Announcement PDF ''cY6CCJ6AG:EDGI 8DGEDG6I:9>G:8IDGN Chairman’s Message 1 Managing Director’s Review 2 Financial Report Contents 13 Directors’ Report 14 Income Statements 32 Statements of Changes in Equity 33 Balance Sheets 34 Statements of Cash Flows 35 Notes to the Consolidated Financial Statements 36 Directors’ Declaration 77 Audit Report 78 Lead Auditors' Independence Declaration 79 ASX Additional Information 80 DIRECTORS Paul Rengel (Chairman) John Chan (Managing Director) Loh Kee Kong John Cheak Richard Rimington COMPANY SECRETARY Darren Pateman REGISTERED OFFICE Level 3 15 Labouchere Road SOUTH PERTH WA 6151 Telephone: +61 8 9474 4460 Facsimile: +61 8 9474 4458 Email: info@finbar.com.au POSTAL ADDRESS PO Box 113 SOUTH PERTH WA 6951 SHARE REGISTRY Computershare Investor Services Pty Ltd Level 2, Reserve Bank Building 45 St Georges Terrace PERTH WA 6000 Telephone: +61 8 9323 2000 AUDITORS KPMG 132-158 St Georges Terrace PERTH WA 6000 SOLICITORS Chalmers Legal Studio Studio 7 82 King Street PERTH WA 6000 STOCK EXCHANGE LISTING Australian Stock Exchange Limited (Perth) ASX Code: FRI WEBSITE www.finbar.com.au & On behalf of the Board of Directors of Finbar International Limited, I am pleased to present your Company’s twenty second Annual Report for the fiscal year ended 30 June 2006, which has been a very successful year. The financial results of the Company and its Controlled entities has continued at a strong profitable level with a net profit after tax at $5,025,000 and with an announced profit projection of $9,500,000 for the current fiscal year ending 30 June 2007. An interim dividend of $1,032,234 was also paid during the year, with a final payment of $3,560,202 to be made at the end of the first quarter of the current period. The net asset position of the Company and its Controlled entities has also grown during the year by $14,280,000, funded in part by a successful capital-raising of $12,360,000. With a total of $494,000,000 in future projects under sales contracts, the Company is in a very sound financial position. Your Company’s performance and strength is also reflected in the market value of its listed securities which reached a high of $1.03 per share during the fiscal year and enabled the company to raise new capital at an issue price of $0.80 per share. Shareholders are no doubt aware of News Media interest in the property sector and that concerns have been expressed over future trends. You may be assured however that your Company continues to operate under carefully established best practice policies in planning future operations. The Company will therefore continue to take a financially prudent and conservative approach to new projects, taking care to cover specific debt with substantial unconditional presales prior to commitment. The directors are confident that this approach will continue to deliver profits and achieve steady growth into the future and enhance the investment value in Finbar for its shareholders. My report would not be complete without a commendation for the continued dedicated efforts and enthusiasm of the Executive Directors and our Staff. Good people make success happen at Finbar and I congratulate them on another year of outstanding contribution. I also thank my fellow Non-Executive Directors for their support and independent council. Finbar has enjoyed strong support from shareholders both old and new and I thank you all for your continued interest in the Company and ask you to read the attached report and to participate in the Annual General Meeting of your Company. 8=6>GB6CÉHG:EDGI Yours faithfully, Paul Anthony Rengel Chairman of Directors ;^cWVg>ciZgcVi^dcVaA^b^iZYVcY^ih8dcigdaaZY:ci^i^Zh6ccjVaGZedgi'%%+ ;^cWVg>ciZgcVi^dcVaA^b^iZYVcY^ih8dcigdaaZY:ci^i^Zh6ccjVaGZedgi'%%+ 9ZaBVg!I]ZEVaaVY^d BVcYjgV] E:GI=879 B6C9JG6= I]ZLZhigVa^Vc 6eVgibZcih :VhiEZgi] 6aiV^g6eVgibZcih :VhiEZgi] DcZ'-6eVgibZcih :VhiEZgi] Hd]d6eVgibZcih :VhiEZgi] 9dbjh6eVgibZcih :VhiEZgi] GdnVaZ6eVgibZcih :VhiEZgi] ;V^gaVcZh :VhiEZgi] GZ[aZXi^dch 6eVgibZcih :VhiEZgi] 6gjbHVbe]^gZ 6eVgibZcihG^kZgkVaZ 6kZcV6eVgibZcih G^kZgkVaZ 8ZgZhV6eVgibZcih G^kZgkVaZ L]ViaZn8gZhXZci BVnaVcYh Adi'%,(%& Cdgi]Wg^Y\Z ,%&LZaa^c\idcHi LZhiEZgi] Cjig^bZi^Xh K^Xidg^VEVg` >c[^c^in6eVgibZcih :VhiEZgi] Hda6eVgibZcih LZhiEZgi] ' The 2005-2006 financial year has been an excellent one for the Company, at a time when the booming resources sector and high population growth rate are driving house prices and bricks and mortar investments to record highs. Increasingly unaffordable houses in Perth’s inner suburbs, coupled with rising fuel and parking costs, are influencing growing demand from young professionals for affordable apartments near public transport hubs and the city centre. These factors have contributed to Finbar’s growth this year which has seen the Company commence or continue construction on 10 projects, with another six properties acquired for future development. During the year, the Company’s share price doubled. This is very pleasing as it is now starting to reflect Finbar’s position as market leader in inner city residential developments. This substantial increase is recognition of the Company’s intrinsic value. Our excellent relationships with major banking institutions, State Government and local councils continues to add value and strengthen our position in the industry and enable us to complete exciting projects with attractive margins in areas of high demand. Although skilled labour and materials shortages are causing significant delays in areas of the industry, Finbar provides for substantial cost contingencies and for delays in construction times when assessing the feasibility of projects and allocating capital. Additionally, the Company maintains established relationships with experienced, independent builders who build exclusively for the Company. This ensures there are no delays in sourcing suitable contractors in this busy building market. With projects now being completed and a solid project pipeline established and growing, the cyclical nature of profit earning, due to revenue being reported only on project completion, will smooth and give shareholders greater confidence in their investments. This year has also seen shareholders benefit from the start of a new twice-yearly dividend payment policy. This has been a deliberate strategic decision by the Company to allow shareholders to enjoy investment income twice a year. The policy provides for 50 to 60 per cent of Company after tax profit to be paid to shareholders in the form of dividends, with the balance retained for continued growth of the Company. Excitingly, this year’s icon project – Reflections Towers – purchased last year has sold out. The two, 24-storey towers, situated on Terrace Road East Perth, achieved the highest price ever for an apartment along that strip - $3.7 million. The Company is now achieving prices in the $12,000 per square metre range which is very encouraging and reflects the employment and wealth in the State currently. This sales success is on the back of the complete sell out on 10 major Company projects with $494 million dollars of sales under contract and due for completion over the next three years. Moving forward, and building on this year’s excellent results, the Company will continue to improve and increase the core business in a manageable way, focusing on continuing to increase the number of apartments developed and sold. Currently, the Company is building approximately 400 apartments per year, up from 150 – 200 previously, and is confident of further increases in activity. Additionally, the Company recently acquired property with land suitable to build approximately 10,000 square metres of office space. This comes at a time when office space is constrained and demand high, and will provide the Company with another avenue for profit. B6C6<>C<9>G:8IDGÉHG:K>:L  The Company is also considering the formation of a commercial property trust from which Finbar would develop the property for the fund, retain an interest in, and receive a recurrent fee for fund management. With our market leadership recognised, a good project pipeline established, new opportunities to come on stream, and greater returns being given to shareholders, I look forward to 2006 -2007 and building on this significant foundation for future growth and profitability. Finbar International Limited and its Controlled Entities Annual Report 2006 John Chan Managing Director rivervale concepts pty ltd 50% 135adelaideterracedevelopmentsptyltd 50% burt way developments pty ltd 50% 132 terrace road joint venture pty ltd 50% 175 hay street pty ltd 50% 375 hay street pty ltd 50% 188 adelaide terrace joint venture pty ltd 50% joint venture AGREEMENT 60% 78 Terrace road joint venture pty ltd 50% The Westralian Infinity Reflections Altair Royale Domus One28 175 Hay Cosmopolitan Soho Avena Ceresa Arum & Samphire 17-19 CARR STREET PTY LTD 100% Sol Corfield Street DelMar 100% 100% 701 WELLINGTON STREET PTY LTD 50% 59 ALBANY HWY PTY LTD 68.75% 59 Albany Hwy joint venture Pty Ltd 46.15% JOINT VENTURE AGREEMENT 50% Nutrimetics Site 50% LOT 1 -10 WHATLEY CRESCENT PTY LTD 100% Senses Site 175 Adelaide terrace PTY LTD 100% Fairlanes LAKE STREET PTY LTD 100% Lake Street CORPORATE STRUCTURE ;^cWVg>ciZgcVi^dcVaA^b^iZYVcY^ih8dcigdaaZY:ci^i^Zh6ccjVaGZedgi'%%+ ) 8JGG:CIEGD:8IH8JGG:CI6HD;&*H:EI:B7:G'%%+ J>;M;IJH7B?7DÅ-.J;HH79;HE7:";7IJF;HJ> 7F7HJC;DJI I7B;IJE:7J; 96 – 2 and 3 bedroom $79,720,000 9ECC;H9?7B 7FFHEN?C7J;;D:L7BK; 2 $79,820,000 7L;H7=;I7B;FH?9;JE:7J; 9ECFB;J?ED:7J; $812,577 Completed IEB: FHE@;9J9ECF7DO 99% 78 Terrace Road Joint Venture Pty Ltd 7HKCI7CF>?H;Å'''+J7DKD:7:H?L;"H?L;HL7B;  7F7HJC;DJI I7B;IJE:7J; 93 – 2 and 3 bedroom $27,715,000 9ECC;H9?7B 7FFHEN?C7J;;D:L7BK; 4 $28,100,000 7L;H7=;I7B;FH?9;JE:7J; 9ECFB;J?ED:7J; $288,698 Completed IEB: FHE@;9J9ECF7DO 99% Rivervale Concepts Pty Ltd * 8JGG:CIEGD:8IH8JGG:CI6HD;&*H:EI:B7:G'%%+ 7BJ7?HÅ')(J;HH79;HE7:";7IJF;HJ> 7F7HJC;DJI I7B;IJE:7J; 120 – 1, 2 and 3 bedroom $81,059,166 9ECC;H9?7B 7FFHEN?C7J;;D:L7BK; 3 $81,059,166 7L;H7=;I7B;FH?9;JE:7J; ;IJ?C7J;:9ECFB;J?ED:7J; $659,018 March Quarter 2007 IEB: FHE@;9J9ECF7DO 100% 132 Terrace Road Joint Venture Pty Ltd ED;(.Å'(.7:;B7?:;J;HH79;";7IJF;HJ> 7F7HJC;DJI I7B;IJE:7J; 103 – 1, 2 and 3 bedroom $33,430,550 9ECC;H9?7B 7FFHEN?C7J;;D:L7BK; 1 $33,430,550 7L;H7=;I7B;FH?9;JE:7J; ;IJ?C7J;:9ECFB;J?ED:7J; $321,448 December Quarter 2006 IEB: FHE@;9J9ECF7DO 100% 175 Hay Street Joint Venture Pty Ltd ;^cWVg>ciZgcVi^dcVaA^b^iZYVcY^ih8dcigdaaZY:ci^i^Zh6ccjVaGZedgi'%%+ ;^cWVg>ciZgcVi^dcVaA^b^iZYVcY^ih8dcigdaaZY:ci^i^Zh6ccjVaGZedgi'%%+ + 8JGG:CIEGD:8IH8JGG:CI6HD;&*H:EI:B7:G'%%+ 7L;D7Å'.J7DKD:7:H?L;"H?L;HL7B; 7F7HJC;DJI I7B;IJE:7J; 76 $43,510,000 9ECC;H9?7B 7FFHEN?C7J;;D:L7BK; 0 $43,510,000 7L;H7=;I7B;FH?9;JE:7J; ;IJ?C7J;:9ECFB;J?ED:7J; $572,500 March Quarter 2007 IEB: FHE@;9J9ECF7DO 100% Rivervale Concepts Pty Ltd IE>EÅ'..7:;B7?:;J;HH79;";7IJF;HJ> 7F7HJC;DJI I7B;IJE:7J; 78 – 1, 2 and 3 bedroom $26,236,000 9ECC;H9?7B 7FFHEN?C7J;;D:L7BK; 2 $26,236,000 7L;H7=;I7B;FH?9;JE:7J; ;IJ?C7J;:9ECFB;J?ED:7J; $327,950 June Quarter 2007 IEB: FHE@;9J9ECF7DO 100% 188 Adelaide Terrace Joint Venture Pty Ltd , 8JGG:CIEGD:8IH8JGG:CI6HD;&*H:EI:B7:G'%%+ :;BC7HÅ)J>;F7BB7:?E"C7D:KH7>E9;7DC7H?D7 7F7HJC;DJI I7B;IJE:7J; 49 – 1, 2 and 3 bedroom $28,480,000 9ECC;H9?7B 7FFHEN?C7J;;D:L7BK; 0 $28,480,000 7L;H7=;I7B;FH?9;JE:7J; ;IJ?C7J;:9ECFB;J?ED:7J; $581,224 September Quarter 2007 IEB: FHE@;9J9ECF7DO 100% Finbar International Limited IEBÅ'/97HHIJH;;J"M;IJF;HJ> 7F7HJC;DJI I7B;IJE:7J; 60 – 2 and 3 bedroom $22,450,000 9ECC;H9?7B 7FFHEN?C7J;;D:L7BK; 0 $22,450,000 7L;H7=;I7B;FH?9;JE:7J; ;IJ?C7J;:9ECFB;J?ED:7J; $374,167 June Quarter 2007 IEB: FHE@;9J9ECF7DO 100% 17-19 Carr Street Pty Ltd ;^cWVg>ciZgcVi^dcVaA^b^iZYVcY^ih8dcigdaaZY:ci^i^Zh6ccjVaGZedgi'%%+ ;^cWVg>ciZgcVi^dcVaA^b^iZYVcY^ih8dcigdaaZY:ci^i^Zh6ccjVaGZedgi'%%+ - 8JGG:CIEGD:8IH8JGG:CI6HD;&*H:EI:B7:G'%%+ ?D<?D?JOÅ')'7:;B7?:;J;HH79;";7IJF;HJ> 7F7HJC;DJI I7B;IJE:7J; 109 – 1, 2 and 3 bedroom $42,490,000 9ECC;H9?7B 7FFHEN?C7J;;D:L7BK; 2 $42,490,000 7L;H7=;I7B;FH?9;JE:7J; ;IJ?C7J;:9ECFB;J?ED:7J; $382,793 September Quarter 2007 IEB: FHE@;9J9ECF7DO 100% 135 Adelaide Terrace Developments Pty Ltd 9;H;I7Å'(J7DKD:7:H?L;"H?L;HL7B; 7F7HJC;DJI I7B;IJE:7J; 113 – 2 and 3 bedroom $65,215,000 9ECC;H9?7B 7FFHEN?C7J;;D:L7BK; 0 $65,215,000 7L;H7=;I7B;FH?9;JE:7J; ;IJ?C7J;:9ECFB;J?ED:7J; $577,124 December Quarter 2007 IEB: FHE@;9J9ECF7DO 100% Rivervale Concepts Pty Ltd . 8JGG:CIEGD:8IH8JGG:CI6HD;&*H:EI:B7:G'%%+ H;<B;9J?EDIÅ/.'&&J;HH79;HE7:";7IJF;HJ> 7F7HJC;DJI I7B;IJE:7J; 138 – 2 and 3 bedroom $118,746,818 9ECC;H9?7B 7FFHEN?C7J;;D:L7BK; 4 $118,746,818 7L;H7=;I7B;FH?9;JE:7J; ;IJ?C7J;:9ECFB;J?ED:7J; $836,245 March Quarter 2009 IEB: FHE@;9J9ECF7DO 100% Burt Way Developments Pty Ltd :ECKIÅ)-+>7OIJH;;J";7IJF;HJ> 7F7HJC;DJI I7B;IJE:7J; 80 – 1 and 2 bedroom $32,345,000 9ECC;H9?7B 7FFHEN?C7J;;D:L7BK; 1 $32,345,000 7L;H7=;I7B;FH?9;JE:7J; ;IJ?C7J;:9ECFB;J?ED:7J; $399,321 March Quarter 2008 IEB: FHE@;9J9ECF7DO 100% 375 Hay Street Pty Ltd ;^cWVg>ciZgcVi^dcVaA^b^iZYVcY^ih8dcigdaaZY:ci^i^Zh6ccjVaGZedgi'%%+ ;^cWVg>ciZgcVi^dcVaA^b^iZYVcY^ih8dcigdaaZY:ci^i^Zh6ccjVaGZedgi'%%+ &% ;JIJG:EGD:8IH8JGG:CI6HD;&*H:EI:B7:G'%%+ HEO7B;Å),/>7OIJH;;J";7IJF;HJ> 7F7HJC;DJI I7B;IJE:7J; 193 – 1, 2 and 3 bedroom $62,705,000 9ECC;H9?7B 7FFHEN?C7J;;D:L7BK; 4 $96,057,000 7L;H7=;I7B;FH?9;JE:7J; ;IJ?C7J;:9ECFB;J?ED:7J; $471,466 March Quarter 2009 IEB: FHE@;9J9ECF7DO 68% 375 Hay Street Pty Ltd M>7JB;O9H;I9;DJ#C7OB7D:I 7FFHEN?C7J; 7FFHEN?C7J;;D:L7BK; 7F7HJC;DJI $55,000,000 131 7FFHEN?C7J; ;IJ?C7J;:9ECFB;J?ED:7J; 9ECC;H9?7B Stage 1 – December Quarter 2008 0 Stage 2 – September Quarter 2009 FHE@;9J9ECF7DO Lot 1 to 10 Whatley Crescent Pty Ltd GUILDFORD ROAD ELEVATION WHATLEY CRESCENT ELEVATION && ;JIJG:EGD:8IH8JGG:CI6HD;&*H:EI:B7:G'%%+ BEJ(&-)&'B7A;IJH;;J#DEHJ>8H?:=; 7FFHEN?C7J; 7FFHEN?C7J;;D:L7BK; 7F7HJC;DJI $18,500,000 31 – 2 and 3 bedroom 7FFHEN?C7J; ;IJ?C7J;:9ECFB;J?ED:7J; 9ECC;H9?7B March Quarter 2008 6 FHE@;9J9ECF7DO Lake Street Pty Ltd -&'M;BB?D=JEDIJH;;JÅM;IJF;HJ> 7FFHEN?C7J; 7FFHEN?C7J;;D:L7BK; 7F7HJC;DJI $55,455,000 110 7FFHEN?C7J; ;IJ?C7J;:9ECFB;J?ED:7J; 9ECC;H9?7B September Quarter 2008 3 FHE@;9J9ECF7DO 701 Wellington Street Pty Ltd ;^cWVg>ciZgcVi^dcVaA^b^iZYVcY^ih8dcigdaaZY:ci^i^Zh6ccjVaGZedgi'%%+ 207 LAKE STREET 301 LAKE STREET ;^cWVg>ciZgcVi^dcVaA^b^iZYVcY^ih8dcigdaaZY:ci^i^Zh6ccjVaGZedgi'%%+ &' ;JIJG:EGD:8IH8JGG:CI6HD;&*H:EI:B7:G'%%+ <7?HB7D;IÅ'-+7:;B7?:;J;HH79;";7IJF;HJ> 7FFHEN?C7J; 7FFHEN?C7J;;D:L7BK; 7F7HJC;DJI $80,000,000 192 7FFHEN?C7J; ;IJ?C7J;:9ECFB;J?ED:7J; 9ECC;H9?7B September Quarter 2009 4 FHE@;9J9ECF7DO 175 Adelaide Terrace Pty Ltd DKJH?C;J?9IÅ+/7B87DO>?=>M7O"L?9JEH?7F7HA 7FFHEN?C7J; 7FFHEN?C7J;;D:L7BK; 7F7HJC;DJI $60,000,000 75 7FFHEN?C7J; ;IJ?C7J;:9ECFB;J?ED:7J; 9ECC;H9?7B Stage 1 – June Quarter 2009 119 Stage 2 – September Quarter 2009 FHE@;9J9ECF7DO 59 Albany Highway Pty Ltd ;>C76G>CI:GC6I>DC6AA>B>I:96C9>IH8DCIGDAA:9:CI>I>:H 67C.,%%.&&(),( 68C%%.&&(),( ;>C6C8>6AG:EDGI ;dgi]ZnZVgZcYZY(%i]?jcZ'%%+ Directors’ Report (including corporate governance statement) 14 Income Statements 32 Statements of Changes in Equity 33 Balance Sheets 34 Statements of Cash Flows 35 Notes to the Consolidated Financial Statements 36 Directors’ Declaration 77 Audit Report 78 Lead Auditors’ Independence Declaration 79 ASX Additional Information 80 8DCI:CIH &( ;^cWVg>ciZgcVi^dcVaA^b^iZYVcY^ih8dcigdaaZY:ci^i^Zh6ccjVaGZedgi'%%+ Directors’ Report For the Year Ended 30 June 2006 14 The Directors present their report together with the financial report of Finbar International Limited (‘the Company’) and of the consolidated entity, being the Company and its Controlled Entities, for the financial year ended 30 June 2006 and the audit report thereon. Contents of Directors’ Report 1 Directors 15 2 Company Secretary 15 3 Directors’ Meetings 16 4 Corporate Governance Statement 16 4.1 Board of Directors 16 4.2 Remuneration Report 18 4.2.1 Principles of Remuneration - Audited 18 4.2.2 Directors and Executive Officers’ Remuneration - Audited 20 4.2.3 Equity Instruments - Audited 22 4.2.3.1 Options and Rights over Equity Instruments Granted as Remuneration 22 4.2.3.2 Modifications of Terms of Equity-settled Share-based Payment Transactions 22 4.2.3.3 Exercise of Options Granted as Remuneration 23 4.3 Audit Committee 23 4.4 Risk Management 24 4.5 Ethical Standards 25 4.6 Communication with Shareholders 26 5 Principal Activities 27 6 Operating and Financial Review 27 7 Dividends 28 8 Events Subsequent to Reporting Date 29 9 Likely Developments 29 10 Directors’ Interests 29 11 Indemnification and Insurance of Officers 30 12 Non-audit Services 30 13 Lead Auditor’s Independence Declaration 31 Finbar International Limited and its Controlled Entities Annual Report 2006 ;^cWVg>ciZgcVi^dcVaA^b^iZYVcY^ih8dcigdaaZY:ci^i^Zh6ccjVaGZedgi'%%+ 9>G:8IDGHÉG:EDGI ;dgi]ZNZVg:cYZY(%?jcZ'%%+ &* 1 Directors The Directors of the Company at any time during or since the end of the financial period are: Non Executive (Independent) Director Paul Anthony RENGEL (Chairperson) Director and Chairperson since 22 May 1992 Age: 65 Mr Rengel joined the Board in 1992 and has a Bachelor of Commerce degree from the University of Western Australia. Mr Rengel is a Fellow of the Australian Institute of Chartered Accountants, and is an associate of the Australian Institute of Company Directors and the Australian Institute of Management. Mr Rengel is a partner of Moore Stephens BG Chartered Accountants and has 33 years experience in public practice in international firms. Mr Rengel was a Director of the listed company Computronics Holdings Limited in the last three years. Non Executive Director John Boon Heng CHEAK Director since 28 April 1993 Age: 63 Joining the Board in 1993, Mr Cheak has a Bachelor of Economics degree from the University of Western Australia. Mr Cheak is also a Director of Zicom Group Limited, CH Offshore Limited (Singapore) and Scomi Marine Bhd (Malaysia). The other listed companies of which Mr Cheak has been a Director in the last three years include Environmental Solutions International Limited and Chuan Hup Holdings Limited (Singapore). Non Executive Director Kee Kong LOH Director since 28 April 1993 Age: 54 Joining the Board in 1993, Mr Loh has a degree in accountancy from the University of Singapore and is a member of the Institute of Certified Public Accountants of Singapore. Mr Loh is also a Director of Cedar Woods Properties Limited and PCI Limited (Singapore). The other companies of which Mr Loh has been a director in the last three years are PT Rig Tenders Tbk, Chuan Hup Holdings Limited (Singapore) and CH Offshore Limited (Singapore). Executive Director John CHAN (Managing Director) Director and Managing Director since 27 April 1995 Age: 58 Joining the Board in 1995, Mr Chan has a Bachelor of Science degree from Monash University and a Master of Business Administration degree from the University of Queensland. Mr Chan has vast experience as a Director in public companies in the areas of trading, manufacturing, finance and property development both in Australia and overseas. Mr Chan is also a Director of Finbar’s controlled and jointly controlled entities. Executive Director Richard Dean RIMINGTON Director since 27 April 1995 Age: 46 Joining the Board in 1995, Mr Rimington is a property developer with 21 years experience in land subdivision, development construction, and marketing experience in medium to high density residential housing. Mr Rimington is responsible for the project management and site identification of Company projects. Mr Rimington is also a Director of Finbar’s controlled and jointly controlled entities. 2 Company Secretary Darren John PATEMAN Company Secretary since 28 February 1996 Age: 37 Mr Pateman joined the Company as Administrator in 1995 and was appointed Company Secretary in 1996. Coming from a background of real estate, Mr Pateman was appointed General Manager in 2003 and Chief Executive Officer in 2006. Mr Pateman is also the Company Secretary of Finbar’s controlled and jointly controlled entities. ;^cWVg>ciZgcVi^dcVaA^b^iZYVcY^ih8dcigdaaZY:ci^i^Zh6ccjVaGZedgi'%%+ 9>G:8IDGHÉG:EDGI ;dgi]ZNZVg:cYZY(%?jcZ'%%+ &+ 3 Directors’ Meetings The number of Directors’ meetings attended by each of the Directors of the Company during the financial year are: Director Board Meetings Held Board Meetings Attended Paul Anthony RENGEL 3 2 John Boon CHEAK 3 1 Kee Kong LOH 3 3 John CHAN 3 3 Richard Dean RIMINGTON 3 3 4 Corporate Governance Statement This statement outlines the main Corporate Governance practices that were in place throughout the financial period, which comply with ASX Corporate Governance Council recommendations, unless otherwise stated. 4.1 Board of Directors Role of the Board The Board’s primary role is the protection and enhancement of long-term shareholder value. To fulfil this role, the Board is responsible for the overall corporate governance of the consolidated entity including formulating its strategic direction, approving and monitoring capital expenditure, setting remuneration, appointing, removing and creating succession policies for Directors and Senior Executives, establishing and monitoring the achievement of management’s goals and ensuring the integrity of internal control and management information systems. The Board is also responsible for approving and monitoring financial and other reporting. The Board has delegated responsibility for operation and administration of the Company to the Managing Director and executive management. Board Processes The Company is not currently considered to be of the size, nor are its affairs of such complexity to justify the establishment of separate committees, or a formal Board charter or a code of conduct. Accordingly, all matters which may be capable of delegation to a committee are dealt with by the full Board. In addition to Board meetings, the Board communicate regularly and attend to the majority of the governance matters via circular resolution. The agenda for meetings is prepared in conjunction with the Chairperson, Managing Director and Company Secretary. Standing items include the Managing Director’s report, financial reports, strategic matters, governance and compliance. Submissions are circulated in advance. Executives are regularly involved in Board discussions. Director Education Directors have the opportunity to visit consolidated entity facilities and meet with management to gain a better understanding of business operations. Directors are given access to continuing education opportunities to update and enhance their skills and knowledge. Independent Professional Advice and Access to Company Information Each Director has the right of access to all relevant Company information and to the Company’s executives and, subject to prior consultation with the Chairperson, may seek independent professional advice from a suitably qualified adviser at the consolidated entity’s expense. The Director must consult with an advisor suitably qualified in the relevant field, and obtain the Chairperson’s approval of the fee payable for the advice before proceeding with the consultation. A copy of the advice received by the Director is made available to all other members of the Board. ;^cWVg>ciZgcVi^dcVaA^b^iZYVcY^ih8dcigdaaZY:ci^i^Zh6ccjVaGZedgi'%%+ ;^cWVg>ciZgcVi^dcVaA^b^iZYVcY^ih8dcigdaaZY:ci^i^Zh6ccjVaGZedgi'%%+ 9>G:8IDGHÉG:EDGI ;dgi]ZNZVg:cYZY(%?jcZ'%%+ &, Composition of Board The names of the Directors of the Company in office at the date of this report are set out in the Directors’ report on Page 15 of this report. The composition of the Board is determined using the following principles: · The Board shall comprise Directors with a range of expertise encompassing the current and proposed activities of the Company; · Have a Non Executive Independent Director as Chairperson; · Where a vacancy is considered to exist, the Board selects an appropriate candidate through consultation with external parties and consideration of the needs of shareholders and the Company. Such appointments are referred to shareholders at the next opportunity for re-election in the general meeting; · New Directors are provided the opportunity to meet with management and familiarise themselves with the business operations of the Company; · The procedures for the election and retirement of Directors are governed by the Company’s constitution and the listing Rules of the Australian Stock Exchange Limited (ASX). An Independent Director is a Director who is not a member of management (a Non Executive Director) and who: · Holds less than five percent of the voting shares of the Company and is not an officer of, or otherwise associated, directly or indirectly, with a shareholder of more than five per cent of the voting shares of the Company; · Has not within the last three years been employed in an executive capacity by the Company or another group member, or been a Director after ceasing to hold any such employment; · Within the last three years has not been a principal or employee of a material* professional adviser or a material* consultant to the Company or another group member; · Is not a material* supplier or customer of the Company, or another group member, or an officer of or otherwise associated directly or indirectly with a material* supplier or customer; · Has no material* contractual relationship with the Company or another group member other than as a Director of the Company; · Is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially* interfere with the Director’s ability to act in the best interests of the Company. * The Board considers, ‘material’, in this context, to be where any Director-related business relationship has represented, or is likely in the future to represent the lessor of at least five per cent of the relevant Director-related business’ revenue. The Board considered the nature of the relevant industries’ competition and the size and nature of each Director-related business relationship, in arriving at this threshold. The Board currently consists of one Independent Director and four Non Independent Directors. The Company does not have a nomination or remuneration committee as the Company is not currently considered to be of the size nor have the shareholder spread to warrant the appointment of additional Independent Directors. The Company Chairman is a Non Executive Independent Director who holds this position in the interests of minority shareholders. ;^cWVg>ciZgcVi^dcVaA^b^iZYVcY^ih8dcigdaaZY:ci^i^Zh6ccjVaGZedgi'%%+ 9>G:8IDGHÉG:EDGI ;dgi]ZNZVg:cYZY(%?jcZ'%%+ &- 4 Corporate Governance Statement (Continued) 4.2 Remuneration Report 4.2.1 Principles of Remuneration - Audited Remuneration is referred to as remuneration throughout this report. Key management personnel have authority and responsibility for planning, directing and controlling the activities of the Company and the consolidated entity. Key management personnel includes the Section 300A Directors and executives for the Company and the consolidated entity. Remuneration levels for key management personnel and secretaries of the Company, and relevant key management personnel of the consolidated entity are competitively set to attract and retain appropriately qualified and experienced directors and executives. The Board obtains independent advice on the appropriateness of remuneration packages of both the Company and consolidated group given trends in comparative companies both locally and internationally and the objectives of the Company’s remuneration strategy. The remuneration structures explained below are designed to attract suitably qualified candidates, reward the achievement of strategic objectives, and achieve the broader outcome of creation of value for shareholders. The remuneration structures take into account: · the capability and experience of the key management personnel; · the key management personnel’s ability to control the consolidated entity performance; · the consolidated entity’s performance including: - the consolidated entity’s earnings; - the growth in share price and delivering constant returns on shareholder wealth; · the amount of incentives within each key management person’s remuneration. Remuneration packages include a mix of fixed remuneration and long-term performance-based incentives. Fixed Remuneration Fixed remuneration consists of base remuneration (which is calculated on a total cost basis and includes any FBT charges related to employee benefits including motor vehicles), as well as employer contributions to superannuation funds. Remuneration levels are reviewed annually through a process that considers individual and overall performance of the consolidated entity. In addition external consultants provide analysis and advice to ensure the Directors’ and Senior Executives’ remuneration is competitive in the market place. Performance Linked Remuneration Performance linked remuneration includes long-term incentives and is designed to reward key management personnel for meeting or exceeding their financial and personal objectives. The long-term incentive (LTI) is provided as options over ordinary shares of the Company under the rules of the Executive Option Plan 2003