2019
Annual
Report
CONTENTS
At a Glance
Chairman’s Report
Chief Executive’s Report
Meet the Board
Directors' Report
Auditor's Independence Declaration
Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Corporate Directory
3
4
6
16
18
27
28
67
68
73
75
At A GLANCE
3
Investing for
tomorrow,
today.
We are focused on creating wealth for our shareholders
by specialising in property development and property
investment operations. Our in-depth knowledge of these
sectors, together with our intimate understanding of
our clients and customers allows us to transform add
value opportunities into long term earnings and growth,
ensuring consistent returns for shareholders.
Rewarding shareholders
$16.8m
Solid balance sheet
Franked dividends
paid over past
5 financial years
Total Assets
$91.9m
Cash & Other Assets
$46.2m
159 Allen St, Leichhardt
$22.8m
7 Sirius Road, Lane Cove
$7.5m
91 Thornton Drive, Penrith
$7.2m
13 Sirius Road, Lane Cove
$5.9m
S4, 26-32 Pirrama Road, Pyrmont
$2.3m
EBIT
NPAT
NTA per share
$39.2m
$27.3m
$1.43
Desane Group Holdings Limited – 2019 Annual Report Chairman's report
5
It gives me great
pleasure to introduce
the Annual Report of
Desane Group Holdings
Limited for 2019.
I can report to shareholders that
the Group’s earnings before interest
and tax, for the financial year
ending 30 June 2019, was $39.2m
and the Group’s net assets are
$91.85m. The Group’s net tangible
assets (NTA) now stand at $1.43
per security accounting for the
proposed dividend payment.
The Board has resolved to declare
an increased final dividend of
3.00 cents per security, partially
franked, to be paid in October 2019.
This will bring the total dividend for
FY19 to 5.25 cents per security.
Maintenance of the Group’s
continuing strong financial results
was achieved notwithstanding
a year of significant uncertainty
surrounding the proposed
compulsory acquisition of our
flagship property at 68-72 Lilyfield
Road, Rozelle. The resolution of
this matter resulted in the sale of
the property for $78m plus GST in
November 2018.
During the course of the financial
year, management has been active
in progressing the Company’s
property projects, which include
91 Thornton Drive, Penrith and
159 Allen Street, Leichhardt. I
believe that the undersupply of
new housing, as well as building
approvals for development in
locations close to public transport,
as well as city centres, will
strengthen the underlying values
of these properties over the
medium term.
In addition, the Group’s
management continues to be
active in canvassing the acquisition
of properties for investment and
or redevelopment in a number of
strategic locations in the Sydney
metropolitan area.
As mentioned in my report last year,
increasingly fragile international
relations, notably between the
USA and China, coupled with the
prospect of Brexit with the United
Kingdom leaving the European
Community (EU), has continued
to reinforce perceptions of the
robustness of the Australian
property market. Indeed, overseas
investors in both domestic equities
and local property continue to
regard Australia as a safe haven for
their funds.
The recent reduction in official
interest rates by the Reserve
Bank of Australia has highlighted
for many commentators, the
concomitant inversion of
benchmark bond yields, in
both Australia and overseas.
Paradoxically, the reduction in
official interest rates and the
yield curve inversion has resulted
in a focus on direct investment
in primary Australian property
markets, with their significantly
higher returns and arguably less
risk.
Finally, I can report to shareholders
that this annual report is the 32nd
such report of Desane Group
Holdings Limited. Your Company
has continued to prosper due to
the superb quality of its senior
management and the invaluable
contribution of its past and present
Board. Importantly, I need to record
my appreciation, on behalf of
both the Board and Desane staff,
of the long service by Mr John
Bartholomew to the Group, firstly
as Company Secretary (1989-2016)
and subsequently as a Director
(2010-2019) of Desane Group
Holdings Limited. John’s careful
assessment of financial matters
over a long period of time was a
crucial underpinning of the Group’s
success, and I wish him well in his
well-deserved retirement.
The search to replace John
Bartholomew and his special skills
has resulted in the appointment
of Mr Peter Krejci, who joined the
Board on 8 July 2019. Peter has
a range of financial and corporate
expertise which will add to the
already significant experience of
current Directors, sharing strong
and aligned values. I welcome
Peter as he joins the Board in the
new financial year.
Your Board remains confident the
current strategies will continue
to result in asset growth and
consistent earnings in future years
for shareholders. I congratulate
both the Group Executives and
the employees of Desane Group
Holdings Limited for the solid and
as always, prudent management of
the Group.
Finally, I would like to welcome
those shareholders who have
recently joined the Company. The
Board looks forward to a rewarding
and fruitful association with those
new shareholders during the
coming years.
Professor John Sheehan AM
Chairman, Desane Group Holdings
Professor John Sheehan AM
Chairman, Desane Group Holdings
Desane Group Holdings Limited – 2019 Annual Report
Chief executive's report
6
This year has
been an eventful
and financially
rewarding year
for Desane and
its shareholders.
The sale and settlement of our Company’s Rozelle
flagship property to the NSW Roads and Maritime
Services (RMS) in November 2018 for $78m, under
the compulsory acquisition process has enabled our
Company’s management to focus its attention on
identifying property investment assets with strong
underlying covenants in close proximity to major
infrastructure over the short to medium term.
The sale of the Rozelle property has also enabled
Desane to enter FY20 with a historically low gearing
and well capitalised balance sheet, including just over
$46m in cash reserves. Together with the low cost
of debt and a disciplined investment strategy, this
should deliver predictable earnings and build long
term value for our shareholders.
The opportunity to unlock future value-add strategies
coupled with the Group's development pipeline should
also provide significant shareholder value over the
longer term.
Desane’s existing property investment assets are
continuing to perform well. These properties are
highly sought after as investor demand remains
robust. Desane will continue to review its portfolio
and look to recycle capital from assets where it has
already added significant value.
Desane’s management believes that the underlying
value of these properties should increase over the
medium term, given their close proximity to public
infrastructure, as well as established city centres.
PHIL MONTRONE OAM
Managing Director & CEO
Desane Group Holdings
PROPERTY REVIEW Chief executive's report Continued
8
159 Allen Street,
Leichhardt
The 2,792m2 property is located 5 kilometres from
Sydney’s CBD and is zoned R1 General Residential.
The property is located less than 200 metres
from Hawthorne Station on the Sydney Light Rail
Network and is a rare development opportunity in
Sydney’s city fringe.
Artist's impression
Desane lodged a Development Application
with the Inner West Council for a part
3-4 storey and part 4-5 storey residential
apartment complex consisting of 46
residential apartments.
Desane purchased this property off-market
for $21.0m in April 2018. Settlement is due
to occur in FY20.
Artist's impression
PROPERTY REVIEW Chief executive's report Continued
10
11
91 Thornton Drive,
Penrith
Desane purchased this property from the NSW
Government agency UrbanGrowth NSW for
$3.9m in 2017.
A planning proposal was lodged with Penrith Council
in June 2019.
The property sits in the urban transformation area
of Thornton and will be transformed as part of the
NSW Government’s announcement of the $8.0 billion
investment in the new Western Sydney Airport at
Badgerys Creek, the $1.0 billion upgrade to the
Nepean Hospital and the anticipated 40,000 new jobs
that will be created in the Penrith area by 2031.
PROPERTY REVIEW Chief executive's report Continued
12
7 & 13
Sirius Road,
Lane Cove
These two commercial buildings comprise approximately 5,000m2 of net
lettable floor area and are located within the Land Cove West high tech
industrial precinct, approximately 12 kilometres north of the Sydney CBD.
The limited availability of highly sought after acquisition options will
continue to drive investor demand in the area.
7 Sirius Road, Lane Cove
7 Sirius Road, Lane Cove
13 Sirius Road, Lane Cove
PROPERTY REVIEW Chief executive's report Continued
14
Chief executive's report Continued
15
68-72 Lilyfield
Road, Rozelle
In November 2018, Desane completed the sale of sale of
this property to RMS for $78.0m plus GST. Desane had
a 70% interest in this property. The sale of this property
included a $38.9m net gain before tax. The sale has
positioned the Group with cash of $45.6m.
During the course of the 2019
financial year, Desane lodged a
development application in relation
to its Leichhardt property as well as
lodging a planning proposal for its
property at Thornton Penrith.
Group assets
Uplift of 98%
to $91.9m
NTA per share
Uplift of 81%
to $1.43
Over the past five (5) years, Desane has continued to
reward shareholders with just under $17m in franked
dividends. Management’s focused approach to
creating value for shareholders has also seen a 93%
increase in net tangible assets (NTA) per share and a
near doubling in Desane’s share price since the last
full year reporting date.
On behalf of Desane I wish to thank the executive
team and all our dedicated staff for their hard work in
producing an outstanding 2019 financial year. I would
also like to acknowledge the support management
has received from our Company’s Board particularly
retiring Director John Bartholomew. John’s extensive
professional experience for over thirty years has been
invaluable and has ensured that decisions made by
management were consistent with our Company’s
long term strategies.
Finally, I would like to acknowledge the strong support
of our Company’s shareholders, in particular for
the confidence they have placed in the Company’s
management over the past twelve months.
Phil Montrone OAM
Managing Director & CEO
Desane Group Holdings
Desane Group Holdings Limited – 2019 Annual Report MEET the
board
DIRECTORS' REPORT
18
19
These consolidated financial statements are the financial statements of the consolidated
entity consisting of Desane Group Holdings Limited and its controlled entities.
The consolidated financial statements were authorised for issue by the Directors on 20 August 2019.
The Directors have the power to amend and reissue the consolidated financial statements.
Through the use of the internet, we have ensured that our corporate reporting is timely and complete. All press
releases, financial reports and other information are available on our website: desane.com.au
The Directors of Desane Group Holdings Limited (“Desane” and “the Company”) present their report, together with
the financial report of the Company and its controlled entities for the financial year ended 30 June 2019.
Directors and Directors’ Interests
Mr John W Bartholomew
Independent Non-Executive Director
Expertise and experience
Prof. Sheehan, a Life Fellow member of the Australian Property Institute
(NSW division), has over 30 years experience and expertise in property
compensation law, town and country planning and environmental law.
He has been a board member since the Company’s incorporation in 1987
and was appointed as Chairman in 1992, which he currently serves.
Special responsibilities:
• Chairman of the Remuneration & Nomination Committee
• Chairman of the Environmental, Occupational Health and Safety
Committee
• Member of the Risk Management & Audit Committee
• Member of the Finance & Operations Committee
Interests in Desane: Ordinary shares: 148,735
Expertise and experience
Mr P Montrone has over 30 years experience and expertise in property
investment, acquisitions, development and project management.
He has been a significant board member since the Company’s incorporation
in 1987 and was appointed as Managing Director in 1987, which he
currently serves.
Special responsibilities:
• Member of the Risk Management & Audit Committee
• Member of the Finance & Operations Committee
• Member of the Environmental, Occupational Health & Safety Committee
Interests in Desane: Ordinary shares: 14,201,683
Prof. John B Sheehan AM
Independent Non-Executive Director
and Chairman
MR Phil Montrone OAM
Managing Director
Expertise and experience
Mr Bartholomew has over 30 years experience and expertise in accounting,
taxation, property investment and property management. He has been a
board member since his appointment in 2010. Mr Bartholomew retired as a
non-executive director on 8 July 2019.
Special responsibilities:
• Chairman of the Risk Management & Audit Committee
• Member of the Remuneration & Nomination Committee
• Member of the Finance & Operations Committee
• Member of the Environmental, Occupational Health & Safety Committee
Interests in Desane: Ordinary shares: 672,635
Expertise and experience
Mr R Montrone, who was appointed as Director in 2015, has 15 years
experience in property investment, acquisitions, developments,
management, leasing, sales and project management. Mr Montrone is
a licensed real estate agent and an associate member of the Australian
Property Institute.
Special responsibilities:
• Member of the Risk Management & Audit Committee
• Member of the Finance & Operations Committee
• Member of the Environmental, Occupational Health & Safety Committee
Interests in Desane: Ordinary shares: 166,821
Mr Rick Montrone
Director
Company Secretary
The following person held the position of company secretary at the end of the financial year:
Expertise and experience
Mr J Sciara joined Desane in 2001, and has over 20 years experience
and expertise in corporate accounting and taxation. Jack was appointed
as Company Secretary in 2016. His role in the Company includes
developing financial and tax strategies for the Group, investor relations,
ASX compliance and corporate governance and overseeing the financial
operations and financial reporting of all controlled entities. Jack is a
member of the Institute of Public Accountants and a registered Tax Agent..
Mr Jack Sciara
Company Secretary
Special responsibilities:
• Chief Financial Officer and Company Secretary
Interests in Desane: Ordinary shares: 258,030
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report
DIRECTORS' REPORT Continued
20
21
Meetings of Directors
Principal Activities
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:
There were no significant changes in the principal activities of the Company during the financial year, which were:
Directors’ Meetings and Finance &
Operations Committee Meetings
Risk Management and Audit
Committee Meetings
No. of
Meetings
Attended
No. of
Meetings
Held
No. of
Meetings
Attended
No. of
Meetings
Held
13
13
13
12
13
13
13
13
13
13
1
2
2
2
2
2
2
2
2
2
Remuneration & Nomination
Committee Meetings
Environmental & Occupational Health
& Safety Committee Meetings
No. of
Meetings
Attended
No. of
Meetings
Held
No. of
Meetings
Attended
No. of
Meetings
Held
1
1*
1
1*
1*
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
Director
J B Sheehan
P Montrone
J Bartholomew
R Montrone
J Sciara
Director
J B Sheehan
P Montrone
J Bartholomew
R Montrone
J Sciara
* By invitation
• Property investment; and
• Property development (residential and mixed use).
Operating and Financial Review
The Group recorded a consolidated statutory net profit after tax for the year of $27.3m (2018: $0.7m). Statutory
net profit after tax has been prepared in accordance with the Corporations Act 2001 and Australian Accounting
Standards, which comply with International Financial Reporting Standards.
The profit of the consolidated group, after providing for income tax amounted to
27,297
2019
$’000
2018
$’000
664
A summary of consolidated financial results by operational segments is set out below:
Total Revenue
Segment Result
Gain on sale of investment property – net
Property development expenses
Property investment – rental
Property services
Property management
Property investment – net revaluations
Interest income
Less: Unallocated expenses
Operating profit
Income tax (expense)/benefit
attributable to operating profit
Deferred tax attributable to operating profit
Operating profit after income tax attributable to
members of Desane Group Holdings Limited
2019
$’000
38,947
-
2,163
1,054
75
-
860
2018
$’000
-
-
1,216
192
62
3,393
525
43,099
5,388
40,529
2019
$’000
38,947
2018
$’000
-
(783)
(1,062)
376
1,054
75
-
860
(968)
192
62
3,393
525
2,142
(1,663)
(1,192)
38,866
950
-
-
(11,569)
(286)
27,297
664
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report DIRECTORS' REPORT Continued
22
Financial Review
In November 2018, Desane Properties Pty Ltd, a controlled entity of Desane Group Holdings Limited, completed the
sale of its Rozelle flagship property to the Roads and Maritime Services for $78.0m plus GST under the compulsory
acquisition process. Desane Properties Pty Ltd has a 70% interest in the assets and income of the property. The
Group’s consolidated statutory net profit after tax included a net gain of $38.9m from the sale of the Rozelle
property. The sale has positioned the Group with cash of $45.6m, which will provide flexibility to pursue potential
acquisition opportunities in the Sydney metropolitan area and generate continued shareholder returns.
Capital Gains Tax Deferral
Included in the deferred tax liability of $15.4m is approximately $13.9m of capital gains tax (CGT) deferral pertaining
to the sale of the Rozelle property.
The Rozelle property was sold to the Roads and Maritime Services involuntarily as part of the compulsory acquisition
process and triggered a CGT event.
Dividends Paid or Recognised
Dividends paid or declared for payment are as follows:
Final dividend of $0.0225 franked, per share, paid on 6 October 2017
Special dividend of $0.10 franked, per share, paid on 6 October 2017
Interim dividend of $0.0225 franked, per share, paid on 31 March 2018
Final dividend of $0.0225 franked, per share, paid on 26 October 2018
Interim dividend of $0.0225 franked, per share, paid on 29 March 2019
Ordinary dividend of $0.03 partially franked, per share, declared by the directors
from retained earnings payable on 25 October 2019
2019
$’000
2018
$’000
837
3,719
837
920
920
1,227
Dividend Reinvestment Plan (DRP)
Likely developments
The DRP has been suspended until further notice.
Significant Changes in State of Affairs
There was no significant change in the state of affairs
of the Group.
Events Subsequent to Balance Date
Subsequent to balance date, Non-Executive Director,
Mr John Bartholomew, retired on 8 July 2019. Mr Peter
Krejci was appointed as Non-Executive Director on the
same date.
The Group continues to pursue its strategy of focusing
on its core operations, utilising a strengthened balance
sheet to provide support to grow and develop these
operations.
Environmental Regulation
The consolidated group complies with all relevant
legislation and regulations in respect to environmental
matters. No matters have arisen during the year in
connection with Desane’s obligations pursuant to
Commonwealth and State environmental regulations.
23
Incentive Schemes
(Discretionary Remuneration)
Short Term Incentives
A discretionary Short Term Incentive (“STI”)
cash bonus may be offered to executives and key
management personnel (“KMP”) at the discretion
of the Remuneration Committee. STIs align the
achievement of strategic short term objectives for the
long term benefit of the Company and its shareholders.
The total potential STI available is set at a level that
provides sufficient incentive to the executive to
achieve the operational targets at a cost to the Group
that is reasonable.
Approved STIs depend on the extent to which
specific targets set by the Board at the beginning
of the financial year (or shortly thereafter) are
achieved. The targets consist of a number of Key
Performance Indicators (“KPI”) which are linked to the
Company’s strategic business objectives such as
(but not limited to):
• Dividends paid;
• Earnings before interest and tax (“EBIT”);
• Net profit after tax (“NPAT”);
• Share price performance; and
• Net tangible asset (“NTA”) per share.
On an annual basis, after consideration of the
Group’s performance against KPIs, the remuneration
committee determines the amount, if any, of the STI to
be paid to KMP.
Based on the achievement of the operational targets
in the financial year, the Remuneration Committee
approved the payment of a $175,000 STI bonus to KMP
for the 2019 financial year (2018: $150,000).
Occupational Health and Safety Regulations
The consolidated group complies with all relevant
legislation and regulations in respect to occupational
health and safety matters. No matters have
arisen during the year in connection with Desane’s
obligations pursuant to Commonwealth and State
occupational health and safety regulations.
Audited Remuneration Report
This report details the nature and amount of
remuneration for each director of Desane Group
Holdings Limited, and for the executives receiving the
highest remuneration.
Remuneration Policy
The remuneration policy of Desane Group Holdings
Limited has been designed to align director and
executive objectives with shareholder and business
objectives. The board of Desane Group Holdings
Limited believes the remuneration policy to be
appropriate and effective in its ability to attract and
retain the best executives and directors to run and
manage the consolidated group, as well as create
goal congruence between directors, executives and
shareholders.
Approach to Remuneration
The Group is committed to applying fair and equitable
remuneration practices, taking into account the
Company’s corporate strategy, objectives and
shareholder returns.
The Group’s current remuneration framework includes:
1. Fixed remuneration
2. Incentive schemes
3. Executive agreements
Fixed Remuneration
Fixed remuneration includes a base salary, statutory
superannuation and all other statutory entitlements.
Fixed remunerations are reviewed annually by the
Remuneration Committee and are based upon
performance, qualification, experience and current
market practices. The Remuneration Committee
accesses external independent advice if required.
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report
DIRECTORS' REPORT Continued
24
25
Consequences of Performance on Shareholder Wealth
Details of Remuneration for year ended 30 June 2019
In considering the Group’s performance and benefits for shareholder wealth, the remuneration committee have
regard to the following indices in respect of the current and previous financial years.
The remuneration for each director and the executive officer of the consolidated entity receiving the highest
remuneration during the year was as follows:
NPAT for the year at 30 June
Dividends paid per share (cents)
2019
$27.3m
5.25
2018
$0.7m
4.5
Closing share price at 30 June
$1.405
$1.125
Earnings/(loss) per share (cents) at 30 June
66.73
1.78
2017
$5.1m
14.5
$1.08
13.57
Ordinary shares on issue at 30 June
40,909,990
37,190,900
37,190,900
NTA per share at 30 June
$1.43
$0.79
$0.82
Executive Agreements
Executive agreements are formal legal agreements between the Company and all executives and KMP. The
agreements are executed in line with the Corporations Act and will define terms of employment, role and
responsibilities, performance expectations, specify termination payment arrangements, provide provisions for
performance related bonuses and ensure transparency for the Company and its shareholders.
Executive agreements are generally reviewed every three years (unless required earlier) by the executive, KMP and
the Remuneration Committee to ensure that they are adequate and updated if required.
Termination benefits are within the limits set by the Corporations Act 2001 such that they do not require
shareholder approval.
Name
Commencement
Date
Term of Agreement
& Notice Period
Base Salary
Including
Superannuation
$’000
Termination
Payments /
Benefits
$’000
P Montrone
1 September 1987
No fixed term & 12 months
R Montrone
2 November 2003
No fixed term & 12 months
J Sciara
3 September 2001
No fixed term & 12 months
400
367
252
-
-
-
Non Executive Directors
Total compensation for all non executive directors, last voted on at the 2015 Annual General Meeting, is not to exceed
$300,000 per annum. Currently, non executive directors are compensated to a total of $108,000 per annum (2018:
$84,000), inclusive of superannuation. The 2019 non executive director fees are 36% (2018: 28%) of the aggregate
maximum sum approved by shareholders.
The base fee for the Chairman is $84,000 per annum and $24,000 per annum for other non executive directors.
Base fees cover all main board activities and membership of all board committees. Non executive directors are not
provided with retirement benefits apart from statutory superannuation if applicable.
Short Term Benefits
Salary & Fees
$’000
STI Cash Bonus
$’000
Superannuation
$’000
Total
$’000
Directors
John B. Sheehan (non-executive)
John Bartholomew (non-executive)
Phil Montrone
Rick Montrone
Chief Financial Officer/Company Secretary
Jack Sciara
84
24
365
335
230
1,038
-
-
-
150
25
175
-
-
35
32
22
89
84
24
400
517
277
1,302
Indemnifying Officers or Auditor
Options
No options have been granted over unissued shares
during the financial year and there are no outstanding
options at 30 June 2019.
Proceedings on Behalf of the Company
No person has applied for leave of Court to bring
proceedings on behalf of the company or intervene in
any proceedings to which the company is a party for
the purpose of taking responsibility on behalf of the
company for all or any part of those proceedings. The
company was not a party to any such proceedings
during the 2019 financial year.
The company or consolidated group has not, during or
since the financial year, in respect of any person who
is or has been an officer or auditor of the company
or a related body corporate, indemnified or made any
relevant agreement for indemnifying against a liability
incurred as an officer, including costs and expenses in
successfully defending legal proceedings.
The company paid a premium of $14,899 to insure
the directors of the company and controlled entities.
The policy provides cover for individual directors and
officers of the company, in respect of claims made
and notified to the insurer during the policy period for
losses and expenses incurred in defence of claims for
any alleged wrongful acts arising out of their official
capacities. It will also reimburse the company for any
liability it has to indemnify the directors or officers for
such losses.
It is noted that the company’s Constitution allows an
officer or auditor of the company to be indemnified
by the company against any liability incurred by him
in his capacity of officer or auditor in defending any
proceedings in which judgement is given in his favour.
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report
AUDITOR'S INDEPENDENCE DECLARATION
27
DIRECTORS' REPORT Continued
26
Non-audit Services
The board of directors, in accordance with the advice from the Audit Committee, is satisfied that the provision of
non-audit services during the year is compatible with the general standard of independence for auditors imposed
by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the
external auditor’s independence for the following reasons:
• All non-audit services are reviewed and approved by the Audit Committee prior to commencement to ensure
they do not adversely affect the integrity and objectivity of the auditor; and
• The nature of the services provided does not compromise the general principles relating to auditor
independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the
Accounting Professional and Ethical Standards Board.
The following fees for non-audit services were paid/payable to the external auditors during the year ended
30 June 2019.
Taxation services
Auditor’s Independence Declaration
$’000
3
The lead auditor’s Independence Declaration for the year ended 30 June 2019, has been received and can be found
on page 27 of the Financial Report.
ASIC Class Order 98/100 Rounding of Amounts
The company is an entity to which ASIC Class Order 98/100 applies and accordingly, amounts in the financial
statements and directors’ report have been rounded to the nearest thousand dollars.
Corporate Governance Statement
Desane is committed to implementing sound standards of corporate governance. The Group has taken into
consideration the ASX Corporate Governance Council’s Corporate Governance principles and Recommendations
(3rd Edition) (“ASX Recommendations”). The Group’s corporate governance statement outlines the key principles
and practices of the Company. A copy of the Group’s Corporate Governance Statement has been placed on the
Group’s website under the About Us tab in the Corporate Governance Section -
desane.com.au/about-us/corporate-governance/
This Report of the Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of the
Board of Directors, at Sydney, this 20th day of August, 2019.
J B Sheehan
Director
Sydney
P Montrone
Director
Sydney
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
28
For the year ended 30 June 2019
As at 30 June 2019
29
Continuing Operations
Revenue
Other income
Gain/(loss) on revaluation of investment properties
Gain on sale of investment property – net
Property development expenses
Employee benefits expense
Depreciation and amortisation expense
Finance costs
Doubtful debt
Consolidated Group
Note
2019
$’000
2018
$’000
2
3,292
2a, 2b
2
2
860
-
38,947
(783)
(1,344)
(35)
(377)
(32)
1,470
525
3,393
-
(1,062)
(1,241)
(11)
(577)
-
Other expenses from ordinary activities
(1,662)
(1,547)
Profit before income tax
Income tax (expense)/benefit
Profit from continuing operations
Other comprehensive income
Net Profit (after income tax)
Profit attributable to minority equity interest
Profit attributable to members of the parent entity
Earnings per Share:
Overall Operations
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Continuing Operations
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
The accompanying notes form part of these financial statements.
38,866
4
(11,569)
27,297
-
27,297
-
27,297
66.73
66.73
66.73
66.73
8
8
950
(286)
664
-
664
-
664
1.78
1.62
1.78
1.62
Current Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Other financial assets
Development property reclassified as current
Total Current Assets
Non-current Assets
Trade and other receivables
Investment properties
Property, plant and equipment
Other assets
Total Non-current Assets
Total Assets
Current Liabilities
Trade and other payables
Borrowings
Provisions
Total Current Liabilities
Non-current Liabilities
Trade and other payables
Borrowings
Provisions
Deferred tax liability
Total Non-current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Retained earnings
Total Equity
The accompanying notes form part of these financial statements.
Consolidated Group
Note
2019
$’000
2018
$’000
9
10
11
12
13
11
13
14
11
15
16
17
18
16
19
23
20
21
45,576
79
261
101
-
46,017
-
43,398
2,432
2
45,832
91,849
10,718
-
1,369
12,087
-
5,900
86
15,381
21,367
33,454
58,395
21,213
37,182
58,395
4,500
209
1,851
1,246
12,893
20,699
-
25,667
25
-
25,692
46,391
981
5,250
1,044
7,275
2
5,900
62
3,812
9,776
17,051
29,340
17,308
12,032
29,340
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report
Consolidated Statement of Changes in Equity
30
For the year ended 30 June 2019
Consolidated Statement of Cash Flows
For the year ended 30 June 2019
31
Consolidated Group
Balance as at 1 July 2018
Shares issued during the year
Profit attributable to members of the parent entity
Issued
Capital
$’000
Retained
Earnings
$’000
Total
$’000
17,308
12,032
29,340
3,905
-
21,213
-
27,297
39,329
3,905
27,297
60,542
Dividends paid or recognised for the year
-
(2,147)
(2,147)
Balance at 30 June 2019
21,213
37,182
58,395
Consolidated Group
Balance as at 1 July 2017
Shares issued during the year
Profit attributable to members of the parent entity
Issued
Capital
$’000
Retained
Earnings
$’000
Total
$’000
17,308
13,126
30,434
-
-
-
664
-
664
17,308
13,790
31,098
Dividends paid or recognised for the year
-
(1,758)
(1,758)
Balance at 30 June 2018
17,308
12,032
29,340
The accompanying notes form part of these financial statements.
Consolidated Group
2019
Inflows
(Outflows)
$’000
2018
Inflows
(Outflows)
$’000
Note
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Refund of company income tax
Payment of company income tax
Property development expenditure
Interest received
Finance costs
Net cash provided by (used in) operating activities
30
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of plant and equipment
Proceeds from sale of properties
Purchase of investment properties
Purchase of financial assets
Proceeds from matured financial assets
Capital costs of investment properties
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares
Dividends paid by parent entity
Proceeds from borrowings
Repayments of borrowings
Retention repaid
Rental bonds repaid
Rental bonds received
Net cash provided by (used in) financing activities
Net increase/(decrease) in cash held
Cash at beginning of financial year
Cash at end of financial year
9
The accompanying notes form part of these financial statements.
5,484
(4,226)
24
-
(783)
860
(377)
982
(2,443)
4
51,839
(6,464)
(100)
1,213
(767)
43,282
3,905
(1,841)
-
(5,250)
-
(2)
-
(3,188)
41,076
4,500
45,576
1,447
(3,723)
-
(2,790)
(1,062)
525
(577)
(6,180)
(3)
-
17,825
(5,346)
-
1,324
(1,086)
12,714
-
(5,393)
45
(5,485)
(213)
(40)
-
(11,086)
(4,552)
9,052
4,500
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report
Notes to the Financial Statements
32
For the year ended 30 June 2019
NOTE 1: SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Basis of Preparation
The financial report covers the economic entity of
Desane Group Holdings Limited and its controlled
entities. The separate financial statements of the
parent entity, Desane Group Holdings Limited, have not
been presented within this financial report, as permitted
by the Corporations Act, 2001. Desane Group Holdings
Limited is a listed public company, incorporated and
domiciled in Australia.
The consolidated financial statements are presented in
Australian dollars, which is the functional currency for
the parent company and its controlled entities.
The financial statements were authorised for issue on
20 August 2019 by the directors of the Company.
The financial statements are a general purpose financial
report, that have been prepared in accordance with
the Corporations Act, 2001, Australian Accounting
Standards and Interpretations of the Australian
Accounting Standards Board (“AASB”) and the
International Financial Reporting Standards as issued
by the International Accounting Standards Board
(“IASB”). The Group is a for-profit entity for financial
reporting purposes under Australian Accounting
Standards.
Australian Accounting Standards set out accounting
policies that the AASB has concluded would result
in a financial report containing relevant and reliable
information about transactions, events and conditions.
Compliance with Australian Accounting Standards
ensures that the financial statements and notes
also comply with International Financial Reporting
Standards, as issued by IASB.
Except for cash flow information, the financial
statements have been prepared on an accruals basis
and are based on historical costs, modified, where
applicable, by the measurement at fair value of selected
non-current assets, financial assets and financial
liabilities.
The following is a summary of the material accounting
policies adopted by the consolidated group in the
preparation of the financial report. The accounting
policies have been consistently applied, unless
otherwise stated.
The accounting policies set out below have been
consistently applied to all years presented.
Accounting Policies
a. Principles of Consolidation
The consolidated financial statements incorporate all
of the assets, liabilities and results of the parent entity
controlled by Desane Group Holdings Limited and all of
its controlled entities. Desane Group Holdings Limited
controls an entity when it is exposed to or has rights to,
variable returns from its involvement with the entity and
has the ability to affect those returns through its power
over the entity.
A list of controlled entities is contained in note 31 to the
financial statements. All controlled entities have a 30
June financial year end.
All inter-company balances and transactions between
entities in the economic entity, including any unrealised
profits or losses, have been eliminated on consolidation.
Accounting policies of controlled entities have been
changed where necessary to ensure consistencies with
those policies applied by the parent entity.
Where controlled entities have entered or left the
economic entity during the year, their operating results
have been included/excluded from the date control was
obtained or until the date control ceased.
Non-controlling interests, being the equity in a
controlled entity not attributable, directly or indirectly,
to a parent, are reported separately within the equity
section of the consolidated statement of financial
position and statement of other comprehensive income.
The non-controlling interests in the net assets comprise
their interests at the date of the original business
combination and their share of changes in equity since
that date.
b. Income Tax
The income tax expense (benefit) for the year comprises
current income tax expense and deferred tax expense
(benefit).
Current income tax expense charged to the profit or
loss is the tax payable on taxable income calculated
using the applicable income tax rates enacted, or
substantially enacted, as at reporting date. Current tax
liabilities (assets) are therefore measured at the amount
expected to be paid to (recovered from) the relevant
taxation authority. Deferred income tax expense reflects
movements in deferred tax asset and deferred tax
liability balances during the year as well as unused tax
losses.
Deferred tax assets and liabilities are ascertained
based on the temporary differences arising between
the tax base of the assets and liabilities and their
carrying amounts in the financial statements. Deferred
33
contributes to the income tax payable by the Group in
proportion to their contribution to the Group’s taxable
income.
c. Development Property Held for Sale
Land held for development and sale is measured at the
lower of their carrying amount and net realisable value
less costs to sell. Cost includes the cost of acquisition,
development, borrowing costs and holding costs until
the completion of development. Gains and losses
are recognised in the statement of comprehensive
income on the settlement of a contract of sale when the
significant risks and rewards and effective control over
the property is passed to the purchaser.
The carrying value includes revaluations applied to the
asset during the period the property was classified as
an investment property.
d. Property, Plant and Equipment
Property
Freehold land and buildings are carried at their fair
value (being the amount for which an asset could be
exchanged between knowledgeable, willing parties in an
arm’s length transaction), based on periodic, but at least
triennial, valuations by external independent valuers,
less accumulated impairment losses and accumulated
depreciation for buildings.
Increases in the carrying amount arising on revaluation
of land and buildings are credited to a revaluation
surplus in equity. Decreases that offset previous
increases of the same asset are recognised against
revaluation surplus directly in equity; all other decreases
are recognised in profit or loss.
Any accumulated depreciation at the date of revaluation
is eliminated against the gross carrying amount of the
asset and the net amount is restated to the revalued
amount of the asset.
tax assets also result where amounts have been fully
expensed but future tax deductions are available.
No deferred income tax will be recognised from the
initial recognition of an asset or a liability, excluding
a business combination, where there is no effect on
accounting or taxable profit or loss.
Deferred tax assets or liabilities are calculated at the tax
rates that are expected to apply to the period when the
asset is realised or the liability is settled, based on the
tax rates enacted or substantively enacted at reporting
date. Their measurement also reflects the manner in
which management expects to recover or settle the
carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences
and unused tax losses are recognised only to the extent
that it is probable that future taxable profit will be
available against which the benefits of the deferred tax
asset can be utilised.
Where temporary differences exist in relation to
investments in subsidiaries, branches, associates and
joint ventures, deferred tax assets and liabilities are
not recognised where the timing of the reversal of the
temporary difference can be controlled and it is not
probable that the reversal will occur in the foreseeable
future.
Current tax assets and liabilities are offset where
a legally enforceable right of set-off exists and it is
intended that the net settlement or simultaneous
realisation and settlement of the respective asset and
liability will occur. Deferred tax assets and liabilities are
offset where a legally enforceable right of set-off exists,
the deferred tax assets and liabilities relate to income
taxes levied by the same taxation authority on either
the same taxable entity or different taxable entities
where it is intended that net settlement or simultaneous
realisation and settlement of the respective asset and
liability will occur in future periods in which significant
amounts of deferred tax assets or liabilities are
expected to be recovered or settled.
Tax Consolidation
Desane Group Holdings Limited and its wholly owned
Australian controlled entities have formed an income
tax consolidated group under tax consolidation
legislation. Each entity in the Group recognises its own
current and deferred tax assets and liabilities. Such
taxes are measured using the ‘stand-alone taxpayer’
approach to allocation. Current tax liabilities (assets)
and deferred tax assets arising from unused tax losses
and tax credits in the controlled entities are immediately
transferred to the head entity. The Group notified the
Australian Taxation Office that it had formed an income
tax consolidated group to apply from 1 July 2003.
The tax consolidated group has entered a tax funding
arrangement whereby each company in the Group
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report
Notes to the Financial Statements Continued
34
For the year ended 30 June 2019
35
NOTE 1: SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Continued)
Plant and Equipment
Each class of plant and equipment is carried at cost
or fair value less, where applicable, any accumulated
depreciation and impairment losses.
Plant and equipment are measured on a cost basis.
The carrying amount of plant and equipment is reviewed
annually by directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable
amount is assessed on the basis of the expected
net cash flows that will be received from the assets
employment and subsequent disposal. The expected
net cash flows have been discounted to their present
values in determining recoverable amounts.
Depreciation
The depreciable amount of plant and equipment is
depreciated on a straight line basis over their useful
lives to the economic entity commencing from the time
the asset is held ready for use.
The depreciation rates used for each class of
depreciable assets are:
Class of Fixed Asset
Depreciation Rate
Motor vehicles
15%
Plant and equipment
2.5%-33%
Office and computer equipment
10%-33%
The assets’ residual values and useful lives are reviewed
and adjusted if appropriate, at each reporting date.
An asset’s carrying value is written down immediately to
its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by
comparing proceeds with the carrying amount. These
gains and losses are included in the consolidated
statement of profit and loss and other comprehensive
income.
property could be exchanged between knowledgeable,
willing parties in an arm's length transaction. Each
property is independently valued every three years by
registered valuers who have recognised and appropriate
professional qualifications, and recent experience
in the location and category of investment property
being valued. Changes to fair value are recorded in
the statement of profit and loss as revenue from non
operating activities.
Investment properties under construction are measured
at the lower of fair value and net realisable value. Cost
includes the cost of acquisition, development and
interest on financing during development. Interest and
other holding charges after practical completion are
expensed as incurred.
Investment properties are maintained at a high standard
and, as permitted by accounting standards, the
properties are not depreciated.
Rental revenue from the leasing of investment
properties is recognised in the statement of profit and
loss and other comprehensive income in the periods in
which it is receivable, as this represents the pattern of
service rendered through the provision of the properties.
All tenant leases are on an arm’s length basis.
f. Leases
Finance leases are capitalised by recognising an asset
and a liability at the lower of the amounts equal to the
fair value of the leased property or the present value of
the minimum lease payments, including any guaranteed
residual values. Lease payments are allocated between
the reduction of the lease liability and the lease interest
expense for the period.
Leased assets are depreciated on a straight-line basis
over the shorter of their estimated useful lives or the
lease term.
Lease payments for operating leases, where
substantially all the risks and benefits remain with the
lessor, as recognised as expenses in the periods in
which they are incurred.
Lease incentives under operating leases are recognised
as a liability and amortised on a straight line basis over
the lease term.
e. Investment Properties
g. Financial Instruments
Investment properties, comprising freehold office and
industrial complexes, are held to generate long-term
rental yields. All tenant leases are on an arm’s length
basis. The fair value model is applied to all investment
property and each property is reviewed at each reporting
date. The fair value is defined as the price at which the
The Group has adopted AASB 9: Financial Instruments.
Initial recognition and measurement
Financial assets and financial liabilities are recognised
when the entity becomes a party to the contractual
provisions to the instrument. For financial assets, this
is equivalent to the date that the entity commits itself
to either the purchase or sale of the asset (ie. trade date
accounting is adopted).
Financial instruments are initially measured at fair value
plus transaction costs, except where the instrument is
classified “at fair value through profit or loss”, in which
case transaction costs are expensed to profit or loss
immediately.
Classification and subsequent measurement
Financial instruments are subsequently measured at
fair value, amortised cost using the effective interest
method, or cost.
The Group has interests in the following financial
assets:
(i) Held-to-maturity investments
Held-to-maturity investments are non-derivative
financial assets that have fixed maturities and fixed
or determinable payments, and it is the Group’s
intention to hold these investments to maturity.
Interest income is recognised in profit or loss
when received. On maturity, the financial asset is
derecognised and re-classified as cash at bank.
h. Impairment of Assets
At each reporting date, the group reviews the carrying
values of its tangible assets to determine whether there
is any indication that those assets have been impaired.
The assessment will include the consideration of
external and internal sources of information. If such an
indication exists, the recoverable amount of the asset,
being the higher of the asset’s fair value less cost to sell
and value in use, is compared to the asset’s carrying
value. Any excess of the asset’s carrying value over its
recoverable amount is expensed to the statement of
profit and loss and other comprehensive income.
i. Investments in Associates
Associates are companies in which the Group has
significant influence. Significant influence is the power
to participate in the financial and operating policy
decisions of the entity but is not control or joint control
of those policies.
Profits and losses resulting from transactions between
the Group and the associate are eliminated to the extent
of the Group’s interest in the associate.
When the Group’s share of losses in an associate equals
or exceeds its interest in the associate, the Group
discontinues recognising its share of further losses
unless it has incurred legal or constructive obligations
or made payments on behalf of the associate. When the
associate subsequently makes profits, the Group will
resume recognising its share of those profits once its
share of the profits equals the share of the losses not
recognised.
Investments in associate companies are recognised in
the financial statements by applying the equity method
of accounting, whereby the investment is initially
recognised at cost and adjusted thereafter for the post
acquisition change in the Group’s share of net assets of
the associate company. In addition, the Group’s share
of the profit or loss of the associate is included in the
Group’s profit or loss.
j. Interests in Joint Arrangements
Joint arrangements represent the contractual sharing
of control between parties in a business venture
where unanimous decisions about relevant activities
are required. Joint venture operations represent
arrangements whereby joint operators maintain direct
interests in each asset and exposure to each liability of
the arrangement. The Group’s interests in the assets,
liabilities, revenue and expenses of joint operations are
included in the respective line items of the consolidated
financial statements.
Gains and losses resulting from sales to a joint
operation are recognised to the extent of the other
party’s interest. When the Group makes a purchase
from a joint operation, it does not recognise its share of
the gains and losses from the joint arrangement until it
resells the goods and services to a third party.
k. Employee Benefits
Short-term Employee Benefits
Provision is made for the Group’s obligation for short-
term employee benefits. Short-term employee benefits
(other than termination benefits) that are expected to
be settled wholly before 12 months after the end of the
annual reporting period in which the employees render
the related service, including wages, salaries and sick
leave. Short-term employee benefits are measured at
the (undiscounted) amounts expected to be paid when
the obligation is settled.
The Group’s obligations for short-term employee
benefits such as wages, salaries and sick leave are
recognised as part of current trade and other payables
in the statement of financial position. The Group’s
obligations for employees’ annual leave and long service
leave entitlements are recognised as provisions in the
statement of financial position.
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report Notes to the Financial Statements Continued
36
For the year ended 30 June 2019
37
NOTE 1: SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Continued)
Other Long-term Employee Benefits
Provision is made for employees’ long service leave and
annual leave entitlements not expected to be settled
wholly within 12 months after the end of the annual
reporting period in which the employees render the
related service. Other long-term employee benefits
are measured at the present value of the expected
future payments to be made to employees. Expected
future payments incorporate anticipated future wage
and salary levels, durations of service and employee
departures and are discounted at rates determined by
reference to market yields at the end of the reporting
period on government bonds that have maturity dates
that approximate the terms of the obligations. Any
remeasurements for changes in assumptions of
obligations for other long-term employee benefits are
recognised in profit or loss in the periods in which the
changes occur.
The Group’s obligations for long-term employee benefits
are presented as non-current provisions in its statement
of financial position, except where the Group does not
have an unconditional right to defer settlement for at
least 12 months after the end of the reporting period,
in which case the obligations are presented as current
provisions.
l. Provisions
Provisions are recognised when the group has a legal
or constructive obligation, as a result of past events,
for which it is probable that an outflow of economic
benefits will result and that outflow can be reliably
measured.
m. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand,
deposits held at call with banks, other short-term highly
liquid investments with original maturities of three
months or less, and bank overdrafts. Bank overdrafts
are shown within short-term borrowings in current
liabilities on the statement of financial position.
n. Revenue and Other Income
The Group has applied AASB 15: Revenue from
Contracts with Customers.
Revenue from the rendering of property services is
recognised upon delivery of the service to customers.
Investment property revenue is recognised on a straight-
line basis over the period of the lease term so as to
reflect a constant periodic rate of return on the net
investment. The Group derives revenue from investing
in properties for rental and capital appreciation over
time. There are no changes to the measurement or
timing of investment property rental revenue that have
arisen from adoption of AASB 15.
Revenue from sale of properties held for resale and non-
current property or other assets is brought to account
on the settlement of a contract of sale.
Interest revenue is recognised on a proportional basis
taking into account the interest rates applicable to the
financial assets.
Dividend revenue is recognised when the right to receive
a dividend has been established. Dividends received
from associates and joint venture entities are accounted
for in accordance with the equity method of accounting.
All revenue is stated net of the amount of goods and
services tax (GST).
o. Trade and Other Receivables
Trade and other receivables include amounts due from
customers for goods sold and services performed in
the ordinary course of business. Receivables expected
to be collected within 12 months of the end of the
reporting period are classified as current assets. All
other receivables are classified as non-current assets.
p. Trade and Other Payables
Trade and other payables represent the liabilities for
goods and services received by the entity that remain
unpaid at the end of the reporting period. The balance
is recognised as a current liability with the amounts
normally paid within 30 days of recognition of the
liability.
q. Borrowing Costs
Borrowing costs directly attributable to the acquisition,
construction or production of assets that necessarily
take a substantial period of time to prepare for their
intended use or sale, are added to the cost of those
assets until such time as the assets are substantially
ready for their intended use or sale.
All other borrowing costs are expensed in the period in
which they are incurred.
r. Goods and Services Tax (GST)
(i) Impairment – property valuations
Revenues, expenses and assets are recognised net of
the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Taxation
Office. In these circumstances the GST is recognised
as part of the cost of acquisition of the asset or as part
of an item of the expense. Receivables and payables in
the balance sheet are shown inclusive of GST.
Cash flows are presented in the cash flow statement
on a gross basis, except for the GST component of
investing and financial activities, which are disclosed as
operating cash flows.
s. Comparative Figures
When required by Accounting Standards, comparative
figures have been adjusted to conform to changes in
the presentation in the financial year. When the Group
retrospectively applies an accounting policy and makes
a retrospective restatement or reclassifies items in its
financial statement, an additional (third) statement of
financial position as at the beginning of the preceding
period in addition to the minimum comparative financial
statement is presented.
t. Rounding of Amounts
The parent entity has applied the relief available to it
under ASIC Class Order 98/100. Accordingly, amounts
in the financial statements and directors’ report have
been rounded off to the nearest $1,000.
u. Critical Accounting Estimates and Judgements
The preparation of the financial reports requires
management to make judgements, estimates and
assumptions that affect the reported amounts in the
financial reports. Management bases its judgements
and estimates on historical experience and other
various factors it believes to be reasonable under the
circumstances, but which are inherently uncertain and
unpredictable, the results of which form the basis of the
carrying value of assets and liabilities. The resulting
accounting estimates may differ from actual results
under different assumptions and conditions.
Key estimates and assumptions that have a risk of
causing adjustment with the next financial year to the
carrying amounts of assets and liabilities recognised in
these financial reports are:
Critical judgements are made by the Group in respect
of the fair values of investment properties. The fair
value of these investments are reviewed regularly by
management with reference to external independent
property valuations and market conditions existing
at reporting date, using generally accepted market
practices.
Then critical assumptions underlying management’s
estimates of fair values are those relating to the
passing rent, market rent, occupancy, capitalisation
rate, terminal yield and discount rate. If there is
any change in these assumptions or economic
conditions, the fair value of the property investments
may differ. Assumptions used in valuation of
property investments are disclosed in note 13.
(ii) Impairment – general
The Group assesses impairment at the end of
each reporting period by evaluating conditions and
events specific to the Group that may be indicative
of impairment triggers. Recoverable amounts of
relevant assets are reassessed using value-in-
use calculations which incorporate various key
assumptions.
v. New Accounting Standards for
Application in Future Periods
Accounting Standards issued by the AASB that
are mandatorily applicable to the Group, together
with an assessment of the potential impact of such
pronouncements on the Group when adopted in future
periods, are discussed below:
• AASB 16: Leases (applicable to annual reporting
periods beginning on or after 1 January 2019).
This standard will result in almost all leases being
recognised on the consolidated statement of
financial position of lessees, as the distinction
between operating and financial leases is
removed. Under the new standard, an asset
(the right to use the leased item) and a financial
liability to pay rentals are recognised. The
only exceptions are short-term and low-value
leases. The Group has not entered into a lease
agreement as lessee. The Group is the lessor in
a lease agreement, adjustments may be required
to align accounting for these leases with the
new definition of the lease term, variable lease
payments and extension/termination options.
However, there are no significant impacts
expected.
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report
Notes to the Financial Statements Continued
38
For the year ended 30 June 2019
NOTE 2: REVENUE AND OTHER INCOME
NOTE 4: INCOME TAX EXPENSE
Consolidated Group
a. The components of tax expense comprise:
Revenue from Continuing Operations
Property rental income
Property management fees
Property services
Total Revenue from Continuing Operations
Other Revenue
a. Dividend revenue from:
- other corporations
b. Interest revenue from:
- associated entities
- other related parties
- other persons
Total Other Revenue
Total Revenue
Other Income
Gain on sale of investment property – net
Property investment – net revaluations
Total Other Income
Note
2019
$’000
2,163
75
1,054
3,292
-
-
-
860
860
4,152
38,947
-
38,947
2018
$’000
1,216
62
192
1,470
-
-
-
525
525
1,995
-
3,393
3,393
NOTE 3: PROFIT FOR THE YEAR
Profit before income tax from continuing operations includes the following specific expenses:
Expenses
Auditors’ remuneration
Depreciation of plant and equipment
Finance costs:
- External
- Related entities
Transfer to/(from) provisions for:
- Employee entitlements
Rental expenses relating to operating leases
Direct property expenditure from investment
property generating rental income
Note
6
Consolidated Group
2019
$’000
2018
$’000
81
35
377
-
42
15
410
78
11
577
-
107
64
402
39
Note
23
Consolidated Group
2019
$’000
-
11,569
-
11,569
2018
$’000
-
285
1
286
Current tax
Deferred tax
Under provision prior year
b. The prima facie tax on profit from ordinary activities before income tax is reconciled to income tax as follows:
Prima facie tax payable on profit from ordinary
activities before income tax at 30% (2018: 30%)
- consolidated group
Add:
Tax effect of:
- recoupment of prior year losses
- under provision for prior year tax
- other accruals/provisions
- other non-allowable items
- other items not included in taxable income
Income tax attributable to entity
The applicable weighted average effective tax rates
Consolidated Group
Note
2019
$’000
2018
$’000
11,659
285
-
-
23
2
(115)
11,569
29.8%
-
1
(75)
1
74
286
30.1%
The amount of benefits brought to account or which may be realised in the future, is based on the assumption that
no adverse change will occur in the income tax legislation, the anticipation that the Group will derive sufficient future
assessable income to enable the benefit to be realised and continue to comply with the conditions of deductibility
imposed by the law.
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report Notes to the Financial Statements Continued
40
For the year ended 30 June 2019
41
NOTE 5: KEY PERSONNEL COMPENSATION
a. Names and position held of economic and parent entity key personnel in office at any time during the financial
year are:
Key Personnel
Position
Prof. John B. Sheehan AM
Chairman (non-executive director)
Mr Phil Montrone OAM
Managing Director
Mr John W. Bartholomew
Director (non-executive)
Mr Rick Montrone
Mr Jack Sciara
Director – Head of Property
Company Secretary and Chief Financial Officer
b. Compensation Practices
The board’s policy for determining the nature and amount of compensation of key personnel for the group is as
follows:
The compensation structure for key personnel is based on a number of factors, including length of service, particular
experience of the individual concerned, and the overall performance of the company. Employment is on a continuing
basis the terms of which are not expected to change in the immediate future. Upon retirement key personnel are paid
employee benefit entitlements accrued to the date of retirement.
The company may terminate any employee without cause by providing adequate written notice or making payment in
lieu of notice based on the individual’s annual salary component. Termination payments are generally not payable on
resignation or dismissal for serious misconduct. In the instance of serious misconduct the company can terminate
employment at any time.
All remuneration packages are set at levels that are intended to attract and retain executives capable of managing the
economic entity’s operations. Refer note 5c.
c. Key Personnel Compensation
2019 Key Personnel
John B. Sheehan
John W. Bartholomew
Phil Montrone
Rick Montrone
Jack Sciara
Salary & Fees
$’000
Superannuation
$’000
Short Term
Incentives
$’000
84
24
365
335
230
1,038
-
-
35
32
22
89
-
-
-
150
25
175
Total
$’000
84
24
400
517
277
1,302
2018 Key Personnel
John B. Sheehan
John W. Bartholomew
Phil Montrone
Rick Montrone
Jack Sciara
Salary & Fees
$’000
Superannuation
$’000
Short Term
Incentives
$’000
72
12
317
293
200
894
-
-
25
25
19
69
-
-
-
150
-
150
Total
$’000
72
12
342
468
219
1,113
d. Shareholdings
Number of shares held by parent entity directors and specified executives.
Key Personnel
John B. Sheehan
Phil Montrone
Balance
30.06.18
Net Change
Other*
Balance
30.06.19
135,213
13,522
148,735
12,910,618
1,291,065
14,201,683
John W. Bartholomew
630,856
41,779
672,635
Rick Montrone
Jack Sciara
124,131
42,690
166,821
222,900
35,130
258,030
14,023,718
1,424,186
15,447,904
* “Net Change Other” refers to shares purchased or sold during the financial year.
NOTE 6: AUDITORS’ REMUNERATION
Remuneration of the auditor for the parent entity:
Michael Chau & Associates
- auditing or reviewing the financial report
- taxation services
GCC Business Assurance Pty Ltd
- auditing or reviewing the financial report
- taxation services
Consolidated Group
2019
$’000
2018
$’000
6
-
72
3
81
6
-
69
3
78
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report
Notes to the Financial Statements Continued
42
For the year ended 30 June 2019
43
NOTE 7: DIVIDENDS
NOTE 9: CURRENT ASSETS – Cash and Cash Equivalents
Dividends paid
a.
Final dividend of $0.0225 franked, per share, paid on 6 October 2017
Special dividend of $0.10 franked, per share, paid on 6 October 2017
Interim dividend of $0.0225 franked, per share, paid on 27 March 2018
Final dividend of $0.0225 franked, per share, paid on 26 October 2018
Consolidated Group
2019
$’000
2018
$’000
837
3,719
837
920
Interim dividend of $0.0225 franked, per share, paid on 31 March 2019
920
Ordinary dividend of $0.03 partially franked, per share, declared by
directors from retained earnings payable on 25 October 2019
1,227
b.
The Group has a total $0.3m (2018 - $1.1m) franking credits
available before the final dividend for 2019 is provided.
NOTE 8: EARNINGS PER SHARE
Reconciliation of earnings used in the calculation of earnings per share
Operating profit after income tax
Reconciliation of weighted average numbers of ordinary
shares used in the calculation of earnings per share
Weighted average number of ordinary shares used
in the calculation of basic earnings per share
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Conversion, call, subscription or issue after 30 June 2019
Consolidated Group
2019
$’000
2018
$’000
27,297
664
Consolidated Group
2019
2018
40,909,990
37,190,900
66.73
66.73
1.78
1.62
Cash at bank and in hand
Interest bearing short term deposits
The effective interest rate on cash at bank was nil (2018 – nil).
The effective interest rate on short term bank deposits was an average of 2.36%
(2018 – 2.0%). These deposits have a weighted average maturity of 90 days.
Reconciliation of cash
Cash at the end of the financial year as shown in the cash flow statement is
reconciled to items in the balance sheet as follows:
Cash as above
Less: Bank overdraft (refer to note 16)
NOTE 10: CURRENT ASSETS – Trade and Other Receivables
Trade receivables
NOTE 11: OTHER ASSETS
(a) Current Assets
There has been no conversion to, calls of, or subscription for ordinary shares since the reporting date and before the
completion of these accounts.
Court Order cost recovery
Prepayments and GST receivables
Consolidated Group
2019
$’000
76
45,500
45,576
2018
$’000
1,500
3,000
4,500
45,576
4,500
-
-
45,576
4,500
Consolidated Group
2019
$’000
79
2018
$’000
209
Consolidated Group
2019
$’000
-
261
261
2018
$’000
1,524
327
1,851
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report Notes to the Financial Statements Continued
44
For the year ended 30 June 2019
NOTE 11: OTHER ASSETS (Continued)
(b) Non Current Assets
Security deposit
Formation costs
Consolidated Group
2019
$’000
2018
$’000
-
2
2
-
-
-
NOTE 13: NON-CURRENT ASSETS – Properties
Investment properties:
13 Sirius Road, Lane Cove
7 Sirius Road, Lane Cove
91 Thornton Drive, Penrith
159 Allen Street, Leichhardt
Valuation overview
45
Note
13a
13b
13c
13d
Consolidated Group
2019
$’000
5,911
7,504
7,219
22,764
43,398
2018
$’000
5,900
7,500
6,921
5,346
25,667
NOTE 12: CURRENT ASSETS – Other Financial Assets
Interest bearing deposit
Held-to-maturity investments
Fixed interest securities
Provision for doubtful debt
The effective interest rate on fixed interest securities is an average of 7.5% pa.
These securities have a weighted average maturity of 280 days.
NOTE 13: CURRENT ASSETS – Property Reclassified as Current
68-72 Lilyfield Road, Rozelle
Consolidated Group
The basis of the directors’ valuation of the investment properties (non-current) is a fair market value as defined in note 1e.
2019
$’000
-
133
(32)
101
2018
$’000
370
876
-
1,246
Consolidated Group
2019
$’000
-
-
2018
$’000
12,893
12,893
In arriving at their opinion, the directors have reviewed and adopted the following three approaches and methodologies:
1. Capitalisation of current net rental income;
2. Discounted cash flow (“DCF”); and
3. Direct comparison to market sales evidence.
The properties are being valued independently at least every three years. The Group has no restrictions on the
realisability of an investment property nor any contractual obligations to construct, develop, perform, repair or enhance
an investment property.
a. The directors’ valuation, as at 30 June 2019. An independent valuation was undertaken in June 2018 by a certified
practicing valuation company. The directors have based the value as per the valuation report.
b. The directors’ valuation as at 30 June 2019. An independent valuation was undertaken in June 2018 by a certified
practicing valuation company. The directors have adopted the value as per the valuation report.
c. The directors’ valuation, as at 30 June 2019. An independent valuation was undertaken in December 2017 by a
certified practicing valuation company. The directors have based the above as per the valuation report.
d. Valued at cost expended as at 30 June 2019, including deposit on exchange and balance of settlement scheduled
to occur on or before October 2019. Desane has entered into an unconditional contract for the purchase of 159
Allen Street, Leichhardt for $21.0m. The property is located 5km from Sydney’s CBD and is zoned R1 General
Residential under the Allen Street Leichhardt Masterplan for approximately 46 residential apartments.
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report Notes to the Financial Statements Continued
46
For the year ended 30 June 2019
NOTE 13: NON-CURRENT ASSETS – Properties (Continued)
NOTE 14: NON-CURRENT ASSETS – Property, Plant and Equipment
47
Consolidated Group
Investment Properties
2019
Acquisition
Cost
$’000
Construction
Cost
$’000
Interest
Capitalised
$’000
13 Sirius Rd, Lane Cove
7 Sirius Rd, Lane Cove
91 Thornton Dr, Penrith
2,900
2,950
4,154
159 Allen St, Leichhardt
22,260
672
1,137
-
-
32,264
1,809
-
-
-
-
-
2018
13 Sirius Rd, Lane Cove
7 Sirius Rd, Lane Cove
91 Thornton Dr, Penrith
159 Allen St, Leichhardt
Acquisition
Cost
$’000
Construction
Cost
$’000
Interest
Capitalised
$’000
2,900
2,950
4,154
5,296
672
1,137
-
-
15,300
1,809
-
-
-
-
-
Other
Capital
Costs
$’000
1,183
295
864
504
2,846
Other
Capital
Costs
$’000
1,172
291
565
51
2,079
Units
Sold/to
be Sold
$’000
Carrying
Value
30.6.2019
$’000
Revaluation
$’000
-
-
-
-
-
1,156
5,911
3,122
7,504
2,201
7,219
-
22,764
6,479
43,398
Units
Sold/to
be Sold
$’000
Revaluation
$’000
Carrying
Value
30.6.2018
$’000
-
-
-
-
-
1,156
5,900
3,122
7,500
2,201
6,921
-
5,346
6,479
25,667
Suite 4, 26-32 Pirrama Road, Pyrmont – land and buildings
Less: Accumulated depreciation
Capital works
Less: Accumulated depreciation
Leasehold improvements
Less: Accumulated depreciation
Depreciable plant and equipment
Less: Accumulated depreciation
Office furniture and equipment – at cost
Less: Accumulated depreciation
Motor vehicle – at cost
Less: Accumulated depreciation
2019
$’000
1,834
-
1,834
351
(8)
343
104
(2)
102
21
(2)
19
106
(36)
70
69
(5)
64
Total non-current assets
2,432
2018
$’000
-
-
-
-
-
-
-
-
-
-
-
-
43
(21)
22
29
(26)
3
25
Movements in Carrying Amounts
Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end
of the current financial year:
Consolidated Group
Balance at the beginning of year
Additions
Disposals/write offs
Depreciation expense
Land and
Buildings
$’000
Capital
Works
$’000
Leasehold
Improvements
$’000
Plant &
Equipment
$’000
-
1,834
-
-
-
351
-
(8)
-
104
-
(2)
25
154
(1)
(25)
Total
$’000
25
2,443
(1)
(35)
Carrying amount at the end of the year
1,834
343
102
153
2,432
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report
Notes to the Financial Statements Continued
48
For the year ended 30 June 2019
NOTE 15: CURRENT LIABILITIES – Trade and Other Payables
Unsecured liabilities
Trade payables
Sundry payables and accrued expenses
159 Allen Street, Leichhardt – settlement commitment
NOTE 16: BORROWINGS
(a) Current
Secured:
Bank overdraft
Secured Liabilities – Bank Loans
Finance for property – Lilyfield Road Joint Venture
Consolidated Group
2019
$’000
134
84
10,500
10,718
Consolidated Group
Note
a
b
2019
$’000
-
-
-
2018
$’000
468
513
-
981
2018
$’000
-
5,250
5,250
a. Bank overdraft secured over Lane Cove properties (refer to note 30).
b. First mortgage finance secured over respective joint venture asset.
c. All covenants imposed on secured loan agreements have been adhered to, at all times within the financial year.
(b) Non Current
Secured Liabilities – Bank Loans
Finance for property 13 Sirius Road, Lane Cove
Finance for property 7 Sirius Road, Lane Cove
Note
16i
16ii
Consolidated Group
2019
$’000
2,950
2,950
5,900
2018
$’000
2,950
2,950
5,900
i. First mortgage finance secured over 13 Sirius Road, Lane Cove property (note 13c). Covenants imposed by
mortgagor require total debt not to exceed 60% of the property value and the EBITDA is required to exceed
interest expense by at least 1.9 times.
ii. First mortgage finance secured over 7 Sirius Road, Lane Cove property (note 13d). Covenants imposed by
mortgagor require total debt not to exceed 60% of the property value and the EBITDA is required to exceed
interest expense by at least 1.9 times.
iii. All covenants imposed on secured loan agreements have been met.
49
Interest Rates
(average)
3.8% pa
Consolidated Group
2019
$’000
5,900
5,900
2018
$’000
11,150
11,150
Maturity Schedule
26 July 2021
NOTE 17: CURRENT LIABILITIES – Provisions
Current company tax
Dividends
Employee entitlements*
* Movement represents net increase in provision set aside.
Consolidated Group
2019
$’000
-
1,227
142
1,369
Consolidated Group
2019
No
6
Consolidated Group
2019
$’000
-
Consolidated Group
2019
$’000
86
2018
$’000
-
920
124
1,044
2018
No
4
2018
$’000
2
2018
$’000
62
Number of employees at year end
NOTE 18: NON CURRENT LIABILITIES – Trade and Other Payables
Security deposits
NOTE 19: NON CURRENT LIABILITIES – Provisions
Employee long service leave entitlement*
* Movement represents provision set aside.
The provision for employee entitlements represent amounts accrued for annual leave and long service leave.
The current position for the employee entitlement includes the total amount accrued for annual leave entitlement and
long service leave that have been vested due to employees having completed the required period of service.
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report
Notes to the Financial Statements Continued
50
For the year ended 30 June 2019
51
NOTE 20: ISSUED CAPITAL
NOTE 22: INTEREST IN JOINT ARRANGEMENTS
Consolidated Group
2019
$’000
2018
$’000
In September 1996, a controlled entity entered into a co-ownership agreement referred to as the Lilyfield Road Joint
Venture to purchase a property asset. The controlled entity has a 70% interest in the assets and income of this joint
venture. The co-ownership agreement is in place. Voting is by unanimous resolution by all joint venture members.
The share of net assets employed in the joint venture is included in the controlled entity’s statement of financial
position under the following classifications:
40,909,990 (2018: 37,190,900) Ordinary Shares fully paid
21,213
17,308
Ordinary Shares Fully Paid
At beginning of the year
Shares Issued During the Year
Dividend reinvestment plan
Share purchase plan
Rights issue
Consolidated Group
Consolidated Group
2019
Shares
2018
Shares
2019
$’000
2018
$’000
37,190,900
37,190,900
17,308
17,308
-
-
3,719,090
-
-
-
-
-
3,905
21,213
-
-
-
17,308
Ordinary Shares fully paid at reporting period
40,909,990
37,190,900
a. Movements in Ordinary Share Capital of the Company
3,719,090 were issued during 2019 (2018: Nil).
b. Authorised Capital
500,000,000 Ordinary Shares of no par value.
c. Capital Management
Management controls the capital of the Group in order to maintain a good debt to equity ratio, provide the
shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going
concern.
The Group’s debt and capital include ordinary share capital and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting
its capital structure in response to changes in these risks and in the market. These responses include the
management of debt levels, distributions to shareholders and share issues.
There have been no significant changes in the strategy adopted by management to control and manage the
capital of the Group since the prior year.
NOTE 21: RETAINED EARNINGS
Retained earnings at beginning of financial year
Net profit attributable to members of parent entity
Dividends provided for or paid
Retained earnings at end of financial year
Consolidated Group
2019
$’000
12,032
27,297
(2,147)
37,182
2018
$’000
13,126
664
(1,758)
12,032
Current Assets
Cash
Trade and other receivables
Investment property reclassified as current
Non-current Assets
Investment property
Total Assets
Current Liabilities
Trade and other payables
Short term borrowings
Non-current Liabilities
Deferred tax liability
Long-term borrowings
Total Liabilities
Equity
Output
Net operating profit/(loss) before income tax
Gain/(loss) from the revaluation of development property
Income tax credit applicable to operating profit
Net profit/(loss) after income tax of joint venture
The joint venture has no contingent liabilities.
Consolidated Group
2019
$’000
2018
$’000
3
-
-
-
3
-
-
-
-
-
3
1,389
40,000
-
(12,000)
28,000
63
1,661
12,893
-
14,617
596
5,250
2,350
-
8,196
6,421
371
(731)
-
219
(512)
The joint venture property asset, 68-72 Lilyfield Road, Rozelle, was sold to the NSW Roads and Maritime Services
involuntarily as part of the compulsory acquisition process.
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report Notes to the Financial Statements Continued
52
For the year ended 30 June 2019
NOTE 23: DEFERRED TAXES
Consolidated Group
Note
2019
$’000
2018
$’000
Non-current
Deferred tax liability comprises:
Tax allowances relating to property and equipment
Revaluation of investment properties
Deferred tax asset attributable to tax and capital losses
Provisions
Other
Reconciliation
Gross Movement
The overall movement in the deferred tax account is as follows:
Opening balance
Charge to statement of profit and loss
4
Closing balance
Deferred Tax Liability
Tax allowance relating to property and equipment
Opening balance
Adjustment to previous year’s provision
Charged to the statement of profit and loss
Closing balance
Revaluation of investment properties
Opening balance
Net revaluation during the current period
Transfers on property sale
Closing balance
Deferred Tax Assets
Tax and capital losses
Opening balance
Tax and capital losses utilised
Closing balance
Provisions
Opening balance
Credited to statement of profit and loss
Closing balance
Other
Opening balance
Charged to statement of profit and loss
Closing balance
14,232
1,944
(707)
(88)
-
15,381
3,812
11,569
15,381
1,123
-
13,109
14,232
3,314
(1,370)
-
1,944
(685)
(22)
(707)
(75)
(13)
(88)
135
(135)
-
1,123
3,314
(685)
(75)
135
3,812
3,527
285
3,812
1,065
-
58
1,123
2,371
943
-
3,314
-
(685)
(685)
(44)
(31)
(75)
135
-
135
53
NOTE 24: FINANCIAL INSTRUMENTS
a. Financial Risk Management
The group’s financial instruments consist mainly of
deposits with banks, mortgage loans with banking
institutions, accounts receivable and payable, and loans
to and from controlled entities.
Desane’s Board of Directors and management are
responsible for the monitoring and managing of
financial risk exposures on a monthly basis.
The main risks the group is exposed to through its
financial instruments are liquidity risk and interest rate
risk.
The contractual maturities of the financial liabilities
are set out below. The amounts represent the future
undiscounted principal and interest cash flows relating
to the amounts drawn at reporting date.
b. Credit Risk Exposure
The credit risk on financial assets of the consolidated
entity which has been recognised in the statement of
financial position is generally the carrying amount, net of
any provisions for doubtful debts.
The consolidated group does not have any material
credit risk exposure to any single receivable or group of
receivables under financial instruments entered into by
the economic entity.
Liquidity Risk
Liquidity risk arises from the possibility that the group
might encounter difficulty in settling its debts or
otherwise meeting its obligations related to financial
liabilities. Desane manages this risk through the
following mechanisms:
c. Net Fair Values
On Balance Sheet:
The net fair value of cash and cash equivalents and non-
interest bearing monetary financial assets and financial
liabilities approximates their carrying value.
• Preparing forward looking cash flow analysis in
relation to its operational, investing and financing
activities;
Off Balance Sheet:
The parent entity and certain controlled entities have
potential financial liabilities which may arise from certain
contingencies disclosed in note 31. No material losses
are anticipated in respect of any of these contingencies.
d. Carrying Amount and Net Fair Values
There is no material difference between the carrying
amounts and the net fair values of financial assets and
liabilities.
• Monitoring undrawn credit facilities;
• Obtaining funding from a variety of sources; and
• Investing surplus cash with major financial
institutions.
Interest Rate Risk
Exposure to interest rate risks arises on financial assets
and financial liabilities recognised at the end of the
reporting period whereby a future change in interest
rates will affect future cash flows or the fair value of
fixed rate financial instruments.
Interest rate risk is managed using a mix of fixed and
floating rate debt. At 30 June 2019, approximately 100%
of the Group’s debt is with a floating interest rate and
any balance is fixed interest rate debt.
The group entity’s exposure to interest rate risk and the
effective weighted average interest rate by maturity
periods are set out in the following table (note 24d).
For interest rates applicable to each class of asset
or liability, refer to individual notes to the financial
statements. Exposures arise predominantly from
assets and liabilities bearing variable interest rates as
the consolidated entity intends to hold fixed rate assets
and liabilities to maturity.
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report Notes to the Financial Statements Continued
54
For the year ended 30 June 2019
55
NOTE 24: FINANCIAL INSTRUMENTS (Continued)
Sensitivity Analysis
2019
Financial Assets
Cash and deposits
Receivables
Other financial assets
Note
9
10, 11
12
Floating
Interest
Maturing
within
1-5 years
$’000
Fixed
Interest
Maturing
within
1 year
$’000
Fixed
Interest
Maturing
within
15 years
$’000
Floating
Interest
Rate
$’000
Non
Interest
Bearing
$’000
Total
$’000
-
-
-
-
-
-
-
-
45,576
-
101
45,677
-
-
-
-
-
45,576
340
-
340
101
340
46,017
Weighted average interest rates
-%
-%
2.36%
-%
-%
2.36%
Financial Liabilities
Trade and other creditors
Interest bearing liabilities
15, 18
16
Weighted average interest rate
Net financial assets (liabilities)
-
-
-
-%
-
-
5,900
5,900
-
-
-
-
-
-
10,718
10,718
-
5,900
10,718
16,618
3.8%
-%
-%
-%
3.8%
(5,900)
45,677
-
(10,378)
29,399
2018
Financial Assets
Cash and deposits
Receivables
Other financial assets
Note
9
10, 11
12
Floating
Interest
Maturing
within
1-5 year
$’000
Fixed
Interest
Maturing
within
1 year
$’000
Fixed
Interest
Maturing
within
15 years
$’000
Floating
Interest
Rate
$’000
Non
Interest
Bearing
$’000
Total
$’000
-
-
-
-
-
-
-
-
4,500
-
1,246
5,746
-
-
-
-
-
4,500
2,060
2,060
-
1,246
2,060
7,806
Weighted average interest rates
-%
-%
2.8%
-%
-%
2.8%
Financial Liabilities
Trade and other creditors
Interest bearing liabilities
15, 18
16
-
-
-
-
11,150
11,150
-
-
-
Weighted average interest rate
-%
3.8%
-%
Net financial assets (liabilities)
-
(11,150)
5,746
-
-
-
-%
-
983
983
-
11,150
983
12,133
-%
3.8%
1,077
(4,327)
The following table illustrates sensitivities to the Group’s exposure to changes in interest rates. The table indicates
the impact on how profit and equity values reported at balance date would have been affected by change in the
relevant risk variable that management considers to be reasonably possible. These sensitivities assume that the
movement in a particular variable is independent of other variables.
The net effective variable interest rate borrowings (floating interest rate) expose the Group to interest rate risk which
will impact future cash flows and interest charges, are indicated in the above figures. All interest bearing liabilities and
their weighted interest rate is shown in note 24(d).
There are no financial liabilities maturing over 5 years.
Consolidated Group
Profit
$’000
Equity
$’000
+/- 118
+/- 118
Consolidated Group
Profit
$’000
Equity
$’000
+/- 222
+/- 222
Year ended 30 June 2019
- interest rate sensitivity calculated at an average of +/- 2%pa.
Year ended 30 June 2018
- interest rate sensitivity calculated at an average of +/- 2%pa.
NOTE 25: RELATED PARTY TRANSACTIONS
All transactions are under normal commercial terms and conditions.
The Group’s main related parties are as follows:
i. Key management personnel:
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity,
directly or indirectly, including any director (whether executive or otherwise) of that entity, are considered key
management personnel.
ii. Joint venture entities accounted for under the proportion method:
The Group has an interest in one venture. The interest in this joint venture is accounted for in the consolidated
financial statements of the Group using the proportion method of accounting. For details of the interest held in
joint venture entities, refer to note 22.
iii. Other related parties
Other related parties include entities controlled by the parent entity and entities over which key management
personnel have control.
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report Notes to the Financial Statements Continued
56
For the year ended 30 June 2019
NOTE 25: RELATED PARTY TRANSACTIONS (Continued)
Related parties of Desane Group Holdings Limited (parent entity) fall into the following categories:
a. Controlled Entities
Information relating to controlled entities is set out in note 31. Other transactions between related parties consist of:
Desane Properties Pty Ltd: Dividend paid
Desane Contracting Pty Ltd: Dividend paid
b. Joint Ventures
Administration fee received from Lilyfield Road Joint Venture
Interest received from Lilyfield Road Joint Venture
Consulting fee received from Lilyfield Road Joint Venture
Property management fee received from Lilyfield Road Joint Venture
Consolidated Group
2019
$’000
1,300
-
12
56
540
29
2018
$’000
1,200
-
12
146
180
11
c. Directors
The names of the persons who were directors of the parent entity during the financial year are as follows:
• Phil Montrone
• John Blair Sheehan
• John William Bartholomew
• Rick Montrone
Information on the remuneration of directors and executives is set out in note 5.
Trafalgar Contracting Pty Ltd, which is a company owned by Mr Phil Montrone’s brother, has provided maintenance
services totalling $7,310 at an investment property owned by the Group on an arm’s length basis.
Mr Jack Sciara provided professional tax services to the Group for the amount of $8,160, on an arm’s length basis.
The Managing Director and all executives are permanent employees of Desane Group Holdings Limited.
Other than the above transactions, no director has entered into a material contract since the end of the previous
financial year and there were no material contracts involving directors’ interests existing at year-end. The directors
participate in bonus and other share issues under the same terms and conditions as other shareholders. Particulars
of directors’ interests in ordinary shares and options are disclosed in the Directors’ Report.
NOTE 26: COMMITMENTS FOR EXPENDITURE
As at 30 June 2019, the Group has the following contractual commitment:
Not later than one year
Later than one year but not more than two years
57
Consolidated Group
2019
$’000
23
-
23
2018
$’000
6,391
10,500
16,891
NOTE 27: SUPERANNUATION COMMITMENTS
In the case of employees of the holding company, the company contributed 9.50% of each member’s salary into the
fund nominated by each member. Group companies contribute a minimum amount equal to 9.50% of each member’s
salary, plus the cost of the insurance coverage, if required, to insure the provision of all benefits to the Fund. The
benefits provided by the accumulation fund are based on the contributions and income thereon held by the Fund on
behalf of the member. The 9.50% contribution made by group companies is legally enforceable.
The company and its controlled entities have a legally enforceable obligation to contribute to the funds.
The directors are not aware of any other changes in circumstances which would have a material impact on the overall
financial position of the funds.
Employer contributions to the plans; consolidated $98,350 (2018 - $75,976), parent entity $65,993 (2018 - $51,073).
NOTE 28: CONTINGENT LIABILITIES
a. The parent entity has given a letter of support to each of its two controlled entities, to the effect that it will not
require repayment of the loan funds advanced in the coming year (refer note 31(ii)).
The shareholders’ funds as at 30 June 2019, in the controlled entities concerned were:
159 Allen Street Leichhardt Pty Ltd
Desane Contracting Pty Limited – net assets
2019
$’000
(86)
(1,777)
2018
$’000
-
(976)
Desane Properties Pty Limited – net assets
45,309
17,264
b. 7 Sirius Road Property
The parent entity has guaranteed the repayment of the first mortgage finance secured over the 7 Sirius Road property
(note 16).
c. 13 Sirius Road Property
The parent entity has guaranteed the repayment of the first mortgage finance secured over the 13 Sirius Road property
(note 16).
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report
Notes to the Financial Statements Continued
58
For the year ended 30 June 2019
NOTE 29: OPERATING SEGMENTS –
Consolidated Group
Segment Information
Identification of Reportable Segments
The Group has identified its operating segments based
on the internal reports that are reviewed and used by
the Board of Directors in assessing performance and
determining the allocation of resources.
Reportable segments disclosed are based on
aggregating operating systems where the segments are
considered to have similar economic characteristics
and are also similar to the operations and or services
provided by the segment.
Types of Operations and Services by Segment
Revenue is derived by the industry segments from the
following activities:
i. Property Development
Development projects (residential, commercial or
industrial).
ii. Property Investment
Rental income from prime real estate investments.
iii. Property Project Management and Resale
Property project management and resale of
commercial, industrial and residential properties,
principally in Sydney metropolitan areas.
iv. Property Services
Property and related services.
Accounting Policies Adopted
Segment Liabilities
Liabilities are allocated to segments where there is a
direct nexus between the incurrence of the liability and
the operations of the segment. Borrowings and tax
liabilities are generally considered to relate to the Group
as a whole and are not allocated. Segment liabilities
include trade and other payables and certain direct
borrowings.
Unallocated Items
The following items of revenue, expenses, assets and
liabilities are not allocated to operating segments as
they are not considered part of the core operations of
any segment:
• Net gains on disposal of available for sale
investments;
• Impairment of assets and other non recurring items
of revenue or expenses;
• Income tax expense;
• Deferred tax assets and liabilities;
• Current tax liabilities;
• Other financial liabilities;
• Retirement benefit obligations; and
• Administration expenses.
Geographical Segments
The consolidated group operates in one geographical
segment being New South Wales, Australia.
Unless stated otherwise, all amounts reported to the
Board of Directors, with respect to operating segments,
are determined in accordance with accounting policies
that are consistent to those adopted in the annual
financial statements of the Group.
Inter-segment Transactions
Inter-segment pricing is based on what would be
realised in the event the sale was made to an external
party at arm's-length basis.
Segment Assets
Where an asset is used across multiple segments, the
asset is allocated to that segment that receives majority
economic value from that asset. In the majority of
instances, segment assets are clearly identifiable on the
basis of their nature and physical location.
59
Property
Project
Management
and Resale
$’000
Property
Services
$’000
Property,
Plant and
Equipment
$’000
Consolidated
Group
$’000
Other
$’000
-
-
-
-
1,129
-
1,129
1,129
-
-
-
-
860
-
860
860
43,099
-
43,099
40,906
(1,663)
(377)
38,866
(11,569)
27,297
Property
Investment
$’000
Property
Development
$’000
41,110
-
41,110
39,700
-
-
-
(783)
2019
External sales
Other segments
Total revenue
Segment result
Unallocated expenses
Finance costs
Profit(loss) before
income tax
Income tax expense
Profit/(loss) after
income tax
2019
Segment Assets
Property
Investment
$’000
Property
Development
$’000
Property
Project
Management
and Resale
$’000
Property
Services
$’000
Property,
Plant and
Equipment
$’000
Consolidated
Group
$’000
Other
$’000
2018 opening balance
38,560
-
-
-
25
7,806
46,391
-
2,443
19,407
(1)
(12,894)
Unallocated Assets
Deferred tax assets
Segment Asset
Increases/(Decreases)
for the Period
Acquisitions
16,964
Proceeds from sale of
properties
(12,893)
Revaluations/
(devaluations)
Capital expenditures
767
Development
expenditures
Asset held for sale
Depreciation and
capital allowance
Asset Reclassification
Net movement in other
segments
Unallocated Assets
Deferred Tax Assets
Total Group Assets
(35)
38,213
43,398
-
-
-
2,432 46,019
-
767
-
-
(35)
-
38,213
91,849
-
91,849
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report
Notes to the Financial Statements Continued
60
For the year ended 30 June 2019
NOTE 29: OPERATING SEGMENTS – Consolidated Group (Continued)
2019
Segment Liabilities
Property
Investment
$’000
Property
Development
$’000
Property
Project
Management
and Resale
$’000
Property
Services
$’000
Property,
Plant and
Equipment
$’000
Consolidated
Group
$’000
Other
$’000
2018 opening balance
11,150
-
-
-
-
2,089
13,239
Unallocated Liabilities
Deferred tax liabilities
Segment Liabilities
Increases/
(Decreases) for the
Period
Repayments
(5,250)
-
3,812
(5,250)
-
61
Property
Investment
$’000
Property
Development
$’000
Property
Project
Management
and Resale
$’000
Property
Services
$’000
Property,
Plant and
Equipment
$’000
Consolidated
Group
$’000
Other
$’000
42,406
4,154
-
-
- 11,848
58,408
2018
Segment Assets
2017 opening
balance
Unallocated Assets
Deferred tax assets
Segment Asset
Increases/
(Decreases) for the
Period
Acquisitions
5,346
Proceeds from sale
of properties
(17,825)
New borrowings
Net movement in
other segments
Unallocated Liabilities
Deferred Tax
Liabilities
Total Group Liabilities
2018
External sales
Other segments
Total revenue
Segment result
Unallocated
expenses
Finance costs
Profit/(loss) before
income tax
Income tax expense
Profit/(loss) after
income tax
10,500
16,400
-
-
-
-
1,673
21,885
(416)
10,084
Property
Investment
$’000
Property
Development
$’000
1,216
-
1,216
3,001
-
-
-
(1,062)
-
11,569
33,454
Property
Project
Management
and Resale
$’000
Property
Services
$’000
Property,
Plant and
Equipment
$’000
Consolidated
Group
$’000
Other
$’000
-
-
-
-
254
-
254
254
-
-
-
-
525
-
525
525
1,995
-
1,995
2,718
(1,191)
(577)
950
(286)
664
Revaluations/
(devaluations)
Capital
expenditures
Development
expenditures
Asset held for sale
Revaluation
increment -
investment property
held for resale
Asset
Reclassification
Net movement in
other segments
Unallocated Assets
Deferred Tax Assets
Total Group Assets
3,393
1,086
4,154
(4,154)
38,560
-
-
-
-
7,831
46,391
(4,017)
(4,017)
-
46,391
-
5,346
(17,825)
3,393
1,086
-
-
-
-
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report
Notes to the Financial Statements Continued
62
For the year ended 30 June 2019
63
NOTE 29: OPERATING SEGMENTS – Consolidated Group (Continued)
NOTE 30: CASH FLOW INFORMATION
2018
Segment Liabilities
Property
Investment
$’000
Property
Development
$’000
2017 opening balance
16,590
Unallocated Liabilities
Deferred tax liabilities
Segment Liabilities
Increases/(Decreases)
for the Period
Repayments
New borrowings
Net movement in
other segments
Unallocated Liabilities
Deferred Tax Liabilities
Total Group Liabilities
(5,485)
45
11,150
-
-
Property
Project
Management
and Resale
$’000
Property
Services
$’000
Property,
Plant and
Equipment
$’000
Consolidated
Group
$’000
Other
$’000
-
-
-
7,857
24,447
3,527
(5,485)
45
(5,768)
(5,768)
-
-
-
2,089
16,766
285
17,051
a. Reconciliation of Cash Flow from Operations with Profit After Income Tax
Consolidated Group
Profit/(loss) after income tax
Non-cash flows in profit/(loss)
Doubtful debt
Depreciation and amortisation
(Gain)/loss on asset revaluation
(Profit)/loss on sale of investment property
Gain on disposal of fixed asset
Changes in assets and liabilities
(Increase)/decrease in trade receivables
(Increase)/decrease in other receivables and other assets
(Increase)/decrease in prepayments
(Decrease)/increase in trade payments and accruals
(Decrease)/increase in other payables
(Decrease)/increase in provisions
Increase/(decrease) in deferred taxes payable
Transfer to financing activities
Cash flow from operations
Credit Standby Arrangements with Banks
Credit facility
Amount utilised
2019
$’000
27,297
33
35
-
(38,947)
(2)
130
1,522
66
(334)
10,071
2018
$’000
664
-
11
(3,393)
-
-
(154)
(1,521)
(193)
375
193
42
(2,659)
11,569
(10,500)
285
212
982
(6,180)
Consolidated Group
2019
$’000
100
-
2018
$’000
100
-
Bank overdraft facility is arranged with one bank and the general terms and conditions are set and agreed annually.
Interest rates are variable and subject to adjustment. Please refer to note 16.
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report Notes to the Financial Statements Continued
64
For the year ended 30 June 2019
NOTE 30: CASH FLOW INFORMATION (Continued)
Loan Facilities with Financial Institutions
Loan facilities
Amount utilised
For more details on the loan facilities, please refer to note 16.
Consolidated Group
2019
$’000
5,900
2018
$’000
11,150
(5,900)
(11,150)
NOTE 31: PARENT ENTITY DISCLOSURES
The following information has been extracted from the books and records of the parent entity and has been prepared
in accordance with Accounting Standards.
65
i. Controlled Entities
Investments in controlled entities are unquoted and comprise:
Controlled Entities
Desane Properties Pty Ltd
Desane Contracting Pty Ltd
159 Allen Street Leichhardt Pty Ltd
Parent Entity
2019
2018
Class of
Shares
Ordinary
Ordinary
Ordinary
Holding
%
Investment
$’000
Holding
%
Investment
$’000
100
100
100
490
-
-
490
100
100
100
490
-
-
490
Parent Entity
2019
$’000
2018
$’000
Note
All controlled entities are incorporated in Australia. Desane Properties Pty Ltd declared a dividend of $1,300,000 out
of retained profits (2018: $1,200,000). Desane Contracting Pty Ltd declared a dividend of $nil (2018: $nil). 159 Allen
Street Leichhardt Pty Ltd declared a dividend of $nil (2018: $nil).
STATEMENT OF COMPREHENSIVE INCOME
Result of Parent Entity
Profit for the period
Other comprehensive income
Total comprehensive income for the period
STATEMENT OF FINANCIAL POSITION
Current Assets
Cash
Trade and other receivables
Other assets
Non-current Assets
Trade and other receivables – loans to controlled entities
Investment – controlled entities
Property, plant and equipment
Total Assets
Current Liabilities
Trade and other payables
Short term provisions
Non-Current Liabilities
Trade and other payables
Provisions
Total Liabilities
Net Assets
Total Equity
Issued capital
Retained earnings/(accumulated losses)
Total Equity
140
-
140
5
-
49
32
-
32
4
-
8
ii
i
16,211
14,190
490
134
490
25
16,889
14,717
37
1,413
-
-
1,450
15,439
21,213
(5,774)
15,439
70
1,089
-
17
1,176
13,541
17,308
(3,767)
13,541
Contribution to profit/(loss) after tax:
Desane Group Holdings Limited
Desane Properties Pty Limited
Desane Contracting Pty Limited
159 Allen Street Leichhardt Pty Ltd
ii. Loans to Controlled Entities
Desane Properties Pty Limited
Desane Contracting Pty Limited
159 Allen Street Leichhardt Pty Ltd
2019
$’000
(1,160)
29,345
(802)
(86)
27,297
2019
$’000
2,091
1,770
12,349
16,210
2018
$’000
(1,168)
2,906
(1,074)
-
664
2018
$’000
7,981
901
5,308
14,190
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report
Notes to the Financial Statements Continued
66
For the year ended 30 June 2019
DIRECTORS' DECLARATION
67
NOTE 31: PARENT ENTITY DISCLOSURES (Continued)
Guarantees
Desane Group Holdings Limited has not entered into any guarantees, in the current or previous financial year, in
relation to the above debts of its controlled entities.
Capital Commitments
Desane Group Holdings has no capital commitments to note.
Contractual Commitments
At 30 June 2019, Desane Group Holdings Limited had not entered into any contractual commitments for the
acquisition of property, plant and equipment or any other affairs (2018: Nil).
NOTE 32: EVENTS AFTER THE REPORTING DATE
Subsequent to balance date, Non-Executive Director, Mr John Bartholomew, retired on 8 July 2019. Mr Peter Krejci
was appointed as Non-Executive Director on the same date.
NOTE 33: ECONOMIC DEPENDENCY
A significant portion of all the Group’s investment properties are under financial loans.
In accordance with a resolution of the directors of Desane Group Holdings Limited, the directors of the company
declare that:
1. The financial statements and notes, as set out on pages 28 to 66 are in accordance with the Corporations Act
2001 and;
a. Comply with Australian Accounting Standards, which, as stated in accounting policy note 1 to the financial
statements, constitutes compliance with International Financial Reporting Standards (IFRS); and
b. Give a true and fair view of the financial position as at 30 June 2019 and of the performance for the year
ended on that date of the consolidated group;
2.
In the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts
as and when they become due and payable; and
3. The directors have been given the declarations required by a 295A of the Corporations Act 2001 from the
Managing Director and Chief Financial Officer.
This declaration is made in accordance with a resolution of the Board of Directors.
J B Sheehan
Director
Sydney
20 August 2019
P Montrone
Director
Sydney
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF DESANE GROUP HOLDINGS LIMITED
68
69
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF DESANE GROUP HOLDINGS LIMITED Continued
70
71
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF DESANE GROUP HOLDINGS LIMITED Continued
SHAREHOLDER INFORMATION
72
The shareholder information set out below was applicable as at 6 August 2019.
73
1. Shareholding
Distribution of equitable securities:
Category (size of holding)
Number of Ordinary
Shares*
Number of Holders
of Ordinary Shares
% of Issued Capital
1 -
1,001 -
5,001 -
10,001 -
100,001 -
1,000
5,000
10,000
100,000
and over
25,646
360,768
339,744
5,019,753
35,164,079
40,909,990
109
136
46
140
59
490
0.06
0.88
0.84
12.27
85.95
100.00
There were 75 holders of less than a marketable parcel of ordinary shares.
* The number of Ordinary Shares on issue as at 30 June 2019 was 40,909,990.
2. Twenty Largest Quoted Equity Security Holders
The names of the 20 largest security holders are listed below:
Name
1.
2.
Cupara Pty Ltd
JP Morgan Nominees Australia Limited
3. Montevans Pty Ltd
4.
5.
6.
7.
8.
9.
Horrie Pty Ltd
Glencairn Pty Limited
PFPT Management Pty Ltd
Horrie Pty Ltd
Cordato Partners (Superannuation) Pty Ltd
Hillmorton Custodians Pty Ltd
10. John & Judith Pty Ltd
11. Keiser Investments Pty Ltd
12. National Nominees Limited
13. Dotnric Pty Ltd
14. Oakmount Nominees Pty Ltd
15. Mocorb Pty Ltd
16. Mr Peter Howells
17. Kelpador Pty Ltd
18. Whimplecreek Pty Ltd
19. Joe Scardino & Felicia Scardino
20. Mr David Cooper & Ms Adrienne Witteman
Ordinary
Shares
% Held to
Issued Capital
11,270,878
4,735,692
2,616,639
1,816,571
1,161,593
938,831
815,578
790,409
689,285
582,677
556,158
521,564
342,874
330,000
291,631
284,195
283,770
275,000
273,555
255,315
27.55
11.58
6.40
4.44
2.84
2.29
1.99
1.93
1.68
1.42
1.36
1.27
0.84
0.81
0.71
0.69
0.69
0.67
0.67
0.62
28,832,215
70.45
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report
SHAREHOLDER INFORMATION Continued
74
3. Substantial shareholders
Substantial holders in the Company are set out below:
Cupara Pty Ltd
Greig & Harrison Pty Ltd
Phoenix Portfolios Pty Ltd
Montevans Pty Ltd
Ordinary
Number
10,246,252
5,480,418
4,560,206
2,048,762
%
28.27
14.74
12.36
5.60
4. Voting Rights
The voting rights attaching to each class of shares are set out below:
Ordinary Shares
No restrictions. On a show of hands, every member present or by proxy shall have one vote and upon a poll, each
share shall have one vote.
There are no other classes of equity securities.
Company Particulars
75
Directors & Key Personnel
Principal Registered Office in Australia
Prof. John Blair Sheehan AM
Chairman (Non-executive director)
Phil Montrone OAM
Managing Director
Rick Montrone
Director
Peter Krejci
Director (non-executive)
(appointed 8 July 2019)
Jack Sciara
Company Secretary and
Chief Financial Officer
John William Bartholomew
Director (non-executive)
(resigned 8 July 2019)
Suite 4, 26-32 Pirrama Road, Pyrmont NSW 2009
Other Company Details
Postal address:
Phone:
Facsimile:
E-mail:
Website:
Share Register
PO Box 331,
Leichhardt NSW 2040
(02) 9555-9922
(02) 9555-9944
info@desane.com.au
desane.com.au
Shareholders with questions about their shareholdings
should contact Desane’s external share registrar:
Computershare Investor Services Pty Limited
Address:
Level 5, 115 Grenfell Street,
Adelaide SA 5000
Postal Address:
GPO Box 2975,
Melbourne VIC 3001
Telephone enquiries
within Australia:
Telephone enquiries
outside Australia:
1300-556-161
61-3-9415-4000
Website:
computershare.com
Please advise the share registrar if you have a new
postal address.
Auditor
GCC Business & Assurance Pty Ltd
Suite 807, 109 Pitt Street, Sydney NSW 2000
Bankers
Commonwealth Bank of Australia
Securities Exchange Listing
Desane Group Holdings Limited shares are listed on the
Australian Securities Exchange.
The ASX code is DGH.
Notice of Annual General Meeting
The Annual General Meeting of Desane Group Holdings
Limited will be held at Doltone House – The Loft,
Level 3, 26-32 Pirrama Road, Pyrmont NSW on Friday, 1
November 2019 commencing at 10.00 am.
Desane Group Holdings Limited – 2019 Annual ReportDesane Group Holdings Limited – 2019 Annual Report
desane.com.au