
(e) Audit fees;
(f)
Imputation credits.
The adoption of this amendment has had minimal impact on the consolidated entity.
Improvements to AASBs
In May 2010, the AASB issued its third omnibus of amendments to its standards, primarily with a view to removing
inconsistencies and clarifying wording. There are separate transitional provisions for each standard. The adoption of the
following amendments resulted in changes to accounting policies, but no impact on the financial position or performance of
the group.
►AASB 3 Business combinations – the measurement options available for non-controlling interest (NCI) were amended.
Only components of NCI that constitute a present ownership interest that entitles their holder to a proportionate share of
the entity’s net assets in the event of liquidation should be measured at either fair value or at the present ownership
instruments’ proportionate share of the acquiree’s identifiable net assets. All other components are to be measured at their
acquisition date fair values.
►The amendments to AASB 3 are effective for annual periods beginning on or after 1 July 2011. The consolidated entity
adopted these as of 1 July 2011 and has changed its accounting policy accordingly as the amendment was issued to
eliminate unintended consequences that may arise from the adoption of AASB 3.
(ii) Accounting Standards and Interpretations issued but not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective
and have not been adopted by the consolidated entity for the annual reporting period ending 30 June 2012, are outlined
below:
AASB 9 Financial Instruments
AASB 9 includes requirements for the classification and measurement of financial assets. It was further
amended by AASB 2010-7 to reflect amendments to the accounting for financial liabilities.
These requirements improve and simplify the approach for classification and measurement of financial assets compared
with the requirements of AASB 139. The main changes are described below.
(a) Financial assets that are debt instruments will be classified based on (1) the objective of the entity’s business model for
managing the financial assets; and (2) the characteristics of the contractual cash flows.
(b) Allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments
that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return
on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument.
24
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(b) New Accounting Standards and Interpretations (continued)
AASB 9 Financial Instruments (continued)
(c) Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so
eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets
or liabilities, or recognising the gains and losses on them, on different bases.
(d) Where the fair value option is used for financial liabilities the change in fair value is to be accounted for as follows:
►
The change attributable to changes in credit risk are presented in other comprehensive income (OCI)
The remaining change is presented in profit or loss
►
If this approach creates or enlarges an accounting mismatch in the profit or loss, the effect of the changes in credit
risk are also presented in profit or loss.
Consequential amendments were also made to other standards as a result of AASB 9, introduced by AASB 2009-11 and
superseded by AASB 2010-7 and 2010-10.
Impact on the consolidated financial report – minimal. Application date of standard 1 January 2013. Application date for
the consolidated entity 1 July 2013.
AASB 10 Consolidated Financial Statements
AASB 10 establishes a new control model that applies to all entities. It replaces parts of AASB 127 Consolidated and
Separate Financial Statements dealing with the accounting for consolidated financial statements and UIG-112
Consolidation – Special Purpose Entities.
The new control model broadens the situations when an entity is considered to be controlled by another entity and includes
new guidance for applying the model to specific situations, including when acting as a manager may give control, the impact
of potential voting rights and when holding less than a majority of voting rights may give control. Consequential
amendments were also made to other standards via AASB 2011-7.
Impact on the consolidated financial report – minimal. Application date of standard 1 January 2013. Application date for the
consolidated entity 1 July 2013.
AASB 11 Joint Arrangements
AASB 11 replaces AASB 131 Interests in Joint Ventures and UIG-113 Jointly- controlled Entities – Non-monetary
Contributions by Ventures. AASB 11 uses the principle of control in AASB 10 to define joint control, and therefore the
determination of whether joint control exists may change. In addition it removes the option to account for jointly controlled
entities (JCEs) using proportionate consolidation. Instead, accounting for a joint arrangement is dependent on the nature of
the rights and obligations arising from the arrangement. Joint operations that give the venturers a right to the underlying
assets and obligations themselves is accounted for by recognising the share of those assets and obligations. Joint
ventures that give the venturers a right to the net assets is accounted for using the equity method.
Consequential amendments were also made to other standards via AASB 2011-7 and amendments to AASB 128.
Impact on the consolidated financial report – minimal. Application date of standard 1 January 2013. Application date for the
consolidated entity 1 July 2013.
AASB 12 Disclosure of Interests in Other Entities
AASB 12 includes all disclosures relating to an entity’s interests in subsidiaries, joint arrangements, associates and
structures entities. New disclosures have been introduced about the judgments made by management to determine
whether control exists, and to require summarised information about joint arrangements, associates and structured entities
and subsidiaries with non-controlling interests.
Impact on the consolidated financial report – minimal. Application date of standard 1 January 2013. Application date for the
consolidated entity 1 July 2013.
25
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(b) New Accounting Standards and Interpretations (continued)
AASB 13 Fair Value Measurement
AASB 13 establishes a single source of guidance for determining the fair value of assets and liabilities. AASB 13 does not
change when an entity is required to use fair value, but rather, provides guidance on how to determine fair value when fair
value is required or permitted. Application of this definition may result in different fair values being determined for the
relevant assets.
AASB 13 also expands the disclosure requirements for all assets or liabilities carried at fair value. This includes information
about the assumptions made and the qualitative impact of those assumptions on the fair value determined. Consequential
amendments were also made to other standards via AASB 2011-8.
Impact on the consolidated financial report – minimal. Application date of standard 1 January 2013. Application date for the
consolidated entity 1 July 2013.
Annual Improvements 2009–2011 Cycle Annual Improvements to IFRSs 2009–2011 Cycle
This standard sets out amendments to International Financial Reporting Standards (IFRSs) and the related bases for
conclusions and guidance made during the International Accounting Standards Board’s Annual Improvements process.
These amendments have not yet been adopted by the AASB.
The following items are addressed by this standard:
IFRS 1 First-time Adoption of International Financial Reporting Standards
Repeated application of IFRS 1
Borrowing costs
IAS 1 Presentation of Financial Statements
Clarification of the requirements for comparative information
IAS 16 Property, Plant and Equipment
Classification of servicing equipment
IAS 32 Financial Instruments: Presentation
Tax effect of distribution to holders of equity instruments
IAS 34 Interim Financial Reporting
Interim financial reporting and segment information for total assets and liabilities
Impact on the consolidated financial report – minimal. Application date of standard 1 January 2013. Application date for the
consolidated entity 1 July 2013.
AASB 1053 Application of Tiers of Australian Accounting Standards
This Standard establishes a differential financial reporting framework consisting of two Tiers of reporting requirements for
preparing general purpose financial statements:
(a) Tier 1: Australian Accounting Standards
(b) Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements
Tier 2 comprises the recognition, measurement and presentation requirements of Tier 1 and substantially reduced
disclosures corresponding to those requirements.
The following entities apply Tier 1 requirements in preparing general purpose financial statements:
(a) For-profit entities in the private sector that have public accountability (as defined in this Standard)
(b) The Australian Government and State, Territory and Local Governments
26
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(b) New Accounting Standards and Interpretations (continued)
AASB 1053 Application of Tiers of Australian Accounting Standards (continued)
The following entities apply either Tier 2 or Tier 1 requirements in preparing general purpose financial statements:
(a) For-profit private sector entities that do not have public accountability
(b) All not-for-profit private sector entities
(c) Public sector entities other than the Australian Government and State, Territory and Local Governments.
Consequential amendments to other standards to implement the regime were introduced by AASB 2010-2, 2011-2, 2011-6,
2011-11 and 2012-1.
Impact on the consolidated financial report – minimal. Application date of standard 1 July 2013. Application date for the
consolidated entity 1 July 2013.
AASB 2010-7 Amendments to Australian Accounting Standards [AASB 1, 3, 4, 5, 101, 107, 112, 118, 119, 121, 132,
133, 134, 137, 139, 140, 1023 & 1038 and Interpretations 112, 115, 127, 132 & 1042] The requirements for classifying
and measuring financial liabilities were added to AASB 9.
The existing requirements for the classification of financial liabilities and the ability to use the fair value option have been
retained. However, where the fair value option is used for financial liabilities the change in fair value is accounted for as
follows:
► The change attributable to changes in credit risk are presented in other comprehensive income (OCI)
► The remaining change is presented in profit or loss.
Application date of standard 1 January 2013. Impact on the consolidated financial report – minimal. Application date for
the consolidated entity 1 July 2013.
AASB 2010-8 Amendments to Australian Accounting Standards – Deferred Tax: Recovery of Underlying Assets
[AASB 112]
These amendments address the determination of deferred tax on investment property measured at fair value and introduce
a rebuttable presumption that deferred tax on investment property measured at fair value should be determined on the
basis that the carrying amount will be recoverable through sale. The amendments also incorporate SIC-21 Income Taxes –
Recovery of Revalued Non-Depreciable Assets into AASB 112. Impact on the consolidated financial report – minimal.
Application date of standard 1 January 2012. Application date for the consolidated entity 1 July 2013.
AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Other Comprehensive Income
[AASB 1, 5, 7, 101, 112, 120, 121, 132, 133, 134, 1039 & 1049]
This Standard requires entities to group items presented in other comprehensive income on the basis of whether they might
be reclassified subsequently to profit or loss and those that will not.
Impact on the consolidated financial report – minimal. Application date of standard 1 July 2012. Application date for the
consolidated entity 1 July 2012.
(c) Basis of consolidation
The consolidated financial statements comprise the financial statements of Cellnet Group Ltd and its subsidiaries (as
outlined in note 22 as at and for the period ended 30 June each year (the consolidated entity). Interests in associates are
equity accounted and are not part of the consolidated entity.
Subsidiaries are all those entities over which the consolidated entity has the power to govern the financial operating policies
so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable
or convertible are considered when assessing whether a Group controls another entity.
27
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(c) Basis of consolidation (continued)
The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using
consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and
transactions, income and expenses and profit and losses resulting from intra group transactions have been eliminated in
full.
Intra-group balances and any unrealised gains and losses or income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements.
(d) Foreign currency
(i) Functional and presentation currency
Both the functional and presentation currency of Cellnet Group Limited and its Australian subsidiaries are Australian dollars
($). The New Zealand subsidiary’s functional currency is New Zealand dollars which is translated to presentation currency.
(ii) Transactions and balances
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the balance date are translated to Australian dollars at
the foreign exchange rate ruling at reporting date. Foreign exchange differences arising on translation are recognised in net
income.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using
the exchange rate at the date of the transaction.
(iii) Financial statements of foreign operations
The assets and liabilities of foreign operations are translated to Australian dollars at foreign exchange rates ruling at the
balance date. The revenues and expenses of foreign operations are translated to Australian dollars at rates approximating
the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on retranslation are
recognised directly in a separate component of equity.
(e) Property, plant and equipment
(i) Owned assets
Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation (see below) and
impairment losses (see accounting policy (j)).
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate
items of property, plant and equipment.
(ii) Leased assets
Leases in terms of which the consolidated entity assumes substantially all the risks and rewards of ownership are classified
as finance leases.
(iii) Depreciation
With the exception of freehold land depreciation is charged to net income on a straight-line basis over the estimated useful
lives of each part of an item of property, plant and equipment. Land is not depreciated. The estimated useful lives in the
current and comparative periods are as follows:
Leasehold improvements
Plant and equipment
Leased plant and equipment
3⅓ - 40 years
2½ - 10 years
4- 5 years
The residual value, the useful life and the depreciation method applied to an asset are reassessed at least annually.
28
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(e) Property, plant and equipment (continued)
(iv) Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are
expected from its use or disposal.
Intangible assets
(f)
(i) Goodwill
Business combinations
Subsequent to 1 July 2009
Goodwill acquired in a business combination being the excess of the consideration transferred over the fair value of the
group’s net identifiable net assets after measure at cost acquired and liabilities assumed. If this consideration transferred is
lower than the fair value of the net identifiable assets of the subsidiary acquired, the difference is recognised in net income.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses.
(ii) Other intangible assets
Other intangible assets that are acquired by the consolidated entity are stated at cost less accumulated amortisation (see
below) and impairment losses (see accounting policy (j)).
(iii) Subsequent expenditure
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits
embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.
(iv) Amortisation
Amortisation is charged to net income on a straight-line basis over the estimated useful lives of intangible assets unless
such lives are indefinite. Goodwill and intangible assets with an indefinite useful life are systematically tested for
impairment at each balance date. Other intangible assets are amortised from the date they are available for use over their
estimated useful lives.
(g) Trade and other receivables
Trade, loans and other receivables are stated at their amortised cost less impairment losses. Collectability of trade
receivables is reviewed on an ongoing basis at a customer level. Individual debts that are known to be uncollectable are
written off when identified. An impairment provision is recognised when there is objective evidence that the consolidated
entity will not be able to collect the receivable. Debts which are aged greater than 120 days or more are considered as
objective evidence of impairment and a provision of 80% is recognised. For any debts that are passed onto the
consolidated entities solicitors for collection a provision of 100% is recognised.
(h)
Inventories
Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated costs of completion and selling expenses. Cost is calculated using the
average cost method and includes direct and allocated costs incurred in acquiring the inventories and bringing them to their
present location and condition. Provision is recognised when there is objective evidence that the consolidated entity will not
be able to sell the inventory at normal reseller pricing. Amounts are provisioned as per below:
Stock < 120 days
Stock > 120 days
Stock > 180 days
Stock > 360 days
Nil
50%
Genuine product 50%, Non genuine product 75%
100%
29
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(i) Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise of cash at bank and in hand and short term
deposits with a maturity of 60 days or less that are readily convertible to known amounts of cash and which are subject to
insignificant risks of change in values.
(j)
Impairment
The carrying amounts of the consolidated entity’s assets, other than inventories (see accounting policy (h)), trade and other
receivables (see accounting policy (g)) and deferred tax assets (see accounting policy (r)), are reviewed at each balance
date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable
amount is estimated (see accounting policy (j) (i)).
For goodwill, intangible assets that have an indefinite useful life and intangible assets that are not yet available for use, the
recoverable amount is estimated at each balance date.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount. Impairment losses are recognised in net income, unless an asset has previously been re-valued, in
which case the impairment loss is recognised as a reversal to the extent of that previous revaluation with any excess
recognised through net income.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any
goodwill allocated to cash-generating units (group of units) and then, to reduce the carrying amount of the other assets in
the unit (group of units) on a pro-rata basis.
(i) Calculation of recoverable amount
The recoverable amount of assets (apart from receivables, inventory, and deferred tax) is the greater of their fair value less
costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the asset relates.
Impairment losses, other than in respect of goodwill, are reversed when there is an indication that the impairment loss may
no longer exist and there has been a change in the estimate used to determine the recoverable amount. An impairment
loss in respect of goodwill is not reversed.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
(iii) Derecognition of financial assets and liabilities
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
derecognised when:
•
•
the rights to receive cash flows from the asset have expired; or
the consolidated entity retains the right to receive cash flows from the asset, but has assumed an obligation to pay them
in full without material delay to a third party; or
the consolidated entity has transferred its rights to receive cash flows from the asset and has either (a) transferred
substantially all the risks and rewards of the asset, or (b) neither transferred nor retained substantially all the risks and
rewards of the asset, but has transferred control of the asset.
•
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expired. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original
liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in net income.
30
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(k) Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
(l)
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value of the consideration received less related transaction costs.
Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost
and redemption value being recognised in net income over the period of the borrowings on an effective interest basis.
(m) Provisions and employee leave benefits
(i)
Provisions
Provisions are recognised when the consolidated entity has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
When the consolidated entity expects some or all of a provision to be reimbursed, for example under an insurance contract,
the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in net income net of any reimbursement.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the
present obligation at the balance date using a discounted cash flow methodology. The risks specific to the provision are
factored into the cash flows and as such a risk-free government bond rate relative to the expected life of the provision is
used as a discount rate. If the effect of the time value of money is material, provisions are discounted using a current pre-
tax rate that reflects the time value of money and the risks specific to the liability.
(ii) Long-term service benefits
The consolidated entity’s net obligation in respect of long-term service benefits is the amount of future benefit that
employees have earned in return for their service in the current and prior periods. The obligation is calculated using
expected future increases in wage and salary rates including related on-costs and expected settlement dates, and is
discounted using the rates attached to the Commonwealth Government bonds at the balance date which have maturity
dates approximating the terms of the consolidated entity’s obligations.
(iii) Wages, salaries, annual leave and sick leave
Liabilities for employee benefits for wages, salaries and annual leave that are expected to be settled within 12 months of the
reporting date represent present obligations resulting from employees’ services provided to reporting date, and are
calculated using undiscounted amounts based on remuneration wage and salary rates that the consolidated entity expects
to pay as at reporting date including related on-costs, such as workers remuneration insurance and payroll tax. Expenses
for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.
(n) Share based payment transactions
The consolidated entity provides benefits to KMP in the form of share based payments, whereby the KMP renders services
in exchange for shares. There is currently share based payment plans in place for the Managing Director and KMP. The
cost of share based payments with KMP is measured by reference to the fair value of the equity instrument at the date at
which they are granted (refer note 16 (b) and (c) for further details).
31
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(o) Trade and other payables
Trade and other payables are stated at their amortised cost. Trade payables are non-interest bearing and are normally
settled on average between 30 day and 45-day terms. They represent liabilities for goods and services provided to the
consolidated entity prior to the end of the financial year that are unpaid and arise when the consolidated entity becomes
obliged to make future payments in respect of the purchase of these goods and services.
(p) Revenue
Goods sold and services rendered
Revenue from the sale of goods is recognised in net income when the significant risks and rewards of ownership have been
transferred to the customer. This transfer generally occurs when the goods are delivered to the customer. Revenue from
the provision of warehousing services to external parties is recognised as the service is provided. No revenue is
recognised if there are significant uncertainties regarding recovery of the consideration due, the costs incurred or to be
incurred cannot be measured reliably, there is a risk of return of goods or there is continuing management involvement with
the goods.
Interest income is recognised in net income as it accrues, using the effective interest method. Dividend income is
recognised in net income on the date the entity’s right to receive payments is established. The interest expense component
of finance lease payments is recognised in net income using the effective interest method.
(q) Expenses
(i) Operating lease payments
Payments made under operating leases are recognised in net income on a straight-line basis over the term of the lease.
Lease incentives received are recognised in net income as an integral part of the total lease expense and spread over the
lease term.
(ii) Finance lease payments
Finance leases, which transfer to the consolidated entity substantially all the risks and benefits incidental to ownership of
the leased item are capitalised at the inception of the lease at fair value of the leased asset or, if lower, at the present value
of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction
of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of the liability. Finance charges are recognised as an expense in net
income.
(r)
Income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities based on the current period’s taxable income. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted by the reporting date.
Deferred tax is provided using the statement of financial position method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The
following temporary differences are not provided for - initial recognition of goodwill, the initial recognition of assets or
liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent
that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected
manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively
enacted at the balance date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against
which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related
tax benefit will be realised.
32
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(r)
Income tax (continued)
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same
taxation authority.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay
the related dividend. Capital gains tax, if applicable, is provided for in establishing period income tax expense when an
asset is sold.
Tax consolidation
The Company and its wholly-owned Australian resident entities have formed a tax-consolidated entity with effect from 1 July
2003 and are therefore taxed as a single entity from that date. The head entity within the tax-consolidated entity is Cellnet
Group Limited.
Current tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences of the
members of the tax-consolidated entity are recognised in the separate financial statements of the members of the tax-
consolidated entity using the ‘separate taxpayer’ within the consolidated entity’s approach. Deferred tax assets and deferred
tax liabilities are measured by reference to the carrying amounts in the separate financial statements of each entity and the
tax values applied under tax consolidation.
Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses or unused tax credits of the
subsidiaries are assumed by the head entity in the tax consolidated entity and are recognised as amounts payable /
(receivable) to / (from) other entities in the tax-consolidated entity in conjunction with any tax funding arrangement amounts
(refer below). Any difference between these amounts is recognised by the Company as an equity contribution or
distribution.
The Company recognises deferred tax assets arising from unused tax losses and unused tax credits of the tax-consolidated
entity to the extent that it is probable that future taxable profits of the tax-consolidated entity will be available against which
the asset can be utilised. Any subsequent period adjustments to deferred tax assets arising from unused tax losses and
unused tax credits as a result of revised assessments of the probability of recoverability are recognised by the head entity
only.
Nature of tax funding arrangements
The head entity, in conjunction with other members of the tax-consolidated entity, has entered into a tax funding
arrangement which sets out the funding obligations of members of the tax-consolidated entity in respect of tax amounts.
The tax funding arrangements require payments to / (from) the head entity equal to the current tax liability / (asset)
assumed by the head entity and any tax-loss or tax credit related deferred tax asset assumed by the head entity, resulting
in the head entity recognising an inter-entity payable / (receivable) equal in amount to the tax liability / (asset) assumed. The
inter-entity payable / (receivable) is at call.
Contributions to fund the current tax liabilities are payable as per the tax funding arrangement and reflect the timing of the
head entity’s obligation to make payments for tax liabilities to the relevant tax authorities.
(s) Goods and services tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the
amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as
part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or
payable to, the ATO is included as a current asset or liability in the statement of financial position.
33
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(s) Goods and services tax (continued)
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from
investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.
(t) Accounting estimates and judgements
Management discussed with the Audit and Risk Management Committee the development, selection and disclosure of the
consolidated entity’s critical accounting policies and estimates and the application of these policies and estimates. The
estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are discussed below.
Impairment losses for trade receivables and stock on hand
Note 10 contains information about the assumptions and their risk factors relating to trade receivable impairment losses and
Note 6(d) contains information about the stock on hand impairments losses and changes in the way the estimate was
calculated.
Share based payments
The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined with the assistance of an external
valuer using a binomial model. The related assumptions are detailed in note 16. The accounting estimates and
assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and
liabilities within the next annual reporting period but may impact expenses and equity.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences as management considers that it is probable that
future taxable profits will be available to utilise temporary differences and recognised tax losses. Significant judgement is
required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level
of future taxable profits over the next three years together with future tax planning strategies. Where the consolidated entity
has made a taxable loss in the current or preceding year, a tax asset is only recognised to the extent that there is
convincing other evidence that sufficient taxable profit will be available against which the recognised unused tax losses can
be utilised.
(u) Non-current assets held for sale and discontinuing operations
Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and
fair value less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amounts
will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only
when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition.
Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within
one year from the date of classification.
In the statement of comprehensive income, income and expenses from discontinued operations are reported separately
from income and expenses from continuing operations, down to the level of profit after taxes.
(v) Earnings per share
The consolidated entity presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss
attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all
dilutive potential ordinary shares. Potential ordinary shares shall be treated as dilutive when their conversion to ordinary
shares would decrease earnings per share or increase loss per share from continuing operations.
34
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(w) Operating segments
An operating segment is a component of an entity that engages in business activities from which it may earn revenues and
incur expenses (including revenues and expenses relating to transactions with other components of the same entity),
whose operating results are regularly reviewed by the entities chief operating decision maker to make decisions about
resources to be allocated to the segment and assess its performance and for which discrete financial information is
available.
Operating segments have been identified based on the information provided to the chief operating decision maker – being
the Managing Director. Note 4 contains information on reportable segments.
(x)
Investment in an associate
The consolidated entity’s investment in its associate is accounted for using the equity method. An associate is an entity in
which the consolidated entity has significant influence.
Under the equity method, the investment in the associate is carried on the statement of financial position at cost plus post
acquisition changes in the consolidated entity’s share of net assets of the associate. Goodwill relating to the associate is
included in the carrying amount of the investment and is neither amortised nor individually tested for impairment.
The income statement reflects the consolidated entity’s share of the results of operations of the associate. When there has
been a change recognised directly in the equity of the associate, the consolidated entity recognises its share of any
changes and discloses this, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting
from transactions between the consolidated entity and the associate are eliminated to the extent of the interest in the
associate.
The consolidated entity’s share of profit of an associate is shown on the face of the income statement. This is the profit
attributable to equity holders of the associate and, therefore, is profit after tax and non-controlling interests in the
subsidiaries of the associate.
The financial statements of the associate are prepared for the same reporting period as the consolidated entity. When
necessary, adjustments are made to bring the accounting policies in line with those of the consolidated entity.
(y) Business combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the
aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non controlling
interest in the acquiree. For each business combination the consolidated entity elects whether it measures the non-
controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets.
Acquisition costs incurred are expensed and included in administrative expenses.
When the consolidated entity acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions
as at the acquisition date.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity
interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount
recognised for non-controlling interest over the net identifiable net assets acquired and liabilities assumed. If the
consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in the
profit or loss.
35
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(y) Business combinations (continued)
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of
impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the
consolidated entity’s cash generating units that are expected to benefit from the combination, irrespective of whether other
assets or liabilities of the acquiree are assigned to those units.
Where goodwill forms part of a cash generating unit and part of the operation within that unit is disposed of, the goodwill
associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or
loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the
operation disposed of and the portion of the cash generating unit retained.
(z)
Interest in a joint venture
The consolidated entity has an interest in a jointly controlled entity, whereby the venturers have a contractual arrangement
that establishes joint control over the economic activities of the entity. The agreement requires unanimous agreement for
financial and operating decisions among the venturers. The consolidated entity recognises its interest in the joint venture
using the equity accounting method.
Under the equity method, the investment in the jointly controlled entity is carried on the statement of financial position at
cost plus post acquisition changes in the consolidated entity’s share of net assets of the jointly controlled entity. Goodwill
relating to the jointly controlled entity in the carrying amount of the investment is not amortised however it is tested for
impairment.
The income statement reflects the consolidated entity’s share of the results of operations of the jointly controlled entity.
This is disclosed as part of discontinued operations. Where there has been a change recognised directly in the equity of
the associate, the consolidated entity recognises its share of any changes and discloses this, when applicable, in the
statement of changes in equity. Unrealised gain and losses resulting from transactions between the consolidated entity and
the jointly controlled entity are eliminated to the extent of the interest in the jointly controlled entity.
The consolidated entity’s share of profit from the jointly controlled entity is shown on the face of the income statement but
has been treated as discontinued operations for the 2012 financial year. This is the profit attributable to equity holders of
the jointly controlled entity and, therefore, is profit after tax and non-controlling interests in the subsidiaries of a jointly
controlled entity.
The financial statements of the jointly controlled entity are prepared for the same reporting period as the consolidated entity.
When necessary, adjustments are made to bring the accounting policies in line with those of the consolidated entity.
After application of the equity method, the consolidated entity determines whether it is necessary to recognise an additional
impairment loss on its investment in the jointly controlled entity. The consolidated entity determines at each reporting date
whether there is any objective evidence that the investment in the jointly controlled entity is impaired. If this is the case the
consolidated entity calculates the amount of impairment as the difference between the recoverable amount of the jointly
controlled entity and its carrying value and recognises that amount in the share of profit of and jointly controlled entity in the
income statement. This is classified as a discontinued operation for the 2012 financial year.
(aa) Financial instruments – initial recognition and subsequent measurement
(i) Financial assets
Initial recognition and measurement
Financial assets within the scope of AASB139 are classified as financial assets at fair value through the profit or loss, loans
and receivables, held to maturity investments, available for sale financial assets, or as derivatives designated as hedging
instruments in an effective hedge, as appropriate. The consolidated entity determines the classification of its financial
assets at initial recognition.
36
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(aa) Financial instruments – initial recognition and subsequent measurement (continued)
(i) Financial assets
Initial recognition and measurement
All financial assets are recognised initially at fair value plus transaction costs, except in the case of financial assets
recorded at fair value through the profit or loss.
The consolidated entity’s financial assets include cash and short term deposits, trade and other receivables, and derivative
financial instruments.
(ii)
Impairment of financial assets
The consolidated entity assesses, at each reporting date, whether there is any objective evidence that a financial asset or a
group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if,
there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of
the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial
asset or group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the
debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal
payments, the probability that they will enter bankruptcy or other financial reorganisation and when observable data
indicates that there is a measureable decrease in the estimated future cash flows, such as changes in arrears or economic
conditions that correlate with defaults.
(iii) Financial liabilities
Initial recognition and measurement
Financial liabilities within the scope of AASB 139 are classified as financial liabilities at fair value through profit or loss, loans
and borrowings, or as derivatives designated as hedging instruments in an effective hedge as appropriate. The
consolidated entity determines the classification of its financial liabilities at initial recognition.
All financial liabilities are recognised initially at fair values plus, in the case of loans and borrowings, directly attributable
transaction costs. The consolidated entity’s financial liabilities include trade and other payables.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
(iv) Fair value of financial instruments
The fair value of financial instruments that are in active markets at each reporting date is determined by reference to quoted
market prices or dealer price quotations, without any deductions for transaction costs.
For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques.
Such techniques may include:
► Using recent arms length market transactions
► Using reference to current fair value of another instrument that is substantially the same
► Applying a discount cash flow analysis or other valuation models
37
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
3. Financial risk management objectives and policies
The consolidated entity’s principal financial instruments comprise of receivables, payables, cash and short-term deposits.
Risk exposures and responses
The consolidated entity manages its exposure to key financial risks, including interest and currency risk in accordance with
the consolidated entity’s financial risk management policy. The objective of this policy is to support the delivery of the
consolidated entity’s financial targets whilst protecting future financial security.
The consolidated entity enters into derivative transactions, principally forward currency contracts. The purpose is to manage
the currency risks arising from the consolidated entity’s operations. The main risks arising from the consolidated entity’s
financial instruments are interest rate risk, foreign currency risk, credit risk and liquidity risk. The consolidated entity uses
different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of
exposure to interest rate and foreign exchange risk and assessment of market forecasts for interest rate and foreign
exchange prices. Ageing analysis and monitoring of specific credit allowances are undertaken to manage credit risk.
Liquidity risk is monitored through using future rolling cash flow forecasts.
Primary responsibility for identification and control of financial risks rests with the Audit & Risk Management Committee
under the authority of the Board. The Board reviews and agrees policies for managing each of the risks identified below,
including the setting of limits for forward currency contracts, credit allowances and future cash flow forecast projections.
Interest rate risk
The consolidated entity’s exposure to market interest rates relates solely to the consolidated entities short-term cash
deposits. The amount of cash is disclosed in note 9. At balance date, the consolidated entity had nil financial liabilities
exposed to Australian and New Zealand variable interest rate risk.
Financial assets
Cash and cash equivalents
Note
9
2012
$000
4,808
4,808
2011
$000
20,044
20,044
The consolidated entity constantly analyses its interest rate exposure. Within this analysis consideration is given to
potential renewals of existing positions, alternative hedging positions and the mix of fixed and variable interest rates.
The following sensitivity analysis is based on the interest rate risk exposures in existence at the reporting date.
At 30 June 2012, if interest rates had moved as illustrated in the table below, with all other variables held constant, post tax
profit and other comprehensive income would have been affected as follows:
Consolidated
+1% (100 basis points)
-0.5% (50 basis points)
Post tax profit
higher / (lower)
Other comprehensive income
higher / (lower)
2012
$000
43
(21)
2011
$000
177
(88)
2012
$000
-
-
2011
$000
-
-
The movements in profit are due to higher / lower cash receipts from variable rate cash balances. The assumed reasonably
possible interest rate movements are based on an economic forecaster’s expectations.
38
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
3. Financial risk management objectives and policies (continued)
Foreign currency risk
The consolidated entity is exposed to foreign currency risk on sales and purchases that are denominated in a currency
other than Australian dollars. The currencies giving rise to risk are primarily U.S dollars, Euros, and New Zealand dollars.
The consolidated entity enters into forward foreign exchange contracts to hedge certain anticipated purchase commitments
denominated in foreign currencies (principally U.S dollars). The terms of these commitments are no more than 45 days. It
is the consolidated entity’s policy not to enter into forward contracts until a firm commitment is in place.
The consolidated entity has a subsidiary based in New Zealand and all transactions for this subsidiary are denominated in
New Zealand dollars. There is currently no hedge in place to mitigate the foreign currency risk for this subsidiary.
Entering into forward foreign currency contracts minimises the risk of sharp fluctuations in foreign exchange rates and
allows for better cash flow management in relation to paying international suppliers. At balance date, the consolidated
entity had the following exposure to US$ foreign currency that is not designated in cash flow hedges:
Financial assets
Trade and other receivables
Financial liabilities
Trade and other payables
Net exposure
2012
$000
2011
$000
1,684
1,684
(4,319)
(4,319)
(2,635)
950
950
(3,751)
(3,751)
(2,801)
At 30 June 2012, had the Australian dollar moved, as illustrated in the table below, with all other variables held constant,
post tax profit and other comprehensive income would have been affected as follows:
Consolidated
AUD / USD +10% (2010: +10%)
AUD / USD -10% (2010: -10%)
Post tax profit
higher / (lower)
Other comprehensive income
higher / (lower)
2012
$000
2011
$000
2012
$000
2011
$000
282
(268)
221
(343)
-
-
-
-
Significant assumptions:
• The reasonably possible movement was calculated by taking the USD spot rate as at balance date, moving the spot
rate by the reasonably possible movements and then re-converting the USD into AUD with the ‘new spot rate’. This
methodology reflects the translation methodology undertaken by the consolidated entity.
39
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
3. Financial risk management objectives and policies (continued)
Credit Risk
Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted.
The credit risk on financial assets of the consolidated entity is the carrying amount, net of any impairment losses. The
consolidated entity mitigates this risk by adopting procedures whereby they only deal with creditworthy customers. Where
there is evidence of credit risk, an impairment loss is recognised. The consolidated entity also insures all debtors through
trade finance insurance. The insurance excess payable by the consolidated entity for a claim on the insurance is 15% of
the insured value or $10,000, whichever is greater.
Liquidity risk
Liquidity risk arises from the financial liabilities of the consolidated entity and the consolidated entity’s subsequent ability to
meet their obligations to repay their financial liabilities as and when they fall due.
The consolidated entities objective is to maintain a balance between continuity of at cash funding and short-term fixed cash
deposits.
The consolidated entity manages its liquidity risk by monitoring the total cash inflows and outflows expected on a daily
basis. Cellnet Group Ltd has established comprehensive risk reporting covering its Australian and New Zealand operations
that reflect expectations of management of the expected settlement of financial assets and liabilities.
Maturity analysis of financial liabilities based on management’s expectation
Consolidated:
Liquid financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Net inflow
Liquid financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Net inflow
Note
Total
6 months or
less
2012
6 – 12 months
1 – 5
years
More than 5
years
9
10, 21
14, 21
4,808
11,013
15,821
(9,933)
(9,933)
5,888
4,808
10,844
15,652
(9,768)
(9,768)
5,884
-
-
-
-
-
-
-
169
169
(165)
(165)
4
-
-
-
-
-
-
Total
6 months or
less
2011
6 – 12 months
1 – 5
years
More than 5
years
9
10
14
20,044
9,260
29,304
(9,316)
(9,316)
19,988
20,044
9,100
29,144
(9,156)
(9,156)
19,988
-
107
107
(107)
(107)
-
-
53
53
(53)
(53)
-
-
-
-
-
-
-
40
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
4. Operating segments
Identification of reportable segments
The consolidated entity has identified its operating segments based on the internal reports that are reviewed and used by
the Managing Director (the chief operating decision maker) in assessing performance and in determining the allocation of
resources.
The operating segments are identified by management based on the manner in which products are sold, whether direct to
retail customer or via on-line sales. Discrete financial information about each of these operating segments is reported to the
Managing Director at least on a monthly basis. However, for the 2012 financial year the consolidated entity’s activities
relate solely to retail sales as the Board announced on 8 June 2012 that it planned to exit from the online segment. Details
relating to the online business segment are disclosed in note 21.
Retail sales
$000
Online sales
$000
Unallocated items
$000
Total
$000
For the year ended 30 June 2011
Revenue
Sales to external customers
Other revenues from external
customers
Other revenue
Total segment revenue
72,451
1,116
1,019
74,586
Segment net operating profit after tax
1,204
Discontinued operations after income
tax
Segment assets
Segment liabilities
Cash flow information
Net cash flow from operating activities
Net cash flow from investing activities
Net cash flow from financing activities
-
36,137
9,301
3,323
800
(4,831)
83
-
-
83
-
-
46
15
-
-
-
-
-
-
-
-
(163)
2,749
-
-
-
-
72,534
1,116
1,019
74,669
1,204
(163)
38,932
9,316
3,323
800
(4,831)
(i) Segment revenue reconciliation to the statement of comprehensive income
Total segment revenue
Other revenue from continuing activities
Total revenue
2012
$000
61,633
2,509
64,142
2011
$000
72,534
2,135
74,669
Revenue from external customers by geographical location is detailed below. Revenue is attributable to geographic
location based on the location of the customers. The company does not have external revenues from external customers
that are attributable to any foreign country other than as shown.
41
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
4. Operating segments (continued)
Australia
New Zealand
Total revenue
5. Other revenue
Interest
Net foreign currency gain
Total other revenue
6. Expenses
(a) Other expenses
Depreciation
Total depreciation and amortisation
Net loss on disposal of property,
plant and equipment
Net foreign currency exchange loss
Total other expenses
(b) Employee benefits expense
Wages and salaries
Superannuation expense
Share based payment expense
Other employee benefits expense
Total employee benefits expense
(c)
Lease payments included in net
income
Minimum lease payments – operating
lease
(d) Cost of sales
Cost of goods sold
Impairment of inventory included in cost
of sales
Total cost of sales
2012
$000
51,925
12,217
64,142
2011
$000
63,343
11,326
74,669
Consolidated
2012
$000
2011
$000
847
943
1,790
1,019
-
1,019
Consolidated
2012
$000
2011
$000
483
483
23
-
506
442
442
-
134
576
Consolidated
2012
$000
2011
$000
7,866
581
91
109
8,647
7,887
565
80
79
8,611
913
842
46,864
57,507
746
47,610
766
58,273
42
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
7.
Income Tax
(a)
Income tax (expense)/benefit
The major components of income tax are:
Deferred income tax
Relating to origination and reversal of
temporary differences
Total income tax (expense)/benefit reported in
net income
(b) Numerical reconciliation between aggregate tax
expense recognised in net income and tax
expense calculated per the statutory income tax
rate
A reconciliation between tax expense and the
product of accounting profit before income tax
multiplied by the consolidated entity’s applicable
income tax rate is as follows:
Accounting profit / (loss) before tax from continuing
operations
Profit / (loss) before tax from discontinuing
operations
Total accounting profit before income tax
At the parent entities statutory income tax rate 30%
(2010: 30%)
Adjustments is respect of current income tax of
previous years
Non-deductible expenses
Entertainment
(Recognition) / non-recognition of tax losses
Previously unrecognised tax losses used to reduce
deferred tax asset
Aggregate income tax expense is attributable to:
Continuing operations
Discontinued operations
Consolidated
2012
$000
2011
$000
(10)
(10)
87
87
1,334
(1,812)
(478)
(143)
36
27
12
58
-
(93)
83
1,117
(163)
954
286
-
24
7
-
(230)
87
-
43
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
7.
Income Tax (continued)
(c) Recognised deferred tax assets and liabilities
2012
$000
Consolidated
2012
$000
2011
$000
2011
$000
Current
income tax
Deferred
income tax
Current
income tax
Deferred income
tax
Opening balance
Charged to income / (expense)
Payments/ (refunds)
Closing balance
Amounts recognised in the statement
of financial position:
Deferred tax asset
Deferred tax liability
94
-
(77)
17
-
-
-
Deferred income tax at 30 June relates to the following:
Deferred tax assets
Property, plant and equipment
Provisions and other
Value of tax losses carried forward
Net deferred tax asset
Reflected in the statement of financial position as follows:
Deferred tax liability– continuing operations
Deferred tax asset – continuing operations
Deferred tax asset – discontinued operations
Deferred tax asset net
(d) Tax losses
2,754
(10)
-
2,744
2,833
(89)
2,744
-
668
2,076
2,744
(89)
2,750
83
2,744
98
-
(4)
94
-
-
-
2,667
87
-
2,754
2,752
2
2,754
66
663
2,025
2,754
(2)
2,756
-
2,754
The consolidated entity has Australian tax losses for which no deferred tax asset is recognised on the statement of financial
position of $18,526,716 (2011: $17,163,813) which are available indefinitely for offset against future gains subject to
meeting the relevant statutory tests.
The consolidated entity has recognised tax losses to the extent that forecasts suggest it is probable that sufficient taxable
income will be earned to recoup the recognised losses.
(e) Taxation of financial arrangements (TOFA)
Legislation is in place which changes the tax treatment of financial arrangements including the tax treatment of hedging
transactions. The consolidated entity has assessed the potential impact of these changes on its tax position. No impact
has been recognised and no adjustments have been made to the deferred tax and income tax balances at 30 June 2012
(2011: $Nil)
44
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
8. Earnings per share
The following reflects the income used in the basic and diluted earnings per share computations:
(a) Earnings used in calculating earnings per share
For basic earnings per share:
Profit from continuing operations
Profit / (loss) from discontinued operations
Net profit attributable to ordinary equity holders
For diluted earnings per share:
Profit / from continuing operations
Profit / (loss) from discontinued operations
Net profit attributable to ordinary equity holders
(b) Weighted average number of shares
Weighted average number of shares (basic) at 30 June
Weighted average number of shares adjusted for
Consolidated
2012
$000
2011
$000
1,241
(1,729)
(488)
1,241
(1,729)
(488)
1,204
(163)
1,041
1,204
(163)
1,041
2012
000s
2011
000s
60,211
67,229
effect of dilution
60,211
67,229
Restricted shares are considered non-dilutive where the current share price is lower than the exercise price.
9. Current assets – cash and cash equivalents
Cash at bank and in hand
Short-term deposits
Funds held by bank (note 19)
Cash at bank and in hand relating to a discontinued
operation (note 21)
Consolidated
2012
$000
2011
$000
4,273
-
350
4,623
185
4,808
2,844
16,850
350
20,044
-
20,044
10. Current assets – trade and other receivables
Trade receivables
Allowances for impairment loss (a)
Other receivables and prepayments
Carrying amount of trade and other receivables
2012
$000
2011
$000
10,290
(87)
10,203
748
10,951
9,495
(624)
8,871
389
9,260
45
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
10. Current assets – trade and other receivables (continued)
(a) Allowance for impairment loss
Trade receivables are non-interest bearing and are generally on 30 day terms. Trade receivables are insured through a
debtors’ insurance policy. A provision for impairment loss is recognised when there is objective evidence that an individual
trade receivable is impaired and not recoverable within the terms of the insurance policy.
Movements in the provision for impairment loss were as follows:
At 1 July
Charge for the year
Amount recovered
Amounts written off
At 30 June
Consolidated
2012
$000
2011
$000
624
(474)
-
(63)
87
782
(77)
69
(150)
624
At 30 June, the ageing analysis of trade receivables is as follows:
Total
$000
0-30
days
$000
31-60
days
$000
61-90 days
PDNI*
$000
+ 91 days
PDNI*
$000
+91 days CI*
$000
2012 Consolidated
10,290
8,061
1,067
2011 Consolidated
9,495
5,445
2,761
297
405
778
260
87
624
* Past due not impaired (PDNI)
•
* Considered impaired (CI)
Receivables past due but not considered impaired are $1,075,000 (2011: $434,000). Payment terms on these amounts
have not been re-negotiated however credit has been stopped until full payment is made. Each debtor has been directly
contacted by debt recovery agents and the consolidated entity is satisfied that payment will be received in full.
11. Current assets – inventories
Stock on hand
Less: provision for obsolescence
Total inventories at the lower of cost and net
realisable value
Consolidated
2012
$000
2011
$000
6,017
(823)
5,194
5,913
(654)
5,259
(a)
Inventory expense
Inventories recognised as an expense for the year ended 30 June 2012 totalled $42,785,000 (2011: $51,330,000). This
expense has been included in the cost of sales line item as a cost of inventories.
12. Current assets – income tax receivable
The current tax asset for the consolidated entity of $17,000 (2011: $94,000) represents the amount of income taxes
recoverable in respect of prior periods and that arise from the payment of tax in excess of the amounts due to the relevant
tax authority.
46
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
13. Non-current assets – property, plant and equipment
Reconciliation of the carrying amounts at the beginning and end of the period.
For the year ended 30 June 2012
At 1 July 2011 net of accumulated
depreciation and impairment
Additions
Disposals
Depreciation charge for the year
At 30 June 2011 net of accumulated
depreciation and impairment
At 30 June 2012
Cost or fair value
Accumulated depreciation and
impairment
Net carrying amount
For the year ended 30 June 2011
At 1 July 2010 net of accumulated
depreciation and impairment
Additions
Disposals
Depreciation charge for the year
At 30 June 2010 net of accumulated
depreciation and impairment
At 30 June 2011
Cost or fair value
Accumulated depreciation and
impairment
Net carrying amount
Consolidated
Leasehold
improvements
$000
Plant &
Equipment
$000
Plant &
Equipment
under lease
$000
Total
$000
334
60
(32)
(95)
267
1,176
163
(12)
(386)
7
-
-
(2)
1,517
223
(44)
(483)
941
5
1,213
812
9,062
2,135
12,009
(545)
267
(8,121)
941
(2,130)
(10,796)
5
1,213
Consolidated
Leasehold
improvements
$000
Plant &
Equipment
$000s
Plant &
Equipment
under lease
$000s
Total
$000
411
1
-
(78)
334
1,369
218
(49)
(362)
1,176
9
-
-
(2)
1,789
219
(49)
(442)
7
1,517
816
9,014
2,135
11,986
(482)
334
(7,838)
1,176
(2,128)
(10,469)
7
1,517
47
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
14. Current and non-current liabilities – trade and other payables
Current
Trade payables
Other payables and accrued expenses
Consolidated
2012
$000
2011
$000
6,532
3,289
9,821
6,722
2,594
9,316
For terms and conditions relating to trade payables refer to Note 2(o).
15. Current and non-current liabilities – provisions
Current
Provision for fringe benefits tax
Liability for annual leave and employee provisions
Total current employee benefits
Non-Current
Liability for long-service leave
Total non-current employee benefits
(a) Nature and timing of provisions
Consolidated
2012
$000
2011
$000
24
519
543
412
412
1
490
491
327
327
Refer to Note 2(m) (i) for the relevant accounting policy and a discussion of the significant estimates and assumptions applied in
the measurement of this provision.
16. Share based payments
(a) Employee share bonus
No employee bonus shares were issued to employees during the current year or prior year.
(b) Long term incentive plan
2010 allocation
2,000,000 shares were issued to Stuart Smith 28 October 2009. The shares were issued for $0.35 each. It was accounted for
as an option. The Black and Scholes methodology was used to value the options. The theoretical value of the options was
calculated as being $0.1195 per option. Further terms and conditions were:
• The risk free rate is 5.31% with a maturity date approximating that of the expiration period of the options;
• The underlying security price used for the purposes of this valuation is $0.30, which is the closing price of the shares as at
28 October 2009;
• The volatility of the Company’s shares is 60.00% (based on a 3 year historical volatility); and
• The vesting period was determined to be the length of service, being three years.
During the year the managing director received a capital return of $0.09 per share and dividends of $0.135 per share. As per
the terms of the incentive plan all distributions received by the managing director were repaid to the company except $105,000
which is recognised as a receivable at 30 June 2012 (included in note 10).
48
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
16. Share based payments (continued)
(b) Long term incentive plan (continued)
Employee expenses
Note
Consolidated
2012
$000
2011
$000
Expense arising from 2,000,000 shares granted
to Stuart Smith on 18 October 2009
Expense arising from 3,300,000 options issued
to KMP on 21 October 2011
Total expense recognised in employee costs
6(b)
80
11
91
80
-
80
(c) Executive share option plan
On 18 December 2007, shareholders of the Company approved an Executive share option plan that entitles Executives of the
Company to purchase shares in the Company.
Under the plan the Board has the discretion to issue options to Executives as long as the issue does not result in the
Executive owning or controlling the exercise of voting power attached to 5% or more of all shares then on issue. Each option
is convertible to one ordinary share. The exercise price of the options is determined by the Board.
Upon the exercise of an option, each share issued will rank equally with other shares of the Company.
The Company may offer to provide such financial assistance to a person in relation to an invitation to participate in the plan, as
the Board may determine from time to time in its discretion.
The rules governing the operation of the plan may be amended, waived or modified, at any time by resolution of the Board
provided there is no reduction of rights to Executives in the plan. If an amendment reduces the rights of Executives in the plan,
it requires written consent of three-quarters of affected Executives.
The plan may be terminated or suspended at any time by a resolution of the Board, provided the termination or suspension
does not materially adversely affect the rights of persons holding shares issued under the plan at that time.
The options issued during the year are as follows:
Directors
S. Smith
M. Brookman
KMP
D. Clark
J. Laun
J. Phua
M. Wallace
C. Barnes
Total issued
No. Options
Issued
900,000
400,000
1,300,000
400,000
400,000
400,000
400,000
400,000
2,000,000
3,300,000
49
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
16. Share based payments (continued)
(c) Executive share option plan (continued)
The following summarises the details of the grant.
Grant date
First exercise date
Last exercise date
Exercise price*
Exercise Conditions
Lapse of options
21 October 2011
21 October 2013
21 October 2014
$ 0.45.
Subject to the Plan Rules, an option cannot be exercised unless the Board acting reasonably are
satisfied that the following conditions have been met:
•
•
•
The employee remains employed by the Company
There is no outstanding breach of the terms of engagement with the Company
No notice of termination of engagement has either been given by the employee or received
from the Company.
The options lapse in occurrence of the earlier of:
•
•
Last exercise date;
Board determination that the employee has committed an act that brings the Company into
disrepute;
Ceased employment other than due to a special circumstances;
The option is surrendered.
•
•
* The exercise price is subject to reduction as per the Plan Rules at a rate equal to the amount of share capital returned to
share holders. Subsequent to the grant of the options an amount of $0.09 was returned to share holders by way of equal
capital reduction. The new exercise price of the options issued in the 2012 financial year is $0.36.
Movements in the year
The following table illustrates the number of weighted average exercise price prices (WAEP) of, and movements in, share
options during the year.
2012
Number of options
2012
WAEP
$
-
3,300,000
-
3,300,000
-
0.36
-
0.36
Opening balance
Granted during the year
Options vested
Outstanding as at 30 June 2012
17. Financial Instruments
Recognised assets and liabilities
Changes in the fair value of forward exchange contracts that economically hedge monetary assets and liabilities in foreign
currencies are recognised in net income. Both the changes in fair value of the forward contracts and the foreign exchange
gains and losses relating to the monetary items are recognised as part of financial income and expenses (see Note 5).
50
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
17. Financial Instruments (continued)
Fair values
The fair values together with the carrying amounts shown in the statement of financial position are as follows:
Consolidated
Note
Cash and cash equivalents 9
Trade and other receivables 10, 21
Trade and other payables 14, 21
Carrying amount
2012
$000
Fair value
2012
$000
Carrying amount
2011
$000
Fair value
2011
$000
4,808
11,013
(9,933)
5,888
4,808
11,013
(9,933)
5,888
20,044
9,260
(9,316)
19,988
20,044
9,260
(9,316)
19,988
Estimation of fair values
For receivables / payables with a remaining life of less than one year, the notional amount is deemed to reflect the fair value.
18. Commitments
Operating leases
The consolidated entity has entered into commercial leases on office and warehouse facilities, and items of computer
equipment. The leases typically run for a period of 1 to 7 years, with an option to renew the lease after that date. Lease
payments generally comprise a base amount plus an incremental contingent rental which is based on movements in the
Consumer Price Index. During the current year the lease on the Eagle Farm premises was renewed for a further five years.
Future minimum rentals payable under non-cancellable operating leases at 30 June are payable as follows:
Less than one year
Between one and five years
Consolidated
2012
$000
2011
$000
823
2,312
3,135
378
160
538
19. Financial guarantees
The Directors are of the opinion that provisions are not required in respect of these matters, as it is not probable that a future
sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.
Contingent liabilities considered remote
(i) The consolidated entity has provided bank
guarantees in the normal course of business.
Consolidated
2012
$000
2011
$000
350
350
350
350
20. Share buy-back
The Company announced that it would commence an on-market share buy-back program on 12 October 2009. The share
buy-back was initially for up to 10% of the issued capital of the Company. This was extended to buy back up to 20 million
shares after approval from shareholders at the Annual General Meeting held 28 October 2009. For the year ended 30 June
2012, 3,579,643 shares were repurchased for a total cost of $854,000 (2011: 12,238,767 shares, $4,132,000).
51
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
21. Discontinued operation
The company advised on the 8 June 2012 that it planned to exit the on-line business segment. This exit strategy is still in
process at 30 June 2012 and as a result the online business segment has been treated as a discontinued operation in the
2012 financial year. The entity’s that are being discontinued are OYT Pty Ltd and Cellnet Online Pty Ltd. Other than the
discontinuance of the online business segment there have been no other significant changes in the nature of these activities
during the year.
Results of the discontinued operations for the year are presented below:
Consolidated
2012
$000
2011
$000
Results of discontinued operation
Revenue
Expenses
Gross profit
Share of losses from associate
Impairment on investment in associate
Loss on disposal of associate
Impairment of inventory
Impairment of intangible
Other impairment
Goodwill written off
Depreciations
Loss before tax
Tax
Loss for the period from a discontinued operation
Major classes of assets and liabilities of the discontinued operation
are presented below:
Cash and cash equivalents
Trade and other receivables
Inventory
Deferred tax assets
Property, plant and equipment
Assets attributable to held for sale
Liabilities held for sale
Liabilities attributable to held for sale
Net assets attributable to held for sale
Cash flows from discontinued operation
Net cash from operating activities
Net cash from (used in) discontinued operation
1,266
(2,074)
(808)
(131)
(87)
(260)
(245)
(110)
(141)
(12)
(18)
(1,812)
83
(1,729)
-
185
62
184
83
18
532
(127)
405
185
185
-
(163)
(163)
-
-
-
-
-
-
(163)
-
(163)
-
-
-
4
-
-
-
4
-
4
(163)
(163)
52
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
21. Discontinued operation (continued)
Earnings per share:
Basic, profit / (loss) for the year, from discontinued operation
Diluted, profit / (loss) for the year from discontinued operation
22. Related party disclosure
Consolidated
2012
2011
($0.029)
($0.029)
$0.003
$0.003
Subsidiaries
The consolidated financial statements include the financial statements of Cellnet Group Ltd and the subsidiaries included in
the following table:
Name
Cellnet Group Ltd (Parent)
Cellnet Ltd
Comms Plus Marketing Pty Ltd
C&C Warehouse (Holdings) Pty Ltd
VME Systems Pty Ltd
Michael Hornsby & Associates Pty Ltd
Regadget Pty Ltd
OYT Pty Ltd *
Cellnet Online Pty Ltd *
Buyii Pty Ltd *
* Entity’s represent discontinued operations
23. Key management personnel
(a) Key management personnel remuneration
Short-term employee benefits
Post-employment benefits
Long term benefits
Share-based payment benefits
Total compensation
Country of
incorporation
% Equity interest
2012
2011
Australia
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100
100
100
100
100
100
90
100
100
25
100
100
100
100
100
100
-
-
-
-
Consolidated
2012
$000
1,416,477
106,413
15,118
89,473
1,627,481
2011
$000
1,362,595
97,419
462
79,661
1,540,137
(b) Recognition of directors shares
On 28 October 2009, 2,000,000 restricted shares were granted to a Director, for details refer to note 16(b).
(c) Shareholdings of key management personnel
The movement during the reporting period in the number of ordinary shares in Cellnet Group Limited held directly, indirectly or
Directors / KMP
beneficially, by each key management person and their related parties, is as follows:
Held at 1 July
2011
Other acquisitions
/ disposals
Purchases
Sales
Held at 30
June 2012
M. Brookman
S. Smith (i)
(i) Resigned 25 July 2012
1,851,943
2,000,000
-
-
(1,851,943)
-
-
-
-
2,000,000
53
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
23. Key management personnel (continued)
(c) Shareholdings of key management personnel (continued)
Directors / KMP
Held at 1 July
2010
Purchases
Other acquisitions
/ disposals
Sales
Held at 30
June 2011
S. Harrison
M. Brookman
S. Smith
M. Wallace
-
-
-
-
(A) Received under Long Term Incentive Plan on 28 October 2009.
702,917
3,851,943
2,000,000 (A)
219
-
-
-
-
(702,917)
(2,000,000)
-
(219)
-
1,851,943
2,000,000
-
24. Subsequent events
On the 25th July 2012 CEO Stuart Smith resigned from his position as CEO as well as all other positions held within the
consolidated entity. Mr. Smith’s replacement as CEO is yet to be determined. His position on the board of directors was
replaced by Mr. Elliot Kaplan who will act as a non executive director. Mr Kaplan is Managing Director of CVC Private Equity
Limited, Chairman and Non Executive Director of Pro-Pac Packaging Limited (ASX code: PPG), and former Non-Executive
Director of Dolomatrix Limited (ASX code: DMX).
Mr. Kaplan is a Chartered Accountant with extensive experience in both senior financial and chief executive officer roles. His
experience, from both an investor and investee perspective spans a diverse range of industries including manufacturing,
environmental, distribution and services.
25. Parent entity information
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Retained earnings
Reserve for own shares
Reserve for share based payment
Total shareholder’s equity
Profit of the parent entity after tax
Total comprehensive income of the parent entity
2012
$000
2011
$000
16,218
17,761
8,828
9,241
31,699
(23,932)
(26)
780
8,520
4,423
4,423
31,804
38,479
8,117
21,839
37,861
(21,884)
(26)
689
16,640
(3,946)
(3,946)
The parent has not issued any guarantees in relation to the debts of its subsidiaries and has no contingent liabilities or
contractual obligations as at 30 June 2012.
54
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
26. Contributed equity and reserves
(a) Share Capital
Ordinary shares on issue
Share buy back
On issue at 30 June
Ordinary shares
Issued and fully paid
Consolidated
2012
No. of shares
2011
No. of shares
61,263,733
(3,579,643)
57,684,090
73,502,500
(12,238,767)
61,263,733
55,684,090
59,263,733
*Restricted shares are issued for legal purposes but not for accounting.
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Ordinary shares on issue
Share buy back
Capital reduction (i)
Consolidated
2012
$000
2011
$000
37,861
(854)
(5,308)
31,699
41,993
(4,132)
-
37,861
(i) An equal reduction of share capital of $0.09 per share was approved by share holders at a general meeting held 16
January 2012. This equated to a total cash out flow of $5,488,000. This was subsequently reduced by $180,000 which was
repaid by CEO as per the terms of his loan agreement with the company.
(b) Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of
foreign operations where their functional currency is different to the presentation currency of the reporting entity.
(c) Reserve for own shares
The reserve for own shares represents the cost of shares held by an equity remuneration plan that the consolidated entity is
required to include in the financial report. At 30 June 2012 the consolidated entity held 107,110 of the Company’s shares
(2011: 107,110). This reserve will be reversed against share capital when the underlying shares are exercised under
performance rights. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the
consolidated entity’s own equity instruments.
(d) Capital management
When managing capital, management’s objective is to ensure the entity continues as a going concern as well as to maintain
optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a capital structure that
ensures the lowest cost of capital available to the entity.
Management adjusts the capital structure to take advantage of favourable costs of capital or high returns on assets. As the
market is constantly changing, management may change the amount of dividends to be paid to shareholders, return capital to
shareholders, or issue new shares.
Management monitors capital through the capital adequacy ratio (net assets/total assets). The target for the consolidated
entity’s capital adequacy ratio is between 40% and 60%. The capital adequacy ratios based on continuing operations at 30
June 2012 and 2011 were as follows:
55
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
26. Contributed equity and reserves (continued)
(d) Capital management (continued)
Net Assets
Total Assets
Capital adequacy ratio
27. Dividends paid and proposed
(a) Recognised amounts
Declared and fully paid during the year:
Dividends on ordinary shares:
Interim dividend for 2011: 1.0¢
Final franked dividend for 2011: 1.0¢
Special franked dividend for 2011: 1.5¢
Interim franked dividend for 2012:1.0¢
Special franked dividend for 2012: 10.0¢
(b) Unrecognised amounts
Final franked dividend
(c) Franking credit balance
Consolidated
2012
$000
2011
$000
14,288
25,191
56.7%
28,798
38,932
74.0%
Consolidated
2012
$000
2011
$000
-
614
918
610
5,770
7,912
699
-
-
-
-
699
-
1,532
The amount of franking credits available for the subsequent financial year are:
Consolidated
2012
$000
2010
$000
Franking account balance as at the end of the financial year at
30% (2011:30%)
3,980
4,280
Franking credits that will arise from the payment of income tax
payable as at the end of the financial year
-
-
Franking debits that have arisen from the payment of dividends
as at the end of the financial year
The amount of franking credits available for future reporting
periods:
Impact on the franking account by dividends proposed or
declared before the financial report was authorised for issue
but not recognized as a distribution to equity holders during the
period
(3,394)
586
(300)
3,980
-
586
(657)
3,323
The above available amounts are based on the balance of the dividend franking account at year end adjusted for:
(i)
(ii)
(iii)
franking debits that will arise from the refund of the current tax receivable;
franking debits that will arise from the payment of dividends recognised as a liability at the year end;
franking credits that will arise from the receipt of dividends recognised as receivables by the tax consolidated entity at the
year end; and
(iv) franking credits that the entity may be prevented from distributing in subsequent years.
56
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
27. Dividends paid and proposed (continued)
(c) Franking credit balance (continued)
The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends. The
impact on the dividend franking account of dividends proposed after the balance date but not recognised as a liability is to
reduce it by $0 (2011: $1,531,593). In accordance with the tax consolidation legislation, the Company as the head entity in
the tax-consolidated entity has also assumed the benefit of nil (2011: nil) franking credits from its Australian wholly-owned
subsidiaries during the year.
28. Auditor remuneration
Consolidated
2012
2011
Amounts received or due and receivable by Ernst &
Young (Australia & New Zealand) for:
Audit or review of the financial report of the entity and any
other entity in the consolidated entity
100,000
102,000
Other services in relation to the entity and any other entity
in the consolidated entity
•
Tax compliance
29. Cash flow statement reconciliation
Reconciliation of net profit after tax to net cash flows from
operations:
Net profit
Adjustments for:
Depreciation
Write-down inventory
Write-off bad debts
Loss / (profit) on sale of property, plant & equipment
Share based payments expense
Foreign exchange (gain) / loss
Changes in assets and liabilities:
(Increase) / decrease in trade and other receivables
(Increase) / decrease in inventories
(Increase) / decrease in current tax assets
(Increase) / decrease in deferred tax assets
(Decrease) / increase in trade and other payables
(Decrease) / increase in provisions
Net cash from operating activities
10,403
110,403
10,386
112,386
Consolidated
2012
$000
2011
$000
(488)
1,041
501
649
(63)
108
91
(904)
(1,009)
(564)
77
10
319
40
(1,233)
442
766
(77)
-
80
134
647
(681)
4
(87)
1,010
44
3,323
57
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
30.
Investment in an associate
The consolidated entity acquired a 30% interest in OYT Pty Ltd on 13 July 2011. OYT Pty Ltd is an online discount grocery
retailer. OYT Pty Ltd is a private entity that is not listed on any public exchange. The following illustrates summarised
financial information of the consolidated entity’s investment in OYT Pty Ltd:
Opening balance
Acquired during the year
Share of losses from associate
Impairment recognised on acquisition of non controlling
interest
Closing balance
2012
$000
-
500
(131)
(347)
22
For disclosure relating to the acquisition of the remaining 70% refer to note 31.
31. Business combination
Acquisition of OYT Pty. Ltd
During the current year the consolidated entity acquired an interest in OYT Pty Ltd in two separate stages. On 13 Jul 2011
30% of the share capital in OYT Pty Ltd was acquired for a consideration of $500,000. The remaining 70% of share capital
was acquired for a consideration of $51,000 on the 17 February 2012. The fair value of identifiable net assets acquired from
OYT Pty Ltd on 17 February 2012 is illustrated in the table below.
Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Property, plant and equipment
Intangibles
Liabilities
Trade and other payables
Total identifiable net assets at fair value
Goodwill arising on acquisition
Fair value of the investment in OYT Pty Ltd
2012
$000
26
42
116
1
46
231
(146)
85
12
73
Fair value is comprised of purchase consideration of $51,000 and fair value of investment in associate (prior to business
acquisition) $22,000.
The table below details fair value of net assets as at 30 June 2012.
Assets
Cash and cash equivalent (Note 21)
Inventories (Note 21)
Inventories (Note 21)
Liabilities
Total identifiable net assets at fair value
2012
$000
14
18
1
33
-
33
58
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
31. Business combination (continued)
On the same date, an impairment test was carried out as per AASB 139 on Cellnet Group Limited’s investment in OYT Pty
Ltd. Consequently an impairment loss of $39,741 was recognised against the investment which effectively reduced its carrying
amount from $73,000 to $33,000.
OYT Pty Ltd contributed $146,000 from the date of acquisition (17 February 2012) to 30 June 2012 to the loss for the year of
discontinued operations of the consolidated entity. If the acquisition had taken place at the beginning of the year, revenue
from this discontinued operation would have been $1,824,000 and the loss for the year from discontinued operations for the
consolidated entity would have been $2,121,000.
32.
Intangible assets
Opening balance
Acquired
Impairment expense (refer note 21)
Consolidated
2012
$000
2011
$000
-
110
(110)
-
-
-
-
-
59
Cellnet Group Limited and its consolidated entities
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
Director’s declaration
In accordance with a resolution of the Directors of Cellnet Group Limited, I state that:
In accordance with a resolution of the Directors of Cellnet Group Limited, I state that:
In the opinion of the Directors:
a)
b)
c)
d)
the financial statements and notes of the
notes of the company are in accordance with the Corporations Act 2001
Corporations Act 2001, including:
i)
and of their performance for
giving a true and fair view of the company’s financial position as at 30 June 2011 and of their performance for
giving a true and fair view of the
the year ended on that date; and
the year ended on that date; and
ii) complying with Australian Accounting Standards and Corporations Regulations 2
001;
complying with Australian Accounting Standards and Corporations Regulations 2001;
the financial statements and notes also comply with International Financial Reporting Standards as disclosed in
the financial statements and notes also comply with International Financial Reporting Standards as disclosed in
the financial statements and notes also comply with International Financial Reporting Standards as disclosed in
note 2(a);
will be able to pay its debts as and when they become
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become
there are reasonable grounds to believe that the
due and payable;
this declaration has been made after receiving the declarations required to be made to the directors in accordance
this declaration has been made after receiving the declarations required to be made to the directors in accordance
this declaration has been made after receiving the declarations required to be made to the directors in accordance
for the financial year ending 30 June 2012.
Corporations Act 2001 for the financial year ending 30 June 2012.
with section 295A of the Corporations Act 2001
On behalf of the Board
Alexander Beard
Alexander Beard
Chairman
Brisbane
17August 2012
August 2012
60
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
61
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
62
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
Corporate governance statement
Background
Principles of Good Corporate Governance and Best Practice Recommendations” were published in March 2003, revised
effective 1 January 2008 and the latest amendments issued under Corporate Governance Principles and
Recommendations (2nd Edition) by the Australian Securities Exchange Limited’s Corporate Governance Council. The ASX
Listing Rules require listed companies to include in their annual report a statement disclosing the extent to which they have
not followed the Best Practice Recommendations during a reporting period and are also required to provide reasons for
their non-compliance. In addition, specific corporate governance information must be included in the Corporate
Governance Statement section or elsewhere in the Annual Report.
Compliance
Cellnet has reviewed its Corporate Governance Statement and this has been published on the Company website:
http://www.cellnet.com.au/. The Company reports annually on its compliance with the Best Practice Recommendations.
After the significant restructure the Company has completed and in recognition of the reduced scale of operations of the
business, the Board has adopted and is in the process of executing a turnaround plan that focuses on future viable
operations of the business.
In the restructured operations, Cellnet has been unable to fully comply with the requirements of the Corporate Governance
Principles and Recommendations and details below the areas where it is not currently compliant. The Board has indicated,
however that it will return to full compliance with the best practice recommendations as soon as is practicable.
ASX Principles and
Recommendations
Summary of the Company’s Position
Principle 2 – Structure the board to add value
Recommendation 2.1
A majority of the Board should
be independent directors
Recommendation 2.2
The Chair should be an
independent Director
The current scale of operations has determined the need for only a three person Board
which comprises one executive director (who is the Managing Director) and two non-
executive directors (none of whom are independent and includes the Chairman). The
Board holds the view that notwithstanding these departures from the guidelines, the
current Board has the required capabilities appropriate for the current operating
environment, are able to ensure that corporate governance objectives are achieved and
their operational performance is totally transparent.
Recommendation 2.4
The Board should establish a
nominations committee
In line with the Board’s view on the composition and size of the Board having regard to
its current strategies and requirements, there is no nominations committee however the
full Board assumes the functions of such a committee as and when required.
Recommendation 2.5
Disclose the process for
evaluating the performance of
the Board, its committees and
individual Directors
While there is no structured process in place, the Chairman is able to regularly
measure performance through participation at meetings of Directors.
Principle 4 – Safeguard integrity in financial reporting
Recommendation 4.2
Structure of the Audit Committee
The Company is unable to comply with this recommendation principally due to the
current composition of the Board. Notwithstanding this departure, the audit and risk
committee process operates in accordance with the audit and risk committee charter.
63
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
Principle 8 – Remunerate fairly and responsibly
Recommendation 8.2
The
should be structured so that it:
-
remuneration committee
consists of a majority of
independent directors
by
chaired
is
independent director
has at least 3 members
an
-
-
Although there are 3 members of the committee, the Company is unable to comply with
this recommendation in full principally due to the current composition of the Board.
However, the Board assumes the functions of such a committee as and when required.
While there is no structured process in place, the Chairman approves all equity
participation schemes.
Recommendation 8.4
Companies should provide
information in respect of
restrictions on entering into
transactions which limit risk in of
participating in unvested
entitlements.
Corporate Governance Principles and Recommendations (2nd edition)
The ASX Corporate Governance Council announced on 30 June 2010 amendments to the current Corporate Governance
Principles and Recommendations. Cellnet will recognise the impact of these changes in their Statement of Corporate
Governance and report on them as required by no later than 30 June 2012.
In respect of the gender diversity initiatives contained in these changes, Cellnet will facilitate the introduction of an
appropriate policy during the year ending 30 June 2011 and monitor progress towards the achievement of appropriate
gender diversity in the Company. As part of this process, the Board will ensure that the policy contains measureable
objectives for gender diversity but in doing so will need to recognise the nature and size of the Cellnet business and
ensure any policy objectives are realistic and achievable.
64
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
ASX Additional information
As at 28 September 2012
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in
this report is set out below.
Shareholdings
20 largest shareholders
Name
CVC Ltd
McNeil Nominees Pty Limited
Hesley Consultants Limited
Bywater Investments Limited
Walter Stuart Macmillan Smith
Ms Amaya Margaret Brookman
Chemical Trustee Ltd
Philadelphia Investments Pty Ltd
Yardley Holdings Limited
TUP Pty Ltd
Engage Capital Pty Ltd
Citicorp Nominees Pty Limited
Carmant Pty Ltd
Syvest Pty Ltd
Mr Geoffrey Brian McDonald & Mrs Mary Louise McDonald
Organisational Change Consultants Pty Ltd
Mr David Paul Radonich
Rowabit Pty Ltd
Custodial Services Limited
Cellnet ESP Pty Ltd
Top 20 Holders
All other holders
All holders
Ordinary
shares held
% of capital
held
28,472,046
3,702,155
2,800,000
2,139,800
2,000,000
1,851,943
1,820,000
1,650,274
1,155,000
760,000
330,100
225,180
220,000
182,000
151,707
140,000
120,000
110,680
108,270
107,110
48,046,265
9,660,846
57,707,111
49.36%
6.42%
4.85%
3.71%
3.47%
3.21%
3.16%
2.86%
2.00%
1.32%
0.57%
0.39%
0.38%
0.32%
0.26%
0.24%
0.21%
0.19%
0.19%
0.19%
83.26%
16.74%
100.00%
Substantial shareholders
The number of shares held by substantial shareholders and their associates, as advised in substantial holder notices given
to the Company, are set out below:
Shareholder
CVC Limited
McNeil Nominees Pty. Ltd.
Distribution of equity security holders
Category
1 – 1000
1,001 – 5,000
5001 – 10,000
10,001 – 50,000
50,001 – 100,000
100,001 and over
Shares per
notice
28,472,046
3,702,155
Number of
holders
99
731
246
173
28
21
1,298
The number of shareholders holding less than a marketable parcel of ordinary shares is 649.
65
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Australia
59-61 Qantas Drive, Eagle Farm
Queensland 4009
New Zealand
10a Orbit Drive, Rosedale
North Shore City 0632
Phone: 1300 CELLNET (235 563)
www.cellnet.com.au
Phone: 0800 CELLNET (235 563)
www.cellnet.co.nz