2009 Annual Report - Yellowpages.com · In the magazine and book distribution business of Gordon and Gotch, the business held its own in the market, with relatively strong revenues.

2009 Annual Report

ABN 39 050 148 644

INDEX

2 | Chairman’s Review

6 | CEO Review

12 | Operations Reports

22 | Products and Services

24 | Directors’ Biographies

26 | Sustainability Report

30 | Corporate Governance

33 | Directors’ Report

34 | Remuneration Report

48 | Commentary on Accounts

50 | Income Statements

51 | Balance Sheets

52 | Cash Flow Statements

53 | Statements of Changes in Equity

54 | Financial Notes Index

54 | Notes to and forming part

of the Financial statements

95 | Independent Audit Report

96 | Five Year Summary

98 | Share Register Information

99 | Shareholder Information

Annual General MeetingThe Annual General Meeting will be held at: 11am, Tuesday 10 November 2009 Mantra Chatswood10 Brown Street, ChatswoodSydney NSW 2067 Details of the business of the meeting are contained in the separate Notice of Meeting.

Gearing Ratio / Net Debt ($M)

2007

2008

2009

94% / 255.1

50.5% / 199.6

59.3% / 208.4

Business Activities

PMP Limited is the parent company for a range of businesses which provide

consumer insight and printed communications solutions. PMP operates in the

areas of data-driven market and customer analytics, creative advertising solutions,

premedia, creative and photographic services, printing, letterbox distribution,

magazine and book distribution through its Pacific Micromarketing, Dimension

Studios, Pinpoint (NZ), Maxum (NZ), PMP Digital, PMP Print, PMP Distribution,

Gordon and Gotch, The Scribo Group, Catalogues4U and Griffin Press businesses.

EBIT before significant items ($M)

2007

2008

2009

91.3

85.1

54.2

| Sydney

| Melbourne

| Brisbane

| Adelaide

| Canberra

| Perth

| Auckland

| Christchurch

PMP LIMITED LOCATIONS

Net Profit ($M)

2007

2008

2009

46.4

78.9

(27.2)

We continue to focus on re-energising PMP as a lean,

efficient, customer-focussed company with the ability

to create shareholder wealth under all market conditions

Graham J ReaneyChairman, PMP Limited

CHAIRMAN’S REVIEW

2 | PMP Annual Report 2009 | Chairman’s Review Chariman’s Review | PMP Annual Report 2009 | 3

To the shareholders of PMP Limited2008/09 was a turbulent and very unsatisfactory year for PMP and one which has led to significant change within the organisation.

While the Global Financial Crisis has had an impact on the company’s operations, particularly in the second half, delays in integrating print plant acquired from Times Australia and the Group’s subsequent inability to achieve operational efficiency adversely impacted results, particularly in the second and third quarters.

Moments of crisis offer Boards the opportunity to drive reforms that would not be possible in ordinary times. During the year PMP appointed a new Chief Executive Officer (CEO), refreshed the Group’s executive leadership team and drove a change program that aims for PMP to become Australia and New Zealand’s lowest cost print and distribution company.

These changes will position PMP competitively to deliver long-term, stable growth once the market recovers. However, the one-off costs associated with these changes, combined with a depressed print market, have necessarily dampened PMP’s financial results during 2008/9.

Net profit after tax (before significant items) decreased from $46.6 million to $18.2 million. EBT (before significant items and after borrowing costs) was $25.7 million (which included a borrowing cost mark-to-market adjustment of $8.7 million), reduced from $65.8 million, while sales fell by 0.1% to $1,345.6 million.

Included within the significant items of $65.2 million, are cash costs of $28.8 million largely due to redundancies

and restructuring costs. The remaining $36.4 million in non-cash costs relates largely to impairment of assets.

Importantly, the Group’s balance sheet remains strong. PMP ended the year with net debt at $208.4 million, up from $199.6 million in June 2008, after a year that included acquiring the Scribo business and as already mentioned large restructuring costs. On the back of this, PMP’s gearing ratio (debt:equity) increased to 59.3% from 50.5% in the previous year, with interest cover decreasing from 6.5 to 5.1 times.

During the year, the Board approved a buy-back of up to 5% of issued shares from 10 September 2008. By 30 June 2009, this had brought back 4,009,386 shares at an approximate average price of 34.36 cents per share, for a total consideration of $1,378 million. The Board will continue to consider buy-back options.

With carry forward franking credits almost fully utilised, and the need to maximise cash in the company in these difficult economic conditions, the Board is not declaring a dividend this financial year.

OperationsIn Print, revenue fell 3.9% to $696.4 million. The tonnage reduction, combined with substantial pressure on pricing, led to a weak EBIT result. Management has responded

to this poor performance with a transformation plan that has taken $26 million in costs out of the business by substantially reducing manufacturing overhead cost and changing manning levels for various operations. This will result in Print being a more competitive operator, while still maintaining and improving customer service standards.

In the magazine and book distribution business of Gordon and Gotch, the business held its own in the market, with relatively strong revenues.

Letterbox distribution had a disappointing year including dealing with an ACCC matter that required Board inter-vention, as detailed in the review of operations. However, under new and highly experienced leadership, the business is repairing customer relationships and improving its cost structure, which should lead to improved profitability.

In Digital Premedia, although revenues were down, tight financial management enabled the business to protect its margins, with EBIT only declining slightly by 2.1% to 7.2 million.

In New Zealand, a year of recession took its toll on PMP, especially in the Print business, which relies heavily on the stalled property market.

Revenue 2008/9 2007/8 % Change

Sales revenue 1,345.6 1,347.3 0.1%

EBITDA (before significant items)

Depreciation & amortisation

96.0

(41.8)

125.9

(40.8)

(23.7%)

(2.5%)

EBIT (before significant items)

Finance costs

Income tax expense

54.2

(28.5)

(7.5)

85.1

(19.3)

(19.2)

(36.3%)

---

---

Net profit (before significant items)

Significant items (before tax)

18.2

65.2

46.6

26.6

60.9%

---

Income tax benefit (on Significant items)

19.8

5.7

---

Net profit (27.2) 78.9 ---

CHAIRMAN’S REVIEW

New Executive Management TeamIn April 2009, PMP announced the appointment of Mr Richard Allely as the Group’s new CEO. Mr Allely had been acting CEO since January 2009, following the departure of Mr Brian Evans. Having been the successful Chief Financial Officer at PMP for seven years, Mr Allely has a very good understanding of the Group’s business, the markets it operates in and the issues it faces.

Following his official appointment as CEO, Mr Allely acted swiftly to strengthen the executive leadership team and develop a transformation plan to address both the Group under performance and the economic downturn.

The new leadership team comprises many long-standing and highly respected PMP employees some of whom had previously left the Group. The Board has confidence that their wealth of expertise and operational experience will give the Group much needed stability during its transformation.

Directors on the BoardWith PMP simplifying its operations and focussing on driving performance in its core print and distribution businesses, it is appropriate to review the Board’s composition. In the coming years, the Group will require a small Board, with strong operational experience to support management in driving cultural and organisational change.

During the year, the appointment of Non Executive Director, Mr Peter George, as Head of PMP’s Print Business, caused some initial restructuring. Mr George stepped down from the Audit and Risk Management Committee and was replaced as Chairman by Mr Ian Fraser. The Committee also gained a new member, Ms Marcia Griffin. However, Mr George retained a Board position as an Executive Director.

FY09 was a turbulent and very

unsatisfactory year for PMP and

one which has led to significant

change within the organisation

This new structure will allow the Board to retain Mr George’s change management and strategic planning skills, while making appropriate concessions for his lack of independence.

In other changes, after ten years of service on the Board of PMP, Ms Marcia Griffin has decided not to seek re-election. We thank her for her valuable contribution over the years. In her place, the Board has appointed a new Non-Executive Director, Mr Matthew Bickford-Smith, who was previously CEO of the Ridley Group. Mr Bickford-Smith brings to PMP a wide range of corporate experience and complements the Board’s skill set with his expertise in risk management, structural financing and marketing.

Corporate GovernanceIt is the responsibility of the Board to ensure the company operates within a governance framework that fosters high ethical standards and links the performance of the company with the remuneration of senior executives.

The remuneration report outlines the Group’s remuneration policies and reward structure.

An external review of the Board’s performance and governance highlighted a number of areas for consideration. Changes were implemented in line with the review’s recommendations, including a new framework and updated policies that strengthen PMP’s obligations around reporting requirements.

Following a benchmarking exercise prior to the Global Financial Crisis, Director’s fees for 2008/9 had been increased by approximately 4%. However, in recognition of the poor Group performance and the financial crisis the

Board deemed it appropriate to reverse this decision and revert to 2007/08 fee levels. In addition, to better align Director interests with those of shareholders, shareholding requirements were changed for independent NEDs to hold a minimum of 100,000 shares. Because of the Government changes to Share Purchase Plans the Non-Executive Plan has been cancelled.

OutlookThe Board expects market conditions to continue to be challenging throughout 2010. We will therefore continue to focus on re-energising PMP as a lean, efficient, customer-focussed print and distribution company with the capacity to create shareholder value under all market conditions. As with prior years, PMP will provide guidance on current half earnings at the AGM but at this stage print orders are reasonably strong for the first half.

On behalf of the Board, I wish to thank Richard Allely and his new senior management team for their vision and strong leadership and PMP’s employees for their continued hard work and dedication in the face of substantial changes, uncertainty and disruption. We look forward to seeing their talent and commitment bear fruit in the coming year.

Graham J Reaney Chairman

4 | PMP Annual Report 2009 | Chairman’s Review Chairman’s Review | PMP Annual Report 2009 | 5

CEO’S REVIEW

Richard AllelyCEO, PMP Limited

I am excited about the future. Led by a high-calibre

Executive Team, our dedicated employees are

transforming PMP into the best print media solutions

company in Australia and New Zealand

Dear ShareholderThis year, in a change from previous annual reports, I have asked the heads of each business unit to reflect on divisional performance in the review of operations that follows this report. Also, I have elected to share with you the reasons for and effects of the substantial changes that have taken place in your company since I was appointed CEO.

The appointment came at a time when PMP faced some significant challenges: a number of senior management departures, including the previous CEO; declining profits; and major difficulties in the company’s letterbox distribution business. All this came against the backdrop of the Global Financial Crisis and negative media coverage about the company.

Your new management team’s response to these challenges was to focus firmly on improving PMP’s service, quality and delivery performance. Despite the difficulties, we knew the company was robust, with enormous experience and resources. PMP remained financially strong, with great people, great capability and a great deal of unrealised potential.

We therefore devised a transformation plan to harness this potential. The objective was simple, to re-energise the business and restore its reputation among staff, customers and the industry.

Phase I of our transformation program saw significant cost cutting across the business. By June 2009, it had delivered major short-term savings of $26 million on an annualised basis.

Following a market update, Phase II began in July 2009, creating a low-cost, customer-focused operating model that would re-energise the business and position it for growth when market conditions improve. Phase II focused on improving earnings by making the business substantially less complex, so it could deliver quality services at a much lower cost. It also had two other major goals, to align specialist print production facilities with customers’ needs and create a customer-focused culture.

In July, the new management team developed a detailed program of initiatives outlining clear priorities and the strategic intent of all activities. To support the creation of a service culture, the management team also agreed a Code of Conduct, with behaviours and standards to guide executive decision making, and a set of company values by which PMP will make and judge every action and decision.

Through this process, the twelve month goals became clear. By June 2010, PMP’s reputation will have been restored as the trusted and respected leader in providing

integrated print and distribution solutions in Australia and New Zealand. PMP will be seen as a professional, honest and committed employer that recognises the importance of our people through training, safety, remuneration and the benefits and rewards offered and PMP staff will have a clear understanding of PMP’s values.

This cultural change will include the management team working more closely with the Board to explore, expand and refine our strategy.

Financial performanceFiscal 2009 was a financial low for PMP. Group earnings, before interest and tax (EBIT), and before significant items, of $54.2 million for the 12 months to 30 June was in line with the revised forecast of 24 June 2009, but down 36.3% on the previous year. Group sales revenue of $1,345.6 million was down 0.1%. Significant costs from the restructuring included $28.8 million cash and $36.4 million non-cash items.

However, despite these significant restructuring costs and the economic crisis, PMP’s balance sheet remains strong. Considering the market conditions, our debt position is no cause for concern. We have good coverage ratios, support from our syndicate of banks and a facility that doesn’t fully mature until 2012.

6 | PMP Annual Report 2009 | CEO’s Review CEO’s Review | PMP Annual Report 2009 | 7

CEO’S REVIEW

8 | PMP Annual Report 2009 | CEO’s Review CEO’s Review | PMP Annual Report 2009 | 9

I believe the role of leadership

is to create the right enabling

conditions for a business to

achieve its outcomes

Vision for the futureWith much of the transformation process completed, PMP can look forward to a re-energised future – moving on from the lows of the last financial year to rebuild the best print media solutions business in Australia and New Zealand.

In doing so, we have three clear imperatives to deliver:

•Excellenceforourcustomers–weneedtogetback to where our customers respect and trust us to give them great service.

•Safetyandsecurityforouremployees–weneedtogive our staff the assurance of working for a profitable business that can invest in their careers and look after them properly in a safe working environment.

•Valueforourshareholders–weneedtogiveyou, the people who own this company, a decent return on your investment.

While the potential for revenue growth will be limited in the year ahead, we will continue to optimise the business and look for efficiency opportunities to deliver earnings growth.

Beyond fiscal 2010, PMP has enormous potential to generate good cash flows to pay down debt and reward our shareholders. While we are currently locked into a low franking balance because of carry forward tax losses, once those losses are utilised, it is my intention for PMP to return to its days as a yield investment, delivering an above market return.

As I look around the Group, all the critical elements required to deliver this outcome are already in place.

We have well invested physical assets in the right locations and sound systems and processes. Our sales force will be aligned with our customers. The transformation forged a national sales approach for national clients, regional sales teams for local clients and the ability to add value from across the business.

My safety philosophy is that every

accident can be prevented and every

employee should go home safe.

We are therefore aiming to create

a zero-harm organisation – a goal

I intend to pursue relentlessly.

To this end, in the final quarter, PMP

conducted a safety audit across

the whole organisation. While there

is clearly work to be done,

the results were promising.

Safety is now PMP’s single most

important value, at the top of both the

Executive and Board agendas. We

have new processes and disciplines

in place and we are working on

cultural change. As an organisation,

we need to be prepared to stop a

process that’s unsafe, regardless

of the economics of the decision.

Ultimately, people are more important.

CEO’S REVIEW

CEO’s Review | PMP Annual Report 2009 | 11 10 | PMP Annual Report 2009 | CEO’s Review

Safety We make the safety and security of our staff of paramount importance.

Reliability We deliver on our promises, accept responsibility and are measured against our performance.

Leadership We have the courage to promote and embrace innovative and visionary thinking in media services.

Honesty We do not compromise our high ethical standards, mislead others or hide from our responsibilities.

Teamwork We have a “One Team” ethos, working as integral partners with each other and our clients.

Professionalism We strive to deliver excellence that exceeds the expectations of our stakeholders every day.

The Group’s ability to support a marketing campaign from creative to fulfilment is a true differentiator, which we will take further advantage of in the coming year. Already, many clients are beginning to appreciate the value we can add through our national photography studios.

Most important of all, we have a highly experienced and dedicated workforce with outstanding capabilities and passion for the business, who have already shown excellent teaming as the transformation plan has rolled out.

I believe PMP’s resilience is largely due to the maturity of our workforce. When I took on this role, I was surprised to discover that there were over 250 people with more than 25 years service in the business. The experience, capability and commitment this represents is invaluable. In the year ahead, I will be creating service awards and a 25 Year Club, offering lifetime membership to those employees who

The Group’s ability to support a marketing

campaign from creative to fulfilment is a

true differentiator, which we will take

further advantage of in the coming year

have spent such a considerable amount of their careers at PMP. This Club will also be an important resource for me to discuss issues with people who understand what makes this business tick.

I would like to thank the new executive leadership team for developing and investing in the transformation plan. I’m excited about what the future holds and confident we have the right team to create a company we will all be proud of.

I would also like to acknowledge what a tough year it’s been for our employees, and to thank them for working through the difficult times and committing to being there for the future. My commitment in return is that I will be there with them until, together, we can enjoy the fruits of success.

If I were to be judged by just one objective during my tenure as CEO at PMP, it would be that every employee

could say, “I enjoy working for this company”. The best results are achieved when people are highly motivated. I look forward to supporting the outstanding team we have assembled in doing what they do best and to making PMP a company where people are excited about coming to work.

When you harness that sort of passion, you create real value for everyone: shareholders, clients and employees.

One of the Executive Leadership Team’s first tasks

was to form PMP’s strategic intent and articulate

the values by which we will make decisions.

In the coming year, our strategic intent is to:

In pursuing this goal, we will uphold the values of:

To view our values in full, visit www.pmplimited.com.au

Richard Allely Chief Executive Officer and Managing Director

Focus on the CoreFocus on the printing and distribution businesses across key product lines.

Return to Customer CentricityFocus on the customer, align go-to-market approach with customer needs and

define the client engagement model (national, regional and across business units).

Adopt a Low Cost Operating ModelEliminate excess capacity and complexity, establish mostly

specialist facilities, reduce overhead and support costs.

PRINT

PMP is Australia’s only national

printer, with the ability to

bundle print and distribution

offerings to retail customers

Print had a disappointing year, in which the heatset business, in particular, suffered greatly from the national economic downturn. While volumes were well up in the first half of the financial year, they declined sharply in the second half, especially in the final quarter. As a result, across the board, Print Australia achieved volumes of 300,000 converted tonnes, or 236,000 converted tonnes excluding directories printing and Griffin Press, slightly down on the previous year.

However, the real issue was pricing. As paginations dried up and retailers became more cautious with their advertising spend, the industry developed spare capacity, which affected pricing behaviour. With the volume mix changing to include a larger percentage of low value work – and in the face of a largely fixed cost base – margins inevitably suffered.

The ensuing EBIT result was therefore substantially below that of the prior financial year.

We responded to this poor result with a number of restructuring and cost reduction initiatives, including removing layers of management and streamlining procedures. By year end, these measures had taken $26 million out of our cost base. Print’s cost structure is now

appropriate for the new size and shape of the market and will allow the business to both survive the current economic conditions and to prosper when they improve.

The restructure also gave us an opportunity to better align the business with the requirements of our customers. By year end, we had addressed supply chain management, sales force management and manufacturing excellence issues.

These initiatives have been overseen by a rejuvenated and highly experienced management team, some of whom are returning to PMP after long and distinguished careers with the business. This new team has been given clear accountability for delivering both sales targets and on time, on budget production and is already rising to the challenge admirably.

Perhaps most important of all, the returning managers bring new energy and a positive, can-do attitude into a business that has had to come to terms with major changes and significant redundancies.

Under their leadership, Print enters the new financial year in a far stronger position to deal with the ongoing tough economic conditions. With costs now under control, we will be able to reap the competitive advantages of a fleet of modern equipment, Australia’s only national print footprint and the opportunity to bundle print and distribution offerings to retail customers.

We are also confident about the future of our smaller, specialist businesses, which turned in promising results, despite the difficult market.

Griffin Press put in a strong performance in 2008/09 ahead of both budget and the prior year’s results, on the back of print contracts for two block buster novels. The directories printing business also had a solid year, with earnings in line with budget.

We look forward to a stable and focused 2010.

Peter George Executive General Manager

Print Australia

PMP Annual Report 2009 | Operations Report | Print | 13 12 | PMP Annual Report 2009 | Operations Report | Print

OPERATIONS REPORT

Converted Tonnes (000s) – Australia and New Zealand

2007

2006

2005

2004

2008

2009

308

293

292

249

355

351

OPERATIONS REPORTPMP LETTERBOX DISTRIBUTION

PMP delivered 2.8 billion items

to 6.6 million Australian homes.

For major retailers, catalogues can

generate up to 40% of retail sales.

Andrew Williams Executive General Manager

Distribution

Fiscal 2009 was a low point for PMP’s letterbox distribution business, with significant customer service issues. Early in the financial year an issue arose regarding incorrect information on customer service being reported to some customers. The Board took control of this issue and reported the matter to the ACCC. An external legal advisor managed the issue internally and externally with the ACCC, and the matter has now been resolved with PMP Distribution providing an undertaking to the ACCC.

As a result of the ensuing adverse publicity, the business faced a marked reduction in market share. During the year, PMP delivered 2.828 billion items to 6.603 million homes, a 2.5% and 0.4% respective decline on the previous year.

While this is extremely disappointing, for shareholders and employees alike, letterbox distribution remains a fundamentally sound business, with a vibrant market that makes a massive contribution to the Australian economy. Our nation has a unique tradition of household letterbox distribution, which far outstrips other media options in cost effectiveness and popularity with both retailers and consumers.

In Australia, catalogue advertising is retailers’ first choice as a print advertising medium, with the Australian Catalogue

Association estimating that, for major retailers, catalogues can generate up to 40% of retail sales. At the same time, catalogues are consumers’ leading source of information about groceries, with 87% of Australians looking forward to receiving catalogues and more than two people per household regularly reading and using catalogues for purchasing decisions.

Today, PMP holds about 30% of this important market, which has grown steadily over the last decade. Our job in the coming year is to get back to basics: to start to restore customer confidence through personal integrity and operational excellence, and to manage the business for performance and growth.

While there are no band-aid solutions, we know what we have to do and we are determined to restore the letterbox business to the profitable and successful operation it once was.

After just one month back at the helm, I can already see enormous progress and a turnaround in culture. I look forward to reporting solid bottom line improvement to shareholders in fiscal 2010.

PMP Annual Report 2009 | Operations Report | Letterbox Distribution | 15 14 | PMP Annual Report 2009 | Operations Report | Letterbox Distribution

OPERATIONS REPORTGORDON AND GOTCH / SCRIBO GROUP

Gordon and Gotch is the largest independent

magazine and book distributor

Craig Davison Executive General Manager

Gordon and Gotch and Scribo Group

Despite the difficult economic conditions and the declining magazine industry, Gordon and Gotch held its own in the market. The business was assisted by the bounce-back in consumer confidence in the second half of the year, resulting from the Federal Government’s fiscal stimulus package. However, the advertising market remained depressed, with pagination dropping. Considering these conditions, the business did well to keep revenues and volumes relatively strong.

In September 2008, Gordon and Gotch returned to the book distribution market as part of its medium-term growth strategy, acquiring 100% of The Scribo Group Pty Limited. Scribo, which was formed following the merger of leading independent book distributors Tower, Gary Allen, Brumby and Bookwise, is Australasia’s largest independent book distribution and wholesale company with offices in Sydney, Melbourne and Adelaide.

During the year, we made excellent progress in integrating these four distribution businesses into one highly efficient operation, with the implementation costs coming in just under budget. Earnings were supported by efficiency initiatives, which included halving the number of warehouses and consolidating IT systems onto one platform. Sales efficiency also continued to be a priority, with progress in reducing returns.

The acquisition introduces a new set of retailers to the Gordon and Gotch network and increases our product range and provides a steady, $50 million revenue stream, which will help to smooth out the cyclic nature of the

magazine distribution business. From Scribo’s perspective, as part of the PMP Group, the business will receive the financial resources and support to build on its position as Australia’s premier independent book distribution company. Looking ahead, we see substantial potential to improve Scribo’s service offering and leverage its extensive stock list and relationships with more than 500 publisher clients from all over the world.

Gordon and Gotch Australia

• 42%unitshare,40%dollarshare

• 350publishingclients

• 173millionunitsdistributed

• 3,000titles

• 9,000retailoutlets

• 15,000sub-agents

Gordon and Gotch New Zealand

• 51%unitshare,42%dollarsharein supermarkets (Total Magazines)

• 165publishingclients

• 45millionunitsdistributed

• 6,000retailoutlets

PMP Annual Report 2009 | Operations Report | Gordon and Gotch | 17 16 | PMP Annual Report 2009 | Operations Report | Gordon and Gotch

OPERATIONS REPORTNEW ZEALAND

Despite downturns in advertising and

consumer spending, both Print and

Gordon and Gotch gained market

share, albeit in declining markets

Fiscal 2009 was a recessionary year for New Zealand, with a significant downturn in advertising and consumer spending, which inevitably took its toll on the financial results of PMP NZ.

However, both Print and Gordon and Gotch gained market share, albeit in declining markets, demonstrating the fundamental soundness of these businesses. We were also successful in protecting ourselves from much of the margin impact of the downturn through successful currency risk mitigation strategies.

The biggest factor in earnings decline came from falling property publication sector revenues, which hit all time lows due to the stalled property market. Property publication revenues affect 90% of the Maxum business – which produces a range of media for the real estate industry. At the same time, publishing circulations were down 6% year on year in volume terms, and magazine paginations also reduced significantly on the back of a 25-30% decline in advertising levels.

Against this backdrop, we were heartened that PMP Print’s revenues and volumes fell by 2% and 5% respectively in a market that declined by 8-10% in volume. During the year, the company increased its market share by winning a number of new magazine launches, including: Lucky Break, ACP; Women’s Health, Pacific Magazines; Your Weekend and Real, Fairfax Magazines; and Recipes+, KnockOut Media. These wins, together with retaining key customers, including a renewed agreement to print SkyWatch, the country’s biggest magazine, has consolidated Print’s position as market leader in the web sector.

Print’s market leadership was reflected in New Zealand’s annual Pride in Print awards, where PMP won three gold medals and received three highly commended awards, with PMP Print the overall winner for the Web Offset category.

During the year, we relocated some in-line finishing equipment from Australia released by the Group’s

restructure, giving us efficiency benefits with minimal capital outlay. As a result of a review of our operations we closed a local press and other equipment, which will deliver significant savings for fiscal 2010.

In Distribution and Gordon and Gotch, we integrated our distribution hub between letterbox delivery and Gordon and Gotch, improving operational efficiencies and helping to offset the affect of increasing freight costs through our network.

Pleasingly, in a declining magazine market, Gordon and Gotch continued to grow its market share and boost its reputation, successfully launching Women’s Health for Pacific Magazines and Recipes+ for KnockOut Media and retaining the COMAG UK business.

PMP Micromarketing delivered a disappointing result as customers scaled back on their marketing investment and deferred many projects until the economic conditions improve.

Where possible, we also focused on retaining talent through this difficult time, with initiatives such as reducing accrued annual leave and minimising overtime, which allowed us to reduce labour costs. However we were unable to avoid some restructuring of our labour force which resulted in the number of employees being reduced by 12%, predominantly in the web printing and Maxum businesses.

Looking ahead, we expect the web and sheetfed Print businesses and Maxum to continue to face the risk of a soft market and margin pressure. Even when the property market begins to strengthen, it will be a while before there is sufficient supply to boost publication advertising, and the outlook for the publishing sector remains cautious. However, despite the difficult business climate, there remain opportunities to improve our market positions in the Distribution and Gordon and Gotch businesses.

Peter Browne Executive General Manager

PMP (NZ) Limited

PMP Annual Report 2009 | Operations Report | New Zealand | 19 18 | PMP Annual Report 2009 | Operations Report | New Zealand

OPERATIONS REPORTPACIFIC MICROMARKETING / PMP DIGITAL

Graham PlantExecutive General Manager

Pacific Micromarketing and PMP Digital

Dimension Studios provide

leading edge creative

photography and retouching for

national advertising campaigns

Pacific MicromarketingDespite the challenging economic conditions, Pacific Micromarketing’s performance was only slightly down on last year, with tight financial management leading to a reasonable EBIT result. As clients reduced their marketing spend, revenue from list sales, rentals and licences fell. However, this was partly offset by increased demand for consumer insights and analytics, with strong support for our Mosaic segmentation solution.

We also saw good growth in the number of consumers participating in our new BrandLeaders™ consumer loyalty program, which collects lifestyle data online. BrandLeaders™ augments our traditional approach to collecting data, enriching our analytics modelling and providing retail clients with new customer insights.

The increasing trend for companies wanting to gain better insight into consumer buyer behaviours creates important opportunities for Pacific Micromarketing, particularly in the consulting and analytics space. During the year, we developed a Customer Relationship Management (CRM) solution, in partnership with Monash University, to complement our analytics services. The new solution, launched at the Australian Direct Marketing Association Forum in July 2009, will help our clients to understand and better manage customer data and maximise their return on investment in CRM solutions.

August 2009 also saw the launch of a strong, online presence for Pacific Micromarketing, enabling clients to buy and transact services via the web. This new web-based channel has an attractive cost structure and the potential to open up new markets, particularly in the fast growing small and medium enterprise segment.

During the year, Pacific Micromarketing continued to be fully compliant with the increasing regulatory requirements around collecting and accessing consumer data. We believe compliance issues will form a barrier to entry to the growing data management, list sales and rental market, helping to protect our market share.

PMP Digital and Dimension StudiosBacked by strong support from existing premedia clients, PMP Digital returned a pleasing financial result, ahead of budget. While revenue was slightly down, tight financial controls, and the economies of scale created across our two sites in Lane Cove and Port Melbourne, preserved the EBIT result. We also re-signed long-term contracts with a number of major clients, setting the business up for the next financial year.

Recognising the pressure facing the premedia market, during the year we worked to increase the value of the PMP Digital service by linking it with the creative services – photography, retouching, 3D imagery – offered by Dimension Studios.

We also continued to build the Dimension Studios brand, which provides innovative and comprehensive photography and retouching services to the Australian market. This included expanding our presence in the high-end retail, advertising and fashion photography sector and launching a Computer-Generated Imagery (CGI) service, which has already attracted strong interest from clients.

Responding to our clients’ focus on cost cutting, in March 2009, PMP Digital entered into a strategic alliance with Nexus IT with a view to taking costs out of the creative production cycle. Under the partnership, clients can leverage best-of-breed advertising, marketing and media automation technologies and selective sourcing to execute high-performing campaigns on a reduced budget.

At a time when marketing budgets are being slashed, this strategic alliance creates the opportunity for organisations to access the most cost-effective method of marketing promotion available in Australia and New Zealand.

PMP Annual Report 2009 | Operations Report | PMP Digital / Pacific Micromarketing | 21 20 | PMP Annual Report 2009 | Operations Report | PMP Digital / Pacific Micromarketing

PRODUCTS & SERVICES

PRINTINGMARKETING SERVICES

PHOTOGRAPHY AND PREMEDIA NEW ZEALAND

MAGAZINE AND BOOK DISTRIBUTION

LETTERBOX DISTRIBUTION

PRoduCts And seRviCes•Magazines

•Catalogues

•Directories

•Books

•Financialdocuments

•Corporatedocuments

•Governmentmaterial

•Newspapers

MARket•Corporate

•Financialservices

•Government

•International&localbookpublishers

•Marketing,advertising& media buying agencies

•Newspaper,magazine& directory publishers

•Retail

oveRview•Themarketleaderwithplants

across Australia and New Zealand

PRoduCts And seRviCes•Targeteddelivery

•Addresseddelivery

•Newspaperdelivery

•Productsampledelivery

MARket•Advertisingagencies&mediabuyers

•Corporate

•Directmarketing

•Fastmovingconsumergoods

•Government

•Mailhouses

•Manufacturers

•Newspapers&magazinepublishers

•Retail

oveRview•Oneofthetwomarketleadersin

nationwide letterbox distribution

PRoduCts And seRviCes•Marketknowledge&experience

•Establishedretailrelationships

•Sales&marketanalysis

•Nationalmerchandisingsolutions

•Range&displaymanagement

•Distributionsolutionstomultiple retail channels including newsagents, grocery chain, petrol/convenience and specialty outlets

MARket•Mailhouse(NZ)

•Domesticpublishers

•Internationalpublishers

•Diverseproductclients

oveRview•Thelargestindependentdistributor

of magazines and books

PRoduCts And seRviCes•Directmarketinglistsaleandrental

•DatabaseServices

•BrandLeaders–lifestyleinsights

•Geodemographicdataandsolutions

•CRMandloyaltystrategies

MARket•Directmarketing

•Telecommunications

•Utilities

•FinancialServices

•Fundraising

•Retail

•Publishing

•Government

•FastMovingConsumerGoods

oveRview•Strategicinsightsfromtransactional

and customer information, which optimise customer value and profitability

•Intelligentmicromarketing solutions to improve clients’ marketing effectiveness

•AustraliaandNZ’sleadingconsumerdatabase marketing services and consumer data

•OneofAustralasia’slargestlifestyle and demographic data sources

PRoduCts & seRviCesPMP diGitAL•Premediaservices

•DigitalAssetmanagement

•ImageLibraries

•Managedonsitestudios

•Consulting&professionalservices

diMension studios•Photographicservices

•CreativeServices

MARket•Retail

•AdvertisingAgencies


•Government

•Corporate

•Packaging

•Publishers

oveRview•Marketleaderinpremediasolutions

•Delivercompetitiveedgeto organisations by providing premedia workflows that automate production for advertising, marketing, communications images and media

•Australasia’slargest photography studios

•Combinesprojectmanagement and creative services for exchange-to-exchange advertising and marketing media.

•CoverageacrossAustralia &NewZealand

PRoduCts And seRviCes•Printing

•Targeteddelivery

•Newspaperdelivery

•Productsampledelivery

•Magazinemerchandisingsolutions

•Magazinechannelmanagement

•Magazinesubscriptionsmanagement

•Customerinsightsandanalytics

•Customeracquisition

MARket•Retail

•Advertisingagencies

•LocalMagazineandNewspaperpublishers


•Utilities

•Financialservices

oveRview•Theonlyindependent

Magazine distributor

•OneofAustralasia’slargestlifestyle and demographic data sources.

PMP Annual Report 2009 | Products and Services | 23 22 | PMP Annual Report 2009 | Products and Services

24 | PMP Annual Report 2009 | Directors’ Biographies

Mr Reaney’s business experience

spans more than 30 years during

which time he has held a number

of senior corporate

appointments, including

Managing Director of National

Foods Limited and Managing

Director and Operations Director

of Industrial Equity Limited.

Mr Reaney is also a Director of

AGL Energy Limited and

Westpac Banking Corporation.

Mr Reaney was a Director of

St George Bank Ltd November

1996 to November 2008, So

Natural Foods Limited February

2001 to October 2006 and The

Australian Gas Light Company

1988 to October 2006.

Graham J Reaney B Com, CPA

Chairman

Appointed 13.09.02

Age 66

Mr Allely has been Chief

Executive Officer of PMP Limited

since the start of April 2009,

having been Acting CEO since

28 January 2009. Prior to this

appointment Mr Allely was Chief

Financial Officer (appointed in

2002), with the additional

responsibilities of Company

Secretary since July 2008.

Mr Allely has over 30 years

experience in senior

management roles with leading

companies, including Tenix Pty

Limited (formerly Transfield Pty

Limited), John Fairfax Holdings

Limited, Boral Limited, James

Hardie Industries Limited and

Fanner PLP Pty Limited.

Mr Allely is a past Director of

John Fairfax Publications Pty Ltd

(publisher of The Sydney Morning

Herald and the Australian

Financial Review) and past

Chairman of Australian Property

Monitors Pty Ltd and he holds an

advisory position with the

Workcover Authority of

NSW – Audit Committee.

Richard Allely DipCM, MBA, CPA, FCIS, FAICD

CEO and Managing Director

Appointed 07.04.09

Age 55

Mr George is an experienced

Executive and Non-Executive

Director with an extensive

background in

telecommunications, media and

corporate finance including four

years on the Board of Australia’s

second largest

telecommunications carrier,

Optus Communications.

Mr George is currently also

a Non-Executive Director of

Asciano Limited.

He was also Executive Director,

Strategy and Policy Development

Cable and Wireless Optus Ltd

from 1998 to 2001, Non-

Executive Director of PMP

Limited December 2002 to

July 2009, Managing Director

of B Digital January 2004 to

November 2005 and the

Executive Chairman of Nylex

Limited January 2006 to

November 2008.

Peter George B Com, LLB

Executive Director

Appointed 19.12.02

Age 56

PMP Annual Report 2009 | Directors’ Biographies | 25

Ms Griffin is a TEC Chair, is on

the Advisory Board of a private

equity group and is a Director of

Griffin+Row. Ms Griffin is the

author of a business biography

“High Heeled Success” published

in 1998 and was the Telstra

VictorianBusinesswomanof

the Year in 1995.

Ms Griffin was the former CEO

of Pola Cosmetics in Australia

and New Zealand. Ms Griffin

has been on a diverse range of

Boards over the last ten years

ranging from Melbourne Storm

toTourismVictoria.

She is a contributor to the

online business magazine

www.smartcompany.com.au.

Marcia Griffin BA, Dip Ed, B Com GAICD

Non-Executive Director

Appointed 16.2.99

Age 62

Mr Fraser qualified as an

accountant but gained significant

operational experience in

positions such as MD of Pioneer

Sugar Mills Limited, MD Clyde

Industries Limited, MD Australia

Chemical Holdings Limited and

MD TNT Australia Pty Limited.

Mr Fraser also has substantial

international experience having

worked and lived in South East

Asia and the United States.

He is currently the Non-Executive

Chairman of Forest Place Group

Limited. He is also a Non-

Executive Director of Structural

Systems Limited, Wattyl Limited

and Legend Corporation Limited.

Mr Fraser was previously a

Director of B Digital Limited (May

2006 to December 2006),

Occupational and Medical

Innovations Limited (November

2004 to January 2007),

Promentum Limited (January

2005 to April 2007), Lighting

Corporation Limited (June 2006

to January 2008) and Nylex

Limited (January 2007 to

November 2008).

Ian L Fraser FCPA, FAICD


Appointed 04.04.03

Age 64

Dató Ng Jui Sia is the Chief

Executive Officer and Director

of the Singapore based Fraser

&NeaveGroupCompany-

Times Publishing Limited.

Times Publishing Limited is

Singapore’s largest printing and

publishing company. Dató Ng Jui

Sia has held financial and general

management roles in businesses

operating across the US, UK,

Singapore, Hong Kong, China,

Indonesia and Malaysia. He

joinedFraser&Neave(F&N)in

September 1995 and held the

positionofGeneralManagerF&N

Coca-Cola in Singapore and then

Malaysia until 2006 when he was

appointed to his current position.

He is a Non-Executive Director of

a number of subsidiaries of the

F&NGroup.

Mr Bickford-Smith was CEO of

Ridley Corporation Limited until

Dec 2007. He was previously

with the Man Group and was MD

of the Australian operations.

Before moving to Australia Mr

Bickford-Smith was based in

Hong Kong with responsibility for

managing risk relating to the Man

Group’s sugar business within

the region. He joined the Man

Group in 1981 as Manager of

business development for the

sugar division where he gained

experience assessing business

opportunities in SE Asia, South

America and Eastern Europe.

Before moving to the Man Group

he spent five years with Phibro

the commodity trading arm of

Salomon Brothers.

Mr Bickford-Smith is a Director of

Eastern Agriculture Australia and

The Julain Burton Burns Trust.

Mr Bickford-Smith was previously

Managing Director of Ridley

Corporation Limited November

2000 to December 2007, and

a Director of Reclaim Industries

Limited December 2008 to

April 2009.

Dató Ng Jui Sia BBA, ACA


Appointed 29.11.07

Age 57

Matthew Bickford-Smith


Appointed 20.07.09

Age 49

DIRECTORS’ BIOGRAPHIES

PMP has maintained a strong awareness and fi rm commitment to its impact on the environment. As early as 1991, PMP has sought

to address this impact by its board membership of the Publishers National Environmental Bureau, and this commitment has since

branched out over the past decade to include further sustainability milestones for the Group in the form of accreditation, investment

and achievements such as:

• Reporting under the Government’s NPI (National Pollutant Inventory) since 2000;

• Achieving fi nalist status in Sydney Water’s 2006 ‘Water Conservation’ Awards for its Moorebank site;

• Forest Stewardship Council (FSC) accreditation at its Clayton and Salisbury print sites in 2007 which supports sustainable

forestry; and

• PMP Board approving a 3 year Energy and Water Effi ciency Programme in 2007.

PMP’s recent achievements have been:

• Joint FSC and PEFC accreditation at our print sites at Clayton, Moorebank, Salisbury & Wacol;

• ISO 14001 accreditation at Salisbury; and

• 6% reduction in overall carbon emissions in FY09 and a further 6% reduction in carbon emissions intensity.

PMP’s environmental initiatives and programmes are driven by the four key pillars of its sustainability policy – reduce, re-use, recycle

and then replace. With growing government, public, and stakeholder awareness on issues encompassing the environment, PMP

acknowledges its responsibility to remain transparent on the current and emerging exposures that the company faces.

PMP have identifi ed the key risks and opportunities and have devised strategic programmes in response to these exposures. These

programmes have been depicted in the form of a tree with each programme being represented by branches. The overall purpose is

to provide a framework or reference point for the current issues and initiatives applicable to PMP at the time of reporting.

In compiling this report, the Global Reporting Initiative Framework for Sustainability Reporting has been applied in collecting data

and information for the report.

Review of Printing Processes - Key Risks & OpportunitiesKey Risks:

• High reliance on paper;

• Electricity and gas use;

• Carbon emissions arising from the ignition of ink vapours from heat-set printing operations; and

• Transport through the distribution process of fi nished product and inputs.

Key Opportunities:

• Cost savings due to improvement in energy and water effi ciency;

• Productivity improvements;

• Potential positive changes in suppliers due to full life cycle carbon emission reviews; and

• A wider product offering in the form of environmentally-driven products.

SUSTAINABILITY AT PMP

26 | PMP Annual Report 2009 | Sustainability Report

PRINTING PROCESS REVIEW

Blanket Wash, Fountain Solutions, Water

TransportFuel Aluminium Plates

VOCs(Volatile Organic Compounds)

TransportFuel

PAPER C M Y K HEAT SET WEB PRESS BINDERY FINISHED PRODUCT

Waste

Staples, Glue, StrapsGasInk

Electricity

The PMP sustainability tree was created to formally convey the initiatives and programmes undertaken by PMP in

response to the current and emerging environmental issues identifi ed within the reporting period.

PMP’s long term objective is to “grow” this tree as we seek to address the environmental and sustainability

issues relevant to our businesses. The initiatives and programmes are represented by the branches of the tree.

The branch framework provides our stakeholders with a reference point of our activities together with the

progress, performance and achievements resulting from these activities.

Sustainability Report | PMP Annual Report 2009 | 27

PMP’s 12 Branch InitiativesPMP achieves its leadership objective in sustainability through the following

programmes:

1. Energy and Water Effi ciency Programmes

PMP has continually reviewed its consumption of energy and water. As part of

an annual review process, the PMP Board in 2007 approved a 3 year investment

plan in energy and water effi ciency projects. Projects that have been installed or

equipment due for delivery amounts to 85% of this 3 year plan. The remaining

projects are currently being reviewed by management.

A new regenerative thermal oxidiser at PMP’s print site at Clayton was installed in

November 2008 and a reconstructed after-burner at Bibra Lake in October 2008.

An afterburner ignites the ink vapours from the printing process and collects

the residue in solid form which is disposed to landfi ll. Electricity consumption

is reduced as well as gas. Other projects that have been initiated or completed

are as follows:

• Quick bake ovens;

• Compressor upgrades;

• Power correction factor upgrades;

• Lighting upgrades;

• Upgraded metering programme; and

• Rainwater and storm water catchment programmes.

2. Carbon Footprint

A high proportion of PMP’s carbon footprint is attributable to its printing business

(> 97%). PMP is now working on extending the greenhouse gas inventory to

include the emissions associated with its other major subsidiaries. PMP has used

the services of Perenia Carbon Australia Pty Ltd (previously SMEC) to build its

carbon emission inventory over the past 3 fi nancial years for its Print divisions.

The scope of the carbon inventory included verifi cation of all Scope 1 and Scope

2 emissions and selected Scope 3 emissions including taxis, LPG, waste and

indirect electricity.

Greenhouse gas emissions (kilotonnes of Equivalent Carbon Dioxide “CO2-e”)

PMP AUS PMP AUS PMP NZ PMP NZFY 07/08 FY 08/09 FY 07/08 FY 08/09

Scope 1 29 25 8 8

Scope 2 105 101 4 3

Scope 3 26 22 2 2

Gas and electricity contribute 92% of scope 1 and scope 2 greenhouse gas

emissions. Scope 1 emissions from ink VOCs increases this to 98%.

PMP’s largest carbon footprint site is Moorebank with scope 1 emissions of 9.8

kilotonnes CO2-e. This is below the current facility threshold of 25 kilotonnes

CO2-e in the draft legislation of the Federal Government’s proposed Carbon

Pollution Reduction Scheme. Therefore, under current requirements, PMP will not

be required to join the fi rst round of the carbon pollution reduction scheme which

is planned to commence in July 2011.

PMP’s scope 1 and 2 emissions from its Australian sites is 126.6 kt CO2-e which

exceeds the threshold of 125 kt CO2-e under the National Greenhouse and

Energy Reporting (NGER) Act, 2007 for the 2008/09 reporting year. In addition,

PMP’s energy consumption from its Australian sites is 0.7 PJ which exceeds the

threshold of 0.5 PJ for reporting under the NGER Act. PMP will formally monitor

its greenhouse gas emissions and energy consumption under the NGER Act

annually. PMP is using greenhouse gas intensity as a way of monitoring changes

in emissions as the business grows.

PMP is using external consultants to assist in completing a life cycle analysis on

certain printing jobs. Together with information being collected by PMP’s suppliers,

an additional program of work is to provide carbon invoicing to certain customers.

3. Environmental Accreditation

The accreditation programmes focus mainly on FSC/PEFC accreditation and

ISO14001 accreditation. The completed projects and projected rollout of these

accreditation programmes are as follows:

• FSC accredited in July 2007 at Clayton and Salisbury printing sites;

• FSC & PEFC accreditation at Clayton, Salisbury and Moorebank Aug 08;

• FSC & PEFC accreditation at Wacol March 09;

• Salisbury ISO 14001 accreditation May 09;

• FSC & PEFC accreditation at Bibra Lake December 09; and

• Clayton & Moorebank ISO14001 accreditation June 10.

4. Renewable Energy

PMP’s electricity consumption at all major heat-set print sites in NZ have been

purchased since FY08 from a supplier who uses 100% renewable resources with

the majority being hydro and approximately 5% wind power. This supplier is the

fi rst company in New Zealand to achieve carboNZero cert TM certifi cation of the

retail and generation of electricity.

Gordon and Gotch Australia has purchased approximately 50% of its electricity

consumption from renewable sources. PMP Print is working with one of its major

suppliers to purchase 100% renewable energy for one of the print sites.

5. Offset Transactions

PMP Australia has paid for the planting of trees from Greenfl eet Australia in order

to offset its emissions from its company car emissions. PMP is developing a

number of programmes for customers to share in the planting of new trees for

its print activities.

PMP has also purchased carbon offsets relating to a landfi ll project in NSW

and a national project relating to electricity and water effi ciency projects in

NSW. PMP is currently reviewing carbon projects in renewable energy and

avoided deforestation.

6. Recycling

PMP’s recycling activities continue to provide a net revenue stream for the

company. PMP has actively sought out the best-fi t partner for removal of its

waste by detailed examination of the supplier’s disposal process and ensuring

the disposal activities involve the most recycling possible of the waste product.

An example of this strategy is the public announcement in June 09 of the joint

venture between PMP’s Griffi n Press and the Hilton Hotel in Adelaide whereby

the paper dust from Griffi n’s book printing operation has been combined with the

food waste from the Hilton’s kitchens to provide a binding mulch which is applied

to the base of some of South Australia’s vineyards.

7. Research & Development

PMP has progressed a number of programmes to a mature stage of development

which contribute to positive sustainability outcomes as well as production

improvements. A portion of these projects are managed by our Technical

Services Department which has delivered on improvements in a number of our

major inputs, thereby reducing carbon emission impacts. The balance is driven

by the business units together with Corporate with two major projects identifi ed

at our main print sites which will deliver improvements on working conditions

for employees as well as carbon emissions and water.

8. Environmental Reporting

PMP’s reporting obligations are:

• National Pollutants Inventory (NPI) reporting since 2000;

• EEOP reporting since Dec 2007;

• International Carbon Disclosure Project Report reporting since May 2008;

• NGER’s reporting from 1st July 2008;

• In the event that Government minimum thresholds change at the last

moment, preparation to join carbon pollution reduction scheme in July 2011

(although under current minimum threshold criteria, PMP will be required to

join subsequent rounds); and

• The Victorian energy reporting programme, EREP, and the NSW programme,

EGAS.

9. Employee, Customer and Government Awareness

Programmes

PMP has continued to update its intranet website which has provided its

employees with factual information on sustainability together with research links

to valuable sites. It has also provided employees with a business and personal

checklist to assist them in their evaluation of their impact on the environment

and ways in which they can make a positive contribution not only at work but also

at home. The website also describes the programmes and initiatives that PMP is

pursuing in which they can participate.

PMP is using its membership and representation at the PNEB, the PIAA (Printing

Industries Association of Australia) and the ACA (Australian Catalogue Association)

in order to ensure the federal and state governments receive a fair and reasonable

understanding of the printing industry’s activities and initiatives in sustainability.

The ACA is a member of the Sustainable Print Alliance which dispels a number

of myths on the sustainability of paper and its attributes when compared to the

internet. The research can be reviewed on http://www.sustainableprint.net.au.

28 | PMP Annual Report 2009 | Sustainability Report

10. Supply Chain Initiatives

PMP has sought from its suppliers a greater level of information on energy use

and carbon footprint in order to supply to our customers detailed information

on sustainability aspects of PMP’s business. PMP has recently sent specifi cation

profi les to its suppliers which will enable greater accuracy in PMP’s life cycle

analyses.

PMP also seeks information on suppliers’ sustainability programmes in order to

assess how their developments will affect PMP’s carbon footprint.

PMP is now including carbon emission costing in its tender evaluation process

with its suppliers. It also requests carbon footprint invoicing be provided in its

supplier tenders.

11. Information Technology Initiatives

PMP Information Services has a number of programs in place under its “Strategic

Green IT Initiatives” to actively reduce PMP’s environmental footprint through

power saving and recycling initiatives designed to limit carbon emissions.

Initiatives completed included recycling of 460 kilograms of redundant back up

tapes through Sims Metals, 40 kilograms of mobile phones & accessories through

the “Mobile Muster” program and 40 physical servers recycled through Dell.

PMP IS have also invested in Blade Chassis Technologies with reduced power

consumption and server rack density, along with signifi cant “Virtualisation” of

PMP server infrastructure (around 45% to date) reducing power consumption by

an estimated 310 MWh per year initially.

The centralised implementation of desktop and laptop power management

policies, including the turning off monitors, hard drives and imposing “system

standby” for inactivity triggers, is estimated to reduce the everyday Laptop &

Desktop power consumption by 524 MWh annually.

Further “Virtualisation”, rationalisation & consolidation, will see PMP reach targets

of 70% Intel virtual server hardware by 2010.

12. Targets

PMP’s Board approved a carbon intensity reduction target of 15% by end of

2010/11 fi nancial year using the 2006/07 performance as the baseline for Scope

1 & 2 emissions. (Carbon intensity is defi ned as carbon emissions per tonne of

printed product). PMP has achieved an 11% reduction up to end of June 09. This

reduction target will reduce PMP’s exposure to future carbon costs together with

the impact of higher energy prices.

Historical PerformanceThe performance of PMP Print Australia and PMP Print NZ’s Scope 1 and Scope

2 emissions are displayed in the following chart which shows reductions over

the 6 year period.

PMP Print Group CO2-e emissions - Aust & NZScope 1 & 2 Carbon Emissions for PMP Print Group

This diagram has been compiled using the NPI reports that PMP has submitted since 2000 and

the Perenia Carbon inventory reports for 06/07, 07/08 and 08/09.

The improvements between FY07/08 and FY08/09 are largely due to gas

consumption per tonne of product falling by 7% and electricity falling by 5% per

tonne of product. This translates to a reduction in carbon emission of 6% per tonne

of product. Therefore, PMP has achieved a 11% reduction in its carbon emissions

intensity since July 07 – well on its way to its target of 15% by June 2011.

The bulk of the emissions from PMP’s print divisions in Australia and

New Zealand are due to electricity and natural gas consumption. The main capital

expenditure is focused on effi ciencies in these areas of consumption as well as

ink VOC’s.

Natural gas and ink VOC’s emissions are attributable to PMP’s heat-set

operations whereas there is minimal gas consumption for its cold-set

printing operations (Directories, books and sheetfed) which require no baking

of the inks. The following chart displays the Scope 1 and Scope 2 emission

components for FY08 & FY09.

Scope 1 & 2 Carbon Emissions for PMP Group

Customer Product DevelopmentPMP has completed initiatives which enable it to provide its customers a range of

environmentally-driven products:

Level 1: FSC & PEFC accredited paper which involves the verifi cation of the

environmental compliance of the forestry of the paper used in printing.

Level 2: Carbon neutral paper through Australian paper.

Level 3: Carbon offsets for the carbon emissions for both printing and paper.

Level 4: Carbon offsets for the carbon emissions of the full life cycle of the

printed product.

This range of options is presented through PMP’s Green Blueprint marketing

programme.

Alternative Equipment or Alternative Media PMP’s Griffi n Press in South Australia offers short-run book clients the option to

use digital printing, which has a lighter carbon footprint. Also, PMP Distribution

can augment the printed catalogue product with an internet based solution,

“Catalogues4U”.

Selection of Paper Grades for Annual Report PMP required that certain criteria be met when deciding what paper would be

used for its annual report. This decision process highlights the new criteria that

PMP’s customers are evaluating in order to satisfy their readers and advertisers

that an environmentally-driven product has been published. PMP’s criteria were

as follows:

• Support paper suppliers who are striving to achieve the highest sustainability

programmes;

• Insist on FSC or PEFC accredited paper;

• Adopt a level of recycled fi bre usage;

• Use a PMP sheet-fed print operation which consumes minimal gas;

• Align the printing and paper production with operations which use a high level

of renewable energy; and

• Offset all carbon emissions.

After considering many alternatives, PMP has chosen to use Sappi’s “Harvest

Recycled” which is an acid free, double coated, biodegradable, recyclable and

innovative product that uses alternative fi bre in its manufacturing. Harvest

Recycled contains 60% recycled sugar cane fi bre and 40% FSC Chain of Custody

certifi ed pulp.

The paper is manufactured at the Stanger Mill in South Africa as part of their Triple

Green Initiative, which is an initiative which aims to protect natural resources

and promote sustainability. This mill is one of only a few in the world to use

sugar cane as its primary source of pulp. It is an annually renewable resource

and the fi bre derived after sugar extraction is in effect a recycled raw material.

The sugar cane requires less energy to refi ne the cane husks into fi bre form in

readiness for paper making. Also, the sugar cane is sourced close to the mill and

so requires minimum use of transportation, thus a lower amount of greenhouse

gas emissions is produced.

The paper is manufactured under environmental Management System ISO4001,

using Elemental Chlorine Free fi bre sourced from Well Managed Forests and the

end result is an A2 Art Paper suitable for quality printing.

PMP‘s sheetfed printing facility is located in New Zealand at its Maxum plant. This

plant purchases electricity from a supplier which sources its energy from hydro,

geothermal and natural gas.

A full life cycle emissions analysis was carried out on the production of this

annual report. Greenhouse emission offsets through the Greenfl eet programme

have been transacted to offset a conservative 125% of the estimated full life

cycle emissions from the annual report.

Sustainability Report | PMP Annual Report 2009 | 29

03/04 04/05 05/06 06/07 07/08 08/09

459 476435 414 390

17% - 4%9% 5%

6%551

5%

CO2

Kgs

/ Pro

duct

Ton

ne

Financial Year

CO2-e Kgs / Product Tonne

% Decrease (increase)

from the prior year

FY 07/08 FY 08/09Electricity 76.2% 75.8%

Natural Gas 17.1% 16.2%

Ink VOC’s 5.7% 6%

LPG 0.7% 1.2%

Refrigerant 0.2% 0.6%

Petrol/Diesel 0.1% 0.2%

Overview PMPs corporate governance is based on the belief that the creation of value is

intrinsically linked with good governance practices.

The core principles of good corporate governance that PMP has based the

Corporate Governance Framework on are:

• Ethical business conduct;

• Responsible management and remuneration;

• Sound fi nancial reporting and risk management; and

• Appropriate communication and disclosure.

PMPs corporate governance framework is designed and implemented to ensure

compliance with best practice recommendations set by the ASX Corporate

Governance Council as updated in August 2007.

Ethical Business Conduct Code of Conduct*

The Code of Conduct is PMPs cornerstone corporate governance policy. The

Code of Conduct provides a consistent understanding of the expected behaviour

towards each stakeholder. It stipulates that:

• PMP is to conduct its business with honesty, integrity and respect for the

interests of its stakeholders.

• PMP employees will avoid any personal, fi nancial or other real or apparent

confl icts of interest that could compromise the performance of their duties.

• PMP will continually strive to be a good corporate citizen, including complying

with laws and regulations of Australia and New Zealand and in each state and

territory in which it operates.

• PMP employees will ensure that resources of PMP are used for their

intended use.

• PMP is to respect the privacy of private information, including customer,

business partner and fellow employee information.

• PMP is to continually strive to provide a safe and healthy work environment

for all employees.

• PMP is to recognise and act upon it’s responsibility to limit negative impacts

on the environment and the communities within which it operates.

• PMP is to ensure that there is a clear communication process for material

items of concern between employees and the Board via open and

non-hierarchical communications including whistle-blower provisions that:

- encourage employees to report, in good faith, any violations of the standards,

requirements and expectations described in the Code of Conduct, and

- require appropriate action be taken in response to any such violations, and

- require that where an employee reports, in good faith, an actual or suspected

violation of this Code of Conduct, the position of the reporting offi cer will be

protected and remain confi dential unless disclosure is required by law.

Director and Executive Share Purchasing Policy*

Under its share purchasing policy, PMP Directors and Executives are permitted

to buy and sell shares in the company during a period of one month,

commencing twenty-four hours after the interim and fi nal profi t announcements

and the annual general meeting provided they are not aware of any price sensitive

information. At all other times these offi cers are not permitted to buy and sell

shares in the company.

Responsible Management and Remuneration Board Charter*

Directors are selected to achieve a broad range of skills, experience and

expertise complimentary to the Group’s activities. Details of individual Directors

are included on page 24 to 25. The Board comprises seven Directors being

the Non-Executive Chairman, the Chief Executive Offi cer, one Executive Director

and four Non-Executive Directors.

The roles of Chairman and Chief Executive Offi cer are not exercised by the

same individual.

PMPs Board Charter sets out the role, responsibilities and powers of the Board of

Directors. The company’s Board is responsible for:

• Overseeing the company, including reviewing, ratifying and monitoring

systems of risk management, internal control, code of conduct and legal

compliance, that are designed to ensure compliance with regulatory and

prudential requirements;

• Appointing and removing the Chief Executive Offi cer and ratifying the

appointment and, where appropriate, the removal of the Chief Financial

Offi cer and the Company Secretary;

• Providing input into and fi nal approval of management’s development of

corporate strategy and performance objectives;

• Monitoring performance against Board approved objectives, targets and

strategies and of management;

• Succession planning for the Chief Executive Offi cer and senior executives;

• Approving the progress of major capital expenditure, capital management,

acquisitions and divestitures;

• Approving and monitoring fi nancial and other reporting; and

• Setting delegated authority limits.

The Charter requires that PMPs Board must consist of a majority of independent

Non-Executive Directors who have a broad range of commercial expertise

and experience and/or appropriate professional qualifi cations. They must also

demonstrate a proven ability and capacity to monitor company performance

and participate in strategy development. The Board regularly assesses the

independence of each Director with regard to interests disclosed by them. Under

the Charter, Directors are encouraged to own shares in PMP, however, there is a

minimum shareholding requirement for independent Non-Executive Directors of

100,000 shares.

Access to Information and Advice

The Charter provides for Directors to have access to all relevant information

and employees within PMP. It also gives them authority to seek independent

professional or legal advice, from a fi rm of their choice at PMPs expense, on any

matter before the Board or any other matter affecting their duties as a Director,

conditional only on the Chairman’s approval

Board Performance Evaluation

The Appointment and Compensation Committee is responsible for, amongst

other things, evaluating the performance of the Board and individual Directors.

Board Independence

When determining the independent status of a Director the Board considers

whether the Director:

• Is a substantial shareholder of the company or an offi cer of, or otherwise

associated directly with, a substantial shareholder of the company;

• Is employed, or has previously been employed in an executive capacity by

the company or another group member, and there has not been a period

of at least three years between ceasing such employment and serving on

the Board;

• Has within the last three years been a principal of a material professional

adviser or a material consultant to the company or another Group member, or

an employee materially associated with the service provided;

• Is a material supplier or customer of the company or other group member,

or an offi cer of or otherwise associated directly or indirectly with a material

supplier or customer; or

• Has a material contractual relationship with the company or another group

member other than as a Director.

All Non-Executive Directors of PMP are considered independent with the

exception of:

• Dató Ng Jui Sia, who is directly associated with Fraser and Neave Limited, a

substantial shareholder of the company.

• Peter George, who was appointed on 8 April 2009 as Executive General

Manager Print Australia.

CORPORATE GOVERNANCE

30 | PMP Annual Report 2009 | Corporate Governance

Sound Financial Reporting and Risk Management Risk Oversight and Management of Material Risks

PMP views risk management as a continuous process and a fundamental driver

of effective corporate governance and value generation.

PMPs policy is to apply a common framework across all businesses to identify

material risks and implement appropriate mitigation processes. To this end,

PMP maintains a Risk Management Framework that provides a consistent

and systematic view of the risks faced by the company. The risk identifi cation,

analysis, treatment and monitoring procedures follow Standards Australia’s Risk

Management Standard AS/NZ4360 2004.

The Board has responsibility for the design and implementation of an

effective system of risk management and internal control. The Audit and Risk

Management Committee provides assistance to the Board by reviewing, assessing

and making recommendations in relation to the Risk Management Framework,

supporting systems and the internal control structure.

Management, through the Chief Executive Offi cer, is responsible for designing,

implementing and reporting on the adequacy of PMPs risk management and

internal control system.

Management, with the assistance of the Group Risk Manager, reports to the Audit

and Risk Management Committee on the company’s key risks and the extent to

which it believes these risks are being managed. This is performed on a quarterly

basis or more frequently as required by the Board or relevant subcommittee.

The Audit and Risk Management Committee receives biannual assurance,

or more frequently as required, that the system of risk management and

internal control are sound and operating effectively through reports presented

to the Audit and Risk Management Committee, management representations

and Internal Audit.

Risk Management Framework Summary

A standardised approach to risk assessment is used across the group to ensure

that risks are consistently assessed and reported to an appropriate level of

management, and to the Board if required.

Risks are reviewed at least annually by all operating divisions as part of the

annual strategic planning, business planning, forecasting and budgeting process.

Divisional risk profi les are also reviewed as part of the quarterly due diligence

process within these divisions.

The key business risks are required to be owned by a member of the Executive

Management Team. These risks are specifi cally reported on at each of the

four scheduled Audit and Risk Management Committee meetings. Executive

Management Team members may be required to attend these meetings to assist

the Audit and Risk Management Committee assess the risks and management’s

planned response to these.

Management committees also meet regularly to deal with specifi c areas of risk

such as Health, Safety and Environment (HSE) risk.

The Audit and Risk Management Committee also receives reports on the status of

the implementation of the Risk Management Strategy and supporting framework.

Delegation of Authority Policy*

PMPs Delegation of Authority Policy aims to ensure transparency in decision

making and protect individuals and the company from any suggestion of

impropriety. It requires managers to confer up the management chain when

making signifi cant decisions and prevents confl icts of interest from interfering

with termination or hiring decisions. The Policy also prevents any contract or

arrangement being authorised, or approved by delegation, by any employee with

a confl ict of interest.

Management Representation

Detailed and comprehensive questionnaires are completed by all business

units and functional management on a six monthly basis. These questionnaires

include managements’ assessment of risk management, fi nancial reporting and

the internal control environment operating within each business unit.

The questionnaires are reviewed by executive management and external audit

as part of the half-yearly reporting to the market and to achieve compliance

with section 295A of the Corporations Act and Recommendation 7.3 of

the ASX Corporate Governance Council’s Corporate Governance Principles

and Recommendations.

Based on the questionnaires, The Board receives written assurance from the

Chief Executive Offi cer and the Chief Financial Offi cer that, to the best of their

knowledge and belief, the declaration provided to them is founded on a sound

system of risk management and internal control and that the system is operating

effectively in relation to fi nancial reporting risks. The assurance provided is

reasonable rather than absolute as it is based on judgment, the use of sample

testing, the inherent limitations in internal control and much of the evidence is

persuasive rather than conclusive.

Internal Audit

The internal audit function conducts a series of risk-based reviews based

on a plan agreed with management and the Audit and Risk Management

Committee. In order to ensure the independence of the internal audit function,

the Audit and Risk Management Committee review and endorse the planned

internal audit activities.

As the Group Risk Manager oversees both the Risk Management and Internal Audit

Frameworks, the Audit and Risk Management Committee require independent

assurance as to the adequacy of the frameworks, and the completeness and

accuracy of risk reporting by management. The current provider of the annual

independent assessment is Ernst and Young. Assessments will commence in the

2009 - 2010 fi nancial year.

Inherent Operational Risks

The company believes there are a number of operational risks which are inherent

in the industry in which it operates. These include:

• Strained economic environment due to the global economic crisis;

• Reliance on continuity of supply from utilities (electricity and gas);

• Fluctuations in demand volume;

• Changing operating and market environments; and

• Reliance on continuity of supply of raw material inputs (e.g. paper and ink).

These risks are provided to assist stakeholders understand better the nature of

risks faced by PMP and the industry in which it operates. It is not necessarily an

exhaustive list.

Audit and Risk Management Committee

The Audit and Risk Management Committee provides assistance to the Board in

relation to its corporate governance and oversight responsibilities by reviewing,

assessing and making recommendations in relation to:

• Financial reporting;

• Internal control structure;

• Risk management framework and systems;

• Health, safety and the environment; and

• Internal and external audit functions.

Under its Charter, the Audit and Risk Management Committee consists

of between three and fi ve Non-Executive Directors, a majority of whom are

required to be independent. The Committee must include members who are

fi nancially literate; at least one member shall have relevant qualifi cations and

experience (qualifi ed accountant or other fi nancial professional with experience

of fi nancial and accounting matters); and some members shall have an

understanding of the industry in which PMP operates. The Chairman must be

a Non-Executive Director who is not the Chairman of the Board. The current

members are Ian Fraser (Chairman), Marcia Griffi n and Dató Ng Jui Sia.

The Audit and Risk Management Committee has direct and unlimited access

to the external auditors. The external auditor and the Group Risk Manager have

direct and unlimited access to the Audit and Risk Management Committee.

Record of Attendance*#

Committee member** Number of meetings (Attended out of 4)

I L Fraser (Chairman) 4 (out of a possible 4) *^

Dató Ng Jui Sia 4 (out of a possible 4)

M A Griffi n 2 (out of a possible 2) *^

P George (past Chairman) 1 (out of a possible 2) *^

Corporate Governance | PMP Annual Report 2009 | 31

Appointment and Compensation Committee*#

Refer to the Remuneration report for details on the role of the Appointment and

Compensation Committee.

Committee member** Number of meetings (Attended out of 3)

I L Fraser (Chairman) 3 (out of a possible 3)

M A Griffi n 3 (out of a possible 3)

# The record of attendance for all Board Meetings and Board Committees, are included in the

Directors’ Report - page 33 ‘Directors Meetings’.

** The qualifi cations of Committee members are included in their Director biographies on

pages 24-25.

*^ On the 24th of April 2009 Mr George stood down from the Committee following the

appointment, on the 8th of April 2009, of his role as Executive General Manager Print

Australia. Mr Fraser was appointed as Chair of the Committee and Ms Griffi n was appointed

as a Committee Member.

The Chairman, Chief Executive Offi cer and Chief Financial Offi cer also attend the

Committee meetings as requested.

Appropriate Communication and Disclosure

PMP recognises the importance of open and effective communication with all

stakeholders. Therefore, PMP requires its offi cers and employees to act at all

times with integrity and in accordance with the law, including the disclosure

requirements of the ASX Listing Rules, ASX Guidance Notes, the ASX Corporate

Governance Council Recommendations and the Corporations Act. During the

2009 fi nancial year, PMP had a Disclosure Committee comprising the Chief

Executive Offi cer, Chief Financial Offi cer and Company Secretary, which met as

and when required.

External auditor independence

PMP fi rmly believes that the external auditor must be, and must be seen to be,

independent. The external auditor confi rms its independence in relation to the

30 June and 31 December fi nancial reports and the audit committee confi rms

this by separate enquiry.

Disclosure and Shareholder Communication Policy*

PMPs Disclosure Policy requires any price sensitive information concerning PMP

to be disclosed to the market and to be communicated to the ASX before any

other person. The policy prevents selective disclosure by: ensuring only authorised

spokespeople comment on behalf of PMP; providing a process for issuing any

external statement or press release; and providing clear guidelines for handling

small group or individual briefi ngs. It also sets out protocols for handling trading

halts, responding to market speculation and avoiding inadvertent disclosure. The

Policy ensures shareholders can make informed decisions about their investment

in PMP by providing them with:

• The annual and half year reports;

• Disclosures made to ASX;

• Notices and explanatory memoranda of General Meetings;

• The AGM, where the external auditor will be available to answer questions

about the audit;

• Occasional letters from the Chairman; and

• Its website www.pmplimited.com.au.

Compliance Notes

The Chief Executive Offi cer and Chief Finance Offi cer assured the Board that:

• The consolidated entity’s fi nancial reports present a true and fair view, in

all material respects, of the company’s fi nancial condition and operating

results and are in accordance with relevant accounting standards and

the Corporations Act 2001 and are founded on a sound system of risk

management and internal compliance and control which implements the

policies adopted by the Board.

• The fi nancial records of the listed entity for the year have been properly

maintained in accordance with section 286 of the Corporations Act 2001.

• The company’s risk management and internal compliance and control system

is operating effi ciently and effectively in all aspects.

• The group-wide risk management strategy, implementation plan and

supporting processes have been developed, reviewed by the Audit and

Risk Management Committee and are being implemented. Management’s

actions to embed and continuously improve the risk management processes

are on-going.

• Based on the outcomes of the risk review process as at year end and

representations from line management, it appears that there are no

signifi cant risks that are likely to result in a material misstatement to the

fi nancial statements.

• Management has continued to closely monitor the system of budgeting

and forecasting across the Group with the intention of mitigating any

future exposure.

• The above declarations and statements are made to the best of their

knowledge and belief based on enquiries during the year and on a review of

the Financial Statement Due Diligence Compliance Packages, completed by

line management.

The ASX Corporate Governance Council’s Corporate Governance Principles and

Recommendations recommend the establishment of a Nominations Committee

and a Remuneration Committee. PMP combines the roles and responsibilities

of these committees in its Appointments and Compensation Committee. The

ASX Corporate Governance principles and Recommendations suggest that the

Remuneration Committee should be structured so that it has at least three

members. PMPs Appointments and Compensation Committee currently has two

members, however the Chairman of the Board attended all meetings held during

the year.

* Summaries of these documents are publicly available in the Corporate Governance section of the

PMP Limited web site: www.pmplimited.com.au

32 | PMP Annual Report 2009 | Corporate Governance

Directors’ Report | PMP Annual Report 2009 | 33

The Board of Directors of PMP Limited (“PMP”) has pleasure in submitting the

consolidated Balance Sheet of the economic entity (“PMP Group”) at 30 June

2009, and related Income Statement, Cash Flow Statement and Statement of

Changes in Equity for the year (“the Period”) then ended and report as follows:

Directors

The names of the Directors of PMP in offi ce during or since the end of the fi nancial

year and particulars of their qualifi cations, experience, other directorships

(including listed company Boards for the last 3 fi nancial years) and special

responsibilities including memberships of Committees of the Board are featured

on pages 24-25.

Directors’ and Executives’ disclosures

The disclosures required for Director shareholdings and Director and Executive

remuneration are included within the Remuneration Report (see below).

Company Secretary – qualifi cations and experience

Richard Allely (DipCM, MBA, CPA, FCIS, FAICD) was appointed Company

Secretary on 4 July 2008 and held the position until his appointment to Managing

Director of PMP Limited on 27 April 2009. A summary of his qualifi cations and

experience is included in the Directors’ biographies pages 24-25.

On 27 April 2009 Alistair Clarkson (B.Comm LLB, MBA, ACIS, GradDipACG) was

appointed Company Secretary of PMP Limited. Alistair is an associate of the

Institute of Chartered Secretaries. Age 45, he has been Corporate Counsel for

PMP since 2001 and prior to that worked as a solicitor for various law fi rms in

New Zealand.

Directors’ meetings

The number of Directors’ meetings (including meetings of committees of Directors) and the number of meetings attended by each of the Directors of PMP during the

fi nancial year were:

Board of Directors^ Audit & Risk Management Appointment & Compensation

Maximum Maximum MaximumAttended possible Attended possible Attended possible

attended attended attended

G J Reaney 16 16 *4 4 *3 3

Ng J S 15 16 4 4 *1 3

M A Griffi n 16 16 ***4 4 3 3

P George 14 16 **3 4 *- 3

I L Fraser 16 16 4 4 3 3

R I Allely 3 3 1 1 *1 1

B R Evans^^ 8 8 1 1 *1 1

* Director is not a committee member.

** P George attended 1 meeting as Chairman of the Audit & Risk Management Committee and attended the remaining 2 meetings as a non-member of that Committee.

*** M A Griffi n attended 2 meetings as a member of the Audit & Risk Management Committee and attended the remaining 2 as a non-member of that Committee.

^ M Bickford-Smith was appointed Non-Executive Director of the PMP Board on 20/07/09. He did not attend any meetings during the year ended 30 June 2009.

^^ B R Evans ceased as a Director on 28 January 2009.

Remuneration policy

The Group’s remuneration policies for Directors and management are detailed in

the Remuneration Report included in this report.

Non-Executive Directors’ fees are within the limits set by shareholders at the

Annual General Meeting in 2004, and are set at levels which fairly represent

the responsibilities of, and time spent by, the Non-Executive Directors on

Group matters.

Principal activities

The principal activities of the PMP Group are commercial printing, digital premedia

and letterbox, magazine and book distribution services.

Results

The consolidated result after income tax of the PMP Group for the fi nancial year

ended 30 June 2009 was $27.2 million loss (2008: $78.9 million profi t).

Dividends

Dividends paid to members during the fi nancial year were as follows:

2009 2008$’000 $’000

Final ordinary dividend for the year ended

30 June 2008 of 3 cents, 60% franked paid on

17 October 2008 (2008: 3 cents, fully franked)

10,181 9,009

Interim ordinary dividend for the year ended

30 June 2009 of nil cents (2008: 1.5 cents,

fully franked)

- 5,090

10,181 14,099

DIRECTORS’ REPORT

Review of operations

Earnings before interest and tax excluding signifi cant items of $65.2 million

amounted to $54.2 million at 30 June 2009.

Net result after tax fell to $27.2 million loss from a $78.9 million profi t. Interest

expense increased 2.5% to $18.9 million. Signifi cant items amounted to

$65.2 million including redundancies of $23.8 million and asset impairments of

$21.6 million.

Operating sales revenue was $1,345.6 million, largely consistent with prior year.

Capital expenditure (before proceeds from asset sales totalling $1.4 million) was

$41.0 million which includes the cash paid for The Scribo Group Pty Limited.

Net assets fell by $43.4 million to $351.7 million.

PMP fi nished the year with interest cover of 5.1 times compared to 5.4 times at

the same time last year and gearing of 59.3% from 50.5% in June 2008.

Signifi cant changes in the state of affairs

On 24 June 2009, PMP Limited announced transformation plans to address

the earnings decline in both Australia and New Zealand, created by the current

economic climate. With Phase I complete at balance date, the most signifi cant

impact has been a total of 362 positions being made redundant and a number

of asset write downs due to site and press closures and other Print network

optimisation process decisions.

The benefi t of Phase I is annualised savings of approximately $26.0 million.

Phase II will be implemented in the fi rst half of the year ending 30 June 2010

and will create a low-cost, customer-centric operating model to re-energise the

business and position it strongly when market conditions improve.

On 4 September 2008, the PMP Group acquired The Scribo Group Pty Limited.

The business combination resulted in the recognition of intangible assets of

$7.0 million and goodwill of $13.9 million. Since acquisition, The Scribo Group

Pty Limited has contributed a profi t before interest and tax of $0.8 million, (after

signifi cant items) to the result of the Group. See Note 27 for further details.

Refer below for details in respect to the market share buy-back.

Future developments

Certain developments in the operations of the PMP Group are referred to

elsewhere in the annual report. The Directors have excluded from this report

any further information on the likely developments in the operations of the

PMP Group and the expected results of those operations in future years, as

the Directors have reasonable grounds to believe that it would likely result in

unreasonable prejudice to the company.

Environmental regulation performance

PMP is committed to conducting its business activities with respect for the

environment while continuing to meet its obligations to its shareholders,

employees, customers and suppliers. PMP believes its operations are in

compliance with all environmental regulations to the extent material to its

fi nancial position or results of its continuing operations. As of the date of this

report, there were no material legal proceedings concerning environmental

matters pending against PMP or against any of its properties. Refer to

page 26 for PMP’s Sustainability Report for a more detailed review of PMP’s

environmental issues with a particular emphasis on its carbon footprint.

Share issues and on market buy-back

There were no shares issued during the year ended 30 June 2009.

On 14 August 2008, PMP announced its intention to undertake an on market

share buy-back. During the year ended 30 June 2009 4,009,386 shares were

purchased and have all subsequently been cancelled resulting in a reduction to

contributed equity of $1.4 million.

Share options/rights

The names of the persons who currently hold options/rights are entered in

the register of options and rights kept by the Company pursuant to Section

168 of the Corporations Act 2001. Pursuant to an Australian Securities and

Investments Commission Class Order, the Directors have taken advantage of relief

available from the requirement to disclose the names of executives not being

Directors (other than the key management personnel executives of the Group)

to whom options/rights are issued, and the number of options/rights issued

to each person.

Non-audit services

A review of non-audit services provided by Deloitte Touche Tohmatsu has been

performed by a sub-committee of the Board - the Audit and Risk Management

Committee. These non-audit services include actual and potential acquisition due

diligence, tax compliance and consulting and verifi cation services in respect to

carbon emissions. The following non-audit services have been provided during the

12 months to 30 June 2009.

Description of non-audit services* $

- Financial Due Diligence 321,000

- Tax compliance and consulting 140,923

- Verifi cation services 21,917

483,840

* Unless otherwise specifi ed all amounts have been paid or are due and payable to a member

fi rm of Deloitte Touche Tohmatsu or its affi liates.

In accordance with advice provided by the Audit & Risk Management Committee,

the Directors are satisfi ed that – based on the approval procedures required for

the external auditors to provide non-audit services to PMP and from a review of

actual services provided – the provision of non-audit services by Deloitte Touche

Tohmatsu have met the standards of independence.

Auditors independence declaration

In accordance with the Audit Independence requirements of the Corporations

Act 2001, the Directors have received and are satisfi ed with the “Audit

Independence Declaration” provided by the PMP Group external auditors Deloitte

Touche Tohmatsu. The Audit Independence Declaration has been attached to the

Directors’ Report on page 47.

Directors’ and Offi cers’ liability insurance and indemnity

PMP has liability insurance policies for all Directors and Offi cers of the PMP

Group. The policy agreement prohibits disclosure of the policy terms and the

premium paid. Directors and offi cers are also indemnifi ed by the company against

all liabilities to another person (other than PMP or a related body corporate) that

may arise from their position as Directors or Offi cers of PMP and the PMP Group.

The insurance cover and indemnity is not applicable where the liability arises out

of conduct involving a lack of good faith.

Signifi cant events after balance date

Except as disclosed in Note 32 of the fi nancial report, the Directors are not aware

of any matter or circumstance post balance date not otherwise dealt with in this

report or the consolidated fi nancial statements that has signifi cantly affected or

may signifi cantly affect the operations of the PMP Group, the results of those

operations or the state of affairs of the Group in subsequent years.

Rounding of amounts

Pursuant to class order 98/0100 made by the Australian Securities and

Investments Commission, the Company has rounded amounts in this report and

the accompanying fi nancial statements to the nearest thousand dollars unless

specifi cally stated to be otherwise.

Remuneration Report 1 Appointment and Compensation Committee

(the Committee)

This Remuneration Report outlines the Director and executive remuneration

arrangements in accordance with the requirements of Corporations Act 2001

and its Regulations. The disclosures in this Remuneration Report cover the

Directors of PMP including the Chief Executive Offi cer (CEO) and all other key

management personnel (also referred to as executives) having the authority

and responsibility for planning, directing and controlling the activities of PMP,

which includes the fi ve executives of PMP receiving the highest remuneration.

The report also contains information, where appropriate, regarding the broader

remuneration practices that apply to management below the executive level.

1.1 Role of the Committee

The Appointment and Compensation Committee (the Committee) operates

under the delegated authority of the Board of Directors of PMP Limited. In

relation to appointments, the Committee’s role includes reviewing Director

competence standards, reviewing Board succession plans, evaluating the

Board’s performance and making recommendations for the appointment and

removal of Directors. In relation to compensation, the Committee’s role includes

34 | PMP Annual Report 2009 | Directors’ Report


making recommendations to the Board on executive remuneration and incentive

policies, the remuneration packages of senior management, PMPs recruitment,

retention and termination policies for senior management, incentive schemes,

superannuation arrangements and the remuneration framework for Directors.

The Committee makes recommendations to the Board in relation to the

appointment and succession planning of the Chief Executive Offi cer and other key

executive positions. The Committee is also responsible for evaluating potential

candidates for executive positions, including the role of the Chief Executive

Offi cer, and overseeing the development of executive succession plans.

The Chief Executive Offi cer has the authority to employ and remunerate

executives within the scope of the policy established by the Committee. In

carrying out its duties, the Committee is committed to the principles of providing

sound remuneration policies and practices that enable PMP to:

• Attract and retain high quality executives and Directors who are dedicated to

the interests of PMP shareholders; and

• Fairly and responsibly reward executives, having regard to the interests of

shareholders, PMP’s performance, the performance of the relevant executive

and market conditions.

The Committee has ultimate authority for establishing executive remuneration

policy and for the appointment and succession planning of the Chief Executive

Offi cer.

1.2 Advisors

In executing its responsibilities, the Committee has unlimited access to senior

management. It also has the Board’s authority to seek information it requires from

employees and external parties and obtain outside legal or other professional

advice at the expense of PMP Limited.

1.3 Membership and meetings

Membership of the Committee may only comprise Non-Executive Directors. The

Chairman must be a Non-Executive Director who is not the Chairman of the

Board. Those who are members of this Committee and their record of attendance

in the last fi nancial year is listed below.

Committee membersMeetings attended

Meetings held

I L Fraser (Chairman) 3 3

M A Griffi n 3 3

2 Remuneration principles

PMP’s Remuneration Policy provides a direct link between remuneration and

corporate performance. PMP’s key remuneration and benefi t principles include:

• Provide suffi ciently competitive rewards to attract and retain high calibre

executives;

• Ensure a signifi cant portion of executive remuneration is at risk against

pre-determined performance benchmarks;

• Apply appropriate stretch performance hurdles to variable executive

remuneration;

• Link short term incentives to both company and personal performance;

• Link long term incentives (including options and rights) to shareholder value

measures and performance hurdles;

• Limit severance payments for executives to pre-established contractual

arrangements that do not require PMP to make any unjustifi ed termination

payments; and

• Provide full legal compliance and disclosure of executive remuneration.

The Board also recognises that, although remuneration is a major factor in

recruiting and retaining talented and effective people, other factors play a

substantial role in attracting suitable candidates, including: PMP’s business

operations, corporate reputation, ethical culture and other human resources

policies and practices.

PMP’s remuneration principles in combination with implemented policies,

ensure that:

• Executive remuneration packages are appropriately benchmarked against

the market for comparative roles in similar sized entities;

• Executive remuneration packages for key middle and senior personnel

include an at risk variable component that is developed in line with the

PMP Short Term Incentive program;

• Variable pay schemes are expressed in the form of a balanced scorecard that

details a variety of criterion that align to key areas of focus for the business.

Current standard performance criterion includes: EBIT, safety performance

(lead and lag indicators) and workforce engagement; and

• A set of personal objectives are set for each individual that strive to align

personal behaviours and professional development with the overall goals of

the company.

3 Remuneration structure

The Board believes well designed and managed short and long term incentive

plans are important elements of employee remuneration, providing tangible

incentives for employees to strive to improve PMP’s short term and long term

performance, and giving them a community of interest with shareholders.

The three tiers of the structure are:

1 Fixed remuneration that is made up of base salary including statutory

superannuation and other incidental benefi ts;

2 Short term performance incentives (“STI”) / other accepted variable pay

schemes; and

3 Longer term equity-based incentives through employee share and option

plans (“LTI”) that are awarded at the discretion of the CEO and that usually

pertain to the upper echelon of the business.

This three-tier structure results in management having more of their total

remuneration and reward package at risk via linkage to individual performance

and business results and, in the case of longer term incentives, to the long term

performance of the company.

The structure links remuneration management and outcomes to organisational

performance through PMP’s Performance Management System. This system

aligns goals, strategies and actions for the Group with business unit and

department goals and actions. PMP measures progress against these goals

through individual reviews and monthly and quarterly business reviews.

To ensure executives are suffi ciently motivated and aligned with PMP company

performance objectives, as a general policy executives are expected to have at

least 25% of their maximum potential remuneration “at risk”.

3.1 Base salary

PMP generally sets salaries based on a classifi cation structure referenced to the

market median and also allows for suffi cient fl exibility from this reference point

for a range, based on individual performance levels.

PMP’s remuneration structure and market position are benchmarked annually

through CSi, PMP’s preferred remuneration and benefi ts provider.

On a day to day basis, the remuneration structure is managed by Human

Resources at Business Unit level, leveraging tools such as: job evaluation, career

level benchmarking and the automated salary review application.

PMP’s remuneration system allows fl exible packaging of benefi ts via salary

sacrifi ce at no additional Total Employment Cost (TEC) to the company.

3.2 Superannuation

PMP complies with all relevant statutory superannuation obligations to its

employees. The standard company superannuation plan is primarily an

accumulation plan and provides a lump sum benefi t equal to the balance of

a member’s account, which includes contributions made by the member and

the relevant PMP group entity, together with net fund earnings. A few longer

serving executives remain in a legacy defi ned benefi t plan, which is closed to

new members.

Relevant superannuation contributions for all senior executives form part of

the executive’s total remuneration package, which is calculated on a total cost

to company basis. All such amounts are included in the fi xed remuneration

disclosed for the Chief Executive and members of the senior executive team

in this report. PMP offers employees the opportunity to participate in the

superannuation choice of fund arrangements.

3.3 Other benefi ts

PMP does not provide senior executives or Directors with benefi ts such as life

insurance, vehicle allowance, club memberships or retirement benefi ts other

than the superannuation benefi ts previously discussed.

3.4 Variable remuneration

PMP links all variable remuneration to performance. The proportion of total

remuneration that may be received in variable form varies with job responsibility,

with senior executives having a greater proportion of their remuneration at risk.

The following explanations regarding STIs and LTIs apply in principle to the

executives as to the CEO. However, specifi c disclosures on the CEO are included

in Section 4 of this report.

3.4.1 Short term incentives - STIs

The STI plan applies to key middle and senior personnel roles, directly linking

variable remuneration to PMP’s corporate strategy.

The employee’s STI percentage is the maximum amount that will be paid for

achieving performance goals. Results above the target goal will not increase the

incentive payment above the STI percentage unless authorised by the CEO. As a

general rule, no discretionary bonuses outside the STI program will be approved.

Proposals for discretionary bonuses outside the STI program must be authorised

by the CEO and have a supporting business case.

Performance is assessed on a balanced scorecard approach.

Target achieved Percentage of STItarget achieved

Percentage of baseTEC achieved

EMT Other (EMT example)

Below threshold None None -

Threshold N/A 50% -

Target 100% 100% 25%

Exceptional CEO discretion CEO discretion

Table 1. STI percentages

STI entitlements in any year are formalised after the end of year accounts

have been fi nalised post 30 June and payment is made in September of that

year. Short Term Incentive award payments to the CEO and other specifi ed

executives satisfying the defi nition of Key Management Personnel are disclosed

in this report.

3.4.2 STIs - Performance conditions

PMP’s primary measure for STIs is EBIT - Earnings Before Interest and Tax

(before signifi cant items) and is a commonly used fi nancial indicator of operating

performance of the business.

Other non-fi nancial performance conditions are selected to focus management

and executive activities on operating performance and employee safety and to

align individual behaviours with company strategy. Non-fi nancial performance

criteria of executives are set by the CEO in consultation with individual executives.

The EBIT target approved by the Board is applicable to all senior executives

including the CEO.

The following events negate 100% of STI payments:

• Total PMP Limited EBIT threshold not met for all participants; or

• Respective Site / Business Unit EBIT threshold not met.

3.4.3 Long term incentives – LTIs

The LTI plan aligns an element of executive rewards with the creation of

shareholder wealth. LTIs are provided to executive managers who have the

greatest authority and most strategic infl uence over PMP’s direction, profi tability

and growth.

In previous years this has equated to PMP offering LTIs to the Executive

Management Team (EMT) plus approximately 20 senior managers. LTI’s have

been share options linked to stretch performance targets set against PMP’s three

year strategic plan. Those options were issued pursuant to the PMP Executive

Option Scheme (EOS) as approved by shareholders.

In the 2006-07 fi nancial year, the Board approved a revised LTI Plan aimed at

enhancing the effectiveness of the plan for stakeholders.

Participants are granted performance rights (rights) which entitle them to receive

PMP Shares for nil cost after a specifi ed vesting period, to the extent that specifi c

performance conditions are satisfi ed. The rights are granted annually (following

the announcement of the Group’s results) to each participant to the value of

between 25% and 50% of that persons TEC. The number of rights granted is

determined based on the Company’s weighted average share price for the one

week period up to and including the grant date. These rights only vest if the Group

achieves the long-term performance hurdles detailed in Table 2.

3.4.4 LTIs - Performance conditions

Long-term performance hurdles are intended to refl ect an appropriate measure

that best aligns executive LTIs with the interests of other stakeholders, most

particularly shareholders. Table 2 summarises all current Key Management

Personnel LTIs, including their performance hurdles and achievement assessment

methods. Specifi c performance hurdles for all LTIs on issue to the CEO are

detailed in section 4.2 of this report.

3.5 Senior Executive Performance Evaluation

PMP rewards executives for performance. At the beginning of each new fi nancial

year, the CEO sets objectives with each of his direct reports as part of the

balanced scorecard process. These objectives typically cover: EBIT, safety lead

and lag indicators, and staff engagement. Personal behavioural and development

objectives are also set and included in the balanced scorecard. The CEO,

consistent with good practice, formally reviews performance against objectives

at least twice annually at the mid year and fi nancial year end mark. Performance

outcomes that result from the annual review are then used to determine overall

performance ratings and short term incentive payments.

3.6 Company performance

Tables 3a and 3b show PMP’s performance over the last fi ve years with regard to

earnings and shareholder returns.



Ref Options / Rights Performance Hurdles Assessment Method Vesting

A $1.60 The performance hurdle is EPS in fi nancial years ending Will be determined on 0% vested

EMT June 2007 to 2009. EPS result for FY07, on

Issued 11 Nov 04 FY08 and FY09. 1 July 09

Expiry 30 Sep 09 Detail - The options may only be exercised if PMP’s Refer to the 2004 AGM

earnings per share (EPS) for any fi nancial year ending explanatory

$1.60 30 June 2007, 2008 or 2009 are met as follows: memorandum for

Senior Managers further information

Issued 28 Jan 05 - EPS greater than or equal to $0.23 but less than $0.25,

Expiry 30 Sep 09 25% of the options vest and become exercisable

- EPS greater than or equal to $0.25 but less than $0.26,

$1.60 50% of the options vest and become exercisable

Senior Managers - EPS greater than or equal to $0.26 but less than $0.27,

(Print NZ) 75% of the options vest and become exercisable

Issued 15 Apr 05 - EPS greater than or equal to $0.27,

Expiry 30 Sep 09 100% of the options vest and become exercisable

$1.60 The above performance hurdles can be achieved at any

Senior Manager time during the fi nancial years ending 30 June 2007, 2008

Issued 31 Jul 06 and 2009 – and prior to expiry. As such, if hurdles are not

Expiry 30 Sep 09 achieved for the fi rst two years but are subsequently achieved

in the third, then all options become exercisable.

B Rights - $0 The performance hurdles are: Total Shareholder Will be determined on 0% vested

EMT Return (TSR) and Return on Capital Employed (ROCE). TSR and ROCE result for on

Issued 10 Aug 06 50% of Rights granted are be subject to each hurdle. FY07, FY08 and FY09. 14 Aug 09

Expiry 31 Aug 11

Total Shareholder Return

If PMP’s TSR over the three year period comprising fi nancial years 07,

08 and 09 exceeds the change in the ASX All Ordinaries Accumulation

Index over the same period, all of the Rights (being 50% of Rights

granted) will vest and become exercisable.

Return on Capital Employed

ROCE = EBIT / Capital Employed The Board retains

- EBIT = Earnings Before Interest and Tax as per the audited accounts discretion to

- Capital employed = Equity plus net debt include/exclude from

ROCE performance over a 3-year performance period will be the calculation of ROCE,

determined as the simple average of ROCE achieved in each of the 3 items which the Board

relevant fi nancial years. If ROCE over the 3-year performance period is considers are for example

at least equal to the target average ROCE set by the Board on unusual or non-recurring.

commencement (being 16%), all of the Rights (being 50% of Rights


C Rights - $0 The performance hurdles are: Total Shareholder Will be determined on N/A

EMT and Senior Managers Return (TSR) and Return on Capital Employed (ROCE). TSR and ROCE result for

Issued 30 Sept 07 50% of Rights granted are be subject to each hurdle. FY08, FY09 and FY10.

Expiry 31 Aug 12






Return on Capital Employed hurdle detail as in “B” above.

D Rights - $0 The performance hurdles are: Total Shareholder Will be determined on N/A

EMT and Senior Managers Return (TSR) and Return on Capital Employed (ROCE). TSR and ROCE result for

Issued 01 Oct 08 50% of Rights granted are be subject to each hurdle. FY09, FY10 and FY11.

Expiry 31 Aug 13






Return on Capital Employed hurdle detail as in “B” above.

Table 2. LTI Performance Hurdles and Assessment Methods

Table 3a. PMP Share Price Performance against ASX 200 Index Table 3b. PMP Actual Share Price performance

Earnings performance indicators 2005 2006 2007 2008 2009

Earnings/(loss) per ordinary share cents 10.7 11.2 15.5 24.0 (8.0)

Dividend per share cents - - 3.0# 4.5^ -

External sales revenue A$ mill 1,333.6 1,245.0 1,288.1 1,347.3 1,345.6

Total EBIT (before signifi cants) A$ mill 76.7 82.0 91.3 85.1 54.2

Table 4. PMP earnings performance indicators

# Final dividend FY07, paid FY08.

^ 1.5 cent interim FY08 dividend, paid FY08 and 3 cent fi nal FY08 dividend, paid FY09

4 Chief Executive remuneration

At 30 June 2009 PMP has two Executive Directors, Mr Richard Alley (CEO) and

Mr Peter George (Executive General Manager Print Australia). The following

section details Mr Allely’s remuneration arrangement, refer table 12 for details of

Mr George’s remuneration.

4.1 Employment contract

Mr Richard Allely was appointed Chief Executive Offi cer on 7 April 2009 (effective

from start of April 2009), succeeding Mr Brian Evans who left the company on

28 January 2009. Mr Allely is employed under a 3 year contract which

expires on 31 March 2012. The notice period for termination is 12 months by

the employer or 6 months notice by the employee (3 months in the event of a

signifi cant change in duties). Leave entitlements are 20 days annual leave per

annum, and long service leave as per legislation.

4.2 Summary of remuneration structure

Fixed Remuneration:

Base Salary including superannuation $815,000.

Short Term Incentive:

Mr Allely has an STI of up to 100% of his fi xed remuneration commencing with the

2009/10 fi nancial year, dependent on achieving a number of targets as follows:

• Budgeted profi t (70% of STI);

• Improved safety (15% STI); and

• One other target to be set by the Board at the commencement of the fi nancial

year (15%).

The fi nal target will change each year dependent upon the development and

current circumstances within the PMP Group.

Any STI achieved will be paid 67% in cash and 33% in PMP shares. The

PMP shares will be purchased on market and will not vest with Mr Allely until

12 months after the year end to which they relate. No STI payments have been

made in respect to the 30 June 2009 fi nancial year as Group EBIT targets were

not met.

Long Term Incentive:

All options and rights issued to the CEO are disclosed in Note 24(b) to the accounts.

No LTI is payable to Mr Allely under contract as CEO in respect to the fi nancial

year ending 30 June 2009. Mr Allely was however granted 279,297 share

rights on 1 October 2008 under the Employee Long Term Incentive Plan, when

he was Chief Financial Offi cer of PMP (refer table 9).

In accordance with his contract, with respect to each fi nancial year commencing

with 2009/10, a maximum of 50% base remuneration will be paid in cash,

subject to Mr Allely achieving the following target:

• A total shareholder return (TSR) that is at or above the 51st percentile of

TSR for the 151st to 200th (inclusive) largest companies by market

capitalisation listed on the ASX for that fi nancial year.

4.3 Remuneration summary

The remuneration paid to Mr Allely for the year ended 30 June 2009 is set out

in the table below:

Salary Component 2009

- Base Salary^ $710,006

- Superannuation $13,744

- STI -

- Share Options* ($43,024)

Total $680,726

^ Includes base salary earned in previous role as Chief Financial Offi cer until 31 March 2009.

* This is based on the accrued accounting value in accordance with AASB 2 Share-based

Payment and relates to amounts granted to Mr Allely under the Employee Long Term Incentive

Plan prior to his appointment to CEO. All options valued in accordance with AASB 2 have been

independently valued using the Binomial Option Pricing Model. In accordance with AASB 2

the non-market conditions associated with these options were not taken into account when

estimating the fair value at grant date. Instead, the number of options expected to eventually

vest is re-assessed at the end of each reporting period. This number was adjusted at

30 June 2009 resulting in a net credit to the income statement.

Table 5. Richard Allely remuneration

200 -

150 -

100 -

50 -

0 - | | | | | |

July 04 July 05 July 06 July 07 July 08 July 09

Per

cent

age

chan

ge

Sha

re p

rice

(ce

nts)


200 -

150 -

100 -

50 -

0 -

ASX

PMP

| | | | | |

July 04 July 05 July 06 July 07 July 08 July 09


5 Key Management Personnel and highest paid offi cers (other than Directors)

PMP’s Key Management Personnel (as defi ned by AASB 124: Related Party Disclosures) and highest paid offi cers during the last two fi nancial years are:

R I Allely Chief Financial Offi cer and Company Secretary until appointment to

Chief Executive Offi cer and Managing Director. Refer section 4 for remuneration details.

C Davison Executive General Manager - Gordon and Gotch and Scribo Group

P Elbourne Chief Financial Offi cer (appointed in current role 01/04/09)

A Clarkson Company Secretary and General Counsel (appointed in current role 01/04/09)

G Plant Executive General Manager - PMP Digital & Pacifi c Micromarketing (appointed in current role 02/02/09)

P Browne Executive General Manager - PMP (NZ) Limited (appointed in current role 18/02/09)

A Williams Executive General Manager - Distribution (appointed 15/06/09)

D Rowland Company Secretary and General Counsel (completion 04/07/08)

B Ashton Chief Operating Offi cer - Print (completion 30/04/09)

P Martin Managing Director Investment Strategy (completion 30/01/09)

C VanTil Human Resources & Corporate Services Director (completion 27/02/09)

P De Fontenay Information Systems Director (appointed 21/01/08, completed 30/06/09)

M Allan Managing Director - PMP (NZ) Limited (appointed 07/01/08, completed 18/02/09)

D Taylor Managing Director Direct Marketing (appointed 22/10/07, completed 30/06/09)

R Shepherd CEO - PMP (NZ) Limited (completion 20/11/07)

5.1 Employment contracts

PMP, as a current policy, does not include termination or severance payments for PMP executives in their employment contracts. PMP may make additional payments

on conclusion of an executive’s contract depending upon the circumstances of their termination or otherwise pay out the executive’s remuneration in lieu of notice.

Two contracts below are outside this policy however both individuals ceased employment during the fi nancial year ending 30 June 2009: one was established during

different circumstances in 1999* (24 months TEC), and one was New Zealand based and followed PMP’s standard contract with that country at that time**.

Name Notice Period PMP Notice Period Employee Termination Payments

P Elbourne 6 Months 6 Months No specifi c termination payment provided for

A Clarkson 3 Months 3 Months No specifi c termination payment provided for

G Plant 3 Months 3 Months No specifi c termination payment provided for

P Browne 3 Months 3 Months No specifi c termination payment provided for

A Williams 6 Months 6 Months No specifi c termination payment provided for

C Davison 6 Months 3 Months No specifi c termination payment provided for

D Rowland* 24 months No specifi ed notice period 24 months of TEC

B Ashton 6 Months 3 Months No specifi c termination payment provided for

P Martin 6 Months 3 Months No specifi c termination payment provided for

C VanTil 6 Months 3 Months No specifi c termination payment provided for

P De Fontenay 6 Months 3 Months No specifi c termination payment provided for

M Allan 6 Months 3 Months No specifi c termination payment provided for

R Shepherd** 6 Months 3 Months In the case of redundancy 6 weeks remuneration for the fi rst completed year of service,

and 2 weeks for every subsequent completed year of service to a maximum of 30 weeks.

D Taylor 6 Months 3 Months No specifi c termination payment provided for

Table 6. Executive Employment Contracts

5.2 Remuneration

The table below outlines the remuneration packages of key management personnel (excluding Directors) in accordance with the Corporations Act 2001 and AASB 124:

Related Party Disclosures. The value of options/rights included as part of executive disclosures below is based on the accrued accounting value in accordance with

AASB 2: Share-based Payment. All options/rights valued in accordance with AASB 2 have been independently valued in accordance with the Binomial Option Pricing

Model or the Monte Carlo Simulation Model. The “actual” value of options achieved by executives during the year is disclosed in Table 8 in the column headed “Actual

LTI”. This value is based on the “intrinsic value” of options on vesting date. That is, what gross profi t (pre-tax) the executive would have made if the options were sold

on the fi rst date they were available.

Key management personnel Short termPost

EmploymentSuperannuation

Totalexcluding

options/rights

Equityoptions/rights

Grandtotal

Options/rightsas a percentage

of totalremuneration

Salary STI* (m)$ $ $ $ $ $

R I Allely (a) 2009 - - - - - - -

2008 636,871 243,750 13,129 893,750 40,558 934,308 4%

C Davison 2009 350,238 - 25,760 375,998 (22,431) 353,567 (6%)

2008 334,740 135,000 23,135 492,875 80,294 573,169 14%

P Elbourne (b) 2009 208,206 - 14,738 222,944 N/A 222,944 N/A

2008 140,711 14,222 14,169 169,102 N/A 169,102 N/A

A Clarkson (b) 2009 232,649 - 22,663 255,312 3,065 258,377 1%

2008 201,686 19,166 20,274 241,126 9,571 250,697 4%

G Plant (b) 2009 256,005 - 13,745 269,750 3,825 273,575 1%

2008 231,375 64,762 13,179 309,316 10,372 319,688 3%

P Browne (b) 2009 223,896 - 22,747 246,643 6,291 252,934 2%

2008 208,319 12,493 22,508 243,320 17,412 260,732 7%

A Williams (c) 2009 14,178 - 1,276 15,454 N/A 15,454 N/A

2008 N/A N/A N/A N/A N/A N/A N/A

D Rowland (d) 2009 2,621 - 393 3,014 N/A 3,014 N/A

2008 352,143 - 52,822 404,965 (144,497) 260,468 (55%)

B Ashton (e) 2009 405,213 - 11,454 416,667 (126,184) 290,483 (43%)

2008 455,621 60,000 13,129 528,750 85,869 614,619 14%

P Martin (f) 2009 169,982 - 8,018 178,000 (83,838) 94,162 (89%)

(g) 2008 268,121 45,000 13,129 326,250 57,517 383,767 15%

C VanTil (h) 2009 203,503 - 9,163 212,666 (103,918) 108,748 (96%)

(g) 2008 293,621 50,000 13,129 356,750 68,823 425,573 16%

P De Fontenay (i) 2009 259,174 - 25,390 284,564 - 284,564 N/A

2008 107,167 25,000 9,645 141,812 - 141,812 N/A

M Allan (j) 2009 159,900 - - 159,900 - 159,900 N/A

2008 111,426 50,000 - 161,426 - 161,426 N/A

D Taylor (k) 2009 308,524 - 32,057 340,581 (25,211) 315,370 (8%)

2008 191,464 52,000 17,232 260,696 25,932 286,628 9%

R Shepherd 2009 N/A N/A N/A N/A N/A N/A -

(l) 2008 126,993 - - 126,993 - 126,993 N/A

Total Remuneration: 2009 2,794,089 - 187,404 2,981,493 (348,401) 2,633,092

2008 3,660,258 771,393 225,480 4,657,131 251,851 4,908,982

Table 7. Key management personnel remuneration

*: In respect to the year ended 30 June 2009, the Executive Management Team had an entitlement to a STI which they collectively agreed to forego given the poor fi nancial performance of the Group.

(a) R I Allely was appointed Chief Executive Offi cer 7 April 2009 effective from start April 2009, his remuneration for the current reporting period is disclosed in Table 12: Specifi ed Director remuneration.

(b) Identifi ed as key management personnel in the current fi nancial year, as a member of the Executive Management Team, total remuneration refl ected.

(c) Appointed 15/06/09.

(d) Completion 04/07/08 (termination payment of $102,436 excluded)

(e) Completion 30/04/09 (termination payment of $327,688 excluded)

(f) Completion 30/01/09 (termination payment of $170,309 excluded)

(g) Identifi ed as key management personnel in the prior reporting period, as a member of the Executive Management Team, total remuneration refl ected for comparative period.

(h) Completion 27/02/09 (termination payment of $185,326 excluded)

(i) Completion 30/06/09 (termination payment of $166,188 excluded). The prior year comparative is presented from the date of his appointment 21/01/08.

(j) Completion 18/02/09 (termination payment of $113,863 excluded). The prior year comparative is presented from the date of his appointment 07/01/08.

(k) Completion 30/06/09 (termination payment of $167,171 excluded). The prior year comparative is presented from the date of his appointment 22/10/07.

(l) Completion 30/11/07 (no termination payment was paid)

(m) Where completion dates are during the period - options have been forfeited (AASB 2 Share-based Payment)

- Options/rights that had not vested prior to being forfeited have been credited back to the income statement.


Fixed annual

remuneration<g>

MaximumSTI<f>

Actual STI <a>

Actual STI percentage of maximum STI



Maximum LTI

<c>

Actual LTI

<d> <e>

Actual LTI percentage of maximum LTI

 <e>

Maximum potential reward

Actual reward

At risk remuneration (of potential

total)

$ $ $ % $ $ % $ $ %

R I Allely 723,750 203,750 - - 245,521 - - 1,173,021 723,750 38%

P George (h) 138,636 - - - N/A N/A N/A 138,636 138,636 N/A

C Davison 375,998 95,000 - - 132,859 - - 603,857 375,998 38%

P Elbourne 222,944 68,750 - - N/A N/A N/A 291,694 222,944 24%

A Clarkson 255,312 62,500 - - 24,995 - - 342,807 255,312 26%

G Plant 269,750 54,600 - - 28,259 - - 352,609 269,750 24%

P Browne 246,643 38,249 - - 47,153 - - 332,045 246,643 26%

A Williams 15,454 3,825 - - N/A N/A N/A 19,279 15,454 20%

Table 8. Key management personnel achievement of performance hurdles


<a> No STIs earned in 2009 as Group EBIT targets were not met.

 The difference between the Actual and Maximum value is the forfeited value.

<c> All long term incentives (LTIs) are composed of “options/rights”. The value attributed to the

“2009 Maximum LTI” amount is based on the accrued accounting value in accordance with

AASB 2 ‘Share-based Payment’. Options/rights have been independently valued.

<d> The value attributed to the 2009 “Actual LTI” amount is the “intrinsic value” of options

exercised during the year. Intrinsic value is calculated as the difference between the share

price and exercise price on the date exercised.

<e> Management notes that the method used in this table will result in reporting anomalies in

any given period, to the extent that the “Actual LTI” is based on actual exercised options

(intrinsic value), which is being compared to an accrued accounting value.

<f> Based on ‘target’ goals (100%) being achieved. Achievement of ‘exceptional’ goals are at

CEO discretion.

<g> Remuneration has been prorated for time of service and between current and prior roles

where appropriate.

<h> Fixed remuneration is only given in respect to role as Executive General Manager Print

Australia, pro rated for time of service.


5.3 Share options/rights

The table below shows remuneration share options and rights granted and vested to key management personnel during the year. No Director (excluding R I Allely and

B R Evans) were granted or hold options or rights over shares of PMP Limited.

Terms & Conditions for each grant of share rights during the year ending 30 June 2009 30 June 2009

Granted Number Grant DateValue per option at

Grant Date $

Exercise price per share $

First exercise

date

Lastexercise

date

VestedNumber

R I Allely 279,297 01/10/2008 <a> N/A 31/08/2013 Nil

P George - N/A N/A N/A N/A N/A N/A

C Davison 148,438 01/10/2008 <a> N/A 31/08/2013 Nil

P Elbourne - N/A N/A N/A N/A N/A N/A

A Clarkson 43,252 01/10/2008 <a> N/A 31/08/2013 Nil

G Plant 50,781 01/10/2008 <a> N/A 31/08/2013 Nil

P Browne 84,237 01/10/2008 <a> N/A 31/08/2013 Nil

A Williams - N/A N/A N/A N/A N/A N/A

B Ashton 195,313 01/10/2008 <a> N/A 31/08/2013 Nil

B R Evans <d> 503,226 29/09/2008 1.24 N/A N/A N/A 120,000

D Rowland - N/A N/A N/A N/A N/A N/A

P Martin 120,703 01/10/2008 <a> N/A 31/08/2013 Nil

D Taylor 123,047 01/10/2008 <a> N/A 31/08/2013 Nil

C VanTil 126,953 01/10/2008 <a> N/A 31/08/2013 Nil

P De Fontenay 113,281 01/10/2008 <a> N/A 31/08/2013 Nil

M Allan 97,451 01/10/2008 <a> N/A 31/08/2013 Nil

Total 1,885,979 120,000

Terms & Conditions for each grant of share rights during the year ending 30 June 2008 30 June 2008

Granted Number Grant DateValue per option at

Grant Date $

Exercise price per share $

First exercise

date

Lastexercise

date

VestedNumber

R I Allely 216,333 30/09/2007 <a> N/A <c> 31/08/2012 Nil

B Ashton 141,448 30/09/2007 <a> N/A <c> 31/08/2012 Nil

C Davison 119,981 30/09/2007 <a> N/A <c> 31/08/2012 Nil

B R Evans - - - - - - 120,000

D Rowland 133,128 30/09/2007 <a> N/A <c> 31/08/2012 Nil

P Martin 99,846 30/09/2007 <a> N/A <c> 31/08/2012 Nil

D Taylor 99,846 30/09/2007 <a> N/A <c> 31/08/2012 Nil

C VanTil 102,841 30/09/2007 <a> N/A <c> 31/08/2012 Nil

P De Fontenay - N/A N/A N/A N/A N/A N/A

Total 913,423 120,000

Table 9. Key management personnel options/rights granted

<a> Valuation in accordance with AASB 2 Share-based Payment

Fair value per right - TSR hurdle - $1.00 (2008: $0.64) (50% of granted rights)

Fair value per right - ROCE hurdle - $1.21 (2008: $1.38) (50% of granted rights)

 Following the announcement of the 2010-11 results

<c> Following the announcement of the 2009-10 results

<d> Actual number of rights would have been determined following the announcement of the 2008-09 results of which 50% would have vested in B R Evans 12 months after on market purchase and

50% 24 months after purchase (503,226 was best estimate at grant date). B R Evans ceased employment prior to their vesting. The 120,000 rights that vested in the period related to deferred sign

on consideration described in Note 24(b).


Balance

1 July

2008

Granted as

Remuneration

Rights

Exercised

Rights

Lapsed

Options

Cancelled

Balance

30 June

2009

Not

Exercisable

Share

Price at

Exercise

Date

$

Value at

Exercise

Date

$

Share

Price at

Lapse

Date

$

Value

at Lapse

Date

$

<a> <c>

R I Allely 884,455 279,297 - (450,000) - 713,752 713,752 - - 0.39 175,500

P George - - - - - - - - - - -

C Davison 337,431 148,438 - (100,000) - 385,869 385,869 - - 0.39 39,000

P Elbourne - - - - - - - - - - -

A Clarkson 36,851 43,252 - - - 80,103 80,103 - - - -

G Plant 39,938 50,781 - - - 90,719 90,719 - - - -

P Browne 167,043 84,237 - (100,000) - 151,280 151,280 - - 0.39 39,000

A Williams - - - - - - - - - - -

B Ashton 258,898 195,313 - (454,211) - - - - - 0.42 188,498

B R Evans 3,760,000 503,226 (120,000) (503,226) (3,640,000) - - 0.89 107,211 0.43 213,871

D Rowland 685,894 - - (685,894) - - - - - 0.93 637,881

P Martin 175,349 120,703 - (296,052) - - - - - 0.42 122,862

D Taylor 99,846 123,047 - (222,893) - - - - - 0.39 86,928

C VanTil 203,512 126,953 - (330,465) - - - - - 0.41 135,491

P De Fontenay - 113,281 - (113,281) - - - - - 0.39 44,180

M Allen - 97,451 - (97,451) - - - - - 0.31 29,723

Total 6,649,217 1,885,979 (120,000) (3,353,473) (3,640,000) 1,421,723 1,421,723

Balance

1 July

2007

Granted as

Remuneration

Rights

Exercised

Rights

Lapsed

Options

Cancelled

Balance

30 June 2008

Not

Exercisable

Share

Price at

Exercise

Date

$

Value at

Exercise

Date

$

Share

Price at

Lapse

Date

$

Value

at Lapse

Date

$

<a> <c>

R I Allely 843,122 216,333 - (175,000) - 884,455 884,455 - - 1.52 266,000

B Ashton 117,450 141,448 - - - 258,898 258,898 - - - -

C Davison 217,450 119,981 - - - 337,431 337,431 - - - -

B R Evans 3,880,000 - (120,000) - - 3,760,000 3,760,000 1.69 202,912 - -

D Rowland 715,266 133,128 - (162,500) - 685,894 685,894 - - 1.52 247,000

P Martin 75,503 99,846 - - - 175,349 175,349 - - -

C VanTil 100,671 102,841 - - - 203,512 203,512 - - -

R Shepherd 731,772 - - (731,772) - - - - - 1.82 1,331,825

D Taylor - 99,846 - - - 99,846 99,846 - - -

C Amos 797,484 - - (797,484) - - - - - 1.71 1,363,698

Total 7,478,718 913,423 (120,000) (1,866,756) - 6,405,385 6,405,385

Table 10. Options/rights holdings key management personnel

<a> No amounts were paid by B R Evans for rights exercised. No amounts remain unpaid as at the date of this report

 B R Evans share option plan was replaced with a medium term incentive plan on 29 September 2008 when his CEO contract was extended.

The unvested options at that time were cancelled.

<c> No options/rights are exercisable at 30 June 2009 (2008: nil)


2009 Balance 1 July 2008 On Exercise of Options/Rights Purchases Sales Balance 30 June 2009

Directors

I L Fraser 65,467 <a> 53,330 - 118,797

M A Griffi n 152,282 <a> 44,451 - 196,733

Ng J S - <a> 15,000 - 15,000

G J Reaney 547,201 <a> 84,539 (350,000) 281,740

P George 57,967 <a> 34,652 - 92,619

R I Allely - - - - -

B R Evans <c> 240,000 120,000 - - N/A

Total 1,062,917 120,000 231,972 (350,000) 704,889

Executives

C Davison - - - - -

P Elbourne - - - - -

A Clarkson - - - - -

G Plant - - - - -

P Browne - - - - -

A Williams - - - - -

Total - - - - -

2008 Balance 1 July 2007 On Exercise of Options/Rights Purchases Sales Balance 30 June 2008

Directors

J R Donnelley 1,863,343 <a>, <e> - - N/A

I L Fraser 98,718 <a> 17,530 (50,781) 65,467

P George 39,827 <a> 18,140 - 57,967

M A Griffi n 171,476 <a> 15,806 (35,000) 152,282

Ng J S - <a>, <d> - - -

B R Evans 120,000 120,000 - - 240,000

G J Reaney 514,416 <a> 32,785 - 547,201

Total 2,807,780 120,000 84,261 (85,781) 1,062,917

Executives

R I Allely - - - - -

B Ashton - - - - -

C Davison - - - - -

D Rowland - - - - -

P Martin - - - - -

C VanTil - - - - -

P De Fontenay - - - - -

M Allan - - - - -

D Taylor - - - - -

R Shepherd - - - - -

C Amos - - - -

Total - - - - -

Table 11. Share holdings key management personnel

<a> No Directors, other than B R Evans and R I Alley, have been issued with any options/rights

prior to or during the current fi nancial year. Refer to table 10 for details.

 R I Allely appointed Managing Director 27/04/09.

<c> B R Evans ceased employment 28/01/09. Between the start of the fi nancial year ending

30 June 2009 and the date of his resignation, other than the 120,000 shares that vested

there had been no change in his shareholding.

<d> Ng J S appointed 29/11/07.

<e> J R Donnelley resigned 09/08/07. Between the start of the year ending 30 June 2008 and

the date of his resignation, there had been no changes in his share holding.


6 Non-Executive Director Remuneration

The remuneration of Non-Executive Directors is determined by the full Board within a maximum amount approved by shareholders in a general meeting and with regard

to the level of fees paid to Non-Executive Directors by other companies of similar size.

The maximum allowance for the aggregate amount of fees remained unchanged for the year at $750,000 per annum. In the last fi nancial year, the Board allocated

$531,589 of this amount for Non-Executive Director remuneration - as shown in Table 12 (includes P George). The Board has determined not to raise the Non-Executive

Director’s fees in the current fi nancial year (2009/10).

Non-Executive Directors are not entitled to retirement benefi ts other than statutory superannuation or other statutory required benefi ts.

Director fees are comprised as follows:

• Chairman of the Board $170,550

• Non-Executive Director $75,000

• Chair of Audit and Risk Management Committee $20,000

• Member of Audit and Risk Management Committee $12,000

• Chair of Appointment and Compensation Committee $13,000

• Member of Appointment and Compensation Committee $8,000

• Statutory superannuation 9%

• Option to salary sacrifi ce share purchases Section 6.3

There is no element of Non-Executive Director salaries that is contingent on performance.

6.1 Performance Assessment

The Board evaluates its performance every two years with performance assessments facilitated by an external party.

6.2 Retirement Benefi ts

Non-Executive Directors receive cash remuneration plus statutory superannuation contributions only. Payments for Directorship services provided by Dató Ng Jui Sia

do not include provisions for statutory superannuation contributions. Directors do not receive any retirement benefi ts.

6.3 Non-Executive Director – Share Purchase Plan

During the years presented, Non-Executive Directors (NED) had the option to salary sacrifi ce up to 100% of their Directors fees to purchase shares under the

NED share purchase plan. Purchases under that plan are disclosed in Table 12.


Specifi ed Directors

Salary & Fees STI Share Purchases

Post

Employment

Superannuation

Total excluding

share-based

Equity

Share-based

Grand

TotalTotal

$ $ $ $ $ $

J R Donnelley (a) 2009 N/A N/A N/A N/A N/A N/A N/A

2008 9,795 - - - 9,795 - 9,795

I L Fraser (b) 2009 - - 27,646 82,939 110,585 - 110,585

2008 67,687 - 24,593 6,092 98,372 - 98,372

M A Griffi n 2009 63,886 - 23,212 5,750 92,848 - 92,848

2008 62,250 - 22,618 5,603 90,471 - 90,471

Ng J S (c) 2009 87,000 - - - 87,000 - 87,000

2008 43,500 - - - 43,500 - 43,500

G J Reaney (Board Chair) 2009 114,425 - 46,475 25,000 185,900 - 185,900

2008 127,913 - 46,475 11,512 185,900 - 185,900

Total Remuneration:

- Non-Executive Directors 2009 265,311 - 97,333 113,689 476,333 - 476,333

2008 311,145 - 93,686 23,207 428,038 - 428,038

R I Allely (CEO) (d) 2009 710,006 - - 13,744 723,750 (43,024) 680,726

P George (e) 2009 189,683 - 20,838 8,131 218,652 - 218,652

2008 71,250 - 25,888 6,413 103,551 - 103,551

B R Evans (f) 2009 588,760 - - 8,018 596,778 18,932 615,710

2008 986,871 900,000 - 13,129 1,900,000 (1,302,547) 597,453

Total Remuneration:

- Executive Directors 2009 1,488,449 - 20,838 29,893 1,539,180 (24,092) 1,515,088

2008 1,058,121 900,000 25,888 19,542 2,003,551 (1,302,547) 701,004

Total Remuneration:

- Directors 2009 1,753,760 - 118,171 143,582 2,015,513 (24,092) 1,991,421

2008 1,369,266 900,000 119,574 42,749 2,431,589 (1,302,547) 1,129,042

Table 12. Specifi ed Director remuneration

(a) Resigned 09/08/07

(b) I L Fraser is the Chairman of the Appointment and Compensation Committee and was appointed Chairman of the Audit and Risk Management Committee 27 April 2009.

(c) Appointed 29/11/07. Payments made for Directorship services provided by Dató Ng Jui Sia are made to Times Publishing Limited.

(d) R I Allely was appointed Executive Managing Director on 27 April 2009 following his appointment to Chief Executive Offi cer effective from the start of April 2009. Prior to this he was the

Group Chief Financial Offi cer. The amounts shown above include all of his remuneration during the reporting period whether as a Director or as the Chief Financial Offi cer. Mr Alley’s remuneration

for the prior reporting period is disclosed in Table 7: key management personnel remuneration. Amounts received in his position of Chief Executive Offi cer amounted to $203,750, made up of

salary of $200,314 and superannuation of $3,436.

(e) P George became an Executive Director on 27 April 2009 following his appointment to Executive General Manager Print Australia on 8 April 2009, prior to this he was a Non-Executive Director.

On this day he stepped down as Chairman of the Audit and Risk Management Committee. Amounts received in his position as Executive General Manager Print Australia amounted to

$138,636, made up of salary of $135,460 and $3,176 super. Mr George does not have any STI or LTI entitlement.

(f) B R Evans was CEO of the company until his employment ceased on 28 January 2009 (excludes termination payment of $825,000). Total includes options and rights.

This report has been made in accordance with a resolution of Directors.

Graham J Reaney

Chairman

Richard I Allely

Managing Director and Chief Executive Offi cer

Sydney, 26 August 2009

Deloitte Touche Tohmatsu

A.B.N. 74 490 121 060

Grosvenor Place

225 George Street

Sydney NSW 2000

PO Box N250 Grosvenor Place

Sydney NSW 1220 Australia

DX 10307SSE

Tel: +61 (0) 2 9322 7000

Fax: +61 (0) 2 9322 7001

www.deloitte.com.au

The Board of Directors

PMP Limited

Level 12

67 Albert Avenue

CHATSWOOD NSW 2067

26 August 2009

Dear Directors,

PMP Limited

In accordance with section 307C of the Corporations Act 2001, I provide the following declaration of independence

to the directors of PMP Limited.

As lead audit partner for the audit of the fi nancial statements of PMP Limited for the fi nancial year ended

30 June 2009, I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(ii) any applicable code of professional conduct in relation to the audit.

Yours sincerely

DELOITTE TOUCHE TOHMATSU

G Couttas

Partner

Chartered Accountants

Liability limited by a scheme approved under Professional Standards Legislation.

Member ofDeloitte Touche Tohmatsu

Independent Auditor’s Declaration | PMP Annual Report 2009 | 47

INDEPENDENT AUDITOR’S DECLARATION

48 | PMP Annual Report 2009 | CFO Commentary on the Accounts

Phillip is the Chief Financial Offi cer for PMP and is responsible for

all fi nance and information system support functions in the Group.

Phillip leads a small corporate team which provides taxation, treasury,

group accounting, information systems, management accounting and

investor relations support to the Group. Phillip joined PMP in 2003

and has 20 years experience in senior fi nancial and commercial

management roles with leading companies including Dyno Nobel

Limited, Origin Energy Limited (formerly Boral Limited),

Tamrock Australia and Esso Australia.

Phillip ElbourneBBus MBA CPA GAICD

Chief Financial Offi cer

PMP Limited

Operating Sales RevenueOperating sales revenue for the year was $1,345.6 million, a

0.1% decrease on the prior year, due to declines in both Print and

Distribution volumes, offset by the inclusion of the Scribo Group.

Print revenue fell 3.9% or $ 28.4 million, with volume increases in

Directories and Griffi n Press offset by reductions in the Heatset

business, particularly in the second half of the year, when

volumes fell by 10.2%. In Distribution, volumes in the second half

declined by 8.0%, resulting in revenues decreasing by 1.4% or

$1.7 million. For magazine distributor Gordon & Gotch, revenue

rose 7.7% or $35.4 million, assisted by revenue from the Scribo

group, acquired in September 2008, but offset by declining

magazine circulation. Revenue in the Digital Premedia business

decreased by $6.9 million or 18.0% from the previous year, due

to customers reducing their marketing budgets.

Earnings Before Interest and Tax (EBIT)The full-year EBIT (before signifi cant items) was $54.2 million,

down 36.3% or $30.9 million on the prior year. The primary

causes of this reduction in operating earnings were lower

volumes, compounded by reduced average selling prices in

the Print business, coupled with the continuing impact of the

depressed New Zealand economy. The Distribution business

posted an 8.3% decrease in operating earnings over last year,

refl ecting the loss of a major customer in the second half. Despite

the inclusion of the Scribo group, lower volumes saw Gordon &

Gotch reduce its EBIT result by 6.6% on the previous year. On

a like-with-like basis corporate costs decreased by $1.4 million.

Year on year, corporate costs increased by $5.4 million, due to a

major expense of $3.4 million in 2009 coupled with a benefi t for

the write back of executive options and a benefi t on the valuation

of defi ned benefi ts scheme in 2008.

Net Result after TaxNet result after tax was a loss of $27.2 million compared to a

$78.9 million profi t last year. However, 2008 included a $43 million

tax benefi t following the settlement of a long standing dispute

with the Australian Taxation Offi ce. Interest expense increased by

2.5% to $18.9 million due to: higher average debt levels following

the Scribo acquisition; inventory build-up in the fi rst half; and

restructuring costs in the second half. This was partially offset

by lower average borrowing rates due to having approximately

29.5% of debt unhedged during the year.

Cash FlowThe Group generated $43.3 million in operating cash fl ow

compared to $83.7 million last year, due to: lower earnings

in the Print business; acquisition of the Scribo group; and

costs of restructuring the business. This resulted in net bank

debt of $208.4 million, up from $199.6 million in the previous

fi nancial year.

Balance SheetNet assets for the group stand at $351.7 million, down from

$395.2 million in the previous year. The Group’s gearing remains

strong, with net debt / equity standing at 59.3%, up from 50.5%

last year, and interest cover remaining within the investment grade

ratio of 5.1 times.

During 2009, PMP initiated a market buy-back where 4,009,386

shares were bought back at an average price of 34.36 cents

per share, for a total consideration of $1.4 million.

Income Statement

$m 2008-09 2007-08 % Change

EBITDA (before signifi cant items) 96.0 125.9 (23.7%)

Depreciation and amortisation (41.8) (40.8) (2.5%)

EBIT (before signifi cant items) 54.2 85.1 (36.3%)

Finance costs (28.5) (19.3) _

Income tax expense (7.5) (19.2) _

Net profi t (before signifi cant items) 18.2 46.6 (60.9%)

Signifi cant items (65.2) 26.6 _

Income tax benefi t (on signifi cant items) 19.8 5.7 -

Net (loss)/profi t (27.2) 78.9 _

CFO Commentary on the Accounts | PMP Annual Report 2009 | 49

Segment Revenue

2008-09 2007-08 VARIANCE

Sales revenue

Printing 696.4 724.9 (3.9%)

Distribution 121.0 122.7 (1.4%)

Gordon and Gotch 496.5 461.1 7.7%

Digital Premedia 31.7 38.6 (18.0%)

Total 1,345.6 1,347.3 (0.1%)

Segment EBIT before signifi cant items

2008-09 2007-08 VARIANCE

EBIT before signifi cant items

Printing 41.6 65.5 (36.5%)

Distribution 7.0 7.6 (8.3%)

Gordon and Gotch 11.6 12.5 (6.6%)

Digital Premedia 7.2 7.3 (2.1%)

Corporate (13.2) (7.8) (69.9%)

Total 54.2 85.1 (36.3%)

Cash Flow

2008-09 2007-08

EBITDA after cash signifi cant items 96.0 125.9

Cash signifi cant items (28.8) (11.6)

Non-cash (6.2) (5.4)

EBITDA - cash 61.0 108.9

Borrowing costs (19.9) (18.3)

Income tax paid (2.6) (3.7)

Net movement in working capital 4.8 (3.2)

Cash fl ow from operating activities 43.3 83.7

Cash fl ow applied to investing activities (40.2) (84.6)

Free cash fl ow 3.1 (0.9)

Balance Sheet

Year ended 30 June 2009 2008

Current assets 248.0 258.9

Non-current assets 559.3 576.7

Total assets 807.3 835.5

Current liabilities 250.5 221.8

Non-current liabilities 205.1 218.6

Total liabilities 455.6 440.4

Net assets 351.7 395.2

PMP Group PMP Limited

2009 2008 2009 2008NOTES $’000 $’000 $’000 $’000

Continuing operations

Sales revenue 2(a) 1,345,611 1,347,253 - -

Other revenue 2(a) 10,478 12,275 5,083 20,838

Revenue 22 1,356,089 1,359,528 5,083 20,838

Raw materials and consumables used (358,204) (342,251) - -

Cost of fi nished goods sold (408,515) (387,917) - -

Employee expenses (370,217) (359,791) (19,226) (16,046)

Outside production services (40,393) (51,603) - -

Freight (35,843) (26,571) - -

Repairs and maintenance (19,113) (20,924) (37) (59)

Occupancy costs (23,728) (21,789) (3,596) (3,707)

Other (expenses)/recoveries (69,269) (39,152) (17,450) 233,897

Profi t/(loss) before depreciation, amortisation,fi nance costs and income tax 30,807 109,530 (35,226) 234,923

Depreciation and amortisation 2(e), 22 (41,772) (40,829) (4,026) (1,823)

(Loss)/profi t before fi nance costs and income tax (10,965) 68,701 (39,252) 233,100

Finance costs 3 (28,502) (19,331) (220) (175)

(Loss)/profi t before income tax 2(c) (39,467) 49,370 (39,472) 232,925

Income tax benefi t/(expense):

Current tax benefi t/(expense) in respect of the current period 4,728 (7,224) 4,644 3,386

Deferred tax benefi t/(expense) relating to the current period 7,569 (6,248) 654 (2,913)

Income tax benefi t/(expense) 4 12,297 (13,472) 5,298 473

Benefi t arising from previously unrecognised tax losses 4 - 43,027 - 43,027

Total tax benefi t 4 12,297 29,555 5,298 43,500

Net (loss)/profi t after income tax (27,170) 78,925 (34,174) 276,425

Basic earnings per share (cents) 28 (8.0) 24.0

Diluted earnings per share (cents) 28 (8.0) 24.0

Weighted average number of ordinary shares outstanding

during the period used in the calculation of basic earnings

per share (‘000) 28 337,903 328,404

The above income statements should be read in conjunction with the accompanying notes.

INCOME STATEMENTSYEAR ENDED 30 JUNE 2009

50 | PMP Annual Report 2009 | Financial Statements

Financial Statements | PMP Annual Report 2009 | 51

BALANCE SHEETSYEAR ENDED 30 JUNE 2009


2009 2008 2009 2008NOTES $’000 $’000 $’000 $’000

Current assets

Cash and cash equivalents 29(b) 2,855 98 344 17

Receivables 5 140,496 142,380 531,173 579,096

Inventories 6 88,377 95,840 - -

Financial assets 7 - 4,789 - -

Other 8 8,398 6,965 1,001 686

240,126 250,072 532,518 579,799

Non-current assets classifi ed as held for sale 9 7,878 8,815 - -

Total current assets 248,004 258,887 532,518 579,799

Non-current assets

Property, plant and equipment 10 358,460 403,044 21,656 22,872

Deferred tax assets 12 80,209 71,604 57,663 53,828

Goodwill and intangible assets 11 118,266 97,838 - -

Other 8 2,326 4,176 176,922 178,586

Total non-current assets 559,261 576,662 256,241 255,286

Total assets 807,265 835,549 788,759 835,085

Current liabilities

Payables 13 185,772 185,520 438,642 436,545

Interest bearing liabilities - fi nancial institutions 14(a) 25,211 2,139 93 93

Income tax payable 146 1,717 85 1,717

Financial liabilities 16 7,445 - - -

Provisions 15 31,878 32,387 3,737 3,745

Total current liabilities 250,452 221,763 442,557 442,100

Non-current liabilities

Interest bearing liabilities - fi nancial institutions 14(b) 186,041 197,604 - -

Deferred tax liabilities 12 12,057 17,867 3,512 3,721

Financial liability 16 4,020 - - -

Provisions 15 2,973 3,157 322 349

Total non-current liabilities 205,091 218,628 3,834 4,070

Total liabilities 455,543 440,391 446,391 446,170

Net assets 351,722 395,158 342,368 388,915

Equity

Contributed equity 17 626,049 627,656 626,049 627,656

Reserves 19 (2,214) 1,801 485 607

Accumulated losses (272,113) (234,299) (284,166) (239,348)

Total equity 351,722 395,158 342,368 388,915

The above balance sheets should be read in conjunction with the accompanying notes.


2009 2008 2009 2008NOTES $’000 $’000 $’000 $’000

Cash fl ows from operating activities

Receipts from customers 1,497,893 1,503,395 - -

Payments to suppliers and employees (1,432,485) (1,398,290) (7,642) (4,870)

Interest received 450 513 37 106

Interest and other costs of fi nance paid (19,917) (18,282) (247) (175)

Income taxes paid (2,594) (3,664) (2,572) (1,249)

Net cash fl ow from/(used in) operating activities 29(a) 43,347 83,672 (10,424) (6,188)

Cash fl ows from investing activities

Payments for acquisition of controlled entities/business operations 27 (18,282) (19,915) - (19,759)

Payments for property, plant and equipment (22,677) (90,667) (3,198) (4,675)

Proceeds from sale of property, plant and equipment 1,431 28,387 - -

Deferred acquisition payment - (1,227) - -

Payments for development costs (680) (1,174) - -

Net cash fl ow used in investing activities (40,208) (84,596) (3,198) (24,434)

Cash fl ows from fi nancing activities

Proceeds from exercised employee options 17 - 62 - 62

Net proceeds from borrowings 11,537 11,308 - -

Inter-company fi nancing - - 25,615 44,676

Payment of fi nance lease liabilities (264) (348) - -

Payment for vested share rights 17 (107) - (107) -

Dividends paid to company’s shareholders 18 (10,181) (14,099) (10,181) (14,099)

Payment for share buy-back 17 (1,378) - (1,378) -

Net cash fl ow (used in)/from fi nancing activities (393) (3,077) 13,949 30,639

Net increase/(decrease) in cash and cash equivalents 2,746 (4,001) 327 17

Cash and cash equivalents at the beginning of the fi nancial year 7 4,031 (76) (93)

Effects of exchange rate changes on cash and cash equivalents 11 (23) - -

Cash and cash equivalents at end of the fi nancial year 29(b) 2,764 7 251 (76)

The above cash fl ow statements should be read in conjunction with the accompanying notes.

CASH FLOW STATEMENTSYEAR ENDED 30 JUNE 2009

52 | PMP Annual Report 2009 | Financial Statements

Financial Statements | PMP Annual Report 2009 | 53

STATEMENTS OF CHANGES IN EQUITYYEAR ENDED 30 JUNE 2009

Attributable to equity holders of PMP Limited

Contributed equity Accumulated losses Reserves Total equity

$’000 $’000 $’000 $’000

PMP Group

At 1 July 2007 568,856 (299,841) 2,713 271,728

Currency translation differences - - (763) (763)

Cash fl ow hedges (net of tax) - - 1,945 1,945

Total income recognised directly in equity - - 1,182 1,182

Profi t for the year - 78,925 - 78,925

Total income - 78,925 1,182 80,107

Dividends - (14,099) - (14,099)

Share issue 58,529 - - 58,529

Exercise of options 62 - - 62

Share-based payments 209 716 (2,094) (1,169)

At 30 June 2008 627,656 (234,299) 1,801 395,158

At 1 July 2008 627,656 (234,299) 1,801 395,158

Currency translation differences - - 67 67

Cash fl ow hedges (net of tax) - - (3,960) (3,960)

Total expense recognised directly in equity - - (3,893) (3,893)

Loss for the year - (27,170) - (27,170)

Total loss - (27,170) (3,893) (31,063)

Dividends - (10,181) - (10,181)

Share buy-back (1,378) - - (1,378)

Exercise of options (203) - - (203)

Share-based payments (26) (463) (122) (611)

At 30 June 2009 626,049 (272,113) (2,214) 351,722

PMP Limited

At 1 July 2007 568,856 (502,390) 2,701 69,167

Profi t for the year - 276,425 - 276,425

Total income - 276,425 - 276,425

Dividends - (14,099) - (14,099)

Share issue 58,529 - - 58,529

Exercise of options 62 - - 62

Share-based payments 209 716 (2,094) (1,169)

At 30 June 2008 627,656 (239,348) 607 388,915

At 1 July 2008 627,656 (239,348) 607 388,915

Loss for the year - (34,174) - (34,174)

Total loss - (34,174) - (34,174)

Dividends - (10,181) - (10,181)

Share buy-back (1,378) - - (1,378)

Exercise of options (203) - - (203)

Share-based payments (26) (463) (122) (611)

At 30 June 2009 626,049 (284,166) 485 342,368

The accompanying notes form an integral part of this statement of changes in equity.

1 | Summary of signifi cant accounting policies

2a | Revenue

2b | Signifi cant items

2c | (Loss)/profi t before income tax

2d | Auditors’ remuneration

2e | Depreciation and amortisation

3 | Finance costs

4 | Income tax

5 | Receivables

6 | Inventories

7 | Financial assets

8 | Other assets

9 | Non-current assets classifi ed as held for sale

10 | Property, plant and equipment

11 | Goodwill and intangible assets

12 | Deferred tax

13 | Payables

14 | Interest bearing liabilities

15 | Provisions

16 | Financial liabilities

17 | Contributed equity

18 | Dividends

19 | Reserves

20 | Commitments

21 | Controlled entities

22 | Segmental report

23 | Pension plans

24 | Share-based payment plans

25 | Related parties

26 | Key management personnel

27 | Business combinations

28 | Earnings per share

29 | Cash fl ow statement notes

30 | Financial instruments

31 | Contingent liabilities

32 | Subsequent events

| Directors’ declaration

| Independent audit report

1 Summary of signifi cant accounting policies

Basis of preparation

The fi nancial report is a general-purpose fi nancial report,

which has been prepared in accordance with the requirements

of the Corporations Act 2001, Accounting Standards and

Interpretations, and complies with other mandatory professional

reporting requirements.

The fi nancial report includes separate fi nancial statements for PMP

Limited (the Company) as an individual entity and the consolidated

entity consisting of PMP Limited and its subsidiaries (PMP Group).

Historical cost convention

The fi nancial statements have been prepared in accordance

with the historical cost convention, except for the revaluation of

derivative fi nancial instruments and non-current assets classifi ed

as held for sale that have been measured at fair value and fair value

less costs to sell respectively. Cost is based on the fair values of the

consideration given in exchange for assets.

Statement of compliance

Compliance with IFRS

The fi nancial statements comply with Australian Accounting

Standards, which include Australian Equivalents to International

Financial Reporting Standards (‘AIFRS’). Compliance with AIFRS

ensures that fi nancial statements, comprising the fi nancial

statements and notes, thereto comply with International Financial

Reporting Standards (‘IFRS’).

Adoption of new and revised accounting standards

In the current year, PMP Group has adopted all of the new and

revised Standards and Interpretations issued by the Australian

Accounting Standards Board (AASB) that are relevant to its

operations and effective for the year ended 30 June 2009.

Australian Accounting Standards and Interpretations that have

been recently issued or amended but are not yet effective have

not been adopted by the PMP Group for the year ended 30 June

2009. The amendments to standards and interpretations not yet

adopted that have been identifi ed as those which may impact the

PMP Group in the period of initial application have been disclosed

on page 58.

FINANCIAL INDEX

54 | PMP Annual Report 2009 | Notes to and forming part of the Financial Statements

Basis of consolidation

The consolidated fi nancial statements are those of the economic

entity (PMP Group) comprising PMP Limited (the head entity ‘PMP’)

and its subsidiaries.

The consolidated fi nancial statements include the information

contained in the fi nancial statements of PMP and each of its

subsidiaries as from the date PMP obtains control until such time

as control ceases.

The fi nancial statements of controlled entities are prepared for the

same reporting period as PMP using consistent accounting policies.

All intercompany balances, transactions, and unrealised profi ts

arising on transactions between Group companies have been

eliminated in full.

Use of estimates and judgements

The preparation of fi nancial statements requires management

to make judgements, estimates and assumptions that affect the

application of accounting policies and the reported amounts of

assets, liabilities, income and expenses. Actual results may differ

from these estimates.

Estimates and underlying assumptions are reviewed on an

ongoing basis. Revisions to accounting estimates are recognised

in the period in which the estimate is revised and in any future

periods affected.

In particular, information about signifi cant areas of estimation

uncertainty and critical judgements in applying accounting policies

that have the most signifi cant effect on the amount recognised in

the fi nancial statements are described in the following notes:

Note 4 Deferred tax assets

Note 11 Impairment testing of goodwill and intangibles with

indefi nite useful lives

Note 23 Pension plans actuarial assumptions

Note 24 Share-based payment plans

Note 30 Financial instruments (disclosures only)

In addition, for fi nancial guarantee contract liabilities, the fair value

at initial recognition is determined using a probability weighted

discounted cash fl ow approach. This method takes into account

the probability of default by the guarantee party over the term of

the contract, the loss given default (being the proportion of the

exposure that is not expected to be recovered in the event of

default) and exposure at default (being the maximum loss at the

time of default).

Recoverable amount of assets

At each reporting date, the PMP Group assesses whether there is

any indication that an asset may be impaired. Where an indicator

of impairment exists, the PMP Group makes a formal estimate

of recoverable amount. Where the carrying amount of an asset

exceeds its recoverable amount the asset is considered impaired

and is written down to its recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and

value in use. It is determined for an individual asset, unless it does

not generate infl ows that are largely independent of those from

other assets or groups of assets, in which case, the recoverable

amount is determined for the cash generating unit to which the

asset belongs.

In assessing value in use, the estimated future cash fl ows

are discounted to their present value using a pre-tax discount rate

that approximates the weighted average cost of capital for that

cash generating unit.

The assumptions used in the assessment of recoverable amount

are discussed in Note 11.

Foreign currencies

Both the functional and presentation currency of PMP Limited

and its Australian subsidiaries is Australian dollars. The functional

currencies of the overseas operations equates to their local

currency.

Transactions in foreign currencies are converted to functional

currency at the rate of exchange ruling at the date of the

transaction.

Monetary amounts payable to and by the entities within the

PMP Group that are outstanding at the balance date and are

denominated in foreign currencies have been converted to

functional currency using rates of exchange at the end of the year.

Non-monetary amounts that are measured at historical cost in a

foreign currency are translated using the exchange rate as at the

date of the initial transaction.

The assets and liabilities of the controlled entities incorporated

overseas are translated into the PMP Group presentation currency

at the rates of exchange ruling at balance date. The income

statements are translated at an average rate for the year.

Exchange differences arising on translation are taken directly to the

foreign currency translation reserve.

On the disposal of a foreign operation, a proportionate share of

the amount recognised in the foreign currency translation reserve

relating to that particular foreign operation is recognised in the

income statement, as part of the gain or loss on sale.

Cash and cash equivalents

For the purposes of the cash fl ow statement, cash includes

cash on hand and in banks net of outstanding bank overdrafts.

Cash on hand and in banks is stated at nominal amount. Bank

overdrafts are included in current interest bearing liabilities on the

balance sheet.

Trade receivables

Trade debtors are recognised and carried at original invoice

amount less a provision for any uncollectible debts. An estimate

for doubtful debts is made when collection of the full amount is no

longer probable. Bad debts are written-off as incurred.

Receivables from related parties are recognised and carried at the

nominal amount due less provision for amounts not recoverable.

Inventories

Inventories are valued at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and

condition are accounted for as follows:

- Raw materials: cost is determined by the average cost method

and specifi c identifi cation for the balance; and

- Finished goods and work-in-progress: cost of direct material

and labour and an appropriate proportion of fi xed and variable

manufacturing overheads based on normal operating capacity.

Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated

depreciation and any impairment in value. Subsequent costs are

included either in the assets carrying value or as a separate asset

only when it is probable that future economic benefi ts will fl ow to

the Group and the cost can be reliably measured.

Depreciation

Property, plant and equipment, excluding freehold land, is

depreciated or amortised at rates based upon their expected useful

lives using the straight line method. Major depreciation periods are

consistent with the prior period and are as follows:

- Freehold buildings 40 years

- Leasehold improvements to the lease term

- Printing presses 7.5 to 20 years

- Computer equipment (usually) 3 years

Useful lives are reviewed, and adjusted, if appropriate at each

reporting date.

Non-current assets (or disposal groups) held for sale

Non-current assets (or disposal groups) are classifi ed as held for

sale if their carrying value will be recovered principally through

a sale transaction rather than through continuing use. They are

measured at the lower of their carrying amount and fair value less

costs to sell. An impairment loss is recognised for any initial or

subsequent write-down of the asset. Non-current assets classifi ed

as held for sale are not depreciated while they are classifi ed as

held for sale. Where subsequently a decision is made not to sell an

asset classifi ed held for sale, the asset is valued at the lower of its

carrying amount before it was classifi ed as held for sale, adjusted

Year ended 30 June 2009 | PMP Annual Report 2009 | 55

for depreciation that would have been recognised had the asset

not been classifi ed held for sale, and its recoverable amount.

Payables

Liabilities for trade creditors and other amounts are carried at

cost which is the fair value of the consideration to be paid in the

future for goods and services received, whether or not billed to the

consolidated entity.

Payables to related parties are carried at the principal amount.

Leases

Finance leases, which transfer to the Group substantially all the

risks and benefi ts incidental to ownership of the leased item, are

capitalised at the lower of present value of the minimum lease

payments or the fair value of the leased property, disclosed as

leased property, plant and equipment, and amortised over the

shorter of the lease term and useful life of the asset.

The cost of improvements to leasehold property related to these

fi nance leases is capitalised and amortised over the unexpired

period of the lease or the estimated useful lives of the improvements,

whichever is the shorter.

Operating leases, which do not transfer to the Group substantially

all the risks and benefi ts of the leased item, are not capitalised and

rental payments are included in the determination of the operating

profi t in equal installments over the lease term.

Intangible assets

Goodwill

Goodwill represents the excess of the purchase consideration plus

incidental expenses over the fair value of identifi able net assets

and contingent liabilities acquired at the date of acquisition of a

business.

Following initial recognition, goodwill is measured at cost less any

accumulated impairment losses. Goodwill is not amortised, but is

reviewed for impairment each reporting date, or more frequently

if events or changes indicate that the carrying amount may be

impaired.

At the date of any acquisition, goodwill acquired is allocated to the

cash generating unit or groups of cash generating units expected

to benefi t from the acquisition.

Where the recoverable amount of the cash generating unit is

less than the carrying amount of goodwill, an impairment loss is

recognised.

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 within the carrying

amount of the operation when determining the gain or loss on

disposal of the operation.

Database and software development

Costs incurred in developing or acquiring products or systems that

will generate future benefi ts are capitalised.

Amortisation is charged on a straight-line basis, the expense is

taken to the income statement through the ‘amortisation’ line item

as follows:

- Database development costs 3 years

- Software development costs 3 - 7 years

Useful lives are examined on an annual basis and adjustments,

where applicable, are made on a prospective basis.

Customer contract

The PMP Group has a signifi cant intangible asset which was

acquired as part of a business combination relating to the directory

printing contract. The current directory printing contracts are

undergoing renewal, and the Directors have no reason to believe

that they will not be renewed in 2009. No amortisation is provided

against this contract since, in the opinion of the Directors, the life of

the contract is indefi nite.

Indefi nite life assets are reviewed at each reporting period for

impairment, or more frequently if events or changes in circumstances

indicate that they might be impaired.

Brand/trademark

Brand and trademarks acquired as part of a business combination

are recognised separately from goodwill. Brand and trademarks

are carried at fair value at date of acquisition and are not amortised

but are reviewed for impairment at each reporting date, or more

frequently if events or changes indicate that the carrying amount

may be impaired.

Supplier and customer relationships

Supplier and customer relationships acquired as part of a business

combination are recognised separately from goodwill. Supplier and

customer relationships are carried at fair value at date of acquisition

less accumulated amortisation. Amortisation is recognised over the

remaining useful life of the asset although the pattern of benefi ts

may not necessarily be received equally over the useful life.

Estimated useful lives are as follows:

- Supplier relationships 10 years

- Customer relationships 5.75 years

Revenue recognition

Revenues are recognised at the fair value of consideration received

or receivable net of the amount of goods and services tax (GST).

Revenue is recognised to the extent that it is probable that the

economic benefi ts will fl ow to the entity and the revenue can be

reliably measured. Revenue is recognised net of returns, discounts

and allowances.

When rendering services under contract and both the contract

outcome can be reliably measured and control of the right to be

compensated for the services and the stage of completion can be

reliably measured, revenue is recognised on a progressive basis as

the costs to complete the service contract are performed.

Dividend revenue is recognised when the Group’s right to receive

payment is established.

Rental income is recognised as income in the periods in which it

is earnt.

Taxes

Income tax

The income tax expense or benefi t for the year is the tax payable

on the current year’s taxable income based on the notional income

tax rate for each jurisdiction adjusted by changes in deferred tax

assets and liabilities attributable to temporary differences between

the tax bases of assets and liabilities and their carrying amounts in

the fi nancial statements, and unused tax losses.

Deferred tax assets and liabilities are recognised for temporary

differences at the rates expected to apply when the assets are

recovered or liabilities are settled, based on the tax rates for each

jurisdiction. The relevant tax rates are applied to the cumulative

amounts of deductible and taxable temporary differences to

measure the deferred tax asset or liability.

Deferred tax assets are recognised for deductible temporary

differences and unused tax losses only if it is probable that future

taxable amounts will be available to utilise those temporary

differences and losses.

Tax consolidation legislation

PMP Limited and its wholly-owned Australian controlled entities

have implemented tax consolidation legislation.

The head entity, PMP Limited, and the controlled entities in the

tax consolidated group account for their own current and deferred

amounts. These are measured as if each entity continued to be a

stand alone taxpayer in its own right.

In addition to its own current and deferred tax amounts, PMP

Limited also recognises the current tax liabilities (or assets) and

the deferred tax assets rising from unused tax losses and unused

tax credits assumed from controlled entities in the tax consolidated

group. Assets or liabilities arising are accounted for in accordance

with the tax funding agreement, details of which are disclosed in

Note 4.


Goods and services tax (GST)

Revenues, expenses and assets are recognised net of the amount

of GST except where:

- the GST incurred on purchase of goods and services is not

recoverable from the taxation authority, in which case, the GST

is recognised as part of the cost of acquisition of the asset or as

part of the expense item applicable; and

- receivables and payables are stated with the GST amount

included.

The net amount of GST recoverable from, or payable to, the

taxation authority is included as part of receivables or payables in

the balance sheet.

Cash fl ows are included in the cash fl ow statement on a gross

basis and the GST component of cash fl ows arising from investing

and fi nancing activities, which is recoverable from, or payable to,

the taxation authority are classifi ed as operating cash fl ows.

Employee benefi ts

Wages and salaries, annual leave, sick leave, workers’ compensation

and long service leave

Provision has been made in the fi nancial statements for benefi ts

accruing to employees in relation to sick leave (where mandatory

obligation exists), annual leave, long service leave and workers’

compensation. All on-costs, including superannuation, payroll

tax, workers’ compensation premiums and fringe benefi ts tax are

included in the determination of provisions.

Liabilities arising in respect of wages and salaries, annual leave,

sick leave and any other employee benefi ts expected to be settled

within twelve months of the reporting date are measured at their

nominal amounts based on remuneration rates which are expected

to be paid when the liability is settled. All other employee benefi t

liabilities are measured at the present value of the estimated

future cash outfl ow to be made in respect of services provided

by employees up to the reporting date. In determining the present

value of future cash outfl ows, the market yield as at the reporting

date on national government bonds, which have terms to maturity

approximating the terms of the related liability, are used.

Employee benefi t expenses and revenues arise in respect of the

following categories:

- wages and salaries, non-monetary benefi ts, annual leave, long

service leave, sick leave and other leave benefi ts; and

- other types of employee benefi ts are recognised against profi ts

on a net basis in respective categories.

Superannuation

The PMP Group has a defi ned benefi t fund that provides defi ned

benefi ts based on years of membership and fi nal average salary

and accumulation benefi ts (defi ned contribution fund). Employees

contribute to the plan at various percentages of their wages and

salaries.

An asset or liability in respect of the defi ned benefi t fund is

recognised in the balance sheet, and is measured as the present

value of the defi ned benefi t obligation plus unrecognised actuarial

gains/losses less the fair value of the superannuation fund’s

assets at that date and any unrecognised past service cost. The

present value of the defi ned benefi t fund has been determined

using the projected unit credit actuarial valuation method. Various

assumptions are required when determining the Group’s benefi t

obligation. These assumptions and the related carrying amounts

are discussed in Note 23.

Actuarial gains and losses are immediately recognised in the

income statement.

Contributions to the defi ned contribution fund are recognised as an

expense as they become payable.

Share-based payment transactions

Share-based payment transactions are provided to employees via

the PMP employee long term incentive plan and the CEO share

option scheme. Information relating to these schemes is set out

in Note 24.

The fair value of options is recognised as an employee benefi t

expense with a corresponding increase in equity. The fair value

is measured at grant date and recognised over the period during

which the employees become unconditionally entitled to the

options. The fair value is determined by an external valuer taking

into account the terms and conditions upon which the instruments

were granted as discussed in Note 24.

The fair value of the options excludes the impact of any

non-market based vesting conditions. Non-market based vesting

conditions are included in assumptions about the number of

options that are expected to ultimately vest. At each balance sheet

date, the PMP Group revises its estimate of the number of options

that are expected to become exercisable. The employee benefi t

expense recognised each period takes into account the most

recent estimate.

Upon the exercise of options, the balance of the share-based

payments reserve relating to those options is transferred to

contributed equity.

No expense is recognised for options that do not ultimately

vest, except for options where vesting is conditional upon a

market condition.

Interest bearing liabilities

All loans are measured at the principal amount, being the fair value

of the consideration received net of issue costs associated with

the borrowing.

After initial recognition, loans are subsequently measured at

amortised cost using the effective interest method. Amortised

cost is calculated by taking into account any issue costs, and any

discount or premium on settlement.

Finance costs

Interest costs on funds invested in qualifying assets are recorded

as a capitalised cost of the project until commercial production

commences. Thereafter, the capitalised interest is amortised over

the period that the benefi ts are expected to be received. Other

fi nance costs are expensed.

Provisions

Provisions are recognised when the PMP Group has a legal,

equitable or constructive obligation to make a future sacrifi ce of

economic benefi ts to other entities as a result of past transactions

or other past events, it is probable that a future sacrifi ce of economic

benefi ts will be required and a reliable estimate can be made of the

amount of the obligation.

If the effect of the time value of money is material, provisions are

determined by discounting the expected future cash fl ows at a pre-

tax rate that refl ects current market assessments of the time value

of money and, where appropriate, the risks specifi c to the liability.

Where discounting is used, the increase in the provision due to the

passage of time is recognised as a fi nance cost.

Financial instruments

The PMP Group uses derivative fi nancial instruments such as

forward exchange contracts and interest rate swaps to hedge its

risks associated with interest rate and foreign currency fl uctuations.

Derivative fi nancial instruments are initially recognised at cost on

the date a derivative contract is entered into and are subsequently

re-measured to their fair value.

The fair value of forward exchange contracts is calculated by

reference to current forward contracts with similar maturity profi les.

The fair value of interest rate swap contracts is determined by

reference to market values for similar instruments.

The method of recognising the resulting gain or loss depends on

whether the derivative is designated as a hedging instrument, and

if so, the nature of the hedge relationship. The PMP Group policy

is to undertake hedging in respect of certain recognised assets or

liabilities or a fi rm commitment (fair value hedge relationships); and

for highly probable forecast sales or purchases (cash fl ow hedge

relationships).

The PMP Group documents at the inception of the transaction the

relationship between hedging instruments and hedged items, as


well as its risk management objective and strategy for undertaking

various hedge transactions. The PMP Group also documents its

assessment, both at hedge inception and on an ongoing basis, of

whether the derivatives that are used in the hedging relationship

have been and will continue to be highly effective in offsetting

changes in fair values and cash fl ows of hedged items.

(i) Fair value hedge

Changes in fair value of derivatives that are designated and qualify

as fair value hedges are recorded in the income statement, together

with any changes in the fair value of the hedged asset or liability

that are attributable to the hedged risk.

(ii) Cash fl ow hedge

The effective portion of changes in the fair value of derivatives

that are designated and qualify as cash fl ow hedges is

recognised in equity in the hedging reserve. The gain or loss

relating to the ineffective portion is recognised immediately in the

income statement.

Amounts accumulated in equity are recycled in the income

statement in the periods when the hedged item will affect the profi t

and loss. However, when the forecast purchase or sale transaction

that is hedged results in the recognition of a non-fi nancial asset or

charge to cost of sales, the gains and losses previously deferred

in equity are transferred from equity and included as a basis

adjustment to the initial cost or carrying amount of the asset or

profi t and loss.

Hedge accounting is discontinued when the hedging instrument

expires or is sold, terminated or exercised, or no longer qualifi es for

hedge accounting. At that point in time, any cumulative gain or loss

on the hedging instrument recognised in equity is kept in equity

until the forecasted transaction occurs. If a hedged transaction

is no longer expected to occur, the net cumulative gain or loss

recognised in equity is transferred to net profi t or loss for the year.

(iii) Derivatives that do not qualify for hedge accounting

Certain derivatives do not qualify for hedge accounting. Changes

in the fair value of any derivative instrument that does not qualify

for hedge accounting are recognised immediately in the income

statement.

Earnings per share

Basic EPS is calculated as net result attributable to members,

adjusted to exclude costs of servicing equity (other than dividends),

divided by the weighted average number of ordinary shares,

adjusted for any bonus element.

Diluted EPS is calculated as net result attributable to members,

adjusted for:

- costs of servicing equity (other than dividends);

- the after tax effect of dividends and interest associated with

dilutive potential ordinary shares that have been recognised as

expenses; and

- other non-discretionary changes in revenues or expenses during

the period that would result from the dilution of potential ordinary

shares;

divided by the weighted average number of ordinary shares and

dilutive potential ordinary shares, adjusted for any bonus element.

Contributed equity

Issued and paid up capital is recognised at the fair value of the

consideration received by the company. Any transaction costs

arising on the issue of the ordinary shares are recognised directly in

equity as a reduction of the share proceeds received. Transaction

costs arising on the buy-back of ordinary shares is also recognised

directly in equity as an increase in the cost of the buy-back.

Dividends

Provision is made for the amount of any dividend declared,

being properly authorised and no longer at the discretion of the

entity, on or prior to the fi nancial year end but not distributed at

balance date.

Segment reporting

A business segment is identifi ed for a group of assets and operations

engaged in providing products or services that are subject to risks

and returns that are different to those of other business segments.

A geographical segment is identifi ed when products or services are

provided within an economic environment that is subject to risks

and returns that are different from other geographical segments.

Business combinations

The purchase method of accounting is used to account for all

business combinations. Cost is measured at fair value of the assets

given, equity instruments issued or liabilities incurred plus costs

directly attributable to the acquisition.

Identifi able assets acquired and liabilities and contingent liabilities

assumed in a business combination are measured initially at fair

value at acquisition date. The excess of cost over the fair value

of net assets acquired is recorded as goodwill. If the cost of

acquisition is less than the fair value of the net assets acquired, the

difference is recognised directly in the income statement.

Comparative amounts

Where necessary, comparatives have been reclassifi ed and

repositioned for consistency with current year disclosures.

New accounting standards and interpretations

Certain new accounting standards and interpretations have been

published that are not mandatory for 30 June 2009 reporting

periods. The Group and the parent entity’s assessment of the

impact of these is set out below.

i) AASB 8: Operating Segments and AASB 2007-3: Amendments

to Australian Accounting Standards arising from AASB 8. AASB

8 was issued in February 2007 and replaces the presentation

requirements of segment reporting in AASB 114. It is applicable

for annual reporting periods beginning on or after 1 January

2009. AASB 8 requires adoption of a ‘management approach’ to

reporting on fi nancial performance, reporting the information based

on what the key decision makers use internally for evaluating

segment performance. The impact on the Group has not yet been

determined, however it is expected to only impact disclosures

presented.

ii) Revised AASB 101: Presentation of Financial Statements and

AASB 2007-8: Amendments to Australian Accounting Standards

arising from AASB 101. A revised AASB 101 was issued in

September 2007 and is applicable to PMP from 1 July 2009. The

impact of this standard will be on the disclosure in the fi nancial

statements and the titles of the fi nancial statements will change.

It requires that all non-owner comprehensive changes in equity be

presented in one statement of income or in a separate income

statement and statement of comprehensive income. Components

of comprehensive income may not be presented in the statement

of changes in equity. Income tax and reclassifi cation adjustments

relating to each component of other comprehensive income have

to be disclosed.

iii) AASB 3: Business Combinations (2008), AASB 127: Consolidated

and Separate Financial Statements and AASB 2008-3: Amendments

to Australian Accounting Standards arising from AASB 3 and AASB

127. A revised AASB 3 was issued in March 2008 and is applicable

to PMP from 1 July 2009 (business combinations occurring after

this date). The revised standard introduces greater emphasis on the

use of fair values and increases volatility in the income statement

from changes in the accounting treatment of transaction costs,

changes in the fair value of contingent consideration and settlement

of pre-existing contracts and share-based payments. The standard

also requires re-measurement of interests to fair value on gaining or

losing control. The application of these standards may impact the

Group in future periods should acquisitions be made.

iv) AASB 2009-2: Amendments to Australian Accounting Standards

- Improving Disclosures about Financial Instruments. The standard

amends AASB 7 “Financial Instruments - Disclosures” to require

enhanced disclosures about fair value measurement and liquidity

risk. It is applicable to PMP from 1 July 2009. The impact of this

standard will be on the disclosures presented.



2009 2008 2009 2008YEAR ENDED 30 JUNE 2009 NOTES $’000 $’000 $’000 $’000

2a Revenue

Sales revenue 1,345,611 1,347,253 - -

Included in (loss)/profi t before income tax are the following items of other revenue:

Dividends

Related parties within the wholly owned group - - - 20,000

Other income - external 7,158 6,868 72 -

Other income - related party within the wholly owned group - - 2,560 -

Discount on acquisition 27 - 3,650 - -

Rental income 2,870 1,115 1,649 732

Interest

Bank interest 3 450 513 802 106

Net gains on disposal of property, plant and equipment - 129 - -

Total other revenue 10,478 12,275 5,083 20,838

Total revenue 22 1,356,089 1,359,528 5,083 20,838

2b Signifi cant items

Included in net (loss)/profi t after income tax are the following signifi cant items of revenue and expense:

Signifi cant revenues

Discount on acquisition 27 - 3,650 - -

Aggregate signifi cant revenue items - 3,650 - -

Signifi cant expenses

Restructuring - redundancy costs 23,757 4,498 2,273 625

Other restructure initiatives

- including business combination integration costs and other one off costs 13,827 7,078 3,360 2,644

Net loss on disposal/write off of plant and equipment 5,935 - 364 -

Impairment of goodwill - 1,009 - -

Impairment of plant and equipment held for sale to fair value less costs to sell 14,329 2,284 - -

Impairment of plant and equipment 7,309 5,183 - -

Aggregate signifi cant expense items

(included in (loss)/profi t before fi nance costs and income tax) 65,157 20,052 5,997 3,269

Net signifi cant items expense

(included in (loss)/profi t before fi nance costs and income tax) (65,157) (16,402) (5,997) (3,269)

Signifi cant tax items - 43,027 - 43,027

Total, net signifi cant items (65,157) 26,625 (5,997) 39,758

Tax benefi t associated with signifi cant items 19,787 48,733 1,799 44,008




2c (Loss)/profi t before income tax

(Loss)/profi t before income tax is arrived at after charging/(crediting) the following items:

Cost of goods sold 1,040,745 1,038,313 - -

Lease rental expenses - operating leases 23,597 21,747 - -

Net foreign exchange (gain)/loss (566) 28 (131) (25)

Share-based payment plans 19 (504) (1,169) (504) (1,169)

Net loss on disposal of property, plant and equipment 6,055 - 385 46

Defi ned benefi t plan actuarial loss/(gain) 23(a) 1,698 (410) 1,698 (410)

Impairment of plant and equipment 2(b) 21,638 7,467 - -

Impairment of goodwill 2(b), 11 - 1,009 - -

Impairment of investment - - - 820

Provisions (net movement):

Doubtful debtors 5 390 (416) 21,562 (217,482)

2009 2008 2009 20082d Auditors’ remuneration $ $ $ $

Auditing the accounts

Chief entity auditors: Deloitte Touche Tohmatsu 378,000 350,000 281,000 272,000

Other services

Deloitte Touche Tohmatsu: - Due diligence 321,000 52,365 220,500 52,365

- Taxation compliance and consulting* 140,923 42,000 86,507 -

- Verifi cation services 21,917 - 21,917 -

- Consulting advice - 212,800 - 8,580

- Actuarial advice* - 75,466 - -

Total auditors’ remuneration 861,840 732,631 609,924 332,945

* In the year ended 30 June 2008, these services were engaged by entities within the PMP Group but were payable by a third party.

2009 2008 2009 20082e Depreciation and amortisation $’000 $’000 $’000 $’000

Depreciation

Freehold buildings 10(a) 1,641 1,685 14 15

Leasehold improvements 10(a) 966 759 270 139

Plant and equipment 10(a) 37,811 37,486 3,742 1,669

Leased plant and equipment 10(a) 170 139 - -

Total depreciation 40,588 40,069 4,026 1,823

Amortisation

Development costs 11(a) 646 760 - -

Supplier relationships 11(a) 444 - - -

Customer relationships 11(a) 94 - - -

Total amortisation 1,184 760 - -

Total depreciation and amortisation 41,772 40,829 4,026 1,823

3 Finance costs

Interest expense

Bank loans and overdraft 18,775 17,795 220 175

Finance lease charges 111 188 - -

Long term payables - 447 - -

Total interest expense 18,886 18,430 220 175

Financial instruments 9,616 901 - -

Total fi nance costs 28,502 19,331 220 175

Interest income 2(a) (450) (513) (802) (106)

Net fi nance costs 28,052 18,818 (582) 69




2009 2008 2009 2008YEAR ENDED 30 JUNE 2009 $’000 $’000 $’000 $’000

4 Income tax

(a) Reconciliation of income tax benefi t

(Loss)/profi t before income tax (39,467) 49,370 (39,472) 232,925

Prima facie income tax (benefi t)/expense thereon at 30% (2008: 30%) (11,840) 14,811 (11,842) 69,878

Tax effect of timing and other differences:

Non assessable income (658) (2,332) (213) (65,706)

Non-deductible/(additional) depreciation and amortisation of

property, plant and equipment (40) (40) - -

Exempt dividends - - - (6,000)

Effect of differences in overseas tax rates - 196 - -

Income tax under/(over) provided in previous year 73 (217) 225 768

Non deductible items for tax purposes 168 1,054 6,532 587

Deferred tax asset brought to account* - (43,027) - (43,027)

Income tax benefi t attributable to (loss)/profi t (12,297) (29,555) (5,298) (43,500)

Major component of income tax benefi t:

Current tax (benefi t)/expense (4,728) 7,224 (4,644) (3,386)

Deferred tax benefi t (7,569) (36,779) (654) (40,114)

Income tax benefi t attributable to (loss)/profi t (12,297) (29,555) (5,298) (43,500)

*: As a result of the settlement reached between the company and the Australian Taxation Offi ce in November 2007, the Australian Group increased carry

forward income tax losses to $190m for off-set against the company’s future income, an increase of $143.5m from the amount recognised in the Financial

Statements for the year ended 30 June 2007. The company therefore recognised an income tax benefi t of $43m (tax effect) in the income statement in the

prior year.

(b) Deferred tax assets and deferred tax liabilities

At 30 June 2009 there is no recognised or unrecognised deferred tax liability for taxes that would be payable on the unremitted earnings of PMP’s wholly

owned subsidiaries, as the PMP Group has no liability for additional taxation should such amounts be remitted (2008:$nil).

(c) Franking credits 2009 2008

The amount of franking credits available are:

Franking account balance as at the end of the fi nancial year at 30% (2008:30%) 3,674 615

Franking credits that will arise from the payment of income tax payable as at the end of the fi nancial year - 814

Franking debits that will arise from the reimbursement of income tax (1,806) -

Franking debits that will arise from the dividends declared subsequent to balance date but not recognised - (2,618)

as a distribution to equity holders during the period

Franking account balance 1,868 (1,189)

(d) Tax consolidation and tax effect accounting by members of the tax consolidated group

Effective 1 July 2003, for the purposes of income taxation, PMP Limited and its 100% owned Australian subsidiaries formed a tax consolidated group.

Members of the group have entered into a tax sharing arrangement in order to allocate income tax expense to the wholly owned subsidiaries on a pro-rata

basis. The agreement also provides for the allocation of income tax liabilities between the entities should the head entity default on its obligations. At the

balance date the possibility of default is remote. The head entity of the tax consolidation group is PMP Limited.

Members of the tax consolidated group have entered into a tax funding agreement. The tax funding agreement provides for the allocation of current tax

assets and liabilities between wholly owned group members. Each group member of the PMP tax group calculates its current year tax liability on the basis of

the stand alone approach. Once each member has calculated its own current year tax liability/tax loss the head entity will then assume these current year

tax liabilities/tax losses and be paid/pay compensation for this assumption by way of an intercompany receivable/payable. Allocations under the tax funding

agreement are made on a yearly basis.



5 Receivables

Trade debtors* 138,653 138,935 1,232 1,693

Provision for doubtful debts 5(a) (2,771) (2,381) - (56)

Net trade debtors 135,882 136,554 1,232 1,637

Other debtors 5(d) 4,614 5,826 2,051 3,353

Loans to related parties within the wholly owned group 5(c) - - 909,943 934,541

Provision for related party loans 5(c) - - (382,053) (360,435)

Total current receivables 140,496 142,380 531,173 579,096

* : Trade debtors are non-interest bearing and are on commercial terms. There were no material unhedged foreign currency receivables.

(a) Impaired trade receivables

PMP Group:

At 30 June 2009 $4,599,000 (2008: $3,243,000) nominal value trade receivables have been identifi ed as either fully or partially impaired. As a result

a provision of $2,771,000 (2008: $2,381,000) has been recognised. The individually impaired receivables relate to a variety of customers who are in

unexpectedly diffi cult economic situations. It was assessed that a portion of the receivable is expected to be recovered.

PMP Limited:

At 30 June 2009 $nil (2008: $61,000) nominal value trade receivables have been identifi ed as either fully or partially impaired.

As a result, no provision (2008: $56,000) has been recognised.

2009 2008 2009 2008Movements in the provision for doubtful debts are as follows: $’000 $’000 $’000 $’000

Balance as at 1 July 2,381 2,797 56 -

Provision for doubtful debts recognised 3,127 1,718 - 56

Amounts written off (1,982) (854) - -

Amounts recovered (68) - (17) -

Unused amount reversed (685) (1,212) (39) -

Net foreign currency translation difference (2) (68) - -

Balance at 30 June 2,771 2,381 - 56

In determining the recoverability of a trade receivable the Group will consider any change in the credit quality of the receivable from the date credit

was originally granted up to the reporting date. The creation and release of the provision for impaired receivables has been included in “other (expenses)/

recoveries” in the income statement. Amounts due are generally written off when there is no expectation of recovering additional cash.

(b) Past due but not impaired

At 30 June 2009 there were $14,794,000 (2008: $13,366,000) of trade receivables in the PMP Group past due but not impaired.

In PMP Limited this amounted to $24,000 (2008:$869,000).

2009 2008 2009 2008The aging analysis of these trade receivables is as follows: $’000 $’000 $’000 $’000

Past due 1 - 30 days 11,383 10,925 14 777

Past due 31 - 60 days 777 1,436 - 81

Past due 61 - 90 days 1,430 8 10 2

Past due greater than 90 days 1,204 997 - 9

14,794 13,366 24 869

There are no receivables that have had renegotiated terms that would otherwise, without that renegotiation, have been past due or impaired.

(c) Related party loans

At 30 June 2009, the nominal value of loans from PMP Limited to related parties within the wholly owned group that had been identifi ed as either fully or

partially impaired was $767,310,710 (2008: $714,377,000). A provision of $382,053,000 (2008: $360,435,000) has been recognised against these. The

increase in the provision in the year has been to recognise provision against amounts impaired. The increase in the provision of $21,618,000 has been

recognised within “other (expenses)/recoveries” in the income statement.

(d) Other debtors

Other debtors generally arise from transactions outside of usual operating activities of the Group. Other debtors does not contain impaired assets and are

not past due. Collateral is not usually obtained.




2009 2008 2009 2008

YEAR ENDED 30 JUNE 2009 NOTES $’000 $’000 $’000 $’000

6 Inventories

Raw materials and stores at cost 47,950 60,040 - -

Less: provision for diminution (770) (679) - -

Net raw materials and stores 47,180 59,361 - -

Finished goods at cost 28,178 28,688 - -

Work in progress at cost 13,019 7,791 - -

Total current inventories 88,377 95,840 - -

7 Financial assets

Interest rate swaps 30(b)(ii) - 4,731 - -

Forward exchange contracts 30(c)(iv) - 58 - -

Total current fi nancial assets - 4,789 - -

8 Other assets

Current other assets

Prepayments 8,398 6,965 1,001 686

Total current other assets 8,398 6,965 1,001 686

Non-current other assets

Shares in controlled entities - unlisted at cost - - 174,843 174,795

Shares in other entities - unlisted at cost 280 280 - -

Write-down to realisable value (40) (40) - -

Other assets 7 145 - -

Pension asset 23 2,079 3,791 2,079 3,791

Total non-current other assets 2,326 4,176 176,922 178,586

9 Non-current assets classifi ed as held for sale

Plant and equipment 9(a) 7,878 8,815 - -

Total non-current assets classifi ed as held for sale 7,878 8,815 - -

(a) Reconciliation

Carrying amount at beginning of year 8,815 - - -

Assets classifi ed as held for sale in the year 14,990 11,099 - -

Impairment on re-measurement to fair value less costs to sell (14,635) (2,284) - -

Assets sold in the year (492) - - -

Removal of assets no longer classifi ed as held for sale (800) - - -

Carrying amount at end of year 7,878 8,815 - -

Non-current assets classifi ed as held for sale at 30 June 2009 comprise four collation machines, two presses, a stitcher and a disc carrier. During

the year a press and a binder were sold and a stitcher was transferred to PMP Print (NZ) for continuing use in the business and is therefore no longer

classifi ed as a non-current asset held for sale. The impact of the decision on the Group not to sell the stitcher has been an increase in fi xed assets

of $1,710,000, a reduction in assets held for sale of $800,000 and a credit to other “(expenses)/recoveries” in the income statement of $910,000 to

reverse the impairment that had previously been recognised.

The fair value less costs to sell of the collation machines at 30 June 2009 is $5,475,000, these assets relate to the Distribution segment. The presses,

stitcher and the disc carrier relate to the Printing segment.

The impairment has been recognised in the income statement within “other (expenses)/recoveries” and has arisen partly from the decision to sell

rather than use the collation equipment but also, in respect to the Print related assets, the further downturn in the global market for such assets since

30 June 2008. All assets are being actively marketed for sale.



10 Property, plant and equipment

Land

At cost 10(a) 16,891 17,254 - -

Freehold buildings

At cost 55,953 42,843 110 278

Accumulated depreciation (18,488) (17,032) (110) (194)

Net freehold buildings 10(a) 37,465 25,811 - 84

Leasehold improvements

At cost 7,224 7,606 1,632 2,161

Accumulated amortisation (3,402) (2,952) (930) (1,098)

Net leasehold improvements 10(a) 3,822 4,654 702 1,063

Plant and equipment

At cost 666,126 691,794 32,099 32,027

Accumulated depreciation (366,748) (337,491) (11,145) (10,302)

Net plant and equipment 10(a) 299,378 354,303 20,954 21,725

Leased plant and equipment

At cost 1,600 1,549 - -

Accumulated depreciation (696) (527) - -

Net leased plant and equipment 10(a) 904 1,022 - -

Total net property, plant and equipment 10(a) 358,460 403,044 21,656 22,872





10 Property, plant and equipment (continued)

(a) Reconciliations

Reconciliations of the carrying amounts for each class of property, plant and

equipment are set out below:

LandCarrying amount at beginning of year 17,254 17,473 - -

Additions - 10 - -

Additions via acquisition - 7,761 - -

Disposals (365) (7,761) - -

Net foreign currency translation difference 2 (229) - -


Freehold buildingsCarrying amount at beginning of year 25,811 27,482 84 99

Additions 466 198 - -

Additions via acquisition - 9,939 - -

Disposals (70) (9,829) (70) -

Transfer from other fi xed asset category 12,897 303 - -

Depreciation (1,641) (1,685) (14) (15)


Carrying amount at end of year 37,465 25,811 - 84

Leasehold improvementsCarrying amount at beginning of year 4,654 4,593 1,063 704

Additions 144 125 3 498

Disposals (322) (12) (264) -

Transfer from other fi xed asset category 323 805 170 -

Depreciation (966) (759) (270) (139)

Net foreign currency translation difference (11) (98) - -

Carrying amount at end of year 3,822 4,654 702 1,063

Plant and equipmentCarrying amount at beginning of year 354,303 333,371 21,725 19,202

Additions 22,563 31,705 3,195 4,675

Additions via acquisition 27 1,263 56,123 - -

Disposals (7,735) (5,749) (54) (483)

Plant and equipment classifi ed as held for sale (net movement) 9 937 (8,815) - -

Impairment charge 10(b) (21,034) (8,005) - -

Transfer to other fi xed asset category (13,220) (565) (170) -

Depreciation (37,811) (37,486) (3,742) (1,669)

Net foreign currency translation difference 112 (6,276) - -

Carrying amount at end of year 299,378 354,303 20,954 21,725

Leased plant and equipmentCarrying amount at beginning of year 1,022 1,917 - -

Additions 8 - - -

Additions via acquisition 27 37 - - -

Transfer to other fi xed asset category - (542) - -

Depreciation (170) (139) - -


Carrying amount at end of year 904 1,022 - -

Total net property, plant and equipment 358,460 403,044 21,656 22,872

PMP Group

2009 2008(b) Impairment charge NOTES $’000 $’000

Loss recognised on re-measurement of plant & equipment to fair value less costs to sell 9 14,635 2,284

Reversal of impairment previously recognised (910) -

Impairment of plant and equipment to recoverable amount based on value in use calculation 2,553 618

Other impairments to plant and equipment 4,756 5,103

21,034 8,005



11 Goodwill and intangible assetsDevelopment costsAt cost 6,279 5,518 - -

Accumulated amortisation (5,245) (4,626) - -

Closing net book amount 11(a) 1,034 892 - -

Supplier relationshipsAt cost 5,331 - - -

Accumulated amortisation (444) - - -

Closing net book amount 11(a) 4,887 - - -

Customer relationshipsAt cost 652 - - -

Accumulated amortisation (94) - - -

Closing net book amount 11(a) 558 - - -

Goodwill (indefi nite useful life)At cost 11(a) 95,726 81,935 - -

Contract (indefi nite useful life)At cost 11(a) 15,011 15,011 - -

Brand/trademark (indefi nite useful life)At cost 1,050 - - -

Total net intangibles 11(a) 118,266 97,838 - -

(a) ReconciliationsDevelopment costsCarrying amount at beginning of year 892 478 - -

Additions 680 1,174 - -

Addition via acquisition 27 108 - - -

Amortisation (646) (760) - -

Carrying amount at end of year 1,034 892 - -

Supplier relationshipsCarrying amount at beginning of year - - - -

Additions via acquisition 27 5,331 - - -

Amortisation (444) - - -

Carrying amount at end of year 4,887 - - -

Customer relationshipsCarrying amount at beginning of year - - - -

Additions via acquisition 27 652 - - -

Amortisation (94) - - -

Carrying amount at end of year 558 - - -

Goodwill (indefi nite useful life)Carrying amount at beginning of year 81,935 85,939 - -


Adjustment to prior acquisition - (164) - -

Impairment charge - (1,009) - -

Disposal of business* (104) - - -

Net foreign currency translation difference 28 (2,831) - -


Contract (indefi nite useful life)Carrying amount at beginning and at end of year 15,011 15,011 - -

Brand/trademark (indefi nite useful life)Carrying amount at beginning of year - - - -


Carrying amount at end of year 1,050 - - -

Total net intangibles 118,266 97,838 - -

*: Mercury Subscriptions (a division of Gordon & Gotch New Zealand) was sold on 21 July 2008. At 30 June 2008 the assets and liabilities of

Mercury Subscriptions were at fair value and as a result there was no profi t or loss on this disposal in the year ended 30 June 2009.





11 Goodwill and intangible assets (continued)(b) Impairment testing of goodwill and intangibles with indefi nite lives

Carrying amount of goodwill and intangibles with indefi nite useful lives allocated to each cash generating unit:

Heat set web printing - Australia 56,034 56,034 - -

Directory printing - Australia 17,654 17,654 - -

Griffi n Press printing - Australia 5,015 5,015 - -

Maxum and heat set web printing - New Zealand 15,743 15,718 - -

Scribo Group - Australia 14,917 - - -

Other - New Zealand 2,424 2,525 - -

Total goodwill and intangibles (indefi nite useful life) 111,787 96,946 - -

Goodwill (indefi nite useful life) 95,726 81,935 - -

Contract (indefi nite useful life) 15,011 15,011 - -

Trademark/brand (indefi nite useful life) 1,050 - - -

Total goodwill and intangibles (indefi nite useful life) 111,787 96,946 - -

* : The goodwill associated with the acquisitions of the Cebury Group and Saxon Print is tested for impairment by combining the cash generating units

of heat set web printing-New Zealand and Maxum (formerly Cebury Group and Saxon Print) as these units together represent the lowest level that

goodwill is monitored for internal management purposes.

Key assumptions:Management judgement is required in assessing whether the carrying value of assets can be supported by the net present value of future cash fl ows.

The following are the key estimates and assumptions used in determining the net present value of future cash fl ows.

Area of judgement Assumption used in value in use calculation

Budgeted EBITDA The Group prepares three year plans which are internally approved by senior management and the Board of Directors.

These plans are the basis of its impairment testing.

Budgeted EBITDA is calculated as operating profi t before depreciation and amortisation, based upon past experience and

future outlook. Adjustments are made to budgeted EBITDA as follows:

- removal of benefi ts from future uncommitted restructuring.

- inclusion of working capital movements.

- recognition of foreign exchange movements from budgeted rates.

Long term growth rate Management’s plan is used for the fi rst three years of the Group’s value in use calculations. An annual growth rate is

assumed for years four and fi ve of 2.5% except where markets are forecast to grow ahead of the long term growth rate

and where management have identifi ed specifi c reasons for growth e.g. product mix and effi ciency savings.

After year fi ve, growth is annualised at 2.5% to perpetuity.

Budgeted capital expenditure The cash fl ow forecasts for capital expenditure are based on past experience and include the ongoing capital expenditure

required to maintain current fi xed asset levels after taking into account budgeted repairs and maintenance.

Pre-tax discount rate The pre-tax discount rate applied to the cash fl ows of each of the Group’s cash generating units in Australia and

New Zealand is 16.6% and 17% respectively (2008: 15.7%). The discount rate is based on the risk free rate for ten

year government bonds adjusted for a risk premium to refl ect the increased risk of investing in equities (equity market

risk premium) and the systematic risk adjustment (“beta”) to refl ect the risk of the Company relative to the market

as a whole.



12 Deferred tax

Deferred tax assets

Temporary differences:

- Provisions/accruals 19,767 19,352 2,129 1,576

- Cash fl ow hedges 3,049 - - -

Tax losses 57,393 52,252 55,534 52,252

Total deferred tax assets 80,209 71,604 57,663 53,828

Deferred tax liabilities

Temporary differences:

- Property, plant and equipment 7,874 13,114 2,888 2,584

- Other assets 1,564 2,380 624 1,137

- Cash fl ow hedges - 1,387 - -

- Intangible assets 2,619 986 - -

Total deferred tax liabilities 12,057 17,867 3,512 3,721

13 Payables

Current payables

Creditors - unsecured

Trade creditors and accruals* 183,508 183,080 4,577 2,274

Interest payable 2,264 2,440 - -

Loans from related parties within the wholly owned group - - 434,065 434,271

Total current payables 185,772 185,520 438,642 436,545

* :Trade creditors are non-interest bearing, and are on normal commercial terms.

14 Interest bearing liabilities

(a) Current interest bearing liabilities - fi nancial institutions

Secured

Bank loans - repayable in: Australian dollars 24,273 - - -

Finance lease liabilities (secured over the leased assets) 20(b) 847 229 - -

Unsecured

Bank overdraft - repayable in: Australian dollars 91 91 93 93

Short-term loan - repayable in: New Zealand dollars - 1,819 - -

Total current interest bearing liabilities - fi nancial institutions 25,211 2,139 93 93

(b) Non-current interest bearing liabilities - fi nancial institutionsSecuredBank loans - repayable in: Australian dollars 120,223 128,675 - -

New Zealand dollars 65,810 68,164 - -

Finance lease liabilities (secured over the leased assets) 20(b) 8 765 - -

Total non-current interest bearing liabilities - fi nancial institutions 186,041 197,604 - -




2009 2008 2009 2008NOTES $’000 $’000 $’000 $’000

15 ProvisionsCurrent provisions

Employee entitlements 26,848 28,796 2,988 2,777

Other 5,030 3,591 749 968

Total current provisions 31,878 32,387 3,737 3,745

Non-current provisionsEmployee entitlements 2,488 2,662 322 349

Other 485 495 - -

Total non-current provisions 2,973 3,157 322 349

Total provisions 34,851 35,544 4,059 4,094

16 Financial liabilitiesCurrent fi nancial liabilities

Forward currency contracts 30(c)(iv) 6,597 - - -

Interest rate swaps 30(b)(ii) 848 - - -

Total current fi nancial liabilities 7,445 - - -

Non-current fi nancial liabilitiesInterest rate swaps 30(b)(ii) 4,020 - - -

Total non-current fi nancial liabilities 4,020 - - -

Total fi nancial liabilities 11,465 - - -

YEAR ENDED 30 JUNE 2009

14 Interest bearing liabilities (continued)

(c) Interest bearing liabilities - facility details

Facility Drawn AvailableFacility details: $’000s $’000s $’000s

2009 (secured)Overdraft facility 13,960 91 13,869

Cash offsets - (30,728) -

Bill and multi-currency cash advance facilities 120,000 120,000 -

Short-term loan 15,000 - 15,000

Total bank facilities 148,960 89,363 28,869

Revolving fund facilities 178,902 121,034 57,868

Total facilities 327,862 210,397 86,737

2008 (unsecured)Overdraft facility 13,163 91 13,072

Cash offsets - (16,866) -

Bill and multi-currency cash advance facilities 150,000 150,000 -

Short-term loan 28,954 1,819 27,135

Total bank facilities 192,117 135,044 40,207

Revolving fund facilities 180,000 63,705 116,295

Total facilities 372,117 198,749 156,502

(d) Terms and conditions

On 25 June 2009, the PMP Group Bill & Revolving facility was restructured to a secured $313.9 million debt facility replacing the fully unsecured $330

million debt facility. The facility has a maturity date of 4 May 2012. Security pledged involves a fi rst ranking fi xed and fl oating charge over the assets of PMP,

including the assets of subsidiaries in Australia and New Zealand.

This facility is subject to a number of fi nancial covenants, including the PMP Group being measured against a maximum Debt/EBITDA ratio and a minimum

EBITDA/Interest ratio. It is also subject to the warranties and conditions of the agreement during the term of the facility, including a change of control clause.

Short-term loans are used to manage working capital requirements.

Note 30 (b) specifi es interest rate details relating to the PMP Group borrowing facilities and other interest rate risk exposure.




17 Contributed equityIssued and paid up capital

2009 2008Movements in ordinary share capital: Number Number

NOTES ‘000 ‘000Balance as at 1 July 339,358 300,285 627,656 568,856 627,656 568,856

Share movements in respect to:

- Share buy-back* (4,009) - (1,378) - (1,378) -

- Acquisition of subsidiary 27 - 39,020 - 58,529 - 58,529

- Options exercised - 53 (203) 62 (203) 62

Shares purchased for vested rights - - (107) - (107) -

Transfer from share-based payment reserve - - 81 209 81 209

Balance at 30 June - ordinary shares 335,349 339,358 626,049 627,656 626,049 627,656

* : All shares bought back were cancelled during the year ended 30 June 2009 with the exception of 450,000 shares which were cancelled on 4 August 2009.

Ordinary shares have no par value. Fully paid ordinary shares carry one vote per share and carry the right to dividends.

2009 2008 2009 2008$’000 $’000 $’000 $’000

18 DividendsFinal dividend

Final dividend for the year ended 30 June 2008 of 3 cents, 60% franked, based 10,181 9,009 10,181 9,009 on tax paid at 30%, paid on 17 October 2008 (2008: 3 cents, fully franked)

Interim dividendInterim dividend for the year ended 30 June 2009 of nil cents - 5,090 - 5,090(2008:1.5 cents, fully franked)

Total dividends provided for or paid 10,181 14,099 10,181 14,099

19 Reserves

Foreign currency translation reserve

Opening balance 1,067 1,830 - -

Movement in reserve relating to:

- Exchange fl uctuation on translation of overseas controlled entities 67 (763) - -

Total foreign currency translation reserve 1,134 1,067 - -

Share-based payment reserveOpening balance 607 2,701 607 2,701


- Share-based payment credit (504) (1,169) (504) (1,169)

- Transfer to retained earnings 463 (716) 463 (716)

- Transfer to contributed equity (81) (209) (81) (209)

Total share-based payment reserve 485 607 485 607

Cash fl ow hedge reserveOpening balance 127 (1,818) - -


- Cash fl ow hedge - net (losses)/gains (5,636) 2,884 - -

- Tax effect of cash fl ow hedge net loss/(gain) 1,676 (939) - -

Total cash fl ow hedge reserve (3,833) 127 - -

Total reserves (2,214) 1,801 485 607



20 Commitments

The following commitments are not refl ected in the balance sheet and are

payable/receivable as follows:

(a) Capital expenditure (i):

- not later than one year 4,952 2,279 - -

Total capital expenditure 4,952 2,279 - -

(b) Finance lease rentals - Group as lessee (ii):

- not later than one year 914 331 - -

- later than one year but not later than fi ve years 10 830 - -

Total fi nance lease rentals 924 1,161 - -

Future fi nance charges (69) (167) - -

Net fi nance lease liability 855 994 - -

Reconciled to:

Current fi nance lease liability 14(a) 847 229 - -

Non-current fi nance lease liability 14(b) 8 765 - -

Finance lease liability 855 994 - -

(c) Operating lease rentals - Group as lessee (iii):

not later than one year 17,464 19,773 5,131 5,402

later than one year but not later than fi ve years 39,546 34,656 17,880 19,205

later than fi ve years 15,442 12,866 10,008 12,855

Total operating lease rentals (lessee) 72,452 67,295 33,019 37,462

(d) Operating lease rentals - Group as lessor (iv):

not later than one year 3,749 2,649 1,612 1,845

later than one year but not later than fi ve years 8,842 8,928 7,005 8,039

later than fi ve years 1,900 4,448 1,900 4,448

Total operating lease rentals (lessor) 14,491 16,025 10,517 14,332

Total net commitments for expenditure 63,768 54,543 22,502 23,130

(i) At 30 June 2009 and 30 June 2008 the Group capital expenditure commitments relate to the acquisition of new plant and equipment.

(ii) The Group has fi nance leases for various items of plant and machinery. The weighted average interest rate impact in the leases is 11.20%

(2008: 10.81%). These leases have terms of renewal, but no escalation clauses. Certain leases contain purchase options.

(iii) Operating leases are entered into in the normal course for land and buildings, motor vehicles, computer equipment and plant and machinery. Rental

payments are generally fi xed, however some agreements contain infl ation escalation clauses. No operating leases contain restrictions on fi nancing or

other leasing activities.

(iv) Operating leases are entered to sub-lease surplus offi ce space. Rental payments include fi xed and infl ation escalation clauses.



Interest held

Country of 2009 2008YEAR ENDED 30 JUNE 2009 Incorporation NOTES % %

21 Controlled entities

Pacifi c Publications Holdings Pty. Limited Australia (a) 100 100

Attic Futura Pty Limited Australia (a) 100 100

Pacifi c O’Brien Publications Pty. Limited Australia 100 100

Total Sampling Pty. Limited Australia (a) 100 100

PMP Publishing Pty. Limited Australia (a) 100 100

PMP Print Pty. Limited Australia (a) 100 100

PMP Property Pty. Limited Australia (a) 100 100

PT Pac-Rim Kwartanusa Printing Indonesia 95 95

PMP Advertising Solutions Pty. Limited (formerly Prestige Litho Pty. Limited) Australia (a) 100 100

PMP Home Media Pty. Limited (formerly Pac-Rim Printing Pty. Limited) Australia (a) 100 100

Shomega Pty Limited Australia (a) 100 100

Show-Ads Pty Limited (formerly Autry Holdings Pty Limited) Australia (a) 100 100

Linq Plus Pty. Limited (formerly Canberra Press Holdings Pty Limited) Australia (a) 100 100

PMP Wholesale Pty. Limited Australia (a) 100 100

PMP Digital Pty. Limited (formerly Show-Ads Omega Pty. Limited) Australia (a) 100 100

Marketspace Pty. Limited Australia (a) 100 100

Pacifi c Intermedia Pty. Limited (formerly Home Show Television Pty. Limited) Australia (a) 100 100

The Argus & Australasian Pty. Limited Australia (a) 100 100

Gordon and Gotch Australia Pty. Limited Australia (a) 100 100

The Scribo Group Pty Ltd Australia (b) 100 -

Bookwise International Pty Ltd Australia (b) 100 -

Brumby Books & Music Pty Ltd Australia (b) 100 -

Tower Books Pty Ltd Australia (b) 100 -

Gary Allen Pty Limited Australia (b) 100 -

Brumby Books (NZ) Limited New Zealand 100 -

Bookwise Asia Pte Ltd Singapore 100 -

PMP Directories Pty Limited Australia (a) 100 100

Argyle Print Pty. Ltd. Australia (b) 100 100

Red PPR Holdings Pty Limited Australia (a) 100 100

Pacifi c Micromarketing Pty. Limited Australia (a) 100 100

PMP Finance Pty. Limited Australia (a) 100 100

PMP Share Plans Pty. Limited Australia 100 100

Manningtree Investments Pty. Limited Australia (a) 100 100

Canberra Press Pty. Limited Australia (a) 100 100

PMP (NZ) Limited New Zealand 100 100

Pac-Rim Finance (NZ) Limited New Zealand 100 100

PMP Print Limited New Zealand 100 100

PMP Maxum Limited (formerly PMP Digital Limited) New Zealand 100 100

PMP Distribution Limited New Zealand 100 100

Pacifi c Intermedia (NZ) Limited New Zealand 100 100

Gordon and Gotch (NZ) Limited New Zealand 100 100

PMP Digital Limited New Zealand 100 100

(a) These companies entered into a new deed of cross guarantee dated 27 June 2008 with PMP Limited which replaced the previous deed dated 10 June

1992. The deed provides that all parties to the deed will guarantee to each creditor payment in full of any debt of each company participating in the

deed on winding up of that company. As a result of a Class Order issued by the Australian Securities and Investments Commission, these companies are

relieved from the requirement to prepare fi nancial statements.

(b) On 11 June 2009 these companies were joined as parties to the Deed of Cross Guarantee referred above.

2009 2008YEAR ENDED 30 JUNE 2009 $’000 $’000

21 Controlled entities (continued)

The aggregate assets, liabilities and net result after income tax of the companies which

are parties to the Deed of Cross Guarantees are as follows (c):

Income statement of the closed group

Sales revenue 1,136,489 1,084,546

Other revenue 10,077 13,127

Revenue 1,146,566 1,097,673

Raw materials and consumables used (293,513) (258,661)

Cost of fi nished goods sold (354,682) (328,430)

Employee expenses (316,135) (290,829)

Outside production services (35,648) (42,880)

Freight (31,184) (21,413)

Repairs and maintenance (16,424) (16,669)

Occupancy costs (20,687) (18,395)

Other expenses (58,514) (31,230)

Profi t before depreciation, amortisation, fi nance costs and income tax 19,779 89,166

Depreciation and amortisation (35,037) (29,018)

(Loss)/profi t before fi nance costs and income tax (15,258) 60,148

Finance costs (18,919) (10,545)

(Loss)/profi t before income tax (34,177) 49,603

Income tax benefi t 10,046 28,451

Net (loss)/profi t attributable to members of the parent entity (24,131) 78,054

(c) Notes on the closed group:

- PMP Limited is the ultimate parent company of the PMP Group.

- All companies have ordinary share capital.

- Since the date of their appointment, 2 November 2007, all companies are audited by Deloitte Touche Tohmatsu or its

affi liates. Prior to this date the auditors were Ernst & Young.

- On 11 June 2009 the Australian entities within the Scribo Group Pty Ltd and Argyle Print Pty Limited joined as parties to

the Deed of Cross Guarantee as identifi ed on page 72. Previously these entities were not parties to the Deed of Cross

Guarantee, the prior year comparatives have not been restated.



2009 2008YEAR ENDED 30 JUNE 2009 $’000 $’000

21 Controlled entities (continued)

Balance sheet of the closed group

Current assets

Cash and cash equivalents 2,855 98

Receivables 108,332 107,536

Inventories 75,660 82,398

Financial assets - 3,616

Other 7,996 6,465

Non-current assets classifi ed as held for sale 7,878 -

Total current assets 202,721 200,113

Non-current assets

Property, plant and equipment 314,964 316,978

Goodwill and intangible assets 100,102 79,597

Deferred tax assets 75,919 68,913

Other 14,467 65,523

Total non-current assets 505,452 531,011

Total assets 708,173 731,124

Current liabilities

Payables 159,571 154,356

Interest bearing liabilities - fi nancial institutions 24,451 91

Income tax payable 144 1,717

Provisions 29,184 28,919

Financial liabilities 1,852 540

Total current liabilities 215,202 185,623

Non-current liabilities

Interest bearing liabilities - fi nancial institutions 120,231 130,190

Deferred tax liabilities 11,445 16,513

Provisions 2,973 3,157

Financial liabilities 2,154 -

Total non-current liabilities 136,803 149,860

Total liabilities 352,005 335,483

Net assets 356,168 395,641

Equity

Contributed equity 626,049 627,656

Reserves 41 289

Accumulated losses (269,922) (232,304)

Total equity 356,168 395,641

YEAR

END

ED 3

0 JU

NE 2

009

22Se

gmen

tal r

epor

tSe

gmen

t pro

duct

s an

d lo

catio

nsTh

e co

nsol

idat

ed e

ntity

’s o

pera

ting

com

pani

es a

re o

rgan

ised

and

man

aged

sep

arat

ely

acco

rdin

g to

the

nat

ure

and

serv

ices

the

y pr

ovid

e:

- Th

e Print

ing

segm

ent

prin

ts a

var

iety

of

publ

icat

ions

to

a w

ide

rang

e of

cus

tom

ers

and

indu

stries

.

- Th

e D

istr

ibut

ion

segm

ent

spec

ialis

es in

lett

erbo

x di

stribu

tion.

- Th

e G

ordo

n an

d G

otch

seg

men

t sp

ecia

lises

in m

agaz

ine

and

book

dis

trib

utio

n, p

rovi

ding

ser

vice

s to

a w

ide

rang

e of

indu

stries

foc

usin

g on

sup

ply

chai

n m

anag

emen

t an

d m

erch

andi

sing

sol

utio

ns.

- Th

e D

igita

l Pre

med

ia s

egm

ent

prov

ides

a v

arie

ty o

f se

rvic

es s

peci

alis

ing

in d

igita

l art

.

Geo

grap

hica

lly, t

he g

roup

ope

rate

s in

tw

o pr

edom

inan

t se

gmen

ts, b

eing

Aus

tral

ia a

nd N

ew Z

eala

nd.

Segm

ent A

ccou

ntin

g Po

licie

sSeg

men

t ac

coun

ting

polic

ies

are

the

sam

e as

the

con

solid

ated

ent

ity’s

pol

icie

s de

scribe

d in

Not

e 1.

Prin

ting

Dist

ribut

ion^

Gord

on a

nd G

otch

^Di

gita

l Pre

med

iaCo

rpor

ate

Cons

olid

ated

2009

2008

2009

2008

2009

2008

2009

2008

2009

2008

2009

2008

(a)

Busi

ness

Seg

men

ts$’

000

$’00

0$’

000

$’00

0$’

000

$’00

0$’

000

$’00

0$’

000

$’00

0$’

000

$’00

0

Reve

nue

Sal

es r

even

ue70

7,17

5 7

41

,058

12

2,10

8 1

24

,354

49

6,53

4 4

61

,13

1

33,1

19

40

,01

0

-

-

1,35

8,93

6 1

,36

6,5

53

Oth

er r

even

ue2,

532

4,9

53

1,

504

1,5

55

6,

017

5,2

21

10

4 1

18

32

1 4

28

10

,478

1

2,2

75

Inte

rseg

men

t re

venu

e(1

0,75

9)(1

6,2

24)

(1,1

34)

(1,7

01)

-

-

(1,4

32)

(1,3

75

) -

-

(1

3,32

5)(1

9,3

00

)

Tota

l seg

men

t re

venu

e69

8,94

8 7

29

,787

12

2,47

8 1

24

,208

50

2,55

1 4

66

,35

2

31,7

91

38

,75

3

321

42

8

1,35

6,08

9 1

,35

9,5

28

EBIT

DA

* be

fore

sig

nifi c

ant

item

s77

,056

10

0,3

00

10,0

40

10,5

03

13,5

91

14

,13

9

8,44

8 8

,74

4

(13,

171)

(7,7

54

)95

,964

1

25

,93

2

Dep

reci

atio

n an

d am

ortis

atio

n(3

5,47

9)(3

4,8

41)

(3,0

43)

(2,8

76)

(1,9

91)

(1,7

14

)(1

,259

)(1

,39

8)

-

-

(41,

772)

(40

,82

9)

Seg

men

t EB

IT b

efor

e si

gnifi

cant

item

s41

,577

6

5,4

59

6,99

7 7,6

27

11,6

00

12

,42

5

7,18

9 7

,34

6

(13,

171)

(7,7

54

)54

,192

8

5,1

03

Sig

nifi c

ant

item

s(3

6,89

6)(1

0,4

87

)(1

6,22

9)(1

,252

)(6

,567

)(2

,29

2)

(1,1

99)

(35

3)

(4,2

66)

(2,0

18

)(6

5,15

7)(1

6,4

02

)

Segm

ent E

BIT

afte

r sig

nifi c

ant i

tem

s4,

681

54

,972

(9

,232

)6

,375

5,

033

10

,13

3

5,99

0 6

,99

3

(17,

437)

(9,7

72

)(1

0,96

5)6

8,7

01

Fina

nce

cost

s(2

8,50

2)(1

9,3

31

)

Con

solid

ated

ent

ity (lo

ss)/

profi

t b

efor

e in

com

e ta

x(3

9,46

7)4

9,3

70

Inco

me

tax

bene

fi t12

,297

2

9,5

55

Net (

loss

)/pro

fi t a

fter i

ncom

e ta

x(2

7,17

0)7

8,9

25

* :

EBIT

DA

- (Lo

ss)/

profi

t b

efor

e de

prec

iatio

n, a

mor

tisat

ion,

fi n

ance

cos

ts a

nd in

com

e ta

x

^ :

In th

e pr

ior ye

ar fi

nanc

ial s

tate

men

ts th

e D

istr

ibut

ion

and

Gor

don

and

Got

ch rep

ortin

g se

gmen

ts w

ere

disc

lose

d to

geth

er a

s “D

istr

ibut

ion

and

Fulfi

lmen

t”.

Cha

nges

mad

e to

the

way

in w

hich

the

oper

atin

g co

mpa

nies

with

in

thes

e se

gmen

ts a

re o

rgan

ised

and

man

aged

mea

ns t

hat

they

hav

e be

en d

iscl

osed

sep

arat

ely

in t

he c

urre

nt y

ear.

The

prior

yea

r co

mpa

rativ

es h

ave

been

res

tate

d to

refl

ect

thi

s ch

ange

.



YEAR

END

ED 3

0 JU

NE 2

009

22Se

gmen

tal r

epor

t (co

ntin

ued)

Prin

ting

Dist

ribut

ion

Gord

on a

nd G

otch

Digi

tal P

rem

edia

Corp

orat

e*Co

nsol

idat

ed

2009

2008

2009

2008

2009

2008

2009

2008

2009

2008

2009

2008

(b)

Busi

ness

Seg

men

ts (c

ontin

ued)

$’00

0$’

000

$’00

0$’

000

$’00

0$’

000

$’00

0$’

000

$’00

0$’

000

$’00

0$’

000

Ass

ets

Seg

men

t as

sets

594,

075

628

,450

27

,639

48

,704

68

,920

4

2,0

84

48

,438

4

8,7

11

68

,193

6

7,6

00

80

7,26

5 8

35

,54

9

Liab

ilitie

s

Seg

men

t lia

bilit

ies

127,

968

140

,850

14

,989

12

,517

93

,353

7

9,9

53

3,

327

4,9

12

21

5,90

6 2

02

,15

9

455,

543

44

0,3

91

Acq

uisi

tion

of p

rope

rty,

pla

nt a

nd e

quip

men

t, in

tang

ible

asse

ts

and

othe

r no

n-cu

rren

t as

sets

(in

clud

ing

acqu

isiti

ons)

20,0

08

10

2,4

31

940

2,6

24

24,5

54

1,3

97

66

7 5

83

-

-

46

,169

1

07

,03

5

Dep

reci

atio

n an

d am

ortis

atio

n(3

5,47

9)(3

4,8

41)

(3,0

43)

(2,8

76)

(1,9

91)

(1,7

14

)(1

,259

)(1

,39

8)

-

-

(41,

772)

(40

,82

9)

* :

Cor

pora

te a

sset

s an

d lia

bilit

ies

mos

tly c

ompr

ise

fi nan

cial

ass

ets

and

liabi

litie

s, d

efer

red

tax

asse

ts a

nd li

abili

ties

and

borr

owin

gs a

nd c

ash.

(b)

Segm

ent I

nfor

mat

ion-

Seco

ndar

y Se

gmen

tAu

stra

liaNe

w Z

eala

ndCo

nsol

idat

ed

Geog

raph

ic S

egm

ents

2009

2008

2009

2008

2009

2008

$’00

0$’

000

$’00

0$’

000

$’00

0$’

000

Sal

es r

even

ue1,

136,

490

1,1

13

,60

9

209,

121

23

3,6

44

1,

345,

611

1,3

47

,25

3

Oth

er r

even

ue9,

987

11

,49

3

491

78

2

10,4

781

2,2

75

Gros

s se

gmen

t rev

enue

1,14

6,47

7 1

,12

5,1

02

20

9,61

2 2

34

,42

6

1,35

6,08

91

,35

9,5

28

Tota

l seg

men

t as

sets

702,

161

72

0,8

39

10

5,10

4 1

14

,71

0

807,

265

83

5,5

49

Acq

uisi

tion

of p

rope

rty,

pla

nt a

nd e

quip

men

t, in

tang

ible

ass

ets

and

othe

r no

n-cu

rren

t as

sets

(in

clud

ing

acqu

isiti

ons)

43,0

02

10

0,1

43

3,

167

6,8

92

46

,169

1

07

,03

5


23 Pension plans

The PMP Group contributes to accumulation plans as a consequence of legislation or Trust Deeds. Legal enforceability is dependent upon the terms of the

legislation and the Trust Deeds.

Accumulation and defi ned benefi t member accounts are held within the PEP Superannuation Plan which is a sub-plan of the AMP SuperSignature Plan.

PMP manages superannuation commitments through a Superannuation Policy Committee in conjunction with the trustees of the AMP Superannuation Savings

Trust, within which is the AMP SuperSignature Plan. This master trust provides defi ned benefi ts based on years of membership and fi nal average salary and

accumulation benefi ts. Employees contribute to the plan at various percentages of their wages and salaries.

Employer contributions to superannuation plans in the year ended 30 June 2009 totalled $13,574,254 (2008: $13,166,253).

Accumulation fundsContribution obligations in respect of each accumulation fund for the year to 30 June 2009 was 9% (2008: 9%) of members’ wages or as defi ned by the

Trust Deed.

Defi ned benefi t fundsDefi ned benefi t members receive lump sum benefi ts on retirement, death, disablement and withdrawal. The defi ned benefi t section of the plan is closed to

new members. All new members receive accumulation only benefi ts.

During the year ended 30 June 2009, PMP Limited contributed at rates between 6% and 18.5% until April 2009 and between 11% and 23.5% up to

30 June 2009 (2008: 6.0% and 18.5%).

PMP expects to contribute $0.9 million to its defi ned benefi t pension plan in the year ending 30 June 2010 (2009 actual: $0.8 million).

(a) Amount recognised in income statements PMP Group PMP Limited

2009 2008 2009 2008Recognised in employee expenses NOTES $’000 $’000 $’000 $’000

Service cost 686 1,362 17 34

Interest cost 1,869 1,878 46 47

Expected return on assets (1,836) (2,464) (46) (62)

Actuarial loss/(gain) 2(c) 1,698 (410) 1,698 (410)

Superannuation expense/(income) 2,417 366 1,715 (391)

(b) Amount recognised in balance sheets

Defi ned benefi t obligation 23(c) 14,206 23,310 14,206 23,310

Less: fair value of plan assets 23(d) (16,285) (27,101) (16,285) (27,101)

Net superannuation asset (2,079) (3,791) (2,079) (3,791)

If a surplus exists in the plan, PMP Limited may be able to take advantage of it in the form of a reduction in the required contribution rate, depending on the

advice of the plan’s actuary.

PMP Limited may at any time by notice to the Trustee terminate its contributions. PMP Limited has a liability to pay the contributions due prior to the effective

date of the notice, but there is no requirement for it to pay any further contributions, irrespective of the fi nancial condition of the plan.


2009 2008 2009 2008(c) Defi ned benefi t obligation $’000 $’000 $’000 $’000

Present value of defi ned benefi t obligation at beginning of the year 23,310 34,216 23,310 34,216

Current service cost 686 1,362 17 34

Interest cost 1,869 1,878 46 47

Contributions by plan participants 403 748 403 748

Actuarial gain (3,238) (3,139) (3,238) (3,139)

Benefi ts paid (6,072) (10,865) (6,072) (10,865)

Taxes, premiums and expenses paid (446) (890) (446) (890)

Transfers out (2,306) - (2,306) -

Intercompany transfers - - 2,492 3,159

Present value of defi ned benefi t obligation at end of the year 14,206 23,310 14,206 23,310

Experience adjustments gain on plan liabilities for the year ended 30 June 2009 is $2.9 million (2008: $1.5 million).




2009 2008 2009 2008 YEAR ENDED 30 JUNE 2009 $’000 $’000 $’000 $’000

23 Pension plans (continued)

(d) Fair value of plan assets

Fair value of plan assets at beginning of the year 27,101 37,017 27,101 37,017

Expected return on plan assets 1,836 2,464 46 62

Actuarial loss (4,936) (2,729) (4,936) (2,729)

Employer contributions 705 1,356 705 1,356

Contributions by plan participants 403 748 403 748

Benefi ts paid (6,072) (10,865) (6,072) (10,865)

Taxes, premiums and expenses paid (446) (890) (446) (890)

Transfers out (2,306) - (2,306) -

Intercompany transfers - - 1,790 2,402

Fair value of plan assets at end of the year 16,285 27,101 16,285 27,101

The fair value of plan assets includes no amounts relating to any of PMP’s own fi nancial instruments or any property occupied or used by PMP.

The major categories of plan assets as a percentage of the fair value of plan assets are as follows:


2009 2008 2009 2008% % % %

Australian equity 21 20 21 20

International equity 18 20 18 20

Fixed income 34 41 34 41

Property 6 9 6 9

Alternatives 11 - 11 -

Cash 10 10 10 10

The expected return on assets assumption is determined by weighting the expected long-term return for each asset class by the target allocation of assets

to each asset class. The returns used for each asset class are net of investment tax and investment fees. PMP Group’s actual return on plan assets during

the year ended 30 June 2009 was a loss of $3.1 million (2008: $0.3 million).

Experience adjustments loss on plan assets for the year ended 30 June 2009 is $4.9 million (2008: $2.7 million).

(e) Actuarial assumptions

The principal actuarial assumptions used in determining PMP pension obligations are as follows (expressed as weighted averages):


2009 2008 2009 2008% % % %

Discount rate 8.20 8.30 8.20 8.30

Expected rate of return on plan assets 7.00 7.00 7.00 7.00

Expected salary increase rate 3.50 4.00 3.50 4.00


24 Share-based payment plans

(a) Employee long term incentive plan

Ordinary shares up to 5.0% (2008: 5.0%) of the total number of ordinary shares on issue may be allotted under the PMP long term incentive plan.

Total number of employee options/performance rights issued since commencement: 46,041,889

Total number of employee options/performance rights issued as at balance date: 3,491,984

Options/rights on issue (as a percentage of total shares on issue) as at 30 June 2009: 1.04%

Total number of employee options/performance rights issued during the year 1,886,068

Total number of employee options/performance rights issued post balance date: -

(i) Employee options

Allotment Date 11/11/04 (i) 28/01/05 (ii) 15/04/05 (iii) 31/07/06 (iv) Total Number

On issue at beginning of year 875,000 200,000 100,000 100,000 1,275,000

Issued during the year - - - - -

Exercised during the year - - - - -

Lapsed during the year (425,000) - - - (425,000)

On issue at end of year 450,000 200,000 100,000 100,000 850,000

Lapsed subsequent to balance date (450,000) (200,000) (100,000) (100,000) (850,000)

Outstanding at date of Directors’ report - - - - -

Number of participants (at balance date) 1 2 1 1

Exercise price $1.60 $1.60 $1.60 $1.60

Exercisable from 1-Jul-07 1-Jul-07 1-Jul-07 1-Jul-07

Expiration date 30-Sep-09 30-Sep-09 30-Sep-09 30-Sep-09

Option value per share (v) $0.95 $0.91 $0.70 $0.41

Weighted average share price at date exercised - - - -

(i) November 2004 issued options with exercise price of $1.60, which expire 30 September 2009. Options may only be exercised if PMP’s

earnings per share (EPS) for any fi nancial year ending 30 June 2007, 2008 or 2009 are met as follows:

- EPS is greater than or equal to $0.23 but less than $0.25, 25% of the options vest and become exercisable



- EPS is greater than or equal to $0.27, 100% of the options vest and become exercisable

The above hurdles can be achieved at any time prior to expiry. As such, if hurdles are not achieved for the fi rst two years but subsequently achieved in

the third then all options become exercisable.

These options lapsed on 1 July 2009.

(ii) January 2005 issued options with an exercise price of $1.60, which expire on 30 September 2009. These options have the same terms, conditions and

hurdles as those issued November 2004 (i).


(iii) April 2005 issued options with an exercise price of $1.60, which expire on 30 September 2009. These options have the same terms, conditions and



(iv) July 2006 issued options with an exercise price of $1.60, which expire on 30 September 2009. These options have the same terms, conditions and



(v) Options have been independently valued using the Binomial option pricing model taking into account the terms and conditions upon which the options

were granted.




24 Share-based payment plans (continued)

(a) Employee long term incentive plan (continued)

(ii) Performance rights

Allotment Date 10/08/06 (i) 30/09/07 (ii) 01/10/08 (iii) Total Number

On issue at beginning of year 953,435 1,572,619 - 2,526,054

Issued during the year - - 1,886,068 1,886,068

Lapsed during the year (522,060) (707,658) (540,420) (1,770,138)

On issue at end of year 431,375 864,961 1,345,648 2,641,984

Lapsed subsequent to balance date* (431,375) - - (431,375)

Outstanding at date of Directors’ report - 864,961 1,345,648 2,210,609

Number of participants (at balance date) 3 11 17

Vesting date (Following the announcement of the) FY09 results FY10 results FY11 results

Fair value per right - TSR hurdle (iv) $0.97 $0.64 $1.00

Fair value per right - ROCE hurdle (iv) $1.51 $1.38 $1.21

* Performance rights granted on 10 August 2006 lapsed on 14 August 2009, following the announcement of the results for the year ended 30 June 2009.

Neither the TSR or the ROCE performance hurdles were met over the three year performance period.

(i) August 2006, granted rights to the value of 50% of each participant’s total employment cost. The number of rights granted was determined based on the

weighted average share price for the one-week period up to and including the grant date ($1.49).

Performance rights entitle participants to receive PMP shares for nil cost after vesting. Rights will only vest if relevant performance hurdles are achieved

across the following three years FY07, FY08 and FY09 as follows:

- PMP’s Total Shareholder Return (TSR) exceeds the change in the ASX All Ordinaries Accumulation Index over the three year performance period, all rights

subject to the TSR hurdle (being 50% of rights granted) will vest and be exercisable;

- Return on Capital Employed (ROCE) performance over the three year performance period is at least equal to the target average ROCE set by the Board

on commencement of the performance period, all rights subject to the ROCE hurdle (being 50% of rights granted) will vest and be exercisable.

These performance rights lapsed on 14 August 2009.

(ii) September 2007, granted rights to the value of between 25% - 50% of each participant’s total employment cost. The number of rights granted was

determined based on the Company’s weighted average share price on the day of grant ($1.51).

Performance rights entitle participants to receive PMP shares for nil cost after vesting. Rights will only vest if relevant performance hurdles described in

(i) above are achieved across the following three years FY08, FY09 and FY10.

(iii) October 2008, granted rights to the value of between 15% - 50% of each participant’s total employment cost. The number of rights granted was

determined based on the weighted average share price for the one-week period up to grant date ($1.28).

Performance rights entitle participants to receive PMP shares for nil cost after vesting. Rights will only vest if relevant performance hurdles described in

(i) above are achieved across the following three years FY09, FY10 and FY11.

(iv) Of the rights granted in the years to 30 June 2009 and 30 June 2008, those subject to the TSR hurdle have been independently valued using a

Monte Carlo simulation and the Black Scholes model has been used to value the rights with a ROCE performance condition. In the year to 30 June 2007

the share price at grant date was used to value the rights subject to the ROCE hurdle.

The following table lists the inputs to the models used to value the rights granted:

10/08/2006 30/09/2007 01/10/2008

Dividend yield 0% 3.31% 1.95%

Expected volatility 36% 30% 40%

Risk-free interest rate 5.94% 6.44% 5.14%

Correlation 0.20 0.31 0.34

Share price at grant date $1.51 $1.51 $1.29

The fair value does not contain any discount for forfeiture due to employee leaving before vesting.


24 Share-based payment plans (continued)

(b) CEO Share Option/Rights Scheme

Allotment Date CEO (i) CEO (ii) CEO (iii)On issue at beginning of year 3,640,000 - -

Issued during the year - 503,226 -

Cancelled during the year (3,640,000) - -

Lapsed during the year - (503,226) -

On issue at end of year and date of Directors’ report - - -

Number of participants 1 1 1

Exercise price $1.42 - -

Exercisable from 8-Oct-08 N/a N/a

Expiration date 30-Oct-10 N/a N/a

Option/Right value per share $0.61 $1.24 N/a

(i) October 2005 issued options with an exercise price of $1.42, which were due to expire 30 October 2010. Options were independently valued using the

Binomial option pricing model taking into account the terms and conditions upon which the options were granted. The options could only be exercised if

certain performance hurdles for any fi nancial year ending 30 June 2008, 2009 or 2010 were met as follows:

- EPS is greater than or equal to $0.21 but less than $0.22, and PMP’s Total Shareholder Return (‘TSR’) exceeds the increase in the

ASX 200 Commercial Services and Supplies Index (‘ASX Index’), 1,210,000 of the options will vest and become exercisable;

- EPS is greater than or equal to $0.22 but less than $0.23, and PMP’s TSR exceeds the increase in the ASX Index, a further 1,210,000

of the options vest and become exercisable;

- EPS is greater than or equal to $0.23 and PMP’s TSR exceeds the increase in the ASX Index, a further 1,220,000 of the options vest

and become exercisable.

The above hurdles can be achieved at any time prior to expiry. As such, if hurdles are not achieved for the fi rst two years but subsequently

achieved in the third then all options become exercisable.

These options were cancelled on 29 September 2008 when Mr Evans extended his service agreement with the company for a further three years.

The revised contract included short and medium term incentive plans to replace the existing plan, detailed in (ii) below.

(ii) Under Mr Evans’ revised incentive plan, the maximum incentive payment that Mr Evans could earn in a fi nancial year was 160% of the base salary

amount. Of this amount, 37.5% would be payable in deferred shares of which half would vest in the employee on 31 August 2010 and the remaining 50%

on 31 August 2011.

The rights would only vest in the employee if certain performance hurdles were met for the year ending 30 June 2009 in relation to:

- Performance against profi t targets (60%)

- Improvement to the PMP safety record (20%)

- Successful acquisition outcomes (20%)

The fair value of each right granted to Mr Evans was valued at $1.24, being the share price on the day the grant was made, the performance conditions

attaching to the shares are non-market based hurdles. 503,226 is the maximum number of rights that Mr Evans could have received in respect to the

fi nancial year ended 30 June 2009 based upon the fair value at grant date. The actual number of rights would have been determined following the

announcement of the 2008-09 results. Share rights lapsed on 28 January 2009 when Mr Evans left the company.

(iii) On 7 April 2009 the Board announced the appointment of Mr Richard Allely as PMP Chief Executive Offi cer. Mr Allely signed a three year contract effective

from the start of April 2009. His contract includes a short term incentive (STI) of a maximum 100% of base remuneration of which 33% will be paid in

PMP shares.

Any STI payment is subject to the achievement of targets which include:

- Budgeted profi t (70%)

- Improved safety (15%)

- A third target to be set by the Board at the commencement of the fi nancial year (15%)

This incentive relates to services to be performed in the fi nancial year ended 30 June 2010.

Fully Paid Shares360,000 fully paid PMP shares have been granted to Mr Evans - 120,000 shares vested annually after the fi rst, second and third year of service

from the commencement date (31 October 2005). This was to partially compensate Mr Evans for benefi ts foregone on his resignation from John Fairfax

Holdings Limited. 120,000 of these shares vested on each of the following dates 31 October 2006, 31 October 2007 and 31 October 2008.




25 Related parties

(a) Key management personnel

Details of key management personnel, including remuneration, are included in the section titled “Remuneration Report” included in the Directors’ report.

No key management personnel received or is entitled to receive a benefi t, other than a benefi t included in the aggregate amount of emoluments.

Any transactions with key management personnel are made on normal commercial terms and conditions.

(b) Key management personnel shareholdingsThis information is disclosed in Note 26 and within the “Remuneration Report” included in the Directors’ Report.

(c) Transactions with key management personnel and their related partiesDuring the year $nil (2008: $12,741) was paid by Nylex Ltd for printing services. (P George and I L Fraser were on the Nylex Board of Directors until

November 2008).

(d) Transactions with related parties in the wholly owned groupDetails of controlled entities are set out in Note 21. The entities and PMP conduct business transactions between themselves.

Such transactions include the purchase and sale of goods, services, plant and equipment and the receipt and payment of management fees, dividends and

interest. All such transactions are conducted on the basis of normal commercial terms and conditions. PMP Limited has made a $382.1 million allowance for

the provision of doubtful debts regarding related parties (2008: $360.4 million).

(e) Transactions with other related partiesThere were no transactions with any other related parties of the PMP Group.

26 Key management personnel

(a) Compensation of key management personnel


2009 2008 2009 2008$ $ $ $

Short-term employee benefi ts 4,666,020 5,927,757 2,948,066 4,410,513

Post employment benefi ts 330,986 198,099 223,947 144,603

Termination payments 2,057,981 - 1,449,259 -

Share-based payment* (372,493) (1,088,051) (208,783) (1,280,146)

Total compensation 6,682,494 5,037,805 4,412,489 3,274,970

* : This is based on the accrued accounting value in accordance with AASB 2 Share-based payments. All options/rights valued in accordance with AASB 2

have been independently valued. In accordance with AASB 2 the non-market conditions associated with these options/rights were not taken into account

when estimating the fair value at grant date. Instead, the number of options/rights expected to eventually vest is re-assessed at the end of each reporting

period. This number was adjusted at both 30 June 2009 and 30 June 2008, resulting in a net credit to the income statement.

The company has applied the exemption under Amendment to Australian Accounting Standard - Key Management Personnel Disclosures by Disclosing

Entities which exempts disclosing companies from the application of AASB 124 paragraphs AUS 25.2 to AUS 25.6 and AUS 25.7.1 and AUS 25.7.2 as the

requirements are now incorporated into the Corporations Law and are provided in the section titled “Remuneration Report” included in the Directors’ Report

designated as audited.

YEAR

END

ED 3

0 JU

NE 2

009

26Ke

y m

anag

emen

t per

sonn

el (c

ontin

ued)

(b)

Opt

ion/

righ

ts h

oldi

ng o

f ke

y m

anag

emen

t pe

rson

nel

2009

Bala

nce

1 Ju

ly 2

008

Gran

ted

as

rem

uner

atio

n

Optio

ns/r

ight

s ex

erci

sed

<a>

Laps

edCa

ncel

led

Bala

nce

30 J

une

2009

Not

exer

cisa

ble

Exer

cisa

ble

Shar

e pr

ice

at

exer

cise

dat

e $

Valu

e at

ex

erci

se d

ate

$

Shar

e pr

ice

at

exer

cise

/laps

e da

te

$

Valu

e at

la

pse

date

$

R A

llely

88

4,4

55

2

79

,29

7 -

(4

50

,00

0)

-

713,

752

71

3,7

52

-

-

-

0

.39

17

5,5

00

P G

eorg

e* -

-

-

-

-

-

-

-

-

-

-

-

C D

avis

on3

37

,43

1

14

8,4

38

-

(1

00

,00

0)

-

385,

869

38

5,8

69

-

-

-

0

.39

39

,00

0

P E

lbou

rne*

-

-

-

-

-

-

-

-

-

-

-

-

A C

lark

son*

36,8

51

43,2

52

-

-

-

80,1

03

80

,10

3

-

-

-

-

-

G P

lant

*39,9

38

50,7

81

-

-

-

90,7

19

90

,71

9

-

-

-

-

-

P B

row

ne*

167,0

43

84,2

37

-

(10

0,0

00)

-

151,

280

15

1,2

80

-

-

-

0

.39

3

9,0

00

A W

illia

ms*

-

-

-

-

-

-

-

-

-

-

-

-

B A

shto

n258,8

98

195,3

13

-

(45

4,2

11)

-

-

-

-

-

-

0.4

21

88

,49

8

B R

Eva

ns3,7

60,0

00

503,2

26

(120

,000

)(5

03,2

26)

(3,6

40,0

00)

-

-

-

0.8

9

10

7,2

11

0

.43

21

3,8

71

D R

owla

nd685,8

94

-

-

(685

,894

) -

-

-

-

-

-

0

.93

63

7,8

81

P M

artin

175,3

49

120,7

03

-

(29

6,0

52)

-

--

-

-

-

0.4

21

22

,86

2

C V

anTi

l203,5

12

126,9

53

-

(33

0,4

65)

-

-

-

-

-

-

0.4

11

35

,49

1

D T

aylo

r99,8

46

123,0

47

-

(222

,893

) -

-

- -

-

-

0

.39

86

,92

8

P D

e Fo

nten

ay-

11

3,2

81

-(1

13

,28

1)

--

--

--

0.3

94

4,1

80

M A

llen

-

97,4

51

-

(97

,451

) -

-

-

-

-

-

0

.31

29

,72

3

Tota

l6,6

49,2

17

1,8

85,9

79

(12

0,0

00)

(3,3

53,4

73)

(3,6

40,0

00)

1,42

1,72

3 1

,42

1,7

23

-

* :

Iden

tifi e

d as

key

man

agem

ent

pers

onne

l in

the

curr

ent

year

2008

Bal

ance

1 J

uly

20

07

Gra

nted

as

rem

uner

atio

n

Opt

ions

/rig

hts

exer

cise

d

<a>

Laps

edC

ance

lled

Bal

ance

30

Jun

e 20

08

Not

exer

cisa

ble

Exer

cisa

ble

Sha

re p

rice

at

exer

cise

dat

e

$

Valu

e at

exer

cise

dat

e

$

Sha

re p

rice

at

exer

cise

/lap

se

date

$

V alu

e at

laps

e da

te

$

R A

llely

84

3,1

22

2

16

,33

3 -

(1

75

,00

0)

-8

84

,45

5

88

4,4

55

-

-

-

1

.52

26

6,0

00

B A

shto

n117,4

50

141,4

48

-

-

-2

58

,898

2

58

,89

8

-

-

-

-

-

C D

avis

on2

17

,45

0

11

9,9

81

-

-

-

33

7,4

31

3

37

,43

1

-

-

-

-

-

B R

Eva

ns3,8

80,0

00

-

(120

,000

) -

-

3,7

60

,000

3,7

60

,00

0

-

1.6

9

20

2,9

12

-

-

D R

owla

nd715,2

66

133,1

28

-

(16

2,5

00)

-6

85

,894

6

85

,89

4

-

-

-

1.5

2

24

7,0

00

R S

heph

erd

731,7

72

-

-

(731

,772

)-

-

-

-

-

-

1.8

2

1,3

31

,82

5

P M

artin

75,5

03

99,8

46

-

-

-1

75

,349

1

75

,34

9

-

-

-

-

-

C V

anTi

l100,6

71

102,8

41

-

-

-2

03

,512

2

03

,51

2

-

-

-

-

-

D T

aylo

r -

99,8

46

-

-

-99

,846

9

9,8

46

-

-

-

-

-

P D

e Fo

nten

ay -

-

-

-

-

-

-

-

-

-

-

-

C A

mos

797,4

84

-

-

(797

,484

)-

-

-

-

-

-

1.7

1

1,3

63

,69

8

Tota

l7,4

78,7

18

913,4

23

(12

0,0

00)

(1,8

66,7

56)

-6

,405

,385

6

,40

5,3

85

-

<a>

No

amou

nts

rem

ain

unpa

id a

s at

the

dat

e of

thi

s re

port



YEAR

END

ED 3

0 JU

NE 2

009

26Ke

y m

anag

emen

t per

sonn

el (c

ontin

ued)

(c)

Shar

e ho

ldin

g of

key

man

agem

ent p

erso

nnel

2009

Bala

nce

1 Ju

ly 2

008

On e

xerc

ise

of

optio

ns/r

ight

sPu

rcha

ses

Sale

sBa

lanc

e 30

Jun

e 20

09Ba

lanc

e 1

July

200

8On

exe

rcis

e of

op

tions

/rig

hts

Purc

hase

sSa

les

Bala

nce

30 J

une

2009

Dire

ctor

sEx

ecut

ives

I L F

rase

r65,4

67

<a>

53

,330

-

11

8,79

7 C

Dav

ison

--

-

-

-

M A

Griffi n

152,2

82

<a>

44

,451

-

19

6,73

3 P

Elb

ourn

e-

-

-

-

-

Ng

J S

-

<a>

15,0

00

-

15,0

00

A C

lark

son

--

--

-

G J

Rea

ney

54

7,2

01

<

a>8

4,5

39

(3

50

,00

0)

281,

740

G P

lant

-

-

-

-

-

P G

eorg

e57,9

67

<a>

34

,652

-

92

,619

P

Bro

wne

- -

-

-

-

R I

Alle

y -

-

-

-

-

A

Will

iam

s -

-

-

-

-

B R

Eva

ns <

c>240,0

00

120,0

00

-

-

N/

ATo

tal

-

-

-

-

-

Tota

l1,0

62,9

17

120,0

00

23

1,9

72

(350

,000

)70

4,88

9

<a>

N

o D

irec

tors

, oth

er t

han

B R

Eva

ns a

nd R

I A

llely

, hav

e be

en is

sued

with

any

opt

ions

/rig

hts

prio

r to

or

during

the

cur

rent

fi n

anci

al y

ear



R

I A

llely

app

oint

ed M

anag

ing

Direc

tor

27

/04

/09

<c>

B

R E

vans

cea

sed

empl

oym

ent

28/0

1/0

9.

Bet

wee

n th

e st

art

of t

he fi n

anci

al y

ear

endi

ng 3

0 J

une

200

9 a

nd t

he d

ate

of h

is r

esig

natio

n, o

ther

tha

n th

e 1

20

,00

0 s

hare

s th

at h

ave

vest

ed t

here

had

bee

n no

cha

nge

in h

is s

hare

hold

ing.

2008

Bala

nce

1 Ju

ly 2

007

On e

xerc

ise

of

optio

ns/r

ight

sPu

rcha

ses

Sale

sBa

lanc

e 30

Jun

e 20

08Ba

lanc

e 1

July

200

7On

exe

rcis

e of

op

tions

/rig

hts

Purc

hase

sSa

les

Bala

nce

30 J

une

2008

Dire

ctor

sEx

ecut

ives

J R

Don

nelle

y1

,86

3,3

43

<

a> -

-

N

/AR

Alle

ly -

-

-

-

-

I L F

rase

r98,7

18

<a>

17

,530

(5

0,7

81)

65,4

67

B A

shto

n -

-

-

-

-

P G

eorg

e3

9,8

27

<

a>1

8,1

40

-

5

7,9

67

C

Dav

ison

-

-

-

-

-

M A

Griffi n

171,4

76

<a>

15

,806

(3

5,0

00)

15

2,2

82

D R

owla

nd -

-

-

-

-

Ng

J S

-

<a>

-

-

-

P M

artin

-

-

-

-

-

B R

Eva

ns120,0

00

120,0

00

-

-

24

0,0

00

C V

anTi

l -

-

-

-

-

G J

Rea

ney

51

4,4

16

<

a>3

2,7

85

-

5

47

,20

1

D T

aylo

r -

-

-

-

-

Tota

l2,8

07,7

80

120,0

00

84,2

61

(85,7

81)

1,0

62

,917

P D

e Fo

nten

ay -

-

-

-

-

M A

llan

-

-

-

-

-

R S

heph

erd

-

-

-

-

-

Tota

l -

-

-

-

-

<a>

No

Direc

tors

, oth

er t

han

B R

Eva

ns, h

ave

been

issu

ed w

ith a

ny o

ptio

ns/r

ight

s pr

ior

to o

r du

ring

the

fi n

anci

al y

ear.



J R

Don

nelle

y re

sign

ed 0

9/0

8/0

7.

Bet

wee

n th

e st

art

of t

he fi n

anci

al y

ear

endi

ng 3

0 J

une

20

08

and

the

dat

e of

his

res

igna

tion,

the

re h

ad b

een

no c

hang

e in

his

sha

reho

ldin

g.


27 Business combinations

Acquisition of The Scribo Group Pty LimitedOn 4 September 2008, the PMP Group acquired 100% of the issued share capital of The Scribo Group Pty Limited, which specialises in the business of book,

music and DVD distribution. All of the Scribo Group companies are incorporated in Australia, with the exception of Brumby Books (NZ) Limited, incorporated

in New Zealand and Bookwise Asia Pte Ltd, incorporated in Singapore (both are dormant).

The total cost of the combination comprises cash, costs directly attributable to the combination and contingent consideration that is deferred until certain profi t

targets are met. If the targets are not met by 30 June 2011 then no contingent consideration will be payable.

The accounting for the acquisition has now been fi nalised.

The net assets acquired in the business combination and the resultant goodwill arising on acquisition are as follows:

Fair value Book value adjustments Fair value

$’000 $’000 $’000Cash and cash equivalents 2,946 - 2,946

Trade and other receivables 7,441 - 7,441

Inventory 3,865 (565) 3,300

Development costs 108 - 108

Intangible assets: Brand/Trademarks - 1,050 1,050

Intangible assets: Customer relationships - 652 652

Intangible assets: Supplier relationships - 5,331 5,331

Other investments 3 - 3

Property, plant and equipment 1,300 - 1,300

Deferred tax asset 1,431 - 1,431

Trade and other payables (13,586) - (13,586)

Tax liabilities (435) - (435)

Deferred tax liability - (1,795) (1,795)

3,073 4,673 7,746

Goodwill on acquisition 13,867

Cost of acquisition 21,613

The goodwill arising on acquisition is attributable to the benefi t expected from synergies, revenue growth and the assembled workforce. These benefi ts have

not been separately identifi ed from goodwill as their value cannot be reliably measured.

Cost of acquisition: PMP Group PMP Limited

2009 2008 2009 2008$’000 $’000 $’000 $’000

Cash paid 21,000 18,528 - 18,528

Deferred contingent consideration 385 - - -

Shares issued, at fair value - 58,529 - 58,529

Final completion refund due - (1,082) - (1,082)

Direct costs of the combination 228 1,231 - 1,231

Total cost of acquisition 21,613 77,206 - 77,206

The cash outfl ow on acquisition is as follows:

Net cash/(overdraft) acquired with the subsidiary 2,946 (156) - -

Cash paid on completion (21,000) (18,528) - (18,528)

Costs of acquisition (228) (1,231) - (1,231)

Net consolidated cash outfl ow (18,282) (19,915) - (19,759)

Since acquisition, The Scribo Group Pty Ltd has contributed a profi t of $829,000 to loss before interest and tax of the Group (after signifi cant items).

2008During the year ended 30 June 2008, the PMP Group made the following acquisition:

Times Printers (Australia) Pty LimitedEffective 21 September 2007, the Group acquired 100% of the issued share capital of Times Printers (Australia) Pty Limited, a company based in Australia.

Times Printers (Australia) Pty Limited’s principal activity is providing integrated printing services including books, magazines, advertising fl yers, directories and

packaging. On 29 November 2007 the company changed its name to Argyle Print Pty Ltd.

The total cost of the combination was $77,206,000 and comprised an issue of equity instruments, payment of cash and costs directly attributable to the

combination. The Group issued 39,020,117 ordinary shares with a fair value of $1.50 each, based on the quoted price of the shares of PMP Limited on the

acquisition date. The fair value of net assets acquired amounted to $80,856,000 resulting in a discount on acquisition of $3,650,000, recognised within

“other revenue”.



PMP Group

2009 2008Number Number

YEAR ENDED 30 JUNE 2009 ‘000 ‘000

28 Earnings per share

(a) Weighted average number of ordinary shares

Weighted average number of ordinary shares on issue used

in the calculation of basic earnings per share

337,903 328,404

Effect of dilutive securities:

Share options* - 136

Weighted average number of shares used in the calculation of diluted earnings per share 337,903 328,540

*: The weighted average number of exercised/lapsed share options included is nil (2008: 15,951)

All rights and options are considered anti-dilutive and excluded from the calculation of diluted earnings per share at 30 June 2009

(2008: 3,485,938). These options/rights could potentially dilute basic earnings per share in the future.

PMP Group

(b) Earnings 2009 2008$’000 $’000

Net (loss)/profi t after income tax (27,170) 78,925

(Loss)/earnings used in calculating basic and diluted earnings per share (27,170) 78,925


2009 2008 2009 2008

NOTES $’000 $’000 $’000 $’000

29 Cash fl ow statement notes

(a) Reconciliation of cash fl ow from operating activities to operating (loss)/profi t after income tax

Operating (loss)/profi t after income tax (27,170) 78,925 (34,174) 276,425

Adjustments for non-cash items:

Depreciation 2(e) 40,588 40,069 4,026 1,823

Amortisation 2(e) 1,184 760 - -

Impairment of goodwill 2(c) - 1,009 - -

Impairment of plant & equipment 2(c) 21,638 7,467 - -

Provision/(credit) for doubtful debts/bad debts written off 1,899 745 21,657 (217,441)

Discount on acquisition 2(a) - (3,650) - -

Movement in provision for tax (1,571) 566 (1,632) 566

Loss/(profi t) on disposal of property, plant and equipment 2(c), 2(a) 6,055 (129) 385 46

Share-based payment plans 2(c) (504) (1,169) (504) (1,169)

Non-cash superannuation expense/(income) 23(a) 2,417 366 1,711 (391)

Other non-cash items 9,401 (630) (1,567) (18,801)

Change in assets and liabilities:

Accounts receivable Decrease/(Increase) 7,426 17,375 1,763 (1,876)

Inventories Decrease/(Increase) 10,672 (10,758) - -

Liabilities (Decrease)/Increase (19,349) (10,197) 2,305 1,224

Non-current assets (Increase) (5,915) (37,467) (4,044) (38,225)

Provision for employee benefi ts (Decrease)/Increase (2,122) 1,830 (35) 542

Prepayments and other assets (Increase) (1,302) (1,440) (315) (8,911)

Net cash provided from operating activities 43,347 83,672 (10,424) (6,188)



29 Cash fl ow statement notes (continued)

(b) Reconciliation of cash

Cash 2,855 98 344 17

Overdraft 14(a) (91) (91) (93) (93)

Total cash 2,764 7 251 (76)

30 Financial instruments

The Group’s activities expose it to a variety of fi nancial risks: market risk (including currency and interest rate risk), credit risk and liquidity risk. The Group’s

overall risk management programme focuses on the unpredictability of fi nancial markets and seeks to minimise potential adverse effects on the fi nancial

performance of the group.

Categories of fi nancial instrument:The Group and the Parent entity hold the following categories of fi nancial instruments:


2009 2008 2009 2008NOTES $’000 $’000 $’000 $’000

Financial assets

Cash and cash equivalents 29(b) 2,855 98 344 17

Trade and other receivables 5, 8 140,503 142,525 531,173 579,096

Derivative fi nancial instruments 7 - 4,789 - -

Other 8 240 240 - -

143,598 147,652 531,517 579,113

Financial liabilities

Trade and other payables 13 185,772 185,520 438,642 436,545

Interest bearing liabilities 14 211,252 199,743 93 93

Derivative fi nancial instruments 16 11,465 - - -

408,489 385,263 438,735 436,638




30 Financial instruments (continued)

Details of the accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and

expenses are recognised, in respect of each class of fi nancial asset and fi nancial liability are disclosed in Note 1.

(a) Hedging policy - overviewThe economic entity trades internationally, giving rise to exposure to market risks from changes in foreign currency exchange rates and interest rates. Derivative

fi nancial instruments are utilised to reduce those risks, principally interest rate swaps and contracts for forward currency. The economic entity has adopted certain

principles in relation to derivative fi nancial instruments:

a) It does not trade in derivatives that are not used in hedging the underlying business exposure of the economic entity;

b) All hedging is undertaken through the Group’s central treasury operation and is in accordance with Board approved policies.

(b) Interest Rate ManagementThe Group enters into fi xed rate instruments to manage the cash fl ow risks associated with the interest rates on borrowings that are fl oating.

Interest rate instruments allow the Group to swap fl oating rate borrowings into fi xed rate borrowings in accordance with the PMP Group policy. These activities are

regularly evaluated to ensure that the Group is not exposed to interest rate movements that could adversely impact its ability to meet fi nancial obligations and to

ensure compliance with borrowing covenants.

(i) Interest rate risk exposureThe following tables set out the carrying amount by maturity of the fi nancial instruments exposed to interest rate risk for the Group:

2009 Floating Fixed Interest maturing in Non-interest rate 1 year or less 1 to 2 years 2 to 5 years interest bearing Total

Note $000 $000 $000 $000 $000 $000Financial assetsCash and deposits 2,855 - - - - 2,855

Receivables 5,8 - - - - 140,503 140,503

Other fi nancial assets 8 - - - - 240 240

Total fi nancial assets 2,855 - - - 140,743 143,598

Weighted average interest rate 4.1% - - -

Financial liabilitiesPayables 13 - - - - (185,772) (185,772)

Bank overdrafts 14 (91) - - - - (91)

Bank loans 14 (210,306) - - - - (210,306)

Finance lease liabilities 14 - (847) (8) - - (855)

Total recognised fi nancial liabilities (210,397) (847) (8) - (185,772) (397,024)

Hedging instruments* 180,881 (56,780) (15,000) (109,101) - -

Financial liabilities including hedging activities (26,661) (57,627) (15,008) (109,101) (45,029) (253,426)

Weighted average interest rate 7.1% 6.5% 4.3% 6.2%

2008 Floating Fixed Interest maturing in Non-interest rate 1 year or less 1 to 2 years 2 to 5 years interest bearing Total

Note $000 $000 $000 $000 $000 $000Financial assets

Cash and deposits 98 - - - - 98

Receivables 5,8 - - - - 142,525 142,525

Other fi nancial assets 8 - - - - 240 240

Total fi nancial assets 98 - - - 142,765 142,863

Weighted average interest rate 6.5% - - -

Financial liabilitiesPayables 14 - - - - (185,520) (185,520)

Bank overdrafts 15 (91) - - - - (91)

Bank loans 15 (198,658) - - - - (198,658)

Other loans 15 - - - - - -

Finance lease liabilities 15 - (229) (765) - - (994)

Total recognised fi nancial liabilities (198,749) (229) (765) - (185,520) (385,263)

Hedging instruments* 183,923 (55,000) (56,746) (72,177) - -

Financial liabilities including hedging activities (14,728) (55,229) (57,511) (72,177) (42,755) (242,400)

Weighted average interest rate 7.1% 5.4% 6.3% 6.4%

*: Notional value of interest rate swaps.

PMP Limited’s receivables and payables are non-interest bearing. Cash and overdraft amounts are at the fl oating interest rate applicable to the PMP Group.

PMP Group

2009 2008

YEAR ENDED 30 JUNE 2009 NOTES $’000 $’000


(b) Interest Rate Management (continued)

ii) Fair value of interest rate swaps

Australian Dollar interest rate swaps (2,590) 3,617

New Zealand Dollar interest rate swaps (2,278) 1,114

Total fair value of interest rate swaps 16 (4,868) 4,731

At 30 June 2009, $9.6 million has been expensed in the income statement (2008: $0.9 million).

iii) Interest rate sensitivity analysis

If interest rates had changed +/- 1% from the year end rate with all other variables held constant, the impact on net (loss)/profi t for the year including

the impact on the fair value of interest rate swaps would have been:

PMP Group

Net (loss)/profi t impact

at 30 June

2009 2008

$’000 $’000

Interest rates increase 1% 745 787

Interest rates decrease 1% (841) (871)

The impact of the same variance on PMP Limited would have been $nil.

(c) Foreign exchange management

Foreign currency risk refers to the risk that the value of a fi nancial commitment, recognised asset or liability will fl uctuate due to changes in foreign

currency rates. The Group’s foreign currency exchange risk arises primarily from where the Group has fi rm commitments or highly probable forecast

transactions for receipts and payments that are to be settled in foreign currencies, or where the price is dependant on foreign currencies and also the risk

that arises on translation of net investments in foreign operations.

The Group is exposed to foreign exchange risk from various currency exposures, primarily with respect to the New Zealand Dollar, the US Dollar, the Euro

and the Great British Pound.

Foreign exchange risk that arises from fi rm commitments or highly probable transactions are managed primarily through the use of forward foreign

currency derivatives. A portion of these transactions are hedged (such as the purchase of paper from various foreign suppliers) in each currency in

accordance with the Group’s risk management policy.

Foreign currency risk also arises on translation of the net assets of PMP’s non-Australian controlled entities which have a different functional currency. The

foreign currency gains or losses arising from this risk are recorded through the foreign currency translation reserve on translation to Australian Dollars on

consolidation. This translation foreign currency risk is managed with borrowings denominated in the currency of the entity concerned.

Where a subsidiary hedges foreign exchange transactions it designates hedging instruments as cash fl ow hedges as appropriate.



Average exchange rate PMP Group

2009 2008 2009 2008YEAR ENDED 30 JUNE 2009 $ $ $’000 $’000


c) Foreign exchange management (continued)

i) Australian entity contracts to exchange foreign currency - relating to receipts and payments

United States Dollars - less than one year 0.729 0.916 14,449 12,004

UK Pounds - less than one year 0.476 0.460 (283) 537

Euro - less than one year 0.539 0.608 12,180 4,589

26,346 17,130

ii) New Zealand entity contracts to exchange foreign currency - relating to receipts and payments

NZ Dollars Australian Dollar Equivalent

Average exchange rate Average fi xed rate PMP Group

2009 2008 2009 2008 2009 2008$ $ NZD $’000 NZD $’000 $’000 $’000

United States Dollars - less than one year 0.533 0.756 45,611 31,826 36,125 25,167

UK Pounds - less than one year 0.373 0.374 1,157 914 916 723

Australian Dollars - less than one year - 1.195 - 442 - 350

46,768 33,182 37,041 26,240

iii) Australian entity contracts to exchange foreign currency - relating to capital expenditure

Average exchange rate PMP Group

2009 2008 2009 2008$ $ $’000 $’000

US Dollars - less than one year 0.793 0.849 1,854 886

1,854 886

iv) Fair value of forward exchange contracts

PMP Group

2009 2008NOTES $’000 $’000

Australian entity - relating to receipts and payments (1,439) (443)

New Zealand entity - relating to receipts and payments (5,180) 599

Australian entity - relating to capital expenditure 22 (98)

Total fair value of forward exchange contracts (6,597) 58

Comprised of:

Financial assets - current 7 - 58

Financial liabilities - current 16 (6,597) -

Total fair value of forward exchange contracts (6,597) 58



c) Foreign currency management (continued)

iv) Fair value of forward exchange contracts (continued)At 30 June 2009, a $1.0 million debit (2008: $0.7 million debit) has been recognised within the income statement and a $5.5 million debit, excluding tax

effect (2008: $0.2 million credit) is included within the cash fl ow hedge reserve in equity. $nil was transferred to property, plant and equipment during the

fi nancial year ended 30 June 2009 (2008: $nil).

v) Foreign currency sensitivity riskThe following table shows the effect on equity excluding tax effect as at 30 June from a 10 percent adverse / favourable movement in exchange rates at

that date on a total portfolio basis with all other variables held constant, taking into account all underlying exposures and related hedges.

Adverse versus favourable movements are determined relative to the underlying exposure. An adverse movement in exchange rates implies an increase in

the Groups foreign currency risk exposure and a worsening in fi nancial position. A favourable movement in exchange rates implies a reduction in foreign

currency risk exposure and an improvement in fi nancial position.

A sensitivity of 10 percent has been selected as this is considered reasonable given the current level of exchange rates and the volatility observed both on

a historical basis and market expectations for future movement. Comparing the Australian dollar exchange rate against the United States dollar and the

Euro and the New Zealand dollar against the United States dollar year end rates would give the following adverse and favourable rates:

The net gain/(loss) in the cash fl ow hedge reserve refl ects the result of exchange rate movements on the derivatives held in cash fl ow hedges which will

be released to the income statement in the future as the underlying hedged item affects profi t.

PMP Group

Equity

(cash fl ow hedge reserve)

at 30 June

2009 2008

$000’s $000’s

If there was a 10% adverse movement in exchange rates with all other variables held constant - increase / (decrease) (4,236) (4,018)

If there was a 10% favourable movement in exchange rates with all other variables held constant - increase / (decrease) 4,900 3,662

The impact on PMP Limited would be $nil as the entity does not hold forward exchange contracts.

For the PMP Group, foreign currency translation risk associated with PMP’s foreign investments results in some volatility to the foreign currency

translation reserve. The impact on the foreign currency translation reserve relates to the translation of the net assets of foreign currency controlled entities

on consolidation.

(d) Liquidity risk management

Liquidity risk is the risk that funds may be insuffi cient to settle a transaction on the due date, and the Group may be forced to sell fi nancial assets at a value

which is below what they are worth, or be unable to settle or recover a fi nancial asset at all.

PMP manages liquidity risk by maintaining adequate reserves, banking facilities and borrowing facilities by continually monitoring actual and forecast cash

fl ows and matching the maturity profi les of fi nancial assets and liabilities.

The table below shows the Group’s fi nancial liabilities and derivative instruments in relevant maturity groupings based on the remaining period at the

reporting date to the contractual maturity date. The amounts shown in the table are the contractual, undiscounted cash fl ows and include both principal

and interest.


Australia dollar to: Year end rate 10% adverse rate 10% favourable rate

United States dollar 0.792 0.871 0.720

Euro 0.567 0.624 0.516

New Zealand dollar to:

United States dollar 0.627 0.690 0.570




(d) Liquidity management (continued)

PMP Group

30 June 2009

Weighted Avg effective interest rate

Carrying amount

Contractual cash fl ows

Less than one year 1 to 2 years 2 to 5 years

Interest bearing liabilities % $’000 $’000 $’000 $’000 $’000

Bank Loans 4.0% 241,125^ 262,747 52,172 72,881 137,694

Finance lease liabilities 11.2% 855 924 914 10 -

Interest Rate Swaps* 6.1% 4,868 6,183 835 6 5,342

Forward FX Contracts

- infl ows - (86) (1,419) (1,419) - -

- outfl ows - 6,683 66,660# 66,660 - -

Payables - 185,772 185,772 185,772 - -

Total 439,217 520,867 304,934 72,897 143,036

30 June 2008

Weighted Avg effective interest rate

Carrying amount

Contractual cash fl ows

Less than one year 1 to 2 years 2 to 5 years

Interest bearing liabilities % $’000 $’000 $’000 $’000 $’000

Bank Loans 7.8% 215,615^ 259,895 16,913 73,811 169,171

Finance lease liabilities 10.8% 994 1,161 331 830 -

Interest Rate Swaps* 6.1% (4,731) (5,349) (610) (1,327) (3,412)

Forward FX Contracts

- infl ows - 4 (480) (480) - -

- outfl ows - (63) 44,847# 44,847 - -

Payables - 185,520 185,520 185,468 52 -

Total 397,339 485,594 246,469 73,366 165,759

*: Net amounts for interest rate swaps for which net cash fl ows are exchanged

^: Drawn amounts before cash off-set

#: This represents the gross payment under the forward contract.

(e) Credit Risk

Credit risk is the risk that a counterparty will default on their fi nancial obligations resulting in fi nancial loss to the Group. Credit risk exists from cash and

cash equivalents, trade and other receivables and derivative fi nancial instruments. The Group’s exposure to credit risk arises from the potential default of the

counter party, with a maximum exposure equal to the carrying value of these assets net of any provision for doubtful debts (refer to Note 5).

The credit risk on cash and cash equivalents and fi nancial instruments is limited as the counterparties are fi nancial institutions with credit ratings of

A- or higher. Also, PMP has policies that limit the amount of credit exposure to any one fi nancial institution.

PMP has an approved Credit Policy Manual which provides guidelines for the management of credit risk. This provides guidance for the way in which the credit

risk of customers is assessed, and the use of credit risk rating and other information in order to set appropriate trading limits with customers.

In some instances security may be required to be supplied to PMP from customers to minimise risk. The security is either in the form of Director guarantees

for their business which is secured over a residential property or may be an up-front payment of between 75% - 50% of the trade before executing the sale.



(f) Capital management

PMP Limited’s capital management plan over the medium term is to achieve a target capital structure and to optimise fi nancial returns to shareholders

based on the following considerations:

- Delivering the most effi cient capital structure and reducing the Group’s weighted average cost of capital (WACC);

- The capability to service debt and meet fi nancial covenant constraints consistent with an investment grade rating;

- Listed comparables and market expectations;

- Retaining fl exibility for PMP to pursue attractive investment opportunities including acquisitions, organic growth and share buy-backs.

The Group has target gearing levels in the range of:

- Debt to equity of between 50% and 75% and at 30 June 2009 was at mid-range of this at 59.3%.

- Debt to EBITDA at around 2 times, and at 30 June 2009 was at 2.2 times.

- EBITDA to borrowing costs of greater than 3 times and at 30 June 2009 was at 5.1 times.

With current market volatility high, the company seeks to retain fl exibility through maintaining a gearing ratio towards the lower end of the range over

the next 12-24 months. We believe that investors will expect PMP to maintain maximum fl exibility by retaining capital for investment opportunities as

outlined above.

On 14 August 2008 PMP announced its intent to conduct a 5% onmarket buy-back. During the year ended 30 June 2009, PMP bought back 4,009,386

shares at an average price of 34.36 cents per share, for total consideration of $1,377,709.

PMP has not declared a fi nal dividend for the year ended 30 June 2009.

(g) Fair values

The fair value of all fi nancial assets and liabilities equates to the carrying value.

31 Contingent liabilities

Contingent liabilities classifi ed in accordance with the party for whom the liability could arise are:

The Company:

- PMP has guaranteed the debts of certain wholly owned Australian controlled entities in accordance with a Deed of Guarantee and class order

number 98/1418 issued by the Australian Securities and Investments Commission, which provides relief from the requirement to prepare statutory

fi nancial statements.

Related bodies corporate:

- PMP has guaranteed the borrowings of PMP Finance Pty Limited and Pac-Rim Finance (NZ) Limited to facilitate group banking arrangements.

- Wholly owned entities in the PMP Group have provided guarantees to banks, in respect of debt and foreign currency management.

- Entities in the PMP Group contribute to a number of defi ned benefi t superannuation funds and have undertaken to contribute annually such amounts

as the actuaries consider necessary to secure the rights of members.

32 Subsequent events

The Directors are not aware of any matters or circumstance arising since balance date not otherwise dealt with in this report or consolidated fi nancial

statements, that has signifi cantly affected or may signifi cantly affect the operations of the PMP Group, the results of those operations or the state of affairs

of the PMP Group in subsequent years.


In accordance with a resolution of the Directors of PMP Limited, we state that:

(1) In the opinion of the Directors:

(a) the fi nancial statements and notes of the company and of the consolidated entity; and the additional

disclosures included in the Directors’ report designated as audited, are in accordance with the

Corporations Act 2001, including:

(i) giving a true and fair view of the company’s and consolidated entity’s fi nancial position as at

30 June 2009 and of their performance for the year ended on that date; and

(ii) complying with Accounting Standards and Corporations Regulations 2001; and

(b) there are reasonable grounds to believe that the company will be able to pay it’s debts as and when they

become due and payable.

(2) This declaration has been made after receiving the declarations required to be made to the Directors in

accordance with sections 295A of the Corporations Act 2001 for the fi nancial year ended 30 June 2009.

(3) In the opinion of the Directors, as at the date of this declaration, there are reasonable grounds to believe

that the members of the Closed Group identifi ed in Note 21 will be able to meet any obligations or liabilities

to which they are or may become subject, by virtue of the Deed of Cross Guarantee.

Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001.

On behalf of the Directors

Graham J. Reaney

Chairman

Richard I. Allely

Chief Executive Offi cer and Managing Director



DIRECTORS’ DECLARATION


Deloitte Touche Tohmatsu

A.B.N. 74 490 121 060

Grosvenor Place

225 George Street

Sydney NSW 2000

PO Box N250 Grosvenor Place

Sydney NSW 1220 Australia

DX 10307SSE

Tel: +61 (0) 2 9322 7000

Fax: +61 (0) 2 9322 7001

www.deloitte.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

Member ofDeloitte Touche Tohmatsu

INDEPENDENT AUDIT REPORT

Independent Auditor’s Report to the Members of PMP Limited

Report on the Financial Report

We have audited the accompanying fi nancial report of PMP Limited, which comprises the balance sheet as at 30 June 2009, and the income statement, cash fl ow

statement and statement of changes in equity for the year ended on that date, a summary of signifi cant accounting policies, other explanatory notes and the directors’

declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the fi nancial year as set out

on pages 50 to 94.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the fi nancial report in accordance with Australian Accounting Standards

(including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant

to the preparation and fair presentation of the fi nancial report that is free from material misstatement, whether due to fraud or error; selecting and applying

appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state, in accordance with

Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards

ensures that the fi nancial report, comprising the fi nancial statements and notes, complies with International Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the fi nancial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These

Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable

assurance whether the fi nancial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial report. The procedures selected depend on

the auditor’s judgement, including the assessment of the risks of material misstatement of the fi nancial report, whether due to fraud or error. In making those risk

assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the fi nancial report 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 entity’s internal control. An audit also includes

evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall

presentation of the fi nancial report.

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

Auditor’s Opinion

In our opinion:

(a) the fi nancial report of PMP Limited is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the company’s and consolidated entity’s fi nancial position as at 30 June 2009 and of their performance for the year ended on

that date; and

(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and

(b) the fi nancial report also complies with International Financial Reporting Standards as disclosed in Note 1.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 34 to 46 of the directors’ report for the year ended 30 June 2009. The directors of the company are

responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to

express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s Opinion

In our opinion the Remuneration Report of PMP Limited for the year ended 30 June 2009, complies with section 300A of the Corporations Act 2001.

DELOITTE TOUCHE TOHMATSU

G Couttas

Partner

Chartered Accountants


96 | PMP Annual Report 2009 | 5 Year Summary

5 YEAR SUMMARY

2005 2006 2007 2008 2009 % change

SALES REVENUE

Printing A$ mill 690.0 692.5 694.0 741.1 707.2 (4.6%)

Distribution A$ mill 151.8 119.9 132.3 124.4 122.1 (1.8%)

Gordon and Gotch A$ mill 443.7 401.8 431.9 461.1 496.5 7.7%

Digital Premedia A$ mill 61.8 43.4 50.7 40.0 33.1 (17.2%)

Gross Sales Revenue A$ mill 1,347.3 1,257.6 1,308.9 1,366.6 1,358.9 (0.6%)

Inter Segment Sales A$ mill (13.7) (12.6) (20.8) (19.3) (13.3) (31.0%)

External Sales Revenue A$ mill 1,333.6 1,245.0 1,288.1 1,347.3 1,345.6 (0.1%)

PROFITABILITY

EBITDA A$ mill 110.0 115.8 128.3 125.9 96.0 (23.8%)

EBIT

Printing A$ mill 74.3 71.5 81.1 65.5 41.6 (36.5%)

Distribution A$ mill 17.6 10.3 5.3 7.6 7.0 (8.3%)

Gordon and Gotch A$ mill (4.8) 1.8 8.2 12.5 11.6 (6.6%)

Digital Premedia A$ mill (2.4) 3.9 7.5 7.3 7.2 (2.1%)

Corporate A$ mill (8.0) (5.5) (10.8) (7.8) (13.2) (69.9%)

Total EBIT A$ mill 76.7 82.0 91.3 85.1 54.2 (36.3%)

Printing EBIT/gross sales % 10.8 10.3 11.7 8.8 5.9 (33.0%)

Distribution EBIT/gross sales % 11.6 8.6 4.0 6.1 5.7 (6.6%)

Gordon and Gotch EBIT/gross sales % (1.1) 0.4 1.9 2.7 2.3 (14.8%)

Digital Premedia EBIT/gross sales % (3.9) 9.0 14.8 18.3 21.8 19.1%

Total EBIT/external sales % 5.8 6.6 7.1 6.3 4.0 (36.5%)

OTHER

Net cash provided by operating activities A$ mill 32.5 56.1 104.4 83.7 43.3 (48.2%)

Earnings per ordinary share cents 10.7 11.2 15.5 24.0 (8.0) -

Dividend per share cents - - - 4.5* 3.0** (33.3%)

Total assets A$ mill 738.6 781.6 773.2 835.5 807.3 (3.4%)

Total net debt A$ mill 330.9 344.8 255.1 199.6 208.4 (4.4%)

Total shareholders equity A$ mill 191.1 227.2 271.7 395.2 351.7 (11.0%)

Debt/Equity Ratio % 173.1 151.8 93.9 50.5 59.3 (17.4%)

Interest Cover times 4.5 4.4 5.4 6.5 5.1 (21.5%)

Depreciation A$ mill 30.3 33.0 36.0 40.1 40.6 (1.3%)

Amortisation A$ mill 3.0 0.8 1.0 0.8 1.2 (55.8%)

Capital Expenditure A$ mill 64.1 53.2 47.3 90.7 22.7 (75.0%)

Employees Full Time No. 3,240 3,250 3,074 3,010 2,762 (8.2%)

Note: EBIT - Earnings before signifi cant items, fi nance costs and income tax.

* Final dividend for the year ended 30 June 2007 of 3 cents and interim dividend for the year ended 30 June 2008 of 1.5 cents both fully franked.

** Final dividend for the year ended 30 June 2008 of 3.0 cents (60% franked).

5 Year Summary | PMP Annual Report 2009 | 97

61.8

43.450.7

40.033.1

100

80

60

40

20

0

PMP Digital PremediaSales Revenue $m

FY05 FY06 FY07 FY08 FY09

(2.4)

3.9

7.5 7.3 7.2

PMP Digital PremediaEBIT* $m


6

4

2

0

-2

-4

8

151.8

119.5

132.3

124.4 122.1

175

150

125

100

0

75

50

25

PMP DistributionSales Revenue $m


17.6

10.3

5.3

7.67.0

20

15

10

5

0

PMP DistributionEBIT* $m


443.7401.8

431.9461.1

496.5

600

500

400

300

200

0

100

Gordon and GotchSales Revenue $m


(4.8)

1.8

8.2

12.511.6

Gordon and GotchEBIT* $m


10

5

0

-5

15

690.0 692.5 694.0

741.1

707.2

750

600

700

650

PMP PrintSales Revenue $m


74.3 71.5

81.1

65.5

41.6

100

80

0

60

40

20

PMP PrintEBIT* $m


* EBIT - Earnings before signifi cant items, fi nance costs and income tax.

AS AT 20 AUGUST 2009

Shares and options / rights

Shares on issue 335,348,483

Options / rights on issue (see Note 24)

Employee rights (excluding CEO rights) 1,714,979

CEO rights 495,630

Total options / rights 2,210,609

Distribution of shareholders Number of shareholders Number of shares Percentage

1 - 1,000 775 497,201 0.15%

1,001 - 5,000 2,728 7,780,680 2.32%

5,001 - 10,000 671 5,318,396 1.59%

10,001 - 100,000 537 14,870,830 4.43%

100,001 and over 45 306,881,376 91.51%

Total number 4,756 335,348,483 100.00%

Holdings of less than a marketable parcel 364

Substantial shareholders Number of shares % of total issued

Orbis Investment Management Ltd (Group) 64,432,514 19.21%

Lazard Asset Management Pacifi c Company 46,684,034 13.92%

Fraser & Neave Ltd 39,035,117 11.64%

PM Capital Limited 37,815,124 11.28%

Hunter Hall Investment Management Ltd 24,303,104 7.25%

Twenty largest shareholders Number of shares % of total issued Rank

National Nominees Limited 73,764,300 22.00 1

J P Morgan Nominees Australia Limited 55,919,017 16.67 2

Citicorp Nominees Pty Limited 51,272,899 15.29 3

HSBC Custody Nominees (Australia) Limited 43,774,314 13.05 4

Cogent Nominees Pty Limited 26,775,960 7.98 5

UBS Nominees Pty Ltd 15,906,574 4.74 6

ANZ Nominees Limited 11,041,515 3.29 7

Citicorp Nominees Pty Limited <Cfsil Cfs Ws Pm Cap Aus A/C> 6,304,513 1.88 8

Citicorp Nominees Pty Limited <Cfsil Cwlth Aust Bout 4 A/C> 4,529,406 1.35 9

Queensland Investment Corporation 2,065,715 0.62 10

Citicorp Nominees Pty Ltd <Cwlth Bank Off Super A/C> 1,897,860 0.57 11

IWPE Nominees Pty Limited 1,434,797 0.43 12

Excelsior Holdings Pty Limited 1,350,000 0.40 13

Citicorp Nominees Pty Limited <Cfsil Cwlth Aust Shs 23 A/C> 1,086,824 0.32 14

AMP Life Limited 976,483 0.29 15

Mr Mark Herdman + Mrs Heather Fletcher Herdman 750,000 0.22 16

CS Fourth Nominees Pty Ltd 591,238 0.18 17

Irrewarra Investments Pty Ltd 528,029 0.16 18

Mr Anthony Charles Patrick Cotterell 500,000 0.15 19

Mr Vincent Paul Godfrey Cotterell 500,000 0.15 20

Total Holding 300,969,444 89.75

98 | PMP Annual Report 2009 | Share Register Information

SHARE REGISTER INFORMATION

SHAREHOLDER INFORMATION

Shareholder Information | PMP Annual Report 2009 | 99

Shareholder Details PMP shareholders who:

• have changed their name or address

• wish to consolidate two or more separate holdings

• wish to lodge their tax fi le numbers

• do not wish to receive an Annual Report

should advise PMP’s share registry by completing the relevant

forms available from www.computershare.com or by telephoning

1300 556 161 to request the appropriate forms.

Shareholders accessing the Computershare website will need to

key in their Holder Identifi cation Number (HIN) if their securities are

broker-sponsored and held in CHESS, while shareholders with

securities held in an issuer-sponsored sub-register will need to

key in their Security Reference Number (SRN).

Tax File Numbers It is important that Australian resident shareholders have their tax

fi le number or exemption details noted by the share registry. While

it is not compulsory to provide a tax fi le number or exemption

details, PMP is required by law to deduct tax at the top marginal

rate from the unfranked part of any dividend paid to Australian

resident shareholders who have not supplied these details.

Receive Information by Email Shareholders can receive notifi cations about company

announcements, annual and periodic reports and other company

information by email.

By registering for this service, shareholders can be kept up to

date with signifi cant company announcements as they happen.

To Register Electronically:visit www.pmplimited.com.au and follow these easy steps:

• Click on Register Your Email Address for

shareholder information

• Then enter your personal security information:

– Holder Identifi cation Number (HIN)

or Security Reference Number (SRN)

– Postcode

• Click on “Submit” and follow the prompts

• Then just click on ‘reply’ to confi rm your details, then ‘send’.

Share Registry Computershare Investor Services Pty Limited

Level 5, 115 Grenfell Street

Adelaide SA 5000

GPO Box 1903

Adelaide SA 5001

Enquiries within Australia: 1300 556 161

Enquiries outside Australia: +61 3 9415 4000

Email: [email protected]

Website: www.computershare.com

Chief Entity Auditors Deloitte Touche Tohmatsu

Lead Bankers ANZ

Commonwealth Bank of Australia

Toronto-Dominion Bank

Rabobank

Investor Information Shareholders requiring information should contact the

share registry, or Alistair Clarkson - Company Secretary:

Telephone: 02 9412 6004

Facsimile: 02 9413 3939

Email: [email protected]

Annual General Meeting

The 2009 Annual General Meeting of the Company

will be held at 11.00 am

Tuesday 10 November 2009 at:

Mantra Chatswood

10 Brown Street

Chatswood NSW 2067

Details of the business of the meeting are contained in the

separate Notice of Meeting sent to shareholders.

Alistair ClarksonBComm LLB MBA ACIS GradDipACG

Company Secretary

PMP Limited

PrintPMP Maxum (NZ) Ltd

7 Gordon Road

Morningside

Auckland

New Zealand

Tel +64 9 846 0303

Design, Photography and IllustrationDimension Studios

13 Sirius Road

Lane Cove

New South Wales

Australia

Tel 02 9490 7200

Design ConceptThe 2009 Annual Report has been designed to emphasise the

strength and stability of a ‘re-energised’ PMP. Strong blocks of

grey and silver form an ‘industrial’ foundation - colourful imagery re-

enforces the CMYK print workfl ow. A green ‘swish’ refl ects change

and growth and also pays homage to the strong environmental

agenda outlined in 2008. Simple typography and a classic Helvetica

face ensure readability and elegance.

The front section of this Report (up to p25) incorporates 2 special

colours (PMS 381 Green and PMS 425 Grey), PMS 877 metallic

Silver and the 4 process colours; the rear section (after p25) is

reproduced using the 2 special colours and black only.

Environmentally friendly PaperAfter considering many alternatives, PMP has chosen to use

Sappi’s “Harvest Recycled” which is an acid free, double coated,

biodegradable, recyclable and innovative product that uses

alternative fi bre in its manufacturing. Harvest Recycled contains

60% recycled sugar cane fi bre and 40% FSC Chain of Custody

certifi ed pulp.

The paper is manufactured at the Stanger Mill in South Africa as

part of their Triple Green Initiative, which is an initiative which aims

to protect nature, converse resources and promote sustainability.

This mill is one of only a few in the world to use sugar cane as its

primary source of pulp. It is an annually renewable resource and

the fi bre derived after sugar extraction is in effect a recycled raw

material. The sugar cane requires less energy to refi ne the cane

husks into fi bre form in readiness for paper making. Also, the sugar

cane is sourced close to the mill and so requires minimum use of

transportation, thus a lower amount of greenhouse gas emissions

is produced.

The paper is manufactured under environmental Management

System ISO4001, using Elemental Chlorine Free fi bre sourced

from Well Managed Forests and the end result is an A2 Art Paper

suitable for quality printing.

Full Carbon Emission OffsetsPMP’s sheetfed printing plant in New Zealand, PMP Maxum,

purchases electricity from a supplier which sources its energy from

hydro, geothermal and natural gas. PMP offers its clients a full

range of options to offset their printing carbon footprint through its

Green Blueprint marketing programme.

A full life cycle emissions analysis was carried out on the production

of this annual report. Greenhouse emission offsets through the

Greenfl eet programme have been transacted to offset a conservative

125% of the estimated full life cycle emissions from the Report.

100 | PMP Annual Report 2009 | Production Details

ANNUAL REPORT 2009 The 2009 Annual Report was produced by PMP Limited companies

ABN 39 050 148 644

www.pmplimited.com.au

Registered Office:

PMP LimitedABN 39 050 148 644

Level 12, 67 Albert Avenue Chatswood NSW 2067

Tel: 02 9412 6000 Fax: 02 9413 3939

www.pmplimited.com.au

2009 Annual Report - Yellowpages.com · In the magazine and book distribution business of Gordon and Gotch, the business held its own in the market, with relatively strong revenues.

Documents