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A n n u A l r e p o r t 2 0 1 1
FINANCIAL HIGHLIGHTS
Sales revenue from Continuing Operations ($’000)
Rental income from Investment Properties ($’000)
(Loss) Profit Before Income Tax ($’000)
(Loss) Profit After Tax ($’000)
Basic Earnings Per Share (cents)
6,102
2,146
(1,691)
(2,515)
(4.5)
s
29%
t 31%
t
236%
t
430%
t
446%
Notice of Annual General Meeting
The 2011 Annual General Meeting of PPK Group Limited will be held at:
3:00pm on Tuesday, 22 November 2011 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
Contents
Chairman & Executive Director’s Overview
Five Year Financial Summary
Directors’ Report
Statement of Corporate Governance Practices – 2011
1
4
5
20
34
Financial Statements
Corporate Directory
Inside back cover
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
CHAIRMAN AND EXCECUTIVE DIRECTOR’S OVERVIEW
Overview of Performance
In the 2011 year PPK Group Limited (PPK) incurred:
•
•
a pre-tax loss of $1,691,000; and
after tax loss of $2,515,000.
In the reporting period, PPK’s profit before impairments was
$4,281,000.
This profit figure included a:
•
•
net gain of $1,514,000 on the disposal of the industrial
property at Kirrawee; and
recovery of $1,585,000 from settlement of the Arndell Park
property rental dispute litigation.
This profit was impacted by write downs and impairments of
$5,948,000 predominately relating to investments in:
•
•
•
Frigrite Limited (FRR);
Intelligent Solar Limited (ISL);
Allied Brands Limited (ABQ).
Notwithstanding that PPK incurred a pre-tax loss of $1,691,000
an income tax expense of $824,000 has had to be reported. The
recorded impairments are capital losses for tax purposes and can
only be applied against capital profits. The directors have only
recognised a deferred tax asset to the extent that they have, at this
point in time, reasonable certainty of realising capital profits. This
gives rise to the income tax expense of $824,000.
Property
PPK continues to maintain a portfolio of industrial properties in
desirable geographic locations in New South Wales and Victoria.
The existing tenant of the property at Dandenong, Victoria has
signed a four year extension to the lease which will now continue
to August 2015.
The Seven Hills property remains leased pursuant to a lease
expiring on 31 October 2012.
The property at Arndell Park continues to be marketed for lease
or sale.
Investments
PPK:
•
•
•
•
•
has now written down to nil as at 30 June 2011 the value
of its shareholdings in each of FRR, ISL and ABQ as a
consequence of these entities being placed into voluntary
administration;
expects to recover some value in relation to these
investments, however, PPK is unable to quantify the amount
until proposed Deeds of Company Arrangement relating to
each of FRR, ISL and ABQ are concluded and the companies
are relisted;
continues to hold $2 million in convertible notes issued by
FRR which are fully secured by a freehold property located
at Dandenong in Victoria. This property has been sold and is
scheduled to complete in October 2011, at which time PPK
expects to recover the full face value of its convertible note
investment;
has no other major investments in any listed companies; and
has invested in, and participates as the lead manager
of, a syndicate which purchased 4.013 hectares of prime
residential land located at Willoughby in New South Wales
(Kiah Project). This land is being developed over three
(3) years with the construction and sale of seventy six (76)
prestige residential dwellings. A Development Application
has been approved by Council for the construction of the
first fourteen (14) homes in the Kiah Project; construction
has begun and all fourteen (14) homes have been sold and
contracts exchanged. PPK will be entitled to an 18.2% share
of profits from the Kiah Project in its capacity as an investor
and interest income as a secured lender to the Project.
PPK will continue to explore suitable
investment and growth opportunities which
have the potential to add value for its
shareholders.
Jury Wowk CHAIRMAN
Glenn Molloy EXECUTIVE DIRECTOR
P A G E 1
Chairman and Executive Director’s Overview (continued)
Mining Equipment Manufacture – Rambor
Pty Ltd
Sales and profitability of Rambor for the year were at record levels.
Rambor delivered a pre-tax profit of $1,486,000 compared to
$208,000 in the previous corresponding period.
Rambor has signed a further agreement with Hilti Corporation for
the manufacture and sale of additional Rambor products.
In addition, Rambor has also generally expanded its range of
products and has a strong order book for the first quarter of the
2012 year.
Dividends
Based on an assessment of the Company’s core earnings,
realised profits and confidence in an improved earnings
outlook in respect of the 2012 financial year, the directors
have resolved that the Company will pay a final dividend of 1.5
cents per share for the 2011 financial year.
This will bring the total dividend for that year to 2.5 cents per
share (the same as paid for the 2010 financial year).
The dividend will be paid on 16 December 2011.
The extent to which the final dividend will be franked will depend
upon the earnings of the Company during the first half of the
2012 year and the final outcome as regards the position adopted
by the Australian Taxation Office in a Draft Fact Sheet issued on 21
June 2011.
Corporate Governance
During the 2011 financial year, PPK:
•
•
continued its adherence to the Company’s established
corporate governance framework consistent with the
ASX Principles of Good Corporate Governance and Best
Practice Recommendations (2nd edition) (“ASX Principles &
Recommendations”); and
commenced its transition to the changes to the ASX
Principles & Recommendations introduced by the ASX
Corporate Governance Council on 30 June 2010 (for
implementation in the 2012 reporting period) (Revised ASX
Principles & Recommendations) by releasing its updated
trading policy which came into effect on 31 December 2011
in accordance with the ASX Listing Rules.
PPK will progressively implement other changes under the
Revised ASX Principles & Recommendations during the 2012 year
to coincide with the date for implementation of these changes in
corporate governance standards.
Copies of the documents underlying the existing PPK Corporate
Governance 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 and engaged
consultants 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
each of which are designed to attract, engage and retain the
highest possible calibre of employees in the Company’s prevailing
circumstances.
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
P A G E 2
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Chairman and Executive Director’s Overview (continued)
•
•
•
commercialisation of Rambor pneumatic handheld bolters
designed for Hilti One-Step rock anchor installations; the
first commercial product is to undergo trials in Australia
and at Hilti in the second quarter of the 2012 financial
year;
pursuit of suitable growth opportunities in both domestic
and overseas markets for Rambor; this will include the
release of a new range of hand held bolters in the last
quarter of the 2012 financial year; and
identification of and participation in appropriate
investment opportunities, particularly in undervalued
property assets which have significant development
potential; an example of which is PPK’s investment in the
Kiah Project.
Future investment earnings are dependent on a number
of factors including the outcome of the Deeds of Company
Arrangement and re-listing proposals regarding listed company
investments regarding ABQ, ISL and FRR, improvements in
economic outlook and the stability of the Australian share
market.
Jury Wowk
Jury Wowk
CHAIRMAN
Glenn Molloy
Glenn Molloy
EXECUTIVE DIRECTOR
Sydney, 28 September 2011
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.
To this end, the company has an established Environment Policy
which may be found on its website at www.ppkgroup.com.au.
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.
In summary, PPK will focus on the following key areas, namely
the:
•
•
sale/lease of its industrial property located at Arndell Park in
New South Wales;
progression of and active participation in the Kiah Project in
its capacity as lead manager;
P A G E 3
FIVE YEAR FINANCIAL SUMMARY
Five Year Historical Performance
Consolidated
Income Statement
Sales Revenue
Rental Income
(Loss) Profit Before Income Tax
Net (loss) 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 paid during reporting period per ordinary share
Dividend payout ratio
Number of ordinary shares issued at year end
Market capitalisation
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
2011
2010
2009
2008
2007
$000
$000
$000
$000
$000
$000
$000
$000
$000
cents
%
000
$000
%
cents
%
%
times
cents
6,102
2,146
(1,691)
(2,515)
50,453
9,893
29,782
29,782
1,128
2.0
n/a
53,813
16,144
(7.2)
(4.5)
33.2
34.1
3.02
54.0
4,746
3,109
1,246
762
57,427
21,444
34,794
34,794
1,450
2.5
190
58,007
22,623
2.1
1.3
61.6
63.0
3.07
58.6
4,867
4,776
461
540
50,184
12,087
35,449
35,449
2,759
4.75
511
58,007
16,242
1.5
0.9
34.1
34.9
3.04
59.6
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
63,473
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
P A G E 4
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
DIRECTORS’ REPORT
Your directors present their report on the parent entity and its
subsidiaries for the financial year ended 30 June 2011.
Directors
The names of directors in office at any time during or since the
financial year are:
Colin Francis Ryan (resigned due to retirement on
1 August 2011)
Glenn Robert Molloy
Graeme Douglas Webb (appointed on 1 August 2011)
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 (74) (resigned due to
retirement on 1 August 2011)
(Securities held or controlled as at the date of
resignation: 500,000 shares)
service as an executive and 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. On 1 August 2011, Mr Ryan resigned from
office as a director of the Company due to his retirement.
Other listed public company directorships held in the last 3 years: Nil
Glenn Molloy (56)
(Securities held or controlled as at the date of
this report: 11,935,986 shares)
Executive Director (from 7 September
2009)
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 in 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.
B.Com., Dip Ed., CA
Other listed public company directorships held in the last 3 years: Nil
Chairman & Non-Executive, Independent Director
Member of the Board since November 1995 and Chairman since
March 1999.
Member of the Audit Committee
During the reporting period, Colin Ryan was an independent
director of PPK Group Limited and had 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
Graeme Webb (60)
(Securities held or controlled as at the date
of this report: 6,618,320 shares)
Graeme Webb is a substantial shareholder
of PPK Group Limited.
Graeme is Chairman of EDG Capital Limited and has over 40 years
of experience in building, construction and property development
undertaking over $200 million of projects during his career to date.
In addition, Graeme has a broad range of business experience
having acted as a director and/or chairman of a number of private
P A G E 5
Directors’ Report (continued)
and public companies engaged in a range of industries including
plastics packaging, merchant banking, aluminium fabrication,
glazing and glass toughening.
Other listed public company directorships in the last 3 years: Nil
Jury Wowk (60)
(Securities held or controlled as at the date of
this report: 212,302 shares)
BA., LLB
Non-Executive, Independent
Director
Member of the PPK Group Limited Board since listing on 21
December 1994.
Appointed Chairman on 13 September 2011
Jury Wowk was a Partner of and is currently a consultant to 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
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:
Frigrite Limited, Non-executive Director (Appointed: 22
September 2010)
Allied Brands Limited, Non-Executive Director (Appointed: 4
February 2010; Ceased; 15 April 2010)
Intelligent Solar Limited, Non-executive Director (Appointed: 30
November 2010)
Eureka Group Holdings Limited, Non-executive Director &
Chairman (Appointed: 30 November 2010; Ceased: 17 May 2011)
Zylotech Limited, Non-executive Director (Appointed: 1 April
2009; Ceased: 30 September 2009)
Raymond Beath (60)
(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
Company Secretary
The Company Secretary in office at the end of the financial year
was Mr Robert Nicholls.
Information on Company Secretary
Details of the qualifications and experience of the Company
Secretary are detailed below:
Robert Nicholls (42)
MBA (Distinction), LL.B (Hons), Grad Dip Leg
Prac, Grad Dip CSP, FCIS, GAICD
Group Company Secretary
Robert Nicholls is the Legal Director and
Principal Consultant of Prestige Corporate
Services Pty Ltd (trading as Prestige Legal & Corporate Services),
an incorporated legal practice, corporate governance and business
management consultancy firm located in Queensland.
P A G E 6
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Directors’ Report (continued)
Robert has been performing the role of Group Company Secretary
for PPK Group Limited and its subsidiary entities since April
2000. 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 Master 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 Chartered Secretaries Australia and a
graduate of the Australian Institute of Company Directors.
Principal Activities
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 loss after tax of the consolidated entity for the
period ended 30 June 2011 amounted to $2,515,000 (2010: Profit
of $762,000).
Dividends Paid or Recommended
Dividends paid or recommended for payment are as follows:
Final dividend in respect of the 2010
year of 1.0 cent per ordinary share paid
on 19 November 2010
Interim dividend in respect of the reporting
period of 1.0 cent per ordinary share paid
on 15 April 2011
Final dividend in respect of the reporting
period of 1.5 cents per share to be paid
on 16 December, 2011
$577,540
$551,938
$807,000
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 Executive Director’s Review
A residence in the Kiah
project
P A G E 7
construction and sale of seventy six (76) prestige residential
dwellings. A Development Application has been approved by
Council for the construction of the first fourteen (14) homes in the
Kiah Project; construction has begun and all fourteen (14) homes
have been sold and contracts exchanged. PPK will be entitled to
an 18.2% share of profits from the Kiah Project in its capacity as
an investor and interest income as a secured lender to the Project.
Mining Equipment Manufacture
During the financial year, Rambor Pty Ltd (“Rambor”):
•
•
•
generated record sales and profits;
continued to develop and release new products to the
market; and
signed a Supply Agreement in May, 2011 with Hilti
Corporation for the supply of a range of Rambor roof bolting
machines branded as “Hilti” in selected overseas markets
where Rambor is not currently represented. The Supply
Agreement is for a term of five (5) years and provides for
the exclusive supply of these selected products into the
agreed territories. The Supply Agreement is in addition to
the Development and Commercial Agreement signed with
Hilti Corporation in the previous reporting period in respect
of the joint development and proposed commercialisation of
Rambor pneumatic handheld bolters designed for Hilti One-
Step rock anchor installations.
Rambor has started the year with a full order book for the first
quarter and based on this and the above initiatives is expected to
continue to deliver a strong sales and profit result for the current
year.
Directors’ Report (continued)
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.
At the start of the year, PPK’s property portfolio consisted of four
(4) industrial properties consisting of one (1) located at each of
the following locations:
•
•
•
•
Kirrawee in New South Wales which was sold in October,
2010 for $8.25 million generating a $1.514 million profit on
sale;
Dandenong South in Victoria leased to a subsidiary of PACT
Group Pty Ltd (PACT), the purchaser of the packaging
business, until 31 August, 2015;
Seven Hills in New South Wales which is leased to a private
manufacturing business until 30 November, 2012 and
subject to a three (3) year option; and
Arndell Park in New South Wales which was the subject of
a dispute with the previous tenant PACT. This matter was
settled on favourable terms to PPK in October, 2010.
Three (3) of the ASX listed companies in which PPK invested
- Intelligent Solar Limited, Frigrite Limited and Allied Brands
Limited - appointed Voluntary Administrators during the
reporting period. As a result, PPK fully wrote down its investment
in these companies by $5.972 million. PPK continues to hold $2
million in convertible notes issued by Frigrite Limited which are
fully secured by a freehold property in Dandenong, Victoria. This
property has been sold with settlement scheduled for October
2011, at which time PPK expects to recover in full the $2 milllion.
Each of the three (3) companies are subject to Deeds of Company
Arrangement and PPK expects to recover some value in relation
to its investments, however, PPK is unable to quantify the amount
until the companies are relisted.
PPK has invested in and participates as the lead manager of a
syndicate which purchased 4.013 hectares of prime residential
land located at Willoughby in New South Wales (Kiah Project).
This land is being developed over three (3) years with the
P A G E 8
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Directors’ Report (continued)
Future Direction & Business Outlook
FINANCIAL POSITION
In future periods, PPK will focus on the following key areas,
namely, the:
The net assets of the consolidated entity have decreased by
$5,012,000 from 30 June 2010.
•
•
•
•
•
sale/lease of its industrial property located at Arndell Park in
New South Wales;
progression of and active participation in the Kiah Project in
its capacity as lead manager;
commercialisation of Rambor pneumatic handheld bolters
designed for Hilti One-Step rock anchor installations; the first
commercial product is to undergo trials in Australia and at
Hilti in the second quarter of the 2012 financial year;
pursuit of suitable growth opportunities in both domestic
and overseas markets for Rambor; this will include the
release of a new range of hand held bolters in the last
quarter of the 2012 financial year; and
identification of and participation in appropriate investment
opportunities, particularly in undervalued property assets
which have significant development potential; an example
of which is PPK’s investment in the Kiah Project.
Dividends
The directors have resolved that the Company will pay a final
dividend of 1.5 cents per share for the 2011 financial year. This
will bring the total dividend for that year to 2.5 cents per share
(the same as paid for the 2010 financial year).
The dividend will be paid on 16 December 2011.
The extent to which the final dividend will be franked will depend
upon the earnings of the Company during the first half of the
2012 year and the final outcome as regards the position adopted
by the Australian Taxation Office in a Draft Fact Sheet issued on 21
June 2011.
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;
disposal of investment property; and
on-market buy-back of 4,193,871 shares at a cost of
$1,461,653 (or an average of 34.9 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 5,800,665 PPK
shares) inclusive of shares bought back by PPK in the 12 month
period preceding the announcement of the on market buy back
on 7 October 2010.
The on-market buy back scheme:
•
commenced on 20 October 2010; and
• will conclude on or by 19 October 2011, or at such earlier
time as determined by PPK pursuant to the terms of the
buy-back.
During the period from the commencement of the on-market
share buy-back to the end of the financial year ended 30 June
2011, PPK acquired a total of 4,193,871 shares under the scheme
at a cost of $1,461,653 (or an average price of approximately 34.9
cents per share).
There have been no other significant changes in the state of
affairs during the 2011 financial year or existing at the time of this
report.
P A G E 9
Directors’ Report (continued)
Matters Subsequent to the End of the
Financial Year
The Company was not a party to any such proceedings during
the year.
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 2011 are included
in the Chairman and Executive Director’s Review detailed in the
2011 PPK Annual Report and in the Review of Operations section
of this Directors’ Report.
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 Company’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.
Remuneration Report
Remuneration Report - Audited
This Remuneration 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 2011.
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 high 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
P A G E 1 0
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Directors’ Report (continued)
this amount is set at $275,000 per annum in aggregate as
approved by shareholders at the 2003 Annual General Meeting.
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 resolved to reduce the fees payable to non-executive
directors with effect from 1 September 2009 to reflect the
prevailing size, nature and extent of the Company’s operations.
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 high 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.
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 (as each of these italicised terms are
defined under the PPK Executive Incentive Scheme)(“PEIS”).
The Board exercises its discretion under the PEIS 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.
Company Performance, Shareholder Wealth and
Directors and Executives Remuneration
The Remuneration Policy has been designed to achieve the goal
congruence between shareholders, directors and executives.
The two methods employed in achieving this aim are:
•
•
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
the issue of options to executives as a means of long-term
incentive to encourage the alignment of personal and
shareholder interests.
There were no options issued to directors or 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.
P A G E 1 1
Directors’ Report (continued)
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.
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”) and King Cobra Mining Equipment Pty Limited
(“King Cobra”), was paid a cash bonus payment relating to the
achievement of performance targets in respect of the company
earnings of Rambor and King Cobra for the 2009 and 2011
financial years.
Wildam Investments Pty Pty, an entity related to management
consultant, D.A.Hoff, was paid a cash bonus payment relating to
the achievement of performance targets in respect of Rambor for
the 2011 year.
No other bonus payments have been made to key management
personnel for the consolidated entity and the company and:
•
•
group executives of the consolidated entity; and
company executives
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.
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. There were no bonuses paid
to executives in respect of the attainment of predetermined non-
financial performance indicators are detailed within this report.
Consequences of company performance on shareholder wealth
The following table outlines the impact of company performance
on shareholder wealth:
Earnings per share
(cents)
Full year ordinary dividends
(cents) per share
Special dividend (cents)
per share
Year-end share price
Shareholder return
(annual)
2011
(4.5)
2010
1.3
2009
0.9
2008
1.0
2007
15.9
2.0
-
2.5
-
2.5
-
6.5
5.0
7.0
-
$0.30
(16.3%)
$0.28
$0.39
45.4% (51.4%)
$0.70
$0.78
5.3% 13.2%
The above table shows the annual returns to shareholders
calculated to include the difference in percentage terms between
the dividend yield for the year (based on the average share price
during the period) and changes in 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.
In respect of the 2009 financial year, for example, no bonuses
were paid or accrued to company executives relating to earnings
performance conditions pertaining to that year while bonuses
were paid to selected executives in respect of the 2007 financial
year based on the positive performance of the consolidated entity
in that year.
Further, the bonus payment disclosed in respect of relevant group
executive, Peter Mastalir, in respect of the 2009 and 2011 financial
years, and the bonus payment to company executive, David Hoff,
in respect of the 2011 year, are based on the positive performance
of the individual company in which the relevant group executive
and company executive respectively performs his or her primary
duties and responsibilities.
In contrast, there were no bonuses paid or accrued to company
executives or relevant group executives in respect of the 2010
financial year due to the fact that the required pre-determined
performance targets linked to incentive payments were not
achieved during the period.
P A G E 1 2
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Directors’ Report (continued)
Details of Remuneration for the year ended 30 June 2011
Directors’ and executive officers’ remuneration
Details of the nature and amount of each major element of compensation of each director, company executive and relevant group executive
who receive the highest remuneration for the year ended 30 June 2011 are included in the table on the following page of this report:
Short Term Incentives
Post
Employment
Salary
& Fees
($)
Short Term
Incentive
Cash Bonus
($)
Non-Cash
Benefits
Superan-
nuation
($)
($)
Long
Service
Leave
Long Term Incentives/Benefits
Post
Employ-
ment
Benefits
($)
Share
based
payments
($)
Total
($)
Proportion of
Remuneration
Performance
Related
(%)
Directors
Non –Executive
C F Ryan*
R M Beath
J I Wowk
Executive
G R Molloy
Total Directors
Company Executive
D A Hoff
R J Nicholls
Total Executives
Relevant Group Executive
P R Mastalir
Total Relevant Group Executive
45,000
30,000
47,220
221,000
-
-
-
-
250,000
40,000
50,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
187,658
184,721
31,512
11,700
2,505
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17%
-
45,000
30,000
47,220
221,000
343,220
300,000
40,000
340,000
418,096
44%
418,096
* Resigned due to retirement on 1 August 2011.
A residence in the Kiah
project
P A G E 1 3
Directors’ Report (continued)
The named company executive and relevant group executive held
the following positions during the period:
Company Executive
Position
D A Hoff
R J Nicholls
Management Consultant
Group Company Secretary
Relevant Group Executive
Position
P R Mastalir
Managing Director,
Rambor Pty Ltd
There are no other company executives 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
C F Ryan
G R Molloy
J I Wowk
R M Beath
D A Hoff
Position
Non-executive Director
Chairman
(resigned 1 August 2011)
Executive Director
Non-executive Director
Non-executive Director
Management Consultant
2010
Short Term Incentives
Post
Employment
Long Term Incentives/Benefits
Salary
& Fees
($)
Short
Term
Incentive
Cash
Bonus
($)
Non-Cash
Benefits
($)
Superan-
nuation
($)
Long
Service
Leave
Total ($)
Termination
Benefits
($)
Share
based
payments
($)
Proportion of
Remuneration
Performance
Related (%)
Post
Employ-
ment
Benefits
($)
Directors
Non –Executive
C F Ryan
G R Molloy
R M Beath
J I Wowk
Executive
D A Hoff*
Total Directors
Company Executives
R J Nicholls
Total Company Executives
49,500
220,250
33,000
33,000
311,601
30,000
Relevant Group Executive
P R Mastalir
135,200
Total Relevant Group Executive
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18,347
50,000
-
-
-
-
-
-
-
-
82,996
11,700
2,252
-
-
-
-
-
-
-
359,919
-
-
-
-
-
-
-
49,500
220,250
33,000
33,000
739,867
1,075,617
30,000
30,000
232,148
232,148
-
-
-
-
-
-
-
* Resigned due to retirement on 7 September 2010. Amounts disclosed as remuneration to this executive include a combination of salary paid to the executive while Managing Director
of the consolidated entity until retirement and consultancy fees paid to this executive during the remainder of the financial year.
P A G E 1 4
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Directors’ Report (continued)
The named company executives and relevant group executive held
the following positions during the period:
Company Executive
Position
R J Nicholls
Group Company Secretary
Relevant Group Executive
Position
P R Mastalir
Managing Director,
Rambor Pty Ltd
There are no other company executives 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
Executive Director (from 7 September 2009)
Non-Executive Director
Non-Executive Director
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 executives and which may have vested at the date of this report are detailed below:
Short term incentive cash bonus
Included in Remuneration
($)
Vested in period
(%)
Forfeited in period (A)
(%)
Company Executive
D A Hoff
Relevant group executive
P R Mastalir
50,000
184,721
100%
100%
0%
0%
Available for vesting
in future years
(B)
-
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 relates to the amount of short term bonus which may have accrued from the 2011financial year and be payable in future financial years.
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.
Bonuses were paid to the company executive and relevant group executive as detailed within this report in respect of the current period.
The performance conditions relating to:
•
•
D A Hoff comprised the successful development and execution of a contract between Rambor and Hilti which was satisfied in
February 2011; and
P R Mastalir related to the achievement of pre-determined and specified Earnings Before Interest & Tax (EBIT) targets for Rambor.
P A G E 1 5
Directors’ Report (continued)
Each of these performance incentive targets were achieved during
the 2011 financial year and, therefore, the bonuses were paid and
accrued respectively.
The Company’s Secretary, R J Nicholls:
•
•
is engaged in a non-executive, consultative capacity; and
is not remunerated by means of specified performance
conditions and targets.
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
Value yet to vest or which may vest
Minimum Maximum
Financial years
in which bonus
vests or may vest
2012
0
(A)
Relevant Group Executive
P R Mastalir
(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 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.
Options issued as part of remuneration for the
year ended 30 June 2011
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.
Employment Contracts
On 7 September 2009, David Hoff retired as Managing Director
and as a Director of the Company.
Following his resignation, the Company and Mr Hoff agreed the
remuneration and other terms of David Hoff continuing in the role
of a consultant.
The key provisions of the consultancy arrangement are as follows:
•
•
•
•
Term: Initial period of 3 years commencing on
1 September 2009. Unless either the Company or David Hoff
serves a written notice at least 120 days prior to the expiry
of the term, the consultancy arrangement will automatically
renew for a further term of 2 years. This renewal process may
continue indefinitely.
Remuneration: Consultancy fee payable during the period 1
September 2009 to 30 June 2010 was $250,000 per annum.
The Company must supply a mobile phone and laptop and
shall reimburse all expenses incurred in relation to provision
of the consultancy services.
Duties: The duties of Mr Hoff include the oversight of general
administrative functions of the Company and supervising
special projects and/or the Company’s operating businesses.
David Hoff is required to attend to his duties 3 days per week
on average for 48 weeks per year. Mr Hoff is likely to be
invited to attend the Company Board meetings.
Termination: The consultancy arrangement may be
terminated at any time by David Hoff by giving the Company
P A G E 1 6
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Directors’ Report (continued)
6 months written notice. The Company can terminate
the arrangement at any time with no cause by paying
an amount equivalent to the greater of the then current
consultancy fee for a term of 12 months, or the remainder
of the term. In the event Mr Hoff’s services are not provided
for a continuous period in excess of 3 months, the Company
can terminate the consultancy arrangement by paying
an amount equivalent to the current consultancy fee for a
period of 12 months. Both the Company and Mr Hoff can
immediately terminate the arrangement in the event the
other breaches the terms of the consultancy and that breach
is not remedied within 4 weeks notice of that breach. The
Company has immediate termination rights for specified
misconduct.
A performance review was undertaken in August 2011 regarding
the performance of Mr Hoff and his related entity in respect of the
year ended 30 June 2011.
Glenn Molloy was appointed an Executive Director on 7
September 2009.
The remuneration and other terms of Mr Molloy’s employment
have been approved by the Board and include payment of 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 2011 regarding
the performance of Mr Nicholls and his related entity in respect of
the year ended 30 June 2011.
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 2011 regarding
the performance of Mr Mastalir and his related entity in respect of
the year ended 30 June 2011.
There are no formalised written contracts in place with any other
specified executives.
End of Audited Remuneration Report
P A G E 1 7
Directors’ Report (continued)
Options
There were no options outstanding as at the date of this report.
majority of the ASX Recommendations in all material respects
as more fully detailed in the Statement of Corporate Governance
Practices on pages 20 to 33 of the PPK 2011 Annual Report.
Directors’ Interests
In accordance with the Recommendations, the Board has:
Particulars of Directors’ interests in shares and options as at the
date of this report are as follows:
C F Ryan*
G R Molloy
G D Webb**
J I Wowk
R M Beath
Ordinary Shares
500,000
11,935,986
6,618,320
212,302
42,821
Options
-
-
-
-
-
* Resigned to due to retirement on 1 August 2011.
** Appointed 1 August 2011
Further information regarding these interests and net movements
throughout the reporting period is disclosed in Note 5 (Key
Management Personnel Disclosures) to the Financial Statements
accompanying this Directors’ Report.
Meetings of Directors
During the financial year, meetings of directors (including
committee meetings) were held.
•
•
received and considered reports from management
regarding the effectiveness of the Company’s management
of its material business risks; and
received assurance from the people performing each of the
chief executive officer and chief financial officer functions
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.
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
Attendances were:
DIRECTORS’ MEETINGS
COMMITTEE MEETINGS
Colin Francis Ryan
Glenn Robert Molloy
Jury Ivan Wowk
Raymond Michael Beath
Number
Eligible to attend
Number
Attended
Number Eligible
to attend
13
13
13
13
12
13
13
13
3
-
-
3
Number
Attended
3
-
-
3
Risk & Control Compliance Statement
Under ASX Listing Rules and the ASX Corporate Government
Council’s Principles of Good Corporate Governance and Best
Practice Recommendations (“ASX Recommendations”), the
Company is required to disclose in its Annual Report the extent of
its compliance with the ASX Recommendations.
Throughout the reporting period, and as at the date of signing
of this Directors’ Report, the Company was in compliance with a
During the reporting period, the PPK Audit Committee consisted
of the following Non-executive, Independent Directors:
•
•
•
R M Beath (Chairman)
C F Ryan (resigned due to retirement on 1 August 2011)
J I Wowk was appointed as a member of the Audit
Committee on 1 August 2011.
P A G E 1 8
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Non-Audit Services
There were no non-audit services performed by the external
auditors, BDO Audit (NSW-VIC) Pty ltd, during the year ended 30
June 2011.
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 2011 and a copy of this declaration is
set out on page 86 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.
Jury Wowk
CHAIRMAN
Sydney, 28 September 2011
Directors’ Report (continued)
The Company’s lead signing and review External Audit Partner,
Executive Director and selected consultants attend meetings of
the Audit Committee by standing invitation.
Directors’ and Auditors’ Indemnification
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 follows:
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 $21,698.
Directors’ Benefits
Since 30 June 2010, 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 provided tax and accounting services to the consolidated
entity in the ordinary course of business.
Mr Jury Wowk was a partner in HWL Ebsworth Lawyers, is
currently a consultant to HWL Ebsworth Lawyers and principal of
JW Corporate which has provided legal and consultancy services
respectively 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.
P A G E 1 9
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
13
13
13
13
12
13
13
13
3
-
-
3
3
-
-
3
STATEMENT OF CORPORATE GOVERNANCE PRACTICES - 2011
PPK Group Limited (“PPK” or “the Company”)
For the reasons expressed within this Statement, PPK has elected
not to adopt ASX Recommendations 2.4, 4.2 and 8.1.
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.
PPK 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:
•
review and continually improve its governance practices; and
• monitor developments in good corporate governance.
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 recommendations set by the ASX
Corporate Governance Council (“ASX Recommendations”) in the
reporting period.
Listed companies must identify the ASX 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 and
Recommendations (“ASX Principles & Recommendations”) except
for those detailed, and for the reasons outlined, in this Report.
PPK has posted copies of its relevant corporate governance
policies and practices to its website consistent with the ASX
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.
Transition to Revised Principles &
Recommendations
On 30 June 2010, the ASX Corporate Governance Council
released amendments to the 2nd edition of the ASX Principles
and Recommendations in relation to diversity, remuneration,
trading policies and briefings (“Revised ASX Principles &
Recommendations”).
The change in the reporting requirements for each of the
amendments to the ASX Principles and Recommendations will:
•
•
apply to PPK in relation to the financial year ending 30 June
2012; and
require disclosure by PPK in its 2012 Annual Report.
During the year, PPK commenced its transition to the Revised ASX
Principles and Recommendations by releasing its updated trading
policy and will progressively implement other changes (including
a comprehensive review of all of its existing public policies)
during the 2012 year.
Date of this Statement
This statement outlines the:
•
ASX Principles & Recommendations (2nd edition) identified
by the ASX as underlying good corporate governance; and
• main corporate governance practices of PPK during the year
to 30 June 2011, except where stated otherwise.
P A G E 2 0
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Statement of Corporate Governance Practices - 2011 (continued)
PRINCIPLE 1: Lay solid foundations for
management and oversight
Companies should establish and disclose the respective
roles and responsibilities of board and management.
Recommendation 1.1: 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.
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;
appointing, removing and controlling the Executive Director;
ratifying the appointment and, where appropriate, the
removal of the Chief Financial Officer (“CFO”) 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 Executive 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
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.
Senior Executive Performance Evaluation
The Board is responsible for approving the performance objectives
and measures for the Executive Director and assessing whether
these objectives have been satisfied by the performance of the
Executive Director during the relevant period and in accordance
with agreed terms of engagement.
The Executive Director 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
P A G E 2 1
Statement of Corporate Governance Practices - 2011 (continued)
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 key management personnel
for the 2011 financial year were conducted in August 2011. 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.
PRINCIPLE 2: Structure the board to add value.
Companies should have a board of an effective
composition, size and commitment to adequately
discharge its responsibilities and duties.
Recommendation 2.1: A majority of the board should be
independent directors.
Recommendation 2.2: The chair should be an independent
director.
Recommendation 2.3: The roles of chair and chief executive
officer should not be exercised by the same individual.
Recommendation 2.4: The board should establish a
nomination committee.
Recommendation 2.5: Disclose the process for evaluating
the performance of the board, its committees and individual
directors
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 PPK Board has made its own assessment to determine the
independence of each director on the Board. It is the Board’s
view that the following existing non-executive directors are
independent, namely: Mr J I Wowk and Mr R M Beath.
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.
Composition of the Board
The PPK Board comprises three (3) non-executive directors and
one (1) executive director.
During the year, the composition of the Board was 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 adopted a policy that the position of Chairman
would be held by a non-executive director;
P A G E 2 2
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Statement of Corporate Governance Practices - 2011 (continued)
•
consistent with the Company’s objective that the Board
should encompass a broad range of relevant expertise, the
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.
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 are detailed
within the Directors’ Report.
Chairman
The Chairman is selected by the Board from the non-executive
directors.
During the year, Mr C R Ryan, an independent, non-executive
director, continued to perform the role of Chairman as appointed
by the Board. Mr Ryan resigned due to retirement on 1 August
2011 and was a director of PPK from November 1995 and
Chairman from March 1999.
Mr J I Wowk was appointed Chairman by the remaining directors
on 13 September 2011.
Separation of roles of Chair and CEO/Executive
Director
During the year, PPK’s Chairman and Executive Director had
separate roles. The roles and responsibilities of the Chairman and
the Executive Director in respect of 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.
The PPK Board currently consists of only four (4) 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.
P A G E 2 3
Statement of Corporate Governance Practices - 2011 (continued)
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.
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.
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,
Executive Director and key senior management executives of the
Company.
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 on 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
the Executive 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.
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.
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 xx and xx of the PPK 2011
Annual Report.
P A G E 2 4
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Statement of Corporate Governance Practices - 2011 (continued)
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 Company 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)
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
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.
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 Code provides 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;
P A G E 2 5
Statement of Corporate Governance Practices - 2011 (continued)
•
•
•
•
use the powers of their position for a proper purpose, in the
interests of the Company;
not make improper use of information acquired in 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.
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).
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.
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 (effective from 31 December 2011),
Key Management Personnel (as defined under the policy) are
restricted from trading in the Company’s securities during the
following periods:
•
•
•
between 15 June and the announcement of the Company’s
Annual results;
between 15 December and announcement of the Company’s
Half Year results; and
14 calendar days before the release of the Chairman’s
Address to the AGM;
and ending on the day the announcement is released to the
market.
P A G E 2 6
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Statement of Corporate Governance Practices - 2011 (continued)
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.
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 has an established Audit Committee which
continues to provide assistance to the Board in accordance with its
established Terms of Reference.
Audit Committee Structure
PPK:
•
•
does not comply with ASX Recommendation 4.2 regarding
the desired number of members of an audit committee; and
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 ASX
Recommendation 4.2.
During the reporting period, the PPK Audit Committee comprised
only two (2) non-executive directors and was chaired by Mr R M
Beath who was not Chairman of the Board.
The Board considers that the technical skills, qualifications and
experience represented by the involvement during the reporting
period of members Mr R M Beath and Mr C F Ryan (resigned due
to retirement on 1 August 2011) were most suited to the effective
discharge of the responsibilities of the committee.
Mr J I Wowk was appointed as a member of the Audit Committee
on 1 August 2011.
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
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;
P A G E 2 7
Statement of Corporate Governance Practices - 2011 (continued)
•
•
•
•
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;
identification of the full range of actual or potential risk
exposures which are material to PPK; and
the effectiveness of the group’s risk management systems
and strategies.
Meetings
The PPK 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.
Specifically, the external auditor will not normally provide the
following types of services to the Company:
•
•
•
•
•
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 were appointed independent external auditors of PPK on
listing of the former entity Plaspak Group Limited in 1994 and
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:
P A G E 2 8
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Statement of Corporate Governance Practices - 2011 (continued)
•
•
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”).
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 External Audit Partner for
PPK was Mr Iain Kemp.
Mr Kemp replaced Mr Wayne Basford, by rotation, as lead External
Audit Partner for the Company for the financial year commencing
1 July 2010.
Details of the members of the Audit Committee
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.
During the reporting period, the Board’s Audit Committee
consisted of:
Policies & procedures regarding disclosure
requirements
• Mr R M Beath (Chairman)
• Mr C F Ryan (resigned due to retirement on 1 August 2011)
• Mr J I Wowk was appointed as a member of the Audit
Committee on 1 August 2011.
The lead signing and review External Audit Partner and the
Company’s Executive Director attend committee meetings by
standing invitation.
The qualifications of each member of the committee are set out in
the Directors’ Report on pages 5-6 of the PPK 2011 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.
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.
P A G E 2 9
Statement of Corporate Governance Practices - 2011 (continued)
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.
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.
•
•
occasional letters from the Executive Director and Chairman
to inform shareholders of key matters of interest; and
the Company’s website 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.
Recommendation 6.2: Provide the information indicated in
Guide to reporting on Principle 6.
Policy Disclosure
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 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
The PPK Shareholder Communication Policy demonstrates PPK’s
commitment to:
Companies should establish a sound system of risk
oversight and management and internal control.
•
•
•
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:
•
•
•
its Annual Report;
disclosures to the ASX and ASIC;
notices and explanatory memoranda of annual general
meetings and general meetings;
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
P A G E 3 0
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Statement of Corporate Governance Practices - 2011 (continued)
295A of the Corporations Act is founded on a sound system
of risk management and internal control and that the system
is operating effectively in all material respects in relation to
financial reporting risks.
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.
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 Executive 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
Each month, reports are presented to the Board by the Executive
Director and retained consultants. 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
Executive Director, retained consultants and senior management
on emerging or developed trends in market and operational
conditions having the potential to impact on the overall
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 2011.
This report was undertaken in accordance with the process
outlined in this Statement.
CEO & CFO Assurance
The Executive 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 1
Statement of Corporate Governance Practices - 2011 (continued)
The Board has received assurance from the Executive Director and
the person performing the chief financial officer function under
Recommendation 7.3 in respect of the year ended 30 June 2011.
This assurance was provided in accordance with the process
outlined in this Statement.
Policy Disclosure
PPK has made a description of its Risk Oversight and
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 PPK Board currently consists of only four (4) 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.
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.
Executive Director & Non-Executive Director
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 Executive
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.
The broad remuneration policy objective of PPK is to ensure that
the emoluments provided properly reflect the person’s duties and
P A G E 3 2
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Statement of Corporate Governance Practices - 2011 (continued)
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 and Notes to the 2011 Financial
Statements each contained in the 2011 PPK Annual report.
Copies of the PPK Remuneration Policy and PEIS are publicly
available in the designated corporate governance area of its
website at www.ppkgroup.com.au.
responsibilities and is designed to attract, retain and motivate
executives of the highest possible quality and standard in the
Company’s prevailing circumstances to enable the organisation
to succeed.
The PPK Executive Incentive Plan (“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 under the
PEIS.
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.
PPK is committed to making timely disclosure of all relevant
information relating to its remuneration practices and policies in
the context of reporting obligations in its Corporate Governance
Statement, in its Annual Report, and pursuant to continuous
disclosure requirements.
A residence in the Kiah project
P A G E 3 3
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2011
CONSOLIDATED ENTITY
Note
2(a)
2(b)
2(e)
2(d)
3
7
7
2011
$000s
6,102
2,146
23
1,589
9,860
3,253
(4,665)
(1,071)
(5,671)
(1,567)
(1,418)
(14,392)
(412)
(1,691)
(824)
(2,515)
163
(49)
(13)
4
(10)
3
98
(2,417)
(4.5)
(4.5)
2010
$000s
4,746
3,109
59
1,158
9,072
3,894
(4,538)
(3,515)
(700)
(1,165)
(1,118)
(11,036)
(684)
1,246
(484)
762
194
(58)
-
-
(146)
44
34
796
1.3
1.3
REVENUES
Mining equipment manufacture
Investment properties
Investment activities
Interest receivable
TOTAL REVENUE
OTHER INCOME
EXPENDITURE
Mining equipment manufacture
Investment properties
Investment activities
Administrative expenses
Finance costs
TOTAL EXPENDITURE
Share of (loss) from associates
accounted for using the equity method
(LOSS) / PROFIT BEFORE INCOME TAX EXPENSE
Income tax (expense) attributable to profit
(LOSS) / PROFIT AFTER INCOME TAX FOR THE YEAR
ATTRIBUTABLE TO THE OWNERS OF PPK GROUP LIMITED
OTHER COMPREHENSIVE INCOME
Changes in value on available-for-sale financial assets
Provision for income tax thereon
Unrealised impairment losses on available-for-sale financial assets
reclassified to the profit or loss from the asset revaluation reserve
Provision for income tax thereon
Realised gain on sale of available-for-sale financial assets
reclassified to the profit or loss from the asset revaluation reserve
Provision for income tax thereon
Other comprehensive income net of income tax
TOTAL COMPREHENSIVE (LOSS) / PROFIT FOR THE YEAR
ATTRIBUTABLE TO THE OWNERS OF PPK GROUP LIMITED
Overall Operations
Basic earnings per share ( cents per share )
Diluted earnings per share ( cents per share )
The accompanying notes form part of these financial statements
P A G E 3 4
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2011
CONSOLIDATED ENTITY
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
Investments in associated companies - equity accounted
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
(Accumulated losses) / Retained earnings
TOTAL SHAREHOLDERS’ EQUITY
The accompanying notes form part of these financial statements
Note
9
10
11
12
14(b)
10
13(a)
13(b)
14(a)
15
16(a)
17
18
19
20
16(b)
21
22
16(b)
21
23
24
2011
$000s
9,681
4,367
1,813
395
16,256
-
16,256
5,166
-
745
24,486
1,412
1,646
742
-
34,197
50,453
625
1,074
122
247
2,068
18,500
35
68
18,603
20,671
29,782
29,782
122
(122)
29,782
2010
$000s
23
7,153
1,509
410
9,095
7,103
16,198
7,617
3,692
1,105
24,248
1,624
2,036
779
128
41,229
57,427
413
2,944
458
215
4,030
18,500
55
48
18,603
22,633
34,794
31,249
24
3,521
34,794
P A G E 3 5
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2011
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
Interest paid
Net cash provided by / ( used in ) operating activities
30 (a)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investment property
Proceeds from sale of plant & equipment
Purchase of property, plant & equipment
Proceeds from sale of available-for-sale financial assets
Purchase of available-for-sale financial assets
Proceeds from sale of investment in associated companies
Payments for investments in associated companies
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
Proceeds from bank loans
Loans repaid
Repayment of borrowings
Dividends 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
30 (b)
The accompanying notes form part of these financial statements
P A G E 3 6
CONSOLIDATED ENTITY
2011
$000s
7,624
(6,517)
1,627
23
1,141
(831)
(1,418)
1,649
8,085
8
(533)
516
(87)
15
(19)
-
-
(11)
7,974
-
(1,467)
-
4,500
-
(1,128)
1,905
11,528
(2,921)
8,607
2010
$000s
7,992
(7,282)
241
191
451
(869)
(1,118)
(394)
5,166
-
(293)
2,452
(1,161)
-
(2,829)
(2,000)
(272)
(2)
1,061
(8,700)
-
6,400
149
(23)
(1,450)
(3,624)
(2,957)
36
(2,921)
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2011
ISSUED
CAPITAL
$000s
RETAINED
EARNINGS/
(ACCUMULATED
LOSSES)
$000s
OTHER
RESERVES
$000s
TOTAL
EQUITY
$000s
CONSOLIDATED ENTITY
At 1 July 2009
Total comprehensive income for the year
Profit for the year
Other comprehensive income
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 comprehensive income for the year
Transactions with owners in their capacity as owners
Dividends paid
Shares repurchased
31,249
-
-
-
-
-
-
-
-
-
At 30 June 2010
31,249
4,209
762
-
-
-
-
762
(1,450)
-
(1,450)
3,521
(9)
-
(147)
44
194
(58)
33
-
-
-
24
35,449
762
(147)
44
194
(58)
795
(1,450)
-
(1,450)
34,794
Total comprehensive income for the year
Loss for the year
Other comprehensive income
Fair value adjustment on available-for-sale financial assets
expensed on impairment
less deferred tax impact
Realised gain on available-for-sale financial assets
less deferred tax impact
Fair value adjustment on available-for-sale financial assets
less deferred tax impact
Total comprehensive (loss) / income for the year
Transactions with owners in their capacity as owners
Dividends paid
Shares repurchased
At 30 June 2011
The accompanying notes form part of these financial statements
-
-
-
-
-
-
-
-
-
(1,467)
(1,467)
29,782
(2,515)
-
(2,515)
-
-
-
-
-
-
(2,515)
(1,128)
-
(1,128)
(122)
(13)
4
(10)
3
163
(49)
98
-
-
-
122
(13)
4
(10)
3
163
(49)
(2,417)
(1,128)
(1,467)
(2,595)
29,782
P A G E 3 7
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2011
1
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Corporate Information
The financial statements of PPK Group Limited for the year ended 30 June 2011 were authorised for issue in accordance with a resolution of the directors on 28
September 2011 and covers PPK Group Limited and its subsidiaries as required by the Corporation Act 2001.
Separate financial statements for PPK Group Limited as an individual entity are no longer presented as a consequence of a change to the Corporations Act 2001,
however, limited financial information for PPK Group Limited is provided as an individual entity in note 8.
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 statements are general purpose financial statements which have 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 also comply with International Financial Reporting Standards (IFRS) as issued by The International Accounting Standards Board.
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 and land and buildings, plant and equipment were impairment has been recognised when the fair
value of the asset is less than the historical cost.
Non-current assets and disposal groups held-for-sale are measured at the lower of carrying amounts and fair value less costs to sell.
The accounting policies have been consistently applied to the entities of the consolidated entity unless otherwise stated.
The financial statements are presented in Australian currency.
(b)
Basis of Consolidation
Subsidiaries
The consolidated financial statements comprise the financial statements of PPK Group Limited and its subsidiaries at 30 June each year (“the Group”).
Subsidiaries are entities over which the Group has the power to govern the financial and operating policies generally over which the Group has the power
to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. Potential voting rights
that are currently exercisable or convertible are considered when assessing control. Consolidated financial statements include all subsidiaries from the
date that control commences until the date that control ceases. The financial statements of subsidiaries are prepared for the same reporting period as the
parent, using consistent accounting policies.
All intercompany balances and transactions, including unrealised profits arising from intergroup transactions have been eliminated. Unrealised losses are
also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Associates
Associates are entities over which the Group has significant influence but not control. Associates are accounted for in the consolidated financial
statements using the equity method accounting. Under the equity method the Group’s share of the post-acquisition other comprehensive income or
loss of the associates is recognised in consolidated profit or loss and the Group’s share of the post-acquisition movements in reserves of associates is
recognised in consolidated other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the
investment. Dividends received from associates reduce the carrying amount of the investment in the consolidated financial statements.
When the Group’s share of post-acquisition losses in an associate exceeds its interest in the associate (including any unsecured receivables), the Group
does not recognise further losses unless it has obligations to, or has made payments, on behalf of the associate.
The financial statements of the associate are used to apply the equity method. The end of the reporting period of the associate and the parent are
identical and both use consistent accounting policies.
(c)
Revenue and Revenue Recognition
Revenue is recognised at the fair value of consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowance and
duties and taxes paid. The following specific recognition criteria must also be met before revenue is recognised:
P A G E 3 8
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to the Consolidated Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
1
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Sales of goods
Revenue from the sale of mining equipment is recognised when significant risk and rewards of rewards of ownership have passed to the buyer and can
be reliable measured. Risks and rewards are considered passed to the buyer when the goods have been delivered to the customer.
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.
Interest income
Revenue is recognised as it accrues using the effective interest rate method. The effective interest method uses the effective interest rate which is the rate
that exactly discounts the estimated future cash receipts over the expected life of the financial asset.
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 Group’s right to receive payment is established.
(d)
Inventories
Raw materials, work in progress and finished goods
Inventories are stated at the lower of cost and net realisable value. Costs comprise 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.
(e)
Trade Receivables & other receivables
Trade and other receivables and are recognised initially at original invoice amounts less an allowance for uncollectible amounts and have repayment
terms between 30 - 45 days. Collectability 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 may 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.
(f)
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.
Deferred tax assets are only recognised for deductible temporary differences, between carrying amounts of assets and liabilities for financial reporting
purposes and their respective tax bases, at the tax rates expected to apply when the assets are recovered or liabilities settled, based on those tax rates
which are enacted or substantially enacted for each jurisdiction. 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.
P A G E 3 9
Notes to the Consolidated Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
1
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Deferred tax assets are only recognised for deductible temporary differences and unused tax losses if there is reasonable certainty that future taxable
amounts will be available to utilise those temporary differences and losses.
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.
Current and deferred tax balances relating to amounts recognised directly in other comprehensive income or equity are also recognised directly in other
comprehensive income or equity.
PPK Group Limited and its wholly owned Australian subsidiaries have implemented the tax consolidation legislation for the whole of the financial year.
PPK Group Limited is the head entity in the tax consolidated group. The stand-alone taxpayer/separate taxpayer within a group approach has been
used to allocate current income tax expense and deferred tax expense to wholly-owned subsidiaries that form part of the tax consolidated group. PPK
Group Limited has assumed all the current tax liabilities and the deferred tax assets arising from unused tax losses for the tax consolidated group via
intercompany receivables and payables because a tax funding arrangement has been in place for the whole of the financial year. The amounts receivable/
payable under tax funding arrangements are due upon notification by the head entity. Interim funding notices may also be issued by the head entity to
its wholly-owned subsidiaries in order for the head entity to be able to pay tax instalments.
(g)
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 Group 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 the 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
Buildings
Depreciation Rate
Straight Line
2 %
Leasehold Improvements
over the term of the lease
Plant & Equipment
Leased Plant & Equipment
3-50 %
3-33 %
P A G E 4 0
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to the Consolidated Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
1
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Non-Current Assets Classified as Held for Resale
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 and sale is considered highly probable. 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.
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 profit or loss.
(h)
Investments and Other Financial Assets
All investments and other financial assets are initially stated at cost, being the fair value of consideration given plus acquisition costs.
Purchases and sales of investments are recognised at trade date which is the date on which the Group commits to purchase or sell the asset.
Accounting policies for each category of investments and other financial assets subsequent to initial recognition are 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 on 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 of financial assets, and are classified as non-current assets (unless management intends to dispose of the investments within 12 months
of the end of the reporting period). After initial recognition, these investments are measured at fair value with gains or losses recognised in other
comprehensive income (available-for-sale investments revaluation reserve). Where there is a significant or prolonged decline in the fair value of
an available-for-sale (which constitutes objective evidence of impairment) the full amount including any amount previously charged to other
comprehensive income is recognised in profit or loss.
Purchases and sales of available-for-sale are recognised on settlement date with any change in fair value between trade date and settlement being
recognised in other comprehensive income. On sale the amount held in available-for-sale reserves associated with that asset is recognised in profit or
loss as a reclassification adjustment.
P A G E 4 1
Notes to the Consolidated Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
1
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Investments in subsidiaries, associates and joint venture entities are accounted for in the consolidated financial statements as described in note 1(b).
Reversal of impairment losses on equity instruments classified as available-for-sale cannot be reversed through profit or loss. Reversal of impairment
losses on debt instruments classified as available-for-sale can be reversed through profit or loss where the reversal relates to an increase in the fair value
of the debt instrument occurring after the impairment loss was recognised in profit or loss.
The fair value of quoted investments are determined by reference to Securities Exchange quoted market bid prices at the close of business at the end
of the reporting period. For investments where there is no quoted market, fair price is determined by reference to current market value of another
instrument which is substantially the same or is calculated based on the expected cash flows of the underlying net asset base of the investment.
(iv) Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.
(v) Derivatives
Share options embedded in a convertible note is not closely related to the debt host contract and are separated from the host debt 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) Held for trading
Investments classified as held for trading are measured at fair value with gains or losses recognised in the profit or loss.
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.
(i)
Leases
Leases of property, plant & equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases and
capitalised at inception of the lease at the fair value of the leased property, or if lower, at the present value of the minimum lease payments. Lease
payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.
Leases where the lessor retains substantially all the risks and rewards of ownership of the net asset are classified as operating leases. Payments made
under operating leases (net of incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease.
When assets are leased out under finance leases, the present value of the lease payments is recognised as a lease receivable.
The difference between the gross receivable and the present value of the receivable is recognised as unearned finance income.
Lease income is recognised over the lease term using the net investment method which reflects a constant periodic rate of return.
Lease income from operating leases is recognised in profit or loss on a straight-line basis over the lease term. Initial direct costs incurred in negotiating
operating leases are added to the carrying value of the leased asset and recognised as an expense over the lease term on the same basis as the lease
income.
(j)
Foreign Currency
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 rates ruling at year end. The gains and losses
from conversion of short term balances, whether realised or unrealised, are recognised in profit or loss.
P A G E 4 2
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to the Consolidated Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
1
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(k)
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.
(l)
Borrowings
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.
(m) Employee Benefit Provisions
Salary, wages and annual leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the end of the reporting
period are recognised in other liabilities or provision for employee benefits in respect of employees’ services rendered up to the end of the reporting
period and are measured at amounts expected to be paid when the liabilities are settled.
Long service leave
Liabilities for long service leave are recognised as part of the provision for employee benefits and measure as the present value of expected future
payments to be made in respect of services provided by employees to the end of the reporting period using the projected unit credit method.
Consideration is given to expected future salaries and wages levels, experience of employee departures and period of service.
Expected future payments are discounted using national government bond rates at the end of the reporting period with terms to maturity that match as
close as possible, the estimated future cash outflows.
Retirement benefit obligations
The Group contributes to defined contribution superannuation funds for employees. All funds are accumulation plans where the Group contributed
various percentages of employee gross incomes, the majority of which were as determined by the superannuation guarantee legislation.
Benefits provided are based on accumulated contributions and earnings for each employee. There is no legally enforceable obligation on the Group
to contribute to the superannuation plans other than requirements under the superannuation guarantee legislation. Contributions are recognised as
expenses as they become payable.
(n)
Cash
For the purposes of the statement of cash flows, cash includes cash on hand and at call deposits with banks or financial institutions, net of bank
overdrafts.
(o)
Intangible assets
Brands Names
Expenditure on internally generated brand names are expensed as incurred. Acquired Brand names are stated at cost and are considered to have indefinite
useful lives and are not amortised. The useful life is assessed annually to determine whether events or circumstances continue to support an indefinite
useful life assessment. The carrying value of brand names is reviewed annually for impairment, at the same time every year.
Research and Development
Research costs are expensed as incurred. Development expenditure incurred on an individual project is capitalised if the product or service is technically
feasible, adequate resources are available to complete the project, it is probable that future economic benefits will be generated and expenditure
attributable to the project can be measured reliably. Expenditure capitalised comprises costs of materials, services, direct labour and an appropriate
proportion of overheads. Other development costs are expensed when incurred. Capitalised development expenditure is stated at cost less accumulated
amortisation and any impairment losses and amortised over the period of expected future sales from the related projects which vary from 3 - 5 years. The
carrying value of development costs is reviewed annually when the asset is not yet available for use, or when events or circumstances indicate that the
carrying value may be impaired.
P A G E 4 3
Notes to the Consolidated Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
1
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Patents, Trademarks and Licences
Patents, trademarks and licences have a finite useful life and are carried at cost less accumulated amortisation and impairment losses.
Amortisation is calculated on a straight line basis over the number of years of their expected benefit which ranges from 3 to 10 years.
Goodwill
Goodwill represents the excess of the consideration transferred and the amount of the non-controlling interest in the acquiree over the fair value of
the identifiable assets, liabilities and contingent liabilities. Goodwill is not amortised but is measured at cost less any accumulated impairment losses.
Goodwill is reviewed annually for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying value may be
impaired. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill acquired is allocated to each of the cash-generating units expected to benefit from the combinations 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.
(p)
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 the 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.
(q)
Borrowing costs
All borrowing costs are expensed when incurred.
(r)
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.
(s)
Rounding of Amounts
The parent entity 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.
(t)
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 the
end of the reporting period.
The requirements for paying dividends under Section 254T of the Corporations Act 2011 were amended in June 2010. The old “profits” test has been
deleted and been replaced with a “solvency” test and an “asset” test. Dividends can no longer be paid unless:
(a ) Assets exceed liabilities immediately before the dividend is declared and the excess is sufficient for the payment of dividends; and
(b )
The payment of the dividend is fair and reasonable to the company’s shareholder as a whole; and
(c ) The payment of the dividend does not materially prejudice the company’s ability to pay its creditors.
These new rules apply to all dividends declared on or after the date of Royal Assent of 29 June 2010.
P A G E 4 4
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to the Consolidated Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
1
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(u)
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners 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.
(v)
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.
(w) New Accounting Standards and interpretations not yet adopted
No new accounting standards and interpretations, that are available for early adoption at 30 June 2011, but not yet adopted, will result in any material
change to the financial statements.
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.
Available-for-sale financial assets
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 in the following listed companies were impaired:
Eureka Group Limited
Allied Brands Limited
As a result an impairment loss of $117,000 (2010 $700,000) was taken up in profit or loss on these investment.
The Directors determined that no other listed available-for-sale financial assets were impaired at balance date.
P A G E 4 5
Notes to the Consolidated Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
1
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Investment in Associates
The Group investments in associate companies have been impaired. During the year Frigrite Limited and Intelligent Solar Limited went into administration. The
Group’s investments in these two companies have been written down to nil.
An impairment loss of $4,140,000 (2010 $589,000 refer note 2(d) for disclosure) was taken up in profit or loss on these investments.
Other receivables - Convertible Notes
The Group has reviewed its investments in convertible notes. During the year the companies in which the Group had investments in convertible notes went into
administration. The carrying value of the notes held in two of these companies, Intelligent Solar Limited and Allied Brands Limited, have been written down to
nil. A provision for impairment of $1,322,000 was taken up in profit or loss on these investments.
The Group considers that the notes held in Frigrite Limited will be redeemed in the next financial year and expect a full recovery of the carrying value.
Investment Properties
An independent valuation of all investments properties was undertaken in May 2010. All investment properties have been included in the financial statements
at cost. The independent valuation indicated that the current market value of one property was below cost, as a result an impairment was recognised on the land
& buildings that the Group owns at Arndell Park, New South Wales in the current and 2010 financial years.
An impairment loss of $169,000 (2010 $1,159,000) has been taken up in profit or loss on this property.
Other Receivables
The Group has advanced funds to Intelligent Solar Limited during the year. As this company has been placed in administration the recoverability of these loans is
doubtful. A provision for doubtful debts on this outstanding receivable of $237,000 has been taken up to the income statement.
Deferred Tax Asset
An assessment was made on the recoverability of the deferred tax asset recognised in the accounts. The deferred tax asset has only been recognised to the extent
that there is reasonable certainty of realising future taxable amounts sufficient to use losses incurred.
Capital losses with a tax asset value of $1,315,000 have not been recognised and carried forward as a deferred tax asset.
No impairment has been recognised in respect of goodwill, brand names, plant and equipment for the current financial year.
Refer to note 17 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 Arndell Park, New South Wales which has been marketed for sale for a number of years. In prior years this property was classified
as “Assets classified as held for sale”. Although the property continues to be actively marketed, it is considered appropriate to re-classify this property as non-
current investment property, as there is no certainty that a firm purchase commitment will be highly probable within one year. This reclassification has no profit
or loss impact for the Group.
P A G E 4 6
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
2
REVENUE, OTHER INCOME & EXPENSES FROM OPERATIONS
CONSOLIDATED ENTITY
Note
( c)
(a)
(b)
REVENUE
Sale of goods
Rental income from investment properties
Dividends received - other parties
Interest receivable
OTHER INCOME
Net gain on disposal of investment properties
Net gain on disposal of plant and equipment
Net gain on sale of available-for-sale financial assets
Fair value adjustment on derivatives
Fair value adjustment on conversion of convertible notes
to investment in associated companies
Proceeds from rental property dispute resolution
Foreign currency translation gains
Sundry income
(c)
INTEREST INCOME
Other persons
(d)
SHARE OF PROFIT (LOSS) FROM ASSOCIATES ACCOUNTED
FOR USING THE EQUITY METHOD
Fair value adjustment to carrying value of available-for-sale financial assets
at the time the entities became associates
Impairment to carrying value of associate at year end
Share of after tax profit (loss) from associates accounted for
under the equity method
(e)
EXPENSES
Profit (loss) before income tax includes the following specific expenses:
Amortisation of intangibles
Cost of sales - mining equipment manufacture
Depreciation - investment properties
- plant and equipment
Fair value adjustment on derivatives
Foreign currency translation losses
Impairment - investment properties
Impairment of available-for-sale financial assets - Listed investments
Impairment to carrying value of associates
Impairment of other receivables - convertible notes
Interest paid - other
2011
$000s
6,102
2,146
23
1,589
9,860
1,514
5
10
-
95
1,585
2
42
3,253
1,589
-
-
-
(412)
(412)
48
3,275
339
528
867
76
-
169
117
4,140
1,322
1,418
2010
$000s
4,746
3,109
59
1,158
9,072
2,184
-
1,022
380
-
-
-
308
3,894
1,158
580
(589)
(9)
(675)
(684)
80
3,279
432
486
918
-
23
1,159
740
-
-
1,118
P A G E 4 7
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
2
REVENUE, OTHER INCOME & EXPENSES FROM OPERATIONS (continued)
CONSOLIDATED ENTITY
Note
Doubtful debts - trade receivables
- other receivables
Defined contribution superannuation expense
Employee benefit expenses
Rental expense on operating leases
3
INCOME TAX EXPENSE
(a) The prima facie tax payable/(benefit) on the (loss)/profit before income tax
is reconciled to the income tax expense as follows:
(Loss) Profit before tax
Prima facie tax payable/(benefit) at 30% (2010: 30%)
Fully franked dividend received
Share of after tax loss of associate companies
Research & Development concession
Building allowance
Sundry items
(Over) / under provision relating to prior year
Tax losses not recognised as own asset
Income tax expense
The applicable weighted average effective tax rates are as follows:
(b) The components of tax expense comprise
Current tax
Deferred tax
(Over) / under provision in respect of prior years
(c) Deferred tax recognised directly in equity through Available-for-sale Financial
Asset Reserve relating to valuing investments at fair value
2011
$000s
-
237
208
1,921
160
(1,691)
(507)
(7)
123
(30)
(54)
-
(16)
1,315
824
n/a
511
329
(16)
824
41
2010
$000s
12
1,249
207
1,706
114
1,246
374
(18)
203
(30)
(64)
3
16
-
484
39%
621
(153)
16
484
15
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.
P A G E 4 8
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
4
AUDITOR’S REMUNERATION
CONSOLIDATED ENTITY
Remuneration of the auditor of the group and parent entity for :
- auditing or reviewing the financial report
- non audit services ( accounting / technical advice )
5
KEY MANAGEMENT PERSONNEL DISCLOSURES
(a)
Key management personnel disclosures
Short-term benefits
Post-employment benefits
Termination benefits
Note
2011
$000s
75,573
-
75,573
643,220
-
-
643,220
2010
$000s
77,085
-
77,085
665,698
50,000
359,919
1,075,617
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.
(c)
Shareholdings
Number of Shares held by Parent Entity Directors and other key management personnel
Parent Entity Directors
Mr C.F. Ryan (retired 1 August 2011)
Mr G.R. Molloy
Mr R.M. Beath
Mr J.I. Wowk
Mr G. Webb (appointed 1 August 2011)
Other Key Management Personnel
Mr D.A. Hoff
Mr R.J. Nicholls
Balance
1.7.10
Received as
Remuneration
Options
Exercised
Net Change
Other
Balance
30.6.11
500,000
10,987,997
42,821
212,302
-
11,743,120
156,960
27,000
183,960
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
947,989
-
-
6,618,320
500,000
11,935,986
42,821
212,302
6,618,320
7,566,309
19,309,429
-
(27,000)
(27,000)
156,960
-
156,960
P A G E 4 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
5
KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)
Parent Entity Directors
Mr C.F. Ryan
Mr G.R. Molloy
Mr R.M. Beath
Mr J.I. Wowk
Mr D.A. Hoff (retired 7 September 2009)
Other Key Management Personnel
Mr D.A. Hoff
Mr R.J. Nicholls
Balance
1.7.09
Received as
Remuneration
Options
Exercised
Net Change
Other
Balance
30.6.10
500,000
10,245,358
42,821
187,302
156,960
11,132,441
-
27,000
27,000
-
-
-
-
-
-
-
-
- -
-
-
-
-
-
-
-
-
-
-
742,639
-
25,000
(156,960)
500,000
10,987,997
42,821
212,302
-
610,679
11,743,120
156,960
-
156,960
156,960
27,000
183,960
(d)
Loans
There were no loans or advances to parent entity directors, executives and key management personnel in the current financial or previous financial years.
(e) Other transactions with directors
Refer to note 29 for further details of transactions with directors and director related entities.
Note
CONSOLIDATED ENTITY
2011
$000s
2010
$000s
6
DIVIDENDS
(a)
Dividends paid
Final ordinary dividend of 1.00c per share for 2010 year
- 100% franked at 30% tax rate( prior year 1.00c per share )
Interim ordinary dividend of 1.00c per share for 2011 year
- 100% franked at 30% tax rate(prior year 1.50c per share - 100% franked)
577
551
1,128
580
870
1,450
(b)
Dividends declared after balance date
At a meeting of Directors held on 7 September 2011 it was resolved that Final ordinary dividend
of 1.5 cents per share would be paid on 16 December 2011.
The extent to which the dividend is franked is yet to be determined.
This dividend will amount to $807,000 and has not been included in the financial statements
as it was declared after balance date.
(c)
Franked dividends
Franking credits available for subsequent financial years based
on a tax rate of 30% (2010 - 30%)
P A G E 5 0
4,365
4,054
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
6
DIVIDENDS (continued)
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 Group satisfies the relevant tests under the Corporations Act 2011 to pay a dividend, however, the extent to which the final dividend will be franked
will depend upon the earnings of the Group during the first half of 2012 and the final outcome as regards the position adopted by the Australian Taxation
Office in a draft Fact Sheet issued on 21 June 2011.
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.
Note
CONSOLIDATED ENTITY
2011
$000s
2010
$000s
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
(b) Weighted average number of ordinary shares outstanding
during the year used in calculation of basic EPS
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
(4.5)
(4.5)
(2,515)
(2,515)
No.
56,398,923
-
1.3
1.3
762
762
No.
58,006,650
-
56,398,923
58,006,650
P A G E 5 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
8
PARENT ENTITY INFORMATION
Note
CONSOLIDATED ENTITY
2011
$000s
2010
$000s
The following details information related to the parent entity, PPK Group Limited at 30 June 2011. The information presented here has been prepared using
consistent accounting policies as presented in Note 1.
Current assets
Non-current assets
Total Assets
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Contributed equity
Reserves
(Accumulated Losses)/Retained earnings
Total Equity
Profit (loss) for the year
Other comprehensive income for the year
Total comprehensive income (loss) for the year
CURRENT ASSETS
9
CASH AND CASH EQUIVALENTS
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.
Short-term bank deposits are funds held at call which are interest bearing.
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
19
P A G E 5 2
38,979
39,001
77,980
29,742
18,505
48,247
29,733
29,782
8
(57)
29,733
(2,692)
-
(2,692)
24
9,657
9,681
9,681
(1,074)
8,607
35,259
42,004
77,263
24,810
18,561
43,371
33,892
31,249
8
2,635
33,892
(695)
-
(695)
23
-
23
23
(2,944)
(2,921)
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
10
TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Less: Allowance for doubtful debts
Other Receivables
Less: Allowance for doubtful debts
Loans and receivables
- other loans - secured
- convertible notes
Non-Current
Loans and receivables
- other loans - secured
- convertible notes
Other Non current Assets of continuing operations
(a)
Trade Receivables
Note
(a)
(b)
(c )
(d)
(c )
(d)
CONSOLIDATED ENTITY
2011
$000s
2010
$000s
1,982
-
1,982
622
(237)
385
-
2,000
2,000
4,367
5,166
-
5,166
946
-
946
1,751
(1,249
502
4,872
833
5,705
7,153
4,498
3,119
7,617
Current trade receivables are non-interest bearing and are generally 30 day terms. A provision for doubtful debts 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 doubtful debts has been raised for the loans in other receivables
where it is considered that there is some doubt as to whether the amounts will be recovered.
(c)
Other loans
Other loans are funds advanced to the PPK Willoughby Funding Unit Trust during the year. The amounts are secured by a registered first mortgage over
property owned by PPK Willoughby Pty Ltd as trustee for The Willoughby Market Gardens Purchaser Unit Trust and a first ranking fixed and floating
charge over that entity
The current loan had an interest rate of 13.95% per annum calculated daily and compounded monthly with principal and interest. The loan was fully
repaid in November 2010.
The non-current loan has interest rate of 15% per annum calculated daily and compounded annually. The loan is for a maximum period of 4 years with
principal and interest due for repayment in second half of the 2014 financial year.
P A G E 5 3
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
10
TRADE AND OTHER RECEIVABLES (continued)
Note
CONSOLIDATED ENTITY
2011
$000s
2010
$000s
Movement in balance of loan to PPK Willoughby Funding Unit Trust - current
Opening Balance
Funds advanced
Fee due for providing finance
Less principal and interest repaid
Interest revenue added to carrying value
Movement in balance of loan to PPK Willoughby Funding Unit Trust - non-current
Opening Balance
Funds advanced
Less principal and interest repaid
Interest revenue added to carrying value
(d)
Convertible notes
4,872
-
-
(5,080)
(208)
208
-
4,498
-
-
4,498
668
5,166
-
4,500
68
-
4,568
304
4,872
-
4,200
-
4,200
298
4,498
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. Interest is received on the convertible notes at a fixed rate each
quarter.
A provision for impairment of $1,322,000 has been made against the carrying value of these notes as there is considerable doubt as to the recoverability
of the investments in convertible notes held in Allied Brands Limited and Intelligent Solar Limited. No interest was received on these notes during the
year.
The convertible notes held in Frigrite Limited have been re classified as a current asset as it is expected that they will be redeemed in the 2012 financial
year and full recovery will be achieved.
Interest was received on the Frigrite Limited convertible notes to 31 December 2010 and the discount of the carrying value to the face value of these
notes was included as interest revenue on the notes during the year. The weighted average interest rate for the year on these notes was 10.7% (2010
12.53%)
P A G E 5 4
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
10
TRADE AND OTHER RECEIVABLES (continued)
Note
CONSOLIDATED ENTITY
2011
$000s
2010
$000s
Movement in balance of convertible notes in listed companies
Opening Balance
Investment in convertible note
Less part of cost assigned to cost of embedded option
Less conversion into shares
Interest revenue added to carrying value
Less provision for impairment
Current - repayment due within 12 months
Non-current - repayment due after 12 months
Provision for Impairment of Receivables
3,952
-
-
(727)
3,225
97
3,322
(1,322)
2,000
2,000
-
2,000
2,331
2,000
(123)
(352)
3,856
96
3,952
-
3,952
833
3,119
3,952
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:
Consolidated Group 2011
Current
Trade receivables
Other receivables
Convertible notes
Consolidated Group 2010
Current
Trade receivables
Other receivables
Convertible notes
Opening
balance
Charge for
the year
Amounts
written off
Closing
balance
-
1,249
-
1,249
32
626
-
658
-
237
1,322
1,559
12
1,249
-
1,261
-
(1,249)
-
(1,249)
(44)
(626)
-
(670)
-
237
1,322
1,559
-
1,249
-
1,249
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.
P A G E 5 5
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
10
TRADE AND OTHER RECEIVABLES (continued)
Note
CONSOLIDATED ENTITY
2011
$000s
2010
$000s
Trade receivables aging 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
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.
Other receivables aging 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.
11
INVENTORIES
On hand
Finished goods at cost
Finished goods at net realisable value
Work in Progress
Raw materials
Refer to note 22 for details of inventory pledged as security
12 OTHER CURRENT ASSETS
Prepayments
P A G E 5 6
1,506
185
166
125
1,982
231
119
3
32
385
804
79
667
263
1,813
395
395
578
207
103
58
946
307
171
24
-
502
642
84
540
243
1,509
410
410
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
NON-CURRENT ASSETS
13
FINANCIAL ASSETS
(a)
Investments in Associated companies - equity accounted
Listed Investments - Summary of movement in carrying value
Opening Balance
Transfer from available-for-sale financial assets
Additions at cost
Convertible notes converted to shares
Interest due on convertible notes converted to shares
Fair value adjustment to shares on conversion of notes - to profit and loss
Fair value adjustment to the carrying value of available-for-sale financial assets
at the time the entities became associates - to profit and loss
Fair value adjustment to the carrying value of available-for-sale financial assets
at the time the entities became associates - to equity
Share of after tax (loss) from associates accounted for under the equity method
Impairment of carrying value of associates
Dividends received from associates
Note
CONSOLIDATED ENTITY
2011
$000s
2010
$000s
3,692
-
20
727
18
95
-
-
(412)
(4,140)
-
-
-
1,463
2,830
-
-
-
580
215
(675)
(589)
(132)
3,692
Information relating to associates is set out below
Name of Company
OWNERSHIP INTEREST
2010
2011
%
%
CONSOLIDATED ENTITY
2010
$000s
2011
$000s
Listed
Frigrite Limited
Intelligent Solar Limited (formerly Cool or Cosy Limited)
27.92%
26.39%
33.96%
23.42%
22.86%
22.86%
Unlisted entities
PPK Willoughby Funding Unit Trust
(40 units of $1 each are held)
Total listed and unlisted entities
Fair value of listed investments in associates
Frigrite Limited
Intelligent Solar Limited
Share of associates’ profit or (loss)
(Loss) before income tax
Income tax benefit
(Loss) after income tax
-
-
-
-
-
-
-
-
-
(412)
-
(412)
2,693
999
3,692
-
-
3,692
3,207
999
4,206
(696)
21
(675)
P A G E 5 7
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
13
FINANCIAL ASSETS (continued)
Summarised financial information of associates
Note
CONSOLIDATED ENTITY
2011
$000s
2010
$000s
Frigrite Limited
Assets
Liabilities
Equity
Revenues
(Loss) before income tax
Income tax benefit
(Loss) after income tax
Contingent liabilities of associate
Share incurred jointly with other investors
Contingent liabilities relating to liabilities of the associates
for which the company is severally liable
Intelligent Solar Limited
Assets
Liabilities
Equity
Revenues
(Loss) Profit before income tax
Income tax benefit
Profit after income tax
Contingent liabilities of associate
Share incurred jointly with other investors
Contingent liabilities relating to liabilities of the associates
for which the company is severally liable
-
-
-
-
-
-
-
-
-
-
-
-
-
38,849
29,217
9,632
130,856
(1,563)
489
(1,074)
-
-
-
5,250
5,280
(30)
Half year ended
31 Dec 2010
Full year ended
30 June 2010
710
(2,468)
29
(2,439)
-
-
-
11,316
1,146
33
1,179
-
-
-
Frigrite Limited was placed in administration in January 2011. No financial information is available for the 2011 financial year
Intelligent Solar Limited was placed in administration in July 2011, no financial information has been available since the December 2010 half year accounts
were issued. Information disclosed in this note is based on the announced results of Intelligent Solar Limited for the half year ended 31 December 2010 only.
P A G E 5 8
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
13
FINANCIAL ASSETS (continued)
CONSOLIDATED ENTITY
PPK Willoughby Funding Unit Trust
Assets
Liabilities
Equity
Revenues
Profit or (loss) before income tax
Income tax expense or (credit)
Profit or (loss) after income tax
Contingent liabilities of associate
Share incurred jointly with other investors
Contingent liabilities relating to liabilities of the associates
for which the company is severally liable
Note
2011
$000s
40,373
40,397
(24)
4
(23)
-
(23)
-
-
-
2010
$000s
31,203
31,205
(2)
-
(2)
-
(2)
-
-
-
An independent valuation of the land owned by the PPK Willoughby Funding Unit Trust group in August 2010 has valued that land “as is” at $32.6 million.
(b)
Available-for-sale financial assets
( i ) Listed Investments - at fair value
- Shares in listed corporations
Opening Balance
Transfer to investments in associated companies
Additions at cost
Conversion of convertible notes into listed investments
Exercise of options held
Fair Value adjustments
Impairment
Disposals
1,105
-
-
-
140
150
(117)
(533)
745
Listed investments are recorded at fair value based on the ASX closing price at the 30 June of the relevant financial period.
( ii ) Unlisted Investments - at cost less impairment
- Shares and units held in other corporations
Cost
Impairment
Unlisted investments are recorded at cost less impairment which represents fair value at nil.
( iii ) Total Listed & Unlisted Investments
249
(249)
-
745
2,411
(1,463)
729
400
1,366
(22)
(740)
(1,576)
1,105
249
(249)
-
1,105
P A G E 5 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
13
FINANCIAL ASSETS (continued)
Gains or losses arising from changes in the fair value of available-for-sale financial assets are initially recognised directly in equity through in other
comprehensive income 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 other comprehensive income and recognised in profit
or loss. Any subsequent difference between the impaired value and the fair value will be recognised in equity through the reserve.
Impairment losses recognised in the profit or loss on equity instruments classified as available-for-sale are not reversed through profit or loss.
14
INVESTMENT PROPERTIES
CONSOLIDATED ENTITY
Note
2011
$000s
2010
$000s
(a)
Non current
Freehold land & buildings - at cost
Land
Buildings
Less: Accumulated depreciation
Less: Provision for impairment
Total Investment Properties
(b)
Current - classified assets held for sale
Freehold land & buildings - at cost
Land
Buildings
Less: Accumulated depreciation
2010 Financial Year
Land at Arndell Park and Land & Buildings at Kirrawee were being
marketed for sale and have been classified as assets held for sale.
Reconciliations
Non-Current
Balance at the beginning of the year
Expenditure subsequent to acquisition
Disposals
Depreciation expense
Impairment expense
P A G E 6 0
13,683
15,131
(3,000)
12,131
25,814
(1,328)
24,486
-
-
-
-
-
24,248
14
-
(310)
(169)
23,783
12,980
15,117
(2,690)
12,427
25,407
(1,159)
24,248
3,053
4,621
(571)
4,050
7,103
35,137
25
(2,923)
(432)
(1,159)
30,648
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
14
INVESTMENT PROPERTIES (continued)
CONSOLIDATED ENTITY
Note
Less transferred from /(to) Classified as assets held for sale
Land & buildings
Total investment properties of continuing operations
Current - assets classified as held for sale
Balance at the beginning of the year
Transfer (to) / from non-current investment properties
Disposals
Depreciation expense
The following amounts have been recognised in the statement of comprehensive income
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
2011
$000s
703
24,486
7,103
(703)
(6,371)
(29)
-
2,146
1,000
71
2010
$000s
(6,400)
24,248
703
6,400
-
-
7,103
3,109
2,018
337
The Kirrawee, NSW, investment property was sold for $8.085 million resulting in profit on sale over it’s carrying value of $1.514 million.
( 2010 - The Virginia, Queensland, investment property was sold for $5.166 million resulting in profit on sale over it’s carrying value of $2.184 million).
An independent valuation of Investment Properties was undertaken in May 2010.
The independent valuation valued the investment properties at $30.0 million.
Capital gains tax that could be paid if the Investment Properties were sold at balance date at the independent valuation is $1.13 million.
These valuations have been reflected in the accounts to the extent that the value of one of the properties was considered impaired.
Non-current assets pledged as security
Refer to note 22(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 “Investment property” expenditure in the profit or loss, during the year the a provision for impairment of
$169,000 (2010 $1.159 million) was made against the carrying value of the investment property at Arndell Park, NSW.
Note
CONSOLIDATED ENTITY
2011
$000s
2010
$000s
Leases as Lessor
The investments properties are leased to tenants under long term operating leases
with rentals payable monthly.
-
-
-
not later than 1 year
later than 1 year but not
later than 5 years
later than 5 years
1,623
3,368
-
4,991
1,751
990
-
2,741
P A G E 6 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
15 OTHER PROPERTY PLANT AND EQUIPMENT
CONSOLIDATED ENTITY
Note
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
Reconciliations
Reconciliations of the carrying amounts of each class of plant & equipment are set out below.
2011
$000s
486
(240)
246
2,905
(1,763)
1,142
24
1,412
Leasehold
Plant &
Improvements Equipment
$’000
$’000
Capital Works
In Progress
$’000
239
43
-
19
(55)
246
250
28
-
-
-
(39)
239
1,342
475
(202)
(473)
1,142
1,753
29
194
(60)
(127)
(447)
1,342
43
-
-
(19)
-
24
24
19
-
-
-
-
43
Consolidated - 2011
Carrying amount at start of year
Additions
Manufactured plant & equipment for hire
Disposals
Transfers
Depreciation & Amortisation expense
Carrying amount at end of year
Consolidated - 2010
Carrying amount at start of year
Additions
Manufactured plant & equipment for hire
Disposals
Transfers to inventories
Depreciation & Amortisation expense
P A G E 6 2
2010
$000s
424
(185)
239
2,873
(1,531)
1,342
43
1,624
Total
$’000
1,624
475
43
(202)
-
(528)
1,412
2,027
76
194
(60)
(127)
(486)
1,624
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
16
TAX
(a)
Assets
Note
CONSOLIDATED ENTITY
2011
$000s
2010
$000s
Deferred tax assets comprise temporary differences attributable to:
Amounts recognised in profit and loss
Doubtful Debts
Employee benefits
Building depreciation
Fair value adjustment on derivatives
Impairment of investments
Realised capital losses
Inventory
s40-880 Black hole expenses
Other
Movements
Opening balance
Credit/(charged) to profit or loss
Prior year adjustment
Assessment was made on the recoverability of the deferred tax asset recognised in the accounts.
The deferred tax asset has only been recognised to the extent that there is reasonable certainty
of realising capital profits. Unrealised capital losses with a tax asset value of $1,315,000 have
not been recognised and carried forward as a deferred tax asset.
(b)
Liabilities
CURRENT
Income Tax provision
NON-CURRENT
Deferred tax liability comprises temporary differences attributable to:
Amounts recognised in profit and loss
Rent receivable
Plant and equipment depreciation
Other
471
95
440
-
164
448
3
-
25
1,646
2,036
(390)
-
1,646
375
79
527
88
938
-
3
2
24
2,036
2,200
(124)
(40)
2,036
122
458
29
(44)
2
(13)
33
4
11
48
P A G E 6 3
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
16
TAX (continued)
Amounts recognised in equity
Fair value adjustment of available-for-sale financial assets
Deferred tax liability
Movements
Opening balance
(Credit)/charged to profit or loss
(Credit)/charged to equity
Prior year adjustment
17
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
Amortisation charge
(Amortisation charges are included in Cost of Goods Sold and
Administration expenses in the profit or loss)
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 4
Note
CONSOLIDATED ENTITY
2011
$000s
2010
$000s
48
48
35
55
(61)
41
-
35
636
(546)
90
155
497
742
127
11
(48)
90
155
-
155
497
-
497
7
7
55
318
(278)
15
-
55
652
(525)
127
155
497
779
205
2
(80)
127
155
-
155
497
-
497
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
17
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 profit or loss.
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 profit or loss.
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 2011
Mining Equipment Manufacturing
Year ended 30 June 2010
Mining Equipment Manufacturing
Brand
Names
$’000
497
497
Goodwill
$’000
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
2011
Growth
Rate
5.00%
Discount
Rate
12.50%
2010
Growth
Rate
3.50%
Discount
Rate
12.50%
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 2011. If a discount rate of 90.0% was used
instead of 12.5%, and if sales growth was limited to the inflation rate of 3.0% instead of 5.0%, the estimated recoverable amount of the intangible assets would
equal the carrying value.
P A G E 6 5
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
18 DERIVATIVES
CONSOLIDATED ENTITY
Non-Current Assets
Options in listed companies at fair value
Options in listed companies
Opening Balance
Additions at cost
Fair Value adjustments
Options exercised
Note
2011
$000s
-
128
-
(76)
(52)
-
2010
$000s
128
288
395
380
(935)
128
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 of the option is
significantly above theJune 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.
Details of options held are as follows:
Number
Exercise
Price
Option
Expiry date
Within 1 Year 1 to 2 years
$000s
$000s
2 to 5 years
$000s
Total
$000s
2011
Company
Frigrite Ltd
Intelligent Solar Ltd
2010
Company
Alchemy Ltd
Frigrite Ltd
Allied Brands Ltd
Intelligent Solar Ltd
Intelligent Solar Ltd
Unlisted
Unlisted
10,000,000
3,300,000
0.20
0.15
20-Aug-12
17-Dec-11
Listed
Unlisted
Listed
Unlisted
Unlisted
350,000
10,000,000
2,136,007
6,250,000
3,300,000
0.25
0.20
0.60
0.15
0.15
31-Aug-10
20-Aug-12
28-Dec-10
16-Aug-10
17-Dec-11
-
-
-
52
76
-
-
-
128
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
52
76
-
-
-
128
Derivative Instruments used by the Group
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 profit or loss.
P A G E 6 6
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
CURRENT LIABILITIES
19 TRADE AND OTHER PAYABLES
Trade payables
Sundry payables and accruals
Payables of continuing operations
Note
20
INTEREST BEARING LIABILITIES
Bank overdraft -secured
20(a)
Interest bearing liabilities of continuing operations
(a) Bank overdraft and bank loans - secured
The bank overdraft and bank loans 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 22
21 PROVISIONS
Current
Annual leave
Long service leave
Non Current
Long service leave
Total Provisions
CONSOLIDATED ENTITY
2011
$000s
543
82
625
1,074
1,074
153
94
247
68
315
2010
$000s
328
85
413
2,944
2,944
121
94
215
48
263
Annual leave and current long service leave comprise amounts payable that are vested and could be expected to be settled within 12 months of the end of the
reporting period.
Non current long service leave comprise amounts that are not vested at the end of the reporting period and the amount and timing of the payments to be made
when leave is taken is uncertain. Refer accounting policy Note 1(m) for more detail.
P A G E 6 7
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
NON-CURRENT LIABILITIES
22
INTEREST BEARING LIABILITIES
CONSOLIDATED ENTITY
Note
14(a)
14(b)
14(a)
2011
$000s
18,500
18,500
1,074
18,500
19,574
24,486
-
-
5,166
745
-
1,412
742
-
32,551
9,681
2,000
2,367
1,813
395
16,256
48,807
2010
$000s
18,500
18,500
2,944
18,500
21,444
11,906
7,103
12,342
7,617
1,105
3,692
1,624
779
128
46,296
23
-
1,448
1,509
410
3,390
49,686
Bank Loans - Secured
Interest bearing liabilities
(a)
Secured liabilities
Total secured liabilities ( current and non-current ) are:
Bank overdrafts
Bank loans
Bank overdrafts and loans are secured as noted in note 20 above.
(b) Assets pledged as security
The carrying amounts of non-current assets pledged as security are:
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
Investments in associated companies
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
P A G E 6 8
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
22
INTEREST BEARING LIABILITIES (continued)
CONSOLIDATED ENTITY
Note
2011
$000s
2010
$000s
The total financial assets included in the above pledged as security for liabilities
is $19,959,000 ( 2010 $10,913,000 )
(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
Master asset finance facility
Not utilised at balance date
Bank Overdraft
Bank Loans
Master asset finance facility
Utilised at balance date
Bank Overdraft
Bank Loans
Master asset finance facility
The major facilities are summarised as follows:
Banking overdrafts
3,000
20,840
1,500
25,340
1,926
2,340
1,500
5,766
1,074
18,500
-
19,574
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
$20,840,000 variable interest rate facilities provided by the National Australia Bank Ltd
Further details on the banking facilities with the NAB are included in note 25( c).
Banking facilities with the NAB are subject to annual review to ensure compliance with the security granted, in line with normal banking practice.
The bank does not have the right to demand immediate repayment unless there has been an occurrence of an event of default.
Interest rates on facilities range from 7.17% to 8.83% inclusive of bank margins.
3,000
23,080
-
26,080
56
4,580
-
4,6336
2,944
18,500
-
21,444
P A G E 6 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
SHAREHOLDERS’ EQUITY
23
CONTRIBUTED EQUITY
Note
PAID-UP CAPITAL
53,812,779 (2010 58,006,650) ordinary shares fully paid
Movements in ordinary share capital
Balance at the beginning of the financial year
Shares repurchased under approved buy back scheme
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.
Movements in number of ordinary shares
Balance at the beginning of the financial year
Shares repurchased under approved buy back scheme
Capital Risk Management
CONSOLIDATED ENTITY
2011
$000s
29,782
31,249
(1,467)
29,782
2010
$000s
31,249
31,249
-
31,249
No.
58,006,650
(4,193,871)
53,812,779
No.
58,006,650
-
58,006,650
The Group considers its capital to comprise its ordinary share capital, share premium and accumulated (losses) / 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% (2010: 20% - 50%). The Group’s gearing ratio at the balance sheet date is
shown below :
CONSOLIDATED ENTITY
Note
2011
$000s
19,574
(9,681)
9,893
29,660
39,553
25%
2010
$000s
21,444
(23)
21,421
34,770
56,191
38%
Gearing ratios
Total borrowings
less Cash and cash equivalents
Net debt
Total equity
Total capital
Gearing Ratio
P A G E 7 0
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
23
CONTRIBUTED EQUITY (continued)
The decrease in gearing is a result of the Group’s sale of an investment property and repayment of loans and receivables during the year. 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.
24 RESERVES
CONSOLIDATED ENTITY
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
2011
$000s
114
8
122
8
8
16
150
(45)
(10)
3
114
2010
$000s
16
8
24
8
8
(17)
194
(58)
(147)
44
16
The available-for-sale financial assets reserves carries fair value adjustments made to available-for-sale financial assets which are recognised in other
comprehensive income.
When the available-for-sale financial assets is either sold or considered impaired the amount held in this reserve is recognised in the profit or loss.
P A G E 7 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
25
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
Fixed Interest Rate Maturing
Non-Interest
Bearing
$000s
1 to
5 Years
$000s
Within
1 Year
$000s
Total
$000s
2,367
5,166
2,000
9,533
9,681
745
-
-
10
10
10
9
13b
13a
18
-
-
-
9,657
-
-
-
-
-
2,000
2,000
-
-
-
-
-
5,166
-
5,166
-
-
-
-
2,367
-
2,367
24
745
-
-
9,657
2,000
5,166
3,136
19,959
20
22(a)
19
1,074
18,500
-
19,574
10
10
10
10
9
13b
13a
18
-
-
-
-
-
-
-
-
-
-
2,944
18,500
-
-
21,444
-
-
-
-
-
4,872
-
833
5,705
-
-
-
-
-
-
-
-
-
-
4,498
3,119
7,617
-
-
-
-
5,705
7,617
-
-
-
-
-
-
-
-
-
-
-
-
625
625
1,448
-
-
1,448
23
1,105
3,692
128
6,396
-
-
413
-
413
1,074
18,500
625
20,199
1,448
4,872
4,498
3,952
14,770
23
1,105
3,692
128
19,718
2,944
18,500
413
-
21,857
0.0%
15.0%
10.7%
5.25%
0.0%
0.0%
0.0%
8.72%
7.17%
0.0%
0.0%
14.0%
15.0%
12.5%
0.0%
0.0%
0.0%
0.0%
Consolidated 2011
Financial Assets
Receivables
Loans receivable
Convertible notes
Loans and receivables
Cash and cash equivalents
Available-for-sale financial assets
Investments in associated companies
Financial assets at fair value through profit
or loss - held for trading (derivatives)
Total financial assets
Financial Liabilities
Bank Overdrafts
Bank Loans
Trade & Other Payables
Total financial liabilities at amortised cost
Consolidated 2010
Financial Assets
Receivables
Loans receivable
Loans receivable
Convertible notes
Loans and receivables
Cash
Available-for-sale financial assets
Investments in associated companies
Financial assets at fair value through profit
or loss - held for trading (derivatives)
Total financial assets
Financial Liabilities
Bank Overdrafts
Bank Loans
Trade & Other Payables
Lease & Hire Purchase Liabilities
Total financial liabilities at amortised cost
P A G E 7 2
7.59%
6.10%
0.0%
20
22(a)
19
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
25
FINANCIAL RISK MANAGEMENT (continued)
Fair Value
The carrying values of financial assets and liabilities listed above approximate their fair value except for non current loans receivable which have a fair value of
$4,914,000 (2010 $4,083,000).
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:
Hierarchy
The following tables classify financial instruments recognised in the statement of financial position of the group according to the hierarchy stipulated in AASB7
as follows:
- Level 1 - the instrument has quoted prices (unadjusted) in active markets for identical assets or liabilities;
- Level 2 - a valuation technique is used using inputs other than quoted prices within Level 1 that are observable for financial instruments, either directly (i.e. as
prices), or indirectly (i.e. derived from prices); or
- Level 3 - a valuation technique is used using inputs that are not based on observable market data (unobservable inputs).
Assets
Group 2011
Fair value through profit or loss
Derivatives
Available-for-sale financial assets
Listed equity securities
Unlisted equity securities
Group 2010
Fair value through profit or loss
Derivatives
Available-for-sale financial assets
Listed equity securities
Unlisted equity securities
Financial risk Management
Level 1
Level 2
Level 3
Total
-
745
-
745
52
1,105
-
1,157
-
-
-
-
76
-
-
76
-
-
-
-
-
-
-
-
-
745
-
745
128
1,105
-
1,233
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.
P A G E 7 3
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
25
FINANCIAL RISK MANAGEMENT (continued)
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 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 fixed interest financial liabilities and other receivables,
it does not impact the Group profit after tax or equity as these financial liabilities and other receivables are carried at amortised cost and not 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 profit after
tax.
Sensitivity disclosure analysis
The Group’s exposure to its floating interest rate financial assets and liabilities is as follows:
CONSOLIDATED ENTITY
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
2011
$000s
9,657
-
9,657
1,074
18,500
19,574
(9,917)
2010
$000s
-
-
-
2,944
18,500
21,444
(21,444)
(69)
69
(150)
150
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 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 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 profit or loss.
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.
P A G E 7 4
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
25
FINANCIAL RISK MANAGEMENT (continued)
However when there is objective evidence of impairment of these unlisted investments, such impairment losses are recognised in profit or loss.
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 derivatives 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.
The group’s portfolio of investments in listed companies is concentrated in small number of 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.
Sensitivity disclosure analysis
The Group’s exposure to equity price fluctuations on the fair value of its available-for-sale financial assets and derivatives is as follows:
CONSOLIDATED ENTITY
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 equity price risk based
on it’s 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
2011
$000s
745
-
745
5
(5)
48
(48)
2010
$000s
1,105
128
1,233
14
(14)
143
(143)
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 31% (2010 33%) is in export sales, all sales from 1 January 2009 are designated in AUD thus limiting the
currency risk exposure.
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 (if any) 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 5
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
25
FINANCIAL RISK MANAGEMENT (continued)
Note
CONSOLIDATED ENTITY
2011
$000s
2010
$000s
Sensitivity disclosure analysis
The Group’s exposure to currency fluctuations on its USD assets and liabilities
at year end is as follows:
Financial Assets
Cash and cash equivalents
Trade receivables
Financial Liabilities
Other payables
Net exposure
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%
13
-
13
-
13
(1)
1
16
-
16
-
16
(2)
2
(b)
Credit Risk
The Group’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 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 the 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 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
Dandenong property 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 bank guarantee.
Loans receivable from the associate entity PPK Willoughby Funding Unit Trust are secured by a registered first mortgage over property owned by that
entity.
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 10 for detail the Group’s trade and other receivables.
The group’s exposure to credit risk at balance date by country of loans and receivables is as follows:
CONSOLIDATED ENTITY
Loans and receivables by country
Australia
United States of America
United Kingdom
Germany
Indonesia
Liechtenstein
New Zealand
P A G E 7 6
Note
2011
$000s
9,207
204
100
-
-
17
5
9,533
2010
$000s
14,401
204
142
5
2
-
16
14,770
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
25
FINANCIAL RISK MANAGEMENT (continued)
The Group’s exposure to credit risk at balance date by industry of loans
and receivables is as follows:
Note
CONSOLIDATED ENTITY
2011
$000s
2010
$000s
Loans and receivables by industry
Property development
Plastic Packaging
Mining Equipment
Insulation and air-conditioning
Retail franchising
Manufacturing
Property and investing
(c)
Liquidity risk
5,166
87
1,982
-
-
2,188
110
9,533
9,370
349
946
1,236
852
1,997
20
14,770
Liquidity risk is the risk that the Group 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 Group’s financing facilities are set-out in note 22.
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 2011, with the facilities requiring renewal on 30 November 2011,
30 November 2012 and 30 November 2013.
Bank overdraft facility is provided by the NAB with the current facility expiring on 30 November 2011.
Bank loans are provided by the NAB with the current facility expiring on 30 November 2012 and 30 November 2013. A $2,760,000 facility expires on 30
November 2012, $500,000 of this facility is currently used. A $18,080,000 facility expires on 30 November 2013, $18,000,000 of this facility is currently
used.
The renewal dates that were applicable at the end of the reporting period have been used for disclosure of maturity dates of bank overdrafts and loans.
Even though the facilities are subject to an annual review it is considered more appropriate to use the renewal dates, as there is no reason to believe that
the facilities will be altered by the bank at the time of annual review, as the Group satisfies its banking covenants.
P A G E 7 7
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
25
FINANCIAL RISK MANAGEMENT (continued)
Carrying
amount
< 6 months
6 - 12 months 1 - 3 years
> 3 years Contractual
Cash flows
Consolidated 2011
Financial Liabilities (current & non-current)
Trade & Other Payables
Bank Loans & overdrafts
625
19,574
625
1,767
-
654
-
20,319
Total Financial Liabilities
20,199
2,392
654
20,319
Consolidated 2010
Financial Liabilities (current & non-current)
Trade & Other Payables
Bank Loans & overdrafts
Hire Purchase Liabilities
413
21,444
413
3,625
Total Financial Liabilities
21,857
4,038
-
567
-
567
-
18,972
-
18,972
-
-
-
-
-
-
625
22,740
23,365
413
23,164
-
23,577
26
LEASE COMMITMENTS
(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
Note
CONSOLIDATED ENTITY
2011
$000s
2010
$000s
117
15
-
132
82
13
-
95
The Group leases premises in Nowra and Sutherland under non cancellable operating leases. The terminating date of the leases is 31 January 2012 and 31
October 2012. The Group has an option to renew the lease for the Sutherland premises, expiring in October 2012, for a further period of 2 years. There is no
option for renewal of the leases expiring on the Nowra premises.
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.
27
CONTINGENT LIABILITIES
Group
Cross guarantees of the Groups banking and finance facilities totalling $25,340,000 (2010 $26,080,000) of which $19,574,000 (2010 $21,444,000) was drawn
at balance date.
P A G E 7 8
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
28
SEGMENT INFORMATION
The Group has adopted AASB 8 Operating Segments from 1 July 2009 whereby segment information is presented using a “management approach” i.e. segment
information is provided on the same basis as information used for internal reporting purposes by the chief operating decision makers. There has been no changes
to the reporting segments following the amendments to the standard.
Information regarding segment assets is not provided to the Directors, segment assets therefore have not been disclosed.
Operating segments have been determined on the basis of reports reviewed by the Directors. The Directors are considered to be the chief operating
decision makers of the group. The segments are as follows:
-
-
The Investment Property Segment owns the properties from which the group previously carried out its manufacturing operations.
These properties were retained and have either been leased at commercial rates or sold when considered appropriate.
The Investment Segment owns primarily listed and some unlisted investments, it has also made loans from which it earns interest.
Investments in associated companies are included in this segment.
-
The Mining Equipment Segment manufactures portable underground mining equipment.
(a)
Year ended 30 June 2011
Business Segments
Segment Revenue from external customers
Sales revenue
Rental income
Interest received
Dividends received
Segment other income
Net gain on disposal of rental property
Other segment income
Total Revenue and other income
Segment expenses include
Depreciation and amortisation
Impairments - investments in associates
- convertible notes
- investment property
- available-for-sale
Segment result
Reconciliation of segment net profit to group net profit before tax
Amounts not included in segment profit but reviewed by the Board
Share of loss from associates accounted fro using the equity method
Unallocated corporate expenses
Unallocated interest expense
Consolidated operating (loss) before income tax
Income tax (expense)
Consolidated (loss) after income tax
Investment
Properties
$000s
Investing
$000s
Mining
Equipment
Manufacturing
$000s
Total of
Continuing
Operations
$000s
-
2,146
-
-
2,146
1,514
1,585
3,099
5,245
343
-
-
169
-
6,102
1,589
23
1,612
-
105
105
1,717
-
4,140
1,322
-
117
-
6,102
49
49
6,151
548
-
-
-
4,174
(3,954)
1,486
6,102
2,146
1,589
23
9,860
1,514
1,739
3,253
13,113
891
4,140
1,322
169
117
1,706
(412)
(1,567)
(1,418)
(1,691)
(824)
(2,515)
P A G E 7 9
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
28
SEGMENT INFORMATION (continued)
(b) Year ended 30 June 2010
Business Segments
Segment Revenue from external customers
Sales revenue
Rental income
nterest received
Dividends received
Segment other income
Net gain on disposal of rental property
Other segment income
Total Revenue and other income
Segment expenses include
Depreciation and amortisation
Impairments - investment property
- available-for-sale
Segment result
Reconciliation of segment net profit to group net profit before tax
Amounts not included in segment profit but reviewed by the Board
Share of loss from associates accounted fro using the equity method
Unallocated corporate expenses
Unallocated interest expense
Consolidated operating profit before income tax
Income tax (expense)
Consolidated profit after income tax
(c) Geographic location of Customers
Investment
Properties
$000s
Investing
$000s
Mining
Equipment
Manufacturing
$000s
Total of
Continuing
Operations
$000s
-
3,109
-
-
3,109
2,184
-
2,184
5,293
449
1,159
1,778
-
4,746
1,158
59
1,217
-
1,710
1,710
2,927
-
-
740
2,195
-
4,746
-
-
4,746
536
-
208
4,746
3,109
1,158
59
9,072
2,184
1,710
3,894
12,966
985
1,159
740
4,181
(684)
(1,133)
(1,118)
1,246
(484)
762
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
Germany
United States of America
United Kingdom
New Zealand
Other countries
The geographical location of receivables, relating to these sales, is disclosed in Note 25 of these accounts.
All Non current receivables are from customers based in Australia.
P A G E 8 0
CONSOLIDATED ENTITY
2011
$000s
4,209
501
664
521
155
52
6,102
2010
$000s
3,168
138
581
559
150
150
4,746
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
29 RELATED PARTIES
Note
CONSOLIDATED ENTITY
2011
$000s
2010
$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:
0
0
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
19,309
11,743
30
CASH FLOW INFORMATION
(a)
Reconciliation of (loss) / profit after
income tax to the cash provided by operating activities
(Loss) / Profit after income tax
(2,515)
762
Cash flows in operating result attributable to non-operating activities:
Cash flows in operating activities but not attributable to operating result:
Payments from employee provisions
Dividends received from associated companies
Non-cash flows in operating profit:
Amortisation
Depreciation
Impairment of investment property
Interest received on convertible notes
Interest received on other loans
Recognition of income from rent free periods deferred on acquisition
Impairment of available-for-sale-assets
Impairment of other receivables - convertible notes
Transfers to provisions
Other Income
Share of loss from associated companies
Impairment of carrying value of investment in associates
Loss/(Profits) on sale of available-for-sale assets
(Profits) on sale of shares in associates
Fair value adjustments on derivatives
(Profits) on sale of plant & equipment
(Profits) on sale of investment property
Increase/(decrease) in tax payable
decrease/(increase) in deferred tax assets
Increase/(decrease) in deferred tax liabilities
-
-
48
867
169
(97)
(296)
(2)
22
1,322
289
-
412
4,140
5
(15)
76
(5)
(1,514)
(336)
390
(61)
(585)
132
80
918
1,159
(104)
(603)
107
700
-
1,392
(67)
684
-
(1,022)
-
(380)
-
(2,184)
(272)
164
(277)
P A G E 8 1
Notes to and forming part of the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2011
30
CASH FLOW INFORMATION (continued)
CONSOLIDATED ENTITY
Changes in assets and liabilities
decrease/(increase) in trade and other debtors
decrease/(increase) in prepayments
(increase)/decrease in inventories
(decrease)/increase in trade creditors and accruals
Net cash/(used in) provided by operating activities
(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
Note
2011
$000s
(1,173)
15
(304)
212
1,649
3
9,678
(1,074)
8,607
2010
$000s
(704)
(55)
40
(279)
(394)
3
20
(2,944)
(2,921)
31
EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD
No other matter or circumstance has arisen since the end of the financial year which is not otherwise dealt with in the Directors Report or the Consolidated
Financial Statements, that has significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of
the Group in subsequent years.
P A G E 8 2
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
DIRECTORS’ DECLARATION (for the year ended 30 June 2011)
The Directors of the Company declare that:
1. The Financial Statements comprising the Statement of Comprehensive Income, Statement of Financial Position, Statement of Cash Flows, Statement of
Changes in Equity and accompanying Notes to the Financial Statements are in accordance with the Corporations Act 2001 and:
(a)
(b)
comply with Accounting Standards and the Corporations Regulations 2001; and
give a true and fair view of the consolidated entity’s financial position as at 30 June 2011 and of its performance for the year ended on that date.
2. The Company has included in the notes to the financial statements an explicit and unreserved statement of compliance with International Financial
Reporting Standards.
3.
In the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
4.
The remuneration disclosures included on pages 10 to 17 of the Directors’ Report (as part of the audited Remuneration Report), for the year ended 30 June
2011, comply with section 300A of the Corporations Act 2001.
5. The Directors have been given the declarations by the chief executive officer and the person performing the chief financial officer function required by
section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by:
Jury Wowk
Jury Wowk
CHAIRMAN
Sydney, 28th September 2011
Glenn Molloy
Glenn Molloy
DIRECTOR
P A G E 8 3
INDEPENDENT AUDITOR’S REPORT
INDEPENDENT AUDITOR’S REPORT
To the members of PPK Group Limited
Report on the Financial Report
I A Report
We have audited the accompanying financial report of PPK Group Limited, which comprises
the consolidated statement of financial position as at 30 June 2011, the consolidated
statement of comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, notes comprising a summary of
significant accounting policies and other explanatory information, and the directors’
declaration of the consolidated entity comprising the company and the entities it controlled
at the year’s end or from time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that
gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the directors determine is necessary to
enable the preparation of the financial report that is free from material misstatement,
whether due to fraud or error. In Note 1a, the directors also state, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, that the financial
statements comply with International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. Those standards
require that we comply with relevant ethical requirements relating to audit engagements and
plan and perform the audit to obtain reasonable assurance about whether the financial report
is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the financial
report, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation of the financial report that gives a true
and fair view in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by the directors, as well as evaluating the
overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
P A G E 8 4
P P K G R O U P L I M I T E D A n n u Al r e p o r t 2 0 1 1
Independent Auditor’s Report (continued)
Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001. We confirm that the independence declaration required by the
Corporations Act 2001, which has been given to the directors of PPK Group Limited, would be
in the same terms if given to the directors as at the time of this auditor’s report.
Opinion
In our opinion:
I A Report
(a) the financial report of PPK Group Limited is in accordance with the Corporations Act
2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30
June 2011 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations
2001; and
(b) the financial report also complies with International Financial Reporting Standards as
disclosed in Note 1(a).
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 10 to 17 of the directors’ report
for the year ended 30 June 2011. The directors of the company are responsible for the
preparation and presentation of the Remuneration Report in accordance with section 300A of
the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration
Report, based on our audit conducted in accordance with Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of PPK Group Limited for the year ended 30 June
2011 complies with section 300A of the Corporations Act 2001.
BDO Audit (NSW-VIC) Pty Ltd
Iain Kemp
Director
Sydney, 28 September 2011
P A G E 8 5
AUDITOR’S INDEPENDENCE DECLARATION
DECLARATION OF INDEPENDENCE BY IAIN KEMP TO THE DIRECTORS OF PPK GROUP LIMITED
As lead auditor of PPK Group Pty Limited for the year ended 30 June 2011, I declare that, to
the best of my knowledge and belief, there have been no contraventions of:
•
•
the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
any applicable code of professional conduct in relation to the audit.
This declaration is in respect of PPK Group Limited and the entities it controlled during the
period.
Iain Kemp
Director
BDO Audit (NSW-VIC) Pty Ltd
Sydney, 28 September 2011
P A G E 8 6
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 1 1
Additional Information for listed public companies
1.
Shareholding
(a)
Distribution of shareholders at 26th August 2011
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
2011
000s
Number of
Shareholders
2010
000s
122
371
295
381
51
1,220
132
415
350
457
54
1,408
(b)
The number of shareholdings held in less than marketable parcels is 164
(c)
The names of the substantial shareholders listed in the holding company’s register at the 26th August 2011
Number of shares
000s
2011
Number of shares
000s
2010
Wavet Holdings Pty Ltd
JP Morgan Nominees Australia Ltd
Equipment Co of Australia Pty Ltd
11,936
7,486
6,618
10,998
7,281
6,618
(d)
Voting rights
The consolidated entity has one class of ordinary shares with equal voting rights attached to them.
(e)
Twenty largest shareholders
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Name
Wavet Holdings Pty Ltd
JP Morgan Nominees Australia Ltd
Equipment Co of Australia Pty Ltd
John E Gill Operations Pty Ltd
Applied Colour Pty Ltd
Contemplator Pty Ltd
Ruminator Pty Ltd
Ryan Consultancy Group Pty Ltd
Flagstaff Superannuation Pty Ltd
Mr Robert Joseph Faulks & Mrs Patricia Baynton Faulks
Mr Ian MacDonald
Metal Industries Pty Ltd
Di Iulio Homes Pty Ltd
Ms Alison Irving
Mr Charles Peter Taylor
Chandos Nursing Home Pty Ltd
Mr Edward James Stephen Dally & Mrs Selina Dally
Majana Pty Ltd
Mrs Patricia Baynton Faulks
Wales Corporation Pty Ltd
Number of ordinary fully
paid shares held capital
000s
11,936
7,486
6,618
1,569
1,120
698
635
50
470
440
425
412
350
342
300
300
291
260
255
226
34,633
Percentage held
of listed ordinary
%
22.314
13.995
12.373
2.933
2.094
1.306
1.188
0.935
0.879
0.822
0.795
0.770
0.654
0.639
0.561
0.561
0.545
0.486
0.477
0.423
64.750
P A G E 8 7
Additional Information for listed public companies (continued)
2.
The name of the company secretary is
Mr Robert Nicholls.
3.
The address of the principal registered office in Australia is
Suite 3, Level 2, 668 Princes Hwy Sutherland, 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.
Securities Exchange Listing
Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian Securities Exchange Ltd.
P A G E 8 8
P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 0 8
CORORATE DIRECTORY as at 27 September 2011
DIRECTORS
HEAD OFFICE & REGISTERED OFFICE
PPK GROUP PROPERTIES
Jury I. Wowk
B.A., LL.B
DIRECTOR AND CHAIRMAN (non-executive)
Glenn R. Molloy
DIRECTOR (non-executive)
Raymond M. Beath
B.Com.,F.C.A
DIRECTOR (non-executive)
Graeme Webb
DIRECTOR (non-executive)
COMPANY SECRETARY
Robert J. Nicholls
MBA (Distinction), LL.B (Hons)
Grad Dip Leg Prac., Grad Dip CSP, FCIS, CAICD
PPK Group Limited
Suite3, Level 2, 668 Princes Highway
Sutherland NSW 2232
Telephone 02 9521 84444
Facsimile 02 9521 4561
www.ppkgroup.com.au
SHARE REGISTRY
Boardroom Limited
Level 2, 28 Margaret Street
Sydney NSW 2000
Telephone 02 9290 9600
Facsimile 02 9279 0664
www.registries.com.au
AUDITORS
BDO
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
Victoria
36-42 Hydrive Close
Remington Industrial Estate
Dandenong South VIC 3175
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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A n n u A l r e p o r t 2 0 1 1