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09
PROPE R TY 4 INV EST MENT S 4 MANU FACTURING
FINANCIAL HIGHLIGHTS
Sales Revenue from Continuing Operations ($’000)
Rental Income from Investment Properties ($’000)
Profit Before Income Tax ($’000)
Profit After Tax ($’000)
Earnings Per Share
4,867
4,776
461
540
0.9 cent
s 14.5%
s 8.6%
t (34%)
t (11%)
t (10%)
Notice of Annual General Meeting
The 2009 Annual General Meeting of PPK Group Limited will be held at:
3:00pm on Tuesday, 24 November 2009 at The Grace Hotel,
77 York Street, Sydney.
The business of the meeting is outlined in the Notice of Meeting and Proxy Form.
ASX look-up code:
PPK
Website:
www.ppkgroup.com.au
Share Registry:
www.registries.com.au
PPK Group Limited
ABN 65 003 964 181
P A G E 2
Contents
Chairman and Managing Director’s Overview
Five year financial summary
Directors’ Report
Statement of Corporate Governance Practices - 2009
Financial Statements
Corporate Directory
1
4
5
22
36
Inside back cover
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
CHAIrm AN ANd mANAGING dIreCT or’S oVerVIew
The significant and prolonged volatility in the Australian share
market continued to impact the performance of PPK during the
2009 financial year.
Profit after tax for the full year ended 30 June 2009 was $540,000
equating to an earnings per share (EPS) of 0.9 cents.
After recording an after tax loss for the first half year of $524,000
the Company generated an after tax profit of $1.064 million in the
second half year evidencing a significant and positive change in
overall performance during this period.
The full year’s results include a non cash write-down of $2.755
million in the value of listed shares and derivatives held by PPK as
at 30 June 2009 offset by profit before tax from trading operations
(including rental income and earnings by Rambor) of $3.084
million.
PPK made strategic investments during the year which are more
fully outlined in the Review of Operations section of the Directors’
Report.
Despite some improvement in market conditions and
performance late in the second half year, the Australian share
market remained volatile during the year. While there are
emerging signs of the world economy improving, the prevailing
volatility of the Australian share market could continue to impact
on the value attributed to these investments in subsequent
reporting periods.
The economic conditions have also had an impact on the leasing
of industrial properties owned by PPK to the purchaser of its
packaging businesses.
The current tenant has not exercised the five (5) year lease options
on two (2) PPK properties; one (1) of these located in Brisbane
and the other in Sydney. The lease over each property expired
on 31 August 2009 and each property is currently being actively
marketed for re-lease. The combined rental income from these
two (2) properties was $1.35 million per annum.
PPK is also involved in a legal dispute with the purchaser of
its packaging businesses regarding its tenancy of the property
located in Arndell Park in Sydney. The dispute relates to whether
there exists a binding lease in respect of the property subsequent
to 31 August 2009. The Arndell Park property currently generates
$1.23 million in rental income per annum for PPK and the lease is
due to expire on 31 August 2013. This matter is presently before
the Court.
PPK’s manufacturing business, Rambor, delivered an improved
performance this year compared to the previous reporting period.
Sales increased from $4.251 million to $4.867 million and profit
before tax increased from $650,000 to $1.064 million. Rambor
is expected to continue to deliver a strong contribution to the
Group’s consolidated result in the 2010 year.
During the reporting period, PPK had in place an on-market buy-
back scheme comprising the on-market buy back of up to 10%
of the prevailing issued capital of the Company (or 6,100,181 PPK
shares) inclusive of shares bought back by PPK in the 12 month
period preceding the announcement of the on market buy back
on 19 December 2007.
The on-market buy back scheme:
•
•
commenced on 7 January 2008; and
concluded on 6 January 2009.
PPK acquired:
• 1,245,963 shares at a cost of $784,000 (or an average of 62.9
cents per shares) during the 2009 financial year; and
• a total of 2,995,166 shares under the scheme (inclusive
of shares purchased in prior reporting periods) at a cost of
$2,166,883 (or an average price of approximately 72 cents per
share).
As at the date of this report, PPK has 58,006,650 ordinary shares
on issue.
Colin ryan CHAIRMAN
david Hoff MANAGING DIRECTOR
P A G E 1
Chairman and managing d irector’s o verview (continued)
The Company paid an interim fully franked dividend of 1.5 cents
per share in March 2009 and the Directors have resolved to pay a
final fully franked dividend of 1.0 cent per share on 21 November
2009 bringing the total fully franked dividend for the year ended
30 June 2009 to 2.5 cents per share.
The Directors will continue to monitor the impact of current share
market volatility on PPK investments. Future dividends will be
assessed on the performance of PPK in these future periods.
Corporate Governance
PPK continues its adherence to the Company’s established
corporate governance framework consistent with the ASX
Principles of Good Corporate Governance and Best Practice
Recommendations and this year PPK reports on the revised
principles and recommendations released by the ASX Corporate
Governance Council in August 2007. Copies of the documents
underlying this framework are publicly accessible on the
Company’s website at www.ppkgroup.com.au.
our People
PPK’s people provide the Company with the competitive
advantage required to satisfy the needs of its customers,
shareholders and other stakeholders.
The Board would like to record its appreciation of the on-going
dedication and commitment of our employees during the year.
PPK will continue to promote the fostering of a supportive, family
oriented and co-operative work place within a performance based
environment where innovation, initiative and productivity are
encouraged and rewarded.
Human resource policies, practices and procedures are in place
which policies are designed to attract, engage and retain the
highest possible calibre of employees.
t Rambor AFC-LFD Rig installing Hilti one-step bolts at Springvale
Colliery, Lithgow, New South Wales
P A G E 2
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Chairman and managing d irector’s o verview (continued)
Privacy
PPK has developed a Privacy Disclosure Statement consistent
with the National Privacy Principles incorporated in prevailing
privacy laws dealing with the collection, use, disclosure,
security, access and accuracy of information available to it
during the course of its business operations. The Company has
appointed a designated Privacy Officer to deal with queries
regarding the application of the policy. A copy of the PPK
Privacy Disclosure Statement is detailed on the Company
website at www.ppkgroup.com.au.
Future direction & Business outlook
The future direction and business outlook for PPK is detailed
within the Review of Operations and under the heading
Future Direction & Business Outlook, each contained within the
Directors’ Report included in this year’s Annual Report.
Commitment to occupational, Health, Safety &
environment
During this year, the Company continued its strong commitment
to the prevention of injuries and harm in the workplace with
positive results achieved through the continued success of its
comprehensive workplace health and safety systems and policies.
The year in review saw continuing focus and commitment
to health and safety through a group wide commitment to
maintaining the highest occupational health and safety standards
for the benefit of its employees, contractors and visitors.
Information relating to occupational health and safety issues
continues to be regularly considered by the Board which makes
recommendations, where necessary, for the improvement in
workplace systems and practices.
The Company also has a comprehensive employment practices
manual which confirms minimum standards of behaviour of
employees, contractors, directors and officers while reinforcing
the importance of compliance with applicable laws and
regulations including those relating to occupational health and
safety obligations.
PPK is also committed to the minimisation of the consumption of
resources at all of its facilities and in its manufacturing operations.
Colin Ryan
Chairman
David Hoff
Managing Director (retired)
To this end, the Company has an established Environment Policy
which may be found on its website at www.ppkgroup.com.au.
P A G E 3
2009
2008
2007
2006
2005
4,251
4,396
702
607
64,144
21,069
38,309
38,309
6,998
11.5
1,153
59,253
41,477
1.6
1.0
55.0
56.3
2.25
63.1
34,112
4,403
16,760
10,111
98,408
2,101
2,979
4,292
89,572
-
4,140
3,153
63,473
123,693
129,602
9,184
46,959
46,959
4,562
7.0
45.1
61,186
47,725
21.5
15.9
19.6
19.9
42.8
75.3
58,235
46,187
46,338
4,425
6.5
103.1
68,153
51,115
9.3
6.3
126.0
139.9
5.1
61.1
58,895
46,237
47,190
4,420
6.5
140.2
68,003
61,203
6.8
4.6
124.8
140.3
2.43
63.3
FIVe YeAr FINANCIAL SUmm Ar Y
Five Year Historical Performance
Consolidated
Income Statement
Sales Revenue
Rental Income
Profit Before Income Tax
Net profit attributable to members of PPK Group Limited
Balance Sheet
Total assets
Net debt
Equity attributable to members of PPK Group Limited
Total equity
Share information
Dividends on ordinary shares
Dividends per ordinary share
Dividend payout ratio
Number of ordinary shares issued at year end
$000
$000
$000
$000
$000
$000
$000
$000
$000
cents
%
000
4,867
4,776
461
540
50,184
12,087
35,449
35,449
2,759
4.75
511
58,007
Market capitalisation
$000
16,242
ratios and statistics
Return on equity attributable to members of PPK Group Ltd
Basic earnings per share
Net debt/equity
Debt/(Equity – Intangibles)
Interest cover on continuing operations
Net Tangible Assets per Share
%
cents
%
times
cents
1.5
0.9
34.1
34.9
3.04
59.6
P A G E 4
P A G E 4
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
dIreCT orS ’ rePor T
Your directors present their report on the parent entity and its
subsidiaries for the financial year ended 30 June 2009.
directors
non-executive director of various public companies. Colin has a
Bachelor of Commerce degree from the university of New South
Wales, a Diploma of Education from Sydney university and is an
Associate Member of the Institute of Chartered Accountants.
The names of directors in office at any time during or since the
financial year are:
Other listed public Company directorships held in the last 3 years:
Nil
Colin Francis Ryan
David Alfred Hoff
(resigned due to retirement on 7 September 2009)
Glenn Robert Molloy
Raymond Michael Beath
Jury Ivan Wowk
Directors have been in office since the start of the financial year to
the date of this report unless otherwise stated.
Information on directors
Details of the directors’ qualifications, experience and
responsibilities together with details of other directorships of
other listed public companies in the preceding three (3) years are
detailed below:
Colin Ryan (72)
(Securities held or controlled as at the
date of this report: 500,000 shares)
B.Com., Dip Ed., CA
Chairman & Non-Executive,
Independent Director
Member of the Board since
November 1995 and Chairman
since March 1999.
Member of the Audit Committee
Colin Ryan is an independent director of PPK Group Limited
and has no business relationship with the Company or its
related bodies other than his directorship. Colin manages an
investment and professional consultancy business providing a
variety of professional management, financial and marketing
services to various businesses. This follows experience as a
Chartered Accountant and extensive service as an executive and
David Hoff (60)
(Securities held or controlled as at the
date of this report: 156,960 shares)
C.P.A
Managing Director
Member of the Board since
November 2000.
Resigned due to retirement on 7 September 2009
David Hoff joined the Company as Chief Executive Officer in 1997.
He was appointed its Managing Director in November 2000 and
continued in this role until his retirement in September 2009.
Prior to commencing with PPK, David had several years
experience in financial accounting positions within a
multinational corporation in the mining industry followed by a
position as Chief Financial Officer of a publicly listed Australian
real estate development Company. David has over 27 years
experience in the packaging industry, in general management
and managing director roles, gained with multinational
corporations based in the united States of America, Europe, and
with a global packaging Company in the Asia region.
David is a Non-Executive Director and Chairman of Cool or Cosy
Limited (ASX: COS) and Frigrite Limited (ASX: FRR), entities in
each of which PPK holds a substantial investment interest. He is
currently engaged by PPK to provide consultancy services to the
consolidated entity.
Other listed public Company directorships held in the last 3 years:
Cool or Cosy Limited, Non-Executive Director (Appointed: 19
September 2007) & Chairman (Appointed 30 November 2007)
Frigrite Limited, Non-Executive Director (Appointed: 23 July 2008)
& Chairman (Appointed: 12 December 2008)
P A G E 5
of New South Wales Accredited Specialist in Business Law and
an Associate Member of the Australian Institute of Company
Directors.
Other listed public Company directorships held in the last 3
years:
HomeLeisure Limited, Non-Executive Director (Appointed: 29 July
2002; Ceased: 16 April 2007)
Raymond Beath (58)
(Securities held or controlled as at the
date of this report: 42,821 shares)
B.Com, F.C.A
Non-Executive, Independent
Director
Member of the PPK Group Limited
Board since listing on 21 December
1994.
Chairman of the Audit Committee.
Raymond Beath is a Director of Holden & Bolster Avenir Pty
Limited, Chartered Accountants. He has a Bachelor of Commerce
(Accounting) degree from the university of New South Wales and
is a Fellow of the Institute of Chartered Accountants. Raymond
has advised the consolidated entity on taxation, corporate and
financial management since 1984 and has been non-executive
director of PPK Australia Pty Limited since 1986.
Other listed public Company directorships held in the last 3 years:
Nil
directors’ report (continued)
Glenn Molloy (54)
(Securities held or controlled as at the
date of this report: 10,329,098 shares)
Non-Executive Director
Member of the PPK Group Limited
Board since listing on 21 December
1994.
Founder of the former entity Plaspak
Pty Limited in 1979.
Appointed Executive Director on September 2009
Glenn Molloy founded the former entity Plaspak Pty Ltd in 1979
and has acted as a director of the consolidated entity since that
time. He has extensive experience on public Company boards,
and in advising publicly listed and private entities on commercial
aspects of mergers, acquisitions and divestment activities.
Glenn was appointed to the role of Executive Director in
September 2009 following the retirement and resignation of
David Hoff as Managing Director.
Other listed public Company directorships held in the last 3 years:
Nil
Jury Wowk (58)
(Securities held or controlled as at the
date of this report: 187,302 shares)
BA., LLB
Non-Executive, Independent
Director
Member of the PPK Group Limited
Board since listing on 21 December
1994.
Jury Wowk is a Partner of HWL Ebsworth Lawyers and has
provided legal services to the PPK Group since the establishment
of Plaspak Pty Limited in 1979.
From 1987 to 1989, Jury performed the role of Operations
Manager at Plaspak Pty Ltd gaining valuable hands on practical
experience in the management of the Company’s operations.
Jury has a Bachelor of Arts Degree and a Bachelor of Laws
Degree from the university of Sydney. He is also a Law Society
P A G E 6
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
directors’ report (continued)
Company Secretary
Principal Activities
The Company Secretary in office at the end of the financial year
was Mr Robert Nicholls.
The principal activities of the consolidated entity during the financial
year were the:
•
investment in publicly listed and privately held businesses;
• property ownership and management; and
• design, manufacture and distribution of portable underground
mining equipment.
There were no other significant changes in the nature of the
consolidated entity’s principal activities during the financial year.
operating results
The consolidated profit after tax of the consolidated entity for the
period ended 30 June 2009 amounted to $540,000
(2008: $607,000).
dividends paid or recommended
Dividends paid or recommended for payment are as follows:
Final dividend in respect of the 2008 year
of 3.25 cents per ordinary share paid in
November 2008
$1,888,628
Interim dividend in respect of the reporting
period of 1.5 cents per ordinary share paid in
March 2009
Final dividend in respect of the reporting
period of 1.00 cent per share to be paid in
November, 2009
$870,100
$580,067
Information on Company Secretary
Details of the qualifications and experience of the Company
Secretary are detailed below:
Robert Nicholls (40)
(Securities held or controlled as at the
date of this report: 27,000 shares)
MBA (Distinction), LL.B (Hons), Grad
Dip Leg Prac, Grad Dip CSP, FCIS, GAICD
Group Company Secretary
Audit Committee Secretary
Robert is a practising solicitor and chartered Company secretary.
Between April 2000 to July 2008, Robert performed the role of
Group General Counsel & Company Secretary providing legal and
Company secretarial services for the PPK Group of Companies. In
July 2008, he was appointed Managing Director of Cool or Cosy
Limited, a Company in which PPK holds a substantial investment
interest, and continues to provide Company secretarial services to
PPK and its subsidiaries.
Prior to joining PPK in April 2000, Mr Nicholls performed roles
as a solicitor in private practice and with a Commonwealth
regulatory body.
Robert has a Masters of Business Administration (With
Distinction) from Charles Sturt university, Bachelor of Laws
(Honours) Degree from the university of Technology, Sydney,
Graduate Diploma in Legal Practice and Graduate Diploma in
Company Secretarial Practice. He is a Fellow of The Institute
of Chartered Secretaries and Administrators and Chartered
Secretaries Australia and a graduate of the Australian Institute of
Company Directors.
Relevant Associated Directorships:
Cool or Cosy Limited, Non-Executive Director (1 June 2007 to
7 July 2008); Managing Director (from 8 July 2008)
P A G E 7
directors’ report (continued)
review of operations
Information on the entity’s operations, financial position, business
strategies and prospects for the future is detailed below and
further within the Chairman and Managing Director’s Overview
included in the Annual Report accompanying these Financial
Statements.
Property and other investments
PPK continues to maintain a portfolio of industrial properties and
strategic investments in a number of ASX listed companies.
During the year, PPK’s property portfolio consisted of six (6)
industrial properties:
• one (1) was leased to York Precision Plastics Pty Ltd but was
sold in March 2009 for $4.92 million generating a small profit
on sale;
t PPK property: Hydrive Close, South Dandenong, Victoria
•
four (4) were leased to subsidiaries of PACT Group Pty Ltd
(“PACT Group”), the purchaser of the packaging business; and
• one (1) was leased on 1 July 2008, to a private manufacturing
Company for a term of seven (7) years with a five (5) year
option.
PACT Group has not taken up options on two (2) of the leased
properties where leases expired on 31 August 2009. These
properties are located in Sydney and Brisbane and are currently
being marketed for re-lease. Whilst the current leasing market
for large industrial properties is not strong the Board expects that
these properties will be re-leased in the 2010 financial year.
PPK is involved in litigation with PACT Group over the property
at Arndell Park, Sydney where PPK contends it has a valid
registered lease which expires on 8 September 2013. PACT Group
is disputing the validity of the registration of this lease and the
matter is before the Court and likely to be determined in October
2009. The Board will keep the market informed of developments.
P A G E 8
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
directors’ report (continued)
s Rambor spilling rig
•
signed a new Supply Agreement for the supply of roof bolting
equipment to the Russian coal mining industry.
Based on these initiatives and current orders from customers
Rambor is expected to continue to deliver a strong contribution to
PPK’s consolidated result in future periods.
dividends
The Board has declared a final fully franked dividend of 1.0 cent
per share yielding a yearly dividend of 2.5 cents per share fully
franked.
Future direction & Business outlook
With a portfolio of industrial properties in desirable geographical
locations continuing to provide the basis for core stable earnings
in the years ahead, PPK will focus on the following key areas,
namely the:
1. continuation of efforts to secure tenants for its properties
in Sydney and Brisbane which are now vacant due to the
election by PACT Group not to exercise the option to further
lease these properties;
2. resolution of the dispute involving PACT Group and the Arndell
Park property in Sydney which is currently the subject of court
proceedings;
3. pursuit of suitable growth opportunities, in both domestic and
overseas markets, for its retained manufacturing operation
Rambor, which opportunities are expected to deliver improved
earnings performance from this business; and
4.
identification of and investment in appropriate public and
private companies in which there exists an opportunity for
PPK to be actively involved in the management of these
businesses utilising its core management expertise.
PPK continues to explore opportunities to make strategic
investments.
Major investment activity by PPK during the reporting period and
as at the date of this report included the following:
• participation in a share placement by Cool or Cosy Limited
(ASX Code: COS) which resulted in the allotment to PPK of
6.8 million shares at six (6) cents per share bringing total
shareholding in COS to 12.8 million or 19.9% of the issued
capital;
• disposal of 1.375 million shares in Industrea Limited (ASX
Code: IDL) yielding a realised gain on sale of $130,000; and
•
commitment to an underwriting Agreement and participation
in a rights issue involving Frigrite Limited (ASX Code: FRR) as
part of the previously announced recapitalisation of FRR which
has resulted in PPK holding approximately 32% of the issued
capital of FRR.
PPK will continue to explore suitable investment opportunities
which have the potential to add value for its shareholders.
mining equipment manufacture
During the 2009 financial year, Rambor Pty Ltd (“Rambor”):
•
•
continued to develop and release new products to the market;
signed a Supply Agreement with a leading Chinese
manufacturer for the supply of roof bolters and associated
equipment to the coal mining industry in China and selected
countries in Asia; and
P A G E 9
directors’ report (continued)
Financial Position
The net assets of the consolidated entity have decreased by
$2,860,000 from 30 June 2008.
The main changes in the financial position have resulted from the:
• accounting treatment relating to the impairment of available for
sale financial assets and derivatives;
• payment of dividends at disclosed levels;
• on-market buy-back of 1,245,963 shares at a cost of $784,000
(or an average of 62.9 cents per share) pursuant to the on-
market buy back scheme in place during the reporting period
the particulars of which appear below under the heading
Significant Changes in the State of Affairs.
Significant Changes in the State of Affairs
on-market Buy-Back Scheme
During the reporting period, PPK had in place an on-market buy-
back scheme comprising the on-market buy back of up to 10%
of the prevailing issued capital of the Company (or 6,100,181 PPK
shares) inclusive of shares bought back by PPK in the 12 month
period preceding the announcement of the on market buy back
on 19 December 2007.
The on-market buy back scheme:
•
•
commenced on 7 January 2008; and
concluded on 6 January 2009.
PPK acquired a total of 2,995,166 shares under the scheme at a
cost of $2,166,883 (or an average price of approximately 72 cents
per share).
After Balance date events
David Hoff retired as Managing Director of PPK Group Limited
and its subsidiaries on 7 September 2009. Glenn Molloy was
appointed to the role of Executive Director on the same date.
The tenant of two (2) industrial properties owned by PPK has
not exercised options to lease these properties. The initial lease
of these properties expired on 31 August 2009. Each property is
being marketed for re-lease and the Board expects these properties
will be re-leased in the 2010 financial year.
PPK is also involved in litigation with the tenant of its Arndell
Park property regarding the validity of the registered lease on this
property. The matter is presently before the Court.
PPK has been a party to an underwriting Agreement in respect of the
issue of new shares in and by Frigrite Limited (ASX: FRR) pursuant
to a rights issue. The new share offer closed on 19 August 2009. In
accordance with the underwriting arrangements and PPK’s rights
issue entitlement, the Company has subscribed for 13,862,864 shares
in FRR at a cost of $1,663,000. In addition, PPK has applied for and
been issued 2,000,000 convertible notes at a face value of $1.00 per
note and subject to the payment of interest at the rate of 12.5% per
annum. Each note converts to 5 ordinary shares and has 5 attaching
options exercisable at 20 cents per share at any time during the next
3 years.
On 26 August 2009 the new shares in FRR were issued to PPK which
has increased its holding to approximately 32% of the existing
issued share capital of FRR. FRR will be considered an associate of
the consolidated entity from this time and, consequently, PPK will be
required to recognise its share of the post acquisition profits or losses
of FRR in the profit and loss account of PPK.
No other matter or circumstance has arisen since the end of the
financial year which is not otherwise dealt with in this report or
in the Consolidated Financial Statements that has significantly
affected or may significantly affect the operations of the consolidated
entity, the results of those operations or the state of affairs of the
consolidated entity in subsequent financial years.
Future developments
The likely developments in the operations of the consolidated entity
and the expected results of those operations in financial years
subsequent to the year ended 30 June 2009 are included in the
Chairman and Managing Director’s Overview detailed in the 2009
PPK Annual Report and in the Review of Operations section of this
Directors’ Report.
P A G E 1 0
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
directors’ report (continued)
environmental Issues
PPK remains committed to:
•
the effective management of environmental issues having the
potential to impact on its remaining business; and
• minimising the consumption of resources utilised by its
operations.
The Company has otherwise complied with all government
legislation and regulations with respect to disposal of waste and
other materials and has not received any notices of breach of
environmental laws and/or regulations.
The Group’s approach to environmental sustainability is outlined
in its Environmental Policy at www.ppkgroup.com.au.
Proceedings on behalf of Company
No person has applied for leave of the 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.
remuneration report
remuneration report - Audited
This report details the nature and amount of remuneration,
including prescribed details under the Corporations Regulations
2001, of each director and other key management personnel for
the consolidated entity and the Company and:
•
relevant group executives of the consolidated entity; and
• Company executives (as each these italicised terms are defined
in the Corporations Act 2001)
receiving the highest remuneration for the year ended 30 June
2009.
s PPK is a substantial shareholder of Cool or Cosy Limited (ASX Code: COS)
remuneration Policy
The remuneration policy of the Company has been designed
to align director and executive objectives with shareholder and
business objectives by providing a fixed remuneration component
and offering specific short-term incentives based on key
performance areas affecting the consolidated entity’s financial
results.
The PPK Board believes the remuneration policy to be appropriate
and effective in its ability to attract, retain and motivate directors
and executives of the highest possible quality and standard to
manage the affairs of the consolidated entity, as well as, create
goal congruence between directors, executives and shareholders.
The remuneration policy, setting the terms and conditions for
directors, executives and management was developed by the
Board. The policy for determining the nature and amount of
remuneration for board members and senior executives of the
consolidated entity is detailed in the paragraphs which follow.
Remuneration of non-executive directors is determined by the
Board from the maximum amount available for distribution to the
non-executive directors as approved by shareholders. Currently
this amount is set at $275,000 per annum in aggregate as
approved by shareholders at the 2003 Annual General Meeting.
P A G E 1 1
directors’ report (continued)
In determining the appropriate level of directors’ fees, data from
surveys undertaken of other public companies similar in size or
market section to the Company is taken into account.
The Board has recently:
•
•
considered the existing size, nature and extent of the
Company’s operations; and
resolved to reduce the fees payable to non-executive directors
with effect from 1 September 2009.
Non-executive directors are remunerated by means of cash
benefits. They are not entitled to participate in performance
based remuneration practices unless approved by shareholders.
The Company will not generally use options as a means of
remuneration for non-executive directors and will continue to
remunerate those directors by means of cash benefits.
PPK does not provide retirement benefits for its non-executive
directors.
Executive directors do not receive director’s fees.
The Board of Directors is responsible for approving remuneration
policies and packages applicable to senior executives of the
Company. The broad remuneration policy is to ensure that the
remuneration package properly reflects the person’s duties
and responsibilities and that the remuneration is competitive
in attracting, retaining and motivating people of the highest
possible quality and standard.
A review of the compensation arrangements for executive
directors and senior executives is conducted by the full Board at a
duly constituted Directors’ Meeting.
The Board conducts its review annually based on established
criteria which includes:
•
•
•
the individual’s performance;
reference to market data for broadly comparable positions or
skill sets in similar organisations or industry;
the performance of the Company or consolidated entity
during the relevant period; and
•
the broad remuneration policy of the consolidated entity.
P A G E 1 2
s Rambor Trussmaster
Senior executives and executive directors may receive bonuses
based on the achievement of specific goals of the consolidated
entity.
An executive incentive scheme approved by shareholders is in
place, which provides the board with the discretion to grant
options and provide loans to Eligible Executives for the purpose of
acquiring Scheme Shares.
The Board exercises its discretion under the PPK Executive
Incentive Scheme in a manner consistent with the broad
remuneration policy objectives of the consolidated entity. The
grant of options to executives is linked to significant performance
hurdles including the exercise price of the options being subject to
material improvement in Company performance (measured by its
share price) during a restricted exercise period.
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
directors’ report (continued)
Company performance, shareholder wealth and
director and executive remuneration
The remuneration Policy has been designed to achieve goal
congruence between shareholders, directors and executives.
and King Cobra Mining Equipment Pty Limited (“King Cobra”),
is to be paid a bonus payment relating to the achievement of
performance targets in respect of the Company earnings of
Rambor and King Cobra for the 2009 financial year.
The two methods employed in achieving this aim are:
No other bonus payments have been made to key management
personnel for the consolidated entity and the Company and:
• a performance based bonus for executives based on key
performance indicators (KPI’s) which include a combination of
short-term financial and non-financial indicators; and/or
• group executives of the consolidated entity; and
• Company executives
•
the issue of options to executives as a means of long-term
incentive to encourage the alignment of personal and
shareholder interests.
in respect of objectives relating to the earnings of the Company or
consolidated entity during the year or in respect of the preceding
four (4) years.
There were no options issued to executives during the year.
The Board considers that the existing remuneration arrangements
regarding executives are appropriate in the Company’s prevailing
circumstances to achieve the desired objectives of its remuneration
policy.
These policy measures are chosen as they directly align the
individual’s reward to the KPI’s of the consolidated entity and to its
strategy and performance.
The Company considers this policy is an effective means of
maintaining shareholder wealth and in retaining quality
employees committed to the long term objectives of the
Company.
Eligible executives may be entitled to receive incentive payments
of between 10% and up to 15% of their base salary during each
full year of employment in which they achieve pre-determined
levels of productivity, goals and targets in consultation with the
Board and Managing Director.
A significant proportion of eligible bonus payments to key
management personnel, group executives and Company executives
are linked to the earnings of either the:
•
•
consolidated entity; or
individual Company in which the Company executive performs
his or her primary duties and responsibilities.
Advanced Fluid Systems Pty Limited, an entity related to
P.R.Mastalir, Managing Director of Rambor Pty Limited (“Rambor”)
The remaining proportion of eligible bonus payments relate to
non-financial performance measures which may include, for
example, people, safety, strategy and risk measures having overall
benefits for the consolidated entity. Details of bonuses paid to
executives in respect of the attainment of predetermined non-
financial performance indicators (if any) are detailed within this
report.
Consequences of Company performance on shareholder
wealth
The following table outlines the impact of Company performance
on shareholder wealth:
2009 2008 2007 2006 2005
Earnings per share
(cents)
Full year ordinary
dividends (cents) per share
Special dividend
(cents) per share
0.9
1.0
15.9
6.3
4.6
2.5
6.5
7.0
6.5
6.5
-
5.0
-
-
-
Year end share price
$0.28 $0.70 $0.78 $0.75 $0.90
Shareholder return
(annual)
(51.4%) 5.3% 13.2% (8.8%) 1.8%
The above table shows the annual returns to shareholders for the
year calculated to include the dividend yield for the year (based
on the average share price during the period) and the change in
P A G E 1 3
s Rambor Trussmaster
directors’ report (continued)
the price at which shares in the Company are traded between the
beginning and the end of the relevant financial year.
In addition, the information provided in the table and this report
highlights that the payment of bonuses to executives is closely
aligned to Company performance.
Further, the bonus payment disclosed in respect of relevant group
executive Peter Mastalir in respect of the 2009 financial year is
based on the positive performance of the individual Company in
which the relevant group executive performs his or her primary
duties and responsibilities.
In respect of the 2009 financial year, for example, no bonuses
have been paid or accrued to Company executives relating to
earnings performance conditions pertaining to the current
reporting period while bonuses were paid to these executives
in respect of the 2007 financial year based on the positive
performance of the consolidated entity in that year.
details of remuneration for the year ended 30
June 2009
Director and executive officer remuneration
Details of the nature and amount of each major element of
compensation of each director, relevant group executive and
Company executive who receive the highest remuneration for the
year ended 30 June 2009 are included in the table below:
Short Term Incentives
Post
employment
Long term Incentives/Benefits
Salary
& Fees
($)
Short Term Non-Cash
Incentive
Benefits
Cash Bonus
($)
($)
Superan-
nuation
($)
Long
Share
Post
Service employment Based
Benefits
Leave
($)
Payments
($)
Total Proportion of
remuneration
($)
Performance
related %
72,000
48,000
48,000
48,000
223,745
30,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
57,787
85,000
8,687
31,000
-
-
-
135,200
106,589
81,432
11,700
2,643
-
-
-
-
-
72,000
48,000
48,000
48,000
406,219
622,219
-
30,000
30,000
-
-
-
-
-
-
-
337,564
31.6%
337,564
-
-
directors
Non –Executive
C F Ryan
G R Molloy
R M Beath
J I Wowk
Executive
D A Hoff
Total Directors
Company executive
R J Nicholls
Total Company Executive
relevant Group executive
P R Mastalir
Total Relevant Group Executive
P A G E 1 4
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
directors’ report (continued)
s PPK is a substantial Shareholder in Frigrite Limited (ASX Code: FRR)
The named Company executive and relevant group executive held
the following positions during the period:
Company Executive
Position
R J Nicholls
Company Secretary
Relevant Group Executive
Position
P R Mastalir
Managing Director,
Rambor Pty Ltd
There are no other Company or relevant group executives.
The names and positions held by Key Management Personnel (as
defined by the Corporations Act 2001 and Australian Accounting
Standards) of the consolidated entity during the year are as
follows:
Key Management Personnel
Position
C F Ryan
D A Hoff
G R Molloy
J I Wowk
R M Beath
Non-Executive Director
Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
R J Nicholls (formerly General Counsel & Company Secretary)
ceased to be included as key management personnel for the
consolidated entity on 1 July 2009.
P A G E 1 5
directors’ report (continued)
2008
Short Term Incentives
Post
employment
Long term Incentives/Benefits
Salary
& Fees
($)
Short Term Non-Cash
Benefits
Incentive
Cash Bonus
($)
($)
Superan-
nuation
($)
Termination
Benefits
Long
Service
Leave
($)
Share
Based
payments
($)
Total
($)
Proportion
remuneration
Performance
related %
directors
Non –Executive
C F Ryan
G R Molloy
R M Beath
J I Wowk
Executive
D A Hoff
Total Directors
72,000
48,000
48,000
48,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
198,309
25,000
69,786
85,128
4,664
84,000
Company executives
R J Nicholls
F J Hardiman*
Total Company Executives
151,395
105,030
relevant Group executive
P R Mastalir
208,299
Total Relevant Group Executive
-
-
-
11,327
9,167
13,129
3,465
3,045
641
-
11,700
3,747
-
-
-
-
-
-
-
-
-
-
72,000
48,000
48,000
48,000
466,887
682,887
178,896
118,303
297,199
-
223,746
223,746
-
-
-
-
5.4%
-
-
-
* Remuneration information for this Company Executive relates to
the 3 month period ended 30 September 2007 after which the
nominated employee ceased to be a Company Executive.
The named Company executives and relevant group executive
held the following positions during the period:
The names and positions held by Key Management Personnel (as
defined by the Corporations Act 2001 and Australian Accounting
Standards) of the consolidated entity during the year are as
follows:
Key Management Personnel
Position
Company Executive
Position
R J Nicholls
F J Hardiman
Group General Counsel &
Company Secretary
Chief Financial Officer
(to September 2007
Relevant Group Executive
Position
P R Mastalir
Managing Director, Rambor
Pty Ltd
C F Ryan
D A Hoff
G R Molloy
J I Wowk
R M Beath
R J Nicholls
There are no other company or relevant group executives.
F J Hardiman
Non-Executive Director
Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Group General Counsel &
Company Secretary
Chief Financial Officer
(to September 2007)
P A G E 1 6
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
directors’ report (continued)
Performance income as a proportion of total
remuneration
Performance based bonuses are based on proportions of salary
and not on set monetary figures. This may result in the proportion
of remuneration related to performance varying between
individuals. The Board has set these bonuses to encourage
achievement of specific goals that have been given a high level
of importance in relation to growth and profitability of the
consolidated entity.
Analysis of bonuses included in remuneration
The vesting profile of the short-term incentive cash bonus
awarded as compensation to each director, Company executive
and relevant group executive and which may have vested at the
date of this report are detailed below:
The maximum potential value of the short term incentive is
dependent upon the attainment of specified threshold earnings
targets and the maximum potential value is dependant upon
actual earnings achieved.
No bonuses were paid to Company executives in respect of the
current period.
The performance conditions relating to D Hoff comprised
designated earnings per share (EPS) targets for the consolidated
entity. These targets were not achieved during the 2009 financial
year and, therefore, the bonus was forfeited.
The Company’s Secretary, Mr Nicholls:
•
•
is engaged in a non-executive, consultative capacity; and
is not remunerated by means of specified performance
conditions and targets.
Short term incentive cash bonus
Included in
Remuneration
($)
Vested in
period
(%)
Forfeited in
period (A)
(%)
Available for vesting
in future years
(C)
director
D A Hoff
relevant Group executive
P R Mastalir
-
-
106,589(B)
100%
100%
-
-
-
(A) The amounts forfeited are due to the performance of service criteria not being met in relation to the current financial reporting period.
(B) This amount vested in the 2009 financial year and will be paid to the executive on 15 October 2009 based on the achievement by the
executive of pre-determined personal goals and satisfaction of performance criteria in respect of the 2009 financial year.
(C) This relates to the amount of short term bonus which may have accrued from the 2009 financial year and be payable in future financial years.
P A G E 1 7
directors’ report (continued)
Analysis of prospective bonus payments for future years
The vesting profile of the short-term incentive cash bonus which
may otherwise be payable in future financial years if the executive
meets pre-determined service and performance criteria awarded
as compensation to each director, Company executive and
relevant group executive are detailed below:
Short term incentive cash bonus
options issued as part of remuneration for the
year ended 30 June 2009
Options may be issued to executives as part of their remuneration.
The options are issued to encourage goal alignment between
executives, directors and shareholders.
No options were issued to, or exercised by, directors or specified
executives during the year.
Value yet to vest
or which may vest
employment Contracts
Financial years Minimum Maximum
in which bonus
vests or may vest
Relevant Group
Executive
P R Mastalir
2010
0
(A)
(A) The maximum potential value of the short term incentive cash bonus
for future financial years cannot be determined for this executive
as vesting is dependent upon the attainment of specified threshold
earnings targets and the maximum potential value is dependant
upon actual earnings achieved.
The performance conditions included in the determination of the
prospective bonus which may vest in future financial years and be
payable to P R Mastalir includes specified Earnings Before Interest
& Tax (EBIT) targets for Rambor Pty Limited.
These performance conditions were selected because each
seeks to align the potential payment of bonuses to the creation
of shareholder value and growth of the Company’s operations.
Achievement of these performance conditions are assessed by
means of specifically defined targets and definitions of the key
requirements detailed within the relevant service and consultancy
agreements with the respective personnel. The main reason for
applying these methods of assessment is that they are based on
readily accepted measurements of shareholder value creation and
Company earnings growth.
The Company’s Managing Director, David Hoff, retired on 7
September 2009.
The remuneration and other terms of Mr Hoff’s employment
during the year were based on a previously executed written
Service Agreement.
The key provisions of the Service Agreement were as follows:
• Term of agreement - 4 years commencing 1 July 2004.
• Base salary inclusive of superannuation to be reviewed
annually by the Board of Directors.
• Provision of a fully maintained motor vehicle.
• Payment of a post employment benefit equal to 12 months
of the current base salary and benefits in the event that either
party does not renew the Service Agreement on expiry of the
4 year term.
• Payment of a termination benefit on early termination by the
employer, other than in specified circumstances based on
misconduct or non-performance, equal to the current base
salary and benefits for 12 months or the remaining term of
the agreement whichever is the greater.
• A notice period of 6 months in respect of early termination of
the agreement.
• The payment of a performance related cash bonus based on
the consolidated entity achieving specified earnings per share
targets.
Glenn Molloy was appointed an Executive Director on 7
September 2009.
P A G E 1 8
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
directors’ report (continued)
The remuneration and other terms of Mr Molloy’s employment
have been approved by the Board and include payment in the
amount of $3,500 per day worked for PPK plus reasonable out of
pocket expenses and the provision of a mobile phone and laptop
for business use.
Robert Nicholls and Prestige Corporate Services Pty Ltd, an entity
related to Mr Nicholls, provide Company secretarial consultancy
services to the consolidated entity pursuant to the terms of a
Consultancy Agreement.
The key provisions of the Consultancy Agreement are as follows:
• Term of Agreement – initial period of 4 years commencing
8 July 2008 with an option to the Company to extend the
agreement for a further 2 years at the end of the initial period;
• Base Consultancy Fee on commencement to be reviewed
annually by the Board of Directors;
• Payment of a termination benefit on early termination by
the employer, other than in specified circumstances based
on misconduct or non-performance, equal to the prevailing
remuneration amount for a 12 month period;
• A notice period of 6 months in respect of early termination
of the agreement for non-performance or generally at the
election of Mr Nicholls; and
•
Immediate termination by the Company for specified
misconduct.
A performance review was undertaken in August 2009 regarding
the performance of Mr Nicholls and his related entity in respect of
the year ended 30 June 2009.
P.R.Mastalir and Advanced Fluid Systems Pty Limited, an entity
related to Mr Mastalir, provide consultancy services to Rambor
Pty Limited (“Rambor”) and King Cobra Mining Equipment Pty
Limited (“King Cobra”) pursuant to the terms of a Consultancy
Agreement.
The key provisions of the Consultancy Agreement are as follows:
• Term of agreement - 5 years commencing 1 July 2007.
• Base Consultancy Fee upon commencement to be reviewed
annually by the Board of Directors.
• Restraints on competition for specified time periods in certain
geographical areas in respect of defined services and activities
in the event of termination.
• Early termination provisions on the occurrence of specified
events such as, for example, insolvency or the failure or
inability to perform the contracted service.
• A notice period of 6 months in respect of early termination of
the agreement.
• The payment of a performance related cash bonus based
on Rambor and/or King Cobra achieving specified earnings
before interest and taxation (EBIT) targets.
A performance review was undertaken in August 2009 regarding
the performance of Mr Mastalir and his related entity in respect of
the year ended 30 June 2009.
There are no formalised written contracts in place with any other
specified executives.
Any termination payment entitlements would be as determined
by general employment law.
End of Audited Remuneration Report
options
There were no options outstanding as at the date of this report.
directors’ interests
Particulars of Directors’ interests in shares as at the date of this report
are as follows:
Ordinary Shares
Options
Colin Francis Ryan
David Alfred Hoff (retired)
Glenn Robert Molloy
Jury Ivan Wowk
Raymond Michael Beath
500,000
156,960
10,329,098
187,302
42,821
-
-
-
-
-
P A G E 1 9
directors’ report (continued)
meetings of directors
During the financial year, meetings of directors (including committee meetings) were held.
Attendances were:
DIRECTORS’ MEETINGS
COMMITTEE MEETINGS
Number
Eligible
to attend
Number
Attended
Number
Eligible
to attend
Number
Attended
Colin Francis Ryan
Glenn Robert Molloy
Jury Ivan Wowk
Raymond Michael Beath
David Alfred Hoff
11
11
11
11
11
10
11
11
10
11
2
-
-
2
-
2
-
-
2
2
risk & Control Compliance Statement
Audit Committee
The consolidated entity has an Audit Committee.
Details of the composition, role and Terms of Reference of the PPK
Audit Committee are contained in the Statement of Corporate
Governance Practices acCompanying this Report and are available
on the Company’s website at www.ppkgroup.com.au
The PPK Audit Committee currently comprises the following Non-
Executive, Independent Directors:
R M Beath (Chairman)
C F Ryan
The Company’s lead signing and review External Audit Partner
and Managing Director attend meetings of the Audit Committee
by standing invitation.
under ASX Listing Rules and the ASX Corporate Government
Council’s Principles of Good Corporate Governance and Best
Practice Recommendations (“Recommendations”), the Company
is required to disclose in its Annual Report the extent of its
compliance with the Recommendations.
Throughout the reporting period, and as at the date of signing
of this Directors’ Report, the Company was in compliance with a
majority of the Recommendations in all material respects as more
fully detailed in the Statement of Corporate Governance Practices
on pages 23 to 35 of the PPK 2009 Annual Report.
In accordance with the Recommendations, the Board has:
•
•
received and considered reports from management regarding
the effectiveness of the Company’s management of its
material business risks; and
received assurance from the chief executive officer and the
chief financial officer equivalent regarding the consolidated
financial statements and the effective operation of risk
management systems and internal controls in relation to
financial reporting risks.
Material associates and joints ventures, which the Company does
not control, are not dealt with for the purposes of this statement.
P A G E 2 0
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
directors’ report (continued)
directors’ and Auditor’s Indemnification
Non-Audit Services
During or since the end of the financial year the Company has
given an indemnity or entered an agreement to indemnify, or paid
or agreed to pay insurance premiums as detailed below.
There were no non-audit services performed by the external
auditors, BDO Kendalls Audit & Assurance (NSW-VIC) Pty Ltd,
during the year ended 30 June 2009.
The Company has paid premiums to insure all directors of the
parent entity and officers of the consolidated entity against
liabilities for costs and expenses incurred by them in defending
any legal proceedings arising out of their conduct while acting
in the capacity of director or officer of the Company, other than
conduct involving a wilful breach of duty in relation to the
Company. The amount of the premium was $19,326.
directors’ Benefits
Since 30 June 2008, no director has received or become entitled to
receive a benefit because of a contract made by the consolidated
entity, or a related body corporate with a director, a firm of which
a director is a member or an entity in which a director has a
substantial financial interest except for:
• Mr Raymond Beath is a director of Holden & Bolster Avenir Pty
Ltd which entity has provided tax and accounting services to
the consolidated entity in the ordinary course of business.
• Mr Jury Wowk is a partner in HWL Ebsworth Lawyers which
firm has provided legal services to the consolidated entity in
the ordinary course of business.
This statement excludes a benefit included in the aggregate
amount of remuneration received or due and receivable by
directors and shown in the Company’s accounts, or the fixed
salary of a full-time employee of the parent entity, controlled
entity, or related body corporate.
Audit Independence
The lead auditor has provided the Auditor’s Independence
Declaration under section 307C of the Corporations Act 2001 (Cth)
for the year ended 30 June 2009 and a copy of this declaration is
set out on page 92 and forms part of the Directors’ Report.
rounding of Accounts
The parent entity has applied the relief available to it in ASIC
Class Order 98/100 and, accordingly, amounts in the financial
statements and directors’ report have been rounded to the nearest
thousand dollars.
Signed in accordance with a resolution of the Board of Directors.
Colin Francis Ryan
Chairman
Sydney, 29 September 2009
P A G E 2 1
STATemeNT oF CorPorATe GoVerNANCe PrACTICeS - 2009
PPK Group Limited (“PPK” or “the Company”)
Approach to corporate governance and
responsibility
The PPK Board of Directors is committed to the principles
underpinning good corporate governance, applied in a manner
which is most suited to PPK, and to best addressing the directors’
accountability to shareholders and other stakeholders. This is
supported by an overriding organisation-wide commitment to
the highest standards of legislative compliance and financial and
ethical behaviour.
The Company continues to address directors’ accountability
to stakeholders in a manner consistent with the Company’s
individual circumstances enhanced through the introduction of
publicly available policies and procedures which are designed to
foster a culture of transparency in the way PPK is directed and
managed.
As a measure of its stated commitment to good corporate
governance principles, the Board will continue to:
For the reasons expressed within this Statement, PPK has elected
not to adopt Recommendations 2.4, 4.2 and 8.1.
PPK has posted copies of its relevant corporate governance
policies and practices to its website consistent with the
Recommendations.
PPK’s Statement of Corporate Governance Practices and copies of
its policies are available in the designated corporate governance
area of its website at www.ppkgroup.com.au.
date of this Statement
This statement outlines the:
• Principles and Recommendations identified by the ASX as
underlying good corporate governance; and
• main corporate governance practices of PPK during the year to
30 June 2009, except where stated otherwise.
•
review and continually improve its governance practices; and,
• monitor developments in good corporate governance.
PRINCIPLE 1: Lay solid foundations for
management and oversight
report on compliance with the ASX Best Practice
recommendations
Currently, the ASX Listing Rules require listed companies to
include in their Annual Report a statement disclosing the
extent to which they have followed the ASX Best Practice
Recommendations (“Recommendations”) in the reporting period.
Listed companies must identify the recommendations that
have not been followed and provide reasons for the Company’s
decision. Where a recommendation has been followed for only
part of the period the Company must state the period during
which it had been followed.
As detailed within this Statement of Corporate Governance
Practices, PPK considers its governance practices comply with:
• each of the ASX Corporate Governance Principles
(“Principles”); and
•
the Recommendations, except for those detailed, and for the
reasons outlined, in this Report.
Companies should establish and disclose the
respective roles and responsibilities of board and
management.
Recommendation 1.1: Formalise and disclose the
functions reserved to the board and those delegated to
senior executives and disclose those functions.
Recommendation 1.2: Disclose the process for
evaluating the performance of senior executives.
Recommendation 1.3: Provide the information
indicated in the Guide to reporting on Principle 1.
Formalisation of board and management functions.
The Board has formalised its roles and responsibilities into a
Charter. The Board Charter clearly defines the matters that are
reserved for the Board and those that the Board has delegated to
management.
P A G E 2 2
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Statement of Corporate Governance Practices - 2009 (continued)
In summary, the responsibilities of the PPK Board include:
• oversight of the Company, including its control and
accountability systems;
•
setting the Company’s major goals including the strategies
and financial objectives to be implemented by management;
management personnel, determining terms of appointment,
evaluating performance, and developing and maintaining
succession plans for key management roles; and
• approval of capital expenditure and business transactions
within predetermined limits set by the Board.
• appointing, removing and controlling the Managing Director;
Senior executive performance evaluation
The Board is responsible for approving the performance objectives
and measures for the chief executive officer and assessing
whether these objectives have been satisfied by the performance
of the chief executive officer during the relevant period and in
accordance with agreed terms of engagement.
The chief executive officer is responsible for approving the
performance objectives and measures of other senior executives
in consultation with the Board. The Board provides input into
the evaluation of performance by senior executives against the
established performance objectives.
The performance of senior executives is monitored by means
of scrutiny by the Board of regular monthly reports provided by
management regarding the group financial performance and
forecasted results, presentations and operational reports, and the
achievement of predetermined performance objectives.
Evaluations of the performance of senior executives for the 2009
financial year were conducted in August 2009. These evaluations
were undertaken in accordance with the process outlined in this
Statement.
Board Charter
The roles and responsibilities of the Board and management
are detailed in the Board Charter which is available within the
designated corporate governance area of the Company website at
www.ppkgroup.com.au.
•
•
•
ratifying the appointment and, where appropriate, the
removal of the chief financial officer and/or Company
secretary;
input into and final approval of management’s development
of corporate strategy and performance objectives;
reviewing and ratifying systems of risk management and
internal compliance and control, codes of conduct and legal
compliance;
• monitoring senior management’s performance and
implementation of strategy, and ensuring that appropriate
resources are available;
• approving and monitoring the progress of major capital
expenditure, capital management, and acquisitions and
divestitures;
• approving and monitoring financial and other reporting; and
•
corporate governance.
The Board has delegated responsibility to the Managing Director
for:
• developing and implementing corporate strategies and
making recommendations on significant corporate strategic
initiatives;
• maintaining an effective risk management framework and
keeping the Board and market fully informed about material
risks;
• developing PPK’s annual budget, recommending it to the
Board for approval and managing day-to-day operations
within the budget;
• managing day-to-day operations in accordance with
standards for social and ethical practices which have been set
by the Board;
• making recommendations for the appointment of key
P A G E 2 3
Statement of Corporate Governance Practices - 2009 (continued)
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.
The PPK Board has made its own assessment to determine the
independence of each director on the Board. It is the Board’s view
that three (3) of the non-executive directors are independent,
namely: Mr C F Ryan, Mr J I Wowk and Mr R M Beath.
The remaining non-executive director, Mr G R Molloy, is not
considered independent due to a substantial shareholding in the
Company by or associated with this director.
In view of the size of the Company and the nature of its activities,
the Board considers that the current mix of skills, qualifications
and experience on the Board is consistent with the long-term
interests of the Company. The Board will continue to monitor
the requirement for independent directors in the context of the
Company’s communicated long term objectives.
The Board has established criteria for assessing independence of
its directors and these can be found in the corporate governance
section of the PPK website at www.ppkgroup.com.au.
Recommendation 2.5: Disclose the process for
evaluating the performance of the board, its
committees and individual directors
Composition of the Board
During the reporting period, the PPK Board comprised four (4)
non-executive directors and one (1) executive director.
Recommendation 2.6: Provide the information included
in the Guide to reporting on Principle 2
Independence
A PPK director will be considered independent where he or she is:
•
•
independent of management, that is, a non-executive
director; and,
free from any business or other relationship that could
materially interfere with, or could reasonably be perceived to
materially interfere with, the exercise of his or her unfettered
and independent judgement.
Materiality is assessed on a case by case basis by reference to the
director’s individual circumstances rather than general materiality
thresholds.
The composition of the Board is set based on the following factors:
•
•
•
the Company’s Constitution provides for the number of directors
to be not less than three (3) and not more than ten (10) as
determined by the directors from time to time;
the Board has adopted a policy that the position of Chairman
will continue to be held by a non-executive director;
consistent with the Company’s objective that the Board should
encompass a broad range of relevant expertise, the present
Board consists of directors with a collective of diverse skills,
qualifications and experience as more fully detailed in the
Company’s Annual Report and on its website at
www.ppkgroup.com.au.
On 7 September 2009:
• Mr D A Hoff resigned as a director; and
• Mr G R Molloy commenced as an executive director, of the
Company.
P A G E 2 4
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Statement of Corporate Governance Practices - 2009 (continued)
PPK’s Constitution is available in the corporate governance area of
its website at www.ppkgroup.com.au.
There is no shareholding requirement imposed upon directors
under the Company’s Constitution, however, all of the directors of
PPK do hold shares in the Company.
Details of all holdings by directors in the Company is detailed within
the Directors’ Report.
Chairman
The Chairman is selected by the Board from the non-executive
directors.
The current chairman, Mr C R Ryan, is a non-executive director
appointed by the Board. Mr Ryan has been a director of PPK
since November 1995 and Chairman since March 1999. He is
considered an independent director.
Separation of roles of Chair and CEO
During the 2009 financial year, PPK’s Chairman and Managing
Director held separate roles. The roles and responsibilities of the
Chairman and the Managing Director during this period are set
out in the Board Charter which is available within the designated
corporate governance area of the Company website at
www.ppkgroup.com.au.
Establishment of nomination committee
PPK has elected not to adopt Recommendation 2.4 because it
considers that its existing selection and appointment practices,
detailed within this Statement, are an efficient means of meeting
the needs of the Company, particularly having regard to the
fact that PPK is a relatively small publicly listed Company by
comparison to other listed entities which is reflected by the size of
its operations, board structure and composition.
During the reporting period, the PPK Board consisted of only five
(5) members. It is considered that further division of the Board
for the purposes of establishing a formal committee structure
would not achieve enhanced efficiency or enable the Board to add
greater value to this process.
The small size of the PPK Board, and the nature of its business,
means that PPK has the present capacity to consider director
competencies, selection and nomination practices in the context
of duly constituted meetings of the Board and as a part of its
self-evaluation processes.
Board performance evaluation
The Board has adopted an on-going, self-evaluation process
to measure its own performance and the performance of its
committee during the reporting period.
The Chairman meets periodically with individual directors to
discuss the performance of the Board and the director. In addition,
an evaluation is undertaken by the Chairman of the contribution
of directors retiring by rotation prior to the Board endorsing their
candidature.
The review process involves consideration of all of the Board’s
key areas of responsibility and accountability and is based on
an amalgamation of factors including capability, skill levels,
understanding of industry complexities, risks and challenges,
and value adding contribution to the overall management of the
business.
A performance evaluation for the Board, its committee and
directors took place during the reporting period in accordance
with the process detailed within this Statement.
The outcomes of the self-assessment program are used to
enhance the effectiveness of individual directors and the Board
collectively.
Enhanced effectiveness of the Board and management is also
addressed through:
Board Meetings
The frequency of Board meetings and director’s attendance at
those meetings is detailed within the Directors’ Report. Directors
are expected to prepare for meetings in a manner which will
enable them to attend and participate at the meeting.
Directors are also required to make on-site visits and attend
workshops as required.
P A G E 2 5
Statement of Corporate Governance Practices - 2009 (continued)
Induction Program
Procedures for induction of new directors are in place to allow
new directors to participate fully and actively in board decision
making at the earliest opportunity.
the Managing Director and Group Accountant, and may confer
and request additional information from any PPK employee.
Management are available to discuss reports, and any issue
arising, with the Board as required.
All directors are offered an induction program appropriate to their
experience upon appointment so as to familiarise them with
matters relating to the business, strategy and any current issues
under consideration by the Board. This program consists of written
background material on the Company, its products, services and
operations; scheduled meetings with the Chairman, Managing
Director and key senior management executives of the Company.
There were no new directors appointed during the year.
The Board collectively, each Board Committee and each individual
Director has the right, following appropriate consultation, to seek
independent professional advice at PPK’s expense to help them
carry out their responsibilities.
A copy of the process for performance evaluation of the board,
its committees and individual directors, and key executives is
available in the designated area for corporate governance on the
Company website at www.ppkgroup.com.au.
Director education
The Board encourages directors to continue their education by
participating in applicable workshops and seminars, attending
relevant site visits and undertaking relevant external education.
The Company Secretary provides directors with on-going
guidance on matters such as corporate governance, the
Company’s constitution and the law.
Board papers & agendas
Board agendas are structured throughout the year in order to
ensure that each of the significant responsibilities of the Board is
addressed.
Directors receive board packs prior to each meeting which
detail financial, operational and strategy reports from senior
management who are available to discuss reports with the Board.
Access to information
All directors have access to Company records and information,
and receive regular detailed financial and operational reports from
senior management.
The Company Secretary is available to all Directors and may be
consulted regarding on-going issues of corporate governance,
the PPK Constitution and the law. In addition, the Chairman and
other independent non-executive directors regularly consult with
Term of office, skills, experience and expertise of each
director
The qualifications, experience and expertise of the directors, and
the respective terms in the office held by individual directors, are
set out in the Directors’ Report on pages 5 and 6 of the PPK 2009
Annual Report.
Independent professional advice
PPK has in place a procedure whereby, after appropriate
consultation, directors are entitled to seek independent
professional advice, at the expense of PPK, to assist them to carry
out their duties as directors. The policy of PPK provides that any
such advice is made available to all directors.
Procedure for selection and appointment of new
directors
The process for appointing a director within PPK is that, when
a vacancy exists, the Board identifies candidates with the
appropriate expertise and experience, using external consultants
as appropriate. The most suitable candidate is appointed but must
stand for election at the next annual general meeting following
the appointment.
Consistent with the current law there is no retirement age for
directors fixed by the Corporations Act 2001 (Cth) or ASX Listing
Rules, although a person of or over the age of seventy-two (72)
P A G E 2 6
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Statement of Corporate Governance Practices - 2009 (continued)
years of age may not be appointed, or re-appointed as a director
except pursuant to a resolution of the Company in accordance with
the Company’s Constitution.
The process for re-election of a director is in accordance with the
Company’s Constitution, which requires that each year, at least
one-third of the non-executive directors retire from office at the
Annual General Meeting. The retiring directors may be eligible for
re-election.
PRINCIPLE 3: Promote ethical and responsible
decision-making.
Companies should actively promote ethical and
responsible decision-making.
Recommendation 3.1:
Establish a code of conduct and disclose the code or a
summary of the code as to the:
• practices necessary to maintain confidence in the
Company’s integrity;
• practices necessary to take into account their legal
obligations and the reasonable expectations of
shareholders; and
•
responsibility and accountability of individuals for
reporting and investigating reports of unethical
practices.
Recommendation 3.2: Establish a policy concerning
trading in Company securities by directors, senior
executives and employees, and disclose the policy or a
summary of that policy.
Recommendation 3.3: Provide the information indicated
in Guide to reporting on Principle 3.
Code of Conduct
The Board has approved a Code of Conduct and Ethics which
applies to all directors, executives, management and employees
without exception. In addition, the conduct of directors and
executives is also governed by Code of Conduct for Directors and
Executives.
Each Code of Conduct is designed to ensure that:
• high standards of corporate and individual behaviour are
observed by all PPK directors and executives in the context of
their respective roles and the performance of their duties with
PPK;
• directors and executives are aware of their responsibilities
to PPK under the terms of their appointment or contract of
employment; and
• all of the stakeholders of the Company can be guided by the
stated values and policies of PPK.
In summary, the Codes provide that directors and senior
executives must:
• act honestly, in good faith and in the best interests of the
Company;
• use due care, skill and diligence in the fulfilling their duties;
• use the powers of their position for a proper purpose, in the
interests of the Company;
• not make improper use of information acquired their position;
• not allow personal interests, or those of associates, conflict
with the interests of the Company;
• exercise independent judgement and actions;
• maintain the confidentiality of Company information acquired
by virtue of their position;
• not engage in conduct likely to bring discredit to the
Company; and
•
comply at all times with both the spirit and the letter of the
law, as well as, policies of the Company.
PPK is committed to the operation of its business in a manner
that meets or exceeds the ethical, legal, commercial and public
expectations that society has of the Company and the industry in
which it operates.
Directors of the Company may act in a professional capacity for
the Company or its controlled entities, other than as auditor of the
Company. These arrangements are subject to the restrictions of
the Corporations Act 2001 (Cth).
P A G E 2 7
Statement of Corporate Governance Practices - 2009 (continued)
Trading Policy
Directors, senior executives and employees are subject to the
Corporations Act 2001 (Cth) relative to restrictions applying for,
acquiring and disposing of securities in, or other relevant products
of, the Company (or procuring another person to do so), if they are
in possession of inside information.
Inside information is that information which is not generally
available, and which if generally available, a reasonable person
would expect it to have a material effect on the price or value of
the securities in the Company.
under the PPK Trading Policy, directors, senior executives and
employees of the Company are restricted from trading in the
Company’s securities during the period of one (1) month
preceding the making of an announcement to the market by the
Company relating to the:
• Company’s Annual results;
• Company’s Half Year results; and
• Chairman’s Address.
The Company notifies the ASX of any change in a director’s
interests in securities, and in contracts relevant to securities, as
required by the ASX Listing Rules.
Policy Disclosure
Copies of the PPK Code of Conduct & Ethics, Code of Conduct for
Directors and Executives and Trading Policy are available at
www.ppkgroup.com.au.
Disclosure of related party transactions is set out in Note 29 to
the Financial Statements.
under the Constitution of the Company, and the Corporations Act
2001 (Cth), where the possibility of a conflict of interest exists
and involves a director, directly or indirectly, the director must
declare the fact, nature, character and extent of the conflict at the
first meeting of directors held after the relevant facts come to the
director’s knowledge.
The director concerned does not receive copies of the relevant
Board papers, if any, and withdraws from the Board meeting
while such matters are considered by the remainder of the Board.
Accordingly, the interested director takes no part in discussions
nor exercises any influence over other members of the Board if a
potential conflict of interest exists.
In addition, PPK has developed a series of policies designed to
promote ethical and responsible decision making by directors,
executives, employees and contractors of the Company, including:
• Trading Policy;
• Market Disclosure Policy;
• Privacy Policy;
• Occupational Health & Safety Policy;
• Code of Conduct and Ethics (General); and
• Code of Conduct for Directors’ & Executives.
Employees are actively encouraged to report activities or
behaviour to senior management, the Company Secretary or the
Board, which are a breach of the Code of Conduct and Ethics,
other PPK policies or regulatory requirements or laws.
The Company will investigate any concerns raised in a manner
that is fair, objective and affords natural justice to all people
involved. The Company is committed to making necessary
changes to its processes and taking appropriate action in relation
to employees found to have behaved contrary to legal and
Company standard requirements.
P A G E 2 8
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Statement of Corporate Governance Practices - 2009 (continued)
PRINCIPLE 4: Safeguard integrity of 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 4.2: Structure the audit committee
so that it:
•
•
•
consists of only 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 (3) members.
Recommendation 4.3: The audit committee should have
a formal charter.
Recommendation 4.4: Provide the information
indicated in Guide to reporting on Principle 4.
Establishment of Audit Committee
The PPK Board established the Audit Committee in 1994 which
continues to provide assistance to the Board in accordance with its
established Terms of Reference.
Audit Committee structure
PPK does not comply with Recommendation 4.2 regarding the
desired number of members of the audit committee.
PPK is not presently required to comply with the requirement
for at least three (3) members on its Audit Committee under the
current ASX Listing Rules.
The Company, therefore, otherwise complies with
Recommendation 4.2.
The current PPK Audit Committee comprises only two (2) non-
executive directors and is chaired by Mr R M Beath who is not
chairman of the Board.
The Board considers that the technical skills, qualifications and
experience represented by the involvement of members Mr R M
Beath and Mr C R Ryan are most suited to the effective discharge
of the responsibilities of the committee.
PPK does not consider that any further value will be added by
the inclusion of another member for the sake of satisfying this
requirement, particularly given the small size and diversity of the
PPK Board.
The Board will, however, continue to monitor the requirements of
this recommendation in the context of the Company’s prevailing
position and circumstances.
Audit Committee – Terms of Reference
The PPK Audit Committee role and responsibilities, composition,
structure and membership requirements are detailed in a
formalised charter comprising the Audit Committee – Terms of
Reference.
The principal functions of the PPK Audit Committee as detailed
within the Terms of Reference are to:
•
•
•
review of the annual and half yearly financial reporting carried
out by PPK;
review of the accounting policies of PPK;
review the scope and audit programmes of the internal and
external auditors and any material issues arising from these
audits;
• oversee the independence of external auditors and
determining procedures for the rotation of audit partners; and
•
report to the Board on the effectiveness of PPK’s systems of
accounting and internal controls.
Reflecting the relative small size of the Company, the full Board
remain responsible for:
•
the sufficiency of, and compliance with, ethical guidelines and
Company policies affecting corporate governance, financial
reporting and corporate control together with compliance
with laws and external regulations;
P A G E 2 9
Statement of Corporate Governance Practices - 2009 (continued)
identification of the full range of actual or potential risk
exposures which are material to PPK; and
Specifically, the external auditor will not normally provide the
following types of services to the Company:
•
•
the effectiveness of the group’s risk management systems and
strategies.
Meetings
The audit committee prepares and maintains a register of minutes
of its meetings and these are included in the Board papers for the
next full Board meeting after each audit committee meeting.
Reporting
The Chair of the Audit Committee reports to the Board as and
when required on matters relevant to the committee’s role and
responsibilities.
Engagement & rotation of external auditor
The Audit Committee is responsible for nominating the external
auditor to the Board for re-appointment. If the Audit Committee
recommends a change in external auditor to the Board, the
Board’s nomination of external auditor requires the approval of
shareholders. The Audit Committee recommends to the Board the
compensation of the external auditor.
The Audit Committee meets with the external auditor throughout
the year to review the adequacy of the existing external audit
arrangements with particular emphasis on the scope, quality and
independence of the audit.
It has been determined by the Audit Committee that the external
auditor will not provide services to the Company where the
auditor would:
• have a mutual or conflicting interest with the Company;
• be in a position where they audit their own work;
•
function as management of the Company; or
• have their independence impaired or perceived to be impaired
in any way.
P A G E 3 0
• bookkeeping or other services relating to the accounting
records or financial statements of the Group;
• financial information or information technology systems
design and implementation;
• appraisal and valuation services, fairness opinions or
contributions-in-kind reports;
• actuarial services;
•
internal audit outsourcing services;
• management functions, including temporary staff
assignments or human resource services, including
recruitment of senior management;
• broker or dealer services, investment advisor, corporate
finance or investment banking services; and
•
legal and litigation support services.
Procedures are in place governing approval of any non-audit work
before the commencement of any engagement.
BDO Kendalls were appointed independent external auditors of
PPK on listing of the former entity Plaspak Group Limited in 1994.
In 2008, BDO Kendalls resigned as auditor and were replaced
by BDO Kendalls Audit & Assurance (NSW-VIC) Pty Ltd (“BDO
Kendalls Audit & Assurance”) following receipt of consent from
ASIC and shareholder approval at the Company’s 2008 Annual
General Meeting respectively. BDO Kendalls Audit & Assurance
continue to act in this role in respect of the consolidated entity.
The Board has elected to adopt a policy which is consistent with
the primary and secondary rotation obligations regarding auditors
such that:
•
•
the lead or review audit partner’s responsibilities may not
be performed by the same person for longer than five (5)
successive years (“primary rotation obligation”); and
the lead or review audit partner’s responsibilities may not be
performed by the same person for more than five (5) out of
seven (7) successive years (“secondary rotation obligation”).
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Statement of Corporate Governance Practices - 2009 (continued)
In addition, the Board requires a minimum of two (2) consecutive
years “cooling off” period before an auditor undergoing rotation
can return to playing a significant role in the audit of the
Company.
During the reporting period, the lead audit partner for PPK was
Mr Wayne Basford.
Mr Basford has fulfilled this role in respect of the Company since
the 2006 financial year.
Details of the members of the Audit Committee
The Board’s Audit Committee consists of:
Mr R M Beath (Chairman)
Mr C F Ryan
During the 2009 financial year, the lead signing and review
External Audit Partner and the Company’s Managing Director
attended committee meetings by standing invitation.
The qualifications of each member of the committee are set out
in the Directors’ Report on pages 5 to 6 of the PPK 2009 Annual
Report.
Number of Meetings and Names of Attendees
The number of meetings held during the reporting period and
the attendees at these meetings is detailed within the Directors’
Report.
Audit Committee Charter
The PPK Audit Committee Charter is available at
www.ppkgroup.com.au.
PRINCIPLE 5: Make timely and balanced
disclosure
Companies should promote timely and balanced
disclosure of all material matters concerning the
Company.
Recommendation 5.1: Establish written policies and
procedures 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: Provide the information
indicated in Guide to reporting on Principle 5.
Policies & procedures regarding disclosure requirements
The PPK Board is committed to keeping its shareholders, and the
market, fully informed of major developments having an impact
on the Company.
Comprehensive procedures are in place to identify matters that are
likely to have a material affect on the price, or value, of the PPK
securities and to ensure those matters are notified to the ASX in
accordance with ASX Listing Rule disclosure requirements.
Senior management and the Board are responsible for scrutinising
events and information to determine whether the disclosure
of the information is required in order to maintain the market
integrity of the Company’s shares listed on the ASX.
The Company Secretary is responsible for all communications
with the ASX.
Compliance with Listing Rule Disclosure Requirements
The procedures relating to the notification of price sensitive
information to the ASX and the subsequent posting of
announcements on the PPK website are detailed within the PPK
Market Disclosure Policy available at
www.ppkgroup.com.au.
P A G E 3 1
Statement of Corporate Governance Practices - 2009 (continued)
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: Design and disclose a
communications policy to promote effective
communication with shareholders and encourage
effective participation by them at general meetings.
Recommendation 6.2: Provide the information
indicated in Guide to reporting on Principle 6.
Shareholder Communication Policy
PPK recognises the right of shareholders to be informed of
matters, in addition to those prescribed by law, which affect their
investments in the Company.
The PPK Shareholder Communication Policy demonstrates PPK’s
commitment to:
• dealing fairly, transparently and openly with both current and
prospective shareholders;
•
•
the use of available channels and cost effective technologies
to reach shareholders who may be geographically dispersed
and in order to communicate promptly with all shareholders;
and
facilitating participation in shareholders meetings and dealing
promptly with shareholder enquiries.
PPK communicates information to shareholders through:
•
the annual report;
• disclosures to the ASX and ASIC;
• notices and explanatory memoranda of annual general
meetings and general meetings;
• occasional letters from the Managing Director and Chairman
to inform shareholders of key matters of interest; and
•
the Company’s website on the internet at:
www.ppkgroup.com.au.
The Board encourages active participation by shareholders at each
Annual General Meeting, or other general meetings, to ensure a
high level of accountability and understanding of PPK’s strategy,
performance and goals.
Consistent with best practice, important issues are presented
to shareholders as single resolutions expressed in plain,
unambiguous language. Proceedings are held in a locality, and at
a readily accessible venue, conducive to maximising the number
of shareholders present, and able to participate, at the meeting.
Shareholders are provided with opportunities of asking the Board
questions regarding the management of the Company.
Policy Disclosure
The ways in which PPK will communicate effectively with its
shareholders are detailed within the Cool of Cosy Shareholders
Communications Policy available at www.ppkgroup.com.au.
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
P A G E 3 2
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Statement of Corporate Governance Practices - 2009 (continued)
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.
Oversight and management of material business risks
The Board of PPK:
•
•
recognise that effective management of risk is an integral part
of good management and vital to the continued growth and
success of PPK;
is responsible for the oversight of the group’s risk
management and control framework including the
development of risk profiles as a part of the overall business
and strategic planning process; and
• has implemented a policy framework designed to ensure
that the group’s risks are identified, analysed, evaluated,
monitored, and communicated within the organisation on an
on-going basis, and that adequate controls are in place and
functioning effectively.
The PPK risk management and control policy framework
incorporates the maintenance of appropriate policies, procedures
and guidelines which address the Company’s unique operating
environment and is utilised by the Board as a means of identifying
opportunities and avoiding or mitigating losses in the context of
its businesses.
The Audit Committee assists the Board in its risk management
role by reviewing the financial and reporting aspects of the
group’s risk management and control practices.
The Managing Director has ultimate responsibility for control
and management of operational risk and the implementation
of avoidance or mitigation measures within the group and
may delegate control of these risks to the appropriate level of
management at each site.
The Board regularly monitors the operational and financial
performance of the Company and the economic entity against
budget and other key performance measures. The Board also
receives and reviews advice on areas of operational and financial
risk and develops strategies, in conjunction with management, to
mitigate those risks.
Each month, a report is presented to the Board by the Managing
Director. The reports encompass matters including actual financial
performance against budgeted forecasts, workplace health and
safety, legal compliance, corporate governance, strategy, quality
assurance and standards, human resources, industry and market
information, operational developments and environmental
conformance. Reports are prepared and submitted on a monthly
basis by the Group Accountant in relation to the overall financial
position and performance of the Company. In addition to
formalised written reporting procedures, the Board is regularly
briefed by the Managing Director and senior management
on emerging or developed trends in market and operational
conditions having the potential to impact on the performance of
the group.
Management has reported to the Board on the effectiveness
of the Company’s management of its material business risks
in respect of the year ended 30 June 2009. This report was
undertaken in accordance with the process outlined in this
Statement.
CEO & CFO Assurance
The Managing Director and Group Accountant of PPK report
annually in writing to the Board that:
•
consolidated financial statements of PPK and its controlled
entities for each subsequent half year and full financial year
present a true and fair view, in all material respects, of the
Group’s financial condition and operational results and are in
accordance with accounting standards; and
• declarations provided in accordance with section 295A of
the Corporations Act are 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.
P A G E 3 3
Statement of Corporate Governance Practices - 2009 (continued)
The Board has received assurance from the chief executive officer
and the chief financial officer equivalent under Recommendation
7.3 in respect of the year ended 30 June 2009. This assurance
was provided in accordance with the process outlined in this
Statement.
During the 2009 financial year, the PPK Board consisted of only
five (5) members. It is considered that further division of the
Board for the purposes of establishing a formal remuneration
committee structure would not achieve enhanced efficiency or
enable the Board to add greater value to this process.
Policy Disclosure
PPK has made a description of its Risk Oversight & Management
Framework comprising its internal compliance and control
system policy publicly available and posted it to its website in the
designated corporate governance area at www.ppkgroup.com.au.
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: Companies should clearly
distinguish the structure of non-executive directors’
remuneration from that of executive directors and
senior executives.
Recommendation 8.3: Companies should provide the
information indicated in the Guide to reporting on
Principle 8.
Establishment of Remuneration Committee
PPK has elected not to adopt Recommendation 8.1 because it
considers that its existing remuneration practices, detailed within
this Statement, are an efficient means of meeting the needs of
the Company, particularly having regard to the fact that PPK is a
relatively small publicly listed Company by comparison to other
listed entities which is reflected by the size of its operations, board
and management structure and composition.
The small size of the PPK Board, the nature of its business and its
management structure, means that PPK has the present capacity
of giving due consideration to the overall remuneration policies
and strategies of the Company during the conduct of its regular
board meetings and by appropriate recourse to relevant market
data and, where applicable, to external executive remuneration
consultants.
Director and senior executive remuneration
The aggregate remuneration of non-executive directors is
approved by shareholders.
Individual directors’ remuneration is determined by the board
within the approved aggregate total. In determining the
appropriate level of director’s fees, data from surveys undertaken
of other public companies similar in size or market section to PPK
is taken into account.
Non-executive directors of PPK are:
• not entitled to participate in performance based remuneration
practices unless approved by shareholders; and
•
currently remunerated by means of the payment of cash
benefits in the form of directors’ fees.
PPK does not currently have in place a retirement benefit scheme
or allowance for its non-executive directors.
Executive directors do not receive directors’ fees.
A review of the compensation arrangements for the Managing
Director and Senior Executives is conducted by the full Board at
a duly constituted Directors’ Meeting. The review is performed
annually and is based on criteria including the individual’s
performance, market rates paid for similar positions and the
results of the Company during the relevant period.
P A G E 3 4
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Statement of Corporate Governance Practices - 2009 (continued)
The broad remuneration policy objective of PPK is to ensure that
the emoluments provided properly reflect the person’s duties and
responsibilities and is designed to attract, retain and motivate
executives of the highest possible quality and standard to enable
the organisation to succeed.
The PPK Executive Incentive Scheme (PEIS) has been approved by
shareholders and provides the Board with the discretion to grant
options and provide loans to Eligible Executives (as defined under
the PEIS) for the purpose of acquiring Scheme Shares.
The Board ensures that the payment of equity-based executive
remuneration is made in accordance with thresholds established
by the PEIS and exercises its discretion under the Scheme in a
manner consistent with the broad remuneration policy objectives
of the Company.
There were no options granted or loans provided to Eligible
Executives during the 2009 financial year.
PPK is committed to making timely disclosure of all relevant
information relating to its remuneration practices and policies
in the context of its reporting obligations in the corporate
governance statement, in its annual report, and pursuant to
continuous disclosure requirements.
Policy Disclosure
The Company’s policies relating to the remuneration of Directors
and Senior Executives and the level of their remuneration are
detailed in the Directors’ Report on pages 11 to 19 of the PPK
2009 Annual Report and Notes 5 to 33 to the 2009 Financial
Statements.
A copy of the PPK Remuneration Policy is publicly available in the
designated corporate governance area of its website at
www.ppkgroup.com.au.
s Rambor PDH shearer mounted rig in use at Angus Place Mine,
Lithgow, New South Wales
P A G E 3 5
INCome STATemeNTS
FOR THE YEAR ENDED 30 JUNE 2009
reVeNUeS
Mining equipment manufacture
Investment properties
Investment activities
Interest Received
ToTAL reVeNUe
oTHer INCome
eXPeNdITUre
Mining equipment manufacture
Investment properties
Investment activities
Administrative expenses
Finance costs
ToTAL eXPeNdITUre
ProFIT/(LoSS) BeFore INCome TAX eXPeNSe
Income tax credit/(expense) attributable to profit
ProFIT/(LoSS) AFTer INCome TAX
overall operations
Basic earnings per share ( cents per share )
Diluted earnings per share ( cents per share )
Dividends per share
The acCompanying notes form part of these financial statements
CONSOLIDATED ENTITy
PARENT ENTITy
2009
$000s
-
2,052
-
13
2,065
-
-
-
-
(104)
(1,062)
(1,166)
899
(245)
654
2008
$000s
-
349
-
67
416
-
-
-
(489)
(151)
(1,229)
(1,869)
(1,453)
63
(1,390)
Note
2(a)
2(b)
2(d)
3
7
7
2009
$000s
4,867
4,776
47
428
10,118
220
(3,872)
(783)
(2,755)
(1,308)
(1,159)
(9,877)
461
79
540
0.9
0.9
4.75
2008
$000s
4,251
4,396
23
968
9,638
1,491
(3,649)
(923)
(2,370)
(1,976)
(1,509)
(10,427)
702
(95)
607
1.0
1.0
11.5
P A G E 3 6
BALANCe SHeeTS
AS AT 30 JUNE 2009
CUrreNT ASSeTS
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Assets classified as held for sale
ToTAL CUrreNT ASSeTS
NoN-CUrreNT ASSeTS
Trade and other receivables
Financial assets
Investment Properties
Other Property, plant and equipment
Deferred tax assets
Intangible assets
Derivatives
ToTAL NoN-CUrreNT ASSeTS
ToTAL ASSeTS
CUrreNT LIABILITIeS
Trade and other payables
Interest Bearing Liabilities
Current tax liabilities
Provisions
ToTAL CUrreNT LIABILITIeS
NoN-CUrreNT LIABILITIeS
Interest Bearing Liabilities
Deferred tax liabilities
Provisions
ToTAL NoN-CUrreNT LIABILITIeS
ToTAL LIABILITIeS
NeT ASSeTS
SHAreHoLderS’ eQUITY
Contributed equity
Reserves
Retained earnings
ToTAL SHAreHoLderS’ eQUITY
The accompanying notes form part of these financial statements
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
CONSOLIDATED ENTITy
PARENT ENTITy
Note
2009
$000s
2008
$000s
2009
$000s
8
9
10
11
32
9
12
13
14
15
16
17
18
19
15
20
21
15
20
22
23
191
2,261
1,423
355
4,230
703
4,933
2,331
2,411
35,137
2,027
2,200
857
288
45,251
50,184
692
178
730
688
2,288
12,100
318
29
12,447
14,735
35,449
31,249
(9)
4,209
35,449
1,349
3,263
1,051
362
6,025
703
6,728
7,216
3,276
40,466
2,149
2,070
892
1,347
57,416
64,144
1,027
2,856
866
310
5,059
19,562
876
338
20,776
25,835
38,309
32,033
(152)
6,428
38,309
-
34,351
-
102
34,453
-
34,453
-
41,373
-
-
278
-
-
41,651
76,104
27,285
-
730
-
28,015
12,100
179
-
12,279
40,294
35,810
31,249
8
4,553
35,810
2008
$000s
-
31,443
-
129
31,572
-
31,572
439
41,373
-
-
292
-
-
42,104
73,676
15,932
-
866
-
16,798
18,000
179
-
18,179
34,977
38,699
32,033
8
6,658
38,699
P A G E 3 7
CONSOLIDATED ENTITy
PARENT ENTITy
2009
$000s
9,920
(6,363)
5
47
397
(806)
(234)
2,966
4,920
(396)
401
(896)
(303)
-
(78)
3,648
(149)
(784)
-
(7,393)
7,219
(392)
(2,759)
(1,159)
(5,417)
1,197
(1,161)
36
2008
$000s
8,556
(6,434)
66
23
898
(3,210)
(199)
(300)
-
(733)
3,772
(2,439)
(1,928)
(340)
(99)
(1,767)
-
(1,540)
-
11,498
229
(397)
(6,998)
(1,509)
1,283
(784)
(377)
(1,161)
2009
$000s
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2008
$000s
-
(369)
-
-
67
(2,201)
-
(2,503)
-
-
-
-
-
-
-
-
-
(1,540)
(208)
12,000
228
-
(6,998)
(1,229)
2,253
(250)
250
-
CASH FLow STATemeNTS
FOR THE YEAR ENDED 30 JUNE 2009
Note
CASH FLowS From oPerATING ACTIVITIeS
Cash receipts from customers
Cash payments to suppliers and employees
Other revenue
Dividends received
Interest received
Income tax paid
Other taxes paid
Net cash provided by/( used in ) operating activities
30 (a)
CASH FLowS From INVeSTING ACTIVITIeS
Proceeds from sale of investment property,
Purchase of property, plant and equipment
Proceeds from sale of available-for-sale financial assets
Payments for available-for-sale financial assets
Payment for convertible notes
Payments for investment in derivatives
Payment for intangibles
Net cash provided by/(used in) investing activities
CASH FLowS From FINANCING ACTIVITIeS
Loans advanced
Payment for buyback of shares
Borrowings from/(loans to) related companies
(Repayment of)/Proceeds from bank loans
Loans repaid
Repayment of borrowings
Dividends paid
Interest paid
Net cash (used in)/provided by financing activities
Net increase / (decrease ) in cash held
Cash at the beginning of the financial year
Cash at the end of the financial year
The accompanying notes form part of these financial statements
30 (b)
P A G E 3 8
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
STATemeNTS oF CHANGeS IN eQUITY
FOR THE YEAR ENDED 30 JUNE 2009
CoNSoLIdATed eNTITY
At 1 July 2007
Fair value adjustment on available-for-sale financial assets
Realised gain on disposal of available-for-sale financial assets
less deferred tax impact
Total income and expense recognised directly in equity
Profit for the year
Total income and expense for the year
Dividends paid
Shares repurchased
Sale of subsidiaries
At 30 June 2008
Fair value adjustment on available-for-sale financial assets
expensed on impairment
less deferred tax impact
Fair value adjustment on available-for-sale financial assets
less deferred tax impact
Total income and expense recognised directly in equity
Profit for the year
Total income and expense for the year
Dividends paid
Shares repurchased
At 30 June 2009
PAreNT eNTITY
At 1 July 2007
Loss for the year
Total income and expense for the year
Dividends paid
Shares repurchased
At 30 June 2008
Profit for the year
Total income and expense for the year
Dividends paid
Shares repurchased
At 30 June 2009
ISSUED
CAPITAL
$000s
RETAINED
EARNINGS
$000s
OTHER
RESERVES
$000s
TOTAL
EqUITy
$000s
33,573
-
-
-
-
-
-
-
(1,540)
-
12,819
-
-
-
-
607
607
(6,998)
-
-
32,033
6,428
-
-
-
-
-
-
-
-
(784)
31,249
-
-
-
-
-
540
540
(2,759)
-
4,209
33,573
15,046
-
-
-
(1,540)
32,033
-
-
-
(784)
31,249
(1,390)
(1,390)
(6,998)
-
6,658
654
654
(2,759)
-
4,553
567
(579)
(449)
309
(719)
-
(719)
-
-
-
(152)
468
(140)
(264)
79
143
-
143
-
-
(9)
8
-
-
-
-
8
-
-
-
-
8
46,959
(579)
(449)
309
(719)
607
(112)
(6,998)
(1,540)
-
38,309
468
(140)
(264)
79
143
540
683
(2,759)
(784)
35,449
48,627
(1,390)
(1,390)
(6,998)
(1,540)
38,699
654
654
(2,759)
(784)
35,810
P A G E 3 9
Notes to and forming part of the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2009
1
STATemeNT oF SIGNIFICANT ACCoUNTING PoLICIeS
The principal accounting policies adopted in the preparation of the financial report are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.
The financial report includes separate financial statements for PPK Group Limited as an individual entity and the consolidated entity consisting of PPK Group
Limited and its subsidiaries.
PPK Group Limited is a Company limited by shares, incorporated in Australia. Its shares are publicly traded on the Australian Stock Exchange.
(a)
Basis of Preparation
The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards and other
authorative pronouncements of the Australian Accounting Standards Board, and the Corporations Act 2001.
The financial statements have been prepared on an accruals basis and are based on historical costs, except for available-for-sale financial assets and
derivatives which have been measured at fair value.
Compliance with Australian equivalents to International Financial Reporting Standards (AIFRS) ensures that the consolidated financial statements and
notes comply with International Financial Reporting Standards (IFRS).
The accounting policies have been consistently applied to the entities of the consolidated entity unless otherwise stated.
The Financial Report is presented in Australian currency.
The financial report of PPK Group Limited for the year ended 30 June 2009 was authorised for issue in accordance with a resolution of the directors on 29
September 2009.
(b)
Principles of Consolidation
The consolidated financial statements of the consolidated entity include the accounts of the Company, being the parent entity, and its subsidiaries (“the
Group”). Subsidiaries are entities over which the Group has the power to govern the financial and operating policies.
A list of all subsidiaries is contained in Note 12 to the accounts.
All interCompany balances and unrealised profits from transactions between subsidiaries have been eliminated. Where a subsidiary has been acquired or
disposed of during the year, its operating results have been included from the date of acquisition or until the date control ceased. Minority interests in the
equity and results of entities controlled by the Company are shown as a separate item in the consolidated accounts.
(c)
Goodwill on Consolidation/discount on Acquisition
Goodwill on consolidation is recorded initially at the amount by which the purchase price for a business or an ownership interest in a subsidiary exceeds
the fair value of identifiable net assets acquired and contingent liabilities assumed. Goodwill is tested annually for impairment and carried at cost less
accumulated impairment losses.
Goodwill acquired is allocated to each of the cash-generating units expected to benefit from the combination’s synergies. Impairment is determined by
assessing the recoverable amount of the cash-generating unit to which the goodwill relates. Impairment losses on goodwill cannot be reversed.
AASB 3 Business Combinations prohibits goodwill from being amortised and instead requires an impairment test to be carried out.
(d)
revenue and revenue recognition
Sales revenue
Sales revenue comprises revenue earned (net of returns, discounts and allowances) from the provision of products to entities outside the consolidated
entity. Sales revenue is recognised when the goods are provided (significant risks and rewards of ownership have passed).
Rental Income
Rental income on investment properties is accounted for on a straight-line basis over the lease term. Contingent rentals are recognised as income in the
periods when they are earned.
P A G E 4 0
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
1
STATemeNT oF SIGNIFICANT ACCoUNTING PoLICIeS (continued)
Interest income
Interest income is recognised as it accrues using the effective interest rate method.
Asset sales
Gains and losses on sale of assets is recognised on a net basis.
The gain or loss on disposal of assets is brought to account at the date an unconditional contract of sale is signed, or if a conditional contract is signed, the
date it becomes unconditional. In the case of real estate sales under AASB 118 it becomes unconditional when title passes.
Dividends
Dividends are recognised when the right to receive payment is established.
(e)
Inventories
Inventories are valued at the lower of cost and net realisable value. Cost comprises all direct materials, direct labour and an appropriate portion of variable
and fixed overheads.
Fixed overheads are allocated on the basis of normal operating capacity. Costs are assigned to inventory using a standard costing system. Net realisable
value is the estimated selling price in the ordinary course of business, less the estimated selling cost of completion and selling expenses.
(f)
Trade receivables
Trade receivables are recognised initially at original invoice amounts less an allowance for uncollectible amounts.
Trade receivables are due for settlement within 30 - 45 days and collectibility is assessed on an ongoing basis.
Debts which are known to be uncollectible are written off. An allowance is made for doubtful debts where there is objective evidence that the Group will
not be able to collect all amounts due according to the original terms.
Objective evidence of impairment include financial difficulties of the debtor, default of payment terms or debts more than 60 days past due. On
confirmation that the trade receivable will not be collectible the gross carrying value of the asset is written off against the associated provision.
From time to time the Group elects to renegotiate the terms of trade receivables due from customers with which it has previously had a good trading
history. Such renegotiations will lead to a change in the timing of payments rather than changes to the amount owed and are not, in the view of the
directors, sufficient to require the derecognition of the original instrument.
(g)
Income Tax
The income tax expense for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each
jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax base of assets and liabilities
and their carrying amounts in the financial statements, and to unused tax losses.
Exceptions are made for certain temporary differences arising on initial recognition of an asset or liability if they arose in a transaction other than a
business combination that at the time of the transaction did not affect either accounting profit or taxable profit.
Deferred tax assets are only recognised for deductible temporary differences and unused tax losses if it is probable that future taxable amounts will be
available to utilise those temporary differences and tax losses.
The amount of deferred tax assets which may be realised in the future is based on the assumption that no adverse change will occur in income taxation
legislation, and the anticipation that the consolidated entity will derive sufficient future assessable income to enable the benefit to be realised and
comply with the conditions of deductibility imposed by the law.
Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax bases of investments in subsidiaries,
associates and interests in joint ventures where the parent entity is able to control the timing of the reversal of the temporary differences and it is
probable that the differences will not reverse in the foreseeable future.
The consolidated entity and its wholly owned Australian subsidiaries have formed an income tax consolidated group under the Tax Consolidation Regime.
P A G E 4 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
1
STATemeNT oF SIGNIFICANT ACCoUNTING PoLICIeS (continued)
As a consequence the parent entity, as the head entity in the tax consolidated group is responsible for recognising the current tax assets and liabilities and
deferred tax assets arising from unused tax losses for the tax consolidated group.
Deferred tax assets and liabilities are accounted for by each entity separately using the stand alone taxpayer approach with movements in deferred
tax balances being accounted for through the income statement. The tax consolidated group has entered into a tax sharing agreement whereby each
Company in the group contributes to the income tax payable in proportion to their individually calculated share of the taxable income.
The amounts receivable/payable under tax funding arrangements are due upon notification by the head entity. These amounts are recognised as current
interCompany receivables or payables.
(h)
Investment Property & Property, Plant and equipment
Investment Properties
Investment properties are initially measured at cost including transaction costs. Subsequent to initial recognition, investment properties are carried at
cost, less depreciation and any impairment losses.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the group.
Depreciation on investment properties is calculated on a straight-line basis over the estimated useful life of the asset of 50 years. Land is not depreciated.
The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at each balance sheet date.
Gains and losses on disposals are calculated as the difference between the net disposal proceeds and the asset’s carrying amount and are included in the
income statement in the year that the item is derecognised.
Other Property, plant and equipment
Other Property, plant and equipment are brought to account at cost less, where applicable, any accumulated depreciation or amortisation.
The cost of fixed assets constructed within the consolidated entity includes the cost of materials used in construction, direct labour and an appropriate
proportion of fixed and variable overheads.
The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, is depreciated over their useful
lives to the consolidated entity commencing from the time the asset is held ready for use. Leasehold improvements are amortised over the shorter of
either the unexpired period of the lease or the estimated useful lives of the improvements.
The gain or loss on disposal of all fixed assets is determined as the difference between the carrying amount of the asset at the time of disposal and the
proceeds of disposal, and is included in profit before income tax of the consolidated entity in the year of disposal.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
S
Buildings
Leasehold Improvements
Plant & Equipment
Leased Plant & Equipment
Non-current assets classified as held for resale
depreciation rate
traight Line
2 %
over the term of the lease
3-50 %
3-33 %
Non-current assets classified as held for sale are those assets whose carrying amounts will be recovered principally through a sale transaction rather than
through continuing use. These assets are stated at the lower of their carrying amount and fair value less costs to sell and are not depreciated or amortised.
Interest expense continues to be recognised on liabilities of a disposal group classified as an asset held for sale.
An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is recognised for subsequent
increases in fair value less costs to sell of an asset but not exceeding any cumulative impairment losses previously recognised.
P A G E 4 2
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
1
STATemeNT oF SIGNIFICANT ACCoUNTING PoLICIeS (continued)
A discontinued operation is a component of the group that has been disposed of or is classified as held for sale and that represents a separate major line
of business or geographical operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary
acquired exclusively with a view to resale. The results of discontinued operations are presented separately on the face of the income statement.
(i)
Investments and Financial Instruments
Recognition and Initial Measurement
Financial instruments, incorporating financial assets and liabilities, are recognised when the entity becomes a party to the contractual provisions of the
instrument. Trade date accounting is adopted for financial assets that are delivered within time frames established by marketplace convention.
Financial instruments, are initially measured at fair value plus transaction costs where the instrument is not classified as at fair value through profit
or loss. Transaction costs related to instruments classified as at fair value through profit or loss are expensed to profit or loss immediately. Financial
instruments are classified and measured as set out below.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the
entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where
the related obligations are either discharged, cancelled or expire.
The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid,
including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.
Classification and subsequent measurement
(i)
Loans and receivables
Loans and receivables are non-derivative financial assets with a fixed or determinable payments that are not quoted in an active market and are
subsequently measured at amortised cost using the effective interest rate method.
The host debt contract of a convertible note is classified as loans and receivables. The host debt contract is measured initially at the residual
amount after separating the embedded option derivative.
The host debt contract is subsequently at amortised cost using the effective interest rate method.
(ii)
Held-to-maturity investments
Held to maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the
group’s intention to hold the investments to maturity. They are subsequently measured at amortised cost using the effective interest rate method.
(iii)
Available-for-sale financial assets
Available-for-sale financial assets comprise investments in listed and unlisted entities and any non-derivatives that are not classified as any
other category, and are classified as non-current assets. unlisted investments do not have a quoted market price in an active market and their fair
value cannot be reliably measured, so they remain valued at their cost after initial recognition. Listed investments are valued subsequent to initial
recognition at fair value based on current bid prices.
Changes in the value of listed investments available-for-sale financial assets are recognised in equity, unless assessment is made that there is
objective evidence that a available-for-sale financial assets have been impaired. A prolonged or significant decline in the value of available-for-
sale financial assets is considered to determine whether any impairment has arisen. Impairment losses are recognised in the income statement.
Dividend income from available-for-sale financial assets is recognised in the income statement as part of revenue from continuing operations
when the Group’s right to receive payments is established.
They are included in non-current assets unless management intends to dispose of the investment within 12 months.
(iv)
Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate
method.
P A G E 4 3
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
1
STATemeNT oF SIGNIFICANT ACCoUNTING PoLICIeS (continued)
(v)
Derivatives
Share options embedded in a convertible note is not closely related to the debt host contract and are separated from the debt host contract and
accounted for as a separate derivative. The share options are initially measured at fair value using the Black Scholes model or the listed market
price if one exists. Other share options are classified as a derivative and initially measured at fair value net of transaction costs. Subsequent
adjustments to fair value of the share options are taken to profit or loss.
The group does not use derivative financial instruments such as forward exchange contracts and interest rate swaps to mitigate risks associated
with interest rate and foreign exchange fluctuations.
(vi)
Subsidiaries
Investments in subsidiaries are accounted for in the consolidated financial statements as described in note 1(a) and in the parent entity financial
statements at cost in accordance with the cost alternative permitted in separate financial statements under AASB 127 Consolidated and Separate
Financial Statements.
(vii) Held for trading financial assets
Investments classified as Held for Trading are measured at fair value with gains or losses recognised in the income statement. A financial asset is
classified Held for Trading if acquired principally for the purpose of selling in the short term or if it is a derivative that is not designated as a hedge.
(j)
Leased Assets
For leases, a distinction is made between finance leases which effectively transfers from the lessor to the lessee substantially all the risks and benefits
incidental to ownership of the leased property, and operating leases under which the lessor retains all such risks and benefits. Where fixed assets are
acquired by means of finance leases, the lower of the present value of lease payments or the fair value of the leased property is established as an asset at
the beginning of the lease term and amortised on a straight line basis over its expected useful life.
A corresponding liability is also established and each lease payment is allocated between such liability and interest expense so as to achieve a constant
rate of interest on the remaining balance of the liability.
Operating lease payments are charged to the income statement on a straight line basis over the period of the lease.
(k)
Foreign Currency
Transactions and Balances
Foreign currency transactions during the period are converted to Australian currency at rates of exchange applicable at the dates of the transactions.
Amounts receivable and payable in foreign currency at balance date are converted at the rates of exchange ruling at year end.
The gains and losses from conversion of short term balances, whether realised or unrealised, are recognised in the income statement.
(l)
Trade and other payables
These amounts represent unpaid liabilities for goods received and services provided to the group and parent entity prior to the end of the financial
year. The amounts are unsecured and are normally settled within 30 to 60 days, except for imported items for which 90 or 120 day payment terms are
normally available.
(m) Bank Loans
All loans and borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost.
Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the period of the
loans and borrowings using the effective interest method. Bank loans are subject to set-off arrangements.
P A G E 4 4
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
1
STATemeNT oF SIGNIFICANT ACCoUNTING PoLICIeS (continued)
(n)
employee Benefits
Provision is made for the liability for employee benefits arising from services rendered by employees to balance date. Employee benefits expected to
be settled within one year have been measured at the amounts expected to be paid when the liability is settled plus related on-costs. Other employee
benefits payable later than one year have been measured at the present value of the future cash outflows to be made for those benefits, discounted
using national government bond rates at balance date with terms to maturity and currency that match as closely as possible the estimated future cash
outflows.
The Group makes payments to defined contribution superannuation funds in order to meet superannuation guarantee legislation requirements.
Contributions are recognised as expenses as they become payable.
(o)
Cash
For the purposes of the cash flow statement, cash includes cash on hand and at call deposits with banks or financial institutions, net of bank overdrafts.
(p)
Intangible assets
Acquired Brand names are recorded at cost and are classified as indefinite useful life intangible assets under AASB 138 “Intangible Assets” and will be
subject to annual review for both impairment and the appropriatness of useful life and whether events or circumstances continue to support an indefinite
useful life assessment.
Other Intangible assets such as Patents and Computer Software are recorded at cost and amortised on a straight line basis over the number of years of
their expected benefit which ranges from 3 to 10 years.
(q)
Impairment of Assets
At each reporting date the Group assesses whether there is an indication that individual assets are impaired. Where impairment indicators exist,
recoverable amount is determined and impairment losses are recognised in the income statement where the asset’s carrying value exceeds its recoverable
amount. Recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purpose of 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.
Where it is not possible to estimate recoverable amount for an individual asset, recoverable amount is determined for the cash-generating unit to which
the asset belongs.
(r)
Finance costs
All interest costs are recognised in income in the period in which they are incurred.
(s)
Share-Based Payments
The group recognises an expense for all share-based remuneration, including deferred shares and options, and amortises those expenses over the
relevant vesting periods.
No expense has been recognised in respect of options granted before 7 November 2002. Shares are recognised when options are exercised and the
proceeds received are allocated to share capital.
(t)
Comparative Figures
Where required by Accounting standards comparative figures have been adjusted to conform with changes in presentation for the current financial year.
(u)
rounding of Amounts
The parent entity has applied the relief available under ASIC Class Order 98/100 and accordingly, amounts in the financial statements and directors’ report
have been rounded to the nearest thousand dollars, or in certain cases, to the nearest dollar.
P A G E 4 5
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
1
STATemeNT oF SIGNIFICANT ACCoUNTING PoLICIeS (continued)
(v)
dividends
Provision is made for dividends declared, and no longer at the discretion of the Group, on or before the end of the financial year but not distributed at
balance date.
(w)
earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to members of PPK Group Limited, by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in ordinary shares during the year.
Diluted earnings per share
Earnings used to calculate diluted earnings per share are calculated by adjusting the basic earnings by the after-tax effect of dividends and interest
associated with dilutive potential ordinary shares. The weighted average number of shares used is adjusted for the weighted average number of shares
assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
(x)
GST
Revenues and expenses are recognised net of GST except where 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.
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 balance sheet.
Cash flows are included in the cash flow statement on a gross basis and the GST component of cash flows arising from investing and financing activities,
which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
(y)
New Accounting Standards and interpretations
The following standards, amendments to standards and interpretations have been identified as those that may impact the entity in the period of initial
application. They are available for early adoption at 30 June 2009, but have not been applied in preparing this financial report:
AASB 8 Operating Segments, Revised AASB 101 Presentation of Financial Statements,
Revised AASB 3 Business Combinations, Revised AASB 127 Consolidated and Separate Financial Statements and AASB 2008-3
Amendments to Australian Accounting Standard - arising from AASB 3 and AASB 127
AASB 2009-2 Improving Disclosures about Financial Instruments.
The Group has determined that there will be no material change on the Group’s financial reports following adoption of these standards in future years, as
either their application is only required to be applied prospectively, they are disclosure standards only and there will be no material impact on amounts
recognised in the financial statements or they are disclosure standards only that will require various additional disclosures.
Critical accounting estimates and judgements
The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information.
Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group.
Key estimates - Impairment
The Group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets.
Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts
incorporate a number of key estimates.
P A G E 4 6
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
1
STATemeNT oF SIGNIFICANT ACCoUNTING PoLICIeS (continued)
The continued down turn in the Australian share market had a significant impact on the fair value of listed investments.
The Group reviewed each of its listed investments to consider whether there was any indication that individual investments were impaired.
Based on all the information available to the Directors it was determined that the Group’s investment in the following listed companies were impaired:
Allomak Limited
TSV Holdings Limited
ABC Learning Centres Limited
Industrea Limited
Allied Brands Limited
Frigrite Limited
As a result an impairment loss of $1,696,000 (2008 $2,122,000) was taken up in the income statement on these investment.
The Directors determined that no other listed investments were impaired at balance date.
No impairment has been recognised in respect of goodwill, brand names, investment properties, plant and equipment or convertible notes for the current
financial year. Refer to note 16 for details of assumptions used in estimating the recoverable amount of intangible assets.
Key judgements - Classification as Held for Sale
The Group classifies assets as held for sale where an asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are
usual and customary for sales of such assets (or disposal groups) and the sale is highly probable. For the sale to be assessed as highly probable, management
must be committed to a plan to sell the asset (or disposal group), and an active program to locate a buyer and complete the plan must have been initiated.
Further, the asset (or disposal group) must be actively marketed for sale at a price that is reasonable in relation to its current fair value. In addition, the sale
should be expected to qualify for recognition as a completed sale within one year from the date of classification and actions required to complete the plan should
indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
The Group has land located at Arndel Park, New South Wales currently on the market for sale and consequently have classified this asset as Held for sale.
Although this property has been on the market for sale for more than 12 months, it is considered appropriate to still classify this property as Held for Sale, as it
has continued to be actively marketed through a period of adverse economic conditions, which have impacted on the ability to achieve a sale.
P A G E 4 7
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
2
reVeNUe, oTHer INCome & eXPeNSeS From oPerATIoNS
CONSOLIDATED ENTITy
PARENT ENTITy
Note
( c)
2009
$000s
4,867
4,776
47
-
428
10,118
13
132
-
70
5
220
417
11
-
428
113
2,583
478
410
888
1,059
-
1,696
-
1,696
2008
$000s
2009
$000s
2008
$000s
4,251
4,396
23
-
968
9,638
-
1,309
116
-
66
1,491
922
44
2
968
101
2,527
478
380
858
-
84
2,122
248
2,370
-
-
-
2,052
13
2,065
-
-
-
-
-
-
2
11
-
13
-
-
-
-
-
-
-
-
-
-
-
-
-
349
67
416
-
-
-
-
-
-
21
44
2
67
-
-
-
-
-
-
-
-
-
-
(a)
(b)
reVeNUe
Sale of goods
Rental income from investment properties
Dividends received - other parties
Distribution received from controlled trust
Interest received
oTHer INCome
Net gain on disposal of investment properties
Net gain on sale of available-for-sale financial assets
Fair value adjustment on derivatives
Foreign currency translation gains
Sundry income
(c)
INTereST INCome
Other persons
Directors
Key management personnel
(d)
eXPeNSeS
Profit before income
tax has been determined after:
Amortisation of intangibles
Cost of sales - mining equipment manufacture
Depreciation - investment properties
- plant and equipment
Total depreciation
Fair value adjustment on derivatives
Foreign currency translation losses
Impairment of available-for-sale financial assets
- Listed investments
- unlisted Investments
Total impairment
P A G E 4 8
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
2
reVeNUe, oTHer INCome & eXPeNSeS From oPerATIoNS (continued)
CONSOLIDATED ENTITy
PARENT ENTITy
(e)
3
(a)
Interest paid
- other
Impairment
- trade receivables
- other receivables
Defined contribution superannuation expense
Employee benefit expenses
Rental expense on operating leases
INdIVIdUALLY SIGNIFICANT ITemS - Gains or ( losses )
Foreign currency translation gains
Net Gain on Sale of rental property
Fair value adjustment on derivatives
Net gain on sale of Industrea Ltd shares
Impairment of available-for-sale financial assets
Impairment in investment of EZI Automation
Impairment in investment of Ventech Investments
InterCompany investment write-off following deregistration
INCome TAX eXPeNSe/BeNeFIT
The prima facie tax payable/(benefit) on the profit before income
tax is reconciled to the income tax as follows:
Profit before tax
Prima facie tax payable at 30% (2008: 30%)
Fully franked dividend received
InterCompany loan forgiveness not deductible under tax consolidation regime
Difference between trust profit and distribution due to carried forward losses in trust
Research & Development concession
Building allowance
Difference between accounting and tax cost base of investment
properties disposed of during the year
Sundry items
Over provision relating to prior year
Income tax (credit)/expense
2009
$000s
1,159
12
-
276
1,660
106
70
13
(1,059)
130
(1,696)
-
-
-
(2,542)
461
138
(14)
-
-
(26)
(78)
(55)
6
(50)
(79)
2008
$000s
1,509
-
182
296
1,630
90
(84)
-
116
1,305
(2,122)
(79)
(169)
-
(1,033)
702
211
-
-
-
(21)
(78)
-
4
(21)
95
2009
$000s
1,062
2008
$000s
1,229
-
-
-
-
-
-
-
-
-
-
-
-
899
269
-
-
-
-
(24)
-
-
-
245
-
-
-
-
-
-
-
-
-
-
(487)
(487)
(1,453)
(436)
-
146
272
-
(24)
-
-
(21)
(63)
P A G E 4 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
3
INCome TAX eXPeNSe/BeNeFIT (continued)
The applicable weighted average effective
tax rates are as follows:
(b)
The components of tax (credit)/ expense comprise:
Current tax
Deferred tax
under/(over) provision in respect of prior years
CONSOLIDATED ENTITy
PARENT ENTITy
2009
$000s
2008
$000s
2009
$000s
2008
$000s
-17%
14%
27%
4%
721
(750)
(50)
(79)
924
(808)
(21)
95
231
14
-
245
(166)
124
(21)
(63)
(c)
deferred tax recognised (reversed) directly in equity through
Available-for-sale Financial Asset Reserve relating to valuing
investments at fair value
61
(170)
-
-
PPK Group Limited (“PPK”) has formed a consolidated group for income tax purposes, effective on and from 1 July 2003, with each of its wholly owned
Australian subsidiaries.
PPK, as the head entity, has recognised all current income tax assets and liabilities relating to the consolidated group.
The entities within the Group have entered into a tax sharing agreement where each subsidiary will compensate PPK for the amount of tax payable that
would be calculated as if the subsidiary was a tax paying entity.
4
AUdITor’S remUNerATIoN
Remuneration of the auditor of the group and parent entity for :
- auditing or reviewing the financial report
- non audit services ( accounting / technical advice )
CONSOLIDATED ENTITy
PARENT ENTITy
2009
$
2008
$
2009
$
2008
$
76,835
-
76,835
74,700
2,200
76,900
-
-
-
-
2,200
2,200
P A G E 5 0
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
5
KeY mANAGemeNT PerSoNNeL dISCLoSUreS
(a)
Key management personnel disclosures
Short-term benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payments
.
CONSOLIDATED ENTITy
PARENT ENTITy
2009
$
2008
$
2009
$
2008
$
497,532
85,000
8,687
31,000
-
622,219
786,014
101,722
8,350
84,000
-
980,086
-
-
-
-
-
-
-
-
-
-
Further information regarding the identity of key management personnel and their compensation can be found in the Audited Remuneration Report
contained in the Directors’ Report of this annual report.
(b)
equity Instruments
Details of options and rights held directly, indirectly or beneficially by key management personnel and their related parties are as follows:
There were no options and rights held directly, indirectly or beneficially by key management personnel and their related parties in the current financial
year. All options and rights held expired in the 2008 financial year.
Balance Granted as
options
1.7.07 remuneration exercised
Lapsed
Balance
30.6.08
Total
Total
Vested exerciseable Unexercisable
30.6.08
30.6.08
30.6.08
Total
Parent Entity Directors
Mr C.F. Ryan
Mr R.M.Beath
Mr J.I. Wowk
Mr D.A. Hoff
Other Key Management Personnel
Mr.F.J. Hardiman
Mr R.J.Nicholls
300,000
300,000
300,000
-
-
-
Total
900,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
300,000
300,000
300,000
-
-
-
900,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
P A G E 5 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
5
KeY mANAGemeNT PerSoNNeL dISCLoSUreS (continued)
(c)
Shareholdings
Number of Shares held by Parent Entity Directors and other key management personnel
Parent Entity Directors
Mr C.F. Ryan
Mr G.R. Molloy
Mr R.M.Beath
Mr J.I. Wowk
Mr D.A. Hoff
Parent Entity Directors
Mr C.F. Ryan
Mr G.R. Molloy
Mr R.M. Beath
Mr J.I. Wowk
Mr D.A. Hoff
Other key management personnel
Mr.F.J. Hardiman
Mr R.J. Nicholls
Balance
1.7.08
received as
remuneration
options
exercised
Net Change
other
Balance
30.6.09
500,000
8,752,400
42,821
87,302
856,960
10,239,483
-
-
-
-
-
-
-
-
-
-
-
-
-
1,492,958
-
100,000
(700,000)
500,000
10,245,358
42,821
187,302
156,960
892,958
11,132,441
Balance
1.7.07
received as
remuneration
options
exercised
Net Change
other
Balance
30.6.08
500,000
8,547,270
42,821
87,302
856,960
324,172
70,625
10,429,150
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
205,130
-
-
-
(314,172)
(43,625)
500,000
8,752,400
42,821
87,302
856,960
10,000
27,000
(152,667)
10,276,483
(d)
Loans
Loans advanced to Parent Entity Directors and Key management personnel
2009
Parent Entity Directors
Mr D.A. Hoff
Executives
Mr R.J.Nicholls
Balance
1.7.08
$
Net Change
other
$
Balance
30.6.09
$
439,250
(439,250)
-
-
439,250
(439,250)
-
-
-
Interest Paid
or Payable
$
Highest
Indebtedness
during the Year
$
11,523
439,250
-
-
11,523
439,250
P A G E 5 2
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
5
KeY mANAGemeNT PerSoNNeL dISCLoSUreS (continued)
2008
Parent Entity Directors
Mr D.A. Hoff
Other Key Management Personnel
Mr.F.J. Hardiman
Mr R.J.Nicholls
Balance
1.7.07
$
437,500
83,375
16,467
537,342
Net Change
other
$
1,750
(83,375)
(16,467)
(98,092)
Balance
30.6.08
$
439,250
-
-
439,250
Interest Paid
or Payable
Highest
Indebtedness
during the Year
$
43,908
1,325
260
45,493
$
439,408
83,985
16,727
540,120
Loans to key management personnel excluding directors were made pursuant to the Plaspak Executive Incentive Scheme to assist in the exercise of option
to acquire shares in the Parent Entity. Loans are limited to 70% of the current market value of the shares at the time of the loan. Loans are for a term of
5 years or immediately repayable on termination of employment.
Interest only is payable monthly in arrears at a rate which is 3.25% above the current Reserve Bank of Australia Cash Rate. Security for the loans is by
way of a holding lock over the shares acquired with the loans. The loans are limited recourse, limited to the realisable value of the shares.
The lender has the right to sell or buy back the shares in the event that the value of the shares held as security falls below the purchase price of the shares
or the amount lent to acquire the shares. During the year the shares were sold and the proceeds used to repay
the loan to the Managing Director. The loans to key management personnel were repaid at the time employment ceased.
(e) other transactions with directors
Refer to Note 29 for further details of transactions with directors and director related entities.
P A G E 5 3
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
6
dIVIdeNdS
CONSOLIDATED ENTITy
PARENT ENTITy
2009
$000s
2008
$000s
2009
$000s
2008
$000s
1,889
1,987
1,889
1,987
870
-
2,759
1,954
3,057
6,998
870
-
2,759
1,954
3,057
6,998
(a)
dividends paid
Final ordinary dividend of 3.25c per share - 100% franked at 30% tax rate
( prior year 3.25c per share )
Interim ordinary dividend of 1.50c per share for 2009 year -
100% franked at 30% tax rate (prior year 3.25c per share - 100% franked)
Special dividend of 5.00c per share - 100% franked at 30% tax rate
(b)
dividends declared after balance date
Final ordinary dividend of 1.00c per share - 100% franked and amounting
to $580,000 not included as declared after balance date.
(c)
Franked dividends
The franked portions of the final dividends recommended after 30th June
2009 will be franked out of existing franking credits or out of franking credits
arising from the payment of income tax in the year ending 30th June 2009.
Franking credits available for subsequent financial years based on a tax rate
of 30% (2008 - 30%)
3,987
4,475
3,987
4,475
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
(a) franking credits that will arise from the payment of the current tax liability
(b) franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
(c) franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date, and
(d) franking credits that may be prevented from being distributed in subsequent financial years.
The consolidated amounts include franking credits that would be available to the parent entity if distributable profits of subsidiaries
were paid as dividends.
The impact on the franking account of dividends recommended after year end but before the financial report was authorised for issue
and not recognised as a liability at year end will be a reduction on the franking account of $249,000 (2008: $825,000).
under legislation that took effect on 1st July 2002, the amount recorded in the franking account is the amount of Australian income tax paid,
rather than franking credits based on after tax profits, and amounts debited to that account in respect of dividends paid after 30 June 2002
are the franking credits attaching to those dividends rather than the gross amount of the dividends.
P A G E 5 4
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
7
eArNINGS Per SHAre
Basic earnings per share (cents per share)
Continuing operations
Diluted earnings per share ( cents per share )
Continuing operations
(a)
reconciliation of earnings to Net Profit
Earnings used in calculating Basic EPS
Continuing operations
Earnings used in calculating Diluted EPS
Continuing operations
CONSOLIDATED ENTITy
2009
2008
0.9
0.9
1.0
1.0
2009
$000s
2008
$000s
540
540
No.
607
607
No.
(b) weighted average number of ordinary shares outstanding
during the year used in calculation of basic ePS
58,271,808
60,490,849
Potential ordinary shares assumed to have been issued for
no consideration
Weighted average number of ordinary shares outstanding during
the year used in calculation of diluted EPS
-
-
58,271,808
60,490,849
P A G E 5 5
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
8
CASH ANd CASH eQUIVALeNTS
CONSOLIDATED ENTITy
PARENT ENTITy
Note
2009
$000s
191
-
191
2008
$000s
174
1,175
1,349
19
(a)
(b)
(c)
(d)
(e)
(f)
(d)
(g)
191
(155)
36
954
(32)
922
1,816
(626)
1,190
-
-
149
149
2,261
-
-
2,331
2,331
1,349
(2,510)
(1,161)
1,138
(145)
993
896
(626)
270
-
2,000
-
2,000
3,263
439
4,780
1,997
7,216
2009
$000s
2008
$000s
-
-
-
-
-
-
-
-
-
29
-
29
34,322
-
-
34,322
34,351
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31,443
-
-
31,443
31,443
439
-
-
439
Cash at bank and on hand
Short-term bank deposits
Cash at bank and on hand
Cash at bank consists of temporary surplus funds which are non
interest bearing
The effective interest rate on short-term bank deposits was 7.5%
in 2008. These deposits had an average maturity of 30 days.
reconciliation of Cash
The above figures are reconciled to the cash at the end of the financial
year as shown in the statement of cash flows as follows:
Cash and cash equivalents
Bank overdrafts
9
TrAde ANd oTHer reCeIVABLeS
Current
Trade receivables
Less: Provision for impairment of receivables
Other Receivables
Less: Provision for impairment of receivables
Loans and receivables
- wholly owned subsidiaries
- other loans - secured
-trade finance facility - secured
Non-Current
Loans and receivables
- directors of parent entity - secured
- other loans - secured
- convertible notes
Other Non current Assets of continuing operations
P A G E 5 6
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
9
TrAde ANd oTHer reCeIVABLeS (continued)
(a)
Trade receivables
Current trade receivables are non-interest bearing and are generally 30 day terms. A provision for impairment is raised when there is objective evidence
that it is considered unlikely that any amounts will be recovered.
(b)
other receivables
Other receivables are non-interest bearing and are generally 30 day terms. A provision for impairment has been raised for the full amount of two loans in
other receivables where it is considered unlikely that any amounts will be recovered.
(c ) wholly owned subsidiaries
Loans to wholly owned subsidiaries are non-interest bearing and there are no fixed terms for the repayment of loans between parties.
(d)
other loans
Other loans are funds advanced to the purchaser of the customs packaging division on 29 June 2007. The amounts are secured over both property and
fixed and floating charges.
Interest is charged on these loans at the rate of 2.75% above the Reserve Bank official cash rate. The average interest rate for the period of the loan was
10.00%.
These loans were repaid in full in August 2008.
(e)
Trade finance facility
Trade finance facility is provided to Cool or Cosy Limited to finance the purchase of certain stock lines from approved suppliers. The facility is up to a
maximum of $800,000 and interest is charged at the Reserve Bank cash rate plus 4.75%. Repayment of amounts advanced are required within 120
days of receipt of goods. Security is by way of a first ranking floating charge over the air-conditioning stock of Cool or Cosy Ltd, limited to the maximum
value of the facility. The average interest rate for the year was 9.25%. The interest rate current for outstanding loans at balance date is 7.75%. The group
received 4,000,000 options in Cool or Cosy Limited for providing this facility (refer Note 17 for further details).
(f)
Loans to directors and key management personnel
Loans to key management personnel excluding directors were made pursuant to the Plaspak Executive Incentive Scheme to assist in the exercise of
options to acquire shares in the Parent Entity. Loans are limited to 70% of the current market value of the shares at the time of the loan. Loans are for a
term of 5 years or immediately repayable on termination of employment.
Interest only is payable monthly in arrears at a rate which is 3.25% above the current Reserve Bank of Australia Cash Rate. Security for the loans is by way
of a holding lock over the shares acquired with the loans. The loans are limited recourse, limited to the realisable value of the shares. The lender has the
right to sell or buy back the shares in the event that the value of the shares held as security falls below the purchase price of the shares or the amount
lent to acquire the shares. The loan to the Managing Director, as approved by shareholders, is on identical terms. The average interest rate for the year was
10.5%. The loan was repaid on 30 September 2008 following the sale of the shares.
(g)
Convertible notes
Convertible notes are funds invested in listed companies that can be converted to shares. The amounts are secured over a first or second ranking fixed and
floating charge over the companies assets.
On acquisition the note is split into its loan component and is recorded at amortised cost and is classified as a receivable and its derivative element is
recorded at its fair value and is classified as a derivative. The convertible notes maybe redeemed by the issuing Company, prior to conversion into shares,
for 110% of their face value.
The discount to their face value is taken as interest received over the life of the note. In 2008 the discount to the redemption value was taken as interest
received over the life of the note.
The effect of this change in policy is considered not to have had a material impact on the financial statements.
Interest is received on these notes at a fixed rate each quarter. The weighted average interest rate for the year on these notes was 11.6%
P A G E 5 7
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
9
TrAde ANd oTHer reCeIVABLeS (CONTINuED)
movement in balance of convertible notes in listed companies
Opening Balance
Initial investment in convertible note
Less part of cost assigned to cost of embedded option
Interest revenue added to carrying value
CONSOLIDATED ENTITy
PARENT ENTITy
Note
2009
$000s
2008
$000s
2009
$000s
2008
$000s
1,997
303
-
2300
31
2,331
-
2,157
(230)
1,927
70
1,997
-
-
-
-
-
-
-
-
-
-
-
-
Provision for Impairment of receivables
Current trade, term and other receivables and loans are assessed for recoverability based on the underlying terms of the contract. A provision for impairment is
recognised when there is an objective evidence that an individual trade or term receivable is impaired. These amounts have been included in the administrative
expenses item.
Movements in the provision for impairment are as follows:
Opening
balance
$000s
Charge for
the year
$000s
Amounts
written off
$000s
Closing
balance
$000s
Consolidated Group 2009
Current
Trade receivables
Other receivables
Consolidated Group 2008
Current
Trade receivables
Other receivables
145
626
771
145
444
589
12
-
12
-
182
182
(125)
(125)
-
-
-
32
626
658
145
626
771
The parent entity has no provisions for impairment of receivables, in the current year or the prior year. There are no provisions for impairment for Non-current
Trade and other receivables for the current year or prior year for both the Group and the parent entity.
CONSOLIDATED ENTITy
PARENT ENTITy
Note
2009
$000s
2008
$000s
2009
$000s
2008
$000s
Trade receivables ageing analysis
The ageing analysis of trade receivables for amounts not impaired for the Group and parent is as follows:
Not past due
Past due 1 - 30 days
Past due 31 - 60 days
Past due over 60 days
517
152
110
143
922
600
302
90
1
993
-
-
-
-
-
-
-
-
-
-
With respect to trade receivables that are neither impaired or past due, there are no indications as at reporting date that the debtors will not meet their
obligations as they fall due.
P A G E 5 8
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
9
TrAde ANd oTHer reCeIVABLeS (CONTINuED)
CONSOLIDATED ENTITy
PARENT ENTITy
Note
2009
$000s
2008
$000s
2009
$000s
2008
$000s
other receivables ageing analysis
The ageing analysis of other receivables for amounts not impaired for
the Group and parent is as follows:
Not past due
Past due 1 - 30 days
Past due 31 - 60 days
Past due over 60 days
With respect to other receivables that are neither impaired or past due,
there are no indications as at reporting date that the debtors will not
meet their obligations as they fall due.
10
INVeNTorIeS
On hand
Finished goods at cost
Provision for stock obsolescence
Work in Progress
Raw materials
In transit
Refer to Note 21 for details of inventory pledged as security
11 oTHer CUrreNT ASSeTS
Prepayments
The carrying amount of prepayments approximates fair value.
539
408
215
28
1,190
644
(10)
634
530
259
-
270
-
-
-
270
530
(10)
520
286
221
24
1,423
1,051
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
355
355
362
362
102
102
129
129
P A G E 5 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
12
FINANCIAL ASSeTS
CoUNTrY oF
INCorPorATIoN
BeNeFICIAL PerCeNTAGe owNed
BY CoNSoLIdATed eNTITY
PAreNT eNTITY
(a)
Investments (at cost) in subsidiary comprise:
2009
%
2008
%
Rutuba Pty Limited
Seven Hills Property Pty Ltd
PPK Property Trust
Dandenong South Property Pty Ltd
PPK Aust. Pty Ltd
Trigger Sprays Pty Ltd
PPK Investment Holdings Pty Ltd
PPK Properties Pty Ltd
Landmark Property Syndicate No 4
York Group Limited
Rambor Pty Ltd
King Cobra Mining Equipment Pty Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2009
$000s
-
8,051
6,339
9,430
5,497
-
-
-
-
12,056
-
-
41,373
2008
$000s
-
8,051
6,339
9,430
5,497
-
-
-
-
12,056
-
-
41,373
The proportion of ownership interest is equal to the proportion of voting power held.
The above investments in subsidiaries are all in ordinary class shares.
(b)
( i )
Available-for-sale financial assets
Listed Investments - at fair value
- Shares in listed corporations
Opening Balance
Additions at cost
Conversion of convertible notes (derivatives) into listed investments
Fair Value adjustments
Impairment
Disposals
CONSOLIDATED ENTITy
PARENT ENTITy
2009
$000s
2008
$000s
2009
$000s
2008
$000s
3,276
896
-
204
(1,696)
(269)
2,411
6,448
2,441
-
(579)
(2,122)
(2,912)
3,276
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Listed investments are recorded at fair value based on the ASX closing price at the 30 June of the relevant financial period.
P A G E 6 0
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
12
FINANCIAL ASSeTS (CONTINuED)
CONSOLIDATED ENTITy
PARENT ENTITy
2009
$000s
2008
$000s
2009
$000s
2008
$000s
(ii)
unlisted Investments - at cost less impairment
- Shares in other corporations
Cost
Impairment
unlisted investments are recorded at cost less impairment
which represents fair value at nil.
249
(249)
-
249
(249)
-
(iii)
Total Listed & unlisted Investments
2,411
3,276
-
-
-
-
-
-
-
-
Gains or losses arising from changes in the fair value of available-for-sale financial assets are initially recognised directly in equity through a reserve,
unless they are impaired.
When the available-for-sale financial asset is disposed of any gain or loss arising from the sale is taken out of the reserve and included in the profit or loss.
A significant or prolonged decline in the fair value of a security below its cost is considered an indicator that the securities are impaired. If such evidence exists for
available-for-sale financial assets, the value of the impairment is assessed and the difference between the cost and the impaired value, less any impairment loss
on that financial asset previously recognised in the profit or loss, is removed from equity and recognised in the income statement. Any subsequent difference
between the impaired value and the fair value will be recognised in equity through the reserve. Impairment losses recognised in the income statement on equity
instruments classified as available-for-sale are not reversed through the income statement.
P A G E 6 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
13
INVeSTmeNT ProPerTIeS
CONSOLIDATED ENTITy
PARENT ENTITy
Freehold land & buildings - at cost
Land
Buildings
Less: Accumulated depreciation
Total Investment Properties
reconciliations
Balance at the beginning of the year
Transfers from other property, plant & equipment
Expenditure subsequent to acquisition
Disposals
Depreciation expense
Less Classified as assets held for sale
Land
Total investment properties of continuing operations
The following amounts have been recognised in the income statement
Rental income
Direct operating expenses arising from investment property
that generated rental income during the period
Direct operating expenses arising from investment property
that did not generate rental income during the period
Note
14
32
2009
$000s
16,272
22,463
(3,598)
18,865
35,137
2008
$000s
20,562
23,111
(3,207)
19,904
40,466
41,169
41,256
17
39
(4,907)
(478)
35,840
(703)
35,137
-
391
-
(478)
41,169
(703)
40,466
4,776
4,396
747
36
895
28
2009
$000s
2008
$000s
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The Riverwood land & building was sold for $4.92 million resulting in profit on sale on sale over it’s carrying value of $13,000.
A independent valuation of Land & Buildings was undertaken in July 2006 on properties to be leased to the new owners of the plastics packaging
businesses.
The independent valuation carried out in July 2006 placed a value of $51.7 million on these properties.
Given the current economic climate the Director’s have re-assessed the value of land and buildings at year end to be $48.5m.
This value is based on an capitalisation of current rentals at a yield of 9.6% together with independent advice as to the current value of
vacant industrial land.
Capital gains tax that could be paid if the Land & Buildings were sold at balance date at the Director’s valuation is $4.0million.
These valuations have not been reflected in the accounts.
Non-current assets pledged as security
Refer to Note 21(b) for information on non-current assets pledged as security by the parent entity or its subsidiaries.
The Group tests for impairment and measures recoverable amount based on value-in-use based on the discounted future cash flows derived from
continued use of assets.
Impairment losses are included in the line item “Administrative expenses” in the income statement.
P A G E 6 2
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
13
INVeSTmeNT ProPerTIeS (CONTINuED)
CONSOLIDATED ENTITy
PARENT ENTITy
Note
2009
$000s
2008
$000s
2009
$000s
2008
$000s
Leases as Lessor
The investments properties are leased to tenants under long term
operating leases with rentals payable monthly.
In relation to one of the properties there is a current dispute as to whether
a valid lease is in place. It is expected that the Courts will determine the
dispute in October 2009.
If the Courts find in favour of the Group then minimum lease payment
under non cancellable operating leases of the investment properties not
recognised in the financial statements would be receivable as follows:
- not later than 1 year
- later than 1 year but not
later than 5 years
- later than 5 years
If the Group is unsuccessful in the legal action then minimum
lease payments under non cancellable operating leases of the investment
properties not recognised in the financial statements would be receivable
as follows:
- not later than 1 year
- later than 1 year but not
later than 5 years
- later than 5 years
Refer to Subsequent Event Note 31 for further details as to the
current position in relation to investment properties.
3,382
8,293
720
12,395
2,288
4,137
720
7,145
4,926
6,125
1,412
12,463
4,926
6,125
1,412
12,463
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
P A G E 6 3
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
14 oTHer ProPerTY PLANT ANd eQUIPmeNT
CONSOLIDATED ENTITy
PARENT ENTITy
2008
$000s
2009
$000s
2008
$000s
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Capital works in progress - at cost
Total property, plant and equipment of continuing operations
Note
2009
$000s
398
(148)
250
2,921
(1,168)
1,753
24
2,027
reconciliations
Reconciliations of the carrying amounts of each class of plant & equipment are set out below.
394
(109)
285
2,665
(829)
1,836
28
2,149
Consolidated - 2009
Carrying amount at start of year
Additions
Disposals
Transfers to inventories
Transfers to Investment properties - Note 13
Depreciation & Amortisation expense
Carrying amount at end of year
Consolidated - 2008
Carrying amount at start of year
Additions
Disposals
Depreciation & Amortisation expense
Carrying amount at end of year
Leasehold
Plant &
Improvements equipment
$’000
$’000
Capital works
In Progress
$’000
285
4
-
-
-
(39)
250
301
21
-
(37)
285
1,836
340
-
(52)
-
(371)
1,753
1,869
311
-
(344)
1,836
28
13
-
-
(17)
-
24
17
11
-
-
28
P A G E 6 4
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$’000
2,149
357
-
(52)
(17)
(410)
2,027
2,187
343
-
(381)
2,149
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
15
TAX
(a)
Assets
CONSOLIDATED ENTITy
PARENT ENTITy
Note
2009
$000s
2008
$000s
2009
$000s
2008
$000s
Deferred tax assets comprise temporary differences attributable to:
Amounts recognised in profit and loss
Doubtful Debts
Employee benefits
Building depreciation
Depreciation of intangibles
Impairment of investments
Fair value adjustment of investments
Inventory
Deferred rent receivable
s40-880 Black hole expenses
Other
Movements
Opening balance
Credit/(charged) to the income statement
Credit/(charged) to equity
Prior year adjustment
There are no unrecognised capital losses for which no deferred tax
asset has been recognised.
(b)
Liabilities
CUrreNT
Income Tax provision of continuing operations
NoN-CUrreNT
Deferred tax liability comprises temporary differences attributable to:
Amounts recognised in profit and loss
Rent receivable
Plant and equipment depreciation
Building depreciation
Fair value adjustment of derivatives
Fair value adjustment of Investments
Other
Deferred tax liability of continuing operations
198
215
606
28
1,122
-
3
-
5
23
2,200
2,070
130
-
-
2,200
231
194
600
56
777
138
3
-
16
55
2,070
1,276
589
138
67
2,070
-
-
273
-
-
-
-
-
5
-
278
292
(14)
-
-
278
-
-
284
-
-
-
-
-
8
-
292
249
43
-
-
292
730
866
730
866
61
32
196
14
(7)
22
318
-
34
245
483
70
44
876
-
6
173
-
-
-
179
-
6
173
-
-
-
179
P A G E 6 5
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
15
TAX (CONTINuED)
Movements
Opening balance
(Credit)/charged to the income statement
(Credit)/charged to equity
Prior year tax refund relating to building depreciation
Prior year adjustment
16
INTANGIBLe ASSeTS
Licences, software and patents - at cost
Less: Accumulated amortisation
Goodwill - Mining equipment manufacturing
Brand names - at cost
Intangible Assets of continuing operations
reconciliations
Licences, software and patents - at cost
Balance at the beginning of year
Additions - external purchases
Transfers from Plant and Equipment
Impairment of costs brought forward
Disposals
Amortisation charge (Amortisation charges are included within Cost of
Goods Sold and Administration expenses in the income statement.)
Goodwill
Balance at the beginning of year
Additions/Disposals/Impairment
Brand Names
Balance at the beginning of year
Additions/Disposals/Impairment
P A G E 6 6
CONSOLIDATED ENTITy
PARENT ENTITy
Note
2009
$000s
2008
$000s
2009
$000s
2008
$000s
876
(619)
61
-
-
318
1,117
(219)
(170)
73
75
876
179
-
-
-
-
179
12
167
-
-
-
179
CONSOLIDATED ENTITy
PARENT ENTITy
Note
2009
$000s
2008
$000s
2009
$000s
2008
$000s
650
(445)
205
155
497
857
240
78
-
-
-
(113)
205
155
-
155
497
-
497
572
(332)
240
155
497
892
261
99
-
(19)
-
(101)
240
155
-
155
497
-
497
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19
-
(19)
-
-
-
-
-
-
-
-
-
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
16
INTANGIBLe ASSeTS (CONTINuED)
Licences, software and patents have a finite useful life. They are recorded at cost and amortised on a straight line basis
over the number of years of their expected life which ranges from 3 to 10 years.
Goodwill is assessed to have an indefinite life, it is tested annually for impairment with any impairment losses being
charged to the income statement.
Brand names have been assessed to have an indefinite useful life. These brands are registered with the relevant agencies.
The registrations are renewed at insignificant cost to the consolidated entity. This, combined with continued support for the brands
by product development, advertising and marketing expenditure, has allowed the consolidated entity to determine
that the assets have an indefinite useful life. They are recorded at cost and tested annually for impairment. Impairment losses
are charged to the income statement.
Impairment disclosures
Intangible assets deemed to have indefinite lives are allocated to the Group’s cash generating units identified according to business segment.
A segment level summary of the intangible assets deemed to have indefinite lives is as follows:
Year ended 30 June 2009
Mining Equipment Manufacturing
Year ended 30 June 2008
Mining Equipment Manufacturing
Brand Names
$’000
Goodwill
$’000
497
497
155
155
Total
$’000
652
652
The recoverable amount of intangibles in the mining equipment manufacturing cash-generating units are determined based on value-in-use calculations.
Value-in-use is calculated based on the present value of 5 year discounted cash flow projections based on budgets approved by management. The growth rate
used in these budgets does not exceed the long term average growth rate for the business in which cash-generating units operate.
The following assumptions were used in the value-in-use calculations:
Mining Equipment Manufacturing
2009
Growth
rate
5.00%
2009
discount
rate
12.00%
2008
Growth
rate
5.00%
2008
discount
rate
12.00%
The budgets used by management use historical weighted average growth rates, adjusted for the current economic conditions to project revenue.
Costs are calculated taking into account historical gross margins as well as estimated weighted average inflation rates over the period which are consistent
with inflation rates applicable to the locations in which the segments operate. Discount rates are pre-tax and are adjusted to incorporate risks associated with a
particular segment.
The estimated recoverable amount of intangible assets exceeds the carrying amount of these assets at 30 June 2009. If a discount rate of 19.25% was used
instead of 12%, or if sales growth was limited to the inflation rate instead of 5%, the estimated recoverable amount of the intangible assets would equal the
carrying value.
P A G E 6 7
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
17 derIVATIVeS
Non-Current Assets
Options in listed companies
Options in listed companies
Opening Balance
Additions at cost
Fair Value adjustments
Note
CONSOLIDATED ENTITy
PARENT ENTITy
2009
$000s
288
1,347
-
(1,059)
288
2008
$000s
2009
$000s
2008
$000s
1,347
890
340
117
1,347
-
-
-
-
-
-
-
-
-
-
Options consist of various listed and unlisted options in listed companies. They are initially recorded at cost with adjustments to fair value taken to profit and loss.
If options are unlisted the group uses the Black Scholes model to determine fair value.
The Directors have elected not to record the nominal values that Black Scholes model places on the unlisted options were the exercise price is significantly above
the June share price of the underlying security.
For unlisted options there is no ready market on which they can be traded and the likelihood of sale and realising this value at 30 June is unlikely.
All options can be exercised at anytime up to their expiry date.
The group were issued 4,000,000 options in Cool or Cosy Ltd for providing a trade finance facility. At the time of trade facility was provided these options had
a minimal value and no entries were recorded to reflect the minimal value of these options. Subsequent to receipt of these options 700,000 were sold for a
nominal value.
Details of options held are as follows:
2009
Company
Industrea Ltd
Allied Brands Ltd
Allied Brands Ltd
Allied Brands Ltd
Cool or Cosy Ltd
Cool or Cosy Ltd
2008
Company
Industrea Ltd
Allied Brands Ltd
Allied Brands Ltd
Allied Brands Ltd
Cool or Cosy Ltd
unlisted
unlisted
unlisted
Listed
unlisted
unlisted
unlisted
unlisted
unlisted
Listed
unlisted
Number
2,875,000
200,000
300,000
2,136,007
6,250,000
3,300,000
2,875,000
200,000
300,000
2,136,007
6,250,000
derivative Instruments used by the Group
exercise
Price
option
expiry date
within 1 Year 1 to 2 years
$000s
$000s
2 to 5 years
$000s
Total
$000s
0.15
0.35
0.45
0.60
0.15
0.15
0.15
0.35
0.45
0.60
0.15
28-Sep-09
22-May-10
14-Oct-09
28-Dec-10
16-Aug-10
17-Dec-11
28-Sep-09
22-May-10
14-Oct-09
28-Dec-10
16-Aug-10
288
-
-
-
-
-
288
-
-
-
-
-
-
-
-
-
-
-
-
1,007
-
31
-
-
1,038
-
-
-
-
-
-
-
-
33
-
235
41
309
288
-
-
-
-
-
288
1,007
33
31
235
41
1,347
The Group has elected not to hedge account. As a result the value of foreign currency liabilities is taken up at the spot rate at balance date and the value of all
derivatives is taken up as a hedge asset or liability. Gains and losses resulting to fair value are taken to the income statement.
P A G E 6 8
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
18
TrAde ANd oTHer PAYABLeS
CONSOLIDATED ENTITy
PARENT ENTITy
Note
2009
$000s
2008
$000s
CUrreNT LIABILITIeS
Trade payables
Sundry payables and accruals
Loans from wholly owned subsidiaries
Payables of continuing operations
19
INTereST BeArING LIABILITIeS
CUrreNT LIABILITIeS
Bank overdraft -secured
Hire purchase liabilities - Secured
Interest bearing liabilities of continuing operations
(a)
Bank overdraft and bank loans - secured
19(a)
25
The bank overdraft, bank loans and certain hire purchase liabilities
are secured by certain charges over the consolidated entity’s
freehold properties, assets and undertakings.
Bank overdrafts have been reflected after taking account of legal
right of set-off which was established with the bank and whereby
interest is charged on the net balance.
(b)
Total secured liabilities - see note 21
20 ProVISIoNS
Current
Employee benefits
Non Current
Employee benefits
Total Provisions
508
184
-
692
155
23
178
617
410
-
1,027
2,510
346
2,856
688
29
717
310
338
648
2009
$000s
-
7
27,278
27,285
2008
$000s
9
3
15,920
15,932
-
-
-
-
-
-
-
-
-
-
-
-
P A G E 6 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
21
INTereST BeArING LIABILITIeS
CONSOLIDATED ENTITy
PARENT ENTITy
Note
19(a)
NoN CUrreNT LIABILITIeS
Bank Loans - Secured
Hire purchase liabilities -Secured
Interest bearing liabilities of continuing operations
(a)
Secured liabilities
Total secured liabilities (current and non-current) are:
Bank overdrafts
Bank loans
Hire purchase liabilities
Bank overdrafts and loans are secured as noted in note 19 above.
Lease and Hire Purchase liabilities are effectively secured as the rights to
those assets revert to the lessor or hirer in the event of default.
(b)
Assets pledged as security
The carrying amounts of non-current assets pledged as security are:
13
32
13
First mortgage
Freehold investment properties
Assets classified as held for sale
Registered Mortgage Debentures over Company assets
and cross guarantees & indemnities
Freehold investment properties
Term receivables
Financial Assets
Plant & equipment
Intangible Assets
Derivatives
Total non-current assets pledged as security
The following current assets are also pledged as security under the
registered mortgage and cross guarantees & indemnities
Cash assets
Term receivables
Receivables - current
Inventories
Other current assets
Total current assets pledged as security
Total assets pledged as security
2009
$000s
12,100
-
12,100
155
12,100
23
12,278
18,502
703
16,635
2,331
2,411
2,027
857
288
43,754
191
149
2,112
1,423
355
4,230
2008
$000s
19,493
69
19,562
2,510
19,493
415
22,418
23,744
703
16,722
4,780
-
1,765
-
-
47,714
170
2,000
948
1,051
47
4,216
47,984
51,930
2009
$000s
12,100
-
12,100
-
12,100
-
12,100
2008
$000s
18,000
-
18,000
-
18,000
-
18,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The total financial assets included in the above pledged as security for liabilities is $7,194,000 (2008 $7,898,000)
P A G E 7 0
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
21
INTereST BeArING LIABILITIeS (CONTINuED)
CONSOLIDATED ENTITy
PARENT ENTITy
Note
2009
$000s
2008
$000s
2009
$000s
2008
$000s
(c)
Unused credit facilities
(i) The consolidated entity had access to the following lines
of credit at balance date:
Total facilities available
Bank Overdraft
Bank Loans
Not utilised at balance date
Bank Overdraft
Bank Loans
utilised at balance date
Bank Overdraft
Bank Loans
3,000
23,080
26,080
2,845
10,980
13,825
155
12,100
12,255
3,000
37,700
40,700
490
18,200
18,690
2,510
19,500
22,010
-
22,080
22,080
-
9,980
9,980
-
12,100
12,100
-
30,000
30,000
-
12,000
12,000
-
18,000
18,000
The major facilities are summarised as follows:
Banking overdrafts
Bank overdraft facilities are arranged with the National Australia Bank with the general terms and conditions being set from time to time.
Overdraft balances are subject to set-off arrangements whereby credit balances can be netted off against debit balances with the total facility and
interest being applied to the net balance.
Commercial bill facilities
$23,080,000 variable interest rate facilities provided by the National Australia Bank Ltd
Banking facilities with the NAB are subject to annual review, in line with normal banking practice. There is no reason to believe that facilities will not be
routinely renewed at this point. Interest rates on facilities range from 5.74% to 9.93% inclusive of bank margins.
22
SHAreHoLderS’ eQUITY
CoNTrIBUTed eQUITY
PAId-UP CAPITAL
58,006,650 ordinary shares fully paid
(2008 59,252,613 ordinary shares)
Movements in ordinary share capital
Balance at the beginning of the financial year
Shares repurchased under approved buy back scheme
31,249
32,033
31,249
32,033
32,033
(784)
31,249
33,573
(1,540)
32,033
32,033
(784)
31,249
33,573
(1,540)
32,033
The shares have no par value. Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares
held. Each ordinary share is entitled to one vote at shareholder meetings.
P A G E 7 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
22
SHAreHoLderS’ eQUITY (CONTINuED)
CONSOLIDATED ENTITy
PARENT ENTITy
2009
2008
2009
2008
No.
No.
No.
No.
59,252,613
(1,245,963)
61,186,197
(1,933,584)
59,252,613
(1,245,963)
61,186,197
(1,933,584)
58,006,650
59,252,613
58,006,650
59,252,613
Movements in number of ordinary shares
Balance at the beginning of the financial year
Shares repurchased under approved buy back scheme
Capital risk management
The Group considers its capital to comprise its ordinary share capital, share premium and accumulated retained earnings.
In managing its capital, the Group’s primary objective is to ensure its continued ability to provide a consistent return for its equity shareholders through a
combination of capital growth and distributions and through the payment of annual dividends to its shareholders. In order to achieve this objective, the Group
seeks to maintain a gearing ratio that balances risks and returns at an acceptable level and also to maintain a sufficient funding base to enable the Group to meet
its working capital and strategic investment needs. In making decisions to adjust its capital structure to achieve these aims, either through altering its dividend
policy, new share issues, share buy-backs, or the reduction of debt, the Group considers not only its short-term position but also its long-term operational and
strategic objectives .
It is the Group’s policy to maintain its gearing ratio within the range of 20% - 50% (2008: 20% - 50%). The Group’s gearing ratio at the balance sheet date is
shown below :
CONSOLIDATED ENTITy
PARENT ENTITy
Note
2009
$000s
2008
$000s
2009
$000s
2008
$000s
Gearing ratios
Total borrowings
less Cash and cash equivalents
Net debt
Total equity
Total capital
Gearing Ratio
12,278
(191)
12,087
35,458
47,545
25%
22,418
(1,349)
21,069
38,461
59,530
12,100
-
12,100
35,802
47,902
18,000
-
18,000
38,691
56,691
35%
25%
32%
The decrease in gearing has been bought about by the repayment of borrowings following the sale of an investment property and repayment of loans and
receivables during the year; the Group intends to increase these gearing levels going forward in order to facilitate future investing activities (refer Note 31
Subsequent Events for further details). There have been no other significant changes to the Group’s capital management objectives, policies and processes in the
year nor has there been any change in what the Group considers to be its capital.
P A G E 7 2
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
23 reSerVeS
Available-for-sale financial assets
Share options
Movement in reserves
Share options
Opening balance
Closing balance
Available-for-sale financial assets
Opening balance
Revaluation
Deferred tax impact
Transfer to net (profit) / loss
Deferred tax impact
Closing balance
Note
CONSOLIDATED ENTITy
PARENT ENTITy
2009
$000s
(17)
8
(9)
8
8
(160)
(264)
79
468
(140)
(17)
2008
$000s
(160)
8
(152)
8
8
559
(449)
135
(578)
173
(160)
2009
$000s
2008
$000s
-
8
8
8
8
-
-
-
-
-
-
-
8
8
8
8
-
-
-
-
-
-
24
FINANCIAL rISK mANAGemeNT
The Group’s financial instruments include investments in deposits with banks, receivables, equities, derivatives, payables and interest bearing liabilities.
The accounting classifications of each category of financial instruments as defined in note 1(i) and their carrying amounts are set out below.
weighted
Average
Interest rate
Note
Floating
Interest
rate
$000s
Consolidated 2009
Financial Assets
Receivables
Loans receivable
Convertible notes
Loans and receivables
0.0%
9.3%
11.6%
Cash and cash equivalents
Available-for-sale financial assets
Financial assets at fair value through profit
or loss - held for trading (derivatives)
0.0%
0.0%
0.0%
9
9
9
8
12b
17
Total financial assets
Financial Liabilities
Bank Overdrafts
Bank Loans
Trade & Other Payables
Lease & Hire Purchase Liabilities
Total financial liabilities at amortised cost
10.7%
6.8%
0.0%
7.0%
19
21(a)
18
19 & 21
-
149
-
149
-
-
-
149
155
12,100
-
-
12,255
Fixed Interest rate maturing
1 to
5 Years
$000s
Non-Interest
Bearing
$000s
within
1 Year
$000s
-
-
-
-
-
-
-
-
-
-
-
23
23
-
-
2,331
2,331
-
-
-
2,331
-
-
-
-
-
2,112
-
-
2,112
191
2,411
288
5,002
-
-
692
-
692
Total
$000s
2,112
149
2,331
4,592
191
2,411
288
7,482
155
12,100
692
23
12,970
P A G E 7 3
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
24
FINANCIAL rISK mANAGemeNT (CONTINuED)
weighted
Average
Interest rate
Note
Floating
Interest
rate
$000s
Consolidated 2008
Financial Assets
Receivables
Loans receivable
Convertible notes
Loans and receivables
0.0%
9.6%
13.6%
Cash
Available-for-sale financial assets
Financial assets at fair value through profit
or loss - held for trading (derivatives)
7.4%
0.0%
0.0%
9
9
9
8
12b
17
Total financial assets
Financial Liabilities
Bank Overdrafts
Bank Loans
Trade & Other Payables
Lease & Hire Purchase Liabilities
Total financial liabilities at amortised cost
Parent entity 2009
Financial Assets
Loans receivable
Investments in subsidiaries
Total financial assets
Financial Liabilities
Bank Loans
Other Loans
Trade & Other Payables
Total financial liabilities at amortised cost
Parent entity 2008
Financial Assets
Loans receivable
Investments in subsidiaries
Total financial assets
Financial Liabilities
Bank Loans
Other Loans
Trade & Other Payables
Total financial liabilities at amortised cost
P A G E 7 4
10.6%
8.6%
0.0%
7.0%
19
21(a)
18
19 & 21
0.0%
0.0%
6.8%
0.0%
0.0%
9
12a
21(a)
18
18
10.1%
0.0%
9
12a
8.6%
0.0%
0.0%
21(a)
18
18
-
7,219
-
7,219
1,345
-
-
8,564
2,510
19,493
-
-
22,003
-
-
-
12,100
-
-
12,100
439
-
439
18,000
-
-
18,000
Fixed Interest rate maturing
1 to
5 Years
$000s
Non-Interest
Bearing
$000s
within
1 Year
$000s
-
-
-
-
-
-
-
-
-
-
-
346
346
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,997
1,997
-
-
-
1,997
-
-
-
69
69
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,263
-
-
1,263
4
3,276
1,347
5,890
-
-
1,027
-
1,027
34,322
41,373
75,695
-
27,278
7
27,285
31,443
41,373
72,816
-
15,920
12
15,932
Total
$000s
1,263
7,219
1,997
10,479
1,349
3,276
1,347
16,451
2,510
19,493
1,027
415
23,445
34,322
41,373
75,695
12,100
27,278
7
39,385
31,882
41,373
73,255
18,000
15,920
12
33,932
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
24
FINANCIAL rISK mANAGemeNT (CONTINuED)
Fair Value
The carrying values of financial assets and liabilities listed above approximate their fair value except for Convertible notes which have a fair value of $2,375,000
(2008 $2,047,000) at balance date.
Estimated discounted cash flows were used to measure fair value, except for fair values of financial assets that were traded in active markets that are based on
quoted market prices.
The Group’s and parent’s investments and obligations expose it to market, liquidity and credit risks. The nature of the risks and the policies the Group and parent
has for controlling them and any concentrations of exposure are discussed as follows:
Financial risk management
The Board of Directors has overall responsibility for the establishment and oversight of the financial risk management framework. PPK Group’s activities expose
it to a range of financial risks including market risk, credit risk and liquidity risk. The Group’s risk management policies and objectives are therefore designed to
minimise the potential impacts of these risks
on the results of the Group where such impacts may be material. The Board receives monthly reports, which it reviews and regularly discuss the effectiveness of
the processes put in place and the appropriateness of the objectives and policies to support the delivery of the Group’s financial targets while protecting future
financial security.
The Board also has in place informal policies over the use of derivatives and does not permit their use for speculative purposes.
(a) market risk
Market risk is the risk that the fair value of future cash flows of the Group’s and parent entity’s financial instruments will fluctuate because of changes in
market prices.
Market risk comprises three types of risk: interest rate risk, equity price risk and currency risk.
(i) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a security, will fluctuate due to changes in interest rates. Exposure to interest rate risk
arises due to holding floating rate interest bearing liabilities, investments in cash and cash equivalents and loans to related parties and other persons.
Although a change in the current market interest rate may impact the fair value of the Group’s and parent’s fixed interest financial liabilities and other
receivables, it does not impact the Group and parent’s profit after tax or equity as these financial liabilities are carried at amortised cost and not at fair
value through profit or loss.
Floating interest rates attached to the Group’s and parent’s financial assets and liabilities give rise to cash flow interest rate risk. Any changes in the current
market rate will affect the cash flows payable on floating rate interest bearing liabilities and hence impact the Group’s and parent’s profit after tax.
P A G E 7 5
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
24
FINANCIAL rISK mANAGemeNT (CONTINuED)
Sensitivity disclosure analysis
The Group’s and parent’s exposure to its floating interest rate financial assets and liabilities is as follows:
Financial Assets
Cash
Receivables
Financial Liabilities
Bank overdraft
Bank Loans
Net Exposure
The group has performed sensitivity analysis relating to its interest rate
risk based on the Group’s year end exposure. This sensitivity demonstrates
the effect on after tax results and equity which could result from a
movement in interest rates of +/- 1%.
Change in after tax profit
- increase in interest rate by 1%
- decrease in interest rate by 1%
(ii)
Equity Price risk
CONSOLIDATED ENTITy
PARENT ENTITy
2009
$000s
2008
$000s
2009
$000s
-
149
149
155
12,100
12,255
1,345
7,219
8,564
2,510
19,493
22,003
-
-
-
-
12,100
12,100
2008
$000s
-
439
439
-
18,000
18,000
(12,106)
(13,439)
(12,100)
(17,561)
(85)
85
(94)
94
(85)
85
(123)
123
Equity securities price risk is the risk that changes in market prices will affect the fair value of future cash flows of the Group’s and parent entity’s financial
instruments.
The group is exposed to equity price risk through the movement in share prices of the companies in which it is invested. These are determined by market
forces and are outside control of the group. The risk of loss is limited to the capital invested in relation to shares and options held.
The market value of listed companies fluctuate and the fair value of the available-for-sale financial assets and derivatives of the group changes
continuously.
Changes in fair value of available-for-sale financial assets are recognised through the asset revaluation reserve unless the there is objective evidence that
available-for-sale financial assets have been impaired. Impairment losses are recognised in the income statement.
unlisted investments do not have a quoted price in an active market and their fair value cannot be reliably measured, so they remain valued at cost after
their initial recognition.
However when there is objective evidence of impairment of these unlisted investments, such impairment losses are recognised in the income statement.
The value of unlisted investments at balance date was nil as the group considers that there is little or no likelihood of any return from these investments.
The group also has investments by way of derivates in listed companies, these are held as options. Any gains or losses in the fair values of these
derivatives are taken directly to profit or loss for the year.
P A G E 7 6
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
24
FINANCIAL rISK mANAGemeNT (CONTINuED)
The group’s portfolio of investments in listed companies is concentrated in 4 companies. The individual performances of these companies exposes the
group to a greater concentration of risk than just that of general market forces if a more wide-spread portfolio were held. However, because of this
concentration of holdings the Directors are able to regularly monitor the performance of the companies within its portfolio and had board representation
in , Cool or Cosy Ltd and Frigrite Ltd, throughout the year.
Sensitivity disclosure analysis
The Group’s and parent’s exposure to equity price fluctuations on the fair value of its available-for-sale financial assets and derivatives is as follows:
Financial Assets
Available-for-sale financial assets
Investments in listed companies
Derivatives
Options in listed companies
The Group has performed sensitivity analysis relating to its exposure to equity
price risk based on its year end asset holdings. This sensitivity demonstrates
the effect on after tax results and equity which could result from a
movement in equity prices at year end of +/- 10%.
Change in after tax profit
- increase in equity price by 10%
- decrease in equity price by 10%
Change in equity
- increase in equity price by 10%
- decrease in equity price by 10%
(iii) Currency Risk
CONSOLIDATED ENTITy
PARENT ENTITy
2009
$000s
2008
$000s
2009
$000s
2008
$000s
2,411
288
2,699
3,276
1,347
4,623
73
(73)
219
(219)
134
(133)
228
(228)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Currency risk is the risk that the fair value or future cash flows of a financial item will fluctuate as a result of movements in international exchange rates.
The Group is exposed to exchange rate
transaction risk on foreign currency sales and purchases primarily with respect to the united States dollar (uSD).
Of the total sales revenue for the Group some 40% (2008 54%) is in export sales, all sales from 1 January 2009 are designated in AuD thus limiting
the currency risk exposure. The trade receivables that were invoiced in uSD up to 31 December 2008 represented 23% (2008 10%) of the groups total
sales. The group does not take forward cover or hedge and was therefore at risk in relation to foreign currency movements during the year. The group has
maintained a uSD bank account for receiving payments from trade receivables and making payment to trade payables.
The account is held with a major Australian Bank, which limits the group’s exposure to credit risk associated with this deposit.
P A G E 7 7
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
24
FINANCIAL rISK mANAGemeNT (CONTINuED)
Sensitivity disclosure analysis
The Group’s and parent’s exposure to currency fluctuations on its uSD assets and liabilities at year end is as follows:
CONSOLIDATED ENTITy
PARENT ENTITy
2009
$000s
2008
$000s
2009
$000s
2008
$000s
Financial Assets
Cash and cash equivalents
Trade receivables
Financial Liabilities
Other payables
Net exposure
188
-
188
-
188
170
197
367
154
213
-
-
-
-
-
The group has performed sensitivity analysis relating to its foreign currency exposure on year end amounts that are not hedged. This sensitivity
demonstrates the effect on after tax results and equity which could result from a movement in AuS against the uSD at year end of +/- 10%.
Change in after tax profit
- AuD strengthens against uSD by 10%
- AuD weakens against uSD by 10%
(b)
Credit risk
(12)
15
(14)
17
-
-
-
-
-
-
-
-
-
The group and parent’s maximum exposure to credit risk is generally the carrying amount net of any provisions for doubtful debts. The group’s exposure
is minimised by the fact that the majority of the trade receivables balance is with a diverse range of Australian and Multi-national customers. The group
has in place informal policies for establishing credit approval and limits so as to manage this risk.
The group also has a credit risk exposure in relation to cash at bank. The group’s policy is ensure funds are placed only with major Australian banks which
are currently covered by the Australian Government guarantee in relation to deposit of up to $1m, thus minimising the group’s exposure to this credit risk.
The group’s credit risk relating to tenants is primarily the risk that they will fail to honour their lease agreements. The lease agreements with the purchaser
of the plastics packaging business are secured by a guarantee from the head entity, Visy Industrial Plastics Pty Ltd, and the lease in relation to the Seven
Hills property is supported by a personal guarantee by the lessee company’s director.
Loans receivable from the purchaser of the customs packaging business were secured by a fixed and floating charges and guarantees and were repaid in
full during the year.
Loans receivable from directors were repaid in full during the year.
Convertible notes in listed companies have a first or second ranking fixed and floating charge over all the assets of the issuing companies and their
subsidiaries.
Refer to note 9 for detail the Groups and parent entities trade and other receivables.
The group’s exposure to credit risk at balance date by country of loans and receivables is as follows:
P A G E 7 8
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
24
FINANCIAL rISK mANAGemeNT (CONTINuED)
Loans and receivables by country
Australia
united States of America
united Kingdom
Germany
New Zealand
The groups exposure to credit risk at balance date by industry of loans
and receivables is as follows:
Loans and receivables by industry
Customs Plastics
Plastic Packaging
Mining Equipment
Insulation and air-conditioning
Retail franchising
Manufacturing
Property and investing
(c)
Liquidity risk
CONSOLIDATED ENTITy
PARENT ENTITy
2009
$000s
2008
$000s
4,453
101
35
-
3
4,592
-
637
922
1,366
1,172
245
250
4,592
10,015
226
136
100
2
10,479
6,780
315
948
1,186
811
-
439
10,479
2009
$000s
34,322
-
-
-
-
34,322
-
-
-
-
-
-
34,322
34,322
2008
$000s
31,443
-
-
-
-
31,443
-
-
-
-
-
-
31,443
31,443
Liquidity risk is the risk that the Group and parent will encounter difficulty in meeting obligations associated with financial liabilities.
The Group’s objective to mitigate liquidity risk is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts,
bank loans and hire purchase contracts.
The Group and parents exposure to liquidity risk is not significant based on available funding facilities and cash flow forecasts.
Details of the groups financing facilities are set-out in note 21.
Financial Liabilities maturity analysis
The tables below reflect the undiscounted contractual settlement terms for the groups financial liabilities of a fixed period of maturity, as well as the
earliest possible settlement period for all other financial liabilities. As such the amounts may not reconcile to the balance sheet. Bank loans provided by
the NAB are subject to an annual review with the next review date being 30 November 2009, with the facilities requiring renewal on 30 November 2010
and 30 November 2011.
Bank overdraft facility is also provided by the NAB with the current facility expiring on 30 November 2009.
These renewal dates have been used for disclosure of maturity dates of bank overdraft and loans, even though they are subject to an annual review as
there is no reason to believe that the facilities will be altered by the bank at the time of annual review.
P A G E 7 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
24
FINANCIAL rISK mANAGemeNT (CONTINuED)
Carrying
amount
< 6
months
6 - 12
months
1 - 3
years
> 3
years
Contractual
Cash flows
Consolidated 2009
Financial Liabilities (current & non-current)
Trade & Other Payables
Bank Loans & overdrafts
Hire Purchase Liabilities
Total Financial Liabilities
Consolidated 2008
Financial Liabilities (current & non-current)
Trade & Other Payables
Bank Loans & overdrafts
Hire Purchase Liabilities
Total Financial Liabilities
Parent entity 2009
Financial Liabilities (current & non-current)
Trade & Other Payables
Loans from wholly owned subsidiaries
Bank Loans & overdrafts
Total Financial Liabilities
Parent entity 2008
Financial Liabilities (current & non-current)
Trade & Other Payables
Loans from wholly owned subsidiaries
Bank Loans & overdrafts
Total Financial Liabilities
692
12,255
23
12,970
1,027
22,003
415
23,445
7
27,278
12,100
39,385
12
15,920
18,000
33,932
692
487
23
1,202
1,027
20,168
366
21,561
7
27,278
325
27,610
12
15,920
18,385
34,317
-
325
-
325
-
2,395
72
2,467
-
-
325
325
-
-
-
-
-
12,371
-
12,371
-
-
-
-
-
-
12,371
12,371
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
692
13,183
23
13,898
1,027
22,563
438
24,028
7
27,278
13,021
40,306
12
15,920
18,385
34,317
P A G E 8 0
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
25 HIre PUrCHASe ANd LeASe CommITmeNTS
CONSOLIDATED ENTITy
PARENT ENTITy
Note
2009
$000s
2008
$000s
2009
$000s
2008
$000s
(a)
Hire Purchase commitments
payable:
- not later than 1 year
- later than 1 year but not later than 5 years
Minimum hire purchase payments
Less: Future finance charges not
provided in the financial statements
Total hire purchase liability
Provided in the financial statements as:
Current liabilities
Non-current liabilities
(b)
operating lease commitments
Operating lease rentals contracted for but
not capitalised in the financial statements
payable:
- not later than 1 year
- later than 1 year but not later than 5 years
- later than 5 years
23
-
23
-
23
23
-
23
51
-
-
51
366
72
438
(23)
415
346
69
415
98
50
-
148
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The Group leases premises in Nowra under non cancellable operating lease. The terminating date of the lease is 31 January 2010, however the Group has
an option to renew this lease for a further period of 5 years.
There are no contingent rentals as part of finance lease arrangements and no restrictions on the ability of PPK Group Ltd and its subsidiaries from
borrowing further funds or paying dividends.
26
SUPerANNUATIoN CommITmeNTS
Contributions are made to by the consolidated entity to employee defined contribution superannuation funds.
All funds were accumulation plans whereby the Company contributed various percentages of employee gross incomes, the majority of which were as
determined by the superannuation guarantee legislation. Benefits provided under the plan are based on accumulated contributions and earnings for each
employee. There is no legally enforceable obligation on entities in the consolidated entity to contribute to the superannuation plans other than requirements
under the superannuation guarantee legislation.
P A G E 8 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
27
CoNTINGeNT LIABILITIeS
(a)
Group
Cross guarantees of the Groups banking and finance facilities totalling
$26,080,000 of which $12,255,000 was drawn at balance date.
(b)
subsidiaries
Bank guarantees
28
SeGmeNT INFormATIoN
CONSOLIDATED ENTITy
PARENT ENTITy
2009
$000s
2008
$000s
2009
$000s
2008
$000s
-
200
-
-
(a)
Year ended 30 June 2009
Continuing operations
Business Segments
Primary Segment
Sales revenue
Rental income
Other income
Total revenue
Segment result
unallocated corporate income and expenses
unallocated interest income and expense
Consolidated operating profit before income tax
Income tax benefit / (expense)
Net profit after tax attributable to members
Assets
Segment Assets
unallocated Assets
Liabilities
Segment Liabilities ( note e )
unallocated Liabilities
other segment information
Depreciation
Amortisation of other intangibles
Impairment of available-for-sale financial assets
Fair value adjustment on derivatives
Acquisition of non-current Segment assets
P A G E 8 2
Investment
Properties
$000s
Investing
$000s
Mining
Equipment
Manufacturing
$000s
Total of
Continuing
Operations
$000s
-
4,776
13
4,789
4,006
-
-
434
434
(2,330)
4,867
-
1
4,868
1,062
35,840
5,030
5,226
23
478
-
-
-
58
-
474
-
-
1,696
1,059
1,197
349
107
-
-
414
4,867
4,776
448
10,091
2,738
(1,306)
(971)
461
79
540
46,096
4,088
50,184
497
14,238
14,735
827
107
1,696
1,059
1,669
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
28
SeGmeNT INFormATIoN (CONTINuED)
(b)
Year ended 30 June 2008
Continuing operations
Business Segments
Primary Segment
Sales revenue
Rental income
Other income
Total revenue
Segment result
Investment
Properties
$000s
Investing
$000s
Mining
Equipment
Manufacturing
$000s
Total of
Continuing
Operations
$000s
-
4,396
55
4,451
3,528
-
-
1,650
1,650
(720)
4,251
-
48
4,299
650
unallocated corporate expenses
unallocated interest
Consolidated operating profit before income tax
Income tax (expense) / benefit
Net profit after tax attributable to members
Assets
Segment Assets
unallocated Assets
Liabilities
Segment Liabilities
unallocated Liabilities
other segment information
Depreciation
Amortisation of other intangibles
Impairment of available for-sale financial assets
Acquisition of non-current Segment assets
41,169
6,620
4,747
285
478
-
-
402
-
667
-
-
2,370
4,709
315
95
-
328
4,251
4,396
1,753
10,400
3,458
(1,975)
(781)
702
(95)
607
52,536
11,608
64,144
952
24,883
25,835
793
95
2,370
5,439
P A G E 8 3
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 209
28
SeGmeNT INFormATIoN (CONTINuED)
(c)
Geographic location of Customers
Although the group operates in Australia the mining equipment manufacturing segment has sales revenue from customers located overseas.
Additional disclosure of sales revenue by geographical location of external customers that represent 10% or more of total entity sales revenue is as
follows:
Australia
China
Germany
united States of America
united Kingdom
Other countries
2009
$000s
2,899
842
507
418
113
88
4,867
2008
$000s
1,954
-
1,038
444
645
170
4,251
The geographical location of receivables, relating to these sales, is disclosed in Note 24 of these accounts.
(d)
The consolidated entity had the following business segments
- The Investment Property segment owns the properties from which the Group previously carried out its manufacturing operations.
- The Investment segment owns primarily listed and some unlisted investments and also has made loans from which it earns income and capital growth.
- The Mining equipment segment manufactures portable underground mining equipment.
(e)
Segment information is prepared in conformity with the accounting policies described in note 1.
Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment and the relevant portion that can be allocated to
the segment on a reasonable basis. Segment assets include all assets used by a segment and consist primarily of operating cash, receivables, inventories,
property, plant and equipment and goodwill and other intangible assets. While most of these assets can be directly attributed to individual segments,
the carrying amounts of certain assets used jointly by segments are shown as unallocated assets. Segment liabilities consist primarily of trade and other
creditors, employee benefits and provisions for service warranties. Segment assets and liabilities do not include income taxes.
P A G E 8 4
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
29 reLATed PArTIeS
CONSOLIDATED ENTITy
PARENT ENTITy
2009
$000s
2008
$000s
2009
$000s
2008
$000s
Transactions between related parties are on normal commercial terms
and conditions no more favourable than those available to other parties
unless otherwise stated.
Transactions are inclusive of GST.
Transactions with related parties:
(a)
Subsidiaries :
(i) Provision of interest free unsecured loans
- current receivables
(wholly-owned subsidiaries)
- current payables
(wholly-owned subsidiaries)
(ii) Trust Distribution from controlled trust
(b)
Share transactions of directors:
Directors and director-related entities have acquired or disposed of
ordinary shares in the Parent entity during
the financial year as follows :
PPK Group Limited - acquired
PPK Group Limited - disposed
Net movement
Directors and director-related entities hold directly, indirectly
or beneficially as at the reporting date the following equity
interests in members of the consolidated entity:
PPK Group Limited - ordinary shares
-
-
-
-
-
-
34,322
27,278
31,443
15,920
2,052
349
No.
000s
1,593
(700)
893
No.
000s
205
-
205
No.
000s
1,593
(700)
893
No.
000s
205
-
205
11,132
10,239
11,132
10,239
P A G E 8 5
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
30
CASH FLow INFormATIoN
CONSOLIDATED ENTITy
PARENT ENTITy
Note
2009
$000s
2008
$000s
2009
$000s
2008
$000s
(a)
reconciliation of profit after income tax to the cash
provided by operating activities
Profit after income tax
540
607
654
(1,390)
Cash flows in operating result attributable to
non-operating activities:
Interest paid
Cash flows in operating activities but not
attributable to operating result:
Payments from employee provisions
Non-cash flows in operating profit:
Amortisation
Depreciation
Deferred expenses
Interest received on convertible notes
Recognition of income from rent free periods deferred
on acquisition
Impairment of available-for-sale-assets
Transfers to provisions
Trust distributions
(Profits) on sale of available for sale assets
Fair value adjustments on derivatives
Loss/(Profits) on sale of property, plant & equipment
(decrease)/increase in tax payable
(increase)/decrease in deferred tax assets
(decrease)/increase in deferred tax liabilities
Changes in assets and liabilities:
(increase)/decrease in trade and other debtors
decrease/(increase) in prepayments
(increase)/decrease in inventories
net movement in interCompany loan accounts
(decrease)/increase in trade creditors and accruals
Net cash provided in / (used by) operating activities
30
CASH FLow INFormATIoN (CONTINuED)
P A G E 8 6
1,159
1,509
(145)
(338)
113
888
-
(31)
(55)
1,696
226
-
(132)
1,059
(13)
(136)
(130)
(619)
(793)
7
(320)
-
(348)
2,966
101
858
-
(70)
(402)
2,370
340
-
(1,309)
(116)
19
(2,388)
(794)
67
(320)
-
(310)
-
(124)
(300)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(654)
-
-
1,229
-
-
-
-
-
-
487
-
(349)
-
19
(2,388)
(43)
167
56
(91)
-
-
(200)
(2,503)
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
CONSOLIDATED ENTITy
PARENT ENTITy
Note
2009
$000s
2008
$000s
2009
$000s
2008
$000s
(b)
reconciliation of Cash
For the purposes of the cash flow statement, cash includes:
Cash on hand
Call deposits with financial institutions
Bank overdrafts - secured
(c)
Non-cash Financing and Investing Activities
During the financial year, the consolidated entity
had the following non cash adjustments, expense/(income);
Fair value adjustment on derivatives
Impairment of available-for-sale financial assets
These related to shares and options held in listed Company investments.
3
188
(155)
36
4
1,345
(2,510)
(1,161)
1,059
1,696
2,755
(116)
2,370
2,254
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31
eVeNTS SUBSeQUeNT To rePorTING dATe
directors
David Hoff retired as Managing Director, and as a Director of PPK Group Limited and its subsidiaries on 7 September 2009. Glenn Molloy was appointed to the
role of Executive Director on the same date.
Investment Properties
The tenant of two (2) industrial properties owned by PPK as not exercised options to lease these properties. The initial lease of these properties expired on 31
August 2009. Each property is being marketed for re-lease and the Board expects these properties will be realeased in the 2010 financial year.
PPK is also involved in litigation with the tenant of its Arndell Park property regarding the validity of the registered lease on this property. The matter is presently
before the Court.
Investing Activities
PPK has been a party to an underwriting Agreement in respect of the issue of new shares in and by Frigrite Limited (ASX:FRR) pursuant to a rights issue. The new
share offer closed on 19th August 2009. In accordance with the underwriting arrangements and PPK’s rights issue entitlement, the Company has subscribed for
13,862,864 shares in FRR at a cost of $1,663,000. In addition, PPK has applied for and been issued 2,000,000 convertible notes at a face value of $1.00 per note
and subject to the payment of interest at the rate of 12.5% per annum. Each note converts to 5 ordinary shares and has 5 attaching options exercisable at 20
cents per share at any time during the next 3 years.
On 26 August 2009 the new shares in FRR were issued to PPK which has increased its holding to approximately 32% of the existing issued share capital of FRR.
FRR will be considered an associate of the consolidated entity from this time and, consequently, PPK will be required to recognise its share of the post acquisition
profits or losses of FRR in the profit and loss account of PPK.
No other matter or circumstance has arisen since the end of the financial year which is not otherwise dealt with in this report or in the Consolidated Financial
Statements that has significantly affected or may significantly affect the operations of the consolidated entity, the results of those operations or the state of
affairs of the consolidated entity in subsequent financial years.
P A G E 8 7
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2009
CONSOLIDATED ENTITy
PARENT ENTITy
Note
2009
$000s
2008
$000s
703
703
2009
$000s
-
2008
$000s
-
32 HeLd For SALe ASSeTS
Property
Land located at Arndel Park is actively being marketed for sale.
33
SHAre BASed PAYmeNTS
director and employee Share option Arrangements
(i) PPK eligible executive employees may be granted options under the PPK Executive Incentive Scheme. Options granted under the scheme are
for a maximum of 5 years.
Options under the scheme may only be exercised after 2 years from the date of issue and expire 30 days after the employee ceases to be an
employee.
(ii) Options that were granted to directors required shareholder approval and vested immediately. These options expired on 12 August 2007.
(iii) Options hold no voting or dividend rights and are not transferable without Board of Directors approval.
The closing price of an ordinary share of PPK Group Limited on the Australian Stock Exchange at 30 June 2009 was $0.28 ( 30 June 2008 $0.70 ).
CoNSoLIdATed weighted Ave
exercise Price
2009
$
eNTITY
2009
No.
CoNSoLIdATed weighted Ave
exercise Price
2008
$
eNTITY
2008
No.
PAreNT
eNTITY
2009
No.
PAreNT
eNTITY
2008
No.
(a) movement in the number of
share options held by directors
are as follows :
Opening Balance
Lapsed during the year
Closing Balance
-
-
-
-
-
-
900,000
(900,000)
-
$1.65
$1.65
$1.65
-
-
-
900,000
(900,000)
-
weighted average exercise prices are the same for the parent entity as for the consolidated entity
P A G E 8 8
P P K G R O U P L I M I T E D AN Nu
A L R E P O R T 2 0 0 9
dIreCT or’S deCLAr ATIoN
FOR THE YEAR ENDED 30 JUNE 2009
The Directors of PPK Group Limited declare that in the opinion of the directors:
(a)
the financial statements and notes set out on pages 36 to 88 are in accordance with the Corporations Act 2001 (Cth) including:
(i)
complying with Accounting Standards in Australia and the Corporations Regulations 2001; and
giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2009 and of its performance as represented
(ii)
by the results of their operations, changes in equity and their cash flows, for the financial year ended on that date; and
(b)
there are reasonable grounds to believe the company will be able to pay its debt when they become due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of the board of directors.
Colin ryan
Chairman
Sydney, 29 September 2009
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INdePeNdeNT AUdIT rePor T
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Independent Audit report (continued)
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AUdIT or’S INdePeNdeNCe deCLAr ATIoN
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AddITIoNAL INForm ATIoN For LISTed PUBLIC ComPANIeS
1.
Shareholding
(a) distribution of shareholders at 21st August 2009
Category (size of holding)
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Number of
Shareholders
2009
000’s
Number of
Shareholders
2008
000’s
138
456
368
492
49
1,503
139
473
404
517
52
1,585
(b)
The number of shareholdings held in less than marketable parcels is 179
(c)
The names of the substantial shareholders listed in the holding Company’s register at the 21st August 2009
Corso Investments Pty Ltd
ANZ Nominees Ltd
Equipment Co of Australia Pty Ltd
Applied Colour Pty Limited
John E Gill Operations Pty Ltd
Number
of shares
2009
000’s
10,289
8,664
6,618
2,200
1,569
Number
of shares
2008
000’s
8,752
8,664
6,618
2,200
1,569
(d)
Voting rights
The consolidated entity has one class of ordinary shares with equal voting rights attached to them.
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Additional Information for Listed Public Companies (continued)
(e)
Twenty largest shareholders
Number of
ordinary fully paid
shares held
000’s
Percentage held
of listed
ordinary capital
%
Corso Investments Pty Ltd
ANZ Nominees Ltd
Equipment Co of Australia Pty Ltd
Applied Colour Pty Limited
John E Gill Operations Pty Ltd
Metal Industries Pty Ltd
Citicorp Nominees Pty Limited
Mr Colin Francis Ryan & Mrs Jose Maureen Ryan
Flagstaff Superannuation Pty Ltd
Contemplator Pty Ltd
1
2
3
4
5
6
7
8
9
10
11 Mr Robert Joseph Faulks & Mrs Patricia Baynton Faulks
12 Mr Ian Macdonald
13 Ms Alison Irving
14
Poets Pty Ltd
15 Mr Charles Peter Taylor
16
17 Mrs Patricia Baynton Faulks
18
Ruminator Pty Ltd
19 WRG Investments Pty Ltd
20
Chandos Nursing Home Pty Ltd
Di Iulio Homes Pty Ltd
10,289
8,664
6,618
2,200
1,569
1,059
660
500
470
452
440
425
342
301
300
300
255
243
221
200
35,508
17.74
14.94
11.41
3.79
2.71
1.83
1.14
0.86
0.81
0.78
0.76
0.73
0.59
0.52
0.52
0.52
0.44
0.42
0.38
0.35
61.22
2.
The name of the Company secretary is
Mr Robert Nicholls.
3.
The address of the principal registered office in Australia is
25-27 Waratah Street, Kirrawee, NSW 2232
Telephone (02) 9521 8444
Fax (02) 9521 4561
Email info@ppkgroup.com.au
4.
registers of securities are held at the following addresses:
New South Wales
Registries Limited
Level 2
28 Margaret Street, Sydney NSW 2000
P.O. Box P67, Royal Exchange, Sydney NSW 1223
5.
Stock exchange Listing
Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the Australian Stock Exchange Ltd.
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P A G E 9 5
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CororATe dIreCT orY
as at 29 September 2009
P A G E 9 6
CororATe dIreCT orY
as at 29 September 2009
dIreCTorS
HeAd oFFICe & reGISTered oFFICe
PPK GroUP ProPerTIeS
Colin ryan
B.Com.,Dip.Ed.,CA
DIRECTOR AND CHAIRMAN (non-executive)
Glenn molloy
DIRECTOR (executive)
raymond Beath
B.Com.,F.C.A
DIRECTOR (non-executive)
Jury wowk
B.A., LL.B
DIRECTOR (non-executive)
ComPANY SeCreTArY
robert Nicholls
MBA (Distinction), LL.B (Hons)
Grad Dip Leg Prac., Grad Dip CSP, FCIS, GAICD
PPK Group Limited
25-27 Waratah Street
Kirrawee NSW 2232
Telephone 02 9521 8444
Facsimile 02 9521 4561
www.ppkgroup.com.au
SHAre reGISTrY
registries Limited
Level 7, 201 Kent Street
Sydney NSW 2000
Telephone 02 9290 9600
Facsimile 02 9279 0664
www.registries.com.au
AUdITorS
Bdo Kendalls
Allianz Centre
2 Market Street
Sydney NSW 2000
Telephone 02 9286 5555
Facsimile 02 9286 5599
New South wales
8 Contaplas Street
Arndell Park NSW 2148
14 Contaplas Street
Arndell Park NSW 2148
13A Station Road
Seven Hills NSW 2147
25-27 Waratah Street
Kirrawee NSW 2232
Victoria
36-42 Hydrive Close
Remington Industrial Estate
Dandenong South VIC 3175
Queensland
72 Pritchard Road
Virginia QLD 4014
PPK GroUP BUSINeSSeS
New South wales
Rambor Pty Limited
108 Albatross Road
South Nowra NSW 2541
Telephone 02 4422 6323
Facsimile 02 4422 5423
www.rambor.com.au
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