2012 Annual Report - Domino's Pizza

NOTES TO THE FINANCIAL STATEMENTS CONTINUED
32.9.2 Financing facilities
Secured bank overdraft facility, reviewed annually and payable at call:
amount used - -
amount unused 2,000 2,000
2,000 2,000
2012
$’000
2011
$’000
Secured commercial bill facility, reviewed annually:
amount used 13,717 15,035
amount unused 24,820 13,015
38,537 28,050
The Consolidated entity has access to financing
facilities at reporting date as indicated above.
The Consolidated entity expects to meet its
other obligations from operating cash flows
and proceeds of maturing financial assets.
The Consolidated entity expects to maintain
a current debt to equity ratio approved by the
Board. This will be achieved through the issue of
new debt and the increased use of secured bank
loan facilities.
32.10 Fair value of financial instruments
The fair values of derivative instruments
are determined as follows:
• The present value of future cash flows
estimated are discounted based on
the applicable yield curves derived
from quoted interest rates.
The directors consider that the carrying amount of
financial assets and financial liabilities recorded
in the financial statements approximate to their
fair values.
Financial instruments that are measured
subsequent to initial recognition at fair value,
are grouped into Levels 1 to 3 based on the
degree to which the fair value is observable:
• Level 1 fair value measurements are those
derived from quoted prices (unadjusted)
in active markets for identical assets or
liabilities.
• Level 2 fair value measurements are those
derived from inputs other than quoted prices
included within Level 1 that are observable
for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived inputs).
• Level 3 fair value measurements are those
derived from valuation techniques that
include inputs for the asset or liability that
are not based on observable market data
(unobservable inputs).
The directors consider that the financial
instruments previously disclosed are classified as
Level 2, and there have been no transfers between
Level 1 and Level 2.
33. SHARE-BASED PAYMENTS
33.1 Equity-settled share-based benefits
The Company has one share plan and one share
and option plan available for employees and
directors and executives of the Company: the
Domino’s Pizza Exempt Employee Share Plan
(“Plan”) and the Domino’s Pizza Executive
Share and Option Plan (“ESOP”). Both plans
were approved by a resolution of the Board of
Directors on 11 April 2005. Fully paid ordinary
shares issued under these plans rank equally
with all other existing fully paid ordinary
shares, in respect of voting and dividend
rights and future bonus and rights issues.
33.2 Executive Share and Option Plan
The Company established the ESOP to
assist in the recruitment, reward, retention
and motivation of directors and executives
of the Company (“the participants”).
In accordance with the provisions of the
scheme, executives within the Company, to be
determined by the Board, are granted options to
purchase parcels of shares at various exercise
prices. Each option confers an entitlement
to subscribe for and be issued one share,
credited as fully paid, at the exercise price.
Options issued under the ESOP may not be
transferred unless the Board determines
otherwise. The Company has no obligation
to apply for quotation of the options on the
ASX. However, the Company must apply
to the ASX for official quotation of shares
issued on the exercise of the options.
The Company must not issue any shares or
grant any option under this plan if, immediately
after the issue or grant, the sum of the
total number of unissued shares over which
options, rights or other options (which remain
outstanding) have been granted under this
plan and any other Group employee incentive
scheme would exceed 7.5% of the total number
of shares on issue on a Fully Diluted Basis
at the time of the proposed issue or grant.
Fully Diluted Basis means the number of
shares which would be on issue if all those
securities of the Company which are capable
of being converted into shares, were converted
into shares. If the number of shares into
which the securities are capable of being
converted cannot be calculated at the relevant
time, those shares will be disregarded.
72
ANNUAL REPORT 2012 DOMINO’S PIZZA ENTERPRISES LIMITED