Pro-Pac Packaging Limited
For personal use only Rigid Containers
and Closures
Flexible Films
Industrial and
Protective Packaging
Cartons
Food Service
Food Processing
Produce Packaging
Safety & PPE
Machinery and
Service
Washroom
and Janitorial
Online
Chairman’s
02
Report
03
Directors’
Report
10
Auditors’
Independence
Declaration
1 1
Corporate
Governance
Statement
17
Consolidated
Statement of
Profit or Loss
and other
Comprehensive
Income
18
Consolidated
Statement of
Financial
Position
For personal use only Pro-Pac Packaging Limited + Controlled Entities
Corporate information
Corporate Information
Corporate information
PPG is a ‘one stop
shop’ for all customers
packaging, safety
and hygiene needs.
This is based on the
range of products we
source and supply as
well as exceptional
service, the highest
level of packaging
expertise and genuine
economic benefits to
our customers, partners,
and shareholders.
Pro-Pac Packaging Limited
ACN: 112 971 874 ABN: 36 112 971 874
Directors
Elliott Kaplan (Chairman)
Brandon Penn
Dr Gary Weiss
Solicitors
Thomsons Lawyers
Level 25, 1 O’Connell Street
Sydney NSW 2000
Company
Secretary
Mark Saus
Registered
Office
147 - 151 Newton Road
Wetherill Park NSW 2164
Principal Place
of Business
147 - 151 Newton Road
Wetherill Park NSW 2164
Share Register
Boardroom Pty Limited
Level 7, 207 Kent Street
Sydney NSW 2000
Bankers
Commonwealth Bank
of Australia
Premium Business Services
Level 1, 430 Forest Road
Hurstville NSW 2220
Auditors
UHY Haines Norton
Level 11, 1 York Street
Sydney NSW 2000
Stock Exchange
Listing
Pro-Pac Packaging Limited
shares are listed on the
Australian Securities Exchange
(ASX code: PPG)
19
Consolidated
Statement of
Cash Flows
20
Consolidated
Statement of
Changes in
Equity
21
Notes to the
Financial
Statements
50
Directors’
Declaration
5 1
Independent
Auditor’s
Report
52
Additional
Company
Information
1
2013 Annual ReportFor personal use only Focus for the first half of
the 2014 financial year will be
on reaping the benefits of the
investments made in expanding
and enhancing the Company’s
national capability and
infrastructure, on implementing
the identified cost reduction
programs and on maximising the
opportunities presented by the
recent acquisitions.
I would like to express my thanks to my fellow directors,
senior management and all of the Pro-Pac staff for their
effort and contribution in what has been a particularly
challenging year. Their dedication and commitment
augurs well for the continued growth and future success
of Pro-Pac.
Elliott Kaplan
Chairman
02
Chairman’s report
On behalf of the Board of Directors and the
management it is my pleasure to present Pro-Pac’s
annual report for the year ended 30 June 2013.
During the 2013 Financial Year, the Company continued
to achieve good top line growth, both organically and
through acquisitions. Revenue increased by 30% or
$40 million to $173 million, of which acquisitions made
during the 2013 financial year contributed approximately
$25 million. Despite the increased revenue, difficult
trading conditions particularly over the final quarter
of the financial year, combined with the impact
of increased costs associated with the significantly
enhanced infrastructure which was put in place during
the financial year to cope with future anticipated
growth, negatively impacted reported earnings.
The 2013 result included $1.7 million of relocation,
restructuring and business combination costs relating
predominantly to the integration of new acquisitions and
the consolidation of the Industrial Division’s operations
in WA, SA and NSW. After inclusion of these costs, EBITDA
was down 8% to $11.1 million and after tax profit was
down 11% to $5.2 million.
In line with the Company’s strategy of continuing to
expand its product and service offering to the food
manufacturing and food processing industries, five of
the eight acquisitions completed during the financial
year were involved in the distribution or manufacture
of primary packaging to the meat, poultry, baking and
prepared meals sectors.
While the Company will continue to assess synergistic
and accretive acquisitions, focus for the first half of the
2014 financial year will be on reaping the benefits of
the investments made in expanding and enhancing the
Company’s national capability and infrastructure, on
implementing the identified cost reduction programs
and on maximising the opportunities presented by the
recent acquisitions.
A fully franked interim dividend of 1 cent per share
was paid in May and the Board declared a fully franked
final dividend of 1 cent per share which was paid on
25 September 2013.
2
Annual Report 2013For personal use only The Directors present their report, together with the financial
statements, on the consolidated entity consisting of Pro-Pac
Packaging Limited (“the Company”) and entities it controlled
for the year ended 30 June 2013.
Directors
The Directors in office at the date of this report and during the
whole of the financial year are as follows:
Elliott Kaplan
BAcc, CA
(Chairman and Non-Executive Director – appointed Director
16 February 2005 and Chairman 25 February 2011)
Mr Kaplan is a Chartered Accountant with extensive experience
in senior financial and chief executive officer roles in both
private and public listed companies. His experience, from
both an investor and investee perspective, spans a diverse
range of industries including manufacturing, environmental,
distribution and services. Mr Kaplan is Managing Director of
CVC Private Equity Limited, a non-executive director of Cellnet
Limited and a director of a number of unlisted companies.
Mr Kaplan is also a former director of DoloMatrix Limited and
The Environmental Group Limited.
Mr Kaplan is a member of the Audit and Remuneration
Committees.
Brandon Penn
B. Com
(Executive Director – appointed 16 August 2007)
Mr Penn has had a number of business interests including
the establishment of a software development company,
Dealing Information Systems (DIS), which developed wholesale
banking systems that were implemented and sold throughout
the world. DIS was acquired in 1996 by Sungard Data
Systems NYSE.
Mr Penn has co-invested in a number of business ventures
in both executive and non-executive capacities in the
information technology and wholesale market sectors.
Mr Penn was a founding director of Plastic Bottles Pty Ltd
(PB Group) and was pivotal in negotiating and integrating a
number of acquisitions transforming the PB Group into a rapid
growth multi-state importation, manufacturing and distribution
business. In 2007, Mr Penn negotiated the sale of the PB Group
to PPG.
In his capacity as PPG Group CEO since 2010, Mr Penn has
been instrumental in the formulation and execution of the
Company’s strategy of transforming and broadening the
Company’s position into that of a dominant packaging
company in the Australian market.
Pro-Pac Packaging Limited + Controlled Entities
Directors’ report
03
Dr Gary Weiss
LL.B (Hons), LL.M (with dist.), Doctor of Juridical Science (JSD)
(Non-Executive Director – appointed 28 May 2012)
Dr Weiss holds the degrees of LL.B (Hons) and LL.M (with dist.)
from Victoria University of Wellington, as well as a Doctor of
Juridical Science (JSD) from Cornell University, New York.
Dr Weiss has extensive international business experience and
has been involved in numerous cross-border mergers and
acquisitions. Dr Weiss is Chairman of ClearView Wealth Limited
and Secure Parking Pty Ltd, Executive Director of Ariadne
Australia Ltd, and a director of Premier Investments Limited,
Ridley Corporation Ltd, Mercantile Investment Company
Limited, Pro-Pac Packaging Limited, Victor Chang Cardiac
Research Institute and The Centre for Independent Studies.
He was Chairman of Coats plc from December 2003 until
April 2012 and executive director of Guinness Peat Group plc
from November 1990 to April 2011 and has held directorships
of numerous companies, including Westfield Group, Tower
Australia Ltd, Australian Wealth Management Limited, Tyndall
Australia Ltd (Deputy Chairman), Joe White Maltings Ltd
(Chairman), CIC Ltd, Whitlam Turnbull & Co Ltd and Industrial
Equity Ltd.
He has authored numerous articles on a variety of legal and
commercial topics.
Dr Weiss is Chairman of the Audit and Remuneration
Committees.
Company Secretary
Mark Saus
B.Com, B. Compt (Hons), CPA
(Company Secretary and Chief Financial Officer - appointed
2 September 2005)
Mr Saus has more than 26 years experience in commercial
and financial management roles in private and public listed
companies both in Australia and overseas. His experience
spans a diverse range of industries including manufacturing,
distribution and retail. Past roles include head of finance
positions in high growth environments. Mr Saus is also the
Chief Financial Officer of the Group.
3
2013 Annual ReportFor personal use only 04
Directors’ report
Interests in the Shares and Options of the Company
As at the date of this report, the relevant interests of the directors in the shares and options of Pro-Pac Packaging Limited are shown
in the table below:
Ordinary Shares
216,357
24,438,842
-
Interest in Ordinary Shares
through Directorships of
Corporate Shareholders
-
-
-
Elliott Kaplan
Brandon Penn
Dr Gary Weiss
Meetings of Directors
Attendances by each director during the year were:
Board
Audit committee
Number of
meetings held
while in office
Meetings
attended
Number of
meetings held
while in office
Meetings
attended
Remuneration committee
Meetings
Number of
meetings held
attended
while in office
Elliott Kaplan
Dr Gary Weiss
Brandon Penn
10
10
10
10
10
10
3
3
-
3
3
-
2
2
-
2
2
-
Principal Activities
The principal activities of the consolidated entity during the
year were the manufacture and distribution of industrial,
protective and rigid packaging products.
There have been no significant changes in the nature of these
activities during the year.
Overview of the Company’s Business
Pro-Pac Packaging Limited is a diversified manufacturing
and distribution company, providing end to end solutions for
general industrial and primary packaging, safety and PPE,
food services and food processing sectors with a national
footprint.
Operating and Financial Review
Results for the year ended 30 June 2013
The Company continues to grow strongly both organically and
through acquisitions. The Company grew revenue by 30% to
$173m.
During the year the Company incurred relocation, restructuring
and business combination costs of $1.7m which relate
predominantly to the integration of new acquisitions and the
consolidation of the Industrial Division’s operations in WA and
NSW.
Profit before tax, relocation, restructuring and business
combination costs from ordinary activities was up 1% to
$9.0m.
After inclusion of these costs, EBITDA was down 8% to $11.1m
and profit after tax was down 11% to $5.2m.
Revenue in the Industrial Division grew 40% to $130m
(2012: $93m) while pre-tax earnings for the Industrial Division
were $6.0m (2012: $6.9m) having being adversely affected
by the abnormal costs mentioned above. The Rigid Division’s
sales grew 9% to $59.5m (2012: $54.8m) with pre-tax divisional
earnings of $4.9m (2012: $4.6m). These figures include
intercompany sales.
Financial position
The Group’s balance sheet continues to strengthen with total
assets increasing by $29m to $152m. This growth was partly
funded by interest bearing debt which increased by $18.2m
to $22.5m at 30 June 2013.
Net interest bearing debt to net interest bearing debt plus
equity remains relatively low at 17.2%.
4
Annual Report 2013For personal use only
Pro-Pac Packaging Limited + Controlled Entities
Capital structure
During the year 430,000 ordinary shares were issued as part of
the Employee Long Term Incentive Plan (“ESPP”) while 160,000
shares were forfeited and cancelled under the plan. There
were no other changes to the capital structure during the year.
At 30 June 2013 there were 211, 257, 804 shares on issue.
Operating activities
During the year the Group completed eight acquisitions as
detailed in note 24 (Business Combinations).
In accordance with the Company’s strategy of continuing
to expand its product and service offering to the food
manufacturing and processing industries, five of the eight
acquisitions completed during the financial year were involved
in the distribution or manufacturing of primary packaging to
the meat, poultry, baking and prepared meals sectors.
The company also completed the consolidation of the
Industrial Division’s sites and operations in both NSW and
WA which will have a favourable effect on the division’s
operational efficiencies in future trading periods.
Outlook
While the Company will continue to assess synergistic and
accretive acquisitions, focus for the first half of FY14 will be on
reaping the benefits of the investments made in expanding
and enhancing the Company’s national capability and
infrastructure and on maximising the opportunities presented
by the recent acquisitions.
Dividends
A fully franked interim dividend of one cent per share was
paid on 16 May 2013. In August 2013, the Company
declared a fully franked final dividend of one cent per share.
The record date for determining entitlement to the dividend
is 11 September 2013 and the dividend will be paid on
25 September 2013. The Company’s Dividend Reinvestment
Plan will not apply to this dividend.
Significant Changes in the State of Affairs
The Group completed eight acquisitions during the year under
review.
Significant Events Subsequent to
Balance Date
Effective 1 August 2013 Pro-Pac Packaging Manufacturing (Syd)
Pty Ltd, a wholly owned subsidiary, acquired the business and
assets of Labels Plus (NSW) Pty Ltd trading as Fast Labels. Fast
Labels is a niche label manufacturer operating in Sydney with
annualised turnover of circa $800,000. On 28 August 2013, the
company declared a fully franked final dividend of one cent
per share. For more details please refer to ‘Dividends’ above.
Likely Developments
Apart from the commentary outlined above, the directors
have excluded from this report any further information on the
likely developments in the operations of the company and
the expected results of those operations in future financial
years, as the directors consider that it would be likely to result in
unreasonable prejudice to the Company.
Environmental Regulation and
Performance
The consolidated entity’s operations are not regulated by
any significant environmental regulation under a law of the
Commonwealth or of a State or Territory.
Indemnification and Insurance of
Officers and the Auditor
The Company has entered into a deed of access, indemnity
and insurance with each of the Directors, under which the
Company has agreed to:
• continue to provide the Directors with access to certain
relevant information after they cease to be Directors;
• to the extent permitted by law, indemnify the Directors
against liabilities incurred in their capacity as directors of the
Company and its subsidiaries; and
• maintain certain Directors’ liability insurance in respect of
Directors, both during and after the period they are Directors.
The Company has paid insurance premiums in respect of
Directors’ and Officers’ liability and legal expense insurance for
the Directors of the Company.
These contracts of insurance prohibit the disclosure of the
nature of the liabilities covered and amount of the premium
paid. The Corporations Act 2001 does not require disclosure of
the information in these circumstances.
The Group has not, during the year or since the end of the
financial year, in respect of any person who is or has been
an auditor of the Group, paid or agreed to pay a premium in
respect of a contract insuring against a liability for the costs or
expense of defending legal proceedings.
Remuneration Report (Audited)
Remuneration policy
The performance of the Group depends upon the quality of its
directors and executives. To prosper, the Group must attract,
motivate and retain highly skilled directors and executives.
The Remuneration Committee comprises Dr Gary Weiss
(Chairman) and Mr Elliott Kaplan both of whom are
Non-Executive Directors.
The Remuneration Committee assesses the appropriateness
5
2013 Annual ReportFor personal use only 06
Directors’ report
of the nature and amount of remuneration of directors on a
periodic basis by reference to relevant employment market
conditions with the overall objective of ensuring maximum
stakeholder benefit from the retention of a high quality
Board and executive team. It is intended that the manner
of payments chosen will be optimal for the recipient without
creating undue cost for the Group. Further details on the
remuneration of Directors and executives are set out in this
Remuneration Report.
In accordance with best practice corporate governance,
the structure of non-executive Director and executive
remuneration is separate and distinct.
Non-Executive Director remuneration
The Company seeks to set aggregate remuneration at a level
which provides the Company with the ability to attract, retain
and motivate directors of the highest quality, whilst incurring a
cost which is acceptable to shareholders.
The Constitution of the Company and the ASX Listing Rules
specify that non-executive directors are entitled to receive
remuneration for their services as determined by the Company
in a General Meeting. The Company has resolved that the
maximum aggregate amount of directors’ fees (which does
not include remuneration of executive directors and other
non-director services provided by directors) is $200,000 per
annum. Non-executive directors are entitled to be reimbursed
for their reasonable expenses incurred in connection with the
affairs of the Company. A director may also be remunerated
as determined by the directors if that director performs
additional or special duties for the Company.
The remuneration of the Company’s Non-Executive Directors
for the period ending 30 June 2013 is detailed in Table 1 of
this Remuneration Report.
Executive Director and Senior Management
remuneration
The Group aims to develop remuneration packages properly
reflecting each person’s duties and responsibilities and the
remuneration is competitive in attracting, retaining and
motivating people of the highest quality.
The Remuneration Committee is responsible for reviewing and
providing recommendations to the Board with respect to the
remuneration packages of senior management and executive
directors.
The Remuneration Committee is responsible for providing
advice to the Board with respect to non-executive directors’
remuneration.
The Board is responsible for determining remuneration
packages applicable to the Board members and the Chief
Executive Officer. The Chief Executive Officer determines
the remuneration packages for the senior executives of the
6
Company in accordance with compensation guidelines set
by the Board.
The remuneration of the Chief Executive Officer and senior
management for the year ending 30 June 2013 is set out in
Table 1 of this report.
Employment contracts
Chief Executive Officer
The Company has entered into an executive service
agreement with Mr Brandon Penn in relation to his role as
Chief Executive Officer of the Group. In his executive service
agreement, Mr Penn agrees that all intellectual property rights
created, developed or acquired by him in the course of his
employment, belong to the Company.
The Company or the executive may terminate the service
agreement by giving the other party three months notice.
The Company may terminate the agreement at any time with
immediate effect in the event of non-performance of duties
or in the event of dishonesty, a willful breach, non-observance
or neglect in the discharge of duties. The agreement provides
that for a period of twenty four months after termination of his
employment contract (less any served notice period) Mr Penn
will not compete with Pro-Pac in Australia.
Senior Management
Employment agreements entered into with senior
management contain the following key terms:
Event
Company Policy
Resignation / notice period
3 months or less
Serious misconduct
Company may terminate
at any time
Payouts upon resignation or
termination, outside industrial
regulations (ie ‘golden handshakes’) None
Executive Long Term Incentive Plan (ESPP)
The Company has established an ESPP to encourage
employees to share in the ownership of the Company and
promote the long-term success of the Company as a goal
shared by the employees. The ESPP has been approved
by members of the Company for the purposes of sections
260C(4)(a), 259B(2)(a), 257B(1) and paragraph (b) of the
definition of employee share scheme buy-back in section 9
of the Corporations Act. There are currently 2,905,000 shares
issued to employees under the Plan.
The following are the key terms and conditions of the ESPP:
• No Shares under the ESPP will be allotted unless the
requirements of the Corporations Act 2001 and the ASX
Listing Rules have been complied with.
Annual Report 2013For personal use only Pro-Pac Packaging Limited + Controlled Entities
• Performance hurdles apply to the ESPP. The key
• The term of the loans and the vesting period for the shares
performance hurdle is that the total shareholder return
to shareholders of the Company must exceed the rate
of growth over the same period for the S&P/ASX Small
Ordinaries Accumulation Index (or any equivalent or
replacement of that index).
• Shares are allocated to employees at either the value
of shares as detailed in the latest disclosure document
issued by the Company or the 5-day weighted average
price immediately prior to the offer being made to the
employee.
from the date of issue of shares is 3 years.
• The Shares will be registered in the names of the Participants
from allotment, but will remain subject to restrictions on
dealing while they are pledged as security for a loan or
subject to performance hurdles specified.
• If the employee leaves the employment of the Group, the
loan balance must be repaid in full or the shares surrendered
in full settlement of the outstanding loan balance.
Key Management Personnel at 30 June 2013
• The Company may provide loans to participants to
Elliott Kaplan
– Non-executive Chairman
acquire shares under the ESPP. As security for the loans,
Participants will pledge the shares acquired under the
ESPP to the Company at the time the loans are provided
and will grant a charge over any benefits attributable to
the Shares, including bonus shares, rights, and dividends.
Any dividends paid on the shares by Pro-Pac Packaging
Limited are treated as interest on the loan.
Dr Gary Weiss
– Non-executive Director
Brandon Penn
–
Executive Director
Hadrian Morrall
– Divisional Managing Director
Wendy Penn
– Divisional Managing Director
Mark Saus
–
Chief Financial Officer and
Company Secretary
Remuneration of Key Management Personnel
Excluding the Directors, there are only three staff members of the Company who qualify as a “Key Management Personnel” for
the purposes of this report. The executive key management personnel are also the most highly paid executive officers of the
consolidated entity for the year under review.
Short-term benefits
Post
employment
benefits
Other
long term
benefits
Share
based
payment
Total
Cash, salary
and fees
$
60,000
60,000
51,691
4,000
198,598
193,938
226,973
220,184
185,000
180,000
186,397
191,000
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
Elliott Kaplan
Gary Weiss
Hadrian Morrall
Brandon Penn
Wendy Penn
Mark Saus
Total Remuneration 2013
908,659
2012
849,122
Non
monetary
benefits
$
-
-
-
-
22,980
22,980
-
-
8,000
8,000
-
-
30,980
30,980
Super-
annuation
Other
Equity and
options
Performance
based
$
$
$
$
%
5,400
-
4,652
-
18,109
17,590
20,411
19,816
16,685
16,200
18,388
17,189
83,645
70,795
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,402
2,402
65,400
60,000
56,343
4,000
239,687
234,508
247,384
240,000
209,685
204,200
207,187
210,591
2,402
1,025,686
2,402
953,299
-
-
-
-
-
-
-
-
-
-
-
5%
-
-
7
2013 Annual ReportFor personal use only
08
Directors’ report
Options issued as part of remuneration for the year ended 30 June 2013
No options were granted as remuneration during the year ended 30 June 2013.
Shares and Loans issued under the ESPP during the year ended 30 June 2013
430,000 shares and related loans with a total value of $208,550 were issued under the ESPP during the year ended 30 June 2013.
ESPP Shares of Key Management Personnel as at the date of this report
ESPP Shares
(number)
ESPP Shares
$
300,000
300,000
600,000
97,500
137,400
234,900
ESPP Loans
Outstanding
$
97,500
137,400
234,900
ESPP Issue Price
$
ESPP Expiry Date
$
0.325
0.458
30 August 2013
21 July 2016
Mark Saus
Mark Saus
Total
Option Holdings of Key Management Personnel
There have been no options held by the Key Management Personnel during the year.
Loans to Key Management Personnel
Other than loans issued in relation to the Company’s ESPP shares detailed above, there were no loans to Key Management
Personnel during the year.
Other Transactions with Key Management Personnel
During the year the Company paid $796,405 (inc. GST) to entities associated with Key Management Personnel Hadrian Morrall and
Brandon Penn for property rental and outgoings, based on normal commercial terms and conditions.
This concludes the remuneration report, which has been audited.
Share Options
As at the date of this report (and at the balance date) there were no unissued ordinary shares under options.
Proceedings on Behalf of the 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.
Rounding of Accounts
The company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission,
relating to ‘rounding-off’. Amounts in this report have been rounded off in accordance with that Class Order to the nearest
thousand dollars, or in certain cases, the nearest dollar.
Officers of the Company who are former Partners of the Auditor
There are no officers of the company who are former audit partners of UHY Haines Norton, the auditor of the company.
8
Annual Report 2013For personal use only
Pro-Pac Packaging Limited + Controlled Entities
Auditors’ Independence Declaration and Non-Audit Services
UHY Haines Norton continues in office in accordance with section 327 of the Corporations Act 2001.
During the year ended 30 June 2013, there were no non-audit services provided by the entity’s auditors UHY Haines Norton.
The Auditors’ independence declaration as required under section 307C of the Corporations Act 2001 for the year end
30 June 2013 has been received and can be found on page 10 of the Directors’ report.
This Directors’ Report is signed in accordance with a resolution of the Board of Directors pursuant to section 298 (2) (a) of the
Corporations Act 2001.
Signed at Sydney on 25 September 2013.
Elliott Kaplan
Chairman
Brandon Penn
Director
9
2013 Annual ReportFor personal use only
10
Auditors’ Independence declaration
under section 307C of the Corporations Act 2001
To the Directors of Pro-Pac Packaging Limited
As auditor for the audit of Pro-Pac Packaging Limited for the year ended 30 June 2013, I declare that, to the best of my knowledge
and belief, there have been:
( i ) no contraventions of the independence requirements of the Corporations Act 2001 in relation to the audit; and
( i i ) no contraventions of any applicable code of professional conduct in relation to the audit.
M.D. Nicholaeff
Partner
UHY Haines Norton
Chartered Accountants
Signed at Sydney on 25 September 2013.
10
Annual Report 2013For personal use only
Pro-Pac Packaging Limited + Controlled Entities
Corporate Governance statement
1 1
The Board of Directors of Pro-Pac Packaging Limited is
responsible for the corporate governance of the Company
and its controlled entities (Pro-Pac) and to ensure that Pro-Pac
is directed and managed appropriately. In this regard, the
Board is committed to ensuring accountability and that control
systems are commensurate with the risks involved to enable
Pro-Pac to create value and optimise its performance.
During August 2007, the ASX Corporate Governance
Council released its Corporate Governance Principles and
Recommendations – 2nd edition (ASX Principles). The ASX
Listing Rules require Pro-Pac to provide a statement in its
Annual Report disclosing the extent to which they have
followed the best practice recommendations during the
reporting period, and if any recommendations are not
followed, an explanation is provided.
The Company’s Corporate Governance Statement is
structured with reference to the Australian Securities Exchange
(“ASX”) Corporate Governance Council’s (the “Council”)
“Corporate Governance Principles and Recommendations”,
which are as follows:
Principle 1 – Lay solid foundations for management and
oversight
Principle 2 – Structure the Board to add value
Principle 3 – Promote ethical and responsible decision
making
Principle 4 – Safeguard integrity in financial reporting
Principle 5 – Make timely and balanced disclosure
Principle 6 – Respect the rights of shareholders
Principle 7 – Recognise and manage risk
Principle 8 – Remunerate fairly and responsibly
A copy of the “Corporate Governance Principles and
Recommendations” can be found on the ASX’s website at
www.asx.com.au
However, the ASX Corporate Governance Council
acknowledged that “a one size fits all” approach is
inappropriate and that it is unwise to require all companies
to apply the same rules because different companies face
different circumstances hence some recommendations are
unnecessary or may even be counter-productive. In particular
it acknowledged that it may be inappropriate or uneconomic
for smaller companies, such as Pro-Pac, to follow the same
rules as Australia’s largest listed companies. Instead the
Council chose to issue a full suite of recommendations and
require companies to adopt an ‘if not why not’ approach to
reporting compliance with the recommendations. Companies
are at liberty to determine whether each recommendation
is appropriate to them. They are required to disclose in the
Corporate Governance Statement of their annual reports those
recommendations which they have not adopted during each
reporting period and provide explanations for their decisions.
A number of the best practice recommendations require the
formal documentation of policies and procedures that Pro-Pac
already substantially performs. Pro-Pac considers that to create
such further documentation independently and specifically for
Pro-Pac would have minimal additional benefit but substantial
additional expense. Pro-Pac is also mindful to not adopt such
procedures solely for the sake of adoption or where they could
actually inhibit the proper function or opportunities of Pro-Pac.
However it recognises that it has to put in place a compliance
program which includes the documentation of its compliance
policies and procedures and a Risk Management Statement
which considers the major risks to Pro-Pac operations, the
rating and ranking of these risks to set priorities in the treatment
of the risks. The Board has determined that the adoption of
such formal policies and procedures must be tailored to Pro-
Pac at minimal expense and must be appropriate for Pro-Pac,
taking into account the size and complexity of its operations.
This statement summarises the corporate governance
practices currently in place at Pro-Pac. The Board recognises
that in a changing world, it is important to review these
practices and policies from time to time to ensure they
continue to reflect local and international developments
and assist Pro-Pac in optimising its corporate performance
and accountability. Pro-Pac will continue to keep its corporate
governance practices under review. Key summaries of the
corporate governance practices and policies and other
key documents can be found on Pro-Pac’s website at
www.ppgaust.com.au
ASX Principle 1 – Lay solid foundations
for management and oversight
Companies should establish and disclose the
respective roles and responsibilities of board
and management.
• Recommendation 1.1: Companies should establish the
functions reserved to the board and those delegated to
senior executives and disclose those functions.
• Recommendation 1.2: Companies should disclose
the process for evaluating the performance of senior
executives.
• Recommendation 1.3: Companies should provide the
information indicated in the Guide to reporting on Principle 1.
Role of the Board
The Board has adopted a charter that establishes the role of
the Board and its relationship with management. The primary
role of the Board is the protection and enhancement of
long-term shareholder value. Its responsibilities include the
overall strategic direction of Pro-Pac, establishing goals for
management and monitoring the achievement of these
goals. The functions and responsibilities of the Board and
1 1
2013 Annual ReportFor personal use only 1 2
Corporate Governance statement
management are consistent with ASX Principle 1. A summary
of the matters reserved for the Board can be found in the
corporate governance section of the Pro-Pac website.
www.ppgaust.com.au
Pro-Pac has in place systems designed to fairly review and
actively encourage enhanced Board and management
effectiveness. The Chairman has the responsibility to review
continually the performance of each director and the Board
as a whole. The performance of the Board is reviewed regularly
against both measurable and qualitative indicators. The
performance criteria against which Directors and Executives
are assessed is aligned with the financial and non-financial
objectives of Pro-Pac. From time to time and, as considered
appropriate, the Chairman will seek external assistance and
advice to undertake these performance reviews.
A performance evaluation for senior executives was
undertaken during the reporting period. This entails an
evaluation of the executive against a pre-determined set of
objectives and key performance areas.
ASX Principle 2 – Structure the board
to add value
Companies should have a board of an effective
composition, size and commitment to adequately
discharge its responsibilities and duties.
• Recommendation 2.1: A majority of the board should be
independent directors.
• Recommendation 2.2: The chair should be an independent
director.
• Recommendation 2.3: The roles of chair and chief
executive officer should not be exercised by the same
individual.
• Recommendation 2.4: The board should establish a
nomination committee.
• Recommendation 2.5: Companies should disclose the
process for evaluating the performance of the board, its
committees and individual directors.
• Recommendation 2.6: Companies should provide the
information indicated in the Guide to reporting on Principle 2.
Structure of the Board
The skills, experience and expertise relevant to the position of
director held by each Director in office at the date of this Report
is included in the Directors’ Report. Corporate Governance
Council Recommendation 2.1 recommends that a majority
of the Board to be independent Directors. The Corporate
Governance Council defines independence as being free from
any business or other relationship that could materially interfere
with – or could reasonably be perceived to materially interfere
with – the independent exercise of their judgement.
When determining the independent status of a director the
Board would consider whether the Director is, inter alia:
• a substantial shareholder of the company or an officer
of, or otherwise associated directly with, a substantial
shareholder of the company
• employed, or has previously 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
In accordance with the above criteria, the following Director is
not considered to be independent:
Name
Reason for non-compliance
Brandon Penn
Executive Director
Mr Penn is employed by the Company
in an executive capacity, is a substantial
shareholder and a supplier of leasehold
premises.
Mr Kaplan and Dr Weiss are considered to be independent
and as such the Company does satisfy Corporate Governance
Council Recommendation 2.1 as it does have a majority of
independent directors.
The Board distinguishes between the concept of
independence and the issues of conflict of interest or material
personal interests which may arise from time to time.
Wherever there is an actual or potential conflict of interest or
material personal interest, the Board’s policies and procedures
ensure that the directors:
• fully and frankly inform the Board about the circumstances
giving rise to the conflict; and
• abstain from voting on any motion relating to the matter
and absenting himself or herself from Board deliberations
relating to the matter including receipt of Board papers
bearing on the matter.
If the Board resolves to permit a Director to have any
involvement in a matter involving possible circumstances of
conflicting interests, the Board will minute full details of the
basis of the determination and the nature of the conflict
including a formal resolution concerning the matter.
If a Director believes that he or she may have a conflict of
interest or duty in relation to a particular matter, the Director
should immediately consult with the Chairman. The Company
Secretary will maintain a register of all possible conflict of
interest situations.
The Company also has a Director’s Code of Conduct which
sets out standards to which each director will adhere whilst
conducting his duties. The code requires a Director, amongst
other things, to:
• act honestly, in good faith and in the best interests of the
Company as a whole;
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Annual Report 2013For personal use only Pro-Pac Packaging Limited
+ Controlled Entities
• perform the functions of office and exercise the powers
– the practices necessary to maintain confidence in the
attached to that office with a degree of care and diligence
that a reasonable person would exercise if he were a
Director in the same circumstances; and
• consider matters before the Board having regard to any
possible personal interests, the amount of information
appropriate to properly consider the subject matter and
what is in the best interests of the Company.
The Company considers industry experience and specific
expertise, as well as general corporate experience, to be
important attributes of its Board members. The Directors
noted above have been appointed to the Board due to their
considerable industry and corporate experience.
There are procedures in place, agreed by the Board, to
enable Directors, in furtherance of their duties, to seek
independent professional advice at the Company’s expense.
The term in office held by each Director in office at the date
of this report is listed below. Note that the Company was
incorporated in February 2005.
Name
Term in office
Elliott Kaplan
Brandon Penn
Gary Weiss
8 years and 8 months
6 years and 1 month
1 year and 4 months
The Company complied with the following best practice
recommendations throughout the financial year ended 30
June 2013:
• having a majority of independent Directors;
• having an independent Chairman for its Audit Committee;
Evaluation of the Board, its committees and directors is
undertaken by the Chairman during the course of the year.
Nomination and appointment of new directors
The Board has elected not to establish a formal Nominations
Committee to oversee the appointment and induction
process for Directors. The Board has determined that it may
deal more effectively with such matters as a single body. The
ASX Guidelines contemplate that a Nomination Committee
may not always be appropriate for Company’s with smaller
boards of directors.
ASX Principle 3 – Promote ethical and
responsible decision-making
Companies should actively promote ethical and
responsible decision-making.
• Recommendation 3.1: Companies should establish a code
of conduct and disclose the code or a summary of the
code as to:
company’s integrity;
– the practices necessary to take into account their legal
obligations and the reasonable expectations of their
stakeholders; and
– the responsibility and accountability of individuals for
reporting and investigating reports of unethical practices.
• Recommendation 3.2: Companies should establish a policy
concerning diversity and disclose the policy or a summary
of that policy. The policy should include requirements for
the board to establish measurable objectives for achieving
gender diversity for the board to assess annually both the
objectives and progress in achieving them.
• Recommendation 3.3: Companies should disclose in each
annual report the measurable objectives for achieving
gender diversity set by the board in accordance with the
diversity policy and progress towards achieving them.
• Recommendation 3.4: Companies should disclose in each
annual report the proportion of women employees in the
whole, organisation, women in senior executive positions
and women on the board.
• Recommendation 3.5: Companies should provide the
information indicated in the Guide to reporting on Principle 3.
In line with ASX Principle 3, the Board has established a Code
of Conduct and Securities Trading Policy.
Code of Conduct
The purpose of the Code of Conduct is to guide all
employees, including Directors as to:
• the practices necessary to maintain confidence in Pro-Pac’s
honesty and integrity;
• the responsibility and accountability of individuals for
reporting and investigating reports of unethical practices.
The overriding principle is that all business affairs of
Pro-Pac must be conducted legally, ethically and with
strict observance of the highest standards of propriety and
business ethics. If there are any doubts as to how to respond
to a particular circumstance, Directors and employees are
encouraged to consult with the Chairman or Company
Secretary and, if necessary, seek external professional advice.
Pro-Pac has in place a code of conduct which sets standards for
the Board and employees in dealing with Pro-Pac’s customers,
suppliers, shareholders and other stakeholders. A copy of this
code of conduct is available on the Pro-Pac website.
Diversity at Pro-Pac
The company respects people as individuals and values their
differences. It is committed to creating a working environment
that is fair and flexible, promotes personal and professional
growth, and benefits from the capabilities of its diverse
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Corporate Governance statement
workforce. The organisation employs people of each gender
as well as with varying skills, cultural backgrounds, ethnicity and
experience. Pro-Pac believes it’s diverse workforce is the key to
its continued growth, improved productivity and performance.
The company continually monitors the number of females
in executive, manager, supervisory and other roles in the
business. A summary of the number of females and males in
the company records:
• Recommendation 4.2: The audit committee should be
structured so that it:
– consists only of non-executive directors
– consists of a majority of independent directors
– is chaired by an independent chair, who is not chair of
the board
– has at least three members.
Executive Managers
Managers
Staff
Total
Women
1
10
151
162
Men
3
14
272
289
The company also maintains a flexible working policy to
provide flexible working arrangements including part time
and working from home. This is to ensure employees with
children are able to continue working and meet their home
responsibilities. The table below indicates the number of
people who have accessed the flexible working arrangement
during the year.
Full time
Part time
Casual
Total
Women
141
15
6
162
Men
268
2
19
289
Securities Trading Policy
A securities trading policy has been adopted and is binding
on all Directors, officers and employees of Pro-Pac. This policy
imposes trading restrictions on all Directors, officers and
employees of Pro-Pac in possession of ‘inside information’.
A copy of the Securities Trading Policy is posted on the
Pro-Pac website.
Directors are required to comply with the requirements of the
ASX Listing Rules and their letter of appointment and promptly
advise Pro-Pac of any dealing in Pro-Pac shares to allow
Pro-Pac to make the necessary disclosures to the ASX.
ASX Principle 4 – Safeguard integrity in
financial reporting
Companies should have a structure to
independently verify and safeguard the
integrity of their financial reporting.
• Recommendation 4.1: The board should establish an audit
committee.
• Recommendation 4.3: The audit committee should have a
formal charter.
• Recommendation 4.4: Companies should provide the
information indicated in the Guide to reporting on Principle 4.
ASX Principle 4 requires Pro-Pac to “have a structure to
independently verify and safeguard the integrity of the
company’s financial reporting”. The Board believes its
practices are in accordance with this principle.
Audit Committee
To assist in the execution of its responsibilities, the Board has
established an Audit Committee.
The structure of the Audit Committee and its responsibilities
reflect in part the requirements of ASX Principle 4. A summary
of the Charter setting out the Committee’s responsibilities is
posted on the Pro-Pac website.
It is the Board’s responsibility to ensure that an effective internal
control framework exists within the Company.
This includes internal controls to deal with both the effectiveness
and efficiency of significant business processes, the safe-
guarding of assets, the maintenance of proper accounting
records, and the reliability of financial information as well
as non-financial considerations such as the benchmarking
of operational key performance indicators. The Board has
delegated the responsibility for the establishment and
maintenance of a framework of internal control and ethical
standards for the management of the Company to the Audit
Committee.
The Committee also provides the Board with additional
assurance regarding the reliability of financial information for
inclusion in the financial reports.
The Committee comprises Dr Weiss and Mr Kaplan. Each
member is financially literate (i.e. they are able to read and
understand financial statements) and Mr Kaplan has financial
expertise (i.e. he is a Chartered Accountant). All members
have some understanding of the industry in which the
Company operates.
Recommendation 4.2 requires that the composition of Audit
Committee comprises a majority of independent Directors and
that the committee have at least three members. The Company
does not, given its size and the size of its Board, satisfy this
requirement although both members are independent.
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Annual Report 2013For personal use only
Pro-Pac Packaging Limited
+ Controlled Entities
For additional details of Directors’ attendance at Audit
Committee meetings and to review the qualifications of
the members of the Audit Committee, please refer to the
Directors’ Report.
ASX Principle 5 – Make timely and
balanced disclosure
Companies should promote timely and
balanced disclosure of all material matters
concerning the company.
• Recommendation 5.1: Companies should establish written
policies designed to ensure compliance with ASX Listing
Rule disclosure requirements and to ensure accountability
at a senior executive level for that compliance and disclose
those policies or a summary of those policies.
• Recommendation 5.2: Companies should provide the
information indicated in the Guide to reporting on Principle 5.
Consistent with ASX Principle 5, the Board aims to ensure
that all investors have equal and timely access to material
information concerning the Company, that there is compliance
with continuous disclosure requirements and that
announcements made by the Company are factual and
presented in a clear and balanced way.
The Company has adopted an External Communications
Policy reflecting the principles set out in ASX Principle 5. This
policy has been placed on the Pro-Pac website.
ASX Principle 6 – Respect the rights
of shareholders
Companies should respect the rights of
shareholders and facilitate the effective
exercise of those rights.
• Recommendation 6.1: Companies should design
a communications policy for promoting effective
communication with shareholders and encouraging their
participation at general meetings and disclose their policy
or a summary of that policy.
• Recommendation 6.2: Companies should provide the
information indicated in the Guide to reporting on Principle 6.
Pro-Pac has adopted a number of different practices
designed to promote effective communication with
shareholders as recommended by ASX Principle 6 and as
reflected in the Company’s External communications policy,
published on its website. These practices include placing
on the Pro-Pac website relevant information, including ASX
announcements, annual and half-year reports, copies of
notices of meetings, analyst briefings and presentations given
by the Chairman or Chief Executive Officer. Annual reports
are distributed to all shareholders by mail or email (unless a
shareholder has specifically requested not to receive these
documents).
A representative from the auditors of Pro-Pac attends the
annual general meeting and any other meeting as required
by the Board and is available to answer shareholder questions
about the conduct of the audit and preparation and content
of the auditor’s report. Shareholders are given the opportunity
to raise questions with any of the Directors at shareholder
meetings, both formally and informally.
The External communications policy also elaborates on the
Company’s continuous disclosure policy.
ASX Principle 7 – Recognise and
manage risk
Companies should establish a sound system of
risk oversight and management and internal
control.
• Recommendation 7.1: Companies should establish policies
for the oversight and management of material business risks
and disclose a summary of those policies.
• Recommendation 7.2: The board should require
management to design and implement the risk
management and internal control system to manage
the company’s material business risks and report to it on
whether those risks are being managed effectively. The
board should disclose that management has reported to it
as to the effectiveness of the company’s management of
its material business risks.
• Recommendation 7.3: The board should disclose whether
it has received assurance from the chief executive officer
(or equivalent) and the chief financial officer (or equivalent)
that the declaration provided in accordance with section
295A of the Corporations Act is founded on a sound system
of risk management and internal control and that the
system is operating effectively in all material respects in
relation to financial reporting risks.
• Recommendation 7.4: Companies should provide the
information indicated in the Guide to reporting on Principle 7.
ASX Principle 7 recommends that a company “establish a
sound system of risk and oversight and management and
internal control.”
In addition to its financial reporting obligations, the Audit
Committee is responsible for reviewing the risk management
framework and policies of Pro-Pac. The structure of the
Audit Committee and its responsibilities reflect in part the
requirements of ASX Principle 7 and are set out in the
Company’s Audit committee charter, published on its website.
In performing this function, the Committee receives periodic
reports from the external auditor, senior management and,
15
2013 Annual ReportFor personal use only 1 6 Corporate Governance statement
This Committee is responsible for ensuring that the recruitment
and remuneration policies and practices of Pro-Pac are
consistent with its strategic goals and human resources
objectives and are designed to enhance corporate and
individual performance as well as meet the appropriate
recruitment and succession planning needs.
To do this the Committee, among other things, is responsible
for reviewing and monitoring executive performance,
remuneration and incentive policies and the manner in which
they should operate, the introduction and operation of share
plans, executive succession planning and development
programs to ensure that they are appropriate to the Group’s
needs and the remuneration framework for Directors (as
approved by shareholders). The Committee may consult with
remuneration advisors to Pro-Pac to assist in its role.
The remuneration committee is also responsible to determine
and review compensation arrangements for the directors
and to ensure that the Board continues to operate within
the established guidelines, including when necessary,
selecting candidates for the position of director. In carrying
out its functions the Remuneration Committee considers
remuneration issues annually and otherwise as required
in conjunction with the regular meetings of the Board.
Compensation arrangements are determined subject to the
Company’s constitution and prior shareholder approvals.
Remuneration of non-executive Directors is in accordance with
resolutions of shareholders in general meeting. The Company
does not have any schemes for retirement benefits, other than
statutory superannuation for non-executive Directors.
Details of the directors and key executives remuneration are
set out in the Directors’ Report.
in some instances, external consultants detailing compliance
with statutory requirements and the adequacy of the risk
management programs and systems in place. In addition, the
Committee reviews the adequacy of the group’s insurance
program. In line with ASX Principle 7, Pro-Pac adopted the
policy requiring the Chief Executive Officer and Chief Financial
Officer to confirm in writing that, to the best of their knowledge,
the integrity of the financial statements is founded on a sound
system of risk management and internal compliance and
control which operates efficiently and effectively in all material
respects. The board has received the relevant declarations on
25 September 2013.
Note 21 details the policies set in place by the Board to
manage the risks arising from the Company’s financial
instruments.
ASX Principle 8 – Remunerate fairly
and responsibly
Companies should ensure that the level and
composition of remuneration is sufficient
and reasonable and that its relationship to
performance is clear.
• Recommendation 8.1: The board should establish a
remuneration committee.
• Recommendation 8.2: The remuneration committee should
be structured.
• Recommendation 8.3: Clearly distinguish the structure
of non-executive director’s remuneration from that of
executive directors and senior executives.
• Recommendation 8.4: Provide the information indicated in
the Guide to reporting on Principle 8.
It is the Company’s objective to provide maximum stakeholder
benefit from the retention of a high quality Board and
Executive team by remunerating directors and key executives
fairly and appropriately with reference to relevant employment
market conditions. To assist in achieving this objective, the
Board will link the nature and amount of directors’ emoluments
to the Company’s financial and operations performance.
The Board has in place a Remuneration Committee to assist
the Board in relation to human resources issues affecting
the Pro-Pac Group. The structure of this Committee and its
responsibilities reflect in part the requirements of ASX Principle
8. The Committee comprises Dr Weiss (Chairman) and Mr
Kaplan. In addition to the members, the Chief Executive is
invited to the meetings at the discretion of the Committee.
Refer schedule of meetings of directors on page 4.
A charter setting out the responsibilities of the Committee has
been adopted and a summary of this charter is posted on the
Pro-Pac website.
16
Annual Report 2013For personal use only Pro-Pac Packaging Limited + Controlled Entities
Consolidated statement of Profit or Loss and
Other Comprehensive Income
for the year to 30 June 2013
1 7
Revenue
Sale of goods
Other income
Interest income
Total Revenue
Expenses
Amortisation of prepaid royalty
Depreciation expense
Distribution costs
Employee benefits expense
Finance costs
Occupancy costs
Other expenses from ordinary activities
Raw materials and consumables used
Rationalisation and relocation expenses
Total Expenses
Profit before income tax from continuing operations
Income tax expense
Profit after income tax expense for the year
Other comprehensive income net of tax
Total comprehensive income for the year
Earnings per share (cents per share)
– Basic earnings per share
– Diluted earnings per share
Notes
Consolidated
2013
$000’s
Consolidated
2012
$000’s
173,131
234
62
173,427
322
2,747
6,220
28,054
839
6,228
11,316
108,733
1,740
166,199
7,228
(2,074)
5,154
-
5,154
133,053
-
106
133,159
322
2,493
4,050
23,785
1,160
4,771
7,129
80,545
763
125,018
8,141
(2,373)
5,768
-
5,768
2.46
2.44
3.65
3.61
15
5
6
6
The above statements should be read in conjunction with the accompanying notes.
17
2013 Annual ReportFor personal use only
1 8
Consolidated statement of Financial Position
as at 30 June 2013
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Prepayments
Total non-current assets
TOTAL ASSETS
Liabilities
Current liabilities
Trade and other payables
Trade finance
Borrowings
Provisions
Current tax liabilities
Total current liabilities
Non-current liabilities
Other payables
Provisions
Borrowings
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued Capital
Reserves
Retained earnings
TOTAL EQUITY
Notes
Consolidated
2013
$000’s
Consolidated
2012
$000’s
8
10
11
15
12
13
14
15
17
18
18
19
5
17
19
18
20
2,247
30,645
28,091
3,125
64,108
17,610
67,867
2,101
350
87,928
3,911
25,599
18,698
1,370
49,578
14,921
56,226
1,559
672
73,378
152,036
122,956
24,681
2,036
1,666
3,651
569
32,603
2,625
695
18,780
22,100
54,703
97,333
18,323
-
1,745
2,597
474
23,139
360
498
2,572
3,430
26,569
96,387
85,285
71
11,977
85,285
56
11,046
97,333
96,387
The above statements of financial position should be read in conjunction with the accompanying notes.
18
Annual Report 2013For personal use only
Pro-Pac Packaging Limited + Controlled Entities
Consolidated statement of Cash Flows
for the year to 30 June 2013
1 9
Notes
Consolidated
2013
$000’s
Consolidated
2012
$000’s
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Finance costs
Income tax paid
Relocation, restructuring and business combination costs
Net cash flows provided by operating activities
9
Cash flows from investing activities
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for unincorporated businesses net of cash acquired
Working capital for businesses acquired during the period
Net cash flows (used) in investing activities
Cash flows from financing activities
Payment of hire purchase and finance lease liabilities
Finance leases raised
Proceeds from borrowing
Repayment of loans
Proceeds from issue of shares
Dividend paid
Share issue transaction costs
Net cash flows provided by financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
8
Non-cash financing transactions
Hire purchase and finance lease liabilities raised
Issue of shares for dividend re-investment plan
176,071
(167,194)
62
(777)
(2,353)
(1,740)
4,069
(2,938)
61
(10,907)
(5,839)
(19,623)
(2,040)
1,267
18,886
-
-
(4,223)
-
13,890
(1,664)
3,911
2,247
1,267
-
128,887
(123,180)
106
(1,160)
(3,096)
(740)
817
(4,268)
336
(7,628)
-
(11,560)
(2,135)
2,220
6,400
(19,469)
28,000
(918)
(905)
13,193
2,450
1,461
3,911
2,220
1,914
The above statements of cash flow should be read in conjunction with the accompanying notes.
19
2013 Annual ReportFor personal use only
20 Consolidated statement of Changes in Equity
for the year to 30 June 2013
Issued
capital
$000’s
Retained
earnings
$000’s
Option
reserve
$000’s
Total
equity
$000’s
Consolidated
Balance as at 30 June 2011
54,005
8,110
Issue of shares for dividend re-investment plan
Dividend paid
Shares issued to vendors of businesses acquired
Recognition of share based payments
Shares issued under share placement
Cost of raising shares
Tax effect on cost of raising shares
Total comprehensive income for the year
Balance as at 30 June 2012
Dividend paid
Recognition of share based payments
Total comprehensive income for the year
Balance as at 30 June 2013
1,914
-
1,998
-
28,000
(905)
273
-
85,285
-
-
-
85,285
-
(2,832)
-
-
-
-
-
5,768
11,046
(4,223)
-
5,154
11,977
44
-
-
-
12
-
-
-
-
56
-
15
-
71
62,159
1,914
(2,832)
1,998
12
28,000
(905)
273
5,768
96,387
(4,223)
15
5,154
97,333
The above statements of changes in equity should be read in conjunction with the accompanying notes.
20
Annual Report 2013For personal use only
Pro-Pac Packaging Limited + Controlled Entities
Notes to the Financial Statements
for the year to 30 June 2013
21
Note 1: Corporate Information
The financial report of Pro-Pac Packaging Limited and its subsidiaries (“the Group”) for the year ended 30 June 2013 was
approved for issue in accordance with a resolution of the Directors on 25 September 2013.
Pro-Pac Packaging Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the
Australian Securities Exchange.
The nature of the operations and principal activities of the Group are described in the Directors’ Report.
Comparatives
Comparative figures have been adjusted where necessary to conform to changes in the presentation for the current financial
year where required by accounting standards or as a result of changes in accounting policies.
Note 2: Summary of Significant Accounting Policies
(a) New, revised or amending Standards and Interpretations adopted
The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
Any significant impact on the accounting policies of the consolidated entity from the adoption of these Accounting Standards
and Interpretations are disclosed in the relevant accounting policy. The adoption of these Standards and Interpretations did not
have any significant impact on the financial performance or position of the consolidated entity.
As at the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue but not
yet effective.
Standard/Interpretation
Effective for annual
reporting periods
beginning on or after
Expected to be
initially applied in the
financial year ending
AASB 9 ‘Financial Instruments’, and the relevant amending standards
1 January 2015
30 June 2016
AASB 10 ‘Consolidated Financial Statements’ and AASB 2011-7
‘Amendments to Australian Accounting Standards arising from the
consolidation and Joint Arrangements standards’
AASB 11 ‘Joint Arrangements’ and AASB 2011-7 ‘Amendments to
Australian Accounting Standards arising from the consolidation and
Joint Arrangements standards’
AASB 12 ‘Disclosure of Interest in Other Entities’ and AASB 2011-7
‘Amendments to Australian Accounting Standards arising from the
consolidation and Joint Arrangements standards’
AASB 127 ‘ Separate Financial Statements’ (2011) and AASB 2011-7
‘Amendments to Australian Accounting Standards arising from the
consolidation and Joint Arrangements standards’
AASB 128 ‘Investments in Associates and Joint Ventures’ (2011) and
AASB 2011-7 ‘Amendments to Australian Accounting Standards arising
from the consolidation and Joint Arrangements standards’
1 January 2013
30 June 2014
1 January 2013
30 June 2014
1 January 2013
30 June 2014
1 January 2013
30 June 2014
1 January 2013
30 June 2014
21
2013 Annual ReportFor personal use only
22 Notes to the Financial Statements
for the year to 30 June 2013
Note 2: Summary of Significant Accounting Policies (Cont.)
Standard/Interpretation
Effective for annual
reporting periods
beginning on or after
Expected to be
initially applied in the
financial year ending
AASB 13 ‘Fair Value Measurements’ and AASB 2011-8 ‘Amendments to
Australian Accounting Standards arising from AASB13’
1 January 2013
30 June 2014
AASB 119 ‘Employee Benefits’ (2011) and AASB 2011-10 ‘Amendments to
Australian Accounting Standards arising from AASB 119 (2011)’
1 January 2013
30 June 2014
AASB 2011-4 ‘Amendments to Australian Accounting Standards to
Remove Individual Key Management Personnel Disclosure Requirements’
1 July 2013
30 June 2014
AASB 2012-2 ‘Amendments to Australian Accounting Standards - Disclosures -
Offsetting Financial Assets and Financial Liabilities’
1 January 2013
30 June 2014
AASB 2012-3 ‘Amendments to Australian Accounting Standards -
Offsetting Financial Assets and Financial Liabilities”
1 January 2014
30 June 2015
AASB 2012-5 ‘Amendments to Australian Accounting Standards arising from
Annual Improvements 2009-2011 Cycle’
1 January 2013
30 June 2014
AASB 2012-10 ‘Amendments to Australian Accounting Standards -
Transition Guidance and Other Amendments’
1 January 2013
30 June 2014
(b) Basis of preparation
The financial report is a general purpose financial report, which
has been prepared in accordance with Australian Accounting
Standards, Australian Accounting Interpretations, other
authoritative pronouncements of the Australian Accounting
Standards Board and the requirements of the Corporations Act
2001. The financial report has been prepared on an accruals
basis and is based on historical costs. The financial report is
presented in Australian dollars.
In accordance with the Corporations Act 2001, these financial
statements present the results of the consolidated entity only,
supplementary information about the parent entity is disclosed
in note 29.
(c) Statement of compliance
The financial report complies with Australian Accounting
Standards. This ensures that the financial report, comprising
the financial statements and notes thereto, complies with
International Financial Reporting Standards.
(d) Basis of consolidation
A list of controlled entities is contained in Note 23 to the
Financial Statements.
The financial statements of subsidiaries are prepared for the
reporting year ended 30 June 2013 using accounting policies
consistent with the consolidated entity.
Adjustments are made to bring into line any dissimilar
accounting policies that may exist. All inter-company balances
and transactions, including unrealised profits or losses arising
from intra-group transactions, have been eliminated in full.
Subsidiaries are consolidated from the date on which control
is transferred to the Group and cease to be consolidated from
the date on which control is transferred out of the Group. Where
there is loss of control of a subsidiary, the consolidated financial
statements include the results for the part of the reporting
period during which Pro-Pac Packaging Limited had control.
(e) Business combinations
The acquisition method of accounting is used to account for
business combinations regardless of whether equity instruments
or other assets are acquired.
The consolidated financial statements comprise the financial
statements of Pro-Pac Packaging Limited and its subsidiaries as
at 30 June 2013.
The consideration transferred is the sum of the acquisition-date
fair values of the assets transferred, equity instruments issued
or liabilities incurred by the acquirer to former owners of the
22
Annual Report 2013For personal use only
Pro-Pac Packaging Limited + Controlled Entities
acquiree and the amount of any non-controlling interest in the
acquiree. For each business combination, the non-controlling
interest in the acquiree is measured at either fair value or
at the proportionate share of the acquiree’s identifiable net
assets. All acquisition costs are expensed as incurred.
Where the business combination is achieved in stages, the
consolidated entity remeasures its previously held equity
interest in the acquiree at the acquisition-date fair value
and the difference between the fair value and the previous
carrying amount is recognised in profit or loss.
Contingent consideration to be transferred by the acquirer
is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of contingent consideration classified
as an asset or liability is recognised in profit or loss. Contingent
consideration classified as equity is not remeasured and its
subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of
assets acquired, liabilities assumed and any non-controlling
interest in the acquiree and the fair value of the consideration
transferred and the fair value of any pre-existing investment
in the acquiree is recognised as goodwill. If the consideration
transferred and the pre-existing fair value is less than the fair
value of the identifiable net assets acquired, being a bargain
purchase to the acquirer, the difference is recognised as a
gain directly in profit or loss by the acquirer on the acquisition-
date, but only after a reassessment of the identification and
measurement of the net assets acquired, the non-controlling
interest in the acquiree, if any, the consideration transferred
and the acquirer’s previously held equity interest in the
acquirer.
Business combinations are initially accounted for on a
provisional basis. The acquirer retrospectively adjusts the
provisional amounts recognised and also recognises
additional assets or liabilities during the measurement period,
based on new information obtained about the facts and
circumstances that existed at the acquisition-date. The
measurement period ends on either the earlier of (i) 12 months
from the date of the acquisition or (ii) when the acquirer
receives all the information possible to determine fair value.
Goodwill is recognised initially at the excess of cost over the
acquirer’s interest in 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.
(f) Property, plant and equipment
Plant and equipment is stated at cost less accumulated
depreciation. Plant and equipment is depreciated using the
straight line and diminishing value methods over the estimated
useful lives.
The current depreciation rates are over 1 to 25 years.
An item of property, plant and equipment is de-recognised
upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any
gain or loss arising on de-recognition of the asset (calculated
as the difference between the net disposal proceeds and the
carrying amount of the item) is included in the statement of
profit or loss and other comprehensive income in the year the
item is de-recognised.
Impairment
The carrying values of plant and equipment are reviewed
for impairment when events or changes in circumstances
indicate the carrying value may not be recoverable. For
an asset that does not generate largely independent cash
inflows, the recoverable amount is determined for the cash-
generating unit to which the asset belongs.
If any such indication exists and where the carrying values
exceed the estimated recoverable amount, the assets or
cash-generating units are written down to their recoverable
amount.
The recoverable amount of plant and equipment is the
greater of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of
money and the risks specific to the asset.
(g) Borrowing costs
Borrowing costs are recognised as an expense when incurred.
(h) Goodwill
Goodwill on acquisition is initially measured at cost being
the excess of the cost of the business combination over the
acquirer’s interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less
any accumulated impairment losses. Goodwill is not amortised.
Goodwill is reviewed for impairment annually at reporting date
or more frequently if events or changes in circumstances
indicate that the carrying value may be impaired.
Impairment is determined by assessing the recoverable amount
of the cash generating unit to which the goodwill relates. Where
the recoverable amount of the cash generating unit is less than
the carrying amount, an impairment loss is recognised.
Where goodwill forms part of a cash-generating unit and part
of the operation within that unit is disposed of, the goodwill
associated with the operation disposed of is included in the
carrying amount of the operation when determining the gain
or loss on disposal of the operation. Goodwill disposed of in
this circumstance is measured on the basis of the relative
values of the operation disposed of and the portion of the
cash generating unit retained.
23
2013 Annual ReportFor personal use only 24 Notes to the Financial Statements
for the year to 30 June 2013
Note 2: Summary of Significant
Accounting Policies (Cont.)
(i) Recoverable amount of assets
At each reporting date, the Group assesses whether there
is any indication that an asset may be impaired. Where an
indicator of impairment exists, the Group makes a formal
estimate of recoverable amount. Where the carrying amount
of an asset exceeds its recoverable amount the asset is
considered impaired and is written down to its recoverable
amount.
Recoverable amount is the greater of fair value less costs to
sell and value in use. It is determined for an individual asset,
unless the asset’s value in use cannot be estimated to be
close to its fair value less costs to sell and it does not generate
cash inflows that are largely independent of those from other
assets or groups of assets, in which case the recoverable
amount is determined for the cash-generating unit to which
the asset belongs.
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of
money and the risks specific to the asset.
(j) Inventories
Inventories are valued at the lower of cost and net realisable
value.
Costs incurred in bringing each product to its present location
and condition are accounted for as follows:
• Raw materials – purchase cost on a first-in, first-out basis.
• Finished goods and work-in-progress – cost of direct
materials and direct labour and a proportion of
manufacturing overheads based on normal operating
capacity.
(k) Trade and Other receivables
Trade receivables, which generally have 30-90 day terms, are
recognised and carried at original invoice amount less an
allowance for any uncollectible amounts.
An estimate for doubtful debts is made when collection of the
full amount is no longer probable. Bad debts are written off
when identified.
(l) Cash and cash equivalents
Cash and short-term deposits in the statement of financial
position comprise cash at bank and in hand and short-term
deposits with an original maturity of three months or less.
For the purposes of the Statement of cash flow, cash and cash
equivalents consist of cash and cash equivalents as defined
above, net of outstanding bank overdrafts.
(m) Interest bearing loans and borrowings
All loans and borrowings are initially recognised at cost, being
the fair value of the consideration received net of issue costs
associated with the borrowing.
After initial recognition, interest bearing loans and borrowings
are subsequently measured at amortised cost using the
effective interest method. Amortised cost is calculated by
taking into account any issue costs, and any discount or
premium on settlement.
(n) Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event, for
which it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the
obligation.
If the effect of the time value of money is material, provisions
are determined by discounting the expected future cash flows
at a pre-tax rate that reflects current market assessments of
the time value of money and, where appropriate, the risks
specific to the liability.
Where discounting is used, the increase in the provision due to
the passage of time is recognised as a finance cost.
(o) 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 in 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
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.
(p) Leases
A distinction is made between finance leases which effectively
transfer from the lessor to the lessee substantially all the risks
and benefits incidental to ownership of the leased property,
without transferring the legal ownership, and operating leases
under which the lessor effectively retains substantially all the
risks and benefits.
Where assets are acquired by means of finance leases, lease
assets are established at the fair value of the leased assets
or, if lower, the present value of minimum lease payments
and amortised on a straight line basis over the expected
economic life. A corresponding liability is also established and
24
Annual Report 2013For personal use only Pro-Pac Packaging Limited + Controlled Entities
each lease payment is allocated between such liability and
interest expense. Operating lease payments are charged to
expense on a basis which is representative of the pattern of
benefits derived from the leased property.
(q) Revenue
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Group and the revenue can
be reliably measured. The following specific recognition criteria
must also be met before revenue is recognised:
Sale of goods
Revenue is recognised when the significant risks and rewards
of ownership of the goods have passed to the buyer and
can be measured reliably. Risks and rewards are considered
passed to the buyer at the time of delivery of the goods to
the customer.
Interest
Revenue is recognised as the interest accrues (using the
effective interest method, which is the rate that exactly
discounts estimated future cash receipts through the expected
life of the financial instrument) to the net carrying amount of
the financial asset.
(r) Income tax
The income tax expense (revenue) for the year comprises
current income tax (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 the
deferred tax asset and deferred tax liability balances during
the year as well as 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 base 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
substantially 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 are
expected to be recovered or settled.
Pro-Pac Packaging Ltd (the “head entity”) and its wholly owned
Australian controlled entities have formed a tax consolidated
group under the tax consolidated regime. Each entity in the
Group recognises its own current and deferred tax liabilities,
except for any deferred tax liabilities resulting from unused tax
losses and tax credits which are immediately assumed by the
parent entity. The current tax liability of each group entity is
then subsequently assumed by the parent entity
(s) Other taxes
Revenues, expenses and assets are recognised net of the
amount of GST except:
• where the GST incurred on a purchase of goods and
services is not recoverable from the taxation authority, in
which case the GST is recognised as part of the cost of
acquisition of the asset or as part of the expense item as
applicable; and
• receivables and payables are stated with the amount of
GST included.
The net amount of GST recoverable from, or payable to,
the taxation authority is included as part of receivables or
payables in the statement of financial position. Cash flows are
included in the Statement of cash flow on a gross basis and
the GST component of cash flows arising from investing and
25
2013 Annual ReportFor personal use only 26 Notes to the Financial Statements
for the year to 30 June 2013
Note 2: Summary of Significant
Accounting Policies (Cont.)
financing activities, which is recoverable from, or payable to,
the taxation authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the
amount of GST recoverable from, or payable to, the taxation
authority.
(t) Employee benefits
Provision is made for employee benefits accumulated as a
result of employees rendering services up to the reporting
date. These benefits include wages and salaries, annual leave
and long service leave. Liabilities arising in respect of wages
and salaries, annual leave and any other employee benefits
expected to be settled within 12 months of the reporting date
are measured at the amounts expected to be paid when
the liability is settled. All other employee benefit liabilities
are measured at the present value of the estimated future
cash outflow to be made in respect of services provided by
employees up to the reporting date.
(u) Financial Instruments
Recognition
Financial instruments are initially measured at cost on trade
date, which includes transactions costs, when the related
contractual rights or obligations exist. Subsequent to initial
recognition these instruments are measured as set out below.
Loans and receivables
Loans and receivables are non-derivate financial assets with
fixed or determinable payments that are not quoted in an
active market and are stated at amortised cost using the
effective interest rate method.
Financial liabilities
Non-derivate financial liabilities are recognised at amortised
cost, comprising original debt less principal payments and
amortisation.
(v) Foreign Currency Transactions 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. Exchange
differences arising on the translation of monetary items
are recognised in the statement of profit or loss and other
comprehensive income.
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
(i) 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.
No impairment is considered necessary in respect of goodwill
based on key estimates used in assessing recoverable
amounts.
Key Judgements
(i) Provision for impairment of receivables
Current trade and term receivables are non-interest bearing
loans and generally on 30-60 days terms. Trade and term
receivables are assessed for recoverability based on the
underlying terms of the contract. A provision for impairment is
recognised when there is objective evidence that an individual
trade or term receivable is impaired. These amounts have been
included in the other expenses from ordinary activities item.
Note 3: Operating Segments
The Group has identified its operating segments based on
the internal reports that are reviewed and used by the Board
of Directors (chief operating decision makers) in assessing
performance and determining the allocation of resources.
The Group is managed primarily on the basis of product
category and service offerings since the diversification of the
Group’s operations inherently have notably different risk profiles
and performance assessment criteria. Operating segments
are therefore determined on the same basis.
Reportable segments disclosed are based on aggregating
operating segments where the segments are considered to
have similar economic characteristics and are also similar with
respect to the following:
• The products sold and/or services provided by the
segment;
• The manufacturing process;
Types of products and services by segment
Industrial packaging
(w) Critical Accounting estimates and judgements
The directors evaluate estimates and judgements incorporated
into the financial report based on historical knowledge and
The Industrial packaging division manufactures, sources
and distributes industrial packaging materials and related
products and services. All products produced or distributed
26
Annual Report 2013For personal use only are aggregated as one reportable segment as the products
are similar in nature and are distributed to similar types of
customers. The industrial packaging segment also installs,
supports and maintains packaging machines.
Rigid packaging
The Rigid packaging division manufactures, sources and
distributes containers and closures and related products and
services. All products produced or distributed are aggregated
as one reportable segment as the products are similar in
nature and are manufactured and distributed to similar types
of customers.
Basis of accounting for purposes of reporting by
operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of
Directors as the chief decision maker with respect to operating
segments are determined in accordance with accounting
policies that are consistent to those adopted in the annual
financial statements of the Group.
Inter-segment transactions
An internally determined transfer price is set for all inter-entity
sales. This price is re-set quarterly and is based on what would
be realised in the event the sale was made to an external
party at arm’s length. All such transactions are eliminated on
consolidation for the Group’s financial statements.
Inter-segment loans payable and receivable are initially
recognised at the consideration received net of transaction
costs. If inter-segment loans receivable and payable are
not on commercial terms, these are not adjusted to fair
value based on market interest rates. This policy represents
a departure from that applied to the statutory financial
statements.
Segment Assets
Where an asset is used across multiple segments, the asset
is allocated to the segment that receives the majority of
economic value from the asset. In the majority of instances
segment assets are clearly identifiable on the basis of their
nature and physical location.
Unless indicated otherwise in the assets role, investments in
financial assets, deferred tax assets and intangible assets have
not been allocated to operating segments.
Segment Liabilities
Liabilities are allocated to segments where there is direct
nexus between the incurrence of the liability and the
operations of the segment. Borrowings and tax liabilities are
generally considered to relate to the Group as a whole and
are not allocated. Segment liabilities include trade and other
payables and certain borrowings.
Pro-Pac Packaging Limited + Controlled Entities
Unallocated items
The following items of revenue, expenses, asset and liabilities
are not allocated to operating segments as they are not
considered part of the core operations of any segment:
• impairment of assets and other non-recurring revenue or
expenses;
• income tax expense;
• deferred tax assets and liabilities;
• current tax liabilities;
• other financial liabilities;
27
2013 Annual ReportFor personal use only 28 Notes to the Financial Statements
for the year to 30 June 2013
Note 3: Operating Segments (Cont.)
Rigid
Industrial
packaging packaging
$000’s
2013
$000’s
2013
Intersegment
eliminations/
unallocated
$000’s
2013
Rigid
Total packaging
$000’s
2012
$000’s
2013
Intersegment
Industrial eliminations/
unallocated
$000’s
2012
packaging
$000’s
2012
Total
$000’s
2012
(i) Segment performance
12 months ended 30 June
Revenue
External sales
Inter-segment sales
51,815
7,687
121,316
8,338
- 173,131
(16,025)
-
47,901
6,850
85,152
7,756
- 133,053
-
(14,606)
Total segment revenue
59,502
129,654
(16,025)
173,131
54,751
92,908
(14,606)
133,053
6,724
7,349
(2,999)
11,074
(3,069)
62
(839)
7,228
(2,074)
5,154
6,262
8,045
(2,297)
12,010
(2,815)
106
(1,160)
8,141
(2,373)
5,768
EBITDA
Depreciation & amortisation
Interest revenue
Finance costs
Profit before income tax
Income tax expense
Profit after income tax
(ii) Segment assets
As at 30 June
Segment assets
45,538
103,257
- 148,795
45,534
73,206
- 118,740
Reconciliation of segment
assets to group assets
Inter-segment eliminations
Unallocated assets
– Deferred tax assets
– Other
Total group assets from
continuing operations
(iii) Segment liabilities
As at 30 June
(1,497)
4,738
2,101
2,637
152,036
(1,959)
6,175
1,559
4,616
122,956
Segment liabilities
10,479
27,846
-
38,325
10,988
16,531
- 27,519
Reconciliation of segment
liabilities to group liabilities
Inter-segment eliminations
Unallocated liabilities
– Deferred tax liabilities
– Other liabilities
Total group liabilities from
continuing operations
(1,451)
17,829
-
17,829
54,703
(1,665)
715
-
715
26,569
(iv) The Group operates solely within Australia. As such there is only one geographical segment.
28
Annual Report 2013For personal use only
Pro-Pac Packaging Limited + Controlled Entities
Note 4: Expenses
Profit before income tax includes the following expenses:
Bad and doubtful debts – trade
Rental expense on operating leases:
– minimum lease payments
Note 5: Income Tax
Major components of income tax for the year ended 30 June are:
Current income tax
Current income tax charge
Adjustments in respect of previous years
Adjustments in respect of permanent differences
Deferred income tax
Relating to temporary differences
Income tax expense in statement of profit or loss and other comprehensive income
A reconciliation of income tax expense applicable to accounting profit before
income tax at the statutory income tax rate to income tax expense at the Group’s
effective income tax rate for the year ended 30 June 2013 is as follows:
Accounting profit before tax
At the statutory income tax rate of 30%
Special tax allowances net of expenditure not allowable for tax purposes
Adjustments in respect of previous years
Adjustments in respect of permanent differences
At effective income tax rate of 28.7% (2012: 28.0%)
Income tax expense reported in statement of profit or loss and other
comprehensive income
Tax consolidation
The Financial report has been prepared on the basis that the Group has
adopted the provisions of the tax consolidation regime for the years ended
30 June 2013 and 30 June 2012.
Consolidated
2013
$000’s
Consolidated
2012
$000’s
110
5,949
2,398
(17)
(94)
(213)
2,074
7,228
2,168
-
-
(94)
2,074
199
4,453
2,664
34
-
(325)
2,373
8,141
2,442
(17)
(52)
-
2,373
2,074
2,373
Current tax liability
569
474
29
2013 Annual ReportFor personal use only
30 Notes to the Financial Statements
for the year to 30 June 2013
Note 6: Earnings per Share
Basic and diluted earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity
holders of the parent by the weighted average number of ordinary shares outstanding during the period.
The following reflects the income and share data used in the total operations basic and diluted earnings per share computations:
Consolidated
2013
Consolidated
2012
Net profit attributable to equity holders ($000’s)
Weighted average number of ordinary shares for basic earnings per share
5,154
209,452,804
5,768
158,176,354
Basic earnings per share (cents per share) *
Diluted earnings per share (cents per share) *
2.46
2.44
3.65
3.61
* The difference between basic and diluted shares on issue represents the PPG Executive
Long Term Incentive Plan (ESPP) shares on issue which are treated as an option grant.
Note 7: Dividends Paid and Proposed
On 28 August 2013, the Company declared a fully franked final dividend of 1.0 cent per share. The record date for determining
entitlements to the dividend is 11 September 2013 and the dividend will be paid on 25 September 2013. The Company’s
Dividend Reinvestment Plan did not apply to the final dividend. When combined with PPG’s interim dividend of 1.0 cent, paid
on 16 May 2013, this brings total fully franked dividends for the 2012/13 financial year to 2.0 cents per share.
Declared and paid during the year:
Final dividend for 2012 – 1 cent per ordinary share
(2011 – 1 cent per ordinary share)
Interim dividend for 2013 – 1 cents per ordinary share
(2012 – 1 cent per ordinary share)
Proposed for approval at the Directors Meeting
(not recognised as a liability as at 30 June):
Final dividend for 2013 – 1 cent per ordinary share
(2012 – 1 cent per ordinary share)
2013
$000’s
2012
$000’s
2,111
1,397
2,112
4,223
1,435
2,832
2,122
2,110
Franking credit balance
As indicated in note 5, the financial report has been prepared on the basis that the group
has adopted the provisions of the tax consolidation regime for the years ended 30 June 2013
and 30 June 2012. As such franking credits arising from the other Group companies totalling
$13,025,190 (2012: $12,481,697) will be available to the parent entity.
Franking credits available at the reporting date based on a tax rate of 30%
Franking credits that will arise from the payment of the amount of the provision for
income tax at the reporting date based on a tax rate of 30%
Franking credits available for subsequent financial years based on a tax rate of 30%
Franking debits that will arise from the payment of dividends declared subsequent
to the reporting date based on a tax rate of 30%
Net franking credits available based on a tax rate of 30%
12,482
2,544
15,026
(2,001)
13,025
10,599
3,097
13,696
(1,214)
12,482
30
Annual Report 2013For personal use only
Pro-Pac Packaging Limited + Controlled Entities
Consolidated
2013
$000’s
Consolidated
2012
$000’s
Note 8: Cash and Cash Equivalents
Cash at bank and in hand
2,247
3,911
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates
The fair value of cash and cash equivalents
2,247
3,911
Reconciliation of cash
For the purposes of the Statement of cash flow, cash and cash equivalents comprise the
following at 30 June:
Cash at bank and in hand
2,247
3,911
Note 9: Cash Flow Information
(a) Reconciliation from the net profit after tax to the net cash flows from operations
Net profit after tax
Add/(Less) non-cash items:
Depreciation and amortisation of plant and equipment
Amortisation of pre-paid royalty
(Profit)/Loss on disposal of assets
Movement in income tax provision
Movement in deferred tax assets and liabilities
Movement in provision for bad debts
Other non-cash movements
Changes in assets and liabilities:
Receivables
Inventories
Payables
Provisions
Prepayments
Net cash flows from operating activities
(b) Non-cash financing and investing activities
During the year, the consolidated Group acquired plant with an aggregate value of
$1,267,451 (2012: $2,219,825) by means of finance leases.
(c) Credit standby arrangements with banks
Credit facility
Amount utilised
Loan facilities
Amount utilised
5,154
2,727
322
69
95
(542)
(54)
29
941
(1,772)
(1,558)
414
(1,756)
4,069
1,500
-
28,100
21,525
5,768
2,493
322
257
(441)
(283)
87
11
(5,830)
(1,973)
227
378
(199)
817
1,000
-
24,100
-
3 1
2013 Annual ReportFor personal use only
32 Notes to the Financial Statements
for the year to 30 June 2013
Note 10: Trade and Other Receivables
Current:
Trade receivables
Provision for impairment of receivables
Opening balance
Additional provision recognised
Receivables written off during the year as uncollectable
Other debtors
Total current receivables
Consolidated
2013
$000’s
Consolidated
2012
$000’s
29,767
(338)
(309)
(139)
110
1,216
30,645
23,779
(309)
(219)
(289)
199
2,129
25,599
Trade receivables are non-interest bearing and are generally on terms between 30 and 60 days.
Credit risk – Trade and Other Receivables
The Group has no significant concentration of credit risk with respect to any single counter party or group of counter parties. The
class of assets described as Trade and Other Receivables is considered to be the main source of credit risk related to the Group.
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 as agreed between the Group and the customer or counter party 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 trading terms (as detailed in the below table) are considered to be of
high credit quality.
Gross
amount
Past due &
impaired
$000’s
$000’s
Past due but
not impaired
> 90
$000’s
Past due but
not impaired
61 - 90
$000’s
Within initial
trade terms
$000’s
Consolidated
2013
Trade and term receivables
Other receivables
29,767
1,216
338
-
325
-
Total
30,983
338
325
2012
Trade and term receivables
Other receivables
23,779
2,129
309
-
Total
25,908
309
83
-
83
2,163
-
2,163
1,594
-
1,594
26,941
1,216
28,157
21,793
2,129
23,922
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.
32
Annual Report 2013For personal use only
Pro-Pac Packaging Limited + Controlled Entities
Consolidated
2013
$000’s
Consolidated
2012
$000’s
983
27,108
28,091
913
17,785
18,698
27,787
(10,177)
17,610
22,601
(7,680)
14,921
Note 11: Inventories
Raw materials (lower of cost and net realisable value)
Finished goods (lower of cost and net realisable value)
Total inventories at lower of cost and net realisable value
Note 12: Property, Plant and Equipment
At 30 June
Plant and equipment
At cost
Accumulated depreciation
Total property, plant and equipment
(a) Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the
end of the current financial year.
Balance at the beginning of the year
Additions arising from business acquisitions during the year
Additions
Disposals
Depreciation charge for the year
Carrying amount at the end of the year
Consolidated
2013
$000’s
Consolidated
2012
$000’s
Owned
14,921
2,629
2,938
(131)
(2,747)
17,610
Owned
13,099
663
4246
(594)
(2,493)
14,921
33
2013 Annual ReportFor personal use only
34 Notes to the Financial Statements
for the year to 30 June 2013
Notes
Consolidated
2013
$000’s
Consolidated
2012
$000’s
Note 13: Intangible Assets
Goodwill
Carrying amount at beginning of the year
Acquisition through business combinations
24
Closing value
At 30 June
Gross
Accumulated impairment losses
Net carrying value
56,226
11,641
46,758
9,468
67,867
56,226
67,867
-
67,867
56,226
-
56,226
Impairment Test for Goodwill
The Group and all of its subsidiaries are divided into two major cash generating units as these are the smallest groups of
identifiable assets that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
Goodwill acquired through business combinations has been allocated to the cash-generating-units for impairment testing.
The recoverable amount of the cash generating unit has been determined based on a value-in-use calculation. Based on the
value-in-use calculations undertaken by management, Goodwill has not been impaired (see note 26).
Note 14: Deferred Tax Assets
Deferred tax assets
Deferred tax assets comprise:
Provisions and other timing differences
Transactions costs on equity issue
Reconciliation of gross movements
The overall movement in the deferred tax account is as follows:
Opening balance
Tax effect of share issue cost
Tax effect of AL and LSL on acquisitions
Other permanent differences brought to account
Charge to statement of comprehensive income
Closing balance
Deferred tax assets
The movement in deferred tax assets for each temporary difference during the year is as follows:
Provisions and other timing differences at 1 July
Reclassification
Credit/(charge) to statement of comprehensive income
At 30 June
Transaction cost to equity issue at 1 July
Tax effect of share issue cost
Reclassification
Charge to statement of comprehensive income
At 30 June
34
1,940
161
2,101
1,559
-
235
94
213
2,101
1,338
-
602
1,940
221
-
-
(60)
161
1,338
221
1,559
962
272
-
-
325
1,559
893
73
372
1,338
69
289
(73)
(64)
221
Annual Report 2013For personal use only
Pro-Pac Packaging Limited + Controlled Entities
Consolidated
2013
$000’s
Consolidated
2012
$000’s
2,803 1,048
322
322
3,125
1,370
350
350
672
672
Note 15: Prepayments
(a) Current prepayments
Other prepayments
Prepaid royalty
Total current prepayments
(b) Non-current prepayments
Prepaid royalty
Total non-current prepayments
Prepayment of royalty
The prepayment of the royalty is amortised over the remaining period of the exclusive licence to manufacture and distribute
biodegradable flowable void fill products. The prepaid royalty amortised for the year ended 30 June 2013 amounted to
$322,082 (2012: $322,082).
Note 16: Employee Benefits
Executive Long Term Incentive Plan
In March 2005 the Company established an ESPP to encourage employees to share in the ownership of the Company and
promote the long-term success of the Company as a goal shared by the employees. The ESPP has been approved by members
of the Company for the purposes of sections 260C(4)(a), 259B(2)(a), 257B(1) and paragraph (b) of the definition of employee share
scheme buy-back in section 9 of the Corporations Act.
The following are the key terms and conditions of the ESPP:
• No Shares under the ESPP will be allotted unless the requirements of the Corporations Act 2001 and the ASX Listing Rules have
been complied with.
• Performance hurdles apply to the ESPP. The key performance hurdle is that the total shareholder return to shareholders of the
Company must exceed the rate of growth over the same period for the S&P/ASX Small Ordinaries Accumulation Index (or any
equivalent or replacement of that index).
• Shares are allocated to employees at either the value of shares as detailed in the latest disclosure document issued by the
Company or the 5-day weighted average price immediately prior to the offer being made to employee.
• The Company may provide loans to participants to acquire shares under the ESPP. As security for the loans, Participants will
pledge the shares acquired under the ESPP to the Company at the time the loans are provided and will grant a charge over
any benefits attributable to the Shares, including bonus shares, rights, and dividends. Any dividends paid on the shares by
Pro-Pac Packaging Limited are treated as interest on the loan.
• The term of the loans and the vesting period for the shares from the date of issue of the ESPP is 3 years.
• The Shares will be registered in the names of the Participants from allotment, but will remain subject to restrictions on dealing while
they are pledged as security for a loan or subject to performance hurdles specified.
• If the employee leaves the employment of the Group, the loan balance must be repaid in full or the shares would be
surrendered in full settlement of the outstanding loan balance.
• During the year 430,000 shares were issued to staff and executives under the ESPP while 160,000 were forfeited and cancelled.
At the end of the year 1,805,000 shares were in issue under the ESPP.
35
2013 Annual ReportFor personal use only
36 Notes to the Financial Statements
for the year to 30 June 2013
Note 16: Employee Benefits (Cont.)
• No other features of the benefit provided (including vesting conditions) were incorporated into the measurement of fair value.
• The fair value of the employee benefit provided under the ESPP plan is estimated at the date of grant using the binomial model,
and the following assumptions: expected volatility, risk-free interest rate, expected life of option, share price, dividend yield and
probability of achievement.
• Under Australian Accounting Standards, shares issued to executives under the Long Term Executive Incentive Plan are now
considered to be options granted. As such, the contributed equity (share capital) as well as the related receivable are not
recognised on the statement of financial position and do not form part of the asset base in the calculation of the basic
net assets and basic net tangible assets per security. Comparative figures for the prior financial year have been adjusted
accordingly.
Grant Date
Expiry Date
Price
Balance at
beginning of year
Granted
Exercised
Expired/
forfeited
Balance at
end of year
2013
30/08/2010
12/04/2011
05/04/2012
17/10/2012
2012
30/08/2010
12/04/2011
05/04/2012
30/08/2013
11/04/2014
04/04/2015
16/10/2015
0.325
0.325
0.500
0.485
1,325,000
10,000
200,000
430,000
150,000
10,000
1,175,000
-
200,000
430,000
1,535,000
430,000
-
160,000
1,805,000
30/08/2013
11/04/2014
04/04/2015
0.325
0.325
0.500
1,325,000
10,000
200,000
1,535,000
1,325,000
10,000
200,000
-
-
-
1,535,000
Note 17: Trade and other Payables
Current
Unsecured:
Trade payables
GST payable
Other tax payable
Sundry creditors and accruals
Contingent deferred payments to vendors for acquisitions
Non-current
Unsecured:
Contingent deferred payments to vendors for acquisitions
Consolidated
2013
$000’s
Consolidated
2012
$000’s
15,355
808
525
4,431
3,562
24,681
2,625
2,625
13,278
609
448
3,988
-
18,323
360
360
Trade payables are non-interest bearing and are normally settled on 60 day terms. The net of GST payable and GST receivable is
remitted to the appropriate tax body on a quarterly basis.
36
Annual Report 2013For personal use only
Pro-Pac Packaging Limited + Controlled Entities
Note 18: Interest Bearing Loans and Borrowings
Current
Finance lease and hire purchase (see note 25)
Trade Finance
Bank loan (secured)
Non-current
Finance lease and hire purchase (see note 25)
Bank loan (secured)
Consolidated
2013
$000’s
Consolidated
2012
$000’s
1,666
2,036
-
3,702
1,869
16,911
18,780
1,737
-
8
1,745
2,572
-
2,572
(a) The bank loan is secured as follows:
i)
first ranking registered equitable mortgage over Pro-Pac Packaging Limited and all wholly owned subsidiaries;
ii) cross interlocking guarantees from Pro-Pac Packaging Limited and all wholly owned subsidiaries.
(b) The bank loan is subject to the following covenants:
i)
it will ensure that for each 2 consecutive reporting periods ending 30 June and 31 December, the ratio of EBITDA to
total debt service will not fall below 2.00:1 and further ensure that the ratio of EBITDA to total debt service will not fall below
1.50:1 for any 6 month reporting period
ii)
it will ensure that for each preceding 12 calendar month period the ratio of total senior debt to EBITDA does not exceed
3.00:1; and
iii) it will ensure that for each 6 month period ending 30 June and 31 December, the ratio of total tangible assets to total senior
debt will not fall below 1.45:1.
(c) The bank loan facility is subject to review on 30 November 2014.
Note 19: Provisions
Current
Employee entitlements
Opening balance
Arising on acquisition of business combinations
Additional provisions
Amount used
Closing balance
Non-current
Employee entitlements
Opening balance
Arising on acquisition of business combinations
Additional provisions
Amount used
Closing balance
2,597
686
2,138
(1,770)
3,651
498
150
159
(112)
695
2,212
53
1816
(1,484)
2,597
395
58
140
(95)
498
37
2013 Annual ReportFor personal use only
38 Notes to the Financial Statements
for the year to 30 June 2013
Note 20: Issued Capital
Ordinary shares
Issued and fully paid
Movement in ordinary shares on issue
Balance at 1 July 2011
Issue of shares under the Executive Long Term Incentive Plan
Capital raising
Cost of raising shares
Issue of shares under the dividend re-investment plan
Shares issued to vendors of businesses acquired
Balance at 30 June 2012
Issue of shares under the Executive Long Term Incentive Plan
Cancellation of shares under Executive Long Term Incentive Plan
Consolidated
2013
$000’s
Consolidated
2012
$000’s
85,285
85,285
Number
139,735,576
200,000
62,222,223
-
4,746,673
4,083,332
210,987,804
430,000
(160,000)
$000’s
54,005
-
28,000
(632)
1,914
1,998
85,285
-
-
Balance at 30 June 2013
211,257,804
85,285
There was no par value for the shares issued. The company has an Executive Long Term Incentive Plan under which the company’s
shares have been granted (refer note 16).
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The consolidated entity’s and parent entity’s objectives when managing capital are to safeguard their ability to continue as a going
concern, so that they can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital
structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the consolidated entity and parent entity may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity and parent entity would look to raise capital when an opportunity to invest in a business or company was
seen as value adding relative to the current parent entity’s share price at the time of the investment.
The consolidated entity and parent entity are subject to certain financing arrangements covenants and meeting these are given
priority in all capital risk management decisions. There have been no events of default on the financing arrangements during the
financial year.
The capital risk management policy remains unchanged from the 30 June 2012 Annual Report.
38
Annual Report 2013For personal use only
Pro-Pac Packaging Limited + Controlled Entities
Note 21: Financial Risk Management Objectives and Policies
The Group’s principal financial instruments comprise bank loans, finance leases and hire purchase contracts, cash and short-term
deposits. The main purpose of these financial instruments is to finance the Group’s operations.
The Group has various other financial instruments such as trade debtors and trade creditors, which arise directly from its operations.
It is, and has been throughout the period under review, the Group’s policy that no trading in financial instruments shall be
undertaken.
The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk, foreign currency risk and credit risk.
The board reviews and agrees policies for managing each of these risks and they are summarised below.
Interest rate risk
The Group’s exposure to interest rate risk is limited to interest receivable and payable on bank accounts and drawn down bank
loans. The interest rates contained in the finance lease and hire purchase agreements are fixed for the term of those arrangements.
All cash balances are at call and the average interest rate on the deposits is 3.1%.
Foreign currency risk
The Group has transactional currency exposures. Such exposure arises from purchases by the operating unit in currencies other than
the unit’s measurement currency which accounted for 33.9% of purchases of materials and capital items. Forward contracts are
used to manage foreign currency risk.
Commodity price risk
The Group’s exposure to commodity price risk is relatively low although certain petrochemical based products are affected by the
oil price.
Credit risk
The Group has policies in place to ensure that customers who wish to trade on credit terms are subject to credit verification
procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad
debts is not significant.
With respect to credit risk arising from the other financial assets of the Group, which comprise cash and cash equivalents, the
Group’s exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the carrying amount of
these instruments. There are no significant concentrations of credit risk within the Group.
Liquidity risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans and
finance leases and hire purchase contracts.
Note 22: Financial Instruments
Unless otherwise stated the carrying amounts of financial instruments reflect their fair value. The carrying amounts of trade
receivables and trade payables are assumed to approximate their fair values due to their short-term nature. The fair value of
financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest rate that is
available for similar financial instruments.
39
2013 Annual ReportFor personal use only 40 Notes to the Financial Statements
for the year to 30 June 2013
Note 22: Financial Instruments (Cont.)
Interest rate risk
The following table sets out the interest rates applicable to financial instruments that are exposed to interest rate risk:
Floating
interest rate
Fixed
interest rate
Non-interest
bearing
Total carrying
amount per the
statement of
financial position
Weighted
average
interest rate
2013
$000’s
2013
$000’s
2013
$000’s
2013
$000’s
2013
%
Consolidated
(i) Financial assets
Cash assets
Receivables
2,237
-
-
-
10
30,645
2,247
30,645
Total financial assets
2,237
-
30,655
32,892
(ii) Financial liabilities
Finance leases (current)
Finance leases (non-current)
Trade finance (current)
Bank loans (current)
Bank loans (non-current)
Payables (current)
Total financial liabilities
-
-
2,036
-
16,911
-
18,947
1,666
1,869
-
-
-
3,535
-
-
-
-
24,681
24,681
1,666
1,869
2,036
-
16,911
24,681
47,163
Net financial assets/(liabilities)
(16,710)
(3,535)
5,974
(14,271)
There is no interest rate applicable on receivables or payables.
3.1
7.8
7.8
5.6
5.6
5.6
2012
$000’s
2012
$000’s
2012
$000’s
2012
$000’s
2012
%
Consolidated
(i) Financial assets
Cash assets
Receivables
3,898
-
-
-
13
25,599
3,911
25,599
Total financial assets
3,898
-
25,612
29,510
(ii) Financial liabilities
Finance leases (current)
Finance leases (non-current)
Bank loans (current)
Bank loans (non-current)
Payables (current)
Total financial liabilities
-
-
-
-
-
-
1,745
2,572
-
-
-
4,317
-
-
-
-
18,683
18,683
1,745
2,572
-
-
18,683
23,000
Net financial assets/(liabilities)
3,898
(4,317)
6,929
6,510
4.0
7.9
7.9
7.0
7.0
40
Annual Report 2013For personal use only
Pro-Pac Packaging Limited + Controlled Entities
Note 22: Financial Instruments (Cont.)
The following table sets out the carrying amount, by maturity, of the financial instruments that are exposed to interest rate risk:
Year ended 30 June 2013
< 1
year
$000’s
>1 - <2
years
$000’s
>2 - <3
years
$000’s
>3 - <4
years
$000’s
>4 - <5
years
$000’s
> 5
years
$000’s
Total
$000’s
Consolidated
Cash assets
Finance leases
Bank loans
2,237
1,666
-
-
1,160
16,911
-
470
-
-
215
-
-
24
-
-
-
-
2,237
3,535
16,911
Year ended 30 June 2012
< 1
year
$000’s
>1 - <2
years
$000’s
>2 - <3
years
$000’s
>3 - <4
years
$000’s
>4 - <5
years
$000’s
> 5
years
$000’s
Consolidated
Cash assets
Finance leases
Bank loans
3,898
1,745
-
-
1,372
-
-
840
-
-
253
-
-
107
-
-
-
-
Total
$000’s
3,898
4,317
-
The other financial instruments of the Group and Parent that are not included in the above tables are non-interest bearing and are
therefore not subject to interest rate risk.
Sensitivity analysis
The following table illustrates sensitivities to the Group’s exposures to changes in interest rates and exchange rates. The table
indicates the impact on how profit and equity values reported at reporting date would have been affected by changes in the
relevant risk variable that managers considers to be reasonably possible. These sensitivities assume that the movement in a
particular variable is independent of other variables.
2013
+/- 1% in interest rates
+/- 10% in AUD / USD
2012
+/- 1% in interest rates
+/- 10% in AUD / USD
Consolidated
Profit
$000’s
Consolidated
Equity
$000’s
+/- 89
+/- 4,267
+/- 110
+/- 1,586
+/- 89
+/- 4,267
+/- 110
+/- 1,586
41
2013 Annual ReportFor personal use only
42 Notes to the Financial Statements
for the year to 30 June 2013
Note 23: Controlled Entities
The consolidated entity includes the following controlled entities. The financial years of all controlled entities are the same as that of
the parent entity. All companies are incorporated in Australia.
Country of
Incorporation
Direct Controlled Entities
Pro-Pac Group Pty Ltd
Plastic Bottles Pty Ltd
Controlled Entities owned 100% by Pro-Pac Group Pty Ltd
Pro-Pac Packaging (Aust) Pty Ltd
Pro-Pac (GLP) Pty Ltd
Controlled Entities owned 100% by Plastic Bottles Pty Ltd
Specialty Products and Dispensers Pty Ltd
Australian Bottle Manufacturers Pty Ltd
Ctech Closures Pty Ltd
Bev Cap Pty Ltd
Controlled Entities owned 100% by Pro-Pac Packaging (Aust) Pty Ltd
Pro-Pac Packaging Manufacturing (Syd) Pty Ltd
Pro-Pac Packaging Manufacturing (Melb) Pty Ltd
Pro-Pac Packaging Manufacturing (Bris) Pty Ltd
Creative Packaging Pty Ltd
Controlled Entities owned 100% by Bev-Cap Pty Ltd
Great Lakes Moulding Pty Ltd
Finpact (Pty) Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Class of
Shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Equity
Holding
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Entities subject to class order relief
The following entities are party to a deed of cross guarantee under which each company guarantees the debts of the others:
Pro-Pac Packaging Limited
Plastic Bottles Pty Ltd
Pro-Pac Group Pty Ltd
By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare a financial report and
directors’ report under Class Order 98/1418 (as amended) issued by the Australian Securities and Investments Commission (‘ASIC’).
As parent entity, Pro-Pac Packaging Limited and other group entities, Pro-Pac Group Pty Ltd and Plastic Bottles Pty Ltd as disclosed
above are party to the deed of cross guarantee, the Statement of Profit and Loss and Other Comprehensive Income and the
Statement of Financial Position of the entities that are party to the deed of cross guarantee are as presented in the Consolidated
Statement of Profit and Loss and Other Comprehensive Income on page 17 and Consolidated Statement of Financial Position
presented on page 18.
42
Annual Report 2013For personal use only
Pro-Pac Packaging Limited + Controlled Entities
Note 24: Business Combinations
Acquisition of businesses
The Group acquired the business and assets of the following:
Effective date Acquired
Location
Business description
1/07/12
Start Food-Tech Australia
Geelong
National supplier of packaging consumables and products to the meat,
chicken and fish processing industries
1/07/12
1/11/12
1/11/12
1/02/13
1/02/13
1/05/13
1/06/13
Metro Cartons
Source & Sell
Stronghold
Abpak
Melbourne Niche carton and industrial products distributor
Sydney
Melbourne Niche distributor of general industrial products
Sydney
Packaging supplier to the food industry including growers, packers and bakers
Adelaide
Poly Products
Sydney
Eco Food Pack
Australian Flexographic Printers Sydney
Niche supplier of packaging consumables and products to the meat
processing industry
Flexible extruder, printer and converter
Packaging supplier to fresh meat, seafood and poultry industries
Printing and laminating flexible films
The effect of the above transactions can be summarised as follows:
Assets
Current Assets
Inventories
Trade debtors
Other receivables
Total Current Assets
Non-current Assets
Property, plant and equipment
Total Non-current Assets
Total Assets
Liabilities
Current Liabilities
Trade and other payables
Total Current Liabilities
Non-current Liabilities
Other liabilities
Total Non-current Liabilities
Total Liabilities
NET ASSETS
Consideration Paid
Cash
Contingent deferred payments
Total
GOODWILL
Acquisition costs expensed to profit or loss
Fair Value
$000’s
3,107
2,146
816
6,069
2,629
2,629
8,698
3,199
3,199
406
406
3,605
5,093
10,907
5,827
16,734
11,641
123
43
2013 Annual ReportFor personal use only
44 Notes to the Financial Statements
for the year to 30 June 2013
Note 24: Business Combinations (Cont.)
Part of the Groups business plan is to grow through both organic growth and acquisitions. Acquisitions are undertaken to expand the
product offering and the sectors in which the Group operates.
Goodwill comprises inter alia the loyalty attached to trading names and brands acquired, contracts secured with major customers
and established chains of supply.
For the year ended 30 June 2013, the acquired business contributed the following earnings to the consolidated Group.
Acquisition to
30 June 2013
Revenue
$000’s
Acquisition to
30 June 2013
Profit before income tax
$000’s
Annualised to
June 2013
Revenue
$000’s
Annualised to
June 2013
Profit before income tax
$000’s
Start Food-Tech
Source & Sell
Stronghold
Eco
Poly Products
AFP
Total business acquisitions
11,207
4,058
2,741
1,696
5,726
164
25,592
Cash used to acquire businesses
Cash consideration paid
Less: Cash and cash equivalents acquired
Total
971
419
167
305
274
56
2,192
10,907
-
10,907
11,207
6,087
4,112
10,176
13,742
1,968
47,292
971
629
251
1,830
658
672
5,011
44
Annual Report 2013For personal use only
Pro-Pac Packaging Limited + Controlled Entities
Note 25: Commitments and Contingencies
Operating lease commitments – Group as lessee
The Group has entered into commercial leases which are non-cancellable. The leases have varying terms, escalation clauses
and renewal rights. On renewal, the terms of the leases are renegotiated. Renewals are at the option of the specific entity that
holds the lease.
The Group also leases various items of machinery under cancellable operating leases.
There are no restrictions placed upon the lessee by entering into these leases.
Future minimum rentals payable under non-cancellable operating leases as at 30 June are as follows:
Within one year
After one year but not more than five years
More than five years
Figures exclude GST
Consolidated
2013
$000’s
Consolidated
2012
$000’s
4,565
10,819
1,272
16,656
3,950
11,544
1,352
16,846
Finance lease and hire purchase commitments
The Group has finance leases and hire purchase contracts for various items of plant and machinery.
Future minimum lease payments under finance leases and hire purchase contracts together with the present value of the net
minimum lease payments are as follows:
Within one year
After one year but not more than five years
Total minimum lease payments
2013
Minimum
payments
$000’s
1,857
1,996
3,853
Less amounts representing future finance charges
(318)
Present value of minimum lease payments
3,535
Representing lease liabilities
Current
Non-current
2013
$000’s
1,666
1,869
3,535
The weighted average interest rate implicit in the leases is 7.8%.
2013
Present value
of payments
$000’s
2012
Minimum
payments
$000’s
2012
Present value
of payments
$000’s
1,666
1,869
3,535
-
3,535
2,031
2,797
4,828
(519)
4,309
2012
$000’s
1,737
2,572
4,309
1,737
2,572
4,309
-
4,309
45
2013 Annual ReportFor personal use only
46 Notes to the Financial Statements
for the year to 30 June 2013
Note 25: Commitments and Contingencies (Cont.)
Contingent Liability
As at statement of financial position date, the Company issued security deposit guarantees and standby letters of credits to the
value of $674,780 to the landlords of rented premises and overseas suppliers.
Capital Expenditure Commitments
As at statement of financial position date the Company had no commitments for future capital expenditure.
Capital commitments - Property, plant and equipment
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Note 26: Impairment Testing of Goodwill
Carrying amount of goodwill
Carrying amount of goodwill Industrial Division
Carrying amount of goodwill Rigid Division
Total carrying amount of goodwill
Consolidated
2013
$
Consolidated
2012
$
158,170
-
158,170
45,772
22,095
67,867
-
-
-
34,131
22,095
56,226
The Group and all of its subsidiaries are divided into two major cash generating units, the industrial and rigid divisions, as these are
the smallest groups of identifiable assets that generate cash inflows that are largely independent of the cash inflows from other
assets or groups of assets. Goodwill acquired through business combinations has been allocated to the cash-generating-units for
impairment testing.
The recoverable amount of the consolidated entity’s goodwill has been determined by a value-in-use calculation using a
discounted cash flow model, based on a one year projection period approved by management and extrapolated for a further
4 years using a steady growth rate, together with a terminal value.
Key assumptions are those to which the recoverable amount of an asset or cash-generating units is most sensitive.
The following key assumptions were used in the discounted cash flow model for the industrial and rigid divisions:
(a) 11.0% pre-tax discount rate; (2012: 12.2%)
(b) 5.5% for industrial division (2012: 8%) and 2.2% for rigid division (2012: 1.6%) per annum projected revenue growth rate;
(c) 5.5% for industrial division (2012: 8%) and 2.2% for rigid division (2012: 1.6%) per annum increase in operating costs and
overheads.
The discount rate of 11.0% pre-tax reflects management’s estimate of the time value of money and the consolidated entity’s
weighted average cost of capital, the risk free rate and the volatility of the share price relative to market movements.
Projected growth rates are based on historical performance over the last three years and current trends which management
believes are achievable during the forecasted period.
46
Annual Report 2013For personal use only
Pro-Pac Packaging Limited + Controlled Entities
Note 26: Impairment Testing of Goodwill (Cont.)
Sensitivity
The directors have made judgements and estimates in respect of impairment testing of goodwill. Should these judgements and
estimates not occur the resulting goodwill may vary in the carrying amount. The sensitivities are as follows:
(a) the discount rate would need to increase to 14.5% for the Industrial division and to 14% for the Rigid division before goodwill
would be impaired. A rate of 11.0% was used in the assessment of goodwill.
(b) the EBITDA growth rate would need to decrease to negative 2% in the Industrial division and to negative 1% in the Rigid division
before goodwill would be impaired. EBITDA growth rates of 3% and 2% respectively, were used in the assessment of goodwill
for the Industrial and Rigid divisions respectively.
Note 27: Related Party Disclosure
Parent Entity
Pro-Pac Packaging Limited is the ultimate parent entity of the Group.
Subsidiaries
Interests in subsidiaries are set out in note 23.
Transactions with Key Management Personnel
The Company or members of the Group have entered into the following agreements with the following Key Management Personnel
or entities related to them: Hadrian Morrall and Brandon Penn.
Hadrian Morrall
• Remuneration paid
• Payments to Morrall Penn Holdings Pty Ltd and The Penn Morrall Partnership
for rental related to the Sydney, Melbourne and Brisbane properties (inc GST)
– 9 Widemere Road, Wetherill Park, NSW
– Unit 15/129 Robinson Road, Geebung, QLD
– 32 Hinkler Road, Mordialloc, VIC
Brandon Penn
• Remuneration paid
• Payments to Morrall Penn Holdings Pty Ltd and The Penn Morrall Partnership
for rental related to the Sydney, Melbourne and Brisbane properties (inc GST)
– 9 Widemere Road, Wetherill Park, NSW
– Unit 15/129 Robinson Road, Geebung, QLD
– 32 Hinkler Road, Mordialloc, VIC
Consolidated
2013
$
Consolidated
2012
$
239,687
234,508
796,405
581,505
125,203
89,697
790,680
587,055
116,351
87,274
247,384
240,000
796,405
581,505
125,203
89,697
790,680
587,055
116,351
87,274
Total payments to related parties during the year ended 30 June 2013 was $1,283,836 (2012: $1,265,188).
47
2013 Annual ReportFor personal use only
48 Notes to the Financial Statements
for the year to 30 June 2013
Note 28: Key Management Personnel Disclosure
Key Management Personnel at 30 June 2013
Elliott Kaplan
Dr Gary Weiss
Brandon Penn
Hadrian Morrall
Wendy Penn
Mark Saus
Non-executive Chairman
Non-executive Director
Executive Director
Divisional Managing Director
Divisional Managing Director
Chief Financial Officer and Company Secretary
Remuneration of Key Management Personnel
Excluding the Directors, there are only three staff members of the Company who qualify as “Key Management Personnel” for
the purposes of this report. The executive key management personnel are also the most highly paid executive officers of the
consolidated entity for the year under review. For more details refer to the remuneration report as included in directors’ report.
Note 29: Parent Entity Information
Set out below is the supplementary information about the parent entity.
Profit for the year
Total comprehensive income
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Contributed equity
Reserves
Retained profits/(accumulated losses)
Total equity
Parent
2013
$’000
2012
$’000
4,237
4,237
1,214
87,822
2,513
2,513
85,285
-
24
85,309
4,258
4,258
3,008
87,336
2,042
2,042
85,285
-
9
85,294
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 2, except
for the following:
– Investments in subsidiaries are accounted for at cost, less any impairment.
48
Annual Report 2013For personal use only
Pro-Pac Packaging Limited + Controlled Entities
Note 30: Events after the Statement of Financial Position Date
Effective 1 August 2013 Pro-Pac Packaging Manufacturing (Syd) Pty Ltd, a wholly owned subsidiary, acquired the business and assets
of Labels Plus (NSW) Pty Ltd trading as Fast Labels. Fast Labels is a niche label manufacturer operating in Sydney with annualised
turnover of circa $800,000.
On 28 August 2013, the Company declared a fully franked final dividend of one cent per share. For details refer to the Directors’
Report on page 5.
Note 31: Auditors’ Remuneration
Amounts paid or due payable to UHY Haines Norton for:
– audit or review of the financial report and half-year financial report
– due diligence relating to acquisitions
Consolidated
2013
$
Consolidated
2012
$
109,000
-
105,000
51,000
Note 32: Accounting Standards Issued or Amended
A number of accounting standards have either been issued or amended since year end but are not effective for the financial year
ended 30 June 2013. The Group does not at this time believe these have any material impact on the 2013 financial report or for
the ensuing year.
49
2013 Annual ReportFor personal use only
50
Directors’ declaration
The directors of the company declare that:
1.
The financial statements and notes, as set out on pages 17 to 49, are in accordance with the Corporations Act 2001 and:
(a) comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements;
(b) give a true and fair view of the consolidated entity’s financial position at 30 June 2013 and of its performance for the
year ended on that date;
(c) comply with International Financial Reporting Standards as disclosed in Note 2 (c) to the financial statements.
2.
The Chief Executive Officer and Chief Financial 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;
(b) the financial statements and notes for the financial year comply with the accounting standards; and
(c) the financial statements and notes for the financial year give a true and fair view; and
3.
4.
In the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and
when they become due and payable.
At the date of this declaration, there are reasonable grounds to believe that the entities that are party to the deed of cross
guarantee as described in note 23 to the financial statements will be able to meet any obligation or liabilities to which they
are, or may become, subject by virtue of the deed of cross guarantee.
Signed in accordance with a resolution of the Board of Directors pursuant to section 295 (5) (a) of the Corporations Act 2001.
On behalf of the Board on 25 September 2013.
Elliott Kaplan
Chairman
Brandon Penn
Director
50
Annual Report 2013For personal use only
Pro-Pac Packaging Limited + Controlled Entities
Independent Auditor’s report
5 1
Independence
In conducting our audit, we have complied with the
independence requirements of the Corporations Act 2001.
Opinion
In our opinion:
(a) the financial report of Pro-Pac Packaging Limited, is in
accordance with the Corporations Act 2001, including:
i. giving a true and fair view of the consolidated entity’s
financial position as at 30 June 2013 and of its
performance for the year ended on that date; and
ii. complying with the Australian Accounting Standards
and the Corporations Regulations 2001; and
(b) the consolidated financial report also complies with
International Financial Reporting Standards as disclosed
in Note 2(c).
Report on the Remuneration Report
We have audited the Remuneration Report included in pages
5 to 8 of the directors’ report for the year ended 30 June
2013. The directors of the company are responsible for the
preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001.
Our responsibility is to express an opinion on the Remuneration
Report, based on our audit conducted in accordance with
Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Pro-Pac Packaging
Limited, for the year ended 30 June 2013, complies with
section 300A of the Corporations Act 2001.
M.D. Nicholaeff
UHY Haines Norton
Partner
Chartered Accountants
Signed at Sydney on 25 September 2013.
To the members of Pro-Pac Packaging Limited
Report on the Financial Report
We have audited the accompanying financial report of
Pro-Pac Packaging Limited, which comprises the consolidated
statement of financial position as at 30 June 2013, the
consolidated statement of profit or loss and other
comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash
flows for the year then ended, notes comprising a summary
of significant accounting policies and other explanatory
information, and the directors’ declaration of the consolidated
entity comprising the company and the entities it controlled at
the year’s end or from time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the
preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and
the Corporations Act 2001, and for such internal control as
the directors determine is necessary to enable the preparation
of the financial report that is free from material misstatement,
whether due to fraud or error.
In Note 2(c), the directors also state, in accordance with
Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial statements comply with
International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial
report based on our audit. We conducted our audit in
accordance with Australian Auditing Standards. Those
standards require that we comply with relevant ethical
requirements relating to audit engagements and plan and
perform the audit to obtain reasonable assurance about
whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the financial
report. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or
error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation of the
financial report that gives a true and fair view in order
to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of
accounting estimates made by the directors, as well as
evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit
opinion.
5 1
2013 Annual ReportFor personal use only
52 Additional Company information
Additional information required by the Australian Stock Exchange Limited and not shown elsewhere in this report is as follows.
The information is current as at 16 September 2013.
(a) Distribution of equity securities
Table 1: The number of holders, by size of holding, in each class of security are (includes ESPP shares):
Holdings Ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and over
Totals
Holders
Total Units
82
127
135
681
108
10,316
413,895
1,104,719
25,810,590
185,018,284
1,133
212,357,804
%
0.005
0.195
0.520
12.154
87.126
100.00
There are eighty five holders of unmarketable parcels totalling 13,831 shares representing 0.0065% of the Company’s issued capital.
(b) Twenty largest holders
Table 2: The names of the twenty largest holders, in each
class of security are:
Rank Holder
No. Ordinary Shares
%
(c) Substantial shareholders
The names of substantial shareholders who have notified
the Company in accordance with Section 671B of the
Corporations Act 2001 are:
1 BENNAMON PTY LTD
2 MR BRANDON ARI PENN
108,006,266 50.86
Bennamon Pty Limited
108,006,266 ordinary shares
21,815,015 10.27
Mr Brandon Penn
24,438,842 ordinary shares
(d) Voting rights
All ordinary shares carry one vote per share without restriction.
(e) Restricted securities
Restricted securities total 2,905,000.
ESPP Shares under escrow
until 30 August 2013
ESPP Shares under escrow
until 4 April 2015
ESPP Shares under escrow
until 16 October 2015
ESPP Shares under escrow
until 21 July 2016
1,175,000 ESPP shares
200,000 ESPP shares
430,000 ESPP shares
1,100,000 ESPP shares
(f) Business objectives
The Company has used its cash and assets that are readily
convertible to cash in a way consistent with its business
objectives.
3 NATIONAL NOMINEES LIMITED
6,406,600
3.02
4
5
AUST EXECUTOR TRUSTEES LTD
BNP PARIBAS NOMINEES PTY LTD
ACF PENGANA
6 MR GRANT JULIAN MADDOCK
7
8
RUBI HOLDINGS PTY LTD
MR BRANDON PENN & MRS WENDY PENN
9 MRS NATALIE PENN
10 INVIA CUSTODIAN PTY LIMITED
6,222,465
2.93
3,333,333
3,187,864
1.57
1.50
3,000,000
1.41
2,250,000
1,200,344
1.06
0.57
1,000,000
0.47
11 J K M SECURITIES PTY LIMITED
1,000,000
0.47
12 MISCHKE INVESTMENTS PTY LTD
13 MISCHKE INVESTMENTS PTY LTD
14 NIGHTINGALE PARTNERS PTY LTD
15 RUBICON NOMINEES PTY LTD
16 MR CRAIG STEWART FOX &
MRS TONI ROSEMARY FOX
957,850
0.45
938,841
904,625
900,000
0.44
0.43
0.42
759,780
0.36
17 SM & RS PTY LTD 750,000 0.35
18 SONHILL INVESTMENTS PTY LTD
19 EQUITY TRUSTEES LIMITED
20 MR MARK SAUS
Top 20
Total
52
723,310
0.34
720,604
600,000
0.34
0.28
164,676,897 77.55
212,357,804
Annual Report 2013For personal use only
Our environment
We believe very strongly in the
conservation of our environment, its
resources and the recycling of as much
product as possible. We believe in living
the practice of ‘reduce’, ‘reuse’, ‘recover’
and ‘recycle’. These four practices are
at the centre of our commitment to a
better environment. Wherever possible
we endeavour to provide environmentally
friendly solutions to our customers, whether
these are in the form of biodegradable
voidfill, plastics alternatives and formulas
and/or an effort to reduce the amount or
type of packaging a customer requires.
We recognise that protecting the
environment is the responsibility of us all.
Printed on Maine Recycled Silk
design – Kettle of Fish Design
For personal use only Pro-Pac
Packaging Limited
147-151 Newton Road
Wetherill Park
NSW Australia 2164
phone (02) 8781 0500
(02) 8781 0599
fax
email sales@pro-pac.com.au
web www.ppgaust.com.au
For personal use only