ANNUAL
FINANCIAL REPORT
30 June 2014
VILL A WORLD LIMITED
ABN 38 117 546 326
Villa World Limited
ABN 38 117 546 326
Level 1 Oracle West
19 Elizabeth Avenue, Broadbeach QLD 4218
PO Box 1899, Broadbeach QLD 4218
+61 7 5588 8888
www.villaworld.com.au
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SHAREHOLDE RS INFORMATION
VILLA WORLD LIMITED
Villa World Limited ABN 38 117 546 326
Level 1 Oracle West, 19 Elizabeth Avenue, Broadbeach QLD 4218
Mailing address: PO Box 1899, Broadbeach QLD 4218
Telephone: +61 7 5588 8888
Facsimile: +61 7 5588 8800
Website: www.villaworld.com.au
Email: info@villaworld.com.au
Shareholder information and enquiries
All enquiries and correspondence regarding shareholdings should
be directed to Villa World’s share registry provider:
Computershare Investor Services Pty Limited
Mailing address: GPO Box 2975EE, Melbourne VIC 3000
Telephone: 1300 651 684 or +61 3 9415 4000 (outside Australia)
Fax: +61 3 9473 2500 (within & outside Australia)
Website: www.computershare.com.au
Email: web.queries@computershare.com.au
Villa World Info line
Inside Australia: 1300 552 434
Outside Australia: +61 7 5588 8851
Company Secretary: Paulene Henderson
CONTENTS
Villa World Vision, Mission and Values
Key Highlights
Chairman’s Address
CEO and Managing Director’s Review
Operating Financial Review
Directors’ Report
Auditor’s Independent Declaration
Financial Report
Directors’ Declaration
Independent Auditor’s Report to the Members of Villa World Limited
ASX Additional Information
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P.2 VILL A WORLD LIMITED ANNUAL REPORT 2014
VILLA WORLD VISION,
MISSION AND VALUES
VISION
Villa World’s vision is to be the company of choice for people to achieve success
through property.
MISSION
Villa World’s mission is to create property solutions where demand meets opportunity
as we deliver value and positive experiences across all our relationships.
VALUES
PERFORMANCE
We effi ciently deliver effective
and quality outcomes to achieve
fi nancial objectives.
AGILITY
We are agile in how we run the
business, we adapt quickly and
initiate change.
INTEGRITY
Our people are accountable,
make ethical decisions and are
socially responsible.
KNOWLEDGE
Our team applies high level skills
to achieve positive outcomes.
UNITY
We are a team – we care for and
empower our people, support each
other and recognise achievements.
RESPECT
We value and appreciate our people,
partners and customers.
Park Vista – Mango Hill, Brisbane
Cascades – Clyde North, Melbourne
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.3
KEY HIGHLIGHTS
Strong performance, profi t before tax
exceeded guidance at $22.6 million
(25.8 cps).
Statutory net profi t after tax of
$19.1 million (EPS: 21.8 cps)
(FY13: $13.5 million loss, (18.2cps)).
Total shareholders return1 of 92%
Full year dividend of 15 cps, fully
franked; full year payout ratio at 74%
of NPAT
$141.5 million in carried forward sales2
at projects completing in FY15 & FY16
Revenue growth of 35% to $229.5
million (FY13: $169.4 million)
Gearing3 of 18.7% at 30 June 2014
(FY13: 24.4%)
$32.2 million capital raising at $1.60
per share in September 2013
Sales growth of 36% to 829 (FY13: 610)
Acquisition success with 3,925 lots in
the Development Portfolio at August
2014, an increase of 48% compared to
prior year
$155 million bank facility in place until
1 September 2016; $87 million in cash
on hand and unused capacity at 30 June
2014
Continue to invest wisely for the
future; $89.5 million invested in
new projects throughout the year,
$67 million through working capital
(inclusive of capital raising) and debt
and the balance through the “capital
lite” model
1. Share price growth of 79% from $1.13 at 30 June 2013 to $2.02 30 June 2014 plus 15 cps dividend
2. Represents Gross Sales Price inclusive of GST.
3. (Interest bearing liabilities – Cash) / (Total assets – cash)
P.4 VILL A WORLD LIMITED ANNUAL REPORT 2014
CHAIRMAN’S
ADDRESS
It is a pleasure to present my fi rst report following
my appointment as Independent Chairman of
Villa World in May 2014. The separation of the
Executive Chairman and Managing Director
roles highlights the Board’s commitment to
implementing a higher level of corporate
governance for Villa World. This includes an
intention to appoint another non-executive
Board member during 1H15.
Despite mixed economic conditions throughout
FY14, Villa World has maintained its momentum for
achieving success through property.
I am pleased to report a statutory after tax profi t of
$19.1m for the year. This result, together with Villa
World’s strong operating cash fl ow, has enabled the
Board to declare dividends of 15 cents per share
for the year, in line with the Board’s dividend policy
of paying out 50% to 75% of net profi t after tax.
Continued shareholder support has further been
rewarded with a signifi cant increase in our share
price over the year.
The balance sheet is in a strong position with a net
asset value of $1.92 per share. The Company has a
low gearing ratio of 18.7% with cash and headroom
on its debt facility of $87 million. The Company
completed a $32.2 million capital raising during the
year which has been applied towards working capital
and funding acquisitions.
An amount of $89.5 million was paid out for new
acquisitions during the year. The Company’s
development pipeline has increased to 3,925 lots
in proven regions as well as new geographies,
representing 4.7 years supply of sales. Our robust
balance sheet together with strong project cash
fl ows, will enable Villa World to continue building the
project pipeline in FY15 and beyond with particular
focus on the south east Queensland and Melbourne
markets and to a lesser extent New South Wales.
Looking forward we are determined to leverage our
key market advantages - location, price, product
design, and delivery capability - to capitalise on
opportunities in the Australian residential property
market. The Board will maintain Villa World’s
strategy of low risk development of land and housing
in the affordable to mid-market range.
We will continue to locate the majority of Villa
World’s developments in growth locations that are
close to employment and amenities. This reduces
development risk and helps to maintain buyer
demand in more diffi cult market conditions.
A competitively priced core product is at the heart
of our portfolio – allowing us to capitalise on the
market’s focus on value for money. Last year we
actively marketed this point of difference. We will
continue to target traditional end-user buyers as
well as local investors to a lesser extent.
Our product design is constantly reviewed to
ensure we are meeting the needs of our buyers and
delivering a well-designed quality fi nished product.
We have responded to the trend of open plan,
functional sized homes on low maintenance lots and
will soon be rolling out a new range of designs.
For over 25 years, Villa World has proven its
capability in delivering land and house construction.
We have built over 17,000 houses and have
established sound building systems and strong
long term relationships with suppliers and sub-
contractors that enable us to deliver quality products
at affordable prices.
The Board is confi dent that these key market
advantages, combined with our strong balance
sheet, will increase shareholder value and promote
growth in the future years.
This promising future is largely due to our strong
management team under the capable leadership
of Craig Treasure, our CEO and Managing Director.
I would like to take this opportunity to thank
Craig and his dedicated team for the outstanding
results they have produced and for creating a
strong platform for the future.
lll
M k J
Mark Jewell
Chairman
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.5
Circa - Nudgee, Brisbane
P.6 VILL A WORLD LIMITED ANNUAL REPORT 2014
CHIEF EXECUTIVE OFFICER
AND MANAGING DIRECTOR’S
REVIEW
ACQUISITIONS TO LAY THE FOUNDATION FOR
SUCCESS
In FY14, our focus was on acquisitions of projects in
new areas to provide geographic diversifi cation, as
well as replacement projects for completed or near
completed projects.
As at August 2014 we had a portfolio of 3,925 lots,
representing approximately 4.7 years of sales.
Sales success in Queensland has prompted us to
acquire replacement projects for Circa and Park
Vista. Villa World will return to the Gold Coast in
2015 with Parkside, a 108 lot project in Coomera,
and shortly thereafter, with a 107 lot project in
Jacob’s Well. Bayside acquisitions Era and Waterline
will also commence sales in the coming year.
The Victorian land bank was bolstered over the
course of the past year, with 902 lots acquired over
six projects. To date, we have acquired one project
at Lacosi Hill Estate in north western Sydney. This
project is selling well, and is expected to contribute
to revenue in the coming year. This project will allow
the Company to re-establish our Sydney operations
in a controlled manner. Acquisitions will continue
to be a priority in the year ahead. Our strategy is to
create a land bank of fi ve to six years supply, with
Queensland and Victoria representing an equal
weighting in our portfolio, as well as establishing
an initial presence in New South Wales. This will
be achieved by targeting projects with a short to
medium life cycle balanced with some longer dated
projects that have the right strategic fi t, structured
as joint ventures or staged payment transactions.
The Company has achieved outstanding results
throughout the past year. We remained committed
to delivering on our targets, and fi nished the year
with strong full year results exceeding our profi t
guidance. I am particularly proud that we achieved
signifi cant growth in sales, operating profi t after
tax and were able to recommence paying dividends
to shareholders.
Maintaining our focus on four key strategic pillars –
acquisitions, sales, delivery and capital management
– throughout FY14 has allowed the Company to
deliver superior results. We look forward to building
on this success with a continued focus on our
strategic pillars in the year ahead.
DELIVERING VALUE TO OUR SHAREHOLDERS
Shareholders have seen some very strong results
with the share price increasing by 79% for the year
to 30 June 2014. This result, combined with the
interim and fi nal dividend gives our shareholders
total returns of 92% – an outstanding result.
The statutory result for the year was a net profi t
after tax of $19.1 million (EPS: 21.8 cps) compared
to a net loss after tax of $13.5 million the
previous year.
There was a signifi cant growth in revenue from
land development and residential building to
$229.5 million, a 35% increase on the previous
year. Operating profi t before tax was $22.6 million,
in excess of the guidance released in May 2014.
Revenue growth of 35% compared to prior year
was attributed to the higher level of accounting
settlements as well as an increase in the average
revenue per lot.
Our strong fi nancial position saw the return to
dividends, with a total 15 cents per share fully
franked, declared in relation to FY14.4 This
represents a payout ratio of 74% of Net Profi t after
Tax, and is at the higher end of the Board’s stated
dividend policy of paying out 50% to 75% of Net Profi t
after Tax.
4. Final Dividend, fully franked, of 9 cents per share was declared post 30 June 2014.
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.7
Shareholders have seen some very strong results with the share price increasing by 79%
for the year to 30 June 2014. This result, combined with the interim and fi nal dividend gives
our shareholders total returns of 92% – an outstanding result.
MAINTAINING SALES MOMENTUM
For the second consecutive year, the Company
has enjoyed strong sales. Against a backdrop of
mixed economic conditions, our broad sales strategy
is on track and delivering strong results. Sales to the
end of June 2014 were 829 compared with 610
twelve months ago – a robust performance from
our sales team.
We will continue to broaden our sales strategy to
target three key customer groups – our traditional
retail buyers, fi rst home buyers and to a lesser
extent investors.
DELIVERING TO MEET DEMAND
In the past fi nancial year, we have produced
193 lots of land only product, and built 425
homes on registered lots. We also celebrated a
major milestone with our fi rst Villa World homes
completed in Victoria, at our Cascades on Clyde
project.
With strong sales across many projects in FY14,
and a number of projects brought forward to satisfy
market demand, a key challenge for the fi rst half of
FY15 will be replenishing our stock of completed or
near completed product. We expect this sharpened
focus on delivery will allow for a marked increase
in sales in the second half of FY15.
SOUND CAPITAL MANAGEMENT
Throughout the past year, the Company has
successfully completed a capital raising of $32.2
million, at $1.60 per share and has increased our
debt facility to $155 million.
In keeping with our commitment to being an
accessible and transparent company throughout
the year we have conducted roadshows, investor
visits and site tours across Brisbane, Sydney and
Melbourne, speaking with current and prospective
investors and analysts, as well as institutional and
retail stock brokers.
Cardinia Views – Pakenham, Melbourne
Parkside – Coomera, Gold Coast
Lacosi Hill – Schofi elds, North West Sydney
P.8 VILL A WORLD LIMITED ANNUAL REPORT 2014
Era – Capalaba, Brisbane
CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR’S
REVIEW (CONTINUED)
We end the year with the support of many
institutional shareholders. We are confi dent that
our investor relations strategy should benefi t
all shareholders by providing stock liquidity and
allowing for a better share valuation.
The fi rst tranche of the Eynesbury Project, of which
the Company holds a 50% interest, settled in June
2014. After settling some debt held by the Joint
Venture, $9 million was returned to each partner
in July 2014. These monies will be reallocated to
acquisitions with a short to medium-term life cycle.
We expect the second tranche of Eynesbury to settle
in the second half of FY15.
OUTLOOK
Assuming general consumer confi dence is
maintained, interest rates remain low and fi rst
home buyer grants remain in place, we are confi dent
the next year will be a year of continuing success
through property. Our focus will remain on delivering
and settling carried forward sales, increasing the
level of available stock and bringing to market
recently acquired projects, while continuing the
search for new acquisition opportunities.
A DEDICATED TEAM
Villa World is committed to strengthening the
capacity of our team to deliver. As well as the
appointment of Mark Jewell as Independent
Chairman, we continued to strengthen our corporate
governance team, welcoming Gerry Lambert as
Chairman of the Audit and Risk Committee in June
2014. Gerry brings a wealth of experience as a
director of both private and listed companies.
I would like to close out the year by extending my
thanks to members of my executive team and our
staff for their hard work in achieving an outstanding
result for Villa World, our customers and investors.
We have strived to develop a positive team culture
and I am confi dent that every member of our team is
focused on supporting our Company’s growth.
Craig Treasure
C
CEO and Managing Director
East Ridge – Thornlands, Brisbane
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.9
CURRENT PROJECTS
ACQUISITIONS
GLADSTONE
Little Creek - Gladstone, QLD
Parkside at Little Creek - Gladstone, QLD
HERVEY BAY
Augustus - Hervey Bay, QLD
The Domain - Hervey Bay, QLD
BRISBANE
Astonbrook - Carindale, QLD
Bay Road - Burpengary, QLD
Circa - Nudgee, QLD
Circa Metro - Nudgee, QLD
East Ridge - Thornlands, QLD
Mt Cotton Village - Mt Cotton, QLD
Orana - Mango Hill, QLD
Park Vista - Mango Hill, QLD
Era - Capalaba, QLD
Nudgee, QLD
Mango Hill, QLD
Redland Bay, QLD
Rochedale, QLD
Waterline - Thornlands, QLD
BRISBANE GOLD COAST CORRIDOR
Brookside - Ormeau, QLD
Longhill Rise - Gilston, QLD
Jacobs Well, QLD
Parkside - Coomera, QLD
TWEED COAST
First Light - Casuarina, NSW
Seaside Village - Casuarina, NSW
NORTH WEST SYDNEY
Lacosi Hill Estate - Schofi elds, NSW
VICTORIA
Cascades on Clyde - Clyde North, VIC
Eynesbury - Eynesbury, VIC
Cardinia Views - Pakenham, VIC
Greenvale, VIC
Parkview - Truganina, VIC
Plumpton 1, VIC
Plumpton 2, VIC
Roxburgh Park Central - Roxburgh Park, VIC
P.10 VILL A WORLD LIMITED ANNUAL REPORT 2014
OPERATING FINANCIAL
REVIEW
The statutory fi nancial result for FY14 was a net
profi t after tax of $19.1 million, compared to a net
loss after tax of $13.5 million in FY13. Revenue
increased by 35% to $229.5 million, with strong
performances at Park Vista, Circa, Brookside, First
Light and Cascades on Clyde. Revenue was achieved
through very strong sales during FY14 combined
with $80.8 million of carried forward sales contracts
from 30 June 2013. Thirteen projects contributed to
the FY14 result, steady on FY13.
There were 721 accounting settlements5 during
FY14, a 12% increase on FY13. Of these, 662
accounting settlements were Villa World lots, and
contributed to the revenue of $229.5 million. The
balance of 59 accounting settlements, related to
Villa World’s 50% share of lots settled at its joint
venture Eynesbury; these are refl ected in the
fi nancial results for the year through Share of Joint
Venture Profi t.
Revenue growth of 35% year on year was attributed
to the higher level of accounting settlements as
well as an increase in the average revenue per
lot to $347,000 (FY13: $278,000). The revenue per
lot of both house and land, and land only product
increased over the period, due to some sales price
increases, as well as the settlement of higher price
point projects over the period (such as the premium
housing product at Circa and premium beachside
land at First Light). Further, the product mix shifted
toward house and land product over the year (FY14:
78%; FY13 59%).
Accounting Settlements
- No. of Lots
FY13
FY14
House & Land
Land Only
Joint Ventures
TOTAL
276
334
610
37
646
447
215
662
60
721
▲
▼
▲
▲
▲
Revenue ($million)
FY13
FY14
House & Land
Land Only
TOTAL REVENUE
99.1
70.3
179.9 ▲
49.5
▼
169.4
229.5 ▲
Average Revenue ($k/lot)
FY13
FY14
House & Land
Land Only
AVERAGE REVENUE
360
210
278
403
230
347
▲
▲
▲
CASH FLOW
Strong operating cash fl ows as well as a capital
raising in September 2013 enabled the Company
to expend $89.5 million on the acquisition of new
land, whilst ending the year in a strong cash and
debt position. During the year, $67.7 million in cash
was generated from operating activities. This cash
generation was reasonably consistent throughout
the year, approximately $5.6 million per month.
The Placement and Share Purchase Plan raised
$32.2 million at $1.60 per share and introduced
many new institutions to the share register.
5. Accounting settlements require cash settlement in New South Wales. In Queensland and Victoria, cash settlement is not required;
rather an unconditional sales contract and for land only, land registration or for house and land, land registration and a certifi cate of
building completion is required.
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.11
GROSS MARGIN
The gross margin for FY14 was $56.9 million,
an increase of 21% on FY13 (FY13: $47.0). As a
percentage, the gross margin was 24.8% (FY13:
27.7%). During the period, additional costs and
provisions were incurred in relation to previously
announced warranty issues at Thornleigh and
Silverstone. On a normalised basis, the gross margin
was 27.0%, within our target range.
In the coming year, the gross margin is expected
to lie at the lower end of the target range of 26% to
29%. A balance will continue to be struck between
margin and sales volume.
SALES CONTRACTS CARRIED FORWARD
At 30 June 2014, the Company carried forward 335
sales contracts (worth $141.5 million6). Of these,
239 contracts worth $107.1 million6 will settle in
1H15. These include lots at Astonbrook, Cascades
on Clyde, East Ridge, Park Vista and Mount Cotton.
Parkview, Orana and a portion of Lacosi Hill, will
be delivered in 2H15, and 67 contracts worth $25.2
million6 are anticipated to settle in that half. The
balance of Lacosi Hill will be delivered in 1H16, with
29 contracts worth $9.2 million6 settling then.
SALES
The Company recorded its second year of strong
sales growth, with 829 sales recorded during FY14
an increase of 36% on the 610 sales recorded in
FY13. Seventeen projects across the three eastern
seaboard states contributed to sales this year (FY13:
13 projects). Although Queensland remained the
dominant contributor to sales (with 12 projects
making up 63% of sales) recent acquisitions have
improved geographic diversity with 24% of sales
attributed to three Victorian projects, and two
opportunistic acquisitions in New South Wales
contributing to 13% of sales.
Cascades on Clyde and Park Vista recorded the
highest sales during FY14, while Mt Cotton Village
and Circa performed consistently across the year.
Three short lived projects delivered quick returns
and boosted sales in the fi rst half of FY14. First Light
and Astonbrook, as well as Brookside, which began
selling in FY13, all came close to selling out in the
fi rst half of FY14.
In the second half of the fi nancial year, the release
of the second stage at East Ridge saw a strong
pickup in sales. The townhouse developments of
Orana and Circa Metro were released mid-year, and
sales gained momentum throughout the second half
of FY14. Two boutique acquisitions, Parkview and
Lacosi Hill Estate, were released and were close to
being sold out in the second half of FY14.
While sales in FY14 were stronger than those in
FY13 and demand remained strong throughout the
year, sales in the second half were reduced by lower
levels of completed stock.
Orana at Park Vista – Mango Hill, Brisbane
6. Represents Gross Sales Price inclusive of GST
P.12 VILL A WORLD LIMITED ANNUAL REPORT 2014
OPERATING FINANCIAL REVIEW (CONTINUED)
FY15 SALES OUTLOOK
Market demand for Villa World product is expected
to remain strong in the coming year. Inventory levels
will be lifted by mid FY15 to meet this demand.
Given the timing of delivery, sales will be weighted
to the second half.
Civil construction of the fi nal stages at Park Vista
commenced in 2H14. The release of these lots
throughout FY15 should continue the sales success
at this project. Other projects in and around
Brisbane are expected to remain strong in FY15.
With construction well underway and the opening
of display units imminent at both Orana and Circa
Metro, sales at these townhouse developments are
expected to accelerate. Upon sell out, sales demand
at Circa will fl ow to a newly acquired neighbouring
parcel of land. Reliable sales at Mount Cotton
are expected to continue, with construction of the
balance of the land commencing in the 2H14.
The sales strength experienced at East Ridge in
2H14 is expected to remain with the release of the
balance of the project in early FY15. Demand in this
region is expected to boost sales at the nearby house
and land project Era and the premium land only
estate Waterline when they are released for sale in
early FY15. Following on from the recent success of
Brookside, a house and land offering at Parkside in
Coomera will be released in 1H15.
Brookside – Ormeau, Gold Coast
Augustus – Hervey Bay, Queensland
Inventory levels at Cascades on Clyde will be low,
with production of the balance of the project to occur
late in FY15, however the demand for land product in
the area will be channeled to nearby Cardinia Views
which will be released in 1H15. The Company’s fi rst
acquisition in Greenvale, Melbourne’s northern
growth corridor, will be released for sale in
the 2H15.
The Company’s delivery team is focused on bringing
product to the market, with in excess of 800 lots,
including over 650 houses to be delivered in FY15.
Based on current sales release dates, sales in FY15
will be weighted towards the second half.
SALES AND MARKETING COSTS
Sales and marketing costs were well managed
during the year and represented 6.5% of revenue
in FY14, compared to 7.5% in FY13. The more
buoyant domestic property market reduced the
need to attract sales through more expensive
investment channels.
EMPLOYEE COSTS
In order to meet the growing demand for our
product, the Company increased the number of
full time equivalent employees from 58 in FY13 to
80 in FY14. This increased capacity was within our
operations team. The recognition of staff bonuses
and the increase in headcount saw a 45% increase in
staff costs over the prior period. However, staff costs
remain at 5% of revenue, similar to the prior year
and well within the industry benchmarks.
The full year salary contribution of the new
employees hired in FY14, as well as a small number
of new employees anticipated in FY15 will result in
a 20% increase in staff costs in FY15.
TAX POSITION
The effective tax rate was 15% for FY14, due to the
recognition of the deferred tax asset of $4.21 million
relating to carried forward losses of $14.02.
Carried forward unused tax losses of $34.6 million
remain at 30 June 2014 of which $20.3 million
have been recognised. The remaining tax losses
of $14.3 million will be recognised through Board
assessment and in accordance with accounting
standards in due course.
ASSETS AND NTA
The gross assets have increased to $317 million as
at 30 June 2014, as a result of the implementation of
the successful acquisition strategy.
The NTA at 30 June 2014 was $1.92 per share, prior
to the declaration of the 9 cent dividend.
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.13
OTHER REVENUE AND SHARE OF PROFIT FROM
EQUITY ACCOUNTED INVESTMENTS
Other revenue included $2.8 million from project
management fees and commissions received from
the Eynesbury project. Of this $1.32 million was
associated with the sale of the project to the Hyde
Group. This revenue stream will not continue
in FY15.
The share of profi t recognised from the Eynesbury
joint venture was $3.76 million in FY14. This was
due to a higher recovery rate on the sale of stock on
hand compared to the previously impaired balances,
as well as deferred interest and reimbursements
received, due to the deferred contract arrangement
with the sale to the Hyde Group. It is estimated that
approximately $1 million will be received from the
share of profi t in the Eynesbury Joint Venture during
FY15, mainly due to the recognition of deferred
interest charges for the settlement of tranche two
of the sale to the Hyde Group.
CAPITAL MANAGEMENT
During the year, the Company’s loan facility with
ANZ was increased to $155 million from $110
million. The facility was successfully extended for a
further two years to 1 September 2016.
At 30 June, the cash on hand and headroom7 was
$87 million (30 June 2013: $44.7 million). The
gearing ratio8 was 18.7% compared to 24.4% in FY13.
Strong project related cash fl ows and the capital
raising of $32.2 million enabled this position to
be maintained year on year whilst investing $89.5
million in new projects. The unused capacity in the
facility will enable the continued execution of the
acquisition strategy throughout FY15.
The average cost of debt for the year ending 30
June 2014 was 7.8%. A $70 million fi xed interest
rate swap at 3.5%9 remains in place through to
June 2015. During the second half of FY14 a three
year, $90 million fi xed interest swap at 3.69%9 was
entered into, due to commence in June 2015.
DIVIDENDS
Dividends were recommenced in February 2014, with
an interim dividend of 6 cents per share fully franked
paid in April 2014. A fi nal dividend has been declared
by the Board of 9 cents fully franked, to be paid in
September 2014. Together with the interim dividend,
this represents an annual payout ratio of 74% of
NPAT and is within the stated dividend policy of a
payout ratio of 50% to 75% of NPAT, paid
semi-annually.
ACQUISITION
In FY14, the Company continued to execute on
its acquisition strategy. Since 1 July 2012, 2,16810
lots have been purchased11 over 19 projects.
Signifi cantly, the acquisitions have allowed the
Company to expand its footprint in Victoria,
re-enter the Sydney market and replace strong
selling projects in Queensland.
Although there is ample capacity to fund acquisitions
through up-front payment, some of the acquisitions
have been prudently structured, utilising deferred
payment terms and “capital lite” solutions (payment
out of third party settlement proceeds). 246 lots
representing 11.3% of lots acquired have been
structured through this “capital lite” model.
Eynesbury – Eynesbury, Melbourne
7. Headroom is the unused capacity in the facility.
8. Gearing ratio is (interest bearing liabilities – cash )/ (total assets – cash).
9. Prior to margin and line fees.
10. Includes acquisitions announced post 30 June 2014.
11. Contracted.
P.14 VILL A WORLD LIMITED ANNUAL REPORT 2014
OPERATING FINANCIAL REVIEW (CONTINUED)
Our end product continues to be developed with
changing market needs. Urban design is moving
towards open plan, functional, sizeable homes, on
low maintenance lots, with a strong focus on value
for money. The Company will roll out a new range
of home designs in the next 12 to 18 months which
will suit smaller blocks while creating greater living
spaces through smarter design practices.
KEY RISKS
The key risks for FY15 include sales risk,
development risk, risks associated with the general
warranty claims and provisions and fi nancing risk.
Sales risk is largely impacted by consumer
confi dence. Economic conditions including interest
rates, unemployment and wages directly impact
consumer confi dence. Villa World’s well diversifi ed
portfolio, low gearing position assisted by structured
acquisition deals, and product portfolio minimise
sales risk.
Melbourne CBD
At 30 June 2014, payments due for land acquisitions
comprise $30.4 million in trade creditors and
$38.5 million in capital commitments (“capital lite”
acquisitions). Post year end, a further $58.6 million
in commitments have been entered into.
THE VILLA WORLD STRATEGY
Villa World’s proven business model and solid
fi nancial platform, low gearing and strong operating
cash fl ows, should enable it to continue to create
shareholder value through the implementation of its
strategic objectives.
Operating in the affordable to mid residential
housing market the Company’s strategy is low risk.
The delivery approach is easily scaled in line with
market demand.
The Company will continue to acquire developable
land, with a view to maximising shareholder returns
through capital effi cient deal structures. Anticipated
acquisitions will boost our land bank to fi ve to six
year’s supply across the eastern seaboard.
The sales strategy will continue to focus on the
traditional retail buyer, whilst tailoring product and
process to attract fi rst home buyers and investors.
The Company will work with all existing partners
to enhance the customer experience by introducing
a contemporary approach to on site displays and
educating sales teams (both internal and external)
in order to lift conversion rates and reduce
selling costs.
Roxburgh Park Central – Roxburgh Park, Melbourne
Melbourne CBD
Greenvale, Melbourne
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.15
Financial risk has been mitigated given the debt
facility has been increased during FY14 and is in
place until 1 September 2016. It is anticipated that
all covenants associated with the facility will be
complied with.
GUIDANCE
In FY15 the Company will focus on delivering and
settling a signifi cant level of carried forward sales as
well as restocking through the pull forward of future
stages of existing projects and bringing to market
recently acquired projects. Acquisition opportunities
will continue to be pursued which will build the
portfolio for FY16 and beyond.
A ssuming general consumer confi dence is
maintained, interest rates remain low and fi rst
home buyer grants remain in place, the Company is
targeting in excess of 5% growth in operating profi t
before tax for FY15. Sales and profi ts are expected
to be weighted to the second half of FY15. Further
upside is dependent on market conditions and
product delivery.
The effective tax rate is expected to be similar to that
of FY14, although this is not certain.
The Board maintains its policy of paying out 50% -
75% of NPAT in dividends over the course of the year.
The Company’s portfolio has minimal project based
risk. Development approvals are either in place
prior to acquisitions, or residential use is allowed
and approval risk is mitigated by appropriate due
diligence. The well diversifi ed portfolio combined
with our scalable business model, transparency
on development costs and very experienced
development team minimises production based risk.
Warranty claims and potential litigation are inherent
risks in the development and construction industry.
The Company is currently subject to litigation
involving two matters.
Thornleigh – (refer to note 20 Provisions in the 2014
Financial statements) is a 129 lot townhouse project
located in Thornleigh, New South Wales, which was
completed in 2005. Construction was carried out by
a third party builder. Certain aspects of the recent
Referee’s determination will be challenged in Court
by the Company, and may be challenged by other
parties. There will be cost orders made by the Court
against the Company. Whilst the Company has made
an assessment of the likely outcome of the Court
hearing and provided for these costs, there is some
risk that the fi nancial outcome for the Company may
differ from the amount of the provision.
Silverstone – (refer to the Note 26 Contingencies in
the 2014 Financial statements) is a 27 apartment
complex located in Tweed Heads, New South Wales
which was completed in 2009. This litigation involves
building defects and is in the early stages. The
matter is complex and involves numerous parties.
In the short term, there will be ongoing expenditure
by the Company on legal fees and experts’ costs (for
which provision has been made). In the longer term,
whilst the Company is defending the proceedings
and has joined other parties, there is a risk of an
adverse fi nancial outcome for the Company. The
likelihood and amount of that outcome cannot
presently be reliably estimated and no provision has
been made.
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Circa - Nudgee, Brisbane
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 1 7
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 1 7
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.17
Villa World Limited
Villa World Limited
ABN 38 117 546 326
ABN 38 117 546 326
Annual report - 30 June 2014
Annual report - 30 June 2014
CONTENTS
CONTENTS
Directors' report
Corporate governance statement
Directors' report
Corporate governance statement
Financial statements
Financial statements
Independent auditor's report to the members
Independent auditor's report to the members
Page
Page
18
18
27
27
28
28
63
63
These financial statements are the consolidated financial statements of the consolidated entity consisting of Villa
These financial statements are the consolidated financial statements of the consolidated entity consisting of Villa
World Limited and its subsidiaries. The financial statements are presented in Australian currency.
World Limited and its subsidiaries. The financial statements are presented in Australian currency.
Villa World Limited is a company limited by shares, incorporated and domiciled in Australia.
Villa World Limited is a company limited by shares, incorporated and domiciled in Australia.
Its registered office is:
Its registered office is:
Villa World Limited
Villa World Limited
Level 1 Oracle West,
Level 1 Oracle West,
19 Elizabeth Avenue,
19 Elizabeth Avenue,
Broadbeach QLD 4218
Broadbeach QLD 4218
A description of the nature of the consolidated entity's operations and its principal activities is included in the
A description of the nature of the consolidated entity's operations and its principal activities is included in the
directors' report on page 18, which is not part of these financial statements.
directors' report on page 18, which is not part of these financial statements.
The financial statements were authorised for issue by the Directors on 26 August 2014. The Directors have the
The financial statements were authorised for issue by the Directors on 26 August 2014. The Directors have the
power to amend and reissue the financial statements.
power to amend and reissue the financial statements.
Through the use of the internet, we have ensured that our corporate reporting is timely and complete. All ASX
Through the use of the internet, we have ensured that our corporate reporting is timely and complete. All ASX
announcements, financial reports and other information are available on our website: www.villaworld.com.au
announcements, financial reports and other information are available on our website: www.villaworld.com.au
P.18 VILL A WORLD LIMITED ANNUAL REPORT 2014
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 1 8
DIRECTORS' REPORT
Your Directors present their report on the consolidated
entity (referred to hereafter as the Company) comprising
of Villa World Limited and its subsidiaries and the
Company's interest in associates for the year ended
30 June 2014.
Directors
The Directors of Villa World Limited during the year and
up to the date of this report were:
Mark Jewell BCom CA (SA)
Non-Executive Director since 28 November 2013
Independent Chairman since 28 May 2014
Mark is a senior property executive with more than 25
years' experience in the Australian development industry.
He has held a number of directorships and senior positions
with ASX listed development companies.
Board Committee memberships
–
Member of the Audit and Risk Committee
(since 28 November 2013)
Other directorships (current and recent)
In the past three years Mark has served as an executive
director of Aveo Group Limited (20 July 2011 - 20 August
2012) and a non-executive director of PBD Developments
Limited (21 July 2011 - 3 April 2013).
Craig Treasure BASc (Surveying) (QUT), FDIA
Executive Director 17 February 2012 - 1 August 2012
Chairman and Executive Director 1 August 2012 -
5 October 2012
Chairman and Managing Director 5 October 2012 -
28 May 2014
Chief Executive Officer and Managing Director since
28 May 2014
Craig Treasure has more than 29 years’ experience in
property development, specifically in land, housing and
apartment development along the eastern seaboard of
Australia. Craig has previously held a number of executive
roles and directorships within the property sector.
Board Committee Membership
–
Member of the Audit and Risk Committee
(17 February 2012 – 12 February 2013)
Alexander (Sandy) Beard BCom (UNSW), FCA, AICD
Non-Executive Director since 11 April 2011
Chairman 25 January 2012 - 31 July 2012
Alexander Beard is the Managing Director of CVC Limited
and an experienced financier of growth companies. CVC
has been an active participant in the property sector,
undertaking
from real estate
development to passive financing positions. Alexander has
gained considerable
industry experience through his
investee board roles.
investments ranging
Other directorships (current and recent)
Alexander is currently an Executive Director of CVC
Limited (since 31 August 2000), Director of CVC Property
Managers Limited as Responsible Entity for CVC Property
Fund (since 23 December 2005), Non-Executive Chair of
Cellnet Limited
(since 15 December 2006) and a
Non-Executive Director of Mnemon Group Limited (since 7
June 2007). In the past three years Alexander has also
served as a Non-Executive Director of Amadeus Energy
Limited (14 October 2009 - 29 March 2013).
Board Committee membership
–
Member of the Audit and Risk Committee
(11 April 2011 - 28 May 2014)
Company Secretary
Paulene Henderson B Bus Acc MBA CA
Chief Financial Officer / Company Secretary
Paulene has 26 years’ experience within the accounting
profession. This experience has been gained through
working within the profession, most recently with Ernst
and Young, as well as senior financial positions within RCI
Pacific Pty Ltd and Wyndham Vacation Resorts South
Pacific Ltd as Responsible Entity for the Worldmark South
Pacific Club, both entities being subsidiaries of Wyndham
Worldwide (a Fortune 500 company listed on the New York
Stock exchange).
Appointed Company Secretary 19 November 2012.
Troy Harry BBus
Non-Executive Director from 26 February 2009 - 31
March 2014
involved
in stockbroking and
Troy Harry has been
investment management for 22 years. This
included
experience at several different stockbroking firms over 10
years before establishing his own business, Trojan
Investment Management in 2003. Troy is experienced in
financial analysis, structuring and
in advising and
managing investment companies.
Other directorships (current and recent)
currently holds no other public
company
Troy
directorships. In the past 4 years, Troy has served as
Managing Director of Trojan Equity Limited (resigned 18
March 2013) and as a Director of DMX Corporation Limited
(resigned 27 February 2013).
Board Committee Memberships
–
–
Chairman of the Audit and Risk Committee
(11 February 2013 - 31 March 2014)
Member of the Audit and Risk Committee
(26 February 2009 – 11 February 2013)
Independent Chair of Audit and Risk Committee
Gerald (Gerry) Lambert BCom (Hnrs), ACA, GAICD
Gerald commenced as the Chair of the Audit and Risk
Committee on 18 June 2014. The directors have appointed
Gerry as an independent consultant to perform this
specific compliance role. Gerry is an experienced company
director of both private and listed companies, and is
currently a non-executive director of Boystown and
Cudeco Limited. He was previously an Executive Director
of Villa World from 2000 to 2005 at which time he was CFO
and General Manager.
Directors' interests
Directors' interests
Mark Jewell
Alexander (Sandy) Beard1
Craig Treasure
2014
100,958
-
800,000
1Alexander (Sandy) Beard is the Managing Director of CVC
Limited which owns 15,185,484 shares (2013: 17,593,604
shares).
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.19
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 1 9
D i r e c t o r s ’ R e p o r t
3 0 J u n e 2 0 1 4 ( c o n t i n u e d )
Meetings of directors
Principal activities
The number of meetings of Villa World Limited’s Board of
Directors and of each Board Committee held during the
year ended 30 June 2014, including the number of
meetings attended by each Director are:
During the year the principal activities of the Company
continued to be the development and sale of residential
land, and the development, construction and sale of house
and land packages.
Mark Jewell
Craig Treasure
Alexander (Sandy) Beard
Troy Harry
Board
meetings
B
A
8
8
15
15
15
15
13
13
Audit and Risk
committee
A
2
2
2
2
B
2
3
2
2
A = Number of meetings attended
B = Number of meetings held during the time the Director
held office or was a member of the committee during the
period
Review of operations and consolidated results
Company Financial Summary
Revenue1
Expenses
Finance costs
Profit before income tax
Income tax expense
Profit for the period
Profit is attributable to:
Owners of Villa World Limited
Consolidated
30-Jun-14
$'000
236,656
(206,462)
(7,625)
22,569
(3,503)
19,066
30-Jun-13
$'000
154,038
(159,948)
(7,986)
(13,896)
403
(13,493)
19,066
(13,493)
1Includes revenue from land and development, residential building and construction contracts, other income and share of profit/(loss) from
associates. Refer to the Consolidated Income Statement.
A review of operations for the financial year and the results of those operations are set out in the Operating and Financial
Review.
Dividends
The Board recommenced the payment of dividends,
declaring an interim dividend of 6.0 cents per share fully
franked on 13 February 2014. Payment was made to
shareholders on 2 April 2014.
Matters subsequent to the end of the financial year
Final Dividend
On 26 August 2014 the Board declared a fully franked final
dividend of 9.0 cents per share. The ex-dividend date is
1 September 2014 and the record date for this dividend is
3 September 2014. Payment will be made on 30 September
2014.
As at 30 June 2014, an amount of $16.7 million is held as
franking credits in the Company.
Investment in the Eynesbury Joint Venture
As previously disclosed the Company has entered into
unconditional contracts for the sale of the Eynesbury
project (in which the Company holds a 50% interest). On 27
June 2014 the first tranche (comprising part of the land
and the golf course business) was completed at a sale
price of $30.0 million plus GST.
As at 30 June 2014 the equity accounted investment in the
Eynesbury Joint Venture was $18.0 million. On 7 July 2014
$9.0 million was repaid to each Joint Venture partner, with
the carrying value of the investment reducing to $9.0
million.
Acquisition - Victoria
On 14 July 2014, the Company announced that it had
entered into a Put & Call Option in relation to a site located
at Greenvale in the northern suburbs of Melbourne, well
serviced by key infrastructure and amenities.
The land owner is required to deliver completed vacant
lots, for the Company to construct dwellings and sell
house and land packages. The transaction totals $26.2
million (including GST) and is to be paid progressively to
the land owner from the settlement proceeds of the house
and land sales.
The site is expected to yield approximately 131 residential
lots, comprising traditional Villa World housing designs on
a variety of lot sizes.
Remuneration report
The Directors are pleased to present the Remuneration
Report for FY14 which details compensation arrangements
in place for the Company's key management personnel as
defined in AASB124 “Related Party Disclosures” (KMPs).
This report
the
requirements of the Corporations Act 2001 (the Act) and its
regulations. This information has been audited as required
by section 308(3C) of the Act.
in accordance with
is presented
P.20 VILL A WORLD LIMITED ANNUAL REPORT 2014
Directors’ Report
30 June 2014 (continued)
Remuneration Report (continued)
Directors and key management personnel
disclosed in this report
The KMPs comprise the executive and non-executive
Directors of Villa World Limited and the Company’s senior
executives being:
Mark Jewell1
Independent Chairman
Alexander (Sandy) Beard Non-executive Director
Troy Harry2
Non-executive Director
Chief Executive Officer and
Managing Director
Chief Operating Officer
Chief Financial Officer
Craig Treasure3
Scott Payten
Paulene Henderson
1Mark Jewell was appointed non-executive director on
28 November 2013 and Chairman on 28 May 2014.
2Troy Harry resigned 31 March 2014.
3Craig Treasure resigned as Chairman on 28 May 2014.
Remuneration policy and strategy
is
responsible
The Board
the
remuneration for the directors and other KMPs. The
Board’s objective is to ensure that remuneration policies
and structures are fair and competitive and aligned with
the long term interests of the Company.
for determining
The Company’s remuneration framework is structured to:
–
–
Attract and motivate high quality talent to deliver
superior long term returns for shareholders.
Align shareholders’ and employees’ interests and
for shareholders by ensuring a
create value
reasonable
employees’
remuneration is based on growth in total shareholder
returns (“TSR”).
– Be fair and consistent.
– Manage total rewards with emphasis on the “at risk”
proportion
senior
of
element as a motivator for senior executives.
Remuneration strategy for non-executive directors
Fees and payments to non-executive directors reflect the
demands which are made on and the responsibilities of the
directors. Non-executive directors receive a fixed fee for
their services. Fees are reviewed annually by the Board,
taking
into account amounts paid to non-executive
directors with comparable roles in the external market.
Fees are determined within an aggregate directors’ fee
pool limit which is periodically recommended for approval
by shareholders. Shareholders have approved maximum
aggregate Board and committee
to
non-executive directors of $600,000.
fees payable
The total of non-executive directors’ fees paid for the year
ended 30 June 2014 was $188,084 (30 June 2013:
$159,140).
Non-executive directors’ remuneration is inclusive of
additional fees paid to directors who sit on committees
with an additional fee payable for chairing committees.
Non-executive remuneration
is set by reference to
comparable entities listed on the Australian Securities
Exchange.
Service Agreements
On appointment to the Board all non-executive directors
enter into a letter of appointment with the Company. The
letter of appointment sets out the term of the appointment,
service to be provided, remuneration and corporate
policies and codes of conduct to be complied with.
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 2 0
Remuneration strategy for executive directors
and other KMPs
is to ensure reward for performance
The objective of the Company’s executive remuneration
framework
is
competitive and appropriate for the results delivered. The
framework provides a mix of fixed and variable pay
including appropriate incentives.
Executive directors do not participate in discussions
relating to their own remuneration. Remuneration for the
Chief Executive Officer and Managing Director and KMPs
includes a combination of fixed remuneration and key
performance related incentives that enable the Company
to attract and retain a suitable calibre of personnel.
The framework aligns executive rewards with the creation
of value for shareholders. Performance based rewards are
linked to the achievement of individual performance
criteria and may be adjusted at the discretion of the Board.
The remuneration package for the Chief Executive Officer
and Managing Director and KMPs is determined by the
Board and assessed against the broader market.
Components of executive remuneration
Total fixed remuneration
Total Fixed Remuneration (“TFR”) is a market related base
salary including superannuation contributions. TFR is
determined by reference to the TFRs offered by the
average to top quarter of comparator industry employers
and is subject to annual benchmarking. TFR is reviewed
annually and upon change of role or responsibility.
Short-term incentives
term
incentive
target short
KMPs have a
(“STI”)
opportunity depending on the accountabilities of the role
and impact on the Company’s performance. Actual STI
awards can range from 0-40% of TFR. These are awarded
based on the successful achievement of pre-determined
Board approved Key Performance Indicators (“KPIs”). A
sliding scale element is incorporated into relevant KPIs to
motivate the KMPs to outperform base targets set.
However, the Board has the discretion to pay over and
above these amounts.
Each year the Board considers the appropriate targets and
KPIs to link to the STI plan and the level of cash
disbursement if targets are met for the KMPs. This may
include setting any maximum payout under the STI plan
and minimum levels of performance to trigger payment of
STI.
The KPIs are set by reference to four criteria, which are
shown below:
–
Financial targets based on the achievement of Board
approved budgets, forecasts and compliance with bank
target ratios.
– Business growth targets including the development and
implementation of long-term strategic planning.
People and process improvements across the Company.
–
– Maintenance and enhancement of work health and
safety, corporate compliance and product quality
platforms within the Company.
For the CEO and Managing Director, the financial and
business growth targets account for 40% of his STI for
FY14.For the FY13 and FY14 years, the KPIs were linked to
STI plans and were based on very similar criteria.
Directors’ Report
30 June 2014 (continued)
Remuneration Report (continued)
Long-term incentives
The Company operates long-term incentives ("LTIs") in the
form of the Villa World Limited Option Plan, approved by
shareholders at the Company’s AGM on 30 October 2013.
For options that have been issued to date, the options vest
at the completion of three years’ service from the grant
date. Under the terms of the options granted to date, if the
participating employee leaves the Company before the
vesting date, the options are cancelled, although the Board
may waive this restriction at its discretion.
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.21
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 2 1
The chart below shows the mix between TFR, STI and LTI
for the executive KMPs for the financial years ending 30
June 2014 and 2013.
Total remuneration package
components
TFR
2014 2013
STI - at risk
LTI
2014 2013 2014 2013
52% 100%
- 100%
21%
-
- 27%
-
-
70% 77%
75% 83%
18% 23% 12%
6%
19% 17%
-
-
-
-
Executive Directors
Craig Treasure
John Potter
Other executive KMPs
Scott Payten
Paulene Henderson
Termination Benefits
than statutory entitlements,
Other
there are no
termination benefits applicable to the current executive
KMPs.
Employment Agreements
Remuneration and other terms of employment for the executive KMPs are formalised in employment agreements. The key
provisions of the agreements for the year ended 30 June 2014 relating to remuneration are set out in the table below:
Base fee
inclusive of
superannuation
Term of
agreement
Notice period Review period
Anticipated annual
cash bonus (%)1
Chief Executive Officer and
Managing Director
Craig Treasure
Other executive KMPs
Scott Payten
Paulene Henderson
$500,000
Rolling
6 months
Annual
$400,000
$250,000
Rolling
Rolling
6 months
3 months
Annual
Annual
40%
25%
25%
1Anticipated cash bonus as a proportion of base salary depending on corporate and individual performance
Consequences of performance on shareholder wealth
The Company ties incentives to share price growth indirectly, and other measureable KPIs that drive results and shareholder
value creation. In considering the Company's performance and benefits for shareholder wealth the Board also has regard to the
following criteria in respect of the current financial year and the previous four financial years.
Performance KPI
Revenue
Debt
Gearing
NTA per security (cents)
Dividends (relating to the year)
Interim dividend (cents)
Final dividend (cents)
Earnings per share (cents)
Share price at 30 June
FY10
$m
$272.2
$93.1
24.3%
174.3
-
5.0
24.6
$0.96
FY11
$m
$110.8
$62.4
23.5%
178.1
-
-
11.4
$0.90
FY12
$m
$146.5
$74.2
27.6%
201.0
-
-
10.1
$0.79
FY13
$m
$169.4
$70.0
24.4%
185.0
-
-
(18.2)
$1.13
FY14
$m
$229.5
$69.1
18.7%
192.0
6.0
9.0
21.5
$2.02
The overall level of KMPs compensation takes into account the performance of the Company over a number of years.
Voting and comments made at the company's 2013 Annual General Meeting
The Company received 92.9% of “yes” votes on its remuneration report for the 2013 financial year. The Company did not receive
any specific feedback at the AGM or throughout the year on its remuneration practices.
P.22 VILL A WORLD LIMITED ANNUAL REPORT 2014
Directors’ Report
30 June 2014 (continued)
Remuneration Report (continued)
Details of remuneration
Details of the remuneration of the directors and the KMPs are set out below:
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 2 2
2014
Name
Short-term employee
benefits
Cash
salary and
fees
$
Cash
bonus
$
Post-
employment
benefits
Super-
annuation
$
Long-
term
benefits
Long
service
leave4
$
Share based
payments
Options5
Total
$
$
-
-
-
-
-
-
-
-
4,270
-
4,995
9,265
46,159
78,660
54,000
178,819
Non-executive Directors
Mark Jewell 1
Alexander Beard 2
Troy Harry 3
Sub-total non-executive directors
Chief Executive Officer and Managing Director
Craig Treasure
Other KMPs
Scott Payten
Paulene Henderson
Sub-total other KMPs
Total
1 Mark Jewell was appointed non-executive Director on 28 November 2013 and Independent Chairman on 28 May 2014.
2 Alexander Beard is the Managing Director of CVC Limited and his director's fees are paid to CVC Managers Pty Ltd.
3 Troy Harry resigned on 31 March 2014.
4 Long service leave represents the amount expensed by the Company for the period.
5 The amount shown in the share-based payments options column does not represent an amount paid to the individual but rather the amount
expensed by the Company. Refer Note 29 (b) - Expenses arising from Share-based payment transactions.
504,000
25,000
8,333
309,323
14,911 133,333 1,544,747
14,911 133,333 1,732,831
72,500
45,313
1,096,675 246,503
1,275,494 246,503
50,429
78,660
58,995
188,084
17,775
17,775
53,325
62,590
382,225
232,225
2,734 100,000
6,500
5,677
731,424
482,225
128,690
-
-
-
-
17,775
2013
Name
Non-executive Directors
Alexander Beard1
Troy Harry
Richard Anderson2
Sub-total non-executive directors
Executive Directors
Craig Treasure3
John Potter4
Subtotal executive directors
Other KMPs
Scott Payten
Paulene Henderson
Subtotal other KMPs
Total
Short-term employee
benefits
Post-
employment
benefits
Cash
salary and
fees
$
Cash
bonus
Super-
annuation
$
$
Long-
term
benefits
Long
service
leave5
$
Share based
payments
Options6
Total
$
$
68,670
63,000
20,000
151,670
353,295
157,104
510,399
-
-
-
-
-
-
-
100,000
383,530
221,652
45,000
605,182 145,000
1,267,251 145,000
-
5,670
1,800
7,470
16,305
5,127
21,432
16,470
16,470
32,940
61,842
-
-
-
-
1,040
-
1,040
68,670
-
68,670
-
-
21,800
- 159,140
- 370,640
- 162,231
- 532,871
1,726
18,259 (117,311) 400,948
(23,462) 261,386
19,985 (140,773) 662,334
21,025 (140,773) 1,354,345
1. Alexander Beard is the Managing Director of CVC Limited and his director's fees are paid to CVC Managers Pty Ltd.
2. Richard Anderson resigned on 25 October 2012.
3. Craig Treasure was appointed Executive Chairman on 1 August 2012, prior to that date he was a non-executive director.
4. John Potter resigned on 5 October 2012.
5. In the prior period Long service leave represented the total liability to the Company and resulted in an overstatement of $36.4k. The amounts
for S Payten and P Henderson have been correctly restated to reflect the movement for the prior period.
6. The cash settled share-based bonus for Scott Payten and Paulene Henderson lapsed without payment on 1 November 2012.
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.23
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 2 3
Directors’ Report
30 June 2014 (continued)
Remuneration Report (continued)
Share-based payments
(a) Villa World Limited Option Plan
The grant of options over ordinary shares in Villa World Limited to the Chief Executive Officer and Managing Director, Craig
Treasure, was approved by shareholders at a general meeting on 22 July 2013. The issue of options is designed to provide long
term incentives for the Chief Executive Officer and Managing Director to deliver long term returns.
The Board also approved the issue of options over ordinary shares in Villa World Limited to other KMPs and staff. As at 30 June
2014, 4.0 million options have been issued in total to KMPs. Under the terms of the options granted to date, the options will only
vest if the participating KMPs continue their respective service agreements with the Company for three years from the grant
date.
The assessed fair value of the options at the grant date of 26 July 2013 is 10 cents per option. The fair value at grant date is
independently determined using a Binomial Option Price Valuation Model that takes into account the exercise price, the term of
the option, the impact of dilution, 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 include:
options are granted for no consideration and vested options are exercisable for a period of six months after vesting
exercise price: $1.25
(i)
(ii)
(iii) grant date: 26 July 2013
(iv) expiry date: 26 January 2017
(v)
share price at grant date: $1.25
(vi) expected price volatility of shares: 25%
(vii) expected dividend yield: 9%
(viii) risk free rate: 2.57%
The volatility assumption is representative of the level of uncertainty expected in the movements of the share price over the life
of the option. The historic volatility of the market price of the Company’s share and the mean reversion tendency of volatilities
are the two factors which are assessed when determining the expected volatility.
Set out below is a summary of the terms and conditions of each grant of options to KMPs under the Option Plan which will effect
remuneration in the future reporting period:
Craig Treasure
Scott Payten
Paulene Henderson Chief Financial Officer
Chief Executive Officer
and Managing Director
26/07/2013 26/01/2017
Chief Operating Officer 26/07/2013 26/01/2017
26/07/2013 26/01/2017
Grant Date Expiry Date
Exercise
Price
$1.25
$1.25
$1.25
Granted as
compensation
Value of
options at grant
date1
Vesting date
3,000,000
750,000
250,000
$300,000 26/07/2016
$75,000 26/07/2016
$25,000 26/07/2016
1 The value of options at grant date is 10 cents per option and is calculated in accordance with AASB2 Share-based Payments.
(b) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit
expense were as follows:
Options issued to KMPs
Fair value of cash settled share based payments for KMPs
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
133
-
133
-
(141)
(141)
P.24 VILL A WORLD LIMITED ANNUAL REPORT 2014
Directors’ Report
30 June 2014 (continued)
Remuneration Report (continued)
Shareholdings of KMPs
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 2 4
The numbers of shares in the Company held during the financial year by each KMP, including their closely related parties, are
set out below. There were no shares granted during the reporting period as compensation.
30 June 14
Name
Directors
Mark Jewell
Craig Treasure
Sandy Beard1
Troy Harry2
Other KMPs
Scott Payten
Paulene Henderson
Balance at the start of
the year
Granted during the
year
Other changes during
the year
Balance at the end of
the year
Direct
holding
Indirect
holding
Direct
Indirect Direct
holding holding holding
Indirect
holding
Direct
holding
Indirect
holding
-
200,000
-
-
-
500,000
-
1,100,000
760
-
-
50,050
-
-
-
-
-
-
-
-
-
-
-
-
-
50,000
-
-
100,958
50,000
-
(1,100,000)
-
250,000
-
-
100,958
550,000
-
-
4,766
-
-
15,766
5,526
-
-
65,816
1 Alexander (Sandy) Beard is the Managing Director of CVC Limited, which owns 15,185,484 shares (June 2013: 17,593,604 shares) in Villa World
Limited.
2 Troy Harry resigned on 31 March 2014.
30 June 13
Name
Directors
Craig Treasure
Alexander Beard1
Troy Harry
John Potter2
Richard Anderson3
Other KMPs
Scott Payten
Paulene Henderson
Balance at the start of
the year
Granted during the
year
Other changes during
the year
Balance at the end of
the year
Direct
holding
Indirect
holding
Direct
holding
Indirect
holding
Direct
holding
Indirect
holding
Direct
holding
Indirect
holding
-
-
-
-
-
760
-
2,000
-
1,100,000
2,254,738
51,091
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
498,000
200,000
-
-
-
-
- (2,254,738)
-
-
200,000
-
-
-
-
500,000
-
1,100,000
-
51,091
-
-
-
50,050
760
-
-
50,050
1 Alexander (Sandy) Beard is the Managing Director of CVC Limited, which owns 17,593,604 shares (June 2012: 15,162,358 shares) in Villa World
Ltd.
2 John Potter resigned on 5 October 2012.
3 Richard Anderson resigned on 25 October 2012.
Environmental regulation
The Company is subject to environmental regulation in
respect of its land development and construction activities
as set out below:
Indemnification and Insurance of officers and
auditors
Indemnification
(i) Land development approvals
and
Councils
Approvals are required for land development from
various Councils and other government agencies.
Those
assess
environmental factors when issuing approvals and,
where applicable, will impose relevant conditions. To
the best of the Directors’ knowledge, all activities have
been undertaken in compliance with the requirements
of all development approvals.
agencies will
During the year, the Company paid premiums for policies
insuring directors and officers of the Company and its
related bodies corporate against certain liabilities (subject
to certain exclusions and to the extent permitted by law).
The Directors have not included details of the nature of the
liabilities covered or the amount of the premium paid in
respect of the directors’ and officers’ insurance policies as
(in accordance with normal practice) such disclosure is
prohibited under the terms of the policies.
(ii) Dwelling construction/building approvals
Insurance premiums
is subject
Building approvals are obtained for the construction of
dwellings from the relevant Councils. The construction
of dwellings
to strict requirements
regarding environmental impacts including noise, silt,
dust, run off and drainage. To the best of the Directors’
knowledge, all construction activities have been
undertaken in compliance with the requirements of
building approvals, Council requirements and other
applicable laws.
The Company’s constitution provides
it must
indemnify, on a full indemnity basis and to the full extent
permitted by law, officers of the Company and its related
bodies corporate for all losses and liabilities incurred by
the person in their position as an officer, unless covered by
insurance.
that
Directors’ Report
30 June 2014 (continued)
Insurance premiums (continued)
The Company has entered into Deeds of Indemnity in
favour of each of the directors referred to in this report
who held office during the year and the Company
Secretary. Additionally, separate deeds of indemnity have
been entered into with other persons who have been
requested to act as directors or officers of the Company or
its related bodies corporate. The indemnities in these
deeds operate to the full extent permitted by law and are
not subject to a monetary limit. The Company is not aware
of any liability having arisen and no claims have been made
during or since the financial year under the Deeds of
Indemnity.
The Company has not otherwise, during or since the end of
the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an officer or auditor of
the Company or of any related body corporate against a
liability incurred as such an officer or auditor.
Indemnity of auditors
Details of the amounts paid to the auditors of the
Company, Ernst & Young for audit and non-audit services
provided during the year are set out in note 7 of the
financial statements. To the extent permitted by law, the
Company has agreed to indemnify its auditors, Ernst &
Young, as part of the terms of its audit engagement
agreement against claims by third parties arising from the
audit (for an unspecified amount). No payment has been
made to indemnify Ernst & Young during or since the
financial year.
Non-audit services
Ernst & Young was appointed lead auditor at the AGM on
the 30 October 2013. PwC was the lead auditor for the
period ended 30 June 2013. Details of the amounts paid or
payable to the auditor (Ernst & Young) for audit and
non-audit services provided during the year are set out in
note 7.
The Board has considered the position and, in accordance
with the advice received from the Audit and Risk
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.25
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 2 5
Committee, is satisfied that the provision of non-audit
services is compatible with the general standard of
independence for auditors imposed by the Corporations
Act 2001. The Directors are satisfied that the auditor's
provision of non-audit services did not compromise the
Act's independence requirements because none of the
services undermine the general principles relating to
auditor independence as set out in APES110 Code of Ethics
for Professional Accountants.
The Audit and Risk Committee reviewed all non-audit
services to ensure they did not impact the auditor's
impartiality and objectivity.
Auditor's independence declaration
A copy of the auditor's independence declaration as
required under section 307C of the Corporations Act 2001
is set out on page 26.
Rounding of amounts
issued by
The Company is of a kind referred to in Class Order
98/100,
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,
to the nearest dollar.
This report is made in accordance with a resolution of
Director's.
Craig Treasure
Chief Executive Officer and Managing Director
Gold Coast
26 August 2014
P.26 VILL A WORLD LIMITED ANNUAL REPORT 2014
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Auditor’s Independence Declaration to the Directors of Villa World
Limited
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
In relation to our audit of the financial report of Villa World Limited for the financial year ended 30
June 2014, to the best of my knowledge and belief, there have been no contraventions of the auditor
independence requirements of the Corporations Act 2001 or any applicable code of professional
Auditor’s Independence Declaration to the Directors of Villa World
conduct.
Limited
In relation to our audit of the financial report of Villa World Limited for the financial year ended 30
June 2014, to the best of my knowledge and belief, there have been no contraventions of the auditor
independence requirements of the Corporations Act 2001 or any applicable code of professional
conduct.
Ernst & Young
Ernst & Young
Ric Roach
Partner
26 August 2014
Ric Roach
Partner
26 August 2014
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 2 7
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.27
Villa World Limited
Corporate governance statement
30 June 2014
CORPORATE GOVERNANCE STATEMENT
The Board believes that genuine commitment to good corporate governance is essential to the performance and sustainability
of the Company’s business.
The Board has given due consideration to the ASX Corporate Governance Council’s ‘Corporate Governance Principles and
Recommendations’, which offer a framework for good corporate governance. Copies of the Company’s key governance policies
are available in the Corporate Governance section of its website at http://www.villaworld.com.au/PDF/Corporate Governance
Statement.pdf
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 2 8
P.28 VILL A WORLD LIMITED ANNUAL REPORT 2014
Villa World Limited
ABN 38 117 546 326
Annual report - 30 June 2014
Contents
Financial statements
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors' declaration
Independent auditor's report to the members
Page
29
29
30
31
32
33
62
63
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.29
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 2 9
Consolidated income statement
For the year ended 30 June 2014
Notes
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
Revenue from continuing operations
Revenue from land development, residential building and construction contracts
Cost of land development, residential building and construction contracts
Other income
Expenses, excluding finance costs
Impairment of investment in equity accounted investment
Net impairment of development land
Share of profit/(loss) from associates
Finance costs
Profit/(Loss) before income tax
Income tax expense
Profit/(Loss) for the period
Profit/(Loss) is attributable to:
Owners of Villa World Limited
Earnings per share for profit/(loss) attributable to the ordinary equity holders
of the Company:
Basic earnings per share
Diluted earnings per share
3
3
4
5
4
5
11
6
8
229,450
(172,628)
56,822
169,396
(122,401)
46,995
3,439
(33,942)
-
108
3,767
(7,625)
22,569
(3,503)
19,066
2,077
(26,771)
(627)
(10,149)
(17,435)
(7,986)
(13,896)
403
(13,493)
19,066
(13,493)
Cents
Cents
21.8
21.5
(18.2)
(18.2)
The above consolidated income statement should be read in conjunction with the accompanying notes.
Consolidated statement of comprehensive income
For the year ended 30 June 2014
Profit/(Loss) for the period
Other comprehensive income
Items that may be reclassified to profit or loss
Changes in the fair value of cash flow hedges
Income tax relating to these items
Other comprehensive income for the period, net of tax
Total comprehensive income for the period
Total comprehensive income for the period is attributable to:
Equity holders of the company
Total comprehensive income for the period attributable to owners of Villa World
Limited arises from:
Continuing operations
Notes
22(a)
22(a)
Consolidated
30-Jun-14
$'000
19,066
30-Jun-13
$'000
(13,493)
(1,080)
324
(756)
18,310
(195)
59
(136)
(13,629)
18,310
(13,629)
18,310
(13,629)
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
P.30 VILL A WORLD LIMITED ANNUAL REPORT 2014
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 3 0
Consolidated balance sheet
As at 30 June 2014
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Inventories
Property, plant and equipment
Investments accounted for using the equity method
Deferred tax assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Non-current liabilities
Trade and other payables
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Other reserves
Retained earnings/(Accumulated Losses)
Capital and reserves attributable to owners of Villa World Limited
Notes
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
9
10
12
13
12
14
11
16
18
20
18
19
20
12,118
16,899
123,660
1,978
154,655
134,563
1,125
17,968
8,958
162,614
317,269
54,856
10,963
65,819
1,520
69,086
598
71,204
137,023
180,246
15,350
27,375
85,907
1,246
129,878
83,365
961
13,701
11,723
109,750
239,628
25,575
6,945
32,520
480
70,025
471
70,976
103,496
136,132
21
22(a)
413,375
164,774
(397,903)
180,246
382,125
(437)
(245,556)
136,132
Total equity
180,246
136,132
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.31
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 3 1
Consolidated statement of changes in equity
For the year ended 30 June 2014
Attributable to owners of
Villa World Limited
Consolidated entity
Notes
Contributed
equity
$'000
Cash flow
hedges
$'000
Other
Reserves
$'000
Profit
Reserve
$'000
Retained
earnings
$'000
Total
$'000
Balance at 1 July 2012
Loss for the year as reported in the
2013 financial statements
Movement in hedge reserve (net of
tax)
Total comprehensive income for the
period
Share buy-back transactions
Balance at 30 June 2013
21
383,592
(521)
220
-
(232,063)
151,228
-
-
-
(1,467)
382,125
-
(136)
(136)
-
(657)
-
-
-
-
220
-
-
-
-
-
(13,493)
(13,493)
-
(136)
(13,493)
-
(245,556)
(13,629)
(1,467)
136,132
Balance at 1 July 2013
Profit for the year as reported in the
2014 financial statements
Movement in hedge reserve (net of
tax)
Total comprehensive income for the
period
Securities issued from capital raising,
net of transaction costs and tax
Securities issued under the share
purchase plan, net of transaction
costs and tax
Dividends provided for or paid
Transfer opening share based
payments to retained earnings
Expenses related to share based
payments
Transfer opening retained profit to
profit reserve
Transfer current year profit to profit
reserve
Balance at 30 June 2014
21
21
23
29
22(a)
22(a)
382,125
(657)
220
-
(245,556)
136,132
-
-
-
-
(756)
(756)
26,292
4,958
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(5,620)
19,066
19,066
-
(756)
19,066
18,310
-
-
-
26,292
4,958
(5,620)
(220)
174
-
-
220
-
-
174
-
150,342
(150,342)
-
-
31,250
413,375
-
-
(1,413)
-
(46)
174
21,291
166,013
166,013
(21,291)
(171,413)
(397,903)
-
25,804
180,246
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
P.32 VILL A WORLD LIMITED ANNUAL REPORT 2014
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 3 2
Consolidated statement of cash flows
For the year ended 30 June 2014
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)
Payments to suppliers and employees (inclusive of goods and services tax)
Payments for land acquired
Interest received
Interest paid
Borrowing costs
Net cash (outflow)/inflow from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Loans to related parties
Repayments of loans by related parties
Dividends received
Net cash (outflow) from investing activities
Cash flows from financing activities
Proceeds from borrowings
Payments for shares bought back
Repayment of borrowings
Proceeds from issue of share capital
Transactions costs of issue of shares
Dividends paid to company's shareholders
Net cash (outflow) / inflow from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at end of period
Reconciliation to cash at the end of the year:
Cash and cash equivalents
Cash and cash equivalents at the end of the year:
Notes
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
242,919
(175,202)
67,717
(89,505)
543
(4,936)
(120)
(26,301)
(613)
(500)
-
-
(1,113)
24,960
-
(26,000)
32,200
(1,358)
(5,620)
24,182
(3,232)
15,350
12,118
12,118
12,118
163,483
(116,742)
46,741
(25,112)
593
(4,356)
(700)
17,166
(323)
-
(580)
860
(43)
5,874
(1,467)
(9,000)
-
-
-
(4,593)
12,530
2,820
15,350
15,350
15,350
31
11
9
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 3 3
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.33
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 3 3
Notes to the consolidated financial statements
30 June 2014
Notes to the consolidated financial statements
30 June 2014
Contents of the notes to the consolidated financial statements
Contents of the notes to the consolidated financial statements
1
2
3
1
4
2
5
3
6
4
7
5
8
6
9
7
10
8
11
9
12
10
13
11
14
12
15
13
16
14
17
15
18
16
19
17
20
18
21
19
22
20
23
21
24
22
25
23
26
24
27
25
28
26
29
27
30
28
31
29
32
30
31
32
Summary of significant accounting policies
Critical accounting estimates and judgments
Earnings per share
Summary of significant accounting policies
Revenue
Critical accounting estimates and judgments
Expenses
Earnings per share
Finance costs
Revenue
Remuneration of auditors
Expenses
Income tax expense
Finance costs
Cash and cash equivalents
Remuneration of auditors
Trade and other receivables
Income tax expense
Investments accounted for using equity
Cash and cash equivalents
Inventories
Trade and other receivables
Other assets
Investments accounted for using equity
Property, plant and equipment
Inventories
Parent entity financial information
Other assets
Deferred tax assets
Property, plant and equipment
Deferred tax liabilities
Parent entity financial information
Trade and other payables
Deferred tax assets
Borrowings
Deferred tax liabilities
Provisions
Trade and other payables
Contributed equity
Borrowings
Other reserves and accumulated losses
Provisions
Dividends
Contributed equity
Financial risk management
Other reserves and accumulated losses
Key management personnel (KMPs) disclosures
Dividends
Contingencies
Financial risk management
Commitments
Key management personnel (KMPs) disclosures
Subsidiaries
Contingencies
Share-based payments
Commitments
Events occurring after the reporting period
Subsidiaries
Reconciliation of profit after income tax to net cash inflow from operating activities
Share-based payments
Segment information
Events occurring after the reporting period
Reconciliation of profit after income tax to net cash inflow from operating activities
Segment information
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P.34 VILL A WORLD LIMITED ANNUAL REPORT 2014
Notes to the consolidated financial statements
30 June 2014 (continued)
1 Summary of significant accounting policies
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 3 4
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These
policies have been consistently applied to all the periods presented, unless otherwise stated. The financial statements are for
the consolidated entity consisting of Villa World Limited and its subsidiaries.
(a) Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. Villa World Limited is a
for-profit entity for the purpose of preparing the financial statements.
(i) Compliance with IFRS
The consolidated financial statements of Villa World Limited also comply with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB).
(ii) Historical cost convention
These financial statements have been prepared under the historical cost convention, financial assets and liabilities (including
derivative instruments) at fair value through profit or loss.
(iii) Critical accounting estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management
to exercise its judgment in the process of applying the Company's accounting policies. The areas involving a higher degree of
judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in
note 2. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised and in any future periods affected.
(iv) Functional and presentation currency
The consolidated financial statements are presented in Australian dollars, which is the functional and presentation currency of
Villa World Limited.
(b) Parent entity financial information
The financial information for the Parent entity, Villa World Limited, disclosed in note 15 has been prepared on the same basis as
the consolidated financial statements, except as set out below.
(i) Investments in subsidiaries, associates and joint venture entities
Investments in controlled entities are carried in the Company’s financial statements at the lower of cost or recoverable amount.
Dividends received from associates are recognised in the parent entity’s profit or loss when its right to receive the dividend is
established.
(ii) Tax consolidation legislation
Villa World Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation.
Refer to note 1(h).
(c) New accounting standards and interpretations
New standards and amendments to standards that are mandatory for the first time for the financial year beginning 1 July 2013
have been adopted by the Company. The Company has assessed the impact of these new standards and interpretations and has
outlined their expected impacts in the following table:
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.35
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 3 5
Notes to the consolidated financial statements
30 June 2014 (continued)
Standard
AASB 10 Consolidated
Financial Statements
Nature Of Change
AASB 10 establishes a new control model that
applies to all entities. It replaces parts of AASB 127
Consolidated and Separate Financial Statements.
AASB 11 Joint Arrangements AASB 11 uses the principles of control in AASB10 to
define joint control and removes the option to
account
jointly controlled entities using
proportionate consolidation. Accounting for a joint
arrangement is dependent on the nature of the rights
and obligations arising from the arrangement.
AASB 12 includes all disclosures relating to an
entity's interests in subsidiaries, joint arrangements,
associates and structured entities.
AASB 12 Disclosure of
Interests in Other Entities
for
of
Impact On The Company
The adoption of AASB 10 had no
effect on the financial position or
performance of the Company.
The adoption of AASB 11 had no
effect on the financial position or
the Company.
performance
where
Additional
disclosures
required, are provided
the
individual notes.
The adoption of AASB 12 had no
impact on the financial
financial
Company.
of
statements
where
Additional
disclosures
required, are provided
the
individual notes.
the
in
in
AASB 13 explains how to measure fair value and
aims to enhance fair value disclosures.
AASB 13 Fair Value
Measurement and AASB
2011-8 Amendments to
Australian Accounting
Standards arising from AASB
13
the
The adoption of AASB 13 had no
financial
material effect on
position or performance of
the
Company. Additional disclosures
where required, are provided in the
individual notes.
Certain new accounting standards and interpretations
have been published that are not mandatory for 30 June
2014 reporting periods and have not yet been applied in
the financial statements. The Company's assessment of
the impact of these new standards and interpretations is
set out below.
(i) AASB9, AASB2009-11, AASB2010-7
AASB 9 Financial Instruments includes requirements for
the classification, measurement and derecognition of
financial assets. These requirements improve and simplify
the approach for classification and measurement of
financial assets compared with the requirements of AASB
139. The standard is not applicable until 1 January 2018
but is available for early adoption. While the Company does
not expect the new standard to have a significant impact on
its financial position, it has yet to perform a detailed
analysis of the new guidance.
(ii) IFRS 15 Revenue from Contracts with Customers
IFRS 15 Revenue from Contracts and Customers
establishes principles for reporting useful information to
users of financial statements about the nature, amount,
timing and uncertainty of revenue and cash flows arising
from an entity's contracts with customers. The standard is
not applicable until 1 January 2018 but is available for
early adoption. While the Company does not expect the
new standard to have a significant impact on its financial
position, it has yet to perform a detailed analysis of the
new guidance.
(d) Principles of consolidation
(i) Subsidiaries
Subsidiaries are all entities over which the Company has
the power, directly or indirectly, to govern their financial
and operating policies so as to obtain benefits from its
activities. Control is achieved when the Company is
exposed, or has rights, to variable returns from its
involvement with the subsidiary and has the ability to
affect those returns through its power. Specifically, the
Company controls a subsidiary if and only if the Company
has:
–
–
–
Power over the subsidiary (i.e. existing rights that
give it the current ability to direct the relevant
activities of the subsidiary)
Exposure, or rights, to variable returns from its
involvement with the subsidiary, and
The ability to use its power over the subsidiary to
affect its returns.
In assessing control, potential voting rights that presently
are exercisable or convertible are taken into account. The
adoption of AASB 11 has not impacted the treatment of
subsidiaries for the Company.
Subsidiaries are fully consolidated from the date on which
control
the Company. They are
de-consolidated from the date that control ceases.
transferred
to
is
Intercompany transactions, balances and unrealised gains
on transactions between entities within the Company are
eliminated. Unrealised losses are also eliminated unless
the transaction provides evidence of the impairment of the
asset
in subsidiaries are
Investments
accounted for at cost in the individual financial statements
of the Company. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with
the policies adopted by the Company.
transferred.
(ii) Joint ventures
The interest in a joint venture partnership is accounted for
in the consolidated financial statements using the equity
method after initially being recognised at cost. Under the
equity method, the share of the profits or losses of the
joint venture is recognised in the income statement andthe
share of post-acquisition movements
is
recognised in other comprehensive income.
in reserves
Profits or losses on transactions establishing the joint
venture partnership and transactions with the
joint
venture are eliminated to the extent of the Company's
ownership interest until such time as they are realised by
P.36 VILL A WORLD LIMITED ANNUAL REPORT 2014
Notes to the consolidated financial statements
30 June 2014 (continued)
loss on
the joint venture partnership on consumption or sale.
However, a
is recognised
immediately if the loss provides evidence of a reduction in
the net realisable value of current assets, or an
impairment loss.
transaction
the
(e) Revenue recognition
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 Company 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 Company's activities
as described below. The Company bases its estimates on
historical results, taking into consideration the type of
customer, the type of transaction and the specifics of each
arrangement.
Revenue is recognised for the major business activities as
follows:
(i) Land development and resale
Revenue and costs of sales are brought to account when
the significant risks and rewards of ownership and
effective control over the goods have passed to the buyer.
The significant risks and rewards are considered to be
transferred to the buyer when the Company retains
neither continuing managerial involvement to the degree
usually associated with ownership nor effective control
over the units sold. This is considered to be when the
contract becomes unconditional or upon settlement
depending on the terms of the contract and when it is
probable that the economic benefits associated with the
transaction will flow to the Company.
(ii) Construction contracts
Contract revenue includes the initial amount agreed in the
contract plus any variations in contract work, claims and
incentive payments, to the extent that it is probable that
they will result in revenue and can be measured reliably.
As soon as the outcome of a construction contract can be
estimated reliably, contract revenue is recognised in profit
or loss in proportion to the stage of completion of the
contract. Contract expenses are recognised in accordance
with the stage of completion unless they create an asset to
future contract activity.
The stage of completion is assessed internally. When the
outcome of a construction contract cannot be estimated
reliably, contract revenue is recognised only to the extent
of contract costs incurred that are likely to be recoverable.
An expected loss on a contract is recognised immediately
in the income statement.
(iii) Interest income
income
Interest income is recognised in the income statement on
an accruals basis.
the
Interest
amortisation of any discount or premium, transaction
costs or other differences between the initial carrying
amount of an interest-bearing instrument and its amount
at maturity calculated on an effective interest rate basis.
Interest income is recognised on a gross basis including
withholding tax, if any.
includes
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 3 6
(iv) Sale of non-current assets
The net loss or gain on sale of assets is calculated as the
difference between the gross proceeds of sale and the
carrying amount of the asset at the time of disposal
(including incidental costs) and is recognised in other
income.
(v) Dividends and distribution
Dividend revenue is recognised net of any franking credits.
Revenue from dividends and distributions from controlled
entities is recognised by the Company when the right to
receive the distribution has been established. This applies
even if dividends are paid out of pre-acquisition profits.
(f) Expense recognition
Expenses are recognised in the income statement on an
accrual basis.
(g) Finance costs
the
Ancillary costs
arrangement of borrowings are capitalised and amortised
over the life of the borrowings.
in connection with
incurred
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.
(h)
Income tax
Income tax expense comprises current and deferred tax. It
is recognised in profit or loss except to the extent that it
relates to items recognised directly in equity or other
comprehensive income.
Villa World Limited and
its wholly-owned Australian
controlled entities have implemented the tax consolidation
legislation. As a consequence, these entities are taxed as a
single entity and the deferred tax assets and liabilities of
these entities are set off in the consolidated financial
statements.
(i) Current tax
Current tax comprises the expected tax payable or
receivable on the taxable income or loss for the year and
any adjustment to tax payable or receivable in respect of
previous years. It is measured using tax rates enacted or
substantively enacted at the reporting date. Current tax
also includes any tax arising from dividends.
(ii) Deferred tax
is recognised
Deferred tax
in respect of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts
used for taxation purposes. Deferred tax is not recognised
for:
–
–
temporary differences on the initial recognition of
assets or liabilities in a transaction that is not a
business combination and
that affects neither
accounting nor taxable profit or loss.
temporary differences related to
in
subsidiaries, associates and joint arrangements to the
extent that the Company is able to control the timing of
the reversal of the temporary differences and it is
probable that they will not reverse in the foreseeable
future.
investments
Notes to the consolidated financial statements
30 June 2014 (continued)
–
taxable temporary differences arising on the initial
recognition of goodwill.
tax assets are recognised
Deferred
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 assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the
related tax benefit will be realised.
Deferred tax is measured at the tax rates that are
expected to be applied to temporary differences when they
reverse, using tax rates enacted or substantively enacted
at the reporting date.
The measurement of deferred tax reflects the tax
consequences that would follow from the manner in which
the Company expects, at the reporting date, to recover or
settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if certain
criteria are met.
(i) Leases
Leases in which a significant portion of the risks and
rewards of ownership are not transferred to the Company
as lessee are classified as operating leases (note 27).
Payments made under operating leases (net of any
incentives received from the lessor) are charged to profit
or loss on a straight-line basis over the period of the lease.
(j) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at
cost less accumulated depreciation and any accumulated
impairment losses. Any gain or loss on disposal of an item
of property, plant and equipment is recognised in profit or
loss.
(ii) Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable
that the future economic benefits associated with the
expenditure will flow to the Company.
(iii) Depreciation
Depreciation is calculated on a straight-line or diminishing
value basis to write off the net cost of each item of
property, plant and equipment,
leased
equipment, over its expected useful life to the consolidated
entity. Leased assets are depreciated over the shorter of
the lease term and their useful lives unless
is
reasonably certain that the Company will obtain ownership
by the end of the lease term. The expected useful lives of
property, plant and equipment are:
including
it
Vehicles
–
- – Plant and equipment
- – Leasehold improvements
Information technology
- –
3 - 5 years
3 - 10 years
2 - 8 years
4 years
The assets' residual values and useful lives are reviewed,
and adjusted if appropriate, at the end of each reporting
period.
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.37
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 3 7
(k)
Impairment of assets
The carrying amounts of the Company’s assets are tested
for impairment at each balance sheet date where there are
events or changes in circumstances that indicate they
might be impaired.
An impairment loss is recognised whenever the carrying
amount of an asset exceeds its recoverable amount.
Impairment losses are recognised in the income statement
unless the asset has previously been re-valued, in which
case the impairment loss is recognised as a reversal to the
extent of that previous revaluation with any excess
recognised through the income statement.
The recoverable amount of assets is the greater of their
fair value less costs to sell and value in use. In assessing
value
in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time
value of money and the risks specific to the asset. For an
asset that does not generate largely independent cash
inflows, the recoverable amount is determined for the
cash-generating unit to which the asset belongs.
If such
An assessment
is made at each reporting date to
determine whether there is an indication that previously
recognised impairment losses no longer exist or have
the Company
decreased.
estimates the asset's recoverable amount. A previously
recognised impairment loss is reversed only if there has
been a change in the assumptions used to determine the
asset's recoverable amount since the last impairment loss
was recognised.
indication exists,
The reversal is limited so that the carrying amount of the
asset does not exceed its recoverable amount, nor exceed
the carrying amount that would have been determined, net
of depreciation, had no impairment loss been recognised
for the asset in prior years. Such reversal is recognised in
the statement of profit or loss unless the asset is carried
at a revalued amount, in which case, the reversal is
treated as a revaluation increase.
(l) Cash and cash equivalents
For the purpose of presentation in the consolidated
statement of cash flows, 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
in the consolidated
borrowings
balance sheet.
in current liabilities
(m) Inventories
(i) Land held for resale and development costs
Land held for resale 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 and
borrowing costs during development (if the asset is a
is completed
qualifying asset). When development
borrowing costs are expensed as incurred. Other holding
costs are expensed as incurred.
The cost of land and buildings acquired under contracts
entered into but not settled prior to balance date are not
taken up as inventories and as liabilities at balance date
P.38 VILL A WORLD LIMITED ANNUAL REPORT 2014
Notes to the consolidated financial statements
30 June 2014 (continued)
unless all contractual conditions have been fulfilled and
there is certainty of completion of the purchase evident at
balance sheet date.
Borrowing costs included in the cost of land held for resale
are those costs that would have been avoided if the
expenditure on the acquisition and development of the
land had not been made. Borrowing costs incurred while
active development is interrupted for extended periods are
recognised as expenses.
(n) Trade receivables
Trade 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 generally due for settlement no
more than 120 days from the date of recognition for land
development and resale debtors and no more than 60 days
for other debtors. They are presented as current assets
unless collection is not expected for more than 12 months
after the reporting date.
Collectability of trade receivables is reviewed on an
ongoing basis. Debts which are known to be uncollectible
are written off by reducing the carrying amount directly.
An allowance account (provision for impairment of trade
receivables) is used when there is objective evidence that
the Company will not be able to collect all amounts due
according to the original terms of the receivables.
Significant financial difficulties of the debtor, probability
that the debtor will enter bankruptcy or financial
reorganisation, and default or delinquency in payments
(more than 30 days overdue) are considered indicators that
the trade receivable is impaired. The amount of the
impairment allowance 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. Cash flows relating to short-term
receivables are not discounted if the effect of discounting
is immaterial.
The amount of the impairment loss is recognised in profit
or loss within other expenses. When a trade receivable for
which an impairment allowance had been recognised
becomes uncollectible in a subsequent period, it is written
off against the allowance account. Subsequent recoveries
of amounts previously written off are credited against
other expenses in profit or loss.
(o) Trade and other payables
These amounts represent liabilities for goods and services
provided to the Company prior to the end of financial year
which are unpaid. The amounts are unsecured and are
usually paid within 30-60 days of recognition. Trade and
other payables are presented as current liabilities unless
payment is not due within 12 months from the reporting
date. They are recognised initially at their fair value and
subsequently measured at amortised cost using the
effective interest method.
(p) Derivatives and hedging activities
interest rate risks.
The Company uses derivative financial instruments to
hedge
its
investment strategy, the entity does not hold or issue
derivative financial instruments for trading purposes.
In accordance with
Derivatives are initially recognised at fair value on the date
a derivative contract is entered into and are subsequently
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 3 8
remeasured to their fair value at the end of each reporting
period. 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 Company designates its derivatives as:
(i) Cash flow hedge
the derivative
When a derivative is designated as a cash flow hedging
instrument, the effective portion of changes in the fair
value of
in other
comprehensive income and accumulated in the hedging
reserve. Any ineffective portion of changes in the fair value
of the derivative is recognised immediately in profit or
loss.
recognised
is
The amount accumulated in equity is retained in other
comprehensive income and reclassified to profit or loss in
the same period or periods during which the hedged item
affects profit or loss.
If the hedging instrument no longer meets the criteria for
hedge accounting, expires or is sold, terminated or
exercised, or the designation is revoked, then hedge
accounting is discontinued prospectively. If the forecast
transaction is no longer expected to occur, then the
amount accumulated in equity is reclassified to profit and
loss.
(q) 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 profit or loss over the period of
the borrowings using the effective interest method. Fees
paid on the establishment of loan facilities are recognised
as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn
down. In this case, the fee is deferred until the draw down
occurs. To the extent there is no evidence that it is
probable that some or all of the facility will be drawn
down, the fee is capitalised as a prepayment for liquidity
services and amortised over the period of the facility to
which it relates.
Interest expense is accrued at the effective interest rate.
in
the contract
Borrowings are removed from the balance sheet when the
obligation specified
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 profit or loss as other income or
finance costs.
Borrowings are classified as current liabilities unless the
Company has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting
period.
(r) Provisions
Provisions for legal claims, service warranties and make
good obligations are recognised when the Company 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
Notes to the consolidated financial statements
30 June 2014 (continued)
reliably estimated. Provisions are not recognised for
future operating losses.
is recognised when the
A provision for warranties
underlying products or services are sold. The provision is
based on historical warranty data and a weighting of all
possible outcomes against their associated possibilities.
Where the Company expects some or all of a provision to
be reimbursed, such as under an insurance contract, the
reimbursement is recognised as a separate asset, but only
when the reimbursement is virtually certain. The expense
relating to any provision is presented in the income
statement net of any reimbursement.
Provisions are measured at
the present value of
management's best estimate of the expenditure required
to settle the present obligation at the end of the reporting
period. The discount rate used to determine the present
value is a pre-tax rate that reflects current market
assessments of the time value of money and the risks
specific to the liability. The increase in the provision due to
the passage of time is recognised as interest expense.
A provision for onerous contracts is recognised when the
expected benefits to be derived by the consolidated entity
from a contract are lower than the unavoidable cost of
meeting its obligations under the contract.
(s) Employee benefits
(i) Short-term obligations
Liabilities for salaries and wages, including non-monetary
benefits and annual leave expected to be settled within 12
months of the reporting date are recognised as provisions
in respect of employees services up to the reporting date
and are measured as the amounts expected to be paid
when the liabilities are settled.
(ii) Other long-term employee benefit obligations
The Company's net obligation in respect of long-term
employee benefits is the amount of future benefits that
employees have earned in return for their service in the
current and prior periods. That benefit is discounted to
determine
its present value. Remeasurements are
recognised in profit or loss in the period in which they
arise. The obligations are presented as current liabilities
in the consolidated balance sheet if the entity does not
have an unconditional right to defer settlement for at least
twelve months after the reporting date, regardless of
when the actual settlement is expected to occur.
(iii) Share-based payments
Share-based compensation benefits are provided to key
personnel via an employee option scheme. Information
relating to these schemes is set out in note 29.
The fair value of options granted under the Villa World
Limited Option Plan is recognised as an employee benefits
expense with a corresponding increase in equity. The total
amount to be expensed is determined by reference to the
fair value of the options granted, which includes any
market performance conditions and the impact of any
non-vesting conditions but excludes the impact of any
service and non-market performance vesting conditions.
The total expense is recognised over the vesting period,
which is the period over which all of the specified vesting
conditions are to be satisfied. At the end of each period,
the entity revises its estimates of the number of options
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.39
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 3 9
that are expected to vest based on the non-market vesting
conditions. It recognises the impact of the revision to
in profit or loss, with a
original estimates,
corresponding adjustment to equity.
if any,
(iv) Bonus plans
The Company recognises a liability and an expense for
bonuses. The Company recognises a liability where it is
contractually obliged or where there is a past practice that
has created a constructive obligation.
(v) Termination benefits
Termination benefits are expensed at the earlier of when
the Company can no longer withdraw the offer of those
benefits and when the Company recognises costs for a
restructuring. If benefits are not expected to be settled
wholly within 12 months of the end of the reporting period,
then they are discounted.
(t) 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 the proceeds.
If the Company reacquires its own equity instruments, for
example as the result of a share buy-back, those
instruments are deducted from equity and the associated
shares are cancelled. No gain or loss is recognised in the
profit or loss and the consideration paid including any
directly attributable incremental costs (net of income
taxes) is recognised directly in equity.
(u) Dividends
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
reporting period but not distributed at the end of the
reporting period.
(v) Segment reporting
Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating
decision maker ("CODM"). The CODM, who is responsible
for allocating resources and assessing performance of the
operating segments, has been identified as the executive
team.
Disclosures concerning the Company’s operating and
reportable segments, as well as the key financial
information provided to the CODM are set out in note 32 -
Segment Information.
(w) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
–
–
the profit attributable to owners of the Company,
excluding any costs of servicing equity other than
ordinary shares;
by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for
bonus elements in ordinary shares issued during the
period and excluding treasury shares.
P.40 VILL A WORLD LIMITED ANNUAL REPORT 2014
Notes to the consolidated financial statements
30 June 2014 (continued)
(ii) 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 additional ordinary
shares that would have been outstanding assuming the
conversion of all dilutive potential ordinary shares.
–
(x) Goods and Services Tax (GST)
Revenues, expenses and assets/liabilities (other than
receivables) are recognised net of
the amount of
associated GST, unless the GST incurred is not recoverable
from the taxation authority. In this case it is recognised as
part of the cost of acquisition of the asset or as part of the
expense. Receivables and payables are stated with the
amount of GST
included. The net amount of GST
recoverable from, or payable to, the ATO is included as a
current asset or liability in the balance sheet.
Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing or
financing activities which are recoverable from, or payable
to the taxation authority, are presented as operating cash
flows.
(y) Rounding of amounts
issued by
The Company is of a kind referred to in Class Order
98/100,
the Australian Securities and
Investments Commission, relating to the 'rounding off' of
amounts in the financial statements. Amounts in the
financial statements have been rounded off in accordance
with that Class Order to the nearest thousand dollars, or in
certain cases, the nearest dollar.
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 4 0
estimate. The assumptions made in relation to the current
period are consistent with those in the prior year.
(ii) Inventory
The inventory of the Company is stated as the lower of cost
and net realisable value in accordance with the accounting
policy stated in note 1(m). The net realisable value amount
has been determined based on the current future
estimated cash flow of the projects. Realisation
is
dependent on the ability to meet forecasted/estimated
cash flows.
(iii) Income taxes
The Company is subject to income taxes in Australia.
The Company recognises liabilities based on the current
understanding of the tax law. Where that final tax outcome
of these matters is different from the amounts that were
initially recorded, such differences will impact the current
and deferred tax provisions in the period in which such
determination is made.
In addition, the Company has recognised deferred tax
assets relating to carried forward tax losses to the extent
there are sufficient
temporary differences
taxable
(deferred tax liabilities) relating to the same taxation
authority and the same subsidiary against which the
unused tax losses can be utilised.
Utilisation of the tax losses also depends on the ability of
the Company to satisfy certain tests at the time the losses
are recouped. It is believed that the Company will satisfy
the continuity of ownership test and the same business
test in order to utilise any tax losses.
(b) Critical judgements in applying the entity's
accounting policies
2 Critical accounting estimates and judgements
(i) Impairment of equity accounted investments
the equity method,
After application of
(including
recognising the joint venture’s losses), the Company
applies AASB 139 Financial Instruments: Recognition and
Measurement to determine whether it is necessary to
recognise any additional impairment loss with respect to
its net investment in the joint venture. The amount of the
loss is measured as the difference between the asset’s
carrying amount and the present value of estimated future
cash flows (excluding future credit losses that have not
been incurred). Estimating these future cash flows of the
joint venture requires significant judgement and therefore
actual amounts may differ from this impairment estimate.
Estimates and judgements are continually evaluated and
are based on historical experience and other factors,
including expectations of future events that may have a
financial impact on the entity and that are believed to be
reasonable under the circumstances.
(a) Critical accounting estimates and assumptions
The Company makes estimates and assumptions
concerning the future. The resulting accounting estimates
will, by definition, seldom equal the related actual results.
The estimates and assumptions that have a significant risk
of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are
discussed below.
(i) Warranty claims
The Company generally offers a 6 year 6 month warranty
for its housing products. Management estimates the
related provision for future warranty claims based on
historical warranty claim information, as well as recent
trends that might suggest that past cost information may
differ from future claims. The Company includes legal
costs in the provision for warranty claims to the extent that
it has a present obligation to incur these costs at the end of
the reporting period. Estimating this provision requires the
exercise of significant judgement and it is therefore
possible that actual amounts may differ from this
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.41
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 4 1
Notes to the consolidated financial statements
30 June 2014 (continued)
3 Earnings per share
(a) Basic earnings per share
From continuing operations attributable to the ordinary equity holders of the company
Total basic earnings per share attributable to the ordinary equity holders of the Company
(b) Diluted earnings per share
From continuing operations attributable to the ordinary equity holders of the company
Total diluted earnings per share attributable to the ordinary equity holders of the
Company
(c) Reconciliation of earnings used in calculating earnings per share
Basic earnings per share
Profit attributable to the ordinary equity holders of the Company used in calculating basic
earnings per share:
From continuing operations
(d) Weighted average number of shares used as denominator
Weighted average number of ordinary shares used as the denominator in calculating basic
earnings per share
Weighted average number of diluted shares used as the denominator in calculating diluted
earnings per share
(e)
Information on the classification of securities
(i) Options
Consolidated
30-Jun-14
Cents
21.8
21.8
30-Jun-13
Cents
(18.2)
(18.2)
Consolidated
30-Jun-14
Cents
21.5
30-Jun-13
Cents
(18.2)
21.5
(18.2)
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
19,066
(13,493)
Consolidated
2014
Number
'000
2013
Number
'000
87,477
74,108
88,790
74,108
Options granted to employees under the Villa World Option Plan are considered to be potential ordinary shares and have been
included in the determination of diluted earnings per share to the extent to which they are dilutive. The options have not been
included in the determination of basic earnings per share. Details relating to the options are set out in note 29.
4 Revenue
From continuing operations
Revenue from land development, residential building and construction contracts
Other revenue
Revenue from related joint ventures
Rebates received
Other Revenue
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
229,450
169,396
2,323
347
769
3,439
232,889
349
458
1,270
2,077
171,473
P.42 VILL A WORLD LIMITED ANNUAL REPORT 2014
Notes to the consolidated financial statements
30 June 2014 (continued)
5 Expenses
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 4 2
Expenses, excluding finance costs, included in the consolidated income statement
classified by function
Cost of land development, residential building and construction contracts
Expenses, excluding finance costs
Classification of these expenses by function
Cost of land development, residential building and construction contracts
Other expenses from ordinary activities
Property sales and marketing expenses
Employee benefits
Land holding costs
Legal and professional costs
Administration costs
Information technology costs
Depreciation
Other expenses
6 Finance costs
Loan interest and charges
Other financial institutions
Unwind of discount deferred consideration
Borrowing costs
Amount capitalised*
Unwind of amount capitalised
Total finance costs included within the income statement
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
172,628
33,942
206,570
122,401
26,771
149,172
172,628
122,401
14,879
11,448
3,210
1,018
623
821
450
1,493
33,942
12,661
7,858
2,618
1,049
406
696
363
1,120
26,771
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
5,073
1,268
364
6,705
(2,451)
3,371
7,625
4,538
1,537
344
6,419
(2,697)
4,264
7,986
*The capitalisation rate used to determine the amount of borrowing costs to be capitalised is the weighted average interest rate applicable to the
entity's outstanding borrowings during the year, including line fees and margins, in this case 7.80% (30 June 2013: 7.68%).
7
Remuneration of auditors
Ernst & Young was appointed as the Lead Auditor at the AGM on 30 October 2013. PwC was the Lead Auditor for the period
ended 30 June 2013.
During the year, the following fees were paid or payable for services provided by the Lead Auditor of the consolidated entity, its
related practices and non-related audit firms:
(a) Ernst & Young
Audit and other assurance services
Audit and review of financial statements
Total remuneration for audit and other assurance services
Other services provided by EY:
Other services
Total remuneration for other services
Total remuneration of Ernst & Young
Consolidated
30-Jun-14
$
30-Jun-13
$
114,979
114,979
87,037
87,037
202,016
-
-
-
-
-
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.43
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 4 3
Notes to the consolidated financial statements
30 June 2014 (continued)
Remuneration of Auditors (continued)
R (b)
Non-Ernst & Young related audit firms
Audit and other assurance services
Audit and review of financial statements
Other services
Taxation services
Other services
Total remuneration of non-Ernst & Young audit firms
8
Income tax expense
(a)
Income tax expense / (benefit)
Deferred tax
Adjustments for current tax of prior periods
Aggregate income tax (benefit) / expense
Income tax expense is attributable to:
Profit from continuing operations
Aggregate income tax expense
Deferred income tax expense/(benefit) included in income tax expense comprises:
(Increase) / decrease in deferred tax assets
(Decrease) / increase in deferred tax liabilities
Adjustments for current tax of prior periods
Net deferred tax – debited/(credited) directly to equity
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit/(loss) from continuing operations before income tax expense
Tax at the Australian tax rate of 30.0% (2013 - 30.0%)
Tax effect of amounts which are not deductible (taxable)
in calculating taxable income:
Property, plant and equipment
Franking credits
Profit / (loss) of equity accounted investments
Derecognition / (recognition) of deferred tax asset for losses
Other
Adjustments for current tax of prior periods
Income tax expense
Consolidated
30-Jun-14
$
30-Jun-13
$
42,543
206,076
8,311
18,570
26,881
69,424
74,127
74,230
148,357
354,433
Consolidated
30-Jun-14
$'000
3,783
(280)
3,503
30-Jun-13
$'000
(1,161)
758
(403)
3,503
3,503
3,725
(960)
280
738
3,783
(403)
(403)
(7,414)
7,011
(758)
-
(1,161)
Consolidated
30-Jun-14
$'000
22,569
22,569
6,771
30-Jun-13
$'000
(13,896)
(13,896)
(4,169)
-
-
901
7,672
(4,208)
319
(280)
(4,169)
3,503
(73)
(258)
461
(4,039)
2,874
4
758
3,636
(403)
Villa World does not recognise a deferred tax asset on its investment in the Eynesbury Pastoral Trust on the basis that the
deferred tax asset represents an unrealised capital loss for which the future use is not probable.
(c) Tax expense/(income) relating to items of other comprehensive income
Cash flow hedges
Total tax expense/(income) relating to items of other comprehensive income
Consolidated
30-Jun-14
$'000
324
324
30-Jun-13
$'000
59
59
P.44 VILL A WORLD LIMITED ANNUAL REPORT 2014
Notes to the consolidated financial statements
30 June 2014 (continued)
Income tax expense (continued)
(d) Tax losses
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 4 4
During the year a prima facie taxable income of $13.9 million (30 June 2013: $2.1 million taxable income) was generated by the
Company. Unused tax losses of $20.3 million (30 June 2013: $21.0 million) with a potential tax benefit of $6.1 million (30 June
2013: $6.3 million) have been recognised at 30 June 2014. The Company has not recognised $14.3 million of tax losses (30 June
2013: $28.4 million) with a potential tax benefit of $4.3 million (30 June 2013: $8.5 million). Total unused tax losses for the
Company at 30 June 2014 are $34.6 million (30 June 2013: $49.4 million).
(e) Tax consolidation legislation
The Company and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation as of 12
December 2006. The accounting policy in relation to this legislation is set out in note 1(h). On adoption of the tax consolidation
legislation, the entities in the tax consolidated group entered into tax sharing agreements which, in the opinion of the Directors,
limits the joint and several liability of the wholly-owned entities in the case of a default by the head entity, the Company.
The entities have also entered into tax funding agreements under which the wholly-owned entities fully compensate for any
current tax payable assumed and are compensated by the head entities for any current tax receivable and deferred tax assets
relating to unused tax losses or unused tax credits that are transferred to the Company under the tax consolidation legislation.
The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities’ financial
statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head
entities, which are issued as soon as practicable after the end of each financial year. The head entities may also require
payment of interim funding amounts to assist with its obligations to pay tax statements. The funding amounts are recognised as
current intercompany receivables or payments.
(f) Franking account
An amount of $16.7 million (30 June 2013: $19.1 million) is held as franking credits in the Company. Refer note 23(c).
9 Cash and cash equivalents
Cash at bank and in hand
Cash and cash equivalents
10 Trade and other receivables
Current assets
Trade receivables
Trade receivables due from related parties
Other receivables
Total current assets
The ageing of current trade receivables is as follows:
1 to 3 months
Over 6 months
(a) Past due but not impaired
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
12,118
12,118
15,350
15,350
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
14,825
660
1,414
16,899
25,557
-
1,818
27,375
Consolidated
30-Jun-14
$'000
14,698
787
15,485
30-Jun-13
$'000
21,199
4,358
25,557
As of 30 June 2014, the trade receivables of the Company of $nil (30 June 2013: $nil) were past due but not impaired. Trade
receivables are generally due for settlement no more than 120 days from the date of recognition for land development and
resale debtors and no more than 60 days for other debtors.
(b) Other receivables
These amounts generally arise from transactions outside the usual operating activities of the Company. Interest may be
charged at commercial rates where the terms of repayment exceed six months. Collateral is not normally obtained.
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.45
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 4 5
Notes to the consolidated financial statements
30 June 2014 (continued)
Trade and other receivables (continued)
(c) Fair value and credit risk
Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their fair value.
The fair value of collateral held for trade receivables is $15.5 million (30 June 2013 : $25.6 million). Refer to note 24 - Financial
risk management for more information on the risk management policy of the Company and the credit quality of the entity’s
trade receivables.
11 Investments accounted for using equity
The Company has the following interests in jointly controlled entities.
Name of Entity
% Owned Purpose
Eynesbury Holding Pty Ltd
Eynesbury Pastoral Trust
Eynesbury Golf Pty Ltd
Eynesbury Development Joint Venture
Expression Homes Pty Ltd
50
50
50
50
50
The owner of the Eynesbury Development Joint Venture Land, Victoria,
as Trustee.
The owner of the Eynesbury Development Joint Venture Land, Victoria.
The operation of the golf course and homestead hospitality facilities at
Eynesbury, Victoria.
Residential development at Eynesbury, Victoria.
Residential development and construction projects primarily in Victoria.
The carrying amounts of these joint ventures at balance date were:
Joint venture interests
Opening balance
Less: Share of net profit/(loss) of associates and joint ventures1
Add: Cash contribution
Less: Impairment in Eynesbury Group
Total investment accounted for using the equity method
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
13,701
3,767
500
-
17,968
32,850
(17,448)
-
(1,701)
13,701
1 The prior year consolidated share of profit/(loss) from associates includes share of profit from Cornell’s Hill Pty Ltd and Cotton Ventures Pty Ltd
($13K).
Villa World's share of joint ventures' assets and liabilities
Current assets, including cash and cash equivalents $29.4m (2013:$1.5m) and trade
debtors $25.5m (2013:$1.5m)
Non-current assets
Total assets
Current liabilities including bill facility $10.0m (2013:$nil)
Non-current liabilities including bill facility of nil (2013:$27.0m)
Total liabilities
Equity
Proportion of the Group's ownership
Equity attributable to the investment
58,666
1,198
59,864
15,608
57,132
72,740
(12,876)
50%
(6,438)
62,089
4,492
66,581
6,860
82,806
89,666
(23,085)
50%
(11,542)
The non-current liabilities include loans to the Joint Venture partners totalling $56.8 million which have not been forgiven in the
Joint Venture in line with the 2013 impairments raised. It is anticipated that $32 million of these loans will be forgiven in due
course thus increasing the net asset position of the Joint Venture to approximately $19 million (50% share of $8.5 million). Since
reporting date, $9 million has been repaid to each partner, reducing the investment from $17.9 million to $8.9 million.
Villa World's aggregate share of joint ventures revenue, expenses and results
Revenue
Expenses
Profit / (loss) before income tax
Company’s share of profit for the year
Villa World's aggregate share of joint ventures contingent liabilities
Bank guarantees
71,269
63,734
7,535
11,375
46,271
(34,896)
3,767
(17,448)
178
377
The equity accounted investment in the Company's Eynesbury Township joint venture as at 30 June 2014 is $18.0 million (30
June 2013 $13.7 million).
The Company advised the market on 21 August 2013 that contracts for the sale of the Eynesbury project (in which the Company
holds a 50% interest) to the Hyde Property Group Pty Ltd were unconditional. The sale includes all undeveloped land, as well as
the Eynesbury golf course land and business for a total sale price of $60 million (plus GST).
P.46 VILL A WORLD LIMITED ANNUAL REPORT 2014
Notes to the consolidated financial statements
30 June 2014 (continued)
Investments accounted for using equity (continued)
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 4 6
On 27 June 2014, tranche one of the sale to the Hyde Property Group settled at a sale price of $30 million plus GST. The
settlement date for the second tranche remains unchanged at 2 March 2015, at a sale price of $30 million plus GST. The
purchaser has paid a deposit of $3 million in relation to the second contract, which has previously been released to the joint
venture.
On 7 July 2014, $9 million was repaid to each Joint Venture partner, the investment reducing to $9 million. Refer note 30 -
Events occurring after the reporting period.
The Company will receive a 2.2% Project Management Fee ($1.32 million) for the sale of Eynesbury. This is based on the sale
price (incl. GST) of $66 million, which is included in Trade Debtors - related parties as at 30 June 2014. Refer note 10 - Trade
and other receivables. On 17 July 2014, $660,000 of this project management fee was received.
For the Eynesbury joint venture entities, the joint venture parties have agreed that they will share liabilities in the same
proportion as their holdings in the joint venture (50% each). If the parties have entered an agreement which creates on each of
them a joint and several (unlimited) liability to a third party, they have agreed to indemnify each other to the extent that one of
them is required to pay more than 50% of the liability to a third party.
12 Inventories
Current assets
Land held for development and resale
Capitalised Interest
Impairment of development land
Non-current assets
Land held for development and resale
Capitalised interest
Impairment of development land
Total inventory
13 Other assets
Current assets
Prepayments
Advance commissions
Other
14 Property, plant and equipment
Consolidated entity
At 30 June 2014
Cost
Accumulated depreciation
Net book amount
Consolidated entity
At 30 June 2013
Cost
Accumulated depreciation
Net book amount
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
118,515
6,003
(858)
123,660
137,480
7,066
(9,983)
134,563
258,223
81,798
4,430
(321)
85,907
85,010
9,090
(10,735)
83,365
169,272
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
729
1,185
64
1,978
Plant and
equipment
$'000
Leasehold
improvements
$'000
Information
Technology
$'000
802
(609)
193
633
(543)
90
601
(233)
368
492
(160)
332
1,457
(893)
564
1,121
(582)
539
506
695
45
1,246
Total
$'000
2,860
(1,735)
1,125
2,246
(1,285)
961
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.47
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 4 7
Notes to the consolidated financial statements
30 June 2014 (continued)
15 Parent entity financial information
The Company shareholders hold shares in a single holding company, being Villa World Limited (the “Company”).
(a) Summary financial information
The individual financial statements for the parent entity, Villa World Limited, show the following aggregate amounts:
Balance sheet
Current assets
Net assets
Shareholders' equity
Issued capital
Reserves
Retained earnings
Total equity
30-Jun-14
$'000
30-Jun-13
$'000
15,702
179,842
7,546
150,116
89,662
89,960
220
179,842
58,413
220
91,483
150,116
Profit or loss for the period
3,923
(2,978)
(b) Contingent liabilities of the parent entity
The parent entity has a provided financial guarantee in respect of the Bilateral Multi Option Facility (“MOF”) with Australia and
New Zealand Banking Group. Details of the parent entities contingent liabilities are disclosed in note 26 - Contingencies.
16 Deferred tax assets
The balance comprises temporary differences attributable to:
Tax losses
Inventories
Accruals
Employee benefits
Provisions
Property, plant and equipment
Other
Capital raising costs
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax assets
Movements
As at 1 July 2013
- to profit or loss
- to other
- to other comprehensive income
As at 30 June 2014
17 Deferred tax liabilities
The balance comprises temporary differences attributable to:
Trade debtors
Inventories
Other current debtors
Set-off deferred tax assets
Net deferred tax assets
Movements
As at 1 July 2013
- profit or loss
As at 30 June 2014
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
6,083
11,250
631
275
3,265
96
753
326
22,679
(13,721)
8,958
26,404
(3,725)
-
-
22,679
6,307
17,057
49
208
2,142
216
425
-
26,404
(14,681)
11,723
18,928
7,414
3
59
26,404
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
(8,100)
(5,238)
(383)
(13,721)
22,679
8,958
14,681
(960)
13,721
(7,714)
(6,784)
(183)
(14,681)
26,404
11,723
7,670
7,011
14,681
P.48 VILL A WORLD LIMITED ANNUAL REPORT 2014
Notes to the consolidated financial statements
30 June 2014 (continued)
18 Trade and other payables
Current liabilities
Trade payables1
Accrued expenses
Other payables2
Total current payables
Non-current liabilities
Other payables3
Total non-current payables
Total payables
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 4 8
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
34,912
19,167
777
54,856
1,520
1,520
56,376
6,251
18,115
1,209
25,575
480
480
26,055
1 Includes $30.4 million (30 June 2013: $3.0 million) payable for the purchase of inventory, due within 12 months of the reporting date.
2 Includes derivatives payable of $0.6 million (30 June 2013 : $0.6 million). Refer note 24(d) – Fair value measurements.
3 Includes derivatives payable of $1.4 million (30 June 2013: $0.3 million). Refer note 24(d) - Fair value measurements.
(a) Derivative financial instruments
The Company is party to derivative financial instruments in the normal course of business in order to hedge exposure to
fluctuations in interest rates in accordance with the Company’s financial risk management policies (refer to note 24 - Financial
Risk Management). The gain or loss from remeasuring is transferred to the profit and loss when the hedge is ineffective.
Interest rate swap contracts - cash flow hedges
The “Multi-Option’ bank facility for the Company bears an average variable interest rate of 7.80% (including line and facility
fees).
It is policy to protect part of the Bilateral Multi Option Facility of $155 million from exposure to fluctuating interest rates.
Accordingly, the Company has entered into interest rate swap contracts under which it is obliged to receive interest at variable
rates and to pay interest at fixed rates. Interest payments for interest rate swaps are net settled every 30 days.
The interest rate swap contract in place is referred to in the table below:
Interest rate swap
Multi Option facility ANZ -
Swap
Multi Option Facility ANZ -
Swap4
Amount
hedged
$'000
Expiry
date
Loan facility
$'000
Percent
hedged %1
Fixed rate
%2
Variable rate as at
30-Jun-14 %3
Valuation as at
30-Jun-14
$'000
70,000 9-Jun-15
155,000
45.2%
3.5%
2.72%
599
90,000 12-Jun-18
155,000
58.1%
3.69%
2.72%
1,420
1 % of loan facility limit.
2 The swap rate outlined above does not include any margin and line fees applicable under the loan agreements.
3 Variable rate is 30 day BBSY @ 30 June 2014.
4 Effective date of swap is 9 June 2015.
Liabilities
Financial liabilities at fair value through profit and loss:
Derivatives used for hedging
Total liabilities
Level 2
30-Jun-14
$'000
30-Jun-13
$'000
(2,019)
(2,019)
(940)
(940)
At balance date, these contracts were liabilities with fair value of $2.0 million (30 June 2013: $0.9 million).
The gain or loss from remeasuring the hedging instruments at fair value is recognised in other comprehensive income and
deferred in equity in the hedging reserve, to the extent that the hedge is effective. There is no ineffectiveness for the year ended
30 June 2014.
Notes to the consolidated financial statements
30 June 2014 (continued)
19 Borrowings
(a) Financing arrangements
Access was available at balance date to the following lines of credit:
Total financing facilities
Bi-lateral loan (secured) (i)
Facilities utilised at reporting date
Loan (secured) (i) - non-current
Bank guarantees utilised at reporting date
Loan (secured) (i)
Facilities unutilised at reporting date
Loan (secured) (i)
(i) Bilateral loan facilities
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.49
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 4 9
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
155,000
155,000
110,000
110,000
69,086
69,086
11,026
11,026
74,888
74,888
70,025
70,025
9,653
9,653
30,322
30,322
The Company's primary banking facility with ANZ as at 30 June 2014 was $155 million (inclusive of working capital facility and
bank guarantees) and matures on 1 September 2016 (30 June 2013: $110 million).
As at 30 June 2014 the facility was drawn exclusive of bank guarantees at $69.1 million (30 June 2013: $70.0 million). Bank
guarantees issued total $11.0 million (30 June 2013: $9.7 million). The bank guarantees are also disclosed in note 26 -
Contingencies.
No restrictions have been imposed on this facility by the financier during the year ending 30 June 2014 and drawdowns continue
to be made in the ordinary course of business. All covenants under the facility were met within the required timeframes during
the year.
Interest is payable based on a margin over bank bill swap rate. The Company entered into interest rate swap contracts to fix the
interest rate at 3.5% (excluding the margin and line fees applicable under the loan agreement) on $70 million of borrowings.
Refer to note 18(a) - Derivative financial instruments. The swap contract matures on 9 June 2015. During the financial year the
Company entered into a $90 million swap at 3.69% which will commence on 9 June 2015 and will remain in place for 3 years.
The fair value of non-current borrowings and the bank guarantees equals their carrying amount, as the impact of discounting is
not significant.
(b) Assets pledged as security
The facility is secured by registered mortgage over the majority of the Company’s property inventories. The facility is also
secured by mortgage debentures over all assets and undertakings of Villa World Limited and all 100% owned subsidiaries. The
carrying amounts of assets pledged as security for current and non-current borrowings are:
Secured by registered mortgage:
Inventories
Property, plant and equipment
20 Provisions
Current liabilities
Service warranties (a)
Other provisions
Employee benefits (c)
Total current provisions
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
198,575
1,125
199,700
168,338
961
169,299
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
10,079
384
500
10,963
5,900
635
410
6,945
P.50 VILL A WORLD LIMITED ANNUAL REPORT 2014
Notes to the consolidated financial statements
30 June 2014 (continued)
Provisions (continued)
Non-current liabilities
Other provisions
Employee benefits - long service leave (c)
Total non-current provisions
Total provisions
(a) Service warranties
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 5 0
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
247
351
598
11,561
233
238
471
7,416
Provision is made for the estimated warranty claims in respect of Villa World Developments Pty Ltd built properties which are
still under warranty at balance date. These claims are expected to be settled within the statutory warranty period. In addition,
provisions include employee benefits and other general provisions.
(b) Movements in provisions
Consolidated entity
2014
Current liabilities
Carrying amount at the start of the year
- additional provisions recognised
Amounts incurred and charged
Carrying amount at end of period
Consolidated entity
2014
Non-current liabilities
Carrying amount at start of year
- additional provisions recognised
Carrying amount at end of period
Service
warranties
$'000
5,900
6,679
(2,500)
10,079
Service
warranties
$'000
-
-
-
Other
$'000
635
108
(359)
384
Other
$'000
233
14
247
(c) Amounts not expected to be settled within 12 months
The current provision for employee benefits includes accrued annual leave and long service leave. For long service leave it
includes all unconditional entitlements where employees have completed the required period of service. The long service leave
provision of $82,804 (30 June 2013: $94,456) is classified as current, since the Company does not have an unconditional right to
defer settlement for this obligation. The non-current long service leave provision covers conditional entitlements where
employees have not completed their required period of service, adjusted for the probability of likely realisation.
(d) Legal claim
Home warranty claim - Thornleigh
A claim of $6.78 million was made against the Company in respect of damages regarding project development defects,
concerning a development in Thornleigh, NSW, known as Wild Ash Grove. This was first disclosed in detail in the annual report
for the year ended 30 June 2010 as a contingent liability.
A Court-appointed Referee has determined that the Company is liable for $2,687,938. There are also likely to be costs orders
made against the Company by the Court. The Company intends to challenge certain aspects of the Referee’s determination at a
Court “adoption hearing” likely to be held in December 2014.
Provisions for the home warranty claim have been raised in the balance sheet based on best estimates. Factors taken into
account include the impact of the Referee’s determination referred to above, potential costs orders, and alternative potential
outcomes of the Court adoption hearing. Estimating this provision requires the exercise of significant judgement and it is
therefore possible that actual amounts may differ from this estimate. The information in relation to provisions usually required
by AASB137 Provisions, Contingent Liability and Contingent Assets is not disclosed on the grounds that it is expected to
prejudice the outcome of the potential claim.
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.51
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 5 1
Notes to the consolidated financial statements
30 June 2014 (continued)
21 Contributed equity
Ordinary shares
Opening balance
Share buy-back
Shares issued as part of the capital raising 1
Shares issued as part of the share purchase plan2
Transaction costs from capital transactions net of tax
30-Jun-14
2014
Shares
'000
30-Jun-13
2013
Shares
'000
30-Jun-14
$'000
30-Jun-13
$'000
73,539
-
17,000
3,125
-
93,664
75,223
(1,684)
-
-
-
73,539
382,125
-
27,200
5,000
(950)
413,375
383,592
(1,467)
-
-
-
382,125
1 On 18 September 2013, Villa World Limited announced it had completed a fully underwritten institutional placement to raise $27.2 million. The
placement was completed at an issue price of $1.60 per share, representing a 3.9% discount to the closing price of the Company's shares on 16
September 2013 and a 5.1% discount to the volume weighted average price for the five trading days prior to the announcement of the placement.
2 The record date for the share purchase plan was 17 September 2013. The share purchase plan was offered at the same price per share as the
institutional placement.
(a) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company 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 one vote and upon a poll each share is entitled to one vote. Ordinary shares have no par value
and Villa World Limited does not have a limited amount of authorised capital.
(b) Options
Information relating to the Company, including details of options issued, exercised and lapsed during the financial year, is set
out in the Remuneration report on page 19 and note 29 - Share-based payments.
(c) Capital risk management
The Company’s objectives when managing capital is to safeguard the ability to continue as a going concern, continue to provide
returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of
capital. Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. This ratio is
calculated as total debt divided by total tangible assets adjusted for cash on hand. Total debt is calculated as borrowings
(including “interest bearing liabilities” and “other financial commitments” as shown in the balance sheet). Total tangible assets
are calculated as total assets less intangible assets.
The Company's policy is to continue to manage debt levels and maintain the gearing ratio between 15% and 35%. As at 30 June
2014, the gearing ratio was 18.7% (30 June 2013: 24.4%).
The Company has complied with the financial covenants of its borrowing facilities during the 2014 and 2013 reporting periods.
Total borrowings (excluding bank guarantees)
Less: Cash and cash equivalents
Net debt
Total assets
Less: Cash and cash equivalents
Gearing ratio
Notes
19
9
9
Consolidated
30-Jun-14
$'000
69,086
(12,118)
56,968
317,269
(12,118)
305,151
30-Jun-13
$'000
70,025
(15,350)
54,675
239,628
(15,350)
224,278
18.7%
24.4%
P.52 VILL A WORLD LIMITED ANNUAL REPORT 2014
Notes to the consolidated financial statements
30 June 2014 (continued)
22 Other reserves and accumulated losses
(a) Other reserves
Movements:
(i) Profits reserve
Transfer opening retained profits
Transfer current year profit
Dividends provided for or paid
Closing balance
(ii) Hedging reserve - cash flow hedges
Opening balance
Revaluation - gross
Deferred tax
Closing balance
(iii) Share-based payments
Opening balance
Options issued
Transfer options lapsed to retained earnings
Closing balance
(b) Nature and purpose of other reserves
(i) Profits reserve
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 5 2
Notes
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
23(a)
8
29
150,342
21,291
(5,620)
166,013
(657)
(1,080)
324
(1,413)
220
174
(220)
174
164,774
-
-
-
-
(521)
(195)
59
(657)
220
-
-
220
(437)
The profits reserve represents opening retained profits and current year profits transferred to a reserve to preserve the
characteristic as a profit and not appropriate against prior year accumulated losses. Any such profits are available to enable
payment of franked dividends in the future should the Directors declare by resolution. The accumulated losses were generated
by Villa World Trust, which held investment property assets and was wound up in June 2012.
(ii) Cash flow hedges
The hedging reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised in other
comprehensive income, as described in note 1(p). Amounts are reclassified to profit or loss when the associated hedged
transaction affects profit or loss (for instance when the forecast transaction that is hedged takes place).
(iii) Share-based payments
The share-based payments reserve is used to recognise the fair value of options issued to KMPs and executives. Refer note 29 -
Share-based payments.
23 Dividends
(a) Ordinary shares
Interim dividend for the year ended 30 June 2014 of 6.0 cents (2013: nil)
per fully paid share paid on 2 April 2014.
Interim franked dividend based on tax paid at 30.0%
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
5,620
-
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.53
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 5 3
Notes to the consolidated financial statements
30 June 2014 (continued)
Dividends (continued)
(b) Dividends not recognised at the end of the reporting period
In addition to the above dividends, since period end the Directors have recommended the
payment of a final dividend of 9.0 cents per fully paid ordinary share (2013: nil) fully
franked based on tax paid at 30%. The aggregate amount of the proposed dividend expected
to be paid on 30 September 2014 out of profits reserve at 30 June 2014, but not recognised
as a liability at period end, is
(c) Franking credits
Franking credits available for subsequent reporting periods based on a tax rate of 30.0%
(2013 - 30.0%)
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
8,430
-
Consolidated entity
30-Jun-14
$'000
30-Jun-13
$'000
16,701
19,106
The above amounts represent the balance of the franking account as at the end of the reporting period, adjusted for franking
debits that will arise from the payment of dividends recognised as a liability 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 franked dividends.
24 Financial risk management
The Company’s activities are exposed to a variety of financial risks which include market risk (including interest rate risk),
credit risk and liquidity risk. It is the responsibility of the Board and management to ensure that adequate risk identification,
assessment and mitigation practices are in place for the effective oversight and management of these risks.
The Company’s overall risk management program focuses on the unpredictability of financial markets, is managed centrally to
ensure alignment of financial risk management with corporate objectives and seeks to minimise potential adverse effects on the
financial performance of the Company.
The Company uses derivative financial instruments such as interest rate swaps to hedge certain risk exposures. Derivatives are
exclusively used for hedging purposes, i.e. not as trading or other speculative instruments. The Company 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 risk, aging analysis for credit risk.
Financial risk management is carried out by the finance department under policies approved by the Board. The Board provides
written principles for overall risk management as well as written policies covering specific items, such as mitigating interest
rate and credit risks, use of derivative financial instruments and investing excess liquidity.
(a) Market risk
Market risk is the risk that the fair value or future cash flows of a financial asset or financial liability will fluctuate because of
changes in market prices. Market risk comprises price risk and interest rate risk.
(i) Cash flow and fair value interest rate risk
The Company does not have exposure to equity investments publicly traded on the ASX. The Company’s main interest rate risk
arises from long term borrowings. Borrowings issued at variable rates expose the Company to cash flow interest rate risk. The
Company policy is to maintain a minimum of $70 million of its borrowings fixed by way of interest rate swaps. During the current
and prior financial years, the Company’s borrowings at variable rate were denominated in Australian dollars.
As at the end of the reporting period, the Company had the following variable rate borrowings and interest rate swap contracts
outstanding:
Consolidated entity
30 June 2014
30 June 2013
Bilateral loan facilities
Interest rate swaps - syndicated loans
Net exposure to cash flow interest rate risk
Weighted
average
interest rate
%
7.8%
3.5%
Weighted
average
interest rate
%
7.7%
3.5%
Balance
$'000
69,086
(70,000)
(914)
Balance
$'000
70,025
(70,000)
25
P.54 VILL A WORLD LIMITED ANNUAL REPORT 2014
Notes to the consolidated financial statements
30 June 2014 (continued)
Financial Risk Management (continued)
An analysis by maturities is provided in note 24(c) below.
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 5 4
The Company manages its cash flow interest rate risk by using floating-to-fixed interest rate swaps. Such interest rate swaps
have the economic effect of converting borrowings from floating rates to fixed rates. Generally, the Company raises long-term
borrowings at floating rates and swaps them into fixed rates that are lower than those available if the Company borrowed at
fixed rates directly. Under the interest rate swaps, the Company agrees with other parties to exchange at specified intervals the
difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional
principal amounts.
Group sensitivity
At 30 June 2014, if interest rates had changed by -/+ 25 basis points from the year end rates with all other variables held
constant, post-tax profits for the year, would have been $0.03 million lower/higher (30 June 2013: $0.50 million lower/higher),
mainly as a result of higher/lower interest expense from interest bearing liabilities. Other components of equity would have
been $0.8 million lower/higher (2013: $0.3 million lower/higher) mainly as a result of an increase/decrease in the fair value of
the cash flow hedges of borrowings.
(b) Credit risk
Credit risk is managed on a consolidated basis. Credit risk arises from cash and cash equivalents, derivative financial
instruments and deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers,
including outstanding receivables and committed transactions. For banks and financial institutions, only independently rated
parties with a minimum rating of “AA-” are accepted.
If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses
the credit quality of the customer, taking into account its financial position, past experience and other factors.
The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as summarised on the
table below.
Trade receivables
Counterparties without external credit rating *
Group 1
Total trade receivables
Cash at bank and short-term bank deposits
AA-
30-Jun-14
$'000
30-Jun-13
$'000
15,485
15,485
12,118
12,118
25,557
25,557
15,350
15,350
* Group 1 - This group of receivables is primarily from the sale of house and land packages and land only.
Credit risk is the risk that the counterparty to a financial instrument will fail to discharge an obligation or commitment that it
has entered into with the consolidated entity. The Company’s assets are primarily investment and development properties, it
has limited exposure to credit risks.
The Company has no significant concentrations of credit risk for trade receivables. Trade receivable balances and the credit
quality of trade debtors are consistently monitored on an ongoing basis. Ongoing checks are performed by management to
ensure that settlement terms detailed in individual contracts are adhered to. The Company does not pass clear title to
properties sold until they have been paid in full.
The Company’s borrowings are concentrated to a single credit provider being the Australian and New Zealand Banking Group.
The Board have considered this risk and believes that the financial benefit obtained from using a single AA- rated credit
provider outweighs any exposure to concentration risk.
The credit risk associated with receivables from joint venture entities is monitored through management’s review of project
feasibilities and the Company’s ongoing involvement in the operations of those entities.
(c) Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities.
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate
amount of committed credit facilities. The Company manages liquidity risk by continuously monitoring forecast and actual cash
flows.
The Company is reliant on the availability of the financing facilities made available to it by its external provider.
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.55
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 5 5
Notes to the consolidated financial statements
30 June 2014 (continued)
Financial Risk Management (continued)
(i) Financing arrangements
The Company had access to the following undrawn borrowing facilities at the end of the reporting period:
Floating rate
- Expiring beyond one year (bank loans)
(ii) Maturities of financial liabilities
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
74,889
74,889
30,322
30,322
The table below analyses the Company’s financial liabilities and net 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 cash flows. For interest rate swaps the cash flows have been estimated using
forward interest rates applicable at the reporting date.
Contractual maturities of
financial liabilities
At 30 June 2014
Non-derivatives
Commitments
Trade payables
Bilateral loan facility
Total non-derivatives
Derivatives
Less than
6 months
$'000
6 - 12
months
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years
$'000
Over 5
years
$'000
11,175
32,912
2,245
46,322
11,950
2,000
2,245
16,195
15,340
-
4,491
19,831
-
-
69,085
69,085
Net settled (interest rate swaps)
(287)
(287)
(312)
(312)
(776)
(776)
(644)
(644)
At 30 June 2013
Non-derivatives
Commitments
Trade payables
Bilateral loan facility
Total non-derivatives
Derivatives
6,870
6,251
2,311
15,432
9,309
-
2,311
11,620
19,905
-
4,622
24,527
9,714
-
72,721
82,435
Net settled (interest rate swaps)
Total derivatives
(268)
(268)
(321)
(321)
(351)
(351)
-
-
(d) Fair value measurements
Interest rate swap contracts - cash flow hedges
Total
contractual
cash
flows
$'000
Carrying
amount
(assets)/
liabilities
$'000
38,465
34,912
78,066
151,443
-
34,912
69,085
103,997
(2,019)
(2,019)
(2,019)
(2,019)
45,798
6,251
81,965
134,014
3,401
6,251
70,355
80,007
(940)
(940)
(940)
(940)
-
-
-
-
-
-
-
-
-
-
-
-
The Company is party to derivative financial instruments in the normal course of business in order to hedge exposure to
fluctuations in interest rates in accordance with the Company's financial risk management policies. The gain or loss from
remeasuring is transferred to the profit and loss when the hedge is ineffective.
The "Multi-Option" bank facility for the Company bears an average variable interest rate of 7.80% (including line and facility
fees).
It is policy to protect part of the Bilateral Multi Option Facility of $155 million from exposure to fluctuating interest rates.
Accordingly the Company has entered into interest rate swap contracts under which it is obliged to receive interest at variable
rates and to pay interest at fixed rates. Interest payments for interest rate swaps are net settled every 30 days.
For the year ended 30 June 2014, the amount hedged remains at $70 million and is due to expire on 9 June 2015. During the
financial year the Company entered into a $90 million swap at 3.69% which will commence on 9 June 2015. At balance date
these contracts were liabilities with a fair value of $2.0 million (30 June 2013: $0.9 million).
P.56 VILL A WORLD LIMITED ANNUAL REPORT 2014
Notes to the consolidated financial statements
30 June 2014 (continued)
Financial Risk Management (continued)
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 5 6
The gain or loss from remeasuring the hedging instruments at fair value is recognised in other comprehensive income and
deferred in equity in the hedging reserve, to the extent that the hedge is effective. There is no ineffectiveness for the year ended
30 June 2014.
The fair value of interest rate swaps is the estimated amount that the entity would receive or pay to terminate the swap at the
balance sheet date, taking into account current interest rates, forward interest yield curves and the current creditworthiness of
the swap counterparties. The fair value of interest rate swaps are calculated as the present value of the estimated future cash
flows.
The carrying value of trade receivables and payables are assumed to approximate their fair values due to their short term
nature. The fair value of non-current borrowings and the bank guarantees equals their carrying amount, as their impact of
discounting is not significant.
Fair value hierarchy
All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy,
described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
(a)
(b)
(c)
quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices) (level 2), and
inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).
Valuation techniques
The fair value of financial instruments that are not traded in an active market (for example, over -the-counter derivatives) is
determined using valuation techniques. These valuation techniques maximise the use of observable market data where it is
available and rely as little as possible on entity specific estimates. The Company has determined that all significant inputs
required to fair value an instrument are observable, and therefore the instrument is included in level 2.
The following summarises the major methods and assumptions used in estimating the fair values of financial instruments
reflected in the tables:
Consolidated entity - at 30 June 2014
Liabilities
Financial liabilities at fair value through profit and loss:
Derivatives used for hedging
Total liabilities
Consolidated entity - at 30 June 2013
Liabilities
Financial liabilities at fair value through profit and loss:
Derivatives used for hedging
Total liabilities
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
-
-
Level 1
$'000
(2,019)
(2,019)
Level 2
$'000
-
-
(940)
(940)
-
-
(2,019)
(2,019)
Level 3
$'000
-
-
Total
$'000
(940)
(940)
25 Key management personnel (“KMP”) disclosures
(a) KMP compensation
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Consolidated
30-Jun-14
$
1,521,997
62,590
14,911
133,333
1,732,831
30-Jun-13
$
1,412,251
61,842
21,025
(140,773)
1,354,345
Detailed remuneration disclosures are provided in the remuneration report on pages 19 to 24.
(b) Equity instrument disclosures relating to KMPs
Options provided as remuneration and shares issued on exercise of such options
The grant of options over ordinary shares in Villa World Limited to the Chief Executive Officer and Managing Director, Craig
Treasure, was approved by shareholders at a general meeting on 22 July 2013. The issue of options is designed to provide long
term incentives for the Chief Executive Officer and Managing Director to deliver long term returns.
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.57
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 5 7
Notes to the consolidated financial statements
30 June 2014 (continued)
KMP disclosures (continued)
The Board also approved the issue of options over ordinary shares in Villa World Limited to other KMPs and staff. As at 30 June
2014, 4.0 million options have been issued in total to KMPs. Under the terms of the options granted to date the options will only
vest if the participating KMPs continue their respective service agreements with the Company for three years from the grant
date.
The assessed fair value of the options as at the grant date of 26 July 2013, is 10 cents per option. The fair value at grant date is
independently determined using a Binomial Option Price Valuation Model that takes into account the exercise price, the term of
the option, the impact of dilution, 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 include:
options are granted for no consideration and vested options are exercisable for a period of six months after vesting
exercise price: $1.25
(i)
(ii)
(iii) grant date: 26 July 2013
(iv) expiry date: 26 January 2017
(v)
share price at grant date: $1.25
(vi) expected price volatility of shares: 25%
(vii) expected dividend yield: 9%
(viii) risk free rate: 2.57%
The volatility assumption is representative of the level of uncertainty expected in the movements of the share price over the life
of the option. The historic volatility of the market price of the Company’s share and the mean reversion tendency of volatilities
are the two factors which are assessed when determining the expected volatility.
Set out below is a summary of the terms and conditions of each grant of options to KMPs under the Option Plan which will effect
remuneration in the future reporting period:
Grant Date Expiry Date
Exercise
Price
Granted as
compensation
Value of
options at
grant date1
Vesting
date
Chief Executive Officer
Craig Treasure
and Managing Director
Chief Operating Officer
Scott Payten
Paulene Henderson Chief Financial Officer
1The value of options at grant date is 10 cents per option and is calculated in accordance with AASB2 Share-based Payments.
26/07/2013 26/01/2017
26/07/2013 26/01/2017
26/07/2013 26/01/2017
3,000,000
750,000
250,000
$1.25
$1.25
$1.25
$300,000.00 26/07/2016
$75,000.00 26/07/2016
$25,000.00 26/07/2016
(c) Transactions with KMPs
From time to time, KMPs of the Company may purchase goods from the company. These purchases are on the same terms and
conditions as those entered into by other Company employees and are domestic in nature.
During the year, Paulene Henderson acquired a dwelling from Villa World Developments Pty Ltd. The amount of this transaction
was $587,000 after a 2.5% discount to market prices. This sale was within a normal employee relationship on terms and
conditions no more favourable than those which it is reasonable to expect would have been adopted if dealing with a Company
employee in the same circumstances.
(d) Loans to KMPs
For the financial year ended 30 June 2014, there were no loans to KMPs.
26 Contingencies
(i) Estimates of material amounts of contingent liabilities not provided for in the financial report
The Company has entered into agreements to indemnify certain employees and former employees against all liabilities that may
arise as a result of any claims against them by third parties as a result of the Company’s building activities. It is impractical to
estimate the amount that may arise from these arrangements.
A controlled entity has contractual arrangements that provide for liquidated damages under certain circumstances. It is
impractical to estimate the amount of any liability that may arise from these arrangements.
The Company has provided bank guarantees to the total of $11.0 million (30 June 2013: $9.7 million) to authorities and councils
in relation to certain works to be undertaken or maintained or in support of contractual commitments.
(ii) Estimates of material amount of contingent liabilities not provided for in the financial report
Silverstone, Tweed Heads
On 25 September 2013, Villa World Developments Pty Ltd (a subsidiary of Villa World Limited)(Villa World) was served with legal
proceedings commenced in the Federal Court of Australia in relation to alleged defects at a residential building known as
Silverstone, in Tweed Heads, New South Wales. The building was completed in 2009 comprising 27 units.
P.58 VILL A WORLD LIMITED ANNUAL REPORT 2014
Notes to the consolidated financial statements
30 June 2014 (continued)
Contingencies (continued)
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 5 8
The proceedings have been commenced by the Owners Corporation for the building, and by unit owners. No claim amount has
been specified.
This matter is complex and has been the subject of ongoing investigations by Villa World, and was included as a provision and
contingent liability in Villa World’s Financial Statements for the financial years ended 30 June 2012 and 30 June 2013 and the
current year. Villa World is defending the proceedings, and has also commenced cross-claims against certain other parties
seeking contribution and/or indemnity for any potential liability. The potential liability arising from this matter cannot presently
be reliably estimated, and is therefore identified as a contingent liability.
Provisions have been raised in the balance sheet based on best estimates of the ongoing costs (as opposed to the potential claim
amount) to be incurred in progressing this investigation and legal proceedings. Estimating this provision requires the exercise
of significant judgement and it is therefore possible that actual amounts may differ from this estimate.
The information in relation to provisions usually required by AASB137 Provisions, Contingent Liability and Contingent Assets is
not disclosed on the grounds that it is expected to prejudice the outcome of the potential litigation.
(iii) Contingent liabilities in respect of other entities
The Company has provided guarantees in respect of the loan facility for the Eynesbury joint venture. The special conditions of
the debt facility limit the maximum principal amount recoverable from the Company to 50% of the principal outstanding,
interest and reasonable costs. As at 30 June 2014, the Eynesbury facility (at 100%) was drawn to $10 million and $0.3 million of
bank guarantees were issued (30 June 2013: $27 million and $0.8 million bank guarantee).
27 Commitments
(a) Capital commitments
Villa World Developments Pty Ltd, a wholly owned subsidiary of Villa World Limited, assumed certain contractual obligations in
conjunction with the execution of Put and Call Option Agreements (the Agreements) in relation to the acquisition of individual
subdivided lots in property developments to the north of Brisbane and in Victoria.
The call option gives Villa World Developments Pty Ltd (or a third party) the option to purchase the lot(s) at a nominated price by
a sunset date. The put option gives the vendor the right to sell to the Company at a nominated price on expiry of the call option
sunset date. The potential total commitments remaining under the Agreements are $38.5 million. The commitments are
crystallised on registration of the land by the vendor and will be made available on a stage by stage basis. However, the
Agreements are severable by development stage and the commitments may be less than the total commitments under the
Agreements as outlined above.
At 30 June 2013, the commitments were $43.8 million. Of this balance $30.4 million crystallised, resulting in a balance of $13.4
million. During the year additional put and call arrangements have been entered into totalling $25.1 million. Commitments at 30
June 2014 totalled $38.5 million.
(b) Lease commitments
(i) Non-cancellable operating leases
The Company has a lease on office space under a non-cancellable operating lease expiring 8 January 2019. The lease has
varying terms, escalation clauses and renewal rights. On renewal, the terms of the lease are renegotiated.
Commitments for minimum lease payments in relation to non-cancellable operating leases
are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
233
965
20
1,218
226
1,029
111
1,366
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.59
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 5 9
Notes to the consolidated financial statements
30 June 2014 (continued)
28 Subsidiaries
(a) Significant investments in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following principal subsidiaries in
accordance with the accounting policy described in note 1(d): All subsidiaries are incorporated in Australia.
Name of entity
Country of
incorporation
Class of shares
Equity holding
Parent entity
Villa World Limited
Villa World Developments Pty Ltd
Villa World (Vic) Pty Ltd
GPDQ Pty Ltd
Hervey Bay (JV) Pty Ltd
Cornell's Hill Pty Ltd
Cotton Ventures Pty Ltd
Westminster Street Developments Pty Ltd
Villa World Redlands Pty Ltd
29 Share-based payments
(a) Villa World Limited Option Plan
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2014
%
2013
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
The Company operates long term incentives (“LTIs”) in the form of a Villa World Limited Option Plan, approved by shareholders
at the Company’s AGM on 30 October 2013. For options that have been issued to date, the options vest at the completion of three
years’ service from the grant date. Under the terms of the options granted to date, if the participating employee leaves the
Company before the vesting date, options are cancelled, although the Board may waive this restriction at its discretion.
The fair value at grant date is independently determined using a Binomial Option Price Valuation Model that takes into account
the exercise price, the term of the option, the impact of dilution, 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 volatility assumption is representative of the level of uncertainty expected in the movements of the share price over the life
of the option. The historic volatility of the market price of the Company’s shares and the mean reversion tendency of volatilities
are the two factors which are assessed when determining the expected volatility.
Set out below is a summary of the terms and conditions of each grant of options under the plan which will effect remuneration
in the future reporting period:
Exercise
Price
Options granted to KMPs 26/07/2013 26/01/2017 $1.25
26/07/2013 26/01/2017 $1.25
Options granted to
05/11/2013 05/05/2017 $1.60
senior employees
17/02/2014 11/08/2017 $1.60
Expiry
Date
Grant Date
Value of
options at
grant
date1
Granted as
compensation
Vesting
date
4,000,000 $400,000 26/07/2016
500,000 $50,000 26/07/2016
250,000 $67,500 05/11/2016
150,000 $61,500 11/02/2017
Expected
price
volatility
of shares
25%
25%
30%
30%
Expected
dividend
yield
Risk free
interest
rate
9.0%
9.0%
5.5%
7.1%
2.57%
2.57%
3.15%
3.10%
1The options are valued at grant date and calculated in accordance with AASB2 Share-based Payments
(b) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit
expense were as follows:
Options issued to KMPs
Options issued to senior employees
Fair value of cash settled share based payments for KMPs and senior employees
Consolidated
30-Jun-14
$'000
133
41
-
174
30-Jun-13
$'000
-
-
(141)
(141)
P.60 VILL A WORLD LIMITED ANNUAL REPORT 2014
Notes to the consolidated financial statements
30 June 2014 (continued)
30 Events occurring after the reporting period
Final Dividend
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 6 0
On 26 August 2014 the Board declared a fully franked final dividend of 9.0 cents per share. The ex-dividend date is 1 September
2014 and the record date for this dividend is 3 September 2014. Payment will be made on 30 September 2014.
As at 30 June 2014, an amount of $16.7 million is held as franking credits in the Company.
Investment in the Eynesbury Joint Venture
As previously disclosed, the Company has entered into unconditional contracts for the sale of the Eynesbury project (in which
the Company holds a 50% interest). On 27 June the first tranche (comprising part of the land and the golf course business) was
completed at a sale price of $30 million plus GST.
As at 30 June 2014 the equity accounted investment in the Eynesbury Joint Venture was $18.0 million. On 7 July 2014, $9 million
was repaid to each Joint Venture partner, the investment reducing to $9 million.
Acquisition - Victoria
On 14 July 2014, Villa World Limited announced that it had entered into Put & Call Option in relation to a site located at
Greenvale in the northern suburbs of Melbourne, well serviced by key infrastructure and amenities.
The land owner is required to deliver completed vacant lots, for the Company to construct dwellings and sell house and land
packages. The transaction totals $26.2 million (including GST) and is to be paid progressively to the land owner from the
settlement proceeds of the house and land sales.
The site is expected to yield approximately 131 residential lots, comprising traditional Villa World housing designs on a variety
of lot sizes.
31 Reconciliation of profit after income tax to net cash inflow from operating activities
Profit for the year
Depreciation and amortisation
Capitalised interest and fees
Borrowing costs
Share of (gain) / loss from associate
Impairment of investment in equity accounted investments
Impairment of development land
Change in operating assets and liabilities:
(Increase) / decrease in trade debtors
Decrease / (increase) in inventories
(Decrease) / increase in trade creditors
(Increase) / decrease in deferred tax assets
Decrease / (increase) in other operating assets and liabilities
Increase / (decrease) in other provisions
Net cash inflow / (outflow) from operating activities
32 Segment information
(a) Description of segments
Consolidated
30-Jun-14
$'000
19,066
450
2,189
364
(3,767)
-
(108)
10,038
(88,844)
27,022
3,090
80
4,119
(26,301)
30-Jun-13
$'000
(13,493)
377
3,105
344
17,435
627
10,149
(7,886)
11,435
(5,379)
(406)
765
93
17,166
Management has determined the segments based on the reports reviewed by the executive committee that are used to make
strategic decisions.
The Company and its controlled entities develop and sell residential land and buildings predominately in Queensland, New
South Wales and Victoria. The individual operating segments of each geographical area have been aggregated on the basis that
they possess similar economic characteristics and are similar in nature of the product and production processes.
The committee considers the business from both a product, and within Australia, a geographical perspective and has identified
two reportable segments:
–
–
Property development and construction - Queensland and New South Wales.
Property development - Victoria.
The executive team considers a range of information relating to the reportable segments including:
–
–
–
Historical results of the segment, using both revenue and gross margin.
Future forecasts of the segment for the remainder of the year.
Key risks and opportunities facing the segments.
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.61
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 6 1
Notes to the consolidated financial statements
30 June 2014 (continued)
Segment information (continued)
(b) Segment information provided to the strategic executive committee
(i) Segment Revenue
The revenue from external parties reported to the executive committee is measured in a manner consistent with that in the
income statements. Revenues from external customers are derived from the sale of residential house and land products.
(ii) Segment gross margin
The executive committee assesses the performance of the operating segments based on a measure of gross margin. This
measurement basis consists of revenue less land, development, construction and sundry costs. It excludes the effects of
non-recurring expenditure from the operating segments such as fair value impairments on inventory and other assets.
The segment information provided to the executive committee for the reportable segments for the year ended 30 June 2014 is
as follows:
From continuing operations
Segment revenue from land development, residential building and construction
contracts
Queensland and New South Wales
Victoria
Total segment revenue from land development, residential building and construction
contracts
Segment cost of land development, residential building and construction contracts
Queensland and New South Wales
Victoria
Total segment cost of land development, residential building and construction
contracts
Segment gross margin
Queensland and New South Wales
Victoria
Total segment gross margin
Consolidated
30-Jun-14
$'000
30-Jun-13
$'000
202,242
27,208
143,224
26,172
229,450
169,396
154,610
18,018
104,303
18,098
172,628
122,401
47,632
9,190
56,822
38,921
8,074
46,995
Segment assets and liabilities are not directly reported to the executive committee when assessing the performance of the
operating segments and are therefore not relevant to the disclosure.
P.62 VILL A WORLD LIMITED ANNUAL REPORT 2014
V I L L A W O R L D A N N U A L R E P O R T 2 0 1 4 / / P 6 2
Directors' declaration
30 June 2014
In the Directors' opinion:
(a)
the financial statements and notes set out on pages 34 to 61 are in accordance with the Corporations Act 2001,
including:
(i)
(ii)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements, and
giving a true and fair view of the consolidated entity's financial position as at 30 June 2014 and of its
performance for the year ended on that date, and
(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.
Note 1(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of Directors.
Craig Treasure
Chief Executive Officer and Managing Director
Gold Coast
26 August 2014
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.63
Ernst & Young Services Pty Limited
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Auditor’s Independence Declaration to the Directors of Villa World
Limited
In relation to our audit of the financial report of Villa World Limited for the financial year ended 30
June 2014, to the best of my knowledge and belief, there have been no contraventions of the auditor
independence requirements of the Corporations Act 2001 or any applicable code of professional
conduct.
Independent auditor's report to the members of Villa World Limited
Report on the financial report
We have audited the accompanying financial report of Villa World Limited, which comprises the
consolidated balance sheet as at 30 June 2014, the consolidated income statement, the consolidated
statement of comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, notes comprising a summary of significant
accounting policies and other explanatory information, and the directors' declaration of the consolidated
entity comprising the company and the entities it controlled at the year's end or from time to time during
the financial year.
Ernst & Young
Directors' responsibility for the financial report
The directors of the company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal controls as the directors determine are necessary to enable the preparation of the financial
report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors
also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that
the financial statements comply with International Financial Reporting Standards.
Ric Roach
Partner
26 August 2014
Auditor's responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor's judgment, 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 controls 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 controls. 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.
Independence
In conducting our audit we have complied with the independence requirements of the Corporations Act
2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a
copy of which is included in the directors’ report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
P.64 VILL A WORLD LIMITED ANNUAL REPORT 2014
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Auditor’s Independence Declaration to the Directors of Villa World
Limited
Opinion
In relation to our audit of the financial report of Villa World Limited for the financial year ended 30
June 2014, to the best of my knowledge and belief, there have been no contraventions of the auditor
independence requirements of the Corporations Act 2001 or any applicable code of professional
conduct.
In our opinion:
a.
the financial report of Villa World Limited is in accordance with the Corporations Act 2001,
including:
i
giving a true and fair view of the consolidated entity's financial position as at 30 June 2014
and of its performance for the year ended on that date; and
ii
Ernst & Young
complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
b.
the financial report also complies with International Financial Reporting Standards as disclosed in
Note 1.
Report on the remuneration report
Ric Roach
Partner
26 August 2014
We have audited the Remuneration Report included in pages 19 to 24 of the directors' report for the year
ended 30 June 2014. The directors of the company are responsible for the preparation and presentation
of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Villa World Limited for the year ended 30 June 2014,
complies with section 300A of the Corporations Act 2001.
Ernst & Young
Ric Roach
Partner
Brisbane
26 August 2014
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.65
ASX additional information
Additional information requested by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in
this report are set out below:
Shareholdings (as at 18 August 2014)
The following holds were listed in the register of substantial shareholders:
CVC Limited
John Leaver and related interests
Contango Asset Management
LHC Capital Partners
Quest Asset Partners
Distribution of shareholders (as at 18 August 2014)
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
No of shares held
15,185,484
5,203,330
5,310,845
5,525,856
5,485,471
Total holders
638
1,492
444
520
67
3,161
The total number of shareholders with less than a marketable parcel of 232 shares is 83.
Unquoted equity securities:
Options issued under the Villa World Limited Option Plan to take up ordinary shares, as part of an employee incentive plan, as
at 18 August 2014 is 4,900,000.
Classes of units and voting rights
As at 30 June 2014 there were 3,127 shareholders (30 June 2013: 3,289). The voting rights attaching to the shares, as set out
in section 253C of the Corporations Act were:
Subject to any rights or restrictions for the time being attached to any class or classes of share:
(a)
(b)
at an adjourned meeting the holders with voting rights who are present either in person or by proxy constitute a quorum
and are entitled to pass the resolution; and
on a show of hands every person present who is a shareholder has one vote and on a poll every present in person or by
proxy or attorney has one vote for each share held.
Options:
There are not voting rights attached to the options.
For details of registered office and share registry details refer to inside front cover – Shareholder Information.
P.66 VILL A WORLD LIMITED ANNUAL REPORT 2014
TOP 20 SHAREHOLDERS (AS AT 15 AUGUST 2014)
Name
NATIONAL NOMINEES LIMITED
CVC LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
UBS NOMINEES PTY LTD
WENOLA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
CITICORP NOMINEES PTY LIMITED
LEAGOU FUNDS MANAGEMENT PTY LIMITED
BRAZIL FARMING PTY LTD
BNP PARIBAS NOMS PTY LTD
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
INVIA CUSTODIAN PTY LIMITED
SANDHURST TRUSTEES LTD
CVC LIMITED
ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD
HORRIE PTY LTD
DEBUSCEY PTY LTD
CRAIG G TREASURE PTY LTD
BRISPOT NOMINEES PTY LTD
Units % of Units
14,764,673
14,508,964
15.76
15.49
7,353,343
6,327,280
3,700,100
2,018,056
1,845,616
1,618,570
1,260,294
1,164,654
1,145,086
1,026,153
960,590
881,797
676,520
639,806
610,000
571,803
550,000
512,707
7.85
6.76
3.95
2.15
1.97
1.73
1.35
1.24
1.22
1.10
1.03
0.94
0.72
0.68
0.65
0.61
0.59
0.55
Totals: Top 20 holders of FULLY PAID ORDINARY SHARES (TOTAL)
62,136,012
66.34
This page is left blank intentionally.
VILL A WORLD LIMITED ANNUAL REPORT 2014 P.67
P.68 VILL A WORLD LIMITED ANNUAL REPORT 2014
This page is left blank intentionally.
SHAREHOLDE RS INFORMATION
VILLA WORLD LIMITED
Villa World Limited ABN 38 117 546 326
Level 1 Oracle West, 19 Elizabeth Avenue, Broadbeach QLD 4218
Mailing address: PO Box 1899, Broadbeach QLD 4218
Telephone: +61 7 5588 8888
Facsimile: +61 7 5588 8800
Website: www.villaworld.com.au
Email: info@villaworld.com.au
Shareholder information and enquiries
All enquiries and correspondence regarding shareholdings should
be directed to Villa World’s share registry provider:
Computershare Investor Services Pty Limited
Mailing address: GPO Box 2975EE, Melbourne VIC 3000
Telephone: 1300 651 684 or +61 3 9415 4000 (outside Australia)
Fax: +61 3 9473 2500 (within & outside Australia)
Website: www.computershare.com.au
Email: web.queries@computershare.com.au
Villa World Info line
Inside Australia: 1300 552 434
Outside Australia: +61 7 5588 8851
Company Secretary: Paulene Henderson
ANNUAL
FINANCIAL REPORT
30 June 2014
VILL A WORLD LIMITED
ABN 38 117 546 326
Villa World Limited
ABN 38 117 546 326
Level 1 Oracle West
19 Elizabeth Avenue, Broadbeach QLD 4218
PO Box 1899, Broadbeach QLD 4218
+61 7 5588 8888
www.villaworld.com.au
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