ING Private Equity Access Limited ABN 48 107 843 381 Level 12, 83 Clarence Street Sydney NSW 2000 Australia
29 August 2012
The Manager, Listings Company Announcements Office Australian Securities Exchange Level 4, Exchange Centre 20 Bridge Street SYDNEY NSW 2000
2012 Annual Report and Annual General Meeting
Attached are:
The Company’s 2012 Annual Report; The Notice of Meeting and a sample Proxy Form for the Company’s Annual General Meeting which is to be held on 24 October 2012.
The Notice of Meeting and Proxy Form will be sent to shareholders on 3 September 2011 along with the Company’s Annual Report for those shareholders who have elected to receive a hard copy.
The Annual Report, Notice of Meeting and sample Proxy Form will also be posted on the Company’s website: www.ingpeal.com.au.
Yours sincerely
Sam Jackson
Company Secretary For personal use only use personal For
ING Private Equity Access Limited P 1 of 1 ING Private Equity Access Limited
ANNUAL REPORT 30 JUNE 2012
ABN 48 107 843 381 For personal use only use personal For
This page has been left blank intentionally. For personal use only use personal For Contents
Calendar iv
Summary 2012 1
Statement by the Chairman 2
Investment Strategy 3
Review of Operations 4
Portfolio Diversifi cation 10
Private Equity Fund Profi les 11
Directors’ Report 19
Corporate Governance Statement 26
Financial Statements 31
Notes 35
Directors’ Declaration 60
Independent Audit Report 61
Additional ASX Disclosures 63
Directory 66
Disclaimer
For personal use only use personal For The information contained in this report has been prepared with all reasonable care by ING Private Equity Access Limited who accepts no responsibility or liability for any errors, omissions or misstatements. It is provided as general securities information only and is not in any way intended to constitute a securities investment recommendation or fi nancial advice.
Page iii ING Private Equity Access Limited Calendar
OCTOBER 2012 NOVEMBER 2012 DECEMBER 2012 Friday, 12 October Monday, 12 November Wednesday, 12 December Monthly NTA Release Monthly NTA Release Monthly NTA Release Wednesday, 24 October Annual General meeting
JANUARY 2013 FEBRUARY 2013 MARCH 2013 Friday, 11 January Tuesday, 12 February Tuesday, 12 March Monthly NTA Release Monthly NTA Release Monthly NTA Release
Friday, 22 February Half Yearly Results Release
APRIL 2013 MAY 2013 JUNE 2013 Thursday, 11 April Monday, 13 May Wednesday, 12 June Monthly NTA Release Monthly NTA Release Monthly NTA Release
JULY 2013 AUGUST 2013 SEPTEMBER 2013 Thursday, 11 July Tuesday, 13 August Thursday, 12 September Monthly NTA Release Monthly NTA Release Monthly NTA Release
Friday, 23 August Annual Results Release
2012 ANNUAL GENERAL MEETING The 2012 Annual General Meeting (AGM) for ING Private Equity Access Limited will be held as follows:
Date: Wednesday, 24 October 2012 Time: 2.00pm for 2.30pm start For personal use only use personal For Venue: Macquarie Graduate School of Management, CBD Executive Conference Centre at Level 7, 37 Pitt Street, Sydney, NSW
Details about the items of business to be considered at the AGM are contained in the separate Notice of 2012 Annual General Meeting sent to investors.
Page iv Summary 2012
NET ASSET VALUE (pre tax cents per share) NET PROFIT AFTER TAX ($m)
2012 47 2012 -0.86
2011 52 2011 1.95
2010 50 2010 5.14
2009 73 2009 -10.94
2008 112 2008 2.40
0 20 40 60 80 100 120 -12 -10 -8 -6 -4 -2 0246
DIVIDENDS (cents per share) NET BANK DEBT ($m)
2012 2.50 2012 nil
2011 nil 2011 8.8
2010 nil 2010 5.4
2009 nil 2009 13.8
2008 7.95 2008 nil
012345678 0 3691215
TOTAL RETURN (pre tax NAV + dividends %) UNDRAWN PRIVATE EQUITY COMMITMENTS ($m)
2012 -4 2012 18
2011 7 2011 24
2010 14 2010 34
2009 -21 2009 43
2008 1 2008 49
-25 -20 -15 -10 -5 0 51015 0 10 20 30 40 50
“The year ended on a high note with no debt
For personal use only use personal For and a pleasing dividend payment.” Geoff Brunsdon Chairman
Page 1 ING Private Equity Access Limited Statement by the Chairman
Despite uncertain market conditions, the year ended on On behalf of the Board, thank a very positive note with no debt and the fi rst dividend you for your continued support payment for a number of years. and I hope that you will be able to join us at this year’s Annual The portfolio benefi ted from a range of exits of underlying General Meeting which will be investments which generated substantial cash-infl ows. held on Wednesday, 24 October, These funded both the repayment of debt and ongoing at the Macquarie Graduate private equity drawdowns placing the Company in its School of Management in strongest position for some years. With that backdrop, Sydney. and the support of our banker, the Company was able to negotiate an extension of its debt facility for another two years at a reduced cost and amount. Continued expectations of cash infl ows then enabled the declaration of a 2.5 cents per share dividend with signifi cant tax Geoff Brunsdon benefi ts attached. Chairman 24 August 2012 We hope that these two milestones signal the start of a regular fl ow of cash to shareholders in line with our strategy of winding down the portfolio. That hope, however, must be tempered by the ongoing volatility and lack of confi dence exhibited in fi nancial markets’ behaviour. It is currently diffi cult to point to many indicators of sustained market stability so we expect activity within the private equity sector to be relatively
subdued over the next 12 months. For personal use only use personal For
Page 2 Investment Strategy
The Company provides investors with the opportunity funding for the remaining commitments will be to access investments in private equity not normally generated by drawing on a debt facility and re-cycling available to the individual or smaller investor. cash that may be generated by the portfolio. Sales of part of the portfolio or equity raising would also be The private equity program has been developed on a considered as “reserve” sources of funding; multi-manager (or “fund of funds”) basis over time, with the aim of building a well diversifi ed portfolio of private dividends and capital returns will be paid to investors equity funds managed by a selection of professional as the portfolio is wound down. private equity managers. The current position and strategy is: From 1 July 2011, Pomona Australia Pty Limited (“Pomona”) ABN 65 146 787 091 has acted as manager to commitments to 16 private equity funds have been implement the Company’s investment strategy. made in order to build the Company’s exposure to private equity investments;
commitments were made to ensure steady “vintage year” diversifi cation but there will be no further commitments following the change in strategy announced in June 2009;
as private equity funds generally operate on a partly paid basis, the Company’s private equity commitments are funded gradually over many years;
Australia’s only listed private
equity fund of funds. For personal use only use personal For
Page 3 ING Private Equity Access Limited Review of Operations
KEY POINTS Strongly positive cash-fl ows Dividend payment of 2.50 cents per share Debt facility reduced and extended on improved terms No debt at year end Value uplifts on realisations Commitments reduced by 25%
CASH FLOW AND EARNINGS The dividend was only declared after careful consideration While the investment portfolio generated very strong of the Company’s portfolio outlook, expectations of cash infl ows during the year from the sale of underlying net cash-fl ows, debt capital availability and the level of assets, the Company experienced a modest loss after tax undrawn private equity commitments. All of those factors of $0.86 million, refl ecting the impact of uncertain market will continue to be assessed on a regular basis but it is conditions on current year valuations. The loss compared hoped that the Company will now be able to pay dividends to a small profi t after tax for the prior year of $1.95 million. on a more regular basis.
The main driver of the change was a modest decline in unrealised valuations which more than off set the NET ASSET BACKING revenue generated by the realisations that the portfolio The underlying value of the investment portfolio is enjoyed. (For accounting purposes a realisation produces captured in the net tangible assets (“NTA”) disclosed “distribution revenue” but also generates a decline in the monthly to the ASX. “fair value of investments” which may have produced profi ts in prior periods.) The NTA at 30 June was $68.5 million. With the 2.5 cent dividend taken into account, pre-tax NTA per share was The most signifi cant realisations, and cash generators, were little changed over the period – moving from $0.52 ($0.53 the exits of: post-tax) at 30 June 2011 to $0.47 ($0.50 post-tax) at Freshmax by Wolseley Partners Fund I; balance date. GoBus by Direct Capital Partners III; Many of the realisations that took place during the year iNova Pharmaceuticals by Archer Funds 3 and 4; were at values above their recent carrying values with positive consequences for the NTA. These, however, were MYOB by Archer Capital Fund 4; and off set by a number of write-off s or devaluations which Rebel Group by Archer Capital Funds 3 and 4. refl ect the diffi cult fi nancial market conditions, particularly in the second half of the year under review. These realisations, plus more modest contributions from Catalyst, Pacifi c Equity Partners, NBC Capital, Propel Private The Company’s return over the year (based on changes Equity and Quadrant Private Equity, generated cash for in pre-tax NAV and dividends paid) was (4.15)%. For the Company of $22.3 million. The cash needs of the reference, the S&P/ASX 300 Accumulation Index declined portfolio were modest, drawing only $4.8 million. This net by (7.01)% over the year. result materially improved the Company’s cash and debt Investors can access monthly NTA releases from the positions and the Board was pleased to be able to declare
For personal use only use personal For Company’s website at www.ingpeal.com.au, via the ASX the fi rst dividend since 2008: 2.5 cents per share (with website or by contacting their broker. attractive tax benefi ts attached) was paid in late June.
Page 4 CAPITAL MANAGEMENT At balance date the Company had $17.8 million of undrawn private equity commitments ($23.6 million as at 30 June 2011), a reduction of 25% over the year. Much of the commitment will not be drawn for some years with only three funds in the portfolio with the capacity for new investments in the near term.
The Company had been partially using its $20 million three year debt facility to fund calls on its portfolio commitments but the strong cash infl ows in the fi rst half of the year enabled the drawn debt to be reduced to zero by 31 December 2011 and enabled cash on hand at that date of $4.7 million. With this relatively strong position and the debt facility expiring in July 2012, we entered negotiations to extend the facility so that this fi nancial backstop would remain available to the Company.
The Company’s banker (National Australia Bank) continues to be supportive and the debt facility has now been extended to July 2014. Amended terms and a facility limit reduced to $12 million will mean that the overall servicing costs are substantially reduced.
While portfolio realisations in the second half of the year were well below those enjoyed in the fi rst half, sale processes are continuing and proceeds should cover the Company’s cash needs. Any drawings on the facility would be viewed as bridging fi nance and we believe that the Company is well placed to be able to service its capital obligations and to keep considering methods of returning cash to shareholders.
The Company’s best position for
a number of years. For personal use only use personal For
Page 5 ING Private Equity Access Limited PRIVATE EQUITY PORTFOLIO The Company’s primary focus has been to build a diversifi ed portfolio of institutional-grade private equity funds. Since the last Annual Report, the Company’s private equity commitments are unchanged at approximately $126 million but with the undrawn amount reduced to less than $18 million.
The summary of the portfolio as at 30 June 2012 is:
Investment Fund Capital Capital to Cash stage size Committed drawn be drawn back focus ($m) ($m) ($m) ($m) ($m)
Archer Capital Fund 3 MBO 428.5 7.1 6.5 0.6 11.6
Archer Capital Fund 4 MBO 1,360.0 10.0 8.9 1.1 6.4
Catalyst Buyout Fund 1 MBO 390.0 8.0 8.0 0.0 0.9
CM Capital Venture Trust No 4 Early Stage 153.5 8.0 6.9 1.1 0.4
Direct Capital Partners III ($A equiv) Exp / MBO 56.7 6.9 6.6 0.3 7.1
Hastings Private Equity Fund II Exp / MBO 180.5 8.0 7.9 0.1 3.7
Ironbridge Capital 2003/4 Fund MBO 450.0 5.0 4.8 0.2 3.8
NBC Private Equity Fund II Exp / MBO 98.6 6.0 6.0 0.0 0.4
NBC Private Equity Fund III Exp / MBO 101.2 10.0 5.8 4.2 0.5
Pacific Equity Partners III MBO 1,254.0 7.9 7.5 0.4 2.0
Pacific Equity Partners IV MBO 3,761.0 9.3 5.4 3.9 0.0
Propel Private Equity Fund II Exp / MBO 70.8 3.4 3.4 0.0 5.2
Quadrant Private Equity Fund No.1 Exp / MBO 265.0 8.0 7.7 0.3 8.4
Quadrant Private Equity Fund No.2 Exp / MBO 500.0 10.0 8.7 1.3 5.9
Wolseley Partners Fund I Exp / MBO 107.4 8.0 8.0 0.0 1.8
Wolseley Partners Fund II Exp / MBO 235.0 10.0 5.7 4.3 0.0
Total 125.6 107.9 17.8 57.9
Note 1. Numbers subject to rounding.
Note 2. “Exp / MBO” means expansion capital and management buy-outs. For personal use only use personal For
Page 6 The underlying private equity portfolio decreased slightly over the year. It started with 80 investments and ended with 66. There were 3 new investments added and 12 sold while the diffi cult trading conditions of the last few years caught up with a number of companies and 5 were put into administration or liquidation. Those disappointments were off set by a number of very good results. The exits within the portfolio were:
Fund Company Total return as a multiple of cost
Archer Capital Funds 3 & 4 Rebel Group 3.1x
Archer Capital Funds 3 & 4 iNova Pharmaceuticals 2.6x
Archer Capital Fund 4 MYOB 3.2x
Catalyst Buyout Fund 1 Aperio 0.8x
Catalyst Buyout Fund 1 Metro Glasstech 0.1x
Direct Capital Partners III GoBus 1.8x
NBC Private Equity Fund II IBC Water Group 0.0x
NBC Private Equity Fund III Aust Electrical Systems 1.5x
Propel Private Equity Fund II Invocare (includes Beldisloe) 3.0x
Pacific Equity Partners Fund III Independent Liquor 1.1x
Godfreys 0.0x
Quadrant Private Equity Fund No. 1 The Jewellery Group 0.0x
Marks & Wallings Tyres 0.0x
Wolseley Partners Fund I Freshmax 1.3x
Co-investment CathRx 0.0x
With only a few managers still building their portfolios the number of new investments was modest. Only three new deals were introduced into the portfolio, as summarised in the table below:
Fund Company Description
Pacific Equity Partners Fund IV Veda Advantage Business intelligence, credit research
SCA Hygiene Australasia Hygiene and tissue products
Wolseley Partners Fund II AGS World Transport Freight forwarding business
Additional investment into existing portfolio companies continued to be active - 14 investments received follow-on funding.
The slowed investment pace means that the average holding period of investments within the portfolio has increased
For personal use only use personal For again, with 68% now more than four years old (the usual holding period of a private equity investment is between 4 to 7 years within a fund life of 10 years).
Most of the funds in the portfolio have completed their new investment programmes. Those with capacity to add to their portfolios are NBC III, PEP IV, and Wolseley II which in aggregate could add a half a dozen or so investments to the 66 in the portfolio at balance date.
Page 7 ING Private Equity Access Limited No. of new investments (including exits) OUTLOOK
2012 119 Last year the fi rst paragraph of this section read: 3 2011 116 “Investment markets, here and abroad, are clouded by 7 uncertainty. On the home front, fi nancial markets remain 2010 109 4 fragile due to the eff ects of the introduction of the carbon 105 2009 12 tax, the “two-speed economy”, minority government 2008 93 and weak consumer confi dence plus the impact of 21 crises in Europe, political tensions across North Africa 2007 72 40 and the Middle East and continuous weakness in the US 2006 32 economy. But there are enough positive signs to provide 23 encouragement.” 2005 9 7 All of those factors are still with us although, if anything, 0 20406080100120140 Europe looks in a worse position, a slowdown in China has
Per year Cumulative emerged, commodity prices have softened and there are fewer encouraging positive signs.
No. of new investments (excluding exits) The pace of new investment activity in the Australian sector is suitably cautious with the banking sector supportive of 2012 66 strong companies and well-credentialed private equity 3 managers. There is new activity within the portfolio and 2011 63 7 since year-end Pacifi c Equity Partners has been fi nalising 56 2010 4 two deals – the acquisition of Peters Ice Cream and the 2009 52 public to private deal with Spotless. Wolseley Partners has 11 also added to its investment in the childcare sector with a 2008 41 17 “bolt-on” acquisition for Guardian Childcare. 2007 24 13 In spite of last year’s outlook the Company enjoyed a 11 2006 8 reasonable amount of exit activity with Archer Capital 2005 3 being the stand-out performer in the portfolio through 2 three very rewarding exits. Wolseley Partners achieved 0 1020304050607080 the fi rst exit from its portfolio with the sale of Freshmax and Quadrant managed a rare event for the year with Per year Cumulative the IPO of its Summerset Retirement Villages on the NZ exchange. There is a range of exit activity continuing within the sector in Australia and, while we are aware The years in the tables above are fi nancial years. that some processes have been withdrawn, others continue with a number of transactions being successfully concluded during the last couple of months.
The current portfolio appears in a relatively sound position with the diffi cult environment of the last few years having weeded out a number of the weaker companies.
We remain confi dent that the Company will enjoy a range of exits during the remainder of the fi nancial year and is For personal use only use personal For likely to enjoy positive net cash-fl ows again which may result in further dividends.
Page 8 SUMMARY OF 20 LARGEST PRIVATE EQUITY EXPOSURES (As a percentage of the value of the Company’s total assets as at 30 June 2012.)
Fund Date invested Company Percentage
NBC Private Equity Fund III Dec-07 Fenix Holdings 5.44%
Pacific Equity Partners Fund III Sep-06 Link Administration Holdings 4.55%
Pacific Equity Partners III & IV Jul-07 Veda Advantage 4.45%
Quadrant Private Equity Fund No. 1 Apr-08 Virtus Health 4.07%
Pacific Equity Partners Fund III Jun-06 Griffins Food Limited 3.57%
Wolseley Partners Fund I Jan-06 Pacific Services Group 3.27%
Quadrant Private Equity Fund No. 2 Apr-09 Summerset Retirement Villages 3.19%
Wolseley Partners Funds I & II Apr-07 CoxGomyl 2.82%
Quadrant Private Equity Fund No. 2 Jul-10 Sentia Media 2.62%
Quadrant Private Equity Fund No. 2 Dec-07 Independent Pub Group 2.52%
Catalyst Buyout Fund1 Jan-07 Global Television 2.40%
Pacific Equity Partners Fund IV Jan-10 Energy Developments 2.30%
Archer Capital Fund 4 May-10 Ausfuel 2.28%
Catalyst Buyout Fund 1 Feb-07 EziBuy Limited 2.27%
Archer Capital Fund 4 Jun-11 Quick Service Restaurants 2.11%
Propel Private Equity Fund II Nov-04 The PAS Group 2.09%
Wolseley Partners Funds I Jan-08 Next Media Holdings 2.07%
Wolseley Partners Funds II Jul-10 Abergeldie Group 2.04%
NBC Private Equity Fund III Aug-08 Layby Services Australia 1.85%
NBC Private Equity Fund II Feb-07 Eagle Boys Pizza 1.76%
Total 57.67% For personal use only use personal For
Page 9 ING Private Equity Access Limited Portfolio Diversifi cation
PORTFOLIO DIVERSIFICATION The private equity portfolio is diversifi ed by investment management team, investment stage, company size, industrial sector, geography, deal size and maturity. With 66 underlying investments the portfolio still provides a broad spread of promising opportunities.
Industry sector exposure
Utilities 2% Materials 3% Information Technology 7% Industrials 12% Financials 12%
Healthcare 18%
Consumer Staples 10% Consumer Discretionary 36%
Underlying investment stage
Other 8% Early Stage 8%
Expansion 19%
Development 6% MBO 59%
Head offi ce location
NZ 19%
NSW 38%
USA 13%
WA 4% SA 2%
QLD 11% VIC 13% For personal use only use personal For
Diversifi cation by sector, stage and geography.
Page 10 Private Equity Fund Profi les
ARCHER CAPITAL Archer Capital Fund 3 % of IPE assets www.archercapital.com.au Rebel Group Sporting goods and leisure wear retailer Sold F12 Archer Capital is a leading private iNova Pharmaceuticals equity investment house which Manufactures branded prescription drug products Sold F12 has enjoyed a long presence in the Cellarmasters Australian buy-out market. Retail wine distribution Sold F11 Sydney-based Archer invests Emeco International in leveraged buy-outs, seeking Earthmoving equipment rental business Sold F10 companies with strong market Onesource Group positions and/or growth potential, Distributor of offi ce technology equipment Sold F10 leading to strong, stable cash fl ows. Paradise Foods Biscuit and snack food manufacturer Sold F08 Repco Corporation Distributor of automotive parts, tools and equipment Sold F07
Archer Capital Fund 4 Funtastic Limited Distribution and marketing of children’s products 0.0% Ausfuel Reseller and long-haul transporter of fuel and oil products 2.3% Brownes Producer of milk, juice and yoghurt 0.6% V8 Supercars Controls Australia’s most popular motor sport 1.2% Healthe Care Operates regional hospitals mainly in NSW and Vic 1.7% Quick Service Restaurants Fast food operator – Red Rooster, Chicken Treat, Oporto 2.1% Rebel Group Sporting goods and leisure wear retailer Sold F12 iNova Pharmaceuticals Manufactures branded prescription drug products Sold F12 MYOB Provider of accounting software Sold F12 Cellarmasters
Retail wine distribution Sold F11 For personal use only use personal For
Page 11 ING Private Equity Access Limited CATALYST INVESTMENT Catalyst Buyout Fund 1 % of IPE assets MANAGERS Moraitis Group Pty Ltd Fresh produce wholesaler and distributor 1.4% www.catalystinvest.com.au Global Television Ltd Equipment and services to TV and broadcast companies 2.4% Sydney-based Catalyst has a mid- market buyout and expansion EziBuy Limited Clothing and home decor catalogue retailer 2.3% capital focus investing in companies with enterprise values Aperio Group Pty Ltd Manufacturer of fl exible packaging products Sold F12 of between $50 million and $300 million. Metro Glasstech Manufacturer and supplier of glass products w/off F12 Valley Longwall Underground drilling and mining machinery provider w/off F11 Australian Discount Retail Discount variety retail market w/off F09
CM CAPITAL CM Capital Venture Trust No 4 % of IPE assets www.cmcapital.com Altiris Drug company developing small molecule drug therapies 0.2% CM Capital is a specialist venture Sunshine Heart Inc capital manager based in Brisbane. Developing a mechanical heart assist device 0.5% The team invests in early stage Mesaplexx Pty Ltd companies in the life sciences, Superconductor frequency fi lters for wireless information technology and telecommunications 0.3% telecommunication sectors. Osprey Medical Inc Investments are generally funded Developing cardiovascular catheter systems 1.0% over a number of years rather than Piedmont Pharmaceuticals LLC with a single up-front amount. Specialty human and veterinary pharmaceuticals 1.1% AdGent 007, Inc Online advertising fi ltering software 0.4% Ingenero Green energy supplier 0.6% ThreatMETRIX Inc Anti fraud software for internet transactions 1.1% Pathway Therapeutics Developing small molecule inhibitors for human cancers 0.7% Datacastle Corporation
Enterprise software for data protection 0.4% For personal use only use personal For SpeeDx Pty Ltd Molecular diagnostics platform developer 0.6% Xumii Inc (previously uiActive Inc) Delivery of applications and content to mobile devices w/off F10
Page 12 DIRECT CAPITAL Direct Capital Partners III % of IPE assets www.directcapital.co.nz NZ Pharmaceuticals Manufactures and exports pharma intermediates Based in Auckland, Direct and products 1.4% Capital Partners focuses on Stratex mid-market expansion and Specialist in laminated plastic and foil packaging 0.7% management buyout investments Shears & Mac Limited in New Zealand and Australia. The Joinery business for furniture manufacturing 0.1% founding directors established Direct Capital in 1994 and are Rodd & Gunn now considered to be pioneers of Menswear apparel chain 0.2% private equity in New Zealand. NZ King Salmon Salmon producer 1.5% Fishpond Online retailer 0.1% Go Bus Limited Transport services Sold F12 Triton Hearing Clinics Audiology services business Sold F11 Express Logistics Group Logistics provider specialising in dry goods delivery Sold F10 International Forwarding Logistics provider Sold F09 Innovair Group Limited Manufacture and market of pest control air dispensing products Sold F09 Max Fashions
Women’s apparel retailer Sold F08 For personal use only use personal For
Page 13 ING Private Equity Access Limited HASTINGS FUNDS Hastings Private Equity Fund II % of IPE assets MANAGEMENT Endeavour Learning Group 1.0% www.hfm.com.au Vocational and higher education provider Bras N Things Hastings Private Equity is part of Women’s intimate apparel, swimwear and accessories 1.8% Melbourne-based Hastings Funds Photolibrary Management (a subsidiary of Online supplier of photographic images Sold F11 Westpac Banking Corporation). Hastings Private Equity Fund II Refl ections Group Cleaning, security, pest control services w/off F11 targeted investments in mature companies. Recovcorp Scrap metal business Sold F10 NQR Grocery Clearance Stores Specialist food and grocery clearance stores w/off F09 Shorko Holdings Manufacturer of fl exible packaging for the food industry Sold F08 G&S Engineering Engineering, maintenance and construction services Sold F08 Auscap Closure Systems Manufactures metal closures for beverages and food Sold F07
IRONBRIDGE CAPITAL Ironbridge Capital 2003/4 Fund % of IPE assets Recreational Tourism Operates a chain of backpacker complexes 0.1% www.ironbridge.com.au STARDEX Ironbridge Capital invests primarily Specialist general insurance underwriting agency 0.1% in large management buy-out Barbeques Galore transactions in Australia and New Retailer of barbeques and barbeque accessories 0.6% Zealand working out of offi ces Super A-mart in Sydney and Auckland. Prior to Big box furniture retailer 0.6% forming Ironbridge, the principals Mrs Crocket’s Kitchen of the business were responsible Chilled food manufacturer w/off F10 for the strongly performing The Riviera Group portfolio of the fi rst Gresham Designs and makes luxury motor yachts and cruisers w/off F09 Private Equity Fund. Qualcare Group Holdings
Aged care facilities Sold F08 For personal use only use personal For Affi nity Health Private hospital operator Sold F05
Page 14 NBC CAPITAL NBC Private Equity Fund II % of IPE assets www.nbccapital.com.au Withcott Seeds Seedling producers for fresh vegetable markets 0.4% Brisbane-based NBC Capital Eagle Boys Pizza focuses on small to medium Franchised pizza business 1.8% sized management buy-outs and BCP Pre Cast expansion capital opportunities, Manufactures pre-cast cement products 0.1% mostly drawn from the manager’s IBC Water Group Queensland deal-fl ow, across a Manufactures water treatment and waste water plants w/off F12 range of industries. Troncs Road transport Sold F11 Australian Water Systems Water tank manufacturing companies w/off F11 Aunger Car Craft Pty Ltd Manufacture and distribution of auto accessories w/off F10
NBC Private Equity Fund III Fenix Holdings Health and fi tness clubs 5.4% Hi Tech Express Specialised freight service provider 0.1% Layby Services Australia Christmas hamper provider 1.9% Australian Electrical Systems
Manufactures high voltage switchgear Sold F12 For personal use only use personal For
Page 15 ING Private Equity Access Limited PACIFIC EQUITY Pacifi c Equity Partners Fund III % of IPE assets PARTNERS Xtralis 0.8% www.pep.com.au Fire protection and video-based surveillance Griffi ns Food Limited PEP invests in large management Snack foods business 3.6% buy-out opportunities in Australia Link Administration and New Zealand. The PEP stable Share registry and fund administration 4.6% of funds started in 1998 and the Veda Advantage Limited investment team is now Australia’s Business intelligence – credit research 3.3% largest private equity fi rm having Hoyts Group closed its fourth fund with Hoyts cinema and advertising 0.8% commitments of $4 billion. Independent Liquor (NZ) Manufactures ready to drink alcoholic beverages Sold F12 Godfreys Group Cleaning appliance retailer w/off F12 Tegel Poultry Poultry producer Sold F11
Pacifi c Equity Partners Fund IV Hoyts Group Hoyts cinema and advertising 0.6% American Stock Transfer US share registry provider 1.5% Energy Developments (ASX:ENE) Supplies renewable/low greenhouse gas emission energy 2.3% Veda Advantage Limited Business intelligence - credit research 1.2% SCA Hygiene Australasia Hygiene and tissue products 1.0% RED group (Borders)
Retailer of books and related products w/off F11 For personal use only use personal For
Page 16 PROPEL INVESTMENTS Propel Private Equity Fund II % of IPE assets www.propelinvestments.com.au Pacifi c Apparel Solutions Wholesale apparel business 2.1% Propel Private Equity Fund II is Bledisloe Group managed by Propel Investments Funeral service operator Sold F12 which was founded in June 2007 by former executives of DB Capital Pacifi c Services Solutions (Tempo) Facility management and multi discipline support services Sold F06 Partners. The Fund has invested in majority and minority positions in Australian mid market management buy-out and buy-in deals.
QUADRANT PRIVATE Quadrant Private Equity No. 1 % of IPE assets EQUITY Seniors Money International Reverse mortgages for the over 60s 0.7% www.quadrantpe.com.au Ortho Group Quadrant’s focus is on medium Orthopaedic surgical practices 0.0% sized management buy-outs and The Jewellery Group Retail jewellery store chain Sold F12 expansion capital opportunities in Australia and New Zealand. The Marks & Wallings Tyres Dealer in tyres, wheels and associated products w/off F12 Sydney-based team has a long ATF Hire record of success. Hires temporary fencing to construction and events Sold F11 Kathmandu Outdoor clothing and equipment retailer Sold F10 Tower Software Engineering Software for electronic records management Sold F08
Quadrant Private Equity No. 2 Independent Pub Group Owner of gaming hotels 2.5% Virtus Health Fertility treatment specialists 4.1% Summerset Retirement Villages Retirement and Care facilities in NZ 3.2%
For personal use only use personal For Media Monitors Media analysis services 2.6% Quick Service Restaurants Fast food chain – Red Rooster, Chicken Treat, Oporto Sold F11
Page 17 ING Private Equity Access Limited WOLSELEY PRIVATE Wolseley Partners Fund I % of IPE assets EQUITY Pacifi c Services Group Pty Limited Electrical contracting and services business 3.3% www.wolseleypartners.com.au CoxGomyl Manufactures building maintenance units for high rise 1.6% Wolseley Partners was established in 1999 by its three principals as Cartridge World Remanufacture of cartridges for offi ce machines 0.5% a Sydney-based fi rm providing consulting and advisory services. Next Media Holdings Magazine publishing 2.1% Its fi rst private equity fund was established in 2005 focusing Freshmax Pty Limited Fresh produce wholesaler and distributor Sold F12 on controlling interests in mid- size unlisted manufacturing, Wolseley Partners Fund II distribution and services CoxGomyl companies. Manufactures building maintenance units for high rise 1.2% Cartridge World Remanufacture of cartridges for offi ce machines 0.8% Byron Group Manufactures ambulances & healthcare/aviation equip 0.6% Abergeldie Group Engineering solutions for infrastructure projects 2.0% Guardian Childcare Childcare centre operator 1.6% AGS World Transport Freight forwarding business 1.1%
CO-INVESTMENTS % of IPE assets The portfolio also includes co- Next Health investments – direct investments Supplier of nutritional supplements and alternative in companies alongside a private medicine 1.5% equity manager. CathRx Pty Ltd (ASX : CXD) Developing improved cardiac catheters Sold F12 Dilithium Networks Inc
Interconnectivity software for voice, video and data w/off F11 For personal use only use personal For
Page 18 Directors’ Report
The Directors present their report together with the DIRECTORS fi nancial report of ING Private Equity Access Limited (the The names and details of the Company’s Directors in Company) for the fi nancial year ended 30 June 2012 and offi ce during the year and until the date of this report the auditor’s report thereon. are as follows:
Geoff Brunsdon CORPORATE INFORMATION Independent, Non-Executive Director and Chairman Corporate structure Appointment date: 3 February 2004
ING Private Equity Access Limited is a company limited Jon Schahinger by shares that is incorporated and domiciled in Australia. Managing Director It has no parent entity. Appointment date: 3 February 2004 Principal activities Don Stammer The principal activity of the Company during the year was Independent, Non-Executive Director holding long-term investments in private equity funds. Appointment date: 3 February 2004 The Company began these activities after listing on the Australian Stock Exchange (ASX) on 25 November 2004.
Employees Until the date of this report, the Company has no employees because the functions of the Company are performed by the investment manager, Pomona Australia Pty Limited (the Manager), under the terms of a
Management Agreement. For personal use only use personal For
Page 19 ING Private Equity Access Limited Qualifi cations Donald Stammer The qualifi cations and experience of the Company’s MA (UNE), PhD (ANU) Independent and Non-Executive Director Directors in offi ce during the fi nancial year and until the date of this report are as follows: Don Stammer has had a long and distinguished career in each of academia, central banking Geoff rey Brunsdon and investment banking and is one of Australia’s best BComm FCA FFINSA FAICD known economists. From 1972 until 1981 Don held senior Independent and Non-Executive Director positions, including deputy chief manager, at the Reserve (Chairman) Bank of Australia. From 1981 until 2001 he was Chief Geoff Brunsdon is Chairman of Sims Metal Management Economist/Director of Investment Strategy with Deutsche Limited, APN Funds Management Limited, and MetLife Bank (formerly Bain & Company). Don has advisory roles Insurance Limited, and is a director of Macquarie with the Third Link Growth Fund, Altius Asset Management University Hospital. He was previously Managing Director and Philo Capital Management. He chairs the Australian and Head of Investment Banking of Merrill Lynch Ecosystems Foundation Incorporated and is a member International (Australia) Limited and is also involved in of the Investments Committee of the National Children’s several non-profi t organisations. Geoff was appointed a Medical Research Institute. Don was a Director of Praemium Director and Chairman of the Company on 3 February Limited from 11 May 2006 to 20 March 2012. Don was 2004 and is a member of the Audit Committee. appointed a Director on 3 February 2004 and is Chairman of Jon Schahinger the Audit Committee. BComm, CPA Managing Director The Manager has made Jon Schahinger available to the Company as Managing Director. That role is to oversee the implementation of the Company’s investment strategy and its administrative requirements. He is the Company’s primary contact for its external relationships. Jon has responsibility for all aspects of the Manager’s private equity operations and has a background in accounting, fi nance and investment. Jon has been in the funds management industry for over 20 years in both the listed and unlisted arenas and is a Non- Executive Director of two other public companies, Advent III Private Equity Limited and Quickfl ix Limited. Jon was
appointed Managing Director on 3 February 2004. For personal use only use personal For
Page 20 Company secretaries CORPORATE GOVERNANCE STATEMENT The Company Secretaries in offi ce during the year were In recognising the need for high standards of corporate Chris Hadjia (appointed 9 May 2008, resigned 12 October behaviour and accountability, the Directors of the Company 2011) and Sam Jackson (appointed 21 March 2011). Sam support the principles of corporate governance issued by is a member of the Institute of Chartered Accountants the ASX. The Company’s corporate governance statement is Australia and acts as the Chief Financial Offi cer of the contained in a later section of this annual report. Company. He is also Company Secretary and Chief Financial Offi cer of the Manager. REMUNERATION REPORT – AUDITED Directors’ meetings This remuneration report outlines the Director and The number of Directors’ meetings (including meetings Executive remuneration arrangements of the Company in of committees of Directors) and number of meetings accordance with the requirements of the Corporations Act attended by each of the Directors of the Company 2001 and its Regulations. For the purposes of this report, during the fi nancial year are: key management personnel of the Company are defi ned Meetings of as those persons having authority and responsibility for Audit and planning, directing and controlling the major activities of Directors’ Compliance the Company, directly or indirectly, and may include any Meetings Committee Director. For the purposes of this report, the term ‘executive’ encompasses the Managing Director only. Held Attended Held Attended
Geoff Brunsdon 9 9 4 4 Remuneration policy The Company does not have a remuneration committee Jon Schahinger 9 8 – – and it is not the intention of the Board to establish a Don Stammer 9 9 4 4 Remuneration Committee at this stage. In the event that the Board deems it necessary, one will be established. Currently, * Jon Schahinger is not a member of the Audit and Compliance Committee. only Independent Directors are paid Directors’ fees by the Company. The amount that these Directors receive is Directors’ interests assessed from time to time having regard for the estimated The relevant interest of each Director in the shares issued future workloads and responsibilities of the independent by the Company, as notifi ed by the Directors to the ASX in Directors of the Company and prevailing market conditions. accordance with S205(1) of the Corporations Act 2001, at There is no link between remuneration paid to Directors and the date of this report is as follows: corporate performance.
Number of Ordinary Shares The Manager intends to pay up to 20% of any performance fees it receives to the Managing Director, Mr Jon Schahinger, Geoff Brunsdon 1,183,242 who is also remunerated by the Manager. Since inception, Jon Schahinger 1,000,000 no performance fee has become due or payable by the Company to the Manager. Don Stammer 640,000
For personal use only use personal For
Page 21 ING Private Equity Access Limited Compensation of Directors From establishment, no Director has received or become entitled to receive a benefi t by reason of a contract made by the Company or a related body corporate with the Director or with a fi rm of which he is a member or with a company in which he has a substantial fi nancial interest, other than disclosed below:
Primary salary and fees ($) Superannuation* ($) Total ($)
2012 2011 2012 2011 2012 2011
Geoff Brunsdon 55,046 55,046 4,954 4,954 60,000 60,000
Jon Schahinger ------
Don Stammer 32,110 32,110 2,890 2,890 35,000 35,000
James Wright* n/a - n/a - n/a -
Total compensation 87,156 87,156 7,844 7,844 95,000 95,000
* James Wright was a director of the Company during the prior period, resigning on 17 June 2011, but as an executive of the previous manager, received no remuneration from the Company.
Under the current terms of the Company’s constitution, MANAGEMENT AGREEMENT the non-executive Directors as a whole may be paid or provided remuneration for their services the total Management fee amount or value of which must not exceed an aggregate In consideration for the services provided under the maximum of $150,000 per annum. Management Agreement, the Manager is entitled to a management fee which is calculated on the last business No remuneration is paid by the Manager (or the previous day of each month and paid no less frequently than manager) directly to any Director for services as a Director quarterly. of the Company. Consequently, no compensation as defi ned in AASB 124 “Related Party Disclosures” is paid The management fee is charged at the rate of 0.85% per by the Company to the Directors as Key Management annum of the gross asset value of the portfolio. Personnel. Performance fee No Director has received a share based payment or other The Manager will be entitled to a performance fee long term benefi t during the year ended 30 June 2012 calculated annually over three year rolling periods. The (2011: $nil). fi rst three year period was the period from the end of Emoluments of the fi ve most highly paid executive offi cers the month in which the Company was admitted to the of the Company ASX’s Offi cial List to the third anniversary of that date (30 November 2007). Other than the Directors and Company Secretaries there were no executive offi cers. The fee payable is equal to 10% of any out-performance of the Portfolio over a benchmark which is the greater of:
(a) the total return of the S&P/ASX 300 Accumulation Index over the calculation period plus 3% per annum; and
(b) 25% over the calculation period. For personal use only use personal For As at 30 June 2012, no performance fee has been paid or become payable to the Manager or the previous manager (2011: $Nil).
Page 22 REVIEW AND RESULTS OF OPERATIONS Likely developments During the reporting period the Company engaged in Although macro-economic conditions continue to be its principal activity - holding long term investments in volatile, the Company expects a continuation of the private equity funds, the results of which are enclosed in relatively strong cash infl ows enjoyed over the last the attached fi nancial statements. 18 months. Depending on the level of private equity drawdowns this could mean that payment of further cash Operating results for the year to shareholders is achievable, in line with the Company’s Financial market conditions and a relatively subdued strategy of delivering value over the medium to longer private equity sector resulted in a small loss for the terms. period but the Company achieved a promising milestone during the year with the fi rst payment of a dividend since late 2008. Notwithstanding the uncertain fi nancial INDEMNIFICATION AND INSURANCE OF market environment, the investment portfolio generated DIRECTORS AND OFFICERS signifi cant cash infl ows enabling debt to be reduced to Indemnifi cation zero while meeting ongoing private equity obligations. This improved position enabled an extension of the The Company has agreed to indemnify the Directors Company’s debt facility on improved terms, payment of of the Company against all liabilities to another person the dividend and a cash holding of $2.9 million at year (other than the Company) that may arise from their end. position as Directors of the Company, except where the liability arises out of conduct involving lack of good faith. Earnings per share for the 2012 2011 The agreement stipulates that the Company will meet reporting period based on the cents cents the full amount of any such liabilities, including costs and weighted average number of expenses. ordinary shares The Company has not indemnifi ed the current or former Basic earnings per share (0.63) 1.43 auditor of the Company. (cents per share) Insurance premiums Diluted earnings per share (0.63) 1.43 In the previous fi nancial year, the Company paid insurance (cents per share) premiums of $88,107 in respect of the Directors’ liability Signifi cant changes in the state of aff airs and legal expenses insurance contracts, for current and former Directors of the Company for the period from There were no signifi cant changes in the state of aff airs of 31 March 2011 to 30 September 2012. The insurance the Company that occurred during the fi nancial year. premiums relate to: Dividends costs and expenses incurred by the relevant offi cers in Dividends paid or declared by the Company since the end defending proceedings, whether civil or criminal and of the previous fi nancial year were: whatever their outcome; and
Declared and paid Cents per Total amount Payment other liabilities that may arise from their position, with during the year share $‘000 date the exception of conduct involving a wilful breach of duty or improper use of information or position to gain Interim 2012 2.50 3,414 28 June 2012 a personal advantage.
Matters subsequent to the end of the Disclosure of the limit of liability under the policy is fi nancial year rohibited under the terms of the insurance contract.
No matters or circumstances have arisen since the end of For personal use only use personal For the reporting period which signifi cantly aff ected or may signifi cantly aff ect the operations of the Company, the results of those operations or the state of aff airs of the Company.
Page 23 ING Private Equity Access Limited NON-AUDIT SERVICES ENVIRONMENTAL REGULATION The Company’s auditor, Grant Thornton, is also contracted The Company’s operations are not subject to any to perform tax advisory services in relation to the signifi cant environmental regulations under either preparation and lodgement of the Company’s annual tax Commonwealth or State legislation. return. The fee paid for this service in relation to the 2012 fi nancial year was $8,250 including GST. In the prior year, the predecessor auditor performed similar services, and the ROUNDING fee quoted for this service was $9,350 including GST. The Company is of a kind referred to in ASIC Class Order The Board has considered the non-audit services provided 98/100 dated 10 July 1998 and in accordance with that during the year by the auditor and in accordance with a Class Order, amounts in the fi nancial report and Directors’ resolution of the Audit Committee, is satisfi ed that the report have been rounded off to the nearest thousand provision of those non-audit services during the year by dollars, unless otherwise stated. the auditor is compatible with, and did not (or will not) This report is made with a resolution of the Directors: compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:
All non-audit services were subject to the corporate governance procedures adopted by the Company and Geoff Brunsdon have been reviewed by the Audit Committee to ensure Chairman they do not impact the integrity or objectivity of the Sydney auditor; and 24 August 2012 The non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics of Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards. Details of the amounts paid to the auditor of the Company, Grant Thornton, and its related practices for audit and non-audit services provided during the year are set out in Note 26. In addition, amounts paid to other auditors for the statutory audit or other services have been disclosed.
Lead auditor’s independence declaration The lead auditor’s independence declaration is set out on page 25 and forms part of the Directors’ report for the
fi nancial year ended 30 June 2012. For personal use only use personal For
Page 24 Lead Auditor’s Independence Declaration
under S307C of the Corporations Act 2001 For personal use only use personal For
Page 25 ING Private Equity Access Limited Corporate Governance Statement
The Board of Directors of ING Private Equity Access Limited PRINCIPLE 1: LAY SOLID FOUNDATIONS (the Board) is responsible for the corporate governance FOR MANAGEMENT AND OVERSIGHT of the Company. The Board guides and monitors the business and aff airs of the Company on behalf of the Establishment and disclosure of the respective roles and responsibilities of Board shareholders, by whom they are elected and to whom they and Management are accountable. In lieu of senior executives and the duties delegated This Corporate Governance Statement has been set to them, a formal statement delegating authority to out in accordance with the ASX Corporate Governance the Manager has been established in the form of a Council’s “Corporate Governance Principles and Management Agreement between the Company and the nd Recommendations with 2010 Amendments– 2 Manager, and appoints the Manager to: Edition” (the Recommendations). In accordance with the Recommendations, the Corporate Governance Statement Invest and manage the portfolio in accordance with contains specifi c information disclosing the extent to the terms of the Agreement; and which the Company has followed the guidelines during Perform various administrative services such as the year. Additionally, if the Company considers that preparing fi nancial statements and assisting with a Recommendation is inappropriate to its particular communications and regulatory reporting. circumstances, it has not adopted it. In such cases, that fact The Management Agreement may be reviewed has been disclosed below, together with the reasons for periodically to ensure its ongoing suitability. Any non-adoption. additional matters aff ecting the Company are discussed The Recommendations are as follows: in full and dealt with by the Board when required. The performance of the Manager is discussed and assessed Principle 1 at the regular meetings of the Board of Directors and a Lay solid foundations for management and oversight process for a formal evaluation of the Manager is in place.
Principle 2 The Company has adopted a Board Charter to more fully Structure the Board to add value adhere to the Recommendations by formally documenting the Board’s purpose and role, and the powers reserved to Principle 3 the Board. A copy of the Board Charter can be obtained by Promote ethical and responsible decision-making contacting the Registrar. Principle 4 Safeguard integrity in fi nancial reporting PRINCIPLE 2: STRUCTURE THE BOARD TO Principle 5 ADD VALUE Make timely and balanced disclosure Independent Directors Principle 6 The skills, experience and expertise relevant to the Respect the rights of shareholders position of each Director are included in the Annual Principle 7 Report on page 20. Recognise and manage risk The Board consists of both independent and non- independent Directors. Directors of the Company Principle 8 are considered to be independent when they are Remunerate fairly and responsibly independent of the Manager and free from any business or other relationship that could materially interfere with,
or could reasonably be perceived to materially interfere For personal use only use personal For with, the exercise of their unfettered and independent judgement.
Page 26 In the context of Director independence, “materiality” In light of the Company’s strategy, its maturing investment is considered from both the Company and individual portfolio and the skill-sets of the Directors, the Board has Director perspective. The determination of materiality concluded that it will continue with a membership of three. requires consideration of both quantitative and Directors have access to continuing education to update qualitative elements. An item is presumed to be their skills and knowledge, including developments in the quantitatively immaterial if it is equal to or less than 5% of Company and within the industry and environment within the appropriate base amount, such as total shareholders’ which it operates. Additionally, there is the opportunity for assets of the Company. It is presumed to be material Board members to take independent professional advice, if (unless there is qualitative evidence to the contrary) necessary, at the Company’s expense. if it is equal to or greater than 10% of the appropriate base amount. Qualitative factors considered include whether a relationship is strategically important, the PRINCIPLE 3: PROMOTE ETHICAL AND competitive landscape, the nature of the relationship, the RESPONSIBLE DECISION-MAKING contractual or other arrangements governing it and other factors which point to the actual ability of the Director Code of conduct in question to shape the direction of the Company’s While no separate, formal code of conduct exists, the obligations. Board Charter outlines the expectation of the Board, while In accordance with the defi nition of independence above, carrying out its responsibilities and powers, to recognise and the materiality thresholds set, Geoff Brunsdon and its overriding duty and responsibility to act honestly, Don Stammer are considered to be independent and thus, diligently, professionally, in accordance with the law and during the reporting period the Company satisfi ed the ASX in the best interests of the Company’s shareholders and Recommendation with the majority of the Board comprising other stakeholders. independent Directors. In addition to the above, the continuing employment The term in offi ce held by each Director during the fi nancial of all Company offi cers and the Manager’s employees year is set out in the Directors’ report on page 19. is dependent on compliance with the high standards of professionalism and integrity, as contained in their Nomination Committee contracts of employment. The Board, as a whole, serves as a Nomination Committee. Diversity policy The composition of the Board is monitored (both in respect of size and membership) to ensure that the Board As the Company has no employees it has not established has a balance of skill and experience appropriate to a diversity policy but will take diversity into consideration the needs of the Company, including Board succession when considering any changes to the composition of planning. When a vacancy exists, the Board will identify the Board. The ING Group incorporates a commitment candidates with appropriate expertise and experience and to diversity within its core business principles and the appoint the most suitable person. Manager and its employees utilise those principles in their day to day activities. Term of offi ce With the exception of the Managing Director, at least two Directors of the Board must retire and stand for re- election each year. With the exception of the Managing Director, each Director must retire and stand for re- election at least once every three years.
Performance evaluation of the Board For personal use only use personal For An internal process for a formal performance evaluation of the Board, its committees and individual Directors is in place. The Board decided that a comprehensive externally- led process would not add any value to the operation of the Board, given the style of operations of the Company.
Page 27 ING Private Equity Access Limited PRINCIPLE 4: SAFEGUARD INTEGRITY IN PRINCIPLE 5: MAKE TIMELY AND FINANCIAL REPORTING BALANCED DISCLOSURE Audit Committee The Company has provisions within its Board Charter requiring compliance with ASX Listing Rule disclosures. The Board has established an Audit and Compliance To meet these provisions, the Company ensures that all Committee, which operates under a charter approved investors are kept up to date with any and all information by the Board. It is the Board’s responsibility to ensure in an equal and timely manner, by providing regular that an eff ective internal control framework exists announcements to the Australian Securities Exchange and within the entity. This includes internal controls to deal shareholders, and by posting up to date information onto with both the eff ectiveness and effi ciency of signifi cant the Company’s website (www.ingpeal.com.au). business processes, the safeguarding of assets, the The Board is careful to ensure that announcements maintenance of proper accounting records and the are kept factual, clear and balanced at all times. reliability of fi nancial information, as well as non-fi nancial Announcements generally take one of three forms: considerations such as the benchmarking of operational key performance indicators. The Board has delegated the Monthly net tangible asset announcements which responsibility for the establishment and maintenance are released in line with a timetable published in the of a framework of internal control and ethical standards Company’s Annual Report; for the management of the Company to the Audit and Semi-annual and annual audited fi nancial reports of Compliance Committee. the Company; and The Audit and Compliance Committee also provides the Ad-hoc releases whenever the Board considers it Board with additional assurance regarding the reliability appropriate to advise investors of a new development of fi nancial information for inclusion in the financial within the Company or its portfolio. reports. The members of the Audit and Compliance The aim of the Board’s continuous disclosure policy Committee are the independent Directors, who during the is fi vefold: year were Don Stammer (Chairman) and Geoff Brunsdon. Keep current and potential investors abreast of the Details of the qualifi cations of the members of the Audit Company’s activities and results; and Compliance Committee can be found in the Directors’ report. Reduce the possibility of the development of a false market in the Company’s securities; In contrast to ASX Principle 4.2, suggesting a membership Safeguard the confi dentiality of corporate of at least three, the Audit and Compliance Committee information to avoid premature disclosure; contains two members because there are only two independent Directors on the Board. The Audit and Provide a contact for media, analysts and shareholder Compliance Committee and the Board believe that the queries; and current Audit and Compliance Committee structure Ensure constant compliance with the ASX listing rule is suffi cient to be able to meet the requirements of its disclosure requirements. Charter.
For details on the number of meetings of the Audit and Compliance Committee held during the year and the attendees at those meetings, refer to page 21 of this fi nancial report.
A copy of the Audit and Compliance Committee charter is
available on request from the Registrar. For personal use only use personal For
Page 28 PRINCIPLE 6: RESPECT THE RIGHTS PRINCIPLE 7: RECOGNISE AND MANAGE OF SHAREHOLDERS RISK In the interest of promoting investor confi dence, Establishment of a system of risk oversight and the Company promotes a culture where trading in management and internal control its shares can proceed in an effi cient and informed The Board has overall responsibility for oversight and market. Although the Company does not have a formal management of risk as well as ensuring the adequacy of communications policy, normal Company practice is the internal control environment. to disclose to shareholders (electronically and when required, by other means of communication) all relevant As much of the management of the Company has been information on a timely basis, in such a way as not to delegated to the Manager, the Manager is obliged to aff ect market sensibility or commit a breach of any maintain adequate internal risk management objectives, confi dentiality clauses (see Principle 5 above). policies and procedures to manage the Company’s material business risks and provides the Board with Up to date information can be accessed via the Company a report detailing such risks and advising whether website, including but not limited to: those risks are being managed eff ectively. These risks Company strategy; include fi nancial risks such as market risk, credit risk and liquidity risk, as well as operational risks such as those Details of the investment portfolio; in connection with the internal control framework and Archived information releases; disaster planning. Company policies and charters; and Operational risk is primarily handled by the Manager, Company contact details. although the responsibility remains with the Board who The share registry website also includes useful online may review and assess the fi ndings of any internal and tools, such as enabling electronic submission of annual external reviews of the Manager’s systems. report elections and accessing of a shareholder’s own The policies and objectives surrounding the principal personal information. fi nancial risks facing the Company have been outlined in Notice of the annual general meeting is released to note 6 “Financial risk management”, together with details shareholders in good time, to ensure that as many of the controls surrounding these risks. shareholders as possible have the opportunity to attend. The Company does not have a designated Risk Committee The format of the annual general meeting is designed to because the Board as a whole serves as the Risk promote opportunities for investors to raise issues and ask Committee. questions, however at other times of the year, investors also have the opportunity to raise issues or questions of Directors or the Manager via the contact details on the
Company’s website. For personal use only use personal For
Page 29 ING Private Equity Access Limited Assurance under s295 of Corporations Act 2001 PRINCIPLE 8: REMUNERATE FAIRLY AND Prior to signing the Directors’ Report and Directors’ RESPONSIBLY Declaration, and adopting the accounts, the Board Directors’ Remuneration receives assurances from the people performing the Chief Executive Offi cer and Chief Financial cerOffi Geoff Brunsdon and Don Stammer are remunerated by functions of the Company. These assurances were fees for an aggregate amount of $95,000 per annum received from: (2011: $95,000). All Directors’ payments are inclusive of committee fees and superannuation, and do not include the Managing Director in his capacity as Chief any retirement benefi ts other than superannuation Executive Offi cer of the Company; and contributions made as part of those fees. For details on the Chief Financial Offi cer of the Manager, who the breakdown of the Directors’ remuneration, refer to performs the Chief Financial Offi cer function for the page 22. Company. Presently, only the two independent Directors receive These assurances are that the fi nancial records of the any remuneration from the Company because the non- Company have been properly maintained, the fi nancial independent Director is remunerated by the Manager. statements comply with the accounting standards, the Under the current terms of the Company’s constitution, fi nancial statements and notes for the fi nancial year give the non-executive Directors as a whole may be paid a true and fair view. In addition, they provide assurance or provided remuneration for their services the total that there is a sound system of risk management amount or value of which must not exceed an aggregate and internal control and that the system is operating maximum of $150,000 per annum. eff ectively in all material respects in relation to fi nancial There is no link between remuneration paid to Directors reporting risks. and corporate performance. The Managing Director, Mr Jon Schahinger, who is remunerated by the Manager, is entitled to 20% of any performance fees the Manager receives from the Company.
Due to the small number of Company offi cers it is not the intention of the Board to establish a Remuneration Committee at this stage. In the event that the Board deems it necessary, one will be established. No individual Director is directly involved in deciding his own remuneration.
For personal use only use personal For
Page 30 FINANCIAL STATEMENTS Statement of fi nancial position
2012 2011 As at 30 June Note $’000 $’000
CURRENT ASSETS
Cash and cash equivalents 11a 2,929 821
Receivables 12 80 301
Prepayments 13 48 172
Listed private equity investments 14 - 111
Total current assets 3,057 1,405
NON-CURRENT ASSETS
Unlisted private equity investments 15 61,402 79,102
Deferred tax assets 16 4,878 2,369
Total non-current assets 66,280 81,471
Total assets 69,337 82,876
CURRENT LIABILITIES
Payables 17 132 254
Loans and borrowings 18 - 9,569
Current tax liabilities 16 659 234
Total current liabilities 791 10,057
NON-CURRENT LIABILITIES
Deferred tax liabilities 16 5 2
Total non-current liabilities 5 2
Total liabilities 796 10,059
Net assets 68,541 72,817
EQUITY
Issued capital 19 73,005 73,005
Accumulated loss (4,464) (188)
Total equity 68,541 72,817
The above Statement of fi nancial position should be read in conjunction with the accompanying notes to the fi nancial
statements set out on pages 35 to 59. For personal use only use personal For
Page 31 ING Private Equity Access Limited FINANCIAL STATEMENTS Statement of comprehensive income
2012 2011 For the year ended 30 June Note $’000 $’000 REVENUE Dividends and distributions received 8,998 4,324 Change in net market value of financial assets held at fair value through profit or loss - 305 Total revenue 8,998 4,629 EXPENSES Change in net market value of financial assets held at fair value through profit or loss (9,382) - Management fees 24 (621) (668) Directors’ fees (95) (95) Other expenses 8 (363) (328) Total expenses (10,461) (1,091) Results from operating activities (1,463) 3,538 FINANCE INCOME AND EXPENSES Finance income 9 159 63 Finance costs 9 (617) (954) Net finance expense (458) (891) Profit before income tax (1,921) 2,647 Income tax (expense)/benefit 10 1,059 (697) (Loss)/profit for the period (862) 1,950 Total comprehensive income for the period (862) 1,950
EARNINGS PER SHARE (EPS) EPS based on the weighted average number of ordinary shares (cents per share) Basic and diluted earnings per share for the year 20 (0.63) 1.43
The above Statement of comprehensive income should be read in conjunction with the accompanying notes to the
fi nancial statements set out on pages 35 to 59. For personal use only use personal For
Page 32 FINANCIAL STATEMENTS Statement of changes in equity
Ret. Earn./ For the year ended 30 June 2012 Issued Capital (Accum. Losses) Total $’000 $’000 $’000 At 30 June 2011 73,005 (188) 72,817 TOTAL COMPREHENSIVE INCOME FOR THE PERIOD Profit or loss - (862) (862) Other comprehensive income for the period - - - Total comprehensive income for the period - (862) (862) TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY Dividends paid - (3,414) (3,414) Issue of ordinary shares - - - Total transactions with owners - (3,414) (3,414) Total equity at 30 June 2012 73,005 (4,464) 68,541
Ret. Earn./ For the year ended 30 June 2011 Issued Capital (Accum. Losses) Total $’000 $’000 $’000 Restated total equity at 30 June 2010 73,005 (2,138) 70,867 TOTAL COMPREHENSIVE INCOME FOR THE PERIOD Profit or loss - 1,950 1,950 Other comprehensive income for the period - - - Total comprehensive income for the period - 1,950 1,950 TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY Dividends paid - - - Issue of ordinary shares - - - Total transactions with owners - - - Total equity at 30 June 2011 73,005 (188) 72,817
The above Statement of changes in equity should be read in conjunction with the accompanying notes to the fi nancial
statements set out on pages 35 to 59. For personal use only use personal For
Page 33 ING Private Equity Access Limited FINANCIAL STATEMENTS Statement of cash fl ows
2012 2011 For the year ended 30 June Note $’000 $’000
CASH FLOWS FROM OPERATING ACTIVITIES
Dividends and distributions received 9,233 4,232
Interest received 148 64
Income tax paid (1,022) (182)
Interest paid (619) (924)
Payments to suppliers and directors (1,156) (1,141)
Net cash flows from operating activities 11b 6,584 2,049
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of unlisted private equity investments 1,802 149
Proceeds from capital returned on unlisted private equity investments 11,276 4,968
Calls paid for unlisted private equity investments (4,833) (10,595)
Proceeds from sale of listed private equity investments 9 137
Proceeds of loans to shareholders of co-investments 184 145
Net cash flows from/(used in) investment activities 8,438 (5,196)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings - 5,000
Repayment of borrowings (9,500) (1,500)
Dividends paid (3,414) -
Net cash flows (used in)/from financing activities (12,914) 3,500
Net increase in cash and cash equivalents held 2,108 353
Add opening cash and cash equivalents brought forward 821 468
Cash and cash equivalents at end of the period 11a 2,929 821
The above Statement of cash fl ows should be read in conjunction with the accompanying notes to the fi nancial
statements set out on pages 35 to 59. For personal use only use personal For
Page 34 Notes to the fi nancial statements
1. REPORTING ENTITY policies and reported amounts of assets, liabilities, income and expenses. Actual results may diff er from these ING Private Equity Access Limited (the “Company”) is estimates. Estimates and underlying assumptions are a Company domiciled in Australia. The address of the reviewed on an ongoing basis. Revisions to accounting Company’s registered offi ce is Level 12, 83 Clarence Street estimates are recognised in the period in which the Sydney, NSW 2000. estimate is revised and in any future periods aff ected. The nature of the operations and principal activities of the Information about signifi cant areas of estimation Company are managing long-term investments in private uncertainty and critical judgements in applying accounting equity funds. policies that have the most signifi cant eff ect on the amount recognised in the fi nancial statements are described in the following notes: 2. BASIS OF PREPARATION Note 5: Determination of fair values; (a) Statement of compliance Note 16: Tax assets and liabilities; The fi nancial report is a general purpose fi nancial report that has been prepared in accordance with Australian Note 21: Financial instruments; and Accounting Standards (AASBs) (including Australian Note 22: Capital and other commitments. Interpretations) adopted by the Australian Accounting (e) Overview of changes to accounting policies Standards Board (AASB) and the Corporations Act 2001. The fi nancial report of the Company complies with The Company did not change its accounting policies International Financial Reporting Standards (IFRSs) and during the year ended 30 June 2012. interpretations adopted by the International Accounting Standards Board (IASB). ING Private Equity Access Limited is a for-profi t entity for the purpose of preparing fi nancial 3. SIGNIFICANT ACCOUNTING POLICIES statements. The accounting policies set out below have been applied consistently to all periods presented in these fi nancial The fi nancial statements were authorised for approval by statements. the Board of Directors on 24 August 2012. (a) Foreign currency translations (b) Basis of measurement Transactions in foreign currencies are translated to The fi nancial report has been prepared on a historical cost Australian dollars at the exchange rates at the dates of the basis, except for fi nancial assets held at fair value through transactions. Monetary assets and liabilities denominated profi t or loss and available for sale financial assets that in foreign currencies at reporting date are retranslated have been measured at fair value. The methods used to to Australian dollars at the foreign currency rate at that measure fair values are discussed further in note 5. date with any diff erences between the weighted average cost of foreign currency and the balance at reporting (c) Functional and presentation currency date being taken to profi t or loss. Non-monetary assets These fi nancial statements are presented in Australian and liabilities denominated in foreign currencies that dollars, which is the Company’s functional currency. are measured at fair value are retranslated to Australian The Company is of a kind referred to in ASIC Class Order dollars at the exchange rate at the date that the fair value 98/100 dated 10 July 1998 and in accordance with that was determined. Class Order, all fi nancial information presented in Australian Foreign currency diff erences arising on retranslation are dollars has been rounded to the nearest thousand dollars recognised in profi t or loss, except for diff erences arising ($’000) unless otherwise stated. on the retranslation of available for sale instruments which are recognised directly in equity as part of
For personal use only use personal For (d) Use of estimates and judgements the unrealised gain or loss on unlisted private equity The preparation of fi nancial statements in conformity with investments in the Asset Revaluation Reserve. IFRSs requires management to make judgements, estimates and assumptions that aff ect the application of accounting
Page 35 ING Private Equity Access Limited (b) Non-derivative fi nancial assets Cash and Cash equivalents The Company has the following non-derivative fi nancial Cash and cash equivalents comprise cash balances and assets: fi nancial assets at fair value through profi t or call deposits with original maturities of 3 months or less. loss, available for sale fi nancial assets, cash and cash Receivables equivalents and receivables. Receivables are fi nancial assets with fixed or determinable (i) Recognition and derecognition payments that are not quoted in an active market. Such of non-derivative fi nancial assets assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial The Company initially recognises receivables and deposits recognition, receivables are measured at amortised cost on the date that they are originated. All other fi nancial using the eff ective interest rate method. assets (including assets designated at fair value through profi t or loss) are recognised initially on the trade date at Receivables comprise accrued interest, amounts which the Company becomes a party to the contractual receivable from the tax authorities and distributions provisions of the instrument. receivable from unlisted private equity investments.
The Company derecognises a fi nancial asset when the (c) Non-derivative fi nancial liabilities contractual rights to the cash fl ows from the asset expire, The Company initially recognises loans and borrowings or when it transfers the rights to receive the contractual on the date that they are originated. All other fi nancial cash fl ows on the financial asset in a transaction in which liabilities are recognised initially on the trade date at substantially all the risks and rewards of ownership of the which the Company becomes a party to the contractual fi nancial asset are transferred. Any interest in transferred fi nancial assets that is created or retained by the Company provisions of the instrument. The Company derecognises is recognised as a separate asset or liability. a fi nancial liability when its contractual obligations are discharged or cancelled or expire. If the Company If the Company has the legal right to off set fi nancial has the legal right to off set fi nancial asset and liability asset and liability amounts and intends either to settle amounts and intends either to settle on a net basis or on a net basis or realise the asset and settle the liability realise the asset and settle the liability simultaneously, simultaneously, these amounts are not off set. The gross these amounts are not off set. The gross amounts of these amounts of these off setting assets and liabilities are off setting assets and liabilities are presented separately in presented separately in the Statement of Financial Position. the Statement of Financial Position.
Non-derivative fi nancial instruments are recognised initially The Company has the following non-derivative fi nancial at fair value plus, for instruments not at fair value through liabilities: loans and borrowings and trade and other profi t or loss, any directly attributable transaction costs. payables. Subsequent to initial recognition non-derivative fi nancial instruments are measured as described below. Such fi nancial liabilities are recognised initially at fair value excluding any directly attributable transaction costs. (ii) Non-derivative fi nancial assets Subsequent to initial recognition these fi nancial liabilities The classifi cation and measurement model for fi nancial are measured at amortised cost using the eff ective assets existing on or acquired after 7 December 2009, the interest rate method. date the Company adopted AASB 9, is outlined below. The accounting policy with respect of recognition and (d) Share capital derecognition for these instruments is the same as for Ordinary shares those fi nancial assets disposed of prior to 7 December 2009 (refer to note 3(b)(i) for further information). Ordinary shares are classifi ed as equity. Incremental costs directly attributable to the issue of ordinary shares and
Financial assets at fair value through profi t or loss share options are recognised as a deduction from equity, For personal use only use personal For All investments held by the Company are measured at fair net of any tax eff ects. value through profi t or loss. This includes all listed and unlisted investments.
Page 36 (e) Revenue (g) Income tax Revenue is recognised to the extent that it is probable Income tax expense comprises current and deferred tax. that the economic benefi ts will fl ow to the Company and Current and deferred taxes are recognised in profi t or loss. the revenue can be reliably measured. The following Current tax is the expected tax payable or receivable on specifi c recognition criteria must also be met before the taxable income or loss for the year, using tax rates revenue is recognised: enacted or substantively enacted at the reporting date, (i) Sale of investments and any adjustments to tax payable in respect of previous years. Revenue is recognised when the signifi cant risks and rewards of ownership of the investments have passed Deferred tax is recognised using the balance sheet to the buyer and can be measured reliably. Risks and method, providing for temporary diff erences between rewards from unlisted private equity investments are the carrying amounts of assets and liabilities for fi nancial considered to be passed to the buyer at the date the reporting purposes and the amounts used for taxation sale of the investment is settled, and the amount of the purposes. Deferred tax is measured at the tax rates that proceeds have been advised to the Company by the are expected to be applied to the temporary diff erences investment manager. when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. (ii) Financial assets at fair value through profi t or loss A deferred tax asset is recognised for unused tax losses, The net realised and unrealised movements in the values of tax credits, and deductible temporary diff erences to the the Company’s fi nancial assets at fair value through profi t or extent that it is probable that the future taxable profi ts loss during the year are recognised in profi t or loss. will be available against which the temporary diff erence (iii) Dividends and distributions can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is Distributions from private equity investments are brought no longer probable that the related tax benefi t will be to account when the Company becomes entitled to the realised. distribution and the amount can be measured reliably, which is ordinarily at the time it is received. Unlisted The Company falls below the Taxation of Financial trust distributions are brought to account on a “present Arrangements (“TOFA”) thresholds and therefore TOFA entitlement” basis at which time an adjustment is made to does not apply. The Company has not voluntarily elected the fair value of the trust. to apply TOFA.
(iv) Foreign currency gains and losses (h) Goods and services tax (GST) Foreign currency gains and losses are reported on a net basis. Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred (f) Finance income and fi nance costs is not recoverable from the taxation authority. In these (i) Finance income circumstances, the GST is recognised as part of the cost of Finance income includes interest income on funds acquisition of the asset or as part of the expense. invested. Interest revenue is recognised as it accrues in Receivables, prepayments and payables are stated with profi t or loss using the eff ective interest method. the amount of GST included. The net amount of GST (ii) Finance costs recoverable from, or payable to, the taxation authority is included as a current asset or liability in the balance sheet. Finance costs comprise interest expense on borrowings and fees in association with the Company’s debt fi nance Cash fl ows are included in the Statement of Cash Flows on a facility. Finance costs are recognised as they accrue in gross basis. The GST components of cash fl ows arising from For personal use only use personal For profi t or loss using the eff ective interest method. Where investing and fi nancing activities which are recoverable fees represent a prepayment for a period ending after from, or payable to, the taxation authority shall be classifi ed balance date, a corresponding prepayment has been as operating cash fl ows. recognised in the Statement of Financial Position.
Page 37 ING Private Equity Access Limited (i) Earnings per share (EPS) Management anticipates that all of the relevant The Company presents basic and diluted EPS data for its pronouncements will be adopted in the Company’s ordinary shares. Basic EPS is calculated by dividing the accounting policies for the fi rst period beginning after the profi t or loss attributable to ordinary shareholders of the eff ective date of the pronouncement. Company by the weighted average number of ordinary Information on new standards, amendments and shares outstanding during the period. Diluted EPS is interpretations that are expected to be relevant to the determined by adjusting the profi t or loss attributable to Company’s fi nancial statements is provided below. ordinary shareholders and the weighted average number Certain other new standards and interpretations have of ordinary shares outstanding for the eff ects of all dilutive been issued but are not expected to have a material potential ordinary shares. impact on the Group’s fi nancial statements. (j) Segment reporting AASB 13 Fair Value Measurement (AASB 13) The Company determines and presents operating AASB 13 does not aff ect which items are required to be segments based on the information that is provided fair-valued, but clarifi es the defi nition of fair value and internally to the Managing Director, who is the Company’s provides related guidance and enhanced disclosures chief operating decision maker. The accounting policy in about fair value measurements. It is applicable for respect of segment operating disclosures is presented as annual periods beginning on or after 1 January 2013. The follows: Company’s management have yet to assess the impact of An operating segment is a component of the Company this new standard. that engages in business activities from which it may earn revenues or incur expenses. An operating segment’s operating results are reviewed regularly by the Managing 4. CHANGE IN ACCOUNTING POLICY Director to make decisions about resources to be allocated to the segment and assess its performance, and The Company did not early adopt any standards in the for which discrete fi nancial information is available. current fi nancial year. Segment results that are reported to the Managing The Company did not change any accounting policies Director include items directly attributable to a segment during the current fi nancial year. as well as those that can be allocated on a reasonable basis. Unallocated items comprise: (i) Non-segment revenue (interest received on cash fl oat); 5. DETERMINATION OF FAIR VALUES (ii) Corporate expenses (such as ASX related expenses and A number of the Company’s accounting policies and fees for corporate services such as audit, tax review disclosures require the determination of fair value for its and registry); and fi nancial assets. Fair values have been determined for measurements and /or disclosure purposes based on (iii) Non-segment assets (cash fl oat, income tax assets and the methods outlined below. When applicable, further liabilities, and other receivables). information about the assumptions made in determining fair values is disclosed in the notes specifi c to that asset or (k) Presentation of fi nancial statements liability. The Company applies revised AASB 101: “Presentation of Financial Statements”. As a result, the Company presents (i) Listed private equity investments in the Statement of Changes in Equity all owner changes Listed private equity investments are initially recognised in equity, whereas all non-owner changes in equity are at cost, being the fair value of the consideration given. presented in the Statement of Comprehensive Income. Associated acquisition charges are expensed to the profi t or loss.
(l) New standards and interpretations not For personal use only use personal For yet adopted After initial recognition listed private equity investments At the date of authorisation of these fi nancial statements, are measured at fair value, whereby, values of investments certain new standards, amendments and interpretations that are actively traded in organised fi nancial markets are to existing standards have been published but are not yet determined by reference to Stock Exchange quoted bid eff ective, and have not been adopted early by the Company. prices at the close of business on the balance sheet date.
Page 38 (ii) Investments in unlisted private equity investments Risk management framework Unlisted private equity investments are initially recognised The Board of Directors has overall responsibility for the at cost, being the fair value of the consideration given. establishment and oversight of the risk management Associated acquisition charges are included in the cost. framework. The Board of Directors and the Manager are responsible for developing and monitoring risk For unlisted private equity investments, where there is no management policies. quoted market price, investments are valued according to the diff ering structures of these type of investments Risk management policies are established to identify that the Company owns: private equity trust units are and analyse the risks faced by the Company, to set valued based on a unit price provided by the manager, appropriate risk limits and controls, and to monitor risks while Venture Capital Limited Partnerships (VCLP) and and adherence to limits. The Company and Manager, direct private equity investments are valued using a through their training and management standards and “proportionate” value provided by the partnership or procedures, aim to develop a disciplined and constructive direct investment based on the Company’s share of control environment in which all personnel understand VCLP assets or company assets. The unit prices and their roles and obligations. “proportionate” values are calculated from the proportion Market risk of the total net asset values of the trust, partnership or company which is owned by the Company at balance Market risk is the combined underlying risks of any date. investment by the Company. In relation to the Company, market risk comprises market price risk, foreign currency The value of the net assets of a fund, partnership or risk and interest rate risk. company is based on valuations of the diversifi ed Prior to committing to a private equity investment, the portfolio of investment assets and liabilities within that Board had the opportunity to consider each of these entity, which are calculated by the manager of that entity risks while they reviewed detailed submissions from using valuation techniques that they deem appropriate. the Manager. Each Manager submission was based on Valuation techniques may involve methods such as price/ extensive due diligence with regard to, but not limited to: earnings analysis or discounted cash fl ow techniques. All valuation methods require assumptions to be made, for Management and investment team skills, experience example, the estimation of future cash fl ows, multiples and qualifi cations; which would be paid on earnings in the market or Investment structure, conditions of application discount rates. These assumptions are made by the (including required commitment level) and fees; managers, partnerships and direct investment entities and Past performance and outlook for current investments; are not made by the Company. Alignment of personal interest with investors; and Other investments in the Company’s portfolio. 6. FINANCIAL RISK MANAGEMENT Over the life of the investments, market risk is also Overview considered and mitigated as outlined below. The Company has exposure to the following risks from its (i) Market price risk use of fi nancial instruments: Market price risk is the risk that value of the fi nancial Market risk instrument will fl uctuate as a result of changes in market Liquidity risk prices (other than those arising from interest rate or currency risk), whether caused by factors specifi c to an Credit risk individual investment, its issuer or all factors aff ecting all This note presents information about the Company’s instruments traded in the market.
For personal use only use personal For exposure to each of the above risks, its objectives, policies and processes for measuring and managing risk, and the Market price risk – Listed private equity investments management of capital. Further quantitative disclosures The Company does not have any direct exposure to listed are included throughout this fi nancial report. equity security market price risk at balance date because the Company did not hold any listed equity investments at 30 June 2012 (2011: 1 investment).
Page 39 ING Private Equity Access Limited At balance date, the market value of the Company’s listed (ii) Currency risk investment portfolio was $Nil (2011: $111,551). Foreign currency risk is the risk that the value of a fi nancial Market price risk – unlisted private equity investments instrument will fl uctuate due to changes in exchange The Board considers and manages the market price risk rates. relating to unlisted private equity investments by taking As at 30 June 2012, the Company has several direct into account the following factors: investments denominated in New Zealand dollars (“NZD”). The portfolio of underlying investments is well As a result of these investments, the Company’s balance diversifi ed. The Company’s fund of funds structure sheet and profi t or loss can be aff ected by movements in consists of 16 private equity funds which between the NZD/AUD exchange rates. them have exposure to some 66 individual underlying opportunities located in many diff erent industry Relevant exchange rates and their eff ect on the sectors. Any single underlying exposure does not Company’s fi nancial instruments are monitored by generally put a material amount of the Company’s the Manager, and if deemed appropriate or necessary, capital at risk. Only 1 individual underlying investment the terms of the investment management agreement currently is greater than 5% of the total investments of allow foreign currency hedging to be undertaken using the Company (2011: Nil). derivatives. The Company does not currently hedge its exposure to foreign currency. Due to the long term nature of these investments, short term market price volatility is regarded with less The Company has a foreign currency exposure to capital importance by the Board than the real progress of the commitments made to an overseas private equity fi rm underlying entities which form the basis of the short for amounts which may be called in the future (refer to term price. note 21). The timing and extent of these calls cannot be The valuations of each private equity investment predicted at the date of this report because money is are based on the current value of the underlying called as and when it is required by the foreign investment businesses which they hold. The private equity fund. As at the end of the fi nancial year, the Company managers do not intend to sell these underlying has one capital commitment to a foreign investment businesses until their potential has been realised fund being Direct Capital Partners, with an uncalled and/or utilised. Historically, at any point in time, the commitment of NZD $364,341 (approx. AUD $285,623) aggregate values at which they are held by the private (2011: NZD $791,404 (approx. AUD $610,520)). equity manager and hence the Company, are generally (iii) Interest rate risk lower than the eventual sale prices. Interest rate risk is the risk that the value of a fi nancial The indirect impact of signifi cant listed equity market instrument will fl uctuate due to changes in market interest movements on private equity valuations. rates. The Company’s direct exposure to interest rate risk The major risks in relation to the Company are more is related to its cash holdings and the fi nance facility. The indirect in relation to the private equity investments in so Company’s cash holdings are held on a fl oating interest far as a prolonged drop in market values may lead to lower rate basis, while the fi nance facility is a bill facility and is profi ts (or losses) in the short term. Risks may also include exposed to the interest rate changes on the date that the an underlying investment not being able to reach its full bill matures if it is rolled over for a subsequent period at potential in a timely manner or at all, which would cause that date. a delay or a decrease in the expected cash fl ows to the Company. The likelihood of such an event is considered (iv) Liquidity risk periodically by the Manager and the fi ndings are reviewed Liquidity risk is the risk that the Company will not be by the Board. Consideration procedures include, but able to meet its fi nancial obligations by their due date, are not limited to, the review of regular reports from the due to a lack of cash accessible by the Company. The For personal use only use personal For managers, direct correspondence with the manager, and Company’s approach to managing liquidity is to ensure, as information provided with monthly unit price advices far as possible, that it will always have suffi cient liquidity which explain any price movement of the fund, partnership to meet its liabilities when due, under both normal and or investment. stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
Page 40 The Company’s liquidity primarily comprises cash at bank the Company assesses its capacity to meet its obligations and a fi nance facility. The fi nance facility is available for a from the various sources of cash available to it. These may total of $12 million (2011: $20 million), of which $nil has include: been drawn down at balance date (2011: $9.5 million). cash on hand; The Company’s liquidity requirements include the distributions and returns received from its investments; Company’s day to day running costs and expenditures such as the amounts payable to its trade creditors and the prudent levels of borrowings utilising the cash advance amounts to which the Company is committed to pay to its facility disclosed in note 18; unlisted private equity investments which are paid on a the sale of its private equity investments on the “drawdown” basis. secondary market; and The Company’s day to day running costs and expenditures capital raised via placements or rights issues. are quantitatively immaterial in relation to the Company’s To further reduce liquidity risk, the Board has resolved to overall commitments. The timeframes within which they use its future cash profi ts to help fund existing portfolio will be drawn are known to be less than 12 months. commitments in priority to paying dividends or returning The Company’s unpaid private equity commitments are capital if they consider that the Company’s cash reserves material (refer notes 21 and 22), and as such, the Manager are below its estimated forecasted cash requirements. and the Board devote considerable time to ensuring that (v) Credit risk the Company will be able to meet its current investment obligations. As a result of this, the Board has resolved Credit risk is the risk of financial loss to the Company if to permanently cease future commitments to private a counterparty to a financial instrument fails to meet its equity funds and allow the investments currently held contractual obligations, and arises principally from the by the Company to “run-off ” because they feel that this is potential default of the counter party, with a maximum the most prudent course of action from a cash fl ow and exposure equal to the carrying amount of these liquidity risk perspective and ultimately, to deliver value instruments. back to shareholders. The Company trades only with reputable, creditworthy In time and dollar terms, there is no schedule or timeframe third parties, and as such collateral is not requested nor on which to forecast the private equity drawdowns. Calls is it the Company’s policy to securitise its receivables. can be made at any time over approximately 6 years from The Company does not have any material credit risk to balance sheet date but are not due until approximately 10 any single debtor or group of debtors. days after they are called. All amounts are receivable in Australian Dollars and are There is a “maximum” commitment payable which will not past due or considered impaired. be the total that is paid for the private equity investment over the life of the investment, and if the private equity (vi) Capital management investment is a fund or trust, there is an end date for The Board’s objective is to maintain a strong capital base drawing of commitments which corresponds to the so as to maintain investor, creditor and market confi dence documentation governing the investment. Venture and to sustain future capital requirements of the business. capital limited partnerships and unlisted companies have The Board of Directors aims to maintain capital at a no such end date, but do have an estimated end date point that ensures that the Company continues as a advised at the time of application. All of these dates are going concern whilst maintaining optimal returns to subject to change under certain conditions, and therefore shareholders. indicative only. The Board does not currently have any plans to issue Despite these limitations of information, the Manager further shares on the market. utilises a cash forecast using the latest drawdown
For personal use only use personal For information and trends gathered from all of the Manager’s The Company is not subject to externally imposed capital private equity investments, which are then reviewed and requirements. considered by the Board utilising its experience in the private equity domain. Based on this uncertain forecast
Page 41 ING Private Equity Access Limited 7. OPERATING SEGMENTS The Company has one operating segment: Investments in Private Equity. For this segment, the Managing Director reviews internal management reports in relation to the Company’s private equity investments on at least a monthly basis. Information regarding the results of the Company’s reportable segment is included below. Performance is measured based on segment profi t before income tax as included in the internal management reports that are reviewed by the Company’s Managing Director. Comparative segment information has been represented in conformity with the requirement of AASB 8: “Operating Segments”.
Reportable segment information Private Equity Investment Segment
In thousands of AUD 2012 2011 External revenues 8,998 4,629 Interest expense (216) (474) Reportable segment (loss)/profit before income tax (1,695) 2,873 Reportable segment assets 61,452 79,497 Reportable segment liabilities - (9,569)
Reconciliation of reportable segment revenues, profi t or loss, assets and liabilities and other material items In thousands of AUD 2012 2011 REVENUES Total revenue for reportable segment 8,998 4,629
Total revenue 8,998 4,629
PROFIT OR LOSS Total profit or loss for reportable segment (1,695) 2,873 Unallocated amounts: Other corporate expenses (226) (226)
Profit before income tax (1,921) 2,647
ASSETS Total assets for reportable segment 61,452 79,497 Other assets 7,885 3,379
Total assets 69,337 82,876
LIABILITIES
Total liabilities for reportable segment - 9,569 For personal use only use personal For Other liabilities 796 490
Total liabilities 796 10,059
Page 42 Geographical segments The Company’s investments are domiciled in Australia and New Zealand (2011: Australia and New Zealand).
In presenting information on the basis of geographical segments, segment revenue and assets are based on the geographical location of investments.
Geographical information In thousands of AUD 2012 2011 REVENUES Australia 8,761 3,051 Other countries 237 1,578 Total revenue 8,998 4,629 NON-CURRENT ASSETS Australia 59,235 75,081 Other countries 2,167 4,021 Total non-current assets 61,402 79,102
8. OTHER EXPENSES
In thousands of AUD 2012 2011 Audit fees 65 73 Co-investment management fees 137 102 Registry fees 42 30 Sundry expenses 119 123 Total other expenses 363 328
9. FINANCE INCOME AND FINANCE COSTS
In thousands of AUD 2012 2011
Interest received 159 63
Total finance income 159 63
Facility fees in relation to debt financing facility (401) (480)
Interest expense on debt financing facility (216) (474) For personal use only use personal For Total finance expenses (617) (954)
Net finance costs recognised in profit or loss (458) (891)
Page 43 ING Private Equity Access Limited 10. INCOME TAX EXPENSE
In thousands of AUD 2012 2011
CURRENT TAX EXPENSE
Current period 740 316
Adjustment for prior periods 750 52
DEFERRED TAX BENEFIT
Origination and reversal of temporary differences (2,549) 329
Total income tax expense (1,059) 697
RECONCILIATION BETWEEN TAX EXPENSE AND PRE-TAX ACCOUNTING PROFIT
(Loss)/profit for the period (862) 1,950
Total income tax (benefit)/expense (1,059) 697
(Loss)/profit excluding income tax (1,921) 2,647
Income tax using the Company’s tax rate of 30% (2011: 30%) (576) 794
Permanent and temporary differences in relation to deferred and current income and expenditure (710) (120)
Gross up of income due to franking credits received 208 -
Franking credit rebate (693) -
Net effect on Australian income of foreign income received and foreign taxes paid (38) (29)
Under provision in prior years 750 52
Income tax (benefit)/expense reported in profit or loss (1,059) 697
For personal use only use personal For
Page 44 11A. CASH AND CASH EQUIVALENTS
In thousands of AUD 2012 2011
Bank balances 2,929 821
Cash and cash equivalents in the Statement of cash flows 2,929 821
The Company’s exposure to interest rate risk and a sensitivity analysis for fi nancial assets and liabilities are disclosed in note 21.
11B. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
In thousands of AUD 2012 2011
(Loss)/profit for the period (862) 1,950
ADJUSTMENTS FOR:
Change in fair value of investments classified as fair value through profit or loss 9,377 (325)
(Gain)/loss of foreign exchange on shareholder loans (5) 20
Operating profit before changes in working capital 8,510 1,645
CHANGES IN WORKING CAPITAL
Decrease/(increase) in dividends receivable 234 (90)
Increase in interest receivable (11) -
Increase in other receivables (2) (1)
Decrease/(increase) in non-equity prepaid expenses 124 (25)
(Increase)/decrease in deferred tax assets (2,508) 371
Decrease in payables (122) (23)
(Decrease)/increase in interest payable (69) 29
Increase in tax provision 425 143
Increase in deferred income tax liability 3 -
Net cash from operating activities 6,584 2,049
For personal use only use personal For
Page 45 ING Private Equity Access Limited 12. RECEIVABLES
In thousands of AUD 2012 2011
Dividends/distributions receivable 50 284
Interest receivable 15 4
Other receivables 15 13
Total trade and other receivables 80 301
The Company’s exposure to credit, currency and interest rate risks related to trade and other receivables is disclosed in note 21.
13. PREPAYMENTS
In thousands of AUD 2012 2011
Prepaid finance facility fees 33 100
Prepaid insurance expenses 15 72
Total prepayments 48 172
The Company does not have an exposure to credit, currency or interest rate risks in relation to its prepayments.
14. LISTED PRIVATE EQUITY INVESTMENTS
In thousands of AUD 2012 2011
CURRENT INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS
Listed private equity investments - 111
Total listed private equity investments - 111
The Company’s exposure to market and credit risks related to listed private equity investments is disclosed in note 21.
For personal use only use personal For
Page 46 15. UNLISTED PRIVATE EQUITY INVESTMENTS
In thousands of AUD 2012 2011 NON-CURRENT INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS Unlisted private equity investments 61,402 79,102 Total unlisted private equity investments 61,402 79,102 The Company’s exposure to market and currency risks related to unlisted private equity investments is disclosed in note 21.
16. TAX ASSETS AND LIABILITIES Recognised deferred tax assets and liabilities Balance Sheet Income Statement
In thousands of AUD 2012 2011 2012 2011 DEFERRED INCOME TAX ASSETS Accrued expenses 23 41 (18) (3) Revaluations of listed private equity investments - 274 (274) (67) Revaluations of unlisted private equity investments 4,779 1,936 2,843 (258) Share issue expenses taken to equity which are deductible in the future 76 118 (42) (43) Gross deferred income tax assets 4,878 2,369 DEFERRED INCOME TAX LIABILITIES Accrued interest (5) (1) 4 (1) Exchange gains or losses on foreign cash - (1) 1 (1) Gross deferred income tax liabilities (5) (2)
Deferred tax expense 2,514 (373) For personal use only use personal For
Page 47 ING Private Equity Access Limited Deferred tax assets The deferred tax asset balance of $4.878 million is recognised on the Statement of Financial Position of the Company as at 30 June 2012 (2011: $2.369 million). The total balance is due to the current fair value of the fi nancial investments in private equity investments funds being below cost value. It is probable that the deferred tax asset is recoverable as it is the Company’s expectation that either the fair value of the investments will revert to being above their cost value in the future or an overall capital gain will be realised on fi nal sale of the private equity investments.
Current tax liabilities
In thousands of AUD 2012 2011 Opening balance 234 91 Charged to income 740 316 Adjustment in respect of prior years 750 52 Payments of tax during the year (1,022) (182) Equity related deductions (43) (43) Total current tax liability 659 234
17. PAYABLES
In thousands of AUD 2012 2011 Related party payables (refer note 24) 50 183 Trade and other payables 82 71 Total payables 132 254
The Company’s exposure to liquidity risk related to trade and other payables is disclosed in note 21.
18. LOANS AND BORROWINGS
In thousands of AUD 2012 2011
Bank loan – principle - 9,500
Bank loan – accrued interest - 69
Total loans and borrowings - 9,569 For personal use only use personal For
Page 48 Debt fi nance facility The current fi nance facility is a $12 million (2011: $20 million), 2 year fi nance facility in place to July 2014. The debt finance facility has been in place since 14 July 2009, was due to expire in July 2012, but was amended and extended on 31 May 2012. The fi nance facility is an Australian dollar fl oating rate facility where the Company is able to determine the drawdown and/ or rollover period which may be for a period of 90 or 180 days with interest reset on each drawdown or rollover amount. The Company has not breached any of its covenants relating to this debt fi nance facility. The debt fi nance facility agreement contains a negative pledge, preventing the Company from entering into more debt agreements in the future which would jeopardise the bank’s current priority claim on the Company’s assets. The facility has a carrying amount of $Nil (2011: $9.569 million).
19. CAPITAL AND RESERVES Share Capital
In thousands of AUD 2012 2011
Ordinary shares
Issued and fully paid 73,005 73,005
Shares
In thousands 2012 2011
On issue at the beginning of the year 136,571 136,571
Issued during the year - -
Total shares on issue 136,571 136,571
Issuance of ordinary shares There were no shares issued during the year. (2011: Nil) During the year, no shares were issued as a result of exercising of options (2011: Nil).
Ordinary shares The Company does not have authorised capital or par value in respect of its issued shares. All issued shares are fully paid. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company’s residual assets.
There are currently no share options on issue. For personal use only use personal For
Page 49 ING Private Equity Access Limited Dividends The following dividends were declared and paid by the Company:
Cents per share Total amount ($‘000) Payment date
Interim 2012 2.50 3,414 28 June 2012
There were no dividends declared in the previous fi nancial year.
The Company’s dividend reinvestment plan has been suspended.
No dividends have been declared since the end of the fi nancial year.
Dividend franking account
In thousands of AUD 2012 2011 30% franking credits available to shareholders of the Company for subsequent financial years Balance at the end of the reporting period 3,310 3,201 Franking credits that will arise from the payment of the amount of provision for income tax 659 234 3,969 3,435
The ability to utilise franking credits is dependent upon there being suffi cient available profi ts and liquidity to declare dividends.
Listed investment company (LIC) capital gain account
In thousands of AUD 2012 2011
Opening balance of the LIC capital gain account 11,614 11,614
Impact on the LIC capital gain account of the dividend paid during the year (3,414) -
8,200 11,614
This equates to an attributable amount of 11,714 16,591
LIC Capital gains available for distribution are dependent upon the disposal of investment portfolio holdings which
qualify for LIC capital gains and the receipt of LIC distributions from VCLP securities held in the investment portfolio. For personal use only use personal For
Page 50 20. EARNINGS PER SHARE Basic earnings per share The calculation of basic earnings per share at 30 June 2012 was based on the loss attributable to ordinary shareholders of $862,111 (2011: profi t of $1,950,074) and a weighted average number of ordinary shares outstanding of 136.571 million shares (2011: 136.571 million), calculated as follows:
In thousands of AUD 2012 2011
(Loss)/profit attributable to ordinary shareholders (862) 1,950
Shares In thousands Note 2012 2011 Issued ordinary shares at 1 July 19 136,571 136,571 Effect of shares issued in rights issue - - Weighted average number of ordinary shares at 30 June 136,571 136,571
Diluted earnings per share During the year, there were no dilutive potential ordinary shares on issue; therefore there is no diff erence between basic earnings per share and diluted earnings per share (2011: No diff erence).
21. FINANCIAL INSTRUMENTS Market price risk Exposure to market price risk
The carrying amount of the Company’s fi nancial assets represents the maximum risk exposure. The Company’s maximum exposure to market price risk was $Nil (2011: $111,551) for listed private equity investments and $61,057,743 (2011: $79,101,711) for unlisted private equity investments.
Sensitivity to market price risk
A 10% movement in the value of the Company’s investments would have increased/ (decreased) equity and profi t or loss after tax by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2011.
Equity Equity Profit or loss Profit or loss In thousands of AUD 2012 2011 2012 2011
Private equity investments +10% 4,298 5,545 4,298 5,545
Private equity investments -10% (4,298) (5,545) (4,298) (5,545) For personal use only use personal For
Page 51 ING Private Equity Access Limited Interest rate risk Exposure to interest rate risk
At the reporting date the interest rate profi le of the Company’s interest bearing fi nancial instruments was:
In thousands of AUD 2012 2011 VARIABLE RATE INSTRUMENTS Financial assets 2,929 821 Financial liabilities - 9,569
Sensitivity to interest rate risk for fi xed rate and variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profi t or loss after tax by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis was performed on the same basis for 2011. Equity Equity Profit or loss Profit or loss In thousands of AUD 2012 2011 2012 2011 Financial assets +100bps 21 6 29 8 Financial assets – 100bps (21) (6) (29) (8) Financial liabilities +100bps - (67) - (96) Financial liabilities – 100bps - 67 - 96
Liquidity risk The following are the contractual maturities of fi nancial liabilities, including estimated interest payments.
Carrying 1 month 1 month to In thousands of AUD On call Amount or less 12 months 30 JUNE 2012 Trade and other payables 132 132 - - Private equity commitments 17,788 - - 17,788 Loans and borrowings - - - -
Carrying 1 month 1 month to In thousands of AUD On call Amount or less 12 months
30 JUNE 2011
Trade and other payables 254 254 - -
Private equity commitments 23,644 - - 23,644
For personal use only use personal For Loans and borrowings 9,569 - 9,569 -
Private equity commitments may be called at any time in the future, but are not due until approximately 10 days after they are called. Calls can be made at any time over approximately 6 years from balance sheet date.
Page 52 Details of private equity commitments held by the Company at balance date are as follows:.
In thousands of AUD Undrawn Approximate end Commitment Drawn capital capital date of fund Fund name
Archer Capital Fund 3 7,143 6,505 638 Aug-14
Archer Capital Fund 4 10,000 8,900 1,100 Mar-17
Catalyst Buyout Fund 1 8,000 8,000 - Sep-16
CM Capital Venture Trust No 4 8,000 6,880 1,120 May-17
Direct Capital Partners III ($A equiv.)* 6,929 6,643 286 Sep-15
Hastings Private Equity Fund 2 8,000 7,886 114 Nov-14
Ironbridge Capital 2003/4 Fund 5,023 4,828 195 Feb-14
NBC Private Equity Fund II 6,000 6,000 - Jun-15
NBC Private Equity Fund III 10,000 5,844 4,156 Nov-17
Pacific Equity Partners III 7,867 7,472 395 Dec-15
Pacific Equity Partners IV 9,267 5,385 3,882 Dec-17
Propel Private Equity Fund II 3,412 3,390 22 Jun-15
Quadrant Private Equity Fund No.1 8,000 7,728 272 Nov-15
Quadrant Private Equity Fund No.2 10,000 8,690 1,310 Apr-17
Wolseley Partners Fund I 8,000 7,985 15 Apr-15
Wolseley Partners Fund II 10,000 5,717 4,283 Jun-18
125,641 107,853 17,788
Currency risk Exposure to currency risk
The Company’s exposure to foreign currency risk at balance date was as follows, based on notional amounts:
In thousands NZD 2012 NZD 2011
Unlisted private equity investments 2,167 4,021
Foreign cash 53 43
Total balance sheet exposure 2,220 4,064
Exchange rates
The following exchange rates applied at year end: For personal use only use personal For 2012 2011
NZD 1.27560 1.29628
Page 53 ING Private Equity Access Limited Sensitivity to currency risk
A change of 10% in the Australian dollar against the New Zealand dollar at the reporting date would have increased (decreased) equity and profi t or loss by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2011.
Equity Equity Profit or loss Profit or loss In thousands of AUD 2012 2011 2012 2011
NZD +10% 111 200 111 200
NZD – 10% (135) (244) (135) (244)
Credit risk Exposure to credit risk
The carrying amount of the Company’s cash and receivables represents the maximum credit risk exposure. The Company’s maximum exposure to credit risk was $3,008,840 (2011: $1,118,508) being $2,928,863 in relation to cash and cash equivalents (2011: $821,034) and $79,977 in relation to receivables (2011: $300,417).
None of the Company’s receivables are past due (2011: Nil) or considered impaired. All receivables are due within 30 days.
The Company does not have any material credit risk to any single debtor or group of debtors.
Fair values versus carrying amounts The carrying values of fi nancial assets and liabilities approximate their fair value.
The basis for determining fair values is disclosed in note 5.
Fair value hierarchy The table below analyses fi nancial instruments carried at fair value, by valuation method. The diff erent levels have been defi ned as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
In thousands of AUD Level 1 Level 2 Level 3 Total
30 JUNE 2012
Financial assets designated as fair value through profit or loss - - 61,402 61,402
- - 61,402 61,402
In thousands of AUD Level 1 Level 2 Level 3 Total
30 JUNE 2011
For personal use only use personal For Financial assets designated as fair value through profit or loss 111 - 79,102 79,213
111 - 79,102 79,213
During the fi nancial year, there have been no transfers between levels 1, 2 or 3 (2011: Nil).
Page 54 Reconciliation of Level 3 balances in the fair value hierarchy In thousands of AUD 2012 2011
Beginning balance 79,102 73,326
Unrealised gains for the period recognised in the profit or loss (9,274) 461
Purchases and calls paid for unlisted private equity investments 4,833 10,595
Sales of unlisted private equity investments (1,802) (149)
Capital returns from unlisted private equity investments (11,276) (4,968)
Proceeds received from repayment of investment loans (184) (145)
Foreign exchange loss on settlement of investment loans 3 (18)
Ending balance 61,402 79,102
Sensitivity analysis The valuation inputs for the level 3 fi nancial assets vary depending on the corporate structure of the investment. Although the Company is primarily a fund of fund structure, it also invests through other “non-fund” entities. The Company’s investments therefore need to be valued diff erently according to the diff ering legal structures of its investments:
Investments in private equity trusts are valued by multiplying a unit price provided by the investment manager by the number of units the Company holds in the trust; Venture Capital Limited Partnerships (VCLP) are valued using a value of the VCLP assets provided by the investment manager of the partnership proportioned by the Company’s share of VCLP assets under the partnership agreement; and Direct private equity investments are valued using a value of the direct investment provided by the investment manager of the investment, proportioned by the share of equity in the investment which the Company holds.
The valuation inputs of the Company’s investments are therefore twofold:
1. The proportion of a trust, VCLP or direct investment which the Company holds; and
2. The unit price of a trust or the underlying value of a VCLP or direct investment.
The proportion of an investment which the Company holds is primarily fi xed under the terms of the governing document of the investment (relevant trust deed, partnership agreement, bare trustee agreement, unit trust agreement or management agreement). Therefore, the only reasonable change in a valuation input that could occur, and hence the Company’s sensitivity to changes in valuation inputs, is a change in the unit price of a trust or the underlying value of a VCLP or direct investment (i.e. the market price risk).
The Company’s sensitivity to market price risk is set out above in the fi rst table of this note. For personal use only use personal For
Page 55 ING Private Equity Access Limited 22. CAPITAL AND OTHER COMMITMENTS
In thousands of AUD 2012 2011
Private equity commitments contracted but not provided for 17,788 23,644
These commitments refl ect the capital commitment in respect of future investments in current private equity investments held. Due to the inherent nature of this type of investment, the timeframe of these commitments cannot be accurately predicted because capital can be called by investment managers at any time, however it is unlikely that the Company would be required to pay the entire outstanding commitment at one time. This is supported by historical trends.
Estimated forecasted cash fl ow projections are provided below by the Company. These projections are a broad estimate and are not able to be relied upon. They have been made by the Manager based on information from various sources, such as
discussions with private equity managers; historical trends in the industry; the current economic environment; and reports obtained by the Manager from industry data aggregators, private equity managers and other economic sources. Although these projections are used by the Board for discussion, they are not relied upon, and as such the Board aims to achieve suffi cient liquidity to meet its liabilities when due, under both normal and stressed conditions.
Future capital payments are forecasted to take place within the following timeframes:
Private equity commitments contracted but not provided for In thousands of AUD 2012 2011
Within 1 year 9,898 8,688
Between 1 year and 5 years 5,130 11,780
Later than 5 years 2,760 3,176
17,788 23,644
Generally, drawdowns by a specifi c fund are substantially made over the 5 year period from fi rst commitment to a fund. Consequently, it has been typical, particularly amongst later stage private equity funds, which form the bulk of the portfolio, for there to be realisations and consequential distributions from underlying funds before all drawdowns by these funds need to be met. This creates signifi cant internal cash generation to meet outstanding commitments. It is also common for a private equity fund to terminate without having drawn down the full commitment, further reducing the actual commitment to be met.
Due to the unpredictable amounts and rate of drawdown on the Company’s existing commitments and the ability of the Company to meet its drawdown requests should they increase at a rapid rate and in size of value, there would be uncertainty about the Company’s ability to meet its commitments in all circumstances. Furthermore, the Company is reliant on the support of its lender through its debt fi nance facility of $12 million (refer to note 18) and may be reliant on
an extension of that facility, or a replacement facility, in the future. For personal use only use personal For
Page 56 The Directors expect the Company to fi nance the future drawdown of its outstanding commitments, if required, by one or a combination of the following options:
Utilisation of cash on hand; Utilising the current debt fi nance facility of the Company; Distributions expected to be received by the Company as a result of realisations of assets by private equity investments; Disposal of some private equity commitments in order to reduce demands on capital and generate cash; and Capital raised through a share placement or rights issue.
23. CONTINGENCIES Contingent assets As at the date of this report, the Company does not have any contingent assets (2011: nil).
Contingent liabilities As at the date of this report, the Company does not have any contingent liabilities (2011: nil).
24. RELATED PARTIES Key management personnel compensation Other than the Directors, there were no key management personnel during the year.
Individual Directors’ compensation disclosures Information regarding individual Directors’ and executives’ compensation and some equity instruments disclosures as required by Corporations Regulation 2M.3.03 is provided in the remuneration report section of the Directors’ report.
Apart from the details disclosed in this note, no Director has entered into a material contract with the Company since the end of the previous fi nancial year and there were no material contracts involving Directors’ interests existing at year end.
Key management personnel and Director transactions Mr Schahinger holds a position in the Manager, Pomona Australia Pty Limited, which results in him having control or signifi cant infl uence over the fi nancial or operating policies of that entity.
Pomona Australia Pty Limited transacted with the Company in the reporting period as a result of its position as Manager of the Company during the year. The terms and conditions of the transactions with Pomona Australia Pty Limited were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-Director related entities on an arm’s length basis.
Prior to 1 July 2011, ING Investment Management Limited (“INGIM”) performed the role of Manager of the Company. INGIM was entitled to the same fees under the same terms and conditions as the current Manager and a retired Director, James Wright, held a position in INGIM which resulted in him having control or signifi cant infl uence over the fi nancial or
operating policies of that entity. For personal use only use personal For
Page 57 ING Private Equity Access Limited The aggregate value of transactions and outstanding balances relating to Pomona Australia Pty Limited and INGIM were as follows: Transaction value year ended Balance outstanding In thousands of AUD 30 June as at 30 June Key Management Person Transaction Note 2012 2011 2012 2011 Mr J Schahinger Management Fees (i) 621 - 50 - Mr J Wright Management Fees (i) - 668 - 183 621 668 50 183
(i) Management Fee In consideration for the services provided under the Management Agreement, the Manager is entitled to a Management Fee which is calculated on the last business day of each month and paid no less frequently than quarterly. The management fee is charged at the rate of 0.85% per annum of the gross asset value of the portfolio. (ii) Performance Fee Under the terms of the Management Agreement, the Manager will be entitled to a Performance Fee calculated annually over three year rolling periods from the end of the month in which the Company was admitted to the ASX’s Offi cial List (30 November 2004). The fee payable is equal to 10% of any out-performance of the Portfolio over a benchmark which is the greater of: (a) the total return of the S&P/ASX 300 Accumulation Index over the calculation period plus 3% per annum; and (b) 25% over the calculation period. As at 30 June 2012, no Performance Fee has been paid or become payable to the Manager (2011: $nil). Purchases from related parties are made in arms length transactions at both normal market prices and normal commercial terms. Outstanding balances at year-end are unsecured and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables.
Movements in shares The movement during the reporting period in the number of ordinary shares in the Company held directly, indirectly or benefi cially, by each key management person, including their related parties is as follows:
Director 1 July 2011 Purchases Sales 30 June 2012
Geoff Brunsdon 1,183,242 - - 1,183,242
Jon Schahinger 1,000,000 - - 1,000,000
Don Stammer 540,000 100,000 - 640,000
Director 1 July 2010 Purchases Sales 30 June 2011
Geoff Brunsdon 1,065,624 117,618 - 1,183,242 For personal use only use personal For Jon Schahinger 974,941 25,059 - 1,000,000 Don Stammer 490,000 50,000 - 540,000 James Wright - - - -
Page 58 No shares were granted to key management personnel during the reporting period as compensation in 2011 or 2012.
Other related parties Contributions to superannuation funds on behalf of Directors are disclosed in the remuneration report.
1,183,242 shares are held by Jesena Pty Limited at balance date. Geoff Brunsdon is a Director of Jesena Pty Limited and has the power to infl uence the voting rights and disposal of its equity holdings.
900,000 shares are held by Schank Superannuation Fund at balance date. Jon Schahinger is a joint trustee of the superannuation fund, and has the power to infl uence the voting rights and disposal of its equity holdings.
640,000 shares are held by Meroma Pty Limited at balance date. Don Stammer is a Director of Meroma Pty Limited, and has the power to infl uence the voting rights and disposal of its equity holdings.
25. SUBSEQUENT EVENTS Since 30 June 2012, there have been no other matters or circumstances not otherwise dealt with in the fi nancial report that have signifi cantly aff ected or may signifi cantly aff ect the Company.
26. AUDITORS’ REMUNERATION In AUD 2012 2011 AUDIT AND REVIEW OF FINANCIAL STATEMENTS Auditors of the Company Audit and review of financial reports (current year) – Grant Thornton 59,000 - Audit and review of financial reports (prior year) – KPMG Australia - 66,000 Remuneration for audit and review of financial statements 59,000 66,000 OTHER SERVICES Auditors of the Company Taxation services (current year) – Grant Thornton 7,500 -
Taxation services (prior year) – KPMG Australia - 8,500
Total other service remuneration 7,500 8,500
Total auditor’s remuneration 66,500 74,500 For personal use only use personal For
Page 59 ING Private Equity Access Limited Directors’ Declaration
1. In the opinion of the Directors of ING Private Equity Access Limited (the Company):
(a) the fi nancial statements and notes that are set out on pages 31 to 59, and the Remuneration report in the Directors’ report, set out on page 22, are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Company’s fi nancial position as at 30 June 2012 and of its performance for the fi nancial year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001;
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
2. The Directors have been given the declarations required by section 295A of the Corporations Act 2001 from the chief executive offi cer and the chief fi nancial offi cer for the year ended 30 June 2012.
3. The Directors draw attention to note 2(a) of the fi nancial statements, which includes a statement of compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of the Directors:
Geoff Brunsdon Chairman
Sydney 24 August 2012
For personal use only use personal For
Page 60
Independent Audit Report For personal use only use personal For
Page 61 ING Private Equity Access Limited For personal use only use personal For
Page 62
Additional ASX Disclosures
Additional information required by the ASX Ltd listing rules and not disclosed elsewhere in this report is set out below. Unless otherwise stated, the information below is current as at 8 August 2012.
SHAREHOLDINGS Substantial Shareholders The number of shares held by substantial shareholders and their associates are set out below: Shareholder Number Quay Fund Nominees Pty Limited ATF Quay Australia 4 Fund 34,369,189 OnePath Life Limited 18,944,714 Select Asset Management Limited 18,881,568
Securities exchange The Company is listed on the Australian Securities Exchange. The home exchange is Sydney.
Other information ING Private Equity Access Limited, incorporated and domiciled in Australia, is a publicly listed Company limited by shares.
Twenty largest security holders The names of the twenty largest holders of quoted securities are: Number of ordinary Capital held Name shares held (%) 1 Quay Fund Nominees Pty Limited 34,369,189 25.17% 2 J P Morgan Nominees Australia Limited 18,944,714 13.87% 3 BNP Paribas Nominees Pty Limited (Master Custody DRP A/c) 14,239,722 10.43% 4 BNP Paribas Nominees Pty Limited (DRP A/c) 4,856,762 3.56% 5 Mr Kenneth John Butterfield 3,150,000 2.31% 6 Mr Victor John Plummer 3,000,000 2.20% 7 Mr Simon Robert Evans & Mrs Kathryn Margaret Evans 1,866,861 1.37% 8 McNeil Nominees Pty Limited 1,500,000 1.10% 9 RBC Dexia Investor Services Australia Nominees Pty Limited 1,439,006 1.05% 10 UBS Wealth Management Australia Nominees Pty Ltd 1,301,727 0.95% 11 Jesena Pty Ltd 1,183,242 0.87% 12 Mr Jon Douglas Schahinger & Dr Elizabeth Mary Frank 900,000 0.66%
13 Mr David Graham Clark 700,000 0.51% 14 Mrs Glenda Claire Orgill 680,000 0.50% 15 Wilclaire Investments Pty Ltd 650,000 0.48%
For personal use only use personal For 16 Meroma Pty Limited 640,000 0.47% 17 Oblique Pty Limited 600,000 0.44% 18 Mr Mark Hamish Lochtenberg & Mrs Fiona Lochtenberg 595,000 0.44% 19 Mr Gregory Hugh Halliday & Mr Simon Robert Evans & Mr Thomas Vernon Furner 570,226 0.42% 20 Mr Willem Bartus Josef Slot & Mrs Hanna Slot 559,355 0.41% 91,745,804 67.18%
Page 63 ING Private Equity Access Limited
VOTING RIGHTS Ordinary shares Refer note 19 in the fi nancial statements.
Distribution of equity security holders
Number of equity Category Number of shares security holders 1-1,000 75 28,377 1,001-5,000 587 1,911,427 5,001-10,000 417 3,239,446 10,001-100,000 804 24,075,325 100,001 and over 96 107,316,627 1,979 136,571,202 The number of shareholders holding less than a marketable parcel of securities is: 93 51,616
INVESTMENT Brokerage and Investment Transactions During the year, the Company paid approximately $106 (2011: $25) in brokerage costs relating to 14 (2011: 30) investment transactions.
Management Agreement ING Private Equity Access Limited has appointed Pomona Australia Pty Limited as the Manager of the Company with eff ect from 1 July 2011. Prior to that date ING Investment Management Limited acted as the Manager of the Company.
The Company has appointed the Manager to:
1. invest and manage the Portfolio in accordance with the terms of the Agreement; and
2. perform various administration services, specifi cally:
preparing fi nancial statements required to be issued by the Company;
assisting the Company to carry out company secretarial functions, including arranging meetings of shareholders of the Company and liaising with the Company’s share registry;
assistance in preparing communications to shareholders of the Company;
assistance in preparing income tax returns and maintaining tax related records for the Company; and
arranging the establishment and maintenance of a website for the Company. In consideration of the services provided under the Agreement, the Manager was entitled to a Management Fee of 0.070833% of the value of the Portfolio calculated on the last business day of each month (being a fee of 0.85% per
annum of the value of the Portfolio), and paid no less frequently than quarterly. For personal use only use personal For Management fees paid or accrued during the reporting year were $621,391 (2011: $667,546).
Page 64 Investment Portfolio The investments held by ING Private Equity Access Limited at balance date are:
Distribution of equity security holders
Unlisted private equity investments Archer Capital Fund 3 Pacific Equity Partners Fund III Archer Capital Fund 4 Pacific Equity Partners Fund IV Catalyst Buyout Fund No. 1 Propel Private Equity Fund II CM Capital Venture Trust No. 4 Quadrant Private Equity Fund No. 1 Hastings Private Equity Fund II Quadrant Private Equity Fund No. 2 Ironbridge Capital 2003/4 Fund Wolseley Partners Fund I NBC Private Equity Fund II Wolseley Partners Fund II NBC Private Equity Fund III
Unlisted co-investments New Zealand King Salmon Limited Rodd & Gunn Limited NZP Holdings Limited Shears & Mac Limited Stratex Group Limited Fishpond Limited Next Capital Health Group Co-investment Trust
For personal use only use personal For
Page 65 ING Private Equity Access Limited Directory
ING Private Equity Access Limited Registrar ABN 48 107 843 381 Link Market Services Limited Level 12, 680 George Street Directors Sydney NSW 2000, Australia Geoff Brunsdon (Independent, Non-Executive T: 1800 891 098 (Australian investors) Director and Chairman) T: 0800 507 120 (New Zealand investors) Jon Schahinger (Managing Director) Auditor Don Stammer (Independent and Grant Thornton Non-Executive Director) Level 17, 383 Kent Street Sydney NSW 2000 Company Secretary Australia Sam Jackson Stock Exchange Listing Registered Offi ce of the Company Offi cial list of the Australian Securities Level 12, 83 Clarence Street Exchange Limited Sydney NSW 2000, Australia ASX Code: IPE Email: [email protected] Website Manager www.ingpeal.com.au Pomona Australia Pty Limited Level 12 83 Clarence Street ING Private Equity Access Limited does not Sydney NSW 2000 guarantee the repayment of capital or the Australia investment performance of the Company.
T: +61 2 9299 2900 For personal use only use personal For
Page 66 For personal use only use personal For
Page 67 ING Private Equity Access Limited
ING PRIVATE EQUITY ACCESS LIMITED
ABN 48 107 843 381 For personal use only use personal For
Notice of Annual General Meeting
ING PRIVATE EQUITY ACCESS LIMITED
Notice is given that the Annual General Meeting of ING Private Equity Access Limited (the Company) ABN 48 107 843 381 will be held at 2.30 p.m. on Wednesday, 24 October 2012 at the Macquarie Graduate School of Management CBD Executive Conference Centre, Level 7, 37 Pitt Street, Sydney, NSW.
Business of the Meeting
Ordinary Business
1. REPORTS To receive and consider the Financial Report, the Directors’ Report and the Auditor’s Report for ING Private Equity Access Limited for the period ended 30 June 2012.
Please refer to Explanatory Note 1.
2. ELECTION OF DIRECTORS The following Directors retire in accordance with the Company’s Constitution:
Mr Geoffrey N Brunsdon Dr Donald W Stammer
Being eligible, Mr Geoffrey N Brunsdon and Dr Donald W Stammer offer themselves for re- election.
2.1. GEOFFREY N BRUNSDON To consider and, if thought appropriate, pass the following Ordinary Resolution: “That, Geoffrey N Brunsdon, a Non-Executive Director retiring in accordance with the Constitution, being eligible, is re-elected as a Non-Executive Director of ING Private Equity Access Limited.”
2.2. DONALD W STAMMER For personal use only use personal For To consider and, if thought appropriate, pass the following Ordinary Resolution: “That, Donald W Stammer, a Non-Executive Director retiring in accordance with the Constitution, being eligible, is re-elected as a Non-Executive Director of ING Private Equity Access Limited.”
Please refer to Explanatory Note 2.
ING PRIVATE EQUITY ACCESS LIMITED
3. REMUNERATION REPORT To consider and, if thought appropriate, pass the following Advisory Resolution: “That, the Remuneration Report included in the Annual Report for the period ended 30 June 2012 (set out in the Directors’ Report) is adopted.”
Please refer to Explanatory Note 3.
4. OTHER BUSINESS To transact any other business that may be legally brought forward.
By the order of the Board
Sam Jackson Company Secretary Sydney
29 August 2012
ING Private Equity Access Limited Registered Office: Level 12, 83 Clarence Street, Sydney, NSW 2000 Australia
For personal use only use personal For
Page 2
ING PRIVATE EQUITY ACCESS LIMITED
Voting Information
VOTING ELIGIBILITY In accordance with the Corporations Regulations 2001 (regulation 7.11.37), the Company has determined that, for the purposes of the Annual General Meeting, all Shares in the Company will be taken to be held by persons who held them as registered members at 7 p.m. Eastern Standard Time (EST) on Monday, 22 October 2012. All registered members at that time are entitled to attend and vote at the Meeting.
PROXIES Your personalised proxy form and a reply-paid envelope accompany this Notice. A registered member entitled to attend and vote at the Meeting is entitled to appoint one or two proxies, to attend and vote on their behalf at the Meeting. A proxy need not be a registered holder. Where two proxies are appointed, neither proxy may vote on a show of hands and each proxy should be appointed to represent a specified proportion of the member’s voting rights. If the proxy appointments do not specify the proportion of the member’s voting rights that each proxy may exercise, each proxy may exercise half of the member’s votes. To be effective, proxy forms must be received by using the reply paid envelope (included with this Notice) or by post, facsimile or delivery at the offices of the Company’s Share Registrar, as follows:
1. Post: ING Private Equity Access Limited Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia;
2. Facsimile: 61 2 9287 0309; or
3. Delivery to: Link Market Services Limited 1A Homebush Bay Drive, Rhodes NSW 2138
by 2:30p.m. EST on Monday, 22 October 2012. Proxy forms received after this time will be invalid. Votes can also be lodged online before the deadline above. To vote online: 1. Login to the Link website using the holding details as shown on the proxy form. 2. Select ‘Voting’ and follow the prompts to lodge your vote. To use the online lodgement facility, shareholders will need their “Holder Identifier” (Securityholder Reference Number (SRN) or Holder Identification Number (HIN) as shown on the front of the proxy form).
BODY CORPORATE PROXY APPOINTMENTS If a body corporate is appointed proxy, that body corporate will need to ensure that it appoints an individual as its corporate representative to exercise its powers at the Meeting and provide evidence of that appointment in the same manner as outlined below in relation to the appointment of a corporate representative by a member.
CORPORATE REPRESENTATIVE PROXY APPOINTMENTS
For personal use only use personal For A corporation which is a member may appoint an individual to act as its representative at the Meeting. If a representative of the corporation is to attend the Meeting the letter of representation must be produced prior to admission. Evidence of the appointment of a corporate representative must be lodged with the Company’s Share Registrar before the Meeting or at the registration desk on the day of the Meeting.
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ATTORNEYS A member entitled to attend and vote at the Meeting is entitled to appoint an attorney to attend and vote at the Meeting on the member’s behalf. An attorney need not be a shareholder. The power of attorney appointing the attorney must be duly executed and specify the name of each of, the member, the Company and the attorney, and also specify the Meetings at which the appointment may be used. The appointment may be a standing one. To be effective, the power of attorney must be received by the Company’s Share Registrar in the same manner, and by the same time, as outlined above for proxy forms.
EVIDENCE OF EXECUTION If any instrument (including an appointment of a corporate representative or a proxy form) is completed by an individual or a corporation under a power of attorney, the power of attorney under which the instrument is signed, or a certified copy of it, must accompany the instrument unless the power of attorney has previously been noted by the Company or by the Company’s Share Registrar.
VOTING ON RESOLUTION 3 (REMUNERATION REPORT) BY PROXY Voting Exclusion Statement In accordance with the Corporations Act, the Company will disregard any votes cast on Resolution 3 by a member of the Key Management Personnel of the Company whose remuneration details are included in the Remuneration Report, or a closely related party of such a member of the Key Management Personnel (each an "Excluded Member"). "Key Management Personnel" of the Company are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director (whether executive or non-executive) of the Company. A "closely related party" of Key Management Personnel is a term defined in the Corporations Act and includes close family members, such as the children or spouse of the relevant Key Management Personnel, companies that person controls and other members of that person's family who may be expected to influence, or be influenced by, that person in that person's dealings with the Company. However, the Company will not disregard a vote if: (a) it is cast by: (i) an Excluded Member (who may include the Chairperson), as a proxy for a member entitled to vote, appointed in writing that specifies how the proxy is to vote on the proposed resolution (i.e. a directed proxy); or (ii) the Chairperson, as a proxy for a member entitled to vote, appointed in writing, that does not specify how the proxy is to vote on the proposed resolution (i.e. undirected proxy) where that appointment as proxy expressly authorises the Chairperson to exercise the proxy; and (b) the vote is not cast on behalf of an Excluded Member.
MEETING REGISTRATION If you (or your proxy or attorney) will be attending the Meeting, we suggest that you arrive at least half an hour before the Meeting commencement time to allow sufficient time to complete the registration process.
For personal use only use personal For
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Explanatory Notes
1. REPORTS Section 317 of the Corporations Act 2001 (Corporations Act) requires that the Financial Report, the Directors’ Report and the Auditor’s Report of the Company for the period ended 30 June 2012 be laid before the Annual General Meeting. Neither the Corporations Act nor the Company’s Constitution requires members to vote on or approve or adopt those reports. Members will, however, have the opportunity at the Meeting to raise questions on those reports. The Company’s auditor will be available to take members’ questions relating to the preparation and conduct of the audit and the preparation and content of the Audit Report.
2. ELECTION OF DIRECTORS Mr Geoffrey N Brunsdon and Dr Donald W Stammer retire in rotation and, being eligible, offer themselves for re-election.
The personal particulars of Mr Geoffrey N Brunsdon and Dr Donald W Stammer follow.
Geoffrey N Brunsdon Geoff Brunsdon is Chairman of Sims Metal Management Limited, APN Funds Management Limited, and MetLife Insurance Limited, and is a director of Macquarie University Hospital. He was previously Managing Director and Head of Investment Banking of Merrill Lynch International (Australia) Limited and is also involved in several non-profit organisations.
Donald W Stammer Don Stammer has had a long and distinguished career in each of academia, central banking and investment banking and is one of Australia’s best known economists. From 1972 until 1981 Don held senior positions, including deputy chief manager, at the Reserve Bank of Australia. From 1981 until 2001 he was Chief Economist/Director of Investment Strategy with Deutsche Bank (formerly Bain & Company). Don has advisory roles with the Third Link Growth Fund, Altius Asset Management and Philo Capital Management. He chairs the Australian Ecosystems Foundation Incorporated and is a member of the Investments Committee of the National Children's Medical Research Institute. Don was a Director of Praemium Limited from 11 May 2006 to 20 March 2012.
3. REMUNERATION REPORT The Remuneration Report is contained in the Directors’ Report of the 2012 ING Private Equity Access Limited Annual Report. The Report sets out: the intention of the Board not to establish a Remuneration Committee at this stage; the remuneration details for each Director; and that, other than the Managing Director, there are no executive officers of the Company. The Directors recommend that you vote in favour of the Advisory Resolution The resolution is advisory only and does not bind the Directors or the Company.
For personal use only use personal For
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Glossary
In this Notice and Explanatory Notes; Company means ING Private Equity Access Limited ABN 48 107 843 381; Constitution means the constitution of the Company; Explanatory Notes means the explanatory notes which accompany, and are incorporated as part of this Notice; Meeting means the Annual General Meeting of the Company to be held at 2.30pm on Wednesday, 24 October 2012; Notice means this Notice of Meeting;
Shares means fully paid ordinary shares in the capital of the Company. For personal use only use personal For
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LODGE YOUR VOTE ONLINE www.linkmarketservices.com.au
By mail: By fax: +61 2 9287 0309 ING Private Equity Access Limited C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia All enquiries to: Telephone: 1800 891 098 (AUS) / 0800 507 120 (NZ) Overseas: +61 2 8280 7185
ShareHOLDER VOTING FORM
I/We being a member(s) of ING Private Equity Access Limited and entitled to attend and vote hereby appoint:
STEP 1 APPOINT A PROXY the Chairman OR if you are NOT appointing the Chairman of the Meeting as your proxy, of the Meeting please write the name of the person or body corporate (excluding the (mark box) registered shareholder) you are appointing as your proxy. I/we appoint the Chairman of the Meeting as an alternate proxy to the person named. If no person/body corporate is named, the Chairman of the Meeting, is appointed as my/our proxy and to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at 2:30pm on Wednesday, 24 October 2012, at the Macquarie Graduate School of Management, CBD Executive Conference Centre, Level 7, 37 Pitt Street, Sydney, NSW and at any adjournment or postponement of the meeting. I/we expressly authorise the Chairman of the Meeting to exercise my/our proxy even if the resolution is connected directly or indirectly with the remuneration of a member of the key management personnel. The Chairman of the Meeting intends to vote undirected proxies in favour of all items of business.
Proxies will only be valid and accepted by the Company if they are signed and received no later than 48 hours before the meeting. Please read the voting instructions overleaf before marking any boxes with an X
STEP 2 VOTING DIRECTIONS For Against Abstain* Resolution 2.1 Re-election of Mr. Geoffrey N Brunsdon as a Director Resolution 2.2 Re-election of Dr. Donald W Stammer as a Director Resolution 3 To adopt the Remuneration Report SAMPLE
*IPE PRX201R* For personal use only use personal For * If you mark the Abstain box for a particular Item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.
STEP 3 SIGNATURE OF ShareHOLDERS – THIS MUST BE COMPLETED Shareholder 1 (Individual) Joint Shareholder 2 (Individual) Joint Shareholder 3 (Individual)
Sole Director and Sole Company Secretary Director/Company Secretary (Delete one) Director This form should be signed by the shareholder. If a joint holding, either shareholder may sign. If signed by the shareholder’s attorney, the power of attorney must have been previously noted by the registry or a certified copy attached to this form. If executed by a company, the form must be executed in accordance with the company’s constitution and the Corporations Act 2001 (Cth). IPE PRX201R HOW TO COMPLETE THIS PROXY FORM
Your Name and Address To appoint a second proxy you must: This is your name and address as it appears on the company’s (a) on each of the first Proxy Form and the second Proxy Form share register. If this information is incorrect, please make the state the percentage of your voting rights or number of correction on the form. Shareholders sponsored by a broker shares applicable to that form. If the appointments do not should advise their broker of any changes. Please note: you specify the percentage or number of votes that each proxy cannot change ownership of your shares using this form. may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded. Appointment of a Proxy (b) return both forms together. If you wish to appoint the Chairman of the Meeting as your proxy, mark the box in Step 1. If the person you wish to appoint Signing Instructions as your proxy is someone other than the Chairman of the Meeting please write the name of that person in Step 1. If you You must sign this form as follows in the spaces provided: appoint someone other than the Chairman of the Meeting as Individual: where the holding is in one name, the holder must your proxy, you will also be appointing the Chairman of the sign. Meeting as your alternate proxy to act as your proxy in the event the named proxy does not attend the meeting. Joint Holding: where the holding is in more than one name, either shareholder may sign. Votes on Items of Business – Proxy Appointment Power of Attorney: to sign under Power of Attorney, you must You may direct your proxy how to vote by placing a mark in lodge the Power of Attorney with the registry. If you have not one of the boxes opposite each item of business. All your shares previously lodged this document for notation, please attach a will be voted in accordance with such a direction unless you certified photocopy of the Power of Attorney to this form when indicate only a portion of voting rights are to be voted on any you return it. item by inserting the percentage or number of shares you wish Companies: where the company has a Sole Director who is to vote in the appropriate box or boxes. If you do not mark also the Sole Company Secretary, this form must be signed by any of the boxes on the items of business, your proxy may vote that person. If the company (pursuant to section 204A of the as he or she chooses. If you mark more than one box on an Corporations Act 2001) does not have a Company Secretary, a item your vote on that item will be invalid. Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Appointment of a Second Proxy Company Secretary. Please indicate the office held by signing You are entitled to appoint up to two persons as proxies to in the appropriate place. attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by Corporate Representatives telephoning the company’s share registry or you may copy this If a representative of the corporation is to attend the form and return them both together. The appointment of the meeting the appropriate “Certificate of Appointment of Chairman of the Meeting as your alternate proxy also applies Corporate Representative” should be produced prior to to the appointment of the second proxy. admission in accordance with the Notice of Meeting. A form of the certificate may be obtained from the company’s share registry.
Lodgement of a Proxy Form This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below by 2:30pm on Monday, 22 October 2012, being not later than 48 hours before the commencement of the meeting. Any Proxy Form received after that time will not be valid for the scheduled meeting.
Proxy Forms may be lodged using the reply paid envelope or:
ONLINE www.linkmarketservices.com.au Login to the Link website usingSAMPLE the holding details as shown on the proxy form. Select ‘Voting’ and follow the prompts to lodge your vote. To use the online lodgement facility, shareholders will need their “Holder Identifier” (Securityholder Reference Number (SRN) or Holder Identification Number (HIN) as shown on the front of the proxy form).
by mail: ING Private Equity Access Limited C/- Link Market Services Limited Locked Bag A14
Sydney South NSW 1235 For personal use only use personal For Australia by fax: +61 2 9287 0309 by hand: delivering it to Link Market Services Limited, 1A Homebush Bay Drive, Rhodes NSW 2138.
If you would like to attend and vote at the Annual General Meeting, please bring this form with you. This will assist in registering your attendance.