More annual reports from EBOS Group Limited:
2023 ReportMEETING
THE
dEMaNd.
EBOS GROUP LIMITED annUaL REPORT 2013
EvEryday
HEalTHcarE
for HuMaNs aNd
pETs Is a sIzEablE
and
rapIdly
rapIdly
EvolvING
INdusTry.
rEspoNdING
to the
INdusTry’s
NEEds takes
place on
dEMaNd,
oFTEN
wITH vEry dIFFErENT
needs, IN vEry dIFFErENT
channels, workING
To vEry dIFFErENT
definitions oF
IT INvolvEs
multiple
parTIEs
across
HuGE
dIsTaNcEs.
succEss.
wE ForM the vITal link
bETwEEN HEalTH producT
MaNuFacTurErs and the
FroNTlINE.
our spEcIFIc capabIlITIEs IN pHarMacEuTIcal
wHolEsalING, MEdIcal coNsuMablEs
dIsTrIbuTIoN, THIrd parTy loGIsTIcs,
salEs and MarkETING oF aNIMal carE,
MEdIcal aNd ovEr THE couNTEr producTs arE
uNrIvallEd.
our rEvENuEs across ausTralasIa
are on
wE kNow How To MakE THE
MosT oF EvEry health dollar
wE arE rEspoNsIblE For.
Track To
ExcEEd 6bIllIoN.
ExpaNdING
ovEr THE lasT 12 years, Ebos Has successfully acquIrEd 19 busINEssEs
To bEcoME THE clEar market leader IN NEw zEalaNd. THIs yEar,
wITH THE acquIsITIoN oF lEadING ausTralIaN pHarMacEuTIcal
wHolEsalEr aNd dIsTrIbuTor Symbion, wE HavE bEcoME THE larGEsT
diversified ausTralasIaN MarkETEr, wHolEsalEr aNd dIsTrIbuTor oF
HEalTHcarE, MEdIcal and pHarMacEuTIcal producTs, and a lEadING
ausTralasIaN aNIMal carE producTs dIsTrIbuTor:
#1
#1
#2
#1
#1
or
IN coMbINEd pHarMacy and HospITal
pHarMacEuTIcal wHolEsalE aNd
dIsTrIbuTIoN in ausTralIa aNd
NEw zEalaNd
pHarMacy wHolEsalEr
in NEw zEalaNd
pHarMacy wHolEsalEr
in ausTralIa
IN HospITal pHarMacEuTIcal
dIsTrIbuTIoN in NEw zEalaNd
IN HospITal pHarMacEuTIcal
dIsTrIbuTIoN in ausTralIa
IN prE-wHolEsalE/3pl (third
party logistics) IN NEw zEalaNd
coMprEHENsIvE rETaIl and wHolEsalE
dIsTrIbuTIoN NETwork IN THE aNIMal carE
MarkET, wITH our owN pET carE braNds aNd
22 spEcIalTy rETaIl ouTlETs THrouGH our
aNIMaTEs joINT vENTurE in NEw zEalaNd.
HErE’s How wE GoT HErE:
2000
Ebos acquires
Medic Corporation,
a wEllINGToN basEd
salEs & MarkETING
orGaNIsaTIoN
spEcIalIsING IN
rEprEsENTING MEdIcal,
coNsuMEr, dENTal
& scIENTIFIc braNds.
THIs acquIsITIoN
TraNsForMs Ebos
INTo THE larGEsT
INdEpENdENT HEalTHcarE
supply coMpaNy IN
NEw zEalaNd.
2004
Acquisition of Vernon Carus,
a spEcIalIsEd INFEcTIoN
prEvENTIoN provIdEr IN
publIc/prIvaTE HospITals
aNd aGEd carE FacIlITIEs
THrouGHouT ausTralIa.
1922
coMpaNy was
FouNdEd as
Early Brothers
Trading Co. Ltd.
1986
coMpaNy NaME
bEcoMEs EBOS
Group Ltd.
1960
coMpaNy Is listed
oN THE NEw zEalaNd
sTock ExcHaNGE.
1996
Ebos acquIrEs
THE larGEsT prIvaTE
MEdIcal wHolEsalEr
IN Nsw – Richard
Thompson & Co.
THIs acquIsITIoN
Marks THE ENTry oF
Ebos as a MaINsTrEaM
MEdIcal supplIEr IN THE
ausTralIaN MarkET.
2002
Ebos acquires
the Nature’s Kiss business
INcludING THE ‘HEro’
rETaIl braNd aNTIFlaMME.
Ebos coMplETEs THE
acquisition of Health Support
Ltd (Now callEd oNElINk)
FroM THE GovErNMENT.
THIs busINEss provIdEs
spEcIalIsEd loGIsTIcs oF
MEdIcal coNsuMablEs
aNd pHarMacEuTIcals
For a NuMbEr oF
NEw zEalaNd’s dHbs.
2006
Ebos acquires the leading
NSW based Australian
medical wholesaler
Vital Medical Supplies,
as wEll as THE lEadING
TasMaNIaN MEdIcal
wHolEsalEr TasMEd pTy
lTd. THEsE acquIsITIoNs
TraNsForM Ebos INTo
THE lEadING ausTralIaN
MEdIcal wHolEsalEr IN
THE prIMary carE MarkET
(GENEral pracTITIoNErs).
Ebos aTTaINs aN Nzx
Top50 lIsTING.
2008
Ebos Group
revenues exceed
$1b for the first time.
2011
Ebos acquires Masterpet
Corporation, a succEssFul
aNIMal HEalTHcarE
busINEss IN NEw zEalaNd
aNd ausTralIa aNd vIa
owNErsHIp, 50% oF THE
aNIMaTEs rETaIl pET sTorE
Group. ExpaNdING INTo
aNIMal carE provIdEs
Ebos EarNINGs dIvErsITy,
HIGHEr MarGINs aNd
a lEss rEGulaTEd
ENvIroNMENT.
2005
Ebos acquires the scientific
business Global Science
IN NEw zEalaNd aNd
Quantum Scientific IN
ausTralIa IN ordEr To
ExpaNd our ExIsTING
MEdIc scIENTIFIc busINEss.
2010
Ebos dIvEsTs ITs
porTFolIo oF
scIENTIFIc busINEssEs
IN NEw zEalaNd &
ausTralIa To THE NuMbEr
Two Global scIENTIFIc
supply coMpaNy basEd
IN THE usa.
2007
Ebos acquires the
New Zealand pharmaceutical
wholesaler Propharma
and pre-wholesale third
party logistics provider
Healthcare Logistics
from the Zuellig Group.
Ebos Is Now THE larGEsT
pHarMacEuTIcal
wHolEsalEr IN
NEw zEalaNd aNd
NuMbEr oNE or Two
prE – wHolEsalE
(THIrd parTy loGIsTIcs)
provIdEr IN NEw zEalaNd.
Ebos acquires Crown
Scientific To FurTHEr
ExpaNd our ausTralIaN
prEsENcE IN THIs MarkET.
Ebos bEcoMEs THE clEar
NuMbEr Two supplIEr IN
THE coMbINEd ausTralIaN
aNd NEw zEalaNd
scIENTIFIc supply MarkET.
2013
Ebos acquires Symbion,
THE lEadING
pHarMacEuTIcal
wHolEsalEr IN THE
coMbINEd pHarMacy
aNd HospITal MarkETs
IN ausTralIa aNd vIa
owNErsHIp, lyppard,
THE NuMbEr Two
vETErINary wHolEsalEr
IN ausTralIa.
THE syMbIoN acquIsITIoN
TraNsForMs Ebos INTo
THE larGEsT aNd MosT
dIvErsIFIEd ausTralasIaN
MarkETEr, wHolEsalEr
aNd dIsTrIbuTor oF
HEalTHcarE, MEdIcal
aNd pHarMacEuTIcal
producTs, by rEvENuE,
aNd a lEadING
ausTralasIaN aNIMal
carE producTs MarkETEr
& dIsTrIbuTor.
wHaT
wE oFFEr Now
our INcrEasEd scale ENHaNcEs our abIlITy
To provIdE THE crITIcal INFrasTrucTurE
rEquIrEd by HEalTHcarE aNd aNIMal carE
cusToMErs aNd supplIErs IN THE expanding
ausTralIaN aNd NEw zEalaNd MarkETs:
HeaLtHcaRe
aniMaL
caRe
Manufacturer
services
Logistics and
distribution
Pharm. & hospital
wholesaling
Sales and
marketing
Retail brands
and services
Veterinary/
pet products
Product
management
solutions to
pharmaceutical
companies.
Clinical trial
logistics and depot
services.
Third party
distribution and
logistics solutions.
Distribution
systems, customer
services,
accounting,
IT systems
and electronic
ordering of
products on behalf
of pharmaceutical
and healthcare
suppliers and
manufacturers.
Specialist
wholesaler and
distributor of
ethical, OTC,
medical and
consumer
products to
pharmacies and
public and private
hospitals.
Sales and
marketing of
a wide range
of healthcare
products across
consumer, primary
care, hospital,
aged care and
international
markets.
Retail pharmacy
brand ownership,
sales of branded
product and
operation of
pharmacy support
and management
systems.
Sales and
marketing,
veterinary
wholesaler,
distributor and
retailer of animal
healthcare
products, pet
accessories and
premium foods
across Australasia.
BUY BETTER. SELL MORE.
managing
Director’s
review
exciting
times aheaD.
BolDness, tempereD with patience
and resilience highlight what eBos
stanDs for.
I commented at last year’s Annual General Meeting that
our goal was to become a “$1 billion market capitalisation
business in five years”. We were confident that this was a
realistic aspiration. One year on, our market capitalisation
sits at circa $1.4 billion and we are now truly a leading Trans
Tasman business in our core operations. This does not imply
we can now relax because we have reached our target early;
it demonstrates the potential for this business if it remains
dynamic and open to the right opportunities – big or small.
Our track record of delivering outstanding returns is founded
on growth underpinned by a fundamental determination to
be either number one or two in the market segments that we
operate in. All growth must offer benefits to our customers,
suppliers and shareholders to be sustainable. Expansion into
Australia has been a key focus for some time as the target
for our next phase of substantial growth. The Symbion
acquisition transformed us overnight into the largest and
most diversified Australasian marketer, wholesaler and
distributor of healthcare, medical and pharmaceutical
products by revenue and a leading Australasian animal care
products marketer and distributor. The Symbion acquisition
is a ‘game changer’ and an excellent fit for us in terms of
scale, opportunities and match with our existing businesses.
With Symbion we are the number one pharmacy wholesaler
in Australasia, the number one in hospital pharmaceutical
distribution in Australasia and a leading third party logistic
pre-wholesaling business in New Zealand.
The Symbion acquisition provides us with the perfect
platform from which to drive further revenue gains.
Operationally we have a greater range of capabilities to take
advantage of new and existing opportunities in the growing
healthcare and animal care markets in both countries.
12 — 13
Ebos Group Limited — Annual Report 2013 mark
Waller
chief
executive
anD
managing
Director
eBos
staff
customers
EBOS have a combined staff roll
of over two thousand employees
across Australasia.
As the demand grows in these sectors,
we have grown to include a combined
customer base of 30,387.
2,242
84.5%
healthcare
15.5%
animal care
19,605
australia
10,782
new Zealand
64.5%
australia
35.5%
new Zealand
85.9%
healthcare
14.1%
animal care
Another important prospect that I wish to highlight as
potentially very significant occurred in June 2013. We were
advised by the Crown owned company Health Benefits Ltd
(HBL) that we were chosen as the “preferred respondent”
to streamline the distribution of medical supplies across
the national public hospital network (DHBs) and similarly
distribute pharmaceuticals to certain public hospitals. This
highlights our specialised logistics ability which is a core
competency of our businesses and demonstrates that
we can win against global players in this area. This is an
exciting opportunity and a big tick of approval from the
Government. A successful conclusion to the HBL contract
would allow us to draw on Symbion’s ‘best in class’
technology platform and replicate that here in NZ.
Our goal this year is to leverage the scale and expertise we
have across both the New Zealand and Australian markets.
We see considerable scope to use our expertise to expand
both Symbion’s third party logistics business in Australia
and to extend into medical consumable operations to
complement its existing pharmaceutical business.
We also want to expand into veterinary wholesaling in
New Zealand and to utilise our combined Australasian
resources to significantly enhance the market positions of
both Masterpet and Lyppard. Our acquisition of Masterpet
in 2011 for $105 million was our largest acquisition before
Symbion. It has performed very well for us and now sits
perfectly alongside Lyppard. Expanding the animal care
part of our business will provide earnings diversity into a
higher growth, higher margin industry that is less regulated
than our government funded healthcare businesses.
When it comes to buying businesses we have a strong
track record of success. We have made 19 acquisitions in
the past 12 years, growing revenue from $80.8 million to
more than $6 billion.
14 — 15
Ebos Group Limited — Annual Report 2013 efficiently processing orDers
proDuct sku’s
Electronic ordering throughout our network annually
is now three quarters of all orders processed adding
significant value and efficiency, minimising waste in
distribution costs for all our customers and suppliers.
We have a significant range of products
serving both the healthcare and animal
care sectors.
150
125
100
75
50
25
00
77%
electronic
23%
manual
124,000
20,000
e
r
a
c
h
t
l
a
e
h
e
r
a
c
l
a
m
n
a
i
144,000
sku’s
69.7%
new Zealand
30.3%
australia
5.4 million
orders
processed
Scale is important to us but that doesn’t mean the next
purchase must be bigger than the last. We only buy
good companies at attractive acquisition multiples that
add to our core competencies in healthcare and animal
care. We also have a core philosophy when buying a
company of doing no harm to the business. So we buy
companies that we like both in terms of what they do and
the people that run them. EBOS itself has a tiny corporate
team and relies on achieving operational excellence within
our decentralised businesses.
As a company we have built significant expertise in
areas such as finance, marketing, sales and logistics –
whatever the target business may do, we can assemble
a highly effective team to analyse the opportunity and
leverage gains post settlement. Cross pollination of
ideas and sharing expertise is a “way of life” for our
group businesses.
Strategically we look for global trends and analyse their
local impact and position our business to capitalise on this
before they happen. As markets shift, so do we.
We will not be standing still, be that seeking organic
growth within our existing businesses, driving efficiencies
and looking at further acquisition opportunities as long as
they meet our exacting criteria. In doing this we will strive
to ensure that our shareholders continue to get the returns
that you have become accustomed to receiving.
Healthcare and Animal care are key sectors of the economy
and as such provide a wealth of future opportunity.
mark waller
Chief Executive and Managing Director
chairman’s
report
strong
results.
the 2013 financial year was momentous for eBos.
We successfully completed the largest transaction
in the history of the company and did so in a manner
generating significant shareholder value. I said at the
time of the purchase that we only buy good companies.
This is not just a good company, it is a great company,
with great management. Certainly given the positive
market reaction to this acquisition, we are not alone in
thinking this.
Growth – be it through acquisition or internal expansion
and efficiencies – is not an end goal in itself. The key is
to always target being the leader or number two in all the
key market segments in which we operate. That is the
underlying philosophy that drives EBOS and will continue
to do so in the future. The result is consistent exemplary
returns for our shareholders; over the past 10 years we
have provided investors with compounding returns of 19%
per annum.
The Symbion transaction is important to us for a number of
reasons. Our increased size means that we now have the
scale to invest in the infrastructure that will create further
efficiencies for our manufacturing and pharmaceutical
partners, while maintaining or creating market leading
positions for our business units. The transaction also
expands our shareholder base, resulting in greater share
liquidity, an improved NZX 50 position and increased broker
coverage. We have also stated that it is our intention to
seek a dual listing of EBOS on the ASX by the end of this
calendar year, 2013.
capital raising
The compelling metrics of the Symbion transaction
were endorsed by new and existing shareholders who
supported the placement of new shares and participated
in the entitlement offer. New and existing shareholders
contributed $239 million towards the $1.1 billion purchase
price. The balance comprised new and replacement
financing facilities totalling $370 million and the issue of
$498 million in new shares to Sybos Holdings Pte Limited
(Zuellig Group) which now holds 40 per cent of the total
shares on issue. It is certainly a pleasure to have Zuellig
as a new cornerstone investor in EBOS, given its relevant
international expertise in healthcare and pharmaceuticals.
16 — 17
Ebos Group Limited — Annual Report 2013 rick
Christie
chairman
It’s also a big vote of confidence in EBOS in terms of the
direction in which we are heading. Moreover, our ability
to satisfy much of the purchase price for Symbion through
the issue of new shares means that we have retained
considerable financial flexibility on our balance sheet.
Balance sheet
At balance date the Company remained conservatively
geared with net debt of $173.5 million representing
36.3% of net debt plus equity. Mainly as a result of
the Symbion transaction, total assets increased by
$1.874 billion to $2.532 billion at year end.
Board
I am pleased to welcome Stuart McGregor and
Peter Williams to the Board. Stuart and Peter were
nominated by Zuellig Group and elected as non-executive
Directors at the Special General Meeting in June 2013.
Both will add to the expertise of the Board as it works
with management to refine the strategic positioning of
the Company.
The Board now comprises eight Directors which is
appropriate for a company with a market capitalisation
of greater than $1 billion.
management
Much of the credit for the growth of EBOS goes to Chief
Executive and Managing Director Mark Waller who ably
leads a small core group of senior executives. Mark and
his team are to be congratulated on bringing the Symbion
transaction to a successful conclusion after an extensive
period of intense work.
The real work now begins – to identify and action the
most promising opportunities the new and expanded
combined group has to offer. The Board has confidence
the senior management group, including the Symbion
team led by Patrick Davies, is already working to deliver
on that potential.
18 — 19
performance
Much was achieved in the 2013 financial year which
included the first full year of trading for Masterpet, acquired
during the previous year. Masterpet had an excellent year,
fully meeting its performance targets. Healthcare performed
strongly in New Zealand, and in Australia increased market
penetration through competitive positioning.
The 2013 result for EBOS, excluding the Symbion trading
for one month and one off transaction costs, represented
an underlying lift in EBITDA of 14%.
dividends
An interim dividend of 17.5 cents a share fully imputed
was declared in April 2013 and a two for 53 bonus issue
of ordinary shares was made in June 2013 to distribute
available imputation credits. A final dividend for the 2013
year of 15 cents per share on the much enlarged capital
base, partially imputed will be payable on 22 October 2013.
The Board has determined that future dividends will amount
to 60-70 per cent of normalised net profit after tax (NPAT)
after taking into account working capital requirements and
funding for growth initiatives.
outlook
Understanding our markets and reading trends is crucial
for EBOS and will position the group to capture the
opportunities arising from the nascent global economic
recovery, which will continue to influence consumer,
business and government spending. EBOS is ideally
positioned to meet the requirements of governments
and healthcare organisations for further supply chain
efficiencies and to service the requirements of pet owners
for higher quality animal care.
rick christie
Chairman
Ebos Group Limited — Annual Report 2013 financial
Highlights
2007
2008
2009
2010
2011
2012
2013
2007
2008
2009
2010
2011
2012
2013
2007
2008
2009
2010
2011
2012
2013
seven Year revenue trend
307
1092
1345
1317
1344
1429
1823
0
500
1000
$millions
1500
2000
seven Year eBitda trend
18.8
33.6
38.7
40.4
41.1
46.9
58.2
0
10
20
30
$millions
40
50
60
seven Year continuing operations npat trend
10.3
16.7
19.7
19.7
23.4
27.9
28.2
0
5
10
15
$millions
20
25
30
highlights summary
Net cash inflow from operating
activities ($millions)
Shareholders’ interest ($millions)
Earnings per share from continuing
operations
Net interest bearing debt to net
interest bearing debt plus equity
2013
26.4
304.9
52.9c
2012
28.1
208.6
53.6c
2011
21.7
198.8
45.4c
2010
41.8
182.8
39.5c
2009
33.3
162.0
41.1c
2008
28.5
147.3
37.6c
2007
7.3
92.2
31.7c
36.3%
29.9% Nil in Funds
1.5%
19.6%
32.0%
8.1%
BoarD of Directors profiles
01 02 03
rick christie
msc (hons), FnZiod
Independent Chairman
of Directors
(photo page 17)
Joined the EBOS Group Limited
Board in June 2000 and was
appointed Chairman in April
2003. He is a member of the
Audit and Risk Committee, and
Chairman of the Remuneration
Committee and the Nomination
Committee.
Rick Christie is a professional
Director with a breadth of
governance and international
management experience in
a number of industries. A
former Chief Executive of
the diversified investment
company Rangatira Limited,
a former Managing Director
of Cable Price Downer and
former Chief Executive of
Trade New Zealand. He is
the Chairman of National
e-Science Infrastructure – NeSI
and ServiceIQ, and a Director
of South Port New Zealand
Limited, Solnet Solutions
Limited and Acurity Health
Limited. Previously Chairman
of AgResearch Limited, Deputy
Chairman of the Foundation
for Research, Science &
Technology and Chairman
of the Victoria University
Foundation Board of Trustees.
He is also a Companion
of The Royal Society of
New Zealand, a former Director
of Television New Zealand and
the New Zealand Symphony
Orchestra and a past
president of Chamber Music
New Zealand.
mark waller
Bcom, aca, FnZim
Chief Executive
& Managing Director
(photo page 13)
Mark Waller has been Chief
Executive and Managing
Director of EBOS Group Limited
since 1987. He is a member of
the Remuneration Committee.
He is a Director of all the EBOS
Group Limited subsidiaries, as
well as being a Director of Scott
Technology Limited and HTS-
110 Limited (alternate Director).
He was the recipient of the
Executive of the Year award at
the 2010 Deloitte/Management
magazine Top 200 Awards.
01. stuart mcgregor
Bcom, llB, mBa
Stuart McGregor was educated
at Melbourne University and
the London School of Business
Administration, gaining degrees
in Commerce and Law. He
also completed a Masters of
Business Administration.
Over the last 30 years, Stuart
has been Company Secretary
of Carlton United Breweries,
Managing Director of Cascade
Brewery Company Limited
in Tasmania and Managing
Director of San Miguel Brewery
Hong Kong Limited. In the
public sector, he served as
Chief of Staff to a Minister
for Industry and Commerce
in the Federal Government
and as Chief Executive of the
Tasmanian Government’s
Economic Development
Agency. He was formerly a
Director of Primelife Limited
from 2001 to 2004. Currently
Stuart is Chairman of Donaco
International Limited, an ASX
listed company. He is also
Chairman of Powerlift Australia
Pty Limited and C B Norwood
Pty Limited.
02. sarah ottrey
Bcom
Independent Director
Appointed to the EBOS Group
Limited Board September 2006.
Sarah Ottrey is a Director of
Blue Sky Meats (NZ) Limited,
Smiths City Group Limited,
Comvita Limited, Whitestone
Cheese Limited and Sarah
Ottrey Marketing Limited, and is
a member of the Inland Revenue
Risk and Assurance Committee.
She is a past board member of
the Public Trust. Sarah has held
senior marketing management
positions with Unilever and
Heineken.
20 — 21
Ebos Group Limited — Annual Report 2013
04 05 06
06. peter williams
Peter Williams has been
an executive of The Zuellig
Group since 2000. Peter is
a Director of Interpharma
Investments Limited, Asia’s
leading distributor of healthcare
products, and of Pharma
Industries Limited. He is
also a Director of Cambert,
a company marketing health
and personal care products
in South East Asia.
03. Barry wallace
mcom (hons), ca
04. peter kraus
ma (hons), dip eng.
Barry Wallace was appointed
to the EBOS Group Limited
Board October 2001. He is
Chairman of the Audit and Risk
Committee and member of the
Remuneration Committee.
Barry is a chartered accountant
with a background in financial
management. He is a former
Chief Executive of Health
Support Limited and is the
Finance Director of a private
group of companies and trusts.
He is a Director of Whyte
Adder No 3 Limited, Strand
Holdings Limited, Strand
Management Limited, Herpa
Properties Limited, Ecostore
Company Limited, Eco Tech
Solutions Limited, Huckleberry
Farms Limited, Peton Limited
and Peton Villas Limited and a
Trustee of The Perpanida Trust
and The Annalise Trust.
Peter Kraus has been a Director
of EBOS Group Limited since
1990. He is a member of the
Nomination Committee.
He is a Director of Whyte
Adder No 3 Limited, Strand
Holdings Limited, Strand
Management Limited, Herpa
Properties Limited, Ecostore
Company Limited, Huckleberry
Farms Limited, Peton Limited
and Peton Villas Limited and a
Trustee of The Perpanida
Trust and The Annalise Trust.
05. elizaBeth coutts
Bms, ca
Independent Director
Elizabeth Coutts was appointed
to the EBOS Group Limited
Board July 2003. She is a
member of the Audit and Risk
Committee and the Nomination
Committee. Elizabeth is a
former Chairman of Meritec
Group, Industrial Research, and
Life Pharmacy Limited, former
Director of Air New Zealand
Limited and the Health
Funding Authority, former
Deputy Chairman of Public
Trust, former board member
of Sport and Recreation
NZ, former member of the
Pharmaceutical Management
Agency (Pharmac), former
Commissioner for both the
Commerce and Earthquake
Commissions, former external
monetary policy adviser to the
Governor of the Reserve Bank
of New Zealand and former
Chief Executive of the Caxton
Group of Companies.
Her current directorships
include Chair of Urwin & Co
Limited, and Director of NZ
Directories Holdings Limited
(and subsidiaries), Ports of
Auckland Limited, Ravensdown
Fertiliser Co-operative Limited,
Sanford Limited, Skellerup
Holdings Limited and Tennis
Auckland Region Incorporated,
and member, Marsh
New Zealand Advisory Board.
She is Chair of the Inland
Revenue Risk and Assurance
Committee and of the Auckland
Branch of the Institute of
Directors Inc.
corporate governance statement
The Board and management of EBOS Group Ltd are committed to ensuring that the Company adheres to best practice and
governance principles and maintains high ethical standards. The Board has agreed to regularly review and assess the Company’s
governance structures to ensure they are consistent, both in form and in substance, with best practice. These are set out in the
Company’s Corporate Governance Code, the full content of which can be found on the Company’s website (www.ebos.co.nz).
The Board considers that the Company’s Corporate Governance policies, practices and procedures substantially comply with the
New Zealand Exchange Corporate Governance Best Practice Code.
coDe of ethics
The EBOS Code of Ethics is the framework of standards by
which the Directors and employees of EBOS and its related
companies are expected to conduct their professional lives,
and covers conflicts of interest, receipt of gifts, confidentiality,
expected behaviour, delegated authority and compliance with
laws and policies.
role of the BoarD anD management
The Board is responsible for the direction and supervision of
the business and affairs of the Company and the monitoring
of the performance of the Company on behalf of shareholders.
The Board also places emphasis on regulatory compliance.
Responsibility for the day to day management of the Company
has been delegated to the Chief Executive/Managing Director
and his management team.
BoarD composition
The Board is elected by the shareholders of EBOS Group Ltd.
At each annual meeting at least one third of the Directors retire
by rotation. The Board currently comprises the following non-
executive Directors: Chairman, Rick Christie; Elizabeth Coutts;
Peter Kraus; Stuart McGregor; Sarah Ottrey; Barry Wallace
and Peter Williams. It has one executive Director Mark Waller,
Chief Executive and Managing Director. Rick Christie, Elizabeth
Coutts and Sarah Ottrey have been determined as Independent
Directors, (as defined under the NZSX Listing Rules and the
EBOS Group Ltd Corporate Governance Code).
control. Members of the Audit and Risk Committee are Barry
Wallace (Chairman), Rick Christie and Elizabeth Coutts.
remuneration committee
The Remuneration Committee provides the Board with
assistance in establishing relevant remuneration policies and
practices for Directors, executives and employees. Members
of the Remuneration Committee are Rick Christie (Chairman),
Barry Wallace and Mark Waller.
nomination committee
The procedure for the appointment and removal of Directors is
ultimately governed by the Company’s Constitution. A Director
is appointed by ordinary resolution of the shareholders although
the Board may fill a casual vacancy. The Board has delegated
to the Nomination Committee the responsibility for recommending
candidates to be nominated as a Director on the Board and
candidates for the committees. When recommending
candidates to act as Director, the Nomination Committee takes
into account such factors as it deems appropriate, including the
experience and qualifications of the candidate. The current
members of the Nomination Committee are Rick Christie
(Chairman), Elizabeth Coutts and Peter Kraus. The majority of
the members of the Nomination Committee are independent.
BoarD processes
The table within the Directors’ Report shows attendances
at the board and committee meetings during the year ended
30 June 2013.
BoarD committees
share traDing By Directors anD officers
Specific responsibilities are delegated to the Audit and Risk
Committee, the Remuneration Committee and the Nomination
Committee. Each of these committees has a charter setting
out the committee’s objectives, procedures, composition and
responsibilities. Copies of these charters are available on the
Company’s website.
audit and risk committee
The Audit and Risk Committee provides the Board with
assistance in fulfilling its responsibilities to shareholders,
the investment community and others for overseeing the
Company’s financial statements, financial reporting processes,
internal accounting systems, financial controls, and annual
external financial audit and EBOS’s relationship with its
external auditor. In addition, the Audit and Risk Committee is
responsible for the establishment of policies and procedures
relating to risk oversight, identification, management and
22 — 23
The Company has formal procedures that Directors and officers
must follow when trading EBOS shares. They must notify and
obtain the consent of the Board prior to any trading.
shareholDer participation
The Board aims to ensure that shareholders are informed of
all major developments affecting the Group’s state of affairs.
Information is communicated to shareholders in the Annual
Report and the Interim Report. The Board has adopted a
policy of Continuous Disclosures that complies with the NZSX
Listing Rules. The Board encourages full participation of
shareholders at the Annual Meeting to ensure a high level of
accountability and identification with the Group’s strategies and
goals. Investors can obtain information on the company from
its website (www.ebos.co.nz). The site contains recent NZSX
announcements and reports.
Ebos Group Limited — Annual Report 2013 Directors’ Disclosures
Directors’ interests
share dealings by directors
The Directors have disclosed to the Board under section 148(2)
of the Companies Act 1993 particulars of acquisitions of
dispositions of relevant interest.
disclosure of interests by directors
In accordance with section 140(2) of the Companies Act 1993,
the Directors named below have made general disclosure of
interest, by a general notice disclosed to the Board and entered
in the Company’s interest register, as follows:
R.G.M. Christie: Chairman of National e-Science Infrastructure
– NeSI and ServiceIQ. Director of South Port New Zealand
Limited, Masterpet Corporation Limited, PRNZ Limited and
its associated companies, NZ Pork Industry Board, Solnet
Solutions Limited, and Acurity Health Group Limited.
E.M. Coutts: Chair of Urwin & Co Limited, and Director of
NZ Directories Holdings Limited (and subsidiaries), Ports of
Auckland Limited, Ravensdown Fertiliser Co-operative Limited,
Sanford Limited, Skellerup Holdings Limited and Tennis
Auckland Region Incorporated, and Member, Marsh New
Zealand Advisory Board. She is Chair of Inland Revenue, Audit
and Assurance Committee and Chair Auckland Branch, Institute
of Directors Inc.
P.F. Kraus: Director of Whyte Adder No.3 Limited, Strand
Holdings Limited, Strand Management Limited, Herpa
Properties Limited, Ecostore Company Limited, Huckleberry
Farms Limited, Peton Limited, Peton Lodge Limited and Peton
Villas Limited and Trustee of the Perpanida Trust, and the
Annalise Trust.
S.J. McGregor: Chairman of Donaco International Limited,
Powerlift Australia Pty Limited, and C.B. Norwood Pty Limited.
S.C. Ottrey: Director of Blue Sky Meats (NZ) Limited, Comvita
Limited, Smiths City Group Limited, Whitestone Cheese
Limited, and Sarah Ottrey Marketing Limited and Member of the
Audit and Assurance Committee Inland Revenue.
B.J. Wallace: Director of Allum Management Services
Limited, Masterpet Corporation Limited, PRNZ Limited
and its associated companies, Whyte Adder No.3 Limited,
Strand Holdings Limited, Strand Management Limited, Herpa
Properties Limited, Ecostore Company Limited, Eco Tech
Solutions Limited, Huckleberry Farms Limited, Peton Limited,
Peton Lodge Limited and Peton Villas Limited, and Trustee of
the Perpanida Trust and The Annalise Trust.
M.B. Waller: Director of EBOS Group Limited and its
associated companies, Scott Technology Limited, and HTS-110
Limited (Alternate Director).
P.J. Williams: Executive of The Zuellig Group and associated
companies, a Director of Interpharma Investments Limited,
Pharma Industries Limited and Cambert.
directors’ disclosures (continued)
There were no notices from Directors of the Company requesting to use Company information received in their capacity as Directors,
which would not otherwise have been available to them.
share Dealings By Directors
director
R G M Christie – All non beneficially held
E M Coutts – Held by associated persons
S C Ottrey – Held by association persons
M B Waller – Held by associated persons
M B Waller – Non beneficially held
P F Kraus
P F Kraus – Held by associated persons
B J Wallace – Non beneficially held
ordinary shares
purchased/(sold)
consideration
paid/(received)
date of transaction
2,356
465
613
120
198
16,027
2,356
41
–
$3,724
–
$961
–
–
–
Nil
1,418,489
1,418,489
$10,625,000
$10,625,000
June 2013
October 2012
June 2013
October 2012
June 2013
June 2013
June 2013
June 2013
June 2013
June 2013
Directors’ shareholDings
number of fully paid shares held as at
E M Coutts
– Held by associated persons
30 June 2013
30 June 2012
20,588
19,510
R G M Christie
– Non beneficially held – Staff share purchase scheme
145,642
143,286
P F Kraus
– Held by associated persons
– Held by associated persons
1,117
5,883,463
1,076
4,464,974
S C Ottrey
– Held by associated persons
5,353
5,035
B J Wallace
– Non beneficially held – Director of Whyte Adder No.3 Ltd/
5,883,463
4,464,974
Herpa Properties Ltd
M B Waller
– Held by associated persons
– Non beneficially held – Staff share purchase scheme
445,067
145,642
429,040
143,286
24 — 25
Ebos Group Limited — Annual Report 2013 attenDance
Board
audit & risk
remuneration
due diligence
steering
eligible
to attend
attended
eligible
to attend
attended
eligible
to attend
attended
eligible
to attend
attended
eligible
to attend
attended
R Christie
P Kraus
E Coutts
S Ottrey
B Wallace
M Waller
15
15
15
15
15
15
15
14
15
15
15
15
5
–
5
–
5
5
5
–
5
–
5
4
3
–
–
–
3
3
3
–
–
–
3
3
3
4
10
4
17
17
3
4
10
4
17
17
3
4
10
4
17
17
3
4
10
4
17
17
inDemnity anD insurance
In accordance with section 162 of the Companies Act 1993 and the constitution of the Company, the Company has given
indemnities to, and has effected insurance for, the Directors and executives of the Company and its related companies which,
except for some specific matters which are expressly excluded, indemnify and insure Directors and executives against monetary
losses as a result of actions undertaken by them in the course of their duties. Specifically excluded are certain matters, such as the
incurring of penalties and fines which may be imposed for breaches of law.
Directors’ remuneration anD other Benefits
Directors’ remuneration and other benefits required to be disclosed pursuant to section 211(1) of the Companies Act 1993 for the
year ended 30 June 2013 were as follows:
R G M Christie
E M Coutts
P F Kraus
P Merton (resigned 14/9/11)
M J Stewart (resigned 29/3/12)
S C Ottrey
B J Wallace
M B Waller
(Chief Executive and Managing Director)
30 June 2013
30 June 2012
$154,000
$106,500
$70,500
–
–
$70,500
$123,500
$127,500
$65,000
$60,000
$12,500
$45,000
$60,000
$67,500
Salary $494,884
* Other benefits $1,684,556
$480,470
$2,905,361
* Includes a one off long term incentive, performance bonus and other emoluments
genDer composition
As at 30 June 2013, two of the Directors of the Company are female (2012: 2 female) and one management position is held by
a female (2012: 1 female).
directors’ disclosures (continued)
employee remuneration
Grouped below, in accordance with Section 211 of the Companies Act 1993, are the number of employees or former employees of
the Company and its subsidiaries, including those based in Australia, who received remuneration and other benefits in their capacity
as employees totalling NZ$100,000 or more during the year.
employee remuneration (nZ$)
30 June 2013
Number of Employees
30 June 2012
Number of Employees
100,000 – 110,000
110,000 – 120,000
120,000 – 130,000
130,000 – 140,000
140,000 – 150,000
150,000 – 160,000
160,000 – 170,000
170,000 – 180,000
180,000 – 190,000
190,000 – 200,000
200,000 – 210,000
210,000 – 220,000
220,000 – 230,000
230,000 – 240,000
240,000 – 250,000
250,000 – 260,000
260,000 – 270,000
270,000 – 280,000
310,000 – 320,000
340,000 – 350,000
380,000 – 390,000
410,000 – 420,000
460,000 – 470,000
550,000 – 560,000
590,000 – 600,000
680,000 – 690,000
790,000 – 800,000
840,000 – 850,000
auDitor
27
22
15
3
9
7
7
3
1
5
3
2
1
1
1
1
1
3
–
1
1
1
–
1
1
–
1
1
23
17
14
5
4
4
4
1
2
3
3
2
1
–
–
–
1
3
1
–
1
–
1
1
–
1
–
–
The Company’s Auditor, Deloitte, will continue in office in accordance with the Companies Act 1993.
The Directors are satisfied that the provision of non-audit services, during the year by the auditor is compatible with the general
standard of independence for auditors imposed by the Companies Act 1993. Details of amounts paid or payable to the auditor
for non-audit services provided during the year by the auditor are outlined in note 5 to the financial statements.
r.g.m. christie
Chairman of Directors
20 August 2013
26 — 27
m.B. waller
Chief Executive and Managing Director
Ebos Group Limited — Annual Report 2013
financial statements
Year ended 30 June, 2013
Directors’
responsiBility
statement
auDitor’s report
income statement
statement of
comprehensive income
Balance sheet
statement
of changes
in equity
cash flow statement
notes to the financial
statements
aDDitional stock
exchange information
traDing entities
Directory
28
29
30
30
31
32
33
34
71
72
73
Directors’ responsibility statement
The Directors of EBOS Group Limited are pleased to present to shareholders the financial statements for EBOS Group and its controlled entities
(together the “Group”) for the year to 30 June 2013.
The Directors are responsible for presenting financial statements in accordance with New Zealand law and generally accepted accounting practice,
which give a true and fair view of the financial position of the Company and the Group as at 30 June 2013 and the results of their operations and
cash flows for the year ended on that date.
The Directors consider the financial statements of the Company and the Group have been prepared using accounting policies which have been
consistently applied and supported by reasonable judgements and estimates and that all relevant financial reporting and accounting standards have
been followed.
The Directors believe that proper accounting records have been kept which enable with reasonable accuracy, the determination of the financial
position of the Company and Group and facilitate compliance of the financial statements with the Financial Reporting Act 1993.
The Directors consider that they have taken adequate steps to safeguard the assets of the Company and the Group, and to prevent and detect
fraud and other irregularities. Internal control procedures are also considered to be sufficient to provide a reasonable assurance as to the integrity
and reliability of the financial statements.
The Financial Statements are signed on behalf of the Board by:
r.g.m. christie
Chairman of Directors
20 August 2013
m.b. waller
Chief Executive and Managing Director
3
1
0
2
t
r
o
p
e
R
l
a
u
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n
A
—
d
e
t
i
m
i
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p
u
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s
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28 — 29
inDepenDent auDitor’s report
TO THE SHAREHOLDERS OF EBOS GROUP LIMITED
Report on the Financial Statements
We have audited the financial statements of EBOS Group Limited and group on pages 30 to 70, which comprise the consolidated and separate
balance sheets of EBOS Group Limited as at 30 June 2013, the consolidated and separate income statements, statements of comprehensive
income, statements of changes in equity and cash flow statements for the year then ended, and a summary of significant accounting policies and
other explanatory information.
Board of Directors’ Responsibility for the Financial Statements
The Board of Directors are responsible for the preparation of financial statements in accordance with generally accepted accounting practice
in New Zealand and that give a true and fair view of the matters to which they relate, and for such internal control as the Board of Directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibilities
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with
International Standards on Auditing and International Standards on Auditing (New Zealand). Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of
financial statements that give a true and fair view of the matters to which they relate in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates, as well as the overall presentation
of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Other than in our capacity as auditor, investigating accountant in respect of the 5 June 2013 offer document, the provision of due diligence work,
internal control assurance services and other advisory services we have no relationship with or interests in EBOS Group Limited or any of its subsidiaries.
Opinion
In our opinion, the financial statements on pages 30 to 70:
• comply with generally accepted accounting practice in New Zealand;
• comply with International Financial Reporting Standards; and
• give a true and fair view of the financial position of EBOS Group Limited and group as at 30 June 2013, and their financial performance and
cash flows for the year then ended.
Report on Other Legal and Regulatory Requirements
We also report in accordance with section 16 of the Financial Reporting Act 1993. In relation to our audit of the financial statements for the year
ended 30 June 2013:
• we have obtained all the information and explanations we have required; and
• in our opinion proper accounting records have been kept by EBOS Group Limited as far as appears from our examination of those records.
Chartered Accountants
20 August 2013
Christchurch, New Zealand
income statement
For the Financial Year Ended 30 June, 2013
NOTES
Group
2013
$’000
2012
$’000
Parent
2013
$’000
2012
$’000
Revenue
2 (a)
1,823,169
1,428,679
111,433
95,188
Profit before depreciation, amortisation, finance costs
and income tax expense
Depreciation
Amortisation of finite life intangibles
Profit before finance costs and tax
Finance costs
Profit before income tax
Income tax
Profit for the year
Earnings per share:
Basic (cents per share)
Diluted (cents per share)
58,243
(4,922)
(1,514)
51,807
(9,593)
42,214
(14,007)
46,856
(3,674)
(94)
43,088
(6,987)
36,101
(8,152)
40,558
(552)
–
40,006
(5,028)
34,978
(118)
29,439
(433)
–
29,006
(4,322)
24,684
(36)
28,207
27,949
34,860
24,648
52.9
52.9
53.6
53.6
2 (b)
2 (b)
2 (b)
2 (b)
3
26
26
3
1
0
2
t
r
o
p
e
R
l
a
u
n
n
A
—
d
e
t
i
m
i
l
p
u
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r
g
s
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b
e
statement of comprehensive income
For the Financial Year Ended 30 June, 2013
NOTES
Profit for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Cash flow hedges gains
Related income tax to cashflow hedges
(Losses) on translation of foreign operations
Total comprehensive income net of tax
Notes to the financial statements are included on pages 34 to 70.
22
22
22
Group
2013
$’000
28,207
2,773
(359)
(6,365)
24,256
2012
$’000
27,949
176
(123)
(1,783)
26,219
Parent
2013
$’000
34,860
1,532
(250)
–
36,142
2012
$’000
24,648
343
(95)
–
24,896
30 — 31
balance sheet
As at 30 June, 2013
Current assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Inventories
Current tax refundable
Other financial assets – derivatives
Advances to subsidiaries
Total current assets
Non-current assets
Property, plant and equipment
Capital work in progress
Prepayments
Deferred tax assets
Goodwill
Indefinite life intangibles
Finite life intangibles
Shares in subsidiaries
Investment in associate
Total non-current assets
Total assets
Current liabilities
Bank overdraft
Trade and other payables
Finance leases
Bank loans
Current tax payable
Employee benefits
Other financial liabilities – derivatives
Advances from subsidiaries
Deferred purchase consideration
Total current liabilities
Non-current liabilities
Bank loans
Trade and other payables
Deferred tax liabilities
Finance leases
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Foreign currency translation reserve
Retained earnings
Cash flow hedge reserve
Total equity
Notes to the financial statements are included on pages 34 to 70.
Group
2013
$’000
2012
$’000
Parent
2013
$’000
NOTES
6
7
8
3
9
10
11
7
3
12
13
14
15
16
18
17, 19
17
3
20
17
32
17
18
3
17, 19
198,014
736,429
7,837
558,350
1,628
3,546
–
1,505,804
95,131
787
16
34,361
722,158
59,324
95,145
–
19,013
1,025,935
2,531,739
–
892,645
1,189
215,675
6,378
25,725
2,872
–
865,000
2,009,484
151,357
8,489
48,365
3,296
5,871
217,378
2,226,862
304,877
52,646
175,712
4,540
162,997
735
109
–
396,739
23,489
9
195
7,426
180,553
30,881
279
–
18,428
261,260
657,999
307
275,548
534
10,156
6,988
8,412
530
–
–
302,475
129,684
3,943
10,880
1,064
1,352
146,923
449,398
208,601
89,305
10,399
838
9,146
722
1,816
34,468
146,694
4,668
–
–
310
1,728
4,960
–
1,080,686
–
1,092,352
1,239,046
–
9,172
–
4,000
–
5,820
–
29,319
865,000
913,311
87,412
–
2,220
–
–
89,632
1,002,943
236,103
21
22
22
22
201,288
(5,675)
107,268
1,996
304,877
107,970
690
100,359
(418)
208,601
201,288
–
33,623
1,192
236,103
2012
$’000
7,413
8,943
1,577
9,114
333
–
26,766
54,146
4,999
–
–
645
1,728
4,960
–
215,686
–
228,018
282,164
–
8,131
–
4,000
–
3,018
222
29,576
–
44,947
107,250
–
2,026
–
–
109,276
154,223
127,941
107,970
–
20,061
(90)
127,941
statement of changes in equity
For the Financial Year ended 30 June, 2013
NOTES
Group
2013
$’000
2012
$’000
Parent
2013
$’000
2012
$’000
208,601
198,796
127,941
119,459
28,207
27,949
34,860
24,648
22
22
23
21
2,414
(6,365)
(21,298)
93,318
304,877
53
(1,783)
(16,414)
–
208,601
1,282
–
(21,298)
93,318
236,103
248
–
(16,414)
–
127,941
Equity at start of year
Profit for the year
Other comprehensive income:
Movements in cashflow hedge reserve
Movement in foreign currency translation reserve
Dividends paid to company shareholders
Shares issued
Equity at end of year
Notes to the financial statements are included on pages 34 to 70.
3
1
0
2
t
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32 — 33
cash flow statement
For the Financial Year ended 30 June, 2013
NOTES
Group
2013
$’000
2012
$’000
Parent
2013
$’000
Cash flows from operating activities
Receipts from customers
Interest received
Dividends received from subsidiaries
Payments to suppliers and employees
Taxes paid
Interest paid
Net cash inflow from operating activities
Cash flows from investing activities
Sale of property, plant & equipment
Purchase of property, plant & equipment
Payments for capital work in progress
Payments for intangible assets
Advances to subsidiaries
Advanced to jointly controlled entity
Acquisition of associates
Acquisition of subsidiaries
Costs associated with acquisition of subsidiaries
Net cash inflow/(outflow) from investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from borrowings
Repayment of borrowings
Dividends paid to equity holders of parent
Net cash inflow from financing activities
Net increase/(decrease) in cash held
Effect of exchange rate fluctuations on cash held
Net cash and cash equivalents at beginning of the year
Net cash and cash equivalents at the end of the year
Cash and cash equivalents
Bank overdrafts
Notes to the financial statements are included on pages 34 to 70.
25(c)
16
25(a)
23
1,917,358
1,198
–
(1,869,090)
(13,458)
(9,593)
26,415
1,433,077
1,746
–
(1,391,675)
(8,049)
(6,987)
28,112
403
(2,943)
(778)
(142)
–
–
–
49,263
(5,993)
39,810
93,318
30,009
(21,474)
(21,298)
80,555
146,780
(1,105)
52,339
198,014
198,014
–
198,014
103
(3,821)
(9)
(30)
–
(1,057)
(18,200)
(89,915)
–
(112,929)
–
172,250
(118,501)
(16,414)
37,335
(47,482)
143
99,678
52,339
52,646
(307)
52,339
68,966
1,388
39,623
(61,062)
–
(5,028)
43,887
11
(236)
–
–
(7,959)
–
–
–
(5,993)
(14,177)
93,318
–
(19,838)
(21,298)
52,182
81,892
–
7,413
89,305
89,305
–
89,305
2012
$’000
72,651
1,100
22,677
(67,030)
(1,071)
(4,322)
24,005
15
(1,457)
–
–
(50,116)
–
–
(105,000)
–
(156,558)
–
172,250
(89,000)
(16,414)
66,836
(65,717)
–
73,130
7,413
7,413
–
7,413
notes to the financial statements
For the Financial Year ended 30 June, 2013
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1. summary of accounting policies
1.1 STATEMENT OF COMPLIANCE
EBOS Group Limited (“the Company”) is a profit-oriented company
incorporated in New Zealand, registered under the Companies Act
1993 and listed on the New Zealand Exchange.
The Company operates in two business segments, being Healthcare
and Animal care. Healthcare incorporates the sale of healthcare
products in a range of sectors, own brands, retail healthcare, wholesale
activities, and logistics. Animal care incorporates the sale of animal
care products in a range of sectors, own brands, retail and wholesale
activities. The Company also has a third reportable segment being
Corporate which includes net funding costs and parent company central
administration expenses that have not been allocated to the Healthcare
or Animal care segments.
The Company is a reporting entity and issuer for the purposes of the
Financial Reporting Act 1993 and its financial statements comply with
that Act.
The financial statements have been prepared in accordance with
Generally Accepted Accounting Practice in New Zealand (‘NZ GAAP’).
They comply with New Zealand Equivalents to International Financial
Reporting Standards (“NZ IFRS”) and other applicable reporting
standards as appropriate for profit oriented entities.
The financial statements comply with International Financial Reporting
Standards (“IFRS”).
1.2 BASIS OF PREPARATION
The financial statements have been prepared on the basis of historical
cost, except for the revaluation of certain financial instruments.
Cost is based on the fair value of the consideration given in exchange
for assets.
Accounting policies are selected and applied in a manner which
ensures that the resulting financial information satisfies the concepts
of relevance and reliability, thereby ensuring that the substance of the
underlying transactions or other events is reported.
The accounting policies set out below have been applied in preparing
the financial statements for the year ended 30 June, 2013 and the
comparative information presented in these financial statements for
the year ended 30 June, 2012.
The information is presented in thousands of New Zealand dollars.
1.3 CRITICAL JUDGEMENTS IN APPLYING
ACCOUNTING POLICIES
In the application of NZ IFRS management is required to make
judgements, estimates and assumptions about carrying values of
assets and liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable
under the circumstances, the results of which form the basis of making
the judgements. Actual results may differ from these estimates. The
estimates and underlying assumptions are reviewed on an on-going
basis. Revisions to accounting estimates are recognised in the period
in which the estimate is revised if the revision affects only that period,
or in the period of the revision and future periods if the revision affects
both current and future periods.
Judgements made by management in the application of NZ IFRS that
have significant effects on the financial statements and estimates with
a significant risk of material adjustments in the next year are disclosed,
where applicable, in the relevant notes to the financial statements.
Critical judgements made by management principally relate to the
identification of intangible assets such as brands and customer
relationships separately from goodwill, arising on acquisition of a
business or subsidiaries and the recognition of revenue on significant
contracts subject to renewal where the receipt of cashflows does not
match the services provided.
1.4 KEY SOURCES OF ESTIMATION UNCERTAINTY
Key sources of estimation uncertainty relate to assessment of
impairment of goodwill and indefinite life intangibles.
The Group determines whether goodwill and indefinite life intangibles
are impaired at least on an annual basis. This requires an estimation
of the recoverable amount of the cash generating units to which the
goodwill and indefinite life intangibles are allocated. The assumptions
used in this estimation of recoverable amount and the carrying amount
of goodwill and indefinite life intangibles are discussed in notes 12 and
13. It is assumed that significant contracts will be rolled over for each
period of renewal.
The most recent impairment calculation has been used in the current
year where management considers that the following criteria have
been met: there has been little change in the assets and liabilities of
a cash generating unit in which the most recent recoverable amount
calculation resulted in an amount that exceeded the carrying amount
of the unit by a substantial margin and where there have been no
events or changes in circumstances that would cause only a remote
chance that the current carrying amount of the unit is impaired.
Determining the recoverable amounts of goodwill and intangible
assets requires the estimation of the effects of uncertain future
events at balance date. These estimates involve assumptions about
risk assessment to cash flows or discount rates used, future changes
in salaries and future changes in price affecting other costs.
1.5 SPECIFIC ACCOUNTING POLICIES
The following specific accounting policies have been adopted in the
preparation and presentation of the financial statements.
a) Basis of Consolidation
The consolidated financial statements are prepared by combining
the financial statements of all the entities that comprise the Group,
being the Company (the Parent entity) and its subsidiaries as defined
in NZ IAS-27 ‘Consolidated and Separate Financial Statements’.
A list of subsidiaries appears in note 15 to the financial statements.
Consistent accounting policies are employed in the preparation and
presentation of the consolidated financial statements.
Acquisitions of subsidiaries and businesses are accounted for using
the acquisition method.
The cost of the acquisition is measured at the aggregate of the fair
values, at the date of exchange, of assets given, liabilities incurred
or assumed, and equity instruments issued by the Group in exchange
34 — 35
for control of the acquiree. Acquisition-related costs are recognised in
profit or loss as incurred.
Where applicable, the cost of acquisition includes any asset or liability
resulting from a contingent consideration arrangement, measured at
its acquisition date fair value. Subsequent changes in such fair values
are adjusted against the cost of acquisition where they qualify as
measurement period adjustments. All other subsequent changes in the
fair value of contingent consideration classified as an asset or liability
are accounted for in accordance with relevant NZ IFRSs. Changes
in the fair value of contingent consideration classified as equity are
not recognised.
The results of subsidiaries acquired or disposed of during the year are
included in the consolidated Income Statement from the effective date
of acquisition or up to the effective date of disposal, as appropriate.
All significant inter-company transactions and balances are eliminated
on consolidation.
In the Company’s financial statements, investments in subsidiaries are
recognised at their cost, less any adjustment for impairment.
An associate is an entity over which the Group has significant influence
and that is neither a subsidiary nor an interest in a joint venture.
Significant influence is the power to participate in the financial and
operating policy decisions of the investee but is not control or joint
control over those policies.
Investments in associates are incorporated in the Group financial
statements using the equity method of accounting. Under the equity
method, investments in associates are carried in the Balance Sheet
at cost as adjusted for post-acquisition changes in the Group’s share
of the net assets of the associate, less any impairment in the value of
individual investments. Losses of an associate in excess of the Group’s
interest in that associate (which includes any long-term interests that,
in substance, form part of the Group’s net investment in the associate)
are recognised only to the extent that the Group has incurred legal or
constructive obligations or made payments on behalf of the associate.
Where necessary, adjustments are made to bring the associates
accounting policies into line with those of the Group.
Any excess of the cost of acquisition over the Group’s share of the net
fair value of the identifiable assets, liabilities and contingent liabilities
of the associate recognised at the date of acquisition is recognised as
goodwill. The goodwill is included within the carrying amount of the
investment and is assessed for impairment as part of that investment.
The Group’s goodwill accounting policy is set out below. Any excess
of the Group’s share of the net fair value of the identifiable assets,
liabilities and contingent liabilities over the cost of acquisition, after
reassessment, is recognised immediately in profit or loss.
Where a group entity transacts with an associate of the Group, profits
and losses are eliminated to the extent of the Group’s interest in the
relevant associate.
b) Goodwill
Goodwill arising on the acquisition of the subsidiary is recognised as an
asset at the date that control is acquired (the acquisition date). Goodwill
is measured as the excess of the sum of the consideration transferred,
the amount of any non-controlling interest in the acquiree and the fair
value of the acquirer’s previously-held equity interest (if any) in the
acquiree over the fair value of the identifiable net assets recognised.
If, after reassessment, the Group’s interest in the fair value of the
acquiree’s identifiable net assets exceeds the sum of the consideration
transferred, the amount of any non-controlling interests in the acquiree
and the fair value of the acquirer’s previously-held equity interests
(if any) in the acquiree, the excess is recognised immediately in profit
or loss as a bargain purchase gain.
Goodwill is not amortised, but is reviewed for impairment at least
annually. For the purpose of impairment testing, goodwill is allocated
to each of the Group’s cash-generating units expected to benefit from
the synergies of the combination. Cash-generating units to which
goodwill has been allocated are tested for impairment annually, or more
frequently when there is an indication that the unit may be impaired.
The recoverable amount is the higher of fair value less cost to sell
and value in use. If the recoverable amount of the cash generating
unit is less than the carrying amount of the unit, the impairment
loss is allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the unit pro-rata
on the basis of the carrying amount of each asset in the unit. Any
impairment loss is recognised immediately in profit or loss and is not
subsequently reversed.
c)
Indefinite Life Intangible Assets
Indefinite life intangible assets represent purchased brand names and
trademarks and are initially recognised at cost. Such intangible assets
are regarded as having indefinite useful lives and they are tested
annually for impairment on the same basis as for goodwill.
d) Finite Life Intangible Assets
Finite life intangible assets are recorded at cost less accumulated
amortisation. Amortisation is charged on a straight line basis over their
estimated useful life. The estimated useful life of finite life intangible
assets is 1 to 10 years. The estimated useful life and amortisation
period is reviewed at the end of each annual reporting period.
e) Intangible Assets Acquired in a Business Combination
All potential intangible assets acquired in a business combination
are identified and recognised separately from goodwill where they
satisfy the definition of an intangible asset and their fair value can be
measured reliably.
f) Property, Plant and Equipment
The Group has five classes of property, plant and equipment:
• Freehold land;
• Buildings;
• Leasehold improvements;
• Plant and vehicles, and
• Office equipment, furniture and fittings.
Property, Plant and Equipment is initially recorded at cost.
Cost includes the original purchase consideration and those costs
directly attributable to bring the item of Property, Plant and Equipment
to the location and condition for its intended use.
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1. summary of accounting policies CONTINUED
After recognition as an asset Property, plant and equipment is carried
at cost less accumulated depreciation and impairment losses.
When an item of Property, plant and equipment is disposed of, any
gain or loss is recognised in the Income Statement and is calculated as
the difference between the sale price and the carrying value of the item.
Depreciation is provided for on a straight line basis on all Property,
plant and equipment other than freehold land, at depreciation rates
calculated to allocate the assets’ cost less estimated residual value,
over their estimated useful lives.
Leased assets are depreciated over the shorter of the unexpired period
of the lease and the estimated useful life of the assets.
The following useful lives are used in the calculation of depreciation:
• Buildings
• Leasehold improvements
• Plant and vehicles
20 to 100 years
2 to 15 years
2 to 20 years
• Office equipment, furniture and fittings 2 to 10 years
g) Impairment of Assets
At each balance sheet date, the Group reviews the carrying amounts of
its non current assets to determine whether there is any indication that
those assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any). Where the asset
does not generate cash flows that are independent from other assets,
the Group estimates the recoverable amount of the cash-generating
unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and
value in use. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and
the risks specific to the asset for which the estimates of future cash
flows have not been adjusted.
If the recoverable amount of an asset (cash-generating unit) is
estimated to be less than its carrying amount, the carrying amount of
the asset (cash-generating unit) is reduced to its recoverable amount.
An impairment loss is recognised as an expense immediately.
Where an impairment loss subsequently reverses, other than for
Goodwill and indefinite life intangible assets, the carrying amount of
the asset (cash-generating unit) is increased to the revised estimate
of its recoverable amount, but only to the extent that the increased
carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognised for the asset
(cash-generating unit) in prior years. A reversal of an impairment loss
is recognised as income immediately. Impairment losses can not be
reversed for Goodwill and indefinite life intangible assets.
h) Taxation
The tax currently payable is based on taxable profit for the year.
Taxable profit differs from profit as reported in the Income Statement
because it excludes items of income and expense that are taxable or
deductible in other years and further excludes items that are never
taxable or deductible. The Group’s liability for current tax is calculated
36 — 37
using tax rates that have been enacted or substantively enacted by the
balance sheet date.
Deferred tax is recognised on differences between the carrying
amounts of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable profit, and
is accounted for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable temporary
differences, and deferred tax assets are generally recognised for
all deductible temporary differences to the extent that it is probable
that taxable profits will be available against which those deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from goodwill or from the
initial recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable profit nor
the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
associated with investments in subsidiaries and associates, except
where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not
reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with such investments and
interests are only recognised to the extent that it is probable that there
will be sufficient taxable profits against which to utilise the benefits
of the temporary differences and they are expected to reverse in the
foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance
sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset
to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that
are expected to apply in the period in which the liability is settled or the
asset realised, based on tax (and tax laws) that have been enacted or
substantively enacted by the balance sheet date. The measurement
of deferred tax liabilities and assets reflects the tax consequences
that would follow from the manner which the Group expects, at the
reporting date, to recover or settle the carrying amount of its assets
and liabilities.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same
taxation authority and the Group intends to settle its current tax assets
and liabilities on a net basis.
Current and deferred tax are recognised as an expense or income
in profit or loss, except when they relate to items recognised in
other comprehensive income or directly in equity, in which case the
tax is also recognised in other comprehensive income or directly in
equity, or where they arise from the initial accounting for a business
combination. In the case of a business combination, the tax effect
is taken into account in calculating goodwill or in determining the
excess of the acquirer’s interest in the net fair value of the acquiree’s
identifiable assets, liabilities and contingent liabilities over the cost of
the business combination.
i)
Inventories
Inventories are recognised at the lower of cost, determined on a
weighted average basis, and net realisable value. Cost comprises
direct materials and, where applicable, direct labour costs and those
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the Financial Year ended 30 June, 2013
overheads that have been incurred in bringing the inventories to their
present location and condition. Net realisable value represents the
estimated selling price in the ordinary course of business, less all
estimated costs of completion and costs to be incurred in marketing,
selling and distribution.
j) Leases
The Group leases certain plant and equipment and land and buildings.
Finance leases, which effectively transfer to the Group substantially
all of the risks and benefits incident to ownership of the leased item,
are capitalised at the present value of the minimum lease payments.
The leased assets and corresponding liabilities are recognised and the
leased assets are depreciated over the period the Group is expected
to benefit from their use. Lease payments are apportioned between
finance charges and reduction of the lease obligation so as to achieve
a constant rate of interest on the remaining balance of the liability.
Finance charges are charged directly to the Income Statement.
Operating lease payments, where the lessors effectively retain
substantially all the risks and benefits of ownership of the lease items,
are included in the determination of the net surplus in equal instalments
over the period of the lease. Lease incentives received are recognised
as an integral part of the total lease payments made and also spread on
a basis representative of the pattern of benefits expected to be derived
from the leased asset.
k) Foreign Currency Translation
Functional and Presentation Currency
The financial statements of each of the Group’s entities are measured
using the currency of the primary economic environment in which the
entity operates (“the functional currency”).
The consolidated financial statements are presented in New Zealand
dollars, which is the Company’s functional currency and the Group’s
presentation currency.
Transactions and Balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing on the dates of the transactions.
At each balance sheet date, monetary assets and liabilities that
are denominated in foreign currencies are retranslated at the rates
prevailing on the balance sheet date. Non-monetary assets and
liabilities that are measured in terms of historical cost in a foreign
currency are not retranslated.
Exchange differences arising on the settlement of monetary items,
and on the retranslation of monetary items, are included in the Income
Statement for the period.
Foreign Operations
On consolidation, the assets and liabilities of the Group’s overseas
operations are translated at exchange rates prevailing at the reporting
date. Income and expense items are translated at the average rates for
the period. Exchange differences arising, if any, are recognised in the
foreign currency translation reserve, and recognised in profit or loss on
disposal of the foreign operation.
Goodwill and fair value adjustments arising on the acquisition of a
foreign entity are treated as assets and liabilities of the foreign entity
and translated at exchange rates prevailing at the reporting date.
l) Goods & Services Tax
Revenues, expenses, liabilities and assets are recognised net of the
amount of goods and services tax (GST), except for receivables and
payables which are recognised inclusive of GST.
Cash flows are included in the Cash Flow Statement on a net basis.
The GST component of cash flows arising from investing and financing
activities which is recoverable from, or payable to, the taxation authority
is classified as operating cash flows.
m) Financial Instruments
Financial assets and financial liabilities are recognised on the Group’s
Balance Sheet when the Group becomes a party to the contractual
provisions of the instrument.
Financial Assets
Financial assets are classified into the following specific categories:
“financial assets at fair value through profit or loss” (FVTPL), “held to
maturity” investments, “available for sale” (AFS) financial assets and
“loans and receivables”. The category depends on the nature and
purpose of the financial assets and is determined at initial recognition.
The categories used are set out below:
Cash & Cash Equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits, and other short-term highly liquid investments that are
readily convertible to a known amount of cash and are subject to
an insignificant risk of changes in value.
Financial Assets at Fair Value through Profit and Loss (FVTPL)
Financial assets are classified as FVTPL where the financial asset is
either held for trading or it is designated at FVTPL, such as derivative
financial asset instruments where hedge accounting is not applied.
Financial assets at FVTPL are stated at fair value, with any resultant
gain or loss recognised in profit or loss. The net gain or loss recognised
in profit or loss incorporates any dividend or interest earned on the
financial asset.
Loans and Receivables
Trade and other receivables, including advances to subsidiaries, that
have fixed or determinable payments that are not quoted in an active
market are classified as loans and receivables.
Loans and receivables are measured at initial recognition at fair
value, and are subsequently measured at amortised cost using the
effective interest rate method. Appropriate allowances for estimated
irrecoverable amounts are recognised in the Income Statement when
there is objective evidence that the asset is impaired. The allowance
recognised is measured as the difference between the asset’s
carrying amount and the present value of estimated future cash flows
discounted at the effective interest rate computed at initial recognition.
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1. summary of accounting policies CONTINUED
m) Financial Instruments continued
Equity Instruments
Equity instruments issued by the Company are recorded at the
proceeds received, net of direct issue costs.
Financial Liabilities
Financial liabilities are classified as either financial liabilities at “fair value
through profit or loss” (FVTPL) or “other financial liabilities” measured
at amortised cost. The classifications used are set out below:
Financial Liabilities at Fair Value through Profit and Loss
Financial liabilities are classified as FVTPL where the financial liability
is either held for trading or it is designated at FVTPL, such as derivative
financial liability instruments where hedge accounting is not applied.
Financial liabilities at FVTPL are stated at fair value, with any resultant
gain or loss recognised in profit or loss. The net gain or loss recognised
in profit or loss incorporates any dividend or interest paid on the
financial liability.
Other Financial Liabilities
Trade and other payables, including advances from subsidiaries and
bank loans, are initially measured at fair value, and subsequently
measured at amortised cost, using the effective interest rate method.
All loans and borrowings are initially recognised at cost, being the fair
value of the consideration received plus issue costs associated with
the borrowing. After initial recognition, these loans and borrowings are
subsequently measured at amortised cost using the effective interest
rate method which allocates the cost through the expected life of the
loan or borrowing. Amortised cost is calculated taking into account any
issue costs, and any discount or premium on drawdown.
Bank loans are classified as current liabilities (either advances or
current portion of term debt) unless the Group has an unconditional
right to defer settlement of the liability for at least 12 months after the
balance sheet date.
Derivative Financial Instruments
The Group enters into foreign currency forward exchange contracts
to hedge trading transactions, including anticipated transactions,
denominated in foreign currencies and from time to time uses interest
rate swaps to manage cash flow interest rate risk.
Derivatives are initially recognised at fair value on the date a derivative
contract is entered into and are subsequently remeasured to their
fair value. The resulting gain or loss is recognised in profit or loss
immediately unless the derivative is designated and effective as a
hedging instrument, in which event the timing of the recognition in
profit or loss depends on the nature of the hedge relationship. The
Group designates certain derivatives as cashflow hedges of highly
probable forecast transactions.
Cashflow Hedges
At the inception of the hedge relationship, the entity documents
the relationship between the hedging instrument and the hedged
item, along with its risk management objectives and its strategy for
undertaking various hedge transactions. Furthermore, at the inception
of the hedge and on an on-going basis, the Group documents whether
the hedging instrument that is used in a hedging relationship is highly
effective in offsetting changes in cashflows of the hedged items.
The effective portion of changes in the fair value of derivatives that are
designated and qualify as cashflow hedges are recognised in other
comprehensive income and accumulated as a separate component of
equity in the hedge reserve. The gain or loss relating to the ineffective
portion is recognised immediately in profit or loss.
Amounts deferred in equity are recycled in profit or loss in the periods
when the hedged item is recognised in profit or loss. However, when
the forecast transaction that is hedged results in the recognition of
a non-financial asset or a non-financial liability, the gains and losses
previously deferred in equity are transferred from equity and included
in the initial measurement of the cost of the asset and liability.
Hedge accounting is discontinued when the Group revokes the hedging
relationship, the hedging instrument expires, is terminated, exercised or
no longer qualifies for hedge accounting. Any cumulative gain or loss
deferred in equity at that time remains in equity and is recognised when
the forecast transaction is ultimately recognised in profit or loss. When
a forecast transaction is no longer expected to occur, the cumulative
gain or loss that was deferred in equity is recognised immediately in
profit or loss.
n) Revenue Recognition
Revenue is measured at the fair value of the consideration received or
receivable and represents amounts receivable for goods and services
provided in the normal course of business, net of returns, discounts,
allowances and GST. The following specific recognition criteria must
be met before revenue is recognised:
Sale of Goods
Sales of goods are recognised when significant risks and rewards
of owning the goods are transferred to the buyer, when the revenue
can be measured reliably and when management effectively ceases
involvement or control.
Rendering of Services
Revenue from services rendered is recognised when it is probable that
the economic benefits associated with the transaction will flow to the
entity. The stage of completion at balance date is assessed based on
the value of services performed to date as a percentage of the total
services to be performed.
Interest Income
Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the
rate that exactly discounts estimated future cash receipts through the
expected life of the financial asset to that asset’s net carrying amount.
Effective Interest Method
The effective interest rate method is a method of calculating the
amortised cost of a financial asset and of allocating interest income
over the relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash receipts (including all fees on
points paid or received that form an integral part of the effective interest
rate, transaction costs and other premiums or discounts) through the
38 — 39
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the Financial Year ended 30 June, 2013
s) Adoption of New Revised Standards and interpretations
The adoption of FRS 44 New Zealand Additional Disclosures has
resulted in a change to the way in which imputation credits have
been calculated. Imputation credits are now calculated on an
accruals basis. In accordance with the standard this change has
been applied retrospectively.
No other standards have been adopted during the year which have
had a material impact on these financial statements. We are not aware
of any standards in issue but not yet effective which would materially
impact the amounts recognised or disclosed in the financial statements.
expected life of the financial asset, or, where appropriate, a shorter
period to the carrying amount of the financial asset.
Royalties
Royalty revenue is recognised on an accrual basis in accordance with
the substance of the relevant agreement. Royalties determined on a
time basis are recognised on a straight line basis over the period of
the agreement. Royalty arrangements that are based on production,
sales and other measures are recognised by reference to the
underlying agreement.
Dividend Income
Dividend income from investments is recognised when the
shareholders’ rights to receive payment have been established.
o) Cash Flow Statement
The Cash Flow Statement is prepared exclusive of GST, which is
consistent with the method used in the Income Statement.
Definition of terms used in the Cash Flow Statement:
Operating activities include all transactions and other events that are
not investing or financing activities.
Investing activities are those activities relating to the acquisition and
disposal of current and non-current investments and any other non-
current assets.
Financing activities are those activities relating to changes in the
equity and debt capital structure of the Company and Group and
those activities relating to the cost of servicing the Company’s and
the Group’s equity capital.
p) Employee Entitlements
A liability for annual leave and long service leave is accrued and
recognised in the Balance Sheet. The liability is equal to the present
value of the estimated future cash outflows as a result of employee
services provided at balance date.
Provisions made in respect of employee benefits expected to be settled
within 12 months, are measured at their nominal values using the
remuneration rate expected to apply at the time of settlement.
Provisions made in respect of employee benefits which are not
expected to be settled within 12 months are measured at the present
value of the estimated future cash outflows to be made by the Group in
respect of services provided up to reporting date.
q) Segment Reporting
The Group’s operating segments are identified on the basis of internal
reports about components of the Group that are regularly reviewed by
the chief operating decision maker (Chief Executive) in order to allocate
resources to the segment and to assess its performance.
r) Research and Development
Expenditure on research activities, such as software development,
is recognised as an expense in the period it is incurred.
Group
2013
$’000
2012
$’000
Parent
2013
$’000
2012
$’000
NOTES
1,811,465
–
10,506
–
–
–
1,198
–
–
–
1,823,169
1,423,398
–
3,117
176
–
–
1,746
–
–
242
1,428,679
170
257
–
585
(128)
33
500
44
(1,597,475)
–
(2,227)
(1,263,234)
–
(1,769)
(8,979)
(614)
(9,593)
(14)
(4,922)
(1,514)
(6,572)
(415)
(6,987)
(293)
(3,674)
(94)
(9,227)
(29)
(76,213)
(2,927)
(5,993)
(71,833)
(1,781,967)
42,214
(7,614)
(34)
(58,783)
(1,728)
–
(48,817)
(1,393,027)
36,101
16
16
10
14
55,788
10,986
–
–
440
1,155
233
3,208
39,623
–
111,433
(2)
257
–
–
(43,655)
(1,406)
(192)
(5,019)
(9)
(5,028)
(20)
(552)
–
(1,061)
(5)
(10,967)
(107)
(5,993)
(7,724)
(76,710)
34,978
56,002
10,269
–
–
440
128
972
4,700
22,677
–
95,188
(47)
33
–
–
(44,103)
(1,252)
(205)
(3,716)
(606)
(4,322)
(4)
(433)
–
(716)
(7)
(11,134)
(79)
–
(8,235)
(70,490)
24,684
2. profit from operations
(a) Revenue
Revenue consisted of the following items:
Revenue from the sale of goods – external
Revenue from the sale of goods – inter group
Revenue from the rendering of services
Management fees – external
Management fees – inter group
Interest revenue – inter group
Interest revenue – external
Royalty income – inter group
Dividends – inter group
Gain on disposal of associate
3
1
0
2
t
r
o
p
e
R
l
a
u
n
n
A
—
d
e
t
i
m
i
l
p
u
o
r
g
s
o
b
e
(b) Profit before income tax expense
Profit before income tax has been arrived at after crediting/
(charging) the following gains and losses from operations:
Gain/(loss) on disposal of property, plant and equipment
Change in fair value of derivative financial instruments
Share of dividends from associates
Share of equity accounted investments (net of dividends
from associates)
Profit before income tax has been arrived at after
(charging) the following expenses by nature:
Cost of sales – external
Purchases inter group
Write-down of inventory
Finance costs:
Bank interest
Other interest expense
Total finance costs
Net bad and doubtful debts arising from:
Impairment loss on trade and other receivables
Depreciation of property, plant and equipment
Amortisation of finite life intangibles
Operating lease rental expenses:
Minimum lease payments
Donations
Employee benefit expense
Defined contribution plan expenses
Costs associated with acquisition of subsidiaries
Other expenses
Total expenses
Profit before income tax expense
40 — 41
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the Financial Year ended 30 June, 2013
3.
income taxes
(a) Income tax recognised in income statement
Tax expense/(credit) comprises:
Current tax expense/(credit):
Current year
Adjustments for prior years
Deferred tax expense/(credit):
Origination and reversal of temporary differences
Adjustments for prior years
Group
2013
$’000
2012
$’000
Parent
2013
$’000
2012
$’000
13,135
860
13,995
171
(159)
12
10,108
(245)
9,863
(2,026)
315
(1,711)
(460)
299
(161)
270
9
279
118
514
(419)
95
(78)
19
(59)
36
Total income tax expense
14,007
8,152
The prima facie income tax expense on pre-tax accounting profit from operations
reconciles to the income tax expense in the financial statements as follows:
Profit before income tax
Income tax expense calculated at 28% (2012: 28%)
Non-deductible expenses/(non-assessable income)
Effect of differences arising from investment interests in other jurisdictions
Effect of different tax rates of subsidiaries operating in other jurisdictions
Under/(over) provision of income tax in previous year
Other adjustments
42,214
36,101
34,978
24,684
11,820
998
–
441
701
47
10,108
(11)
(289)
(47)
70
(1,679)
9,794
(9,984)
–
–
308
–
6,912
(6,187)
(289)
–
(400)
–
Total income tax expense
14,007
8,152
118
36
The tax rates used are principally the corporate tax rates of 28% (2012: 28%) payable by New Zealand and 30% (2012: 30%) payable by
Australian corporate entities on taxable profits under tax law in each jurisdiction.
3.
income taxes CONTINUED
(b) Current tax assets and liabilities
Current tax assets:
Current tax refundable
Current tax liabilities:
Current tax payable
(c) Deferred tax balance
Deferred tax assets comprise:
Temporary differences
Deferred tax liabilities comprise:
Temporary differences
Taxable and deductible temporary differences arise from the following:
Group
2013
$’000
2012
$’000
Parent
2013
$’000
2012
$’000
1,628
735
722
333
6,378
6,988
–
–
34,361
7,426
310
645
(48,365)
(14,004)
(10,880)
(3,454)
(2,220)
(1,910)
(2,026)
(1,381)
3
1
0
2
t
r
o
p
e
R
l
a
u
n
n
A
—
d
e
t
i
m
i
l
p
u
o
r
g
s
o
b
e
2013
Gross deferred tax liabilities:
Property, plant and equipment
Provisions
Other financial assets – derivatives
Intangible assets
Gross deferred tax assets:
Property, plant and equipment
Provisions
Doubtful debts and impairment losses
Other financial liabilities – derivatives
Tax losses carried forward
Net movement in deferred tax
2012
Gross deferred tax liabilities:
Property, plant and equipment
Provisions
Intangible assets
Gross deferred tax assets:
Provisions
Doubtful debts and impairment losses
Other financial liabilities – derivatives
Tax losses carried forward
Net movement in deferred tax
42 — 43
Group
Group
Opening
balance
$’000
Charged to
income
$’000
Group
Charged
to other
comprehensive
income
$’000
Group
Group
Acquisitions
$’000
Closing
balance
$’000
(1,936)
(26)
–
(8,918)
(10,880)
–
4,610
766
71
1,979
7,426
(1,609)
–
(7,097)
(8,706)
3,219
744
191
384
4,538
163
17
26
164
370
(30)
148
6
(221)
(285)
(382)
(12)
(327)
(26)
(1)
(354)
445
22
3
1,595
2,065
1,711
–
–
(316)
387
71
(68)
(346)
38
(43)
(103)
(522)
(451)
–
–
–
–
–
–
(123)
–
(123)
(123)
–
–
–
(37,926)
(37,926)
6,309
20,768
–
762
–
27,839
(1,773)
(9)
(290)
(46,293)
(48,365)
6,211
25,180
810
569
1,591
34,361
–
–
(1,820)
(1,820)
(1,936)
(26)
(8,918)
(10,880)
946
–
–
–
946
4,610
766
71
1,979
7,426
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the Financial Year ended 30 June, 2013
2013
Gross deferred tax liabilities:
Property, plant and equipment
Intangible assets
Other financial assets – derivatives
Gross deferred tax assets:
Provisions
Doubtful debts and impairment losses
Other financial liabilities – derivatives
Net movement in deferred tax
2012
Gross deferred tax liabilities:
Property, plant and equipment
Intangible assets
Gross deferred tax assets:
Provisions
Doubtful debts and impairment losses
Other financial liabilities – derivatives
Net movement in deferred tax
Parent
Parent
Opening
balance
$’000
Charged to
income
$’000
Parent
Charged
to other
comprehensive
income
$’000
(637)
(1,389)
–
(2,026)
571
39
35
645
(650)
(1,388)
(2,038)
524
39
130
693
21
–
–
21
(300)
–
–
(300)
(279)
13
(1)
12
47
–
–
47
59
–
–
(215)
(215)
–
–
(35)
(35)
(250)
–
–
–
–
–
(95)
(95)
(95)
Parent
Closing
balance
$’000
(616)
(1,389)
(215)
(2,220)
271
39
–
310
(637)
(1,389)
(2,026)
571
39
35
645
No liability has been recognised in respect of the amount of temporary differences including foreign currency translation reserves associated with
undistributed earnings of off-shore subsidiaries because the Group is in a position to control the timing of the reversal of the temporary differences
and it is probable that such differences will not reverse in the foreseeable future.
(d) Imputation credit account balances
Imputation credits available directly and indirectly to shareholders
of the parent company:
Group
2013
$’000
Group
2012
$’000
1,399
8,690
4. key management personnel compensation
Short-term employee benefits
5. remuneration of auDitors
Auditor of the parent entity (Deloitte)
Audit of the financial statements
Audit related services for review of financial statements not included above
Investigating accountants report*
Due diligence
Information technology services
Financial modelling assistance
Internal control assurance services
* These costs have been netted off against share capital
Other auditors of entities in the group
Audit of financial statements
Other non-audit services
6. traDe anD other receivables
Trade receivables (i)
Other receivables
Allowance for impairment (ii)
Group
2013
$’000
9,625
9,625
2012
$’000
7,092
7,092
Parent
2013
$’000
6,942
6,942
2012
$’000
4,727
4,727
432
6
105
278
10
92
12
935
224
9
233
364
50
–
121
140
–
18
693
–
–
–
64
–
105
258
10
–
–
437
–
–
–
70
26
–
121
140
–
–
357
–
–
–
742,028
11,449
(17,048)
736,429
176,476
1,395
(2,159)
175,712
9,678
859
(138)
10,399
8,937
144
(138)
8,943
(i) Trade receivables are non-interest bearing and generally on monthly terms. No interest is charged on the trade receivables for the first 60
days from the date of the invoice. Thereafter, interest may be charged at 3% per annum on the outstanding balance. The Group’s Pharmacy
business units generally holds collateral over its trade receivables balances.
(ii) Allowance for Impairment
Balance at the beginning of the year
Arising from businesses acquired
Impairment loss recognised on trade receivables
Amounts written off as uncollectible
Amounts recovered during year
Impairment losses reversed
Effect of foreign currency exchange differences
(2,159)
(15,329)
(222)
280
(7)
208
181
(17,048)
(1,625)
(631)
(296)
395
(5)
3
–
(2,159)
(138)
–
(20)
20
–
–
–
(138)
(138)
–
(4)
4
–
–
–
(138)
In determining the recoverability of trade and other receivables, the Group considers any change in the credit quality of the trade receivable
from the date credit was initially granted up to reporting date. The concentration of credit risk is limited due to the customer base being large
and unrelated. Accordingly, the Directors believe that there is no further credit provision required in excess of the allowance for doubtful debts.
The impairment recognised represents the difference between the carrying amount of these trade receivables and the present value of
the expected liquidation proceeds. The Group does not hold any collateral over these balances. The net carrying amount is considered to
approximate their fair value.
3
1
0
2
t
r
o
p
e
R
l
a
u
n
n
A
—
d
e
t
i
m
i
l
p
u
o
r
g
s
o
b
e
44 — 45
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the Financial Year ended 30 June, 2013
(iii) Aging of impaired trade and other receivables
Current
30 – 60 days
60 – 90 days
90 days+
Group
2013
$’000
4,334
2,387
961
12,888
20,570
2012
$’000
43
50
32
3,413
3,538
Parent
2013
$’000
–
–
–
138
138
2012
$’000
–
–
–
138
138
(iv) Aging of past due but not impaired trade and other receivables
Included in the trade and other receivables balance are debtors with a carrying amount of Group $82.36m (2012: $23.74m) and Parent $2.217m
(2012: $1.51m) which are past due at the reporting date for which the Group and/or Parent has not provided any impairment as the amounts
are still considered recoverable.
30 – 60 days
60 – 90 days
90 days+
7. prepayments
Current portion
Term portion
8.
inventories
Finished Goods
At cost
At net realisable value
9. other financial assets – Derivatives
At Fair Value:
Foreign currency forward contracts (i)
Foreign currency forward contracts (ii)
Interest rate swaps (ii)
(i) Financial asset carried at fair value through profit or loss (“FVTPL”).
(ii) Designated and effective as cash flow hedging instrument carried at fair value.
65,760
8,785
7,815
82,360
17,692
3,128
2,920
23,740
1,806
198
213
2,217
821
113
576
1,510
7,837
16
7,853
4,540
195
4,735
838
–
838
1,577
–
1,577
558,350
–
558,350
162,705
292
162,997
9,146
–
9,146
9,114
–
9,114
160
2,615
771
3,546
109
–
–
109
160
885
771
1,816
–
–
–
–
10. property, plant anD equipment
Gross carrying amount
Balance at 1 July, 2011
Additions
Disposals
Acquisition through business combinations
Net foreign currency exchange differences
Balance at 30 June, 2012
Additions
Disposals
Acquisition through business combinations
Net foreign currency exchange differences
Group
Freehold land
at cost
$’000
Buildings
at cost
$’000
Leasehold
improvement
at cost
$’000
Plant and
vehicles
at cost
$’000
Office
equipment
furniture &
fittings at cost
$’000
1,895
–
–
187
(6)
2,076
–
(49)
28,529
(316)
9,043
–
–
238
(8)
9,273
4
(90)
10,238
(131)
2,058
273
(370)
1,071
(31)
3,001
120
(128)
7,252
(182)
7,466
1,773
(476)
4,311
(111)
12,963
1,569
(667)
21,675
(630)
12,438
1,825
(648)
882
(42)
14,455
792
(1,083)
7,810
(266)
Total
$’000
32,900
3,871
(1,494)
6,689
(198)
41,768
2,485
(2,017)
75,504
(1,525)
Balance at 30 June, 2013
30,240
19,294
10,063
34,910
21,708
116,215
3
1
0
2
t
r
o
p
e
R
l
a
u
n
n
A
—
d
e
t
i
m
i
l
p
u
o
r
g
s
o
b
e
Accumulated depreciation
Balance at 1 July, 2011
Disposals
Depreciation expense
Net foreign currency exchange differences
Balance at 30 June, 2012
Disposals
Depreciation expense
Net foreign currency exchange differences
Balance at 30 June, 2013
Net book value
As at 30 June, 2012
As at 30 June, 2013
–
–
–
–
–
–
–
–
–
(2,051)
–
(273)
3
(2,321)
42
(367)
9
(1,182)
289
(376)
13
(1,256)
95
(476)
64
(4,219)
5
(1,214)
27
(5,401)
562
(2,016)
174
(8,474)
969
(1,811)
15
(9,301)
1,067
(2,063)
104
(15,926)
1,263
(3,674)
58
(18,279)
1,766
(4,922)
351
(2,637)
(1,573)
(6,681)
(10,193)
(21,084)
2,076
30,240
6,952
16,657
1,745
8,490
7,562
28,229
5,154
11,515
23,489
95,131
46 — 47
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the Financial Year ended 30 June, 2013
Freehold land
at cost
$’000
Buildings
at cost
$’000
Parent
Leasehold
improvement
at cost
$’000
Plant and
vehicles
at cost
$’000
Office
equipment
furniture &
fittings at cost
$’000
Gross carrying amount
Balance at 1 July, 2011
Additions
Disposals
Balance at 30 June, 2012
Additions
Disposals
Balance at 30 June, 2013
Accumulated depreciation
Balance at 1 July, 2011
Disposals
Depreciation expense
Balance at 30 June, 2012
Disposals
Depreciation expense
Balance at 30 June, 2013
Net book value
As at 30 June, 2012
As at 30 June, 2013
694
–
–
694
–
–
694
–
–
–
–
–
–
–
2,920
–
–
2,920
–
–
2,920
(298)
–
(83)
(381)
–
(80)
(461)
694
694
2,539
2,459
198
117
(198)
117
14
–
131
(148)
159
(11)
–
–
(13)
(13)
117
118
Total
$’000
6,047
1,457
(1,010)
6,494
234
(567)
823
795
(224)
1,394
113
(300)
1,412
545
(588)
1,369
107
(267)
1,207
1,209
6,161
(559)
206
(139)
(492)
287
(205)
(410)
902
797
(1,005)
583
(200)
(622)
267
(254)
(2,010)
948
(433)
(1,495)
554
(552)
(609)
(1,493)
747
600
4,999
4,668
Group plant includes finance leases capitalised with a cost of $5.261m (2012: $0.304m) and book value of $4.936m (2012: $0.222m).
Land and buildings in Auckland with a carrying value of $5.196m (2012: $5.381m) were last valued on 30 June 2011 and determined by Telfer
Young (Auckland) Limited, in accordance with NZ IAS16, to have a fair value of $9.6m.
Land and buildings in Christchurch has a carrying value of $3.153m (2012: $3.233m) which approximates its expected fair value.
Land and buildings acquired as part of the acquisition of ZHHA Pty Limited (Symbion Group) at 1 June 2013 were valued by Jones Lang LaSalle,
in accordance with IAS16, with a fair value of $37.9m. This valuation has been reflected in the property, plant and equipment acquired as part of
the acquisition of the Symbion Group – refer note 24.
Aggregate depreciation recognised as an expense during the year:
Buildings
Leasehold improvements
Plant and vehicles
Office equipment, furniture & fittings
Group
2013
$’000
367
476
2,016
2,063
4,922
2012
$’000
273
376
1,214
1,811
3,674
Parent
2013
$’000
80
13
205
254
552
2012
$’000
83
11
139
200
433
11. capital work in progress
Capital work in progress
Group
2013
$’000
787
2012
$’000
9
Parent
2013
$’000
–
2012
$’000
–
The capital work in progress relates to software development ($469,000) – there are no further costs to complete the project (2012: $48,000),
and a refrigeration system ($318,000) – the cost to complete the project is $137,000.
12. gooDwill
Gross carrying amount
Balance at beginning of financial year
Recognised on acquisition during the year
Effects of foreign currency exchange differences
Net book value
Allocation of goodwill to cash-generating units
Group
2013
$’000
2012
$’000
180,553
542,736
(1,131)
722,158
114,132
66,669
(248)
180,553
Parent
2013
$’000
1,728
–
–
1,728
2012
$’000
1,728
–
–
1,728
Goodwill has been allocated for impairment testing purposes to the following cash generating units representing the lowest level at which
management monitor goodwill:
• Australian Hospital and Primary Healthcare sector (EBOS Group Pty Limited): Healthcare Australia.
• New Zealand Consumer, Hospital, Primary Healthcare, Aged Care and International Product Supplies (EBOS Group Limited): Healthcare NZ.
• New Zealand Pharmacy Wholesaler and Logistic Services (PRNZ Limited): Healthcare – Pharmacy/Logistics NZ.
• New Zealand Animal care sector (Masterpet Corporation Limited (NZ)): Animal care – NZ.
• Australian Animal care sector (Masterpet Australia Pty Limited): Animal care – Australia.
The carrying amount of goodwill allocated to cash-generating units is as follows:
Healthcare Australia
Healthcare NZ (Parent)
Healthcare – Pharmacy/Logistics NZ
Animal care – NZ
Animal care – Australia
Group
2013
$’000
503,910
1,728
95,043
66,375
55,102
722,158
2012
$’000
17,137
1,728
95,043
66,375
270
180,553
Parent
2013
$’000
–
1,728
–
–
–
1,728
2012
$’000
–
1,728
–
–
–
1,728
The goodwill recognised in relation to the acquisition of the Symbion Group was also tested for impairment as at 30 June 2013. The respective
amounts arising from the acquisition of Symbion Group’s healthcare and animal care operations have been allocated to the Healthcare Australia and
Animal care – Australia cash generating units.
During the year ended 30 June 2013, management have determined that there is no impairment of any of the cash generating units containing
goodwill (2012: Nil).
3
1
0
2
t
r
o
p
e
R
l
a
u
n
n
A
—
d
e
t
i
m
i
l
p
u
o
r
g
s
o
b
e
48 — 49
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the Financial Year ended 30 June, 2013
The recoverable amounts (i.e. higher of value in use and fair value less costs to sell) of those units are determined on the basis of value in use
calculations. Management has determined that the recoverable amount calculations are most sensitive to changes in the following assumptions:
• Healthcare Australia, Healthcare NZ, Animal care NZ and Animal care Australia – Maintaining market share and gross margin being maintained
during a period of high volatility in foreign currency during the budget period.
• Pharmacy/Logistics NZ – Maintaining market share and controlling operational costs during the assessment period.
• Gross margins during the period for Healthcare Australia, Healthcare NZ, Pharmacy/Logistics NZ, Animal care NZ and Animal care Australia
are estimated by management based on average gross margins achieved before the start of the assessment period. Market shares during the
assessment period are assessed by management based on average market shares achieved in the period immediately before the start of the
budget period, adjusted each year for any anticipated growth.
The value in use calculation uses cash flow projections based on financial forecasts approved by management covering a five year period and
managements past experience.
Annual growth rates of 1.4% to 5% (2012: 2.5% to 4%), which is below current historical growth rates; an allowance of 1.4% to 5% (2012: 2%
to 3%) for increase in expenses, and pre tax discount rates of 13.1% to 17.4% (2012: 12.9% to 17.4%) have been applied to these projections.
Cash flows beyond the five year period have been extrapolated using a 2% to 2.5% (2012: 2%) growth rate. Management also believes that
any reasonably possible change in the key assumptions would not cause the carrying amount of any of the cash generating units to exceed their
recoverable amount.
13. inDefinite life intangibles
Gross carrying amount
Balance at 1 July, 2011
Recognised on acquisition during the year
Net foreign currency exchange differences
Balance at 30 June, 2012
Recognised on acquisition during the year
Net foreign currency exchange differences
Group
Symbion
Brands
$’000
Group
Other
Pharmacy
Brands
$’000
Group
Masterpet
Brand &
Intangibles
$’000
Group
Group
Trademarks
$’000
Total
$’000
–
–
–
–
28,871
(310)
6,556
–
(25)
6,531
–
(118)
–
7,110
–
7,110
–
–
17,240
–
–
17,240
–
–
23,796
7,110
(25)
30,881
28,871
(428)
Balance at 30 June, 2013
28,561
6,413
7,110
17,240
59,324
Net book value
As at 30 June, 2012
As at 30 June, 2013
–
28,561
6,531
6,413
7,110
7,110
17,240
17,240
30,881
59,324
Gross carrying amount
Balance at 1 July, 2011
Balance at 30 June, 2012
Balance at 30 June, 2013
Net book value
As at 30 June, 2012
As at 30 June, 2013
Parent
Other
Pharmacy
Brands
$’000
4,960
4,960
4,960
4,960
4,960
Parent
Total
$’000
4,960
4,960
4,960
4,960
4,960
3
1
0
2
t
r
o
p
e
R
l
a
u
n
n
A
—
d
e
t
i
m
i
l
p
u
o
r
g
s
o
b
e
13. inDefinite life intangibles CONTINUED
The carrying amount of indefinite life intangibles (brands and trademarks) has been allocated to the cash generating units as follows:
Healthcare Australia
Healthcare NZ
Pharmacy/Logistics NZ
Animal care – NZ
Group
2013
$’000
32,584
2,390
17,240
7,110
59,324
2012
$’000
4,141
2,390
17,240
7,110
30,881
Management have assessed these as having an indefinite useful life. In coming to this conclusion management considered expected expansion of
the usage of the brands across other products and markets, the typical product life cycle of these assets, the stability of the industry in which the
brands are operating, the level of maintenance expenditure required and the period of legal control over the brands.
During the current year management have determined that there is no impairment of any of the brands (2012: Nil).
The value in use calculation uses cash flow projections based on financial forecasts approved by management covering a five year period and
managements past experience.
The calculation of the recoverable amounts for indefinite life intangibles have been determined based on a value in use calculation that uses cash
flow projections based on financial budgets approved by management covering a five-year period. Management has determined that the recoverable
amount calculations are most sensitive to change in the following assumptions. Annual growth rates of 1.4% to 3% (2012: 2% to 5%), and an
allowance of 1.4% to 3% (2012: 2% to 4%) for increases to expenses, and pre-tax discount rates of 12.9% to 19.2% (2012:13.2% to 19.2%)
have been applied to these projections. Cash flows beyond the five-year period have been extrapolated using a 2% to 2.5% (2012: 2%) growth
rate. Management also believes that any reasonably possible change in the key assumptions would not cause the carrying amount of the brands to
exceed their recoverable amount.
Group
Group
Supply
Contracts
$’000
Software
$’000
Group
Customer
Relationships/
Contracts
$’000
1,490
–
–
–
1,490
(1,458)
(32)
–
(1,490)
330
1,853
142
(67)
2,258
(83)
(367)
35
(415)
–
95,443
–
(1,026)
94,417
–
(1,115)
–
(1,115)
Total
$’000
1,820
97,296
142
(1,093)
98,165
(1,541)
(1,514)
35
(3,020)
32
–
247
1,843
–
93,302
279
95,145
14. finite life intangibles
Gross carrying amount
Balance at 30 June, 2012
Recognised on acquisition during the year
Other additions
Net foreign exchange differences
Balance at 30 June, 2013
Accumulated amortisation & impairment
Balance at 30 June, 2012
Amortisation expense
Net foreign exchange differences
Balance at 30 June, 2013
Net book value
As at 30 June, 2012
As at 30 June, 2013
50 — 51
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the Financial Year ended 30 June, 2013
Allocated to cash generating units as follows:
Pharmacy/Logistics NZ
Animal care – NZ
Animal care – Australia
Healthcare Australia
15. subsiDiaries
Parent and Head Entity
EBOS Group Limited
The following entities comprise the trading and holding companies of the Group:
Subsidiaries (all balance dates 30 June)
EBOS Healthcare (Australia) Pty Limited
EBOS Group Pty Limited
EBOS Health & Science Pty Limited
EBOS Shelf Company New Zealand Limited
EBOS Shelf Company Australia Pty Limited
PRNZ Limited
EBOS Limited Partnership
Healthcare Distributors Pty Limited
Masterpet Corporation Limited
Natures Recipe Pet Foods Limited
Masterpet Australia Pty Limited
Botany Bay Imports and Exports Pty Limited
Aristopet Pty Ltd (formerly Beaphar Australia Pty Limited)
EBOS Australia Holdings Pty Limited
ZHHA Pty Ltd*
ZAP Services Pty Ltd*
Symbion Pty Ltd*
Intellipharm Pty Ltd*
Clinect Pty Ltd*
Lyppard Australia Pty Ltd*
APHS Packaging Pty Ltd*
2013
$’000
–
127
13,976
81,042
95,145
2012
$’000
32
81
166
–
279
Country of
Incorporation
Ownership Interests
and Voting Rights
2012
2013
Australia
Australia
Australia
New Zealand
Australia
New Zealand
Australia
Australia
New Zealand
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
0%
0%
0%
0%
0%
0%
* These entities represent the entities acquired as a result of the acquisition of the Symbion Group on 1 June 2013.
These entities currently have a 31 December balance date, however it is intended to have this changed to 30 June.
16. investment in associates
Name of business acquired
Principal activities
Date of acquisition
Proportion of shares and
voting rights acquired
Cost of acquisition
$’000
2012
Animates NZ Holdings Limited
Animal care supplies
December 2011
50%
18,150
The reporting date for Animates NZ Holdings Limited is 30 June. Animates NZ Holdings Limited is incorporated in New Zealand.
Although the company holds 50% of the shares and voting power this entity is not deemed to be a subsidiary as the other 50% is held by a single
shareholder and significant transactions require 75% shareholder approval.
In December 2011 the Group acquired a 50% shareholding in Aristopet Pty Ltd (formerly Beaphar Australia Pty Limited) for $50,000. In June
2012 the remaining 50% shareholding was also acquired by the Group at which point Aristopet Pty Ltd became a subsidiary of the Group.
The summary financial information in respect of the Group’s associate is set out below:
Statement of financial position
Total assets
Total liabilities
Net assets
Group’s share of net assets
Income Statement
Total revenue
Total profit for the period
Group’s share of profits of associates
Movement in the carrying amount of the Group’s investment in associates:
Balance at beginning of financial year
New investments
Share of equity accounted investments (before dividends)
Share of dividends
Disposal of associate
Balance at end of financial year
3
1
0
2
t
r
o
p
e
R
l
a
u
n
n
A
—
d
e
t
i
m
i
l
p
u
o
r
g
s
o
b
e
2013
$’000
2012
$’000
28,461
(21,512)
6,949
3,475
28,965
(23,185)
5,780
2,890
56,061
1,170
585
35,157
1,046
544
Group
2013
$’000
18,428
–
585
–
–
19,013
2012
$’000
–
18,200
544
(500)
184
18,428
Goodwill included in the carrying amount of the Group’s investment in associates
15,945
15,945
The Group’s share of the contingent liabilities of associates
The Group’s share of capital commitments of associates
–
–
–
1,736
52 — 53
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the Financial Year ended 30 June, 2013
17. borrowings
Current
Bank loans (i)
Bank loans – securitisation facility (ii)
Finance lease liabilities (iii)
Advances from subsidiaries (at call) (iv)
Non-current
Bank loans (i)
Finance lease liabilities (iii)
Total borrowings
Group
2013
$’000
21,798
193,877
1,189
–
216,864
151,357
3,296
154,653
371,517
2012
$’000
10,156
–
534
–
10,690
Parent
2013
$’000
4,000
–
–
29,319
33,319
2012
$’000
4,000
–
–
29,576
33,576
129,684
1,064
130,748
141,438
87,412
–
87,412
120,731
107,250
–
107,250
140,826
(i) Bank term loans and revolving cash advance facilities of $196.3m, of which $69.5m was unutilised at 30 June 2013, operate under a negative
pledge deed provided to ANZ National Bank Limited and Bank of New Zealand Limited by the parent company and its subsidiaries, excluding
the Symbion Group entities acquired on 1 June 2013.
Bank loans of $46.3m at 30 June 2013, resulting from the Symbion Group acquisition, are subject to a security over the Symbion Group assets,
excluding trade receivables that are security for the securitisation facility referred to below, in favour of the National Australia Bank Limited.
There have been no breaches of the banking covenants.
(ii) The Group, through a subsidiary company, has a trade debtor securitisation facility of $496.7m of which $302.8m was unutilised at 30 June
2013. The securitisation facility involves Symbion Pty Limited providing security over the future cash flows of specific trade receivables of
Symbion Pty Limited, which meet certain criteria, in return for cash finance on a contracted percentage of the security provided. As recourse,
in the event of default by a trade debtor, remains with Symbion Pty Limited the trade receivables provided as security and the funding provided
by the National Australia Bank Limited are recognised on the Group’s balance sheet.
Interest is charged on the average monthly balance of the funding provided under the securitisation facility. At 30 June 2013 the value of trade
receivables as security under this securitisation facility was $283.8m. The net cash flows associated with the securitisation programme are
disclosed in the cash flow statement as cash flows from financing activities.
The Symbion Pharmacy Services Trade Receivables Trust (“SPS Trust”), which is consolidated, was established solely for their purpose of
purchasing qualifying trade receivables from Symbion Pty Limited and funding the same from National Australia Bank Limited. The SPS Trust
has directly provided funding to Symbion Pty Limited to acquire the rights to the cashflows of the securitised receivables.
(iii) Secured by the assets leased.
(iv) Unsecured.
The fair value of non current borrowings is approximately equal to their carrying amount.
On 5 July 2013 the Group refinanced its term debt, working capital and securitisation facilities that were in place at 30 June 2013. As part of this
process the Group also combined its security agreements with its bankers – refer notes 28 and 32.
18. traDe anD other payables
Current
Trade payables
Other payables
Non-current
Other payables
Total trade and other payables
Group
2013
$’000
2012
$’000
781,156
111,489
892,645
258,209
17,339
275,548
8,489
901,134
3,943
279,491
Parent
2013
$’000
4,344
4,828
9,172
–
9,172
2012
$’000
5,045
3,086
8,131
–
8,131
3
1
0
2
t
r
o
p
e
R
l
a
u
n
n
A
—
d
e
t
i
m
i
l
p
u
o
r
g
s
o
b
e
19. leases
Finance leases
Minimum future lease payments
Finance leases relate to office equipment, plant and motor vehicles. The Group has options to purchase the equipment for a nominal amount at the
conclusion of the lease agreements.
Finance lease liabilities
Minimum Future Lease Payments
Present Value of Minimum Future Lease Payments
Group
2013
$’000
1,504
2012
$’000
665
3,590
1,199
5,094
(609)
1,864
(266)
4,485
1,598
Not later than 1 year
Later than 1 year and not later than
5 years
Minimum lease payments*
Less future finance charges
Present value of minimum lease
payments
Included in the financial statements as:
Finance leases – current portion
Finance leases – non current portion
Parent
2013
$’000
2012
$’000
–
–
–
–
–
Group
2013
$’000
1,189
2012
$’000
534
3,296
1,064
4,485
–
1,598
–
–
–
–
–
–
4,485
1,598
1,189
3,296
4,485
534
1,064
1,598
Parent
2013
$’000
2012
$’000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
* Minimum future lease payments include the aggregate of all lease payments and any guaranteed residual.
The fair value of the finance lease liabilities is approximately equal to their carrying value.
Operating leases
Leasing arrangements
Operating leases relate to certain property and equipment, with lease terms of between one to fifteen years with options to extend for a further one
to fifteen years. All operating lease contracts contain market review clauses in the event that the Company/Group exercises its option to renew.
The Company/Group does not have an option to purchase the leased asset at the expiry of the lease period.
Operating leases
Non-cancellable operating lease payments
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Longer than 5 years
Group
2013
$’000
2012
$’000
Parent
2013
$’000
23,701
72,114
48,209
144,024
8,680
22,706
11,697
43,083
1,021
2,943
2,520
6,484
2012
$’000
1,015
3,096
3,192
7,303
54 — 55
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the Financial Year ended 30 June, 2013
20. other financial liabilities – Derivatives
At fair value:
Foreign currency forward contracts (i)
Interest rate swaps (ii)
(i) Financial liability carried at fair value through profit or loss (“FVTPL”).
(ii) Designated and effective as cashflow hedging instrument carried at fair value.
21. share capital
Group
2013
$’000
–
2,872
2,872
2012
$’000
100
430
530
Parent
2013
$’000
–
–
–
2012
$’000
98
124
222
Fully paid ordinary shares
Balance at beginning of financial year
Issue of shares to executives and staff under employee share ownership scheme
52,107
63
107,970
250
52,107
–
107,970
–
2013
No
’000
2013
$’000
2012
No.
’000
2012
$’000
Dividend reinvested
– October 2012
– April 2013
Bonus issue – June 2013
Institutional placement – June 2013
Share issue costs
429
357
1,999
10,591
–
65,546
3,445
3,100
–
–
–
–
–
–
–
90,026
(3,503)
201,288
–
–
52,107
–
–
107,970
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Changes to the Companies Act in 1993 abolished the authorised capital and par value concept in relation to share capital from 1 July, 1994.
Therefore, the Company does not have a limited amount of authorised capital and issued shares do not have a par value.
Given the immateriality of the amounts involved, the issue of shares to executives and staff under the employee ownership scheme have not
been accounted for pursuant to NZ IFRS-2: Share Based Payment. Since the inception of the employee ownership scheme in December 1994,
452,100 (2012: 389,500) shares have been issued raising $971,905 (2012: $721,505).
22. reserves
Foreign currency translation reserve
Balance at beginning of the year
Translation of foreign operations
Balance at end of the year
Group
2013
$’000
690
(6,365)
(5,675)
2012
$’000
2,473
(1,783)
690
Exchange differences, principally relating to the translation from Australian dollars, being the functional currency of the Group’s foreign controlled
entities in Australia, into New Zealand dollars, are brought to account by entries made directly to the foreign currency translation reserve.
Retained Earnings
Balance at beginning of the year
Profit for the year
Dividends (note 23)
Balance at end of the year
Cash Flow Hedge Reserve
Balance at beginning of the year
Gain recognised on cash flow hedges
Related income tax
Balance at end of the year
Group
2013
$’000
2012
$’000
Parent
2013
$’000
100,359
28,207
(21,298)
107,268
88,824
27,949
(16,414)
100,359
20,061
34,860
(21,298)
33,623
(418)
2,773
(359)
1,996
(471)
176
(123)
(418)
(90)
1,532
(250)
1,192
2012
$’000
11,827
24,648
(16,414)
20,061
(338)
343
(95)
(90)
The hedging reserve represents gains and losses recognised on the effective portion of cash flow hedges. The cumulative deferred gain or loss on
the hedge is recognised in profit or loss when the hedged transaction impacts profit or loss.
23. DiviDenDs
Recognised amounts
Fully paid ordinary shares
– Final – prior year
– Taxable bonus issue – current year
– Interim – current year
Unrecognised amounts
Final dividend
2013
Cents per
share
Total
$’000
2012
Cents per
share
Total
$’000
20.5
–
17.5
38.0
10,682
1,411
9,205
21,298
18.0
–
13.5
31.5
9,379
–
7,035
16,414
15.0
21,992
20.5
10,682
A dividend of 15.0 cents per share was declared on 20 August 2013 with the dividend being paid on 22 October 2013. As the dividend
reinvestment plan will be in operation for this dividend shareholders may elect to reinvest part or all of their dividends in the Company.
The anticipated cash impact of the dividend is $15.0m (2012: $7.323m).
3
1
0
2
t
r
o
p
e
R
l
a
u
n
n
A
—
d
e
t
i
m
i
l
p
u
o
r
g
s
o
b
e
56 — 57
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the Financial Year ended 30 June, 2013
24. acquisition of subsiDiaries
Name of business acquired
Principal activities
Date of acquisition
Proportion of
shares acquired
Cost of acquisition
$’000
2013
ZHHA Pty Limited (Symbion Group)
Healthcare and animal care supplies
June 2013
100%
865,000
865,000
Assets and liabilities acquired 2013
Current assets
Cash and cash equivalents
Trade and other receivables
Provision for doubtful debts
Prepayments
Inventories
Other financial assets
– derivatives
– investment – subordinated notes
Non-current assets
Property, plant and equipment
Deferred tax assets
Indefinite life intangibles
Finite life intangibles
Current liabilities
Trade and other payables
Finance leases
Bank loans
Employee benefits
Other financial liabilities – derivatives
Non-current liabilities
Bank loans
Trade and other payables
Finance leases
Employee benefits
Deferred tax liabilities
Net assets acquired
Goodwill on acquisition
Consideration
Less cash and cash equivalents acquired
Deferred purchase consideration
Net cash (inflow) on acquisition
Symbion
Group
$’000
Fair value
adjustment
$’000
Fair value on
acquisition
$’000
49,263
682,961
(15,329)
4,067
375,709
338
59,541
96,543
27,839
–
27,774
(705,340)
(199)
(249,097)
(15,215)
(2,879)
(33,405)
(4,460)
(3,298)
(4,531)
(4,914)
285,368
–
–
–
–
–
–
(59,541)1
(21,039)2
–
28,8713
69,5223
(7,446)4
–
59,5411
–
–
–
–
–
–
(33,012)5
36,896
49,263
682,961
(15,329)
4,067
375,709
338
–
75,504
27,839
28,871
97,296
(712,786)
(199)
(189,556)
(15,215)
(2,879)
(33,405)
(4,460)
(3,298)
(4,531)
(37,926)
322,264
542,736
865,000
(49,263)
(865,000)
(49,263)
1. To offset investment in subordinated notes against borrowings as a result of a difference in accounting policies, resulting in the actual amount
owing to the National Australia Bank being recognised as bank loans.
2. Decrease to the value of plant and equipment by $10.1m and a reduction in land and buildings acquired by $10.9m as a result of an
independent valuation performed at acquisition.
3. To recognise customer relationships and brands as a result of independent valuations performed at acquisition.
4. Provision to recognise required maintenance and land duty on property acquired as part of the acquisition.
5. Deferred tax resulting from the above fair value adjustments recognised and also to recognise deferred tax on the intangibles of the Symbion
Group which were not previously recognised as a result of a difference in accounting policies.
24. acquisition of subsiDiaries CONTINUED
Name of business acquired
Principal activities
Date of acquisition
Proportion of
shares acquired
Cost of acquisition
$’000
2012
Masterpet Corporation Ltd (MCL) supplies
Beaphar Australia Pty Ltd (BAPL) supplies
Assets and liabilities acquired 2012:
Animal care
Animal care
December 2011
June 2012
100%
100%
86,800
265
87,065
MCL
$’000
Fair value
adjustment
$’000
Fair value on
acquisition
$’000
BAPL
$’000
Fair value
adjustment
$’000
Fair value on
acquisition
$’000
Total fair value
on acquisition
$’000
3
1
0
2
t
r
o
p
e
R
l
a
u
n
n
A
—
d
e
t
i
m
i
l
p
u
o
r
g
s
o
b
e
Current assets
Cash and cash equivalents
Trade and other receivables
Provision for doubtful debts
Prepayments
Inventories
Other financial assets:
derivatives
Non-current assets
Property, plant and equipment
Receivable from jointly controlled
entity
Deferred tax assets
Indefinite life intangibles
Finite life intangibles
Current liabilities
Bank overdraft
Trade and other payables
Finance leases
Bank loans
Current tax payable
Employee benefits
Other financial liabilities – derivatives
Non-current liabilities
Bank loans
Finance leases
Employee benefits
Deferred tax liabilities
Net assets acquired
Goodwill on acquisition
Gain on disposal of associate
Consideration
Less cash and cash equivalents
acquired
Plus bank overdraft acquired
Net cash outflow on acquisition
342
29,985
(631)
981
28,057
214
5,587
1,258
946
610
318
(3,957)
(12,444)
(536)
(224)
(2,066)
(2,133)
(31)
(29,046)
(1,054)
(448)
–
15,728
–
–
–
–
–
–
–
–
–
6,500*
–
–
–
–
–
–
–
–
–
–
–
(1,820)
4,680
342
29,985
(631)
981
28,057
765
850
–
109
1,435
214
–
5,587
1,102
(2,315)
–
–
–
–
(1,528)
–
–
–
(188)
–
–
–
–
–
230
1,258
946
7,110
318
(3,957)
(12,444)
(536)
(224)
(2,066)
(2,133)
(31)
(29,046)
(1,054)
(448)
(1,820)
20,408
66,392
–
86,800
(342)
3,957
90,415
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
765
850
–
109
1,435
1,107
30,835
(631)
1,090
29,492
–
214
1,102
6,689
(2,315)
–
–
–
–
(1,528)
–
–
–
(188)
–
–
–
–
–
230
277
(242)
265
(765)
–
(500)
(1,057)
946
7,110
318
(3,957)
(13,972)
(536)
(224)
(2,066)
(2,321)
(31)
(29,046)
(1,054)
(448)
(1,820)
20,638
66,669
(242)
87,065
(1,107)
3,957
89,915
* As part of the assessment in identifying the assets and liabilities acquired on the acquisition of Masterpet Corporation Limited a $6.5m brand
value was identified and recognised at acquisition.
58 — 59
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the Financial Year ended 30 June, 2013
Goodwill arising on acquisition
Goodwill arose in the acquisition of ZHHA Pty Limited (Symbion Group) in 2013 and Masterpet Corporation Limited (Masterpet Group) in 2012
because the cost included a control premium paid. In addition, the consideration paid for the benefit of future expected cashflows above the current
fair value of the assets acquired and the expected synergies and future market benefit expected to be obtained. These benefits are not recognised
separately from goodwill as the future economic benefits arising from that cannot be reliably measured and they do not meet the definition of
identifiable intangible assets.
The Symbion Group and the Masterpet Group were acquired as they share, with EBOS, many of the core competencies required to be successful
in a market focused on health professionals, whether that’s doctors or veterinarians. The Symbion Group provides the Group with a significant
presence in the Australian healthcare sector, which may also provide a beachhead for further growth opportunities in this sector. Masterpet provides
the Group with growth opportunities in the NZ and Australian animal care sectors and an ability to spread income streams away from government
funding sources, as does the Symbion Group’s animal care operation – Lyppard Pty Limited.
Impact of acquisition on the results of the Group
Included in the Group profit for the current year is $4.687m attributable to the Symbion Group (2012: $8.232m Masterpet Group).
Had this business combination been effected at 1 July 2012 the revenue of the Group from continuing operations, inclusive of costs associated
with acquisition of subsidiaries, would have been $6,240m (2012: $1,490m) and the Group profit for the period from continuing operations would
have been $90.0m (2012: $29.6m).
25. notes to the cash flow statement
(a) Subsidiaries acquired
Note 24 sets out details of the subsidiaries acquired.
Details of the acquisitions are as follows:
Consideration
Cash and cash equivalents
Deferred purchase consideration
Represented by:
Net assets acquired (Note 24)
Investment in subsidiaries
Goodwill on acquisition
Gain on disposal of associate
Consideration
Net cash (inflow)/outflow on acquisition
Cash and cash equivalents consideration
Less cash and cash equivalents acquired
Plus bank overdraft acquired
Group
2013
$’000
2012
$’000
Parent
2013
$’000
2012
$’000
–
865,000
865,000
322,264
–
542,736
–
865,000
–
(49,263)
–
(49,263)
87,065
–
87,065
20,638
–
66,669
(242)
87,065
87,065
(1,107)
3,957
89,915
–
865,000
865,000
–
865,000
–
–
865,000
–
–
–
–
105,000
–
105,000
–
105,000
–
–
105,000
105,000
–
–
105,000
Group
2013
$’000
–
2,186
2,186
2012
$’000
307
1,398
1,705
Parent
2013
$’000
–
1,250
1,250
2012
$’000
–
1,250
1,250
367,032
371,975
739,007
139,840
64,383
204,223
91,412
64,750
156,162
111,250
64,750
176,000
28,207
27,949
34,860
24,648
4,922
(170)
–
1,514
(585)
(257)
12
(441)
4,995
(560,276)
(3,118)
(395,353)
(1,503)
621,643
21,832
(6,421)
(323,196)
3,674
128
(242)
94
(228)
(33)
(1,711)
(97)
1,585
(22,818)
(1,215)
(41,190)
3,876
15,770
4,093
(1,918)
(43,402)
552
2
–
–
–
(257)
279
–
576
(1,456)
739
(32)
(389)
6,787
2,802
–
8,451
433
47
–
–
–
(33)
(59)
–
388
1,240
(633)
(767)
(976)
(695)
800
–
(1,031)
5,993
–
–
–
310,416
26,415
41,980
28,112
–
43,887
–
24,005
25. notes to the cash flow statement CONTINUED
(b) Financing facilities
Bank overdraft facility, reviewed annually and payable at call:
Amount used
Amount unused
Bank loan facilities with various maturity dates through to 2016
(2012: August 2016):
Amount used
Amount unused
(c) Reconciliation of profit for the year with cash flows from
operating activities
Profit for the year
Add/(less) non-cash items:
Depreciation
(Gain)/loss on sale of property, plant and equipment
(Gain) on disposal of associate
Amortisation of finite life intangible assets
Share of profits from associates
(Gain) on derivatives/financial instruments
Deferred tax
Provision for doubtful debts
Movement in working capital:
Trade and other receivables
Prepayments
Inventories
Current tax refundable/payable
Trade and other payables
Employee benefits
Foreign currency loss on translation of working capital balances
Cash costs classified as investing activities:
Costs associated with acquisition of subsidiaries
Working capital items acquired
Net cash inflow from operating activities
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60 — 61
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the Financial Year ended 30 June, 2013
26. earnings per share calculation
Basic earnings per share (refer Income Statement and Note 21)
Basic earnings per share
Earnings used in the calculation of total basic earnings per share
Group
2013
Cents
2012
Cents
52.9
53.6
$’000
28,207
$’000
27,949
Weighted average number of ordinary shares for the purposes of basic earnings per share
53,361
52,107
Diluted earnings per share (refer Income Statement and Note 21)
Diluted earnings per shares
Earnings used in the calculation of total diluted earnings per share
Cents
52.9
Cents
53.6
$’000
28,207
$’000
27,949
Weighted average number of ordinary shares for the purposes of diluted earnings per share
53,361
52,107
27. commitments for expenDiture
Capital expenditure commitments
Plant
Software development
28. contingent liabilities & contingent assets
Group
2013
$’000
18,046
802
2012
$’000
–
–
Parent
2013
$’000
–
–
Group
2013
$’000
2012
$’000
Parent
2013
$’000
2012
$’000
–
–
2012
$’000
Contingent liabilities
Guarantees given to third parties
Guarantees arising from the deed of cross guarantee with other entities
in the wholly-owned group
16,908
10,062
458
600
–
–
35,420
28,590
In May 2012 the Company renegotiated its bank facilities and entered into a banking syndication agreement with ANZ National Bank Limited
and Bank of New Zealand Limited. Bank term loans and revolving cash advance facilities operate under a negative pledge deed provided to the
syndicated banks by the Company and its subsidiaries.
On 1 June 2013 the Group acquired the Symbion Group of companies (refer note 15). From acquisition until 5 July 2013 the Symbion Group debt
and securitisation facilities acquired were subject to a security over the Symbion Group assets in favour of the National Australia Bank Limited.
On 5 July 2013, post balance date, all Group debt and securitisation facilities became subject to a new single negative pledge deed to the
syndicated banks by the Company and its subsidiaries. The Group’s syndicated bankers from 5 July 2013 to the present are ANZ National Bank
Limited, Bank of New Zealand Limited and the National Australia Bank Limited.
Previously the Company has entered into a deed of guarantee for certain wholly-owned subsidiaries. The amount disclosed as a contingent liability
represents total liabilities of the Group of company’s party to that, less the liabilities recognised by the Group. This amount disclosed also represents
the maximum credit risk exposure to the Group and Parent.
A subsidiary company (PRNZ Limited) is guarantor for certain loans made to pharmacies by the ANZ National Bank Limited amounting to $5.283m
(2012: $7.635m). The Directors are of the opinion that provisions are not required in respect of these matters, as it is not probable that a future
sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.
28. contingent liabilities & contingent assets CONTINUED
A performance bond of up to $1m (2012: $1m) is also held by the bank on behalf of a supplier.
Property lease guarantees of $9.278m (2012: $Nil) are held by the bank on behalf of landlords of the Symbion Group.
All companies acquired as part of the Symbion Group acquisition, refer note 15, are party to a deed of cross guarantee in which each entity
guarantees the debts of the others.
29. segment information
(a) Products and services from which reportable segments derive their revenues
The Group’s reportable segments under NZ IFRS 8 are as follows:
Healthcare: Incorporates the sale of healthcare products in a range of sectors, own brands, retail healthcare and wholesale activities.
Animal care: Incorporates the sale of animal care products in a range of sectors, own brands, retail and wholesale activities. The Animal care
operations were acquired in December 2011.
Corporate: Includes net funding costs and parent company central administration expenses that have not been allocated to the healthcare or animal
care segments. The corporate segment is the result of a 2013 financial year change in the Group’s internal reporting structure. Comparative
numbers have been restated.
(b) Segment revenues and results
The following is an analysis of the Group’s revenue and results by reportable segment:
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Revenue from external customers
Healthcare
Animal care
Corporate
Profit/(loss) before depreciation, amortisation, finance costs and income tax
Healthcare
Animal care
Corporate
Segment expenses
Healthcare:
Depreciation
Amortisation of finite life intangibles
Income tax expense
Animal care:
Depreciation
Amortisation of finite life intangibles
Income tax expense
Corporate:
Finance costs
Income tax credit
Profit/(loss) for the year
Healthcare
Animal care
Corporate
Group
2013
$’000
2012
$’000
1,652,450
169,521
1,198
1,340,633
86,300
1,746
49,068
18,670
(9,495)*
39,571
10,150
(2,865)
(3,785)
(1,194)
(13,146)
(3,142)
–
(10,294)
(1,137)
(320)
(4,588)
(532)
(94)
(616)
(9,593)
3,727
(6,987)
2,758
30,943
12,625
(15,361)*
26,135
8,908
(7,094)
* Includes costs associated with the acquisition of subsidiaries of $5.993m.
The accounting policies of the reportable segments are consistent with the Group’s accounting policies. Segment result represents profit before
depreciation, amortisation, finance costs and tax. This is the measure reported to the chief operating decision maker for the purposes of resource
allocation and assessment of segment performance.
62 — 63
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the Financial Year ended 30 June, 2013
(c) Segment Assets
Assets are not allocated to segments as they are not reported to the chief operating decision maker at a segment level.
(d) Revenues from major products and services
The Group’s major products and services are the same as the reportable segments i.e. healthcare, animal care and corporate. Revenues are
reported above under (b) Segment revenues and results.
(e) Geographical information
The Group operates in two principal geographical areas; New Zealand (country of domicile) and Australia.
The Group’s revenue from external customers by geographical location (of the reportable segment) and information about its segment assets
(non-current assets) excluding financial instruments and deferred tax assets are detailed below:
Continuing and discontinued operations
Revenue from external customers
New Zealand
Australia
Non-current assets
New Zealand
Australia
(f) Information about major customers
No revenues from transactions with a single customer amount to 10% or more of the Group’s revenues (2012: Nil).
30. relateD party Disclosures
(a) Parent Entities
The Parent entity in the Group is EBOS Group Limited.
(b) Equity interests in Related Parties
Equity interests in subsidiaries
Details of the percentage of ordinary shares held in subsidiaries are disclosed in note 15 to the financial statements.
(c) Transactions with Related Parties
Transactions involving the parent entity
Amounts receivable from and payable to related parties at balance date are:
PRNZ Limited
EBOS Group Pty Limited
EBOS Shelf Company New Zealand Limited
Healthcare Distributors Limited
EBOS Health and Science Pty Limited
Masterpet Corporation Limited
Zuellig Group Incorporated
Group
2013
$’000
2012
$’000
1,257,302
565,867
1,823,169
1,252,123
176,556
1,428,679
206,945
765,616
972,561
210,465
24,941
235,406
2013
$’000
2012
$’000
–
4,073
(29,319)
348
1,364
28,683
(865,000)
(859,851)
3,570
1,925
(29,576)
348
1,087
19,836
–
(2,810)
30. relateD party Disclosures CONTINUED
At 30 June 2013 ZHHA Pty Limited owed CB Norwood Pty Limited, a subsidiary of the Zuellig Group, $7.230m and Zuellig Group Incorporated
$1.856m.
During the financial year, EBOS Group Limited received dividends of $39.623m (2012: $22.677m) from its subsidiaries.
During the financial year, EBOS Group Limited provided accounting and administration services to its subsidiaries for a consideration of $0.44m
(2012: $0.44m) and charged royalties for the use of intellectual property, brand names and patents totalling $3.208m (2012: $4.7m).
During the financial year, EBOS Group Limited rented warehouse space and contracted labour from its subsidiaries for a total cost of $Nil
(2012: $90,000).
Terms/price under which related party transactions were entered into
All loans advanced to and payable by subsidiaries are unsecured, subordinate to other liabilities and are at call. Interest rates determined by the
Directors were 0% – 5% (2012: 0% – 5%). During the financial year, EBOS Group Limited received interest of $1.155m (2012: $0.128m) from
loans to subsidiaries, and paid interest of $Nil (2012: $0.606m) to subsidiaries.
No amounts were provided for doubtful debts relating to debts due from related parties at reporting date (2012: Nil).
Guarantees provided or received
As detailed in note 28, EBOS Group Limited has entered into a deed of cross guarantee with certain wholly-owned subsidiaries.
(d) Key Management Personnel Remuneration
Details of key management personnel remuneration are disclosed in note 4 to the financial statements.
31. financial instruments
(a) Financial risk management objectives
The Group’s corporate treasury function provides services to the Groups entities, co-ordinates access to domestic and international financial
markets, and manages the financial risks relating to the operation of the Group.
The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. The use of
financial derivatives is governed by the Group’s policies approved by the Board of Directors, which provide written principles on the use of financial
derivatives. Compliance with policies and exposure limits is reviewed on a regular basis.
(b) Market Risk
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Group enters
into a variety of derivative financial instruments to manage its exposure to interest rate and foreign currency risk, including:
• forward foreign exchange contracts to hedge the exchange rate risk arising on imports of product; and
• interest rate swaps to mitigate the risk of rising interest rates.
(c) Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise. Exchange rate
exposures are managed within approved policy parameters utilising forward foreign exchange contracts.
Forward foreign exchange contracts
It is the policy of the Group to enter into forward foreign exchange contracts to cover specific foreign currency payments and receipts within 60%
to 100% of the exposure generated. The Group also enters into forward foreign exchange contracts to manage the risk associated with anticipated
sales and purchase transactions out to 12 months within 20% to 75% of the exposure generated.
The fair value of forward exchange contracts is derived using inputs supplied by third parties that are observable either directly (i.e. prices) or
indirectly (i.e. derived from prices). Therefore the Group has categorised these derivatives as Level 2 under the fair value hierarchy contained within
the amendment to NZ IFRS 7.
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64 — 65
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the Financial Year ended 30 June, 2013
Outstanding Contracts
2013
2012
2013
FC’000
2012
FC’000
2013
$’000
2012
$’000
2013
$’000
2012
$’000
Average exchange rate
Foreign currency
Contract value
Fair value
Group
Buy Australian Dollars
Less than 3 months
3 to 6 months
6 to 9 months
Buy Euro
Less than 3 months
3 to 6 months
6 to 9 months
9 to 12 months
Buy Pounds
Less than 3 months
Buy US Dollars
Less than 3 months
3 to 6 months
6 to 9 months
Sell Australian Dollars
Less than 3 months
Buy Australian Dollars
Less than 3 months
Buy Euro
Less than 3 months
Buy Pounds
Less than 3 months
Buy US Dollars
Less than 3 months
Sell Australian Dollars
Less than 3 months
0.821
0.823
0.837
0.632
0.638
0.631
0.624
0.779
–
–
0.618
0.620
0.626
–
1,214
525
525
1,496
4,020
1,410
2,349
1,131
–
–
1,604
900
300
–
1,478
638
627
2,368
6,301
2,233
3,763
1,452
–
–
2,597
1,453
479
–
0.557
0.490
450
510
808
1,042
0.824
0.856
0.833
0.797
0.807
0.825
2,356
3,657
800
4,043
1,500
500
2,860
4,270
960
5,073
1,859
606
(46)
(19)
(8)
150
523
176
287
77
188
474
87
0.839
–
105,000
–
125,147
151,453
–
14,561
885
2,774
(12)
–
–
(48)
(13)
3
–
(35)
40
44
30
–
9
Average exchange rate
Foreign currency
Contract value
Fair value
2013
2012
2013
FC’000
2012
FC’000
2013
$’000
2012
$’000
2013
$’000
2012
$’000
Parent
0.832
0.777
600
800
721
1,030
(14)
(11)
0.631
0.607
250
300
396
494
0.557
0.489
450
510
808
1,042
0.827
0.773
850
1,100
1,028
1,423
25
77
72
0.839
–
105,000
–
125,147
128,100
–
3,989
885
1,045
(18)
(35)
(34)
–
(98)
The fair value of forward foreign exchange contracts outstanding are recognised as other financial assets/liabilities. Hedge accounting is applied for
certain forward foreign exchange contracts. Typically these contracts that have hedge accounting applied are for periods greater than 3 months.
3
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31. financial instruments CONTINUED
(d) Interest rate risk management
The Group is exposed to interest rate risk as it borrows funds at floating interest rates. The risk is managed by the use of interest rate swap contracts.
Interest rate swap contracts
Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts calculated on
agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing interest rates on debt held. The fair value of
interest rate swaps are based on market values of equivalent instruments at the reporting date.
Outstanding Contracts
Outstanding variable rate for fixed contracts
Less than 1 year
1 to 3 years
3 to 5 years
Outstanding Contracts
Outstanding floating for fixed contracts
3 to 5 years
Group
Average contracted
fixed interest rate
2013
%
2012
%
Notional principal amount
Fair value
2013
$’000
2012
$’000
2013
$’000
5.17
4.68
3.24
5.13
4.03
3.28
90,877
22,424
70,482
183,783
2,500
5,102
74,082
81,684
(2,168)
(555)
621
(2,102)
Average contracted
fixed interest rate
2013
%
2012
%
Parent
Notional principal amount
Fair value
2013
$’000
2012
$’000
3.16
3.16
57,500
57,500
57,500
57,500
2013
$’000
771
771
2012
$’000
(16)
(82)
(332)
(430)
2012
$’000
(124)
(124)
The fair value of interest rate swaps outstanding are recognised as other financial assets/liabilities. Hedge accounting has been adopted. The fair
value of interest rate swaps is derived using inputs supplied by third parties that are observable either directly (i.e. prices) or indirectly (i.e. derived
from prices). Therefore the Group has categorised these derivatives as Level 2 under the fair value hierarchy contained within the amendment to
NZ IFRS 7.
66 — 67
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the Financial Year ended 30 June, 2013
(e) Liquidity
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve banking facilities by continuously monitoring
forecast and actual cashflows and matching maturity profiles of financial assets and liabilities.
The following tables detail the Group’s remaining contractual maturity for its financial assets and financial liabilities. The tables have been drawn
up based on the undiscounted cash flows of the financial assets and liabilities. The table includes both interest and principal cash flows.
Maturity Dates
Group – 2013
Financial assets:
Cash and cash equivalents
Trade and other receivables
Other financial assets –
derivatives
Financial liabilities:
Trade and other payables
Finance leases
Bank loans
Other financial liabilities –
derivatives
Group – 2012
Financial assets:
Cash and cash equivalents
Trade and other receivables
Other financial assets –
derivatives
Financial liabilities:
Bank overdraft
Trade and other payables
Finance leases
Bank loans
Other financial liabilities –
derivatives
Weighted
average
effective
interest
rate
%
2.5
–
–
–
8.6
4.6
–
Weighted
average
effective
interest
rate
%
On Demand
$’000
Less than
1 year
$’000
1–2 Years
$’000
2–3 Years
$’000
3–4 Years
$’000
4–5 Years
$’000
5+ Years
$’000
Total
$’000
198,014
736,429
–
934,443
–
–
3,546
3,546
–
–
–
–
–
–
–
–
–
–
–
–
892,124
–
–
521
1,504
232,078
5,255
2,841
79,859
521
749
18,068
521
–
61,436
–
892,124
2,872
236,975
–
87,955
–
19,338
–
61,957
–
–
–
–
521
–
–
–
521
–
–
–
–
198,014
736,429
3,546
937,989
4,167
–
–
903,630
5,094
391,441
–
4,167
2,872
1,303,037
Maturity Dates
On Demand
$’000
Less than
1 year
$’000
1–2 Years
$’000
2–3 Years
$’000
3–4 Years
$’000
4–5 Years
$’000
5+ Years
$’000
Total
$’000
2.5
–
–
5.4
–
8.6
4.6
–
52,646
175,712
–
228,358
307
275,027
–
–
–
–
109
109
–
–
–
–
–
–
–
–
–
521
665
15,676
–
521
495
9,931
–
521
704
61,307
–
275,334
530
17,392
–
10,947
–
62,532
–
–
–
–
–
521
–
7,080
–
7,601
–
–
–
–
–
521
–
65,315
–
65,836
–
–
–
–
–
4,687
–
–
52,646
175,712
109
228,467
307
282,319
1,864
159,309
–
4,687
530
444,329
31. financial instruments CONTINUED
Maturity Dates
Parent – 2013
Financial assets:
Cash and cash equivalents
Trade and other receivables
Other financial assets –
derivatives
Advances to subsidiaries
Financial liabilities:
Trade and other payables
Bank loans
Advances from subsidiaries
Parent – 2012
Financial assets:
Cash and cash equivalents
Trade and other receivables
Advances to subsidiaries
Financial liabilities:
Trade and other payables
Bank loans
Other financial liabilities –
derivatives
Advances from subsidiaries
3
1
0
2
t
r
o
p
e
R
l
a
u
n
n
A
—
d
e
t
i
m
i
l
p
u
o
r
g
s
o
b
e
Weighted
average
effective
interest
rate
%
On Demand
$’000
Less than
1 year
$’000
1–2 Years
$’000
2–3 Years
$’000
3–4 Years
$’000
4–5 Years
$’000
5+ Years
$’000
Total
$’000
2.5
–
–
3.8
–
4.5
–
89,305
10,399
–
–
99,704
9,172
–
–
9,172
–
–
1,816
35,769
37,585
–
8,045
29,319
37,364
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
58,155
–
58,155
–
5,316
–
5,316
–
27,155
–
27,155
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
89,305
10,399
1,816
35,769
137,289
9,172
98,671
29,319
137,162
Weighted
average
effective
interest
rate
%
On Demand
$’000
Less than
1 year
$’000
1–2 Years
$’000
2–3 Years
$’000
3–4 Years
$’000
4–5 Years
$’000
5+ Years
$’000
Total
$’000
Maturity Dates
2.5
–
5.0
–
4.5
–
–
7,413
8,943
–
16,356
8,131
–
–
–
8,131
–
–
28,104
28,104
–
23,045
222
29,576
52,843
–
–
–
–
–
8,027
–
–
8,027
–
–
–
–
–
59,481
–
–
59,481
–
–
–
–
–
5,265
–
–
5,265
–
–
–
–
–
26,855
–
–
26,855
–
–
–
–
–
–
–
–
–
7,413
8,943
28,104
44,460
8,131
122,673
222
29,576
160,602
As disclosed in note 32 the $865m deferred consideration payable owing to the Zuellig Group was settled on 5 July 2013. No interest was payable
on this balance.
As at 30 June 2013 the Group maintains the following lines of credit:
• $2.2m (2012: $1.7m) overdraft facilities and term loan/revolving credit facilities of $123m maturing in August 2014 and of $119m maturing
in 2016 (2012: $124m maturing in August 2014 and $80m maturing in 2016).
• Interest is payable at a base rate plus specified margin.
• A subsidiary of the Group, Symbion Pty Limited, has a trade debtor securitisation facility of $496.7m maturing in September 2015.
68 — 69
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the Financial Year ended 30 June, 2013
(f) Sensitivity Analysis
(i) Interest Rate Sensitivity Analysis
The sensitivity analysis below has been determined based on the exposure to interest rates for financial instruments at the balance date. The
analysis is prepared assuming the amount of the financial instrument outstanding at the balance sheet date was outstanding for the whole year.
The impact to Profit for the Year and Total Equity as a result of a 100 basis point movement in interest rates is as follows:
+ 100 basis point shift up in yield curve
Impact on Profit
Impact on Total Equity
– 100 basis point shift down in yield curve
Impact on Profit
Impact on Total Equity
(ii) Foreign Currency Sensitivity Analysis
Group
2013
$’000
–
3,142
2012
$’000
–
2,939
Parent
2013
$’000
–
1,626
2012
$’000
–
2,144
–
(3,249)
–
(3,083)
–
(1,692)
–
(2,251)
The following table details the Group’s sensitivity to a 10% increase or decrease on foreign currency contracts against the Group’s functional
currency (New Zealand dollars). The sensitivity analysis includes any outstanding foreign currency contracts and adjusts their translation at the year
end for a 10% change in foreign currency rates. A positive number below indicates an increase in profit and equity where the functional currency
weakens 10% against the relevant currency.
+ 10% shift in NZD rate
Impact on Profit for the Year
Impact on Total Equity
– 10% shift in NZD rate
Impact on Profit for the Year
Impact on Total Equity
Group
2013
$’000
2012
$’000
Parent
2013
$’000
(283)
8,733
(353)
(1,323)
(283)
11,010
346
(10,668)
432
1,619
346
(13,457)
2012
$’000
(353)
(353)
432
432
In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year end exposure does not reflect
the exposure during the year.
The significant increase in the outcome of the current year sensitivity analysis is in relation to A$105m in foreign currency contracts in place at
30 June 2013 for the acquisition of the Symbion Group which was settled on 5 July 2013.
(g) Credit Risk Management
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Group. The Group has
adopted a policy of only dealing with credit worthy counter parties and obtaining sufficient collateral where appropriate, as a means of mitigating the
risk of financial loss from defaults.
Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is
performed on the financial condition of the trade receivables.
The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the Group’s maximum
exposure to credit risk without taking account of the value of any collateral obtained.
The maximum credit risk associated with guarantees provided by the Group and Parent are disclosed in note 28.
The Group does not have any significant credit risk exposure to any single counter party or any Group of counter parties having similar
characteristics. The credit risk on liquid funds and derivative financial instruments is limited because the counter parties are banks with high credit
ratings assigned by international credit rating agencies.
31. financial instruments CONTINUED
(h) Fair value of financial instruments
The Directors consider that the carrying amount of financial assets and financial liabilities recorded in the financial statements approximates their
fair values.
The fair values and net fair values of financial assets and financial liabilities are determined as follows:
• the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined
with reference to quoted market prices;
• the fair value of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on
discounted cash flow analysis: and
• the fair value of derivative instruments are calculated using quoted prices. Where such prices are not available use is made of discounted cash
flow analysis using the applicable yield curve for the duration of the instruments.
Transaction costs are included in the determination of net fair value.
(i) Liquidity risk management
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring
forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
(j) Capital Risk Management
The Group manages its capital to ensure that each entity within the Group will be able to continue as a going concern while maximising the return
to stakeholders through the optimisation of the debt and equity. The Group’s overall strategy remains unchanged from 2012.
32. events after balance Date
On 4 July 2013 EBOS Group Limited received a net $140m in proceeds from a non re-nounceable rights issue to existing shareholders.
On 5 July 2013, in accordance with the sale and purchase agreement to purchase the Symbion Group, the full deferred consideration payable
balance of $865m was settled in favour of the previous owners of the Symbion Group, the Zuellig Group. This consideration was made through an
issue of EBOS Group Limited shares to the Zuellig Group of $498m and cash consideration of $367m. The cash consideration paid was funded by
additional debt funding of $134m and cash reserves.
The net effect of these transactions post balance date on the consolidated Balance Sheet of EBOS Group Limited were:
Share capital increased
Bank debt increased
Cash and cash equivalents decreased
Settlement payable decreased
$638m
$134m
$93m
$865m
As a result of this transaction the Zuellig Group holds 40% of the shares in EBOS Group Limited. Also on the 5 July 2013 two new Directors,
Peter Williams and Stuart McGregor, were appointed to the Board of EBOS Group Limited and represent the Zuellig Group.
As disclosed in notes 17 and 28 on 5 July 2013 the Group refinanced its syndicated banking facilities.
This refinancing replaced the Group’s syndicated term debt and working capital facilities that were in place at the time of the acquisition of the
Symbion Group along with the term debt, working capital and securitisation facilities that were acquired as part of the Symbion Group acquisition
on 1 June 2013.
These new syndicated facilities in place from 5 July 2013 are summarised below and are subject to a new negative pledge deed over the Group’s
assets in favour of the Group’s syndicated bankers. These new facilities are based on financial terms similar to those of the previous facilities in place.
3
1
0
2
t
r
o
p
e
R
l
a
u
n
n
A
—
d
e
t
i
m
i
l
p
u
o
r
g
s
o
b
e
Facility
Term debt facilities
Term debt facilities
Term debt facilities
Working capital facilities
Securitisation facility
Amount (NZD)
Maturity
$100.8m
$100.8m
$106.9m
$93.1m
$495.7m
July 2015
July 2016
July 2017
July 2015
September 2015
The effect of this refinancing was to retain the facility head room that was in place at 30 June 2013 in addition to funding the settlement of the
acquisition of the Symbion Group on 5 July 2013. This refinancing also extended the maturity profile of the Group’s borrowing facilities. The Group
is committed to repayments of its term debt facilities of approximately $20m per year with quarterly repayment terms.
Subsequent to year end the Board have approved a final dividend to shareholders. For further details please refer to note 23.
70 — 71
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the Financial Year ended 30 June, 2013
aDDitional stock exchange information
As at 31 July, 2013
Twenty Largest Shareholders
Sybos Holdings Pte Limited
Tea Custodians Limited – NZCSD
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