New Image Annual Report 2012 concept.indd - NZX

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Notes to and forming part of the financial statements (continued) For the year ended 30 June 2012 Options On 19 June 2008, the Company issued to Protocol Limited 3.2 million options to purchase ordinary shares in the Company at an exercise price of 17 cents per share. The exercise of these options was based on certain performance criteria being met pursuant to an agreement between the Company and Protocol Limited in relation to the manufacture and sale of colostrum shots associated with the joint venture company Primary Nutrition Limited. On 20 December 2011, the Company reached a settlement agreement with Protocol Ltd in relation to the termination of the Management Services Agreement (refer Note 31), whereby the options granted to Protocol Ltd were cancelled, at no further cost to the Company. The 30 June 2011 fair value of the equity settled options was estimated as at the date of grant using a Black-Scholes Model taking into account the terms and conditions upon which the options were granted. The model took into account the historic dividends, share price volatilities and co-variances of the Company to produce a predicted distribution of relative share performance. This was applied to the grant of options to give an expected value, which was recognised over the vesting period. The weighted average fair value of the options granted was $0.05 per option. The Company did not assign any value to these options as it was not expected that the performance criteria would be met and therefore the options were unlikely to be exercised. Expenses arising from the equity settled share based payments for 2011 were therefore $Nil. Employee Options Share Scheme No. of Options WAEP No. of Options WAEP Balance 1 July 2011 3,200,000 0.17 8,730,000 0.27 Cancelled (3,200,000) 0.17 (8,730,000) 0.27 Balance 30 June 2012 - - - - Employee Options Share Scheme No. of Options WAEP No. of Options WAEP Balance 1 July 2010 - - 7,095,000 0.29 Granted/Reinstated 3,200,000 0.17 2,000,000 0.28 Forfeited - - (365,000) 0.67 Balance 30 June 2011 3,200,000 0.17 8,730,000 0.27 The Weighted Average Exercise Price (WAEP) is the price at which each tranche of the options and share scheme options are exercisable, multiplied by the number of options and share scheme options remaining to achieve a total weighted average exercise price. No options were exercisable at year end. 80 The following table lists the inputs to the models used for 30 June 2011: 81 Employee Share Scheme Employee Share Scheme Employee Share Scheme 2011 2011 2011 Tranche 1 Tranche 2 Tranche 3 Dividend Yield (%) 2.94 4.90 8.87 Expected Volatility (%) 50.00 50.00 50.00 Risk-free Interest Rate (%) 5.48 5.51 5.49 Expected Life (Years) 4.00 4.00 4.00 29 Going Concern The Board has considered forecast information relating to the operational profitability and cash flow requirements. The Board is satisfied there are sufficient cash flows generated from the operating activities to meet the investing and financing cash flow requirements of the Group. Exercise Price ($) 0.19 0.97 0.41 Weighted Average Share Price at Measurement Date ($) 0.13 0.67 0.28 Weighted Average Remaining Life (Years) as at 30 June 2011 3.93 3.42 3.00 Model Used Black-Scholes Black-Scholes Black-Scholes The expected volatility was determined using an historical sample of month end Company share prices. The resulting expected volatility therefore reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. 30 Commitments Operating Lease Commitments – Group as lessee Operating lease commitments are commitments in respect of non cancellable operating leases and property leases contracted for at the reporting date but not recognised as liabilities payable. NEW IMAGE GROUP ANNUAL REPORT NEW IMAGE GROUP ANNUAL REPORT
Notes to and forming part of the financial statements (continued) For the year ended 30 June 2012 Group Company 2012 2011 2012 2011 $’000 $’000 $’000 $’000 Operating Lease Commitments Non-cancellable Operating Lease No later than 1 Year 1,845 2,126 - - Between 1 and 5 Years 1,252 2,898 - - 3,097 5,024 - - Capital Commitments The Group had no contractual obligations to purchase plant and equipment at 30 June 2012, (2011: $2,061,000 principally relating to the completion of the Paerata Spray Drier plant). 82 During the year ended 30 June 2012 $2,204,000 (2011: $1,927,000) was recognised as an expense in the Statement of Comprehensive Income in respect of operating leases. Operating Lease Commitments Receivable – Group as lessor The Group has sub-leased surplus office and retail space. These non cancellable leases are contracted for at the reporting date but not recognised as rental receivables. Group Company 2012 2011 2012 2011 $’000 $’000 $’000 $’000 Operating Lease Commitments Receivable Non-cancellable Operating Lease No later than 1 Year - 2 - - Between 1 and 5 Years - - - - - 2 - - 31Contingent Liabilities Protocol Limited Claim – Settled The Group has settled the claim from Protocol Limited in relation to the termination of the Management Services Agreement for the Col+ colostrum shot business. Although the Board held the view that the claim was without foundation, the ongoing litigation costs and distraction of senior management from core activities as a result of the litigation, led the Board to accept a negotiated settlement payment made to Protocol Limited of $94,000 in full and final settlement of the claim. As a direct result of the settlement the Joint Venture Agreement and Management Services Agreement have been terminated and the 3.2 million of share options granted to Protocol Limited have been cancelled, at no further cost to the Group. Taiwan Branch Customs Dispute 83 In the prior year the Group recorded an expense of $245,250 with respect to a claim received from the Taiwanese Customs Department against the Group’s Taiwanese Branch for additional customs duty. The additional duty paid has been accepted by the Taiwan Customs Department in settlement of the dispute and the methodology for calculating ongoing duty agreed upon. During the year ended 30 June 2012 $21,000 (2011: $36,000) was recognised as rental income in the Statement of Comprehensive Income in respect of sub-leases. Finance Lease Commitments The Group has finance leases for items of plant and machinery with a carrying amount of $176,508 (2011: $56,865). The lease contract expires within one to five years. Omegatrend International Pty Ltd Claim The Group has received a claim from the Liquidators of Omegatrend International Pty Ltd in relation to the liquidation of that company. The amount claimed is at least $600,000. The Board has appointed appropriate counsel and taken advice. The Board does not believe that the claim is with foundation and accordingly no provision for the claim has been made in these financial statements. Group Company 2012 2011 2012 2011 $’000 $’000 $’000 $’000 Finance Lease Commitments No later than 1 Year 55 17 - - Between 1 and 5 Years 149 49 - - Total Minimum Lease Payments 204 66 - - Less Amounts Representing Finance Charges 40 13 - - Present Value of Minimum Lease Payments 164 53 - - 32 Events Subsequent to Balance Date There were no material events subsequent to balance date. NEW IMAGE GROUP ANNUAL REPORT NEW IMAGE GROUP ANNUAL REPORT
Page 2 and 3: To enhance the health and well-bein
Page 4 and 5: Executive Chairman’s Review 2012
Page 6 and 7: NEW IMAGE GROUP LIMITED Annual Repo
Page 8 and 9: Statement of Changes in Equity (con
Page 10 and 11: Notes to and forming part of the fi
Page 44 and 45: Audit Report 84 Independent Auditor
Page 46 and 47: Statutory Information (continued) F
Page 48 and 49: Statutory Information (continued) F
Page 50: Company Directory For the year ende

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