COMMUNICATIONS (FIJI) LIMITED
ANNUAL REPORT 2011
CONTENTS
Page Number
Directors, Advisors and Management Team ............................................................................... ii-iii
Notice of Annual General Meeting.............................................................................................. iv
Chairman's Report....................................................................................................................... v-vi
Corporate Governance................................................................................................................ vii-viii
Director's Report.......................................................................................................................... 3-5
Statement by Directors................................................................................................................ 6
Independent Auditor's Report...................................................................................................... 7-8
Income Statement....................................................................................................................... 9
Balance Sheet............................................................................................................................. 10
Statement of Cash Flows............................................................................................................ 11
Statement of Changes in Equity.................................................................................................. 12
Notes to and forming part of the financial statements................................................................. 13-36
Listing requirements of South Pacific Stock Exchange............................................................... 37-40
Minutes of the previous AGM...................................................................................................... 41-44
Proxy Form.................................................................................................................................. 45
i
BOARD MEMBERS
Mr. Matthew Wilson
Mr. William Parkinson
Chairman
Mrs. Shaenaz Voss
AUDITORS
Mr. Parmesh Sharma
Mr. Semi Leweniqila
SOLICITORS
Ernst & Young
Chartered Accountants
Suva.
REGISTERED OFFICE
231 Waimanu Road, Suva Telephone: (679) 331 4766
ii
BANKERS
MANAGEMENT TEAM
William Parkinson
Ian Jackson
Managing Director
General Manager - CFL
Adrian Au
Jyoti Solanki
General Manager - PNG FM LTD
Group Financial Controller &
Company Secretary
iii
COMMUNICATIONS (FIJI) LIMITED
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Twenty seventh Annual General Meeting of the members of Communications
(Fiji) Limited will be held at 3pm on Monday, the 23rd of April 2012, at 231 Waimanu Road, Suva to transact
the following business:
Ordinary business
1.
Confirmation of the minutes of the twenty sixth Annual General Meeting held on 21st of April 2011.
2.
Matters arising from the minutes
3.
To receive and adopt the Audited Balance Sheets and Profit and Loss Statements and the reports
of the Directors and Auditors for the year ended 31st December 2011.
4.
To elect, re-elect and re-appoint Directors.
5.
Confirmation of chairman’s appointment.
6.
To appoint Auditors from the conclusion of this meeting until the conclusion of the next Annual
General Meeting at a fee to be negotiated by the Directors. The retiring Auditors M/s. Ernst & Young,
Chartered Accountants, being eligible, offer themselves for appointment.
7.
Adopt that a final dividend of $177,900 (5 cents per share) declared for the year 2011.
8.
Any other business brought up in conformity with the Articles of Association of the company.
By order of the Board of Directors,
Jyoti Solanki
Company Secretary
Dated: 30th March 2012
Suva, Fiji Islands
iv
COMMUNICATIONS (FIJI) LIMITED
Chairman’s Report
2011 was a year of significant and progressive change for Communications Fiji Ltd. The Board set a number
of key goals. These included restructuring subsidiary I-PAC Communications Ltd (Unwired Fiji) so that it could
deliver on the potential we have always felt it had. We aimed to maintain steady growth of Fiji broadcasting
operations and take full advantage of Papua New Guinea’s high levels of economic expansion via our 100%
subsidiary PNG FM.
I-PAC Communications Ltd (Unwired Fiji)
As shareholders will be aware Unwired Fiji has struggled since inception. A combination of the pressures of
being a pioneer in the wireless internet market, rapid changes in technology and pricing pressure from the
major players in the telecommunications industry, resulted in the company accumulating over $5 million in
losses to December 31st 2011.
In recent years shareholders have taken several initiatives to reorganize Unwired Fiji to meet these challenges.
Performance improved, but the growing dominance of major telecommunication operators and the constant
requirement to inject new capital to upgrade technology, threatened long term viability.
Late last year (2011) Unwired’s major shareholder, Papua New Guinea based Datanets Ltd, was purchased by
Digicel Pacific Limited. This opened up new possibilities for Unwired. The result was a two phase reorganisation
starting with repayment of debt. The CFM share of this was $1.2 million. In the second phase Digicel Pacific
has financed the expansion of Unwired Fiji to the Western Division and further invested in technology to allow
the network to continue to compete in the internet market.
The end result is that the new-look Unwired Fiji becomes an internet service provider that will have the scale
and technology to compete in what is a ferociously competitive market place. CFM’s investment in Unwired Fiji
will now drop to 12.5%. The final transfer of shares is currently underway. While it wasn’t completed before the
end of the 2011 financial year the Board felt (on the advice of our Auditors and IFRS reporting requirements)
that it was prudent to readjust the value of our investment in iPAC Communications Ltd in the 2011 report. This
produced a write down in the value of our investment of $1.1 million.
This is obviously a massive readjustment but we are confident that under the new structure Unwired Fiji will
become profitable.
Our 50% ownership of 231 Waimanu Rd Ltd – CFM’s headquarters building - continues to have a steady and
positive effect on our bottom line. This has improved slightly with the changes in company taxation.
Despite the Unwired write down we were still able to deliver a consolidated after tax profit of $876,558.00. This
is a testimony to the strength of our broadcast operations.
Fiji Operations (not including Associates)
It was a challenging year for our Fiji operations. Midyear we were informed, with minimal notice, that we were
required to change the broadcast frequencies of all our stations. Our team in Fiji turned in an exemplary effort
to meet the deadline - the only broadcaster to manage this. There was, however, a significant operational
disruption and an unbudgeted cost of over $400,000.00.
Despite these difficult circumstances, the Fiji team managed to increase profitability pretax by 28% to
$1,060,694 (2010 825,463). We can justifiably say this was an amazing result, especially in light of the general
performance of the Fiji economy.
Our focus in the coming year will be on consolidation of current operations while continuing to seek new ways
to extract value from the Fiji market.
v
It is difficult to make a forecast for the coming year. Recent tax changes have increased the burden on locally
owned listed companies. We are hoping advertising results will improve from an anticipated lift in consumer
spending.
Papua New Guinea
While we expected a strong performance, the final result was still very impressive with net operating profit
before tax rising 70% to K2,187,197 (2010 K1,285,839).
Consistent with our goals of maximizing growth in Papua New Guinea, we launched our third radio station
– Legend FM - in the PNG market. Built on the same concept as Legend FM in Fiji, the PNG station quickly
began to contribute to the bottom line. We expect further growth in 2012.
PNG FM, in partnership with the City Pharmacy Group and Damodar Brothers Films Limited from Fiji,
launched Paradise Cinemas Ltd in which we hold a 33.3% shareholding. The company recently opened its
first cinema complex in Port Moresby. Response has been positive reinforcing our prediction that this will be
a highly successful venture. PNG FM can also expect immediate returns from this investment through the
cinema advertising division CinemADs PNG.
The business strategy in play here is to develop profit centers initially in Fiji and then adapt them for the PNG
market. This formula is proving successful despite the significant differences between the markets.
Finally I would like to acknowledge the valuable contribution of my predecessor Mr Hari Punja as Chairman
of Communications Fiji Ltd. As shareholders are aware he was required to sell his shareholding in
Communications Fiji Ltd in line with the provisions of the Media Industry Development Decree. Mr. Punja was
a founding shareholder of Communications Fiji Ltd and has provided critical guidance and support over the
last 26 years. We pay tribute to him for that. Fortunately his shareholding was taken up by Parkinson Holdings
Limited (holding company of Managing Director William Parkinson) thus securing the future of CFM in the
hands of founding shareholders.
In summary it was an eventful year for Communications Fiji Limited. The Board feels shareholders can be
confident that 2012 will be a period of growth and achievement resulting in improved returns for shareholders.
In 2011 we increased dividends to 10 cents per share and should current trends continue a further increase
can be expected in 2012.
Matt Wilson
Chairman
vi
COMMUNICATIONS (FIJI) LTD
CORPORATE GOVERNANCE IN ACCORDANCE WITH GUIDELINE PROVIDED BY
RESERVE BANK OF FIJI
Role of the Board
The role of the Board is to ensure that Management is provided with general and strategic direction to enhance
corporate profit and shareholder’s value. Decisions made by the Board should safeguard interests of the
shareholders by overseeing Management and regularly assessing controls and accountability systems.
The Board
The Board comprised of six Directors including two independent Directors at the end of financial year 2011. All
appointments and removal of directors are confirmed at the Annual General Meeting.
Mr Matt Wilson was appointed as chairman subsequent to resignation by Mr Hari Punja on 15th February. His
appointment will be confirmed at the Annual General Meeting on 23rd April 2012.
The Board has not set up any committees. All matters are dealt collectively by the Board. Approval for urgent
matters is sought via flying minute.
Board Meetings
Board meeting discussions revolve around capital projects, financial performance and comparisons to budgets,
editorial and operational matters, compliance with corporate governance requirements, management reports
and the financial results of its subsidiaries and associates.
Directors
Number of
Number of meetings entitled meetings
to attend
attended
Mr Hari Punja (Chairman)
Mr.William Parkinson(Managing Director)
Mr Mathew Wilson
Mrs Shaenaz Voss/Vilash Chand
(Alternate Director)
Mr Pramesh Sharma
Mr Semi Leweniqila (Independent Director)
8
8
8
5
8
8
8
8
8
8
8
6
Apologies
3
2
Responsibilities of the Board
Each year the Board goes through the process of assessing the company’s strategic plan, performance
targets, business objectives and internal control policies. All matters relating to corporate governance are
handled by the Board collectively.
The Finance department is responsible for producing financial information, monitoring external audits, reviewing
half year and annual financial statements and monitoring company’s compliance with stock exchange and
other requirements by external bodies. The Board is informed on these matters regularly by management and
approval is sought by way of flying minutes, depending on the urgency of the matter.
Constituting an Effective Board
The CFM Board comprises of three Directors representing significant shareholders, two independent Directors
and the Managing Director. All Directors are qualified individuals with wide experience in the media industry
vii
and the commercial sector. Appointments are based on qualification, skill, experience, knowledge and integrity
of the individual.
Appointment of a Chief Executive Officer (Managing Director)
Mr William Parkinson continued in his role as Managing Director. His contract was renewed last year. His
appointed by the Board was based on over 25 years experience in the media industry in the Pacific and in
recognition of his performance in leading Communications Fiji Ltd since its inception in 1984. The remuneration
package for the Managing Director was decided by the Board based on independent advice sought from
Chartered Accounting firm PricewaterhouseCoopers.
Board and Company Secretary
The Company Secretary, Jyoti Solanki is a qualified accountant and has substantial years of experience
in management and accounting field. She is responsible for ensuring CFM remains compliant to various
regulatory requirements, meets statutory obligations, board policy and procedures. She maintains minutes of
board meetings and is accountable to the Board on all governance issues.
Timely and balanced Disclosures
Board meetings are held on quarterly basis where company’s performance, strategies and operating results
are discussed. On the basis of these discussions, major decisions are deliberated and approved by the Board.
All the required material information is released periodically to the public through market announcements,
as required under the rules of the SPSE. In between meetings, the Board is kept informed by the Managing
Director on all the relevant matters transacting during the period.
Promote ethical and responsible decision-making
The Board realizes that no organization can flourish if there is an absence of ethical and responsible decision
making. Therefore, the Board has placed strong emphasis on encouraging management to engage in
discussions and training that would foster improved ethical and responsible decision making.
Register of Interest
In the past the interest of Directors was noted in the minutes. However, the Board has decided to maintain a
register from 2011 to note down Directors interest after every board meeting.
Respect the rights of shareholders
The shareholders of CFM are well informed through market announcements, media briefings and the Annual
General Meeting. The Company also has an official website cfl.com.fj which is updated on a regular basis.
Accountability and Audit
Each subsidiary is separately audited annually by an external auditor and an Independent audit report is
presented to the Board. This report also forms part of the Annual Report. External auditors are appointed
every year by shareholders in the Annual General Meeting.
Though, the Company doesn’t have an internal audit team, special projects relating to Audit are performed by
the Finance team and reports are presented to Management and the Board.
Recognise and manage risk
The Company does not have a separate risk management committee. However, the Managing Director,
Company Secretary and General Managers conduct continuous assessment on material business and
operational risks and transmit it to the Board. They also ensure that proper controls and procedures are in
place to administer these risks.
viii
vii
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
DIRECTORS' REPORT
FOR ThE YEAR ENDED 31 DECEMBER 2011
In accordance with a resolution of the Board of Directors, the Directors herewith submit the Consolidated Statement of Financial
Position of the company and its subsidiary as at 31 December 2011, the related Consolidated Statement of Comprehensive Income,
Consolidated Statement of Changes in Equity and Consolidated Statement of Cash flows for the year then ended on that date and
report as follows:
Directors
Directors at the date of this report are:
Hari Punja (resigned on 15 February 2012)
Mathew Wilson (appointed as Chairman on 15 February 2012)
William Parkinson
Pramesh Sharma
Shaenaz Voss
Semi Leweniqila
Principal Activity
The principal business activity of the company and the subsidiary company in the course of the year was the operation of
commercial radio stations and there has been no significant change in this activity during the year. The associate companies
provide wireless Internet services and renting of a property respectively.
Results
The operating group profit for the year was $876,558 (2010: $1,318,038) after providing $711,232 (2010: $308,988) for income tax.
Th operating
ti
l
f the
th holding
h ldi
f the
th year was $276,696
$276 696 (2010:
(2010 Profit
P fit $679,431)
$679 431) after
ft an income
i
t off $218,484
$218 484
The
loss
for
company for
tax
(2010: $37,490).
Dividends
The directors declared and paid a final dividend for 2010 of $142,320 and an interim dividend for 2011 of $177,900 - 5 cents per
share during the year. Final dividend for 2011 declared but unpaid after year end is $177,900 - 5 cents per share.
Reserves
The directors recommended that no transfer be made to reserves during the year.
Bad and Doubtful Debts
Prior to the completion of the company and its subsidiary's financial statements, the directors took reasonable steps to ascertain
that action had been taken in relation to writing off bad debts and the provision for doubtful debts. In the opinion of directors,
adequate provision has been made for doubtful debts.
As at the date of this report, the directors are not aware of any circumstances, which would render the amount written off for bad
debts, or the provision for doubtful debts in the company and the subsidiary company, inadequate to any substantial extent.
Non-Current Assets
Prior to the completion of the financial statements of the company and of the subsidiary company, the directors took reasonable
steps to ascertain whether any non-current assets were unlikely to be realised in the ordinary course of business as compared to
their values as shown in the accounting records of the company and the subsidiary company. Where necessary these assets have
been written down or adequate provision has been made to bring the values of such assets to an amount that they might be
expected to realise.
As at the date of this report, the directors are not aware of any circumstances, which would render the values attributed to noncurrent assets in the company's and the subsidiary company's financial statements misleading.
2
3
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
DIRECTORS' REPORT continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
Unusual Transactions
Apart from these matters and other matters specifically referred to in the financial statements, in the opinion of the directors, the
results of the operations of the company and of the subsidiary during the financial year were not substantially affected by any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the
operations of the company and the subsidiary company in the current financial year, other than those reflected in the financial
statements.
Significant events during the year
During the financial year the company's subsidiary, PNG FM Limited invested PGK1,000,000 in Paradise Cinemas (PNG) Limited
("Paradise Cinemas"). PNG FM now owns one-third of shares in Paradise Cinemas. As at 31 December 2011, Paradise Cinemas
was under construction. Paradise Cinemas commenced operations on 23 February 2012.
Events Subsequent to Balance Date
On 6 January 2012, one of the major shareholders, Hari Punja and Sons Limited sold its entire shareholding in the company to
Parkinson Holdings Limited. The trade involved a special crossing of 989,967 shares at $2.10 per share. With this share acquisition,
Parkinson Holdings Ltd, representing the interests of Managing Director William Parkinson, now has 55.48 % shareholding in
Communications (Fiji) Ltd.
The shareholding structure of associate company, i-Pac Communications Limited, is expected to change in 2012 and will result in
the dilution of the shareholding of Communications (Fiji) Limited. The effect of the dilution has been recorded in the 31 December
2011 financial statements.
Apart from the above, no matters or circumstances have arisen since the end of the financial year which significantly affected or
may significantly affect the operations of the company and its subsidiary, the results of those operations, or the state of affairs of the
company and its subsidiary in future financial years.
Other Circumstances
As at the date of this report :
(i)
no charge on the assets of the company and its subsidiary has been given since the end of the financial year to secure the
liabilities of any other person;
(ii)
no contingent liabilities have arisen since the end of the financial year for which the company and its subsidiary could become
liable; and
(iii)
no contingent liabilities or other liabilities of the company and its subsidiary have become or are likely to become enforceable
within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may
substantially affect the ability of the company and its subsidiary to meet its obligations as and when they fall due.
As at the date of this report, the directors are not aware of any circumstances that have arisen, not otherwise dealt with in this report
or the company's and its subsidiary's financial statements, which would make adherence to the existing method of valuation of
assets or liabilities of the company and its subsidiary misleading or inappropriate.
Directors' Benefits
Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than those
included in the aggregate amount of emoluments received or due and receivable by directors shown in the financial statements or
received as the fixed salary of a full-time employee of the company or of a related corporation) by reason of a contract made by the
company or by a related corporation with the director or with a firm of which he is a member, or with a company in which he has a
substantial financial interest.
3
4
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
DIRECTORS' REPORT continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
Directors' Interests
Particulars of directors' interests in the ordinary shares of the company during the year are as follows:
Direct interest
Nil
112,736
Nil
Hari Punja
Matt Wilson
William Parkinson
Indirect interest
989,967
Nil
983,966
Signed on behalf of the Board of Directors in accordance with a resolution of the directors.
Date this day of
2012.
Director: ……………………………………………………..
Director: ……………………………………………………..
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
4
5
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
STATEMENT BY DIRECTORS
FOR ThE YEAR ENDED 31 DECEMBER4 2011
In accordance with a resolution of the Board of Directors, we state that in our opinion:
(i)
the accompanying statement of comprehensive income of the company and subsidiary is drawn up so as to give a true and fair
view of the results of the group for the year ended 31 December 2011;
(ii)
the accompanying statement of changes in equity of the company and subsidiary is drawn up so as to give a true and fair view
of the changes in equity of the group for the year ended 31 December 2011;
(iii) the accompanying statement of financial position of the company and subsidiary is drawn up so as to give a true and fair view
of the state of affairs of the group as at 31 December 2011;
(iv) the accompanying statement of cash flows of the company and subsidiary is drawn up so as to give a true and fair view of the
statement of cash flows of the group for the year ended 31 December 2011;
(v) at the date of this statement there are reasonable grounds to believe the company and subsidiary will be able to pay its debts
as and when they fall due; and
(vi) all related party transactions have been adequately recorded in the books of the company and subsidiary.
Signed on behalf of the Board of Directors in accordance with a resolution of the directors this
day of
2012.
Director: ……………………………………………………..
Director: ……………………………………………………..
5
6
Pacific House
Level 7
1 Butt Street Suva Fiji
P O Box 1359 Suva Fiji
Tel: +679 331 4166
Fax: +679 330 0612
www.ey.com
INDEPENDENT AUDIT REPORT
To the members of COMMUNICATIONS (FIJI) LIMITED
Scope
We have audited the accompanying financial statements of Communications (Fiji) Limited and its subsidiaries ('the Group'), which
comprise the consolidated statement of financial position as at 31 December 2011 and the consolidated statement of
comprehensive income, the consolidated statement of changes in equity, the consolidated statement of cash flows for the year then
ended and a summary of significant accounting policies and other explanatory notes.
Directors' and Management's Responsibility for the Financial Statements
The Directors and management are responsible for the preparation and fair presentation of the consolidated Financial Statements
in accordance with International Financial Reporting Standards and the requirements of the Fiji Companies Act, 1983. This
responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of
the consolidated financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying
appropriate accounting policies; and making estimates that are reasonable in the circumstances.
Auditor's Responsibility
Our responsibility is to express an opinion on the consolidated Financial Statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether the consolidated Financial Statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated Financial
Statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material
misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the group's preparation and fair presentation of the consolidated financial statements 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 group's internal control. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements.
We have examined the financial statements and the auditors' report of the subsidiary company of which we have not acted as
auditors. The audit reports on the financial statements of the subsidiary company was not subject to any qualification.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion
In our opinion:
a)
proper books of account have been kept by the company, so far as it appears from our examination of those books, and
b)
the accompanying consolidated Financial Statements which have been prepared in accordance with International Financial
Reporting Standards:
i) are in agreement with the books of account; and
ii) to the best of our information and according to the explanations given to us:
a) give a true and fair view of the state of affairs of the company and the group as at 31 December 2011 and of its
financial performance, changes in equity, and its cash flows for the year ended on that date; and
b) give the information required by the Fiji Companies Act, 1983 in the manner so required.
6
7
We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the
purposes of our audit.
Other matter
Financial statements of i-Pac Communications Limited as at 31 December 2011 was not subject to an audit. The management
accounts were reviewed by us in accordance with International Standards on Auditing as applicable to review engagements.
Suva, Fiji
Ernst & Young
Chartered Accountants
2012
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
7
8
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
CONSOLIDATED STATEMENT OF COMPREhENSIVE INCOME
FOR ThE YEAR ENDED 31 DECEMBER42011
Group
Notes
2011
$
holding Company
2010
$
2011
$
2010
$
Radio income
4.1
11,324,519
9,286,036
4,817,752
4,596,275
Other revenue
Salaries and employee benefits
Depreciation and amortisation
Other expenses
4.2
4.3
4.4
4.5
544,060
(2,773,257)
(869,251)
(5,317,563)
386,005
(2,475,824)
(752,131)
(4,534,336)
586,752
(1,740,087)
(521,266)
(1,951,091)
345,131
(1,720,145)
(458,466)
(1,818,731)
2,908,508
1,909,750
1,192,060
944,064
(131,366)
(1,118,906)
(118,601)
(108,542)
Profit from operations
Finance costs
Net (loss) from associates
4.6
4.7
(201,812)
(1,118,906)
Profit/(loss) before income tax
Income tax expense
1,587,790
5
(711,232)
Net profit/(loss) for the year
876,558
(174,182)
(108,542)
1,627,026
(308,988)
1,318,038
(58,212)
716,921
(218,484)
(37,490)
(276,696)
679,431
Other comprehensive income
Exchange differences on translation of
foreign operations
21
Other comprehensive income for the year
Total comprehensive income for the year
Earnings per share (cents)
193,640
(182,737)
-
-
193,640
(182,737)
-
-
1,070,198
1,135,301
(276,696)
679,431
24.64
37.04
(7.78)
19.10
6
The accompanying notes form an integral part of the Consolidated Statement of Comprehensive Income.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
8
9
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2011
4
Group
Notes
holding Company
2011
$
2010
$
2011
$
2010
$
564,779
2,169,756
42,296
343,355
253,189
1,524,031
22,263
428,020
281,522
1,024,349
2,687
57,782
967
1,043,491
3,092
77,124
3,120,186
2,227,503
1,366,340
1,124,674
2,668,213
1,676,819
5,107,982
2,128,467
1,462,431
4,473,309
1,994,707
2,014,576
539,819
2,653,124
1,994,707
2,128,467
325,431
2,625,412
9,453,014
8,064,207
7,202,226
7,074,017
12,573,200
10,291,710
8,568,566
8,198,691
916,303
523,032
749,142
125,577
2,314,054
762,840
550,110
420,979
108,141
1,842,070
407,382
326,955
129,161
86,997
950,495
419,283
399,225
109,999
82,331
1,010,838
2,354,285
297,760
2,652,045
1,298,691
293,826
1,592,517
2,149,328
289,260
2,438,588
1,124,721
286,733
1,411,454
TOTAL LIABILITIES
4,966,099
3,434,587
3,389,083
2,422,292
NET ASSETS
7,607,101
6,857,123
5,179,483
5,776,399
3,558,000
(22,361)
3,558,000
(216,001)
3,558,000
61,500
3,558,000
61,500
4,071,462
3,515,124
1,559,983
2,156,899
7,607,101
6,857,123
5,179,483
5,776,399
CURRENT ASSETS
Cash and cash equivalents
Trade receivables
Inventories
Prepayments and other assets
9
8
10
11
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Investment in subsidiaries
Investment in associates
Intangible assets
Property, plant and equipment
12
13
14
15
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Interest-bearing borrowings
Income tax payable
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Interest-bearing borrowings
Deferred tax liability
TOTAL NON-CURRENT LIABILITIES
SHAREHOLDERS’ EQUITY
Share capital
Reserves
Retained earnings
16
17
18
17
5
19
21
TOTAL ShAREhOLDERS’ EQUITY
The accompanying notes form an integral part of the Consolidated Statement of Financial Position.
Signed for and on behalf of the Board and in accordance with a resolution of the Directors.
Director: ……………………………………………………..
Director: ……………………………………………………..
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
9
10
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
CONSOLIDATED STATEMENT OF CASh FLOWS
FOR ThE YEAR ENDED 31 DECEMBER42011
holding Company
Group
Note
2011
$
2010
$
2011
$
2010
$
OPERATING ACTIVITIES
Receipts from customers
11,138,399
9,372,711
5,448,714
4,791,729
Payments to suppliers and employees
(7,642,153)
(7,070,531)
(3,707,212)
(3,380,049)
Interest and bank charges paid
(201,812)
(174,182)
(131,366)
(118,601)
Income tax paid
(379,135)
(438,072)
(196,795)
(229,949)
Net cash
Activities
provided
by
Operating 20(a)
2,915,299
1,689,926
1,413,341
1,063,130
Proceeds from sale of plant and equipment
Acquisition of plant, equipment and intangibles
Advance to associate entities
Acquisition of shares in associate entities
Dividends received
38,627
(1,645,666)
(1,255,015)
(653,637)
250,000
34,737
(1,298,653)
75,000
3,478
(763,366)
(1,255,015)
250,000
(619,498)
75,000
Net cash flows used in Investing Activities
(3,265,691)
(1,188,916)
(1,764,903)
(544,498)
Dividends paid to equity holders of the parent
Proceeds from borrowings
Repayment of secured loan principal
Repayment of lease principal
(320,220)
1,230,000
(162,258)
(61,192)
(284,640)
(130,667)
(20,254)
(320,220)
1,230,000
(208,390)
-
(284,640)
(348,760)
-
Net cash flows used in Financing Activities
686,330
(435,561)
701,390
(633,400)
Net increase/(decrease) in cash held
335,938
65,449
349,828
(114,768)
Cash at beginning of year
183,916
120,526
(68,306)
46,462
-
-
INVESTING ACTIVITIES
FINANCING ACTIVITIES
Effects of exchange rate changes on opening cash
44,925
balances
Cash/(overdraft) at end of year
20(b)
564,779
(2,059)
183,916
The accompanying notes form an integral part of the Consolidated Statement of Cash Flows.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
10
11
281,522
(68,306)
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
CONSOLIDATED STATEMENT OF ChANGES IN EQUITY
FOR ThE YEAR ENDED 31 DECEMBER42011
Group
Notes
holding Company
2011
$
2010
$
2011
$
2010
$
3,515,124
876,558
(320,220)
4,071,462
2,481,726
1,318,038
(284,640)
3,515,124
2,156,899
(276,696)
(320,220)
1,559,983
1,762,108
679,431
(284,640)
2,156,899
(216,001)
(33,264)
61,500
61,500
193,640
(22,361)
(182,737)
(216,001)
61,500
61,500
Retained earnings
Balance at the beginning of the year
Operating profit/(loss) after tax
Dividends paid/proposed
Balance at the end of the year
7
Reserves
Balance at the beginning of the year
Movement arising on translation of the
financial statements of foreign subsidiary
Balance at the end of the year
21
Share capital
Balance at the beginning
g
y of the year
Balance at the end of the year
19
TOTAL EQUITY
3,558,000
3,558,000
3,558,000
3,558,000
3,558,000
3,558,000
3,558,000
3,558,000
7,607,101
6,857,123
5,179,483
5,776,399
The accompanying notes form an integral part of the consolidated Statement of Changes in Equity.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
11
12
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS
FOR ThE YEAR ENDED 31 DECEMBER4 2011
1.
Corporate information
The consolidated financial statements of Communications (Fiji) Limited and its subsidiary company ("the Group") for the year
ended 31 December 2011 were authorised for issue with a resolution of the directors on 20 March 2012 . Communications (Fiji)
Limited is a limited liability company incorporated and domiciled in Fiji whose shares are publicly traded on the South Pacific
Stock Exchange.
2.1 Basis of preparation
The consolidated financial statements have been prepared on a historical cost basis. The consolidated financial statements are
presented in Fiji dollars and all values are rounded to the nearest dollar except when otherwise indicated.
Statement of compliance
The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting
Standards (IFRS).
Basis of consolidation
The consolidated financial statements comprise the financial statements of Communications (Fiji) Limited ("the company") and
its subsidiary company as at 31 December each year.
The subsidiary company is fully consolidated from the date of acquisition, being the date on which the group obtains control,
and continue to be consolidated until the date that such control ceases.
The financial statements of the subsidiary is prepared for the same reporting period as the parent company, using consistent
accounting policies.
All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are
eliminated in full.
Minority interests represent the portion of profit or loss and net assets not held by the group and are presented separately in
the statement of comprehensive income and within equity in the consolidated statement of financial position, separately from
parent shareholders' equity. Acquisitions of minority interests are accounted for using the parent entity extension method,
whereby, the difference between the consideration and the book value of the share of the net assets acquired is recognized in
goodwill.
On consolidation, subsidiary company; PNG FM's assets and liabilities has been translated at the rate of exchange ruling at
balance date. Revenue and expense accounts have been translated using the average of the exchange rates ruling at the end
of each month during the current financial year. The rate used to translate the assets and liabilities of PNG FM was 1.5299:1
(2010: 1.8024:1) while the average rate used to translate revenue and expense accounts was 1.3288:1 (2010: 1.4128:1).
2.2. Significant accounting judgments, estimates and assumptions
The preparation of the group's financial statements requires management to make judgments, estimates and assumptions that
affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the
reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a
material adjustment to the carrying amount of the asset or liability affected in the future.
Estimates and assumptions
Key assumptions concerning the future and other key sources of estimation uncertainty at balance date, that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below.
Deferred Tax Assets
Deferred income tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will be
available against which the losses can be utilised. Significant management judgment is required to determine the amount of
deferred income tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with
future tax planning strategies.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
12
13
Deferred Tax Assets
Deferred income tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will be
available against which the losses can be utilised. Significant management judgment is required to determine the amount of
deferred income tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with
future tax planning strategies.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
2.3 Changes in accounting policy and disclosures
2.2.
12
New and amended standards and interpretations
The accounting policies adopted are consistent with those of the previous financial year, except for the following new and
amended IFRS and IFRIC interpretations effective as of 1 January 2011:
- IAS 24 Related Party Disclosures (amendment) effective 1 January 2011
- IAS 31 Financial Instruments: Presentation (amendment) effective 1 February 2010
- Improvements to IFRSs (May 2010)
The adoption of the standards or interpretations is described below:
IAS 24 Related Party Disclosures (Amendment)
The IASB issued an amendment to IAS 24 that clarifies the definitions of a related party. The new definitions emphasise a
symmetrical view of related party relationships and clarifies the circumstances in which persons and key management
personnel affect related party relationships of an entity. In addition, the amendment introduces an exemption from the general
related party disclosure requirements for transactions with government and entities that are controlled, jointly controlled or
significantly influenced by the same government as the reporting entity. The adoption of the amendment did not have any
impact on the financial position or performance of the Group.
IAS 31 Financial Instruments: Presentation (Amendment)
The IASB issued an amendment that alters the definition of a financial liability in IAS 32 to enable entities to classify rights
issues and certain options or warrants as equity instruments. The amendment is applicable if the rights are given pro rata to all
of the existing owners of the same class of an entity's non-derivative equity instruments, to acquire a fixed number of the
entity's own equity instruments for a fixed amount in any currency. The amendment has had no effect on the financial position
performance of the Group
or p
p because the Group
p does not have these type
yp of instruments.
Improvements to IFRSs
In May 2010, the IASB issued its third omnibus of amendments to its standards, primarily with a view to removing
inconsistencies and clarifying wording. There are separate transitional provisions for each standard. The adoption of the
following amendments resulted in changes to accounting policies, but no impact on the financial position or performance of the
Group.
IFRS 7 Financial Instruments - Disclosures: The amendment was intended to simplify the disclosures provided by reducing the
volume of disclosures around collateral held and improving disclosures by requiring qualitative information to put the
quantitative information in context. The Group reflects the revised disclosure in Note 26.
IAS 1 Presentation of Financial Statements: The amendment clarifies that an entity may present an analysis of each
component of other comprehensive income maybe either in the statement of changes in equity or in the notes to the financial
statements.
Other amendments resulting from Improvements to IFRSs to the following standards did not have any impact on the
accounting policies, financial position or performance of the Group:
IFRS 3 Business Combinations (Contingent consideration arising from business combination prior to the adoption of IFRS 3
(as revised in 2008)).
IFRS 3 Business Combinations (Un-replaced and voluntarily replaced share-based payment awards).
IAS 27 Consolidated and Separate Financial Statements
IAS 34 Interim Financial Statements
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
14
13
IAS 27 Consolidated and Separate Financial Statements
IAS 34 Interim Financial Statements
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
2.4 Summary of significant accounting policies
Intangible assets
13
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a
business combination is fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at
cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets,
excluding capitalised development costs, are not capitalised and expenditure is reflected in the statement of comprehensive
income in the year in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an
indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible
asset with a finite useful life is reviewed at least at each financial year end. Changes in the expected useful life or the expected
pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period
or method, as appropriate, and are treated as a change in accounting estimate. The amortisation expense on intangible assets
with finite lives is recognized in the statement of comprehensive income in the expense category consistent with the function of
intangible asset.
Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash generating unit
level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewed annually to
determine whether indefinite life assessment continues to be supportable. If not, the change is the useful life assessment from
indefinite to finite is made on a prospective basis.
Gains or losses arising from derecognizing of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognized in the statement of comprehensive income when the asset
is derecognized.
Investments in an associate
The group's investment in its associates is accounted for using the equity method of accounting. An associate is an entity in
which the group has significant influence and which is neither a subsidiary nor a joint venture.
Under the equity method, the investment in the associate is carried in the statement of financial position at cost plus post
acquisition changes in the group's share of net assets of the associate. Goodwill relating to the associate is included in the
carrying amount of the investment and is not amortized. The statement of comprehensive income reflects the share of the
results of operations of the associate. Where there has been a change recognized directly in the equity of the associate, the
group recognizes its share of any changes and discloses this, when applicable, in the statement of changes in equity. Profits
and losses resulting from transactions between the group and the associate are eliminated to the extent of the interest in the
associate.
The financial statements of the associate are prepared for the same reporting period as the parent company. Where
necessary, adjustments are made to bring the accounting policies in line with those of the Group. If company's ownership in an
associate is reduced, but the investment continues to be an associate, the company shall reclassify to profit or loss only a
proportionate amount of the gain or loss previously recognised in other comprehensive income.
Impairment of non-financial assets
The group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required, the group estimates the asset's recoverable amount. An
asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value in use
and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets or other groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset
is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is
used. these calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other
available fair value indicators.
Impairment losses of continuing operations are recognized in profit or loss in those expense categories consistent with the
function of the impaired assets, except for property previously revalued where the revaluation was taken to equity. In this case,
the impairment is also recognized in equity up to the amount of any previous revaluation.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
15
14
value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is
used. these calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other
available fair value indicators.
Impairment losses of continuing operations are recognized in profit or loss in those expense categories consistent with the
function of the impaired assets, except for property previously revalued where the revaluation was taken to equity. In this case,
the impairment is also recognized in equity up to the amount of any previous revaluation.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
2.4
2.3 Summary of significant accounting policies continued
Impairment of non-financial assets continued
14
For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that
previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Group
makes an estimate of recoverable amount. A previously recognized impairment loss is reversed only if there has been a
change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognized. If
that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot
exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for
the asset in prior years. Such reversal is recognized in the statement of comprehensive income unless the asset is carried at
revalued amount, in which case the reversal is treated as a revaluation increase.
The following criteria are also applied in assessing impairment of specific assets:
Goodwill
The group assesses whether there are any indication that goodwill is impaired at each reporting date. Goodwill is tested for
impairment annually and when circumstances indicate that the carrying may be impaired.
Impairment is determined for goodwill by assessing the recoverable amount of the cash-generating units, to which the goodwill
relates. Where the recoverable amount of the cash-generating unit is less than their carrying amount an impairment loss is
recognized. Impairment losses relating to goodwill cannot be reversed in future periods. The group performs its annual
impairment test of goodwill as at 31 December.
Intangible assets
Intangible assets with indefinite useful lives are tested for impairment annually as at 31 December either individually or at the
cash generating unit level, as appropriate.
Associates
After application of the equity method, the group determines whether it is necessary to recognize an additional impairment loss
of the group's investment in its associates. The group determines at each balance date whether there is any objective evidence
that the investment in associate and the acquisition cost and recognizes the amount in the statement of comprehensive
income.
Investments and other financial assets
Financial assets within the scope of IAS 39 are classified as financial assets at fair value through profit or loss, loans and
receivables, held to maturity investments or available-for-sale financial assets, as appropriate. When financial assets are
recognized initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss,
directly attributable transactions costs.
The group determines the classification of its financial assets on initial recognition and, where allowed and appropriate, reevaluates this designation at each financial year end.
All regular way purchases and sales of financial assets are recognized on the trade date, which is the date that the group
commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery
of assets within the period generally established 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. After initial measurement loans and receivables are carried at amortized cost using the effective interest method less
any allowance for impairment. Gains and losses are recognized in the statement of comprehensive income when the loans and
receivables are derecognized or impaired, as well as through the amortization process.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
16
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. After initial measurement loans and receivables are carried at amortized cost using the effective interest method less
any allowance for impairment. Gains and losses are recognized in the statement of comprehensive income when the loans and
receivables are derecognized or impaired, as well as through the amortization process.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
2.3 Summary of significant accounting policies continued
2.4
Investments and other financial assets continued
15
Fair value
The fair value of investments that are actively traded in organized financial markets is determined by reference to quoted
market bid prices at the close of business at balance date. For investments where there is no active market, fair value is
determined using valuation techniques. Such techniques include using recent arm's length market transaction; reference to the
current market value of another instrument which is substantially the same; discounted cash flow analysis or other valuation
models.
Amortized cost
Loans and receivables are measured at amortized cost. This is computed using the effective interest method less any
allowance for impairment. The calculation takes into account any premium or discount on acquisition and includes transaction
costs and fees that are an integral part of the effective interest rate.
Impairment of financial assets
The Group assess at each balance date whether a financial asset or group of financial assets is impaired.
Assets carried at amortized cost
If there is an objective evidence that an impairment loss on assets carried at amortised cost has been incurred, the amount of
the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash
flows (excluding future expected credit losses that have not been incurred) discounted at the financial asset's original effective
interest rate (i.e.. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced
through use of an allowance account. The amount of the loss shall be recognized in statement of comprehensive income.
If, in a subsequent
period, the amount of the impairment
loss decreases and the decrease can be related objectively
q
p
p
j
y to an
event occurring after the impairment was recognized, the previously recognized impairment loss is reversed, to the extent that
the carrying value of the asset does not exceed its amortised cost at the reversal date. Any subsequent reversal of an
impairment loss is recognized in the statement of comprehensive income.
In relation to trade receivables, a provision for impairment is made when there is objective evidence (such as the probability of
insolvency or significant financial difficulties of the debtor) that the Group will not be able to collect all of the amounts due under
the original terms of the invoice. The carrying amount of the receivable is reduced through use of an allowance account.
Impaired debts are derecognized when they are assessed as uncollectible.
Inventories
Inventories are valued at the lower of cost and net realisable value. Costs includes invoice plus associated costs incurred in
bringing each product to its present location and condition.
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.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand. 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.
Trade and other receivables
Trade receivables are recognised at original invoice amount (inclusive of VAT) less any provision for uncollectible debts. Bad
debts are written off during the year in which they become known. A specific provision is raised for any doubtful debts.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
2.3 Summary of significant accounting policies continued
17
cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.
Trade and other receivables
Trade receivables are recognised at original invoice amount (inclusive of VAT) less any provision for uncollectible debts. Bad
debts are written off during the year in which they become known. A specific provision is raised for any doubtful debts.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
2.4
2.3 Summary of significant accounting policies continued
Trade and other payables
Liabilities for trade payables and other amounts are carried at cost (inclusive of VAT where applicable) which is the fair value of
16
the consideration to be paid in the future for goods and services received whether or not billed to the entity.
Financial liabilities
Interest bearing loans and borrowings
All loans and borrowings are initially recognized at fair value less directly attributable transaction costs, and have not been
designated "as at fair value through profit or loss". After initial recognition, interest bearing loans and borrowings are
subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the
comprehensive income when the liabilities are derecognised as well as through the amortisation process.
Borrowing costs
Borrowing costs are recognised as an expense when incurred.
Property, plant and equipment
Property, plant and equipment are stated at deemed cost less accumulated depreciation and any impairment in value. The
principal depreciation rates in use are:
Furniture and fittings
Equipment
Motor vehicles
12%
10% - 30%
18%
Profit and loss on disposal of property, plant and equipment are taken into account in determining profit or loss for the year.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the
estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount.
The recoverable amount of property, plant and equipment is greater of net selling price and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely
independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.
Impairment losses are recognised in the comprehensive income.
Leases
Finance leases, which transfer to the group substantially all the risks and benefits incidental to the ownership of the leased
item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the
minimum lease payments.
Capitalised leased assets are depreciated over the period the benefit is expected to be realised from their use.
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating
leases. Operating lease payments are recognised as an expense in the statement of comprehensive income on a straight line
basis over the lease term.
Revenue
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:
Rendering of services
Radio revenue is recognised when commercials are played or service is delivered. Proceeds from advance deposits is not
recognised as revenue until the subsequent playing of commercials of delivery of service is performed.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
18
2.3 Summary of significant accounting policies continued
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:
Rendering of services
Radio revenue is recognised when commercials are played or service is delivered. Proceeds from advance deposits is not
recognised as revenue until the subsequent playing of commercials of delivery of service is performed.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
2.3 Summary of significant accounting policies continued
2.4
Revenue continued
Dividends
Revenue is recognised when the shareholders' right to
17receive the payment is established.
Rental income
Rental income is accounted for on a straight line basis over the lease term on ongoing leases.
Employee benefits
Annual leave
Provision is made for annual leave to be payable to employees on the basis of statutory requirement on employment contract.
Long service leave
The liability for employees’ entitlements to long service leave represents the amount payable to employees, based on current
wage and salary rates, for services provided up to balance date. The liability for long service leave increases according to the
number of years of service completed by the employee.
Foreign currencies
The consolidated financial statements are presented in Fiji dollars, which is the holding company's functional and presentation
currency. Each entity in the group determines its own functional currency and items included in the financial statements of each
entity are measured using that functional currency. Transactions in foreign currencies are initially recorded at the functional
currency rate ruling at the date of transaction. Monetary assets and liabilities denominated in foreign currencies are
retranslated at the functional currency rate of exchange ruling at balance date. All differences are taken to profit or loss with the
exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity.
These are taken directly to equity until the disposal of the net investment, at which time they are recognised in comprehensive
income. Tax charges and credits attributable to exchange differences on those borrowings are also dealt with in equity.
Non monetaryy items that are measured in terms of historical cost in a foreign
g currencyy are translated using
g the exchange
g rates
as at the dates of the initial transactions. Non monetary items measured at fair value in a foreign currency are translated using
the exchange rates at the date when fair value is determined.
The assets and liabilities of foreign operations are translated into Fiji dollars at the rate of exchange ruling at balance date and
its income statement is translated at the weighted average exchange rate for the year. The exchange difference arising on
translation are taken directly to a separate component of equity. On disposal of the foreign entity, the deferred cumulative
amount recognised in equity relating to that particular foreign operation is recognised in the statement of comprehensive
income.
Business combinations and Goodwill
Business combinations are accounted for using the purchase method.
Goodwill is initially measured at cost being the excess of the cost of the business combination over the Group's share in the net
fair value of the acquiree's identifiable assets, liabilities and contingent liabilities.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment
testing, goodwill acquired in a business combination is, from the acquisition date, allocated to the cash generating unit that is
expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are
assigned to that unit.
Where goodwill forms part of a cash generating unit and part of the operation within that unit is disposed of, the goodwill
associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss
on disposal of the operation.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
19
2.3 Summary of significant accounting policies continued
expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are
assigned to that unit.
Where goodwill forms part of a cash generating unit and part of the operation within that unit is disposed of, the goodwill
associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss
on disposal of the operation.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
2.4
2.3 Summary of significant accounting policies continued
Taxes
Current Income Tax
Current income 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 compute the amount are those that are
18
enacted or substantively enacted at balance date.
Current income tax relating to items recognised directly in equity is recognised in equity and not in comprehensive income.
Deferred tax
Deferred income tax is provided using the liability method on temporary differences at 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:
- except where the deferred income tax liability arises from goodwill amortisation or the initial recognition of an asset or
liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
- in respect of taxable temporary differences associated with investments in subsidiaries, associates and interest in joint
ventures, except where 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 credits 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:
- where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition
of an asset or liability in a transaction that it is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; and
- in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in
joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences
will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can
be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance 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 tax asset to be utilised.
Unrecognised deferred 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.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
balance date. Deferred tax relating to items recognised directly in equity is recognised in equity and not in profit or loss.
Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes related to the same taxable entity and the same taxation
authority.
Sales Tax
Revenue, expenses and assets are recognised net of the amount of sales tax except:
- where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in
which case the sales tax recognised as part of the acquisition of the asset or as part of the expense item as applicable;
and
- receivables and payables are stated with the amount of sales tax included.
The net amount of sales taxes recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the statement of financial position.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
20
2.3 Summary of significant accounting policies continued
Provisions
which case the sales tax recognised as part of the acquisition of the asset or as part of the expense item as applicable;
and
- receivables and payables are stated with the amount of sales tax included.
The net amount of sales taxes recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the statement of financial position.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
2.3 Summary of significant accounting policies continued
2.4
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed,
for example under an insurance contract, the reimbursement
is recognised as a separate asset but only when the
19
reimbursement is virtually certain. The expense relating to any provision is presented in profit or loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where
appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of
time is recognised as a finance cost.
Comparatives
Where necessary, amounts relating to prior year have been reclassified to conform with presentation in the current year.
3.
SEGMENT INFORMATION
The company and its subsidiary operate predominantly in the commercial radio services industry. The holding company
operates in Suva, Fiji while its subsidiary operates in Port Moresby, Papua New Guinea.
(a) Geographical Segments
The following tables present revenue and profit information and certain asset and liability information regarding
geographical segments for the years ended 31 December 2011 and 2010.
Year ended 31 December 2011
Revenue
External sales
PNG
$
Fiji
$
Eliminations
$
6,506,767
4,817,752
-
11,324,519
6,506,767
4,817,752
-
11,324,519
1,716,448
1,716,448
,
,
1,192,060
1,192,060
,
,
-
2,908,508
2,908,508
,
,
(70,446)
-
(131,366)
(1,118,906)
-
(201,812)
(1,118,906)
Profit before income tax
Income tax expense
Net profit
1,646,002
(492,748)
1,153,254
(58,212)
(218,484)
(276,696)
-
1,587,790
(711,232)
876,558
Assets and liabilities
Segment assets
Investment in associates
Total assets
4,291,730
653,637
4,945,367
6,553,990
2,014,576
8,568,566
(940,733)
(940,733)
9,904,987
2,668,213
12,573,200
Segment liabilities
1,868,518
3,389,083
(291,502)
4,966,099
Total liabilities
1,868,518
3,389,083
(291,502)
4,966,099
971,095
347,985
7,372
488,733
60,245
461,021
12,149
Results
Segment result
Unallocated expenses
Profit from operating
p
g activities
Finance costs
Net loss from associates
Other segment information
Capital expenditure:
tangible fixed assets
intangible assets
Amortisation of intangible assets
Depreciation
Doubtful and bad debts
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
21
3.
Total
$
SEGMENT INFORMATION continued
-
1,459,828
60,245
809,006
19,521
tangible fixed assets
intangible assets
Amortisation of intangible assets
Depreciation
Doubtful and bad debts
971,095
347,985
7,372
488,733
60,245
461,021
12,149
-
1,459,828
60,245
809,006
19,521
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
3.
SEGMENT INFORMATION continued
The company and its subsidiary operate predominantly in the commercial radio services industry. The holding company
operates in Suva, Fiji while its subsidiary operates in Port Moresby, Papua New Guinea.
Year ended 31 December 2010
Revenue
External Sales
20
PNG
$
Fiji
$
Eliminations
$
Total
$
4,689,761
4,689,761
4,596,275
4,596,275
-
9,286,036
9,286,036
Result
Segment result
Unallocated expenses
Profit from operating activities
965,686
965,686
944,064
944,064
-
1,909,750
1,909,750
Finance costs
Net gain from associates
(55,581)
-
(118,601)
(108,542)
-
(174,182)
(108,542)
Profit before income tax
Income tax expense
Net profit
910,105
(271,498)
638,607
716,921
(37,490)
679,431
-
1,627,026
(308,988)
1,318,038
Assets and liabilities
Segment assets
Investment in associates
Total assets
2,993,032
2,993,032
6,070,224
2,128,467
8,198,691
(900,013)
(900,013)
8,163,243
2,128,467
10,291,710
Segment liabilities
Total liabilities
1,231,584
1,231,584
2,422,292
2,422,292
(219,289)
(219,289)
3,434,587
3,434,587
685,551
293,665
10,851
585,071
34,427
49,745
408,721
-
Other segment information
Capital expenditure:
tangible fixed assets
intangible assets
Amortisation of intangible assets
Depreciation
Doubtful and bad debts
-
1,270,622
34,427
49,745
702,386
10,851
(b) Business Segments
The company and its subsidiary both operate predominantly in the commercial radio services industry. Revenue,
expenditure and certain asset information regarding business segments for the years ended 31 December 2011 and 2010
are the same as that disclosed for geographical segments above.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
22
4.
REVENUE AND EXPENSES
Group
holding Company
2011
2010
2011
2010
$
$
$
$
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
Group
4.
REVENUE AND EXPENSES
holding Company
2011
2010
2011
2010
$
$
$
$
Revenue, expenses and finance costs for the year include the following:
4.1 Radio income
Advertising income
TEC income and other commercial income
21
4.2 Other revenue
Other income
Gain on disposal of assets
Cinema advertising
Recovered expenses
4.3 Salaries and employee benefits
Superannuation and TPAF levy
Salaries and wages
Staff commission and bonus
Staff training
4.4 Depreciation and amortisation
Depreciation
Amortisation of intangibles
4.5 Other expenses
Auditors remuneration
Bad debts
Directors emoluments
Directors’ fees
Doubtful and bad debts
Operating lease rentals
Provision for annual and long service leave
Other operating expenses
4.6 Finance costs
Finance charges payable under finance leases
Bank loans and overdrafts
4.7 Net loss/(gain) from associates
Share of profit from 231 Waimanu Rd Holdings
Share of loss from i-Pac Communications Fiji Ltd
Dilution loss on i-Pac Communications (Fiji) Ltd
9,410,465
1,914,054
11,324,519
7,562,740
1,723,296
9,286,036
4,081,065
736,687
4,817,752
3,950,006
646,269
4,596,275
152,141
20,034
366,485
5,400
544,060
137,251
38,669
210,085
386,005
146,099
3,478
366,485
70,690
586,752
121,246
210,085
13,800
345,131
258,220
1,973,916
481,037
60,084
2,773,257
224,044
1,855,304
322,243
74,233
2,475,824
135,241
1,406,819
179,821
18,206
1,740,087
128,707
1,402,836
149,093
39,509
1,720,145
809,006
60,245
869,251
702,386
49,745
752,131
461,021
60,245
521,266
408,721
49,745
458,466
35,076
9,395
33,773
9,226
9,000
-
9,000
-
185,000
37,526
19,521
505,553
18,792
4,506,700
5,317,563
131,411
27,078
10,851
554,466
19,058
3,748,473
4,534,336
92,500
30,000
12,149
195,437
4,666
1,607,339
1,951,091
86,411
20,000
227,348
5,772
1,470,200
1,818,731
70,446
131,366
201,812
55,581
118,601
174,182
131,366
131,366
118,601
118,601
(184,713)
309,605
994,014
1,118,906
(117,530)
226,072
108,542
(184,713)
309,605
994,014
1,118,906
(117,530)
226,072
108,542
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
23
Group
2011
holding Company
2010
2011
2010
4.7 Net loss/(gain) from associates
Share of profit from 231 Waimanu Rd Holdings
Share of loss from i-Pac Communications Fiji Ltd
Dilution loss on i-Pac Communications (Fiji) Ltd
(184,713)
309,605
994,014
1,118,906
(117,530)
226,072
108,542
(184,713)
309,605
994,014
1,118,906
(117,530)
226,072
108,542
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
Group
5.
2011
$
INCOME TAX
holding Company
2010
$
2011
$
2010
$
The major components of income tax expense for the years ended 31 December 2011 and 2010 are:
A reconciliation between tax expense and the product of accounting profit multiplied by Fiji's domestic tax rate for the years
ended 31 December 2011 and 2010 is as follows:
Accounting profit before income tax
22
1,587,790
1,627,026
(58,212)
716,921
Prima facie tax thereon at the Fiji rate of 20%
Tax rates differential on overseas income
Non deductible expenses
Net loss from associates not deductible
Effect of change in tax rate from 29% to 20%
(Over)/under provision from prior year
317,558
164,600
23,020
223,781
(17,727)
325,405
87,624
24,873
21,708
(136,733)
(13,889)
(11,642)
23,020
223,781
(16,675)
143,384
24,873
21,708
(136,733)
(15,742)
INCOME TAX attributable to operating profit
711,232
308,988
218,484
37,490
Current income tax charge
505,178
437,902
235,159
168,257
Adjustments in respect of previous year
(17,727)
(13,889)
(16,675)
(15,742)
223,781
711,232
(115,025)
308,988
218,484
(115,025)
37,490
b)
Consolidated income statement
Current income tax:
Deferred income tax:
Origination and reversal of temporary differences
Income tax expense
c)
Deferred income tax
Deferred income tax assets/liability at 31 December relates to the following:
Provision for doubtful debts
Provision for employee entitlements
Accelerated depreciation for tax purposes and
other
Future liability on revaluation
36 290
36,290
52,509
26 508
26,508
38,805
9 170
9,170
13,929
6 735
6,735
12,995
(386,559)
-
(318,682)
(40,457)
(312,359)
-
(266,006)
(40,457)
Net deferred tax liability
(297,760)
(293,826)
(289,260)
(286,733)
(297,760)
(293,826)
(289,260)
(286,733)
(297,760)
(293,826)
(289,260)
(286,733)
Represented on the consolidated balance sheet as:
Deferred income tax asset
Deferred income tax liability
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
24
Group
2011
holding Company
2010
2011
2010
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
holding Company
Group
6.
2011
$
EARNINGS PER ShARE
Operating profit/(loss) after income tax
Weighted average number of shares outstanding
Basic earnings per share (cents)
(i)
(i)
2010
$
2011
$
2010
$
876,558
1,318,038
(276,696)
679,431
3,558,000
24.64
3,558,000
37.04
3,558,000
(7.78)
3,558,000
19.10
23
Basic earnings per share is calculated by dividing the net profit for the year attributable to ordinary shareholders by the
weighted average number of shares outstanding during the year.
There are no convertible redeemable preference shares for the group. There have been no transaction involving ordinary
shares or potential ordinary shares between the reporting date and the date of completion of these financial statements.
7.
8.
DIVIDENDS PAID AND PROPOSED
$
$
$
$
Declared and paid in year:
Final dividend for 2010: 4 cents (2009: 4 cents)
Interim dividend for 2011: 5 cents (2010: 4 cents)
Dividends declared and paid
142,320
177,900
320,220
142,320
142,320
284,640
142,320
177,900
320,220
142,320
142,320
284,640
Declared but not paid:
Final dividend for 2011: 5 cents (2010: 4 cents)
177,900
142,320
177,900
142,320
TRADE RECEIVABLES
$
$
$
$
Trade receivables
Receivable from subsidiary
2,169,756
-
1,524,031
-
941,321
83,028
1,001,183
42,308
2,169,756
1,524,031
1,024,349
1,043,491
Trade receivables are non-interest bearing and are generally on 30-90 day terms. At 31 December 2011, trade receivables of
$72 970 (2010: $53,449)
$53 449) were impaired and fully provided for.
for Movements in the provision for
the group at nominal value of $72,970
impairment of receivables were as follows:
53,449
19,496
72,945
At 1 January
Charge for the year
Utilised
At 31 December
42,598
14,159
(3,308)
53,449
33,676
12,124
45,800
33,676
33,676
At 31 December, the ageing analysis of trade receivables for the group is as follows:
Past due but not impaired
2011
2010
Total
2,169,756
1,524,031
< 30days
1,200,034
1,207,858
30 - 60 days
642,776
247,212
60 - 90 days
211,021
62,871
>90 days
115,925
6,090
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
25
9.
Group
CASh AND ShORT TERM DEPOSITS
2011
holding Company
2010
2011
2010
2010
1,524,031
1,207,858
247,212
62,871
6,090
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
9.
Group
CASh AND ShORT TERM DEPOSITS
2011
$
Cash at bank
Cash on hand
holding Company
2010
$
564,729
50
564,779
2011
$
253,189
253,189
2010
$
281,472
50
281,522
967
967
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying
24
periods of between one day and three months, depending on the immediate requirements of the group, and earn interest at the
respective short-term deposit rates.
At 31 December 2011, the group had available $250,000 (2010: $280,727) of undrawn committed borrowing facilities in respect
of which all conditions precedent had been met.
10. INVENTORIES
$
TEC merchandise
$
42,296
$
22,263
$
2,687
3,092
The amount of write-down of inventories recognised as an expense was $Nil (2010: $Nil).
11. PREPAYMENTS AND OThER ASSETS
$
$
$
$
83,344
141,162
118,849
66,000
252,652
109,368
29,874
37,572
(9,664)
19,706
43,935
13,483
343,355
428,020
57,782
77,124
$
$
Current
Refundable deposits
Prepayments
Other receivables
12. INVESTMENT IN SUBSIDIARIES
Shares in subsidiary companies:
Total Event Company Limited
PNG FM Pty Ltd
-
$
-
2
1,994,705
1,994,707
$
2
1,994,705
1,994,707
Communications (Fiji) Limited holds 100% of the ordinary shares of PNG FM Pty Limited. The results of PNG FM Pty Limited
have been consolidated in these financial statements. The results of TEC Limited is included in the results of the holding
company.
13. INVESTMENT IN ASSOCIATES
The Group has a 34.6% (2010: 34.6%) shareholding in i-Pac Communications Fiji Limited and 50% interest in 231 Waimanu
Rd Holdings Limited. Post balance date the groups shareholding in i-Pac Communications Limited has diluted to 12.5%. The
subsidiary of Communications (Fiji) Limited, PNG FM Limited has a 33.3% shareholding in Paradise Cinemas (PNG) Limited.
The reporting date of the financial statements for all associates is 31 December.
231 Waimanu Rd Holdings Ltd and i-Pac Communications Fiji Limited are not listed on any public exchange. The following
table illustrates summarised information of the group's investment in the companies.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
26
13. INVESTMENT IN ASSOCIATES continued
2011
2010
The reporting date of the financial statements for all associates is 31 December.
231 Waimanu Rd Holdings Ltd and i-Pac Communications Fiji Limited are not listed on any public exchange. The following
table illustrates summarised information of the group's investment in the companies.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
13. INVESTMENT IN ASSOCIATES continued
2011
$
2010
$
224,586
2,792,137
(843,322)
(158,825)
2,014,576
334,583
2,891,343
(860,656)
(236,803)
2,128,467
779,540
(1,118,906)
772,296
(108,542)
(a) Investment of Communications (Fiji) Limited in Associates:
Share of associate's balance sheet:
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
25
Share of associate's revenue and loss:
Revenue
Net (loss)
Carrying amount of investment - 231 Waimanu Rd Holdings Limited
Carrying amount of investment - i-Pac Communications Fiji Limited
Carrying amount of investment in associates
1,422,692
591,884
2,014,576
1,487,979
640,488
2,128,467
(b) Investment of PNG FM Limited in an associate entity:
Carrying Amount of investment - Paradise Investments (PNG) Limited
653,637
Total Investment in associates
2,668,213
Group
2,128,467
holding Company
2011
$
2010
$
1,507,569
1,507,569
517,590
274,633
2,299,792
517,590
2,025,159
517,590
274,633
792,223
517,590
517,590
Amortisation
At 31 December
562 728
562,728
60,245
622,973
512 983
512,983
49,745
562,728
192 159
192,159
60,245
252,404
142 414
142,414
49,745
192,159
Net book value:
1,676,819
1,462,431
539,819
325,431
14. INTANGIBLE ASSETS
Goodwill on consolidation and acquisition of
subsidiary
Software costs
Amortisation and impairment:
At 1 January
2011
$
2010
$
-
-
(a) Impairment testing of goodwill and intangibles with indefinite useful lives
Goodwill acquired through business combination with indefinite life has been allocated to the subsidiary acquired which is
an individual cash generating unit, which is also a reportable segment, for impairment testing as follows:
Carrying amount of goodwill
2011
$
2010
$
1,137,000
1,137,000
The recoverable amount of the subsidiary has been determined based on a value in use calculation using cash flow
projections from financial budgets approved by senior management covering a five year period. The pre-tax discount rate
applied to cash flow projection is 19% (2010: 19%) and cash flows beyond the 5-year period are extrapolated using a 5%
growth rate (2010: 4.5%) that is the same as the long term average growth rate for the industry in PNG.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
27
14. INTANGIBLE ASSETS continued
Carrying amount of goodwill
1,137,000
1,137,000
The recoverable amount of the subsidiary has been determined based on a value in use calculation using cash flow
projections from financial budgets approved by senior management covering a five year period. The pre-tax discount rate
applied to cash flow projection is 19% (2010: 19%) and cash flows beyond the 5-year period are extrapolated using a 5%
growth rate (2010: 4.5%) that is the same as the long term average growth rate for the industry in PNG.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
14. INTANGIBLE ASSETS continued
(a) Impairment testing of goodwill and intangibles with indefinite useful lives continued
Key assumptions used in value in use calculations
The calculation of value in use are most sensitive to the following assumptions:
-
Discount rates
-
Market share during budget period;
-
Growth rates used to extrapolate cash flows beyond the budget period;
-
Political stability; and
-
Capital expenditure.
26
Discount rates
Discount rates reflect management's estimate of the risks specific to the unit. This is the benchmark used by management
to assess operating performance and to evaluate future investment proposals. In determining the appropriate discount
rate, regard has been given to the yield on a ten-year government bond at the beginning of the budgeted year.
Market share during budget period
These assumptions are important, because, as well as using industry data for growth rates management assess how the
unit's position, relative to its competitors, might change over the budget period. Management expects the Group's share of
the market to be stable over the budget period.
Growth rate estimates
Rates are based on published industry research.
Political stability
Management expect the political environment to be stable over the budget period.
Capital expenditure
There are no significant capital expenditure adjusted in the budgeted period. The capital expenditure used in this
calculation is assumed to be equal to depreciation.
15. PROPERTY, PLANT AND EQUIPMENT
holding company
Cost:
At 1 January 2011
Additions
Disposals
At 31 December 2011
Land &
Buildings
$
476,026
10,000
486,026
Depreciation charge for the year
Disposals
At 31 December 2011
Plant &
Equipment
Total
272,340
9,026,831
$
563,040
206,393
(169,873)
599,560
$
9,793,557
488,733
10,282,290
206,988
18,155
225,143
6,512,318
372,946
6,885,264
448,839
69,920
(169,873)
348,886
7,168,145
461,021
7,629,166
Net written down value:
At 31 December 2011
260,883
2,141,567
250,674
2,653,124
At 1 January 2011
269,038
2,242,173
114,201
2,625,412
Depreciation and impairment:
At 1 January 2011
$
8,754,491
Motor
vehicles
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
28
15. PROPERTY. PLANT AND EQUIPMENT
continued
Land &
Buildings
Plant &
Equipment
Motor
vehicles
Total
Net written down value:
At 31 December 2011
260,883
2,141,567
250,674
2,653,124
At 1 January 2011
269,038
2,242,173
114,201
2,625,412
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
15. PROPERTY. PLANT AND EQUIPMENT
continued
Group
Cost:
At 1 January 2011
Additions
Disposals
At 31 December 2011
Land &
Buildings
Plant &
Equipment
Motor
vehicles
Total
$
$
$
$
476,026
10,000
486,026
11,939,151
1,243,435
(76,212)
13,106,374
814,052
206,393
(227,246)
793,199
13,229,229
1,459,828
(303,458)
14,385,599
206,988
18,155
225,143
7,987,037
729,049
(60,063)
8,656,023
561,895
61,802
(227,246)
396,451
8,755,920
809,006
(287,309)
9,277,617
Net written down value:
At 31 December 2011
260,883
4,450,351
396,748
5,107,982
At 1 January 2011
269,038
3,952,114
252,157
4,473,309
Depreciation and impairment:
At 1 January 2011
Depreciation charge for the year
Disposals
At 31 December 2011
27
The carrying amount of plant and equipment held under finance leases and hire purchase contracts for the group at 31
December 2011 was $136,503 (2010: $125,602). Additions during the year include $91,239 (2010: $79,702) of motor vehicles
acquired under finance leases and hire purchase contracts. Leased assets and assets under hire purchase contracts are
pledged as security for the related finance lease and hire purchase liabilities.
Land and buildings with a carrying amount of $260,883 (2010: $269,038) are subject to a first mortgage charge to secure all of
the group's bank loans (Note17).
Group
16. TRADE AND OThER PAYABLES
Trade payables
Other payables
2011
$
holding Company
2010
$
114,374
801,929
916,303
103,902
658,938
762,840
2011
$
43,128
364,254
407,382
2010
$
56,840
362,443
419,283
Terms and conditions of the above financial liabilities:
-
Trade payables are non-interest bearing and are normally settled on 60-day terms.
-
Other payables are non-interest bearing and have an average term of six months.
-
Interest payable is normally settled monthly throughout the financial year.
-
For terms and conditions relating to related parties, refer to Note 24.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
29
17. INTEREST BEARING BORROWINGS
2011
$
Group
holding Company
2010
$
2011
$
2010
$
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
Group
2011
$
17. INTEREST BEARING BORROWINGS
Current
Bank overdraft
Secured loan
Lease liability
Non-current
Secured loan
Lease liability
Maturity
2011
$
2010
$
Effective
interest rate
%
6.25%
On demand
Note 17 (a)
Note 26
14.00%
Note 22
Note 26
Note 22
holding Company
2010
$
28
Note 17 (a)
14.00%
442,576
80,456
69,273
421,908
58,929
326,955
-
69,273
329,952
-
523,032
550,110
326,955
399,225
2,297,932
56,353
1,250,858
47,833
2,149,328
-
1,124,721
-
2,354,285
1,298,691
2,149,328
1,124,721
Details of interest bearing borrowings are:
a)
Bank overdraft and secured loan are secured as follows:
Holding Company
The bank overdraft facility and loan from Westpac Banking Corporation are secured by a first registered debenture over
the assets of the company. Interest on loan accounts are charged at the rate of 6.25%.
Subsidiary - PNG FM Limited
The bank overdraft facility and bank loan at interest rate of 11.25% are secured by a Stand-by letter of credit issued by
Westpac Banking Corporation Fiji in the amount of K600,000 and a mortgage debenture by PNG FM Limited over the
assets of PNG FM Limited.
Loan from Westpac Bank Limited was obtained for the purpose of relocating the PNG FM office. The loan is repayable in 3
years at interest rate of 11.7% per annum.
b)
Lease liability
Lease liabilities were secured by a Master Lease agreement and a charge over leased assets.
18. PROVISIONS
Provision for dividend
Balance at 1 January
Arising during the year
Utilised
Balance at 31 December
Provision for leave entitlements
Balance at 1 January
Arising during the year
Utilised
Balance at 31 December
Current
Non-current
$
$
$
$
17 354
17,354
17,354
17 354
17,354
17,354
17 354
17,354
17,354
17 354
17,354
17,354
90,787
25,489
(8,053)
108,223
75,217
16,914
(1,344)
90,787
64,977
8,621
(3,955)
69,643
59,205
6,500
(728)
64,977
86,997
86,997
82,331
82,331
125,577
125,577
108,141
108,141
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
30
Group
19. ShARE CAPITAL
2011
holding Company
2010
2011
2010
Current
Non-current
125,577
125,577
108,141
108,141
86,997
86,997
82,331
82,331
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
Group
holding Company
2011
$
2010
$
2011
$
2010
$
Authorised Capital
5,000,000 ordinary shares of $1 each
5,000,000
5,000,000
5,000,000
5,000,000
Issued and Paid up Capital
3,558,000 ordinary shares of $1 each
3,558,000
3,558,000
3,558,000
3,558,000
19. ShARE CAPITAL
20. NOTES TO ThE STATEMENT OF CASh FLOWS
a)
$
$
$
$
Reconciliation of net cash provided by operating activities to Operating Profit after income tax:
29
Profit after income tax
876,558
1,318,038
(276,696)
679,431
521,266
(3,478)
1,118,906
12,174
2,527
4,666
-
458,466
108,542
(135,165)
5,772
-
Adjustment to reconcile /profit before income tax to net cash flows:
Adjustments:
Depreciation and amortisation
(Gain)/loss on sale of property, plant and equipmen
Loss from investment in associates
Movement in provision for doubtful debts
Increase/(Decrease) in deferred tax liability
Movement in provision for employee entitlements
Movement in translation reserve
Working capital adjustments:
(Increase)/decrease in receivables and inventories
Increase/(decrease) in other liabilities and accruals
Increase/(decrease) in income tax payable
Net cash flows provided by Operating Activities
869,251
(20,034)
1,118,906
19,521
3,934
17,436
193,640
752,131
(38,669)
108,542
10,851
(138,099)
15,570
(182,737)
(600,614)
(430,766)
67,435
(151,087)
108,538
328,163
266,050
9,015
(52,621)
19,162
154,465
(57,294)
2,915,299
1,689,926
1,413,341
1,063,130
b) For the purpose of the consolidated cash flow statement, cash and cash equivalents comprise the following at 31
December:
Cash
Bank overdraft
21. RESERVES
Foreign currency translation reserve
At 1 January
Currency translation differences
At 31 December
564,779
564,779
253,189
(69,273)
183,916
281,522
281,522
967
(69,273)
(68,306)
$
$
$
$
(277,501)
193,640
(83,861)
(94,764)
(182,737)
(277,501)
-
-
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
31
Group
21. RESERVES continued
2011
holding Company
2010
2011
2010
At 31 December
(83,861)
(277,501)
-
-
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
Group
21. RESERVES continued
2011
$
holding Company
2010
$
2011
$
2010
$
Share premium reserve
At 1 January
Issue of additional shares - at a premium
At 31 December
Total reserves
61,500
61,500
61,500
61,500
61,500
61,500
61,500
61,500
(22,361)
(216,001)
61,500
61,500
Nature and purpose of reserves
Foreign currency translation reserve
30
Foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
statements of foreign subsidiaries. It is also used to record the effect of hedging net investments in foreign operations.
Share premium reserve
The share premium reserve arises from the issue of shares at a premium.
$
22. EXPENDITURE COMMITMENTS
$
(a) Capital expenditure commitments
-
$
$
-
-
-
(b) Finance lease commitments
Future commitments in respect of finance lease are as follows:
Not later than one year
Later than one year and not later than two years
Later than two years and not later than five years
103,399
93,705
10,067
91,956
26,601
8,318
-
-
Minimum lease payments
Deduct future finance charges
207,171
(70,362)
126,875
(20,113)
-
-
136,809
106,762
-
-
80,456
56,353
58,929
47,833
-
-
136,809
106,762
-
-
Analysed as:
Current
Non-current
(c) Operating lease commitments
Future commitments in respect of operating lease are as follows:
Not later than one year
Later than one year and not later than two years
Later than two years and not later than five years
195,437
195,437
586,311
152,016
152,016
456,048
195,437
195,437
586,311
152,016
152,016
456,048
Minimum lease payments
977,185
760,080
977,185
760,080
The company has lease agreements for their office space. The annual lease rentals are recognised as expense in the
statement of comprehensive income.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
32
Group
23. CONTINGENT LIABILITIES
2011
holding Company
2010
2011
2010
Minimum lease payments
977,185
760,080
977,185
760,080
The company has lease agreements for their office space. The annual lease rentals are recognised as expense in the
statement of comprehensive income.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
Group
23. CONTINGENT LIABILITIES
2011
$
(i) Fiji Electricity Authority
Telecom Fiji Limited
Bank guarantee for Star FM Ltd
Letter of credit for PNG FM Ltd
Bank guarantee for i-Pac Communications Fiji Ltd
holding Company
2010
$
2011
$
2010
$
8,660
8,567
250,000
582,000
-
8,660
8,567
250,000
375,775
1,307,675
8,660
8,567
250,000
582,000
-
8,660
8,567
250,000
375,775
1,307,675
849,227
1,950,677
849,227
1,950,677
(ii) The subsidiary company (PNG FM Ltd) has filed a request for amendment to income tax assessments received for the
financial years 1997 to 2002. The directors believe that the outcome of the request will not result in significant additional
tax liability for the company. Assessments are yet to be received for years 2005 to 2008.
31
In current financial year, the company received a re-assessment for financial year 2005 from IRC. The Tax Authority's
assessment is PKG29,671 more than that lodged in their income tax return.
24. RELATED PARTY DISCLOSURES
(a) Directors
Directors at the date of this report are:
Hari Punja, Mathew Wilson, William Parkinson, Pramesh Sharma, Shaenaz Voss and Semi Leweniqila (appointed on 20
December 2010).
2011
(b) Ownership interest in related parties
Place of
incorporation
PNG FM Limited
Total Event Company Limited
231 Waimanu Holdings Ltd
i-Pac Communications Fiji Ltd
PNG
Fiji
Fiji
Fiji
2010
Ownership interest
100%
100%
50%
35%
100%
100%
50%
35%
$
$
164,081
79,457
-
101,458
13,800
-
$
$
132,338
250,000
131,028
75,000
$
$
(c) The following related party transactions occurred during the financial year:
(i) Transactions with consolidated subsidiary - PNG FM Limited
Costs incurred on behalf of the subsidiary and recovered
Management fees
Dividend received
(ii) Transactions with associate - 231 Waimanu Rd Holdings Limited
Rental of office and studio space
Dividends received
(iii) Transactions with associate - i-Pac Communications Fiji Limited
Purchase of internet services
Radio income received
Other income received
62,793
37,200
5,219
42,883
43,579
33,849
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
33
24. RELATED PARTY DISCLOSURES continued
2011
$
2010
$
Radio income received
Other income received
37,200
5,219
43,579
33,849
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
24. RELATED PARTY DISCLOSURES continued
2011
$
2010
$
(iv) Transactions with related entities
During the year the company entered into various transactions with related entities which were at normal commercial
terms and conditions. The aggregate value of major transactions with related entities during the year are as follows:
Revenue
Flour Mills of Fiji Ltd
Colonial First State Investments
Dominion Insurance
$
Radio revenue
Radio revenue
Radio revenue
(v) Compensation of key management personnel of the Group
Short-term employee benefits
32
Post-employment pension and medical benefits
(vi) Owings from/(to) related parties
$
80,831
12,897
138,360
9,054
$
$
366,770
22,985
389,755
318,800
21,972
340,772
$
$
PNG FM
i-Pac Communications - Trade creditors
83,028
9,610
42,308
22,413
92,638
64,721
(vii) Directors' interests in an employee-share incentive plan
No share options have been granted to staff, executives and the non-executive members of the Board of Directors
under this scheme.
(viii) Transactions with other related party
$
$
120,456
64,590
114,465
58,021
Superannuation contribution:
Fiji National Provident Fund
Association of Superannuation Funds of PNG
25. COMPANY DETAILS
(a) Company Incorporation
The legal form of the company is a public company, domiciled and incorporated in the Republic of the Fiji under the
Companies Act, 1983.
(b) Registered office/Company Operation
The company's operations and registered office is located at 231 Waimanu Road, Suva while the subsidiary is in Papua
New Guinea. The associate companies namely i-Pac Communications Fiji Ltd and 231 Waimanu Road Holdings operate
from Carpenter Street, Suva and 231 Waimanu Road, Suva respectively.
(c) Number of Employees
As at balance date, the company employed a total of 80 employees (Group: 140 employees).
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
34
26. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
As at balance date, the company employed a total of 80 employees (Group: 140 employees).
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
26. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group's principal financial liabilities comprises bank overdrafts, finance leases, hire purchase contracts, trade payables
and loans. The main purpose of these financial liabilities is to raise finance for the Group's operations. The Group has various
financial assets such as trade receivables and cash , which arise directly from its operations.
The main risk arising from the company's financial statements are interest rate and credit risk. The Board of Directors reviews
and agrees policies for managing each of these risks which are summarised below.
Interest rate risk
The Group's exposure to the risk of changes in market interest rates relates primarily to the Group's long-term debt obligations
with floating interest rates. The Group's policy is to manage its interest cost using a mix of fixed and variable rate debts.
The following sensitivity analysis is based on the interest rate risk exposures in existence at the balance date:
Increase /
(decrease) in
interest rate
33
2011
+10%
-10%
Effect on profit
before tax
$
(13,420)
13,350
2010
+10%
-10%
(15,978)
15,978
Foreign currency risk
The Group has an investment in Papua New Guinea. The movement in the Kina/FJD exchange rates are recorded in equity
and will be realised on disposal of the investment.
The Group has transactional currency exposures. Such exposures arises from purchases by the Group in currencies other than
Fijian dollars.
Credit risk
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 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.
Liquidity risk
The table below summarises the maturity profile of the Group's liabilities at 31 December based on contractual undiscounted
payments:
31 December 2011
Interest bearing borrowings
Lease liabilities
Trade and other payables
31 December 2010
Interest bearing borrowings
Lease liabilities
Trade and other payables
$
On demand
$
Less than 1 year
114,374
114,374
On demand
442,576
80,456
801,929
1,324,961
Less than 1 year
69,273
103,902
173,175
421,908
58,929
658,938
1,139,775
$
1 to 5 years
1,926,734
56,353
1,983,087
1 to 5 years
879,660
47,833
927,493
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
35
26. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES continued
$
> 5 years
371,198
371,198
> 5 years
371,198
371,198
Interest bearing borrowings
Lease liabilities
Trade and other payables
69,273
103,902
173,175
421,908
58,929
658,938
1,139,775
879,660
47,833
927,493
371,198
371,198
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
26. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES continued
Capital Management
The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating and a healthy
capital ratio in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain
or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or
issue new shares. No changes were made in the objectives, polices or processes during the year 31 December 2010 and 31
December 2011.
The Groups monitors capital using a gearing ratio, which is net debt divided by total capital plus debt. The Group's policy is to
keep the gearing ratio below 40%. The Group includes net debt, interest bearing borrowings, trade and other payables less
cash and cash equivalents, excluding discounted operations. Capital includes any preference shares, equity attributable to
equity holders of the parent less any unrealised gains reserve.
34
Group
Interest bearing borrowings
Trade and other payables
Less cash and short term deposits
Net debt
2011
$
2,877,317
916,303
(564,779)
3,228,841
2010
$
1,848,801
762,840
(253,189)
2,358,452
Equity
7,607,101
6,857,123
Total capital
7,607,101
6,857,123
10,835,942
9,215,575
Capital and net debt
Gearing ratio
30%
26%
27. SUBSEQUENT EVENTS
On 6 January 2012, one of the major shareholders, Hari Punja and Sons Limited sold its entire shareholding in the company to
Parkinson Holdings Limited. The trade involved a special crossing of 989,967 shares at $2.10 per share. With this share
acquisition, Parkinson Holdings Ltd, representing the interests of Managing Director William Parkinson, now has 55.48 %
shareholding in Communications (Fiji) Ltd.
The shareholding structure of associate company, i-Pac Communications Limited, is expected to change in 2012 and will result
in the dilution of the shareholding of Communications (Fiji) Limited. The effect of the dilution has been recorded in the 31
December 2011 financial statements.
Apart from the above, there has not arisen in the interval between the end of the financial year and the date of this report any
other item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect significantly the
operations of the company and the Group, the results of those operations or the state of affairs of the company and the Group
in the subsequent financial year.
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
SOUTh PACIFIC STOCK EXChANGE DISCLOSURE REQUIREMENTS
FOR ThE YEAR ENDED 31 DECEMBER 2011
36
STOCK EXChANGE LISTING DISCLOSURES
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
SOUTh PACIFIC STOCK EXChANGE DISCLOSURE REQUIREMENTS
FOR ThE YEAR ENDED 31 DECEMBER 2011
STOCK EXChANGE LISTING DISCLOSURES
Disclosure requirements of the South Pacific Stock Exchange (not included elsewhere in this report) are as follows:
(a) Statement of interest of each Director in the share capital of the Company or in a related Corporation as at 31 December
2011 in compliance with Listing Requirements :
Hari Punja (Indirect interest - Hari Punja & Sons Limited) 953,278 shares in Communications (Fiji) Limited.
Matt Wilson (Direct interest) 112,736 shares in Communications (Fiji) Limited.
William Parkinson (Indirect interest - Parkinson Holdings Limited) 930,655 shares in Communications (Fiji) Limited.
(b) Distribution of Shareholding
No. of holders
39
% holding
0.53%
501 to 5,000 Shares
84
4.39%
5,001 to 10,000 Shares
10,001 to 20,000 Shares
20,001 to 30,000 Shares
11
9
4
2.48%
3.93%
2.68%
30,001 to 40,000 Shares
2
1.91%
40,001 to 50,000 Shares
50,001 to 100,000 Shares
100,001 to 1,000,000 Shares
1
3
5
1.24%
6.37%
76.47%
Nil
158
Nil
100%
holding
Less than 500 Shares
35
Over 1,000,000 Shares
(c) Share Register
SPSE Central Share Registry
Level 2, Provident Plaza 1
SUVA, Fiji.
(d) Disclosure under Section 6.3.1(viii)
Turnover
Other income
Depreciation
Other expenses
Income tax expense
Net (Loss)/Profit after Tax
Communications
PNG FM Limited
(Fiji) Limited
F$
F$
4,817,752
6,506,767
586,752
5,404,504
27,998
6,534,765
521,266
4,941,450
218,484
347,985
4,540,778
492,748
5,681,200
5,381,511
(276,696)
COMMUNICATIONS (FIJI) LIMITED and Subsidiary company
SOUTh PACIFIC STOCK EXChANGE DISCLOSURE REQUIREMENTS continued
FOR ThE YEAR ENDED 31 DECEMBER 2011
37
STOCK EXChANGE LISTING DISCLOSURES continued
1,153,254
COMMUNICATIONS (FIJI) LTD
LISTING REQUIREMENTS OF SOUTH PACIFIC STOCK EXCHANGE
(A)
Schedule of each class of shares held by Directors and Senior Management under listing rule 6.31(iv) as at 31st December 2011
Names
No of Shares
(B)
Hari Punja & Sons Ltd
989,967
Parkinson Holdings Ltd
983,966
Unit Trust of Fiji (Trustee Company) Ltd
381,327
Colonial Investments Ltd
252,955
Matt Wilson
112,736
Ian Jackson
14,500
Loretta Jackson
9,500
Adrian Au
2,000
Malakai Fredrick Veisamasama
2,000
Doris King
1,500
Charles Taylor
1,500
Ateca Toganivalu
1,000
Vijay Narayan
1,000
Shareholdings of those persons holding twenty largest blocks of shares under listing rule 6.31(iv)
Shareholder Name
No. of Shares
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Hari Punja & Sons Ltd
Parkinson Holdings Ltd
Unit Trust of Fiji (Trustee Company) Ltd
BSP Investments (Fiji) Ltd
Matt Wilson
Kontiki Fund Limited
JP Bayly Trust
Guardian Trustees Ltd- Fijian Holdings Unit Trust
Praful & Anita Patel superannuation Fund
Lautoka Stevedoring (Fiji) Company Ltd
Amy Lynn Bergquist
Aequi-Libria Associates Ltd
Erik Larson and Karla Larson –Wadd,JTwros
BSP Life (Fiji) Ltd
Eta & Radike Qereqeretabua
Reddy’s Enterprises Ltd
Fijicare Insurance Ltd
Tanisha Investments Ltd
Roland F Schultz
Graham Eden
38
989,967
983,966
381,327
252,955
112,736
88,260
76,300
62,000
44,218
34,100
34,000
26,700
24,400
22,900
21,200
20,000
20,000
16,100
15,000
14,891
Total % Holdings
27.82
27.66
10.72
7.11
3.17
2.48
2.14
1.74
1.24
0.96
0.96
0.75
0.69
0.64
0.60
0.56
0.56
0.45
0.42
0.42
COMMUNICATIONS (FIJI) LTD
(C)
Disclosure under listing rule 6.31 (viii)
PNG FM LTD
I-PAC T/A
231 WAIMANU RD
UNWIREDROAD
(PNG) (FIJI)(FIJI)
Percentage of Shareholding 100%
Turnover
Other Income
34.6%
$
50%
$$
6,506,726 1,198,503395,699
27,999
33,742
19,073
6,534,725 1,232,245414,772
Depreciation and amortization
347,982
984,490
27,332
Interest Expense
82,967
82,978
-
Other Expenses
4,457,782
1,059,590
49,000
Income Tax Expense
492,745
(30,986)
5,381,476 2,127,05845,346
Net Profit/(loss) after Tax
1,153,249 (894,813)369,426
Total Assets 4,945,368
3,251,436
2,316,829
Total Liabilities
1,868,519
2,323,777
396,238
Shareholders Fund
3,076,849
927,659
1,920,591
(D)
Disclosure under Listing Rule 6.31 (ix)
There were no contracts existing which had director’s material interest in it.
39
COMMUNICATIONS (FIJI) LTD
(E)
Disclosure under listing Rule 6.31(xii)
Summary of key Financial Results for the previous five years (Consolidated)
2011 2010200920082007
2006
Net Profit After Tax
876,558
1,318,038
1,412,000
864,220
440,806
88,279
Current Assets
3,120,186 2,227,5031,674,925 1,907,5071,481,897
1,116,235
Non- Current Assets
9,453,014 8,064,2077,697,295 6,530,1646,738,201
6,162,043
Total Assets
12,573,20010,291,7109,372,220 8,437,6718,220,098
7,278,278
Current Liabilities
2,314,054
1,842,070
1,411,133
1,173,985
1,250,979
820,059
Non- Current Liabilities
2,652,045
1,592,517
1,954,625
2,336,172
2,619,632 2,358,595
Total Liabilities
4,966,099
3,434,587
3,365,758
3,510,157
3,870,611 3,178,654
Shareholders Equity 7,607,101 6,857,1236,006,462 4,927,5144,349,487
4,099,624
(F)
Disclosure under listing Rule 6.31(xiii)(a) (Consolidated)
2011 2010200920082007
2006
cents centscentscentscents
cents
Dividend Declared per share 0.10
0.08
0.08
0.08
0.06
0.03
24.64
37.04
39.69
24.29
12.39
2.48
Net tangible assets per share 166.67
151.62
127.28
96.10
78.84
74.90
Earnings per share (G)Disclosure under listing Rule 6.31(xiii) (d)
Share price during the year (cents per share) 2011
Highest 2.10
Lowest
1.75
2.10
On 31st December 2011
40
Communications (Fiji) LTD
Minutes of the Twenty Sixth Annual General Meeting of Shareholders held on the 21st of April 2011, at 231
Waimanu Road, at 10.00am.
Present:
Mr. Matthew Wilson Acting Chairman
Mr. William Parkinson
Mr. Pramesh Sharma
Mrs. Shaenaz Voss
Mr. Semi Leweniqila
Mr. Ian Jackson
Ms. Jyoti Solanki Company Secretary
Mr. Malakai Veisamasama
Mr. Vijay Narayan
Mrs. Ateca Toganivalu
Mrs. Doris Southwick
Mr. Steven Pickering
Mrs. Loretta Jackson
Mr. Radike Qereqeretabua
Mr. Jignesh Pala
Ms. Raghni Khatri
Ms. Elenoa Kaloumaira
Ms. Siale Yee
Mr. Philip Wilikibau
Mr. Charles Taylor
Apologies:
Mr. Hari Punja - Chairman
In the absence of the Chairman, Mr. Mathew Wilson chaired the AGM
Quorum:
The Quorum required was met and recorded.
Note by Acting Chairman
“I think it’s appropriate to reflect briefly on how far this company has come from when it was the first station
in Suva which was first to offer 24 hrs radio and now is the largest commercial FM radio network in the South
Pacific, with operation here and in PNG. The journey continues and there is no doubt that the company now
stands at the threshold of a new era of growth and diversification. The company’s momentum is driven by the
spirit and the vision which has inspired CFM from its first day. 2010 was a good year and 2011 received an
excellent boost recently with the result from Tebbutt research, which reaffirmed the strength of the company
in a very competitive market. The confidence of the market was underlined when the share price increased
recently adding value to the company. As with any business there are challenges but the board is confident that
CFM’s pattern of success will be repeated in 2011.”
Confirmation of Minutes:
The Minutes of the twenty fifth Annual General Meeting held on the 21st of April 2010 were read and approved.
Amendments to the minutes were done and distributed to the shareholders present.
The motion to adopt the minutes was moved by Mr Pramesh Sharma and seconded by Mr. Jignesh Pala and
approved unanimously.
41
Matters arising from the Minutes:
No Matters Arising
Audited Accounts:
The Acting Chairman informed that the Mr Pickering was present and if there were any question he would be
able to respond.
There were no questions asked however, list of questions sent by Mr Erik Larson were discussed and answered
by Mr Parkinson in following manner.
1.
I noted that there was less reported about i-Pac/ Unwired in the announcement of annual financial
performance and in the chairman’s letter to shareholders than in previous years. I also noted that CFL’s
share of i-Pac’s annual loss has widened from $169,000 to $226,000 from 2009 to 2010. These figures
suggest that i-Pac faced a wider overall loss for 2010 than 2009. Could you please provide some
additional commentary on the performance of Unwired during 2010 and what accounted for this wider
loss?
Unwired in fact delivered a similar operating profit to the previous year BUT during the year we discovered,
during a change in management accounting systems, that revenue had been overstated in previous
years due to errors relating to customers who had been suspended but were still being billed.
The internet business has changed dramatically over the last two years with increased levels of competition
reducing prices plus a drop in the wholesale cost of bandwidth from Fintel. Current performance suggests
slight improvements in profitability but the market remains challenging.
2.
Continuing on i-Pac, I noted in note 23 to the audited financial statements (page 29) that CFL continues
to provide a substantial bank guarantee for i-Pac. Now that CFL is not the single largest shareholder of
i-Pac, could you please explain why CFL provides the bank guarantee?
Datanets refused to provide any level of security on past debts and so CFL was required to continue
providing guarantees. Unfortunately, we were not in a position to negotiate on this matter.
3.
While I anticipate that other shareholders may have questions about the exciting, new cinema venture in
PNG, I would like to also put forth a couple of questions. I understand that not every detail for this venture
has yet been finalised and want to express my sincere appreciation for the Board and management
disclosing these plans to the market when they became a material fact. I look forward to learning more
about the venture when the remaining details are finalised. Could you please provide guidance on:
a.
When you anticipate being able to provide more detailed information? We are currently mid project
and final costs of equipment are being finalised. We aim to open the first complex in late July early
August. I would expect to be able to provide a detailed forecast when we release the half year
results in July.
b.
Given that the venture includes building out the cinema and purchasing all of the equipment, I
suspect that the first years of operations may have fairly significant depreciation costs and, as a
result, reported earnings might be lower than they otherwise would be. At the same time, I suspect
that the new venture may be cash flow positive prior to being reported earnings positive. Are my
thoughts consistent with your expectations?
Yes, however, the cinemas are keenly anticipated in Port Moresby and so we expect a good
response particular in its early days.
4.
I noted that TEC revenues have declined somewhat in 2010 compared to 2009 in Fiji, but more than
doubled in PNG. Was 2010 performance unusual for any reason in either country compared to what we
might anticipate in the coming years?
Unfortunately in Fiji, we hosted a concert early in the year which lost $25,000.00. Fiji Showcase results were
slightly lower than the previous year but we made up for a lot of this with new revenue from hiring of display
equipment. In 2011, Fiji Showcase is looking very strong and we anticipate a much better year in Fiji.
In PNG we developed a number of new events, plus we are receiving much stronger revenues from
equipment hire and management of events for clients. We expect this to continue to grow in 2011.
42
5.
6.
7.
8.
I also noted that the radio expenses in PNG increased substantially in 2010 compared to 2009 (note
4.5 of the audited accounts, page 19; calculated by subtracting the Holding Company from the Group
results to figure PNG expenses). In addition, there was a fairly large increase in finance costs in PNG.
Elsewhere in the statements, it is clear that there were some one-off expenses due to moving the
operations in PNG. While I surmise that these one-off expenses account for some of the increases in
PNG expenses and finance charges, I reckon that there may be other drivers of changes in expenses.
What is the outlook for expenses in PNG? Will the company be able to increase advertising rates to
recoup the additional expenses?
The bulk of this results from the fact that we were renting two studio premises for the first quarter during
the changeover. However, we are, like all businesses in PNG, facing increasing inflationary pressure
on staff costs and general expenditure. The PNG FM team has managed to minimise the impact of this
through cost control and they are more than compensating for this with increased revenue. We expect
to continue the profit growth trend in 2011. I will be briefing the market on this in detail on May 5th.
I note that the operating lease rental costs have increased in 2010 compared to 2009 (also in note 4.5).
Am I correct in presuming that these increased expenses will continue in future years?
As above this is due to the doubling up of rent in PNG
The staff at the balance date has increased by 10 people (note 25.c on page 30). However, note 4.3
(page 19) shows that salary and wage have only slightly increased in Fiji and actually decreased in PNG.
I would imagine that this discrepancy might be explained by the possibility that year-end staff levels were
atypically low in 2009 or atypically high in 2010. Is there any reason to expect a substantial increase in
staffing costs for 2011 and beyond?
Correction… Holding company 90 permanent employee and Group 135 numbers haven’t changed in Fiji
and in PNG. With regards Salaries and wages in PNG, these have not changed very much, however,
this number has gone down because staff rent which is subsidised in PNG and was previously included
under salaries and wages has been reclassified this year under other operating expenses (note 4.5).
I note that in note 16 to the statements (page 25) that “other payables” has increased quite substantially
(particularly in Fiji) in 2010 compared to 2009. (Not the trade payables, but the unspecified “other
payables.”) Could you please provide some discussion about what these other payables include and
why they have increased?
Other Payable has increased by $148,860 compared to 2009. The two major components of this increase
are broadcasting license $47k and Village 6 cinemas monthly guarantee charges of $52k for Nov and
Dec.
It was proposed by the Govt. to increase the Broadcasting License to 1.5% of radio revenue from 2008.
This proposal is yet to be confirmed, however, the recently formed Telecommunications Authority of Fiji
(TAF) has indicated a firm ruling on License Fees will be made in the next few months. Hence, CFL has
been accruing this into their books pending a final decision. The total accrual from 2008-2010 is more
than $120k.
Remaining $49k relates to various bills received in late December and were paid in Jan 2011.
9.
I note that CinemADS revenue for Fiji is shown in note 4.2. Considering Fiji only, how much should we
expect that revenue to increase in later years? Is CFL earning a good return on its capital at this revenue
level?
As capital investment was very small (less than $20,000) return is immediate. We are still working on
this and we expect return to improve in 2011. We are also adding signage and of course Damodar Bros
have a new development underway in Raiwai.
We are also preparing to launch CinemADs in Papua New Guinea.
10.
The detailed notes show the additional income that CFL received from Fiji’s new tax rate for listed
companies; I appreciate this detail as well as the frank comments in the chair’s letter that this policy
change accounts, in part, for the solid performance this year. I encourage the company to highlight to
Government the positive ways that this additional profit is being successfully invested to further benefit
Fiji’s economy.
Noted
The Audited Balance Sheet, Profit and loss and Directors reports were received and adopted. The motion was
moved by Raghni Khatri and seconded by Mr. Ian Jackson.
43
Election of Director:
Mr. Pramesh Sharma and Mrs. Shaenaz Voss were re-appointed to the Board as Directors, following their
retirement by rotation. This motion was proposed by Mr. Radike Qereqeretabua and seconded by Mr. William
Parkinson.
Election of Independent Director:
Under the regulations of the South Pacific Stock Exchange one third of the Board’s membership must be
deemed independent. Suva lawyer Mr. Semi Leweniqila was appointed as independent director by the board
on 20th December 2010. His appointment was confirmed by shareholders. The motion was moved by Pramesh
Sharma and seconded by Jignesh Pala.
Mr. Matt Wilson is considered to be another Independent Director as his level of shareholding is less than 5%
Appointment of Auditors:
The meeting resolved to re appoint M/s Ernst & Young as auditors.
The motion was moved by Mrs. Doris Southwick, seconded by Mr. Radike Qereqeretabua
and passed unanimously.
Dividends:
The meeting noted that a 2nd Interim Dividend of $142,320 (4cents per share) has been adopted as the final
Dividend for the year 2010.
The motion was moved by Mr. Parkinson, seconded by Mrs. Shaenaz Voss and passed unanimously.
The Acting Chairman further outlined that the final dividend has been already paid out by SPSE.
Other Matters:
The Director’s fee was reviewed by the Board and proposed to the shareholders for approval. Mr Parkinson
mentioned that directors are currently paid $4,000 per annum. The Board proposes to increase this to $4,500.
It was proposed that Mr. Hari Punja and Mr. Wilson are to be paid $6,000 in recognition of their position as
founding directors and shareholders, and the additional responsibilities they undertake.
The motion was proposed by Mr. William Parkinson, moved by Mr. Vijay Narayan and seconded by Mr. Radike
Qereqeretabua. It was unanimously approved.
Remarks by Acting Chairman
On behalf of the Board, Mr Wilson paid tribute to Mr. Ian Jackson (GM Fiji operations) and Adrian Au (GM PNG
operations) for their leadership and thanked them for their efforts. He described them as men of accomplishment
and sound judgment who lead with quiet and dedicated authority. He also drew attention to the role of William
Parkinson who was formally reappointed to his position as managing director at the beginning of 2011. He
emphasised that the company would not be in existence if it was not for William. He offered thanks to William
on behalf of all the shareholders for his initial vision, his tenacity and his perseverance as a 22 yr old, that
resulted in the birth of Communications Fiji Ltd. Mr Wilson thanked all employees for their outstanding efforts
and contribution to the performance of the company.
There being no other business the Acting Chairman Mr. Matt Wilson closed the meeting at 10.30 am.
Approved
……………………….
Acting Chairman
44
COMMUNICATIONS FIJI LTD
Private Mail Bag, Suva, Fiji. Phone: 3 314 766 Fax: 3 303 748 e-mail: jyoti@cfl.com.fj
APPOINTMENT OF PROXY
THE COMPANY SECRETARY,
I/We________________________________of __________________________________
being a member of Communications Fiji Limited, hereby appoint,
___________________________________of ___________________________________
or failing him/her ________________________of ________________________________
as my/our proxy, to vote for me/us and on my/our behalf at the Annual General Meeting of
Communications Fiji Limited to be held on 23rd of April, 2012 and at any adjournment thereof
Signed this ____________________________day of _____________________2012
Signature of Member: _____________________________________________________
Name of Member: ________________________________________________________
Signature of Witness: _____________________________________________________
In case of a body corporate, this form should be under its Seal or be signed by an Officer or
an Attorney duly authorized by it.
This form is to be used in favour of/against* the resolution.
*Strike out which ever is not applicable. Unless otherwise instructed, the proxy may vote as he/she thinks fit.
This proxy form, to be effective, must reach the registered office of the Company, 231
Waimanu Road, Suva, no less than 48 hours before the time of holding the meeting.
45
CFL: FM96, Legend FM, Navtarang, Radio Sargam, Viti FM, Total Event Company,
fijivillage.com & CFL CinemADs,
PNG FM: Nau FM, YUMI FM & Legend FM
231 Waimanu Rd LTD
Unwired Fiji.