ariadne australia limited annual report · 2017-04-05 · chief executive report financial ariadne...
TRANSCRIPT
Corporate Information
DirectorsMr David Baffsky, AO (Chairman)
Mr Kevin Seymour, AM (Deputy Chairman)
Mr Maurice Loomes (Director)
Mr John Murphy (Director)
Dr Gary Weiss (Executive Director)
Chief Executive OfficerMr Murray Boyte
Company SecretaryMr Natt McMahon
Registered OfficeLevel 20, 39 Martin Place
Sydney NSW 2000
Telephone: (02) 8227 5500
Facsimile: (02) 8227 5511
Principal Place of BusinessLevel 20, 39 Martin Place
Sydney NSW 2000
Telephone: (02) 8227 5500
Facsimile: (02) 8227 5511
Share RegisterComputershare Investor Services Pty Ltd
GPO Box 523
Brisbane QLD 4001
Telephone: (07) 3237 2100 or 1300 552 270
www.computershare.com
SolicitorsMcCullough Robertson
BankersANZ Banking Group Limited
AuditorsErnst & Young
Internet Addresswww.ariadne.com.au
Contents
Chairman’s Statement 2
Chief Executive’s Report 3
Corporate and Social Responsibility 5
Corporate Governance 6
Directors’ Report 12
Auditor’s Independence Declaration 22
Income Statement 23
Statement of Comprehensive Income 24
Balance Sheet 25
Statement of Changes in Equity 26
Statement of Cash Flows 27
Notes to Financial Statements 28
Directors’ Declaration 72
Independent Audit Report 73
ASX Additional Disclosures 75
Ariadne Australia Limited • Annual Report 2012 | 1
Chairman’s Statement
2 | Ariadne Australia Limited • Annual Report 2012
DEAR ShAREholDERS
As we have high expectations, the 2012 result was somewhat disappointing. However it does reflect the realities of the challenging environments and
reinforces our focus on costs and recurrent income whilst restoring value to existing assets and creating future value.
We have moved the accounting and secretarial functions of the Head Office to Sydney and continue to focus on overhead costs generally.
The Chief Executive Officer’s report includes a detailed review which provides an understanding of the businesses and assets in which the Company is
involved and the major events during the year.
Since the end of the financial year, we have participated in a bid for Clearview Wealth Limited which has been widely reported in the media. We regard
this as a very strategic and high growth opportunity for the Company.
We continue to review increasing numbers of investment opportunities but very few warrant serious consideration.
On behalf of the Board, I would like to extend my utmost appreciation to every member of our staff and management. It has been a difficult year,
particularly with the move to Sydney, and I am very grateful for their continued and consistent passion, loyalty and commitment.
I wish to also thank my fellow Board members for their wise counsel and support during the year. The Company is fortunate indeed to have such a
breadth of experience.
David Z Baffsky Ao Chairman
Chief Executive Report
FINANCIAlAriadne Australia Limited (“Ariadne”) result for the year ended 30 June 2012, was an after tax profit attributable to members of $5,202,000
(2011: $8,067,000). The 2011 result included a deferred tax benefit of $1,529,000. Ariadne’s pre-tax profit of $5,599,000 was 14.3% below
the pre-tax profit of $6,538,000 reported for the year ended 30 June 2011.
Net operating cash flow for the year was $5,191,000 (2011: $8,141,000).
At year end, net tangible assets per share were 29.27 cents. Cash reserves were $15,171,000, representing 7.4 cents per share. The Ariadne
balance sheet remains strong, with a shareholders’ funds to total asset’s ratio of 88.8%. A return on equity of 7.3%, reflects a policy of maintaining a
conservative balance sheet in an uncertain economic environment, whilst restoring value to existing investments.
CAR PARkINGThe car parking group recorded a profit for the full year of $6,945,000 (2011: $8,550,000). The result comprises Ariadne’s 50% shareholding in
Secure Parking Pty Ltd (“Secure”), and two Brisbane-based car park leases held by Ariadne. The Secure contribution to the result was $5,050,000
(2011: $5,826,000). The result was 13% below that for the prior year, which reflected investment and development losses in new markets in New
Zealand, Western Australia and the United Kingdom. In the second half of the financial year, trading was particularly difficult in the key Eastern Seaboard
states, where contraction of employment in the CBD areas, a poor retail sales environment and a cautious approach to spending by consumers all had
an impact on volumes and yields. We expect market conditions to remain challenging for the foreseeable future.
Highlights of the year for Secure included the awarding of car park management contracts for Brisbane and Wellington airports. In the United Kingdom,
Secure entered into a management contract for the Westfield Stratford retail centre in east London.
The two Ariadne leased car parks located in the Brisbane CBD performed well in a relatively strong retail precinct anchored by the Queen Street Mall,
Queen’s Plaza and an active Government and Courts area in Tank Street. Brisbane, however, is not immune to the economic downturn, and in the latter
part of the financial year weaker trading conditions prevailed as a consequence of negative retail trading sentiment and further employment cuts.
INvEStmENtS The Investment division reported a profit of $1,991,000 (2011: $1,062,000). During the period Ariadne has continued to maintain a high level of cash
reserves. This approach has been prudent given the uncertain financial markets.
Ariadne increased its shareholding in Freshxtend International Pty Ltd (“Freshxtend”) to 54%. Freshxtend’s primary investment is its 17% shareholding
in NatureSeal group, a food technology shelf life extension business in the fresh cut produce area. NatureSeal is a global leader in the provision of
antioxidants for food applications and continues to expand its business both by product and geographically. NatureSeal continues to perform well
globally with increasing sales in the US and the Asia-Pacific region. Freshxtend is now generating excellent dividend flow to its shareholders.
On 29 June 2012, Ariadne acquired the 50% shareholding held by Watpac Limited in StayMint Pty Ltd (“StayMint”), trading as Mint Resorts and
Apartments. StayMint currently operates accommodation properties in Brisbane, South East Queensland and Melbourne. Continued rationalisation of
the property portfolio facilitated a further reduction in debt which will continue. StayMint expanded its activities to incorporate a new serviced apartment
property in Melbourne (Rhapsody).
PRoPERty Ariadne owns two marina businesses in NSW, located in Batemans Bay and Port Macquarie. The costs related to future development options and
exit scenarios for these marinas have been expensed. Considerable time and effort is being directed to increasing net income and adding value to
these projects.
The Port Macquarie redevelopment and the complexities surrounding the operations and application process for Batemans Bay have resulted in modest
losses being reported during the period for these activities.
Ariadne Australia Limited • Annual Report 2012 | 3
Chief Executive Report
Orams Marine Village (which is 50% owned by Ariadne) had an improved trading result. However, after interest and hedging costs, it reported a small
loss. Demands for marine services in the domestic market remained soft and even though the upgraded slipway was fully operational, activity levels
did not meet expectations. The super yacht refit business is showing strengthening signs and the major tenant, Orams Marine Services, has a strong
forward workload for the coming season. An in-depth review of operations resulted in a management change and the appointment of a new General
Manager. An improved result is expected in the current financial year under the new management with strong cost control and initiatives to improve
revenue and restructure borrowings. The Board remains confident that this investment will increase its profitability and is well placed to capitalise on
the future development of the Western Viaduct area of Auckland and the growth of the general marine industry, which enjoys an international reputation
for product quality, skill base and competitiveness.
DIvIDENDSThe Directors declared a final Ordinary dividend of 0.5 cents per share, in relation to the 2012 financial year, with payment to be made on
27 September 2012. In February 2012, Ariadne declared an interim dividend of 0.5 cents. Total dividends relating to the 2012 year were 1.0 cents.
outlookAriadne will focus on managing its assets to maximise cash flow, returns on equity capital employed and asset values. Ariadne continues to analyse
new investment opportunities but will adopt a prudent approach.
murray R Boyte Chief Executive Officer
4 | Ariadne Australia Limited • Annual Report 2012
Corporate and Social Responsibility
Ariadne aims to uphold sustainable investment and development practices in all of its operations and activities.
Ariadne manages its corporate and social responsibility for all of its operating activities through a careful and considered approach.
Ariadne Australia Limited • Annual Report 2012 | 5Ariadne Australia Limited • Annual Report 2012 | 5
Corporate Governance
The Board of Directors (“the Board”) of Ariadne Australia Limited (“Ariadne” or “the Company”) is responsible for the corporate governance practices
of Ariadne and its controlled entities (“the Group”). The Board guides and monitors the business and affairs of Ariadne on behalf of the shareholders
by whom they are elected and to whom they are accountable. The Board supports the principles developed by the Australian Securities Exchange
(“ASX”) Corporate Governance Council (“the Council”) as a basis for enhancing the credibility and transparency of our capital markets.
Principle 1. Lay solid foundations for management and oversight
Principle 2. Structure the Board to add value
Principle 3. Promote ethical and responsible decision making
Principle 4. Safeguard integrity in financial reporting
Principle 5. Make timely and balanced disclosure
Principle 6. Respect the rights of shareholders
Principle 7. Recognise and manage risk
Principle 8. Remunerate fairly and responsibly
The Board believes that a company’s corporate governance policies should be tailored to account for the size and structure of the company, risks
associated with the company’s operations and the company’s inherent strengths and weaknesses. The ASX concurs with this view and allows
companies to explain deviations from the Council’s recommendations, which have been recently revised. Areas where Ariadne has deviated from
the Council’s recommendations are discussed below, but the Board believes the areas of non-conformance do not impact on the Group’s ability
to operate with the highest standards of Corporate Governance. Any major change in the Company’s operation will result in a review of the
Company’s Corporate Governance policies.
1. FuNCtIoNS oF BoARD AND mANAGEmENt
The Board is responsible to shareholders for the Group’s corporate governance practices, and for the direction and oversight of the Company’s
businesses on behalf of the shareholders. The Board’s responsibilities include:
• reviewing and determining the Group’s strategic direction and operational policies;
• establishing goals for management and monitoring the achievement of these goals;
• reviewing and approving the Group’s Business Plan;
• appointing and remunerating the Chief Executive Officer and Executive Management team;
• approving all significant business transactions including acquisitions, divestments and property developments;
• monitoring business risk exposures and risk management systems;
• approving and monitoring financial and other external reporting;
• approving changes to the Group’s capital structure;
• considering approaches made to the Company in respect of takeovers;
• reporting to shareholders; and
• promoting ethical conduct.
The Board delegates responsibility for the implementation of strategy and administration of day-to-day business to the Chief Executive Officer and
other members of the Company’s Executive Management team. The Executive Management team currently comprises the Chief Executive Officer,
the Chief Financial Officer and the Investment Officer.
6 | Ariadne Australia Limited • Annual Report 2012
Corporate Governance
The Executive Management team is responsible for:
• ensuring business development and other activities are conducted in accordance with the Group’s overall business strategy;
• managing the Group’s investments, operations and other activities to maximise returns to shareholders;
• informing the Board on a regular basis of the status of all investments and the performance of all company assets;
• managing relationships with investors, bankers and financial community;
• approving capital expenditure and business transactions;
• planning in accordance with the financial control guidelines which govern the allocation and management of financial resources throughout
the Group;
• ensuring that appropriate financial and operational reporting is provided to the Board on a regular basis; and
• establishing and monitoring the Group’s risk management framework to ensure that policies, guidelines and controls are effective in reducing
the Group’s operational and financial exposures to an acceptable level.
Evaluations of performances of the Chief Executive Officer and the Executive Director are undertaken each year by the Board. The Chief Financial
Officer’s performance and the Investment Officer’s performance are evaluated by the Chief Executive Officer annually, in consultation with the Board.
2. StRuCtuRE oF thE BoARD
The Board comprises the Chairman and the other independent and non-independent Directors. Four of the five directors of the Company are
non-executive. The size and composition of the Board is formulated to provide an appropriate range of experience, skills, knowledge and perspective
to enable it to appoint, guide and supervise a high standard of management for the Company’s business. The names, skills, experience and expertise
of each director of the Company are set out in the Directors’ Report and are included on the Ariadne website.
Directors of Ariadne are considered to be independent when they do not participate in day-to-day management activity and are free from any business
or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their independent
judgement. In the context of director independence, “materiality” is considered from both the Company and individual director perspective. The
determination of materiality requires consideration of both quantitative and qualitative elements. The Board generally considers an item to be material
if it is greater than 5% of the appropriate base amount. Qualitative factors are also considered, including whether a relationship is strategically
important, the competitive landscape, the nature of the relationship and the contractual or other arrangements governing it.
In accordance with this definition of independence, Mr D Baffsky, AO the current Chairman and Mr M Loomes are considered to be independent
directors. Mr K Seymour, AM and Mr J Murphy in their capacity as directors, represent the interests of significant shareholders. However, the materiality
of these shareholdings does not impact on the ability of these directors to act on an objective and independent basis and consequently
they are also considered to be independent directors. The majority of the Board is therefore comprised of independent directors as is recommended
by the Council. Dr G Weiss is not an independent director by virtue of his executive role and his significant shareholding in the Group as described
in the Annual Report.
Ariadne Australia Limited • Annual Report 2012 | 7
Corporate Governance
The Board has adopted the following measures to ensure that independent judgment is achieved and maintained in respect of its decision-making
processes:
• Directors are entitled to seek independent professional advice at the Company’s expense, subject to the approval of the Board;
• Directors having a conflict of interest in relation to a particular item of business must absolve themselves from discussion or any decision
on the topic; and
• Non-independent directors confer on a needs basis.
The Board has established a clear distinction between the roles of the Chairman and the Chief Executive Officer, to whom the Board has delegated
responsibility for the execution of strategy and administration of day-to-day business.
Due to the size and structure of the Board, a Nominations Committee has not been established as recommended under ASX recommendation 2.4.
All directors may make recommendations to the Board regarding the membership of the Board, including proposed new appointments. However, all
directors must agree unanimously on any new director appointments. In addition, Ariadne’s Constitution provides that no director who is not a managing
director may hold office without re-election beyond the third annual general meeting following the meeting at which the director was last elected or
re-elected. In addition, any new director appointed by the Board during the year is automatically offered for re-election at the next annual general
meeting. The Board believes that these alternative procedures are appropriate to ensure the Board adequately discharges its responsibilities and duties.
In accordance with the Council’s recommendation 2.5, the Company has induction procedures in place to allow new directors to participate fully
and actively in Board decision making at the earliest opportunity. Board members are also provided comprehensive information on a regular basis by
the Executive Management team so that they can discharge their Director responsibilities effectively. The Company Secretary coordinates the timely
completion and dispatch of such materials to the Board.
In consultation with all non-involved directors, the Chairman is responsible for evaluating the performance of the individual members of the Board,
its committees and the Company Secretary.
3. EthICAl AND RESPoNSIBlE DECISIoN-mAkING
The Board encourages the highest standards of ethical conduct by all Directors and employees of the Group. The Board has adopted a Code of Ethics
that sets out the principles and standards with which all Group Officers and employees are expected to comply in the performance of their respective
functions. A summary of the Code is included below:
• comply with the law;
• act honestly and with integrity;
• reduce the opportunity for situations to arise which result in divided loyalties or conflicts of interest;
• use Ariadne’s assets responsibly and in the best interests of Ariadne shareholders; and
• be responsible and accountable for their actions.
The Code of Ethics is integrated into companywide management practices. Directors, Executives and employees are all made aware of the Company’s
Code of Ethics upon commencement of employment and any updates as and when they occur.
Executive Management immediately investigates possible failures to comply with the principles of ethical and responsible conduct, employing the use
of third party expertise where necessary. The appropriate level of disciplinary action is applied where departures from these principles are confirmed.
The Company recognises the benefits arising from employees, and the importance of benefiting from all available personnel. The Company will promote
a diverse environment which is conducive to the appointment of well qualified personnel so there is appropriate diversity which will assist
with maximizing the achievement of the goals of the Company. The Board has a commitment to promoting a corporate culture that is supportive of
diversity and encourages the transparency of Board processes, review and appointment of Directors. Given the size of the Company and the number
of employees, the Board has decided not to develop and implement any strategic measures at this point in time.
8 | Ariadne Australia Limited • Annual Report 2012
4. INtEGRIty oF FINANCIAl REPoRtING
Ariadne’s Chief Executive Officer and Chief Financial Officer declare in writing to the Audit and Risk Management Committee (“ARMC”) that the
consolidated financial statements of Ariadne Australia Limited and its controlled entities for each financial year present a true and fair view, in all
material respects, of the Group’s financial condition and operational results and are in accordance with accounting standards.
The ARMC operated throughout the year with the primary objective to assist the Board in fulfilling the Board’s responsibilities relating to the accounting,
reporting and financial risk management practices of the Company.
In fulfilling this objective, the ARMC meets at least two times each year. The main duties and responsibilities as documented in the Committee
Charter include:
• review and consideration of statutory compliance matters, including various taxation considerations;
• review of the annual and half-yearly financial reports;
• recommend to the Board nominations for appointment as external auditors;
• review the scope of the audit, the level of audit fees and the performance of the external auditors;
• liaison with external auditors, review of audit planning and consideration of audit results; and
• evaluation of the adequacy and effectiveness of the Company’s administrative, operating and accounting policies and controls through
active communication with operating management and the external auditors.
The ARMC comprises non-executive and independent directors. Mr J Murphy, Mr M Loomes and Mr D Baffsky, AO are members of the ARMC and
Mr J Murphy acts as Chairman. Their experience and skills outlined in the Directors’ Report provide a high level of financial technical expertise to
the ARMC.
A copy of the Audit and Risk Management Committee charter is available on the Company’s website.
5. CoNtINuouS DISCloSuRE to ASX
Procedures are in place to identify matters that are likely to have a material effect on the price of the Company’s securities and to ensure those matters
are notified to the ASX in accordance with the Group’s Listing Rule disclosure requirements. The Chief Executive Officer and Chief Financial Officer are
responsible for monitoring the Company’s activities in light of its continuous disclosure policy and where necessary discussing disclosure obligations
with the Board. The Company Secretary is responsible for all communications with the ASX.
The Group’s policies in this regard are not formally documented as is recommended under the Council’s recommendation 5.1. However, the Board is
comfortable that the Chief Executive Officer and Chief Financial Officer will ensure all disclosure requirements are discussed with the Board in a timely
manner. This view is reflective of the size of the Group’s operations. Unless specifically authorised by the Chairman, no announcements are made by
the Company Secretary without the prior review and approval of the Board.
All communications with external stakeholders in respect of sensitive company information is subject to relevant safeguarding and confidentiality
procedures. These communications are undertaken in light of continuous disclosure requirements of the ASX and the broad principle of ensuring the
market is fully informed of price sensitive information.
Corporate Governance
Ariadne Australia Limited • Annual Report 2012 | 9
Corporate Governance
6. CommuNICAtIoN wIth ShAREholDERS
The Group encourages communication with shareholders and other stakeholders in an open, regular and timely manner. Mechanisms employed include:
• regular shareholder communications such as half-yearly reports and the Annual Report;
• financial results presentations at the Company’s Annual General Meeting (“AGM”);
• shareholder access to communications through the ASX announcements platform and the Ariadne website; and
• utilising the Company’s share registry service provider, to facilitate the electronic delivery of reports and other information to shareholders.
The Board encourages full participation of shareholders at the AGM to ensure a high level of accountability and understanding of the Group’s historical
results and future strategy and goals. The Group’s auditors are also required to attend the AGM and are available to shareholders should they have
any questions.
7. RISk mANAGEmENt
The Board is responsible for oversight of the Group’s risk management and internal control framework. The ARMC assists the Board in fulfilling
its responsibilities in this regard by reviewing the financial and reporting aspects of the Group and its risk management and control framework.
A framework designed to ensure that the Group’s risks are identified and that appropriate internal controls are in place and functioning effectively
is in place.
Responsibility for control and risk management is delegated to the appropriate level of management within the Group with the Chief Executive Officer
and Chief Financial Officer having ultimate responsibility to the Board and the ARMC for the Group’s risk management and internal control activities.
Current arrangements put in place by the Board to monitor risk management include:
• regular reporting to the Board in respect of operations and the financial position of the Group;
• reports by the Chairman of the ARMC and circulation to the Board of the minutes of each meeting held by this Committee;
• presentations made to the Board or committees of the Board throughout the year by appropriate members of the Group’s management team
(and/or independent advisers, where necessary) on the nature of particular risks and details of the measures which are either in place or can
be adopted to manage or mitigate the risk; and
• any director may request that operational and project audits be undertaken by management.
In conjunction with the ARMC, the Executive Management team has a risk management framework for the Group that includes a documented
enterprise risk management framework. While the Directors believe the Council’s recommendations 7.1 and 7.2 have already been met, the Board
understands the importance of risk management to the Group and its shareholders and continues to enhance this component of the Group’s corporate
governance practices as appropriate to the Group’s activities.
10 | Ariadne Australia Limited • Annual Report 2012
8. REmuNERAtIoN
The Company’s policies relating to directors’ and executives’ remuneration are set out in the Group’s Remuneration Report, which forms part of the
Director’s Report. The Ariadne Executive Share Option Plan and the Ariadne Employee Share Plan were both approved by shareholders at the 1998 AGM.
Due to the size of the Group and current number of employees, the Board acts as the Remuneration Committee. Given the small number of employees,
the Company therefore believes it has complied with the intention of Council’s recommendation 8.2.
It is the Company’s objective to benefit from the retention of a high quality Board and Executive Management team by remunerating Directors and
key Executives fairly and appropriately with reference to relevant employment market conditions. To assist in achieving this objective, the nature and
amount of Executive Directors’ and Officers’ emoluments are linked to the Company’s financial and operational performance. The expected outcomes of
the remuneration structure are:
• Retention and motivation of key executives;
• Motivate executives to pursue the long term growth and success of the Company;
• Attraction of quality management to the Company; and
• Performance incentives which allow Executives to share the rewards of the success of the Group.
The Board exercises discretion in relation to the payment of bonuses and options, having regard to the overall performance of Ariadne and the
performance of the employee during the period.
The level of remuneration of Non-Executive Directors is approved by shareholders, as distinct from Executives, whose remuneration is approved
by the Board. Ariadne has a Directors’ retirement scheme, whereby the Company’s Non-executive Directors receive additional retirement benefits,
which vests at the completion of five years service, and is payable upon retirement. This scheme does not apply for directors appointed after 2010.
A performance review was undertaken for all Executives in the reporting period in accordance with the Company’s performance review criteria.
As far as the Group is aware, no Director or Executive uses hedging instruments to limit their exposure to risk on either shares or options in the
Company. The Company’s policy is that the use of such hedging instruments is prohibited.
Corporate Governance
Ariadne Australia Limited • Annual Report 2012 | 11
Directors’ Report
The Directors submit their report for the year ended 30 June 2012. The term “Ariadne Group” or “Group” is used throughout this report to refer to the
parent entity, Ariadne Australia Limited and its controlled entities.
1. oPERAtING AND FINANCIAl REvIEw All amounts included in this report, other than those forming part of the Remuneration Report, are quoted in thousands of dollars unless otherwise stated.
Group overviewAriadne Australia Limited (“Ariadne”) is an investment company listed on the Australian Securities Exchange (ASX: ARA), with operations in Australia and
New Zealand.
Ariadne’s principal activities include car parking; investment management and financial services; property; maritime operations and accommodation
services. There have been no significant changes in the nature of activities during the 2012 financial year.
The Board of Directors and management have extensive experience in general investments, property, merchant banking and operating businesses.
operating Results for the yearThe consolidated net profit after income tax, before non-controlling interests for the financial year was $5,599 (2011: $8,067).
historical Group PerformanceThe table below illustrates the Group’s performance over the last five years. These results include non-recurring items and asset impairment
write-downs.
2012 2011 2010 2009 2008
Total revenues ($) (i) 29,496 22,294 24,522 20,612 102,481
Net profit after tax attributable to members ($) 5,202 8,067 5,636 (9,760) 15,118
Return on equity (%) 7.3% 11.6% 8.7% (12.7)% 17.2%
Basic earnings per share (cents) 2.55 3.94 2.75 (4.51) 6.72
Dividends declared (cents) 1.00 2.00 1.50 1.00 3.00
Share price (cents at 30 June) 34 30 24 25 38
Shares on issue (number at 30 June) 204,380,463 204,380,463 204,939,780 204,939,780 223,281,210
(i) Total revenues include share of profits of associates as shown on the Income Statement and in Note 14(b)
Cash managementCash and cash equivalents as at 30 June 2012 were $15,171 (2011: $22,910).
Ariadne maintains an active but prudent approach to cash management.
Car ParkingThe Group’s car parking division recorded a profit of $6,945 (2011: $8,550).
The result comprises the Group’s 50% share of profits from Secure Parking Pty Ltd (“Secure”), in addition to the operating results from two car park
leases which are held by the Group.
The Group’s share of profits from Secure for the year was $5,051 (2011: $5,826). Trading activities from the car parks held directly by the Group
contributed a net profit of $1,894 (2011: $2,724).
Property & marinasThe Group’s property and marina division recorded a loss of $711 (2011: profit $396).
The Group’s 2012 result includes a small loss of $86 (2011: loss $1,863) from its investment in the Orams Marine Village in Auckland, New Zealand.
The Board remains confident that the strategic investment is well placed to capitalise on the future development of the Western Viaduct area and the
growth impetus of the New Zealand marine industry, which enjoys an international reputation for product quality, skill base and competitiveness.
12 | Ariadne Australia Limited • Annual Report 2012
The accommodation business StayMint Pty Ltd (“StayMint”) reported a loss relating to the write down of carrying value of one of its properties. On
29 June 2012, Ariadne completed a transaction to acquire the remaining 50% interest in StayMint which resulted in all assets being remeasured to
fair value resulting in a gain on business combination. Although the result was also affected by the first year operation of a newly acquired property
in Melbourne, StayMint’s operating cash flows remain strong. The segment Property and Marinas now includes the Group’s accommodation services
which were previously considered an investment. Comparatives have been reclassified to reflect this change.
The Group’s property and marina results also include trading results from the Batemans Bay and Port Macquarie marinas, both of which operated
at a loss. Development applications for the re-development of these two marinas have been lodged. Concurrent with the lodging of development
applications, the future ownership and development of these marinas are being evaluated.
InvestmentsThe Investment division recorded a profit in 2012 of $1,991 (2011: $1,062).
Investment income was primarily derived from treasury activities relating to interest on cash reserves and share of profits from the group’s investment
in an associate.
During the 2012 financial year, Ariadne increased its shareholding in Freshxtend from 48% to 54% which resulted in a business combination gain.
New investments made during the year included the acquisition of shares in various ASX listed companies.
taxationAriadne currently has significant carried forward revenue and capital losses that are available to offset future taxable profits. At 30 June 2012, these
are estimated at $83,249 (2011: $90,835) and $149,371 (2011: $148,807) respectively.
As the Ariadne Board has concluded there is sufficient evidence to estimate a base level of recurring taxable profit for the next three years, a
deferred tax asset equal to the tax expense payable on this base level taxable profit is recorded in the Group’s Balance Sheet. In accordance with
the Group’s accounting policy for income tax, an assessment has been made at 30 June 2012 as to the recoverability and sufficiency of the deferred
tax asset recorded at 30 June 2012. Following this assessment it was determined that no increase (2011: 1,529) to the asset value be recorded at
30 June 2012.
EmployeesThe number of employees at balance date has increased to 62 (2011: 21) predominately due to the acquisition of the StayMint accommodation
business on 29 June 2012.
2012 2011 2012 2011
(cents per share) ($’000)
2. EARNINGSBasic earnings 2.55 3.94 5,202 8,067
Diluted earnings 2.55 3.94 5,202 8,067
(cents per share) ($’000)
3. DIvIDENDS Dividends paid during the 2012 financial year
Final for 2011 – paid 28 September 2011 1.5 3,066
Interim for 2012 – paid 18 April 2012 0.5 1,022
2.0 4,088
The Directors of Ariadne Australia Limited have declared an unfranked final dividend of $1,022 (0.5 cents per ordinary share) in relation to the
30 June 2012 financial year. No liability is recognised in the 2012 financial statements as this dividend was declared after 30 June 2012.
Directors’ Report
Ariadne Australia Limited • Annual Report 2012 | 13
4. DIRECtoRS The names and details of the Ariadne’s Directors in office at the date of this report are as follows. All Directors were in office for the entire period.
Names, qualifications, experience and special responsibilities
David Zalmon Baffsky, Ao, llB (Chairman)David Baffsky AO, aged 71, was appointed as a Director of Ariadne on 18 March 2008 and Chairman of the Board on 13 January 2009.
Mr Baffsky is Honorary Chairman (formerly Executive Chairman between 1993 and 2008) of Accor Asia Pacific, the largest hotel management company
in the Asia Pacific region. He is also the founder of Tourism Asset Holdings Limited, Australia’s largest hotel owning company. Mr Baffsky is a Director
of the Indigenous Land Corporation (appointed August 1999) and was Chairman of its Audit & Risk Management Committee. He is a Director of SATS
Limited (appointed 15 May 2008) and a Director of Sydney Olympic Park Authority (appointed December 2009). He was appointed Chairman of Investa
Funds Management Limited in August 2011. In 2005, he was appointed a Trustee of the Art Gallery of NSW and in 2009 became Chairman of the
Gallery’s Risk Management Committee. Mr Baffsky is a member of the Federal Government’s Business Government Advisory Group on National Security
and works with a number of charitable and non-profit groups. In 2012 he was awarded the Chevalier in the Order of the National Legion of Honneur.
Mr Baffsky was appointed to the Audit and Risk Management Committee on 18 March 2008.
kevin will Seymour, Am (Deputy Chairman)Mr Seymour AM, aged 72, was appointed as a Director of Ariadne on 23 December 1992. Mr Seymour is a Non-Executive Director of Watpac
Limited (appointed May 1996) and a Director of Tatts Group Limited (appointed 12 October 2006), having been a Director of UniTAB Limited
(appointed 1 September 2000) prior to its merger with Tattersall’s Limited.
Mr Seymour is the Executive Chairman of Seymour Group, one of the largest private property development and investment companies in Queensland
and has substantial experience in the equities market in Australia. Mr Seymour also has extensive management and business experience including
company restructuring. Mr Seymour holds board positions with several private companies in Australia.
Mr Seymour was previously the Independent Chairman of the Queensland Government’s and Brisbane City Council’s Brisbane Housing Company
Limited and Chairman of Briz31 Community TV. He has also served on the Brisbane Lord Mayor’s Drugs Taskforce and is an Honorary Ambassador
for the City of Brisbane.
maurice william loomes, B Comm (hons), FinsiaMr Loomes, aged 64, was appointed a Director on 20 May 2004. Mr Loomes is the Non-Executive Chairman of CIC Australia Limited (appointed
Director September 1994) and is a Non-Executive Director of Calliden Group Limited (appointed 24 October 2000).
Mr Loomes was appointed to the Audit and Risk Management Committee on 20 May 2004.
John william murphy, B Comm, m Comm, CA, FCPAMr Murphy, aged 59, was appointed a Director on 6 December 2006. Mr Murphy is a Non-Executive Director of Investec Bank (Australia) Limited and
until September 2011 the Managing Director of Investec Wentworth Private Equity Limited and serves on the Board of a number of listed companies
including the following:
• Staging Connections Group Limited (appointed 28 October 2002)
• Vocus Communication Limited (appointed 7 March 2003)
• Gale Pacific Limited (appointed 24 August 2007)
• Clearview Wealth Limited (appointed 9 June 2010)
During the past three years, Mr Murphy has also served as a Director of Speciality Fashion Group Limited (appointed 28 February 2005 and resigned
28 October 2010).
Mr Murphy was appointed to the Audit and Risk Management Committee on 6 December 2006 and was elected committee Chairman on 18 March 2008.
Directors’ Report
14 | Ariadne Australia Limited • Annual Report 2012
Dr Gary hilton weiss, llB (hons), llm, JSD (Executive Director)Dr Weiss, aged 59, was appointed a Director of Ariadne on 28 November 1989. Dr Weiss is Chairman of Secure Parking Pty Ltd (appointed
1 November 2004). He is a Director of Premier Investments Limited (appointed 11 March 1994), Ridley Corporation Ltd (appointed 21 June 2010),
Mercantile Investment Company Limited (appointed 6 March 2012), Pro-Pac Packaging Limited (appointed 28 May 2012) and Tag Pacific Limited
(appointed 1 October 1988). He is also a Director of The Victor Chang Cardiac Research Institute and The Centre for Independent Studies.
In the past three years, Dr Weiss has also served as the Chairman of Coats plc (appointed 4 February 2003, resigned 30 April 2012) and as a Director
of Guinness Peat Group plc (appointed 30 November 1990, resigned 30 April 2011), Westfield Group (appointed 13 July 2004, resigned 27 May 2010),
Carindale Property Trust (appointed 29 May 2002, resigned 27 May 2010).
Directors’ interests in the shares and options of the company and related bodies corporateAs at the date of this report, the interests of the Directors in the shares and options of Ariadne Australia Limited were:
Number of ordinary Shares Number of options over ordinary Shares
David Zalmon Baffsky, AO 899,483 –
Kevin Will Seymour, AM 11,634,174 –
Maurice William Loomes 388,111 –
John William Murphy (i) – –
Dr Gary Hilton Weiss 78,071,619 –
(i) Mr J Murphy, until September 2011, was the Managing Director of Investec Wentworth Private Equity Limited which controls 18,320,001 shares in Ariadne Australia Limited.
5. ComPANy SECREtARy
Natt mcmahon, B Comm, SA Fin, CAMr McMahon was appointed Company Secretary for the Group on 18 May 2012. Prior to joining Ariadne, Mr McMahon held senior financial roles with
various local and overseas entities.
warren Bamford, B Comm, B Econ, CAMr Bamford was appointed Company Secretary for the Group on 15 July 2010 and resigned as Company Secretary on 18 May 2012.
6. SIGNIFICANt EvENtS AFtER thE BAlANCE DAtE After the balance sheet date, the Directors of Ariadne Australia Limited declared a dividend on ordinary shares in respect of the 2012 financial year. The
total amount of the dividend, is $1,022 which represents an unfranked dividend of 0.5 cents per share.
After the balance sheet date, Ariadne entered into a put and call agreement with CCP BidCo Pty Ltd as part of an on market takeover offer for Clearview
Wealth Limited (“CVW”). If the takeover bid is successful Ariadne would have the right and/or obligation to purchase up to 7,216,876 CVW shares at
$0.50 per share. On full take up Ariadne would hold 4.6% of the issued capital of CVW. CVW is an ASX-listed financial services company providing life
insurance, wealth management and financial planning solutions in Australia.
7. lIkEly DEvEloPmENtS AND EXPECtED RESultSThe Group aims to maintain an appropriate mix of strategic investments in assets that generate a recurring income stream for the Group and increase
shareholder wealth.
Further information as to likely developments and expected results has not been included in this report because the Directors believe to include such
information would likely result in unreasonable prejudice to one or more entities in the Group.
8. ENvIRoNmENtAl REGulAtIoN AND PERFoRmANCEThe Group’s environmental obligations are regulated by relevant federal, state and local government ordinances. The Group’s policy is to comply with,
but in most cases exceed its environmental performance obligations. No environmental breaches have been notified by any governmental agency or
local council authority during the year ended 30 June 2012.
Directors’ Report
Ariadne Australia Limited • Annual Report 2012 | 15
9. ShARE oPtIoNS
unissued sharesAs at the date of this report, there were 2,675,000 unissued ordinary shares under option (2011: 2,675,000). Option holders do not have any right,
by virtue of the option, to participate in any share right issues or dividends of the company.
options issuedNo options were issued during the 2012 financial year (2011: 1,500,000).
Shares issued as a result of the exercise of optionsNo options were exercised during the 2012 financial year (2011: Nil).
Expiry of optionsNo options expired during the 2012 financial year (2011: 1,100,000).
10. INDEmNIFICAtIoN AND INSuRANCE oF DIRECtoRS AND oFFICERSInsurance and indemnity arrangements concerning Officers of the Group are in place. The Constitution of Ariadne provides an indemnity (to the extent
permitted by law) in favour of each Director, Secretary and Executive Officer. The indemnity is against any liability incurred by that person in their
capacity as a Director, Secretary or Executive Officer to another person (other than Ariadne or a related body corporate), unless the liability arises out
of conduct involving a lack of good faith. The indemnity includes costs and expenses incurred by an Officer in successfully defending that person’s
position. The Group has paid a premium insuring each Ariadne Director and each full-time Executive, Director and Secretary of the Group against
certain liabilities incurred in those capacities, to the extent permitted by law. Disclosure of premiums and coverage has not been included as such
disclosure is prohibited under the terms of the contract of insurance.
11. REmuNERAtIoN REPoRt (AuDItED)All amounts in the Remuneration Report are stated in whole numbers unless otherwise specified.
The Remuneration Report outlines the Director and Executive remuneration arrangements of the Group in accordance with the requirements of the
Corporations Act 2001 and its Regulations.
Remuneration PhilosophyThe performance of the company depends upon the quality of its Directors, Executives and employees. To prosper, the company must attract, motivate
and retain a highly skilled workforce.
Remuneration of Directors and Executive Officers of the company is established by annual performance review, having regard to market factors and
a performance evaluation process. For Executive Officers, remuneration packages generally comprise salary, superannuation and a performance-
based bonus.
Remuneration StructureIn accordance with good corporate governance, the structure of Non-Executive Director and Executive Officer remuneration is separate and distinct.
Non-executive remuneration
ObjectiveThe Board seeks to set aggregate remuneration at a level which provides the company with the ability to attract and retain Directors of the highest
calibre, whilst incurring a cost which is acceptable to shareholders.
StructureThe Constitution and the ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from time to time
by a general meeting. An amount not exceeding the amount determined is then divided between the Directors as agreed. The latest determination
approved by shareholders provided for an aggregate limit of Non-Executive Directors’ remuneration (including superannuation and excluding retirement
benefits) of $500,000 per annum. The aggregate level of remuneration was last approved by shareholders on 24 November 2011.
Directors’ Report
16 | Ariadne Australia Limited • Annual Report 2012
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst Directors is
reviewed annually. The Board considers fees paid to Non-Executive Directors of comparable companies when undertaking the annual review process.
Directors are also reimbursed for reasonable travel expenses in attending Board and Committee meetings and other costs associated with representing
the Group in specific matters from time to time.
The remuneration of Non-Executive Directors for the year ending 30 June 2012 is detailed in Table 1 of the remuneration report.
Executive remuneration
ObjectiveThe company aims to reward Executives with a level and mix of remuneration commensurate with their position and responsibilities within the
company, so as to:
• reward Executives for performance against targets set by reference to appropriate benchmarks;
• align the interests of Executives with those of shareholders;
• link reward with the strategic goals and performance of the company; and
• ensure total remuneration is competitive by market standards.
StructureIn determining the level and make up of Executives remuneration, the Board considers market levels of remuneration for comparable roles and
employee performance. Remuneration consists of the following key elements:
• Fixed remuneration
• Variable remuneration
The Board establishes the proportion of fixed and variable remuneration for each Officer and Senior Manager.
Fixed Remuneration
ObjectiveThe level of fixed remuneration is set so as to provide a base level of remuneration, which is both appropriate to the position and is competitive in the
market. Fixed remuneration is reviewed annually.
StructureFixed remuneration is paid in cash.
variable Remuneration
ObjectiveThe objective of variable remuneration is to reward Executives in a manner which aligns this element of remuneration with the creation of shareholder wealth.
Variable remuneration is generally only offered to Executives who are able to influence the generation of shareholder wealth and have a direct impact on
the company’s performance. Due to the operations of the Group, the value of variable remuneration may be linked to the outcome of specific transactions
in addition to the Group’s overall financial performance. Earnings per Share (“EPS”), Return on Equity (“ROE”), and project Internal Rate of Return (“IRR”)
as calculated in accordance with applicable accounting standards and accepted valuation techniques may be used as key indicators of performance.
StructureVariable remuneration may be in the form of cash bonuses or longer term incentives in the form of Ariadne share options.
Cash based variable remuneration is used to reward Executives for exceptional performance. The nature of the Group’s activities lends itself to a market
where cash based incentives are prevalent. While individual performance may be rewarded by way of cash based payments, the Board also considers
the use of longer-term incentives in order to align the interests of employees and shareholders.
A share option plan has been established where the Board may grant options over the ordinary shares of the company to Executives as a long-term
incentive payment. The options, issued for nil consideration, are granted as variable remuneration. All options are issued at the discretion of the Board,
there are no fixed guidelines.
The options are issued for a term of three years and are exercisable two years from the date of grant. The options are not quoted on the ASX.
Directors’ Report
Ariadne Australia Limited • Annual Report 2012 | 17
Details of key management Personnel Remuneration
(a) Details of key management Personnel
(i) Directors
D Z Baffsky, AO Chairman
K W Seymour, AM Deputy Chairman
M W Loomes Non-Executive Director
J W Murphy Non-Executive Director
G H Weiss Executive Director
(ii) Executives
M R Boyte Chief Executive Officer
D A Weiss Investment Officer
N M McMahon Chief Financial Officer / Company Secretary (appointed 18 May 2012)
W J Bamford Chief Financial Officer / Company Secretary (appointed 15 July 2010, resigned 18 May 2012)
(b) Remuneration of Directors and Executives
Remuneration PolicyThe full Board acts as the Group’s Remuneration Committee, and is responsible for determining and reviewing compensation arrangements for the
Directors and the Executive team. The Directors assess the appropriateness of the nature and amount of emoluments on a periodic basis by reference
to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board
and Executive team.
Directors’ remuneration primarily consists of a base salary. The current Directors of the company are also entitled to a retirement benefit, which
becomes payable after the completion of 5 years continuous service as a Director; this retirement scheme will not apply to new directors.
Officers receive their base emolument in the form of cash payments. Once the Directors’ approval is granted, bonuses are paid by way of cash or
longer term incentives in the form of Ariadne share options. The Directors link the nature and amount of Executive Directors’ and Officers’ emoluments
to the company’s financial and operational performance.
Directors’ Report
18 | Ariadne Australia Limited • Annual Report 2012
Short term Post Employment Share Based
Payment other total%
at RiskSalary &
FeesCash Bonus
Non-Monetary Benefits
(i)
Superannuation Retirement Benefits
Options
(ii)
table 1: Emoluments of Directors of Ariadne Australia limited for the year ended 30 June 2012
D Z Baffsky, Ao (Chairman) (iii)
2012 110,000 - 15,965 9,900 - - - 135,865 -
2011 110,000 - 11,691 9,900 - - - 131,591 -
k w Seymour, Am
2012 60,000 - - 5,400 - - - 65,400 -
2011 60,000 - - 5,400 - - - 65,400 -
m w loomes
2012 60,000 - - 5,400 - - - 65,400
2011 60,000 - - 5,400 - - - 65,400 -
J w murphy (iv)
2012 60,000 - - 4,050 - - - 64,050 -
2011 60,000 - - - - - - 60,000 -
G h weiss (Executive Director)
2012 570,000 - 15,965 30,000 - - - 615,965 -
2011 (v) 150,000 - 4,000 4,500 - - - 158,500 -
total Remuneration: Directors
2012 860,000 - 31,930 54,750 - - - 946,680 -
2011 440,000 - 15,691 25,200 - - - 480,891 -
table 2: Emoluments of the Executive officers of the Company and the consolidated entity for the year ended 30 June 2012
m R Boyte (Chief Executive officer)
2012 450,000 - - 50,000 - 37,542 537,542 6.98%
2011 450,000 - - 50,000 - 3,077 503,077 0.61%
D A weiss (Investment officer)
2012 259,225 - 15,965 15,775 - 18,771 309,736 5.86%
2011 259,800 - 11,691 15,199 - 1,539 - 288,229 0.53%
N m mcmahon (Chief Financial officer / Company Secretary – appointed 18 may 2012)
2012 10,998 - - 6,802 - - - 17,800 -
w J Bamford (Chief Financial officer / Company Secretary – appointed 15 July 2010, resigned 18 may 2012) (vi)
2012 195,343 - 7,061 18,999 - - 53,132 274,535 -
2011 214,537 - 2,679 19,308 - - - 236,524 -
total Remuneration: Executives
2012 915,566 - 23,026 91,576 - 56,313 53,132 1,139,613 4.90%
2011 924,337 - 14,370 84,507 - 4,616 - 1,027,830 0.45%
(i) Non-monetary benefits represent the cost of car parking (including associated fringe benefits tax).
(ii) Each option entitles the holder to purchase one ordinary share in Ariadne Australia Limited. The actual value of the options will only be determined after the exercise period commences
and when the options are exercised. Options granted as part of Executive emoluments have been valued using the Black Scholes pricing model, which takes account of factors including
the option exercise price, the volatility of the underlying share price, the risk-free interest rate, expected dividends on the underlying share, market price of the underlying share and the
expected life of the option. Amortised cost has been calculated as the fair value of options at grant date, prorated over the vesting period of the options.
(iii) Mr D Baffsky, AO (Chairman) performed various consulting services to the group outside of his Director’s duties. Mr Baffsky was paid additional fees not included above for consulting work
performed, as disclosed in Note 30(f)(ii) to the financial statements.
(iv) Mr J Murphy’s director’s fees were paid to Investec Wentworth Private Equity Pty Ltd for the period to 30 September 2011.
(v) During the 2011 financial year, Dr G H Weiss was appointed as an executive. His salary and fees includes the period for which he was a non-executive director and an executive director.
(vi) During the 2012 financial year Mr W J Bamford was paid a redundancy termination payment of $53,132.
Directors’ Report
Ariadne Australia Limited • Annual Report 2012 | 19
table 3: Remuneration options: Granted and vested during the yearOptions have been granted as equity compensation benefits to specified Executives. Each option entitles the holder to subscribe for one fully paid
ordinary share in Ariadne at a specified price. The options may only be exercised two years after the grant date and expire three years thereafter.
No options were granted during the 2012 financial year (2011: 1,500,000).
Key inputs used in valuing the options on issue at balance date are as follows:
Issue Date Dividend PolicyExpected volatility
Risk Free Interest Rate (percent)
Expected life of options from
Grant Date (years)Exercise Price
(cents)Share Price at
Grant Date (cents)
21/12/2007 2% 33% 6.75% 3.5 52 51
31/05/2011 3% 35% 4.99% 3.5 35 33
In accordance with the terms and conditions, options expired either on cessation of employment in the event where vesting conditions have not yet been met, or 3 months after cessation of employment where vesting conditions had previously been met. This is prior to normal expiry date had employment not ceased.
Shares issued on exercise of remuneration optionsThere were no shares issued on exercise of remuneration options in the current year (2011: Nil).
hedging of shares and options riskCurrently no Director or Officer has disclosed to the Company that they have used hedging instruments to limit their exposure to risk on either shares or
options in the Company. The Company’s policy is that the use of such hedging instruments is prohibited.
Remuneration Report (Audited) Ends
12. DIRECtoRS’ mEEtINGS
The number of meetings of Directors (including meetings of committees of Directors) held during the year and the number of meetings attended by
each of the Directors of Ariadne were as follows:
meetingsAudit & Risk
management
Number of meetings held: 7 4
Number of meetings attended:
D Z Baffsky, AO 6 4
K W Seymour, AM 7 -
M W Loomes 7 4
J W Murphy 7 4
G H Weiss 7 -
Committee membershipAs at the date of this report, the company had an Audit and Risk Management Committee. Members acting on the committee during the year were:
J W Murphy (Chairman)
D Z Baffsky, AO
M W Loomes
Directors’ Report
20 | Ariadne Australia Limited • Annual Report 2012
13. RouNDINGThe amounts contained in the financial report have been rounded to the nearest $1,000 (where rounding is applicable) under the option available to the
Company under ASIC Class Order 98/0100. The Company is an entity to which the Class Order applies.
14. AuDItoR’S INDEPENDENCE DEClARAtIoN to thE DIRECtoRSA copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act is set out on page 22 and forms part of the
directors’ report for the year ended 30 June 2012.
15. NoN-AuDIt SERvICESNon-audit services provided by Ariadne’s auditor, Ernst & Young in the current and prior financial year was in relation to taxation related assistance.
The Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by
the Corporations Act. Fees for these services were:
2012 $
2011 $
Amounts received or due and receivable by Ernst and Young for:
Taxation and other services in relation to the entity and any other entity in the consolidated group 38,400 63,400
Signed in accordance with a resolution of the Directors.
D Z Baffsky, Ao Director 24 August 2012
Directors’ Report
Ariadne Australia Limited • Annual Report 2012 | 21
ARIADNE GRouP
Notes2012
$’0002011
$’000
CoNtINuING oPERAtIoNS
Rental and letting income 17,811 13,158
Sale of property 938 963
Sale of goods 496 301
Interest income 1,940 2,062
Dividend income 220 –
Other income 4(a) 2,953 634
Rental and letting expenses (16,088) (11,687)
Cost of property sold (940) (994)
Cost of goods sold (504) (245)
Employee benefits expense 4(c) (3,989) (2,576)
Depreciation and amortisation 4(b) (809) (531)
Administration expenses (1,453) (1,391)
Finance costs (252) (225)
Impairment reversals /(provisions) 4(d) 138 1,893
Share of profits of associates 14(b) 5,138 5,176
PRoFIt BEFoRE INComE tAX 5,599 6,538
Income tax benefit 5(a) - 1,529
PRoFIt AFtER tAX FRom CoNtINuING oPERAtIoNS 5,599 8,067
Attributable to:
Non-controlling interests 397 –
mEmBERS oF ARIADNE AuStRAlIA lImItED 5,202 8,067
Basic earnings per share (cents per share) 6 2.55 3.94
Diluted earnings per share (cents per share) 6 2.55 3.94
*Certain numbers shown here have been reclassified from the 2011 financial statements and reflect adjustments made as detailed in Note 2(dd).
The above Income Statement should be read in conjunction with the accompanying notes.
Income Statement FoR thE yEAR ENDED 30 JuNE 2012
Ariadne Australia Limited • Annual Report 2012 | 23
ARIADNE GRouP
Notes2012
$’0002011
$’000
PRoFIt AFtER tAX FRom CoNtINuING oPERAtIoNS 5,599 8,067
other Comprehensive Income/ (Expense)
Net fair value movements on available-for-sale financial assets 21(e) (281) (244)
Foreign currency translation 382 (419)
other Comprehensive Income / (Expense) for the year, Net of Income tax 101 (663)
totAl ComPREhENSIvE INComE FoR thE PERIoD 5,700 7,404
Attributable to:
Non-controlling interests 411 –
mEmBERS oF ARIADNE AuStRAlIA lImItED 5,289 7,404
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
Statement of Comprehensive Income FoR thE yEAR ENDED 30 JuNE 2012
24 | Ariadne Australia Limited • Annual Report 2012
ARIADNE GRouP
Notes2012
$’0002011
$’000
ASSEtS
Current Assets
Cash and cash equivalents 8 15,171 22,910
Trade and other receivables 9 6,157 6,720
Inventories 10 3,519 3,961
Other current assets 11 2,046 734
total Current Assets 26,893 34,325
Non-Current Assets
Receivables 12 7,546 11,343
Other financial assets 13 7,199 5,513
Investment in associates 14(d) 20,785 16,576
Property, plant and equipment 16 5,817 1,420
Deferred tax assets 5(b) 6,305 6,305
Intangible assets 17 12,305 321
total Non-Current Assets 59,957 41,478
totAl ASSEtS 86,850 75,803
lIABIlItIES
Current liabilities
Trade and other payables 18 2,073 1,675
Interest-bearing loans and borrowings 19 6,950 2,400
Provisions 20 976 102
total Current liabilities 9,999 4,177
Non-Current liabilities
Provisions 20 148 754
total Non-Current liabilities 148 754
totAl lIABIlItIES 10,147 4,931
NEt ASSEtS 76,703 70,872
EQuIty
Issued capital 21(a) 382,842 382,842
Reserves 21(e) 8,417 2,230
Accumulated losses 21(f) (319,130) (314,200)
EQuIty AttRIButABlE to mEmBERS oF ARIADNE AuStRAlIA lImItED 72,129 70,872
Non-controlling interests 4,574 –
totAl EQuIty 76,703 70,872
The above Balance Sheet should be read in conjunction with the accompanying notes.
Balance Sheet AS At 30 JuNE 2012
Ariadne Australia Limited • Annual Report 2012 | 25
Issued capital $’000
Reserves $’000
Accumulated losses $’000
Equity shareholders’
funds $’000
Non-controlling
interest $’000
total $’000
Note 21(b) Note 21(e) Note 21(f)
FoR thE yEAR ENDED 30 JuNE 2011
At 1 July 2010 383,018 3,816 (319,096) 67,738 – 67,738
Profit / (loss) for the period – – 8,067 8,067 – 8,067
Other comprehensive income – (663) – (663) – (663)
Total comprehensive income for
the period – (663) 8,067 7,404 – 7,404
Cost of share-based payment – 5 – 5 – 5
Transfer of reserves to
accumulated losses – (928) 928 – – –
Cost of shares bought back (176) – – (176) – (176)
Equity dividends – – (4,099) (4,099) – (4,099)
At 30 June 2011 382,842 2,230 (314,200) 70,872 – 70,872
FoR thE yEAR ENDED 30 JuNE 2012
At 1 July 2011 382,842 2,230 (314,200) 70,872 – 70,872
Profit / (loss) for the period – 7,066 (1,864) 5,202 397 5,599
Other comprehensive income – 87 – 87 14 101
Total comprehensive income for
the period – 7,153 (1,864) 5,289 411 5,700
Acquisition of non-controlling interest – – – – 4,257 4,257
Cost of share-based payment – 56 – 56 – 56
Equity dividends – (1,022) (3,066) (4,088) (94) (4,182)
At 30 June 2012 382,842 8,417 (319,130) 72,129 4,574 76,703
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Statement of Changes in Equity
26 | Ariadne Australia Limited • Annual Report 2012
ARIADNE GRouP
Notes2012
$’0002011
$’000
Cash flows from operating activities
Receipts from rental and letting income 18,372 13,012
Receipts from sales of property and other trading income 1,537 4,416
Payments to suppliers and employees (22,748) (15,062)
Dividends and trust distributions received 7,503 4,350
Purchases for trading portfolio (1,310) –
Sale from trading portfolio 252 –
Interest received 2,306 1,638
Interest and borrowing costs (253) (213)
Payments to acquire development inventory (468) –
Net cash flows from operating activities 22 5,191 8,141
Cash flows from investing activities
Purchase of plant and equipment (1,650) (1,299)
Proceeds from available-for-sale investments 1,159 497
Purchase of financial instruments (3,110) (1,693)
Cash proceeds from loans repaid by other parties 3,710 11,881
Loans extended to other parties (5,494) (11,588)
Acquisition of subsidiary, net of cash acquired 31 (2,913) –
Net cash flows from/(used in) investing activities (8,298) (2,202)
Cash flows from financing activities
Repayments of borrowings (450) (136)
Payments under share buyback of unmarketable parcels – (176)
Dividends paid (4,182) (4,099)
Net cash flows from/(used in) financing activities (4,632) (4,411)
Net increase/(decrease) in cash and cash equivalents (7,739) 1,528
Cash and cash equivalents at beginning of period 22,910 21,382
Cash and cash equivalents at end of period 8 15,171 22,910
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
Statement of Cash Flows FoR thE yEAR ENDED 30 JuNE 2012
Ariadne Australia Limited • Annual Report 2012 | 27
1. CoRPoRAtE INFoRmAtIoNThe consolidated financial report of Ariadne Australia Limited (“Ariadne”) and its controlled entities for the year ended 30 June 2012 was authorised for
issue in accordance with a resolution of the Directors on 24 August 2012.
Ariadne is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange (“ASX”).
A description of the Group’s operations and of its principal activities is included in the Directors’ Report on pages 12 to 21.
2. SummARy oF SIGNIFICANt ACCouNtING PolICIES
(a) Basis of preparationThe consolidated financial statements include the parent entity, Ariadne Australia Limited, and its controlled entities. The term “Ariadne Group”
or “Group” is used throughout these financial statements to refer to the parent entity and its controlled entities. The parent entity is referred to
as “Ariadne”. The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the
Corporations Act 2001 and Australian Accounting Standards as issued by the Australian Accounting Standards Board.
The financial report has been prepared on a historical cost basis, except for investment properties, available-for-sale financial assets, held-for-trading
financial assets and derivative financial instruments which have been measured at fair value.
Where necessary, comparatives have been reclassified and repositioned for consistency with current year disclosures.
(b) ComplianceThe financial report also complies with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board.
(c) Changes in accounting policiesThe Group has adopted the following new and amended Australia Accounting Standards and AASB Interpretations during the current financial year.
Amendments to AASB 7 Financial Instruments: DisclosureThe amendments (part of AASB 2010-4 ‘Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project’)
clarify the required level of disclosures about credit risk and collateral held and provide relief from disclosures previously required regarding
renegotiated loans.
Amendments to AASB 101 Presentation of Financial StatementsThe amendments (part of AASB 2010-4 ‘Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project’)
clarify that an entity may choose to present the required analysis of items of other comprehensive income either in the statement of changes in equity
or in the notes to the financial statements.
AASB 1054 ‘Australian Additional Disclosures’ and AASB 2011-1 ‘Amendments to Australian Accounting Standards arising from trans-tasman Convergence Project’AASB 1054 sets out the Australian-specific disclosures for entities that have adopted Australian Accounting Standards. This Standard contains disclosure
requirements that are in addition to IFRSs in areas such as compliance with Australian Accounting Standards, the nature of financial statements (general
purpose or special purpose), audit fees, imputation (franking) credits and the reconciliation of net operating cash flow to profit (loss).
AASB 2011-1 makes amendments to a range of Australian Accounting Standards and Interpretations for the purpose of closer alignment to IFRSs and
harmonisation between Australian and New Zealand Standards. The Standard deletes various Australian-specific guidance and disclosures from other
Standards (Australian-specific disclosures retained are now contained in AASB 1054), and aligns the wording used to that adopted in IFRSs.
The application of AASB 1054 and AASB 2011-1 in the current year has resulted in the simplification of disclosures in regards to audit fees, franking
credits and capital and other expenditure commitments as well as an additional disclosure on whether the Group is a for-profit or not-for-profit entity.
AASB 124 ‘Related Party Disclosures’ (revised December 2009)AASB 124 (revised December 2009) has been revised on the following two aspects: (a) AASB 124 (revised December 2009) has changed the definition of
a related party and (b) AASB 124 (revised December 2009) introduces a partial exemption from the disclosure requirements for government-related entities.
Notes to Financial Statements
28 | Ariadne Australia Limited • Annual Report 2012
The Company and its subsidiaries are not government-related entities. The application of the revised definition of related party set out in AASB 124
(revised December 2009) in the current year has not resulted in the identification of related parties that were not identified as related parties under the
previous Standard.
Specifically, associates of the ultimate holding company of the Company are treated as related parties of the Group under the revised Standard whilst
such entities were not treated as related parties of the Group under the previous Standard. The related party disclosures set out in note 26 to the
consolidated financial statements have been changed to reflect the application of the revised Standard. Changes have been applied retrospectively.
The following new and revised Standards and Interpretations have also been adopted in these financial statements. Their adoption has not had any
significant impact on the amounts reported in these financial statements but may affect the accounting for future transactions or arrangements.
AASB 2009-14 ‘Amendments to Australian Interpretation – Prepayments of a minimum Funding Requirement’Interpretation 114 addresses when refunds or reductions in future contributions should be regarded as available in accordance with paragraph 58
of AASB 119; how minimum funding requirements might affect the availability of reductions in future contributions; and when minimum funding
requirements might give rise to a liability. The amendments now allow recognition of an asset in the form of prepaid minimum funding contributions.
The application of the amendments to Interpretation 114 has not had material effect on the Group’s consolidated financial statements.
AASB 2009-12 ‘Amendments to Australian Accounting Standards’The application of AASB 2009-12 makes amendments to AASB 8 ‘Operating Segments’ as a result of the issuance of AASB 124 ‘Related Party
Disclosures’ (2009). The amendment to AASB 8 requires an entity to exercise judgement in assessing whether a government and entities known to be
under the control of that government are considered a single customer for the purposes of certain operating segment disclosures. The Standard also
makes numerous editorial amendments to a range of Australian Accounting Standards and Interpretations. The application of AASB 2009-12 has not
had any material effect on amounts reported in the Group’s consolidated financial statements.
AASB 2010-5 ‘Amendments to Australian Accounting Standards’The Standard makes numerous editorial amendments to a range of Australian Accounting Standards and Interpretations. The application of AASB
2010-5 has not had any material effect on amounts reported in the Group’s consolidated financial statements.
AASB 2010-6 ‘Amendments to Australian Accounting Standards – Disclosures on transfers of Financial Assets’The application of AASB 2010-6 makes amendments to AASB 7 ‘Financial Instruments – Disclosures’ to introduce additional disclosure requirements
for transactions involving transfer of financial assets. These amendments are intended to provide greater transparency around risk exposures when a
financial asset is transferred and derecognised but the transferor retains some level of continuing exposure in the asset.
To date, the Group has not entered into any transfer arrangements of financial assets that are derecognised but with some level of continuing
exposure in the asset. Therefore, the application of the amendments has not had any material effect on the disclosures made in the consolidated
financial statements.
Future changesThere are a number of Standards and Interpretations that will be mandatory in future reporting periods. The Group has not elected to early adopt these
Standards and Interpretations and does not expect them to have a material effect on the financial position or performance of the Group.
(d) Basis of consolidationThe consolidated financial statements comprise the financial statements of Ariadne Australia Limited and its subsidiaries.
The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.
Adjustments are made to bring into line any dissimilar accounting policies that may exist.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profits and losses resulting
from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.
Subsidiaries are fully consolidated from the date on which control is obtained by the Group and cease to be consolidated from the date on which control
is transferred out of the Group. Where there is loss of control of a subsidiary, the consolidated financial statements include the results for the part of the
reporting period during which Ariadne Australia Limited had control.
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 29
2. SummARy oF SIGNIFICANt ACCouNtING PolICIES CoNtINuED
(e) Significant judgements and estimatesCritical accounting policies for which significant judgements, estimates and assumptions are made are as follows. Actual results may differ from these
estimates under different assumptions and conditions and may materially affect the financial result or the financial position reported in future periods.
Building have been assessed as having a useful life of 40 years and are depreciated on a straight line basis over this period. Further information is
included in Note 2(j).
Management rights assets have been assessed as finite life intangible assets, with an estimated useful life of 40 years, and are amortised on a straight
line basis over this period. Further information is included in Note 2(m).
Details in relation to the accounting policies applied when assessing the recoverable amount of the Group’s assets and assets of associates are
included in Note 2(j), 2(m) and 2(n).
Details of the significant judgements and estimates made in relation to the treatment of available income tax losses have been disclosed in Note 5.
No other significant judgements or estimates that require additional disclosure in the financial report in the process of applying the Group’s accounting
policies have been made.
(f) Business combinationsAcquisitions of businesses are accounted for using the acquisition method. The cost of the business combination is measured as the aggregate of the
fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control
of the acquiree. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under AASB 3 Business
Combinations are recognised at their fair values at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for
sale in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations, which are recognised and measured at fair value less
costs to sell. Any acquisition related costs are accounted for separately from the business combination and recognised as an expense in profit or loss
as incurred.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is
remeasured to fair value at the acquisition date through profit or loss.
Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over
the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’s
interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the
excess is recognised immediately in profit or loss.
The interest of minority shareholders in the acquiree is initially measured at fair value or at the non-controlling interests’ proportion of the net fair value
of the assets, liabilities and contingent liabilities recognised.
Non-controlling interests in the net assets (excluding goodwill) of consolidated controlled entities are identified separately from the Group’s equity
therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination valued under the cost method
and the non-controlling interests’ share of changes in equity since the date of the combination. Losses applicable to the non-controlling interest in
excess of the non-controlling interest’s interest in the controlled entities’ equity are allocated against the interests of the Group except to the extent that
the non-controlling interest has a binding obligation and is able to make an additional investment to cover the losses.
(g) Investments in associates and joint venturesThe Group’s investments in associates are accounted for under the equity method of accounting in the consolidated financial statements. Associates
are entities in which the Group has significant influence and which is neither a subsidiary nor a joint venture. The financial statements of associates are
used by the Group to apply the equity method. Consistent accounting policies are used by both associates and the Group.
Investments in associates are carried in the consolidated Balance Sheet at cost plus post-acquisition changes in the Group’s share of net assets of the
associate, less any impairment in value. The consolidated Income Statement reflects the Group’s share of the results of operations of the associate.
Where there has been a change recognised directly in the associate’s other comprehensive income, the Group recognises its share of any changes and
discloses this, when applicable in the consolidated statement of comprehensive income.
Notes to Financial Statements
30 | Ariadne Australia Limited • Annual Report 2012
Upon loss of significant influence over the associate, the Group measures and recognises any retaining investment at it fair value. Any difference
between the carrying amount of the associate upon loss of significant influence and the fair value of the retained investment and proceeds from the
disposal is recognised in profit and loss.
Interests in joint venture operations are accounted for in the consolidated financial statements by recognising the Group’s proportionate share of assets,
liabilities, income and expenses from the joint venture.
(h) Foreign currency translationBoth the functional and presentation currency of Ariadne and all of its subsidiaries is Australian dollars (“AUD”).
All transactions in foreign currencies are initially recorded in the functional currency of the relevant entity at the exchange rate applicable at the date of
the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the functional currency of the entity at the rate of
exchange ruling at the Balance Sheet date.
Revenues derived and expenses incurred by associates with a functional currency other than AUD are translated into the Group’s presentation
currency of AUD using the average exchange rate applicable in the reporting period. Assets and liabilities are translated into AUD at the rate of
exchange applicable at the Balance Sheet date. All exchange differences arising on the translation into the presentation currency of the Group are
recorded in the foreign currency translation reserve.
(i) Investment propertiesInvestment properties are initially measured at cost, including any associated transaction costs of acquisition. Costs incurred in the day-to-day servicing
of the asset are excluded from the cost base of the asset.
Subsequent to initial recognition, investment properties are stated at fair value. Market conditions applicable to the asset at Balance Sheet date are
considered in assessing fair value. Gains or losses arising from changes in fair values are recognised in the Income Statement in the year in which
they arise.
When investment property is transferred to development inventories, the deemed cost of the inventory is its fair value as at the date of the change in use.
(i) Property, plant and equipmentPlant and equipment is stated at cost less accumulated depreciation and any impairment in value.
Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows:
• Buildings – 40 years
• Plant and equipment – over 1 to 10 years
• Leasehold improvements – over 3 to 10 years
ImpairmentThe carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not
be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cash-generating
units are written down to their recoverable amount.
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.
The recoverable amount of plant and equipment is the greater of 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 assessment of the time value of money
and the risks specific to the asset.
(k) Borrowing costsUnless incurred during the development phase of a property development, borrowing costs are recognised as an expense when incurred. Borrowing
costs incurred during development of properties are deferred on the Balance Sheet and carried as a cost of inventory.
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 31
2. SummARy oF SIGNIFICANt ACCouNtING PolICIES CoNtINuED
(l) GoodwillGoodwill on acquisition is initially measured at cost, being the excess of the cost of the business combination over the acquirer’s interest in the net
fair value of the identifiable assets, liabilities and contingent liabilities. As at the acquisition date, any goodwill acquired is allocated to each of the
cash-generating units expected to benefit from the combination’s synergies.
Goodwill is not amortised.
Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be
impaired. Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. Where the
recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation
disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in
this circumstance is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained.
(m) Intangible assets
Acquired both separately and via business combinationIntangible assets including licences acquired separately are capitalised at cost and via business combination are capitalised at fair value as at the date
of acquisition. Intangible assets, excluding development costs, which are created within the business are not capitalised. Such expenditure is charged
against profits in the period in which it is incurred. Following initial recognition, the cost model is applied to the class of intangible assets.
The useful lives of intangible assets are assessed to be either finite or indefinite. Amortisation is charged on assets with finite lives, with the charge
being recorded in the Income Statement as amortisation expense. Intangible assets are tested for impairment where an indicator of impairment exists.
Useful lives are examined on an annual basis and where applicable, adjustments are made on a prospective basis. Additional details applicable to the
Group’s intangible assets are as follows:
licencesUseful lives Finite – period of licence
Method used Straight line
Internally generated / acquired Acquired
Impairment test / recoverable amount testing Annually and where indicators of impairment exist.
management rights assetsUseful lives Finite – 40 years
Method used Straight line
Internally generated / acquired Acquired
Impairment test / recoverable amount testing Annually and where indicators of impairment exist.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognised in the Income Statement when the asset is derecognised.
(n) Recoverable amount of assetsAt each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the
Group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered
impaired and is written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset’s value in
use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from
other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
Gains or losses on available-for-sale investments are recognised as a separate component of equity until the investment is sold, collected or otherwise
disposed of, or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in
the Income Statement.
Notes to Financial Statements
32 | Ariadne Australia Limited • Annual Report 2012
(o) InvestmentsAll investments are initially recognised at cost, being the fair value of the consideration given and including acquisition charges associated with
the investment.
After initial recognition, investments, which are classified as held for trading and available-for-sale, are measured at fair value. Gains or losses on
investments held for trading are recognised in the Income Statement.
Gains or losses on available-for-sale investments are recognised as a separate component of equity until the investment is sold, collected or otherwise
disposed of, or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in
the Income Statement.
Other long-term investments that are intended to be held-to-maturity are measured at amortised cost using the effective interest method.
Amortised cost is calculated by taking into account any discount or premium on acquisition, over the period to maturity.
For investments carried at amortised cost, gains and losses are recognised in the Income Statement when the investments are derecognised or
impaired, as well as through the amortisation process.
For investments that are actively traded in organised financial markets, fair value is determined by reference to quoted market bid prices at the close of
business on the Balance Sheet date.
For investments where there is no quoted market price, fair value is determined with reference to the current market value of another instrument which
is substantially the same, or is calculated based on the expected cash flows of the underlying net asset base of the investment.
(p) InventoriesInventories, consisting primarily of property development projects, are carried in the financial statements at the lower of cost and net realisable value.
Costs associated with the acquisition and development of property development projects are capitalised.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs
necessary to make the sale.
(q) trade and other receivablesTrade receivables, which generally have 30-day terms, are recognised and carried at original invoice amount less an allowance for any
uncollectible amounts.
An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified.
(r) Cash and cash equivalentsCash and short-term deposits in the Balance Sheet comprise cash at bank and in hand and short-term deposits which are readily convertible to known
amounts of cash and are subject to an insignificant change in value.
For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding
bank overdrafts.
(s) Interest-bearing loans and borrowingsAll loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.
Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement.
Gains and losses are recognised in the Income Statement when the liabilities are derecognised and as well as through the amortisation process.
(t) ProvisionsProvisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Where the Group expects some or all of a provision to be reimbursed, for example 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.
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 33
2. SummARy oF SIGNIFICANt ACCouNtING PolICIES CoNtINuED
(t) Provisions continuedIf the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
(u) Share-based payment transactionsThe Group provides benefits to employees (including Directors) of the Group in the form of share-based payment transactions, whereby employees
render services in exchange for shares or rights over shares in Ariadne (“equity-settled transactions”).
The cost of these equity-settled transactions is measured with reference to the fair value at the date at which the shares or rights over shares are
granted. Fair value is determined using a Black Scholes model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance
conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (“vesting date”).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects the extent to which the vesting
period has expired.
Previously recognised share based payment expenses are reversed in the Income Statement to the extent that awards do not ultimately vest.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition,
an expense is recognised for any increase in the value of the transactions as a result of the modification, as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the
award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date
that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
(v) leasesFinance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the
inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments.
Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the
remaining balance of the liability. Finance charges are charged directly to the Income Statement.
Capitalised leased assets are depreciated over their estimated useful life.
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Operating lease
payments are recognised as an expense in the Income Statement on a straight-line basis over the lease term.
(w) RevenueRevenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured.
The following specific recognition criteria must also be met before revenue is recognised:
Rental and letting incomeRental and letting income is recognised on a straight-line basis over the term of the relevant lease. Rental revenue from the operation of serviced
apartments is recognised as income in the period in which the service or accommodation is provided. Car parking and marina revenue is recognised
when earned.
Sale of propertyRevenue is recognised when the significant risks and rewards of ownership of the property have passed to the buyer and can be measured reliably.
Risks and rewards of ownership may be passed on transfer of legal title or when managerial involvement and control is no longer retained.
Notes to Financial Statements
34 | Ariadne Australia Limited • Annual Report 2012
Sale of goodsRisks and rewards from the sale of goods are considered to be passed at the time of delivery of the goods to the customer.
Interest incomeRevenue is recognised as the interest accrues using the effective interest method (which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial instrument to the net carrying amount of the financial asset).
Dividend incomeRevenue is recognised when the shareholder’s right to receive the payment is established.
Rendering of servicesRevenue from the rendering of services is recognised in accordance with either contractually agreed time periods or upon completion of services.
(x) Income taxDeferred income tax is provided on all temporary differences at the Balance Sheet date between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences:
• except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
• in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, except where
the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the
foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, including unused tax losses, to the extent that it is probable taxable
profit will be available against which the deductible temporary differences, and the carry-forward tax losses can be utilised:
• except where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or
liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss; and
• in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax
assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit
will be available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability
is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the Income Statement.
(y) other taxesRevenues, expenses and assets are recognised net of the amount of GST except:
• where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as
part of the cost of acquisition of the asset or as part of the expense item as applicable; and
• receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Balance Sheet.
Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising from investing and financing
activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 35
2. SummARy oF SIGNIFICANt ACCouNtING PolICIES CoNtINuED
(z) Derecognition of financial instrumentsThe derecognition of a financial instrument takes place when the Group no longer controls the contractual rights that comprise the financial instrument,
which is normally the case when the instrument is sold, or all the cash flows attributable to the instrument are passed through to an independent third party.
(aa) Employee benefitsProvision is made for employee benefits accumulated as a result of employees rendering services up to the reporting date. These benefits include
wages and salaries, annual leave and long service leave.
Liabilities arising in respect of wages and salaries, annual leave, and any other employee benefits expected to be settled within twelve months of the
reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. All
other employee benefit liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided
by employees up to the reporting date. In determining the present value of future cash outflows, the market yield as at the reporting date on national
government bonds, which have terms to maturity approximating the terms of the related liability, are used.
Employee benefit expenses and revenues arising in respect of the following categories:
• wages and salaries, non-monetary benefits, annual leave, long service leave, and other leave benefits; and
• other types of employee benefits
are recognised against profits on a net basis in their respective categories.
(bb) Earnings per share (“EPS”)Basic EPS is calculated as net profit attributable to members, adjusted to exclude costs of servicing equity (other than dividends), divided by the
weighted average number of ordinary shares. Diluted EPS is calculated as net profit attributable to members, adjusted for
• costs of servicing equity (other than dividends) and preference share dividends;
• other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
(cc) Derivative financial instruments and hedgingInterest rate swaps are used to hedge risks associated with interest rate fluctuations. The group may also become party to stock call options in its
favour, that are entered into to ensure the Group benefits from upward movements in stock prices underlying loans provided to external parties.
Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently remeasured to fair value. Derivatives are carried as assets when their fair value is positive and as liabilities when their fair value is
negative. Any gains or losses arising from changes in the fair value of derivatives, except for those that qualify as cash flow hedges, are taken directly
to the Income Statement.
The fair values of interest rate swap contracts are determined by reference to market values for similar instruments. The fair value of stock call options
is determined using a binomial model, taking into consideration such variables as the projected risk free interest rate, observable quoted underlying
asset prices, the underlying assets volatility time to expiry and the vesting period.
For the purpose of hedge accounting, hedges are classified as cash flow hedges when they hedge the exposure to variability in cash flows that is
attributable either to a particular risk associated with a recognised asset or liability or to a forecast transaction.
Notes to Financial Statements
36 | Ariadne Australia Limited • Annual Report 2012
Cash flow hedgesCash flow hedges are hedges of exposure to variability in cash flows that is attributable to a particular risk associated with a recognised asset or liability
that is a firm commitment and that could affect profit or loss. The effective portion of the gain or loss on the hedging instrument is recognised directly
in equity, while the ineffective portion is recognised in profit or loss.
The Group tests each of the designated cash flow hedges for effectiveness at the end of each period. For interest rate cash flow hedges, any
ineffective portion is taken to the Income Statement. If the hedging instrument expires or is sold, terminated or exercised without replacement or
rollover, or if its designation as a hedge is revoked (due to it being ineffective), amounts previously recognised in equity remain in equity until the
forecast transaction occurs.
(dd) Reclassification of the Income Statement and Segment NoteAustralian Accounting Standard AASB 101 ‘Presentation of Financial Statements’ allows an entity to change the presentation or classification of items
in its financial statements, if the change in presentation provides information that is reliable and more relevant to the users of the financial statements
and the revised structure is likely to continue, so that comparability is not impaired. For the year ended 30 June 2012, Ariadne has changed the
presentation of its Income Statement and Segment Note to a format that is reliable and more relevant to its users.
In the Income Statement, these changes included, amongst others, grouping rental and letting income and rental and letting expenses. The Segment
Note reflects the change in segment for the Group’s interest in accommodation services from the Investment segment to the Property & Marinas
segment. The comparatives have been reclassified to reflect the changes in presentation.
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 37
2. SummARy oF SIGNIFICANt ACCouNtING PolICIES CoNtINuED
(dd) Reclassification of the Income Statement and Segment Note continued
2011 $’000 $’000
Income Statement re-classification
Revenues as previously reported:
Car park revenue 12,246
Other income 1,847 14,093
Revenues reclassified:
Rental and letting revenue 13,158
Sale of goods 301
Other income 634 14,093
Expenses as previously reported:
Car park occupancy and overheads 9,956
Other corporate and property expenses 3,122 13,078
Expenses reclassified:
Rental and letting costs 11,687
Administration expenses 1,391 13,078
Segment Note re-classificationInvestment
segmentProperty/marinas
segment
Share of associates profit / loss as previously reported 1,213 (1,863)
StayMint amounts reclassified: (908) 908
Share of associates profit / loss reclassified 305 (955)
Profit / loss after income tax as previously reported 3,507 (2,049)
StayMint amounts reclassified: (2,445) 2,445
Profit / loss after income tax reclassified 1,062 396
Other assets as previously reported 40,092 10,075
StayMint amounts reclassified: (6,858) 6,858
Other assets reclassified 33,234 16,933
Total assets as previously reported 43,253 12,358
StayMint amounts reclassified: (6,858) 6,858
Total assets reclassified 36,395 19,216
Impairment provisions (reversals) as previously reported (1,702) (191)
StayMint amounts reclassified: 1,702 (1,702)
Impairment provisions (reversals) reclassified – (1,893)
Segment liabilities as previously reported 46 2,760
StayMint amounts reclassified: (24) 24
Segment liabilities reclassified 22 2,784
Capital expenditure as previously reported 1,145 9
StayMint amounts reclassified: (627) 627
Capital expenditure reclassified 518 636
Notes to Financial Statements
38 | Ariadne Australia Limited • Annual Report 2012
3. SEGmENt INFoRmAtIoN
Segment accounting policiesAn operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose
operating results are regularly reviewed by the entity’s chief operating decision maker. The Group’s operating segments are identified by internal
reporting used by the Board in assessing performance and determining investment strategy. The operating segments are based on a combination of
the type and nature of products sold and/or services provided, and the type of business activity. Discrete financial information about each of these
operating divisions is reported to the Board on a regular basis.
Reportable segments are based on aggregated operating segments determined by the similarity of the products sold and/or the services provided, as
these are the sources of the Group’s major risks. Operating segments are aggregated into one reportable segment when they meet the qualitative and
quantitative requirements for aggregation as prescribed by AASB 8 Operating Segments.
Segment accounting policies are the same as the consolidated entity’s policies described in Note 2.
Segment products and locationsThe Group’s reportable segments are investments, car parking, and property & marinas. The Investments division comprises the Group’s investments in
securities, both listed and non-listed entities. The car parking division includes gross revenues and expenses from car parks whose leases are owned
by Ariadne, as well as the Group’s share of results from the Secure Kings Unit Trust. The property/marinas division includes all results derived from
property, marina and accommodation assets held by the Group, either directly or through joint venture entities or joint venture operations.
The consolidated entity’s operations are located in Australasia.
major customersThe Group has a large number of customers to which it provides both products and services. The Group does not rely on any single customer for a
significant portion of revenues.
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 39
3.
SEGm
ENt
INFo
RmAt
IoN
CoNt
INuE
D
Note
s to
Fin
anci
al S
tate
men
ts INvE
Stm
ENtS
CAR
PARk
ING
PRoP
ERty
/m
ARIN
ASuN
Allo
CAtE
D It
EmS
ElIm
INAt
IoNS
totA
l
Repo
rtab
le s
egm
ent i
nfor
mat
ion
2012
$’
000
2011
* $’
000
2012
$’
000
2011
$’
000
2012
$’
000
2011
* $’
000
2012
$’
000
2011
$’
000
2012
$’
000
2011
$’
000
2012
$’
000
2011
$’
000
Reve
nue
and
Resu
lt
Reve
nue
from
ext
erna
l cus
tom
ers
––
12,7
3012
,246
6,51
52,
176
––
––
19,2
4514
,422
Inte
rest
inco
me
1,56
81,
765
1523
357
274
––
––
1,94
02,
062
Divid
end
inco
me
220
––
––
––
––
–22
0–
Othe
r inc
ome
157
108
–71
0–
–29
3(2
39)
––
450
579
Inte
r-se
gmen
t–
––
––
–88
–(8
8)–
––
Net g
ain
/ (lo
ss) o
n fin
anci
al a
sset
s(1
79)
55–
––
––
––
–(1
79)
55
Net g
ain
/ (lo
ss) o
n bu
sine
ss c
ombi
natio
ns (N
ote
31)
1,23
6–
––
1,44
6–
––
––
2,68
2–
Shar
e of
pro
fit/ (
loss
) of a
ssoc
iate
s1,
223
305
5,05
05,
826
(1,1
35)
(955
)–
––
–5,
138
5,17
6
Tota
l seg
men
t rev
enue
4,22
52,
233
17,7
9518
,805
7,18
31,
495
381
(239
)(8
8)–
29,4
9622
,294
Net p
rofit
/ (lo
ss) f
or th
e ye
ar a
fter i
ncom
e ta
x1,
991
1,06
26,
945
8,55
0(7
11)
396
(2,6
26)
(1,9
41)
––
5,59
98,
067
Asse
ts
Equi
ty a
ccou
nted
inve
stm
ents
incl
uded
in s
egm
ent a
sset
s8,
689
3,16
19,
875
11,1
322,
221
2,28
3–
––
–20
,785
16,5
76
Othe
r ass
ets
23,9
6433
,234
1,74
71,
917
32,9
7116
,933
7,38
37,
143
––
66,0
6559
,227
Tota
l ass
ets
32,6
5336
,395
11,6
2213
,049
35,1
9219
,216
7,38
37,
143
––
86,8
5075
,803
othe
r seg
men
t inf
orm
atio
n
Depr
ecia
tion
and
amor
tisat
ion
170
7523
829
925
914
142
143
––
809
531
Fina
nce
cost
s6
93
–23
321
410
2–
–25
222
5
Impa
irmen
t pro
visio
ns (r
ever
sals
)11
1–
––
(249
)(1
,893
)–
––
–(1
38)
(1,8
93)
Net g
ain
/ (lo
ss) o
n ch
ange
s in
fair
valu
e of
ava
ilabl
e fo
r
sale
ass
ets
(281
)(2
44)
––
––
––
––
(281
)(2
44)
Segm
ent l
iabi
litie
s69
2291
247
8,68
12,
784
1,30
61,
878
––
10,1
474,
931
Capi
tal e
xpen
ditu
re3
518
136
124
1,46
863
638
22–
–1,
645
1,30
0
* Cer
tain
num
bers
sho
wn
here
hav
e be
en re
clas
sifie
d fro
m th
e 20
11 fi
nanc
ial s
tate
men
ts a
nd re
flect
a c
hang
e in
seg
men
t for
the
Grou
p’s
inte
rest
in a
ccom
mod
atio
n se
rvic
es fr
om th
e In
vest
men
t seg
men
t to
the
Prop
erty
& M
arin
as s
egm
ent a
s de
taile
d in
Not
e 2(
dd).
40 | Ariadne Australia Limited • Annual Report 2012
3. SEGmENt INFoRmAtIoN CoNtINuED
ARIADNE GRouP
Notes2012
$’0002011
$’000
Reconciliation of revenue from external customers
Rental and letting income 17,811 13,159
Sale of property 938 963
Sale of goods 496 300
19,245 14,422
Breakdown of unallocated revenue
Corporate management fees 342 (278)
Other unallocated income 39 39
381 (239)
Breakdown of unallocated net profit / (loss) for the year after tax
Corporate employee and director expenses (1,824) (1,697)
Corporate overhead costs (1,183) (1,534)
Income tax benefit – 1,529
Unallocated revenue 381 (239)
(2,626) (1,941)
Breakdown of unallocated assets
Deferred tax asset 6,305 6,305
Corporate property plant and equipment 362 177
Other corporate assets 716 661
7,383 7,143
Breakdown of unallocated liabilities
Directors retirement provision 738 654
Trade creditors 289 726
Other corporate liabilities 279 498
1,306 1,878
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 41
4. REvENuES AND EXPENSES
Revenue and Expenses from Continuing Operations
ARIADNE GRouP
Notes2012
$’0002011
$’000
(a) other income
Net gain / (loss) on trading portfolio (195) –
Net gain / (loss) on available-for-sale investments 16 55
Net gain on business combination 2,682 –
Other income 450 579
2,953 634
(b) Depreciation and amortisation
Depreciation of non-current assets
Plant and equipment 378 200
Leasehold improvements 248 148
Total depreciation of non-current assets 626 348
Amortisation of non-current assets
Intangible assets 183 183
Total amortisation of non-current assets 183 183
809 531
(c) Employee benefits expense
Wages and salaries 3,330 2,242
Workers compensation costs 23 9
Annual leave provision 109 54
Long service leave provision 51 10
Superannuation 235 146
Payroll tax 156 105
Fringe benefits tax 29 5
Share-based payment expense 56 5
3,989 2,576
(d) Impairment provisions / (reversals)
Inventories 6 (448)
Investments (144) (1,445)
(138) (1,893)
Notes to Financial Statements
42 | Ariadne Australia Limited • Annual Report 2012
5. INComE tAX
(a) Income tax expense/(benefit) reconciliationA reconciliation between income tax expense and the product of accounting profit before income tax multiplied by the Group’s applicable income tax
rate is as follows:
ARIADNE GRouP
Notes2012
$’0002011
$’000
Accounting profit/(loss) before income tax 5,202 6,538
At the Group’s statutory income tax rate of 30% (2011: 30%) 1,561 1,961
Expenses which are not allowable deductions for tax purposes
• employee share based payments 17 2
• entertainment 2 4
• other – 6
Benefit of tax losses recognised/(recouped) (1,442) (1,440)
Temporary differences not recognised (138) (533)
Deferred tax asset relating to tax losses not previously brought to account – (1,529)
Income tax expense/(benefit) reported in the Income Statement – (1,529)
(b) Deferred tax asset reconciliation
Opening deferred tax asset arising from tax losses, net of other deferred tax balances 27,251 33,918
Benefit of tax losses recognised/(recouped) (1,442) (1,440)
Prior year (under) / over provision (697) (4,694)
Temporary differences not recognised (138) (533)
Closing deferred tax asset arising from tax losses, net of other deferred tax balances 24,974 27,251
Reconciliation
Deferred tax asset attributable to tax losses recognised as an asset 6,305 6,305
Unrecognised deferred tax asset, arising from tax losses not recognised at
reporting date 18,669 20,946
(i) Deferred tax asset attributable to income tax losses not recognisedAriadne currently has significant carried forward income tax and capital losses that are available to offset future taxable profits. At 30 June 2012, these
are estimated at $83,249 (2011: $90,835) and $149,371 (2011: $148,807) respectively.
The full value attributable to these tax losses has not been recognised as an asset on the Balance Sheet. However, the Ariadne Board has concluded
that there is sufficient evidence to estimate a base level of recurring taxable profit for the next three years, and confirmed the likelihood of these income
tax losses continuing to be available to offset future taxable income. As such, a deferred tax asset of $6,305 (2011: $6,305), equal to the tax payable
on this base level taxable profit, has been recorded on the Balance Sheet.
A deferred tax asset for the balance of tax losses incurred by the Group has not been recognised at reporting date, as realisation of the benefit is not
regarded as probable. The deferred tax asset solely arising from revenue losses from the Group not recognised at reporting date is $18,669 (2011:
$20,946). The value of this deferred tax asset will only be realised if:
(a) future assessable income is derived of a nature and of an amount sufficient to enable to the benefit to be realised;
(b) the conditions for deductibility imposed by tax legislation continue to be complied with; and
(c) no changes in tax legislation adversely affect the consolidated entity in realising the benefit.
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 43
5. INComE tAX CoNtINuED
(ii) tax consolidationAriadne and its 100% owned Australian resident subsidiaries are part of a tax consolidated group. Ariadne is the head entity of the tax-consolidated group.
(c) taxation of financial arrangementsLegislation is in place which changes the tax treatment of financial arrangements. The Group has assessed the potential impact of these changes
on the Group’s tax position. No impact has been recognised and no adjustments have been made to the deferred tax and income tax balances at
30 June 2012 (2011: $Nil).
6. EARNINGS PER ShARE
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of Ariadne by the weighted
average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on
the conversion of all the dilutive potential ordinary shares into ordinary shares.
Notes
ARIADNE GRouP
2012 $’000
2011 $’000
The following reflects the income and share data used in the calculations of basic
and diluted earnings per share:
Net profit / (loss) attributable to the members 5,202 8,067
Earnings used in calculating basic and diluted earnings per share 5,202 8,067
Weighted average number of ordinary shares used in calculating basic earnings per share: 204,380,463 204,893,809
Effect of dilutive securities:
Share options – –
Adjusted weighted average number of ordinary shares used in calculating diluted
earnings per share 204,380,463 204,893,809
7. DIvIDENDS PAID AND PRoPoSED oN oRDINARy ShARES
ARIADNE GRouP
Dividends paid during the year: Notes2012
$’0002011
$’000
Final unfranked dividend of 1.5 cents per share (2011: 1.5 cents) 3,066 3,074
Interim unfranked dividend of 0.5 cents per share (2011: 0.5 cents) 1,022 1,025
4,088 4,099
Dividends proposed:
Final unfranked dividend of 0.5 cents per share (2011: 1.5 cents) 1,022 3,066
As the final unfranked dividend for 2012 was declared after balance date, no liability was recognised at balance date.
Franking AccountThere are insufficient franking credits available for distribution from the franking account. Accordingly, the final dividend for 2012 is unfranked.
Conduit Foreign Income AccountFor the 2012 final dividend, 10% of the dividend is sourced from the parent entity’s Conduit Foreign Income Account (2011: 0%). As a result,
10% of the dividend paid to a non-resident shareholder will not be subject to Australian withholding tax.
Notes to Financial Statements
44 | Ariadne Australia Limited • Annual Report 2012
8. CASh AND CASh EQuIvAlENtS
Notes
ARIADNE GRouP
2012 $’000
2011 $’000
Cash at call 12,946 17,280
Cash on term deposit 2,225 5,630
15,171 22,910
9. tRADE AND othER RECEIvABlES (CuRRENt)ARIADNE GRouP
Notes2012
$’0002011
$’000
Trade receivables (i) 1,207 1,107
Related party receivables:
Associated entities 1,544 2,830
Provisions (ii) (400) (500)
Other receivables (iii) 3,806 3,283
6,157 6,720
Reconciliation of amounts provided against related party receivables:
Opening balance (500) (94)
Arising during the year (400) (500)
Utilised or reversed 500 94
Closing balance (400) (500)
(i) Trade receivables are non-interest bearing and are generally on 30-day terms. An allowance for doubtful debts is made when there is objective evidence that a trade receivable is impaired.
An allowance of Nil (2011: Nil) has been recognised as an expense for which such evidence exists.
There are no significant receivables individually or in aggregate past due but not impaired.
(ii) An allowance for diminution of $400 (2011: $500) has been recognised against current receivables from associated entities. The amount of the allowance/impairment loss is measured
as the difference between the carrying amount of the receivables and the estimated future cash flows expected to be received.
(iii) At 30 June 2012 an amount of $2.75 million was placed in a secured cash deposit to secure borrowing obligations of associate entities.
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 45
10. INvENtoRIES (CuRRENt)ARIADNE GRouP
Notes2012
$’0002011
$’000
Interest in development properties
Opening property development inventories 3,932 4,339
Development costs capitalised 472 139
Cost of sales (940) (994)
Impairment reversal/(provisions) (6) 448
Total property development inventories at the lower of cost and net realisable value 3,458 3,932
Other inventories 61 29
Total inventories at the lower of cost and net realisable value 3,519 3,961
Inventory with a carrying value of $3,401 (2011: $3,000), forming part of the total inventory balance above has been pledged as direct security for
borrowings. Borrowings are for property activities to which the inventories specifically relate. Total Group borrowings for which inventories have been
pledged as security amounts to $1,950 (2011: $2,400).
11. othER CuRRENt ASSEtSARIADNE GRouP
Notes2012
$’0002011
$’000
Held for trading financial assets 882 –
Prepayments and other assets 1,164 734
2,046 734
12. RECEIvABlES (NoN-CuRRENt)ARIADNE GRouP
Notes2012
$’0002011
$’000
Related entity loans and advances:
Associated entities 7,546 17,039
Provision for diminution – (5,696)
7,546 11,343
A provision for diminution is made when there is objective evidence that a receivable is impaired. The amount of the allowance/impairment loss is
measured as the difference between the carrying amount of the receivables and the estimated future cash flows expected to be received. An allowance
of $256 has been reversed during the year ended June 2012 (2011: $1,446). During the year, the Group acquired control of an associate eliminating
a material receivable and the associated provision; additional details are provided in Note 31(b). During the prior year, the Group advanced funds to an
associate as part of the associate’s restructuring of a finance facility.
Notes to Financial Statements
46 | Ariadne Australia Limited • Annual Report 2012
13. othER FINANCIAl ASSEtS (NoN-CuRRENt)ARIADNE GRouP
Notes2012
$’0002011
$’000
Available for sale financial assets
Shares in listed entities at carrying value 7,548 5,571
Shares in unlisted entities at carrying value – 268
Net movement in fair value reserve (294) (13)
Provision for diminution (55) (313)
7,199 5,513
14. INvEStmENtS IN ASSoCIAtES
(a) Details of the Group’s associates:
Name of associate Principal activityPlace of incorporation
Proportion of ownership interest and voting power held by the Group
2012 2011
Secure Kings Unit Trust Car parking NSW 50% 50%
Orams NZ Unit Trust Marina management QLD 50% 50%
Freshxtend International Pty Ltd (i) Food life extension technology QLD – 48%
NatureSeal Inc Food life extension technology US 17% –
AgriCoat NatureSeal Ltd Food life extension technology UK 17% –
AS Strata Services Unit Trust (ii) Management and letting rights QLD – 50%
Mamre Road Unit Trust Logistics infrastructure development NSW 50% 50%
Logos Property Unit Trust (iii) Logistics infrastructure management NSW – 50%
Lake Gold Pty Ltd Dormant QLD 50% 50%
(i) During the 2011 financial year, the Group held a 47.8% interest in Freshxtend International Pty Limited and accounted for the investment as an associate. On 9 November 2011, 7.8% of the
ordinary shares of Freshxtend were cancelled as part of a selective capital reduction under Section 256(c) of the Corporations Act. Further, on 29 November 2011, the Group (and an unrelated
entity) exercised share options in Freshxtend for $267.
As a result the Group’s holding increased to 54.1% and control was gained at this date for accounting purposes (refer Note 31(a)).
(ii) During the 2012 financial year, the Group held a 50% interest in AS Strata Services and accounted for the investment as an associate. On 29 June 2012, the Group, through its wholly owned
subsidiary, Peramist Pty Ltd, completed a transaction with Watpac Developments Pty Ltd to acquire its 50% interest in AS Strata Services Unit Trust trading as StayMint, increasing the Group’s
ownership to 100% (refer Note 31(b)). During the financial year, the Group’s share of the net profit recorded by the AS Strata Services Unit Trust was $(1,052) (2011: $908).
(iii) During the 2011 financial year the Group executed agreements to exit from Logos Property Unit Trust.
The consolidated entity’s share of associates’ commitments and contingent liabilities is disclosed in Note 24.
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 47
14. INvEStmENtS IN ASSoCIAtES CoNtINuEDARIADNE GRouP
Notes2012
$’0002011
$’000
(b) Share of associates’ revenue and profit:
Revenue 119,952 110,269
Profit 5,138 5,176
(c) Share of associates’ statement of financial position:Current assets 24,795 23,616
Non-current assets 33,181 47,517
Total assets 57,976 71,133
Current liabilities 22,414 (38,271)
Non-current liabilities 19,280 (22,138)
Total liabilities 41,694 (60,409)
Net assets 16,282 10,724
(d) Reconciliation of carrying amount of investment in associates
Balance at the beginning of the financial year 16,576 15,860
Share of associate’s profits for the financial year 5,138 5,176
Share of associate’s reserves 382 (411)
Provisions (210) –
Distributions received (7,283) (4,350)
Investments acquired – 803
Consolidation adjustments 5,130 –
Transferred to/(from) provisions against receivables from associate 1,052 (502)
Carrying amount of investment in associates at the end of the financial year 20,785 16,576
Notes to Financial Statements
48 | Ariadne Australia Limited • Annual Report 2012
15. CoNtRollED ENtItIES
Place of incorporation
PERCENtAGE oF EQuIty hElD By thE ARIADNE GRouP
NAmE 2012 2011
Adnam Pty Ltd QLD 100 100
Ariadne Administration Pty Ltd QLD 100 100
Ariadne Capital Pty Ltd QLD 100 100
Ariadne Holdings Pty Ltd ACT 100 100
Ariadne Infrastructure Projects 1 Unit Trust QLD 100 75
Ariadne Investment Holdings Pty Ltd QLD QLD 100 100
Ariadne Marinas Oceania Pty Ltd QLD 100 100
Ariadne Properties Pty Ltd QLD 100 100
Ariadne Property Investments Pty Ltd QLD 100 100
AS Strata Services Unit Trust QLD 100 50
Atarc Pty Ltd QLD 100 100
Australian Calcium Industries Pty Ltd QLD 100 100
Batemans Bay Marina Developments Pty Ltd QLD 100 100
Boulevard Parking Pty Ltd QLD 100 100
Brunmere Pty Ltd QLD 100 100
Climate Connection Pty Ltd QLD 100 75
Enallage Pty Ltd QLD 100 100
Freshxtend Australasia Pty Ltd QLD 100 100
Freshxtend International Pty Ltd QLD 54 48
Freshxtend Technologies Corp CAD 54 48
Impala Pacific Corporation Ltd HK 100 100
Kings Parking (NSW) Pty Ltd QLD 100 100
Kings Parking (VIC) Pty Ltd QLD 100 100
Kings Parking Corporate Pty Ltd QLD 100 100
Kings Parking Metrotrans Pty Ltd QLD 100 100
Kings Queensland Pty Ltd QLD 100 100
Mekmere Pty Ltd QLD 100 100
Memvale Pty Ltd QLD 100 100
Montbar Pty Ltd QLD 100 100
New York Enterprises Pty Ltd QLD 100 100
Pacific Rim Foods Inc CAD 54 48
Pacific Rim Marketing Limited AIA 54 48
Peramist Pty Ltd QLD 100 100
Periman Pty Ltd QLD 100 100
Portfolio Services Pty Ltd (formerly Gibsbourne Pty Ltd) QLD 100 100
Revmist Pty Ltd QLD 100 100
StayMint Pty Ltd QLD 100 50
Valjul Pty Ltd QLD 100 100
Victari Finance Pty Ltd QLD 100 100
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 49
16. PRoPERty, PlANt AND EQuIPmENtARIADNE GRouP
Notes2012
$’0002011
$’000
Buildings
Cost 3,110 –
Accumulated depreciation and impairment – –
Net carrying amount 3,110 –
Plant and equipment
Cost 3,420 1,701
Accumulated depreciation and impairment (1,242) (919)
Net carrying amount 2,178 782
Leasehold improvements
Cost 997 858
Accumulated depreciation and impairment (468) (220)
Net carrying amount 529 638
Total property, plant and equipment - net carrying amount 5,817 1,420
Reconciliations
Buildings
At 1 July, net of accumulated depreciation and impairment – –
Additions – –
Acquisition of subsidiary (Note 31(b)) 3,110 –
Disposals – –
Depreciation – –
At 30 June, net of accumulated depreciation and impairment 3,110 –
Plant and equipment
At 1 July, net of accumulated depreciation and impairment 782 322
Additions 1,513 661
Acquisition of subsidiary (Note 31(b)) 268 –
Disposals (7) (1)
Depreciation (378) (200)
At 30 June, net of accumulated depreciation and impairment 2,178 782
Leasehold Improvements
At 1 July, net of accumulated depreciation and impairment 638 152
Additions 136 640
Acquisition of subsidiary (Note 31(b)) 3 –
Disposals – (6)
Depreciation (248) (148)
At 30 June, net of accumulated depreciation and impairment 529 638
Notes to Financial Statements
50 | Ariadne Australia Limited • Annual Report 2012
17. INtANGIBlE ASSEtSARIADNE GRouP
Notes2012
$’0002011
$’000
Investment in car park licence
Cost (gross carrying amount) 2,200 2,200
Accumulated amortisation (2,060) (1,879)
Net carrying amount 140 321
Investment in management letting rights
Cost (gross carrying amount) 12,165 –
Accumulated amortisation – –
Net carrying amount 12,165 –
Total intangibles - net carrying amount 12,305 321
Reconciliation
Investment in car park licence
At 1 July, net of accumulated amortisation and impairment 321 505
Amortisation (181) (184)
At 30 June, net of accumulated amortisation and impairment 140 321
Investment in management letting rights
At 1 July, net of accumulated amortisation and impairment – –
Acquisition of subsidiary (Note 31(b)) 12,165 –
Amortisation – –
At 30 June, net of accumulated amortisation and impairment 12,165 –
The investment in car park licence relates to the Group’s ownership of a licence to operate the Nepean Hospital car park, NSW. This intangible asset
has been assessed as having a finite life and is amortised using the straight-line method over a period of 12 years. The investment in management
letting rights (“MLR”) relates to the Group’s ownership of four MLRs based in Queensland. These intangible assets have been assessed as having
a finite life and are amortised using the straight-line method over a period of 40 years. If an impairment indicator arises, the recoverable amount is
estimated and an impairment loss recognised to the extent that the carrying amount exceeds the asset’s recoverable amount.
18. tRADE AND othER PAyABlESARIADNE GRouP
2012 $’000
2011 $’000
Current
Trade creditors and accruals 501 844
Other creditors 1,572 831
2,073 1,675
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 51
19. INtERESt-BEARING loANS AND BoRRowINGS
ARIADNE GRouP
Notes2012
$’0002011
$’000
Current
Secured:
Advanced facilities and commercial bills 6,950 2,400
6,950 2,400
Variable rate advance facilities and commercial bills are provided by external financial institutions. These facilities are secured against the assets to
which they relate. $5,000 is repayable on demand and $1,950 is repayable 30 October 2012, both facilities are expected to be extended for a further
12 months on similar terms.
Financing facilities available The Group’s financing facilities predominantly relate to property activities. At balance sheet date, the following financing facilities had been negotiated
and were available:
Total facilities
- bank loans and lease facilities 13,450 2,400
- other facilities not recorded on the Group’s Balance Sheet 4,305 1,190
Facilities used at reporting date
- bank loans and lease facilities 6,950 2,400
- other facilities not recorded on the Group’s Balance Sheet 3,683 632
Facilities unused at reporting date
- bank loans and lease facilities 6,500 –
- other facilities not recorded on the Group’s Balance Sheet 622 558
Other facilities not recorded on the Group’s Balance Sheet predominately relate to a bank guarantee facility. The Group has issued bank guarantees to
lessors as security for leases.
20. PRovISIoNS
Notes
Employee benefits
$’000
Directors’ retirement benefits
$’000total
$’000
As at 1 July 2011 202 654 856
Arising during the year 296 84 380
Acquisition of subsidiary (Note 31(b)) 70 – 70
(Utilised) (182) – (182)
At 30 June 2012 386 738 1,124
Current 2012 369 607 976
Non-current 2012 17 131 148
386 738 1,124
Current 2011 102 – 102
Non-current 2011 100 654 754
202 654 856
Notes to Financial Statements
52 | Ariadne Australia Limited • Annual Report 2012
21. CoNtRIButED EQuIty AND RESERvES
ARIADNE GRouP
Notes2012
$’0002011 $’000
(a) ordinary Shares
Issued and fully paid 382,842 382,842
(b) movement in ordinary shares on issue
2012 2011
Notes Number of shares $’000 Number of shares $’000
At beginning of the financial year 204,380,463 382,842 204,939,780 383,018
Cancelled during the year:
- unmarketable parcels (i) – – (559,317) (176)
Balance at financial year end 204,380,463 382,842 204,380,463 382,842
(i) On 15 April 2011, Ariadne announced it would undertake a scheme to buy-back unmarketable parcels. This process was completed on 31 May 2011 with 559,317 shares cancelled.
(c) Share options
Employee options over ordinary shares in Ariadne Australia Limited:
Date of issue Notes 31 may 2011 21 Dec 2007
On issue at beginning of year 1,500,000 1,175,000
Issued during the year –
Exercised during the year – –
Expired during the year – –
(i) – –
Outstanding at balance date 1,500,000 1,175,000
Outstanding at date of Directors’ Report 1,500,000 1,175,000
Number of recipients holding outstanding options 2 2
Exercise price (cents) 35 52
Exercise period 31/05/2013 to 21/12/2009 to
30/05/2016 20/12/2012
Expiry date 30/05/2016 20/12/2012
(i) In accordance with the terms and conditions, options expired either on cessation of employment in the event where vesting conditions have not yet been met, or 3 months after cessation of
employment where vesting conditions had previously been met. This is prior to normal expiry date had employment not ceased.
Each option entitles the holder to purchase one ordinary share in Ariadne. Details of terms and conditions of the options are set out in Note 30.
The actual value of the options will only be determined after the exercise period commences and when the options are exercised. The options
have a vesting period of two years from the date the option is issued followed by an exercise period of three years. The options may not be
exercised during the vesting period. If options are not exercised in the exercise period, they lapse, and therefore have a nil value.
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 53
21. CoNtRIButED EQuIty AND RESERvES CoNtINuED
(d) terms and conditions of contributed equity
Ordinary sharesOrdinary shares have the right to receive dividends as declared and, in the event of winding up the company, to participate in the proceeds from the
sale of all surplus assets in proportion to the number of and amounts paid up on shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company.
(e) Reserves
Share options
reserve $’000
Available for sale reserve
$’000
Foreign currency
translation reserve
$’000
Profit reserve
$’000
Capital profits
reserve $’000
total $’000
At 1 July 2010 975 231 (495) – 3,105 3,816
Currency translation differences – – (419) – – (419)
Transfer to accumulated losses (778) – – – (150) (928)
Other movements 5 (244) – – – (239)
At 30 June 2011 202 (13) (914) – 2,955 2,230
Currency translation differences – – 368 – – 368
Current year profits carried to profit
reserve – – – 7,066 – 7,066
Dividends – – – (1,022) – (1,022)
Other movements 56 (281) – – – (225)
At 30 June 2012 258 (294) (546) 6,044 2,955 8,417
Nature and purpose of reserves
Share options reserveThe share options reserve is used to record the value of equity benefits outstanding, provided to employees and Directors as part of their remuneration.
Available for sale reserveThe available for sale reserve records the Group’s share of movements in the fair value of available-for-sale financial assets.
Foreign currency translation reserveThe foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign
subsidiaries and associates with a non-Australian dollar functional currency.
Profit reserveThe profit reserve is used to accumulate distributable profits, preserving the characteristics of profit by not appropriating against prior year accumulated
losses. The reserve can be used to pay taxable dividends.
The 30 June 2012 amount carried to profit reserve (in accordance with a resolution of directors) of $7,066 includes an amount of $2,458 relating
to subsidiary entities and is not available for distribution as frankable dividends to the equity holders of Ariadne at 30 June 2012.
Capital profits reserveThe capital profits reserve is used to accumulate realised capital profits. The reserve can be used to pay dividends or issue bonus shares.
Notes to Financial Statements
54 | Ariadne Australia Limited • Annual Report 2012
21. CoNtRIButED EQuIty AND RESERvES CoNtINuED
(f) Accumulated losses
ARIADNE GRouP
Notes2012
$’0002011
$’000
Opening balance (314,200) (319,096)
Profit / (loss) not carried to profit reserve (1,864) 8,067
Transfers from reserves 21(e) – 928
Dividends (3,066) (4,099)
Closing balance (319,130) (314,200)
22. CASh Flow StAtEmENt RECoNCIlIAtIoNReconciliation of the net profit after tax to the net cash flows from operations
ARIADNE GRouP
Notes2012
$’0002011
$’000
Net profit 5,599 8,067
Adjustments for:
Depreciation and amortisation of non-current assets 809 531
Net (gain) / loss on disposal of plant and equipment 7 –
Net (gain) / loss on sale of investments (16) (55)
Net gain on business combination (2,682) –
Share of (profits) / losses of associates (5,138) (5,176)
Receipts from associates 7,283 4,350
Share options expense 56 5
Increase in deferred tax asset – (1,529)
Other non-cash items – (591)
Transfers to/(from) provisions:
Employee entitlements 114 40
Directors retirements 84 88
Provision for impairment (138) (1,895)
Changes in assets and liabilities:
(Increase)/decrease in trade and other receivables 577 2,610
(Increase)/decrease in inventory 462 844
(Increase)/decrease in held for trading financial assets (882) –
(Increase)/decrease in prepayments (346) 28
(Decrease)/increase in payables and accruals (598) 824
Net cash from operating activities 5,191 8,141
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 55
23. FINANCIAl INStRumENtS
(a) Financial risk management objectives and policiesThe Group’s principal financial instruments include cash and short-term deposits, bank loans and receivables. These financial instruments are
maintained to ensure the Group’s operations are appropriately and efficiently financed through a combination of debt and equity, and to enable future
investment activities to be undertaken in accordance with the strategic directives of management and the Board.
The Group also has a number of other financial assets and liabilities, such as trade receivables and trade payables. These arise directly from operating
activities and comprise working capital balances.
The main risks arising from the Group’s financial instruments are price risk and credit risk. The Group’s price risk and credit risk policies are included in
Note 23(d) and Note 23(e) below. Policies for managing these risks are issued by the Board.
Details of the significant accounting policies and methods adopted, including criteria for recognition, the basis for measurement and the basis on which
income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2 to the
financial statements.
(b) Interest rate riskThe Group’s exposure to the risk of changes in market interest rates primarily affects cash on deposit. The Group’s policy with respect to controlling this
risk is to utilise a mix of fixed and variable deposits with terms matched to known cash flows, taking into consideration rates offered at various financial
institutions. Reviews of cash deposits, future cash needs and rates offered on various financial products take place regularly. Consideration is given to
potential renewals of existing positions, alternative products and investment options, substitute financing arrangements, alternative hedging positions,
terms of deposits/borrowings and interest rate exposure. Where appropriate, fixed rate interest instruments are negotiated to mitigate any significant
rate movement.
At balance date, the Group had the following mix of financial assets and liabilities exposed to Australian variable interest rate risk:
ARIADNE GRouP
2012 $’000
2011 $’000
Financial Assets
Cash and cash equivalents 15,171 22,910
Related party loans 845 2,015
Other loans 800 –
Total financial assets exposed to interest rate risk 16,816 24,925
Financial liabilities
Advanced facilities and commercial bills 6,9t50 2,400
Total financial liabilities exposed to interest rate risk 6,950 2,400
Net exposure 12,616 22,525
Notes to Financial Statements
56 | Ariadne Australia Limited • Annual Report 2012
23. FINANCIAl INStRumENtS CoNtINuED
The following sensitivity analysis is based on the interest rate risk exposures in existence throughout the period. If interest rates had been higher or
lower as illustrated in the table below, with all other variables held constant, post tax profit would have been affected as follows (there would be no
other effect on equity):
Post tax profit higher / (lower)
2012 $’000
2011 $’000
Ariadne Group
+1% (100 basis points) 182 268
- 1% (100 basis points) (182) (268)
The movement in profit is due to higher / lower interest rates from variable rate cash deposits and debt.
The estimated effect on Group profit that would arise as a result of a change to variable rates as disclosed above reflects the net cash position of the
Group throughout the year.
(c) Foreign currency riskAs at 30 June 2012, the Group did not have any significant exposure to movements in foreign exchange rates on any of its financial instruments.
Throughout the year the Group conducted business with international associates and suppliers involving transactions in foreign currencies. The Group’s
exposure to movements in exchange rates is minimal due to the small number, size and nature of these operational transactions.
(d) Price riskThe Group may at times be exposed to equity price risk arising from holding equity securities. Equity investments are held for both strategic and
trading purposes.
At reporting date, the exposure to listed equity securities is $8,078 (2011: $5,499). If equity price investments had been 10% higher or lower at
balance date, the Group would be impacted through income or equity by $808 higher/lower (2011: $550).
The Group’s sensitivity to equity price risk has increased during the year, as a result of an increase in the size of the equity portfolio.
(e) Credit riskCredit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and
arises principally from the Group’s receivables and cash on deposits.
Management has credit policies in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all
counterparties and customers requiring material credit amounts. Credit risk is spread across counterparties when possible, and where appropriate
collateral and other guarantees in respect of financial assets are required.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the Balance Sheet.
There are no receivables as at the reporting date that management considered unlikely to be recoverable and no material receivables are past due that
have not already been provided for in Note 9.
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 57
23. FINANCIAl INStRumENtS CoNtINuED
(f) liquidity riskThe Group manages liquidity risk by maintaining adequate cash reserves and banking facilities. Forecast and actual cash flows are continuously
monitored with the maturity profiles of the majority of financial assets and liabilities matched.
The liquidity analysis below has been determined based on contracted maturity dates and circumstances existing at reporting date. The expected timing
of actual cash flows from these financial instruments may differ.
ARIADNE GRouP
2012 $’000
2011 $’000
6 months or less 8,903 4,052
6 – 12 months 3 –
1 – 5 years – –
Total financial liabilities exposed to liquidity risk 8,906 4,052
(g) Net fair valuesThe carrying amounts and estimated net fair values of financial assets and financial liabilities for the Group held at balance date are disclosed below. The net fair value of a financial asset or a financial liability is the amount at which the asset could be exchanged, or liability settled in a current transaction between willing parties after allowing for transaction costs.
The net fair values of the financial instruments of the Group approximates carrying values.
The following methods and assumptions are used to determine the net fair value of each class of financial instrument:
CashThe carrying amount approximates fair value because of its short-term to maturity.
InvestmentsFor financial instruments traded in organised financial markets, fair value is the current quoted market bid price for an asset or offer price for a liability, adjusted for transaction costs necessary to realise the asset or settle the liability. For investments where there is no quoted market price, a reasonable estimate of the fair value is determined by reference to the current market value of another instrument which is substantially the same or is calculated based on the expected cash flows or the underlying net asset base of the investment/security.
trade and sundry debtorsThe carrying amount approximates fair value.
Accounts payableThe net fair value of accounts payable is based on the expected future cash out flows required to settle liabilities. As such carrying value approximates net fair value.
loans to and from related partiesThe net fair value of loans receivable and payable is based on expected future cash flows.
Advance facilities and commercial bills The net fair value of advance facilities and commercial bills is equal to the face value of these facilities at balance date net of borrowing costs.
Notes to Financial Statements
58 | Ariadne Australia Limited • Annual Report 2012
24. CommItmENtS AND CoNtINGENCIES
(a) Capital expenditure commitmentsThere are no capital expenditure commitments of the Group or in jointly controlled associates at 30 June 2012.
(b) lease commitments
ARIADNE GRouP
2012 $’000
2011 $’000
(i) operating leases (non-cancellable) – Group as lessee:
Minimum lease payments
• not later than one year 77,835 75,784
• later than one year and not later than five years 143,112 169,241
• later than five years 78,627 63,195
Aggregate lease expenditure contracted for at reporting date 299,574 308,220
The Group and its associates enter into operating leases as a means of acquiring access to car parks, marinas and accommodation. The Group and
its associates also enter into commercial leases for certain items of plant and equipment. The Group’s share of lease commitments of its combined
interests in associates included above is $205,204 (2011: $207,964)
ARIADNE GRouP
2012 $’000
2011 $’000
(ii) operating leases (non-cancellable) – Group as lessor:
Minimum lease receipts
• not later than one year 226 –
• later than one year and not later than five years 517 –
• later than five years 50 –
Aggregate lease income contracted for at reporting date 793 –
The Group and its associates enter into operating leases as a means of securing long term commercial tenants.
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 59
24. CommItmENtS AND CoNtINGENCIES CoNtINuED
(c) Contingent liabilities
Controlled entities and associatesAriadne has given guarantees and indemnities in relation to the borrowings and performance of several of its controlled and associate entities under
agreements entered into by those entities.
The guarantees provided on behalf of associates for finance facilities are as follows:
ARIADNE GRouP
2012 $’000
2011 $’000
Secure Kings Unit Trust 20,455 20,455
AS Strata Services Unit Trust – 5,000
Orams NZ Unit Trust 19,493 4,628
39,948 30,083
All borrowings are directly supported by assets in the entities on behalf of which these guarantees and indemnities have been provided. Ariadne is
therefore of the view that the risk of the Group being called upon to fulfil any guarantee obligations is minimal and the fair value of the guarantees is
not considered to be material.
The assets provided by Secure Kings Unit Trust as security in relation to its finance facilities are sufficient to meets its obligations and include cash on
deposit with a facility provider that totalled $8,100 as at 30 June 2012 (2011: $8,300).
The AS Strata Services Unit Trust became a controlled entity from 29 June 2012 as part of the StayMint business combination set out in Note 32(b).
The assets provided by Orams NZ Unit Trust as security in relation to its finance facilities are sufficient to meets its obligations. The guarantee provided by
Ariadne on behalf of the Orams NZ Unit Trust is limited to NZ$24,895 (2011: NZ$6,000), additional cash security of $2,750 was provided 29 June 2012.
Details of finance facilities for the controlled entities are included in Note 19. The parent entity has guaranteed the borrowing obligation under
these facilities.
In addition to guarantees relating to financing, Ariadne has provided a guarantee on behalf of a subsidiary for development works. The subsidiary has
lodged an application for development works; if and when the development consent is granted, the subsidiary will be subject to various undertakings
and obligations. Ariadne’s liability is capped at $4,000 (2011: $4,000).
Notes to Financial Statements
60 | Ariadne Australia Limited • Annual Report 2012
25. INtEREStS IN JoINtly CoNtRollED oPERAtIoNSINtERESt hElD
The Group has the following interests in property projects with other consortium members:
2012 %
2011 %
Coolum Caravan Park Joint Venture 50 50
Skyline Joint Venture 33 33
ARIADNE GRouP
Net assets employed in the joint venture operations are included in the financial statements as follows:
2012 $’000
2011 $’000
CuRRENt ASSEtS
Cash and cash equivalents 69 90
Inventories – 932
totAl CuRRENt ASSEtS 69 1,022
NON-CURRENT ASSETS
Fixed assets – –
totAl NoN-CuRRENt ASSEtS – –
totAl ASSEtS 69 1,022
CuRRENt lIABIlItIES
Trade and other payables – 1
totAl CuRRENt lIABIlItIES – 1
NoN-CuRRENt lIABIlItIES
Non-current liabilities – –
totAl NoN-CuRRENt lIABIlItIES – –
totAl lIABIlItIES – 1
NEt ASSEtS 69 1,021
The financial results from the Group’s share of joint venture operations are included in the financial statements as follows:
Income 943 972
Expenses (948) (1,032)
NEt INComE/(loSS) (5) (60)
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 61
26. RElAtED PARty DISCloSuRES
ultimate parentAriadne Australia Limited is the ultimate parent company.
wholly-owned group transactionsAriadne entered into the following transactions during the year with related parties in the wholly owned Group.
– Loans were advanced and repayments were received on intercompany accounts receivable.
– Advances were received and repayments were made on intercompany accounts payable.
– Management and directors fees were received and payments were made between intercompany accounts.
During the financial year, controlled entities provided management and administration services to both Ariadne and to other members of the Group.
In certain instances the costs of providing these services has been borne by the controlled entities that provided the services.
other related party transactionsDetails of transactions with other related parties are as follows:
ARIADNE GRouP
transaction type Class of related party Notes2012
$’0002011
$’000
loans to other related parties
Loans advanced / payables Associated entities 2,393 6,457
Loan repayments received Associated entities – 360
other transactions
Interest received or receivable Associated entities 408 352
Management fees received or receivable Associated entities 255 (78)
Management fees paid or payable Associated entities 654 791
Dividends and Distributions received Associated entities 7,238 4,350
Provisions recorded against receivables Associated entities 1,453 663
Provisions reversed against receivables Associated entities 256 2,610
All transactions with related parties are conducted on normal commercial terms and conditions.
27. EvENtS AFtER thE BAlANCE DAtE
After the balance sheet date, the Directors of Ariadne Australia Limited declared a dividend on ordinary shares in respect of the 2012 financial year.
The total amount of the dividend is $1,022 which represents an unfranked dividend of 0.5 cents per share.
After the balance sheet date, Ariadne entered into a put and call agreement with CCP BidCo Pty Ltd as part of an on market takeover offer for Clearview
Wealth Limited (“CVW”). If the takeover bid is successful Ariadne would have the right and/or obligation to purchase up to 7,216,876 CVW shares at
$0.50 per share. On full take up Ariadne would hold 4.6% of the issued capital of CVW. CVW is an ASX-listed financial services company providing life
insurance, wealth management and financial planning solutions in Australia.
Notes to Financial Statements
62 | Ariadne Australia Limited • Annual Report 2012
28. AuDItoRS’ REmuNERAtIoN
ARIADNE GRouP
2012 $’000
2011 $’000
Amounts received or due and receivable by Ernst and young for:
An audit or review of the financial report of the entity and any other entity in the group 153,279 212,920
Taxation and other services in relation to the entity and any other entity in the consolidated group 38,400 63,400
191,679 276,320
29. PARENt ENtIty INFoRmAtIoN
ARIADNE
2012 $’000
2011 $’000
Information relating to Ariadne Australia limited
Current assets 6,000 4,500
Total assets 26,321 25,109
Current liabilities (1,159) –
Total liabilities (1,289) (654)
Issued capital 382,842 382,842
Reserve – capital profits 2,114 2,114
Reserve – profits 3,586 –
Reserve – options 258 202
Accumulated (losses) (363,768) (360,703)
Total shareholders’ equity 25,032 24,455
Profit of the parent entity 4,608 10,712
Total comprehensive income of the parent entity 4,608 10,712
The profits for the year ended 30 June 2012 were resolved by the Directors to be carried to the Profit Reserve and to remain available for distribution
as frankable dividends to the members.
After the balance sheet date, Ariadne Australia Limited entered into a put and call agreement with CCP BidCo Pty Ltd as part of an on market
takeover offer for Clearview Wealth Limited (“CVW”). If the takeover bid is successful Ariadne would have the right and/or obligation to purchase up
to 7,216,876 CVW shares at $0.50 per share. On full take up Ariadne would hold 4.6% of the issued capital of CVW. CVW is an ASX-listed financial
services company providing life insurance, wealth management and financial planning solutions in Australia.
Details of guarantees given are recorded in Note 24(c).
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 63
30. DIRECtoR AND EXECutIvE DISCloSuRES
(a) Details of key management personnel
(i) Directors
D Z Baffsky, AO Chairman
K W Seymour, AM Deputy Chairman
M W Loomes Non-Executive Director
J W Murphy Non-Executive Director
G H Weiss Executive Director
(ii) Executives
M R Boyte Chief Executive Officer
D A Weiss Investment Officer
N M McMahon Chief Financial Officer / Company Secretary (appointed 18 May 2012)
W J Bamford Chief Financial Officer / Company Secretary (appointed 15 July 2010, resigned 18 May 2012)
(b) Remuneration of key management personnel
ARIADNE GRouP
Notes2012
$’0002011
$’000
Employee and Directors’ Remuneration
Short term employee benefits 1,884 1,394
Post-employment benefits 146 110
Share based payment 56 5
Total compensation 2,086 1,509
Employee and Directors’ leave and Retirement Benefits
Provisions (current) 20 976 102
Provisions (non-current) 20 148 754
Aggregate benefit liability 1,124 856
Superannuation CommitmentsAll superannuation payments on behalf of Directors and staff of the Group are paid to externally administered superannuation funds. The Group makes
contributions in accordance with Superannuation Guarantee Legislation. The value of superannuation in connection with services performed in the
2012 financial year has been disclosed Note 4(c).
Employee Share Incentive SchemeAn employee share scheme has been established where Ariadne may, at the discretion of the Directors, grant options over the ordinary shares of the
company to Executives and certain members of staff. The options, issued for nil consideration, are granted in accordance with performance guidelines
established by the Directors of Ariadne. The Board of Ariadne retains the final discretion on the issue of the options. The options are issued for a term of
three years and are exercisable two years from the date of grant. The options cannot be transferred and will not be quoted on the ASX.
Notes to Financial Statements
64 | Ariadne Australia Limited • Annual Report 2012
30. DIRECtoR AND EXECutIvE DISCloSuRES CoNtINuED
(c) option holdings of Directors and Executives
Balance at beginning of period
Granted as Remuner-
ationoptions
Exercisedoptions Expired
Balance at end of period Granted at 30 June 2012
1 July 2011 30 June 2012 total Not exercisable Exercisable
Directors
D Z Baffsky, AO – – – – – – – –
K W Seymour, AM – – – – – – – –
M W Loomes – – – – – – – –
J W Murphy – – – – – – – –
G H Weiss – – – – – – – –
Executives
M R Boyte 2,000,000 – – – 2,000,000 2,000,000 1,000,000 1,000,000
D A Weiss 675,000 – – – 675,000 675,000 500,000 175,000
N M McMahon – – – – – – – –
W J Bamford – – – – – – – –
Total 2,675,000 – – – 2,675,000 2,675,000 1,500,000 1,175,000
Balance at beginning of period
Granted as Remuner-
ationoptions
Exercisedoptions Expired
Balance at end of period Granted at 30 June 2011
1 July 2010 30 June 2011 total Not exercisable Exercisable
Directors
D Z Baffsky, AO – – – – – – – –
K W Seymour, AM – – – – – – – –
M W Loomes 100,000 – – (100,000) – – – –
J W Murphy – – – – – – – –
G H Weiss – – – – – – – –
Executives
M R Boyte 2,000,000 1,000,000 – (1,000,000) 2,000,000 2,000,000 1,000,000 1,000,000
D A Weiss 175,000 500,000 – – 675,000 675,000 500,000 175,000
W J Bamford – – – – – – – –
Total 2,275,000 1,500,000 – (1,100,000) 2,675,000 2,675,000 1,500,000 1,175,000
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 65
30. DIRECtoR AND EXECutIvE DISCloSuRES CoNtINuED
(c) option holdings of Directors and Executives contined
Information with respect to the number of options granted under the employee share incentive scheme is as follows:
2012 2011
NotesNumber of
optionsweighted average
exercise price $Number of
optionsweighted average
exercise price $
Balance at beginning of year 21(c) 2,675,000 0.42 2,275,000 0.45
- granted 21(c) – – 1,500,000 0.35
- forfeited/expired 21(c) – – (1,100,000) 0.37
- exercised 21(c) – – – –
Balance at end of year 21(c) 2,675,000 0.42 2,675,000 0.42
Exercisable at end of year 1,175,000 0.52 1,175,000 0.52
(d) Shareholdings of Directors and Executives
Ordinary shares held in Ariadne Australia Limited
Balance 1 July 2011
Granted as Remuneration
on Exercise of options
Net Change other
Balance 30 June 2012
Directors
D Z Baffsky, AO 699,483 – – 200,000 899,483
K W Seymour, AM 11,634,174 – – – 11,634,174
M W Loomes 388,111 – – – 388,111
J W Murphy (i) – – – – –
G H Weiss 77,655,619 – – 416,000 78,071,619
Executives
M R Boyte 1,925,984 – – (600,000) 1,325,984
D A Weiss 2,199 – – – 2,199
N M McMahon – – – – –
W J Bamford – – – – –
total 92,305,570 – – 16,000 92,321,570
Ordinary shares held in Ariadne Australia Limited
Balance 1 July 2010
Granted as Remuneration
on Exercise of options
Net Change other
Balance 30 June 2011
Directors
D Z Baffsky, AO 699,483 – – – 699,483
K W Seymour, AM 11,634,220 – – (46) 11,634,174
M Loomes 388,111 – – – 388,111
J W Murphy (i) – – – – –
G H Weiss 77,655,619 – – – 77,655,619
Executives
M R Boyte 1,925,984 – – – 1,925,984
D A Weiss 2,199 – – – 2,199
W J Bamford – –
Total 92,305,616 – – (46) 92,305,570
All equity transactions with Directors and Executives other than those arising from the exercise of remuneration options have been entered into under
terms and conditions no more favourable than those the entity would have adopted if dealing at arm’s length.
(i) Mr J Murphy, until September 2011, was the Managing Director of Investec Wentworth Private Equity Limited which controls 18,320,001 shares in Ariadne Australia Limited.
Notes to Financial Statements
66 | Ariadne Australia Limited • Annual Report 2012
30. DIRECtoR AND EXECutIvE DISCloSuRES CoNtINuED
(e) loans from Directors and Executives
No loans from Directors and Executives were made, repaid or outstanding during the current and prior financial periods.
(f) other transactions and balances with Directors and Executives
Purchases / Payments
(i) Mr D Z Baffsky, AO (Chairman) performed various consulting services to the Group outside of his Director’s duties. Mr Baffsky was paid on
commercial terms for consulting work performed of $44 (2011:$44). Mr Baffsky, in his role as Chairman of the Board of directors and for other
purposes, utilises an office and car park at premises leased by the Group.
(ii) Director related entities of Mr K W Seymour, AM (Deputy Chairman) owns interests in car parks leased by an entity in which the Group owns a
50% interest. Lease payments were negotiated on commercial terms and conditions. The total lease payments made during the year were $4,644
(2011: $2,750).
(iii) Mr J Murphy’s Director’s fees were paid to Investec Wentworth Private Equity Pty Ltd for the period to 30 September 2011.
Sales / Receipts(i) There were no sales made to Directors or Executives during the financial year (2011: Nil).
InvestmentsThe Group is party to the following joint venture operations with Director related entities of Mr K Seymour, AM:
Skyline Joint Venture 33% Ariadne Ownership (2011: 33%)
StayMint 100% Ariadne Ownership (2011: 50%) Note 31(b)
The Group holds listed equity investments in Director related entities:
Clearview Wealth Limited Mr J Murphy Non-Executive Director
Mercantile Investment Company Limited Dr G Weiss Non-Executive Director
31. BuSINESS ComBINAtIoNS
Principal activityDate of acquisition
Additional interest
acquired %
total interest owned at
30 June 2012 %
Consideration transferred
$’000
Net cash flow on acquisition
$’000
Gain on Business
Combination $’000
2012
Freshxtend
International Pty LtdFood life extension technology
29 Nov 2011 6.3 54.1 267 447 1,236
StayMint Pty Ltd Building management and accommodation
29 Jun 2012 50 100 5,800 (3,360) 1,446
Total 6,067 2,913 2,682
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 67
31. BuSINESS ComBINAtIoNS CoNtINuED
(a) Freshxtend International Pty ltd
The Group held 47.8% of the ordinary shares of Freshxtend International Pty Limited (“Freshxtend”) as at 30 June 2011. After this date, the following
transactions occurred:
• On 9 November 2011, 7.8% of the ordinary shares of Freshxtend were cancelled as part of a selective capital reduction under Section 256(c) of
the Corporations Act.
• On 29 November 2011, the Group (and an unrelated entity) exercised share options in Freshxtend.
As a result, at 29 November 2011, the Group held 54.1% of the issued share capital of Freshxtend and gained control at this date for accounting purposes.
Freshxtend is an unlisted Australian company. Its major investment is a 17% interest in NatureSeal Inc., a leader in shelf-life extension technology
products for the fresh produce industry; the other 83% is held by a US-based corporation whose activities include edible film coatings for the
pharmaceutical, confectionery, food and agricultural industries.
The following table summarises the consideration paid for Freshxtend and the fair value of the assets acquired and liabilities assumed as at
29 November 2011, as well as the proportionate share of the non-controlling interest in Freshxtend.
2012 $’000
Consideration
Cash paid to exercise share options 267
Total Consideration transferred 267
Fair value of the Group’s equity interest in Freshxtend held before the business combination 4,385
4,652
Assets acquired and liabilities assumed
The fair value of the identifiable assets and liabilities of Freshxtend as at 29 November 2011 were:
Assets
Cash and cash equivalents 714
Sundry debtors 3
Other current assets 3
Investments in associates 8,630
total Assets 9,350
liabilities
Trade and other payables 76
total liabilities 76
total identifiable net assets at fair value 9,274
Non-controlling interest measured at its proportionate share (4,257)
Gain arising on acquisition (365)
Purchase consideration transferred 4,652
The gain on acquisition relates to the exercise of share options at a price less than the fair value of a share at the time of exercise.
The fair value of Freshxtend investment in an associate (NatureSeal) has been estimated by applying a discounted earnings approach and an income
approach. NatureSeal is an unlisted joint venture and, as such, no market information is available.
The Group recognised a gain of $871 as a result of measuring at fair value its 47.8% equity interest in Freshxtend held before the business
combination. The gain is included in ‘Other income’ in the Group’s Income Statement.
Notes to Financial Statements
68 | Ariadne Australia Limited • Annual Report 2012
31. BuSINESS ComBINAtIoNS CoNtINuED
(a) Freshxtend International Pty ltd continued
2012 $’000
Analysis of gain on acquisition:
Gain on equity interest held before the business combination 871
Gain arising on acquisition 365
Net gain on business combination 1,236
Analysis of cash flows on acquisition:
Cash paid to exercise equity options in Freshxtend (included in cash flows from investing activities) (267)
Net cash acquired with the subsidiary (included in cash flows from investing activities) 714
Net cash flow on acquisition 447
From the date of acquisition, Freshxtend has contributed $1,027 of revenue and $864 of net profit to the Group. Had Freshxtend been consolidated
from 1 July 2011, the Group’s income statement would have included revenue of $1,819 and profit of $1,501.
(b) Staymint Pty ltd
On 29 June 2012, Ariadne through its wholly owned subsidiary, Peramist Pty Ltd, completed a transaction with Watpac Developments Pty Ltd
(Watpac) to acquire its 50% interest in StayMint Pty Ltd (“StayMint”), increasing the Group’s ownership to 100%.
StayMint is a building management and accommodation provider, primarily in the serviced apartment sector. StayMint trades under the “Mint”
brand, which is a well-recognised and respected accommodation brand. The acquisition of Watpac’s 50% interest will enable Ariadne to broaden
StayMint’s accommodation service base in key locations in Australia.
Notes to Financial Statements
Ariadne Australia Limited • Annual Report 2012 | 69
31. BuSINESS ComBINAtIoNS CoNtINuED
(b) Staymint Pty ltd continued
The following table summarises the consideration paid for StayMint and the fair value of the assets acquired and liabilities assumed as at
29 June 2012.
2012 $’000
Consideration
Cash transferred 5,800
Total Consideration transferred 5,800
Fair value of the Group’s equity interest in StayMint held before the business combination 6,207
12,007
Assets acquired and liabilities assumed
The fair value of the identifiable assets and liabilities of StayMint as at 29 June 2012 were:
Assets
Cash and cash equivalents 2,440
Trade and other receivables 312
Inventories 23
Other current assets 84
Buildings 3,110
Plant and equipment 268
Leasehold improvements 3
Intangible assets 12,165
total Assets 18,405
liabilities
Trade and other payables 921
Provisions 70
Interest-bearing loans and borrowings 5,000
total liabilities 5,991
total identifiable net assets at fair value 12,414
Non-controlling interest measured at its proportionate share –
Gain arising on acquisition 407
Purchase consideration transferred 12,007
The gain on acquisition relates to the purchase of equity instruments at a price less than the fair value at the time of settlement.
The fair value of StayMint’s investment in apartments and management letting rights has been estimated by utilising external valuations recently
conducted for mortgage purposes.
The Group recognised a gain of $1,039 as a result of measuring at fair value its 50% equity interest in StayMint held before the business combination.
The gain is included in ‘Other income’ in the Group’s Income Statement.
Notes to Financial Statements
70 | Ariadne Australia Limited • Annual Report 2012
Notes to Financial Statements
31. BuSINESS ComBINAtIoNS CoNtINuED
(b) Staymint Pty ltd continued
2012 $’000
Analysis of gain on acquisition:
Gain on equity interest held before the business combination 1,039
Gain arising on acquisition 407
Net gain on business combination 1,446
Analysis of cash flows on acquisition:
Cash transferred (included in cash flows from investing activities) (5,800)
Net cash acquired with the subsidiary (included in cash flows from investing activities) 2,440
Net cash flow on acquisition (3,360)
Analysis of lease expenditure commitments acquired:
Operating leases (non-cancellable)
Minimum lease payments
not later than one year 2,095
later than one year and not later than five years 801
later than five years –
Aggregate lease expenditure contracted for at reporting date 2,896
From the date of acquisition, StayMint has contributed nil revenue and nil net profit to the Group. Had StayMint been consolidated from 1 July 2011,
the Group’s income statement would have included revenue of $9,798 and a loss of $2,101.
Ariadne Australia Limited • Annual Report 2012 | 71
Director’s Declaration
In accordance with a resolution of the Directors of Ariadne Australia Limited, I state that:
1. In the opinion of the Directors:
(a) the financial statements and notes of the consolidated entity are 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 2012 and of its performance for the year ended
on that date; and
(ii) complying with the Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001; and
(b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 2; and
(c) there are reasonable grounds to believe that the Ariadne Group will be able to pay its debts as and when they become due and payable.
2. This declaration has been made after receiving the declarations required to be made to the Directors in accordance with section 295A of the
Corporations Act 2001 for the financial year ending 30 June 2012.
On behalf of the Board
D Z Baffsky, Ao Director 24 August 2012
72 | Ariadne Australia Limited • Annual Report 2012
ASX Additional Disclosures
Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report is as follows. The information is current
as at 31 August 2012.
(a) Distribution of equity securitiesordinary shares
The number of shareholders, by size of holding, in each class of share are: Number of holders Number of shares
1–1,000 254 80,202
1,001–5,000 834 2,583,395
5,001–10,000 302 2,152,558
10,001–100,000 347 9,911,616
100,001 and over 84 189,652,692
1,821 204,380,463
Holding less than a marketable parcel 310 147,945
(b) twenty largest shareholderslisted ordinary shares
the names of the twenty largest holders of quoted shares are: Number of shares % of shares
1 Bivaru Pty Ltd 76,566,395 37.46%
2 JP Morgan Nominees Australia Limited <Cash Income A/C> 20,513,911 10.04%
3 SLV Investments Pty Ltd 15,377,742 7.52%
4 IWPE Nominees Pty Limited <ACF Investec Wentworth 2 AC> 9,160,000 4.48%
5 McNeil Nominees Pty Limited 7,050,000 3.45%
6 JP Morgan Nominees Australia Limited 6,255,828 3.06%
7 IWPE Nominees Pty Limited <ACF Mg Private Equity AC> 5,888,572 2.88%
8 Berne No 132 Nominees Pty Ltd <107890 A/C> 5,485,100 2.68%
9 Berne No 132 Nominees Pty Ltd <146199 A/C> 4,580,000 2.24%
10 Con Zempilas 3,664,000 1.79%
11 MGB Equity Growth Pty Limited <Mgb Equity Growth Unit 2 AC> 3,271,429 1.60%
12 SLV Investments Pty Ltd 2,787,047 1.36%
13 HSBC Custody Nominees (Australia) Limited 1,750,754 0.86%
14 Kirk Group Holdings Pty Ltd 1,615,546 0.79%
15 Berne No 132 Nominees Pty Ltd <146219 A/C> 1,569,074 0.77%
16 Mr Ross Alexander Macpherson 1,213,700 0.59%
17 UBS Nominees Pty Ltd 1,206,706 0.59%
18 LVF Nominees Pty Ltd 1,151,399 0.56%
19 Noontide Securities Pty Ltd 972,479 0.48%
20 Croll Nominees Pty Limited <Croll Family A/C> 941,040 0.46%
171,020,722 83.68%
(c) Substantial shareholders the names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act 2001 are: Number of shares as per notice
Bivaru Pty Ltd and associated entities 77,655,619
Thorney Holdings Pty Ltd and Thorney Pty Ltd and associated entities 21,720,617
Leigh Vanessa Seymour 19,153,698
IWPE Nominees Pty Limited and MGB Equity Growth Pty Ltd 18,320,000
Kayaal Pty Ltd and associated entities 11,634,220
(d) voting rightsAll ordinary shares (whether fully paid or not) carry one vote per share without restriction.
Ariadne Australia Limited • Annual Report 2012 | 75