PTB GROUP LIMITED
ABN 99 098 390 991
ANNUAL REPORT
30 June 2009
Corporate Directory and Information
Directors
Harvey Parker, Chairman
Craig Baker, Managing Director and CEO
Steve Ferris, Executive Director
Andrew Kemp, Non-executive Director
Company Secretary
James Barbeler
Registered Office and Principal
Administrative Office
22 Orient Avenue
PINKENBA QLD 4008
Mailing Address
PO Box 90
PINKENBA QLD 4008
Telephone: +61 7 3637 7000
Facsimile: +61 7 3260 1180
Share Register
Link Market Services
Level 19, 324 Queen Street
BRISBANE QLD 4000
Telephone: +61 7 3320 2212
Facsimile: +61 7 3228 4999
Bankers
ANZ Corporate Bank
Level 3, 324 Queen Street
BRISBANE QLD 4000
Commonwealth Bank
Level 2, 633 Pittwater Road
DEE WHY NSW 2099
Solicitors
McCullough Robertson Lawyers
Level 12, Central Plaza Two
66 Eagle Street
BRISBANE QLD 4000
Auditor
WHK Horwath
Level 16, 120 Edward Street
BRISBANE QLD 4000
Stock Exchange Listing
The Company is listed on the Australian
Securities Exchange
Internet address
www.pacificturbine.com.au
ANNUAL REPORT
30 June 2009
Annual Report
for the year ended 30 June 2009
Table of Contents
Corporate Directory and Information
Cover
Chairman’s and Managing Director’s Review
Directors’ Report
Auditor’s Independence Declaration
Corporate Governance Statement
Financial Statements and Notes
Directors’ Declaration
Independent Auditor’s Report
Shareholders Information
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This financial report covers both PTB Group Limited as an individual entity and the consolidated entity consisting
of PTB Group Limited and its controlled entities. The financial report is presented in the Australian currency.
PTB Group Limited is a company limited by shares, incorporated and domiciled in Australia.
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Chairman’s and Managing Director’s Review
for the year ended 30 June 2009
Results
Net profit after tax decreased from $3.1 million in 2008
to $0.1 million in 2009, representing a reduction of
97 per cent. Basic earnings per share were 0.4 cents
(11.86 cents in 2008).
This represents a return on average shareholders’ funds
of 0.3 % (8.3 % in 2008). No dividend will be paid for
the June 2009 year (2008: nil). The emphasis on debt
reduction means that it is highly unlikely that a dividend
will be paid in the 2010 year.
The 2009 Year in Review
In our 2008 Annual Report the key changes in the
business we detailed included:
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The strategic shift in the business back to
trading;
That there would be less concentration on rental
of aircraft because of the lack of returns (relative
ease of finance had meant that aircraft prices had
been too high);
The engine rental business would continue as it
was relatively easy to fund; and
The group had to focus on achieving its targeted
return on assets.
The 2009 financial year has seen a number of unexpected
challenges and a number of very significant achievements
which are outlined in this report. The most significant
events, linked to the matters noted above are:
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The strategic shift back to trading continued and
contributions from these sectors of the business
were significantly improved;
The sale of the two large freight door (LFD)
ATP aircraft to the Middle East operator did
not proceed and this was replaced by a long-
term finance lease to an established operator in
Indonesia. This was significant in that the Middle
East transaction was for cash and when this did
not proceed we had to extend the $14.7 million
Emerald loan to an amortising facility over four
years; and
Our engine financing facility was not renewed by
one of our bankers meaning that the previously
reliable contribution from this section of our
business was significantly reduced.
The combination of these factors, in particular the
negative impact of the ATP sale cancellation, the
time taken to replace it, and the resulting interest and
currency costs, led to the breakeven year in 2009.
Looking back we can now see that the financial crisis
was far worse than we anticipated and was a significant
factor in our ATP sale to the Middle East operator not
proceeding, as well as the withdrawal of our engine
financing facility. However in hindsight, and given the
suddenness and severity of the financial crisis, the
Company was overexposed on the Emerald transaction.
This will be foremost in our thinking and planning in the
future.
Importantly, there were a number of critical initiatives
completed during the year. These are summarised below
and commented on later in the review:
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Settlement of Belmont Airport land at Newcastle
to a listed property developer;
Completion and settlement of the new workshop
and office complex in Brisbane;
Rollover of $4.5 million of Notes;
Sale of Newcastle RPT operator Aeropelican;
Completed two LFD and one passenger ATP in
UK;
Replaced Middle East cash sale of LFD ATP aircraft
with an extended credit type arrangement to an
established operator in Indonesia;
Extension of short term $14.7 million loan to a
four year term loan;
Closure of UK Emerald refurbishment operation;
Extended ANZ funding facilities to 31 October
2009;
A power by the hour arrangement with a major
Australian freight operator;
Core operating business for IAP and PTB exceeded
prior year and current forecasts in a difficult year;
and
The refocus on core PTB business to compensate
for withdrawal of the key bank engine finance
facility.
Activities covered under PTB Group’s
Aviation Asset Management Operations
The group now has three broad business groupings under
its aviation asset management umbrella:
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PTB: TPE331 together with PT6A turbine
engine repair and overhaul in the repair facility in
Brisbane, and trading in spare parts for engines,
and engines;
IAP: Spare parts supply and the continued
acquisition of aircraft and redundant spares as
well as trading in aircraft. All aircraft are acquired
at a price underwritten by their parts value with
a view to resell or reduce to parts; and
Financing and Rentals: Purchase of engines and
aircraft for lease, rental or hire purchase and
sale of engines and aircraft from the aircraft and
engine pool. The rental of the two LFD ATP’s and
the expected rental of the ATP passenger aircraft
will add to the rental pool.
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Chairman’s and Managing Director’s Review
for the year ended 30 June 2009 (Continued)
Commentary on operations during the year
A summary of results for the year is as follows:
Division
Actual
2009
$’000
Budget
2009
$’000
Variance
$’000
Actual
2008
$’000
PTB Business
IAP Business
Emerald Assets
Emerald Currency
Emerald Interest
Corporate Overheads
Sale of Belmont land
Sale of Aeropelican
Bad and doubtful debts
Profit before Tax
PTB Business
The Brisbane business was ahead of budget for the year
by 10% and 91% ahead of the corresponding 12 months
to June 2008. The year’s performance is a strong result
in today’s climate.
The loss of our engine finance facility has had a major
impact on our engine sale business. Engine finance
was a very valuable engine sales tool and in today’s
financial climate would have been even more valuable in
generating new business.
The cash support from Brisbane for our Emerald
Financier repayments and the close down of Emerald’s
UK operation has reduced Brisbane’s ability to generate
additional speculative engine sales and opportunistic
engine parts purchases.
We have been able to add to our parts sales team and
this has significantly increased our parts sale business
which has gone some way to compensating for a decline
in engine sales.
The new building has created efficiencies with Brisbane
staff under one roof. We had expected to set up a
Dart engine line in Brisbane. However a lack of funding
has currently prevented this strategic initiative being
implemented. IAP has since developed a relationship with
an overseas Dart engine shop which meets its needs as
an interim measure.
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2,178
2,630
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(3,004)
(1,583)
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(621)
2,928
2,108
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(1,567)
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(1,912)
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785
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(1,067)
(1,761)
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(1,134)
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5,383
(5,050)
4,162
Brisbane’s engine and rental business is slowing as a
result of the slowdown in the aviation sector. We expect
the rental business to improve as the global economy
recovers.
IAP Business
The IAP result was slightly ahead of budget for the
year and 177% ahead of the previous year. This is an
outstanding result.
Early in the financial year IAP purchased for part-out a
BAE 146 in Australia, a BAE ATP in India, and a 737-200
in Indonesia.
The lease of the J32 aircraft to Aeropelican will create
excellent long-term part sales opportunities for IAP and
engine repair and overhaul opportunities for Brisbane.
The finance leases of the LFD ATP’s to the Indonesian
operator will also provide a base for significant long-
term ATP parts sales opportunities for IAP.
Again, working capital is important: the future growth
of the core IAP business is dependent upon access to
working capital for aircraft part-out opportunities.
With the placement of the ATP’s in Indonesia, and the
closure of the UK facility, Steve Ferris will be able to
spend more time on the core business this year, thus
enhancing growth in that sector.
Emerald Assets
The Brisbane business is reviewing the feasibility of
installing a PT6A engine test cell. A test cell would
significantly expand the profit opportunities for Brisbane
in the PT6A engine repair and overhaul business. This cell
can be made multi-engine thus enhancing its value to
the Group. The key to progressing this is finance, and this
will be a significant project for the coming year.
The global financial crisis and resulting restriction in
available finance has had a major effect on this division
and the Group’s results.
The sale of the two LFD ATP’s was expected to be
completed early in this financial year. The company
contracted to the end user was unable to finance the
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Chairman’s and Managing Director’s Review
for the year ended 30 June 2009 (Continued)
purchase and the deteriorating financial climate meant
the end user was no longer prepared to underwrite the
project. The failure to settle has had a major impact on
the division as the sale would have cleared its expensive
funding and substantially reduced the Emerald interest
cost of $3 million for the year.
Our Emerald Financier converted our USD facility to AUD
during the period, an action which cost the PTB Group
approximately $2.4 million in foreign currency losses for
the year.
been returned as UK Post terminated the
operator’s contract as a result of difficult trading
conditions;
African LFD HS748:
The operator in Africa has
returned the aircraft after meeting all financial
requirements and getting the aircraft on line in
Africa, as the expected UN contracts were no
longer forthcoming; and
Bangladesh HS748:
This aircraft was returned.
One of our HS748 operators in Bangladesh has
expressed an interest in operating this aircraft.
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In addition, the expected cash sale of the two passenger
(PAX) ATP aircraft to a European operator did not occur,
reducing the Group’s forecast profit by a further $2.2
million for the year.
We are working to find alternative markets for the
unused HS748’s. The combination of new markets and
improved economic conditions will see these aircraft
redeployed.
An Indonesian operator accepted delivery of the two
LFD ATP aircraft in June 2009 under an extended credit
type arrangement. These aircraft were delivered in early
August.
To limit the operational cash drain a decision was made
to close the UK refurbishment facility and complete
one PAX ATP, one LFD HS748, and reduce to spares
the remaining HS748’s as part of the closedown. The
closedown, completion of the aircraft, part-out of
the HS748’s, and termination of the workforce was
completed as planned.
One PAX ATP has been mothballed and stored at
Blackpool in the UK. At a later date we will complete the
refurbishment when we have the appropriate commercial
opportunity.
Steve Ferris, IAP’s managing director, has done an
absolutely outstanding job in closing the facility as planned
and deploying the aircraft to approved facilities where
the care and maintenance programs can be managed. He
has also completed the sale and deployment of the two
LFD ATP’s to the Indonesian customer, a major task on
its own, with the additional pressures of meeting UK and
Indonesian aviation regulation requirements.
Emerald has a number of aircraft assets not deployed
at present. These aircraft are all future opportunities
that we are confident can be leased or sold as conditions
improve.
Brief details are:
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Completed PAX ATP:
We have had a number of
enquiries to lease the PAX ATP however to date
the potential customers have not been able to
meet our financial requirements. Our Indonesian
operator is keen to lease the aircraft and is the
logical future operator of this aircraft;
Two UK HS748’s:
The two HS748 aircraft
on finance leases with a UK operator have
Corporate Overheads
Corporate overhead costs are slightly ahead of budget
at $1.58 million (Budget: $1.57 million) to 30 June
2009, however they have reduced significantly from
$1.76 million in the prior year. Additional legal and
financing costs were incurred during the year due to the
various asset and business disposals, and the number
of refinancing activities undertaken. These costs were
offset by reductions in Director’s fees and employee
share option expenses, with salary and wage costs
remaining stable.
Bad and Doubtful Debts
Bad and doubtful debts expense for the year totalled
$0.6 million (2008: $1.13 million). These expenses
were largely attributable to three customers on long-
standing open account. The customers operated
regional passenger and freight airline operations in
Australia, the Pacific Islands, and Bangladesh and were
largely affected by the global downturn in passenger
and freight activity. A provision for impairment of $0.6
million (2008: $0.3 million) has been prudently booked
at year end. Management are confident however that
recovery efforts will realise funds which will reduce the
final amount to be written off on these customers.
We conduct business with second and third tier aviation
companies and extending credit is a risk of the business.
An engine sale or engine repair is often of high monetary
value with significant margin, and credit levels evolving
over time.
Financing Facilities
PTB Emerald Finance Facility
Due to the inability of our Middle East customer to settle
for cash on the two LFD ATP freighters, the Group was
forced to renegotiate the terms of this facility to match
the extended credit terms offered to the Indonesian
customer. Key terms of the arrangement previously
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Chairman’s and Managing Director’s Review
for the year ended 30 June 2009 (Continued)
disclosed to the market include an interest rate of 15%
per annum (previously 22%), minimum monthly loan
repayments of $165,000, a four year loan term (i.e. to
31 July 2013), and the existing security arrangements
to remain in place. The balance at 30 June 2009 was
$14.9 million (2008: $11.9 million).
In addition, while there is money owed to the Financier,
no return of capital, dividends or payments can be made
to ordinary shareholders in PTB or related parties without
its approval. The Financier has been granted 2,875,000
ordinary shares in PTB on the basis that these shares
can be issued progressively over five tranches. The first
tranche of shares, i.e. for 1.2 million shares, was issued
on 30 June 2009 as approved by the shareholders on
that date. The share issue has been structured in this way
to minimise the potential dilutive effect on shareholders
by allowing an early repayment of this facility.
Unsecured Notes (PTB Rentals)
During the year the Group’s $4.589 million Note facility
was extended for two years to 30 November 2010 at
an interest rate of 14% (previously 11.5%).
In addition, PTB Group will issue to each Noteholder one
Option in relation to ordinary shares for each two Notes
held by that Noteholder at an exercise price of $0.40
per share, in four six monthly tranches commencing
from the issue date of 1 December 2008. The exercise
period expires on 30 November 2010. The option issue
has also been structured in this way to minimise the
potential dilutive effect on shareholders by allowing an
early repayment of this facility.
ANZ Facility (PTB Group)
As a result of a change to its internal lending policies, the
ANZ Bank is limiting further lending to certain industries,
including our second tier aviation industry sector. As
the PTB Group requires ongoing financing to fund its
business growth, the Group has agreed to consolidate
its financing facilities with another provider. The Group’s
net exposure to the ANZ is less than $2.0 million at the
reporting date and it is planned that this transition will
be completed prior to October 2009.
Other Matters
Exchange rates
The current year has been volatile with AUD/USD
exchange rate movements from 0.94 at June 2008, to
0.62 in November 2008, and a closing rate at 30 June
2009 of 0.81.
While the group has a natural hedge in respect to its
assets and liabilities, the fact that a large part of PTB
Group’s trading is undertaken in US dollars and in US dollar
valued assets means that the conversion to Australian
dollars has a significant negative impact on the gross
margins and sales of the PTB and IAP businesses when
the AUD appreciates against the USD.
As mentioned above, the inability of our Emerald Financier
to continue to finance their facility in USD led directly to
a realised foreign currency loss of $2.4 million, of which
approximately $1.7 million would otherwise have reversed
to 30 June 2009. In conjunction with the Emerald interest
expense, this was one of the largest negative impacts on
Group trading performance for the year.
Asset Values
Aviation inventory and assets are global commodities
and are valued, bought, and sold in USD. Before the fall
in the exchange rate from 30 June 2008, the Directors
were of the opinion that assets were carried in the books
at conservative values. The fall in the $AUD/$USD
exchange rate of around 13% to 30 June 2009 has
created an additional buffer in asset values.
Sale of Aeropelican
Following an unsolicited approach, Aeropelican Air
Services Pty Ltd was sold effective 30 September 2008.
The profit on sale of the subsidiary was $651,820. The
sale includes the lease of three J32 aircraft currently
owned by IAP on an ongoing basis with potential to
deploy further aircraft as the new operations expand.
Since the end of the financial year, Aeropelican has agreed
to take a fourth aircraft on lease from IAP commencing
October 2009.
Brisbane relocation
In November 2008 the Company moved into its new
combined engineering, warehouse and office facility
near Brisbane airport. Funding was provided by the CBA.
This has enabled the business to once again combine
under one roof and will enable the expansion of the
PT6 and TPE331 engine repair and overhaul business
as opportunities develop. The business also has space to
add additional engine lines.
Balance Sheet and Net Assets
The net asset position has decreased from $40.2 million
as at 30 June 2008 (2007: $35.5m) to $39.0 million at
30 June 2009. The decrease is mainly attributable to the
settlement of the effective foreign currency hedges and
the reversal of the related derivative financial instrument
and hedging reserve totalling $1.5 million.
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Chairman’s and Managing Director’s Review
for the year ended 30 June 2009 (Continued)
Included in net assets are:
The Emerald assets: These are predominantly aircraft
and make up $13.3 million (2008: $15.3 million) of
Inventories, $3.2 million (2008: $3.3 million) of property,
plant and equipment, and $16.6 million (2008: $11.2
million) of extended credit receivables, mainly consisting
of the hire purchase type arrangements.
As previously disclosed above, the remaining inventory
largely consists of completed ATP and 748 aircraft, with
one incomplete PAX ATP aircraft remaining that can be
refurbished or parted-out. The completed aircraft will
either be sold outright to reduce debt and generate
working capital, or moved to the financing and rentals
pool (classified as plant and equipment in non-current
assets).
Cashflows
The positive operating cashflow has been predominantly
due to the realisation of inventory and reduction in the
days to collect accounts receivable. As mentioned in
previous years, the Group will normally have a negative
operating cashflow as short-term debt is utilised to
acquire aviation asset inventory which are either sold
or placed in the recurring earnings lease and rental pool
as non-current assets. The short-term debt is then
reduced and substituted with longer-term debt secured
over the leased or rented assets. The overall negative
net cashflow is predominantly due to the net investment
by the PTB Group in the new building in Brisbane as
detailed earlier in this report.
Management
The Group now has a small team with the financial skills
to meet its management and reporting requirements
and obligations. The Group continues to work at building
the systems and processes to meet the complexities of a
multicurrency, multi-country business. In the Operations
area, the PTB Business has a good team which can handle
growth.
The aim is to have good support, financial, and other
management staff freeing up the deal doers to spend a
greater proportion of their time creating sales and new
business.
PTB Group’s Outlook
The Group has completed a number of initiatives to allow
it to “weather the storm” and establish a platform for the
future. Management of IAP and PTB have concentrated
on their core businesses and their improved performance
has been most important.
The rental and lease side of the business, widely
perceived as an annuity income stream, has not lived
up to this expectation. Even tier one operators are
cancelling or renegotiating leases. The ordinary IAP
and PTB businesses are not perceived as positively by
the market, but are vital as they provide a platform for
the creation of entrepreneurial, and lease and rental
opportunities.
The turboprop market is our core business and is well
placed to generate sound levels of activity in the present
economic climate. We wrote about this in last year’s
annual report and a section on this aspect is detailed
below. It has several key characteristics:
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Fuel efficiency and low operating costs;
Relatively low capital cost; and
Relatively low numbers of aircraft available due
to the concentration on small jets through the
1990’s and into the early years of this century.
While finance availability for customers is very limited,
PTB Group has aircraft available for rental and lease and
the above dynamics of our low cost and fuel efficient
aircraft work in our favour.
For the next 12 months we will be concentrating on:
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Getting our unused aircraft back out on lease and
generating income, or selling to generate cash;
Using cash flows to pay down expensive loans
without destroying working capital, while seeking
less expensive alternate funding; and
Continuing to manage our working capital to
enable our core business to ‘deal’ as necessary.
In a recovery year we are expecting to generate a pre-
tax profit of approximately $2.7 million skewed towards
the second half as conditions improve. However, as a
recovery commences we expect to see other significant
profit making opportunities.
Senior management have been through a number of
down turns in the aviation industry and there is always
a bottom and a recovery. Our business tends to prosper
in these recovery times as buying opportunities occur.
Once recovery begins aircraft start flying and often
these aircraft require maintenance catch-up. This leads
to additional parts sales, engine repair and overhaul
work, and rental and lease opportunities.
An extract from the 2008 Annual Report reviewing
the turboprop aviation sector, has again been included
overleaf due to its continuing relevance.
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Chairman’s and Managing Director’s Review
for the year ended 30 June 2009 (Continued)
The 19 to 50 seat market is also dominated by 1970’s,
80’s and 90’s build aircraft that cannot be replaced,
regardless of funding. Many smaller operators and freight
operators rely upon this size aircraft and we are now
seeing even 1950’s turboprop aircraft flying in Australia
carrying freight. Unthinkable just five years ago.
From our point of view this is all good news for the
PTB Group as there is a limited amount of spares and
engines in the marketplace and the demand for parts
and support can only increase. The value of inventory
is climbing as the larger manufacturers are unwilling to
make small production runs of new parts.
The primary focus for the group is aircraft and engines
in the turboprop market and the group is well placed to
continue to build business in this section of the market.
Our existing inventories are the largest within Australia
and our extensive experience in this sector bodes well for
our growth in the coming year.”
PTB Group Limited
Harvey Parker
Chairman
Craig Baker
Managing Director
2008 Annual Report extract: PTB Group’s aviation
sector outlook
“The Turboprop market has gone from strength to
strength since a downturn in 2001.
Airlines have realised that the future was not necessarily
in the small regional jets and have flocked back to
turboprops due to their fuel efficiency and low operating
costs. This is a worldwide phenomenon, where we are
seeing major carriers making huge investments in
Bombardier, Dash 8 and ATR aircraft to replace both
small and large jet transport aircraft. With the high cost
of fuel, this trend seems to be increasing at a staggering
rate which has effectively seen the death of the small
regional jet, the aircraft that replaced and squeezed the
turboprop out of the same market.
The aviation industry pre 2000 effectively wrote the
turboprop off in favour of the regional jet and almost
all manufacturers ceased production prior to the
downturn.
Only ATR and Bombardier remained, concentrating
on the larger 50+ seat turboprop aircraft. Today the
smallest new commercial turboprop available is the 50
seat ATR42 selling at USD 16 million.
Times have come full circle and the high cost of fuel has
made airlines look again at the turboprop, but they are
now faced with little choice and very tight availability.
This has resulted in driving turboprop prices up – in
some cases up to three times what we saw immediately
after 9/11.
Low time, well cared for aircraft are in short supply and
hard to source. There is only a very limited supply of
fewer than 50 seat aircraft and this pool is continually
diminishing as older aircraft are retired. Supply is further
hampered as soon after 2001, many of the “newer”
turboprops were snapped up by the freight market.
These are now dedicated freighters and no longer
available to cycle through the passenger networks. No
new aircraft are coming in to top up this pool except in
the 50+ range.
The 19 seat sector is in the biggest short supply.
These are in demand from both the smaller passenger
operator and the freighter market. The power plant for
most 19 seat aircraft is the P&W PT6 engine or the
Honeywell TPE331 engine, both products extensively
handled by PTB.
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8
Directors’ Report
for the year ended 30 June 2009
Your Directors present the financial report of PTB Group
Limited (“the Company”) and its controlled entities (“the
Group”) for the year ended 30 June 2009.
IAP Group for $13.8 million. IAP Group is a Sydney-based
niche aviation asset management company providing
aircraft inventory support, encompassing:
Directors
The following persons were Directors in office at any
time during or since the end of the year:
Name
Position
H Parker
CL Baker
RS Ferris
APS Kemp
Director (non-executive), Chairman
Managing Director (Group)
Managing Director (IAP Division)
Director (non-executive)
Principal Activities
The principal activities of the Group during the financial
year were the provision of the following services in
relation to aviation assets:
■■
■■
■■
■■
A specialist Pratt & Whitney PT6A and Honeywell
TPE331 turbine engine repair and overhaul
business based at Brisbane Airport, Australia;
Trading operations in Australia and internationally
in aircraft airframes, turbine engines, and related
parts;
The provision of finance for aircraft and turbine
engines sold to customers; and
The lease, rental, or hire of aircraft and turbine
engines to customers from the Group’s aviation
assets pool.
There have been no significant changes in the nature of
these activities during the year not otherwise disclosed
in this report.
Review of Operations
Background
PTB Group Limited (“PTB”) was established in 2001,
when it was incorporated to acquire the Brisbane assets
of Pacific Turbine Pty Ltd ACN: 079 166 653. It focused
on providing services in relation to the Pratt & Whitney
PT6A and Honeywell TPE331 light turbine engines.
The Company undertook:
■■
■■
■■
Specialist turbine engine repair and overhaul
based at Brisbane Airport, Australia;
Trading operations in Australia and internationally
in aircraft turbine engines and related parts; and
The provision of finance for PT6A and TPE331
turbine engines for customers.
■■
■■
Global supply of aviation parts; and
Global aircraft and engine financing and sales.
Its business operations are highly complementary to PTB
Group’s business. Steve Ferris, the founder of IAP Group,
took approximately 80 per cent of the consideration as
PTB Group shares and now holds approximately 25 per
cent of the expanded Group.
In October 2006 the Company announced it had acquired
the aircraft and associated parts of the UK companies
Emerald Airways Ltd and Emerald Airways Engineering
Ltd for approximately $16.25 million. The assets acquired
comprised five British Aerospace ATPs, 14 HS 748s, 10
Shorts 360s and their related spare parts along with a
lease of an engineering facility at the Blackpool airport.
The ATP and HS 748 aircraft are assets in which IAP
Group has a long-term history of trading and managing.
In December 2006 the Company moved from the NSX
to ASX. In conjunction with this move the Company
issued 2.5 million shares at $2 to raise $5 million. This
followed capital raisings totalling $7.9 million earlier in
the period to fund part of the IAP Group and Emerald
assets acquisitions.
Initiatives in Current Period
The 2009 financial year has seen some unexpected
challenges and a number of significant achievements.
These events have been detailed in the Chairman’s and
Managing Director’s Review included in this annual report.
Operating Results
The consolidated profit for the financial year after
income tax, was $103,285 (2008:
providing for
$3,131,388), a decrease of 97%. Operating profit before
tax for the year was $333,257 (2008: $4,162,091) a
decrease of 92%.
The decrease in both profit after tax and operating profit
is due in part to the interest incurred on the Emerald
project of $3 million due to the inability of our customer
in the Middle East to settle as expected and realise funds
to repay the loans. In addition, a related realised foreign
currency loss of $2.4 million was incurred as a result of
the financier’s inability to continue funding in USD. The
PTB Brisbane and IAP business performed ahead of budget
despite the poor trading conditions during the year.
Financial Position
The Company listed on the Stock Exchange of Newcastle
Ltd (NSX) in March 2005. In September 2006 it acquired
The net assets of the Group have decreased by 3% to
$39 million as at 30 June 2009 (2008: $40.2 million).
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Directors’ Report
for the year ended 30 June 2009 (Continued)
Dividends
IAP Group:
No dividend has been declared and paid for the 30 June
2009 financial year (2008: Nil). The emphasis on debt
reduction means that it is highly unlikely that a dividend
will be paid in the 2010 year.
Significant Changes in State of Affairs
There were no significant changes in the state of affairs
of the Group not otherwise disclosed in this report.
After Balance Date Events
No matters or circumstances have arisen since the end
of the financial year which have 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 future years except as detailed below:
The Company has agreed to consolidate its existing
financing facilities with the ANZ Bank with another
provider. The net exposure to the ANZ at balance date
was less than $2 million and the ANZ has extended the
Company’s financing facilities until 31 October 2009 to
allow this transition to occur. A second ranking charge
over the assets of the parent entity and IAP Group
Australia Pty Ltd was also signed on 31 July 2009 in
favour of the Emerald financier.
Future Developments, Prospects and
Business Strategies
The global aviation industry is currently experiencing
difficult trading conditions with lower passenger and
freight demand, and a shortage of available funding.
However suppliers to the industry such as the PTB Group
have benefited historically in these times, and the Group
has the ability to acquire assets to part-out or trade as
operators and financiers exit surplus assets. As such the
prospects for the continuing performance and growth of
the Group remain sound.
The Group is maintaining a very strong focus on its core
competencies and has identified a number of further
initiatives that are expected to enhance its prospects.
The Group now has three broad business groupings
under its aviation asset management operations:
Pacific Turbine Brisbane:
■■
■■
■■
■■
Rebuilding PT6A and TPE331 engines at PTB’s
engine repair and overhaul facilities in Brisbane;
Managing the rebuilding of engines at third party
overhaul shops;
Trading in spare parts for engines; and
Trading in parts (other than engines) for PTB
clients.
■■
■■
Spare Parts Supply: Acquisition of redundant
spares from airlines which have changed their
aircraft types and then remarketing to other
operators of that type. IAP Group is by far
the largest surplus spare parts dealer in the
southern hemisphere. Its purchasing systems
are well-honed over many years and its network
of contacts enables maximum exposure both
for purchasing and reselling opportunities. IAP
Group also has a strong parts brokering business,
particularly with its Asian contacts; and
Acquisition and Sale of Aircraft/Parting out
Aircraft: As an integral activity to spares support,
IAP Group has bought and sold many aircraft.
The aircraft traded in this way range in size from
an Islander to a Boeing 737 and Airbus A300.
Its engineering operation at Bankstown airport
has significant capability to perform aircraft
refurbishment. IAP Group also acquires aircraft
and parts them out. For example, aircraft could
be acquired outside of Australia and be parted-
out on site. Some parts such as engines could
then be immediately sold to recoup the initial
purchase cost, with the balance containerised as
parts and shipped to the Sydney warehouse for
marketing and subsequent sale.
Aircraft Engine and Airframe Rental and Financing:
The Group earns recurring earnings from rental and
financing although the more difficult debt market has
significantly curtailed this part of the business. These
areas, which include profits from assets bought and
sold for the pool, earn returns of between 12 and 25
per cent on assets employed. Finance leases tend to
generate lower returns with operating leases being more
profitable. Activities include:
■■
■■
including:
Short or medium term rental or financing of
engines
Pratt & Whitney PT6A;
Honeywell TPE331; Rolls Royce Dart prop jet;
Rolls Royce Tay turbo fan and Rolls Royce Spey
turbo fan; and
Airframe financing (including purchase and sale)
for aircraft including: Metro 23; EMB 110
Bandeirante; Hawker Siddley 748; BAE ATP; F27;
Twin Otter and Beechcraft King Air.
included
Additional commentary has been
in the
Chairman’s and Managing Director’s Review in this annual
report. The Directors have excluded from this report any
further information on the likely developments in the
operations of the Group and the expected results of
those operations in future financial years, as the Directors
have reasonable grounds to believe that it would be likely
to result in unreasonable prejudice to the Group.
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10
Directors’ Report
for the year ended 30 June 2009 (Continued)
Environmental Issues
The Group operates from Brisbane, Sydney, and
Bankstown Airport in Australia, and Blackpool Airport in
the UK. It is required to meet Brisbane Airport Corporation
environment regulations and the Commonwealth’s
Airports (Environment Protection) Regulations 1997
as well as relevant UK legislation. The Group is subject
to regular audits by these authorities. The Group also
has administration and warehouse facilities in a number
of locations subject to relevant legislation. There have
been no non-compliances to date while the Group has
operated from these various locations.
Information on Current Directors
Harvey Parker
(Non-Executive Chairman)
Harvey Parker was born in 1943 and has had a
distinguished career spanning several industries. He has
experience in the aviation industry as Managing Director
of New Zealand Post and the Airpost Joint Venture.
Presently he is the Chairman and also serves on the audit
and remuneration committees of the Company.
He is presently Chairman of DWS Advanced Business
Solutions Limited (since 9 May 2006), Director of
Riding for the Disabled Association of Victoria Limited,
and Director and Chairman of Jumbuck Entertainment
Limited (since February 2009). During the past three
years Mr Parker was also a Director of the Volante
Group (until April 2006) and Chairman of Intermoco
from (2 May 2007 to 31 May 2008). He has held no
other Director positions with other listed companies in
the last three years.
Craig Louis Baker CA, BCA
(Managing Director – Group)
Craig Baker was born in 1946 and has had extensive
experience in the aviation industry. He is a qualified
accountant and has been involved in aviation businesses
as a General Manager, Director, and Finance Manager for
over 20 years. Along with Hugh Jones, he was involved
in the development of Airwork (NZ) Limited which has
grown to become a major aviation provider in New
Zealand with annual sales in excess of $80 million.
Craig’s duties involve the overall management of the
Group. He has held no other Director positions with
other listed companies in the last three years.
Royston Stephen (Steve) Ferris B.Sc
(Managing Director – IAP Division)
Steve Ferris was born in the UK in 1960. He graduated
from Bristol University in 1981 with a Bachelor of
Science. He incorporated the IAP Group in 1987 and has
grown the company in a successful manner by utilising
his vast knowledge of the aviation industry.
Steve is based in Sydney and is the Managing Director
of the IAP Group operations. He has held no other
Director positions with other listed companies in the
last three years.
Andrew Peter Somerville Kemp B.Com, CA
(Non-Executive Director)
Andrew graduated in Commerce from the University of
Melbourne and is a Chartered Accountant. After working
for KPMG and Littlewoods Chartered Accountants in
Melbourne and Sydney, he joined AIFC, the merchant
banking affiliate of the ANZ Banking Group, in Sydney in
1978. From 1979 until 1985, Andrew was Queensland
Manager of AIFC.
Andrew joined the North Queensland based Coutts
Group as general manager early in 1985, and continued
with this group until January 1987 when he formed
Huntington Group.
Since 1980, Andrew has been involved in a range of
listings, acquisitions and divestments. He has structured
and implemented the ASX listing of eleven companies. He
has also advised clients on a wide range of investments
and divestments over the last 20 years.
Andrew is currently a Director of the following listed
companies: Silver Chef Limited (from April 2005), Trojan
Equity Limited (from May 2005), and SCV Group Limited
(from March 2004). He was previously a Director of S8
Limited from February 2004 until January 2007.
is a member of the audit and remuneration
He
committees of the company.
Company Secretary
James Barbeler was appointed as the Chief Financial
Officer from 28 May 2007, and Company Secretary
on 15 June 2007. James has a Bachelor of Business
(Accountancy)
from Queensland University of
Technology, a MBA with an IT major, and is a member of
the Institute of Chartered Accountants. James has over
22 years experience in all aspects of financial accounting,
auditing, treasury, Board, and statutory reporting. James
has held various positions including Audit Manager in a
Chartered Accounting firm, CFO, Company Secretary,
and CEO of various agribusiness and commercial entities
in both public and private companies.
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Directors’ Report
for the year ended 30 June 2009 (Continued)
Remuneration Report
The remuneration report is set out under the following
main headings:
A Principles used to determine the nature and
amount of remuneration
B Details of remuneration
C Service contracts
D Share-based payment compensation
E Additional information.
The information provided in this remuneration report
has been audited as required by section 308(3C) of the
Corporations Act 2001.
A.
Principles used to determine the nature
and amount of remuneration
Non-executive Directors
Non-executive Directors are to be paid out of Company
funds as remuneration for their services, such sum as
accrues on a daily basis as the Company determines to
be divided among them as agreed, or failing agreement,
equally. The maximum aggregate amount which has
been approved by shareholders for payment to non-
executive Directors is $100,000 per annum.
Directors’ remuneration for their services as Directors
is by a fixed sum and not a commission or a percentage
of profits or operating revenue. It may not be increased
except at a general meeting in which particulars of the
proposed increase have been provided in the notice
convening the meeting to shareholders. There
is
provision for Directors who devote special attention to
the business of the Company or who perform services
which are regarded as being outside the scope of their
ordinary duties as Directors, or who at the request of
the Board engage in any journey on Company business,
to be paid extra remuneration determined by the
Board. Directors are also entitled to their reasonable
travel, accommodation and other expenses incurred in
attending Company or Board meetings, or meetings of
any committee engaged in the Company’s business.
Any Director may be paid a retirement benefit
as determined by the Board, consistent with the
Corporations Act 2001 and the ASX Listing Rules.
Executive and Key Management Pay
The remuneration committee is responsible for advising
the Board on remuneration and issues relevant to
remuneration policies and practices including those
of senior management and executive Directors. The
committee has responsibility for reviewing and evaluating
market practices and trends in relation to remuneration,
recommending
remuneration policies, overseeing
the performance and making recommendations on
remuneration of members of senior management and
executive Directors.
Remuneration in each case is taken as including not
only monetary payments (salaries), but all other non-
monetary emoluments and benefits, retirement benefits,
superannuation and incentive programs.
In each case the committee refers to the general
market and industry practice (as far as directly relevant
benchmarks can be identified for comparative purposes)
and the need to attract and retain high calibre personnel.
Compensation
in the form of cash bonuses for
executives and key management personnel is designed
to ensure reward for performance is competitive and
appropriate for the results delivered. The framework
aligns executive and key management reward with
achievement of strategic objectives and creation of
value for shareholders in terms of return on equity, and
conforms with market practice for delivery of reward.
The Board ensures that executive and key management
reward satisfies the following key criteria for good
reward governance practices:
■■
■■
■■
■■
■■
Competitiveness and reasonableness;
Acceptability to shareholders;
Performance alignment of compensation;
Transparency; and
Capital management.
Executive Directors
The Executive Directors’ pay and reward framework has
the following components:
■■
■■
Base pay and benefits, including superannuation;
and
Short-term performance incentives.
Base pay: structured as a total employment cost package
which may be delivered as a combination of cash and
prescribed non-financial benefits at the Executive
Director’s discretion. Base pay is reviewed annually and
benchmarked against inflation.
Benefits: Executive Directors receive benefits including
car allowances.
Superannuation:
Executive Directors’ base pay
includes statutory and salary sacrificed superannuation
contributions.
incentives:
Short-term performance
Cash bonus
incentives are based on pre-determined after tax
return on equity and operational targets based on the
criteria detailed above, as set by the remuneration
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12
Directors’ Report
for the year ended 30 June 2009 (Continued)
A.
Principles used to determine the nature
and amount of remuneration (Continued)
committee. The bonuses are paid in October each
year. The pre-determined targets ensure that variable
reward is only available when value has been created for
shareholders, and when profit and operational objectives
are consistent with the business plan. Each Executive
Director has a target short-term incentive opportunity
depending on the accountabilities of the role and impact
on the organisation or business unit performance. The
maximum target bonus opportunity is 33% of base pay.
Other Executives and key management personnel
Other Executives and key management personnel’s pay
and reward framework includes base pay and short-
term incentives. There are no fixed performance criteria
for the cash bonuses. After the end of the financial year
the remuneration committee assesses the performance
of
individuals and, where appropriate, approves
discretionary cash bonuses to be paid to the individuals.
Cash bonuses are paid in cash following approval by the
remuneration committee.
Long-term incentives to Executives and
Employees
In order to provide a long-term incentive to the
executives and employees of the Company, an Employee
Share Option Scheme (“the Scheme”) is in place. The
incentive provided by the scheme will be of material
benefit to the Company in encouraging the commitment
and continuity of service of the recipients. By providing
executives and employees with a personal financial
interest in the Company, the Company will be able to
attract and retain executive Directors, key executives
and employees in a highly competitive market. This is
expected to result in future benefits accruing to the
shareholders of the Company.
The establishment of the Scheme was approved by
shareholders on 3 June 2005. All staff are eligible
to participate in the scheme, including Executive
Directors’ (since they take part in the management of
the Company).
The options issued to key management personnel were
issued pursuant to the Scheme whereby options were
issued to all employees (excluding Executive Directors)
on the same basis and the entitlements are not linked to
performance. The number of options issued to employees
was determined by the remuneration committee and
approved by the Board in accordance with the terms of
the Scheme.
Options are granted under the Scheme for no
consideration. The exercise price is the amount specified
by the remuneration committee at the time of issue.
The exercise period is the period specified by the
remuneration committee at the time of issue. Options
under the plan may not exceed 5% of the total number
of issued shares of the Company at the date of issue.
Options lapse if prior to or during the exercise period
the employee is terminated or resigns. If a person
dies, becomes disabled, or is made redundant prior to
the exercise period the option lapses. If a person dies,
becomes disabled, or is made redundant during the
exercise period special rules apply that allow options to
be exercised.
Options granted under the Scheme carry no dividend or
voting rights. When exercisable, each option is convertible
into one ordinary share in PTB Group Limited. Amounts
receivable on the exercise of options are recognised as
share capital. The above remuneration policy together
with the options package is to encourage the alignment
of personal and shareholder interests.
Company Performance, Shareholder Wealth
and Directors’ and Executive Remuneration
The Executive Directors’ short-term incentives are linked
to return on equity and other operational objectives as
described above and detailed in the table below. The base
salaries for the executives are substantially in accordance
with the market for executives of similar levels.
2009
2008
2007
2006
2005
Revenue ($’000)
Net profit ($’000)
Return on average shareholders funds (%)
Share price at year-end ($)
Dividend paid per share in respect of each financial year
38,526
103
0.3
0.12
Nil
46,608
3,131
8.3
0.46
Nil
40,559
3,589
15.8
1.95
6 cents
16,982
1,861
20.31
1.60
6 cents
10,135
1,420
26.29
1.15
6 cents
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Directors’ Report
for the year ended 30 June 2009 (Continued)
B.
Details of Remuneration
The remuneration for each Director and other key management personnel of the Company and the Group was as follows:
Short-term benefits
Post-
employment
Other
Share-based
payment
Total
Cash
salary and
fees
$
Cash
bonus
$
Non-
monetary
benefits
Super-
annuation
Long-
term
benefits*
Options
$
$
$
$
$
2009 Year
Directors
H Parker (Non-Executive
Director)
CL Baker (Managing Director –
Group)
RS Ferris(3) (Managing Director
– IAP)
APS Kemp (1)(Non-Executive
Director)
35,475
183,338
282,387
29,480
Total Directors
530,680
Other Key Management
Personnel
JT Barbeler (2)
(Company Secretary and CFO)
181,680
2008 Year
Directors
CL Baker (Managing Director –
Group)
SG Smith (4) (Sales and Marketing
Director - Pacific Turbine Brisbane)
RS Ferris(3) (Managing Director –
IAP)
H Parker (Non-Executive Director)
RJ David (6) (Non-Executive
Director)
APS Kemp (1)(Non-Executive
Director)
R Blumberg (5)(Non-Executive
Director)
167,526
117,826
252,344
30,000
10,900
20,000
-
Total Directors
598,596
Other Key Management
Personnel
JT Barbeler (2)
(Company Secretary and CFO)
171,496
* comprising long service leave
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,299
95,189
8,963
-
-
23,297
9,171
-
-
-
-
-
-
35,475
292,789
314,855
29,480
5,299
118,486
18,134
- 672,599
-
16,139
-
2,839
200,658
11,793
69,734
5,500
5,166
9,900
-
-
-
-
-
-
21,450
3,000
8,415
-
1,962
1,800
-
-
-
-
-
-
-
-
-
-
-
254,553
132,892
282,209
33,000
12,862
21,800
-
16,959
107,846
13,915
- 737,316
-
15,030
-
6,181
192,707
(1) APS Kemp’s remuneration includes additional amounts paid for services provided in respect of corporate advisory and capital raising
strategy services totalling $5,500 (2008: $Nil).
(2) JT Barbeler was appointed CFO on 28 May 2007 and company secretary on 15 June 2007.
(3) RS Ferris was appointed Managing Director (IAP Division) on 21 September 2006.
(4) SG Smith resigned on 30 November 2007.
(5) R Blumberg was appointed on 4 July 2007 and resigned on 22 February 2008.
(6) RJ David resigned on 22 February 2008.
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Directors’ Report
for the year ended 30 June 2009 (Continued)
B.
Details of Remuneration (Continued)
■■
There were no other executives in the current or prior
year. All Directors and other key management personnel
are employed by PTB Group Limited except Mr S Ferris
who was employed by IAP Group Australia Pty Ltd from
1 July 2008. Cash bonuses were paid during the current
and prior year to non-key management personnel. No
specific service or performance criteria were used to
determine the amount of the bonuses.
No share-based payment compensation benefits were
granted in the current year. Details of benefits provided
in the prior year, which were in the form of share
options, are given in section D below. No specific service
or performance criteria were used to determine the
amount of the grant.
C.
Service Contracts
Termination by a minimum of
Notice period –
12 month’s notice in writing by either party
other than for gross misconduct. Termination
payment is equivalent to one year’s salary plus
superannuation as noted above.
RS Ferris (Managing Director – IAP)
■■
■■
■■
Minimum of three years
Term of agreement –
commencing 17 December 2007;
$280,000 inclusive of
Base annual salary –
9% superannuation and vehicle allowance to
be reviewed annually by the remuneration
committee; and
Notice period –
Termination by a minimum of
12 month’s notice in writing by either party
other than for gross misconduct. Termination
payment is equivalent to one year’s salary plus
superannuation as noted above.
Major provisions of service agreements with Executive
Directors and other key management personnel as at 30
June 2009 are set out below:
JT Barbeler (Company Secretary and Chief
Financial Officer)
CL Baker (Managing Director – Group)
■■
■■
Minimum of three years
Term of agreement –
commencing 17 December 2007;
$280,000 inclusive of
Base annual salary –
9% superannuation and vehicle allowance to
be reviewed annually by the remuneration
committee; and
■■
■■
■■
– Indefinite with a notice
Term of agreement
period of one month;
$195,030 inclusive of 9%
Base annual salary –
superannuation to be reviewed annually by the
remuneration committee; and
– Termination by one month’s
Notice period
notice in writing by either party other than for
gross misconduct.
No other key management personnel are subject to
service agreements.
D.
Share-based Payment Compensation
In the 2006 and 2007 financial years, options were granted to certain staff under the PTB Group Limited Employee
Share Option Scheme. Refer Section A above for details of the Scheme. The options are not dependent upon the
satisfaction of a performance condition as they depend upon service vesting conditions (the options vest one third
each year).
The terms and conditions of each grant of options affecting key management personnel remuneration in the previous,
current or future reporting periods are as follows:
Grant date
Expiry Date
Exercise
price
Value per
option at
grant date
Date exercisable
10 March 2005
10 March
2008
$1.15
$0.137 10 March 2006 (expired 10 March 2008).
30 September 2005 19 November
$1.60
$0.35
31 May 2007
2008
31 August
2010
$2.00
$0.54
33% after 19 August 2006, 33% after
19 August 2007, and 33% after 19 August 2008.
33% after 31 May 2008, 33% after
31 May 2009, and 33% after 31 May 2010.
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Directors’ Report
for the year ended 30 June 2009 (Continued)
D.
Share-based Payment Compensation (Continued)
Details of options over ordinary shares in the Company provided to each Director of PTB Group Limited and each
of the key management personnel of the Group in the 2009 and 2008 financial years are set out below. When
exercisable, each option is convertible into one ordinary share of PTB Group Limited.
Other Key Management Personnel
JT Barbeler
Number of options
granted during the year
Number of options vested
during the year
2009
2008
2009
2008
-
-
6,667
6,667
The amounts disclosed for remuneration relating to options above are the assessed fair values at grant date of options
granted, allocated equally over the period from grant date to vesting date. Fair values at grant date are determined
using a Binomial option pricing model which takes into account the exercise price, the term of the option, the share
price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free
interest rate for the term of the option. Refer note 25 of the financial report for the inputs into the model.
No other remuneration options granted to key management personnel were exercised or lapsed during this or the
prior financial year.
E.
Additional Information
Details of remuneration: cash bonuses and options
As both the grant of options and cash bonuses during the year were discretionary, no part of the grants was forfeited
and no part is payable in future years. For details of option vesting conditions and number vested refer to Section D.
Share-based compensation: options
There were no options granted, exercised, or lapsed during the year.
Name
A
Remuneration
consisting of
options
B
Value at grant
date
$
C
Value at exercise
date
$
D
Value at lapse
date
$
J Barbeler
1.4%
$10,754
-
-
A = The percentage of the value of remuneration consisting of options, based on the value of options expensed
during the year.
B = The value at grant date calculated in accordance with AASB 2 Share-based Payment of options granted during
the year as part of remuneration.
C = The value at exercise date of options that were granted as part of remuneration and were exercised during the year.
D = The value at lapse date of options that were granted as part of remuneration and that lapsed during the year.
Loans to Directors and Executives
There are no loans to Directors and executives.
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Directors’ Report
for the year ended 30 June 2009 (Continued)
E.
Additional Information (Continued)
Directors’ Interests
Meetings of Directors
Directors’ shares and options in the Company at the date
of this report are as follows:
Attendances by each Director during the financial year
were as follows:
Number of
Meetings Held
While a Director
Number of
Meetings
Attended
Full Board
H Parker
CL Baker
APS Kemp
RS Ferris
Remuneration
Committee
H Parker
APS Kemp
Audit and Risk
Management
Committee
H Parker
APS Kemp
12
12
12
12
1
1
2
2
12
12
12
10
1
1
2
2
Nominations Committee
Given the size of the Company and of the Board the
separate Nominations Committee was discontinued in
the year ended 30 June 2008 and the responsibility for
this function now rests with the Board.
Share Options
Shares Issued on Exercise of Options
No ordinary shares of PTB Group Limited were issued
during the year ended 30 June 2009 and subsequent
to year end on exercise of options granted under the
Employee Share Option Scheme.
Shares Under Option
At the date of this report, PTB Group Limited has
unissued ordinary shares under option as follows:
Exercise
price
No. of ordinary
shares
Expiry date
of options
$0.40
$1.60
$2.00
4,588,800
120,000
40,000
30 November 2010
20 February 2010
31 August 2010
Ordinary
Shares
Number
Share
Options
Unsecured
Notes
CL Baker
RS Ferris
H Parker
APS Kemp
1,782,104
6,908,054
296,000
181,982
-
-
-
414,800
-
-
-
414,800
Indemnification and Insurance of Directors,
Officers and Auditors
During or since the end of the financial year, the
Company has not given any indemnity or entered into
any agreement to indemnify, or paid or agreed to pay
insurance premiums in relation to an officer or auditor,
except as detailed below.
The Company has Directors and Officers insurance in
place for all Directors and officers of the Company.
This insurance insures any person who is or has been
an officer of the Company against certain liabilities in
respect of their duties as an officer of the Company, and
any other payments arising from or in connection with
such proceedings, other than where such liabilities arise
from conduct involving a wilful breach of duty.
The policy prohibits disclosure of details of the cover and
the amount of the premium paid.
Proceedings on Behalf of the Company
No person has applied to the Court under section
237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to 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 part of those proceedings.
No proceedings have been brought or intervened in on
behalf of the Company with leave of the Court under
section 237 of the Corporations Act 2001.
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Directors’ Report
for the year ended 30 June 2009 (Continued)
E.
Additional Information (Continued)
Rounding of Amounts
The Company is of a kind referred to in class order
98/100,
issued by the Australian Securities and
Investments Commission, relating to the “rounding off”
of amounts in the Directors’ report. Amounts in the
Directors’ report have been rounded off in accordance
with that class order to the nearest thousand dollars, or
in certain cases, the nearest dollar.
This report is made in accordance with a resolution
of the Directors.
H Parker
Chairman
Brisbane
25th September 2009
Non-Audit Services
The Company may decide to employ the auditor on
assignments additional to statutory audit duties where
the auditor’s expertise and experience with the Company
are important.
The Board of Directors has considered the position and,
in accordance with the advice received from the audit
committee is satisfied that the provision of non-audit
services during the year is compatible with the general
standard of independence for auditors imposed by the
Corporations Act 2001. The Directors are satisfied the
provision of non-audit services by the auditor, as set out
below, did not compromise the auditor independence
requirements of the Corporations Act 2001 for the
following reasons:
■■
■■
all non-audit services have been reviewed by the
audit committee to ensure they do not impact the
impartiality and objectivity of the auditor; and
none of the services undermine the general
principles relating to auditor independence as set
out in APES 110 Code of Ethics for Professional
Accountants, including reviewing or auditing the
auditor’s own work, acting in a management or
a decision-making capacity for the company,
acting as advocate for the company or jointly
sharing economic risk and rewards.
During the year WHK Horwath, the Company’s auditor,
has performed other services in addition to their
statutory audit duties as set out in note 26. During the
year the following non-audit service fees were paid
or payable for services provided by the auditor of the
company:
Non Audit Services-
WHK Horwath
Taxation compliance
Other taxation consulting
2009
$
2008
$
31,180
39,800
55,000
-
The lead auditor’s independence declaration is set out on
page 18 and forms part of the Directors’ Report for the
year ended 30 June 2009.
WHK Horwath continues in office in accordance with
Section 327 of the Corporations Act 2001.
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Auditor’s Independence Declaration
for the year ended 30 June 2009
To the Directors of PTB Group Limited
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2009 there have been:
(i) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation
to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.
WHK Horwath
Don Langdon
Principal
Signed at Brisbane 25th September 2009.
Liability limited by a scheme approved by Professional Standards Legislation other than for acts or omissions by
financial services licensees.
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Corporate Governance Statement
for the year ended 30 June 2009
Scope of responsibility of the Board
Composition of the Board
Responsibility for the Company’s proper corporate
governance rests with the Board. The Board’s guiding
principle in meeting this responsibility is to act honestly,
conscientiously and fairly, in accordance with the law, in
the interests of PTB Group’s shareholders (with a view
to building sustainable value for them) and those of
employees and other stakeholders.
The Board’s broad function is to:
■■
■■
■■
Chart strategy and set financial targets for the
Company;
implementation and execution
Monitor the
of strategy and performance against financial
targets; and
Appoint and oversee the performance of
executive management and generally to take and
fulfil an effective leadership role in relation to the
Company.
Power and authority in certain areas is specifically
reserved to the Board – consistent with its function as
outlined above. These areas include:
■■
■■
■■
■■
■■
■■
■■
including
Composition of the Board itself including the
appointment and removal of Directors;
Oversight of
its
the Company
strategy, operational performance, controls and
accountability systems;
Appointment and removal of senior executives
and the Company Secretary;
Reviewing, ratifying, and monitoring systems of
risk management and internal compliance and
control, codes of ethics and conduct, and legal
and statutory compliance;
Monitoring senior management’s performance
and implementation of strategy;
Approving and monitoring the progress of major
capital expenditure, capital management, and
acquisitions and divestures; and
Approving and monitoring financial and other
reporting and the operation of committees.
The Managing Director and other senior executives are
responsible for:
■■
■■
■■
Developing corporate strategy, performance
targets, budgets, and business and operational
plans for review and ratification by the Board;
Developing,
implementing, and maintaining
appropriate policies, procedures, and practices
for the management and control of the business;
and
Execution of the overall corporate strategy and
business plans, and the day to day management
of operations.
The Board performs its role and function, consistent
with the above statement of its overall corporate
governance responsibility,
in accordance with the
following principles:
■■
■■
■■
least five
The Board should comprise at
Directors;
At least half of the Board should be non-executive
Directors independent from management; and
The Chairman of the Board should be one of the
independent non-executive Directors.
At the date of this annual report the Board comprises
four members including H Parker an independent, non-
executive Chairman, APS Kemp a non-executive Director,
and C Baker and RS Ferris who are executive Directors.
APS Kemp is not considered to be independent as he is an
executive Director of Huntington Group which provides
corporate advice to the Group. Notwithstanding the
above, the Board is of the view that such relationships
do not materially interfere with each Director’s ability to
act in the best interest of the Company.
During the previous year, three Directors resigned due
to external professional and personal commitments.
The Board will seek to appoint an independent non-
executive Director with appropriate experience during
the coming year. Notwithstanding the above, the Board
is of the view that the current composition of the Board
is adequate to ensure the best interests of shareholders
given the size and nature of the Company’s operations.
In addition, the Chairman has the deciding vote at any
meetings where a vote is initially tied.
Board Charter and Policy
The Board has adopted a charter (which will be kept under
review and amended from time to time as the Board
may consider appropriate) to give formal recognition to
the matters outlined above. This charter sets out various
other matters that are important for effective corporate
governance including the following:
■■
■■
■■
■■
■■
A detailed definition of ‘independence’;
A framework for the identification of candidates
for appointment to the Board and their selection;
A framework for individual performance review
and evaluation;
Proper training to be made available to Directors
both at the time of their appointment and on an
on-going basis;
Basic procedures for meetings of the Board and
its committees: frequency, agenda, minutes and
private discussion of management issues among
non-executive Directors;
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Corporate Governance Statement
for the year ended 30 June 2009 (Continued)
■■
■■
■■
Ethical standards and values: formalised in a
detailed code of ethics and values;
Dealings in securities: formalised in a detailed code
for securities transactions designed to ensure fair
and transparent trading by Directors and senior
management and their associates; and
Communications with shareholders and the
market.
The ARM Committee does not comply with two of the
Guidelines in that it has an equal number of independent
and non-independent Directors and that the Chairman
is also Chairman of the Board. However, the Board
believes these matters are acceptable given the size of
the Company, the nature of its business and the financial
literacy of the members.
Remuneration Committee
These initiatives, together with the other matters provided
for in the Board’s charter, are designed to ‘institutionalise’
good corporate governance and generally, to build a
culture of best practice in PTB Group’s own internal
practices and in its dealings with others.
Audit and Risk Management Committee
(‘ARM Committee’)
The purpose of this Committee is to advise on the
establishment and maintenance of a framework of
internal control and appropriate ethical standards for the
management of the Company. Its current members are
Harvey Parker and Andrew Kemp.
The Committee performs a variety of functions relevant
to risk management and internal and external reporting
and reports to the Board following each meeting. Among
other matters for which the Committee is responsible
are the following:
■■
■■
■■
■■
■■
■■
■■
■■
■■
■■
function and management
Board and committee structure to facilitate a
proper review function by the Board;
Internal control framework including management
information systems;
Corporate risk assessment and compliance with
internal controls;
Internal audit
processes supporting external reporting;
Review of financial statements and other financial
information distributed externally;
Review of the effectiveness of the audit
function;
Review of the performance and independence of
the external auditors;
Review of the external audit function to ensure
prompt remedial action by management, where
appropriate, in relation to any deficiency in, or
breakdown of, controls;
Assessing the adequacy of external reporting for
the needs of shareholders; and
Monitoring compliance with the Company’s code
of ethics.
Meetings are held at least twice each year. A broad
agenda is laid down for each regular meeting according
to an annual cycle. The Committee invites the external
auditors to attend each of its meetings.
The purpose of this Committee is to assist the Board
and report to it on remuneration and issues relevant to
remuneration policies and practices including those for
senior management and non-executive Directors. Its
current members are Harvey Parker and Andrew Kemp.
Among the functions performed by the Committee are
the following:
■■
■■
■■
■■
Review and evaluation of market practices and
trends on remuneration matters;
Recommendations to the Board in relation to the
Company’s remuneration policies and procedures;
the performance of senior
Oversight of
management and non-executive Directors; and
Recommendations to the Board in relation to the
remuneration of senior management and non-
executive Directors.
Meetings are held at least twice each year. During the
year the Executive Directors and CFO voluntarily waived
annual increases and bonuses so only one meeting was
deemed necessary.
Nominations Committee
recommendations
Best practice
issued by ASX
recommend a separate Nominations Committee to
assist the Board and report to it on selection and
appointment issues and practices including those for
senior management and non-executive Directors.
However, given the size of the Company and of the
Board the separate Nominations Committee has not
been continued and the responsibility for this function
now rests with the Board.
Best practice commitment
The Company is committed to achieving and maintaining the
highest standards of conduct and has undertaken various
initiatives, as outlined in this section, that are designed
to achieve this objective. The PTB Group’s Corporate
Governance Charter is intended to ‘institutionalise’ good
corporate governance and, generally, to build a culture of
best practice both in the Company’s own internal practices
and in its dealings with others. The Charter is available on
the Company’s website.
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Corporate Governance Statement
for the year ended 30 June 2009 (Continued)
The following are a tangible demonstration of the
Company’s corporate governance commitment:
Independent professional advice
With the prior approval of the Chairman, which
may not be unreasonably withheld or delayed, each
Director has the right to seek independent legal and
other professional advice concerning any aspect of the
Company’s operations or undertakings in order to fulfil
their duties and responsibilities as Directors. Any costs
incurred are borne by the Company.
Code of ethics and values
The Company has developed and adopted a detailed
code of ethics and values to guide Directors in the
performance of their duties.
Code of conduct for transactions in securities
The Company has developed and adopted a formal code
to regulate dealings in securities by Directors and senior
management and their associates. This is designed to
ensure fair and transparent trading in accordance with
both the law and best practice.
Charter
The code of ethics and values and the code of conduct for
transactions in securities (referred to above) both form
part of the Company’s corporate governance charter
which has been formally adopted, which complies with
the ASX document, ‘Corporate Governance Principles
and Recommendations – second edition’ (‘Guidelines’)
applying to listed entities as published in August 2007 by
the ASX Corporate Governance Council with the aim of
enhancing the credibility and transparency of Australia’s
capital markets.
The Board has assessed the Company’s current practice
against the Guidelines and outlines its assessment below:
Principle 1 – Lay solid foundations for
management and oversight
Recommendation 1.1
The role of the Board and delegation to management
have been formalised as described above in this section
and will continue to be refined, in accordance with the
Guidelines, in light of practical experience gained in
operating as a listed company. PTB Group complies with
the Guidelines in this area.
Recommendation 1.2
The process for evaluating the performance of
senior executives is outlined in section A and B of the
“Remuneration Report” included in the Directors’ Report.
PTB Group complies with the Guidelines in this area.
Recommendation 1.3
The Corporate Governance Statement and Board Charter
are available on the Company’s website. Performance
evaluations have taken place in accordance with the
process disclosed.
Principle 2 – Structure the Board to add value
Recommendation 2.1
Of the four Company Directors, Harvey Parker and
Andrew Kemp are non-executive Directors. Together the
Directors have a broad range of experience, expertise,
skills, qualifications and contacts relevant to the business
of the Company.
Andrew Kemp is not considered to be an independent
Director and consequently the Board composition
does not comply with recommendation 2.1 of the ASX
Corporate Governance Guidelines.
The Board has adopted the following measures to ensure
that independent judgment is achieved and maintained
in respect of its decision-making processes:
■■
■■
■■
Directors are entitled to seek
independent
professional advice at the Company’s expense,
subject to the approval of the Chairman;
Directors having a conflict of interest in relation
to a particular item of business must absent
themselves from the Board meeting before
commencement of discussion on the topic; and
Non-executive Directors confer on a needs basis
without management in attendance.
Recommendation 2.2 and 2.3
Harvey Parker is an independent non-executive Director
and Chairman of the Company. PTB Group complies with
the Guidelines in these areas.
Recommendation 2.4
As described above, given the size of the Company and
of the Board, the separate Nominations Committee
has not been continued and the responsibility for this
function now rests with the Board.
Recommendation 2.5 and 2.6
The performance of the Board, its committees, and
individual Directors
is evaluated annually by the
Chairman in accordance with the Company’s Corporate
Governance Charter. This review includes the mix and
experience and skills represented, the effectiveness of
Board processes, and the performance and contribution
of individual members in terms of the execution of the
required Board functions as described above, for the
relevant year. Members of the Board whose performance
is unsatisfactory are asked to retire. The Charter is
available on the Company’s website. PTB Group complies
with the Guidelines in these areas.
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Corporate Governance Statement
for the year ended 30 June 2009 (Continued)
Principle 3 – Promote ethical and responsible
■■
decision making
Recommendation 3.1
The Board encourages the highest standards of ethical
conduct by all Directors and employees of the Group.
The Board has adopted a Code of Ethics in its Corporate
Governance Charter that sets out the principles and
standards with which all Group officers and employees
are expected to comply in the performance of their
respective functions. Officers and employees are
expected to:
■■
■■
■■
■■
■■
Comply with the law;
Act honestly and with integrity;
Reduce the opportunity for situations to arise
which result in divided loyalties or conflicts of
interest;
Use PTB Group’s assets responsibly and in the
best interests of its shareholders; and
Be responsible and accountable for their actions.
Senior management immediately investigates possible
failures to comply with the principles of ethical and
responsible conduct, employing the use of third party
expertise where necessary. The appropriate level of
disciplinary action is applied where departures from
these principles are confirmed. The Charter is available
on the Company’s website. PTB Group complies with the
Guidelines in these areas.
Recommendation 3.2 and 3.3
Guidelines for dealing in securities: The Company has
developed specific written guidelines in its Corporate
Governance Charter that prohibit Directors, executives
(and their respective associates) and employees from
acquiring, selling or otherwise trading in the Company’s
shares
they possess material price-sensitive
information which is not in the public domain. Pursuant to
these guidelines, no person may deal in securities while
they are in possession of price-sensitive information.
The Company’s policy is that trading in PTB Group’s
securities is permitted, as set out below:
if
■■
■■
■■
Selling of Shares: During the four week period
after ASX announcement of half-yearly and
yearly profits and Annual General Meeting;
Buying: Employees are able to purchase shares
throughout the year except for six week periods
running up to ASX announcement of half-yearly
and yearly profits. Staff will be notified of these
timeframes;
Price Sensitive information: Both the above are
subject to the person not being in possession of
price sensitive information and the buying not
being for short term or speculative gain; and
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Trading Limits:
In no circumstances should
any person sell more than $50,000 worth of
securities unless prior to entering into discussions,
they have written approval from the Chairman
as to the form and timing of the sale and the
management of its public disclosure.
The Charter is available on the Company’s website. PTB
Group complies with the Guidelines in these areas.
Principle 4 – Safeguard integrity in financial
reporting
Recommendation 4.1, 4.2, 4.3 and 4.4
PTB Group’s Managing Director and Chief Financial
Officer report in writing to the ARM Committee that
the consolidated financial statements of PTB Group and
its controlled entities for each half 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. The ARM
Committee operates throughout the year with the primary
objective to assist the Board of Directors in fulfilling
the Board’s responsibilities relating to the accounting,
reporting and financial risk management practices of the
Company. In fulfilling this objective, the ARM Committee
meets at least two times each year. The main duties and
responsibilities of the committee include:
■■
■■
■■
■■
■■
■■
Review and consideration of statutory compliance
matters;
Review of the annual and half-yearly financial
reports;
Recommend to the Board nominations for
appointment as external auditors;
Review the scope of the audit, the level of
audit fees and the performance of the external
auditors;
Liaison with external auditors, review of audit
planning and consideration of audit results; and
Evaluation of the adequacy and effectiveness
of the Company’s administrative, operating and
accounting policies and controls through active
communication with operating management and
the external auditors.
The ARM Committee (with its own charter) does not
comply with the Guidelines in that it has an equal number of
independent and non-independent Directors, the Chairman
is also Chairman of the Board, and it has less than three
members. However, the Board believes these matters are
acceptable given the size of the Company, the nature of its
business and the financial literacy of the members.
The Charter is available on the Company’s website and
the names, qualifications, and the number of meetings
attended has been disclosed in the Directors’ Report.
Corporate Governance Statement
for the year ended 30 June 2009 (Continued)
Principle 5 – Make timely and balanced disclosure
Recommendation 5.1 and 5.2
Documented procedures
in accordance with the
Corporate Governance Charter are in place to identify
matters that are likely to have a material effect on the
price of the Company’s securities and to ensure those
matters are notified to the ASX in accordance with
the Company’s Listing Rule disclosure requirements.
The Managing Director and Chief Financial Officer are
responsible for monitoring the Company’s activities in
light of its continuous disclosure policy. The Company’s
continuous disclosure obligations are also reviewed as a
standing item on the agenda for each regular meeting
of the Board. Each Director is required at every such
meeting to confirm details of any matter within their
knowledge that might require disclosure to the market.
is
responsible
for all
The Company Secretary
communications with the ASX. All communications with
external stakeholders in respect of sensitive company
information are subject to the relevant safeguarding and
confidentiality procedures. These communications are
undertaken in light of continuous disclosure requirements
of the ASX and the broad principles of ensuring the
market is fully informed of price sensitive information.
The Charter is available on the Company’s website. PTB
Group complies with the Guidelines in these areas.
Principle 6 – Respect the rights of shareholders
Recommendation 6.1 and 6.2
The Board recognises the importance of this principle and
strives to communicate with shareholders both regularly
and clearly, both by electronic means and using more
traditional communication methods. Announcements
and reporting results are available on the Company’s
website. Shareholders are encouraged to attend and
participate at general meetings. The Company’s auditors
will always attend the annual general meeting and will
be available to answer shareholders’ questions. The
Company’s policies comply with the Guidelines in relation
to the rights of shareholders.
Principle 7 - Recognise and manage risks
Recommendation 7.1, 7.2 and 7.3
The Board is responsible for oversight of the Group’s risk
management and control framework. The ARM Committee
assists the Board in fulfilling its responsibilities in this
regard by reviewing the financial and reporting aspects
of the Group’s risk management and control framework.
The Group has implemented a policy framework included
in the Corporate Governance Charter, designed to ensure
that the Group’s risks are identified and that controls are
adequate, in place, and functioning effectively.
This framework
incorporates the maintenance of
comprehensive policies, procedures and guidelines that
encompass the Group’s activities. It addresses areas
such as, occupational health and safety, environmental
management, trade practices, IT disaster recovery and
business continuity planning. Responsibility for control
and risk management is delegated to the appropriate
level of management within the Group with the
Managing Director and Chief Financial Officer having
ultimate responsibility to the Board for the Group’s risk
management and internal control activities.
Arrangements put in place by the Board to monitor risk
management include:
■■
■■
■■
■■
Regular monthly reporting to the Board in respect
of operations and the financial position of the
Group;
Reports by the Chairman of the ARM Committee
and circulation to the Board of the minutes of
each meeting held by the ARM Committee;
Presentations made to the Board throughout
the year by appropriate members of the Group’s
management team (and/or independent advisers,
where necessary) on the nature of particular risks
and details of the measures which are either in
place or can be adopted to manage or mitigate
the risk; and
Any Director may request that operational and
project audits be undertaken by management.
Prior to signing the Group’s annual financial statements,
PTB Group’s Managing Director and Chief Financial
Officer report in writing to the ARM Committee that:
■■
■■
■■
The Company’s financial reports are complete and
present a true and fair view, in all material respects,
of the financial condition and operational results
of the Company and Group, and are in accordance
with relevant accounting standards;
The above statement is founded on a sound
system of
internal
compliance and control which implements the
policies adopted by the Board; and
The Company’s risk management and internal
compliance and control framework is operating
efficiently and effectively in all material respects.
risk management and
The Charter is available on the Company’s website. PTB
Group complies with the Guidelines in these areas.
23
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24
Corporate Governance Statement
for the year ended 30 June 2009 (Continued)
Principle 8 - Remunerate fairly and responsibly
Recommendations 8.1, 8.2, and 8.3
As detailed above, the Company has a Remuneration
committee to assist the Board and report to it on
remuneration and issues relevant to remuneration policies
and practices including those for senior management
and non-executive Directors. These policies are included
in the Company’s Corporate Governance Charter and its
current members are Harvey Parker and Andrew Kemp.
Andrew Kemp is not considered to be an independent
Director and consequently its composition does not
comply with the recommendations in 8.1 of the ASX
Corporate Governance Guidelines as it has an equal
number of independent and non-independent Directors,
the Chairman is also Chairman of the Board, and it has
less than three members. However, the Board believes
these matters are acceptable given the size of the
Company, the nature of its business and the commercial
experience of the members.
The Company’s polices relating to Directors’ and Senior
Executives’ remuneration are set out in the annual
report. Options were granted to employees under an
Employee Share Option Scheme. Options have also been
issued to executive Directors of the Company and to a
corporate adviser.
It is the Company’s objective to provide maximum
stakeholder benefit from the retention of a high quality
Board and executive team by remunerating Directors and
key executives fairly and appropriately with reference
to relevant employment market conditions. To assist
in achieving this objective, the nature and amount of
some components of executive Directors’ and officers’
emoluments are linked to the Company’s financial and
operational performance. The expected outcomes of
the remuneration structure are:
■■
■■
■■
Retention and motivation of key executives;
Attraction of quality management to the
Company; and
Performance incentives which allow executives to
share the rewards of the success of the Group.
In relation to the payment of bonuses and options, the
Board, having regard to the overall performance of PTB
Group and the performance of the employee during the
period, exercises discretion.
The Charter is available on the Company’s website and
the names and the number of meetings attended has
been disclosed in the Directors’ Report.
9
0
0
2
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R
L
A
U
N
N
A
S
E
I
T
I
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N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
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Income Statements
for the year ended 30 June 2009
Consolidated
Parent Entity
Note
2009
$’000
2008
$’000
2009
$’000
2008
$’000
Revenue
Other income
2
3
38,526
652
46,608
2,019
16,833
15,066
394
-
Cost of goods sold
Employee benefits expense
Depreciation and amortisation
Airport charges and taxes
Repairs and maintenance
Fuel costs
Bad and doubtful debts
Finance costs
Net foreign exchange loss
Net loss on sale of property, plant and
equipment
Other expenses
Total expenses
Profit/(Loss) before income tax expense
Income tax (expense)/ benefit
Profit/(Loss) for the year
Basic earnings per share
Diluted earnings per share
4
5
23
23
(18,808)
(24,961)
(10,801)
(11,029)
(5,116)
(1,442)
(750)
(256)
(553)
(621)
(4,569)
(2,517)
(136)
(5,457)
(2,224)
(2,343)
(626)
(1,483)
(1,135)
(2,836)
-
-
(2,193)
(2,337)
(179)
(223)
-
(45)
-
(327)
(268)
-
-
-
(21)
-
(843)
(396)
(137)
-
(4,077)
(3,400)
(1,931)
(1,339)
38,845
(44,465)
(15,744)
(16,325)
333
(230)
103
4,162
(1,031)
3,131
1,483
(523)
960
(1,259)
324
(935)
Cents
Cents
0.4
0.4
11.86
11.85
The income statements should be read in conjunction with the accompanying notes.
25
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26
Balance Sheets
for the year ended 30 June 2009
Consolidated
Parent Entity
Note
2009
$’000
2008
$’000
2009
$’000
2008
$’000
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instruments
Current tax assets
Other current assets
Total Current Assets
Non-Current Assets
Trade and other receivables
Other financial assets
Property, plant and equipment
Deferred tax assets
Intangible assets
Other non-current assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Borrowings
Current tax liabilities
Provisions
Other current liabilities
Total Current Liabilities
Non-Current Liabilities
Borrowings
Deferred tax liabilities
Provisions
Other non-current liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed equity
Reserves
Retained profits
Total Equity
22
6
7
8
9
10
6
11
12
13
14
10
15
16
9
18
19
16
17
18
19
20
21
466
5,438
28,494
-
353
493
1,200
17,614
27,691
1,770
517
545
154
3,966
6,378
-
353
124
750
4,085
5,550
-
443
157
35,244
49,337
10,975
10,985
15,797
-
3,914
-
27,086
24,329
10,921
14,019
1,336
441
-
108
26,825
37,800
1,263
2,357
-
237
504
9,890
14,019
1,441
715
-
-
26,065
37,050
1,450
2,809
-
355
346
2,026
4,334
116
34,719
84,056
4,626
18,404
1,423
826
1,072
26,351
4,361
4,960
14,397
2,685
201
197
17,480
43,831
40,225
27,963
1,725
10,537
40,225
-
253
49
-
302
4,663
33,137
-
3
36
40
79
5,039
32,011
28,174
28,041
274
4,689
241
3,729
33,137
32,011
2,221
4,334
367
49,805
85,049
3,458
7,823
429
702
1,034
13,446
29,462
2,702
150
279
32,593
46,039
39,010
28,096
274
10,640
39,010
The balance sheets should be read in conjunction with the accompanying notes.
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
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N
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D
E
L
L
O
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T
N
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Statements of Changes in Equity
for the year ended 30 June 2009
Contributed Equity
Reserves
Retained
Profits
Total
Issued
Capital
$’000
Other
Equity
Securities
$’000
Share
Based
Payments
$’000
Hedging
Reserve
$’000
$’000
$’000
Consolidated
At 1 July 2007
Profit/(Loss) for the year
Employee share options
Dividends paid
Issues of share capital (net of transaction
costs)
Recognition of effective cashflow hedge
27,773
183
163
-
-
-
7
-
-
-
-
-
-
-
78
-
-
-
-
-
-
-
-
1,484
7,406
35,525
3,131
3,131
-
-
-
-
78
-
7
1,484
At 30 June 2008
27,780
183
241
1,484
10,537
40,225
Profit/(Loss) for the year
Employee share options
Dividends paid
Issues of share capital
(net of transaction costs)
Recognition of effective cashflow hedge
At 30 June 2009
Parent Entity
At 1 July 2007
Profit/(Loss) for the year
Employee share options
Dividends paid
Issues of share capital (net of transaction
costs)
-
-
-
133
-
27,913
-
-
-
-
-
33
-
-
-
-
-
-
103
-
-
-
103
33
-
133
-
183
-
274
(1,484)
-
-
10,640
(1,484)
39,010
27,773
261
163
-
-
-
7
-
-
-
-
-
78
-
-
At 30 June 2008
27,780
261
241
Profit/(Loss) for the year
Employee share options
Dividends paid
Issues of share capital (net of transaction
costs)
-
-
-
133
-
-
-
-
-
33
-
-
At 30 June 2009
27,913
261
274
The statements of changes in equity should be read in conjunction with the accompanying notes.
-
-
-
-
-
-
-
-
-
-
-
4,664
32,861
(935)
(935)
-
-
-
78
-
7
3,729
32,011
960
-
-
-
960
33
-
133
4,689
33,137
27
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I
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28
Cash Flow Statements
for the year ended 30 June 2009
Consolidated
Parent Entity
Note
2009
$’000
2008
$’000
2009
$’000
2008
$’000
Cash Flow From Operating Activities
Cash receipts in the course of operations
39,592
40,840
18,024
19,325
Cash payments in the course of operations
(33,248)
(41,030)
(17,599)
(17,286)
Interest received
Finance costs
GST recovered/(paid)
Income taxes paid
524
596
(3,449)
(2,136)
209
394
(1,518)
(1,290)
105
(268)
957
(162)
286
(396)
656
(679)
Net cash provided by/(used in) operating
activities
22(b)
2,110
(2,626)
1,057
1,906
Cash Flow From Investing Activities
Proceeds from sale of subsidiary (net of
cash disposed)
271
-
Payments for property, plant and equipment
(5,789)
(3,684)
-
(191)
Proceeds on disposal of property, plant and
equipment
Net proceeds/(repayment) of loans to
subsidiaries
Net cash provided by/(used in) investing
activities
Cash Flow From Financing Activities
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Proceeds from issue of shares
Share issue transaction costs
Dividends paid
Net cash provided by/(used in) financing
activities
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at the beginning
of the year
Cash and cash equivalents at the end of
the year
1,909
2,309
136
-
-
(1,105)
(3,609)
(1,375)
(1,160)
-
(60)
3
555
498
5,384
(4,927)
(68)
-
(11)
-
378
14,147
(8,372)
(161)
7
-
-
976
378
(1,709)
(1,771)
-
-
(11)
-
-
7
-
-
5,621
(744)
(1,386)
(1,121)
1,620
(847)
1,018
667
(953)
22(a)
(454)
667
750
(97)
(268)
750
The cash flow statements should be read in conjunction with the accompanying notes.
9
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2
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Notes to the Financial Statements
for the year ended 30 June 2009
1.
Summary of Significant Accounting
Policies
The principal accounting policies adopted
in the
preparation of the financial report are set out below.
These policies have been consistently applied to all
the years presented, unless otherwise stated. The
financial report includes separate financial statements
for PTB Group Limited as an individual entity and the
consolidated entity consisting of PTB Group Limited and
its subsidiaries.
(a)
Basis of preparation
This general purpose financial report has been prepared
in accordance with Australian Accounting Standards and
the Corporations Act 2001, and was authorised for issue
on 25 September 2009.
Compliance with IFRSs
to
include Australian
Australian Accounting Standards
equivalents
International Financial Reporting
Standards (AIFRS). Compliance with AIFRS ensures
that the consolidated financial statements and notes of
PTB Group Limited comply with International Financial
Reporting Standards (IFRSs). The parent entity financial
statements and notes also comply with IFRSs.
Historical cost convention
These financial statements have been prepared under the
historical cost convention, as modified by the revaluation
of available-for-sale financial assets, financial assets and
liabilities (including derivative instruments) at fair value
through the income statement, and certain classes of
property, plant and equipment.
Critical accounting estimates
The preparation of financial statements in conformity
with AIFRS requires the use of certain critical accounting
estimates. It also requires management to exercise
its judgement in the process of applying the Group’s
accounting policies. The areas involving a higher degree
of judgement or complexity, or areas where assumptions
and estimates are significant to the financial statements
are disclosed in note 1(ad).
(b) Principles of consolidation
The consolidated financial statements incorporate the
assets and liabilities of all subsidiaries of PTB Group
Limited (“company” or “parent entity”) as at 30 June
2009 and the results of all subsidiaries for the year then
ended. PTB Group Limited and its subsidiaries together
are referred to in this financial report as the Group or the
consolidated entity. For details of the subsidiaries refer
note 31.
Subsidiaries are all those entities 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. The existence
and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing
whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are de-
consolidated from the date that control ceases.
The purchase method of accounting is used to account
for the acquisition of subsidiaries by the Group (refer
note 1(i)).
Intercompany transactions, balances and unrealised
gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless
the transaction provides evidence of the impairment of
the asset transferred. Accounting policies of subsidiaries
have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Investments in subsidiaries are accounted for at cost
in the individual financial statements of PTB Group
Limited.
(c)
Segment reporting
A business segment is a group of assets and operations
engaged in providing products or services that are subject
to risks and returns that are different to those of other
business segments. A geographical segment is engaged
in providing products or services within a particular
economic environment subject to risks and returns
that are different from those of segments operating in
other economic environments. Intersegment pricing is
at cost.
(d)
Foreign currency translation
(i)
Functional and presentation currency
Items included in the financial statements of each of
the Group’s entities are measured using the currency of
the primary economic environment in which the entity
operates (‘the functional currency’). The consolidated
financial statements are presented in Australian dollars,
which is PTB Group Limited’s functional and presentation
currency.
(ii)
Transactions and balances
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing
at the dates of the transactions.
29
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Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
1.
Summary of Significant Accounting
Policies (Continued)
(e) Revenue recognition
(d)
Foreign currency translation (Continued)
Foreign exchange gains and
losses resulting from
the settlement of such transactions and from the
translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies
are recognised in the income statement, except when
deferred in equity as qualifying cash flow hedges and
qualifying net investment hedges, or are attributable to
part of the net investment in a foreign operation.
Translation differences on assets and liabilities carried
at fair value are reported as part of the fair value gain
or
loss. Translation differences on non-monetary
assets and liabilities such as equities held at fair value
through the income statement are recognised in the
income statement as part of the fair value gain or loss.
Translation differences on non-monetary financial assets
such as equities classified as available-for-sale financial
assets are included in the fair value reserve in equity.
(iii) Group companies
The results and financial position of all the Group entities
(none of which has the currency of a hyperinflationary
economy) that have a functional currency different
from the presentation currency are translated into the
presentation currency as follows:
■■
■■
■■
Assets and liabilities for each balance sheet
presented are translated at the closing rate at the
date of that balance sheet;
Income and expenses for each income statement
are translated at average exchange rates (unless
this is not a reasonable approximation of the
cumulative effect of the rates prevailing on
the transaction dates, in which case income
and expenses are translated at the dates of the
transactions); and
All resulting exchange differences are recognised
as a separate component of equity.
On consolidation, exchange differences arising from the
translation of any net investment in foreign entities,
and of borrowings and other financial instruments
designated as hedges of such investments, are taken to
shareholders’ equity. When a foreign operation is sold
or any borrowings forming part of the net investment
are repaid, a proportionate share of such exchange
differences are recognised in the income statement, as
part of the gain or loss on sale where applicable.
9
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I
Revenue is measured at the fair value of the consideration
received or receivable. Amounts disclosed as revenue are
net of returns, trade allowances, rebates, and amounts
collected on behalf of third parties.
The Group recognises revenue when the amount of
revenue can be reliably measured, it is probable that
future economic benefits will flow to the entity and
specific criteria have been met for each of the Group’s
activities as described below. The amount of revenue
is not considered to be reliably measurable until all
contingencies relating to the sale have been resolved.
Revenue is recognised for the major business activities
as follows:
■■
■■
■■
■■
■■
■■
Revenue from the sale of goods is recognised
when the significant risks and rewards of
ownership of the goods have passed to the buyer
and can be measured reliably. Risks and rewards
are considered passed to the buyer at time of
delivery to customers;
Revenue from repairs is recognised at the time
the service is performed;
Revenue from sale of goods and provision
is
of services under maintenance contracts
recognised in accordance with the stage of
completion method unless the outcome of the
contract cannot be reliably estimated. When
the outcome of the contract cannot be reliably
estimated, contract costs are recognised as an
expense as incurred, and where it is probable that
costs will be recovered, revenue is recognised to
the extent of costs incurred;
Interest on extended credit receivables (under
hire purchase agreements)
recognised
progressively by the Group over the hire purchase
term to achieve a constant periodic rate of return
on the carrying amount of the receivable (being
the Group’s net investment in the hire purchase
arrangement);
recognised on a basis
Rental
representative of the time pattern in which the
benefit of use derived from the asset is diminished.
For engines rental, income is recognised based on
an hourly rate and hours of usage. For aircraft
rental, income is recognised on a straight-line
basis over the lease term; and
Airline revenue that mainly arises from passenger
ticket sales
is
performed.
is recognised when uplift
income
is
is
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
1.
Summary of Significant Accounting
Policies (Continued)
(f) Unearned revenue
Unearned revenue includes amounts received in advance
from customers. Such amounts are recorded as revenue
in the income statement when the above revenue
recognition criteria are met.
(g)
Income tax
The income tax expense or revenue 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
bases of assets and liabilities and their carrying amounts
in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for
temporary differences at the tax rates expected to
apply when the assets are recovered or liabilities are
settled, based on those tax rates which are enacted
or substantively enacted for each jurisdiction. The
relevant tax rates are applied to the cumulative amounts
of deductible and taxable temporary differences to
measure the deferred tax asset or liability. An exception
is made for certain temporary differences arising from
the initial recognition of an asset or a liability. No deferred
tax asset or liability is recognised in relation to these
temporary differences if they arose in a transaction,
other than a business combination, that at the time of
the transaction did not affect either accounting profit or
taxable profit or loss.
Deferred tax assets are recognised for deductible
temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to
utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for
temporary differences between the carrying amount and
tax bases of investments in controlled entities where the
parent entity is able to control the timing of the reversal
of the temporary differences and it is probable that the
differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate
to the same taxation authority. Current tax assets and
tax liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle
on a net basis, or to realise the asset and settle the
liability simultaneously.
Current and deferred tax balances attributable to
amounts recognised directly in equity are also recognised
directly in equity.
Tax consolidation legislation
PTB Group Limited and its wholly-owned Australian
implemented the tax
controlled entities have not
consolidation legislation. Accordingly, the income tax
expense, tax payable and deferred tax assets and
liabilities of each entity are calculated on a standalone
basis and are recognised in the entity to which they
relate.
(h)
Leased assets
Leases are classified as finance leases whenever the
terms of the lease transfer substantially all the risks and
rewards of ownership to the lessee. All other leases are
classified as operating leases.
As lessor
Amounts due from lessees under finance leases are
recorded as receivables. Finance lease receivables are
initially recognised at amounts equal to the net investment
in the lease. Finance lease payments receivable are
allocated between interest revenue and reduction of
the lease receivable over the term of the lease in order
to reflect a constant periodic rate of return on the net
investment outstanding in respect of the lease.
For operating leases, the leased asset (rental engines
and aircraft) is classified as a non-current asset and
depreciated in accordance with the depreciation policy
set out in note 1(q). Rental income from operating
leases is recognised as set out in note 1(e).
As lessee
Assets held under finance leases are initially recognised
at their fair value or, if lower, at amounts equal to present
value of the minimum lease payments, each determined
at the inception of the lease. The corresponding liability
to the lessor is included in the balance sheet as a finance
lease obligation, net of finance charges.
Lease payments are apportioned between finance
charges and reduction of the lease obligation so as to
achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged
directly against
income, unless they are directly
attributable to qualifying assets, in which case they are
capitalised in accordance with the consolidated entity’s
general policy on borrowing costs. Refer to note 1(u).
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Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
1.
Summary of Significant Accounting
Policies (Continued)
(h)
Leased assets (Continued)
Finance leased assets are amortised on a diminishing
value basis over the estimated useful life of the asset.
Refer note 1(q).
Operating lease payments are recognised as an expense
on a straight-line basis over the lease term, except
where another systematic basis is more representative
of the time pattern in which economic benefits from the
leased asset are consumed.
(i)
Business combinations
The purchase method of accounting is used to account
for all business combinations regardless of whether
equity instruments or other assets are acquired. Cost is
measured as the fair value of the assets given, equity
instruments issued or liabilities incurred or assumed at
the date of exchange plus costs directly attributable to
the acquisition. Where equity instruments are issued
in an acquisition, the fair value of the instruments is
their published market price as at the date of exchange
unless, in rare circumstances, it can be demonstrated
that the published price at the date of exchange is an
unreliable indicator of fair value and that other evidence
and valuation methods provide a more reliable measure
of fair value. Transaction costs arising on the issue of
equity instruments are recognised directly in equity.
Identifiable assets acquired and liabilities and contingent
liabilities assumed
in a business combination are
measured initially at their fair values at the acquisition
date, irrespective of the extent of any minority interest.
The excess of the cost of acquisition over the fair value of
the Group’s share of the identifiable net assets acquired
is recorded as goodwill. If the cost of acquisition is less
than the Group’s share of the fair value of the identifiable
net assets of the subsidiary acquired, the difference
is recognised directly in the income statement, but
only after a reassessment of the identification and
measurement of the net assets acquired.
Where settlement of any part of cash consideration
is deferred, the amounts payable in the future are
discounted to their present value as at the date
of exchange. The discount rate used is the entity’s
incremental borrowing rate, being the rate at which a
similar borrowing could be obtained from an independent
financier under comparable terms and conditions.
(j)
Impairment of assets
Goodwill and intangible assets that have an indefinite
useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events
or changes in circumstances indicate that they might
be impaired. Other assets are reviewed for impairment
whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which
the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an
asset’s fair value less costs to sell and value in use. For the
purposes of assessing impairment, assets are grouped
at the lowest levels for which there are separately
identifiable cash inflows (cash generating units).
(k) Cash and cash equivalents
For cash flow statement presentation purposes, cash
and cash equivalents includes cash on hand, deposits
held at call with financial institutions, other short-
term, highly liquid investments with original maturities
of three months or less that are readily convertible to
known amounts of cash and which are subject to an
insignificant risk of changes in value, and bank overdrafts.
Bank overdrafts are shown within borrowings in current
liabilities on the balance sheet.
(l)
Trade and other receivables
Trade and other receivables are recognised initially at
fair value and subsequently measured at amortised cost
using the effective interest method, less provision for
impairment. Trade receivables are due for settlement in
30 to 90 days.
Collectibility of receivables is reviewed on an ongoing
basis. Debts which are known to be uncollectible are
written off by reducing the carrying amount directly.
A provision for impairment is established when there
is objective evidence that the Group will not be able
to collect all amounts due according to the original
terms of receivables. The amount of the provision is the
difference between the asset’s carrying amount and the
present value of estimated future cash flows, discounted
at the original effective interest rate. The amount of
the provision is recognised in the income statement.
Cashflows relating to short-term receivables are not
discounted if the effect of discounting is immaterial.
(m)
Inventories
Raw materials, work in progress, and finished goods
Inventories are stated at the lower of cost and net
realisable value. Costs are assigned to individual items
of stock by specific identification. Net realisable value
is the estimated selling price in the ordinary course of
business less the estimated costs of completion and the
estimated costs necessary to make the sale.
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Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
1.
Summary of Significant Accounting
Policies (Continued)
(m)
Inventories (Continued)
Land held for resale
Land held for sale is stated at the lower of cost and net
realisable value. Cost is assigned by specific identification
and includes the cost of acquisition and development costs.
(n) Other financial assets
The Group classifies its investments in the following
categories: financial assets at fair value through profit or
loss, loans and receivables, held-to-maturity investments,
and available-for-sale financial assets. The classification
depends on the purpose for which the investments were
acquired. Management determines the classification of
its investments at initial recognition and re-evaluates this
designation at each reporting date.
The Group has no financial assets at fair value through
profit or loss, held-to-maturity investments or available-
for-sale financial assets.
Loans and receivables
Loans and receivables are non-derivative financial
assets with fixed or determinable payments that are
not quoted in an active market. They arise when the
Group provides money, goods or services directly to a
debtor with no intention of selling the receivable. They
are included in current assets, except for those with
maturities greater than 12 months after the balance
sheet date which are classified as non-current assets.
Loans and receivables are included in trade and other
receivables in the balance sheet.
Loans and receivables are initially recognised at fair
value plus transaction costs and subsequently carried at
amortised cost using the effective interest method.
The Group assesses at each balance date whether there
is objective evidence that a financial asset or group of
financial assets is impaired.
Fair value estimation
The fair value of financial assets and financial liabilities
must be estimated for recognition and measurement or
for disclosure purposes.
The fair value of financial instruments traded in active
markets (such as publicly traded derivatives, and trading
and available-for-sale securities) is based on quoted
market prices at the balance sheet date. The quoted
market price used for financial assets held by the Group
is the current bid price; the appropriate quoted market
price for financial liabilities is the current ask price.
The fair value of financial instruments that are not
traded in an active market is determined using valuation
techniques. The Group uses a variety of methods and
makes assumptions that are based on market conditions
existing at each balance date. Quoted market prices or
dealer quotes for similar instruments are used for long-
term debt instruments held. Other techniques, such as
estimated discounted cash flows, are used to determine
fair value for the remaining financial instruments.
The nominal value less estimated credit adjustments
of trade receivables and payables are assumed to
approximate their fair values due to their short-term
nature. The fair value of financial liabilities for disclosure
is estimated by discounting the future
purposes
contractual cash flows at the current market interest
rate that is available to the Group for similar financial
instruments.
(o)
Leasehold improvements
The cost of improvements to or on leasehold properties
is amortised over the unexpired period of the lease or
the estimated useful life of the improvement to the
Group, whichever is the shorter. Refer note 1(q).
(p) Derivatives and hedging activities
Derivatives are initially recognised at fair value on
the date a derivative contract is entered into and are
subsequently remeasured to their fair value at each
reporting date. The accounting for subsequent changes
in fair value depends on whether the derivative is
designated as a hedging instrument, and if so, the nature
of the item being hedged. The Group designates certain
derivatives as either:
■■
■■
■■
Hedges of the fair value of recognised assets
and liabilities or a firm commitment (fair value
hedges);
Hedges of the cashflows of recognised assets and
liabilities and highly probable forecast transactions
(cashflow hedges); or
Hedges of a net investment in a foreign operation
(net investment hedges).
At the
inception of the hedging transaction the
Group documents the relationship between hedging
instruments and hedged items, as well as its risk
management objective and strategy for undertaking
various hedge transactions. The Group also documents
its assessment, both at hedge inception and on an
ongoing basis, of whether the derivatives that are used
in hedging transactions have been and will continue to
be highly effective in offsetting changes in fair values or
cashflows of hedged items.
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Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
1.
Summary of Significant Accounting
Policies (Continued)
(p)
Derivatives and hedging activities
(Continued)
The fair values of various derivative financial instruments
used for hedging purposes are disclosed in note 8.
Movements in the hedging reserve in shareholders
equity are shown in note 21. The full fair value of a
hedging derivative is classified as a non-current asset or
liability when the remaining maturity of the hedged item
is more than 12 months. If the remaining maturity of the
hedged item is less than 12 months it is classified as a
current asset or liability. Trading derivatives are classified
as a current asset or liability.
Fair value hedge
Changes in the fair value of derivatives that are
designated and qualify as fair value hedges are recorded
in the income statement, together with any changes in
the fair value of the hedged asset or liability that are
attributable to the hedged risk. The gain or loss relating
to the effective portion of interest rate swaps hedging
fixed rate borrowings is recognised in the income
statement within ‘finance costs’, together with changes
in the fair value of the hedged fixed rate borrowings
attributable to interest rate risk. The gain or loss relating
to the ineffective portion is recognised in the income
statement within ‘other income’ or ‘other expenses’.
If the hedge no longer meets the criteria for hedge
accounting, the adjustment to the carrying amount of
a hedged item for which the effective interest method
is used is amortised to the income statement over
the period to maturity using a recalculated effective
interest rate.
Cashflow hedge
The effective portion of changes in the fair value of
derivatives that are designated and qualify as cashflow
hedges is recognised in equity in the hedging reserve.
The gain or loss relating to the ineffective portion is
recognised immediately in the income statement within
‘other income’ or ‘other expense’.
Amounts accumulated in equity are recycled in the
income statement in the periods when the hedged item
affects profit or loss. The gain or loss relating to the
effective portion of interest rate swaps hedging variable
rate borrowings is recognised in the income statement
within ‘finance costs’. The gain or loss relating to the
effective portion of forward foreign exchange contracts
hedging export sales is recognised in the income
statement within ‘sales’. However when the forecast
transaction that is hedged results in the recognition of
a non-financial asset the gains and losses previously
deferred in equity are transferred from equity and
included in the initial measurement of the cost of the
asset. The deferred amounts are ultimately recognised in
the income statement as costs of goods sold in the case
of inventory, or as depreciation in the case of property,
plant and equipment.
When a hedging instrument expires or is sold or
terminated, or when a hedge no longer meets the criteria
for hedge accounting, any cumulative gain or loss existing
in equity at that time remains in equity and is recognised
when the forecast transaction is ultimately recognised
in the income statement. When a forecast transaction is
no longer expected to occur, the cumulative gain or loss
that was reported in equity is immediately transferred to
the income statement.
Net investment hedges
Hedges of net investments in foreign operations are
accounted for similarly to cashflow hedges. Any gain or
loss on the hedging instrument relating to the effective
portion of the hedges is recognised in equity. The gain
or loss relating to the ineffective portion is recognised
immediately in the income statement, within ‘other
income’ or ‘other expense’. Gains or losses accumulated
in equity are included in the income statement when the
foreign operation is partially disposed of or sold.
Derivatives that do not qualify for hedge
accounting
Certain derivative instruments do not qualify for hedge
accounting. Changes in the fair value of any derivative
instrument that does not qualify for hedge accounting
are recognised immediately in the income statement and
are included in ‘other income’ or ‘other expenses’.
(q) Property, plant and equipment
Property, plant and equipment is stated at historical cost
less depreciation. Historical cost includes expenditure
that is directly attributable to the acquisition of the
items. Cost may also include transfers from equity of any
gains/losses on qualifying cashflow hedges of foreign
currency purchases of property, plant and equipment.
Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the Group and the
cost of the item can be measured reliably. All other repairs
and maintenance are charged to the income statement
during the financial period in which they are incurred.
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Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
1.
Summary of Significant Accounting
Policies (Continued)
The assets’ residual values and useful lives are reviewed,
and adjusted if appropriate, at each balance sheet date.
(q) Property, plant and equipment (Continued)
Increases in the carrying amounts arising on revaluation
of land and buildings are credited, net of tax, to the
revaluation reserve in shareholders’ equity. To the
extent that the increase reverses a decrease previously
recognised in the income statement, the increase is first
recognised in the income statement. Decreases that
reverse previous increases of the same asset are first
charged against revaluation reserves directly in equity
to the extent of the remaining reserve attributable
to the assets, all other decreases are charged to the
income statement.
Depreciation is generally calculated on a straight-line
(SL) or diminishing value (DV) basis so as to allocate the
cost, net of residual values, of each item of property,
plant and equipment (excluding land and rental engines)
over its estimated useful life to the Group. For rental
engines, depreciation
is based on the estimated
operating hours. The line item in the income statement
in which the depreciation and amortisation of property,
plant and equipment is included is ‘depreciation and
amortisation expense’.
The estimated useful lives are as follows:
Class
Life
Basis
5 years
40 years
Buildings
Leasehold
improvements
Leasehold
improvements –
leased
Plant and equipment 3–10 years
Plant and equipment
– leased
6–8 years
6 years
SL
SL
SL
DV
Rental engines
Airframes
5,500–
7,000 hours
15–20 years SL
DV
Actual hours as
a proportion of
estimated total
operating hours
Certain items of plant and equipment, primarily rental
engines, are required to be overhauled on a regular basis.
This is managed as part of an ongoing major cyclical
maintenance program. The costs of this maintenance
are charged as expenses as incurred, except where they
relate to the replacement of a component of an asset, in
which case the costs are capitalised and depreciated in
accordance with the above. The carrying amount of the
replaced part is derecognised. Other routine operating
maintenance, repair and minor renewal costs are also
charged as expenses as incurred.
An asset’s carrying amount is written down immediately
to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount (note
1 (j)).
Gains and losses on disposals are determined by
comparing proceeds with carrying amount. These are
included in the income statement. When re-valued
assets are sold, it is Group policy to transfer the amounts
included in revaluation reserves in respect of those
assets to retained earnings.
(r)
Intangibles
Goodwill
Goodwill represents the excess of the cost of an
acquisition over the fair value of the Group’s share of
the net identifiable assets of the acquired subsidiary
at the date of the acquisition. Goodwill on acquisitions
of subsidiaries is included in intangible assets. Goodwill
is not amortised. Instead it is tested for impairment
annually, or more frequently if events or changes in
circumstances indicate that it might be impaired, and
is carried at cost less accumulated impairment losses.
Gains and losses on the disposal of an entity include the
carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to the cash generating units for the
purpose of impairment testing.
Computer software
Costs incurred in acquiring software and licenses that
will contribute to future period financial benefits through
revenue generation and/or cost reduction are capitalised
to software and systems. Costs capitalised include
external direct costs of materials and service, direct
payroll and payroll related costs of employees’ time spent
on the project. Computer software has a finite life and is
carried at cost less any accumulated amortisation and
any impairment losses. Computer software is amortised
on a straight-line basis over its estimated useful life of
7 years. The line item in the income statement in which
the amortisation of computer software is included is
‘depreciation and amortisation’ expense.
(s)
Trade and other payables
Trade and other payables are recognised initially at fair
value and subsequently measured at amortised cost.
These amounts represent liabilities for goods and services
provided to the Group prior to the end of the financial
year which are unpaid. The amounts are unsecured and
are usually paid within 30 days of recognition.
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Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
1.
Summary of Significant Accounting
Policies (Continued)
(t)
Borrowings
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 borrowings using the effective
interest method. Fees paid on the establishment of loan
facilities, which are not an incremental cost relating to
the actual draw-down of the facility, are recognised as
prepayments and amortised on a straight-line basis over
the term of the facility.
The fair value of the liability portion of a note (with
an attached option to convert into ordinary shares) is
determined using a market interest rate for an equivalent
non-convertible note. This amount is recorded as a
liability on an amortised cost basis until extinguished on
conversion or maturity of the note. The remainder of the
proceeds is allocated to the conversion option. This is
recognised and included in shareholders’ equity, net of
income tax effects.
Borrowings are removed from the balance sheet when
the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying
amount of a financial liability that has been extinguished
or transferred to another party and the consideration
paid, including any non-cash assets transferred or
liabilities assumed, is recognised in ‘other income’ or
‘other expense’.
Borrowings are classified as current liabilities unless the
Group has an unconditional right to defer settlement
of the liability for at least 12 months after the balance
sheet date.
(u) Borrowing costs
Borrowing costs incurred for the construction of any
qualifying asset are capitalised during the period of
time that is required to complete and prepare the asset
for its intended use or sale. Other borrowing costs are
expensed. The amount of borrowing costs capitalised
is determined as the actual borrowing costs incurred
as funds are borrowed specifically for the purpose of
obtaining a qualifying asset.
(v)
Employee benefits
Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary
benefits, annual leave and accumulating sick leave
expected to be settled within 12 months of the reporting
date are recognised in the employee benefits provision in
respect of employees’ services up to the reporting date
and are measured at the amounts expected to be paid
when the liabilities are settled.
Long service leave
The liability for long service leave is recognised in the
employee benefits provision and measured as the
present value of expected future payments to be made
in respect of services provided by employees up to
the reporting date. Consideration is given to expected
future wage and salary levels, experience of employee
departures and periods of service. Expected future
payments are discounted using market yields at the
reporting date on national government bonds with
terms to maturity and currency that match, as closely as
possible, the estimated future cash outflows.
Superannuation
The Group makes contributions to defined contribution
superannuation funds. Contributions are recognised
as an expense as they become payable. Prepaid
contributions are recognised as an asset to the extent
that a cash refund or a reduction in the future payments
is available.
Share-based payments
Share-based compensation benefits are provided to
employees via the PTB Group Limited Employee Share
Option Scheme as detailed in note 25.
The fair value of options granted under the PTB Group
Limited Employee Share Option Scheme is recognised
as an employee benefit expense with a corresponding
increase in equity. The fair value is measured at grant
date and recognised over the period during which the
employees become unconditionally entitled to the
options.
The fair value at grant date is determined using a
Binomial option pricing model that takes into account
the exercise price, the term of the option, the share
price at grant date and expected price volatility of the
underlying share, the expected dividend yield and the
risk-free interest rate for the term of the option.
The fair value of the options granted excludes the impact
of any non-market vesting conditions (for example,
profitability and sales growth targets and performance
and service criteria). Non-market vesting conditions are
included in assumptions about the number of options
that are expected to become exercisable. At each balance
sheet date, the entity revises its estimate of the number
of options that are expected to become exercisable. The
employee benefit expense recognised each period takes
into account the most recent estimate.
9
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A
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N
N
A
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I
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D
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L
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Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
1.
Summary of Significant Accounting
Policies (Continued)
(v)
Employee benefits (Continued)
Profit sharing and bonus plans
The Group recognises a liability and an expense for
bonuses and profit sharing based on a formula that
takes into consideration the profit attributable to the
company’s shareholders after certain adjustments.
The Group recognises a provision where contractually
obliged or where there is a past practice that has created
a constructive obligation.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in
the determination of basic earnings per share to take
into account the after income tax effect of interest and
other financing costs associated with dilutive potential
ordinary shares and the weighted average number of
shares assumed to have been issued for no consideration
in relation to dilutive potential ordinary shares.
(aa) Goods and services tax
Revenues, expenses and assets are recognised net of
the amount of goods and services tax (GST), except:
(w) Provisions
Provisions for service warranties and make good
obligations are recognised when the Group has a present
legal or constructive obligation as a result of past
events, it is probable that an outflow of resources will
be required to settle the obligation and the amount has
been reliably estimated.
Provisions are measured at the present value of
management’s best estimate of the expenditure required
to settle the present obligation at the reporting date.
The discount rate used to determine the present value
reflects current market assessments of the time value of
money and the risks specific to the liability.
(x) Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of
new shares or options are shown in equity as a deduction,
net of tax, from proceeds.
(y) Dividends
■■
■■
Where the amount of GST incurred is not
recoverable from the taxation authority, it is
recognised as part of the cost of acquisition of an
asset or as part of an item of expense; or
receivables and payables which are
For
recognised inclusive of GST. The net amounts of
GST recoverable from, or payable to, the taxation
authority is included as part of receivables or
payables.
(ab) Rounding of amounts
The company is of a kind referred to in class order
98/100,
issued by the Australian Securities and
Investments Commission, relating to the “rounding
off” of amounts in the financial report. Amounts in the
financial report have been rounded off in accordance
with that class order to the nearest thousand dollars, or
in certain cases, the nearest dollar.
(ac) General
PTB Group Limited is a public company limited by shares,
incorporated and domiciled in Australia. Listed below is
the registered office, principal place of business, and its
principal administrative office:
Provision is made for the amount of any dividend
declared, being appropriately authorised and no longer
at the discretion of the entity, on or before the end of
the year but not distributed at balance date.
22 Orient Avenue
Pinkenba QLD 4008
Ph: +61 7 3637 7000
(z)
Earnings per share
Basic earnings per share
The company changed its name on 1 December 2006
from Pacific Turbine Brisbane Limited to PTB Group
Limited.
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the company, excluding
any costs of servicing equity other than ordinary shares,
by the weighted average number of ordinary shares
outstanding during the year, adjusted for bonus elements
in ordinary shares issued during the year.
37
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9
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S
38
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
1.
Summary of Significant Accounting
Policies (Continued)
(ad)
Critical accounting estimates and
judgements
judgements
The Group evaluates estimates and
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 company.
Key estimates and judgements impacting the financial
statements are as follows:
Impairment
The Group tests annually whether goodwill has suffered
any impairment, in accordance with the accounting
policy stated in note 1(j). The recoverable amounts of
cash-generating units have been determined based on
value-in-use calculations. These calculations require the
use of assumptions. Refer to note 14 for details of these
assumptions and the potential impact of changes to the
assumptions.
(ae)
New accounting standards and
interpretations
Certain new accounting standards and interpretations
have been published that are not mandatory for 30
June 2009 reporting period. The Group has decided
against early adoption of these standards. The Group’s
and parent entity’s assessment of the impact of the new
standards and interpretations relevant to the Group are
set out below:
(i) AASB 8: Operating Segments and AASB 2007-3:
Amendments to Australian Accounting Standards
arising from AASB 8 (applicable for annual
reporting periods commencing from 1 January
2009). AASB 8 introduces a new “management
approach” to segment reporting. The changes
require identification of operating segments on
the basis of internal management reports that
are regularly reviewed by the Group’s key decision
makers for the purposes of assessing performance
and the allocation of resources to each segment.
While the impact of this standard has not been
assessed at this stage, there is the potential for
more segments to be identified. Given the lower
economic levels at which segments may be
defined, and the fact that cash generating units
cannot be bigger than operating segments, the
allocation of goodwill to reportable segments
and impairment calculations may be affected
9
0
0
2
T
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O
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E
R
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A
U
N
N
A
S
E
I
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I
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N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
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by the change in approach. Management does
not presently believe that this will result in any
additional impairment of goodwill.
(ii) Revised AASB 123: Borrowing Costs and AASB
2007-6: Amendments to Australian Accounting
Standards arising from AASB 123 (applicable for
annual reporting periods commencing from 1
January 2009). The revised AASB 123 Borrowing
costs removes the option to expense borrowing
costs related to qualifying assets. The standard
now requires that an entity capitalise borrowing
costs directly attributable to the acquisition,
construction or production of a qualifying asset
as part of the cost of that asset. The revised
standard is not expected to have any impact on
the group’s financial report.
(iii) Revised AASB 101: Presentation of Financial
Statements, AASB 2007-8: Amendments
to Australian Accounting Standards arising
from AASB 101, and AASB 2007-10: Further
Amendments to Australian Accounting Standards
arising from AASB 101 (all applicable to annual
reporting periods commencing from 1 January
2009). The revised AASB 101 and amendments
supersede the previous AASB 101 and:
■■
■■
■■
■■
Re-defines the composition of financial
statements by requiring the details of all non-
owner changes in equity to be presented in
a statement of comprehensive income with
corresponding changes to the statement of
changes in equity. The revised standard does
not change the recognition, measurement
or disclosure of transactions and events
that are required by AASBs. The Total
Comprehensive Income may be presented
as a single statement of income or in an
Income Statement and separate Statement
of Comprehensive Income;
requires disclosure of income tax relating to
each component of other comprehensive
income;
requires inclusion of an additional statement
of financial position (balance sheet) when
an entity applies an accounting standard
retrospective
a
retrospectively, makes
restatement, or reclassifies
its
items
financial statements; and
requires
reclassification
adjustments relating to components of
other comprehensive income; and requires
dividends to owners and related amounts per
share to be presented in the Statement of
Changes in Equity or the Notes to the financial
statements, and not in the Statement of
Comprehensive Income.
disclosure
of
in
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
1.
Summary of Significant Accounting
Policies (Continued)
(ae)
New accounting standards and
interpretations (Continued)
The revised standard is expected to have a
significant impact on the presentation of the
consolidated financial statements. The group has
not yet determined whether a single Statement
of Comprehensive Income or separate Income
Statement and Statement of Comprehensive
Income will be presented. Other changes to the
standard will be prospectively applied to the
financial statements of the Group.
(iv) AASB 2008-1: Amendments to Australian
Accounting Standard — Share-based Payments:
Vesting Conditions and Cancellations [AASB
2] (applicable for annual reporting periods
commencing from 1 January 2009). This
amendment to AASB 2:
■■
■■
■■
clarifies the definition of vesting conditions,
and the concept of non-vesting conditions
taken to account in determining the fair value
at grant date;
clarifies that vesting conditions are those
conditions that determine whether an entity
receives the services that result in the
counterparty’s entitlement;
restricts the definition of vesting conditions
to include service conditions and performance
conditions only;
amends
the definition of performance
conditions to require the completion of
a service period in addition to specified
performance targets; and
specifies that cancellations should receive
the same accounting treatment whether
cancelled by the entity or by another party.
The group has not yet determined the potential
effect of the amendment to the financial
statements.
■■
■■
for
annual
(v) AASB 2008-8: Amendment to IAS 39 Financial
Instruments: Recognition and Measurement
(applicable
reporting periods
commencing from 1 July 2009). AASB 2008-
8 amends AASB 139 Financial Instruments:
Recognition and Measurement and must be
applied retrospectively in accordance with AASB
108 Accounting Policies, Changes in Accounting
Estimates and Errors. This amendment makes
two significant changes. It prohibits designating
inflation as a hedgeable component of fixed rate
debt and prohibits including time value in the
one-sided hedged risk when designating options
as hedges. The amendments are not expected to
materially affect the Group.
39
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O
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9
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B
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O
U
P
L
M
I
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E
D
A
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D
C
O
N
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O
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E
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N
T
I
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I
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S
40
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
2.
Revenue
Sales revenue
Sale of goods
Services
Airline passengers and freight
Rental of engines/aircraft
- Minimum lease payments
- Contingent rentals
Other revenue
Interest
-
Extended credit receivables (hire purchase
agreements)
- Other
Management fee - subsidiaries
Other
3. Other Income
Net foreign exchange gains
Net gain on disposal of subsidiary
Net gain on disposal of property, plant and
equipment
4.
Expenses
Consolidated
Parent Entity
2009
$’000
2008
$’000
2009
$’000
2008
$’000
25,855
5,265
2,380
2,548
919
36,967
469
40
-
1,050
38,526
-
652
-
652
30,795
4,027
7,238
1,717
1,956
45,733
551
44
-
280
46,608
1,803
-
216
2,019
10,359
5,502
-
410
215
16,486
88
17
125
117
16,833
376
-
18
394
9,840
4,096
-
393
129
14,458
276
10
167
155
15,066
-
-
-
-
Profit before income tax expense includes the following specific items:
Cost of sale of goods
Depreciation
- Buildings
- Plant and equipment
- Rental engines/aircraft
- Leasehold improvements
Amortisation
- Leased leasehold improvements
- Leased plant and equipment
- Software
Operating lease rentals – minimum lease payments
- Premises
- Equipment
Impairment losses (bad and doubtful debts)
- Trade debtors
Net foreign exchange losses
Defined contribution superannuation expense
Finance costs
-
- Amount capitalised
Interests and finance charges paid/payable
18,808
24,961
10,801
11,029
79
171
1,079
38
-
75
-
567
125
621
2,517
702
5,144
(575)
4,569
47
142
1,943
41
-
44
7
478
149
1,135
-
638
3,515
(679)
2,836
-
70
79
30
-
-
-
212
7
327
-
337
268
-
268
-
66
118
39
-
-
-
82
5
843
137
174
396
-
396
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
5.
Income Tax Expense
Income tax expense
(a)
Current tax
Deferred tax
Under/(over) provided in prior years
The under provision for the prior year related to tax
payable on the Belmont property which is liable at
the date of settlement, but included in the income
tax year in which the contract was executed.
(b)
Numerical reconciliation of income tax
expense to prima facie tax
Profit/(loss) before income tax expense
Tax at the Australian tax rate of 30% (2008: 30%)
Tax effect of amounts which are not deductible
(taxable) in calculating taxable income:
- Share-based payments
-
Deferred tax liability on assets not previously
recognised
- Sundry items
Provisions transferred in
Losses not recognised in prior year
Under/(over) provided in prior years
Income tax expense/(benefit)
(c) Amounts recognised directly in equity
Aggregate current and deferred tax arising in the
reporting period and not recognised in net profit
or loss but directly debited or credited to equity:
Net deferred tax – debited (credited) directly to
equity (notes 13 and 17)
6.
Trade and Other Receivables
Current
Trade receivables
Provision for impairment
Maintenance contract receivables
Extended credit receivables (hire purchase
agreements)
Other receivables
Non-Current
Extended credit receivables (hire purchase
agreements)
Amounts receivable from controlled entities
Consolidated
Parent Entity
2009
$’000
2008
$’000
2009
$’000
2008
$’000
39
178
13
230
333
100
10
-
61
171
46
-
13
230
850
(527)
708
1,031
-
505
18
523
-
(346)
22
(324)
4,162
1,249
-
329
17
1,595
-
(388)
(176)
1,031
1,483
445
(1,259)
(378)
10
-
4
459
46
-
18
523
-
-
9
(369)
(2)
-
47
(324)
-
164
-
164
2,876
(613)
2,263
766
2,379
30
5,438
15,797
-
15,797
15,493
(304)
15,189
-
2,191
234
17,614
3,914
-
3,914
3,162
(355)
2,807
766
363
30
3,966
-
10,921
10,921
3,067
(133)
2,934
-
987
164
4,085
74
9,816
9,890
41
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N
U
A
L
R
E
P
O
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T
2
0
0
9
I
P
T
B
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R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
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E
D
E
N
T
I
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I
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S
42
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
6.
Trade and Other Receivables (Continued)
Trade receivables
Trade receivables are generally unsecured and due 30 to 90 days from date of recognition.
Impaired trade receivables
As at 30 June 2009 current trade receivables of the Group with a nominal value of $634,582 (2008: $326,821)
were impaired. The amount of the provision was $613,301 (2008: $303,492). As at 30 June 2009 current trade
receivables of the parent entity with a nominal value of $386,405 (2008: $153,625) were impaired. The amount
of the provision was $355,301 (2008: $132,878). It was assessed that a portion of the receivables is expected
to be recovered. The Group has retention of title over the goods until the cash is received.
Current 30+ Days 60+ Days 90+ Days
Total
The ageing of trade receivables is as follows:
Group – 2009
Trade receivables
Impaired trade receivables
Unimpaired receivables
Group – 2008
Trade receivables
Impaired trade receivables
Unimpaired receivables
Parent entity – 2009
Trade receivables
Impaired trade receivables
Unimpaired receivables
Parent entity – 2008
Trade receivables
Impaired trade receivables
Unimpaired receivables
Past due but not impaired
1,324
-
1,324
12,751
(27)
12,724
784
-
784
1,176
-
1,176
741
(1)
740
735
(4)
731
759
(1)
758
588
-
588
294
(117)
177
517
(517)
-
2,876
(635)
2,241
959
-
959
1,048
(296)
752
15,493
(327)
15,166
281
(117)
164
714
-
714
1,338
(268)
1,070
589
(154)
435
3,162
(386)
2,776
3,067
(154)
2,913
As at 30 June 2009, unimpaired trade receivables greater than 30 days represent amounts past due but not
impaired. Based on the credit history of these other classes, it is expected that these amounts will be received when
due. The Group and parent entity hold retention of title over goods sold until cash is received.
Movements in the provision for impairment of receivables are as follows:
Consolidated
Parent Entity
2009
$’000
2008
$’000
2009
$’000
2008
$’000
At 1 July
Provision for impairment recognised during the year
Receivables written off during the year as
uncollectable
Unused amount reversed
At 30 June
(304)
(139)
(620)
(1,135)
311
-
(613)
970
-
(304)
(133)
(327)
105
-
(355)
(102)
(843)
812
-
(133)
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
6.
Trade and Other Receivables (Continued)
Maintenance contract receivables
Maintenance contract receivables are generally unsecured. The relevant agreements require fixed monthly payments
over the term of the contracts which are generally up to 5 years.
Extended credit receivables
Extended credit receivables (hire purchase agreements) represent amounts owed by customers for engines and
aircraft sold to those customers. The amounts owed by customers are secured under hire purchase agreements
between the Group and the customer. The amounts are repayable by the customers by monthly instalments of
principal and fixed interest over periods of 1 to 5 years. Furthermore, the agreements do not include any contingent
rentals. The receivables are secured as the rights to the engine and/or aircraft revert to the Group in event of default.
The engines and aircraft are maintained and insured by the customers and at the end of the term of the agreement
are retained by the customers. None of the extended credit receivables are impaired, or past due but not impaired.
Payments in relation to the hire purchase
agreements are receivable as follows:
Within one year
Later than one year but not later than five years
Later than five years
Future finance revenue
Within one year
Later that one year but not later than five years
Later than five years
Representing receivables:
Current
Non-current
Consolidated
Parent Entity
2009
$’000
2008
$’000
2009
$’000
2008
$’000
4,194
10,852
12,384
27,430
(1,815)
(7,439)
-
(9,254)
18,176
2,379
15,797
18,176
2,692
4,400
241
7,333
(501)
(719)
(8)
(1,228)
6,105
2,191
3,914
6,105
380
-
-
380
(17)
-
-
(17)
363
363
-
363
1,036
77
-
1,113
(49)
(3)
-
(52)
1,061
987
74
1,061
Amounts receivable from controlled entities
Refer note 33 for information on amounts receivable from controlled entities.
Risk exposure
Information concerning the exposure to credit risk, foreign exchange and interest rate risk is set out in note 28.
7.
Inventories
Work in progress – at cost
Finished goods – at cost
376
28,118
28,494
13,118
14,573
27,691
376
6,002
6,378
483
5,067
5,550
43
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A
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O
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2
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0
9
I
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T
B
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R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
44
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
7.
Inventories (Continued)
Finished goods includes aircraft, engines and parts held for sale. Work in progress includes engines and aircraft
undergoing reconditioning in preparation for sale as well as incomplete repair jobs.
Borrowing costs of $574,580 (2008: $679,000) have been capitalised into the cost of inventory on qualifying
assets (recognised in work in progress). The capitalisation rate is the interest rate applicable to the specific facility
of 22% (2008: 16%).
8. Derivative Financial Instruments
Consolidated
Parent Entity
2009
$’000
2008
$’000
2009
$’000
2008
$’000
Current
Forward foreign exchange contracts
– cashflow hedges
-
1,770
-
-
In the previous year the Emerald operations included the contract for sale of two LFD ATP aircraft of which one
had been included as the contract was unconditional. In order to protect against exchange rate movements, the
Group entered into forward exchange contracts (FEC’s) to sell US dollars. These contracts hedged highly probable
contractual sales for the year and the FEC’s were timed to mature when the settlements were scheduled to be
made. The effective foreign currency hedges were settled in the current year.
9.
Tax balances – Current
Current tax assets
Current tax liabilities
10. Other Assets
Current
Prepayments
Deposits
Non-Current
Other
11. Other Financial Assets
353
429
517
1,423
427
66
493
367
468
77
545
116
353
-
68
56
124
108
443
-
91
66
157
-
Shares in subsidiaries
-
-
14,019
14,019
These financial assets are carried at cost. For details of the subsidiaries refer note 31.
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
12. Property, Plant and Equipment
Consolidated
Land &
Buildings
Leasehold
Improvements
Plant &
Equipment
Rental
Engines/
Aircraft
Assets Under
Construction
Total
Owned
Owned
$’000
$’000
Under
Lease
$’000
Owned
$’000
Under
Lease
$’000
Owned
Owned
$’000
$’000
Under
Lease
$’000
$’000
At 1 July 2007
Cost
4,188
196
Accumulated depreciation
(35)
(126)
Net book value
4,153
70
Year ended 30 June
2008
Opening net book value
4,153
Additions
Transfers1
Disposals
Depreciation/
amortisation
Closing net book value
70
86
-
-
-
-
-
(47)
4,106
(41)
115
At 30 June 2008
Cost
4,188
281
Accumulated depreciation
(82)
(166)
Net book value
4,106
115
Year ended 30 June
2009
Opening net book value
Additions
Transfers 2
Disposals
Depreciation/
amortisation
Closing net book value
At 30 June 2009
Cost
Accumulated depreciation
Net book value
4,106
3,001
21
-
(78)
7,050
7,210
(160)
7,050
115
-
-
-
(39)
76
85
(9)
76
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
521
66
-
(149)
417
854
(437)
417
417
596
-
(60)
(171)
782
1,275
(493)
782
824
(303)
521
91 19,501
2,154
1,250 28,204
(18)
(1,958)
-
- (2,440)
73 17,543
2,154
1,250 25,764
73 17,543
2,154
1,250 25,764
166
2,026
764
-
1,257 (1,582)
140
-
3,248
(325)
- (2,134)
- (2,224)
-
-
(21)
(16)
(2,097)
(44)
(1,943)
179 16,786
1,336
1,390 24,329
235 19,986
1,336
1,390 28,270
(56)
(3,200)
-
- (3,941)
179 16,786
1,336
1,390 24,329
179 16,786
1,336
1,390 24,329
-
-
1,525
419
- (1,891)
302
(21)
(94)
401
5,825
-
419
- (2,045)
(75)
(1,079)
-
- (1,442)
104 15,760
1,523
1,791 27,086
234 19,259
1,523
1,791 31,377
(130)
(3,499)
-
- (4,291)
104 15,760
1,523
1,791 27,086
1 2008: Net transfers consists of items transferred to/from inventory ($325,000) and between owned assets
under construction and rental engines and aircraft ($1,582,000).
2 Net transfers consists of items transferred to/from inventory ($419,000) and between owned assets under
construction and owned buildings ($21,000).
45
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
9
I
P
T
B
G
R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
46
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
12. Property, Plant and Equipment (Continued)
Parent Entity
Leasehold
Improvements
Plant &
Equipment
Owned
$’000
Under
Lease
$’000
Owned
$’000
Under
Lease
$’000
Rental
Engines/
Aircraft
Assets Under
Construction
Total
Owned
Owned
$’000
$’000
$’000
At 1 July 2007
Cost
Accumulated depreciation
Net book value
Year ended 30 June 2008
Opening net book value
Additions
Transfers 1
Disposals
Depreciation/ amortisation
Closing net book value
At 1 July 2008
Cost
Accumulated depreciation
Net book value
Year ended 30 June 2009
Opening net book value
Additions
Transfers 1
Disposals
Depreciation/ amortisation
Closing net book value
At 30 June 2009
Cost
Accumulated depreciation
Net book value
196
(126)
70
70
-
-
-
(39)
31
196
(165)
31
31
-
-
-
(31)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
526
(258)
268
268
41
-
(4)
(66)
239
538
(299)
239
239
175
-
(24)
(70)
320
605
(285)
320
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,340
(72)
1,268
1,268
-
-
-
(118)
1,150
1,340
(190)
1,150
1,150
-
-
(93)
(78)
979
1,244
(265)
979
-
-
-
-
21
-
-
-
21
21
-
21
21
37
(21)
-
-
37
2,062
(456)
1,606
1,606
62
-
(4)
(223)
1,441
2,094
(653)
1,441
1,441
212
(21)
(117)
(179)
1,336
37
-
37
1,886
(550)
1,336
1 Net transfers consist of items transferred between owned assets under construction and owned buildings in a
subsidiary.
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
12. Property, Plant and Equipment (Continued)
Rental arrangements – aircraft and engines
The Group rents aircraft and engines under two general arrangements:
■■
■■
Contingent rentals - rented to customers under agreements with rentals payable monthly and no fixed
term. As such, the agreements are cancellable. The rent is calculated on the basis of an hourly rate and
hours of usage. There are no minimum hours of usage or minimum lease payments set out in the relevant
agreements. As such, in accordance with AASB 117 “Leases” the rental income comprises of contingent
rentals not minimum lease payments. Accordingly, there are no fixed lease commitments receivable; and
Set or minimum rentals - the operating leases relate to aircraft and/or engines leased to third parties with
lease terms of between 3-7 years. The monthly rental payments are either set or per hour of usage with
minimum hours per annum. In addition, a contingent rental may be receivable based upon hours of usage. The
lessee may have an option to purchase the aircraft/engine at the expiry of the lease period. However, the final
purchase price is determined on a case by case basis in negotiation between the Group and the lessee.
Minimum lease payments in relation to aircraft and engine operating leases are receivable as follows:
No later than one year
Later than one year but no later than five years
Later than five years
Non-current assets pledged as security
Consolidated
Parent Entity
2009
$’000
2008
$’000
2009
$’000
2008
$’000
1,612
3,183
-
4,795
1,031
3,300
345
4,676
509
1,045
-
1,554
509
1,554
-
2,063
Refer note 16 for information on non-current assets pledged as security.
13. Deferred Tax Assets
The balance comprises temporary differences attributable to:
Tax losses
Accruals
Employee benefits
Doubtful debts
Share issue expenses
Other
Total deferred tax assets
1,281
65
312
184
-
379
2,221
1,350
52
308
91
-
225
2,026
177
35
86
107
-
36
441
475
14
116
40
-
70
715
47
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
9
I
P
T
B
G
R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
48
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
13. Deferred Tax Assets (continued)
Movements:
Tax
losses
Accruals Employee
benefits
Doubtful
debts
Share
issue
expenses
Other
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
164
30
717
-
195
(164)
-
-
-
-
-
-
164
-
(164)
-
-
-
-
-
-
1,473
(164)
-
-
-
-
-
225
2,026
154
-
379
195
-
2,221
43
27
-
-
70
366
513
(164)
-
715
(34)
(274)
-
-
36
-
-
441
Consolidated
At 1 July 2007
(Charged)/credited to income
statement
Credited directly to equity
Utilised against current tax
liability
Acquisition of subsidiary
At 30 June 2008
(Charged)/credited to income
statement
Credited directly to equity
At 30 June 2009
Parent Entity
At 1 July 2007
(Charged)/credited to income
statement
Credited directly to equity
Other
At 30 June 2008
(Charged)/credited to income
statement
Credited directly to equity
Other
At 30 June 2009
87
101
293
1,263
(49)
15
-
-
-
1,350
(69)
-
1,281
-
475
-
-
475
(298)
-
-
177
-
-
-
52
13
-
65
16
(2)
-
-
14
21
-
-
35
-
-
-
308
4
-
312
112
4
-
-
116
(30)
-
-
86
42
49
-
-
-
91
93
-
184
31
9
-
-
40
67
-
-
107
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
14.
Intangible Assets
Consolidated
At 1 July 2007
Cost
Accumulated amortisation and impairment
Net book amount
Year ended 30 June 2008
Opening net book amount
Amortisation charge
Closing net book amount
At 30 June 2008
Cost
Accumulated amortisation and impairment
Net book amount
Year ended 30 June 2009
Opening net book amount
Amortisation charge
Closing net book amount
At 30 June 2009
Cost
Accumulated amortisation and impairment
Net book amount
Parent Entity
At 1 July 2007
Cost
Accumulated amortisation and impairment
Net book amount
Year ended 30 June 2008
Opening net book amount
Amortisation charge
Closing net book amount
At 30 June 2008
Cost
Accumulated amortisation and impairment
Net book amount
Year ended 30 June 2009
Opening net book amount
Amortisation charge
Closing net book amount
At 30 June 2009
Cost
Accumulated amortisation and impairment
Net book amount
49
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
9
I
P
T
B
G
R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
Goodwill
$’000
4,334
-
4334
4,334
-
4,334
4,334
-
4,334
4,334
-
4,334
4,334
-
4,334
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
50
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
14.
Intangible Assets (continued)
Impairment tests for goodwill
Goodwill is allocated to the IAP operations as a single cash-generating unit (CGU) which is included in the Aircraft
and Engines Sales/Rentals primary business segment. The recoverable amount of the CGU is determined based
on value in use calculations. These calculations use cashflow projections based on financial budgets approved by
management covering a five-year period and include a terminal value adjusted for the perpetual growth rate.
Key assumptions used for value-in-use calculations
The calculations utilise a pre-tax risk adjusted discount rate of 13.8% (2008: 14.2%). A growth rate of 2% (2008:
3%) has been used. Management determined budgeted net profit based on past performance and its expectations
for the future. The discount rate reflects the specific risks relating to the relevant segment in which IAP operates.
Impact of possible changes in key assumptions
The Directors consider that there is no reasonably possible change in key assumptions which management has
based its determination of IAP’s recoverable amount which would cause the carrying amount of IAP’s CGU to
exceed its recoverable amount.
15. Trade and Other Payables
Consolidated
Parent Entity
2009
$’000
2008
$’000
2009
$’000
2008
$’000
Trade payables and accruals
3,458
4,626
1,263
1,450
Effective Interest Rates
Information concerning the effective interest rates is set out in note 28.
16. Borrowings
Current
Secured
Bank overdraft
Bank loans
Finance company loan
Lease liabilities
Unsecured
Notes
Developer advance
Other loans – related parties
Non-Current
Secured
Bank loans
Lease liabilities
Unsecured
Notes
Other loans – related parties
920
6,371
268
126
533
10,313
71
117
7,685
11,034
4,528
2,044
798
251
1,838
268
-
2,357
-
-
-
-
2,737
72
-
2,809
-
-
-
18,404
2,357
2,809
11,133
802
11,935
-
2,462
14,397
-
-
-
-
-
-
-
-
-
-
-
-
-
-
138
7,823
21,557
676
22,233
4,589
2,640
29,462
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
16. Borrowings (continued)
Unsecured Notes
During the 2006 year, PTB Finance Limited (a subsidiary of PTB Group Limited) issued 4,588,800 unsecured notes
at $1 per note raising $4,588,800 in cash. The notes were rolled for a further 2 years on 30 November 2008.
Nominal interest of 14% (2008: 11.5%) per annum (fixed) is payable monthly in arrears. Noteholders also received
one option to acquire shares in PTB Group Limited for every $2 invested in the notes in four six monthly tranches
commencing from the issue date. The exercise period expires 30 November 2010 at an exercise price of $0.40 per
share. The options are transferable.
At balance date, two tranches of 2,294,400 options on each of 30 November 2009 and 31 May 2010, remain to
be issued for zero cash consideration to noteholders holding unsecured notes issued in PTB Finance Limited.
The notes are presented in the balance sheet as follows:
Face value of notes issued
Other equity securities – value of conversion rights
Transaction costs
Interest expense *
Interest paid
Current liability
Non-current liability
Consolidated
2009
$’000
2008
$’000
4,589
(261)
(83)
4,245
2,231
(1,887)
-
4,589
4,589
(261)
(83)
4,245
1,524
(1,241)
4,528
-
* interest expense is calculated by applying the effective interest rate of 14% (2008:14%) to the liability component.
Bank Overdraft, Bank Loans and Bills Payable
The bank overdraft, bank loans and bills payable in the parent entity are secured by way of a registered mortgage
debenture and chattel mortgages over all assets and undertakings of the parent entity. The bank overdraft and bills
payable of the subsidiaries are secured by the land and building (recognised in property, plant and equipment) of
$7,050,000 (2008: $4,106,000). The bank loans in the subsidiaries are secured by the relevant aviation assets
included in plant and equipment and inventory of the relevant subsidiary of $16,540,786 (2008: $18,618,794).
As at 30 June 2009, the refurbishment and term loan detailed below were rolled into an AUD term loan at an interest
rate of 15% per annum (previously 22%), minimum monthly loan repayments of $165,000, a four year loan term (i.e.
to 31 July 2013), and the existing security arrangements to remain in place. The balance at 30 June 2009 was $14.9
million (2008: $11.9 million). In addition while there is money owed to the Financier, no return of capital, dividends
or payments can be made to ordinary shareholders in PTB or related parties without its approval. The Financier has
been granted 2,875,000 ordinary shares in PTB on the basis that these shares can be issued progressively over five
tranches. The first tranche of shares, i.e. for 1.2 million shares, was issued on 30 June 2009 as approved by the
shareholders on that date.
In the prior year a facility of USD $5,400,000 for the refurbishment of the Emerald aviation assets was established in
order to complete and settle the two LFD ATP and two PAX ATP aircraft. The nominal interest rate was 16% capitalised
quarterly on the balance of the facility. The security arrangements are consistent with those noted below.
During the 2006 year PTB (Emerald) Pty Ltd (a subsidiary) received a term loan from a finance company of
$8,263,000. The loan was repayable in monthly installments of $115,000 from February 2008 and was to terminate
on 31 December 2012. Nominal interest of 13% per annum was payable quarterly in arrears.
The following security has been provided by PTB and currently remains in place:
■■
■■
■■
Mortgage over the shares held by PTB in PTB (Emerald) Pty Ltd and the bank account;
Mortgage over the aircraft held by PTB (Emerald) Pty Ltd as detailed above; and
A charge over the assets and rights of PTB (Emerald) Pty Ltd which have a carrying value of $26,265,699
(2008: $32,283,527).
In addition, a second ranking charge over the assets of the parent entity and IAP Group Australia Pty Ltd was signed
on 31 July 2009 in favour of the financier. The carrying value of the Group assets at balance date is $39,010,493.
51
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
9
I
P
T
B
G
R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
52
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
16. Borrowings (Continued)
Advance from developer
The Belmont property was previously used by the IAP Group (Aeropelican Air Services Pty Ltd) as the Newcastle
airport for its passenger and freight operations prior to moving to Williamtown Airport.
In March 2004, IAP entered into a joint venture deed with a third party developer in respect of the Belmont property.
Under the joint venture deed the third party developer advanced IAP $2 million for the right to pursue the rezoning of
the property as residential and/or commercial and if achieved, the development of the property by subdivision and sale
of subdivided lots. The $2.04 million advance from the developer was secured by a mortgage over the property.
Prior to 30 June 2007 year end, the Group entered into an agreement to sell the land for $5.5 million. On 4 July
2008 the contract settled and the proceeds were utilised to repay the liability of $2.04 million (including accrued
fees and charges).
Lease Liabilities
Lease liabilities are effectively secured as the rights to the leased assets revert to the lessor in the event of default.
Other Loans – Related Parties
Refer note 24 for information on other loans from related parties.
Effective Interest Rates
Information concerning the effective interest rates is set out in note 28.
Finance Facilities
Information concerning the finance facilities is set out in note 28.
Assets Pledged as Security
Certain assets of the Group are pledged as security for the facilities as noted above.
17. Deferred Tax Liabilities
Consolidated
Parent Entity
2009
$’000
2008
$’000
2009
$’000
2008
$’000
The balance comprises temporary differences
attributable to:
Property, plant and equipment
Inventory
Other
Total deferred tax liabilities
2,038
388
276
2,702
1,836
556
293
2,685
92
-
161
253
3
-
-
3
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
17. Deferred Tax Liabilities (Continued)
Movements:
Property,
plant and
equipment
Inventory Maintenance
Other
Total
contracts
$’000
$’000
$’000
$’000
$’000
Consolidated
1 July 2007
Charged/(credited) to income
statement
At 30 June 2008
Charged/(credited) to income
statement
At 30 June 2009
Parent Entity
1 July 2007
Charged/(credited) to income
statement
At 30 June 2008
Charged/(credited) to income
statement
At 30 June 2009
18. Provisions
Current
Employee benefits
Non-Current
Employee benefits
19. Other Liabilities
Current
Deferred revenue
Deposits in advance
Non-Current
Deferred revenue
Deferred revenue
1,725
111
1,836
202
2,038
3
-
3
89
92
135
421
556
(168)
388
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
43
1,903
250
293
(17)
276
-
-
-
161
161
782
2,685
17
2,702
3
-
3
250
253
Consolidated
Parent Entity
2009
$’000
2008
$’000
2009
$’000
2008
$’000
702
826
237
355
150
201
49
36
177
857
1,034
209
863
1,072
279
197
-
504
504
-
-
346
346
40
Deferred revenue relates to maintenance contract revenue received in advance.
53
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
9
I
P
T
B
G
R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
54
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
20. Contributed Equity
Share capital
Consolidated
Parent Entity
2009
$’000
2008
$’000
2009
$’000
2008
$’000
27,603,135 ordinary shares fully paid
(2008: 26,403,135 ordinary shares fully paid)
27,913
27,780
27,913
27,780
Other equity securities
Value of conversion rights (net of tax) (note 16)
183
28,096
183
27,963
261
28,174
261
28,041
Effective 1 July 1998, the Corporations legislation in place abolished the concepts of authorised capital and par
value shares. Accordingly, the parent does not have authorised capital nor par value in respect of its issued shares.
Movements in ordinary share capital
Note
No of
Shares
Issue Price
$
$’000
Balance 1 July 2007
Dividend reinvestment scheme
Options exercised
Closing balance 30 June 2008
Share issues to Emerald Financier
Transaction costs net of deferred tax
Closing balance 30 June 2009
Notes:
26,396,468
-
6,667
26,403,135
1,200,000
-
27,603,135
(a)
(b)
(b)
1.00
0.12
27,773
-
7
27,780
144
(11)
27,913
(a) Issue of shares pursuant to dividend reinvestment scheme (refer note 30).
The company has established a dividend reinvestment plan under which holders of ordinary shares may elect
to have all or part of their dividend entitlements satisfied by the issue of new ordinary shares rather than by
being paid cash. Shares are issued under the plan at up to a 4% discount to the market.
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the parent
entity in proportion to the number of and amounts paid on the shares held. On a show of hands every holder
of ordinary shares present at a meeting in person or by proxy, is entitled to vote, and upon a poll each share is
entitled to one vote.
(b) Issue of shares pursuant to shareholder approval.
The Emerald Financier has been granted 2,875,000 ordinary shares in PTB on the basis that these shares can
be issued progressively over five tranches. The first tranche of shares, i.e. for 1.2 million shares, was issued
on 30 June 2009 as approved by the shareholders on that date. The shares were issued at the market rate
on that day, being $0.12 per share. The residual four tranches of 418,750 shares per tranche will issue on
31.12.09, 30.6.10, 31.12.10, and 30.6.11 respectively. The share issue has been structured in this way to
minimise the potential dilutive effect on shareholders by allowing an early repayment of this facility.
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
20. Contributed Equity (Continued)
Options
As at balance date the number of options to purchase ordinary shares in the parent entity was as follows:
2009
2008
No. of Options
No. of Options
Exercise Price
Expiry Date
Employee share options
Employee share options
Employee share options
Note options
Note options
-
120,000
40,000
-
4,588,800
80,002
120,000
40,000
1,529,600
-
$1.00
$1.60
$2.00
$1.60
$0.40
19 November 2008
20 February 2010
31 August 2010
30 November 2008
30 November 2010
An employee share option scheme was approved by shareholders on 3 June 2005. Refer to note 25 for details.
Note options were granted as part of the unsecured note placement. Refer note 16 for details.
Capital Risk Management
The Group’s and the parent entity’s objectives when managing capital are to safeguard their ability to continue as a
going concern, so that they can continue to provide returns to shareholders, benefits to other stakeholders, and to
maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt. The Board of Directors monitors the
return on capital, which the Group defines as net profit after tax divided by average shareholders’ equity.
21. Reserves
Consolidated
Parent Entity
2009
$’000
2008
$’000
2009
$’000
2008
$’000
Share-based payments reserve
274
241
274
241
Movements:
Reserve balance 1 July
Option expense
Reserve balance 30 June
The share-based payments reserve is used to
recognise the fair value of the options issued but
not exercised.
241
33
274
163
78
241
241
33
274
163
78
241
Hedging reserve
-
1,484
Movements:
Reserve balance 1 July
Recognition of effective cashflow hedge
Settlement of cashflow hedge
Reserve balance 30 June
1,484
-
(1,484)
-
-
1,484
-
1,484
-
-
-
-
-
-
-
-
-
-
The hedging reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are
recognised directly in equity, as described in note 1(p). Amounts are recognised in the income statement when
the associated hedged transaction affects the income statement.
55
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
9
I
P
T
B
G
R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
56
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
22. Cash Flow Information
(a)
Reconciliation of Cash and Cash
Equivalents
Cash and cash equivalents at the end of the financial
year as shown in the cash flow statements is reconciled
to items in the balance sheets as follows:
Cash and cash equivalents assets
– cash at bank and on hand
Bank overdraft (note 16)
(b)
Reconciliation of Net Cash Flow from
Operating Activities to Profit/(Loss)
for the Year
Profit/(Loss) for the year
Depreciation and amortisation
(Gain)/loss on disposal of property, plant and
equipment
(Gain)/loss on disposal of subsidiary
Share-based payments
Movement in provision for doubtful debts
Interest capitalised
Unrealised foreign currency movements
Non-cash interest on unsecured notes
Changes in operating assets and liabilities net
of effects from disposal of controlled entities.
(Increase)/decrease in:
Receivables
Inventories **
Deferred tax assets*
Other assets
Increase/(decrease) in:
Trade payables, accruals, and other liabilities
Employee benefits
Current tax liabilities
Deferred tax liabilities*
Net cash flow from operating activities
Consolidated
Parent Entity
2009
$’000
2008
$’000
2009
$’000
2008
$’000
466
(920)
(454)
1,200
(533)
667
154
(251)
(97)
750
-
750
103
1,442
136
(652)
33
309
1,297
2,167
62
475
(1,222)
(1,146)
(837)
(263)
68
(830)
968
2,110
3,131
2,224
(216)
-
78
165
559
(934)
130
(7,644)
(856)
(619)
380
550
49
271
92
(2,626)
960
179
(18)
-
33
222
-
-
-
736
(795)
270
(700)
(69)
(104)
90
253
1,057
(935)
223
-
-
78
31
-
-
-
4,168
(151)
(346)
(22)
(473)
(9)
(658)
-
1,906
* net of amounts charged or credited directly to equity
** net of transfers to/from property, plant and equipment
(c) Non-cash Investing and Financing Activities
Dividends satisfied by the issue of shares under the dividend reinvestment scheme are shown in note 30. Options
issued to employees under the Employee Share Option Scheme are shown in note 25.
During the year the Group purchased $35,000 of property, plant and equipment by way of finance lease (2008:
$305,896).
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
23. Earnings Per Share
Basic earnings per share
Diluted earnings per share
Earnings used to calculate basic and diluted earnings per share
- Profit after tax for the year
Consolidated
2009
$’000
2008
$’000
0.4
0.4
11.86
11.85
$’000
$’000
103
3,131
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings
per share
26,406,432 26,402,185
Effect of dilutive securities:
- Director and employee share options
- Note options
-
-
23,607
-
Weighted average number of ordinary shares and potential ordinary shares used
in calculating diluted earnings per share
26,406,432 26,425,792
In the current year no options were considered to be potential ordinary shares. In the prior year options granted
to Directors and to employees under the PTB Group Limited Employee Share Option Scheme (note 25) and the
1,529,600 options granted as part of the unsecured notes (note 16) were considered to be potential ordinary shares
and were included in the determination of diluted earnings per share to the extent to which they were dilutive. The
options have not been included in the determination of basic earnings per share.
24. Key Management Personnel Disclosures
Directors
The following persons were Directors of PTB Group Limited during the financial year:
Chairman – non-executive
H Parker
Executive Directors
CL Baker, Managing Director (Group)
RS Ferris, Managing Director (IAP Division)
Non-executive Directors
APS Kemp
Other key management personnel
The following persons also had authority and responsibility for planning, directing and controlling the activities of the
Group, directly or indirectly, during the financial year:
Name
JT Barbeler
Position
Company Secretary and CFO
Employer
PTB Group Limited
There were no other key management personnel in either the current or prior year.
57
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
9
I
P
T
B
G
R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
58
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
24. Key Management Personnel Disclosures (Continued)
Key management personnel compensation:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
Consolidated
Parent Entity
2009
$’000
2008
$’000
2009
$’000
2008
$’000
717,659
134,625
18,134
2,839
873,257
787,051
122,876
13,915
6,181
930,023
435,272
111,328
8,963
2,839
558,402
787,051
122,876
13,915
6,181
930,023
The company has taken advantage of the relief provided by Corporations Regulations 2001 and has transferred the
detailed remuneration disclosures to the Directors’ report. The relevant information can be found in sections A to E
of the remuneration report in the Directors’ report.
Equity instrument disclosures relating to key management personnel
Options provided as remuneration and shares issued on exercise of such options
Details of options provided as remuneration and shares issued on the exercise of such options, together with terms
and conditions of the options, can be found in section D of the remuneration report in the Directors’ report.
Option holdings
The numbers of options over ordinary shares in the company held during the financial year by each Director of PTB
Group Limited and other key management personnel of the Group, including their personally related parties, are set
out below:
Name
Balance at
the start of
the year
Granted
during the
year as
compensation
Exercised/
Lapsed
during the
year
Other
Changes
Balance at
the end of
the year
Vested and
exercisable
at the end of
the year
2009
Directors
H Parker
CL Baker
RS Ferris
APS Kemp
Other key management personnel of the Group
JT Barbeler
-
-
-
38,267
20,000
-
-
-
-
-
2008
Directors
CL Baker
SG Smith
RS Ferris
H Parker
RJ David
APS Kemp
R Blumberg
Other key management personnel of the Group
JT Barbeler
200,000
200,000
-
-
-
188,267
-
-
-
-
-
-
-
-
20,000
-
-
-
-
(38,267)2
-
-
-
414,8002
-
-
-
414,800
-
-
-
414,800
-
-
20,000
13,334
(200,000)1
-
-
-
-
(150,000)1
-
-
(200,000)1
-
-
-
-
-
-
-
-
-
-
38,267
-
-
-
-
-
-
38,267
-
-
-
20,000
6,667
1 550,000 options issued to Directors expired and lapsed on 10 March 2008.
2
38,267 options issued to APS Kemp as part of the unsecured notes issued in 2006 lapsed during the year.
A further 414,800 options were issued as part of the rollover of the notes as approved by shareholders on
30 June 2009 (refer note 16).
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
24. Key Management Personnel Disclosures (Continued)
Share holdings
The numbers of shares in the company held during the financial year by each Director of PTB Group Limited and other
key management personnel of the Group, including their personally related parties, are set out below. There were no
shares granted during the current or previous year as compensation.
Name
Balance at
the start of
the year
Issued as
purchase
consideration
Received
during the
year on the
exercise of
options
Other
changes
Balance
at date of
appointment/
resignation
Balance at
the end of
the year
2009
Directors
H Parker
CL Baker
RS Ferris
APS Kemp
296,000
1,782,104
6,908,054
147,248
-
-
-
-
Other key management personnel of the Group
JT Barbeler
-
2008
Directors
CL Baker
SG Smith
RS Ferris
H Parker
RJ David
APS Kemp
1,782,104
1,843,860
6,908,054
296,000
337,000
136,348
-
-
-
-
-
-
-
Other key management personnel of the Group
JT Barbeler
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
34,734
-
-
-
-
-
-
10,900
-
-
-
-
-
-
296,000
1,782,104
6,908,054
181,982
-
-
1,782,104
(1,843,860)
-
-
-
(337,000)
-
-
6,908,054
296,000
-
147,248
-
Loans to key management personnel
There were no loans to Directors of PTB Group Limited or other key management personnel of the Group during the
current or previous reporting period.
Other transactions with key management personnel
APS Kemp’s remuneration included additional amounts paid for services provided in respect of corporate advisory and
capital raising strategy services of $5,500 (2008: $Nil). These services were supplied at normal terms and conditions.
In 2007 PTB (Emerald) Pty Ltd (subsidiary) obtained a loan of $2,000,000 from Steve Ferris (Director). The loan is
repayable on 16 December 2011. The loan is subordinated to the finance company loan. Nominal interest of 10% per
annum (fixed) is payable monthly in arrears and capitalised to the balance of the loan. The loan is unsecured and has
a balance outstanding at 30 June 2009 of $2,619,521 (2008: $2,371,224).
Additionally, IAP Group Australia Pty Ltd (subsidiary) has a loan from Steve Ferris (Director) where monies are
advanced to IAP and repaid on a revolving line of credit basis. The loan has a maturity date of 31 August 2010
and is unsecured and has a fixed interest rate of 8%. The loan is repayable in monthly instalments and has a balance
outstanding at 30 June 2009 of $158,343 (2008: $889,116).
All transactions were under normal commercial terms and conditions, unless otherwise stated. No bad or doubtful
debts expense has been, or is likely to occur from transactions with related parties.
59
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
9
I
P
T
B
G
R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
60
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
24. Key Management Personnel Disclosures (Continued)
Aggregate amounts of each of the above types of other transactions with key management personnel of the Group:
Amounts recognised as expense
Interest expense*
Consolidated
Parent Entity
2009
$
2008
$
2009
$
2008
$
313,952
313,952
305,182
305,182
-
-
-
-
Aggregate amounts receivable/payable arising from the above types of transactions with key management personnel
of the Group:
– current borrowings
– non-current borrowings
138,001
3,054,663
798,001
2,462,339
-
-
-
-
* represents interest paid at 11.5% to 30 November 2008 and 14% thereafter to APS Kemp on unsecured notes
and on the two unsecured loans payable by Group companies to R.S Ferris at 8% and 10% as detailed above.
At balance date, the following options remain to be issued to two companies that are related parties and associated
with APS Kemp, a Director of PTB Group Limited. On 30 November 2009 and 31 May 2010 two tranches of options
are to be issued, one totalling 410,000 options to Huntington Group Pty Ltd ACN 010 693 651 and a second
tranche of 4,800 options to Manco (Aust) Pty Ltd ACN 062 457 658. These options were approved at a General
Meeting on 30 June 2009 and are to be issued for zero cash consideration. These companies currently hold 414,800
notes at balance date.
25. Share-based Payments
Employee Share Option Scheme
The establishment of the Employee Share Option Scheme was approved by shareholders on 3 June 2005. All staff
are eligible to participate in the scheme, including executive Directors.
Options are granted under the scheme for no consideration. The exercise price will be the amount specified by
the remuneration committee at the time of issue. The exercise period is the period specified by the remuneration
committee at the time of issue. Options under the plan may not exceed 5% of the total number of issued shares of
the company at the date of issue.
Options lapse if prior to or during the exercise period the employee is terminated or resigns. If a person dies, becomes
disabled, or is made redundant prior to the exercise period the option lapses. If a person dies, becomes disabled, or is
made redundant during the exercise period special rules apply that allow options to be exercised.
Options granted under the scheme carry no dividend or voting rights. When exercisable, each option is convertible
into one ordinary share for cash. Amounts receivable on the exercise of options are recognised as share capital.
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
25. Share-based Payments (Continued)
Set out below are summaries of options granted under the scheme:
Grant date
Expiry date Exercise
price
Balance
at start
of year
Granted
during
the year
Exercised
during
the year
Expired/
forfeited
during
the year
Balance
at end of
the year
Exercisable
at end of
the year
Number Number
Number
Number
Number
Number
Consolidated and parent entity – 2009
31 May 2007 31 Aug 2010
30 Dec 2006 20 Feb 2010
30 Sep 2005 19 Nov 2008
Consolidated and parent entity – 2008
31 May 2007 31 Aug 2010
30 Dec 2006 20 Feb 2010
30 Sep 2005 19 Nov 2008
$2.00
40,000
$1.60 140,000
93,336
$1.00
$2.00
40,000
$1.60 120,000
80,002
$1.00
-
-
-
-
-
-
-
-
-
-
-
80,002
40,000
120,000
-
-
-
(6,667)
-
(20,000)
(6,667)
40,000
120,000
80,002
26,666
80,000
-
13,334
40,000
46,667
Options held vest one third each year on the anniversary of the grant date.
The weighted average remaining contractual life of share options outstanding at the end of the 2009 year was
0.77 years (2008: 1.3 years).
No options were exercised during the year. The weighted average share price at the date of exercise of options
exercised during the prior year $1.52.
Fair value of options granted
The assessed fair value at grant date of the options granted during the year ended 30 June 2007 was $1.01 per
option for the 30 December 2006 grant and $0.54 per option for the 31 May 2007 grant (2006: 35 cents per
option). The fair value at grant date is determined using a Binomial option pricing model that takes into account the
exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying
share, the expected dividend yield and the risk free interest rate for the term of the option.
The model inputs for options granted as at 31 May 2007, 30 December 2006, and September 2005 respectively
included:
Grant date
Consideration
Life
Exercise price
Expiry date
Share price at grant date
Expected price volatility
Expected dividend yield
Risk free interest rate
31 May 2007
Nil
3 years
$2.00
31 August 2010
$2.00
24%
6%
6.22%
30 December 2006
Nil
3 years
$1.60
20 February 2010
$2.53
36%
6%
5.93%
30 September 2005
Nil
3 years
$1.00
19 November 2008
$1.20
39%
6%
5.29%
The expected price volatility is based on the historic volatility of the entity up to the grant date of the options as
well as the historic volatility of a number of similar entities (based on a period with a similar life of the options). The
fair value of the options granted excludes the impact of any non-market vesting conditions. There were no market
based conditions.
Director Options
During the 2005 year options were granted to Directors by the parent entity. Each option granted is convertible into
one ordinary share in PTB Group Limited for cash. The options were issued upon listing pursuant to the prospectus
dated 4 January 2005. Options granted carry no dividend or voting rights. The options vested upon listing and there
were no further vesting conditions. They are exercisable at any time after 12 months after grant but before expiry.
61
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
9
I
P
T
B
G
R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
62
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
25. Share-based Payments (Continued)
Set out below are summaries of options granted:
Grant date
Expiry date Exercise
price
Balance
at start
of year
Granted
during
the year
Exercised
during
the year
Expired
during
the year
Balance
at end of
the year
Exercisable
at end of
the year
Number Number
Number
Number
Number
Number
Consolidated and parent entity – 2008
10 Mar 2005 10 Mar 2008
$1.15 550,000
-
-
550,000
-
-
No such options were granted in the 2009 or 2008 years.
The weighted average remaining contractual life of share options outstanding at the end of the year was Nil years
(2008: Nil years).
Fair value of options granted
The assessed fair value at grant date of the options granted during the year ended 30 June 2005 was 13.7 cents per
option. The fair value at grant date was independently determined using a Binomial option pricing model that takes
into account the exercise price, the term of the option, the share price at grant date and expected price volatility of
the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The model inputs for options granted during the year ended 30 June 2005 included:
Options are granted for no consideration and have a three year life
Exercise price: $1.15
Grant date: 10 March 2005
Expiry date: 10 March 2008
Share price at grant date: $1.00
Expected price volatility of the company’s shares: 31.5%
Expected dividend yield: 6%
Risk-free interest rate: 5.22%
The expected price volatility was based on the historic volatility of a number of similar entities (based on a period
with a similar life of the options). The fair value of the options granted excludes the impact of any non-market
vesting conditions. There were no market based conditions.
Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the year as part of employee
benefit expense were as follows:
Consolidated
Parent Entity
2009
$’000
2008
$’000
2009
$’000
2008
$’000
Options issued under employee option scheme
33
78
33
78
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
26. Auditor’s Remuneration
(a) Audit Services
Remuneration of the auditor of the Group for:
Audit or review of the financial reports
Related practices of the auditor for an audit
of an entity within the group
(b) Non audit services
Taxation compliance
Other tax consulting
Consolidated
Parent Entity
2009
$
2008
$
2009
$
2008
$
115,500
130,000
75,000
80,000
-
10,000
-
-
31,180
39,800
55,000
-
16,180
29,800
26,000
-
There was no other remuneration paid to related practices of the auditor.
27. Commitments
Finance leases
(a)
Commitments in relation to finance leases are
payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
Minimum lease payments
Future finance charges
- Within one year
- Later than one year but not later than five years
- Later than five years
Representing lease liabilities:
Current
Non-current
Consolidated
Parent Entity
2009
$’000
2008
$’000
2009
$’000
2008
$’000
211
832
-
1,043
(85)
(156)
-
802
126
676
802
215
915
128
1,258
(98)
(235)
(6)
919
117
802
919
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Finance leases comprise leases of property, plant and equipment, under normal commercial finance lease terms
and conditions.
(b) Operating leases
Commitments in relation to non-cancellable
operating leases contracted for at the reporting date
but not recognised as liabilities are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
146
486
531
1,163
357
92
-
449
7
13
-
20
66
20
-
86
Operating leases mainly comprise leases of premises in Brisbane, Sydney and Newcastle in Australia and Blackpool in
UK. These leases are under normal commercial terms and conditions including rentals, in certain cases, being subject
to periodic review for market and/or CPI increases as well as options for renewal.
63
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
9
I
P
T
B
G
R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
64
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
27. Commitments (Continued)
(c)
Remuneration commitments
Commitments for payment of salaries and other
remuneration under long-term employment contracts
in existence at the reporting date but not recognised
as liabilities payable:
Less than one year
Greater than one year but not later than five years
Consolidated
Parent Entity
2009
$’000
2008
$’000
2009
$’000
2008
$’000
560
280
840
560
840
1,400
280
140
420
560
840
1,400
Remuneration commitments comprise the minimum amounts payable to C Baker and S Ferris upon termination under
their service agreements.
(d) Capital commitments
Capital expenditure
for Land and Buildings
contracted for at balance date but not recognised
as liabilities was payable as follows:
Within one year
-
-
3,380
3,380
-
-
-
-
Capital commitments in the prior year included the land and buildings contracted for at 12 February 2008 by IAP
Group Australia Pty Ltd to house the PTB Group Brisbane workshop, sales, and administration activities.
28. Financial Risk Management and Other Financial Instrument Disclosures
Financial Risk Management
The Group’s activities expose it to a variety of financial risks; market risk (including foreign exchange risk, price risk,
and cash flow and fair value interest rate risk), credit risk, and liquidity risk. The Group’s overall risk management
program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the
financial performance of the Group.
Risk management is carried out by management under policies approved by the Board of Directors. Management
identifies, evaluates and addresses financial risks and uses different methods to measure different types of risk to
which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other
price risks, and ageing analysis for credit risk. The Board provides principles for overall risk management, as well as
policies covering specific areas, such as mitigating foreign exchange, interest rate and credit risks, use of derivative
financial instruments and investing excess liquidity.
(a) Market risk
(i) Foreign exchange risk
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated
in a currency that is not the entity’s functional currency.
The Group operates internationally and is exposed to foreign exchange risk primarily arising from sale and purchase
transactions denominated in US dollars and UK pounds. The risk is measured using sensitivity analysis and cashflow
forecasting.
These derivatives are exclusively used for hedging purposes to minimise foreign exchange risk on relevant transactions
and the Group does not speculate on foreign currency. The Group manages this risk through matching, to the extent
possible, of US dollar denominated receivables and payables. All transactions which are exposed to foreign exchange
risk are authorised by senior management.
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
28. Financial Risk Management and Other Financial Instrument Disclosures (Continued)
The Group’s exposure to foreign currency risk at the reporting date was as follows:
30 June 2009
30 June 2008
USD
$’000
GBP
’000
USD
$’000
GBP
$’000
209
16,435
-
(687)
(3,479)
(60)
52
7
-
458
-
-
907
10,654
12,000
(1,098)
(7,340)
(164)
45
902
-
(572)
-
-
Cash and cash equivalents
Trade and other receivables
Forward exchange contracts
Trade and other payables
Borrowings
Other liabilities
Group sensitivity
Based on the financial instruments held at 30 June 2009, had the Australian dollar weakened/strengthened by 10%
against the USD dollar, with all other variables held constant, the Group’s post tax profit for the year would have
been $1,196,000 higher/$979,000 lower (2008: $239,000 higher/$196,000 lower), mainly as a result of foreign
exchange gains and losses on translation of US dollar denominated financial instruments as detailed in the above table.
Profit is more sensitive to movements in the Australian dollar/US dollar exchange rates in 2009 than in 2008 because
of the decreased amount of the US dollar denominated borrowings offsetting US dollar denominated receivables.
Equity would have been $1,196,000 higher/$979,000 lower (2008: $466,000 higher/$359,000 lower) had
the Australian dollar weakened/strengthened by 10% against the US dollar due to the reasons noted above. Equity
is more sensitive to movements in the Australian dollar/US dollar exchange rates in 2009 than in 2008 because
of the decreased amount of US dollar denominated borrowings. The Group’s exposure to other foreign exchange
movements is not material.
The Parent entity’s exposure to foreign currency risk at the reporting date was as follows:
30 June 2009
30 June 2008
USD
$’000
GBP
’000
USD
$’000
GBP
$’000
57
1,328
-
(432)
-
(60)
-
-
-
-
-
-
445
1,878
-
(729)
-
(164)
-
-
-
-
-
-
Cash and cash equivalents
Trade and other receivables
Forward exchange contracts
Trade and other payables
Borrowings
Other liabilities
Parent entity sensitivity
Based on the financial instruments held at 30 June 2009, had the Australian dollar weakened/strengthened by 10%
against the USD dollar, with all other variables held constant, the Parent entity’s post tax profit for the year would
have been $86,000 higher/$70,000 lower (2008: $116,000 higher/$95,000 lower), mainly as a result of foreign
exchange gains and losses on translation of US dollar denominated financial instruments as detailed in the above
table. Profit is less sensitive to movements in the Australian dollar/US dollar exchange rates in 2009 than in 2008
because of the decreased amount of the US dollar denominated trade and other receivables, thereby reducing the
overall net exposure.
65
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
9
I
P
T
B
G
R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
66
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
28. Financial Risk Management and Other Financial Instrument Disclosures (Continued)
Equity would have been $86,000 higher/$70,000 lower (2008: $116,000 higher/$95,000 lower) had the
Australian dollar weakened/strengthened by 10% against the US dollar, arising mainly from the movement in US
dollar denominated receivables. The Parent entity’s exposure to other foreign exchange movements is not material.
(ii) Price risk
The Group is not directly exposed to material equity securities price risk or commodity price risk.
(iii) Cash flow and fair value interest rate risk
The Group has significant interest-bearing assets being extended credit receivables. These receivables are subject
to fixed interest rates. The fair value interest rate risk associated with these receivables is not hedged. The risk is
minimised through the relatively short nature of the majority of these receivables as well as funding them, where
possible, by matching fixed rate bank loans.
The Group has significant interest bearing liabilities, as detailed below. The majority of these liabilities bear fixed interest
rates. The fair value interest rate risk is not hedged. However, as noted above, the fixed interest rate bank loans are
generally used to fund extended credit receivables. Loans from financial institutions are used to purchase and refurbish
aviation assets. Although the fair value interest rate risk is not hedged where possible the loans are matched against
receivables in currencies that match the interest rate risk. The unsecured notes which bear a fixed interest rate were
primarily issued to fund the engine rental pool which derives rental revenue as disclosed in note 2.
Variable rate debt (primarily the bank overdraft) is also not hedged.
The Group’s exposure to interest rate risk and the effective weighted average interest rate for each class of financial
assets and financial liabilities is set out below:
Effective
Weighted
Average
Floating
Fixed Interest Rate Maturing
Interest
Rate
Interest
Rate
1 year
or less
1 to 2
years
2 to 3
years
3 to 4
years
4 to 5
years
Over 5
years
%
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Non-
Interest
Bearing
$’000
Total
$’000
2009
Financial assets
Cash and cash
equivalents
Trade and other
receivables
Extended credit
receivables
0.64
389
-
13.14
-
-
-
-
-
-
-
-
-
-
-
-
-
-
77
466
3,059
3,059
Total financial assets
389
2,379
1,999
2,379
1,999
630
630
492
492
293 12,383
- 18,176
293 12,383
3,136 21,701
Financial liabilities
Trade and other
payables
Bank overdraft
Bank loans
Bills payable
Lease liabilities
Unsecured notes
Related party loans
Total financial liabilities
-
6.16
12.21
-
920
375
-
-
-
-
-
-
-
-
-
-
4,630
3,084
4,418
4,463
7,001
5.37
4,225
-
-
-
-
-
10.50
14.00
9.89
-
-
-
126
148
158
248
122
-
4,589
138
2,640
-
-
-
-
-
-
5,520
4,894 10,461
4,576
4,711
7,123
-
-
-
-
-
-
-
-
3,458
3,458
-
920
- 23,971
-
-
-
-
4,225
802
4,589
2,778
3,458 40,743
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
28. Financial Risk Management and Other Financial Instrument Disclosures (Continued)
Effective
Weighted
Average
Floating
Fixed Interest Rate Maturing
Interest
Rate
Interest
Rate
1 year
or less
1 to 2
years
2 to 3
years
3 to 4
years
4 to 5
years
Over 5
years
%
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Non-
Interest
Bearing
$’000
Total
$’000
2008
Financial assets
Cash and cash
equivalents
Trade and other
receivables
Extended credit
receivables
1.29
1,155
-
10.57
-
-
-
-
-
-
-
-
-
-
-
-
-
-
45
1,200
15,423 15,423
Total financial assets
1,155
2,197
2,197
902
902
1,876
1,876
507
507
390
390
233
233
-
6,105
15,468 22,728
Financial liabilities
Trade and other
payables
Bank overdraft
Bank loans
Bills payable
Lease liabilities
Unsecured notes
Related party loans
Total financial liabilities
-
9.82
11.85
-
533
297
-
-
-
-
-
-
-
-
-
-
9,299
2,749
2,434
3,820
2,863
9.04
2,100
-
-
-
-
-
-
-
-
-
10.50
11.50
9.45
-
-
-
116
126
148
158
248
122
4,528
798
-
91
-
-
-
-
-
-
-
2,371
4,626
4,626
-
533
- 21,462
-
-
-
-
2,100
918
4,528
3,260
2,930 14,741
2,966
2,582
3,978
3,111
2,493
4,626 37,427
There are no other interest bearing financial assets and liabilities.
Group and Parent entity sensitivity
As the majority of the interest rates are fixed, at 30 June 2009 if interest rates had changed by -/+100 basis points
from year-end rates with all other variables held constant, post tax profit and equity for the year would not be
materially impacted (2008: $nil).
Net Fair Values
The net fair values of financial assets and financial liabilities approximate their carrying values.
Derivative Financial Instruments
The Group does not normally use derivative financial instruments except as noted above.
(b)
Credit risk
The Group trades only with recognised, creditworthy third parties.
The main credit risk arises from receivables balances. These balances are monitored on an ongoing basis with the
result that the Group’s exposure to bad debts is not considered significant by the Directors. Management review the
credit rating of each customer, taking into account any previous trading history with the Group, its financial position,
and external credit reports where appropriate. Individual risk limits are set based on internal ratings and compliance
is regularly monitored by management.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to
recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed
in the balance sheet and notes to the financial statements.
67
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
9
I
P
T
B
G
R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
68
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
28. Financial Risk Management and Other Financial Instrument Disclosures (Continued)
The Group does not have any material credit risk exposure to any single debtor or group of debtors under financial
instruments at balance date except as follows:
■■
■■
■■
The Group’s customers are involved in the airline passenger and freight operation industry;
There are a number of individually significant receivables. For example at 30 June 2009 the largest 10 debtors
comprised approximately 91% (2008: 80%) of total receivables. It should be noted in the current year that the
largest debtor is an extended credit receivable to a customer in Indonesia which accounts for 68% of total receivables.
The Group has security over the underlying asset in the event of a default, in conjunction with guarantees of $5
million USD from the parent entity of the customer. There is a broad spread of other trade and extended credit
receivables comprising 11% and 17% (2008: 22% and 28%) of total receivables respectively; and
The receivables are concentrated in six main geographical areas. Refer to note 29 for further information.
At balance date cash was held with ANZ, CBA, Bank West, and National Australia Bank.
(c)
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an
adequate amount of committed credit facilities. The Group manages liquidity risk by continuously monitoring forecast
and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Group also ensures
that adequate unutilised borrowing facilities and cash reserves are maintained. The Group’s objective is to maintain
a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, unsecured
notes, and finance leases and finance company loans. Details of unused borrowing facilities are disclosed below.
- chattel mortgage
- refurbishment
- aviation fund
- other
- multi-option
Finance Facilities
Available facilities
Bank overdraft
Bank loans
Bills payable
Notes
Related party facilities
Developer loan
Amounts utilised
Bank overdraft
Bank loans
Bills payable
Notes
Related party facilities
Developer loan
Unused facilities
Bank overdraft
Bank loans
Bills payable
Notes
Related party facilities
- chattel mortgage
- refurbishment
- aviation fund
- other
- multi-option
- chattel mortgage
- refurbishment
- aviation fund
- other
- multi-option
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Consolidated
Parent Entity
2009
$’000
2008
$’000
2009
$’000
2008
$’000
1,613
24,505
-
-
268
4,225
4,589
2,778
-
37,978
920
24,505
-
-
268
4,225
4,589
2,778
-
37,285
693
-
-
-
-
-
-
-
693
1,519
16,684
5,610
31,166
368
2,100
4,528
3,260
2,043
67,278
534
15,923
4,045
-
368
2,100
4,528
3,260
2,043
32,801
985
761
1,565
31,166
-
-
-
-
34,477
500
988
-
-
268
850
-
-
-
2,606
251
988
-
-
268
850
-
-
-
2,357
249
-
-
-
-
-
-
-
249
500
2,500
-
-
72
1,000
-
-
-
4,072
-
1,737
-
-
72
1,000
-
-
-
2,809
500
763
-
-
-
-
-
-
1,263
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
28. Financial Risk Management and Other Financial Instrument Disclosures (Continued)
Maturities of financial liabilities
The tables below analyse the Group’s and the Parent entity’s financial liabilities and net and gross settled derivative
financial instruments into relevant maturity groupings based on the remaining period at the reporting date to the
contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cashflows.
1 year or
less
$’000
1 to 2
years
$’000
2 to 3
years
$’000
3 to 4
years
$’000
4 to 5
years
$’000
Over 5
years
$’000
Total
$’000
Group 2009
Non-derivatives
Non-interest bearing
Variable rate
Fixed rate
Total financial liabilities
Derivatives
Gross settled – (inflow)
Group 2008
Non-derivatives
Non-interest bearing
Variable rate
Fixed rate
Total financial liabilities
3,458
3,553
8,701
15,712
-
107
13,603
13,710
-
2,302
7,193
9,495
-
-
-
-
7,193
7,193
7,329
7,329
-
-
6,669
3,202
15,416
25,287
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,323
4,323
3,642
3,642
4,712
4,712
3,478
3,478
2,736
2,736
-
-
-
-
-
-
-
-
3,458
5,962
44,019
53,439
-
-
6,669
3,202
34,307
44,178
Derivatives
Gross settled – (inflow)
1,769
1,769
Parent 2009
Non-derivatives
Non-interest bearing
Variable rate
Fixed rate
Total financial liabilities
Parent 2008
Non-derivatives
Non-interest bearing
Variable rate
Fixed rate
Total financial liabilities
1,263
1,172
1,347
3,782
1,450
1,094
1,164
3,708
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
317
317
-
-
287
287
-
-
207
207
-
-
-
-
-
-
-
-
92
92
-
-
1,769
1,769
-
-
-
-
-
-
-
-
1,263
1,172
1,347
3,782
1,450
1,094
2,067
4,611
69
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
9
I
P
T
B
G
R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
70
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
28. Financial Risk Management and Other Financial Instrument Disclosures (Continued)
Bank overdraft
The bank overdraft facilities are subject to annual review and may be drawn at any time. The interest rate is variable
and is based on prevailing market rates.
Bank loans
The chattel mortgage loans are repayable by monthly instalments of principal and fixed interest over a period of 2 to
4 years from each draw down date.
The other bank loans are subject to annual review. The interest rate is variable and is based on prevailing market rates.
Related party loans
The related party loans are at a fixed interest rate of 8% and 10% per note 24.
Bills payable
The multi-option facility includes variable rate commercial bills. For each drawing of a bill, a rate is quoted by the bank
at the time of draw down. The bills have a term of 12 months and the facility is subject to annual review.
Maturities of financial liabilities
The previous tables analyse the Group’s and the parent entity’s financial liabilities, net and gross settled derivative
financial instruments into relevant maturity groupings based on the remaining period at the reporting date to the
contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cashflows.
29. Segment Information
Business Segments (Primary Reporting)
The Group operates predominantly in the following business segments:
■■
■■
Aircraft Transport – Operation of Aeropelican Air Services; and
Aircraft and Engines Sales and Rentals – Repair, rental and sale of aircraft, engines and related parts (including
hire purchase agreements).
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
29. Segment Information (Continued)
2009
Segment revenue
Sales to external customers
Intersegment sales
Total sales revenue
Other revenue/income
Aircraft
Transport
$’000
Aircraft
& Engines
Sales/
Rentals
$’000
Elimination
Total
$’000
$’000
2,380
-
2,380
-
36,146
1,159
37,305
-
-
38,526
(1,159)
(1,159)
-
-
38,526
-
Total segment revenue/income
2,380
37,305
(1,159)
38,526
652
39,178
160
1,870
(113)
1,917
Unallocated revenue
Consolidated revenue/income
Segment result
Segment result
Unallocated revenue less unallocated expenses
Profit before income tax
Income tax expense
Profit for the year
Assets
Segment assets
Unallocated assets
Total assets
Liabilities
Segment liabilities
Unallocated liabilities
Total liabilities
-
82,475
-
5,349
Other segment information
Acquisition of property, plant and equipment,
intangibles and other non- current segment assets
-
6,244
Unallocated
Total acquisitions
Depreciation and amortisation expense
158
1,284
Unallocated
Total depreciation and amortisation
(1,584)
333
(230)
103
82,475
2,574
85,049
5,349
40,690
46,039
6,244
-
6,244
1,442
-
1,442
-
-
-
-
71
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
9
I
P
T
B
G
R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
72
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
29. Segment Information (Continued)
2008
Segment revenue
Sales to external customers
Intersegment sales
Total sales revenue
Other revenue/income
Total segment revenue/income
Unallocated revenue
Consolidated revenue/income
Segment result
Segment result
Intersegment elimination
Unallocated revenue less unallocated expenses
Profit before income tax
Income tax expense
Profit for the year
Assets
Segment assets
Unallocated assets
Total assets
Liabilities
Segment liabilities
Unallocated liabilities
Total liabilities
Aircraft
Transport
$’000
Aircraft
& Engines
Sales/
Rentals
$’000
Elimination
Total
$’000
$’000
7,238
-
7,238
9
7,247
33,870
827
34,697
2,010
36,707
-
41,108
(827)
(827)
-
(827)
-
41,108
2,019
43,127
5,500
48,627
(239)
4,324
-
4,085
3,449
73,855
2,729
6,772
77
4,162
(1,031)
3,131
77,304
6,752
84,056
9,501
34,330
43,831
3,217
31
3,248
2,205
19
2,224
-
-
-
-
Other segment information
Acquisition of property, plant and equipment,
intangibles and other non- current segment assets
66
3,151
Unallocated
Total acquisitions
Depreciation and amortisation expense
343
1,862
Unallocated
Total depreciation and amortisation
Geographical Segments (Secondary Reporting)
The Group’s management and operations are based in Brisbane and Sydney, Australia. Its customers, however, are
located in six main geographical markets – Australia/New Zealand, Pacific Islands, North America, Asia, Africa, Europe.
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
29. Segment Information (Continued)
The following table shows the distribution of the Group’s sales, assets, and purchase of property, plant and equipment
by those geographical markets:
Segment Revenues
From Sales to External
Customers
Segment Assets
Purchase of Property,
Plant and Equipment
2009
$’000
2008
$’000
2009
$’000
2008
$’000
2009
$’000
2008
$’000
Australia/NZ
Pacific
North America
Asia
Africa
Europe
Other
Unallocated
Total
13,592
3,008
3,604
15,335
398
3,228
13
25,299
3,740
2,966
12,973
464
3,070
19
46,585
2,674
518
17,894
1,105
16,268
5
39,178
48,531
85,049
-
96
-
39,178
48,627
85,049
48,167
2,465
682
10,680
956
20,136
19
83,105
951
84,056
5,368
-
865
-
11
-
-
6,244
-
6,244
2,698
-
38
-
-
512
-
3,248
-
3,248
Segment assets include rental engines and aircraft which are attributed either to the geographic market in which the
customer who rents the engine or aircraft at year-end is based or, for non-rented engines and aircraft, where they
are physically located.
All other segment assets are attributed to the geographical location where they are physically located.
30. Dividends
Dividends paid during the year
No dividends were paid during the year.
Dividends paid in cash or satisfied by the issue of shares under the dividend
reinvestment scheme during the year were as follows:
Paid in cash
Satisfied by the issue of shares
Parent Entity
2009
$’000
2008
$’000
-
-
-
-
-
-
-
-
Consolidated
Parent Entity
2009
$’000
2008
$’000
2009
$’000
2008
$’000
Franking credits
Franking credits available for subsequent financial
years based on a tax rate of 30% (2008: 30%)
11,911
12,847
2,180
2,623
73
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N
N
U
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E
P
O
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2
0
0
9
I
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B
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O
U
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M
I
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E
D
A
N
D
C
O
N
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O
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L
E
D
E
N
T
I
T
I
E
S
74
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
30. 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 amount of the provision for income tax;
(b) franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and
(c) franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
The consolidated amounts include franking credits that would be available to the parent entity if distributable profits
of subsidiaries were paid as dividends.
2009
$’000
2008
$’000
Dividends not recognised at year end
Since year end the Directors have not recommended the payment of a final dividend
(2008: nil cents). In the previous year, the aggregate amount of proposed dividends
that were expected to be paid out of retained profits but not recognised as a liability
at year end was:
-
-
The impact on the franking account of the dividend amount recommended by the Directors since year end, but
not recognised as a liability at year end would be a reduction in the franking account of $Nil (2008: $Nil).
31. Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries:
Name
PTB Finance Limited (1)
PTB Rentals Australia Pty Ltd (1)
Pacific Turbine, Inc (2)
PTB (Emerald) Pty Ltd (3)
Aircraft Maintenance Services Ltd (4)
IAP Group Australia Pty Ltd (5)
Aeropelican Air Services Pty Ltd (5)
International Air Parts UK Limited (6)
PTB Emerald Limited (7)
PTB Asset Management Pty Ltd (8)
Country of
Incorporation
Australia
Australia
USA
Australia
United Kingdom
Australia
Australia
United Kingdom
United Kingdom
Australia
Equity Holding
2009
100%
100%
100%
100%
100%
100%
0%
100%
100%
100%
2008
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Incorporated 14 October 2005
Incorporated 29 September 2005
Incorporated 4 October 2006
Incorporated 6 November 2006
Purchased as part of business combination on 21 September 2006. Aeropelican Air Services disposed 30 September 2008.
Incorporated 18 October 2006
Incorporated 13 October 2006
Incorporated 21 June 2007
All subsidiaries are 100% owned by PTB Group Limited which is incorporated in Australia. All share capital consists of
ordinary shares in each company and the proportion of ownership interest is equal to the proportion of voting power
held. All subsidiaries were established by the parent except for those acquired as part of the business combination in
prior years.
IAP Group Australia Pty Limited (ACN: 003 675 867) a subsidiary of PTB Group Limited, disposed of Aeropelican Air
Services Pty Ltd (ACN: 000 653 083) on 30 September 2008. Consideration received amounted to $282,000 with
the net deficient assets disposed of amounting to $369,635. The net deficiency in assets comprised trade creditors
of $910,389, employee entitlements of $244,709, trade and other receivables of $559,270, other current assets
of $76,662, and plant and equipment of $149,531. The profit on sale of the subsidiary was $651,820. The profit
before tax on ordinary activities of Aeropelican during the period, and the corresponding previous period was
$160,354 and a loss of $239,206 respectively.
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
31. Subsidiaries (Continued)
All subsidiaries except for PTB Finance Limited and Pacific Turbine Inc have been granted relief from the necessity to
prepare financial reports in accordance with Class Order 98/1418 issued by the Australian Securities and Investments
Commission as detailed in note 32.
32. Deed of Cross Guarantee
On 29 June 2007, PTB Group Limited and all of its subsidiaries, excluding PTB Finance Limited and Pacific Turbine
Inc, entered into an arrangement as parties to a deed of cross guarantee under which each company guarantees the
debts of the others. By entering into the deed, the wholly owned entities have been relieved from the requirements
to prepare a financial report and Directors’ report under Class Order 98/1418 (as amended) issued by the Australian
Securities and Investments Commission.
(a) Consolidated income statement and a summary of movements in consolidated retained profits
PTB Group Limited and its subsidiaries, excluding PTB Finance Limited and Pacific Turbine Inc, represent a ‘Closed
Group’ for the purposes of the Class Order, and as there are no other parties to the Deed of Cross Guarantee that are
controlled by PTB Group Limited, they also represent the ‘Extended Closed Group’.
Set out below is a consolidated income statement and a summary of movements in consolidated retained profits for
the year ended 30 June 2009 of the Closed Group:
Revenue
Other income
Cost of goods sold
Employee benefits expense
Depreciation and amortisation
Airport charges and taxes
Repairs and maintenance
Fuel costs
Bad and doubtful debts
Finance costs
Net foreign exchange loss
Net loss on sale of property, plant and equipment
Other expenses
Total expenses
Profit before income tax expense
Income tax expense
Profit for the year
Summary of movements in consolidated retained profits
Retained profits at the beginning of the financial year
Profit for the year
Dividends provided for or paid
Retained profits at the end of the financial year
2009
$’000
2008
$’000
38,526
652
46,603
2,019
(18,808)
(24,961)
(5,116)
(1,442)
(750)
(256)
(553)
(621)
(4,645)
(2,517)
(136)
(4,044)
(5,547)
(2,224)
(2,343)
(626)
(1,483)
(1,135)
(2,861)
-
-
(3,299)
(38,888)
(44,479)
290
4,143
(217)
(1,026)
73
3,117
10,518
73
-
7,401
3,117
-
10,591
10,518
75
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
9
I
P
T
B
G
R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
76
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
32. Deed of Cross Guarantee (Continued)
(b) Balance sheet
Set out below is a consolidated balance sheet as at 30 June 2009 of the Closed Group:
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instruments
Current tax assets
Other current assets
Total Current Assets
Non-Current Assets
Trade and other receivables
Other financial assets
Property, plant and equipment
Deferred tax assets
Intangible assets
Other non-current assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Borrowings
Current tax liabilities
Provisions
Other current liabilities
Total Current Liabilities
Non-Current Liabilities
Borrowings
Deferred tax liabilities
Provisions
Other non-current liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed equity
Reserves
Retained earnings
Total Equity
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
2009
$’000
2008
$’000
410
5,438
28,493
-
353
493
35,187
17,515
264
27,087
2,215
4,334
367
51,782
86,969
3,452
7,824
419
702
1,033
13,430
31,369
2,701
150
280
34,500
47,930
39,039
28,174
274
10,591
39,039
1,153
17,614
27,691
1,770
517
545
49,290
4,957
264
24,329
2,026
4,334
116
36,026
85,316
4,616
13,876
1,398
826
1,072
21,788
20,170
2,674
202
197
23,243
45,031
40,285
28,040
1,727
10,518
40,285
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
33. Related Party Transactions
(a)
Parent entity and subsidiaries
The ultimate parent entity of the Group is PTB Group Limited. Interests in subsidiaries are set out in note 31.
(b) Key management personnel
Disclosures relating to key management personnel are set out in note 24.
(c) Other transactions with subsidiaries
The following transactions occurred with subsidiaries:
Revenue - sale of engines
Revenue - sale of goods and services
Revenue - engine rentals
Revenue - management fee
Revenue - interest revenue
Purchase of engines
Purchase of goods
Rent expense
Parent Entity
2009
$
2008
$
308,530
245,150
115,803
125,001
14,714
264,933
192,736
192,499
220,000
37,927
95,802
166,668
-
-
187,605
-
In addition to the above sales, the parent has also provided, free of charge, other administrative and accounting
assistance to the subsidiaries.
(d)
Loans to subsidiaries
Parent Entity
2009
$
2008
$
Loans to subsidiaries
10,920,798
9,815,823
The parent entity advanced loans to subsidiaries during the current year (refer cash flow statement). The loans are
non-interest bearing, unsecured, at call and repayable in cash.
(e) Outstanding balances arising from sales/purchases of goods and services
Trade and extended credit receivables
Trade payables
Parent Entity
2009
$
2008
$
1,112,904
-
801,700
167,004
No provisions for doubtful debts have been raised in relation to any outstanding balances, and no expense has been
recognised in respect of bad or doubtful debts due from related parties.
77
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
9
I
P
T
B
G
R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
78
Notes to the Financial Statements
for the year ended 30 June 2009 (Continued)
34. Events after the Balance Sheet Date
No matters or circumstances have arisen since the end of the financial year which have 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 future years except as detailed below:
ANZ Facilities
The Company has agreed to consolidate its existing financing facilities with the ANZ Bank with another provider. The
net exposure to the ANZ at balance date was less than $2 million and the ANZ has extended the Company’s financing
facilities until 31 October 2009 to allow this transition to occur.
Emerald Facilities
A second ranking charge over the assets of the parent entity and IAP Group Australia Pty Ltd was signed on 31 July
2009 in favour of the Emerald financier.
35. Contingencies
There are no contingencies requiring disclosure.
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Directors’ Declaration
for the year ended 30 June 2009
The Directors of the Company declare that:
(a) the attached financial statements and notes, as set out on pages 25 to 78 are in accordance with the
Corporations Act 2001 and:
(i) comply with Australian Accounting Standards and the Corporations Regulations 2001; and
(ii) give a true and fair view of the financial position as at 30 June 2009 and of the performance for the year
ended on that date of the Company and consolidated entity;
(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they
become due and payable; and
(c) at the date of this declaration, there are reasonable grounds to believe that the members of the Extended
Closed Group identified in note 31 will be able to meet any obligations or liabilities to which they are, or may
become, subject by virtue of the deed of cross guarantee described in note 32.
The Directors have been given the declarations by the chief executive officer and chief financial officer for the
financial year ended 30 June 2009 required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
H Parker
Chairman
Brisbane
25 September 2009
79
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0
0
9
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I
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D
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O
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S
80
Independent Auditor’s Report
for the year ended 30 June 2009
Independent Auditor’s Report
To the members of PTB Group Limited
Report on the Financial Report
We have audited the accompanying financial report of PTB Group Limited (the Company), which comprises the
balance sheets as at 30 June 2009, and the income statements, statements of changes in equity and cash flow
statements for the year ended on that date, a summary of significant accounting policies, other explanatory notes
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 and fair presentation of the financial report in
accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the
preparation and fair presentation of the financial report that is free from material misstatement, whether due to
fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are
reasonable in the circumstances. In Note 1, the directors also state, in accordance with Accounting Standard AASB
101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial
Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies 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. These Auditing Standards require that we comply with relevant ethical
requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether
the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the financial report 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.
Liability limited by a scheme approved by Professional Standards Legislation other than for acts or omissions by
financial services licensees.
9
0
0
2
T
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O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
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P
U
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G
B
T
P
I
Independent Auditor’s Report
for the year ended 30 June 2009 (Continued)
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Liability limited by a scheme approved by Professional Standards Legislation other than for acts or omissions
by financial services licensees.
Auditor’s Opinion
In our opinion the financial report of PTB Group Limited is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2009 and
of their performance for the year ended on that date; and
(b) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001.
The financial report also complies with International Financial Reporting Standards as disclosed in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included on pages 11 to 15 of the directors’ report for the year ended 30
June 2009. 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.
Auditor’s Opinion
In our opinion the Remuneration Report of PTB Group Limited for the year ended 30 June 2009, complies with
section 300A of the Corporations Act 2001.
WHK Horwath
Don Langdon
Principal
Brisbane, 25 September 2009
81
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N
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E
P
O
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T
2
0
0
9
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T
B
G
R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
82
Shareholders Information
for the year ended 30 June 2009
The shareholder information set out below was applicable
as at 31 August 2009.
(c)
The names of the substantial shareholders
(including related entities) listed in the company’s
register are:
(a) Distribution of Shareholders:
Category (size of
Holding)
Class of equity security
Ordinary
Shares
Options
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
45
174
71
119
31
440
-
-
5
56
11
72
(b)
The number of ordinary shareholdings held
in less than marketable parcels is 192.
Number of
Ordinary
Shares Held
Percentage
%
RS Ferris
River Capital
CL Baker
SG Smith
GD Hills
6,908,054 (2)
4,397,100
1,782,104
1,843,860
1,776,000
25.02
15.92
6.46
6.68
6.43
(d) Voting Rights
On a show of hands every member present at a meeting
in person or by proxy shall have one vote and upon a
poll each share shall have one vote. Options carry no
voting rights.
(e) 20 Largest Shareholders — Ordinary Shares (Quoted):
Number of Ordinary
Fully Paid Shares Held
% Held of issued
Ordinary Capital
RS Ferris
River Capital Pty Limited
Keybridge Capital Limited
ACAO Capital Limited
Baker Superannuation Fund
J Flintoft
G Hills
M Hills
SG Smith & JA Flintoft Superannuation Fund
S Martin
Mr & SJ Gordon Super A/c
Moat Investment Pty Ltd
David Family Superannuation Family Trust
H Parker
SP Martin & LP Martin (Basil Martin Family A/c)
H Jones
Mr K Arden & Mrs M Arden (Harpos Super Fund A/c)
Mr C Baker
Colex Pty Ltd (Carroll Family Super A/c)
Harvels Pty Ltd
6,908,054
4,397,100
1,200,000
1,194,919
1,100,000
888,000
888,000
888,000
750,000
491,052
446,276
435,129
337,000
296,000
285,870
276,000
219,400
191,052
181,500
181,500
21,554,852
25.02
15.92
4.35
4.33
3.98
3.22
3.22
3.22
2.72
1.78
1.62
1.58
1.22
1.07
1.04
1.00
0.79
0.69
0.66
0.66
78.09
Unquoted equity securities
Options issued under the PTB Group Ltd Share Option
Scheme to take up ordinary shares
Options issued in terms of the unsecured notes issue
Number on issue
Number of holders
160,000 (1)
4,588,800
10
62
(1) Number of unissued ordinary shares under the options. No person holds 20% or more of these securities.
(2) These shares were subject to voluntary escrow expiring 20 September 2008.
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
Notes:
83
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
9
I
P
T
B
G
R
O
U
P
L
M
I
T
E
D
A
N
D
C
O
N
T
R
O
L
L
E
D
E
N
T
I
T
I
E
S
84
Notes:
9
0
0
2
T
R
O
P
E
R
L
A
U
N
N
A
S
E
I
T
I
T
N
E
D
E
L
L
O
R
T
N
O
C
D
N
A
D
E
T
I
M
L
P
U
O
R
G
B
T
P
I
2
1
4
9
0
S
G
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