Fairfax Media Limited
Annual Report 2012

R e p o R t 2 0 1 2
A n n u A l

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Today, information and content is in demand 24/7. 
People want what they want, when they want it  
– and its transforming the media business.
Fairfax Media meets that demand like no-one else. Our 
audience reach across digital, print and radio – and our 
commitment to quality – makes us second to none.

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FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

1

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ChAiRmAn’s 
RepoRt

It has been an interesting and 
challenging year for your company. 
I am pleased to report that we have 
made very good progress with our 
strategic initiatives to reduce our cost 
base significantly and to transform 
our business to take advantage of the 
digital developments that allow us to 
compete more and more effectively 
in real time and multiple media. 

In June we announced the acceleration of our Fairfax of the Future program and further major changes to the company 
and the way we do business. Your Board and management recognise our company’s very considerable strengths in 
areas like our journalism and digital businesses – but also acknowledge the changes sweeping through the media 
sector around the world which require continuing flexibility and adaptability.

We are determining our company’s future by making important decisions that will see us focusing on the areas of the 
business that have good potential for long-term results for shareholders. 

I would like to recognise the hard work and enormous skill of the people in your company. Our metro business made 
EBITDA of $102.5 million even in some of the worst advertising markets in a very long time along with worldwide 
structural changes in the newspaper industry.

Our regional media business is showing great resilience in its financial performance through the economic cycle. 

At the same time we have grown a digital-only business across news, classifieds and transactions that this year 
generated a quarter of a billion dollars of revenue for the first time, and is growing strongly. 

Our radio business has new management that is vigorously engaged in growing the business. 

Our balanced portfolio of businesses and our strategy aims to ensure that Fairfax Media remains one of the leading 
media voices in our markets and has a long and strong future. 

I would like to take you through some of the big changes we are making.

• 

 The Sydney Morning Herald and The Age will be moving to the much more user-friendly compact format in the 
new year. This format is the same as The Australian Financial Review. While the size is changing, there will be no 
change to our commitment to high-quality independent journalism. Many of you will know that a number of quality 
mastheads around the world have already moved to a compact format – The Times, The Independent and the 
Boston Herald to name a few.

•  This new format is facilitating another of our major changes: the closing of our Chullora and Tullamarine print plants 
by the middle of 2014. This move alone will see us make cost savings of $44 million annually because we will be 
more efficiently utilising our network of smaller, more flexible modern plants. 

•  We are also making changes in our metro newsrooms to meet the changing needs of readers and advertisers. 
These changes achieve more nimble multimedia newsrooms with integration across print, digital and mobile 
platforms and better utilisation of our skills across our mastheads here and in New Zealand. 

•  Fairfax Media has one of the largest digital news audiences in Australia. We are increasingly able to monetise 

that strength. From the first quarter of 2013 we are introducing digital subscriptions to our Metro mastheads. We 
are doing this very thoughtfully and will be introducing a “metered” model with a base level of free access. The 
Australian Financial Review last year introduced its acclaimed iPad app which won the PANPA national app of the 
year award for 2012.

Unfortunately cost saving imperatives meant we needed to announce redundancies. Including those already announced 
in Fairfax of the Future and the changes outlined here, 1900 people will be leaving the company over the next three 
years. Every job matters and your Board and management wish these redundancies were avoidable. They are not.

2

$2,732.4m REvEnUE FRoM 

oPERATIonS 

$2,310.9m
Down 6.2%  
from last year

ToTAL 
DIvIDEnDS 

3.0 cENTs 
fULLy fRANkED

UnDERLyIng 
nET PRoFIT 
AFTER TAX
$205.4m
Down 25%  
from last year

STATUToRy  
nET LoSS  
AFTER TAX
$2,732.4m

These changes to the company are allowing us to achieve 
the $170 million in annual savings that we have previously 
announced in two years, not three. With the introduction of 
additional cost saving initiatives that we have now identified, 
the target for cost savings has been revised up. We will achieve 
annual cost savings of $235 million by June 2015. 

So we are working smarter and making sure the cost base of 
the business better suits the global media environment, an 
environment that is requiring all media companies, including 
Fairfax Media, to review the value of their assets. 

At our annual results in August we announced our decision to 
write-down the carrying value of our mastheads by more than 
$2 billion. This is a non-cash decision and does not affect the 
company on a day-to-day basis. 

Your Board has a statutory obligation to assess the carrying value 
of our intangible assets – mastheads, goodwill and customer 
relationships – based on the three-year outlook for each of our 
businesses. We, like the rest of the world, saw the three-year 
outlook worsen considerably over the course of the second half of 
the year as the cyclical downturn became more pronounced, and 
our confidence in a sustained improvement in market conditions 
in the near future reduced. I have no doubt we have made the 
right decision at the right time.

Your company is focused on the future and we are clear about 
what we have to do. We are making significant progress, 
achieving changes in the midst of unparalleled structural change 
and a prolonged cyclical downturn.

While we are focused on ensuring the stability and ongoing 
profitability of our print business, we know that our digital 
businesses are going to become increasingly more significant 
in terms of the overall revenue mix.

Our news websites, digital transaction websites and apps are 
amongst the most successful in Australia and while the pace of 
change is breath-taking for many, we are at the front of the pack 
and the take-up amongst our more than nine million and growing 
audiences (according to Roy Morgan research) is very gratifying. 
As ways of digital interaction increase – so do our opportunities to 
derive value for our shareholders. We believe we have very good 
reason to be confident about this fast growing part of our business.

In closing, I would like to acknowledge the significant contribution 
of my fellow Board members. Each and every one of them has 
skills and experience that have been of immense benefit to the 
company in this challenging environment.

First I would like to acknowledge the very important contribution 
made by Bob Savage who retired from the Board at the end 
of June this year. Bob’s deep skills in the IT industry, retail and 
the finance industry were much appreciated during his time 
on the Board.

At the 2012 Annual General Meeting we will have four serving 
Directors standing for election or re-election. These are Michael 
Anderson, Sam Morgan, James Millar and Jack Cowin. Michael 
Anderson is a recognised leader in radio. Sam Morgan is a highly 
successful digital entrepreneur and the founder of TradeMe and 
has provided enormous insight into our digital thinking. Jack 
Cowin was appointed to the Board in July. Jack is well known as a 
successful media investor and entrepreneur and we value his years 
of media experience. James Millar, also appointed to the Board in 
July, brings expert financial and business restructuring skills to the 
Board as well as local and international management experience.

The Board also benefits from the contribution of our chief 
executive Greg Hywood, one of the most experienced media 
executives in the country having had commercial and editorial 
experience over a number of decades. These skills, in 
combination with the skills of our other Directors, we believe 
make up a Board very well suited to address the opportunities 
ahead and deliver long-term stakeholder value.

The entire Board is committed to ensuring Fairfax Media is run 
in the best interests of all shareholders. We have a strategy. 
We are implementing it.

Roger Corbett, AO 
Chairman

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

3

 
ChieF eXeCutiVe 
oFFiCeR’s RepoRt

Fairfax Media is being 
restructured to ensure its 
strong future in a massively 
changed media environment. 
While we have some way to go, 
we are getting runs on the board. 

We are fixing our cost base. We are audience focused. We are taking the necessary steps to be a dominant force 
in what we expect will be a predominantly digital future.

We are making changes as we trade through this prolonged downturn. I have been in this industry since the 1970s and 
I have never seen an advertising environment of the type that we experienced during this year. I also know that cycles 
come and go, and inevitably this will pass and our balanced portfolio, cost disciplines and commercial creativity will 
position us well for the future.

I would like to take this opportunity to thank each and every Fairfax employee for their commitment and hard work 
through this period. 

Despite challenging business conditions, in the 2012 financial year Fairfax generated operating EBITDA of $506 million. 
We have strong cash flows (cash flow from trading activities was $535 million) and we have a strong balance sheet.

We all want to see a marked improvement and we are committed to delivering it. 

We remain committed to print for as long as it remains profitable. We are committed to delivering our journalism in the 
manner our audiences demand. That means we will deliver our content across a variety of platforms. 

Part of getting the mix right is fine-tuning our print circulation and distribution. Our clients, our advertisers, are moving with us.

Our mastheads are going to remain in print for the foreseeable future thanks to a range of initiatives. Our regional 
businesses are particularly resilient, with printed papers spread over 200 mastheads Australia-wide remaining at the heart 
of their local communities, supplemented by a range of new and exciting digital initiatives.

Our Fairfax of the Future project involves centralising group functions, variabilising costs, outsourcing where 
appropriate, as well as better aligning costs with revenue generating areas. 

These changes include:

• 

• 

• 

• 

• 

rationalising production and print functions across Australia and New Zealand, including the closure of Tullamarine 
and Chullora print sites;

restructuring support services including IT and finance;

removing ineffective circulation channels from The Sydney Morning Herald and The Age that offer no value 
to advertisers whilst maintaining readership market share;

improving yield on The Sydney Morning Herald and The Age subscriptions; and

reducing variable printing costs through production changes.

In essence, changes we are making will:

• 

• 

• 

• 

focus on continued decisive leadership in the development and monetisation of online news platforms;

further grow audiences – already having one of the largest news audiences in Australia;

ensure rigorous cost discipline; and

provide for the development of innovative and profitable products – across print and online – with a focus 
on accelerating our online business which is seeing strong revenue growth.

Growth and innovation are what’s driving change at Fairfax. 

Some people are not clear as to how our metropolitan print business is performing in the face of structural change. The financial 
information shows that this is a profitable business, and we’re committed to maximising that profit for many years to come.

4

UnDERLyIng 
EbITDA 

$506m
Down 16.7%  
from last year

CASh FLow 
FRoM TRADIng 

nET DEbT 
REDUCED by 

UnDERLyIng 
EPS 

$535m
Down 15.2%  
from last year

$574m
from last year  
(after sPs)

8.7 cENTs
Down 25%  
from last year

The advantage The Sydney Morning Herald and The Age have is 
that unlike most of their counterparts they have translated a healthy 
print audience into a far larger and even healthier digital audience.

Fairfax has not ignored the shift to digital. We had the foresight 
to invest in the growth of digital transaction businesses and lay 
a solid foundation for a profitable media model. 

We have the audiences that advertisers want to reach. We are 
one of the key voices in our markets, with significant print, online 
and radio assets in Australia and community market segments – 
along with several leading digital transactions businesses. 

Marketplaces businesses – including RSVP, Domain, Stayz and 
Tenderlink – reach more than 4.5 million consumers each month, 
producing more than 1.1 million transactions. They’re helped 
enormously by their relationship with our digital news mastheads, 
creating and reinforcing awareness with our mass audiences and 
driving traffic.

Fairfax’s greatest strength is its large-scale audience reach, which 
in turn underpins our ability to foster and extend transactional 
relationships in profitable ways. Fairfax assets attract a 
high-quality audience of more than nine million every week 
(according to Roy Morgan research). Of those, 6.8 million people 
a month are accessing our content through digital platforms. That’s 
no surprise when you consider that 90 per cent of the population 
now accesses the internet at least once a month. Some 66 per cent 
of all The Sydney Morning Herald and The Age readers now access 
the mastheads through digital means – online, tablet or smartphone.

As we look to the future, our goal is to deliver a market-leading 
integrated multi-platform business with growing new revenue 
streams that are well leveraged to any cyclical upturn. The changes 
we are making will unlock real shareholder value that’s embedded 
in our business and leverage the ingenuity of our people.

Fairfax has successfully grown a digital-only business across 
news, classifieds and transactions that in 2012 generated a 
quarter of a billion dollars of revenue for the first time and is 
growing strongly. These results give us confidence in the strategy 
we have developed for the future. We anticipate that our Metro 
digital revenues will be further enhanced by the introduction of 
digital subscriptions and continued advertising growth.

Fairfax is focused on our independent news, information and 
services being available across all platforms. Our strategy 
provides new, highly engaging ways for advertisers to reach 
our large-scale audiences. 

Fairfax is the biggest publisher of news apps for tablets and 
smartphones, with more than 5 million downloaded apps in 
the market – across all categories including news, lifestyle and 
classified brands. The iPad apps for The Sydney Morning Herald 
and The Age have had more than 800,000 downloads so far, 
with more than 88,000 highly-engaged readers accessing the 
app on an average day. 

Why are our digital businesses growing? They are growing 
because Fairfax has built one of the largest and most engaged 
audience of any news business in Australia. We are actively 
building our revenue by accessing this digital audience – around 
the clock, which is our “Follow the Sun” audience engagement 
model. We are making solid progress on understanding our 
audiences and strengthening our relationship with them, as well 
as creating ties to new audiences.

This model isn’t just changing the way we sell or build 
products, it is changing the way we do journalism. Fairfax 
recently conducted a major review focused on the future of 
our Metropolitan newsrooms – and we’re adopting a new way of 
working so that we can deliver our quality independent journalism 
to growing audiences across all platforms.

The new “digital first” approach we’re introducing supports the 
delivery of journalism to our multi-platforms. It revolves around 
our audiences and it will help ensure the delivery of quality, 
independent journalism – day or night – however and wherever 
our audiences want to consume it. The model will enable our 
staff to work smart; it introduces more flexibility; more sharing; 
and more transparency around editorial processes. It will also 
encourage greater creativity and collaboration. Editorial quality 
remains paramount.

While we still have a lot of work to do, Fairfax is more progressed 
than any other media company in Australia – and most others 
in the world – in terms of transitioning into a truly modern 
world-leading, multi-platform media business.

In closing, none of us underestimates the enormity of the changes 
we are making. Fairfax has a strategy and is delivering on it to 
ensure we remain a leading independent media company.

Gregory Hywood 
Chief Executive Officer and Managing Director

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

5

 
 
sustAinAbility And 
CoRpoRAte soCiAl 
Responsibility 
RepoRt

Fairfax, together with media companies 
around the world, faces enormous 
change. There is also ongoing public 
debate about media regulation and the 
importance of independent, balanced 
and accountable journalism – part of 
the bedrock of democratic society.

Just before the end of last financial year, Fairfax announced changes to its business designed to support a sustainable 
cost base and to move along the journey from print to digital publishing. It is making the changes needed to secure its 
financial sustainability. 

Fairfax’s digital audiences are growing strongly. They are growing well beyond our expectations. In its 181 year history, 
Fairfax’s audience reach has never been greater. Our newspapers’ websites and tablet applications are winning 
awards and proving to audiences that Fairfax is committed to independent journalism, distributed through innovative, 
entertaining and engaging channels. Our radio, regional, agricultural and community businesses are continuing to 
grow and form deep connections with their local communities.

Printed newspapers and magazines remain important platforms within our mix of media assets and will continue to be 
as long as they enjoy reader and advertising support. Indeed, print circulation in regional and community areas is strong. 
However, for certain parts of the business, particularly the metro newspapers, Fairfax needs to increase efficiencies and 
cut costs in line with structural challenges to revenue. We can, and will, do this while maintaining Fairfax’s high quality 
independent journalism.

We are on a three year journey towards re-shaping the business to adapt to these challenges. 

Fairfax’s long term financial sustainability cannot be separated from its corporate social responsibilities. Our 
stakeholders have an expectation that we will continue to operate the business in a way that consolidates and 
builds on our important intangible assets. 

Fairfax has commenced a process of stakeholder engagement to help determine what matters most to them in terms 
of our sustainability performance and corporate social responsibilities. This process has included engagement with our 
people, our shareholders, financial analysts and our audiences. The feedback we have received has helped to formulate 
the content in this report. We will aim to continue to improve our stakeholder engagement over the next reporting year.

In last year’s sustainability report, Fairfax identified four areas of focus for Fairfax’s corporate social responsibilities 
and we are pleased to report below on our performance in each of these categories: 

•  editorial integrity
•  environment
•  our people and culture
•  community

6

Editorial intEgrity
Fairfax is proud of its quality independent 
journalism. We will continue to maintain 
our uncompromising approach to media 
ethics and integrity.

We believe that freedom of speech and a robust and independent media are fundamentally important to a strong democracy. The media 
should be able to act without fear or favour in carrying out its duty to inform the public and to hold Governments, business and individuals 
to account. Media is often referred to as the “fourth estate” of democracy – the others being Government, the public service and the 
judiciary. We take this role seriously and believe it serves our commercial interests, as well as serving a public good. 

Fairfax’s longstanding commitment to independent public interest journalism is evident in its award-winning content, produced 24 hours 
a day, seven days a week, across multiple platforms, including newspapers, magazines, websites, social media, mobile and tablet apps 
and radio.

Editorial CulturE, SyStEmS & ProCESSES 
In the past year, there has been a lot of public debate about media ethics and regulation in Australia and elsewhere. In Australia, 
this included the Independent Inquiry into Media and Media Regulation. Overseas, we have witnessed similar government inquiries. 

The integrity of our journalists is more than a moral or regulatory issue. The goodwill in our brands make up some of our biggest assets. 
It is fundamentally important to us that we get the story right and for the public to trust that our journalists are conducting themselves in 
accordance with proper ethical and legal standards. We have a strong commercial imperative, as well as a public duty, to have a culture, 
systems and processes which uphold these standards. 

As part of Fairfax’s submission to the Media Inquiry (available at www.dbcde.gov.au) we included a description of our editorial processes 
and systems. This demonstrates the checks and balances incorporated into our editorial day to day work practices which support 
Fairfax’s commitment to balanced, independent and accurate journalism. We will continue to review our performance in this area. 

Editorial integrity is firmly embedded within Fairfax’s workplace culture. As a daily reminder on The Sydney Morning Herald editorial floor, 
an excerpt from The Sydney Morning Herald’s creed from 1831 is displayed (pictured above). It states:

“Our editorial management shall be conducted upon principles of candour, honesty 
and honour. We have no wish to mislead; no interests to gratify by unsparing abuse, 
or indiscriminate approbation.”

In addition to its regulatory obligations, Fairfax has adopted a range of voluntary codes and ethics standards. Every journalist within the 
group is expected to uphold these standards and is held to account if compliance is not demonstrated. The Fairfax Code of Conduct 
applies to every person within the Fairfax group – journalists and non journalists. 

rEadErS’ Editor & Community EngagEmEnt 
In 2011 Fairfax created its first Readers’ Editor for The Sydney Morning Herald and The Sun Herald. The role of the Readers’ Editor is 
to champion readers’ interests and editorial accountability and engage with a critical stakeholder group - our audiences. In the past year, 
the Readers’ Editor published more than 30 columns, each originating from readers’ ideas, complaints or concerns. The Readers’ Editor 
has also responded to hundreds of emails, phone calls, tweets and letters, totalling over 10,000 separate communications. This is a key 
indicator on audience engagement and importantly, the feedback helps us to meet audience expectations on editorial content, standards 
and ethics.

Shortly, the Sydney Morning Herald Readers’ Editor role will be merged with a range of other community focused responsibilities and will 
be re-named the Community Editor. This recognises the very important nexus between community issues, audience engagement and our 
editorial agenda. 

Fairfax plays a vital part in bringing together community representatives and the general public to discuss important and topical matters and 
in doing so, makes an important contribution to the political debate. 

In July 2012, in response to concerns about increasing violence in 
Sydney’s suburb of Kings Cross and the death of a teenage boy, Fairfax 
Events convened a meeting of political, academic and community 
representatives to discuss the issues. The Herald, Safer Sydney 
Community Forum was organised and took place at a packed Sydney 
Town Hall. A number of political commitments were made towards 
reducing violence in the area and the various stakeholder groups 
agreed to re-convene within 6 months to report back on progress. 

Image caption: Town Hall, Sydney. Panel included from left: Doug Grand, Chief Executive of Kings Cross Licensing, Paul Nicolaou, Chief Executive of the 
NSW AHA, George Souris, NSW Government Minister, Malcolm Turnbull, Federal MP, SMH’s Matthew Moore, Clover Moore, Lord Mayor of Sydney, Mark 
Murdoch, Assistant Commissioner Police, and Dr Don Weatherburn, NSW Bureau Crime Statistics.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

7

 
SuStainability and CorporatE SoCial rESponSibility rEport
cONTiNUED

diStinCtivE ContEnt & innovativE dElivEry
We continue to connect with our audiences through innovative content delivery and at the same time 
illuminating important community, economic, environmental and social issues. We see this as a key 
community contribution and part of corporate citizenship. 

Some important editorial initiatives this year include Fairfax’s commissioning of the Herald – Lateral 
Economics Wellbeing Index. The initiative adjusts GDP to take into account the changes in value of the 
nation’s stock of physical, environmental and human capital. It also adjusts for changes in health, inequality 
and job satisfaction to provide a better measure of national wellbeing than traditional economic measures. 
Historically, numerous indices and other tools have measured economic and financial performance. The 
Wellbeing Index represents an important step towards measuring the value of the less tangible elements 
underpinning healthy societies, economies and communities. 

Another example is the WikiCurve, launched in May 2012. Developed in partnership with Futureye, the 
WikiCurve explores the community’s views on an issue by looking at how past events impact on current thinking. 
Individuals log their views on the WikiCurve and those collective views are then used to map private and 
public acceptance and thinking of topical and controversial community concerns. Depending on the issue, this 
information can then be used to help inform government policy or shape organisational approach to particular 
issues. The first WikiCurve initiative related to drug law reform. 

Our editorial coverage this year included a series of articles, focusing on important social themes, including 
the Sydney Morning Herald’s Healthy Habits Childhood Obesity series, The Age’s The Drugs Dilemma or the 
Australian Financial Review’s special report on Corporate Philanthropy.

EnvironmEnt
The media has a unique opportunity to influence 
others to take positive action towards reducing 
energy consumption, as well as the ability to 
responsibly manage its own carbon footprint. 

Media companies make an important contribution to environmental sustainability by educating and 
informing the community on environmental issues and debate. Fairfax’s large audiences and diverse 
range of multi-media communication platforms do this effectively. 

Through our network of transactional websites, we encourage consumers to consider environmental 
impacts in their purchasing decisions by providing access to comparative data - for example, Drive’s 
Green Motoring Guide and Trade Me’s Fuel Efficiency Guide. 

Fairfax also uses its business resources and networks to recognise sustainable business activity. 
For example, Fairfax launched the Sustainable 60 Awards in 2009 in New Zealand, together with PwC. 
These awards acknowledge sustainable business excellence in a range of categories and are well 
recognised within the New Zealand business, government and non-profit communities. We support 
a range of similar programs in Australia, for example, the Tomorrow Today program in Newcastle. 

8

EnErgy audit & EmiSSionS targEt
In last year’s sustainability report, we made three commitments towards environmental 
sustainability, each of which was completed in the past year: 

• 

• 

• 

conduct an energy audit across the group; 

set an emissions reduction target for the group; and 

complete the Carbon Disclosure Project (CDP) report. 

The group-wide energy audit allowed us to better understand our energy consumption, set baseline 
emissions and identify energy abatement opportunities.

Fairfax has committed to reducing its carbon emissions between 20-25% by 2020 from 2011 levels. 

REDUCE 
CARbon 
EMISSIonS
20-25%
against 2011 
levels by 2020

We are aiming to achieve this target through office and print facility consolidation, recycling and waste minimisation programs, energy 
reduction through the use of efficient lighting and service equipment and changes to information technology infrastructure and usage.

In a period where energy costs are increasing, these environmental initiatives also reflect Fairfax’s focus on continuous business 
efficiency and opportunities for cost saving. 

In the past year we have improved our sustainability and environmental reporting, including Fairfax’s National Greenhouse & Energy 
Reporting Scheme report, the Carbon Disclosure Project report, internal reporting and this annual Sustainability Report. The increased 
transparency regarding our environmental performance and strategy will assist us to track, measure and improve our performance and 
better inform our stakeholders. 

EnvironmEntal imPaCtS of nEwSPaPEr Printing 
Fairfax recently announced a proposal to close two of its large metropolitan print facilities and consolidate printing more efficiently into 
our other plants. Print products remain an important distribution platform within Fairfax’s mix of media assets and we will continue to 
publish printed newspapers for as long as there is ongoing demand. In this context, we are also mindful of the environmental impacts 
associated with print publishing and will continue our efforts to minimise those impacts. 

Currently, printing comprises over 60% of Fairfax’s total group carbon emissions. The closure of the large and underutilised printing 
plants at Chullora in Sydney and Tullamarine in Melbourne will have significant efficiency advantages and save costs, energy and 
other resources.

Each of our print facilities, and the print industry as a whole, has taken a pro-active approach to waste minimisation, recycling and other 
initiatives that reduce energy and water consumption. Each print facility monitors and sets weekly targets for the reduction of newsprint 
and ink-related waste. We have incentives in place to encourage our people to meet and exceed these targets. In the 2012 reporting 
year, Fairfax’s printing plants reduced printed waste by 12.27% over the previous year. This reduction was a combination of reduced 
print volumes and improved efficiencies in 12 of its 20 print sites. 

We have introduced environmental compliance auditing across our printing operations to ensure all sites comply or exceed 
environmental legislative requirements. Sites are audited to ISO 14001, with the results and follow up reported to the Fairfax Board.

As a group, the print industry invests in educating the public about recycling and newsprint recovery programs. These initiatives are 
funded and supported by the Publishers National Environmental Bureau (PNEB). The PNEB’s achievements in increasing newsprint 
recycling is outstanding. 

• 

2010 newspaper recovery rate of 78% – but expected to achieve close to 80% in 2011*

•  Since 1990, newspaper landfill has been reduced by almost 40%, whereas national landfill volumes  

have increased over the same period. Newspaper landfill now represents 0.65% of total landfill volume. 

* The final PNEB figures for 2011 newsprint recovery rates were not available as at the date of this report. 

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

9

 
SuStainability and CorporatE SoCial rESponSibility rEport
cONTiNUED

pEoplE & CulturE
A diverse, innovative and engaged workforce is 
important in enhancing the quality and creativity 
which underpins our brands and businesses.

Over the past year, Fairfax has launched initiatives to drive performance and engagement. We are an organisation that thrives on 
creative minds and technological innovators. This creates a workplace where people are passionate and proud of the work they do. 

Right now, our industry faces economic challenges that are both structural and cyclical. This has an impact on the company and our 
people. The structural changes affecting the media sector, compounded by difficult domestic trading conditions, led to Fairfax’s February 
announcement that we will be restructuring our business over the next three years. In June we announced that over that period we are 
anticipating a reduction to our workforce of approximately 1900 positions, through a combination of natural attrition and redundancies. 
These changes impact all parts of Fairfax’s business.

Restructuring and redundancies are hard. This applies for those people leaving the business and also for those who stay. But, the 
process is essential to securing Fairfax’s financial sustainability. We are doing all we can to treat people fairly, consult appropriately 
and deliver back-up employee assistance, training and outplacement services. 

EngagEmEnt
Fairfax values the feedback it receives from its people. 

Employee engagement measures the degree to which employees are committed to the company, share its values and feel aligned with 
its strategy. 

Maintaining and improving employee engagement is fundamental to our ability to attract and retain talented people and ultimately deliver 
on our business strategy. We take this process seriously and have increased our resources in the past 12 months to support these 
objectives. There are a range of channels for our people to offer feedback, including annual surveys, pulse surveys, intranet feedback 
portals and annual reviews. Last year, Fairfax conducted its first group-wide engagement survey. The decision to conduct a group-wide 
survey was a first step towards benchmarking engagement and setting clear improvement objectives. These improvement objectives 
are outlined below. 

The survey was launched in two phases: 

Australia – May 2011 – 66% response rate 

New Zealand and USA – November 2011 – 82% response rate. 

SurvEy – aCCountability for ChangE
Following the release of the survey results, we conducted structured results de-briefings and action planning sessions across every 
business unit. Managers prepared action plans for improvement and report regularly about progress to the CEO and the People and 
Culture Committee of the Fairfax Board. 

Improvement targets for overall alignment and engagement scores were included in the short term incentive plans for all managers 
reporting to the CEO. The results of the 2012 survey will determine if these performance targets have been met. Specific questions were 
included in the 2012 engagement survey about sustainability and how Fairfax’s corporate citizenship record impacts people’s choices 
about where they work. 

10

to deliver growth to shareholders
a strong commercial focus  
We will balance everything we do with  

SurvEy – liStEning to our PEoPlE
outstanding products and services
to provide our audiences and customers with 
Fairfax listened to the feedback given in the 2011 survey and has taken the following action in response. 
We need to work together across the company 

toPiC

ConCErn

aCtion takEn

deliver on our commitments
We are highly accountable and  

Group strategic 
direction 

More transparency 
and detail 

Investment in 
People

More training, 
development 
and leadership 
opportunities

quickly to our audiences, customers and each other
•  Senior management forums coordinated across the Group 
We value transparency. We listen and respond 

•  More structured communication from CEO 

•  All managers schedule regular team briefings

constantly challenging the status quo
To achieve this we need to be innovative, 

of our audiences and customers
•  New leadership program introduced 
we make are based on the needs 
The way we work and decisions 

•  More effective training programs offered 

• 

Improved talent management program

•  Review of reward and recognition programs

CULTURE

our customers and audiences
in our dealings with each other, 
We are responsible and honest  
Integrity

or organisation
or favour to any individual 
to operate without fear 
We have the freedom 
Independence

VALUES

• 

Launched a Group-wide mentoring program

Communication 

More consistent 
and regular 
communication 
from management

•  A new intranet launched in 2012 for Metro Media and Corporate teams 

(to be progressively rolled out across the Group) 

•  Business units communicating more frequently through newsletters and updates

• 

Increased engagement about business change (eg metro editorial review 
process consulted with more than 300 journalists)

OUR CULTURE AND VALUES STORY

fairfax mEdia’S CulturE & valuES
In the 2011 engagement survey, we asked targeted questions about what type of 
organisation our people wanted Fairfax to be. These results were used to develop 
and create Fairfax’s first Culture & Values Story. 

Fairfax’s Culture & Values Story is represented in the graphic to the right. It was 
launched to staff by the CEO in June, together with a video message explaining 
its context and importance towards building the future sustainability of Fairfax’s 
business. The Culture & Values Story is not just a set of words on a piece of 
paper. It is about defining the ways in which we do things and finding practical 
ways to uphold our values. 

To support the launch of the Culture & Values Story, Fairfax will be providing 
its people with tools and materials to enhance our workplace culture.

divErSity 
We recognise the value of diversity and workplace inclusion. This goes 
beyond gender issues and includes other differences such as race, 
religion and ethnicity. 

Fairfax recently released its first set of Gender Diversity Guidelines in accordance with its ASX 
corporate governance obligations. We have implemented practical measures to improve the 
representation of females at the senior management level – including training, leadership & 
development courses, mentoring and flexible work arrangements. More information about Fairfax’s 
approach to diversity is included in the Corporate Governance section of this Annual Report. 

Some diversity figures from the past 12 months 

•  12 Management Development courses delivered to 211 senior managers – 38% female participation

•  4 leadership courses delivered to 71 people – 52% female participation

•   In our regional businesses, there were 2,769 training places available for sales, 
editorial, coaching and general management skills – 64% female participation

•   New mentoring program for Metro Media included 59% female mentees 

and 44% female mentors

•  Approximately 12% of Fairfax’s total workforce work part-time

LEADERShIP 
CoURSES 
DELIvERED
71employees
52% female

MEnToRIng 
PRogRAM
59%

female
mentees

44%

female
mentors

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

11

 
SuStainability and CorporatE SoCial rESponSibility rEport
cONTiNUED

hEalth, SafEty & wEll-bEing
The health, safety and well-being of our people is more than a legal and 
moral obligation. It is a core business value. We also know there is a direct 
correlation with the engagement, retention and performance of our people. 

Fairfax offers its people various programs aimed at maintaining a safe and healthy workplace. 

Employees using a Fairfax subsidised gym facility

Free participation in community  
fun runs or swim events

Free flu vaccination

Free access to independent external employee 
assistance and counselling services for all Fairfax 
employees and their immediate families. 

Introduction of an independent external ‘whistleblower’ 
hotline, available to all employees, to report concerns 
about ethics and harassment.  

908

855

1,310

USE oF FAIRFAX 
SUbSIDISED  
gyM FACILITIES
908 
employees  
in Australia

FREE FLU 
vACCInATIon
1,310
employees  
in Australia

In designing its newer workplaces, Fairfax has been mindful of creating workspaces that promote employee well-being, sustainability, 
transparency and access to public transport. In the past year, Fairfax’s Media House office building in Melbourne won a range of 
awards including the Property Council of Australia’s Development of the Year, Best Office Development and Best Workplace Project. 

During the next reporting year, there will be further changes to Fairfax’s workspaces, which will deliver both environmental and 
economic benefits to the business. 

workPlaCE SafEty 
Fairfax’s workplace safety record for the past 12 months 
has improved. We believe this improvement is directly 
linked to business initiatives designed for this purpose. 

We allocated additional resources to the health & safety 
teams over the past year. 

Fairfax’s safety audit team reviews site safety performance 
on a regular cycle, depending on intrinsic risk and past 
performance of sites. In the past financial year, over 90 
separate safety audits have been conducted. 

In addition to these audits, 18 sites received specialist 
in-house safety training with over 400 people attending. 
This training was on top of the formal external training 
that is undertaken at all sites in areas such as first aid, 
fire safety/evacuation and safety committee training.

loSt timE injuriES and loSt 
timE injury frEquEnCy ratE

100

s
I
T
L

f
o

.

o
N

80

60

40

20

0

2008/2009

2009/2010

2010/2011

2011/2012

LTIS

LTIFR

5

4

3

2

1

0

R
F
T
L

I

thE fairfax foundation 
The Fairfax Foundation was established in 1959 by the Fairfax family with a donation of 
£100,000. The Foundation operates separately to the business and exists solely for the benefit of 
current and former Fairfax employees and their dependants to help alleviate hardship or distress. 
In the past financial year, the Foundation has provided financial grants, loans and other benefits 
to the value of $596,637.

FAIRFAX 
FoUnDATIon 
PRovIDED
$596,637
in employee 
assistance this year

12

 
 
Community 
Fairfax is a vital member of the hundreds of communities 
in which it operates. We are committed to being a 
socially responsible organisation that supports and 
engages with those communities. We do this through 
a combination of funding, resources, volunteering, 
sponsorships, editorial coverage and promoting 
charitable activities.

We recognise the shared value in building community connections. The success and prosperity of the communities in which we 
operate has a direct link to the economic sustainability of our business. 

Fairfax enables business units to make autonomous decisions about how they engage and support their respective communities, 
whilst encouraging each unit to find opportunities to leverage their existing expertise and resources. 

indigEnouS jobS auStralia
Fairfax operates the MyCareer jobs website. Integrated with the MyCareer platform is the 
Indigenous Jobs Australia (IJA) jobs board at www.ija.com.au. Fairfax established IJA in 2009 
in partnership with the Australian Indigenous Chamber of Commerce. The IJA site advertises 
dedicated jobs for indigenous Australians at heavily subsidised rates. IJA is engaged within 
indigenous communities, especially in schools and remote areas to promote the jobs board and 
support indigenous Australians in securing employment.

• 

• 

3000+ visitors every week  

350 corporate advertisers 

• 

• 

1500+ returning visitors every week 

750-1000 roles advertised every week

InDIgEnoUS 
jobS AUSTRALIA
1,000
jobs advertised 
per week

litEraCy ProgramS
Fairfax also leverages its editorial and publishing resources to 
support a variety of literacy and education focussed programs. 
We know that improving literacy and education standards provides 
an important key to solving some of Australia’s greatest social and 
community challenges. Of course, we also have a special interest 
in nurturing future readers and writers. 

Fairfax is a corporate sponsor of the Australian Literacy and 
Numeracy Foundation, which is dedicated to lifting literacy and 
numeracy standards in remote and marginalised communities. 
We are the media partner for the NSW Premier’s Reading 
Challenge, a school based reading program, attracting 220,000 
participants last year. We also provide free newspapers and/or 
digital subscriptions to over 250 schools in socio-economically 
disadvantaged areas and conduct a number of school 
writing competitions, designed to improve literacy and written 
communications (there were 2000 participants last year in 
New South Wales). 

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

13

 
 
 
SuStainability and CorporatE SoCial rESponSibility rEport
cONTiNUED

ConnectPink 
ConnectPink, launched by our regional division in June 2012, 
is a website designed to connect women living in rural, regional 
and remote parts of Australia. The site enables its members to 
chat, shop, swap items, share experiences and read stories about 
other inspiring women. In partnership with the McGrath Foundation 
ConnectPink raises money through the site to help provide breast 
care nurses in regional, rural and remote parts of Australia. 

Image caption: Allan Browne (Fairfax Regional CEO and publisher) 
with Glenn McGrath and Governor General Quentin Bryce at the launch 
of ConnectPink on 15 June 2012.

fairfax EvEntS
Fairfax either sponsors or organises several running, cycling and swimming events across 
Australia. These are important public events, bringing people together in a context that 
promotes healthy living, community spirit and philanthropy. 

We have seen an enormous increase in race participants using these events to raise money 
for charities. Fairfax uses its resources to encourage philanthropic associations with each 
of its races and appoints official charity partners and charity ambassadors to the events. 
In the next reporting year, we will continue our efforts to further embed the philanthropic 
connection with each of our sporting events. 

In the past financial year, Fairfax has organised 8 events across Australia:

• 

• 

• 

137,691 race participants

855 Fairfax participants 

$7,856,969 raised for charity

fairfax workPlaCE giving Program  
– ‘morE than wordS’ 
Fairfax’s Australian Metro and Regional businesses participate in a workplace giving program, 
More Than Words, which commenced in 2005. People are able to donate part of their pre-tax salary 
to a range of nominated charities. Through the program $662,000 has been donated since 2005.

FAIRFAX EvEnT 
PARTICIPAnTS 
RAISED
$7.86m

FAIRFAX 
EMPLoyEE RACE 
PARTICIPAnTS
855

woRkPLACE 
gIvIng 
PRogRAM
$662,000
Donated  
since 2005

14

annual 
General 
MeeTinG

The annual general  
meeting will be held at:

10.30am on Wednesday  
24 October 2012 

Park Hyatt 
1 Parliament Square  
Melbourne VIC

FairFax media limited  
aCN 008 663 161

Table of conTenTs

Board of Directors 
Directors' Report 
Remuneration Report 
Corporate Governance 
Management Discussion and Analysis Report 
Annual Financial Report 
Independent Auditor's Report 
Shareholder Information 
Five Year Performance Summary 
Directory 

16
18
23
34
42
45
124
126
127
128

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

15

 
board of direcTors

rOGer COrBett, aO

NON-EXECUTIVE CHAIRMAN,  
APPOINTED TO THE BOARD 4 FEBRUARY 2003
Mr Corbett was elected Chairman of the Board in October 2009. He has been involved in the retail industry for more than 40 years. 
In 1984, Mr Corbett joined the Board of David Jones Australia as Director of Operations. In 1990, he was appointed to the Board of 
Woolworths Limited and to the position of Managing Director of BIG W. In 1999, Mr Corbett was appointed Chief Executive Officer 
of Woolworths Limited. He retired from that position in 2006. Mr Corbett is a Director of the Reserve Bank of Australia, a Director of 
Wal-Mart Stores, Chairman of PrimeAg Australia Limited and Chairman of Mayne Pharma Group Limited. He is also Chairman of the 
Salvation Army Advisory Board (Australian Eastern Territory), a member of the Dean’s Advisory Group of the Faculty of Medicine at the 
University of Sydney and Member of the Advisory Council of the Australian School of Business.

GreGOrY HYWOOd

EXECUTIVE DIRECTOR,  
APPOINTED TO THE BOARD (NON-EXECUTIVE) EFFECTIVE 4 OCTOBER 2010  
APPOINTED AS CEO AND MANAGING DIRECTOR 7 FEBRUARY 2011 
Mr Hywood has enjoyed a long career in the media and government. A Walkley Award winning journalist, he held a number of senior 
management positions at Fairfax including Publisher and Editor-in-Chief of each of The Australian Financial Review, The Sydney 
Morning Herald/Sun-Herald and The Age. He also held the position of Group Publisher Fairfax magazines. He was Executive Director 
Policy and Cabinet in the Victorian Premier’s Department between 2004 and 2006, and from 2006 to 2010 was Chief Executive of 
Tourism Victoria. Mr Hywood is a Director of The Victorian Major Events Company and of Trade Me Group Limited (NZ).

miCHael aNderSON

NON-EXECUTIVE DIRECTOR,  
APPOINTED TO THE BOARD 2 SEPTEMBER 2010
Mr Anderson has had a long career in the radio industry including as Chief Executive of Austereo Limited from 2003 until January 
2010. Prior to becoming Chief Executive he was Chief Operating Officer and from 1997 till early 2003 he was Executive Director of 
Sales and Marketing. He began his career in sales at Austereo in 1990. During his time as Chief Executive he focussed the company 
on building strong station brands and adapting the business to the changing media market including building and maintaining market 
leadership and developing new strategic directions, focussing on target audiences and adapting to increased competition. He launched 
a nationwide digital network and Australia’s first digital radio station. He has been a leader in adapting radio to the digital era.

JaCK COWiN

NON-EXECUTIVE DIRECTOR,  
APPOINTED TO THE BOARD 19 JULY 2012
Mr Cowin is the Founder and Executive Chairman of Competitive Foods Australia Pty Ltd. The company was founded in 1969. 
Competitive Foods owns and operates over 350 fast food restaurants in Australia, it also operates several food manufacturing plants 
for the supermarket and food service industries exporting to 29 countries. Mr Cowin is a Director of Network Ten Holdings Ltd, Director 
of BridgeClimb and Chandler Macleod Group Ltd, and is on the Board of Directors of Sydney Olympic Park Authority.

SaNdra mCPHee

NON-EXECUTIVE DIRECTOR,  
APPOINTED TO THE BOARD 26 FEBRUARY 2010
Ms McPhee is a Director of AGL Energy Limited, Kathmandu Holdings Limited, Westfield Retail Trust and Tourism Australia. Her 
previous directorships include Australia Post, Coles Group Limited and Perpetual Limited. Prior to becoming a Non-Executive Director, 
Ms McPhee held senior executive positions in a range of consumer oriented industries including retail, tourism and aviation, most 
recently with Qantas Airways Limited.

JameS millar, am

NON-EXECUTIVE DIRECTOR,  
APPOINTED TO THE BOARD 1 JULY 2012
Mr Millar is an experienced Corporate Executive, Advisor and Director of a number of companies and organisations including Mirvac 
Ltd, Jetset Travelworld Ltd and Fantastic Holdings Ltd. He is the former Chief Executive Officer and Oceania Area Managing Partner 
of Ernst & Young and was a member of the Ernst & Young Global Board. His career prior to the leadership roles at Ernst & Young 
was as a corporate reconstruction professional. Mr Millar is a director, trustee or member of a number of not-for-profit and charitable 
organisations. He has qualifications in business and accounting and is a Fellow of both the Institute of Chartered Accountants and 
the Australian Institute of Company Directors.

16

Board of directors

Sam mOrGaN

NON-EXECUTIVE DIRECTOR,  
APPOINTED TO THE BOARD 26 FEBRUARY 2010
Mr Morgan is the founder and former CEO of New Zealand’s largest online transaction site Trade Me, which was purchased by Fairfax 
Media in 2006. He is the Chairman of software company Visfleet and a Director of online business Xero. Mr Morgan was previously a 
Director of Sonar6.

liNda NiCHOllS, aO

NON-EXECUTIVE DIRECTOR,  
APPOINTED TO THE BOARD 26 FEBRUARY 2010
Ms Nicholls is a Corporate Advisor and Director of a number of leading Australian companies and organisations. She is Chair of KDR 
(Yarra Trams) and a Director of Sigma Pharmaceutical Group, the Walter and Eliza Hall Institute of Biomedical Science and Low Carbon 
Australia Pty Limited. She is also on the Harvard Business School Alumni Board. She is a former Chair of Australia Post, former Chair of 
Healthscope Limited and former Director of St. George Bank Limited. Prior to becoming a professional Director, Ms Nicholls held senior 
executive positions in the banking and finance industry.

Peter YOUNG, am

NON-EXECUTIVE DIRECTOR,  
APPOINTED TO THE BOARD 16 SEPTEMBER 2005
Over the last 30 years, Mr Young has been an investment banking Executive in Australia, New Zealand and the U.S.A. He is a member 
of the Royal Bank of Scotland’s Advisory Council in Australia. He served as Chairman of Investment Banking for ABN AMRO in Australia 
and New Zealand. From 1998 to 2002, Mr Young was Executive Vice Chairman, ABN AMRO Group (Australia and New Zealand) and 
Head of Telecommunications, Media & Technology Client Management for Asia Pacific. He is currently the Chairman of Ratch-Australia 
Corporation Limited, of Queensland Investment Corporation and of NSW Cultural Management Limited. He is also Non-Executive 
Director of PrimeAg Australia Limited. He is involved in a number of community, environmental and artistic activities.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

17

 
direcTors’ reporT

The Board of Directors presents its report together 
with the financial report of Fairfax Media Limited 
(the Company) and of the consolidated entity, being  
the Company and its controlled entities for the period 
ended 24 June 2012 and the auditor’s report thereon.

direCtOrS

The Directors of the Company at any time during the financial year or up to the date of this report 
are as follows. Directors held office for the entire period unless otherwise stated. 

rOGer COrBett, aO

Non-Executive Chairman

GreGOrY HYWOOd

Chief Executive Officer and Managing Director

NiCHOlaS FairFax

Non-Executive Director

Resigned 29 November 2011

SaNdra mCPHee

Non-Executive Director

Sam mOrGaN

Non-Executive Director

liNda NiCHOllS, aO

Non-Executive Director

rOBert SaVaGe, am

Non-Executive Director

Resigned 30 June 2012

Peter YOUNG, am

Non-Executive Director 

miCHael aNderSON

Non-Executive Director 

JameS millar, am

Non-Executive Director 

Appointed 1 July 2012

JaCK COWiN

Non-Executive Director 

Appointed 19 July 2012

A profile of each Director holding office  
at the date of this report is included on  
pages 16 - 17 of this report.

18

directors’ report

COmPaNY SeCretarY

Gail Hambly, was appointed to the position of Group General 
Counsel and Company Secretary in 1993. Before joining Fairfax 
Media Limited she practised as a solicitor at a major law firm. She 
has expertise in commercial and media and communication law. 
Ms Hambly is a Director of Trade Me Limited, Company B Belvoir 
Limited and Sydney Story Factory. She is a member of the Media 
and Communications Committee and the Privacy Committee for 
the Law Council of Australia, a member of the Advisory Board for 
the Centre of Media and Communications Law at the Melbourne 
Law School and a member of Chartered Secretaries Australia. 
She holds degrees in Law, Economics, Science and Arts.

COrPOrate StrUCtUre

Fairfax Media Limited is a company limited by shares that is 
incorporated and domiciled in Australia.

PriNCiPal aCtiVitieS

The principal activities of the consolidated entity during the course 
of the financial year were the publishing of news, information and 
entertainment, advertising sales in newspaper, magazine and 
digital formats, and radio broadcasting. 

There were no significant changes in the nature of the 
consolidated entity during the year other than the matters set out 
as significant changes in the state of affairs below.

CONSOlidated reSUlt

The loss attributable to the consolidated entity for the financial 
year was $2,732,397,000 (2011 Loss: $390,861,000).

diVideNdS

SiGNiFiCaNt CHaNGeS iN tHe State OF aFFairS

Significant changes in the state of affairs of the consolidated 
entity during the financial year were as follows:

The Company completed the sale of its regional radio assets 
to Grant Broadcasters on 31 October 2011.

On 13 December 2011 the Initial Public Offering (IPO) of Trade 
Me Group Limited, a New Zealand subsidiary, was concluded 
with 34% of the shares held by external parties. A further 15% 
divestment occurred on the 21 June 2012. Trade Me's shares 
are listed on both the New Zealand Exchange and the Australian 
Stock Exchange and the consolidated entity holds a controlling 
interest of 51% at year end.

On 23 December 2011, the Company announced that it had 
entered into an agreement to merge Fairfax Community Network 
Limited in Victoria with MMP Holdings Pty Ltd. Following the 
merger, the Company will hold a 50% interest in MMP Holdings. As 
part of acquiring this interest, the Company is required to contribute 
$35 million in cash to the shareholders of MMP Holdings.

On the 15 June 2012 the consolidated entity repaid the 
€350 million Eurobond notes. 

liKelY deVelOPmeNtS aNd exPeCted reSUltS

The consolidated entity’s prospects and strategic direction are 
provided in the Management Discussion and Analysis Report on 
pages 42 - 44.

Further information about likely developments in the operations 
of the consolidated entity and the expected results of those 
operations in future financial years has not been included in this 
report because disclosure of the information would be likely to 
result in unreasonable prejudice to the consolidated entity.

An interim fully franked dividend of 2 cents per ordinary share 
and debenture was paid on 21 March 2012 in respect of the 
year ended 24 June 2012.

eNVirONmeNtal reGUlatiON aNd PerFOrmaNCe

No material non-compliance with environmental regulation has 
been identified relating to the 2012 financial year.

Since the end of the financial year, the Board has declared a fully 
franked dividend of 1 cent per ordinary share and debenture. 
This dividend is payable on 21 September 2012.

reVieW OF OPeratiONS

Revenue for the Group was lower than the prior year at 
$2,339 million (2011: $2,477 million). After significant expenses 
of $2,937.8 million the Group generated a net loss after tax 
of $2,732.4 million (2011: $390.9 million). Earnings per share 
decreased to a loss of $1.16 (2011: loss 17.0 cents).

Further information is provided in the Management Discussion 
and Analysis Report on pages 42 - 44. 

The Company reported to the Department of Climate Change 
on the total carbon emissions of the Group generated in the 
2011 financial year under the National Greenhouse and Energy 
Reporting legislation. The Group’s main source of carbon 
emissions overall was from electricity consumption at its larger 
sites and total scope 1 and 2 emissions reported was 93,951 
tonnes CO2-e. 

eVeNtS aFter BalaNCe date

Other than those events disclosed in Note 38, there have not 
been any after balance date events.

remUNeratiON rePOrt

A remuneration report is set out on pages 23 - 33 and forms part 
of this Directors’ Report.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

19

 
directors’ report

direCtOrS’ iNtereStS

The relevant interest of each Director in the equity of the Company and related bodies corporate as at the date of this report is: 

ordinary shares

R Corbett
G Hywood
M Anderson
J Cowin
NJ Fairfax
S McPhee
J Millar
S Morgan
L Nicholls
R Savage
P Young
TOTAL

opening
Balance

99,206
–
–
–
3,892,481
4,783
–
181,500
5,401
47,899
131,117
4,362,387

acquisition

disposals

closing 
Balance

post 
year end 
acquisitions

post 
year end 
disposals

–
1,682,834
–
–
– 
35,437
–
1,908,848
34,986
–
–
3,662,105

–
–
–
–
–
–
–
–
–
–
–
–

99,206
1,682,834
–
–
3,892,481
40,220
–
2,090,348
40,387
47,899
131,117
8,024,492

–
–
–
–
–
13,156
–
–
12,875
–
–
26,031

–
–
–
–
–
–
–
–
–
–
–
–

post 
year end 
Balance

99,206
1,682,834
–
–
3,892,481
53,376
–
2,090,348
53,262
47,899
131,117
8,050,523

In the case of retired Directors, the closing balance represents the number of shares at the date the Director retired from the Board.

No Director holds options over shares in the Company. 

direCtOrS’ meetiNGS

The following table shows the number of Board and Committee meetings held during the financial year ended 24 June 2012 and the 
number attended by each Director or Committee member.

Meetings*

Board Meeting

audit and risk

noMinations

people and 
culture#

sustainaBility 
and corporate 
responsiBility

no. 
held

no. 
attended

no. 
held

no. 
attended

no. 
held

no. 
attended

no. 
held

no. 
attended

no. 
held

no. 
attended

16
16
14
9
16
16
16
16
16

15
16
13
9
16
16
14
14
16

5
5
–
2
–
–
5
–
5

4
5
–
2
–
–
5
–
5

1
–
–
1
–
–
–
–
1

1
–
–
1
–
–
–
–
1

5
5
4
–
5
–
–
5
5

4
5
3
–
5
–
–
4
5

3
3
3
2
3
–
–
–
–

2
3
2
2
3
–
–
–
–

R Corbett***
G Hywood**
M Anderson
NJ Fairfax
S McPhee
S Morgan
L Nicholls
R Savage
P Young

*  The number of meetings held refers to the number of meetings held while the Director was a member of the Board or Committee. 
**   Mr Hywood attends the Audit and Risk, People and Culture and Sustainability Committee meetings as an invitee of the Committees.
*** Mr Corbett, Chairman, is an ex officio member of all Board committees.
#  Formerly known as Personnel Policy and Remuneration Committee until 26 October 2011.

20

directors’ report

OPtiONS

There are no unissued shares under option as at the date of this 
report. No options over unissued shares were granted during or 
since the end of the financial year. There were no movements in 
options during the financial year. No shares were issued during 
or since the end of the financial year as a result of the exercise 
of an option.

iNdemNiFiCatiON aNd iNSUraNCe OF OFFiCerS 
aNd aUditOrS

The Directors of the Company and such other officers as the 
Directors determine, are entitled to receive the benefit of an 
indemnity contained in the Constitution of the Company to the 
extent allowed by the Corporations Act 2001, including against 
liabilities incurred by them in their respective capacities in 
successfully defending proceedings against them.

During or since the end of the financial year, the Company has 
paid premiums under contracts insuring the Directors and officers 
of the Company and its controlled entities against liability incurred 
in that capacity to the extent allowed by the Corporations Act 
2001. The terms of the policies prohibit disclosure of the details 
of the liability and the premium paid.

Each Director has entered into a Deed of Access, Disclosure, 
Insurance and Indemnity which provides for indemnity by the 
Company against liability as a Director to the extent allowed 
by the law.

There are no indemnities given or insurance premiums paid 
during or since the end of the financial year for the auditors.

NON-aUdit SerViCeS

Under its Charter of Audit Independence, the Company may 
employ the auditor to provide services additional to statutory 
audit duties where the type of work performed and the fees for 
services do not impact on the actual or perceived independence 
of the auditor.

Details of the amounts paid or payable to the auditor, Ernst & 
Young, for non-audit services provided during the financial year 
are set out below. Details of amounts paid or payable for audit 
services are set out in Note 31 to the financial statements.

The Board of Directors has received advice from the Audit 
and Risk Committee and is satisfied that the provision of the 
non-audit services did not compromise the auditor independence 
requirements of the Corporations Act 2001 because none 
of the services undermine the general principles relating to 
auditor independence as set out in Professional Statement F1, 
including reviewing or auditing the auditor’s own work, acting in 
a management or a decision-making capacity for the Company, 
acting as advocate for the Company or jointly sharing economic 
risk and rewards.

A copy of the auditor’s independence declaration under section 
307C of the Corporations Act 2001 is on page 22 of this report.

During the financial year, Ernst & Young received or were due 
to receive the following amounts for the provision of non-audit 
services:

Subsidiary company and other audits required by contract or 
regulatory or other bodies:

•  Australia $238,692

•  Overseas $213,515

Other assurance and non-assurance services:

•  Australia $377,167

•  Overseas $603,008.

rOUNdiNG

The Company is of a kind referred to in Class Order 98/100, 
issued by the Australian Securities and Investments Commission, 
relating to the “rounding off” of amounts in the Directors’ Report. 
Amounts contained in the Directors’ Report have been rounded 
off in accordance with that Class Order to the nearest thousand 
dollars, or in certain cases, to the nearest dollar.

Signed on behalf of the Directors in accordance with a resolution 
of the Directors.

Roger Corbett, AO 
Chairman 

Greg Hywood 
Chief Executive Officer and Managing Director

23 August 2012

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

21

 
 
audiTor’s independence declaraTion

Auditor’s Independence Declaration to the Directors of Fairfax Media 
Limited 

In relation to our audit of the financial report of Fairfax Media Limited for the financial year ended 24 
June 2012, to the best of my knowledge and belief, there have been no contraventions of the auditor 
independence requirements of the Corporations Act 2001 or any applicable code of professional conduct. 

Ernst & Young 

Douglas Bain 
Partner 
23 August 2012 

Liability limited by a scheme approved 
under Professional Standards Legislation 

22

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
reMuneraTion reporT

Dear Shareholder

On the following pages you will find the detail of the 2012 Fairfax Media Remuneration Report.

As shareholders will be acutely aware this has been a challenging year for Fairfax and for media companies around the world and has 
resulted in reduced underlying profit for the company and a decline in the share price. In these difficult circumstances the Board has 
made 5 key decisions relating to remuneration for directors and management:

1.  There will be no increase in directors fees for 2013. Fees are set within the cap for fees approved by shareholders in 2010;

2. 

3. 

4. 

5. 

 Fixed remuneration for executives earning an annual salary of $150,000 or above have been frozen for 2013 unless the company 
has pre-existing contractual commitments including in Enterprise Bargaining Agreements;

 For the CEO and his direct reports no discretionary Short Term Incentive (“STI”) bonus payments will be made. The CEO and his 
direct reports will receive some STI bonus but only for performance targets relating to the achievement of objectively measured 
cost savings over the 2012 year;

 From the 2013 financial year onwards the Fairfax Long Term Incentive (“LTI”) Plan will operate using performance right allocations 
rather than shares. The main reason to change from shares to rights is to remove the entitlement to the payment of dividends on 
unvested LTI shares allocated to employees under the Plan; and

 From 2013 allocations of LTI rights, the test for vesting of rights will be at three years after the allocation of the rights but there will 
be no fourth year retest if the vesting criteria are not met at the three year test.

The STI targets set by the Board for the CEO and his direct reports for 2012 were heavily weighted toward EBIT, revenue and costs. 
Costs were broken out as a key target because of the importance the Board placed on the restructuring of the business for the ongoing 
financial health of the company. The Board judged these cost targets as critical. It recognised that achievement of the target cost 
savings in isolation was unlikely to result in achievement of target EBIT in 2012 because of the likely impact of one off restructure costs 
necessarily incurred to achieve the longer term savings.

The cost targets were all achieved at the maximum level for the year. The annualised cost savings achieved by June 2012 were $56 
million. Based on this outcome Mr Hywood earned a bonus of $840,000 (35% of his maximum overall STI opportunity). Given the 
difficult trading environment he volunteered that the bonus be cut in half. The Board has accepted this offer. Mr Hywood therefore 
receives an STI bonus of $420,000 for 2012.

The Remuneration Report details the above matters and also sets out our commitments to diversity as well as important material on 
remuneration strategy, structure and outcomes. 

The Board commends the Report to you.

In closing, on behalf of the Board I would like to take the opportunity to thank Robert Savage for his important contribution in chairing  
the People and Culture Committee before he retired from the Board in June this year.

Sandra McPhee 
Chair, People and Culture Committee

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

23

 
reMuneration report

1.  iNtrOdUCtiON

This report forms part of the Company’s 2012 Directors’ Report and describes the Fairfax Group’s remuneration arrangements 
for Directors and prescribed senior executives in accordance with the requirements of the Corporations Act 2001 and Regulations. 
The report also contains details of the equity interests of Fairfax Directors and prescribed senior executives.

2.  remUNeratiON GOVerNaNCe

In 2012 the committee changed its name from the Personnel Policy and Remuneration Committee to the People and Culture Committee 
(“P&CC”). The Board has a formal Charter for the P&CC which prescribes the responsibilities, composition and meeting rules of the 
Committee. Under the Charter, the Committee must be comprised of a majority of Non-Executive Directors who are independent. The 
members of the P&CC are: 

•  Sandra McPhee (member and Chair from 21 May 2012) 

•  Robert Savage (Chairman up to 20 May 2012 and member to 30 June 2012) 

•  Roger Corbett 

•  Michael Anderson

•  Peter Young 

The P&CC met five times during the year. The Committee’s primary responsibilities are to:

(a)  review and approve Fairfax employee remuneration strategies and frameworks

(b) 

(c) 

(d) 

 oversee the development and implementation of employee remuneration programs, performance management and succession 
planning with the goal of attracting, motivating and retaining high quality people

 review and recommend to the Board for approval the goals and objectives relevant to the remuneration of the CEO, assist the 
Board to evaluate the performance of the CEO in light of those goals and objectives, and to recommend to the Board the CEO’s 
remuneration (including incentive payments) based on this evaluation

 review the principles to apply to contractual terms of employment for direct reports to the CEO including base pay, incentives, 
superannuation arrangements, retention arrangements, termination payments, performance goals and performance-based 
evaluation procedures and succession plans

(e) 

 make recommendations to the Board on Directors’ fees and review and recommend the aggregate remuneration of Non-Executive 
Directors to be approved by shareholders

(f) 

 review the Group’s framework for compliance with occupational, health, safety and environmental regulation and its performance 
against the framework, and

(g) 

 review and approve measurable objectives for achieving gender diversity and assess annually both the objectives and progress.

The CEO, Group General Counsel and Company Secretary and General Manager Human Resources attend P&CC meetings 
as invitees except when their own performance or remuneration arrangements are being discussed.

The Committee commissions reports from independent remuneration experts on market relativities and other matters relating to 
remuneration practices to assist it in setting appropriate remuneration levels and processes. No recommendations were received during 
the year by external consultants as defined under the Corporations Act.

3.  diVerSitY

Fairfax is committed to creating a workplace that is fair and inclusive. As part our commitment, during the financial year several 
initiatives were undertaken: 

•  A Diversity policy was launched company wide by the CEO.

•  Additional resources have been allocated including the recruitment of a member of the Organisation Development team who will 

have responsibility for driving diversity initiatives.

•  The proportion of women employed by the company, in senior executive positions and on the Board is tracked by the CEO and 

Board People and Culture Committee and reported in the Quarterly HR report.

• 

Leadership development programs have been reviewed and updated. Courses are now shorter in duration and held at Metropolitan 
locations to enable more women with carer responsibilities to attend.

•  A mentoring program has been established and implemented across the group. Forty four percent of mentors and fifty nine percent of 

mentees are females. 

The Company is compliant with the Equal Opportunity for Women in the Workplace Act 1999. The workforce gender demographics were 
(as at 24 June 2012):

•  Proportion of women on the Board: 25% 

•  Proportion of women in senior management: 26% 

•  Proportion of women across the organisation: 52% 

24

reMuneration report

The following diversity targets and actions have been developed to further drive gender diversity and raise awareness of diversity across 
the company:

• 

30% female participation in senior management by 2015;

•  Conduct further research to gather robust diversity metrics across the business and in individual business units. This will include 
conducting a pay equity audit across Fairfax Media. This information will be used to progress plans to address the identified issues;

•  The recruitment process for all senior management appointments to include a senior female on the interview panel and at least one 

female candidate in the shortlist.

4.  remUNeratiON OF NON-exeCUtiVe direCtOrS

Under the Fairfax Constitution, the aggregate remuneration of Non-Executive Directors is set by resolution of shareholders. 
The aggregate was last reviewed by shareholders at the 2010 Annual General Meeting and set at $2,100,000 per annum. Within 
this limit, the Board annually reviews Directors’ remuneration with advice from the P&CC. The Board also considers survey data 
on Directors’ fees paid by comparable companies, and any independent expert advice commissioned. 

In light of the current performance of the company and present economic climate the Board resolved that there would be no increase in 
Directors’ fees this year nor would the Board seek shareholder approval for an increase in the cap on aggregate Directors’ fees this year. 

At the date of this report, the Board has set Board and committee fees as follows:

Chairman of the Board*
Other Non-Executive Director
Chair of Audit and Risk Committee
Members of Audit and Risk Committee
Chair of People and Culture Committee 
Members of People and Culture Committee 
Chair of the Nominations Committee
Members of Nominations Committee
Chair of the Sustainability and Corporate Responsibility Committee
Members of Sustainability and Corporate Responsibility Committee

$

364,000
130,000
44,000
33,000
33,000
22,000
30,000
20,000
33,000
22,000

* 

 The Chairman of the Board does not receive committee fees for membership of either of the People and Culture Committee or the 
Nominations Committee.

The fees above do not include statutory superannuation payments.

4.1  RetiReMent benefitS fOR nOn-exeCutive DiReCtORS
The Company makes superannuation contributions on behalf of Non-Executive Directors in accordance with statutory requirements. 
Other than superannuation, Non-Executive Directors are not entitled to any retirement benefits.

5.  remUNeratiON OF tHe CHieF exeCUtiVe OFFiCer

Mr Gregory Hywood  
The remuneration details for the CEO are set out in section 6.6 and 6.9 of this report. 

The key terms of Mr Hywood’s remuneration arrangements with the Company includes a Fixed Remuneration of $1.6 million per 
year. This is unchanged from last year. The Fixed Remuneration represents the total fixed cost to Fairfax including base salary, 
superannuation and other benefits. This will remain unchanged for next year. As well as Fixed Remuneration Mr Hywood is eligible for a 
performance bonus and participation in the Long-Term Equity-Based Incentive Scheme (LTI).

Mr Hywood is eligible for a performance bonus of up to 150% of Fixed Remuneration depending on achievement of defined performance 
criteria set at the beginning of each financial year. The performance targets are recommended by the P&CC and approved by the Board 
each year. Fifty five percent of the Performance Bonus is determined by achievement of financial targets for the Group. The remaining 
incentive is based on other Key Performance Indicators (KPI) set by the Board each year depending on the operational and strategic goals 
of the Group. These KPIs may also include specific financial and strategic targets. A component of this incentive was (in the past) deferred 
in to shares (purchased on market by the Executive Share Plan Trust (“Trust”)). Further details of the plan are outlined in section 6.1.

For the 2012 financial year, Mr Hywood will receive a Performance Bonus of $420,000. The elements of his performance plan are 
outlined in the table below. The Board resolved to pay the CEO only those elements relating to cost reduction targets. As part of the 
Fairfax of the Future transformation program a run rate of $56 million of savings were achieved by June 2012. Key actions taken during 
the year included:

•  Rationalisation of production and print functions across Australia and New Zealand

•  Restructure of support services including HR and IT

•  Reduced unprofitable circulation channels for SMH, The Age and selected printed classified products

• 

Improved yield on SMH and The Age subscriptions

•  Reduced variable printing costs through production changes

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

25

 
reMuneration report

Based on this outcome, Mr Hywood was entitled to a bonus of $840,000, or 35% of his maximum incentive opportunity. Given the 
difficult trading environment, Mr Hywood volunteered to forgo 50% of his earned bonus ($420,000) which equates to 17.5% of his 
maximum STI opportunity. The Board accepted Mr Hywood’s offer. The bonus will be paid in cash.

coMponent

Weighting Measures

payMent at
“target”

payMent at
“MaxiMuM” outcoMe

Corporate and  
Operational

75%

Strategic

25%

•  EBIT
•  Cost
•  Revenue
•  Employee engagement & 

safety performance

•  KPIs relating to Transform 

the Metro business

•  KPIs relating to Improve 
Operating Performance 
and Re-shape the 
business

$900,000

$1,800,000 Only payments relating to achieved 

Cost reduction targets were paid. 

$300,000

$600,000 Discretion was exercised to pay no 

bonus on this measure although 
target was achieved. No payment 
made for this measure.

total

100%

$1,200,000

$2,400,000

$420,000

Under the LTI Mr Hywood has been entitled to an allocation of shares (purchased on market by the Trust) to the equivalent of fifty 
percent of his Fixed Remuneration as an allocation of Fairfax shares each year. In the 2012 financial year Mr Hywood was granted 
943,063 shares. These shares vest on the terms set out in section 6.2. Subject to shareholder approval, under section 6.3, Mr Hywood 
will be entitled to an allocation of performance rights from the 2013 financial year onwards.

6.  remUNeratiON OF OtHer SeNiOr exeCUtiVeS

The objectives of the Company’s executive remuneration framework are to align executive remuneration with the achievement of 
strategic objectives, the creation of value for shareholders, and to be in line with the market so as to attract and retain key people. The 
P&CC aims to ensure that the executive remuneration framework addresses the following criteria:

• 

• 

• 

• 

• 

• 

• 

fairly remunerate capable and performing executives

attract, retain and motivate talented, qualified and experienced people in light of competitive employment markets

align remuneration with achievement of business strategy

align interests of executives and shareholders

deliver competitive cost outcomes

comply with regulatory requirements, and

be transparent and fair.

The executive remuneration framework comprises a mix of fixed and performance-based components:

• 

• 

a fixed remuneration package, and

performance incentives.

The Fixed Remuneration component includes cash, superannuation and any benefits employees choose to salary sacrifice, for 
example, motor vehicle and parking. It represents the total fixed cost to the Company including fringe benefits tax payable.

Payment of performance-based incentives is determined by the annual financial performance of the Company, as well as specific 
strategic and operational objectives set at the beginning of the year relevant to the executive. The CEO conducts performance reviews 
with his direct reports each year, and presents the outcomes and proposed incentive payments to the P&CC. The P&CC reviews and 
approves the remuneration packages and bonus payments to the CEO’s direct reports. On the recommendations of the CEO, the P&CC 
also reviews and approves the key performance indicators for the CEO’s direct reports for the following year. Performance evaluations 
in accordance with this framework have taken place for senior executives for the year ended 24 June 2012.

6.1  PeRfORMAnCe-bASeD SHORt-teRM inCentiveS (“bOnuS PAyMentS”) fOR SeniOR exeCutiveS
Annual bonus payments for senior executives place an emphasis on the achievement of annual financial performance criteria for the 
Group as well as specific strategic and operational criteria. For key senior executives other than the CEO, the bonus criteria were set by 
the P&CC. The bonus opportunity consists of three components:

•  Corporate Level – drives corporate financial results (EBIT) and encourages senior management to work together for the overall 

benefit of the group 

•  Business Unit Level – drives business unit financial and other operational metrics to encourage team behaviour (e.g. EBIT, cost 

reductions, audience, market position and revenue) 

•  Strategic Level – indicators of future group, business unit and personal success (delivery against milestones and personal 

development) to drive the delivery of the Corporate strategy. 

26

reMuneration report

Each senior executive has a target bonus opportunity depending on the accountabilities of the role and impact on Company or business 
unit performance. There are two levels of performance:

• 

“on-target” performance – where the target bonus will be earned (e.g. for EBIT the “on-target” performance is typically achievement 
of budget or prior year) or

• 

“maximum” performance – where performance is such that the maximum level of incentive will be earned. 

The bonus arrangement allows for a cash payment and a component deferred into shares (Deferred Component). Any amounts 
earned from the Strategic component and 50% of any amounts earned above “on-target” performance for Corporate and Business Unit 
performance are deferred into shares.

For most executives reporting directly to the CEO, the on-target bonus opportunity is 45% of the executive’s fixed remuneration package 
and the maximum incentive opportunity is 90% of the fixed remuneration package. 

For all senior executives reporting directly to the CEO, 50% of the bonus is based on corporate measures, 25% is based on business 
unit financial and operational performance and 25% is based on other strategic key performance indicators (KPIs).

At the end of the financial year, actual performance is assessed against the measures set at the beginning of the year. The number of 
shares for the Deferred Component for each senior executive depends on their role and responsibilities, and on actual performance. 

Shares purchased for the Deferred Component are valued at face value based on the Volume Weighted Opening Price over the 10 days 
immediately after the financial year’s results are announced to the market in August. Shares are purchased on market by the trustee 
of the Executive Share Plan and allocated to the senior executive. 

The shares for the Deferred Component are required to be held in the Trust for two years and the senior executive receives dividends 
on the shares during this period.

At the end of the two year period, the ownership of the shares is transferred to the senior executive. If the senior executive resigns 
or is terminated with cause prior to the end of the two year period, they forfeit the shares.

The balance of the bonus is paid to the senior executive as cash.

The Deferred Component of the incentive plan was introduced for the 2012 performance year. Prior to this, any bonus payments were 
paid to the executives as cash.

6.2  LOnG teRM equity-bASeD inCentive SCHeMe (Lti) 
Senior executives whose roles and skills are critical to the strategy of the Group are eligible to participate in the Company’s 
equity-based LTI.

The LTI plan which has operated, up to and including, the 2012 financial year commenced operation from the 2008 financial year. It 
aims to reward executives for creating growth in shareholder value. For Allocations up to the 2012 financial year, participants in the LTI 
receive an allocation of Company shares (Allocation). The number of Company shares to which a participant is entitled depends on the 
participant’s role and responsibilities.

Shares for the Allocations were purchased on market by the trustee of the Executive Share Plan. The shares are allocated to the 
employee and held by the trustee in trust until the Allocation vests or is forfeited. Executives receive any dividends paid on the shares 
while they are in the Trust.

For an Allocation to vest, there are two performance hurdles, both linked to the Company’s return to shareholders. The hurdles are 
measured at the end of the three year vesting period. In addition, if an Allocation does not vest at the end of the three year period, 
a re-test of the performance hurdles will occur at the end of the fourth year, and if satisfied, the Allocation will vest. Fifty percent of an 
Allocation will vest on achievement by the Company of the total shareholder return (TSR) target. TSR will be measured against the  
S&P/ASX 300 Consumer Discretionary Index and shares will vest as described in the table below:

tsr perforMance

Under 50th percentile
50th percentile
50th to 75th percentile
Above 75th percentile

% of allocation that vests

Nil
50% of Allocation
Straight line pro rata 
100%

The other 50% of the Allocation will vest on achievement of the earnings per share (EPS) target. EPS will be measured by the 
compound annual growth rate (CAGR) of the Company’s EPS and vesting will be according to the table below:

eps perforMance

Less than 7% CAGR
7% CAGR
7% to 10% CAGR

10% CAGR or above

% of allocation that vests

Nil
25%
Straight line pro rata

100%

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

27

 
reMuneration report

OtHeR teRMS Of tHe Lti
On termination of an executive’s employment, vesting of rights depend on the circumstances of the termination. If an executive resigns, 
unvested allocations will generally be forfeited. Although the Board has discretion to allow vesting, generally the Board will not exercise 
this discretion unless there are special circumstances. On termination for misconduct, allocations will be forfeited. If an executive is 
terminated without cause, for example made redundant or dies or is permanently disabled, then vesting will be at the Board’s discretion. 
In the circumstances of an offer to acquire the Company, the Board has a discretion regarding vesting.

StAtuS AnD key DAteS – unveSteD Lti SCHeMe

grant date

perforMance testing WindoW

expiry date  
(if hurdle not Met)* perforMance status

18 January 2008

1 July 2007 – 30 June 2010

30 June 2011

26 August 2008

1 July 2008 – 30 June 2011

30 June 2012

23 June 2010

1 July 2009 – 30 June 2012

30 June 2013

17 November 2010 1 July 2010 – 30 June 2013
13 September 2011 1 July 2011 – 30 June 2014 

30 June 2014
30 June 2015

Performance hurdles were not achieved.
Shares for this Allocation have been forfeited  
and returned to the Trust.

Performance hurdles were not achieved.
Shares for this Allocation have been forfeited  
and returned to the Trust.
Performance hurdles have not yet been exceeded.
Performance hurdle is now in the retesting period. 
Performance testing window not yet commenced.
Performance testing window not yet commenced.

*  Retest of conditions performed in the fourth year, if performance hurdle is not met in the initial performance testing window. 

The financial performance of the Company in key shareholder value measures over the past five years is shown below: 

Underlying operating revenue
Net profit before significant items
Earnings per share before significant items
Dividends per share
*Total Shareholder Returns (TSR)

$m 
$m 
Cents 
Cents 
% 

ifrs
2012

2,328
212.0
8.7
3.0
(40.5)

ifrs
2011

2,466
285.0
11.6
3.0
(23.9)

ifrs
2010

2,482
290.7
11.8
2.5
11.3

ifrs
2009

2,600
241.3
12.4
2.0
(52.1)

ifrs
2008

2,909
395.9
23.4
20.0
(34.7)

*  TSR comprises share price appreciation and dividends, gross of franking credits, reinvested in the shares. 
Source: Bloomberg.

6.3  PeRfORMAnCe RiGHtS PLAn (PRP)
Following a review of the instrument used in the Long-Term Equity-Based Incentive Scheme with the advice of PwC, the Board decided 
that future allocations will be in the form of performance rights. The terms and conditions of the scheme are the same as outlined in 6.2 
including performance hurdles and termination conditions. However instead of allocating shares purchased on market, allocations are in 
the form of performance rights. These rights allow that the executives acquire shares at a future point in time subject to achievement of the 
vesting criteria. No dividends will be payable over the vesting period. The vesting period will remain at three years. There will no longer be a 
fourth year re-test of the performance hurdles. If the performance rights vest the Executive will acquire them for nil consideration.

6.4  RetiReMent benefitS fOR exeCutiveS
Except for a very small number of long serving executives who are members of a defined-benefit superannuation plan, retirement benefits 
are delivered through contribution accumulation superannuation plans. The defined-benefit funds (which are closed to new entrants) 
provide defined lump sum benefits based on years of service, retirement age and the executive’s remuneration at the time of retirement.

6.5  exeCutive SeRviCe AGReeMentS 
The terms of employment of the CEO are set out in section 5 and below.

The remuneration and other terms of employment for the key management personnel are set out in written agreements. These 
service agreements are unlimited in term but may be terminated by written notice by either party or by the Company making payment 
in lieu of notice. They may also be terminated with cause as set out below. Each agreement sets out the Fixed Remuneration, 
performance-related bonus opportunities, termination rights and obligations and eligibility to participate in the LTI.

Executive salaries are reviewed annually. Key non-financial terms in the executive service agreements are set out below. Remuneration 
details are set out in sections 6.8 and 6.9.

teRMinAtiOn Of eMPLOyMent WitHOut nOtiCe AnD WitHOut PAyMent in Lieu Of nOtiCe
The Company may terminate the employment of the executive without notice and without payment in lieu of notice in some 
circumstances. Generally this includes if the executive:

(a)  commits an act of serious misconduct

(b)  commits a material breach of the executive service agreement

28

reMuneration report

(c) 

(d) 

 is charged with any criminal offence which, in the reasonable opinion of the Company, may embarrass or bring the Fairfax Group 
into disrepute, or

 unreasonably refuses to carry out his or her duties including complying with reasonable, material and lawful directions from 
the Company.

teRMinAtiOn Of eMPLOyMent WitH nOtiCe OR WitH PAyMent in Lieu Of nOtiCe 
The Company may terminate the employment of the executive at any time by giving the executive notice of termination or payment 
in lieu of such notice. The amount of notice required from the Company in these circumstances is set out in the table below. If 
the Company elects to make payment in lieu of all or part of the required notice, the payment is calculated on the basis of fixed 
remuneration excluding bonuses and non-cash incentives.

naMe of
executive
Greg Hywood

coMpany
terMination
notice period
12 months

eMployee
terMination
notice period
6 months

Brian Cassell

12 months

4 months

Gail Hambly(1)

18 months

3 months

Andrew Lam-Po-Tang(2)
Christopher Maher

24 weeks
3 months

24 weeks
3 months

Michelle Williams

12 months

4 months

(1)  Participant in the Fairfax defined benefit superannuation scheme.
(2) Maximum term contract for a 3 year period.

post-eMployMent restraint
12 month no solicitation of employees or clients
6 months no work for a competitor of the Fairfax Group
12 month no solicitation of employees or clients
6 months no work for a competitor of the Fairfax Group
12 month no solicitation of employees or clients
6 months no work for a competitor of the Fairfax Group
12 month no solicitation of employees or clients
6 month no solicitation of employees or clients
4 months no work for a competitor of the Fairfax Group
12 month no solicitation of employees or clients
4 months no work for a competitor of the Fairfax Group

6.6  ACtuAL ReMuneRAtiOn Of DiReCtORS 
The following table outlines the actual payments made to Directors during the performance year. 

Base salary &
terMination

non-executive
directors fees

cash

Bonus superannuation

total
excluding
shares

value of
shares
vested

total
including
shares

R Corbett

G Hywood(3)

JB Fairfax(2)
NJ Fairfax(2)

B McCarthy(4)
S McPhee

M Anderson(1) 2012
2011
2012
2011
2011
2012
2011
2012
2011
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
total remuneration:
2012
Directors
2011

R Savage(5)

S Morgan

L Nicholls

P Young

279,942
–
–
–
–
–
–
1,551,846
1,178,570
3,084,323
–
–
–
–
–
–
–
–
–
–

119,296
120,636
397,000
378,559
55,681
90,000
193,867
–
24,897
–
175,156
153,633
130,000
164,513
174,000
165,672
163,000
155,267
212,678
202,027

–
–
–
–
–
–
–
420,000
290,000
57,952
–
–
–
–
–
–
–
–
–
–

35,931
10,857
35,730
34,070
4,620
8,100
17,448
48,077
32,687
25,000
15,764
13,827
11,700
14,806
15,660
14,910
14,670
13,974
10,763
18,182

1,831,788
4,262,893

1,461,130
1,614,752

420,000
347,952

196,395
200,381

435,169
131,493
432,730
412,629
60,301
98,100
211,315
2,019,923
1,526,154
3,167,275
190,920
167,460
141,700
179,319
189,660
180,582
177,670
169,241
223,441
220,209

3,909,313
6,425,978

–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–

–
–

435,169
131,493
432,730
412,629
60,301
98,100
211,315
2,019,923
1,526,154
3,167,275
190,920
167,460
141,700
179,319
189,660
180,582
177,670
169,241
223,441
220,209

3,909,313
6,425,978

1)   M Anderson took a leave of absence from the Board and acted as Executive Chairman of Fairfax Radio from 27 October 2011 to 1 March 2012. 
2)  NJ Fairfax resigned from the Board effective 29 November 2011 and JB Fairfax retired on 11 November 2010.
3)   G Hywood was previously a Non-Executive Director of Fairfax, was appointed in an acting capacity to CEO role on 7 December 2010.  

On 7 February 2011 was appointed to the role of CEO and Managing Director on an ongoing basis.

4)  B McCarthy ceased to be employed by Fairfax on 6 December 2010. 
5)  R Savage retired from the Board effective 30 June 2012.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

29

 
reMuneration report

6.7  key MAnAGeMent PeRSOnneL 
The following are the key management personnel for the financial year in addition to the Non-Executive Directors listed above. 

kMp

Greg Hywood
Brian Cassell
Gail Hambly
Andrew Lam-Po-Tang*
Christopher Maher*
Michelle Williams*

title

Chief Executive Officer 
Chief Financial Officer
Group General Counsel and Company Secretary
Chief Information and Technology Officer
Director of Strategy and Corporate Development
General Manager Human Resources

* Included in the definition of KMP for the first time in the 2012 financial year.

Due to a Group restructure and centralisation of corporate functions each of Andrew Lam-Po-Tang, Christopher Maher and Michelle 
Williams have become key management personnel in 2012.

6.8  ACtuAL ReMuneRAtiOn Of tHe exeCutiveS WHO ARe key MAnAGeMent PeRSOnneL 
The following table outlines the actual payments made to executives during the performance year. 

Base
salary

cash
Bonus

super-
annuation

total
excluding
shares

value of
shares
vested

G Hywood – Chief 
Executive Officer(1)

B Cassell – Chief 
Financial Officer

G Hambly – Group 
General Counsel and 
Company Secretary
A Lam-Po-Tang – 
Chief Information and 
Technology Officer(2)
C Maher – Director of 
Strategy and Corporate 
Development
M Williams – General 
Manager Human 
Resources 
TOTAL

2012
2011
2012
2011
2012
2011

1,551,846
1,203,467
726,847
717,045
542,189
502,872

420,000
290,000
225,000
118,919
190,000
162,855

48,077
32,687
48,077
50,000
69,235
61,805

 2,019,923
1,526,154
999,924
885,964
801,424
727,532

2012

217,361

150,000

19,562

386,923

2012

337,174

110,000

28,916

476,090

2012

306,761

95,000

26,316

428,077

2012

2011

3,682,178

1,190,000

240,183

5,112,361

2,423,384

571,774

144,492

3,139,650

–
–
–
–
–
–

–

–

–

–

–

perforMance
related
total

21%
19%
23%
13%
24%
22%

39%

23%

22%

total
including
shares

 2,019,923
1,526,154
999,924
885,964
801,424
727,532

367,361

476,090

428,077

5,112,361

3,139,650

1)   G Hywood was previously a Non-Executive Director of Fairfax, was appointed in an acting capacity to CEO role on 7 December 2010. 

On 7 February 2011 was appointed to the role of CEO and Managing Director on an ongoing basis.

2)  A Lam-Po-Tang commenced with the Company on 2 February 2012.

All executives are employees of the Company and the Group.

30

reMuneration report

6.9   ReMuneRAtiOn Of DiReCtORS AnD key MAnAGeMent PeRSOnneL AS DefineD unDeR tHe Corporations aCt 2001 

AnD ReGuLAtiOnS (ACCOuntinG tReAtMent)

DiReCtORS
This table sets out remuneration which includes post employment and share based long-term incentive benefits granted during the 
financial year.

M Anderson(1)

R Corbett

JB Fairfax(2)

NJ Fairfax(2)
G Hywood(3)

B McCarthy(4)
S McPhee

S Morgan

L Nicholls

R Savage(5)

P Young

Base salary &
terMination

399,238
120,636
397,000
378,559
55,681
90,000
193,867
1,551,846
1,203,467
3,084,323
175,156
153,633
130,000
164,513
174,000
165,672
163,000
155,267
212,678
202,027

2012
2011
2012
2011
2011
2012
2011
2012
2011
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011

cash
Bonus

–
–
–
–
–
–
–
420,000
290,000
57,952
–
–
–
–
–
–
–
–
–
–

superannuation

long
service
leave

total
excluding
shares

value of

shares(6)

total
including
shares

35,931
10,857
35,730
34,070
4,620
8,100
17,448
48,077
32,687
25,000
15,764
13,827
11,700
14,806
15,660
14,910
14,670
13,974
10,763
18,182

–
–
–
–
–
–
–
5,084
–
–
–
–
–
–
–
–
–
–
–
–

5,084
–

435,169
131,493
432,730
412,629
60,301
98,100
211,315
2,025,007
1,526,154
3,167,275
190,920
167,460
141,700
179,319
189,660
180,582
177,670
169,241
223,441
220,209

–
–
–
–
–
–
–
333,548
–
(597,556)
–
–
–
–
–
–
–
–
–
–

435,169
131,493
432,730
412,629
60,301
98,100
211,315
2,358,555
1,526,154
2,569,719
190,920
167,460
141,700
179,319
189,660
180,582
177,670
169,241
223,441
220,209

3,914,397
6,425,978

333,548
(597,556)

4,247,945
5,828,422

total remuneration:
Directors

2012
2011

3,292,918
5,877,645

420,000
347,952

196,395
200,381

1)   M Anderson took a leave of absence from the Board and acted as Executive Chairman of Fairfax Radio from 27 October 2011 to 1 March 2012. 
2)  NJ Fairfax resigned from the Board effective 29 November 2011 and JB Fairfax retired on 11 November 2010.
3)   G Hywood was previously a Non-Executive Director of Fairfax, was appointed in an acting capacity to CEO role on 7 December 2010. 

On 7 February 2011 was appointed to the role of CEO and Managing Director on an ongoing basis.

4)  B McCarthy ceased to be employed by Fairfax on 6 December 2010. 
5)  R Savage retired from the Board effective 30 June 2012.
6)   Amount includes the amortised cost of the fair value of rights to shares issued but not yet vested. Credits relate to the reversal of the prior 

years amortised cost following forfeiture due to departure. No Deferred Component of the annual bonus was paid.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

31

 
reMuneration report

exeCutiveS 
This table sets out remuneration which includes post employment and share based long-term incentive benefits granted during the 
financial year.

G Hywood – Chief Executive Officer(1)

B Cassell – Chief Financial Officer

G Hambly – Group General  
Counsel and Company Secretary

A Lam-Po-Tang – Chief Information 
and Technology Officer(2)
C Maher – Director of Strategy  
and Corporate Development
M Williams – General Manager 
Human Resources 
tOtAL

Base salary

cash
Bonus

super-
annuation

2012
2011
2012
2011
2012
2011

1,551,846
1,203,467
726,847
717,045
542,189
502,872

420,000
290,000
225,000
118,919
190,000
162,855

48,077
32,687
48,077
50,000
69,235
61,805

long
service
leave
expense

5,084
–
24,167
26,799
29,486
13,122

total
excluding
shares

2,025,007
1,526,154
1,024,091
912,763
830,910
740,654

value of

shares(3)

333,548
–
138,989
176,441
107,360
141,194

total
including
shares

2,358,555
1,526,154
1,163,079
1,089,204
938,270
881,848

2012

217,361

150,000

19,562

–

386,923

–

386,923

2012

337,174

110,000

28,916

10,910

487,000

47,483

534,483

2012
2012
2011

306,768

95,000
3,682,178 1,190,000
571,774
2,423,384

26,316
240,183
144,492

18,520
88,167
39,921

446,597
5,200,528
3,179,571

38,063
665,443
317,635

484,659
5,865,969
3,497,206

1)   G Hywood was previously a Non-Executive Director of Fairfax, was appointed in an acting capacity to CEO role on 7 December 2010.  

On 7 February 2011 was appointed to the role of CEO and Managing Director on an ongoing basis.

2)  A Lam-Po-Tang commenced with the Company on 2 February 2012.
3)   Amount includes the amortised cost of the fair value of rights to shares issued but not yet vested. Credits relate to the reversal of the prior 

years amortised cost following forfeiture due to departure. No Deferred Component of the annual bonus was paid.

All executives are employees of the Company and the Group.

32

reMuneration report

Shares granted to executives who are key Management Personnel during the performance year 

perforMance

nuMBer of

 condition(1)

 shares granted(2)

fair value
per shares(3)

MaxiMuM value

of grant(4)

G Hywood – Chief Executive Officer

B Cassell – Chief Financial Officer

G Hambly – Group General  
Counsel and Company Secretary

A Lam-Po-Tang – Chief Information  
and Technology Officer

C Maher – Director of Strategy  
and Corporate Development

M Williams – General Manager  
Human Resources

 TSR 
 EPS 

 TSR 
 EPS 

 TSR 
 EPS 

 TSR 
 EPS 

 TSR 
 EPS 

 TSR 
 EPS 

 471,531
 471,531 

137,038
137,038

110,515
110,515

–
–

64,540
64,540

46,858
46,858

$0.57
$0.80

$0.57
$0.80

$0.57
$0.80

$0.57
$0.80

$0.57
$0.80

$0.57
$0.80

$268,773
$377,225
$645,998
$78,112
$109,630
$187,742
$62,994
$88,412
$151,406
–
–
–
$36,788
$51,632
$88,420
$26,709
$37,486
$64,195

The maximum value of unvested shares in the LTI plans for FY2009, FY2010, and FY2011 is $1,923,043. The minimum total value of all 
unvested shares for all plan years is nil.

(1)   LTI shares are subject to performance hurdles that are outlined in section 6.2. Rights to LTI shares lapse where the applicable 

performance conditions are not satisfied on testing. As the LTI share rights only vest on satisfaction of performance conditions which are 
to be tested in future fiscal periods, fiscal 2011 LTI shares have not yet been forfeited or vested.

(2)  The grants made to Executives constituted their full LTI entitlement for fiscal 2012 and were made on 13 September 2011 subject to the 

terms summarised in section 6.2.

(3)  Fair value per LTI share was calculated by independent consultants PwC as at the grant date of 13 September 2011. 
(4)  The maximum value of the grant has been estimated based on the fair value per instrument. The minimum total value of the grant is nil 

(this assumes none of the applicable performance conditions are met). The maximum value has been calculated to be nil for Executives 
who have departed during the period.

6.10  OPtiOnS 
During the year ended 24 June 2012:

• 

• 

• 

• 

no options were granted to Directors or key management personnel (2011: nil)

no options held by Directors or key management personnel vested (2011: nil)

no options held by Directors or key management personnel lapsed (2011: nil), and

no options held by Directors or key management personnel were exercised (2011: nil).

6.11   LOAnS tO DiReCtORS AnD key MAnAGeMent PeRSOnneL
During the year ended 24 June 2012, there were no loans to Directors or to key management personnel (2011: nil).

6.12  HeDGinG RiSk On SeCuRitieS fORMinG PARt Of ReMuneRAtiOn
The rules of the Fairfax Employee Share Plans prohibit employees from creating any encumbrance on unvested share rights. Under 
the Board approved Fairfax Securities Trading Policy, the Directors and certain senior employees are not permitted to enter a financial 
transaction (whether through a derivative, hedge or other arrangement) which would operate to limit the economic risk of an employee’s 
holding of unvested Company securities which have been allocated to the employee as part of his or her remuneration. Employees who 
are found not to have complied with the Securities Trading Policy risk disciplinary sanctions which may include termination of employment.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

33

 
corporaTe GoVernance

The Company’s compliance with the ASX Corporate 
Governance Council’s Corporate Governance Principles 
and Recommendations, (“ASX Recommendations”) 
is set out in the following table.

Principle 1: Lay solid foundations for management and oversight
1.1

Establish the functions reserved to the Board and those delegated to senior executives 
and disclose those functions
Disclose the process for evaluating the performance of senior executives
Provide the information indicated in the Guide to reporting on Principle 1

1.2
1.3

Principle 2: Structure the board to add value
2.1
2.2
2.3

A majority of the Board should be independent Directors
The chair should be an independent Director
The roles of chair and Chief Executive Officer should not be exercised by the 
same individual
The Board should establish a nomination committee
Disclose the process for evaluating the performance of the Board, its committees 
and individual Directors
Provide the information indicated in Guide to reporting on Principle 2

2.4
2.5

2.6

Principle 3: Promote ethical and responsible decision making
3.1

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 shareholders, and
 the responsibility and accountability of individuals for reporting and investigating 
reports of unethical practices.

• 

3.2

3.3

3.4

3.5

Establish a policy concerning diversity and disclose the policy or a summary of 
that policy
Disclose the measurable objectives for achieving gender diversity set by the Board in 
accordance with the diversity policy and progress towards achieving them
Disclose the proportion of women employees in the whole organisation, women in 
senior executive positions and women on the Board
Provide the information indicated in the Guide to reporting on Principle 3

Principle 4: Safeguard integrity in financial reporting
4.1
4.2

The Board should establish an audit committee
Structure the audit committee so that it:
•  consists of only Non-Executive Directors
•  consists of a majority of independent Directors
• 
•  has at least three members.
The audit committee should have a formal charter
Provide the information indicated in Guide to reporting on Principle 4

is chaired by an independent chair, who is not chair of the Board, and

4.3
4.4

Principle 5: Make timely and balanced disclosure
5.1

Establish written policies and procedures designed to ensure compliance with ASX 
Listing Rule disclosure requirements and to ensure accountability at a senior executive 
level for that compliance and disclose those policies or a summary of those policies
Provide the information indicated in Guide to reporting on Principle 5

5.2

34

coMpliance

pages

✔
✔
✔

✔
✔

✔
✔

✔

✔

✔

✔

✔

✔
✔

✔
✔

35
23 - 33
26, 35

37
37

37
36

36
16 - 17, 20,
36 - 37

37

24 - 25

24 - 25

24 - 25
24, 37

38
36

✔
38
✔ 16 - 17, 20, 38

✔
✔

39
39

corporate governance

Principle 6: Respect the rights of shareholders
6.1

Design a communications policy for promoting effective communication with 
shareholders and encouraging their participation at general meetings and disclose 
the policy or a summary of the policy
Provide the information indicated in Guide to reporting on Principle 6

Principle 7: Recognise and manage risk
7.1

Companies should establish policies for the oversight and management of material 
business risks and disclose a summary of those policies
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 effectively. The Board should disclose that 
management has reported to it as to the effectiveness of the Company’s management 
of its material business risks
Board should disclose whether it has received assurance from the Chief Executive 
(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
Provide the information indicated in Guide to reporting on Principle 7

Principle 8: Remunerate fairly and responsibly
8.1
8.2

The Board should establish a remuneration committee
The remuneration committee should be structured so that it consists of a majority 
of independent directors, is chaired by an independent director and has at least 
three members
Clearly distinguish the structure of Non-Executive Directors’ remuneration from that 
of executive Directors and senior executives
Provide the information indicated in Guide to reporting on Principle 8

6.2

7.2

7.3

7.4

8.3

8.4

coMpliance

pages

✔

✔

✔

✔

✔

✔

✔
✔

✔

✔

39

39

40

40

40

40

23 - 33
23 - 33

23 - 33

23 - 33

The key corporate governance principles of the Fairfax Group are set out below. This section of the Annual Report, which is publicly 
available on the Company’s website at www.fairfaxmedia.com.au, contains summaries of the Fairfax Board Charter, Nomination 
Committee Charter, Code of Conduct, Sustainability and Corporate Responsibility Committee Charter, Audit and Risk Committee 
Charter, Charter of Audit Independence, policy on market disclosure and shareholder communications, risk management policy and 
securities trading policy (including policy on hedging unvested securities issued as part of remuneration). The People and Culture 
Committee Charter and the Diversity Policy are summarised in the Remuneration Report.

BOard OF direCtOrS

The Board of Directors is responsible for the long-term growth and profitability of the Group.

The Board has adopted a Board Charter which sets out the responsibilities of the Board and its structure and governance requirements. 
Under the Board Charter, the responsibilities of the Board are to:

(a)  set the strategic direction of the Fairfax Group

(b) 

 provide overall policy guidance and ensure that policies and procedures for corporate governance and risk management are 
in place to ensure shareholder funds are prudently managed and that the Group complies with its regulatory obligations and 
ethical standards

(c)  set and monitor performance against the financial objectives and performance targets for the Group

(d)  determine the terms of employment and review the performance of the Chief Executive Officer (CEO)

(e) 

 set and monitor the Group’s programs for succession planning and key executive development with the aim to ensure these 
programs are effective

(f)  approve acquisitions and disposals of assets, businesses and expenditure above set monetary limits, and

(g)  approve the issue of securities and entry into material finance arrangements, including loans and debt issues.

Subject to the specific authorities reserved to the Board under the Board Charter, and to the authorities delegated to the Board 
committees, the Board has delegated to the CEO responsibility for the management and operation of the Fairfax Group. The CEO is 
responsible for the day-to-day operations, financial performance and administration of the Fairfax Group within the powers authorised 
to him from time-to-time by the Board. The CEO may make further delegation within the delegations specified by the Board and is 
accountable to the Board for the exercise of these delegated powers.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

35

 
corporate governance

Membership of the Board and its committees at the date of this report is set out below:

coMMittee MeMBership

director

R Corbett
G Hywood
M Anderson
J Cowin
S McPhee
S Morgan
L Nicholls
J Millar
P Young

MeMBership type

audit and risk

noMinations

Independent Chair
CEO/Managing Director
Independent
Independent
Independent
Independent
Independent
Independent
Independent

Member
–
–
–
–
–
Chair
–
Member

Chair 
–
–
–
–
–
–
–
Member

people 
and culture

sustainaBility
and corporate
responsiBility

Member
–
Member 
–
Chair
–
–
–
Member 

Member
–
Chair
–
Member
–
–
–
–

The qualifications and other details of each member of the Board are set out on pages 16 - 17 of this report.

Except for the Chief Executive Officer, all Directors (including the Chair) are considered by the Board to be independent, 
Non-Executive Directors.

The Constitution authorises the Board to appoint Directors to vacancies and to elect the Chair. One third of Directors (excluding the 
Chief Executive Officer and a Director appointed to fill a casual vacancy and rounded down to the nearest whole number) must retire at 
every Annual General Meeting. Other than the Chief Executive Officer, no Director may remain in office for more than three years or the 
third annual general meeting following appointment without resigning and being re-elected. Any Director appointed by the Board must 
stand for election at the next general meeting of shareholders.

Any Director may seek independent professional advice at the Company’s expense. Prior approval by the Chair is required, but approval 
must not be unreasonably withheld.

The Board has a Nominations Committee which reviews potential Board candidates as required. The Committee is comprised of 
Non-Executive independent Directors. The Committee may seek expert external advice on suitable candidates. 

The Board has adopted a formal Nominations Committee Charter. Under the Charter, the purpose of the Committee is to identify 
individuals qualified to become Board members and recommend them for nomination to the Board and its Committees; to ensure Board 
members’ performance is reviewed regularly and to recommend changes from time to time to ensure the Board has an appropriate mix 
of skills and experience.

The Committee uses the following principles to recommend candidates and provide advice and other recommendations to the Board:

• 

• 

a majority of the Directors and the Chair should be independent, and

the Board should represent a broad range of expertise consistent with the Company’s strategic focus.

Duties of the Nominations Committee include:

•  making recommendations to the Board on the size and composition of the Board

• 

• 

• 

• 

identifying and recommending individuals qualified to be Board members, taking into account such factors as it deems appropriate

identifying Board members qualified to fill vacancies on the Committees

recommending the appropriate process for the evaluation of the performance of each Director and the Board, and

other duties delegated to it from time to time relating to nomination of Board or Committee members or corporate governance.

The Board conducts a review of its structure, composition and performance annually. The Board may seek external advice to assist 
in the review process. During this financial year a review of Board performance was conducted by the Chairman.

36

corporate governance

iNdePeNdeNt direCtOrS

Under the Board Charter, the majority of the Board and the Chair must be independent. A Director must notify the Company about any 
conflict of interest, potential material relationship with the Company or circumstance relevant to his/her independence.

Directors have determined that all Directors except the Chief Executive Officer are independent. In assessing whether a Director is 
independent, the Board has considered Directors’ obligations to shareholders, the requirements of applicable laws and regulations, 
criteria set out in the Board Charter and the ASX Recommendations. The Board has not set specific materiality thresholds, considering 
it more effective to assess any relationship on its merits on a case-by-case basis, and where appropriate, with the assistance of 
external advice. 

The ASX Recommendations, in summary, state that the Board should consider whether the Director:

• 

is a substantial shareholder or officer or associated with a substantial shareholder of the Company

•  was employed in an executive capacity by the Group within the last three years

•  within the last three years, was a principal of a material professional adviser or a material consultant or an employee materially 

associated with a service

• 

• 

is, or is associated with a material supplier or customer of the Group, and

has a material contractual relationship with the Group other than as a Director.

COde OF CONdUCt

All Directors, managers and employees are required to act honestly and with integrity.

The Company has developed and communicated to all employees and Directors the Fairfax Code of Conduct. The Code assists in 
upholding ethical standards and conducting business in accordance with applicable laws. The Code also sets out the responsibility of 
individuals for reporting Code breaches.

The Fairfax Code of Conduct aims to:

• 

• 

• 

• 

provide clear guidance on the Company’s values and expectations while acting as a representative of Fairfax

promote minimum ethical behavioural standards and expectations across the Group, all business units and locations

offer guidance for shareholders, customers, readers, suppliers and the wider community on our values, standards and expectations, 
and what it means to work for Fairfax

raise employee awareness of acceptable and unacceptable behaviour and provide a means to assist in avoiding any real or 
perceived misconduct.

Supporting the Code of Conduct is the Company’s range of guidelines and policies. These policies are posted on the Company intranet, 
are communicated to employees at the time of employment and are reinforced by training programs.

The Code of Conduct is a set of general principles relating to employment with Fairfax, covering the following areas:

• 

• 

• 

• 

• 

• 

business integrity – conducting business with honesty, integrity and fairness; reporting concerns without fear of punishment; making 
public comments about the Company and disclosing real or potential conflicts of interest

professional practice – dealings in Fairfax shares; disclosing financial interests; protecting Company assets and property; 
maintaining privacy and confidentiality; undertaking employment outside Fairfax; personal advantage, gifts and inducements, 
recruitment and selection; and Company reporting

health, safety and environment

equal employment opportunity and anti-harassment

compliance with Company policies, and

implementation of and compliance with the Code of Conduct.

The Code of Conduct is to be read in conjunction with the codes of ethics for each masthead and the other Fairfax policies as amended 
from time to time.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

37

 
corporate governance

aUdit aNd riSK COmmittee

The Audit and Risk Committee operates in accordance with a Charter which sets out its role and functions. In summary, the Committee’s 
role is to advise and assist the Board on the establishment and maintenance of a framework of risk management, internal controls 
and ethical standards for the management of the Fairfax Group and to monitor the quality and reliability of financial information for the 
Group. To carry out this role, the Committee:

• 

• 

• 

recommends to the Board the appointment of the external auditor, reviews its performance, independence and effectiveness, 
approves the auditor’s fee arrangements and enforces the Company’s Charter of Audit Independence

ensures that appropriate systems of control are in place to effectively safeguard assets

ensures accounting records are maintained in accordance with statutory and accounting requirements

•  monitors systems designed to ensure financial statements and other information provided to shareholders is timely, reliable and accurate

• 

• 

• 

formulates policy for Board approval and oversees key finance and treasury functions

formulates and oversees an effective business risk plan

ensures appropriate policies and procedures are in place for compliance with all legal, regulatory and ASX requirements

•  monitors compliance with regulatory and ethical requirements

• 

• 

• 

reviews the external audit process with the external auditor, including in the absence of management

reviews the performance of internal audit

reviews and approves the internal audit plan and receives summaries of significant reports by internal audit

•  meets with the Internal Audit Manager including in the absence of management if considered necessary, and 

• 

does anything else it considers necessary to carry out the above functions.

Under its Charter, all members of the Committee must be Non-Executive Directors. Executives may attend by invitation. The Chair 
of the Committee is required to be independent and have relevant financial expertise and may not be the Chair of the Board. The 
members of the Audit and Risk Committee and details of their attendance at Committee meetings are set out on page 20. The Chair of 
the Committee may, at the Company’s expense, obtain external advice, or obtain assistance and information from officers of the Group, 
or engage other support as reasonably required from time to time.

CHarter OF aUdit iNdePeNdeNCe

The Board has also adopted a Charter of Audit Independence. The purpose of this Charter is to provide a framework for the Board 
and management to ensure that the external auditor is both independent and seen to be independent. The purpose of an independent 
statutory audit is to provide shareholders with reliable and clear financial reports on which to base investment decisions. The Charter 
sets out key commitments by the Board and procedures to be followed by the Audit and Risk Committee and management aimed to set 
a proper framework of audit independence.

To promote audit quality and effective audit service by suitably qualified professionals, the Board ensures that the auditor is fairly 
rewarded for the agreed scope of the statutory audit and audit-related services. The auditor is required to have regular communications 
with the Committee, at times without management present. Audit personnel must be appropriately trained, meet the required technical 
standards and maintain confidentiality.

Restrictions are placed on non-audit work performed by the auditor. Non-audit fees above a fixed level may not be incurred without the 
approval of the Chair of the Audit and Risk Committee.

The Company requires the rotation of the lead audit partner and the independent review partner for the Company at least every five 
years. The Committee requires the auditor to confirm annually that it has complied with all professional regulations and guidelines 
issued by the Australian accounting profession relating to auditor independence. The auditor must also confirm that neither it nor its 
partners has any financial or material business interests in the Company outside of the supply of professional services.

38

corporate governance

marKet diSClOSUre aNd SHareHOlder COmmUNiCatiONS

The Company has a Market Disclosure Policy which sets out requirements aimed to ensure full and timely disclosure to the market of 
material issues relating to the Group to ensure that all stakeholders have an equal opportunity to access information. 

The Policy reflects the ASX Listing Rules and Corporations Act continuous disclosure requirements.

The Market Disclosure Policy requires that the Company notify the market, via the ASX, of any price sensitive information (subject to 
the exceptions to disclosure under the Listing Rules). Information is price sensitive if a reasonable person would expect the information 
to have a material effect on the price or value of the Company’s securities or if the information would, or would be likely to, influence 
investors in deciding whether to buy, hold or sell Fairfax securities.

The Chief Executive Officer, Chief Financial Officer, General Manager Investor Relations and Group General Counsel/Company 
Secretary are designated as Disclosure Officers who are responsible for reviewing potential disclosures and deciding what information 
should be disclosed. 

Only the Disclosure Officers may authorise communications on behalf of the Company to the ASX, media, analysts and investors. This 
safeguards the premature exposure of confidential information and aims to ensure proper disclosure is made in accordance with the law. 
ASX and press releases of a material nature must be approved by a Disclosure Officer.

The Disclosure Officers, in conjunction with the Chair of the Board are authorised to determine whether a trading halt will be requested 
from the ASX to prevent trading in an uninformed market.

The onus is on all staff to inform a Disclosure Officer of any price sensitive information as soon as becoming aware of it. The Executive 
Leadership Team is responsible for ensuring staff understand and comply with the policy.

As well as its Listing Rules and statutory reporting obligations, the Company actively encourages timely and ongoing shareholder 
communications.

To ensure ready access for shareholders to information about the Company, Company announcements, annual reports, analyst and 
investor briefings, financial results and other information useful to investors such as press releases are placed on the Company’s 
website at www.fairfaxmedia.com.au as soon as practical after their release to the ASX. Several years’ worth of historical financial 
information is available on the website. The results briefings given to analysts by senior management are webcast on the website.

The full text of notices of meetings and the accompanying explanatory materials are posted on the website for each Annual General 
Meeting. The Chair’s and the Chief Executive Officer’s addresses, proxy counts and results of shareholder resolutions at the meeting 
are also posted on the website.

At the Annual General Meeting, shareholders are encouraged to ask questions and are given a reasonable opportunity to comment 
on matters relevant to the Company. The external auditor attends the Annual General Meeting and is available to answer shareholder 
questions about the audit and the audit report.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

39

 
corporate governance

riSK maNaGemeNt aNd iNteGritY OF FiNaNCial rePOrtiNG

The Board oversees the risk management and internal compliance and control system. 

The system seeks to provide a consistent approach to identifying, assessing, and reporting risks, whether they are related to Company 
performance, reputation, safety, environment, internal control, compliance or other risk areas.

Key aspects of the Company’s risk management and internal compliance and control system are summarised as follows:

• 

• 

• 

• 

risks are assessed at least annually and revised periodically for each division through the business planning, budgeting, forecasting, 
reporting, internal audit and performance management processes 

the Board, through the Audit and Risk Committee, receives regular reports from management (and independent advisers where 
appropriate) on key risk areas such as treasury, health safety and environment, regulatory compliance, taxation, finance and internal 
audit and the effectiveness of the risk management system 

formal risk assessments are required as part of business case approvals for one-off projects or initiatives of a significant nature. 
Project teams are responsible for managing the risks identified

under the direction of the Audit and Risk Committee, Internal Audit conducts a program of internal process control reviews over 
key areas, based on their importance to the Company, and provides assurance over the internal control assessments undertaken 
by management.

The Company’s risk framework is overseen and monitored by both the Board and the Audit and Risk Committee. 

As part of the risk framework, specific policies and approval processes have been developed to cover key risk areas such as material 
investments and contracts, treasury, capital expenditure approval, occupational health and safety and environmental processes.

The Company’s Internal Audit function comprises the Internal Audit Manager and a team of professionals who work through a schedule 
of prioritised risk areas across all the major business units to provide an independent risk assessment and evaluation of operating and 
financial controls. The Internal Audit function is independent from the external auditor and the Internal Audit Managers may meet with 
the Audit and Risk Committee in the absence of management. Internal Audit reports its results to each meeting of the Audit and Risk 
Committee and the Internal Audit Manager attends the meetings. 

The Board has received written assurances from the Chief Executive and the Chief Financial Officer that in their opinion:

(a) 

(b) 

 the financial statements and associated notes comply in all material respects with the accounting standards as required by the 
Corporations Act 2001

 the financial statements and associated notes give a true and fair view, in all material respects, of the financial position as at the 
end of the financial year and performance of the Company and Consolidated Entity for the period then ended as required by the 
Corporations Act 2001

(c) 

there are reasonable grounds to believe the Company will be able to pay its debts as and when they become due and payable

(d) 

the financial records of the Company have been properly maintained in accordance with the Corporations Act 2001

(e) 

 the statements made above regarding the integrity of the financial statements are founded on a sound system of financial risk 
management and internal compliance and control which, in all material respects, implements the policies adopted by the Board

(f) 

 the risk management and internal compliance and control systems of the Company and Consolidated Entity relating to financial 
reporting compliance and operations objectives are operating efficiently and effectively, in all material respects. Management has 
reported to the Board as to the effectiveness of the Company’s management of its material business risks

(g) 

 subsequent to the end of the financial year, no changes or other matters have arisen that would have a material effect on the 
operation of the risk management and internal compliance and control systems of the Company and Consolidated Entity.

These statements to the Board are underpinned by the requirement for appropriate senior executives to provide a signed letter of 
representation addressed to the Chief Executive Officer and Chief Financial Officer verifying material issues relating to the executive’s 
areas of responsibility and disclosing factors that may have a material effect on the financial results or operations of the Group.

remUNeratiON

Information about the Board’s People and Culture Committee , its Charter, the Company’s remuneration policies for Non-Executive 
Directors and the remuneration of the CEO and senior executives is set out in the Remuneration Report beginning on page 23.

40

corporate governance

tradiNG iN COmPaNY SeCUritieS

Directors must not trade directly or indirectly in Fairfax securities while in possession of price sensitive information. Price sensitive 
information is information which has not been made public, usually about the Group or its intentions, which a reasonable person would 
expect to have a material effect on the price or value of Fairfax securities or which would be likely to influence an investment decision in 
relation to the securities.

The Fairfax Securities Trading Policy regulates dealings by Directors and certain senior employees (“Designated People”) in Fairfax 
securities (including shares, convertible notes derivatives and options). The purpose of the Policy is to ensure that Designated People 
comply with the legal and company-imposed restrictions on trading in securities whilst in possession of unpublished price sensitive 
information. The Policy sets out blackout periods when no trading is to be undertaken and a process for authorisation of trading at other 
times. Designated People means the Directors, CEO, Company Secretary, those employees who report directly to the CEO and those 
employees who are notified that they are subject to the Policy.

A Designated Person must not trade in breach of the Policy either directly or indirectly through another entity, such as a partner, child, 
nominee or controlled company acting on his/her behalf. Under the Policy, Designated People are prohibited from trading in Fairfax 
securities without approval under the Policy or when in possession of price-sensitive information about Fairfax. In addition, Designated 
People must not tip anyone else on Fairfax securities, engage in short term speculative trading in Fairfax securities or trade in 
Fairfax derivatives.

Black-out periods occur before the announcement of the half-yearly and annual results, other trading updates and the Annual General 
Meeting. During black-out periods Designated People will not be authorised to trade. Outside of the trading black-out periods, Directors 
must obtain approval from the Chair (or the chairman of the Audit and Risk Committee for approvals for the Chair to trade). Other 
Designated People must obtain approval from the Company Secretary who will consult with the Chair.

Each Director must notify the Company Secretary of any change in the Director’s interest in Fairfax securities so as to ensure 
compliance with the disclosure requirements of the ASX Listing Rules.

The Policy prohibits Designated People from entering into any financial transactions that operate to limit the economic risk of unvested 
Fairfax securities which have been allocated to an employee as part of his/her remuneration, prior to the securities vesting. Any breach 
of this prohibition risks disciplinary sanctions.

SUStaiNaBilitY aNd COrPOrate reSPONSiBilitY COmmittee

In 2011, the Board established a Sustainability and Corporate Responsibility Committee and adopted a supporting Charter.

The primary purpose of the Committee is to advise and assist the Board in setting an overall direction for the Company’s commitment 
to building a long term future, which includes operating its business responsibly, ethically and sustainably (financially and otherwise). 
To fulfil this purpose, the Committee’s role includes:

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

 providing strategic leadership to the Board and management in overseeing the development and implementation of a sustainability 
and corporate social responsibility (CSR) strategy and related policies

fostering a workplace culture which values sustainable and socially responsible business practices

 identifying and monitoring current and emerging CSR trends, risks and opportunities and ensuring that the Board is kept up to 
date with market and investor expectations on CSR activities

considering and endorsing proposals by management to enhance the Group’s CSR profile, reputation and activities

 ensuring the Board, employees, the investment community and other stakeholders are kept properly informed of the Group’s 
CSR initiatives and performance

 overseeing the Group’s compliance with corporate governance and legal requirements in relation to CSR issues and 
related reporting

 monitoring that executives are remunerated having regard to performance metrics that recognise both tangible and intangible 
value creation

 dealing with such matters as the Committee deems necessary to carry out the functions set out above including interaction with 
other Board Committees where appropriate, and

 reviewing the adequacy of this Charter in light of emerging CSR trends and obligations and making recommendations to the 
Board for approval.

The Committee’s membership and Chair are determined by the Board from time to time and must consist of at least three Directors, 
no more than one member may be an executive Director. Other Directors are entitled to attend the Committee meetings. The members 
of the Sustainability and Corporate Responsibility Committee, and details of their attendance at Committee meetings, are set out on 
page 20. In order to carry out the Committee’s duties, the Chair of the Committee is authorised (at the Company’s expense) to engage 
external advice, obtain assistance and information from officers of the Group and engage such other support as is reasonably required 
from time to time.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

41

 
ManaGeMenT discussion and analYsis reporT

tradiNG OVerVieW

Trading during the 2012 financial year continued to be impacted by subdued levels of consumer confidence and both structural and 
cyclical challenges. Overall revenue of $2.3 billion was down 6 per cent on the prior year. Weakness in the Company's key Australian 
advertising markets saw advertising revenue decline 5 per cent in the first half and 7 per cent in the second half.

The performance of print publishing businesses, particularly the Company's main metropolitan titles, reflected moves by various 
advertisers to cut advertising spend in response to difficult trading conditions. Retail, financial services, government, motoring and 
employment advertising categories accounted for much of the revenue deterioration. The Company's digital revenue streams continued 
to grow, up 20 per cent in 2012, as advertisers allocated more of their advertising spend to digital.

These revenue conditions resulted in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $506 million, 
down 17% on the prior year. Accordingly, the annual asset impairment assessment conducted each year in accordance with Accounting 
Standards produced a $2.8 billion non-cash intangible asset impairment charge. This together with other restructuring and redundancy 
costs resulted in a net reported loss after tax of $2.7 billion. The asset impairment outcome is the result of a further write down of the 
carrying values of mastheads, goodwill and other intangible assets to reflect current trading levels and future expectations. The charge 
does not impact the underlying earnings position of the Company or borrowing arrangements.

Excluding this significant charge, the underlying net profit from trading after tax of $212 million was down by 26% on the prior year. See 
page 44 for a reconciliation to reported net profit after tax.

In February, the Company announced a three-year Fairfax of the Future program to fundamentally restructure the business through a 
series of strategic operational changes that will reshape the Company and reset its cost base. A $21 million EBITDA benefit was realised 
during the year as a result of this program's 2012 initiatives and will provide a full year benefit of $56 million in 2013.

The Fairfax of the Future program has three key objectives: 

•  Positioning the Metro Media business to address further structural decline in print advertising and accelerate its readiness to move 

to a digital-only model if it makes commercial sense to do so in the future;

•  Reducing group-wide costs and corporate overhead in line with the revised business structure; and

•  Strengthening the Fairfax Media balance sheet during a period when restructuring costs will be incurred.

As part of these changes, the Company announced in June that two of 15 print facilities, Chullora and Tullamarine, would close in 2014. 
The Chullora and Tullamarine plants were built at a time when almost all of Metro Media’s content, including large weekend classified 
sections, were delivered via printed daily newspapers. The rising popularity of digital delivery alternatives has seen a reduction in print 
volumes and caused surplus capacity in these plants which have significant overheads. The Chullora and Tullamarine printing work will 
be channelled to other parts of Fairfax print network to ensure optimal use of our facilities.

Total savings from the Fairfax of the Future program are expected to be $235 million on an annualised basis by June 2015. The one-off 
costs associated with achieving these cost savings are projected to be approximately $248 million on a net basis after allowing for 
proceeds from sale of the print sites. Of these one off costs, restructure and redundancy costs of $140 million were accounted for in 
fiscal 2012.

FiNaNCial POSitiON

Fairfax Media continues to generate strong free cash flows with net cash inflow from trading activities of $496 million. The Company 
reduced its net debt by $574 million after $57 million of capital expenditure on software, plant and equipment and acquisition 
expenditure; $83 million in dividend payments; $228 million income tax and net interest obligations; and surplus cash flow plus proceeds 
from the Trade Me divestment.

Following the successful IPO of Trade Me in December 2011, Fairfax executed a fully underwritten share placement for the sale of a 
further 15% of Trade Me in June 2012 to reduce its holding from 66% to 51%. This transaction provided Fairfax with $422 million of 
proceeds net of transaction costs.

The sell down of Fairfax’s Trade Me interest strengthened Fairfax’s balance sheet and was prudent in the context of the current trading 
and announced restructuring activities. Repayment of the $557 million Eurobond facility was effected during June 2012 from cash 
reserves and other undrawn facilities.

42

ManageMent discussion and analysis report

Since June 2008, the company has reduced its net debt position substantially. 

net Debt SiGnifiCAntLy ReDuCeD

SPS redeemed April 2011
Net debt

A$billion

3.0

2.5

2.0

1.5

1.0

0.5

0.0

FY2008

FY2009

FY2010

FY2011

FY2012

Net debt was well within all covenant limits at year end. Total net debt of $914 million includes $99 million of net debt within Trade Me. 
The Company's debt repayments in fiscal 2013 are minimal and maturing facilities will remain undrawn.

The following table shows the maturity of existing funding facilities the company has in place. 

fACiLitieS MAtuRinG in 2013 ARe unDRAWn

Undrawn
Drawn

A$million

900

800

700

600

500

400

300

200

100

0

FY2013

FY2014

FY2015

FY2016

FY2017

FY2018

FY2019

Following balance date, directors have declared a dividend of 1 cent per ordinary share, fully franked. Combined with the interim 
dividend of 2 cents, this brings the total dividend paid to 3 cents for the year and represents a dividend payout ratio of 35%. The 
Dividend Reinvestment Plan was not in operation for the payment of these dividends.

The Board continually assesses the level of the dividend payout ratio in light of trading conditions, restructuring costs and capital requirements.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

43

 
ManageMent discussion and analysis report

reCONCiliatiON OF StatUtOrY tO UNderlYiNG PerFOrmaNCe

Total revenue
Associate profits 

Expenses 

Operating ebitDA
Net (loss)/profit attributable  
to members of the Company 
SPS dividend (net of tax)

Net (loss)/profit after tax  
and SPS dividend

(Loss)/earnings per share

as reported

significant iteMs

underlying trading 
perforMance

 24 June 2012
$’000

 26 June 2011
$’000

 24 June 2012
$’000

 26 June 2011
$’000

 24 June 2012
$’000

 26 June 2011
$’000

2,328,066
1,746

4,888,418

 2,465,541 
 3,362 

 2,549,588 

(2,558,606)

 (80,685)

–
–

–
–

3,064,628

(3,064,628)

 688,129 

 (688,129)

2,328,066
1,746

1,823,790

506,022

(2,732,397)

 (390,861)

(3,064,628)

 (674,674)

205,424

–

 10,034 

–

–

–

 2,465,541 
 3,362 

 1,861,459 

 607,444 

 283,813 

 10,034 

(2,732,397)

 (400,895)

(2,937,821)

 (674,674)

205,424

 273,779 

(116.2)

 (17.0)

8.7

 11.6 

Refer to Note 4 of the Financial Statements for further breakdown of the significant items reported during the year.

reCONCiliatiON OF tradiNG tO OPeratiNG CaSH FlOW

Cash flow from trading activities
Interest received
Finance costs and income tax paid

Net cash flow from operating activities

 24 June 2012
$’000

 26 June 2011
$’000

495,997
9,986
(238,334)

267,649 

 624,280 
 9,856 
 (202,711)

 431,425 

44

FairFax media limited  
aCN 008 663 161

annual financial 
reporT

Consolidated Income Statement 
Consolidated Statement of Comprehensive Income 
Consolidated Balance Sheet 
Consolidated Cash Flow Statement 
Consolidated Statement of Changes in Equity 

notes to the financial Statements 

Investments accounted for using the equity method 

Inventories 

Intangible assets 

Income tax expense 

Interest bearing liabilities 

01  Summary of significant accounting policies 
02  Revenues  
03  Expenses 
04  Significant items 
05 
06  Dividends paid and proposed 
07  Receivables 
08 
09  Assets and liabilities held for sale 
10  Other financial assets 
11 
12  Available for sale investments 
13 
14  Property, plant and equipment 
15  Derivative financial instruments 
16  Deferred tax assets and liabilities 
17  Payables 
18 
19  Provisions 
20  Pension assets and liabilities 
21  Contributed equity 
22  Reserves 
23  Retained profits 
24  Earnings per share 
25  Commitments 
26  Contingencies 
27  Controlled entities 
28  Acquisition and disposal of controlled entities 
29  Business combinations 
30  Employee benefits 
31  Remuneration of auditors 
32  Director and executive disclosures 
33  Related party transactions 
34  Notes to the cash flow statement 
35  Financial and capital risk management 
36  Segment reporting 
37  Parent entity information 
38  Events subsequent to balance sheet date 

Directors’ Declaration 
Independent Auditor's Report 
Shareholder Information 
Five Year Performance Summary 
Directory 

46
47
48
49
50

52
65
66
67
68
69
70
71
71
72
73
74
75
79
81
84
85
86
88
89
92
94
96
96
97
98
98
103
104
105
106
107
109
110
111
119
122
122

123
124
126
127
128

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

4545

 
 
consolidaTed incoMe sTaTeMenT

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

Revenue from operations
Other revenue and income
Total revenue and income
Share of net profits of associates and joint ventures
Expenses from operations excluding impairment, depreciation,  
amortisation and finance costs
Depreciation and amortisation
Impairment of intangibles, investments and property, plant and equipment
Finance costs
net loss from operations before income tax expense
Income tax benefit/(expense)

note

2(A)
2(B)

11(C)

3(A)
3(B)

3(C)

5

 24 June 2012
$’000

 26 June 2011
$’000

 2,310,919
28,269
 2,339,188 
 1,746 

 (2,023,358)
 (107,503)
 (2,865,060)
 (122,857)
 (2,777,844)
 52,041 

 2,463,413 
 13,095 
 2,476,508 
 3,362 

 (1,894,537)
 (114,351)
 (655,051)
 (119,009)
 (303,078)
 (86,589)

net loss from operations after income tax expense

 (2,725,803)

 (389,667)

Net (loss)/profit is attributable to:
Non-controlling interest
Owners of the parent

earnings per share (cents per share)
Basic loss per share (cents per share)
Diluted loss per share (cents per share)

 6,594 
 (2,732,397)

 1,194 
 (390,861)

 (2,725,803)

 (389,667)

24
24

 (116.2)
 (116.2)

 (17.0)
 (17.0)

The above Consolidated Income Statement should be read in conjunction with the accompanying Notes.

46

consolidaTed sTaTeMenT  
of coMpreHensiVe incoMe

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

Net loss from operations after income tax expense

Other comprehensive income
Changes in fair value of available for sale financial assets
Actuarial (loss)/gain on defined benefit plans
Changes in fair value of cash flow hedges
Changes in value of net investment hedges
Exchange differences on translation of foreign operations
Income tax on items of other comprehensive income

Other comprehensive income for the period, net of tax

total comprehensive income for the period

total comprehensive income is attributable to:
Non-controlling interest
Owners of the parent

note

 24 June 2012
$’000

 26 June 2011
$’000

 (2,725,803)

 (389,667)

 (675)
 (3,732)
 (11,869)
 (3,568)
 14,352 
 5,662 

 (1,606)
 1,385 
 (13,894)
 13,148 
 (92,043)
 (787)

 170 

 (93,797)

 (2,725,633)

 (483,464)

5

 6,594 
 (2,732,227)

 1,194 
 (484,658)

 (2,725,633)

 (483,464)

The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying Notes.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

47

 
consolidaTed balance sHeeT

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES AS AT 24 JUNE 2012

CuRRent ASSetS
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative assets
Assets held for sale
Income tax receivable
Other financial assets

total current assets

nOn-CuRRent ASSetS
Receivables
Investments accounted for using the equity method
Available for sale investments
Intangible assets
Property, plant and equipment
Derivative assets
Deferred tax assets
Pension assets
Other financial assets

total non-current assets

total assets

CuRRent LiAbiLitieS
Payables
Interest bearing liabilities
Derivative liabilities
Liabilities directly associated with held for sale assets
Provisions
Current tax liabilities

total current liabilities

nOn-CuRRent LiAbiLitieS
Interest bearing liabilities
Derivative liabilities
Deferred tax liabilities
Provisions
Pension liabilities
Other non-current liabilities

total non-current liabilities

total liabilities

net ASSetS

equity
Contributed equity
Reserves
Retained profits
total parent entity interest 
Non-controlling interest

tOtAL equity

note

 24 June 2012
$’000

 26 June 2011
$’000

34(B)
7
8
15
9(A)

10

7
11
12
13
14
15
16(A)
20(A)
10

17
18
15
9(B)
19

18
15
16(A)
19
20(A)

 358,364 
 334,466 
 36,622 
 123 
 25,674 
 2,592 
 3,914 

 207,137 
 371,742 
 38,967 
–
 4,975 
–
 3,686 

 761,755 

 626,507 

 2,479 
 30,811 
 1,991 
 2,502,045 
 547,004 
 27,040 
 122,530 
 149 
 10,768 

 2,268 
 33,322 
 2,633 
 5,260,108 
 722,346 
 27,839 
 10,512 
 260 
 14,833 

 3,244,817 

 6,074,121 

 4,006,572 

 6,700,628 

 282,637 
 6,439 
–
 4,956 
 193,887 
 10,680 

 279,669 
 666,785 
 80,200 
–
 140,810 
 46,477 

 498,599 

 1,213,941 

 1,200,934 
 95,628 
 15,225 
 149,305 
 3,933 
 271 

 865,247 
 106,534 
 21,815 
 50,396 
 3,595 
 392 

 1,465,296 

 1,047,979 

 1,963,895 

 2,261,920 

 2,042,677 

 4,438,708 

21
22
23

 4,646,248 
 (45,520)
 (2,805,566)
 1,795,162 
 247,515 

 4,646,248 
 (226,294)
 11,764 
 4,431,718 
 6,990 

 2,042,677 

 4,438,708 

The above Consolidated Balance Sheet should be read in conjunction with the accompanying Notes. 

48

consolidaTed casH floW sTaTeMenT

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Redundancy payments
Interest received
Dividends and distributions received 
Finance costs paid 
Net income taxes paid
Net cash inflow from operating activities
Cash flows from investing activities
Payment for purchase of controlled entities, associates and joint ventures (net of cash acquired)
Payment for purchase of businesses, including mastheads
Payment for property, plant, equipment and software 
Proceeds from sale of property, plant and equipment
Proceeds from sale of investments and other assets
Loans advanced to other parties
Loans repaid by other parties
Repayment of convertible notes
Net cash outflow from investing activities
Cash flows from financing activities
Payment for repurchase of Stapled Preference Shares
Payment for purchase of non-controlling interests in subsidiaries
Payment for shares acquired by employee share trust
Proceeds from disposal of non-controlling interest in subsidiary (net of transaction costs)*
Proceeds from borrowings and other financial liabilities
Repayment of borrowings and other financial liabilities
Payment of facility fees
Dividends and distributions paid to shareholders including SPS**
Dividends paid to non-controlling interests in subsidiaries
Net cash outflow from financing activities
net increase in cash and cash equivalents held
Cash and cash equivalents at beginning of the financial year
Effect of exchange rate changes on cash and cash equivalents

Cash and cash equivalents at end of the financial year

34(B)

note

 24 June 2012
$’000

 26 June 2011
$’000

 2,564,435 
 (2,029,532)
 (42,511)
 9,986 
 3,605 
 (127,633)
 (110,701)
 267,649 

 2,721,399 
 (2,090,813)
 (8,971)
 9,856 
 2,665 
 (120,761)
 (81,950)
 431,425 

34(A)

 (13,232)
 (1,443)
 (42,788)
 3,315 
 18,237 
–
 4,750 
–
 (31,161)

–
 (92)
–
 421,885 
 321,270 
 (756,933)
–
 (82,318)
 (491)
 (96,679)
 139,809 
 207,137 
 11,418 

 358,364 

 (11,998)
 (15,807)
 (57,461)
 3,897 
 1,820 
 (20,820)
 2,311 
 100 
 (97,958)

 (300,000)
 (7,865)
 (4,666)
–
 281,591 
 (120,335)
 (2,870)
 (85,511)
 (1,070)
 (240,726)
 92,741 
 117,872 
 (3,476)

 207,137 

*  The proceeds relate to the sale of 34% of Trade Me Group Limited on 13 December 2011 and the further 15% divestment on 21 June 2012. 

This entity is still controlled by the Group.

**   Total cash dividends for the prior year totalled $85.5 million; this included $17.3 million made to stapled preference shareholders (SPS). 
Total SPS distributions during the prior period were $19.8 million, $2.5 million of which was classified in finance costs paid. This is 
consistent with the reclassification of the SPS from equity to debt during the previous period, prior to being repurchased on 29 April 2011. 

The above Consolidated Cash Flow Statement should be read in conjunction with the accompanying Notes.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

49

 
 
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T

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

51

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
noTes To THe financial sTaTeMenTs

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

01

suMMary of significant accounting policies

The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been 
consistently applied to all the years presented, unless otherwise stated. The financial report includes the consolidated entity consisting 
of Fairfax Media Limited and its controlled entities.

The financial report is for the period 27 June 2011 to 24 June 2012 (2011: the period 28 June 2010 to 26 June 2011). Reference in this 
report to ‘a year’ is to the period ended 24 June 2012 or 26 June 2011 respectively, unless otherwise stated.

(a) BaSiS OF PreParatiON

The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the 
Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting 
Standards Board. The financial report also complies with International Financial Reporting Standards (IFRS) as issued by the 
International Accounting Standards Board. 

The Group has prepared the financial statements in compliance with amendments to the Corporations Acts 2001 in June 2010 
which removed the requirement for the Group to lodge parent entity financial statements. Parent entity financial statements have 
been replaced by the specific parent entity disclosures in Note 37.

Historical cost convention
These financial statements have been prepared on a going concern basis and on the basis of historical cost principles except for 
derivative financial instruments and certain financial assets which are measured at fair value. The carrying values of recognised 
assets and liabilities that are hedged with fair value hedges are adjusted to record changes in the fair values attributable to the risks 
that are being hedged.

(B)  PriNCiPleS OF CONSOlidatiON

(i)   Controlled entities
The consolidated financial statements incorporate the assets and liabilities of the Company, Fairfax Media Limited, and its controlled 
entities. Fairfax Media Limited and its controlled entities together are referred to in this financial report as the Group or the 
consolidated entity. 

Controlled entities are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from 
the date that control ceases.

The acquisition method of accounting is used to account for the acquisition of controlled entities by the Group (refer to Note 1(C)).All 
inter-entity transactions, balances and unrealised gains on transactions between Group entities have been eliminated in full. 

Non-controlling interests in the earnings and equity of controlled entities are shown separately in the income statement, statement of 
comprehensive income, statement of changes in equity and balance sheet respectively. 

(ii)  Associates and joint ventures 
Investments in associates and joint ventures are accounted for in the consolidated financial statements using the equity method. 
Associates are entities over which the Group has significant influence and are neither subsidiaries or joint ventures. 

The Group’s share of its associates’ and joint ventures’ post-acquisition profits or losses are recognised in the income statement, 
and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are 
adjusted against the carrying amount of the investment. Dividends received from associates and joint ventures are recognised in the 
consolidated financial statements as a reduction in the carrying amount of the investment. 

When the Group’s share of losses in an associate or joint venture equals or exceeds its interest in the associate or joint venture, 
the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate or 
joint venture. 

Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the 
Group’s interest in associates and joint ventures. 

52

 
 
 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(C) aCCOUNtiNG FOr aCQUiSitiONS 

Business combinations are accounted for using the acquisition method. The consideration transferred in a business combination 
is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the acquirer, 
the liabilities incurred by the acquirer to former owners of the acquiree and the equity issued by the acquirer, the amount of any 
non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling interest in the 
acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are 
expensed as incurred and included in other expenses. 

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and 
designation in accordance with the contractual terms, economic conditions, the Group’s operating or accounting policies and other 
pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts of the acquiree. 

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in 
the acquiree is remeasured to fair value at the acquisition date through profit or loss. 

Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Subsequent 
changes to the fair value of the contingent consideration which is deemed to be an asset or liability is recognised in accordance 
with AASB 139 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified 
as equity, it will not be remeasured until it is finally settled within equity. 

(d) imPairmeNt OF aSSetS 

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or 
when annual impairment testing for an asset is required, the Group estimates the asset's recoverable amount. An asset's or cash 
generating units' (CGU) recoverable amount is the higher of it's fair value less costs to sell and value in use and is determined for 
an individual asset or group of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is 
considered impaired and is written down to its recoverable amount. 

In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate 
that reflects current market assessments of the time value of money and the risks specific to the asset. Where an asset does not 
generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset 
belongs. A cash generating unit is the grouping of assets at the lowest level for which there are separately identifiable cash flows. 

For assets excluding goodwill, an assessment is made at each reporting date whether there is any indication that previously recognised 
impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset's or CGU’s 
recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used 
to determine the asset's recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying 
amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of 
depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the income statement 
until the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.

(e)  iNtaNGiBleS 

(i)   Goodwill 
Goodwill represents the excess of cost of an acquisition over the fair value of the Group's share of the net identifiable assets of the 
acquired subsidiary/associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. 
Goodwill on acquisitions of associates is included in investments in associates. Goodwill is allocated to a cash generating unit for 
the purposes of impairment testing (refer Note 1(D)). Goodwill is not amortised. Instead, goodwill is tested for impairment annually, 
and at each reporting period if events or changes in circumstances indicate that it might be impaired, and is carried at cost less 
accumulated impairment losses. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group 
of CGUs) to which the goodwill relates. Impairment losses relating to goodwill cannot be reversed in future periods.

Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

(ii)  Other intangible assets 

  Mastheads and tradenames 

The majority of mastheads and tradenames have been assessed to have indefinite useful lives. Accordingly, they are not amortised, 
instead they are tested for impairment annually, and at each reporting period where there is an indication that the carrying value 
may be impaired, and are carried at cost less accumulated impairment losses. 

The Group's mastheads and tradenames operate in established markets with limited license conditions and are expected to 
continue to complement the Group's new media initiatives. On this basis, the directors have determined that the majority of 
mastheads and tradenames have indefinite lives as there is no foreseeable limit to the period over which the assets are expected 
to generate net cash inflows for the Group.

There is a small number of tradenames that have been assessed to have a definite useful life and are amortised using a straight-line 
method over twenty years.

Radio licences 
Radio licences, being commercial radio licences held by the consolidated entity under the provisions of the Broadcasting Services 
Act 1992, have been assessed to have indefinite useful lives. Accordingly, they are not amortised, instead they are tested for 
impairment annually, or whenever there is an indication that the carrying value may be impaired, and are carried at cost less 
accumulated impairment losses. 

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

53

 
 
 
 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

  Websites 

Internal and external costs directly incurred in the development of websites are capitalised and amortised using a straight-line 
method over two to four years. Capitalised website costs are reviewed annually for potential impairment. 

Computer software 
Acquired computer software licences are capitalised as an intangible as are internal and external costs directly incurred in the 
purchase or development of computer software, including subsequent upgrades and enhancements when it is probable that they will 
generate future economic benefits attributable to the consolidated entity. These costs are amortised using the straight-line method 
over three to five years. 

  Other 

Other intangibles, where applicable, are stated at cost less accumulated amortisation and impairment losses. The useful lives of 
the intangible assets are assessed to be either finite or indefinite and are examined on an annual basis and adjustments, where 
applicable, are made on a prospective basis. 

Other intangible assets created within the business are not capitalised and are expensed in the income statement in the period the 
expenditure is incurred. 

Intangible assets are tested for impairment annually (refer to Note 1(D)). 

(F)  FOreiGN CUrreNCY 

(i)   Currency of presentation 
All amounts are expressed in Australian dollars, which is the consolidated entity’s presentation currency. Items included in the 
financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which 
the entity operates (the functional currency). 

(ii)  transactions and balances 
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the 
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at 
reporting date exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income 
statement, with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a 
foreign operation and qualifying cash flow hedges, which are deferred in equity until disposal. Tax charges and credits attributable to 
exchange differences on borrowings are also recognised in equity. 

Translation differences on non-monetary items that are measured in terms of historical cost in a foreign currency are translated 
using the exchange rate as at the date of the initial transaction. Translation differences on non-monetary items, such as available 
for sale financial assets, are translated using the exchange rates at the date when the fair value was determined and included in the 
asset revaluation reserve in equity. 

(iii) Group entities 
The results and financial position of all the Group entities that have a functional currency different from the presentation currency are 
translated into the presentation currency as follows: 

• 

• 

• 

assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet; 

income and expenses for each income statement are translated at average exchange rates; and 

all resulting exchange differences are recognised as a separate component of equity. 

On consolidation, exchange differences arising from the translation of the borrowings designated as hedges of the net investment in 
foreign entities are taken directly to a separate component of equity, the net investment hedge reserve. 

On disposal of a foreign entity, or when borrowings that form part of the net investment are repaid, the deferred cumulative amount 
of the exchange differences in the net investment hedge reserve relating to that foreign operation is recognised in the income 
statement as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are 
treated as assets and liabilities of the foreign entity and translated at the closing rate. 

(G) reVeNUe reCOGNitiON 

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the amount of the 
revenue can be reliably measured. Revenue from advertising, circulation, subscription, radio broadcasting and printing is recognised 
when control of the right to be compensated has been obtained and the stage of completion of the contract can be reliably 
measured. For newspapers, magazines and other publications the right to be compensated is on the publication date. Revenue from 
the provision of online advertising on websites is recognised in the period the advertisements are placed or the impression occurs. 
Amounts disclosed as revenue are net of commissions, rebates, discounts, returns, trade allowances, duties and taxes paid. 

Dividends are recognised as revenue when the right to receive payment is established. This applies even if they are paid out of 
pre-acquisition profits. However, the investment may need to be tested for impairment as a consequence. Refer to Note 1(D). 

Interest is recognised as it accrues, taking into account the effective yield on the financial asset. 

54

 
 
 
 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(H) iNCOme tax aNd OtHer taxeS 

The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the national 
income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributed to temporary differences and 
to unused tax losses. Deferred tax assets and liabilities are recognised for temporary differences at the balance sheet date between 
the tax bases of assets and liabilities and their carrying amounts for 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 difference 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 reporting 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. 

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against 
current tax liabilities and the deferred tax assets and liabilities relate to the same taxable group and the same taxation authority. 

  Goods and Services tax (GSt) 

Revenues, expenses and assets are recognised net of the amount of GST except: 

(i) 

 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 

(ii)  receivables and payables are stated with the amount of GST included. 

This net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the 
balance sheet. 

Cashflows are included in the cash flow statement on a gross basis and the GST component of cashflows arising from investing and 
financing activities, which are recoverable from, or payable to the taxation authority are classified as operating cashflows. 

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. 

tax consolidation – Australia 
Fairfax Media Limited (the head entity) and its wholly-owned Australian entities have implemented the tax consolidation legislation 
as of 1 July 2003. The current and deferred tax amounts for each member in the tax consolidated group (except for the head entity) 
have been allocated based on stand-alone calculations that are modified to reflect membership of the tax consolidated group. 

On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement 
which, in the opinion of the directors, limits the joint and several liability of the wholly-owned entities in the case of a default of the 
head entity, Fairfax Media Limited. 

The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate Fairfax Media 
Limited for any current tax payable assumed and are compensated by the Company for any current tax receivable and deferred 
tax assets relating to unused tax losses or unused tax credits transferred to Fairfax Media Limited under the tax consolidation 
legislation. Assets or liabilities arising under tax funding arrangements with the tax consolidated entities are recognised as amounts 
receivable from or payable to other entities in the group. The amounts receivable/payable under the tax funding arrangements are 
due upon demand from the head entity. The head entity may also require payment of interim funding amounts to assist with its 
obligations to pay tax instalments. 

Taxation of financial arrangements (TOFA) 
Legislation is in place which changes the tax treatment of financial arrangements including the tax treatment of hedging 
transactions. The Group has assessed the potential impact of these changes on the Group’s tax position. No impact has been 
recognised and no adjustments have been made to the deferred tax and income tax balances at 24 June 2012 (2011: Nil). 

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

55

 
 
 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(i)  leaSeS 

(i)  finance leases 
Assets acquired under finance leases which result in the consolidated entity receiving substantially all the risks and rewards of 
ownership of the asset are capitalised at the lease’s inception at the lower of the fair value of the leased property or the estimated 
present value of the minimum lease payments. The corresponding finance lease obligation, net of finance charges, is included 
within interest bearing liabilities. The interest element is allocated to accounting periods during the lease term to reflect a constant 
rate of interest on the remaining balance of the liability for each accounting period. The leased asset is included in property, plant 
and equipment and is depreciated over the shorter of the estimated useful life of the asset or the lease term. 

(ii)  Operating leases 
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. 
Net rental payments, excluding contingent payments, are recognised as an expense in the income statement on a straight-line basis 
over the period of the lease. 

(iii)  Onerous property costs 
Property leases are considered to be an onerous contract if the unavoidable costs of meeting the obligations under the contract 
exceed the economic benefits expected to be received under it. Where a decision has been made to vacate the premises or there is 
excess capacity and the lease is considered to be onerous, a provision is recorded.

(J)  CaSH aNd CaSH eQUiValeNtS 

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions and other short term investments 
with original maturities of three months or less that are readily convertible to cash and subject to insignificant risk of changes in 
value. Bank overdrafts are shown within interest bearing liabilities in current liabilities on the balance sheet. 

(K) trade aNd OtHer reCeiVaBleS 

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost which is the original invoice 
amount less an allowance for any uncollectible amount. Collectability of trade receivables is reviewed on an ongoing basis and a 
provision for doubtful debts is made when there is objective evidence that the Group will not be able to collect the debts. 

Interest receivable on related party loans is recognised on an accruals basis. 

(l)  iNVeNtOrieS 

Inventories including work in progress are stated at the lower of cost and net realisable value. The methods used to determine cost 
for the main items of inventory are: 

• 

• 

raw materials (comprising mainly newsprint and paper on hand) are assessed at average cost and newsprint and paper in 
transit by specific identification cost; 

finished goods and work-in-progress are assessed as the cost of direct material and labour and a proportion of manufacturing 
overheads based on normal operating capacity; and 

• 

in the case of other inventories, cost is assigned by the weighted average cost method. 

(m) aVailaBle FOr Sale iNVeStmeNtS 

Available for sale financial assets are investments in listed equity securities in which the Group does not have significant influence 
or control. They are stated at fair value based on current quoted prices and unrealised gains and losses arising from changes in 
the fair value are recognised in the asset revaluation reserve. The assets are included in non-current assets unless management 
intends to dispose of the investment within twelve months of the balance sheet date. 

(N) iNVeStmeNtS aNd OtHer FiNaNCial aSSetS 

The Group classifies its investments in the following categories: financial assets at fair value through profit or loss, loans and 
receivables, held to maturity investments and available for sale financial assets. The classification depends on the purpose for which 
the investments were acquired. Management determines the classification of its investments at initial recognition and, in the case of 
assets classified as held to maturity, re-evaluates this designation at each reporting date. 

The consolidated entity classifies and measures its investments as follows: 

(i)   Financial assets at fair value through profit and loss 

 This category has two sub-categories: financial assets held for trading and those designated at fair value through profit and 
loss on initial recognition. The policy of management is to designate a financial asset at fair value through profit and loss if there 
exists the possibility it will be sold in the short term and the asset is subject to frequent changes in fair value. These assets 
are measured at fair value and realised and unrealised gains and losses arising from changes in fair value are included in the 
income statement in the period in which they arise. 

56

 
 
 
 
 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(ii)  Loans and receivables 

 Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active 
market and are included in receivables and other financial assets in the balance sheet and measured at amortised cost using 
the effective interest method. 

(iii)  Other financial assets 

 These assets are non-derivatives that are either designated or not classified in any of the other categories and measured at fair 
value. Any unrealised gains and losses arising from changes in fair value are included in equity, impairment losses are included 
in profit and loss. 

(iv)  Held to maturity investments 

 Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that 
the Group’s management has the positive intention and ability to hold to maturity. These assets are measured at amortised cost 
using the effective interest method. 

Financial assets other than derivatives are recognised at fair value or amortised cost in accordance with the requirements of AASB 
139 Financial Instruments: Recognition and Measurement. Where they are carried at fair value, gains and losses on remeasurement 
are recognised directly in equity unless the financial assets have been designated as being held at fair value through profit and loss, 
in which case the gains and losses are recognised directly in the income statement. 

All financial liabilities other than derivatives are carried at amortised cost. 

The Group uses derivative financial instruments such as forward foreign currency contracts, and foreign currency and interest rate 
swaps to hedge its risks associated with interest rate and foreign currency fluctuations. Derivatives, including those embedded 
in other contractual arrangements, are initially recognised at fair value on the date a derivative contract is entered into and are 
subsequently remeasured to their fair value. The method of recognising the resulting gain or loss depends on whether the derivative 
is designated as a hedging instrument, and if so, the nature of the item being hedged. 

The measurement of the fair value of forward exchange contracts is calculated by reference to current forward exchange rates for 
contracts with similar maturity profiles. The fair value of interest rate swap contracts is determined by reference to market values for 
similar instruments. 

Hedge accounting 
For the purposes of hedge accounting, hedges are classified as: 

•  Fair value hedges: hedges of the fair value of recognised assets or liabilities or a firm commitment; 

•  Cash flow hedges: hedges of highly probable forecast transactions; or 

•  Net investment hedges: hedges of the net investment in a foreign operation. 

fair value hedge 
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement, 
together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. Any gain or loss 
attributable to the hedged risk on remeasurement of the hedged item is adjusted against the carrying amount of the hedged item 
and recognised in the income statement within finance costs. Where the adjustment is to the carrying amount of a hedged interest 
bearing financial instrument, the adjustment is amortised to the income statement such that it is fully amortised by maturity. 

When the hedged firm commitment results in the recognition of an asset or a liability, then, at the time the asset or liability is 
recognised, the associated gains or losses that had previously been recognised in equity are included in the initial measurement of 
the acquisition cost or other carrying amount of the asset or liability. 

Cash flow hedge 
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in 
equity in the hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in the income statement 
within finance costs. Gains or losses that are recognised in equity are transferred to the income statement in the same year in which 
the hedged firm commitment affects the net profit and loss, for example when the future sale actually occurs. 

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies 
for hedge accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised in equity is retained in 
equity until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss 
recognised in equity is transferred to the income statement. 

net investment hedge 
Hedges of a net investment in a foreign operation are accounted for in a similar way to cash flow hedges. Gains or losses on the 
hedging instrument relating to the effective portion of the hedge are recognised directly in equity while any gains or losses relating 
to the ineffective portion are recognised in profit or loss. On disposal of the foreign operation, the cumulative value of such gains or 
losses recognised directly in equity is transferred to the income statement based on the amount calculated during the direct method 
of consolidation. 

Derivatives that do not qualify for hedge accounting 
For derivatives that do not qualify for hedge accounting, any gains or losses arising from changes in fair value are taken directly to 
the income statement. 

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

57

 
 
 
 
 
 
 
 
 
 
 
 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(O)  PrOPertY, PlaNt aNd eQUiPmeNt 

Property, plant and equipment is recorded at cost less accumulated depreciation and any accumulated impairment losses. Directly 
attributable costs arising from the acquisition or construction of fixed assets, including internal labour and interest, are also 
capitalised as part of the cost. 

Recoverable amount 
All items of property, plant and equipment are reviewed annually to ensure carrying values are not in excess of recoverable 
amounts. Recoverable amounts are based upon the present value of expected future cashflows. 

Depreciation and amortisation 
Land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocate their cost, net of their 
residual values, over their estimated useful lives, as follows: 

 Buildings  
 Printing presses  
 Other production equipment  
 Other equipment  
 Computer equipment 

up to 60 years 
up to 10 years 
up to 15 years 
up to 20 years 
up to 6 years

The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at each balance sheet date. An asset’s 
carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated 
recoverable amount. Gains and losses on disposals are determined by comparing the proceeds with carrying amount. These are 
included in the income statement. 

(P)  trade aNd OtHer PaYaBleS 

Liabilities for trade creditors and other amounts are carried at amortised cost which is the fair value of the consideration to be paid 
in the future for goods and services received. Loans payable to related parties are carried at amortised cost and interest payable is 
recognised on an accruals basis. 

(Q)  PrOViSiONS 

Provisions are recognised when the Group has a legal, equitable or constructive obligation to make a future sacrifice of economic 
benefits to others as a result of past transactions, or past events, it is probable that a future sacrifice of economic benefits 
will be required and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future 
operating losses. 

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present 
obligation at the balance sheet date using a discounted cash flow methodology. The risks specific to the provision are factored 
into the cash flows and as such a risk-free government bond rate relative to the expected life of the provision is used as a discount 
rate. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the time 
value of money and the risks specific to the liability. The increase in the provision resulting from the passage of time is recognised 
in finance costs. 

A provision for dividends is not recognised as a liability unless the dividends are declared, determined or publicly recommended on 
or before balance date. 

(r)  iNtereSt BeariNG liaBilitieS 

Subsequent to initial recognition at fair value, net of transaction costs incurred, interest bearing liabilities are measured at amortised 
cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income 
statement over the period of the borrowings using the effective interest method. 

Finance lease liabilities are determined in accordance with the requirements of AASB 117 Leases (refer to Note 1(I)). 

borrowing costs 
Borrowing costs include interest, amortisation of discounts or premiums relating to borrowings, amortisation or ancillary costs 
incurred in connection with arrangement of borrowings and foreign exchange losses net of hedged amounts on borrowings, 
including trade creditors and lease finance charges. 

Borrowing costs are expensed as incurred unless they relate to qualifying assets. Qualifying assets are assets which take more 
than 12 months to get ready for their intended use or sale. In these circumstances, borrowing costs are capitalised to the cost of 
the asset. Where funds are borrowed generally, borrowing costs are capitalised using a weighted average capitalisation rate. 

58

 
 
 
notes to the financial stateMents
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012
FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(S)  emPlOYee BeNeFitS 

(i)  Wages, salaries, annual leave and long service leave 
Current liabilities for wages and salaries, holiday pay, annual leave and long service leave are recognised in the provision for 
employee benefits and measured at the amounts expected to be paid when the liabilities are settled. 

The employee benefit liability expected to be settled within twelve months from balance date is recognised in current liabilities. The 
non-current provision relates to entitlements, including long service leave, which are expected to be payable after twelve months 
from balance date and are measured as the present value of expected future payments to be made in respect of services, employee 
departures and periods of service. Expected future payments are discounted using market yields at balance date on national 
government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. 

Employee benefit on-costs are recognised and included in employee benefit liabilities and costs when the employee benefits to 
which they relate are recognised as liabilities. 

(ii)  Share-based payment transactions 
Share-based compensation benefits can be provided to employees in the form of shares. 

The cost of share-based payments is recognised over the period in which the performance and/or service conditions are fulfilled (the 
vesting period), ending on the date on which the relevant employees become fully entitled to the award (the vesting date). 

At each reporting date until vesting, the cumulative charge to the income statement is the product of (i) the grant date fair value of 
the award; (ii) the current best estimate of the number of awards that will vest, taking into account such factors as the likelihood of 
employee turnover during the vesting period and the likelihood of non-market performance conditions being met; and (iii) the expired 
portion of the vesting period. 

The market value of shares issued to employees for no cash consideration under the Long Term Incentive Share Plan is recognised 
as an employee benefits expense over the vesting period (refer to Note 30). 

Shares purchased, but which have not yet vested to the employee as at reporting date are offset against contributed equity of the 
Group (refer to Note 1(T)). 

(iii)  Defined benefit superannuation plans 
Fairfax Media Limited and certain controlled entities participate in a number of superannuation plans. 

An asset or liability in respect of defined benefit superannuation plans is recognised in the balance sheet, and is measured as 
the present value of the defined benefit obligation at the reporting date plus unrecognised actuarial gains (less unrecognised 
actuarial losses), less the fair value of the superannuation fund’s assets at that date and any unrecognised past service cost. The 
present value of the defined benefit obligation is based on expected future payments which arise from membership of the fund to 
the balance date, calculated annually by independent actuaries using the projected unit credit method. Consideration is given to 
expected future wage and salary levels, experience of employee departures and periods of service. Actuarial gains and losses are 
recognised in retained earnings in the periods in which they arise. 

Contributions made by the Group to defined contribution superannuation funds are charged to the income statement in the period 
the employee’s service is provided. 

(iv)  Termination benefits 
Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts 
voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed 
to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or 
providing termination benefits as a result of an offer made to encourage voluntary redundancy. 

(v)  bonus plans 
The Group recognises a provision and an expense for bonuses where contractually obliged or where there is a past practice that 
has created a constructive obligation. 

(t) CONtriBUted eQUitY 

Ordinary shares are classified as equity. Stapled preference shares were classified as equity (refer to Note 21(C)). 

Incremental costs directly attributable to the issue of new shares or options are recognised in equity as a reduction from the 
proceeds. Incremental costs directly attributable to the issue of new shares for the acquisition of a business are not included in the 
cost of the acquisition as part of the purchase consideration. 

If the Group reacquires its own equity instruments, e.g. under the Long Term Incentive Plan, those instruments are deducted 
from equity. 

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

59

 
 
 
 
 
 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

Debentures 
Debentures have been included as equity as the rights attaching to them are in all material respects comparable to those attaching 
to the ordinary shares. Such debentures are unsecured non-voting securities that have interest entitlements equivalent to the 
dividend entitlements attaching to the ordinary voting shares and rank equally with such shares on any liquidation or winding up. 
These interest entitlements are treated as dividends. 

The debentures are convertible into shares on a one-for-one basis at the option of the holder provided that conversion will not result 
in a breach of any of the following: 

(i)  any provision of the Foreign Acquisitions and Takeovers Act 1975; 

(ii)     any undertaking given by the Company to the Foreign Investment Review Board or at the request of the Foreign Investment 

Review Board from time to time; or 

(iii)  any other applicable law including, without limitation the Broadcasting Act 1942. 

(U) earNiNGS Per SHare 

basic earnings per share 
Basic earnings per share (EPS) is calculated by dividing the net profit attributable to members, adjusted to exclude costs of 
servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial 
year, adjusted for any bonus elements in ordinary shares issued during the financial year. 

Diluted earnings per share 
Diluted earnings per share is calculated by dividing the basic EPS earnings adjusted by the after tax effect of interest and other 
financing costs associated with dilutive potential ordinary shares and the effect on revenues and expenses of conversion to ordinary 
shares associated with dilutive potential ordinary shares by the weighted average number of ordinary shares and dilutive potential 
ordinary shares adjusted for any bonus issue. 

(V) SeGmeNt rePOrtiNG 

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur 
expenses (including revenue and expense relating to transactions with other components of the same entity), whose operating results 
are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment 
and assess its performance and for which discrete financial information is available. Management will also consider other factors in 
determining operating segments such as the existence of a line manager and the level of segment information presented to the 
Board of Directors. 

Operating segments have been identified based on the information provided to the chief operating decision makers, being the Board 
of Directors, Chief Executive Officer and Chief Financial Officer, and are disclosed in Note 36. 

The group aggregates two or more operating segments when they have similar economic characteristics, and the segments are 
similar in each of the following respects: 

•  Nature of the products and services; 

•  Nature of the production processes; 

•  Type or class of customer for the products and services; 

•  Methods used to distribute the products or provide the services; and if applicable 

•  Nature of the regulatory environment. 

Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately. However, an operating 
segment that does not meet the quantitative criteria is still reported separately where information about the segment would be useful 
to users of the financial statements. 

Information about other business activities and operating segments that are below the quantitative criteria are combined and 
disclosed in a separate category for “Other segments”. 

(W) SiGNiFiCaNt aCCOUNtiNG eStimateS aNd JUdGemeNtS 

The carrying amounts of certain assets and liabilities are determined based on estimates and assumptions of future events. The key 
estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets 
and liabilities within the next financial year are: 

(i)  Impairment of goodwill and intangibles with indefinite useful lives 
The Group tests annually or at each reporting period where there is an indication of impairment, whether goodwill and intangible assets 
with indefinite useful lives are impaired. This requires an estimation of the recoverable amount of the cash generating units (CGU), using 
a value in use discounted cash flow methodology, to which the goodwill and intangibles with indefinite useful lives are allocated. 

The assumptions used in this estimation of recoverable amount and the carrying amount of goodwill and intangibles with indefinite 
useful lives, along with a sensitivity analysis, are detailed in Note 13.

60

 
 
 
 
 
notes to the financial stateMents
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012
FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(ii)  income taxes 

The Group is subject to income taxes in Australia and jurisdictions where it has foreign operations. Significant judgement is required 
in determining the worldwide provision for income taxes. There are many transactions and calculations undertaken during the 
ordinary course of business for which the ultimate tax determination is uncertain. 

(iii) Share-based payment transactions 
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of equity instruments 
at the date at which they are granted. The fair value is determined by an external valuer using a Monte Carlo model, using the 
assumptions detailed in Note 30. 

(iv) Defined benefit plans 
Various actuarial assumptions are required when determining the Group’s superannuation plan obligations. These assumptions and 
the related carrying amounts are discussed in Note 20. 

(v)  Redundancy provision 
A provision for redundancy has been disclosed in Note 19 as a result of the Group having a constructive obligation and a detailed 
formal plan for restructuring. 

(x) rOUNdiNG OF amOUNtS 

The consolidated entity is of a kind referred to in Class Order 98/0100, as amended by Class Order 04/667, issued by the Australian 
Securities and Investments Commission relating to the “rounding off” of amounts in the financial report. Amounts in this report have 
been rounded to the nearest thousand dollars in accordance with that Class Order, unless otherwise indicated. 

(Y) NeW aCCOUNtiNG StaNdardS aNd UiG iNterPretatiONS 

Certain new accounting standards and interpretations have been published that are not mandatory for 24 June 2012 reporting 
periods. The Group’s assessment of the impact of these new standards and interpretations is set out below: 

RefeRenCe

titLe

SuMMARy

AASB 2011-9

Amendments to Australian 
Accounting Standards 
– Presentation of Other 
Comprehensive Income

[AASB 1, 5, 7, 101, 112, 
120, 121, 132, 133, 134, 
1039 & 1049]

This standard requires entities to group items 
presented in other comprehensive income on 
the basis of whether they might be reclassified 
subsequently to profit or loss and those that 
will not.

APPLiCAtiOn 
DAte Of 
StAnDARD*

1 July 2012

iMPACt On GROuP  
finAnCiAL RePORt

No major impact on 
the Group.

APPLiCAtiOn 
DAte fOR 
GROuP*

25 June 2012

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

61

 
 
 
 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

APPLiCAtiOn 
DAte Of 
StAnDARD*

1 January 
2013**

iMPACt On GROuP  
finAnCiAL RePORt

The Group has not 
yet determined the 
extent of the impact 
of the amendments.

APPLiCAtiOn 
DAte fOR 
GROuP*

1 July 2013

1 January 
2013

1 July 2013

The Group has not 
yet determined the 
extent of the impact 
of the amendments.

RefeRenCe

titLe

SuMMARy

AASB 9 includes requirements for the 
classification and measurement of financial 
assets. It was further amended by AASB 
2010-7 to reflect amendments to the 
accounting for financial liabilities.

These requirements improve and simplify the 
approach for classification and measurement 
of financial assets compared with the 
requirements of AASB 139.

The main changes are described below.

(a)  Financial assets that are debt instruments 
will be classified based on (1) the objective 
of the entity’s business model for managing 
the financial assets; (2) the characteristics 
of the contractual cashflows.

(b)  Allows an irrevocable election on initial 

recognition to present gains and losses on 
investments in equity instruments that are 
not held for trading in other comprehensive 
income. Dividends in respect of these 
investments that are a return on investment 
can be recognised in profit or loss and 
there is no impairment or recycling on 
disposal of the instrument.

(c)  Financial assets can be designated and 
measured at fair value through profit 
or loss at initial recognition if doing so 
eliminates or significantly reduces a 
measurement or recognition inconsistency 
that would arise from measuring assets 
or liabilities, or recognising the gains and 
losses on them, on different bases.

(d)  Where the fair value option is used for 

financial liabilities the change in fair value 
is to be accounted for as follows: 

–  The change attributable to changes in credit 
risk are presented in other comprehensive 
income (OCI) 

–  The remaining change is presented in profit 

or loss.

Consequential amendments were also made 
to other standards as a result of AASB 9, 
introduced by AASB 2009-11 and superseded 
by AASB 2010-7 and 2010-10.

AASB 10 establishes a new control model that 
applies to all entities. It replaces parts of AASB 
127 Consolidated and Separate Financial 
Statements dealing with the accounting for 
consolidated financial statements and UIG-112 
Consolidation – Special Purpose Entities.

The new control model broadens the 
situations when an entity is considered to 
be controlled by another entity and includes 
new guidance for applying the model to 
specific situations, including when acting as 
a manager may give control, the impact of 
potential voting rights and when holding less 
than a majority voting rights may give control. 
This is likely to lead to more entities being 
consolidated into the group.

Consequential amendments were also made 
to other standards via AASB 2011-7.

AASB 9

Financial Instruments

AASB 10

Consolidated Financial 
Statements

62

notes to the financial stateMents
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

APPLiCAtiOn 
DAte Of 
StAnDARD*

1 January 
2013

iMPACt On GROuP  
finAnCiAL RePORt

The Group has not 
yet determined the 
extent of the impact 
of the amendments.

APPLiCAtiOn 
DAte fOR 
GROuP*

1 July 2013

1 January 
2013

1 July 2013

The Group has not 
yet determined the 
extent of the impact 
of the amendments.

1 January 
2013

1 July 2013

The Group has not 
yet determined the 
extent of the impact 
of the amendments.

RefeRenCe

titLe

SuMMARy

AASB 11

Joint Arrangements

AASB 12

Disclosure of Interests in 
Other Entities

AASB 13

Fair Value Measurement

AASB 11 replaces AASB 131 Interests in 
Joint Ventures and UIG-113 Jointly-controlled 
Entities – Non-monetary Contributions by 
Ventures. AASB 11 uses the principle of 
control in AASB 10 to define joint control, 
and therefore the determination of whether 
joint control exists may change. In addition 
it removes the option to account for jointly 
controlled entities (JCEs) using proportionate 
consolidation. Instead, accounting for a joint 
arrangement is dependent on the nature of 
the rights and obligations arising from the 
arrangement. Joint operations that give the 
venturers a right to the underlying assets 
and obligations themselves is accounted 
for by recognising the share of those assets 
and obligations. Joint ventures that give 
the venturers a right to the net assets is 
accounted for using the equity method. This 
may result in a change in the accounting for 
the joint arrangements held by the group.

Consequential amendments were also made 
to other standards via AASB 2011-7 and 
amendments to AASB 128.

AASB 12 includes all disclosures relating 
to an entity’s interests in subsidiaries, joint 
arrangements, associates and structured 
entities. New disclosures have been 
introduced about the judgements made by 
management to determine whether control 
exists, and to require summarised information 
about joint arrangements, associates and 
structured entities and subsidiaries with non-
controlling interests.

AASB 13 establishes a single source of 
guidance for determining the fair value of 
assets and liabilities. AASB 13 does not 
change when an entity is required to use 
fair value, but rather, provides guidance on 
how to determine fair value when fair value 
is required or permitted. Application of this 
definition may result in different fair values 
being determined for the relevant assets.

AASB 13 also expands the disclosure 
requirements for all assets or liabilities carried 
at fair value. This includes information about 
the assumptions made and the qualitative 
impact of those assumptions on the fair 
value determined.

Consequential amendments were also made 
to other standards via AASB 2011-12.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

63

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

APPLiCAtiOn 
DAte Of 
StAnDARD*

1 January 
2013

iMPACt On GROuP  
finAnCiAL RePORt

The Group has not 
yet determined the 
extent of the impact 
of the amendments.

APPLiCAtiOn 
DAte fOR 
GROuP*

1 July 2013

1 January 
2013

1 July 2013

The Group has not 
yet determined the 
extent of the impact 
of the amendments.

RefeRenCe

titLe

SuMMARy

AASB 119

Employee Benefits

Annual Improvements to 
IFRSs 2009–2011 Cycle

Annual 
Improvements 
2009–2011 
Cycle***

The main change introduced by this standard 
is to revise the accounting for defined 
benefit plans. The amendment removes 
the options for accounting for the liability, 
and requires that the liabilities arising from 
such plans is recognized in full with actuarial 
gains and losses being recognized in other 
comprehensive income. It also revised 
the method of calculating the return on 
plan assets. 

The revised standard changes the definition of 
short-term employee benefits. The distinction 
between short-term and other long-term 
employee benefits is now based on whether 
the benefits are expected to be settled wholly 
within 12 months after the reporting date.

Consequential amendments were also made 
to other standards via AASB 2011-10.

This standard sets out amendments to 
International Financial Reporting Standards 
(IFRSs) and the related bases for conclusions 
and guidance made during the International 
Accounting Standards Board’s Annual 
Improvements process. These amendments 
have not yet been adopted by the AASB.

The following items are addressed by this 
standard:

IFRS 1 First-time Adoption of International 
Financial Reporting Standards 
• Repeated application of IFRS 1 
• Borrowing costs

IAS 1 Presentation of Financial Statements 
•  Clarification of the requirements for 

comparative information

IAS 16 Property, Plant and Equipment  
• Classification of servicing equipment

IAS 32 Financial Instruments: Presentation 
•  Tax effect of distribution to holders of equity 

instruments

IAS 34 Interim Financial Reporting 
•  Interim financial reporting and segment 
information for total assets and liabilities

*  Designates the beginning of the applicable annual reporting period unless otherwise stated.
**   AASB ED 215 Mandatory effective date of IFRS 9 proposes to defer the mandatory effective date of AASB 9 to annual periods beginning 
on or after 1 January 2015, with early application permitted. At the time of preparation, finalisation of ED 215 is still pending by the AASB. 
However, the IASB has deferred the mandatory effective date of IFRS 9 to annual periods beginning on or after 1 January 2015, with early 
application permitted.

***  These IFRS amendments have not yet been adopted by the AASB. In order to claim compliance with IFRS, these amendments should be 

noted in the financial statements.

64

notes to the financial stateMents
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

02 revenues

(a) reVeNUe FrOm OPeratiONS
Total revenue from sale of goods
Total revenue from services

total revenue from operations

(B)  OtHer reVeNUe aNd iNCOme
Interest income
Dividend revenue
Foreign exchange gains 
Gains on sale of property, plant and equipment
Gain on revaluation of investment in associate
Gain on derivative at fair value through profit and loss
Other

total other revenue and income

total revenue and income

 24 June 2012
$’000

 26 June 2011
$’000

 453,931 
 1,856,988 

 487,787 
 1,975,626 

 2,310,919 

 2,463,413 

 11,122 
 142 
 8,767
 135 
 2,541 
 3,900
 1,662 

28,269

 10,967 
 92 
–
 1,251 
–
–
 785 

 13,095 

 2,339,188 

 2,476,508

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

65

 
 
 
 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

03

expenses

(a)  exPeNSeS BeFOre imPairmeNt, dePreCiatiON,  

amOrtiSatiON aNd FiNaNCe COStS

Staff costs excluding staff redundancy costs
Redundancy costs
Newsprint and paper
Distribution costs
Production costs
Promotion and advertising costs
Rent and outgoings
Repairs and maintenance
Communication costs
Maintenance and other computer costs
Fringe benefits tax, travel and entertainment
Other

 24 June 2012
$’000

 26 June 2011
$’000

 857,950 
 199,547 
 209,988 
 138,320 
 183,368 
 111,565 
 60,717 
 29,844 
 22,469 
 26,597 
 26,213 
 156,780 

 862,561 
 36,752 
 243,942 
 137,933 
 188,058 
 119,327 
 58,255 
 29,459 
 22,167 
 26,777 
 25,138 
 144,168 

Total expenses before impairment, depreciation, amortisation and finance costs

 2,023,358 

 1,894,537 

(B) dePreCiatiON aNd amOrtiSatiON
Depreciation of freehold property
Depreciation of plant and equipment
Amortisation of leasehold buildings
Amortisation of tradenames
Amortisation of software
Amortisation of customer relationships

total depreciation and amortisation 

(C) FiNaNCe COStS
External corporations/persons
Finance lease
Hedge ineffectiveness

Total finance costs

(d) detailed exPeNSe diSClOSUreS
Operating lease rental expense
Defined contribution fund expense
Share-based payment expense
Net foreign exchange loss 

 5,109 
 67,432 
 4,287 
 28 
 28,268 
 2,379 

 5,094 
 74,828 
 3,677 
 13 
 27,842 
 2,897 

 107,503 

 114,351 

 121,622 
 3,896 
 (2,661)

 122,857 

 41,213 
 57,689 
 1,068 
–

 121,057 
 4,647 
 (6,695)

 119,009 

 39,019 
 57,885 
 2,675 
 631 

66

notes to the financial stateMents
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

04

significant iteMs

The loss after tax from operations includes the following items where disclosure is relevant in explaining the financial performance of the 
consolidated entity.

impairment of intangibles, property, plant and equipment, and investments – Comprising:
Impairment of mastheads, goodwill, customer relationships and software
Impairment of property, plant and equipment, and investments
Income tax benefit
impairment of intangibles, property, plant and equipment, and investments, net of tax 

Restructuring and redundancy – Comprising:
Restructuring and redundancy charges
Income tax benefit
Restructuring and redundancy, net of tax

note

 24 June 2012
$'000

 26 June 2011
$'000

(A)
(B)

(C)

 (2,758,061)
 (106,120)
 66,689 
 (2,797,492)

 (649,869)
 (4,038)
 3,188 
 (650,719)

 (200,447)
 60,118 
 (140,329)

 (34,222)
 10,267 
 (23,955)

Net significant items after income tax expense

 (2,937,821)

 (674,674)

(A)   The value in use calculations performed as part of the annual impairment test has resulted in an impairment charge of $2,758 million 

(2011: $650 million). The impairment is a consequence of:

the deterioration of the Group’s results in the second half of the 2012 financial year;

the lower than budgeted year to date results in financial year 2013;

the increasing pace of structural change in the publishing industry; and

higher discount rates across the industry.

• 

• 

• 

• 

Refer to Note 13 for the method and assumptions used in the value in use calculations.

(B)   As part of the Fairfax of the Future restructuring program, the company has announced it will close the Chullora and Tullamarine 

print operations by June 2014. As a result, an impairment charge has been recognised where the carrying amount of the print assets 
was in excess of recoverable amount.

(C)   Restructuring and redundancy charges associated with the Fairfax of the Future program have been recognised in the current 

period. Refer to Note 1(W)(v).

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

67

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

05

incoMe tax expense

CONSOlidated iNCOme StatemeNt

Income tax expense is reconciled to prima facie income tax payable as follows:
Net loss before income tax expense

Prima facie income tax at 30% (2011: 30%)
Tax effect of differences:
  Overseas tax rate and accounting differentials
  Share of net profits of associates and joint ventures
  Capital gains not taxable
  Non assessable dividends
  Over provision in respect of current tax in prior financial years
  Under provision in respect of deferred tax in prior financial years
  Temporary differences not recognised on intangible and other asset write-offs
  Non-deductible items

Impact of tax consolidation

  Other

Income tax (benefit)/expense
Current income tax expense
Deferred income tax (benefit)/expense
Over provision in respect of current tax in prior financial years

Income tax (benefit)/expense in the income statement

CONSOlidated StatemeNt OF COmPreHeNSiVe iNCOme

Deferred tax related to items charged or credited directly to other comprehensive income  
during the year:

Unrealised (loss)/gain on available for sale financial assets
Net gain/(loss) on actuarial gains and losses
Net gain on revaluation of cash flow hedges
Net gain/(loss) on hedge of net investment
Net gain/(loss) on exchange differences on translation of foreign operations

income tax on items of other comprehensive income

 24 June 2012
$’000

 26 June 2011
$’000

 (2,777,844)

 (303,078)

 (833,353)

 (90,923)

 4,289 
 (442)
 (552)
 (11)
 3,420 
 (5,475)
 780,269 
 2,861 
 (2,612)
 (435)

 (52,041)

 61,003 
 (116,464)
 3,420 

 (52,041)

 (14,502)
 (363)
 – 
 (11)
 6,120 
 (8,828)
 192,983 
 2,434 
 – 
 (321)

 86,589 

 69,578 
 10,891 
 6,120 

 86,589 

 24 June 2012
$’000

 26 June 2011
$’000

 (90)
 1,117 
 3,561 
 1,070 
 4 

 5,662 

 279 
 (418)
 4,168 
 (3,944)
 (872)

 (787)

68

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

06 dividends paid and proposed 

(a) OrdiNarY SHareS
Interim 2012 dividend: 100% franked 2.0 cents  
– paid 21 March 2012
(2011: 100% franked dividend 1.5 cents  
– paid 21 March 2011)
Final 2011 dividend: 100% franked 1.5 cents  
– paid 27 September 2011
(2010: 100% franked dividend 1.4 cents  
– paid 23 September 2010)

total dividends paid – ordinary shares

(B)  StaPled PreFereNCe SHareS (SPS)
SPS dividend:
2011: $3.2334 per share – paid 29 April 2011*
2011: $3.2515 per share – paid 1 November 2010

total dividends paid – SPS

total dividends paid

consolidated
 24 June 2012
$’000

consolidated
 26 June 2011
$’000

coMpany
 24 June 2012
$’000

coMpany
 26 June 2011
$’000

 47,039 

 35,279 

 47,039 

 35,279 

 35,279 

 82,318 

 32,927 

 68,206 

 35,279 

 82,318 

 32,927 

 68,206 

–
–

–

 82,318 

 7,355 
 9,950 

 17,305 

 85,511 

–
–

–

–
–

–

 82,318 

 68,206 

* 

 The final SPS distribution totalled $9.9 million, $2.5 million of which was classified as finance costs. This is consistent with the 
reclassification of the SPS from equity to debt during the previous period, prior to being repurchased on 29 April 2011.

(C)  diVideNdS PrOPOSed aNd NOt reCOGNiSed aS a liaBilitY

Since balance date the directors have declared a dividend of 1 cent per fully paid ordinary share fully franked at the corporate tax rate of 
30%. The aggregate amount of the dividend to be paid on 21 September 2012 out of profits but not recognised as a liability at the end of 
the year is expected to be $23.5 million.

(d) FraNKed diVideNdS
Franking account balance as at balance date at 30% (2011: 30%)
Reduction in franking credits that will arise from the receipt of income tax receivable balances  
as at the end of the financial year
Franking credits that will arise from the payment of income tax payable balances  
as at the end of the financial year

Total franking credits available for subsequent financial years based on a tax rate of 30%

73,404

coMpany
2012
$’000

coMpany
2011
$’000

 74,182 

 30,936 

(778)

–

–

 39,532 

 70,468 

On a tax-paid basis, the Company’s franking account balance is approximately $74.2 million (2011: $30.9 million). The impact on the 
franking account of the dividend declared by the directors since balance date will be a reduction in the franking account of approximately 
$10.1 million.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

69

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

07 receivaBles

Current
Trade debtors*
Provision for doubtful debts

Loans and deposits
Prepayments
Other

total current receivables

non-current
Loans and deposits
Other

total non-current receivables

 24 June 2012
$'000

 26 June 2011
$'000

 316,940 
 (10,059)
 306,881 
 52 
 12,763 
 14,770 

 351,406 
 (10,061)
 341,345 
 111 
 14,742 
 15,544 

 334,466 

 371,742 

 1,539 
 940 

 2,479 

 1,876 
 392 

 2,268 

*  Trade debtors are non-interest bearing and are generally on 7 to 45 day terms.

iMPAiReD tRADe DebtORS
As at 24 June 2012, trade debtors of the Group with a nominal value of $10.1 million (2011: $10.1 million) were impaired and provided 
for. No individual amount within the provision for doubtful debts is material. Refer to Note 35(C) for the factors considered in determining 
whether trade debtors are impaired.

As at 24 June 2012, an analysis of trade debtors that are not considered impaired is as follows:

Not past due
Past due 0 – 30 days
Past due 31 – 60 days
Past 60 days

2012
$'000

 224,013 
 64,103 
 11,633 
 7,132 

2011
$'000

 243,145 
 63,865 
 17,533 
 16,802 

 306,881 

 341,345 

Based on the credit history of these receivables, it is expected these amounts will be received. All other receivables do not contain 
impaired assets and are not past due.

Movements in the provision for doubtful debts are as follows:

Balance at the beginning of the financial year
Additional provisions
Acquisition of controlled entities
Disposal of controlled entities
Utilised
Exchange differences

Balance at the end of the financial year

2012
$'000

 10,061 
 3,576 
 5 
 (318)
 (3,290)
 25 

 10,059 

2011
$'000

 9,627 
 3,318 
–
–
 (2,791)
 (93)

 10,061

70

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

08

inventories

Raw materials and stores – at net realisable value
Finished goods – at cost
Work in progress – at cost

total inventories

 24 June 2012
$'000

 26 June 2011
$'000

 31,815 
 4,242 
 565 

 36,622 

 34,412 
 3,844 
 711 

 38,967 

During the year, newsprint and paper expense (excluding cartage) of $208.6 million (2011: $242.4 million) was recognised.

09 assets and liaBilities held for sale

(a) aSSetS Held FOr Sale
Freehold land and buildings
Plant and equipment
Fairfax Community Network Limited disposal group

Intangible assets

  Other assets

total assets held for sale

(B)  liaBilitieS direCtlY aSSOCiated WitH Held FOr Sale aSSetS
Fairfax Community Network Limited disposal group
  Provisions
  Other liabilities

total liabilities directly associated with held for sale assets

 24 June 2012
$'000

 26 June 2011
$'000

 8,949 
 514 

 15,262 
 949 

 25,674 

 3,918 
 1,038 

 4,956 

 4,468 
 507 

–
–

 4,975 

–
–

–

freehold land and buildings, plant and equipment
Assets held for sale comprise properties, plant and equipment in Australia and New Zealand that are being actively marketed and for 
which the sale is highly probable. During the current year, two of these properties were sold.

Prior to being transferred to held for sale, the properties, plant and equipment were remeasured at the lower of carrying amount and fair 
value less costs to sell. In the prior year, a $1.4 million impairment charge was recognised in the income statement against the assets.

fairfax Community network Limited disposal group
On 23 December 2011, an agreement for the sale of Fairfax Community Network Limited was signed with the sale being completed 
subsequent to the reporting date. As a result, the assets and liabilities of this company have been transferred to held for sale. 

On remeasure of the disposal group at the lower of carrying amount and fair value less cost to sell, an impairment of $20.0 million was 
recorded against mastheads.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

71

 
 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

10 other financial assets

Current
Loan receivable

Total current other financial assets

non-current
Shares in unlisted entities – at fair value
Loan receivable

Total non-current other financial assets

 24 June 2012
$'000

 26 June 2011
$'000

 3,914 

 3,914 

 3,686 

 3,686 

 67 
 10,701 

 10,768 

 73 
 14,760 

 14,833 

The loan receivable has quarterly repayments, consisting of both interest and principal, and matures on 30 September 2015.

72

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

11

investMents accounted for using the equity Method

Shares in associates
Shares in joint ventures
total investments accounted for using the equity method

(a) iNtereStS iN aSSOCiateS

naMe of coMpany

principal activity

Australian Associated Press Pty Ltd

Autobase Limited*

News agency business and  
information service
E-commerce: online vehicle dealer  
automotive website

Digital Radio Broadcasting Melbourne Pty Ltd Digital audio broadcasting
Digital audio broadcasting
Digital Radio Broadcasting Perth Pty Ltd
Digital Radio Broadcasting Brisbane Pty Ltd Digital audio broadcasting
Digital audio broadcasting
Digital Radio Broadcasting Sydney Pty Ltd
Environmental promotion
Earth Hour Limited
Rental of a transmission facility
Homebush Transmitters Pty Ltd
Property ownership
Newspaper House Limited
News agency business and financial 
New Zealand Press Association Ltd
information service
Provider of e-recruitment software 
to corporations
Rental of a transmission facility
Newspaper publishing
Provider of EDI software
Provider of EDI software

Perth FM Facilities Pty Ltd
Times Newspapers Limited
Xchange IT Software Pty Ltd
Xchange IT Newsagents Pty Ltd

NGA.net Pty Ltd

note

(A)(i)
(B)(i)

 24 June 2012
$'000

 26 June 2011
$'000

 12,671 
 18,140 
 30,811 

 14,449 
 18,873 
 33,322 

place of 
incorporation 

 oWnership interest 

 24 June 2012  26 June 2011

Australia

47.0%

47.0%

New Zealand

–

25.4%

Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
New Zealand

18.0%
33.4%
25.0%
11.3%
33.3%
50.0%
45.5%
49.2%

18.0%
33.4%
25.0%
11.3%
33.3%
50.0%
45.5%
49.2%

Australia

24.6%

28.0%

Australia
New Zealand
Australia
Australia

33.3%
49.9%
33.3%
25.0%

33.3%
49.9%
33.3%
25.0%

* 

 The business assets of Autobase Limited were acquired by the Group on 30 April 2012 (refer Note 28(A)). This entity was then placed into 
liquidation on 1 May 2012.

(i) Carrying amount of investment in associates
Balance at the beginning of the financial year
Share of associates' net (loss)/profit after income tax expense
Dividends received/receivable from associates
Investments in associates disposed during the year
Impairment of investment in associate
Exchange differences

Balance at end of the financial year

(ii) Share of associates' profits
Revenue

(Loss)/profit before income tax expense
Income tax benefit/(expense)

Net (loss)/profit after income tax expense
(iii) Share of associates' assets and liabilities
Current assets
Non-current assets

total assets
Current liabilities
Non-current liabilities

total liabilities

 24 June 2012
$'000

 26 June 2011
$'000

 14,449 
 (565)
 (393)
 (518)
 (292)
 (10)

 12,671 

 14,102 
 770 
 (373)
–
–
 (50)

 14,449 

 45,425 

 39,541 

 (593)
 28 

 (565)

 15,136 
 24,158 

 39,294 

 11,057 
 4,315 

 15,372 

 930 
 (160)

 770 

 15,641 
 23,464 

 39,105 

 10,622 
 3,216 

 13,838 

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

73

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(B)  iNtereStS iN JOiNt VeNtUreS

naMe of coMpany

principal activity

place of 
incorporation 

 oWnership interest 

 24 June 2012  26 June 2011

Organisation of canine industry exhibitions Australia
Dog Lovers Show Pty Limited*
Organisation of agricultural events
Farm Progress/VX LLC** 
Letterbox distribution of newspapers
Fermax Distribution Company Pty Ltd
Gilgandra Newspapers Pty Ltd
Newspaper publishing and printing
Gippsland Regional Publications Partnership Newspaper publishing and printing
Newspaper publishing and printing
Torch Publishing Company Pty Ltd 

USA
Australia
Australia
Australia
Australia

50.0%
50.0%
50.0%
50.0%
50.0%
50.0%

–
–
50.0%
50.0%
50.0%
50.0%

*  Company was incorporated and investment was acquired on 12 June 2012.
**  Investment was acquired on 27 September 2011.

(i) Carrying amount of investment in joint ventures
Balance at the beginning of the financial year
Share of joint ventures' net profit after income tax expense
Interests in joint venture acquired during the year
Dividends received/receivable from joint venture
Investment in joint venture transferred to a controlled entity

Balance at end of the financial year

(ii) Share of joint ventures' profits
Revenues
Expenses
Profit before income tax expense
Income tax expense

Net profit after income tax expense

(iii) Share of joint ventures' assets and liabilities
Current assets
Non-current assets

total assets
Current liabilities
Non-current liabilities

total liabilities

(C) SHare OF Net PrOFitS OF aSSOCiateS aNd JOiNt VeNtUreS
Profit before income tax expense
Income tax expense

Net profit after income tax expense

12 availaBle for sale investMents

Listed equity securities – at fair value

total available for sale investments

 24 June 2012
$'000

 26 June 2011
$'000

 18,873 
 2,311 
 26 
 (3,070)
–

 18,140 

 11,274 
 (8,812)
 2,462 
 (151)

 2,311 

 4,107 
 16,990 

 21,097 

 1,198 
 339 

 1,537 

 1,869 
 (123)

 1,746 

 29,483 
 2,592 
–
 (2,200)
 (11,002)

 18,873 

 12,377 
 (9,600)
 2,777 
 (185)

 2,592 

 4,935 
 17,584 

 22,519 

 1,553 
 424 

 1,977 

 3,707 
 (345)

 3,362 

 24 June 2012
$'000

 26 June 2011
$'000

 1,991 

 1,991 

 2,633 

 2,633 

Available for sale investments consist of investments in ordinary shares at fair value and have no fixed maturity date.

74

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

13

intangiBle assets

Radio licences 
Customer relationships 
Mastheads and tradenames 
Software 
Goodwill

total intangible assets

reCONCiliatiONS

 24 June 2012
$'000

 26 June 2011
$'000

 121,637 
 8,474 
 1,286,843 
 76,006 
 1,009,085 

 132,217 
 3,453 
 3,254,396 
 71,024 
 1,799,018 

 2,502,045 

 5,260,108 

Reconciliations of the carrying amount of each class of intangible at the beginning and end of the current financial year are set out below:

radio
licences
$'000

custoMer
relationships
$'000

Mastheads &
tradeMarks
$'000

note

softWare
$'000

goodWill
$'000

total
$'000

At 27 June 2010
Cost
Accumulated amortisation and impairment

 156,678 
 (24,461)

 19,614 
 (7,983)

 3,745,362 
 (378,729)

 242,066 
 (156,085)

 2,453,036 
 (106,717)

 6,616,756 
 (673,975)

net carrying amount

 132,217 

 11,631 

 3,366,633 

 85,981 

 2,346,319 

 5,942,781 

Period ended 26 June 2011
Balance at beginning of the financial year
Additions
Capitalisations from works in progress
Disposals
Acquisition through business combinations
Amortisation charge
Impairment
Exchange differences

At 26 June 2011, net of accumulated 
amortisation and impairment

14

3(B)

 132,217 
–
–
–
–
–
–
–

 11,631 
–
–
–
 1,353 
 (2,897)
 (6,588)
 (46)

 3,366,633 
 13 
–
–
 20,846 
 (13)
 (80,915)
 (52,168)

 85,981 
 1,732 
 11,275 
 (179)
 1,381 
 (27,842)
–
 (1,324)

 2,346,319 
–
–
 (2,128)
 48,387 
–
 (562,366)
 (31,194)

 5,942,781 
 1,745 
 11,275 
 (2,307)
 71,967 
 (30,752)
 (649,869)
 (84,732)

 132,217 

 3,453 

 3,254,396 

 71,024 

 1,799,018 

 5,260,108 

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

75

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

radio
licences
$'000

custoMer
relationships
$'000

Mastheads &
tradeMarks
$'000

note

softWare
$'000

goodWill
$'000

total
$'000

At 26 June 2011
Cost
Accumulated amortisation and impairment

 156,678 
 (24,461)

 8,008 
 (4,555)

 3,714,053 
 (459,657)

 253,229 
 (182,205)

 2,468,101 
 (669,083)

 6,600,069 
 (1,339,961)

net carrying amount

 132,217 

 3,453 

 3,254,396 

 71,024 

 1,799,018 

 5,260,108 

Period ended 24 June 2012
Balance at beginning of the financial year
Additions
Capitalisations from works in progress
Reallocation from purchase price 
accounting *
Disposals
Assets classified as held for sale
Acquisition through business combinations
Amortisation charge
Impairment
Exchange differences

At 24 June 2012, net of accumulated 
amortisation and impairment

14

3(B)

At 24 June 2012
Cost
Accumulated amortisation and impairment

 132,217 
–
–

–
 (10,580)
–
–
–
–
–

 3,453 
–
–

 3,254,396 
 1,443 
–

 71,024 
 17,011 
 7,843 

 1,799,018 
 46 
–

 5,260,108 
 18,500 
 7,843 

 7,384 
–
–
–
 (2,379)

–
–
 (15,211)
 2,895 
 (28)
–  (1,963,624)
 6,972 

 16 

 2,899 
 (134)
 (40)
 5,675 
 (28,268)
 (251)
 247 

 (8,263)
 (2,000)
 (11)
 6,518 
–
 (794,295)
 8,072 

 2,020 
 (12,714)
 (15,262)
 15,088 
 (30,675)
 (2,758,170)
 15,307 

 121,637 

 8,474 

 1,286,843 

 76,006 

 1,009,085 

 2,502,045 

 143,700 
 (22,063)

 15,417 
 (6,943)

 3,692,719 
 (2,405,876)

 269,976 
 (193,970)

 2,455,250 
 (1,446,165)

 6,577,062 
 (4,075,017)

net carrying amount

 121,637 

 8,474 

 1,286,843 

 76,006 

 1,009,085 

 2,502,045 

* 

 Reallocation from purchase price accounting relates to the identification of customer relationships ($7.4 million), software ($2.9 million) 
and the recording of a deferred tax liability ($2.0 million) relating to these assets. The current year amortisation charge for these assets 
includes $0.4 million relating to the 2011 financial year as part of the reallocation from goodwill to amortising intangibles.

76

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(i)  Impairment of cash generating units (CGU) including goodwill and indefinite life assets
A CGU is the grouping of assets at the lowest level for which there are separately identifiable cash flows. CGU Groups are an aggregation 
of CGUs which have similar characteristics. The recoverable amount of each CGU which includes goodwill or indefinite life intangibles 
has been tested.

The value in use calculations prepared by the company use discounted cash flow methodology. Key components of the calculation and 
the basis for each component are set out below: 

Year 1 cash flows 
This is based upon the annual budget for 2013, which includes the impact of the Fairfax of the Future program together with 
adjustments to account for lower current trading results.

Year 2 and 3 cash flows 
These cash flows are forecast using year 1 as a base and a growth or decline factor applied to revenue and expenses in years 2 and 3. 
The rate of change takes account of management's best estimate of the likely results in these periods, industry forecasts, historical 
actual rates and the impact of the Fairfax of the Future restructure. Revenue declines of between 2.5% and 7.5% have been used in 
publishing where management expect the cyclical downturn and structural change to continue. In the digital businesses, revenue growth 
of 12% reflecting experience, has been adopted including the introduction of digital subscription models. Expenses have been adjusted 
to account for the revenue growth or decline, Fairfax of the Future restructuring and other committed management initiatives. 

terminal growth factor 
A terminal growth factor that estimates the long term average growth for that CGU is applied to the year 3 cash flows into perpetuity. A 
rate of 3.5% (2011: 3.5%) has been used for digital cash flows. Metropolitan publishing and Printing Operations were calculated at no 
growth (2011: 3-3.5%) and Australian Regional Media, Broadcasting and New Zealand Media calculated at 2.5% (2011:3-3.5%).

Discount rate 
The discount rate is an estimate of the post tax rate that reflects current market assessment of the time value of money and the risks 
specific to the CGU. The post-tax discount rates applied to the CGU Groups' cash flow projections were in a range producing a mid 
point of 11.5% for Australian and 11.2% for New Zealand Media (2011: Aust and NZ: 10.1%), 12.8% for Australian Online (2011: 12.3%)  
 and 12.6% for New Zealand Online (2011: 12.8%).

Each of the above factors is subject to significant judgement about future economic conditions and the ongoing structure of the 
publishing and digital industries. Specifically, the Directors note that the extent and duration of the current cyclical downturn in 
advertising is difficult to predict. The Directors have applied their best estimates to each of these variables but cannot warrant their 
outcome. To assess the impact of this significant uncertainty, and the range of possible outcomes, sensitivity analysis is disclosed below.

(ii)  impact of possible change in key assumptions
Holding all assumptions constant, if year 1 cash flow forecasts declined by 5%, an additional impairment in aggregate, of $206 million would 
arise for all CGU Groups. If year 1 cash flow forecasts increased by 5%, in aggregate, the impairment would be reduced by $190 million.

Holding all assumptions constant, if years 2 and 3 cash flow forecasts declined by 5%, an additional impairment in aggregate, of $265 million 
would arise for all CGU Groups. If years 2 and 3 cash flow forecast increased by 5%, in aggregate, the impairment would be reduced by 
$241 million.

Holding all assumptions constant, if the discount rate applied to the media cash flow projections was increased by 0.5%, an additional 
impairment of $106 million would arise. If the rate was decreased by 0.5%, the impairment would be reduced by $97 million.

Holding all assumptions constant, if terminal growth factors were reduced by a further 1% across all CGU's then a further impairment 
of $190 million would arise. If terminal growth factors were increased by 1% across all CGU's then the impairment would be reduced 
by $235 million.

(iii) Allocation of goodwill, licences, mastheads and tradenames to CGus
For the financial year ended 24 June 2012, goodwill, licences, mastheads and tradenames were allocated to the CGU Groups below. 
The table below also indicates which operating segment each CGU Group belongs to. Operating segments are defined at Note 1(V) 
and Note 36 with further disclosure on the results for each operating segment.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

77

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

At 24 June 2012

operating
segMent

 goodWill 
$'000

 licences, 
 Mastheads 
 and 
 tradenaMes 

$'000

Allocation to CGu Groups
New South Wales Metropolitan and Community Media 
Victorian Metropolitan and Community Media 
Business Media 
Australian Digital
Australian Regional Media
Agricultural Media 
Trade Me
Printing Operations
Broadcasting
New Zealand Media

Metropolitan Media
Metropolitan Media
Metropolitan Media
Metropolitan Media
Fairfax Regional Media
Fairfax Regional Media
Trade Me
Printing Operations
Broadcasting
New Zealand Media

–
–
 7,290 
 217,808 
 4,518 
 23,019 
 573,954 
 126,311 
 56,185 
–

 178,813 
 137,446 
 67,097 
 23,750 
 483,487 
 232,747 
 25,713 
–
 121,637 
 137,790 

 total 
$'000

 178,813 
 137,446 
 74,387 
 241,558 
 488,005 
 255,766 
 599,667 
 126,311 
 177,822 
 137,790 

total goodwill, licences, mastheads and tradenames

 1,009,085 

 1,408,480 

 2,417,565 

At 26 June 2011

Allocation to CGu Groups
New South Wales Metropolitan and Community Media
Victorian Metropolitan and Community Media
Business Media
Australian Online
Australian Regional Media
Agricultural Media
Trade Me
Printing Operations
Broadcasting
New Zealand Media

operating
segMent

 goodWill 
$'000

 licences, 
 Mastheads 
 and 
 tradenaMes 

$'000

Metropolitan Media
Metropolitan Media
Metropolitan Media
Metropolitan Media
Fairfax Regional Media
Fairfax Regional Media
Trade Me
Printing Operations
Broadcasting
New Zealand Media

–
–
 77,804 
 233,590 
 404,420 
 58,068 
 559,306 
 351,713 
 108,185 
 5,932 

 431,936 
 441,565 
 162,523 
 23,525 
 1,090,221 
 345,744 
 25,340 
–
 132,217 
 733,542 

 total 
$'000

 431,936 
 441,565 
 240,327 
 257,115 
 1,494,641 
 403,812 
 584,646 
 351,713 
 240,402 
 739,474 

total goodwill, licences, mastheads and tradenames

 1,799,018 

 3,386,613 

 5,185,631 

78

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

14

property, plant and equipMent

freehold land and buildings
At cost
Accumulated depreciation and impairment

total freehold land and buildings

Leasehold buildings
At cost
Accumulated depreciation and impairment

total leasehold buildings

Plant and equipment
At cost
Accumulated depreciation and impairment

total plant and equipment

Capital works in progress – at cost

total property, plant and equipment

 24 June 2012
$'000

 26 June 2011
$'000

 257,582 
 (38,220)

 267,103 
 (34,530)

 219,362 

 232,573 

 103,904 
 (36,166)

 100,101 
 (25,285)

 67,738 

 74,816 

 1,083,690 
 (831,535)

 1,112,149 
 (713,739)

 252,155 

 398,410 

 7,749 

 16,547 

 547,004 

 722,346 

reCONCiliatiONS

Reconciliations of the carrying amount of each class of property, plant and equipment during the financial year are set out below:

capital
Works in
progress
$'000

freehold
land and
Buildings
$'000

note

leasehold
Buildings
$'000

 plant and
equipMent
$'000

total
$'000

At 27 June 2010
Cost
Accumulated depreciation and impairment

 9,003 
–

 271,799 
 (31,442)

 100,306 
 (22,205)

 1,115,740 
 (664,580)

 1,496,848 
 (718,227)

net carrying amount

 9,003 

 240,357 

 78,101 

 451,160 

 778,621 

Period ended 26 June 2011
Balance at beginning of financial year
Additions/capitalisations
Capitalisation to software
Disposals
Acquisition through business combinations
Depreciation charge
Assets classified as held for sale
Impairment
Exchange differences

At 26 June 2011, net of accumulated 
depreciation and impairment

13

3(B)
9

 9,003 
 20,746 
 (11,275)
 (13)
–
–
 (507)
 (1,252)
 (155)

 240,357 
 493 
–
 (38)
 398 
 (5,094)
 (1,005)
–
 (2,538)

 78,101 
 781 
–
 (325)
–
 (3,677)
–
–
 (64)

 451,160 
 34,901 
–
 (6,598)
 662 
 (74,828)
 150 
 (3,808)
 (3,229)

 778,621 
 56,921 
 (11,275)
 (6,974)
 1,060 
 (83,599)
 (1,362)
 (5,060)
 (5,986)

 16,547 

 232,573 

 74,816 

 398,410 

 722,346 

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

79

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

capital
Works in
progress
$'000

freehold
land and
Buildings
$'000

note

leasehold
Buildings
$'000

 plant and
equipMent
$'000

total
$'000

At 26 June 2011
Cost
Accumulated depreciation and impairment

 16,547 
 – 

 267,103 
 (34,530)

 100,101 
 (25,285)

 1,112,149 
 (713,739)

 1,495,900 
 (773,554)

net carrying amount

 16,547 

 232,573 

 74,816 

 398,410 

 722,346 

Period ended 24 June 2012
Balance at beginning of financial year
Additions/capitalisations
Capitalisation to software
Disposals
Acquisition through business combinations
Depreciation charge
Assets classified as held for sale
Impairment
Exchange differences

At 24 June 2012, net of accumulated 
depreciation and impairment 

At 24 June 2012
Cost
Accumulated depreciation and impairment

13

3(B)
9

 16,547 
 (936)
 (7,843)
 (38)
–
–
–
–
 19 

 232,573 
 781 
–
 (2,654)
–
 (5,109)
 (6,881)
–
 652 

 74,816 
 3,274 
–
 (181)
 11 
 (4,287)
 (96)
 (6,039)
 240 

 398,410 
 23,917 
–
 (2,044)
 185 
 (67,432)
 (783)
 (100,559)
 461 

 722,346 
 27,036 
 (7,843)
 (4,917)
 196 
 (76,828)
 (7,760)
 (106,598)
 1,372 

 7,749 

 219,362 

 67,738 

 252,155 

 547,004 

 7,749 
–

 257,582 
 (38,220)

 103,904 
 (36,166)

 1,083,690 
 (831,535)

 1,452,925 
 (905,921)

net carrying amount

 7,749 

 219,362 

 67,738 

 252,155 

 547,004 

During the current year, an impairment charge of $106.6 million was recorded on property, plant and equipment. This impairment 
primarily relates to printing press equipment at the Chullora and Tullamarine sites following the announcement of the expected closure 
of these sites in the 2014 financial year. 

The useful life of printing press equipment has been reassessed to be no more than ten years. The depreciation rates for the 2013 
financial year will be adjusted to reflect this change in useful life.

80

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

15 derivative financial instruMents

Current assets
Forward contracts

total current derivative assets

non-current assets
Cross currency swap – cash flow hedge
Cross currency swap – net investment hedge
Call option derivative

total non-current derivative assets

Current liabilities
Interest rate swap – cash flow hedge
Cross currency swap – cash flow hedge
Cross currency swap – fair value hedge

total current derivative liabilities

non-current liabilities
Interest rate swap – cash flow hedge
Cross currency swap – fair value hedge
Cross currency swap – cash flow hedge
Obligation under put option*

total non-current derivative liabilities

 24 June 2012
$'000

 26 June 2011
$'000

 123 

 123 

 2,464 
 23,976 
 600 

 27,040 

–
–
–

–

 27,243 
 59,172 
 1,792 
 7,421 

–

–

–
 27,339 
 500 

 27,839 

 6,540 
 72,800 
 860 

 80,200 

 13,453 
 74,379 
 7,481 
 11,221 

 95,628 

 106,534 

* 

 Present value of exercise price of the put option over subsidiary shares. The put and the call option are 50% exercisable in the period 
July 2012 – October 2012 and the remaining interest is exercisable in the period July 2013 – September 2013.

The Group uses derivative financial instruments to reduce the exposure to fluctuations in interest rates and foreign currency rates.

The Group formally designates hedging instruments to an underlying exposure and details the risk management objectives and 
strategies for undertaking hedge transactions. The Group assesses at inception and on a semi-annual basis thereafter, as to whether 
the derivative financial instruments used in the hedging transactions are effective at offsetting the risks they are designed to hedge. Due 
to the high effectiveness between the hedging instrument and underlying exposure being hedged, value changes in the derivatives are 
generally offset by changes in the fair value or cash flows of the underlying exposure. Any derivatives not formally designated as part of 
a hedging relationship are fair valued with any changes in fair value recognised in the income statement.

The derivatives entered into are over the counter instruments within liquid markets.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

81

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

HedGiNG aCtiVitieS

(i) Cash flow hedges – interest rate and cross currency swaps

On 15 June 2012, the Group settled the Eurobond and the interest rate swaps and cross currency swaps designated as hedges of 
the future contracted interest payments on the EUR denominated Eurobonds. The combined swaps were being used to hedge a 
combination of future movements in interest rates and foreign currency exchange rates.

At 24 June 2012, the Group held cross currency swaps designated as hedges of future contracted interest payments on the USD 
denominated senior notes issued in July 2007. The cross currency swaps are being used to hedge a combination of future movements 
in interest rates and foreign currency exchange rates.

At 24 June 2012, the notional principal amounts and period of expiry of the swaps for each counterparty are as follows:

Pay fixed, receive floating – AUD$59.5m
Pay fixed, receive floating – AUD$59.5m

interest rate

Maturity date

10 July 2017
10 July 2017

2012

7.52%
7.46%

2011

7.52%
7.46%

The contracts require settlement on interest receivable semi-annually and interest payable each 90 days. These dates coincide with the 
interest payable dates on the underlying Senior Notes.

At 24 June 2012, the Group held an interest rate swap designated as hedging the future contracted interest payments on AUD 
denominated bank borrowings. The interest rate swap is being used to hedge future movements in interest rates.

At 24 June 2012, the notional principal amount and period of expiry of the swap is as follows:

Pay fixed, receive floating – AUD$125m

interest rate

Maturity date

12 October 2015

2012

6.52%

2011

6.52%

The contract requires settlement on interest receivable and interest payable each 90 days. These dates coincide with the interest 
payable dates on the underlying AUD denominated bank borrowings.

At 24 June 2012, the above hedges were assessed to be highly effective with a combined unrealised loss in fair value of $8.3 million 
(2011: $9.7 million loss) recognised in equity for the period. During the period an unrealised gain of $0.1 million (2011: $0.1 million 
unrealised loss) was recognised in the income statement attributable to the ineffective portion of the cash flow hedges.

During the year there was a gain transferred from equity to the income statement of $1.2 million (2011: nil).

(ii) Cash flow hedges – foreign exchange contracts

During the year, forward exchange contracts were used by the Group to hedge future foreign capital and non-capital purchase 
commitments across the Australian and New Zealand business. The contracts are timed to mature as payments are scheduled to be 
made to suppliers. At 24 June 2012, the Group held forward exchange contracts of $0.1 million (2011: nil). 

The foreign currency contracts are considered to be fully effective hedges as they are matched against the highly probable foreign 
capital and non-capital purchases with any gain or loss on the contracts taken directly to equity. When the contract is delivered, the 
Group will adjust the initial measurement of any component recognised on the balance sheet by the related amount deferred in equity.

During the current and prior financial period there was no material ineffectiveness recognised in the income statement attributable to 
cash flow hedges of foreign exchange contracts.

(iii) fair value hedges

At 24 June 2012, the Group held cross currency swap agreements designated to changes in the underlying value of USD denominated 
senior notes (refer to Note 18). The terms of certain cross currency swap agreements exchange USD obligations into AUD obligations 
and other agreements exchange USD obligations into NZD obligations. The latter are also designated to hedge value changes in the 
Group’s New Zealand controlled entities (excluding Trade Me Limited), as discussed in Note (iv) below.

On 15 June 2012, the Group settled the cross currency swap agreements partly designated to changes in the underlying value of the 
EUR denominated Eurobond (refer to Note 18). The terms of the cross currency swap exchange EUR obligations into AUD obligations. 
This swap has been 99% designated to a cash flow hedge, as discussed in (i) above.

At 24 June 2012, the cross currency swap agreements had a combined derivative liability position of $59.2 million (2011: $75.2 million).

The cross currency swaps are designated based on matched terms to the debt and also have the same maturity profile as the USD 
denominated senior notes.

82

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

The terms of these cross currency swaps are as follows:

Pay floating AUD receive fixed USD – USD$125m
Pay floating AUD receive floating USD – USD$25m
Pay floating NZD receive fixed USD – USD$50m
Pay floating NZD receive fixed USD – USD$90m
Pay floating NZD receive fixed USD – USD$40m

Maturity date

10 July 2014
10 July 2014
15 January 2014
15 January 2016
15 January 2019

For the Group, the remeasurement of the hedged items resulted in a loss before tax of $11.0 million (2011: $79.3 million gain) and the 
changes in the fair value of the hedging instruments resulted in a gain before tax of $14.6 million (2011: $73.8 million loss) resulting in 
a net gain before tax of $3.6 million (2011: $5.5 million gain) recorded in finance costs.

(iv) net investment hedges

The NZD/USD cross currency swap agreements have also been designated to hedge the net investment in New Zealand controlled 
entities acquired as part of the acquisition of the business assets of Independent News Limited in June 2003.

At 24 June 2012, the hedges were assessed to be highly effective with an unrealised loss of $2.5 million (2011: $9.2 million gain) 
recognised in equity. During the current financial period there was an unrealised gain of $0.2 million (2011: $0.1 million loss) recognised 
in the income statement attributable to the ineffective portion of the net investment hedges.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

83

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

16 deferred tax assets and liaBilities

(a) reCOGNiSed deFerred tax aSSetS aNd liaBilitieS

Deferred tax assets and liabilities are attributable to the following:

assets

liaBilities

net 

 24 June 2012
$'000

 26 June 2011
$'000

 24 June 2012
$'000

 26 June 2011
$'000

 24 June 2012
$'000

 26 June 2011
$'000

Property, plant and equipment
Inventories
Investments
Intangible assets
Other assets
Provisions
Payables
Other liabilities
Other 

 16,117 
–
–
 6,278 
 18,792 
 100,620 
 15,004 
 4,917 
 2,853 

Gross deferred tax assets/liabilities

 164,581 

 4,268 
–
–
 6,306 
 16,039 
 50,001 
 12,152 
 4,771 
 2,913 

 96,450 

 22,275 
 3,121 
 1,133 
 13,018 
 17,487 
–
–
 393 
 (151)

 36,893 
 3,155 
 10,915 
 38,656 
 17,728 
–
–
 241 
 165 

 (6,158)
 (3,121)
 (1,133)
 (6,740)
 1,305 
 100,620 
 15,004 
 4,524 
 3,004 

 (32,625)
 (3,155)
 (10,915)
 (32,350)
 (1,689)
 50,001 
 12,152 
 4,530 
 2,748 

 57,276 

 107,753 

 107,305 

 (11,303)

Set-off of deferred tax assets/liabilities

 (42,051)

 (85,938)

 (42,051)

 (85,938)

–

–

net deferred tax assets/liabilities

 122,530 

 10,512 

 15,225 

 21,815 

 107,305 

 (11,303)

(B)  mOVemeNt iN temPOrarY diFFereNCeS dUriNG tHe FiNaNCial Year

Property, plant and equipment
Inventories
Investments
Intangible assets
Other assets
Provisions
Payables
Other liabilities
Other 

Property, plant and equipment
Inventories
Investments
Intangible assets
Other assets
Provisions
Payables
Other liabilities
Other 

Balance
 26 June 2011

recognised
on acquisition

recognised
in incoMe

recognised
in equity

Balances
disposed

 Balance
 24 June 2012

 (32,625)
 (3,155)
 (10,915)
 (32,350)
 (1,689)
 50,001 
 12,152 
 4,530 
 2,748 

 (11,303)

 7 
–
–
 (2,215)
–
 240 
 9 
–
–

 (1,959)

 26,410 
 34 
 9,872 
 27,825 
 (567)
 50,618 
 2,865 
 (6)
 (587)

 116,464 

–
–
 (90)
–
 3,561 
–
–
–
 843 

 4,314 

 50 
–
–
–
–
 (239)
 (22)
–
–

 (211)

 (6,158)
 (3,121)
 (1,133)
 (6,740)
 1,305 
 100,620 
 15,004 
 4,524 
 3,004 

 107,305 

Balance
 27 June 2010

recognised
on acquisition

recognised
in incoMe

recognised
in equity

Balances
disposed

 Balance
 26 June 2011

 (22,823)
 (3,020)
 (10,347)
 (35,369)
 2,958 
 48,993 
 9,504 
 2,448 
 3,056 

 (4,600)

–
–
–
 (576)
–
 47 
–
–
–

 (529)

 (9,802)
 (135)
 (847)
 3,595 
 (8,906)
 961 
 2,648 
 2,082 
 (487)

 (10,891)

–
–
 279 
–
 4,259 
–
–
–
 179 

 4,717 

–
–
–
–
–
–
–
–
–

–

 (32,625)
 (3,155)
 (10,915)
 (32,350)
 (1,689)
 50,001 
 12,152 
 4,530 
 2,748 

 (11,303)

84

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(C) tax lOSSeS aNd FUtUre dedUCtiBle temPOrarY diFFereNCeS

The Group has realised Australian capital losses for which no deferred tax asset is recognised on the balance sheet of $216.5 million 
(2011: $213.4 million) which are available indefinitely for offset against future capital gains subject to continuing to meet relevant 
statutory tests.

The Group has deductible temporary differences for which no deferred tax asset is recognised on the balance sheet of $684.7 million 
(2011: $299.4 million). 

(d) FUtUre aSSeSSaBle temPOrarY diFFereNCeS

At 24 June 2012, there are no material unrecognised future assessable temporary differences associated with the Group's investments 
in associates or joint ventures, as the Group has no material liability for additional taxation should unremitted earnings be remitted 
(2011: Nil).

17

payaBles

Trade and other payables*
Interest payable
Income in advance

total current payables

*  Trade payables are non-interest bearing and are generally on 30 day terms.

 24 June 2012
$'000

 26 June 2011
$'000

 204,233 
 12,038 
 66,366 

 184,229 
 22,192 
 73,248 

 282,637 

 279,669 

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

85

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

18

interest Bearing liaBilities

Current interest bearing liabilities – unsecured
Bank borrowings
Other loans
  Medium term notes
  Eurobonds
  Other
Finance lease liability

total current interest bearing liabilities

non-current interest bearing liabilities – unsecured
Bank borrowings
Other loans
  Senior notes
  Other
Finance lease liability

total non-current interest bearing liabilities

Net deBt FOr FiNaNCial COVeNaNt PUrPOSeS
Cash and cash equivalents
Current interest bearing liabilities
Non-current interest bearing liabilities
Derivative financial instruments liabilities*

Net debt for financial covenant purposes

note

 24 June 2012
$'000

 26 June 2011
$'000

(B)

(E)
(F)
(D)
(D)

(B)

(C)
(D)
(D)

–

 19,378 

–
–
 2,308 
 4,131 

 6,439 

 167,700 
 472,543 
 3,322 
 3,842 

 666,785 

 718,177 

 392,060 

 466,302 
 6,003 
 10,452 

 450,293 
 8,311 
 14,583 

 1,200,934 

 865,247 

 (358,364)
 6,439 
 1,200,934 
 65,089 

 (207,137)
 666,785 
 865,247 
 162,706 

 914,098 

 1,487,601

* 

 Debt hedging instruments as measured against the undiscounted contractual AUD cross currency swap obligations and therefore may not 
equate to the values disclosed in the balance sheet (inclusive of transaction costs).

(a) FiNaNCiNG arraNGemeNtS

The Group net debt for financial covenant purposes, taking into account all debt related derivative financial instruments, was $914 
million as at 24 June 2012 (2011: $1,488 million).

The Group has a number of financing facilities which are guaranteed by Fairfax Media Limited and are covered by deeds of negative 
pledge.

(B)  BaNK BOrrOWiNGS

Current 
A NZ$50 million revolving committed cash advance facility was available to the Group until 23 December 2011. On 19 December 2011, 
this facility was repaid (2011: NZ$25 million).

non-current 
A $1,155.6 million syndicated bank facility is available to the Group until periods ranging from April 2013 to April 2015. At 24 June 2012, 
$590 million was drawn down (2011: $395 million). The interest rate for drawings under this facility is the applicable bank bill rate plus a 
credit margin.

A NZ$200 million revolving cash advance facility is available to Trade Me Group Limited until November 2014. At 24 June 2012, NZ$166 
million was drawn down (2011: Nil). The interest rate for drawings under this facility is the applicable bank bill rate plus a credit margin.

86

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(C) SeNiOr NOteS

The Group issued Senior Notes in the US private placement market with a principal value of US$230 million (A$289.8 million) in January 
2004 with a fixed coupon of between 4.74% p.a. and 5.85% p.a. payable semi-annually in arrears. The interest and principal on the 
Senior Notes are payable in US dollars and were swapped into floating rate New Zealand dollars and floating rate Australian dollars via 
cross-currency swaps. This issue of Senior Notes comprises maturities ranging from January 2014 to January 2019. In January 2011 
Senior Notes of US$50 million were repaid. The weighted average maturity of the issue is approximately 3.7 years. The applicable 
cross-currency swap credit margin includes the cost of hedging all currency risk and future interest and principal repayments on a 
quarterly basis.

The Group issued further Senior Notes in the US private placement market with a principal value of US$250 million (A$308.2 million) in 
July 2007 comprising maturities ranging from July 2014 to July 2017. The weighted average maturity of this issue is approximately 3.2 
years. The issued notes include fixed rate coupon notes, paying a weighted average coupon of 6.90% p.a. semi-annually in arrears, and 
floating rate coupon notes. The interest and principal on the Senior Notes are payable in US dollars and were swapped into fixed and 
floating rate Australian dollars via cross-currency swaps. An additional 1.00% p.a. step up margin is payable on the coupons, effective 
from 10 July 2009.

(d) OtHer lOaNS aNd FiNaNCe leaSe liaBilitY

The Chullora printing facility in Sydney is partially financed by a finance lease facility and loans with a maturity date of September 2015. 
There is a finance lease of $14.6 million (2011: $18.4 million), which was entered into in February 1996. There is also principal and 
interest outstanding of $8.3 million (2011: $11.6 million) in the form of a fixed rate loan with an established repayment schedule.

(e)  mediUm term NOteS (mtNS)

On 27 June 2006, the Group issued $200 million of MTNs with a maturity date of 27 June 2011. The MTNs were issued at a fixed 
coupon of 6.87% p.a. In May 2009, the Group repurchased and cancelled $32.3 million of the outstanding MTNs. The remaining $167.7 
million of MTNs were repaid on 27 June 2011.

(F)  eUrOBONdS

On 15 June 2007 the Group issued €350 million guaranteed notes with a maturity date of 15 June 2012. The notes pay a fixed coupon 
of 6.25% p.a. payable annually in arrears (2011: 6.25%). The interest and principal on the notes are payable in Euro and were swapped 
into fixed rate Australian dollars via cross-currency swaps. 

On 15 June 2012 the Eurobond interest and principal were repaid and all associated swaps were settled.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

87

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

19

provisions

Current
Employee benefits
Defamation 
Property
Redundancy
Other

total current provisions

non-current
Employee benefits
Property
Redundancy
Other

total non-current provisions

reCONCiliatiON

 24 June 2012
$'000

 26 June 2011
$'000

 99,385 
 2,849 
 576 
 90,889 
 188 

 103,232 
 6,283 
 346 
 30,703 
 246 

 193,887 

 140,810 

 14,750 
 37,539 
 97,016 
 – 

 149,305 

 13,527 
 36,821 
–
 48 

 50,396 

Reconciliations of the carrying amount of each class of provision, other than employee benefits, during the financial year are set out below:

At 26 June 2011
Current
Non-current

Total provisions, excluding employee benefits

Period ended 24 June 2012
Balance at beginning of the financial year
Additional provision
Utilised
Transfer to assets held for sale
Exchange differences

Balance at end of the financial year

At 24 June 2012
Current
Non-current

Total provisions, excluding employee benefits

NatUre aNd timiNG OF PrOViSiONS

(i) Employee benefits

defaMation
$'000

property
$'000

 redundancy
$'000

other
$'000

 6,283 
–

 6,283 

 6,283 
 2,208 
 (5,643)
–
 1 

 346 
 36,821 

 30,703 
–

 37,167 

 30,703 

 37,167 
 2,397 
 (1,419)
 (50)
 20 

 30,703 
 199,906 
 (40,677)
 (2,085)
 58 

 2,849 

 38,115 

 187,905 

 2,849 
–

 2,849 

 576 
 37,539 

 90,889 
 97,016 

 38,115 

 187,905 

 246 
 48 

 294 

 294 
 398 
 (504)
–
–

 188 

 188 
–

 188 

Provisions for employee benefits include liabilities for annual leave and long service leave and are measured at the amounts expected 
to be paid when the liabilities are settled, refer to Note 1(S)(i). 

(ii) Defamation

From time to time, entities in the Group are sued for defamation and similar matters in the ordinary course of business. The defamation 
provision maintained is with respect to various matters across the Group. At the date of this report there were no legal actions against 
the consolidated entity that have not been adequately provided for or that are expected to have a material impact on the Group. 

88

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(iii) Property

The provision for property costs is in respect of make good provisions, deferred lease incentives and onerous lease provisions. The 
make good provisions and deferred lease incentives are amortised over the shorter of the term of the lease or the useful life of the 
assets, being up to 20 years. 

(iv) Redundancy

The provision is in respect of amounts payable in connection with redundancy and includes termination benefits, on-costs and 
outplacement services.

(v) Other

Other provisions includes various other costs relating to the business.

20

pension assets and liaBilities

SUPeraNNUatiON PlaN

The Group contributes to defined contribution and defined benefit plans which provide benefits to employees and their dependants on 
retirement, disability or death. All defined benefit plans are closed to new members.

The superannuation arrangements in Australia are managed in a sub-plan of the Mercer Super Trust, called Fairfax Media Super. The 
Trustee of the Trust is Mercer Investment Nominees Limited. The superannuation arrangements in New Zealand are managed by AoN 
Consulting New Zealand Limited in three funds – Fairfax NZ Retirement Fund, Fairfax New Zealand Superannuation Fund and Fairfax 
NZ Senior Executive Superannuation Scheme. All New Zealand funds have defined contribution plans and the Fairfax NZ Retirement 
Fund has a defined benefit section. 

The defined contribution plans receive fixed contributions from employees and from Group companies and the Group’s legally 
enforceable obligation is limited to these contributions. The defined benefit plans receive employee contributions plus Group company 
contributions at rates recommended by the plans’ actuaries.

The following sets out details in respect of the defined benefit plans only and in the case of the Fairfax NZ Retirement Fund, excludes 
$49.8 million (2011: $52.1 million) of defined contribution assets and entitlements.

(a) BalaNCe SHeet 
The amounts recognised in the balance sheet are determined as follows:

Pension assets
Pension liabilities

net pension liabilities
Present value of the defined benefit plan obligation
Fair value of defined benefit plan assets

net pension liabilities

(B)   reCONCiliatiON OF tHe PreSeNt ValUe OF deFiNed  

BeNeFit PlaN OBliGatiON

Balance at the beginning of the financial year
Current service cost
Interest cost
Contributions by employees
Actuarial losses/(gains) 
Benefits paid
Taxes, premiums and expenses paid
Exchange differences on foreign plans
Curtailments
Settlements

Balance at the end of the financial year 

note

 24 June 2012
$'000

 26 June 2011
$'000

 149 
 (3,933)

 (3,784)

 (21,974)
 18,190 

 260 
 (3,595)

 (3,335)

 (22,644)
 19,309 

 (3,784)

 (3,335)

 (B) 
(C)

 22,644 
 917 
 999 
 234 
 2,364 
 (1,585)
 (590)
 4 
 (410)
 (2,603)

 21,974 

 21,512 
 952 
 979 
 248 
 (725)
 (56)
 (243)
 (23)
 – 
–

 22,644 

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

89

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(C)  reCONCiliatiON OF tHe Fair ValUe OF deFiNed BeNeFit  

PlaN aSSetS

Balance at the beginning of the financial year
Expected return on plan assets
Actuarial (losses)/gains
Contributions by Group companies and employees
Benefits paid
Taxes, premiums and expenses paid
Exchange differences on foreign plans
Settlements

Balance at the end of the financial year 

(d) amOUNtS reCOGNiSed iN iNCOme StatemeNt
The amounts recognised in the income statement are as follows:

Current service cost
Interest cost
Curtailments
Expected return on plan assets
Total included in employee benefits expense

Actual return on plan assets

(e)  CateGOrieS OF PlaN aSSetS
The major categories of plan assets as a percentage of the fair value of the total defined benefit plan 
assets are as follows:

Cash
Australian equities
Overseas equities
Fixed interest securities
Property
Other

(F)  PriNCiPal aCtUarial aSSUmPtiONS 
The principal actuarial assumptions used (expressed as weighted averages) were as follows:

Discount rate
Expected return on plan assets
Future salary increases

 24 June 2012
$'000

 26 June 2011
$'000

 19,309 
 1,257 
 (1,368)
 3,761 
 (1,585)
 (590)
 9 
 (2,603)

 18,190 

 16,712 
 1,168 
 660 
 1,081 
 (56)
 (243)
 (13)
–

 19,309 

 24 June 2012
$'000

 26 June 2011
$'000

 917 
 999 
 (410)
 (1,257)
 249 

 952 
 979 
–
 (1,168)
 763 

 (40)

 1,636 

 24 June 2012
%

 26 June 2011
%

 6 
 25 
 28 
 19 
 7 
 15 

2012
%

 2.6 
 7.0 
 4.0 

 9 
 20 
 33 
 28 
 5 
 5 

2011
%

 5.2 
 5.9 
 4.0 

The expected rate of return on assets has been determined by weighting the expected long term return for each class by the target 
allocation of assets to each asset class. This resulted in a 7.0% p.a. rate of return, net of tax and expenses (2011: 5.9% p.a.). 

90

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(G) emPlOYer CONtriBUtiONS

Employer contributions to the defined benefit section of the plans are based on recommendations by the plans’ actuaries. Actuarial 
assessments are made at two yearly intervals for Australia and the last actuarial assessment of Fairfax Media Super was carried out 
as at 1 July 2010 by Mercer Human Resource Consulting Pty Ltd. Actuarial assessments are made at three yearly intervals for New 
Zealand and the last actuarial assessment of Fairfax NZ Retirement Fund was carried out as at 1 April 2011 by AoN Consulting New 
Zealand Limited. Fairfax New Zealand Superannuation Fund and Fairfax NZ Senior Executive Superannuation Scheme are defined 
contribution funds and do not require an actuarial assessment.

The objective of funding is to ensure that the benefit entitlements of members and other beneficiaries are fully funded by the time they 
become payable. To achieve this objective, the actuary has adopted a method of funding benefits known as the aggregate funding 
method. This funding method seeks to have benefits funded by means of a total contribution which is expected to be a constant 
percentage of members’ salaries over their working lifetimes. 

Total employer contributions expected to be paid by Group companies for the 2013 financial year are $612,000.

(H) Net FiNaNCial POSitiON OF PlaN

In accordance with AAS 25 Financial Reporting by Superannuation Plans the plans’ net financial position is determined as the difference 
between the present value of the accrued benefits and the net market value of plan assets. This has been determined as a deficit of  
$1 million at the most recent financial position of the plans, being 1 July 2010 for Australia and 1 April 2011 for New Zealand. 

The directors, based on the advice of the trustees of the plan, are not aware of any changes in circumstances since the date of the 
most recent financial statements of the plans (1 July 2010 for Australia and 1 April 2011 for New Zealand), which would have a material 
impact on the overall financial position of the defined benefit plan.

(i)  HiStOriC SUmmarY

Defined benefit plan obligation
Defined benefit plan assets

Surplus/(deficit)

2008
$'000

 (24,254)
 29,796 

2009
$'000

 (20,560)
 17,875 

2010
$'000

 (21,512)
 16,712 

2011
$'000

 (22,644)
 19,309 

 5,542 

 (2,685)

 (4,800)

 (3,335)

Experience adjustments arising on plan liabilities
Experience adjustments arising on plan assets

 7,678 
 (3,132)

 (1,513)
 6,283 

 1,551 
 (756)

 (490)
 (585)

2012
$'000

 (21,974)
 18,190 

 (3,784)

–
 1,184 

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

91

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

21 contriButed equity 

note

 24 June 2012
$'000

 26 June 2011
$'000

Ordinary Shares
2,351,955,725 ordinary shares authorised and fully paid (2011: 2,351,955,725)

(A)

 4,667,944 

 4,667,944 

unvested employee incentive Shares
11,723,026 unvested employee incentive shares (2011: 11,723,026)

Stapled Preference Shares (SPS)
Nil stapled preference shares (2011: Nil)

Debentures
281 debentures fully paid (2011: 281)

total contributed equity

*  Amount is less than $1000

ReCOnCiLiAtiOnS

(B)

 (21,696)

 (21,696)

(C)

(D)

–

*

–

*

 4,646,248 

 4,646,248 

Reconciliations of each class of contributed equity at the beginning and end of the current financial year are set out below:

(a) OrdiNarY SHareS
Balance at beginning of the financial year

note

 24 June 2012
nO. Of SHAReS

 26 June 2011
no. of shares

 24 June 2012
$'000

 26 June 2011
$'000

 2,351,955,725 

 2,351,955,725 

 4,667,944 

 4,667,944 

Balance at end of the financial year

 2,351,955,725 

 2,351,955,725 

 4,667,944 

 4,667,944 

(B)  UNVeSted emPlOYee iNCeNtiVe SHareS
Balance at beginning of the financial year
Share acquisition – 10 December 2010
Tax benefit recognised directly in equity

Balance at end of the financial year

 11,723,026 
–
–

 8,411,794 
 3,311,232 
–

 11,723,026 

 11,723,026 

 (21,696)
–
–

 (21,696)

(C) StaPled PreFereNCe SHareS (SPS)
Balance at beginning of the financial year
Share repurchase – 29 April 2011
Share issue costs transferred to reserves

Balance at end of the financial year

22(G)

(d) deBeNtUreS
Balance at beginning of the financial year

Balance at end of the financial year

–
–
–

–

 281 

 281 

 3,000,000 
 (3,000,000)
–

–

 281 

 281 

–
–
–

–

*

*

 (18,430)
 (4,666)
 1,400 

 (21,696)

 293,163 
 (300,000)
 6,837 

–

*

*

total contributed equity

 2,363,678,751 

 2,363,678,751 

 4,646,248 

 4,646,248 

*  Amount is less than $1000

92

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

termS aNd CONditiONS OF CONtriBUted eQUitY

(a) OrdiNarY SHareS

Ordinary shares entitle the holder to receive dividends as declared and, in the event of winding up the Company, to participate in the 
proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle 
their holder to one vote, either in person, or by proxy, at a meeting of the Company. 

(B)  UNVeSted emPlOYee iNCeNtiVe SHareS

Shares in Fairfax Media Limited are held by the Executive Employee Share Plan Trust for the purpose of issuing shares under the Long 
Term Incentive Plan. Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one 
vote per share at shareholder meetings.

(C) StaPled PreFereNCe SHareS (SPS)

The SPS (FXJPB), which were issued on 23 March 2006 for a face value of $100 per share, was a stapled security comprising a fully 
paid SPS Preference Share issued by the Company, Fairfax Media Limited and a fully paid unsecured note issued by Fairfax Group 
Finance New Zealand Limited, a wholly owned entity of the Company. Holders of the SPS were not entitled to vote.

On 29 April 2011, all of the SPS were repurchased in accordance with their terms of issue for a repurchase amount of $100 per share.

(d) deBeNtUreS

Debenture holders terms and conditions are disclosed in Note 1(T).

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

93

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

22 reserves

Asset revaluation reserve, net of tax
Foreign currency translation reserve, net of tax
Cashflow hedge reserve, net of tax
Net investment hedge reserve, net of tax
Share-based payment reserve, net of tax
Acquisition reserve
General reserve

total reserves

(a) aSSet reValUatiON reSerVe
Balance at beginning of the financial year 
Revaluation of available for sale investments
Tax effect on available for sale investments

Balance at end of the financial year 

(B) FOreiGN CUrreNCY traNSlatiON reSerVe
Balance at beginning of the financial year
Exchange differences on currency translation, net of tax

Balance at end of the financial year 

(C) CaSHFlOW HedGe reSerVe
Balance at beginning of the financial year 
Losses arising during the year on interest rate and cross currency swaps
Gains arising during the year on currency forward contracts
Reclassification adjustments for gains included in the income statement
Tax effect of net changes on cashflow hedges

Balance at end of the financial year 

(d) Net iNVeStmeNt HedGe reSerVe
Balance at beginning of the financial year
Effective portion of changes in value of net investment hedges
Tax effect on net investment hedges

Balance at end of the financial year 

(e) SHare-BaSed PaYmeNt reSerVe
Balance at beginning of the financial year
Share-based payment expense
Tax effect on share-based payment expense

Balance at end of the financial year 

(F) aCQUiSitiON reSerVe
Balance at beginning of the financial year
Acquisition of non-controlling interest
Disposal of non-controlling interest in subsidiary
Tax effect of disposal of non-controlling interest in subsidiary
Recognition of put option on non-controlling interest

Balance at end of the financial year 

94

note

 24 June 2012
$'000

 26 June 2011
$'000

(A)
(B)
(C)
(D)
(E)
(F)
(G)

 (259)
 (219,528)
 (7,088)
 2,669 
 7,764 
 177,759 
 (6,837)

 506 
 (233,884)
 1,220 
 5,167 
 6,971 
 563 
 (6,837)

 (45,520)

 (226,294)

 506 
 (675)
 (90)

 (259)

 1,833 
 (1,606)
 279 

 506 

 (233,884)
 14,356 

 (140,969)
 (92,915)

 (219,528)

 (233,884)

 1,220 
 (10,731)
 82 
 (1,220)
 3,561 

 (7,088)

 5,167 
 (3,568)
 1,070 

 2,669 

 6,971 
 1,068 
 (275)

 7,764 

 563 
 717 
 187,321 
 (10,842)
 – 

 177,759 

 10,946 
 (13,894)
 – 
 – 
 4,168 

 1,220 

 (4,037)
 13,148 
 (3,944)

 5,167 

 5,099 
 2,675 
 (803)

 6,971 

 – 
 (4,637)
 – 
 – 
 5,200 

 563 

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(G) GeNeral reSerVe
Balance at beginning of the financial year
Share issue costs transferred from contributed equity

Balance at end of the financial year 

NatUre aNd PUrPOSe OF reSerVeS

(A) Asset revaluation reserve

note

 24 June 2012
$'000

 26 June 2011
$'000

21

 (6,837)
 – 

 (6,837)

 – 
 (6,837)

 (6,837)

The asset revaluation reserve is used to record increments and decrements on the revaluation of non-current assets. From 1 July 2004, 
changes in the fair value of investments classified as available for sale investments are recognised in the asset revaluation reserve, as 
described in Note 1(M).

As at the reporting date, the asset revaluation reserve was in a debit balance. This balance relates to available for sale investments that 
have been devalued at reporting date. The devaluation is not considered significant or prolonged so as to require an impairment of the 
investment.

(b) foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising on translation of foreign controlled entities and 
associated funding of foreign controlled entities, as described in Note 1(F).

(C) Cashflow hedge reserve

The hedging reserve is used to record the portion of gains and losses on a hedging instrument in a cash flow hedge that is determined 
to be an effective hedge, as described in Note 1(N). Refer to further disclosures at Note 15.

(D) net investment hedge reserve

The net investment hedge reserve is used to record gains and losses on a hedging instruments in a fair value hedge, as described in 
Note 1(N). Refer to further disclosures at Note 15.

(e) Share-based payment reserve

The share-based payments reserve is used to recognise the fair value of shares issued but not vested and transfers to fund the 
acquisition of Share Trust shares, as described in Note 1(S)(ii).

(f) Acquisition reserve

The acquisition reserve is used to record differences between the carrying value of non-controlling interests and the consideration paid/
received, where there has been a transaction involving non-controlling interests that does not result in a loss of control. The reserve is 
attributable to the equity of the parent.

The current year movement from the disposal of non-controlling interest in subsidiary relates to the sale of 34% of Trade Me Group 
Limited on 13 December 2010 and the further divestment of 15% on 21 June 2012. This entity is still controlled by the Group.

(G) General reserve

The general reserve is used to record Stapled Preference Share (SPS) issue costs that have been transferred from contributed equity. 
The SPS were repurchased on 29 April 2011.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

95

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

23 retained profits

Balance at beginning of the financial year
Net loss for the financial year
Actuarial (loss)/gain on defined benefit plans, net of tax
Tax benefits recognised directly in equity

total available for appropriation

Dividends paid

Balance at end of the financial year

24

earnings per share

basic loss per share 
After significant items less SPS dividend (net of tax) 

Diluted loss per share 
After significant items (net of tax) 

earnings reconciliation – basic
Net loss attributable to members of the Company 
Less Dividends on SPS (net of tax)

Basic loss after significant items less SPS dividend

earnings reconciliation – diluted
Net loss attributable to members of the Company 

Weighted average number of ordinary shares used in calculating basic ePS 
SPS 

Weighted average number of ordinary shares used in calculating diluted ePS

note

 24 June 2012
$'000

 26 June 2011
$'000

 11,764 
 (2,732,397)
 (2,615)
–

 481,978 
 (390,861)
 967 
 5,191 

 (2,723,248)

 97,275 

6

 (82,318)

 (85,511)

 (2,805,566)

 11,764 

 24 June 2012
¢ per share

 26 June 2011
¢ per share

 (116.2)

 (17.0)

 (116.2)

 (17.0)

 24 June 2012
$'000

 26 June 2011
$'000

 (2,732,397)
–

 (390,861)
 (10,034)

 (2,732,397)

 (400,895)

 (2,732,397)

 (390,861)

 24 June 2012
nuMBer
'000

26 June 2011
nuMBer
'000

 2,351,956 

 2,351,956 

–

 166,530 

 2,351,956 

 2,518,486 

96

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

25 coMMitMents

OPeratiNG leaSe COmmitmeNtS – GrOUP aS leSSee

The Group has entered into commercial leases on office and warehouse premises, motor vehicles and office equipment. 

Future minimum rentals payable under non-cancellable operating leases as at the period end are as follows:

Within one year
Later than one year and not later than five years
Later than five years

total operating lease commitments

 24 June 2012
$'000

 26 June 2011
$'000

 41,805 
 140,921 
 311,320 

 41,850 
 135,606 
 271,331 

 494,046 

 448,787 

The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated.

These non-cancellable leases have remaining terms of between five and twenty years. All property leases include a clause to enable 
upward revision of rental charge on an annual basis according to prevailing market conditions.

FiNaNCe leaSe COmmitmeNtS – GrOUP aS leSSee

The Group has a finance lease for property, plant and machinery with a carrying amount of $28.9 million (2011: $30.1 million). The lease 
has a remaining term of three years (2011: four years) and a weighted average interest rate of 13.3% (2011: 13.4%). Future minimum 
lease payments under the finance lease together with the present value of the net minimum lease payments are as follows:

Within one year
Later than one year and not later than five years
Later than five years
Minimum lease payments
Less future finance charges

note

MiniMuM
payMents
2012
$'000

 5,076 
 11,420 
–
 16,496 
 (1,913)

present
value of
payMents
2012
$'000

 4,131 
 10,452 
–
 14,583 
–

MiniMuM
payMents
2011
$'000

 5,076 
 16,496 
–
 21,572 
 (3,147)

present
value of
payMents
2011
$'000

 3,842 
 14,583 
–
 18,425 
–

Total finance lease liability

 18(D) 

 14,583 

 14,583 

 18,425 

 18,425 

CONtiNGeNt reNtalS UNder FiNaNCe leaSe

A component of the finance lease payments are contingent on movements in the consumer price index. At balance date, the rent payable 
over the remaining lease term of three years which is subject to such movements amounts to $14.4 million (2011: $18.3 million). 

CaPital COmmitmeNtS

At 24 June 2012, the Group has commitments principally relating to the purchase of property, plant and equipment. Commitments 
contracted for at reporting date but not recognised as liabilities are as follows:

Within one year
Later than one year and not later than five years
Later than five years

total capital commitments

JOiNt VeNtUre COmmitmeNtS

 24 June 2012
$'000

 26 June 2011
$'000

 1,322 
–
–

 1,322 

 2,506 
–
–

 2,506 

At 24 June 2012, the Group has a commitment contracted for at reporting date but not recognised as a liability in relation to a joint 
venture in MMP Holdings Pty Ltd. The commitment includes a purchase price and a working capital adjustment of $41.3 million and the 
contribution of the shares in Fairfax Community Network Limited. The assets and liabilities of Fairfax Community Network Limited have 
been disclosed as held for sale in Note 9.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

97

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

26 contingencies

GUaraNteeS

Under the terms of ASIC Class Order 98/1418 (as amended), the Company and certain controlled entities (refer Note 27), have 
guaranteed any deficiency of funds if any entity to the class order is wound-up. No such deficiency exists at balance date.

deFamatiON

From time to time, entities in the Group are sued for defamation and similar matters in the ordinary course of business. At the date of 
this report, there were no legal actions against the consolidated entity, other than those recognised at Note 19, that are expected to 
result in a material impact.

27 controlled entities

The following entities were controlled as at the end of the financial year:

Fairfax Media Limited

COntROLLeD entitieS
5AU Broadcasters Proprietary Limited
ACN 101 806 302 Pty Ltd
Agricultural Publishers Pty Limited
Associated Newspapers Ltd
Aussie Destinations (1) Pty Ltd
Australian Property Monitors Pty Limited
AZXC Pty Ltd
Border Mail Printing Pty Ltd
Bridge Printing Office Pty Limited
Bundaberg Broadcasters Pty Ltd
Bundaberg Narrowcasters Pty Ltd
Carpentaria Newspapers Pty Ltd
Central Districts Field Days Limited
Commerce Australia Pty Ltd
Communication Associates Limited 
Country Publishers Pty Ltd
CountryCars.com.au Pty Ltd
Creative House Publications Pty Ltd
Cudgegong Newspapers Pty Ltd
David Syme & Co Pty Limited
Debt Retrieval Agency Limited
Examiner Properties Pty Ltd
Fairfax Business Media (South Asia) Pte Ltd
Fairfax Business Media Pte Ltd
Fairfax Business Media Sdn. Bhd.
Fairfax Community Network Limited
Fairfax Community Newspapers Pty Limited
Fairfax Corporation Pty Limited
Fairfax Digital Holdings NZ Limited
Fairfax Digital Assets NZ Limited
Fairfax Digital Australia & New Zealand Pty Limited
Fairfax Digital Limited
Fairfax Group Finance New Zealand Limited
Fairfax Media (UK) Limited

98

notes

(a)

country of
incorporation

Australia

oWnership interest

 2012
%

 2011
%

(c)
(a)
(a)
(a)

(a)

(a)
(a)
(c)
(c)
(a)

(a)

(a)
(a)

(a)

(a)

(a)
(a)
(a)
(d)
(d)
(a)
(a)

Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
Australia
New Zealand
Australia
Australia
Australia
Australia
Australia
New Zealand
Australia
Singapore
Singapore
Malaysia
Australia
Australia
Australia
New Zealand
New Zealand
Australia
Australia
New Zealand
United Kingdom

–
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
–
–
 100 
 100 
 100 
 100 
 100 
 100 
 60 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 

 100 
 100 
 100 
 100 
 68 
 100 
 68 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 60 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
–
–
 100 
 100 
 100 
 100 

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

Fairfax Media Group Finance Pty Limited
Fairfax Media Management Pty Limited
Fairfax Media Operations Limited
Fairfax Media Operations Pty Limited
Fairfax Media Productions UK Limited
Fairfax Media Publications Pty Limited
Fairfax New Zealand Finance Pty Limited
Fairfax New Zealand Holdings Limited
Fairfax New Zealand Limited
Fairfax News Network Pty Limited
Fairfax OF Limited
Fairfax OSI Limited
Fairfax Print Holdings Pty Limited
Fairfax Printers Pty Limited
Fairfax Radio Network Pty Limited
Fairfax Radio Syndication Pty Limited
Fairfax Regional Media (Tasmania) Pty Limited
Fairfax Regional Printers Pty Limited
Farm Progress Companies, Inc
Farm Progress Holding Co, Inc
Farm Progress Insurance Services, Inc
Financial Essentials Pty Ltd
Find a Babysitter Pty Ltd
Golden Mail Pty Limited
Gunnedah Publishing Co Pty Ltd
Harris and Company Pty Limited
Harris Enterprises Pty Ltd
Harris Print Pty Ltd
Hunter Distribution Network Pty Ltd
Illawarra Newspaper Holdings Pty Ltd
Indiana Prairie Farmer Insurance Services, Inc
Integrated Publication Solutions Pty Limited
Internet Marketing Australia Pty Ltd 
Internet Products Sales & Services Pty Ltd
InvestSMART Financial Services Pty Ltd
John Fairfax & Sons Ltd
John Fairfax (US) Limited
John Fairfax Limited
Lanson Investments Pty Ltd
Leeton Newspapers Pty Ltd
Lime Digital Pty Limited
Mackamedia Pty Ltd
Mamiko Co Pty Ltd
Mayas Pty Ltd
Mayas Unit Trust
Media Investments Pty Ltd
Micosh Pty Ltd
Miller Publishing Co, Inc
Milton Ulladulla Publishing Co. Pty Ltd
Mistcue Pty Limited
Mountain Press Pty Ltd
Namoi Media & Marketing Pty Ltd
Newcastle Newspapers Pty Ltd
Newsagents Direct Distribution Pty Ltd
North Australian News Pty Ltd
Northern Newspapers Pty Ltd

notes

country of
incorporation

 2012
%

 2011
%

oWnership interest

(a)
(a)

(a)

(a)
(h)
(i)
(a)
(a)
(a)
(a)
(a) (g)
(a)

(a)
(a)

(b)
(a)
(a)
(a)
(a)
(a)

(a)

(a)

(a)
(c)

(b)
(b)

(a)

(a)

(b)
(a)
(a)
(a)
(a)

Australia
Australia
New Zealand
Australia
United Kingdom
Australia
Australia
New Zealand
New Zealand
Australia
New Zealand
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
United States
United States
United States
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
United States
Australia
Australia
Australia
Australia
Australia
United States
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
United States
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia

 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 66 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
–
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 65 
 88 
 100 
 100 
 100 
 100 
 100 

 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 66 
–
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 68 
 68 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
–
–
 100 
 100 
 100 
 100 
 100 
 100 
 65 
 88 
–
 100 
 100 
 100 
 100 

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

99

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

NZ Rural Press Limited
Occupancy Pty Limited
Ollority Pty Ltd
Online Marketing Group Pty Limited
OSF Australia Pty Limited
Personal Investment Direct Access Pty Limited
Port Lincoln Times Pty Ltd
Port Stephens Publishers Pty Ltd
Port Stephens Publishers Trust
Queensland Community Newspapers Pty Ltd
Radio 1278 Melbourne Pty Limited
Radio 2UE Sydney Pty Ltd
Radio 3AW Melbourne Pty Limited
Radio 4BC Brisbane Pty Limited
Radio 4BH Brisbane Pty Limited
Radio 6PR Perth Pty Limited
Radio 96FM Perth Pty Limited
Regional Press Australia Pty Limited
Regional Printers Pty Limited
Regional Publishers (Tasmania) Pty Ltd
Regional Publishers (Victoria) Pty Limited
Regional Publishers (Western Victoria) Pty Limited
Regional Publishers Pty Ltd
Riverina Newspapers (Griffith) Pty Ltd
RSVP.com.au Pty Limited
Rural Press (USA) Inc
Rural Press (USA) Limited
Rural Press Printing (Victoria) Pty Limited
Rural Press Printing Pty Limited
Rural Press Pty Limited
Rural Press Queensland Pty Ltd
Rural Press Regional Media (WA) Pty Limited
Rural Publishers Pty Limited
Southern Weekly Partnership
S.A. Regional Media Pty Limited
Satellite Music Australia Pty Limited 
Stayz Limited
Stayz Pty Limited
Stock Journal Publishers Pty Ltd
Suzannenic Pty Limited
The Advocate Newspaper Proprietary Limited
The Age Company Pty Ltd
The Age Print Company Pty Limited
The Barossa News Pty Limited
The Border Morning Mail Pty Limited
The Border News Partnership
The Federal Capital Press of Australia Pty Limited
The Independent News Pty Ltd
The Murrumbidgee Irrigator Pty Ltd
TheVine.com.au Pty Limited
The Wagga Daily Advertiser Pty Ltd
The Warrnambool Standard Pty Ltd
The Weather Company Pty Limited
Trade Me Group Limited
Trade Me Limited

100

notes

country of
incorporation

 2012
%

 2011
%

oWnership interest

New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
United States
United States
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
New Zealand

(a)
(a)

(a)
(a)
(a)
(a)
(a)
(a)
(a)
(a)

(a)
(a)
(a)
(a)
(a)

(a)

(a)
(a)
(a)
(a)
(a)
(a)

(a)
(a)

(a)
(a)
(a)
(a)
(a)
(a)
(a)

(a)
(a)

(a)
(a)

(e)

 100 
 95 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 75 
 100 
 100 
 95 
 95 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 63 
 100 
 100 
 100 
 70 
 100 
 100 
 75 
 51 
 51 

 100 
 90 
 68 
 68 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 51 
 100 
 100 
 90 
 90 
 100 
 100 
 100 
 100 
 100 
 100 
 100 
 63 
 100 
 100 
 100 
 70 
 100 
 100 
 75 
–
 100 

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

Tricom Group Pty Ltd
Trade Me Travel Trustees Limited
Weatherzone Japan LLC
West Australian Rural Media Pty Ltd
West Australian Primary Industry Press Pty Ltd
Western Magazine Pty Ltd
Western Magazine Settlement Trust
Whyalla News Properties Pty Ltd
Winbourne Pty Limited

notes

country of
incorporation

Australia
New Zealand
Japan
Australia
Australia
Australia
Australia
Australia
Australia

(f)
(a)
(a)

(a)
(a)

oWnership interest

 2012
%

 100 
 100 
 75 
 100 
 100 
 75 
 75 
 100 
 100 

 2011
%

 100 
 100 
–
 100 
 100 
 75 
 75 
 100 
 100 

(a) 

 The Company and the controlled entities incorporated within Australia are party to Class Order 98/1418 (as amended) issued by 
the Australian Securities & Investment Commission. These entities have entered into a Deed of Cross Guarantee dated June 2007 
(as varied from time to time) under which each entity guarantees the debts of the others. These companies represent a ‘Closed 
Group’ for the purposes of the Class Order and there are no other members of the ‘Extended Closed Group’. Under the Class 
Order, these entities have been relieved from the requirements of the Corporations Act 2001 with regard to the preparation, audit 
and publication of accounts. 

Incorporated on 3 November 2011.
Incorporated on 13 October 2011.
Incorporated on 8 July 2011.

(b)  Acquired on 1 November 2011.
(c)  Disposed on 31 October 2011.
(d) 
(e) 
(f) 
(g)  This company was formerly called The Examiner Newspaper Pty Ltd.
(h)  This company was formerly called Old Friends Limited.
(i)  This company was formerly called Online Services International Limited.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

101

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

deed OF CrOSS GUaraNtee

Fairfax Media Limited and certain wholly-owned entities (the “Closed Group”) identified at (a) above are parties to a Deed of 
Cross Guarantee under ASIC Class Order 98/1418 (as amended). Pursuant to the requirements of that Class Order, a summarised 
consolidated income statement for the period ended 24 June 2012 and consolidated balance sheet as at 24 June 2012, comprising 
the members of the Closed Group after eliminating all transactions between members are set out below:

(a) BalaNCe SHeet

Current assets
Cash and cash equivalents
Trade and other receivables 
Inventories
Derivative assets
Assets held for sale
Income tax receivable
Other financial assets

total current assets

non-current assets
Receivables
Investments accounted for using the equity method
Available for sale investments
Intangible assets
Property, plant and equipment
Derivative assets
Deferred tax assets
Other financial assets

total non-current assets

total assets

Current liabilities
Payables
Interest bearing liabilities
Derivative liabilities
Liabilities directly associated with held for sale assets
Provisions
Current tax liabilities

total current liabilities

non-current liabilities
Interest bearing liabilities
Derivative liabilities
Provisions
Pension liabilities

total non-current liabilities

total liabilities

net assets

equity
Contributed equity
Reserves
Retained losses

total equity

102

 24 June 2012
$'000

 26 June 2011
$'000

 56,029 
 263,250 
 31,756 
 123 
 18,268 
 14,345 
 3,914 

 136,644 
 296,131 
 33,642 
–
 2,342 
–
 3,686 

 387,685 

 472,445 

 258,134 
 30,551 
 1,991 
 1,637,134 
 470,352 
 27,040 
 119,635 
 1,042,873 

 647,574 
 32,377 
 2,633 
 3,768,533 
 626,056 
 27,839 
 8,362 
 1,052,167 

 3,587,710 

 6,165,541 

 3,975,395 

 6,637,986 

 203,475 
 6,439 
–
 4,956 
 180,090 
 2,595 

 202,998 
 647,407 
 80,200 
–
 120,964 
 39,828 

 397,555 

 1,091,397 

 1,070,560 
 89,607 
 146,534 
 3,933 

 865,295 
 100,513 
 47,486 
 3,595 

 1,310,634 

 1,016,889 

 1,708,189 

 2,108,286 

 2,267,206 

 4,529,700 

 4,646,248 
 (53,283)
 (2,325,759)

 4,646,248 
 (30,958)
 (85,590)

 2,267,206 

 4,529,700 

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(B) iNCOme StatemeNt
Total revenue 
Share of net profits of associates and joint ventures
Expenses before finance costs
Finance costs
net loss from operations before income tax expense
Income tax benefit/(expense)

net loss from operations after income tax expense

 24 June 2012
$'000

 26 June 2011
$'000

 1,782,584 
 1,244 
 (3,956,037)
 (66,569)
 (2,238,778)
 76,738 

 1,989,258 
 2,845 
 (2,256,837)
 (39,552)
 (304,286)
 (64,045)

 (2,162,040)

 (368,331)

28 acquisition and disposal of controlled entities

(a) aCQUiSitiONS 

The Group gained control over the following entities or businesses during the year:

entity or Business acquired

principal activity

Namoi Media & Marketing Pty Ltd
Mackamedia Pty Ltd
Mamiko Co Pty Ltd
Gunnedah Publishing Co Pty Ltd
Autobase Limited

Newspaper publishing
Newspaper publishing
Newspaper publishing
Newspaper publishing
Online vehicle dealer automotive website

date of
acquisition

1 November 2011
1 November 2011
1 November 2011
1 November 2011
30 April 2012

oWnership
interest

100%
100%
100%
100% (i)
(ii)

(i)  The business of Gunnedah Publishing Co Pty Ltd was acquired including the Namoi Valley Independent masthead.
(ii)  The business of Autobase Limited was acquired including the domain name www.autobase.co.nz.

For additional information refer to Note 29.

(B)  diSPOSalS

The Group disposed of its interests in the following businesses during the year:

entity or Business disposed

principal activity

5AU Broadcasters Proprietary Limited
Bundaberg Broadcasters Pty Ltd
Bundaberg Narrowcasters Pty Ltd
Lanson Investments Pty Ltd

Broadcasting
Broadcasting
Broadcasting
Broadcasting

date of disposal

31 October 2011
31 October 2011
31 October 2011
31 October 2011

oWnership
interest

100%
100%
100%
100%

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

103

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

29 Business coMBinations

aCQUiSitiONS dUriNG tHe PeriOd

Acquisitions, none of which were individually significant to the consolidated entity, are listed in Note 28(A). 

The fair values of the identifiable assets and liabilities acquired were:

value of net assets acquired
Cash and cash equivalents
Receivables
Inventories
Property, plant and equipment
Investments and other assets
Intangible assets 
Deferred tax assets

total assets
Payables
Provisions
Other liabilities
Current tax liabilities

total liabilities

Value of identifiable net assets
Goodwill arising on acquisition

Total identifiable net assets and goodwill attributable to the group

Purchase consideration
  Cash paid
  Cash received/receivable on liquidation of Autobase Limited
  Fair value of equity interest in associate prior to acquisition

total purchase consideration

Net cash outflow on acquisition
  Net cash acquired with subsidiary
  Cash paid
  Cash received/receivable on liquidation of Autobase Limited

Net cash outflow

recognised
on acquisition
$'000

 110 
 274 
 43 
 196 
 1 
 8,570 
 112 

 9,306 

 66 
 374 
 13 
 10 

 463 

 8,843 
 6,518 

 15,361 

 15,312 
 (3,040)
 3,089 

 15,361 

 110 
 (15,312)
 3,040 

 (12,162)

Direct costs of $123,362 were incurred in relation to the above acquisitions. These costs are included in other expenses in the 
consolidated income statement.

The consolidated income statement includes sales revenue and net profit for the year ended 24 June 2012 of $2.8 million and 
$0.1 million respectively, as a result of acquisitions of business combinations made during the reporting period. Had the acquisitions 
occurred at the beginning of the reporting period, the consolidated income statement would have included revenue and profit of 
$8.8 million and $1.5 million respectively.

Goodwill of $6.5 million includes synergies expected to be achieved as a result of combining the acquired businesses with the rest of 
the Group. The acquired workforces and future growth opportunities are also key factors contributing to the goodwill acquired during the 
reporting period. 

Included in the business acquisitions made during the reporting period were mastheads, trademarks, software, business and domain names.

104

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

30

eMployee Benefits

(a) NUmBer OF emPlOYeeS

As at 24 June 2012 the consolidated entity employed 8,416 full-time employees (2011: 8,806) and 1,748 part-time and casual 
employees (2011: 1,825). This includes 2,094 (2011: 2,117) full-time employees and 310 (2011: 378) part-time and casual employees in 
New Zealand.

(B)  emPlOYee SHare PlaNS

The Company had three employee share plans during the period. The terms of each plan are set out below:

1. fairfax exempt employee Share Plan
This plan is open to all Australian employees with at least twelve months service with the consolidated entity in Australia, whose 
adjusted taxable income is $180,000 per annum or less. Under this Plan, participants may salary sacrifice up to $1,000 of pre tax salary 
per annum for the purchase of issued Fairfax shares at the market price on the open market of the ASX. The shares are purchased by 
an independent trustee company on predetermined dates.

2. fairfax Deferred employee Share Plan
This plan is open to all Australian employees with at least twelve months service with the consolidated entity in Australia. Under this 
Plan, participants may salary sacrifice a minimum of $1,000 and up to a maximum of $5,000 of salary per annum for the purchase 
of issued Fairfax shares at the market price on the open market of the ASX. The shares are purchased by an independent trustee 
company on predetermined dates. Participants must nominate a 'lock' period of either three, five or seven years during which their 
shares must remain in the plan, unless they leave the consolidated entity in Australia.

3. Long term equity based incentive Scheme
The long term incentive plan is available to certain permanent full-time and part-time employees of the consolidated entity. Under this 
plan, the cash value of a percentage of an eligible employee’s annual total fixed remuneration will be in the form of nominally allocated 
Fairfax shares, which are beneficially held in a trust. The shares will vest if the eligible employee remains in employment three years 
from the date the nominal shares are allocated and certain performance hurdles are satisfied. If the allocation does not vest at the 
end of year three, a re-test of the performance hurdles occurs in the fourth year. There are currently no cash settlement alternatives. 
Dividends on the allocated shares during the vesting period are paid directly to the eligible employee and the Company does not have 
any recourse to dividends paid. 

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

105

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

31 reMuneration of auditors

During the financial year the following amounts were paid or payable for services provided by the auditor of the Company and its 
related parties:

 24 June 2012
$

 26 June 2011
$

 1,031,030 

 1,174,200 

 266,770 

 231,750 

 25,854 

 27,256 

 1,323,654 

 1,433,206 

 238,692 
 376,167 

 276,510 
 111,182 

 213,515 
 603,008 

 170,030 
–

 11,818 
–

 20,703 
 2,200 

 1,443,200 

 580,625 

 2,766,854 

 2,013,831 

 1,000 

–

 1,000 

–

–

–

 2,767,854 

 2,013,831 

Audit services 
Ernst & Young Australia 
  Audit and review of financial reports
Affiliates of Ernst & Young Australia
  Audit and review of financial reports

Non Ernst & Young Firms
  Audit and review of financial reports

total audit services

Other assurance services
Ernst & Young Australia 
  Regulatory and contractually required audits
  Other
Affiliates of Ernst & Young Australia
  Regulatory and contractually required audits
  Other

Non Ernst & Young Firms
  Regulatory and contractually required audits
  Other

total other assurance services

total remuneration for assurance services

non assurance services
Ernst & Young Australia 
  Other services
Affiliates of Ernst & Young Australia
  Other services

Non Ernst & Young Firms
  Other services

total non assurance services

total remuneration of auditors

106

 
 
 
 
 
 
 
 
 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

32 director and executive disclosures

(a) eQUitY iNStrUmeNt diSClOSUreS relatiNG tO KeY maNaGemeNt PerSONNel

(i) Shareholdings

Balance
 26 June 2011

net 
change
other

Balance
 24 June 2012

post 
year-end
acquisitions

post 
year-end
disposals

post 
year-end
Balance

2012
Directors
R Corbett
NJ Fairfax*
G Hywood
S McPhee
S Morgan
L Nicholls
R Savage*
P Young
M Anderson

key management personnel
B Cassell
G Hambly
A Lam-Po-Tang
C Maher
M Williams

 99,206 
 3,892,481 
–
 4,783 
 181,500 
 5,401 
 47,899 
 131,117 
–

 1,061,014 
 177,631 
–
 641 
 1,281 

–
–
 118,343 
 35,437 
 1,383,168 
 34,986 
–
–
–

 99,206 
 3,892,481 
 118,343 
 40,220 
 1,564,668 
 40,387 
 47,899 
 131,117 
–

–
 (72,816)
–
–
–

 1,061,014 
 104,815 
–
 641 
 1,281 

–
–
–
 13,156 
–
 12,875 
–
–
–

–
–
–
–
–

Total

 5,602,954 

 1,499,118 

 7,102,072 

 26,031 

2011
Directors
R Corbett
JB Fairfax*
NJ Fairfax
B McCarthy*
G Hywood
S McPhee
S Morgan
L Nicholls
R Savage
P Young
M Anderson

Balance
 27 June 2010

 99,206 
 235,426,781 
 3,892,481 
 1,200,462 
–
–
–
–
 47,899 
 131,117 
–

net 
change
other

–
–
–
–
–
 4,783 
 181,500 
 5,401 
–
–
–

 99,206 
 235,426,781 
 3,892,481 
 1,200,462 
–
 4,783 
 181,500 
 5,401 
 47,899 
 131,117 
–

–
–
–
–
–
 7,712 
–
 7,261 
–
–
–

key management personnel
B Cassell
G Hambly

 1,061,014 
 178,581 

–
 (950)

 1,061,014 
 177,631 

–
–

Total

 242,037,541 

 190,734 

 242,228,275 

 14,973 

–
–
–
–
–
–
–
–
–

–
–
–
–
–

–

 99,206 
 3,892,481 
 118,343 
 53,376 
 1,564,668 
 53,262 
 47,899 
 131,117 
–

 1,061,014 
 104,815 
–
 641 
 1,281 

 7,128,103 

–
–
–
–
–
–
–
–
–
–
–

–
–

–

 99,206 
 235,426,781 
 3,892,481 
 1,200,462 
–
 12,495 
 181,500 
 12,662 
 47,899 
 131,117 
–

 1,061,014 
 177,631 

 242,243,248 

Balance
 26 June 2011

post 
year-end
acquisitions

post 
year-end
disposals

post 
year-end
Balance

* 

 In the case of retired directors, the closing balance represents the number of shares at the date the director retired from the Board. 
For KMP, the closing balance represents the number of shares at the date of resignation.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

107

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(B) riGHtS OVer SHare HOldiNGS OF direCtOrS aNd KeY maNaGemeNt PerSONNel

Details of equity-based incentive schemes are included in section 6.2 of the remuneration report.

Directors
G Hywood

key management personnel
B Cassell
G Hambly
A Lam-Po-Tang
C Maher
M Williams

Total

Directors
B McCarthy
G Hywood

key management personnel
B Cassell
G Hambly

Total

opening
Balance
 26 June 2011

granted as
reMuneration

net 
change
other*

closing
Balance
 24 June 2012

–

 1,514,491 

–

 1,514,491 

 599,889 
 504,754 
–
 149,261 
 120,567 

 274,077 
 221,030 
–
 129,081 
 93,716 

 (87,983)
 (7,835)
–
 (24,635)
 (15,177)

 785,983 
 717,949 
–
 253,707 
 199,106 

 1,374,471 

 2,232,395 

 (135,630)

 3,471,236 

opening
Balance
 27 June 2010

granted as
reMuneration

net 
change
other*

closing
Balance
 26 June 2011

 950,399 
–

–
–

 284,792 
 270,560 

 315,097 
 234,194 

 1,505,751 

 549,291 

–
–

–
–

–

 950,399 
–

 599,889 
 504,754 

 2,055,042 

*  Net change movements include forfeitures.

(C) lOaNS tO KeY maNaGemeNt PerSONNel

(i) Aggregates for key management personnel

There were no loans made to directors of Fairfax Media Limited or to other key management personnel of the Group, including their 
personally related parties, during the financial period ended 24 June 2012 (2011: nil).

(ii) Individuals with loans above $100,000 during the financial year

There are no outstanding loans above $100,000 for the financial years ended 24 June 2012 and 26 June 2011.

108

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

33 related party transactions

(a) Ultimate PareNt

Fairfax Media Limited is the ultimate parent company.

(B) CONtrOlled eNtitieS

Interests in controlled entities are set out in Note 27.

(C) KeY maNaGemeNt PerSONNel

A number of directors of Fairfax Media Limited also hold directorships with other corporations which provide and receive goods or 
services to and from the Fairfax Group in the ordinary course of business on normal terms and conditions. None of these directors 
derive any direct personal benefit from the transactions between the Fairfax Group and these corporations.

Transactions were entered into during the financial year with the directors of Fairfax Media Limited and its controlled entities or with 
director-related entities, which:

• 

• 

occurred within a normal employee, customer or supplier relationship on terms and conditions no more favourable than those 
which it is reasonable to expect would have been adopted if dealing with the director or director-related entity at arm’s length in the 
same circumstances;

do not have the potential to adversely affect decisions about the allocation of scarce resources or discharge the responsibility of the 
directors; or

• 

are minor or domestic in nature.

(d) traNSaCtiONS WitH related PartieS

The following transactions occurred with related parties on normal market terms and conditions:

Associates
24 June 2012
26 June 2011

Joint ventures
24 June 2012
26 June 2011

Director-related entities *
24 June 2012
26 June 2011

 SALeS tO
ReLAteD
PARtieS
$'000

PuRCHASeS
fROM ReLAteD
PARtieS
$'000

AMOunt OWeD
by ReLAteD
PARtieS
$'000

AMOunt OWeD
tO ReLAteD
PARtieS
$'000

 2,690 
 2,279 

 9,110 
 10,224 

 2,412 
 2,550 

 115 
 61 

 116 
 103 

 1,587 
 343 

 2,905 
 3,772 

 2,252 
 4,845 

 3 
 214 

 11 
 28 

–
 1 

–
 7 

* 

 Sales to director-related entities primarily relate to advertising sold to major retailers of which Directors are board members.  
Purchases from director-related entities primarily relate to purchases from energy suppliers of which Directors are board members.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

109

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

34 notes to the cash floW stateMent

(a)  reCONCiliatiON OF Net lOSS aFter iNCOme tax exPeNSe 

tO Net CaSH iNFlOW FrOm OPeratiNG aCtiVitieS

Net loss for the financial year
non-cash items
Depreciation and amortisation
Impairment of property, plant and equipment, intangibles and investments
Amortisation of borrowing costs
Share of losses/(profits) of associates and joint ventures not received as dividends
Straight-line rent adjustment
Net loss on disposal of property, plant and equipment
Net gain on disposal of investments and other assets
Fair value adjustment to derivatives
Net foreign currency (gain)/loss
Share-based payment expense
Non-cash superannuation expense
Gain on revaluation of investment in associate
Other non-operating gains
Changes in operating assets and liabilities, net of effects from acquisitions
  Decrease in trade receivables
  Decrease/(increase) in other receivables
  Decrease/(increase) in inventories

Increase in other assets
Increase in payables
Increase in provisions
(Decrease)/increase in tax balances

note

 24 June 2012
$'000

 26 June 2011
$'000

 (2,725,803)

 (389,667)

3(B)

 107,503 
 2,865,060 
 1,921 
 1,717 
 470 
 401 
 (1,005)
 (6,561)
 (9,070)
 1,068 
 (716)
 (2,541)
 19 

 33,924 
 3,121 
 2,506 
 (919)
 6,897 
 155,398 
 (165,741)

 114,351 
 655,051 
 1,568 
 (789)
 909 
 1,526 
 (785)
 (6,695)
 807 
 2,675 
 (70)
–
–

 18,725 
 (2,194)
 (1,592)
 (1,113)
 1,777 
 32,303 
 4,638 

Net cash inflow from operating activities

 267,649 

 431,425 

(B) reCONCiliatiON OF CaSH aNd CaSH eQUiValeNtS
Reconciliation of cash at end of the financial year (as shown in the Statement of 
Cash Flow) to the related items in the financial statements is as follows:

Cash on hand and at bank

Total cash at end of the financial year

 358,364 

 207,137 

 358,364 

 207,137 

110

 
 
 
 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

35  financial and capital risk ManageMent

financial risk management
The Group's principal financial instruments, other than derivatives, comprise cash, short term deposits, bills of exchange, bank loans 
and capital markets issues. The main purpose of these financial instruments is to manage liquidity and to raise finance for the Group's 
operations. The Group has various other financial instruments, such as trade and other receivables and trade and other payables, which 
arise directly from its operations.

The Group uses derivatives in accordance with Board approved policies to reduce the Group's exposure to fluctuations in interest rates 
and foreign exchange rates. These derivatives create an obligation or right that effectively transfers one or more of the risks associated 
with an underlying financial instrument, asset or obligation. Derivative instruments that the Group uses to hedge risks such as interest 
rate and foreign currency movements include:

• 

• 

• 

• 

• 

cross currency swaps;

interest rate swaps;

forward foreign currency contracts;

forward rate agreements; and

interest rate option contracts.

The Group's risk management activities for interest rate and foreign exchange exposures are carried out centrally by Fairfax Media 
Group Treasury department. The Group Treasury department operates under policies as approved by the Board. The Group Treasury 
department operates in co-operation with the Group's operating units so as to maximise the benefits associated with centralised 
management of Group risk factors.

Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the 
return to shareholders through the optimisation of net debt and total equity balances.

The capital structure of Group entities is monitored using net debt to EBITDA (earnings before interest, tax, depreciation and 
amortisation) ratio. The ratio is calculated as net debt divided by underlying EBITDA. Net debt is calculated as total interest bearing 
liabilities less cash and cash equivalents. Where interest bearing liabilities are denominated in a currency other than the Australian 
dollar functional currency, and the liability is hedged into an Australian dollar obligation, the liability is measured for financial covenant 
purposes as the hedged Australian dollar amount.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return equity to 
shareholders, issue new shares or sell assets to reduce debt. The Group continuously reviews the capital structure to ensure:

• 

• 

sufficient finance for the business is maintained at a reasonable cost; and

sufficient funds are available for the business to implement its capital expenditure and business acquisition strategies.

Where excess funds arise with respect to the funds required to enact the Group's business strategies, consideration is given to possible 
increased dividends or returns of equity to shareholders.

The Group's financial strategy is to target the net debt to underlying EBITDA ratio at around 2 times. The Group's S&P credit rating is 
currently BB+ (negative outlook).

The net debt to EBITDA ratio for the Group at 24 June 2012 and 26 June 2011 is as follows:

Net debt for financial covenant purposes
EBITDA *

Net debt to EBITDA ratio

note

18

 2012
$'000

 2011
$'000

 914,098 
 506,022 

 1,487,601 
 608,837 

 1.81 

 2.44 

* 

 For the purposes of the debt to EBITDA ratio, underlying EBITDA is adjusted for specific items of a non-recurring nature and excludes any 
unrealised profit/(loss) arising from mark to market revaluations of financial instruments. In respect of the first 12 month period after the 
acquisition of any acquired business, EBITDA will include acquired EBITDA in respect of the acquired business for any period not covered 
in the consolidated EBITDA of the Group.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

111

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

Risk factors
The key financial risk factors that arise from the Group's activities, including the Group's policies for managing these risks are outlined 
below.

Market risk is the risk that the fair value or future cash flows of the Group's financial instruments will fluctuate because of changes in 
market prices. The market risk factors to which the Group is exposed to are discussed in further detail below.

(a) iNtereSt rate riSK

Interest rate risk refers to the risks that the value of a financial instrument or future cash flows associated with the instrument will 
fluctuate due to movements in market interest rates.

Interest rate risk arises from interest bearing financial assets and liabilities that the Group utilises. Non-derivative interest bearing 
assets are predominantly short term liquid assets. Long term debt issued at fixed rates exposes the Group to fair value interest rate risk. 
The Group's borrowings which have a variable interest rate attached give rise to cash flow interest rate risk.

The Group's risk management policy for interest rate risk seeks to reduce the effects of interest rate movements on its asset and liability 
portfolio through management of the exposures.

The Group maintains a mix of foreign and local currency fixed rate and variable rate debt, as well as a mix of long term debt versus 
short term debt. The Group primarily enters into interest rate swap, interest rate option and cross currency swap agreements to manage 
these risks. The Group designates which of its financial assets and financial liabilities are exposed to a fair value or cash flow interest 
rate risk, such as financial assets and liabilities with a fixed interest rate or financial assets and financial liabilities with a floating interest 
rate that is reset as market rates change.

The Group hedges the currency risk on all foreign currency borrowings by entering into cross currency swaps, which have the economic 
effect of converting foreign currency borrowings to local currency borrowings. Over the counter derivative contracts are carried at fair 
value, which are estimated using valuation techniques based wherever possible on assumptions supported by observable market prices 
or rates prevailing at the balance sheet date. For other financial instruments for which quoted prices in an active market are available, 
fair value is determined directly from those quoted market prices.

Refer to Note 15 for further details of the Group's derivative financial instruments and details of hedging activities.

At balance date, the Group had the following mix of financial assets and financial liabilities exposed to interest rate risks:

fLOAtinG
RAte
$'000

fixeD
RAte
$'000

nOn-inteReSt
beARinG
$'000

 358,364 
–
–
 14,615 
 23,976 

 396,955 

–

 718,177 
 24,361 
–
–
 14,583 
 757,121 
 60,964 

–
–
–
–
–

–

–

 8,311 
 441,941 
–
–
–
 450,252 
 27,243 

tOtAL
$'000

 358,364 
 323,242 
 1,991 
 14,682 
 27,163 

–
 323,242 
 1,991 
 67 
 3,187 

 328,487 

 725,442 

 282,637 

 282,637 

–
–
–
–
–
–
 7,421 

 726,488 
 466,302 
–
–
 14,583 
 1,207,373 
 95,628 

 818,085 

 477,495 

 290,058 

 1,585,638 

As at 24 June 2012

financial assets
Cash and cash equivalents
Trade and other receivables
Available for sale investments
Other financial assets
Derivatives

Total financial assets

financial liabilities
Payables
Interest bearing liabilities:
  Bank borrowings and loans
  Senior notes
  Eurobonds
  Medium term notes
  Finance lease liability
Total interest bearing liabilities
Derivatives

Total financial liabilities

112

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

As at 26 June 2011

financial assets
Cash and cash equivalents
Trade and other receivables
Available for sale investments
Other financial assets
Derivatives

Total financial assets

financial liabilities
Payables
Interest bearing liabilities:
  Bank borrowings and loans
  Senior notes
  Eurobonds
  Medium term notes
  Finance lease liability
Total interest bearing liabilities
Derivatives

Total financial liabilities

Sensitivity analysis

fLOAtinG
RAte
$'000

fixeD
RAte
$'000

nOn-inteReSt
beARinG
$'000

 207,137 
–
–
 18,446 
 27,339 

 252,922 

–

 411,438 
 23,815 
–
–
 18,425 
 453,678 
 120,668 

–
–
–
–
–

–

–

 11,633 
 426,478 
 472,543 
 167,700 
–
 1,078,354 
 54,845 

tOtAL
$'000

 207,137 
 358,876 
 2,633 
 18,519 
 27,839 

–
 358,876 
 2,633 
 73 
 500 

 362,082 

 615,004 

 279,669 

 279,669 

–
–
–
–
–
–
 11,221 

 423,071 
 450,293 
 472,543 
 167,700 
 18,425 
 1,532,032 
 186,734 

 574,346 

 1,133,199 

 290,890 

 1,998,435 

The table below shows the effect on net profit and equity after income tax if interest rates at balance date had been 30% higher or 
lower with all other variables held constant, taking into account all underlying exposures and related hedges. Concurrent movements in 
interest rates and parallel shifts in the yield curves are assumed.

A sensitivity of 30% (2011: 30%) has been selected as this is considered reasonable given the current level of both short term and long 
term Australian interest rates. A 30% sensitivity would move short term interest rates at 24 June 2012 from around 3.53% to 4.59% 
representing a 106 basis point shift (2011: 151 basis point shift).

In 2012, 72% (2011: 86%) of the Group's debt, taking into account all underlying exposures and related hedges was denominated in 
Australian Dollars; therefore, only the movement in Australian interest rates is used in this sensitivity analysis. 

Based on the sensitivity analysis, if interest rates were 30% higher, net profit would be impacted by the interest expense being higher on 
the Group's net floating rate Australian Dollar positions during the year.

If interest rates were 30% higher with all other variables held 
constant – increase/(decrease)
If interest rates were 30% lower with all other variables held 
constant – increase/(decrease)

 (4,352)

 (3,725)

 2,663 

 4,888 

 4,352 

 3,725 

 (2,755)

 (5,181)

iMpact on post-tax profit

iMpact on equity

2012
$'000

2011
$'000

2012
$'000

2011
$'000

(B) FOreiGN CUrreNCY riSK

Foreign currency risk refers to the risk that the value or the cash flows arising from a financial commitment, or recognised asset or 
liability will fluctuate due to changes in foreign currency rates. The Group's foreign currency exchange risk arises primarily from:

• 

• 

borrowings denominated in foreign currency; and

firm commitments and/or highly probable forecast transactions for receipts and payments settled in foreign currencies and prices 
dependent on foreign currencies respectively.

The Group is exposed to foreign exchange risk from various currency exposures, primarily with respect to:

•  United States Dollars; and

•  New Zealand Dollars.

Forward foreign exchange contracts are used to hedge the Group's known non-debt related foreign currency risks. These contracts 
generally have maturities of less than twelve months after the balance sheet date and consequently the net fair value of the gains and 
losses on these contracts will be transferred from the cash flow hedging reserve to the income statement at various dates during this 
period when the underlying exposure impacts earnings. The derivative contracts are carried at fair value, being the market value as 
quoted in an active market.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

113

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

The Group's risk management policy for foreign exchange is to only hedge known or highly probable future transactions. The policy only 
permits hedging of the Group's underlying foreign exchange exposures. 

Benefits or costs arising from currency hedges for revenue and expense transactions that are designated and documented in a hedge 
relationship are brought to account in the income statement over the lives of the hedge transactions depending on the effectiveness 
testing outcomes and when the underlying exposure impacts earnings. For transactions entered into that hedge specific capital or 
borrowing commitments, any cost or benefit resulting from the hedge forms part of the initial asset or liability carrying value.

When entered into, the Group formally designates and documents the financial instrument as a hedge of the underlying exposure, as 
well as the risk management objectives and strategies for undertaking the hedge transactions. The Group formally assesses both at the 
inception and at least semi-annually thereafter, whether the financial instruments that are used in hedging transactions are effective at 
offsetting changes in either the fair value or cash flows of the related underlying exposure. Because of the high degree of effectiveness 
between the hedging instrument and the underlying exposure being hedged, fluctuations in the value of the derivative instruments 
are generally offset by changes in the fair values or cash flows of the underlying exposures being hedged. Any ineffective portion of a 
financial instrument's change in fair value is immediately recognised in the income statement and this is mainly attributable to financial 
instruments in a fair value hedge relationship. Derivatives entered into and not documented in a hedge relationship are revalued with 
the changes in fair value recognised in the income statement. All of the Group's derivatives are straight forward over the counter 
instruments with liquid markets.

Refer to Note 15 for further details of the Group's derivative financial instruments and details of hedging activities.

Sensitivity analysis
The tables below show the effect on net profit and equity after income tax as at balance date from a 15% weaker/stronger base currency 
movement in exchange rates at that date on a total derivative portfolio with all other variables held constant.

A sensitivity of 15% has been selected as this is considered reasonable given the current level of exchange rates and the volatility 
observed both on a historical basis and market expectations for potential future movement. The Group's foreign currency risk from the 
Group's long term borrowings denominated in foreign currencies has no significant impact on profit from foreign currency movements as 
they are effectively hedged.

(a) AuD / nZD
Comparing the Australian Dollar exchange rate against the New Zealand Dollar, a 15% weaker Australian Dollar would result in an 
exchange rate of 1.0807 and a 15% stronger Australian Dollar in an exchange rate of 1.4621 based on the year end rate of 1.2714. This 
range is considered reasonable given over the last five years, the Australian Dollar exchange rate against the New Zealand Dollar has 
traded in the range of 1.0781 to 1.3746.

iMpact on post-tax profit

iMpact on equity 
(hedging reserves)*

2012
$'000

2011
$'000

2012
$'000

2011
$'000

If the AUD exchange rate was 15% weaker against the NZD 
with all other variables held constant – increase/(decrease)
If the AUD exchange rate was 15% stronger against the NZD 
with all other variables held constant – increase/(decrease)

 1,092 

 1,232 

 (29,424)

 (29,147)

 (1,932)

 (2,086)

 21,748 

 21,543 

*  Hedging reserves includes both the cash flow hedge reserve and net investment hedge reserve.

(b) AuD / uSD
Comparing the Australian Dollar exchange rate against the United States Dollar, a 15% weaker Australian Dollar would result in an 
exchange rate of 0.8548 and a 15% stronger Australian Dollar in an exchange rate of 1.1566 based on the year end rate of 1.0057. This 
range is considered reasonable given over the last five years, the Australian Dollar exchange rate against the United States Dollar has 
traded in the range of 0.6120 to 1.1028.

If the AUD exchange rate was 15% weaker against the USD 
with all other variables held constant – increase/(decrease)
If the AUD exchange rate was 15% stronger against the USD 
with all other variables held constant – increase/(decrease)

iMpact on post-tax profit

2012
$'000

 683 

 (134)

2011
$'000

 612 

 (145)

iMpact on equity 
(cash floW hedge reserve)

2012
$'000

2011
$'000

 (2,033)

 (2,468)

 2,939 

 2,902 

114

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(C) Credit riSK

Credit risk is the risk that a contracting entity will not complete its obligations under a financial instrument and cause the Group to make 
a financial loss. The Group has exposure to credit risk on all financial assets included in the Group's balance sheet. To help manage this 
risk, the Group:

• 

has a policy for establishing credit limits for the entities it deals with;

•  may require collateral where appropriate; and

•  manages exposures to individual entities it either transacts with or enters into derivative contracts with (through a system of 

credit limits).

The Group is exposed to credit risk on financial instruments and derivatives. For credit purposes, there is only a credit risk where the 
contracting entity is liable to pay the Group in the event of a closeout. The Group has policies that limit the amount of credit exposure 
to any financial institution. Derivative counterparties and cash transactions are limited to financial institutions that meet minimum credit 
rating criteria in accordance with the Group's policy requirements. At 24 June 2012 counterparty credit risk was limited to financial 
institutions with credit ratings ranging from A to AA.

The Group's credit risk is mainly concentrated across a number of customers and financial institutions. The Group does not have any 
significant credit risk exposure to a single or group of customers or individual institutions.

Financial assets are considered impaired where there is objective evidence that the Group will not be able to collect all amounts due 
according to the original trade and other receivable terms. Factors considered when determining if an impairment exists include ageing 
and timing of expected receipts and the credit worthiness of counterparties. A provision for doubtful debts is created for the difference 
between the assets carrying value and the present value of estimated future cash flows. The Group's trading terms do not generally 
include the requirement for customers to provide collateral as security for financial assets.

Refer to Note 7 for an ageing analysis of trade receivables and the movement in the provision for doubtful debts. All other financial 
assets are not impaired and are not past due. Based on the credit history of these classes, it is expected that these amounts will be 
received when due.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

115

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(d) liQUiditY riSK

Liquidity risk is the risk that the Group cannot meet its financial commitments as and when they fall due.

To help reduce this risk the Group:

• 

• 

• 

has a liquidity policy which targets a minimum level of committed facilities and cash relative to EBITDA;

has readily accessible funding arrangements in place; and

staggers maturities of financial instruments.

Refer to Note 18(B) for details of the Group's unused credit facilities at 24 June 2012. 

The contractual maturity of the Group's fixed and floating rate derivatives, other financial assets and other financial liabilities are shown 
in the tables below. The amounts represent the future undiscounted principal and interest cash flows and therefore may not equate to 
the values disclosed in the balance sheet.

As at 24 June 2012

financial liabilities*
Payables
Bank borrowings and loans
Notes and bonds
Finance lease liability
Derivatives – inflows*
Cross currency swaps – foreign leg (fixed)**
Cross currency swaps – foreign leg (variable)**
Forward foreign currency contracts
Derivatives – outflows*
Cross currency swaps – AUD leg (fixed)**
Cross currency swaps – AUD leg (variable)**
Cross currency swaps – NZD leg (variable)**
Interest rate swaps***
Forward foreign currency contracts
Put option

As at 26 June 2011

financial liabilities*
Payables
Bank borrowings and loans
Notes and bonds
Finance lease liability
Derivatives – inflows*
Cross currency swaps – foreign leg (fixed)**
Cross currency swaps – foreign leg (variable)**
Derivatives – outflows*
Cross currency swaps – AUD leg (fixed)**
Cross currency swaps – AUD leg (variable)**
Cross currency swaps – NZD leg (variable)**
Interest rate swaps***
Put option

1 year 
or less
$'000

 (282,637)
 (44,862)
 (27,111)
 (11,323)

 26,584 
 527 
 64,328 

 (8,911)
 (9,000)
 (8,128)
 (2,825)
 (64,428)
 (3,711)

1 year 
or less
$'000

 (279,669)
 (34,099)
 (708,797)
 (10,766)

 529,122 
 462 

 (224,110)
 (382,702)
 (9,056)
 (366,846)
–

(noMinal cash floWs)

1 to 2 
years
$'000

–
 (193,485)
 (75,478)
 (9,491)

 75,073 
 527 
–

 (8,911)
 (9,000)
 (71,327)
 (2,825)
–
 (3,710)

2 to 5 
years
$'000

More than
5 years
$'000

–
 (603,881)
 (275,674)
 (12,428)

 251,027 
 24,873 
–

 (26,734)
 (178,712)
 (127,294)
 (129,238)
–
–

–
–
 (142,900)
–

 143,006 
–
–

 (119,221)
–
 (54,264)
–
–
–

(noMinal cash floWs)

1 to 2 
years
$'000

–
 (156,700)
 (25,961)
 (9,130)

2 to 5 
years
$'000

More than
5 years
$'000

–
 (296,456)
 (334,158)
 (21,984)

–
–
 (150,920)
–

 25,499 
 462 

 311,945 
 24,768 

 155,704 
–

 (8,911)
 (7,007)
 (9,056)
 (129,219)
 (5,611)

 (26,734)
 (192,479)
 (85,503)
 (10,547)
 (5,610)

 (136,800)
–
 (169,970)
–
–

*  For floating rate instruments, the amount disclosed is determined by reference to the interest rate at the last repricing date.
**  Contractual amounts to be exchanged representing gross cash flows to be exchanged.
*** Net amount for interest rate swaps for which net cash flows are exchanged.

116

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(e) Fair ValUe

The carrying amounts and fair values of financial assets and financial liabilities at balance date are:

financial assets
Cash and cash equivalents
Receivables
Derivative assets
Available for sale investments
Other financial assets

financial liabilities
Payables
Interest bearing liabilities:
  Bank borrowings
  Eurobonds
  Senior notes
  Medium term notes
  Finance lease liability
Derivative liabilities

carrying 
value
2012
$'000

 358,364 
 323,242 
 27,163 
 1,991 
 14,682 
 725,442 

fair 
value
2012
$'000

 358,364 
 323,242 
 27,163 
 1,991 
 14,682 
 725,442 

carrying 
value
2011
$'000

 207,137 
 358,876 
 27,839 
 2,633 
 18,519 
 615,004 

fair 
value
2011
$'000

 207,137 
 358,876 
 27,839 
 2,633 
 18,519 
 615,004 

 282,637 

 282,637 

 279,669 

 279,669 

 726,488 
–
 466,302 
–
 14,583 
 95,628 
 1,585,638 

 726,488 
–
 467,348 
–
 23,840 
 95,628 
 1,595,941 

 423,071 
 472,543 
 450,293 
 167,700 
 18,425 
 186,734 
 1,998,435 

 423,071 
 473,331 
 451,689 
 167,700 
 28,887 
 186,734 
 2,011,081 

Market values have been used to determine the fair value of listed available for sale investments.

The fair value of the senior notes and lease liabilities have been calculated by discounting the future cash flows by interest rates for 
liabilities with similar risk profiles. The discount rates applied range from 2.12% to 13.32% (2011: 1.94% to 13.35%). 

The carrying value of all other balances approximate their fair value.

The Group uses various methods in estimating the fair value of a financial instrument. The methods comprise:

(a)  quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);

(b)    inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or 

indirectly (derived from prices) (level 2); and

(c)   inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

117

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

The fair value of the financial instruments as well as the methods used to estimate the fair value are summarised in the table below:

As at 24 June 2012

financial assets
Derivative assets
Available for sale investments

financial liabilities
Derivative liabilities

As at 26 June 2011

financial assets
Derivative assets
Available for sale investments

financial liabilities
Derivative liabilities

level 1
$'000

–
 1,991 
 1,991 

–
–

level 1
$'000

–
 2,633 
 2,633 

level 2
$'000

 27,163 
–
 27,163 

 95,628 
 95,628 

level 2
$'000

 27,839 
–
 27,839 

–
–

 186,734 
 186,734 

level 3
$'000

–
–
–

–
–

level 3
$'000

–
–
–

–
–

total
$'000

 27,163 
 1,991 
 29,154 

 95,628 
 95,628 

total
$'000

 27,839 
 2,633 
 30,472 

 186,734 
 186,734 

118

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

36  segMent reporting

(a) deSCriPtiON OF SeGmeNtS 

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors, 
CEO and CFO in assessing performance and in determining the allocation of resources. 

In the 2012 financial year, the Group has implemented changes to the structure of the organisation which has resulted in a change in its 
reportable segments. The Group is organised into seven reportable segments based on aggregated operating segments determined by 
the similarity of products and services provided, economic characteristics and geographical consideration. 

The prior year financial information has been restated under the new reportable segments. Refer to Note 1(V) for disclosure on 
operating segments.

reportaBle segMent

Fairfax Regional Media

Metropolitan Media

New Zealand Media
Printing Operations
Trade Me
Broadcasting
Other

products and services

Newspaper publishing and online for all Australian regional media and for Australia, 
NZ and USA agricultural media.
Metropolitan news, lifestyle and entertainment media across various platforms 
including print, online, tablet and mobile. Also includes classifieds for metropolitan and 
community publications and transactional businesses.
Newspaper, magazine and general publishing and online for all New Zealand media.
Australian and New Zealand printing operations.
Transactional businesses of Trade Me in New Zealand.
Metropolitan radio networks, regional radio stations and narrowcast licences.
Comprises corporate, Satellite Music Australia and Oxford Scientific Films.

Although the broadcasting segment does not meet the quantitative thresholds required by AASB 8, management has concluded that 
disclosure of this segment would be beneficial to users of the financial statements.

(B) reSUltS BY OPeratiNG SeGmeNt

The segment information provided to the Board of Directors, CEO and CFO for the reportable segments for the year ended 24 June 
2012 is as follows:

24 June 2012
Fairfax Regional Media
Metropolitan Media
New Zealand Media
Printing Operations
Trade Me
Broadcasting
Other

Consolidated entity

26 June 2011
Fairfax Regional Media
Metropolitan Media
New Zealand Media
Printing Operations
Trade Me
Broadcasting
Other 

Consolidated entity

segMent 
revenue
$'000

intersegMent
revenue
$'000

 573,851 
 1,132,997 
 345,562 
 474,825 
 114,014 
 97,164 
 8,646 

 (2,223)
 (2,402)
 (653)
 (411,902)
–
 (67)
–

revenue
froM
external
custoMers
$'000

 571,628 
 1,130,595 
 344,909 
 62,923 
 114,014 
 97,097 
 8,646 

underlying
eBit
$'000

 152,875 
 76,766 
 52,684 
 18,480 
 81,987 
 11,304 
 4,423 

 2,747,059 

 (417,247)

 2,329,812 

 398,519 

 587,803 
 1,221,999 
 361,405 
 539,332 
 95,156 
 111,723 
 12,041 

 (2,147)
 (1,344)
 (901)
 (456,164)
–
–
–

 585,656 
 1,220,655 
 360,504 
 83,168 
 95,156 
 111,723 
 12,041 

 168,779 
 124,253 
 58,530 
 41,343 
 73,407 
 24,167 
 2,614 

 2,929,459 

 (460,556)

 2,468,903 

 493,093 

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

119

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

(C) OtHer SeGmeNt iNFOrmatiON

(i) Segment revenue

Segment revenue reconciles to total revenue and income as follows: 

Total segment revenue from external customers
Interest income
Share of net profits of associates and joint ventures

total revenue and income

 24 June 2012
$'000

 26 June 2011
$'000

 2,329,812 
 11,122 
 (1,746)

 2,468,903 
 10,967 
 (3,362)

 2,339,188 

 2,476,508 

Revenue from external customers includes the operating segments share of net profits from associates and joint ventures. Intersegment 
revenue primarily relates to printing charges from internal print facilities for group publications.

The consolidated entity operates predominantly in two geographic segments, Australia and New Zealand. The amount of its revenue 
from external customers in Australia is $1,870.3 million (2011: $2,011.4 million) and the amount of revenue from external customers 
in New Zealand is $468.9 million (2011: $465.1 million). Segment revenues are allocated based on the country in which the customer 
is located. 

(ii) Segment result – ebit

The Board of Directors, CEO and CFO assess the performance of the operating segments based on a measure of underlying EBIT. 
This measurement basis excludes the effects of significant items from the operating segments such as restructuring costs and goodwill, 
masthead or radio licence impairments when the impairment is the result of an isolated, significant event. 

Interest income and expenditure are not allocated to segments, as this type of activity is driven by the centralised treasury function, 
which manages the cash position of the Group. 

A reconciliation of underlying EBIT to operating loss before income tax is provided as follows:

underlying ebit
Interest income
Finance costs
Impairment of mastheads, goodwill, customer relationships and software
Impairment of property, plant and equipment, and investments
Restructuring and redundancy charges

Reported net loss before tax

 24 June 2012
$'000

 26 June 2011
$'000

 398,519 
 11,122 
 (122,857)
 (2,758,061)
 (106,120)
 (200,447)

 493,093 
 10,967 
 (119,009)
 (649,869)
 (4,038)
 (34,222)

 (2,777,844)

 (303,078)

Information provided to the Board of Directors, CEO and CFO in respect of assets and liabilities is presented on a group basis 
consistent with the consolidated financial statements. 

120

notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

A summary of significant items by operating segments is provided for the period ended 24 June 2012 and 26 June 2011.

iMpairMent
of Mastheads,
goodWill,
custoMer
relationships
and softWare
$'000

iMpairMent
of property,
plant and
equipMent, and
 investMents
$'000

restructuring
and
redundancy
charges
$'000

 961,344 
 912,823 
 608,351 
 225,402 
–
 50,000 
 141 

–- 
 7,293 
10,266
 85,633 
–
 721 
 2,207 

 10,625 
 28,248 
 70 
 74,021 
–
 720 
 86,763 

total
$'000

 971,969 
 948,364 
 618,687 
 385,056 
–
 51,441 
 89,111 

 2,758,061 

 106,120 

 200,447 

 3,064,628 

iMpairMent
of Mastheads,
goodWill,
custoMer
relationships
and softWare
$'000

iMpairMent
of property,
plant and
equipMent
$'000

restructuring
and
redundancy
charges
$'000

 5,196 
 490,041 
 77,305 
 6,588 
 – 
 65,000 
 5,739 

 649,869 

–
–
 4,038 
–
–
–
–

 4,038 

 1,674 
 18,983 
 7,136 
 3,623 
–
–
 2,806 

 34,222 

total
$'000

 6,870 
 509,024 
 88,479 
 10,211 
–
 65,000 
 8,545 

 688,129 

24 June 2012
Fairfax Regional Media
Metropolitan Media
New Zealand Media
Printing Operations
Trade Me
Broadcasting
Other

Consolidated entity

26 June 2011
Fairfax Regional Media
Metropolitan Media
New Zealand Media
Printing Operations
Trade Me
Broadcasting
Other

Consolidated entity

(iii) Segment assets

The total of non-current assets other than financial instruments, deferred tax assets and employment benefit assets (there are no rights 
arising under insurance contracts) located in Australia is $2,217.8 million (2011: $5,125.8 million) and the total of these non-current 
assets located in New Zealand is $866.5 million (2011: $894.9 million). Segment assets are allocated to countries based on where the 
assets are located.

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

121

 
notes to the financial stateMents

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

37

parent entity inforMation

The following disclosures relate to Fairfax Media Limited as an individual entity, being the ultimate parent entity of the Fairfax Media group.

financial position of parent entity
Current assets
Total assets
Current liabilities
Total liabilities

total equity of parent entity
Contributed equity
General reserve
Acquisition reserve
Share-based payment reserve
Retained losses

total equity

Result of parent entity
Loss for the period
Other comprehensive income

total comprehensive income for the period

 24 June 2012
$'000

 26 June 2011
$'000

 1,764,003 
 2,061,419 
 18,323 
 18,742 

 1,457,808 
 4,456,158 
 17,587 
 17,877 

 4,646,248 
 (722)
 (10,672)
 7,612 
 (2,599,789)

 4,646,248 
 (722)
 – 
 6,971 
 (214,216)

 2,042,677 

 4,438,281 

 (2,303,255)
–

 (183,040)
–

 (2,303,255)

 (183,040)

Fairfax Media Limited has entered into a Deed of Cross Guarantee with the effect that the Company guarantees debts in respect of its 
subsidiaries within the Closed Group. Further details regarding the deed are set out in Note 27. 

Operating lease commitments – parent entity as lessee

Fairfax Media Limited has entered into commercial leases on office premises. 

Future minimum rentals payable under non-cancellable operating leases as at the period end are as follows:

Within one year

Later than one year and not later than five years
Later than five years

total operating lease commitments

 24 June 2012
$'000

 26 June 2011
$'000

 161 
 82 
–

 243 

 157 
 243 
–

 400 

38

events suBsequent to Balance sheet date

The Group completed an agreement to merge Fairfax Community Network Limited in Victoria with MMP Holdings Pty Ltd on 13 July 2012. 
Following the merger, the Group will hold a 50% interest in MMP Holdings Pty Ltd. 

122

direcTors’ declaraTion

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 24 JUNE 2012

In accordance with a resolution of the Directors of Fairfax Media Limited, we state that:

1.   In the opinion of the Directors:

(a)  the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including:

(i) 

 giving a true and fair view of the consolidated entity's financial position as at 24 June 2012 and of its performance for 
the year ended on that date; 

(ii)  and complying with Australian Accounting Standards and the Corporations Regulations 2001;

(b)  the financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 1;

(c)   there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due 

and payable; and

(d)   as at the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group identified 
in Note 27 will be able to meet any obligations or liabilities to which they are or may become subject, by virtue of the Deed 
of Cross Guarantee.

2. 

 This declaration has been made after receiving the declarations required to be made to the Directors from the 
Chief Executive Officer and the Chief Financial Officer in accordance with section 295A of the Corporations Act 2001  
for the financial year ended 24 June 2012.

On behalf of the Board

Roger Corbett, AO 
Chairman 

Greg Hywood 
Chief Executive Officer and Managing Director

23 August 2012

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

123

 
 
 
 
 
 
 
 
 
independenT audiTor’s reporT

TO THE MEMBERS OF FAIRFAX MEDIA LIMITED

Independent  auditor's  report  to  the  members  Fairfax  Media  Limited  

Report  on  the  financial  report  

We  have  audited  the  accompanying  financial  report  of  Fairfax  Media  Limited,  which  comprises  the  
consolidated  balance  sheet  as  at  24  June  2012,  the  consolidated  income  statement,  the  consolidated  
statement  of  comprehensive  income,  the  consolidated  statement  of  changes  in  equity  and  the  
consolidated  statement  of  cash  flows  for  the  year  then  ended,  notes  comprising  a  summary  of  significant  
accounting  policies  and  other  explanatory  information,  and  the  directors'  declaration  of  the  consolidated  
entity  comprising  the  company  and  the  entities  it  controlled  at  the  year's  end  or  from  time  to  time  during  
the  financial  year.  

Directors'  responsibility  for  the  financial  report  

The  directors  of  the  company  are  responsible  for  the  preparation  of  the  financial  report  that  gives  a  true  
and  fair  view  in  accordance  with  Australian  Accounting  Standards  and  the  Corporations  Act  2001  and  for  
such  internal  controls  as  the  directors  determine  are  necessary  to  enable  the  preparation  of  the  financial  
report  that  is  free  from  material  misstatement,  whether  due  to  fraud  or  error.  In  Note  1,  the  directors  
also  state,  in  accordance  with  Accounting  Standard  AASB  101  Presentation  of  Financial  Statements,  that  
the  financial  statements  comply  with  International  Financial  Reporting  Standards.  

Auditor's  responsibility  

Our  responsibility  is  to  express  an  opinion  on  the  financial  report  based  on  our  audit.  We  conducted  our  
audit  in  accordance  with  Australian  Auditing  Standards.  Those  standards  require  that  we  comply  with  
relevant  ethical  requirements  relating  to  audit  engagements  and  plan  and  perform  the  audit  to  obtain  
reasonable  assurance  about  whether  the  financial  report  is  free  from  material  misstatement.  

An  audit  involves  performing  procedures  to  obtain  audit  evidence  about  the  amounts  and  disclosures  in  
the  financial  report.  The  procedures  selected  depend  on  the  auditor's  judgment,  including  the  assessment  
of  the  risks  of  material  misstatement  of  the  financial  report,  whether  due  to  fraud  or  error.  In  making  
those  risk  assessments,  the  auditor  considers  internal  controls  relevant  to  the  entity's  preparation  and  
fair  presentation  of  the  financial  report  in  order  to  design  audit  procedures  that  are  appropriate  in  the  
circumstances,  but  not  for  the  purpose  of  expressing  an  opinion  on  the  effectiveness  of  the  entity's  
internal  controls.  An  audit  also  includes  evaluating  the  appropriateness  of  accounting  policies  used  and  
the  reasonableness  of  accounting  estimates  made  by  the  directors,  as  well  as  evaluating  the  overall  
presentation  of  the  financial  report.  

We  believe  that  the  audit  evidence  we  have  obtained  is  sufficient  and  appropriate  to  provide  a  basis  for  
our  audit  opinion.  

Independence  

In  conducting  our  audit  we  have  complied  with  the  independence  requirements  of  the  Corporations  Act  
2001(cid:2)(cid:1)(cid:1)(cid:5)(cid:9)(cid:1)(cid:12)(cid:6)(cid:22)(cid:9)(cid:1)(cid:11)(cid:13)(cid:22)(cid:9)(cid:15)(cid:1)(cid:20)(cid:16)(cid:1)(cid:20)(cid:12)(cid:9)(cid:1)(cid:8)(cid:13)(cid:18)(cid:9)(cid:7)(cid:20)(cid:16)(cid:18)(cid:19)(cid:1)(cid:16)(cid:10)(cid:1)(cid:20)(cid:12)(cid:9)(cid:1)(cid:7)(cid:16)(cid:14)(cid:17)(cid:6)(cid:15)(cid:24)(cid:1)(cid:6)(cid:1)(cid:23)(cid:18)(cid:13)(cid:20)(cid:20)(cid:9)(cid:15)(cid:1)(cid:3)(cid:21)(cid:8)(cid:13)(cid:20)(cid:16)(cid:18)(cid:25)(cid:19)(cid:1)(cid:4)(cid:15)(cid:8)(cid:9)(cid:17)(cid:9)(cid:15)(cid:8)(cid:9)(cid:15)(cid:7)e  Declaration,  a  
copy  of  which  is  included  by  reference  (cid:13)(cid:15)(cid:1)(cid:20)(cid:12)(cid:9)(cid:1)(cid:8)(cid:13)(cid:18)(cid:9)(cid:7)(cid:20)(cid:16)(cid:18)(cid:19)(cid:25)(cid:1)(cid:18)(cid:9)(cid:17)(cid:16)(cid:18)(cid:20)(cid:2)(cid:1)  

124

Liability  limited  by  a  scheme  approved  
under  Professional  Standards  Legislation  

  
  
  
  
  
  
  
  
  
independenT audiTor’s reporT

TO THE MEMBERS OF FAIRFAX MEDIA LIMITED

2  

Opinion  

In  our  opinion:  

a. 

the  financial  report  of  Fairfax  Media  Limited  is  in  accordance  with  the  Corporations  Act  2001,  
including:  

i 

ii 

giving  a  true  and  fair  view  of  the  consolidated  entity's  financial  position  as  at  24  June  2012  
and  of  its  performance  for  the  year  ended  on  that  date;  and  

  complying  with  Australian  Accounting  Standards  and  the  Corporations  Regulations  2001;  
and  

b. 

the  financial  report  also  complies  with  International  Financial  Reporting  Standards  as  disclosed  in  
Note  1.  

Report  on  the  remuneration  report  

We  have  audited  the  Remuneration  Report  included  in  pages  23  to  33  of  the  directors'  report  for  the  year  
ended  24  June  2012.  The  directors  of  the  company  are  responsible  for  the  preparation  and  presentation  
of  the  Remuneration  Report  in  accordance  with  section  300A  of  the  Corporations  Act  2001.  Our  
responsibility  is  to  express  an  opinion  on  the  Remuneration  Report,  based  on  our  audit  conducted  in  
accordance  with  Australian  Auditing  Standards.  

Opinion  

In  our  opinion,  the  Remuneration  Report  of  Fairfax  Media  Limited  for  the  year  ended  24  June  2012,  
complies  with  section  300A  of  the  Corporations  Act  2001.  

Ernst  &  Young  

Douglas  Bain  
Partner  
Sydney  
23  August  2012  

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

125

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
sHareHolder inforMaTion

FAIRFAX MEDIA LIMITED

tWeNtY larGeSt HOlderS OF SeCUritieS at 31 aUGUSt 2012

ORDinARy SHAReS (fxJ)
National Nominees Limited
JP Morgan Nominees Australia Limited
Timeview Enterprises Pty Ltd
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited  
Citicorp Nominees Pty Limited
BNP Paribas Noms Pty Ltd 
RBC Dexia Investor Services Australia Nominees Pty Limited 
AMP Life Limited
Hanrine Investments Pty Ltd
JP Morgan Nominees Australia Limited 
QIC Limited
Pacific Custodians Pty Limited  
CS Fourth Nominees Pty Ltd
BNP Paribas Noms Pty Ltd 
Share Direct Nominees Pty Ltd <10026 A/C>
RBC Dexia Investor Services Australia Nominees Pty Limited 
UBS Wealth Management Australia Nominees Pty Ltd
M F Custodians Ltd
HSBC Custody Nominees (Australia) Limited - A/C 2

DebentuReS
National Financial Services Corp.

OPtiONS

There were no options exercisable at the end of the financial year.

SUBStaNtial SHareHOlderS

nuMBer of
 securities

441,239,137
372,898,972
328,382,124
257,420,674
165,712,236
120,037,851
80,418,110
29,613,951
27,980,267
24,073,540
15,016,908
12,657,655
12,119,887
11,510,438
10,434,605
7,462,400
7,382,229
5,169,760
4,761,794
4,296,196
1,938,588,734

%

18.76
15.85
13.96
10.94
7.05
5.10
3.42
1.26
1.19
1.02
0.64
0.54
0.52
0.49
0.44
0.32
0.31
0.22
0.20
0.18
82.42

281

100

Substantial shareholders as shown in substantial shareholder notices received by the Company as at 31 August 2012 are:

Hancock Prospecting Pty Ltd
Allan Gray Australia Pty Ltd
Commonwealth Bank of Australia 
AXA Group
National Australia Bank Limited Group
Maple-Brown Abbott Limited 
Lazard Asset Management Pacific Co
IOOF Holdings Limited

diStriBUtiON OF HOldiNGS at 31 aUGUSt 2012

no. of securities 

1 – 1,000 
1,001 – 5,000 
5,001 – 10,000 
10,001 – 100,000 
100,001 and over 
Total number of holders 
Number of holders holding less than a marketable parcel 

VOtiNG riGHtS

ordinary shares

352,455,664
195,014,605
175,891,782
166,269,107
152,253,051
136,691,699
119,763,425
117,884,540

no. of 
ordinary 
shareholders 

no. of 
deBenture 
holders

9,298
14,913
5,435
5,929
438
36,013
10,211

1
–
–
–
–
1
–

Voting rights of ordinary shareholders are governed by Rules 5.8 and 5.9 of the Company’s Constitution which provide that every 
member present personally or by proxy, attorney or representative shall on a show of hands have one vote and on a poll, shall have 
one vote for every share held. Debentures do not carry any voting rights.

126

fiVe Year perforMance suMMarY

FAIRFAX MEDIA LIMITED AND CONTROLLED ENTITIES

income Statement
Total revenue
Revenues from operations
Earnings/(loss) before depreciation, interest 
and tax (EBITDA)
Depreciation
Earnings/(loss) before interest and tax
Net interest expense
Profit/(loss) before tax
Income tax expense/(benefit)
Net profit/(loss) attributable to members of 
the Company
Net profit before significant items

balance Sheet
Total equity
Total assets 
Total borrowings

Sta  tistical Analysis
Number of shares and debentures
Number of shareholders
Number of SPS holders
EBITDA to operating revenue
EBIT to operating revenue
Basic earnings/(loss) per share
Basic earnings per share before significant items
Operating cash flow per share
Dividend per share
Dividend payout ratio
Interest cover based on EBITDA  
before significant items
Gearing
Return on equity
Market price per share
Market capitalisation
Number of full-time employees
Number of part-time and casual employees

$m
$m

$m
$m
$m
$m
$m
$m

$m
$m

$m
$m
$m

m

%
%
cents
cents
cents
cents
%

Times
%
%
$
$m

2012

2011

2010

2009

2008

 2,339.2 
 2,319.7 

 (2,558.6)
 107.5 
 (2,666.1)
 111.7 
 (2,777.8)
 (52.0)

 (2,732.4)
 205.4 

 2,476.5 
 2,463.4 

 2,490.3 
 2,476.8 

 2,609.5 
 2,599.1 

 2,934.0 
 2,900.9 

 (80.7)
 114.4 
 (195.0)
 108.0 
 (303.1)
 86.6 

 (390.9)
 283.8 

 639.1 
 113.6 
 525.4 
 128.0 
 397.5 
 115.1 

 282.1 
 290.5 

 (59.0)
 117.6 
 (176.6)
 174.9 
 (351.4)
 29.7 

 (380.1)
 242.4 

 818.3 
 108.3 
 710.0 
 186.9 
 523.2 
 135.7 

 386.9 
 395.3 

 2,042.7 
 4,006.6 
 1,207.4 

 4,438.7 
 6,700.6 
 1,532.0 

 5,306.7 
 7,394.1 
 1,478.5 

 5,011.8 
 7,487.6 
 1,908.3 

 4,965.3 
 8,293.1 
 2,511.9 

 2,352.0 
35,174 
–
 (110.7)
 (115.4)
 (116.2)
 8.7 
 11.4 
3.0
–

 4.5 
 59.1 
 10.1 
 0.58 
 1,364.1 
 8,416 
 1,748 

 2,352.0 
 37,974 
–
 (3.3)
 (7.9)
 (17.0)
 11.6 
 18.3 
 3.0 
–

 5.6 
 34.5 
 6.4 
 0.98 
 2,304.9 
 8,806 
 1,825 

 2,352.0 
 43,231 
 1,516 
 25.8 
 21.2 
 11.5 
 11.8 
 19.1 
 2.5 
 21.7 

 5.0 
 27.9 
 5.5 
 1.36 
 3,198.7 
 8,778 
 1,801 

 2,352.0 
 49,050 
 1,388 
 (2.3)
 (6.8)
 (21.6)
 12.4 
 16.4 
 2.0 
–

 3.5 
 38.1 
 4.8 
 1.23 
 2,892.9 
 8,979 
 1,828 

 1,513.5 
 50,184 
 1,010 
 28.2 
 24.5 
 22.9 
 23.4 
 27.7 
 20.0 
 87.3 

 4.4 
 50.6 
 8.0 
 2.69 
 4,071.4 
 9,800 
 2,106 

FAIRFAX MEDIA LIMITED ANNUAL REPORT 2012

127

 
direcTorY

FAIRFAX MEDIA LIMITED

aNNUal GeNeral meetiNG
The Annual General Meeting will be held at 10.30am on 
Wednesday 24 October 2012 at the Ballroom, Park Hyatt, 
1 Parliament Square, Melbourne VIC.

SeCUritieS exCHaNGe liStiNG
The Company’s ordinary shares are listed on the Australian 
Securities Exchange as FXJ.

FiNaNCial CaleNdar 2013
Interim result 

Preliminary final result 

Annual General Meeting 

February 2013

August 2013

November 2013

COmPaNY SeCretarY
Gail Hambly

reGiStered OFFiCe
Level 5, 
1 Darling Island Road, 
Pyrmont NSW 2009 
Ph:   +61 2 9282 2833 
Fax:  +61 2 9282 1633

SHare reGiStrY
Link Market Services Limited 
Level 12 
680 George Street 
Sydney NSW 2000 
Ph: 
Ph: 
Fax: 
Email: registrars@linkmarketservices.com.au 
Website: www.linkmarketservices.com.au

1300 888 062 (toll free within Australia) 
+61 2 8280 7670 
+61 2 9287 0303 

WeBSite
Corporate information and the Fairfax annual report can be 
found via the Company’s website at www.fairfaxmedia.com.au. 
The Company’s family of websites can be accessed through  
www.fairfax.com.au

HOW tO OBtaiN tHe FairFax aNNUal rePOrt
A soft copy of the annual report is available at www.fairfaxmedia.
com.au. To obtain a hard copy of the report, contact Link Market 
Services – see contact details under Share Registry.

CONSOlidatiON OF SHareHOldiNGS
Shareholders who wish to consolidate their separate 
shareholdings into one account should advise the Share Registry 
in writing.

direCt PaYmeNt tO SHareHOlderS’ aCCOUNtS
The Company pays dividends by direct credit to shareholders’ 
bank accounts. The Company no longer issues cheques except 
in exceptional circumstances. A direct credit form can be obtained 
from the Share Registry.

Payments are electronically credited on the dividend date and 
confirmed by a mailed payment advice. Shareholders are advised to 
notify the Share Registry (although it is not obligatory) of their tax file 
number so that dividends can be paid without tax being withheld.

128

Designed and produced by ArmstrongQ – www.armstrongQ.com.au

FAIRFAX MEDIA LIMITED

GPO 506 
sydney NsW 2001

sydney offices 
1 Darling island Road   
Pyrmont NsW 2009 

Telephone 02 9282 2833

www.fairfaxmedia.com.au