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TOLL HOLDINGS LIMITED ANNUAL REPORT 2001 – FINANCIAL REPORT
CONTENTS
Financial Performance
1
21. Outside Equity Interests
34
Report by Directors
2
22. Additional Financial Instruments Disclosure
35
Corporate Governance Statement
9
23. Directors’ Remuneration
38
Statements of Financial Performance
13
24. Executives’ Remuneration
38
Statements of Financial Position
14
25. Auditors’ Remuneration
40
Statements of Cash Flows
15
26. Contingent Liabilities
40
Notes to and forming part of the
financial statements
27. Commitments for Expenditure
40
16
28. Related Parties
42
29. Particulars in Relation to Controlled Entities
45
1. Statement of Significant Accounting Policies
16
2. Revenue from Ordinary Activities
21
3. Expenses from Ordinary Activities
21
30. Investments Accounted for using
the Equity Method
47
4. Operating Profit
22
31. Deed of Cross Guarantee
49
5. Taxation
23
32. Segment Information
52
6. Dividends Paid and Declared
25
33. Notes to the Statements of Cash Flows
52
7. Receivables
26
34. Earnings Per Share
57
8. Inventories
26
35. Event Subsequent to Balance Date
57
9 Other Assets
26
Directors’ Declaration
58
Independent Auditors’ Report
59
Shareholder Information
60
10. Investments Accounted for using
the Equity Method
27
11. Other Financial Assets
27
12. Property, Plant and Equipment
27
13. Intangible Assets
29
14. Payables
29
15. Interest Bearing Liabilities
30
16. Financing Arrangements
30
17. Provisions
32
18. Contributed Equity
32
19. Reserves
34
20. Retained Profits
34
Company Directory
inside back cover
FINANCIAL PERFORMANCE
2001
2000
% change
1,602.8
66.0
16.4
49.6
77.8
25.1
33.0
1,360.1
47.9
7.3
40.7
66.3
25.5
28.0
17.8
37.8
124.6
21.9
17.3
(1.6)
17.8
For the year
Revenue ($m)
Profit before income taxes ($m)
Income tax ($m)
Profit after income tax ($m)
Earnings per share fully diluted (¢)
Return on shareholders’ funds (%)
Dividends per share (¢)
✓
✓
✓
✓
✓
✓ Best ever Toll Holdings result since listing
$m
cents
$m
1,197.7
77.79
20.2
66.3
16.9
14.9
51.4
596.3
7.9
26.8
22.3
333.3
5.4
141.9 141.9
’97
’98
’99
’00
’01
’97
’98
’99
’00
’01
’97
’98
’99
’00
’01
MARKET CAPITALISATION
E P S ( F U L LY D I L U T E D )
T O TA L D I V I D E N D S PA I D
The company is now in the ASX
top 100 as its market capitalisation
continues to reflect our growth
Earnings per share has improved
on the back of improved margins
Shareholders continue to share
in the performance growth
year-on-year
1
REPORT BY DIRECTORS
The directors present their report together with the financial report
of Toll Holdings Limited (‘the Company’) and the consolidated
financial report of the consolidated entity, being the Company
and its controlled entities (‘the Group’), for the year ended
30 June 2001 and the auditors’ report thereon.
Directors
The following persons held office as directors of Toll Holdings
Limited during or since the financial year:
Director
Mr Peter Rowsthorn (Chairman)
Mr Paul Little (Managing Director)
Mr Mark Rowsthorn
Mr John Moule AM
Mr Bill Farrands
Mr Ron Paul AM
Mr Neil Chatfield
Mr Ross Dunning
Principal Activities
The principal activities of the consolidated entity during the year
consisted of:
• National less than full load express and economy freight
forwarding service using all modes of transport;
• National full load road and rail freight forwarding service
including transcontinental rail linehaul operation;
• National temperature controlled transport service for full load
and less than full load clients;
• Warehousing and distribution of bulk dry and refrigerated
goods in all capital cities;
• National wharf cartage, container handling and storage;
• National contract distribution services;
• National time sensitive parcel freight distribution services;
• Specialised international forwarding services;
• Ports management and stevedoring services;
• National removals and relocation brokerage service;
• Vehicle transport and distribution; and
• Bulk liquid transportation.
The following significant changes in the nature of the activities of
the consolidated entity occurred during the year:
The Group acquired the business of AR Neal on 19 January 2001,
100% of the shares in Finemore Holdings Limited on 2 March 2001
and part of the Strang Stevedoring Group of companies on
5 April 2001.
There were no other significant changes in the nature of the
activities of the consolidated entity during the year.
2
TOLL HOLDINGS LIMITED
Consolidated Result
The consolidated profit for the year attributable to the members of
Toll Holdings Limited was:
2001
$’000
2000
$’000
Operating profit after income tax attributable
to members of Toll Holdings Limited
49,238
40,404
Earnings per share
2001
2000
Basic earnings per share
80.49¢
67.67¢
Diluted earnings per share
77.79¢
66.28¢
Review of Operations
Results for the year were another record for the company with
EBIT for the full year growing by over 38% to $70.6 million,
on operating revenues which increased 18% to $1.603 billion.
EBIT margin increased 17.6% to 4.41%, which continued the
strong margin expansion experienced over the past four years.
Excluding the results of the Finemore acquisition since March
2001, the EBIT margin improved by over 23% to 4.64%. Margin
improvement was achieved by all divisions.
Earnings continued to be driven by greater asset efficiencies and
investment in new infrastructure, together with sound cost control
and efficiencies brought on by technology developments.
Recent acquisitions including Finemores, although slightly earnings
per share positive and in line with plan, did not have a material
impact on earnings for the year.
Profit after tax of $49.2 million for the year was another record for
the company, increasing 25% over the previous corresponding
period of $39.3 million (before an abnormal income tax gain of
$1.06 million).
The Long Distance division performed well for the year with EBIT
margins growing strongly across all operations. The increase in
revenue came largely from Toll Express and Toll IPEC, whilst
planned lower revenues resulted from Refrigerated Roadways.
Toll Express and Toll IPEC performed exceptionally well during the
year, building on their sound market position and producing strong
EBIT and margin growth.
All other Long Distance businesses, including Toll SPD and Toll
Tasmania recorded higher EBIT compared to the previous year.
Refrigerated Roadways continued its improvement with
performance well ahead of the previous corresponding period.
The Toll North division traded strongly in the year with EBIT growth
being generated through new depots developed during the year
and sound cost control programs.
Both NQX and QRX performed above plan and benefited from
reduced cost structures, whilst flat conditions in both the mining
and building sector, particularly in the first half of the year,
restricted revenue growth.
R E P O R T B Y D I R E C T O R S continued
Toll Logistics division continued to improve earnings margins due
to cost reductions, technology improvements and greater
operational efficiencies. EBIT growth was particularly strong
in the Ports, Food and Retail and Automotive sectors.
Environmental Regulation
Toll Technologies increased its revenue from $29 million in 2000
to $109 million for the year due to the full year impact of Removals
Australia, which was acquired in February 2000.
In making this report, the directors note that the Group’s operations
frequently involve the use or development of land, the transport
of goods and the storage, transport and disposal of waste. Some
of these activities require a licence, consent or approval from
Commonwealth or State regulatory bodies. This regulation of the
Group’s activities is typically of a general nature, applying to all
persons carrying out such activities, and does not in the directors’
view comprise particular and significant environmental regulation.
Since the end of the financial year Removals Australia,
movinghome.com.au and the International Corporate Relocations
businesses have been integrated into Toll Transitions, forming a
total relocation management service organisation.
Dividends – Toll Holdings Limited
• In respect of the current year:
2001
$’000
2000
$’000
Ordinary Shares
An interim ordinary dividend of 15 cents
per share franked to 60% with Class C
(34%) franking credits was paid on
30 March 2001 (2000: 13 cents 20%
franked Class C (36%))
The operations of the Group in Australia are subject to various
environmental regulations under both Commonwealth and
State legislation.
Based upon enquiries within the Group, the directors are not
aware of any breaches of particular and significant environmental
regulation affecting the Group’s operations.
The directors believe the environmental performance of the
Group is sound and that the Group has appropriate systems in
place for the management of its ongoing corporate environmental
responsibilities.
Events Subsequent to Balance Date
9,191
7,820
The final dividend declared by the
directors of the Company in respect
of the year ended 30 June 2001 is
an ordinary dividend of 18 cents
per share franked to 70% with
Class C (30%) franking credits
(2000: 15 cents 50% franked
Class C (34%))
11,050
9,078
The total dividends provided for
or paid in respect of the year
ended 30 June 2001
20,241
16,898
Significant Changes in the State of Affairs
Significant changes in the state of affairs of the consolidated
entity during the financial year were:
On 5 September 2001, the Company announced it would form a
consortium with Lang Corporation to bid for the sale of National
Rail Corporation and FreightCorp. Other than the above item, there
has not arisen in the interval between the end of the financial year
and the date of this report any item, transaction or event of a
material and unusual nature likely, in the opinion of the directors
of the Company, to affect significantly the operations of the
consolidated entity, the results of those operations, or the state
of affairs of the consolidated entity, in future financial years.
Likely Developments and Expected Results
of Operations
Information as to likely developments in the operations of the
consolidated entity and the expected results of those operations in
future financial years has not been included in this report because,
the directors believe on reasonable grounds, that to include such
information would be likely to result in unreasonable prejudice
to the consolidated entity.
(a) An increase in paid up capital of $9.9 million to $108.6 million
which included the following:
• Issue of 865,108 fully paid ordinary shares in accordance
with the Dividend Reinvestment Plan;
(b) An increase in assets and liabilities due to the acquisitions of
the AR Neal business on 19 January 2001, Finemore Holdings
Group on 2 March 2001 and the Strang Stevedoring Group on
5 April 2001;
(c) The issue of 6,753,588 unsecured, subordinated convertible
notes @ $17 each in May 2001.
3
R E P O R T B Y D I R E C T O R S continued
Information on Directors
4
Director
Experience and Qualifications
Age
Special Responsibilities
Mr P Rowsthorn
FAICD, FCIT, FAIM
Chairman
Non-Executive Director
31 years in the Transport Industry
Chairman for 15 years
Director since 1986
71
Chairman of Board of Directors
Chairman of Remuneration
and Succession Planning Committee.
Member of Corporate Governance
& Audit and Financial Risk Committees
Mr P A Little
FAICD, FCIT
Managing Director
33 years in the Transport Industry
Managing Director for 15 years
Director since 1986
53
Member of the Corporate Governance
Committee
Mr M Rowsthorn
B.Ec, Grad Dip. Bus.
Executive Director Operations
24 years in the Transport Industry
Executive Director Operations for 14 years
Director since 1988
46
Chairman of Risk Management Committee
Mr J A Moule AM
FCA, FAICD
Non-Executive Director
Chairman Austrim Nylex Limited,
Gribbles Group Limited,
Former Managing Partner
Deloitte Touche Tohmatsu
Director since 1995
62
Chairman of Audit and Financial Risk
Committee, Member of Corporate
Governance and Remuneration and
Succession Planning Committees
Mr W Farrands
B. Com
Non-Executive Director
Former Group General Manager
of the Building & Industrial Products
Division and for the Coated Products
Division within BHP Steel
Director since 1997
68
Chairman of Corporate Governance
Committee, Member of Audit
and Financial Risk and Remuneration
and Succession Planning Committees
Mr R Paul AM
D.Univ
Non-Executive Director
Former Chairman Evans Deakin
Industries Limited
Director since 1998
69
Member of Audit and Financial Risk,
Corporate Governance and Remuneration
and Succession Planning Committees
Mr N Chatfield
FCPA
Chief Financial Officer
27 years experience in
transport and resource industries
Director since 1998
47
Member of the Audit and Financial
Risk Committee
Mr R Dunning
B.E. (Hons) B.Com
Non-Executive Director
Director Downer EDI Ltd,
59
Brisbane Airport Corporation Ltd
Chairman – Powercoal Pty Ltd
Port of Brisbane Corporation, Pacific Power
Appointed Director 25 July 2001
TOLL HOLDINGS LIMITED
Member of Audit and Financial Risk,
Corporate Governance and Remuneration
and Succession Planning Committees
R E P O R T B Y D I R E C T O R S continued
Directors’ Interests
The relevant interest of each director in the shares, options or convertible notes issued by the companies within the consolidated entity
and other related body corporates, as notified by the directors to the Australian Stock Exchange in accordance with S205G(1) of the
Corporations Act 2001, at 28 August 2001 is as follows:
Toll Holdings Limited
Ordinary Shares
Options Over Ordinary Shares
Convertible Notes
Mr P Rowsthorn
3,112,160
–
–
Mr P A Little
8,984,147
400,000
748,678
Mr M Rowsthorn
9,235,850
400,000
769,652
174,062
–
–
Mr W Farrands
20,000
–
1,666
Mr R Paul AM
20,000
–
–
Mr N Chatfield
67,562
110,000
623
–
–
–
Mr J A Moule AM
Mr R Dunning
Meetings of Directors
The following table sets out the number of meetings of the Company’s directors (including meetings of committees of directors) held
during the year ended 30 June 2001 and the number of meetings attended by each director who held office during the financial year.
Directors’
Meetings
Audit and Financial
Risk Committee
Meetings
Remuneration and
Succession Planning
Committee Meetings
Corporate
Governance
Committee Meetings
No. of Meetings
No. of Meetings
No. of Meetings
No. of Meetings
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Mr P Rowsthorn
12
12
4
4
2
2
2
2
Mr P A Little*
12
12
4
4
–
–
–
–
Mr M Rowsthorn*
12
12
–
–
–
–
1
1
Mr J A Moule AM
11
12
4
4
2
2
2
2
Mr W Farrands
12
12
4
4
2
2
2
2
Mr R Paul AM
11
12
4
4
2
2
2
2
Mr N Chatfield*
12
12
4
4
–
–
2
2
Director
During the year, a due diligence committee was established for the issue of the Convertible Notes. Mr J A Moule AM
(Non-Executive Director) was appointed Chairman. Executive Directors Mr P A Little and Mr N Chatfield and the Company
Secretary Mr B McInerney were appointed members of the committee.
* Mr P A Little was appointed to the Corporate Governance Committee on 27 June 2001 and may attend Meetings of the other
Committees as an invitee.
* Mr M Rowsthorn may attend Meetings as an invitee.
* Mr N Chatfield was appointed to the Audit and Financial Risk Committee on 27 June 2001 and may attend Meetings of the
Corporate Governance Committee as an invitee.
5
R E P O R T B Y D I R E C T O R S continued
Share Options
During or since the end of the financial year, the Company granted options over unissued ordinary shares to the following directors and
executives who are amongst the five most highly remunerated officers as part of their remuneration.
Directors
No. of options granted
Exercise Price
Expiry Date
Mr P Little
200,000*
$11.8242
1 November 2005
Mr M Rowsthorn
200,000*
$11.8242
1 November 2005
Mr N Chatfield
100,000*
$7.9700
28 May 2005
* All options were granted during the financial year in accordance with resolutions passed by shareholders at the Company’s Annual
General Meeting held on 2 November 2000.
Senior Executive Option Plan and Executive Share Option Scheme
Options to take up ordinary shares in the capital of Toll Holdings Limited have been granted as follows:
As at 28 August 2001, unissued ordinary shares of the Company under option are:
Grant Date
Total Options Granted
Unexpired Options
No of Executives
Exercise Price $
Expiry Date
1 Jul 1998
1,025,000
470,000
22
2.1460
30 Jun 2003
23 Jun 1999
100,000
100,000
1
5.4150
22 Jun 2004
6 Aug 1999
400,000
400,000
2
5.4576
5 Aug 2004
22 Dec 1999
10,000
10,000
2
2.1460
30 June 2003
29 May 2000
1,115,000
1,110,000
40
7.9700
28 May 2005
26 July 2000
5,000
5,000
1
7.9700
28 May 2005
2 Oct 2000
25,000
25,000
1
7.9700
28 May 2005
2 Nov 2000
100,000
100,000
1
7.9700
28 May 2005
2 Nov 2000
400,000
400,000
2
11.8242
1 Nov 2005
27 Jun 2001
40,000
40,000
2
19.9100
26 Jun 2006
Each option is convertible into one ordinary share at any time after the initial qualifying period, which is usually between three and five
years after the grant date. The options granted are only exercisable on the satisfaction of specific hurdle criteria with regard to the
Company’s Total Shareholder Return and diluted EPS growth relative to the All Industrials (excluding banks) or ASX 200 Industrials diluted
EPS growth, during the period from grant date to the end of the qualifying period (generally a three year period).
No ordinary shares were issued during the financial year on the exercise of options granted under either the Senior Executive Option Plan
or the Executive Share Option Scheme (2000: 230,000 shares). 485,000 ordinary shares have been issued since the end of the financial
year on the exercise of options granted under the scheme. (2000: Nil shares)
Directors and Senior Executives Emoluments
The Remuneration and Succession Planning Committee is responsible for making recommendations to the Board on remuneration
policies and packages applicable to the Board members and senior executives of the Company.
Executive remuneration and other terms of employment are reviewed annually by the Committee having regard to performance against
goals set at the start of the year, relevant comparative market information and independent expert advice.
The broad remuneration policy is to ensure that remuneration packages properly reflect a person’s duties and responsibilities, and that
remuneration is competitive in attracting, retaining and motivating people of the highest quality.
Executives are also eligible to participate in the Senior Executive Option Plan. The ability to exercise options is conditional on the
Company achieving certain performance hurdles.
Non-Executive directors’ remuneration is determined by the Board within the maximum amount approved by shareholders from time to
time. Non-Executive directors do not receive any performance related remuneration.
Details of the nature and amount of each major element of emoluments of each director of the Company and each of the five most highly
remunerated officers of the Company and the consolidated entity receiving the highest emolument are:
6
TOLL HOLDINGS LIMITED
R E P O R T B Y D I R E C T O R S continued
Non-Executive Directors of Toll Holdings Limited
Name
Directors Fee
$
Non-Cash Benefits
$
Mr P Rowsthorn (Chairman)
Superannuation
$
Total
$
141,302
7,114
–
148,416
Mr J Moule AM
55,000
–
4,400
59,400
Mr W Farrands
55,000
–
4,400
59,400
Mr R Paul AM
55,000
–
4,400
59,400
Executive Directors of Toll Holdings Limited
Name
Base Salary
Non-Cash
Benefits
$
Superannuation
$
Performance
Incentive
$
Mr P Little
Managing Director
619,547
255,000
16,241
44,213
588,080* 1,523,081
Mr M Rowsthorn
Executive Director Operations
553,159
260,000
18,426
8,416
588,080* 1,428,081
Mr N Chatfield
Chief Financial Officer
341,059
50,000
40,555
8,416
343,367** 783,397
$
Option
Value
$
Total
$
Executive Officers of Toll Holdings Limited and Consolidated Entity
Name
Base Salary
Non-Cash
Benefits
$
Superannuation
$
Performance
Incentive
$
Total
$
Option
Value
$
Mr D Telford
Divisional Director
Toll Logistics
370,000
50,000
–
40,000
–
460,000
Mr J Ludeke
Divisional Director
Long Distance
320,000
50,000
40,000
50,000
–
460,000
Mr S Stanley
Director
Development
402,501
22,500
–
29,999
–
455,000
Mr T Mallon
Divisional Director
Toll North
230,821
50,000
34,179
85,000
–
400,000
Mr G Lyon
Divisional Director
Toll Technologies
270,000
50,000
52,000
28,000
–
400,000
$
* 200,000 options were granted each to P Little and M Rowsthorn on 2 November 2000 at an exercise price of $11.8242. The
exercising of these options is dependent upon the satisfaction of two performance hurdles, being Total Shareholder Return over
the three year period from the grant date must be at least equal to 35% and Earnings Per Share (EPS) diluted growth over the same
period must be at least equal to the growth in the EPS of the ASX200 Industrials. These options have been valued at grant date at
a maximum value of $2.94 per option using the Binomial Method.
** 100,000 options were granted to N Chatfield on 2 November 2000 at an exercise price of $7.97. These options are dependent
on the same performance hurdles as above and were valued in the same manner. These options have been valued at grant date
at a maximum value of $3.43 per option.
7
R E P O R T B Y D I R E C T O R S continued
Insurance of Officers
Rounding off
During the financial year, Toll Holdings Limited paid premiums of
$78,458 (2000: $44,502) to insure officers of the Company and
related bodies corporate.
The Company is of the kind referred to in ASIC Class Order 98/100
dated 10 July 1998 and in accordance with that Class Order,
amounts in the financial report, and directors’ report have been
rounded off to the nearest thousand dollars, unless otherwise
stated.
The officers of the Company covered by the insurance policy
include the directors, P Rowsthorn, P A Little, M Rowsthorn,
J A Moule AM, W Farrands, R Paul AM, N Chatfield, R Dunning
and the secretary B B McInerney. Other officers covered by the
policy are directors or secretaries of controlled entities who are
not also directors or secretaries of Toll Holdings Limited, past
directors of companies within the Toll Group and managers of the
consolidated entity.
Auditor
KPMG continues in office in accordance with section 327 of the
Corporations Act 2001.
This report is made in accordance with a resolution of the directors.
The liabilities insured, subject to specific exclusions, include costs
and expenses that may be incurred in defending civil or criminal
proceedings that may be brought against the officers in their
capacity as officers of the Company or a related body corporate.
Indemnification of Officers
The Company has agreed to indemnify the directors of the
Company, and its controlled entities, against all liabilities to
another person (other than the Company or a related body
corporate) that may arise from their position as directors of the
Company and its controlled entities, except where the liability
arises out of conduct involving a lack of good faith. The agreement
stipulates that the Company will meet the full amount of any such
liabilities, including costs and expenses.
P Rowsthorn
Director
P A Little
Director
Dated at Melbourne this 5th day of September 2001.
8
TOLL HOLDINGS LIMITED
CORPORATE GOVERNANCE STATEMENT
This statement outlines the main Corporate Governance practices
that were in place throughout the financial year, unless
otherwise stated.
Board of Directors and its Committees
The Board is responsible for the overall Corporate Governance
of the consolidated entity including its strategic direction,
establishing goals for management, monitoring and directing the
Company’s performance, allocation of resources, planning for the
future, and succession planning.
In addition to specific items for Board consideration, the Board’s
annual program includes regular reviews of Company activities
and strategies, and directors participate actively in visitation of
operations around Australia. Regular opportunities are provided
both within and apart from Board meetings for directors to meet
with senior executives and personnel.
Composition of the Board
During 2000/2001 the Company had seven directors, with a
majority of non-executive directors, which included the Chairman.
The names of the directors of the Company in office at the date of
this Statement are set out in the Directors’ Report on page 2 of
these financial statements.
Securities Trading Policy
Directors, executives and employees are prohibited from trading
in the Company’s securities whenever they have price sensitive
information, which is not generally available. Apart from such
occasions, trading will normally only be permitted for the six
weeks period commencing after two full trading days following
the release of full year and half year results, the Annual General
Meeting, or other occasions where any price sensitive information
has been released by the Company.
Conflict of Interest
In accordance with the Corporations Act 2001 and the Company’s
Constitution directors must keep the Board advised, on an ongoing
basis, of any interest that could potentially conflict with those of
the Company. Where the Board believes that a significant conflict
exists the director concerned does not receive any relevant Board
papers and is not present in the meeting while the item is
considered. The Board has developed procedures to assist
directors to disclose potential conflicts of interest.
Board Committees
• The current number of directors may be increased where it is
felt that additional expertise is required in specific areas, or
when an outstanding candidate is identified;
To assist in the execution of its responsibilities, the Board has
established a number of Board Committees comprising a Corporate
Governance Committee, Audit and Financial Risk Committee and
Remuneration and Succession Planning Committee. Matters
attended to by Board Committees are reported to the Board
following each meeting. Initial membership of each Committee is
for three years, and is then subject to annual rotation. The
Chairman of each Committee is a non-executive director.
• The Chairman of the Board is a non-executive director;
Corporate Governance Committee
• The Board is to comprise a majority of non-executive directors;
and
The Corporate Governance Committee is responsible for
establishing and monitoring the ethical standards of the
consolidated entity. Its duties and responsibilities are:
The composition of the Board is determined using the following
principles:
• The Board should comprise directors with a broad range of
expertise, background and experience.
The composition of the Board is reviewed on an annual basis to
ensure that the Board has the appropriate mix of expertise and
experience. From time to time the Board considers criteria for
identifying suitable candidates for the Board.
All directors, except the Managing Director, are subject to
re-appointment by shareholders in general meeting on a rolling
three year basis. Non-Executive directors are required to retire
at the end of the Annual General Meeting following their
72nd birthday (65th birthday for executive directors). Board
policy is that new non-executive directors are limited to a
maximum of 15 years service.
Each director has the right to seek independent professional advice
at the consolidated entity’s expense. In such circumstances the
prior approval of the Chairman is required, but this will not be
unreasonably withheld.
• To periodically review the Company’s Corporate Governance
Guidelines and to establish procedures to promote compliance;
• To establish and periodically review the Corporate Code of
Practice, as well as procedures to promote compliance;
• To approve and review policies on sensitive issues or practices
such as Environmental, Equal Opportunity and Conflicts of
Interest;
• To consider and make recommendations to the Board on its
structure, its selection criteria for new or additional directors,
and on the Board’s operating guidelines; and
• To supervise special investigations as referred to it by
the Board.
The Corporate Governance Committee has the authority to seek
any information it requires from any officer or employee of the
consolidated entity and is authorised to take such independent
professional advice as it considers necessary.
9
C O R P O R A T E G O V E R N A N C E continued
Corporate Governance Committee continued
Membership of the Committee comprises no less than three
non-executive directors and, as of 27 June 2001, the Managing
Director. The members of the Corporate Governance Committee
during the year were:
Mr W Farrands (Chairman)
Mr P Rowsthorn
Mr J A Moule AM
Mr R Paul AM
Mr P A Little (appointed on 27 June 2001)
Mr N Chatfield may attend Corporate Governance Committee
Meetings as an invitee. Mr Little previously attended Committee
meetings as an invitee.
Remuneration and Succession Planning Committee
The Remuneration and Succession Planning Committee
(previously the Remuneration Committee) reviews and makes
recommendations to the Board on remuneration packages and
policies applicable to the managing director, executive director of
operations, non-executive directors and where appropriate, senior
executives. It also reviews and makes recommendations regarding
the policies applicable to staff salary reviews. Remuneration levels
are to be competitively set to attract appropriately qualified and
experienced directors and senior executives.
The duties of the Remuneration and Succession Planning
Committee are as follows:
• Review, determine and approve, the managing director’s and
executive director of operations remuneration, allowances
and incentives;
Mr P Rowsthorn (Chairman)
Mr J A Moule AM
Mr W Farrands
Mr R Paul AM
Mr P A Little may attend remuneration and succession planning
committee meetings as an invitee. The general manager human
resources and company secretary are required to attend each
meeting.
Normally at least two meetings are held each year, one in each
half, including at least one prior to the financial year end to review
the senior executive salary review process.
Further details of director’s remuneration, superannuation and
retirement payments are set out in the directors’ report and in
Note 23 to the financial statements.
Audit and Financial Risk Committee
The Audit and Financial Risk Committee (previously the Audit
Committee) considers any matters relating to the financial affairs
of the Company and its subsidiary companies and to the Group’s
external audit that it determines to be desirable. In addition, the
Audit and Financial Risk Committee examines any other matters
referred to it by the Board.
The duties of the Audit and Financial Risk Committee are
as follows:
• From 30 May 2001, review and approve the managing director’s
recommendations regarding remuneration, allowances and
incentives applicable to other executive directors;
• Monitoring compliance with the Corporations Act 2001, Stock
Exchange Listing Rules and any matters outstanding with
auditors, Australian Taxation Office, Australian Securities and
Investments Commission, Australian Stock Exchange and
financial institutions;
• Review non-executive directors’ fees;
• Monitoring corporate risk assessment and the internal controls;
• Review and ratify senior executive remuneration, allowances
and incentives;
• Liaison with external auditors;
• Oversee compliance with statutory responsibilities relating to
remuneration disclosure;
• Review of information derived from the audit;
• Review policies and reporting responsibilities relating to
employee share and option plans;
• Supervise special investigations as directed by the Board;
• Review of the annual audit plan with the auditors;
• Review of interim financial information;
• Review certain aspects of the Company’s superannuation plan
and compliance with relevant laws and regulations;
• Review compliance with certain government regulations;
• Review senior executive retirement and termination payments;
• Review adequacy of insurance coverage; and
• Review and monitor fringe benefits;
• Review the performance and compensation of the external
auditors.
• Review adequacy of professional indemnity and directors’ and
officers’ liability insurance policy; and
• Establish and monitor executive succession planning.
10
Membership of the Committee comprises no less than three nonexecutive directors. The members of the Remuneration and
Succession Planning Committee during the year were:
TOLL HOLDINGS LIMITED
• Assess the performance of financial management;
From 27 June 2001 the following duties have been added:
• Review and make recommendations regarding changes to
accounting policies;
C O R P O R A T E G O V E R N A N C E continued
Audit and Financial Risk Committee continued
• Review effectiveness of internal audit and cross divisional
reviews; and
• Monitor and review risks relating to Business Continuity,
Disaster Recovery, Reputation, Currency and Interest Rate
exposures.
The members of the Audit and Financial Risk Committee during the
year were:
Mr J A Moule AM (Chairman)
Mr P Rowsthorn
Mr W Farrands
Mr R Paul AM
Mr N Chatfield (appointed on 27 June 2001)
Mr P A Little and/or Mr M Rowsthorn, and Mr B McInerney are
expected to attend Audit and Financial Risk Committee Meetings
as invitees.
Meetings are held at least three times a year or as otherwise
required, including:
• At the final planning stage of the audit;
• Before the issue of the half-yearly profit announcement; and
• Before the issue of the final profit announcement and approval
of the annual report and accounts.
Internal Control Framework
The Board acknowledges that it is responsible for the overall
internal control framework, but recognises that no cost effective
internal control system will preclude all errors and irregularities.
To assist in discharging this responsibility, the Board has instigated
an internal control framework that can be described under
five headings.
• Financial reporting – there is a comprehensive budgeting
system with an annual budget approved by the directors.
Monthly actual results are reported against budget and revised
forecasts for the year are prepared regularly. The consolidated
entity reports to shareholders half-yearly as required by the
ASX Listing Rules. Procedures are also in place to ensure that
price sensitive information is reported to the Australian Stock
Exchange in accordance with its continuous disclosure
requirements.
• Continuous disclosure – the consolidated entity has a policy
that all shareholders and investors have equal access to the
Company’s information and has procedures to ensure that all
price sensitive information is disclosed to the Australian Stock
Exchange in accordance with the requirements of the
Corporations Act 2001 and the ASX Listing Rules. All
information provided to the stock exchange is immediately
posted to the Company’s website at www.toll.com.au.
• Quality and integrity of personnel – the Toll Group Quality Policy
Statement is supported by a quality management system that
requires the involvement and total commitment of all
management, employees and subcontractors to ensure
continuous improvement. Policies are in place in respect to
Occupational Health and Safety, Equal Opportunity, Affirmative
Action and Management Performance Review and Development.
• Operating unit controls – financial controls and procedures
including information systems controls are in place. A
procedure manual is maintained and updated on a regular
basis. A new Financial Policy and Procedures Manual was
introduced following recommendation by the Audit and
Financial Risk Committee on 30 May 2001.
• Investment appraisal – the Company has clearly defined
guidelines for capital expenditure. These include annual
budgets, detailed appraisal and review procedures, and
appropriate levels of authority.
Australian Quality Standard ISO 9002
The Toll Group strives to ensure that its services are of the highest
standard. Towards this end it has undertaken a program to achieve
quality assurance to the international standard ISO 9002, for
appropriate business segments. In certain other businesses quality
assurance programs have been developed which are tailored to
their specific business profiles.
Ethical Standards
All directors, managers and employees are expected to act with
the utmost integrity and objectivity, striving at all times to enhance
the reputation and performance of the consolidated entity. The
Company’s Code of Practice has been issued to all Group
employees. Every employee has a nominated supervisor to whom
they may refer any issues arising from their employment.
Risk Management
As part of the consolidated entity’s strategy to implement an
integrated framework of control, a management initiated formal
risk management framework is in place to:
• Identify the key business and financial risks which could
prevent the consolidated entity from achieving its objectives; and
• Ensure that appropriate controls are in place to effectively
manage those risks.
This included the development of a Risk Management Charter,
and the formation of a Risk Management Committee chaired
by the Executive Director Operations. Other members of the
Committee are the Chief Financial Officer (executive director),
each of the divisional directors, the Company Secretary and the
group risk manager. The Committee’s duties require it to:
• Monitor the management of previously identified risks;
• Identify new risks and implement appropriate actions to
manage them;
• Report to each meeting of the Board; and
• Implement new internal controls as appropriate and
strengthen others.
11
C O R P O R A T E G O V E R N A N C E continued
Risk Management continued
The establishment of the Risk Management Committee has
assisted the ongoing process of managing the Group’s risk
exposures and development of a standardised Group approach to
evaluation and reporting on key areas such as environmental,
occupational health and safety and incident reporting and
management.
Reporting to Shareholders
The Board of Directors aims to ensure that the shareholders are
informed of all major developments affecting the consolidated
entity’s state of affairs. Information is communicated to
shareholders as follows:
• The Concise Annual Review is distributed to all shareholders
(unless a shareholder has specifically requested not to receive
the document). A copy of the full financial report is available
free of charge, upon request, from the Company;
• The half-yearly report contains summarised financial information
and a review of the operations of the consolidated entity during
the period. A brief summary of half-yearly results is distributed
to shareholders;
• The Annual General Meeting provides an opportunity for
active participation of shareholders to ensure a high level of
accountability and identification with the consolidated entity’s
strategy and goals. At this meeting shareholders have the
opportunity to vote on the appointment of directors. In addition,
where appropriate, special meetings of shareholders are held
to consider relevant proposals which need to be dealt with
outside the time frame of the annual meeting; and
• The Company’s internet website at www.toll.com.au is regularly
updated and provides details of recent announcements by the
Company to the stock exchange, annual and half-yearly reports,
and general information on the Company and its businesses.
12
TOLL HOLDINGS LIMITED
STATEMENTS OF FINANCIAL PERFORMANCE
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
The Company
Notes
2001
$’000
2000
$’000
2001
$’000
2000
$’000
Revenue from ordinary activities
2
1,637,927
1,384,339
57,310
70,893
Expenses from ordinary activities
3
1,536,805
1,311,393
28,492
48,857
101,122
72,946
28,818
22,036
Earnings before borrowing costs, tax, depreciation
and amortisation
Borrowing Costs
4
5,727
3,542
4,645
2,720
Depreciation and amortisation
4
29,793
21,452
1,779
1,275
30
414
–
–
–
66,016
47,952
22,394
18,041
16,415
7,285
(1,092)
1,647
49,601
40,667
23,486
16,394
363
263
–
–
49,238
40,404
23,486
16,394
(48)
–
–
–
49,190
40,404
23,486
16,394
Share of net profits of associates and joint ventures
accounted for using the equity method
Profit from ordinary activities before income tax
Income tax relating to ordinary activities
5(a)
Profit from ordinary activities after income tax
Net profit attributable to outside equity interest
Net profit attributable to members of the parent entity
Non-owner transaction changes in equity
Net exchange difference on translation of financial
statements of self sustaining foreign operations
19
Total changes in equity from non-owner related
transactions attributable to the members of the parent entity
Basic earnings per share
34
80.49¢
67.67¢
Diluted earnings per share
34
77.79¢
66.28¢
The above profit and loss statements are to be read in conjunction with the accompanying notes to the financial statements set out on
pages 16 to 57.
13
STATEMENTS OF FINANCIAL POSITION
AS AT 30 JUNE 2001
Consolidated
Notes
The Company
2001
$’000
2000
$’000
2001
$’000
2000
$’000
46,896
26,691
179
10
Current Assets
Cash assets
Receivables
7
214,943
158,123
1,067
1,496
Inventories
8
7,596
4,140
–
–
Other
9
21,932
27,916
2,955
2,286
291,367
216,870
4,201
3,792
7
3,174
3,746
121,410
118,995
Investments accounted for using the equity method
10
17,813
–
–
–
Other financial assets
11
9,145
5,613
124,568
1,988
Property, plant and equipment
12
317,484
172,236
23,955
20,681
Intangible assets
13
45,748
–
–
–
5(d)
12,485
4,808
2,942
2,418
9
1,526
–
1,526
–
Total Non-Current Assets
407,375
186,403
274,401
144,082
TOTAL ASSETS
698,742
403,273
278,602
147,874
Total Current Assets
Non-Current Assets
Receivables
Deferred tax assets
Other
Current Liabilities
Payables
14
163,719
117,740
9,306
2,142
Interest bearing liabilities
15
7,403
2,273
–
–
5(b)
18,158
6,531
902
2,056
17
94,339
58,556
19,778
16,301
283,619
185,100
29,986
20,499
15
180,190
42,886
134,811
26,500
5(c)
23,400
9,482
120
304
17
13,840
7,154
1,462
1,462
Total Non-Current Liabilities
217,430
59,522
136,393
28,266
TOTAL LIABILITIES
501,049
244,622
166,379
48,765
NET ASSETS
197,693
158,651
112,223
99,109
Current tax liabilities
Provisions
Total Current Liabilities
Non-Current Liabilities
Interest bearing liabilities
Deferred tax liabilities
Provisions
Equity
Contributed equity
18
108,625
98,756
108,625
98,756
Reserves
19
(48)
–
–
–
Retained profits
20
88,566
59,569
3,598
353
197,143
158,325
112,223
99,109
550
326
–
–
197,693
158,651
112,223
99,109
Total parent entity interest
Outside equity interests
TOTAL EQUITY
21
The above balance sheets are to be read in conjunction with the accompanying notes to the financial statements set out on
pages 16 to 57.
14
TOLL HOLDINGS LIMITED
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
Notes
The Company
2001
$’000
2000
$’000
2001
$’000
2000
$’000
Cash receipts in the course of operations
1,659,799
1,350,718
57,310
40,923
Cash payments in the course of operations
(1,544,343)
(1,276,084)
(34,631)
(30,899)
Restructure costs paid
(6,118)
(10,957)
–
–
Interest received
1,113
472
86
2
551
329
–
–
(5,729)
(3,239)
(4,645)
(2,037)
(8,009)
(165)
(553)
(29)
97,264
61,074
17,567
7,960
1,213
–
–
–
(132,536)
(9,917)
(122,579)
–
(58,101)
(50,958)
(4,999)
(22,915)
30,244
20,261
–
29,970
(1,615)
(350)
–
–
(160,795)
(40,964)
(127,578)
7,055
Proceeds from borrowings
125,298
34,605
124,927
44,772
Repayment of borrowings
(32,332)
(40,688)
(6,500)
(49,525)
(12,538)
(10,438)
(12,538)
(10,438)
4,291
183
4,291
183
(983)
–
–
–
Net cash inflow/(outflow) from financing activities
83,736
(16,338)
110,180
(15,008)
Net increase/(decrease) in cash held
20,205
3,772
169
7
Cash at the beginning of the financial year
26,691
22,919
10
3
46,896
26,691
179
10
Cash flows from operating activities
Dividend received
Interest and other costs of finance paid
Income taxes paid
5(b)
Net cash inflow/(outflow) from operating activities
Cash flows from investing activities
Proceeds on disposal of controlled entities
Payment for entities and businesses, net of cash acquired
33(d)
Payment for property, plant and equipment
Proceeds from sale of property, plant and equipment
2
Payment for investments
Net cash inflow/(outflow) from investing activities
Cash flows from financing activities
Dividends paid
6
Proceeds from share issue
Finance lease payments
Cash at the end of the financial year
Financing arrangements
Non-cash financing and investing activities
33(a)
16
33(e)
The above statements of cash flows are to be read in conjunction with the accompanying notes to the financial statements set out on
pages 16 to 57.
15
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
1. Statement of Significant Accounting Policies
The significant policies which have been adopted in the
preparation of this financial report are:
(a) Basis of Preparation
The financial report is a general purpose financial report which
has been prepared in accordance with Accounting Standards,
Urgent Issues Group Consensus Views, other authoritative
pronouncements of the Australian Accounting Standards Board
and the Corporations Act 2001.
It has been prepared on the basis of historical costs, and except
where stated, does not take into account changing money values
or fair values of non-current assets.
The accounting policies have been consistently applied by each
entity in the consolidated entity and, except where there is a
change in accounting policy, are consistent with those of the
previous year.
(b) Principles of Consolidation
(i) Controlled entities
The consolidated financial statements of the consolidated entity
include the financial statements of the Company, being the parent
entity and its controlled entities (‘the consolidated entity’).
Where an entity began or ceased to be controlled during the year,
the results are included only from the date control commenced or
up to the date control ceased.
Outside interests in the equity and results of the entities that are
controlled by the Company are shown as a separate item in the
consolidated financial statements.
(ii) Associates
Associates are those entities, other than partnerships, over which
the consolidated entity exercises significant influence and which
are not intended for sale in the near future.
In the consolidated financial statements investments in associates
are accounted for using equity accounting principles. Investments
in associates are carried at the lower of the equity accounted
amount and recoverable amount. The consolidated entity’s equity
accounted share of the associates’ net profit or loss is recognised
in the consolidated statement of financial performance from the
date significant influence commences until the date significant
influence ceases. Other movements in reserves are recognised
directly in consolidated reserves.
(iii) Joint Ventures
A joint venture is either an entity or operation that is jointly
controlled by the consolidated entity.
Joint venture entities
In the consolidated financial statements investments in joint
venture entities, including partnerships, are accounted for using
equity accounting principles. Investments in joint venture entities
are carried at the lower of the equity accounted amount and
recoverable amount.
The consolidated entity’s share of the joint venture entity’s net
profit or loss is recognised in the consolidated operating statement
of financial performance from the date joint control commences
until the date joint control ceases. Other movements in reserves
are recognised directly in consolidated reserves.
(iv) Transactions Eliminated on Consolidation
Unrealised gains and losses and inter-entity balances resulting
from transactions with or between controlled entities are
eliminated in full on consolidation.
Unrealised gains resulting from transactions with associates and
joint ventures are eliminated to the extent of the consolidated
entity’s interest. Unrealised gains relating to associates and joint
venture entities are eliminated against the carrying amount of
the investment. Unrealised losses are eliminated in the same
way as unrealised gains, unless they evidence a recoverable
amount impairment.
(c) Goodwill
Goodwill, representing the excess of the purchase consideration
and incidental expenses over the fair value of the identifiable
net assets acquired on the acquisition of a controlled entity is
amortised on a straight line basis. The period of amortisation is
the period of time during which benefits are expected to arise,
and varies from 5 to not more than 20 years.
Where a discount on acquisition arises the cost of individual
identifiable assets is determined by reducing proportionately the
fair value of non-monetary assets acquired until the discount
is eliminated. Any balance of the discount is credited to the
income statement.
The carrying value of goodwill is reviewed regularly and written
down where appropriate to reflect recoverable value.
(d) Revenue Recognition
(i) Sales Revenue
Sales revenue comprises revenue earned (net of GST, returns,
discounts and allowances) from the provision of services to
entities outside the consolidated entity. Sales revenue is
recognised when the services are provided.
(ii) Interest Income
Interest income is recognised as it accrues unless collectibility
is in doubt.
16
TOLL HOLDINGS LIMITED
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
1. Statement of Significant Accounting Policies continued
(iii) Asset Sales
The gross proceeds of asset sales are included as revenue of
the consolidated entity. The profit or loss on disposal of assets
is brought to account at the date an unconditional offer and
acceptance of sale is determined. The profit or loss on disposal
is calculated as the difference between the carrying amount of
the asset at the time of disposal and the net proceeds on disposal.
(iv) Other Revenue
Revenue recognition policies for investments and property, plant
and equipment are described in accounting policy notes 1(h) and
1(j) respectively.
exceeds the recoverable amount, the asset is written down to the
lower amount. The write-down is recognised as an expense in the
net profit or loss in the reporting period in which it occurs.
In assessing recoverable amounts the relevant cash flows have
not been discounted to their present value.
(g) Receivables
Trade Debtors
The collectibility of debts is assessed at balance date and specific
provision is made for any doubtful accounts. In addition, a general
provision is maintained for doubtful debts.
(v) Dividends
(h) Investments
Revenue from dividends and distributions from controlled entities
is recognised by the parent entity when they are declared by the
controlled entities.
(i) Controlled Entities
Revenue from dividends from associates is recognised by the
parent entity when dividends are received.
(ii) Associates
Revenue from dividends from other investments are recognised
when received.
Dividends received out of pre-acquisition reserves are eliminated
against the carrying amount of the investment and not recognised
in revenue.
(e) Taxation
Investments in controlled entities are carried in the Company’s
financial statements at the lower of cost and recoverable amount.
In the Company’s financial statements investments in unlisted
shares of associates are carried at the lower of cost and
recoverable amount.
(iii) Joint Ventures
In the Company’s financial statements investments in joint venture
entities other than partnerships are carried at the lower of cost
and recoverable amounts.
Income Tax
(iv) Other entities
The consolidated entity adopts the liability method of tax
effect accounting.
Investments in other listed and unlisted entities are measured at
the lower of cost and recoverable amount.
Income tax expense is calculated on operating profit adjusted for
permanent differences between taxable and accounting income.
The tax effect of timing differences which arise from items
being brought to account in different periods for income tax and
accounting purposes, is carried forward in the balance sheet as a
future income tax benefit or a provision for deferred income tax.
(i) Inventories
Inventories are carried at the lower of cost and net realisable value.
(j) Land and buildings held for resale
(i) Valuation
Future income tax benefits are not brought to account unless
realisation of the asset is assured beyond reasonable doubt. Future
income tax benefits relating to entities with tax losses are only
brought to account when their realisation is virtually certain.
Development properties are carried at the lower of cost and net
realisable value. Cost includes the costs of acquisition,
development, and holding costs such as interest, rates and taxes.
Interest and other holding costs incurred after completion of
development are expensed as incurred.
The tax effect of capital losses is not recorded unless realisation
is virtually certain.
(ii) Recognition of income
(f) Non-Current Assets
Income from sales is recognised when unconditional contracts are
exchanged and a significant non-refundable deposit is received.
The carrying amounts of non-current assets are reviewed to
determine whether they are in excess of their recoverable amount
at balance date. If the carrying amount of a non-current asset
17
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
1. Statement of Significant Accounting Policies continued
(k) Property, Plant and Equipment
(i) Acquisition
Items of property, plant and equipment are recorded at cost and
depreciated as outlined below.
The cost of property, plant and equipment constructed by the
consolidated entity includes the cost of materials and direct labour
and an appropriate proportion of fixed and variable overheads.
(ii) Revaluations
Land and buildings are independently valued every three years on
an existing use basis of valuation. This is in addition to the annual
review for recoverable amount referred to in Note 1(f). Refer
Note 12 for further details.
As these revaluations are not recorded in the Company’s accounts,
items of property, plant and equipment are carried at the lower of
cost, less accumulated depreciation, and recoverable amount.
Items of property, plant and equipment, including buildings
and leasehold property but excluding freehold land, are
depreciated/amortised over their estimated useful lives. The
depreciation rates used for each class of asset are as follows:
• Buildings
2.5% – 4%
• Leasehold improvements
2.5% – 15%
• Plant and equipment
8.5% – 40%
• Leased plant and equipment
8.5% – 33%
The straight line method and the reducing balance method are
used. Assets are depreciated or amortised from the date of
acquisition, or in respect of internally constructed assets, from
the time an asset is completed and held ready for use.
(iv) Leased Plant and Equipment
Leases of plant and equipment under which the Company or its
controlled entities assume substantially all the risks and benefits
of ownership are classified as finance leases. Other leases are
classified as operating leases.
Assets acquired under finance lease are capitalised. A lease asset
and a lease liability equal to the present value of the minimum
lease payments are recorded at the inception of the lease.
Contingent rentals are written off as an expense of the accounting
period in which they are incurred. Capitalised lease assets are
amortised on a straight line basis over the term of the relevant
lease, or where it is likely the consolidated entity will obtain
ownership of the asset, the life of the asset. Lease liabilities
are reduced by repayments of principal. The interest components
of the lease payments are charged to the statement of financial
performance.
TOLL HOLDINGS LIMITED
(v) Deferred Expenditure
Material items of expenditure are deferred to the extent that
they are recoverable out of future revenue, do not relate solely
to revenue which has already been brought to account, and will
contribute to the future earning capacity of the consolidated entity.
Deferred expenditure is amortised over the period in which the
related benefits are expected to be realised. Deferred expenditure
is reviewed annually to determine the amount, if any, that is no
longer recoverable. Any such amount is charged to the statement
of financial performance.
(l) Provisions
(iii) Depreciation and Amortisation
18
Payments made under operating leases are charged against
profits in equal instalments over the accounting periods covered
by the lease term, except where an alternative basis is more
representative of the pattern of benefits to be derived from the
leased property.
(i) Employee Entitlements
Annual Leave
The provisions for employee entitlements to annual leave
represent the amount which the consolidated entity has a present
obligation to pay resulting from employees’ services provided up to
the balance date. The provision has been based on current wage
and salary rates and includes related on-costs.
Long Service Leave
The liability for employee entitlements to long service leave
represents the present value of the estimated future cash outflows
to be made by the employer resulting from employees’ services
provided up to the balance date.
Liabilities for employee entitlements which are not expected
to be settled within twelve months are discounted using the rates
attaching to national government securities at balance date, which
most closely match the terms of maturity of the related liabilities.
In determining the liability for employee entitlements,
consideration has been given to future increases in wage
and salary rates, and the consolidated entity’s experience with
staff departures. Related on-costs have also been included
in the liability.
(ii) Doubtful Debts
The collectibility of debts is assessed at year end and specific
provision is made for any doubtful accounts.
(iii) Restructure
A provision for restructuring on acquisition is only recognised at
the date of acquisition where there is a demonstrable commitment
and a detailed plan such that there is little or no discretion to avoid
payments to other parties and the amount can be reliably estimated.
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
1. Statement of Significant Accounting Policies continued
The provision relates only to costs associated with the
acquired entity.
Other provisions for restructuring are only recognised when a
detailed plan has been approved and the restructuring has either
commenced or been publicly announced. Costs related to ongoing
activities are not provided for.
(m) Senior Executive Option Plan, Executive Share
Option Scheme and Employee Share Scheme
Toll Holdings Limited grants options to certain executives under
the Executive Share Option Scheme. Members approved the
adoption of the Senior Executive Option Plan at a general meeting
on 7 July 1999. Other than the costs incurred in administering the
plan and scheme which are expensed as incurred, there is no other
expense to the consolidated entity.
Toll Holdings Limited may issue shares to Group employees.
Shares are issued to employees after a qualifying period at the
current market price. Employees are required to pay a nominal
amount for these shares, with the balance made up by an interest
free loan from the Company. The interest free loan is reduced via
the dividends on the employee shares.
(n) Superannuation Fund
The Company and its controlled entities contribute to employee
superannuation funds. Contributions are expensed as they
are incurred.
(o) Cash
For purposes of the statements of cash flows, cash includes
deposits at call which are readily convertible to cash on hand and
which are used in the cash management function on a day to day
basis, net of outstanding bank overdrafts.
(p) Earnings per Share
(i) Basic Earnings per Share
Basic earnings per share is determined by dividing the operating
profit after income tax attributable to members of Toll Holdings
Limited adjusted for preference dividends, by the weighted
average number of ordinary shares outstanding during the financial
year, adjusted for bonus elements in ordinary shares issued during
the financial year.
(ii) Diluted Earnings per Share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share by taking into account
the effect of convertible notes on issue during the financial year,
and also the effect of share options on issue during the
financial year.
(q) Payables
Liabilities are recognised for amounts to be paid in the future for
goods or services received, whether or not billed to the company or
consolidated entity. Trade accounts payable are normally settled
within 30 days.
(r) Commercial Bills
Commercial bills are carried on the balance sheet at their principal
amount. Interest on bills is paid at the time bills are rolled over or
when drawn down and expensed over the period over which the
bill is outstanding. Any amounts not expensed by year end are
included in ‘prepayments’.
(s) Derivatives
The principal objective of using derivative financial instruments is
to manage the interest rate exposure on the net borrowings of the
consolidated entity. To achieve this objective, a combination of
derivatives including interest rate swaps, forward rate agreements
and interest rate options may be used.
(i) Hedges
Hedging derivatives must be effective at reducing the risk
associated with the exposure being hedged and must be
designated at the inception of the contract.
Where derivative transactions are designated as a hedge of an
interest rate exposure, the net amounts receivable or payable are
recorded in interest expense on an accruals basis. Costs or gains
arising at the time of entering into the hedge are deferred and
amortised over the life of the hedge.
The premiums paid on interest rate options and any realised gains
on exercise are included in Other Assets or Other Liabilities and
are amortised to interest expense over the term of the contract.
If the derivative that is used to manage an interest rate exposure is
terminated early, any resulting gain or loss is deferred within Other
Assets or Other Liabilities and amortised to interest expense over
the remaining period originally covered by the terminated contract.
If the underlying interest rate exposure position ceases to exist,
any deferred gain or loss is recognised immediately in the
statement of financial performance.
Gains and losses on derivatives used to hedge exposures arising
from anticipated transactions are deferred in the statement of
financial position until such time as the accounting impact of the
anticipated transaction is recognised in the financial report. Such
gains and losses only qualify for deferral where there is a high
probability of the future transaction materialising.
19
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
1. Statement of Significant Accounting Policies continued
All non-designated derivative contracts are initially recorded at the
relevant contract rate. Transactions outstanding at balance date
are valued at the rates ruling on that date and any gains and
losses are brought to account in the statement of financial
performance.
(ii) Interest rate swaps and forward rate agreements
Net interest payments under interest rate swap contracts are
recognised on an accruals basis in the statement of financial
performance as an adjustment to interest expense during
the period.
(iii) Interest rate options
Interest rate options are purchased to hedge interest rate
exposures. The premiums paid on interest rate options and any
realised gains or losses on exercise are included in other assets
and are amortised to interest expense over the terms of the
agreements.
(t) Goods and services tax
Revenues, expenses and assets are recognised net of the amount
of goods and services tax (GST), except where the amount of GST
incurred is not recoverable from the Australian Tax Office (ATO). In
these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of expense.
Receivables and payables are stated with the amount of
GST included.
The net amount of GST recoverable from, or payable to, the ATO
is included as a current asset or liability in the statement of
financial position.
Cash flows are included in the statement of cash flows on a gross
basis. The GST components of cash flows arising from investing
and financing activities which are recoverable from, or payable to,
the ATO are classified as operating cash flows.
performance are translated at a weighted average rate for the
year. Exchange differences arising on translation are taken directly
to the foreign currency translation reserve.
The balance of the foreign currency translation reserve relating to
a foreign operation that is disposed of is transferred to retained
earnings in the year of disposal.
(v) Reclassification of financial information
Some line items and sub-totals reported in the previous financial year
have been reclassified and repositioned in the financial statements
as a result of the first time application on 1 July 2000 of the revised
standards AASB 1018 Statement of Financial Performance, AASB
1034 Financial Report Presentation and Disclosures and the new
AASB 1040 Statement of Financial Position.
Adoption of these standards has resulted in the transfer of the
reconciliation of opening to closing retained profits from the
face of the statement of financial performance to Note 20.
The following assets and liabilities have been removed from
previous classifications and are now disclosed as separate line
items on the face of the statement of financial position:
• deferred tax assets, previously presented within other
non-current assets;
• current tax liabilities, previously presented within current
provisions; and
• deferred tax liabilities, previously presented within
non-current provisions.
(w) Financial instruments issued
Other financial instruments
The proceeds received from the issue of Convertible Notes are
classified as a liability and related distribution as interest expense.
(x) Borrowing costs
(u) Foreign currency
(i) Transactions
Foreign currency transactions are translated to Australian currency
at the rates of exchange ruling at the dates of the transactions.
Amounts receivable and payable in foreign currencies at balance
date are translated at the rates of exchange ruling on that date.
Exchange differences relating to amounts payable and receivable
in foreign currencies are brought to account as exchange gains or
losses in the statement of financial performance in the financial
year in which the exchange rates change.
(ii) Translation of controlled foreign entities
The assets and liabilities of foreign operations, including
associates and joint ventures, that are self-sustaining are
translated at the rates of exchange ruling at balance date. Equity
items are translated at historical rates. The statements of financial
20
TOLL HOLDINGS LIMITED
Borrowing costs include interest, amortisation of discounts or
premiums relating to borrowings and amortisation of ancillary
costs incurred in connection with arrangement of borrowings.
Where funds are borrowed specifically for the acquisition,
construction or production of a qualifying asset, the amount of
borrowing costs capitalised is that incurred in relation to that
borrowing, net of any interest earned on those borrowings. Where
funds are borrowed generally, borrowing costs are capitalised
using a weighted average capitalisation rate.
(y) Comparatives
Where necessary, comparative information has been reclassified
to achieve consistency in disclosure with current financial year
amounts and other disclosures.
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
The Company
2001
$’000
2000
$’000
2001
$’000
2000
$’000
1,602,798
1,360,098
695
1,076
–
–
21,220
14,000
301
329
2,920
3,321
3,471
3,179
272
218
–
–
32,117
22,306
1,113
472
86
2
30,244
20,261
–
29,970
1,637,927
1,384,339
57,310
70,893
Transport costs
890,549
820,731
–
–
Wages and salaries
400,672
324,292
16,664
7,711
73,052
54,618
2,183
1,510
Other
172,532
111,752
9,645
39,636
Total
1,536,805
1,311,393
28,492
48,857
2. Revenue from Ordinary Activities
Revenue from operating activities
Services
Other Revenue
From operating activities
Dividends
– Related parties
Distribution from trust
Rental revenue
Internal Recharges
Interest
– Other parties
From outside operating activities
Proceeds from sale of non-current assets
Total revenue from ordinary activities
3. Expenses from Ordinary Activities
Occupancy
21
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
The Company
2001
$’000
2000
$’000
2001
$’000
2000
$’000
5,365
2,774
4,645
2,720
762
768
–
–
(400)
–
–
–
5,727
3,542
4,645
2,720
4,369
4,238
486
509
21,966
15,532
1,240
764
26,335
19,770
1,726
1,273
Leased assets capitalised
1,637
1,682
–
2
Goodwill
1,768
–
–
–
Deferred costs
53
–
53
–
Total amortisation
3,458
1,682
53
2
1,522
744
–
–
20,285
14,320
3,983
3,038
41,155
31,201
695
1,474
39,641
29,105
–
–
3,598
4,526
–
(252)
4. Profit from Ordinary Activities before Income Tax Expense
Operating profit before income tax is arrived at after charging/(crediting)
the following items:
Charging
Borrowing costs:
Other parties
Finance charges on capitalised leases
Less capitalised borrowing costs
Depreciation of:
Buildings
Plant and equipment
Total depreciation
Amortisation of:
Amounts set aside to provision for:
Doubtful trade debts
Employee entitlements
Operating lease rental expense – property
– plant and equipment
Crediting
Net gains/(losses) on sales of property, plant and equipment
22
TOLL HOLDINGS LIMITED
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
The Company
2001
$’000
2000
$’000
2001
$’000
2000
$’000
22,445
17,263
7,614
6,495
1,860
444
735
17
640
666
67
52
–
–
(7,215)
(5,040)
(6,078)
(7,990)
(343)
–
(692)
(707)
–
(24)
31
–
–
–
18,206
9,676
858
1,500
–
(1,035)
–
–
(144)
(1,062)
22
423
Under/(Over) provision in prior years accounts
(1,647)
(294)
(1,972)
(276)
Income tax expense attributable to operating profit
16,415
7,285
(1,092)
1,647
Current years income tax provision
21,511
9,403
1,415
2,512
Deferred income tax provision
(2,500)
(3,591)
(86)
20
(949)
4,235
(449)
374
(1,647)
(2,762)
(1,972)
(1,259)
16,415
7,285
(1,092)
1,647
Balance at beginning of year
6,531
55
2,056
832
Income tax paid
(8,009)
(165)
(553)
(29)
269
–
–
–
Current year’s income tax expense on operating profit
21,511
9,403
1,415
2,512
Under/(Over) provision in prior year
(2,144)
(2,762)
(2,016)
(1,259)
18,158
6,531
902
2,056
5. Taxation
(a) Income Tax Expense
Prima facie tax payable @ 34% (2000 – 36%)
Tax effect of permanent differences
Non deductible expenditure
Non deductible depreciation and amortisation
Rebate on dividend income
Tax deductible expenditure and depreciation not included
in operating profit
Non-assessable gains
Assessable gains
Income tax on operating profit before individually significant
income tax items
Individually significant income tax items:
Tax benefit attributable to recognising tax losses not previously
brought to account
Restatement of deferred tax balances due to change in
income tax rate to 30%
Total income tax expense is made up of:
Future income tax benefit
Under/(Over) provision in prior year
(b) Provision for Current Income Tax
Movements during the year were as follows:
Income tax provision acquired
23
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
The Company
2001
$’000
2000
$’000
2001
$’000
2000
$’000
20,095
5,655
239
211
3,305
3,827
(119)
93
23,400
9,482
120
304
11,757
4,808
2,942
2,418
728
–
–
–
12,485
4,808
2,942
2,418
4,060
6,592
–
–
5. Taxation continued
(c) Provision for Deferred Income Tax
Provision for deferred income tax comprises the estimated expense
at current income tax rates on the following items:
Difference in depreciation and amortisation of property, plant and
equipment for accounting and income tax purposes
Expenditure currently deductible but deferred and amortised
for accounting purposes
(d) Future Income Tax Benefit
Future income tax benefit comprises the estimated future benefit
at current income tax rates of the following items:
Provisions and accrued employee entitlements not currently deductible
Tax losses carried forward
(e) Future Income Tax Benefit Not Taken to Account
The future income tax benefit arising from tax losses and timing
differences in a controlled entity, which is a Company, which have not
been recognised as an asset because recovery is not.virtually certain:
Tax losses carried forward
The potential future income tax benefit which has not been recognised as an asset will only be obtained if:
(i)
the relevant Company derives future assessable income of a nature and an amount sufficient to enable the benefit to be
realised, or the benefit can be utilised by another Company in accordance with Division 170 of the Income Tax Assessment Act
1997;
(ii) the relevant Company and/or the consolidated entity continues to comply with the conditions for deductibility imposed by the
law; and
(iii) no changes in tax legislation adversely affect the relevant Company and/or the consolidated entity in realising the benefit.
24
TOLL HOLDINGS LIMITED
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
The Company
2001
$’000
2000
$’000
–
11
9,191
7,820
11,050
9,078
20,241
16,909
8,165
8,139
12,538
10,218
–
220
5,576
4,604
154
89
18,268
15,131
6. Dividends Paid and Declared
Dividends provided for or paid by the Company are:
Ordinary
(i) a final ordinary dividend of 12 cents per share franked to 50% with Class C (36%) franking credits
paid 30 September 1999, in relation to shares issued following the exercise of Executive Share
Options exercised on 19 July 1999 and 15 September 1999
(ii) an interim ordinary dividend of 15 cents per share franked to 60% with Class C (34%) franking
credits, paid 30 March 2001 (2000: 13 cents 20% franked Class C (36%))
(iii)a final ordinary dividend of 18 cents per share franked to 70% with Class C (30%) franking
credits (2000: 15 cents 50% franked Class C (34%)) has been declared by the Directors
Dividend franking account
Class C (30% (2000:34%)) franking credits available to shareholders of Toll Holdings Limited
for subsequent financial years.
The above available amounts are based on the balance of the dividend franking account at year-end
adjusted for:
(a) franking credits that will arise from the payment of the amount of the provision for income tax;
(b) franking debits that will arise from the payment of dividends recognised as a liability at year-end;
(c) franking credits that will arise from the receipt of dividends recognised as receivables at year-end;
and
(d) franking credits that the entity may be prevented from distributing in subsequent years.
The ability to utilise the franking credits is dependent upon there being sufficient available profits to
declare dividends.
Dividends actually paid, satisfied by the issue of shares under the dividend reinvestment plan or
satisfied by the reduction in employee loans under the employee share plan during the years ended
30 June 2001 and 30 June 2000 were as follows:
Paid in cash – ordinary
Paid in cash – preference
Satisfied by issue of shares
Satisfied by reduction in employee share plan loans
The above figures are reconciled to cash at the end of the financial year as shown in the statements of cash flows.
25
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
The Company
2001
$’000
2000
$’000
2001
$’000
2000
$’000
190,901
135,960
–
–
8,611
3,899
–
–
182,290
132,061
–
–
32,653
26,062
1,067
1,496
214,943
158,123
1,067
1,496
–
–
118,253
115,249
3,174
3,746
3,157
3,746
3,174
3,746
121,410
118,995
7,596
4,140
–
–
7,596
4,140
–
–
21,932
9,972
2,955
2,286
–
17,944
–
–
21,932
27,916
2,955
2,286
1,579
–
1,579
–
53
–
53
–
1,526
–
1,526
–
Cost of acquisition
–
1,625
–
–
Development costs capitalised
–
16,319
–
–
–
17,944
–
–
7. Receivables
Current
Trade debtors
Less: Provision for doubtful trade debtors
Other debtors
Non-Current
Loans to controlled entities (Note 29)
Other loans
8. Inventories
Raw materials and stores – at cost
9. Other Assets
Current
Prepayments
Land and building held for resale – at cost
Non-Current
Deferred Expenditure
Less Accumulated amortisation
Land and buildings held for resale comprises:
26
TOLL HOLDINGS LIMITED
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
The Company
2001
$’000
2000
$’000
2001
$’000
2000
$’000
17,813
–
–
–
17,813
–
–
–
– at cost (Note 29)
–
–
124,568
1,988
Listed shares – at cost
2,184
–
–
–
Unlisted shares – at cost
6,961
5,613
–
–
9,145
5,613
124,568
1,988
Freehold land – at cost
14,239
13,017
2,102
2,102
Freehold buildings – at cost
43,973
35,231
10,475
10,431
6,185
4,492
1,796
1,535
37,788
30,739
8,679
8,896
Leasehold improvements – at cost
50,134
50,036
3,816
3,816
Less: Accumulated depreciation
16,660
14,084
1,731
1,508
33,474
35,952
2,085
2,308
85,501
79,708
12,866
13,306
Plant and equipment – at cost
397,208
180,983
8,000
6,727
Less: Accumulated depreciation
202,854
100,656
5,192
3,849
194,354
80,327
2,808
2,878
17,429
9,544
–
–
3,748
2,027
–
–
13,681
7,517
–
–
208,035
87,844
2,808
2,878
23,948
4,684
8,281
4,497
317,484
172,236
23,955
20,681
10. Investments Accounted for Using the Equity Method
Non-Current
Associates (Note 30 (a))
11. Other Financial Assets
Non-Current
Investments in other entities
Shares in controlled entities, unquoted
12. Property, Plant and Equipment
Land and Buildings
Less: Accumulated depreciation
Total Land and Buildings
Plant and Equipment
Leased plant and equipment – at cost
Less: Accumulated amortisation
Total Plant and Equipment
Capital works in progress – at cost
Total Property, Plant and Equipment – Net book value
27
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
The Company
2001
$’000
2000
$’000
2001
$’000
2000
$’000
13,017
10,492
2,102
7,206
Additions
1,745
3,040
–
–
Acquisitions through entity acquired
1,102
–
–
–
Disposals
(1,625)
(515)
–
(5,104)
Carrying amount at end of year
14,239
13,017
2,102
2,102
30,739
40,285
8,896
10,903
Additions
4,920
–
46
22,272
Acquisitions through entity acquired
3,542
–
–
–
–
(8,103)
–
(23,880)
Depreciation
(1,413)
(1,443)
(263)
(399)
Carrying amount at end of year
37,788
30,739
8,679
8,896
35,952
45,864
2,308
45
428
–
–
2,373
Acquisition through entity acquired
1,922
–
–
–
Disposals
(1,872)
(7,117)
–
–
Amortisation
(2,956)
(2,795)
(223)
(110)
Carrying amount at end of year
33,474
35,952
2,085
2,308
Carrying amount at beginning of year
80,327
61,369
2,878
3,084
Additions
35,060
34,490
1,170
1,767
124,082
–
–
–
–
–
–
–
Disposals
(23,149)
–
–
(1,209)
Depreciation
(21,966)
(15,532)
(1,240)
(764)
Carrying amount at end of year
194,354
80,327
2,808
2,878
12. Property, Plant and Equipment continued
Reconciliations
Reconciliations of the carrying amounts for each class of property, plant
and equipment are set out below:
Freehold land
Carrying amount at beginning of year
Buildings
Carrying amount at beginning of year
Disposals
Leasehold improvements
Carrying amount at beginning of year
Additions
Plant and Equipment
Acquisition through entity acquired
Transfer from capital works in progress
28
TOLL HOLDINGS LIMITED
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
The Company
2001
$’000
2000
$’000
2001
$’000
2000
$’000
Carrying amount at beginning of year
7,517
1,779
–
31
Additions
5,424
7,420
–
–
Acquisition through entity acquired
2,377
–
–
–
–
–
–
(29)
Amortisation
(1,637)
(1,682)
–
(2)
Carrying amount at end of year
13,681
7,517
–
–
4,684
3,874
4,497
3,431
Additions
19,264
810
3,784
1,066
Carrying amount at end of year
23,948
4,684
8,281
4,497
47,516
–
–
–
1,768
–
–
–
45,748
–
–
–
53,546
55,475
–
139
110,173
62,265
9,306
2,003
163,719
117,740
9,306
2,142
12. Property, Plant and Equipment continued
Leased plant and equipment
Disposals
Capital works in progress
Carrying amount at beginning of year
Borrowing costs were capitalised to land at a weighted average rate
of 6.6% (2000: Nil)
Valuation of Land and Buildings
Independent valuations were prepared as at 30 June 2001 on all major
properties by Colliers Jardine on the basis of fair market value based on
existing use. This valuation totalled $65.9 million and this reflected a
surplus over carrying values of $13.3 million. These valuations are in
accordance with the Company’s policy of obtaining an independent
valuation of land and buildings every three years.
13. Intangible Assets
Goodwill – at cost
Less Accumulated Amortisation
14. Payables
Current
Trade creditors
Other creditors and accruals
29
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
The Company
2001
$’000
2000
$’000
2001
$’000
2000
$’000
Commercial bills – secured
1,652
1,000
–
–
Commercial bills – unsecured
1,500
–
–
–
Lease liabilities
2,466
1,044
–
–
1,785
229
–
–
7,403
2,273
–
–
Commercial bills – secured
10,808
7,000
–
–
Commercial bills – unsecured
25,500
26,500
20,000
26,500
114,811
–
114,811
–
Bank loans
10,000
–
–
–
Other loans
3,311
2,500
–
–
11,974
6,734
–
–
3,786
152
–
–
180,190
42,886
134,811
26,500
500
500
–
–
Commercial bills
98,461
93,000
79,000
85,000
Other facilities
42,175
45,350
–
–
141,136
138,850
79,000
85,000
–
–
–
–
39,460
34,500
20,000
26,500
4,815
–
–
–
44,275
34,500
20,000
26,500
500
500
–
–
Commercial bills
59,001
58,500
59,000
58,500
Other facilities
37,360
45,350
–
–
96,861
104,350
59,000
58,500
15. Interest Bearing Liabilities
Current
– secured (Note 27(d))
Hire purchase liabilities (Note 27(e))
Non-Current
Convertible Notes – unsecured, subordinated
Lease liabilities – secured (Note 27(d))
Hire purchase liabilities (Note 27(e))
The nature and terms of bank and other credit facilities available to the
consolidated entity are set out in Note 16.
16. Financing Arrangements
The consolidated entity has unrestricted access at balance date to the
following lines of credit:
Bank overdraft – unsecured
Facilities used at balance date:
Bank overdraft
Commercial bills
Other facilities
Facilities unused at balance date:
Bank overdraft
30
TOLL HOLDINGS LIMITED
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
16. Financing Arrangements continued
Security
During the previous financial year, the Company renegotiated its security position with its financiers. All current financing is subject
to negative pledge arrangements.
Borrowings acquired with the purchase of the Finemore Group are subject to fixed and floating charges over the assets of Finemore
Holdings Ltd and its controlled entities.
Commercial bills of $5.8 million are secured by mortgages over the operating lease of properties of the consolidated entity.
Bank Overdraft
The bank overdraft is payable on demand and is subject to annual review. Interest on bank overdrafts is charged at prevailing
market rates.
Commercial Bill Acceptance Facility
The commercial bill acceptance facility is available for varying periods and due for review as follows.
$’000
Review Date
Floating Rate Funded
15,000
31 December 2001
Fixed and/or Floating and/or Capped Rate Funded
23,000
31 December 2001
Floating Rate Funded
20,000
31 December 2001
Fixed and/or Floating and/or Capped Rate Funded
21,000
30 November 2002
5,800
31 August 2003
650
30 September 2003
Fixed Rate Funded
2,695
31 December 2003
Fixed Rate Funded
3,316
4 April 2005
Fixed and/or Floating and/or Capped Rate Funded
7,000
31 August 2007
Fixed Rate Funded
Floating Rate Funded
98,461
The weighted average effective interest rate is 6.34%.
Convertible Notes
The Convertible Notes are unsecured and subordinated. Interest is payable half-yearly on 30 September and 31 March at a fixed rate
of 6.53% p.a. Maturity date of the Convertible Notes is 31 March 2006. Notes may be converted into ordinary shares prior to maturity
date by note holders on 31 March and 30 September each year commencing from 30 September 2002.
Toll may redeem the Convertible Notes prior to maturity date, if at any time after 30 September 2002 the volume weighted average
sale price of Toll’s ordinary shares is above $23.00 for 20 consecutive business days, or if less than 1 million Convertible Notes remain
on issue.
Other Bank Facilities
These represent payroll/tape negotiation authority, bank guarantee facilities and encashment negotiation advices.
31
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
The Company
Notes
2001
$’000
2000
$’000
2001
$’000
2000
$’000
33(d)
10,363
331
–
–
6
11,050
9,078
11,050
9,078
Other
25,444
16,276
835
813
Employee entitlements
47,482
32,871
7,893
6,410
94,339
58,556
19,778
16,301
–
–
–
–
Other
5,775
1,700
–
–
Employee entitlements
8,065
5,454
1,462
1,462
13,840
7,154
1,462
1,462
47,482
32,871
7,893
6,410
8,065
5,454
1,462
1,462
55,547
38,325
9,355
7,872
8,984
5,980
108,625
98,756
108,625
98,756
17. Provisions
Current
Restructure
Dividends
Non-Current
Restructure
33(d)
Employee Entitlements
Aggregate employee entitlements, including on costs
Current
Non-current
Number of employees at year end
18. Contributed Equity
(a) Issued and Paid Up Capital
61,387,592 ordinary shares fully paid (2000 – 60,522,484)
Option holders have no rights to participation in any share issue of the Company.
(b) The Company has an established Dividend Reinvestment Plan, for the purpose of providing shareholders the opportunity to apply
dividends paid or declared by the Company in subscribing for shares rather than receiving those dividends in cash. Shares are
issued under the plan currently at a 2.5% (2000: 2.5%) discount to the weighted average market price over the five business days
immediately after the transfer books close date for the purposes of the dividend payment.
32
TOLL HOLDINGS LIMITED
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
18. Contributed Equity continued
(c) Movements in issued and paid up ordinary share capital of the Company during the past year was as follows:
Date
Details
No.
of Shares
Issue
Price
Share
Capital
$’000
Ordinary Shares
1 Jul 00
Opening balance
60,522,484
30 Sep 00
Dividend Reinvestment Plan Issue
752,486
11.03
8,300
31 Mar 01
Dividend Reinvestment Plan Issue
112,622
15.0018
1,689
Rounding – Issue of DRP Shares
98,756
(120)
Closing Balance
61,387,592
108,625
(d) Senior Executive Option Plan and Executive Share Option Scheme
As at 30 June 2001 unissued ordinary shares of the Company under option are:
Grant Date
Total Options
Granted
Unexpired
Options
No. of
Executives
Exercise
Price $
Expiry Date
1,025,000
955,000
36
2.1460
30 Jun 2003
23 Jun 99
100,000
100,000
1
5.4150
22 Jun 2004
6 Aug 99
400,000
400,000
2
5.4576
5 Aug 2004
22 Dec 99
10,000
10,000
2
2.1460
30 Jun 2003
29 May 00
1,115,000
1,110,000
40
7.9700
28 May 2005
26 Jul 00
5,000
5,000
1
7.9700
28 May 2005
2 Oct 00
25,000
25,000
1
7.9700
28 May 2005
2 Nov 00
400,000
400,000
2
11.8242
1 Nov 2005
2 Nov 00
100,000
100,000
1
7.9700
28 May 2005
27 Jun 01
40,000
40,000
2
19.9100
26 Jun 2006
1 Jul 98
Each option is convertible into one ordinary share at any time between three and five years after the grant date. The options granted
are only exercisable on the satisfaction of specific hurdle criteria with regard to the Company’s Total Shareholder Return and diluted
EPS growth relative to the All Industrials (excluding banks) or ASX 200 Industrials diluted EPS growth, during the first three years
after the grant date.
Nil ordinary shares were issued during the financial year on the exercise of options granted under the executive share option scheme
(2000: 230,000 shares).
The market value of shares under these options at 30 June 2001 was $61,355,805.
The market value of options exercised during the year, at the time of exercise was Nil (2000: $1,465,200).
33
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
The Company
2001
$’000
2000
$’000
2001
$’000
2000
$’000
–
–
–
–
Net translation adjustment
(48)
–
–
–
Balance at end of year
(48)
–
–
–
Retained profits at beginning of year
59,569
36,074
353
868
Net profit attributable to members of the parent entity
49,238
40,404
23,486
16,394
Dividends (Note 6)
(20,241)
(16,909)
(20,241)
(16,909)
Retained profits at the end of the year
88,566
59,569
3,598
353
19. Reserves
Foreign Currency Translation
Balance at beginning of year
Nature and purpose of reserves
Foreign currency reserve
The foreign currency translation reserve records the foreign currency
differences arising from the translation of self-sustaining foreign
operations.
20. Retained Profits
21. Outside Equity Interests
Outside equity interests in controlled entities comprise:
Consolidated
2001
$’000
2000
$’000
Interest in retained profits at the beginning of the
financial year after adjusting for outside equity interests
in entities acquired during the financial year
687
13
Interest in operating profit after income tax
363
263
Interest in dividends provided for or paid
(550)
–
Interest in retained profits at the end of the financial year
500
276
50
50
–
–
550
326
Interest in share capital
Interest in reserves
Total outside equity interests
34
TOLL HOLDINGS LIMITED
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
22. Additional Financial Instruments Disclosure
(a) Interest rate risk
The consolidated entity enters into interest rate derivatives to manage cashflow risks associated with the interest rates on borrowings
that are floating.
Interest Rate Swaps
Interest rate swaps allow the consolidated entity to swap floating rate borrowings into fixed rates. Maturities of swap contracts are
principally three years.
Each contract involves quarterly payment of the net amount of interest. At 30 June 2001, the weighted average fixed rate was 5.85%
(2000: 5.71%) and the floating rates were at bank bill rates. The weighted average effective floating interest rate at 30 June 2001 was
5.88% (2000: 6.66%).
Interest Rate Collar
Interest rate collars allow the consolidated entity to fix a range for its floating rate borrowings where interest rate costs are certain.
Maturities are generally for three years. The range of the interest rate collars is from 5.37% to 7.75%.
Interest rate risk exposures
Fixed interest maturing in:
1 year
or less
$’000
Over 1
to 5 years
$’000
More than
5 years
$’000
Non-Interest
Bearing
$’000
Total
$’000
46,896
–
–
–
–
46,896
Receivables
–
–
–
–
218,117
218,117
Investments
–
–
–
–
26,958
26,958
46,896
–
–
–
245,075
291,971
37,650
1,892
9,918
–
3,311
52,771
–
–
–
–
163,719
163,719
2001
Weighted
Floating
Average Interest Rate
Interest Rate
$’000
Financial Assets
Cash
4.75%
Financial Liabilities
Bank overdraft and loans
5.89%
Accounts payable
Lease and HP liabilities
6.73%
–
4,251
15,760
–
–
20,011
Convertible Notes
6.53%
–
–
114,811
–
–
114,811
–
–
–
–
11,050
11,050
37,650
6,143
140,489
–
178,080
362,362
(60,000)
10,000
50,000
Dividend payable
Interest rate swaps*
* Notional principal amount
35
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
22. Additional Financial Instruments Disclosure continued
Interest rate risk exposures
Fixed interest maturing in:
1 year
or less
$’000
Over 1
to 5 years
$’000
More than
5 years
$’000
Non-Interest
Bearing
$’000
Total
$’000
26,691
–
–
–
–
26,691
Receivables
–
–
–
–
161,869
161,869
Investments
–
–
–
–
5,613
5,613
26,691
–
–
–
167,482
194,173
31,500
3,000
–
–
2,500
37,000
–
–
–
–
117,740
117,740
–
1,273
6,886
–
–
8,159
–
–
–
–
9,078
9,078
31,500
4,273
6,886
–
129,318
171,977
(20,000)
5,000
15,000
2000
Weighted
Floating
Average Interest Rate
Interest Rate
$’000
Financial Assets
Cash
5.50%
Financial Liabilities
Bank overdraft and loans
6.91%
Accounts payable
Lease and HP liabilities
7.49%
Dividend payable
Interest rate swaps*
*Notional principal amount
Credit Risk Exposures
Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted.
On-Balance Sheet Financial Instruments
The credit risk on financial assets, excluding investments, of the consolidated entity which have been recognised on the balance sheet
is the carrying amount, net of any provision for doubtful debts.
The consolidated entity minimises concentrations of credit risk by undertaking transactions with a large number of customers and
counterparties.
The consolidated entity is not materially exposed to any individual customer.
Off-Balance Sheet Financial Instruments
The credit risk exposures arising from derivative financial instruments is measured by the net fair value of the contracts. The
concentration of credit risk is minimised as counterparties are recognised financial intermediaries with acceptable credit ratings.
(b) Net fair values of financial assets and liabilities
Valuation approach
Net fair values of financial assets and liabilities are determined by the consolidated entity on the following basis:
On-Balance Sheet Financial Instruments
Monetary financial assets and financial liabilities not readily traded in an organised financial market are determined by valuing them
at the present value of contractual future cashflows on amounts due from customers or due to suppliers. The carrying amounts of bank
term deposits, accounts receivable, accounts payable, bank loans, lease and hire purchase liabilities and dividends payable
approximate net fair value.
The net fair value of investments in unlisted shares in other corporations is determined by reference to the underlying net assets and
an assessment of future maintainable earnings and cashflows of the respective corporations.
The net fair value of the Convertible Notes has been estimated based on the present value of future cashflows excluding any value
attributable to the future conversion option.
36
TOLL HOLDINGS LIMITED
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
22. Additional Financial Instruments Disclosure continued
(b) Net fair values of financial assets and liabilities continued
Off-Balance Sheet Financial Instruments
The net fair value of off-balance sheet financial instruments detailed in this note reflects the estimated amounts which the
consolidated entity expects to pay or receive to terminate the contracts (net of transaction costs) or to replace the contracts
at their current market rate as at reporting date. This is based on independent market quotations and is determined using standard
valuation techniques.
On-Balance Sheet Financial Instruments
The carrying amount and net fair values of financial assets and liabilities as at the reporting date are as follows:
Consolidated
Consolidated
2001
Carrying
amount
$’000
2001
Net fair
value
$’000
2000
Carrying
amount
$’000
2000
Net fair
value
$’000
46,896
46,896
26,691
26,691
Receivables
218,117
218,117
161,869
161,869
Investments
26,958
26,958
5,613
5,613
291,971
291,971
194,173
194,173
52,771
52,771
37,000
37,000
163,719
163,719
117,740
117,740
20,011
21,526
8,159
8,159
114,811
112,366
–
–
11,050
11,050
9,078
9,078
362,362
361,432
171,977
171,977
2001
$’000
2000
$’000
(385)
140
Financed Assets
Cash
Financed Liabilities
Bank overdrafts and loans
Accounts payable
Lease and hire purchase liabilities
Convertible Notes
Dividends
Off-Balance Sheet Financial Instruments
The net fair value of financial instruments not recognised on the
statement of financial position held as at the reporting date are:
Interest rate derivatives
37
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
The Company
2001
$
2000
$
2001
$
2000
$
2,951,690
2,695,709
2,541,652
2,312,617
2001
2000
$ 50 – $ 60
3
3
$100 – $110
–
–
$140 – $150
1
1
$180 – $190
–
–
$360 – $370
–
1
$440 – $450
1
–
$740 – $750
–
1
$840 – $850
1
–
$870 – $880
–
1
$930 – $940
1
–
7
7
23. Directors’ Remuneration
Directors’ Income
Total income paid or payable or otherwise made available to all
directors of the Company and controlled entities from
the Company or any related party
The number of directors of the Company whose income from
the Company or any related party which falls within the following bands:
$’000 – $’000
Consolidated
The Company
2001
$
2000
$
2001
$
2000
$
12,563,162
12,201,619
11,817,871
11,056,672
24. Executives’ Remuneration
Total income received, or due and receivable, from entities in the
consolidated entity or related entities by executive officers
(including directors) whose income was at least $100,000
38
TOLL HOLDINGS LIMITED
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
24. Executives’ Remuneration continued
The number of executive officers (including directors) of the
Company or related parties falls within the following bands:
Consolidated
The Company
$’000 – $’000
2001
2000
2001
2000
$100 – $110
1
3
1
3
$110 – $120
3
–
2
–
$120 – $130
2
4
2
4
$130 – $140
1
5
1
5
$140 – $150
6
4
6
4
$150 – $160
1
6
1
3
$160 – $170
3
5
2
5
$170 – $180
3
3
3
3
$180 – $190
2
3
2
2
$190 – $200
5
2
4
2
$200 – $210
4
2
4
2
$210 – $220
2
1
2
1
$220 – $230
2
4
2
3
$230 – $240
1
1
1
1
$240 – $250
4
1
4
1
$250 – $260
1
2
1
2
$260 – $270
3
2
2
1
$330 – $340
–
2
–
2
$360 – $370
–
1
–
1
$370 – $380
–
2
–
2
$400 – $410
2
–
2
–
$440 – $450
1
–
1
–
$450 – $460
1
1
1
1
$460 – $470
2
–
2
–
$740 – $750
–
1
–
1
$840 – $850
1
–
1
–
$870 – $880
–
1
–
1
$930 – $940
1
–
1
–
52
56
48
50
39
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
The Company
2001
$
2000
$
2001
$
2000
$
565,343
358,000
60,000
50,000
499,139
335,000
70,000
60,000
1,064,482
693,000
130,000
110,000
$’000
$’000
$’000
$’000
41,733
28,800
–
–
25. Auditors’ Remuneration
Audit services:
Auditors of the consolidated entity
Other services:
Auditors of the consolidated entity
Total auditors’ remuneration
26. Contingent Liabilities
The details and estimated maximum amounts of contingent liabilities, are set out below:
(i) The consolidated entity has guaranteed the bank facilities of controlled
entities in respect of bank overdraft, payroll and cheque clearing accounts
(ii) Under the terms of the Deed of Cross Guarantees, described in Note 31, the Company has guaranteed any deficiency which
might arise if Toll Transport Pty Ltd, Toll Ports Pty Ltd, Hollandia Holdings Pty Ltd, Kentucky Woods Pty Ltd, Toll Properties Pty Ltd,
Freshmark Limited, Refrigerated Roadways Pty Ltd, Toll Logistics Australia Pty Ltd, Toll Energy Logistics Pty Ltd, Toll North Pty Ltd,
W & M Meats Transport Pty Ltd, Carpentaria Environmental Services Pty Ltd, Malleys Transport Pty Ltd, Toll IPEC Pty Ltd, Toll
Technologies Pty Ltd, AEI Group Transport Services Pty Limited, Blanbury Pty Ltd, Burnie Searoads Pty Limited, CJ Dean Transport
Pty Ltd, Canberra Pacific Nominees Pty Ltd, Toll (FHL) Limited, Finemores Pty Ltd, Finemores (No 2) Pty Ltd, Finemores (No 3) Pty
Ltd, Toll (Albury) Pty Ltd, Toll (FS) Pty Ltd, Finemores (No 46) Pty Ltd, Toll (Cowra) Pty Ltd, Toll Fleet Management Pty Ltd, Toll (FGCT)
Pty Ltd, Toll (FLAG) Pty Ltd, Toll (FM) Pty Ltd, Finemores Properties Pty Ltd, Toll Pty Ltd, Toll (Fuel) Pty Ltd, Gainall Pty Ltd, LJ Pty Ltd,
Performance Leasing Pty Ltd, Real Property Leases Pty Ltd, Takedda Pty Ltd, Toll Relocations Pty Ltd, Toll Technologies Investments
Pty Ltd, Strang Stevedoring Australia WDW Pty Ltd, and Forest Products Terminal Pty Ltd are wound up.
(iii) The Company has guaranteed various bank facilities, payments and other financial facilities of controlled entities through the
normal course of business.
From time to time the Group is subject to claims and litigation during the normal course of business. The directors have given
consideration to such matters which are or may be subject to litigation at year end, and are of the opinion that no material liability exists.
The directors are not aware of any circumstances or information, which would lead them to believe that these liabilities will
crystallise and consequently no provisions are included in the financial statements in respect of these matters.
27. Commitments for Expenditure
(a) Superannuation Commitments
All employees of the consolidated entity are entitled to benefits on retirement, disability or death. The superannuation plans provide
benefits based on accumulated funds. Employees may contribute to the plans at various percentages of their wages and salaries.
Entities in the consolidated entity also contribute to the plans.
40
TOLL HOLDINGS LIMITED
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
The Company
2001
$’000
2000
$’000
2001
$’000
2000
$’000
24,842
8,276
–
–
74,150
53,381
453
808
163,908
109,187
349
966
66,173
39,792
–
–
304,231
202,360
802
1,774
Property
198,286
116,055
540
1,137
Plant and Equipment
105,945
86,305
262
637
304,231
202,360
802
1,774
3,569
1,680
–
–
12,734
8,251
–
–
–
–
–
–
16,303
9,931
–
–
1,863
2,153
–
–
14,440
7,778
–
–
2,466
1,044
–
–
11,974
6,734
–
–
14,440
7,778
–
–
27. Commitments for Expenditure continued
(b) Capital Expenditure Commitments
Total capital expenditure contracted for at balance date but not provided
for in the financial statements, payable:
Not later than one year
(c) Non-Cancellable Operating Lease Commitments
Future non-cancellable operating lease rentals of property, plant and
equipment, not provided for in the financial statements, payable:
Not later than one year
Later than one year but not later than five years
Later than five years
(d) Finance Lease Commitments
Finance lease rentals are payable as follows:
Not later than one year
Later than one year but not later than five years
Later than five years
Future Lease rentals
Less: Future finance charges
Total Finance lease commitments in financial statements
Finance lease commitment
Current (Note 15)
Non-current (Note 15)
Total lease liability
41
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
The Company
2001
$’000
2000
$’000
2001
$’000
2000
$’000
Not later than one year
1,997
244
–
–
Later than one year but not later than five years
4,289
156
–
–
–
–
–
–
6,286
400
–
–
715
19
–
–
5,571
381
–
–
Current (Note 15)
1,785
229
–
–
Non-current (Note 15)
3,786
152
–
–
Total hire purchase liability
5,571
381
–
–
27. Commitments for Expenditure continued
(e) Hire purchase commitments
Hire purchase payments are payable as follows:
Later than five years
Minimum repayments
Less Future finance charges
Total hire purchase commitments in the financial statements
Hire purchase liability
28. Related Parties
Directors
The names of each person holding the position of director of Toll Holdings Limited at any time during the financial year are as follows:
Mr P Rowsthorn
Mr P A Little
Mr M Rowsthorn
Mr J A Moule AM
Mr N Chatfield
Mr W Farrands, and
Mr R Paul AM
Apart from the details disclosed in this note, no director has entered into a material contract with the Company or the consolidated
entity since the end of the previous financial year and there are no material contracts involving directors’ interests existing at year end.
Remuneration, Retirement Benefits and Service Arrangements
Details of directors’ remuneration, inclusive of superannuation and retirement payments are set out in Note 23.
42
TOLL HOLDINGS LIMITED
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
28. Related Parties continued
Transactions of Directors and Director Related Entities concerning Shares
An aggregate of 186,415 ordinary shares of Toll Holdings Limited were issued to directors in accordance with the Dividend
Reinvestment Plan during the year (2000: 272,841).
An aggregate of nil ordinary shares of Toll Holdings Limited were acquired by directors or their director related entities during the
year. (2000: 25,000)
An aggregate of 1,518,953 convertible notes of Toll Holdings Limited were acquired by directors or their director related entities
during the year. (2000: Nil)
An aggregate of nil ordinary shares of Toll Holdings Limited were issued to directors in accordance with the Employee Share
Ownership Plan during the year (2000: 700).
No ordinary shares of Toll Holdings Limited were disposed of by the directors or their director related entities during the year.
(2000: Nil)
The aggregate number of ordinary shares of Toll Holdings Limited held directly, indirectly or beneficially by directors or their director
related entities at balance date was 21,553,781 (2000: 21,367,366).
At 30 June 2001, directors or their director related entities hold directly, indirectly or beneficially 1,000,000 options over ordinary
shares (2000: 500,000).
During the year the Company granted options over 570,000 unissued shares under the Senior Executive Option Plan and Executive
Share Option Scheme (2000: 1,525,000). Of these, 500,000 options were granted to directors and their director-related entities on the
same terms and conditions as those granted to other employees (2000: 400,000).
Other Transactions with the Company or its Controlled Entities
A director of the Company, Mr J Moule AM, is a director of National Australia Financial Management Limited (NAFM) which
provides management services to the Company’s superannuation fund which is managed in accordance with a Master Trust
arrangement. NAFM’s parent company National Australia Bank Limited is the Company’s banker and derives fees and charges in
accordance with normal commercial practices.
A director of the Company, Mr W Farrands, was Chairman of The Ready Group Pty Ltd, for a period during the year ended 30 June
2001, a company which is a provider of labour resources to some of the company’s businesses to service their additional outsourced
requirements, on normal commercial terms.
A director of the Company, Mr R Paul AM, was a director of Evans Deakin Industries Limited, for a period during the year ended
30 June 2001 which supplies equipment and services to some businesses within the Toll Group on normal commercial terms.
The company contributed $100,000 during the year to Paul Little Racing Pty Ltd for promotional and advertising arrangements.
The company, of which Mr P Little is a director, was involved in motor racing within Australia.
In all matters outlined above, the terms and conditions of the transactions were no more favourable than those available, or which
might reasonably be expected to be available on similar transactions to non-director related entities on an arms length basis.
43
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
28. Related Parties continued
Wholly Owned Group
The wholly owned group consists of Toll Holdings Limited and its wholly owned controlled entities as set out in Note 29.
Transactions between Toll Holdings Limited and related parties in the wholly owned group during the years 30 June 2001 and
30 June 2000 consisted of:
(a) loans advanced by Toll Holdings Limited;
(b) loans repaid to Toll Holdings Limited;
(c) the payment of interest on the above loans;
(d) the payment of dividends to Toll Holdings Limited;
(e) the payment of property rentals to Toll Holdings Limited; and
(f) the payment of head office overheads to Toll Holdings Limited.
The above transactions were made on normal commercial terms and conditions and at market rates, except that there are no fixed
terms for the repayment of principal on loans advanced by or to Toll Holdings Limited.
Aggregate amounts included in the determination of operating profit before income tax that resulted from transactions with related
parties in the wholly owned group were as follows:
The Company
2001
$’000
2000
$’000
Interest revenue
86
2
Rental revenue
272
–
Dividend revenue
21,220
14,000
Internal recharge
32,117
22,306
2,920
3,321
118,253
115,249
Distribution from Trust
Aggregate amounts receivable from related parties in the wholly
owned group at balance date were as follows:
Non-current receivables
Ownership Interests in Related Parties
Interests held in related parties are set out in Note 29.
Superannuation Fund
Details of the consolidated entity’s employee superannuation funds are set out in Note 27(a).
44
TOLL HOLDINGS LIMITED
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Name of Entity
Class of Share
Notes
Equity Holding
2001
%
2000
%
29. Particulars in Relation to Controlled Entities
The Company
Toll Holdings Limited
Controlled Entities of Toll Holdings Limited
Toll Transport Pty Ltd
a,b
Ord
100
100
Toll Ports Pty Ltd
a,b
Ord
100
100
Hollandia Holdings Pty Ltd
a,b
Ord
100
100
i
Ord
–
100
Freshmark Limited
a,b
Ord
100
100
Toll Properties Pty Ltd
a,b
Ord
100
100
Kentucky Woods Pty Ltd
a,b
Ord
100
100
Toll North Pty Ltd
a,b
Ord
100
100
Toll North Pty Ltd
e
Pref
100
100
Toll IPEC Pty Ltd
a,b
Ord
100
100
Toll Technologies Pty Ltd
a,b
Ord
100
100
Toll (FHL) Limited
a,b
Ord
100
–
Toll Metro (NZ) Limited
d,h
Ord
100
100
Refrigerated Roadways Pty Ltd
a,b
Ord
100
100
Toll Logistics Australia Pty Ltd
a,b
Ord
100
100
Toll Energy Logistics Pty Ltd
a,b
Ord
100
100
GeelongPort Pty Ltd
b,h
Ord
100
100
GeelongPort Pty Ltd
f
Pref
100
100
W&M Meats Transport Pty Ltd
a,b
Ord
100
100
Carpentaria Environmental Services Pty Ltd
a,b
Ord
100
100
b,g,h
Ord
50
50
a,b
Ord
100
100
Movinghome.com.au Pty Ltd
b,h
Ord
100
–
Toll Technologies Investments Pty Ltd
a,b
Ord
100
–
Toll Relocations Pty Ltd
a,b
Ord
100
–
b,h
Ord
75
–
Toll Recycling Pty Ltd
Controlled Entities of Toll Transport Pty Ltd
Controlled Entities of Toll North Pty Ltd
R&H Transport Pty Ltd
Malleys Transport Pty Ltd
Controlled Entities of Toll Technologies Pty Ltd
Controlled Entities of Toll Relocations Pty Ltd
International Corporate Relocations Pty Ltd
45
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Name of Entity
Class of Share
Notes
Equity Holding
2001
%
2000
%
29. Particulars in Relation to Controlled Entities continued
Controlled Entities of Toll Ports Pty Ltd
Strang Stevedoring Australia WDW Pty Ltd
a,b
Ord
100
–
Forest Products Terminal Pty Ltd
a,b
Ord
100
–
Toll Pty Ltd
a,b
Ord
100
–
C J Dean Transport Pty Limited
a,b
Ord
100
–
Toll (Albury) Pty Ltd
a,b
Ord
100
–
Toll (FLAG) Pty Ltd
a,b
Ord
100
–
Finemores (No 46) Pty Limited
a,b
Ord
100
–
L J Pty Limited
a,b
Ord
100
–
Takedda Pty Limited
a,b
Ord
100
–
A.E.I. Group Transport Services Pty Limited
a,b
Ord
100
–
Toll Fleet Management Pty Ltd
a,b
Ord
100
–
Toll (FM) Pty Ltd
a,b
Ord
100
–
Finemore Properties Pty Ltd
a,b
Ord
100
–
Toll (FGCT) Pty Ltd
a,b
Ord
100
–
Toll Holdings (Thailand) Co., Limited
c,h
Ord
100
–
Resarta Pty Limited
b,h
Ord
100
–
Toll (Cowra) Pty Limited
a,b
Ord
100
–
Performance Leasing Pty Ltd
a,b
Ord
100
–
Autotrans Express (Aust) Pty Ltd
b,h
Ord
50
–
Blanbury Pty Limited
a,b
Ord
100
–
Canberra Pacific Nominees Pty Limited
a,b
Ord
100
–
a,b
Ord
100
–
Burnie Searoads Pty Limited
a,b
Ord
100
–
Finemore Pty Ltd
a,b
Ord
100
–
Finemores (No 2) Pty Limited
a,b
Ord
100
–
Finemores (No 3) Pty Limited
a,b
Ord
100
–
Toll (Fuel) Pty Ltd
a,b
Ord
100
–
Toll (FS) Pty Limited
a,b
Ord
100
–
Real Property Leases Pty Limited
a,b
Ord
100
–
c,h
Ord
51
–
c,j,h
Ord
51
–
Controlled Entities of Toll (FHL) Limited
Controlled Entities of Toll (FM) Pty Ltd
Controlled Entities of Takedda Pty Limited
Gainall Pty Limited
Controlled Entities of Gainall Pty Limited
Controlled Entities of Toll Holdings (Thailand) Co., Limited
Finemores Logistics (Thailand) Co., Limited
Toll (Thailand) Co., Limited
46
TOLL HOLDINGS LIMITED
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
29. Particulars in Relation to Controlled Entities continued
(a) Entities have entered into a Deed of Cross Guarantee with
Toll Holdings Limited in respect of relief granted from
specific accounting and financial reporting requirements in
accordance with a class order executed by the ASIC
on 13 August 1998.
(e) Non-cumulative redeemable preference shares.
(f) Non-cumulative preference shares.
(g) Shareholding actually 50.001% and as such R&H Transport
Pty Ltd is a controlled entity.
(h) Not included in Deed of Cross Guarantee.
(b) Incorporated in Australia.
(i) During the year 100% of the issued shares of Toll Recycling
Pty Ltd were sold.
(c) Incorporated in Thailand.
(d) Incorporated in New Zealand.
(j) Remaining 49% owned by Toll Holdings Limited.
Consolidated
The Company
2001
$’000
2000
$’000
2001
$’000
2000
$’000
414
–
–
–
30. Investments Accounted for Using the Equity Method
Share of net profits accounted for using the equity method
included in the statement of financial performance:
– associates
(a) Investments in associates
Details of investments in associates are as follows
Ordinary Share
ownership interest
Consolidated & The Company
Name
BBF Logistics
(Warehouse & Logistics)
Prixcar Services Pty Ltd
(Pre-dealer motor vehicle preparation)
Actraint No 126 Pty Ltd
(Management)
Minto Properties Pty Ltd
(Property Owner)
SeaHighway Pty Ltd
(Property Owner)
Investment Carrying Value
Consolidated
The Company
2001
$’000
2000
$’000
2001
$’000
2000
$’000
2001
$’000
2000
$’000
50
–
–
–
–
–
–
5,416
–
–
–
–
–
–
–
–
–
8,876
–
–
–
–
3,521
–
–
–
17,813
–
–
–
Ord Class
33
Ord Class
50
Ord Class
100
Ord ‘B’ class
100
Ord ‘B’ class
(i) Balance date for all associated companies is 30 June 2001.
(ii) The consolidated entity held 50% of Minto Properties Pty Ltd and SeaHighway Pty Ltd.
Dividends received from associates for the year ended 30 June 2001 by the consolidated entity amounted to $250,000.
47
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
2001
$’000
2000
$’000
Shares of associates’ operating profit before income tax
481
–
Share of associates income tax attributable to operating profit
(64)
–
Share of associates net profit
417
–
(3)
–
414
–
–
–
Shares of associates net profits accounted for using the equity method
414
–
Dividends from associates
(250)
–
164
–
–
–
17,649
–
Share of associates net profit
414
–
Dividends received from associates
(250)
–
17,813
–
Share of increment in associates asset revaluation reserves
–
–
Carrying amount of investments in associates at end of year
17,813
–
4,197
–
One year or later and no later than five years
15,677
–
Later than five years
11,411
–
31,285
–
30. Investments Accounted for Using the Equity Method continued
Results of associates
Adjustments:
– amortisation of goodwill arising from investment
Share of associates net profit accounted for using the equity method
Share of post-acquisition retained profits and reserves attributable to associates
Retained profits
Shares of associates retained profits at beginning of year
Share of associates retained profits at end of year
Movements in carrying amount of investments
Carrying amount of investments in associates at the beginning of the financial year
Investments in associates acquired during the year
Commitments
Share of associates operating lease commitments payable:
Within one year
48
TOLL HOLDINGS LIMITED
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
2001
$’000
2000
$’000
5,247
–
Non-current assets
26,513
–
Total assets
31,760
–
4,682
–
Non-current liabilities
17,071
–
Total liabilities
21,753
–
Net assets – as reported by associates
10,007
–
7,806
–
17,813
–
30. Investments Accounted for Using the Equity Method continued
Summary financial position of associates
The consolidated entity’s share of aggregate assets and liabilities of associates is as follows:
Current assets
Current liabilities
Adjustments arising from equity accounting
Net assets – equity adjusted
31. Deed of Cross Guarantee
Pursuant to an ASIC Class Order 98/1418 dated 13 August 1998, relief was granted to the wholly owned subsidiaries listed below
from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports.
It is a condition of the Class Order that the Company and each of the controlled entities enter into a Deed of Cross Guarantee. The
effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of winding up of any of
the controlled entities under certain provisions of the Corporations Act 2001. If a winding up occurs under the provisions of the Act,
the Company will be liable in the event that after six months any creditor has not been paid in full. The controlled entities have also
given similar guarantees in the event that the Company is wound up.
The controlled entities subject to the Deed are:
Controlled Entity
Date relief granted
Toll Transport Pty Ltd
11 June 1993
Toll Ports Pty Ltd
11 June 1993
Hollandia Holdings Pty Ltd
11 June 1993
Freshmark Limited
29 June 1994
Toll Properties Pty Ltd
21 December 1994
Kentucky Woods Pty Ltd
27 June 1995
Refrigerated Roadways Pty Ltd
15 June 1998
Toll Logistics Australia Pty Ltd
15 June 1998
Toll Energy Logistics Pty Ltd
15 June 1998
Toll North Pty Ltd
15 June 1998
W&M Meats Transport Pty Ltd
15 June 1998
Carpentaria Environmental Services Pty Ltd
15 June 1998
Toll IPEC Pty Ltd
26 October 1999
Malleys Transport Pty Ltd
16 February 2000
49
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
31. Deed of Cross Guarantee continued
Controlled Entity
Date relief granted
Toll Technologies Pty Ltd
5 June 2000
A E I Group Transport Services Pty Limited
5 June 2001
Blanbury Pty Ltd
5 June 2001
Burnie Searoads Pty Limited
5 June 2001
C J Dean Transport Pty Ltd
5 June 2001
Canberra Pacific Nominees Pty Limited
5 June 2001
Toll (FHL) Limited (formerly Finemore Holdings Limited)
5 June 2001
Finemore Pty Limited
5 June 2001
Finemores (No 2) Pty Limited
5 June 2001
Finemores (No 3) Pty Limited
5 June 2001
Toll (Albury) Pty Ltd (formerly Finemores (No 4) Pty Limited)
5 June 2001
Toll (Fuel) Pty Ltd (formerly Finemores (No 6) Pty Limited)
5 June 2001
Finemores (No 46) Pty Limited
5 June 2001
Toll (Cowra) Pty Ltd (formerly Finemores Cowra Pty Limited)
5 June 2001
Toll Fleet Management Pty Ltd (formerly Finemores Fleet Management Pty Limited)
5 June 2001
Toll (FGCT) Pty Ltd (formerly Finemores GCT Pty Limited)
5 June 2001
Toll (FLAG) Pty Ltd (formerly Finemores Logistics Australia Group Pty Limited)
5 June 2001
Toll (FM) Pty Ltd (formerly Finemores Management Pty Limited)
5 June 2001
Finemores Properties Pty Limited
5 June 2001
Toll Pty Ltd (formerly Finemores Pty Ltd)
5 June 2001
Toll (FS) Pty Ltd (formerly Finemores Services Pty Limited)
5 June 2001
Gainall Pty Limited
5 June 2001
L J Pty Limited
5 June 2001
Performance Leasing Pty Limited
5 June 2001
Real Property Leases Pty Limited
5 June 2001
Takedda Pty Limited
5 June 2001
Forest Products Terminal Pty Ltd
12 June 2001
Strang Stevedoring Australia WDW Pty Ltd
12 June 2001
Toll Relocations Pty Ltd
12 June 2001
Toll Technologies Investments Pty Ltd
12 June 2001
A consolidated statement of financial performance and consolidated statement of financial position, comprising the Company
and subsidiaries which are a party to the Deed, after eliminating all transactions between parties to the Deed of Cross Guarantee,
at 30 June 2001 is set out below.
50
TOLL HOLDINGS LIMITED
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated
2001
$’000
2000
$’000
Profit from ordinary activities before income tax
64,415
46,946
Income tax expense relating to ordinary activities
16,208
7,000
Profit from ordinary activities after income tax
48,207
39,946
Net profit
48,207
39,946
Retained profits at the beginning of the financial year
60,072
36,038
Dividends provided for or paid
20,491
16,909
Retained profits at the end of the financial year
87,788
59,075
Cash assets
43,622
24,275
Receivables
205,687
152,869
7,228
4,140
31. Deed of Cross Guarantee continued
Statement of financial performance
Statement of financial position
Inventories
Other
Total Current Assets
Receivables
Investments accounted for using the equity method
Other financial assets
Property, plant and equipment
19,893
27,883
276,430
209,167
3,090
3,662
17,737
–
9,145
5,613
306,194
169,803
Intangible assets
45,420
–
Deferred tax assets
12,113
4,677
1,526
–
Total Non-Current Assets
395,224
183,755
TOTAL ASSETS
671,654
392,922
Payables
157,816
114,777
7,404
2,273
17,913
6,370
Other
Interest bearing liabilities
Current tax liabilities
Provisions
92,229
58,269
Total Current Liabilities
275,362
181,689
Interest bearing liabilities
165,245
36,584
Deferred tax liabilities
23,176
9,482
Provisions
13,780
7,110
Total Non-Current Liabilities
202,201
53,176
TOTAL LIABILITIES
487,563
234,865
NET ASSETS
194,091
158,057
Contributed equity
106,312
98,656
Reserves
(9)
326
Retained profits
87,788
59,075
TOTAL EQUITY
194,091
158,057
51
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
32. Segment Information
The Group derives revenue from the provision of the total logistics solution through use of economy and express freight forwarding
services, storage, warehousing and distribution of freight nationally by road, rail and sea, rail linehaul operations, international
forwarding, ports management and time sensitive freight distribution services. These activities are inter-dependent and inter-related
as a collection of related services forming one segment within the transport and logistics industry.
Geographical Segments
The consolidated entity operates predominantly in Australia and all material revenue, operating profit before income tax and
segment assets relate to operations within Australia.
Consolidated
The Company
2001
$’000
2000
$’000
2001
$’000
2000
$’000
46,896
26,691
179
10
49,601
40,667
23,486
16,394
28,025
21,452
1,779
1,275
Amortisation of goodwill
1,768
–
–
–
Provision for doubtful trade debtors
1,522
780
–
–
(Profit)/loss on sale – other
(3,598)
(4,526)
–
252
(414)
–
–
–
76,904
58,373
25,265
17,921
(Increase)/decrease in trade debtors
(130)
(10,054)
–
–
(Increase)/decrease in other debtors
5,168
(20,544)
428
(943)
(856)
(309)
–
57
(5,975)
3,576
(669)
(2,221)
Increase/(decrease) in trade creditors
(21,528)
16,670
–
(16)
Increase/(decrease) in other creditors
32,628
6,300
7,186
1,762
2,162
342
1,483
2,047
–
–
(14,264)
(11,517)
11,437
6,415
(1,154)
1,224
(179)
3,895
(524)
(374)
(2,367)
(3,590)
(184)
20
97,264
61,074
17,567
7,960
33. Notes to the Statement of Cash Flows
(a) Reconciliation of cash
For the purposes of the Statements of Cash Flows, cash includes on hand
and at bank and short term deposits at call, net of outstanding bank
overdrafts. Cash as at the end of the financial year as shown in the
Statement of Cash Flows:
Cash at bank and on hand
(b) Reconciliation of operating profit after income tax to
net cash provided by operating activities
Operating profit after income tax
Add/(Less) non-cash items:
Depreciation and Amortisation
Share of associates net profit
Net cash inflow from operating activities before changes
in assets and liabilities
Changes in assets and liabilities adjusted for effects of purchase
and disposal of controlled entities during the financial year:
(Increase)/decrease in inventory
(Increase)/decrease in prepayments
Increase/(decrease) in provision for employee entitlements
(Increase)/decrease in loan to controlled entities
Increase/(decrease) in income taxes payable
(Increase)/decrease in future income tax benefit
Increase/(decrease) in provision for deferred income tax
Net cash inflow/(outflow) from operating activities
52
TOLL HOLDINGS LIMITED
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
33. Notes to the Statement of Cash Flows continued
(c) Financing facilities
Note 16 discloses details of financing arrangements.
(d) Acquisition/disposal of controlled entities
The following controlled entities were acquired or disposed of during the financial year:
Acquisition of entities
(i) During the financial year the consolidated entity purchased 100% of
the voting shares of Toll (FHL) Limited. Details of the acquisitions are
as follows:
$’000
Consideration
119,906
Cash acquired
(9,110)
Outflow of cash
110,796
Fair value of net assets of entity acquired:
Property, plant and equipment
100,253
Future income tax benefit
6,959
Cash assets
9,111
Inventories
2,564
Prepayments
5,638
Trade debtors
51,847
Investments
20,880
Other assets
11,817
Term loans and other external loans
(29,303)
Trade creditors
(19,806)
Other creditors
(24,226)
Lease liability
(7,418)
HP liability
Provision for employee entitlements
Provision for income tax
(121)
(13,342)
(189)
Provision for deferred income tax
(16,285)
Provision for restructuring
(11,403)
Other provisions
(7,415)
79,561
Outside equity interests at acquisition
(397)
79,164
Goodwill on acquisition
Consideration (cash)
40,742
119,906
53
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
33. Notes to the Statement of Cash Flows continued
(d) Acquisition/disposal of controlled entities continued
Toll (FHL) Limited (formerly Finemore Holdings Limited) was acquired on 2 March 2001 and the operating results of the entity from
that date have been included in consolidated operating profit. The entity operates in transport and logistics.
A restructuring provision of $11,403,000 was established for restructuring the operations of that entity, involving rationalisation of
employee numbers and property holdings. A balance of $8,704,510 remains in the provision at 30 June 2001.
(ii) During the financial year the consolidated entity purchased 100% of the voting shares of Strang Stevedoring Australia WDW
Pty Ltd. Details of the acquisition are as follows:
$’000
Consideration
8,351
Cash acquired
1,545
Outflow of cash
9,896
Fair value of net assets of entity acquired:
Property, plant and equipment
Future income tax benefit
23,355
334
Cash assets
(1,545)
Term loans and other external loans
(8,800)
HP liability
(5,298)
Provision for employee entitlements
Provision for restructuring
(983)
(1,700)
5,363
Goodwill on acquisition
2,988
Consideration (cash)
8,351
Strang Stevedoring Australia WDW Pty Ltd was acquired on 5 April 2001 and the operating results of the entity from that date have
been included in consolidated operating profit. The entity carries out stevedoring operations.
A restructuring provision of $1,700,000 was established for restructuring the operations of that entity, involving rationalisation of
employee numbers. A balance of $884,160 remains in the provision at 30 June 2001.
54
TOLL HOLDINGS LIMITED
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
33. Notes to the Statement of Cash Flows continued
(d) Acquisition/disposal of controlled entities continued
(iii)During the financial year the consolidated entity purchased the business operations of AR Neal. Details of the acquisition
are as follows:
$’000
Consideration
11,383
Cash acquired
–
Outflow of cash
11,383
Fair value of net assets of entity acquired:
Property, plant and equipment
9,359
Future income tax benefit
204
Inventories
28
Prepayments
347
Provision for employee entitlements
(735)
Provision for restructuring
(957)
Other provisions
(150)
8,096
Goodwill on acquisition
3,287
Consideration (cash)
11,383
The business operations of AR Neal was acquired on 19 January 2001, and the operating results of the business have been included
from that date.
A restructuring provision of $957,000 was established for restructuring the operations of the business, involving rationalisation of
employee numbers. A balance of $774,584 remains in the provision at 30 June 2001.
Disposal of entities
During the financial year the consolidated entity disposed of all of the ordinary shares of Toll Recycling Pty Ltd. Details of the
disposal are as follows:
$’000
Consideration (cash)
1,213
Net assets of entities disposed of:
Property, plant and equipment
28
Trade debtors
486
Other assets
10
Trade creditors
(307)
Other creditors
(1)
216
Profit on disposal
997
%
Interest held after disposal
–
The entity was disposed of on 18 April 2001 and the operating results to that date have been included in consolidated
operating profit.
55
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
33. Notes to the Statement of Cash Flows continued
(d) Acquisition/disposal of controlled entities continued
2000
$’000
(i) On 1 February 2000, the Group acquired the business operations of
Removals Australia from the Commonwealth Government.
Details of the acquisition are as follows:
Consideration
Deferred consideration
Outflow of cash to acquire operations
9,665
–
9,665
Fair value of net assets acquired:
Property, plant and equipment
Provisions
10,400
(735)
9,665
(ii) On 3 November 1999, the Group acquired the remaining 50% of the
share capital of Malleys Transport Pty Ltd. The 50% held at the beginning
of the financial year was previously carried as an investment.
Details of the acquisition are as follows:
Consideration
2,613
Cash acquired
(1,248)
Prior consideration
(1,113)
Outflow of cash to acquire operations
252
Net assets acquired:
Cash
1,248
Trade debtors
1,246
Inventories
Prepayments
Property, plant and equipment
Future income tax benefit
Other assets
107
3,082
(340)
31
Trade creditors
(953)
Lease liabilities
(501)
Hire purchase liabilities
(511)
Other creditors
(637)
Provision for employee entitlements
(134)
Provision for income tax
Consideration
56
36
TOLL HOLDINGS LIMITED
(61)
2,613
NOTES
TO AND FORMING PAR T OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
33. Notes to the Statement of Cash Flows continued
(e) Non-cash financing and investment activities
(i) During the year the consolidated entity acquired plant and equipment with an aggregate fair value of Nil (2000: $7.9 million)
by means of finance leases and hire purchase agreements.
(ii) 466,084 shares with an aggregate value of $5.5 million (2000: $4.6 million) were issued in accordance with the Dividend
Reinvestment Plan in lieu of remitting cash dividends.
(iii) A final prior year dividend of 15 cents per share and an interim current year dividend of 15 cents per share was utilised to reduce
employee loans in accordance with the Employee Share Plan. Employee loans were reduced as a result by $154,000 (2000: $88,000).
The above non cash activities are not reflected in the Statements of Cash Flows.
34. Earnings per Share
Consolidated
2001
2000
Weighted average number of ordinary shares used in the calculation
of basic earnings per share
61,171,908
59,709,722
Weighted average number of potential ordinary shares used in the calculation
of diluted earnings per share
65,163,988
61,238,256
Classification of securities as potential ordinary shares
The following securities have been classified as potential ordinary shares and included in diluted earnings per share only:
(a) Options outstanding under the Executive Share Option Plan;
(b) Convertible Notes.
35. Event Subsequent to Balance Date
On 5 September 2001, the Company announced it would form a consortium with Lang Corporation to bid for the sale of National Rail
Corporation and FreightCorp. Other than the above item, there has not arisen in the interval between the end of the financial year
and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the
Company, to affect significantly the operations of the consolidated entity, the results of those operations, or the state of affairs of
the consolidated entity, in future financial years.
57
DIRECTORS’ DECLARATION
1. In the opinion of the directors of Toll Holdings Limited:
(a) The financial statements and notes set out on pages 13 to 57 are in accordance with the Corporations Act 2001 including:
(i) giving a true and fair view of the financial position of the Company and consolidated entity as at 30 June 2001 and of their
performance, as represented by the results of their operations and their cash flows, for the year ended on that date; and
(ii) complying with Accounting Standards and the Corporations Regulations.
(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.
2. There are reasonable grounds to believe that the Company and the subsidiaries identified in Note 31 will be able to meet any
obligations or liabilities to which they are or may become subject by virtue of the Deed of Cross Guarantee between the Company and
those subsidiaries pursuant to ASIC Class Order 98/1418.
Signed in accordance with a resolution of the Directors:
P Rowsthorn
Director
P A Little
Director
Dated at Melbourne this 5th day of September 2001.
58
TOLL HOLDINGS LIMITED
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF TOLL HOLDINGS LIMITED
Scope
We have audited the financial report of Toll Holdings Limited for the financial year ended 30 June 2001, consisting of the statements of
financial performance, statements of financial position, statements of cash flows, accompanying notes 1 to 35, and the directors’
declaration set out on pages 13 to 58. The financial report includes the consolidated financial statements of the consolidated entity,
comprising the Company and the entities it controlled at the year’s end or from time to time during the financial year. The Company’s
directors are responsible for the financial report. We have conducted an independent audit of this financial report in order to express an
opinion on it to the members of the Company.
Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the financial
report is free of material misstatement. Our procedures included examination, on a test basis, of evidence supporting the amounts and
other disclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates. These procedures
have been undertaken to form an opinion whether, in all material respects, the financial report is presented fairly in accordance with
Accounting Standards and other mandatory professional reporting requirements and statutory requirements in Australia so as to present
a view which is consistent with our understanding of the Company’s and the consolidated entity’s financial position, and performance as
represented by the results of their operations and their cash flows.
The audit opinion expressed in this report has been formed on the above basis.
Audit opinion
In our opinion, the financial report of Toll Holdings Limited is in accordance with:
(a) the Corporations Act 2001, including:
(i) giving a true and fair view of the Company’s and consolidated entity’s financial position as at 30 June 2001 and of their
performance for the financial year ended on that date; and
(ii) complying with Accounting Standards and the Corporations Regulations 2001: and
(b) other mandatory professional reporting requirements.
KPMG
J J O’Connell
Partner
Melbourne
5 September 2001
59
SHAREHOLDER INFORMATION
Additional information required by the Australian Stock Exchange Listing Rules not elsewhere disclosed in this report.
The shareholder information set out below was applicable as at 28 August 2001.
A. Distribution of shareholders
(a) Analysis of numbers of shareholders by size of share holdings for ordinary securities.
Number
Units
%
1 – 1,000
4,599
2,064,219
3.33
1,001 – 5,000
2,683
6,287,416
10.16
5,001 – 10,000
356
2,547,292
4.12
10,001 – 100,000
236
6,617,626
10.70
100,001 – and over
39
44,356,039
71.69
7,913
61,872,592
100.00
There were one hundred and fifty seven holders with less than a marketable parcel of ordinary shares.
Each ordinary share is entitled to one vote per share.
B. Twenty largest shareholders
The names of the twenty largest shareholders are listed below:
No. of
Ordinary
Shares Held
Percentage of
Issue Shares
%
1 Mostia Dion Nominees Pty Ltd
8,908,691
14.40
2 Mr Paul Alexander Little
8,736,077
14.12
3 PGA (Investments) Pty Ltd
3,665,000
5.92
4 Mr Peter Rowsthorn
3,071,749
4.96
5 Chase Manhattan Nominees Limited
2,619,338
4.23
6 National Nominees Limited
2,501,198
4.04
7 Australian Foundation Investment Company Limited (Investment Portfolio A/C)
2,233,334
3.61
8 Westpac Custodian Nominees Limited
1,344,800
2.17
9 Perpetual Nominees Limited (JBEMEP A/C)
1,037,764
1.68
Name
10 Cable Nominees Pty Ltd (33390 A/C)
1,000,000
1.62
11 ANZ Nominees Limited
920,617
1.49
12 Queensland Investment Corporation
897,408
1.45
13 Djerriwarrh Investments Limited
600,000
0.97
14 Commonwealth Custodial Services Limited (No 17 A/C)
587,940
0.95
15 The National Mutual Life Association of Aust Limited
580,468
0.94
16 Camrock (Australia) Pty Limited
571,755
0.92
17 NRMA Nominees Pty Limited
560,835
0.91
18 Mr Richard John Raw and Mrs Rosemary Joan Raw
442,492
0.72
19 Citicorp Nominees Pty Limited
408,283
0.66
20 Mr Ashley William Lyons Hancock and Mrs Raelene Joy Hancock
404,875
0.65
41,092,624
66.41%
Total
C. Substantial shareholders
The following are registered by the Company as substantial shareholders, having declared a relevant interest in the number of voting
shares shown adjacent as at the date of giving the notice.
Number and Percentage of Shares in which
interest held in Ordinary Shares
Name
60
Number
Interest %
(a) Mr Mark Rowsthorn and related bodies corporate
9,235,850
14.93
(b) Mr Paul Alexander Little and related bodies corporate
8,984,147
14.52
(c) PGA (Investments) Pty Ltd and related bodies corporate
4,665,000
7.54
(d) Mr Peter Rowsthorn
3,112,160
5.03
TOLL HOLDINGS LIMITED
COMPANY DIRECTORY
Directors
Chairman
Peter Rowsthorn
Managing Director
Paul Little
Executive Directors
Mark Rowsthorn
Neil Chatfield
Non-Executive Directors
John Moule AM
William Farrands
Ronald Paul AM
Ross Dunning
Divisional Directors
John Ludeke
Long Distance
Don Telford
Logistics
Terry Mallon
Toll North
Graham Lyon
Toll Technologies
Stephen Stanley Development
Secretary
Bernard McInerney
Principal Registered Office
in Australia
Level 8, 380 St Kilda Road
Melbourne Vic 3004
Telephone: (03) 9694 2888
Facsimile: (03) 9694 2880
Divisional Offices
Long Distance & Logistics
Level 1, 32 Walker Street
North Sydney NSW 2060
Telephone: (02) 8923 2333
Facsimile: (02) 8904 0219
Toll North
146 Kerry Road
Archerfield Qld 4108
Telephone: (07) 3275 0400
Facsimile: (07) 3275 0444
Toll Technologies
Level 8, 380 St Kilda Road
Melbourne Vic 3004
Telephone: (03) 9694 2888
Facsimile: (03) 9694 2880
Share Register
Computershare Investor Services
Level 12, 565 Bourke Street
Melbourne Vic 3000
Telephone: (03) 9611 5711
Facsimile: (03) 9611 5710
Website: www.computershare.com
Stock Exchange Listing
Toll Holdings Limited shares are listed
on the Australian Stock Exchange
The home exchange is in Melbourne
Auditors
KPMG
Level 5, 161 Collins Street
Melbourne Vic 3000
Bankers
National Australia Bank
271 Collins Street
Melbourne Vic 3000
Solicitors
Clayton Utz
Solicitors & Attorneys
Level 18, 333 Collins Street
Melbourne Vic 3000
Designed and produced by The Ball Group Melbourne and Sydney 9/01 THL0057
We set the standard for
excellence of integrated logistics
and distribution through total
commitment to quality people
and services, with superior
financial results.
TOLL HOLDINGS LIMITED ABN 25 006 592 089
what does it mean to lead?
TOLL HOLDINGS LIMITED CONCISE ANNUAL REVIEW 2001
For Australia’s foremost logis
being focused.
On technical leadership, thou
leadership and marketplace
employees and shareholders
measured by our performanc
About how we plan and exec
And match it with superior p
This year’s annual report tak
through the eyes of Toll peop
mean to lead?’
Contents
2 Superior results
4 Chairman & Managing Director’s review
10 Staying focused on key competitive advantages
12 Concentrating on key market sectors
28 Technology
30 Senior Operational Management
31 Toll Service Divisions
32
34
36
42
52
54
IBC
IBC
Board of Directors
Corporate Governance
Report by Directors
Short form concise financial report
Nine year summary
Shareholder information
Company information
Toll People – Industry Sectors
tics firm it means
ght leadership, financial
leadership. For customers,
alike, leadership is
e.
ute our corporate strategy.
erformance.
es a close look at leadership
le by asking: ‘what does it
Value through
Opportunities
1
what does it mean to lead?
superior results
$m
cents
$m
1,197.7
77.79
20.2
66.3
16.9
14.9
51.4
596.3
7.9
26.8
22.3
333.3
5.4
141.9 141.9
’97
’98
’99
’00
’01
’97
’98
’99
’00
’01
’97
’98
’99
’00
’01
MARKET CAPITALISATION
E P S ( F U L LY D I L U T E D )
T O TA L D I V I D E N D S PA I D
The company is now in the ASX
top 100 and market capitalisation
continues to reflect our growth
Earnings per share has improved
on the back of improved margins
Shareholders continue to share
in the performance growth
year-on-year
FINANCIAL PERFORMANCE
2001
2000
% change
1,602.8
66.0
16.4
49.6
77.8
25.1
33.0
1,360.1
47.9
7.3
40.7
66.3
25.5
28.0
17.8
37.8
124.6
21.9
17.3
(1.6)
17.8
For the year
Revenue ($m)
Profit before income taxes ($m)
Income tax ($m)
Profit after income tax ($m)
Earnings per share fully diluted (¢)
Return on shareholders’ funds (%)
Dividends per share (¢)
✓ Best ever Toll Holdings result since listing
2
TOLL HOLDINGS LIMITED
✓
✓
✓
✓
✓
PERFORMANCE
PLUS
RESULTS
S U S TA I N E D P E R F O R M A N C E S I N C E L I S T I N G
Revenue ($m)
Profit before income taxes ($m)
Income tax ($m)
Profit after income tax for members ($m)
Earnings per share fully diluted (¢)
Return on shareholders’ funds (%)
Dividends per share (¢)
2001
1994
% change
1,602.8
66.0
16.4
49.6
77.8
25.1
33.0
118.5
8.8
2.5
6.1
25.3
18.8
12.0
1,252.6
650.0
556.0
713.1
207.5
33.5
175.0
3
what does it mean to lead?
A commitment to a focused strategy, disciplined
execution and outstanding productivity.
Dear fellow investor,
Another year of great news. Our eighth year of record performance,
and our most profitable year-to-date. Our market capitalisation –
probably one of the most important measures of progress for
shareholders more than doubled to $1.197 billion, the share price
rose 98 percent and earnings per share again reached record
levels, rising by 17.3 percent to 77.8 cents.
The results are very satisfying as the benefits of the sound
strategy we articulated more than 10 years ago continues to
be well received by our customers and shareholders. It is our
unwavering focus on executing that strategy, of being the best
fully-integrated logistics supplier we possibly can, that ensures
our leadership status.
A strategy and position that provides a solid platform to build
shareholder value. For Toll and our shareholders 2001 has
been nothing short of a very rewarding year.
4
TOLL HOLDINGS LIMITED
Chairman and Managing Director’s review
Chairman Peter Rowsthorn and Managing Director Paul Little
What are the key drivers?
Our ability to consistently deliver strong financial
results is a reflection of Toll’s commitment to the
same key drivers we had when the company listed
in 1993. They are a core focus and contributed
strongly to another record EBIT this year.
Operational cost control, better purchasing and
lower overheads are the traditional drivers. But
increasingly the use of technology to improve
efficiencies across the whole supply chain is a
consistent contributor. With the results benefitting
our customers as well as Toll.
How quickly and effectively we integrate our
acquisitions has also driven EBIT improvement.
With any acquisition, and Toll has acquired and
very successfully integrated 25 businesses in
the last 10 years, there is a ‘bedding in’ period
before benefits begin to flow in real positive
terms. In line with expectations the real benefit
of the Finemores integration will show in the next
fiscal year.
And finally, new infrastructure, transport
equipment, operating systems, new depots and
upgrade of port facilities all contributed to
increased capacity and greater synergies between
the operating businesses, improving integration,
increasing the efficiency, and ultimately the
profitability of the whole organisation.
A very important part of the company’s
infrastructure is technology. As we said in last
year’s report it is how you use technology, not
technology per se, that makes the difference. And
nothing could be more true. Toll is defining and
establishing itself as the leader – a logistics
technology company – working towards seamless
operations, enabling all our existing, and indeed
our newly acquired businesses, to work as one,
where the use of smart technology ‘value adds’
at every step of the total supply chain.
Such investment, in turn, is reflected in our ability
to win and service new contracts. 2001 was no
different: all parts of the business won significant
new contracts maintaining a consistent trend.
5
And what does it take to sustain
this excellence from year-to-year?
To elaborate, first, our relationships with our
customers. Over time, building strong and mutually
beneficial relationships has become a sustainable
competitive advantage for Toll. Each year that
goes by we get better at strengthening these
relationships.
Put simply, the best people. Having the right
strategy, vision and business model are only part
of a leadership story – sustainable company
excellence comes from having great people. Great
people are this organisation’s glue, they all have
a real ‘can-do’ attitude, it is an exciting place to
work and, in logistics, the only place to work.
Toll people clearly understand what has made
this company successful, they continue to maintain
performance, keeping costs under control,
focused on drivers to deliver outcomes reflected
in our performance.
Third privatisation. Opportunities still lie ahead for
Toll, in infrastructure assets, rail systems and port
facilities. Privatisation has provided Toll with
strong building blocks to grow the company in
the past and we see similar opportunities ahead.
Why are you confident that Toll’s
growth is sustainable?
In today’s environment companies need to
concentrate on their core business, not the
complexities of their logistics.
And Toll’s strategy of total supply chain
management continues to gain broad acceptance
in the marketplace – primarily, our business model
is very sound.
There are good reasons for this.
To be the leader in logistics today, we believe,
you need to effectively manage all stages of the
supply chain. You must have the resources and
critical mass to be able to offer a comprehensive
range of solutions up and down that supply chain.
You need a desire and a commitment to invest
in infrastructure and technology – to create
a platform that is ‘smart’, reliable, secure,
scalable – and fast. And you have to be very
good at integrating businesses to work together
– to achieve the necessary synergies to make
a good business better.
Our business model is a reflection of what the
customer wants. Which adds up to a strong base
for sustainable growth.
$2.10
6
TOLL HOLDINGS LIMITED
Oct. 1993
Fourth acquisitions. Logistics is a sector which
remains fragmented. With our acquisition strategy
well defined, our strong balance sheet will enable
us to aggressively pursue new acquisitions. As
already mentioned, Toll has a convincing track
record in acquisitions and their successful
integration into the company, achieving significant
operating and financial performance gains.
And lastly organic growth. Our expanding range
of services not only generate additional revenue
but as customers outsource more and more,
opportunities for organic growth likewise increase.
1993/2001 S H A R E P E R F O R M A N C E
A growing share price is evidence
of support for our strategic direction
and focus on shareholder value
Second outsourcing. The idea of outsourcing
is simple enough. A company turns over
management and control of their logistics
to a specialised logistics partner. In Australia
outsourcing levels are reasonably low by global
standards, but beginning to show steady growth,
presenting Toll with considerable sustainable
growth opportunities.
How much influence has new
technology had on the Group’s
ongoing earnings?
The influence of technology cannot be over
estimated at Toll. There is no question that the use
of sophisticated ‘smart technology’ alters the way
our industry delivers value to customers, and
that rapid growth in technology will play an ever
increasing role in the relationships between Toll
and its customers.
It is clear that technology is less about how fast
you introduce and adopt it, and more about
momentum, how mass times velocity impacts
much more powerfully. How technology influences
logistics is now defined by larger companies that
have big offline businesses and leading market
positions. Toll is a market leader with technology
solutions to support the enormous physical
capability we have across the whole business.
It is changing how we take and fulfil orders,
provide services, buy goods and services, link
with our suppliers and support thousands of our
employees in over 300 locations nationwide, to
collaborate and work in real time. And importantly
as one company. So customers have faster and
easier ways to do business with Toll.
Technology is now Toll’s backbone, but understand
our technology is for many customers, part of their
backbone as well. Today, customers want an
electronic view of the supply chain and Toll
Technologies’ solutions centre is at the forefront of
designing innovative technology solutions for
customers, by drawing on resources either from
within Toll or sourcing ‘best-practice’ externally,
to deliver the best possible outcome.
The payoffs: stronger customer relationships,
greater marketplace agility to reach existing and
new customers. Translating to lower operating
costs and improved margins, all which impact very
positively on ongoing earnings.
Infrastructure management
presents Toll with an opportunity
to differentiate its service from
the competition. How?
It is central to the outcome. Thinking
customers today understand that you can’t
fully manage logistics without control of
the supply chain – to make sure you really
can deliver what is being proposed. They
understand they need a partner that can
look across the whole supply chain and
see how to put it together efficiently
and remove waste. So to win you need
infrastructure. We are the only Australian
logistics operator to have invested as
heavily in infrastructure.
It is our clear differentiator.
And a solid and very strong
growth platform.
$9.85
June 30/00
$19.51
June 30/01
With an economy and talk of
a downturn what is the outlook
for Toll?
Whilst there are fluctuations across various
sectors of the economy, Toll is well placed to
manage its business under any economic cycle. In
fact a downturn in some sectors has a favourable
outcome for our business – customers tend to
outsource more in pursuing more cost effective
ways of managing their supply chains.
In addition, the spread of our business is such that
we service a range of different market sectors, be
it automotive, beverage, food and retail, industrial,
ports, relocations and resources where we have
high levels of contracted business in each.
And the types of sectors we operate in are,
in many cases, natural hedges against a downturn.
Take for example the food and beverage market
sectors – they account for 45% of turnover
but are more resilient during a downturn in
the economy.
The Australian automotive manufacturers are
another great example. Australia will export
100,000 plus vehicles next year and Toll has
an involvement in most stages of the process
in parts (OE*), vehicle transport, the after market,
importing and exporting, stevedoring and the predelivery – so a certain amount of insulation is now
built into Toll’s larger contracts and subsequently
our business model.
In tougher times two things happen in logistics:
consolidation activity tends to increase, and
customers look to outsourcing to become more
efficient. Toll’s opportunities in both are strong
giving this company opportunities to ride out
tougher economic conditions.
What are the key elements
of the Group’s future growth?
Top of the list is the opportunity to create true
‘partnershipping’ arrangements with our customers
– avenues for growth holding enormous
opportunities.
Customers are truly understanding the value of a
fully integrated logistics partner. The advantages
of scale, of infrastructure, of technology, of solving
their logistics problems, quickly and efficiently.
As our relationships deepen and we manage more
of our customers’ logistics business, the gain for
Toll is more consistent strong growth.
The increase in outsourcing as Australian
businesses follow the global trend is a close
second. Customers know that outsourcing non-core
activities is sound business practice and while
it is good for our customers, it is very good for Toll.
Outsourcing is a growing source of revenue.
We are very proud of our infrastructure and
its continued development and expansion.
The contribution infrastructure makes to growth
is a hard one to quantify, but it is integral in the
offer we take to market. It is a core part of the
company’s growth strategy.
REVENUE
1,603
1,296
1,360
’99
’00
$m
854
470
’97
*OE – original equipment
8
TOLL HOLDINGS LIMITED
’98
’01
Revenue has more than tripled since 1997 mainly due to
major acquisitions, new contracts and organic growth
A key contributor of past growth has been the
opportunities provided by acquisition and industry
consolidation. For the foreseeable future this
will not change. Toll will aggressively pursue
acquisitions when and where assets strategically
fit with the company. But Toll’s size now affords
us additional benefits not necessarily offered
to smaller players. Customers want strategic
alliances with Toll, so either way Toll benefits.
And lastly, the trust we engender – it is an
underestimated element of future growth. More
and more customers are trusting in Toll. Our
relationships are stronger, becoming more
productive than ever before. We are confident
of consistent, sustainable long-term growth.
Applying our financial management, resources
and minds to improve what we offer customers,
adding value to the company and our shareholders.
Toll’s market share is increasing, we are expanding
our range of services, with great growth
opportunities in Australia and in the future, the
markets of Asia. We are building a great company
– the leader in its category.
As a fellow shareholder we thank you all for
investing in Toll Holdings. You have given us
the opportunity to turn a strategy and focus in
integrated logistics, into a profitable reality.
The journey so far has been very rewarding,
but we feel, we’ve only just begun.
After years of hard work, we’ve got the most
capable logistics services organisation in this
region. And a tremendous platform for future
growth here in Australia and Asia.
How do you see the future?
Looking very good – we are confident and excited,
in fact we have never felt so energised. There
is a spirit, a real can-do attitude, where we enjoy
the competition and the prospect of rolling up
our sleeves to get the job done. Better than
anybody else.
DIVIDENDS PAID PER ORDINARY SHARE
33
Peter Rowsthorn
Chairman
Paul Little
Managing Director
SHAREHOLDERS’ EQUITY
¢
197.7
28
$m
158.6
22
126.4
109.9
12
’97
14
61.7
’98
’99
’00
’01
Dividends paid or declared per ordinary share
for each year continues to grow
’97
’98
’99
’00
’01
Shareholders’ equity has increased over the
years as the company’s expansion required
additional capital and generated improved profit
9
what does it mean to lead?
Staying focused on key competitive
To lead an industry means being better than the competition. Toll achieves this by being
advantages that count. It’s everywhere you look. And it’s in everything we do.
1. Approach – fully integrated 2. Philosophy – customers are
3. Modal choice – total
solutions
partners
transportation flexibility
By combining sea, rail, road and
air, Toll offers fully integrated,
intermodal solutions. For our
customers, it means they can be
assured of time and money
efficiencies across all elements
of the supply chain. That, in turn,
adds value to their bottom line.
Tolls’ capabilities are like no
other Australian competitor.
Being partners in business with
our customers demands a longterm dialogue and commitment.
To that end, Toll listens, advises
and acts. We have developed a
reputation for dynamic problemsolving and deliver quality
assurance. Strategic partnering
requires trust, communications
and a willingness to embrace
an ever-changing and evolving
marketplace.
From warehouse to ports. From
ships, trains, trucks or planes
that deliver any way, any how,
any time to meet our customers’
needs. This gives our customers
options, choices and flexibility in
terms of speed and cost. These
choices help our customers
leap both the seen and unseen
obstacles of urgency, bad
weather or industrial disputes.
Being able to achieve tailored
solutions is unparalleled in this
country, in this industry.
Market leadership indicators
ANNUAL
TURNOVER
MARKET
CAPITALISATION
$1.6
$1.2
Up
billion
18% from last year
Up
101% from last year
+ MILLION
+
13,000 15
registered vehicles
& equipment
Up
10
TOLL HOLDINGS LIMITED
124% from last year
billion
TONNES
freight turnover excluding Ports
Up
50% from last year
advantages
strong in the key competitive
4. Efficiency – technology
5. People – experienced
6. Network – comprehensive
and innovation
and dedicated
and nationwide
Toll’s edge? Knowing how to use
technology to get the best from it.
As our information systems greet
new challenges we bring our
staff, and customers, with us.
The marriage of e-business
and our core activities has only
just begun.
People are the most important
factor in every service company.
They are living assets. We
recognise their value, we know
they are an integral part of our
success. We are proud of our
balance of youth and
experience. Together, they bring
passion, energy and vision to
move the company forward.
Nurturing, training, educating
and encouraging staff is one of
the best investments a company
can make, and we do just that.
Toll’s nationwide infrastructure
is unsurpassed in Australia, yet
we continue to improve existing
holdings, we look to expanding
facilities and always have an eye
to the future. Opportunities are
assessed every day and include
both national and international
markets.
TOTAL TANGIBLE
ASSETS
NUMBER OF EMPLOYEES
8,984
+
$640m
Up
68% from last year
5,635
5,980
99
00
4,500
1,700
97
98
+
01
1,000,000 m 300
warehouse capacity
Up
138% from last year
leading
2
+
operations sites
Up
30% from last year
the market.
11
what does it mean to lead?
Concentrating on key market sectors:
food & retail
Alan Mitchell
General Manager
Talking about…Page 20
ports &
resources
Steven Ford
General Manager
Talking about…
Page 17 and 24
relocations
Helen Newell
General Manager
Talking about…Page 27
In an increasingly competitive world, customers
need to concentrate on their core business, not their
logistics. And when you get right down to it they
depend on two things: reliability and scalability.
We consider these two factors to be among the core
competencies that have made Toll so successful.
We’ve stayed 100 percent focused on our driving
vision of building the region’s most successful
provider of integrated total logistics to industries.
12
TOLL HOLDINGS LIMITED
Delivering fully integrated time critical solutions.
Leveraging the advantage of scale that is now
Toll – maximising the size and scope of the entire
organisation to deliver premium services to the
Group’s specialised market sectors.
In short, keeping our customers competitive, keeps
us competitive.
And in the process Toll has earned the recognition as
the region’s leading fully integrated logistics provider.
industrial, resources, beverage, food & retail, automotive,
ports, and relocations.
beverage
Ken Noye
General Manager
Talking about…
Page 19
automotive
industrial
Wayne Hunt
Garry Harding
General Manager
Talking about…
Page 23
General Manager
Talking about…Page 14
13
what does it mean to lead?
Leading comes down to a matter of trust. Our
customers trust Toll, they invite us to be their
business partners, to be ‘supply-chain managers’
for their business.
Trust and simple economics of a single
logistics manager are definitely strong factors
that contribute to increasing market share in the
Industrial sector. In the last 12 months there
has been a significant shift in understanding
and acceptance of the benefits of ‘total supply
chain management’.
This means strong organic growth, despite
flat economic conditions, as our customers continue
to outsource ‘non-core’ activities and select Toll
as the supply chain manager of choice.
Innovative solutions for our customers.
For Amcor and Pilkington we helped design and
produce ‘purpose specific’ equipment to handle
and transport their goods safely and efficiently.
392
340
00
Through quality and depth of management,
success in achieving targets whether they are
financial, growth or service, meeting key
performance indicators to build strong customer
relationships, Toll is leading. If you can win new
business, that’s good. Growing new business from
existing customers is better. That’s the sign of trust.
And of leadership.
369
REVENUE
($ millions)
99
We solved a large mining company’s concerns by
developing an automated stretch wrapping process.
So, you can see that we concentrate on our
customers’ needs and their customers’ needs
in delivering the total supply chain management.
THERE IS AN INCREASED
WILLINGNESS OF KEY
CUSTOMERS TO ENTER
LONG TERM CONTRACTS
01
Significant new long term contracts have been secured or
renewed with major customers such as Amcor, Pilkington
and Comalco for terms of between 3 to 5 years
industrial
14
TOLL HOLDINGS LIMITED
Garry Harding
General Manager
A N N U A L I S E D P E R C E N TA G E
OF GROUP’S REVENUE
21%
LEADING THE INDUSTRY
GROWTH INDICATORS
• Use of route models, warehouse management and load
management systems ensures we deliver efficient logistic
solutions to customers such as Pilkington and Shell
• Being connected. Toll is a registered system user on Amcor’s
network with access to their production and inventory
systems. This way, we can manage, forecast and deliver a
quality logistics service
• Most large Australian companies
ensure Toll is now on their tender
invitation list. We are now known as
a quality value add provider of service
• All key customer contracts due for
renewal over the past twelve months
were successfully extended
15
what does it mean to lead?
Steven Ford
General Manager
A N N U A L I S E D P E R C E N TA G E
OF GROUP’S REVENUE
13%
*
*Ports and resources combined
16
TOLL HOLDINGS LIMITED
LEADING THE INDUSTRY
GROWTH INDICATORS
• Substantial growth in project freight operations
• Quality accreditation of Resource sector operations
throughout Australia nears completion
• Increased tender activity in Darwin
and Timor gasfields
• Renewed interest in gas pipeline and
on-shore processing facilities in Darwin
Specialisation. I believe successful companies,
successful teams and every successful project runs
better if managed by specialists. And in the resources
sector Toll is a recognised specialist.
And this is just what is required in this demanding
sector. As a specialist in the Oil & Gas industry,
Toll has consistently expanded its market share
in a very competitive environment. We are currently
serving the Bass Strait oil and gas fields and provide
supply chain services to assist oil exploration in
developing fields.
This is reflected in our strong loyal customer base
such as multi-nationals Chevron, Apache Oil and
Esso. Toll is a leading freight carrier in both
Northern Territory and North Queensland, and
we hope to leverage our strong relationships
to expand our resources business throughout
the region.
Orders and pick ups have significantly increased
in WA during the past year. We have gained the
largest share of the logistics management for new
projects being developed. Leading in the most
important areas: depth of people skills and breadth
of services which include air, road, rail,
warehousing, emergency response and barging.
Foreign markets are growth opportunities and
are becoming a bigger part of everyday resource
sector management. Exciting new discoveries, such
as the oil fields in the Timor Sea, hold considerable
promise for Toll in the next 12 months.
Toll continues to actively pursue growth in this
sector. It is an exciting time for the resource sector
with many opportunities for a specialist provider.
190
177
192
PROJECT VOLUMES
INCREASED BY CLOSE TO
40%
DURING
THE YEAR
REVENUE*
($ millions)
99
00
01
* Resources & Ports combined
resources
17
what does it mean to lead?
Ken Noye
General Manager
A N N U A L I S E D P E R C E N TA G E
OF GROUP’S REVENUE
11%
18
TOLL HOLDINGS LIMITED
LEADING THE INDUSTRY
GROWTH INDICATORS
• Working with customers such as Coca-Cola, Tooheys and
CUB, we have the expertise to design and deliver specialised
delivery vehicles
• Use of vehicle routing and scheduling systems maximises
efficiency for retail deliveries
• Wine industry growth. Signed a
5 year distribution and warehousing
agreement with the Australian Wine
Exchange
• 100% contract renewal success with
all key customers
Leaders think – make that know – that they can make
a difference. It’s an absolute attitude to service,
to business performance and technology utilisation.
It’s what sets Toll apart.
And it showed in a record year for this sector.
Awarded more of the logistic services for key
customers like CUB, Tooheys, and Coca Cola Amatil
through the time-critical Olympics Toll continued to
improve service and business performance levels.
A special recognition of Toll’s outstanding service
was awarded by Coke’s National Sales Director.
Continued consolidation of the beverage routes
and warehousing and organic growth from the
route distribution market offers significant growth
opportunities in the near future. Existing routes
offer the chance to deliver more products and
services, like foodstuffs. More often.
177
The wine industry is an example of a key
growth market. We are seeing Toll manage
more, from local, to national and international
warehousing, import and export opportunities
– adding value from the production floor to
warehousing, managing the whole process.
Development of new proprietary technology
allows us to better manage our vehicles and
improve asset utilisation. We now leverage the
company’s size and scope to help achieve improved
service and satisfaction for our customers.
Constantly improving service levels, smarter
technology utilisation at better cost levels put
Toll in the leadership position.
192
154
REVENUE
($ millions)
99
00
01
MAJOR CONTRACTS RENEWED DURING
THE PAST 12 MONTHS INCLUDED COCA-COLA
AMATIL IN WESTERN AUSTRALIA AND CUB
IN SOUTH AUSTRALIA
beverage
19
what does it mean to lead?
It’s about the advantage of scale. As the largest, most
capable logistics services organisation in Australia
it’s what we can offer that no one else can. And about
implementing best practice in everything we do.
Always looking to the future in this fiercely
contested market, Toll has improved its infrastructure
with technological improvements in warehousing,
load optimisation, and ‘track and trace’ capabilities.
They all add up to providing tremendous competitive
and cost-saving advantages for our customers.
The successful integration of Finemores under
the Toll umbrella has been well-received by both
staff and customers. It has also brought new
clients into the fold. They include Bonlac, and
additional business from Goodman Fielder,
David Jones and Woolworths.
Maximising control and minimising costs for our
customers is critical to our success. For example:
we developed a new inventory reduction program
in partnership with Unilever which achieved
considerable savings for both parties. In an
endeavour to save on fuel costs, new gas-powered
trucks are being trialed right now with Woolworths.
Growth is expected on a number of fronts.
The retail sector of the market is forecast to expand
approximately 10% pa. New acquisitions, such as
Finemores, bring growth opportunities. We aim
to leverage our unique market intelligence and
outstanding service and systems to new markets
in Asia.
It’s having the scale to deliver better total logistics
management – being at the right place at the
right time.
531
TOLL WILL MAKE A
SIGNIFICANT INVESTMENT OF
$10
577
464
REVENUE
($ millions)
million+
IN NEW EQUIPMENT
AND IT SYSTEMS
99
00
01
New distribution contracts with Woolworths in WA and NSW will see over
20 new delivery vehicles introduced into the distribution of dry products
food & retail
20
TOLL HOLDINGS LIMITED
Alan Mitchell
General Manager
A N N U A L I S E D P E R C E N TA G E
OF GROUP’S REVENUE
LEADING THE INDUSTRY
GROWTH INDICATORS
35%
• Only the best will do when warehouse management systems
are needed. Our IT support group search the world selecting
systems that best suit our customers’ needs
• Innovative distribution solutions have lead to demand for
centralised consolidation and delivery centres more than
doubling
• 40,000m2 of warehousing integrated
this year for clients including Bonlac,
Goodman Fielder and David Jones
• 100% renewal success with existing
key contracts
21
what does it mean to lead?
Wayne Hunt
General Manager
a
A N N U A L I S E D P E R C E N TA G E
OF GROUP’S REVENUE
13%
22
TOLL HOLDINGS LIMITED
LEADING THE INDUSTRY
GROWTH INDICATORS
• Use of dynamic scheduling and onboard computer terminals, • Full supply chain service capability
increases efficiency and reduces customer inventory levels
from wharf or supplier to manufacturer
• During the year we introduced automotive stevedoring in
and to dealer showrooms = growth
Melbourne’s Webb Dock, car carrying and pre-delivery services • Servicing the best in domestic and
imported vehicle manufacturers
Leaders work with other leaders. Linking our
strategies to leading-edge customers, Toll continues
to grow with auto industry suppliers. Across the
complete supply chain.
It’s been a very exciting year for the automotive
sector of Toll. The acquisition and integration of
Finemores this year gives Toll specialised vehicle
transport capabilities. Combine this with the Strang
acquisition, it allows Toll to provide ‘from wharfto-end customer’ logistics solutions. It increases
our presence in the Melbourne market. Add ports
and wharves to road, rail and sea, Toll offers the
complete package, total supply chain management.
The simplicity of a single supplier gives our
customers competitive advantages of increased
efficiencies, flexibility and on-time delivery and
performance. With an automated dynamic routing
and dispatcher system which was expanded
recently we are able to move more in shorter time
frames – giving our customers even greater
confidence. Yet we are constantly researching ‘best
practice’ trends the world over and implementing only
the ‘best of the best’. The sheer size of Toll allows for
significant investment in this endeavour.
We’re very proud of our awards this year.
Ford and Mitsubishi have awarded Toll their
Supplier Excellence Awards for jobs well done.
And we have been well in front servicing this
sector for the past four or five years.
Achievement like this happens when leaders
work with other leaders. It’s that simple.
Laurie Brothers
160
General Manager
90
108
REVENUE
($ millions)
99
Over
00
01
Supplier Excellence Awards 2000.
Mitsubishi and Ford recognise Toll’s
commitment to the automotive industry
90% of contracts have been renewed over the past two years
utomotive
23
what does it mean to lead?
You must deliver consistently. To do so you start with focused
people, build a superior infrastructure-delivery capability, with
state-of-the-art systems and service. How does Toll measure
up? By hitting its targets and goals. Every time.
An integral component to the supply chain,
especially for bulk, is ports. It means coordinating
the wharf operator, stevedore, transport company,
storage company and the customer. It’s concentrating
on the entire supply line and supply chain process.
We are not just landlords, we develop facilities, the
infrastructure, provide equipment and we also supply
the people. And the recent acquisition of the Strang
stevedoring business brings new vigour and
potential to ports.
Toll is very strong in bulk product handling,
particularly in fertilisers out of its facility in
Geelong. It is one of the best in the country, in terms
of flexibility, productivity and storage capacity. We
are fast becoming the key player of ports in regional
Australia. Of special note is the new woodchip
facility in the Port of Albany which is nearing
completion.
Customers see the advantages of Toll and our
total logistics capabilities. This is evidenced by
the ports business growing by a factor of 12 in just
under 8 years...with potential to grow significantly
larger than it is today.
From here we want to develop stronger links with
regional areas, acquire more stevedoring operations
and develop port services to service the minerals,
oil, gas and automotive sectors.
To compete consistently you must execute
consistently. It’s how leaders deliver.
190
177
192
INVESTED OVER
$30
REVENUE*
($ millions)
million
IN FACILITIES AND
ACQUISITIONS
99
00
01
* Ports & Resources combined
$12 million
Port of Albany –
woodchip export facility which will
predominantly handle bluegum plantation woodchip
ports
24
TOLL HOLDINGS LIMITED
Steven Ford
General Manager
A N N U A L I S E D P E R C E N TA G E
OF GROUP’S REVENUE
13%
*
*Ports and resources combined
LEADING THE INDUSTRY
GROWTH INDICATORS
• Integration of port facilities and services to customers needs
• Recognised leader in specialised port facilities management
and design expertise
• The leader in interfacing bulk and general port and land
transport services
• Breadth of services expanded to include stevedoring
• Significant increase in volume
through ports
• Doubled Newcastle port storage
facilities to 30,000m2
• Number of port operations doubled
in 2001
25
what does it mean to lead?
Helen Newell
General Manager
r
A N N U A L I S E D P E R C E N TA G E
OF GROUP’S REVENUE
7%
LEADING THE INDUSTRY
GROWTH INDICATORS
• Largest purchaser of removalist services in Australia
• The largest service capability to corporate, public and
private sectors
• Continued expansion and upgrading of services
• Over 28,000 domestic and
international relocations per annum
• Launch of 1st and leading relocations
web portal
• 10 offices nationally. 106 offices
worldwide through RRI* affiliation
*Relocation Resources International
26
TOLL HOLDINGS LIMITED
Leaders bring in new ideas, with new people and new
partners with new ideas. There is always a need to
refresh the organisation, to question old practices,
so you can be more effective.
It’s one thing to transport freight, quite another
to help people move home. It takes a personal
touch, understanding, keeping costs to a minimum
and delivering on time.
What was previously three distinct relocations
businesses: Removals Australia, International
Corporate Relocations and movinghome.com.au
is now Toll Transitions.
Applying new thinking to an old problem.
For example: the Internet side of the business
(movinghome.com.au) is the only successfully
operating company on the web in this sector.
Complemented by Toll’s buying power and
logistics expertise it totally overshadows other
removalists or relocators.
Areas of growth are provided by the strong
existing contracts and relationships with existing
suppliers but also Toll’s existing customers.
We believe they will want to take advantage
of a new, personal and individual service. We’re
looking to expand into the Asian market with our
goal to rapidly grow the Asian revenue base
in this sector.
By introducing new thinking, adopting new
methods, in a way we are creating the market.
We are unquestionably a leader. With
enormous potential.
113
REVENUE
($ millions)
27
99
00
01
10
Over
new significant corporate clients won including
ANZ and Westpac
$100
Over
million per annum spent on purchasing
removalist services in Australia
elocations
27
what does it mean to lead?
Technology is fundamentally changing every business.
And Toll is no exception. But it is what we do with
technology, how we apply it, so customers can quickly
and easily do business with Toll, that makes us different.
Value in a technological environment occurs
when everything is linked. The benefit: customers
view Toll as one company. And Toll designed
technology is helping achieve that goal.
Our competitive advantage rests in three things:
1. Technology innovation. The ability to design
our own solutions is of paramount importance.
That’s why technologies is really two distinct areas:
– a business development centre, focused on
developing innovative logistics and supply
chain solutions; and
– our IT group, in charge of technology
implementation and management.
2. Customer integration. At our core is one of the
most advanced freight transport management
systems in the industry, TollWorks. Continually being
expanded TollWorks allows for application-toapplication, business-to-business integration,
planning and optimisation tools, and mobile data
technology. It’s a productivity tool and workflow
manager rolled into one. The benefit for Toll, and
our customers, is a smarter, collective working
environment.
3. It’s about greater utilisation, handling more
for more customers, across more business divisions.
It’s about being the backbone of the largest single
supply-chain manager in the region.
What counts. Delivery. Performance. Results.
It’s how we do it that makes Toll different. And the
technological leader in this industry.
OVER THE NEXT THREE YEARS
TOLL WILL INVEST
$60
million
TO FURTHER DEVELOP
TECHNOLOGY CAPABILITIES
Increased number of users of Web based facilities from 750 in June 2000
to
2,300 in June 2001
All acquisitions now integrated into 180 Wide Area Network locations
technolo
28
TOLL HOLDINGS LIMITED
Martin Dunne
General Manager
Information Technology
gy
LEADING THE INDUSTRY
GROWTH INDICATORS
• Development of TollWorks – one of the most advanced
freight transport management systems in the country
• Developing advanced customer integration solutions
• Developing open systems to increase visibility across supply
chain for customers and Toll alike
• Take up of customer generated
consignment notes using Toll
Connect grew 42% in 2001
• B2B Integration requests quadrupled
in 2001
29
SENIOR OPERATIONAL MANAGEMENT
John Ludeke
Terry Mallon
Mark Rowsthorn
Don Telford
Stephen Stanley
Divisional Director
Long Distance
Divisional Director
Toll North
Divisional Director
Logistics
Director Development
Joined industry in 1988
Joined industry in 1975
Transferred to Toll with
Interlink in October 1995
Joined industry in 1980
Transferred to Toll with
Carpentaria Transport in
December 1997
Executive Director
Operations & CEO Toll
Technologies
Joined industry in 1977
Joined Toll in 1987
Joined industry in 1968
Joined Toll in April 1999
Transferred to Toll with TNT
Logistics in December 1997
Michael Fox
Rod Walters
Graham Lyon
Robert Jeremy
General Manager
Property
General Manager HR
Toll Group
Director Operations
Toll Technologies
Commercial Director
Toll Group
Joined property
industry in 1986
Joined Toll in 1997
Joined industry in 1994
Transferred to Toll with
Interlink in October 1995
Joined industry in 1971
Joined Toll in June 1994
Joined industry in 1995
Joined Toll in April 1998
30
TOLL HOLDINGS LIMITED
TOLL SERVICE DIVISIONS
The following divisional structure incorporates
the businesses which provide integrated services
to our key market sectors
LOGISTICS
• Revenue $438m
• % of Group Revenue* 27%
• Employees and
Sub contractors 3,200
LONG DISTANCE
• Revenue $713m
• % of Group Revenue* 45%
• Employees and
Sub contractors 4,300
Toll Logistics autonomous,
industry-focused business units
within a large capable infrastructure
providing customer-specific logistics
solutions, including design and
development of purpose-built
facilities and equipment
Toll Express Less-than-full load
express and general transport-related
services throughout Australia,
with a focus on unitised/palletised
consignments greater than
100 kilograms
services between mainland Australia
and Tasmania
Toll SPD Multimodal transportation
of full container truck loads
between all capital cities and larger
regional locations
TOLL NORTH
• Revenue $337m
• % of Group Revenue* 21%
• Employees and
Sub contractors 1,400
TOLL TECHNOLOGIES
• Revenue $115m
• % of Group Revenue* 7%
• Employees and
Sub contractors 84
Edwards Transport Temperaturecontrolled distribution specialist
operating primarily along the eastern
seaboard and Tasmania
Toll Refrigerated Provider of cold
chain transport and logistics services
to selected markets
Toll Rail Dedicated train line haul
operations across Australia
Toll International Full door-to-door
export services around the globe
by sea or air
Toll IPEC Time-sensitive parcel and
priority satchel express services for
lightweight freight consignments
Toll Finemores Transport Regional
Country NSW less-than-full load
general transport service
Toll Tasmania Bass Strait freight
forwarder providing distribution
Toll Fleet Management Workshop and
fleet maintenance provider to the group
NQX Time-sensitive and time-certain
multimodal services to, from and
within Queensland and the
Northern Territory
W&M Meat Transport Distribution
of meat, fruit and vegetables across
Queensland and Northern NSW
QRX Northbound and southbound
distribution of refrigerated food
products by road and rail
R&H Transport Bulk handling
transport services and specialised
services to mining sectors in NSW
and Queensland
Carpentaria International resource
and mining sector project logistics
and supply chain management for
international and domestic clients
Freshmark Northbound and
southbound distribution of general
freight and refrigerated products
by road and rail
Toll Transitions A specialist
relocation service providing seamless
management of relocation of
households, workplaces and people
Toll Transitions includes
Removals Australia, International
Corporate Relocations and
movinghome.com.au
Australian Wine Exchange (AWX)
– 21% investment. Creating a new
capital and investment market for
trading premium wine securities
through alliances with providers
of integrated trading, registry,
technology and fulfilment
infrastructure
* % of 2001 Group Revenue
31
BOARD OF DIRECTORS
The Board warmly welcomes Ross Dunning as a Non-Executive
Director of Toll Holdings.
Ross brings a wealth of experience in logistics and infrastructure
related industries.
Peter Rowsthorn
Non-Executive Chairman (71)
FAICD, FCIT, FAIM
31 years in the Transport
Industry. Chairman for 15 years.
John
Bill
Mark
John Moule AM
Mark Rowsthorn
William (Bill) Farrands
Non-Executive Director (62)
FCA, FAICD
Executive Director Operations and
CEO Toll Technologies (46)
BEc, Grad Dip. Bus.
Non-Executive Director (68)
B.Com.
Appointed to the Board November 1995
24 years in the Transport Industry.
Executive Director Operations for 14 years
32
TOLL HOLDINGS LIMITED
Appointed to the Board in March 1997
Paul Little
Managing Director (53)
FAICD, FCIT
33 years in the Transport
Industry. Managing Director
for 15 years
Ross
Ron
Neil
Ronald (Ron) Paul AM
Neil Chatfield
Ross Dunning
Non-Executive Director (69)
D.Univ
Chief Financial Officer (47)
FCPA
Non-Executive Director (59)
B.E. (Hon) B.Com.
Appointed to the Board in July 1998
Joined Toll in December 1997.
Appointed to the Board in July 1998.
27 years experience in the Transport
and Resource industries
Appointed to the Board in July 2001
33
CORPORATE GOVERNANCE
Keeping a leading reputation requires the discipline and
courage to consider the ‘big picture’ and the consequences
of our decisions and actions as a corporate citizen.
Corporate governance is not restricted to how we manage
the Board and its Committees. It has a broad scope that
encompasses all stakeholders who have an interest in the
success of Toll Holdings. Our responsibility extends to
shareholders, customers, suppliers, employees, unions,
government and consumers. It is by our commitment to
ethics, quality, occupational health and safety and the
environment that we set goals and measure our success.
Think global and act local embodies our environment
obligation. We want employees to go beyond minimum
legal standards and do everything they can to protect the
environment. We encourage the use of recyclables and the
conservation of energy resources like electricity, fuel and gas.
At Company warehouses, offices and yards, laws relating
to the storage and transport of dangerous goods, workshop
run-off and underground fuel storage safety are strictly
followed. Heavy vehicles have an effect on the environment
and we support the use of rail linehaul and coastal shipping
services wherever practical and affordable.
To help reduce vehicle pollution, Company vehicles and
those of our contractors are kept within legislative limits
through regular maintenance. Part of being a caring
corporate citizen is recognising that we do not own the
environment but are merely trustees for our children. For this
reason, we continually consider ways to reduce the impact
of transportation on the environment.
Whilst the Board is ultimately responsible for strategy,
resource allocation and planning, the following Board
Committees assist in managing these responsibilities:
Corporate Governance Committee
Audit and Financial Risk Committee
Remuneration and Succession Planning Committee
See page 39 for committee composition and frequency
of meetings.
Each committee is chaired by a non-executive director and
comprises a majority of non-executive directors.
Corporate Governance Committee
The Corporate Governance Committee is responsible
for establishing and monitoring the ethical standards
of the Toll group.
The Committee periodically reviews the Corporate Code
of Practice, as well as procedures to promote compliance.
Ethics are about being fair, respecting all things
and behaving in a way that you can be proud of.
34
TOLL HOLDINGS LIMITED
All our staff are expected to act with the utmost integrity
and objectivity, striving to enhance the reputation and
performance of the Group. Every employee, including
executives, has a nominated supervisor to whom they may
refer code of practice issues.
Our Code of Practice is outlined in a user-friendly booklet
which has been issued to all staff. The objective of the code
is to give staff a clear understanding of their rights and
responsibilities and where Toll as an organisation stands.
Key business issues explained in the code include the
environment, occupational health and safety, conflicts of
interest and equal opportunity. It also covers insider trading,
pirated software, expenses and use of Company property. The
booklet is a written expression of what we believe Toll is in
practice – an honest, trustworthy and dependable company.
The Committee also approves and reviews policies on
sensitive issues or practices such as Environmental, Equal
Opportunity and Conflicts of Interest.
It makes recommendations regarding Board structure and
operating guidelines and also selection criteria for new or
additional directors.
Audit and Financial Risk Committee
The Audit and Financial Risk Committee considers matters
relating to the financial affairs of the Group. The committee
monitors compliance with the Corporations Law and Stock
Exchange Listing Rules, matters outstanding with auditors,
Australian Taxation Office, Australian Securities and
Investments Commission, Australian Stock Exchange and
financial institutions, corporate risk assessment and
the internal controls instituted as directed by the Board
of Directors.
It also reviews:
• accounting policies and recommends changes where
appropriate
• effectiveness of internal audit and cross divisional reviews
• monitors risks relating to Business Continuity, Disaster
Recovery, Reputation, Currency and Interest Rate exposures
• the performance and compensation of the external
auditors, the annual audit plan, and information derived
from the audit
• adequacy of insurance coverage
• interim financial information and compliance with certain
government regulations.
The Board is responsible for an internal control framework,
designed to identify errors and irregularities.
• compliance with statutory responsibilities relating to
remuneration disclosure
The framework is as follows:
• establishment and monitoring executive succession
planning.
Financial reporting
– comprehensive budgeting, monthly reporting and
half-yearly reports to shareholders.
– compliance with continuous disclosure requirements
of the Corporations Law and the Stock Exchange.
Quality and integrity of personnel
– our quality management system requires the involvement
and total commitment of management, employees and
subcontractors to ensure continuous improvement.
– policies are in place in respect to Occupational Health
and Safety, Equal Opportunity, Affirmative Action and
Management Performance Review and Development.
Operating Unit controls
– financial controls and procedures including information
systems controls are in place and are updated regularly.
Risk Management
Our Risk Management Committee manages our integrated
framework of control which monitors risk exposure and
develops standardised key reporting indicators pertaining to,
environmental, occupational health and safety and incident
reporting and management. It seeks to identify the key
business and financial risks which would prevent the group
from achieving its objectives, and it ensures that appropriate
controls are in place to effectively manage these risks. This
committee which is chaired by Mark Rowsthorn, Executive
Director Operations, comprises all Divisional Directors, the
Chief Financial Officer, the Company Secretary and a number
of senior management members.
The committee responsibilities are to:
• develop the Risk Management Charter
Investment appraisal
– capital expenditure guidelines clearly define annual
budgets, detailed appraisal and review procedures and
appropriate levels of authority.
• monitor the management of previously
identified risks
Remuneration and Succession Planning Committee
• introduce regular reporting by the risk management group
to the Board
The Remuneration and Succession Planning Committee,
reviews and makes recommendations to the Board on
remuneration packages and policies applicable to all staff.
An objective of the committee, is to attract, develop and
retain appropriately qualified and experienced directors,
senior executives and staff.
The duties of the committee are to review and recommend
or approve with regard to:
• the Board, the Managing Director and Executive Directors
remuneration, allowances and incentives
• the Board and Non-Executive directors fees
• senior executive remuneration, allowances and incentives
• policies relating to employee share and option plans and
fringe benefits
• identify new risks and implement appropriate actions
to manage them
At the end of another pleasing year of solid performance, it is
evident that a clear focus, on all aspects of how we manage
the company, is crucial. Setting standards for company
behaviour, and accepting responsibility for our obligations to
stakeholders, is a large component of our success. To be the
best possible corporate citizen we also need to respect the
decisions of the past and apply lessons learned to promote
strategic growth for the future.
Bernard McInerney
Company Secretary (43)
Joined Industry in 1984
Joined Toll in 1994
• Company‘s superannuation plan and compliance with
relevant laws and regulations
• Board, senior executive retirement and termination
payments
• adequacy of professional indemnity and directors and
officers‘ liability insurance
35
REPORT BY DIRECTORS
The directors present their report together with the financial
report of Toll Holdings Limited (‘the Company’) and the
consolidated financial report of the consolidated entity, being
the Company and its controlled entities (‘the Group’), for the
year ended 30 June 2001 and the auditors’ report thereon.
Directors
The following persons held office as directors of Toll Holdings
Limited during or since the financial year:
The consolidated profit for the year attributable to the members
of Toll Holdings Limited was:
2001
$’000
2000
$’000
Operating profit after income tax attributable
to members of Toll Holdings Limited
49,238
40,404
Director
Earnings per share
Mr Peter Rowsthorn (Chairman)
Mr Paul Little (Managing Director)
Mr Mark Rowsthorn
Mr John Moule AM
Mr Bill Farrands
Mr Ron Paul AM
Mr Neil Chatfield
Mr Ross Dunning
Principal Activities
The principal activities of the consolidated entity during the year
consisted of:
• National less than full load express and economy freight
forwarding service using all modes of transport;
• National full load road, rail freight and sea forwarding service
including transcontinental rail linehaul operation;
• National temperature controlled transport service for full load
and less than full load clients;
• Warehousing and distribution of bulk dry and refrigerated
goods in all capital cities;
• National wharf cartage, container handling and storage;
• National contract distribution services;
• National time sensitive parcel freight distribution services;
• Specialised international forwarding services;
• Ports management and stevedoring services;
• National removals and relocation brokerage service;
• Vehicle transport and distribution; and
• Bulk liquid transportation.
The following significant changes in the nature of the activities
of the consolidated entity occurred during the year:
The Group acquired the business of AR Neal on 19 January 2001,
100% of the shares in Finemore Holdings Limited on 2 March
2001 and part of the Strang Stevedoring Group of companies
on 5 April 2001.
There were no other significant changes in the nature of the
activities of the consolidated entity during the year.
36
Consolidated Result
TOLL HOLDINGS LIMITED
2001
2000
Basic earnings per share
80.49¢
67.67¢
Diluted earnings per share
77.79¢
66.28¢
Review of Operations
Results for the year were another record for the company with
EBIT for the full year growing by over 38% to $70.6 million, on
operating revenues which increased 18% to $1.603 billion.
EBIT margin increased 17.6% to 4.41%, which continued the
strong margin expansion experienced over the past four years.
Excluding the results of the Finemore acquisition since March
2001, the EBIT margin improved by over 23% to 4.64%. Margin
improvement was achieved by all divisions.
Earnings continued to be driven by greater asset efficiencies
and investment in new infrastructure, together with sound cost
control and efficiencies brought on by technology developments.
Recent acquisitions including Finemores, although slightly
earnings per share positive and in line with plan, did not have a
material impact on earnings for the year.
Profit after tax of $49.2 million for the year was another record
for the company, increasing 25% over the previous corresponding
period of $39.3 million (before an abnormal income tax gain of
$1.06 million).
The Long Distance division performed well for the year with EBIT
margins growing strongly across all operations. The increase in
revenue came largely from Toll Express and Toll IPEC, whilst
planned lower revenues resulted from Refrigerated Roadways.
Toll Express and Toll IPEC performed exceptionally well during
the year, building on their sound market position and producing
strong EBIT and margin growth.
All other Long Distance businesses, including Toll SPD and Toll
Tasmania recorded higher EBIT compared to the previous year.
Refrigerated Roadways continued its improvement with
performance well ahead of the previous corresponding period.
The Toll North division traded strongly in the year with EBIT
growth being generated through new depots developed during
the year and sound cost control programs.
Both NQX and QRX performed above plan and benefited from
reduced cost structures, whilst flat conditions in both the mining
and buildings sectors, particularly in the first half of the year,
restricted revenue growth.
Toll Logistics division continued to improve earnings margins
due to cost reductions, technology improvements and greater
operational efficiencies. EBIT growth was particularly strong in
the Ports, Food and Retail and Automotive sectors.
Toll Technologies increased its revenue from $29 million in
2000 to $109 million for the year due to the full year impact
of Removals Australia, which was acquired in February 2000.
Since the end of the financial year Removals Australia,
movinghome.com.au and the International Corporate Relocations
businesses have been integrated into Toll Transitions, forming a
total relocation management service organisation.
• In respect of the current year:
2001
$’000
2000
$’000
Ordinary Shares
The operations of the Group in Australia are subject to various
environmental regulations under both Commonwealth and State
legislation.
In making this report, the directors note that the Group’s
operations frequently involve the use or development of land,
the transport of goods and the storage, transport and disposal
of waste. Some of these activities require a licence, consent or
approval from Commonwealth or State regulatory bodies. This
regulation of the Group’s activities is typically of a general
nature, applying to all persons carrying out such activities, and
does not in the directors’ view comprise particular and significant
environmental regulation.
The directors believe the environmental performance of the
Group is sound and that the Group has appropriate systems
in place for the management of its ongoing corporate
environmental responsibilities.
Events Subsequent to Balance Date
9,191
7,820
The final dividend declared by the directors
of the Company in respect of the year ended
30 June 2001 is an ordinary dividend of
18 cents per share franked to 70% with
Class C (30%) franking credits (2000:
15 cents 50% franked Class C (34%))
11,050
9,078
The total dividends provided for or paid
in respect of the year ended 30 June 2001
Environmental Regulation
Based upon enquiries within the Group, the directors are
not aware of any breaches of particular and significant
environmental regulation affecting the Group’s operations.
Dividends – Toll Holdings Limited
An interim ordinary dividend of 15 cents per
share franked to 60% with Class C (34%)
franking credits was paid on
30 March 2001 (2000: 13 cents 20%
franked Class C (36%))
(c) The issue of 6,753,588 unsecured, subordinated convertible
notes @ $17 each in May 2001.
20,241 16,898
Significant Changes in the State of Affairs
Significant changes in the state of affairs of the consolidated
entity during the financial year were:
(a) An increase in paid up capital of $9.9 million to $108.6 million
which included the following:
On 5 September 2001, the Company announced it would form a
consortium with Lang Corporation to bid for the sale of National
Rail Corporation and FreightCorp. Other than the above item,
there has not arisen in the interval between the end of the
financial year and the date of this report any item, transaction
or event of a material and unusual nature likely, in the opinion
of the directors of the Company, to affect significantly the
operations of the consolidated entity, the results of those
operations, or the state of affairs of the consolidated entity,
in future financial years.
Likely Developments and Expected Results
of Operations
Information as to likely developments in the operations of the
consolidated entity and the expected results of those operations
in future financial years has not been included in this report
because, the directors believe on reasonable grounds, that
to include such information would be likely to result in
unreasonable prejudice to the consolidated entity.
• Issue of 865,108 fully paid ordinary shares in accordance
with the Dividend Reinvestment Plan;
(b) An increase in assets and liabilities due to the acquisitions of
the AR Neal business on 19 January 2001, Finemore Holdings
Group on 2 March 2001 and the Strang Stevedoring Group on
5 April 2001.
37
R E P O R T B Y D I R E CT O R S continued
Information on Directors
The directors of the Company in office at the date of this report are listed below:
Director
Experience and Qualifications
Age
Special Responsibilities
Mr P Rowsthorn
FAICD, FCIT, FAIM
Chairman
Non-Executive Director
31 years in the Transport Industry
Chairman for 15 years
Director since 1986
71
Chairman of Board of Directors
Chairman of Remuneration
and Succession Planning Committee.
Member of Corporate Governance
& Audit and Financial Risk Committees
Mr P A Little
FAICD, FCIT
Managing Director
33 years in the Transport Industry
Managing Director for 15 years
Director since 1986
53
Member of the Corporate Governance
Committee
Mr M Rowsthorn
B.Ec, Grad Dip. Bus.
Executive Director Operations
24 years in the Transport Industry
Executive Director Operations for 14 years
Director since 1988
46
Chairman of Risk Management Committee
Mr J A Moule AM
FCA, FAICD
Non-Executive Director
Chairman Austrim Nylex Limited,
Gribbles Group Limited,
Former Managing Partner
Deloitte Touche Tohmatsu
Director since 1995
62
Chairman of Audit and Financial Risk
Committee, Member of Corporate
Governance and Remuneration and
Succession Planning Committees
Mr W Farrands
B. Com
Non-Executive Director
Former Group General Manager
of the Building & Industrial Products
Division and for the Coated Products
Division within BHP Steel
Director since 1997
68
Chairman of Corporate Governance
Committee, Member of Audit
and Financial Risk and Remuneration
and Succession Planning Committees
Mr R Paul AM
D.Univ
Non-Executive Director
Former Chairman Evans Deakin
Industries Limited
Director since 1998
69
Member of Audit and Financial Risk,
Corporate Governance and Remuneration
and Succession Planning Committees
Mr N Chatfield
FCPA
Chief Financial Officer
27 years experience in
transport and resource industries
Director since 1998
47
Member of the Audit and Financial
Risk Committee
Mr R Dunning
B.E. (Hons) B.Com
Non-Executive Director
Director Downer EDI Ltd,
59
Brisbane Airport Corporation Ltd
Chairman – Powercoal Pty Ltd
Port of Brisbane Corporation, Pacific Power
Appointed Director 25 July 2001
Member of Audit and Financial Risk,
Corporate Governance and Remuneration
and Succession Planning Committees
Directors’ Interests
The relevant interest of each director in the shares, options or convertible notes issued by the companies within the consolidated
entity and other related body corporates, as notified by the directors to the Australian Stock Exchange in accordance with S205G(1)
of the Corporations Act 2001, at 28 August 2001 is as follows:
Toll Holdings Limited
Ordinary Shares
Options Over Ordinary Shares
Convertible Notes
Mr P Rowsthorn
3,112,160
–
–
Mr P A Little
8,984,147
400,000
748,678
Mr M Rowsthorn
9,235,850
400,000
769,652
174,062
–
–
Mr W Farrands
20,000
–
1,666
Mr R Paul AM
20,000
–
–
Mr N Chatfield
67,562
110,000
623
–
–
–
Mr J A Moule AM
Mr R Dunning
38
TOLL HOLDINGS LIMITED
Meetings of Directors
The following table sets out the number of meetings of the Company’s directors (including meetings of committees of directors) held
during the year ended 30 June 2001 and the number of meetings attended by each director who held office during the financial year.
Directors’
Meetings
Audit and Financial
Risk Committee
Meetings
Remuneration and
Succession Planning
Committee Meetings
Corporate
Governance
Committee Meetings
No. of Meetings
No. of Meetings
No. of Meetings
No. of Meetings
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Mr P Rowsthorn
12
12
4
4
2
2
2
2
Mr P A Little*
12
12
4
4
–
–
–
–
Mr M Rowsthorn*
12
12
–
–
–
–
1
1
Director
Mr J A Moule AM
11
12
4
4
2
2
2
2
Mr W Farrands
12
12
4
4
2
2
2
2
Mr R Paul AM
11
12
4
4
2
2
2
2
Mr N Chatfield*
12
12
4
4
–
–
2
2
During the year, a due diligence committee was established for the issue of the Convertible Notes. Mr J A Moule AM (Non-Executive
Director) was appointed Chairman. Executive Directors Mr P A Little and Mr N Chatfield and the Company Secretary Mr B McInerney
were appointed members of the committee.
* Mr P A Little was appointed to the Corporate Governance Committee on 27 June 2001 and may attend Meetings of the other
Committees as an invitee.
* Mr M Rowsthorn may attend Meetings as an invitee.
* Mr N Chatfield was appointed to the Audit and Financial Risk Committee on 27 June 2001 and may attend Meetings of the
Corporate Governance Committee as an invitee.
Share Options
During or since the end of the financial year, the Company granted options over unissued ordinary shares to the following directors and
executives who are amongst the five most highly remunerated officers as part of their remuneration.
Directors
Number of options granted
Exercise Price
Expiry Date
Mr P Little
200,000*
$11.8242
1 November 2005
Mr M Rowsthorn
200,000*
$11.8242
1 November 2005
Mr N Chatfield
100,000*
$7.9700
28 May 2005
* All options were granted during the financial year in accordance with resolutions passed by shareholders at the Company’s
Annual General Meeting held on 2 November 2000.
39
R E P O R T B Y D I R E CT O R S continued
Senior Executive Option Plan and Executive Share Option Scheme
Options to take up ordinary shares in the capital of Toll Holdings Limited have been granted as follows:
As at 28 August 2001, unissued ordinary shares of the Company under option are:
Grant Date
Total Options Granted
Unexpired Options
No. of Executives
Exercise Price $
Expiry Date
1 Jul 1998
1,025,000
470,000
22
2.1460
30 Jun 2003
23 Jun 1999
100,000
100,000
1
5.4150
22 Jun 2004
6 Aug 1999
400,000
400,000
2
5.4576
5 Aug 2004
22 Dec 1999
10,000
10,000
2
2.1460
30 Jun 2003
29 May 2000
1,115,000
1,110,000
40
7.9700
28 May 2005
26 July 2000
5,000
5,000
1
7.9700
28 May 2005
2 Oct 2000
25,000
25,000
1
7.9700
28 May 2005
2 Nov 2000
100,000
100,000
1
7.9700
28 May 2005
2 Nov 2000
400,000
400,000
2
11.8242
1 Nov 2005
27 Jun 2001
40,000
40,000
2
19.9100
26 Jun 2006
Each option is convertible into one ordinary share at any time after
the initial qualifying period, which is usually between three and
five years after the grant date. The options granted are only
exercisable on the satisfaction of specific hurdle criteria with
regard to the Company’s Total Shareholder Return and diluted EPS
growth relative to the All Industrials (excluding banks) or ASX 200
Industrials diluted EPS growth, during the period from grant date
to the end of the qualifying period (generally a three year period).
No ordinary shares were issued during the financial year on the
exercise of options granted under either the Senior Executive
Option Plan or the Executive Share Option Scheme (2000:
230,000 shares). 485,000 ordinary shares have been issued since
the end of the financial year on the exercise of options granted
under the scheme. (2000: Nil shares)
Directors’ and Senior Executives’ Emoluments
The Remuneration and Succession Planning Committee is
responsible for making recommendations to the Board on
remuneration policies and packages applicable to the Board
members and senior executives of the Company.
Executive remuneration and other terms of employment
are reviewed annually by the Committee having regard to
performance against goals set at the start of the year, relevant
comparative market information and independent expert advice.
The broad remuneration policy is to ensure that remuneration
packages properly reflect a person’s duties and responsibilities,
and that remuneration is competitive in attracting, retaining and
motivating people of the highest quality.
Executives are also eligible to participate in the Senior Executive
Option Plan. The ability to exercise options is conditional on the
Company achieving certain performance hurdles.
Non-executive directors’ remuneration is determined by the
Board within the maximum amount approved by shareholders
from time to time. Non-executive directors do not receive any
performance related remuneration.
Details of the nature and amount of each major element of
emoluments of each director of the Company and each of the
five most highly remunerated officers of the Company and the
consolidated entity receiving the highest emolument are:
Non-executive Directors of Toll Holdings Limited
Name
Directors Fee
$
Non-Cash Benefits
$
Superannuation
$
Total
$
141,302
7,114
–
148,416
55,000
–
4,400
59,400
Mr W Farrands
55,000
–
4,400
59,400
Mr R Paul AM
55,000
–
4,400
59,400
Mr P Rowsthorn (Chairman)
Mr J Moule AM
Executive Directors of Toll Holdings Limited
Name
Mr P Little
Managing Director
Mr M Rowsthorn
Executive Director Operations
Mr N Chatfield
Chief Financial Officer
40
TOLL HOLDINGS LIMITED
Base Salary
Non-Cash
Benefits
$
Superannuation
$
Performance
Incentive
$
619,547
255,000
16,241
44,213
588,080* 1,523,081
553,159
260,000
18,426
8,416
588,080* 1,428,081
341,059
50,000
40,555
8,416
343,367** 783,397
$
Option
Value
$
Total
$
Executive Officers of Toll Holdings Limited and Consolidated Entity
Name
Base Salary
Non-Cash
Benefits
$
Superannuation
$
Performance
Incentive
$
Total
$
Option
Value
$
Mr D Telford
Divisional Director
Toll Logistics
370,000
50,000
–
40,000
–
460,000
Mr J Ludeke
Divisional Director
Long Distance
320,000
50,000
40,000
50,000
–
460,000
Mr S Stanley
Director
Development
402,501
22,500
–
29,999
–
455,000
Mr T Mallon
Divisional Director
Toll North
230,821
50,000
34,179
85,000
–
400,000
Mr G Lyon
Divisional Director
Toll Technologies
270,000
50,000
52,000
28,000
–
400,000
$
* 200,000 options were granted each to P Little and M Rowsthorn on 2 November 2000 at an exercise price of $11.8242. The
exercising of these options is dependent upon the satisfaction of two performance hurdles, being Total Shareholder Return over
the three year period from the grant date must be at least equal to 35% and Earnings Per Share (EPS) diluted growth over the
same period must be at least equal to the growth in the EPS of the ASX 200 Industrials. These options have been valued at
grant date at a maximum value of $2.94 per option using the Binomial Method.
** 100,000 options were granted to N Chatfield on 2 November 2000 at an exercise price of $7.97. These options are dependent on
the same performance hurdles as above and were valued in the same manner. These options have been valued at grant date at
a maximum value of $3.43 per option.
Insurance of Officers
During the financial year, Toll Holdings Limited paid premiums of
$78,458 (2000: $44,502) to insure officers of the Company and
related bodies corporate.
The officers of the Company covered by the insurance policy
include the directors, P Rowsthorn, P A Little, M Rowsthorn,
J A Moule AM, W Farrands, R Paul AM, N Chatfield, R Dunning
and the secretary B B McInerney. Other officers covered by the
policy are directors or secretaries of controlled entities who are
not also directors or secretaries of Toll Holdings Limited, past
directors of companies within the Toll Group and managers of
the consolidated entity.
The liabilities insured, subject to specific exclusions, include
costs and expenses that may be incurred in defending civil or
criminal proceedings that may be brought against the officers
in their capacity as officers of the Company or a related
body corporate.
arises out of conduct involving a lack of good faith. The
agreement stipulates that the Company will meet the full
amount of any such liabilities, including costs and expenses.
Rounding off
The Company is of the kind referred to in ASIC Class Order
98/100 dated 10 July 1998 and in accordance with that Class
Order, amounts in the financial report, and directors’ report have
been rounded off to the nearest thousand dollars, unless
otherwise stated.
Auditor
KPMG continues in office in accordance with section 327 of the
Corporations Act 2001.
This report is made in accordance with a resolution of the directors.
Indemnification of Officers
The Company has agreed to indemnify the directors of the
Company, and its controlled entities, against all liabilities to
another person (other than the Company or a related body
corporate) that may arise from their position as directors of the
Company and its controlled entities, except where the liability
P Rowsthorn
Director
P A Little
Director
Dated at Melbourne this 5th day of September 2001.
41
D I S C U S S I O N & A N A LY S I S O F
S TA T E M E N T O F F I N A N C I A L P E R F O R M A N C E
FOR YEAR ENDED 30 JUNE 2001
Revenue Up $254 million to $1.638 billion
Total revenue, including operating revenue of $1.603 billion, increased by 18.3% to $1.638 billion,
mainly due to the full year impact of Removals Australia which was acquired in February 2000 and
additional revenue from the Finemore Group which was acquired in March 2001.
Profits Up $18 million to $66 million
Operating profit before tax increased by 37.7% to $66 million. This increase was due mainly to
strong results across all Toll divisions, in particular, Toll Express, Toll IPEC and Toll North, as well as
Toll Logistics’ Food and Retail and Automotive sectors. The full year impact of the Removals
Australia business also contributed to the result.
Income Tax Up $9.1 million to $16.4 million
Income tax expense increased by 125.3% to $16.4 million due mainly to the significant increase in
operating profit before tax of $18 million. The level of restructure cost expenditure has been lower
than in prior years as well as a higher level of non-deductible expenditure this year. This was offset
slightly by a reduction in the company tax rate from 36% to 34%. The effective tax rate increased
from 15.2% to 24.9%.
Dividends Up $3.3 million to $20.2 million
Ordinary dividends increased to 33 cents per share, up 17.8% from last years 28 cents per share.
Earnings Per Share Up 18.9% to 80.49 cents per share
Basic earnings per share increased 18.9% to 80.49 cents per share. Diluted earnings per share
increased by 17.3% to 77.79 cents per share. Both increases were due to the 21.9% increase in net
profit attributable to members. The diluted earnings per share has been impacted by the issue of
convertible notes in May 2001 and also the full year effect of the issue of executive share options in
May 2000.
Return on revenue increased from 2.92% to 3.01%.
EBIT margin increased 17.6% to 4.41%.
42
TOLL HOLDINGS LIMITED
S TAT E M E N T O F F I N A N C I A L P E R F O R M A N C E
for the year ended 30 June 2001
Consolidated
2001
$’000
2000
$’000
Revenue from ordinary activities
1,637,927
1,384,339
Expenses from ordinary activities
1,536,805
1,311,393
101,122
72,946
5,727
3,542
29,793
21,452
414
–
Profit from ordinary activities before income tax
66,016
47,952
Income tax relating to ordinary activities
16,415
7,285
Profit from ordinary activities after income tax
49,601
40,667
363
263
49,238
40,404
Net exchange difference on translation of financial statements of self sustaining foreign operations
(48)
–
Total changes in equity from non-owner related transactions attributable to the members
of the parent entity
49,190
40,404
Basic earnings per share
80.49¢
67.67¢
Diluted earnings per share
77.79¢
66.28¢
Earnings before borrowing costs, tax, depreciation and amortisation
Borrowing Costs
Depreciation and amortisation
Share of net profits of associates and joint ventures accounted for using the equity method
Net profit attributable to outside equity interest
Net profit attributable to members of the parent entity
Non-owner transaction changes in equity
The above statement of financial performance is to be read in conjunction with the accompanying notes to the financial statements
set out on pages 48 to 49.
43
D I S C U S S I O N A N D A N A LY S I S O F
S TA T E M E N T O F F I N A N C I A L P O S I T I O N
AS AT 30 JUNE 2001
Net Assets Up $39 million to $198 million
Total Assets Up $295 million to $699 million
Total assets increased by 73% due mainly to:
• A $20 million increase in cash.
• A $57 million increase in receivables due mainly to higher levels of trading and the inclusion of
the Finemores Group during the year.
• A $145 million increase in property, plant and equipment due to the net combination of capital
expenditure, depreciation charges and asset sales during the year. The main reason for the
increase has been assets acquired through the purchase of the Finemore Group, AR Neal and
Strang Stevedoring during the year.
• A $18 million increase in investments accounted for using the equity method through the
acquisition of the Finemores Group.
• A $46 million increase in intangible assets due mainly to the acquisition of the Finemores Group,
as well as the acquisition of AR Neal and Strang Stevedoring.
Total Liabilities Up $256 million to $501 million
Total liabilities increased by 105% to $501 million due mainly to:
• A $46 million increase in payables due mainly to the acquisition of the Finemore Group and a
higher level of trading than the prior year.
• A $142 million increase in interest bearing liabilities due mainly to the issue of $114 million of
convertible notes in May 2001. Increases also occurred in finance lease and hire purchase
liabilities as a result of acquisitions during the year.
• A $42 million increase in provisions due to a combination of:
• An increase in the restructure provision of $10 million due to the acquisition of the Finemore
Group, AR Neal and Strang Stevedoring.
• An increase in the provision for dividends of $2 million due to a higher dividend per share.
• An increase in the provision for employee entitlements of $17 million due mainly to the
acquisition of the Finemore Group, AR Neal and Strang Stevedoring.
• An increase in other provisions of $13 million relating to the acquisition of the Finemore
Group, AR Neal and Strang Stevedoring and other general provision increases.
Equity Up $39 million to $198 million
Total equity increased by 24.6% to $198 million due mainly to:
• A $10 million increase in contributed equity due to 865,108 shares issued under the Company’s
Dividend Reinvestment Plan.
• A $29 million increase in retained profits during the year.
44
TOLL HOLDINGS LIMITED
S TAT E M E N T O F F I N A N C I A L P O S I T I O N
as at 30 June 2001
Consolidated
2001
$’000
2000
$’000
Cash assets
46,896
26,691
Receivables
214,943
158,123
7,596
4,140
21,932
27,916
291,367
216,870
3,174
3,746
17,813
–
9,145
5,613
317,484
172,236
Intangible assets
45,748
–
Deferred tax assets
12,485
4,808
1,526
–
Total Non-Current Assets
407,375
186,403
Total Assets
698,742
403,273
163,719
117,740
7,403
2,273
Current tax liabilities
18,158
6,531
Provisions
94,339
58,556
283,619
185,100
180,190
42,886
Deferred tax liabilities
23,400
9,482
Provisions
13,840
7,154
Total Non-Current Liabilities
217,430
59,522
Total Liabilities
501,049
244,622
Net Assets
197,693
158,651
108,625
98,756
(48)
–
88,566
59,569
197,143
158,325
550
326
197,693
158,651
Current Assets
Inventories
Other
Total Current Assets
Non-Current Assets
Receivables
Investments accounted for using the equity method
Other financial assets
Property, plant and equipment
Other
Current Liabilities
Payables
Interest bearing liabilities
Total Current Liabilities
Non-Current Liabilities
Interest bearing liabilities
Equity
Contributed equity
Reserves
Retained profits
Total parent entity interest
Outside equity interests
Total Equity
45
D I S C U S S I O N A N D A N A LY S I S O F
S TA T E M E N T O F C A S H F LO W S
FOR YEAR ENDED 30 JUNE 2001
Operating Activities Net cash inflow increased $36 million
Net cash inflows from operating activities increased $36 million due mainly to an increase in the
activity levels of the Group.
Cash receipts and payments in the course of operations increased, reflecting the effect of the
acquisition of the Finemore Group, AR Neal and Strang Stevedoring as well as increased activity
levels in existing businesses.
Investing Activities Net cash outflow increased $120 million
An increase of $123 million in payments for businesses acquired during the year, increased
capital expenditure of $7 million, offset by increased proceeds from disposal of property, plant
and equipment of $10 million resulted in a larger cash outflow this year.
Financing Activities Net cash inflow increased $100 million
An increase in proceeds from borrowings of $91 million mainly related to the issue of $114 million
of convertible notes in May 2001 resulted in a larger cash inflow this year.
46
TOLL HOLDINGS LIMITED
S TAT E M E N T O F C A S H F L O W S
for the year ended 30 June 2001
Consolidated
2001
$’000
2000
$’000
Cash receipts in the course of operations
1,659,799
1,350,718
Cash payments in the course of operations
(1,544,343)
(1,276,084)
Restructure costs paid
(6,118)
(10,957)
Interest received
1,113
472
551
329
Interest and other costs of finance paid
(5,729)
(3,239)
Income taxes paid
(8,009)
(165)
Net cash inflow/(outflow) from operating activities
97,264
61,074
1,213
–
(132,536)
(9,917)
Payment for property, plant and equipment
(58,101)
(50,958)
Proceeds from sale of property, plant and equipment
30,244
20,261
Payment for investments
(1,615)
(350)
(160,795)
(40,964)
Proceeds from borrowings
125,298
34,605
Repayment of borrowings
(32,332)
(40,688)
Dividends paid
(12,538)
(10,438)
4,291
183
(983)
–
Net cash inflow/(outflow) from financing activities
83,736
(16,338)
Net increase/(decrease) in cash held
20,205
3,772
Cash at the beginning of the financial year
26,691
22,919
Cash at the end of the financial year
46,896
26,691
Cash flows from operating activities
Dividend received
Cash flows from investing activities
Proceeds on disposal of controlled entities
Payment for entities and businesses, net of cash acquired
Net cash inflow/(outflow) from investing activities
Cash flows from financing activities
Proceeds from share issue
Finance lease payments
The above statement of cash flows are to be read in conjunction with the accompanying notes to the financial statements set out on
pages 48 to 49.
47
N OTE S
TO T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
FOR YEAR ENDED 30 JUNE 2001
1. Basis of Preparation of Concise Financial Report
The concise financial report has been prepared in accordance with the Corporations Act 2001, Accounting Standard AASB1039
‘Concise Financial Reports’ and applicable Urgent Issues Group Consensus Views. The financial statements and specific disclosures
required by AASB1039 have been derived from the consolidated entity’s full financial report for the financial year. Other information
included in the concise financial report is consistent with the consolidated entity’s full financial report. The concise financial report
does not, and cannot be expected to, provide as full an understanding of the financial performance, financial position and financing
and investing activities of the consolidated entity as the full financial report.
It has been prepared on the basis of historical costs, and except where stated, does not take into account changing money values or
current valuation of non-current assets.
These accounting policies have been consistently applied by each entity in the consolidated entity and are consistent with those of
the previous year.
Where necessary, comparative information has been reclassified to achieve consistency in disclosure with current financial year
amounts and other disclosures.
A full description of the accounting policies adopted by the consolidated entity may be found in the consolidated entity’s full
financial report.
2. Dividends Paid and Declared
Consolidated
2001
$’000
2000
$’000
–
11
9,191
7,820
11,050
9,078
20,241
16,909
8,165
8,139
Ordinary
(i) a final ordinary dividend of 12 cents per share franked to 50% with Class C (36%)
franking credits paid 30 September 1999, in relation to shares issued following the
exercise of Executive Share Options exercised on 19 July 1999 and 15 September 1999
(ii) an interim ordinary dividend of 15 cents per share franked to 60% with Class C (34%)
franking credits, paid 30 March 2001 (2000: 13 cents 20% franked Class C (36%))
(iii)a final ordinary dividend of 18 cents per share franked to 70% with Class C (30%)
franking credits (2000: 15 cents 50% franked Class C (34%)) has been declared by the directors
Dividend franking account
Class C (30%) (2000:34%) franking credits available to
shareholders of Toll Holdings Limited for subsequent financial years.
The above available amounts are based on the balance of the dividend franking account at year-end adjusted for:
(a) franking credits that will arise from the payment of the amount of the provision for income tax
(b) franking debits that will arise from the payment of dividends recognised as a liability at year-end
(c) franking credits that will arise from the receipt of dividends recognised as receivables at year-end
(d) franking credits that the entity may be prevented from distributing in subsequent years.
The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends.
48
TOLL HOLDINGS LIMITED
3. Contributed equity
(a) Issued and Paid Up Capital
Consolidated
61,387,592 ordinary shares fully paid (2000 – 60,522,484)
2001
$’000
2000
$’000
108,625
98,756
4. Segment Information
The Group derives revenue from the provision of the total logistics solution through use of economy and express freight forwarding
services, storage, warehousing and distribution of freight nationally by road, rail and sea, rail linehaul operations, international
forwarding, ports management and time sensitive freight distribution services. These activities are inter-dependent and inter-related
as a collection of related services forming one segment within the transport and logistics industry.
Geographical Segments
The consolidated entity operates predominantly in Australia and all material revenue, operating profit before income tax and segment
assets relate to operations within Australia.
5. Event Subsequent to Balance Date
On 5 September 2001, the Company announced it would form a consortium with Lang Corporation to bid for the sale of National Rail
Corporation and FreightCorp. Other than the above item, there has not arisen in the interval between the end of the financial year
and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of
the Company, to affect significantly the operations of the consolidated entity, the results of those operations, or the state of affairs
of the consolidated entity, in future financial years.
6. Full Financial Report
Further financial information can be obtained from the full financial report which is available, free of charge, on request from the
Company at Level 8, 380 St Kilda Road Melbourne, Vic, 3004. Alternatively, both the full financial report and the concise financial
report can be accessed via the internet at :http://www.toll.com.au.
49
D I R E CTO R S ’ D E C LA R AT I O N
In the opinion of the directors of Toll Holdings Limited the accompanying concise financial report of the consolidated entity,
comprising Toll Holdings Limited and its controlled entities for the year ended 30 June 2001, as set out on pages 42 to 49.
(a) has been derived from or is consistent with the full financial report for the financial year; and
(b) complies with Accounting Standard AASB1039 ‘Concise Financial Reports’.
Signed in accordance with a resolution of the directors:
P Rowsthorn
Director
P A Little
Director
Dated at Melbourne this 5th day of September 2001.
50
TOLL HOLDINGS LIMITED
INDEPENDENT AUDITOR’S REPORT
To the members of Toll Holdings Limited
Scope
We have audited the concise financial report of Toll Holdings Limited and its controlled entities for the financial year ended 30 June
2001, consisting of the statement of financial performance, statement of financial position, statements of cash flows, accompanying
notes 1 to 6, and the accompanying discussion and analysis on the statement of financial performance, statement of financial position
and statement of cash flows set out on pages 42 to 49 in order to express an opinion on it to the members of the Company. The
Company’s directors are responsible for the concise financial report.
Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the concise
financial report is free of material misstatement. We have also performed an independent audit of the full financial report of Toll
Holdings Limited and its controlled entities for the year ended 30 June 2001. Our audit report on the full financial report was signed
on 5 September 2001, and was not subject to any qualification.
Our procedures in respect of the audit of the concise financial report included testing that the information in the concise financial
report is consistent with the full financial report and examination, on a test basis, of evidence supporting the amounts, discussion and
analysis, and other disclosures which were not directly derived from the full financial report. These procedures have been undertaken
to form an opinion whether, in all material respects, the concise financial report is presented fairly in accordance with Accounting
Standard AASB 1039 Concise Financial Reports issued in Australia.
The audit opinion expressed in this report has been formed on the above basis.
Audit opinion
In our opinion the concise financial report of Toll Holdings Limited and its controlled entities for the year ended 30 June 2001 complies
with AASB 1039 Concise Financial Reports.
KPMG
JJ O’Connell
Partner
Melbourne
5 September 2001
51
9
NINE YEAR
SUMMARY
June 1993
June 1994
June 1995
June 1996
June 1997
June 1998
June 1999
66,934
8,144
1,554
6,590
1,644
4,946
2,321
118,529
12,796
2,832
9,964
1,158
8,806
2,540
178,709
12,833
4,542
8,291
1,693
6,598
963
234,297
16,805
6,586
10,219
2,631
7,588
2,214
469,998
27,290
11,728
15,562
3,605
11,957
2,857
854,440
43,411
21,723
21,688
3,593
18,095
3,157
1,295,855
63,315
21,661
41,654
3,303
38,351
7,841
Operating Profit after Tax
Outside Equity Interests
2,625
(4)
6,266
160
5,635
106
5,374
0
9,100
0
14,938
193
30,510
370
Profit Attributable to Members
Profit Attributable to Members before Abnormal Items
2,629
2,629
6,106
6,276
5,529
5,529
5,374
3,285
9,100
7,743
14,745
13,742
30,140
29,210
CPS Dividend
Ordinary Dividends
Ordinary Payout Ratio (%)
Overall Dividend Payout Ratio (%)
1,150
43.74
3,642
59.65
3,700
66.92
3,141
58.45
637
4,772
56.39
59.44
1,705
6,241
47.86
53.89
3,240
11,631
43.24
49.34
1,040
8,572
24,896
451
2,857
37,816
13,466
20,245
33,711
4,105
10,163
14,542
38,269
654
3,186
66,814
17,890
16,444
34,334
32,480
5,705
17,831
48,093
1,730
3,906
77,265
18,517
23,395
41,912
35,353
5,718
37,747
80,836
5,144
7,613
137,058
45,850
52,877
98,727
38,331
6,683
58,206
70,332
6,806
7,584
149,611
46,111
41,751
87,862
61,749
20,323
132,201
177,085
8,470
4,606
342,685
173,092
59,661
232,753
109,932
22,919
144,264
170,172
9,044
0
346,399
169,714
50,314
220,028
126,371
(4)
3,909
200
4,105
156
26,242
6,082
32,480
0
29,145
6,208
35,353
0
32,033
6,298
38,331
0
53,087
8,662
61,749
1,846
96,473
11,613
109,932
64
36,074
90,233
126,371
Basic Earnings per ordinary share before abnormal items:
Based on weighted average number of shares issued during the year
Based on number of shares issued at the end of the period
2.629
2.629
0.260
0.206
0.181
0.178
0.105
0.104
0.189
0.178
0.283
0.269
0.571
0.440
Basic Earnings per ordinary share after abnormal items:
Based on weighted average number of shares issued during the year
Based on number of shares issued at the end of the period
2.629
2.629
0.253
0.201
0.181
0.178
0.172
0.171
0.225
0.212
0.307
0.292
0.592
0.456
1.15
100
100
0.80
0.12
100
100
0.94
0.12
100
100
0.96
0.10
100
100
0.81
0.12
100
100
0.935
0.14
75
65
1.271
0.22
35
50
2.142
12.17
9.85
3.93
17.43
63.98
0.64
4.01
46.93
10.80
8.41
5.15
14.91
18.89
1.31
8.60
28.84
7.18
4.64
3.09
10.73
15.64
1.14
4.90
14.60
7.17
4.36
2.29
7.46
14.02
0.85
3.88
29.18
5.81
3.31
1.94
10.40
14.74
1.05
4.32
23.89
5.08
2.54
1.73
6.33
13.64
0.97
6.04
17.45
4.89
3.21
2.33
12.02
23.86
1.10
12.61
20.45
467.84
19.34
50.04
123.03
56.79
35.78
21.68
1,000,000
1,000,000
24,161,429
30,409,816
30,595,515
31,040,306
31,242,934
31,488,977
37,631,329
39,974,761
42,534,966
44,729,677
45,470,121
58,999,489
3,333,334
0
0
13,333,334
0
0
1,310
1,700
3,517
4,500
4,889
5,635
Operating Results ($’000)
Group Sales
Profit before Depreciation, Amortisation and Interest (EBDAIT)
Depreciation and Amortisation
Profit before Interest and Tax (EBIT)
Interest
Profit before Tax
Income Tax Expense
Financial Position ($’000)
Cash
Other Current Assets
Other Non-Current Assets
Future Income Tax Benefits
Intangible Assets (Goodwill and Other)
Total Assets
Other Liabilities
Borrowings
Total Liabilities
Net Assets
Outside Equity Interests
Reserves and Retained Profits
Paid Up Capital
Total Shareholders’ Equity
Per Ordinary 20¢ Share ($)
Dividend Paid or Declared per share
Franking (%) Interim
Final
Net Tangible Asset Backing
Analytical Information
EBDAIT to Sales (%)
EBIT to Sales (%)
Group Profit After Tax to Sales (%)
EBIT to Total Assets (%)
Return on Members’ Equity (%)
Current Assets to Current Liabilities (x)
EBIT Interest Cover (x)
Effective Tax Rate (%)
Gearing
Net Borrowings to Equity (%)
Other
Ordinary Shares
Weighted average number of shares on issue during the year
Shares on issue at year end
Preference Shares
Cumulative shares on issue at year end
Non-Cumulative shares on issue at year end
Convertible Notes
Notes on issue at year end
Number of shareholders at year end
Number of employees at year end Est
52
TOLL HOLDINGS LIMITED
6
310
977
490
919
786
945
1,800
June 2000
June 2001
1,360,098
72,474
21,452
51,022
3,070
47,952
7,285
1,602,798
100,423
29,793
70,630
4,614
66,016
16,415
40,667
263
40,667
363
40,404
40,404
49,238
49,238
0
16,909
41.85
41.85
0
20,241
41.11
41.11
26,691
190,179
181,595
4,808
0
403,273
199,463
45,159
244,622
158,651
46,896
244,471
349,142
12,485
45,748
698,742
313,456
187,593
501,049
197,693
326
59,569
98,756
158,651
550
88,518
108,625
197,693
0.677
0.668
0.805
0.802
0.677
0.668
0.805
0.802
0.28
20
50
2.621
0.33
60
70
2.475
Profit before interest and tax (EBIT)
($m)
70.6
38% to $70.6m
51.0
41.7
Profit growth continues to reflect
6.6
93
10.0
8.3
10.2
94
95
96
15.6
97
benefits of acquisitions achieved
21.7
during the past 8 years
98
99
00
01
Total shareholders’ equity
($m)
197.7
158.6
126.4
Shareholders’ equity in the company
61.7
32.5
6.27
4.41
3.07
10.11
24.98
1.92
15.31
24.87
reflects our growth strategy
35.4 38.3
4.1
93
94
95
96
97
98
99
00
01
EBIT to sales
(%)
9.8
8.4
19% to 4.4%
4.6
5.33
3.75
2.97
12.65
25.52
1.43
16.62
15.19
25% to $197.7m
109.9
4.4
3.3
2.5
93
94
95
96
97
98
3.2
3.7
4.4
Rationalisation, integration and cost
constraints have generated an improved
EBIT margin
99
00
01
25.5
25.0
Return on members’ equity
(%)
11.64
71.17
23.9
2.7% to 25%
18.9
59,709,722
60,522,484
61,171,908
61,387,592
0
0
0
0
15.6
14.0
14.7
Return on members’ equity is relatively
13.6
steady given the company’s increased
profitability and equity base
Pre float 94
95
96
97
98
99
00
01
6,753,588
6,992
5,980
7,913
8,984
53
SHAREHOLDER INFORMATION
Additional information required by the Australian Stock Exchange Listing Rules not elsewhere disclosed in this report. The shareholder
information set out below was applicable as at 28 August 2001.
A. Distribution of Shareholders
(a) Analysis of numbers of shareholders by size of share holdings for ordinary securities.
Number
Units
%
1–
1,000
4,599
2,064,219
3.33
1,001 –
5,000
2,683
6,287,416
10.16
5,001 –
10,000
356
2,547,292
4.12
10,001 – 100,000
236
6,617,626
10.70
100,001 – and over
39
44,356,039
71.69
7,913
61,872,592
100.00
There were one hundred and fifty seven holders with less than a marketable parcel of ordinary shares.
Each ordinary share is entitled to one vote per share.
B. Twenty Largest Shareholders
The names of the twenty largest shareholders are listed below:
Number of
Ordinary
Shares Held
Percentage of
Issue Shares
%
1 Mostia Dion Nominees Pty Ltd
8,908,691
14.40
2 Mr Paul Alexander Little
8,736,077
14.12
3 PGA (Investments) Pty Ltd
3,665,000
5.92
4 Mr Peter Rowsthorn
3,071,749
4.96
5 Chase Manhattan Nominees Limited
2,619,338
4.23
6 National Nominees Limited
2,501,198
4.04
7 Australian Foundation Investment Company Limited (Investment Portfolio A/C)
2,233,334
3.61
8 Westpac Custodian Nominees Limited
1,344,800
2.17
Name
9 Perpetual Nominees Limited (JBEMEP A/C)
1,037,764
1.68
1,000,000
1.62
11 ANZ Nominees Limited
920,617
1.49
12 Queensland Investment Corporation
897,408
1.45
13 Djerriwarrh Investments Limited
600,000
0.97
14 Commonwealth Custodial Services Limited (No 17 A/C)
587,940
0.95
15 The National Mutual Life Association of Aust Limited
580,468
0.94
16 Camrock (Australia) Pty Limited
571,755
0.92
17 NRMA Nominees Pty Limited
560,835
0.91
18 Mr Richard John Raw and Mrs Rosemary Joan Raw
442,492
0.72
19 Citicorp Nominees Pty Limited
408,283
0.66
20 Mr Ashley William Lyons Hancock and Mrs Raelene Joy Hancock
404,875
0.65
41,092,624
66.41%
10 Cable Nominees Pty Ltd (33390 A/C)
Total
54
TOLL HOLDINGS LIMITED
C. Substantial Shareholders
The following are registered by the Company as substantial shareholders, having declared a relevant interest in the number of voting shares
shown adjacent as at the date of giving the notice.
Number and Percentage of
Shares in which interest held
in Ordinary Shares
Name
Number
Interest %
(a) Mr Mark Rowsthorn and related bodies corporate
9,235,850
14.93
(b) Mr Paul Alexander Little and related bodies corporate
8,984,147
14.52
(c) PGA (Investments) Pty Ltd and related bodies corporate
4,665,000
7.54
(d) Mr Peter Rowsthorn
3,112,160
5.03
55
SHAREHOLDER INFORMATION
On the Internet www.toll.com.au
Newsletters, detailed company updates, industry news and our corporate profile are a click away at www.toll.com.au. Our website
is the best place to find the latest investor information about Toll and its high-value services. By expanding www.toll.com.au we are making
e-commerce opportunities a commercial reality – rate enquiries, quotations, freight bookings and tracking are key development areas
to look forward to. You can also access comprehensive information about your holdings either via the link on our website, or direct to the
share registry on www.computershare.com
Latest Toll updates,
media information and news
Access shareholder
information – Annual
Reports in online
interactive and PDF formats
what does it mean to lead?
TOLL HOLDINGS LIMITED CONCISE ANNUAL REVIEW 2001
www.toll.com.au
56
TOLL HOLDINGS LIMITED
COMPANY DIRECTORY
Directors
Chairman
Peter Rowsthorn
Managing Director
Paul Little
Executive Directors
Mark Rowsthorn
Neil Chatfield
Non-Executive Directors
John Moule AM
William Farrands
Ronald Paul AM
Ross Dunning
Divisional Directors
John Ludeke
Long Distance
Don Telford
Logistics
Terry Mallon
Toll North
Graham Lyon
Toll Technologies
Stephen Stanley Development
Secretary
Bernard McInerney
Principal Registered Office
in Australia
Level 8, 380 St Kilda Road
Melbourne Vic 3004
Telephone: (03) 9694 2888
Facsimile: (03) 9694 2880
Divisional Offices
Long Distance & Logistics
Level 1, 32 Walker Street
North Sydney NSW 2060
Telephone: (02) 8923 2333
Facsimile: (02) 8904 0219
Toll North
146 Kerry Road
Archerfield Qld 4108
Telephone: (07) 3275 0400
Facsimile: (07) 3275 0444
Toll Technologies
Level 8, 380 St Kilda Road
Melbourne Vic 3004
Telephone: (03) 9694 2888
Facsimile: (03) 9694 2880
Share Register
Computershare Investor Services
Level 12, 565 Bourke Street
Melbourne Vic 3000
Telephone: (03) 9611 5711
Facsimile: (03) 9611 5710
Website: www.computershare.com
Stock Exchange Listing
Toll Holdings Limited shares are listed
on the Australian Stock Exchange
The home exchange is in Melbourne
Auditors
KPMG
Level 5, 161 Collins Street
Melbourne Vic 3000
Bankers
National Australia Bank
271 Collins Street
Melbourne Vic 3000
Solicitors
Clayton Utz
Solicitors & Attorneys
Level 18, 333 Collins Street
Melbourne Vic 3000
TOLL PEOPLE – INDUSTRY SECTORS
All names are from left to right
Industrial – pages 14 and 15
Paul Ebsworth, General Manager, Toll
Tasmania and Edwards Transport
Garry Harding, General Manager, Industrial
Logistics
Warren Aron, Business Manager, Industrial
Logistics
Sam Hunter, National Manager, Paper
& Packaging, Industrial Logistics
Fred Tonkies, Contract Manager, Industrial
Logistics
Resources – pages 16 and 17
John Kempe, Regional Manager, WA
– Ports & Resources Logistics
Graeme Sargent, National Development
Manager, Ports & Resources Logistics
Steven Ford, General Manager, Ports
& Resources Logistics
Beverage – pages 18 and 19
Ken Noye, General Manager, Beverage
Logistics
Steve Innes, Business Manager CCA,
Beverage Logistics
Tom Keipert, National Operations Manager,
Beverage Logistics
Food & Retail – pages 20 and 21
Rob Sadler, General Manager, Toll
Refrigerated
Hugh Cushing, General Manager, Group
Development, Toll North
Neil Pollington, NSW State Manager,
Toll Express
Alan Mitchell, General Manager, Food
& Retail Logistics
Roger Duckett, National Manager Transport,
Food & Retail Logistics
Des Breust, General Manager, Business
Development, Logistics
Automotive – pages 22 and 23
David Jackson, General Manager, Toll SPD
Wayne Hunt, General Manager, Automotive
Logistics
Karin Diep, Senior Logistics Analyst,
Automotive Logistics
Peter Keane, Lead Logistics Manager,
Ford Contract, Automotive Logistics
Julie Feehan, Victorian State Manager,
Toll IPEC
Laurie Brothers, General Manager, Toll Vehicle
Distribution
Ports – pages 24 and 25
Steven Ford, General Manager, Ports &
Resources Logistics
Vincent Tremaine, Regional Manager, Vic, SA,
Tas. Ports & Resources Logistics
Paul Garaty, NSW Regional Manager, Ports
& Resources Logistics
Relocations – pages 26 and 27
Bob Buchanan, Operations Manager, Toll
Transitions – Victoria, Tasmania and Riverina
Helen Newell, General Manager,
Toll Transitions
Brian Crawford, National Account Manager,
Toll Transitions
Paul Gray, Operations Manager,
movinghome.com.au
Tony Barker, National Account Manager
Defence, Toll Transitions
Margaret Kelly, Group Development Manager,
Toll Transitions
Brad Green, Operations Manager,
movinghome.com.au
Technology – pages 28 and 29
Martin Dunne, General Manager, Information
Technology, Toll Group
Steve Zangari, TollWorks Project Director,
Toll Group
Alan Barraclough, IT Project Manager,
Toll Group
Designed and produced by The Ball Group Melbourne and Sydney 9/01 THL0055
We set the standard for
excellence of integrated logistics
and distribution through total
commitment to quality people
and services, with superior
financial results.
TOLL HOLDINGS LIMITED ABN 25 006 592 089