EMPIRED Ltd.
ABN 81 090 503 843
ANNUALREPORT
2009
EMPIRED Ltd.
ABN 81 090 503 843
CorporAte DiREcTORy
pRInCIpal plaCE Of buSInESS
perth
469 Murray Street
PERTH WA 6000
Telephone No: +618 9321 9401
Fax No: +618 9321 9402
Level 13
Septimus Roe Square
256 Adelaide Terrace
PERTH WA 6000
Telephone No: +618 9223 1234
Fax No: +618 9223 1230
melbourne
470 Collins Street
MELBOURNE VIC 3000
Telephone No: +613 8610 0700
Fax No: +613 8610 0701
WebSITe www.empired.com
DIRECTORS
Mel Ashton (Non - Executive Chairman)
Richard Bevan (Non - Executive Director)
Russell Baskerville (Managing Director & CEO)
COmpany SECRETaRy
Mark Waller
REgISTERED OffICE
469 Murray Street
PERTH WA 6000
Telephone No: +618 9321 9401
Fax No: +618 9321 9402
COmpany numbER
A.C.N: 090 503 843
COunTRy Of InCORpORaTIOn
Australia
COmpany DOmICIlE anD lEgal
fORm
Empired Limited is the parent entity and an
Australian Company limited by shares
lEgal aDvISERS
McKenzie Moncrieff Lawyers
Level 5, 37 St Georges Tce
Perth WA 6000
auDITORS
Grant Thornton (WA) Partnership
Level 1, 10 Kings Park Road
WEST PERTH WA 6005
ShaRE REgISTER
Computershare Investor Services Pty Ltd
Level 2, 45 St Georges Tce
Perth WA 6000
aSX CODE: EpD
CoNteNtS
2
4
6
14
24
28
29
30
31
32
34
77
78
79
81
CORpORaTE DIRECTORy
RESulTS
ChaIRman & CEO REvIEw
DIRECTORS’ REpORT
CORpORaTE gOvERanCE STaTEmEnT
fInanCE REpORT
INCOME STATEMENT
BALANCE SHEET
CASH FLOW STATEMENT
STATEMENT OF CHANGES IN EQUITY
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DEClaRaTIOn
auDITOR’S InDEpEnDEnCE DEClaRaTIOn
InDEpEnDEnT auDIT REpORT
ShaREhOlDIng analySIS
RESULTS
2008
2009
Growth
Revenue
ebITDA
$ 18,924,137
$ 32,633,570
$ 1,183,148
$ 1,228,186
Dividend Declared
0.5 cents per share
0.75 cents per share
72%
4%
50%
REVENUE
EBITDA
DIVIDENDS
2007
2008
2009
2007
2008
2009
2007
2008
2009
1.00
0.80
0.60
0.40
0.20
0.00
4
EMPIRED LIMITED | 2009 Annual Report
HIGHLIGHTS
» Contracted annuity revenue up 101% against FY2008
» Positive net operating cash flow of $2.4 Million
» Annualised expense reduction of approximately $1.8M per annum
» Significant improvement in geographic diversification
» Significant improvement in sector diversification
» Secured first major State Government Managed Services client
»
Increased the average value and length of client engagements
» Currently bidding on approximately $50 Million in Managed Services contracts
‘ Our capability can be defined by the services we offer,
the people we employ, our experience combined with
know how and the technologies we invest in. ’
5
CHaIRman & CEO REviEw
6
EMPIRED LIMITED | 2009 Annual Report
Dear Shareholder
Throughout the previous financial year we have been presented with many challenges, many
as a result of the Global Financial Crisis and its effect on trading conditions in Australia. We
are pleased to report that Empired has effectively navigated this difficult environment and
demonstrated the resilience of its business model. Empired has continued to grow its operating
performance. Revenue is up 72% to $32.63 Million, EBITDA increased 4% to $1.23 Million
delivering NPAT of $0.53 Million and EPS of 1.2 cents.
These results have allowed us to grow our dividend payment with a fully franked 0.25 cents
interim dividend and a final dividend of 0.5 cents fully franked delivering a full year dividend of
0.75 cents, a 50% increase on the 2008 financial year.
There have been significant achievements in the previous 12 months ensuring Empired is well
placed to continue to grow both earnings per share and dividend payments in the coming year.
‘ Subject to Empired’s
continued strong
performance the board
intends to grow both the
dividend payout ratio and the
value of dividend payments.’
7
CHaIRman & CEO REviEw
(cont’d)
Navigating an uncertain landscape The global financial crisis has caused a level of uncertainty not seen in many
years. Some of the world’s largest and longest standing organisations have not survived, locally in Australia many
organisations have seen earnings dip significantly and many more have experienced loss making years.
I am pleased to report that during this period Empired’s management took clear and concise action to ensure
Empired reduced its risk profile and minimised the possible impact of many of the threats posed by the economic
conditions.
This action included an expense reduction program, a focus on reducing debtor days, conservative cash
management, reduced capital expenditure and reducing the risk of our variable costs through maximising the use
of contractors in delivering peaks and troughs in demand.
The results of these actions speak for themselves with annualised expenses reduced by $1.8 Million per annum, a
reduction in debtor days and net cash holdings across the financial year increasing by $1.2 Million.
8
EMPIRED LIMITED | 2009 Annual Report
‘ We have adopted a focussed
and disciplined approach. ‘
A clear focus During times of uncertainty decisive action is required. However these short term adjustments
to meet drastically changing market dynamics can overshadow strategic initiatives and a focus on continuing to
deliver on the overarching vision.
Throughout this period we have adopted a focused and disciplined approach to ensure that we continue to deliver
on Empired’s stated objectives. Through optimising the use of staff down time and selective investment in internal
projects that demonstrate sound short and mid-term return, Empired has continued to advance its operational and
strategic positioning.
Empired’s most valuable asset is its people and great improvements have been made in the management of
Human Resources.
A new employee management program has been introduced that allows employees to work with their manager
and Empired’s HR department to map career path direction within Empired. These career path plans ensure that
employees are clear on their growth prospects within Empired, salary expectations and that appropriate training
and development plans are in place to ensure employee career goals are aligned to Empired’s core objectives.
Initiatives such as this and others like it are designed to make our employees lives easier at Empired whilst
maximising the efficiency and effectiveness of Empired’s largest investment. Ongoing investment and advancement
in human resources ensures that Empired retains its workforce and continues to attract the best talent in our
industry.
We have implemented a range of systems and processes both in our Consulting Practices and our Managed
Services business.
Operational improvements include the implementation of the Computer Associates operational management
suite of tools and products, enhancements to our Change Management processes and improvements to our ITIL
framework.
A new time management system across the entire business will ensure we better capture and effectively manage
employee time, resulting in improved utilisation, increased realisation and improved billing accuracy and efficiency.
This system is also critical in providing detailed management reporting, project reporting and project costing
information.
Improvements to our project delivery framework and financial project controls have also resulted in reduced cost
over runs and more efficient fixed price project delivery.
Tactically these initiatives will improve the quality of our services and organisational efficiency. Strategically they
enhance our competitive advantage and enable Empired to successfully win and deliver larger contracts with larger
clients.
9
CHaIRman & CEO REviEw
(cont’d)
Delivering Results that count Since listing on ASX in October 2007 we have maintained a clear and consistent
plan to grow Empired’s IT services business. We have outlined key areas of growth through larger and longer
contracts, growing contracted recurring revenue, increased regional diversification and greater industry spread.
During the 2009 financial year Empired has secured a number of multi-million dollar contracts, more than in
any previous year measured by total order value and volume of contracts secured. Of note was the $11.6 Million
contract secured with Main Roads in Western Australia which following signing has been successfully transitioned
into full production support. Increases to the scope of work over the previous six months has seen the contracted
recurring revenue value grow significantly plus a strong pipeline of project services to be delivered throughout the
2010 financial year.
Empired has demonstrated that it can not only win large government and corporate contracts but can successfully
deliver against these contracts, grow the ongoing value of these engagements and secure significant upside through
providing project services to these clients. Importantly our clients see great value in these services and are highly
supportive of Empired and its vision.
Empired is currently contesting in excess of $50 Million in multi-million dollar recurring revenue managed services
contracts. We are well placed and expect another record year.
The successful year we have had in building our long term contracted revenue base has translated directly into
the largest increase in recurring revenue ever experienced by Empired. Contracted recurring revenue has grown by
101% during the financial year.
CONTRACTED REVENUE
As at July 1, 2009
As at July 1, 2010
10
EMPIRED LIMITED | 2008 Annual Report
‘ Empired has secured a number of
multi-million dollar contracts, more
than in any previous year. ‘
25%
1%
74%
VIC
Other
WA
We are pleased with the strong growth in recurring and long term contracted revenue particularly against the stark
economic backdrop. This substantial increase further strengthens Empired’s position to continue growing all key
measures of its business in 2009 and provides improved revenue and earnings certainty in an uncertain time.
Victoria remains a key growth region for Empired. During the financial year Empired increased staff numbers,
increased its client base and further enhanced its services breadth in Victoria. This has resulted in over 25% of
Empired’s total revenue being generated from Victorian Clients up from 18% the previous year.
4%
7%
23%
10%
11%
15%
30%
Finance
Utilities
ICT
Oil & Gas
Other
Resources
Goverment
11
CHaIRman & CEO REviEw
(cont’d)
This significantly diversifies Empired’s previous geographic concentration in Western Australia and provides a
strong platform to further grow the region. To accelerate growth in Victoria, Empired has recently appointed a
Business Development Executive devoted to the region where Empired is actively negotiating a number of multi-
million dollar contracts.
Historically Empired’s revenue has been weighted toward the resources sector. Over the previous seven years this
sector has experienced rapid growth however in more recent times this sector has suffered from the impacts of
the global financial crisis with demand for commodities reducing and the liquidity of debt and equity markets
tightening.
During this difficult period Empired has retained and grown its revenue from the resources sector and remains
bullish on its prospects of benefiting further on the recovery of the sector mid to long term.
Whilst this is positive, Empired management have been keenly aware of the risks associated with too larger
exposure to any specific sector and have actively introduced a program to diversify revenue over the last two years.
This program has successfully resulted in Empired now boasting a well diversified revenue base by sector with no
single sector representing greater than 30% of annual revenue.
Importantly during this period Empired has grown its government presence from virtually zero three years ago
to 23% of revenue in the 2009 financial year. State and Federal government represent the largest percentage of
Australian ICT spend per annum. Empired is now well placed to leverage its Government references and industry
experience to further grow its exposure to this lucrative sector.
12
EMPIRED LIMITED | 2009 Annual Report
‘ The australian IT sector is a dynamic and
growing market place. ‘
The year ahead
The broader Australian economic environment is demonstrating genuine signs of recovery, interest rates have
reduced and seem to have stabilised, and GDP has accelerated in the quarter ending June 30 2009 when compared
with the prior quarter. In addition to this many of the index’s tracking the performance of the ASX have made
considerable gains over the previous 5 months, general economic confidence has improved and client investment
sentiment continues to grow.
More acutely, the Australian IT sector has weathered the down turn well and maintained modest growth rates over
the previous year. We are again seeing demand for our services continuing to grow with clients now preparing to
invest in projects that were placed on hold over the previous two years, increase the scale of their operations and
again use technology to reduce risk, enhance productivity and efficiency and as a medium to drive new business
opportunities.
Empired is poised to benefit from these improving market conditions. Throughout the downturn we retained the
scale of our billable workforce, continued to invest in our core capabilities, improved our operational systems
and grew the quality of our client base. In the first quarter of the 2010 financial year we have seen this translate
into improved earnings, with increasing work levels driving utilisation of our staff up and demand for our core
capabilities consistently improving.
Whilst early in the financial year, we have seen investments made in our managed services business already drive
further improvements in contracted recurring revenue levels. We expect to continue to see contracted recurring
revenue grow as a result of growth in our already strong client base, healthy sales opportunities, a focused
engagement model and demand for IT managed services continuing to increase.
Our robust business model remains targeted at long term contracted recurring revenue geared toward core business
systems and infrastructure that customers are required to operate and develop for the long term. This model
allows Empired to develop long term relationships with its core customers, improving our understanding of their
business and in turn allowing Empired to deliver greater value to our customers.
This all adds up to improved earnings, an exciting environment and a bright year ahead!
We would like to take this opportunity to sincerely thank our staff and partners for their outstanding contribution
to Empired’s growth and success in FY2009 against a difficult and challenging environment. Further we extend
our appreciation and thanks to all our shareholders who have patiently supported Empired during a volatile
and uncertain market. We look forward to delivering strong results and continuing to drive Empired forward
throughout the year ahead. We would like to make a special thank you to our former director Mr David Taylor
who unfortunately resigned due to his relocation from Perth. David’s service to Empired over the last 4 years has
been greatly appreciated and we wish him well for his future endeavours.
Russell Baskerville
Managing Director & Chief Executive Officer
Mel Ashton
Chairman
13
dIRECTOR’S REPORT
The directors present their report together with the financial report of Empired Limited (“the Company”) and the
consolidated financial report of the consolidated entity, being the Company and its controlled entities, for the year
ended 30 June 2009.
14
EMPIRED LIMITED | 2009 Annual Report
‘ Empired’s greatest asset is
its people. ‘
The names of the Company’s directors in office during the year and until the date of this report are as below.
Directors were in office for this entire period unless stated.
DIRECTORS
name
age Experience and special responsibilities
Mel Ashton
Chairman
51 Mel is a Fellow of the Australian Institute of Company Directors and a Fellow of
the Institute of Chartered Accountants in Australia and has over 25 years corporate
experience in a wide range of industries.
David Taylor
Non - executive
Director
(resigned 31 July 2009)
Mel’s other directorships include:
National Boardmember of the Institute of Chartered Accountants in Australia.
Chairman of Venture Minerals Limited
Chairman of Gryphon Minerals Ltd
Boardmember of the Hawaiian Group of Companies
Boardmember of Cullen Wines (Australia) Pty Ltd
67 David has extensive commercial experience with banking and marketing
background.
Since retiring as Head of the Bankwest Business Bank in 1999, David has
progressed a career in corporate governance with appointments to the boards of
listed and unlisted public companies and government business enterprises.
He is immediate past Chairman of both Perth Market Authority and Forest
Products Commission and is a non-executive director of Agrifood Skills Australia.
David is a Fellow of the Australian Institute of Company Directors.
Russell Baskerville
Managing Director
& CEO
31 Mr Baskerville is an experienced business professional and has worked in the IT
industry for in excess of 10 years. He has extensive knowledge in both the strategic
growth and development of technology businesses balanced by strong commercial
and corporate skills.
Prior to joining Empired, Mr Baskerville was a founding member of Tusk
Technologies Pty Ltd, which was acquired by the company in March 2002. He was
also the founder and Managing Director of Procom Holdings Pty Ltd, a company
established to provide technical service and support to merchant banking facilities
on behalf of the larger banks in Australia. Mr Baskerville currently holds non-
executive Directorships with Procom Holdings Pty Ltd and BigRedSky Limited.
15
dIRECTOR’S REPORT (cont’d)
DIRECTORS (cont‘d)
name
age Experience and special responsibilities
Richard Bevan
Non – executive
Director
43 Mr Bevan joined the board as a non-executive director on 31 January 2008 with
corporate and senior management experience including various directorship’s and
CEO/MD roles in ASX listed and private companies. Richard brings experience in
the execution and integration of mergers, acquisitions and other major corporate
transactions.
Previously Richard was the Managing Director and Chief Executive Officer of
Lifecare Health Limited where he led the company through a successful initial
public offer and ASX listing and implemented a growth strategy that involved the
acquisition and integration of a number of businesses nationally.
Richard has been involved in a number of businesses in areas as diverse as
healthcare, construction and engineering, mining technology and information
services. Richard’s roles within these businesses have included strategic operational
management, implementing organic growth strategies, business integration and
raising capital in both public and private markets.
Richard is currently Managing Director of Cool Clear Water Group Limited, an
unlisted public company which operates a national business in the water services
sector. He is also a non-executive Director of e health Networks Pty Ltd which
provides services in the Health care industry. Richard is aMember of the Australian
Institute of Company Directors.
COmpany SECRETaRIES
name
age Experience and special responsibilities
Mark Waller
CFO & Company
Secretary
30 Mark has responsibility for ensuring the necessary operational and financial
processes and infrastructure are in place to support the strategic direction and
continued growth of Empired. Mark holds a degree in business from Curtin
University majoring in Accounting and Business Law and is a Certified Practicing
Accountant. Mark brings experience from running his own business in London to
working for Ernst & Young.
Mark is also a Non-executive Director of BigRedSky Limited.
Jeremy King (LLB)
Company Secretary
35
(resigned December 2008)
Jeremy is a senior executive with Grange Consulting, providing general corporate,
transaction and strategic advice, and managing legal issues associated with the
activities undertaken by Grange’s clients.
Jeremy is a corporate lawyer with over 9 years experience in domestic and
international legal, financial and corporate matters. He spent several years in
London where he worked with Allen & Overy LLP and Debevoise & Plimpton LLP
and has extensive corporate experience particularly in relation to private equity,
leveraged buy-out acquisitions and acting for banks, financial institutions and
corporate issuers in respect of various debt and equity capital raisings.
16
EMPIRED LIMITED | 2009 Annual Report
pRInCIpal aCTIvITIES
The principal activities of the consolidated entity during the year is the continued operation of its IT infrastructure
services business resulting in the provision of services covering software systems, consulting and infrastructure
design and deployment.
There were no significant changes in the nature of the activities carried out during the year.
SIgnIfICanT ChangES In ThE STaTE Of affaIRS
There were no significant changes in the state of affairs during the year.
EvEnTS SubSEquEnT TO REpORTIng DaTE
There has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to
affect significantly the operations of the consolidated entity, the results of those operations, or the state of affairs
of the consolidated entity or in future financial years.
EnvIROnmEnTal REgulaTIOn
The consolidated entity’s operations are not subject to any significant environmental regulations under either
Commonwealth or State Legislation.
DIvIDEnDS
Dividends paid or declared during the financial year are as follows:
(a) Dividends paid during the year
Final 2008 fully franked dividend of 0.50cents per share
(2007: nil)
Interim 2009 fully franked dividend of 0.025 cents per share
(2008 :nil)
2009
$
2008
$
231,112
115,556
346,668
-
-
-
(b) Dividends declared and not paid
After the end of the financial year, the directors declared a fully franked dividend
of 0.50 cents per share (2008: 0.50 cents).This dividend is not provided for.
231,112
231,112
OpERaTIng RESulTS fOR ThE yEaR
The net profit after tax from continuing operations for the year for the consolidated entity is $532,411 (2008:
$$1,295,055).
lIkEly DEvElOpmEnTS
Except as detailed in the Chairman and Managing Director’s Review on pages 6 to 13, likely developments, future
prospects and business strategies of the operations of the consolidated entity and the expected results of those
operations have not been included in this report, as the directors believe, on reasonable grounds, that the inclusion
of such information would be likely to result in unreasonable prejudice to the consolidated entity.
ShaRE OpTIOnS
Share Options Granted to Directors and Officers
Share options were granted to Directors under the Executive Share Option Plan. Information relating to this grant
is at note 12 to the financial statements.
17
dIRECTOR’S REPORT (cont’d)
Unissued Shares
At the date of this report, there were 9,703,474 unissued ordinary shares under options. Refer to note 12 of the
financial statements for more detail. Option holders do not have any right, by virtue of the option, to participate
in any share issue of the Company or any related body corporate or in the interest issue of any other registered
scheme.
Shares Issued as a result of the exercise of options
No share options were exercised during the financial year.
ShaRE ISSuES DuRIng ThE yEaR
No shares were issued during the year.
auDITOR’S InDEpEnDEnCE DEClaRaTIOn TO ThE DIRECTORS Of EmpIRED lImITED
The directors have received an Independence Declaration from Grant Thornton the auditors of Empired Limited
and it is attached at page 78.
nOn-auDIT SERvICES
Non-Audit services provided by the entity’s Auditor can be found at note 25. The Directors are satisfied that
the provision of non-audit services is compatible with the standard of independence for auditors imposed by the
Corporations Act. The nature and scope of each non-audit service provided means that auditor independence was
not compromised.
InDEmnIfICaTIOn Of OffICERS anD DIRECTORS
The Company has during and since the end of the financial year, in respect of any person who has, is or has been
an officer of the company or a related body corporate, paid a premium in respect of Directors and Officers Liability
insurance which indemnifies Directors, Officers and the Company of any claims made against the Directors, Officers
of the Company and the Company, subject to conditions contained in the insurance policy. Further disclosure
required under section 300(9) of the Corporations Act 2001 is prohibited under the terms of the contract.
REmunERaTIOn REpORT
This report outlines the remuneration arrangements in place for directors and executives of Empired Limited (the
Company).
Remuneration Philosophy
The performance of the Company depends upon the quality of its directors and executives. To prosper, the
Company must attract, motivate and retain highly skilled directors and executives.
To this end, the Company embodies the following principles in its remuneration framework:
• Provide competitive rewards to attract high calibre executives;
• Link executive rewards to shareholder value;
• Have a portion of certain executive’s remuneration ‘at risk’, dependent upon meeting pre-determined
performance benchmarks;
• Establish appropriate, demanding performances hurdles for variable executive remuneration.
Remuneration Committee
Due to the structure of the Board, a separate remuneration committee is not considered to add any efficiencies to
the process of determining the levels of remuneration for the Directors and key executives. The Board considers
that it is more appropriate that it set aside time at Board meetings to address matters that would normally fall to
the remuneration committee.
18
EMPIRED LIMITED | 2009 Annual Report
Remuneration Structure
In accordance with the best practice corporate governance, the structure of non-executive director and executive
remuneration is separate and distinct.
A. Non-executive director remuneration
Objective
The board seeks to set aggregate remuneration at a level that provides the company with the ability to attract and
retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
Structure
The constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors
shall be determined from time by a general meeting. An amount not exceeding the amount determined is then
divided between the directors as agreed. The latest determination was at the Annual General Meeting held on the
21st of November 2008 when shareholders approved an aggregated remuneration of $300,000 per year.
The amount of aggregated remuneration sought to be approved by shareholders and the manner in which it
is apportioned amongst directors is reviewed from time to time. The Board considers advice from external
consultants as well as the fees paid to non-executive directors of comparable companies when undertaking the
annual review process.
The remuneration of non-executive directors (as defined in AASB 124 Related Party Disclosures) for the period
ending 30 June 2009 is detailed in Table 1 of this report.
b. executive remuneration
Objective
The company aims to reward executives with a level and mix of remuneration commensurate with their position
and responsibilities within the company and so as to:
• Reward executives for company, business unit and individual performances against targets set by reference to
appropriate benchmarks;
• Align the interests of executives with those of shareholders;
• Link rewards with the strategic goals and performance of the Company; and
• Ensure total remuneration is competitive by market standards.
Structure
In determining the level of remuneration paid to senior executives of the company, the Board took into account
available benchmarks and prior performance.
Remuneration consists of the following key elements:
• Fixed Remuneration
• Variable Remuneration
-
-
Short Term Incentive (STI); and
Long Term Incentive (LTI).
The proportion of fixed remuneration and variable remuneration (potential short term and long term incentives) is
established for each senior executive by the Board. Table 1 below details the fixed and variable components (%) of
the executives of the company.
19
dIRECTOR’S REPORT (cont’d)
Fixed Remuneration
Objective
Fixed remuneration is reviewed annually by the board. The process consists of a review of companywide, business
unit and individual performance, relevant comparative remuneration in the market and internally and, where
appropriate, external advice on policies and practices. As noted above, the Committee has access to external
advice independent of management.
Structure
Senior executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms
including cash and fringe benefits such as motor vehicles and expense payment plans. It is intended that the
manner of payment chosen will be optimal for the recipient without creating undue cost for the group.
The fixed remuneration component of the company executives is detailed in Table 1.
Variable Remuneration - Short Term Incentive (STI)
Objective
The objective of the STI program is to link the achievement of the Group’s operational targets with the
remuneration received by the executives charged with meeting those targets.
Structure
Actual STI payments granted to the company executives depend on the extent to which specific operating targets
set at the beginning of the financial year are met. The operational targets consist of a number of Key Performance
Indicators (KPIs) covering both financial and non-financial measures of performance. Typically included are
measures such as contribution to net profit after tax, customer service, risk management, and leadership/team
contribution.
Any STI payments are subject to the approval of the Remuneration Committee. Payments made are delivered as a
cash bonus in the following financial year. For the 2009 financial year 50% of the STI cash bonus has been paid
to executives during the 2010 financial year (2008: 50%).
Variable Pay - Long Term Incentive (LTI)
Objective
The objective of the LTI plan is to reward senior executives in a manner that aligns this element of remuneration
with the creation of shareholder wealth.
As such, LTI grants are only made to executives who are able to influence the generation of shareholder wealth
and thus have a direct impact on the Group’s performance against the relevant long term performance hurdle.
Structure
LTI grants to executives are delivered in the form of options.
Table 2 below provides details of options granted and the value of options granted, exercised and lapsed during
the year. The options were issued free of charge. Each option entitles the holder to subscribe for one fully paid
ordinary share in the entity at an exercise price of $0.30. For further details of the terms and conditions including
the service and performance criteria that must be met refer to note 12.
20
EMPIRED LIMITED | 2009 Annual Report
C. Service Agreements
Russell Baskerville – Managing Director
Terms of Agreement – commenced 1 July 2005, until terminated by either party.
Salary – base $240,000 per annum with an additional STI cash bonus capped at 50% of base fees.
Termination – three months written notice or three months remuneration in lieu.
Mel Ashton – Chairman
Terms of Agreement - appointed 21 December 2005, until terminated by either party.
Fee – fixed $75,000 per annum.
David Taylor – Non Executive Director
Terms of Agreement - appointed 21 December 2005, until terminated by either party.
Fee – fixed $50,000 per annum.
Richard Bevan – Non Executive Director
Terms of Agreement – appointed 31 January 2008, until terminated by either party.
Fee – fixed $50,000 per annum.
Mark Waller – Company Secretary and Chief Financial Officer
Terms of Agreement – commenced 18 April 2005, until terminated by either party.
Salary – base $183,500 per annum.
Termination – one month’s written notice or one month’s remuneration in lieu.
Table 1: Directors and executives remuneration for the year ended 30 June 2009 and 30 June 2008
Short term
benefits
Post
Employment
Long
term
benefits
(LTI)
%
Performance
related
Total
Salary &
Fees
Cash
STI
Superan-
nuation
Equity
Options
Non-Executive
Directors
M. Ashton
2009
75,000
Chairman
D. Taylor
Non-executive
Director
R. Bevan
Non-executive
Director
2008
2009
2008
2009
2008
64,118
28,842
5,000
43,201
16,667
-
-
-
-
-
-
-
-
21,158
34,750
2,763
-
2,850
4,800
1,900
2,800
-
-
77,850
68,918
51,900
42,550
50,714
16,667
-
-
-
-
-
-
21
dIRECTOR’S REPORT (cont’d)
Table 1: Directors and executives remuneration for the year ended 30 June 2009 and 30 June 2008 (cont’d)
Short term
benefits
Post
Employment
Long
term
benefits
(LTI)
%
Performance
related
Total
Salary &
Fees
Cash
STI
Superan-
nuation
Equity
Options
Executive
Directors
key
management
R. Baskerville
2009
240,000
160,000
Chief
Executive
2008
238,200
60,000
-
-
5,700
305,700
19.60%
8,800
307,000
19.50%
M. Waller
2009
183,487
2008
150,008
Chief
Financial
Officer
-
-
16,513
13,500
12,350
212,350
3,200
166,708
-
-
1 Payable at 30 June 2009, paid September 2009
Table 2: Options granted as part of remuneration
Average
Value
per
option
at grant
date
Value of
options
granted
during
the year
Total
value of
options
granted,
exercised
and lapsed
during
year
%
Remuneration
consisting of
options for the
year
Grant date
Grant
Number
M. Ashton
21/11/2008
150,000
0.019
2,850
2,850
3.66%
2009
Non-
Executive
D. Taylor
21/11/2008
100,000
0.019
1,900
R. Bevan
21/11/2008
250,000
0.019
4,750
Executive
R. Baskerville
21/11/2008
300,000
Key
Management
M. Waller
21/11/2008
01/12/2008
250,000
400,000
0.019
0.019
0.019
5,700
4,750
7,600
1,900
4,750
5,700
4,750
7,600
3.66%
9.37%
1.56%
5.81%
2008
Non-
Executive
M. Ashton
23/07/2007
150,000
0.008
2,850
4,800
6.96%
D. Taylor
23/07/2007
350,000
0.008
Executive
R. Baskerville
23/07/2007
1,100,000
Key
Management
22
M. Waller
12/01/2008
400,000
0.008
0.019
2,800
8,800
3,200
2,800
8,800
3,200
6.58%
3.56%
1.92%
EMPIRED LIMITED | 2009 Annual Report
Directors Meetings
The number of Directors meetings and the number of meetings attended by each Director during the year are:
Name of Director
Russell Baskerville
Mel Ashton
David Taylor
Richard Bevan
No. of Meetings Held
while a Director
No. of Meetings Attended as a
Director during the year ended
30 June 2009
12
12
12
12
12
12
12
11
Director’s and Key Management Personnel equity Holdings
The following table sets out each Directors (including their related parties) interest in shares and options of the
company as at the end of the financial year:
Director
Ordinary Shares
Russell Baskerville
8,533,240
Mel Ashton
David Taylor
Richard Bevan
Key Management
Mark Waller
150,000
60,000
-
Options
2,850,000
1,000,000
700,000
250,000
1,755,124
1,064,068
Signed in accordance with a resolution of directors.
Russell Baskerville
Managing Director
30th of September 2009
23
CORpORaTE GOvERnanCE STaTEmEnT
This statement outlines the main corporate governance practices in place throughout the financial year, which
comply with the ASX Corporate Governance Council’s “Principals of Good Corporate Governance and Best
Practice Recommendations”, unless otherwise stated. The Company has followed each of the Recommendations
where the Board has considered the practices appropriate, taking into account factors such as size of the
Ccompany and Board, the resources available, and the activities of the Company. The corporate governance
practices are reviewed regularly and will continue to be developed and refined to meet the needs of the Company
and appropriate practices.
The Ccompany includes information about its corporate governance practices on the Company’s website at
www.empired.com including the Board charter, the group’s code of conduct and other policies and procedures
relating to the Board and its responsibilities.
PRINCIPLE 1 – Lay solid foundations for management and oversight
Recommendation 1.1 - Companies should establish the functions reserved to the Board and those delegated to
senior executives and disclose those functions.
The Board has the responsibility for charting the direction, strategies and financial objectives for the Company and
monitoring the compliance with regulatory requirements and ethical standards of those policies. In performing their
responsibilities the Board are guided by the objective of protecting the rights and interest of shareholders.
The roles and responsibilities of the Board are set out in the Board charter and this is available on the Company
website. The Board regularly reviews the charter to ensure that it is appropriate to meet the needs of the Company
and the Board and to comply with developing best practice standards.
Recommendation 1.2 – Companies should disclose the process for evaluating the performance of senior executives.
During the reporting year an evaluation of the Board and key executives was carried out on an informal basis. As
the activities of the Company develop, it will establish more formal evaluation procedures, including quantitative
measures of performance.
PRINCIPLE 2 – Structure of the Board to add value
Recommendation 2.1 – A majority of the Board should be independent directors.
The Board comprises of three directors who are appointed to ensure that the Company is run in the best interest
of the shareholders. Other than Russell Baskerville all directors are independent non-executives. The names, skills,
experience and expertise of the directors of the Company in office at the date of this report are located in the
Directors’ report on pages 15-16.
A director is only to be regarded as independent if the director is independent of management and free of any
business or other relationship what could materially interfere with or could reasonably be perceived to materially
interfere with the exercise of the Director’s unfettered and independent judgement.
In considering whether a Director is independent the Board considers:
• the criteria for assessing the independence of a Director in the ASX Corporate Governance Council’s
“Principles of Good Corporate Governance and Best Proactive recommendations”
• any information, facts or circumstances that the Board considers relevant; and
• any materiality thresholds, standards or guidelines that the Board may adopt from time to time.
Recommendation 2.2 – The chair should be an independent director.
During 2009 the chairman of the Board of Directors was Mr Mel Ashton. Mr Ashton meets the independence
criteria.
24
EMPIRED LIMITED | 2009 Annual Report
Recommendation 2.3 – The roles of chair and chief executive officer should not be exercised by the same
individual.
The role of chairperson of the Board and the Managing Director (CEO role) are not exercised by the same person.
Mr Baskerville is Managing Director and Mr Ashton is Chairman of the Board.
Recommendation 2.4 – The Board should establish a nomination committee.
Currently no formal committees to the Board have been established. The Board considers that given its size and
that only one member of the Board holds an executive position in the Company, no efficiencies or other benefits
would be gained by establishing separate committees.
The Board intends to reconsider the requirement for and benefits of separate committees as the Ccompany’s
operations grow and evolve.
Recommendation 2.5 – Companies should disclose the process for evaluating the performance of the Board, its
committees and individual directors.
There is currently no formal process in place to evaluate the performance of the Board, its committees and
individual directors. A review of the performance of the Board and its directors is undertaken by each director
with respect to each other and the performance of the Board itself.
The Board will reconsider the requirement for appropriate measures of performance as the company’s operations
grow and evolve.
PRINCIPLE 3 – Promote ethical and responsible decision making
Recommendation 3.1 – Companies should establish a code of conduct and disclose the code or a summary of the
code as to:
• the practices necessary to maintain confidence in the company’s integrity,
• the practices necessary to take into account their legal obligations and the reasonable expectations of
stakeholders, and
• the responsibility and accountability of individuals for reporting and investigation reports of unethical
practices.
All directors, managers and employees are expected to act with integrity and objectivity in their dealings with
people that they come in contact with during their association with Empired Ltd. Such conduct is considered
integral to the primary objective of working to enhance the Company’s reputation and shareholder value. The code
of conduct adopted is available on the Company’s website www.empired.com.
Recommendation 3.2 – Companies should establish a policy concerning trading in company securities by directors,
senior executives and employees, and disclose the policy or a summary of that policy
Directors and employees are prohibited from trading in Empired Limited shares, if the director or employee is
in possession of inside or price sensitive information or would be trading for a short term gain. Directors and
employees are encouraged to follow a long-term policy with respect to their investments in Empired.
Directors and employees are also aware of their obligations to ensure that they do not communicate price
sensitive information to any other person who is likely to buy or sell Empired Limited shares or communicate that
information to another party.
The Company’s practices are documented in the securities trading policy, details of which are available on the
Company’s website.
25
CORpORaTE GOvERnanCE STaTEmEnT (cont’d)
PRINCIPLE 4 – Safeguard integrity of financial reporting
Recommendation 4.1 – The Board should establish an audit committee.
A separate audit committee has not been formed. The role of the audit committee is carried out by the Board
of directors. The Board consider that given its size and that only one member of the Board holds an executive
position in the Company no efficiencies or benefits would be gained by establishing a separate audit committee.
The Board intends to reconsider the requirement for and benefits of separate committees as the Ccompany’s
operations grow and evolve.
Recommendation 4.2 – The audit committee should be structured so that it:
• consists only of non executive directors,
• consists of a majority of independent directors,
• is chaired by an independent chair, who is not chair of the Board, and
• has at least three members.
This role is carried out by the Board and the requirement for a separate committee will be reconsidered on a
regular basis.
Recommendation 4.3 – The audit committee should have a formal charter.
An audit committee charter has been established setting out the role and responsibilities, composition structure,
membership requirements and the manner in which the committee is to operate. This charter is available on the
Company website.
PRINCIPLE 5 – Make timely and balanced disclosure
Recommendation 5.1 – Companies should establish written policies and procedures designed to ensure compliance
with ASX listing rule disclosure requirements and to ensure accountability at senior management level for that
compliance and disclose those policies or a summary of those policies.
The responsibility for the overall communication has been appointed to the Managing Director and Company
Secretary.
Empired Ltd is committed to:
• ensuring that shareholders and the market are provided with timely and balanced information about its
activities;
• complying with the general and continuous disclosure principals contained in ASX Listing Rules and the
Corporations Act 2001; and
• ensuring that all market participants have equal opportunities to receive externally available information
issued by Empired.
The company’s continuous disclosure policy is available on the Company website.
PRINCIPLE 6 – Respect the rights of shareholders
Recommendation 6.1 – Companies should design and disclose a communications strategy to promote effective
communication with shareholders and encourage effective participation at general meetings and disclose their
policy or a summary of that policy.
The Board strongly believes in the importance of effective communication with shareholders to ensure their access
to timely and relevant information.
The Company’s website is regularly updated and provides details of recent announcements to the ASX, annual
reports, and other significant information on the Company. Procedures are in place to review all information and
26
EMPIRED LIMITED | 2009 Annual Report
to ensure all relevant information is immediately released to the market.
Shareholders are encouraged to attend the annual general meeting, providing them with an opportunity to question
the Board and senior executives.
Empired has in place a written communications with shareholders policy which is available on the company
website.
PRINCIPLE 7 – Recognise and manage risk
Recommendation 7.1 – Companies should establish policies for the oversight and management of material business
risks and disclose a summary of those policies.
The Board acknowledges that it is responsible for the overall internal control framework, but recognises there is no
effective internal control system that will prevent all errors and irregularities.
The Company’s risk management program is available on the Company’s website.
The effectiveness of the risk management program is reviewed annually and updated accordingly.
Recommendation 7.2 – The Board should require management to design and implement the risk management and
internal control system to manage the Company’s material business risks and report to it on whether those risks
are being managed to the effectiveness of the Company’s management of its material business risks.
A risk may be initiated by any employee to a member of the Empired management team. Senior management are
responsible for reviewing risks that have been escalated to them from an operational level. These risks are reviewed
monthly by the Board.
The Board also reviews recommendations made by the external auditors, and where appropriate ensures that the
Company puts in place controls and systems to manage these risks identified.
Recommendation 7.3 – The Board should disclose whether it has received assurance from the Chief Executive
Officer (or equivalent) and the Chief Financial Officer (or equivalent) that the declaration provided in accordance
with section 295A of the Corporations Act is founded on a sound system of risk management, and internal control
and that the system is operating effectively in all material respects in relation to financial reporting risks.
This recommendation was complied with for 2009
PRINCIPLE 8 – Remunerate fairly and responsibly
Recommendation 8.1 – The Board should establish a remuneration committee.
Due to the structure of the Board, a separate remuneration committee is not considered to add any efficiencies to
the process of determining the levels of remuneration of the Directors and key executives. The Board considers
that is more appropriate that it set aside time at Board meetings to address such matter that would normally fall
to the remuneration committee.
Recommendation 8.2 – Companies should clearly distinguish the structure of non-executive directors’ remuneration
from that of executive directors and senior executives.
Detailed information regarding the remuneration paid to directors and senior executives is set out in the
remuneration report.
27
EmpIREd LImITEd
and its Controlled Entities
annual Financial Report
For the Year Ended 30 June 2009
28
EMPIRED LIMITED | 2009 Annual Report
InCOmE STaTEmEnT
For the year Ended 30 June 2009
Notes
COnSOlIDaTED
paREnT
2009
$
2008
$
2009
$
2008
$
Revenue
Rendering of services
Cost of Sales
gross profit
Other Income
Legal expenses
Marketing expenses
Occupancy expenses
Finance costs
Employee benefits
Depreciation expenses
Other expenses
profit before income tax
Income tax (expense)/benefit
relating to ordinary activities
profit / (loss) after tax
attributable to members of
the Company
3
3
4
5
32,633,570
18,924,137
32,633,570
18,924,137
(24,040,794)
(13,674,937)
(24,040,794)
(13,674,937)
8,592,776
5,249,200
8,592,776
5,249,200
187,421
388,591
187,421
388,591
(34,437)
(2,875)
(34,437)
(2,875)
(139,965)
(17,598)
(139,965)
(17,598)
(648,238)
(305,904)
(648,238)
(305,904)
(164,252)
(61,370)
(164,252)
(61,370)
(4,675,866)
(2,630,014)
(4,675,866)
(2,630,014)
(254,076)
(149,932)
(251,818)
(145,048)
(2,053,504)
(1,498,252)
(2,055,762)
(1,503,136)
809,859
971,846
809,859
971,846
(277,448)
323,209
(277,448)
323,209
532,411
1,295,055
532,411
1,295,055
Earnings per share (cents per share)
Notes
Basic earnings per share
Diluted earnings per share
Dividends per share (cents per share)
6
6
27
2009
1.15
0.96
0.75
2008
2.99
2.51
-
This Income Statement should be read in conjunction with the accompanying notes.
29
baLanCE SHEET
As at 30 June 2009
Notes
COnSOlIDaTED
paREnT
2009
$
2008
$
2009
$
2008
$
aSSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total Current assets
non-Current assets
Other financial assets
Property, plant and equipment
Intangible assets
Deferred tax asset
Total non-Current assets
TOTal aSSETS
lIabIlITIES
Current liabilities
Trade and other payables
Financial liabilities
Income tax payable
Provisions
Unearned revenue
7(i)
8
9
23
10
11
5
13
14
5
15
16
345,423
6,460,415
145,936
6,951,774
149,117
8,104,872
153,323
8,407,312
345,423
6,460,415
145,936
6,951,774
149,117
8,104,872
153,323
8,407,312
-
-
908,414
701,610
365,227
894,839
367,485
685,777
3,948,764
3,827,164
2,081,806
1,960,206
463,239
676,928
463,239
676,928
5,320,417
5,205,702
3,805,111
3,690,396
12,272,191
13,613,014
10,756,885
12,097,708
4,254,843
264,358
81,526
574,293
565,355
5,173,466
1,433,903
144,708
391,014
202,917
4,254,843
264,358
81,526
574,293
565,355
5,173,466
1,433,903
144,708
391,014
202,917
Total Current liabilities
5,740,375
7,346,008
5,740,375
7,346,008
non-Current liabilities
Financial liabilities
Provisions
Deferred tax liability
Total non-Current liabilities
14
15
5
178,563
27,318
195,917
401,798
254,795
22,221
88,894
365,910
530,214
27,318
195,917
753,449
606,446
22,221
88,894
717,561
TOTal lIabIlITIES
6,142,173
7,711,918
6,493,824
8,063,569
nET aSSETS
EquITy
Issued capital
6,130,018
5,901,096
4,263,061
4,034,139
17
2,775,982
2,775,982
2,775,982
2,775,982
Employee equity benefits reserve
Retained profits
TOTal EquITy
141,618
3,212,418
6,130,018
98,439
3,026,675
5,901,096
141,618
1,345,461
4,263,061
98,439
1,159,718
4,034,139
This Balance Sheet should be read in conjunction with the accompanying notes.
30
EMPIRED LIMITED | 2009 Annual Report
CaSH FLOW STaTEmEnT
For the year Ended 30 June 2009
Notes
CONSOLIDATED
PARENT
2009
$
2008
$
2009
$
2008
$
Cash flows from operating activities
Receipts from customers
34,902,624
12,502,533
34,902,624
12,502,533
Payments to suppliers and employees
(32,449,636)
(13,582,662)
(32,449,636)
(13,582,662)
(164,252)
(61,370)
(164,252)
(61,370)
(19,918)
104,778
-
388,591
(19,918)
104,778
-
388,591
7(iii)
2,373,596
(752,908)
2,373,596
(752,908)
(461,220)
(526,434)
(461,220)
(526,434)
136
-
136
-
20
(350,350)
(1,555,762)
(350,350)
(1,555,762)
(811,434)
(2,082,196)
(811,434)
(2,082,196)
Borrowing costs
Income tax paid
Interest received
net cash flows (used in) from
operating activities
Cash flows from investing activities
Purchase of property, plant and
equipment
Proceeds from sale of property, plant
and equipment
Acquisition of businesses acquisitions
(net of cash acquired)
net cash flows (used in) from
investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payment of share issue and capital
raising costs
Dividends paid
-
-
3,002,333
(494,401)
-
-
(346,668)
-
(346,668)
3,002,333
(494,401)
-
(477,398)
(113,033)
683,212
Repayment of borrowings
(1,138,589)
(477,398)
(1,138,589)
Repayment of finance lease liabilities
(208,427)
(113,033)
(208,427)
Proceeds from borrowings
327,828
683,212
327,828
net cash flows (used in) from
financing activities
Net increase/(decrease) in cash and
cash equivalents
Cash and cash equivalents at
beginning of period
Cash and cash equivalents at end of
period
(1,365,856)
2,600,713
(1,365,856)
2,600,713
196,306
(234,391)
196,306
(234,391)
149,117
383,508
149,117
383,508
7(i)
345,423
149,117
345,423
149,117
This Cash Flow Statement should be read in conjunction with the accompanying notes.
31
STaTEmEnT OF CHanGES In EqUITY
For the year Ended 30 June 2009
attributable to equity holders
of the parent
Total equity
Issued
capital
$
Retained
earnings
$
Employee Equity
benefits
Reserve
$
$
COnSOlIDaTED
at 1 July 2007
Return of capital re: discontinued
operation
5,936,265
(3,455,031)
56,602
2,537,836
(5,788,331)
5,186,651
(19,810)
(621,490)
Share raising costs
(374,285)
-
Profit for the year
-
1,295,055
Issue of share capital
Exercise of options
Expiry of options
Cost of share-based payments
3,000,000
2,333
-
-
-
-
-
-
-
-
-
(2,333)
(4,400)
68,380
(374,285)
1,295,055
3,000,000
-
(4,400)
68,380
at 30 June 2008
2,775,982
3,026,675
98,439
5,901,096
Profit for the year
Cost of share-based payments
Dividends paid to equity holders
-
-
-
532,411
-
532,411
-
43,179
43,179
(346,668)
-
(346,668)
at 30 June 2009
2,775,982
3,212,418
141,618
6,130,018
This Statement of Changes in Equity should be read in conjunction with accompanying notes.
32
EMPIRED LIMITED | 2009 Annual Report
attributable to equity holders of
the parent
Total equity
Issued
capital
$
Retained
Earnings
$
Employee Equity
benefits
Reserve
$
$
paREnT
at 1 July 2007
Return of capital re: discontinued
operation
5,936,265
(5,321,988)
56,602
670,879
(5,788,331)
5,186,651
(19,810)
(621,490)
Share raising costs
(374,285)
-
Profit for the year
-
1,295,055
Issue of share capital
Exercise of options
Expiry of options
Cost of share-based payments
3,000,000
2,333
-
-
-
-
-
-
-
-
-
(2,333)
(4,400)
(374,285)
1,295,055
3,000,000
-
(4,400)
68,380
68,380
at 30 June 2008
2,775,982
1,159,718
98,439
4,034,139
Profit for the year
Cost of share-based payments
Dividends paid to equity holders
-
-
-
532,411
-
532,411
-
43,179
43,179
(346,668)
-
(346,668)
at 30 June 2009
2,775,982
1,345,461
141,618
4,263,061
This Statement of Changes in Equity should be read in conjunction with accompanying notes.
33
nOTES TO THE FInanCIaL STaTEmEnTS
For the year Ended 30 June 2009
1 CORpORaTE InfORmaTIOn
The financial report of Empired Ltd for the year ended 30 June 2009 was authorised for issue in accordance
with a resolution of the directors on 30 September 2009.
Empired Limited is a company limited by shares incorporated in Australia. The financial report includes the
consolidated financial statements and notes of Empired Limited and controlled entities (Consolidated) and
separate financial statements and notes of Empired Limited as an individual parent entity (Parent).
2 SummaRy Of SIgnIfICanT aCCOunTIng pOlICIES
(a) basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with
the requirements of the Corporations Act 2001, Australian Accounting Standards, Australian Accounting
Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board.
The financial report has been prepared on an accruals basis, and is based on historical costs modified
where applicable, by measurement at fair value of selected non-current assets, financial assets and financial
liabilities.
The financial report is presented in Australian dollars.
(b) Statement of compliance
The financial report complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standard (‘AIFRS’). The financial report also complies with International
Financial Standards (‘IFRS’).
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not
yet effective have not been adopted by the Group for the annual reporting period ended 30 June 2009. These
are outlined in the table below.
Reference Title
Summary
Amending standard
issued as a
consequence of
AASB 8 Operating
Segments
AASB
2007-3
Amendments
to Australian
Accounting
Standards arising
from AASB 8
[AASB 5, AASB 6,
AASB 102, AASB
107, AASB 119,
AASB 127, AASB
134, AASB 136,
AASB 1023 &
AASB 1038]
Application
date of
standard*
1 January
2009
Application
date for
Group*
1 July
2009
Impact on Group financial
report
AASB 8 is a disclosure
standard so will have
no direct impact on
the amounts included
in the Group’s financial
statements. However the
new standard may have
an impact on the segment
disclosures included in the
Group’s financial report.
34
EMPIRED LIMITED | 2009 Annual Report
2 SummaRy Of SIgnIfICanT aCCOunTIng pOlICIES (cont’d)
(b) Statement of compliance (cont’d)
Application
date of
standard*
1 January
2009
Application
date for
Group*
1 July
2009
Impact on Group financial
report
As the Group does not
currently construct or
produce any qualifying
assets which are financed
by borrowings the revised
standard will have no
impact.
1 January
2009
Refer to AASB 2007-3
above.
1 July
2009
1 January
2009
Refer to AASB 2007-6
above.
1 July
2009
Reference Title
Summary
AASB
2007-6
Amendments
to Australian
Accounting
Standards arising
from AASB 123
[AASB 1, AASB
101, AASB 107,
AASB 111, AASB
116 & AASB 138
and Interpretations
1 & 12]
AASB 8
Operating
Segments
AASB 123 Borrowing Costs
Amending standard
issued as a
consequence of
AASB 123 (revised)
Borrowing Costs.
This new standard
will replace AASB
114 Segment
Reporting and adopts
a management
approach to segment
reporting.
AASB 123 previously
permitted entities
to choose between
expensing all
borrowing costs
and capitalizing
those that were
attributable to
the acquisition,
construction or
production of a
qualifying asset. The
revised version of
AASB 123 requires
borrowing costs to be
capitalized if they are
directly attributable
to the acquisition,
construction or
production of a
qualifying asset.
35
nOTES TO THE FInanCIaL STaTEmEnTS
For the year Ended 30 June 2009
2 SummaRy Of SIgnIfICanT aCCOunTIng pOlICIES (cont’d)
(b) Statement of compliance (cont’d)
Application
date for
Group*
1 July 2009
Application
date of
standard*
1 January
2009
Impact on Group financial
report
These amendments are
not expected to have any
impact on the Group’s
financial report as the
group does not have on
issue or expect to issue
any puttable financial
instruments as defined by
the amendments.
1 January
2009
1 January
2009
1 January
2009
Refer to ASSB 101 below 1 July 2009
Refer to ASSB 101 below 1 July 2009
1 July 2009
The Group has share-
based payment
arrangements that may
be affected by these
amendments. However,
the Group has not yet
determined the extent of
the impact, if any.
Reference
Title
Summary
AASB 2008-2 Amendments
to Australian
Accounting
Standard
- Puttable
Financial
Instruments
and Obligations
arising on
Liquidation
AASB
2007-8
AASB
2007-10
AASB
2008-1
Amendments
to Australian
Accounting
Standards arising
from AASB 101
Further
amendments
to Australian
Accounting
Standards arising
from AASB 101
Amendments
to Australian
Accounting
Standard –
Share-based
Payments:
Vesting
Conditions and
Cancellations
[AASB 2]
These amendments
introduce an exception
to the definition of
a financial liability
to classify as equity
instruments certain
puttable financial
instruments and
certain other financial
instruments that
impose an obligation
to deliver a pro-rata
share of net assets
only upon liquidation
Amending standards
issued as a
consequence of AASB
101.
Redefines the
composition of
financial statements
including the inclusion
of a statement
of comprehensive
income.
Amendment to
AASB2 clarifies that
vesting conditions
consist of service
and performance
conditions only.
Other elements
of a share-based
payment transaction
should therefore
be considered for
the purpose of
determining fair value.
Cancellations are also
required to be treated
in the same manner
whether cancelled
by the entity or by
another party.
36
EMPIRED LIMITED | 2009 Annual Report
2 SummaRy Of SIgnIfICanT aCCOunTIng pOlICIES (cont’d)
(b) Statement of compliance (cont’d)
Application
date for
Group*
1 July 2009
Application
date of
standard*
1 July
2009
Impact on Group financial
report
The revisions to AASB
3 and amended AASB
127 will be taken into
consideration with
respect to transactions to
which the above revision
and amendment concern
from the operative date.
1 January
2009
No changes are expected
to materially affect the
Group.
1 January
2009
1 July
2009
No changes are expected
to materially affect the
Group.
1 July 2009
1 July
2009
No changes are expected
to materially affect the
Group.
1 July 2009
Reference
Title
Summary
AASB 2008
-3
AASB 2008-
5
AASB 2008-
6
AASB 2008-
8
Amendments
to Australian
Accounting
Standards arising
from AASB 3
and AASB 127
[AASBs 1, 2,
4, 5, 7, 101,
107,112,114,
116, 121, 128,
131, 132, 133,
134, 136, 137,
138 & 139 and
interpretations 9
& 107]
Amendments
to Australian
Accounting
Standards arising
from the Annual
Improvements
Project (July
2008) (AASB
2008-5)
Further
Amendments
to Australian
Accounting
Standards arising
from the Annual
Improvements
Project (July
2008) (AASB
2008-6)
Amendments
to Australian
Accounting
Standards -
Eligible Hedged
Items (AASB
139)]
Amending standards
arising from revised
AASB 3 and amended
127.
Details numerous non-
urgent but necessary
changes to accounting
standards arising from
the IASB’s annual
improvements project.
Details numerous non-
urgent but necessary
changes to accounting
standards arising from
the IASB’s annual
improvements project.
This amendment
clarifies how the
principles that
determine whether a
hedged risk or portion
of cash flows is
eligible for designation
as a hedged item
should be applied in
particular situations.
37
nOTES TO THE FInanCIaL STaTEmEnTS
For the year Ended 30 June 2009
2 SummaRy Of SIgnIfICanT aCCOunTIng pOlICIES (cont’d)
(b) Statement of compliance (cont’d)
Application
date for
Group*
1 July 2009
Application
date of
standard*
1 January
2009
Impact on Group financial
report
The Group will consider
amendments to business
combinations standard
with respect to any
business combinations
the Group undertakes.
1 July
2009
The amendment may
have an impact on the
disclosures included in
the Group’s financial
report
1 July 2009
1 January
2009
AASB 101 is a disclosure
standard so it will have
no direct impact on the
amounts included in the
Group’s financial report.
1 July 2009
1 January
2009
Management does not
believe this will represent
a change in policy for the
Group.
1 July 2009
Reference
Title
Summary
AASB 3
Business
Combinations
AASB 127
Consolidated
and Separate
Financial
Statements
AASB 101
Presentation
of Financial
Statements
AASB
Interpretation
15
Agreements for
the Construction
of Real Estate
This amendment
incorporates IFRS 3,
and enables reporting
entities to continue
to be compliant with
IFRS’s in relation to
the presentation of
financial statements
This amendment
incorporates the
amended IAS 127,
and enables reporting
entities to continue
to be compliant with
IFRS’s in relation to
the presentation of
financial statements
Redefines the
composition of
financial statements
including the inclusion
of a statement of
comprehensive income
Under the
interpretation,
agreements for
the construction
of real estate shall
be accounted for
in accordance with
AASB 111 where
the agreement
meets the definition
of ‘construction
contract’, revenue is
to be accounted for
in accordance with
AASB 118.
38
EMPIRED LIMITED | 2009 Annual Report
2 SummaRy Of SIgnIfICanT aCCOunTIng pOlICIES (cont’d)
(b) Statement of compliance (cont’d)
Application
date of
standard*
1 October
2008
Impact on Group financial
report
The interpretation is not
expected to impact the
Group.
Application
date for
Group*
1 July 2009
1 July
2009
The interpretation is not
expected to impact the
Group.
Reference
Title
Summary
AASB
Interpretation
16
Hedges of a
Net Investment
in a Foreign
Operation
AASB
Interpretation
15
Applies to entities
that hedge foreign
currency risk arising
from net investments
in foreign operations
and that want
to adopt hedge
accounting. The
interpretation
provides clarifying
guidance on several
issues in accounting
for the hedge of a
net investment in a
foreign operation.
This guidance applies
prospectively only and
clarifies that non-cash
dividends payable
should be measures
at the fair value of
the net assets to be
distributed where the
difference between the
fair value and carrying
value of the assets is
recognised in profit
and loss
39
nOTES TO THE FInanCIaL STaTEmEnTS
For the year Ended 30 June 2009
2 SummaRy Of SIgnIfICanT aCCOunTIng pOlICIES (cont’d)
(c) basis of consolidation
The consolidated financial statements comprise the financial statements of Empired Limited and its
subsidiaries as at 30 June each year (‘the Group’) (note 23).
The financial statements of subsidiaries are prepared for the same reporting period as the parent company,
using consistent accounting policies.
Adjustments are made to bring into line any dissimilar accounting policies that may exist.
All intercompany balances and transactions, including unrealised profits arising from intra-group transactions,
have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.
Subsidiaries are consolidated from the date on which control is transferred to the group and cease to be
consolidated from the date on which control is transferred out of the Group.
Where there is loss of control of a subsidiary, the consolidated financial statements include the results for the
part of the reporting period during which Empired Limited has control.
Business Combinations
Business combinations occur where control over another business is obtained and results in the consolidation
of its assets and liabilities. All business combinations, including those involving entities under common
control, are accounted for by applying the purchase method.
The purchase method requires an acquirer of the business to be identified and the cost of the acquisition
and fair values of identifiable assets, liabilities and contingent liabilities to be determined at acquisition date,
being the
date that control is obtained. Cost is determined as the aggregate of fair values of assets given, equity
issued and liabilities assumed in exchange for control together with costs directly attributable to the business
combination.
Goodwill is recognised initially at the excess of cost over the acquirer’s interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities recognised. If the fair value of the acquirer’s interests
is greater than cost, the surplus is immediately recognised in profit or loss.
40
EMPIRED LIMITED | 2009 Annual Report
2 SummaRy Of SIgnIfICanT aCCOunTIng pOlICIES (cont’d)
(d) Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any impairment in value.
Depreciation is calculated on a diminishing value, except computer software which is on a straight-line basis,
over the estimated useful life of the asset as follows:
Buildings & Improvements
Leasehold Improvements
Furniture & Fittings
Computer Hardware
Computer Software
DV
DV
DV
DV
SL
7.5 – 20 yrs
5 – 20 yrs
3 – 20 yrs
3 – 5 yrs
1 – 2.5 yrs
Impairment
The carrying values of plant and equipment are reviewed for impairment when events or changes in
circumstances indicate the carrying value may not be recoverable.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined
for the cash-generating unit to which the asset belongs.
If any such indication exists and where the carrying values exceed the estimated recoverable amount, the
assets or cash-generating units are written down to their recoverable amount.
The recoverable amount of plant and equipment is the greater 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.
Impairment losses are recognised in the income statement in the cost of sales line item.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected to arise from the continued used of the asset.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the item) is included in the income statement in the period the item is
derecognised.
41
nOTES TO THE FInanCIaL STaTEmEnTS
For the year Ended 30 June 2009
2 SummaRy Of SIgnIfICanT aCCOunTIng pOlICIES (cont’d)
(e) borrowing costs
Borrowing costs are recognised as an expense when incurred.
(f) Goodwill
Goodwill on acquisition is initially measured at cost being the excess of the cost of the business combination
over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is not amortised.
Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances
indicate that the carrying value may be impaired.
As at the acquisition date, any goodwill acquired is allocated to each of the cash-generating units expected
to benefit from the combination’s synergies.
Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the
goodwill relates.
Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment
loss is recognised.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed
of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation
when determining the gain or loss on disposal of the operation.
Goodwill disposed of in this circumstance is measured on the basis of the relative values of the operation
disposed of and the portion of the cash-generating unit retained.
(g) Intangible Assets
Acquired both separately and from a business combination
Intangible assets acquired separately are capitalised at cost. Following initial recognition, the cost model is
applied to the class of intangible assets.
Where amortisation is charged on assets with finite lives, this expense is taken to the income statement
through the ‘amortisation expenses’ line item.
Intangible assets, excluding development costs, created within the business are not capitalised and
expenditure is charged against profits in the period in which the expenditure is incurred.
Intangible assets are tested for impairment where an indicator of impairment exists and in the case of
indefinite lived intangibles annually, either individually or at the cash generating unit level. Useful lives are
also examined on an annual basis and adjustments, where applicable, are made on a prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the
net disposal proceeds and the carrying amount of the asset and are recognised on the income statement
when the asset is derecognised.
42
EMPIRED LIMITED | 2009 Annual Report
2 SummaRy Of SIgnIfICanT aCCOunTIng pOlICIES (cont’d)
(h) Impairment of assets
At each reporting date, the Group assesses whether there is any indication that an asset may be impaired.
Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where
the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is
written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an
individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs to
sell and it does not generate cash inflows that are largely independent of those from other assets or groups of
assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset
belongs.
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.
(i) Financial Instruments
All financial assets and financial liabilities are initially recognised at cost, being the fair value of the
consideration given and including acquisition charges associated with the investment.
The fair value is based on the net assets of the investment at balance date.
Classification depends on the purpose for which the investments were acquired, and is determined at initial
recognition.
(i) Loans and receivables
Loans and receivables are measured at fair value. If a receivable is uncollectible, it is written off against
the allowance account for trade receivables.
(ii) Other financial assets
Non-listed investments for which fair value cannot be reliably measured are carried at cost and tested
for impairment.
(iii) Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost.
Impairment
At each reporting date the group assesses whether investments have been impaired. Impairment losses are
recognised in the income statement.
(j) Trade and other receivables
Trade receivables, which generally have 30-45 day terms, are recognised and carried at original invoice
amount less an allowance for any uncollectible amounts.
An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts
are written off when identified.
43
nOTES TO THE FInanCIaL STaTEmEnTS
For the year Ended 30 June 2009
2 SummaRy Of SIgnIfICanT aCCOunTIng pOlICIES (cont’d)
(k) Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short-term
deposits with an original maturity of three months or less.
For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents
as defined above, net of outstanding bank overdrafts.
(l)
Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net
of issue costs associated with the borrowing.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost
using the effective interest method. Amortised cost is calculated by taking into account any issue costs, and
any discount or premium on settlement.
Gains and losses are recognised in the income statement when the liabilities are derecognised and as well as
through the amortisation process.
(m) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a separate asset but only when the reimbursement is
virtually certain. The expense relating to any provision is presented in the income statement net of any
reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and,
where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.
(n) employee leave benefits
(i) Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled
within 12 months of the reporting date are recognised in other payables in respect of employee’s services up
to reporting date. They are measured at the amounts expected to be paid when the liabilities are settled.
Liabilities for sick leave are recognised when the leave is taken and are measured at the rates paid or payable.
(ii) Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the
present value of expected future payments to be made in respect of services provided by employees up to
the reporting date using the projected unit credit method. Consideration is given to expected future wage
and salary levels, experience of employee departures, and periods of service. Expected future payments are
discounted using market yields at the reporting date on national government bonds with terms to maturity
and currencies that match, as closely as possible, the estimated future cash outflows.
44
EMPIRED LIMITED | 2009 Annual Report
2 SummaRy Of SIgnIfICanT aCCOunTIng pOlICIES (cont’d)
(o) Share-based payment transactions
The Group provides to employees (including directors) of the Group in the form of share-based payment
transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled
transactions’).
There are currently two plans in place to provide these benefits:
(i) The Empired Employee Share Option Plan (ESOP2), which provides to all employees excluding
directors, and
(ii) The Executive Share Option Plan (ESOP1), which provides benefits to directors and senior
executives.
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the
date at which they are granted. The fair value is determined using a Black Scholes model further details are
given in note 12.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity,
over the period in which the performance conditions are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date
reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in the
opinion of the directors of the Group, will ultimately vest. This opinion is formed based on the best available
information at balance date. No adjustment is made for the likelihood of market performance conditions
being met as the effect of these conditions is included in the determination of fair value at grant date.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the
terms had not been modified. In addition, an expense is recognised for any increase in the value of the
transaction as a result of the modification, as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation,
and any expense not yet recognised for the award is recognised immediately. However, if a new award is
substituted for the cancelled award, and designated as a replacement award on the date that it is granted,
the cancelled and new award are treated as if they were a modification of the original award, as described in
the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation
of earnings per share (see note 6).
(p) Leases
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership
of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if
lower, at the present value of the minimum lease payments.
Lease payments are apportioned between the finance charges and reduction of the lease liability so as to
achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged
directly against income.
45
nOTES TO THE FInanCIaL STaTEmEnTS
For the year Ended 30 June 2009
2 SummaRy Of SIgnIfICanT aCCOunTIng pOlICIES (cont’d)
(p) Leases (cont’d)
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease
term.
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified
as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying
amount of the leased asset and recognised over the lease term on the same bases as the lease income.
Operating lease payments are recognised as an expense in the income statement on a straight-line basis over
the lease term.
(q) Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and
the revenue can be reliably measured. The following specific recognition criteria must also be met before
revenue is recognised:
Rendering of services
Revenue from the provision of services is recognised when the service has been provided.
Maintenance, Hosting and Support fees
Revenue from maintenance, hosting and support is recognised and bought to account over the time it is
earned. Unexpired revenue is recorded as unearned income.
Interest received
Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the
net carrying amount of the financial asset.
(r) Government grants
Government grants are recognised at their fair value where there is reasonable assurance that the grant will
be received and all attaching conditions will be complied with.
When the grant relates to an expense item, it is recognised as income over the periods necessary to match
the grant on a systematic basis to the costs that it is intended to compensate.
Where the grant relates to an asset, the fair value is credited to a deferred income amount and is released to
the income statement over the expected useful life of the relevant asset by equal annual instalments.
(s) Foreign currency transactions
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at
the date of the transaction.
Exchange differences arising on the translation of monetary items are recognised in the income statement
46
EMPIRED LIMITED | 2009 Annual Report
2 SummaRy Of SIgnIfICanT aCCOunTIng pOlICIES (cont’d)
(t)
Income tax
Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases
of assets and liabilities and their carrying amounts for the financial reporting purposes.
•
•
•
•
Deferred income tax liabilities are recognised for all taxable temporary differences:
except where the deferred income tax liability arises from the initial recognition of an asset or liability in
a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
in respect of taxable temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, except where the timing of the reversal of the temporary differences can be
controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused
tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses
can be utilised:
except where the deferred income tax asset relating to the deductible temporary differences arises from the
initial recognition of an asset or liability in a transaction that is not a business combination and, at the time
of the transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of deductible temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available against which
the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the
deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted
or substantively enacted at the balance sheet date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the income
statement.
47
nOTES TO THE FInanCIaL STaTEmEnTS
For the year Ended 30 June 2009
2 SummaRy Of SIgnIfICanT aCCOunTIng pOlICIES (cont’d)
(u) Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
• where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority,
in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense
item as applicable; and
•
receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the balance sheet.
Cash flows are included in the Cash Flow statement on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority
are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
(v) Significant accounting judgements, estimates and assumptions
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the entity and that are believed
to be reasonable under the circumstances.
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The estimates and assumptions that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year are discussed below.
The Group tests annually whether goodwill costs have suffered any impairment, in accordance with the
accounting policies.
i. Impairment of goodwill and intangibles with indefinite useful lives
The group determines whether goodwill and intangibles with indefinite useful lives are impaired at least
on an annual basis. This requires an estimation of the recoverable amount of the cash-generating unit to
which the goodwill and intangibles with indefinite useful lives are allocated. The assumptions used in this
estimation of recoverable amount and carrying amount of goodwill and
intangibles with indefinite useful lives are discussed in note 22.
ii. Provision for Impairment of Receivables
Included in trade receivables at reporting date is an amount receivable from sales made to Commander
Integrated Networks Pty Ltd during the financial year amounting to $8,477.55. Commander went into
administration in August 2008. While there is inherent uncertainty in relation to the outcome of the
administration, the directors understand that the full amount of the debt is unlikely to be recoverable
from the administrators, and no provision for impairment has been made.
48
3 REvEnuES
Sales Revenue
Services
Other Revenue
Interest
Government grants
Management Fee
Exchange gain
Other
EMPIRED LIMITED | 2009 Annual Report
COnSOlIDaTED
2009
$
2008
$
paREnT
2009
$
2008
$
32,633,570
32,633,570
18,924,137
18,924,137
32,633,570
32,633,570
18,924,137
18,924,137
14,788
-
60,468
82,643
29,522
187,421
35,261
13,330
340,000
-
-
388,591
14,788
-
60,468
82,643
29,522
187,421
35,261
13,330
340,000
-
-
388,591
32,820,991
19,312,728
32,820,991
19,312,728
4 EXpEnSES
Profit before income tax includes the following specific expenses:
Operating lease Rentals
Minimum lease payments
Other Expenses
Insurance
Travel
Administration
Other
5 InCOmE TaX
(a) Income tax expense
The major components of income tax
expense are:
Current income tax payables
Deferred income tax relating to
origination and reversal of temporary
differences
COnSOlIDaTED
2009
$
2008
$
6,492
6,492
133,341
205,078
862,150
846,443
1,623
1,623
60,816
130,912
567,898
737,003
paREnT
2009
$
6,492
6,492
133,341
205,078
862,150
848,701
2008
$
1,623
1,623
60,816
130,912
567,898
741,887
2,047,012
1,496,629
2,049,270
1,501,513
2,053,504
1,498,252
2,055,762
1,503,136
81,526
144,708
81,526
144,708
320,712
(467,917)
320,712
(467,917)
Adjustments
(124,790)
-
(124,790)
-
Income tax expense / (benefit) reported in
income statement
(b) amounts charged or credited
directly to equity
Expenses relating to initial public offering
Income tax expense reported in equity
277,448
(323,209)
277,448
(323,209)
-
-
(120,117)
(120,117)
-
-
(120,117)
(120,117)
49
nOTES TO THE FInanCIaL STaTEmEnTS
For the year Ended 30 June 2009
5 InCOmE TaX (cont’d)
(c) Reconciliation between aggregate tax expense recognised in the income statement and tax
expenses calculated per the statutory income tax rate
Prima facie tax on operating profit
calculated at 30%
Add tax effect of:
Non-deductible expenses
Entertainment
Other non-deductible expenses
Other
Adjustments for prior year losses now
brought to account
COnSOlIDaTED
2009
$
2008
$
paREnT
2009
$
2008
$
242,958
291,554
242,958
291,554
242,958
291,554
242,958
291,554
26,266
-
14,242
(6,018)
17,754
5,731
-
-
26,266
-
14,242
(6,018)
17,754
5,731
-
-
-
(638,248)
-
(638,248)
Aggregate income tax expense (income)
277,448
(323,209)
277,448
(323,209)
(d) Recognised deferred tax assets and liabilities
Deferred income tax balances at 30 June relate to the following:
(i) Deferred Tax Liabilities
Prepaid expenses
Invoices in dispute
Work in progress
Gross deferred tax liabilities
Set-off deferred tax liabilities
Net deferred tax liabilities
(ii) Deferred Tax Assets
Provisions:
Annual leave
Long service leave
Accrued superannuation
Equity raising costs
Borrowing costs
Tax losses
Gross deferred tax assets
Set-off deferred tax liabilities
Net deferred tax assets
50
COnSOlIDaTED
2009
$
2008
$
(3,268)
(7,764)
(184,885)
(195,917)
(6,340)
(659)
(81,895)
(88,894)
195,917
88,894
-
-
172,288
117,304
8,195
83,199
88,631
4,445
106,481
463,239
6,667
80,172
120,117
5,393
347,276
676,928
(195,917)
(88,894)
267,322
588,034
EMPIRED LIMITED | 2009 Annual Report
5 InCOmE TaX (cont’d)
(e) Tax consolidation
Effective 1 July 2002, for the purposes of income taxation, Empired Limited and its 100% subsidiaries formed
a tax consolidated group. The head entity of the consolidated group is Empired Limited.
The head entity is responsible for tax liabilities of the group. Intra group transactions are ignored for tax
purposes and there is a single return lodged on behalf of the group.
Empired Limited formally notified the Australian Taxation Office of its adoption of the tax consolidation
regime upon lodgement of its 30 June 2003 consolidated tax return.
There was a tax funding agreement formalised at 30 June 2003. Under this tax funding agreement Empired
Limited is responsible for the tax liabilities of the group.
(f) Income Tax Payable
COnSOlIDaTED
2009
$
2008
$
paREnT
2009
$
2008
$
Income Tax Payable
81,526
81,526
144,708
144,708
81,526
81,526
144,708
144,708
6 EaRnIngS pER ShaRE
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary
equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing net profit attributable to ordinary equity
holders of the parent by the weighted average number of ordinary shares outstanding during the year plus
the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive
potential ordinary shares into ordinary shares.
The following represents the income and share data used in the basic and diluted earnings per share
computations:
COnSOlIDaTED
2008
$
2009
$
Net profit attributable to ordinary equity holders of the parent
532,411
1,295,055
2009
Thousands
2008
Thousands
Weighted average number of ordinary shares for basic earnings per share
46,222
43,294
Effect of dilution:
Share options
9,458
8,326
Weighted average number of ordinary shares adjusted for the effect of
dilution
55,680
51,620
51
nOTES TO THE FInanCIaL STaTEmEnTS
For the year Ended 30 June 2009
7 CaSh anD CaSh EquIvalEnTS
(i) Reconciliation of Cash
For the purposes of the cash flow statement, cash includes cash on hand and cash in banks. Cash at
the end of the year as shown in the cash flow statement is reconciled to the related items in the balance
sheet as follows:
Cash at bank and in hand
Term deposit
COnSOlIDaTED
paREnT
2009
$
239,203
106,220
345,423
2008
$
2009
$
2008
$
42,897
239,203
42,897
106,220
106,220
149,117
345,423
106,220
149,117
(ii) Financing facilities available
At reporting date the following facilities were available:
Bank overdraft facility
3,000,000
-
3,000,000
-
Invoice Discounting Facility
-
1,548,725
-
1,548,725
The invoice discounting facility with a limit of $2,500,000 (2008: $2,500,000) was converted to a bank
overdraft facility in December 2008. The funds established with this facility are $3,000,000.
(iii) Reconciliation of net cash flows from operating activities to operating profit (loss) after income tax
COnSOlIDaTED
paREnT
2009
$
2008
$
2009
$
2008
$
Operating profit\(loss) after income
tax
532,411
1,295,055
532,411
1,295,055
Depreciation
254,076
149,932
251,818
145,049
Write down\(up) of investment in
subsidiary
-
-
Option Plan Expense
43,179
61,647
2,258
43,179
4,883
61,647
52
EMPIRED LIMITED | 2009 Annual Report
7 CaSh anD CaSh EquIvalEnTS (cont’d)
(iii) Reconciliation of net cash flows from operating activities to operating profit (loss) after income tax (cont’d)
COnSOlIDaTED
paREnT
2009
$
2008
$
2009
$
2008
$
Changes in assets and liabilities net of
effects of purchases and disposals of
controlled entities:
(Increase)/decrease in net trade
debtors
(Increase)/decrease in other
receivables
1,777,227
(6,422,003)
1,777,227
(6,422,003)
210,525
(213,858)
210,525
(213,858)
(Increase)/decrease in other assets
213,689
(490,138)
213,689
(490,138)
(Increase)/decrease in prepayments
7,386
(59,959)
7,386
(59,959)
(Increase)/decrease in unbilled
income
Increase/(decrease) in trade
creditors
(343,295)
(113,974)
(343,295)
(113,974)
16,939
2,256,763
16,939
2,256,763
Increase/(decrease) in audit fees
-
(13,000)
-
(13,000)
Increase/(decrease) in other
creditors
Increase/(decrease) in unexpired
interest
Increase/(decrease) in accrued
liabilities
Increase/(decrease) in unearned
income
(1,202,276)
1,966,574
(1,202,276)
1,966,574
2,365
19,218
2,365
19,218
373,737
379,782
373,737
379,782
362,438
399
362,438
399
Increase/(decrease) in income tax
(63,181)
144,708
(63,181)
144,708
Increase/(decrease) in provision for
employee entitlements
net cash used in operating
activities
(iv) Non-cash investing and financing activities
188,376
285,946
188,376
285,946
2,373,596
(752,908)
2,373,596
(752,908)
Acquisition of plant and equipment
by means of finance lease
338,395
172,160
338,395
172,160
53
nOTES TO THE FInanCIaL STaTEmEnTS
For the year Ended 30 June 2009
8 TRaDE anD OThER RECEIvablES (CuRREnT)
Trade receivables
5,840,633
7,617,860
5,840,633
7,617,860
COnSOlIDaTED
2008
2009
$
$
paREnT
2009
$
2008
$
Term deposit receivable
Unbilled income
Hire purchase funds receivable
Withholding tax receivable
5,840,633
7,617,860
5,840,633
7,617,860
3,500
3,500
3,500
3,500
616,282
272,987
616,282
272,987
-
-
210,358
167
-
-
210,358
167
6,460,415
8,104,872
6,460,415
8,104,872
Trade receivables are non-interest bearing and are generally on 30-day terms. (For further details on credit
risk refer to Note 18).
9 OThER aSSETS
Current
Prepayments
145,936
153,323
145,936
153,323
Total current other assets
145,936
153,323
145,936
153,323
54
EMPIRED LIMITED | 2009 Annual Report
10 pROpERTy, planT anD EquIpmEnT
COnSOlIDaTED
paREnT
2009
$
2008
$
2009
$
2008
$
buildings and Improvements
At cost
19,752
19,752
19,752
19,752
Accumulated depreciation
(13,041)
(12,243)
(13,041)
(12,243)
Total Buildings and Improvements
6,711
7,509
6,711
7,509
plant and Equipment
Plant and equipment
At cost
1,019,228
706,169
913,501
600,442
Accumulated depreciation
(664,359)
(404,823)
(572,207)
(314,929)
Leased plant and equipment
At cost
354,869
301,346
341,294
285,513
544,921
442,099
544,921
442,099
Accumulated depreciation
(553,222)
(403,290)
(463,328)
(318,236)
Total property, plant & Equipment
701,610
325,108
685,777
304,389
Assets are held as security for hire purchase
contracts.
plant and Equipment
Movements during the year:
Opening balance 1 July 2008
Additions
Disposals
701,610
461,559
(659)
325,108
685,777
304,389
526,434
461,559
526,434
-
(659)
-
Depreciation expense
(254,076)
(149,932)
(251,818)
(145,048)
Closing balance 30 June 2009
908,414
701,610
894,839
685,777
55
nOTES TO THE FInanCIaL STaTEmEnTS
For the year Ended 30 June 2009
11 InTangIblE aSSETS
COnSOlIDaTED
2008
2009
$
$
paREnT
2009
$
2008
Goodwill at cost
3,948,764
3,827,164
2,081,806
1,960,206
Accumulated impaired losses
-
-
-
-
3,948,764
3,827,164
2,081,806
1,960,206
COnSOlIDaTED
2008
2009
$
$
paREnT
2009
$
2008
Balance at the beginning of the year
3,827,164
1,866,958
1,960,206
-
Additions
121,600
1,960,206
121,600
1,960,206
Accumulated amortisation and impairment
-
-
-
-
3,948,764
3,827,164
2,081,806
1,960,206
Goodwill has been tested for impairment as detailed at note 22. No impairment provision was required.
56
EMPIRED LIMITED | 2009 Annual Report
12 EMPLOYEE BENEFITS
(a) Empired employee share option plan
The Group has an employee share options plan (ESOP2) for the granting of non-transferable options to
employees and senior executives to assist in motivating and retaining employees.
Options issued under the ESOP2 will vest on the sooner of one of the following conditions being satisfied:
(i)
on the second anniversary, one third of the grant of options;
(ii) on the third anniversary, two thirds of the grant of options;
(iii) on the fourth anniversary, all of the grant of options; or
(iv) a takeover offer or bid in respect of Empired shares is made in accordance with the Corporations
Act and the Board recommends that shareholders accept the offer.
Other relevant terms and conditions applicable to options granted under the ESOP2 include:
(a) any vested options that are unexercised on the fifth anniversary of their grant date will expire; and
(b) upon exercise, options will be settled in ordinary shares of Empired Limited on the basis of one share
for each option exercised.
On the 1 August 2008, 953,814 options were granted with a fair value as follows:
Options
Fair value per option
Exercise price per
option
Expiry Date
600,000
176,907
176,907
953,814
$0.040
$0.054
$0.051
$0.30
$0.25
$0.30
1 August 2011
1 August 2012
1 August 2012
The options were granted over ordinary shares and are exercisable upon meeting the vesting conditions
outlined above and until their expiry date.
The fair value of the options are estimated at the date of grant using the Black Scholes model taking into
account the terms and the conditions upon which the options were granted. The following table gives the
assumptions made in determining the fair value of the options granted:
1 August 2008
(600,000) options
1 August 2008
(353,814) options
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of option (years)
Option exercise price ($)
Share price at grant date ($) (Net Asset Backing)
4.16%
83%
5.98%
3 years
$0.30
$0.12
4.16%
83%
5.98%
4 years
$0.25,$0.30
$0.12
57
notes to the financial statements
For the Year Ended 30 June 2009
12 EMPLOYEE BENEFITS (cont’d)
The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of share
options issued under the ESOP2.
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding at the end of the year
2009
No.
676,476
953,814
(63,082)
-
(163,734)
1,403,474
2009
WAEP
$0.35
$0.29
-
-
-
$0.313
2008
No.
676,476
-
-
-
-
676,476
Exercisable at the end of the year
700,773
$0.26
-
2008
WAEP
$0.35
-
-
-
-
$0.35
-
The balance as at 30 June 2008 is represented by:
• 277,550 options over ordinary shares with an average exercise price of $0.35 each, exercisable upon
meeting the above conditions and until 31 July 2010;
• 398,926 options over ordinary shares with an average exercise price of $0.35 each, exercisable upon
meeting the above conditions and until 22 February 2012
The weighted average contractual life for the share options outstanding as at 30 June 2009 is 1.89 years
(2008: 3 years).
Share options issued under the ESOP2 and outstanding at the end of the year have the following exercise
prices:
Expiry Date
31 July 2010
31 July 2010
31 July 2010
22 February 2012
22 February 2012
22 February 2012
1 August 2011
1 August 2011
1 August 2012
Total
Exercise
price
2009
No.
2008
No.
$0.30
$0.35
$0.40
$0.30
$0.35
$0.40
$0.30
$0.25
$0.30
78,383
76,081
76,081
94,070
94,066
94,061
600,000
145,366
145,366
1,403,474
94,364
91,593
91,593
132,981
132,977
132,968
-
-
-
676,476
58
EMPIRED LIMITED | 2009 Annual Report
12 EMPLOYEE BENEFITS (cont’d)
(b) Empired executive share option plan
The Group has an executive share option plan (ESOP1) for the granting of non-transferable options to
certain directors and senior executives to assist in motivating and retaining executives.
Options issued under the ESOP will vest on the sooner of one of the following conditions being satisfied:
(i)
(iI) a takeover offer or bid in respect of Empired shares is made in accordance with the Corporations Act
on the second anniversary of the grant of the options;
and the Board recommends that shareholders accept the offer.
Other relevant terms and conditions applicable to options granted under the ESOP1 include:
(a) any vested options that are unexercised on the fifth anniversary of their grant date will expire;
(b) upon exercise, options will be settled in ordinary shares of Empired Limited; and
(c) options are issued to executives subject to successful ASX listing which has occurred post balance date.
During the financial year the below options were granted to executives:
Options
Fair value per option
Exercise price per
option
Expiry date
1,050,000
1,200,000
2,250,000
$0.019
$0.019
$0.30
$0.30
21 November 2011
12 January 2011
The options were granted over ordinary shares and are exercisable upon meeting the vesting conditions
outlined above and until their expiry date.
The fair value of the options are estimated at the date of grant using the Black Scholes model. The following
table gives the assumptions made in determining the fair value of the options granted in the year to 30 June
2009.
21 November 2008
(1,050,000) options
1 December 2008
(1,200,000 )options
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of option (years)
Option exercise price ($)
Share price at grant date ($) (Net Asset Backing)
7.5%
83%
4.62%
3 years
$0.30
$0.066
7.5%
83%
4.26%
3 years
$0.30
$0.066
The expected life of the options is based on historical data and is not necessarily indicative of exercise
patterns that may occur.
The expected volatility reflects the assumption that the historical volatility is indicative of future trends,
which may also not necessarily be the actual outcome.
No other features of options granted were incorporated into the measurement of fair value.
59
notes to the financial statements
For the Year Ended 30 June 2009
12 EMPLOYEE BENEFITS (cont’d)
(b) Empired executive share option plan (cont’d)
The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of share
options issued under the ESOP1.
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
2009
WAEP
$0.32
$0.35
2009
No.
7,350,000
2,250,000
(1,500,000)
-
(100,000)
Outstanding at the end of the year
8,000,000
$0.32
2008
No.
3,885,000
3,600,000
-
(11,666)
(123,334)
7,350,000
2008
WAEP
$0.25
$0.40
$0.32
Exercisable at the end of the year
2,288,345
$ 0.25
-
-
As at 30 June 2009 there were 8,000,000 options over ordinary shares with an average exercise price of $0.32
each, exercisable upon meeting the conditions outlined above and until their expiry dates as set out in the
table below.
The weighted average contractual life for the share options outstanding as at 30 June 2009 is 1.39 years
(2008: 2.39 years).
Share options issued under the ESOP1 and outstanding at the end of the year have the following average
exercise prices:
Expiry Date
23 November 2009
28 November 2010
23 March 2011
28 July 2011
17 November 2010
17 November 2011
23 July 2010
1 December 2011
21 November 2011
Total
Exercise
price
2009
No.
2008
No.
$0.25
$0.25
$0.25
$0.25
$0.25
$0.25
$0.40
$0.40
$0.30
-
700,000
1,100,000
300,000
750,000
500,000
2,400,000
1,200,000
1,050,000
8,000,000
100,000
700,000
1,100,000
600,000
750,000
500,000
3,600,000
-
-
7,350,000
60
EMPIRED LIMITED | 2009 Annual Report
12 EMPLOYEE BENEFITS (cont’d)
c) Empired purchaser share option plan
Empired Limited issued share options as part of the acquisition of the Quadrant Group. Details of the
options granted can be found below.
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding at the end of the year
2009
No.
300,000
100,000
(100,000)
-
-
300,000
2009
WAEP
$0.40
$0.30
$0.366
2008
No.
-
300,000
-
-
-
300,000
Exercisable at the end of the year
300,000
$0.366
300,000
2008
WAEP
-
$0.40
$0.40
$0.40
The fair value of the options are estimated at the date of grant using a Black Scholes model. The following
table gives the assumptions made in determining the fair value of the options granted in the year to 30 June
2009.
1 December 2008
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of option (years)
Option exercise price ($)
Share price at grant date ($) (Net Asset Backing)
7.5%
83%
4.26%
3 years
$0.40
$0.066
61
notes to the financial statements
For the Year Ended 30 June 2009
13 TRADE AND OTHER PAYABLES (CURRENT)
Trade payables
Superannuation payable
GST payable
PAYG payable
Accrued liabilities
Credit cards payable
Other
CONSOLIDATED
2008
2009
$
$
PARENT
2009
$
2008
$
2,563,998
2,547,060
2,563,998
2,547,060
277,328
406,773
267,237
645,853
277,328
406,773
267,237
645,853
-
1,076,817
-
1,076,817
980,214
606,476
980,214
606,476
19,859
6,671
25,948
4,075
19,859
6,671
25,948
4,075
4,254,843
5,173,466
4,254,843
5,173,466
Included in the above are aggregate amounts
payable to the following related parties:
Owing to directors and director related entities
22,447
26,292
22,447
26,292
Trade payables are non-interest bearing and are normally settled on 30-day terms.
For terms and conditions relating to related parties refer to note 23.
The net of GST payable and GST receivable and Superannuation payable and is remitted to the appropriate
body on a quarterly basis. PAYG payable is remitted to the appropriate body on a monthly basis.
14 FINANCIAL LIABILITIES
Effective
interest
rate %
CONSOLIDATED
2008
2009
$
$
PARENT
2009
$
2008
$
Current
Obligations under finance leases and
hire purchase contracts (note 19)
Obligations under premium funding
contracts
Invoice discounting facility
Deferred consideration
Non-current
Obligations under finance leases and
hire purchase contracts (note 19)
Loan from Subsidiary
192,310
164,981
192,310
164,981
72,048
-
-
264,358
178,563
-
178,563
56,948
951,274
260,700
1,433,903
254,795
-
254,795
72,048
-
-
264,358
178,563
351,651
530,214
56,948
951,274
260,700
1,433,903
254,795
351,651
606,446
Hire Purchase Contracts
Hire purchase contract maturity ranges from June 2009 to June 2012.
62
EMPIRED LIMITED | 2009 Annual Report
14 FINANCIAL LIABILITIES (cont’d)
CONSOLIDATED
2008
2009
$
$
PARENT
2009
$
2008
$
Finance facilities available
At reporting date, the following financing
facilities had been negotiated and were available:
Total facilities:
- Invoice discounting facility
- Bank overdraft facility
Facilities used at reporting date
- Invoice discounting facility
- Bank overdraft facility
-
3,000,000
2,500,000
-
-
3,000,000
2,500,000
-
-
-
(951,275)
-
-
-
(951,275)
-
Facilities unused at reporting date
3,000,000
1,548,725
3,000,000
1,548,725
The invoice discounting facility was converted to a bank overdraft facility in December 2008. The facility is
reviewed on an annual basis with financial covenants of EBITDA and net tangible assets tested quarterly.
The Bank of Western Australia holds a fixed floating charge over company assets. Maximum prospective
liability set out in the charge is ten million dollars.
15 PROVISIONS
Current
Employee benefits
Non-current
Employee benefits
16 UNEARNED REVENUE
Current
Unearned Revenue
CONSOLIDATED
2008
2009
$
$
PARENT
2009
$
2008
$
574,293
574,293
391,014
391,014
574,293
574,293
391,014
391,014
27,318
27,318
22,221
22,221
27,318
27,318
22,221
22,221
CONSOLIDATED
2008
2009
$
$
PARENT
2009
$
2008
$
565,355
565,355
202,917
202,917
565,355
565,355
202,917
202,917
63
notes to the financial statements
For the Year Ended 30 June 2009
17 ISSUED CAPITAL AND RESERVES
Ordinary Shares
Issued and fully paid
Issued and fully paid
Movement in ordinary shares
on the issue
At 1 July 2007
Return of capital in
discontinued operations
Capital raising
Issue costs
CONSOLIDATED
2008
2009
$
$
PARENT
2009
$
2008
$
2,775,982
2,775,982
2,775,982
2,775,982
2,775,982
2,775,982
2,775,982
2,775,982
No.
Price
($)
Value
($)
No.
Price
($)
Value ($)
36,210,648
5,936,265
36,210,648
5,936,265
-
(5,788,331)
-
(5,788,331)
10,000,000
0.30
3,000,000
10,000,000
0.30
3,000,000
-
(374,285)
-
(374,285)
Conversion of options
11,666
0.20
2,333
11,666
0.20
2,333
At 30 June 2008
46,222,314
2,775,982
46,222,314
2,775,982
At 30 June 2009
46,222,314
2,775,982
46,222,314
2,775,982
-
-
-
-
Ordinary shares entitle the holder to participate in dividends, and carry one vote per share. These shares have
no par value.
Capital Management Adequacy
The Group’s objectives when managing capital is to safeguard the ability to continue as a going concern
and to maintain a conservative capital structure to allow management to focus on the core business results,
including returns to shareholders.
There are no externally imposed capital requirements.
Options
The company has two share option schemes under which options to subscribe for the company’s shares have
been granted to certain executives and employees (refer note 12). In addition a total 300,000 options were
granted in relation to the acquisition of Quadrant Group. The employee equity benefits reserve is used to
record the value of equity benefits provided to employees and directors as part of their remuneration.
64
EMPIRED LIMITED | 2009 Annual Report
18 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise bank loans and hire purchase contracts, cash and short-
term deposits.
The main purpose of these financial instruments is to raise finance for the Group’s operations.
The Group has various other financial instruments such as trade debtors and trade creditors, which arise
directly from its operations.
It is, and has been throughout the period under review, the Group’s policy that no trading in financial
instruments shall be undertaken.
The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk, foreign
currency risk and credit risk. The board reviews and agrees policies for managing each of these risks and they
are summarised below.
Market risk
• Interest rate risk
Exposure to market interest rates is limited to the Company’s cash balances. Cash balances are disclosed
at note 7.
Cash at bank accounts attract a variable interest rate of 2.75% (2008: 5.95%) based on the cash balance
at year end. Cash on deposit attracts a variable interest rate of 3.71% (2008: 5.00%) at the end of the
year.
At 30 June 2009, if interest rates had changed by +/- 1% from the year end rates above, after tax profits
would have been $2,412 (2008: $1,040) lower/higher.
The Company constantly monitors its interest rate exposure.
• Foreign currency risk
The Group’s exposure to foreign currency risk is minimal. Trade debtor and trade creditor transactions
are entered into in foreign currency and fluctuations in these currencies may have a minor impact on the
Company’s financial results.
The exchange rates are closely monitored within the Company.
• Commodity price risk
The Group’s exposure to price risk is minimal.
65
notes to the financial statements
For the Year Ended 30 June 2009
18 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)
Credit risk
The Group trades only with recognised, creditworthy third parties.
It is the Group policy that all customers who wish to trade on credit terms are subject to credit verification
procedures. Customers that fail to meet the Group’s creditworthiness may transact with the group only on a
prepayment basis.
In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure
to bad debts is not significant.
For transactions that are not denominated in the measurement currency of the relevant operating unit, the
Group does not offer credit terms without the specific approval of the Head of Credit Control.
With respect to credit risk arising from the other financial assets of the Group, which comprise cash and cash
equivalents, available-for-sale financial assets and certain derivative instruments, the Group’s exposure to
credit risk arises from default of the counter party, with a maximum exposure equal to the carrying amount
of these instruments.
• Exposure to credit risk
The Group’s maximum exposure to credit risk at the report date was:
2009
$
Loans and receivables (note 8)
5,840,633
5,840,633
The aging of the Group’s trade receivables at reporting date was:
Not past due
Past due 0-30 days
Past due 31-60 days
Past due 60 days
2009
$
5,046,582
272,285
34,186
487,580
5,840,633
The group expects to be able to recover all outstanding debts.
Liquidity risk
2008
$
7,617,860
7,617,860
2008
$
4,713,666
1,625,075
390,545
888,574
7,617,860
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use
of bank overdrafts and hire purchase contracts.
The Group manages liquidity risk by forecasting and monitoring cash flows on a continuing basis.
66
EMPIRED LIMITED | 2009 Annual Report
19 FINANCIAL INSTRUMENTS
The fair value of financial assets and liabilities Is considered to approximate their carrying values.
The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed
period of maturity, as well as management’s expectations of the settlement period for all other financial
instruments. As such, the amounts may not reconcile to the balance sheet.
Interest Rate Risk
Exposure to interest rate risks on financial assets and liabilities are summarised as follows:
2009
Floating
interest rate
Fixed
Interest
Rate
1 year or
less
2009
$
3,500
106,220
-
Fixed
Interest
Rate
Over 1
to 5 years
2009
$
-
-
-
-
-
Non-interest
bearing
Carrying
amount as
per balance
sheet
Weighted
average
effective
interest rate
2009
$
-
-
-
2009
$
3,500
106,220
238,300
2009
1.250%
4.69%
2.75%
6,456,915
6,456,915
-
6,456,915
6,804,935
2009
$
-
-
238,300
Financial Assets
Term deposit
Term deposit
Cash
Loans and
receivables
Total financial assets
238,300
109,720
-
-
Financial liabilities –
at amortised cost
Overdraft Facility
Accounts payables
Hire purchase
Short term loans
Total financial
liabilities
-
-
-
-
-
-
-
192,310
72,048
-
-
178,563
-
-
2,563,998
-
-
-
2,563,998
370,873
72,048
-
-
10.128%
6.215%
264,358
178,563
2,563,998
3,006,919
iii)The aging of the Group’s trade payables at reporting date was:
Not past due
Past due 0-30 days
Past due 31-60 days
Past due 60 days
2009
$
2,555,921
-
-
8,078
2,563,998
67
notes to the financial statements
For the Year Ended 30 June 2009
19 FINANCIAL INSTRUMENTS (cont’d)
2008
i) Financial Assets
Term deposit
Term deposit
Cash
Loans and receivables
Floating
interest
rate
2008
$
-
-
42,397
-
Fixed
Interest
Rate
1 year
or less
2008
$
3,500
106,220
-
-
Total financial assets
42,397
109,720
Fixed
Interest
Rate
Over 1
to 5 years
2008
$
Non-
interest
bearing
Carrying
amount as
per balance
sheet
Weighted
average
effective
interest rate
2008
$
2008
$
2008
-
-
-
-
-
-
-
-
8,101,372
3,500
106,220
42,397
8,101,372
1.250%
6.74%
5.95%
-
8,101,372
8,253,489
-
ii) Financial
liabilities – at
amortised cost
Invoice discounting
facility
Accounts payables
Hire purchase
Short term loans
Total financial
liabilities
-
-
-
-
-
951,274
-
164,981
56,948
-
-
254,795
-
-
2,547,060
-
260,700
951,274
2,547,060
419,776
317,648
11.08%
-
9.42%
6.93%
1,173,203
254,795
2,807,760
4,235,758
-
iii) The aging of the Group’s trade payables at 30 June 2008:
Not past due
Past due 0-30 days
Past due 31-60 days
Past due 60 days
2008
$
2,245,236
275,651
26,140
33
2,547,060
68
EMPIRED LIMITED | 2009 Annual Report
20 BUSINESS COMBINATIONS
Reconciliation of carrying amounts of goodwill from business combinations during the year:
Carrying amount at the beginning of
the financial year
Additions
AMCOM
Quadrant Group
Commander Australia Limited –
WA ICT Business
CONSOLIDATED
2008
2009
$
$
PARENT
2009
$
2008
$
3,827,164
1,866,958
1,960,206
-
24,000
88,907
-
1,753,140
24,000
88,907
-
1,753,140
8,693
-
207,066
-
8,693
-
207,066
-
3,948,764
3,827,164
2,081,806
1,960,206
Summary of total cash outlaid in relation to Business Combinations:
CONSOLIDATED
2008
2009
$
$
PARENT
2009
$
2008
$
Notes
Total cash outflow/(inflow)
AMCOM
Quadrant Group
Commander Australia Limited
WA ICT Business
20(a)
20(b)
20(c)
-
349,607
-
1,471,625
-
349,607
-
1,471,625
743
84,137
743
84,137
Total cash outflow
7
350,350
1,555,762
350,350
1,555,762
(a) AMCOM
On the 1 July 2008 Empired acquired from AMCOM IT Services, assigned customer contracts. The purchase
price for this acquisition was $24,000, and has been retained by Empired Limited as a credit of purchase of
goods from which AMCOM is to use within twelve months from acquisition date.
Purchase consideration
$
24,000
During the 2008 financial year Empired acquired two businesses, Quadrant Group and Commander Australia
Limited’s WA ICT business. Details of both these acquisitions are documented in the 2008 Annual Report.
69
notes to the financial statements
For the Year Ended 30 June 2009
20 BUSINESS COMBINATIONS (cont’d)
(b) Quadrant Group
On 1 November 2007 Empired Limited acquired all of the assets and liabilities in Quadrant Group business, a
Western Australian IT consulting services provider, for cash consideration of $1,719,838 plus 300,000 options
at a fair value of $0.056 per option.
During the current financial year Empired Limited made payments of $349,607 of which $260,700 related to
deferred consideration for the acquisition of Quadrant group and the balance stamp duty on the acquisition.
(c) Commander Australia Limited – WA ICT Business
A review of the fair value of the net identifiable assets acquired was made during the financial year. It
was determined that the customer contract obligations (unearned revenue) were understated by $7,950.
Payment of stamp duty for this acquisition was also made. As a result the goodwill from the acquisition of
Commander Australia – WA ICT Business has been revised to $215,759 (2008: $207,066)
Details of the acquisition are as follows:
Purchase consideration
Cash paid
Direct costs relating to acquisition
Total purchase consideration
Fair value of net identifiable assets acquired (refer below)
Goodwill
$
30,000
54,880
84,880
130,879
215,759
21 COMMITMENTS AND CONTINGENCIES
No contingent assets or liabilities as at 30 June 2009.
Commitments for Expenditure
A. Hire Purchase
The consolidated entity has various computer
equipment on hire purchase arrangements.
The lease is for a period of 35 months.
Not later than one year
Later than one year but not later than five
years
Less: unexpired charges
Hire Purchase
Current (refer note 14)
Non Current (refer note 14)
CONSOLIDATED
2008
2009
$
$
PARENT
2009
$
2008
$
220,785
191,359
200,933
279,719
220,785
191,359
200,933
279,719
(41,271)
(60,876)
(41,271)
(60,876)
370,873
419,776
370,873
419,776
192,310
178,563
164,981
254,795
192,310
178,563
164,981
254,795
Total Hire Purchase
370,873
419,776
370,873
419,776
70
EMPIRED LIMITED | 2009 Annual Report
21 COMMITMENTS AND CONTINGENCIES (cont’d)
Commitments for Expenditure (cont’d)
CONSOLIDATED
2008
2009
$
$
PARENT
2009
$
2008
$
B. Loan Repayments
The consolidated entity has borrowed
the necessary funds from CGU to finance
insurance. The terms of the loans are for 10
months each.
Not later than one year
Later than one year but not later than five
years
Less: unexpired charges
Loan Repayments
Current (refer note 14)
Non Current (refer note 14)
Total Loan Repayments
C. Operating Leases
76,525
60,893
76,525
60,893
-
(4,477)
72,048
72,048
-
72,048
-
(3,945)
56,948
56,948
-
56,948
-
(4,477)
72,048
72,048
-
72,048
-
(3,945)
56,948
56,948
-
56,948
Office premises are leased under non-cancellable operating leases for periods as follows:
LOCATION
STATE
TERMS
459 Murray Street
PERTH
1 year to 30 June 2010 with two options to extend
for 1 year.
Lvl 13 256 Adelaide Terrace
PERTH
Expires on 30 September 2010.
470 Collins Street
MELBOURNE
Expires on 16 August 2009, monthly agreement
from 17 August 2009.
Their commitment can be seen below:
Minimum lease payments under non-
cancellable operating leases according to the
time expected to elapse to the expected date
of payment:
Not later than one year
Later than one year but not later than five
years
CONSOLIDATED
2008
2009
$
$
PARENT
2009
$
2008
$
451,370
483,072
451,370
483,072
115,353
511,845
115,353
511,845
566,723
994,917 566,723
994,917
Bank Guarantee in relation to rental premises
at 256 Adelaide Terrace:
Maximum amount the bank may call
106,220
106,220
106,220
106,220
71
notes to the financial statements
For the Year Ended 30 June 2009
22 IMPAIRMENT TESTING OF GOODWILL
Goodwill acquired through business combinations (refer Note 11 and 20) has been allocated to the individual
cash generating units for impairment testing. The recoverable amount of each of the cash generating units
has been determined based on a value in use calculation. Value in use is calculated based on the present
value of cash flow projections covering a five-year period.
The discount rate applied to cash flow projections is 9.75% (2008: 11.08%) using a 1.4% growth rate (2008:
4.2%) that is the same as the average growth rate for the IT Infrastructure Services market sector.
Carrying amount of goodwill
CONSOLIDATED
PARENT
IT Infrastructure
Services Segment
Total
Total
2009
$
2008
$
2009
$
2008
$
2009
$
2008
$
Carrying amount of goodwill
3,948,764
3,827,164
3,948,764
3,827,164
2,081,806
1,960,206
There is no impairment losses in the current or prior period.
23 INVESTMENT IN CONTROLLED ENTITY
Other Financial Assets
Country of
Incorporation
% Equity Interest
2008
2009
%
%
Tusk Technologies Pty Ltd
Australia
100
100
Investment ($)
2009
$
365,227
365,227
2008
$
367,485
367,485
The balance of the Tusk Technologies Pty Ltd loan as at 30 June 2009 is $351,651. This loan is unsecured
does not bear interest and is not repayable in the next 12 months. The investment in Tusk Technologies
Pty Ltd is measured at fair value at the 30th of June 2009. The revaluation downwards is recorded in the
income statement. Other than this related party loan there are no other related party transactions requiring
disclosure.
24 EVENTS AFTER THE BALANCE SHEET DATE
There has not arisen in the interval between the end of the financial year and the date of this report any
item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the
Company, to affect significantly the operations of the consolidated entity, the results of those operations, or
the state of affairs of the consolidated entity, in future financial years other than as set out below:
After the balance sheet date the following dividends were proposed by the directors. The dividends have not
been provided and there are no income tax consequences.
Final dividend declared for the year 2009
Final ordinary dividend for the year ended 30 June
2009 of 0.5 cents per fully paid share
Total amount
$231,112
Mr David Taylor resigned as a director of the company on the 31 July 2009.
72
EMPIRED LIMITED | 2009 Annual Report
25 AUDITORS’ REMUNERATION
Amounts received or due and receivable by
auditors or the parent entity:
• an audit or review of the financial report
of the entity and any other entity in the
consolidated entity
• other services in relation to the entity and any
other entity in the consolidated entity:
- tax compliance
- special audits
required by
regulators
Amounts received or due and receivable by other
auditors for:
• other non-audit services
• an audit or review the financial report of
subsidiary entities
CONSOLIDATED
2008
2009
$
$
PARENT
2009
$
2008
$
46,375
19,175
46,375
19,175
-
-
-
-
7,790
54,165
-
19,175
7,790
54,165
-
19,175
23,000
20,210
23,000
20,210
-
77,165
37,595
76,980
-
77,165
37,595
76,980
26 KEY MANAGEMENT PERSONNEL
(a) Directors
The following persons were directors of Empired Limited during the financial year:
M Ashton
D Taylor
R Bevan
R Baskerville
(b) Other key management personnel
The following persons also had authority and responsibility for planning, directing and controlling the
activities of the Group during the financial year:
M Waller Chief Financial Officer and Company Secretary
(c) Remuneration of Key Management Personnel
Information regarding key management personnel compensation for the year ended 30 June 2009 is provided
in the remuneration section of the directors’ report on pages 18 to 23.
73
notes to the financial statements
For the Year Ended 30 June 2009
26 KEY MANAGEMENT PERSONNEL (cont’d)
(d) Option holdings of directors and executives
The movement during the reporting period in the number of options over ordinary shares in Empired Limited
held, directly, indirectly or beneficially, by each of the key management person, including their related parties,
is as follows:
Balance at
beg of period
01-Jul-08
Granted as
Remuneration
Options
Exercised
Net Change
Other #
Balance at
end of period
30-Jun-09
Not Vested
& Not
Exercisable
Vested &
Exercisable
2,550,000
850,000
600,000
-
300,000
150,000
100,000
250,000
814,038
650,000
-
-
-
-
-
-
-
-
-
-
2,850,000
1,000,000
700,000
250,000
1,800,000
750,000
450,000
250,000
1,050,000
250,000
250,000
-
(400,000)
1,064,038
325,692
738,346
(400,000)
5,864,038
3,575,692
2,288,346
Total
4,814,038
1,450,000
Balance at
beg of period
01-Jul-07
Granted as
Remuneration
Options
Exercised
Net Change
Other #
Balance at
end of period
30-Jun-08
Not Vested
& Not
Exercisable
Vested &
Exercisable
1,450,000
250,000
250,000
-
1,100,000
600,000
350,000
-
414,038
400,000
-
-
-
-
-
-
-
-
-
-
-
-
2,550,000
850,000
600,000
-
2,550,000
850,000
600,000
-
814,038
814,038
4,814,038
4,814,038
-
-
-
-
-
-
30 June 2009
Directors
R. Baskerville
M. Ashton
D. Taylor
R. Bevan
Executives
M. Waller
30 June 2008
Directors
R. Baskerville
M. Ashton
D. Taylor
R. Bevan
Executives
M. Waller
Total
2,364,038
2,450,000
74
EMPIRED LIMITED | 2009 Annual Report
26 KEY MANAGEMENT PERSONNEL (cont’d)
(e) Shareholdings of Directors and Executives
Shares held in Empired Limited
Balance
01-Jul-08
Ord
Pref
Granted as
Remuneration
Pref
Ord
On Exercise
of Options
Pref
Ord
Net Change
Other
Ord
Pref
Balance
30-June-09
Ord
Pref
30 June 2009
Directors
Mr. R Baskerville
Mr. M Ashton
Mr. D Taylor
Mr. R Bevan
5,892,778
150,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,582,411
-
60,000
-
2,642,411
-
-
-
-
-
8,475,189
150,000
60,000
-
8,685,189
-
-
-
-
-
Total
6,042,778
30 June 2008
Directors
Mr. R Baskerville
Mr. M Ashton
Mr. D Taylor
Mr. R Bevan
Total
Balance
01-Jul-07
Ord
Pref
Granted as
Remuneration
Pref
Ord
On Exercise
of Options
Pref
Ord
Net Change Other
Ord
Pref
Balance
30-June-08
Ord
Pref
4,889,269
-
-
-
4,889,269
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,003,509
150,000
-
-
1,153,509
-
-
-
-
-
5,892,778
150,000
-
-
6,042,778
-
-
-
-
-
All equity transactions with directors and other than those arising from the exercise of remuneration options
have been entered into under terms and conditions no more favourable than those the entity would have
adopted if dealing at arm’s length.
Balance
01-Jul-08
Granted as
Remuneration
On Exercise
of Options
Net Change Other
Balance
30-June-09
Ord
Pref
Ord
Pref
Ord
Pref
Ord
Pref
Ord
Pref
30 June 2009
Specified
Executives
M. Waller
Total
1,618,624
1,618,624
-
-
-
-
-
-
-
-
-
-
136,500
136,500
-
-
1,755,124
1,755,124
-
-
30 June 2008
Balance 01-Jul-07
Granted as
Remuneration
On Exercise
of Options
Net Change Other
Balance 30-June-
08
Ord
Pref
Ord
Pref
Ord
Pref
Ord
Pref
Ord
Pref
Specified
Executives
M. Waller
Total
1,483,811
1,483,811
-
-
-
-
-
-
-
-
-
-
134,813
134,813
-
-
1,618,624
1,618,624
-
-
75
notes to the financial statements
For the Year Ended 30 June 2009
27 DIVIDENDS
A dividend of 0.5c per ordinary share has been declared by the Board. Record date will be the 30th of
September 2009.
CONSOLIDATED
2009
($)
2008
($)
(a) Distributions Paid
2008 final franked dividend of 0.50 cents, paid 8 October 2008
(2007: nil)
231,112
Interim franked dividend of 0.25 cents, paid 7 April 2009 (2008: nil)
115,556
346,668
-
-
-
(b) Dividends Proposed
Proposed final 2009 fully franked ordinary dividend of 0.5 cents,
payment date 14 October 2009
(2008: 0.50 cents)
231,112
231,112
(c) Franking Credit Balance
Balance of franking account at year end at 30% available to the
shareholders of Empired Limited for subsequent financial years
108,300
175,346
28 SEGMENT INFORMATION
a) Primary segment – Business
The consolidated entity’s operations are predominantly in consulting services in the information technology
industry.
b) Secondary segment – Geographical
The consolidated entity operates predominantly within Australia
76
EMPIRED LIMITED | 2009 Annual Report
director’s declaration
In accordance with a resolution of the directors of Empired Limited, I state that:
In the opinion of the directors:
a)
the financial statements and notes of the company and of the consolidated entity are in accordance with
the Corporations Act 2001, including:
(i)
giving a true and fair view of the company’s and consolidated entity’s financial position as at 30
June 2009 and of their performance for the year ended on that date; and
(i)
complying with Accounting Standards and Corporations Regulations 2001; and
(b)
there are reasonable grounds to believe that the company will be able to pay its debts as and when they
become due and payable.
This declaration is made after receiving the declarations required to be made by the directors in accordance with
section 295A of the Corporations Act 2001 for the financial year ended 30 June 2009.
On behalf of the Board
Russell Baskerville
Managing Director
30th of September 2009
77
10 Kings Park Road
West Perth WA 6005
PO BOX 570
West Perth WA 6872
T +61 8 9480 2000
F +61 8 9322 7787
E admin@gtwa.com.au
W www.grantthornton.com.au
Grant Thornton Audit Pty Ltd ACN 130 913 594, a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389.
Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member
firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services
independently in Australia.
Liability limited by a scheme approved under Professional Standards Legislation. 82
10 Kings Park Road
West Perth WA 6005
PO BOX 570
West Perth WA 6872
T +61 8 9480 2000
F +61 8 9322 7787
E admin@gtwa.com.au
W www.grantthornton.com.au
Grant Thornton (WA) Partnership ABN 17 735 344 518, a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389.
Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member
firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services
independently in Australia.
Liability limited by a scheme approved under Professional Standards Legislation. 83
Grant Thornton (WA) Partnership ABN 17 735 344 518, a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389.
Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member
firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services
independently in Australia.
Liability limited by a scheme approved under Professional Standards Legislation. 84
EMPIRED LIMITED | 2009 Annual Report
shareholding analyis
In accordance with Listing Rule 4.10 of the Australia Stock Exchange Limited, the Directors provide the following
shareholding information which was applicable as at 30th June 2009.
a. Distribution of Shareholding
SIZE OF SHAREHOLDING
NUMBER OF SHAREHOLDERS
%
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10001 - 100,000
100,001 - MAX
Total
3
15
51
188
75
332
0.01
0.11
0.86
14.25
84.77
100.00
b. Substantial Shareholders
The following are registered by the Company as substantial shareholders, having declared a relevant interest in the
number of voting shares shown adjacent as at the date of giving the notice.
SHAREHOLDER
Mr Russell Baskerville
Mr Gregory Leach
c. Twenty Largest Shareholders
The names of the twenty largest shareholders are:
NUMBER
6,993,639
3,504,225
%
15.13
7.58
NAME
NUMBER OF SHARES HELD
%
Baskerville Investments Pty Ltd
Mr Gregory Leach
Mr John Alexander Bardwell
Mr David Cawthorn
Uniplex Constructions Pty Ltd
Ms Kym Garreffa
Mr Fraser Campbell
Mr John Alexander Bardwell & Mrs Paola Bardwell
Jameker Pty Ltd
Cornela Pty Ltd
Mr Gregory Bandy
Mr Mark Waller
Two Tops Pty Ltd
Mr Mark Waller
Mr Kevin Flynn
GRD Limited
Locope Pty Ltd
Trovex Pty Ltd
Mr Anthony James Farrell
Mr Glenn Thomas Baskerville
Total
6,993,639
3,504,225
2,002,500
2,000,000
1,902,414
1,306,167
1,200,000
1,000,000
900,000
847,333
800,000
781,644
779,490
666,667
650,000
650,000
635,000
635,000
603,019
550,759
15.13
7.58
4.33
4.33
4.12
2.83
2.60
2.16
1.95
1.83
1.73
1.69
1.69
1.44
1.41
1.41
1.37
1.37
1.30
1.19
28,407,357
61.46
The twenty members holding the largest number of shares together held a total of 61.46% of issued capital.
81
shareholding analyis
d. Issued Capital
(i) Ordinary Shares
The fully paid issued capital of the company consisted of 46,222,314 shares held by 332 shareholders.
Each share entitles the holder to one vote.
(ii) Unquoted Equity
The options issued under the company share options plans consisted of 9,703,474 options held by 77 holders.
e. On-Market Buy-Back
There is no current on-market buy-back.
f. Company Secretary
The Company Secretaries is Mr Mark Waller.
g. Registered Office
The registered office of Empired Ltd is
469 Murray Street, Perth WA 6000
h. Other Offices
The other offices are:
Level 13, Septimus Roe Square
256 Adelaide Terrace
Perth WA 6000
Telephone + 61 8 9223 1234
Level 3
470 Collins Street
Melbourne VIC 300
Telephone +61 3 8610 0700
82
other information for shareholders
EMPIRED LIMITED | 2009 Annual Report
In accordance with Listing Rule 4.10 of the Australian
Stock Exchange Limited, the Directors provide the
following information not elsewhere disclosed in this
report.
SHAREHOLDER COMMUNICATIONS
The Board of Directors aims to ensure that
shareholders are informed of all major developments
affecting the Company’s state of affairs. Information is
communicated to shareholders
as follows:
– The annual report is distributed to shareholders
who elect to receive the document. A copy of the full
annual report is available free of charge, upon request,
from the Company. The Board ensures that the
annual report includes relevant information about the
operation of the Company during the year, changes in
the state of affairs of the Company and details of future
developments, in addition to the other disclosures
required by the Corporations Act;
– The half-year report contains summarised financial
information and a review of the operations of the
Company during the period. The half-year financial
report is prepared in accordance with the requirements
of Accounting Standards and the Corporations Act, and
is lodged with the Australian Securities and Investments
Commission and the Australian Stock Exchange; and
– The Company’s internet website at www.empired.com
is regularly updated and provides details of recent
material announcements by the Company to the stock
exchange, annual reports and general information on
the Company and its business. The Board encourages
full participation of shareholders at the Annual General
Meeting to ensure a high level of accountability and
identification with the Company’s strategy and goals.
Important issues are presented to the shareholders as
single resolutions.
INTERNET ACCESS TO INFORMATION
Empired maintains a comprehensive Investor Relations
section on its website at
www.empired.com/index.php?page=corpgovernance
You can also access comprehensive information about
security holdings at the Computershare Investor Centre
at www.au.computershare.com/investor/
By registering with Computershare’s free Investor
Centre service you can enjoy direct access to a range of
functions to manage your personal investment details.
You can create and manage your own portfolio of
investments, check your security holding details, display
the current value of your holdings and amend your
details online.
Changes to your shareholder details, such as a change
of name or address, or notification of your tax file
number or direct credit of dividend advice can be made
by printing out the forms you need, filling them in
and sending the changes back to the Computershare
Investor Centre.
SHARE REGISTRY ENQUIRIES
Shareholders who wish to approach the Company on
any matter related to their shareholding should contact
the Computershare Investor Centre in Melbourne:
The Registrar
Computershare Investor Services Pty Ltd
Level 2, 45 St Georges Tce
Perth WA 6000
Telephone +61 8 9323 2000
Facsimile +61 8 9323 2033
Website www.au.computershare.com/investor
ANNUAL GENERAL MEETING
The 2009 Annual General Meeting of Empired Limited
will be held in the:
The Melbourne Hotel
942 Hay Street, Perth WA 6000
at 10:00am on Wednesday, 23 November 2009.
Formal notice of the meeting will be circulated to
shareholders separate to this report.
STOCK EXCHANGE LISTING
Empired Limited shares are listed on the Australian
Stock Exchange (ASX:EPD). The home exchange is
Perth.
All shares are recorded on the principal share register
of Empired Limited, held by Computershare Investor
Services Pty Limited at the following street address:
Computershare Investor Services Pty Ltd
Level 2, 45 St Georges Tce
Perth WA 60
83
EMPIRED Ltd.
ABN 81 090 503 843
I
E
M
P
R
E
D
L
T
D
A
n
n
u
a
l
R
e
p
o
r
t
2
0
0
9
www.empired.com
ANNUALREPORT
2009