Annual Report
2003
CED Australasia Limited
(Formerly Cendant Australasia Limited)
ABN 26 073 979 272
contents
i year in review
ii financial report
directory
DIRECTORS
J A Nissen (Chairman)
J H Whiting
K D Whiteman
COMPANY SECRETARY
C J McKeown
REGISTERED OFFICE
Ormond Corporate Centre
Level 1, 596 North Road
Ormond, Victoria, 3204
Telephone +61 3 9578 5933
Email investors@cedaust.com.au
BANKERS
National Australia Bank Limited
AUDITORS
PKF
Chartered Accountants
Level 11
CGU Tower
485 La Trobe Street
Melbourne, Vic., 3000
SOLICITORS
Phillips Fox
SHARE REGISTRY
Computershare Investor Services Pty Limited
Level 12, 565 Bourke Street
Melbourne, Victoria, 3000
Telephone +61 3 9611 5711
Facsimile +61 3 9611 5710
STOCK EXCHANGE
Australian Stock Exchange Code: CED
CED AUSTRALASIA LIMITED
ABN 26 073 979 272
CED AUSTRALASIA LIMITED
ABN 26 073 979 272
2003 FINANCIAL REPORT
index
1
8
9
10
12
31
32
33
34
DIRECTORS’ REPORT
STATEMENTS OF FINANCIAL PERFORMANCE
STATEMENTS OF FINANCIAL POSITION
STATEMENTS OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDIT REPORT
BOARD OF DIRECTORS
ADDITIONAL INFORMATION
i
CED AUSTRALASIA LIMITED
DIRECTORS’ REPORT
The directors of CED Australasia Limited present their report together with the financial reports of the parent entity and
its controlled entities for the financial year ended 30 June 2003
Directors
The directors of the company during the year and to the date of this report are:
Mr John A Nissen - Chairman
Mr John H Whiting
Mr Ken D Whiteman
Particulars of the qualifications, experience and special responsibilities (if any) of each director, as at the date of this
report, are set out on page 33 of this report.
Directors Meetings
The number of directors’ meetings and number of meetings attended by each of the directors of the company during the
financial year were:
Mr J A Nissen
Mr J H Whiting
Mr K D Whiteman
Directors Meetings
Audit Committee Meetings
No. of Meetings Held
10
10
10
No. of Meetings Attended
10
10
10
No. of Meetings Held
2
2
-
No. of Meetings Attended
2
2
-
There were a total of 10 Directors Meetings and 2 Audit Committee Meetings held.
Directors and Executive Officers Emoluments
The company’s policy for determining the nature and amount of emoluments of board members and senior executives
of the company is as follows:
Directors’ Fees are paid to Non Executive Directors as approved from time to time by shareholders. The last increase
was approved by shareholders at the Annual General Meeting held 25 October 1996 and allowed for a fixed sum not
exceeding $165,000.
Emoluments paid to senior executives of the company are determined by the Chief Executive Officer and / or the Board
of Directors. The broad remuneration policy is to ensure the remuneration package properly reflects the person’s duties
and responsibilities and that remuneration is competitive in attracting, retaining and motivating people of the highest
quality.
Executive Directors and Executive Officers may receive bonuses based on the achievement of specific goals related to
the performance of the consolidated entity or, in particular circumstances, a subsidiary company or business unit.
- 1 -
CED AUSTRALASIA LIMITED
DIRECTORS’ REPORT
Details of the nature and amount of each major element of the emoluments of each director of the company and the
consolidated entity are:
Non Executive Directors: Parent Entity
Directors Fees
J. A. Nissen
J. H. Whiting
K. D. Whiteman
Directors’ Benefits
$
65,455
33,000
33,000
Superanuation
Contributions
$
-
3,000
3,000
Total
$
65,455
36,000
36,000
Particulars of Directors’ Benefits are disclosed in Note 16 and Note 18.
Indemnification and Insurance of Directors and Officers
The parent entity has not taken out an insurance policy indemnifying directors and officers for the financial year nor
has the company provided any indemnification during the year.
Interests of Directors
The relevant interest of each director in the share capital of the company as at the date of this report is:
Name
J A Nissen
J H Whiting
K D Whiteman
Ordinary Shares
2,192,916
NIL
18,100
Principal Activities
Options
NIL
NIL
NIL
The principal activities of the consolidated entity during the financial year were the delivery of account packaging
programs for financial institutions, loyalty programs for corporate and retail clients, Shoppers Hotline, The Presidential
Card discount program, and the development and commercialisation of the Golf Link National Handicap System.
There was no significant change in the nature of the consolidated entity’s principal activities during the year.
Operating Results
The operating loss after income tax for the year ended 30 June 2003 was $1,379,637 (2002: Loss $11,554,788).
Dividends
No dividend has been paid or declared since the commencement of the financial year. The directors do not recommend
the payment of a dividend.
Review of Operations
Company Name
On 9 December 2002 the company changed its name from Cendant Australasia Limited to CED Australasia Limited
CED Licences
At 30 June 2002 the two CED Licences held by the consolidated entity were recorded at fair value.
Fair value was calculated based on the agreements reached with CIMS Limited on 12 September 2002 for the sale of
the two licences, which provided for a total payment of US$1,000,000 (A$1,839,820) and extinguishment of debts
totalling $2,066,805 which were included in the consolidated entity’s liabilities as at 30 June 2002.
- 2 -
Asian Operations
During the year ended 30 June 2003 the company concluded an agreement with local management in Singapore and the
Philippines to sell 75% of the company’s interest in those operations to the local country managers. The Company
therefore retains a 25% shareholding in CAP Singapore, formerly Cendant Asia Pacific, which in turn holds a 25%
interest in Cendant Philippines.
Golf Link
In the first half of the financial year the company completed negotiations with the AGU and other state-based golfing
bodies to attempt to find a solution for the commercialisation and roll out of Golf Link. These negotiations culminated
in the AGU Executive accepting the company’s proposal for the introduction of a user-pays fee of $2.75 (GST
inclusive) per annum per golfer utilising a new Internet based delivery system. This proposal was presented to each of
the state-based golfing bodies in order to gain their support for the introduction of a fee.
With the support of the States and the AGU, the fee proposal was presented to the AGU’s Annual General Meeting
held on 19 September 2002. The company’s fee proposal was accepted and the company is now planning the
implementation of the Internet based system to all AGU affiliated golf clubs.
This outcome allows the company to separate operational and marketing components of the Golf Link project as the fee
will provide sufficient funding for the ongoing support and operations of Golf Link, while marketing activities can be
undertaken without the added burden of having to provide returns to cover Golf Link operational costs.
The Presidential Card & Shoppers Hotline
The Shoppers Hotline operation provided an improved product turnover for the year ended 30 June 2003 thanks
primarily to the success of the AdvantEdge program, which has approximately 90,000 members as at 30 June 2003.
Merchandise sales were in excess of $320,000 during the year, demonstrating the value of the company’s shopping
service to its member base.
The Presidential Card business encountered further difficulties during the year with client losses and fee pressure
arising due to new competition in the market. Management is currently reappraising all aspects of the Presidential Card
operations in order to increase market share and return the division to profitability.
The company is now actively exploring alternative models for the business and will continue to develop new
opportunities as they arise.
Significant Changes in the State of Affairs
No significant changes in the state of affairs of the consolidated entity occurred during the financial year, other than
those set out in this report.
Significant After Balance Date Events
Share Placement
At an extraordinary meeting held on 9th July 2003 shareholders approved the placement of 50 million shares. The
placement of these shares was completed on 29th August 2003 and raised $1.5 million.
- 3 -
CED AUSTRALASIA LIMITED
DIRECTORS’ REPORT
Significant After Balance Date Events (cont.)
Other
Apart from the matters set out above, no matter or circumstance has arisen since the end of the financial year that has
significantly affected or may significantly affect the operations of the consolidated entity, the results of those operations
or the state of affairs of the consolidated entity in future financial years.
Share Options
On 21st January 2003 options over 17,350,000 unissued ordinary shares expired and thus no ordinary shares were
issued.
During or since the end of the financial year no share options have been granted over unissued shares in the parent
company or any controlled entity.
Likely Developments
The particular information required by s299(1) of the Corporations Act (2002) has not been included in this report, as
the inclusion of such information is likely to result in unreasonable prejudice to the company.
Environmental Issues
The consolidated entity’s operations are not regulated by any significant environmental regulation under a law of the
Commonwealth or of a State or Territory.
Signed at Melbourne this 30th day of September 2003 in accordance with a resolution of the Board of Directors.
J A Nissen
Director
- 4 -
CED AUSTRALASIA LIMITED
FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2003
CED Australasia Limited is a company incorporated in Victoria, Australia
Registered Office and Principal Place of Business:
Level 1
596 North Road
Ormond VIC 3204
Refer to the Directors’ Report for nature of operations and principal activities
There were 8 employees of the parent entity as at 30 June 2003.
- 5 -
CED AUSTRALASIA LIMITED
STATEMENTS OF FINANCIAL PERFORMANCE
FOR THE YEAR ENDED 30 JUNE 2003
Sales Revenue
Cost of Sales
Gross Profit
Employee Related expenses
Occupancy Expenses
Communications Expenses
Operating Lease Minimum Lease Payments
Depreciation
Amortisation of Intangibles
Professional & Corporate Services
Write-off Presidential Card Trademark
Write-off Investment in Subsidiary
Write-down Intercompany Loans
Write-down Goodwill on Consolidation
Redundancy Costs
Revenue from Disposal of Licences
Carrying Value of Licenses Sold
Other Expenses from Ordinary Activities
Loss on Disposal of Controlled Entity
Other Revenue from Ordinary Activities
Profit/(Loss) from ordinary activities before income tax
expense
Income tax expense relating to ordinary activities
Profit/(Loss) from ordinary activities after related income
tax expense
Profit/(Loss) from extraordinary items after related income
tax expense
Note
Consolidated
Parent Entity
2003
$
2002
$
2003
$
3
3
1,208,038
(667,314)
3,441,686
682,927
(1,502,653)
(457,664)
2002
$
1,484,402
(924,036)
540,724
1,939,033
225,263
560,366
(791,672)
(125,100)
(228,798)
(165,853)
(228,453)
(2,570,650)
(473,195)
(1,280,506)
(416,960)
(125,100)
(517,907)
(74,974)
(263,345)
(165,853)
(401,734)
(126,076)
(252,105)
(147,390)
(263,345)
(172,738)
-
-
(493,280)
-
10
8
6
10
3
4
5
(317,255)
(516,456)
(292,410)
(304,055)
-
-
-
-
-
(1,962,185)
-
-
(6,400,702)
(100,000)
-
-
-
-
3,906,625
-
2,375,886
(3,906,625) -
(2,375,886)
-
(8,515,261)
(8,872,188)
-
(100,000)
-
-
(73,790)
(179,230)
190,060
(392,563)
(19,124)
(60,423)
-
-
-
522,881
151,889
529,360
(1,379,367)
(11,573,868)
(899,579)
(18,878,285)
-
-
-
65,562
(1,379,367)
(11,573,868)
(899,579)
(18,812,723)
-
-
-
-
Net Profit/(Loss)
(1,379,367)
(11,573,868)
(899,579)
(18,812,723)
Net (Profit)/Loss attributable to outside equity interests
15
-
19,080
-
-
Net Profit/(Loss) attributable to members of the parent
entity
(1,379,367)
(11,554,788)
(899,579)
(18,812,723)
Increase in Asset Revaluation Reserve
Net exchange difference on translation of financial reports
of self-sustaining foreign operations
Total revenues, expenses and valuation adjustments
attributable to members of the parent entity and recognised
directly in equity
2, 14
-
-
-
3,906,625
(8,652)
3,897,973
-
-
-
2,375,886
-
2,375,886
Total changes in equity other than those resulting from
transactions with owners as owners
14
(1,379,367)
(7,656,815)
(899,579)
(16,436,837)
Basic Earnings Per Share (Cents)
(2.0)
(21.8)
The above Statements of Financial Performance are to be read in conjunction with the attached notes.
- 6 -
CED AUSTRALASIA LIMITED
STATEMENTS OF FINANCIAL POSITION
AS AT 30 JUNE 2003
CURRENT ASSETS
Cash Assets
Receivables
Inventories
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Receivables
Investments
Property, Plant and Equipment
Intangibles
Note
Consolidated
Parent Entity
2003
$
2002
$
2003
$
2002
$
478,585
40,011
12,315
299,162
333,328
147,423
34,728
40,011
4,264
153,977
42,424
41,757
530,911
779,913
79,003
238,158
-
10
215,476
-
6,311
488,778
596,044
263
166,320
251,403
263
288,274
-
3,906,625
- 2,375,886
6
7
6
8
9
10
TOTAL NON-CURRENT ASSETS
215,486
4,401,714
762,627 2,915,826
TOTAL ASSETS
CURRENT LIABILITIES
Payables
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Payables
Provisions
746,397
5,181,627
841,630 3,153,984
101,045
49,428
2,584,052
118,689
110,526 1,506,422
94,293
32,158
150,473
2,702,741
142,684 1,600,715
-
24,285
567,979
23,911
695,948
13,907
695,948
23,911
11
12
11
12
TOTAL NON-CURRENT LIABILITIES
24,285
591,890
709,555
719,859
TOTAL LIABILITIES
174,758
3,294,631
852,239 2,320,574
NET ASSETS
EQUITY
Issued Capital
Reserves
571,639
1,886,996
(10,609)
833,410
13 25,420,010 25,364,450 25,420,010 25,364,450
- 2,375,886
14
3,800,475
-
Accumulated Losses
14 (24,848,371) (27,269,479) (25,430,619) (26,906,926)
Shareholders’ equity attributable to
members of the parent entity
Outside equity interests in controlled
entity
TOTAL EQUITY
15
14
571,639
1,895,446
(10,609)
833,410
-
(8,450)
-
571,639
1,886,996
(10,609)
833,410
The above Statements of Financial Position are to be read in conjunction with the attached notes.
- 7 -
CED AUSTRALASIA LIMITED
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2003
Cash Flows from Operating Activities:
Receipts from Customers
Payments to Suppliers and Employees
Interest Received
Interest Paid
Net Cash (Used in) Provided by Operating
Activities
Cash Flows from Investing Activities:
Proceeds from sale of license
Proceeds from Sale of Plant and Equipment
Payment for Plant and Equipment
Loan from Controlled Entity
Loan to Controlled Entity
Aggregate Cash Flows from entity disposed
of
Net Cash Provided by (Used in) Investing
Activities
Cash Flows from Financing Activities:
Share Issue
Proceeds from borrowings
Repayment of borrowing
Note
Consolidated
Parent Entity
2003
$
2002
$
2003
$
2002
$
1,481,928
(3,119,211)
26,863
-
3,543,246
(6,578,473)
22,643
(27,000)
758,897
(2,405,981)
23,697
-
1,594,299
(3,444,108)
46,714
(27,000)
2
(1,610,420)
(3,039,584)
(1,623,387)
(1,830,095)
1,802,516
-
(39,296)
-
-
-
6,549
(4,862)
-
-
1,802,516
-
(9,297)
-
(344,641)
-
4,037
-
-
(583,108)
(28,937)
-
-
-
1,734,283
1,687
1,448,578
(579,071)
55,560
300,000
(300,000)
2,079,000
55,560
300,000
(300,000)
2,079,000
Net Cash (Used in)/Provided by Financing
Activities
55,560
2,079,000
55,560
2,079,000
Net Increase (Decrease) in Cash Held
179,423
(958,897)
(119,249)
(330,166)
Cash at beginning of year
Effects of exchange rate fluctuations on the
balances of cash held in foreign currencies
1
1
299,162
1,274,791
153,977
484,143
-
(16,732)
-
-
Cash at end of year
478,585
299,162
34,728
153,977
- 8 -
CED AUSTRALASIA LIMITED
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2003
NOTES TO THE STATEMENTS OF CASH
FLOWS
1. Reconciliation of Cash
For the purpose of the statements of cash flows, cash
includes:
Cash at Bank and on Hand
2. Reconciliation of Cash Flow from Operations with
Operating Result After Income Tax
Operating Profit/(Loss) after Income Tax
Non-Cash Flows in Operating Profit/(Loss):
Amortisation
Depreciation
Amortisation of Goodwill
Write-off Presidential Card Trademark
Write-off Investment in Subsidiary
Write-down Intercompany Loans
Write-down Goodwill on Consolidation
Unrealised Exchange Loss
Employee Entitlements
Stock Obsolescence
Doubtful Debts
Restructure
Marketing Costs
Loss on Disposal of Controlled Entity
Loss on Sale of Fixed Assets
Profit on Sale of Fixed Assets
Foreign Currency Translation Movement
Outside Equity Interest
Changes in Assets and Liabilities
(Increase)/Decrease in Trade Debtors
(Increase)/Decrease in Prepayments and Other Debtors
(Increase)/Decrease in Inventories
(Decrease)/Increase in Trade Creditors
(Dccrease)/Increase in Creditors and Accruals
Consolidated
Parent Entity
2003
$
2002
$
2003
$
2002
$
478,585
299,162
34,728
153,977
(1,379,637)
(11,573,868)
(899,579)
(18,812,723)
-
228,453
-
-
-
-
-
-
(23,135)
-
(3,542)
(45,752)
-
179,230
5,175
-
-
8,450
139,169
46,491
-
(764,661)
115,423
401,734
377,857
1,962,185
-
-
6,400,702
82,673
(70,480)
(64)
(20,596)
(478,752)
(85,431)
-
6,107
(344)
(8,652)
-
86,361
365,578
69,879
(138,356)
(201,612)
-
126,076
-
-
-
-
-
-
(26,687)
-
(3,542)
(45,752)
-
-
5,175
-
-
-
5,955
-
37,493
-
(821,865)
-
172,738
-
-
8,515,261
8,872,188
-
-
(61,337)
(64)
(40,596)
(478,490)
-
-
4,305
(344)
-
109,779
62,067
1,088
(7,019)
(96,528)
(Decrease) in Deferred Membership Income and Sales
(661)
(329,928)
(661)
(70,420)
Cash Flows Provided by/(Used in) Operations
(1,610,420)
(3,039,584) (1,623,387)
(1,830,095)
3. Entities disposed of
Consideration received
Carrying amount of assets at deemed date of disposal
(1 July 2002)
Cash
Debtors
Inventory
Investments
Plant and Equipment
Trade Creditors
-
-
28,937
154,148
100,932
6,301
78,970
(548,518)
(179,230)
- 9 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
CED AUSTRALASIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2003
1. SUMMARY OF ACCOUNTING POLICIES
The financial report is a general purpose financial report which has been drawn up in accordance with applicable
Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board, Urgent
Issues Group Consensus Views, and the Corporations Act 2001.
The financial report has been prepared on the historical cost basis and does not take into account changing money
values or, except where stated, current valuations of non-current assets. Cost is based on the fair values of the
consideration given in exchange for assets. Fair value means the amount for which an asset could be exchanged, or a
liability settled, between knowledgeable, willing parties in an arms length transaction. The recoverable amount of non
current assets is assessed on the basis of the expected net cash flows which will be received from the asset’s
employment and subsequent disposal. The expected net cash flows have not been discounted to their present values in
determining recoverable amounts, unless otherwise stated. The accounting policies have been consistently applied and,
except where stated, are consistent with those of the previous year. Where necessary, comparative information has
been reclassified to achieve consistency in disclosure with current financial year amounts and disclosures.
The significant accounting policies which have been adopted in the preparation of this financial report are:
(a) Principles of Consolidation
The consolidated financial statements comprise the financial statements of CED Australasia Limited and all its
controlled entities (refer note 8). Entities have been consolidated in the financial statements from the date that control
exists. All intercompany balances and transactions between entities in the consolidated entity, including any unrealised
profits or losses, have been eliminated on consolidation.
Outside equity interest comprises the aggregate of the equity of controlled entities, other than that held either directly or
indirectly by the parent entity, after making adjustments for unrealised profits and losses of controlled entities and other
adjustments necessary to comply with Accounting Standards.
On 2 June 2003 the group disposed of a 75% interest in CAP Singapore, formerly Cendant Asia Pacific Pte Ltd for nil
consideration. It was not practical to obtain appropriate figures for the operations of this entity for the period up until its
date of disposal for inclusion in the financial report at 30 June 2003. The directors believe the result for the period to 2
June 2003 was a loss which would have resulted in a corresponding gain on disposal and no net impact on the
consolidated results.
The directors consider that the net revenues and expenses omitted from the annual report are not significant.
Although maintaining a 25% interest in the company the group has no direct involvement in the Asian operations, no
board representation and no commitment to provide future funding. The investment has nil carrying value and the
directors do not believe they are in a position to exert significant influence over the operations of the company.
(b) Inventories
Inventories are measured at the lower of cost and net realisable value. Costs are assigned on a first in first out basis.
(c) Investments
Investments are recognised in the financial statements at cost.
(d) Property, Plant and Equipment
Property, plant and equipment is included at cost, less where applicable, any accumulated depreciation or amortisation.
The carrying amount of property, plant and equipment is reviewed annually by directors to ensure it does not exceed
the recoverable amount.
The depreciation rates used for each class of asset are as follows:
* Office Furniture and Equipment 13% - 33%
* Motor Vehicles 20%
The depreciable amount of all fixed assets is depreciated on a straight line basis over their estimated useful lives
commencing from the time the asset is held ready for use.
- 10 -
CED AUSTRALASIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2003
1. SUMMARY OF ACCOUNTING POLICIES (Cont.)
(e) Intangibles
The carrying value of all intangible assets are assessed at least each reporting date to ensure they do not exceed their
recoverable amount. Where the carrying value exceeds this recoverable amount the excess of the carrying value over
the recoverable amount of the intangible asset is immediately recognised as an expense, except to the extent to which
the decrement reverses an increment previously recognised in an Asset Revaluation Reserve.
(i) Trade Marks
Trademarks owned by the consolidated entity are recorded at cost and amortised on a straight line basis over 20 years,
subject always to the recoverable amount test referred to above. In the previous financial year the Presidential Card
trademark was written-off.
(ii) Goodwill
Goodwill, representing the excess of the purchase consideration over the fair value of the identifiable net assets
acquired on the acquisition of a controlled entity, is amortised on a straight line basis over 20 years being the minimum
period of time during which benefits are expected to arise.
(iii) Licences
Licences owned by the consolidated entity are recorded at fair value based on the Directors’ assessment of the amount
for which the assets could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
Revaluations are made at least at each reporting date to ensure the carrying value of the assets do not differ materially
from their fair values.
(f) Membership Income
Memberships are generally for a period of twelve months. Under the terms and conditions of membership, members
are entitled to a full refund within forty-five days of renewal or take up of membership. The membership fees received
are initially recorded as deferred income and amortised as income in equal instalments over the annual term of the
membership.
(g) Membership Acquisition Costs
(i) Annual Memberships
Membership acquisition costs, which include costs associated with membership solicitations, mailings, membership
kits, postage, printing and publications, are charged to the profit and loss account in the year in which they are incurred.
(ii) Long-term Memberships
Membership acquisition costs relating to Payment Card Protection programs operated by CED Asia Pacific Pte Ltd are
amortised in equal instalments over the term of the membership.
(h) Receivables and Payables
Trade accounts receivable, amounts due from related parties and other receivables represent the principal amounts due
at balance date plus accrued interest less, where applicable, any provisions for doubtful accounts.
Accounts payable represent the principal amounts outstanding at balance date plus, where applicable, any accrued
interest.
(i) Employee Entitlements
The provisions for employee entitlements to wages, salaries and annual leave represent the amount which the
consolidated entity has a present obligation to pay resulting from employees’ services provided up to balance date. The
provision has been calculated at nominal amounts and includes related on-costs.
The liability for employee entitlements to long service leave represents the present value of the estimated future cash
outflows to be made by the employer resulting from employees’ services provided up to the balance date.
- 11 -
CED AUSTRALASIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2003
1. SUMMARY OF ACCOUNTING POLICIES (Cont.)
(j) Income Tax
The consolidated entity adopts the liability method of tax-effect accounting whereby the income tax expense for the
period is based on the operating result after adjusting for items which, as a result of their treatment under income tax
legislation, create permanent differences between that result and the taxable income or loss.
Timing differences, which arise due to the different accounting periods in which items of revenue and expense are
included in the determination of operating result, income tax and taxable income are brought to account as either
provision for deferred income tax or an asset described as future income tax benefit at the rate of income tax applicable
to the period in which the benefit will be received or the liability will become payable.
Future income tax benefits are not brought to account unless realisation of the asset is assured beyond reasonable doubt.
Future income tax benefits in relation to tax losses are not brought to account unless there is virtual certainty of
realisation of the benefit. The amount of benefits brought to account or which may be realised in the future is based on
the assumption that no adverse change will occur in income taxation legislation and the anticipation that the
consolidated entity will derive sufficient future assessable income and comply with the conditions of deductibility
imposed by the law to permit a future income tax benefit to be realised.
(k) Leases
Lease payments under operating leases, where substantially all the risks and benefits remain with the lessor, are
charged as expenses in the period in which they are incurred.
Where assets are acquired by means of finance leases, the present value of minimum lease payments is established as
an asset at the beginning of the lease term and amortised on a straight line basis over the expected economic life. A
corresponding liability is also established and each lease payment is allocated between such liability and interest
expense.
(l) Foreign Currency Transactions and Balances
Transactions in foreign currencies are initially measured and brought to account at the rate of exchange in effect at the
date of each transaction. Exchange differences relating to monetary items are brought to account in the Statements of
Financial Performance in the financial year in which the exchange rates change as exchange gains or losses.
(m) Translation of Controlled Foreign Entities
The Statements of Financial Position of overseas controlled entities that are self-sustaining foreign operations are
translated at the rates of exchange ruling at balance date. The Statements of Financial Performance are translated at the
average rates ruling during the year. Exchange differences arising on translation are taken directly to the foreign
currency translation reserve.
(n) Revenue Recognition
(i) Sales Revenue
Sales Revenue comprises revenue earned from the provision of products or services to entities outside the consolidated
entity. Sales revenue is recognised when the goods or services are provided or, in relation to Membership Income, as
set out in 1(f).
(ii) Other Revenue - Direct Cost Recovery
Direct Cost Recovery revenue comprises revenue earned from the provision of services, the costs of which are directly
recoverable from the client as they are incurred.
(iii) Interest Revenue
Interest Revenue is recognised as it accrues.
2. CHANGE IN ACCOUNTING POLICY
In 2002 the consolidated entity changed the measurement basis of the Cendant Licence from cost to fair value to reflect
the impact of the agreement to dispose of the licences.
- 12 -
CED AUSTRALASIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2003
Consolidated
Parent Entity
2003
$
2002
$
2003
$
2002
$
326,223
853,494
326,223
881,815
2,588,192
356,704
853,494
630,908
1,208,038
3,441,686
682,927
1,484,402
317,384
349,930
808,371
317,384
694,282
140,280
667,314
1,502,653
457,664
26,863
5,175
36,029
22,643
23,697
6,549
15,199
5,175
1,024
190,060
522,881
151,889
529,360
-
-
-
29,585
808,371
115,665
924,036
478,490
46,714
4,037
119
3. REVENUES FROM ORDINARY ACTIVITIES
Sales Revenue
Sale of Goods
Rendering of Services
Total Sales Revenue
Cost of Sales
Cost of Goods Sold
Services Expenses (Benefits)
Total Cost of Sales
Non-operating revenue
Interest
Disposal of assets other than goods
Sundry revenue items
Total non-operating revenue
Interest from related parties included in total interest
revenue
Entities in the wholly-owned group
Partly owned subsidiaries
4. LOSS FROM ORDINARY ACTIVITIES
Loss from ordinary activities includes:
Reversal of Provisions/Accruals not required
121,993
478,490
121,993
Net losses on disposals of property, plant & equipment
Aggregate inventory write-downs and other losses
8,773
43,817
6,107
8,773
41,485
31,633
4,305
16,236
Amortisation of non-current assets
Trademarks
Goodwill
-
-
115,423
377,857
493,280
-
-
-
-
-
Bad and Doubtful Debts expense
3,083
23,934
(3,542)
(8,431)
Net expense resulting from deductions from the carrying
amounts of assets
Net foreign currency exchange loss from ordinary
operations
-
-
8,362,887
104,828
-
-
17,387,449
-
- 13 -
CED AUSTRALASIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2003
Consolidated
Parent Entity
2003
$
2002
$
2003
$
2002
$
5. INCOME TAX
The amount provided in respect of income tax
differs from the amount prima facie payable on
the operating result. The difference is
reconciled as follows:
Prima Facie Income Tax on the Operating
Result Before Income Tax at 30%
(i) Tax Effect of Permanent Differences:
Amortisation of Intangibles
Write-off Intangible Assets
Write-off Investment in Controlled Entity
Write-off Intercompany Debts
Other Non-Allowable Expenses
(413,810)
(3,472,160)
(269,873)
(5,643,817)
-
-
-
-
147,984
2,508,866
-
-
-
-
-
-
(695)
(20,307)
(695)
-
-
2,661,656
2,554,578
(20,324)
(204,440)
(ii) Future Income Tax Benefit not Recognised
(252,584)
-
(iii) Tax Losses not Carried Forward
414,505
1,088,201
270,568
586,785
Income Tax Expense/(Credit) Attributable to
Result
The income tax expense/(credit) comprises
amounts set aside to:
Provision for Tax Payable
Provision for Deferred Tax
Future Income Tax Benefits
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(65,562)
(65,562)
-
-
(65,562)
The potential future income tax benefit arising
from tax losses has not been recognised as an
asset because recovery of tax losses is not
virtually certain.
5,503,946
5,089,441
1,940,411
1,669,843
- 14 -
CED AUSTRALASIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2003
6. RECEIVABLES
Current:
Trade Debtors
Sundry Debtors
Provision for Doubtful Debts
Consolidated
Parent Entity
2003
$
2002
$
2003
$
2002
$
76,059
-
(36,048)
261,304
60,371
(32,965)
49,434
-
(9,423)
47,438
-
(12,965)
Sub-total
40,011
288,710
40,011
34,473
Other Debtors and Prepayments
-
44,618
-
7,951
40,011
333,328
40,011
42,424
Non-Current:
Amounts Receivable from:
Controlled Entities
Included in the above are aggregate amounts
receivable from Controlled Entities
7. INVENTORIES
Finished Goods - at Cost
-
-
-
-
-
-
596,044
596,044
251,403
251,403
596,044
251,403
12,315
147,423
4,264
41,757
- 15 -
CED AUSTRALASIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2003
Consolidated
2003
$
2002
$
Parent Entity
2003
$
2002
$
8. INVESTMENTS
Shares in Controlled Entities
- unquoted - at Cost
Shares - Other – unquoted
at Cost
-
10
10
-
6,311
6,311
253
10
263
253
10
263
During the year ended 30 June 2003 the company concluded an agreement with local management in Singapore and the
Philippines to sell 75% of the company’s interest in those operations to the local country managers. The Company
therefore retains a 25% shareholding in CAP Singapore, formerly Cendant Asia Pacific, which in turn holds a 25%
interest in Cendant Philippines.
Controlled Entities
CED Membership Services Pty Ltd
(Inc in Victoria)
The Presidential Card Pty Ltd (Inc in
Victoria)
Golf Link Partners Pty Limited (Inc in
Victoria)
CUC Australasia Pty Ltd (Inc in
Victoria)
CED Online Pty Ltd (Inc in Victoria)
Golf Partners Australia Pty Ltd (Inc in
Victoria)
Golf Partners International Pty Ltd
(Inc in Victoria)
CED Asia Pacific Pte Ltd (Inc in
Singapore)(Refer Note 1a)
CED Hong Kong Limited (Inc in Hong
Kong)(1)
CED Philippines Inc (Inc in
Philippines)(1)
(1) Owned by CED Asia Pacific
Pte Ltd (the 6.25% represents CED
Australasia Ltd’s indirect interest
Holding
2003
%
Holding
2002
%
100
100
100
100
100
100
100
94.25
94.25
100
100
100
100
100
100
25
6.25
6.25
- 16 -
CED AUSTRALASIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2003
9. PROPERTY, PLANT AND EQUIPMENT
Office Furniture and Equipment
Cost
Accumulated Depreciation
Consolidated
Parent Entity
2003
$
2002
$
2003
$
2002
$
1,761,419
(1,545,943)
2,715,259
(2,226,481)
1,159,702
(993,382)
1,468,114
(1,179,840)
Total Property, Plant and Equipment
215,476
488,778
166,320
288,274
Office Furniture and Equipment
Movements during the year:
Beginning of year
Additions
Disposals
Depreciation expense
Net foreign currency exchange differences arising on
the translation of the financial statements of self-
sustaining foreign operations
488,778
45,000
(89,849)
(228,453)
904,265
4,862
(12,312)
(401,734)
288,274
15,000
(10,878)
(126,076)
520,527
-
(59,515)
(172,738)
-
(6,303)
-
-
End of year
215,476
488,778
166,320
288,274
10. INTANGIBLES
CED Licence:
Fair Value
-
3,906,625
2,375,886
-
-
Total Intangible Assets
-
3,906,625
2,375,886
- 17 -
CED AUSTRALASIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2003
10. INTANGIBLES (Cont.)
Trademark
Movements during the year:
Beginning of year
Additions
Disposals
Amortisation expense
Write-offs
End of year
Goodwill on Consolidation
Movements during the year:
Beginning of year
Additions
Write-offs
Amortisation expense
End of year
CED Licence
Movements during the year:
Beginning of year
Revaluation increment
Write-offs
End of year
Consolidated
Parent Entity
2003
$
2002
$
2003
$
2002
$
-
-
-
-
-
-
-
-
-
-
-
2,077,608
-
-
(115,423)
(1,962,185)
-
6,720,151
58,408
(6,400,702)
(377,857)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,906,625
-
3,906,625
-
3,906,625
-
2,375,886
-
(2,375,886)
-
2,375,886
-
-
3,906,625
-
2,375,886
CED Licences
At 30 June 2002 the two CED Licences held by the consolidated entity were recorded at fair value.
Fair value was calculated based on the agreements reached with CIMS Limited on 12 September 2002 for the sale of the
two licences, which provided for a total payment of US$1,000,000 (A$1,839,820) and extinguishment of debts totalling
$2,066,805 which were included in the consolidated entity’s liabilities as at 30 June 2002.
- 18 -
CED AUSTRALASIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2003
11. PAYABLES
Current:
Trade Creditors
Other Creditors and Accruals
Deferred Membership Income and Sales
Non-Current:
Amounts Payable to:
- Controlled Entities
Other Creditors
Included in the above are aggregate amounts payable
to Controlled Entities
Accounts payable are non-interest bearing (2002: non-
interest bearing)
12. PROVISIONS
Current:
Employee Entitlements
Restructure
Non-Current:
Employee Entitlements
Consolidated
Parent Entity
2003
$
2002
$
2003
$
2002
$
59,165
41,880
-
578,589
2,004,802
661
25,381
85,145
-
406,021
1,099,740
661
101,045
2,584,052
110,526
1,506,422
-
-
-
-
-
567,979
695,948
-
695,948
-
-
567,979
695,948
695,948
-
695,948
695,948
49,428
-
72,937
45,752
32,158
-
48,541
45,752
-
49,428
118,689
32,158
94,293
24,285
23,911
13,607
23,911
Aggregate Employee Entitlements
73,713
96,848
45,765
72,452
- 19 -
CED AUSTRALASIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2003
Consolidated
Parent Entity
2003
$
2002
$
2003
$
2002
$
13. ISSUED CAPITAL
Issued and Paid Up Capital:
67,478,527 (2002: 65,626,525) Fully Paid Ordinary
Shares
Movements during the year:
Opening Balance
Share Placement
Closing Balance
25,420,010
25,364,450
25,420,010
25,364,450
25,364,450
23,285,450
25,364,450
23,285,450
55,560
2,079,000
55,560
2,079,000
25,420,010
25,364,450
25,420,010
25,364,450
(i) Share Placements
On 30 May 2003 the parent entity issued 1,852,002 fully paid ordinary shares at 3 cents per share in the capital of CED
Australasia Limited under the Shareholder Purchase Plan. The issue raised $55,560.
On 29th August 2003 the parent entity finalised the issue of 50,000,000 fully paid ordinary shares at 3 cents per share in
the capital of CED Australasia Limited, following approval by shareholders at a General Meeting of the company held
on 9th July 2003. The issue was undertaken for the purpose of raising additional capital to invest in and develop future
business operations.
In September 2003 a further 412,216 fully paid ordinary shares were issued by the parent entity at 5.337 cents per share
in the capital of CED Australasia limited under the Shareholder purchase plan. The issue raised $22,000.
(ii) Share Options
No share options were granted over unissued shares in CED Australasia Limited during the current or previous financial
year. No shares have been issued by virtue of an exercise of an option during the year or to the date of this report.
At the end of the year there were no unissued ordinary shares in respect of which options were outstanding. During the
course of the financial year 17,350,000 options previously issued under the Executive Share Option Plan expired.
(iii) Employee Share Option Plan
No shares have been issued by virtue of an exercise of an option during the year or to the date of this report.
- 20 -
CED AUSTRALASIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2003
14. RESERVES, RETAINED PROFITS AND
TOTAL EQUITY
Reserves
Foreign Currency Translation Reserve
Asset Revaluation Reserve
Foreign Currency Translation Reserve
Movements during the year:
Opening Balance
Adjustment arising from the translation of foreign
controlled entity’s financial statements
Transfer to Retained Profits/Losses
Closing Balance
Asset Revaluation Reserve
Movements during the year:
Opening Balance
Increase (decrease) recognised in the statement of
financial performance on revaluation of assets
Transer to Retained Profits on
Write off on sale of license
Closing Balance
Retained Profits/(Losses)
Balance at beginning of year
Net Profit/(Loss) attributable to members of the
parent entity
Transfers from Asset Revaluation Reserve
Transfers from Foreign Currency Translation
Reserve
Consolidated
Parent Entity
2003
$
2002
$
2003
$
2002
$
-
-
-
(106,150)
3,906,625
3,800,475
(106,150)
(97,498)
-
106,150
-
(8,652)
-
(106,150)
-
-
-
-
-
-
3,906,625
-
2,375,886
-
2,375,886
2,375,886
-
-
-
-
-
(3,906,625)
-
3,906,625
-
3,906,625
-
2,375,886
(2,375,886)
-
-
2,375,886
(27,269,479)
(15,714,691)
(26,906,926)
(8,094,203)
(1,379,367)
3,906,625
(11,554,788)
-
(899,579)
2,375,886
(18,812,723)
-
(106,150)
-
-
-
Balance at end of year
(24,848,371)
(27,269,479)
(25,430,619)
(26,906,926)
Total Equity
Total Equity at beginning of year
Total Changes in Equity recognised in the
Statement of Financial Performance
Transactions with owners as owners
Contribution of Equity
1,886,996
7,359,886
833,410
15,191,247
(1,379,367)
(7,656,815)
(899,579)
(16,436,837)
55,560
2,079,000
55,560
2,079,000
Total changes in Outside Equity Interest
8450
104,925
-
-
Total Equity at end of year
571,639
1,886,996
(10,609)
833,410
- 21 -
CED AUSTRALASIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2003
15. OUTSIDE EQUITY INTERESTS IN
CONTROLLED ENTITY
Outside equity interests comprise:
Interest in accumulated losses at the beginning of the
financial year
Interest in operating loss after income tax
Dilution of outside equity interest on acquisition of
additional equity
Transfer on disposal of controlled entity
Interest in accumulated losses at the end of the
financial year
Interest in Share capital
Interest in Reserves
Total outside equity interests
16. DIRECTORS’ REMUNERATION
Total income paid or payable, or otherwise made
available to all directors of the company and all
directors of each entity in the consolidated entity from
the company or any related party
Number of directors of the parent entity whose total
income falls within the following bands:
$ 0 - $ 9,999
$ 10,000 - $ 19,999
$ 20,000 - $ 29,999
$ 30,000 - $ 39,999
$ 40,000 - $ 49,999
$ 50,000 - $ 59,999
$ 60,000 - $ 69,999
Consolidated
Parent Entity
2003
$
2002
$
2003
$
2002
$
(8,450)
-
(113,375)
(19,080)
-
8,450
-
-
-
-
89,607
(42,848)
33,477
921
(8,450)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
131,455
448,112
131,455
337,333
-
-
-
2
-
-
1
2
-
-
2
-
-
1
Directors of the parent entity who have held office during the financial year are:
John A Nissen
John H Whiting
Ken D Whiteman
- 22 -
CED AUSTRALASIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2003
Consolidated
Parent Entity
2003
$
2002
$
2003
$
2002
$
17. EXECUTIVES REMUNERATION
Total income received or due and receivable by
executive officers whose total income exceeds
$100,000
Number of executive officers whose total income
exceeds $100,000
$100,000 - $109,999
$110,000 - $119,999
$120,000 - $129,999
$130,000 - $139,999
$230,000 - $239,999
18. RELATED PARTY TRANSACTIONS
(a) Controlled Entities
Loan to Controlled Entities - Non-Current
Loan from Controlled Entities - Current
Loan from Controlled Entities - Non-Current
These loans are interest free.
There are no fixed terms of repayment.
Charges by Controlling Entity
Interest
These fees are charged on a commercial basis.
(b) Purchases from Controlled Entities
Purchases from controlled entities were made on a
commercial basis.
(c) Shares Held by Directors.
Aggregate number of shares held by directors and their
related entities in CED Australasia Limited at balance
date
Aggregate number of shares purchased by directors
and their related entities during the year
Aggregate number of shares disposed of by directors
and their related entities during the year
-
-
-
-
-
-
-
-
-
-
-
859,745
-
616,506
1
1
1
2
-
-
-
-
-
-
-
-
-
-
-
-
1
1
1
1
596,044
-
695,948
251,403
-
695,948
-
29,586
15,058
No.
No.
2,211,016
2,211,016
35,600
1,000
- 23 -
CED AUSTRALASIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2003
19. FOREIGN CURRENCY MONETARY ITEMS
Current Liabilities not effectively hedged:
- US Dollar
20. FINANCIAL INSTRUMENTS
Consolidated
Parent Entity
2003
$
2002
$
2003
$
2002
$
-
264,423
-
264,423
The financial assets and liabilities are recognised in the financial statements at values approximating their net fair values.
The company has no significant concentration or exposure to credit risk. The maximum credit risk exposure of financial
assets is represented by the carrying amount of the assets in the balance sheet.
21. STATEMENT OF OPERATIONS BY SEGMENT
Year ended 30 June 2003
The consolidated entity operates within Australia in the provision of membership-based business and consumer services.
All sales are to customers outside the consolidated entity.
Year ended 30 June 2002
Operating Revenue
Australia
$
Asia
$
Total
$
Sales to customers outside the consolidated
entity
Inter-segment sales
Unallocated Revenue
Total Revenue
Segment results
Unallocated Expenses
3,213,942
-
-
750,625
-
-
3,964,567
-
-
3,213,942
750,625
3,964,567
(3,736,122)
-
(1,143,184)
-
(4,879,306)
(6,694,562)
Consolidated Operating Loss before Tax
(3,736,122)
(1,143,184)
(11,573,868)
Segment Assets
Unallocated Assets (eliminations)
3,265,806
-
1,915,821
-
5,181,627
-
Total Assets
3,265,806
1,915,821
5,181,627
- 24 -
CED AUSTRALASIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2003
22. COMMITMENTS FOR EXPENDITURE
(a) Operating Lease Commitments
Payable:
- Not later than one year
- Later than one year but not later than five years
- Later than five years
(b) Golf Link
Consolidated
Parent Entity
2003
$
2002
$
2003
$
2002
$
110,825
281,532
-
195,195
443,300
5,038
110,825
281,532
-
195,195
443,300
5,038
392,357
643,533
392,357
643,533
In accordance with the parent entity’s agreement with the Australian Golf Union the consolidated entity retains a
commitment to rollout the Golf Link National Handicap System to all AGU affiliated golf clubs in Australia however the
future liability in relation to this commitment is unable to be quantified as at 30 June 2003.
(c) Financial Support
The parent entity has undertaken to provide ongoing financial support to its controlled entity CED Asia Pacific Pte Ltd,
which as from 12 September 2003 is a wholly owned subsidiary of the parent entity.
23. EARNINGS PER SHARE
Consolidated
Entity
2003
Consolidated
Entity
2002
Basic Earnings Per Share (cents per share)
(2.0)
(21.8)
Weighted average number of ordinary shares on issue
used in the calculation of basic earnings per share:
Earnings used in the calculation of basic earnings per
share:
24. EVENTS SUBSEQUENT TO REPORTING DATE
SHARE ISSUES
65,849,373
53,101,046
($1,379,367)
($11,554,788)
On 29th August 2003 the parent entity finalised the issue of 50,000,000 fully paid ordinary shares at 3 cents per share in
the capital of CED Australasia Limited, following approval by shareholders at a General Meeting of the company held
on 9th July 2003. The issue was undertaken for the purpose of raising additional capital to invest in and develop future
business operations.
In September 2003 a further 412,216 fully paid ordinary shares were issued by the parent entity at 5.337 cents per share
in the capital of CED Australasia limited under the Shareholder purchase plan. The issue raised $22,000.
- 25 -
CED AUSTRALASIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2003
Consolidated
Parent Entity
2003
$
2002
$
2003
$
2002
$
25. AUDITOR’S REMUNERATION
Auditors of the Parent Entity
Other Services from Auditors of the Parent Entity
Other Auditors
Other Services from Other Auditors
25,000
3,850
-
-
35,620
19,909
31,648
3,261
25,000
3,850
-
-
22,120
19,909
-
-
The auditors received no other fees or benefits.
- 26 -
CED AUSTRALASIA LIMITED
DIRECTORS’ DECLARATION
The directors of the company declare that:
1.
the financial statements and notes of the company and of the economic entity:
(a) comply with Accounting Standards and the Corporations Act 2001; and
(b) give a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2003 and
of their performance for the year ended on that date;
2.
in the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as
and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
J A Nissen
Director
Dated this 30th day of September 2003
Melbourne
- 27 -
A Member Firm of PKF International
INDEPENDENT AUDIT REPORT
TO MEMBERS OF CED AUSTRALASIA LIMITED
Scope
The Financial Report and Directors’ Responsibility
flows, accompanying notes
The financial report comprises the statement of financial
position, statement of financial performance, statement of
cash
financial
statements, and the directors’ declaration for both CED
Australasia Limited the company and the consolidated
entity, for the year ended 30 June 2003. The consolidated
entity comprises both the company and the entities it
controlled during that year.
the
to
The directors of the company are responsible for the
preparation and true and fair presentation of the financial
report in accordance with the Corporations Act 2001. This
includes responsibility for the maintenance of adequate
accounting records and internal controls that are designed
to prevent and detect fraud and error, and for the
accounting policies and accounting estimates inherent in
the financial report.
Chartered Accountants
& Business Advisers
Level 11, CGU Tower
485 La Trobe Street
Melbourne 3000
GPO Box 5099BB
Melbourne 3001
(03) 9603 1700
Tel:
Fax: (03) 9602 3870
www.pkf.com.au
We formed our audit opinion on the basis of these
procedures, which included:
(a) examining, on a test basis, information to provide
evidence supporting the amounts and disclosures in
the financial report, and
(b) assessing the appropriateness of the accounting
policies and disclosures used and the reasonableness
of significant accounting estimates made by the
directors.
controls over
While we considered the effectiveness of management’s
internal
reporting when
determining the nature and extent of our procedures, our
audit was not designed to provide assurance on internal
controls.
financial
Audit Approach
Independence
the
financial
We conducted an independent audit in order to express an
opinion to the members of the company. Our audit was
conducted
in accordance with Australian Auditing
Standards in order to provide reasonable assurance as to
whether
free of material
report
misstatement. The nature of an audit is influenced by
factors such as the use of professional judgement, selective
testing, the inherent limitations of internal control, and the
availability of persuasive rather than conclusive evidence.
Therefore, an audit cannot guarantee that all material
misstatements have been detected.
is
We performed procedures to assess whether in all material
respects the financial report presents fairly, in accordance
with the Corporations Act 2001, including compliance with
Accounting Standards and other mandatory financial
reporting requirements in Australia, a view which is
consistent with our understanding of the company’s and
the consolidated entity’s financial position, and of their
performance as represented by
their
operations and cash flows.
the results of
In conducting our audit, we followed applicable
independence requirements of Australian professional
ethical pronouncements and the Corporations Act 2001.
Audit Opinion
In our opinion, the financial report of CED Australasia
Limited is in accordance with:
(a)
the Corporations Act 2001, including:
(i) giving a true and fair view of the company’s
and consolidated entity’s financial position as
at 30 June 2003, and of their performance for
the year ended on that date, and
(ii) complying with Accounting Standards
in
Australia and the Corporations Regulations
2001; and
(b) other mandatory financial reporting requirements in
Australia.
Chartered Accountants
30 September 2003
Melbourne
A Victorian Partnership
R A Dean
Partner
- 28 -
board of directors
Mr John A Nissen
Non-executive Chairman - appointed 2 March 1989
John Nissen has been in the Securities industry for the past twenty-nine years and was formerly an Associate Director
with a leading Melbourne stockbroker. He is Managing Director of Rhys Capital Pty Ltd, an investment and corporate
advisory business; a Non-executive Director of Poltech International Limited and Chairman of two Victorian based
resort companies. He is Chairman of the Audit Committee. Age 55
Mr John H Whiting
Non-executive Director - appointed 12 December 1997
John Whiting’s career focus has been in retailing. From 1972-1980 he was employed by McEwans in store management
and merchandising positions. After running his own manufacturing and importing business from 1980-1989, John began
consulting to a wide variety of retailers and their suppliers. Clients included McEwans, Coles Myer, Mitre 10,
Westralian Forest Industries, Black and Decker, Dulux and George Patterson Advertising. These projects covered a
range of retail product categories, including hardware, office supplies, clothing, timber and pharmaceutical. Age 54
Mr Ken D Whiteman
Non-executive Director - appointed 15 May 2003
Ken Whiteman has worked as a Self – Employed Consultant advising various businesses for the past 8 years. Prior to
that he was a partner in an Accounting Practice. Ken is a Certified Practising Accountant. Age 35
- 29 -
additional information
1. SHAREHOLDING – 29SEPTEMBER 2003
(a) Distribution of Shareholders
Category
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Holders
32
30
20
50
31
163
(b) Shareholdings less than Marketable Parcels
The number of shareholdings on the company’s register as at 29 September 2003 which are less than a marketable parcel
is 115.
(c) Twenty Largest Shareholders
Name
Nefco Nominees Pty Ltd
National Nominees Limited
Grande Dame Pty Ltd
Sidcorp Pty Ltd
Moggs Creek Pty Ltd (Superannuation Account)
ANZ Nominees Limited
Grange Investments Pty Ltd
CUC Asia Holdings
Stichting Stroeve Global
Moggs Creek Pty Ltd (Superannuation Account)
Citicorp Nominees Pty Limited
Consolidated Investments Australasia Pty Ltd
Prime Endevour Pty Ltd
CED Australasia Limited-Marketable Sale Facility
Westpac Custodian Nominees Limited
Mr Geoffrey Sinclair
Cyrtha Corporation NV
DEODEO Corporation
Stannington Pty Ltd
Ms Laurence Isabelle Ducoin
TOTAL
(d) Substantial Shareholders
Nefco Nominees
National Nominees Limited
Grande Dame Pty Ltd
Sidcorp Pty Ltd
Moggs Creek Pty Ltd (Superannuation Account)
(e) Voting Rights
All shares have equal voting rights.
- 30 -
%
33.88
23.03
10.18
8.48
4.49
3.21
2.54
1.72
1.70
1.50
1.27
0.85
0.78
0.64
0.62
0.47
0.36
0.34
0.33
0.25
96.64
Shareholding
39,940,655
27,152,539
12,000,000
10,000,000
5,292,651
3,786,633
3,000,000
2,024,676
2,000,000
1,766,667
1,493,105
1,000,000
915,000
754,151
736,518
550,000
425,000
400,000
390,600
300,000
113,928,195
39,940,655
27,152,539
12,000,000
10,000,000
7,059,318
additional information (cont.)
2. CORPORATE GOVERNANCE
Board of Directors
The Board of Directors is responsible for the Corporate Governance of the company including:
* Establishing strategic direction
* Approval of budgets and related business plans
* Monitoring of performance against these plans
* Reporting to shareholders.
Composition of the Board
The Board currently consists of 3 non-executive directors, including the chairman. Details of the directors currently in
office are set out in the financial report. The constitution of the company provides that one third of the directors retire
from office at the Annual General Meeting each year. Such retiring directors may be eligible for re-election.
If a casual vacancy is created during the year, the Board identifies appropriate candidates and may appoint them as
directors during the year. Such candidates must stand for election at the next Annual General Meeting.
The Board reviews the remuneration of the chief executive officer and senior executives after obtaining appropriate
professional advice. Non-executive directors are remunerated from the aggregate amount approved by shareholders at
an Annual General Meeting. The amount paid to a director may vary depending on the level of the Board
responsibilities. Details of the remuneration of directors are set out in the financial report.
Audit Committee
The current members of the Audit Committee are:
* Mr J A Nissen
* Mr J H Whiting
The external auditors, chief executive officer, company secretary and other relevant personnel may be invited to attend
meetings when required.
The Committee’s responsibilities include:
* Reviewing accounting policies and controls
* Reviewing financial budgets and business plans
* Reviewing the financial statements
* Liaising with external parties on relevant issues.
The Committee reviews the external auditor’s terms of engagement including remuneration and makes recommendations
to the Board.
Ethical Standards
The company acknowledges the requirement of both directors and employees to adhere to the highest standards of
corporate responsibility, referred to in the company’s employee handbook.
- 31 -