AJ Lucas Group annual report 2007-08

33. Deed of cross guarantee
On 16 June 2008, several of the entities in the Group entered into a Deed
of Cross Guarantee. Pursuant to ASIC Class Order 98/1418 (as amended)
dated 13 August 1998, the Group’s subsidiaries entering into the Deed
are relieved from the Corporations Act 2001 requirements to prepare,
have audited and lodge financial reports, and directors’ reports.
The effect of the Deed is that the Company guarantees to each creditor
payment in full of any debt in the event of winding up of any of the
subsidiaries under certain provisions of the Corporations Act 2001. If a
winding up occurs under other provisions of the Act, the Company will
only be liable in the event that after six months any creditor has not been
paid in full. The subsidiaries have also given similar guarantees in the
event that the Company is wound up.
The subsidiaries subject to the Deed are:
Name of entity
AJ Lucas Operations Pty Limited
AJ Lucas Plant & Equipment Pty Limited
AJ Lucas Drilling Pty Limited
AJ Lucas Pipelines Pty Limited
AJ Lucas Testing Pty Limited
Smart Electrical & Power Services Pty Limited
AJ Lucas Joint Ventures Pty Limited
Coastal Sand Technologies Pty Limited
Lucas Energy Pty Limited
AJ Lucas Coal Technologies Pty Limited
Lucas Contract Drilling Pty Ltd
McDermott Drilling Pty Ltd
Lucas Stuart Pty Limited
Ketrim Pty Limited
Stuart Painting Services Pty Ltd
Lucas Stuart Projects Pty Ltd
Jaceco Drilling Pty Ltd
Geosearch Drilling Service Pty Ltd
A consolidated summarised income statement and consolidated balance
sheet, comprising the Company and controlled entities which are a party
to the Deed, after eliminating all transactions between parties to the Deed
of Cross Guarantee, at 30 June 2008 are set out as follows:
Summarised income statement and retained profits
Consolidated
2008
$
Profit before tax 21,793
Income tax expense (6,940)
Profit after tax 14,853
Retained loss at beginning of the year (10,699)
Dividends recognised during the year (3,273)
Retained profits at end of year 881
Attributable to:
Equity holders of the company 14,853
Profit for the period 14,853
Balance Sheet
Consolidated
2008
$
Current assets
Cash and cash equivalents 16,448
Trade and other receivables 56,847
Construction work in progress 40,685
Other 1,263
Total current assets 115,243
Non-current assets
Development assets 15,452
Exploration assets 4,750
Investments 26,117
Intangible assets 12,279
Property, plant and equipment 53,861
Total non-current assets 112,459
Total assets 227,702
Current liabilities
Trade and other payables 79,273
Interest-bearing loans and borrowings 17,696
Income tax payable 115
Provisions 8,550
Total current liabilities 105,634
Non-current liabilities
Trade and other payables 12,399
Interest-bearing loans and borrowings 51,036
Deferred tax liabilities 1,311
Provisions 748
Total non-current liabilities 65,494
Total liabilities 171,128
Net assets 56,574
Equity
Issued capital 54,118
Reserves 1,575
Retained earnings 881
Total equity 56,574
34. EVENTS SUBSEQUENT TO BALANCE DATE
On 23 July 2008, the Company purchased the business of Mitchell Drilling,
the largest specialist drilling company for the coal seam gas industry in
Queensland. The purchase price of $150 million was funded by a $15 million
equity placement to the vendor, with the balance out of an equity placement
to institutional shareholders of $29.15 million, deferred consideration of $15
million and increased borrowing facilities. At the same time, the Group’s bank
facilities have been renegotiated and their terms extended.
Subsequent to year-end, the directors have declared a final ordinary
dividend of 4.5¢ per share, franked to 15%.
Other than these matters, there has not arisen in the interval between the
end of the financial year and the date of this report any item, transaction or
event of a material or unusual nature likely, in the opinion of the directors of
the Company, to affect significantly the operations of the Group, the results of
those operations, or the state of affairs of the Group, in future financial years.
66 LUCAS group