OLDFIELDS HOLDINGS LIMITED
AND CONTROLLED ENTITIES
ABN: 92 000 307 988
Annual Financial Report For The Year Ended
30 June 2009
OLDFIELDS HOLDINGS LIMITED
ABN 92 000 307 988
Directors:
J. R. Westwood
Chairman
A. Mankarios
Chief Executive Officer
C. C. Hext
T. D. J. Love
Secretary:
G. J. Guild
Auditors:
Hall Chadwick
Chartered Accountants
Bankers:
Westpac Banking Corporation
Registered Office:
Share Register:
8 Farrow Road
Campbelltown NSW 2560
Telephone: (02) 4627 0777
Registries Limited
Level 7
207 Kent Street
Sydney NSW 2000
Telephone: (02) 9290 9600
Facsimile: (02) 9279 0664
www.registriesltd.com.au
OLDFIELDS HOLDINGS LIMITED
AND CONTROLLED ENTITIES
30 June 2009
ABN: 92 000 307 988
CONTENTS
Report of the Directors
Auditor's Independence Report
Income Statement
Balance Sheet
Statement of Changes in Equity
Cash Flow Statement
Notes to Financial Statements
Directors' Declaration
Independent Audit Report
Additional Information for Listed Public Companies
Corporate Governance
Risk Management Statement
Page
1
7
8
9
10
11
12
33
34
36
37
46
This page is left blank intentionally.
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
REPORT OF THE DIRECTORS’
Your directors present their report, together with the financial statements of the Group, being the Company and its controlled entities for the financial year ended 30 June 2009.
Directors
The name of the directors in office at any time during or since the end of the year are:
John R Westwood
Anthony Mankarios
Thomas D J Love
Christopher C Hext
Directors have been in office since the start of the financial year to the date of this report.
Company Secretary
The following person held the position of company secretary at the end of the financial year Gary J. Guild.
Mr Guild is a member of the Australian Institute of Management, Professional Fellow National Institute of Accountants, Fellow of the Taxation Institute of Australia and Certified
Finance and Treasury Professional.
Mr Guild held a Senior Accounting and Management position with a top tier Chartered Accountant Firm for 18 years and has extensive experience with various public companies
as a senior executive.
Principal Activities and Significant Changes in Nature of Activities
The principal activities of the consolidated group during the financial year were:
• manufacturing and marketing of paint brushes, paint rollers, painter's tools and spray guns,
• manufacture, marketing and exporting of Treco Garden Sheds, outdoor storage systems, avaries and pet homes,
• manufacture and marketing of scaffolding and related equipment,
• operation of a hire division, hiring scaffolding and related products to the building and construction industry, and
• manufacture and marketing of cleaning and personnel care products.
Operating Results and Review of Operations for the year
Operating Results
The Company's Consolidated Groups total Revenue to 30 June 2009 is $46.1M, up 12.3% from $41.1M in 2008. The Consolidated Net Loss after tax attributable to members for
the year 30th June 2009 was $6,266,411 down from $1,718,487profit for the corresponding period to 30th June 2008.
The Company incurred one-off non recurring costs and charges to the accounts in this financial year of $6.3M. This was primarily caused by impairment of goodwill and
intangibles of $4.0M in accordance with International Financial Reporting Standards.
The Company was affected by the World Financial Crisis (WFC) in a few key areas.
(i) The Company's business units operate mostly superior vertically integrated business models and import the vast majority of its goods from Asia. The Australian dollar dropped
from its highs of $0.98 AUD/USD to $0.65 AUD/USD during the middle of this financial year and for most of the later part of the year bottomed out at levels close to this figure. This
affected our consolidated profit margins as many of the company's customers were not in a position to absorb an immediate 33% increase in price.
(ii) In the first half of the year, the Company's revenue showed consistently strong growth. This was adversely affected toward the second half of the year by weakening demand in
the construction industry, particularly in the NSW market. This is consistent with HIA data.
(iii) The Company decided to reduce operational costs by reducing staff numbers and as a result redundancy payments were made during the year. This was a direct result of the
WFC as the Company looked to align its costs with current market conditions. This affected our reported earnings. In the coming year, these redundancies are expected to save in
excess of $1.0M in 2010 salaries.
(iv) The Company's inventory values rose from $8.3M to $9.6M during this period despite a significant increase in stock turn ratios in most divisions. This adversely affected cash
as we replenished units at the lower AUD rates during this period. As a result, the Company's Board and major shareholders loaned the Company $1,000,000 in May for a 2 year
interest only period to assist with its capital management strategy.
(v) Consistent with current accounting standards the Board decided that the Intangible Assets associated with recent business acquisitions should be impaired. This caused a one-
off non recurring charge to our accounts of $4,027,937.
The table below summarises the expenses adversely affecting this year's results.
Redundancy
Total Impairments
FX Effects
Bad Debts
Loss of Rent
Relocation of Factory
Others
Total
$246,865
$4,137,337
(Includes Intangibles and Property)
$1,415,861
$181,161
$110,700
$55,700
$306,208
$6,453,832
Review of Operations
(i) Scaffold Division
We have grown to become the market leader sales and hire of Aluminium Scaffold.
The Aluminium Scaffold Division performed reasonably well despite the WFC and Building slump, picking up market share as some of its competitors ceased or condensed their
operations.
Our Chinese manufacturing operations in Foshan, China continue to win worldwide business and remain a real asset to the Group.
1
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
REPORT OF THE DIRECTORS’
Most states performed within expectations except for NSW where a significant drop in construction and building activity affected revenues.
We have since received steady increases in enquiry levels and orders for Scaffold from our China factory and follow up to these enquiries is in progress.
(ii) Paint Applications
Business earnings performed well below expectations due to non-recurring factors outlined above in the Directors overview.
We anticipate that with a stabilising Australian Dollar, these will bounce back to normal earning patterns.
Our Brand name is over 91 years old and our business enjoys consistent superior brand and distribution performance recognition.
(iii) Garden Sheds Storage
This business has strong distribution channels and manufactures and sells an aestheically strong and superior product to the worldwide market.
Softer than expected Building activity in NSW affected local revenues within some key customers group.
The divison has made a contribution to the group and continues to win export business.
(iv) PT Ace Oldfields
This business is a 49% owned Associate in Indonesia. This business experienced strong double digit gains in local sales, thereby improving our market share in Indonesia.
However, it was affected adversely by the WFC with lower than anticipated exports to the USA. This is currently stabilising. Australia and New Zealand exports remained solid
during the year.
The Board feels that once world activities stabilise, this division will return to normalised trading.
(v) H & O Products
This is a 75% owned subsidiary of the group which acquired the business from H & O Pharmaceutical on the 4th August 2008. This currently operates at Fairfield, NSW.
This division will become part of our consumer goods division. It manufactures many of the large generic brands in the cleaning product category for larger supermarkets and
grocery outlets. The generic Brands Market is expected to continue to increase as a percentage of total Australian supermarket sales. It also owns trademarks such as Tornado
and Helena Products. The division has budgeted to increase sales this coming year.
The complex nature of its integration into our ERP system and the lower than anticipated sales resulted in a disappointing performance well below initial expectations.
The Board has instigated a review of this business which included significant cost cutting and management changes.
The Company manufactures about 50% of all its bottle requirements. The bottle factory was recently moved to our 8 Farrow Road, Campbelltown site in mid August 2009. The
business is budgeting an improved trading result in 2010.
Our plans for this business are further explained in the Future Prospects section of this Report, set out below.
(vi) Property
The Company owns significant property assets.
This includes a 47.5% share in a property in Tangshan, China, along with 100% of its Australian property portfolio.
We have just leased the Prestons property and this property will continue to remain on our books as an Investment Property.
The Company will review the potential to sell some or all of its unused property assets in the coming year with a view to retire debt.
Capital Management
As forshadowed above, the Company needs to raise further working capital in order to refocus and recapitalise the H & O Business, to replenish its working capital and retire some
debt. The Board is currently considering a range of options,which include a share placement and or a Rights Issue.
Company Going Forward
The Directors are keen to improve shareholder value and undertake to maintain continuing good Corporate Governance. We will keep the market regularly informed. Whilst our
earnings results signal a deterioration of the traditional previous five years improvements, without doubt significant widely published world events contributed to this one-off
adverse effect. The Company continues its record of strong revenue growth.
The Board recognises that ultimately this company needs to grow from a small public company. We have resolved to continue to explore any potential to gain synergistic
possibilities through mergers or acquisitions of suitable entities, both private or public, into the future, with companies operating similar or diverse businesses in order to add critical
mass to the organisation and add shareholder value and improve the liquidity of our traded shares.
The Directors feel that whilst every care has been taken in providing shareholders an accurate insight as to our future prospects, as stated in this report, circumstances may
change and results may vary depending on uncontrollable current economic and unforseen circumstances in prevailing economic conditions and do not factor in any such
unforeseen circumstances in this Report.
The Company's activities will now forcus mainly on integration of the existing new business activities and their organic growth, with a short consolidation period expected in the
next few months.
The Board will also oversee a formal review of the Company's assets and determine the necessary strategy and controls to maximise the profits in the coming year.
Dividends Paid or Recommended
2 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
REPORT OF THE DIRECTORS’
The Company declared an interim fully franked dividend of 1.0 cent and will defer declaration of any final dividend for the year 2009 until November's AGM and after capital raising
is finalised. The Dividend Policy will remain on hold until further notice.
The total number of ordinary shares on issue in the Company was 14,320,868 shares as at 30 June 2009.
After Balance Date Events
The Company paid a tranche 3 payment of $985,711 on the 1st September 2009 to the vendors of Advance Scaffolds. A partial payment was made on the 6th July 2009 to the
vendors by the issue of 1,233,451 shares in Oldfields Holdings Limited.
The Company also issued 200,000 shares on the 14th August 2009 in Oldfields Holdings Limited to the vendors of the H & O business as final settlement of that acquisition.
The Company's total shares on issue rose to 15,744,319 as at 30th August 2009.
Future Developments, Prospects and Business Strategies
To further improve the consolidated group’s profit and maximise shareholder wealth, the following developments are intended to be implemented in the near future:
Revenue and profits are forecast to increase in the current year, particularly in the second half of the year. This growth in revenue and profit will be driven by two factors:
(i) Organic growth is anticipated to resume and to follow the growth trends evident in the years prior the WFC.
(ii) We intend to refocus the H & O Business by significantly adding to capacity by making capital investments in machinery and technology. We plan to inject more working
capital into this business enabling higher levels of "on time and full production" to be achieved. This in turn will generate better profits by winning more business and
achieving greater levels of customer satisfaction. The lack of working capital in the past was identified as the main constraint of the business prior to our acquisition and had
still not properly been addressed by us due to unexpected availablity and constraints of working capital caused by the WFC.
\
Environmental Issues
The economic entity's manufacturing operations are not subject to significant environmental regulations under the law of the Commonwealth and State. The economic entity has
established a process whereby compliance with existing environmental regulations and new regulations is monitored continually. This process includes procedures to be followed
should an incident adversely impact the environment. The Directors are not aware of any significant breaches during the period covered by this report.
Information on Directors
John Roy Westwood
Qualifications
Experience
Interest in Shares and Options
Special Responsibilities
Directorships held in other listed entities during the
three years prior to the current year
Anthony Mankarios
Qualifications
Experience
Interest in Shares and Options
Special Responsibilities
Directorships held in other listed entities during the
three years prior to the current year
Thomas D J Love
Qualifications
Experience
Interest in Shares and Options
Special Responsibilities
Directorships held in other listed entities during the
three years prior to the current year
Christopher C Hext
Qualifications
Experience
Interest in Shares and Options
Special Responsibilities
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Chairman (Non Executive), Age 58.
Accountant.
Appointed Chairman 12 August 2002. Board member since 2001. Mr. Westwood has 27 years experience in the
Building Materials Industry holding many senior accounting positions and is an experienced administrator of
both small and medium sized companies.
3,460,000 Ordinary Shares in Oldfields Holdings Limited and options to acquire a further 150,000 Ordinary
Shares.
Mr. Westwood is a member of the Remuneration Committee.
Nil
Chief Executive Officer. Age 42.
Fellow of the Australian Institute of Company Directors, Master of Business Administration (SGSM), Certified
Finance and Treasury Professional.
Appointed Chief Executive Officer 10 October 2002. Board member since 2001. Mr. Mankarios was previously
involved for 13 years in all aspects of running and administration of a group of companies in the paint industry
and has extensive experience in manufacturing and retail business.
2,088,030 Ordinary Shares in Oldfields Holdings Limited and options to acquire a further 500,000 Ordinary
Shares.
Mr. Mankarios is a member of the Remuneration Committee.
Joyce Coporation Limited.
Director (Non Executive). Age 78.
Fellow of the Institute of Chartered Accountants.
Mr. Love was a partner in firms of Chartered Accountants for 40 years and has been a director since 1964. Mr.
Love has also been a director of a number of Australian and overseas public and private companies.
94,800 Ordinary Shares in Oldfields Holdings Limited and options to acquire a further 50,000 Ordinary Shares.
Mr. Love is a member of the Audit Committee.
Nil.
Director (Non Executive). Age 57.
Bachelor of Business (Accounting), Registered Tax Agent, Justice of Peace.
Board member since 2001. Mr. Hext was a Certified Practicng Accountant and has held senior accounting and
management positions in companies of all sizes.
830,000 Ordinary Shares in Oldfields Holdings Limited and options to acquire a further 50,000 Ordinary Shares.
Mr. Hext is Chairman of the Audit Committee.
3
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
REPORT OF THE DIRECTORS’
Directorships held in other listed entities during the
three years prior to the current year
—
Nil
Company Secretary
The following person held the position of company secretary at the end of the financial year: Gary J Guild.
Mr. Guild is a Member of the Australian Institute of Management, Professional Fellow National Institute of Accountants, Fellow of the Taxation Institute of Australia and Certified
Finance and Treasury Professional.
Meetings of Directors
During the financial year, 9 meetings of directors (including committees of directors) were held.
Attendances by each director during the year were as follows:
Directors' Meetings
Audit
Committee
Remuneration
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
9
9
9
9
9
9
7
8
-
2
2
2
-
2
2
2
1
1
-
-
1
1
-
-
John Roy Westwood
Anthony Mankarios
Thomas D J Love
Christopher C Hext
Indemnifying Officers or Auditor
During or since the end of the financial year, the company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay insurance premiums as
follows:
The company has paid premiums to insure each of above directors against liabilities for costs and expenses incurred by them in defending legal proceedings arising out of their
conduct while acting in the capacity of director of the company, other than conduct involving a wilful breach of duty in relation to the company. The Insurance Policy prohibits
disclosure of the amount of the premium.
Options
At the date of this report, the unissued ordinary shares of Oldfields Holdings Limited under option are as follows
Grant Date
Date of
expiry
Exercise price
Number under
option
30-Jun-07
24-Nov-08
30-Jun-10
24-Nov-11
$1.20
$1.20
1,275,000
350,000
1,625,000
No person entitled to exercise the option had or has any right by virtue of the option to participate in any share issue of any other body
corporate.
Proceedings on Behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking
responsibility on behalf of the company for all or any part of those proceedings.
The company was not a party to any such proceedings during the year.
Non-audit Services
The board of directors, in accordance with advice from the audit committee, is satisfied that the provision of non-audit services during the year is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the external
auditor’s independence for the following reasons:
• all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the
auditor; and
• the nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for
Professional Accountants set by the Accounting Professional and Ethical Standards Board.
The following fees were paid or payable to Hall Chadwick for non-audit services provided during the year ended June 2009.
Accounting advisory services
Taxation services
Due diligence investigations
Auditor’s Independence Declaration
$
60,555
46,400
19,000
125,955
The lead auditor’s independence declaration for the year ended 30 June 2009 has been received and can be found in the pages that follow this report.
REMUNERATION REPORT
Remuneration policy
4 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
REPORT OF THE DIRECTORS’
The remuneration policy of Oldfields Holdings Limited has been designed to align key management personnel objectives with shareholder and business objectives by providing a
fixed remuneration component and offering specific long-term incentives based on key performance areas affecting the consolidated group’s financial results. The board of
Oldfields Holdings Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best key management personnel to run and manage
the consolidated group, as well as create goal congruence between directors, executives and shareholders.
The board’s policy for determining the nature and amount of remuneration for key management personnel of the consolidated group is as follows:
• The remuneration policy is required to be developed by the remuneration committee and approved by the board after seeking professional advice from independent
external consultants.
• All key management personnel receive a base salary (which is based on factors such as length of service and experience), superannuation, fringe benefits, options and
performance incentives.
• The remuneration committee reviews key management personnel packages annually by reference to the consolidated group’s performance, executive performance and
comparable information from industry sectors.
The performance of key management personnel is measured against criteria agreed with each executive and is based predominantly on the forecast growth of the consolidated
group’s profits and shareholders’ value. All bonuses and incentives must be linked to predetermined performance criteria. The board may, however, exercise its discretion in
relation to approving incentives, bonuses and options, and can recommend changes to the committee’s recommendations. Any changes must be justified by reference to
measurable performance criteria. The policy is designed to attract the highest calibre of executives and reward them for performance that results in long-term growth in
shareholder wealth.
Key management personnel are also entitled to participate in the employee share and option arrangements.
The Key management personnel receive a superannuation guarantee contribution required by the government, which is currently 9%, and do not receive any other retirement
benefits. Some individuals, however, have chosen to sacrifice part of their salary to increase payments towards superannuation.
All remuneration paid to key management personnel is valued at the cost to the company and expensed. Shares given to key management personnel are valued as the difference
between the market price of those shares and the amount paid by key management personnel. Options are valued using the Black-Scholes methodology.
Revenue
Net Profit
Share Price at
Year-end
Dividends Paid
2005
$
26,720,072
1,189,631
2006
$
2007
$
2008
$
2009
$
29,121,120
1,150,296
34,025,465
41,562,933
1,563,790
1,718,487
47,289,262
(6,266,411)
0.90
1.00
1.10
0.80
0.49
515,234.00
702,431.00
704,184.00
879,009.00
772,335.00
Remuneration Details for the Year Ended 30 June 2009
The following table of payments and benefits details, in respect to the financial year, the components of remuneration for each member of the key management personnel for the
consolidated group and the eight group executives receiving the highest remuneration:-
Table of Benefits and Payments for the year ended 30 June 2009
Short-term benefits
Salary, Fees and Leave
$
Non-cash benefits
$
Post Employment
Benefits
Share - Based
Payment
Pension and
superannuation
$
Options
$
Total
$
2009
Group Key Management
Personnel
John Roy Westwood
Anthony Mankarios
Thomas D J Love
Christopher C Hext
Maurie W Abbott
Kenneth E Holloway
Raymond J Titman
Gary J Guild
46,930
211,135
29,702
37,740
135,333
59,137
79,640
81,940
681,557
38,245
40,137
-
-
12,955
23,268
35,843
5,217
155,665
4,224
19,002
-
3,397
12,180
-
7,168
7,375
53,346
6,854
22,847
2,285
2,285
-
2,285
6,854
2,285
45,695
96,253
293,121
31,987
43,422
160,468
84,690
129,505
96,817
936,263
5 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
REPORT OF THE DIRECTORS’
Short-term benefits
Post Employment
Benefits
Share - Based
Payment
Total
Salary, Fees and Leave
$
Non-cash benefits
$
Pension and
superannuation
$
Options
$
$
45,687
206,856
29,362
39,540
121,301
60,108
80,999
86,619
670,472
23,084
34,423
-
-
4,263
14,611
21,130
5,757
103,268
4,112
18,617
-
3,559
10,917
-
7,290
7,687
52,182
6,133
20,442
2,044
2,044
-
2,044
6,133
2,044
40,884
79,016
280,338
31,406
45,143
136,481
76,763
115,552
102,107
866,806
2008
Group Key Management
Personnel
John Roy Westwood
Anthony Mankarios
Thomas D J Love
Christopher C Hext
Maurie W Abbott
Kenneth E Holloway
Raymond J Titman
Gary J Guild
Options issued as part of remuneration for the year ended 30 June 2009.
Options are issued to directors and executives as part of their remuneration. The options are not issued based on performance criteria, but are issued to the majority of directors
and executives of Oldfields Holdings Limited and its subsidiaries to increase goal congruence between executives, directors and shareholders.
Options Granted As Remuneration
Group Key Management Personnel
John Roy Westwood
Anthony Mankarios
Thomas D J Love
Christopher C Hext
Maurie W Abbott
Braden Murrin
Kenneth E Holloway
Raymond J Titman
Gary J Guild
Grant Details
For the financial year ended 30 June 2009
Date
No.
Value per Option
at Grant Date
$
Exercise Price
$
Last Exercise Date
30-Jun-07
30-Jun-07
30-Jun-07
30-Jun-07
24-Nov-08
24-Nov-08
30-Jun-07
30-Jun-07
30-Jun-07
150,000
500,000
50,000
50,000
250,000
100,000
50,000
150,000
50,000
1,350,000
1.40
1.40
1.40
1.40
1.40
1.40
1.40
1.40
1.40
1.20
1.20
1.20
1.20
1.20
1.20
1.20
1.20
1.20
30-Jun-10
30-Jun-10
30-Jun-10
30-Jun-10
24-Nov-11
24-Nov-11
30-Jun-10
30-Jun-10
30-Jun-10
All options vest within 1 year of grant date and expire within 3 years of vesting.
The service and performance criteria set to determine remuneration are included in this remuneration report.
All options were granted fo nil consideration.
Employment contracts of directors and senior executives
The employment conditions of specified executives are formalised in contracts of employment.
The employment contracts stipulate a range of one to three months resignation periods. The Company may terminate an employment contract without cause by providing a 12
months written notice or making payment in lieu based on the individual's annual salary component, together with a redundancy payment between 5% and 10% of the individual's
fixed salary component. Termination payments are generally not payable on resignation or dismissal for serious misconduct. In the instance of serious misconduct, the Company
can terminate at any time. Any options not exercised before that date will lapse.
This Report of the Directors’, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board of Directors.
Director
Anthony Mankarios
6 7 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2009
Revenue
Cost of Sales
Gross Profit
Other Income
Distribution expenses
Marketing expense
Occupancy expenses
Administrative expenses
Share of loss of associates
Intangibles Impairment
Impairment of Loans to Subsidaries
Finance costs
(Loss)/Profit before income tax
Income tax expense
Profit from continuing operations
(Loss)/Profit from Discontinued Operations
(Loss)/Profit for the Year
Profit attributable to minority equity interest
Profit attributable to members of the parent entity
Overal Operations
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Continuing Operations
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Discontinued Operations
Basic earnings/(loss) per share (cents per share)
Dividends per share (cents)
The accompanying notes form part of these financial statements.
Parent Entity
2009
$
148,194
-
2008
$
1,390,000
-
-
-
-
(56,736)
-
-
(3,502,513)
(8,155)
(3,419,210)
(3,419,210)
(3,419,210)
-
(3,419,210)
-
-
-
(58,261)
-
-
-
-
1,331,739
-
1,331,739
1,331,739
-
1,331,739
Note
Consolidated Group
2009
2008
$
$
2
2
3
4
8
8
8
8
8
31,455,278
(26,697,123)
4,758,155
15,833,984
(15,686,904)
(1,270,250)
(1,515,456)
(2,306,428)
(131,136)
(4,027,937)
-
(1,985,323)
(6,331,295)
(334,805)
(6,666,100)
276,752
(6,389,348)
122,937
(6,266,411)
24,361,804
(18,241,560)
6,120,244
17,201,129
(13,778,910)
(1,242,473)
(1,038,232)
(2,633,290)
(26,576)
-
-
(1,795,725)
2,806,167
(817,102)
1,989,065
(170,623)
1,818,442
(99,955)
1,718,487
(44.22)
(44.22)
(47.04)
(47.04)
1.95
5.45
13.64
13.64
15.78
15.78
(1.35)
6.97
8 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
BALANCE SHEET AS AT 30 JUNE 2009
Note
Consolidated Group
2009
2008
$
$
Parent Entity
2009
$
2008
$
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Investments accounted for using the equity method
Other financial assets
Property, plant and equipment
Investment property
Deferred tax assets
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Borrowings
Current tax liabilities
Short-term provisions
Derivatives
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Deferred tax liabilities
Other long-term provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained earnings
Parent interest
Minority equity interest
TOTAL EQUITY
The accompanying notes form part of these financial statements.
9
10
11
20
10
12
15
17
18
23
19
21
22
23
24
17
22
23
24
25
33
588,917
6,093,202
9,638,136
599,776
16,920,031
295,567
6,345,604
8,306,548
670,122
15,617,841
19,307
3,831,893
-
-
3,851,200
34,315
5,264,483
-
-
5,298,798
125,000
2,094,525
313,314
16,468,398
4,316,900
-
1,260,988
24,579,125
41,499,156
-
1,885,803
83,115
17,213,887
2,694,336
-
5,025,254
26,902,395
42,520,236
-
-
7,209,276
-
-
4,924
-
7,214,200
11,065,400
-
-
7,209,176
-
-
4,924
-
7,214,100
12,512,898
6,651,727
7,003,806
370,015
1,955,342
60,812
16,041,702
8,847,013
4,244,136
474,037
2,014,758
-
15,579,944
16,378,938
-
143,460
16,522,398
32,564,100
8,935,056
11,697,385
22,632
154,866
11,874,883
27,454,827
15,065,409
935,082
-
134,450
-
60,812
1,130,344
1,000,000
-
-
1,000,000
2,130,344
8,935,056
432,441
-
166,809
-
-
599,250
-
-
-
-
599,250
11,913,648
12,141,959
(958,953)
(2,058,866)
9,124,140
(189,084)
8,935,056
10,921,391
(917,090)
4,979,880
14,984,181
81,228
15,065,409
12,141,959
51,965
(3,258,868)
8,935,056
-
8,935,056
10,921,391
59,580
932,677
11,913,648
-
11,913,648
9 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2009
Share Capital
Note
Ordinary
Retained
Earnings
Cash Flow
Hedge
Reserve
Asset
Revaluation
Reserve
$
$
$
9,927,730
993,661
-
-
-
10,921,391
-
10,921,391
1,220,568
-
-
-
12,141,959
-
12,141,959
4,140,402
-
1,718,487
-
-
5,858,889
(879,009)
4,979,880
-
(6,266,411)
-
-
(1,286,531)
(772,335)
(2,058,866)
-
-
-
-
-
-
-
-
-
(60,812)
(60,812)
-
(60,812)
$
-
-
-
-
-
-
-
-
-
-
-
180,911
180,911
-
180,911
7
7
Share Capital
Note
Ordinary
Retained
Earnings
Cash Flow
Hedge
Reserve
Asset
Revaluation
Reserve
$
$
$
$
9,927,730
993,661
-
-
10,921,391
-
10,921,391
1,220,568
-
-
12,141,959
-
12,141,959
479,947
-
1,331,739
-
1,811,686
(879,009)
932,677
-
(3,419,210)
-
(2,486,533)
(772,335)
(3,258,868)
-
-
-
-
-
-
-
-
(60,812)
(60,812)
-
(60,812)
7
7
-
-
-
-
-
-
-
-
-
-
-
-
Foreign
Currency
Translation
Reserve
$
(507,269)
-
-
-
(469,401)
(976,670)
-
(976,670)
-
-
-
(215,159)
(1,191,829)
-
(1,191,829)
Foreign
Currency
Translation
Reserve
$
-
-
-
-
-
-
-
-
-
-
-
-
General
Reserves
Option
Reserve
Minority Equity
Interests
$
$
1,319
-
-
-
58,261
59,580
-
59,580
-
-
-
53,197
112,777
-
112,777
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
90,023
-
-
99,955
-
189,978
(108,750)
81,228
125
-
(122,937)
-
(41,584)
(147,500)
(189,084)
Total
$
13,652,205
993,661
1,718,487
99,955
(411,140)
16,053,168
(987,759)
15,065,409
1,220,693
(6,266,411)
(122,937)
(41,863)
9,854,891
(919,835)
8,935,056
General
Reserves
Option
Reserve
Total
$
$
1,319
-
-
58,261
59,580
-
59,580
-
-
53,197
112,777
-
112,777
$
10,408,996
993,661
1,331,739
58,261
12,792,657
(879,009)
11,913,648
1,220,568
(3,419,210)
(7,615)
9,707,391
(772,335)
8,935,056
-
-
-
-
-
-
-
-
-
-
-
-
Consolidated Group
Balance at 1 July 2007
Shares issued during the year
Profit attributable to members of parent entity
Profit attributable to minority shareholders
Revaluation increment
Sub-total
Dividends paid or provided for
Balance at 30 June 2008
Shares issued during the year
Loss attributable to members of parent entity
Loss attributable to minority shareholders
Revaluation increment
Sub-total
Dividends paid or provided for
Balance at 30 June 2009
The accompanying notes form part of these financial statements.
Parent Entity
Balance at 1 July 2007
Shares issued during the year
Profit attributable to members of parent entity
Revaluation increment
Sub-total
Dividends paid or provided for
Balance at 30 June 2008
Shares issued during the year
Loss attributable to members of parent entity
Revaluation increment
Sub-total
Dividends paid or provided for
Balance at 30 June 2009
The accompanying notes form part of these financial statements.
10 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2009
Note
Consolidated Group
2009
2008
$
$
Parent Entity
2009
$
2008
$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Interest received
Payments to suppliers and employees
Finance costs
Income tax paid
Interest paid to Director's Loan
Net cash provided by (used in) operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment
Payment for Businesses Acquired
Sale of Shares
Purchase of property, plant and equipment
Net cash provided by (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings
Director's Loan
Advances from controlled entities
Repayment of borrowings
Dividends paid by parent entity
Net cash provided by (used in) financing activities
Net increase in cash held
Cash at beginning of financial year
Effect of exchange rates on cash holdings in foreign currencies
Cash at end of financial year
The accompanying notes form part of these financial statements.
9
9
53,586,056
528
(53,742,449)
(1,985,323)
(255,991)
(8,217)
(2,405,396)
49,736,481
2,344
(46,996,499)
(1,731,493)
(193,712)
-
817,121
Note 28
712,807
(3,266,070)
348,200
(1,729,583)
(3,934,646)
9,185,000
1,000,000
-
(1,471,521)
(745,867)
7,967,612
1,627,570
(2,581,449)
-
(953,879)
83,433
-
-
(5,231,562)
(5,148,129)
4,225,000
-
-
(681,044)
(796,321)
2,747,635
(1,583,373)
(998,076)
-
(2,581,449)
-
206
(6,099)
(8,155)
(48,537)
(8,217)
(70,802)
-
-
-
-
-
-
1,000,000
(198,339)
-
(745,867)
55,794
(15,008)
34,315
-
19,307
-
656
(1,009)
-
-
-
(353)
-
-
-
-
-
-
-
797,743
-
(796,321)
1,422
1,069
33,246
-
34,315
11 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
This financial report includes the consolidated financial statements and notes of Oldfields Holdings Limited and controlled entities (‘Consolidated Group’), and the separate financial
statements and notes of Oldfields Holdings Limited as an individual parent entity (‘Parent Entity’).
Note 1
Statement of Significant Accounting Policies
Basis of Preparation
The financial report is a general purpose financial report that has 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.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions,
events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards.
Material accounting policies adopted in the preparation of this financial report are presented below and have been consistently applied unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets,
financial assets and financial liabilities.
(a)
Financial Report Prepared as a Going Concern Basis
The financial statement have been prepared on the going concern basis of accounting, which assumes the continuity of normal business activities and the realisation of assets and
settlement of liabilities in the ordinary course of business.
The net loss after income tax for the consolidated entity for the financial year ended 30 June 2009 was $6,266,411
The directors have undertaken to raise capital through a variety of capital raising opportunities. The directors have received various advice to indicate that there would be no reason
that the capital raising would not be successful. Based on capital raising, projected budgets, cashflow and forecasts these financial statements are prepared on the basis of a going
concern.
(b)
Principles of Consolidation
A controlled entity is any entity over which Oldfields Holdings Limited has the power to govern the financial and operating policies so as to obtain benefits from its activities. In
assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are considered.
A list of controlled entities is contained in Note Note16 to the financial statements.
As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated financial statements as well as their results for the year then
ended. Where controlled entities have entered (left) the consolidated group during the year, their operating results have been included (excluded) from the date control was obtained
(ceased).
All inter-group balances and transactions between entities in the consolidated group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting
policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity.
Minority interests, being that portion of the profit or loss and net assets of subsidiaries attributable to equity interests held by persons outside the group, are shown separately within
the Equity section of the consolidated Balance Sheet and in the consolidated Income Statement.
(c)
Business Combinations
Business combinations occur where control over another business is obtained and results in the consolidation of its assets and liabilities. All business combinations, including those
involving entities under common control, are accounted for by applying the purchase method.
The purchase method requires an acquirer of the business to be identified and for the cost of the acquisition and fair values of identifiable assets, liabilities and contingent liabilities to
be determined as at acquisition date, being the date that control is obtained. Cost is determined as the aggregate of fair values of assets given, equity issued and liabilities assumed
in exchange for control together with costs directly attributable to the business combination.
Goodwill is recognised initially at the excess of cost over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If the fair
value of the acquirer’s interest is greater than cost, the surplus is immediately recognised in profit or loss.
(d)
Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at
reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged
directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax basis of assets and liabilities and their carrying amounts in the financial
statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the
initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates
enacted or substantively enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related
asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against
which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the
timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the
respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation
and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
(e)
Tax Consolidation
Oldfields Holdings Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under tax consolidation legislation. Each entity in the group
recognises its own current and deferred tax assets and liabilities. Such taxes are measured using the ‘stand-alone taxpayer’ approach to allocation. Current tax liabilities (assets) and
deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are immediately transferred to the head entity.
12 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
The group notified the Australian Tax Office that it had formed an income tax consolidated group to apply from 1 July, 2003. The tax consolidated group has entered a tax funding
arrangement whereby each company in the group contributes to the income tax payable by the group in proportion to their contribution to the group’s taxable income. Differences
between the amounts of net tax assets and liabilities derecognised and the net amounts recognised pursuant to the funding arrangement are recognised as either a contribution by,
or distribution to the head entity.
(f)
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct materials, direct labour and an appropriate portion of
variable and fixed overheads. Overheads are applied on the basis of normal operating capacity. Costs are assigned on the basis of weighted average costs.
(g)
Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses.
(h)
Property
Freehold land and buildings are shown at their fair value (being the amount for which an asset could be exchanged between knowledgable willing parties in an arms length
transaction), based on periodic, but at least triennial, valuations by external independent valuers, less subsequent depreciation for buildings.
Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation reserve in equity. Decreases that offset previous increases of the same
asset are charged against fair value reserves directly in equity; all other decreases are charged to the income statement. Each year the difference between depreciation based on the
revalued carrying amount of the asset charged to the income statement and depreciation based on the assets original cost is transferred from the revaluation reserve to retained
earnings.
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the
asset.
(i)
Plant and equipment
Plant and equipment are measured on the cost basis. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable
amount from these assets. The recoverable amount is assessed on the basis of an independent valuation performed.
The cost of fixed assets constructed within the consolidated group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable
overheads. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the
financial period in which they are incurred.
(j)
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised lease assets, but excluding freehold land, is depreciated on a straight-line basis over the asset's useful
life to the consolidated group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of
the lease or the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Buildings
Leasehold improvements
Plant and equipment
Leased plant and equipment
Depreciation Rate
2%
4-5%
5-50%
18-20%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement. When revalued
assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.
(k)
Investment Property
Investment property is held to generate long-term rental yields. All tenant leases are on an arm's length basis. Investment property is carried at fair value, determined annually by
independent valuers. Changes to fair value are recorded in the income statement as other income/expense.
(l)
Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that are transferred to entities in the
consolidated group are classified as finance leases. Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the
leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease
liability and the lease interest expense for the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term. Lease payments for operating leases, where substantially all
the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred. Lease incentives under operating leases are recognised as a liability
and amortised on a straight-line basis over the life of the lease term.
(m)
Financial Instruments
Initial Recognition and Measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions of the instrument. For financial assets, this is equivalent to the
date that the Company commits itself to either purchase or sell the asset (i.e. trade date accounting is adopted for financial assets that are delivered within time frames established by
marketplace convention).
Financial instruments are initially measured at fair value plus transactions costs except where the instrument is not classified ‘at fair value through profit or loss’ in which case
transaction costs are expensed to profit or loss immediately. Financial instruments are classified and measured as set out below.
Classification and Subsequent Measurement
(i)
Financial assets at fair value through profit or loss
Financial assets are classified at ‘fair value through profit or loss’ when they are either held for trading for the purpose of short term profit taking, where they are derivatives not
held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is
managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently
measured at fair value with changes in carrying value being included in profit or loss in the period in which they arise.
(ii)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at
amortised cost using the effective interest rate method.
13 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
(iii)
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the group’s intention to hold these
investments to maturity. They are subsequently measured at amortised cost using the effective rate method.
(iv)
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be classified into other categories of financial assets due to their nature, or
they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable
payments.
(v)
Financial Liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective rate method.
(vi) Cash flow Hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is deferred to a hedge reserve in equity. The gain or loss
relating to the ineffective portion is recognised immediately in the income statement
Amounts accumulated in the hedge reserve in equity are transferred to the income statement in the periods when the hedged item will affect profit and loss.
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent
arm's length transactions, reference to similar instruments and option pricing models.
Impairment
At each reporting date, the group assess whether there is objective evidence that a financial instrument has been impaired. In the case of available-for sale financial instruments, a
prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the income statement.
(n)
Impairment of Assets
At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired.
If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the assets carrying value.
Any excess of the assets carrying value over its recoverable amount is expensed to the income statement.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset
belongs.
(o)
Investments in Associates
Investments in associate companies are recognised in the financial statements by applying the equity method of accounting. The equity method of accounting recognised the group’s
share of post acquisition reserves of its associates.
The consolidated group’s interests in joint venture entities are brought to account using the equity method of accounting in the consolidated financial statements. The parent entity’s
interests in joint venture entities are brought to account using the cost method.
(p)
Intangibles
Goodwill
Goodwill and goodwill on consolidation are initially recorded at the amount by which the purchase price for a business combination exceeds the fair value attributed to the interest in
the net fair value of identifiable assets, liabilities and contingent liabilities at date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on
acquisition of associates is included in investments in associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and
losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Patents and trademarks
Patents and trademarks are recognised at cost of acquisition. Patents and trademarks have a finite life and are carried at cost less any accumulated amortisation and any impairment
losses. Patents and trademarks are amortised over their useful life ranging from 5 to 10 years.
Research and development
Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies identify that
the project will deliver future economic benefits and these benefits can be measured reliably.
Development costs have a finite life and are amortised on a systematic basis matched to the future economic benefits over the useful life of the project.
(q)
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial
statements are presented in Australian dollars which is the parent entity's functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are
translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary
items measured at fair value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the income statement, except where deferred in equity as a qualifying cash flow or net investment
hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the
exchange difference is recognised in the income statement.
Group companies
The financial results and position of foreign operations whose functional currency is different from the group’s presentation currency are translated as follows:
—
—
—
assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the groups foreign currency translation reserve in the balance sheet. These differences are
recognised in the income statement in the period in which the operation is disposed.
(r)
Employee Benefits
14 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
Provision is made for the company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled
within one year have been measured at the amounts expected to be paid when the liability is settled.
Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. Those cashflows are
discounted using market yields on national government bonds with terms to maturity that match the expected timing of cashflows.
(s)
Equity-settled compensation
The group operates equity-settled share-based payment employee share and option schemes. The fair value of the equity to which employees become entitled is measured at grant
date and recognised as an expense over the vesting period, with a corresponding increase to an equity account. The fair value of shares is ascertained as the market bid price. The
fair value of options is ascertained using a Black-Scholes pricing model which incorporates all market vesting conditions. The number of shares and options expected to vest is
reviewed and adjusted at each reporting date such that the amount recognised for services received as consideration for the equity instruments granted shall be based on the
number of equity instruments that eventually vest.
(t)
Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and
that outflow can be reliably measured.
(u)
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank
overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.
(v)
Revenue and Other Income
Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. Any consideration
deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the
amount initially recognised and the amount ultimately received is interest revenue.
Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership of the goods and the cessation
of all involvement in those goods.
Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets is the rate inherent in the instrument. Dividend revenue is recognised
when the right to receive a dividend has been established.
Dividend received from associates and joint venture entities are accounted for in accordance with the equity method of accounting.
Revenue relating to construction activities is detailed at Note 1(e).
Revenue recognition relating to the provision of services is determined with reference to the stage of completion of the transaction at reporting date and where outcome of the
contract can be estimated reliably. Stage of completion is determined with reference to the services performed to date as a percentage of total anticipated services to be performed.
Where the outcome cannot be estimated reliably, revenue is recognised only to the extent that related expenditure is recoverable.
Investment property revenue is recognised on a straight-line basis over the period of lease term so as to reflect a constant periodic rate of return on the net investment.
All revenue is stated net of the amount of goods and services tax (GST).
(w)
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale,
are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in income in the period in which they are incurred.
(x)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Tax Office. In these circumstances
the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the balance sheet are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash
flows.
(y)
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.
(z)
Critical Accounting Estimates and Judgments
The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a
reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group.
Key Estimates
(a) Impairment
The group assesses impairment at each reporting date by evaluating conditions and events specific to the Group that may be indicative of impairment triggers. Recoverable
amounts of relevant assets are reassessed using value-in-use calculations which incorporate various key assumptions. Please see Note 22 "Intangibles Assets" for additional
details.
The following are the major assumptions used in the value-in-use calculations:
Wholesale Segment
Scaffolding Segment
Investments & Associates
Growth Rate
Initial
5%
5% to 15%
5% to 10%
Discount Rate
12%
12%
10% & 15%
Period
5 Yrs
5 Yrs
5 Yrs
New Accounting Standards for Application in Future Periods
The AASB has issued new, revised and amended standards and interpretations that have mandatory application dates for future reporting periods. The Group has decided against
early adoption of these standards. A discussion of those future requirements and their impact on the Group follows:
15 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
-
-
-
-
-
-
-
-
-
-
-
-
AASB 3: Business Combinations, AASB 127: Consolidated and Separate Financial Statements, AASB 2008-3: Amendments to Australian Accounting Standards arising from
AASB 3 and AASB 127 [AASBs 1,2,4,5,7,101,107, 112, 114, 116, 121, 128, 131, 132, 133, 134, 136, 137, 138 & 139 and Interpretations 9 & 107] (applicable for annual
reporting periods commencing from 1 July 2009) and AASB 2008-7: Amendments to Australian Accounting Standards – Cost of an Investment in a Subsidiary, Jointly Controlled
Entity or Associate [AASB 1, AASB 118, AASB 121, AASB 127 & AASB 136] (applicable for annual reporting periods commencing from 1 January 2009). These standards are
applicable prospectively and so will only affect relevant transactions and consolidations occurring from the date of application. In this regard, its impact on the Group will be
unable to be determined. The following changes to accounting requirements are included:
-
-
-
-
-
-
-
acquisition costs incurred in a business combination will no longer be recognised in goodwill but will be expensed unless the cost relates to issuing debt or equity securities;
contingent consideration will be measured at fair value at the acquisition date and may only be provisionally accounted for during a period of 12 months after acquisition;
a gain or loss of control will require the previous ownership interests to be remeasured to their fair value;
there shall be no gain or loss from transactions affecting a parent’s ownership interest of a subsidiary with all transactions required to be accounted for through equity (this
will not represent a change to the Group’s policy);
dividends declared out of pre-acquisition profits will not be deducted from the cost of an investment but will be recognised as income;
Impairment of investments in subsidiaries, joint ventures and associates shall be considered when a dividend is paid by the respective investee; and
where there is, in substance, no change to Group interests, parent entities inserted above existing groups shall measure the cost of its investments at the carrying amount
of its share of the equity items shown in the balance sheet of the original parent at the date of reorganisation.
The Group will need to determine whether to maintain its present accounting policy of calculating goodwill acquired based on the parent entity’s share of net assets acquired or
change its policy so goodwill recognised also reflects that of the non-controlling interest.
AASB 8: Operating Segments and AASB 2007-3: Amendments to Australian Accounting Standards arising from AASB 8 [AASB 5, AASB 6, AASB 102, AASB 107, AASB 119,
AASB 127, AASB 134, AASB 136, AASB 1023 & AASB 1038] (applicable for annual reporting periods commencing from 1 January 2009). AASB 8 replaces AASB 114 and
requires identification of operating segments on the basis of internal reports that are regularly reviewed by the Group’s Board for the purposes of decision making. While the
impact of this standard cannot be assessed at this stage, there is the potential for more segments to be identified. Given the lower economic levels at which segments may be
defined, and the fact that cash generating units cannot be bigger than operating segments, impairment calculations may be affected. Management does not presently believe
impairment will result however.
AASB 101: Presentation of Financial Statements, AASB 2007-8: Amendments to Australian Accounting Standards arising from AASB 101, and AASB 2007-10: Further
Amendments to Australian Accounting Standards arising from AASB 101 (all applicable to annual reporting periods commencing from 1 January 2009). The revised AASB 101
and amendments supersede the previous AASB 101 and redefines the composition of financial statements including the inclusion of a statement of comprehensive income.
There will be no measurement or recognition impact on the Group. If an entity has made a prior period adjustment or reclassification, a third balance sheet as at the beginning of
the comparative period will be required.
AASB 123: Borrowing Costs and AASB 2007-6: Amendments to Australian Accounting Standards arising from AASB 123 [AASB 1, AASB 101, AASB 107, AASB 111, AASB 116
& AASB 138 and Interpretations 1 & 12] (applicable for annual reporting periods commencing from 1 January 2009). The revised AASB 123 has removed the option to expense
all borrowing costs and will therefore require the capitalisation of all borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset.
Management has determined that there will be no effect on the Group as a policy of capitalising qualifying borrowing costs has been maintained by the Group.
AASB 2008-1: Amendments to Australian Accounting Standard – Share-based Payments: Vesting Conditions and Cancellations [AASB 2] (applicable for annual reporting
periods commencing from 1 January 2009). This amendment to AASB 2 clarifies that vesting conditions consist of service and performance conditions only. Other elements of a
share-based payment transaction should therefore be considered for the purposes of determining fair value. Cancellations are also required to be treated in the same manner
whether cancelled by the entity or by another party.
AASB 2008-2: Amendments to Australian Accounting Standards – Puttable Financial Instruments and Obligations Arising on Liquidation [AASB 7, AASB 101, AASB 132 & AASB
139 & Interpretation 2] (applicable for annual reporting periods commencing from 1 January 2009). These amendments introduce an exception to the definition of a financial
liability to classify as equity instruments certain puttable financial instruments and certain other financial instruments that impose an obligation to deliver a pro-rata share of net
assets only upon liquidation.
AASB 2008-5: Amendments to Australian Accounting Standards arising from the Annual Improvements Project (July 2008) (AASB 2008-5) and AASB 2008-6: Further
Amendments to Australian Accounting Standards arising from the Annual Improvements Project (July 2008) (AASB 2008-6) detail numerous non-urgent but necessary changes
to accounting standards arising from the IASB’s annual improvements project. No changes are expected to materially affect the Group.
AASB 2008-8: Amendments to Australian Accounting Standards – Eligible Hedged Items [AASB 139] (applicable for annual reporting periods commencing from 1 July 2009).
This amendment clarifies how the principles that determine whether a hedged risk or portion of cash flows is eligible for designation as a hedged item should be applied in
particular situations and is not expected to materially affect the Group.
AASB 2008-13: Amendments to Australian Accounting Standards arising from AASB Interpretation 17 – Distributions of Non-cash Assets to Owners [AASB 5 & AASB 110]
(applicable for annual reporting periods commencing from 1 July 2009). This amendment requires that non-current assets held for distribution to owners to be measured at the
lower of carrying value and fair value less costs to distribute.
AASB Interpretation 15: Agreements for the Construction of Real Estate (applicable for annual reporting periods commencing from 1 January 2009). Under the interpretation,
agreements for the construction of real estate shall be accounted for in accordance with AASB 111 where the agreement meets the definition of ‘construction contract’ per AASB
111 and when the significant risks and rewards of ownership of the work in progress transfer to the buyer continuously as construction progresses. Where the recognition
requirements in relation to construction are satisfied but the agreement does not meet the definition of ‘construction contract’, revenue is to be accounted for in accordance with
AASB 118. Management does not believe that this will represent a change of policy to the Group.
AASB Interpretation 16: Hedges of a Net Investment in a Foreign Operation (applicable for annual reporting periods commencing from 1 October 2008). Interpretation 16 applies
to entities that hedge foreign currency risk arising from net investments in foreign operations and that want to adopt hedge accounting. The interpretation provides clarifying
guidance on several issues in accounting for the hedge of a net investment in a foreign operation and is not expected to impact the Group.
AASB Interpretation 17: Distributions of Non-cash Assets to Owners (applicable for annual reporting periods commencing from 1 July 2009). This guidance applies prospectively
only and clarifies that non-cash dividends payable should be measured at the fair value of the net assets to be distributed where the difference between the fair value and
carrying value of the assets is recognised in profit or loss.
The Group does not anticipate early adoption of any of the above reporting requirements and does not expect these requirements to have any material effect on the Group’s financial
statements.
Note 2
Revenue and Other Income
16 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
Sales Revenue
—
sale of goods
Total Sales Revenue
Other Revenue
—
—
—
—
—
—
dividends received
interest received
rental revenue for property investment
Rental revenue of equipment
Commission
Advertising Rebate
Total Other Revenue
Total Sales Revenue and Other Revenue
Other Income
—
—
—
—
—
gain on disposal of property, plant and equipment
gain on revaluation of investment property
Investment Loan Write Back
Gain on loan
other income
Total Other Income
Dividend revenue from:
—
Total dividend revenue
wholly-owned subsidiaries
(a)
(b)
Note
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
2(a)
2(b)
31,455,278
31,455,278
24,361,804
24,361,804
-
11,235
233,141
14,430,274
1,435
-
14,676,085
46,131,363
-
712,807
325,000
-
120,092
1,157,899
-
163,846
187,459
16,359,587
829
18,175
16,729,896
41,091,700
83,433
339,280
-
-
48,520
471,233
-
-
140,000
8,194
-
-
-
-
148,194
148,194
-
-
-
-
-
-
-
-
1,390,000
-
-
-
-
-
1,390,000
1,390,000
-
-
-
-
-
-
-
-
-
-
140,000
140,000
1,390,000
1,390,000
Interest revenue from:
—
—
Total interest revenue on financial assets not at fair value through profit or loss
wholly-owned controlled entities
other persons
-
11,235
11,235
162,000
1,846
163,846
-
8,194
8,194
Note 3
Profit/ (Loss) for the Year
(a)
Expenses
Cost of sales
Amortisation & Depreciation
Impairment of Good Will
Foreign Currency Translation Losses
Bad and doubtful debts:
Interest expense:
—
—
—
—
Total interest expense
Wholly-owned controlled entities
Partly owned subsidiaries
Directors
Other persons
Note 4
Income Tax Expense
Consolidated Group
Parent Entity
2009
$
26,697,123
4,027,937
(73,648)
211,197
-
162,000
8,155
1,815,168
1,985,323
2008
$
18,241,560
1,687,001
-
(476,742)
-
-
162,598
-
1,633,127
1,795,725
2009
$
2008
$
-
-
-
-
-
-
-
8,155
-
8,155
-
-
-
-
-
-
-
-
-
-
-
-
-
(a)
(b)
The components of tax expense comprise:
Current tax
Deferred tax
Deferred Tax Assets Not Recognised
Reversal of Deferred Tax Liability Previously Recognised
Recoupment of prior year tax losses
Under provision in respect of prior years
consolidated group
parent entity
The prima facie tax on profit from ordinary activities before
income tax is reconciled to the income tax as follows:
—
—
Add:
Tax effect of:
—
—
—
—
—
—
—
—
Impairment of Intercompany Loan
other non-allowable items
write-downs to recoverable amounts
share options expensed during year
under provision for income tax in prior year
Goodwill Amortisation
Intercompany Dividend
Rebatable Fully Franked Dividends
Less:
Tax effect of:
—
—
—
—
—
Difference in Tax Rate
Investment Allowance
Not Tax Effect Overseas Income / Loss
Current Year DTA Not Recognised
Reversal Of DTL Previously Recognised
Note
Note 23
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
276,878
(2,079,688)
2,079,688
(22,632)
672,435
121,522
80,559
334,805
23,145
817,102
351
(351)
-
3,941
(3,941)
-
(1,816,363)
790,664
(1,025,763)
399,522
-
13,467
(97,500)
17,360
80,559
47,949
-
-
(1,754,528)
(18,475)
(8,202)
58,955
2,079,688
(22,633)
101,168
-
23,145
-
-
(97,875)
817,102
1,050,754
-
-
17,360
-
-
(42,000)
-
351
17,478
-
-
-
-
(417,000)
-
-
-
-
-
-
-
-
-
-
(351)
-
-
-
-
-
-
-
-
-
-
-5.3%
31.0%
0.0%
0.0%
Recoupment of prior year tax losses not previously brought to account
Income tax attributable to entity
-
334,805
-
817,102
17 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
DTA not Brought to Account
(c)
DTA on Loss
DTA Temporary Difference
Note 5
Interests of Key Management Personnel (KMP)
KMP Options and Rights Holdings
908,248
1,148,808
2,057,056
-
-
-
3,790
(4,141)
(351)
-
-
-
The number of options over ordinary shares in Oldfields Holdings Limited held during the financial year by each KMP of the Group is as follows:-
30 June 2009
John Roy Westwood
Anthony Mankarios
Thomas D J Love
Christopher C Hext
Kenneth E Holloway
Raymond J Titman
Gary J Guild
30 June 2008
John Roy Westwood
Anthony Mankarios
Thomas D J Love
Christopher C Hext
Kenneth E Holloway
Raymond J Titman
Gary J Guild
KMP Shareholdings
Balance at
beginning of year
Balance at end of
year
150,000
500,000
50,000
50,000
50,000
150,000
50,000
1,000,000
150,000
500,000
50,000
50,000
50,000
150,000
50,000
1,000,000
Balance at
beginning of year
Balance at end of
year
150,000
500,000
50,000
50,000
50,000
150,000
50,000
1,000,000
150,000
500,000
50,000
50,000
50,000
150,000
50,000
1,000,000
The number of ordinary shares in Oldfields Holdings Limited held during the financial year by each KMP of the Group is as follows:-
Granted as
remuneration
during the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
beginning of year
3,410,000
2,074,497
94,800
810,000
385,544
11,660
7,342
7,270
6,801,113
Balance at
beginning of year
2,930,000
1,946,497
94,800
810,000
-
10,901
6,864
7,270
5,806,332
30 June 2009
John Roy Westwood
Anthony Mankarios
Thomas D J Love
Christopher C Hext
Maurie W Abbott
Kenneth Holloway
Raymond J Titman
Gary Guild
30 June 2008
John Roy Westwood
Anthony Mankarios
Thomas D J Love
Christopher C Hext
Maurie W Abbott
Kenneth Holloway
Raymond J Titman
Gary Guild
* Net Change refers to shares purchased or sold during the financial year.
Note 6
Auditors’ Remuneration
Remuneration of the auditor of the parent entity for:
auditing or reviewing the financial report
taxation services
due diligence services
taxation services provided by related practice of auditor
Accounting Services
—
—
—
—
—
Remuneration of other auditors of subsidiaries for:
—
auditing or reviewing the financial report of subsidiaries
Note 7
Dividends
Granted as
remuneration
during the year
Issued on exercise
of options during
the year
Other changes
during the year
-
-
-
-
-
-
-
-
-
50,000
13,533
-
20,000
579,000
1,005
633
627
664,798
Balance at end
of year
3,460,000
2,088,030
94,800
830,000
964,544
12,665
7,975
7,897
7,465,911
Issued on exercise
of options during
the year
-
-
-
-
-
-
-
-
-
Other changes
during the year *
480,000
128,000
-
-
385,544
759
478
-
994,781
Balance at end
of year
3,410,000
2,074,497
94,800
810,000
385,544
11,660
7,342
7,270
6,801,113
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
146,500
46,400
19,000
-
60,555
75,000
11,500
17,000
4,450
-
13,650
2,000
-
-
-
-
-
-
-
-
-
-
-
-
18 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
Distributions paid
2009 Year Interim fully franked ordinary dividend of 1 cent per share paid
16th June, 2009 (2008 : 4.0 cents 50% franked per share)
2008 final unfranked dividend of 4.5 cents per share paid in December 2008
(a)
No 2009 year final ordinary dividend is proposed. (Dec 2008 $577618
at 4.5 cents per share partially franked at the tax rate of 30%)
(b)
Balance of franking account at year end adjusted for franking
credits arising from:
—
dividends recognised as receivables, and franking debits arising
from payment of proposed dividends, and franking credits that
may be prevented from distribution in subsequent financial years
Subsequent to year-end, the franking account would be reduced by the
proposed dividend reflected per (a) as follows:
Note 8
Earnings per Share
(a)
Reconciliation of earnings to profit or loss
Profit
Profit attributable to minority equity interest
Redeemable and converting preference share dividends
Dividends on converting preference shares
Earnings used in the calculation of dilutive EPS
(b)
Reconciliation of earnings to profit or loss from continuing operations
Profit from continuing operations
Profit attributable to minority equity interest in respect of continuing operations
Earnings used to calculate basic EPS from continuing operations
Earnings used in the calculation of dilutive EPS from continuing operations
Reconciliation of earnings to profit or loss from discontinuing operations
Profit from discontinuing operations
Profit attributable to minority equity interest
Earnings used to calculated basic EPS from discontinuing operations
(c)
(d)
Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS
Weighted average number of ordinary shares outstanding during the year used in calculating dilutive EPS
(e)
Diluted earnings per share is not reflected for continuing operations as the
result is anti-dilutive in nature.
Note 9
Cash and Cash Equivalents
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
130,154
495,040
130,154
495,040
642,181
772,335
383,969
879,009
642,181
772,335
383,969
879,009
171,579
97,309
210,508
102,475
-
171,579
(74,265)
23,044
-
210,508
(74,265)
28,210
Consolidated Group
2008
$
2009
$
(6,666,100)
122,937
1,989,065
(99,956)
(6,543,163)
1,889,109
(6,666,100)
122,937
(6,543,163)
(6,543,163)
276,752
-
276,752
-
-
-
No.
No.
14,171,667
12,602,795
14,171,667
12,602,795
Cash at bank and in hand
Reconciliation of cash
Cash at the end of the financial year as shown in the cash flow statement is reconciled to items
in the balance sheet as follows:
Cash and cash equivalents
Bank overdrafts
Note 10
Trade and Other Receivables
CURRENT
Trade receivables
Provision for impairment
Amounts receivable from:
—
—
—
—
wholly-owned subsidiaries
associated companies
Provision for Impairment
Other receivables
Note
Consolidated Group
Parent Entity
Note 32
Note 22
2009
$
588,917
588,917
2008
$
295,567
295,567
2009
$
19,307
19,307
2008
$
34,315
34,315
588,917
(1,542,796)
(953,879)
295,567
(2,877,116)
(2,581,549)
19,307
-
19,307
34,315
-
34,315
Note
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
10e
10d(i)
4,865,305
(159,256)
4,706,049
-
603,259
-
783,894
5,266,666
(70,997)
5,195,669
-
-
-
-
-
-
-
206,804
-
943,131
7,328,173
-
(3,502,513)
6,233
5,264,483
-
-
-
19 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
Total current trade and other receivables
6,093,202
6,345,604
3,831,893
5,264,483
NON-CURRENT
Amounts Receivable from Associated Companies
Total non-current trade and other receivables
125,000
125,000
-
-
-
-
-
-
(a)
Provision For Impairment of Receivables
Current trade and term receivables are non-interest bearing loans and generally on 30 day terms. Non-current trade and term receivables are assessed for recoverability based on
the underlying terms of the contract. A provision for impairment is recognised when their is an objective evidence that an individual trade or term receivable is impaired. These
amounts have been included in the other expenses item.
There are no balances within trade and other receivables that contain assets that are not impaired and are past due. It is expected these balances will be received when due.
Impaired assets are provided for in full.
Credit risk - Trade and Other Receivables
The Group has no significant concentration of credit risk with respect to any single counterparty or group of counterparties other than those receivables specifically provided for and
mentioned within Note 10. The main source of credit risk to the Group is considered to relate to the class of assets described as Trade and Other Receivables. The company hold insurance
policies for select Trade Debtors.
The following table details the Group’s trade and other receivables exposed to credit risk (prior to collateral and other credit enhancements) with ageing analysis and impairment provided
for thereon. Amounts are considered as ‘past due’ when the debt has not been settled with the terms and conditions agreed between the Group and the customer or counterparty to the
transaction. Receivables that are past due are assessed for impairment by ascertaining solvency of the debtors and are provided for where there are specific circumstances indicating that
the debt may not be fully repaid to the Group.
The balances of receivables that remain within initial trade terms (as detailed in the table) are considered to be of high credit quality.
Consolidated Group
2009
Trade and term receivables
Other receivables
Total
Consolidated Group
2008
Trade and term receivables
Other receivables
Total
Gross Amount
$
4,865,305
1,387,153
6,252,458
Past due and
impaired
$
159,256
<30
$
159,256
-
Past due but not impaired
(days overdue)
31-60
$
1,393,328
39,139
1,432,467
61-90
$
494,475
40,707
535,182
>90
$
774,598
226,345
1,000,943
Gross Amount
$
5,266,666
1,149,935
6,416,601
Past due and
impaired
$
70,977
70,977
Past due but not impaired
(days overdue)
<30
$
31-60
$
1,513,984
61-90
$
508,295
>90
$
295,492
-
1,513,984
508,295
295,492
Within initial
trade terms
$
2,043,648
1,080,962
3,124,610
Within initial
trade terms
$
2,877,918
1,149,935
4,027,853
Neither the Group nor parent entity holds any financial assets with terms that have been renegotiated, but which would otherwise be past due or impaired.
(b)
Financial Assets classified as loans and receivables
Trade and other Receivables
— Total Current
— Total Non-Current
Financial Assets
Note 11
Inventories
CURRENT
At cost
Raw materials and stores
Work in progress
Finished goods
Less Provisions
Note
Note 32
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
6,093,202
125,000
6,218,202
6,345,604
-
6,345,604
3,831,893
-
3,831,893
5,264,483
-
5,264,483
Note
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
2,702,991
1,094,650
5,903,837
(63,342)
9,638,136
1,634,037
1,752,018
4,931,258
(10,765)
8,306,548
-
-
-
-
-
-
-
-
-
-
-
-
Note12
Investments Accounted for Using the Equity Method
Note
Consolidated Group
Parent Entity
Associated companies
Note 13a
Note 13
Associated Companies
2009
$
2,094,525
2,094,525
2008
$
1,885,803
1,885,803
2009
$
2008
$
-
-
Interests are held in the following associated companies
Name
Principal Activities
Country of
Incorporation
Shares
Ownership Interest
Carrying Amount of Investment
Unlisted:
Tangshan Hengfeng
PT Ace Oldfields
Brisbane Garden Sheds
Scaffold Mgt Systems
Enduring Enterprises
Paint Brush Manufacturer
Paint Brush Manufacturer
Garden Shed Supplier
Scaffold Supplier
Hardware Products Provider
China
Indonesia
Australia
Australia
Singapore
Ordinary
Ordinary
Ordinary
Ord/Pref
Ordinary
2009
%
2008
%
47.50%
49.00%
50.00%
34.60%
49.00%
47.50%
49.00%
50.00%
0.00%
49.00%
$
1,189,655
747,605
19,887
18,710
118,668
2,094,525
2009
2008
$
799,061
900,716
21,722
-
164,304
1,885,803
(a)
Movements during the Year in Equity Accounted Investments in Associated
Companies
Note
Consolidated Group
Parent Entity
20 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
Movements during the Year in Equity Accounted Investments in Associated
Companies
Balance at beginning of the financial year
Add: New investments during the year
Share of associated company’s profit after income tax
Foreign currency translation loss
Transferred to controlled entity
Dividends Received
Balance at end of the financial year
(b)
Summarised Presentation of Aggregate Assets, Liabilities and
Performance of Associates
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Revenues
Profit after income tax of associates
Note 13b
2009
$
1,885,803
-
145,616
63,106
-
-
2,094,525
3,819,478
1,977,703
5,797,181
2,686,934
1,139,210
3,826,144
1,971,037
7,031,241
145,616
2008
$
2,096,561
427,344
(197,199)
(398,429)
(8,399)
(34,075)
1,885,803
3,518,608
1,467,216
4,985,824
2,131,753
973,959
3,105,712
1,880,112
6,772,781
(197,199)
2009
$
2008
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The recoverable value of the cash-generating unit above is determined based on value-in-use calculations. Value-in-use is calculated based on the present value of cash flow
projections over a five year period. The cash flows are discounted at a rate of 12% per annum which incorporates an appropriate risk premium and a 20% growth rate on local cash
inflows and 2% growth rate on overseas cash inflows.
Management has based the value –in-use calculation on budgets for each reporting segment. These budgets incorporate management’s best estimates of projected revenues using
growth rates based on historical experience, anticipated market growth and the expected effect of Company initiatives.
Tangshan Hengfeng ceased operations on 31/12/2008. Details of the groups interest in Tangshan Hengfeng is disclosed below
(a)
Movements during the Year in Equity Accounted Investments in Associated
Companies
Balance at beginning of the financial year
Share of associated company’s profit after income tax
Foreign currency translation loss
Transferred to controlled entity
Balance at end of the financial year
(b)
Summarised Presentation of Aggregate Assets, Liabilities and
Performance of Associates
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Revenues
Profit after income tax of associates
Note
Consolidated Group
Parent Entity
2009
$
799,061
276,752
113,842
-
1,189,655
131,545
1,368,645
1,500,190
310,535
-
310,535
1,189,655
117,597
276,752
2008
$
788,481
(170,623)
181,203
799,061
155,562
912,051
1,067,613
268,552
-
268,552
799,061
246,681
(170,623)
2009
$
2008
$
-
-
-
-
-
-
-
-
-
-
-
-
-
Tangshan ceased operations in December 2008. The carrying value of Tangshan amounting $1,189,655 is based on an open market valuation performed by Tangshan Zhongyuan
Chengxin Capital Valuation Office, a Chinese qualified independent valuer, on 31 May 2008. Based on the valuation, the group’s share of the market value of land, property, plant and
equipment at that date was $1,569,578.
Note14
Derivatives
CURRENT LIABILITIES
Forward exchange contracts
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
60,812
60,812
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Forward exchange contracts are used to hedge cash flow risk associated with future transactions. Gains and losses arising from changes in the fair value of derivatives are initially
recognised directly in a hedge reserve in the equity section of the balance sheet. At the date of the transaction, amounts included in the hedge reserve are transferred from equity and
included in either the income statement or the cost of assets. The statement of changes in equity includes transfers to and from the hedge reserve.
Note15
Other Financial Assets
NON CURRENT
Available-for-sale financial assets
(a)
Available-for-sale financial assets comprise:
NON CURRENT
Unlisted investments, at cost
—
—
Total non-current available-for-sale financial assets
shares in controlled entities
shares in associates
Available for sale financial assets comprise investments in the ordinary
issued capital of various entities. There are no fixed returns or fixed maturity
date attached to these investments.
Note
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
Note15a
313,314
313,314
83,115
83,115
7,209,276
7,209,276
7,209,176
7,209,176
Note 32
-
313,314
313,314
-
83,115
83,115
7,209,276
-
7,209,276
7,209,176
-
7,209,176
21
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
The fair value of unlisted available for sale financial assets cannot be
reliably measured as variability in the range of reasonable fair value
estimates is significant. As a result all unlisted investments are reflected at
cost. No intention to dispose of any unlisted available for sale
financial assets existed as at 30th June 2009
Note16
Controlled Entities
(a)
Controlled Entities Consolidated
Country of Incorporation
Percentage Owned (%)*
2009
2008
Subsidiaries of Oldfields Holdings Limited:
Oldfields Pty Limited
Oldfields Access Pty Limited
Oldfields Administration Pty Limited
Oldfields International Pty Limited
Advantage Contracting Pty Limited
Advantage Scaffolding Pty Limited
Shed Holdings Pty Limited
Advance Scaffold Solutions Pty Limited
NOST Investments Pty limited
Subsidiary of Oldfields Pty Limited:
Midco Pty Limited
Subsidiary of Oldfields Access Pty Limited:
Adelaide Scaffold Solutions Pty Limited
Subsidiary of Oldfields Administration Pty Limited:
National Office Service Trust
Subsidiary of NOST Investments Pty Limited:
H & O Products Pty Limited
Subsidiaries of Oldfields International Pty Limited:
Oldfields (NZ) Limited
Oldfields Paint Applications (NZ) Limited
Oldfields USA Incorporated
Subsidiaries of Shed Holdings Pty Limited:
Backyard Installations Pty Limited
Sheds Plus Pty Limited
Adelaide Garden Sheds Pty Limited
Subsidiaries of Advance Scaffold Solutions Pty Limited:
Scaffold The World Pty Limited
Foshan Advcorp Pty Limited
* Percentage of voting power is in proportion to ownership
(b)
Acquisition of Business
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
New Zealand
United States of America
Australia
Australia
Australia
Australia
China
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
65.00%
75.00%
100.00%
100.00%
75.00%
0.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
On 4 August, 2008 the controlled entity, H & O Products Pty Limited, 75% owned by NOST Investments Pty Limited acquired the business from H & O Pharmaceuticals Pty Limited,
thereby becoming entitled to 75% of profits earned from that date for a purchase consideration of $2,553,895.
The assets and liabilities arising from the acquisition are as follows:
Prepayments
Inventories
Property, plant and equipment
Provisions
Minority interests
Net Assets Acquired
Acquiree's
carrying amount
$
18,121
2,210,518
1,200,255
(27,530)
3,401,364
(847,569)
2,553,795
Fair value
$
18,121
2,210,518
1,200,255
(27,530)
3,401,364
(847,569)
2,553,795
(c)
"A deed of cross guarantee between Oldfields Holdings Limited and its wholly owned subsidiaries was enacted during the financial year ended June 2001. An assumption deed
including Advantage Contracting Pty Limited and Advantage Scaffolding Pty Limited was enacted during the financial year ended June 2004. An assumption deed to include Adelaide
Scaffolding Solutions Pty Limited was enacted during the financial year ended June 2005. An assumption deed to include Advance Scaffold Solutions Pty Limited and Scaffold The
World Pty Limited was enacted during the financial year ended June 2008. An assumption deed to include H & O Products Pty Limited was enacted during the year ended June 2009.
Relief has been obtained from preparing a financial report for Oldfields Pty Limited and Oldfields Access Pty Limited under ASIC Class Order 98/1418. Under the deed, Oldfields
Holdings Limited guarantees to support the liabilities and obligations of Oldfields Pty Limited and other entities listed above being members of the closed group.
Note 17
Property, Plant and Equipment
LAND AND BUILDINGS
Freehold land at:
— at cost
Total Land
Buildings at:
— at cost
Less accumulated depreciation
Total Buildings
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
1,229,758
1,229,758
2,158,622
2,158,622
1,286,553
(31,916)
1,254,637
2,338,951
(50,192)
2,288,759
-
-
-
-
-
-
-
-
-
-
22 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
Total Land and Buildings
PLANT AND EQUIPMENT
Plant and equipment:
At cost
Accumulated depreciation
Leasehold improvements
At cost
Accumulated amortisation
Total Leasehold Improvements
Capitalised leased assets
Accumulated depreciation
Total plant and equipment
Total Property, Plant and Equipment
2,484,395
4,447,381
17,516,151
(4,804,711)
12,711,440
15,800,738
(4,326,184)
11,474,554
395,152
(174,168)
220,984
300,231
(96,622)
203,609
2,790,048
(1,738,469)
1,051,579
2,326,884
(1,238,541)
1,088,343
13,763,019
12,562,897
16,468,398
17,213,887
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(a)
Movements in Carrying Amounts
Movements in carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year.
Consolidated Group:
Balance at 1 July 2007
Additions
Disposals
Depreciation expense
Balance at 30 June 2008
Additions
Disposals
Transfers to Investment Property
Transfer to Software
Revaluation increments / (decrements)
Depreciation expense
Balance at 30 June 2009
Freehold Land
$
Buildings
$
Leasehold
Improvements
$
Plant and
Equipment
$
Leased Plant
and Equipment
$
Total
$
1,279,522
879,100
-
-
2,158,622
-
(200,000)
(728,864)
-
-
1,229,758
1,167,832
1,148,189
-
(27,262)
2,288,759
1,818
(152,730)
(918,777)
61,255
(25,688)
1,254,637
179,700
57,295
-
(33,386)
203,609
73,058
(8,062)
(1,850)
-
(45,771)
220,984
9,911,523
2,952,706
(232,840)
(1,156,835)
11,474,554
3,086,370
(300,604)
(63,903)
(228,482)
(1,256,495)
12,711,440
1,034,740
456,141
(20,034)
(382,504)
1,088,343
609,460
(198,441)
-
-
(447,783)
1,051,579
13,573,317
5,493,431
(252,874)
(1,599,987)
17,213,887
3,770,706
(859,837)
(1,649,491)
(63,903)
(167,227)
(1,775,737)
16,468,398
Plant and equipment were independently valued by Pickles Auctions Pty Limited on 26 February 2009 and 8 September 2009 on an open market value basis for the following entities.
-
-
-
Oldfields Access Pty Limited and Advance Scaffold Solutions Pty Limited were valued on 26 February 2009 with a market value at $8,599,815.
Oldfields Pty Limited was valued on 8 September 2009 with a market value at $846,406.
H & O Products Pty Limited was valued on 8 September 2009 with a market value at $1,303,982.
Note 18
Investment Property
Balance at beginning of year
Acquisitions
Transfer from Land & Buildings
Accumulated Amortisation
Fair value adjustments
Balance at end of year
Consolidated Group
Parent Entity
2009
$
2,694,336
1,768,777
(111,011)
(35,202)
4,316,900
2008
$
-
2,369,573
-
-
324,763
2,694,336
2009
$
2008
$
-
-
-
-
-
-
-
-
-
-
-
-
The fair value model is applied to all investment property. Investment properties are independently revalued annually. Values are based on an active liquid market value and are performed
by a registered independent valuer.
Investment properties were independently valued at $1,600,000 and $3,300,000 by McLennan Steege Smith & Associates on 30 June 2009 and K.D. Wood Valuations (Aust) Pty Limited
on 24 July 2009 respectively on an open market value basis.
Note 19
Intangible Assets
Goodwill
Cost
Accumulated impaired losses
Net carrying value
Trademarks and licences
Cost
Accumulated amortisation and impairment
Net carrying value
Software Development costs
Cost
Accumulated amortisation and impairment
Net carrying value
Total intangibles
Consolidated Group:
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
5,067,901
(4,027,937)
1,039,964
4,828,234
-
4,828,234
221,387
(90,187)
131,200
311,351
(221,527)
89,824
202,812
(65,890)
136,922
341,548
(281,450)
60,098
1,260,988
5,025,254
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
23 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
Year ended 30 June 2008
Balance at the beginning of year
Additions
Amortisation charge
Year ended 30 June 2009
Balance at the beginning of year
Additions
Amortisation charge
Impairment losses
Closing value at 30 June 2009
Impairment Disclosures
Goodwill is allocated to cash-generating units which are based on the group’s reporting segments
Manufacturing segment
Wholesale segment
Scaffolding segment
Total
Goodwill
$
Trademarks &
Licences
$
Software
Development
Costs
$
1,367,683
3,460,551
-
4,828,234
4,828,234
239,667
-
(4,027,937)
1,039,964
153,746
13,365
(30,189)
136,922
136,922
18,575
(24,297)
-
131,200
113,286
3,637
(56,825)
60,098
60,098
63,903
(34,177)
-
89,824
2009
$
-
260,152
779,812
1,039,964
2008
$
210,035
757,170
3,861,029
4,828,234
The recoverable amount of each cash-generating unit above is determined based on value-in-use calculations. Value-in-use is calculated based on the present value of cash flow
projections over a 5-year period. The cash flows are discounted using the data in the table below.
The following assumptions were used in the value-in-use calculations:
Wholesale Segment
Scaffolding Segment
Investments & Associates
Growth Rate
Initial
5%
5% to 15%
5% to 10%
Discount Rate
12%
12%
10% & 15%
Management has based the value-in-use calculations on budgets for each reporting segment. These budgets use historical weighted average growth rates to project revenue. Costs are
calculated taking into account historical gross margins as well as estimated weighted average inflation rates over the period which are consistent with inflation rates applicable to the
locations in which the segments operate. Discount rates are pre-tax and are adjusted to incorporate risks associated with a particular segment.
Note 20
Other Assets
CURRENT
Prepayments
Note 21
Trade and Other Payables
CURRENT
Unsecured liabilities
Trade payables
Sundry payables and accrued expenses
Amounts payable to:
—
—
wholly-owned subsidiaries
other related parties
Financial liabilities as trade and other payables
Note 22
Borrowings
CURRENT
Secured liabilities
Bank overdrafts
Bank loans
Lease liability
Hire purchase liability
Total current borrowings
NON-CURRENT
Other related parties
Secured liabilities
Bank loans
Lease liability
Hire purchase liability
Total non-current borrowings
Total borrowings
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
599,776
599,776
670,122
670,122
-
-
-
-
Note
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
3,630,736
2,497,556
3,429,029
5,201,536
-
523,435
6,651,727
-
216,448
8,847,013
-
14,504
920,578
-
935,082
-
34,221
398,220
-
432,441
Note 32
Note
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
Note 22a,
Note 22a,
Note 22a,
1,542,796
4,766,003
65,026
629,981
7,003,806
7,003,806
2,877,116
803,273
66,478
497,269
4,244,136
4,244,136
-
-
-
-
-
-
2,147,320
2,147,320
299,750
299,750
1,000,000
1,000,000
13,303,355
51,064
877,199
14,231,618
16,378,938
10,414,106
119,287
864,242
11,397,635
11,697,385
-
-
-
-
1,000,000
Note 32
23,382,744
15,941,521
1,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
24 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
(a)
(b)
Total current and non-current secured liabilities:
Bank overdraft
Bank loan
Lease Liability
Other related party
Hire purchase liability
The carrying amounts of non-current assets
pledged as security are:
Investment property
Freehold land and buildings
Floating charge over assets, including listed investments at market
value
Collateral provided
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
1,542,796
18,069,358
116,090
2,147,320
1,507,180
23,382,744
2,877,116
11,217,379
185,765
299,750
1,361,511
15,941,521
-
-
-
1,000,000
-
1,000,000
4,316,900
2,484,395
2,694,336
4,447,381
34,697,861
41,499,156
35,378,519
42,520,236
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(c)
The bank overdrafts of the parent and controlled entities are secured by a floating charge over assets of the parent and controlled entities
(d)
The bank debt and mortgage loans are secured by registered first mortgage over certain freehold properties owned by the Group.
(e)
Lease liabilities are secured by a charge over the underlying leased assets. Hire purchase liabilities are secured by a charge over the hire purchased
assets.
Cash and cash equivalents
Trade receivables
Total financial assets pledged
Note 23
Tax
CURRENT
Income Tax Payable
TOTAL
NON-CURRENT
Consolidated Group
Deferred Tax Liability
Property, Plant and Equipment
- tax allowance
Tangible assets revaluation
Prepayment
Leases
Investment
Foreign exchange loss
Loss on sale of assets
Future income tax benefits attributable to tax losses
Other
Balance as at 30 June 2008
Property, Plant and Equipment
- tax allowance
Tangible assets revaluation
Prepayment
Leases
Investment
Foreign exchange loss
Loss on sale of assets
Fair Value Gain
Future income tax benefits attributable to tax losses
Other
Balance as at 30 June 2009
Deferred Tax Assets
Provisions
Transaction costs on equity issue
Fair value gain adjustments
Property, Plant and Equipment
- Impairment
Accruals
NZ Subsidiary interest expense
FITB attributable to tax losses
Other
Balance as at 30 June 2008
Provisions
Transaction costs on equity issue
Fair value gain adjustments
Property, Plant and Equipment
- Impairment
Accruals
NZ Subsidiar interest expense
Note
Consolidated Group
Parent Entity
9
10
2009
$
588,917
4,706,049
5,294,966
2008
$
295,567
5,195,669
5,491,236
2009
$
19,307
-
19,307
2008
$
34,315
-
34,315
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
370,015
370,015
474,037
474,037
134,450
134,450
166,809
166,809
Opening Balance
$
Charged to
Income
$
Charged directly
to Equity
$
Changes in Tax
Rate
$
Net off DTA
DTL
$
Closing Balance
$
164,226
178,510
21,907
27,375
27,468
419,486
140,063
280,294
12,478
27,375
23,153
19,533
20,780
-
-
(501,044)
22,632
365,045
8,866
18,450
45,336
58,160
345,665
22,519
864,041
379,702
4,923
-
-
44,963
58,160
(24,163)
(9,429)
23,153
19,533
20,780
(26,981)
2,893
(140,063)
(280,294)
(12,478)
(27,375)
(23,153)
(19,533)
(20,780)
501,044
(22,632)
14,657
(18,450)
(373)
(345,665)
(8,736)
(358,567)
(379,702)
(4,923)
(44,963)
(58,160)
101,784
101,784
-
(501,531)
(501,531)
-
-
-
(3,943)
(3,943)
-
(501,531)
(501,531)
140,063
280,294
12,478
27,375
23,153
19,533
20,780
-
(501,044)
22,632
-
-
-
-
-
-
379,702
4,923
-
-
44,963
58,160
(487,748)
-
-
-
-
-
25 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
FITB attributable to tax losses
Other
Balance as at 30 June 2009
-
(487,748)
-
487,748
-
-
-
Parent Entity Deferred Tax Assets
Future income tax benefits attributable to tax losses
Other
Balance as at 30 June 2008
Future income tax benefits attributable to tax losses
Other
Balance as at 30 June 2009
Opening Balance
Charged to
Income
Charged directly
to Equity
Changes in Tax
Rate
Exchange
Differences
345,664
8,867
354,531
-
4,924
4,924
(345,664)
(345,664)
-
-
-
(3,943)
(3,943)
-
-
-
-
-
-
-
-
-
Closing Balance
4,924
4,924
-
4,924
4,924
-
-
-
-
-
Note 24
Provisions
CURRENT
Short-term Employee Benefits
Opening balance at 1 July 2008
Additional provisions
Amounts used
Balance at 30 June 2009
Other - Provision for purchase of business
Opening balance at 1 July 2008
Additional provisions
Balance at 30 June 2009
NON CURRENT
Long-term Employee Benefits
Opening balance at 1 July 2008
Additional provisions
Amounts used
Balance at 30 June 2009
Analysis of Total Provisions
Current
Non-current
Provision for Long-term Employee Benefits
Consolidated Group
Parent Entity
2008
$
2009
$
2008
$
2009
$
1,029,047
612,958
(672,374)
969,631
1,082,099
479,745
(532,797)
1,029,047
985,711
-
985,711
-
985,711
985,711
-
-
-
-
-
-
-
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
154,866
133,113
(144,519)
143,460
115,535
104,184
(64,853)
154,866
-
-
-
-
Consolidated Group
Parent Entity
2009
$
1,955,342
143,460
2,098,802
2008
$
2,014,758
154,866
2,169,624
2009
$
2008
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
A provision has been recognised for employee entitlements relating to long service leave. In calculating the present value of future cash flows in respect of long service leave, the
probability of long service leave being taken is based on historical data. The measurement and recognition criteria relating to employee benefits has been included in Note 1 to this report.
Note 25
Issued Capital
2009: $14,320,868 2008: $12,835,957 fully paid ordinary shares
The company has authorised share capital amounting to $14,320,868 ordinary shares.
(a)
Ordinary Shares
At the beginning of reporting period
Shares issued during year
2nd July, 2007
—
18th December, 2007
—
16th June, 2008
—
1st July, 2008
—
— 20th August, 2008
— 1st September, 2008
— 15th December, 2008
— 16th June, 2009
At reporting date
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
12,141,959
12,141,959
10,921,391
10,921,391
12,141,959
12,141,959
10,921,391
10,921,391
Consolidated Group
Parent Entity
2009
No.
2008
No.
2009
No.
2008
No.
12,835,957
11,925,407
12,835,957
11,925,407
-
-
-
580,000
774,727
80,000
37,171
13,013
14,320,868
450,592
422,975
36,983
-
-
-
-
-
12,835,957
-
-
-
580,000
774,727
80,000
37,171
13,013
14,320,868
450,592
422,975
36,983
-
-
-
-
-
12,835,957
On 1st July, 2008 the company issued 580,000 ordinary shares at $0.99 each as part of the Tranche 2 Payment on the purchase of Advance Scaffold Solutions.
On 20th August, 2008 the company issued 774,727 ordinary shares at $0.81 each on the purchase of the Raw Material Inventory on acquisition of the Trading Operations of H & O
Pharmaceuticals Pty Limited.
trading operations of H & O Pharmaceuticals Pty Limited
On 1st September, 2008 the company issued 80,000 ordinary shares at $0.87 each as an adjustment to the Tranche 2 Payment on the purchase of Advance Scaffold Solutions.
On 15th December, 2008 the company issued 37,171 ordinary shares at $0.7009 each to participating shareholders under the company's Dividend Reinvestment Plan.
26
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
On 16th June, 2009 the company issued 13,013 ordinary shares at $0.4875 each to participating shareholders under the company's Dividend Reinvestment Plan.
(b)
(c)
Options
(i)
(ii)
For information relating to the Oldfields Holdings Limited employee option plan, including details of options issued, exercised and lapsed during the financial year and the
options outstanding at year-end. Refer to Note Note 29: Share-based Payments.
For information relating to share options issued to key management personnel during the financial year. Refer to Note Note 29: Share-based Payments.
Capital Management
Management control the capital of the group in order to maintain a good debt to equity ratio, provide the shareholders with adequate returns and ensure that the group can fund its
operations and continue as a going concern.
The group’s debt and capital includes ordinary share capital, redeemable preference shares, convertible preference shares and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements.
Management effectively manage the group’s capital by assessing the groups financial risks and adjusting its capital structure in response to changes in these risks and in the market.
These responses include the management of debt levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the group since the prior year. This strategy is to ensure that the group’s gearing ratio
remains between 50% and 80%. The gearing ratio’s for the year ended 30th June 2009 and 30th June 2008 are as follows:
Total borrowings
Less cash and cash equivalents
Net debt
Total equity
Total capital
Gearing ratio
Note 26
Capital and Leasing Commitments
(a)
(b)
Finance Lease Commitments
Payable — minimum lease payments
— not later than 12 months
— between 12 months and 5 years
Minimum lease payments
Less future finance charges
Present value of minimum lease payments
Operating Lease Commitments
Non-cancellable operating leases contracted for but not capitalised in the financial
statements
Payable — minimum lease payments
— not later than 12 months
— between 12 months and 5 years
Note
Note 21, Note 22
9
Consolidated Group
Parent Entity
2009
$
30,034,471
(588,917)
29,445,554
8,935,056
38,380,610
2008
$
24,788,534
(295,567)
24,492,967
15,065,409
39,558,376
2009
$
1,935,082
(19,307)
1,915,775
8,935,056
10,850,831
2008
$
432,441
(34,315)
398,126
11,913,648
12,311,774
77%
62%
18%
3%
Note
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
856,261
1,031,763
1,888,024
(264,754)
1,623,270
661712
1,104,139
1,765,851
(218,575)
1,547,276
-
-
-
-
-
Note 22
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
1,321,231
1,203,375
2,524,606
1,009,555
1,851,096
2,860,651
-
-
-
-
-
-
-
-
-
-
-
The property lease is a non-cancellable lease with a five-year term, with rent payable monthly in advance. Contingent rental provisions within the lease agreement require the
minimum lease payments shall be increased by the lower of CPI or 5% per annum. An option exists to renew the lease at the end of the five-year term for an additional term of five
years. The lease allows for subletting of all lease areas.
Note 27
Segment Reporting
Manufacturing
Wholesaling
Scaffolding
Elimination
2009
$
2008
$
2009
$
2008
$
2009
$
2008
$
2009
$
2008
$
Primary Reporting — Business Segments
REVENUE
External Sales
Other segments
Total sales revenue
2,438,623
-
2,438,623
2,037,163
-
2,037,163
31,554,078
692,385
32,246,463
34,588,120
419,494
35,007,614
25,130,811
152,974
25,283,785
20,285,963
234,589
20,520,552
(12,679,609)
-
(12,679,609)
(16,002,396)
-
(16,002,396)
RESULT
Segment result
Share of net profits of
associates and joint
venture entities
Profit before income tax
Result for Discontinued JV
operations
Income tax expense
Profit after income tax
ASSETS
Segment assets
92,755
304,023
(6,476,649)
2,424,292
(2,492,724)
1,806,039
2,676,459
(1,701,611)
1,137,020
1,265,475
57,684,780
45,390,536
16,138,870
24,853,624
(33,461,514)
(28,989,399)
27 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
LIABILITIES
Segment liabilities
OTHER
Investments accounted for
using the equity method
Acquisitions of non-current
segment assets
Depreciation and
amortisation of segment
assets
Other non-cash segment
expenses
515,829
730,836
36,123,733
22,927,161
22,536,743
22,294,493
(26,612,205)
(18,497,663)
2,094,525
1,885,803
118,668
164,304
-
-
(118,668)
(164,304)
71,159
156,137
2,696,079
2,391,141
1,185,117
2,948,003
22,490
-
9,280
686,016
528,719
1,067,231
1,135,180
-
570,165
222,350
474,513
396,378
-
-
-
-
-
-
Secondary Reporting — Geographical Segments
Geographical location:
Australia
New Zealand
South East Asia
Eliminations
Accounting Policies
Segment Revenues from External
Customers
Carrying Amount of Segment Assets
2009
$
2008
$
2009
$
2008
$
Acquisitions of Non-current
Segment Assets
2009
$
2008
$
57,530,248
-
2,438,623
(12,679,609)
47,289,262
55,528,139
-
2,037,163
(16,002,369)
41,562,933
69,466,241
2,349,058
3,192,948
(33,509,091)
41,499,156
65,698,830
2,471,214
3,339,591
(28,989,399)
42,520,236
3,881,196
-
71,159
5,339,144
-
156,137
3,952,355
5,495,281
Segment revenues and expenses are those directly attributable to the segments and include any joint revenue and expenses where a reasonable basis of allocation exists. Segment assets
include all assets used by a segment and consist principally of cash, receivables, inventories, intangibles and property, plant and equipment, net of allowances and accumulated
depreciation and amortisation. While most such assets can be directly attributed to individual segments, the carrying amount of certain assets used jointly by two or more segments is
allocated to the segments on a reasonable basis. Segment liabilities consist principally of payables, employee benefits, accrued expenses, provisions and borrowings. Segment assets and
liabilities do not include deferred income taxes.
Intersegment Transfers
Segment revenues, expenses and results include transfers between segments. The prices charged on intersegment transactions are the same as those charged for similar goods to parties
outside of the consolidated group at an arm's length. These transfers are eliminated on consolidation.
Business and Geographical Segments
Business segments
The consolidated group has the following five business segments:
—
—
—
Manufacturing division manufactures paint application products an scaffolding used in the building and general hardware business.
Wholesale division sells paint application products, painters tools, associated products and garden sheds to the paint and hardware industry.
Scaffolding construction and hire division manufactured scaffolding equipment for both sales and hire to building an construction industry throughout NSW, Victoria, Queensland,
South Australia and Western Australia.
Geographical segments
The consolidated group’s business segments are located in Australia, with the manufacturing and distribution divisions also having operations in New Zealand and South East Asia. Only
minor exports are made to other countries.
Impairment Losses
An impairment loss amounting to $4,027,937 relating to intangibles was recognised as an expense for the year ended 30 June 2009.
Note 28
Cash Flow Information
(a)
Reconciliation of Cash Flow from Operations with Profit
after Income Tax
Profit after income tax Ordinary Activities
(6,266,411)
1,718,487
(3,419,210)
1,331,739
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
Cash flows excluded from profit attributable to operating activities
Impairment Losses
Unrealised Foreign Exchange
Depreciation
Net (gain)/loss on disposal of property, plant and equipment
Stock Recoveries
Write Back of Loans
Share options expensed
Share of joint venture entity net profit after income tax and dividends
Changes in assets and liabilities, net of the effects of purchase and
disposal of subsidiaries
(Increase)/decrease in trade and term receivables
(Increase)/decrease in prepayments
(Increase)/decrease in inventories
Increase/(decrease) in trade payables and accruals
4,027,937
82,482
1,775,737
(465,269)
(221,779)
(325,212)
53,197
3,502,513
1,683,282
-
-
-
-
-
-
58,261
56,736
58,261
(145,616)
197,199
-
-
127,402
70,346
(1,331,588)
410,854
(864,022)
39,237
(2,834,296)
(874,124)
(6,233)
-
-
(172,249)
(1,390,000)
-
-
(353)
28 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
Increase/(decrease) in income taxes payable
Increase/(decrease) in deferred tax liability
Increase/(decrease) in provisions
Cash flow from operations
(b)
Acquisition of Business
During the year 75% of the controlled entity H & O Products Pty Ltd
acquired the business from H & O Pharmaceuticals Pty Limited. Details
of this transaction are:
Purchase consideration
Consisting of:
— Cash consideration
Shares issued
Amounts due under contract of sale
Total consideration
Assets and liabilities held at acquisition date:
Prepayments
Inventories
Property, plant and equipment
Provisions
Cash Deposit
Goodwill on consolidation
Minority equity interests in acquisition
Total consideration
(104,022)
(22,632)
(70,822)
(2,405,396)
358,597
362,510
971,990
817,121
-
(32,359)
-
(70,802)
-
-
-
(353)
3,401,464
5,397,654
3,401,464
(847,569)
-
2,553,895
5,397,654
(491,145)
(2,897,026)
2,009,483
18,121
2,210,618
1,200,255
(27,530)
-
3,401,464
-
(847,569)
2,553,895
8,197
1,697,313
490,929
-
119,998
2,316,437
3,081,217
-
5,397,654
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The assets and liabilities arising from the acquisition are recognised at fair value which is equal to its carrying value as determined by an independent valuation.
The Loss of H & O Products Pty Ltd and NOST Investments Pty Ltd included in the consolidation group loss since the acquisition on the 4th August 2008 amounted to $1,123,088
Note 29
Share-based Payments
The following share based payment arrangements existed at 30 June 2009.
All options granted to management personnel are Ordinary Shares in Oldfields Holdings Limited which confer a right to one Ordinary Share for each option held.
Outstanding as at 30 June 2007
Granted
Forfeited
Exercised
Expired
Outstanding as at 30 June 2008
Granted
Forfeited
Exercised
Expired
Outstanding as at 30 June 2009
Options exercisable as at 30 June 2009:
Options exercisable as at 30 June 2008:
Consolidated Group
Parent Entity
Number
Weighted
average exercise
price
Number
Weighted
average exercise
price
1,545,000
-
(120,000)
-
-
1,425,000
350,000
(150,000)
-
-
1,625,000
1,625,000
1,425,000
$1.20
$1.20
$1.20
$1.20
$1.20
1,545,000
-
(120,000)
-
-
1,425,000
350,000
(150,000)
$1.20
$1.20
$1.20
$1.20
$1.20
$1.20
1,625,000
$1.20
As at the date of exercise, the weighted average share price of options exercised during the year was $1.20.
The weighted average remaining contractual life of options outstanding at year end was 1 year. The exercise price of outstanding shares at reporting date was $1.20.
The fair value of the options granted to employees is deemed to represent the value of the employee services received over the vesting period.
These values were calculated using the Black Scholes option pricing model applying the following inputs:
Weighted average exercise price:
Weighted average life of the option:
Underlying share price:
Expected share price volatility:
Risk free interest rate:
$1.20
1 year
$0.40
10% Refer last year
6.40%
Historical volatility has been the basis for determining expected share price volatility as it assumed that this is indicative of future tender, which may not eventuate.
The life of the option is based on the historical exercise patterns, which may not eventuate in the future,
Note 30
Events After the Balance Sheet Date
As part of the settlement to the Vendors of Advance Scaffolds Pty Limited purchased on 3 July, 2007, the company is due to pay a Tranche 3 payment in September, 2009. This is to be
paid partly in cash and partly in shares in Oldfields Holdings Limited. As previously announced, on 6th July, 2009, a share issue of 1,223,451 shares has already occurred as part of this
Tranche 3 settlement. The balance of the Tranche 3 payment will be made in September, 2009. The company's total issued Share Capital as at Friday, 28 August, 2009 is 15,544,319
Ordinary shares.
Note 31
Related Party Transactions
29 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
Consolidated Group
Parent Entity
2009
$
2008
$
2009
$
2008
$
Transactions between related parties are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated.
Transactions with related parties:
(a)
Controlled Entities
(b)
(b)
(d)
Purchases from Enduring Enterprises being Paint Brushes and Rollers
1,204,413
1,474,321
Associated Companies
Loans outstanding under normal commercial terms and conditions by Scaffold
Management Systems Pty Limited (previously Concrete Pumping Systems Pty Limited).
25,118
15,895
Sale to Brisbane Garden Sheds Pty Ltd comprising Garden Sheds and Sheds components
778,889
688,973
Other Related Parties
Rent paid to 8 Farrow Road Pty Limited owned by Mr. John R Westwood
Interest Paid to Kon Holdings
Interest Paid To Luke Sibley
Interest Paid To Directors
471,712
90,317
54,000
8,217
494,347
-
54,000
-
-
-
-
-
-
-
Note 32
Financial Risk Management
The group’s financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, accounts receivable and payable, loans to and from
subsidiaries, bills, leases, preference shares, and derivatives.
The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows:-
Financial Assets
Cash and cash equivalents
Loans and receivables
Available-for-sale financial assets
Equity investments
—
Financial Liabilities
Financial liabilities at amortised cost
Trade and other payables
Borrowings
—
—
Specific Financial Risk Exposures and Management
Note
9
10f
Note15b
Note 21
Note 22
Consolidated Group
2009
2008
$
$
295,567
588,917
Parent Entity
2009
$
19,307
2008
$
34,315
6,218,202
6,345,604
3,831,893
5,264,483
313,314
7,120,433
83,115
6,724,286
7,209,276
11,060,476
7,209,176
12,507,974
6,651,727
23,382,744
30,034,471
8,847,013
15,941,521
24,788,534
935,082
1,000,000
1,935,082
432,441
-
432,441
The main risks the group is exposed to through its financial instruments are interest rate risk, foreign currency risk, liquidity risk, credit risk and price risk.
a.
Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at reporting date whereby a future change in interest rates will affect future cash flows or the
fair value of fixed rate financial instruments. The Group is also exposed to earnings volatility on floating rate instruments.
Interest rate swap data and potential hedging is reviewed monthly by the board to minimise the risk exposure of variable interest rates
b.
Foreign Currency Risk
The board and senior management monitors foreign currency and has undertaken from May 2009 to use hedging contracts were appropriate to the value of up to 50% of it's US
dollar requirements. The board reviews this regularly after consultation with market advisors and its bank.
c.
Liquidity risk
The group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate utilised borrowing facilities are maintained.
d.
Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Group.
Credit risk is managed through maintaining procedures ensuring, to the extent possible, that customers and counterparties to transactions are of sound credit worthiness and includes
the utilisation of systems for the approval, granting and renewal of credit limits, the regular monitoring of exposures against such limits and the monitoring of the financial stability of
significant customers and counterparties. Such monitoring is used in assessing receivables for impairment. Depending on the division within the Group, credit terms are generally 30
to 45 days from the end of the month.
Credit Risk Exposures
The maximum exposure to credit risk by class of recognised financial assets at balance date, excluding the value of any collateral or other security held is equivalent to the carrying
value and classification of those financial assets (net of any provisions) as presented in the balance sheet. Credit risk also arises through the provision of financial guarantees, as
approved at Board level, given to parties securing the liabilities of certain subsidiaries (refer Note Note15 for details).
Collateral held by the Group securing receivables are detailed in Note 10 Trade and Other Receivables.
The Group has no significant concentration of credit risk with any single counterparty or group of counterparties. However, on a geographic basis, the Group has significant credit risk
exposures to Australia and the United Kingdom given the substantial operations in those regions. Details with respect to credit risk of Trade and Other Receivables is provided in Note
10.
30 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
Trade and other receivables that are neither past due or impaired are considered to be of high credit quality. Aggregates of such amounts are as detailed at Note 10.
Credit risk related to balances with banks and other financial institutions is managed by the FRMC in accordance with approved Board policy. Such policy requires that surplus funds
are only invested with counterparties with a Standard and Poor’s rating of at least AA-. The following table provides information regarding the credit risk relating to cash and money
market securities based on S&P counterparty credit ratings.
Cash and cash equivalents
- AA Rated
- A Rated
Held-to-maturity securities
- AAA Rated
For details of collateral held as security, refer to Note 10(e).
Net Fair Values
Fair value estimation
Note
Consolidated Group
2009
2008
$
$
Parent Entity
2009
$
2008
$
588,917
295,567
19,307
34,315
9
588,917
295,567
19,307
34,315
Note15
313,314
83,115
7,209,276
7,209,176
The fair values of financial assets and financial liabilities are presented in the following table and can be compared to their carrying values as presented in the balance sheet. Fair values
are those amounts at which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.
Fair values derived may be based on information that is estimated or subject to judgement, where changes in assumptions may have a material impact on the amounts estimated. Areas of
judgement and the assumptions have been detailed below. Where possible, valuation information used to calculate fair value is extracted from the market, with more reliable information
available from markets that are actively traded. In this regard, fair values for listed securities are obtained from quoted market bid prices. Where securities are unlisted and no market
quotes are available, fair value is obtained using discounted cash flow analysis and other valuation techniques commonly used by market participants.
Differences between fair values and carrying values of financial instruments with fixed interest rates are due to the change in discount rates being applied by the market since their initial
recognition by the Group. Most of these instruments which are carried at amortised cost (i.e. term receivables, held-to-maturity assets, loan liabilities) are to be held until maturity and
therefore the net fair value figures calculated bear little relevance to the Group.
Consolidated Group
Financial assets
Cash and cash equivalents
Trade and other receivables
Term receivables
Loans and advances - related parties
Investments - available for sale
Total financial assets
Financial liabilities
Trade and other payables
Hire Purchase Liability
Lease liability
Forward Exchange Contracts
Bank debt
Other Related Parties
Total financial liabilities
Parent Entity
Financial assets
Cash and cash equivalents
Trade and other receivables
Loans and advances - related parties
Total financial assets
Financial liabilities
Trade and other payables
Other Related Parties
Total financial liabilities
Footnote
2009
2008
Net Carrying
Value
$
Net Fair Value
$
Net Carrying
Value
$
Net Fair Value
$
(i)
(ii)
(iii)
(iv)
(v)
(i)
(ii)
(iii)
(iv)
(v)
588,917
5,489,943
-
728,259
2,407,839
9,214,958
6,651,727
1,507,180
116,090
60,812
19,611,154
2,147,320
30,094,283
588,917
5,489,943
-
728,259
2,407,839
9,214,958
295,567
6,138,800
-
206,804
1,968,918
8,610,089
6,651,727
1,507,180
116,090
60,812
19,611,154
2,147,320
30,094,283
8,847,013
1,361,511
185,765
-
14,094,495
299,750
24,788,534
295,567
6,138,800
-
206,804
1,968,918
8,610,089
8,847,013
1,361,511
185,765
-
14,094,495
299,750
24,788,534
Footnote
2009
2008
Net Carrying
Value
$
Net Fair Value
$
Net Carrying
Value
$
Net Fair Value
$
(i)
(ii)
(iii)
(i)
(ii)
19,307
3,831,893
7,209,276
11,060,476
19,307
3,831,893
7,209,276
11,060,476
34,315
5,264,483
7,209,176
12,507,974
34,315
5,264,483
7,209,176
12,507,974
935,083
1,000,000
1,935,083
935,083
1,000,000
1,935,083
432,441
-
432,441
432,441
-
432,441
The fair values disclosed in the above table have been determined based on the following methodologies:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
Cash and cash equivalents, trade and other receivables and trade and other payables are short term instruments in nature whose carrying value is equivalent to fair value.
Trade and other payables excludes amounts provided for relating to annual leave which is not considered a financial instrument.
Term receivables generally reprice to a market interest rate every 6 months and fair value therefore approximates carrying value.
Discounted cash flow models are used to determine the fair values of loans and advances. Discount rates used on the calculations are based on interest rates existing at
reporting date for similar types of loans and advances. Differences between fair values and carrying values largely represent movements the effective interest rate determined
on initial recognition and current market rates.
For listed available-for-sale and held-for-trading financial assets, closing quoted bid prices at reporting date are used. The directors have determined that the fair values of
unlisted available-for-sale financial assets cannot be reliably measured as variability in the range of reasonable fair value estimates is significant. Consequently, such assets are
recognised at cost and their fair values have also been stated at cost in the table above. However, the directors estimate that such investments could have fair values in the
range of $[insert amount] to $[insert amount] at reporting date. There is no active market for these investments, and there is no present intention to dispose of such
investments.
Fair values of held-to-maturity investments are based on quoted market prices at reporting date.
Quoted market prices at reporting date are used as well as valuation techniques incorporating observable market data relevant to the hedged position.
Discounted cash flow models are used that incorporate a yield curve appropriate to the remaining maturity of the debenture, bill or promissory note.
(viii)
Fair values are determined using a discounted cash flow model incorporating current commercial borrowing rates. The fair value of fixed rate bank debt will differ to carrying
values.
31 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
Sensitivity Analysis
The following table illustrates sensitivities to the Group’s exposures to changes in interest rates, exchange rates and commodity and equity prices. The table indicates the impact on how
profit and equity values reported at balance date would have been affected by changes in the relevant risk variable that management considers to be reasonably possible. These
sensitivities assume that the movement in a particular variable is independent of other variables.
Year ended 30 June 2009
+/- 2% in interest rates
+/- 5% in $A/$US
Year ended 30 June 2008
+/- 2% in interest rates
+/- 5% in $A/$US
Note 33
Reserves
Increase
Decrease
Increase
Decrease
Increase
Decrease
Increase
Decrease
Consolidated Group
Parent Entity
Profit
$
(424,708)
424,708
278,007
(307,271)
Equity
$
(424,708)
424,708
278,007
(307,271)
Profit
$
Equity
$
-
-
-
-
Consolidated Group
Parent Entity
Profit
$
(312,835)
312,835
271,547
(300,130)
Equity
$
(312,835)
312,835
271,547
(300,130)
Profit
$
Equity
$
-
-
-
-
-
-
-
-
-
-
-
-
a.
b.
c.
d.
e.
f.
g.
h.
Capital Profits Reserve
The capital profits reserve records non-taxable profits on sale of investments.
Asset Revaluation Reserve
The asset revaluation reserve records revaluations of non-current assets. Under certain circumstances dividends can be declared from this reserve.
Asset Realisation Reserve
The asset realisation reserve records realised gains on sales of non-current assets.
Foreign Currency Translation Reserve
The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled entity.
General Reserve
The general reserve records funds set aside for future expansion of the entity.
Option Reserve
The option reserve records items recognised as expenses on valuation of employee share options.
Financial Assets Reserve
The financial assets reserve records revaluation of financial assets.
Hedge Reserve
The hedge reserve records revaluations of items designated as hedges.
Note 34
Company Details
The registered office of the company is:
Oldfields Holdings Limited
8 Farrow Road, Campbelltown, NSW, 2560
The principal places of business are:
Oldfields Pty Limited
8 Farrow Road, Campbelltown, NSW, 2560
32 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
DIRECTORS’ DECLARATION
The directors of the company declare that:
1.
2.
the financial statements and notes, as set out on pages 8 to 36, are in accordance with the Corporations Act 2001 and:
(a)
(b)
comply with Accounting Standards; and
give a true and fair view of the financial position as at 30 June 2009 and of the performance for the year ended on that
date of the company and consolidated group;
the Chief Executive Officer and Chief Finance Officer have each declared that:
(a)
the financial records of the company for the financial year have been properly maintained in accordance with section 286
of the Corporations Act 2001;
the financial statements and notes for the financial year comply with the Accounting Standards; and
the financial statements and notes for the financial year give a true and fair view;
(b)
(c)
3.
in the directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when
they become due and payable.
The company and a wholly-owned subsidiaries, have entered into a deed of cross guarantee under which the company and its
subsidiary guarantee the debts of each other.
At the date of this declaration, there are reasonable grounds to believe that the companies which are party to this deed of cross
guarantee will be able to meet any obligations or liabilities to which they are, or may become subject to, by virtue of the deed.
This declaration is made in accordance with a resolution of the Board of Directors.
Director
Anthony Mankarios
Dated this
30th
day of
September
2009
33 34 35 OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
The following additional information is required by the Australian Stock Exchange Ltd in respect of listed public companies only.
1.
Shareholding
a.
b.
c.
Distribution of Shareholders
Category (size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Number
Ordinary
77
106
44
65
20
312
Redeemable
Nil
Nil
Nil
Nil
Nil
-
The number of shareholdings held in less than marketable parcels is Nil.
The names of the substantial shareholders listed in the holding company’s register as at 1 September 2009 are:
Shareholder
Divpass Pty Limited & Associates
M. W. Abbott (Maurie's Supa Dupa Supa Fund)
Starball Pty Limited
Wingroad Pty Limited & Associates
Carryoak Pty Limited
Kon Holdings Pty Limited
M. A. Hext / C. C. Hext / Lymgrange Pty Limited
Number
Ordinary
3,460,000
2,115,000
2,088,030
1,154,376
985,000
918,177
830,000
Preference
Nil
Nil
Nil
Nil
Nil
Nil
Nil
d.
Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary shares
–
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a
show of hands.
e.
20 Largest Shareholders — Ordinary Shares
Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Divpass Pty Limited & Associates
M. W. Abbott (Maurie's Supa Dupa Supa Fund)
Starball Pty Limited
Wingroad Pty Limited & Associates
Carryoak Pty Limited
Kon Holdings Pty Limited
M. A. Hext / C. C. Hext / Lymgrange Pty Limited
Gasweld/Industrial Tool Company Pty Limited
Nejeka Pty Limited/Mansfield Super Funds
Brian Benger/Shandora Super Fund
Randell Management Services Pty Limited
The Genuine Snake Oil Company
Braden Murrin
Falcon Fire Protection Pty Limited
Hylec Investments Pty Limited
Paul John Simpson
Gordon Elkington/Winpar Pty Limited
Milton Corporation
Luton Pty Limited
T. D. J. Love/Sanquhar Investments Pty Limited
The name of the company secretary is Gary Guild
Number of Ordinary
Fully Paid Shares Held
3,460,000
2,115,000
2,088,030
1,154,376
985,000
918,177
830,000
375,278
361,951
220,421
200,000
181,374
178,527
122,317
120,000
119,000
113,454
102,446
100,000
94,800
13,840,151
% Held
of Issued
Ordinary Capital
22.00
13.40
13.30
7.30
6.30
5.80
5.30
2.40
2.30
1.40
1.30
1.20
1.10
0.80
0.80
0.80
0.70
0.70
0.60
0.60
88.10
The address of the principal registered office in Australia is 8 Farrow Road, Campbelltown, NSW, 2560. Telephone (02) 4627.0777.
Registers of securities are held at the following addresses
New South Wales
Registries Limited, Level 7, 207 Kent Street, Sydney, NSW, 2000
2.
3.
4.
5.
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian Stock Exchange Limited.
Options over Unissued Shares
A total of 1,275,000 options are on issue. 1,275,000 options are on issue to 18 directors and employees under the Company employee option plan.
6.
Other Disclosures
36 OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Oldfields Holdings Limited is committed to high standards of corporate
governance and supports the principles of good corporate governance and best practice
recommendations as published by the ASX Corporate Governance Council 2ND Edition in August 2007.
Given the size and specific circumstances of Oldfields Holdings Limited the Board recognises that some
best practice recommendations are more relevant to larger companies.
Unless disclosed below, all relevant best practice recommendations of the ASX Corporate Governance
Council have been applied for the financial year ended 30 June 2009.
The company’s website contains a clearly marked corporate governance section.
1. THE BOARD LAYS SOLID FOUNDATIONS FOR MANAGEMENT & OVERSIGHT
Recommendation 1.1 – Establish functions reserved for the Board and for Senior Management.
The Board of Directors is accountable to the shareholders for the performance of the company. The
Board sets the company’s strategic direction and delegates responsibility for the management of the
company to the Managing Director.
A copy of the Board Charter, which promotes a culture within the company of accountability, integrity
and transparency, is available from the company’s website.
Each Board member must at all times act honestly, fairly and diligently in all respects in accordance with
the Corporations Law as it applies to our company.
Key matters reserved to the Board include the following:
Oversight of the company , including its control, accountability and compliance systems;
Appointment, monitoring, managing the performance of and if necessary removal of the Chief Executive
Officer, Chief Financial Officer and Company Secretary;
Input, assessment, appraisal and final approval of management’s development of corporate strategy and
performance objectives;
Monitoring risk management;
Approving and monitoring the progress of major capital expenditure, capital management and
acquisitions and divestitures;
Approval and monitoring financial and other reporting;
Ensuring the market and shareholders are fully informed of material developments; and
Recognising the legitimate interests of stakeholders.
The expectations of Directors are outlined in a formal Letter of Appointment which details the term of
appointment, fees, power and duties and other information pertinent to their roles.
Responsibility for the day-to-day management of the Company and its operations is delegated to senior
executive management.
The Board holds a minimum of six formal meetings a year, but usually ten. Additional meetings are held
as required.
Details of current members of the Board are disclosed in the Directors’ Report.
Recommendation 1.2 – Disclose the process for evaluation of senior executives.
Senior executives are evaluated each year on their performance against stated objectives, goals and
key performance indicators (KPI).
Overall performance is reviewed by the particular senior executive’s direct report and ultimately by the
Chief Executive Officer and/or Board of Directors.
37
OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Recommendation 1.3 – Provide information indicated in the Guide.
There are no departures from Recommendations 1.1, 1.2 or 1.3;
Senior executive performance evaluations have taken place during the reporting period as detailed in
Recommendation 1.2.
2. STRUCTURE OF THE BOARD TO ADD VALUE
The Board currently has four directors, comprising three non-executive directors, including the
chairperson and one executive director.
The Board has adopted the following principles:
The same individual should not exercise the roles of chairperson and chief executive officer;
The Board should not comprise a majority of executive directors;
The Board should comprise persons with a broad range of skills and experience appropriate to the needs
of the Oldfields Group.
Recommendation 2.1 – Majority of the Board should be independent directors.
Under recommendation 2.1 of the ASX Corporate Governance Council Best Practice Recommendations
the majority of the Board should be independent directors. Independent directors are those who are
independent of management and free of any business or other relationship that could materially interfere
with – or could reasonably be perceived to materially interfere with – the exercise of their unfettered and
independent judgment.
In assessing the independence of directors, an independent director is a non-executive director and:
Is not a substantial shareholder, as defined in section 9 of the Corporations Act, of the company or an
officer of, or otherwise associated directly with, a substantial shareholder of the company;
Has not within the last three years been employed in an executive capacity by the company or another
group member, and there has not been a period of at least three years between ceasing such
employment and serving on the Board;
Has not within the last three years been a principal of a material professional advisor or a material
consultant to the company or another group member, or an employee materially associated with the
service provided;
Is not a material supplier or customer of the company or other group member, or an officer of or
otherwise associated directly or indirectly with a material supplier or customer;
In applying the best practice recommendations for independence the independent directors of the
company at the date of this report are:
Thomas Daniel John Love
appointed 1964
38 OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Recommendation 2.1 – Majority of the Board should be independent directors. (continued
The Board has recognised that the following non-executive directors do not comply with all of the
independence criteria listed above.
John Roy Westwood
would be considered a substantial shareholder;
Has a material contractual relationship with the company as disclosed in the notes of the financial
statements.
appointed 2001
Christopher Charles Hext
would be considered a substantial shareholder;
appointed 2001
However, the Board considers that the current composition of the Board is structured in both size and
commitment to adequately discharge its responsibilities and duties in addition;
Has a proper understanding of, and competence to deal with, the current and emerging issues of the
business.
Can effectively review and challenge the performance of management and exercise independent
judgment.
The Board has considered the following;
The size of the company and spread of shares amongst the substantial shareholders.
The appointment of additional independent directors would cause undue financial pressure.
The experience and personal qualities of the non-executive directors.
The skills of the non-executive directors are complimentary to other Board members
The non-executive directors are independent of management and other relationships that could
materially interfere with the exercise of their unfettered and independent judgment.
The Board continues to review its governance structures, including the level of independent directors,
as the company develops and changes to ensure that it continues to meet effective governance given
the size and specific circumstances of the company.
Recommendation 2.2 – The Chair should be an Independent Director.
The current Chair, J R Westwood, is considered by the Board not to be an independent non-executive
director.
The Board has considered the appointment of a lead independent director, but has decided to maintain
the existing structure and size of the Board as detailed in Recommendation 2.1
Recommendation 2.3 – The Chair and the CEO should not be the same person.
The duties and responsibilities of the Chair and Chief Executive Officer are separate and each position
is held by a different individual.
Recommendation 2.4 – The Board should establish a Nomination Committee.
Given the size and requirements of the company the Board has decided that a nomination committee is
not required at this point in time. At present all members of the Board consider the composition of the
Board and appointment of new directors.
39 OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Recommendation 2.5 – Disclose the process for evaluation of the performance of the Board, its
committees
and individual directors.
The Board conducts an annual evaluation of its own performance and the performance of its committees
and individual directors. This evaluation is reviewed against a number of key measures, including
strategy, corporate planning, corporate governance, effectiveness of meetings and information systems.
Information is supplied to the Board in a timely and quality format that enables the Board to discharge
its duties effectively. Directors are entitled to seek additional information where considered necessary
to make informed decisions.
The Company Secretary supports the Board in coordinating the timely completion and dispatch of the
board agenda and board papers. The appointment and removal of the Company Secretary is governed
by the Board
As a whole.
Recommendation 2.6 – Provide information recommended in the Guide on Principal 2.
The skills, experience and relevant position of each director are detailed in the annual Directors’ Report;
The names of the independent and non-executive directors and the materiality threshold are discussed
in Recommendation 2.1;
Any relationships between a Director and the Company which may affect independence are stated in
Recommendation 2.1;
The company acknowledges directors require high quality information and advice on which to base their
decisions and considerations. All directors have the right to seek advice and clarification from the
company auditors, financial and legal advisors on any matter relating to the company or Board
performance;
Directors additionally have the right to seek independent professional advice to help them carry out their
responsibilities. Expenses will need to be approved in advance by the chairperson. If the chairperson is
unable or unwilling to give approval, then board approval will be sufficient. Any costs incurred will be
borne by the company;
The period of office held by each director in office at the date of the Annual Report is disclosed in the
Directors’ Report;
A performance review as disclosed in Recommendation 2.5 was performed during the reporting period;
Any departures from recommendations relating to Principal 2 have been disclosed in the discussion of
the relevant recommendation.
3. PROMOTION OF ETHICAL AND RESPONSIBLE DECISION – MAKING
Recommendation 3.1 – Establish and Disclose a Code of Conduct
The Board has developed a code of conduct for directors and company officers and employees. The key
elements of the code are:
Conflicts of interest;
Corporate opportunities;
Confidentiality;
Fair dealing;
Protection of assets;
Compliance with laws and regulations; and
Promotion of ethical and lawful behaviour.
40 OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Recommendation 3.2 – Establish a Share Trading Policy
The Board has developed and adopted a policy concerning trading in company securities by directors,
officers and employees. The company and the Board encourage directors, officers and employees to
own shares in the company thereby fostering a further link between their interests and the interests of
all shareholders.
The key elements of the policy are:
Insider trading;
Continuous disclosure;
When a designated officer must not deal in securities;
When a designated officer may deal;
Exceptional circumstances – permission to deal;
When employees (other than designated officers) may deal;
When employees (other than designated officers) must not deal;
Notification of directors’ dealing in securities;
Breach of policy; and
Speculative dealing.
Recommendation 3.3 - Provide information recommended in the Guide on Principal 3.
A copy of the Share Trading Policy can be obtained from the Corporate Governance section of the
Oldfields website.
A copy of the Oldfields Code of Conduct can be obtained from the Corporate Governance section of the
Oldfields website.
4. THE BOARD SAFEGUARDS THE INTEGRITY OF FINANCIAL REPORTING
The Chief Executive Officer and the Chief Financial Officer state in writing to the Board that the
company’s financial reports present a true and fair view, in all material respects, of the company’s
financial condition and operational results and are in accordance with relevant accounting standards.
Recommendation 4.1 – the Board should establish an Audit Committee.
The Board has an Audit Committee which:
Has two members who are non-executive directors;
Has a written charter which can be obtained from the Corporate Governance section of the Oldfields
website;
Includes members who are all financially literate;
Details of the members are disclosed in the Director’s Report;
The Board recognises that an independent audit committee is an important feature of good corporate
governance.
Recommendation 4.2 – Structure of the Audit Committee.
The Audit Committee:-
Consists only of non-executive directors;
Consists of one independent director and one director who would not be considered as independent as
discussed in Recommendation 2.1;
Is chaired by an independent chair, who is not chair of the Board;
41 OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Recommendation 4.2 – Structure of the Audit Committee. (continued)
Has two members. Recommendation 4.2 states that the Audit Committee should have at least three
members. Given the size and structure of the Board, as discussed in Recommendation 2.1, the Board
feels that two members, both of who are qualified accountants, is sufficient at this time.
Recommendation 4.3 – Audit Committee should have a formal charter.
The Audit Committee has a formal charter, the key elements of the Charter are:
Role of the Committee;
Membership;
Meetings;
Responsibilities;
Authority;
Independence and
Non-audit work.
The Board and Audit Committee closely monitor the independence of the external auditor. The Audit
Committee meets a minimum of twice a year in private, with management without the external auditor and
with the external auditor without management.
Recommendation 4.4 - Provide information recommended in the Guide on Principal 4.
The members of the Audit Committee are: C C Hext (Chairman) and T D J Love.
The details of the qualifications of the Audit Committee members are disclosed in the Directors’ Report.
The details of the number of Audit Committee meetings held is contained in the Directors’ Report.
Departures from recommendations included in Principle 4 have been disclosed in the discussion of the
relevant recommendations.
5. THE BOARD MAKES TIMELY AND BALANCED DISCLOSURE
Recommendation 5.1 – Establish policy on ASX listing Rule disclosure requirements.
The company has established procedures to ensure compliance with ASX Listing Rules which requires
that when an entity becomes aware of any information concerning it that a reasonable person would
expect to have a material effect on the price or value of the entity’s securities, the entity must
immediately tell ASX that information.
A Continuous Disclosure Policy and Procedure has been prepared and is available from the Corporate
Governance section of the Company’s website.
42 OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
6. THE BOARD RESPECTS THE RIGHTS OF SHAREHOLDERS
Recommendation 6.1 – Design a communication policy for promoting effective communication.
The company has an effective shareholder communication procedure. The company promotes effective
communication with shareholders and encourages effective participation at the company’s general
meetings.
Shareholders and other parties will be able to access the following information from the company’s
website:
Copies of all announcements given to the ASX;
Press releases and copies of letters to shareholders;
Copies of annual and half year financial reports;
Details of notices of shareholders meetings including information on general meetings.
The requirements of continuous disclosure ensure that the company discloses relevant information to
the shareholders and the market in a timely and full manner.
7. THE BOARD RECOGNISES AND MANAGES RISK
Recommendation 7.1 – Establish policies for oversight and management of material business risks.
The Board recognises that there are a number of complex operational, commercial, financial and legal
risks and has in place procedures to safeguard the company’s assets and interests.
An Occupational Health and Safety Committee has been established to monitor and recommend changes
to safe working practices and a safe working environment. The chairperson is not a director, and the
committee comprises the managing director, senior executive officers and employee representatives.
The Board has developed a risk management policy the purpose of which is:
Identify, access, monitor and manage risk;
Inform investors of material changes to the company’s risk profile;
Enhance the environment for capitalising on value creation opportunities;
Ensure compliance with the Corporations Act;
Consider the reasonable expectations of its stakeholders;
The measures and procedures in place to comply with these regulations; and
How compliance with those measures and procedures will be monitored.
Recommendation 7.2 – Management is required to design and implement risk management and report to
the Board.
The Board has established a Risk Management Committee in conjunction with the Audit Committee which
will meet regularly to identify all major risks, ensure appropriate risk management plans are in place and
to monitor the effectiveness of the implementation of the risk management plans.
The Chief Executive Officer and the Chief Financial Officer are required to state in writing to the board
that the company’s risk management and internal compliance and control system is operating effectively
and efficiently in all material aspects.
43 OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Recommendation 7.3 – Management to ensure integrity of financial reports to the Board.
Written declarations are provided each year by the CEO, Chief Financial Officer and Company Secretary
to the Board, stating that the company’s financial reports are based on a sound system of risk oversight
and management and internal control.
Recommendation 7.4 - Provide information recommended in the Guide on Principal 7.
The Board has received written declarations under Recommendation 7.2;
The Board has received written declarations under Recommendation 7.3;
The risk Management Policy is available on the Company website.
8. THE BOARD REMUNERATES FAIRLY AND RESPONSIBLY
Recommendation 8.1 – Board should establish a Remuneration Committee.
The Board has a Remuneration Committee which has two members and a documented charter. The
members and qualification of the Remuneration Committee are disclosed in the Directors’ Report.
Due to the size and nature of the Board as discussed in recommendation 2.1 the following items of
recommendation 8.1 are not followed:-
consists of a majority of independent directors;
is chaired by an independent director;
has at least three members.
The Remuneration Committee is responsible for developing and recommending to the Board:
Remuneration policies for Non-Executive Directors;
Remuneration policies for the Chief Executive Officer and Chief Financial Officer;
Remuneration policies for executive management;
All aspects of any executive share option or acquisition scheme;
Superannuation policies;
Policies which motivate senior executives to pursue the long term growth and success of the company;
Policies which show a clear relationship between senior executives’ performance and remuneration.
Recommendation 8.2 – Clearly distinguish the structure of non-executive directors’ remuneration from
that of executive directors and senior executives.
The remuneration of Non-Executive Directors is by way of directors fees in the form of cash, non-cash
benefits and superannuation benefits.
The total annual remuneration paid to Non-Executive Directors may not exceed the limit set by
shareholders at the annual general meeting.
Non-Executive Directors do not receive options unless approved by shareholders.
44 OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Recommendation 8.3 - Provide information recommended in the Guide on Principal 8.
The members of the Remuneration Committee and their attendance at meetings are disclosed in the
Directors’ Report;
Non-Executive Directors are not provided with retirement benefits other than superannuation;
A copy of the Remuneration Committee Charter can be obtained from the company’s web site;
Departures from recommendations included in Principle 8 have been disclosed in the discussion of the
relevant recommendations.
45
46 Board
Corporate
Management
Risk Management Policy
N/A
Enterprise Risk Management
Legislation
External Standard
Principle 7 – ASK Principles of Good Corporate Governance
AS/NZS 4360:2004 Risk Management Standard
1. Introduction
This statement provides an overview of the Company's risk management policies and internal compliance and
control systems.
2. Responsibility
The Oldfields Holdings Board is broadly responsible to overview on a regular basis the Company's
procedures and risk management policies. The responsibility of the board is codified under the board
charter. The Company also has an Audit committee, with a copy of the Audit committee charter available on
the web-site.
3. Risk Management Monitoring
The board has implemented a combination of internal policies and procedures and use of external audits to
monitor risk management and its effectiveness.
3.1 Standard Operating Procedures (SOP's)
The board has implemented risk management policies covering areas of business risk such as:
Occupational Health and Safety;
The Environment;
Finance and treasury;
Human Resources;
Asset Protection (insurance)
Codes of Conduct;
Continuous disclosure by Directors.
The Policies referred to are regularly reviewed and an internal mechanism exists whereby the board
and committee members have access to these reports on an internal intranet site . The board manages
these risks appropriately with reference to identification, implementation and review of these risks and
procedures.
3.2 External Audits
The external audit of the company is conducted at least once every year. There is also a formal review
at least once every year. This audit is conducted by an external auditor.
The Company has a Occupational Health and Safety committee which are trained by external OH&S
providers. The committee is certified.
The Company engages with qualified external advisors annually in relation to Asset Protection. Where
possible the board adopts the most practical and affordable insurance policies suitable to protect major
assets of the company.
In general an external qualified auditor and or valuers are engaged by the Board in determining large
asset values on acquisition of assets. An annual external Valuation is obtained to determine and verify
carrying values of Investment Property by a external independent registered Property valuer at least
once a year.
3.3 Risk Management Statements
The integrity of the Company's financial reports relies on sound business and risk control systems.
Annually the company requires each of the financial controllers and the group financial controller to
sign a Risk Management Statement. To ensure adequate accountability, the CEO and the Chief
Financial Controller are also required to sign a Risk Management statement that is provided to the
audit committee in writing.
47 48 Communication
Effective risk management is reliant on the timely and open communication of actual or potential risk
events across the organisation. Free and frank communication is at the heart of OLH's risk management
approach, and where the processes and accountabilities described in these standards may not support a
suitably rapid response to any risk, then communication should be undertaken using whatever means will
achieve the best outcome for OLH.
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