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AnnuAl RepoRt 2013

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ACN

009 134 114

DIRECTORS

Winson Chow Cerena Fu David Hunt Marcus Seow

Alternate Directors

Geoff Grady (alternate Director for Mr Chow) Justin Lorenz (alternate Director for Mr Hunt)

CHIEF EXECUTIVE OFFICER

Jally Lin

COMPANY SECRETARY

Nicole Moodie

REGISTERED OFFICE

Level 5, 99 Macquarie Street Sydney NSW 2000

Telephone: (02) 9270 6100 Facsimile: (02) 9270 6199

Website: ww w.pbddevelopments.com.au Email: admin@pbddevelopments. com.au

SHARE REGISTRY

Computershare Registry Services Pty Ltd Level 4, 60 Carrington Street Sydney NSW 2000 GPO Box 7045 Sydney NSW 2001

Investor Relations Enquiries within Australia: 1300 850 505 Website: http://ww w.computershare.com.au

SOLICITORS

Norton Rose Fulbright Australia Level 39 108 St George’s Terrace Perth WA 6000

Lavan Legal The Quadrant 1 William Street Perth WA 6000

AUDITORS

BDO Audit (WA) Pty Ltd 38 Station Street Subiaco WA 6008

SECURITIES EXCHANGE LISTING

PBD Developments Limited shares are listed on the ASX Limited (ASX Code: PBD).

Corporate DirectoryF

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PBD DeveloPments limiteD AnnuAl RePoRt 1

Letter from the Chairman 2

Letter from the Chief Executive Officer 3

Directors’ Report 4

Auditor’s Independence Declaration 20

Corporate Governance Statement 21

Consolidated Statement of Profit or Loss and Other Comprehensive Income 26

Consolidated Statement of Financial Position 27

Consolidated Statement of Changes in Equity 28

Consolidated Statement of Cash Flows 29

Explanatory Notes to the Consolidated Financial Statements 30

Directors’ Declaration 65

Independent Audit Report 66

Supplementary Securityholder Information 68

CONTENTS OF EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 30

2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES 36

3. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS 39

4. REVENUE AND EXPENSES 40

5. INCOME TAX 41

6. CASH AND CASH EQUIVALENTS 43

7. TRADE AND OTHER RECEIVABLES 43

8. INVENTORIES 44

9. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD 46

10. RECEIVABLE FROM JOINT ARRANGEMENT 46

11. NON-CURRENT ASSETS HELD-FOR-SALE 47

12. PROPERTY, PLANT AND EQUIPMENT 47

13. OTHER ASSETS 48

14. TRADE AND OTHER PAYABLES 48

15. BORROWINGS 48

16. PROVISIONS 49

17. CONTRIBUTED EQUITY 50

18. RESERVES 50

19. DIVIDENDS 51

20. EARNINGS/(LOSS) PER SHARE 51

21. KEY MANAGEMENT PERSONNEL 51

22. RELATED PARTY DISCLOSURE 54

23. REMUNERATION OF AUDITORS 55

24. EXPENDITURE COMMITMENTS 56

25. CONTINGENCIES 56

26. SEGMENT INFORMATION 57

27. NOTES TO CASH FLOW STATEMENT 58

28. SHARE BASED PAYMENTS – EMPLOYEE OPTION PLAN 58

29. DEED OF CROSS GUARANTEE 61

30. PARENT ENTITY FINANCIAL INFORMATION 63

31. EVENTS OCCURRING AFTER THE REPORTING PERIOD 64

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PBD DeveloPments limiteD AnnuAl RePoRt2

ChAiRmAn’s Review 2013 Dear shareholders

the 2013 financial year was a challenging but successful one for PBD Developments limited (the Company, PBD Developments). During the first half of the year the Company executed a difficult but necessary capital management strategy that culminated in a successful entitlement issue, which was completed in January 2013. this enabled the Company to focus on setting the foundations for re-building and growing the Company.

the primary objectives for PBD Developments in the 2013 financial year were to stabilise the Company via injecting new capital and refinancing its current banking facilities. Both these objectives were achieved in January 2013.

A further placement was undertaken in April 2013 which enabled the Company to pursue its new strategy to broaden and reposition its development focus to the eastern seaboard of Australia with investment in Bridgeview, a joint venture development in Annandale, new south wales. with the strategy in place, the Board appointed mr Jally lin as its Chief executive officer in may 2013.

PBD Developments is continuing to review and consider a range of new projects that may meet the Company’s investment and development criteria. As such, since 30 June 2013, the Company is participating in a further joint venture development, Burwood square in Burwood, new south wales.

the Board of PBD Developments also underwent transformation and renewal in the 2013 financial year. since the last Annual General meeting, Directors mr mark Jewell, mr stephen Court and mr Andrew Young (appointed December 2012) have all retired from the Board. in April 2013 ms Cerena Fu was appointed and i was appointed as the Company’s non-executive Chairman of the Board. in october 2013 mr marcus seow was appointed to the Board. mr David hunt continues to be a Director on the Board, in addition to his role as Chairman of the Audit Committee.

with a strengthened capital position and an experienced and energised management team in place i believe we are well positioned to deliver innovative residential developments across Australia and create shareholder value.

Yours sincerely

Winson Chow Chairman

letter from the ChairmanF

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letter from the Chief executive officer

ChieF exeCutive oFFiCeR’s Review 2013 Dear shareholders

PBD Developments limited (the Company, PBD Developments) recorded an underlying loss of $6.1 million for the year ended 30 June 2013, in line with the $6.4 million loss for the 2012 financial year. the statutory result for the 2013 financial year was a $3.6 million loss. this reflects a year which has seen our Company move from a position of financial uncertainty to one with a renewed capital base, revised strategy and growth opportunities for the future.

the Perth property industry is only just starting to recover from challenging market conditions, with the sydney property market having been subject to years of undersupply. Consequently, the Company has shifted its focus to facilitate a greater degree of geographic diversity and is now targeting high value development projects on Australia’s eastern seaboard, specifically in sydney.

Following the successful rights issue completed in January 2013, PBD also undertook a private share placement in April 2013 which raised $7.4 million. the funds were used to acquire an interest in a development project in Annandale, sydney known as ‘Bridgeview’. the project is located approximately five kilometres from the sydney CBD and is 300 metres from the Rozelle Bay light rail station. the Bridgeview site will be transformed into 23 architect-designed townhouses and pre-sales are underway. this project has an end value of $32 million and is forecast to provide good returns back to the Company in the short to medium term.

in addition, PBD Developments entered into a joint venture agreement with B1 Goldfield Development for the development of ‘Burwood square’, a mixed-use project comprising 210 residential apartments and 8,200sqm of retail space located in the suburb of Burwood in sydney’s inner west.

in line with Bridgeview and Burwood square developments, the Company will focus on medium and high density development projects or townhouse and apartment projects. this strategy is a function of targeting inner ring locations, which are typically “brown fill” or urban renewal sites. PBD Developments has a successful track record in this space through its Princeton Private estate project in the inner metro suburb of stirling, immediately to the north of Perth.

PBD Developments will also target masterplanned residential community development opportunities, balancing capital intensity against return. such projects will need to be in areas where the approvals are not lengthy, infrastructure is underway or completed and reasonable demand exists. like the Port Bouvard Residential estate, the Company will seek to add value to any land sub-divisions by creating points of difference which deliver lifestyle opportunities to home owners and their families.

in the 2013 financial year PBD Developments settled 9 contracts at its oceanique apartment development. As at 30 June 2013, 44 out of our total of 66 apartments had settled.

the hotel site at oceanique, a non-core asset, was sold and settled in February 2013. the funds were applied to borrowings and working capital. the remaining two non-core assets, at Bandy Creek (esperance) and lot 370 at Port Bouvard Residential estate, are in the process of being sold.

the Company will continue to monitor market conditions before activating the Point Grey project. in the interim, work is underway to obtain approvals for the marina. PBD Developments has achieved all other key requisite approvals for the project including subdivision approval for the first 341 lots. however, market conditions need to be sufficient to support and warrant the outlay of substantial start-up costs.

in the year ahead, PBD Developments will continue to focus on selling down the remaining units at oceanique, seek Federal Government marina approval for Point Grey, see Bridgeview project fully activated and commence construction of Burwood square. the Company will continue to consider new profitable projects and strategically build the business to ultimately hold a development portfolio with geographic and product diversity in demonstrably successful markets.

the commitment and focus of the PBD Developments team has been important in improving its position over the past six months. i take this opportunity to sincerely thank all our staff, both current and past, for their efforts in taking us through many challenges and for setting PBD Developments towards a period of growth and a return to profitability.

i also wish to thank and acknowledge our shareholders, both longstanding and new, who have demonstrated confidence in the Company. we are working hard to reward your confidence and trust.

Yours sincerely

Jally Lin Chief executive officer

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Your Directors present their report on the Consolidated entity (referred to hereafter as the ‘Group’) consisting of PBD Developments limited (‘Company’) and the entities it controlled at the end of, or during, the year ended 30 June 2013.

DiReCtoRsthe following persons were Directors of PBD Developments limited from the commencement of the financial year and up to the date of this report, unless otherwise specified:

Current Directors:1 Winson Chow Non-Executive Chairman

Appointed as Director on 3 April 2013 and Chairman on 5 April 2013

2 David Allan Hunt Non-Executive Director

Alternate Director for mr Brown from 26 november 2010, Director in his own right from 8 August 2012

3 Cerena Fu Non-Executive Director

Appointed as Director effective 5 April 2013

4 Geoff Earl Grady Alternate Non-Executive Director

Alternate Director for mr Chow from 5 April 2013 (and previously for mr Jewell)

5 Justin Peter Lorenz Alternate Non-Executive Director

Alternate Director for mr hunt from 31 January 2013

Retired Directors:

Peter Ross Brown Non-Executive Director

Resigned as Director effective 8 August 2012

Mark Jewell Non-Executive Director

Resigned as Director on 3 April 2013

Stephen John Court Executive Director

Resigned as Director on 15 August 2013

Andrew James Young Executive Director

Appointed on 27 December 2012 and resigned on 16 september 2013

Directors’ Report 30 June 2013PBD DeveloPments limiteD AnD its ContRolleD entities

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Names, qualifications, and experienceWinson Chow BE (Civil) (Env) (Hons), MEnvPlanChairman

mr Chow was appointed to the Board of Directors on 3 April 2013 and became Chairman soon after. mr Chow is the Chief operating officer and executive Director of mulpha Australia limited, and was previously managing Director at China Resources Property Group. mr Chow holds degrees in Civil and environmental engineering and environmental Planning and has extensive experience in property development, management and construction. mulpha Australia limited owns mulpha sanctuary Cove and hayman Queensland and the intercontinental sydney.

Other current directorships of listed companies

FKP Property Group (Asx: FKP) (Alternate Director since november 2011). mulpha Australia limited (Director since march 2012), (wholly owned subsidiary of mulpha international BhD which is listed on the malaysian exchange).

Former directorships of listed companies in last three years

none.

David Allan Hunt BCom, CPA, Grad Dip App FinNon-Executive Director

mr hunt joined the Board of PBD Developments limited as non-executive Director on 26 november 2010 as the alternate Director for mr Brown. since 8 August 2012 mr hunt has been a Director in his own right.

mr hunt is currently the Chief Financial officer of FKP Property Group. mr hunt has 20 years of relevant experience, which includes earlier roles as CFo of inG Real estate investment management, Group General manager of Finance at stockland, Group Financial Controller and Finance manager at Zurich Financial services Australia limited and Group Finance manager at legal & General Australia limited.


Aveo healthcare limited (Asx: Aeh) (Director since october 2012) metlifeCare (nZx: met) (Alternate Director since August 2010)


none.

Cerena Fu LLBNon-Executive Director

ms Fu was appointed to the Board of Directors on 5 April 2013. ms Fu is the principal of CFC lawyers, a firm based in Double Bay with specialist expertise in real property law. Cerena has over ten years’ experience in acting for both individual and corporate clients in their dealings over major property developments and investment transactions. she also has extensive experience in all aspects of commercial financing, contractual disputes and corporate law, and has successfully conducted commercial litigation on behalf of her clients at all levels of the court system.

Cerena is admitted to practice in the supreme Court of new south wales, the Federal Court of Australia and the high Court of Australia and is a member of the law society of new south wales. she holds a degree in law from the university of new south wales and a master’s degree from the university of sydney.


none.


none.

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Directors’ Report 30 June 2013 continuedPBD DeveloPments limiteD AnD its ContRolleD entities

Geoff E Grady LLB (Hons), BCom, ACANon-Executive Director (alternate Director for Mr Chow)

mr Grady joined the Board of PBD Developments limited as non-executive Director on 23 July 2010, however he resigned as non-executive Director on 21 July 2011. mr Grady is presently the alternate Director for mr Chow, previously he was the alternate Director for mr Jewell until his retirement.

mr Grady was appointed as the Chief executive officer of FKP Property Group in July 2013 having previously been the Chief operating officer of FKP Property Group since 2009. mr Grady was the Chief executive officer of mulpha sanctuary Cove, a premium waterfront residential and marina development located on Queensland’s Gold Coast. Prior to this, mr Grady was a partner of KPmG.


FKP Property Group (Asx: FKP) (Director since July 2013) metlifeCare (nZx: met) (Director since August 2010)


Aveo healthcare limited (Asx: Aeh)

Justin P Lorenz BCom (Hons), BEconNon-Executive Director (alternate Director for Mr Hunt)

mr lorenz joined the Board of PBD Developments limited as non-executive Director on 31 January 2013. Justin is the Group manager of Corporate Finance and treasury at FKP. he has over a decade of experience in mergers and acquisitions, company strategy and debt and equity financing through his roles at FKP and previous investment banking roles with Credit suisse.


none.


none.

exeCutive mAnAGementJally LinChief Executive Officer

mr lin commenced as Ceo of PBD Developments limited in June 2013. mr lin is a senior property executive and business entrepreneur with more than 15 years’ experience in the Australian and Chinese property development industries. he is the former senior manager of sezone, a sydney-based construction company, where he managed a number of core residential development projects across the greater sydney region and along the Queensland coast. mr lin was instrumental in successfully developing over 500 residential apartments and more than 600 residential land lots with sezone. Prior to this role, mr lin held a senior executive role with a Beijing-based commercial development company, wang sen Developments, where he provided operational management to develop over 1,000,000sqm of commercial space.

Peter Coppini MBA, BBus, CPA, ACISJoint Company Secretary and Chief Financial Officer

mr Coppini joined PBD Developments limited in December 2007 and was appointed Company secretary in march 2009. he has around 20 years of experience in the accounting profession in both Australia and overseas (Dubai). Peter has spent the majority of his career in the property development industry but also has experience in manufacturing and retail, fast moving consumer goods and engineering services to the oil and gas industry. he has an mBA, Bachelor of Business Degree (Accounting and Finance double major), and he is a Certified Practicing Accountant and Chartered secretary. Peter is currently studying a Bachelor of laws at Curtin university.

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Nicole Moodie BComJoint Company Secretary

ms moodie was appointed Joint Company secretary on 5 April 2013.

ms moodie joined FKP as Assistant Company secretary in 2012, having previously been the Company secretary and Compliance officer for tishman speyer Australia limited (tsAl), the Responsible entity of the tishman speyer office Fund (Asx: tso). ms moodie is an experienced Company secretary and Risk management professional with over seven years’ experience in the listed environment (listed Property trusts).

ms moodie holds a Bachelor of Commerce from the university of wollongong and is currently studying for a Graduate Diploma in Corporate securities and Finance law at the university of sydney.

DiReCtoRs’ inteRests in the shARes oF the ComPAnY As at the date of this report, the relevant interests of the Directors in the shares of PBD Developments limited are as follows:

Ordinary Shares

Nominally Held directly Nominally held by Director or indirectly held by FKP Mulpha Group Share Options

winson Chow – – 924,207,533 –

David A hunt – 185,583,842 – –

Cerena Fu – – – –

Alternate directors:

Geoff e Grady – 185,583,842 – –

Justin P lorenz – 185,583,842 – –

DiviDenDsno dividends were paid or payable during the year or the previous year.

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CoRPoRAte inFoRmAtionCorporate Structure

PBD Developments limited (formerly Port Bouvard limited until 24 June 2013) is a company limited by shares that is incorporated and domiciled in Australia. it is the ultimate parent entity of the Group and has prepared a consolidated financial report incorporating the entities that it controlled during the financial year ended 30 June 2013, these are detailed in the accompanying notes to the financial statements.

Principal Activities

the principal activity of the Group during the financial year was the development and sale of residential land and built-form products. the Company primarily focuses its development in the mandurah/Peel Region of western Australia.

Summarised History

PBD Developments limited acquired a 100% interest in the Port Bouvard Residential estate (south of mandurah western Australia) in may 1998 and renaming of the Company from menzies Court limited to Port Bouvard limited occurred in 2002. initially PBD Developments limited was to wind up following completion of its two main original projects namely: Port Bouvard Residential estate, one of the most successful and awarded master planned coastal residential developments in Australia, and Princeton Private estate in stirling western Australia in which the Company had a 50% interest.

During 2006 the Group announced that it would pursue the vision of becoming a significant contributor to the design and development of residential property in western Australia. in order to achieve this vision, the Group would aim to utilise its considerable goodwill, intellectual property, skills and experience retained by the professional management team and the strength of the western Australia property market and opportunities present at the time.

Following the announcement by the Group of its intention to continue in land development and replenish its lot pipeline, englobo land was acquired at Bandy Creek in esperance, Dawesville, Point Grey, melros and Gidgegannup. Further, a development agreement was entered into with an owner of property located at Furnissdale in western Australia.

Given the downturn in economic conditions after the above acquisitions were made, the Group implemented a capital management strategy to reduce reliance on debt financing. Pursuant to this strategy, the Group sold the englobo land at Dawesville and melros, decided not to pursue the development agreement at Furnissdale, and did not acquire the remaining parcels of land at Gidgegannup.

During 2010 the Group completed construction of its oceanique luxury Apartments (oceanique).

the Group has achieved state and Federal terrestrial approvals for Point Grey and the state environmental approval for the proposed marina, and is pursuing final Federal environmental approval for the proposed marina. the Group is in the process of selling the last remaining parcel of land at Port Bouvard, lot 370 Country Club Drive (known as the villa site), and the englobo site at Bandy Creek (in esperance western Australia ), and continues to sell remaining apartments at oceanique.

During 2013, the Group invested in a townhouse project in Annandale, new south wales, diversifying its property portfolio out of western Australia for the first time.

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FinAnCiAl Review Operating Performance

the Company recorded for the financial year ended 30 June 2013 an underlying loss of ($6.1m) (2012: loss of $6.4m). the statutory loss recorded for the Company is ($3.6m) (2012: loss of $115.5m).

the following table summarising key reconciling items between the Company’s underlying loss and statutory loss after tax:

A summary of the financial performance of the Group for the year and the previous corresponding period is as follows:

Consolidated

2013 2012 $’000 $’000

underlying (loss) before tax (6,103) (6,362)

Development impairments before tax1

Point Grey – (58,977)

Oceanique – (19,180)

Esperance 47 (6,184)

Hotel site – (2,106)

Villa site 208 (1,628)

one off net gain on option cancellation fee 2,274 –

(Loss) after tax attributable to members before tax (3,574) (94,437)

income tax (expense) – (21,027)

(Loss)/profit after tax attributable to members after tax1 (3,574) (115,464)

Total development impairments after tax 255 (88,075)

1 Included in the underlying loss is $1.9m for the reversal of previous impairments for assets which were sold above previous fair values. Current management believes that the increased value since

the original impairment should be included in the Company’s underlying loss.

During the period the Company’s revenue from continuing operations was $9.6m (2012: $16.6m). settlement of oceanique apartments in both periods was the main driver of the Company’s revenues. During the current period, the Company also settled the hotel site at Port Bouvard, which was sold for greater than book value.

Financial Position

the Company’s net assets balance at 30 June 2013 of $60.9m (2012: $35.3m) reflects the impact of significant restructuring of the Company which occurred during the first six months of 2013, and involved the following key activities:

• AcomprehensivereviewoftheCompany’sassetportfolio,withaparticularemphasisonitsflagshipasset,PointGrey;

• Considerationofvariouscapitalmanagementinitiatives;

• Revisedworkingcapitalrequirementswereestablishedfollowingmanagement’srigorousreviewoftheCompany’scoststructure,withsubstantialchangesbeingmadetotheCompany’soperationsandcashflows;

• Agreementwithanunsecuredcreditortovaryapaymentobligationfrom$4.9milliondueon2January2014topaymentsof$1.5milliondueon14 February2013and$0.5milliondueon2January2014;

• Termsforanewthreeyear,$35millionbankfacility,wereagreedwiththeCompany’sprimarylender;and

• TheCompanyannouncedafullyunderwritten4:1entitlementofferwhichraised$23.8mincapital(EntitlementOffer).

the entitlement offer was completed during January 2013 and raised $23.8m (before costs). the funds were used as follows:

• Reducedbankdebtby$12million;

• Paymentofaninstalmentof$1.5milliontoanunsecuredcreditor;

• PaymentforthecostoftheEntitlementOffer;and

• Provideworkingcapitalofapproximately$8million.

During the second six months of the financial year the Company completed a private placement of shares, which raised $7.4m (before costs). the funds were used to acquire an interest in a town house development, “Bridgeview”, in Annandale, nsw. to complete the transaction, additional funds were reassigned from the Company’s working capital reserves.

through further negotiations with its bank, the Company improved its facility arrangements during may 2013. working capital above current needs has been reassigned to and reduces the commercial loan. in exchange, the bank has provided the Company with a commercial line of credit (overdraft facility). the modification enables the reduction in interest costs to the Company over the remaining term of the loan.

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As in the previous reporting period, the Directors of the Company continue to regard non-recognition of the Company’s deferred tax asset balance as a prudent accounting approach. therefore, the tax benefit of the current period’s losses, have not been brought to account.

Key elements of the Group’s statement of financial position are shown below:

Consolidated

2013 2012 $’000 $’000

Current assets 18,723 15,835

non-current assets 66,129 68,228

Total assets 84,852 84,063

Current liabilities 3,097 44,399

non-current liabilities 20,849 4,341

Total liabilities 23,947 48,740

Net assets 60,905 35,323

number of ordinary shares on issue 3,711,677 593,868

Balance sheet gearing ratio 38% 51%

PRoPeRtY AnD Built-FoRm DeveloPmentDuring the year ended 30 June 2013 the Group focussed on overhead cost reduction/cash flow conservation, sales of oceanique and finalising the planning and environmental approvals for Point Grey.

Development specific updates are shown below.

Port Bouvard Residential Estate (Port Bouvard, WA)

the Group sold and settled the hotel site during the year and is in the process of selling the remaining englobo site in the estate (lot 370).

Oceanique Luxury Apartments (Port Bouvard, WA)

During the period, 9 oceanique apartments were settled by the Company. notably, 8 of these occurred between January and June 2013. At 30 June 2013, there were 22 apartments unsettled.

Buyer interest in oceanique remains and the Company has a number of apartments under contract that are expected to settlement in the early part of FY14.

Point Grey (WA)

Point Grey is located on the only elevated peninsula setting on the eastern shores of the Peel inlet and the harvey estuary in the shire of murray, western Australia. Geographically, Point Grey is situated approximately 20 kilometres west of the Pinjarra town site, and approximately 12 kilometres south east of the mandurah city centre.

the Company acquired approximately 275 hectares of land at Point Grey in 2007, which it plans to develop into a residential village incorporating a marina. the Company has achieved key approvals for the project. Below is a summary of the key Point Grey approvals to date:

Planning approvals:

• April2009–Urbanzoneapprovalreceived

• June2011–ODP/TownPlanningSchemeapproval

• September2011–WAPCSubdivisionapprovalforthefirst341lots

environmental approvals:

• March2011–RevisedEPAapprovalreceived(forupto3,080dwellings)–excludingmarina

• December2011–EPArecommendationtoStateMinisterforMarinaproposal

• April2012–Commonwealthterrestrialenvironmentalresidentialapprovalreceived

• August2012–StateMinisterMarinaapprovalreceived

Finalisation of a marina environmental assessment from the Commonwealth is ongoing.

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Bridgeview (Annandale NSW)

During April 2013 the Company invested in the Bridgeview townhouse project, in Annandale, new south wales. the project is located approximately 5km from the sydney CBD and 300m from Rozelle Bay light rail station.

the project is expected to have an end value of around $30m from the sale of 23 townhouses, and be completed in around two years.

this is the Company’s first investment outside of western Australia and the project’s returns in the short-term, will add to those from ongoing sales of the Company’s oceanique apartments.

Burwood Square (Burwood NSW)

During september 2013 the Company invested in the proposed Burwood square apartment project. the zoning for the site is mixed use, and located within the city centre of Burwood, only 12km from the sydney CBD and is only 300m from Burwood train station.

Burwood square is expected to consist of 210 residential units across three towers, 8,200sqm of retail space contained in a podium and public and private basement car-parking.

Planning for Burwood square is well progressed with development consent received in march 2013. the project has been well received in the market place with almost all of the residential units sold off the plan, over recent months. Construction is expected to commence in november 2013. Burwood square has an end value in excess of $200 million. Returns are expected to commence within three years.

the Group has entered into the joint venture with the owners and the developer of the land. the developer is B1 Goldfield Development Pty limited.

Non-core Assets

the Company’s remaining non-core assets, at Bandy Creek, esperance, and the villa site, are in the process of being sold.

Other Segment Results

the Company operates one business segment of property development in Australia, and results of the segment follow this section.

Trends in Performance

During the year ended 30 June 2014 the Company will continue its principal activity of the development and sale of residential land and built-form products.

siGniFiCAnt ChAnGes in the stAte oF AFFAiRsDuring the financial year there were no significant changes in the state of affairs of the Group other than the information provided on page 8 of this report.

mAtteRs suBseQuent to the enD oF the FinAnCiAl YeARthe following matters occurred subsequent to the end of the financial year:

Short-term loan

PBD Developments limited has entered into an unsecured short-term loan for $12 million, for the purpose of funding its investment in the proposed Burwood square apartment project. the commencement of the loan is 13 september 2013, for a 3 month term, at an interest rate of 13% p.a. the loan is due and payable, in full, at the end of the term.

Project investment

During september 2013 PBD Developments limited made an investment into the proposed Burwood square apartment project in sydney, nsw. the transaction represents the Company’s second venture into the sydney development market. Refer to the Company’s Asx announcement on 27 september 2013 for further information on the project.

Capital commitments

the lease for the Company’s south Perth office expires on 18 February 2014. under the terms of the lease, the Company is required to leave the premises in good order as is usually required at the end of a commercial lease.

under the terms of the development agreement for the proposed Burwood square apartment project, the Company is required to make capital contributions. the Company’s contributions will be funded by debt.F

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FutuRe DeveloPments, PRosPeCts AnD Business stRAteGiesthe Group intends on finalising the environmental approvals for Point Grey, and continue to realise sales and settlements from oceanique. the Group continues to manage its overheads and debt position diligently.

when Point Grey is ultimately developed, the Group will assess opportunities within the site to add further value to the Group, as was experienced at the Port Bouvard project, where iconic built-form opportunities provided a significant additional value to the overall project, examples being Bouvard island, the Piazza, the links villas, eastport marina and the Cut Golf Course.

the Board recently announced the strategic direction toward diversifying the Company’s asset base with projects on the east coast of Australia, within inner metropolitan and city locations, close to established infrastructure. Pursuant to this, the Group has invested in projects in the Bridgeview project (Annandale, nsw) and Burwood square (Burwood, nsw).

enviRonmentAl ReGulAtionthe Group is subject to environmental regulation in respect of its land development as set out below. the Group is committed to undertake its developments in an environmentally responsible manner and to a high environmental standard. the Group takes its environmental responsibilities seriously and notes that it is now a stakeholder expectation that the environment is being treated appropriately and sustainably. this approach was demonstrated throughout development of Port Bouvard Residential estate and is continuing on the Group’s proposed Point Grey development. the environmental approach at Point Grey is particularly important as it is intended the village will be effectively integrated into what is already an outstanding and naturally beautiful location.

Land Development Approvals

All current projects are being undertaken with approvals issued under the town Planning & Development Act (2005), the environmental Protection Act (1986) and if applicable the environment Protection and Biodiversity Conservation Act 1999. to the best of the Directors’ knowledge, all activities to implement the projects have been undertaken in compliance with the requirements of the existing approvals.

the objective in respect to future projects is to obtain the required approvals mentioned in the preceding paragraph.

DiReCtoRs’ meetinGsthe number of meetings of Directors (including meetings of committees of Directors) held during the year and the number of meetings attended by each Director was as follows:

Directors’ Meetings Audit Committee Meetings

Number of meetings attended A B A B

mr w Chow 11 11 * *

mr DA hunt 19 19 3 3

mr sJ Court 19 19 3 3

mr AJ Young 15 15 * *

ms C Fu 10 10 * *

mr m Jewell 7 8 – –

mr P Brown – – – –

Alternate Directors

mr Ge Grady 0 19 * *

mr JP lorenz 0 14 * *

Where:

A = number of meetings attended

B = number of meetings held during the time the Director was in office or member of the committee during the year

* = not a member of the Audit CommitteeFor

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RemuneRAtion RePoRt (AuDiteD)the remuneration report is set out under the following main headings:

• Keymanagementpersonnel;

• Principlesusedtodeterminethenatureandamountofremuneration;

• Detailsofremuneration;

• Serviceagreements;

• Sharebasedcompensation;and

• Additionalinformation.

Key Management Personnel

the following persons were key management personnel (KmP) of the Group during the financial year:

Name Position Period Held Position as Key Management Personnel

mr w Chow Chairman – non-executive Appointed 3 April 2013 as Director, and Chairman on 5 April 2013

mr DA hunt Director – non-executive Full year

ms C Fu Director – non-executive Appointed 5 April 2013

mr AJ Young Director – non-executive Appointed 27 December 2012, resigned 16 september 2013

mr sJ Court Director – executive Full year (resigned 15 August 2013)

mr m Jewell Director – non-executive Resigned 3 April 2013

mr J lin Chief executive office Commenced 1 June 2013

mr P Coppini Joint Company secretary & Chief Financial officer Full year

Principles Used to Determine the Nature and Amount of Remuneration

the Group does not have a formal remuneration committee due to its limited size. the Board of Directors therefore sets the parameters and objectives for the remuneration of the Group’s senior executive. the Board may use the services of a remuneration consultant for remuneration advice.

the performance of the Group depends upon the quality of its Directors and executives. to prosper, the Group must attract, motivate and retain highly skilled Directors and executives. to this end, the Group embodies the following principles in its remuneration framework:

• Providecompetitiverewardstoattracthighcalibreexecutivesbeingmindfulofthemarket,positionandworkrequired;

• BeacceptabletoShareholders;

• Belinkedtoandalignedwithperformanceinordertomotivateexecutives;

• Ensuretherewardistransparent;and

• EnsuretherewardonlybegivenafterdueconsiderationtotheGroup’scapitalmanagementrequirementsandstrategies.

the reward structure has been designed to be aligned with both shareholder and executive interests. to ensure alignment with shareholder interests, the reward structure:

• HastheGroup’seconomicprofitasacorecomponentofthestructuredesign;

• Focusesonsustainedgrowthinshareholderwealth,beingdividendsandgrowthinshareprice,anddeliveringconsistentreturnonassets.Executivesarealsodriventofocusonnon-financialdriversofvalue;and

• Attractsandretainshighcalibreexecutives.

to ensure alignment with executives’ interests, the reward structure:

• Rewardscapability,effortandexperience;

• Reflectscompetitiverewardforcontributiontogrowthinshareholderwealth;

• Providesaclearstructureforearningrewards;

• Allowsexecutives,toalimitedextent,todeterminehowbonusesshallbereceived;and

• Providesrecognitionandrewardforcontribution.

the framework provides a mix of fixed and variable pay. the base level of executive remuneration can take into account the performance of the Group over a number of years, but primarily the current and prior years. however, it can also take into consideration the development pipeline. Core assets of the Group are progressing through planning and approvals processes, some of which will have several years lead time to commencement of sales.

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Bonus Payments

Bonuses can be paid where the Board deems it to be appropriate. there are no specific criteria for bonuses however bonuses are usually paid after achievement of milestones or performance targets by the individuals concerned. no bonuses were paid in the current year.

Non-Executive Directors

Fees and payments to non-executive Directors reflect the demands which are made on, and the responsibilities of the Directors. non-executive fees are not specifically linked to the results of the Group in a particular year however in setting non-executive Directors’ fees the Board gives consideration to the overall recent performance of the Directors and the Group as a whole in setting future fees. non-executive Directors are also encouraged to hold shares in the Company.

non-executive Directors’ fees are determined within an aggregate Directors’ fee pool limit, which is periodically recommended for approval by shareholders. this amount was set at a maximum of $400,000 at a general meeting of shareholders held on 25 november 2005. the Board determines how it should be remunerated having regard to non-executive Directors for similar companies, the time spent on the Company’s matters and the performance of the Company.

the current base remuneration for non-executive Directors was reviewed during the 2013 financial year, and revised remuneration took effect on 1 January 2013. As of that date, non-executive Directors of the Company, including the Chairman, are paid $40,000 per annum plus statutory superannuation.

Additional remuneration, at arm’s length rates, may be paid for specific additional services from time to time as determined by the Board. the non-executive Directors do not receive retirement benefits nor do they participate in any incentive schemes. in addition, non-executive Directors do not receive additional fees for being members of Board committees.

Executive Director

the remuneration of the executive Director is governed by a letter of engagement. the terms of the engagement does not have provision for leave entitlements nor provide for specific retirement or termination benefits except for compulsory superannuation. the payment of remuneration to the executive Director is as per the letter of engagement after having regard to the Company’s performance, goals achieved and remuneration paid in the market place for a similar position.

Other Key Management Personnel

the executive pay and reward framework has five components:

• Basepayandbenefits;

• Short-termincentives;

• Long-termincentives;

• Performance-based(at-risk)remuneration;and

• Otherremunerationsuchassuperannuation.

share options have been previously granted as part of key management personnel compensation. none were granted during the financial year ended 30 June 2013 (2012: nil). Details of the options issued are shown in the key management personnel compensation table.

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Base Pay and Benefits

executives are rewarded through a base salary and certain non-cash benefits, where they are deemed to be appropriate. such remuneration is discussed and determined by the Board upon receiving appropriate advice.

Key management personnel salary and superannuation is reviewed in the first months of every new financial year where individual performance and the performance of the Group are taken into account when setting the next year’s base salary and remuneration.

the following table shows the gross revenue, profits and dividends paid to shareholders over the past five years.

2009 2010 2011 2012 2013

Revenue $25.3m $20.8m $68.3m $16.6m $9.6m

net profit/(loss) after tax ($28.9m) ($25.8m) $0.8m ($115.5m) ($3.4m)

share price at year end $0.380 $0.130 $0.060 $0.030 $0.009

no. shares on issue at year end 130.8m 509.1m 593.9m 593.9m 3,712.0m

Dividends paid (per share) nil nil nil nil nil

Benefits paid to key management personnel may include motor vehicle and payment of any associated fringe benefits tax that may arise.

Short-Term Incentives

executives may be eligible for bonuses paid as either cash or non-cash benefits.

executives currently do not have specific performance criteria in order to receive bonuses and therefore any current bonuses paid are done so at the discretion of the Board. when making decisions with respect to bonuses, the Board closely considers the following factors:

• OverallGroupperformanceandcontributiontoshareholdervalue;

• Attainmentofproject-specificgoalsorsolutionsthatmayariseinthenaturalcourseoftheGroup’soperations;

• Performanceofanindividual’srolerelativetotheBoard’sexpectations;and

• Theindividual’songoingloyaltytotheGroup.

All executives have regular contact and interaction with the Board, whereby they are able to clearly understand the Board’s expectations of their performance. this ensures that the goals attained by executives, and by which their short-term incentives are determined, are in line with the Board and Group’s short and long-term strategies.

Long-Term Incentives

in 2007 the Board approved the establishment of the PBD Developments employee option Plan (Plan). Pursuant to Asx listing Rules the Plan expired on 9 november 2010. the objective of the Plan was to provide long-term incentives to reward key management personnel in a manner that aligns remuneration with the creation of shareholder wealth and also to incorporate a degree of “at risk” remuneration as part of the overall package. options issued pursuant to the Plan currently vest based on time of service, therefore is at risk until vested.

Performance-Based (At-Risk) Remuneration

there is no proportion of total remuneration to other key management personnel which is at risk and only payable on the basis of performance achieving defined outcomes as key management personnel do not currently have any contracted key performance indicators.

Other Remuneration

executives receive superannuation in line with current superannuation guarantee requirements.

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Details of Remuneration

Key management personnel are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any Director of the Group. the key management personnel are the same for the Company as for the Group.

Details of the Group’s remuneration to key management personnel during the full year, regardless of whether the person was part of key management personnel for the entire period, are outlined in the tables below:

Short-term Post-employment Share based 2013 benefits benefits payments

Cash, salary Non-cash Performance and fees Cash bonus benefit Superannuation Options Total related $ $ $ $ $ $ %

Directors

mr w Chow1 12,192 – – 1,097 – 13,289 –

mr DA hunt 20,000 – – 1,800 – 21,800 –

mr A Young2 20,384 – – 1,834 22,218 –

ms C Fu3 9,534 – – 858 – 10,392 –

mr sJ Court4 258,639 – – 23,277 – 281,916 –

mr m Jewell5 10,192 – – 917 – 11,109 –

Other key management personnel

mr J lin6 19,605 – – 1,765 – 21,370 –

mr P Coppini 210,647 – 16,438 25,000 – 252,085 –

mr D Guihot7 102,500 – – – – 102,500 –

Totals 664,610 – 16,438 55,631 – 736,679 –

1. Mr Chow was appointed as Director on 3 April 2013

2. Mr Young was appointed as Director on 27 December 2012 and resigned on 16 September 2013

3. Ms Fu was appointed as Director on 5 April 2013

4. Mr Court resigned subsequent to the end of the period on 15 August 2013

5. Mr Jewell resigned as Director on 3 April 2013 and no payments were made on termination

6. Mr Lin commenced employment on 1 June 2013

7. Mr Guihot was interim CEO for the period 1 July 2012 to 31 December 2012

Short-term Post-employment Share based 2012 benefits benefits payments

Cash, salary Non-cash Performance and fees Cash bonus benefit Superannuation Options Total related $ $ $ $ $ $ %

Directors

mr l verios 1 95,413 – – 8,587 – 104,000 –

mr sJ Court 328,440 – – 29,560 – 358,000 –

mr PR Brown – – – – – – –

mr Ge Grady – – – – – – –

mr DA hunt – – – – – – –

mr m Jewell 2 – – – – – – –


mr Jvm wroth 3 389,500 20,000 22,009 25,000 – 456,509 4%

mr P Coppini 218,550 – 17,675 15,775 – 252,000 –

Totals 1,031,903 20,000 39,684 78,922 – 1,170,509 –

1 Mr Verios resigned as Director on 24 May 2012

2 Mr Jewell resigned as Director on 3 April 2013, no payments were made on termination

3 Mr Wroth concluded his role as CEO on 29 June 2012 (no termination payments were payable)


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Board AppointmentsNon-Executive Chairman

mr Chow was appointed as non-executive Director on 3 April 2013 and as Chairman on 5 April 2013. Pursuant to Board resolution dated 5 march 2013, as a non-executive Director of the Company, mr Chow receives a Director’s fee of $40,000 per annum plus statutory superannuation.

Non-Executive Directors

Pursuant to Board resolution dated 5 march 2013, non-executive Directors of the Company are paid a fee of $40,000 per annum plus statutory superannuation, effective 1 January 2013. Between 1 July 2012 and 31 December 2012, non-executive Directors were not paid a fee. Refer to table on page 16 for the names of non-executive Directors.

Executive Director

mr Court resigned from the Board of Directors on 15 August 2013. he was executive Director for the whole of the financial year.

his appointment was governed by a letter of engagement dated 15 February 2010. the letter of engagement provided no leave entitlements, nor provision for specific retirement or termination benefits except for compulsory superannuation. mr Court’s engagement may have been terminated with immediate effect, by himself or the Company, at the Chairman’s discretion.

the payment of remuneration to mr Court was pursuant to the letter of engagement, after having regard to the Company’s performance, goals achieved and remuneration paid in the market place for a similar position. During the latter part of 2012, mr Court elected to receive a reduced salary and Director’s fee and this was reduced further during financial year 2013. see the remuneration tables on pages 16 and 17 for mr Court’s earnings for 2013 and 2012 respectively.

mr Court provided consultancy services to the Company from 16 August 2013 to 30 september 2013, to assist with transition of executive management to mr lin.

Other Key Management Personnel

Contracts with key management personnel are shown in the table below:

Name Key terms of agreement Base salary including superannuation 1

Termination benefit

mr J lin Chief executive officer

• Commencementis1June2013withaprobationary period of 6 months.

• PerformancereviewsinJuneandDecembereach year.

• Statutoryleaveentitlements.

• Terminationnoticeperiodof8weeks’notice(other than in probationary period).

$200,000 p.a. plus discretionary performance incentives on the basis of predetermined KPis (yet to be determined).

–

mr P Coppini Joint Company secretary and Chief Financial officer

• CommencementisDecember2007.

• Annualperformancereviews.

• Statutoryleaveentitlements.

• Terminationnoticeperiodof4weeks.

$253,304 p.a. –

1 Base salaries quoted are current at the date of this report

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Share Based Compensation

the current remuneration structure includes share based compensation by way of the PBD Developments limited employee share option Plan. this has been discussed above under long-term incentives and also mentioned below under share Based Compensation: options.

Additional InformationDetails of remuneration: cash bonuses

no bonuses were paid in the current period.

Share Based Compensation: Options

on 30 July 2007, the Board approved the Port Bouvard employee option Plan (Plan) that entitles key management personnel to purchase shares in the entity. however, pursuant to Asx listing Rules the Plan expired on 9 november 2010. options granted under the plan carry no dividend or voting rights.

As a result of PBD Developments issuing new shares in 2010 and 2013, pursuant to Australian Accounting standard AAsB 2 share Based Payments and the rules of the Company’s employee option Plan, options granted on 22 August 2007 and 9 December 2008 have been re-valued on 23 June 2010 and 20 December 2012.

in addition to being an eligible employee as defined by the Rules of the Port Bouvard employee option Plan certain exercise conditions must be met before an option can be exercised. exercise conditions in relation to an option under the Plan means the period of time, performance hurdles and other conditions (if any) determined by the Board that must be satisfied before the option can be exercised. these are the overriding criteria for determining compensation under the Plan. the service period is the overriding criteria used to determine compensation under the employee share option Plan.

Details of options over ordinary shares in the company provided as remuneration to each Director and each key management personnel are set out below. when exercised, each option is convertible into one ordinary share in PBD Developments limited. Further information on the options is set out in note 28 to the financial statements.

Number of Options Number of Options Name granted during the year vested during the year

2013 2012 2013 2012

mr Jvm wroth – – – –

end of audited remuneration report.

shARes unDeR oPtionthere are no un-issued ordinary shares of PBD Developments limited under option at the date of this report.

AuDit Committeethe Directors of the Company have formed an Audit Committee. Audit Committee members during and subsequent to the financial year are outlined below:

1 July 2012 – 15 August 2013

mr sJ Court (Chairman) and mr DA hunt

15 August 2013 – ongoing

mr DA hunt (Chairman) and ms C Fu

mr Court was paid $10,000 per annum plus superannuation, as remuneration for his role as Audit Committee Chairman. mr hunt and ms Fu are currently not being provided remuneration for their role as members of the Audit Committee.

the Audit Committee’s responsibilities include:

• ReviewingtheannualreportandallotherfinancialinformationpublishedbytheCompany;

• Reviewingtheeffectivenessoftheorganisation’sinternalcontrolenvironment;

• Reviewingtheriskmanagementframework;and

• Consideringtheappointment,removalandremunerationofexternalauditorsandreviewingtermsoftheirengagement,scopeandqualityoftheaudit.For

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insuRAnCe oF oFFiCeRsDuring the financial year PBD Developments limited paid premiums to insure the officers of the Company and its controlled entities.

the liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities incurred by the officers in connection with such proceedings. this does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage to themselves or someone else or to cause detriment to the Company. it is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities.

non-AuDit seRviCesthe Board of Directors, in accordance with advice from the Audit Committee, is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. the Directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons:

• Allnon-auditserviceshavebeenreviewedbytheAuditCommitteetoensuretheydonotimpacttheimpartialityandobjectivityoftheauditor;and

• NoneoftheservicesunderminethegeneralprinciplesrelatingtoauditorindependenceassetoutinAPES110Code of Ethics for Professional Accountants.

the following fees for non-audit services were paid to the external auditors and their affiliated entities during the year ended 30 June 2013 by the Group:

2013 2012 Service $ $

taxation compliance services provided by BDo Corporate tax (wA) Pty ltd 24,143 22,370

Total 24,143 22,370

AuDitoR’s inDePenDenCe DeClARAtionthe Auditor’s independence Declaration as required by section 307C of the Corporations Act can be found on page 20 and forms part of the Directors’ Report for the year ended 30 June 2013.

RounDinGthe amounts contained in this report and in the financial statements have been rounded to the nearest $1,000 (where rounding is applicable) under the option available to the Company under AsiC Class order 98/100. the Company is an entity to which the Class order applies.

signed in accordance with a resolution of the Directors.

David Hunt Director

30 september 2013 sydney new south wales

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DeClARAtion oF inDePenDenCe BY wAYne BAsFoRD to the DiReCtoRs oF PBD DeveloPments limiteDAs lead auditor of PBD Developments limited for the year ended 30 June 2013, i declare that, to the best of my knowledge and belief, there have been no contraventions of:

• theauditorindependencerequirementsoftheCorporationsAct2001inrelationtotheaudit;and

• anyapplicablecodeofprofessionalconductinrelationtotheaudit.

this declaration is in respect of PBD Developments limited and the entities it controlled during the period.

Wayne Basford Director

BDO Audit (WA) Pty Ltd Perth, 30 september 2013

Auditor’s independence DeclarationPBD DeveloPments limiteD AnD its ContRolleD entities

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company

limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of

independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory

other than Tasmania.

Tel: +8 6382 4600

Fax: +8 6382 4601

ww w.bdo.com.au

38 Station Street

Subiaco, WA 6008

PO Box 700 West Perth WA 6872

Australia

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Corporate Governance statementPBD DeveloPments limiteD AnD its ContRolleD entities

intRoDuCtionthe Board of Directors of PBD Developments limited (the Company, PBD) has adopted the following corporate governance principles (Principles) and is responsible for the adherence to these Principles. these Principles and practices are reviewed regularly and amended as necessary to reflect changes in law and what is regarded as best practice. A description of the Company’s main corporate governance principles and practices and compliance with the Australian securities exchange (ASX) Corporate Governance Council’s Corporate Governance Principles and Recommendations with 2010 Amendments (2nd edition) (ASX Recommendations) are set out below.

A copy of this Corporate Governance statement is available on PBD’s website (ww w.pbddevelopments.com.au).

lAY soliD FounDAtions FoR mAnAGement AnD oveRsiGhtROLE OF THE BOARD

the Board has adopted the following statement of matters for which the Board will be responsible:

• ReviewanddeterminetheCompany’sstrategicdirectionandoperationalpolicies;

• Reviewandapprovebusinessplans,budgetsandforecastsandsetgoalsformanagement;

• Appointandremunerateseniorexecutives;

• Reviewperformanceofseniorexecutives;

• Reviewfinancialperformanceagainstkeyperformanceindicators;

• Approvesellingpricesandsellingpolicies;

• Approveandmonitoradvertisingandpromotionalbudgets;

• Approvecapital,developmentandothermaterialexpenditure;

• Approvedevelopmentprogrammes;

• Reviewriskmanagement,complianceandsafetyissues;

• Approvedonationsandsponsorships;

• OverseetheCompany’scontrolandaccountabilitysystems;

• Reporttoshareholders;and

• Ensurecompliancewithenvironmental,taxation,corporationsandotherlawsandregulations.

stRuCtuRe the BoARD to ADD vAlueBOARD RESTRUCTURE AND EXECUTIVE APPOINTMENTS

As foreshadowed in the Company’s 2012 Corporate Governance statement a restructure of the Board and executive management took place throughout the course of the 2013 Financial Year. these changes have included the appointment of mr winson Chow as Chairman of the Board, mr Jally lin as Chief executive officer and the appointment of two non-executive Directors, ms Cerena Fu and mr Andrew Young (mr Young resigned on 16 september 2013).

BOARD INDEPENDENCE

the Board considers that of the non-executive Directors who held office during the year, the following have been assessed as independent.

• CerenaFu(appointed5April2013);and

• AndrewJYoung(appointed27December2012andresigned16September2013).

PBD currently has the following non-executive Directors on its Board:

• WinsonChow Non-ExecutiveDirector(Chairman) 51years Directorsince2013

• CerenaFu Non-ExecutiveDirector 45years Directorsince2013

• DavidAHunt Non-ExecutiveDirector 44years Directorsince2011

• GeoffEGrady AlternateDirectorforMrChow 54years Directorsince2010

• JustinLorenz AlternateDirectorforMrHunt 35years Directorsince2013

it is acknowledged that the Board of PBD does not consist of a majority of independent Directors in accordance with Asx Recommendation 2.1. the reasons why certain Directors are not considered to be independent are set out below.

mr Chow does not meet the independence test set out in the Asx Recommendations as he is associated directly with mulpha strategic limited, a substantial shareholder of PBD.

messrs hunt, Grady and lorenz do not meet the independence test set out in the Asx Recommendations as they are employees of FKP limited, a substantial shareholder of PBD.

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Corporate Governance statement continuedPBD DeveloPments limiteD AnD its ContRolleD entities

irrespective of the status of a Director, all Directors are expected to bring independent judgement to pass when assessing Board decisions. to facilitate the application of independent judgement the following measures have been adopted by the Board:

• DirectorsareentitledtoseekindependentprofessionaladviceattheCompany’sexpense.Priorwrittenapprovalisrequiredbutisnottobeunreasonably withheld.

• DirectorshavingaconflictofinterestwithanitemfordiscussionbytheBoardmustdisclosethismattertotheBoardandabstainfromaBoardmeeting during the time that the matter is being discussed.

• TheBoardconsidersNon-ExecutiveDirectorstobeindependenteveniftheyhaveminordealingswiththeCompanyprovidedtheyarenotasubstantial shareholder. transactions with a value in excess of 1% of the Company’s annual turnover are considered material. A Director will not be considered independent if he has transactions in excess of this materiality threshold.

ChAiRmAnmr Chow was appointed Chairman on 5 April 2013. mr Chow is not an independent Director for the purposes of the Asx Recommendations as he is directly associated with mulpha strategic limited, a substantial shareholder of PBD. the Board has not appointed a lead independent Director as the Board does not believe that any such appointment could increase the exercise of independent judgement by the Board. the Board considers that the Chairman facilitates the effective contribution of all Directors and promotes constructive and respectful relations between Directors and between the Board and senior management.

the Chairman’s role includes:

• ProvidingeffectiveleadershiponformulatingtheBoard’sstrategy;

• RepresentingtheviewsoftheBoardtothepublic;

• EnsuringthattheBoardmeetsatregularintervalsthroughouttheyearandthatminutesofmeetingsaccuratelyrecorddecisionstakenandwhereappropriatetheviewsofindividualDirectors;

• Guidingtheagenda,informationflowandconductofallboardmeetings;

• ReviewingtheperformanceoftheBoard;and

• LiaisingwithandguidingtheChiefExecutiveOfficer.

tenuRe oF the BoARDin accordance with the Company’s constitution at each Annual General meeting the following Directors retire:

• OnethirdofDirectors;

• DirectorsappointedbytheBoardtofillcasualvacanciesorotherwise;and

• Directorswhohaveheldofficeformorethanthreeyearssincethelastgeneralmeetingatwhichtheywereelected.

Additionally, all Directors are expected to review their membership of the Board from time to time taking into account the length of service on the Board, age, qualification and experience in light of the needs of the Company and direction of the Company together with such other criteria considered desirable for composition of a balanced board and the overall interests of the Company.

Committees the full Board undertook the responsibilities of a nomination Committee during the financial year. this included assessing the necessary and desirable competencies of the Board, reviewing the Board succession plans and ensuring that there is an appropriate mix of expertise, skill and experience on the Board. the Board recognises the value in it having a mix of relevant business, executive and professional experience and the benefits of diversity, including gender diversity. ms Cerena Fu was appointed to the Board as a Director on 5 April 2013, and brings a wealth of valuable attributes and experience to the Board.

when a Board vacancy occurs or where it is considered that there is a gap in necessary expertise, the Board reviews potential candidates, with advice from external consultants if necessary. the Board invites the most suitable candidate to join the Board in a casual vacancy until their proposed election by the Group’s security holders at its next Annual General meeting (AGM).

in addition, in accordance with the Constitution, one-third of Directors, retire from office at each AGm but may stand for re-election. the Board confirms to security holders whether it supports the re-election of each retiring Director in a statement that accompanies the notice of meeting.

the Board is responsible for the nomination process for new Directors and determines who is invited to fill a casual vacancy. All new Directors are provided with detailed information in relation to the Company, its financial, strategic, operational and risk management position, and its policies and procedures upon their appointment.

DetAils on CuRRent DiReCtoRsReference should be made to the Company’s Directors’ Report regarding the details of the current Directors including their skills and experience.

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PRomote ethiCAl AnD ResPonsiBle DeCision mAKinGETHICAL AND RESPONSIBLE DECISION MAKING

in making decisions, the Directors of the Company, its officers and employees take into account the needs of all stakeholders including:

• Shareholders;

• Employees;

• Community;

• Creditors;

• Customers;

• Contractors;and

• Government.

the Directors, officers and employees of the Company are expected to:

• Complywiththelawsandregulationsbothbytheletterandinspirit;

• Actwithhonestyandintegrity;

• Avoidconflictsofinterestbynotplacingthemselvesinsituationswhichresultindividedloyalties;

• UsetheCompany’sassetsresponsiblyandintheinterestsoftheCompany,andnottakeadvantageofproperty,informationorpositionforpersonalgainortocompetewiththeCompany;

• Keepnon-publicinformationconfidentialexceptwheredisclosureisauthorisedorlegallymandated;and

• Beresponsibleandaccountablefortheiractionsandreportanyunethicalbehaviour.

INTERESTS OF STAKEHOLDERS

it is the Company’s objective to create value for shareholders, to provide a safe and challenging environment for employees and for the Company to be a valuable member of the community as a whole.

the Company’s core values are summarised as follows:

• Actwithintegrityandfairness;

• Createasafeandchallengingworkplace;

• Beparticipativeandrecognisetheneedsofthecommunity;

• Protecttheenvironment;

• Becommerciallycompetitive;and

• Striveforhighqualityperformanceanddevelopment.

DIVERSITY

the Board of PBD has adopted the following diversity statement to support the Company in achieving a workplace that embraces diversity and the associated benefits. this statement has been developed having regard to the size of PBD and reflects the recent human capital restructure.

PBD is committed to a workplace of diversity with regards to age, gender, ethnicity and cultural background. this commitment will be fostered in an environment which is free from discrimination and harassment and that will seek to ensure that all employees are treated equally, fairly and respectfully regardless of their differences.

PBD will select candidates on merit from a diverse selection pool to ensure that individuals with the best skills and attributes are appointed to available roles. Appointment is non-discriminatory, merit-based, and takes into account a number of factors such as achievements, experience, qualifications and the value an individual could bring to a role.

the Board of PBD has an objective (subject to sourcing suitably qualified candidates) to increase the representation of women on the Board of PBD when considering a Board vacancy. this will enable women to play an increased role in the leadership of the Company. PBD has a large proportion of women employed in senior executive positions which demonstrates the Company’s commitment to promoting gender diversity in the workplace.

whilst there has been no formal review of the diversity objectives of PBD for the 2013 Financial Year, the Board monitors the effectiveness of this policy as required.

As at 30 september 2013, the proportion of women on the Board and women in senior executive positions is as follows:

Position % of Female Employees

Board 20

senior executive 75

organisation 66

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Corporate Governance statement continuedPBD DeveloPments limiteD AnD its ContRolleD entities

TRADING IN COMPANY SECURITIES

the Company has a formal securities trading Policy dated 2 september 2011 (Policy). the Policy was disclosed to the Asx on 9 september 2011.

Pursuant to the Policy, the Company’s employees, in-house contractors and consultants, Directors and related parties (as defined in the Corporations Act) (Restricted Persons), must not acquire or dispose of securities in the Company whilst in possession of price-sensitive information not yet released to the market.

Additionally, trading cannot occur during closed periods, being the period from 1 January until the first business day after the release of the Company’s half-year results and the period from 1 July until the first business day after the release of the Company full-year results. All other days throughout the year constitute permitted trading periods. notwithstanding this, prior to trading in the Company’s securities Restricted Persons must obtain prior written clearance.

Directors must advise the Company, which in turn will advise the Asx, of any transactions conducted by them in the Company’s securities no later than three business days after the transaction occurs. Further details of the Policy may be obtained from the Company or by referring to the Company’s disclosure made to the Asx dated 9 september 2011.

sAFeGuARD inteGRitY in FinAnCiAl RePoRtinGINTEGRITY IN FINANCIAL REPORTING

the executive management of the Company provides written confirmation to the Board in accordance with section 295A of the Corporations Act 2001 that:

• TheCompany’sfinancialreportsarecompleteandpresentatrueandfairview,inallmaterialrespects,ofthefinancialconditionandoperationalresultsoftheCompany;and

• TheabovestatementisfoundedonasoundsystemofinternalcontrolandriskmanagementwhichimplementsthepoliciesadoptedbytheBoardand that the Company’s risk management and internal controls are operating efficiently in all material respects.

AUDIT COMMITTEE

As at 30 september 2013, the Company has an Audit Committee consisting of independent non-executive Director ms Cerena Fu and non-executive Director mr David hunt (Chairman).

whilst the Audit Committee did not consist of three members in accordance with the Asx Recommendations, the Board was satisfied that given the financial and public company experience of the Audit Committee members and the size of the Company it was not necessary for an additional member to be appointed to the Audit Committee or that such action would derive any benefit to the shareholders.

the principle functions of the Audit Committee are to:

• AssisttheBoardinthedischargeofitsresponsibilitiesinrespectoftheGroup’sfinancialstatementsandtheGroup’sinternalfinancialcontrols;

• RecommendtotheBoardnomineesforappointmentasexternalauditors;

• Reviewthescopeoftheaudit,theleveloftheauditfeesandtheperformanceoftheexternalauditors;

• ProvidealineofcommunicationbetweentheBoardandtheexternalauditors;and

• Reviewanddiscussthereportpreparedbytheexternalauditors.

mAKe timelY AnD BAlAnCeD DisClosuReTIMELY AND BALANCED DISCLOSURE TO THE AUSTRALIAN SECURITIES EXCHANGE

A continuous disclosure regime operates throughout the Company and procedures are in place to ensure timely, open and accurate information to all stakeholders, including shareholders, regulators and investors.

the Company secretary has primary responsibility for communications with the Asx including responsibility for ensuring compliance with the continuous disclosure requirements in the Asx listing Rules and overseeing information going to the Asx, shareholders and other interested parties. the Company secretary reports to the Board at each meeting on matters notified to the Asx.

All announcements made to the Asx by the Company are published on the Company’s website.

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ResPeCt the RiGhts oF shAReholDeRsCOMMUNICATION WITH SHAREHOLDERS

it is the policy of the Company to communicate with shareholders and other stakeholders in an open, regular and timely manner so that the market has sufficient information to make informed investment decisions on the operations and results of the Company.

the information is communicated to the shareholders through:

• ContinuousdisclosureannouncementsmadetotheASX;

• DistributionoftheannualreporttoShareholderstogetherwithanoticeofmeeting;

• Postingofhalf-yearandfull-yearfinancialreportsandallotherASXannouncementsontheCompany’swebsite;

• PostingofallmediaannouncementsandotherrelevantinformationontheCompany’swebsite;and

• CallingofgeneralmeetingsandothermeetingsofShareholderstoobtainapprovalforBoardactionwhenappropriate.

the Company has always invited its auditor to attend the Annual General meeting and will continue to do so and allow sufficient time for shareholders to ask questions of the auditor relating to the audit of the Company’s financial statements.

At Annual General meetings and other general meetings of shareholders, shareholders are encouraged to ask questions of the Board of Directors relating to the operation of the Company.

ReCoGnise AnD mAnAGe RisKthe operations of the Company involve a range of risks, including, but not limited to, strategic, financial, operational and legal risks. having regard to the complexity and size of the Company’s operations, with the exception of the Audit Committee to manage the financial risks, there are no other formal Board committees in place. Responsibility for day-to-day control and risk management for non-financial risks lies with the Chief executive officer who reports to the Board. the Board participates and monitors risks including, but not limited to, compliance with development and environmental approvals, tendering, contracting and development, pricing of products, quality, safety, strategic issues, financial risk, joint venture, accounting and insurance. Any changes to the risk profile of the Company are communicated to its stakeholders via an announcement to the Asx.

All Directors of the Board have access to the Company secretary who is appointed by the Board. the Company secretary reports to the Chairman, in particular on matters relating to corporate governance.

All Board members have access to professional independent advice at the Company’s expense provided they first have obtained the Chairman’s approval which will not be unreasonably withheld.

RemuneRAte FAiRlY AnD ResPonsiBlYNon-Executive Directors

shareholders of the Company determine the total amount that can be paid to non-executive Directors. this amount was set at a maximum of $400,000 at an Annual General meeting of shareholders held on 25 november 2005.

the Board determines between themselves how they should be remunerated having regard to non-executive Directors for similar companies, the time spent on the Company’s matters and the performance of the Company. Additional remuneration (at arm’s length rates) may be paid for specific additional services from time to time as determined by the Board.

non-executive Directors’ remuneration is clearly distinguished from that of senior management, with remuneration solely by way of Directors’ fees and statutory superannuation entitlements.

the Board has no retirement or termination benefits other than compulsory superannuation.

the payments to non-executive Directors are set out in the Remuneration Report within the Directors’ Report.

General

Due to the staff size and the close involvement of the Board in the operations of the Company, the Company does not operate a formal remuneration committee. All remuneration paid to the Chairman, non-executive Directors and key management personnel is reviewed and discussed by the Board.

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Consolidated

2013 2012 Note $’000 $’000

Revenue from continuing operations 4 9,626 16,628

other income 4 4,726 1,059

Cost of sales (7,741) (13,249)

Finance costs 4 (3,770) (3,756)

employee benefits expense 4 (1,110) (1,988)

non-executive directors’ fees (361) (174)

Commissions and discounts (589) (868)

other selling expenses (77) –

legal fees (150) (856)

Advertising and marketing (207) (753)

Consultants fees (342) (436)

Rates and taxes (228) (320)

Repairs and maintenance (153) (265)

Rental expenses (172) (201)

Depreciation and amortisation 4 (43) (87)

other expenses from continuing operations 4 (3,239) (1,258)

net realisable value write down of inventory 8 – (78,157)

net realisable value write up/(down) of non-current assets held-for-sale 256 (9,918)

share of net profit from joint venture – 162

(Loss)/profit before income tax (3,574) (94,437)

income tax benefit/(expense) 5 – (21,027)

(Loss)/profit after tax from continuing operations attributable to members of PBD Developments Limited for the year (3,574) (115,464)

total comprehensive (loss)/profit for the period, net of income tax (3,574) (115,464)

Comprehensive (loss)/profit attributable to members of PBD Developments Limited for the year (3,574) (115,464)

Consolidated

2013 2012 Note Cents Cents

Earnings/(loss) per share* 20

– basic and diluted earnings/(loss) from continuing operations attributable to ordinary equity holders of the Company (0.20) (19.44)

* Where loss per share is non-dilutive, it is not disclosed.

the above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying explanatory notes.

Consolidated statement of Profit or loss and other Comprehensive incomeFor the Year ended 30 June 2013

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Consolidated statement of Financial PositionAs at 30 June 2013

Consolidated

2013 2012 Note $’000 $’000

Current Assets

Cash and cash equivalents 6 – 651

trade and other receivables 7 239 809

inventories 8 21,480 9,868

other assets 13 160 274

Current Assets 21,879 11,602

non-current assets classified as held-for-sale 11 2,948 4,233

Total Current Assets 24,827 15,835

Non-Current Assets

Receivable from joint arrangement 10 9,000 –

inventories 8 48,000 65,377

Property, plant and equipment 12 3,025 2,851

Deferred tax assets 5 – –

Total Non-Current Assets 60,025 68,228

TOTAL ASSETS 84,852 84,063

Current Liabilities

trade and other payables 14 897 687

Borrowings 15 2,114 43,561

Provisions 16 86 151

Total Current Liabilities 3,097 44,399

Non-Current Liabilities

other payables 14 – 4,274

Borrowings 15 20,757 –

Provisions 16 92 67

Deferred tax liabilities 5 – –

Total Non-Current Liabilities 20,849 4,341

TOTAL LIABILITIES 23,947 48,740

NET ASSETS 60,905 35,323

EQUITY

Contributed equity 17 228,145 198,989

Reserves 18 – 339

(Accumulated losses) (167,240) (164,005)

TOTAL EQUITY 60,905 35,323

the above statement of financial position should be read in conjunction with the accompanying explanatory notes.

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Attributable to owners of PBD Developments Limited

Share based Contributed payment Accumulated equity reserve losses Total Consolidated $’000 $’000 $’000 $’000

Balance at 1 July 2012 198,989 339 (164,005) 35,323

loss for the year – – (3,574) (3,574)

Total comprehensive income for the year – – (3,574) (3,574)

transaction with owners in their capacity as owners:

transfer from reserves – (339) 339 –

Contributions of equity net of transaction costs 29,156 – – 29,156

Balance at 30 June 2013 228,145 – (167,240) 60,905

Balance at 1 July 2011 198,989 339 (48,541) 150,787

loss for the year – – (115,464) (115,464)

Total comprehensive income for the year – – (115,464) (115,464)

transactions with owners in their capacity as owners: – – – –

Balance at 30 June 2012 198,989 339 (164,005) 35,323

the above statement of changes in equity should be read in conjunction with the accompanying explanatory notes.

Consolidated statement of Changes in equityFor the Year ended 30 June 2013

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Consolidated statement of Cash FlowsFor the Year ended 30 June 2013

Consolidated

2013 2012 Note $’000 $’000

Cash flows from operating activities

Receipts from customers 10,861 18,443

Payments to suppliers and employees (7,769) (12,269)

interest received 95 157

interest and other costs paid (3,599) (5,254)

Net cash flows from operating activities 27 (412) 1,077

Cash flows from investing activities

Proceeds on disposal of property, plant and equipment 70 –

Payments for property, plant and equipment (303) (1,883)

loan to joint arrangement (9,000) –

Repayment of loan by joint venture 529 193

Net cash flows from/(used in) investing activities (8,704) (1,690)

Cash flows from financing activities

Proceeds from borrowings 51,852 12,302

Repayment of borrowings (74,656) (19,227)

Proceeds from issue of shares 31,178 –

transaction costs on issue of shares (2,023) –

Net cash flows from/(used in) financing activities 6,351 (6,926)

Net increase/(decrease) in cash and cash equivalents (2,765) (7,538)

Cash and cash equivalents at beginning of the financial year 651 8,189

Cash and cash equivalents at the end of the financial year 6 (2,114) 651

the above statement of cash flows should be read in conjunction with the accompanying explanatory notes.

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explanatory notes to the Consolidated Financial statementsFor the Year ended 30 June 2013

1. summARY oF siGniFiCAnt ACCountinG PoliCies(a) Basis of preparation

these financial statements are general-purpose financial statements which have been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting standards, other authoritative pronouncements of the Australian Accounting standards Board and Australian Accounting interpretations. the financial report has been prepared on an historical cost basis, except for investment properties which have been measured at fair value and inventories, which have been measured at net realisable value. note 11 details non-current assets classified as held-for-sale and the measurement basis used.

the financial statements are presented in Australian dollars, which is the functional and presentation currency of PBD Developments limited, and all values are rounded to the nearest thousand dollars ($’000) unless otherwise stated under the option available to the Company under AsiC Class order 98/100. the Company is an entity to which this class order applies.

the consolidated financial statements of PBD Developments ltd also comply with international Financial Reporting standards (iFRs) as issued by the international Accounting standard Board (iAsB). PBD Developments ltd is a for-profit entity for the purpose of preparing these financial statements.

(b) New accounting standards and interpretations

the Group has adopted as of 1 July 2012 the following new and revised standards and interpretations issued by the Australian Accounting standards Board (AAsB):

AASB 112 Income Taxes (Amendment) – Deferred Taxes: Recovery of Underlying Assets

this amendment addressed the determination of deferred tax on investment property measured at fair value and introduced a rebuttable presumption that deferred tax on investment property measured at fair value should be determined on the basis that the carrying amount will be recoverable through sale. the amendments also incorporate siC-21 income taxes – Recovery of Revalued non-Depreciable Assets into AAsB 112. the adoption of these amendments had no material impact on the Group’s financial statements.

AASB 101 Presentation of Financial Statements (Amendment) – Presentation of Other Comprehensive Income

this amendment required entities to group items presented in other comprehensive income based on whether they might be reclassified subsequently to profit or loss and those that will not. this amendment resulted in minor changes to the presentation of the Group’s statements of comprehensive income.

the Group has also adopted all the other new and revised standards and interpretations issued by the AAsB that are relevant to its operations and effective for the current annual reporting period. there was no material effect on the financial statements.

AASB 9 Financial Instruments: Classification and Measurement

this standard specifies new recognition and measurement requirements for financial assets and liabilities within the scope of AAsB 139. it requires financial assets to be measured at fair value through the profit and loss unless the criteria for amortised cost measurement are met or the entity qualifies and elects to recognise gains and losses on equity securities that are not held for trading directly in other comprehensive income. the standard is applicable for annual reporting periods beginning on or after 1 January 2015. the Group has determined that there will be no material impact on the financial statements of the Group on initial application of this standard.

AASB 10: Consolidated Financial Statements

this standard replaces AAsB 127 Consolidated and separate Financial statements and is applicable for the annual period beginning on or after 1 January 2013. this new standard introduces a new definition of control that determines which entities are consolidated. this new definition of control may potentially lead to the consolidation of entities that were not previously included in the Group resulting in more assets and liabilities on the books. the Group has determined that there will be no material impact on the financial statements of the Group on initial application of this standard.

AASB 11 Joint Arrangements

this standard replaces AAsB 131 interests in Joint ventures and is applicable for annual periods beginning on or after 1 January 2013. this new standard introduces new rules that classify joint arrangements as either a joint operation or a joint venture. under the new standard, proportionate consolidation is not allowed and all joint ventures must be equity accounted. All joint arrangements held by the Group will need to be reassessed to determine whether the joint operation or joint venture classification is appropriate, and therefore the potential impacts of a change on the presentation of the financial statements. the Group has determined that there will be no material impact on the financial statements of the Group on initial application of this standard.

AASB 12 Disclosure of Interests in Other Entities

this standard is applicable for annual reporting periods beginning on or after 1 January 2013. this standard sets out the required disclosures for entities reporting under the two new standards, AAsB 10 and AAsB 11, and replaces the disclosure requirements currently found in AAsB 127 and AAsB 128. Application of this standard by the Group will not affect any of the amounts recognised in the financial statements, but will affect the information disclosed in relation to the Group’s investments.

AASB 13 Fair Value Measurement

this standard is applicable for annual reporting periods beginning on or after 1 January 2013. it establishes a single source of guidance for determining the fair value of assets and liabilities. the Group has determined that there will be no material impact on the financial statements of the Group on initial application of this standard.

Revised AASB 119 Employee Benefits

the revisions to this standard result in significant changes in accounting for defined benefit pension plans. there are also a number of other changes including modifications to the timing of recognition for termination benefits, the classification of short-term benefits and disclosures of deferred benefit plans. the Group does not have defined benefit pension plans. it does not expect there to be material impact on the Group in future reporting periods.

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(c) Principles of consolidation

the Group’s financial statements comprise the financial statements of PBD Developments limited (the Company) and its subsidiaries (the Group) as at 30 June each year.

subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies so as to obtain benefits from their activities. the existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether a group controls another entity.

the financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies.

in preparing the Group’s financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full.

subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group.

investments in subsidiaries are accounted for at cost less impairment in the individual financial statements of PBD Developments limited.

(d) Segment reporting

the Group operates one business segment of property development in Australia. the operating segment is reported in a manner consistent with the internal reporting provided to the chief operating decision maker of the Group. Further segment information is reported in note 26.

(e) Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. Bank overdrafts are included within interest-bearing loans and borrowings in current liabilities on the statement of financial position.

(f) Trade and other receivables

trade receivables, which generally have 30-90 day terms, are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less an allowance for any uncollectible amounts.

Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off when identified. An allowance for doubtful debts is raised and recorded in a separate account when there is objective evidence that the group will not be able to collect the debt. significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments for a prolonged period are considered indicators that the trade receivable is impaired. the amount of the impairment allowance is the difference between the asset’s carrying value and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.

if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in the statement of comprehensive income, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.

(g) Inventories

inventories are measured at the lower of cost and net realisable value.

net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

Land under development and apartment construction

Both land under development and apartment projects under construction, are measured at the lower of cost and net realisable value. Cost includes the cost of acquisition, development, materials, borrowing costs and holding costs incurred during development and construction. once development and construction is completed, borrowing costs and holding costs are expensed as incurred.

All land under development (including land undergoing the approvals process) and apartment construction projects are regarded as inventory and are classified as such in the statement of financial position. land and apartments are classified as current only when sales are expected to occur within the next twelve months.

Borrowing costs included in the cost of any land under development and apartment construction projects are those costs that would have been avoided if the expenditure on the acquisition and development of the land, and building of the apartment project, had not been made. Borrowing costs incurred while active development and construction is interrupted for extended periods are recognised as an expense.

(h) Financial assets

Financial assets in the scope of AAsB 139 Financial Instruments: Recognition and Measurement are classified as loans and receivables. when financial assets are recognised initially, they are measured at fair value plus directly attributable transaction costs. the Group determines the classification of its financial assets at initial recognition.

All regular purchases and sales of financial assets are recognised on the trade date i.e. the date that the Group commits to purchase the asset. Regular purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or convention in the marketplace.

Loans and receivables

loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in the statements of comprehensive income when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

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explanatory notes to the Consolidated Financial statements continuedFor the Year ended 30 June 2013

1. summARY oF siGniFiCAnt ACCountinG PoliCies continued(i) Impairment of financial assets

the Group assesses at each reporting date whether a financial asset or group of financial assets is impaired.

the Group first assesses whether objective evidence exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. if it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment.

(j) Share based payments

the Group provides benefits to its Directors and employees in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled transactions’).

the cost of these equity-settled transactions with Directors and employees is measured by reference to the fair value at the date at which they are granted. the fair value is determined using the Black-scholes model.

the cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘vesting date’). the cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the Directors, will ultimately vest.

this opinion is formed based on the best available information at the reporting date. no expense is recognised for awards that do not ultimately vest. where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. in addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the date of modification.

where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. however, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph. the dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.

Refer to note 28 for more information on share based payments.

(k) Investment in joint venture

the Group’s investment in a joint venture entity is accounted for using the equity method of accounting in the Group’s financial statements.

under the equity method, the investment in the joint venture is carried in the consolidated statement of financial position at cost plus post-acquisition changes in the Group’s share of net assets of the joint venture. After application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group’s net investment in the joint venture.

the Group’s share of the joint venture post-acquisition profits or losses are recognised in the statement of comprehensive income. the cumulative post-acquisition movements are adjusted against the carrying amount of the investment. when the Group’s share of losses in the joint venture equals or exceeds its interest in the joint venture, including any unsecured long-term receivables and loans, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint venture.

the reporting dates of the joint venture and the Group are identical and the joint venture’s accounting policies conform to those used by the Group for like transactions and events in similar circumstances.

(l) Property, plant and equipment

Plant and equipment is stated at cost less any accumulated depreciation and any accumulated impairment losses. such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred.

Buildings are measured at cost less accumulated depreciation.

Depreciation is calculated on a straight-line basis or by diminishing value over the estimated useful life of the assets as follows:

Buildings and fixtures – over 20 years

Paintings and artwork – over 83 years

Plant and equipment – over 3 to 15 years

land – is not depreciated

the assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.

Disposal

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statements of comprehensive income in the year the asset is derecognised.

(m) Investment properties

investment properties are measured initially at cost, including transaction costs. the carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met, and excludes the costs of day-to-day servicing of an investment property. subsequent to initial recognition, investment properties are stated at fair value, which reflects market conditions at reporting date. Gains or losses arising from changes in the fair values of investment properties are recognised in the statements of comprehensive income in the year in which they arise.

investment properties are derecognised either when they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognised in the statements of comprehensive income in the year of retirement or disposal.

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transfers are made to investment property when, and only when, land is held for a currently undetermined future use or there is a change in use evidenced by ending of owner-occupation or ending of construction or development. transfers are made from investment property when, and only when, there is a change in use, evidenced by commencement of owner-occupation or commencement of development with a view to sale.

For a transfer from investment property to owner-occupied property or inventories, the deemed cost of property for subsequent accounting is its fair value at the date of change in use. if the property occupied by the Group as an owner occupied property becomes an investment property, the Group accounts for such property in accordance with the policy stated under Property, plant and equipment up to the date of change in use. For a transfer from inventories to investment property, any difference between the fair value of the property at that date and its previous carrying amount is recognised in the statements of comprehensive income. when the Group completes the construction or development of a self-constructed investment property, any difference between the fair value of the property at that date and its previous carrying amount is recognised in the statements of comprehensive income.

(n) Leases

the determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

Group as lessee

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.

operating lease payments are recognised as an expense in the statement of comprehensive income on a straight line basis over the lease term.

Group as lessor

leases in which the Group retains substantially all the risks and benefits of ownership of the leased asset are classified as operating leases. indirect costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as rental income. lease income is recognised on a straight line basis over the term of the lease.

(o) Impairment of non-financial assets

Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows that are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). non-financial assets that suffered impairment are tested for possible reversal of the impairment whenever events or changes in circumstances indicate that the impairment may have reversed.

(p) Trade and other payables

trade payables and other payables are recognised initially at fair value and subsequently carried at amortised cost. they represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of those goods and services. the amounts are unsecured and are usually paid within 30 days of recognition.

(q) Provisions

Provisions are recognised when the Group has a present or constructive obligation as a result of past events. Provisions are measure at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. the discount rate used to determine the present value is a pre-tax rate which reflects current market assessments of the time value of money and the risks specific to the liability.

(r) Interest bearing loans and borrowings

All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs.

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after reporting date.

(s) Employee leave benefits

liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date. they are measured at the amounts expected to be paid when the liabilities are settled. liabilities for non-accruing sick leave are recognised when the leave is taken and are measured at the rates paid or payable.

the liability for long service leave is recognised and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of service. expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.

(t) Contributed equity

ordinary shares are classified as equity. incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

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1. summARY oF siGniFiCAnt ACCountinG PoliCies continued(u) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. the following specific recognition criteria must also be met before revenue is recognised.

Land development and apartment sales

Revenue is recognised when the risks and rewards of ownership have passed to the buyer and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Risks and rewards of ownership are considered passed to the buyer when a sales contract settles.

Revenue arising from the sale of developed land and completed apartments are recognised when a valid sales contract settles whereby title passes to the purchaser.

Rendering of services

Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.

Interest revenue

Revenue is recognised as interest accrues using the effective interest method. this is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

Rental income

Rental income is accounted for on a straight line basis over the lease term. Contingent rental income is recognised as income in the periods in which it is earned.

Dividends

Revenue is recognised when the Group’s right to receive payment is established.

(v) Borrowing costs

Borrowing costs are recognised as an expense when incurred, except where they are incurred as part of the construction of qualifying assets, where they are then capitalised as part of the cost of that asset. if capitalised interest causes the carrying amount to exceed the asset’s net realisable value, capitalisation of interest will cease.

(w) Income tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. the tax rates and tax laws used to calculate the amount are those that are enacted or substantively enacted by the balance date.

Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences except:

• whenthedeferredincometaxliabilityarises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profitnortaxableprofitorloss;or

• whenthetaxabletemporarydifferenceis associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:

• whenthedeferredincometaxassetrelating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or

• whenthedeductibletemporarydifferenceis associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.

the carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability settled, based on tax rates and tax laws that have been enacted or substantively enacted at the balance date.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. in this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to offset current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Tax consolidation legislation

PBD Developments limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation as of 1 July 2003. the head entity, PBD Developments limited and the controlled entities in the tax consolidated group continue to account for their own current and deferred tax amounts. the Group has applied the group allocation approach in determining the appropriate amount of current taxes and deferred taxes to allocate to members of the tax consolidated group.

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in addition to its own current and deferred tax amounts, PBD Developments limited also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group, when certain recognition criteria are met.

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the group. Details of the tax funding agreement are disclosed in note 5.

Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.

(x) Goods and services tax (GST)

Revenues, expenses, assets and liabilities are recognised net of the amount of Gst except:

• whentheGSTincurredonapurchaseofgoods and services is not recoverable from the taxation authority, in which case the Gst is recognised as part of the cost of acquisition of the asset or as part of the expenseitemasapplicable;and

• receivablesandpayables,whicharestatedwith the amount of Gst included.

the net amount of Gst recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

Cash flows are included in the statement of cash flows on a gross basis and the Gst component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of Gst recoverable from, or payable to, the taxation authority.

Gst is calculated on revenue arising from the sale of real property under the margin scheme, when able.

(y) Earnings per share

Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:

• costsofservicingequity(otherthandividends)andpreferencesharedividends;

• theaftertaxeffectofdividendsandinterest associated with dilutive potential ordinary shares that have been recognised asexpenses;and

• othernon-discretionarychangesinrevenues or expenses during the period that would result from the dilution of potentialordinaryshares;

divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

(z) Non-current assets held-for-sale

non-current assets are classified as held-for-sale if their carrying amount will be recovered through a highly probable sale transaction rather than through development and sale. they are measured at the lower of their carrying amount and fair value less costs to sell.

An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset is recognised at the date of sale.

non-current assets held-for-sale are not depreciated or amortised. interest and other expenses attributable to the liabilities of a these assets classified as held-for-sale continue to be recognised.

non-current assets held-for-sale are presented separately from other assets in the statements of financial position and liabilities with respect to non-current assets held-for-sale are presented separately from other liabilities in the statements of financial position.

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2. FinAnCiAl RisK mAnAGement oBJeCtives AnD PoliCiesFinancing of the Group’s operations is supported by both equity and debt financing.

the Group’s principal financial instruments comprise bank loans, cash and short-term deposits. the Group holds the following financial instruments:

Consolidated

2013 2012 $’000 $’000

Financial assets

Cash and cash equivalents – 651

trade and other receivables 239 809

loan to joint arrangement 9,000 809

9,239 1,460

Financial liabilities

trade and other payables 897 686

Borrowings 22,872 43,561

23,769 44,247

the Group has various financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. the main purpose of borrowings is to provide finance for the Group’s operations.

Financial risk management is overseen principally by the Board, with assistance from the CFo. it is the Group’s policy that no trading in financial instruments shall be undertaken.

the main risks arising from the Group’s financial instruments are market risk, credit risk and liquidity risk. the Board reviews and agrees policies for managing each of these risks as summarised below. with respect to financial instruments, the Group is not exposed to other types of risk such as foreign exchange risk and price risk.

Further details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 1 to the financial statements.

Market riskCash flow interest rate risk

Borrowings issued at variable rates expose the Group to cash flow interest rate risk. the Group’s borrowings issued at fixed rates limit the exposure to this interest rate risk. At the end of the financial year however, all of the Group’s borrowings were at variable interest rates.

the Group’s financing is generally split into three categories:

• financingforworkingcapital;

• shorttermprojectfinance;and

• longtermborrowingsusedfortheacquisitionofbroadacreland.

the working capital requirements for the Group are presently being met by bank overdraft.

Project finance provides the funds necessary for construction and development projects and the bank facilities for these involve variable interest rates. the funds available may only be used to fund the specific project for which the facility was granted.

longer term borrowings used to finance the acquisition of broad acre land are also managed by borrowing at both fixed and variable interest rates. Please refer to note 15 for the Group’s maximum exposure to interest rate risk.

Interest rate risk Group sensitivity

For the year to 30 June 2013 if interest rates had changed by –/+ 100 basis points (the maximum potential change in management’s view from the year-end rates with all other variables held constant), post tax profit for the year would have been $269,000 lower/higher (2012: $268,000 lower/higher), mainly as a result of higher/lower interest expense from borrowings.

TheGroup’sbankfacilitiesat30June2013comprisedofacommerciallineofcredit($10millionlimit);bankguaranteelineofcredit($0.700millionlimit);and commercial loan ($20.758 million limit). At 30 June 2013 none (2012: none) of the Group’s borrowings were at fixed interest rates. the interest rate for the commercial line of credit is the bank’s commercial line of credit rate, and the rate for the commercial loan is the bank’s commercial loan rate plus a margin of 1% per annum. the bank guarantee line of credit attracts an annual issue fee of 1.5% per annum.

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Credit Risk

Credit risk is the risk that the counter-party will default on its contractual obligations, resulting in a financial loss to the Group. Any inherent credit risk of elements of the Group’s financial statements is mitigated by use of the settlement (completed contract) method of revenue recognition.

it is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. in addition, receivable balances if any, are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. there are no significant concentrations of credit risk within the Group.

the Group’s operation focuses on developing and selling lots of land and built-form product. At 30 June 2013 the Group had unconditional contracts of sale shown in the table below in its portfolio awaiting settlement which under the accounting policy referred to in note 1(u) is not recognised as revenue until settlement, but which will provide cash inflows to the Group upon settlement.

Settlement past due & revenue not Less than Between recognised 6 months 6-12 months 1-2 years Total $’000 $’000 $’000 $’000 $’000

30 June 2013 Consolidated

Built-form (oceanique) – – – – –

total unconditional contracts awaiting settlement – – – – –

30 June 2012 Consolidated

Built-form (oceanique) 5,179 – – 5,179 5,179

total unconditional contracts awaiting settlement 5,179 – – 5,179 5,179

Credit risk is managed on a group basis. the maximum exposure to credit risk in respect of the above at 30 June 2013 is the carrying value of financial assets recorded in the financial statements, net of any allowances for losses.

Liquidity risk

liquidity risk reflects the likelihood of cash generating assets providing insufficient cash flow to fund the Group’s operation. the Group’s objective is therefore to maintain a balance between continuity of funding and flexibility through the use of bank loans and bank overdrafts, if required. the Group ensures it has in place sufficient committed credit facilities with various counterparties and monitors actual and forecasted cash flows and matches maturity profiles of financial assets and liabilities, such as receivables and loan facilities.

Financing arrangements

the Group had access to the following borrowing facilities at the reporting date:

Consolidated

2013 2012 $’000 $’000

Floating rate1

– expiring within 6 months (multi-option and commercial bill facility) – 43,561

– expiring within 36 months 2 (commercial overdraft and loan facility) 2 22,871 –

22,871 43,561

1 At 30 June 2013 none (2012: none) of the Group’s borrowings were at fixed interest rates.

2 Facilities expire on 31 January 2016.

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2. FinAnCiAl RisK mAnAGement oBJeCtives AnD PoliCies continuedMaturities of Financial Liabilities

the tables below analyse the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date. Refer to note 15 for more detail on used and unused borrowing facilities and carrying value of assets pledged as security. the amounts disclosed in the table are the contractual undiscounted cash flows.

Carrying Total amount Less than Between Between contractual (assets)/ Consolidated 6 months 6 – 12 months 1 and 2 years 2 and 5 years Over 5 years cash flows liabilities – At 30 June 2013 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Commercial loan facility – – – 20,757 – 20,757 20,593

overdraft facility – – – 2,114 – 2,114 –

Bank guarantee facility – – – 700 – 700 700

trade and other payables 397 500 – – – 897 897

Total liabilities 397 500 – 23,571 – 24,468 22,190

Carrying Total amount Less than Between Between contractual (assets)/ Consolidated 6 months 6 – 12 months 1 and 2 years 2 and 5 years Over 5 years cash flows liabilities At 30 June 2012 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Development facilities 36,246 – – – – 36,246 36,418

General (multi-option) facility – loan 8,109 – – – – 8,109 7,143

General (multi-option) facility – guarantees 788 – – – – 788 788

trade and other payables 499 – 4,900 – – 5,399 4,961

Total liabilities 45,642 – 4,900 – – 50,542 49,310

Fair value estimation

the carrying value of current financial assets and liabilities represent their fair value at reporting date. the carrying values less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature.

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3. siGniFiCAnt ACCountinG JuDGments, estimAtes AnD AssumPtionsin applying the Group’s accounting policies management continually evaluates judgments, estimates and assumptions based on experience and other factors, including expectations of future events that may have an impact on the Group. All judgments, estimates and assumptions made are believed to be reasonable based on the most current set of circumstances available to management. Actual results may differ from the judgments, estimates and assumptions. significant judgments, estimates and assumptions made by management in the preparation of these financial statements are outlined below.

Significant accounting judgmentsRecovery of deferred tax assets

Deferred tax assets are recognised for deductible temporary differences when Directors considers that it is probable that future taxable profits will be available to utilise those temporary differences. During the current period a decision was made by Directors to de-recognise the net balance of deferred taxes previously reported and not to recognise any tax benefit for the current period’s losses. see note 5 for further detail.

Significant accounting estimates and assumptions

the group may assess non-financial assets using net realisable value or fair value methodology.

Net realisable value write-down of inventory

the net realisable value of inventories is calculated using estimated selling prices in the ordinary course of business less costs to complete, less costs to sell. the key assumptions involve management judgement, and take into account reliable information on hand at the time the estimates are made and where possible, external verification is sought for those variables with a material impact on the outcomes.

Fair value write-down of non-current assets held-for-sale

the Group assesses fair value of all non-current assets held-for-sale at each reporting date. Fair value reflects the amount which could be exchanged between the Group and knowledgeable willing buyers in the marketplace. in order to determine fair value, the Group engages independent professional valuation firms specialising in the property industry.

At 30 June 2013 an analysis of net realisable value and fair value of the Group’s assets required that previous impairments be reversed by $256,000. A similar analysis at 30 June 2012 results in impairment of $9,918,000.

Fair value assessment of property, plant and equipment

the Group reviews residual values, useful lives and amortisation methods for property, plant and equipment, and these are adjusted if appropriate, at the end of each reporting period.

Joint venture arrangements

the Group’s loan to joint venture arrangement is initially measured at cost. Following initial recognition, and at each reporting period, an assessment is made of the recoverability of the loan.

At 30 June 2013 an analysis of net realisable value and fair value of the Group’s loan to joint arrangement resulted in nil impairment.

Other items requiring significant estimates and assumptions

the Group determines the carrying value of investments accounted for using the equity method after reviewing expected profitability of the investment.

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Consolidated

2013 2012 $’000 $’000

4. Revenue AnD exPensesRevenue

sale of goods – land and apartments 9,276 15,670

Rendering of services 33 83

Finance revenue 95 157

Forfeited deposits revenue 222 718

9,626 16,628

Breakdown of finance revenue:

Bank interest received 95 157

95 157

Other income

Reversal of provisions – stirling lakes Joint venture – 399

Reversal of provisions – Gidgegannup option cancellation 4,500 –

Realised foreign exchange gain 32 –

Damages claims/termination fees 194 660

4,726 1,059

Finance costs

Bank accounts and loan interest paid (3,770) (5,219)

less amount capitalised to work in progress (note (a)) – 1,463

(3,770) (3,756)

Employee benefits expense

wages and salaries (874) (1,867)

superannuation expense (115) (189)

Payroll tax (52) (87)

other employee benefits expense (69) (221)

employee expense transferred to cost of sales – (376

(1,110) (1,988)

Depreciation and amortisation

Plant and equipment (43) (87)

(43) (87)

Other expenses from continuing operations

Gidgegannup option cancellation fee (2,227) (59)

Project costs (288) –

strata levies (137) (303)

Audit fees (120) (115)

insurance (80) (78)

Asx fees (55) (29)

share registry fees (40) (39)

electricity (31) (45)

travel (8) (54)

Funds management costs (2) (55)

write-off of investments in joint venture – (162)

other (251) (319)

(3,239) (1,258)

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(a) Capitalised borrowing costs

During the year the Group incurred borrowing costs of $3,770,000 (2012: $5,219,000). of these costs nothing was capitalised during the year (2012: $1,463,000 or 29%). the capitalisation rate of borrowing costs was not applicable during the year (2012: 5.97%).

note that capitalised interest in the previous corresponding period largely relates to the Point Grey project. As a result of the Directors’ decision to impair Point Grey during the previous corresponding period, and pursuant to the Company’s borrowing cost capitalisation policy, no further interest is being capitalised to the Point Grey project.

Consolidated

2013 2012 $’000 $’000

5. inCome tAxIncome tax expense

the major components of income tax expense are:

Current income tax

Current income tax charge – –

Adjustments in respect of current income tax of previous years – –

Deferred income tax

De-recognition of deferred tax assets – 25,483

offset of deferred tax liabilities against deferred tax assets – (4,457)

Relating to origination and reversal of temporary differences – –

income tax (credit)/expense reported in statement of comprehensive income – 21,027

Amounts charged or credited directly to equityDeferred income tax related to items charged or credited directly to equity

Capital raising transaction costs – –

– –

Numerical reconciliation between aggregate tax expense recognised in the statement of comprehensive income and tax expense calculated per the statutory income tax rate

A reconciliation between tax expense and the product of accounting profit before income tax multiplied by the Group’s applicable income tax rate is as follows:

Accounting (loss)/profit before tax from continuing operations (3,574) (94,437)

total accounting (loss)/profit before income tax (3,574) (94,437)

At the Group’s statutory rate of 30% (2012: 30%) (1,072) (28,331)

Adjustments in respect of current income tax of previous years – –

De-recognition of deferred tax assets – 25,483

offset of deferred tax liabilities – (4,457)

tax losses not recognised 1,071 28,324

expenditure not allowable for income tax purposes 1 8

– 21,027

income tax expense reported in consolidated statement of comprehensive income – 21,027

– 21,027

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5. inCome tAx continued Balances Movements

2013 2012 2013 2012 $’000 $’000 $’000 $’000

Recognised deferred tax assets and liabilities

CONSOLIDATEDDeferred tax liabilities

other income not assessable until realised – fair value profit on revaluation – – – (694)

expenditure deductible for taxation purposes and not accounting purposes (6) (194) 188 (92)

Accelerated depreciation for tax purposes – – – –

Deductible expenses capitalised into land value – – – –

Development costs immediately deductible (1,197) (1,124) 73 (2,353)

offset of deferred tax liabilities against deferred tax assets 1,203 1,318 (115) (1,318)

– – – (4,457)

CONSOLIDATEDDeferred tax assets

tax losses carried forward 27,872 24,949 2,923 2,977

expenses not deductible until paid 142 983 (841) (137)

share transaction costs 802 590 212 (273)

other – 37 (37) (18)

loan impairment – – –

Fair value loss on net realisable value write down 24,647 27,701 (3,054) 26,293

Adjustment in respect of prior year tax losses – – – (65)

unrecognised deferred tax assets (52,260) (54,260) 2,000 (54,260)

offset of deferred tax liabilities against deferred tax assets (1,203) – (1,203) –

Rounding differences – – – (1)

– – – (25,484)

Deferred tax income/(expense) – (21,027)

Deferred tax income/(expense) attributable to continuing operations – (21,027)

Deferred tax income/(expense) attributable to discontinued operations – –

– (21,027)

Deferred tax assets not brought to account

As reflected above, there are amounts of deductible temporary differences, unused tax losses or unused tax credits that have not been recognised as deferred tax assets in the statement of financial position.


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Consolidated

2013 2012 $’000 $’000

6. CAsh AnD CAsh eQuivAlents

(overdraft)/cash at bank and on hand (2,114) 651

Refer to note 15 for information with respect to the Group’s commercial overdraft facility. Cash at bank earns interest at floating rates based on daily bank deposit rates and the balance in the account. the carrying amount of cash and cash equivalents represents fair value.

Reconciliation to statement of cash flows

For the purposes of the statement of cash flows, cash and cash equivalents comprise the following at 30 June:

(overdraft)/cash at bank and on hand (2,114) 651

During the period, the weighted average interest rate the Group received for its cash and cash equivalents was 2.60% (2012: 3.66%).

7. tRADe AnD otheR ReCeivABlesCurrent

trade receivables (note (a)) 175 255

other receivables (note (b)) 64 34

loan to joint venture (note (c)) – 3,312

Allowance for impairment loss (note (c)) – (2,792)

239 809

For terms and conditions relating to related party receivables refer to note 22.

Details regarding the effective interest rate and credit risk of current and non-current receivables are disclosed in note 2.

(a) Trade receivables

2013: trade receivables are all non-interest bearing at 30 June 2013, other than an amount of $100,000. they are generally on 30-90 day terms, other than an amount of $175,000 which is receivable by no later than 24 may 2014.

2012: trade receivables are all non-interest bearing at 30 June 2012, other than an amount of $100,000. they are generally on 30-90 day terms, other than an amount of $175,000 which is receivable by no later than 24 may 2014.

there is no evidence of impairment for any trade receivable therefore no allowance has been recognised.

(b) Other receivables – current

other receivables are amounts owing from the Australian taxation office for Business Activity statement refunds.

(c) Movement in allowance for impairment loss

Balance at the beginning of the year 2,792 3,191

movement (2,792) (399)

Balance at the end of the year – 2,792

the stirling lakes Joint venture (SLJV), responsible for the development of Princeton Private estate in stirling, was finalised during the financial year, and the balance owing from the slJv at the end of the financial year is nil (2012: $2,792,000). the allowance for impairment loss previously recognised, decreased during the period by $2,792,000 (2012: $399,000 ).

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8. inventoRiesDetails regarding the carrying amount of inventories pledged as security for borrowings are disclosed in note 15.

inventories recognised as expense within cost of sales during the year ended 30 June 2013 amounted to $7,741,000 (2012: $13,249,000).

Impairment and impairment reversals

write-down of inventory to recoverable amount recognised as an expense during the year ended 30 June 2013 amounted to nil (2012: $78,160,000). the expense for 2012 has been included in the net realisable value write-down amount in the statements of comprehensive income.

the most significant of write-downs for 2012 related to Point Grey, which has been impaired from $107 million to $48 million. the revised value is a Directors’ valuation, and follows a comprehensive reassessment of the project that took place over several months leading up to the lodgement of the financial statements. the reassessment took into account updated information on lot yield, likely selling prices, infrastructure costs and lot costs, and expert external advice was sought on material matters.

the Group’s inventories, net of impairments, and the balance of impairment provisions for inventories, are shown in tables in (a) and (b) below respectively.

Consolidated

2013 2012 $’000 $’000

(a) Inventories net of impairmentCurrentFinished apartments

Cost of acquisition 236 75

Development and other costs 33,787 10,768

Capitalised interest 4,063 1,300

impairment provision (16,606) (2,276)

total current 21,480 9,868

Non-currentFinished apartments

Cost of acquisition – 223

Development and other costs – 31,776

Capitalised interest – 3,838

impairment provision – (18,460)

– 17,377

Land under development

Cost of acquisition 97,497 97,496

Development and other costs 8,000 8,000

Capitalised interest 1,480 1,480

impairment provision (58,977) (58,977)

48,000 48,000

total non-current 48,000 65,377

Total inventories net of impairment 69,480 75,245


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(b) Inventory impairment provisions

Finished Land under apartments development Total $’000 $’000 $’000

2013Current

Balance as at 1 July 2012 (2,276) – (2,276)

Amounts utilised 4,130 – 4,130

transferred (to)/from non-current (18,460) – (18,460)

Additional provision created – – –

Balance at 30 June 2013 (16,606) – (16,606)

Non-current

Balance as at 1 July 2012 (18,460) (58,977) (77,437)

Amounts utilised – – –

transferred (to)/from non-current 18,460 – 18,460


Balance at 30 June 2013 – (58,977) (58,977)

Balance at 30 June 2013 (16,606) (58,977) (75,583)

2012Current

Balance as at 1 July 2011 – – –

Amounts utilised 1,249 – 1,249

transferred (to)/from non-current (2,267) – (2,267)


Balance at 30 June 2012 (1,018) – (1,018)

Non-current

Balance as at 1 July 2011 (2,804) – (2,804)

Amounts utilised – – –

transferred (to)/from non-current 2,267 – 2,267

Additional provision created (19,180) (58,977) (78,157)

Balance at 30 June 2012 (19,717) (58,977) (78,694)

Balance at 30 June 2012 (20,735) (58,977) (79,712)

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Consolidated

2013 2012 $’000 $’000

9. investments ACCounteD FoR usinG the eQuitY methoDInvestment details

stirling lakes Joint venture – 1,600

Allowance for impairment – (1,600)

– –

midland Court mortgage Finance (nsw) Pty ltd, a 100% controlled entity of PBD Developments limited, has a 50% interest in the following four companies: m.m.m. Developments Pty ltd, D.D. Developments Pty ltd, lighthouse investments Pty ltd and Goodrock Corporation Pty ltd. these four companies are party to a joint venture agreement which has undertaken the development of the Princeton Private estate in stirling. the joint venture is in the process of being wound up and there is limited exposure to future losses.

the interest in the stirling lakes Joint venture is accounted for in the Group’s financial statements using the equity method of accounting.

the Group’s share of accumulated losses in the joint venture at 30 June 2012 totalled $1,230,000 (2012: $1,230,000).

Share of joint venture assets and liabilities

Current assets – 264

total assets – 264

Current liabilities – (1,656)

non-current liabilities* – –

total liabilities – (1,656)

Net liabilities – (1,392)

* Non-current liabilities include amounts owed to the Company (refer Note 7).

Share of joint venture revenue, expenses and results

Revenues – 201

expenses – (6)

Profit/(loss) before tax – 195

Contingent liabilities relating to the joint venture

the Group has provided a mortgage over their shares in the joint venture entities and a fixed and floating charge over present and future rights, property and undertakings of the entities to the Group’s primary lender. Further information relating to PBD Developments limited’s loan to the joint venture and its recoverability is set out in note 7.

10. ReCeivABle FRom Joint ARRAnGementInvestment details

Bridgeview, Annandale 9,000 –

9,000 –

the Group’s Bridgeview investment is secured over the property at 300 Johnston st, Annandale by first registered mortgage, in the state of new south wales. Pursuant to the agreement for the Bridgeview joint arrangement, the Group will not withhold its approval toward postponing the mortgage behind that to the financier for construction for construction of the proposed 23 townhouses. the Group will also provide partial discharges of the mortgage as required to facilitate settlement of the townhouses.

the Group’s loan to the joint venture arrangement is initially measured at cost. Following initial recognition, and at 30 June 2013, an assessment was made of the recoverability of the loan. that assessment, taking into account any associated risks, indicated that there was no impairment of the loan.

the Company expects to receive from the joint arrangement, the principle invested, and a return on its investment.

Refer to note 22 for information relating to related parties.

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Consolidated

2013 2012 $’000 $’000

11. non-CuRRent Assets helD-FoR-sAle(a) Non-current assets classified as held-for-sale

non-current assets held-for-sale 2,948 4,233

2,948 4,233

included in the above asset totals in the year ended 30 June 2013 are:

• Lot370CountryClubDriveatPortBouvardResidentialEstate;and

• LandatBandyCreek,Esperance.

the assets are measured at the lower of their carrying amount and fair value less costs to sell. Refer to note 1 (z) for further information.

(b) Liabilities directly associated with non-current assets classified as held-for-sale

there are no liabilities directly associated with the non-current assets held-for-sale shown above.

Consolidated

Leasehold Plant and Assets under buildings equipment construction Total $’000 $’000 $’000 $’000

12. PRoPeRtY, PlAnt AnD eQuiPmentYear ended 30 June 2013

At 1 July 2012, net of accumulated depreciation – 204 2,647 2,851

Additions – 10 293 303

Disposals – (85) – (85)

Depreciation – (43) – (43)

net carrying amount – 86 2,940 3,026

At 30 June 2013

Cost – 242 2,940 3,182

Accumulated depreciation – (156) – (156)


Year ended 30 June 2012

At 1 July 2011, net of accumulated depreciation – 116 1,023 1,139

Additions – 175 1,624 1,799

Disposals – – – –

Depreciation – (87) – (87)


At 30 June 2012

Cost – 558 2,647 3,205

Accumulated depreciation – (354) – (354)


Balances of property, plant or equipment included in the table above contain no impairment at balance dates and all items are recorded at cost less depreciation.

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Consolidated

2013 2012 $’000 $’000

13. otheR AssetsCurrent

Prepaid expenses 160 274

160 274

14. tRADe AnD otheR PAYABlesCurrentUnsecured

trade creditors 134 347

other creditors and accruals payables (i) 763 340

897 687

Non-currentUnsecured

other payables – 4,274

– 4,274

trade payables are non-interest bearing and are normally settled on 30-60 day terms.

For terms and conditions relating to related party payables refer to note 22.

Details regarding the effective interest rate and credit risk of current payables are disclosed in note 2.

(i) included in the total of other creditors and accruals is $86,000 (2012: $88,000) in relation to accrued employee benefits (being annual leave). the entire amount is presented as current, since the Group does not have an unconditional right to defer settlement for these obligations.

Also included in other creditors and accruals for the current period is a deferred payment of $500,000 payable on 2 January 2014 to an unsecured creditor. this payment requirement was originally $4.9m, however was re-negotiated during the period.

15. BoRRowinGsCurrent

secured commercial overdraft 2,114 43,561

2,114 43,561

Non-current

secured commercial loan 20,757 –

20,757 –

Secured bank loan and overdraft

TheGroup’sbankfacilitiesat30June2013comprisedofacommerciallineofcredit($10millionlimit);bankguaranteelineofcredit($0.7millionlimit);and commercial loan ($20.758 million limit). the balance of unused facility funds available to the Group at 30 June 2013 is $7.9 million.

the commercial loan is permanently reduced upon the settlement of secured property, by predetermined amounts.

All facilities during the financial year were secured by registered first mortgages and debenture charges over various land and building owned by the Group.

All of the Group’s bank facilities at 30 June 2013 and 2012 are at variable interest rates.

Current

Although the Group’s bank facilities mature on 31 January 2016, the commercial overdraft facility ($2,114,000) is classified as current at 30 June 2013 (2012: $43,561,000), because pursuant to the facility agreement, the bank at any time may demand that the borrower repay the whole or part of the total amount owing. in that event, the borrower would need to repay the full amount the bank demands at the time specified in the demand.

Non-current

As the Group’s commercial loan facility matures on 31 January 2016, it is classified as non-current borrowings, being $20,757,000 (2012: nil).


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Consolidated

2013 2012 $’000 $’000

Assets pledged as security

the bank loan, overdraft and guarantees are secured by first mortgages over all of the Group’s land and buildings which are included in the accounts within inventory (held for development and sale) and non-current assets held for sale (see below).

the carrying amount of assets pledged as security for current and non-current borrowings are:

CurrentFirst mortgage

non-current assets held for sale 2,948 4,233

inventories 21,480 9,868

24,428 14,101

Floating charge


Receivables 239 809

other assets 160 274

non-current assets held for sale 2,948 4,233


Total current assets pledged as security

24,827 15,835

Non-currentFirst mortgage


Property, plant and equipment 3,025 2,851

51,025 68,228

Floating charge


Property, plant and equipment 3,025 2,851

Total non-current assets pledged as security 51,025 68,228

Total assets pledged as security 75,852 84,063

16. PRovisionsemployee benefit current 86 151

employee benefit non-current 92 67

178 218

the total of employee benefits solely relates to long service leave, pursuant to service agreements of the Group’s employees.

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17. ContRiButeD eQuitY(a) Movement in ordinary share capital

During the financial year the Parent entity did not issue any new shares.

Number of shares Value of shares

Movement Balance Date Details Movement Balance $’000 $’000

1 July 2011 opening balance 593,868,295 198,989

Balance at 30 June 2012 593,868,295 198,989

1 July 2012 opening balance 593,868,295 198,989

29 January 2013 shares issued 2,375,473,180 2,969,341,475 23,754 222,743

29 January 2013 transaction costs (2,005) 220,738

15 April 2013 shares issued 742,335,368 3,711,676,843 7,423 228,161

15 April 2013 transaction costs (16) 228,145

Balance at 30 June 2013 3,711,676,843 228,145

Fully paid ordinary shares carry one vote per share and carry the right to receive dividends.

(b) Capital risk management

the Group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. the Group considers capital to be a source of funding which will enable it to execute its business model.

Due to the nature of the property development industry significant amounts of capital are required before cash inflows are received from sale of finished products. in order to provide for its capital requirements, the Group’s will use debt and/or equity strategies appropriate at the time and manages its capital requirement on an ongoing basis.

Consolidated

2013 2012 $’000 $’000

18. ReseRvesshare based payments reserve:

Balance at 1 July 339 339

share based payments expense – –

transfer to accumulated losses (339) –

Balance at 30 June – 339

the purpose of the share-based payments reserve is to recognise the fair value of the options issued to employees under the employee option Plan.


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Parent Entity

2013 2012 $’000 $’000

19. DiviDenDsthere were no dividends declared and paid or payable during the year (2012: nil) and no dividends have been proposed since the end of the financial year.

Franking credit balance

the amount of franking credits available for the subsequent financial year are:

franking account balance as at the end of the financial year at 30% (2012: 30%) 1,106 1,106

1,106 1,106

the tax rate at which dividends have been franked is 30% (2012: 30%).

20. eARninGs/(loss) PeR shAReBasic earnings/(loss) per share amounts are calculated by dividing net profit/(loss) for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings/(loss) per share amounts are calculated by dividing the net profit/(loss) attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

Consolidated

2013 2012 $’000 $’000

net profit/(loss) attributable to ordinary equity holders of the parent from continuing operations (3,574) (115,464)

weighted average number of ordinary shares for basic earnings/(loss) per share 1,744,183,047 593,868,295

effect of dilution (i) – –

weighted average number of ordinary shares adjusted for the effect of dilution 1,744,183,047 593,868,285

weighted average number of converted, lapsed or cancelled potential ordinary shares included in diluted earnings per share – –

(i) Diluted shares include options issued under the employee share option Plan. there have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of completion of these financial statements.

the Group’s options do not exhibit dilutive qualities therefore there is no impact on earnings per share.

21. KeY mAnAGement PeRsonnelCompensation of key management personnel

the key management personnel were identified in the Directors’ Report. Details of compensation of the Group’s key management personnel are as follows:

Consolidated

2013 2012 $ $

short-term employee benefits 681,048 1,091,587

Post-employment benefits 55,631 78,922

share-based payments – –

736,679 1,170,509

Option holdings of key management personnel (consolidated)

Refer to note 28 for information regarding the Port Bouvard employee option Plan.

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21. KeY mAnAGement PeRsonnel continuedShareholdings and Option holdings of key management personnel (consolidated)

the numbers of shares held in the Parent entity during the financial year by key management personnel, including their personally related parties and options granted under the employee option Plan are set out below.

30 June 2013 ordinary shares

Balance Balance Balance at the start Exercise Other at the end nominally held Name of the year of options changes of the year by FKP Limited

Directors

mr w Chow1 175,000,000 – 700,000,000 875,000,000 875,000,000

mr AJ Young2 – – – – –

ms C Fu3 – – – – –

mr sJ Court4 7,000,000 – 3,000,000 10,000,000 –

mr DA hunt 175,000,000 – 700,000,000 875,000,000 875,000,000

mr m Jewell5 175,000,000 – (175,000,000) – –


mr J lin6 – – 50,034,382 50,034,382 –

mr P Coppini 789,250 – 3,178,375 3,967,625 –

mr D Guihot7 769,231 – – 769,231

1 Mr Chow was appointed as Director on 3 April 2013

2 Mr Young appointed as Director on 27 December 2012 and resigned on 16 September 2013

3 Ms Fu was appointed as Director on 5 April 2013

4 Mr Court resigned as Director subsequent to the current period on 15 August 2013

5 Mr Jewell resigned as Director on 3 April 2013 and no payments were made on termination

6 Mr Lin commenced employment as CEO on 1 June 2013

7 Mr Guihot was interim CEO for the period 1 July 2012 to 31 December 2012

30 June 2012 ordinary shares

Balance Balance Balance at the start Exercise Other at the end nominally held Name of the year of options changes of the year by FKP Limited

Directors

mr l verios1 3,004,719 – (3,004,719) – –

mr sJ Court 6,000,000 – 1,000,000 7,000,000 –

mr PR Brown 175,000,000 – – 175,000,000 175,000,000

mr Ge Grady 175,000,000 – – 175,000,000 175,000,000

mr DA hunt 175,000,000 – – 175,000,000 175,000,000

mr m Jewell2 – – 175,000,000 175,000,000 175,000,000


mr Jvm wroth 3 1,500,442 – (1,500,442) – –

mr P Coppini 789,250 – – 789,250 –


2 Mr Jewell was appointed Director on 21 July 2012

3 Mr Wroth’s CEO role concluded on 29 June 2012


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30 June 2013 options

Balance at Balance Balance the end of the at the start Options Other at the end year of options Name of the year granted changes of the year nominally held

Directors

mr w Chow1 – – – – –

mr AJ Young2 – – – – –

ms C Fu3 – – – – –

mr sJ Court4 – – – – –

mr DA hunt – – – – –

mr m Jewell5 – – – – –


mr J lin6 – – – – –

mr P Coppini – – – – –

mr D Guihot7 – – – –

1 Mr Chow was appointed as Director on 3 April 2013

2 Mr Young appointed as Director on 27 December 2012 and resigned on 16 September 2013

3 Ms Fu was appointed as Director on 5 April 2013

4 Mr Court resigned as Director subsequent to the current period on 15 August 2013

5 Mr Jewell resigned as Director on 3 April 2013, no payments were made on termination

6 Mr Lin commenced employment as CEO on 1 June 2013

7 Mr Guihot was interim CEO for the period 1 July 2012 to 31 December 2012

30 June 2012 options

Balance at Balance Balance the end of the at the start Options Other at the end year of options Name of the year granted changes of the year nominally held

Directors

mr l verios1 – – – – –

mr sJ Court – – – – –

mr PR Brown – – – – –

mr Ge Grady – – – – –

mr DA hunt – – – – –

mr Jewell2 – – – – –


mr Jvm wroth 3 1,900,000 – – 1,900,000 –

mr P Coppini – – – – –


2 Mr Jewell was appointed Director on 21 July 2011

3 Mr Wroth’s contract concluded on 29 June 2012

Mr Wroth may exercise his vested options in the 6 month period following the date of cessation of employment

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21. KeY mAnAGement PeRsonnel continuedLoans to key management personnel

there were no loans made to key management personnel or their personally related entities during the financial year.

Other transactions and balances with key management personnel and their related parties

transactions with key management personnel and their related parties during the financial year are as follows:

2013 2012 $’000 $’000

Aggregate amounts of each of the above types of transactions with key management personnel:

Amounts recognised as expense

Directors fees – DA hunt (paid to FKP) 21,800 –

Directors fees – m Jewell (paid to FKP) 11,109 –

32,909 –

Investment in Bridgeview, Annandale NSW

Refer to note 22 Related Party Disclosure for information with respect to the Company’s investment inn Bridgeview, Annandale and related party matters for Ceo, mr Jally lin.

22. RelAteD PARtY DisClosuReSubsidiaries

the consolidated financial statements include the financial statements of PBD Developments limited and the subsidiaries listed in the following table.

Equity Interest Investment

2013 2012 2013 2012 Name of Entity Country of Registration % % $’000 $’000

CP Development Pty ltd1 Australia 100 100 2,162 2,162

midland Court mortgage Finance (nsw) Pty ltd1, 2 Australia 100 100 – –

wannunup Development nominees Pty ltd1, 2 Australia 100 100 – –

esperance Development Company Pty ltd1, 3 Australia 100 100 – –

Furnissdale Development Company Pty ltd1, 3 Australia 100 100 – –

melros Beach Development Pty ltd1,3 Australia 100 100 – –

Point Grey Development Company Pty ltd1, 3 Australia 100 100 – –

PBD estate no 1 Pty ltd1, 3 Australia 100 100 – –

PBD estate no 2 Pty ltd1, 3 Australia 100 100 – –

PBD Realty Pty ltd1, 3 Australia 100 100 – –

Port Bouvard Funds management limited Australia 100 100 51 51

Peel water Pty ltd1 Australia 100 100 8,000 8,000

10,213 10,213

1 These controlled entities are not required to prepare audited financial statements.

2 These entities have a cost of investment of $2, which due to rounding is shown as nil in the above table.

3 These entities have a cost of investment of $1, which due to rounding is shown as nil in the above table.

Ultimate parent

PBD Developments limited is the ultimate parent company of the wholly-owned group.

Key management personnel

Details relating to key management personnel, including remuneration paid, are included in note 21.For

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Bridgeview, Annandale Joint Arrangement

During April 2013, the Group entered into a joint arrangement to develop 23 townhouses, in Annandale, nsw.

the parties to the joint arrangement are 100% subsidiary company PBD estate no 2 Pty ltd, Bhw Group Pty ltd (BHW) and Dundas Developments Pty ltd (Dundas).

As at 30 June 2013, mr Ben Zheng lin, son of Ceo, mr Jally lin, is sole director, company secretary and shareholder of Bhw. Bhw owns 100% of units in the trust which owns the Annandale land.

As mr J lin was appointed Ceo of the Company in may 2013 (taking effect in June 2013), at the time the Group entered into the Annandale joint arrangement, mr J lin was not an employee of the Group.

Refer to note 10 Receivable from Joint Arrangement for additional information with respect to Bridgeview, Annandale.

Outstanding balances receivable from or payable to related parties

Consolidated

2013 2012 $’000 $’000

Loans to joint venture entities

Beginning of the year, net of impairment1 520 313

loan repayments received 520 (192)

Provision written back – 399

end of year, net of impairment1 – 520

1 See Note 7(c) for information on impairment.

Terms and conditions

the terms and conditions of the tax funding agreement are set out in note 5.

All transactions are made on normal commercial terms and conditions and at market rates.

Terms and conditions – loan facilitiesJoint Venture 50% interest

the loan to the stirling lakes Joint venture accrues interest calculated on the difference between the joint venture partner loans. the rate of interest is based on a margin above the bank overdraft rate as specified in the joint venture agreement. the interest rate charged during the year ended 30 June 2013 was nil (2012: nil). the loan balance is expected to be repaid upon wind up of the joint venture.

Consolidated

2013 2012 $ $

23. RemuneRAtion oF AuDitoRsAmounts received or due and receivable by BDo for:

– an audit and review of the financial report of the entity and any other entity in the Group by BDo Audit (wA) Pty ltd 127,200 114,635

– tax compliance and advice by BDo Corporate tax (wA) Pty ltd 24,143 22,370

151,343 137,005

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Consolidated

2013 2012 $’000 $’000

24. exPenDituRe CommitmentsOperating lease commitments

the Group leases one commercial property under an operating lease expiring in march 20151.

Future minimum rentals payable under operating leases at 30 June are:

within one year 74 206

After one year but not more than five years – 360

more than five years – –

74 566

1 Subsequent to the end of the financial year, the lease has been cancelled. Refer to Note 31 Events Occurring After The Reporting Period for further information.

Capital commitments

the Group has no capital commitments at 30 June 2013 (2012: nil).

Consolidated

2013 2012 $’000 $’000

25. ContinGenCiesContingent liabilities

the Company and Group had contingent liabilities at 30 June 2013 in respect of:

Guarantees

the Group has provided guarantees in respect of certain undertakings of the Port Bouvard Residential estate project, in favour of:

the City of mandurah 700 788

700 788

the Group has access to a bank guarantee facility from its primary lender. the facility limit is $700,000 and the unused limit at 30 June 2013 is nil.

For expected maturities of these bank guarantees, please refer to note 2.

Joint ventures

For contingent liabilities relating to the joint venture refer to note 9.

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26. seGment inFoRmAtion(a) General information

in accordance AAsB 8 operating segments, the Group has assessed for the financial year ended 30 June 2013 what information is necessary to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.

Based upon this assessment, the Audit Committee of the Group determined that it operated one business segment of property development in Australia. operating results of the property development business segment are regularly reviewed by the Chief operating Decision maker, identified as the Board of Directors, to make decisions about resource allocation to that business and assess its performance.

(b) Segment information provided to the Board of Directors

Property Development

2013 2012 $’000 $’000

total segment revenue from external customers (i) 9,276 15,670

Revenue from external customers 9,276 15,670

Net (loss)/profit after income tax (ii) (3,574) (115,464)

the following items are included in the net loss after income tax, which is reviewed by the Group’s chief operating decision maker:

Depreciation and amortisation (43) (87)

net realisable value write down – (88,075)

Finance costs (3,770) (3,756)

share of net profit from joint venture – 162

income tax (expense)/benefit – (21,027)

Total segment assets 84,852 84,063

total assets includes:


Deferred tax assets – –

investments in associates and joint venture partnership – 1,600

Provision for diminution of investments in associates and joint venture partnership – (1,600)

Receivable from joint arrangement 9,000 –

Total segment liabilities 23,947 48,740

(c) Other segment information(i) Revenue

the revenue from external customers reported to the Board of Directors is consistent with what has been reported in the statements of comprehensive income.

Revenue from external customers is derived from the sale of land or built-form product when a valid sales contract settles whereby title passes to the purchaser.

segment revenue reconciles to total revenue from continuing operations as follows:

total segment revenue 9,276 15,670

Rendering of services 33 83

Forfeited deposits 222 718


Total revenue from continuing operations (Note 4) 9,626 16,628

(ii) Net profit/(loss) after tax

the Board assesses the performance of the operating segment based on net profit/(loss) after income tax.

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Consolidated

2013 2012 $’000 $’000

27. notes to CAsh Flow stAtementReconciliation of net profit after tax to net cash flows from operations

net profit/(loss) (3,574) (115,464)

Adjustments for:

Depreciation and amortisation 43 87

loss on sale of property, plant and equipment 16 –

write down of inventory – 78,157

write (up)/down of non-current assets held-for-sale (256) 9,918

share of net profit from joint venture – (162)

write up of investment in joint venture – 162

Changes in assets and liabilities

(increase)/decrease in trade and other receivables 41 (450)

(increase)/decrease in inventories 7,304 10,791

(increase)/decrease in other assets 113 122

(increase)/decrease in deferred tax assets – 25,483

increase/(decrease) in trade and other payables (3,973) (3,170)

increase/(decrease) in provisions (126) 60

increase/(decrease) in deferred tax liabilities – (4,457)

increase/(decrease) in current tax liability – –

net cash from/(used in) operating activities (412) 1,077

Disclosure of financing facilities

Refer to note 15.

28. shARe BAseD PAYments – emPloYee oPtion PlAnthe establishment of the PBD Developments limited employee option Plan (Plan) was approved by shareholders at the 2007 annual general meeting. Pursuant to Asx listing Rule 7.2 exception 9, the Plan was valid for a period of 3 years, therefore the 3 year period expired on 9 november 2010.

options granted under the Plan carry no dividend or voting rights.

During the year all options issued had similar exercise conditions as follows:

• 1/3rdoftheoptionswillvestonthedateofthegrant;

• 1/3rdoftheoptionswillvestonthefirstanniversaryofthedateofgrant;and

• 1/3rdoftheoptionswillvestonthesecondanniversaryofthedateofgrant.

the exercise Period commences on the date of grant and ends on the day before the fifth anniversary of the date of grant. Any option which has not been exercised before the end of the exercise Period will lapse.

the exercise Price is determined in accordance with the following formula:

exercise Price = 120% x CmP

where CmP is the Current market Price on the date of grant.

once exercised, shares delivered under the Plan will rank equally in all respects with all other shares from the date of delivery, including:

• votingrights;and

• entitlementstoparticipateindistributionsanddividendsandfuturerightsissuesandbonusissues.

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set out below are summaries of options granted under the Plan:

2013

Vested and Balance Granted Exercised Lapsed Balance exercisable at start of during during during at end of at end of Exercise the year the year the year the year the year the year Grant date Expiry date price (number) (number) (number) (number) (number) (number)

Consolidated – 2012

22 August 2007 21 August 2012 $2.05 650,000 – – (650,000) – –

9 December 2008 8 December 2013 $0.19 1,250,000 – – (1,250,000) – –

Total 1,900,000 – – (1,900,000) – –

weighted average exercise price – – $0.83 – –

2012

Vested and Balance Granted Exercised Lapsed Balance exercisable at start of during during during at end of at end of Exercise the year the year the year the year the year the year Grant date Expiry date price (number) (number) (number) (number) (number) (number)

Consolidated – 2012

22 August 2007 21 August 2012 $2.05 650,000 – – – 650,000 650,000

9 December 2008 8 December 2013 $0.19 1,250,000 – – – 1,250,000 1,250,000

Total 1,900,000 – – – 1,900,000 1,900,000

weighted average exercise price – – – $0.83 $0.83

Duringtheperiodthefollowingoccurred:650,000optionsexpiredon21August2012(2012:nil);1,250,000vestedoptionslapsedon31March2013(2012:nil);andnilunvestedoptionslapsed(2012:nil).

the weighted average remaining contractual life of share options outstanding at the end of the period was 0 months (2012: 6 months).

Fair value of options granted

the assessed average fair value at grant date of options granted during the year ended 30 June 2013 was nil, as there were no options granted (2012: nil). the fair value at grant date is independently determined using a Black-scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

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28. shARe BAseD PAYments – emPloYee oPtion PlAn continuedRe-valuation of Options granted

since the issue of the options in 2007 and 2008, PBD Developments limited issue shares pursuant to capital raisings in 2010 and 2013. As a result of the capital raisings, options granted on 22 August 2007 and 9 December 2008 have been re-valued on 23 June 2010 and 20 December 2012, in accordance with AAsB 2 share Based Payments and the rules of the Plan.

As a result of the re-valuation fair value of options were modified. the increment to fair value for vested options was $16,667 and this was recorded as an expense during the financial year ending 30 June 2010. the increment to fair value for unvested options was $4,167 and this has been expensed in financial years ending 30 June 2010 ($173) and 2011 ($3,994).

the model inputs for the re-valued options are provided below.

Re-valuation of Options granted 22 August 2007 (expired on 21 August 2012)• OptionsaregrantedfornoconsiderationandvestasmentionedpreviouslyinthisNote.Vestedoptionsareexercisableuntilthedaybeforethe

fifth anniversary of the date of grant.

• Balanceofoptionsre-valued:1,150,000

• Exerciseprice:$2.05

• Expirydate:21August2012

• Sharepriceatre-valuationdate:$0.25

• ExpectedpricevolatilityoftheCompany’sshares:100%

• Expecteddividendyield:0%

• Riskfreeinterestrate:4.57%

Re-valuation of Options granted 9 December 2008 (lapsed on 31 March 2013)• OptionsaregrantedfornoconsiderationandvestasmentionedpreviouslyinthisNote.Vestedoptionsareexercisableuntilthedaybeforethe

fifth anniversary of the date of grant.

• Balanceofoptionsre-valued:2,083,333

• Exerciseprice:$0.19

• Expirydate:8December2013

• Sharepriceat2012re-valuationdate:$0.19

• Sharepriceat2010re-valuationdate:$0.25

• ExpectedpricevolatilityoftheCompany’sshares:100%

• Expecteddividendyield:0%

• Riskfreeinterestrate:4.71%

the expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to future volatility due to publicly available information.

the total employee share option Plan expense recognised in the statements of comprehensive income during the year was nil (2012: $0.01m).

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29. DeeD oF CRoss GuARAnteeAt 30 June 2013 the following entities within the Group were parties to a deed of cross guarantee (Deed):

• PBDDevelopmentsLimited;

• CPDevelopmentPtyLtd;and

• WannunupDevelopmentNomineesPtyLtd

By entering into the Deed, the wholly-owned entities have been relieved from the requirement to prepare a financial report and Directors’ Report under Class order 98/1418 (as amended) issued by the Australian securities and investments Commission.

As the entities that are parties to the Deed are also represented in the Group there is no separate ‘Closed Group’ for the purposes of the Class order.

set out below in (a) is a consolidated statement of comprehensive income and a summary of movements in consolidated retained earnings for the year ended 30 June 2013 and 2012 for entities that are parties to the deed of cross guarantee at these dates. set out below in (b) is a consolidated statement of financial position as at 30 June 2013 and 2012 for the entities that were parties to the deed of cross guarantee at these dates.

2013 2012 $’000 $’000

(a) Statement of profit or loss and other comprehensive income

sale of goods 9,276 15,670

Rendering of services – 3

Rental revenue – –


Forfeited deposits 222 718

Revenue 9,593 16,460

other income 226 1,059

Cost of sales (7,741) (13,249)

other selling expenses (77) –

employee benefits expense (1,320) (2,073)

other expenses (707) (1,027)

Commissions and discounts (589) (868)

Advertising and marketing (202) (697)

Finance costs (3,479) (3,748)

Repairs and maintenance (153) (265)

Rental expenses (172) (201)

Consultants fees (242) (328)

Rates and taxes (228) (320)

Depreciation and amortisation (43) (87)

legal fees (150) (831)

net realisable value write down 1,395 (90,249)

Loss before income tax (3,889) (96,424)

income tax (expense)/benefit – (35,117)

Loss after tax from continuing operations (3,889) (131,541)

Comprehensive loss (3,889) (131,541)

Accumulated losses at the beginning of the year (165,174) (33,634)

transfer from reserves 339 –

loss for the year (3,889) (131,541)

Accumulated losses at the end of the financial year (168,724) (165,174)For

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2013 2012 $’000 $’000

29. DeeD oF CRoss GuARAntee continued(b) Statement of financial position

Current Assets


trade and other receivables 82,085 65,089


other assets 158 261

Current Assets 97,619 75,663

non-current assets classified as held-for-sale 1,398 2,729

Total Current Assets 78,392

Non-Current Assets


other financial assets 8,051 8,051

Property, plant and equipment 86 204

Deferred tax assets – –

Total Non-Current Assets 14,241 25,632

TOTAL ASSETS 113,258 104,024

Current Liabilities

trade and other payables 29,829 29,749

Borrowings – 38,859

Provisions – 151

Total Current Liabilities 29,829 68,759

Non-Current Liabilities

Provisions 92 67

Borrowings 22,872 –

Deferred tax liabilities – –

Total Non-Current Liabilities 22,964 67

TOTAL LIABILITIES 52,793 68,826

NET ASSETS 60,465 35,198

EQUITY

Contributed equity 228,145 198,989

Reserves 1,044 1,383

Accumulated losses (168,724) (165,174)

TOTAL EQUITY 60,465 35,198

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2013 2012 $’000 $’000

30. PARent entitY FinAnCiAl inFoRmAtion(a) Summary financial informationBalance sheetCurrent Assets 81,685 66,449

non-current assets 10,299 10,417

total assets 91,984 76,866

Current liabilities 6,395 39,442

non-current liabilities 22,964 66

total liabilities 29,359 39,508

net assets 62,625 37,358

EquityContributed equity 228,145 198,989

Reserves – 339

Accumulated losses (165,520) (161,970)

Total equity 62,625 37,358

loss for the year after income tax (3,890) (133,058)

Total comprehensive loss for the period net of income tax (3,890) (133,058)

(b) Guarantees entered into by the parent entity

the parent entity has provided financial guarantees in respect of bank facilities of the Group amounting to $22,872,000 (2012: $43,561,000). A liability has been recognised in relation to these financial guarantees in accordance with the policy set out in notes 1(r) and 2.

Additionally, there are cross guarantees given by PBD Developments limited, CP Development Pty ltd and wannunup Development nominees Pty ltd as described in note 29.

PBD Developments limited did not have a deficiency in assets as at 30 June 2013 or 30 June 2012. there were deficiencies of assets in CP Development Pty ltd and wannunup Development nominees Pty ltd as at 30 June 2013 and 30 June 2012.

with respect to the asset deficiencies of CP Development Pty ltd and wannunup Development nominees Pty ltd, PBD Developments limited recorded a decrease to the impairment provision by $170,000 at 30 June 2013. At 30 June 2012, PBD Developments limited recorded an increase to the impairment provision by $29,548,000.

(c) Contingent liabilities of the parent entity

the parent entity did not have any contingent liabilities as at 30 June 2013 or 30 June 2012. For information in respect to guarantees given by PBD Developments limited, please see above.

(d) Contractual commitments for the acquisition of property, plant or equipment.

the parent entity did not have any contractual commitments for the acquisition of property, plant or equipment at 30 June 2013 or 30 June 2012.

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31. events oCCuRRinG AFteR the RePoRtinG PeRioDShort term loan

PBD Developments limited has entered into an unsecured loan short-term loan for $12 million, for the purpose of funding its investment in the proposed Burwood square apartment project. the commencement of the loan is 13 september 2013, for a 3 month term, at an interest rate of 13% p.a. the loan is due and payable, in full, at the end of the term.

Project investment

During september 2013 PBD Developments limited made an investment into the proposed Burwood square apartment project in sydney, nsw. the transaction represents the Company’s second venture into the sydney development market. Refer to the Company’s Asx announcement on 27 september 2013 for further information on the project.

Capital commitments

the lease for the Company’s south Perth office expires on 18 February 2014. under the terms of the lease, the Company is required to leave the premises in good order as is usually required at the end of a commercial lease.

under the terms of the development agreement for the proposed Burwood square apartment project, the Company is required to make capital contributions. the Company’s contributions will be funded by debt.


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Directors’ Declaration

in the directors’ opinion:

1. the attached financial statements and notes thereto comply with the Corporations Act 2001, the Accounting standards, the Corporations Regulations2001andothermandatoryprofessionalreportingrequirements;

2. the attached financial statements and notes thereto comply with international Financial Reporting standards as issued by the international AccountingStandardsBoardasdescribedinNote1tothefinancialstatements;

3. the attached financial statements and notes thereto give a true and fair view of the consolidated entity’s financial position as at 30 June 2013 and of itsperformanceforthefinancialyearendedonthatdate;

4. therearereasonablegroundstobelievethattheCompanywillbeabletopayitsdebtsasandwhentheybecomedueandpayable;and

5. at the date of this declaration, there are reasonable grounds to believe that the members of the extended Closed Group will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee described in note 29 to the financial statements.

signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.

on behalf of the directors:

David Hunt Director

30 september 2013 sydney new south wales

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to the members of PBD Developments limited

RePoRt on the FinAnCiAl RePoRtwe have audited the accompanying financial report of PBD Developments limited, which comprises the consolidated statement of financial position as at 30 June 2013, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

the directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. in note 1, the directors also state, in accordance with Accounting standard AAsB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.

Auditor’s Responsibility

our responsibility is to express an opinion on the financial report based on our audit. we conducted our audit in accordance with Australian Auditing standards. those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. the procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. in making those risk assessments, the auditor considers internal control relevant to the company’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

in conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. we confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of PBD Developments limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

Opinion

in our opinion:

(a) the financial report of PBD Developments limited is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2013 and of its performance for the year ended on that date;and

(ii) complying with Australian Accounting standards and the Corporations Regulations 2001;and

(b) the financial report also complies with International Financial Reporting Standards as disclosed in note 1.

independent Audit Report

Tel: +8 6382 4600

Fax: +8 6382 4601

ww w.bdo.com.au

38 Station Street

Subiaco, WA 6008

PO Box 700 West Perth WA 6872

Australia

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company

limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of

independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory

other than Tasmania.

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RePoRt on the RemuneRAtion RePoRtwe have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2013. the directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing standards.

Opinion

in our opinion, the Remuneration Report of PBD Developments limited for the year ended 30 June 2013 complies with section 300A of the Corporations Act 2001.

BDO Audit (WA) Pty Ltd

Wayne Basford Director

Perth, 30 september 2013

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Asx ADDitionAl inFoRmAtionRange of securityholders as at 30 september 2013

Range Total holders Units % of Issued Capital

1 – 1,000 293 155,660 0.00

1,001 – 5,000 649 1,934,904 0.05

5,001 – 10,000 357 2,881,460 0.08

10,001 – 100,000 943 35,365,012 0.95

100,001 – 9,999,999,999 558 3,671,339,807 98.91

Total 2,800 3,711,676,843 100.00

unmarketable Parcels 1,777 13,407,707

toP 20 seCuRitYholDeRs As At 30 sePtemBeR 2013Rank Name Units % of Units

1. CitiCoRP nominees PtY limiteD 689,891,407 18.59

2. sun hunG KAi investment seRviCes limiteD <Client A/C> 579,336,648 15.61

3. sun hunG KAi investment seRviCes ltD <Client KAtonG Assets ltD A/C> 430,998,595 11.61

4. sun hunG KAi investment seRviCes ltD <Client FutuRe Rise inv A/C> 344,570,469 9.28

5. sun hunG KAi investment seRviCes ltD <Clients A/C> 303,000,000 8.16

6. AheAD CAPitAl limiteD 292,300,986 7.88

7. FKP limiteD 185,583,842 5.00

8. nAtionAl nominees limiteD 156,788,312 4.22

9. mR liAnG Zhen lin 50,034,382 1.35

10. PiAmA PtY ltD <FenA suPeRAnnutAion PlAn A/C> 29,895,640 0.81

11. hsBC CustoDY nominees (AustRAliA) limiteD 29,022,840 0.78

12. iCe ColD investments PtY ltD <BRowns CheltenhAm RD s/F A/C> 18,000,000 0.48

13. ZeRo nominees PtY ltD 18,000,000 0.48

14. ABn AmRo CleARinG sYDneY nominees PtY ltD <CustoDiAn A/C> 17,712,704 0.48

15. wK mARBle AnD GRAnite PtY ltD 13,084,064 0.35

16. meRRill lYnCh (AustRAliA) nominees PtY limiteD 12,819,864 0.35

17. CoRnelA PtY ltD <iAn mACliveR suPeR FunD A/C> 12,500,000 0.34

18. tRiDA PtY ltD 11,500,000 0.31

19. J P moRGAn nominees AustRAliA limiteD 11,020,541 0.30

20. mR BRiAn AllAn seYmouR 10,569,659 0.28

TOTAL 3,216,629,953 86.66

BALANCE OF REGISTER 495,046,890 13.34

suBstAntiAl seCuRitYholDeRs As At 3o sePtemBeR 2013 Number of % of Securityholder Securities Held Securities Held

mulpha Group 738,623,691 19.9%

Future Rise investments 581,618,300 15.67%

Katong Assets limited 456,025,188 12.29%

Ahead Capital limited 292,300,986 7.88%

lin wan Qaing 200,000,000 5.39%

FKP limited 185,583,842 5.00%

supplementary securityholder informationF

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Level 5, 99 Macquarie Street Sydney NSW 2000

Telephone (02) 9270 6100 ABN 12 009 134 114

ww w.pbddevelopments.com.au

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for personal use only - australian securities exchange · justin lorenz (alternate ... the board of...

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