For personal use only
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
Table of Contents
Page
Corporate Directory ............................................................................................................... 2
Chairman’s Report 2013 ......................................................................................................... 3
Review of Operations ............................................................................................................. 4
Directors’ Report .................................................................................................................... 6
Remuneration Report ‐ Audited ........................................................................................... 10
Auditor’s Independence Declaration ................................................................................... 14
Corporate Governance Statement ....................................................................................... 15
Statement Of Proft Or Loss & Other Comprehensive Income ............................................. 22
Statement of Financial Position ........................................................................................... 23
Statement of Changes in Equity ........................................................................................... 24
Statement of Cashflows ....................................................................................................... 25
Notes to Financial Statements ............................................................................................. 26
Declaration by Directors ...................................................................................................... 64
Independent Auditors’ Report ............................................................................................. 65
Shareholder Information ...................................................................................................... 67
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For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
CORPORATE DIRECTORY
Hudson Investment Group Limited
Board of Directors
ACN 004 683 729
ABN 25 004 683 729
Registered and Corporate Office
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
John W Farey (Executive Chairman)
Juliana Tan
Peter J Meers
Company Secretary
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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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
CHAIRMAN’S REPORT 2013
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 2013. The Company recorded a consolidated net
loss after tax of $4.967 million compared to a net profit of $1.249 million in the previous corresponding
period.
Total shareholders’ funds as at 31 December 2013 are $23.13 million and Net Tangible Asset backing per
share is 8.9 cents.
Further consolidation of the Company’s business activities continues. Significant features of the
Company’s operations in 2013 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) and recently to
Better Concrete Products Pty Ltd. The Board of Directors are discussing various options and
business models to develop the surplus industrial land.
In November 2013 the Company’s Rouse Hill industrial property comprising a 7700 m² building
located on a 2.13 hectare site was sold for $8.5m. Funds were used to retire debt and identify
investment opportunities.
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 and Dental centres. The car
park is managed by Secure Parking Pty Ltd and continues to generate a consistent income stream
for the Company.
Hudson Marketing Pty Limited (Hudson Marketing) (100% owned by the Company)
Hudson Marketing is the largest Australian‐owned, manufacturer and marketer of Attapulgite
products for cat care, industrial absorbents, mining, automotive, agriculture/horticulture and oil
purification applications. Its processing plant is located in Geraldton, Western Australia.
Hudson Marketing distributes 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 2013 were in excess of $6.0m. Hudson Marketing is in
the process of further streamlining 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 is currently
negotiating contracts with various parties.
Investments
The Company has over 30 million shares in Hudson Resources Limited, which has interests in
various companies involved in resource projects including coal, gold, copper and uranium
exploration.
The Board of Directors are continually reviewing the Company’s objectives and strategies.
During 2014 the aim is to build upon 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
24 March 2014
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
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 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
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 and recently lease to Better Concrete Products Pty Ltd. 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. The Board of Directors are discussing various options and business models to develop its
surplus land.
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 company’s car park caters for
nearby Hotels (including The Intercontinental, Sofitel Wentworth, Sir Stamford) Conservatorium of Music
and medical and dental centres. 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.
OTHER INVESTMENTS
Hudson Marketing Pty Limited (Hudson Marketing)
Hudson Marketing is the largest Australian‐owned manufacturer and marketer of attapulgite 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.
Hudson Marketing:
Owns and distributes leading all‐natural cat litter brands such as Chandler®, Fussy Cat® and Cat’s
Choice®, to Coles, Woolworths, IGA Supermarkets, Pet stores and Catteries.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
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 gross sales for 2013 in excess of $6.0 million.
Ecofix Pty Limited (Ecofix)
Ecofix (100% owned) is a manufacturer of speciality absorbent products using innovative technologies
for a wide variety of wastewater treatment applications.
Hudson Resources Limited (ASX: HRS) (30.1 million shares)
Hudson Resources Limited 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 31.8 million shares in Tiaro Coal Limited (ASX : TCM) that has coking
in South East Queensland. Exploration programmes have been
thermal coal tenements
undertaken and further drilling is planned.
Hudson Resources has 40 million shares in Sovereign Gold Company Limited (ASX: SOC) that has
tenements in Uralla and Adelong NSW and around the New England district of Armidale.
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 2013
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 2013.
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 loss after tax for the financial year ended 31 December 2013 was
$4.967 million compared to a net profit after tax of $1.249 million for the previous
corresponding financial year.
Total Shareholders’ Funds as at 31 December 2013 are $23.1 million (2012: $28.1 million)
and the Net Tangible Asset per share is 8.9 cents (2012: 10.83 cents).
Review of
Operations
Information on the operations of the Group and its business strategies and prospects are
disclosed in both the Chairman’s Report 2013 and the Review of Operations contained on
pages 4 to 5 of this Annual Report.
Dividends
Litigation
The Directors of the Company do not recommend that any amount be paid by way of
dividend.
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 has lodged for an appeal and it is set down
for a hearing on 28 April 2014 and 29th April 2014. The director best estimate based on
advise from solicitor is that if successful, the best result might be recovery of around
$5.25m. If unsuccessful, the potential liability will be around $800,000 to $1m.
Meetings of
Directors
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:
Directors Meetings
Remuneration
Committee Meetings
Audit Committee
Meetings
Director
Attended Held
Attended
Whilst in
Office
John W Farey
Juliana Tan
Peter J Meers*
4
4
3
4
4
4
‐
1
1
Held
Whilst
in
Office
‐
1
1
Attended
Held
Whilst in
Office
2
‐
2
2
‐
2
*Peter Meers travels extensively on company business.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
INFORMATION ON DIRECTORS AND MANAGEMENT
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.
John Farey, B.Com, FAIM, FAICD
Executive Chairman Appointed on 1 February 2002
Experience and Expertise
John W Farey has over 45 years’ experience in financial services
including merchant and investment banking.
Other Current Directorships of
Listed Companies
Former Directorships in the Last
Three Years of Listed Companies
None
None
Special Responsibilities
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
Experience and Expertise
Juliana Tan previously worked for PriceWaterhouse Coopers 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.
Peter J Meers, BA (Economics), FAIB
Non‐Executive Director Appointed 11 February 2010
Experience and Expertise
Other Current Directorships of
Listed Companies
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 of Tiaro Coal Limited
Non‐Executive Director of Hudson Resources Limited
Non‐Executive Director of Sovereign Gold Company Limited
Non‐Executive Director of Precious Metal Resources Limited
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
Peter J Meers, Non‐Executive Director: continued
Former Directorships in the Last
Three Years of Listed Companies
Non‐Executive Director of Archer Exploration Limited
Executive Deputy Chairman of Australian Bauxite Limited
Special Responsibilities
Member of the Remuneration Committee
Member of the Audit Committee
Interests in Shares and Options
Nil
MANAGEMENT
Julian Rockett, B.A., LL.B. GDLP
Experience and Expertise
Francis Choy MCom MBA FCPA
(HK) FCPA CA
Experience and Expertise
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.
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.
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.
SIGNIFICANT CHANGES IN NATURE OF ACTIVITIES
On 22 November 2013 the Company sold its Rouse Hill NSW property and the funds were used
to retire debt and research investment opportunities.
On 14 October 2013 a 5 year lease was signed with Better Concrete Products Pty Ltd and its
Warnervale site is now fully leased.
The Board of Directors are currently discussing various options with interested parties to
develop the Company’s surplus 10ha of individual land at its Warnervale site.
MATTERS SUBSEQUENT TO BALANCE DATE
At the date of this report there are no other matters or circumstances that have arisen since 31 December
2013 that have significantly affected or may significantly affect:
The operations, in financial years subsequent to 31 December 2013 of the Group;
The results of those operations; or
The state of affairs, in financial years subsequent to 31 December 2013 of the Group.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
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.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
REMUNERATION REPORT ‐ AUDITED
The information provided in this Remuneration Report has been audited as required by Section 308 (3c) of the
Corporations Act 2001.
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 once during the period and Committee members attendance record is disclosed in the
table of Directors Meetings shown on page 6.
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
Venkata Kambala
Julian Rockett
Francis Choy
CEO of Hudson Pacific Group Limited
Director of Ecofix Pty Ltd
Company Secretary
Chief Financial Officer
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.
CASH BONUSES
No cash bonuses were granted during the financial year ended 31 December 2013. Cash bonuses granted to
directors and officers are at discretion of the Remuneration Committee
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.
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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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
Directors and Other Key Management Personnel of Hudson Investment Group Limited
Consolidated
2013
Short Term Employee Benefits
Post Employment
Benefits
Long Term
Benefits
Salary and
other fees
Bonus
Travelling
Allowance
Superannuation
$
$
$
$
92,600
210,000
‐
302,600
240,000
150,666
40,210
69,000
238,716
738,592
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
10,800
‐
‐
10,800
‐
10,800
‐
‐
‐
10,800
27,437
19,160
‐
46,597
16,425
13,757
‐
6,305
21,484
57,971
Long
Service
Leave
$
1,091
3,500
‐
4,591
2,977
3,258
‐
1,456
3,663
11,354
Total
$
131,928
232,660
‐
364,588
259,402
178,481
40,210
76,761
263,863
818,717
Directors
John W Farey
Juliana Tan
Peter J Meers
Director ‐ Total
KMP
Vincent Tan
Venkata Kambala
David L Hughes*
Julian Rockett
Francis Choy
KMP ‐ Total
*David Hughes retired as Joint Company secretary from August 2013
Consolidated
2012
Short Term Employee Benefits
Post Employment
Benefits
Long Term
Benefits
Salary and
other fees
Bonus
Travelling
Allowance
Superannuation
Total
Long
Service
Leave
$
$
$
$
$
$
105,000
205,000
‐
310,000
240,000
210,462
40,209
61,000
551,671
‐
‐
‐
‐
‐
‐
‐
3,315
3,315
10,800
‐
‐
10,800
‐
‐
‐
‐
‐
9,450
16,269
‐
25,719
16,200
19,350
‐
5,788
41,338
3,742
4,894
‐
8,636
2,985
5,732
‐
1,172
9,889
128,992
226,163
‐
355,155
259,185
235,544
40,209
71,275
606,213
Directors
John W Farey
Juliana Tan
Peter J Meers
Director ‐ Total
KMP
Vincent Tan
Francis Choy
David L Hughes
Julian Rockett
KMP ‐ Total
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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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
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
Ordinary Shares (Number)
Direct
Interest
Employee
Share Plan
Indirect
Interest
Total
Director
John Farey
Peter Meers
Juliana Tan*
10,000
6,728,032
‐
‐
‐
‐
‐
‐
6,738,032
‐
4,294,362
4,294,362
* 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.
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.
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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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
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:
Consolidated
2013
$
2012
$
Parent Entity
2013
$
2012
$
Audit services:
Amounts paid or payable to auditors
for audit and review of the financial
report for the entity or any entity in
the Group
Audit and review services fees
27,505
26,195
27,505
26,195
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
Advisory services
Total
AUDITOR
8,545
1,022
9,567
8,135
5,050
13,185
8,545
‐
8,545
8,135
‐
8,135
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
24 March 2014
Juliana Tan
Director
Page | 13
For personal use only
AUDITOR’S INDEPENDENCE DECLARATION
Declaration of independence to the Directors of Hudson Investment Group Limited
and Controlled Entities
As lead auditor of Hudson Investment Group Limited for the year ended 31 December 2013, I
declare that, to the best of my knowledge and belief, there have been no contraventions of:
the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Hudson Investment Group Limited and the entities it
controlled during the year.
KS Black & Co
Chartered Accountants
Faizal Ajmat
Partner
Sydney, 24 March 2014
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
CORPORATE GOVERNANCE STATEMENT
Hudson Investment Group Limited (the Company) provides the following statement disclosing the extent to
which the Company has followed the best practice recommendations set by the Australian Securities Exchange
(ASX) Corporate Governance Council. Where the Company has not followed a recommendation, this fact has
been disclosed together with the reasons for the departure.
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.
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 chief executive officer.
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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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
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.
Composition of the Board
The Board of Directors 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
Executive Director / Non‐Independent
Non‐Executive Director / Independent
Term in Office
12 years 2 months
7 years 7 months
4 years 1 month
The Board currently holds 4 scheduled meetings each year together with any ad hoc meetings as may be
necessary. The Board met 4 times during the year and Directors’ attendance is disclosed in the Directors’
Report on page 6.
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.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
Nomination Committee
The role of the Nomination Committee is undertaken by the full Board.
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.
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.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
Representation of female employees in the organisation workforce is as follows:
Actual at
31 December 2013
Company Objective
Progress towards
meeting objective
Number
Percentage
Number
Percentage
Number
Percentage
Whole organisation
Senior Executive
Board Members
15
‐
1
28%
‐
33%
25
1
1
48%
33%
33%
15
‐
1
28%
‐
33%
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.
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 6.
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 committee’s conclusions and recommendations.
The responsibilities of the Audit Committee include:
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
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 2013
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.
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
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
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.
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.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
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 6.
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.
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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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
STATEMENT OF PROFT OR LOSS & OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2013
Notes
4
5
6 (a)
6 (b)
6 (c)
7
Consolidated
Parent Entity
2013
$’000
2012
$’000
2013
$’000
2012
$’000
13,333
(6,751)
6,582
(3,910)
(3,972)
(1,300)
1,187
(7,388)
2,534
(4,967)
‐
(4,967)
15,190
(7,945)
7,245
1,041
(5,285)
3,001
905
(3,257)
600
1,249
‐
1,249
‐
‐
‐
5,200
(61)
5,139
1
(1)
‐
5,139
‐
5,139
‐
‐
‐
(4,967)
1,249
5,139
‐
(4,967)
‐
1,249
‐
5,139
‐
‐
‐
50
(73)
(23)
‐
(1)
‐
(24)
‐
(24)
‐
(24)
‐
(24)
Revenue from continuing operations
Cost of sales
Gross profit
Other income and expenses
Administration expenses
PROFIT/(LOSS) BEFORE TAX AND
FINANCE INCOME AND EXPENSES
Finance income
Finance expenses
Share of profit of equity accounted investee
PROFIT/(LOSS) BEFORE INCOME TAX
Income tax benefit/(expense)
PROFIT/(LOSS) AFTER TAX FOR THE YEAR
TOTAL COMPREHENSIVE INCOME
Other comprehensive income for the year net
of tax
Total comprehensive income for the year
Profit attributable to minority equity interest
TOTAL COMPREHENSIVE INCOME / (LOSS)
ATTRIBUTABLE TO MEMBERS OF THE
PARENT ENTITY
Basic earnings/(loss) per share (cents)
Diluted earnings/(loss) per share (cents)
23
23
Cents
(1.93)
(1.93)
Cents
0.48
0.48
The above Statement should be read in conjunction with the accompanying notes.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2013
Consolidated
2013
$’000
2012
$’000
Parent Entity
2013
2012
$’000
$’000
Notes
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Financial assets
Inventories
Other current assets
TOTAL CURRENT ASSETS
NON‐CURRENT ASSETS
Receivables
Property, plant and equipment
Investment properties
Financial assets
Other non‐current assets
TOTAL NON‐CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Financial liabilities
Employee benefits provision
Other liabilities
Provisions
TOTAL CURRENT LIABILITIES
NON‐CURRENT LIABILITIES
Trade and other payables
Financial liabilities
Deferred tax liability
Other liabilities
Provisions
TOTAL NON‐CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued Capital
Reserves
Accumulated losses
Total equity attributable to equity
holders of the parent entity
Minority interest
8
9
10
11
12
9
13
14
15
16
17
18
19
20
16
17
7
19
20
444
8,598
3,928
3,388
158
16,516
3,082
2,730
32,098
7,219
‐
45,129
61,645
2,222
849
406
261
‐
3,738
10,241
20,221
490
3,458
358
34,768
38,506
23,139
235
8,802
4,842
3,448
220
17,547
125
2,945
39,863
7,769
92
50,794
68,341
3,112
2,643
408
584
‐
6,747
4,196
24,968
490
3,509
325
33,488
40,235
28,106
11
‐
‐
‐
12
23
4,960
‐
‐
29,136
‐
34,096
34,119
‐
‐
‐
30
‐
30
‐
‐
‐
‐
‐
‐
30
34,089
11
‐
‐
‐
33
44
‐
‐
‐
28,936
‐
28,936
28,980
‐
‐
‐
30
‐
30
‐
‐
‐
‐
‐
‐
30
28,950
21
22 (a)
22 (b)
52,040
5,627
(34,528)
23,139
52,040
5,627
(29,561)
28,106
52,040
‐
(17,951)
34,089
52,040
‐
(23,090)
28,950
‐
‐
‐
‐
TOTAL EQUITY
23,139
28,106
34,089
28,950
The above Statement should be read in conjunction with the accompanying notes.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2013
Consolidated
Issued
Capital
Reserves
Accumulated
Losses
Minority
Interests
Total
Equity
Balance at 1 January 2013
Profit/(Loss) for the year
Currency translation
Balance at 31 December 2013
Balance at 1 January 2012
Profit/(Loss) for the year
Currency translation
Balance at 31 December 2012
$’000
52,040
‐
‐
52,040
52,040
‐
‐
52,040
$’000
5,627
‐
‐
5,627
5,624
‐
3
5,627
$’000
(29,561)
(4,967)
‐
(34,528)
(30,810)
1,249
‐
(29,561)
Parent Entity
Issued
Capital
Reserves
Accumulated
Losses
Balance at 1 January 2013
Profit/(loss) for the year
Balance at 31 December 2013
Balance at 1 January 2012
Profit/(loss) for the year
Balance at 31 December 2012
$’000
52,040
‐
52,040
52,040
‐
52,040
$’000
‐
‐
‐
‐
‐
‐
$’000
(23,090)
5,139
(17,951)
(23,066)
(24)
(23,090)
$’000
‐
‐
‐
‐
‐
‐
‐
‐
Minority
Interests
$’000
‐
‐
‐
‐
‐
‐
$’000
28,106
(4,967)
‐
23,139
26,854
1,249
3
28,106
Total
Equity
$’000
28,950
5,139
34,089
28,974
(24)
28,950
The above Statement should be read in conjunction with the accompanying notes.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 31 DECEMBER 2013
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest paid
Interest received
Net cash provided by/(used in) operating
activities
Cash flows from investing activities
Proceeds from sale of investments
Proceeds from sale of property
Proceeds from sale of mining tenements
Advance to other parties
Advance to controlled entities
Payments for investment properties
improvements
Payments for purchases of investments
Payments for property, plant and equipment
Net cash used in/ provided by investing activities
Cash flows from financing activities
Proceeds from / (repayment) of advances
Drawdown from borrowings
Repayment of borrowings
Net cash used in/provided by financing activities
Net increase/(decrease) in cash and cash
equivalents
Notes
Consolidated
2013
$’000
2012
$’000
Parent Entity
2013
$’000
2012
$’000
13,558
(11,067)
(2,227)
5
269
15,476
(11,825)
(2,435)
7
1,223
‐
(40)
‐
1
(39)
‐
(24)
‐
‐
(24)
25 (a)
4,034
8,346
(1,209)
‐
(58)
(4,509)
(123)
6,481
9,447
‐
‐
(772)
‐
(530)
(8,552)
(336)
(743)
10,000
‐
‐
‐
(4,961)
‐
(5,000)
‐
39
360
(6,901)
(6,541)
‐
10,909
(11,620)
(711)
209
(231)
‐
‐
‐
‐
‐
‐
(1,212)
‐
(1,212)
1,246
‐
‐
1,246
10
1
11
‐
‐
‐
‐
‐
11
11
Cash and cash equivalents at the beginning of the
year
Cash and cash equivalents at the end of the year
8
235
444
466
235
The above Statement should be read in conjunction with the accompanying notes.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2013
1.
CORPORATE INFORMATION
The consolidated financial statements and notes of the Company for the year ended 31 December 2013
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 consolidated financial statements and notesis 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
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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Annual Report 31 December 2013
2.
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 Profit or Loss and Other 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 Profit or Loss and Other Comprehensive Income.
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Annual Report 31 December 2013
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 Profit or Loss and Other 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 Profit or Loss and Other 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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Annual Report 31 December 2013
2.
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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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
2.
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.
Collectability 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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Annual Report 31 December 2013
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
the entire held‐to‐maturity
investments category would be tainted and reclassified as available‐for‐sale.
investments before maturity,
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Annual Report 31 December 2013
2.
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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Annual Report 31 December 2013
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 Profit or Loss and Other Comprehensive Income. A
revaluation deficit is recognised in the Statement of Profit or Loss and Other 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 Profit or Loss and Other 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 Profit or Loss and Other 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 Profit or Loss and Other
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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Annual Report 31 December 2013
2.
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 Profit or Loss and Other 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 Profit or Loss and Other
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 2013
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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Annual Report 31 December 2013
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 hold the following financial instruments:
Financial assets
Current
Cash and cash equivalents
Trade and other receivables
Financial assets
Non‐current
Trade and other receivables
Financial liabilities
Current
Trade and other payables
Financial liabilities
Non‐current
Trade and other payables
Financial liabilities
Consolidated
Parent Entity
2013
$’000
2012
$’000
2013
$’000
2012
$’000
444
8,598
3,928
235
8,802
4,842
11
‐
‐
3,082
16,052
125
14,004
4,960
4,971
2,222
849
3,112
2,643
10,241
20,221
33,533
4,196
24,968
34,919
‐
‐
‐
‐
‐
11
‐
‐
‐
11
‐
‐
‐
‐
‐
Page | 36
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
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:
Australia
New Zealand
Consolidated
Parent Entity
2013
$’000
16,052
‐
16,052
2012
$’000
13,987
17
14,004
2013
$’000
4,971
‐
4,971
2012
$’000
11
‐
11
Included in trade receivables is a significant customer, located in the Australian region, which
accounts for 75% of the trade receivables balance as at 31 December 2013. This same customer
accounted for 62% of the trade receivables balance as at 31 December 2012. There are no
significant 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 | 37
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
3.
FINANCIAL RISK MANAGEMENT continued
Maturity Analysis of financial liabilities
Consolidated
2013
Current
Trade and other payables
Financial Liabilities
Non‐current
Trade and other payables
Financial Liabilities
Total financial liabilities
at amortised cost
Consolidated
2012
Current
Trade and other payables
Financial Liabilities
Non‐current
Trade and other payables
Financial Liabilities
Total financial liabilities
at amortised cost
Parent Entity
2013
Current
Trade and other payables
Non‐current
Other liabilities
Total financial liabilities at
amortised cost
Parent Entity
2012
Current
Trade and other payables
Non‐current
Other liabilities
Total financial liabilities
at amortised cost
Carrying
Amount
$'000
Contractual
Cash flows
$'000
2,222
849
10,241
20,221
33,533
2,222
849
10,241
20,221
33,533
< 6 mths
$'000
1,311
496
‐
‐
1,807
Carrying
Amount
$'000
Contractual
Cash flows
$'000
< 6 mths
$'000
6‐ 12
mths
$'000
911
353
‐
‐
1,264
6‐ 12
mths
$'000
1‐3 years
> 3 years
$'000
$'000
‐
‐
10,241
19,875
30,116
‐
‐
‐
346
346
1‐3 years
> 3 years
$'000
$'000
3,112
2,643
3,112
2,643
607
1,600
2,505
1,043
‐
‐
‐
‐
4,196
24,968
4,196
24,968
‐
‐
‐
‐
4,196
24,926
‐
42
34,919
34,919
2,207
3,548
29,122
42
Carrying
Amount
$'000
Contractual
Cash flows
$'000
< 6 mths
$'000
6‐ 12
mths
$'000
1‐3 years
> 3 years
$'000
$'000
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
Carrying
Amount
$'000
Contractual
Cash flows
$'000
< 6 mths
$'000
‐
6‐ 12
mths
$'000
‐
‐
1‐3 years
> 3 years
$'000
$'000
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
Page | 38
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
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.
Carry
Amount
$'000
+1%
‐1%
Interest Rate
$'000
Interest Rate
$'000
21,070
‐
21,070
27,611
‐
27,611
(211)
63
(148)
(276)
83
(193)
211
(63)
148
276
(83)
193
Consolidated
2013
Financial Liabilities
Tax charge of 30%
After tax increase/(decrease)
Consolidated
2012
Financial Liabilities
Tax charge of 30%
After tax increase/(decrease)
(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 (2012: Nil).
(iii) Other price risk
The Group takes advice from professional advisers as to when to sell shares quoted at market
value.
Page | 39
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
3.
FINANCIAL RISK MANAGEMENT continued
Consolidated
2013
Shares at fair value
Tax charge (30%)
After tax increase/(decrease)
Consolidated
2012
Shares at fair value
Tax charge (30%)
After tax increase/(decrease)
There is no concentration of risk.
e. Capital risk management
Carrying
Amount
$'000
3,928
‐
3,928
+10%
Profit & Loss
$'000
393
(118)
275
‐10%
Profit & Loss
$'000
(393)
118
(275)
4,842
‐
4,842
484
(145)
339
(484)
145
(339)
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:
Gearing ratios
Total borrowings
Less: cash and cash equivalents
Net debt
Total equity
Total capital
Gearing Ratio
Consolidated
2013
$'000
31,311
(444)
30,867
23,139
54,006
57%
2012
$'000
34,919
(235)
34,684
28,106
Parent Entity
2013
$'000
‐
2012
$'000
‐
(11)
‐
(11)
‐
34,089
28,950
62,790
34,089
28,950
55%
N/A
N/A
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 | 40
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
4. REVENUE
Consolidated
Parent Entity
2013
$’000
2012
$’000
2013
$’000
2012
$’000
Sale of goods
Rendering of services
Rental Income
Fee Income
5. OTHER INCOME AND EXPENSES
5,680
2,278
1,814
3,561
13,333
8,175
2,363
2,028
2,624
15,190
‐
‐
‐
‐
‐
Gain/(loss) on disposal of property, plant
and equipment
Net gain on disposal of investments
Share of profit from equity accounted
entity
Change in fair value of financial assets
Change in fair value of investment property
Others
523
17
‐
(1,366)
‐
(3,082)
15
‐
(3,910)
3,130
279
(2,318)
(507)
440
1,041
8,000
‐
(2,800)
‐
‐
5,200
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
50
50
6.
EXPENSES
The profit/(loss) before income tax is arrived
after (charging)/crediting the following specific
amounts:
a. Administration expenses
Consolidated
Parent Entity
2013
$’000
2012
$’000
2013
$’000
2012
$’000
Consulting and professional expenses
Superannuation contribution expenses
Employee expenses and/or costs
Lease payment
Legal expenses
(478)
(278)
(2,103)
(10)
(145)
(666)
(256)
(1,995)
(11)
(248)
b.
Finance income
Interest received
c.
Finance expenses
Interest paid
Depreciation and amortisation
Doubtful debt provision
Others
1,187
905
(2,517)
(352)
(4,404)
(115)
(7,388)
(2,435)
(407)
‐
(415)
(3,257)
‐
‐
‐
‐
‐
1
‐
‐
‐
(1)
(1)
‐
‐
‐
‐
‐
‐
‐
‐
‐
(1)
(1)
Page | 41
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
7.
INCOME TAX
a.
Income tax expense
Income tax expense
Current tax expense
Deferred tax expense
Total income tax expense
Deferred tax expense
Increase in deferred tax expense/(benefit)
b.
Numerical reconciliation of income tax to
prima facie tax payable
Profit/(loss) from continuing operations
before income tax expense
Income tax expense (benefit) calculated @
30% (2012:30%)
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
account
Tax losses not brought to account
Recoupment of prior year tax losses not
previously brought to account
Income tax expense/(benefit) at effective
tax rate of 30% (2012: 30%)
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:
Current income tax
Current income tax on transaction costs of
issuing equity instruments
Consolidated
2012
$’000
2013
$’000
Parent Entity
2012
$’000
2013
$’000
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
(4,967)
1,249
5,139
(24)
(1,490)
375
1,541
(7)
‐
‐
‐
2,256
(766)
‐
2,004
‐
(2,379)
58
(1,599)
‐
‐
‐
‐
‐
‐
7
‐
‐
‐
‐
‐
‐
Page | 42
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
7.
INCOME TAX continued
d.
Unrecognised deferred tax assets and liabilities
The unrecognised deferred tax assets of the
Group includes $4,634,455 (2012:
$4,201,015) in relation to carried forward
tax losses and $5,719,998(2012:
$5,719,998) 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
Potential benefit/(expense) at 30%
(2012: 30%)
e.
Deferred tax assets
Deferred tax assets comprise temporary
differences attributable to:
Amounts recognised in profit and loss
Tax losses
Amounts recognised directly in equity
Share issue expenses
f.
Deferred tax liabilities
Deferred tax liabilities comprise temporary
differences attributable to:
Amounts recognised directly in equity
Revaluations of land and buildings
Amounts recognised in profit and loss
Capitalised exploration costs
Consolidated
2012
$’000
‐
2013
$’000
‐
Parent Entity
2012
$’000
‐
2013
$’000
‐
‐
‐
‐
‐
(2,552)
(7,930)
(5,330)
(2,552)
(7,930)
(5,330)
(766)
(2,379)
(1,599)
‐
‐
‐
‐
‐
‐
‐
‐
‐
490
‐
‐
490
‐
‐
490
490
‐
‐
‐
‐
‐
‐
‐
‐
24
24
7
‐
‐
‐
‐
‐
‐
‐
‐
‐
Page | 43
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
8.
CASH & CASH EQUIVALENTS
Cash at bank and on hand
Cash held in trust accounts
Consolidated
2013
$’000
368
76
444
2012
$’000
159
76
235
Parent Entity
2013
$’000
11
‐
11
2012
$’000
11
‐
11
Weighted average interest rates
0.81%
1.40%
0.52%
0.51%
9.
TRADE AND OTHER RECEIVABLES
Current
Trade receivables (note a)
Less: Provision for doubtful debts
Advances to other entities (note b)
Less: Provision for doubtful debts
Other receivables (note c)
Non‐Current
Advances to other entities
Loan to controlled entities (note d)
Less: Provision for doubtful debts
Employee share scheme (note e)
Less: Provision for employee share scheme
a.
Trade receivables past due but not impaired
Up to 3 months
3 to 6 months
Consolidated
2013
$’000
2012
$’000
Parent Entity
2013
$’000
2012
$’000
1,873
(373)
1,500
11,985
(6,669)
1,782
8,598
3,082
‐
‐
‐
‐
3,082
2,098
(23)
2,075
5,244
(169)
1,652
8,802
125
‐
‐
‐
‐
125
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
18,960
(14,000)
‐
‐
4,960
‐
‐
‐
‐
‐
Consolidated
Parent Entity
2013
$’000
350
683
1,033
2012
$’000
2013
$’000
2012
$’000
538
358
896
‐
‐
‐
‐
‐
‐
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, deposits paid and balances of tenement disposal
proceed.
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 | 44
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
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 are $7,887,856 (2012:$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 recorded at $nil million (2012:$nil
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
Consolidated
Parent Entity
2013
$’000
2012
$’000
2013
$’000
2012
$’000
Australian listed equity securities
Less: Provision for diminution in value
of investment *
5,196
5,829
(1,268)
(987)
3,928
4,842
*Financial assets are recorded at fair value by marking to market value.
11.
INVENTORIES
Raw materials
Finished goods
12.
OTHER CURRENT ASSETS
Prepayments
Others
2,639
749
3,388
77
81
158
2,671
777
3,448
115
105
220
‐
‐
‐
‐
‐
‐
12
‐
12
‐
‐
‐
‐
‐
‐
33
‐
33
Page | 45
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
13.
PROPERTY, PLANT AND EQUIPMENT
Land and buildings
At fair value (a)
Building naming rights
At fair value (b)
Plant and equipment
At cost
Accumulated depreciation
Leased plant and equipment
At cost
Accumulated depreciation
Consolidated
2013
$’000
2012
$’000
Parent Entity
2013
$’000
2012
$’000
‐
‐
900
885
6,134
(4,969)
1,165
6,010
(4,728)
1,282
1,055
(390)
665
1,055
(277)
778
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
Total property, plant and equipment
2,730
2,945
‐
‐
a. 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.
b. 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 in 2013.
c. Security
Refer to Note 17 for information on non‐current assets pledged as security.
Page | 46
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
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:
2013
Carrying amount at 1 January 2013
Additions
Change in fair value
Depreciation
Carrying amount at 31 December
2013
2012
Carrying amount at 1 January 2012
Additions
Transfer
Depreciation
Carrying amount at 31 December
2012
Land &
buildings
$’000
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
14.
INVESTMENT PROPERTIES
Non‐current
Investment properties at fair value
a. Valuation basis
Building
naming
rights
$’000
885
‐
15
‐
900
Plant &
equipment
$’000
1,282
123
‐
(240)
Leased
Plant &
Equipment
$’000
778
‐
‐
(113)
Total
$’000
2,945
123
15
(353)
1,165
665
2,730
885
‐
‐
‐
885
1,150
196
247
(311)
1,282
823
314
(247)
(112)
2,858
510
‐
(423)
778
2,945
Consolidated
2013
2012
$'000
$'000
Parent Entity
2013
$'000
2012
$'000
32,098
32,098
39,863
39,863
‐
‐
‐
‐
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.
Investment properties at fair value
Directors' valuation
Independent valuation
Consolidated
Parent Entity
2013
$'000
2012
$'000
2013
$'000
2012
$'000
78
32,020
32,098
10,020
29,843
39,863
‐
‐
‐
‐
‐
‐
Page | 47
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
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:
At fair value
Balance at beginning of year
Capital Works
Change in fair value
Disposal
Carrying amount at end of the year
Consolidated
Parent Entity
2013
$'000
2012
$'000
2013
$'000
2012
$'000
39,863
58
‐
(7,823)
32,098
39,840
530
(507)
‐
39,863
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
c. Amounts recognised in profit and loss for investment properties
The following amounts have been recognised in the Statement of Comprehensive Income
Consolidated
2013
$'000
2012
$'000
Parent Entity
2013
$'000
2012
$'000
Rental and services income
4,092
4,391
Property running expenses
861
906
‐
‐
‐
‐
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
Shares in controlled entities at cost
Investment in associated entities
Provision for diminutions
16.
TRADE AND OTHER PAYABLES
Current
Unsecured
Trade and other creditors
Other payables
Non‐Current
Unsecured
Payable related entities
Consolidated
2013
$'000
‐
10,019
(2,800)
2012
$'000
‐
7,769
‐
Parent Entity
2013
$'000
24,093
7,843
(2,800)
2012
$'000
21,093
7,843
‐
7,219
7,769
29,136
28,936
Consolidated
2013
$'000
2012
$'000
Parent Entity
2013
$'000
2012
$'000
378
1,844
2,222
513
2,599
3,112
10,241
10,241
4,196
4,196
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
Page | 48
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
17.
FINANCIAL LIABILITIES
Current
Secured
Lease and hire purchase liabilities
Bank loans
Total current
Non‐Current
Secured
Lease and hire purchase liabilities
Bank loans
Total non‐current
Security for borrowings
Consolidated
2013
$’000
2012
$’000
Parent Entity
2013
$’000
2012
$’000
381
468
849
261
2,382
2,643
271
19,950
20,221
412
24,556
24,968
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
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 6.14% (2012: 6.35%).
The facilities are subject to an annual review and compliance financial covenants.
Assets pledged as security
The carrying amounts of non‐current assets pledged as security are:
Investment Property
Land and buildings
Plant and equipment
Consolidated
2013
$’000
2012
$’000
Parent Entity
2013
$’000
2012
$’000
32,098
900
1,830
34,828
39,863
885
2,060
42,808
‐
‐
‐
‐
‐
‐
‐
‐
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
Consolidated
2013
$'000
2012
$'000
Parent Entity
2013
$'000
2012
$'000
Employee leave entitlements
406
408
‐
‐
Page | 49
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
19 OTHER LIABILITIES
Current
Income received in advance
Accrued payable
Non‐Current
Income received in advance
Consolidated
2013
$'000
2012
$'000
Parent Entity
2013
$'000
2012
$'000
49
212
261
3,458
3,458
48
536
584
3,509
3,509
‐
30
30
‐
‐
‐
30
30
‐
‐
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
Non‐Current
Restoration provision
Employee leave entitlements
21
ISSUED CAPITAL
Share capital
Ordinary shares
Consolidated
2013
$'000
2012
$'000
Parent Entity
2013
$'000
2012
$'000
50
308
358
50
275
325
‐
‐
‐
‐
‐
‐
Consolidated and Parent Entity
2013
Shares
Number
2012
Shares
Number
Consolidated and Parent
Entity
2013
2012
$’000
$’000
257,821,022
257,821,022
52,040
52,040
a.
Movements in ordinary share capital during the year
Consolidated
Date
1 January 2013
Details
Balance
Movement during the
year
31 December 2013
Balance
No. of Shares
Exercise
Price
$
$’000
257,821,022
‐
257,821,022
‐
‐
‐
52,040
‐
52,040
b.
c.
d.
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.
Options
There are no unissued ordinary shares of the Company under option at the date of this report.
Performance Options
No options were granted and issued during this year.
Page | 50
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
22.
RESERVES AND ACCUMULATED LOSSES
a. Reserves
Consolidated
Parent Entity
Asset revaluation reserve
Capital reserve
Foreign currency translation reserve
Movements in reserves
Asset revaluation reserve
Balance at start of period
Business combination movement
Balance at the end of period
Capital Profits Reserve
Balance at start of period
Business combination movement
Balance at the end of period
Foreign currency translation reserve
Balance at start of period
Currency translation differences
Balance at the end of period
2013
$’000
1,141
5,752
(1,266)
5,627
1,141
‐
1,141
5,752
‐
5,752
2012
$’000
1,141
5,752
(1,266)
5,627
1,351
(210)
1,141
5,542
210
5,752
(1,266)
‐
(1,266)
(1,269)
3
(1,266)
2013
$’000
2012
$’000
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
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
Balance at the beginning of the year
Profit/(loss) for the year
Balance at the end of the year
(29,561)
(4,967)
(34,528)
(30,810)
1,249
(29,561)
(23,090)
5,139
(23,066)
(24)
(17,951)
(23,090)
Page | 51
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
23.
EARNINGS PER SHARE
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
Profit/(Loss) used in calculating basic and diluted
earnings/(loss) per share
2013
Cents
(1.93)
(1.93)
2013
$’000
(4,967)
2013
Shares
2012
Cents
0.48
0.48
2012
$’000
1,249
2012
Shares
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share
257,821,022
257,821,022
Adjustments for calculation of diluted earnings per share
‐
‐
Weighted average number of ordinary shares used as the
denominator in calculating basic and diluted earnings per
share.
257,821,022
257,821,022
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.
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 | 52
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
24. OPERATING SEGMENTS continued
Primary reporting – business segments
Property
investment &
development
in Australia
$’000
Investment
Services
Mining,
processing &
exploration
Intersegment
eliminations/
unallocated
Consolidated
$’000
$’000
$’000
$’000
3,984
1,423
5,407
‐
5,407
2,629
‐
2,629
3,561
‐
3,561
‐
3,561
5,788
‐
5,788
‐
5,788
(4,110)
‐
(4,110)
(3,486)
‐
(3,486)
‐
(1,423)
(1,423)
‐
(1,423)
‐
‐
‐
13,333
‐
13,333
‐
13,333
(4,967)
‐
(4,967)
2013
Sales to external
customers
Intersegment sales
Total sales revenue
Other revenue
Total segment revenue
Segment result
Profit/(loss) before income
tax expense
Income tax expense
Net profit/(loss)
Segment assets
74,841
17,550
20,859
(51,605)
61,645
Segment liabilities
Acquisition of noncurrent
assets
Depreciation and
amortisation expense
2012
Sales to external
customers
Intersegment sales
Total sales revenue
Other revenue
Total segment revenue
Segment result
Profit/(loss) before income
tax expense
Income tax expense
Net profit/(loss)
Segment assets
Segment liabilities
Acquisition of non current
assets
Depreciation and
amortisation expense
42,906
65,292
11,475
(81,167)
38,506
58
‐
14
27
9
325
‐
‐
81
352
4,286
1,289
5,575
17
5,592
265
‐
265
79,771
49,460
80
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
8,280
‐
8,280
1,063
9,343
1,085
‐
1,085
13,746
5,876
336
407
2,624
(1,289)
1,335
468
1,803
(101)
‐
(101)
(25,176)
(15,101)
‐
‐
15,190
‐
15,190
1,548
16,738
1,249
‐
1,249
68,341
40,235
416
407
Page | 53
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
25.
CASH FLOW INFORMATION
a. Reconciliation of net cash provided by/(used in)
from operating activities to profit/(loss)
Consolidated
Parent Entity
2013
$’000
2012
$’000
2013
$’000
2012
$’000
Profit/(Loss) for the year
Gain on sale of tenements
Gain on disposal of financial assets
Gain on sale of property, plant and
equipment
Depreciation and amortisation
Change in fair value of investment
Change in fair value of investment
properties
Change in fair value of financial
assets
Change in operating assets and
liabilities:
(Increase)/decrease in trade and
other receivables
(Increase)/decrease in inventories
(Increase)/decrease in other current
assets
Increase/(decrease) in trade and
other creditors
(Increase) in deferred tax assets
Increase in deferred tax liabilities
Net cash provided by/(used in)
operating activities
5,139
‐
(8,000)
(24)
‐
‐
(4,967)
1,366
(523)
352
‐
(15)
1,249
‐
(3,130)
(16)
407
2,318
507
‐
‐
‐
‐
3,683
‐
2,800
386
61
61
(135)
‐
‐
1,760
(2,257)
74
311
‐
‐
‐
‐
22
‐
‐
‐
269
1,223
(39)
(24)
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
b. Significant non‐cash transactions
No significant non‐cash transactions occurred during the year.
Page | 54
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
26.
CONTROLLED ENTITIES
Name of entity
Class of
Share
Equity Holding
Country of
formation or
incorporation
Hudson Imports Pty Limited
Hudson Marketing Pty Limited
Hudson Pacific Group Limited
Raffles Equities Limited
Hudson Property Trust
Bundaberg Coal Pty Ltd
HSC Property Pty Limited
Hudson Underwriting Limited
Hudson Corporate Limited
Hudson Asset Management Pty Limited
Hudson Capital Corporation Pty Limited
Sorbent Minerals Pty Ltd
Ecofix Pty Ltd
HTH Holdings Pty Limited
Base Metal Resources Limited
Ashford Coking Coal Pty Ltd
EPC 1262 Pty Ltd
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2013
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
2012
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
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.
Deed Of Cross Guarantee
As at 31 December 2013, 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, Sorbent Minerals Pty Ltd, Ecofix
Pty Ltd, Base Metal Resources Limited, Ashford Coking Coal Pty Ltd, EPC 1262 Pty Ltd, 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 2013 represent those of the “Closed Group”.
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 has lodged for an appearing
and it is set down for a hearing on 28 April 2014 and 29th April 2014. The director best estimate based
on advise from solicitor is that if successful, the best result might be recovery of around $5.25m. If
unsuccessful, the potential liability will be around $800,000 to $1m.
Page | 55
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
28.
COMMITMENTS
Consolidated
Parent Entity
2013
$’000
2012
$’000
2013
$’000
2012
$’000
Lease commitments
Non‐cancellable operating leases ‐ future
minimum lease payments
Within one year
Later than one year but not later than 5 years
Later than 5 years
Finance lease ‐ non‐cancellable
Within one year
Later than one year but not later than 5 years
Later than 5 years
Total future minimum lease payments
Total future finance charges
Lease liabilities
Lease liabilities are represented in the financial
statements as follows:
Current
Non‐current
10
8
‐
18
311
341
‐
652
(82)
570
381
271
652
11
18
‐
29
261
412
‐
673
(97)
576
261
412
673
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
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.
The Group leases machinery at a carrying value of $665,000 (2012: $778,000) by way of finance leases
expiring within 3 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 % (2012: 7%).
Tenement Expenditure Commitments
Tenement exploration expenditure
Tenement lease payment
350
38
388
1,042
92
1,134
‐
‐
‐
‐
‐
‐
The minimum exploration expenditure commitments and lease payments on the Company’s
exploration tenements totalling approximately $ 0.4 million over the remaining term of the tenement
lease.
Page | 56
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
29.
EVENTS OCCURRING AFTER BALANCE DATE
At the date of this report there are no other matters or circumstances, other than noted above, which
have arisen since 31 December 2013 that have significantly affected or may significantly affect:
The operations, in financial years subsequent to 31 December 2013 of the Group;
The results of those operations; or
The state of affairs in financial years subsequent to 31 December 2013 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 (2012: $Nil). The aggregate
number of shares purchased under the ESP by employees is 59,473,000 (2012: 59,473,000). At year‐
end, the total non‐recourse loans outstanding are $7,887,856 (2012: $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 and fair value of ESP plan shares, which are held as security, is $3.86 million, being 6.5 cents per
share, is not recorded in Statement of Financial Position.
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:
CEO Hudson Pacific Group Limited
Vincent Tan
Venkata Kambla Director of Ecofix Pty Ltd
Julian Rockett
Francis Choy
Company Secretary
Chief Financial Officer
appointed 1 February 2002
appointed 27 July 2012
Page | 57
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
31. KEY MANAGEMENT PERSONNEL DISCLOSURES continued
c.
Compensation of Directors and other key management personnel
Consolidated
2013
Short Term Employee Benefits
Salary and
other fees
$
Bonus
$
Travelling
Allowance
$
Post
Employment
Benefits
Superannuation
$
27,437
19,160
‐
46,597
Long Term
Benefits
Long Service
Leave
$
1,091
3,500
‐
4,591
Total
$
131,928
232,660
‐
364,588
10,800
‐
‐
10,800
‐
16,425
2,977
259,402
10,800
‐
‐
‐
10,800
13,757
‐
6,305
21,484
57,971
3,258
‐
1,456
3,663
11,354
178,481
40,210
76,761
263,863
818,717
92,600
210,000
‐
302,600
240,000
150,666
40,210
69,000
238,716
738,592
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
Short Term Employee Benefits
Post
Employment
Benefits
Salary and
other fees
Bonus
Travelling
Allowance
Superannuation
Long Term
Benefits
Long Service
Leave
Total
$
$
$
$
$
$
105,000
205,000
‐
310,000
240,000
210,462
40,209
61,000
551,671
‐
‐
‐
‐
10,800
‐
‐
10,800
‐
‐
‐
3,315
3,315
‐
‐
‐
‐
9,450
16,269
‐
25,719
16,200
19,350
‐
5,788
41,338
3,742
4,894
‐
8,636
2,985
5,732
‐
1,172
9,889
128,992
226,163
‐
355,155
259,185
235,544
40,209
71,275
606,213
Directors
John W Farey
Juliana Tan
Peter J Meers
Director ‐ Total
KMP
Vincent Tan
Venkata
Kambala
David Hughes
Julian Rockett
Francis Choy
KMP ‐ Total
Consolidated
2012
Directors
John W Farey
Juliana Tan
Peter J Meers
Director ‐ Total
KMP
Vincent Tan
Francis Choy
David L Hughes
Julian Rockett
KMP ‐ Total
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 | 58
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
31. KEY MANAGEMENT PERSONNEL DISCLOSURES continued
c. Direct interest in ordinary shares
Ordinary Shares ‐ Direct Interest
Balance at start
of year
shares
Changes during
the year
shares
Balance at end
of year
shares
2013
Directors
John W Farey
Juliana Tan
Peter J Meers
Key Management Personnel
Vincent Tan
Francis Choy
2012
Directors
John W Farey
Juliana Tan
Peter J Meers
Key Management Personnel
Vincent Tan
David L Hughes
Francis Choy
Ordinary Shares ‐ Indirect Interest
2013
Directors
John W Farey
Juliana Tan
Peter J Meers
Key Management Personnel
Vincent Tan
2012
Directors
John W Farey
Juliana Tan
Peter J Meers
Key Management Personnel
Vincent Tan
6,738,032
‐
‐
4,294,362
11,886,084
6,738,032
‐
‐
4,294,362
12,713,888
11,886,084
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
6,738,032
‐
‐
4,294,362
11,886,084
6,738,032
‐
‐
4,294,362
12,713,888
11,886,084
Balance at start
of year
shares
Changes during
the year
shares
Balance at end
of year
shares
‐
4,294,362
‐
30,000
‐
4,294,362
‐
30,000
‐
‐
‐
‐
‐
‐
‐
‐
‐
4,294,362
‐
30,000
‐
4,294,362
‐
30,000
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 | 59
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
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
Consolidated
and Parent
Entity
Balance at
the start
of the year
Advance/
(Repayments)
/ (Transfers)
Interest
payable
for the
year
Balance at
the end of
the year
Number in
Group at
end of
year
Additional
interest
otherwise
payable
$
$
$
$
$
2013
2012
5,313,188
5,313,188
‐
‐
‐
‐
5,313,188
5,313,188
4
4
318,790
318,790
(ii). Details of individuals with loans above $100,000 during the year are set out below.
Balance at
the start of
the year
Advance/
(Repayment)/
(Transfer)
Interest
payable
for the
year
Balance as
at the end
of the year
Highest
indebtedness
during the
year
Additional
interest
otherwise
payable*
2013
$
$
$
$
$
$
Directors
John W Farey (ESP)
KMP
Vincent Tan (ESP)
Francis Choy (ESP)
David L Hughes (ESP)
1,560,459
900,000
1,184,988
1,667,741
5,313,188
2012
Directors
John W Farey (ESP)
1,560,459
KMP
Vincent Tan (ESP)
Francis Choy (ESP)
David L Hughes (ESP)
900,000
1,184,988
1,667,741
5,313,188
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
1,560,459
1,560,459
93,627
900,000
1,184,988
1,667,741
900,000
1,184,988
1,667,741
54,000
71,099
100,064
5,313,188
5,313,188
318,790
1,560,459
1,560,459
93,627
900,000
1,184,988
1,667,741
900,000
1,184,988
1,667,741
54,000
71,099
100,064
5,313,188
5,313,188
318,790
* Market interest rate 6% (2012: 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. If employee leave the Company, all
ESP plan shares will be returned to Company within a specified period. None were written down during the
year.
Page | 60
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
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/
Consolidated
Parent Entity
2013
$
2012
$
2013
$
2012
$
Management fee received
‐
From Hudson Resources Limited
‐
From Tiaro Coal Limited
‐
From Australian Bauxite Limited
‐ From Sovereign Gold Company Limited
‐
‐
From Raffles Capital Limited
From Precious Metal Resources Limited
408,000
440,400
401,600
965,225
408,000
440,400
381,000
411,000
411,000
406,000
381,000
406,000
Rental Income
‐
‐
From Hudson Resources Limited
From Hudson Capital Corporation Pty Ltd
105,575
65,000
106,646
60,000
Rental Expenses
‐
Paid to Hudson Resources Limited
316,726
313,938
Management fee paid
‐ To Raffles Capital Limited
Purchase of Goods
‐
From Hudson Resources Limited
Carpark Income and Expenses
‐
Paid to Hudson Property Trust
‐
240,000
210,867
765,423
358,305
319,134
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
Management fees received
Consolidated group only
HCL received an administration fee from Hudson Resources Limited of $408,000 (2012: $381,000) as
payment of recoveries for office administration and running expenses incurred in HCL.
HCL received an administration fee from Tiaro Coal Limited of $440,400 (2012: $411,000) as payment
of recoveries for office administration and running expenses incurred in HCL.
HCL received an administration fee from Australian Bauxite Limited of $401,600 (2012: $411,000) as
payment of recoveries for office administration and running expenses incurred in HCL.
HCL received an administration fee from Sovereign Gold Company Limited of $965,225 (2012:
$406,000) as payment of recoveries for office administration and running expenses incurred in HCL.
HCL received an administration fee from Raffles Capital Limited of $408,000 (2012: $381,000) as
payment of recoveries for office administration and running expenses incurred in HCL.
Page | 61
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
HCL received an administration fee from Precious Metals Limited of $440,400 (2012: 406,000) as
payment of recoveries for office administration and running expenses incurred in HCL.
Rental income
Consolidated group only
HMPL received rental income from HRL $105,575 (2012: $104,646) for using the storage facilities in
Geraldton plant.
Hudson Capital Corporation Pty Limited received rental income from HCL of $65,000 (2012: $60,000)
for using the building name and roof‐top signage.
Rental expenses
Consolidated group only
HMPL incurred rental expenses of $316,726 (2012: $313,938) payable to both HRL and Hudson
Minerals Limited (HML) for leasing the Geraldton property.
Management fees paid
HCL paid a consulting fee to Raffles Capital Limited of $Nil (2012:$ 240,000) as payment of consulting
services rendered by Raffles Capital Limited during the year.
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 $210,867 (2012: $765,423).
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
$358,805 during the year (2012: $319,134).
e. Outstanding balances
The following balances are outstanding at the reporting date in relation to transaction with related
parties:
Consolidated
Parent Entity
2013
$
2012
$
2013
$
2012
$
10,240,609
‐
‐
‐
4,195,683
200,000
690,487
‐
‐
‐
‐
‐
‐
‐
‐
‐
Payable
Related Entities
Hudson Resources Limited
Tiaro Coal Limited
Precious Metal Resources Limited
Controlled Entities
Receivable
Related Entities
Raffles Capital Limited
Precious Metal Resources Limited
Controlled Entities
2,759,757
821,806
‐
125,000
‐
‐ 18,960,240
‐
‐
‐
‐
13,999,400
Provisions for doubtful debts have been raised in relation to outstanding non‐interest bearing
balances from controlled entities amounting to $14,000,000 (2012: $14,000,000). No expense has
been recognised in respect of bad or doubtful debts due from related parties.
Page | 62
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
32. RELATED PARTY DISCLOSURES continued
f. Guarantees
No guarantees were given or received from related parties during the year.
g. 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 2013, 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, Sorbent Minerals Pty Ltd, Ecofix Pty Ltd, Base
Metal Resources Limited, Ashford Coking Coal Pty Ltd, EPC 1262 Pty Ltd, 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 2013 represent those of the “Closed Group”.
34.
REMUNERATION OF AUDITORS
Consolidated
Parent Entity
2013
$
2012
$
2013
$
2012
$
Audit services:
Amounts paid or payable to auditors for
audit and review of the financial report for
the entity or any entity in the Group
Audit and review services fees
27,505
26,195
27,505
26,195
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
Advisory services
Total
8,545
1,022
9,567
8,135
5,050
13,185
8,545
‐
8,545
8,135
‐
8,135
Page | 63
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
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 2013 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 2013, 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
24 March 2014
Juliana Tan
Director
Page | 64
For personal use only
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF HUDSON INVESTMENT GROUP LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Hudson Investment Group Limited (the
company) and Hudson Investment Group Limited and Controlled Entities (the consolidated
entity) which comprises the consolidated statement of financial position as at 31 December
2013, and the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for
the year ended on that date, a summary of significant accompanying policies, other
explanatory notes and the directors’ declaration of the consolidated entity comprising the
company and the entities it controlled at the year’s end or from time to time during the
financial year.
We have also audited the remuneration disclosures contained in the Directors’ report. As
permitted by the Corporations Regulations 2001, the company has disclosed information
about the remuneration of Directors and executives (“remuneration disclosures”), required by
Australian Accounting Standard AASB 124: Related Party Disclosures, under the heading
“Remuneration Report” in the Directors’ report and not in the financial report.
Director’s Responsibility for the Financial Report and the Remuneration Report
contained in the Directors’ Report
The Directors of Hudson Investment Group Limited are responsible for the preparation of the
financial report that gives a true and fair view in accordance with Australian Accounting
Standards (including the Australian Accounting Interpretations) and the Corporations Act
2001. This responsibility includes establishing and maintaining internal controls relevant to the
preparation and fair presentation of the financial report that is free from material misstatement,
whether due to fraud or error; selecting and applying appropriate accounting policies; and
making accounting estimates that are reasonable in the circumstances. The directors also
state, in accordance with Accounting Standard AASB 101: Presentation of Financial
Statements that the financial report comply with International Financial Reporting Standards
(IFRS).
The Directors of the company are also responsible for the remuneration report contained in
the Directors’ Report in accordance with s300A of the Corporations Act 2001.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. Those Standards
require that we comply with relevant ethical requirements relating to audit engagements and
plan and perform the audit to obtain reasonable assurance whether the financial report is free
from material misstatement and that the remuneration report in the Directors’ Report is in
accordance with Australian Auditing Standards.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the financial
report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the
financial report in order to design audit procedures that are appropriate in the circumstance,
but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by the Directors as well as evaluating
the overall presentation of the financial report and the remuneration disclosures contained in
the Directors’ report.
For personal use only
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF HUDSON INVESTMENT GROUP LIMITED (Cont’d)
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001. We confirm that the independence declaration required by the
Corporations Act 2001, provided to the directors of Hudson Investment Group Limited would
be in the same terms if it had been given to the directors at the time that this auditor’s report
was made.
Auditor’s Opinion
In our opinion:
(a)
the financial report of Hudson Investment Group Limited and Hudson Investment
Group Limited and Controlled Entities is in accordance with the Corporations Act
2001, including:
(i)
(ii)
giving a true and fair view of the company’s and consolidated entity’s
financial position as at 31 December 2013 and of their performance for the
year ended on that date; and
complying with Australian Accounting Standards (including the Australian
Accounting Interpretations) and the Corporations Regulations 2001.
(b) the financial report of the company and consolidated entity also comply with IFRS
as disclosed
in Note 1.
Auditor’s opinion on the Remuneration Report contained in the Directors’ Report.
In our opinion, the remuneration disclosures that are contained on pages 10 to 12 of the
Directors’ Report comply with S300A of the Corporations Act 2001.
KS Black & Co
Chartered Accountants
Faizal Ajmat
Partner
Sydney, 24 March 2014
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
SHAREHOLDER INFORMATION
As at 28 February 2014
A. Substantial Holders
Those shareholders who have lodged notice advising substantial shareholding under the Corporations Act
2001 are as follows:
Shareholder
Raffles Capital Limited
Citicorp Nominees Pty Ltd
Ms Yoke Tow Hong
JT Capital Pty Ltd
B. Distribution of Equity Securities
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
Total Holders
123
102
56
132
54
467
No. of Shares
88,800,000
30,191,600
21,876,212
19,183,362
Units
55,930
277,307
471,722
5,018,227
251,997,836
0
257,821,022
% held
34.44
11.71
8.49
7.44
% of Issued
Capital
0.02
0.11
0.18
1.95
97.74
0
100.00
Minimum $500.00 parcel at $0.0660 per unit
Minimum Parcel size
7,576
Holders
238
Units
415,175
D. Twenty Largest Shareholders
The names of the twenty largest holders of quotes equity securities aggregated are listed below:
Rank
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Raffles Capital Limited
Citicorp Nominees Pty Limited
Ms Yoke Tow Hong
JT Capital Pty Ltd
Mr David Laurence Hughes
Mr Allan James Scadden
Mr Francis Choy
Mr John Wang
Sing Capital Pty Ltd
Pacific Portfolio Investments
Mr John Farey
Vincent See Yin Tan
Ms See Wee Tan
Union Pacific Investments Pty Ltd
Ms Yee Kein Teh
Mrs Choon Piang Lee
Ms Mao Ying Zhang
Mr Sat Pal Khattar
Mr Trevor Neil Hay
Mr Sng You Thiam
Totals: Top 20 holders of FULLY PAID 50 CENT SHARES
Total Remaining Holders Balance
Page | 67
Units
88,800,000
30,191,600
21,876,212
19,183,362
12,713,888
12,620,912
11,886,084
11,524,084
9,433,480
9,144,208
6,738,032
4,050,000
3,000,000
1,361,999
1,043,204
1,241,999
1,000,000
1,000,000
637,274
500,000
247,946,338
9,874,684
% of Issued
Capital
34.44
11.71
8.49
7.44
4.93
4.90
4.61
4.47
3.65
3.55
2.61
1.57
1.16
0.53
0.41
0.40
0.39
0.39
0.25
0.19
96.09
3.91
For personal use only
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2013
E.
Interests in Bundaberg Coal Tenements
Licence
Location
EPC 1262
EPC 1275
West of Blair Athol and Clermont coal mines
Surat Basin
Square km
654
858
Percentage
Interest
50%
100%
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Annual Report 31 December 2013
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