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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
Table of Contents
Page
Corporate Directory ............................................................................................................... 2
Chairman’s Report 2012 ......................................................................................................... 3
Review of Operations ............................................................................................................. 4
Directors’ Report .................................................................................................................... 6
Remuneration Report - Audited ........................................................................................... 10
Auditor’s Independence Declaration ................................................................................... 14
Corporate Governance Statement ....................................................................................... 15
Statement of Comprehensive Income ................................................................................. 23
Statement of Financial Position ........................................................................................... 24
Statement of Changes in Equity ........................................................................................... 25
Statement of Cashflows ....................................................................................................... 26
Notes to Financial Statements ............................................................................................. 27
Declaration by Directors ...................................................................................................... 66
Independent Auditors’ Report ............................................................................................. 67
Shareholder Information ...................................................................................................... 69
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For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
CORPORATE DIRECTORY
Hudson Investment Group Limited
Board of Directors
ACN 004 683 729
ABN 25 004 683 729
John W Farey (Executive Chairman)
Juliana Tan
Peter J Meers
Registered and Corporate Office
Joint Company Secretaries
Level 2
Hudson House
131 Macquarie Street
Sydney NSW 2000
Telephone: +61 2 9251 7177
+61 2 9251 7500
Fax:
www.higl.com.au
Website:
Geraldton Office
2 Kemp Street
Narngulu Geraldton WA 6530
Telephone: (08)9923 3604
Facsimile: (08)9923 3773
Auditors
K.S. Black & Co
Level 6
350 Kent Street
Sydney NSW 2000
Telephone: +61 2 8839 3000
David L Hughes
Julian Rockett
Bankers
St George Bank Limited
Level 14, 182 George St
Sydney NSW 2200
Telephone: +61 2 9236 2230
Australia & New Zealand Banking Group Limited
Level 16, 20 Martin Place
Sydney NSW 2000
Telephone: +61 2 9216 2200
Commonwealth Bank of Australia
Corporate Financial Services
Business & Private Banking
Level 9, Darling Park 1
201 Sussex Street
Sydney NSW 2000
Telephone: +61 2 9118 7031
Lawyers
Share Registry
Piper Alderman
Level 23, Governor Macquarie Tower
1 Farrer Place
Sydney NSW 2000
Telephone: +61 2 9253 9999
Computershare Investor Services Pty Limited
GPO Box 2975
Melbourne VIC 3001
Telephone: 1300 850 505 (within Australia)
ASX Code – HGL
Hudson Investment Group Limited shares are listed on
the Australian Securities Exchange.
This financial report covers the Consolidated Entity
consisting of Hudson Investment Group Limited and its
controlled entities.
Hudson Investment Group Limited is a company limited
by shares, incorporated and domiciled in Australia.
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Annual Report 31 December 2012
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CHAIRMAN’S REPORT 2012
On behalf of the Board of Directors, I present the Annual Report for Hudson Investment Group Limited
(the Company) for the twelve months to 31 December 2012. The Company recorded a consolidated net
profit after tax of $1.249 million compared to a net loss of $1.472 million in the previous corresponding
period.
Total shareholders’ funds as at 31 December 2012 are $28.1 million and Net Tangible Asset backing per
share is 10.83 cents.
The Company continues to consolidate its business activities and its existing asset portfolio. Significant
features of the Company’s operations in 2012 are listed below:-
Properties
The Company’s factory at Warnervale is a 44.5 hectare site along Sparks Road. Part of the site is
leased to Bunnings Group Limited which is 100% owned by Wesfarmers Limited. The Company is
negotiating to lease the vacant area on the site and the Board of Directors are discussing various
options to develop the surplus industrial land.
At Rouse Hill the building is leased to Oz Design Furniture Pty Ltd and Hudson Building Supplies Pty
Ltd (now part of Fletcher Building Limited the largest listed company in New Zealand).
The Company’s commercial car park located at Hudson House, 131 Macquarie Street in Sydney’s CBD
is a prime asset catering for nearby hotels (including the Intercontinental Hotel, Sofitel Wentworth
and Sir Stamford), Conservatorium of Music, and medical centres. The car park is managed by
Secure Parking Pty Ltd and continues to generate a consistent income stream for the Company.
The Company’s asset property portfolio as at 31 December 2012 is in excess of $15.0 million net.
Hudson Marketing Pty Limited (Hudson Marketing) (100% owned by the Company)
Hudson Marketing is the largest Australian-owned, manufacturer and marketer of Attapulgite-
sorbent products for cat care, industrial, mining & automotive, agriculture/horticulture and oil
purification applications. Its processing plant is located in Geraldton, Western Australia.
Hudson Marketing distributes leading all-natural cat litter brands such as Chandler®, Fussy Cat®, and
Cat’s Choice® to Coles, Woolworths, and IGA Supermarkets, pet stores and catteries. It also
distributes natural spill absorbent, SpillFIXER® for industrial, mining and automotive use. Hudson
Marketing customizes specialty industrial products and solutions for industrial applications which
include high-performance filtration media for jet fuel refining and oil clarification, carriers for crop
nutrients and crop protectant products and functional fillers in various industrial products.
Annual sales in the year to 31 December 2012 were in excess of $8.6m. Hudson Marketing is in the
process of further streaming its operations to provide greater production efficiencies and to
manufacture more profitable products. It is also expanding its operations into higher margin
industrial mineral products.
Ecofix Pty Ltd (100% owned by the Company)
Ecofix Pty Ltd (Ecofix) is a manufacturer of speciality absorbent products using innovative
technologies for a wide variety of waste water treatment applications. Ecofix has a new pilot
manufacturing plant in Adelaide which has been commissioned and is currently undergoing
validation for commercial production. Ecofix is also currently negotiating joint venture and
distribution agreements with various parties.
Investments
The Company has 30.1 million shares in Hudson Resources Limited, which has interests in various
companies involved in resource projects including bauxite, coal, gold, copper and uranium
exploration. It has a 22.5% strategic investment in Hudson MPA Sdn Bhd in Malaysia, supplying
bleaching earth to the South East Asian markets. Ashapura Minechem Ltd, a major Indian resource
company has a 25% interest in Hudson MPA Sdn Bhd.
The Board of Directors are continually reviewing the Company’s Business Model, its objectives and
strategies. The Board is aiming during 2013 to further improve the growth of the Company and to build on
the achievements made in previous years.
We thank you for your loyal support and your continuing involvement as shareholders of the Company.
John W Farey
Executive Chairman
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
REVIEW OF OPERATIONS
The Company’s asset portfolio includes:
Industrial properties in New South Wales;
Hudson Marketing Pty Limited - processes and markets attapulgite based products;
Bundaberg Coal Pty Limited – interest in 2 Queensland tenements prospective for coal; and
Hudson Resources Limited* (ASX : HRS) – The Company has a significant holding of 30.1 million
shares in Hudson Resources Limited (Hudson Resources);
*
This holding is classified as an investment.
The business operations of the Company consist of:
COMMERCIAL INDUSTRIAL PROPERTY PORTFOLIO IN AUSTRALIA ($39.86 M)
Warnervale
On a 44.5 hectare site, part of this area comprises of a factory and office complex on Sparks Road
Warnervale on the NSW Central Coast which is leased to Bunnings Group Limited, 100% owned by
Wesfarmers Limited. The Company is currently seeking other parties to lease the vacant area. The
NSW Department of Planning in late 2008 rezoned part of this site as IN1 General Industrial. Part of
the rezoned land is to be acquired by Wyong Shire Council. The Company will be compensated based
on market rates for the best use of the land. Further discussions with the appropriate authorities are
continuing in respect of the rezoning of this site.
Rouse Hill
A 7,700m2 building area on this 2.134 hectare site is leased to Hudson Building Supplies Pty Limited
(part of Fletcher Building Group of New Zealand) and Oz Design Furniture Pty Ltd.
The property, located in the rapidly expanding north-west corridor of Sydney, offers considerable
growth potential for the Group.
Hudson House Naming Rights
The Company owns the strata for the building naming rights for Hudson House and also the Hudson
rooftop signage at the Company’s head office at 131 Macquarie Street, Sydney NSW.
Car Park
The Car Park at 131 Macquarie Street Sydney, owned by Hudson Property Trust (a wholly owned
subsidiary), continues to generate consistent income for the Group.
The Car Park is managed by Secure Parking Pty Ltd.
Coal Tenements
The company holds two coal tenements in Queensland and directors are currently evaluating various
business models to determine the best value to shareholders.
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Annual Report 31 December 2012
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Hudson Marketing Pty Limited (Hudson Marketing)
Hudson Marketing is the largest Australian-owned manufacturer and marketer of Attapulgite-sorbent
products for cat care, industrial, mining & automotive, agriculture, horticulture and oil purification
applications. It operates an attapulgite processing plant in Geraldton, Western Australia. Attapulgite
or Fuller’s Earth is an industrial clay material and its products are distributed throughout Australia,
New Zealand and Asia.
During the year Hudson Marketing created a new trading name,
Sorbent Solutions, which better reflects product branding and
paves the way for a new wave of marketing of the company’s
products.
Sorbent Solutions:
This is Hudson Marketing Pty
Ltd’s new trading identity
launched in 2012.
Owns and distributes leading all-natural cat litter brands such
as Chandler®, Fussy Cat® and Cat’s Choice®;
Owns and distributes spill absorbent, SpillFIXER® for industrial, mining and automotive use;
Customises specialty industrial products and solutions for industrial applications which includes
high-performance filtration media for jet fuel refining and oil clarification, carriers for crop
nutrients and crop protectant products and functional filters in various industrial products; and
Provides a dedicated and experienced Technical & Customer Service Team
The business continues to grow with annual sales for 2012 in excess of $8.6 million.
Ecofix Pty Limited (Ecofix)
Hudson Marketing incorporated Ecofix to focus on speciality absorbent products using innovative
technologies in the wastewater treatment industry.
During the year Ecofix commissioned a pilot manufacturing plant in Adelaide and is currently
undergoing validation for commercial production of the new technologies.
Hudson Resources Limited (ASX: HRS) (30.1 million shares)
Hudson Resources is a mining and resource exploration company mining attapulgite and diatomite
deposits. It also specialising in investments in mining assets and listed resources companies. These
investments are primarily originated by Hudson Resources’ own geological team through proprietary
exploration work and opportunities created with other explorers.
Hudson Resources has 45.67 million shares in Australian Bauxite Limited (ASX : ABZ) with a
bauxite strategy in eastern Australia to identify commercially viable bauxite mineralisation and
the development of a mining operation leading to upstream production facilities.
Hudson Resources has 31.8 million shares in Tiaro Coal Limited (ASX : TCM) that has coking
thermal coal tenements in South East Queensland. Exploration programmes have been
undertaken and further drilling is planned.
Hudson Resources has 40 million shares in the recently listed Sovereign Gold Company Limited
(ASX : SOC) that has tenements in Uralla NSW and around the New England district of Armidale.
Hudson Resources also has a strategic 22.5% share in Hudson MPA Sdn Bhd in Malaysia. Joint
Venture partners include Malaysian Phosphates Sdn Bhd, Ashapura Minecham Limited of India
and Safico Sdn Bhd supplying bleaching earth to South East Asian markets, including Malaysia.
Other investment assets of Hudson Resources are properties totalling 14.51 hectares at
Geraldton WA.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
DIRECTORS’ REPORT
Your Directors present their report together with the financial statements on the consolidated entity
(referred to hereafter as the Group) consisting of Hudson Investment Group Limited (the Company) and
the entities it controlled at the end of or during the year ended 31 December 2012.
Principal activities
The principal activities of the Group during the course of the financial year were
as follows:
Investment and development of commercial properties in Australia;
Process and distribute attapulgite based products;
Strategic investment in listed and unlisted shares and business;
Operation of corporate financial services; (and)
Exploration of coal tenements.
Operating results
The consolidated net profit after tax for the financial year ended 31 December
2012 was $1.249 million compared to a net loss after tax of $1.472 million for
the previous corresponding financial year.
Review of
Operations
Dividends
Total Shareholders’ Funds as at 31 December 2012 are $28.1 million (2011:
$26.8 million) and the Net Tangible Asset per share is 10.83 cents (2011: 10.36
cents).
Information on the operations of the Group and its business strategies and
prospects are disclosed in both the Chairman’s Report 2012 and the Review of
Operations contained on pages 4 to 5 of this Annual Report.
The Directors of the Company do not recommend that any amount be paid by
way of dividend. The Company has not paid or declared any amount by way of
dividend since the commencement of the financial year (2011: Nil).
Litigation
Atanaskovic Hartnell
The Company obtained judgement in its favour on 8 June 2007 in an action in
respect to an Entitlement Deed between the Company and Australian
Hardboards Limited prepared by Atanaskovic Hartnell, the Company’s former
solicitors.
The Company has commenced an action against Atanaskovic Hartnell claiming
the shortfall between the amount of its claimed entitlement, $10.0 million, and
the settlement amount of $6.1 million. The matter was heard in February 2012
and in February 2013 the Court dismissed the Company’s claim. The Company
and its legal advisors are reviewing the judgement.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
In March 2012 the Company sold 6.1 million shares in Archer Exploration Limited at 34 cents per share.
Sale proceeds were in excess of $2 million.
MATTERS SUBSEQUENT TO BALANCE DATE
On 11 February 2013 the Supreme Court of New South Wales delivered its judgement in the Company’s
claim against Atanaskovic Hartnell. The Court dismissed the Company’s claim, costs were awarded in
favour of the Defendant.
The Company and its legal advisors are reviewing the judgement with a view to lodging an appeal.
At the date of this report there are no other matters or circumstances that have arisen since 31 December
2012 that have significantly affected or may significantly affect:
The operations, in financial years subsequent to 31 December 2012 of the Group;
The results of those operations; or
The state of affairs, in financial years subsequent to 31 December 2012 of the Group.
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Annual Report 31 December 2012
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LIKELY DEVELOPMENTS
Information on likely developments in the operations of the Group, known at the date of this report has
been covered generally within the report. In the opinion of the Directors providing further information
would prejudice the interests of the Group.
ENVIRONMENTAL REGULATIONS
There has been no breach of environmental regulations during the financial year or in the period
subsequent to the end of the financial year and up to the date of this report.
The Company aims to ensure that the highest standard of environmental care is achieved, and that it
complies with all relevant environmental legislation. The Directors are mindful of the regulatory regime in
relation to the impact of the Company’s activities on the environment.
To the best of the Directors’ knowledge, the Group has adequate systems in place to ensure compliance
with the requirements of all environmental legislation described above and are not aware of any breach
of those requirements during the financial year and up to the date of the Directors’ Report.
DIRECTORS
The following persons held office as Directors of the Company at any time during or since the end of the
financial year:
John W Farey
Juliana Tan
Peter J Meers
Executive Chairman
Executive Director
Non-Executive Director
All Directors have been in office since the commencement of the financial year unless otherwise stated.
Information on Directors
John Farey, B.Com, FAIM, FAICD
Executive Chairman Appointed on 1 February 2002
John W Farey has over 45 years’ experience in financial services
including merchant and investment banking.
Other Current Directorships of
Listed Companies
None
Former Directorships in the Last
Three Years of Listed Companies
Special Responsibilities
Non-Executive Director of Hudson Resources Limited
Chairman of the Board
Member of the Audit Committee
Interests in Shares and Options
Direct interest in 10,000 shares and 6,728,032 ordinary shares by
virtue of participation in an Employee Share Plan.
Juliana Tan, BCom, CA
Executive Director Appointed 1 September 2006
Juliana Tan previously worked for PriceWaterhouseCoopers as a
Chartered Accountant. She has been with the Company since 2003.
Other Current Directorships of
Listed Companies
Former Directorships in the Last
Three Years of Listed Companies
None
None
Special Responsibilities
Member of the Remuneration Committee
Interests in Shares and Options
An indirect interest in 4,294,362 ordinary shares held by related
parties.
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Annual Report 31 December 2012
Peter J Meers, BA (Economics), FAIB
Non-Executive Director Appointed on 11 February 2010
Peter Meers has broad business experience across a range of
industries including consumer, commercial and investment banking,
securities trading and origination, mining and exploration and
building materials.
Mr Meers held senior executive positions and portfolio
management roles in agribusiness, mining, property and trade
finance during a career spanning 25 years with ANZ Bank in
Australia and Asia.
Past directorships include appointment on company boards in
Malaysia, Indonesia and Singapore.
Executive Chairman & CEO of Hudson Resources Limited
Executive Deputy Chairman of Tiaro Coal Limited
Executive Deputy Chairman of Australian Bauxite Limited
Non-Executive Director of Sovereign Gold Company Limited
Non-Executive Director of Precious Metal Resources Limited
Non-Executive Director of Terragali Resources Bhd.
Non-Executive Director of Archer Exploration Limited
Member of the Remuneration Committee
Member of the Audit Committee
Other Current Directorships of
Listed Companies
Former Directorships in the Last
Three Years of Listed Companies
Special Responsibilities
Interests in Shares and Options
Nil
MANAGEMENT
David L Hughes
Julian Rockett, B.A., LL.B. GDLP
Joint Company Secretary
Mr Hughes has acted as Company Secretary since 2 December
1997. He has held similar positions with other listed companies for
over 30 years. He is also currently Joint Company Secretary of the
following listed public companies – Hudson Resources Limited,
Tiaro Coal Limited, Australian Bauxite Limited, Sovereign Gold
Company Limited, Raffles Capital Limited and Empire Energy Group
Limited. He is also Company Secretary for Latrobe Magnesium
Limited.
Joint Company Secretary
Mr Rockett was appointed to the position of Joint Company
Secretary on 27 July 2012. His background is in government
services and he has worked at a Sydney commercial litigation
practice. Mr Rockett is also the Joint Company Secretary of Hudson
Resources Limited, Precious Metal Resources and Tiaro Coal Limited
and provides secretarial assistance to Australian Bauxite Limited,
Raffles Capital Limited, and Sovereign Gold Company Limited. In
addition Mr Rockett provides in-house legal support to listed and
non-listed corporate entities.
Francis Choy MCom MBA FCPA
(HK) FCPA CA
Chief Financial Officer
Francis Choy has held a number of senior positions in corporate
financial management roles throughout Australia and South East
Asia. He has extensive experience in project finance, compliance,
acquisition and investment appraisals. He has been involved in
project finance, financial management of property development
and telecommunication projects in South East Asia. He held senior
financial roles for numerous public listed companies both in Hong
Kong and Australia.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
DIRECTORS’ MEETINGS ATTENDED
The number of Directors’ Meetings and Directors’ Committee Meetings held, and the number of these
meetings attended by each of the directors of the Company during the financial year were:
RETIREMENT, ELECTION AND CONTINUATION IN OFFICE BY DIRECTORS
Ms Juliana Tan is the Director retiring by rotation pursuant to Article 12.3 of the Company’s Constitution
and being eligible, offers herself for re-election.
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DirectorAttendedHeld Whilst in OfficeAttendedHeld Whilst in OfficeAttendedHeld Whilst in OfficeJohn W Farey99--22Juliana Tan9922--Peter J Meers992222Directors MeetingsRemuneration Committee MeetingsAudit Committee MeetingsFor personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
REMUNERATION REPORT - AUDITED
This report outlines the remuneration arrangements in place for Directors and Executives of the Company.
REMUNERATION COMMITTEE
The Remuneration Committee reviews and approves policy for determining Executive’s remuneration and any
amendments to that policy.
The Committee makes recommendations to the Board on the remuneration of Executive Directors (including
base salary, incentive payments, equity awards and service contracts) and remuneration issues for Non-
Executive Directors.
The members of the Company’s Remuneration Committee during the period were:
Juliana Tan
Peter J Meers
The Committee meets as often as required but not less than once per year.
The Committee met twice during the period and Committee members attendance record is disclosed in the
table of Directors Meetings shown on page 9.
Options granted to directors and key management personnel do not have performance conditions. As such the
Group does not have a policy for directors and key management personnel removing the “at risk” aspect of
options granted to them as part of their remuneration.
DIRECTORS’ AND OTHER KEY MANAGEMENT PERSONNEL REMUNERATION
The following persons were Directors of the Company during the financial year unless otherwise stated:
John W Farey
Juliana Tan
Peter J Meers
Executive Chairman
Executive Director
Non-Executive Director
The following persons were other key management personnel of Hudson Investment Group Limited during the
financial year:
Vincent Tan
David L Hughes
Julian Rockett
Francis Choy
CEO of Hudson Pacific Group Limited.
Joint Company Secretary
Joint Company Secretary
Chief Financial Officer
CASH BONUSES
Cash bonuses were granted during the financial year ended 31 December 2012.
PERFORMANCE CONDITIONS
The elements of remuneration as detailed within the Remuneration Report are dependent on the satisfaction
of the individual’s performance and Hudson Investment Group’s financial performance.
Executive’s remuneration and other terms of employment are reviewed annually having regard to relevant
comparative information and independent expert advice. As well as basic salary, remuneration packages
include superannuation. Directors are also able to participate in an Employee Share Plan.
Remuneration packages are set at levels that are intended to attract and retain executives capable of managing
the Group’s operations.
Consideration is also given to reasonableness, acceptability to shareholders and appropriateness for the
current level of operations.
Remuneration of Non-Executive Directors is determined by the Board based on recommendations from the
Remuneration Committee and the maximum amount approved by shareholders from time to time.
The Board undertakes an annual review of its performance and the performance of the Board Committees.
Details of the nature and amount of each element of the remuneration of each Director of the Company and
each specified executive of the Company are set out in the following tables. The remuneration amounts are
the same for the Company and the Group.
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Annual Report 31 December 2012
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The amounts reported represent the total remuneration paid by entities in the Group in relation to managing
the affairs of all the entities within the Group. The remuneration has not been allocated between the individual
entities within the Group as this would not be practicable.
There are no performance conditions related to any of the above payments.
There is no other element of Directors and other Key Management Personnel remuneration.
EXECUTIVE SERVICE AGREEMENTS
There were two service agreements in place formalising the terms of remuneration of Mr Farey and Ms Tan.
The agreements have no specific term and may be terminated by either party upon reasonable notice. The
Company may terminate the agreement in the event of serious misconduct by either party without any
compensatory payment. Please refer to Note 31 for details.
SHARE OPTIONS GRANTED TO DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL
There were no options granted during or since the end of the financial year to any of the Directors or other Key
Management Personnel of the Company and the Group as part of their remuneration. At the date of this report
there were no unissued shares under option to Directors or other Key Management Personnel of the Company.
End of Remuneration Report
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Consolidated 2012Post Employment BenefitsLong Term BenefitsSalary and other feesBonusTravelling AllowanceSuper-annuationLong Service LeaveTotal$$$$$$Directors John W Farey 105,000 - 10,800 9,450 3,742 128,992 Juliana Tan 205,000 - - 16,269 4,894 226,163 Peter J Meers - - - - - - Director - Total 310,000 - 10,800 25,719 8,636 355,155 Vincent Tan 240,000 - - 16,200 2,985 259,185 Francis Choy 210,462 - - 19,350 5,732 235,544 David L Hughes 40,209 - - - - 40,209 Julian Rockett 61,000 3,315 - 5,788 1,172 71,275 KMP - Total 551,671 3,315 - 41,338 9,889 606,213 Consolidated 2011Post Employment BenefitsLong Term BenefitsSalary and other feesBonusTravelling AllowanceSuper-annuationLong Service LeaveTotal$$$$$$Directors John W Farey 63,399 - 10,800 45,600 - 119,799 Juliana Tan 170,832 - - 15,375 11,845 198,052 Peter J Meers - - - - - - Director - Total 234,231 - 10,800 60,975 11,845 317,851 Vincent Tan 223,687 - - 33,013 2,998 259,698 Francis Choy 170,835 2,000 - 39,450 18,634 230,919 David L Hughes 50,946 2,000 - - - 52,946 KMP - Total 445,468 4,000 - 72,463 21,632 543,563 Short Term Employee BenefitsKMP KMP Short Term Employee BenefitsFor personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
DIRECTORS’ INTEREST
The relevant interest of each Director in the share capital of the Company as shown in the Register of Directors’
Shareholdings as at the date of this report is:
Particulars of Directors’ Interest in the Issued Capital of the Company
Juliana Tan has an indirect interest in 4,294,362 shares held by related parties.
Please refer to Note 31 of the financial statements for details.
SHARES UNDER OPTION
No options over issued shares or interests in the Company were granted during or since the end of the financial
year and there were no options outstanding at the date of this report.
LOANS TO DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL
Loans were made to Directors or specified Executives of the Company and the Group under the Employee
Share Plan during the period commencing at the beginning of the financial year and up to the date of this
report. Please refer to Note 31 for details.
DIRECTORS’ AND OFFICERS’ INDEMNITIES AND INSURANCE
During the financial year the Company paid an insurance premium, insuring the Company’s Directors, (as
named in this report), Company Secretary, Executive officers and employees against liabilities not prohibited
from insurance by the Corporations Act 2001.
A confidentiality clause in the insurance contract prohibits disclosure of the amount of the premium and the
nature of insured liabilities.
PROCEEDINGS ON BEHALF OF THE COMPANY
Other than the matter referred to in the Directors’ Report no person has applied to the Court under Section
237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in
any proceedings to which the Company is a party for the purposes of taking responsibility on behalf of the
Company for all or part of those proceedings.
No proceedings have been brought or intervened in or on behalf of the Company with leave of the Court under
Section 237 of the Corporations Act 2001.
ROUNDING OF AMOUNTS
The Company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities & Investments
Commission, relating to the “rounding off” of amounts in the Directors’ Report. Amounts 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.
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the Group are important.
Details of the amounts paid or payable to the auditor (K.S. Black & Co) for audit and non-audit services
provided during the year are set out below.
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Ordinary Shares (Number)Direct InterestEmployee Share PlanIndirect InterestTotalDirectorJohn Farey 10,000 6,728,032 - 6,738,032 Peter Meers - - - - Juliana Tan - - 4,294,362 4,294,362 For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
The Board of Directors has considered the position and, in accordance with advice received from the audit
committee, is satisfied that the provision of the non-audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision
of non-audit services by the auditor, as set out below, did not compromise the auditor’s independence
requirements of the Corporations Act 2001 for the following reasons:
all non-audit services have been reviewed by the audit committee to ensure they do not impact the
impartiality and objectivity of the auditor.
none of the services undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants.
AUDITOR’S REMUNERATION
During the year the following fees were paid or payable for services provided by the Auditor of the parent
entity, its related practices and non-related audit firms:
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AUDITOR’S INDEPENDENCE DECLARATION
The Auditor’s Independence Declaration as required under Section 307C of the Corporations Act 2001 has been
received and is set out on page 14.
AUDITOR
K.S. Black & Co continues in office in accordance with Section 327 of the Corporations Act 2001.
This Directors’ Report, incorporating the Remuneration Report, is signed in accordance with a Resolution of the
Board of Directors.
John W Farey
Executive Chairman
Signed at Sydney
27 March 2013
Juliana Tan
Director
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2012201120122011$$$$Audit services:Amounts paid or payable to auditors for audit and review of the financial report for the entity or any entity in the GroupAudit and review services fees 26,195 14,945 26,195 14,945 Taxation and other advisory services:Amounts paid or payable to the Auditor for non audit taxation services for the entity or any entity in the Group for review and lodgement of the income tax return Taxation services 8,135 7,745 8,135 7,745 Advisory services 5,050 - - - Total 13,185 7,745 8,135 7,745 ConsolidatedParent EntityFor personal use only
For personal use only Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
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CORPORATE GOVERNANCE STATEMENT
Overview
The Company and the Board of Directors are committed to achieving and demonstrating the highest standards
of corporate governance and aim to comply with the “Principles of Good Corporate Governance and Best
Practice Recommendations” set by the ASX Corporate Governance Council.
However, given the current size of both the Company's operations and the Board of Directors, it is not
appropriate, cost effective or practical to comply fully with those principles and recommendations.
Where a recommendation has not been followed this fact has been disclosed together with the reasons for the
departure.
Consistent with the ASX best practice recommendations, the Company’s corporate governance practices are
regularly reviewed and are available on the Company’s website.
Compliance with ASX Corporate Governance Council best practice recommendations
The ASX listing rules requires public listed companies to include in their annual report a statement regarding
the extent to which they have adopted the ASX Corporate Governance Council best practice recommendations.
This statement provides details of the Company’s adoption of the best practice recommendations.
Principle 1 – Lay solid foundations for management and oversight.
Companies should establish and disclose the respective roles and responsibilities of board and
management.
Board Responsibilities
The Board of Directors is accountable to shareholders for the performance of the Group. In carrying out its
responsibilities, the Board undertakes to serve the interest of shareholders honestly, fairly and diligently.
The Board’s responsibilities are encompassed in a formal charter published on the Company’s website. The
charter is reviewed annually to determine whether any changes are necessary or desirable.
The responsibilities of the Board include:
reporting to shareholders and the market;
ensuring adequate risk management processes exist and are complied with;
reviewing internal controls and external audit reports;
ensuring regulatory compliance;
monitoring financial performance, including approval of the annual and half-yearly financial reports
and liaison with the Company’s auditors;
reviewing the performance of senior management;
monitoring the Board composition, Director selection and Board processes and performance;
validating and approving corporate strategy;
reviewing the assumptions and rationale underlying the annual plans and approving such plans; and
authorising and monitoring major investment and strategic commitments.
Director’s Education
The Company issues a formal letter of appointment for new directors setting out the terms and conditions
relevant to that appointment and the expectations of the role of the director.
The Company also provides a formal induction process which provides key information on the nature of the
business and its operations.
Continuing education is provided via the regular Board updates provided by the divisional chief executives.
Role of Chairman and Chief-Executive Officer
The Chairman is also the Chief Executive Officer (CEO), and is responsible for leading the Board, ensuring
that Board activities are organised and efficiently conducted and for ensuring the Directors are properly
briefed for meetings. The Chairman is also responsible for implementing the Consolidated Entity’s strategies
and Board policies.
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Annual Report 31 December 2012
The CEO has been delegated responsibility for managing the day to day operations of the Company.
A formal charter is in place which lays out the duties and responsibilities of the CEO.
This charter also requires that the responsibilities and accountabilities of both the Board of directors and
the CEO are clearly defined. The assessment and monitoring of the CEO is the responsibility of the Board.
Performance is assessed against pre-determined objectives on a regular basis.
The Chairman’s other responsibilities include:
Ensuring that general meetings are conducted efficiently and that shareholders have adequate
opportunity to air their views and obtain answers to their queries.
Present the view of the Board formally.
Principle 2 – Structure the Board to add value
Companies should have a board of an effective composition, size and commitment to adequately discharge
its responsibilities and duties.
Board of Directors
Composition of the Board
The Board is comprised of two Executive Directors and one Non-Executive Director all of whom have a
broad range of skills and expertise.
The Chairman is also the Chief Executive Officer of the Company.
There is only one independent Director.
Each Director’s independent status is regularly assessed by the Board.
In determining independence the Board has regard to the guidelines of director’s independence in the ASX
Corporate Governance Council and Best Practice Recommendations and other best practice guidelines.
The Company does not comply with recommendations 2.1, 2.2 and 2.3 which recommend that a majority of
the Board should be independent directors. The chairman should be an independent director and the roles
of the chairman and chief executive officer should not be exercised by the same individual.
At this stage of the Company’s development, the Board considers it neither appropriate nor cost effective
for there to be a majority of independent directors, an independent chairman and a separate chief
executive officer.
This matter continues to be under review and as circumstances allow, consideration will be given to the
appropriate time to move to adopting the ASX Corporate Governance Guidelines.
The Board considers that its composition provides for the timely and efficient decision making required for
the Company in its current circumstances.
The Board’s size and composition is subject to limits imposed by the Company’s constitution which provides
for a minimum of three directors and a maximum of ten.
Details of the members of the Board, their experience, expertise and qualifications are set out in the
Directors’ Report on pages 7 to 8.
The position / status and term in office of each director at the date of this report is as follows:
Name of Director
John W Farey
Juliana Tan
Peter J Meers
Position/Status
Executive Chairman/ Non-independent 11 years 2 months
Executive Director / Non-Independent
Non-Executive Director / Independent
6 years 7 months
3 years 1 month
Term in Office
The Board currently holds 6 scheduled meetings each year together with any ad hoc meetings as may be
necessary. The Board met 9 times during the year and Directors’ attendance is disclosed in the Directors’
Report on page 9.
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Access to Independent Professional Advice
All directors are required to bring an independent judgement to bear on board decisions.
To facilitate this, each Director has the right of access to all relevant Company information and to the
Company’s Executives. The Directors also have access to external resources as required to fully discharge
their obligations as Directors of the Company. The use of this resource is co-ordinated through the
Chairman of the Board.
Nomination Committee
The Board has not yet formed a separate Nominations Committee. All matters that would normally be the
responsibility of a Nominations Committee are dealt with by the full Board of Directors.
The Board reviews its composition on an annual basis to ensure that the Board has the appropriate mix of
expertise and experience. When a vacancy exists, for whatever reason, or where it is considered that the
Board would benefit from the services of a new director with particular skills, the Board will select
appropriate candidates with relevant qualifications, skills and experience. External advisers may be used to
assist in such a process. The Board will then appoint the most suitable candidate who must stand for
election at the next general meeting of shareholders.
For Directors retiring by rotation, the Board assesses the Director before recommending re-election.
The Company has not adopted recommendation 2.4 and formed a separate Nomination Committee, as the
Board considers that the Company and the Board are not of sufficient size to warrant the establishment of a
separate Nomination Committee
Board Performance Evaluation
The Company has processes in place to review the performance of the Board and its committees and
individual Directors. Each year the Board of Directors give consideration to broad corporate governance
matters, including the relevance of existing committees and to reviewing its own and individual Directors’
performance. The Chairman is responsible for monitoring the contribution of individual Directors and
consulting with them in any areas of improvement.
Individual Directors use an approved form to assess the performance of the Board and the Chairman.
Principle 3 – Promote ethical and responsible decision making.
Companies should actively promote ethical and responsible decision making.
Code of Conduct
The Board acknowledges the need for continued maintenance of the highest standards of Corporate
Governance Practices and ethical conduct by all Directors and employees of the Group.
The Company has established a code of conduct applicable to all Directors and employees. The
requirement to comply with the code is mandatory and is communicated to all employees. The code sets
out standards of conduct, behaviour and professionalism.
The shareholder communications strategy, the securities trading policy and the continuous disclosure policy
collectively form a solid foundation for the Company’s ethical practices.
A copy of the Company’s Code of Conduct has been posted on the Company’s website.
Approach to diversity
The Board recognises the benefits of diversity at boards in senior management and within the organisation
generally and recognises the organisational strengths, deeper problem solving ability and opportunity for
innovation that diversity brings to an organisation.
The Company has established a diversity policy which set out the beliefs, goals and strategies of the
Company and makes reference to all the characteristics that makes individuals different from each other.
The policy sets out the positive steps taken to ensure that current and prospective employees are not
discriminated against, either directly or indirectly on such characteristics as gender, age, disability, marital
status, sexual orientation, religion, ethnicity or any other area of potential difference. The Company is
committed to gender diversity at all levels of the organisation. Gender equality is a key component of the
Company's' diversity strategy. The implementation of this policy aims to reflect both the circumstances of
the Company and the industry in which it operates.
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Annual Report 31 December 2012
The Company's diversity policy includes a requirement that:
the Board establish measurable objectives for achieving gender diversity; and
the Board assess annually the objectives set for achieving gender diversity; and
the Board assess annually the progress made towards achieving the objectives set.
In accordance with this policy and ASX corporate governance principles, the Board has established the
following objectives in relation to gender diversity. The aim is to achieve these objectives over the coming 3
to 5 years as Director and senior executive positions become vacant and appropriately skilled candidates
are available.
Representation of female employees in the organisation workforce is as follows:
A copy of the Company’s diversity policy has been posted on the Company’s website.
Policy on Dealing in Company Securities
The Company has adopted a policy on how Directors, Key Management personnel, contractors and all other
employees can deal in the securities of the Company.
This policy aims to ensure that the reputation of the Company is not adversely impacted by perceptions of
trading in the Company’s securities at inappropriate times or in an inappropriate manner.
In addition to the specific prohibition on insider trading, Directors and all other employees must also not
deal in the Company’s securities during the following periods:
Within 1 month immediately preceding and 48 hours immediately following the release by the
Company of its annual results to the ASX;
Within 1 month immediately preceding and 48 hours immediately following the release by the
Company of its half-yearly results to the ASX;
Within 2 weeks immediately preceding and 48 hours immediately following the Company’s Annual
General Meeting; and
Other periods as advised by the Board or Chief Executive Officer.
Requests to trade during the closed periods may be considered in exceptional circumstances. At all other
times Directors, Key Management Personnel and all other employees are not permitted to buy or sell
securities in the Company without first obtaining written consent from the Chairman. When the Chairman
trades Company securities written approval has to be obtained from an Independent Director.
The Company has introduced compliance standards and procedures to ensure that the policy is properly
implemented. In addition there is also an internal review mechanism to assess compliance and
effectiveness.
A copy of the Company’s Share Trading Policy was lodged with the ASX Company Announcements Office
and is also posted on the Company’s website.
Principle 4 – Safeguard integrity in financial reporting
Companies should have a structure to independently verify and safeguard the integrity of their financial
reporting.
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NumberPercentageNumberPercentageNumberPercentageWhole organisation 21 34% 25 38% - - Senior Executive Positions 3 33% 4 33% - - Board Members 1 33% 1 33% - - Actual at 31 December 2012Company ObjectiveProgress towards meeting objectiveFor personal use only
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Annual Report 31 December 2012
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Audit Committee
The Board has established an audit committee comprising one non-executive director and one executive
director who is also the chairman. All the members of the committee have appropriate and relevant
financial experience.
The members of the audit committee during the year were:
Mr John W Farey - Chairman
Mr Peter J Meers
The committee met twice during the year and the members’ attendance records are disclosed in the table
of Directors’ meetings included in the Directors’ Report on page 9.
The committee has a formal charter which has been reviewed by the committee and the Board. A copy of
the Formal Charter is posted on the Company’s website.
The minutes of the committee meetings are reviewed at the subsequent meeting of the Board and the
Chairman of the committee reports on the committees conclusions and recommendations.
The responsibilities of the Audit Committee include:
reviewing the annual and half year financial reports to ensure compliance with Australian
Accounting Standards and generally accepted accounting principles;
monitoring corporate risk management practices;
review and approval of the Group’s accounting policies and procedures;
reviewing the nomination, performance and independence of the external auditors; and
organising, reviewing and reporting on any special reviews or investigations deemed necessary by
the Board.
The structure of the audit committee does not comply with recommendations 4.2 in that it does not consist
of only non-executive directors, have at least 3 members and is chaired by an independent director who is
not the chair of the company. The Board considers that the Company and its operations are not of
sufficient size to justify the adoption of the ASX Corporate Governance guideline. This matter continues to
be under review and as circumstances allow consideration will be given to the appropriate time to adopt
the ASX Corporate Governance Guideline.
The audit committee has received confirmation in writing from the Chief Executive Officer and Chief
Financial Officer that:
The Company’s Financial Report for the financial year ended 31 December 2012 presents a true and fair
view in all material respects of the Company’s financial position and operational result and are in
accordance with relevant accounting standards.
External Auditors
The full Board is responsible for the appointment, removal and remuneration of the external auditors, and
reviewing the terms of their engagement, and the scope and quality of the audit. In fulfilling its
responsibilities, the Board receives regular reports from management and the external auditors at least
once a year, or more frequently if necessary. The external auditors have a clear line of direct
communication at any time to the Chairman of the Board.
The current auditor, K.S. Black & Co, was appointed in 2009. The Australian accounting bodies’ statement
on professional independence requires mandatory rotation of audit partners for listed companies every five
years. K.S. Black & Co confirms that they conform with the requirements of this statement.
K.S. Black & Co is required to attend the Annual General Meeting and be available to answer shareholder
questions about the conduct of the audit and the preparation and content of the Auditor's Report.
Principle 5 – Make timely and balanced disclosure
Companies should promote timely and balanced disclosure of all material matters concerning the Company.
The Company has a written policy on information disclosure that focuses on continuous disclosure of any
information concerning the Company and its controlled entities that a reasonable person would expect to
have a material effect on the price of the Company’s securities.
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Annual Report 31 December 2012
The Company Secretary in consultation with the Chairman, is responsible for communications with the ASX.
He is also responsible for ensuring compliance with the continuous disclosure requirements of the ASX
Listing Rules, and overseeing and co-ordinating information disclosure to the ASX, analysts, brokers,
shareholders, the media and the general public.
A copy of the Company’s policy of continuous disclosure is posted on the Company’s website.
Principle 6 – Respect the rights of shareholders
Companies should respect the rights of shareholders and facilitate the effective exercise of those rights.
Communication with Shareholders
The Board recognises and respects the rights of our shareholders as the beneficial owners of the Company.
In order to facilitate the effective exercise of those rights, the Company has adopted a shareholder
communications policy that aims to empower shareholders by:
communicating effectively with them;
providing easy access to balanced and understandable information about the Company; and
encouraging and facilitating shareholder participation in general meetings.
The Company achieves this through the following avenues:
(i). Regular mailings
The Company provides shareholders with copies of all announcements made to the ASX by mail on
request. Copies are also available via an electronic link to the ASX web site, ensuring that all
shareholders are kept informed about the Company.
Shareholders also have the option of receiving a hard copy of the Annual Report each year.
(ii). General meetings
All shareholders are invited to attend the Annual General Meetings which are held at the
Company’s Head Office in Sydney. The full Board and senior executives are present and available
to answer questions from the floor, as are the External Auditor and a representative from the
Company’s legal advisors.
(iii). A copy of the Company’s Shareholder Communications Policy is posted on the Company’s website.
The Company also posts Corporate Information in the Investor section of its Company website at
www.higl.com.au.
Principle 7 – Recognise and manage risk
Companies should establish a sound system of risk oversight and management and internal control.
The Board oversees the establishment, implementation and review of the Company’s Risk management
System. To ensure it meets its responsibilities, the Board has implemented appropriate systems for
identifying, assessing, monitoring and managing material risk throughout the organisation.
Management is required to provide monthly status reports to the Board which identify potential areas of
business risk arising from changes in the financial and economic circumstances of its operating
environment.
The Board regularly assesses the Company’s performance in light of risks identified by such reports.
Management are also required to design implement and review the Company’s risk management and
internal control system. The Board reviews the effectiveness of the implementation of the Company’s risk
management and internal control systems on a regular basis.
The Board does not employ an internal auditor, although as part of the Company’s strategy to implement
an integrated framework of control, the Board requested the external auditors review internal control
procedures. Recommendations once presented are considered by the Board.
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The Executive Chairman and Chief Financial Officer have stated in writing to the Board that:
The Company’s financial reports present a true and fair view in all material respects of the
Company’s financial condition and operating results and are in accordance with relevant
accounting standards.
The integrity of the financial statements is founded on a sound system of risk management and
internal compliance and control which implements the policies adopted by the Board.
The Company’s risk management and internal compliance and control system is operating
efficiently in all material respects.
The Board requires this declaration to be made bi-annually.
Principle 8 – Remunerate fairly and responsibly
Companies should ensure that the level and composition of remuneration is sufficient and reasonable and
that its relationship to performance is clear.
The Board has established a remuneration committee. The Committee comprised the following members
during the year:
Peter J Meers
Juliana Tan
The Company does not comply with recommendation 8.2 in that the Remuneration Committee is not
structured so that it consists of a majority of independent directors and has at least three members.
The Board considers that the Company is not of sufficient size to warrant the appointment of additional
members.
The Committee meets as often as required, but no less than once per year.
The Committee has adopted a formal charter, a copy of which is posted on the Company’s website.
The main responsibilities of the Committee are to:
review and approve the Group’s policy for determining executive remuneration and any
amendments to that policy;
review the on-going appropriateness and relevance of the policy
consider and make recommendations to the Board on the remuneration of executive Directors
(including base salary, incentive payments, equity awards and service contracts);
review and approve the design of all equity based plans;
review and approve the total proposed payments under each plan; and
review and approve the remuneration levels for non-executive Directors.
The Committee met twice during the year and the Committee Members Attendance Record is disclosed in
the Table of Directors Meetings included in the Directors’ Report at page 9.
Executive Directors and Executive Remuneration
The remuneration committee reviews and approves the policy for determining executives’ remuneration
and any amendments to that policy.
Executive remuneration and other terms of employment are reviewed annually having regard to relevant
comparative information and independent expert advice.
Remuneration packages include basic salary, superannuation and the rights of participation in the
Company’s Share Option Plan and Employee Share Purchase Plan.
Remuneration packages are set at levels that are intended to attract and retain executives capable of
effectively managing the Company’s operations.
Consideration is also given to reasonableness, acceptability to shareholders and appropriateness for the
current level of operations.
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Non-Executive Directors
Remuneration of Non-Executive Directors is determined by the Board based on recommendations from the
remuneration committee, relevant comparative information, independent expert advice and the maximum
amount approved by shareholders from time to time.
Non-Executive Directors have the right to participate in the Company’s Share Option Plan and Employee
Share Purchase Plan.
Further information on directors and executive remuneration is included in the remuneration report which
forms part of the directors’ report.
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Annual Report 31 December 2012
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2012
The above Statement should be read in conjunction with the accompanying notes.
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2012201120122011Notes$’000$’000$’000$’000Revenue from continuing operations4 15,190 15,853 - - Cost of sales (7,945) (9,859) - - Gross profit 7,245 5,994 - - Other income5 1,548 4,200 50 - Change in fair value of investment properties (507) (4,963) - - Administration expenses6 (a) (5,285) (3,345) (73) (60)PROFIT/(LOSS) BEFORE TAX AND FINANCE INCOME AND EXPENSES 3,001 1,886 (23) (60)Finance income6 (b) 905 350 - - Finance expenses6 (c) (3,257) (3,029) (1) (1)Share of profit of equity accounted investee 600 (679)PROFIT/(LOSS) BEFORE INCOME TAX EXPENSE 1,249 (1,472) (24) (61)Income tax benefit/(expense)7 - - - - PROFIT/(LOSS) AFTER TAX FOR THE YEAR 1,249 (1,472) (24) (61)TOTAL COMPREHENSIVE INCOMEOther comprehensive income for the year net of tax - - - - Total comprehensive income for the year 1,249 (1,472) (24) (61)Profit attributable to minority equity interest - - - - TOTAL COMPREHENSIVE INCOME / (LOSS) ATTRIBUTABLE TO MEMBERS OF THE PARENT ENTITY 1,249 (1,472) (24) (61)CentsCentsBasic earnings/(loss) per share (cents)230.48(0.57)Diluted earnings/(loss) per share (cents)230.48(0.57)Consolidated Parent EntityFor personal use only
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Annual Report 31 December 2012
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2012
The above Statement should be read in conjunction with the accompanying notes.
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2012201120122011Notes$’000$’000$’000$’000ASSETSCURRENT ASSETSCash and cash equivalents8235 466 11 1 Trade and other receivables98,802 4,992 - - Financial assets104,842 5,918 - - Inventories113,448 1,192 - - Other current assets12220 294 33 32 TOTAL CURRENT ASSETS17,547 12,862 44 33 NON-CURRENT ASSETSReceivables9125 - - 1,246 Property, plant and equipment132,945 2,858 - - Investment properties1439,863 39,840 - - Financial assets157,769 7,682 28,936 27,725 Other non-current assets92 - - - TOTAL NON-CURRENT ASSETS 50,794 50,380 28,936 28,971 TOTAL ASSETS68,341 63,242 28,980 29,004 LIABILITIESCURRENT LIABILITIES Trade and other payables163,112 2,483 - - Financial liabilities172,643 8,057 - - Employee benefits provision18408 322 - - Other liabilities19584 923 30 30 Provisions20- - - - TOTAL CURRENT LIABILITIES 6,747 11,785 30 30 NON-CURRENT LIABILITIES Payables164,196 - - - Financial liabilities1724,968 20,265 - - Deferred tax liability7490 490 - - Other liabilities193,509 3,558 - - Provisions20325 290 - - TOTAL NON-CURRENT LIABILITIES 33,488 24,603 - - TOTAL LIABILITIES 40,235 36,388 30 30 NET ASSETS28,106 26,854 28,950 28,974 EQUITYIssued Capital2152,040 52,040 52,040 52,040 Reserves22 (a)5,627 5,624 - - Accumulated losses22 (b)(29,561) (30,810) (23,090) (23,066) Total equity attributable to equity holders of the parent entity28,106 26,854 28,950 28,974 Minority interest- - - - TOTAL EQUITY 28,106 26,854 28,950 28,974 Consolidated Parent EntityFor personal use only
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Annual Report 31 December 2012
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2012
The above Statement should be read in conjunction with the accompanying notes.
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ConsolidatedIssued CapitalReservesAccumulated LossesMinority InterestsTotal Equity$’000$’000$’000$’000$’000Balance at 1 January 2012 52,040 5,624 (30,810) - 26,854 Profit/(Loss) for the year - - 1,249 - 1,249 Currency translation difference - 3 - - 3 Balance at 31 December 2012 52,040 5,627 (29,561) - 28,106 Balance at 1 January 2011 52,040 5,592 (29,338) - 28,294 Loss for the year - - (1,472) - (1,472)Currency translation difference - 32 - - 32 Balance at 31 December 2011 52,040 5,624 (30,810) - 26,854 Parent EntityIssued CapitalReservesAccumulated LossesMinority InterestsTotal Equity$’000$’000$’000$’000$’000Balance at 1 January 2012 52,040 - (23,066) - 28,974 Profit/(loss) for the year - - (24) - (24)Balance at 31 December 2012 52,040 - (23,090) - 28,950 Balance at 1 January 2011 52,040 - (23,005) - 29,035 Profit/(loss) for the year - - (61) - (61)Balance at 31 December 2011 52,040 - (23,066) - 28,974 For personal use only
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Annual Report 31 December 2012
STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 31 DECEMBER 2012
The above Statement should be read in conjunction with the accompanying notes.
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Notes2012201120122011$’000$’000$’000$’000Cash flows from operating activitiesReceipts from customers 15,476 17,417 - - Payments to suppliers and employees (11,825) (13,291) (24) (67)Interest paid (2,435) (2,565) - - Interest received 7 350 - - Net cash provided by/(used in) operating activities25 (a) 1,223 1,911 (24) (67)Cash flows from investing activitiesProceeds from sale of investments 9,447 - - - Proceeds from sale of property - 2,227 - - Proceeds from sale of mining tenements - 4,500 - - Advance to other parties (772) - - - Payments for investment properties improvements (530) (47) - - Payments for purchases of investments (8,552) (5,406) (1,212) (1,965)Payments for property, plant and equipment (336) (224) - - Net cash provided by/(used in) investing activities (743) 1,050 (1,212) (1,965)Cash flows from financing activitiesProceeds from / (repayment) of advances - 373 1,246 2,031 Drawdown from borrowings 10,909 699 - - Repayment of borrowings (11,620) (4,112) - - Net cash provided by/(used in) financing activities (711) (3,040) 1,246 2,031 Net increase/(decrease) in cash and cash equivalents (231) (79) 10 (1)Cash and cash equivalents at the beginning of the year 466 545 1 2 Cash and cash equivalents at the end of the year8 235 466 11 1 ConsolidatedParent EntityFor personal use only
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Annual Report 31 December 2012
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
1.
CORPORATE INFORMATION
The financial report of the Company for the year ended 31 December 2012 was authorised for issue in
accordance with a resolution of the directors and covers Hudson Investment Group Limited (the
Company) as the parent entity as well as the group consisting of Hudson Investment Group Limited and
its subsidiaries as required by the Corporations Act 2001 (the Group).
The financial report is presented in Australian currency.
Hudson Investment Group Limited is a company limited by shares incorporated in Australia whose shares
are publicly traded on the Australian Securities Exchange.
2.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
a.
Basis of preparation
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This general purpose financial report has been prepared in accordance with Australian Accounting
Standards, Australian Accounting Interpretations, other authoritative pronouncement of the
Australian Accountancy Standards Board and the Corporations Act 2001.
Statement of Compliance
Australian Accounting Standards ('AASBs') include Australian equivalents to International Financial
Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report of Hudson
Investment Group Limited also complies with International Financial Reporting Standards.
Critical accounting estimates and judgements
Details of critical accounting estimates and assumptions about the future made by management at
reporting date are set out below:
–
Impairment of assets
The Company assess impairment at each reporting date by evaluating conditions specific to
the Group that may lead to impairment of assets. Where an impairment trigger exists, the
recoverable amount of the asset is determined. Calculations performed in assessing
recoverable amounts incorporate a number of key estimates.
Critical judgements
Management have made the following judgements when applying the Group's accounting policies:
– Recognition of deferred tax assets
In line with the Group’s accounting policy (Note 2f) and as disclosed in Note 7, deferred tax
assets have not been recognised.
– Measurement of financial assets
If there is an active market for financial assets they have been fair valued in line with market
prices, if not they are carried at cost.
Historical cost convention
These financial statements have been prepared on an accruals basis and are based on the historical
cost convention except for where noted in these accounting policies.
Material accounting policies adopted in the preparation of these financial statements are presented
below and have been consistently applied unless otherwise stated.
ASIC Class Order 98/100
The Company is of a kind referred to in ASIC Class Order 98/0100, issued by the Australian Securities
and Investments Commission, relating to the 'rounding off' of amounts in the financial report.
Amounts in the financial report have been rounded off in accordance with that Class Order to the
nearest thousand dollars, or in certain cases, the nearest dollar.
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STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
b.
Principles of consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of
Hudson Investment Group Limited (“the parent entity”) as at the reporting date and the results of
all subsidiaries for the year then ended. Hudson Investment Group Limited and its subsidiaries
together are referred to in this financial report as the Group.
Subsidiaries are all those entities over which the Group has the power to govern the financial and
operating policies so as to obtain benefits from the entity’s activities, generally accompanying a
shareholding of more than one-half of the voting rights. The existence and effect of potential voting
rights that are currently exercisable or convertible are considered when assessing whether the
Group controls another entity.
Subsidiaries 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 financial performance of those entities
are included only for the period of the year that they were controlled.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the
Group.
Intercompany transactions, balances and unrealised gains on transactions between Group
companies are eliminated. Unrealised losses are also eliminated unless the transaction provides
evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the Group.
Minority interests in the results and equity of subsidiaries are shown separately in the consolidated
Statement of Comprehensive Income and Statement of Financial Position respectively.
Investments in subsidiaries are accounted for at cost in the individual financial statements of
Hudson Investment Group Limited.
c.
Segment reporting
A business segment is a group of assets and operations engaged in providing products or services
that are subject to risks and returns that are different to those of other business segments. A
geographical segment is engaged in providing products or services within a particular economic
environment and is subject to risks and returns that are different from those of segments operating
in other economic environments. Reporting to management by segments is on this basis
d.
Foreign currency transactions and balances
(i). Functional and 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’). The financial statements are presented in Australian dollars, which is
Hudson Investment Group Limited’s functional and presentation 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 year-end exchange rates
of monetary assets and liabilities denominated in foreign currencies are recognised in the
Statement of Comprehensive Income.
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2. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
(iii). Group companies
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 Statement of Financial Position presented are translated at
the closing rate at the date of that Statement of Financial Position;
income and expenses for each Statement of Comprehensive Income are translated at
average exchange rates (unless this is not a reasonable approximation of the cumulative
effect of the rates prevailing on the transaction dates, in which case income and expenses
are translated at the dates of the transactions);
retained earnings are translated at the exchange rates prevailing at the date of
transactions; and
all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of any net investment in
foreign entities, and of borrowings and other currency instruments designated as hedges of
such investments, are taken to shareholders’ equity. When a foreign operation is sold or
borrowings repaid a proportionate share of such exchange differences are recognised in the
Statement of Comprehensive Income as part of the gain or loss on sale where applicable.
e.
Revenue recognition
Revenue is recognised at the fair value of consideration received or receivable. Amounts disclosed
as revenue are net of returns, trade allowances and duties and taxes paid. The following specific
recognition criteria must also be met before revenue is recognised:
Sale of Goods
Revenue from sale of goods is recognised when the significant risks and rewards of ownership have
passed to the buyer and can be reliably measured. Risks and rewards are considered passed to
buyer when goods have been delivered to the customer.
Interest
Interest revenue is recognised as it accrues taking into account the effective yield on the financial
asset
Rental Income
Rental income on investment properties is accounted for on a straight-line basis over the lease
term. Contingent rentals are recognised as income in the periods when they are earned.
All revenue is stated net of the amount of goods and services tax (GST).
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STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
f.
Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s
taxable income based on the income tax rate adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences between the tax bases of assets and liabilities and
their carrying amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates
expected to apply when the assets are recovered or liabilities are settled, based on those tax rates
which are enacted or substantively enacted. The relevant tax rates are applied to the cumulative
amounts of deductible and taxable temporary differences to measure the deferred tax asset or
liability. An exception is made for certain temporary differences arising from the initial recognition
of an asset or a liability. No deferred tax asset or liability is recognised in relation to these
temporary differences if they arose in a transaction, other than a business combination, that at
the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses
only if it is probable that future taxable amounts will be available to utilise those temporary
differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the
carrying amount and tax bases of investments in controlled entities where the parent entity is
able to control the timing of the reversal of the temporary differences and it is probable that the
differences will not reverse in the foreseeable future.
Current and deferred tax balances attributable to amounts recognised directly in equity are also
recognised directly in equity.
The Company and its wholly owned entities are part of a tax-consolidated group under Australian
taxation law. Hudson Investment Group Limited is the head entity in the tax-consolidated group.
Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary
differences of the members of the tax-consolidated group are recognised in the separate financial
statements of the members of the tax-consolidated group using the ‘separate taxpayer within
group’ approach. Current tax liabilities and assets and deferred tax assets arising from unused tax
losses and tax credits of the members of the tax-consolidated group are recognised by the
Company (as head entity in the tax-consolidated group).
The amounts receivable/payable under tax funding arrangements are due upon notification by the
entity which is issued soon after the end of each financial year. Interim funding notices may also
be issued by the head entity to its wholly owned subsidiaries. These amounts are recognised as
current inter-company receivables or payables.
g.
Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
where the GST incurred on a purchase of goods and services is not recoverable from the
taxation authority, in which case the GST is recognised as part of the cost of acquisition
of the asset or as part of the expense item as applicable; and
receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part
of receivables or payables in the Statement of Financial Position.
Cash flows are included in Statement of Cash Flows on a gross basis except for the GST
component of cash flows arising from investing and financing activities, which is recoverable from,
or payable to, the taxation authority, are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or
payable to, the taxation authority.
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STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
h.
Cash and cash equivalents
For the purposes of the Statement of Cash Flows, cash includes cash and cash equivalents on hand
and at call deposits with banks or financial institutions, investment in money market instruments
maturing within less than 2 months, net of bank overdrafts.
i.
Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised
cost, less provision for doubtful debts. Trade receivables are due for settlement no more than 60
days from the date of recognition.
Collectibility of trade receivables is reviewed on an ongoing basis. Debts which are known to be
uncollectible are written off. A provision for doubtful receivables is established when there is
objective evidence that entities in the Group will not be able to collect all amounts due according
to the original terms of receivables.
j.
Inventories
Inventories include raw materials, work in progress and finished goods.
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct
materials, direct labour and an appropriate proportion of variable and fixed overhead
expenditure, the latter being allocated on the basis of normal operating capacity. Costs are
assigned to individual items of inventory on the basis of weighted average costs. Net realisable
value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
k.
Impairment of assets
Assets are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash flows (cash generating units).
Non-financial assets that suffered an impairment are reviewed for possible reversal of the
impairment at each reporting period.
l.
Financial instruments
Recognition and initial measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the
contractual provisions to the instrument. For financial assets, this is equivalent to the date that
the company commits itself to either the purchase or sale of the asset (i.e. trade date accounting
is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the
instrument is classified ‘at fair value through profit or loss’, in which case transaction costs are
expensed to profit or loss immediately.
Classification and subsequent measurement
Finance instruments are subsequently measured at either of fair value, amortised cost using the
effective interest rate method, or cost. Fair value represents the amount for which an asset could
be exchanged or a liability settled, between knowledgeable, willing parties. Where available,
quoted prices in an active market are used to determine fair value. In other circumstances,
valuation techniques are adopted.
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2.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
Amortised cost is calculated as:
(a) the amount at which the financial asset or financial liability is measured at initial recognition;
(b) less principal repayments;
(c) plus or minus the cumulative amortisation of the difference, if any, between the amount
initially recognised and the maturity amount calculated using the effective interest method;
and
(d) less any reduction for impairment.
The effective interest method is used to allocate interest income or interest expense over the
relevant period and is equivalent to the rate that exactly discounts estimated future cash
payments or receipts (including fees, transaction costs and other premiums or discounts)
through the expected life (or when this cannot be reliably predicted, the contractual term) of
the financial instrument to the net carrying amount of the financial asset or financial liability.
Revisions to expected future net cash flows will necessitate an adjustment to the carrying
value with a consequential recognition of an income or expense in profit or loss.
The Group does not designate any interests in subsidiaries, associates or joint venture entities
as being subject to the requirements of accounting standards specifically applicable to
financial instruments.
(i). Financial assets at fair value through profit or loss
Financial assets are classified at ‘fair value through profit or loss’ when they are either
held for trading for the purpose of short-term profit taking, derivatives not held for
hedging purposes, or when they are designated as such to avoid an accounting mismatch
or to enable performance evaluation where a group of financial assets is managed by key
management personnel on a fair value basis in accordance with a documented risk
management or investment strategy. Such assets are subsequently measured at fair
value with changes in carrying value being included in profit or loss.
(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 subsequently measured at
amortised cost.
Loans and receivables are included in current assets, except for those which are not
expected to mature within 12 months after reporting date. (All other loans and
receivables are classified as non-current assets.)
(iii). Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed
maturities and fixed or determinable payments, and it is the Group’s intention to hold
these investments to maturity. They are subsequently measured at amortised cost.
Held-to-maturity investments are included in non-current assets, except for those which
are expected to mature within 12 months after reporting date. (All other investments are
classified as current assets.)
If during the period the Group sold or reclassified more than an insignificant amount of
the held-to-maturity investments before maturity, the entire held-to-maturity
investments category would be tainted and reclassified as available-for-sale.
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STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
(iv). Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either
not suitable to be classified into other categories of financial assets due to their
nature, or they are designated as such by management. They comprise investments in
the equity of other entities where there is neither a fixed maturity nor fixed or
determinable payments.
Available-for-sale financial assets are included in non-current assets, except for those
which are expected to be disposed of within 12 months after reporting date. (All
other financial assets are classified as current assets.)
(v). Financial Liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently
measured at amortised cost.
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation
techniques are applied to determine the fair value for all unlisted securities, including recent
arm’s length transactions, reference to similar instruments and option pricing models.
Impairment
At the end of each reporting period, the Group assesses whether there is objective evidence
that a financial instrument has been impaired. In the case of available-for-sale financial
instruments, a prolonged decline in the value of the instrument is considered to determine
whether impairment has arisen. Impairment losses are recognised in the statement of
comprehensive income.
De-recognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or
the asset is transferred to another party whereby the entity no longer has any significant
continuing involvement in the risks and benefits associated with the asset. Financial liabilities
are derecognised where the related obligations are either discharged, cancelled or expired. The
difference between the carrying value of the financial liability extinguished or transferred to
another party and the fair value of consideration paid, including the transfer of non-cash assets
or liabilities assumed, is recognised in profit or loss.
m.
Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and
measurement or for disclosure purposes.
The fair value of financial instruments traded in active markets is based on quoted market prices
at the Statement of Financial Position date. The quoted market price used for financial assets
held by entities in the Group is the current bid price; the appropriate quoted market price for
financial liabilities is the current ask price.
The fair value of financial instruments that are not traded in an active market is determined
using valuation techniques. Entities in the Group use a variety of methods and make
assumptions that are based on market conditions existing at each balance date. Quoted market
prices or dealer quotes for similar instruments are used for long-term debt instruments held.
Other techniques, such as estimated discounted cash flows, are used to determine fair value for
the remaining financial instruments.
The nominal value less estimated credit adjustments of trade receivables and payables are
assumed to approximate their fair values. The fair value of financial liabilities for disclosure
purposes is estimated by discounting the future contractual cash flows at the current market
interest rate that is available to entities in the Group for similar financial instruments.
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2.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
n.
Property, plant and equipment
Land and buildings are shown at fair value, based on periodic valuations by external independent
valuers, less subsequent depreciation for buildings. Any accumulated depreciation at the date of
revaluation is eliminated against the gross carrying amount of the asset and the net amount is
restated to the re-valued amount of the asset. All other plant and equipment is stated at historical
cost less depreciation. Historical cost includes expenditure that is directly attributable to the
acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will
flow to the Group and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the Statement of Comprehensive Income during the financial period in
which they are incurred.
Increases in the carrying amounts arising on revaluation of land and buildings are credited to the
asset revaluation reserve in equity. A revaluation surplus is credited to the asset revaluation
reserve included within shareholder’s equity unless it reverses a revaluation decrease on the same
asset previously recognised in the Statement of Comprehensive Income. A revaluation deficit is
recognised in the Statement of Comprehensive Income unless it directly offsets a previous
revaluation surplus on the same asset in the asset revaluation reserve. On disposal, any revaluation
reserve relating to sold assets is transferred to retained earnings. Independent valuations are
performed regularly to ensure the carrying amounts of land and buildings do not differ materially
from the fair value at the Statement of Financial Position date.
Land is not depreciated. Depreciation on other assets is calculated using the straight line, over their
estimated useful lives, as follows:
Plant and equipment
Buildings
5 – 15 years (depreciation rate 6.7% to 20%)
30 years (depreciation rate 3.4%)
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each
Statement of Financial Position 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 (note 2 (m)).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These
are included in the Statement of Comprehensive Income.
o.
Investment property
Investment property is held for long-term rental yields and is not occupied by the Group.
Investment property is carried at fair value, which is based on active market prices, adjusted, if
necessary, for any difference in the nature, location or condition of the specific asset. If this
information is not available, the Group uses alternative valuation methods such as recent prices in
less active markets or discounted cash flow projections. These valuations are reviewed annually.
Changes in fair values are recorded in the Statement of Comprehensive Income as part of other
income.
p.
Leases
Company as lessee
Leases of property, plant and equipment where the Group has substantially all the risks and
rewards of ownership but not the legal ownership are classified as finance leases and capitalised at
inception of the lease at the fair value of the leased property, or if lower, at the present value of the
minimum lease payments. Lease payments are apportioned between the finance charges and
reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance
of the liability. Finance charges are charged to the Statement of Comprehensive Income over the
lease period so as to produce a constant periodic rate of interest on the remaining balance of the
liability for each period.
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STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
Capitalised leased assets are depreciated on a straight line basis over the shorter of the estimated
useful life of the asset or the lease term.
Leases where the lessor retains substantially all the risks and rewards of ownership of the net
asset are classified as operating leases. Payments made under operating leases (net of incentives
received from the lessor) are charged to the Statement of Comprehensive Income on a straight-
line basis over the period of the lease.
Lease incentives under operating leases are recognised as a liability and amortised on a straight
line basis over the life of the lease term.
Company as lessor
Lease income from operating leases is recognised in the Statement of Comprehensive Income on a
straight-line basis over the lease term. Initial direct costs incurred in negotiating operating leases
are added to the carrying value of the leased asset and recognised as an expense over the lease
term on the same bases as the lease income.
q.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end
of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days
of recognition.
r.
Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of past
events, for which it is probable that an outflow of economic benefits will result and the outflow
can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation
at the end of the reporting period.
s.
Other liabilities
Other liabilities comprise non-current amounts due to related parties that do not bear interest
and are repayable within one year of Statement of Financial Position date.
Income received in advance relates to car park income that will be brought to account over the
life of the car space contracts.
t.
Employee benefits
Wages, Salaries and Annual Leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to
be settled within one year of Statement of Financial Position date are recognised in other
liabilities in respect of employees' services rendered up to Statement of Financial Position date
and are measured at amounts expected to be paid when the liabilities are settled.
Long Service Leave
The liability for long service leave is recognised in the provision for employee benefits and
measured as the present value of expected future payments to be made in respect of services
provided by employees up to the reporting date.
In determining the liability, consideration is given to employee wage increases and the probability
that the employee may satisfy resting requirements. Those cash flows are discounted using
market yields on national government bonds with terms to maturity that match the expected
timing of cash flows.
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Annual Report 31 December 2012
2.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
u.
Issued capital
Ordinary shares are classified as equity.
Costs directly attributable to the issue of new shares or options are shown as a deduction from the
equity proceeds, net of any income tax benefit.
v.
Share-based payments
Ownership-based remuneration is provided to employees via an employee share option plan and
employee share plan.
Share-based compensation is recognised as an expense in respect of the services received,
measured on a fair value basis.
The fair value of the options at grant date is independently determined using a Black Scholes option
pricing model that takes into account the exercise price, the term of the option, the vesting and
performance criteria, the impact of dilution, the non-tradeable nature of the option, the share price
at grant date and expected price volatility of the underlying share, the expected dividend yield and
the risk-free interest rate for the term of the option.
The fair value of the options granted excludes the impact of any non-market vesting conditions (for
example, profitability and sales growth targets). Non-market vesting conditions are included in
assumptions about the number of options that are expected to become exercisable. At each
Statement of Financial Position date, the Group revises its estimate of the number of options that
are expected to become exercisable. The employee benefit expense recognised each period takes
into account the most recent estimate.
Upon the exercise of options, the balance of the share-based payments reserve relating to those
options is transferred to share capital.
w.
Earnings per share (EPS)
Basic EPS is calculated as net profit attributable to members, adjusted to exclude costs of servicing
equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted
for any bonus element.
Diluted EPS is calculated as net profit attributable to members, adjusted for costs of servicing equity
(other than dividends), the after tax effect of dividends and interest associated with dilutive
potential ordinary shares that have been recognised as expenses; and other non-discretionary
changes in revenues or expenses during the period that would result from the dilution of potential
ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential
ordinary shares, adjusted for any bonus element.
x.
New Accounting Standards for Application
The AASB has issued new and amended accounting standards and interpretations that have
mandatory application dates for future reporting periods. The group has decided against early
adoption of these standards. We have reviewed these standards and interpretations and there are
none having any material effect.
3.
FINANCIAL RISK MANAGEMENT
a.
General objectives, policies and processes
In common with all other businesses, the Group is exposed to risks that arise from its use of
financial instruments. This note describes the Group’s objectives, policies and processes for
managing those risks and the methods used to measure them. Further quantitative information in
respect of these risks is presented throughout these financial statements.
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3.
FINANCIAL RISK MANAGEMENT continued
There have been no substantive changes in the Group’s exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the methods used to measure them
from previous periods unless otherwise stated in this note.
The Board has overall responsibility for the determination of the Group’s risk management
objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the
authority for designing and operating processes that ensure the effective implementation of the
objectives and policies to the Group’s finance function. The Groups' risk management policies and
objectives are therefore designed to minimise the potential impacts of these risks on the results of
the Group where such impacts may be material. The Board receives reports from the Chief Financial
Officer through which it reviews the effectiveness of the processes put in place and the
appropriateness of the objectives and policies it sets. The Group’s finance function also review the
risk management policies and processes and report their findings to the Audit Committee.
The overall objective of the Board is to set polices that seek to reduce risk as far as possible without
unduly affecting the Group’s competitiveness and flexibility.
Further details regarding these policies are set out below.
The Group and the parent entity bold the following financial instruments:
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2012201120122011$’000$’000$’000$’000Financial assetsCurrentCash and cash equivalents 235 466 11 1 Trade and other receivables 8,802 4,992 - - Financial assets 4,842 5,918 - - Non-currentTrade and other receivables 125 - - 1,246 14,004 11,376 11 1,247 Financial liabilitiesCurrentTrade and other payables 3,112 2,483 - - Financial liabilities 2,643 8,057 - - Non-current - Trade and other payables 4,196 - - - Financial liabilities 24,968 20,265 - - 34,919 30,805 - - ConsolidatedParent EntityFor personal use only
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Annual Report 31 December 2012
3.
FINANCIAL RISK MANAGEMENT continued
b.
Credit risk
Credit risk is the risk that the other party to a financial instrument will fail to discharge their
obligation resulting in the Group incurring a financial loss. This usually occurs when debtors or
counterparties to derivative contracts fail to settle their obligations owing to the Group excluding
the available for sale financial assets.
The maximum exposure to credit risk at balance date is the carrying amount of the financial assets,
excluding the available for sale financial assets, as summarised under note(a) above.
For banks and financial institutions, only independently rated parties are accepted and each deposit
account is kept to under $1 million to ensure that it is covered by the Governments bank deposit
guarantee scheme.
The maximum exposure to credit risk at balance date by country is as follows:
Included in trade receivables is a significant customer, located in the Australian region, which
accounts for 4.9% of the trade receivables balance as at 31 December 2012. This same customer
accounted for 14% of the trade receivables balance as at 31 December 2011. There are no past due
balances.
c.
Liquidity risk
Liquidity risk is the risk that the Group may encounter difficulties raising funds to meet
commitments associated with financial instruments that is, borrowing repayments. Bank loans are
detailed below. The funds were provided by bankers for the Group and the Parent Company. It is
the policy of the Board of Directors that treasury reviews and maintains adequate committed credit
facilities and the ability to close-out market positions.
Page | 38
2012201120122011$’000$’000$’000$’000Australia 13,987 11,366 11 1,247 New Zealand 17 10 - - 14,004 11,376 11 1,247 ConsolidatedParent EntityFor personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
3.
FINANCIAL RISK MANAGEMENT continued
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Consolidated 2012Carrying AmountContractual Cash flows< 6 mths6- 12 mths1-3 years> 3 years$'000$'000$'000$'000$'000$'000CurrentTrade and other payables3,112 3,112 607 2,505 - - Financial Liabilities2,643 2,643 1,600 1,043 - - Non-currentTrade and other payables 4,196 4,196 - - 4,196 - Financial Liabilities24,968 24,968 - - 24,926 42 Total financial liabilities at amortised cost34,919 34,919 2,207 3,548 29,122 42 Consolidated 2011Carrying AmountContractual Cash flows< 6 mths6- 12 mths1-3 years> 3 years$'000$'000$'000$'000$'000$'000CurrentTrade and other payables2,483 2,483 2,268 - 215 - Financial Liabilities8,057 8,057 713 7,344 - - Non-currentTrade and other payables - - - - - - Financial Liabilities20,265 20,265 - - 16,057 4,208 Total financial liabilities at amortised cost30,805 30,805 2,981 7,344 16,272 4,208 Parent Entity 2012Carrying AmountContractual Cash flows< 6 mths6- 12 mths1-3 years> 3 years$'000$'000$'000$'000$'000$'000CurrentTrade and other payables- - - - - - Non-currentOther liabilities- - - - - - Total financial liabilities at amortised cost- - - - - - Parent Entity 2011Carrying AmountContractual Cash flows< 6 mths6- 12 mths1-3 years> 3 years$'000$'000$'000$'000$'000$'000CurrentTrade and other payables- - - - - - Non-currentOther liabilities- - - - - - Total financial liabilities at amortised cost- - - - - - Maturity Analysis of financial liabilitiesMaturity Analysis of financial liabilitiesFor personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
3.
FINANCIAL RISK MANAGEMENT continued
d.
Market risk
Market risk arises from the use of interest bearing, tradable and foreign currency financial instruments. It
is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in interest rates (interest rate risk), foreign exchange rates (currency risk) or other market factors
(other price risk).
(i).
Interest rate risk
The Group does not apply hedge accounting.
The Group is constantly monitoring its exposure to trends and fluctuations in interest rates in order
to manage interest rate risk.
For further details of exposure to interest rate risk refer Note 17 Financial Liabilities.
Sensitivity Analysis
The following tables demonstrate the sensitivity to a reasonably possible changes in interest rates,
with all other variables held constant, of the Group’s profit after tax (through the impact on floating
rate borrowings). There is no impact on the Group’s equity.
(ii). Currency risk
The Group’s policy is, where possible, to allow group entities to settle liabilities denominated in their
functional currency (AUD) with the cash generated from their own operations in that currency.
Where group entities have liabilities denominated in a currency other than their functional currency
(and have insufficient reserves of that currency to settle them) cash already denominated in that
currency will, where possible, be transferred from elsewhere within the Group.
In order to monitor the continuing effectiveness of this policy, the Group receives forecast, analysed
by the major currencies held by the Group, of liabilities due for settlement and expected cash
reserve.
There is no foreign currency loan as at reporting date (2011: Nil).
(iii). Other price risk
The Group takes advice from professional advisers as to when to sell shares quoted at market value.
Page | 40
+1%-1% Carry Amount Interest RateInterest RateConsolidated 2012$'000$'000$'000Financial Liabilities 27,611 (276) 276 Tax charge of 30% - 83 (83)After tax increase/(decrease) 27,611 (193) 193 Consolidated 2011$'000$'000$'000Financial Liabilities 28,322 (283) 283 Tax charge of 30% - 85 - After tax increase/(decrease) 28,322 (198) 283 For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
3.
FINANCIAL RISK MANAGEMENT continued
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There is no concentration of risk.
e.
Capital risk management
In managing its capital, the Group’s primary objectives are to pay dividends and maintain liquidity.
These objectives dictate any adjustments to capital structure. Rather than set policies, advice is
taken from professional advisors as to how to achieve these objectives. There has been no change
in either these objectives, or what is considered capital in the year.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce
debt.
Consistently with others in the industry, the Group and the parent entity monitor capital on the
basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is
calculated as total borrowings (including 'Financial liabilities' and 'trade and other payables' as
shown in the Statement of Financial Position) less cash and cash equivalents. Total capital is
calculated as 'equity' as shown in the Statement of Financial Position (including minority interest)
plus net debt.
It is the Group’s policy to maintain its gearing ratio at a healthy and manageable level. The
Group’s gearing ratio at the Statement of Financial Position date is as follows:
There have been no other significant changes to the Group’s capital management objectives,
policies and processes in the year nor has there been any change in what the Group considers to
be its capital.
Page | 41
Consolidated 2012Carrying Amount+10%Profit & Loss-10%Profit & Loss$'000$'000$'000Shares at fair value 4,842 484 (484)Tax charge (30%) - (145) 145 After tax increase/(decrease) 4,842 339 (339)Consolidated 2011$'000$'000$'000Shares at fair value 5,918 592 (592)Tax charge (30%) - (178) 178 After tax increase/(decrease) 5,918 414 (414)Gearing ratios 2012201120122011$'000$'000$'000$'000Total borrowings34,919 30,805 - 30 Less: cash and cash equivalents(235) (466) (11) (1) Net debt34,684 30,339 - 29 Total equity28,106 26,854 28,950 28,974 Total capital62,790 57,193 28,950 29,003 Gearing Ratio55%53%N/A0%ConsolidatedParent EntityFor personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
4.
REVENUE
5.
OTHER INCOME
6.
EXPENSES
The profit/(loss) before income tax is arrived
after (charging)/crediting the following specific
amounts:
a.
Administration expenses
b.
Finance income
c.
Finance expenses
Page | 42
2012201120122011$’000$’000$’000$’000Sale of goods 8,175 9,062 - - Rendering of services 2,363 2,240 - - Rental Income 2,028 2,196 - - Fee Income 2,624 2,355 - - 15,190 15,853 - - ConsolidatedParent EntityGain on disposal of mining tenements - 4,500 - - Gain/(loss) on disposal of property, plant and equipment 17 (290) - - Net gain on disposal of investments 3,130 131 - - Share of profit from equity accounted entity 279 - - - Change in fair value of financial assets (2,318) (346) - - Others 440 205 50 - 1,548 4,200 50 - 2012201120122011$’000$’000$’000$’000ConsolidatedParent EntityConsulting and professional expenses (666) (389) - - Superannuation contribution expense (256) (236) - - Employee benefits expense and/or costs (1,995) (1,627) - - Lease Payment (11) (11) - - Lease Expenses (248) (102) - - Interest received 905 350 - - Interest paid (2,435) (2,565) - - Depreciation and amortisation (407) (373) - - Others (415) (91) (1) (1) (3,257) (3,029) (1) (1)For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
7.
INCOME TAX
a.
Income tax expense
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b.
Numerical reconciliation of income tax
c.
Amounts recognised directly in equity
Aggregate current and deferred tax arising during
the reporting period and not recognised in profit
and loss but directly debited or credited to equity:
Page | 43
2012201120122011$’000$’000$’000$’000Income tax expenseCurrent tax expense----Deferred tax expense----Total income tax expense----Deferred tax expenseIncrease in deferred tax expense/(benefit)----ConsolidatedParent EntityProfit/(loss) from continuing operations before income tax expense1,249(1,472)(24)(61)Income tax expense (benefit) calculated @ 30% (2011:30%)375(442)(7)(18)Deferred tax expenses relating to partly owned subsidiaries outside of the tax consolidated group----Tax losses not brought to account----Temporary differences not brought to account2,004436-7Tax losses not brought to account-6711Recoupment of prior year tax losses not previously brought to account(2,379)---Income tax expense/(benefit) at effective tax rate of 30% (2011: 30%) - - --Current income taxCurrent income tax on transaction costs of issuing equity instrucments - - --For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
7.
INCOME TAX continued
d.
Unrecognised deferred tax assets and liabilities
e.
Deferred tax assets
f.
Deferred tax liabilities
Page | 44
2012201120122011$’000$’000$’000$’000The unrecognised deferred tax assets of the Group includes $4,201,015 (2011: $9,918,743) in relation to carried forward tax losses and $5,719,998 (2011: $8,850,190) in relation to carried forward capital losses.Deferred tax assets and liabilities have not been recognised in the statement of financial position for the following items:Prior year unrecognised tax losses now ineligible due to change in tax consolidation group - - - - Other deductible temporary differences and tax losses (7,930) 1,472 24 60 (7,930) 1,472 24 60 Potential benefit/(expense) at 30%(2011: 30%) (2,379) 442 7 18 ConsolidatedParent EntityDeferred tax assets comprise temporary differences attributable to:Amounts recognised in profit and loss - - - - Tax losses - - - - Amounts recognised directly in equity - - - - Share issue expenses - - - - Deferred tax liabilities comprise temporary differences attributable to:Amounts recognised directly in equityRevaluations of land and buildings 490 490 - - Amounts recognised in profit and lossCapitalised exploration costs - - - - 490 490 - - For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
8.
CASH & CASH EQUIVALENTS
9.
TRADE & OTHER RECEIVABLES
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a.
Trade receivables past due but not impaired
As of 31 December 2012 trade receivables of $896,000 (2011: $911,000) were past due but not
impaired. These related to a number of independent customers for whom there is no recent history
of default. The ageing analysis of these trade receivables is as follows:
The other classes within trade and other receivables do not contain impaired assets and are not
past due. Based on the credit history of these other classes, it is expected that these amounts will
be received when due. The Group does not hold any collateral in relation to these receivables.
b.
Receivables from other parties past due but not impaired
There are no debts recoverable from other parties that are past due but not impaired due to
adherence to agreed terms. Loans are secured against shares only. None were written down
during the year.
c.
Other receivables
These amounts relate to receivables for GST paid and deposits paid.
d.
Loans to controlled entities
There are no loans to controlled entities that are past due but not impaired as measurement is tied
to recoverability.
Page | 45
2012201120122011$’000$’000$’000$’000Cash at bank and on hand 159 390 11 1 Cash held in trust accounts 76 76 - - 235 466 11 1 Weighted average interest rates1.40%1.18%0.51%0.00%ConsolidatedParent EntityCurrentTrade receivables (note a) 2,098 2,384 - - Less: Provision for doubtful debts (23) (73) - - 2,075 2,311 - - Loans to third parties (note b) 5,244 3,011 - - Less: Provision for doubtful debts (169) (110) - - Other receivables (note c) 1,652 (220) - - 8,802 4,992 - - Non-CurrentAdvances to other entities 125 - - - Loan to controlled entities (note d) - - - 15,246 Less: Provision for doubtful debts - - - (14,000)Employee share scheme (note e) - - - - Less: Provision for employee share scheme - - - - 125 - - 1,246 Up to 3 months 538 576 - - 3 to 6 months 358 335 - - 896 911 - - For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
9.
TRADE & OTHER RECEIVABLES continued
e.
Employee share plan
There are no debts recoverable under the Employee Share Plan that are past due which have not
been impaired. Refer to Note 30 and Note 31 for further details.
The total outstanding non-recourse loans is $7,887,556 (2011:$7,887,856). The full non-recourse
loans are recognised as share payment cost expenses in the previous financial year. The
corresponding securities held by the Company at fair value is $3.865 million (2011:$6.4 million).
f.
Fair value and credit risk
Current trade and other receivables
Due to the short term nature of these receivables their carrying amount is assumed to approximate
their fair value.
The maximum exposure to credit risk at the reporting date is the carrying amount of each class of
receivables mentioned above.
Non-current receivables
All non-current receivables are interest free, and are repayable on demand. Estimated one year
discounted cash flows are used to determine fair value of the loans from related parties above. The
fair value is approximately equivalent to the carrying value.
10.
FINANCIAL ASSETS
*Financial assets are recorded at fair value by marking to market value.
11.
INVENTORIES
12.
OTHER CURRENT ASSETS
Page | 46
2012201120122011$’000$’000$’000$’000ConsolidatedParent EntityAustralian listed equity securities 5,829 6,937 - - Less: Provision for diminution in value of investment * (987) (1,019) - - 4,842 5,918 - - Raw materials 2,671 711 --Finished goods 777 481 -- 3,448 1,192 - - Prepayments 115 160 33 32 Others 105 134 - - 220 294 33 32 For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
13.
PROPERTY, PLANT AND EQUIPMENT
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a.
b.
The valuation basis of land and buildings is fair value being the amounts for which the assets could
be exchanged between willing parties in an arm’s length transaction, based on current prices in an
active market for similar properties in the same location and condition.
The valuation basis of building naming rights is fair value being the amounts for which the assets
could be exchanged between willing parties in an arm’s length transaction, based on current
prices in an active market for similar properties in the same location and condition. The
revaluation was based on an independent assessment by a member of the Australian Property
Institute as at 1 October 2009.
c.
Security
Refer to Note 17 for information on non-current assets pledged as security.
Page | 47
2012201120122011$’000$’000$’000$’000Land and buildingsAt fair value (a) - - - - Building naming rightsAt fair value (b) 885 885 - - Plant and equipmentAt cost 6,010 5,390 - - Accumulated depreciation (4,728) (4,240) - - 1,282 1,150 - - Leased plant and equipmentAt cost 1,055 1,338 - - Accumulated depreciation (277) (515) - - 778 823 - - Total property, plant and equipment 2,945 2,858 - - ConsolidatedParent EntityFor personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
13. PROPERTY, PLANT AND EQUIPMENT continued
d.
Reconciliations
Reconciliations of the carrying amounts of each class of property, plant & equipment at the
beginning and end of the current and previous financial year are set out below:
14.
INVESTMENT PROPERTIES
a.
Valuation basis
The basis of the valuation of investment properties is fair value being the amounts for which the
properties could be exchanged between willing parties in an arm’s length transaction, based on
current prices in an active market for similar properties in the same location and condition and
subject to similar leases. The revaluations were based on a combination of independent
assessments made by a member of the Australian Property Institute and directors’ valuations.
Page | 48
2012Land & buildingsBuilding naming rightsPlant & equipmentLeased Plant & EquipmentTotal$’000$’000$’000$’000$’000Carrying amount at 1 January 2012 - 885 1,150 823 2,858 Additions - - 196 314 510 Transfer - - 247 (247) - Depreciation - - (311) (112) (423)Carrying amount at 31 December 2012 - 885 1,282 778 2,945 2011Carrying amount at 1 January 2011 - 885 1,200 922 3,007 Additions - - 193 31 224 Transfer - - - - - Depreciation - - (243) (130) (373)Carrying amount at 31 December 2011 - 885 1,150 823 2,858 2012201120122011$'000$'000$'000$'000 39,863 39,840 - - 39,863 39,840 - - Non-currentInvestment properties at fair valueConsolidatedParent Entity2012201120122011$'000$'000$'000$'000Investment properties at fair valueDirectors' valuation 10,020 - - - Independent valuation 29,843 39,840 - - 39,863 39,840 - - ConsolidatedParent EntityFor personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
14.
INVESTMENT PROPERTIES continued
b.
Reconciliation
A reconciliation of the carrying amount of investment properties at the beginning and end of the
current financial year is set out below:
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c.
Amounts recognised in profit and loss for investment properties
d.
Non-current assets pledged as security
Refer to Note 17 for information on non-current assets pledged as security by the parent entity or
its controlled entities.
15.
FINANCIAL ASSETS
16.
TRADE AND OTHER PAYABLES
Page | 49
2012201120122011$'000$'000$'000$'000At fair valueBalance at beginning of year 39,840 46,935 - - Capital Works 530 47 - - Fair value adjustments (507) (4,625) - - Transfer/disposal - (2,517) - - Carrying amount at end of the year 39,863 39,840 - - ConsolidatedParent EntityThe following amounts have been recognised in the Statement of Comprehensive Income2012201120122011$'000$'000$'000$'000Rental and services income 4,391 4,436 - - Property running expenses 906 909 - - ConsolidatedParent Entity2012201120122011$'000$'000$'000$'000Shares in controlled entities at cost - - 21,093 21,093 Investment in associated entities 7,769 7,682 7,843 6,632 7,769 7,682 28,936 27,725 ConsolidatedParent Entity2012201120122011Current$'000$'000$'000$'000UnsecuredTrade and other creditors 513 612 - - Other payables 2,599 1,871 - - 3,112 2,483 - - Non-CurrentUnsecuredAmounts payable to associated entities 4,196 - - - 4,196 - - - ConsolidatedParent EntityFor personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
17.
FINANCIAL LIABILITIES
Security for borrowings
Bank loans are secured by fixed and floating charges, registered mortgage debentures, registered first
mortgages and by cross guarantees by and between the parent entity and certain of its controlled
entities.
Lease and hire purchase liabilities are effectively secured as the rights to the asset revert to the lessor in
the event of default.
Bank loans are secured by first mortgages over the Group’s investment properties and fixed and floating
charges over assets of the Group. The loans are repayable in years ranging from 2012 to 2016. The rate
of interest paid is a variable rate of 6.35% (2011: 7.11%).
The facilities are subject to an annual review with a compliance certificate required within 35 days of the
end of each reporting period on the following covenants:
i.
ii.
Interest coverage ratio not less than 1.65 (1.80 for $14.85m facility).
Loan to valuation ratio (<62.5% by year 2, <60% by year 3 and <65% for $14.85 million facility.
Assets pledged as security
The carrying amounts of non-current assets pledged as security are:
The fair value of borrowings is equivalent to the carrying amounts of loans and lease and hire purchase
liabilities.
Risk exposure
Information about the Group’s exposure to interest rate changes is provided in Note 3.
18.
EMPLOYEE BENEFITS PROVISION
Page | 50
2012201120122011$’000$’000$’000$’000CurrentSecuredLease and hire purchase liabilities 261 336 - - Bank loans 2,382 7,721 - - Total current 2,643 8,057 - - Non-Current SecuredLease and hire purchase liabilities 412 412 - - Bank loans 24,556 19,853 - - Total non-current 24,968 20,265 - - ConsolidatedParent Entity2012201120122011$’000$’000$’000$’000Investment Property 39,863 39,840 - - Land and buildings 885 885 - - Plant and equipment 2,060 2,858 - - 42,808 43,583 - - ConsolidatedParent Entity2012201120122011$'000$'000$'000$'000Employee leave entitlements 408 322 - - ConsolidatedParent EntityFor personal use only
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
19.
OTHER LIABILITIES
Income received in advance represents income received up front for the user using the car park. Income
is allocated to the Statement of Comprehensive Income on equal apportionment basis over the term of
the agreements.
20.
PROVISIONS
21.
ISSUED CAPITAL
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the
parent entity in proportion to the number of and amounts paid on the shares held. On a show of hands
every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and
upon a poll each share is entitled to one vote.
Page | 51
2012201120122011$'000$'000$'000$'000ConsolidatedParent EntityCurrent Income received in advance 48 46 - - Accrued payable 536 877 30 30 584 923 30 30 Non-CurrentIncome received in advance 3,509 3,558 - - 3,509 3,558 - - 2012201120122011Non-Current$'000$'000$'000$'000Restoration provision 50 50 - - Employee leave entitlements 275 240 - - 325 290 - - ConsolidatedParent Entity2012201120122011SharesSharesNumberNumber$’000$’000Share capitalOrdinary shares257,821,022 257,821,022 52,040 52,040 For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
22.
RESERVES AND ACCUMULATED LOSSES
a.
Reserves
The asset revaluation reserve records increments and decrements on the revaluation of individual
parcels of land and buildings. The balance standing to the credit of the reserve may be used to
satisfy the distribution of bonus shares to shareholders and is only available for the payment of cash
dividends in limited circumstances as permitted by law, net of capital gains tax payable.
The foreign currency translation reserve is used to record exchange differences on translation of
foreign controlled subsidiaries. The reserve is recognised in the Statement of Comprehensive
Income when the investment is disposed of.
b.
Accumulated losses
23.
EARNINGS PER SHARE
Page | 52
2012201120122011$’000$’000$’000$’000Asset revaluation reserve 1,141 1,351 - - Capital reserve 5,752 5,542 - - Foreign currency translation reserve (1,266) (1,269) - - 5,627 5,624 - - Movements in reservesAsset revaluation reserveBalance at start of period 1,351 1,351 - - Business combination movement (210) - - - Balance at the end of period 1,141 1,351 - - ConsolidatedParent EntityCapital Profits ReserveBalance at start of period 5,542 5,542 - - Business combination movement 210 - - - Balance at the end of period 5,752 5,542 - - Foreign currency translation reserveBalance at start of period (1,269) (1,301) - - Currency translation differences 3 32 - - Balance at the end of period (1,266) (1,269) - - Balance at the beginning of the year (30,810) (29,338) (23,066) (23,005)Profit/(loss) for the year 1,249 (1,472) (24) (61)Balance at the end of the year (29,561) (30,810) (23,090) (23,066)20122011CentsCentsBasic earnings/(loss) per share 0.48 (0.57)Diluted earnings/(loss) per share 0.48 (0.57)20122011$’000$’000Profit/(Loss) used in calculating basic and diluted earnings/(loss) per share 1,249 (1,472) Number Number Weighted average number of ordinary shares used as the denominator in calculating basic and diluted earnings per share. 257,821,022 257,821,022 For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
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24.
OPERATING SEGMENTS
The Consolidated entity primary reporting format is business segments and its secondary reporting
format is geographical segments.
Business segments
The Consolidated entity is organised into the following divisions by product and service type.
Property investment & development in Australia
Development and administration of industrial property in eastern Australia.
Property investment in New Zealand
Management of investment properties in Auckland.
Exploration and processing of minerals
Processing and distribution of attapulgite, (also known as Fuller’s Earth) which is an industrial clay
material used in the domestic and industrial absorbent, industrial oil refining, agricultural and
horticultural industries. In addition, it is involved in the exploration and development of coal mining
leases.
Geographical segments
All business segments, with the exception of property investment in New Zealand, operate principally
within Australia.
Accounting policies
Segment revenues and expenses are those directly attributable to the segments and include any joint
revenue and expenses where a reasonable basis of allocation exists. Segment assets include all assets
used by a segment and consist principally of cash, receivables, inventories, intangibles and property,
plant and equipment, net of allowances and accumulated depreciation and amortisation. While most
assets can be directly attributed to individual segments, the carrying amount of certain assets used
jointly by two or more segments is allocated to segments on a reasonable basis. Segment liabilities
consist principally of payables, employee benefits, accrued expenses, provisions and borrowings.
Inter-segment transfers
Segment revenues, expenses and results include transfers between segments. All other intersegment
transfers are priced on an “arm’s-length” basis and are eliminated on consolidation.
Page | 53
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
24. OPERATING SEGMENTS continued
Primary reporting – business segments
Page | 54
Property investment & development in AustraliaProperty investment in New ZealandMining, processing & explorationIntersegment eliminations/ unallocatedConsolidated$’000$’000$’000$’000$’0002012Sales to external customers4,286-8,2802,62415,190Intersegment sales1,289--(1,289)-Total sales revenue5,575-8,2801,33515,190Other revenue17-1,0634681,548Total segment revenue5,592-9,3431,80316,738Segment result Profit/(loss) before income tax expense265-1,085(101)1,249Income tax expense-----Net profit/(loss)265-1,085(101)1,249Segment assets79,771-13,746(25,176)68,341Segment liabilities49,460-5,876(15,101)40,235Acquisition of non current assets80-336-416Depreciation and amortisation expense--407-4072011Sales to external customers4,2171229,062-13,401Intersegment sales1,125--(1,125)-Total sales revenue5,3421229,062(1,125)13,401Other revenue2,352-100-2,452Total segment revenue7,6941229,162(1,125)15,853Segment result Profit/(loss) before income tax expense(4,573)(473)3,857(283)(1,472)Income tax expense-----Net profit/(loss)(4,573)(473)3,857(283)(1,472)Segment assets72,9623010,347(20,097)63,242Segment liabilities49,5812,9193,562(19,674)36,388Acquisition of non current assets73-151-224Depreciation and amortisation expense18-355-373For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
25.
CASH FLOW INFORMATION
a.
Reconciliation of net cash inflow/(outflow)
from operating activities to profit/(loss)
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Significant non-cash transactions
No significant non-cash transactions occurred during the year.
Page | 55
2012201120122011$’000$’000$’000$’000Profit/(Loss) for the year 1,249 (1,472) (24) (61)Gain on sale of tenements - (4,500) - - Gain on disposal of financial assets (3,130) (131) - - Gain on sale of property, plant and equipment (16) 627 - - Depreciation and amortisation 407 373 - - Change in fair value of investment 2,318 4,625 - - Change in fair value of investment properties 507 - - - Change in fair value of financial assets - 345 - - Change in operating assets and liabilities:(Increase)/decrease in trade and other receivables 1,760 1,399 - - (Increase)/decrease in inventories (2,257) (376) - - (Increase)/decrease in other current assets 74 76 - (21)Increase/(decrease) in trade and other creditors 311 945 - 15 (Increase) in deferred tax assets - - - - Increase in deferred tax liabilities - - - - Net cash inflow/(outflow) from operating activities 1,223 1,911 (24) (67)ConsolidatedParent EntityFor personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
26.
CONTROLLED ENTITIES
27.
CONTINGENT ASSETS AND LIABILITIES
Guarantees
Cross guarantees under Class Order 98/1418 by Hudson Investment Group Limited and its wholly
owned controlled entities exist in respect of loans. Refer to Note 33.
Litigation
Atanaskovic Hartnell
On 11 February 2013 the Supreme Court of New South Wales delivered its judgement in the Company’s
claim against Atanaskovic Hartnell. The Court dismissed the Company’s claim, costs were awarded in
favour of the Defendant.
The Company and its legal advisors are reviewing the judgement with a view to lodging an appeal.
Page | 56
Name of entityClass of ShareCountry of formation or incorporation20122011%%Hudson Imports Pty LimitedOrdinary100100AustraliaHudson Marketing Pty LimitedOrdinary100100AustraliaHudson Pacific Group LimitedOrdinary100100AustraliaRaffles Equities LimitedOrdinary100100AustraliaHudson Property TrustOrdinary100100AustraliaBundaberg Coal Pty LtdOrdinary100100AustraliaHSC Property Pty LimitedOrdinary100100AustraliaHudson Underwriting LimitedOrdinary100100AustraliaHudson Corporate LimitedOrdinary100100AustraliaHudson Asset Management Pty LimitedOrdinary100100AustraliaOzberg Pty Limited ΔOrdinary-100AustraliaHudson Capital Corporation Pty LimitedOrdinary100100AustraliaSorbent Minerals Pty LtdOrdinary100100AustraliaEcofix Pty LtdOrdinary100100AustraliaHTH Holdings Pty LimitedOrdinary100100AustraliaRaffles Nominees Pty Limited ΔOrdinary-100AustraliaMile Investments Limited *Ordinary-100New ZealandRuahine Investments Limited *Ordinary-100New ZealandBase Metal Resources LimitedOrdinary100100AustraliaAshford Coking Coal Pty LtdOrdinary100100AustraliaEPC 1262 Pty LtdOrdinary100-Australia* Inactive companies were de-registered from New Zealand Companies Registry.Δ Inactive companies were disposed at nominal value.Equity HoldingFor personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
28.
COMMITMENTS
The Group leases various copiers under non-cancellable operating leases expiring between 1 and 3 years.
Nor do they include commitments for any renewal options on leases. Lease conditions do not impose any
restrictions on the ability of Hudson Investment Group Limited and its controlled entities from borrowing
further funds or paying dividends.
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The Group leases machinery at a carrying value of $778,000 (2011: $823,000) by way of finance leases
expiring within 4 years. The Group has the option to acquire the machinery on expiry at a nominal value.
There are no contingent rentals as part of finance lease arrangements and no restrictions on the ability of
Hudson Investment Group Limited and its controlled entities from borrowing further funds (but not able
to borrow for machine purchases) or paying dividends.
The weighted average interest rate implicit in the finance lease arrangements is 7 % (2011: 7%).
Tenement Expenditure Commitments
The minimum exploration expenditure commitments and lease payments on the Company’s exploration
tenements totalling approximately $ 1.13 million over the remaining term of the tenement lease.
Page | 57
2012201120122011$’000$’000$’000$’000Lease commitmentsNon-cancellable operating leases - future minimum lease paymentsWithin one year 11 9 - - Later than one year but not later than 5 years 18 9 - - Later than 5 years - - - - 29 18 - - ConsolidatedParent EntityFinance lease - non-cancellableWithin one year 261 336 - - Later than one year but not later than 5 years 412 412 - - Later than 5 years - - - - Total future minimum lease payments 673 748 - - Total future finance charges (97) (134) - - Lease liabilities 576 614 - - Lease liabilities are represented in the financial statements as follows:Current 261 336 - - Non-current 412 412 - - 673 748 - - Tenement exploration expenditure1,042 1,523 - - Tenement lease payment92 67 - - 1,134 1,590 - - For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
29.
EVENTS OCCURRING AFTER BALANCE DATE
On 11 February 2013 the Supreme Court of New South Wales delivered its judgement in the Company’s
claim against Atanaskovic Hartnell. The Court dismissed the Company’s claim and costs were awarded in
favour of the Defendant.
The Company and its legal advisors are reviewing the judgement with a view to lodging an appeal.
At the date of this report there are no other matters or circumstances, other than noted above, which
have arisen since 31 December 2012 that have significantly affected or may significantly affect:
The operations, in financial years subsequent to 31 December 2012 of the Group;
The results of those operations; or
The state of affairs in financial years subsequent to 31 December 2012 of the Group.
30.
SUPERANNUATION AND SHARE OWNERSHIP PLANS
Superannuation
Entities in the Group contribute to an accumulation fund, administered by a third party, to which all full
time and certain part time employees are invited to join.
Share ownership plans
Share ownership plans operated by the parent company and its controlled entities are detailed below.
Hudson Investment Group Employee Share Plan (ESP)
All employees of the Company and its controlled entities may participate in the ESP. Under the ESP,
monies are advanced to the participants to enable them to purchase ordinary shares of the Company on
the market. The non-recourse loans to participants bear interest at an amount equivalent to the dividend
paid on the shares and are repayable no later than ten years from the date of the loan. Participants
terminating their employment prior to the expiry date must sell their shares to the Company at their
original purchase price. Participants have the option of selling back shares in accordance with certain
conditions under the ESP rules. There are no limits to the amounts that might be advanced under the
ESP.
The net amount advanced under the plan during the year amounted to $Nil (2011: $Nil). The aggregate
number of shares purchased under the ESP by employees is 59,473,000 (2011: 59,473,000). At year- end,
the total non-recourse loans outstanding are $7,887,856 (2011: $7,887,856). The full amount of non-
recourse loans is recognised as an expense in previous years. At year-end, the aggregate market value of
ESP plan shares, which are held as security, is $3.865 million, being 6.5 cents per share.
31.
KEY MANAGEMENT PERSONNEL DISCLOSURES
a.
Directors
The following persons were Directors of Hudson Investment Group Limited during the financial year
unless otherwise stated:
John W Farey
Juliana Tan
Peter J Meers Non-Executive Director
Executive Chairman
Executive Director
appointed 1 February 2002
appointed 1 September 2006
appointed 11 February 2010
b.
Other key management personnel
The following persons were key management personnel of Hudson Investment Group Limited
during the financial year:
Vincent Tan
David L Hughes
Julian Rockett
Francis Choy
CEO Hudson Pacific Group Limited
Joint Company Secretary
Joint Company Secretary
Chief Financial Officer
appointed 1 February 2002
appointed 2 December 1997
appointed 27 July 2012
Page | 58
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
31. KEY MANAGEMENT PERSONNEL DISCLOSURES continued
c.
Compensation of Directors and other key management personnel
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The amounts reported represent the total remuneration paid by entities in the Group in relation to
managing the affairs of all the entities within the Group.
There are no performance conditions related to any of the above payments.
There is no other element of Directors and other Key Management Personnel remuneration.
Shareholdings and option holdings of key management personnel
Shares held in Hudson Investment Group Limited
The numbers of shares in the Company held during the financial year by each director of Hudson
Investment Group Limited and other key management personnel of the Group, including their
personally related parties, are set out below. There were no shares granted during the reporting
period as compensation.
Page | 59
Consolidated 2012Post Employment BenefitsLong Term BenefitsSalary and other feesBonusTravelling AllowanceSuper-annuationLong Service LeaveTotal$$$$$$Directors John W Farey 105,000 - 10,800 9,450 3,742 128,992 Juliana Tan 205,000 - - 16,269 4,894 226,163 Peter J Meers - - - - - - Director - Total 310,000 - 10,800 25,719 8,636 355,155 Vincent Tan 240,000 - - 16,200 2,985 259,185 Francis Choy 210,462 - - 19,350 5,732 235,544 David L Hughes 40,209 - - - - 40,209 Julian Rockett 61,000 3,315 - 5,788 1,172 71,275 KMP - Total 551,671 3,315 - 41,338 9,889 606,213 Consolidated 2011Post Employment BenefitsLong Term BenefitsSalary and other feesBonusTravelling AllowanceSuper-annuationLong Service LeaveTotal$$$$$$Directors John W Farey 63,399 - 10,800 45,600 - 119,799 Juliana Tan 170,832 - - 15,375 11,845 198,052 Peter J Meers - - - - - - Director - Total 234,231 - 10,800 60,975 11,845 317,851 Vincent Tan 223,687 - - 33,013 2,998 259,698 Francis Choy 170,835 2,000 - 39,450 18,634 230,919 David L Hughes 50,946 2,000 - - - 52,946 KMP - Total 445,468 4,000 - 72,463 21,632 543,563 Short Term Employee BenefitsKMP KMP Short Term Employee BenefitsFor personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
31. KEY MANAGEMENT PERSONNEL DISCLOSURES continued
c.
Direct interest in ordinary shares
1Ms Tan has an indirect in 4,294,362 shares registered to a related party.
No options over unissued shares were granted during the year and no options have been granted in
the period since the end of the financial year and to the date of this report. At the date of this
report there were no unissued shares in the capital of the Company under option.
Page | 60
Ordinary Shares - Direct InterestBalance at start of year shares Changes during the year sharesBalance at end of year shares2012DirectorsJohn W Farey 6,738,032 - 6,738,032 Juliana Tan - - - Peter J Meers - - - Key Management PersonnelVincent Tan 4,294,362 - 4,294,362 David L Hughes 12,713,888 - 12,713,888 Francis Choy 11,886,084 - 11,886,084 2011DirectorsJohn W Farey 6,738,032 - 6,738,032 Juliana Tan - - - Peter J Meers - - - Key Management PersonnelVincent Tan 4,190,080 104,282 4,294,362 David L Hughes 12,713,888 - 12,713,888 Francis Choy 11,886,084 - 11,886,084 Ordinary Shares - Indirect InterestBalance at start of year shares Changes during the year sharesBalance at end of year shares2012DirectorsJohn W Farey - - Juliana Tan 4,294,362 - 4,294,362 Peter J Meers - - - - Key Management PersonnelVincent Tan 30,000 - 30,000 2011DirectorsJohn W Farey - - - Juliana Tan 4,190,080 104,282 4,294,362 Peter J Meers - - - Key Management PersonnelVincent Tan 30,000 - 30,000 For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
31. KEY MANAGEMENT PERSONNEL DISCLOSURES continued
d.
Loans to key management personnel
Details of loans made to Directors and other Key Management Personnel (KMP) of Hudson
Investment Group Limited are set out below:
(i). Aggregates for key management personnel
(ii). Details of individuals with loans above $100,000 during the year are set out below.
* Market interest rate 6% (2011: 6%)
This represents the difference between interest charged at the latter and interest paid.
Terms and conditions of loans
All non-recourse loans relate to the individuals participation in the Company’s ESP. Interest is paid only from
dividends paid by the Company during the year. Loans are secured against the Employee Share Option Plan
shares only. Loans are repayable should employees leave the Company. None were written down during the
year.
Page | 61
ConsolidatedBalance at the start of the yearAdvance/ (Repayments)/ (Transfers)Interest payable for the yearBalance at the end of the yearNumber in Group at end of yearAdditional interest otherwise payable$$$$$2012 5,313,188 - - 5,313,188 4 318,790 2011 5,313,188 - - 5,313,188 4 318,790 Balance at the start of the yearAdvance/ (Repayment)/ (Transfer)Interest payable for the yearBalance as at the end of the yearHighest indebtedness during the yearAdditional interest otherwise payable*2012$$$$$$DirectorsJohn W Farey (ESP) 1,560,459 - - 1,560,459 1,560,459 93,627 KMPVincent Tan (ESP) 900,000 - - 900,000 900,000 54,000 Francis Choy (ESP) 1,184,988 - - 1,184,988 1,184,988 71,099 David L Hughes (ESP) 1,667,741 - - 1,667,741 1,667,741 100,064 5,313,188 - - 5,313,188 5,313,188 318,790 2011Directors$$$$$$John W Farey (ESP) 1,560,459 - - 1,560,459 1,560,459 93,627 KMPVincent Tan (ESP) 900,000 - - 900,000 900,000 54,000 Francis Choy (ESP) 1,184,988 - - 1,184,988 1,184,988 71,099 David L Hughes (ESP) 1,667,741 - - 1,667,741 1,667,741 100,064 5,313,188 - - 5,313,1885,313,188318,790For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
32.
RELATED PARTY DISCLOSURES
a.
Parent entities
The parent entity and ultimate Australian parent entity is Hudson Investment Group Limited (the
Company).
b.
Subsidiaries
Interests in subsidiaries are disclosed in Note 26.
c.
Key management personnel compensation
Key management personnel compensation information is disclosed in Note 31.
d.
Transactions with related parties
The following transactions occurred with related parties during the year ended 31 December 2012:
Purchase of goods
Consolidated group only
Hudson Marketing Pty Limited (HMPL), a subsidiary of the Company, purchased goods from Hudson
Resources Limited (HRL) incurring expenses of $765,423 (2011: $846,726).
Tenements
Consolidated and parent entity
Tiaro Coal Limited (TCL) acquired an interest in mining tenements for $Nil (2011: $4,500,000).
Car park income and expenses
Consolidated group only
A car park, owned by Hudson Property Trust, is used by employees of Hudson Corporate Limited
(HCL) and Hudson Pacific Group (HPG). As a result there was an intra-group income and expense of
$319,134 during the year (2011: $326,515).
Rental income
Consolidated group only
HMPL received rental income from HRL $104,646 (2011: $100,000) for using the storage facilities in
Geraldton plant.
Hudson Capital Corporation Pty Limited received rental income from HCL of $ 60,000 (2011:
$60,000) for using the building name and roof-top signage.
Rental expense
Consolidated group only
HMPL incurred rental expenses of $ 313,938 (2011: $300,000) payable to both HRL and Hudson
Minerals Limited (HML) for leasing the Geraldton property.
Management fees received
Consolidated group only
HCL received an administration fee from Hudson Resources Limited of $ 381,000 (2011: $339,000)
as payment of recoveries for office administration and running expenses incurred in HCL.
HCL received an administration fee from Tiaro Coal Limited of $ 411,000 (2011: $363,000) as
payment of recoveries for office administration and running expenses incurred in HCL.
HCL received an administration fee from Australian Bauxite Limited of $411,000 (2011: $363,000) as
payment of recoveries for office administration and running expenses incurred in HCL.
HCL received an administration fee from Sovereign Gold Company Limited of $406,000 (2011:
$339,000) as payment of recoveries for office administration and running expenses incurred in HCL.
Page | 62
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
32. RELATED PARTY DISCLOSURES continued
HCL received an administration fee from Raffles Capital Limited of $ 381,000 (2011: $339,000) as
payment of recoveries for office administration and running expenses incurred in HCL.
HCL received an administration fee from Precious Metals Limited of $406,000 (2011: 210,000) as
payment of recoveries for office administration and running expenses incurred in HCL.
Management fees paid
HCL paid a consulting fee to Raffles Capital Limited of $240,000 (2011:$Nil) as payment of consulting
services rendered by Raffles Capital Limited during the year.
e.
Outstanding balances
The following balances are outstanding at the reporting date in relation to transaction with related
parties:
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Provisions for doubtful debts have been raised in relation to outstanding non-interest bearing
balances from controlled entities amounting to $14,000,000 (2011: $14,000,000). No expense has
been recognised in respect of bad or doubtful debts due from related parties.
f.
g.
Guarantees
No guarantees were given or received from related parties during the year.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market interest
rates, except that there are no fixed terms or repayment of loans between the parties.
33.
DEED OF CROSS GUARANTEE
As at 31 December 2012, Hudson Investment Group Limited, Hudson Imports Pty Limited, Hudson Pacific
Group Limited, Hudson Property Trust, HTH Holdings Pty Limited, Bundaberg Coal Pty Limited, Hudson
Marketing Pty Limited, Raffles Equities Ltd, Hudson Corporate Ltd, Hudson Asset Management Pty
Limited, Hudson Capital Corporation Pty Limited, Hudson Underwriting Limited and HSC Property Pty
Limited, entered a Deed of Cross Guarantee under which each Company guarantees the debts of the
others.
By entering into the deed, the wholly-owned entities have been relieved from the requirement to
prepare a financial report and Directors’ report under Class Order 98/1418 (as amended by Class Order
98/2017) issued by the Australian Securities & Investments Commission.
The above companies represent a ‘Closed Group’ for the purposes of the Class Order, and as there are no
other parties to the Deed of Cross Guarantee that are controlled by Hudson Investment Group Limited,
they also represent the ‘Extended Closed Group’. These consolidated financial statements for the year
ended 31 December 2012 represent those of the “Closed Group”.
Page | 63
2012201120122011$$$$PayableRelated EntitiesHudson Resources Limited4,195,683 - - - Tiaro Coal Limited200,000 - - - Precious Metal Resources Limited690,487 1,500,000 - - Raffles Capital Limited- 7,150 - - Controlled Entities- - - - ReceivableRelated EntitiesRaffles Capital Limited125,000 - - - Controlled Entities- - 13,999,400 15,248,818 ConsolidatedParent EntityFor personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
34.
REMUNERATION OF AUDITORS
Page | 64
2012201120122011$$$$Audit services:Amounts paid or payable to auditors for audit and review of the financial report for the entity or any entity in the GroupAudit and review services fees 26,195 14,945 26,195 14,945 Taxation and other advisory services:Amounts paid or payable to the Auditor for non audit taxation services for the entity or any entity in the Group for review and lodgement of the income tax return Taxation services 8,135 7,745 8,135 7,745 Advisory services 5,050 - - - Total 13,185 7,745 8,135 7,745 ConsolidatedParent EntityFor personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
35.
PRIOR PERIOD RESTATEMENT
Comparatives have been restated to reflect the changes in the terms of the Employee Share Scheme. Due
to changes in income tax legislation, a consequential revision of the scheme was made.
The restatement have been effected by writing off the whole amount of the receivable from employee
share scheme to previous year when the scheme commenced. The accumulated losses were increased by
$5,651,000 in 2010 and non-current receivables were decreased by $5,651,000 in 2010.
There was no material effect on basic and diluted earnings/(loss) per share. The impact of the changes to
prior year are as follows:
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RestatedRestated2,0112,0112,0112,011$’000$’000$’000$’000Statement of Comprehensive IncomeChange in fair value of investments- 872 - 863 Profit from operations before income tax expense(1,472) (600) (61) 802 Profit/(loss) after tax(1,472) (600) (61) 802 Total Comprehensive income attributable to members of the parent entity(1,472) (600) (61) 802 Statement of Financial PositionNon-current assetReceivables - 6,372 1,246 7,422 EQUITYAccumulated losses (30,810) (24,287) (23,066) (16,740) Statement of Changes in EquityAccumulated lossesBalance at 1 January 2011(29,338) (23,687) (23,005) (17,542) Loss for the year (1,472) (600) (61) 802 Balance at 31 December 2011(30,810) (24,287) (23,066) (16,740) Notes to the Financial Statements9. Trade and other ReceivablesNon-currentEmployee share scheme- 7,888 - 7,486 Less: provision for employee share scheme- (1,516) - (1,310) ConsolidatedParent EntityFor personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
DECLARATION BY DIRECTORS
The directors of the Company declare that:
1.
The financial statements, comprising the statement of comprehensive income, statement of financial
position, statement of cash flows, statement of changes in equity, accompanying notes, are in
accordance with the Corporations Act 2001 and:
(a) comply with Accounting Standards which as stated in accounting policy note 1 to the financial
statements, constitutes explicit and unreserved compliance with international Financial Reporting
Standards (IFRS); and
(b) give a true and fair view of the financial position as at 31 December 2012 and of the performance for
the year ended on that date of the Company and the Group.
2.
3.
4.
In the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
The remuneration disclosures included on pages 10 to 11 of the Directors’ Report (as part of audited
Remuneration Report), for the year ended 31 December 2012, comply with section 300A of the
Corporations Act 2001.
The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer
required by section 295A.
The entities identified in Note 33 are parties to the deed of cross guarantee under which each company
guarantees the debts of the others. At the date of this declaration there are reasonable grounds to believe that
the companies which are parties to this deed of cross guarantee will as a Group be able to meet any obligations
or liabilities to which they are, or may become, subject to, by virtue of the deed of cross guarantee described in
Note 33.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on
behalf of the directors by:
John W Farey
Executive Chairman
Sydney
27 March 2013
Juliana Tan
Director
Page | 66
For personal use only
For personal use only For personal use only Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
SHAREHOLDER INFORMATION
AS AT 28 FEBRUARY 2013
A. Substantial Shareholders
Name
RAFFLES CAPITAL LIMITED
PHILLIP SECURITIES PTE LTD
MS YOKE TOW HONG
JT CAPITAL PTY LTD
B. Distribution of Fully Paid Ordinary Shares
Range
1 ‐ 1,000
1,001 ‐ 5,000
5,001 ‐ 10,000
10,001 ‐ 100,000
100,001 and above
Rounding
Total
C. Unmarketable Parcels
Minimum $ 500.00 parcel at $ 0.075 per unit
D. Twenty Largest Shareholders (aggregated)
Rank
Name
N
O
I
T
A
M
R
O
F
N
I
R
E
D
L
O
H
E
R
A
H
S
Number
of shares
88,800,000
29,900,000
21,876,212
19,183,362
% of
Share Holding
34.44
11.60
8.48
7.44
Total holders
Units
123
104
60
137
54
478
55,930
287,408
502,637
5,255,217
251,719,830
257,821,022
% of Issued
Capital
0.02
0.11
0.19
2.04
97.63
0.01
100.00
Minimum
parcel size
6,667
Holders
237
Units
403,608
Units
88,800,000
29,900,000
21,876,212
19,183,362
12,713,888
12,620,912
11,886,084
11,524,084
9,276,366
9,144,208
6,738,032
4,294,362
3,143,000
1,361,999
1,020,000
1,000,000
1,000,000
793,204
637,274
500,000
247,412,987
% of Units
34.44
11.60
8.48
7.44
4.93
4.89
4.61
4.47
3.60
3.55
2.61
1.67
1.22
0.53
0.40
0.39
0.39
0.31
0.25
0.19
95.97
RAFFLES CAPITAL LIMITED
PHILLIP SECURITIES PTE LTD
F CHOY (ESP)
J WANG (ESP)
A SCADDEN (ESP)
D L HUGHES (ESP)
JT CAPITAL PTY LTD
MS YOKE TOW HONG
SING CAPITAL PTY LTD
1
2
3
4
5
6
7
8
9
10
11
12
13 MS SEE WEE TAN
14
15 MRS CHOON PIANG LEE
16 MR SAT PAL KHATTAR
17 MS YEE KEIN TEH
18 MS MAO YING ZHANG
19 MR TREVOR NEIL HAY
20
SING YOU THIAM
PACIFIC PORTFOLIO INVESTMENTS
JOHN FAREY (ESP AND DIRECT)
VINCENT TAN (ESP AND DIRED)
UNION PACIFIC INVESTMENTS PTY LTD
Totals:
Page | 69
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2012
E. Interests in Bundaberg Coal Tenements
Licence
Location
EPC 1262
West of Blair Athol and Clermont coal mines
EPC 1275
Surat Basin
Square km
Percentage
Interest
654
858
50%
100%
Page | 70
For personal use only
For personal use only