MILTON CORPORATION LIMITED
ABN 18 000 041 421
An Australian Listed Investment Company
Listed since 1958
ANNUAL REPORT 2012
Profile
Milton was established as a private investment vehicle for four shareholders in 1938. It became a public
company in 1950 and listed on the Sydney Stock Exchange in 1958. Milton is now an investment vehicle for its’
more than 18,000 shareholders and it is listed on the Australian Securities Exchange (ASX) under the code
MLT.
Objective
Milton’s objective is to hold a diversified portfolio of assets that generates a growing income stream for
distribution to shareholders in the form of increasing fully franked dividends and provides capital growth in the
value of the shareholders’ investments.
Investment philosophy
Milton is predominantly a long term investor in companies and trusts that are well managed, with a profitable
history and an expectation of increasing dividends and distributions. Turnover of investments is low and capital
gains arising from disposals are reinvested.
Milton also invests in hybrid securities, liquid assets such as cash and term deposits and real property
development through joint ventures.
Milton’s Investment Committee, which includes three non-executive directors and the managing director, meets
regularly to review the investment portfolio and to consider executives’ investment recommendations.
Equity Investment portfolio
Milton’s $1.8 billion equity investment portfolio, which represents 91% of total assets, comprises companies and
trusts which are expected to provide an increase in investment revenue over the long term. Its composition has
been determined by consistent application of its investment philosophy over many years and consequently the
portfolio is not aligned with any stock exchange index. A list of investments by sector commences on page 7
and the classification of investments is detailed in the Chairman’s Review on page 4.
Dividend policy
Ordinary fully franked dividends are paid out of profit after tax excluding special investment revenue and
acquisition related costs of subsidiaries. Milton has paid a dividend every year since listing and since the
introduction of franking they have all been fully franked. Refer to the dividend history graph on page 3.
Internal management
Milton’s directors oversee the performance of its executives who manage the company and its investments to
maximise returns to its shareholders. This internal management structure helps to maintain low operating costs.
Contents
Key Performance Indicators
Chairman’s Review of the 2012 Financial Year
Dividend History
Classification of Investments
Five Year Financial Summary
Milton Corporation Foundation
Listed Investments by Sector at 30 June 2012
1
2
3
4
6
6
7
Directors’ Report
Corporate Governance Statement
Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Directory
ASX Information
11
19
22
45
46
48
49
Calendar
Final dividend:
- Ex dividend date
- Payment date
Annual General Meeting:
- To be held at
15 August 2012
4 September 2012
16 October 2012 at 3 pm
The Lyceum Room,
Wesley Conference Centre
220 Pitt Street, Sydney
Key performance indicators
Profit after tax
This represents the ordinary profit from the investments and includes
special investment revenue and acquisition related costs of subsidiaries.
2012
2011
$103.4 million $93.9 million
Weighted average earnings per share
85.0 cents
83.9 cents
Underlying operating profit after tax
$102.7 million $90.5 million
This represents the ordinary profit from the investments and excludes
special investment revenue and acquisition related costs of subsidiaries.
Weighted average underlying operating earnings per share
84.4 cents
80.8 cents
The underlying operating profit after tax expressed on a per share basis
after taking into account additional shares issued during the year.
Fully franked ordinary dividends per share
Ordinary fully franked dividends are paid out of underlying operating profit
after tax.
Interim dividend per share
Final dividend per share
Full year dividend per share
38 cents
40 cents
78 cents
37 cents
39 cents
76 cents
Full year ordinary dividend as a percentage of underlying operating profit
after tax.
92%
92%
Fully franked special dividend
-
5.0 cents
Special fully franked dividends are paid out of receipts of special
investment revenue.
Net tangible asset value at 30 June
$2.0 billion
$2.1 billion
The net tangible asset value before providing for tax on unrealised capital
gains.
Net tangible asset backing per share at 30 June
$16.42
$17.36
The net tangible asset backing per share is the net tangible asset value
expressed on a per share basis.
Management expense ratio
0.16%
0.17%
The management expense ratio is the total cost of running Milton
expressed as a percentage of the average Total Assets for the year.
Total Shareholder Return (TSR) over 10 years
6.7%
7.8%
This compound return measures the change in the value of an investment
in Milton by considering the movement in the market price and assuming
dividends are reinvested in Milton shares. See commentary on page 4.
1
Chairman’s Review of the 2012 financial year
Milton’s underlying operating profit for the year increased to $102.7 million, with growth in dividend income from
Milton’s portfolio of listed investments being the main driver of the improved return.
The dividend income growth is partly attributable to the
increased size of the portfolio following the December 2010
merger with Choiseul Investments Limited and partly due to
higher dividends from many of the companies in the portfolio.
The Choiseul merger also lifted Milton’s average cash
balances for the year and the earnings on the additional cash
more than offset the effect of lower interest rates on offer
during the year so that interest income of $7.2 million was
5.8% higher than the previous year.
The weighted average earnings per share, based on
underlying operating profit, increased by 4.5% to 84.4 cents
per share.
Dividends and distributions
100.9
Up 13.6%
$ million
Change
Interest income
Joint venture profits
Other income
Administration expenses
Underlying operating
profit
Income tax expense
Underlying operating
profit after tax
7.2
3.7
0.5
112.3
(3.2)
109.1
(6.4)
102.7
Up 13.5%
Weighted ave shares on
issue (million)
121.6
The underlying operating profit excludes special investment
revenue as this revenue typically results from one off
dividends and distributions. In the 2012 financial year there
was a significant reduction in the size and number of special
dividends received, with just $0.8 million recorded in 2012 compared with $3.6 million the year before.
(1) based on underlying operating profit
Weighted ave eps (1)
84.4
Milton’s net profit, which is a combination of underlying operating profit and the special revenue, increased by
10.2% to $103.4 million.
Milton aims to provide its investors with a growing stream of fully franked ordinary dividends which are paid out
of underlying operating profits. Since the introduction of franking, all dividends have been fully franked and
Milton currently has sufficient franking credits to ensure that all dividends paid in the forseeable future will
continue to be fully franked.
In 2012 Milton’s shareholders received an increase in both the interim and final dividends. The fully franked
interim dividend paid in February 2012 was increased by 1 cent per share to 38 cents per share and the fully
franked final dividend to be paid in September 2012 was increased by 1 cent per share to 40 cents per share.
The franking credits attached to the dividends can enhance
the after tax return for shareholders who pay tax in Australia.
Under the dividend imputation system a fully franked
dividend of 78 cents per share equates to pre tax income of
111.4 cents per share.
The total dividend payment for the year of $94.9 million
was 92.4% of underlying operating profit for the 2012
financial year. This payout ratio allows Milton to retain
some funds for future investment and it assists Milton to
at least maintain future dividends.
Milton currently aims to pay out between 90% and 95% of full
year underlying operating profit each year.
UOP(1)
(1)
Ordinary dividend
120
100
80
60
40
20
0
2009
2010
2011
2012
(1) Underlying operating profit
2
Chairman’s Review of the 2012 financial year (continued)
The following graph shows the growth in Milton’s dividends since the company was listed in 1958. It assumes
1,000 shares were purchased for £1,000 in 1958 and dividends have NOT been reinvested and no further
shares have been purchased. Through the sub-division of shares on the introduction of decimal currency and
bonus share issues, the number of shares held would have increased to 5,706. At 30 June 2012 these shares
would have been valued at $86,788. The annual dividend has increased from $160 in 1959 to $4,451 in 2012.
The growth in Milton’s dividends reflects strong growth in investment income from its long term investment
portfolio as well as an increase in the payout ratio.
Ordinary dividend
Special dividend
Fully franked since 1987
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
The value of Milton’s net assets before provision for tax on unrealised capital gains at 30 June 2012 was
$2 billion, which equated to $16.42 per share.
As a long term equity investor, Milton remained quite fully invested throughout the year with 91% of its assets
invested in Australian equities at 30 June 2012. Milton also held $131 million in cash and other liquid assets
which could be utilised to invest in companies that have predictable earnings and dividends when opportunities
arise.
Milton took advantage of such opportunities in the 2012 financial year and outlaid a total of $49 million to
increase its investment in 45 companies that were already held by Milton. Larger increases to the investment
portfolio were AGL Energy, Amcor, Bank of Queensland, BHP Billiton, and Cardno.
The increased investments were funded from the proceeds from disposals, which amounted to $34 million, and
existing cash balances.
The takeovers of Coal & Allied Industries, Foster’s Group and Macarthur Coal provided funds of $27 million. A
further $7 million were received from the sale of a number of smaller holdings.
Milton’s investment portfolio, at 30 June 2012, included exposure to 92 listed companies and 14 listed trusts.
These companies and trusts, which are listed on the Australian Securities Exchange, operate in a variety of
sectors and geographies. A full list of investments is shown on pages 7 to 10.
The table on the following page shows the classification of assets by sector and how Milton’s exposure to each
sector changed over the year.
3
Chairman’s Review of the 2012 financial year (continued)
Total assets classified by sector
Classification(1)
Opening
position
Additions
Disposals
Change in
value
Closing
position
Income
$ million
$ million
$ million
$ million
$ million
$ million
Banks
Diversified financials
Materials
Consumer staples
Commercial services
Insurance
Energy
Telecommunications
Capital goods
Real estate
Healthcare
Other shares
Utilities
Retailing
Media
Total listed investments
Cash & liquids(2)
Other assets(3)
Total assets
667.3
204.3
268.7
214.0
113.5
101.9
73.7
37.0
54.0
46.1
38.1
36.4
31.8
22.2
19.2
5.9
1.3
7.7
6.2
0.4
1.9
1.9
3.8
6.6
0.3
2.0
2.8
5.8
1.7
0.7
-
-
(6.5)
(16.9)
(0.4)
(0.3)
(4.9)
-
(3.0)
(0.4)
-
-
(0.5)
(0.4)
(1.1)
(36.6)
(2.9)
(67.4)
(6.4)
14.8
(11.8)
(14.9)
9.1
(8.5)
(1.4)
3.9
1.0
2.3
7.7
(6.5)
636.6
202.7
202.5
196.9
128.3
91.7
55.8
49.9
49.1
44.6
44.0
40.2
39.4
31.2
12.3
45.7
8.6
7.4
9.6
5.4
5.1
2.4
3.3
2.7
3.4
1.3
1.9
1.6
1.5
1.4
1,928.2
49.0
(34.4)
(117.6)
1,825.2
101.3
142.7
42.5
2113.4
132.2
45.4
7.2
4.2
2002.8
113.1
(1)
Investments are grouped according to their asset classes using the Global Industry Classification Standard (“GICS”) codes. Full details
of the investments at 30 June 2012 are reported on pages 7 to 10.
(2) Cash & liquid assets include cash, term deposits and hybrid securities.
(3) Other assets include Receivables and investments in real property development through joint ventures.
Milton’s total return is a combination of its profit after
expenses and tax together with the revaluation of its
investment portfolio.
Milton’s total return for the 2012 financial year was minus
$14.1 million, which equated to minus 0.7% of net assets at
30 June 2011.
The performance of the equity market as measured by the
movement in the accumulation return of the All Ordinaries
Index was minus 7%.
If the Index included costs and tax, then Milton’s
outperformance of the market over the year would have
been greater.
Movement in Net Assets (1)
for the year ended 30 June 2012
Income before provision for tax
Expenses
Tax expense
Change in value of investments
Total return
Net assets 30 June 11
Dividends paid during the year
Net assets(1) 30 June 12
Net assets(1) per share 30 June 12
$ millions
113.1
(3.2)
(6.4)
(117.6)
(14.1)
2,111.2
(99.7)
1,997.4
$16.42
(1) before provision for tax on unrealised capital gains
4
Chairman’s Review of the 2012 financial year (continued)
Top 20 Investments at 30 June 2012
Company
Westpac Banking Corporation
Commonwealth Bank
Washington H. Soul Pattinson
Campbell Brothers
National Australia Bank
BHP Billiton
Wesfarmers
Woolworths
ANZ Banking Group
Telstra Corporation
Outlook
Company
Fair
value
$ million
% of
total
assets
Fair
value
$ million
% of
total
assets
220.1
159.9
125.4
117.6
102.4
101.1
85.6
69.3
62.4
43.4
11.0
Bank of Queensland
8.0
Bendigo and Adelaide Bank
6.3 QBE Insurance Group
5.9
5.1
5.0
AGL Energy
Brickworks
Rio Tinto
4.3 Woodside Petroleum
3.5
3.1
2.2
CSL
Suncorp-Metway
Perpetual Trustees
43.4
42.3
36.2
34.0
32.6
25.5
24.5
23.1
22.9
18.8
2.2
2.1
1.8
1.7
1.6
1.3
1.2
1.2
1.1
0.9
Total market value of Top 20
1,390.5
69.5
In the short term the Australian equity market is likely to continue to be affected by news regarding Euro zone
issues, China growth and the strength of the US recovery. Until there is a clear solution to the Euro zone debt
issues and investors have considered its implications for global economic growth equity markets are likely to
remain volatile.
Under these conditions share price movements can often be a reaction to macro factors and unrelated to the
economic performance of the companies themselves and this can provide Milton with the opportunity to invest
in well managed companies that have predictable earnings and dividends.
Milton has a strong balance sheet and is well placed to take advantage of these opportunities.
Milton’s objective for the 2013 financial year is to at least maintain the fully franked, full year dividend of
78 cents per share.
Board changes
Mr John Aitken retired as a director of Milton at the conclusion of the annual general meeting in October 2011.
Mr Aitken joined the Milton board in 2001 and served on the Investment and Audit Committees. I would like to
thank Mr Aitken for his contribution over more than a decade.
In December 2011, Mr Kevin Eley became a director of Milton. Mr Eley has extensive experience in the
investment industry and is a member of the Investment and Audit Committees. Mr Eley will stand for election at
the annual general meeting which is to be held on 16 October 2012.
R. D. MILLNER
Chairman
Sydney, 9 August 2012
5
Five Year Financial Summary
Underlying operating profit after tax(1) ($million)
Underlying earnings per share (cents)
Profit after tax ($million)
Earnings per share (cents)
Administration costs as % of average total assets
Interim dividend (cents per share)
Final dividend (cents per share)*
Full year ordinary dividend (cents per share)
Special dividend (cents per share)
*LIC Capital Gain paid as part of final dividend
(cents per share)
Net assets(2) at 30 June ($million)
Net asset backing per share(2) at 30 June($)
Net asset backing per share(3) at 30 June($)
Last sale price at 30 June ($)
All Ordinaries Index at 30 June
2012
102.7
84.4
103.4
85.0
0.16
38
40
78
-
-
2011
2010
2009
2008
90.5
80.8
93.9
83.9
0.17
37
39
76
5
-
68.9
73.7
73.1
78.2
0.17
35
36
71
-
2
73.6
85.0
69.4
80.1
0.19
43
35
78
-
-
82.8
98.5
122.0
145.2
0.17
43
45
88
8
12
1,997
2,112
1,603
1,338
1,609
16.42
17.36
16.51
15.04
19.03
15.46
16.11
15.17
13.98
16.78
15.21
15.60
15.98
14.50
19.38
4135
4660
4325
3948
5333
Ten year Total Shareholder Return (% per annum)
6.7
7.8
Five year Total Shareholder Return (% per annum)
(3.0)
(0.4)
10.7
4.0
9.8
6.0
Shares on issue(4) (million)
Number of shareholders
121.6
123.3
97.1
88.9
19,008
19,490
15,890
14,578
13,890
13.4
12.4
84.5
(1) Underlying operating profit after tax excludes special investment revenue, acquisition related costs of subsidiaries and realised
capital gains and losses.
(2) Before provision for tax on unrealised capital gains net of tax on unrealised capital losses and before providing for the ordinary final
dividend.
(3) After provision for tax on unrealised capital gains net of tax on realised capital losses and before providing for the ordinary final
dividend.
(4)
In October 2011, shareholders approved the cancellation of 1,700,000 Milton shares that were held by Choiseul Investments Limited.
Milton Corporation Foundation (ABN 95 051 921 133)
The Foundation was established in 1988 to support charitable organisations, particularly those which direct
assistance to persons that are disadvantaged in the community.
The objective was to create a vehicle with sufficient capital that could, over time, make regular meaningful
donations from the earnings derived from its investments. Contributions from Milton and others over the years
have helped to grow the Foundation’s total assets to $1.7 million.
This financial year earnings from these assets enabled the Foundation to support 13 organisations through
donations that totalled $100,000. The Foundation has provided $1.6 million of assistance to the community
since its establishment.
Shareholders who wish to support the Foundation are invited to make tax deductible donations of $2 or more by
forwarding them to The Trustees, Milton Corporation Foundation, PO Box R1836, Royal Exchange NSW 1225.
6
LISTED INVESTMENTS BY SECTOR AT 30 JUNE 2012
Automobiles & Components
Fleetwood Corporation Limited
Schaffer Corporation Limited
Banks
Australia & New Zealand Banking Group Limited
Australia & New Zealand Banking Group Limited
convertible preference shares
Australia & New Zealand Banking Group Limited – CPS 1
Bendigo and Adelaide Bank Limited
Bank of Queensland Limited
Commonwealth Bank of Australia
Commonwealth Bank of Australia – PERLS V
National Australia Bank Limited
MyState Limited
Wide Bay Australia Limited
Westpac Banking Corporation
Capital Goods
Bradken Limited
Cardno Limited
CSR Limited
GWA International Limited
Hills Holdings Limited
Leighton Holdings Limited
Reece Australia Limited
Sedgman Limited
UGL Limited
Commercial Services
Brambles Limited
Cabcharge Australia Limited
Campbell Brothers Limited
Transfield Services Limited
Consumer Services
Crown Limited
InvoCare Limited
Tatts Group Limited
7
Holding
177,000
68,999
Fair Value
$'000
2,078
248
2,326
2,830,380
62,353
19,500
2,000
5,709,709
6,550,276
3,012,075
500
4,348,688
444,992
433,570
10,417,683
704,338
751,090
208,741
2,275,000
1,051,478
757,865
130,916
1,521,674
1,352,191
1,167,966
134,711
2,168,165
1,519,032
267,301
1,695,526
658,000
1,935
199
42,309
43,363
159,941
102
102,368
1,357
2,519
220,126
636,572
3,656
5,678
292
4,778
1,115
12,330
2,356
2,115
16,781
49,101
7,195
674
117,623
2,757
128,249
2,269
13,666
1,724
17,659
Holding
1,367,184
310,099
4,784,560
161,862
1,023,271
2,501,866
340,685
2,586,473
809,094
394,202
1,304,250
1,147,375
354,809
270,400
235,503
161,067
494,118
818,126
2,940,394
9,094,840
47,700
1,290,107
387,106
1,407,057
790,175
230,612
372,166
31,800
587,062
104,942
522,563
Fair Value
$'000
18,293
2,946
16,124
210
4,451
74,806
10,752
69,318
196,900
4,167
11,755
5,426
1,325
5,606
641
2,605
974
12,847
18,735
13,202
125,418
202,701
645
5,173
4,723
14,985
24,511
5,788
55,825
9,769
2,094
23,142
2,373
6,637
44,015
LISTED INVESTMENTS BY SECTOR AT 30 JUNE 2012 (continued)
Consumer Staples
Coca-Cola Amatil Limited
Graincorp Limited
Metcash Limited
Select Harvests Limited
Treasury Wine Estates Limited
Wesfarmers Limited
Wesfarmers Limited Partially Protected
Woolworths Limited
Diversified Financials
Argo Investments Limited
ASX Limited
Australian Foundation Investment Company Limited
BKI Investment Company Limited
Carlton Investments Limited
Diversified United Investment Limited
Equity Trustees Limited
IOOF Holdings Limited
Macquarie Group Limited
Perpetual Limited
The Trust Company Limited
Washington H Soul Pattinson & Company Limited
Energy
Caltex Limited
New Hope Corporation Limited
Origin Energy Limited
Santos Limited
Woodside Petroleum Limited
Worley Parsons Limited
Healthcare
Blackmores Limited
Cochlear Limited
CSL Limited
Ramsay Health Care Limited
Sonic Healthcare Limited
8
LISTED INVESTMENTS BY SECTOR AT 30 JUNE 2012 (continued)
Insurance
AMP Limited
Austbrokers Holdings Limited
Insurance Australia Group Limited
IAG Convertible Preference Shares
IAG Finance (NZ) Limited perpetual reset exchangeable notes
QBE Insurance Group Limited
Suncorp Group Limited
Suncorp Group Limited convertible preference shares
Materials
Adelaide Brighton Limited
Alumina Limited
Amcor Limited
Arrium Limited (previously OneSteel Limited)
BHP Billiton Limited
Boral Limited
Brickworks Limited
Fletcher Building Limited
Incitec Pivot Limited
Orica Limited
Rio Tinto Limited
Sims Metal Management Limited
Media
Amalgamated Holdings Ltd
APN News & Media Limited
Consolidated Media Limited
Fairfax Media Limited
Seven Group Holdings Limited – TELYS4 preference shares
Seven West Media Limited
Ten Network Holdings Limited
Holding
2,021,110
984,795
3,657,575
3,000
12,000
2,705,729
2,832,882
38,000
1,863,440
1,121,919
1,160,322
3,995,301
3,215,996
1,627,462
3,224,567
803,229
1,529,770
176,987
450,888
793,037
740,667
1,309,855
267,301
3,231,643
7,000
1,619,110
1,260,246
Fair Value
$'000
7,781
6,834
12,728
294
1,192
36,203
22,918
3,730
91,680
5,926
886
8,227
3,456
101,143
4,801
32,568
3,695
4,360
4,370
25,475
7,621
202,528
4,777
865
901
1,794
546
2,825
636
12,344
9
LISTED INVESTMENTS BY SECTOR AT 30 JUNE 2012 (continued)
Real Estate
Australand Property Group
BWP Trust
CFS Retail Property Trust
Charter Hall Retail REIT
Commonwealth Property Office Fund
FKP Property Group
Goodman Group
Lend Lease Corporation Limited
Mirvac Group
Stockland Group
Westfield Group
Westfield Retail Trust
Retailing
A P Eagers Limited
ARB Corporation Limited
Automotive Holdings Group Limited
David Jones Limited
Noni B Limited
Premier Investments Limited
Telecommunication
Telstra Corporation Limited
TPG Telecom Limited
Transport
Lindsay Australia Limited
Qube Logistics Holdings Limited
Sydney Airport (previously MAP Group)
Transurban Group
Toll Holdings Limited
Utilities
AGL Energy Limited
APA Group
Holding
832,732
1,363,394
9,102,979
613,350
1,724,537
3,630,448
184,756
448,216
327,380
2,150,940
477,895
590,873
5,448,670
744,741
1,039,260
356,090
867,396
385,250
11,767,253
3,731,553
1,600,000
1,268,000
432,301
2,157,081
1,098,679
2,304,752
1,083,833
Fair Value
$'000
2,057
2,543
17,660
2,030
1,750
1,380
678
3,227
417
6,625
4,540
1,684
44,591
18,525
6,777
2,567
922
577
1,791
31,159
43,421
6,513
49,934
272
1,965
1,254
12,274
4,372
20,138
34,042
5,408
39,450
Total Listed Investments by Sector
1,825,171
10
Directors’ Report
For the year ended 30 June 2012
The directors present their report together with the financial statements of the consolidated entity (“Milton”)
consisting of Milton Corporation Limited and its subsidiaries for the financial year ended 30 June 2012 and the
independent auditor’s report thereon.
Directors
The directors of Milton at any time during or since the end of the financial year are:
Robert D. Millner FAICD Independent non-executive chairman.
Director of Milton Corporation Limited since 1998 and appointed chairman in 2002.
Chairman of the Investment and Remuneration Committees. Extensive experience in the investment industry.
Other current directorships:
Director of Brickworks Limited since 1997 and appointed chairman in 1999. Director of New Hope Corporation
Limited since 1995 and appointed chairman in 1998. Director of Washington H. Soul Pattinson & Company
Limited since 1984 and appointed chairman in 1998. Chairman of BKI Investment Company Limited since 2003.
Director of Australian Pharmaceutical Industries Limited since 2000 and TPG Telecom Limited since 2000.
Former directorships in the last three years:
Choiseul Investments Limited from 1995 to 2010.
Souls Private Equity Limited from 2004 to 2012
Northern Energy Corporation Limited from February 2011 and the company was delisted in October 2011.
John F. Church FCSA, F Fin, FAICD Independent non-executive director.
Director of Milton Corporation Limited since 1986.
Member of the Investment Committee.
A Solicitor and Notary Public and over 39 years experience in the investment industry.
Graeme L. Crampton B.Ec, FCA, FAICD Independent non-executive director.
Director of Milton Corporation Limited since 2009.
Chairman of the Audit Committee and a member of the Remuneration Committee .
A Chartered Accountant and former partner of a major firm of Chartered Accountants for more than 29 years and
has extensive experience in the investment industry.
Former directorships in the last three years:
Souls Private Equity Limited from 2011 to 2012.
Kevin J. Eley CA, F Fin Independent non-executive director.
Director of Milton Corporation Limited appointed 1 December 2011.
Member of the Investment and Audit Committees.
A Chartered Accountant and has extensive experience in the investment industry.
Other current directorships:
Director of Equity Trustees Limited since 2011, Kresta Holdings Limited since 2011, HGL Limited since 1985 and
PO Valley Energy Limited since 2012.
Francis G. Gooch B.Bus, CPA Managing director.
Managing Director of Milton Corporation Limited since 2004 and chief executive since 1999.
Member of the Investment Committee.
A Certified Practising Accountant and over 27 years experience in the finance and investment industries.
Ian A. Pollard BA (Macq), MA (Oxon), D Phil (IMC), FIA, FIAA, FAICD Independent non-executive director.
Director of Milton Corporation Limited since 1998.
Member of the Audit and Remuneration Committees.
An Actuary and over 35 years of involvement in the investment industry.
Former directorships in the last three years:
Corporate Express Australia Limited from 2004 to 2010.
John N. Aitken CA, F Fin Independent non-executive director.
Director of Milton Corporation Limited since 2001.
Member of the Investment and Audit Committees.
Over 38 years experience in the investment management industry.
Retired as a director on 13 October 2011.
11
Directors’ meetings
The number of directors’ meetings (including meetings of committees of directors) and the number of meetings
attended by each of the directors of Milton during the financial year were:
Director
Directors’
Meetings
Investment
Committee
Meetings
R.D. Millner
J.F. Church
G.L. Crampton
K.J. Eley(1)
F.G. Gooch
I.A. Pollard
J.N. Aitken(2)
A
6
7
7
3
7
7
2
B
7
7
7
3
7
7
2
A
20
20
*
8
21
*
10
B
21
21
*
8
21
*
11
Audit
Committee
Meetings
B
A
Nomination
Committee
Meetings
B
A
Remuneration
Committee
Meetings
B
A
*
*
6
3
*
6
2
*
*
6
3
*
6
2
1
*
1
*
1
1
1
1
*
1
*
1
1
1
1
*
1
*
*
1
*
1
*
1
*
*
1
*
A - Number of meetings attended.
B - Number of meetings held during the time the director held office or was a member of the committee during the year.
* - Not a member of the relevant committee.
(1) Appointed 1 December 2011
(2) Retired on 13 October 2011
Principal activities
The principal activity of Milton is investment. Milton invests in companies and trusts, real property development,
fixed interest securities, and liquid assets such as cash and term deposits. There has been no significant
change in the nature of this activity during the financial year.
Operating and financial review
The consolidated profit after income tax of Milton for the year was $103.4 million (2011: $93.9 million). Milton is
in a sound financial position with net assets at 30 June 2012 of $1.9 billion (2011: $2.0 billion) and no debt.
The operating and financial reviews are contained in the Chairman’s Review on page 2.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of Milton during the past financial year other than as
disclosed in the financial statements.
Dividends
Dividends paid or declared by Milton to members since the end of the previous financial year were:
Declared and paid during the year
- Final 2011 ordinary fully franked
- Special 2011 fully franked
- Interim 2012 ordinary fully franked
Declared after end of year and not provided for
- Final 2012 ordinary fully franked
Cents
per share
Total amount
$’000
Date of payment
39
5
38
40
47,434
6,081
46,218
20 September 2011
20 September 2011
29 February 2012
48,650
4 September 2012
No LIC capital gain was included in the above dividends.
All the dividends paid by Milton since franking was introduced in 1987 have been fully franked.
Events subsequent to reporting date
Apart from the information contained in note 24 to the financial statements, no matter or circumstance has
arisen since the end of the financial year that has or may significantly affect the operations, results or state of
affairs of Milton in subsequent financial years.
12
Likely developments
Milton will continue its investment activities consistent with its objective of generating increasing revenue for
distribution to its shareholders from its diversified portfolio of assets.
The performance of Milton’s investments is subject to and influenced by many external factors and therefore it
is not appropriate to predict the future results of the investments and Milton’s performance.
The Chairman’s Review commencing on page 2 of the Annual Report contains information relating to Milton’s
past performance, operations and outlook.
Environmental regulations
There are no significant environmental regulations that apply directly to Milton.
Directors’ relevant interests
No director has or has had any interest in a contract entered into since the last Directors’ Report or any contract
or proposed contract with Milton or any subsidiary or any related entity other than as disclosed in note 22 to the
financial statements.
The relevant interest of each director in the capital of Milton at the date of this report is as follows:
Director
R.D. Millner
J.F. Church
G.L. Crampton
K.J. Eley
F.G. Gooch
I.A. Pollard
No. of Shares
2,558,105
5,726,492
27,307
5,932
130,013
14,724
Indemnification and insurance of directors, officers and auditors
Neither Milton nor any related entity has indemnified or agreed to indemnify, paid or agreed to pay any
insurance premium which would be prohibited under Section 199A or Section 199B of the Corporations Act
2001 during or since the financial year ended 30 June 2012.
The directors have not included details of the nature of the liabilities covered or the amount of the premium paid
in respect of the directors’ and officers’ liability and legal expenses insurance contracts as such disclosure is
prohibited under the terms of the contracts.
Secretary
Mr A.R. Davison, B.Bus, CA, FCSA was appointed secretary in August 1999. He previously held the role of
group financial controller and secretary with a private group of companies for five years and prior to that worked
in chartered accounting and corporate finance roles. He is a fellow of Chartered Secretaries Australia.
Non-audit services
During the year, a related practice of Moore Stephens Sydney, Milton’s auditor, has performed certain non-audit
services. Details of the amounts paid to the auditors are disclosed in note 4 to the consolidated financial
statements.
The board has considered the non-audit services provided during the year by the related practice of the auditor
and is satisfied that the provision of those non-audit services during the year by the related practice of the
auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations
Act 2001 for the following reasons:
- All non-audit services were subject to the corporate governance procedures adopted by Milton and
have been reviewed and approved by the Audit Committee to ensure they do not impact on the
integrity and objectivity of the auditor, and
- The non-audit services provided do not undermine the general principles relating to auditor
independence as set out in Professional Statement APES110 Code of Ethics for Professional
Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a
management or decision making capacity for Milton, acting as an advocate for Milton or jointly sharing
risks and rewards.
The auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 is set out
on page 18.
13
Remuneration Report
This report, which is audited, details the policy for determining the remuneration of directors and executives and
provides specific detail of their remuneration.
Remuneration of non-executive directors
Non-executive directors are paid base fees, committee fees and superannuation contributions.
Fees are not linked to Milton’s performance and no bonuses are paid or options issued.
Each year the base fees and committee fees are determined by the board of directors who take into account
the demands made on directors and the remuneration of non executive directors of comparable Australian
companies.
Base fees and committee fees (including superannuation contributions)
Chairman base fee
Director base fee
Chairman of the Audit Committee fee
Member of the Audit Committee fee
Member of the Investment Committee fee
2011
113,000
56,500
5,000
2,825
5,000
2012
118,650
59,325
5,250
2,975
5,250
The total remuneration paid to non executive directors in 2012 was $373,980 (2011: $364,650).
In October 2011 shareholders approved the fixed maximum sum of $700,000.
Non-executive directors, who were appointed before 30 June 2003, are entitled to retirement benefits in
accordance with a shareholder approved scheme. In June 2003 the board resolved to cap retirement benefits
for all directors at the amounts provided as at 30 June 2003. The total balance provided at 30 June 2012 is
$190,905 (2011: $204,405).
Remuneration of executives
Executive remuneration is a key element of Milton’s staff retention strategy which is designed to attract and
retain appropriately qualified and experienced professionals who share Milton’s goals and values and will seek
to deliver superior long term returns to Milton shareholders.
The remuneration of the managing director and senior executives is reviewed annually by the Remuneration
Committee which then makes recommendations to the board for its consideration and approval.
In formulating its recommendations the Remuneration Committee considers:
• the short term and long term performance of the Company,
• the contribution of the managing director and the senior executives to this performance,
• market trends in remuneration in terms of both quantum and structure and
• the remuneration of key management personnel of other listed investment companies with similar long
term investment philosophies and objectives.
Executive remuneration includes a component known as the Total Employment Cost Package (TECP), and it
may include a cash bonus component and an equity component.
The TECP includes cash salary, company contributions to superannuation and it may include non monetary
benefits such as the provision of a motor vehicle and car parking.
No executive is entitled to a guaranteed bonus however the board may award a cash bonus to reward an
executive’s outstanding contribution to the achievement of Milton’s objectives. The board will consider
qualitative measures such as contribution to the investment process, participation in board discussions,
timeliness and accuracy of reports and staff development when assessing executive performance.
In determining the amount of any bonus the board has regard to quantitative measures such as underlying
operating earnings per share, dividends per share and total returns relative to the market as a whole. The cash
bonus is normally less than 10% of each executive’s TECP.
The equity component of the remuneration package encourages executives to have an investment in Milton so
that their interests are aligned with the shareholders’ interests.
The equity component is delivered through participation in the Senior Staff Share Plan (“SSSP”), which was
approved by shareholders at Milton’s Annual General Meeting on 9 October 2001 (refer note 17b to the
financial statements).
In accordance with the terms of the SSSP, the directors determine the maximum number of shares for which
the executive may apply. All SSSP shares are acquired on the market and held on behalf of the executives by
the trustee of the SSSP. The price offered to the executive shall be at a discount of one cent per share to the
market value of the shares.
14
Executives are required to hold the SSSP shares for a minimum period of three years however the benefit to
the executive is increased through long term ownership as dividends are paid and the Milton share price
appreciates.
Milton provides an interest free loan to the executives to fund the acquisition of each parcel of SSSP shares.
Each loan is repaid by the application of the after tax proceeds from the dividends paid on the SSSP shares.
The opportunity cost to Milton of providing the loan is the notional interest. The Remuneration Committee
includes this cost when it reviews each executive’s TECP.
SSSP shares may not be sold, transferred, mortgaged or otherwise dealt with by the executive for a period of
three years from the date of issue or until the executive ceases employment with Milton.
If the executive’s employment ceases, the executive may within 30 days repay the loan and direct the trustee to
transfer the shares to the executive or, provided the value of the shares is greater than the loan outstanding,
direct the trustee to sell the shares, repay the loan and distribute the balance to the executive. Otherwise the
trustee will sell the shares when so directed by Milton and apply the proceeds to the repayment of the loan.
The board considers that the SSSP is appropriately designed to encourage long term ownership of shares by
executives, which then aligns their interests with that of Milton’s predominantly long term shareholder base.
Executives, other than the managing director, may participate in the Employee Share Plan (“ESP”) which
provides for a bonus of up to $1,000 to be paid in the form of Milton shares (refer note 17a to the financial
statements).
Eligible executives are provided with life, total and permanent disablement and salary continuance insurance.
The overall level of executive reward takes into account the performance of Milton over a number of years. Key
performance indicators for Milton over five years are tabled below.
Key performance indicators
Profitability
Underlying operating profit ($million)
Growth in underlying operating profit (%)
Underlying earnings per share (cents)
Growth in underlying earnings per share (%)
Dividend
Full year ordinary dividend (cents per share)
Growth in full year dividend (%)
Special dividend (cents per share)
Capital
Net asset backing per share(1) at 30 June($)
(Decline) growth in net asset backing per share (%)
Net assets(1) at 30 June ($million)
Total Return
Ten year Total Shareholder Return
Ten year Total Portfolio Return
2012
2011
2010
2009
2008
102.7
13.5
84.4
4.5
78.0
2.6
-
16.42
(5.4)
1,997
6.7
7.5
90.5
31.3
80.8
9.6
76.0
7.0
5.0
17.36
5.1
2,112
7.8
8.5
68.9
(6.4)
73.7
(13.3)
71.0
(9.0)
-
16.51
9.3
1,603
73.6
(11.1)
85.0
(13.8)
78.0
(11.4)
-
15.04
(20.6)
1,338
82.8
17.4
98.5
8.2
88.0
8.6
8.0
19.03
(18.7)
1,609
10.7
10.2
9.8
9.4
13.4
14.2
Ten year accumulation return
of the All Ordinaries Index
(1) Before provision for tax on unrealised capital gains net of tax on realised capital losses and before providing for the
7.1
7.4
7.1
7.3
11.5
ordinary final dividend.
15
Details of remuneration
Amounts of remuneration
Details of the remuneration of each non-executive director of Milton Corporation Limited, the managing director
and specified executives of Milton for the years ended 30 June 2011 and 2012 are set out in the following
tables.
Non-executive directors of Milton Corporation Limited
R.D. Millner
Chairman
J.F. Church
Director
G.L. Crampton
Director
K.J. Eley(2)
Director
I.A. Pollard
Director
J.N. Aitken(3)
Director
Total Remuneration
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
Short
Term
Benefits
Fees
$
113,670
108,257
59,243
56,422
19,575
13,500
27,574
-
57,156
54,427
12,831
44,325
290,049
276,931
Post
Employment
Superannuation
Total
paid
Retirement
Provision(1)
$
10,230
9,743
5,332
5,078
45,000
48,000
11,830
-
5,144
4,898
6,395
20,000
83,931
87,719
$
123,900
118,000
64,575
61,500
64,575
61,500
39,404
-
62,300
59,325
19,226
64,325
373,980
364,650
$
55,905
55,905
90,000
90,000
-
-
-
-
45,000
45,000
-
13,500
190,905
204,405
(1) The directors’ retirement benefits have been capped at the balance provided at 30 June 2003.
(2) Mr K. J. Eley’s appointment as a director was effective from 1 December 2011.
(3) Mr J.N. Aitken retired as a director on 13 October 2011. In addition to the directors fees paid in 2012,
he received a payment in respect of a retirement provision of $13,500 previously provided.
Managing director and executives of Milton Corporation Limited and its subsidiaries
Short Term Benefits
Salary
Cash
bonus
(1)
$
$
Non
monetary
benefits
(2)
$
Post
Employ-
ment
Super-
annuation
Other
long
term
benefits
(3)
$
$
Total
Share
based
payments
(4)
$
$
F.G. Gooch
Managing director
A.R. Davison
CFO, secretary
Total
remuneration
(1) Represents 100% of cash bonus paid or payable which vested in the year.
(2) Non monetary benefits include the provision of a motor vehicle, parking, the cost of life, total & permanent disablement
131,819
97,526
52,369
41,228
184,188
138,754
388,497
369,331
181,999
187,081
570,496
556,412
12,422
9,557
4,626
5,541
17,048
15,098
20,500
40,000
5,000
5,000
25,500
45,000
49,788
45,239
3,552
3,552
53,340
48,791
45,065
45,704
46,000
32,919
91,065
78,623
2012
2011
2012
2011
2012
2011
648,091
607,357
293,546
275,321
941,637
882,678
insurance and salary continuance insurance provided through the superannuation fund.
(3) Other long term benefits are comprised of long service leave provisions.
(4) Represents the notional value of interest on loans provided to acquire shares in Milton under the Senior Staff Share
Plan.
There are no fixed term employment contracts between Milton and its employees. Employment may be
terminated with four weeks notice by either Milton or the employee. There are no provisions for any termination
payments other than for unpaid annual and long service leave.
16
Share based compensation, Senior Staff Share Plan equity holdings and loans
The movements during the reporting period are as follows:
Executives’ shareholdings in relation to the Senior Staff Share Plan - Number of shares held
F.G. Gooch
Managing director
A.R. Davison
CFO, secretary
2012
2011
2012
2011
Opening
Balance
105,000
95,000
42,500
37,500
Received as
Remuneration
20,000
10,000
5,000
5,000
Closing
Balance
125,000
105,000
47,500
42,500
Loans in relation to the Senior Staff Share Plan
Details regarding loans outstanding at the reporting date to specified directors and specified executives, where
the individual’s aggregate loan balance exceeded $100,000 at any time in the reporting period, are as follows:
F.G. Gooch
Managing director
A.R. Davison
CFO, secretary
2012
2011
2012
2011
Opening
Balance
Net
change
$
1,460,406
1,360,242
620,126
564,465
$
223,526
100,164
45,698
55,661
Closing
Balance
$
1,683,932
1,460,406
665,824
620,126
Highest
balance in
the period
$
1,762,271
1,516,238
695,593
642,463
Notional
Interest
(1)
$
131,819
97,526
52,369
41,228
(1) The notional interest has been included under “Share Based Payment” in the remuneration of the
managing director and the executive disclosed on page 16.
Terms and conditions of the loans are referred to in note 17b to the financial statements.
Rounding off
The company is of a kind referred to in Class Order 98/100 issued by the Australian Securities & Investments
Commission and in accordance with that Class Order, amounts in the Directors’ Report and financial report
have been rounded off to the nearest thousand dollars, unless otherwise stated.
Signed in accordance with a resolution of the directors.
R. D. MILLNER
Chairman
Sydney, 9 August 2012
17
Level 7, 20 Hunter Street
Sydney NSW 2000
T +61 (0)2 8236 7700
F +61 (0)2 9233 4636
www.moorestephens.com.au
Auditor’s Independence Declaration
to the Directors of Milton Corporation Limited
In accordance with the requirements of section 307C of the Corporations Act 2001 , as lead auditor for
the audit of Milton Corporation Limited for the year ended 30 June 2012, I declare that, to the best of
my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the
Corporations Act 2001 in
relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
Moore Stephens Sydney
Chartered Accountants
Martin J. (Joe) Shannon
Partner
Dated in Sydney this 9th day of August 2012.
Liability limited by a scheme approved under Professional Standards Legislation*
Moore Stephens Sydney ABN 90 773 984 843.
*Other than for the acts or omissions of financial services licensees. An independent member of Moore Stephens International Limited -
members in principal cities throughout the world The Sydney Moore Stephens firm is not a partner or agent of any other Moore Stephens firm.
18
Corporate Governance Statement
This statement outlines Milton’s main corporate governance practices which have been in place
throughout the financial year.
The board considers it essential that directors and staff of Milton employ sound corporate governance
practices in carrying out their duties and responsibilities. Accordingly a code of conduct has been
issued to detail the expected behaviour required to ensure Milton acts with integrity and objectivity.
A number of committees, which operate in accordance with their respective charters, have been
established to assist the board in carrying out its responsibilities.
Milton has placed its corporate governance statement on its website: www.milton.com.au. The board
charter, code of conduct, audit, nomination and remuneration committee charters and share trading,
communication, disclosure, performance evaluation and risk management policies are available on this
website.
The ASX Corporate Governance Council released its “Principles of Good Corporate Governance and
Best Practice Recommendations” (“Recommendations”) in March 2003 and these were revised in
August 2007 and in June 2010. The directors of Milton support the thrust of the Recommendations and,
whilst the Recommendations are not prescriptive, the ASX Listing Rules require listed companies to
identify those Recommendations that have not been followed and the reasons for not following them.
The directors consider that Milton’s corporate governance practices do comply with the
Recommendations.
Board of directors
The board charter details the composition and the role and responsibilities of the board and their
relationship with management to accomplish the board's primary role of promoting the long-term
success of Milton.
The board is accountable to shareholders for the performance of Milton. It oversees the activities and
performance of management and provides an independent and objective view of Milton’s performance.
The board is comprised of a majority of independent non-executive directors and one executive director
with a mix of skills and considerable experience in the investment industry.
The details of the directors, their experience, qualifications, term of office and independent status are
set out in the Directors’ Report.
The Recommendations state that to be considered independent, director must be “a non-executive
director who is not a member of management and who is free of any business or other relationship that
could materially interfere with (or could reasonably be perceived to materially interfere with) the
independent exercise of their judgement.”
All directors except Mr R. D. Millner would satisfy all the tests of the Recommendations and are
considered as being independent.
The Recommendations state that the determination of the independence of a director is to be dealt with
by the board of directors who are to consider all relevant facts and circumstances on a case by case
basis.
Milton’s chairman, Mr R. D. Millner, is also chairman of Washington H Soul Pattinson & Co Limited, a
substantial shareholder of Milton. The Washington H Soul Pattinson holding of less than 6% of Milton’s
issued capital represents less than 5% of Washington H Soul Pattinson’s assets and therefore the
board considers it is unlikely to impact the chairman’s independence.
The board is strongly of the opinion that the thinking and actions of Mr R. D. Millner and his
commitment to represent the interests of all shareholders is not impaired, and he is considered by the
board as a whole to be independent.
In accordance with the Corporations Act 2001, any director who has an interest of any kind in relation to
any matter dealt with at a board or committee meeting is required to advise the meeting and abstain
from participation in the decision process.
All non-executive directors are subject to re-election at least every three years.
Independent professional advice may be sought by a director at Milton’s expense with the prior
approval of the chairman. A copy of advice received by the director is made available to the chairman
to be dealt with at his discretion.
The board meets regularly to review management reports on the investment portfolio and on the
operational and financial performance of Milton.
19
The directors agreed in 2003 to phase out retirement benefits, with the amount to be paid to each
director upon retirement limited to the provision in the financial statements as at 30 June 2003, details
of which are disclosed on page 16.
Board committees
The board has established committees to assist it in carrying out its responsibilities. The charters that
identify the roles and responsibilities of the following committees have been approved by the board and
are available on Milton’s web site.
The Audit Committee, consisting of at least three independent non-executive directors, reviews the
effectiveness of the risk management and internal controls, the reliability of financial information and the
appointment and effectiveness of the external auditor. To assist in this function the committee may
invite the external auditor and senior executives to report to meetings. Any significant non-audit
services to be provided by the external auditors must be approved in advance by the Audit Committee.
The Audit Committee considers that the provision of those non-audit services provided to date by the
external auditor would not affect the auditor’s independence.
The Investment Committee, consisting of three independent non-executive directors and the managing
director, meets regularly to review the investment portfolio and to make investment decisions within
defined limits. All directors may attend the Investment Committee meetings. The defined limits are
reviewed by the board from time to time.
The Nomination Committee consists of those directors who are not seeking re-election. This committee
reviews the composition of the board annually and makes recommendations on the appropriate skill
mix, personal qualities, expertise and diversity. The committee having reviewed the performance of the
directors recommended Messrs R.D. Millner, G.L. Crampton and K.J. Eley for election at the 2012
annual general meeting.
The Remuneration Committee, consisting of three independent non-executive directors, advises the
board on remuneration policies and practices generally, and makes specific recommendations to the
board annually on remuneration packages and other terms of employment for senior executives and
directors.
Trading policy in relation to listed securities
This trading policy is provided to all directors and employees so that they are aware of the restrictions
that apply to them in relation to their dealing in securities.
The policy has been developed to ensure that directors and employees comply with insider trading
provisions of the Corporations Act and to avoid the risk that they are perceived to have traded while in
the possession of insider information.
Milton encourages directors and employees to have a personal financial interest in Milton by acquiring
and holding shares on a long term basis.
Short term dealing in and short selling of Milton securities by its directors and employees is not
permitted.
The buying or selling of shares is not permitted by any director or employee of Milton or their immediate
family when that person is in possession of price sensitive information in relation to those shares that is
not available to the market.
This trading restriction is a requirement of the Corporations Act and it applies to dealing in Milton
securities and other listed securities.
Price sensitive information must be treated as confidential and must not be communicated to third
parties who may use the information inappropriately.
The following trading restrictions apply regardless of whether the director or employee or their
immediate family is in possession of price sensitive information.
Directors and employees of Milton or their immediate family may not purchase or sell Milton shares in
the following blackout periods:-
i) from the end of the month until the day after the announcement of the monthly net tangible
asset backing per share (NTA) for that month and
ii) from the end of the half year or full year until the day after the results for the half year or full
year are announced to the market.
It is the responsibility of directors and employees to advise the secretary of any intention to deal in
Milton’s securities and the secretary must be advised when the dealing occurs.
20
Directors or employees or their immediate family who intend to deal in Milton shares during the closed
periods must receive prior approval from the Chairman. Such requests, which must be made in writing,
will only be approved in exceptional circumstances, which include severe financial hardship.
The restrictions on buying or selling Milton shares by directors or employees or their immediate family
in the blackout periods do not apply in the following situations of passive trading in Milton shares:
a. the transfer of securities already held by directors or employees or their immediate family into a
superannuation fund or similar scheme where the above are a beneficiary;
b. the acceptance of a takeover offer;
c. trading under an offer or invitation made to all or most of the company’s security holders, such
as a rights issue, a security purchase plan, a dividend or distribution reinvestment plan and an
equal access buy-back, where the plan that determines the timing and structure of the offer has
been approved by the board. This includes decisions relating to whether or not to take up the
entitlements and the sale of entitlements required to provide for the take up of the balance of
entitlements under a renounceable pro rata issue;
d. accepting an offer to participate in an employee securities plan; and
e. any such similar transaction determined by the directors to be a passive dealing.
Continuous disclosure and shareholder communication
The secretary has been nominated as the person responsible for communications with the ASX. This
role includes responsibility for ensuring compliance with the continuous disclosure requirements in the
ASX listing rules.
The board reviews and approves all announcements to the ASX, except for the monthly net asset
backing announcements which are reviewed by the chief financial officer and the managing director.
Milton has established a website to enhance communication with its shareholders and potential
investors. The website contains historical information, copies of all information disclosed to the ASX
and a corporate governance section that includes details of the various committee charters and
policies. Shareholders, who have advised Milton of their email addresses, are notified by email of all
announcements to the ASX. The Milton communications policy is available on Milton’s website.
Risk management
The managing director and chief financial officer report annually to the Audit Committee on Milton’s risk
management system and provide written confirmation to the board that the integrity of the financial
statements are founded on a sound system of risk management and internal control which is operating
effectively in all material respects in relation to financial reporting.
The board considers an internal audit function is not necessary due to the nature and size of Milton’s
operations. The external auditors report to the Audit Committee on risk management issues identified
during the course of the audit. The risk management policy is available on Milton’s website.
Diversity
The board has established a diversity policy which is available on Milton’s website.
The key element of the diversity policy in that Milton will seek the best person available for the position
which will not be influenced by gender, age, ethnicity or cultural background.
In relation to the appointment of a new director, the board will seek male and female candidates with
the appropriate skills and investment experience to complement the current directors.
At 30 June 2012 the proportion of women employed by Milton was: total Milton employees, 50%; board
of directors, 0%; and senior positions, 12.5%.
21
Milton Corporation Limited
Consolidated income statement
for the year ended 30 June 2012
Ordinary dividends and distributions
2a
100,907
Note
2012
$'000
Interest
Net gains on trading portfolio
Other revenue
Operating Revenue
2011
$'000
88,789
6,782
362
239
7,179
258
257
108,601
96,172
Share of net profits of joint ventures – equity accounted
Special dividends and distributions
Income from operating activities
19b
2b
3,696
772
2,164
3,628
113,069
101,964
Administration expenses
Acquisition related costs of subsidiaries
Profit before income tax expense
3,241
-
109,828
3,211
284
98,469
Income tax expense thereon
3
(6,411)
(4,585)
Profit attributable to shareholders of Milton
103,417
93,884
Basic and diluted earnings per share
7
85.0
83.9
Cents
Cents
The consolidated income statement is to be read in conjunction with the notes to the consolidated
financial statements.
22
Milton Corporation Limited
Consolidated statement of comprehensive income
for the year ended 30 June 2012
2012
$’000
2011
$'000
Profit
103,417
93,884
Other comprehensive income
(Devaluation) revaluation of investments
(117,649)
62,258
Provision for tax benefit (expense) on (devaluation)
revaluation of investments
Reduction of deferred tax on Choiseul consolidation
34,818
(18,478)
-
10,323
Other comprehensive income
(82,831)
54,103
Total comprehensive income attributable to
shareholders of Milton
20,586
147,987
The consolidated statement of comprehensive income is to be read in conjunction with the notes to the
consolidated financial statements.
23
Milton Corporation Limited
Consolidated statement of financial position
as at 30 June 2012
Current assets
Cash
Receivables
Other financial assets
Total current assets
Non-current assets
Receivables
Investments
Joint ventures – equity accounted
Plant and equipment
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Payables
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Issued capital
Capital profits reserve
Asset revaluation reserve
Retained profits
Note
2012
$’000
2011
$'000
8
9a
10
9b
11
19c
12
13
14
117,618
22,237
14,951
154,806
3,433
1,825,344
18,341
66
786
1,847,970
127,479
19,188
15,889
162,556
2,947
1,928,404
18,277
113
1,067
1,950,808
2,002,776
2,113,364
2,938
1,767
163
4,868
116,901
334
117,235
122,103
188
1,075
89
1,352
151,792
400
152,192
153,544
1,880,673
1,959,820
1,373,857
98,411
259,373
149,032
1,373,857
99,084
341,531
145,348
Total equity attributable to shareholders of Milton
1,880,673
1,959,820
The consolidated statement of financial position is to be read in conjunction with the notes to the
consolidated financial statements.
24
Milton Corporation Limited
Consolidated statement of changes in equity
for the year ended 30 June 2012
Issued
capital
$’000
Capital
profits
reserve
$’000
Asset
revaluation
reserve
$’000
Retained
profits
$’000
Total
shareholders
equity
$’000
Balance at 1 July 2011
1,373,857
99,084
341,531
145,348
1,959,820
-
103,417
103,417
-
-
-
(82,831)
(82,831)
-
103,417
(82,831)
20,586
-
(673)
673
-
1,373,857
-
98,411
-
259,373
(99,733)
149,032
(99,733)
1,880,673
Balance at 1 July 2010
963,192
70,080
318,373
120,663
1,472,308
-
-
-
-
-
-
-
-
-
-
Profit
Other Comprehensive Income:
Net revaluation of investments
Total comprehensive income
Net realised losses
Transactions with
shareholders:
Dividends paid
Balance at 30 June 2012
Profit
Other Comprehensive Income:
Net revaluation of investments
Reduction of deferred tax on
Choiseul consolidation
Total comprehensive income
Net realised losses
Gains on initial investment on
Choiseul consolidation
Transactions with
shareholders:
Share issues
LIC dividends paid
Dividends paid
Balance at 30 June 2011
-
93,884
93,884
-
-
10,323
10,323
43,780
-
43,780
-
-
93,884
(8,058)
8,058
28,680
(28,680)
-
43,780
10,323
147,987
-
-
410,665
-
-
1,373,857
-
(1,941)
-
99,084
-
-
-
341,531
-
-
(69,199)
145,348
410,665
(1,941)
(69,199)
1,959,820
The consolidated statement of changes in equity is to be read in conjunction with the notes to the consolidated
financial statements.
25
Milton Corporation Limited
Consolidated statement of cash flows
for the year ended 30 June 2012
Cash flows from operating activities
Dividends and distributions received
Interest received
Distributions received from joint venture entities
Other receipts in the course of operations
Proceeds from sales of trading securities
Payments for trading securities
Other payments in the course of operations
Income taxes paid
Note
2012
$’000
99,833
7,695
4,237
257
4,540
(4,077)
(2,527)
(5,480)
Net cash provided by operating activities
18a
104,478
Cash flows from investing activities
Proceeds from disposal of investments
Payments for investments
Cash on acquisition of subsidiaries
Payments for acquisition of subsidiaries
Payments for pre acquisition liabilities of subsidiary
Proceeds from sales of plant and equipment
Payments for plant and equipment
Loans (advanced) repaid by other entities
Net cash provided by (used in) investing activities
Cash flows from financing activities
Payments for issue of shares
Ordinary dividends paid
Special dividends paid
Net cash used in financing activities
Net (decrease) increase in cash assets held
Cash assets at the beginning of the year
Cash assets at the end of the year
8
34,777
(48,910)
-
-
-
25
(12)
(486)
(14,606)
-
(93,652)
(6,081)
(99,733)
2011
$’000
90,450
6,840
2,350
587
1,146
(500)
(3,354)
(4,582)
92,937
21,537
(37,333)
47,078
(284)
(26,522)
-
(20)
753
5,209
(164)
(71,140)
-
(71,304)
(9,861)
26,842
127,479
117,618
100,637
127,479
The consolidated statement of cash flows is to be read in conjunction with the notes to the consolidated
financial statements.
26
Milton Corporation Limited
Notes to the consolidated financial statements for the year ended
30 June 2012
1.
Summary of significant accounting policies
The principal accounting policies adopted in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise
stated. The financial statements include the consolidated entity (“Milton”) consisting of Milton
Corporation Limited and its subsidiaries.
a. Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian
Accounting Standards, Australian accounting interpretations, other authoritative pronouncements of
the Australian Accounting Standards Board and the Corporations Act 2001.
These financial statements have been prepared on an accruals basis and are based on the historical
cost basis except as modified by the revaluation of certain financial assets and liabilities measured at
fair value.
The financial statements are presented in Australian dollars and all values are rounded to the nearest
thousand dollars ($'000) unless otherwise stated under the option available in ASIC Class Order
98/100.
b. Basis of consolidation
The consolidated financial statements include the financial statements of Milton, being the parent
entity and its subsidiaries. The balances and effects of transactions between subsidiaries included in
the consolidated financial statements have been eliminated in full.
The financial statements of subsidiaries are prepared for the same reporting period as the parent
entity, using consistent accounting policies.
Where entities have come under the control of the parent entity during the year, their operating
results have been included in the group from the date control was obtained. Entities cease to be
consolidated from the date on which control is transferred out of the group and the consolidated
financial statements include the result for the part of the reporting period during which the parent
entity had control.
c. Income tax
The income tax expense is the tax payable on the current year’s taxable income based on the current
income tax rate applicable for the year 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 is recognised using the balance sheet method.
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 subsidiaries 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.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current
tax assets and liabilities.
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.
27
1.
Summary of significant accounting policies (continued)
c. Income tax (continued)
Deferred tax balances attributable to revaluation amounts are recognised directly in equity through
the asset revaluation reserve.
Milton Corporation Limited (the parent entity) and its wholly-owned subsidiaries have formed an
income tax consolidated group. Each entity in the group recognises its own current and deferred tax,
except for any deferred tax assets arising from unused tax losses from subsidiaries, which are
immediately assumed by the parent entity. The current tax liability of each group entity is
subsequently assumed by the parent entity. There is no tax funding agreement between Milton
Corporation Limited and its subsidiaries.
d. Cash
Cash includes cash at bank, deposits at call and term deposits, and is recognised at fair value.
Interest from deposits and bank accounts is brought to account on an accruals basis as it is earned.
e. Trading securities
Trading securities are recognised initially at cost and subsequently measured at fair value.
Changes in fair value are taken directly through the income statement.
Dividends are brought to account on the date that the shares are traded "ex-dividend".
f. Other liquid securities
Other liquid securities include listed securities such as reset preference shares which are classified
as equity instruments and may be realised within 12 months.
Other liquid securities are recognised initially at cost and Milton has elected to present subsequent
changes in fair value in other comprehensive income through the asset revaluation reserve after
deducting a provision for the potential deferred capital gains tax liability.
On disposal, the cumulative gain or loss net of tax thereon, is transferred from the asset revaluation
reserve to the capital profits reserve.
Distribution income from these securities is brought to account on the day that these securities trade
“ex-dividend”.
g. Investments
Subsidiaries
Investments in subsidiaries are carried at net asset value which approximates fair value of the
controlled entities.
Income from dividends is brought to account when they are declared.
Other companies
Investments are recognised initially at cost and Milton has elected to present subsequent changes in
fair value of equity instruments in other comprehensive income through the asset revaluation reserve
after deducting a provision for the potential deferred capital gains tax liability as these investments
are long term holdings of equity instruments.
Quoted investments are valued continuously at fair value, which is the price quoted on the Australian
Securities Exchange.
When an investment is disposed, the cumulative gain or loss, net of tax thereon, is transferred from
the asset revaluation reserve to the capital profits reserve.
Dividends and distributions are brought to account on the date that the investment trades "ex-
dividend".
De-merger dividends arising from company de-consolidations are treated as a return of capital and
not as a dividend.
28
1. Summary of significant accounting policies (continued)
h. Employee benefits
The provision for employee entitlements relates to amounts expected to be paid to employees for
long service leave and annual leave (including on-costs) and is based on legal and contractual
entitlements and assessments having regard to experience in relation to staff departures and leave
utilisation. Employees are not paid on termination for untaken personal/carer’s leave.
Under the Employee Share Plan, shares are acquired for employees as part of their remuneration
and the cost of the shares is recorded in employee benefit expenses (refer note 17a).
Under the Senior Staff Share Plan, shares are acquired for eligible employees as part of their
remuneration and held on their behalf by the trustee of the Plan. The purchase of the Plan Shares is
financed by a loan from Milton (refer note 17b).
i. Operating segments
The consolidated entity operates in Australia only and the principal activity is investment.
j. Business Combinations
The acquisition method of accounting has been used to account for all business combinations,
regardless of equity instruments or other assets acquired. The business combinations have been
accounted from the date Milton attained control of the subsidiaries. The considerations transferred for
the acquisitions comprise of the fair values of the identifiable assets transferred and the liabilities
assumed.
Costs related to the acquisitions, other than those associated with the issue of equity securities, are
expensed to the consolidated income statement as incurred.
k. Critical accounting estimates and judgments
Judgements, estimates and assumptions are required to prepare financial statements.
Deferred tax liabilities have been recognised for capital gains tax on the unrealised gain in the
investment portfolio at current tax rates.
As Milton does not intend to dispose of the investment portfolio this tax may not be payable at the
amount disclosed in note 13. Any tax liability that may arise on disposal of investments is subject to
tax legislation relating to the treatment of capital gains and the applicable tax rate at the time of
disposal.
Deferred tax assets have been recognised relating to carried forward capital losses, based on current
tax rates. Utilisation of the tax losses requires the realisation of capital gains in subsequent years and
the ability to satisfy certain tests at the time the losses are recouped. The deferred tax assets related
to carried forward capital losses have been offset against the related deferred tax liabilities as
disclosed in note 13.
Apart from this, there are no key assumptions or sources of estimation uncertainty that have a risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year.
l. New standards and interpretations not yet adopted
No new accounting standards and interpretations, that are available for early adoption at
30 June 2012, but not yet adopted, will result in any material change in relation to the financial
statements.
29
2. Revenue
a. Ordinary dividends and distributions
Investments held in portfolio at 30 June
Investments sold during the year
b. Special dividends and distributions
Investments held in portfolio at 30 June
Investments sold during the year
3.
Income tax expense
Prima facie income tax expense calculated at 30% on the profit
before income tax expense
Increase (decrease) in income tax expense due to:
Tax offset for franked dividends
Non taxable distributions
Under (over) provision in prior year
Other differences
Income tax expense on profit
4. Auditor’s remuneration
Auditors of the company
Audit and review services
Liquidation of non-operating subsidiaries
Due diligence for acquisition of subsidiaries
Related practice of the auditor
Liquidation of non-operating subsidiary
5. Ordinary and special fully franked dividends
a. Recognised in the current year
A final dividend in respect of the 2011 year of 39 cents per share
paid on 20 September 2011 (2011: a final dividend in respect of
the 2010 year of 36 cents per share paid on 1 September 2010)
A special dividend of 5 cents per share paid on 20 September
2011 (2011: nil)
An interim dividend of 38 cents per share paid on 29 February
2012 (2011: 37 cents per share paid on 5 January 2011)
b.
Not recognised in the current year
Since the end of the financial year, the directors declared a fully
franked ordinary final dividend in respect of the 2012 year of
40 cents per share payable on 4 September 2012. (2011: final
ordinary of 39 cents per share and a special dividend of 5 cents
per share paid on 20 September 2011).
30
2012
$’000
2011
$’000
99,227
1,680
100,907
326
446
772
87,995
794
88,789
2,899
729
3,628
32,948
29,540
(26,502)
(24,260)
(360)
320
5
6,411
111
-
-
111
7
118
(502)
(199)
6
4,585
115
18
28
161
-
161
47,434
34,946
6,081
46,218
99,733
-
36,194
71,140
48,650
53,515
5. Ordinary and special fully franked dividends (continued)
c. Dividend franking account
The amount of franking credits available to shareholders for the
subsequent financial year, adjusted for franking credits that will
arise from the payment of the current tax liability
Subsequent to year end, the franking account will be reduced by
the proposed final ordinary dividend to be paid on 4 September
2012 (2011: final ordinary and special dividends)
2012
$’000
2011
$’000
105,182
103,859
(20,850)
84,332
(22,935)
80,924
The franking account balance would allow Milton to frank additional dividend payments up to an
amount of $196,773,586 (2011:$188,823,534) which represents 162 cents per share (2011: 155 cents
per share).
6.
Listed Investment Company capital gain account
Balance of the Listed Investment Company (LIC) capital gain
account available to shareholders for the subsequent financial
year
1,179
1,156
Distributed LIC capital gains may entitle certain shareholders to a special deduction in their income
tax return. LIC capital gains available for distribution are dependent upon the disposal of investment
portfolio holdings which qualify for LIC capital gains and the receipt of LIC capital gain distributions.
7.
Earnings per share
Basic earnings per share
Profit attributable to shareholders of the parent entity
Weighted average number of ordinary shares used in the
calculation of basic earnings per share
Diluted earnings per share figures are the same because there
are no dilutive potential ordinary shares.
8. Cash
Cash at bank
Deposits at call
Term deposits
cents
cents
85.0
83.9
$’000
103,417
$’000
93,884
No.
No.
121,625,655
111,964,506
$’000
$’000
1,510
10,511
105,597
117,618
1,607
16,266
109,606
127,479
The weighted average interest rate for cash and deposits at call as at 30 June 2012 is 3.4% p.a.
(2011: 5.7% p.a.). Term deposits have an average maturity date of August 2012 (2011: September
2011) and an average interest rate of 5.4% (2011: 5.9% pa).
31
9.
a.
Receivables
Receivables – current
Income receivable
Sundry debtors
b.
Receivables – non-current
2012
$’000
20,481
1,756
22,237
2011
$’000
19,183
5
19,188
Senior staff share plan loans (refer note 17b)
3,433
2,947
c.
Terms and conditions
Sundry debtors are due within 30 days and no interest is charged.
10. Other financial assets
Other liquid securities - at fair value
Trading securities - at fair value
Prepaid expenses
11.
Investments – non-current
Quoted investments - at fair value
Unquoted investments - at fair value
a.
Included in quoted investments are:
Shares in other corporations
Stapled securities in other corporations
Units in trusts
b.
Included in unquoted investments are:
Securities in other corporations
Units in trusts
d.
Investments disposed of during the year
Fair value at disposal date
Equity investments
Loss on disposal after tax
Equity investments
14,535
184
232
14,951
15,247
389
253
15,889
1,825,171
1,928,224
173
180
1,825,344
1,928,404
1,764,871
1,867,718
36,317
23,983
36,178
24,328
1,825,171
1,928,224
6
167
173
6
174
180
36,181
33,785
(4,960)
(7,129)
The disposals occurred in the normal course of Milton’s operations as a listed investment company or
as a result of takeovers or mergers.
32
12.
Deferred tax assets
The balance comprises temporary differences attributable to :
Revenue tax losses carried forward
Provisions
Retirement benefit obligations
Share issue expenses
Other
Total deferred tax assets
Movements:
Balance at 1 July
(charged) credited to the income statement
(charged) to equity
Balance at 30 June
To be recovered within 12 months
To be recovered after more than 12 months
13.
Deferred tax liabilities
The balance comprises temporary differences attributable to:
Amounts recognised directly in equity:
Revaluation of investments
Realised capital losses
Amounts recognised in profit:
Realised capital gains
Income receivable which is not assessable for tax until
receipt
Movements:
Balance at 1 July
Charged (credited) to income statement
Charged (credited) to other comprehensive income
Charged (credited) to equity
Balance at 30 June
To be settled within 12 months
To be settled beyond 12 months
2012
$’000
22
255
57
140
312
786
1,067
(281)
-
786
265
521
786
2011
$’000
38
248
61
281
439
1,067
908
208
(49)
1,067
86
981
1,067
115,316
(15,510)
147,365
(12,860)
832
832
16,263
116,901
151,792
49
(34,818)
(122)
116,901
-
16,455
151,792
130,757
30
18,478
2,527
151,792
-
116,901
151,792
33
14.
Issued capital
a. Movement in share capital
Balance at 1 July 2011: 121,625,655 shares
(1 July 2010: 97,075,280 shares)
(2011: 26,250,375 shares issued as consideration for
acquisitions)
(2011: Elimination of 1,700,000 shares in Milton held by
Choiseul (1))
Share issue costs net of tax
Balance at 30 June 2012: 121,625,655 shares
(30 June 2011: 121,625,655 shares)
2012
$’000
2011
$’000
1,373,857
963,192
-
-
-
439,341
(28,560)
(116)
1,373,857
1,373,857
(1) 1,700,000 shares held by Choiseul Investments Limited (Choiseul) in Milton were cancelled
through a selective capital reduction approved at Milton’s annual general meeting held on 13
October 2011.
b.
Ordinary shares
All capital consists of fully paid ordinary shares which are listed on the ASX and carry one vote per
share and the right to receive dividends.
15.
Nature and purpose of reserves
Changes in fair value of investments are presented in other comprehensive income through the asset
revaluation reserve as referred to in note 1g.
Upon disposal of investments, the net gain or loss is transferred from the asset revaluation reserve
to the capital profits reserve as referred to in note 1g.
16.
Management of financial risk
The risks associated with the financial instruments, such as investments and cash include market
risk, credit risk and liquidity risk.
The Audit Committee has approved policies and procedures established to manage these risks.
The effectiveness of these policies and procedures is continually reviewed by management and
annually by the Audit Committee.
a.
Financial instruments’ terms, conditions and accounting policies
Milton’s significant accounting policies are included in note 1, while the terms and conditions of each
class of financial asset, financial liability and equity instrument, both recognised and unrecognised at
the reporting date, are included under the appropriate note for that instrument.
b.
Net fair values
The carrying amounts of financial instruments in the consolidated statement of financial position
approximate their net fair value.
34
16.
c.
Management of financial risk (continued)
Credit risk exposures
Milton’s principal credit risk exposures arise from the investment in liquid assets, such as cash, bank
term deposits and income receivable.
The risk that a financial loss will occur because a counterparty to a financial instrument fails to
discharge an obligation is known as credit risk. The credit risk on Milton’s financial assets, excluding
investments, is the carrying amount of those assets.
Individual bank limits have been approved by the board for the investment of cash.
Income receivable is comprised of accrued interest and dividends and distributions which were
brought to account on the date the shares or units traded ex-dividend.
There are no financial instruments overdue.
All financial assets and their recoverability are continuously monitored by management and
reviewed by the board on a quarterly basis.
d. Market risk
Market risk is the risk that changes in market prices will affect the fair value of the financial
instrument.
Milton is exposed to market risk through the movement of the security prices of the companies and
trusts in which it is invested.
The market value of individual companies fluctuates every day and the fair value of the portfolio
changes continuously, with this change in the fair value recognised through the asset revaluation
reserve.
Investments represent 91% (2011: 91%) of total assets. A 5% fall in movement in the market value
of investments in each of the companies and trusts within the portfolio would result in a 4.6%
(2011: 4.6%) movement in the net assets before provision for tax on unrealised capital gains at
30 June 2012 (2011: 30 June 2011). The net asset backing before provision for tax on unrealised
capital gains would move by 75 cents per share at 30 June 2012 (2011: 79 cents at 30 June 2011).
Milton’s management regularly monitor the performance of the companies within its portfolio and
make portfolio recommendations which are considered by the Investment Committee. The Milton
board reviews the portfolio on a quarterly basis.
Milton is not exposed to foreign currency risk as all its investments are quoted in Australian dollars.
The fair value of Milton’s other financial instruments is unlikely to be materially affected by a
movement in interest rates as they generally have short dated maturities and variable interest rates.
e.
Liquidity risk
Liquidity risk is the risk that Milton is unable to meet its financial obligations as they fall due.
Milton manages liquidity risk by monitoring forecast and actual cashflows.
f.
Capital risk management
The parent entity invests its equity in a diversified portfolio of assets that generates a growing
income stream for distribution to shareholders in the form of fully franked dividends.
The capital base is managed to ensure there are funds available for investment as opportunities
arise. Capital may be increased through the issue of shares under the Share Purchase Plan. Other
means of increasing capital could include rights issues and acquisitions of unlisted investment
companies.
g.
Fair value measurement
Financial instruments carried at fair value are comprised of investments and other financial assets.
The fair value of these financial instruments is the quoted prices (unadjusted) in active markets for
identical assets. The Australian Securities Exchange is the active market for all financial
instruments.
35
17.
a.
Employee entitlements
Employee Share Plan
The Employee Share Plan ("ESP") is available to all eligible employees to acquire ordinary shares in
Milton in lieu of a cash bonus of up to $1,000 per year as part of the employee’s remuneration. The
transaction and administration costs of acquiring the shares and administering the plan are paid by
Milton.
During the year, 260 shares (2011: nil shares) were acquired by Milton on behalf of eligible
employees under the ESP at a cost of $3,955 with a total market value at 30 June 2012 of $3,955.
Any shares acquired cannot be disposed of or transferred until the earlier of 3 years from the date of
issue or acquisition or on the date that the employee's employment ceases with Milton.
b.
Senior Staff Share Plan
The Senior Staff Share Plan ("SSSP") was approved by shareholders at Milton's Annual General
Meeting on 9 October 2001. Eligible employees are given the opportunity to apply for Plan Shares in
Milton which are subscribed for or acquired and held on their behalf by the trustee of the plan. The
purchase of these Plan Shares is financed by an interest-free limited recourse loan from Milton with
recourse only to Plan Shares. The loan will be repaid partially from any dividends received. Milton
administers the SSSP and meets the transactional and administration costs.
During the year, 42,500 shares (2011: 21,000 shares) were acquired by the trustee of the plan on
behalf of eligible employees under the SSSP at a cost of $641,464 (2011: $327,590). The loans to
eligible employees are as disclosed in note 10b. The shares acquired by the trustee during the year
had a market value of $646,425 at $15.21 per share as at 30 June 2012.
Any shares acquired are held in the name of the trustee and classified as Restricted Shares which
cannot become Unrestricted Shares until the earlier of 3 years from the date of issue to the trustee or
acquisition by the trustee or on the date that the employee’s employment ceases with Milton. The
trustee may transfer Unrestricted Shares to the participant provided that any outstanding loan has
been repaid in full.
18.
Note to the cash flow statements
a.
Reconciliation of net profit to net cash provided by
operating activities
Profit
Share of net profits of joint ventures – equity accounted
Distributions received from joint venture entities
Depreciation of non-current assets
Increase in receivables
Decrease (increase) in payables and provisions
Increase in income taxes payable
Net cash provided by operating activities
b.
Non-cash financing and investing activities
2012
$’000
2011
$’000
103,417
(3,696)
4,237
35
(1,126)
679
932
104,478
93,884
(2,164)
2,350
32
(1,108)
(59)
2
92,937
During the year ended 30 June 2012 there were no non-cash financing and investing activities.
(2011: As described in note 21b, Milton acquired an unlisted investment company through the issue
of 2,446,521 new Milton shares with a fair value of $41,413,000 and acquired 88.1% of Choiseul
through the issue of 23,803,854 new Milton shares with a fair value of $397,928,000).
36
19.
a.
Investment in joint venture entities
Details of joint venture entities
Companies in the consolidated entity have entered into joint ventures to develop real property.
These joint ventures which are held by subsidiaries have been accounted for using the equity
accounting principles.
b.
Contribution from joint venture entities
Milton has interests in the following joint venture entities:
33.33% interest in the Ellenbrook Syndicate Joint Venture
contribution to operating profit before tax
23.33% interest in the Mews Joint Venture
contribution to operating profit before tax
50% interest in the LWP Huntlee Syndicate No 2 Joint
Venture
Share of net profits of joint ventures
c.
Consolidated interest in the assets and liabilities of the
joint ventures
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Provision for diminution in value
Net assets
2012
$’000
3,451
245
-
3,696
16,790
13,538
(1,741)
(9,703)
18,884
(543)
18,341
2011
$’000
2,001
163
-
2,164
17,413
9,315
(1,233)
(6,675)
18,820
(543)
18,277
d.
Contingent liabilities and commitments
Each venturer is liable for its share of the debts of the joint ventures. The finance facilities have
recourse only to the assets of the joint ventures. The LWP Huntlee Syndicate No 2 Joint Venture
was formed in June 2010 and Milton is committed to providing further capital of $1.009 million over
the next year (2011: $1.484 million). Apart from this commitment there are no further financial
commitments.
20.
Parent entity disclosures
In accordance with the Corporations Amendment (Corporate Reporting Reform) Act 2010 and the
Corporations Act 2001 the following summarised parent entity information is set out below.
As at, and throughout, the financial year ended 30 June 2012 the parent entity is Milton Corporation
Limited.
Profit of the parent entity
Profit for the year
Total comprehensive income for the year
100,822
17,991
90,505
138,296
37
20.
Parent entity disclosures (continued)
Financial position (Balance Sheet) of the parent entity
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Total equity of the parent entity comprising of
Issued capital
Capital profits reserves
Asset revaluation reserve
Retained profits
2012
$’000
2011
$’000
154,732
2,075,651
75,778
194,978
1,880,673
162,234
2,636,901
493,171
658,843
1,978,058
1,373,857
1,402,417
106,989
298,354
101,473
69,407
405.850
100,384
Total equity attributable to shareholders of the parent
entity
1,880,673
1,978,058
21.
Particulars in relation to subsidiaries
a. Milton Corporation Limited’s subsidiaries
The following subsidiaries have been included in the
consolidated accounts:
85 Spring Street Properties Pty Ltd
Chatham Investment Co. Pty Limited
Incorporated Nominees Pty Limited
Milhunt Pty Limited
Choiseul Investments Limited (Choiseul) (refer note 21b
and c)
The parent entity and all subsidiaries are incorporated in
Australia.
Interest held %
100
100
100
100
-
100
100
100
100
100
b.
Acquisition of subsidiaries
During the year ended 30 June 2012 there were no acquisitions of subsidiaries.
Previous comparative period – 30 June 2011
In August 2010 Milton acquired 100% of the shares in an unlisted investment company with the
consideration consisting of the issue of 2,446,521 new Milton shares with a fair value of $41,413,000.
In December 2010 Milton increased its ownership of Choiseul to 100% when it acquired 88.1% of the
issued capital of Choiseul with the consideration consisting of 23,803,854 new Milton shares with a
fair value of $397,928,000.
The main activity of the companies is investing in listed securities.
The operating results of the companies from the date of acquisition have been included in the
consolidated income statement, while the assets and liabilities have been included in the
consolidated statement of financial position.
Choiseul contributed revenues of $2,212,000 and net profit of $1,571,000 to Milton for the period
from 3 December 2010 to 30 June 2011. If the merger had occurred on 1 July 2010 consolidated
revenue and consolidated profit for the year ended 30 June 2011 would have been $108,975,000
and $99,267,000 respectively.
38
21.
b.
Particulars in relation to subsidiaries (continued)
Acquisition of subsidiaries (continued)
The results of the unlisted investment company from 1 July 2010 to the date of acquisition and
subsequent to that are not considered material to warrant separate disclosure. The basis of fair value
of the net assets acquired is the price quoted in an active market being the Australian Securities
Exchange.
The assets and liabilities recognised as a result of the acquisitions are as follows:
Choiseul
Fair value of the net assets acquired:
Investments
Fair value of Milton’s holding in Choiseul
Liquid and other assets
Liabilities
Unlisted Investment company
Fair value of the net assets acquired:
Investments
Liquid and other assets
Liabilities
2012
$’000
2011
$’000
-
-
-
-
-
-
-
-
-
439,661
(53,524)
51,634
(39,843)
397,928
39,621
2,781
(989)
41,413
Total acquisition costs of $284,000 are included in the consolidated income statement
and share issue costs of $165,000 have been included in issued capital.
c.
Disposal of subsidiaries
In November 2011, Choiseul was placed into voluntary liquidation.
(2011: In December 2010 the unlisted investment company that was acquired and referred to in
note 21b was placed into voluntary liquidation).
22.
a.
Related parties
Directors and Key Management Personnel compensation
Short-term benefits
Other long-term benefits
Post-employment benefits
Share-based payments
939
17
175
184
1,315
927
15
166
139
1,247
Information regarding individual director’s and executives’ compensation and equity instruments
disclosures, as permitted by Corporations Regulations 2M.3.03, are provided in the Remuneration
Report section of the Directors’ Report on pages 14 to 17.
39
22. Related parties (continued)
b. Shareholdings of non-executive directors and their related parties – number of shares held
R.D. Millner
J.F. Church
G.L. Crampton
K.J. Eley
(1)
I.A. Pollard
J.N. Aitken
(2)
(1) Appointed on 1 December 2011
(2) Retired on 13 October 2011
Balance
1 July
Acquisition
9,581,822
4,747,967
5,901,400
5,664,451
27,307
20,307
-
-
27,437
25,455
21,400
21,400
103,721
4,833,855
7,383
236,949
-
7,000
-
-
-
1,982
-
-
Balance
30 June
9,685,543
9,581,822
5,908,783
5,901,400
27,307
27,307
5,932
-
27,437
27,437
-
21,400
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
c. Executives’ and their related parties shareholdings – number of shares held
F.G. Gooch
Managing director
A.R. Davison
CFO, secretary
Balance
1 July
Received as
Remuneration
Other
Acquisitions
2012
2011
2012
2011
162,737
128,967
43,012
20,000
10,000
5,000
38,012
5,000
1,000
23,770
-
-
Balance
30 June
183,737
162,737
48,012
43,012
d. Loans to executives in relation to the Senior Staff Share Plan
Details regarding loans outstanding at the reporting date to specified directors and specified
executives, where the individual’s aggregate loan balance exceeded $100,000 at any time in the
reporting period, are as follows:
Balance
1 July
Net
change
Balance
30 June
Highest
balance in
the period
$
1,762,271
1,516,238
Notional
Interest
$
131,819
97,526
$
1,683,932
1,460,406
665,824
695,593
52,369
620,126
642,463
41,228
F.G. Gooch
Managing director
A.R. Davison
CFO, secretary
$
2012
2011
2012
2011
1,460,406
1,360,242
620,126
564,465
$
223,526
100,164
45,698
55,661
Terms and conditions of the loans are referred to in note 17b.
40
22. Related parties (continued)
e. Other related party transactions
All non-executive directors have entered into the Deed of Indemnity, Insurance and Access that was
approved at the Annual General Meeting held on 10 October 2000. Milton has a Remuneration and
Retirement Benefits Deed with each of the non-executive directors except Messrs G.L Crampton and
K.J. Eley. During the 30 June 2004 year, Milton and the directors varied the Remuneration and
Retirement Benefits Deed, whereby the maximum retirement benefit payable to a non-executive
director on retirement will be the provision for the director as at 30 June 2003. Apart from the details
disclosed in this note no director has entered into a material contract with the parent entity or Milton
since the end of the previous financial year and there were no material contracts involving directors’
interests subsisting at the end of the year.
Loans to and from subsidiaries
Loans have been made to and by the parent entity to wholly owned subsidiaries for capital
transactions. The loans between the parent and its subsidiaries have no fixed date of repayment and
are non-interest bearing.
During the year ended 30 June 2012, such loans to subsidiaries totalled $424,943,333
(2011: $76,392,021) and loans from subsidiaries totalled $4,237,499 (2011: $426,333,493).
Other arrangement with non executive director
Mr J.F. Church rented office space from Milton at commercial rates from 1 July 2011 to 30 June 2012
and rental income received by Milton during the financial year was $13,191 (2011: $12,911).
23. Contingencies
At the reporting date the directors are not aware of any material contingent liabilities.
24.
Events subsequent to reporting date
Since the end of the financial year, the directors declared a fully franked final dividend of 40 cents per
share, payable on 4 September 2012.
This financial report was authorised for issue in accordance with a resolution of directors on 9 August
2012.
41
25. Holdings at Fair Value through Other Comprehensive Income at 30 June 2012
The following holdings are valued at fair value through Other Comprehensive Income.
2012
$’000
Investments in equity instruments
Adelaide Brighton Limited
AGL Energy Limited
Alumina Limited
Amalgamated Holdings Limited
Amcor Limited
AMP Limited
A P Eagers Limited
APA Group
APN News & Media Limited
ARB Corporation Limited
Argo Investments Limited
Arrium Limited (previously OneSteel Limited)
ASX Limited
Austbrokers Holdings Limited
Australand Property Group
Australia & New Zealand Banking Group Limited
- ordinary shares
- convertible preference shares
- CPS 1
Australian Foundation Investment Company Limited
Automotive Holdings Group Limited
Bank of Queensland Limited
Bendigo & Adelaide Bank Limited
BHP Billiton Limited
Billabong International Limited
BKI Investment Company Limited
Blackmores Limited
Bluescope Steel Limited
Boral Limited
Bradken Limited
Brambles Limited
Brickworks Limited
BWP Trust
Cabcharge Australia Limited
Caltex Australia Limited
Campbell Brothers Limited
Cardno Limited
Carlton Investments Limited
CFS Retail Property Trust
Charter Hall Office Trust
Charter Hall Retail REIT
Coal & Allied Industries Limited
Coca-Cola Amatil Limited
Cochlear Limited
Coffey International Limited
Commonwealth Bank of Australia
- ordinary shares
- PERLS V
Commonwealth Property Office Fund
Consolidated Media Holdings Limited
Crown Limited
CSL Limited
CSR Limited
David Jones Limited
Diversified United Investment Limited
Equity Trustees Limited
Fletcher Building Limited
42
5,926
34,042
886
4,777
8,227
7,781
18,525
5,408
865
6,777
4,167
3,456
11,755
6,834
2,057
62,353
1,935
199
5,426
2,567
43,363
42,309
101,143
-
1,325
9,769
-
4,801
3,656
7,195
32,568
2,543
674
645
117,623
5,678
5,606
17,660
-
2,030
-
18,293
2,094
-
159,941
102
1,750
901
2,269
23,142
292
922
641
2,605
3,695
2011
$’000
4,986
27,432
2,156
3,598
6,274
9,658
10,839
3,964
1,722
5,374
4,539
6,901
11,178
5,582
2,382
61,168
2,004
202
5,765
1,019
47,797
50,588
136,844
575
1,388
9,267
1,195
7,161
4,460
8,433
32,891
2,495
694
561
99,215
1,792
6,014
16,522
764
1,963
4,436
13,917
2,290
419
157,532
104
1,621
698
2,387
19,408
605
1,446
733
3,273
5,325
25. Holdings at Fair Value through Other Comprehensive Income at 30 June 2012 (continued)
Fairfax Media Limited
FKP Property Group
Fleetwood Corporation Limited
Foster's Group Limited
Goodman Fielder Limited
Goodman Group
Goldman Sachs JB Were Collateral Mezzanine Fund
Goldman Sachs JB Were Private Equity Fund
Graincorp Limited
Gresham Private Equity Co-Investment Fund
GWA International Limited
Hills Holdings Limited
Insurance Australia Group Limited
- ordinary shares
- convertible preference shares
IAG Finance(NZ) Limited Perpetual Reset Exchangeable Notes
Incitec Pivot Limited
Infigen Energy
InvoCare Limited
IOOF Holdings Limited
Leighton Holdings Limited
Lend Lease Corporation Limited
Lindsay Australia Limited
Macarthur Coal Limited
Macquarie Group Limited
Metcash Limited
Mirvac Group
MyState Limited
National Australia Bank Limited
New Hope Corporation Limited
Noni B Limited
Orica Limited
Origin Energy Limited
Perpetual Limited
Plantation Land Limited
Premier Investments Limited
QBE Insurance Group Limited
Qube Logistics Holdings Limited
Reece Australia Limited
Ramsay Health Care Limited
Rio Tinto Limited
Santos Limited
Schaffer Corporation Limited
Sedgman Limited
Select Harvests Limited
Seven Group Holdings Limited - Transferable Equity Linked
Yield Shares 4
Seven West Media Limited
Sims Metal Management Limited
Sonic Healthcare Limited
Stockland Group
Suncorp Group Limited
- ordinary shares
- convertible preference shares
Sydney Airport (previously MAP Group)
Tatts Group Limited
Telstra Corporation Limited
Ten Network Holdings Limited
43
2012
$’000
1,794
1,380
2,078
-
-
678
97
9
2,946
60
4,778
1,115
12,728
294
1,192
4,360
-
13,666
974
12,330
3,227
272
-
12,847
16,124
417
1,357
102,368
5,173
577
4,370
4,723
18,735
6
1,791
36,203
1,965
2,356
2,373
25,475
14,985
248
2,115
210
546
2,825
7,621
6,637
6,625
22,918
3,730
1254
1,724
43,421
636
2011
$’000
4,637
2,541
1,660
15,810
339
651
104
9
2,558
60
6,256
3,012
11,579
303
1,236
5,349
431
12,508
495
17,209
3,653
288
3,860
15,441
18,760
409
1,562
110,901
6,734
564
4,350
5,101
20,396
6
2,342
46,674
964
2,334
1,362
37,419
19,052
225
1,515
461
630
6,557
13,997
5,817
7,335
23,060
3,857
1,444
624
30,695
1,336
25. Holdings at Fair Value through Other Comprehensive Income at 30 June 2012 (continued)
Toll Holdings Limited
TPG Telecom Limited
Transfield Services Limited
Transurban Group
The Trust Company Limited
Treasury Wine Estates Limited
UGL Limited
Washington H Soul Pattinson & Company Limited
Wesfarmers Limited
- ordinary shares
- partially protected shares
Westfield Group
Westfield Retail Trust
Westpac Banking Corporation
Wide Bay Australia Limited
Woodside Petroleum Limited
Woolworths Limited
Worley Parsons Limited
Other liquid securities
Adelaide Managed Funds
AMP - notes
Bank of Queensland- perpetual equity preference 07
Colonial Group – subordinated notes
Commonwealth Bank of Australia
- Perls III
- Perls IV
Goodman Funds Management – perpetual listed unsecured
securities
Macquarie CPS Trust – convertible preference shares
Orica Limited – step-up preference shares
Suncorp convertible preference shares
Westpac Banking Corporation - preference shares (stapled
preferred securities)
Woolworths Limited - notes
Woolworths notes II
2012
$’000
4,373
6,513
2,757
12,274
13,202
4,451
16,781
125,418
74,806
10,752
4,540
1,684
220,126
2,519
24,511
69,318
5,788
1,825,344
-
2,723
4,525
995
893
1,200
985
1,025
-
982
1,000
-
207
14,535
2011
$’000
4,824
6,288
4,737
11,282
16,172
3,479
16,836
119,142
77,837
10,987
4,139
1,601
231,898
3,538
32,192
69,821
5,603
1,928,404
375
2,803
4,665
-
929
1,181
855
1,045
808
1,015
1,012
559
-
15,247
44
DIRECTORS’ DECLARATION
1. In the opinion of the directors of Milton Corporation Limited:
(a) the consolidated financial statements and notes that are set out on pages 22 to 44 and the
Remuneration report, that is set out on pages 14 to 17 in the Directors’ report are in accordance with
the Corporations Act 2001, including:
(i) giving a true view of the consolidated entity’s financial position as at 30 June 2012 and of its
performance for the financial year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations
2001; and
(b) there are reasonable grounds to believe that Milton Corporation Limited will be able to pay its debts as
and when they become due and payable.
2. The directors have been given the declarations required by Section 295A of the Corporations Act 2001
from the chief executive officer and chief financial officer for the financial year ended 30 June 2012.
Signed in accordance with a resolution of the directors.
R. D. MILLNER
Chairman
Sydney, 9 August 2012
45
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF MILTON CORPORATION LIMITED
Level 7, 20 Hunter Street
Sydney NSW 2000
T +61 (0)2 8236 7700
F +61 (0)2 9233 4636
www.moorestephens.com.au
We have audited the accompanying financial report of Milton Corporation Limited and its Controlled Entities (the
consolidated entity), which comprises the consolidated statement of financial position as at 30 June 2012, the
consolidated income statement, consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year ended on that date, a summary of
significant accounting policies and other explanatory notes and the directors’ declaration of the consolidated
entity comprising Milton Corporation Limited and the entities it controlled at the year ended or from time to time
during the financial year.
Directors’ Responsibility for the Financial Report
The directors of Milton Corporation 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 and for such internal control as the directors determine is
necessary to enable the preparation of the financial report that is free from material misstatement, whether due
to fraud or error.
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.
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 controls relevant to the entity’s preparation of the financial report
that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls.
An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Moore Stephens Sydney ABN 90 773 984 843.
*Other than for the acts or omissions of financial services licensees. An independent member of Moore Stephens International Limited -
members in principal cities throughout the world The Sydney Moore Stephens firm is not a partner or agent of any other Moore Stephens firm.
Liability limited by a scheme approved under Professional
Standards Legislation*
46
Auditor’s Opinion
In our opinion the financial report of Milton Corporation Limited and its Controlled Entities is in accordance with
the Corporations Act 2001, including:
(i) giving a true and fair view of Milton Corporation Limited’s consolidated financial position as at 30
June 2012 and of their performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 17 of the directors’ report for the year ended
30 June 2012. The directors of Milton Corporation Limited are responsible for the preparation and presentation
of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is
to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Auditor’s Opinion
In our opinion the Remuneration Report of Milton Corporation Limited for the year ended 30 June 2012,
complies with section 300A of the Corporations Act 2001.
Matters Relating to the Electronic Publication of the Audited Financial Report
the consolidated entity for the year ended 30 June 2012
This auditor’s report relates to the financial report of
included on Milton Corporation Limited ’s website. The company’s directors are responsible for the integrity of
Milton Corporation Limited’s website. We have not been engaged to report on the integrity of the Milton
Corporation Limited’s website. The auditor’s report refers only to the subject matter described above. It does
not provide an opinion on any other information which may have been hyperlinked to/from these statements. If
users of the financial report are concerned with the inherent risks arising from publication on a website, they are
advised to refer to the hard copy of the audited financial report to confirm the information contained in this
website version of the financial report.
Moore Stephens Sydney
Chartered Accountants
Martin J. (Joe) Shannon
Partner
Dated in Sydney this 9th day of August 2012.
47
DIRECTORY
DIRECTORS
MANAGEMENT
R. D. MILLNER - Chairman
F. G. GOOCH - Managing director
J. F. CHURCH
G.L. CRAMPTON
K.J. ELEY
F. G. GOOCH - Managing director
I. A. POLLARD
A. R. DAVISON - CFO, secretary
REGISTERED OFFICE AUDITORS
LEVEL 2, 50 PITT STREET MOORE STEPHENS SYDNEY
SYDNEY NSW 2000 CHARTERED ACCOUNTANTS
PHONE: (02) 8006 5357 LEVEL 7
FAX: (02) 9251 7033 20 HUNTER STREET
EMAIL: general@milton.com.au SYDNEY NSW 2000
INTERNET: www.milton.com.au INTERNET:
www.moorestephens.com.au
SHARE REGISTRY
LINK MARKET SERVICES LIMITED
LOCKED BAG A14
SYDNEY SOUTH NSW 1235
PHONE: (02) 8280 7111
FAX: (02) 9261 8489
TOLL FREE: 1800 641 024
EMAIL: registrars@linkmarketservices.com.au
INTERNET: www.linkmarketservices.com.au
48
TOP 20 SHAREHOLDERS AS AT 31 JULY 2012
ASX INFORMATION
NAME
Argo Investments Limited
Washington H. Soul Pattinson & Company Limited
Myora Pty Limited
Australian Foundation Investment Company Limited
Chickenfeed Pty Limited
Griffinna Pty Ltd
Danwer Investments Pty Limited
Bortre Pty Limited
Otterpaw Pty Ltd
JBF Holdings Pty Ltd
HSBC Custody Nominees (Australia) Limited
National Nominees Limited
Jamama Nominees Pty Limited
Macdawley Proprietary Limited
J S Millner Holdings Pty Limited
Hexham Holdings Pty Limited
Gartfern Pty Limited
Chickenfeed Pty Ltd
Millane Pty Limited
A V L Investments Proprietary Limited
Djaldar Pty Ltd
SHARES
HELD
8,260,028
6,717,060
4,554,622
2,880,585
1,390,280
1,271,004
1,213,725
1,213,725
1,168,105
1,050,000
1,022,594
912,908
838,353
695,923
686,527
643,840
641,190
635,834
630,878
595,816
584,946
On 31 July 2012, there were 18,981 holders of ordinary shares in the capital of Milton. Holders
of ordinary shares are entitled to one vote per share.
Number of shares held Number of shareholders
1-1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
The number of holders of less than a marketable parcel of 31 shares
%
6.79
5.52
3.74
2.37
1.14
1.05
1.00
1.00
0.96
0.86
0.84
0.75
0.69
0.57
0.56
0.53
0.53
0.52
0.52
0.49
0.48
7,106
8,653
1,934
1,185
103
614
SUBSTANTIAL SHAREHOLDINGS As at 31 July 2012 the names and holdings of
substantial shareholders as disclosed in notices received by Milton are as follows:-
Substantial shareholders
Argo Investments Limited
Washington H Soul Pattinson & Company Limited
Date of Notice
20 December 2010
20 December 2010
No. of shares
8,260,028
6,717,060
OTHER INFORMATION
Milton is taxed as a public company.
There is no current on-market buy-back.
The total number of transactions in securities undertaken by Milton was 350 and the total
brokerage paid or accrued was $211,772.
49
ISSUES TO SHAREHOLDERS SINCE 19TH SEPTEMBER, 1985
(Commencement of Capital Gains Tax)
1 for 10 Bonus Issue from Capital Profits Reserve
Bonus in lieu of Dividend from Capital Profits Reserve
1 for 10 Bonus Issue from Capital Profits Reserve
Bonus in lieu of Dividend from Capital Profits Reserve
1 for 20 Bonus from Share Premium Reserve
1 for 20 Bonus from Capital Profits Reserve - a fully franked dividend
1 for 20 Cash Issue at $3 per share
1 for 10 Bonus from Share Premium Reserve
1 for 20 Cash Issue at $3 per share
1 for 20 Cash Issue at $3 per share
1 for 10 Bonus from Capital Profits Reserve - a fully franked dividend
1 for 10 Cash Issue at $4 per share
1 for 10 Bonus from Share Premium Reserve
1 for 10 Cash Issue at $4.75 per share
1 for 10 Bonus from Share Premium Reserve
3 Milton shares for 10 Chatham shares at $7.756022 per Milton share
3 Milton shares for 10 Matine shares at $7.756022 per Milton share
9 Milton shares for 40 Milkirk shares at $7.756022 per Milton share
1 for 10 cash issue at $8.20 per share
Share Purchase Plan at $8.75 per share
Share Purchase Plan at $8.86 per share
Share Purchase Plan at $10.79 per share
Acquired Cambooya Investments Limited on the basis of 1.55 Milton shares for every
10 Cambooya shares - 8,273,502 Milton shares issued
2,287,200 Milton shares for the acquisition of an unlisted investment company
Share Purchase Plan at $11.70 per share
1,739,112 Milton shares for the acquisition of an unlisted investment company
Share Purchase Plan at $13.21 per share
2,742,777 Milton shares for the acquisition of an unlisted investment company
496,809 Milton shares for the acquisition of an unlisted investment company
Share Purchase Plan at $14.10 per share
Share Purchase Plan at $17.11 per share
1,000,322 Milton shares for the acquisition of an unlisted investment company
1,476,254 Milton shares for the acquisition of an unlisted investment company
382,404 Milton shares issued for the acquisition of an unlisted investment company
278,103 Milton shares issued for the acquisition of an unlisted investment company
Share Purchase Plan at $19.60 per share
1,888,353 Milton shares issued for the acquisition of an unlisted investment company
1,895,976 Milton shares issued for the acquisition of an unlisted investment company
2,424,582 Milton shares issued for the acquisition of an unlisted investment company
252,477 Milton shares issued for the acquisition of an unlisted investment company
1,223,252 Milton shares issued for the acquisition of an unlisted investment company
Share Purchase Plan at $22.48 per share
Share Purchase Plan at $17.85 per share
3,555,958 Milton shares issued for the acquisition of an unlisted investment company
Share Purchase Plan at $16.08 per share
4,132,711 Milton shares issued for the acquisition of unlisted investment companies
23,803,854 Milton shares issued for the acquisition of Choiseul Investments Limited
15.11.1985
19.05.1986
05.06.1987
05.06.1987
15.11.1988
15.11.1988
26.05.1989
10.11.1989
08.06.1990
24.05.1991
23.04.1992
11.05.1992
23.11.1994
12.12.1994
15.11.1995
06.07.1998
06.07.1998
06.07.1998
21.06.1999
10.11.1999
13.11.2000
13.11.2001
31.12.2001
28.06.2002
08.11.2002
31.12.2002
31.10.2003
11.03.2004
01.04.2004
29.10.2004
21.10.2005
17.08.2006
23.08.2006
28.08.2006
21.09.2006
16.10.2006
10.11.2006
23.03.2007
14.05.2007
20.06.2007
24.09.2007
19.10.2007
03.10.2008
19.02.2009
09.10.2009
26.02.2010
16.12.2010
50
"CPI" FOR CAPITAL GAINS TAX
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
March
-
74.4
81.4
87.0
92.9
100.9
105.8
107.6
108.9
110.4
114.7
119.0
120.5
120.3
121.8
June
-
75.6
82.6
88.5
95.2
102.5
106.0
107.3
109.3
111.2
116.2
119.8
120.2
121.0
122.3
September
71.3
77.6
84.0
90.2
97.4
103.3
106.6
107.4
109.8
111.9
117.6
120.1
119.7
121.3
123.4
December
72.7
79.8
85.5
92.0
99.2
106.0
107.6
107.9
110.0
112.8
118.5
120.3
120.0
121.9
51