Australia | 59-61 Qantas Drive | Eagle Farm | QLD | 4009
1300 CELLNET (235 563) | www.cellnet.com.au
New Zealand | 10a Orbit Drive | Rosedale | Auckland | 0632
0800 CELLNET (235 563) | www.cellnet.co.nz
2012 2013
AnnualReport
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 Operating segments
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 liabilities – trade and other payables
15 Current and non-current liabilities – provisions
16 Share-based payments
17 Financial instruments
18 Commitments and contingencies
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 Dividends paid and proposed
28 Auditors remuneration
29 Cash flow statement reconciliation
30 Business combination
31 Intangible assets
32 Interest bearing loans and borrowings
Directors’ declaration
Independent auditors’ report
Corporate Governance Statement
ASX Additional Information
Page
3
4
20
21
22
23
24
24
24
38
42
43
43
44
46
47
47
48
48
49
50
50
51
53
54
54
54
55
56
57
58
58
59
60
61
62
62
65
65
66
67
69
72
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: 1300 554 474
Solicitors
Thomsons Lawyers
Level 16 Waterford Place
1 Eagle Street, Brisbane QLD 4000
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
Directors’ Report
Your Directors submit their report for the year ended 30 June 2013.
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), Executive Director of CVC Limited (ASX code: CVC), Non-Executive Director of Villa
World Group (ASX code: VLW). He held a prior role as Non Executive Director of Lonestar Resources (ASX code: LNR) from
which he resigned 29 March 2013.
Mel Brookman
(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. Member of Audit and Risk Management Committee.
Mr. Brookman held a prior role as a Non Executive Director of Mnet Group (ASX code: MNZ) from which he resigned on 27 May
2013.
Elliott 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). Chairman of the Audit and Risk Management Committee.
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.
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 (ii)
(i) Resigned 25 July 2012
(ii) Appointed 25 July 2012
Number of ordinary
shares
Number of restricted
shares
Number of options
-
-
-
-
-
-
-
-
-
400,000
-
-
4
Cellnet Group Limited and its consolidated entities
Financial Report
Directors’ Report (continued)
Company Secretary
Chris Barnes
B. Acc, CPA
(Company Secretary and General Manager – 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. Mr. Barnes was the Financial Controller for the
Company prior to his appointment as a General Manager on 1 February 2013.
Dividends
No dividends were declared and paid in the current year.
Principal activities
The principal activities during the year of the entities within the consolidated entity were:
- 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.
The Company completed the sale of its online business segment comprising of OYT Pty Ltd, Buyii Pty Ltd, Cellnet Online Pty Ltd
in the current year at a profit of $38,000.
Three fully owned subsidiaries namely Comms Plus Marketing Pty Ltd, VME Systems Pty Ltd, Michael Hornsby and Associates
Pty Ltd were deregistered on 12 June 2013. These companies have been dormant and the deregistration does not affect the
nature of the Company’s principal activities.
Other than the divestment from online business segment, there has been no material change to the nature of these activities
during the year.
Operating and financial review
The 2013 year has been a year of refocus and consolidation for Cellnet. Without the distractions of non-core activities which
have negatively impacted the business in recent years, the management team has been able to dedicate its energies to
reshaping the core retail distribution business into one which provides existing and new customers with quality products and
services in the most efficient manner.
Key customer acquisitions were made throughout the year which contributed to a strong rise in revenues. Sales from continuing
operations of the consolidated entity for the period totalled $74.8 million (2012: $61.6 million). This increase of $13.2 million or
21.4% is encouraging given the soft retail conditions.
Management implemented a company-wide restructure in the second half of the financial year. The non-recurring costs
associated with the implementation of this restructure totalled approximately $380,000. The benefits accruing from the
restructuring are forecast to materialise in the 2014 financial year.
The business generated a pre tax net profit from continuing operations of $911,000 compared with $1,334,000 from the prior
corresponding period. This result is very encouraging considering the pre-tax profit achieved in 2012 included increased interest
revenue of $801,000. If the interest revenue is excluded, real business operational earnings from the prior period would have
amounted to $533,000.
In March 2013 the consolidated entity acquired the business of Stuff Products Pty Ltd, a synergistic Brisbane based distributor of
mobile phone and tablet fashion accessories.
5
Cellnet Group Limited and its consolidated entities
Financial Report
Directors’ Report (continued)
Following the company wide restructure implemented in the second half of the 2013 financial year the company now has a cost
base that is both sustainable and adequate to support the anticipated sales growth and to generate acceptable levels of
profitability.
Significant changes in the state of affairs
During the year the consolidated entity acquired the business of Stuff Products Pty Ltd. Apart from this acquisition there has
been no other significant changes in the state of affairs of the consolidated entity.
Significant events after balance date
There have been no matters or circumstances that have arisen since the end of the financial year which have 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 years.
Likely developments
In respect of future 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.
Share options
In the current year, no options (2012: 3,300,000) were awarded to key management personnel (KMP). The existing 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
had been exercised as at 30 June 2013. For further details, please refer to note 16(c).
Indemnification and insurance of officers
Indemnification
The Company has agreed to indemnify the current and former Directors and Company Secretaries 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
E. Kaplan
Committee membership
Board
10
10
10
1
9
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
E. Kaplan (appointed 25 Jul 2012) (Chairman)
M. Brookman
A. Beard
S. Smith (resigned 25 July 2012)
Remuneration
M. Brookman (Chairman)
A. Beard
S. Smith (resigned 25 July 2012)
E. Kaplan (appointed 25 July 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
Consolidated
2013
$
2012
$
11,008
10,403
7
Cellnet Group Limited and its consolidated entities
Financial Report
Directors’ Report (continued)
Rounding
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.
Auditor’s independence declaration
The Auditor’s independence declaration is set out on page 9 and forms part of the Directors’ report for the financial year ended
30 June 2013.
8
Cellnet Group Limited and its consolidated entities
Financial Report
Directors’ Report (continued)
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 2013 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) of the parent.
Remuneration report approval at FY12 AGM
The FY12 remuneration report received positive shareholder support at the FY12 AGM with a vote of 98% in favour.
For the purposes of this report, the term “executive” includes the 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
E. Kaplan
(ii) Executives
Chairman (Non-Executive)
Director (Executive)
Managing Director and Joint Company Secretary – resigned 25 July 2012
Director (Non-Executive) - appointed 25 July 2012
C. Barnes
D. Clark
J. Phua
C. Kingshott
M. Wallace
General Manager and Company Secretary - appointed 9 March 2011
General Manager - New Zealand
General Manager Product Development & Supply Chain – resigned 26 July 2012
Director of Business Development - appointed 19 July 2013
General Manager Retail Sales – resigned 18 March 2013
10
Cellnet Group Limited and its consolidated entities
Financial Report
Directors’ Report (continued)
Remuneration Report (audited) (continued)
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.
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
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;
provides strong linkage between the 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.
11
Cellnet Group Limited and its consolidated entities
Financial Report
Directors’ Report (continued)
Remuneration Report (audited) (continued)
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.
5. Executive remuneration arrangements and the link to company performance
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 (KPI’s) 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; and
• Customer service; and
• Leadership/team contribution
General Manager
General Manager 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 bi-annual basis, after consideration of performance against KPI’s the General Manager, in line with his responsibilities,
determines 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 General Manager.
12
Cellnet Group Limited and its consolidated entities
Financial Report
Directors’ Report (continued)
Remuneration Report (audited) (continued)
5.3 STI bonus (continued)
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. The following table outlines the proportion of maximum STI that was earned and forfeited on relation to the 2013
financial year.
Name
C. Barnes
D. Clark
C. Kingshott (Appointed on 19.03.2013)
J. Phua (resigned 26.07.2012)
M. Wallace (Resigned on 18.03.2013)
Proportion of maximum STI
earned in FY13
Proportion of maximum STI
forfeited in FY13
100%
100%
N/A
0%
75%
0%
0%
N/A
0%
25%
STI awards for 2012 and 2013 financial years
For the 2013 financial year, a total payment of $90,706 was made which represents 86.3% 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 2013 and
2014 financial years. The forfeitures amounted to $14,468. 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.
5.4 LTIs
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 on 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 option 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 no
options issued in the current year to either directors or KMP (2012: 3,300,000).
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 on 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 (2012: nil).
13
Cellnet Group Limited and its consolidated entities
Financial Report
Directors’ Report (continued)
Remuneration Report (audited) (continued)
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 2013 short-term incentive.
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
2013
2012
2011
2010
2009
$962,000
-
-
-
78
($2,639,000)
($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
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.
14
Cellnet Group Limited and its consolidated entities
Financial Report
Directors’ Report (continued)
Remuneration Report (audited) (continued)
6. Executive contractual arrangements (continued)
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. Under the terms of issue, Mr Smith is required to forfeit the shares by transferring
them to the company. Mr Smith has agreed to the forfeiture of options and cancellation of these shares under the terms
and conditions and has no outstanding liability to the Company. The cancellation was effected by an ordinary resolution
of shareholders passed on 20 November 2012 under section 258D of Corporations Acts 2001.
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
3 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
Payment applicable to outgoing executives:
-
Julian Phua, General Manager Product Development and Supply Chain resigned from his position on 26 July 2012.
Mr Phua received a final payment of $70,194 which is equated to 3 months and 8 weeks of his salary at the date of
his resignation.
- Michael Wallace, General Manager Sales resigned from his position on 18 March 2013. Mr Wallace received a final
payment of $40,000 which equated to 3 months of his normal salary at the date of his resignation.
15
Cellnet Group Limited and its consolidated entities
Financial Report
Directors’ 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
$
Non-executive Directors
A. Beard (i)
M. Brookman (iii)
(Appointed 25.07.12)
E. Kaplan (ii)
(Appointed 25.07.12)
Total non-executive directors
Executive Director
M. Brookman (iii)
(Appointed 25.07.12)
S. Smith
(Resigned 25.07.12)
Year
2013
2012
2013
-
-
-
2012
50,000
2013
2012
2013
-
-
-
2012
50,000
2013
252,083
2012
-
2013
20,802
-
-
-
-
-
-
-
-
-
-
-
2012
285,046
27,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Post
Employment
Superannuation
benefits
$
-
-
-
-
-
-
-
-
-
-
4,693
22,375
Long-term benefits
Share –based
payment
% performance
related
Cash
Incentives
$
Long Service
Leave
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Termination/
Resignation
payments
$
-
-
-
-
-
-
-
-
-
-
$
-
-
-
1,354
-
-
-
1,354
2,095
-
(212,332)
275,000
82,703
-
Total
$
-
-
-
-
-
-
51,354
2.64
-
-
-
-
-
-
51,354
2.64
254,178
-
88,163
417,624
0.82
-
(240.84)
26.39
i During the financial year the Company paid management fees to CVC Managers Pty Limited totalling $54,500 in relation to director’s services performed by Mr A Beard.
ii During the financial year the Company paid management fees to CVC Managers Pty Limited totalling $50,000 in relation to director’s services performed by Mr E Kaplan.
iii Mr Brookman was appointed as an executive director 25 July 2012. Prior to this date and for the 2013 financial year he acted as a non executive director. For the 2012 financial year Mr Brookman acted as a
non executive director.
16
Cellnet Group Limited and its consolidated entities
Financial Report
Directors’ Report (continued)
Remuneration Report (audited) (continued)
6.1 Directors’ and executives officers, remuneration (continued)
Short-term
Post Employment
Long-term benefits
Salary &
fees
$
STI cash
bonus
$
Motor
Vehicle
allowances
$
Non
monetary
benefits
$
Superannuation
benefits
$
Cash
Incentives
$
Long Service
Leave
$
Share –based
payment
$
Termination/
/Retention
payments
$
Other KMP
C. Barnes
D. Clark
J. Laun #
C. Kingshott
(Appointed on 19.03.13)
J. Phua
(Resigned on 26.07.12)
B. Watts #
(Resigned on 30.06.13)
M. Wallace
(Resigned on 18.03.13)
E. Schillinger
(Resigned on 31.10.11 )
Total executive and KMP
Totals
Year
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
# Do not qualify as KMP for the 2013 financial year.
156,475
12,500
124,624
25,000
-
-
121,091
32,674
105,074
34,988
12,253
10,406
-
-
122,944
25,000
68,700
-
11,275
-
-
-
164,065
60,000
-
-
132,000
33,850
137,248
45,532
153,333
62,909
-
-
-
-
-
-
-
-
-
-
-
-
-
35,000
9,738
5,000
767,674
90,706
12,253
1,122,086
278,985
15,406
767,674
90,706
12,253
1,172,086
278,985
15,406
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
16,175
13,916
3,113
-
-
13,579
-
-
6,674
20,188
-
14,926
17,078
16,953
-
4,476
47,733
106,413
47,733
106,413
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,931
-
-
-
-
-
-
24,152
-
-
12,187
24,152
15,118
24,152
15,118
%
performance
related
7.79
15.98
17.58
23.94
-
15.89
-
-
-
24.98
-
18.72
17.24
27.40
-
14.67
Total
$
187,245
164,894
197,774
151,822
-
165,808
68,700
-
88,143
245,607
-
180,776
264,010
234,549
-
66,401
2,095
1,354
2,095
1,354
-
1,354
-
-
-
1,354
-
-
-
1,354
-
-
-
-
26,548
-
-
-
-
-
70,194
-
-
-
40,000
-
-
-
(206,047)
411,742
1,148,213
(10.05)
89,473
-
1,627,481
22.64
(206,047)
411,742
1,148,213
(10.05)
90,827
-
1,678,835
22.03
17
Cellnet Group Limited and its consolidated entities
Financial Report
Directors’ Report (continued)
Remuneration report (audited) (continued)
7. Additional statutory disclosures
This section sets out the additional disclosures required under the Corporations Act 2001. The table below discloses the share options granted to executives as
remuneration during the current financial year as well as the number of options that vested or lapsed during the year. Share options do not carry any voting or
dividend rights and can be exercised once the vesting conditions have been met until their expiry date.
Options awarded and vested during the year
Executive Directors
M Brookman
S Smith
Other key
management
personnel
C Barnes
D Clark
J Laun #
J Phua
M Wallace
Year
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
Options
awarded
during the
year
No.
Award date
Fair
value of
option at
award
date ($)
Exercise
price ($)
Expiry date
Vesting date
No. vested
during year
No. lapsed during
year
-
400,000
-
900,000
-
21 Oct 2011
-
21 Oct 2011
-
$0.02
-
$0.02
-
21 Oct 2013
-
21 Oct 2013
-
0.36
-
0.36
-
21 Oct 2014
-
21 Oct 2014
-
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
-
0.36
-
0.36
-
0.36
-
0.36
-
-
-
21 Oct 2014
-
21 Oct 2014
-
21 Oct 2014
-
21 Oct 2014
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
900,0001
-
-
-
-
-
-
-
400,0001
-
400,0001
-
1. Lapses represent forfeitures on resignation.
# Does not qualify as KMP for the 2013 financial year.
18
Cellnet Group Limited and its consolidated entities
Cellnet Group Limited and its consolidated entities
Financial Report
Report (continued)
Directors’ Report (continued)
udited) (continued)
Remuneration report (audited) (continued)
7. Additional statutory disclosures (continued)
7. Additional statutory disclosures (continued)
Value of options lapsed by forfeiture
lapsed by forfeiture during the year
Value of
options
lapsed
by
forfeiture
during
the year
$
-
18,0001
-
-
-
8,0001
8,0001
-
-
-
-
-
-
-
Remuneration
Remuneration
consisting of
share options
for the year
%
0.82
(240.84)
1.12
1.05
1.25
-
-
Value of
Value of
options
options
granted
granted
during the
during the
year
year
$
Value of
options
exercised
during the
year
$
M Brookman
S Smith
C Barnes
D Clark
J Laun
J Phua
M Wallace
-
-
-
-
-
-
-
1. Lapses represent forfeiture on resignation.
forfeiture on resignation.
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 20 August 2013
August 2013
19
Cellnet Group Limited and its consolidated entities
Financial Report
Statement of financial position
As at 30 June 2013
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)
Intangible assets
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Interest-bearing loans and borrowings
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
Consolidated
Note
2013
$000
2012
$000
9
10
11
12
21
13
7(c)
31
14
15
32
21
15
2,141
11,932
8,991
4
23,068
-
23,068
858
2,855
150
3,863
4,623
10,951
5,194
17
20,785
532
21,317
1,213
2,661
-
3,874
26,931
25,191
10,592
406
474
11,472
9,821
543
-
10,364
-
11,472
127
10,491
467
467
11,939
14,992
412
412
10,903
14,288
26(a)
26(b)
31,699
494
(17,201)
14,992
31,699
752
(18,163)
14,288
The above statement of financial position should be read in conjunction with the accompanying notes.
20
Cellnet Group Limited and its consolidated entities
Financial Report
Statement of comprehensive income
For the year ended 30 June 2013
Continuing operations
Sales of goods
Rendering of services
Revenue
Cost of sales
Gross Profit
Other income
Administrative expenses
Bad debts expenses
Distribution expenses
Financial costs
Net redundancy costs
Other expenses
Sales and marketing 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
Items that may be reclassified subsequently to profit or
loss
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
2013
$000
2012
$000
74,840
1,631
76,471
(59,565)
16,906
61,633
1,662
63,295
(47,610)
16,532
6(d)
5
355
1,790
6(a)
7(b)
21
(7,839)
(64)
(3,098)
(3)
(380)
(383)
(4,583)
911
180
1,091
(7,739)
(63)
(2,609)
-
-
(506)
(5,224)
1,334
(93)
1,241
(129)
962
(1,729)
(488)
(54)
908
(39)
(527)
8
8
8
8
$0.02
$0.02
$0.02
$0.02
$0.02
$0.02
($0.01)
($0.01)
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
21
Cellnet Group Limited and its consolidated entities
Financial Report
Statement of changes in equity
Share
capital
Reserve
for own
shares
Foreign
Currency
translation
reserve
Share based
payment
reserve
Accumulated
losses
Total
equity
$000
$000
$000
$000
$000
$000
At 1 July 2012
31,699
(25)
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
Share capital reduction
Balance as at 30 June
2013
At 1 July 2011
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
-
-
-
-
-
-
-
-
31,699
37,861
-
-
-
-
-
(854)
-
(5,308)
-
-
-
-
-
-
-
-
(25)
(25)
-
-
-
-
-
-
-
-
(3)
-
(54)
(54)
-
-
-
-
-
(57)
36
-
(39)
(39)
-
-
-
-
-
780
(18,163)
14,288
-
-
-
-
-
-
(204)
-
962
-
962
962
(54)
908
-
-
-
-
-
-
-
-
(204)
-
576
(17,201)
14,992
689
(9,763)
28,798
-
-
-
-
-
-
91
-
(488)
-
(488)
(488)
(39)
(527)
-
(7,912)
-
-
-
-
(7,912)
(854)
91
(5,308)
31,699
(25)
(3)
780
(18,163)
14,288
The above statement of changes in equity should be read in conjunction with the accompanying notes.
22
Cellnet Group Limited and its consolidated entities
Financial Report
Statement of cash flows
For the year ended 30 June 2013
Consolidated
Note
2013
$000
2012
$000
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest paid
Net income taxes received
Net cash flows used in operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Interest received
Purchase of property, plant and equipment
Acquisition of subsidiary
Acquisition of assets through a business combination
Net inflow from sale of discontinued operation, net of cash
disposed
Net cash flows from/(used in) investing activities
Cash flows from financing activities
Share buy back
Return of capital
Dividend
Net cash flows used in financing activities
Net 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
5
13
30
21
20
26(a)
27(a)
9
The above statement of cash flows should be read in conjunction with the accompanying notes.
79,460
(81,868)
(3)
-
(2,411)
-
46
(29)
-
(300)
55
(228)
-
-
-
-
(2,639)
(28)
4,808
2,141
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
23
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 2013 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 20 August 2013.
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
the Corporations Act 2001, Australian Accounting Standards and other authoritative
requirements of
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 2012.
►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] 1 July 2012.
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)
(ii) Accounting standards and interpretations issued but not yet effective
The interpretation of the standards is described 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.
Impact on the consolidated financial report – minimal. Application date of standard 1 January 2015. Application
date for the consolidated entity 1 July 2015.
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.
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 uses the principle of control in AASB 10 to define joint control and removes the option to choose to
account for jointly controlled entities using the proportionate consolidation method or the equity method.
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.
Impact on the consolidated financial report – minimal. Application date of standard 1 January 2013. Application date
for the consolidated entity 1 July 2013.
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.
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)
(ii) Accounting standards and interpretations issued but not yet effective (continued)
AASB 119 Employee benefits
The main change introduced by this standard is to revise the accounting for defined benefit plans. The amendment
removes the options for accounting for the liability, and requires that the liabilities arising from such plans is
recognised in full with actuarial gains and losses being recognised in other comprehensive income.
Impact on the consolidated financial report – minimal. Application date of standard 1 January 2013. Application date
for the consolidated entity 1 July 2013.
AASB 2012-2 Amendments to Australian Accounting Standards - Disclosures - offsetting financial assets
and financial liabilities
AASB 2012-2 principally amends AASB 7 Financial Instruments: Disclosures to require disclosure of information that
will enable users of an entity's financial statements to evaluate the effect or potential effect of netting arrangements,
including rights of set-off associated with the entity's recognised financial assets and recognised financial liabilities,
on the entity's financial position.
Impact on the consolidated financial report – minimal. Application date of standard 1 January 2013. Application date
for the consolidated entity 1 July 2013.
AASB 2012-5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009-
2011 Cycle
AASB 2012-5 makes amendments resulting from the 2009-2011 Annual Improvements Cycle.
Impact on the consolidated financial report – minimal. Application date of standard 1 January 2013. Application date
for the consolidated entity 1 July 2013.
AASB 2012-9 Amendment to AASB 1048 arising from the withdrawal of Australian Interpretation 1039
AASB 2012-9 amends AASB 1048 Interpretation of Standards to evidence the withdrawal of Australian Interpretation
1039 Substantive Enactment of Major Tax Bills in Australia.
Impact on the consolidated financial report – minimal. Application date of standard 1 January 2013. Application date
for the consolidated entity 1 July 2013.
AASB 2012-10 Amendments to Australian Accounting Standards – Transition Guidance and Other
Amendments
AASB 2012-10 amends the following standards:
► AASB 10 Consolidation and related standards.
► AASB 10 and related standards to defer the mandatory application by not-for-profit entities to annual reporting
periods beginning on or after 1 January 2014.
► Various editorial amendments to a range of Australian Accounting Standards and to Interpretation 12 Service
Concession Arrangements, to reflect changes made to the text of IFRSs by the IASB.
Impact on the consolidated financial report – minimal. Application date of standard 1 January 2013. Application date
for the consolidated entity 1 July 2013.
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)
(ii) Accounting standards and interpretations issued but not yet effective (continued)
AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management
Personnel Disclosure Requirements [AASB 124]
This amendment deletes from AASB 124 individual key management personnel disclosure requirements for
disclosing entities that are not companies.
Impact on the consolidated financial report – minimal. Application date of standard 1 July 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.
Impact on the consolidated financial report – minimal. Application date of standard 1 July 2013. Application date for
the consolidated entity 1 July 2013.
(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.
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.
27
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(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 the
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.
(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.
28
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
Intangible assets
(f)
(i) Goodwill
Business combinations
Subsequent to 1 July 2009
Goodwill acquired in a business combination is initially measured at cost of the business combination being the
excess of the consideration transferred over the fair value of the group’s net identifiable net assets 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.
(ii) 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.
30
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(j) Impairment (continued)
(ii) Derecognition of financial assets (continued)
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.
(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.
31
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(m) Provisions and employee benefits (continued)
(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.
(iv) Contingent consideration
Contingent consideration, resulting from business combinations, is valued at fair value at the acquisition date as part
of the business combination. Subsequent changes to the fair value of the contingent consideration that is deemed to
be an asset or liability will be recognised in accordance with AASB 139 either in profit or loss or as a change to other
comprehensive income.
(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 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).
(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.
32
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(q) Expenses (continued)
(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.
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.
33
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(r) Income tax (continued)
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.
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.
34
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(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.
35
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 General Manager. 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.
36
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(y) Business combinations (continued)
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.
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) 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.
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.
37
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
2. Significant accounting policies (continued)
(z) Financial instruments – initial recognition and subsequent measurement (continued)
(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.
(v) Borrowing costs
All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and
other costs that an entity incurs in connection with the borrowing of funds.
3. Financial risk management objectives and policies
The consolidated entity’s principal financial instruments comprise of receivables, payables, cash and short-term
deposits and interest bearing loans.
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.
38
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
3. Financial risk management objectives and policies (continued)
Interest rate risk
The consolidated entity’s exposure to market interest rates relates solely to the consolidated entities short-term cash
deposits and interest bearing loans and borrowings as disclosed in note 9 and 32.
Financial assets
Cash and cash equivalents
Interest bearing loans and borrowings
Note
9
32
2013
$000
2012
$000
2,141
474
2,615
4,808
-
4,808
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 2013, if interest rates had moved as illustrated in the table below, with all other variables held constant,
post tax profit and other comprehensive income would have been affected as follows:
Consolidated
+1% (100 basis points)
-0.5% (50 basis points)
Post tax profit
higher / (lower)
Other comprehensive
income
higher / (lower)
2013
$000
2012
$000
2013
$000
2012
$000
13
(6)
43
(21)
-
-
-
-
The movements in profit are due to higher / lower cash receipts from variable rate cash balances. The assumed
reasonably possible interest rate movements are based on an economic forecaster’s expectations.
Foreign currency risk
The consolidated entity is exposed to foreign currency risk on sales and purchases that are denominated in a
currency other than Australian dollars. The currencies giving rise to risk are primarily U.S dollars, Euros, and New
Zealand dollars.
The consolidated entity enters into forward foreign exchange contracts to hedge certain anticipated purchase
commitments denominated in foreign currencies (principally U.S dollars). The terms of these commitments are no
more than 45 days. It is the consolidated entity’s policy not to enter into forward contracts until a firm commitment is
in place.
The consolidated entity has a subsidiary based in New Zealand and all transactions for this subsidiary are
denominated in New Zealand dollars. There is currently no hedge in place to mitigate the foreign currency risk for
this subsidiary.
39
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
3. Financial risk management objectives and policies (continued)
Entering into forward foreign currency contracts minimises the risk of sharp fluctuations in foreign exchange rates
and allows for better cash flow management in relation to paying international suppliers. At balance date, the
consolidated entity had the following exposure to US$ foreign currency that is not designated as cash flow hedges:
Financial assets
Trade and other receivables
Financial liabilities
Trade and other payables
Net exposure
2013
$000
2012
$000
1,801
1,801
(3,027)
(3,027)
(1,226)
1,684
1,684
(4,319)
(4,319)
(2,635)
At 30 June 2013, 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:
Post tax profit
higher / (lower)
2013
$000
2012
$000
Other comprehensive income
higher / (lower)
2013
$000
2012
$000
179
(761)
282
(268)
-
-
-
-
Consolidated
AUD / USD +10% (2012: +10%)
AUD / USD -10% (2012: -10%)
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.
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 $5,000, whichever is greater.
40
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
3. Financial risk management objectives and policies (continued)
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.
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
Contingent consideration
Interest bearing loans and
borrowings
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
2013
6 – 12
months
1 – 5
years
More than 5
years
9
10
14
15
32
2,141
11,932
14,073
2,141
11,932
14,073
(10,592)
(100)
(10,592)
(100)
(474)
(474)
(11,166)
(11,166)
2,907
2,907
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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
-
-
-
-
-
-
41
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 General Manager (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 General Manager at least on a monthly basis. However, for the 2013 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.
(i) Segment revenue reconciliation to the statement of comprehensive income.
Total segment revenue
Other revenue from continuing activities
Total revenue
2013
$000
74,840
1,631
76,471
2012
$000
61,633
1,662
63,295
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.
Australia
New Zealand
Total revenue
2013
$000
57,851
18,620
76,471
2012
$000
51,078
12,217
63,295
(ii) Segment non-current assets reconciliation to the statement of financial position.
Australia
New Zealand
Total non-current assets
2013
$000
2012
$000
3,779
84
3,863
3,761
113
3,874
Non-current assets for this purpose consist of property, plant and equipment, intangible assets and deferred tax
assets.
42
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
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
Total other expenses
(b) Employee benefits expense
Wages and salaries
Superannuation expense
Reversal of 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
Consolidated
2013
$000
2012
$000
46
309
355
847
943
1,790
Consolidated
2013
$000
2012
$000
379
379
4
383
483
483
23
506
Consolidated
2013
$000
2012
$000
8,450
550
(204)
27
8,823
7,866
581
91
109
8,647
Consolidated
2013
$000
2012
$000
921
913
Consolidated
2013
$000
2012
$000
58,251
46,864
1,314
59,565
746
47,610
43
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
Consolidated
2013
$000
2012
$000
98
98
(10)
(10)
(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%
(2012: 30%)
Adjustments in respect of current income tax of
previous years
Non-deductible expenses
Entertainment
Effect of lower tax rate in New Zealand
(Recognition) / non-recognition of tax losses
Losses used to reduce deferred tax asset
Aggregate income tax expense is attributable to:
Continuing operations
Discontinued operations
911
(47)
864
1,334
(1,812)
(478)
(259)
(143)
239
61
9
8
-
40
180
(82)
98
36
27
12
-
58
-
(93)
83
(10)
44
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
2013
$000
Consolidated
2013
$000
2012
$000
Current
income tax
Deferred
income tax
Current
income tax
Opening balance
Charged to income / (expense)
Charged to equity
Acquisition/Disposal
Payments/ (refunds)
Closing balance
Amounts recognised in the statement of
financial position:
Deferred tax asset
Deferred tax liability
17
(13)
-
-
4
-
-
-
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
Deferred tax asset – continuing operations
Deferred tax asset – discontinued operations
Deferred tax asset net
2,744
111
-
-
-
2,855
2,913
(58)
2,855
-
819
2,036
2,855
(58)
2,913
-
2,855
2012
$000
Deferred
income
tax
94
-
2,754
(10)
(77)
17
-
2,744
-
-
-
2,833
(89)
2,744
-
668
2,076
2,744
(89)
2,750
83
2,744
As at 30 June 2013, the Company has a deferred tax asset relating to timing differences and tax losses arising from
prior years totalling $2,855,000 (2012: $2,744,000). Management has recognised deferred tax asset on the basis
that achievement of profit before tax within the next 3-5 years are probable. Accordingly, a deferred tax asset
relating to unused tax losses of between $2,000,000 and $3,000,000 is considered appropriate.
45
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
7. Income Tax (continued)
(d) Tax losses
The consolidated entity has Australian tax losses for which no deferred tax asset is recognised on the statement of
financial position of $18,296,519 (2012: $18,526,716) 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 2013 (2012: $Nil).
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
Loss from discontinued operations
Net profit attributable to ordinary equity holders
For diluted earnings per share:
Profit / from continuing operations
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
2013
$000
2012
$000
1,091
(129)
962
1,091
(129)
962
1,241
(1,729)
(488)
1,241
(1,729)
(488)
Consolidated
2013
000s
2012
000s
56,462
60,211
effect of dilution
56,462
60,211
Restricted shares are considered non-dilutive where the current share price is lower than the exercise price.
46
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
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
2013
$000
2012
$000
1,791
-
350
2,141
-
2,141
4,273
-
350
4,623
185
4,808
Cash at banks earns interest at floating rates based on daily bank deposit rates. Funds held by banks represent
monies pledged to fulfil financial guarantee collateral requirements.
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
(a) Allowance for impairment loss
Consolidated
2013
$000
2012
$000
10,572
(92)
10,480
1,452
11,932
10,290
(87)
10,203
748
10,951
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
2013
$000
2012
$000
87
69
-
(64)
92
624
(474)
-
(63)
87
47
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
10. Current assets – trade and other receivables (continued)
At 30 June, the ageing analysis of trade receivables is as follows:
Total
0-30 days
31-60 days
$000
$000
$000
11,932
10,290
9,258
8,061
940
1,067
61-90 days
PDNI*
$000
+ 91 days
PDNI*
$000
+91 days
CI*
$000
245
297
1,397
778
92
87
2013 Consolidated
2012 Consolidated
* Past due not impaired (PDNI)
* Considered impaired (CI)
Receivables past due but not considered impaired are $1,642,000 (2012: $1,075,000). 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. Note 2(g) details how the Company manages and measures credit quality of trade receivables that are
neither past due nor impaired.
11. Current assets – inventories
Stock on hand
Less: provision for obsolescence
Total inventories at the lower of cost and net
realisable value
Consolidated
2013
$000
2012
$000
10,648
(1,657)
8,991
6,017
(823)
5,194
(a)
Inventory expense
Inventories recognised in the cost of sales during the year ended 30 June 2013 totalled $50,971,000 (2012:
$42,785,000). 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 $4,000 (2012: $17,000) 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.
48
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 2013
At 1 July 2012 net of accumulated
depreciation and impairment
Additions
Write-offs
Depreciation charge for the year
At 30 June 2013 net of accumulated
depreciation and impairment
At 30 June 2013
Cost or fair value
Accumulated depreciation and
impairment
Net carrying amount
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 2012 net of accumulated
depreciation and impairment
At 30 June 2012
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
267
-
-
(80)
187
941
29
(5)
(297)
668
5
-
-
(2)
3
1,213
29
(5)
(379)
858
728
8,887
2,135
11,750
(541)
187
(8,219)
668
(2,132)
(10,892)
3
858
Consolidated
Leasehold
improvements
$000
Plant &
Equipment
$000
Plant &
Equipment
under lease
$000
Total
$000
334
60
(32)
(95)
267
1,176
163
(12)
(386)
941
7
-
-
(2)
5
1,517
223
(44)
(483)
1,213
812
9,062
2,135
12,009
(545)
267
(8,121)
941
(2,130)
(10,796)
5
1,213
49
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
14. Current liabilities – trade and other payables
Current
Trade payables
Other payables and accrued expenses
Consolidated
2013
$000
2012
$000
7,493
3,099
10,592
6,532
3,289
9,821
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 (1)
Liability for annual leave and employee provisions
Non-Current
Liability for long-service leave
Provision for contingent consideration (1)
(1) See the table below for movement during the year.
Consolidated
2013
$000
2012
$000
(2)
408
406
367
100
467
24
519
543
412
-
412
Consolidated
Provision for
fringe benefit tax
$000
Provision for
contingent
consideration
$000
At 1 July 2012
Acquisition through business combination (Note 31)
Arising during the year
Utilised
At 30 June 2013
24
-
(15)
(11)
(2)
-
100
100
(a) Nature and timing of provisions
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.
50
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
16. Share based payments
(a) Employee share bonus
No employee bonus shares were issued to employees during the current year or prior year.
2010 allocation
2,000,000 shares were issued to Stuart Smith on 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.
Under the terms of issue, Mr Smith is required to forfeit his Plan Shares by transferring them to the Company if the
Loan becomes repayable. On 25 July 2012, Mr Smith resigned as Chief Executive Officer and Executive Director of
Cellnet Group Limited and the Loan became repayable.
Mr Smith agreed to the forfeiture and cancellation of those shares under their terms and conditions of issue and has
no outstanding liability to the Company. In order to give effect to the forfeiture, these shares were required to be
cancelled by an ordinary resolution of shareholders under section 258D of the Corporations Act 2001. This
resolution was approved by shareholders at the annual general meeting held 19 November 2013.
(b) Long term incentive plan
Employee expenses
Note
Consolidated
2013
$000
2012
$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)
(212)
8
(204)
80
11
91
(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.
51
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 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:
2013
No. Options
Issued
2012
No. Options
Issued
Directors
S. Smith
M. Brookman
KMP
D. Clark
J. Laun
J. Phua
M. Wallace
C. Barnes
Total issued
-
-
-
-
-
-
-
-
-
-
900,000
400,000
1,300,000
400,000
400,000
400,000
400,000
400,000
2,000,000
3,300,000
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.
52
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)
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.
Opening balance
Granted during the year
Options vested
Options lapsed
Outstanding as at 30 June
2013
Number of
options
3,300,000
-
-
(1,700,000)
1,600,000
2013
WAEP
$
2012
Number of
options
2012
WAEP
$
0.36
0.36
0.36
-
3,300,000
-
-
3,300,000
-
0.36
-
-
0.36
The following table lists the inputs to the model used for the share based payments plan.
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Expected life (years)
Weighted average share price ($)
Model used
2012
30.00
65.00
3.90
2.00
0.25
Trinomial Lattice
The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the
options is indicative of future trends which may not necessarily be the actual outcome.
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).
Fair values
The fair values together with the carrying amounts shown in the statement of financial position are as follows:
Consolidated
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Note
9
10, 21
14, 21
Carrying amount
2013
$000
Fair value
2013
$000
Carrying amount
2012
$000
Fair value
2012
$000
2,141
11,932
(10,592)
3,481
2,141
11,932
(10,592)
3,481
4,808
11,013
(9,933)
5,888
4,808
11,013
(9,933)
5,888
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.
53
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
18. Commitments and contingencies
Commitments
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.
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
2013
$000
2012
$000
842
1,737
2,579
823
2,312
3,135
Contingencies
Recovery of an alleged outstanding debt relating to a freight consultancy agreement from 2006 has been
commenced against the company. The company intends to vigorously defend the claim and pursue recovery of any
costs associated with this action.
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
The consolidated entity has provided bank
guarantees in the normal course of business.
20. Share buy-back
Consolidated
2013
$000
2012
$000
350
350
350
350
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 2013, no shares were repurchased (2012: 3,579,643 shares, $854,000).
54
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
21. Discontinued operation
The company advised that on 8 June 2012 that it planned to exit the online business segment. The Company
completed the sale of OYT Pty Ltd, Buyii Pty Ltd, Cellnet Online Pty Ltd on 1 October 2012, 3 October 2012 and 9
April 2013 respectively for a total consideration of $112,000. The net cash flows of $55,000 generated by the sale
are in the Statement of cash flows as part of the cash flows from investing activities.
Results of the discontinued operations for the year are presented below:
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
Depreciation
Gain on disposal of discontinued operation
Loss before tax
Tax
Consolidated
2013
$000
2012
$000
561
(641)
(80)
-
-
-
-
-
-
-
(4)
38
(46)
(83)
1,266
(2,074)
(808)
(131)
(87)
(260)
(245)
(110)
(141)
(12)
(18)
-
(1,812)
83
Loss for the period from a discontinued operation
(129)
(1,729)
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
-
-
-
-
-
-
-
-
185
62
184
83
18
532
(127)
405
55
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
21. Discontinued operation (continued)
Cash inflow on sale of discontinued operation
Consideration received
Net cash disposed of with the discontinued operation
Net cash inflow
Cash flows from discontinued operation
Net cash from operating activities
Net cash from (used in) discontinued operation
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
2013
$000
2012
$000
112
(57)
55
-
-
-
-
-
185
185
Consolidated
2013
2012
($0.002)
($0.002)
($0.029)
($0.029)
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 *
Country of
incorporation
Australia
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
% Equity interest
2013
2012
100
100
-
100
-
-
90
100
100
-
100
100
100
100
100
100
90
100
100
25
* Entity’s represent discontinued operations of which the businesses were sold in the current year.
# These companies were deregistered in the current year.
56
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
22. Related party disclosure (continued)
The following table provides the total amount of transactions which have been entered into with related parties
during the twelve month periods ending 30 June 2013 and 30 June 2012.
Sales to
related
parties
Services from
related
parties
$000
$000
Amounts
owed by
related
parties
$000
Amounts owed
to related
parties
$000
Entity with significant
influence over the
consolidated entity:
CVC Ltd
2013
2012
-
-
55
32
-
-
-
-
Entity with significant influence over the consolidated entity
CVC Ltd holds 51.11% (2012: 49.34%) of the ordinary shares in Cellnet Group Limited.
Terms and conditions of transactions with related parties
The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length
transactions.
Transactions with entity with significant influence over the group.
A CVC Ltd’s consultant was engaged on a work placement basis to provide business advice to Cellnet Group
Limited. The engagement was for the period 1 July 2013 to 31 October 2013.
23. Key management personnel
(a) Key management personnel remuneration
Short-term employee benefits
Post-employment benefits
Long term benefits
Termination / retention benefits
Share-based payment benefits
Total compensation
Consolidated
2013
$000
2012
$000
870
48
24
412
(206)
1,148
1,416
106
15
-
90
1,627
(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).
57
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
The movement during the reporting period in the number of ordinary shares in Cellnet Group Limited held directly,
indirectly or beneficially, by each key management person and their related parties, is as follows:
Directors / KMP
Held at 1 July
2012
Purchases
Other acquisitions
/ disposals
Sales
Held at 30
June 2013
S. Smith (i)
(i) Resigned 25 July 2012
Directors / KMP
M. Brookman
S. Smith (A)
2,000,000
-
(2,000,000)
-
-
Held at 1 July
2011
1,851,943
2,000,000
Purchases
Other acquisitions
/ disposals
Sales
Held at 30
June 2012
-
-
(1,851,943)
-
-
-
-
2,000,000
(A) Received under Long Term Incentive Plan on 28 October 2009.
24. Subsequent events
There has been no subsequent event after the balance date.
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
2013
$000
2012
$000
17,979
21,590
9,525
9,992
31,699
(20,650)
(26)
575
11,598
2,796
2,796
16,218
18,238
8,828
9,241
31,699
(23,455)
(26)
797
8,997
4,900
4,900
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 2013.
58
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
Directors restricted shares cancelled
Share buy back
On issue at 30 June
Ordinary shares
Issued and fully paid
Consolidated
2013
No. of shares
2012
No. of shares
57,684,090
(2,000,000)
-
55,684,090
61,263,733
-
(3,579,643)
57,684,090
55,684,090
57,684,090
Fully paid ordinary shares carry one vote per share and carry the right to receive a dividend.
Ordinary shares on issue
Share buy back
Capital reduction (i)
Consolidated
2013
$000
2012
$000
31,699
-
-
31,699
37,861
(854)
(5,308)
31,699
(i) An equal reduction of share capital totalling $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) Reserves
Translation reserve
Reserve for own shares
Share based payment
Consolidated
2013
$000
2012
$000
(57)
(25)
576
494
(3)
(25)
780
752
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.
59
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
26. Contributed equity and reserve (continued)
(b) Reserves (continued)
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 2013 the consolidated entity held 107,110 of the
Company’s shares (2012: 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.
Share based payment
The share based payment reserve is used to recognise the value of equity-settled share based payments to KMP.
(c) 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 2013 and 2012 were as follows:
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:
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¢
Consolidated
2013
$000
2012
$000
14,992
26,925
55.7%
14,288
25,191
56.7%
Consolidated
2013
$000
2012
$000
-
-
-
-
-
614
918
610
5,770
7,912
60
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
27. Dividends paid and proposed (continued)
(b) Franking credit balance
The amount of franking credits available for the subsequent financial year are:
Franking account balance as at the end of the financial year at
30% (2012:30%)
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
Consolidated
2013
$000
2012
$000
586
3,980
-
-
586
-
(3,394)
586
-
586
-
586
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.
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 (2012: Nil). 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 (2012: nil) franking
credits from its Australian wholly-owned subsidiaries during the year.
28. Auditors remuneration
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
Other services in relation to the entity and any other entity in the
consolidated entity:
•
Tax compliance
Consolidated
2013
$
2012
$
101,553
100,000
11,008
112,561
10,403
110,403
61
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
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 on sale of property, plant & equipment
Gain on sale of intellectual property
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 used in operating activities
30. Business combination
Consolidated
2013
$000
2012
$000
962
(488)
379
1,314
(64)
-
(50)
(204)
(309)
(913)
(5,026)
13
(118)
1,128
477
(2,411)
501
649
(63)
108
-
91
(904)
(1,009)
(564)
77
10
319
40
(1,233)
Acquisition of Stuff Products Pty Ltd
On 28 March 2013 the consolidated entity entered into a purchase agreement whereby it acquired the business of
Stuff Products Pty Ltd, a synergistic Brisbane based distributor of mobile phone and tablet fashion accessories for a
consideration of $300,000. The Stuff Products transaction represented an opportunity for the consolidated entity to
gain access to new fashion centric brands that could be offered to both new and existing customers.
62
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
30. Business combination (continued)
Fair value recognised on acquisition date
The fair values of the identifiable assets and liabilities of Stuff Products Pty Ltd at the date of acquisition were
recognised on a provisional basis and were as follows:
Assets
Inventories
Liabilities
Contingent Consideration
15
Total Identifiable net assets at fair value
Identifiable intangibles arising on acquisition
31
Purchase consideration transferred
Cash flow on acquisition
Cash paid
Net cash flow on acquisition
Fair value
recognised on
acquisition
$000
250
250
(100)
(100)
150
150
300
(300)
(300)
From the date of the Stuff Products transaction, the business has contributed revenues of $305,000 and profit before
tax of $45,000. If the combination had been in place at the beginning of the year, revenues from continuing
operations would have been $77,985,000 and profit before tax of $1,191,000.
Contingent consideration
As part of the purchase agreement, a contingent consideration of $100,000 is payable to the seller should the
company achieve a profit contribution of $300,000. This condition is effective over a specified period ending on 27
September 2013.
At the acquisition date, a fair value of the contingent consideration was estimated to be $100,000. This was based
on management’s opinion that there was a 100% probability of the conditions being met.
This opinion remains unchanged on the balance date. As such contingent consideration is recognised at a fair value
of $100,000 at 30 June 2013.
Identifiable intangibles of $150,000 comprises the value of supplier contracts, customer relationships and expected
synergies arising from the acquisition that is anticipated to result from combining the operations of the acquiree and
the acquirer that do not qualify for separate recognition.
63
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
30. Business combination (continued)
Fair value on acquisition 30 June 2013
The table below details the fair value of net assets as at 30 June 2013.
Assets
Inventories
Identifiable intangible
Liabilities
Contingent Consideration
Total identifiable net assets at fair value
2013
$000
250
150
400
(100)
300
Sale and write off of OYT Pty Ltd
In the last financial year the consolidated entity acquired an interest in OYT Pty Ltd in two separate stages. On 13
July 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.
On 31 December 2012, the consolidated entity wrote-off the OYT Pty Ltd net assets totalling $54,000 subsequent to
the sale of its trading name for $20,000.
The table below details the comparative fair value of net assets as at 30 June 2013.
Assets
Cash and cash equivalent (Note 21)
Inventories (Note 21)
Inventories (Note 21)
Liabilities
Total identifiable net assets at fair value
2013
$000
2012
$000
-
-
-
-
-
-
14
18
1
33
-
33
64
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
31.
Intangible assets
Opening balance
Addition:
Continuing operations - identifiable intangibles (Note 30)
Discontinued operations - system development (Note 21)
Impairment:
Discontinued operations - system development (Note 21)
Closing balance
Consolidated
2013
$000
2012
$000
-
-
150
-
-
150
-
110
(110)
-
Addition during the year
The asset recognised during the year relates to identifiable intangibles arising through a business combination.
32.
Interest bearing loans and borrowings
Business finance
Interest Rate
Maturity
%
5.76
2 August 2013
2013
$000
474
474
2012
$000
-
-
$3,000,000 Business finance
This facility consists of three individual facilities, namely surrendered bills of lading, trade finance-imports and
special documentary import letters of credit. The combined limit of $3,000,000 applies across these individual
facilities. As at 30 June 2013, the company has drawn down $474,000 under its trade finance – imports facility.
This loan is matures at 2 August 2013 at which time the amount repayable is $476,000.
65
Cellnet Group Limited and its consolidated entities
Cellnet Group Limited and its consolidated entities
Financial Report
declaration
Directors’ declaration
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
and notes of the company are in accordance with the Corporations Act 2001
Corporations Act 2001, including:
i)
giving a true and fair view of the company’s financial position as at 30 June 201
giving a true and fair view of the
the year ended on that date; and
the year ended on that date; and
financial position as at 30 June 2011 and of their performance for
complying with Australian Accounting Standards and Corporations Regulations 2001;
ii) complying with Australian Accounting Standards and Corporations Regulations 2001;
complying with Australian Accounting Standards and Corporations Regulations 2001;
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
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;
er 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 aft
Corporations Act 2001 for the financial year ending 30 June 201
with section 295A of the Corporations Act 2001
for the financial year ending 30 June 2013.
On behalf of the Board
Alexander Beard
Alexander Beard
Chairman
Brisbane
20 August 2013
66
Cellnet Group Limited and its consolidated entities
Financial Report
67
Cellnet Group Limited and its consolidated entities
Financial Report
68
Cellnet Group Limited and its consolidated entities
Financial Report
Corporate Governance statement
Background
Principles of Good Corporate Governance and Best Practice Recommendations” were published in March 2003, revised
effective 1 January 2008 and
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.
latest amendments
the
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
Recommendations
Principles
and
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
independent Director
should be an
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.
the
Recommendation 2.5
Disclose
for
evaluating the performance of
the Board, its committees and
individual Directors
process
While there is no structured process in place, the Chairman is able to regularly
measure performance through participation at meetings of Directors.
69
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
Corporate Governance statement (continued)
The Company has adopted a formal diversity policy which has been uploaded
onto its website http://www.cellnet.com.au/.
No measurable objectives has been set by the Board due to the Company’s size
and because the operation and development of the diversity policy was relatively
new and being integrated with existing employment and equal opportunity
practices.
It is Board policy to review this policy as part of its annual compliance review and
to assess and report on diversity at the end of each financial year.
a
Principle 3 – Promote ethical and responsible decision-making
Recommendation 3.2
should
Companies
establish
policy
concerning diversity and
disclose the policy or a
that policy.
summary of
The policy should include
requirements for the board
to establish measurable
for achieving
objectives
gender diversity
the
for
board to assess annually
the objectives and
both
achieving
progress
them.
in
Company position is the same as that for Recommendation 3.2.
Company position is the same as that for Recommendation 3.2.
Recommendation 3.3
should
Companies
disclose in each annual
the measurable
report
objectives
for achieving
gender diversity set by the
board in accordance with
the diversity policy and
progress
towards achieving them.
Recommendation 3.5
Companies should provide
the information indicated in
the guide to reporting on
Principle 3.
Principle 4 – Safeguard integrity in financial reporting
Recommendation 4.2
Structure of
Committee
the Audit
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.
Principle 8 – Remunerate fairly and responsibly
Recommendation 8.2
remuneration
The
committee
be
should
structured so that it:
consists
-
majority
independent
directors
a
of
of
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.
70
Cellnet Group Limited and its consolidated entities
Financial Report
Notes to the financial statements
Corporate Governance statement (continued)
-
-
is chaired by an
independent
director
has at
members
least 3
.
Recommendation 8.4
Companies should provide
information in respect of
restrictions on entering into
transactions which
limit
risk in of participating in
unvested entitlements
While there is no structured process in place, the Chairman approves all equity
participation schemes.
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.
Diversity at Cellnet Group Limited
The Company promotes a diverse workplace by aiming to ensure that all employees and applicants for
employment are fairly considered according to their skills, qualifications and abilities. In respect of the gender
diversity initiatives contained in these changes, the Company has adopted a formal diversity policy as disclosed
to ASX on 22 October 2012. This policy can be found in the Company’s website http://www.cellnet.com.au/.
The Company will monitor the progress towards the achievement of appropriate gender diversity. 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 Company’s business and ensure any policy objectives are
realistic and achievable.
The proportion of women employees in the whole organisation, women in senior executive positions and
women on the Board as at 30 June 2013 are disclosed below
Gender
Female
Male
% Female
Total
34
55
38
Senior Management
-
3
-
Board
-
3
-
71
Cellnet Group Limited and its consolidated entities
Financial Report
ASX Additional information-
As at 1 October 2013
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
Ms Amaya Margaret Brookman
Chemical Trustee Ltd
Philadelphia Investments Pty Ltd
TUP Pty Ltd
Carmant Pty Ltd
Kailva Pty Ltd
Citicorp Nominees Pty Limited
Syvest Pty Ltd
Grootemaat Super Pty Ltd
Henry Family Superannuation Fund P/L
Mr David Scicluna & Mr Anthony Scicluna
Mr Geoffrey Brian McDonald & Mrs Mary Louise McDonald
Ronald Bruce Knight & John Graham Cameron
ABS Nominees Limited
Organisational Change Consultants Pty Ltd
Epic Trustees Limited
Top 20 Holders
All other holders
All holders
Ordinary
shares held
% of capital
held
29,519,904
3,702,155
2,800,000
2,139,800
1,851,943
1,820,000
1,650,274
800,000
220,000
200,000
194,180
182,000
172,901
172,900
155,043
151,707
141,811
141,212
140,000
124,900
46,280,730
9,426,381
55,707,111
52.99%
6.65%
5.03%
3.84%
3.32%
3.27%
2.96%
1.44%
0.39%
0.36%
0.35%
0.33%
0.31%
0.31%
0.28%
0.27%
0.25%
0.25%
0.25%
0.22%
83.08%
16.92%
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
29,519,904
3,702,155
Number of
holders
98
692
231
151
29
25
1,226
The number of shareholders holding less than a marketable parcel of ordinary shares is 574.
72
Australia | 59-61 Qantas Drive | Eagle Farm | QLD | 4009
1300 CELLNET (235 563) | www.cellnet.com.au
New Zealand | 10a Orbit Drive | Rosedale | Auckland | 0632
0800 CELLNET (235 563) | www.cellnet.co.nz
2012 2013
AnnualReport