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SCHEDULE 14A INFORMATION
Securities Exchange Act of 1934
(Amendment No. 3)
Filed by a Party other than the Registranto
þ | Preliminary Proxy Statement |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
o | Definitive Proxy Statement |
o | Definitive Additional Materials |
o | Soliciting Material Pursuant to §240.14a-12 |
o | No fee required. | |
þ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
1) | Title of each class of securities to which transaction applies: |
2) | Aggregate number of securities to which transaction applies: |
3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
4) | Proposed maximum aggregate value of transaction: $90,400,000 |
5) | Total fee paid: $ 9,672.80 |
þ | Fee paid previously with preliminary materials. | |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
1) | Amount Previously Paid: |
2) | Form, Schedule or Registration Statement No.: |
3) | Filing Party: |
4) | Date Filed: |
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260 South Los Robles, Suite 217
Pasadena, California 91101
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260 South Los Robles, Suite 217
Pasadena, California 91101
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 21, 2007
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Pasadena, California 91101
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• | Pursuant to an acquisition agreement, General Finance Corporation (referred to below as “we” or “our”) will acquire RWA Holdings Pty Limited and its subsidiaries (collectively referred to as “Royal Wolf”). For more information about the acquisition, see the section entitled “The Acquisition Agreement” beginning on page 48 and the acquisition agreement, as amended (referred to in Australia as a share sale deed), that is attached as ANNEX A to this proxy statement. |
• | At the special meeting of stockholders to be held on March 21, 2007, you will be asked to approve the acquisition. For more information about the special meeting, see the section entitled “The Special Meeting” beginning on page 28. |
• | We are a special-purpose acquisition company organized under the laws of Delaware on October 14, 2005. We were formed to effect an acquisition, capital stock exchange, asset acquisition or other similar business combination with an operating business. For more information about us, see the section entitled “Other Information About Us” beginning on page 65. |
• | Royal Wolf is an Australian company that leases and sells portable storage containers, portable container buildings and freight containers in Australia. Based upon its own internal analysis, Royal Wolf’s management believes Royal Wolf is the market leader in Australia for container-based storage and accommodation products. For more information about Royal Wolf, see the sections entitled “Unaudited Pro Forma Condensed Combined Financial Statements,” “Information About Royal Wolf,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Royal Wolf” beginning on pages 55, 69, and 79, respectively. Also see Royal Wolf’s financial statements beginning onpage F-2. |
• | At the closing of the acquisition, we will purchase all of the outstanding shares of Royal Wolf from its shareholders in exchange for aggregate consideration of $90.4 million, which amount is subject to adjustment in accordance with the terms of the acquisition agreement. Of this aggregate consideration, we will pay the shareholders of Royal Wolf at the closing cash in the amount of $86.5 million, subject to various consideration adjustments specified in the acquisition agreement, and less the net debt (as defined) of Royal Wolf as of the closing of the acquisition. The remaining $3.9 million of consideration will consist of $1.6 million shares of our common stock to be issued at the closing to one of the shareholders and a total of $2.3 million payable in cash in two equal installments on the first and second anniversaries of the closing for a non-competition covenant from the sellers. We have paid the shareholders of RWA deposits of $1,005,000. If the closing occurs, the deposits will be applied to reduce the cash portion of the consideration payable by us at the closing. If the closing does not occur, the deposits are refundable to us only in certain limited circumstances. For more information about the acquisition consideration, see the section entitled “The Acquisition Agreement — Acquisition Consideration; Payment of Consideration” beginning on page 48. |
• | At the closing, $5.5 million of the cash consideration payable by us to the sellers will be deposited in a separate bank account requiring signatures of us and the sellers for withdrawals. The purpose of this account is to provide a source of funds to pay the sellers’ indemnification obligations. The acquisition agreement provides that 25% of these funds will be released to the sellers 12 months after the closing and the balance will be released to the sellers 18 months from the closing. In addition, the shares of our common stock issued to one of the sellers is intended to serve a source of repayment for indemnity claims, and will be subject to restrictions on transfer for similar 12-month and 18-month periods. For more information about these escrow provisions and transfer restrictions, see the section entitled “The Acquisition Agreement — Indemnification and Escrow Provisions” beginning on page 51. |
• | After we complete the acquisition of Royal Wolf, our management and board of directors will continue as before the acquisition. Royal Wolf also will continue to be managed largely by its existing officers. For more |
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information about management, see the section entitled “Directors and Management Following the Acquisition” on page 93. |
• | Our management considered various factors in determining to acquire Royal Wolf and to sign the acquisition agreement. For more information about our management’s decision-making process, see the section entitled “Consideration of the Acquisition” beginning on page 33. |
• | Our acquisition of Royal Wolf involves numerous risks. For more information about these risks, see the section entitled “Risk Factors” beginning on page 19. |
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AND THE SPECIAL MEETING
Q. | Why am I receiving this proxy statement? | |
A. | We have agreed to acquire RWA in a “business combination” within the meaning of our certificate of incorporation. Under our certificate of incorporation, the acquisition must be approved by our stockholders, which is the purpose of the special meeting. This proxy statement contains important information about the acquisition and the special meeting of our stockholders. | |
Q. | What vote is required in order to approve the acquisition? | |
A. | Under our certificate of incorporation, we can complete the acquisition only if it is approved by the affirmative vote of the holders of a majority of the shares of our common stock present and entitled to vote with respect to the acquisition, as well as the holders of a majority of the shares of our common stock that were originally issued in our initial public offering, or IPO, that are voted with respect to the acquisition. Notwithstanding these approvals, our certificate of incorporation provides that we cannot complete the acquisition if the holders of 20% or more of our IPO shares (1,725,000 or more shares) vote against it and demand that their shares be converted into a pro rata portion of the net proceeds of our IPO presently held in the trust account established for this purpose at the time of our IPO. These rights of holders of our IPO shares to vote against the acquisition and demand conversion of their shares are referred to in this proxy statement as “conversion rights” and described elsewhere in this proxy statement. If the acquisition is completed, the foregoing provisions of our certificate of incorporation will no longer apply. |
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Q. | Are we being asked to consider any other matter? | |
A. | Yes. We are asking our stockholders to grant our board of directors discretionary authority to adjourn the special meeting to solicit additional votes for approval of the acquisition in the event that there are insufficient votes for its approval present at the special meeting. | |
Q. | What will happen in the proposed acquisition? | |
A. | GFN Australasia will acquire from the sellers all of the outstanding shares of RWA, and we will own and carry on Royal Wolf’s existing business and operations following the acquisition. | |
Q. | What is the consideration for the Royal Wolf acquisition? |
A. | The aggregate consideration for the acquisition is $90.4 million, but will be reduced by the costs and expenses incurred by Royal Wolf in connection with any acquisition completed prior to the closing and will be subject to adjustments based upon to the levels of Royal Wolf’s working capital, net tangible assets and container rental equipment and outstanding obligations under a certain container lease program as of the closing of the acquisition compared to agreed upon levels specified in the acquisition agreement. The aggregate consideration will increase by $586,000 if this preliminary proxy statement has not been cleared by the Securities and Exchange Commission by February 26, 2007. We refer to the foregoing closing adjustments and possible increases in the aggregate consideration as the “consideration adjustments.” |
Of the aggregate consideration in the acquisition, we will pay the sellers at the closing cash in the amount of $86.5 million, as adjusted by the consideration adjustments, less the net debt of Royal Wolf as of the closing of the acquisition. Net debt for these purposes includes, among other items of indebtedness, obligations under finance leases, dividends and distributions paid by Royal Wolf after the date of the acquisition agreement, any deferred purchase price and future payment obligations under any acquisition agreements, amounts paid by Royal Wolf to eliminate outstanding stock options, and transaction expenses of the sellers paid by Royal Wolf. Royal Wolf has not acquired any business or operations since the date of the acquisition agreement, and we do not expect it to do so prior to the closing of the acquisition. Based upon the net debt of Royal Wolf as of September 30, 2006, and as adjusted by the consideration adjustments relating to working capital and net tangible assets as of September 30, 2006, we estimate that the cash payable by us will be approximately $42.2 million. The actual cash payable at the closing will be different. The remaining $3.9 million of consideration will consist of $1.6 million of shares of our common stock to be issued at the closing to one of the sellers and a total of $2.3 million payable in cash in two equal installments on the first and second anniversaries of the closing for a non-compete covenant from the sellers. Our shares of common stock will be valued for this purpose based upon the average of the closing sale prices of our common stock as reported on the American Stock Exchange during the 20 trading days ending two days prior to the closing of the acquisition. Based upon the $7.60 closing sale price of our common stock as reported on the American Stock Exchange on January 12, 2007, we would issue approximately 210,000 shares at the closing. |
Q. | Is any financing necessary to fund the total consideration payable under the acquisition agreement? |
A. | No. Assuming the acquisition had been completed as of September 30, 2006, the cash consideration payable to the sellers would have been approximately $45.4 million, without regard to any consideration adjustments, and we believe that the funds held in the trust account established at the time of our IPO will be sufficient to pay the cash portion of the consideration payable at the closing. We may refinance the existing indebtedness of Royal Wolf and seek to obtain additional debt or equity financing for growth in connection with the acquisition of Royal Wolf, Any such additional financing also may be used to acquire other businesses or assets in pursuit of our business plan disclosed in our IPO prospectus of identifying, acquiring and consolidating under our holding company additional specialty finance businesses in the U.S., Europe and Asia. We do not yet have any binding commitments for such refinancing or additional financing or any present understandings, arrangements or commitments regarding any other acquisition. |
Q. | Is the consideration subject to change? | |
A. | Yes. The actual total consideration for the acquisition will depend upon the consideration adjustments. The cash portion of the consideration will also change based upon the consideration adjustments and the net debt of Royal Wolf as of the closing of the acquisition. |
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In addition, the financial terms and provisions of the acquisition agreement are denominated in Australian dollars, which, for convenience, have been converted throughout the text of this proxy statement into U.S. dollars based upon the currency exchange rate in effect on January 12, 2007 of 0.7812 U.S. dollar for one Australian dollar. The currency exchange rate in effect as of the closing of the acquisition may differ. | ||
Q. | Why are you proposing the acquisition? | |
A. | We were organized to effect an acquisition, capital stock exchange, asset acquisition or other similar business combination with an operating business. Although we were not limited to a particular industry, we stated our intention to focus our efforts on the specialty finance industry and in areas where our management has significant expertise. Royal Wolf is a leading specialty finance company in Australia that we believe has a strong and deep management team and is well-positioned for significant growth domestically in Australia. We also believe Royal Wolf can serve as a both a rental services platform for expansion throughout the Asia-Pacific region and potentially the core management team for the global container rental/leasing segment of our business. The acquisition of RWA will provide us and our stockholders the opportunity to own and operate Royal Wolf and expand upon its existing business and operations. | |
Q. | Are there risks involved in the acquisition? | |
A. | Yes. There are risks related to the acquisition, including the following: | |
• Our working capital will be reduced to the extent our stockholders exercise their conversion rights, which would reduce our cash reserves after the acquisition. | ||
• Our current directors and executive officers own shares of common stock and have interests in the acquisition that are different from yours, and if the acquisition is not approved, the shares of common stock acquired by them prior to our IPO may become worthless. | ||
• The aggregate consideration for the acquisition will increase if the value of the U.S. dollar compared to the Australian dollar decreases before the closing due to currency exchange rate fluctuations. | ||
• If we do not complete our acquisition, we may not be successful in identifying another suitable business combination, in which case we may be forced to liquidate. In a liquidation, our stockholders will receive less than $8.00 per share for their shares of our common stock and their warrants to purchase our common stock will become worthless. | ||
• The market price of our common stock will depend upon the operations of Royal Wolf and may, as a result, be highly volatile and subject to wide fluctuations. | ||
• Our failure to complete the acquisition could negatively impact the market price of our common stock and may make it more difficult for us to attract another acquisition candidate. | ||
• The proposed acquisition of Royal Wolf may result in additional Sarbanes-Oxley Act of 2002 costs, issues and control procedures of our combined reporting company. | ||
• We may have difficulty establishing adequate management, legal and financial controls over Royal Wolf. | ||
• With some exceptions, we have not yet established the compensation that will be payable to our directors and executive officers following the acquisition, and our stockholders will not have this information in deciding how to vote their shares with respect to the acquisition. | ||
Following the acquisition, we will be subject to all of the risks related to ownership of Royal Wolf’s business and operations, including the following: | ||
• General or localized economic downturns or weakness may adversely affect Royal Wolf’s customers, which may cause the demand for Royal Wolf’s products and services to decline and therefore harm our future revenues and results of operations. | ||
• Royal Wolf faces significant competition. If Royal Wolf is unable to compete successfully, it could lose customers and our future revenues and results of operations could be adversely affected. |
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• Royal Wolf has depended to a large extent on the sales of its containers, which sales may fluctuate significantly in the future. | ||
• Royal Wolf’s leasing revenues, which constitute approximately one-quarter of its total revenues, depend upon Royal Wolf’s ability to re-lease containers. The failure of Royal Wolf to effectively and quickly re-lease containers could materially and adversely affect our future results of operations. | ||
• Governmental regulations could impose substantial costs or restrictions on Royal Wolf’s operations that could harm our future results of operations. | ||
• We may not be able to effectively implement our growth strategy for Royal Wolf by identifying or completing transactions with attractive acquisition candidates, which could impair our growth. | ||
• Our failure to retain key Royal Wolf personnel could adversely affect our operations and could impede our ability to execute our business plan and growth strategy. | ||
• Any failure of Royal Wolf’s management information systems could disrupt our business and result in decreased rental or sale revenues and increased overhead costs. | ||
• Significant increases in Royal Wolf’s raw material costs could increase our operating costs and adversely affect our results of operations. | ||
• The failure of Royal Wolf’s Chinese manufacturers to sell and deliver products to Royal Wolf in timely fashion may harm our reputation and our financial condition. | ||
• Royal Wolf’s growth plan includes a possible expansion into markets outside of Australia, including in the Asia-Pacific, which may not prove successful. | ||
• Royal Wolf’s planned growth may strain our management resources, which could disrupt the development of new products and new applications of Royal Wolf’s existing products and Royal Wolf’s customer service centers and other facilities. | ||
• We may need additional debt or equity financing to sustain Royal Wolf’s growth, but have no commitments or arrangements to obtain such financing. | ||
Q. | Does the board of directors of General Finance Corporation recommend voting for the acquisition? |
A. | Yes. After careful consideration of the business and operations of Royal Wolf and the terms and provisions of the acquisition agreement, our board of directors has unanimously approved the acquisition of RWA and determined that it is in the best interests of us and our stockholders. Our board of directors also believes that the acquisition is fair to us and our stockholders. No fairness opinion was sought or obtained by our board of directors in making its determinations. Our board of directors unanimously recommends that our stockholders vote “FOR” approval of the acquisition. |
Q. | Has General Finance Corporation received a valuation or fairness opinion with respect to the acquisition? |
A. | No. Our board of directors has determined that the fair market value of Royal Wolf exceeds 80% of our net assets, which is one of the requirements of our initial business combination as set forth in the prospectus relating to our IPO. The terms of the acquisition were determined based upon arm’s-length negotiations between us and the sellers, who had no prior dealings with us or our officers or directors. Some of our officers and directors, including Ronald A. Valenta, our Chief Executive Officer and a director, and John O. Johnson, our Chief Operating Officer, have extensive industry and deal-making experience, and obtaining a valuation or fairness opinion is not required under our certificate of incorporation. Under the circumstances, our board of directors believed that the aggregate consideration for the acquisition appropriately reflected Royal Wolf’s fair market value and that obtaining a valuation or fairness opinion was unnecessary. |
Q. | Do the directors and officers of General Finance Corporation have interests in the acquisition that are different from mine? | |
A. | Yes. If the acquisition is not completed and we fail by October 5, 2007 to enter into an agreement in principle or a definitive agreement with respect to another business combination, or having done so we fail to complete the |
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business combination by April 5, 2008, we will be required to liquidate as soon as reasonably practicable. In that event, the shares of our common stock acquired by our officers and directors prior to our IPO for an aggregate purchase price of $250,000 will become worthless, because our officers and directors have waived their rights to receive any liquidation distribution with respect to these shares. As of January 12, 2007, the aggregate market value of the shares of our common stock owned by our officers and directors was $14,250,000. | ||
Ronald F. Valenta, our Chief Executive Officer and a director, and John O. Johnson, our Chief Operating Officer, hold warrants to purchase an aggregate of 1,477,833 shares of our common stock that they acquired for an aggregate purchase price of $1,400,000, which also will become worthless upon our liquidation. As of January 12, 2007, the aggregate market value of these warrants was $1,699,508. | ||
Mr. Valenta has made available to us a line of credit under which we may borrow from him from time to time up to $2,000,000 at an annual interest rate equal to 8%. Our borrowings under the line of credit have been and will continue to be used by us to pay operating expenses, including deposits and expenses relating to the acquisition. At December 31, 2006, the outstanding amount of principal and accrued interest under the line of credit was $1,300,498. We will obtain any additional deposit under the acquisition agreement from borrowings under the line of credit, and we will continue to borrow funds under the line of credit to pay expenses through the closing of the acquisition. If the acquisition is completed, Mr. Valenta will be repaid all outstanding principal and accrued interest under the line of credit. If, on the other hand, the acquisition is not completed and we are required to liquidate as described above, Mr. Valenta will have no recourse against the funds held in the trust account for repayment of any amounts outstanding under the line of credit. |
All of our current officers and directors will continue to serve as such following the acquisition. In addition, Robert Allan, the Chief Executive Officer of Royal Wolf, will be deemed to be one of our executive officers following the acquisition. At present, we do not compensate our officers or directors other than Charles E. Barrantes, our Executive Vice President and Chief Financial Officer, whose employment commenced on September 11, 2006. We will have employment agreements with only Messrs. Barrantes and Allan. Mr. Barrantes receives a base annual salary of $200,000 and is eligible to receive an annual bonus each fiscal year of up to 35% of his base salary, provided that he is employed on the last day of such year. Mr. Allan receives a base annual salary of $234,350 and is eligible to receive an annual performance bonus not to exceed $78,120 based upon the achievement of specified performance indicators. Ronald F. Valenta, our Chief Executive Officer and Secretary, John O. Johnson, our Chief Operating Officer, and Marc Perez, our Controller, are not currently compensated for their services; and both Mr. Valenta and Mr. Johnson have agreed to continue to serve in these capacities without compensation until at least the earliest of June 30, 2008 or such time as Royal Wolf achieves annualized EBITDA of $20 million or we achieve a company-wide total annualized EBITDA of $40 million. If the acquisition is completed, we may compensate our officers and adopt a plan of compensation for directors based upon the advice and recommendations of a Compensation Committee of our board of directors to be established. Except as described above, there are no present commitments or understandings, regarding our future compensation of officers or directors, so our stockholders will not have this information deciding how to vote their shares with respect to the acquisition. |
Q. | What is the legal structure of the acquisition? | |
A. | The acquisition will be accomplished by GFN Australasia’s purchase from the sellers of all of the outstanding shares of RWA under the acquisition agreement. As a result, RWA will become a direct, wholly owned subsidiary of GFN Australasia, and RWA and its subsidiaries will become our indirect subsidiaries. | |
A copy of the acquisition agreement, as amended, which is referred to in Australia as a share sale deed, is attached to this proxy statement as ANNEX A. We encourage you to read the acquisition agreement in its entirety, because it, and not this proxy statement, is the legal contract that governs the acquisition. |
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Q. | Does the acquisition require any change in the certificate of incorporation of General Finance Corporation? | |
A. | No. Our certificate of incorporation need not be amended and will remain in effect, without change, following the acquisition. If the acquisition is completed, however, the provisions of our certificate of incorporation relating to our initial business combination and related matters such as conversion rights will no longer apply. | |
Q. | Are there contractual conditions to completion of the acquisition? | |
A. | Yes. The respective obligations of us and sellers to complete the acquisition are subject to the satisfaction or waiver of a number of conditions. These include, among others, the following: | |
• The approval of the acquisition by our stockholders by March 26, 2007. | ||
• Receipt of written consents from various third parties to Royal Wolf’s contracts. | ||
• No occurrence of events that would have a material adverse effect on Royal Wolf’s assets, liabilities or profitability since June 30, 2006. | ||
• Cancellation of all outstanding options to purchase shares in Royal Wolf. | ||
Q. | Can the acquisition agreement be terminated? | |
A. | Yes. The acquisition agreement can be terminated prior to completion of the acquisition in some circumstances, including the following: | |
• By the sellers if we have not obtained Securities and Exchange Commission clearance of this preliminary proxy statement by February 26, 2007 or the acquisition is not approved by our stockholders by March 26, 2007. | ||
• By any party after March 17, 2007 if any of the other conditions to the closing of the acquisition has not been satisfied and the terminating party has used reasonable efforts to satisfy the conditions. | ||
Q. | Will any finder’s fee be paid in connection with the acquisition? | |
A. | No. | |
Q. | Could payment of termination fees be required? |
A. | No. There is no termination or breakup fee payable in connection with the termination of the acquisition agreement; however, we have paid the sellers deposits of $1,005,000. If the closing occurs, the deposits will be applied to reduce the cash portion of the consideration payable to by us at the closing. If the closing does not occur, the deposits are refundable to us only in certain limited circumstances. |
Q. | Is the acquisition subject to any regulatory requirements? | |
A. | Yes. It is subject to review by the Treasurer of the Commonwealth of Australia, which issued its notice of non-objection to the acquisition on September 29, 2006. The acquisition is not subject to any regulatory approvals in the U.S. | |
Q. | How do the General Finance Corporation insiders intend to vote their shares? | |
A. | Our officers and directors hold shares of our common stock acquired prior to our IPO that represent approximately 17.9% of our outstanding shares. They have agreed to vote these shares with respect to the acquisition as the holders of a majority of our IPO shares that are voted at the special meeting. Our officers and directors own no IPO shares. | |
Q. | How will the acquisition affect my securities of General Finance Corporation? | |
A. | Following the acquisition, you will continue to hold the shares of our common stock that you owned prior to the acquisition, except to the extent that you exercise your conversion rights. The percentage of our outstanding common stock represented by your shares immediately before and after the acquisition will be different, however, to the extent our stockholders exercise their conversion rights and, to a lesser extent, because of the issuance of shares of our common stock to one of the sellers as part of the total consideration for the acquisition. |
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If the acquisition is completed, our outstanding warrants will become exercisable on April 5, 2007. Otherwise, the acquisition will have no affect on any of our warrants to purchase common stock that you may own. | ||
Q. | If I object to the proposed acquisition, do I have appraisal rights? | |
A. | No. You have no appraisal rights in connection with the acquisition under applicable Delaware corporation law or otherwise. | |
Q. | What will happen to the funds held in the trust account after the acquisition? |
A. | If the acquisition is completed, a portion of the funds held in the trust account established at the time of our IPO will be used to pay the cash portion for the acquisition and costs of the acquisition. Based upon the net debt of Royal Wolf and as adjusted by the consideration adjustments relating to working capital and net tangible assets as of September 30, 2006, we estimate that the cash payable by us will be approximately $42.2 million. The actual cash payable at the closing will be different. We also will use the funds held in the trust account to repay the outstanding principal balance, which we estimate will be $2,000,000, plus accrued interest, under our line of credit with Mr. Valenta. Based upon the amount of funds held in the trust account as of December 31, 2006, this would leave available in the trust account after the acquisition a maximum of approximately $22.4 million, assuming no exercise of conversion rights, and a minimum of approximately $9.2 million, assuming the maximum conversion rights are exercised. Following the acquisition, the trust account will be closed and our stockholders who properly exercise their conversion rights will receive their pro rata portion of the funds held in the trust account; including a pro rata share of the contingent underwriting discount and a pro rata share of any interest earned, net of taxes. Any remaining funds in the trust account, less payment of the contingent underwriting discount payable to the underwriters of our initial IPO, will be released to us. We intend to use a portion of the remaining funds to repay Mr. Valenta for all amounts owing to him under our line of credit and for working capital and general corporate purposes. Following the acquisition, there will be no further restrictions on our use of these funds. |
Q. | Who will manage General Finance Corporation and Royal Wolf after the acquisition? | |
A. | After the acquisition, all of our current directors and officers will continue to serve in the capacities described under “Directors and Management Following the Acquisition.” | |
Royal Wolf also will continue to be managed largely by its existing officers, including Robert Allan, its Chief Executive Officer, Peter McCann, its Chief Financial Officer, and James Warren, its Chief Operating Officer. Each of Messrs. Allan, McCann and Warren is party to an employment agreement which is terminable upon advance notice by either party. In connection with the acquisition, Ronald F. Valenta and John O. Johnson will be appointed as directors of RWA, and Michael Baxter, a founder and Executive Director of RWA, will become a consultant to Royal Wolf under a360-day consulting agreement, under which he will agree to provide consulting services relating to the transition of ownership of Royal Wolf. | ||
Q. | Will our business plan change as a result of the acquisition of Royal Wolf? |
A. | No. Our management team will continue to execute our business plan disclosed in our IPO prospectus of identifying, acquiring and consolidating under our holding company other specialty finance businesses in the U.S., Europe and Asia. Royal Wolf is a leading specialty finance company in Australia that we believe has a strong and deep management team and is well-positioned for significant growth domestically in Australia. We also believe Royal Wolf can serve as a both a rental services platform for expansion throughout the Asia-Pacific region and potentially the core management team for the global container rental/leasing segment of our business. Ronald F. Valenta, our Chief Executive Officer, has successfully executed a similar strategy as the Chief Executive Officer and later the Chairman of the Board of Mobile Storage Group. If we complete the Royal Wolf acquisition, our present strategy is to seek to acquire other equipment leasing companies in North America, Asia and Europe and to consider acquisitions of other companies in the special finance business (such as payday lending companies). We also will continue Royal Wolf’s strategy of consolidating small equipment leasing companies in the region. We have no present understandings, arrangements or commitments, however, with respect to any other acquisition and are net in discussions relating to any possible acquisition. |
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Q. | What happens if the acquisition is not completed? | |
A. | If the acquisition is not completed, we will resume our search for another business combination to present to our stockholders for their approval. If we fail by October 5, 2007 to enter into an agreement in principle or a definitive agreement with respect to another business combination, or having done so we fail to complete the business combination by April 5, 2008, we will liquidate as soon as practicable. In any liquidation, the funds held in the trust account will be distributed pro rata to the holders of our IPO shares only. Our officers and directors have waived any right to any liquidation distribution with respect to shares of our common stock acquired by them prior to our IPO. In a liquidation, holders of our outstanding warrants would not receive any value for their warrants. | |
We cannot liquidate the trust account unless and until our stockholders approve our plan of dissolution and liquidation in accordance with the procedures described in this proxy statement. Accordingly, there will be a delay (which may be substantial) beyond October 5, 2007 or April 5, 2008, as the case may be, in our liquidation and the distribution to our public stockholders of the funds in our trust account as part of any plan of dissolution and liquidation. | ||
Q. | When do you expect the acquisition to be completed? | |
A. | We presently expect the acquisition to close on March 31, 2007, assuming the acquisition is approved at the special meeting on March 21, 2007. | |
Q. | What do I need to do now? | |
A. | We urge you to read carefully and consider all of the information contained in this proxy statement, including ANNEX A, to fully understand how the acquisition will affect you as a stockholder of General Finance Corporation. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card. | |
Q. | How do I vote? | |
A. | If you are a holder of record of our common stock, you may vote in person at the special meeting or by submitting a proxy for the special meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you must provide the record holder of your shares with instructions on how to vote them. | |
Q. | Is there a deadline for submitting my proxy? | |
Yes. Proxies must be received prior to the voting at the special meeting. Any proxies or other votes received after this time will not be counted in determining whether the acquisition has been approved. Furthermore, any proxies or other demand received after the voting at the special meeting will not be effective to exercise your conversion rights. | ||
Q. | If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me? | |
A. | No. Your broker, bank or nominee cannot vote your shares unless you provide voting instructions in accordance with the information and procedures provided to you by your broker, bank or nominee. | |
Q. | What will happen if I abstain from voting or fail to vote? | |
A. | Under our certificate of incorporation, we are allowed to complete the Royal Wolf acquisition only if it is approved by the affirmative vote of the holders of a majority of the shares of our common stock that were issued in the IPO and that are voted on the proposal. Therefore, your abstention or failure to vote will not be counted toward the vote total on the acquisition proposal. Furthermore, your abstention or failure to vote will not be sufficient to exercise your conversion rights. |
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Q. | Can I change my vote or revoke my proxy after I have mailed my signed proxy form. | |
A. | Yes. To change your vote, you may send a later-dated, signed proxy card to our address set forth in this proxy statement so that it is received prior to the voting at the special meeting or, if you are a record holder, attend the special meeting in person and vote. You also may revoke your proxy by sending a notice of revocation to us prior to the voting at the special meeting. | |
Q. | What should I do if I receive more than one set of proxy materials? | |
A. | You may receive more than one set of proxy materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to vote all of your shares. | |
Q. | Who can help answer my questions? | |
A. | If you have questions about the acquisition, or if you need additional copies of this proxy statement or the enclosed proxy card, you should contact: |
John O. Johnson | OR | MacKenzie Partners, Inc. | ||||
Chief Operating Officer | 105 Madison Avenue | |||||
General Finance Corporation | New York, New York 10016 | |||||
260 South Robles, Suite 217 | Telephone: (800) 322-2885 | |||||
Pasadena, California 91101 | ||||||
Telephone:(626) 584-9722 |
You may also obtain additional information about us from documents filed with the Securities and Exchange Commission by following the instructions in the section entitled “Where You Can Find More Information.” |
Q. | What are my conversion rights? | |
A. | If you hold IPO shares, you have the right to vote against the acquisition and demand that, if the acquisition is completed, your IPO shares be converted into a pro rata portion of the funds held in the trust account established at the time of our IPO. | |
Q. | How do I exercise my conversion rights? | |
A. | If you wish to exercise your conversion rights, you must: | |
• Affirmatively vote against approval of the acquisition; and | ||
• Demand that your IPO shares be converted into cash in accordance with the procedures described in this proxy statement; and | ||
• No later than 5:00 P.M., New York City time, on March 20, 2007 (the business day before the special meeting of stockholders to be held on March 21, 2007): |
• present the physical stock certificate (together with necessary stock powers, letter of instructions and the certificate referred to below) to Continental Stock Transfer Trust Company, 17 Battery Place, New York, New York 10004, Attention: Mark Zimkind, Tel. 212-845-3287, Fax 212-616-7616, together with written instructions that you wish to convert your shares into your pro rata share of the trust account; and |
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• provide to Continental Stock Transfer & Trust Company, along with the stock certificate, a written certificate addressed to us to the effect that you have held the shares that you seek to convert since the record date and that you will continue to hold the shares through the closing date of the acquisition. |
Any action that does not include an affirmative vote against approval of the acquisition will be insufficient to exercise your conversion rights. |
If you are the record owner of your shares and affirmatively vote against approval of the acquisition, you may demand conversion of your shares into a pro rata portion of the funds held in the trust account either by checking the appropriate box on the proxy card or by submitting your request in writing to us at our address listed in this proxy statement. |
Q. | What additional conversion procedures are required if my shares are held in “street name”? |
A. | If you hold your shares in “street name,” you must follow additional procedures that are designed to enable us to effectively match your vote against approval of the acquisition with any election to convert your shares. |
If your shares are held in “street name,” in order to convert your shares you must obtain from the account executive at your bank or broker a so-called legal proxy to vote your shares held in “street name” as of the record date and instruct the account executive to withdraw the shares from your account and request that a physical stock certificate be issued in your name. You should consult your account executive about any costs associated with this certification process. As described below, Continental Stock Transfer & Trust Company can assist with this process and reduce the movement of physical certificates. |
We urge stockholders whose shares are held in “street name” and who you may wish to convert their shares to promptly contact the account executive at their bank or broker to accomplish these additional procedures. If such stockholders fail to act promptly, they may be unable to timely satisfy the conversion requirements. |
Q. | What is the deadline for tendering my stock certificate? |
A. | Certificates that have not been tendered in accordance with these procedures by 5:00 P.M., New York City time, on March 20, 2007 will not be converted into cash. In the event you tender your shares and later decide that you do not want to convert the shares, you will need to make arrangements with Continental Stock Transfer & Trust Company, at the telephone number stated above, to withdraw the tender. In order to be effective, withdrawals of previously tendered shares must be completed by 5:00 P.M., New York City time, on March 20, 2007. |
Stockholders who wish to convert and tender their shares may contact Mark Zimkind of Continental Stock Transfer & Trust Company at (212) 845-3287, for assistance in making the necessary arrangements. Stockholders are urged to contact Mark Zimkind as early as possible and in any event by March [ ], 2007. |
Stockholders who have questions concerning the proposed acquisition or any other aspect of the special meeting should contact John O. Johnson at (626) 584-9722 or MacKenzie Partners, Inc. at (800) 322-2885. | ||
Q. | How can I remedy an improper exercise of my conversion rights? | |
A. | If you: | |
• Return your proxy with directions to vote for approval of the acquisition, but then wish to vote against it and demand conversion of your shares; or | ||
• Return your proxy with directions to vote against approval of the acquisition and wish to demand conversion of your shares, but do not check the appropriate box on the proxy card demanding conversion or send a written request to us to demand conversion; or | ||
• Return your proxy with directions to vote against approval of the acquisition, but later wish to vote for it; | ||
you may request that we send you another proxy card on which you may indicate your intended vote and, if that vote is against approval of the acquisition, demand conversion of your shares by checking the box provided for |
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that purpose on the proxy card. You may request another proxy card by contacting us at the phone number or address listed in this proxy statement.Any corrected or changed proxy card or written demand to convert your shares must be submitted to us so that it is received prior to the voting at the special meeting. | ||
Q. | What is the estimated conversion amount? |
A. | If you comply with the foregoing procedures and, notwithstanding your affirmative vote against the acquisition, it is completed, you will be entitled to receive a pro rata portion of the funds held in the trust account established at the time of our IPO, including any earned interest, calculated as of the date two business days prior to the closing of the acquisition. As of December 31, 2006, there was approximately $68.1 million in the trust account after deduction of the contingent underwriting discount and taxes on earned interest, or approximately $7.80 for each IPO share. If you exercise your conversion rights and acquisition of Royal Wolf is completed, then you will be irrevocably electing to exchange your shares of our common stock for the right to receive cash of not less than approximately $7.80 per IPO share and will no longer own these shares. |
Q. | How does the estimated conversion amount compare to the recent market price of common stock? |
A. | On January 12, 2007, the closing sale price of our common stock was $7.60 as reported on the American Stock Exchange. Our stockholders should verify the market price of our common stock prior to selling any common stock in the public market, since they may be able to receive greater proceeds from exercising their conversion rights than from selling their shares assuming that the acquisition is completed. |
Q. | When will I receive the cash amount? | |
A. | If you properly exercise your conversion rights, you will be entitled to receive cash for your shares only if: | |
• The acquisition is completed; and | ||
• You tender your stock certificates to our transfer agent as described in this proxy statement and continue to hold your shares through the closing of the acquisition. |
Q. | When do I need to send in my stock certificates? | |
A. | In order to exercise your conversion rights, you must tender your stock certificates to our transfer agent as described in this proxy statement not later than 5:00 P.M., New York City time, on March 20, 2007. You also must continue to hold your shares through the closing of the acquisition. | |
Q. | If I exercise my conversion rights, what will happen to my warrants? | |
A. | Nothing. The exercise of your conversion rights will not affect any warrants to purchase our common stock that you may own, which will continue to be outstanding and exercisable following the acquisition and any exercise of your conversion rights. | |
Q. | What are the federal income tax consequences of exercising my conversion rights? | |
A. | If you properly exercise your conversion rights and the acquisition is completed, you will generally be required to recognize capital gain or loss upon the conversion of your IPO shares if such shares were held as a capital asset on the date of the acquisition. Such gain or loss will be measured by the difference between the amount of cash you receive and your tax basis in your converted IPO shares. The gain or loss will be short-term gain or loss if the acquisition closes as scheduled, but may be long term gain or loss if the closing is postponed. | |
There will be no federal income tax consequences to non-converting stockholders as a result of the acquisition. |
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• | Our preliminary proxy statement relating to the special meeting was filed with the Securities and Exchange Commission within three business days after we received from KPMG its signed audit reports with respect to Royal Wolf’s audited financial statements included in this proxy statement; | |
• | This proxy statement was cleared by the Securities and Exchange Commission by February 26, 2007; | |
• | Our shareholders approved the acquisition by March 26, 2007; and | |
• | The Treasurer of the Commonwealth of Australia issued notice by not later than November 30, 2006 that it does not object to the acquisition. |
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• | Reviewed certain internal financial information relating to the business and financial prospects of Royal Wolf, including financial projections provided by Royal Wolf’s management that were not publicly available; | |
• | Conducted discussions with members of the senior management of Royal Wolf concerning its business and financial prospects; | |
• | Reviewed drafts of the acquisition agreement and certain other agreements related thereto; and | |
• | Conducted financial studies and industry data, analyses, and considered such other information, as they and our management deemed appropriate. |
• | Discussions with our management regarding Royal Wolf’s established business, record of growth and potential for future growth, the industry in which it competes, and current industry conditions, all of which led our board of directors to conclude that the acquisition presented an opportunity for us and our stockholders to realize value through the acquisition; | |
• | The experience of our management, in particular, Mr. Valenta, in building and consolidating similar businesses in the U.S. and Europe; | |
• | The experience of Royal Wolf’s management, including Robert Allan, Royal Wolf’s Chief Executive Officer, and James Warren, its Chief Operating Officer in building and operating Royal Wolf’s business; | |
• | Royal Wolf’s ability to execute its business plan using its own financing resources, since some of our stockholders may exercise their conversion rights in connection with the acquisition and thereby reduce the funds in the trust account available to us following the acquisition; | |
• | Royal Wolf’s financial results, including revenue growth and expanding operating margins; | |
• | The aggregate consideration for the acquisition represented an approximate run-rate adjusted earnings before interest, taxes and depreciation, or EBITDA, multiple of 7.9x the projected adjusted 2007 EBITDA; | |
• | The financial presentations of our management to our board of directors that, based upon and subject to the assumptions made, procedures followed, factors considered and limitations upon its review set forth as the date of the presentation, the acquisition consideration for the acquisition satisfied the 80% test represented in the prospectus relating to our IPO as described under “Satisfaction of 80% Test” below; | |
• | The belief by our board of directors that we had paid the fair market value and the lowest price that the sellers were willing to accept, taking into account the terms resulting from extensive negotiations between the parties; |
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• | The advice of our legal advisors, Troy & Gould Professional Corporation in the U.S. and Barnes & Wenden in Australia, and our due diligence advisors, Ernst & Young LLP Australia as to tax and structuring matters, La Rue, Corrigan and McCormick LLP as to accounting matters, and Consulting Earth Scientists as to environmental matters; and | |
• | The terms of the acquisition agreement, including: |
• | The inclusion of a “material adverse effect” clause in our favor, which includes any effect that results or is reasonably likely to result in a decline in Royal Wolf’s EBITDA of 15% or more in any twelve-month period; and | |
• | The inclusion of customary representations and warranties of the sellers and indemnification and escrow provisions in our favor. |
• | The risks relating to Royal Wolf’s business set out in this proxy statement in the section entitled “Risk Factors” beginning on page 18; | |
• | That Royal Wolf has no current business or operations in the U.S. or outside of Australia; | |
• | That Royal Wolf only recently began generating operating income; | |
• | That Royal Wolf’s portable storage sales business is maturing and is not likely to grow at the same rate as its leasing business; and | |
• | That the deposit provisions of the acquisition agreement may result in our forfeiture of substantial deposits if there are undue delays in completing the acquisition. |
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• | If the acquisition is not completed and we fail by October 5, 2007 to enter into an agreement in principle or a definitive agreement with respect to another business combination, or having done so we fail to complete the business combination by April 5, 2008, we will be required to liquidate. In that event, the 1,875,000 shares of common stock held by our officers and directors that were acquired prior to the IPO for an aggregate purchase price of $250,000 will be worthless, because our officers and directors have waived all rights to receive any liquidation proceeds with respect to such shares. As of January 12, 2007, the aggregate market value of the shares of our common stock owned by our officers and directors was $14,250,000. | |
• | Ronald F. Valenta, our Chief Executive Officer and a director, and John O. Johnson, our Chief Operating Officer, own warrants to purchase an aggregate of 1,477,833 shares of our common stock that they acquired for an aggregate purchase price of $1,400,000, which also will become worthless upon our liquidation. As of January 12, 2007, the aggregate market value of these warrants was $1,699,508. | |
• | Mr. Valenta has made available to us a line of credit under which we may borrow from him from time to time up to $2,000,000 at an annual interest rate equal to 8%. Our borrowings under the line of credit have been and will continue to be used by us to pay operating expenses, including deposits and expenses relating to the acquisition. At December 31, 2006, the outstanding amount of principal and accrued interest under the line of credit was $1,300,498. We will obtain any additional deposit under the acquisition agreement from borrowings under the line of credit, and we will continue to borrow funds under the line of credit to pay expenses through the completion of the acquisition. If the acquisition is completed, Mr. Valenta will be repaid all outstanding principal and accrued interest under the line of credit. If, on the other hand, the acquisition or other business combination is not completed and we are required to liquidate as described above, Mr. Valenta will have no recourse against the funds held in the trust account for repayment of any amount owed to him under the line of credit. |
• | All of our current officers and directors will continue to serve as such following the acquisition. In addition, Robert Allan, the Chief Executive Officer of Royal Wolf, will be deemed to be one of our officers following the acquisition and Peter McCann and James Warren, Royal Wolf’s Chief Financial Officer and Chief Operating Officer, respectively, will be key employees. At present, we do not compensate our officers or directors other than Charles E. Barrantes, our Executive Vice President and Chief Financial Officer, whose employment commenced on September 11, 2006. We will have employment agreements with only Messrs. Barrantes and Allan. Mr. Barrantes receives a base annual salary of $200,000 and is eligible to receive an annual bonus each fiscal year of up to 35% of his base salary, provided that he is employed on the last day of such year. Mr. Allan receives a base annual salary of $234,360 and is eligible to receive an performance annual bonus not to exceed $78,120 based upon the achievement of specified performance indicators. Ronald F. Valenta, our Chief Executive Officer and Secretary, John O. Johnson, our Chief Operating Officer, and Marc Perez, our Controller, are not currently compensated for their services; and both Mr. Valenta and Mr. Johnson have agreed to continue to serve in these capacities without compensation until at least the earliest of June 30, 2008 or such time as Royal Wolf achieves a annualized EBITDA of $20 million or we achieve a company-wide total annualized EBITDA of $40 million. If the acquisition is completed, we may modify the compensation to our officers and directors based upon the advice and recommendations of a compensation committee of our board of directors to be established. Except as described above, there is no current understanding or arrangement with respect to any future compensation to our officers or directors. |
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• | Obtaining consents of the landlords under certain Royal Wolf leases and of the parties to certain other Royal Wolf contracts, including the licensor of the “Royal Wolf” name and trademark; | |
• | The absence of any event that has a material adverse effect on the assets, liabilities or profitability of Royal Wolf from June 30, 2006 to the closing; | |
• | Cancellation of all outstanding options to purchase shares in RWA and RWA’s repurchase of certain outstanding shares of RWA; | |
• | The termination of a shareholders’ agreement among the sellers and RWA governing the operation of Royal Wolf; | |
• | Termination of the employment agreement between Royal Wolf and Michael P. Baxter with Mr. Baxter’s waiver of all claims against Royal Wolf as a result of the termination; and | |
• | Amendment of the employment agreements between Royal Wolf and each of Robert Allan, Peter McCann and James Warren to eliminate references to any shareholders agreement and share option plans, and confirmation by these individuals that Royal Wolf is not in default under such agreements and that they have no claims against Royal Wolf other than as provided in such agreements. |
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• | By the sellers if the Securities and Exchange Commission has not cleared this proxy statement by February 26, 2007 or the acquisition is not approved by our stockholders by March 26, 2007; and | |
• | By any party after March 17, 2007 if any of the other conditions to the closing of the acquisition has not been satisfied and the terminating party has used reasonable efforts to satisfy the conditions. |
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October 14, 2005 | ||||||||
Nine Months Ended | (inception) to | |||||||
September 30, | September 30, | |||||||
2006 | 2006 | |||||||
(Unaudited) | (Unaudited) | |||||||
(In thousands except share information) | ||||||||
General and administrative expenses | $ | 767 | $ | 771 | ||||
Operating (loss) | (767 | ) | (771 | ) | ||||
Other income: | ||||||||
Interest expense | (4 | ) | (4 | ) | ||||
Interest income | 1,217 | 1,217 | ||||||
Net income | 292 | 288 | ||||||
Net income per share: | ||||||||
Basic | $ | 0.04 | $ | 0.05 | ||||
Diluted | 0.03 | 0.04 | ||||||
Weighted average shares outstanding: | ||||||||
Basic | 7,359,880 | 6,026,492 | ||||||
Diluted | 8,437,991 | 6,862,633 | ||||||
September 30, 2006 | ||||
(Unaudited) | ||||
(In thousands) | ||||
Cash | $ | 137 | ||
Cash equivalents held in trust | 67,215 | |||
Total assets | 67,818 | |||
Deferred underwriting fees | 1,380 | |||
Total liabilities | 2,797 | |||
Common stock subject to possible conversion | 13,058 | |||
Stockholders’ equity | 51,963 |
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Year Ended | Six Months Ended | ||||||||||||||||||||||||
June 30, | June 30, | Year Ended December 31, | |||||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||||||
(Restated) | (Restated) | (Restated) | (Restated) | (Unaudited) | (Unaudited) | ||||||||||||||||||||
(In thousands of Australian dollars) | |||||||||||||||||||||||||
Sale and modification of containers | $ | 46,097 | $ | 17,534 | $ | 35,463 | $ | 25,973 | $ | 22,526 | $ | 16,358 | |||||||||||||
Hire of containers | 21,290 | 9,339 | 16,756 | 13,089 | 10,574 | 9,653 | |||||||||||||||||||
Total revenues | 67,387 | 26,873 | 52,219 | 39,062 | 33,100 | 26,011 | |||||||||||||||||||
Results from operating activities | 2,656 | 613 | 3,517 | 2,176 | 2,867 | 1,701 | |||||||||||||||||||
Other income (expense), net | (3,512 | ) | (856 | ) | (3,042 | ) | 747 | (4,482 | ) | (2,769 | ) | ||||||||||||||
Income tax (benefit) | (525 | ) | (30 | ) | (4 | ) | 312 | 203 | (4 | ) | |||||||||||||||
Net income (loss) | (331 | ) | (213 | ) | 479 | 2,611 | (1,412 | ) | (1,697 | ) |
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June 30, | December 31, | ||||||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||||||
(Restated) | (Restated) | (Restated) | (Restated) | (Unaudited) | (Unaudited) | ||||||||||||||||||||
(In thousands of Australian dollars) | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 777 | $ | 695 | $ | 3 | $ | 1,788 | $ | 788 | $ | 942 | |||||||||||||
Trade and other receivables | 10,206 | 7,876 | 7,024 | 5,205 | 5,339 | 3,831 | |||||||||||||||||||
Inventories | 7,498 | 4,023 | 2,140 | 3,880 | 2,487 | 1,576 | |||||||||||||||||||
Total assets | 66,406 | 47,152 | 39,390 | 34,917 | 24,696 | 21,171 | |||||||||||||||||||
Total current liabilities | 22,710 | 11,807 | 14,190 | 12,015 | 14,296 | 11,069 | |||||||||||||||||||
Non-current interest bearing loans and borrowings | 37,194 | 30,175 | 20,614 | 15,438 | 5,409 | 7,785 | |||||||||||||||||||
Equity | 4,829 | 4,816 | 4,151 | 6,388 | 3,777 | 2,265 |
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Pro Forma | ||||||||||||||||
Nine Months Ended | Year Ended | |||||||||||||||
September 30, 2006 | December 31, 2005 | |||||||||||||||
Assuming No | Assuming Maximum | Assuming No | Assuming Maximum | |||||||||||||
Conversions(1) | Conversions(2) | Conversions(1) | Conversions(2) | |||||||||||||
(In thousands except per share data) | ||||||||||||||||
Statement of Operations Data: | ||||||||||||||||
Revenues and other operating income | $ | 41,323 | $ | 41,323 | $ | 45,174 | $ | 45,174 | ||||||||
Net loss | (1,159 | ) | (1,468 | ) | (2,943 | ) | (2,943 | ) | ||||||||
Net income (loss) per share: | ||||||||||||||||
Basic | (0.11 | ) | (0.16 | ) | (0.27 | ) | (0.33 | ) | ||||||||
Diluted | (0.11 | ) | (0.16 | ) | (0.27 | ) | (0.33 | ) |
Pro Forma | ||||||||
September 30, 2006 | ||||||||
Assuming No | Assuming Maximum | |||||||
Conversions(1) | Conversions(2) | |||||||
(In thousands) | ||||||||
Balance Sheet Data: | ||||||||
Cash and cash equivalents | $ | 26,571 | $ | 13,513 | ||||
Total assets | 84,923 | 71,865 | ||||||
Long-term notes payable | 41,074 | 41,074 | ||||||
Other long-term liabilities | 3,328 | 3,328 | ||||||
Stockholders’ equity | 18,055 | 4,997 |
(1) | Assumes that none of our stockholders exercises conversion rights. | |
(2) | Assumes that 19.99% of our IPO shares, or 1,724,138 shares, are converted into their pro rata share of the funds held in the trust account. |
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(October 14, 2005 | ||||||||
Nine Months Ended | (inception) to | |||||||
September 30, 2006 | September 30, 2006 | |||||||
Historical: | ||||||||
Basic income per share | $ | 0.04 | $ | 0.05 | ||||
Diluted income per share | 0.03 | 0.04 |
Nine Months Ended | Year Ended | |||||||
September 30, 2006 | December 31, 2005 | |||||||
Pro Forma Consolidated: | ||||||||
Basic loss per share assuming no conversions(1) | $ | (0.11 | ) | $ | (0.27 | ) | ||
Diluted loss per share assuming no conversions(2) | (0.11 | ) | (0.27 | ) | ||||
Basic loss per share assuming maximum conversions | (0.16 | ) | (0.33 | ) | ||||
Diluted loss per share assuming maximum conversions | (0.16 | ) | (0.33 | ) | ||||
Shares Used to Compute Basic Per Share Data: | ||||||||
Assuming no conversions(1) | 10,699,510 | 10,712,980 | ||||||
Assuming maximum conversions(2) | 8,975,372 | 8,988,842 | ||||||
Shares Used to Compute Diluted Per Share Data: | ||||||||
Assuming no conversions(1) | 10,699,510 | 10,712,980 | ||||||
Assuming maximum conversions(2) | 8,975,372 | 8,988,842 |
September 30, 2006 | ||||||||
Historical Book Value of Stockholders’ Equity Per Share | $ | 4.95 | ||||||
Pro Forma Book Value of Stockholders’ Equity Per Share: | ||||||||
Assuming no conversions(1) | $ | 1.69 | ||||||
Assuming maximum conversions(2) | $ | 0.56 |
(1) | Assumes that none of our stockholders exercises conversion rights. | |
(2) | Assumes that 19.99% of our IPO shares, or 1,724,138 shares, are converted into their pro rata share of the funds held in the trust account. |
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Units | Common Stock | Warrants | ||||||||||||||||||||||
High | Low | High | Low | High | Low | |||||||||||||||||||
2007: | ||||||||||||||||||||||||
First Quarter (through February 5) | $ | 8.90 | $ | 8.50 | $ | 7.73 | $ | 7.46 | $ | 1.24 | $ | 1.10 | ||||||||||||
2006: | ||||||||||||||||||||||||
Fourth Quarter | $ | 8.00 | $ | 7.81 | $ | 7.70 | $ | 7.25 | $ | 1.15 | $ | 0.62 | ||||||||||||
Third Quarter | $ | 8.45 | $ | 7.75 | $ | 7.36 | $ | 7.22 | $ | 0.85 | $ | 0.63 | ||||||||||||
Second Quarter | $ | 8.06 | $ | 7.75 | $ | 7.35 | $ | 7.24 | $ | 0.80 | $ | 0.63 |
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• | Approve our acquisition of Royal Wolf; and |
• | Grant our board of directors discretionary authority to adjourn the special meeting to solicit additional votes for approval of the acquisition if that there are insufficient votes present at the meeting for its approval. |
• | Has unanimously approved the acquisition and determined that it is in the best interests of us and our stockholders; and | |
• | Unanimously recommends that our common stockholders vote “FOR” approval of the acquisition. |
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• | You can vote by completing, dating, signing and returning the enclosed proxy card. If you vote by proxy card, the proxy holders whose names are listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted as recommended by our board of directors “FOR” the approval of the acquisition and the other proposal described in this proxy statement; and | |
• | You can attend the special meeting and vote in person. We will give you a ballot when you arrive. However, if your shares are held in the name of your broker, bank or another nominee, you must get a proxy from the broker, bank or other nominee. That is the only way we can be sure that the broker, bank or nominee has not already voted your shares. |
• | You may send us another proxy card with a later date; | |
• | You may notify John O. Johnson, our Chief Operating Officer, in writing before the special meeting that you revoke your proxy; or | |
• | You may attend the special meeting, revoke your proxy and vote in person, as indicated above. |
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• | Affirmatively vote against approval of the acquisition; | |
• | Demand that your IPO shares be converted into cash in accordance with the procedures described in this proxy statement; and |
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• | No later than 5:00 P.M., New York City time, on March 20, 2007 (the business day before the special meeting of stockholders to be held on March 21, 2007); |
• | present the physical stock certificate (together with necessary stock powers, letter of instructions and the certificate referred to below) to Continental Stock Transfer & Trust Company, or transfer agent, at the following address: Continent Stock Transfer & Trust Company, 17 Battery Place, New York, New York 10004, Attention: Mark Zimkind, Tel. 212-845-3287, Fax 212-616-7616, together with written instructions that you wish to convert your shares into your pro rata share of the trust account; and |
• | provide to Continental Stock Transfer & Trust Company, along with the stock certificate, a written certificate addressed to us to the effects that you have held the shares that you seek to convert since the record date and that you will continue to hold the shares through the closing date of the acquisition. |
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• | In May 2006, we approached the owner of and commenced discussions with a California provider of modular buildings that had revenue in excess of $6 million in its most recent fiscal year. We were provided |
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summary financial information, along with a management presentation. Although we furnished the company with a written indication of interest, the parties were unable to agree upon the value of the company and discussions terminated in June 2006. |
• | In May 2006, we were contacted by an investment bank representingthree German providers of portable storage containers and offices. We were provided with a summary information memorandum that led to discussions of value. The three companies had combined revenues in excess of $20 million in the most recent fiscal year. We determined that the German providers were either too small or too heavily reliant upon sales rather than leasing, which led to the termination of the negotiations in June 2006. |
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Year Ending June 30, 2007(1) | Year Ending June 30, 2006(1) | |||||||
(In millions) | (In millions) | |||||||
Revenue | $ | 67.6 | $ | 48.8 | ||||
Revenue growth | 38.7 | % | 23.7 | % | ||||
EBITDA(2) | $ | 10.7 | $ | 5.2 | ||||
Margin | 15.8 | % | 10.0 | % | ||||
Net capital expenditures | $ | 6.2 | ||||||
Number of containers | 17,027 | 16,739 |
(1) | Translated at exchange rate of 0.7239 AUD to USD | |
(2) | Excludes transaction costs |
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• | Royal Wolf has customer service centers in each state in Australia; | |
• | Royal Wolf has average monthly lease container utilization rates of between 81% and 91%; and | |
• | Royal Wolf has over 12,000 active customers in numerous industries. |
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• | The risks relating to Royal Wolf’s business set out in this proxy statement in the section entitled “Risk Factors” beginning on page 19; |
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• | The fact that Royal Wolf has no current business or operations in the U.S. or outside of Australia was perceived as more difficult to manage than a U.S. domestic operation and that Royal Wolf had operations throughout Australia but had no business presence beyond that marketplace; |
• | The fact that Royal Wolf currently was unprofitable, had experienced fluctuations in its operating income and not been able to achieve consist or improved operating margins even with increasingyear-over-year revenues. While revenues grew substantially, Royal Wolf experienced net losses for the last two fiscal years and a slight decline in the gross margin for the year ended June 30, 2006. The losses in the most recent fiscal year were primarily attributable to higher costs from the introduction of several new products during the fiscal year, coupled with the higher interest expense and debt load. In our directors’ view, this was offset by the strong revenue increase in those products in the later part of the fiscal year along with the interim periods. In addition, the annual revenues of the business asset purchases that were made in 2006 were not fully reflected in the previous financial statements. Our board of directors also took into consideration the view of our management that Royal Wolf’s branch infrastructure was underutilized; |
• | The fact that Royal Wolf’s container sales business was maturing and was not likely to grow at the same rate as its other businesses. Royal Wolf appeared to have captured much of the market opportunity, but had been under-capitalized over the past three years. With our focus on a better capital structure, the board of directors believed that we will be able to create more leasing or acquisition opportunities which is historically a higher margin business, thereby increasing gross margins; and |
• | The fact that the deposit and termination provisions of the acquisition agreement may result in our forfeiture of substantial deposits or the termination of the acquisition agreement if there are delays in completing the acquisition. |
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Year Ending June 30, 2007(1) | ||||
(In millions) | ||||
Revenue | $ | 67.6 | ||
Revenue growth(2) | 38.7 | % | ||
EBITDA(3) | 10.7 | |||
Margin | 15.8 | % | ||
Net capital expenditures | 6.2 | |||
Number of containers | 17,027 |
(1) | Translated at exchange rate of 0.7239 AUD to USD |
(2) | Revenue growth percentage is 2007 FYE projected versus 2006 FYE actual. The estimated revenue growth is based upon anticipated benefits of new products increased large government sales and full-year benefit of 2006 acquisitions. |
(3) | Excludes transaction costs |
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• | Continued market penetration and customer acceptance of Royal Wolf’s full product range; | |
• | Full-year benefit from Royal Wolf’s newer products introduced during the 2006 fiscal year; | |
• | Integration and full-year benefits from competitor fleet acquisitions made during January through June of 2006; and | |
• | Selling, general and administrative expense savings driven by restructuring of Royal Wolf’s facilities operations. |
• | Discounted cash flow analysis; | |
• | Comparable companies analysis; and | |
• | Precedent transactions. |
• | EBITDA for the year ended June 30, 2006, and | |
• | June 30, 2007 FYE projections provided to the board of directors by RWA. |
• | Revenue and earnings before interest, taxes, depreciation and amortization, or EBITDA, with EBITDA adjusted to exclude certain non-recurring costs, including transactions costs to be incurred by Royal Wolf in connection with the acquisition, provided by Royal Wolf’s management, for the last twelve-month period, or LTM, ended June 30, 2006; and | |
• | Royal Wolf management’s revenue and adjusted EBITDA estimates for the fiscal year ending June 30, 2007. |
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At $85 Million | ||||
Aggregate | ||||
Consideration | ||||
• EV to LTM FY 2006 — Actual revenue | 1.74x | |||
• EV to FY 2007 — Management projected revenue | 1.26x | |||
• EV to LTM FY 2006 — Actual adjusted EBITDA | 10.90x | |||
• EV to FY 2007 — Management projected adjusted EBITDA | 7.94x |
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• | Revenue: Revenue growth was adjusted to reflect the current run rate of several new products, new government contracts and additional Royal Wolf fleet inventory spending and asset purchases as follows: |
2007 | 2008 | 2009 | 2010 | |||||||||||
38.7 | % | 13.4 | % | 11.5 | % | 10 | % |
• | Gross margins: Gross margins were expected to remain constant as follows: |
2007 | 2008 | 2009 | 2010 | |||||||||||
38 | % | 38 | % | 38 | % | 38 | % |
• | Costs: Input costs were inflation adjusted based on Royal Wolf management’s inflation estimates, but lower than revenue growth as a result of the impact of leveraging the sales/leasing growth against the infrastructure put into place in2004-2006. |
• Mobile Mini Inc. | Nasdaq NMS — MINI | |
• Williams-Scotsman | Nasdaq NMS — WLSC | |
• McGrath Rentcorp | Nasdaq NMS — MGRC |
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Enterprise Value / | ||||||||||||||||||||||||
Last Twelve Months(1) | LTM | FRY1 | LTM | FRY1 | ||||||||||||||||||||
Company | Revenue | EBITDA | Revenue | Revenue | EBITDA | EBITDA | ||||||||||||||||||
Mobile Mini, Inc. | $ | 254.6 | $ | 110.7 | 5.1x | 4.7x | 11.7x | 11.0x | ||||||||||||||||
McGrath Rentcorp | $ | 274.0 | $ | 125.1 | 3.5x | 3.5x | 7.7x | 7.7x | ||||||||||||||||
Williams Scotsman International, Inc. | $ | 678.8 | $ | 217.5 | 2.6x | 2.6x | 8.1x | 7.9x | ||||||||||||||||
High | 5.1x | 4.7x | 11.7x | 11.0x | ||||||||||||||||||||
Mean | 3.7x | 3.6x | 9.1x | 8.9x | ||||||||||||||||||||
Median | 3.5x | 3.5x | 8.1x | 7.9x | ||||||||||||||||||||
Low | 2.6x | 2.6x | 7.7x | 7.7x |
(1) | Source: Company SEC filings & CapitalIQ. |
• | EV as a multiple of actual fiscal year 2006 and management projected 2007 revenue; and | |
• | EV as a multiple of actual fiscal year 2006 and management projected 2007 EBITDA. |
Mean | Median | Range | Valuation Range(2) | Transaction | ||||||||||||||||
(In Millions) | ||||||||||||||||||||
Selected Companies: | ||||||||||||||||||||
EV to Revenue | ||||||||||||||||||||
LTM(x) | 3.5 | 2.7 | 2.6 to 5.3 | $ | 126.9 to $258.6 | 1.76x | ||||||||||||||
Estimated 2006(1) | 3.3 | 2.6 | 2.5 to 4.6 | $ | 169.0 to $311.0 | 1.26x | ||||||||||||||
EV to EBITDA | ||||||||||||||||||||
LTM(x) | 8.9 | 8.4 | 6.0 to 12.3 | $ | 31.2 to $64.0 | 10.90x | ||||||||||||||
Estimated 2006(1) | 8.2 | 7.9 | 6.1 to 10.7 | $ | 65.3 to $114.5 | 7.94x |
(1) | Because of differences in year end between the public companies with fiscal years ending December 31 and Royal Wolf with a June 30 fiscal year, the “Estimated 2006” data for Royal Wolf will be for the year ended June 30, 2007. | |
(2) | Translated at exchange rate of 0.7239 AUD to USD. |
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Date | Target | Acquirer | Deal Value | Nature of Acquirer | ||||||
8/04/06 | Pac Van, Inc | Mobile Office Acquisition Corp | $ | 100 million | Private | |||||
8/04/06 | Mobile Storage Group, inc | Welsh, Carson, Anderson & Stowe | $ | 608.5 million | Private | |||||
3/13/06 | Royal Wolf Portable Storage | Mobile Mini Inc. | $ | 48.5 million | Public | |||||
3/06/06 | Comark Building Systems | Carlyle Group | $ | — | Private | |||||
1/17/06 | Waco International Limited | Asia Opportunity Fund/JP Morgan | $ | 893.3 million | Private | |||||
12/01/05 | Bennett’s Trailer Company | New Acton Mobile Industries | $ | — | Private | |||||
11/28/05 | Skanska Modul AB | 3i Group plc | $ | 45 million | Private | |||||
10/17/05 | Baker Tanks, Inc | Lightyear Capital, LLC | $ | 500 million | Private | |||||
10/05/05 | A-One Storage, LLC | Mobile Mini, Inc. | $ | 7 million | Public | |||||
3/04/05 | Mobile Space, Inc. | Williams Scotsman, Inc. | $ | — | Public |
Implied | ||||
Transaction Multiple: | ||||
LTM | LTM | |||
Revenue(x) | EBITDA(x) | |||
Mean | 1.7 | 8.3 | ||
Median | 1.7 | 8.8 | ||
Range | .8 - 2.8 | 6.9 - 9.1 |
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Valuation Range(2) | ||||
(In millions) | ||||
LTM | LTM | |||
Revenue | EBITDA | |||
$39.0 - $136.6 | $35.9 - $47.3 |
Estimated 2006(1) | Estimated 2006(1) | |||
Revenue | EBITDA | |||
$54.1 - $189.3 | $$73.8 - $97.4 |
(1) | Because of differences in year-end between the public companies with fiscal years ending December 31 and Royal Wolf with a June 30 fiscal year, the “Estimated 2006” date for Royal Wolf will be for the year ended June 30, 2007. | |
(2) | Translated at exchange rate of 0.7239 AUD to USD |
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• | If the acquisition is not completed and we fail by October 5, 2007 to enter into an agreement in principle or a definitive agreement with respect to another business combination, or having done so we fail to complete the business combination by April 5, 2008, we will be required to liquidate. In that event, the 1,875,000 shares of common stock held by our officers and directors that were acquired prior to the IPO for an aggregate purchase price of $250,000 will be worthless, because our officers and directors have waived all rights to receive any liquidation proceeds with respect to such shares. As of January 12, 2007, the aggregate market value of the shares of our common stock owned by our officers and directors was $14,250,000. |
• | Ronald F. Valenta, our Chief Executive Officer and a director, and John O. Johnson, our Chief Operating Officer, own warrants to purchase an aggregate of 1,477,833 shares of our common stock that they acquired for an aggregate purchase price of $1,400,000, which also will become worthless upon our liquidation. As of January 12, 2007, the aggregate market value of these warrants was $1,699,508. |
• | Mr. Valenta has made available to us a line of credit under which we may borrow from him from time to time up to $2,000,000 at an annual interest rate equal to 8%. Our borrowings under the line of credit have been and will continue to be used by us to pay operating expenses, including deposits and expenses relating to the acquisition. At December 31, 2006, the outstanding amount of principal and accrued interest under the line of credit was $1,300,498. We will obtain any additional deposit under the acquisition agreement from borrowings under the line of credit, and we will continue to borrow funds under the line of credit to pay expenses through the completion of the acquisition. If the acquisition is completed, Mr. Valenta will be repaid all outstanding principal and accrued interest under the line of credit. If, on the other hand, the acquisition or other business combination is not completed and we are required to liquidate as described above, Mr. Valenta will have no recourse against the funds held in the trust account for repayment of any amount owed to him under the line of credit. |
• | All of our current officers and directors will continue to serve as such following the acquisition. In addition, Robert Allan, the Chief Executive Officer of Royal Wolf, will be deemed to be one of our officers following the acquisition and Peter McCann and James Warren, Royal Wolf’s Chief Financial Officer and Chief Operating Officer, respectively, will be key employees. At present, we do not compensate our officers or directors other than Charles E. Barrantes, our Executive Vice President and Chief Financial Officer, whose employment commenced on September 11, 2006. We will have employment agreements with only Messrs. Barrantes and Allan. Mr. Barrantes receives a base annual salary of $200,000 and is eligible to receive an annual bonus each fiscal year of up to 35% of his base salary, provided that he is employed on the last day of such year. Mr. Allan receives a base annual salary of $234,360 and is eligible to receive an performance annual bonus not to exceed $78,120 based upon the achievement of specified performance indicators. Ronald F. Valenta, our Chief Executive Officer and Secretary, John O. Johnson, our Chief Operating Officer, and Marc Perez, our Controller, are not currently compensated for their services; and both Mr. Valenta and Mr. Johnson have agreed to continue to serve in these capacities without compensation until at least the earliest of June 30, 2008 or such time as Royal Wolf achieves a run-rate EBITDA of $20 million or we achieve a company-wide total run-rate EBITDA of $40 million. If the acquisition is completed, we may modify the compensation to our officers and directors based upon the advice and recommendations of a compensation committee of our board of directors to be established. Except as described above, there is no current understanding or arrangement with respect to any future compensation to our officers or directors. |
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• | Net Tangible Assets. If the total assets less all intangibles and liabilities of Royal Wolf, excluding the amount required to cash out outstanding options, the bonus to the former chairman and costs and expenses of the acquisition is less than $2,109,000 at the closing, the aggregate consideration will be decreased by the amount of the shortfall. |
Total assets | $ | 58,600,000 | ||
Less: | ||||
Intangible assets | 4,333,000 | |||
Total liabilities | 54,775,000 | |||
Net tangible assets | (508,000 | ) | ||
Threshold | 2,109,000 | |||
Reduction in aggregate consideration | $ | (2,617,000 | ) | |
• | Working Capital. If the current assets (excluding cash and deposits relating to a specified contract) less the current liabilities (excluding interest bearing debt, other than in relation to assets acquired by Royal Wolf in satisfaction of its obligations under a specified contract, if awarded, finance leases, overdrafts and bank |
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vendor financing) is less than $2,344,000, the aggregate consideration will decrease by the amount of the shortfall. |
Current assets | $ | 15,033,000 | ||
Current liabilities | 21,285,000 | |||
Less: | ||||
Bank overdraft | 2,661,000 | |||
Bank vendor (receivable) financing | 537,000 | |||
Secured bank loan | 4,653,000 | |||
Finance leases | 184,000 | |||
13,250,000 | ||||
Working capital | 1,783,000 | |||
Threshold | 2,344,000 | |||
Reduction in aggregate consideration | $ | (561,000 | ) | |
• | Container Rental Equipment. If gross amount of container rental equipment at the closing is greater than the specified amount, the purchase price will be increased by the amount of such excess, and if the gross amount of container rental equipment at the closing is less than the specified amount, the purchase price will be decreased by the amount of such deficiency. The specified amount ranges from $34.6 million to $35.6 million. At June 30, 2006, Royal Wolf had gross amount of container rental equipment of $31.4 million. | |
• | Acquisition Costs. If Royal Wolf incurs costs and expenses in making any business acquisitions after the date of the acquisition agreement but prior to the consummation of this acquisition, the purchase price will be reduced by the amount of such costs and expenses incurred. | |
• | Container Lease. If the outstanding balance at the closing owing under a particular container lease program exceeds certain specified amounts, the aggregate consideration will be reduced by the amount of such excess. | |
• | SEC Clearance of Proxy Statement. The aggregate consideration will increase by $586,000 if this preliminary proxy statement has not been cleared by the Securities and Exchange Commission by February 17, 2007. |
• | Our preliminary proxy statement relating to the special meeting was filed with the Securities and Exchange Commission within three business days after we received from KPMG its signed audit reports with respect to Royal Wolf’s audited financial statements included in this proxy statement; | |
• | This proxy statement was cleared by the Securities and Exchange Commission by February 26, 2007; | |
• | Our shareholders approved the acquisition by March 26, 2007; and | |
• | The Treasurer of the Commonwealth of Australia issued notice by not later than November 30, 2006 that it does not object to the acquisition. |
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• | The aggregate amount of outstanding indebtedness for borrowed money and finance leases ($40.3 million at September 30, 2006); | |
• | The aggregate principal amount owed on the non-convertible notes held by one of the sellers ($5.4 million at September 30, 2006); | |
• | Amount of outstanding, deferred purchase price, consulting or non-compete or earn-out payment obligations under acquisition agreements; | |
• | Declared but undistributed dividends or other distributions; | |
• | The amounts required to cancel outstanding options; | |
• | Amounts owing in relation to a lease relating to 12 refrigerated containers; | |
• | Costs and expenses incurred by the sellers of negotiating, preparing and executing the acquisition agreement that are paid by Royal Wolf; | |
• | The outstanding bonus amount agreed to be paid to a former chairman of Royal Wolf; and | |
• | Any premium paid in relation to insurance obtained to support warranties of the sellers in the acquisition agreement. |
• | Moneys owing to suppliers in the ordinary course of business; | |
• | Amounts owing under any operating leases; | |
• | Any off-balance sheet debt disclosed by the sellers before the acquisition agreement in relation to the lease for 70 curtainsider containers, and any liabilities associated with that lease; and | |
• | Any amounts owing by Royal Wolf in relation to any assets acquired in satisfaction of its obligations under specified contract, less any deposits and other amounts received by Royal Wolf in relation to the contract. |
• | Proper corporate organization and similar corporate matters; and | |
• | The authorization, performance and enforceability of the acquisition agreement. |
• | No conflict or breach of any material contracts; | |
• | Liquidation, insolvency or defaults of any of the sellers; |
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• | Ownership of Royal Wolf shares; and | |
• | No option, right to acquire or encumbrance of or affecting the shares; |
• | Proper corporate organization and similar corporate matters of RWA and its subsidiaries; | |
• | No insolvency event; | |
• | Subsidiaries; | |
• | Shares; shares in the subsidiaries; no issuance of dividends; | |
• | Lack of any other subsidiary, partnership, joint venture or unincorporated association, or any other business entity; | |
• | Title to and ownership of properties and assets, including intellectual property rights; | |
• | Accuracy, maintenance and possession of records; | |
• | Financial information; | |
• | Compliance; required filings; | |
• | Tax matters; | |
• | Litigation; | |
• | Environmental matters; | |
• | Labor matters; | |
• | Material contracts; | |
• | Insurance; and | |
• | Leased property. |
• | Enter into, terminate or alter any term of any material contract or commitment with a value equal to or greater than $78,120; | |
• | Incur any material liability of $39,060 or more outside the ordinary course of the business; | |
• | Dispose of, agree to dispose of, encumber or grant an option over any of its assets outside the ordinary course of the business; | |
• | Hire or terminate any senior employee or alter the terms of employment of any senior employee whose salary package is valued at $117,180 or more; | |
• | Allot or issue or agree to allot or issue any share or any security convertible into any share; | |
• | Declare or pay any dividends or make any other distribution of assets or profits; | |
• | Alter or agree to alter the constitution; or | |
• | Pass any special resolution. |
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• | Obtaining consents of the landlords under certain Royal Wolf leases and of the parties to certain other Royal Wolf contracts including the licensor of the “Royal Wolf” name and trademark; | |
• | The absence of any event that has a material adverse effect on the assets, liabilities or profitability of Royal Wolf from June 30, 2006 to the closing; | |
• | Cancellation of all outstanding options to purchase shares in RWA and RWA’s repurchase of certain outstanding shares of RWA; | |
• | The termination of a shareholders’ agreement among the sellers and RWA governing the operation of Royal Wolf; | |
• | Termination of the employment agreement between Royal Wolf and Michael P. Baxter with Mr. Baxter’s waiver of all claims against Royal Wolf as a result of the termination; and | |
• | Amendment of the employment agreements between Royal Wolf and each of Robert Allan, Peter McCann and James Warren to eliminate references to any shareholders agreement and share option plans, and confirmation by these individuals that Royal Wolf is not in default under such agreements and that they have no claims against Royal Wolf other than as provided in such agreements. |
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• | Engage in a business that competes with Royal Wolf for a period of five years after the closing; | |
• | Solicit, canvass, approach or accept an approach from a person who was at any time during the 12 months ending on the closing a customer of Royal Wolf with a view to obtaining their business that is in competition with the business of Royal Wolf for a period of four years after the closing; | |
• | Interfere with the relationship between Royal Wolf and its customers, employees or suppliers for a period of three years after the closing; | |
• | Induce or help to induce a Royal Wolf employee to leave their employment for a period of two years after the closing; or |
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• | Disclose or use to their advantage or to Royal Wolf’s disadvantage, itself or by any of its subsidiaries, agents, or representatives, any of the trade secrets or any confidential information relating to Royal Wolf or its business at any time after the closing. |
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• | Accompanying notes to the unaudited pro forma condensed combined statements; | |
• | Separate historical financial statements of Royal Wolf for the periods ended June 30, 2005 and 2006 included elsewhere in this proxy statement; and | |
• | Our separate historical financial statements for the periods ended December 31, 2005 and September 30, 2006, which are not included in this proxy statement but can be obtained as described in the section “Where You Can Find More Information.” |
• | Assuming No Conversions: This presentation assumes none of our stockholders exercises their conversion rights; and | |
• | Assuming Maximum Conversions: This presentation assumes that 19.99% of our stockholders exercise their conversion rights. |
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Pro Forma | Pro Forma | |||||||||||||||
GFN | Royal Wolf | Adjustments | Combined | |||||||||||||
(In thousands except share data) | ||||||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash | $ | 137 | $ | 52 | $ | 67,215 | (a) | $ | 26,571 | |||||||
(39,453 | )(b) | |||||||||||||||
(1,380 | )(b) | |||||||||||||||
Cash held in trust account | 67,215 | — | (67,215 | )(a) | — | |||||||||||
Other current assets | 39 | 14,305 | — | 14,344 | ||||||||||||
Total current assets | 67,391 | 14,357 | (40,833 | ) | 40,915 | |||||||||||
Property and equipment, net | 3 | 36,590 | — | 36,593 | ||||||||||||
Intangible assets, net | — | 3,904 | 2,240 | (b) | 6,844 | |||||||||||
700 | (b) | |||||||||||||||
Other assets | 424 | 565 | (418 | )(b) | 571 | |||||||||||
Total assets | $ | 67,818 | $ | 55,416 | $ | (38,311 | ) | $ | 84,923 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Trade accounts payable | $ | 276 | $ | 10,099 | $ | — | $ | 10,375 | ||||||||
Accrued expenses | 182 | 1,743 | — | 2,625 | ||||||||||||
700 | (b) | |||||||||||||||
Other current liabilities | 2,339 | 8,507 | (1,380 | )(b) | 9,466 | |||||||||||
Total current liabilities | 2,797 | 20,349 | (680 | ) | 22,466 | |||||||||||
Long term liabilities: | ||||||||||||||||
Notes payable | — | 30,850 | 10,224 | (b) | 41,074 | |||||||||||
Non-compete payable | — | — | 2,240 | (b) | 2,240 | |||||||||||
Other long term liabilities | — | 1,088 | — | 1,088 | ||||||||||||
Total long term liabilities | — | 31,938 | 12,464 | 44,402 | ||||||||||||
Common stock subject to possible conversion, 1,724,138 shares at conversion value | 13,058 | — | (13,058 | )(b) | — | |||||||||||
Stockholders’ equity: | ||||||||||||||||
Common stock | 1 | 3,398 | (3,398 | )(b) | 1 | |||||||||||
Retained earnings (deficit) | 288 | (269 | ) | (288 | )(b) | (117 | ) | |||||||||
152 | (b) | |||||||||||||||
Additional paid-in capital | 51,674 | — | 1,494 | (b) | 18,171 | |||||||||||
(569 | )(c) | |||||||||||||||
13,058 | (b) | |||||||||||||||
(47,486 | )(b) | |||||||||||||||
Total stockholders’ equity | 51,963 | 3,129 | (37,037 | ) | 18,055 | |||||||||||
Total liabilities and stockholders’ equity | $ | 67,818 | $ | 55,416 | $ | (38,311 | ) | $ | 84,923 | |||||||
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Pro Forma | Pro Forma | |||||||||||||||
GFN | Royal Wolf | Adjustments | Combined | |||||||||||||
(In thousands except share data) | ||||||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash | $ | 137 | $ | 52 | $ | 67,215 | (a) | $ | 13,513 | |||||||
(39,453 | )(b) | |||||||||||||||
(1,380 | )(b) | |||||||||||||||
(13,058 | )(b) | |||||||||||||||
Cash held in trust account | 67,215 | — | (67,215 | )(a) | — | |||||||||||
Other current assets | 39 | 14,305 | — | 14,344 | ||||||||||||
Total current assets | 67,391 | 14,357 | (53,891 | ) | 27,857 | |||||||||||
Property and equipment, net | 3 | 36,590 | — | 36,593 | ||||||||||||
Intangible assets, net | — | 3,904 | 2,240 | (b) | 6,844 | |||||||||||
700 | (b) | |||||||||||||||
Other assets | 424 | 565 | (418 | )(b) | 571 | |||||||||||
Total assets | $ | 67,818 | $ | 55,416 | $ | (51,369 | ) | $ | 71,865 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Trade accounts payable | $ | 276 | $ | 10,099 | $ | — | $ | 10,375 | ||||||||
Accrued expenses | 182 | 1,743 | — | 2,625 | ||||||||||||
700 | (b) | |||||||||||||||
Other current liabilities | 2,339 | 8,507 | (1,380 | )(b) | 9,466 | |||||||||||
Total current liabilities | 2,797 | 20,349 | (680 | ) | 22,466 | |||||||||||
Long term liabilities: | ||||||||||||||||
Notes payable | — | 30,850 | 10,224 | (b) | 41,074 | |||||||||||
Non-compete payable | — | — | 2,240 | (b) | 2,240 | |||||||||||
Other long term liabilities | — | 1,088 | — | 1,088 | ||||||||||||
Total long term liabilities | — | 31,938 | 12,464 | 44,402 | ||||||||||||
Common stock subject to possible conversion, 1,724,138 shares at conversion value | 13,058 | — | (13,058 | )(b) | — | |||||||||||
Stockholders’ equity: | ||||||||||||||||
Common stock | 1 | 3,398 | (3,398 | )(b) | 1 | |||||||||||
Retained earnings (deficit) | 288 | (269 | ) | (288 | )(b) | (117 | ) | |||||||||
152 | (b) | |||||||||||||||
Additional paid-in capital | 51,674 | — | 1,494 | (b) | 5,113 | |||||||||||
(569 | )(c) | |||||||||||||||
(47,486 | )(b) | |||||||||||||||
Total stockholders’ equity | 51,963 | 3,129 | (50,095 | ) | 4,997 | |||||||||||
Total liabilities and stockholders’ equity | $ | 67,818 | $ | 55,416 | $ | (51,369 | ) | $ | 71,865 | |||||||
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Pro Forma | Pro Forma | |||||||||||||||
GFN | Royal Wolf | Adjustments | Combined | |||||||||||||
(In thousands except share and per share data) | ||||||||||||||||
Revenue | $ | — | $ | 41,323 | $ | — | $ | 41,323 | ||||||||
Cost of sales | — | 26,088 | — | 26,088 | ||||||||||||
Gross margin | — | 15,235 | — | 15,235 | ||||||||||||
Operating expenses | 767 | 10,456 | — | 11,223 | ||||||||||||
Depreciation and amortization | — | 2,310 | 825 | (e) | 3,135 | |||||||||||
Operating (loss)/income | (767 | ) | 2,469 | (825 | ) | 877 | ||||||||||
Interest income | (1,217 | ) | — | 215 | (g) | (1,002 | ) | |||||||||
Interest expense | 4 | 2,345 | 728 | (d) | 3,172 | |||||||||||
95 | (f) | |||||||||||||||
Other expenses | — | 39 | — | 39 | ||||||||||||
Total other expenses/(income) | (1,213 | ) | 2,384 | 1,038 | 2,209 | |||||||||||
Income/(loss) before provision for income taxes | 446 | 85 | (1,863 | ) | (1,332 | ) | ||||||||||
Provision/(credit) for income taxes | 154 | 244 | (571 | )(h) | (173 | ) | ||||||||||
Net income/(loss) | $ | 292 | $ | (159 | ) | $ | (1,292 | ) | $ | (1,159 | ) | |||||
Net loss per share: | ||||||||||||||||
Basic | $ | (0.11 | ) | |||||||||||||
Diluted | $ | (0.11 | ) | |||||||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 10,699,510 | (i) | ||||||||||||||
Diluted | 10,699,510 | (i) | ||||||||||||||
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Pro Forma | Pro Forma | |||||||||||||||
GFN | Royal Wolf | Adjustments | Combined | |||||||||||||
(In thousands except share and per share data) | ||||||||||||||||
Revenue | $ | — | $ | 41,323 | $ | — | $ | 41,323 | ||||||||
Cost of sales | — | 26,088 | — | 26,088 | ||||||||||||
Gross margin | — | 15,235 | — | 15,235 | ||||||||||||
Operating expenses | 767 | 10,456 | — | 11,223 | ||||||||||||
Depreciation and amortization | — | 2,310 | 825 | (e) | 3,135 | |||||||||||
Operating (loss)/income | (767 | ) | 2,469 | (825 | ) | 877 | ||||||||||
Interest income | (1,217 | ) | — | 699 | (g) | (518 | ) | |||||||||
Interest expense | 4 | 2,345 | 728 | (d) | 3,172 | |||||||||||
95 | (f) | |||||||||||||||
Other expenses | — | 39 | — | 39 | ||||||||||||
Total other expenses/(income) | (1,213 | ) | 2,384 | 1,522 | 2,693 | |||||||||||
Income/(loss) before provision for income taxes | 446 | 85 | (2,347 | ) | (1,816 | ) | ||||||||||
Provision/(credit) for income taxes | 154 | 244 | (746 | )(h) | (348 | ) | ||||||||||
Net income/(loss) | $ | 292 | $ | (159 | ) | $ | (1,601 | ) | $ | (1,468 | ) | |||||
Net loss per share: | ||||||||||||||||
Basic | $ | (0.16 | ) | |||||||||||||
Diluted | $ | (0.16 | ) | |||||||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 8,975,372 | (i) | ||||||||||||||
Diluted | 8,975,372 | (i) | ||||||||||||||
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Pro Forma | Pro Forma | |||||||||||||||
GFN | Royal Wolf | Adjustments | Combined | |||||||||||||
(In thousands except share and per share data) | ||||||||||||||||
Revenue | $ | — | $ | 45,174 | $ | — | $ | 45,174 | ||||||||
Cost of sales | — | 29,136 | — | 29,136 | ||||||||||||
Gross margin | — | 16,038 | — | 16,038 | ||||||||||||
Operating expenses | 4 | 12,112 | — | 12,116 | ||||||||||||
Depreciation and amortization | — | 2,513 | 1,174 | (e) | 3,687 | |||||||||||
Operating (loss)/income | (4 | ) | 1,413 | (1,174 | ) | 235 | ||||||||||
Interest income | — | — | — | — | ||||||||||||
Interest expense | — | 1,840 | 2,317 | (d) | 4,284 | |||||||||||
127 | (f) | |||||||||||||||
Other expenses/(income) | — | (210 | ) | — | (210 | ) | ||||||||||
Total other expenses | — | 1,630 | 2,444 | 4,074 | ||||||||||||
Income/(loss) before provision for income taxes | (4 | ) | (217 | ) | (3,618 | ) | (3,839 | ) | ||||||||
Provision/(credit) for income taxes | — | 189 | (1,085 | )(h) | (896 | ) | ||||||||||
Net income/(loss) | $ | (4 | ) | $ | (406 | ) | $ | (2,533 | ) | $ | (2,943 | ) | ||||
Net loss per share: | ||||||||||||||||
Basic | $ | (0.27 | ) | |||||||||||||
Diluted | $ | (0.27 | ) | |||||||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 10,712,980 | (i) | ||||||||||||||
Diluted | 10,712,980 | (i) | ||||||||||||||
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Pro Forma | Pro Forma | |||||||||||||||
GFN | Royal Wolf | Adjustments | Combined | |||||||||||||
(In thousands except share and per share data) | ||||||||||||||||
Revenue | $ | — | $ | 45,174 | $ | — | $ | 45,174 | ||||||||
Cost of sales | — | 29,136 | — | 29,136 | ||||||||||||
Gross margin | — | 16,038 | — | 16,038 | ||||||||||||
Operating expenses | 4 | 12,112 | — | 12,116 | ||||||||||||
Depreciation and amortization | — | 2,513 | 1,174 | (e) | 3,687 | |||||||||||
Operating (loss)/income | (4 | ) | 1,413 | (1,174 | ) | 235 | ||||||||||
Interest income | — | — | — | — | ||||||||||||
Interest expense | — | 1,840 | 2,317 | (d) | 4,284 | |||||||||||
127 | (f) | |||||||||||||||
Other expenses/(income) | — | (210 | ) | — | (210 | ) | ||||||||||
Total other expenses | — | 1,630 | 2,444 | 4,074 | ||||||||||||
Income/(loss) before provision for income taxes | (4 | ) | (217 | ) | (3,618 | ) | (3,839 | ) | ||||||||
Provision/(credit) for income taxes | — | 189 | (1,085 | )(h) | (896 | ) | ||||||||||
Net income/(loss) | $ | (4 | ) | $ | (406 | ) | $ | (2,533 | ) | $ | (2,943 | ) | ||||
Net loss per share: | ||||||||||||||||
Basic | $ | (0.33 | ) | |||||||||||||
Diluted | $ | (0.33 | ) | |||||||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 8,988,842 | (i) | ||||||||||||||
Diluted | 8,988,842 | (i) | ||||||||||||||
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FINANCIAL STATEMENTS
(Amounts in thousands, except share data)
Unadjusted acquisition consideration(1) | $ | 86,442 | ||
Transaction costs | 1,273 | |||
Adjustments: | ||||
Net tangible assets | (2,501 | ) | ||
Working capital | (535 | ) | ||
Adjusted acquisition consideration | $ | 84,679 | ||
(1) | AUD $115,750 converted at exchange rate on September 30, 2006 |
Cash from trust account | $ | 39,453 | ||
Deposit paid to Royal Wolf sellers | 418 | |||
Contemplated financing: | ||||
Amended revolver | 26,138 | |||
Mezzanine financing | 14,936 | |||
41,074 | ||||
Non-compete agreement | 2,240 | |||
Issuance of our common stock | 1,494 | |||
$ | 84,679 | |||
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FINANCIAL STATEMENTS — (Continued)
Nine months ended September 30, 2006 | Twelve months ended December 31, 2005 | |||||||||||||||
No Conversions | Maximum Conversions | No Conversions | Maximum Conversions | |||||||||||||
Estimated interest on contemplated financing: | ||||||||||||||||
Amended revolver | $ | 1,570 | $ | 1,570 | $ | 2,127 | $ | 2,127 | ||||||||
Mezzanine financing | 1,458 | 1,458 | 1,975 | 1,975 | ||||||||||||
3,028 | 3,028 | 4,102 | 4,102 | |||||||||||||
Other interest — financing leases | 45 | 45 | 55 | 55 | ||||||||||||
Estimated interest related to Royal Wolf | 3,073 | 3,073 | 4,157 | 4,157 | ||||||||||||
Interest expense recorded | 2,345 | 2,345 | 1,840 | 1,840 | ||||||||||||
Pro forma adjustment | $ | 728 | $ | 728 | $ | 2,317 | $ | 2,317 | ||||||||
For the nine months ended September 30, 2006 | ||||||||
No Conversion | Maximum Conversion | |||||||
Common stock issued to initial stockholder | 1,875,000 | 1,875,000 | ||||||
Common stock issued in connection with the IPO | 7,500,000 | 7,500,000 | ||||||
Common stock issued in connection with underwriters’ over-allotment option | 1,125,000 | 1,125,000 | ||||||
Common stock issued to one seller of Royal Wolf | 199,510 | 199,510 | ||||||
Common stock converted to cash | — | (1,724,138 | ) | |||||
10,699,510 | 8,975,372 | |||||||
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FINANCIAL STATEMENTS — (Continued)
For the twelve months ended December 31, 2005 | ||||||||
No Conversion | Maximum Conversion | |||||||
Common stock issued to initial stockholder | 1,875,000 | 1,875,000 | ||||||
Common stock issued in connection with the IPO | 7,500,000 | 7,500,000 | ||||||
Common stock issued in connection with underwriters’ over-allotment option | 1,125,000 | 1,125,000 | ||||||
Common stock issued to one seller of Royal Wolf | 212,980 | 212,980 | ||||||
Common stock converted to cash | — | (1,724,138 | ) | |||||
10,712,980 | 8,988,842 | |||||||
As a result of the net loss reflected in the unaudited pro forma condensed combined statements of income, basic and diluted shares used are the same. |
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• Legal fees and expenses | $ | 300,000 | ||
• Printing and engraving expenses | 96,059 | |||
• Accounting fees and expenses | 30,600 | |||
• SEC registration fee | 23,928 | |||
• NASD filing fee | 20,850 | |||
• AMEX filing fee | 78,125 | |||
• Initial Trustee’s fee | 1,000 | |||
• Miscellaneous expenses | 17,557 | |||
Total other offering expenses | $ | 568,119 | ||
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• | Our board of directors will convene and adopt a specific plan of dissolution and liquidation, which it will then vote to recommend to our stockholders; at such time it will also cause to be prepared a preliminary proxy statement setting out our plan of dissolution and liquidation as well as the board’s recommendation of the plan; | |
• | We will then promptly file our preliminary proxy statement with the Securities and Exchange Commission; |
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• | If the Securities and Exchange Commission does not review the preliminary proxy statement, then, approximately ten days following the filing of the preliminary proxy statement, we will mail the definitive proxy statement to our stockholders, and approximately thirty days following the mailing of such definitive proxy statement, we will convene a meeting of our stockholders, at which they will vote on our plan of dissolution and liquidation; and | |
• | If the Securities and Exchange Commission does review the preliminary proxy statement, we currently estimate that we will receive their comments approximately thirty days after the filing of the proxy statement; we will then mail the definitive proxy statement to our stockholders following the conclusion of the comment and review process (the length of which we cannot predict with any certainty and which may be substantial) and we will convene a meeting of our stockholders at which they will vote on our plan of dissolution and liquidation. |
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U.S.$ | Percent | |||||||
(In millions) | ||||||||
Sales revenues | $ | 21.4 | 42 | % | ||||
Leasing revenues | $ | 7.5 | 15 | % | ||||
Containers in lease fleet | 8,988 | 66 | % |
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U.S.$ | Percent | |||||||
(In millions) | ||||||||
Sales revenues | $ | 3.7 | 7 | % | ||||
Leasing revenues | $ | 5.5 | 11 | % | ||||
Containers in lease fleet | 4,205 | 31 | % |
U.S.$ | Percent | |||||||
(In millions) | ||||||||
Sales revenues | $ | 3.9 | 8 | % | ||||
Leasing revenues | $ | 0.3 | 1 | % | ||||
Containers in lease fleet | 400 | 3 | % |
• | In December 2005, Royal Wolf acquired the assets of Cairns-based Cape Containers for a purchase price of $641,000. This purchase resulted in the acquisition of 173 portable storage units and the related customer base; | |
• | In March 2006, Royal Wolf purchased the remaining shares of Royal Wolf-Hi Tech, a Newcastle-based joint venture, for $655,000, which added a further 676 portable storage units to the Royal Wolf lease fleet; | |
• | In April 2006, Royal Wolf acquired the assets of Melbourne-based Australian Container Network, or ACN, for $4.3 million. This acquisition added a further 891 units to Royal Wolf’s lease fleet and eliminated the second-largest portable storage supplier in Melbourne (next to Royal Wolf) from the market; and |
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• | In August 2006, Royal Wolf purchased container units from Townsville-based Bohle Containers for $155,000. This was a small but strategically important transaction that added a further 57 units to Royal Wolf’s lease fleet. |
• | As rapid deployment storage for the military, emergency services, and disaster relief; | |
• | As portable work camps for the mining and resources industry, including accommodations, ablution and kitchen containers; |
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• | As low-cost accommodations for remote communities and caravan parks; | |
• | As offices, workshops or storerooms in a growing range of sizes and configurations; | |
• | As an economical alternative to fixed-site mini storage; and | |
• | As cost-effective farm storage for cattle feed, farm equipment, fertilizers, and other items. |
• | Senior management informal estimates of competitor rental fleet size and annual sales volumes involving the regional Royal Wolf General Managers, senior marketing management, and, where possible, external information. | |
• | Informal estimates of competitor rental fleet and sale volumes were converted into annual revenue numbers using the following formula: |
• | Rental revenues: number of containers in rental fleet at an assumed industry-wide utilization rate of 75% times the average standard 20’ container rental rate for the region times 365 days. Management’s estimate of the 75% industry-wide container utilization rate was determined by discounting Royal Wolf’s actual historical utilization rate, which management believes is higher than the average utilization rate in the industry based upon its informal observations. |
• | Sales revenues: number of containers sold annually times average standard 20’ Container retail sale price for the region. |
• | The level of knowledge among potential customers regarding the availability and benefits of containerized storage in key Australian markets, such as the construction and mining industries, is still low; | |
• | Suppliers and customers continue to develop further uses for portable containers, thereby broadening the market for portable containers; and | |
• | As the market leader in Australia, Royal Wolf has consistently achieved organic growth and based, in part, on growth in the market as a whole. |
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Estimated | ||||||||
Scope of | Lease | |||||||
Competitor | Operations | Containers | ||||||
Royal Wolf | National | 17000 | ||||||
GE Seaco | National | 7000 | ||||||
Simply Containers | Regional | 7000 | ||||||
Macfield | Regional | 7000 | ||||||
ANL CGM | Regional | 2000 |
• | Engineering, construction and resources — approximately 50%. | |
• | Non-residential building construction — approximately 35%. | |
• | Recreation and holiday market — approximately 15%. |
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Estimated | ||||||||
Scope of | Lease | |||||||
Competitor | Operations | Buildings | ||||||
Coates | National | 22000 | ||||||
Ausco | National | 15000 | ||||||
Nomad | National | 10000 | ||||||
Atco | National | 8500 | ||||||
Royal Wolf | National | 500 |
(1) | Source — IBISWorld report — Prefabricated Metal Building Manufacturing in Australia — C2911 30th March 2006. This Report may be obtained for a fee by contacting IBSISWorld Ltd. |
Estimated | ||||||||
Scope of | Lease | |||||||
Competitor | Operations | Containers | ||||||
Macfield | National | 3500 | ||||||
Royal Wolf | National | 2400 | ||||||
Cronos | National | 1250 | ||||||
Simply Containers | National | 1250 |
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Portable storage containers: | 10’, 20’ & 40’ general purpose units | |
Mini Cube units | ||
Dangerous Goods containers | ||
Refrigerated containers | ||
Portable container buildings: | Site offices & Cabins | |
Workforce accommodation unit | ||
Luxury accommodation unit | ||
Ablutions block | ||
Freight Containers: | Curtain-side containers | |
20’ & 40’ Hi-cube containers | ||
20’ & 40’ two pallet-wide containers | ||
Side-opening door containers |
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• | Operations — 49; | |
• | Sales — 36; | |
• | Production — 35; | |
• | Management — 20; | |
• | Finance — 19; and | |
• | Support — 8. |
Nanton CIMC | 22 | % | ||
Triton Container | 18 | % | ||
Shanghai Baoshan | 12 | % | ||
GlobeStar Shipping | 6 | % | ||
TAL International Container | 6 | % | ||
Florens Container | 5 | % |
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• | Lease fleet growth through rate increases, utilization and volume growth; | |
• | Potential to implement transport services to improve service and access pick up/ drop off benefits; | |
• | In-market acquisitions; | |
• | Geographic expansion — Regional and Asia/Pacific; | |
• | Complementary products; | |
• | Further penetration of mining industry; and | |
• | Further penetration of defence industries |
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF ROYAL WOLF
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12 Months | 6 Months | 12 Months | ||||||||||
Ended | Ended | Ended | ||||||||||
June 30, 2006 | June 30, 2005 | December 31, 2004 | ||||||||||
(In millions of Australian dollars) | ||||||||||||
Revenues: | ||||||||||||
Leasing | $ | 17.5 | $ | 7.7 | $ | 14.2 | ||||||
Sale: | ||||||||||||
New units | 6.8 | 0.4 | — | |||||||||
Rental equipment | 30.8 | 13.3 | 29.5 | |||||||||
Other | 12.3 | 5.5 | 8.5 | |||||||||
Total revenues | 67.4 | 26.9 | 52.2 | |||||||||
Cost of Revenues: | ||||||||||||
Leasing | 4.5 | 2.4 | 4.7 | |||||||||
Sale: | ||||||||||||
New units | 5.0 | 0.3 | — | |||||||||
Rental equipment | 23.5 | 9.6 | 20.0 | |||||||||
Other | 11.4 | 4.3 | 8.9 | |||||||||
Gross profit | 23.0 | 10.3 | 18.6 | |||||||||
Operating Expenses: | ||||||||||||
Selling, general and administrative | 20.3 | 9.3 | 14.9 | |||||||||
Financial expenses (net) | 3.5 | 1.0 | 3.1 | |||||||||
Other | — | 0.2 | 0.1 | |||||||||
Profit (loss) before income taxes | (0.8 | ) | (0.2 | ) | 0.5 | |||||||
Income tax (benefit) | (0.5 | ) | — | — | ||||||||
Net profit (loss) | $ | (0.3 | ) | $ | (0.2 | ) | $ | 0.5 | ||||
12 Months | 6 Months | 12 Months | ||||||||||
Ended | Ended | Ended | ||||||||||
June 30, 2006 | June 30, 2005 | December 31, 2004 | ||||||||||
Revenues: | ||||||||||||
Leasing | 25.9 | % | 28.6 | % | 27.2 | % | ||||||
Sales: | ||||||||||||
New units | 10.2 | % | 1.5 | % | 0.0 | % | ||||||
Rental equipment | 45.6 | % | 49.4 | % | 56.5 | % | ||||||
Delivery, installation and other | 18.3 | % | 20.5 | % | 16.3 | % | ||||||
Total revenues | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
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12 Months | 6 Months | 12 Months | ||||||||||
Ended | Ended | Ended | ||||||||||
June 30, 2006 | June 30, 2005 | December 31, 2004 | ||||||||||
Cost of sales and services: | ||||||||||||
Leasing | 6.5 | % | 8.9 | % | 9.0 | % | ||||||
Sales: | ||||||||||||
New units | 7.4 | % | 1.1 | % | 0.0 | % | ||||||
Rental equipment | 34.8 | % | 35.7 | % | 38.3 | % | ||||||
Other | 17.1 | % | 16.0 | % | 17.1 | % | ||||||
Gross profit | 34.0 | % | 38.3 | % | 35.6 | % | ||||||
Selling, general and administrative expenses | 30.1 | % | 34.6 | % | 28.5 | % | ||||||
Financial expenses (net) | 5.2 | % | 3.8 | % | 5.9 | % | ||||||
Other operating expenses | 0.0 | % | 0.6 | % | 0.3 | % | ||||||
Profit (loss) before income taxes | (1.3 | )% | (0.7 | )% | 0.9 | % | ||||||
Income tax (benefit) | (0.8 | )% | (0.0 | )% | 0.0 | % | ||||||
Net profit (loss) | (0.5 | )% | (0.7 | )% | 0.9 | % | ||||||
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12 Months Ended | 12 Months Ended | |||||||||||
June 30, | June 30, | Increase | ||||||||||
2006 | 2005 | (Decrease) | ||||||||||
Manpower | $ | 9.9 | $ | 9.6 | $ | 0.3 | ||||||
Rent | 0.3 | 0.1 | 0.2 | |||||||||
CSC operating costs | 3.1 | 3.9 | (0.8 | ) | ||||||||
Business promotion | 1.1 | 0.7 | 0.4 | |||||||||
Travel and meals | 0.9 | 0.8 | 0.1 | |||||||||
IT and Telco | 0.6 | 0.5 | 0.1 | |||||||||
Professional costs | 1.0 | 1.0 | 0.0 | |||||||||
Other | 0.9 | 0.5 | 0.4 | |||||||||
Other depreciation and amortization | 2.5 | 1.5 | 1.0 | |||||||||
$ | 20.3 | $ | 18.6 | $ | 1.7 | |||||||
Corporate Division — National Mining & Defense | 2 | |||
Customer Service Centers | ||||
NSW | 4 | (acquisitions) | ||
Victoria | 8 | (acquisitions) | ||
Western Australia | 5 | |||
Queensland | 9 | |||
Northern Territory | 2 | |||
30 | ||||
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12 Months Ended | 12 Months Ended | |||||||||||
June 30, | December 31, | Increase | ||||||||||
2006 | 2004 | (Decrease) | ||||||||||
Manpower | $ | 9.6 | $ | 7.5 | $ | 2.1 | ||||||
Rent | 0.1 | 0.1 | 0.0 | |||||||||
CSC operating costs | 3.9 | 2.6 | 1.3 | |||||||||
Business promotion | 0.7 | 0.5 | 0.2 | |||||||||
Travel and meals | 0.8 | 0.7 | 0.1 | |||||||||
IT and Telco | 0.5 | 0.7 | (0.2 | ) | ||||||||
Professional costs | 1.0 | 0.7 | 0.3 | |||||||||
Other | 0.5 | 0.0 | 0.5 | |||||||||
Other depreciation and amortization | 1.5 | 2.1 | (0.6 | ) | ||||||||
$ | 18.6 | $ | 14.9 | $ | 3.7 | |||||||
Corporate Division | ||||
Road & Rail | 3 | |||
Removalist | 1 | |||
National Mining & Defense | 2 | |||
6 | ||||
Customer Service Centers | ||||
NSW | 8 | |||
Victoria | 13 | |||
Western Australia | 3 | |||
South Australia | 1 | |||
Queensland | 5 | |||
Northern Territory | 5 | |||
35 | ||||
Operations | 2 | |||
43 | ||||
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• | The consolidated audited financial statements as soon as they are available, but not later than 120 days after the end of each financial year. | |
• | The consolidated annual projected balance sheet, profit and loss and cash flow forecast at the start of each financial year for the ensuing 12 months. | |
• | The annual certificate signed by two Directors certifying compliance with consolidated financial undertakings as soon as it is available, but not later than 120 days after the end of each financial year. |
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• | The consolidated CAPEX (Capital Expenditure) budget detailing non-discretionary and discretionary CAPEX at the start of each financial year for the ensuing 12 months. | |
• | Board approved business plan/budget for the ensuing 12 months, as soon as they are available but no later than 15 days before June 30 each year for consolidated entities. |
• | The consolidated management accounts (balance sheet and profit and loss accounts) within 30 days after the end of each financial quarter (i.e., March, June, September, December). | |
• | The consolidated aged debtor, creditor and stock listings to be provided as soon as they are available but not later than 30 days after the end of each financial quarter (i.e., March, June, September, and December). |
• | 1.75:1 as at March 31, 2006. | |
• | 2.00:1 as at June 30, 2006, and thereafter. |
• | 2.50:1 as at June 30, 2006, and thereafter. |
• | 01.75:1 as at March 31, 2006, and thereafter. |
• | Dividend payments are not to be made without prior written consent from ANZ. | |
• | All containers are to be restricted within the shores of Australia and the company’s Lease/Rental documentation should include this limitation. Any movement of containers outside the shores of Australia will require ANZ’s prior written consent. | |
• | Any additional off or on balance sheet liabilities are not to be made without prior written consent from ANZ. | |
• | Detailed schedule of containers with following information as soon as they are available, but no later than 30 days after the end of each financial month: |
• | Held for hire/lease outlining type, number, acquisition cost and book value. | |
• | Held for sale outlining type, number, acquisition cost and book value. |
• | A review of Royal Wolf’s inventory management systems to be conducted as at June 30 each year as part of the general audit. a copy of the report to be provided within 120 days. | |
• | Provision of loans or advances to directors, shareholders, related or associated companies is not to be made without prior written consent from ANZ. | |
• | Fair market value of orderly liquidated value of leased/hire containers is to be undertaken by a valuer appointed by and acceptable to Australia and New Zealand Banking Group as at June 30 of each year. | |
• | No interest or repayments to be paid to Equity Partners and ANZ Private Equity without written consent from ANZ. |
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Quarter ended: | Covenant value: | |||
December 2005 | 0 | .85:1 | ||
March 2006 | 1 | .25:1 | ||
June 2006 | 1 | .5:1 | ||
September 2006, and thereafter | 2 | .00 |
• | Consolidated Reworked Adjusted Gearing Ratio: The consolidated reworked adjusted gearing ratio for each financial year will not, as at the compliance date, exceed 2.00:1 as at June 30, 2006: and 1.50:1 as at June 30, 2007. | |
• | Consolidated Debt Service Cover Ratio: The consolidated debt service cover ratio for each financial quarter on a rolling12-month basis, as shown below, will not, as at the compliance date, fall below: |
Quarter ended: | Covenant value: | |||
December 2005 | 1 | .75 | ||
March 2006, and thereafter | 2 | .00 |
• | Consolidated actual revenue at the end of each financial quarter (i.e., March, June, September and December) will be within 90% of the budgeted consolidated revenue. |
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Payment Due by Fiscal Year Ending June 30, | ||||||||||||||||||||
2008- | 2011- | |||||||||||||||||||
Contractual Obligations | Total | 2007 | 2010 | 2013 | 2014 and Thereafter | |||||||||||||||
(In thousands) | ||||||||||||||||||||
Facility leases | $ | 5,629 | $ | 2,602 | $ | 2,356 | $ | 400 | $ | 271 | ||||||||||
Finance leases/arrangements | 2,451 | 907 | 1,544 | — | — | |||||||||||||||
Bank indebtedness and term loans — principal | 26,127 | 8,029 | 18,098 | — | — | |||||||||||||||
Bank indebtedness and term loans — interest | 4,168 | 1,860 | 2,308 | — | — | |||||||||||||||
30,295 | 9,889 | 20,406 | — | — | ||||||||||||||||
Total | $ | 38,375 | $ | 13,398 | $ | 24,306 | $ | 400 | $ | 271 | ||||||||||
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• | persuasive evidence of an arrangement exists; | |
• | delivery has occurred; | |
• | the seller’s price to the customer is fixed or determinable; and | |
• | collectability is reasonable assured. |
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2005 | 2006 | |||
Property, plant and equipment | ||||
Plant and equipment | 3 - 10 years | 3 - 10 years | ||
Motor vehicles | 3 - 10 years | 3 - 10 years | ||
Furniture and fittings | 5 - 10 years | 5 - 10 years | ||
Container hire fleet | ||||
Containers for hire | 10 years (20% residual) | 10 - 25 years (20% residual) | ||
Leased containers for hire (used) | 10 years (20% residual) | 10 - 25 years (20% residual) | ||
Leased containers for hire (new) | 25 years (20% residual) | 10 - 30 years (20-30% residual) |
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• | AASB 7Financial instruments: Disclosure(August 2005) replacing the presentation requirements of financial instruments in AASB 132. AASB 7 is applicable for annual reporting periods beginning on or after January 1, 2007; | |
• | AASB 2005-9Amendments to Australian Accounting Standards (September 2005) requires that liabilities arising from the issue of financial guarantee contracts are recognized in the balance sheet. AASB 2005-9 is applicable for annual reporting periods beginning on or after January 1, 2006; | |
• | AASB 2005-10Amendments to Australian Accounting Standards (September 2005) makes consequential amendments to AASB 132Financial Instruments: Disclosures and Presentation, AASB 101Presentation of Financial Statements, AASB 114Segment Reporting, AASB 117Leases, AASB 139Financial Instruments: Recognition and Measurement, AASB 1First-time Adoption of Australian Equivalents to International Financial Reporting Standards, arising from the release of AASB 7. AASB 2005-10 is applicable for annual reporting periods beginning on or after January 1, 2007. |
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Name | Age | Position | ||||
Ronald F. Valenta | 48 | Chief Executive Officer, Secretary and Director | ||||
John O. Johnson | 45 | Chief Operating Officer | ||||
Charles E. Barrantes | 54 | Executive Vice President and Chief Financial Officer | ||||
Marc Perez | 42 | Controller | ||||
Robert Allan | 50 | Chief Executive Officer, Royal Wolf Trading Australia Pty Limited | ||||
Lawrence Glascott | 72 | Chairman of the Board of Directors | ||||
David M. Connell | 62 | Director | ||||
Manuel Marrero | 49 | Director | ||||
James B. Roszak | 65 | Director |
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• | Neither our directors nor Mr. Valenta or Mr. Johnson is required to commit their full time to our affairs and, accordingly, they may have conflicts of interest in allocating their time among various business activities. |
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• | In the course of their other business activities, our officers and directors may become aware of investment and business opportunities that may be appropriate for presentation to us and the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. | |
• | Our officers and directors may in the future become affiliated with entities, including other blank check companies, engaged in business activities similar to those in which our company intends to engage. | |
• | Ronald F. Valenta, our Chief Executive Officer and Secretary, is the non-executive Chairman of the Board of Directors of Mobile Services Group, Inc. and Chairman of the Board of Directors of Port-O-Shred LLC and the managing member of Portosan, LLC. While none of our other existing stockholders has any affiliation with a specialty finance company, they may have such an affiliation in the future. |
• | the corporation could financially undertake the opportunity; | |
• | the opportunity is within the corporation’s line of business; and | |
• | it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation. |
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Name | Title | Year | Salary | Bonus | ||||||||||
Charles E. Barrantes | Chief Financial Officer | 2006 | (1) | $ | 62,121 | $ | — | |||||||
Robert Allan | Chief Executive Officer, | 2006 | $ | 176,036 | $ | 7,421 | ||||||||
Royal Wolf Trading Australia Pty | 2005 | $ | 150,875 | $ | 19,802 | |||||||||
Limited | 2004 | (2) | $ | 6,800 | $ | — | ||||||||
Peter McCann | Chief Financial Officer, Royal Wolf | 2006 | $ | 203,112 | $ | 26,311 | ||||||||
Trading Australia Pty Limited | 2005 | $ | 195,300 | $ | 7,421 | |||||||||
2004 | (3) | $ | 24,537 | $ | — | |||||||||
James Warren | Chief Operating Officer, Royal Wolf | 2006 | $ | 189,832 | $ | 39,060 | ||||||||
Trading Australia Pty Limited | 2006 | $ | 183,582 | $ | 105,462 | |||||||||
2004 | $ | 175,770 | $ | 66,107 |
(1) | Mr. Barrantes joined us in September 2006. | |
(2) | Mr. Allan joined Royal Wolf in April 2004. | |
(3) | Mr. McCann joined Royal Wolf in May 2004. |
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• | Each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; | |
• | Each of our current executive officers and directors; and | |
• | All of our current executive officers and directors as a group; and |
Beneficial Ownership | Percent of Class | |||||||||||
Number | Before the | After the | ||||||||||
Name | of Shares | Acquisition(1) | Acquisition(1) | |||||||||
Ronald F. Valenta(2) | 1,410,000 | 13.4 | % | 13.2 | % | |||||||
John O. Johnson | 356,250 | 3.4 | % | 3.3 | % | |||||||
James B. Roszak | 22,500 | (* | ) | (* | ) | |||||||
Lawrence Glascott | 22,500 | (* | ) | (* | ) | |||||||
Manuel Marrero | 22,500 | (* | ) | (* | ) | |||||||
David M. Connell | 22,500 | (* | ) | (* | ) | |||||||
Marc Perez | 18,750 | (* | ) | (* | ) | |||||||
Azimuth Opportunity, Ltd(3) | 668,600 | 6.4 | % | 6.2 | % | |||||||
c/o WSmiths Finance Nemours Chambers P.O. Box 3170 Road Town, Tortola British Virgin Islands | ||||||||||||
Fir Tree, Inc.(4) | 898,525 | 8.6 | % | 8.4 | % | |||||||
535 Fifth Avenue, 31st Floor New York, NY 10017 | ||||||||||||
All officers and directors as a group (eight persons)(5) | 1,875,000 | 17.9 | % | 17.5 | % |
(1) | Based upon 10,500,000 shares of our common stock outstanding on February 16, 2007. Of the aggregate consideration for the acquisition, $1.6 million will be paid to one of the sellers in shares of our common stock. Our shares will be valued for this purpose based upon the average of the closing sale prices of our common stock as reported on the American Stock Exchange during the 20 trading days ending two days prior to the closing of the acquisition. Based upon the closing sale price of our common stock as reported on the American Stock Exchange on January 12, 2007 of $7.60, we would issue approximately 210,000 shares to the seller. The percentage ownership “After the Acquisition” reflects the issuance of these shares. |
(2) | Mr. Valenta’s business address is c/o General Finance Corporation, 260 South Los Robles, Suite 217, Pasadena, California 91101. |
(3) | Information is based upon a Schedule 13G with respect to our company filed with the Securities Exchange Commission on September 26, 2006 and our search of other available Securities and Exchange Commission filings by this stockholder. |
(4) | Fir Tree, Inc. is the investment manager of both Fir Tree Recovery Master Fund, L.P., a Cayman Islands exempted limited partnership, and Sapling, LLC, a Delaware limited liability company. Fir Tree Recovery may direct the vote and disposition of 271,894 of the shares shown. Fir Tree Value Master Fund, LP, a Cayman Islands exempted limited partnership, as the sole member of Sapling, LLC, may direct the vote and disposition |
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of the 626,631 of the shares shown. Information is based upon a Schedule 13G filed with respect to our company with the Securities Exchange Commission on April 11, 2006. Based upon a review of other filings with the Securities and Exchange Commission, we have reason to believe that Jeffrey Tannenbaum, the President of Fir Tree, Inc., may be deemed to be a control person of Sapling, LLC and Fir Tree Recovery Master Fund, L.P. |
(5) | Excludes Robert Allan, the Chief Executive Officer of Royal Wolf, who will be deemed to be one of our executive officers after the acquisition, and Peter McCann and James Warren, the Chief Financial Officer and the Chief Operating Officer, respectively, of Royal Wolf, who may be deemed to be key employees following the acquisition. Mr. Allan owns 400 share of our common stock. None of the other individuals owns beneficially any shares of our common stock. |
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John O. Johnson | OR | MacKenzie Partners, Inc. | ||
Chief Operating Officer | 105 Madison Avenue | |||
General Finance Corporation | New York, New York 10016 | |||
260 South Robles, Suite 217 | Telephone: (800)322-2885 | |||
Pasadena, California 91101 | ||||
Telephone:(626) 584-9722 |
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Page | ||||
RWA HOLDINGS PTY LIMITED | ||||
As of and for the year ended June 30, 2006, the six months ended June 30, 2005, and the year ended December 31, 2004: | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
ROYAL WOLF TRADING AUSTRALIA PTY LIMITED | ||||
As of and for the year ended December 31, 2003: | ||||
F-58 | ||||
F-59 | ||||
F-60 | ||||
F-61 | ||||
F-62 | ||||
AUSTRALIAN CONTAINER NETWORK PTY LTD AS NOMINEE FOR ACN PARTNERSHIP | ||||
As of and for the year ended June 30, 2005: | ||||
F-81 | ||||
F-82 | ||||
F-83 | ||||
F-84 |
F-1
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F-2
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For the year ended 30 June 2006
Restated | Restated | Restated | ||||||||||||||
30 June | 30 June | 31 December | ||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||
Note | 12 Months | 6 Months | 12 Months | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Revenue | ||||||||||||||||
Sale and modification of containers | 46,097 | 17,534 | 35,463 | |||||||||||||
Hire of containers | 21,290 | 9,339 | 16,756 | |||||||||||||
Total revenue | 67,387 | 26,873 | 52,219 | |||||||||||||
Other income | 3 | 35 | 18 | 31 | ||||||||||||
Changes in inventories of finished goods and WIP | (3,475 | ) | (1,936 | ) | 1,740 | |||||||||||
Purchases of finished goods and consumables used | (40,243 | ) | (14,687 | ) | (34,437 | ) | ||||||||||
Employee benefits expense | (10,157 | ) | (4,794 | ) | (7,525 | ) | ||||||||||
Depreciation and amortisation expense | (4,480 | ) | (2,041 | ) | (3,943 | ) | ||||||||||
Other expenses | 4 | (6,411 | ) | (2,820 | ) | (4,568 | ) | |||||||||
Results from operating activities | 2,656 | 613 | 3,517 | |||||||||||||
Financial income | 6 | 552 | 429 | 118 | ||||||||||||
Financial expenses | 6 | (4,064 | ) | (1,457 | ) | (3,252 | ) | |||||||||
Net financing costs | (3,512 | ) | (1,028 | ) | (3,134 | ) | ||||||||||
Share of profit of associate | 11 | — | 172 | 92 | ||||||||||||
Profit/(loss) before tax | (856 | ) | (243 | ) | 475 | |||||||||||
Income tax benefit | 7 | 525 | 30 | 4 | ||||||||||||
Profit/(loss) after tax | (331 | ) | (213 | ) | 479 | |||||||||||
Attributable to: | ||||||||||||||||
Equity holders of the parent | (331 | ) | (213 | ) | 479 | |||||||||||
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Restated | Restated | Restated | ||||||||||||||
30 June | 30 June | 31 December | ||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||
Note | 12 Months | 6 Months | 12 Months | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Net income/(loss) recognised directly in equity | — | — | — | |||||||||||||
Profit/(loss) for the period | (331 | ) | (213 | ) | 479 | |||||||||||
Total recognised income and expense for the period | 19 | (331 | ) | (213 | ) | 479 | ||||||||||
Attributable to: | ||||||||||||||||
Equity holders of the parent | (331 | ) | (213 | ) | 479 | |||||||||||
F-4
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As at 30 June 2006
Restated | Restated | Restated | ||||||||||||||
Note | 30 June 2006 | 30 June 2005 | 31 December 2004 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
ASSETS | ||||||||||||||||
Cash and cash equivalents | 8 | 777 | 695 | 3 | ||||||||||||
Trade and other receivables | 9 | 10,206 | 7,876 | 7,024 | ||||||||||||
Inventories | 10 | 7,498 | 4,023 | 2,140 | ||||||||||||
Total current assets | 18,481 | 12,594 | 9,167 | |||||||||||||
Receivables | 9 | 775 | 839 | 1,194 | ||||||||||||
Investments accounted for using the equity method | 11 | — | 427 | 255 | ||||||||||||
Property, plant and equipment | 12 | 3,599 | 3,306 | 1,812 | ||||||||||||
Container hire fleet | 13 | 38,491 | 25,779 | 22,447 | ||||||||||||
Intangible assets | 14 | 5,060 | 4,207 | 4,515 | ||||||||||||
Total non-current assets | 47,925 | 34,558 | 30,223 | |||||||||||||
Total assets | 66,406 | 47,152 | 39,390 | |||||||||||||
LIABILITIES | ||||||||||||||||
Trade and other payables | 15 | 12,509 | 8,228 | 11,530 | ||||||||||||
Interest-bearing loans and borrowings | 16 | 8,939 | 2,778 | 1,425 | ||||||||||||
Current tax liability | — | — | 791 | |||||||||||||
Employee benefits | 17 | 962 | 801 | 444 | ||||||||||||
Provisions | 18 | 300 | — | — | ||||||||||||
Total current liabilities | 22,710 | 11,807 | 14,190 | |||||||||||||
Non-current liabilities | ||||||||||||||||
Interest bearing loans and borrowings | 16 | 37,194 | 30,175 | 20,614 | ||||||||||||
Deferred tax liabilities | 7 | 824 | 119 | 119 | ||||||||||||
Employee benefits | 17 | 567 | 227 | 308 | ||||||||||||
Provisions | 18 | 282 | 8 | 8 | ||||||||||||
Total non-current liabilities | 38,867 | 30,529 | 21,049 | |||||||||||||
Total liabilities | 61,577 | 42,336 | 35,239 | |||||||||||||
Net assets | 4,829 | 4,816 | 4,151 | |||||||||||||
Equity | ||||||||||||||||
Issued capital | 19 | 4,550 | 4,550 | 3,672 | ||||||||||||
Retained earnings/(accumulated losses) | 19 | (65 | ) | 266 | 479 | |||||||||||
Reserves | 19 | 344 | — | — | ||||||||||||
Total equity attributable to equity holders of the parent | 4,829 | 4,816 | 4,151 | |||||||||||||
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Restated | Restated | Restated | ||||||||||||||
30 June 2006 | 30 June 2005 | 31 December 2004 | ||||||||||||||
Note | 12 Months | 6 Months | 12 Months | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Cash flows from operating activities | ||||||||||||||||
Cash receipts from customers | 71,375 | 29,238 | 56,324 | |||||||||||||
Cash paid to suppliers and employees | (54,343 | ) | (25,334 | ) | (49,584 | ) | ||||||||||
Cash generated from operations | 17,032 | 3,904 | 6,740 | |||||||||||||
Interest paid | (3,041 | ) | (1,270 | ) | (1,721 | ) | ||||||||||
Income taxes received/(paid) | — | (759 | ) | 781 | ||||||||||||
Net cash from operating activities | 25 | 13,991 | 1,875 | 5,800 | ||||||||||||
Cash flows from investing activities | ||||||||||||||||
Proceeds from sale of property, plant and equipment | 70 | 24 | 74 | |||||||||||||
Interest received | 209 | 104 | 118 | |||||||||||||
Acquisition of subsidiary, net of cash acquired | 24 | (6,490 | ) | — | — | |||||||||||
Acquisition of property, plant and equipment | 12 | (1,119 | ) | (1,937 | ) | (1,254 | ) | |||||||||
Acquisition of container hire fleet | 13 | (18,073 | ) | (7,725 | ) | (12,003 | ) | |||||||||
Acquisition of intangible assets | 14 | (496 | ) | (25 | ) | (70 | ) | |||||||||
Payment of deferred purchase consideration | — | (3,500 | ) | — | ||||||||||||
Net cash from investing activities | (25,899 | ) | (13,059 | ) | (13,135 | ) | ||||||||||
Cash flows from financing activities | ||||||||||||||||
Payment of finance lease liabilities | (756 | ) | (385 | ) | (1,910 | ) | ||||||||||
Proceeds from borrowings | 24,736 | 12,987 | 19,682 | |||||||||||||
Repayment of borrowings | (14,116 | ) | (1,071 | ) | (12,755 | ) | ||||||||||
Proceeds from calls made on shares | — | 878 | — | |||||||||||||
Net cash from financing activities | 9,864 | 12,409 | 5,017 | |||||||||||||
Net increase / (decrease) in cash and cash equivalents | (2,044 | ) | 1,225 | (2,318 | ) | |||||||||||
Cash and cash equivalents at beginning of period | 695 | (530 | ) | 1,788 | ||||||||||||
Cash and cash equivalents at 30 June | 8 | (1,349 | ) | 695 | (530 | ) | ||||||||||
F-6
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1. | Significant accounting policies |
(a) | Statement of compliance |
(b) | Basis of preparation |
• | AASB 7Financial instruments: Disclosure(August 2005) replacing the presentation requirements of financial instruments in AASB 132. AASB 7 is applicable for annual reporting periods beginning on or after 1 January 2007; | |
• | AASB 2005-9Amendments to Australian Accounting Standards(September 2005) requires that liabilities arising from the issue of financial guarantee contracts are recognised in the balance sheet. AASB 2005-9 is applicable for annual reporting periods beginning on or after 1 January 2006; | |
• | AASB 2005-10Amendments to Australian Accounting Standards(September 2005) makes consequential amendments to AASB 132Financial Instruments: Disclosures and Presentation, AASB 101Presentation of Financial Statements, AASB 114Segment Reporting, AASB 117Leases, AASB 139Financial Instruments: Recognition and Measurement, AASB 1First-time Adoption of Australian Equivalents to International Financial Reporting Standards, arising from the release of AASB 7. AASB 2005-10 is applicable for annual reporting periods beginning on or after 1 January 2007. |
F-7
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(c) | Basis of consolidation |
F-8
Table of Contents
(d) | Foreign currency transactions |
(e) | Derivative financial instruments |
F-9
Table of Contents
(f) | Property, plant and equipment |
F-10
Table of Contents
2004-2005 | 2006 | |||
Property, plant and equipment | ||||
Plant and equipment | 3 - 10 years | 3 - 10 years | ||
Motor vehicles | 3 - 10 years | 3 - 10 years | ||
Furniture and fittings | 5 - 10 years | 5 - 10 years | ||
Container hire fleet | ||||
Containers for hire | 10 years (20% residual) | 10 - 25 years (20% residual) | ||
Leased containers for hire (used) | 10 years (20% residual) | 10 - 25 years (20% residual) | ||
Leased containers for hire (new) | 25 years (20% residual) | 10 - 30 years (20-30% residual) |
(g) | Container hire fleet |
(h) | Intangible assets |
F-11
Table of Contents
• Goodwill | indefinite | |
• Software | 3 years | |
• Development assets | 5 years or the products expected life cycle, as appropriate |
(i) | Trade and other receivables |
(j) | Inventories |
(k) | Cash and cash equivalents |
F-12
Table of Contents
(l) | Impairment |
(m) | Interest bearing borrowings |
F-13
Table of Contents
(n) | Employee benefits |
(o) | Provisions |
F-14
Table of Contents
(p) | Trade and other payables |
(q) | Revenue |
• | persuasive evidence of an arrangement exists; | |
• | delivery has occurred; | |
• | the seller’s price to the customer is fixed or determinable; and | |
• | collectability is reasonable assured. |
(r) | Net financing costs |
F-15
Table of Contents
(s) | Income tax |
F-16
Table of Contents
(t) | Goods and services tax |
(u) | Segment reporting |
(v) | Accounting estimates and judgments |
F-17
Table of Contents
(w) | Correction of prior period errors |
F-18
Table of Contents
Restated | ||||||||||||||||
30 June | 30 June | |||||||||||||||
Note | 2006 | Restatement | 2006 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Current assets | 18,481 | — | 18,481 | |||||||||||||
Other non-current assets | 42,865 | — | 42,865 | |||||||||||||
Deferred tax assets | 127 | (127 | ) | — | ||||||||||||
Intangible assets | 7,246 | (2,186 | ) | 5,060 | ||||||||||||
Total non current assets | 50,238 | (2,313 | ) | 47,925 | ||||||||||||
Total assets | 68,719 | (2,313 | ) | 66,406 | ||||||||||||
Total current liabilities | 22,710 | — | 22,710 | |||||||||||||
Deferred tax liability | — | 824 | 824 | |||||||||||||
Other non-current liabilities | 38,043 | — | 38,043 | |||||||||||||
Total non-current liabilities | 38,043 | 824 | 38,867 | |||||||||||||
Total liabilities | 60,753 | 824 | 61,577 | |||||||||||||
Net assets | 7,966 | (3,137 | ) | 4,829 | ||||||||||||
Total equity | 7,966 | (3,137 | ) | 4,829 | ||||||||||||
Restated | ||||||||||||||||
30 June | 30 June | |||||||||||||||
Note | 2006 | Restatement | 2006 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Results from operating activities | 3,563 | (907 | ) | 2,656 | ||||||||||||
Net financing costs | (3,512 | ) | — | (3,512 | ) | |||||||||||
Profit/(loss) before tax | 51 | (907 | ) | (856 | ) | |||||||||||
Income tax benefit | 2,571 | (2,046 | ) | 525 | ||||||||||||
Profit/(loss) after tax | 2,622 | (2,953 | ) | (331 | ) | |||||||||||
F-19
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Restated | ||||||||||||||||
30 June | 30 June | |||||||||||||||
Note | 2005 | Restatement | 2005 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Current assets | 12,594 | — | 12,594 | |||||||||||||
Other non-current assets | 30,351 | — | 30,351 | |||||||||||||
Deferred tax assets | — | — | — | |||||||||||||
Intangible assets | 5,486 | (1,279 | ) | 4,207 | ||||||||||||
Total non current assets | 35,837 | (1,279 | ) | 34,558 | ||||||||||||
Total assets | 48,431 | (1,279 | ) | 47,152 | ||||||||||||
Total current liabilities | 11,807 | — | 11,807 | |||||||||||||
Deferred tax liability | 1,214 | (1,095 | ) | 119 | ||||||||||||
Other non-current liabilities | 30,410 | — | 30,410 | |||||||||||||
Total non-current liabilities | 31,624 | (1,095 | ) | 30,529 | ||||||||||||
Total liabilities | 43,431 | (1,095 | ) | 42,336 | ||||||||||||
Net assets | 5,000 | (184 | ) | 4,816 | ||||||||||||
Total equity | 5,000 | (184 | ) | 4,816 | ||||||||||||
Restated | ||||||||||||||||
30 June | 30 June | |||||||||||||||
Note | 2005 | Restatement | 2005 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Results from operating activities | 740 | (127 | ) | 613 | ||||||||||||
Net financing costs | (1,028 | ) | — | (1,028 | ) | |||||||||||
Share of profit of associate | 172 | — | 172 | |||||||||||||
Loss before tax | (116 | ) | (127 | ) | (243 | ) | ||||||||||
Income tax benefit | 59 | (29 | ) | 30 | ||||||||||||
Loss after tax | (57 | ) | (156 | ) | (213 | ) | ||||||||||
F-20
Table of Contents
Restated | ||||||||||||||||
31 December | 31 December | |||||||||||||||
Note | 2004 | Restatement | 2004 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Current assets | 9,167 | — | 9,167 | |||||||||||||
Other non-current assets | 25,708 | — | 25,708 | |||||||||||||
Deferred tax assets | 625 | (625 | ) | — | ||||||||||||
Intangible assets | 5,667 | (1,152 | ) | 4,515 | ||||||||||||
Total non current assets | 32,000 | (1,777 | ) | 30,223 | ||||||||||||
Total assets | 41,167 | (1,777 | ) | 39,390 | ||||||||||||
Total current liabilities | 14,190 | — | 14,190 | |||||||||||||
Deferred tax liability | 1,868 | (1,749 | ) | 119 | ||||||||||||
Other non-current liabilities | 20,894 | 36 | 20,930 | |||||||||||||
Total non-current liabilities | 22,762 | (1,713 | ) | 21,049 | ||||||||||||
Total liabilities | 36,952 | (1,713 | ) | 35,239 | ||||||||||||
Net assets | 4,215 | (64 | ) | 4,151 | ||||||||||||
Total equity | 4,215 | (64 | ) | 4,151 | ||||||||||||
Restated | ||||||||||||||||
31 December | 31 December | |||||||||||||||
Note | 2004 | Restatement | 2004 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Results from operating activities | 4,064 | (547 | ) | 3,517 | ||||||||||||
Net financing costs | (3,134 | ) | (3,134 | ) | ||||||||||||
Share of profit of associate | 92 | — | 92 | |||||||||||||
Profit before tax | 1,022 | (547 | ) | 475 | ||||||||||||
Income tax benefit/(expense) | (515 | ) | 519 | 4 | ||||||||||||
Profit after tax | 507 | (28 | ) | 479 | ||||||||||||
2. | Segment information |
3. | Other income |
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
12 Months | 6 Months | 12 Months | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Net gain on disposal of property, plant and equipment | 28 | 17 | 28 | |||||||||
Bad debts recovered | 7 | 1 | 3 | |||||||||
35 | 18 | 31 | ||||||||||
F-21
Table of Contents
4. | Expenses |
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
12 Months | 6 Months | 12 Months | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Cost of sales | 43,718 | 16,623 | 32,697 | |||||||||
Other expenses | ||||||||||||
Operating lease payments | 1,174 | 464 | 793 | |||||||||
Sundry occupancy costs | 143 | 48 | 77 | |||||||||
Business promotion expenses | 1,148 | 329 | 495 | |||||||||
Travel & accommodation | 859 | 416 | 676 | |||||||||
IT & telecommunications | 559 | 269 | 662 | |||||||||
Bad & doubtful debts | 234 | 91 | 55 | |||||||||
Office supplies | 435 | 208 | 321 | |||||||||
Inventory write-down | 146 | 97 | 34 | |||||||||
Other | 1,713 | 898 | 1,455 | |||||||||
6,411 | 2,820 | 4,568 | ||||||||||
5. | Auditors’ remuneration |
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
12 Months | 6 Months | 12 Months | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Audit services | ||||||||||||
Auditors of the Company | ||||||||||||
KPMG Australia | ||||||||||||
Audit and review of financial reports | 99 | 95 | 73 | |||||||||
Other services | ||||||||||||
Auditors of the Company | ||||||||||||
KPMG Australia | ||||||||||||
Other assurance services | — | 18 | — | |||||||||
Taxation services | 20 | — | 35 | |||||||||
20 | 18 | 35 | ||||||||||
F-22
Table of Contents
6. | Net financing costs |
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
12 Months | 6 Months | 12 Months | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Interest income | 209 | 104 | 118 | |||||||||
Net gain on remeasurement of interest rate swap at fair value through profit or loss | 293 | — | — | |||||||||
Net foreign exchange gain | 50 | 325 | — | |||||||||
Financial income | 552 | 429 | 118 | |||||||||
Interest expense | 4,034 | 1,296 | 2,862 | |||||||||
Net foreign exchange loss | — | — | 390 | |||||||||
Net loss on remeasurement of forward exchange contracts at fair value through profit or loss | 30 | — | — | |||||||||
Net loss on remeasurement of interest rate swap at fair value through profit or loss | — | 161 | — | |||||||||
Financial expenses | 4,064 | 1,457 | 3,252 | |||||||||
Net financing costs | 3,512 | 1,028 | 3,134 | |||||||||
7. | Income tax expense |
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
Recognised in the Income Statement | 12 Months | 6 Months | 12 Months | |||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Current tax benefit | ||||||||||||
Current year | — | (30 | ) | (4 | ) | |||||||
Adjustments for prior years | — | — | — | |||||||||
— | (30 | ) | (4 | ) | ||||||||
Deferred tax expense | ||||||||||||
Origination and reversal of temporary differences | 382 | 127 | 547 | |||||||||
Benefit from utilisation of unrecognised deferred tax assets | (907 | ) | (127 | ) | (547 | ) | ||||||
(525 | ) | — | — | |||||||||
Total income tax benefit in income statement | (525 | ) | (30 | ) | (4 | ) | ||||||
Numerical reconciliation between tax expense and pre-tax net profit | ||||||||||||
Profit / (loss) before tax | (856 | ) | (243 | ) | 479 | |||||||
Income tax using the domestic corporation tax rate of 30% | (256 | ) | (73 | ) | 144 | |||||||
Increase in income tax expense due to: | ||||||||||||
Goodwill write off arising from benefit from deferred tax assets not recognized at date of previous business combinations | 272 | 38 | 164 | |||||||||
Non-deductible expenses | 366 | 132 | 235 | |||||||||
Decrease in income tax expense due to: | ||||||||||||
Benefit from utilisation of unrecognised deferred tax asset | (907 | ) | (127 | ) | (547 | ) | ||||||
Income tax benefit on pre-tax net profit | (525 | ) | (30 | ) | (4 | ) | ||||||
F-23
Table of Contents
Assets | Liabilities | Net | ||||||||||||||||||||||||||||||||||
Restated | Restated | Restated | Restated | Restated | Restated | Restated | Restated | Restated | ||||||||||||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | ||||||||||||||||||||||||||||
Property, plant and equipment | — | — | (1,997 | ) | (572 | ) | (321 | ) | (1,997 | ) | (572 | ) | (321 | ) | ||||||||||||||||||||||
Interest bearing loans and borrowings | 125 | 48 | — | — | — | — | 125 | 48 | — | |||||||||||||||||||||||||||
Employee benefits | 368 | 276 | 214 | — | — | — | 368 | 276 | 214 | |||||||||||||||||||||||||||
Other items | 65 | 270 | 410 | (119 | ) | (119 | ) | (119 | ) | (54 | ) | 151 | 291 | |||||||||||||||||||||||
Tax value of loss carry-forwards | 734 | 885 | 731 | — | — | — | 734 | 885 | 731 | |||||||||||||||||||||||||||
Deferred tax valuation allowance | — | (907 | ) | (1,034 | ) | — | — | — | — | (907 | ) | (1,034 | ) | |||||||||||||||||||||||
Tax assets / (liabilities) | 1,292 | 572 | 321 | (2,116 | ) | (691 | ) | (440 | ) | (824 | ) | (119 | ) | (119 | ) | |||||||||||||||||||||
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Tax losses | — | 885 | 731 | |||||||||
Temporary differences | — | 22 | 303 | |||||||||
— | 907 | 1,034 | ||||||||||
8. | Cash and cash equivalents |
Restated | Restated | Restated | ||||||||||||||
30 June | 30 June | 31 December | ||||||||||||||
Note | 2006 | 2005 | 2004 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Bank balances | 20 | 777 | 695 | 3 | ||||||||||||
Cash and cash equivalents | 777 | 695 | 3 | |||||||||||||
Bank overdrafts repayable on demand | 16 | (2,126 | ) | — | (533 | ) | ||||||||||
Cash and cash equivalents in the statement of cash flows | (1,349 | ) | 695 | (530 | ) | |||||||||||
F-24
Table of Contents
9. | Trade and other receivables |
Restated | Restated | Restated | ||||||||||||||
30 June | 30 June | 31 December | ||||||||||||||
Note | 2006 | 2005 | 2004 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Current | ||||||||||||||||
Trade receivables | 9,298 | 6,637 | 6,136 | |||||||||||||
Less: Impairment losses | (177 | ) | (102 | ) | (85 | ) | ||||||||||
9,121 | 6,535 | 6,051 | ||||||||||||||
Receivables from related parties | — | 74 | 89 | |||||||||||||
Lease receivable | 20 | 335 | 180 | 165 | ||||||||||||
Loan to related entity | — | 260 | — | |||||||||||||
Fair value derivatives | 132 | — | — | |||||||||||||
Other receivables and prepayments | 618 | 827 | 719 | |||||||||||||
10,206 | 7,876 | 7,024 | ||||||||||||||
Non-current | ||||||||||||||||
Lease receivable | 20 | 775 | 839 | 934 | ||||||||||||
Loan to related entity | — | — | 260 | |||||||||||||
775 | 839 | 1,194 | ||||||||||||||
10. | Inventories |
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Finished goods | 6,979 | 3,740 | 2,140 | |||||||||
Work in progress | 519 | 283 | — | |||||||||
7,498 | 4,023 | 2,140 | ||||||||||
11. | Investments accounted for using the equity method |
(a) | Investments in associates |
Name of associate company: | Royal Wolf Hi-Tech Pty Limited | |
Principal activities: | Sale, hire and modification of containers | |
Reporting date: | 30 June | |
Ownership interest: | 100% (2005: 50%; 2004: 50%) On 30 March 2006, the remaining 50% in Royal Wolf Hi-Tech Pty Limited was acquired by Royal Wolf Trading Australia Pty Limited — refer to the acquisitions of subsidiaries note 24. |
F-25
Table of Contents
Restated | Restated | |||||||
30 June | 31 December | |||||||
2005 | 2004 | |||||||
A$’000 | A$’000 | |||||||
Revenues (100%) | 1,506 | 1,558 | ||||||
Gross profit (100%) | 1,342 | 1,092 | ||||||
Pretax profit (100%) | 491 | 262 | ||||||
Profit (100%) | 344 | 184 | ||||||
Share of associates net profit recognised | 172 | 92 | ||||||
Current assets (100%) | 492 | 502 | ||||||
Noncurrent assets (100%) | 1,180 | 938 | ||||||
Total assets (100%) | 1,672 | 1,440 | ||||||
Current liabilities (100%) | 644 | 852 | ||||||
Noncurrent liabilities (100%) | 174 | 78 | ||||||
Total liabilities (100%) | 818 | 930 | ||||||
Net assets as reported by associate (100%) | 854 | 510 | ||||||
Share of associate’s net assets equity accounted | 427 | 255 | ||||||
Results of associates | ||||||||
Carrying value of investment in associate at beginning of year | 255 | 163 | ||||||
Share of associate profit before income tax | 246 | 131 | ||||||
Share of income tax expense | (74 | ) | (39 | ) | ||||
Carrying value of investment in associate at end of year | 427 | 255 | ||||||
F-26
Table of Contents
12. | Property, plant and equipment |
Plant and | ||||||||
Equipment, | ||||||||
Fixtures | ||||||||
Note | and Fittings | |||||||
A$’000 | ||||||||
Cost | ||||||||
Balance at 1 January 2004 (restated) | 1,151 | |||||||
Acquisitions | 1,254 | |||||||
Disposals | (69 | ) | ||||||
Balance at 31 December 2004 (restated) | 2,336 | |||||||
Balance at 1 January 2005 (restated) | 2,336 | |||||||
Acquisitions | 1,937 | |||||||
Disposals | (35 | ) | ||||||
Balance at 30 June 2005 (restated) | 4,238 | |||||||
Balance at 1 July 2005 (restated) | 4,238 | |||||||
Acquisitions | 1,119 | |||||||
Acquisitions through business combinations | 24 | 326 | ||||||
Disposals | (107 | ) | ||||||
Balance at 30 June 2006 (restated) | 5,576 | |||||||
F-27
Table of Contents
Plant and | ||||
Equipment, | ||||
Fixtures and | ||||
Fittings | ||||
A$’000 | ||||
Depreciation and impairment losses | ||||
Balance at 1 January 2004 (restated) | — | |||
Depreciation charge for the period | (557 | ) | ||
Disposals | 33 | |||
Balance at 31 December 2004 (restated) | (524 | ) | ||
Balance at 1 January 2005 (restated) | (524 | ) | ||
Depreciation charge for the period | (436 | ) | ||
Disposals | 28 | |||
Balance at 30 June 2005 (restated) | (932 | ) | ||
Balance at 1 July 2005 (restated) | (932 | ) | ||
Depreciation charge for the period | (1,110 | ) | ||
Disposals | 65 | |||
Balance at 30 June 2006 (restated) | (1,977 | ) | ||
Carrying amounts | ||||
At 1 January 2004 (restated) | 1,151 | |||
At 31 December 2004 (restated) | 1,812 | |||
At 1 January 2005 (restated) | 1,812 | |||
At 30 June 2005 (restated) | 3,306 | |||
At 1 July 2005 (restated) | 3,306 | |||
At 30 June 2006 (restated) | 3,599 | |||
F-28
Table of Contents
13. | Container for hire fleet |
Note | A$’000 | |||||||
Cost | ||||||||
Balance at 1 January 2004 (restated) | 17,451 | |||||||
Acquisitions | 12,003 | |||||||
Transfers to inventory | (5,448 | ) | ||||||
Balance at 31 December 2004 (restated) | 24,006 | |||||||
Balance at 1 January 2005 (restated) | 24,006 | |||||||
Acquisitions | 7,725 | |||||||
Transfers to inventory | (3,826 | ) | ||||||
Balance at 30 June 2005 (restated) | 27,905 | |||||||
Balance at 1 July 2005 (restated) | 27,905 | |||||||
Acquisitions | 18,073 | |||||||
Acquisitions through business combinations | 24 | 6,829 | ||||||
Transfers to inventory | (11,337 | ) | ||||||
Balance at 30 June 2006 (restated) | 41,470 | |||||||
Depreciation and impairment losses | ||||||||
Balance at 1 January 2004 (restated) | — | |||||||
Depreciation charge for the period | (2,408 | ) | ||||||
Transfers to inventory | 849 | |||||||
Balance at 31 December 2004 (restated) | (1,559 | ) | ||||||
Balance at 1 January 2005 (restated) | (1,559 | ) | ||||||
Depreciation charge for the period | (1,272 | ) | ||||||
Transfers to inventory | 705 | |||||||
Balance at 30 June 2005 (restated) | (2,126 | ) | ||||||
Balance at 1 July 2005 (restated) | (2,126 | ) | ||||||
Depreciation charge for the period | (1,978 | ) | ||||||
Transfers to inventory | 1,125 | |||||||
Balance at 30 June 2006 (restated) | 2,979 | |||||||
Carrying amounts | ||||||||
At 1 January 2004 (restated) | 17,451 | |||||||
At 31 December 2004 (restated) | 22,447 | |||||||
At 1 January 2005 (restated) | 22,447 | |||||||
At 30 June 2005 (restated) | 25,779 | |||||||
At 1 July 2005 (restated) | 25,779 | |||||||
At 30 June 2006 (restated) | 38,491 | |||||||
F-29
Table of Contents
14. | Intangible assets |
Software | Goodwill | Trademarks | Other | Total | ||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | ||||||||||||||||
Cost | ||||||||||||||||||||
Balance at 1 January 2004 (restated) | 944 | 581 | 398 | — | 1,923 | |||||||||||||||
Acquisitions through business combinations | — | 3,500 | — | — | 3,500 | |||||||||||||||
Other acquisitions | 70 | — | — | — | 70 | |||||||||||||||
Balance at 31 December 2004 (restated) | 1,014 | 4,081 | 398 | — | 5,493 | |||||||||||||||
Balance at 1 January 2005 (restated) | 1,014 | 4,081 | 398 | — | 5,493 | |||||||||||||||
Acquisitions | 25 | — | — | — | 25 | |||||||||||||||
Balance at 30 June 2005 (restated) | 1,039 | 4,081 | 398 | — | 5,518 | |||||||||||||||
Balance at 1 July 2005 (restated) | 1,039 | 4,081 | 398 | — | 5,518 | |||||||||||||||
Acquisitions through business combinations | — | 1,749 | — | — | 1,749 | |||||||||||||||
Other acquisitions | 133 | — | — | 363 | 496 | |||||||||||||||
Balance at 30 June 2006 (restated) | 1,172 | 5,830 | 398 | 363 | 7,763 | |||||||||||||||
Amortisation and impairment losses | ||||||||||||||||||||
Balance at 1 January 2004 (restated) | — | — | — | — | — | |||||||||||||||
Amortisation for the period | (431 | ) | — | — | — | (431 | ) | |||||||||||||
Write off on utilisation of unrecognised tax assets arising from business combinations prior to transition to AIFRS | — | (547 | ) | — | — | (547 | ) | |||||||||||||
Balance at 31 December 2004 (restated) | (431 | ) | (547 | ) | — | — | (978 | ) | ||||||||||||
Balance at 1 January 2005 (restated) | (431 | ) | (547 | ) | — | — | (978 | ) | ||||||||||||
Amortisation for the period | (206 | ) | — | — | — | (206 | ) | |||||||||||||
Write off on utilisation of unrecognised tax assets arising from business combinations prior to transition to AIFRS | — | (127 | ) | — | — | (127 | ) | |||||||||||||
Balance at 30 June 2005 (restated) | (637 | ) | (674 | ) | — | — | (1,311 | ) | ||||||||||||
Balance at 1 July 2005 (restated) | (637 | ) | (674 | ) | — | — | (1,311 | ) | ||||||||||||
Amortisation for the period | (464 | ) | — | — | (21 | ) | (485 | ) | ||||||||||||
Write off on utilisation of unrecognised tax assets arising from business combinations prior to transition to AIFRS | — | (907 | ) | — | — | (907 | ) | |||||||||||||
Balance at 30 June 2006 (restated) | (1,101 | ) | (1,581 | ) | — | (21 | ) | (2,703 | ) | |||||||||||
F-30
Table of Contents
Software | Goodwill | Trademarks | Other | Total | ||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | ||||||||||||||||
Carrying amounts | ||||||||||||||||||||
At 1 January 2004 (restated) | 944 | 581 | 398 | — | 1,923 | |||||||||||||||
At 31 December 2004 (restated) | 583 | 3,534 | 398 | — | 4,515 | |||||||||||||||
1 January 2005 (restated) | 583 | 3,534 | 398 | — | 4,515 | |||||||||||||||
30 June 2005 (restated) | 402 | 3,407 | 398 | — | 4,207 | |||||||||||||||
1 July 2005 (restated) | 402 | 3,407 | 398 | — | 4,207 | |||||||||||||||
30 June 2006 (restated) | 71 | 4,249 | 398 | 342 | 5,060 | |||||||||||||||
F-31
Table of Contents
15. | Trade and other payables |
Restated | Restated | Restated | ||||||||||||||
30 June | 30 June | 31 December | ||||||||||||||
Note | 2006 | 2005 | 2004 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Trade payables | 10,565 | 5,870 | 4,023 | |||||||||||||
Other payables | 1,349 | 1,708 | 1,611 | |||||||||||||
Unearned revenue | 565 | 489 | 470 | |||||||||||||
Deferred consideration for controlled entity | — | — | 3,500 | |||||||||||||
Fair value derivative | 20 | 30 | 161 | — | ||||||||||||
Related party — other payable | — | — | 1,926 | |||||||||||||
12,509 | 8,228 | 11,530 | ||||||||||||||
16. | Interest bearing loans and borrowings |
Restated | Restated | Restated | ||||||||||||||
30 June | 30 June | 31 December | ||||||||||||||
Note | 2006 | 2005 | 2004 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Current liabilities | ||||||||||||||||
Bank overdraft | 8 | 2,126 | — | 533 | ||||||||||||
Current portion of bank loans | 5,831 | 1,939 | — | |||||||||||||
Other loans | 73 | 20 | 343 | |||||||||||||
Current portion of finance lease liabilities | 909 | 819 | 549 | |||||||||||||
8,939 | 2,778 | 1,425 | ||||||||||||||
Non-current liabilities | ||||||||||||||||
Bank loan | 18,099 | 22,364 | 14,489 | |||||||||||||
Non-convertible notes | 10,898 | — | — | |||||||||||||
B class notes | 6,654 | 5,422 | 4,051 | |||||||||||||
Finance lease liabilities | 1,543 | 2,389 | 2,074 | |||||||||||||
37,194 | 30,175 | 20,614 | ||||||||||||||
F-32
Table of Contents
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Bank overdraft | 1,020 | 2,000 | 1,000 | |||||||||
Invoice financing facility | 7,500 | — | — | |||||||||
Secured bank loans | 42,962 | 29,280 | 30,800 | |||||||||
51,482 | 31,280 | 31,800 | ||||||||||
Facilities utilised at reporting date | ||||||||||||
Bank overdraft | 934 | — | 533 | |||||||||
Invoice financing facility | 1,192 | — | — | |||||||||
Secured bank loans | 35,349 | 24,303 | 14,489 | |||||||||
37,475 | 24,303 | 15,022 | ||||||||||
Facilities not utilised at reporting date | ||||||||||||
Bank overdraft | 86 | 2,000 | 467 | |||||||||
Invoice financing facility | 6,308 | — | — | |||||||||
Secured bank loans | 7,613 | 4,977 | 16,311 | |||||||||
14,007 | 6,977 | 16,778 | ||||||||||
F-33
Table of Contents
2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||
Restated | Restated | Restated | ||||||||||||||||||||||||||||||||||
Minimum | Minimum | Minimum | ||||||||||||||||||||||||||||||||||
Lease | Lease | Lease | ||||||||||||||||||||||||||||||||||
Payments | Interest | Principal | Payments | Interest | Principal | Payments | Interest | Principal | ||||||||||||||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | ||||||||||||||||||||||||||||
Less than one year | 1,096 | 187 | 909 | 1,081 | 262 | 819 | 770 | 221 | 549 | |||||||||||||||||||||||||||
Between one and five years | 1,640 | 97 | 1,543 | 2,666 | 277 | 2,389 | 2,342 | 268 | 2,074 | |||||||||||||||||||||||||||
More than five years | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
2,736 | 284 | 2,452 | 3,747 | 539 | 3,208 | 3,112 | 489 | 2,623 | ||||||||||||||||||||||||||||
F-34
Table of Contents
17. | Employee benefits |
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Current | ||||||||||||
Liability for annual leave | 775 | 801 | 444 | |||||||||
Liability for long service leave | 187 | — | — | |||||||||
962 | 801 | 444 | ||||||||||
Non Current | ||||||||||||
Liability for long service leave | 257 | 119 | 272 | |||||||||
Cash settled transactions | 310 | 108 | 36 | |||||||||
567 | 227 | 308 | ||||||||||
Total employee benefits | 1,529 | 1,028 | 752 | |||||||||
• | the exercise price for the options is nil for most employees, with one employee having options exercisable at $0.50 per share | |
• | the options expire on the expiry date or the termination date of the employee, whichever is the earlier | |
• | upon exercise, the nil price and $0.50 options will be settled in the unissued ordinary shares of RWA Holdings Pty Limited | |
• | the nil price options can be settled in cash at the option of the company or the holder and are only exercisable on an exercising or realisation event (see below) |
F-35
Table of Contents
Weighted | Weighted | |||||||||||||||||||||||
Average | Weighted | Average | ||||||||||||||||||||||
Exercise | Number of | Average | Number of | Exercise | Number of | |||||||||||||||||||
Price | Options | Exercise Price | Options | Price | Options | |||||||||||||||||||
12 Months | 12 Months | 6 Months | 6 Months | 12 Months | 12 Months | |||||||||||||||||||
2006 | 2006 | 2005 | 2005 | 2004 | 2004 | |||||||||||||||||||
Outstanding at the beginning of the period | A$ | 0.08 | 438,582 | A$ | 0.08 | 452,982 | N/A | — | ||||||||||||||||
Granted during the period | — | 17,682 | — | — | A$ | 0.08 | 452,982 | |||||||||||||||||
Cancelled during the period | — | (17,865 | ) | — | — | — | — | |||||||||||||||||
Exercised during the period | A$ | 0.50 | (14,400 | ) | A$ | 0.50 | (14,400 | ) | — | — | ||||||||||||||
Expired during the period | — | — | — | — | — | — | ||||||||||||||||||
Outstanding at the end of the period | A$ | 0.08 | 423,999 | A$ | 0.08 | 438,582 | A$ | 0.08 | 452,982 | |||||||||||||||
Exercisable at the end of the period | — | 212,929 | — | 126,832 | — | 144,697 |
• | 363,117 options over ordinary shares with an exercise price of nil, exercisable as above until 31 August 2014, or earlier as appropriate | |
• | 43,200 options over ordinary shares with an exercise price of $0.50, exercisable as above until 17 May 2009, or earlier as appropriate | |
• | 17,682 options over ordinary shares with an exercise price of nil, exercisable as above until 19 Aug 2015, or earlier as appropriate |
F-36
Table of Contents
Key Mgmt | Key Mgmt | Key Mgmt | ||||||||||
Personnel | Personnel | Personnel | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
Fair value at measurement date | A$ | 1.086 | A$ | 0.695 | A$ | 0.575 | ||||||
Share value | A$ | 1.25 | A$ | 0.77 | A$ | 0.65 | ||||||
Weighted average exercise price | A$ | 0.08 | A$ | 0.08 | A$ | 0.08 | ||||||
Expected volatility (based on volatility of similar but listed organisations) | 8.50 | % | 15.19 | % | 15.19 | % | ||||||
Option life (based on date options are expected to be exercised) | 2.25 yrs | 3.25 years | 3.75 years | |||||||||
Risk free rate (based on Australian Government Bonds) | 5.79 | % | 5.10 | % | 5.16 | % |
18. | Provisions |
Leasehold | ||||||||||||
Makegood | Deferred | |||||||||||
Costs | Consideration | Total | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Balance at 1 January 2004 (restated) | — | — | — | |||||||||
Provisions made during the year | 8 | — | 8 | |||||||||
Balance at 31 December 2004 (restated) | 8 | — | 8 | |||||||||
Balance at 1 January 2005 (restated) | 8 | — | 8 | |||||||||
Provisions made during the year | — | — | — | |||||||||
Balance at 30 June 2005 (restated) | 8 | — | 8 | |||||||||
Balance at 1 July 2005 (restated) | 8 | — | 8 | |||||||||
Provisions made during the year | — | 574 | 574 | |||||||||
Balance at 30 June 2006 (restated) | 8 | 574 | 582 | |||||||||
Balance at 30 June 2006 (restated) | ||||||||||||
Current | — | 300 | 300 | |||||||||
Non-current | 8 | 274 | 282 | |||||||||
8 | 574 | 582 | ||||||||||
F-37
Table of Contents
19. | Capital and reserves |
Retained | ||||||||||||||||
Earnings/ | Asset | |||||||||||||||
Share | Accumulated | Revaluation | Total | |||||||||||||
Capital | Losses | Reserve | Equity | |||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | |||||||||||||
Balance at 1 January 2004 (restated) | 3,672 | — | — | 3,672 | ||||||||||||
Total recognised income and expense | — | 479 | — | 479 | ||||||||||||
Balance at 31 December 2004 (restated) | 3,672 | 479 | — | 4,151 | ||||||||||||
Balance at 1 January 2005 (restated) | 3,672 | 479 | — | 4,151 | ||||||||||||
Call on issued shares | 878 | — | — | 878 | ||||||||||||
Total recognised income and expense | — | (213 | ) | — | (213 | ) | ||||||||||
Balance at 30 June 2005 (restated) | 4,550 | 266 | — | 4,816 | ||||||||||||
Balance at 1 July 2005 (restated) | 4,550 | 266 | — | 4,816 | ||||||||||||
Total recognised income and expense | — | (331 | ) | — | (331 | ) | ||||||||||
Revaluation of assets on acquisition of controlled entity | — | — | 344 | 344 | ||||||||||||
Balance at 30 June 2006 (restated) | 4,550 | (65 | ) | 344 | 4,829 | |||||||||||
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
2,160,000 Ordinary Shares | 1,080 | 1,080 | 1,080 | |||||||||
4,322,590 A Class Shares | 3,470 | 3,470 | 2,592 | |||||||||
100 Class C Shares | — | — | — | |||||||||
4,550 | 4,550 | 3,672 | ||||||||||
Movement in A Class Shares paid up value | No. ’000 | A$ | ’000 | |||||||||
At 1 January 2005 | 4,323 | 2,592 | ||||||||||
During 2005, the consolidated entity took up a call of 20.3 cents per share | — | 878 | ||||||||||
At 30 June 2005 | 4,323 | 3,470 | ||||||||||
F-38
Table of Contents
20. | Financial instruments |
F-39
Table of Contents
Effective | ||||||||||||||||||||||||||||
Interest | ||||||||||||||||||||||||||||
Rate | < 1 | 1-2 | 2-5 | >5 | ||||||||||||||||||||||||
30 June 2006 (Restated) | Note | % | Year | Years | Years | Years | Total | |||||||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | ||||||||||||||||||||||||
Fixed rate | ||||||||||||||||||||||||||||
Lease receivable | 9 | 18.1 | % | 335 | 380 | 395 | — | 1,110 | ||||||||||||||||||||
Finance lease liabilities | 16 | 9.0 | % | (909 | ) | (1,104 | ) | (439 | ) | — | (2,452 | ) | ||||||||||||||||
Other loans | 16 | 4.2 | % | (73 | ) | — | — | — | (73 | ) | ||||||||||||||||||
Non-convertible notes | 16 | 15.0 | % | — | — | — | (10,898 | ) | (10,898 | ) | ||||||||||||||||||
B class notes | 16 | 15.0 | % | — | — | — | (6,654 | ) | (6,654 | ) | ||||||||||||||||||
Variable rate | ||||||||||||||||||||||||||||
Cash and cash equivalents | 8 | 3.3 | % | 777 | — | — | — | 777 | ||||||||||||||||||||
Bank loans | 16 | BBSW + 1.10 | % | (4,396 | ) | (1,665 | ) | (10,737 | ) | — | (16,798 | ) | ||||||||||||||||
Interest rate swap | 9 | 6.0 | % | 132 | — | — | — | 132 | ||||||||||||||||||||
Bank overdrafts | 16 | BBSW + 1.65 | % | (2,126 | ) | — | — | — | (2,126 | ) | ||||||||||||||||||
Commercial bills | 16 | 6.9 | % | (1,367 | ) | (1,425 | ) | (4,340 | ) | — | (7,132 | ) | ||||||||||||||||
(7,627 | ) | (3,814 | ) | (15,121 | ) | (17,552 | ) | (44,114 | ) | |||||||||||||||||||
F-40
Table of Contents
Effective | ||||||||||||||||||||||||||||
Interest | ||||||||||||||||||||||||||||
Rate | < 1 | 1-2 | 2-5 | >5 | ||||||||||||||||||||||||
30 June 2005 (Restated) | Note | % | Year | Years | Years | Years | Total | |||||||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | ||||||||||||||||||||||||
Fixed rate | ||||||||||||||||||||||||||||
Lease receivable | 9 | 18.1 | % | 180 | 216 | 623 | — | 1,019 | ||||||||||||||||||||
Finance lease liabilities | 16 | 9.2 | % | (819 | ) | (893 | ) | (1,496 | ) | — | (3,208 | ) | ||||||||||||||||
Other loans | 16 | 3.8 | % | (20 | ) | — | — | — | (20 | ) | ||||||||||||||||||
B class notes | 16 | 15.0 | % | — | — | — | (5,422 | ) | (5,422 | ) | ||||||||||||||||||
Variable rate | ||||||||||||||||||||||||||||
Cash and cash equivalents | 8 | 3.5 | % | 695 | — | — | — | 695 | ||||||||||||||||||||
Bank loans | 16 | BBSW + 1.10 | % | (859 | ) | (869 | ) | (7,336 | ) | — | (9,064 | ) | ||||||||||||||||
Commercial bills | 16 | 5.7 | % | (1,080 | ) | (3,980 | ) | (10,179 | ) | — | (15,239 | ) | ||||||||||||||||
Interest rate swap | 15 | 5.9 | % | (161 | ) | — | — | — | (161 | ) | ||||||||||||||||||
(2,064 | ) | (5,526 | ) | (18,388 | ) | (5,422 | ) | (31,400 | ) | |||||||||||||||||||
Effective | ||||||||||||||||||||||||||||
Interest | ||||||||||||||||||||||||||||
Rate | <1 | 1-2 | 2-5 | >5 | ||||||||||||||||||||||||
31 December 2004 (Restated) | Note | % | Year | Years | Years | Years | Total | |||||||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | ||||||||||||||||||||||||
Fixed rate | ||||||||||||||||||||||||||||
Lease receivable | 9 | 18.1 | % | 165 | 197 | 737 | — | 1,099 | ||||||||||||||||||||
Finance lease liabilities | 16 | 9.2 | % | (549 | ) | (677 | ) | (1,397 | ) | — | (2,623 | ) | ||||||||||||||||
Other loans | 16 | 3.8 | % | (343 | ) | — | — | — | (343 | ) | ||||||||||||||||||
B class notes | 16 | 15.0 | % | — | — | — | (4,051 | ) | (4,051 | ) | ||||||||||||||||||
Variable rate | ||||||||||||||||||||||||||||
Cash and cash equivalent | 8 | 3.51 | % | 3 | — | — | — | 3 | ||||||||||||||||||||
Bank overdraft | 8 | ANZ Ref Rate — 1.0 | % | (533 | ) | — | — | — | (533 | ) | ||||||||||||||||||
Commercial bills | 16 | 5.7 | % | — | (3,479 | ) | (11,010 | ) | — | (14,489 | ) | |||||||||||||||||
(1,257 | ) | (3,959 | ) | (11,670 | ) | (4,051 | ) | (20,937 | ) | |||||||||||||||||||
F-41
Table of Contents
F-42
Table of Contents
Carrying | Carrying | Carrying | ||||||||||||||||||||||||||
Amount | Fair Value | Amount | Fair Value | Amount | Fair Value | |||||||||||||||||||||||
Restated | Restated | Restated | Restated | Restated | Restated | |||||||||||||||||||||||
30 June | 30 June | 30 June | 30 June | 31 December | 31 December | |||||||||||||||||||||||
Note | 2006 | 2006 | 2005 | 2005 | 2004 | 2004 | ||||||||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | |||||||||||||||||||||||
Cash and cash equivalents | 8 | 777 | 777 | 695 | 695 | 3 | 3 | |||||||||||||||||||||
Trade and other receivables | 9 | 9,739 | 9,739 | 7,362 | 7,362 | 6,770 | 6,770 | |||||||||||||||||||||
Receivable from related party | 9 | — | — | 74 | 74 | 89 | 89 | |||||||||||||||||||||
Lease receivable | 9 | 1,110 | 1,110 | 1,019 | 1,019 | 1,099 | 1,099 | |||||||||||||||||||||
Loan to related entity | 9 | — | — | 260 | 260 | 260 | 260 | |||||||||||||||||||||
Interest rate swap | 9 | 132 | 132 | (161 | ) | (161 | ) | — | — | |||||||||||||||||||
Bank overdraft | 16 | (2,126 | ) | (2,126 | ) | — | — | (533 | ) | (533 | ) | |||||||||||||||||
Trade and other payables | 15 | (12,479 | ) | (12,479 | ) | (8,067 | ) | (8,067 | ) | (11,530 | ) | (11,530 | ) | |||||||||||||||
Other loan | 16 | (73 | ) | (73 | ) | (20 | ) | (20 | ) | (343 | ) | (343 | ) | |||||||||||||||
Finance lease liabilities | 16 | (2,452 | ) | (2,452 | ) | (3,208 | ) | (3,208 | ) | (2,623 | ) | (2,623 | ) | |||||||||||||||
Bank loans | 16 | (18,838 | ) | (18,838 | ) | (9,064 | ) | (9,064 | ) | — | — | |||||||||||||||||
Commercial bills | 16 | (5,092 | ) | (5,092 | ) | (15,239 | ) | (15,239 | ) | (14,489 | ) | (14,489 | ) | |||||||||||||||
Forward exchange contracts | 15 | (30 | ) | (30 | ) | — | — | — | — | |||||||||||||||||||
Non-convertible notes | 16 | (10,898 | ) | (10,898 | ) | — | — | — | — | |||||||||||||||||||
B class notes | 16 | (6,654 | ) | (6,654 | ) | (5,422 | ) | (5,422 | ) | (4,051 | ) | (4,051 | ) | |||||||||||||||
(46,884 | ) | (46,884 | ) | (31,771 | ) | (31,771 | ) | (25,348 | ) | (25,348 | ) | |||||||||||||||||
F-43
Table of Contents
30 June | 30 June | 31 December | ||||
2006 | 2005 | 2004 | ||||
Derivatives | 6.0% | 6.0% | N/A | |||
Loans and borrowings | 4.2% - 15.0% | 3.8% - 15.0% | 3.8% - 15.0% | |||
Leases | 9.0% | 9.2% | 9.2% | |||
Receivables | 18.1% | 18.1% | 18.1% |
21. | Operating leases |
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Less than one year | 2,602 | 2,323 | 2,549 | |||||||||
Between one and five years | 2,576 | 1,725 | 2,004 | |||||||||
More than five years | 452 | — | — | |||||||||
5,630 | 4,048 | 4,553 | ||||||||||
F-44
Table of Contents
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Less than one year | 493 | 165 | 52 | |||||||||
Between one and five years | 917 | 1 | — | |||||||||
More than five years | — | — | — | |||||||||
1,410 | 166 | 52 | ||||||||||
22. | Capital and other commitments |
23. | Consolidated entities |
County of | Ownership Interest | |||||||||||||||
Subsidiaries | Note | Incorporation | 2006 | 2004 - 2005 | ||||||||||||
Royal Wolf Trading Australia Pty Limited | Australia | 100 | % | 100 | % | |||||||||||
Royal Wolf Hi-Tech Pty Limited | 24 | Australia | 100 | % | 50 | % |
24. | Acquisitions of subsidiaries |
• | Royal Wolf Hi-Tech Pty Limited | |
• | Australian Container Network Pty Ltd | |
• | Cape Containers Pty Limited |
F-45
Table of Contents
Royal Wolf Hi-Tech | Australian Container Network | Cape Containers | ||||||||||||||||||||||||||||||||||||||
Fair | Fair | Fair | ||||||||||||||||||||||||||||||||||||||
Recog- | Value | Recog- | Value | Recog- | value | |||||||||||||||||||||||||||||||||||
nised | Adjust- | Carrying | nised | Adjust- | Carrying | nised | Adjust- | Carrying | ||||||||||||||||||||||||||||||||
Note | Values | ments | Amounts | Values | ments | Amounts | Values | ments | Amounts | |||||||||||||||||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | ||||||||||||||||||||||||||||||||
Property, plant and equipment | 129 | 31 | 98 | 195 | 23 | 172 | 2 | — | 2 | |||||||||||||||||||||||||||||||
Container hire fleet | 1,768 | 742 | 1,026 | 4,416 | 2,707 | 1,709 | 645 | 169 | 476 | |||||||||||||||||||||||||||||||
Inventories | 105 | 31 | 74 | 555 | 169 | 386 | — | — | — | |||||||||||||||||||||||||||||||
Trade and other receivables | 232 | — | 232 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Cash and cash equivalents | 100 | — | 100 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Interest-bearing loans and borrowings | (501 | ) | — | (501 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Deferred tax liability | (241 | ) | (241 | ) | — | (870 | ) | (870 | ) | — | (51 | ) | (51 | ) | — | |||||||||||||||||||||||||
Trade and other payables | (243 | ) | — | (243 | ) | — | — | — | (18 | ) | — | (18 | ) | |||||||||||||||||||||||||||
Net identifiable assets and liabilities | 1,349 | 563 | 786 | 4,296 | 2,029 | 2,267 | 578 | 118 | 460 | |||||||||||||||||||||||||||||||
Goodwill on acquisitions | 14 | 298 | 1,209 | 242 | ||||||||||||||||||||||||||||||||||||
Consideration paid, satisfied in cash* | 839 | 4,931 | 820 | |||||||||||||||||||||||||||||||||||||
Deferred consideration accrued | — | 574 | — | |||||||||||||||||||||||||||||||||||||
Cash (acquired) | (100 | ) | — | — | ||||||||||||||||||||||||||||||||||||
Net cash outflow | 739 | 4,931 | 820 | |||||||||||||||||||||||||||||||||||||
* | Includes legal fees amounting to $105,000 |
F-46
Table of Contents
25. | Reconciliation of cash flows from operating activities |
Restated | Restated | Restated | ||||||||||||||
30 June | 30 June | 31 December | ||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||
Note | 12 Months | 6 Months | 12 Months | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Cash flows from operating activities | ||||||||||||||||
Profit/(loss) for the period | (331 | ) | (213 | ) | 479 | |||||||||||
Adjustments for: | ||||||||||||||||
Gain on sale of property, plant and equipment | (28 | ) | (17 | ) | (28 | ) | ||||||||||
Foreign exchange (gain) / loss | (50 | ) | (325 | ) | 390 | |||||||||||
Unrealised loss on forward exchange contracts | 30 | — | — | |||||||||||||
Unrealised gain on interest rate swap | (293 | ) | — | — | ||||||||||||
Depreciation and amortisation | 4,480 | 2,041 | 3,943 | |||||||||||||
Share of associates net profit | — | (172 | ) | (92 | ) | |||||||||||
Investment income | (209 | ) | (104 | ) | (118 | ) | ||||||||||
Interest expense | 4,034 | 1,457 | 3,252 | |||||||||||||
Income tax (benefit) / expense | (525 | ) | (30 | ) | (4 | ) | ||||||||||
Cash settled share based payment expenses | 203 | 72 | 36 | |||||||||||||
Operating profit before changes in working capital and provisions | 7,311 | 2,709 | 7,858 | |||||||||||||
(Increase) / decrease in trade and other receivables | (2,377 | ) | (592 | ) | (1,325 | ) | ||||||||||
(Increase) / decrease in inventories | 6,611 | (452 | ) | 3,910 | ||||||||||||
Increase / (decrease) in trade and other payables | 4,412 | 1,963 | (3,747 | ) | ||||||||||||
Increase / (decrease) in provisions and employee benefits | 1,075 | 276 | 44 | |||||||||||||
17,032 | 3,904 | 6,740 | ||||||||||||||
Interest (paid)/recieved | (3,041 | ) | (1,270 | ) | (1,721 | ) | ||||||||||
Income taxes paid | — | (759 | ) | 781 | ||||||||||||
Net cash from operating activities | 13,991 | 1,875 | 5,800 | |||||||||||||
26. | Related parties |
F-47
Table of Contents
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
12 Months | 6 Months | 12 Months | ||||||||||
A$ | A$ | A$ | ||||||||||
Short-term employee benefits | 1,613,765 | 932,509 | 1,342,148 | |||||||||
Other long term benefits | — | — | — | |||||||||
Post-employment benefits | 175,040 | 98,820 | 148,107 | |||||||||
Termination benefits | — | — | — | |||||||||
Share based payment | 92,675 | 31,243 | 17,643 | |||||||||
1,881,480 | 1,062,572 | 1,507,898 | ||||||||||
Key Management Person | 30 June | 30 June | 31 December | |||||||||||||||
Related Party | Transaction | Note | 2006 | 2005 | 2004 | |||||||||||||
A$ | A$ | A$ | ||||||||||||||||
RW Logistic Pty Limited | Sales revenue | (i | ) | — | 45,191 | 3,195,014 | ||||||||||||
RW Logistic Pty Limited | Inventory purchases | (i | ) | — | 2,142,536 | 1,311,593 |
F-48
Table of Contents
(i) | While the Company itself has no interest in RW Logistic Pty Limited, this entity is related through common shareholders and directorships |
27. | Reconciliation to U.S. GAAP |
30 June | 30 June | 31 Dec | ||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||
Note | 12 Months | 6 Months | 12 Month | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Net profit / (loss) after tax as reported in the audited financial statements under AIFRS (restated) | (331 | ) | (213 | ) | 479 | |||||||||||
Write-off of development costs | 1 | (304 | ) | — | — | |||||||||||
Share based payment expense | 3 | (47 | ) | (16 | ) | (94 | ) | |||||||||
Step-up on acquisition | 4 | 19 | — | — | ||||||||||||
Net loss according to US GAAP before tax impact of adjustments | (663 | ) | (229 | ) | 385 | |||||||||||
Tax effect on US GAAP adjustment | 2 | 91 | — | — | ||||||||||||
Net income/(loss) under US GAAP | (572 | ) | (229 | ) | 385 | |||||||||||
30 June | 30 June | 31 Dec | ||||||||||||||
Note | 2006 | 2005 | 2004 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Total equity under AIFRS (restated) | 4,829 | 4,816 | 4,151 | |||||||||||||
Writeoff of development costs | 1 | (304 | ) | — | — | |||||||||||
Tax effect on US GAAP adjustment | 2 | 91 | — | — | ||||||||||||
Share based payments expense | 3 | (157 | ) | (110 | ) | (94 | ) | |||||||||
Step-up on acquisition | 4 | (325 | ) | — | — | |||||||||||
Shareholders’ equity under U.S. GAAP | 4,134 | 4,706 | 4,057 | |||||||||||||
F-49
Table of Contents
Restated | U.S. GAAP | |||||||||||||||
Note | AIFRS | Adjustments | U.S. GAAP | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Revenue | ||||||||||||||||
Sale and modification of containers | 46,097 | — | 46,097 | |||||||||||||
Hire of containers | 21,290 | — | 21,290 | |||||||||||||
Total revenue | 67,387 | — | 67,387 | |||||||||||||
Other income | 35 | — | 35 | |||||||||||||
Changes in inventories of finished goods and WIP | (3,475 | ) | — | (3,475 | ) | |||||||||||
Purchases of finished goods and consumables used | 4 | (40,243 | ) | 9 | (40,234 | ) | ||||||||||
Employee benefits expense | 3 | (10,157 | ) | (47 | ) | (10,204 | ) | |||||||||
Depreciation and amortisation expense | 4 | (4,480 | ) | 912 | (3,568 | ) | ||||||||||
Other expenses | 1 | (6,411 | ) | (304 | ) | (6,715 | ) | |||||||||
Results from operating activities | 2,656 | 570 | 3,226 | |||||||||||||
Financial income | 552 | — | 552 | |||||||||||||
Financial expenses | (4,064 | ) | — | (4,064 | ) | |||||||||||
Net financing costs | (3,512 | ) | — | (3,512 | ) | |||||||||||
Loss before tax | (856 | ) | 570 | (286 | ) | |||||||||||
Income tax benefit/(expense) | 2,4 | 525 | (811 | ) | (286 | ) | ||||||||||
Loss after tax | (331 | ) | (241 | ) | (572 | ) | ||||||||||
Attributable to: | ||||||||||||||||
Equity holders of the parent | (331 | ) | (241 | ) | (572 | ) | ||||||||||
F-50
Table of Contents
Restated | U.S. GAAP | |||||||||||||||
Note | AIFRS | Adjustments | U.S. GAAP | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Revenue | ||||||||||||||||
Sale and modification of containers | 17,534 | — | 17,534 | |||||||||||||
Hire of containers | 9,339 | — | 9,339 | |||||||||||||
Total revenue | 26,873 | — | 26,873 | |||||||||||||
Other income | 18 | — | 18 | |||||||||||||
Changes in inventories of finished goods and WIP | (1,936 | ) | — | (1,936 | ) | |||||||||||
Purchases of finished goods and consumables used | (14,687 | ) | — | (14,687 | ) | |||||||||||
Employee benefits expense | 3 | (4,794 | ) | (16 | ) | (4,810 | ) | |||||||||
Depreciation and amortisation expense | (2,041 | ) | 127 | (1,914 | ) | |||||||||||
Other expenses | (2,820 | ) | — | (2,820 | ) | |||||||||||
Results from operating activities | 613 | 111 | 724 | |||||||||||||
Financial income | 429 | — | 429 | |||||||||||||
Financial expenses | (1,457 | ) | — | (1,457 | ) | |||||||||||
Net financing costs | (1,028 | ) | — | (1,028 | ) | |||||||||||
Share of profit of associate | 172 | — | 172 | |||||||||||||
Loss before tax | (243 | ) | 111 | (132 | ) | |||||||||||
Income tax benefit/(expense) | 30 | (127 | ) | (97 | ) | |||||||||||
Loss after tax | (213 | ) | (16 | ) | (229 | ) | ||||||||||
Attributable to: | ||||||||||||||||
Equity holders of the parent | (213 | ) | (16 | ) | (229 | ) | ||||||||||
F-51
Table of Contents
Restated | U.S. GAAP | |||||||||||||||
Note | AIFRS | Adjustments | U.S. GAAP | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Revenue | ||||||||||||||||
Sale and modification of containers | 35,463 | — | 35,463 | |||||||||||||
Hire of containers | 16,756 | — | 16,756 | |||||||||||||
Total revenue | 52,219 | — | 52,219 | |||||||||||||
Other income | 31 | — | 31 | |||||||||||||
Changes in inventories of finished goods and WIP | 1,740 | — | 1,740 | |||||||||||||
Purchases of finished goods and consumables used | (34,437 | ) | — | (34,437 | ) | |||||||||||
Employee benefits expense | 3 | (7,525 | ) | (94 | ) | (7,619 | ) | |||||||||
Depreciation and amortisation expense | (3,943 | ) | 547 | (3,396 | ) | |||||||||||
Other expenses | (4,568 | ) | — | (4,568 | ) | |||||||||||
Results from operating activities | 3,517 | 453 | 3,970 | |||||||||||||
Financial income | 118 | — | 118 | |||||||||||||
Financial expenses | (3,252 | ) | — | (3,252 | ) | |||||||||||
Net financing costs | (3,134 | ) | — | (3,134 | ) | |||||||||||
Share of profit of associate | 92 | — | 92 | |||||||||||||
Profit before tax | 475 | 453 | 928 | |||||||||||||
Income tax benefit | 7 | 4 | (547 | ) | (543 | ) | ||||||||||
Profit/(loss) after tax | 479 | (94 | ) | 385 | ||||||||||||
Attributable to: | ||||||||||||||||
Equity holders of the parent | 479 | (94 | ) | 385 | ||||||||||||
F-52
Table of Contents
Restated | U.S. GAAP | |||||||||||||||
Note | AIFRS | Adjustments | U.S. GAAP | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | 777 | — | 777 | |||||||||||||
Trade and other receivables | 10,206 | — | 10,206 | |||||||||||||
Inventories | 4 | 7,498 | (20 | ) | 7,478 | |||||||||||
Total current assets | 18,481 | (20 | ) | 18,461 | ||||||||||||
Receivables | 775 | — | 775 | |||||||||||||
Property, plant and equipment | 4 | 3,599 | (19 | ) | 3,580 | |||||||||||
Container hire fleet | 4 | 38,491 | (451 | ) | 38,040 | |||||||||||
Intangible assets | 1,6 | 5,060 | (304 | ) | 4,756 | |||||||||||
Total non-current assets | 47,925 | (774 | ) | 47,151 | ||||||||||||
Total assets | 66,406 | (794 | ) | 65,612 | ||||||||||||
Liabilities | ||||||||||||||||
Trade and other payables | 12,509 | — | 12,509 | |||||||||||||
Interest-bearing loans and borrowings | 8,939 | — | 8,939 | |||||||||||||
Employee benefits | 962 | — | 962 | |||||||||||||
Provisions | 300 | — | 300 | |||||||||||||
Total current liabilities | 22,710 | — | 22,710 | |||||||||||||
Non-current liabilities | ||||||||||||||||
Interest bearing loans and borrowings | 37,194 | — | 37,194 | |||||||||||||
Deferred tax liabilities | 4 | 824 | (256 | ) | 568 | |||||||||||
Employee benefits | 3 | 567 | 157 | 724 | ||||||||||||
Provisions | 282 | — | 282 | |||||||||||||
Total non-current liabilities | 38,867 | (99 | ) | 38,768 | ||||||||||||
Total liabilities | 61,577 | (99 | ) | 61,478 | ||||||||||||
Net assets | 4,829 | (695 | ) | 4,134 | ||||||||||||
Equity | ||||||||||||||||
Issued capital | 4,550 | 4,550 | ||||||||||||||
Accumulated losses | 1-4,6 | (65 | ) | (351 | ) | (416 | ) | |||||||||
Reserves | 4 | 344 | (344 | ) | — | |||||||||||
Total equity attributable to equity holders of the parent | 4,829 | (695 | ) | 4,134 | ||||||||||||
F-53
Table of Contents
Restated | U.S. GAAP | |||||||||||||||
Note | AIFRS | Adjustments | U.S. GAAP | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | 695 | — | 695 | |||||||||||||
Trade and other receivables | 7,876 | — | 7,876 | |||||||||||||
Inventories | 4,023 | — | 4,023 | |||||||||||||
Total current assets | 12,594 | — | 12,594 | |||||||||||||
Receivables | 839 | — | 839 | |||||||||||||
Investments accounted for using the equity method | 427 | — | 427 | |||||||||||||
Property, plant and equipment | 3,306 | — | 3,306 | |||||||||||||
Container hire fleet | 25,779 | — | 25,779 | |||||||||||||
Intangible assets | 6 | 4,207 | — | 4,207 | ||||||||||||
Total non-current assets | 34,558 | — | 34,558 | |||||||||||||
Total assets | 47,152 | — | 47,152 | |||||||||||||
Liabilities | ||||||||||||||||
Trade and other payables | 8,228 | — | 8,228 | |||||||||||||
Interest-bearing loans and borrowings | 2,778 | — | 2,778 | |||||||||||||
Employee benefits | 801 | — | 801 | |||||||||||||
Total current liabilities | 11,807 | — | 11,807 | |||||||||||||
Non-current liabilities | ||||||||||||||||
Interest bearing loans and borrowings | 30,175 | — | 30,175 | |||||||||||||
Deferred tax liabilities | 119 | — | 119 | |||||||||||||
Employee benefits | 3 | 227 | 110 | 337 | ||||||||||||
Provisions | 8 | — | 8 | |||||||||||||
Total non-current liabilities | 30,529 | 110 | 30,639 | |||||||||||||
Total liabilities | 42,336 | 110 | 42,446 | |||||||||||||
Net assets | 4,816 | (110 | ) | 4,706 | ||||||||||||
Equity | ||||||||||||||||
Issued capital | 4,550 | — | 4,550 | |||||||||||||
Retained profits | 3,6 | 266 | (110 | ) | 156 | |||||||||||
Total equity attributable to equity holders of the parent | 4,816 | (110 | ) | 4,706 | ||||||||||||
F-54
Table of Contents
Restated | U.S. GAAP | |||||||||||||||
Note | AIFRS | Adjustments | U.S. GAAP | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | 3 | — | 3 | |||||||||||||
Trade and other receivables | 7,024 | — | 7,024 | |||||||||||||
Inventories | 2,140 | — | 2,140 | |||||||||||||
Total current assets | 9,167 | — | 9,167 | |||||||||||||
Receivables | 1,194 | — | 1,194 | |||||||||||||
Investments accounted for using the equity method | 255 | — | 255 | |||||||||||||
Property, plant and equipment | 1,812 | — | 1,812 | |||||||||||||
Container hire fleet | 22,447 | — | 22,447 | |||||||||||||
Intangible assets | 6 | 4,515 | — | 4,515 | ||||||||||||
Total non-current assets | 30,223 | — | 30,223 | |||||||||||||
Total assets | 39,390 | — | 39,390 | |||||||||||||
Liabilities | ||||||||||||||||
Trade and other payables | 11,530 | — | 11,530 | |||||||||||||
Interest-bearing loans and borrowings | 1,425 | — | 1,425 | |||||||||||||
Current tax liability | 791 | — | 791 | |||||||||||||
Employee benefits | 444 | — | 444 | |||||||||||||
Total current liabilities | 14,190 | — | 14,190 | |||||||||||||
Non-current liabilities | ||||||||||||||||
Interest bearing loans and borrowings | 20,614 | — | 20,614 | |||||||||||||
Deferred tax liabilities | 119 | — | 119 | |||||||||||||
Employee benefits | 3 | 308 | 94 | 402 | ||||||||||||
Provisions | 8 | — | 8 | |||||||||||||
Total non-current liabilities | 21,049 | 94 | 21,143 | |||||||||||||
Total liabilities | 35,239 | 94 | 35,333 | |||||||||||||
Net assets | 4,151 | (94 | ) | 4,057 | ||||||||||||
Equity | ||||||||||||||||
Issued capital | 3,672 | — | 3,672 | |||||||||||||
Retained earnings | 3,6 | 479 | (94 | ) | 385 | |||||||||||
Total equity attributable to equity holders of the parent | 4,151 | (94 | ) | 4,057 | ||||||||||||
F-55
Table of Contents
1. | Development expenditure |
2. | Tax effect of U.S GAAP adjustments |
3. | Share based payments expense |
4. | Step acquisition of Royal Wolf Hi-Tech |
5. | Reconciliation of cash flows |
F-56
Table of Contents
6. | Utilisation of deferred tax assets not recognised in a prior business combination |
28. | Subsequent events |
F-57
Table of Contents
F-58
Table of Contents
Restated | ||||||||
Note | 2003 | |||||||
AUD $ | ||||||||
Revenues from sale and rental of goods | 39,062,025 | |||||||
Other revenue | 4,579,061 | |||||||
Total Revenue | 2 | 43,641,086 | ||||||
Purchases of finished goods including movements in inventory | (14,977,167 | ) | ||||||
Employee expenses | (6,270,525 | ) | ||||||
Container repair costs | (3,742,995 | ) | ||||||
Repositioning, transport and storage costs | (3,170,501 | ) | ||||||
Leasing expenses | (1,722,047 | ) | ||||||
Borrowing costs | 3 | (2,198,074 | ) | |||||
Depreciation and amortisation expenses | 3 | (2,468,571 | ) | |||||
CSC yard costs | (1,189,385 | ) | ||||||
Office rent, supplies and training costs | (794,518 | ) | ||||||
Travel expenses | (505,581 | ) | ||||||
Advertising expenses | (514,834 | ) | ||||||
Communication expenses | (388,456 | ) | ||||||
Professional fees | (334,671 | ) | ||||||
Data processing expenses | (350,429 | ) | ||||||
Other expenses from ordinary activities | (522,016 | ) | ||||||
Correction of fundamental errors | 24 | (1,634,440 | ) | |||||
Share of net profits of investment accounted for using the equity method | 11 | 66,500 | ||||||
Profit from ordinary activities before related income tax expense | 2,923,376 | |||||||
Income tax charge relating to ordinary activities | (1,085,932 | ) | ||||||
Correction of income tax related fundamental errors | 24 | 773,077 | ||||||
Total income tax expense relating to ordinary activities | 5 | (a) | (312,855 | ) | ||||
Net profit | 2,610,521 | |||||||
F-59
Table of Contents
Restated | ||||||||
Note | 2003 | |||||||
AUD $ | ||||||||
Current assets | ||||||||
Cash assets | 6 | 1,788,171 | ||||||
Receivables | 7 | 5,204,625 | ||||||
Inventories | 8 | 3,879,561 | ||||||
Other | 9 | 1,206,013 | ||||||
Total current assets | 12,078,370 | |||||||
Non-current assets | ||||||||
Property, plant & equipment | 10 | 19,547,044 | ||||||
Deferred tax assets | 5 | (c) | 942,348 | |||||
Investments accounted for using the equity method | 11 | 162,500 | ||||||
Intangible assets | 12 | 1,475,517 | ||||||
Other non current assets | 13 | 710,849 | ||||||
Total non-current assets | 22,838,258 | |||||||
Total assets | 34,916,628 | |||||||
Current liabilities | ||||||||
Payables | 14 | 9,850,866 | ||||||
Interest bearing liabilities | 15 | 788,297 | ||||||
Current tax liabilities | 793,793 | |||||||
Provisions | 16 | 582,051 | ||||||
Total current liabilities | 12,015,007 | |||||||
Non-current liabilities | ||||||||
Interest bearing liabilities | 15 | 15,437,785 | ||||||
Deferred tax liabilities | 5 | (b) | 942,348 | |||||
Provisions | 16 | 133,522 | ||||||
Total non-current liabilities | 16,513,655 | |||||||
Total liabilities | 28,528,662 | |||||||
Net assets | 6,387,966 | |||||||
Equity | ||||||||
Contributed equity | 17 | 6,035,409 | ||||||
Retained earnings | 18 | 352,557 | ||||||
Total equity | 6,387,966 | |||||||
F-60
Table of Contents
Restated | ||||||||
Note | 2003 | |||||||
AUD $ | ||||||||
Cash flows from operating activities | ||||||||
Cash receipts in the course of operations | 38,227,988 | |||||||
Cash payments in the course of operations | (25,430,781 | ) | ||||||
Interest received | 36,774 | |||||||
Borrowing costs paid | (2,198,074 | ) | ||||||
Net cash provided by operating activities | 21 | 10,635,907 | ||||||
Cash flows from investing activities | ||||||||
Proceeds on disposal of non current assets | 87,227 | |||||||
Payments for property plant and equipment | (12,482,892 | ) | ||||||
Net cash used in investing activities | (12,395,665 | ) | ||||||
Cash flows from financing activities | ||||||||
Finance lease payments | (5,330,080 | ) | ||||||
Loan and promissory note repayments | (5,995,202 | ) | ||||||
Proceeds from new borrowings | 14,535,753 | |||||||
Loan establishment costs | (450,849 | ) | ||||||
Net cash provided by financing activities | 2,759,622 | |||||||
Net increase in cash held | 999,864 | |||||||
Cash at beginning of year | 788,307 | |||||||
Cash at end of year | 6 | 1,788,171 | ||||||
F-61
Table of Contents
1. | Statement of significant accounting policies |
F-62
Table of Contents
Life | Method | |||
Plant and equipment | 3 - 10 years | straight line | ||
Motor vehicles | 3 - 10 years | straight line | ||
Furniture and fittings | 5 - 10 years | straight line | ||
Containers on hire | 10 years | straight line (20% residual) | ||
Leased containers on hire (used) | 10 years | straight line (20% residual) | ||
Leased containers on hire (new) | 25 years | straight line (20% residual) |
F-63
Table of Contents
F-64
Table of Contents
Restated | ||||||||
Note | 2003 | |||||||
$ | ||||||||
2. Revenue from ordinary activities | ||||||||
Sale of goods revenue from operating activities | 25,972,618 | |||||||
Rental of goods revenue from operating activities | 13,089,407 | |||||||
39,062,025 | ||||||||
Other revenues: | ||||||||
From operating activities | ||||||||
Interest | 36,774 | |||||||
From outside operating activities | ||||||||
Gross proceeds from sale of non current assets | 87,227 | |||||||
Net foreign currency gain | 4,455,060 | |||||||
Total revenues from other activities | 4,579,061 | |||||||
Total revenue | 43,641,086 | |||||||
3. Profit from ordinary activities before income tax expense | ||||||||
a) Individually significant revenues / (expenses) included in profit from ordinary activities before income tax expense | ||||||||
Net foreign currency gain | 4,455,060 | |||||||
Correction of fundamental errors | 24 | (1,634,440 | ) | |||||
b) Profit from ordinary activities before income tax expense has been arrived at after charging/(crediting) the following items | ||||||||
Depreciation of property, plant and equipment | 2,361,795 | |||||||
Amortisation of goodwill | 106,776 | |||||||
Borrowing Costs | 2,198,074 | |||||||
Employee leave entitlements | 341,442 | |||||||
Movement in inventory provision | 148,444 | |||||||
Movement in provision for doubtful debts | (67,620 | ) | ||||||
Net gain on disposal of property, plant and equipment | 3,180 | |||||||
Net foreign currency gain | (4,455,060 | ) | ||||||
Correction of fundamental errors | 24 | 1,634,440 | ||||||
4. Auditor’s remuneration | ||||||||
Auditors of the company — KPMG: | ||||||||
Audit services | 60,000 | |||||||
Taxation services | 112,616 | |||||||
Other services | 4,000 | |||||||
176,616 | ||||||||
F-65
Table of Contents
Restated | ||||||||
Note | 2003 | |||||||
$ | ||||||||
5. Taxation | ||||||||
a) Income tax expense | ||||||||
Prima facie income tax expense calculated at 30% on the profit from ordinary activities | (877,013 | ) | ||||||
Decrease in income tax benefit due to: | ||||||||
Amortisation of goodwill | (32,033 | ) | ||||||
Sundry items | (158,750 | ) | ||||||
Prior year under provision | (18,136 | ) | ||||||
Income tax expense relating to ordinary activities before correction of fundamental errors | (1,085,932 | ) | ||||||
Correction of income tax related fundamental errors — current year | 24 | (ii) | (138,842 | ) | ||||
— prior year | 24 | (i) | 48,840 | |||||
— prior year | 24 | (ii) | 863,079 | |||||
773,077 | ||||||||
Total income tax expense relating to ordinary activities | (312,855 | ) | ||||||
b) Deferred tax liabilities | ||||||||
Provision for deferred income tax | ||||||||
Provision for deferred income tax comprises the estimated expense at the applicable rate of 30% on the following items: | ||||||||
Difference in depreciation and amortisation of property, plant and equipment for accounting and income tax purposes | 942,348 | |||||||
942,348 | ||||||||
c) Deferred tax assets | ||||||||
Future income tax benefit | ||||||||
Future income tax benefit comprises the estimated future benefit at the applicable rate of 30% on the following items: | ||||||||
Unrealised exchange losses not currently deductible | 36,227 | |||||||
Provisions and accrued employee entitlements not currently deductible | 449,032 | |||||||
Withholding tax accrual | 530,405 | |||||||
Sundry items | 65,526 | |||||||
Deferred tax assets not recognized | (138,842 | ) | ||||||
942,348 | ||||||||
6. Cash assets | ||||||||
Cash at bank and on hand | 1,788,171 | |||||||
F-66
Table of Contents
Restated | ||||||||
Note | 2003 | |||||||
$ | ||||||||
7. Receivables | ||||||||
Current | ||||||||
Trade debtors | 5,109,138 | |||||||
Provision for doubtful trade debtors | (129,594 | ) | ||||||
4,979,544 | ||||||||
Other debtors | 40,270 | |||||||
Receivables from related entities | 184,811 | |||||||
5,204,625 | ||||||||
8. Inventories | ||||||||
Stock on hand | 3,998,561 | |||||||
Provision for diminution in value | (119,000 | ) | ||||||
3,879,561 | ||||||||
9. Other current assets | ||||||||
Prepayments | 424,537 | |||||||
Income tax receivable | 24 | 781,476 | ||||||
1,206,013 | ||||||||
10. Property, plant and equipment | ||||||||
Plant and equipment | ||||||||
At cost | 3,055,315 | |||||||
Accumulated depreciation | (1,105,041 | ) | ||||||
1,950,274 | ||||||||
Motor Vehicles | ||||||||
At cost | 286,972 | |||||||
Accumulated depreciation | (141,920 | ) | ||||||
145,052 | ||||||||
Owned containers on hire | ||||||||
At cost | 19,517,682 | |||||||
Accumulated depreciation | (3,549,454 | ) | ||||||
15,968,228 | ||||||||
Leased containers on hire | ||||||||
At cost | 1,600,307 | |||||||
Accumulated depreciation | (116,817 | ) | ||||||
1,483,490 | ||||||||
Total property, plant and equipment | 19,547,044 | |||||||
F-67
Table of Contents
Restated | ||||||||
Note | 2003 | |||||||
$ | ||||||||
Reconciliations | ||||||||
Reconciliations of the carrying amounts for each class of plant and equipment are set out below: | ||||||||
Plant and equipment | ||||||||
Carrying amount at beginning of year | 893,507 | |||||||
Additions | 1,588,247 | |||||||
Disposals | (57,271 | ) | ||||||
Depreciation | (474,209 | ) | ||||||
Carrying amount at end of year | 1,950,274 | |||||||
Motor vehicles | ||||||||
Carrying amount at beginning of year | 131,985 | |||||||
Additions | 117,649 | |||||||
Disposals | (26,776 | ) | ||||||
Depreciation | (77,806 | ) | ||||||
Carrying amount at end of year | 145,052 | |||||||
Owned containers on hire | ||||||||
Carrying amount at beginning of year | 3,937,150 | |||||||
Additions | 7,461,995 | |||||||
Transfers from leased containers | 7,591,395 | |||||||
Transfers to inventory | (2,402,226 | ) | ||||||
Depreciation | (620,086 | ) | ||||||
Carrying amount at end of year | 15,968,228 | |||||||
Leased containers on hire | ||||||||
Carrying amount at beginning of year | 7,493,597 | |||||||
Additions | 3,315,001 | |||||||
Transfers to owned containers | (7,591,395 | ) | ||||||
Transfers to inventory | (544,019 | ) | ||||||
Depreciation | (1,189,694 | ) | ||||||
Carrying amount at end of year | 1,483,490 | |||||||
11. Investments accounted for using the equity method | ||||||||
The company has a 50% interest in Royal Wolf Hi-Tech Pty Limited, (the “Associate”) being a company that sells, hires and modifies shipping containers. Royal Wolf Hi-Tech Pty limited has a balance date of 30 June | ||||||||
Results of Associate | ||||||||
The company’s share of the Associate’s result consists of: | ||||||||
Revenue from ordinary activities | 1,056,578 | |||||||
Expenses from ordinary activities | (990,078 | ) | ||||||
Net profit — accounted for using the equity method | 66,500 |
F-68
Table of Contents
Restated | ||||||||
Note | 2003 | |||||||
$ | ||||||||
Movements in carrying amount of investment | ||||||||
Carrying amount of investments in Associates at beginning of year | 96,000 | |||||||
Share of Associates’ net profit | 66,500 | |||||||
Dividends received from Associate | — | |||||||
Carrying amount of investments in Associates at end of year | 162,500 | |||||||
The Associate has no future commitments for capital expenditure | ||||||||
12. Intangible assets | ||||||||
Goodwill: | ||||||||
At cost | 2,135,528 | |||||||
Accumulated amortization | (660,011 | ) | ||||||
1,475,517 | ||||||||
13. Other non-current assets | ||||||||
Loan to related party | 260,000 | |||||||
Loan establishment costs | ||||||||
At cost | 450,849 | |||||||
Accumulated amortisation | — | |||||||
450,849 | ||||||||
710,849 | ||||||||
14. Payables | ||||||||
Trade creditors | 6,004,574 | |||||||
Accruals | 3,441,646 | |||||||
Unearned income | 404,646 | |||||||
9,850,866 | ||||||||
15. Interest bearing liabilities | ||||||||
Current | ||||||||
Bank loan | 540,000 | |||||||
Other loan | 113,928 | |||||||
Lease liability | 134,369 | |||||||
788,297 | ||||||||
Non-current | ||||||||
Bank loan | 12,040,000 | |||||||
Other loan — parent entity | 1,955,753 | |||||||
Lease liability | 1,442,032 | |||||||
15,437,785 | ||||||||
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Restated | ||||||||
Note | 2003 | |||||||
$ | ||||||||
Financing arrangements | ||||||||
Facilities available at balance date | ||||||||
Finance leases | 4,576,401 | |||||||
Secured bank loans | 13,500,000 | |||||||
18,076,401 | ||||||||
Facilities utilised at reporting date | ||||||||
Finance leases | 1,576,401 | |||||||
Secured bank loans | 12,580,000 | |||||||
14,156,401 | ||||||||
Facilities not utilised at reporting date | ||||||||
Finance leases | 3,000,000 | |||||||
Secured bank loans | 920,000 | |||||||
3,920,000 |
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16. | Provisions |
Restated | ||||||||
Note | 2003 | |||||||
$ | ||||||||
Current | ||||||||
Employee entitlements | 582,051 | |||||||
Non current | ||||||||
Employee entitlements | 133,522 | |||||||
Employee entitlements have been calculated using the following weighted averages | ||||||||
Assumed rate of increase in wages and salary rates | 10 | % | ||||||
Settlement term (years) | 5 |
17. | Contributed equity |
Restated | ||||||||
Note | 2003 | |||||||
$ | ||||||||
Share capital | ||||||||
6,035,409 fully paid ordinary shares | 6,035,409 | |||||||
18. | Retained earnings |
Accumulated losses at beginning of year | (2,257,964 | ) | ||||||
Net profit before correction of prior year fundamental errors | 24 | 3,333,042 | ||||||
Correction of prior year fundamental errors | 24 | (722,521 | ) | |||||
Retained earnings at end of year | 352,557 | |||||||
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19. | Commitments |
Finance lease commitments are payable: | ||||||||
Within one year | 313,170 | |||||||
One year or later and no later than five years | 1,980,487 | |||||||
2,293,657 | ||||||||
Less: Future lease finance charges | (717,256 | ) | ||||||
1,576,401 | ||||||||
Lease liabilities provided for in the financial statements: | ||||||||
Current | 15 | 134,369 | ||||||
Non-current | 15 | 1,442,032 | ||||||
Total lease liability | 1,576,401 |
Future operating lease commitments not provided for in the financial statements and payable: | ||||
Within one year | 2,291,952 | |||
One year or later and no later than five years | 695,825 | |||
2,987,777 | ||||
Future operating lease rentals receivable: | ||||
Within one year | 1,221,685 | |||
One year or later and no later than five years | — | |||
1,221,685 | ||||
20. | Segment reporting |
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Restated | ||||
2003 | ||||
$ | ||||
21. Notes to the statement of cash flows | ||||
a) Reconciliation of cash | ||||
For the purpose of the statement of cash flows, cash includes cash on hand and at bank. Cash as at the end of the financial year is reconciled to the related items in the statement of financial position as follows: | ||||
Cash on hand and at bank | 1,788,171 | |||
b) Reconciliation of net profit from ordinary activities after income tax to net cash provided by operating activities: | ||||
Net profit | 2,610,521 | |||
Add/(less) non cash items: | ||||
Net gain on disposal of property, plant and equipment | (3,180 | ) | ||
Amortisation | 106,776 | |||
Depreciation | 2,361,795 | |||
Share of Associates’ net profit | (66,500 | ) | ||
Unrealised exchange gain | (120,755 | ) | ||
Net cash provided by operating activities before change in assets and liabilities | 4,888,657 | |||
Changes in assets and liabilities: | ||||
Decrease in current receivables | 134,818 | |||
Decrease in current inventories | 1,554,400 | |||
Increase in other assets | (232,631 | ) | ||
Increase in deferred tax assets | (229,288 | ) | ||
Increase in payables | 3,647,993 | |||
Increase in income taxes payable | 793,793 | |||
Decrease in deferred tax liabilities | (241,432 | ) | ||
Increase in provisions for employee entitlements | 319,597 | |||
Net cash provided by operating activities | 10,635,907 | |||
22. | Related parties |
Mr. Michael Baxter
Mr. Robert Carey
Mr. Norman Fricker
Mr. Randolph Gilbert
Mr. Richard Gregson
Mr. Paul Jeffery
Mr. Peter Johnson
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Mr. James Warren
2003 | ||||
No. | ||||
$ 0 - $ 9,999 | 5 | |||
$ 10,000 - $ 19,999 | 1 | |||
$ 70,000 - $ 79,999 | 1 | |||
$150,000 - $159,999 | 1 | |||
$320,000 - $329,999 | 1 | |||
$350,000 - $359,999 | 1 | |||
Total income paid or payable to all Directors from the company or any related party | $ | 908,879 | ||
Number Held | ||||
2003 | ||||
Ordinary shares | Nil |
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23. | Foreign currencies |
24. | Fundamental errors |
2003 | ||||
$ | ||||
Restated | ||||
Profit from ordinary activities before related income tax expense | 4,557,816 | |||
Total income tax expense relating to ordinary activities before effect of errors | (1,085,932 | ) | ||
Correction of fundamental error relating to current year taxation charge (see (ii) above) | (138,842 | ) | ||
Restated income tax charge relating to ordinary activities | (1,224,774 | ) | ||
Net profit from ordinary activities after income tax expense attributable to members of the company | 3,333,042 | |||
Accumulated losses at beginning of year — as previously reported | (2,257,964 | ) | ||
Correction of withholding tax on lease arrangements, net of $48,840 of tax (see (i) above) | (1,585,600 | ) | ||
Correction of opening deferred tax liability (see (ii) above) | 863,079 | |||
Correction of fundamental errors, net of tax | (722,521 | ) | ||
Restated accumulated losses at beginning of year | (2,980,485 | ) | ||
Restated net profit from ordinary activities after income tax expense | 3,333,042 | |||
Restated retained earnings at end of year | 352,557 | |||
Total equity | 6,387,966 | |||
25. | Reconciliation to U.S. GAAP |
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31 December | ||||
2003 | ||||
A$ | ||||
Net profit after tax under AGAAP (restated) | 2,610,521 | |||
Correction of prior period errors (net of tax) | 722,521 | |||
Amortisation of goodwill | 106,776 | |||
Straight lining of leases | (372 | ) | ||
Net income under U.S. GAAP | 3,439,446 | |||
31 December | ||||
2003 | ||||
A$ | ||||
Total equity under AGAAP (restated) | 6,387,966 | |||
Amortisation of goodwill | 213,553 | |||
Goodwill and intangible asset adjustments through impact of push-down accounting | (829,519 | ) | ||
Straight lining of leases | (5,310 | ) | ||
Shareholders’ equity under U.S. GAAP | 5,766,690 | |||
31 December | ||||
2003 | ||||
A$ | ||||
Opening shareholders’ equity at 1 January 2003 under U.S. GAAP | 2,327,244 | |||
Net income under U.S. GAAP | 3,439,446 | |||
Closing shareholders’ equity at 31 December 2003 | 5,766,690 | |||
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Restated | U.S. GAAP | |||||||||||||||
Note | AGAAP | Adjustments | U.S. GAAP | |||||||||||||
A$ | A$ | A$ | ||||||||||||||
Revenues from sale and rental of goods | 39,062,025 | — | 39,062,025 | |||||||||||||
Other revenue | 4,579,061 | — | 4,579,061 | |||||||||||||
Total Revenue | 43,641,086 | — | 43,641,086 | |||||||||||||
Purchases of finished goods including movements in inventory | (14,977,167 | ) | — | (14,977,167 | ) | |||||||||||
Employee expenses | (6,270,525 | ) | — | (6,270,525 | ) | |||||||||||
Container repair costs | (3,742,995 | ) | — | (3,742,995 | ) | |||||||||||
Repositioning, transport and storage costs | (3,170,501 | ) | — | (3,170,501 | ) | |||||||||||
Leasing expenses | (1,722,047 | ) | (372 | ) | (1,722,419 | ) | ||||||||||
Borrowing costs | (2,198,074 | ) | — | (2,198,074 | ) | |||||||||||
Depreciation and amortisation expenses | (2,468,571 | ) | 106,776 | (2,361,795 | ) | |||||||||||
CSC yard costs | (1,189,385 | ) | — | (1,189,385 | ) | |||||||||||
Office rent, supplies and training costs | (794,518 | ) | — | (794,518 | ) | |||||||||||
Travel expenses | (505,581 | ) | — | (505,581 | ) | |||||||||||
Advertising expenses | (514,834 | ) | — | (514,834 | ) | |||||||||||
Communication expenses | (388,456 | ) | — | (388,456 | ) | |||||||||||
Professional fees | (334,671 | ) | — | (334,671 | ) | |||||||||||
Data processing expenses | (350,429 | ) | — | (350,429 | ) | |||||||||||
Other expenses from ordinary activities | (522,016 | ) | — | (522,016 | ) | |||||||||||
Correction of fundamental errors | (1,634,440 | ) | 1,634,440 | — | ||||||||||||
Share of net profits of investment accounted for using the equity method | 66,500 | — | 66,500 | |||||||||||||
Profit from ordinary activities before related income tax expense | 2,923,376 | 1,740,844 | 4,664,220 | |||||||||||||
Income tax charge relating to ordinary activities | (1,085,932 | ) | (138,842 | ) | (1,224,774 | ) | ||||||||||
Correction of income tax related fundamental errors | 773,077 | (773,077 | ) | — | ||||||||||||
Total income tax expense relating to ordinary activities | (312,855 | ) | (911,919 | ) | (1,224,774 | ) | ||||||||||
Net profit | 2,610,521 | 828,925 | 3,439,446 | |||||||||||||
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Restated | U.S. GAAP | |||||||||||
AGAAP | Adjustments | U.S. GAAP | ||||||||||
A$ | A$ | A$ | ||||||||||
Current assets | ||||||||||||
Cash assets | 1,788,171 | — | 1,788,171 | |||||||||
Receivables | 5,204,625 | — | 5,204,625 | |||||||||
Inventories | 3,879,561 | — | 3,879,561 | |||||||||
Other | 1,206,013 | — | 1,206,013 | |||||||||
Total current assets | 12,078,370 | — | 12,078,370 | |||||||||
Non-current assets | ||||||||||||
Property, plant & equipment | 19,547,044 | — | 19,547,044 | |||||||||
Deferred tax assets | 942,348 | (942,348 | ) | — | ||||||||
Investments accounted for using the equity method | 162,500 | — | 162,500 | |||||||||
Intangible assets | 1,475,517 | (496,566 | ) | 978,951 | ||||||||
Other non current assets | 710,849 | (185,225 | ) | 525,624 | ||||||||
Total non-current assets | 22,838,258 | (1,624,139 | ) | 21,214,119 | ||||||||
Total assets | 34,916,628 | (1,624,139 | ) | 33,292,489 | ||||||||
Current liabilities | ||||||||||||
Payables | 9,850,866 | 5,310 | 9,856,176 | |||||||||
Interest bearing liabilities | 788,297 | — | 788,297 | |||||||||
Current tax liabilities | 793,793 | — | 793,793 | |||||||||
Provisions | 582,051 | — | 582,051 | |||||||||
Total current liabilities | 12,015,007 | 5,310 | 12,020,317 | |||||||||
Non-current liabilities | ||||||||||||
Interest bearing liabilities | 15,437,785 | (185,225 | ) | 15,252,560 | ||||||||
Deferred tax liabilities | 942,348 | (822,948 | ) | 119,400 | ||||||||
Provisions | 133,522 | — | 133,522 | |||||||||
Total non-current liabilities | 16,513,655 | (1,008,173 | ) | 15,505,482 | ||||||||
Total liabilities | 28,528,662 | (1,002,863 | ) | 27,525,799 | ||||||||
Net assets | 6,387,966 | (621,276 | ) | 5,766,690 | ||||||||
Equity | ||||||||||||
Contributed equity | 6,035,409 | 6,035,409 | ||||||||||
Retained profits/(accumulated losses) | 352,557 | (621,276 | ) | (268,719 | ) | |||||||
Total equity | 6,387,966 | (621,276 | ) | 5,766,690 | ||||||||
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26. | Events subsequent to balance date |
F-79
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F-80
Table of Contents
TO THE PARTNERS OF
AUSTRALIAN CONTAINER NETWORK PTY LTD AS NOMINEE FOR ACN PARTNERSHIP
A R FITZPATRICK
Partner | Melbourne | 19 January 2007 |
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FOR THE YEAR ENDED 30 JUNE 2005
2005 | 2004 | |||||||||||
Notes | $ | $ | ||||||||||
Revenue | ||||||||||||
Sales revenue | 2 | 2,671,720 | 2,332,870 | |||||||||
Other income | 2 | 1,645,738 | 1,464,086 | |||||||||
4,317,458 | 3,796,956 | |||||||||||
Cost of Sales | (3,103,609 | ) | (2,708,745 | ) | ||||||||
Marketing expenses | (40,048 | ) | (27,206 | ) | ||||||||
Administrative expenses | (742,906 | ) | (624,211 | ) | ||||||||
Other expenses | (102,376 | ) | (136,194 | ) | ||||||||
(3,988,939 | ) | (3,496,356 | ) | |||||||||
Finance costs | 3 | (104,196 | ) | (40,065 | ) | |||||||
Profit before income tax expense | 224,323 | 260,535 | ||||||||||
Income tax | 1(h | ) | — | — | ||||||||
Profit from continuing operations | �� | 224,323 | 260,535 | |||||||||
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AS AT 30 JUNE 2005
2005 | 2004 | |||||||||||
Notes | $ | $ | ||||||||||
CURRENT ASSETS | ||||||||||||
Cash and cash equivalents | 4 | 100 | 19,379 | |||||||||
Trade receivables | 5 | 457,712 | 417,560 | |||||||||
Inventories | 6 | 754,245 | 365,248 | |||||||||
Other | 7 | 29,848 | 29,162 | |||||||||
TOTAL CURRENT ASSETS | 1,241,905 | 831,349 | ||||||||||
NON-CURRENT ASSETS | ||||||||||||
Receivables | 5 | 1,323 | 1,323 | |||||||||
Financial assets at cost | 8 | 4 | 4 | |||||||||
Plant and equipment | 9 | 1,361,360 | 1,113,328 | |||||||||
Intangible assets | 10 | 18,048 | 18,048 | |||||||||
TOTAL NON-CURRENT ASSETS | 1,380,735 | 1,132,703 | ||||||||||
TOTAL ASSETS | 2,622,640 | 1,964,052 | ||||||||||
CURRENT LIABILITIES | ||||||||||||
Trade and other payables | 11 | 528,412 | 452,559 | |||||||||
Short term borrowings | 12 | 717,142 | 342,668 | |||||||||
Provisions | 13 | 30,313 | 25,744 | |||||||||
TOTAL CURRENT LIABILITIES | 1,275,867 | 820,971 | ||||||||||
NON-CURRENT LIABILITIES | ||||||||||||
Long term borrowings | 12 | 726,124 | 564,259 | |||||||||
Provisions | 13 | 29,875 | 20,991 | |||||||||
TOTAL NON-CURRENT LIABILITIES | 755,999 | 585,250 | ||||||||||
TOTAL LIABILITIES | 2,031,866 | 1,406,221 | ||||||||||
NET ASSETS | 590,774 | 557,831 | ||||||||||
PARTNERS’ FUNDS | ||||||||||||
Current accounts | 15 | 590,774 | 557,831 | |||||||||
TOTAL PARTNERS’ FUNDS | 590,774 | 557,831 | ||||||||||
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F-84
Table of Contents
F-85
Table of Contents
F-86
Table of Contents
Operating activities | ||||||||||||
- sale of goods | 2,671,720 | 2,332,870 | ||||||||||
- container hire revenue | 1,643,005 | 1,373,439 | ||||||||||
- interest | 2 | (a) | 603 | 3,720 | ||||||||
- other revenue | 2,130 | 86,927 | ||||||||||
Total Revenue | 4,317,458 | 3,796,956 | ||||||||||
(a) Interest from: | ||||||||||||
- other persons | 603 | 3,720 | ||||||||||
603 | 3,720 | |||||||||||
Note | 2005 | 2004 | ||||||||||
Profit /(losses) before income tax has been determined after: | ||||||||||||
Expenses: | ||||||||||||
Finance costs expense | 104,196 | 40,065 | ||||||||||
Depreciation of non-current assets | ||||||||||||
- Plant and equipment | 32,695 | 32,474 | ||||||||||
- Hire stock | 386,014 | 366,023 | ||||||||||
- Motor vehicles | 25,820 | 30,022 | ||||||||||
- Goodwill amortisation | — | 1,001 | ||||||||||
Bad and doubtful debts | 20,757 | 9,638 | ||||||||||
Rental expense on operating leases | 71,293 | 69,871 | ||||||||||
Foreign currency translation losses (gains) | (386 | ) | (7,001 | ) | ||||||||
Net loss/(gain) on disposal of non-current assets | ||||||||||||
- Plant and equipment | (97,055 | ) | (139,514 | ) | ||||||||
Note | 2005 | 2004 | ||||||||||
Cash on hand | 100 | 100 | ||||||||||
Cash at bank | — | 19,279 | ||||||||||
100 | 19,379 | |||||||||||
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Note | 2005 | 2004 | ||||||||||
CURRENT | ||||||||||||
Trade debtors | 456,537 | 417,560 | ||||||||||
Other debtors | 1,175 | — | ||||||||||
457,712 | 417,560 | |||||||||||
NON-CURRENT | ||||||||||||
Amounts receivable from: | ||||||||||||
- associated companies | 1,323 | 1,323 | ||||||||||
Note | 2005 | 2004 | ||||||||||
CURRENT | ||||||||||||
Work in progress at cost | 17,576 | — | ||||||||||
Finished goods at cost | 736,669 | 365,248 | ||||||||||
754,245 | 365,248 | |||||||||||
Note | 2005 | 2004 | ||||||||||
CURRENT | ||||||||||||
Other current assets | 29,848 | 29,162 | ||||||||||
Note | 2005 | 2004 | ||||||||||
NON CURRENT | ||||||||||||
- Unlisted shares | 4 | 4 | ||||||||||
(a) Classification | ||||||||||||
The carrying amounts of the above financial assets are classified as follows: | ||||||||||||
Designated at fair value on initial recognition | 4 | 4 | ||||||||||
4 | 4 | |||||||||||
F-88
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Note | 2005 | 2004 | ||||||||||
Hire Container | ||||||||||||
At cost | 2,443,277 | 2,021,887 | ||||||||||
Less accumulated depreciation | (1,314,423 | ) | (1,074,189 | ) | ||||||||
1,128,854 | 947,698 | |||||||||||
Plant and Equipment | ||||||||||||
Plant and equipment | ||||||||||||
At cost | 166,813 | 91,560 | ||||||||||
Less accumulated depreciation | (78,588 | ) | (78,825 | ) | ||||||||
88,225 | 12,735 | |||||||||||
Motor vehicles | ||||||||||||
At cost | 227,772 | 196,616 | ||||||||||
Less accumulated depreciation | (112,874 | ) | (87,054 | ) | ||||||||
114,898 | 109,562 | |||||||||||
Office equipment | ||||||||||||
At cost | 14,515 | 16,189 | ||||||||||
Less accumulated depreciation | (6,325 | ) | (6,286 | ) | ||||||||
8,190 | 9,903 | |||||||||||
Computer equipment | ||||||||||||
At cost | 60,782 | 90,905 | ||||||||||
Less accumulated depreciation | (39,589 | ) | (57,475 | ) | ||||||||
21,193 | 33,430 | |||||||||||
Total plant and equipment | 1,361,360 | 1,113,328 | ||||||||||
Hire containers | Plant & equipment | Motor vehicles | Office equipment | |||||||||||||
2005 | $ | $ | $ | $ | ||||||||||||
Balance at the beginning of the year | 947,698 | 12,735 | 109,562 | 9,903 | ||||||||||||
Additions | 783,558 | 83,151 | 31,156 | 1,649 | ||||||||||||
Disposals | (216,389 | ) | — | — | — | |||||||||||
Depreciation expense | (386,014 | ) | (7,661 | ) | (25,820 | ) | (3,362 | ) | ||||||||
Carrying amount at end of year | 1,128,854 | 88,225 | 114,898 | 8,190 | ||||||||||||
F-89
Table of Contents
Computer equipment | Total | |||||||
2005 | $ | $ | ||||||
Balance at the beginning of the year | 33,430 | 1,113,328 | ||||||
Additions | 9,436 | 908,950 | ||||||
Disposals | — | (216,389 | ) | |||||
Depreciation expense | (21,673 | ) | (444,530 | ) | ||||
Carrying amount at the end of the year | 21,193 | 1,361,360 | ||||||
Note | 2005 | 2004 | ||||||||||
Goodwill at cost | 20,000 | 20,000 | ||||||||||
Less accumulated impairment losses | (2,991 | ) | (2,991 | ) | ||||||||
17,009 | 17,009 | |||||||||||
Formation costs at cost | 1,039 | 1,039 | ||||||||||
18,048 | 18,048 | |||||||||||
Note | 2005 | 2004 | ||||||||||
CURRENT | ||||||||||||
Unsecured liabilities | ||||||||||||
Trade creditors | 383,490 | 273,257 | ||||||||||
Sundry creditors and accruals | 144,922 | 179,302 | ||||||||||
528,412 | 452,559 | |||||||||||
Note | 2005 | 2004 | ||||||||||
CURRENT | ||||||||||||
Unsecured liabilities | ||||||||||||
Amounts payable to: | ||||||||||||
- partner related parties | 183,060 | 147,661 | ||||||||||
Secured liabilities | ||||||||||||
Bank overdrafts | 24,012 | — | ||||||||||
Bank loans | 210,591 | — | ||||||||||
Hire purchase liability | 14 | 299,479 | 195,007 | |||||||||
534,082 | 195,007 | |||||||||||
717,142 | 342,668 | |||||||||||
NON-CURRENT | ||||||||||||
Secured liabilities | ||||||||||||
Bank loans | 172,100 | 90,054 | ||||||||||
Hire purchase liability | 14 | 554,024 | 474,205 | |||||||||
726,124 | 564,259 | |||||||||||
F-90
Table of Contents
Note | 2005 | 2004 | ||||||||||
CURRENT | ||||||||||||
Employee benefits | (a | ) | 30,313 | 25,744 | ||||||||
NON-CURRENT | ||||||||||||
Employee benefits | (a | ) | 29,875 | 20,991 | ||||||||
(a) Aggregate employee benefits liability | 60,188 | 46,735 | ||||||||||
Note | 2005 | 2004 | ||||||||||
(a) Hire purchase commitments | ||||||||||||
Payable | ||||||||||||
- not later than one year | 349,143 | 234,723 | ||||||||||
- later than one year and not later than five years | 604,687 | 517,968 | ||||||||||
Minimum hire purchase payments | 953,830 | 752,691 | ||||||||||
Less future finance charges | (100,327 | ) | (83,479 | ) | ||||||||
Total hire purchase liability | 853,503 | 669,212 | ||||||||||
Represented by: | ||||||||||||
Current liability | 12 | 299,479 | 195,007 | |||||||||
Non-current liability | 12 | 554,024 | 474,205 | |||||||||
853,503 | 669,212 | |||||||||||
(b) Operating lease commitments | ||||||||||||
Non-cancellable operating leases contracted for but not capitalised in the financial statements: | ||||||||||||
Payable | ||||||||||||
- not later than one year | 28,300 | 27,309 | ||||||||||
- later than one year and not later than five years | 68,481 | 8,864 | ||||||||||
96,781 | 36,173 | |||||||||||
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Koleet Pty Ltd | ||||||||||||
Opening Balance | 224,399 | 137,554 | ||||||||||
Share of profits | 74,774 | 86,845 | ||||||||||
Drawings | (45,823 | ) | — | |||||||||
Closing Balance | 253,350 | 224,399 | ||||||||||
Caraft Pty Ltd | ||||||||||||
Opening Balance | 135,049 | 48,204 | ||||||||||
Share of profits | 74,774 | 86,845 | ||||||||||
Drawings | (95,979 | ) | — | |||||||||
Closing Balance | 113,844 | 135,049 | ||||||||||
Wellest Pty Ltd | ||||||||||||
Opening Balance | 198,384 | 111,539 | ||||||||||
Share of profits | 74,775 | 86,845 | ||||||||||
Drawings | (49,579 | ) | — | |||||||||
Closing Balance | 223,580 | 198,384 | ||||||||||
590,774 | 557,832 | |||||||||||
F-92
Table of Contents
FOMJ Pty Limited
FOMM Pty Limited
TCWE Pty Limited
(together theManagement Vendors)
The persons listed in Schedule 2(Guarantors)
GFN Australasia Finance Pty Limited(Purchaser)
General Finance Corporation(GFC)
TEL: +61 2 9921 8888 FAX: +61 2 9921 8123
www.minterellison.com
Table of Contents
Details | A-1 | |||
Agreed terms | A-2 | |||
1. Defined terms & interpretation | A-2 | |||
1.1 Defined terms | A-2 | |||
1.2 Interpretation | A-8 | |||
1.3 Headings | A-9 | |||
2. Conditions | A-9 | |||
2.1 Conditions | A-9 | |||
2.2 Waiver of Conditions | A-10 | |||
2.3 Conduct of the parties | A-10 | |||
2.4 Failure of Condition and termination | A-10 | |||
2.5 Extent of obligation to Fulfil Conditions | A-11 | |||
2.6 GFC Shareholder Approval | A-11 | |||
3. Sale and purchase | A-11 | |||
3.1 Agreement to sell and purchase Sale Shares | A-11 | |||
4. Fair Value and Purchase Price | A-11 | |||
4.1 Fair Value | A-11 | |||
4.2 Amount | A-11 | |||
4.3 Deposit | A-12 | |||
4.4 Adjustments | A-12 | |||
4.5 Cash and scrip components of Purchase Price | A-13 | |||
4.6 Net Debt | A-14 | |||
4.7 Reimbursement for acquisitions | A-14 | |||
4.8 Cleared funds | A-14 | |||
4.9 K & S Lease (Curtainsiders) | A-15 | |||
4.10 Additional Amount | A-15 | |||
5. Escrow | A-15 | |||
5.1 Management Vendors Escrow | A-15 | |||
5.2 Equity Partners Escrow | A-16 | |||
5.3 Escrow of GFC Consideration Shares | A-16 | |||
5.4 Interest | A-18 | |||
5.5 Warranty insurance | A-18 | |||
6. Completion | A-18 | |||
6.1 Time and place | A-18 | |||
6.2 Obligations of the Vendors | A-18 | |||
6.3 Obligations of the Purchaser and GFC | A-19 | |||
6.4 Simultaneous actions at Completion | A-19 | |||
6.5 Records | A-20 | |||
6.6 Information and Assistance Following Completion | A-20 | |||
7. Completion Accounts | A-20 | |||
7.1 Completion Accounts | A-20 | |||
7.2 Basis of preparation | A-20 | |||
7.3 Access to information | A-20 | |||
7.4 Review of Completion Accounts | A-20 |
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7.5 Dispute Resolution Procedure | A-20 | |||
7.6 Costs | A-21 | |||
8. Obligations before Completion | A-21 | |||
8.1 Continuity of business | A-21 | |||
8.2 Access to Business and Records | A-22 | |||
8.3 Purchaser’s obligations | A-22 | |||
8.4 Notice of Change | A-22 | |||
8.5 SEC Proxy Filing | A-22 | |||
9. Warranties and Indemnities | A-23 | |||
9.1 Warranties by Vendors | A-23 | |||
9.2 Application of the Warranties | A-23 | |||
9.3 Disclosure | A-24 | |||
9.4 Acknowledgments | A-24 | |||
9.5 No reliance | A-24 | |||
9.6 Financial limits on Claims | A-25 | |||
9.7 Time limits on Claims | A-25 | |||
9.8 Maximum aggregate liability for Claims | A-25 | |||
9.9 Duty to mitigate | A-25 | |||
9.10 Rights of the Purchaser | A-25 | |||
9.11 Benefits or credits received by the Company or the Purchaser | A-26 | |||
9.12 Warranty payments | A-26 | |||
9.13 Trade Practices Act | A-26 | |||
9.14 Financial forecasts | A-26 | |||
9.15 Additional limitations | A-26 | |||
9.16 Vendors’ Tax Indemnity | A-27 | |||
9.17 Limits to recovery | A-27 | |||
9.18 Good faith negotiations in relation to disclosure of material items between signing and Completion | A-27 | |||
10. K&S Lease Indemnity | A-27 | |||
11. ADF Contract | A-28 | |||
12. Environmental audit report | A-28 | |||
13. GFC Undertaking | A-28 | |||
14. Guarantee | A-28 | |||
14.1 Guarantee and indemnity | A-28 | |||
14.2 Enforcement against guarantors | A-29 | |||
14.3 Continuing Guarantee | A-29 | |||
14.4 Principal Obligations | A-29 | |||
14.5 Obligations Absolute and Unconditional | A-29 | |||
14.6 Winding-up or Bankruptcy of Management Vendor | A-30 | |||
14.7 Indemnity in Respect of Management Vendors’ Obligations | A-30 | |||
14.8 Payment under Indemnity | A-30 | |||
14.9 General Application of Indemnity | A-30 | |||
15. Restraint | A-30 | |||
15.1 Definitions | A-30 | |||
15.2 Prohibited activities | A-30 |
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15.3 Duration of prohibition | A-31 | |||
15.4 Geographic application of prohibition | A-31 | |||
15.5 Interpretation | A-31 | |||
15.6 Exceptions | A-31 | |||
15.7 Acknowledgments | A-32 | |||
15.8 Payment of Restraint Amount | A-32 | |||
16. Representations by the Purchaser and GFC | A-32 | |||
16.1 Representations | A-32 | |||
16.2 Application of representations by the Purchaser and GFC | A-32 | |||
17. Equity Partners limitation of liability | A-33 | |||
17.1 Limited capacity | A-33 | |||
17.2 Limited rights to sue | A-33 | |||
17.3 Exceptions | A-33 | |||
17.4 Limitation on authority | A-33 | |||
18. GST | A-33 | |||
18.1 Interpretation | A-33 | |||
18.2 GST gross up | A-33 | |||
18.3 Reimbursements | A-33 | |||
18.4 Tax invoice | A-33 | |||
19. Announcements | A-34 | |||
19.1 Announcements | A-34 | |||
19.2 Equity Partners exception | A-34 | |||
20. Notices and other communications | A-34 | |||
20.1 Service of notices | A-34 | |||
20.2 Effective on receipt | A-34 | |||
21. Miscellaneous | A-35 | |||
21.1 Vendors’ Representatives | A-35 | |||
21.2 Alterations | A-35 | |||
21.3 Approvals and consents | A-35 | |||
21.4 Assignment | A-35 | |||
21.5 Costs | A-35 | |||
21.6 Stamp duty and other duties | A-35 | |||
21.7 Survival | A-35 | |||
21.8 Counterparts | A-35 | |||
21.9 No merger | A-35 | |||
21.10 Entire agreement | A-36 | |||
21.11 Further action | A-36 | |||
21.12 Severability | A-36 | |||
21.13 Waiver | A-36 | |||
21.14 Governing law and jurisdiction | A-36 | |||
21.15 Specific performance | A-36 | |||
22. Trusts | A-36 | |||
Schedule 1 — Shareholdings and Respective Proportions | A-37 | |||
Schedule 2 — Guarantors | A-38 |
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Schedule 3 — Directors and Secretaries to resign and to be appointed | A-39 | |||
Schedule 4 — Title and Capacity Warranties | A-37 | |||
Schedule 5 — Business Warranties | A-38 | |||
Schedule 6 — Leased Premises | A-48 | |||
Schedule 7 — Intellectual Property Rights | A-49 | |||
Schedule 8 — Due Diligence Index | A-50 | |||
Schedule 9 — Accounts | A-62 | |||
Schedule 10 — K&S Lease (Curtainsiders) | A-63 | |||
Schedule 11 — K&S Lease (Reefers) | A-64 | |||
Schedule 12 — Worked examples of Purchase Price adjustments | A-65 | |||
Schedule 13 — Michael Baxter Consultancy Agreement | A-66 | |||
Signing page | A-45 |
A-iv
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Name | Equity Partners Two Pty Limited (as trustee of Equity Partners 2 Trust) | |
ACN | 093 766 280 | |
Short form name | Equity Partners | |
Notice details | Level 12, 60 Margaret Street Sydney NSW 2000 Facsimile 02 8298 5150 Attention Rajeev Dhawan | |
Name | FOMM Pty Limited (as trustee of the FOMM Trust) | |
ACN | 106 818 231 | |
Notice details | 66 Lucinda Avenue, Wahroonga NSW 2076 Facsimile 02 9482 3477 Attention Michael Baxter | |
Name | FOMJ Pty Limited (as trustee of the FOMJ Trust) | |
ACN | 106 818 222 | |
Notice details | 10 Sofala Avenue, Riverview NSW 2066 Facsimile 02 9482 3477 Attention James Warren | |
Name | Cetro Pty Limited (as trustee of the FOMP Trust) | |
ACN | 002 109 668 | |
Notice details | Level 2, 57 Grosvenor Street, Neutral Bay NSW 2089 Facsimile 02 9981 7145 Attention Paul Jeffery | |
Name | TCWE Pty Limited (as trustee of the McCann Family Trust) | |
ACN | 109 083 105 | |
Notice details | 9 Bunyana Avenue WAHROONGA NSW 2076 Facsimile 02 9482 3477 Attention Peter McCann | |
together the Management Vendors | ||
Name | Each person listed in Schedule 2 | |
Short form name | Each aGuarantorand collectively, theGuarantors | |
Name | GFN Australasia Finance Pty Limited | |
ACN | 121 227 790 | |
Short form name | Purchaser | |
Notice details | C/- General Finance Corporation, 260 So. Los Robles Avenue, Suite #217 Pasadena, California 91101 Facsimile +1 626 795 8090 Attention: Mr Ronald F Valenta | |
Name | General Finance Corporation | |
Short form name | GFC | |
Notice details | 260 So. Los Robles Avenue, Suite #217 Pasadena, California 91101 Facsimile +1 626 795 8090 Attention: Mr Ronald F Valenta |
A-1
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1. | Defined terms & interpretation |
A-2
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A-3
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A-4
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A-5
Table of Contents
B = | all debt which the Group has at the close of business on the Completion Date including but not limited to: |
A-6
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A-7
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1.2 | Interpretation |
A-8
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2. | Conditions |
A-9
Table of Contents
A-10
Table of Contents
3. | Sale and purchase |
4. | Fair Value and Purchase Price |
A-11
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A-12
Table of Contents
A-13
Table of Contents
A-14
Table of Contents
5. | Escrow |
A-15
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A-16
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B = | is the aggregate of the number of GFC Consideration Shares cancelled pursuant to clause 5.3(c) and, if there is an outstanding Claim, the number of GFC Consideration Shares that would be cancelled pursuant to clause 5.3(c) if such Claim had been agreed, settled or finalised. |
A-17
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6. | Completion |
A-18
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A-19
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7. | Completion Accounts |
A-20
Table of Contents
8. | Obligations before Completion |
A-21
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A-22
Table of Contents
9. | Warranties and Indemnities |
A-23
Table of Contents
A-24
Table of Contents
A-25
Table of Contents
A-26
Table of Contents
10. | K&S Lease Indemnity |
A-27
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11. | ADF Contract |
12. | Environmental audit report |
13. | GFC Undertaking |
14. | Guarantee |
A-28
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A-29
Table of Contents
15. | Restraint |
A-30
Table of Contents
A-31
Table of Contents
16. | Representations by the Purchaser and GFC |
A-32
Table of Contents
17. | Equity Partners limitation of liability |
A-33
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19. | Announcements |
20. | Notices and other communications |
A-34
Table of Contents
21. | Miscellaneous |
A-35
Table of Contents
22. | Trusts |
A-36
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A-37
Table of Contents
A-38
Table of Contents
A-39
Table of Contents
A-40
Table of Contents
A-41
Table of Contents
A-42
Table of Contents
A-43
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A-44
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EXECUTEDas a deed. | ||||||
ExecutedbyEquity Partners Two Pty Limited in its capacity as trustee of Equity Partners 2 Trust | ||||||
/s/ Rajeev Dhawan | /s/ Quentin Jones | |||||
Signature of director | Signature of director/company secretary (Please delete as applicable) | |||||
Rajeev Dhawan | Quentin Jones | |||||
Name of director (print) | Name of director/company secretary (print) | |||||
ExecutedbyFOMM Pty Limited (as trustee of the FOMM Trust) | ||||||
/s/ Michael Baxter | ||||||
Signature of sole director and sole company secretary | who states that he or she is the sole director and the sole company secretary of the company. | |||||
Michael Baxter | ||||||
Name of sole director and sole company secretary (print) | ||||||
ExecutedbyFOMJ Pty Limited (as trustee of the FOMJ Trust) | ||||||
/s/ James H. Warren | ||||||
Signature of sole director and sole company secretary | who states that he or she is the sole director and the sole company secretary of the company. | |||||
James H. Warren | ||||||
Name of sole director and sole company secretary (print) |
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ExecutedbyCetro Pty Limited (as trustee of the FOMP Trust) | ||||||
/s/ Paul Jeffrey | �� | |||||
Signature of sole director and sole company secretary | who states that he or she is the sole director and the sole company secretary of the company. | |||||
Paul Jeffrey | ||||||
Name of sole director and sole company secretary (print) | ||||||
ExecutedbyTCWE Pty Limited (as trustee of the McCann Family Trust) | ||||||
/s/ Peter McCann | /s/ Alexandra Merton-McCann | |||||
Signature of director | Signature of director/company secretary (Please delete as applicable) | |||||
Peter McCann | Alexandra Merton-McCann | |||||
Name of director (print) | Name of director/company secretary (print) | |||||
SignedbyMichael Paul Baxterin the presence of | ||||||
/s/ Maya Port | /s/ Michael Paul Baxter | |||||
Signature of witness | Michael Paul Baxter | |||||
Maya Port | ||||||
Name of witness (print) | ||||||
SignedbyJames Harold Warrenin the presence of | ||||||
/s/ Maya Port | /s/ James Harold Warren | |||||
Signature of witness | James Harold Warren | |||||
Maya Port | ||||||
Name of witness (print) |
A-46
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SignedbyPaul Henry Jefferyin the presence of | ||||||
/s/ Maya Port | /s/ Paul Henry Jeffery | |||||
Signature of witness | Paul Henry Jeffery | |||||
Maya Port | ||||||
Name of witness (print) | ||||||
SignedbyPeter Linden McCannin the presence of | ||||||
/s/ Maya Port | /s/ Peter Linden McCann | |||||
Signature of witness | Peter Linden McCann | |||||
Maya Port | ||||||
Name of witness (print) | ||||||
ExecutedbyGFN Australasia Finance Pty Limited | ||||||
/s/ John O. Johnson Signature of director | /s/ Robert Charles Barnes Signature of director/company secretary (Please delete as applicable) | |||||
John O. Johnson | Robert Charles Barnes Name of director/company secretary (print) | |||||
ExecutedbyGeneral Finance Corporation | ||||||
/s/ John O. Johnson Signature of director | Signature of director/company secretary (Please delete as applicable) | |||||
John O. Johnson | Name of director/company secretary (print) |
A-47
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A-48
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Name | Equity Partners Two Pty Limited (as trustee of Equity Partners 2 Trust) | |
ACN | 093 766 280 | |
Notice details | Level 12, 60 Margaret Street, Sydney NSW 2000 Facsimile 02 8298 5150 Attention Rajeev Dhawan | |
Name | FOMM Pty Limited (as trustee of the FOMM Trust) | |
ACN | 106 818 231 | |
Notice details | 66 Lucinda Avenue, Wahroonga NSW 2076 Facsimile 02 9482 3477 Attention Michael Baxter | |
Name | FOMJ Pty Limited (as trustee of the FOMJ Trust) | |
ACN | 106 818 222 | |
Notice details | 10 Sofala Avenue, Riverview NSW 2066 Facsimile 02 9482 3477 Attention James Warren | |
Name | Cetro Pty Limited (as trustee of the FOMP Trust) | |
ACN | 002 109 668 | |
Notice details | Level 2, 57 Grosvenor Street, Neutral Bay NSW 2089 Facsimile 02 9981 7145 Attention Paul Jeffery | |
Name | TCWE Pty Limited (as trustee of the McCann Family Trust) | |
ACN | 109 083 105 | |
Notice details | 9 Bunyana Avenue, Wahroonga NSW 2076 Facsimile 02 9482 3477 Attention Peter McCann | |
Name | Michael Paul Baxter | |
Notice details | 66 Lucinda Avenue, Wahroonga NSW 2076 Facsimile 02 9482 3477 | |
Name | James Harold Warren | |
Notice details | 10 Sofala Avenue, Riverview NSW 2066 Facsimile 02 9482 3477 | |
Name | Paul Henry Jeffery | |
Notice details | 8/1150 Pittwater Road, Collaroy NSW 2107 Facsimile 02 9482 3477 | |
Name | Peter Linden McCann | |
Notice details | 9 Bunyana Avenue, Wahroonga NSW 2076 Facsimile 02 9482 3477 |
A-49
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Name | GFN Australasia Finance Pty Limited | |
ACN | 121 227 790 | |
Notice details | C/- General Finance Corporation, 260 So. Los Robles Avenue, Suite #217 Pasadena, California 91101 Facsimile +1 626 795 8090 Attention: Mr Ronald F Valenta | |
Name | General Finance Corporation | |
Notice details | 260 So. Los Robles Avenue, Suite #217 Pasadena, California 91101 Facsimile +1 626 795 8090 Attention: Mr Ronald F Valenta |
A | The parties to this deed are parties to a Share Sale Deed dated 12 September 2006 relating to shares in RWA Holdings Pty Limited (Share Sale Deed). | |
B | The parties have agreed to vary the terms of the Share Sale Deed in accordance with the terms of this deed. |
1. | Defined terms & interpretation |
(a) | a word or expression defined in the Share Sale Deed has the meaning given to it in the Share Sale Deed; |
(b) | clauses 1.2 and 1.3 of the Share Sale Deed apply to this deed, to the extent relevant, as if specifically incorporated in this deed; and |
(c) | to the extent of any inconsistency between this deed and the Share Sale Deed, this deed will prevail. |
2. | Variation |
(a) | the date in clause 2.1(a)(ii) is changed from 17 February 2007 to 26 February 2007; |
(b) | the date in clause 2.1(a)(iii) is changed from 17 March 2007 to 26 March 2007; and |
(c) | in clause 2.4(b) the date that relates to clause 2.1(a)(iii) is changed from 17 March 2007 to 26 March 2007, but the date in clause 2.4(b) that relates to the other conditions referred to in that clause remains at 17 March 2007. |
3. | Continued operation of the Share Sale Deed |
4. | Miscellaneous |
A-50
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EXECUTEDas a deed | ||||||
ExecutedbyEquity Partners Two Pty Limited in its capacity as trustee of Equity Partners 2 Trust | ||||||
/s/ Richard Peter Gregson | /s/ Quentin Jones | |||||
Signature of director | Signature of director/company secretary (Please delete as applicable) | |||||
Richard Peter Gregson | Quentin Jones | |||||
Name of director (print) | Name of director/company secretary (print) | |||||
ExecutedbyFOMM Pty Limited (as trustee of the FOMM Trust) | ||||||
/s/ Michael Baxter | ||||||
Signature of sole director and sole company secretary | who states that he or she is the sole director and the sole company secretary of the company. | |||||
Michael Baxter | ||||||
Name of sole director and sole company secretary (print) | ||||||
ExecutedbyFOMJ Pty Limited (as trustee of the FOMJ Trust) | ||||||
/s/ James H. Warren | ||||||
Signature of sole director and sole company secretary | who states that he or she is the director and the company secretary of the company. | |||||
James H. Warren | ||||||
Name of sole director and sole company secretary (print) |
A-51
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ExecutedbyCetro Pty Limited (as trustee of the FOMP Trust) | ||||||
/s/ Peter Henry Jeffrey | ||||||
Signature of sole director and sole company secretary | who states that he or she is the director and the company secretary of the company. | |||||
Peter Henry Jeffrey | ||||||
Name of sole director and sole company secretary (print) | ||||||
ExecutedbyTCWE Pty Limited (as trustee of the McCann Family Trust) | ||||||
/s/ Peter McCann | /s/ Alexandra Merton-McCann | |||||
Signature of director | Signature of director/company secretary (Please delete as applicable) | |||||
Peter McCann | Alexandra Merton-McCann | |||||
Name of director (print) | Name of director/company secretary (print) | |||||
SignedbyMichael Paul Baxterin the presence of | ||||||
/s/ Gregory Brian Baker | /s/ Michael Paul Baxter | |||||
Signature of witness | Michael Paul Baxter | |||||
Gregory Brian Baker | ||||||
Name of witness (print) | ||||||
SignedbyJames Harold Warrenin the presence of | ||||||
/s/ Yuka Yamasaki | /s/ James Harold Warren | |||||
Signature of witness | James Harold Warren | |||||
Yuka Yamasaki | ||||||
Name of witness (print) |
A-52
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SignedbyPaul Henry Jefferyin the presence of | ||||||
/s/ Jonathan Roy Blaker | /s/ Paul Henry Jeffrey | |||||
Signature of witness | Paul Henry Jeffery | |||||
Jonathan Roy Blaker | ||||||
Name of witness (print) | ||||||
SignedbyPeter Linden McCannin the presence of | ||||||
/s/ Gregory Brian Baker | /s/ Peter Linden McCann | |||||
Signature of witness | Peter Linden McCann | |||||
Gregory Brian Baker | ||||||
Name of witness (print) | ||||||
ExecutedbyGFN Australasia Finance Pty Limited | ||||||
/s/ John O. Johnson | ||||||
Signature of director | ||||||
John O. Johnson | ||||||
John O. Johnson | ||||||
ExecutedbyGeneral Finance Corporation | ||||||
/s/ John O. Johnson | ||||||
Signature of director | ||||||
John O. Johnson | ||||||
John O. Johnson |
A-53
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260 S. Los Robles Avenue, Suite # 217
Pasadena, California 91101
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF GENERAL FINANCE CORPORATION
Table of Contents
1. | To approve General Finance Corporation’s acquisition of RWA Holdings Pty Limited | FOR o | AGAINST o | ABSTAIN o | If you vote “AGAINST” Proposal Number 1 and you hold shares of our common stock originally issued in our initial public offering, you may demand that we convert your shares of common stock into a pro rata portion of the funds held in our trust account by marking the “CONVERSION DEMAND” box below. If you demand conversion and otherwise properly exercise your conversion rights, then you will be exchanging your shares of our common stock for cash and will no longer own these shares. You will only be entitled to receive cash for these shares if the acquisition is completed and you tender your stock certificate to our transfer agent prior to March 20, 2007 and continue to hold these shares through the completion of the acquisition. Failure to (a) vote against the approval of the acquisition, (b) check the following box and (c) submit this proxy and properly tender your share certificate in a timely manner and (d) hold your shares as described in the accompanying proxy statement will result in the loss of your conversion rights. | |||||||
I HEREBY DEMAND CONVERSION OF MY SHARES ELIGIBLE FOR CONVERSION | o | |||||||||||
2. | If there are insufficient votes present at the special meeting for approval of the acquisition, to grant our board of directors discretionary authority to postpone or adjourn the special meeting to solicit additional votes for the acquisition. MARK HERE FOR ADDRESS CHANGE AND NOTE AT RIGHT | FOR o | AGAINST o | ABSTAIN o o |
Signature | Signature | Date | ||||||||