ALS LIMITED - Annual Report 2011 | FinancialReports.eu

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ABN 92 009 657 489
Annual Report 2011
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Global Operations	2
Financial Highlights	4
Year in Review	6
Health and Safety	9
ALS Group	10
ALS Minerals	11
ALS Coal	12
ALS Environmental	13
ALS Tribology	14
ALS Industrial	15
Campbell Chemicals	16
Reward Distribution	17
Directors	18
Group Management	20
Corporate Governance Statement	22
Corporate Social Responsibility	26
Organisational Development	28
Financial Report	29
Shareholder Information	90
ASX Requirements	91
Ten Year Summary	92
Principal Offces	93
General Information	94

Financial Calendar

2010/2011

Record Date for Final Dividend	10 June 2011
Final Dividend Paid	1 July 2011
Annual General Meeting	26 July 2011
2011/2012
Half-Year End	30 September 2011
Half-Year Results and
Dividend Announced	29 November 2011
Record Date for
Interim Dividend	13 December 2011
Interim Dividend Paid	19 December 2011

Note: Dates subject to alteration

Annual General Meeting

The 60th annual general meeting of Campbell Brothers Limited will be held at 11.00am on 26 July 2011 at The Sebel & Citigate King George Square, Brisbane.

Campbell Brothers Limited

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Campbell Brothers Limited is a leading commercial services company with national and international operations.

With global headquarters based in Brisbane, we are one of the longest-established companies listed on the Australian Securities Exchange (ASX code: CPB).

Over the past 10 years, an investment in the Company’s shares has achieved an annual rate of return of 32.8 per cent, outperforming the benchmark S&P/ASX All Ordinaries Accumulation Index’s return of 9.1 per cent over the same period.

In March 2011, the Company was included in the S&P/ASX 300 Index.

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%
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totAl sHAReHolDeR RetuRn
average annual rate
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Our Company was founded in 1863 and listed on the ASX in 1952. We are a Company with a multi-billion-dollar market capitalisation.

Campbell Brothers operates three main business divisions – the ALS Group, Campbell Chemicals and Reward Distribution. We have more than 8,000 employees and we operate from more than 240 sites on six continents.

Our products and services hold leading positions in key markets where we have utilised considerable expertise and resources to establish our presence. We operate one of the world’s largest analytical and testing services business and our partnerships span major sectors including mining, natural resources, environmental, food, pharmaceutical, industrial, hospitality and institutional health care services.

Our Company is focused on driving growth by continuing to successfully operate our existing businesses while pursuing new opportunities.

Our success has enabled us to achieve excellent results for our shareholders and we have an established trend of attractive investor returns.

ouR Vision

Campbell Brothers is committed to maintaining the strong and sustainable growth strategies which have made us a successful global Company. We will maintain the rewarding partnerships we share with our clients, business partners, shareholders and communities and identify and develop new opportunities.

ouR VAlues

Our Company upholds the values which are the foundation of our proud tradition of excellence.

Our people are dedicated to the values of quality, integrity, reliability and innovation which ensure we deliver the highest level of customer service. We value efficiency, safety and diversity in our workplaces. We value the leadership and learning that develops our people and our businesses.

n CpB shares
n S&p/ASX All ordinaries Accumulation index

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011 1

Global Operations

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opeRAtes fRom moRe tHAn 240 sites in 44 countRies on six continents
Campbell Brothers consists of three market-leading business
divisions and we have operations across Australia, Asia, the
Pacific, North and South America, Africa and Europe.
These business divisions provide a range of services and products
tailored to the demands of each market.
0 2000 4000 6000 8000 10000
emploYs oVeR 2007 4,863
2008 6,854
2009 6,277
8,000
stAff woRlDwiDe 2010 7,570
2011 8,936
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0 2000 4000 6000 8000 10000
2007 4,863
2008 6,854
2009 6,277
2010 7,570
2011 8,936
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GRoup emploYee numBeRs as at 31 March

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Business Divisions

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Als GRoup

cAmpBell cHemicAls

RewARD DistRiBution

A world leader in testing and technical services in the Environmental, Minerals, Coal, Tribology (used oil), Food, Industrial and Metallurgical markets with additional technical services provided in the areas of pharmaceutical, microbiology, occupational health, electronics and air quality.

Specialises in the importation and blending of chemicals and the distribution of a wide range of industrial and commercial products throughout Australia, New Zealand and the South Pacific.

The division consists of three marketleading businesses operating across Australia, providing a range of products and services tailored to the hospitality, mining and healthcare markets.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

Financial Highlights

Revenue up 34.3% to $1.108 billion

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Underlying net profit up 75.6% to $132.2 million

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Earnings per share up 57.4% to 203.19 cents

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DiViDenDs

Total dividend for the year up 40% to $1.40 per share

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The Company will pay a final, partly-franked (50%) dividend for 2011 of 75 cents per share (2010: 55 cents) at the 30% tax rate (2010: 30%). The total dividend for the year will be 1.40 (2010: $1.00).

YeAR At A GlAnce

as at 31 March	2011	2010
Revenue ($m)	1,108.3	825.5
Underlying net Proft after tax ($m) (excluding unusual items)	132.2	75.3
Share capital ($m)	610.4	456.7
Total equity ($m)	825.2	629.7
Earnings per share (attributable to members) (cents)	203.19	129.06
Dividends per share (cents)	140.0	100.0
Net tangible asset backing per share ($)	4.77	3.76
Gearing ratio (net debt/(net debt + total equity) ( %)	11.9	18.9
Interest cover (times)	19.1	10.5

4 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

Financial Highlights

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ReVenue

Total revenue for the consolidated Group was $1.108 billion for 2011, a 34.3% increase on the $825.5 million recorded in 2010.

The revenue generated by each Business Division was as follows:

Business Division	2011 ($m)	2010 ($m)	Change %
ALS Minerals*	334.5	205.0	+63.2
ALS Environmental	308.3	245.2	+25.7
ALS Coal	73.0	61.8	+18.2
ALS Tribology	30.3	29.8	+1.7
ALS Industrial**	112.0	19.8	n/a
Campbell Chemicals***	130.3	151.8	(14.1)
Reward Distribution	123.9	117.8	+5.2

pRofit

Underlying net profit after tax, attributable to equity holders of the Company and excluding unusual items, was $132.2 million for 2011, an increase of 75.6% on the $75.3 million achieved in 2010.

The profit contribution from ordinary activities, before tax and corporate overheads for each Business Division was as follows:

Business Division	2011 ($m)	2010 ($m)	Change %
ALS Minerals*	111.8	53.3	+109.6
ALS Environmental	66.2	43.8	+51.1
ALS Coal	17.2	15.0	+14.1
ALS Tribology	4.0	4.6	(13.7)
ALS Industrial**	12.6	1.3	n/a
Campbell Chemicals***	7.4	8.2	(10.4)
Reward Distribution	(1.8)	3.4	(152.9)

Includes Ammtec Ltd for 5 months from 1 November 2010 to 31 March 2011
**Acquired Pearlstreet (ALS Industrial division) effective Jan 2010
*** sold the Cleantec business effective 1 December 2010

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

Year in Review

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Record levels of revenues and earnings were achieved for the year to March 2011.

The Group delivered a record financial result in the year to 31 March 2011 as our investment in strategic acquisitions and additional operational capacity further accelerated growth.

RecoRD Result

Revenues exceeded $1billion for the first time, driving a 75.6% increase in net profit and a 57.4% increase in earnings per share.

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11%
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77%
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DiVisionAl ReVenue

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3%
97%
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DiVisionAl pRofit

[ Als Group]

The results exceeded the previous record performance, achieved in 2008-09. Since that time we have advanced our business strategy and expanded the ALS division to capitalise on opportunities, including the upturn in global mineral exploration activity.

finAnciAl GRowtH

Underlying net profit after tax (attributable to equity holders of the Company and excluding unusual items) was $132.2 million, in line with recent guidance provided to the market. The result compared with $75.3 million in the previous year and was generated from revenues of $1.108 billion, an increase of 34.3%.

The performance reflects the Group’s success in preparing for, and benefiting from, a recovery in global business conditions. Investments in strategic acquisitions and increased operational capacity during the previous year established a platform from which the Group launched its significant increase in business volumes.

In particular, the recovery in global mineral exploration activity lifted demand for the analytical testing services provided by ALS Minerals division. It made the largest contribution to Group revenue of any division after achieving a 63% increase in revenue over the previous year.

ALS Environmental recorded revenue growth of 25.7% and ALS Coal’s revenue rose 18.2%. The newly formed ALS Industrial division, created following the acquisition of industrial services company PearlStreet Limited in January 2010, generated revenue in excess of $112 million in its first full year with the Group. The Industrial division is now the third largest of ALS’s five divisions in terms of revenue.

The strong growth in our financial results was achieved despite the softening effect of a stronger Australian dollar on the translation of international earnings.

[ campbell chemicals] Reward Distribution

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Year in Review

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sHAReHolDeR RetuRns

The Group’s improved performance has significantly increased shareholder returns for the year.

Directors declared a final dividend, partly-franked (50%), of 75 cents per share (2010: 55 cents partly franked), bringing the total dividend of the year to a partly franked (50%) $1.40 per share (2010: $1.00 partly franked). On a dividend per share basis, shareholder returns increased 40%.

Earnings per share increased 57.4% to $2.03 per share (2010: $1.29) on both a basic and diluted basis.

The increases have been achieved even though the number of shares on issue increased due to new shares being issued pursuant to the Group’s acquisition of Ammtec Limited.

DiVisionAl oVeRView

Als GRoup

The ALS Minerals division performed very strongly in buoyant market conditions during the year to March 2011. Capital investments made during the previous 12 months were well timed with the increased capacity being deployed to meet the significant increase in demand for analytical services. The division enjoyed strong growth in all regions, particularly in North America and Africa. The December 2010 acquisition of Ammtec Limited added a valuable suite of metallurgical and consultancy services to the division’s capabilities.

ALS Environmental also delivered a strong result for the year, securing important government project work in a number of countries. The Australian region now includes an expanded presence in the Australian water services sector (following the acquisition of Ecowise Environmental in November 2009).

ALS Coal division delivered solid increases in both revenue and earnings despite a series of natural disasters affecting our clients’ exploration activities and export volumes across all operating regions. The delays caused by the natural disasters resulted in some inconsistent workflows which slightly reduced profit margins.

During the year, ALS Coal acquired a property at Richlands in Brisbane, Queensland to replace its nearby operation at Ipswich. The new facility underwent a complete refit and commenced operations early in the 2011-12 financial year as the new headquarters for our Australian coal operations. It is the world’s most technologically-advanced coal testing facility and offers significantly increased capacity and capabilities.

ALS Tribology was adversely affected by a stronger Australian dollar impacting the translation of earnings from its North American operations which dominates ALS Tribology’s business. Profit margin eased slightly in this division, however there was improvement in the second half which is expected to continue.

The ALS Industrial division performed ahead of expectations in all regions during the financial year and continues to be the leader in its field, providing asset care services to the energy, resources and infrastructure sectors.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

Year in Review

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DiVisionAl oVeRView continueD

campbell chemicals

Campbell Chemicals delivered a slight improvement in profit margin, despite some disruption caused by the divestment of the Cleantec business unit in December 2010. Operational efficiencies improved including a reduction in some purchasing costs due to the stronger Australian dollar.

The Panamex trading operation generated improved gross sales margins in its key regions.

Reward Distribution

Our hospitality supplies business lifted revenue during the year, however, difficult trading conditions in the first half impacted earnings. Although these conditions were successfully addressed in the second half, when the business returned to break even, a loss was recorded for the full year.

Reward now has a re-focussed national procurement team together with a new national sales and marketing support group.

KeY ActiVities DuRinG tHe YeAR

The Group continued its strategy of business expansion and diversification in analytical testing and inspection services. Key activities included:

Expansion of testing service capabilities through the November 2010 acquisition of Ammtec Limited, a leading metallurgical and mineral testing consultancy company based in Western Australia.
75% of the consideration paid for Ammtec was satisfied by the issue of 3,491,408 shares in the Company in November and December 2010.
Divestment of the Cleantec chemical and cleaning solutions business to Ecolab Pty Ltd in December 2010.

outlooK

Our expansion strategy successfully accelerated business growth in 2010-11 and the Group believes additional potential from this strategy will be realised in the 2011-12 financial year and beyond.

The Group continues to advance ALS’s services further along the strategic path, increasing its prominence as a leading global provider of Testing, Inspection and Certification (TIC) services.

Acquisitions finalised in the second half of financial year 2010-11, including Ammtec Limited and Analytical Laboratory Services, Inc in the US, are expected to make significant contributions in the year ahead, as will the ALS Industrial division, which reported its first full year result in 2011. Our new world-class coal testing facility is delivering additional service and technical capabilities at a time when further upturn is anticipated for the coal mining sector.

The divestment of the Cleantec business, finalised last December, is also assisting the Group to advance the opportunities we have identified across all our business divisions.

8 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

Health and Safety

During the year, Campbell Brothers successfully completed a revision and global roll out of our Health Safety & Environment (HSE) Minimum Standards.

This process was an essential part of our efforts to ensure safe workplaces across our global operations.

Our first CBL HSE minimum standard was developed in 2005. It successfully introduced to all CBL businesses a corporate standard for managing HSE.

Having a common HSE Minimum Standard across all business activities, irrespective of the country or the type of work activity, gave us a clear direction and minimised the risk of harm.

Since that time, all of our established businesses have applied this standard and have been actively striving to ensure 100% compliance. The standard has also provided our new and growing businesses with a performance benchmark.

We now operate in 44 countries and our business continues to diversify.

As part of the ongoing development of our HSE program in our growing business, the Minimum Standard was renewed during the year. This provides us with focus on key and emerging HSE issues while retaining the core elements of contemporary safety management systems needed for a dynamic and growing business.

ouR GoAls

The Minimum Standard has 13 Goals. These are:

1 Life Saving Rules
2 Implement a risk management approach to health, safety and environmental risks
3 Legal compliance
4 Management commitment & communication
5 Training and competencies
6 Incident & hazard reporting and investigation
7
Injury management
8 Contractor management
9 Emergency preparedness
10 Program monitoring and evaluation
11 Environmental sustainability
12 Loss control measures
13 Plant, equipment and vehicles.

ouR focus

We are pursuing all 13 Goals with a particular focus on the following three:

life saving Rules
environmental sustainability
loss-control measures.

life saving Rules identify and manage the major risks that may cause serious harm to our staff. There are clear expectations concerning staff and management compliance. This stand-alone Goal has been developed to focus our commitment to ensure the elimination of life-threatening activities from our workplaces.

environmental sustainability has rightly become a global issue directing attention to businesses’ carbon and pollution footprints. This element of the Minimum Standard requires that businesses implement sustainability measures around waste reduction, energy conservation and our carbon emissions.

The loss control measures Goal provides a greater focus on the effective management of property and assets.

meAsuRinG success

Our Compliance and Risk Group conducts audits to measure the progress of all business units in achieving the new HSE Minimum Standard.

HeAltH AnD sAfetY peRfoRmAnce

The most commonly used method to measure health and safety performance is the Lost Time Injury Frequency Rate (LTIFR). This measures the number of Lost Time Injuries (LTI’s)* per million hours of work (reported as per AS 1885).

*LTI is a work injury that results in an inability to work for at least one full day or shift any time after the day or shift in which the injury occurred.

We have set high standards in relation to reducing harm to our employees. Reviewing the LTIFR performance over the past few years provides testament to the success of our efforts to reduce and mitigate the incidence of harm and injury.

Our most recent LTIFR figure is 2.5 is a slight decrease from the 2.6 low achieved last year. Although a modest reduction, we continue to strive for continuous improvement in this area.

GRoup ltifR (as at March 31)

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CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

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ALS Group

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	2011 $’000	2010 $’000	increase
Revenue	858,153	561,593	52.8%
Segment contribution	211,759	118,118	79.3%
Margin (segment contribution to revenue)	24.7%	21.0%

The ALS Group (ALS) is one of the largest providers of analytical and testing services in the world.

ALS offers analytical and testing services across multiple market segments, including:

Minerals
Metallurgy
Coal
Environmental
Tribology
Food & Pharmaceutical
Industrial

ALS has an enviable reputation for delivering a quality service which includes accurate and timely data, expert support and a culture of safety and innovation.

ALS employs over 7,000 staff worldwide, operating in more than 240 laboratories in 40 countries across Africa, Asia, Australia, Europe, North America and South America

ALS’ services specifically support mining and mineral exploration, commodity certification, environmental monitoring, equipment maintenance, food and pharmaceutical quality assurance and industrial operations.

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ALS Minerals Division

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	2011 $’000*	2010 $’000	increase
Revenue	334,477	204,984	63.2%
Segment contribution	111,796	53,344	109.6%
Margin (segment contribution to revenue)	33.4%	26.0%

The Minerals Division performed well in a buoyant market in 2010-11.

*includes Ammtec Ltd for the 5 months to 31 March 2011

GeocHemistRY

Capital expansions made during the 200910 financial crisis provided tremendous benefits as demand surged in 2010-11 and added capacity was employed. The group enjoyed strong growth in all regions but particularly strong growth was seen in North America and Africa. Global workloads achieved record levels during the year and although revenues recovered strongly from the prior financial year, slightly softer pricing eroded some of the potential gains.

Three new laboratories were added during the year: at Itafos (Brazil), Whitehorse (Canada) and Kirkenes (Norway). Also we released a ‘Core Photography’ service, the first integrated data service to be offered in our industry.

metAlluRGY

During the year ALS completed the acquisition of leading metallurgical and mineral testing consultancy Ammtec Ltd (renamed ALS Ammtec), one of the few comprehensive metallurgical testing firms in the world.

The acquisition was successfully concluded in November 2010 along with the commissioning of the new hydrometallurgy pilot facility in Perth in the same month.

This new world-class pilot facility is enhancing our performance in this area and is expected to boost revenue significantly.

Strong growth in the mining sectors is being reflected in revenue income and subsequently improved EBIT margins.

The iron ore division performed strongly and testwork from this sector represented approximately 38% of the metallurgical testwork revenue. Solid performances were also delivered in gold and base metal testing.

Growing client demands has driven expansion in all of these sectors.

A large number of international projects were conducted during the year reflecting the continuing importance of our global clients.

outlooK

The financial year 2011-12 promises to see a continuation of the buoyant work flows as capital financings by many client companies have been successfully completed in advance of the field seasons. The division will continue an aggressive capital expansion program in all regions to meet expected service demands and will also look to new markets in Central and Southeast Asia for expansion.

The metallurgical business performance will be driven by global commodities demand and the subsequent requirement for testing of new and existing ore bodies. This is resulting in further significant expansion of the metallurgical facilities to meet clients demand and expectations.

This expansion, together with other operational practices, will ensure we remain at the forefront of technology and best practice.

We are expanding and relocating the comminution, iron ore, heavy liquid separation and mineralogy sections to meet increased demand in these areas. In other initiatives we are commissioning a fully robotic and automated sample preparation facility to increase productivity and improve sample turnaround times. This facility will also enhance health and safety considerations.

New facilities will be established in Vancouver to offer local and quality metallurgical services for the North and South America regions. In Australia, we will relocate and expand the Adelaide metallurgical business.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

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ALS Coal Division

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	2011 $’000	2010 $’000	increase
Revenue	73,023	61,755	18.2%
Segment contribution	17,151	15,034	14.1%
Margin (segment contribution to revenue)	23.5%	24.3%

The ALS Coal Division achieved another record financial performance and has underpinned future growth with the establishment of the world’s most technologicallyadvanced coal testing facility.

Another record financial performance was achieved in 2010-11 with revenue increasing 18% and EBIT lifting 14% year-on-year.

The Division clearly outperformed global coal industry volume growth of 9%.

The Australian operations had a particularly strong result, buoyed by Asia’s ever increasing appetite for both coking and thermal coals and the need for suppliers to prove-up resources.

Our other operating regions of South Africa and North America were slower to recover from the global economic crisis.

The Division recorded strong growth in revenue and earnings despite the major weather events experienced across all operating regions which dampened anticipated exploration activity and export volumes.

A focus on safety reduced the Lost Time Injury Frequency Ratio (LTIFR) to 0.8 from the 4.6 recorded in the previous year. There was only one Lost Time Injury (LTI) recorded across all our regions.

new testinG centRe

Following the end of the financial year, in April 2011, we opened new operations headquarters for ALS Coal Australia at Richlands in Brisbane, Queensland.

It is the largest, most sophisticated, comprehensive and technologically advanced hub of coal testing excellence in the world.

The operation sets new benchmarks in innovation, service efficiencies and throughput.

Our new Australian headquarters replaces the previous operation which was located nearby at Riverview in Ipswich. The facility is located in a 9,625m2 building on 28,400m2 of land.

A new, joint facility is also being established by ALS Coal and ALS Minerals in Mongolia.

Leveraging this shift-change in capacity, ALS has also approved the upgrading of both coal and multi-divisional facilities in Central Queensland and New South Wales for 2011-2012.

outlooK

The Division’s established excellence in testing and client service together with a strong outlook for coal underpin expectations for continuing strong performance.

Coal continues to be the only commercially feasible reductant for steel manufacturing and the only sufficiently plentiful energy source for large-scale, base-load power generation.

Demand will continue to rise as developing economies pursue enhanced standards of living for their populations. Emphasis on coal quality management, improved beneficiation and more cost-effective and efficient utilisation technologies will drive growth in global coal industries.

Factors affecting the first half of 2011-2012 are expected to include impacts from the Japanese earthquake, tsunami and nuclear meltdown of March 2011. These events are expected to have a short-term effect on traded coal flows in Asia.

In Australia, supply constraints prevailing from flooding and wet weather in the eastern States are expected to contain first-half performance. However, this will be offset later in the year by our ability to service latent demand for borecore analysis once drill rigs regain field access. An elevation is also anticipated in production volumes and export quality analysis once coal-fired power stations and receiving ports in Japan progressively recommission and restock.

12 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

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ALS Environmental Division

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	2011 $’000	2010 $’000	increase
Revenue	308,281	245,205	25.7%
Segment contribution	66,195	43,798	51.1%
Margin (segment contribution to revenue)	21.5%	17.9%

The Division performed strongly with a record financial result from our business units and the successful integration of new acquisitions.

The Australian Environmental Group successfully integrated the Ecowise business, acquired in November 2009. The acquisition has delivered a full-service offering providing us with the necessary resources and capabilities to provide specialty services to the water industry.

Our services now encompass Analytical, Remote Monitoring & Hydrography, and Aquatic Ecology. We are providing specialty services for contaminated sites, ports and marine, acid sulphate and acid rock drainage, air monitoring, and specialist water services.

Successes include new contracts in regional environmental monitoring, site investigation and water industry services.

Our Asian region laboratories offer a diverse range of services encompassing Environmental, Food/Pharmaceutical, Electronics, Air Testing and Inspection/ Certification.

This year’s result was underpinned by our increased service offerings across target sectors, including Government-funded infrastructure projects and electronics services, and our investment in high-end technology.

The Bangkok laboratory was successfully relocated into a new purpose-designed 4000m2 multi storey facility, operational from 1 April 2011.

Environmental businesses in both the North American and European regions performed soundly, recording significant year-onyear increases in revenue, EBIT and profit margins.

The North American business performed strongly with growth across our operational regions of Canada, the United States and Mexico.

Our Eastern Canadian businesses performed particularly strongly, achieving a record financial performance in 2010-11.

In the US, there was a similarly strong performance with substantial growth in revenue, EBIT and a significant improvement in profit margins.

In January, 2011, ALS acquired Analytical Laboratory Services Inc., a Pennsylvanianbased Company engaged in providing laboratory services in the areas of enviromental testing, industrial hygiene and on-site field services.The Mexican operations exceeded budgeted expectations for revenue and EBIT with profit margins also increasing strongly.

In Europe, ALS Environmental continued to expand its laboratory facilities and services. The business’s operations in mainland Europe are in the Czech Republic, Poland and Portugal with expansion underway in Spain. We also operate throughout Scandinavia: in Denmark, Norway, Finland and Sweden.

In February 2011, ALS acquired Analyticke Laboratory Plzen a.s., a chemical and microbiological assay company in the Czech Republic.

The return on investment for the businesses throughout these regions continued to improve in an otherwise flat market with most businesses experiencing an increase in their market share.

outlooK

The Australian and Asian Environmental markets are expected to remain buoyant throughout 2011/12. Diversification of business services, further investment in high end technology, increased industry partnerships, increased cross divisional leveraging and the demand from resource based industries (Coal, Coal Seam Gas, Metalliferous Mining) will provide ample opportunities for growth.

The North American and European markets continue to demonstrate signs of continuing growth and offer opportunities for additional expansion.

In Europe, our focus is on continued, sustainable increases in revenue and earnings in a market which has potential for expansion opportunities. Our business strategies include assessing opportunities for further diversification, both in terms of geographic spread and the environmental testing services we offer.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011 13

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ALS Tribology Division

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	2011 $’000	2010 $’000	increase/ (Decrease)
Revenue	30,338	29,826	1.7%
Segment contribution	4,009	4,643	(13.7%)
Margin (segment contribution to revenue)	13.2%	15.6%

ALS Tribology continued to achieve growth in the global markets where we provide analytical laboratory assessments of lubricating oils, grease, coolants and fuels.

During 2010-2011 there was continued strong growth in Australia, New Zealand and Chile. ALS Tribology continued to improve its market share and to take advantage of the resurgence of the commodities sector.

it upGRADes

The introduction of our global IT systems into the North America laboratory network and the transfer and commissioning of our global IT hardware to Vancouver was completed.

North American customers have responded positively to the improvements which have provided them access to the ALS Tribology global program, Webtrieve. This system allows customers to access data worldwide from their global or regional operations using a single internet portal.

Transitioning our North American administrative systems onto the global systems was also completed, allowing us to decommission our previous systems over the next 12 months.

new inVestment

Our North American business also benefited from further investment in new instrumentation and facilities. The flagship Cleveland facility was relocated into larger purpose-built laboratories.

The South African laboratory achieved full production and the Santiago laboratory received ISO 17025 accreditation. We signed several new global service agreements with major oil, equipment and mining companies.

outlooK

Our achievements in improving IT systems and laboratory facilities is expected to immediately benefit operational performance in 2011-2012.

Strong growth is anticipated in our traditional, more mature, markets of Australia, New Zealand and Chile. Market share expansion is anticipated in the newer territories of North America and South Africa.

A number of additional business growth acquisitions and greenfield start-ups are also being considered to further expand the global Tribology laboratory network in South America, Asia and Europe.

14 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

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ALS Industrial Division

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	2011 $’000	2010 $’000	increase
	(12 months)	(3 months)
Revenue	112,034	19,823	n/a
Segment contribution	12,608	1,299	n/a
Margin (segment contribution to revenue)	11.3%	6.6%

The ALS Industrial Division reported strong revenue and EBIT growth driven by contract services provided to blue-chip energy and resources companies.

2010-2011 was the first full year of operations since the acquisition of the PearlStreet business in December 2009 and its rebranding as ALS Industrial.

The Division achieved strong revenue growth which translated into EBIT growth in line with expectations.

Blue cHip clients

The Division continues to be the Australian market leader in testing, inspection and asset care for the energy, resources and infrastructure sectors.

Growth was largely driven by our contracted relationships with blue chip energy and resources companies who are seeking to extend the life of plant and equipment or expand production capability.

expAnsions AnD upGRADes

Our strategic focus is providing asset owners and operators with high-quality engineering-led reliability and integrity services.

During the year we improved our services and facilities with our key achievements including:

Launch of Advanced Inspection Group to provide tube testing, phased array ultrasonics and corrosion mapping
Expanded advanced inspection capacity with the recruitment of technical leaders and investment in specialist equipment
Upgraded mechanical testing equipment to improve turnaround time and analysis capability
Establishment of a facility in Roma, Queensland to service the rapidly expanding coal seam gas sector
Consolidation and relocation of the Perth
business into a 5000m2 facility
Consolidation and relocation of the Sydney business
Successful renewal of the Collie Basin Coal Infrastructure Operations & Maintenance contract with Verve Energy.

outlooK

The Industrial Divisions target sectors of Oil & Gas, Mining, Minerals Processing, Power and Infrastructure are expected to remain buoyant throughout 2011/12.

Our continued investment in our capabilities, including reliability and integrity engineering capability and specialist inspection capability, and additional industry partnerships will provide opportunities for further margin improvement.

The recruitment of experienced engineers and technicians remains a significant challenge which the Division continues to address.

Our key opportunities include:

Renewal of strategic long-term contracts
Establishment of new partnership agreements with specialist inspection technology providers
Design and development of a centralised work management and reporting system
Rollout of online ALS testing courses
Expansion of the Gladstone site
Relocation planning for Melbourne.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011 15

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Campbell Chemicals

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The Campbell Chemicals division incorporates two business units, Deltrex Chemicals and Panamex Pacific, covering a wide range of industrial and commercial products throughout Australia as well as New Zealand and other export markets.

	2011 $’000*	2010 $’000	(Decrease)
Revenue	130,322	151,799	(14.1%)
Segment contribution	7,386	8,246	(10.4%)
Margin (segment contribution to revenue)	5.7%	5.4%

*Cleantec business sold effective 1 December 2010

Following a strategic review, Campbell Brothers secured the sale of one of the division’s three business units, Cleantec. The Company announced on 28 September 2010 that a sale agreement had been reached with Ecolab Pty Ltd, a subsidiary of Ecolab Inc, a US-listed cleaning and sanitation products and services company. The sale process completed on 1 December 2010.

The sale followed a continuing trend of consolidation in Cleantec’s business areas of Food Hygiene Systems and Textile and Commercial Hygiene Systems.

Campbell Chemicals is now focused on opportunities for the Deltrex Chemicals and Panamex Pacific business units which continue to offer a wide range of products and operations in Australia as well as New Zealand, Papua New Guinea and the Pacific Islands.

DeltRex cHemicAls

The business unit performed largely in accordance with forecast growth levels during the year when taking into account the transfer of Brisbane-based sales to Ecolab due to the Cleantec sale.

Deltrex continues to be one of Australia’s leading industrial and food chemical businesses, distributing a wide range of products and services to a range of industry sectors.

The year’s performance was pleasing given a number of challenges. These included the impact on agricultural product demand due to several natural disasters. There was also continued pressure on margins due to rising commodity prices in a strongly competitive and increasingly price-focused market base.

From a trading perspective, the market was further complicated by fluctuations in AUD exchange rates. These fluctuations caused a distinct move away from contract pricing and forward buying to a spot-purchasing mentality.

In the latter half of the year, efforts were directed towards decoupling the Deltrex business from Cleantec.

outlooK

Deltrex remains focused on being the lowest cost and most agile and responsive provider of chemical products and services in its markets.

The business remains focused on productivity measures and the development of new sales opportunities.

The decoupling of Cleantec will bring benefits to Deltrex through growth in sales to customers who, due to marketplace competition issues, had been reluctant to make purchases from a Cleantec-associated business unit.

pAnAmex pAcific

During the year, the business consolidated its leadership position in its largest single market, Papua New Guinea, as well as undertaking initiatives in other key export markets.

Panamex PNG was able to achieve its marketplace consolidation while continuing to improve the business through the implementation of an aggressive stock reduction program.

This operation now has several of its key brands occupying the number-one position in PNG market categories.

As well as being a significant exporter of consumer and industrial goods to PNG, Panamex Pacific also holds key positions in other export markets including North America, New Zealand, Fiji, New Caledonia and the Samoas.

Panamex Pacific continued its focus on new channel development throughout the year.

Several product launches were undertaken, although delays due to regulatory and compliance issues restricted some sales objectives, particularly for the New Zealand business unit.

American Samoa continued to be challenged as increasing unemployment in the local economy resulted in some slowing of demand. However, our operation continues to maintain a dominant market position and is well-placed to take advantage of any upturns in the local economy.

outlooK

Our business model continues to be reliable, flexible and portable and we expect to maintain successful operations throughout our export markets.

Focus will be maintained on managing working capital to ensure the most costeffective achievement of key product launch initiatives and revenue growth expectations for the 2011-12 financial year.

The business will continue to explore sensible opportunities to further expand the markets available to Panamex’s range of products.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

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Reward Distribution

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	2011 $’000	2010 $’000	increase/ (Decrease)
Revenue	123,869	117,785	5.2%
Segment contribution	(1,811)	3,424	(152.9%)
Margin (segment contribution to revenue)	(1.5%)	2.9%

The Group restructured in response to difficult first-half trading conditions, engineering a successful turnaround and the achievement of modest sales growth for the year.

Reward Distribution now has a stronger, leaner and more profitable national business following actions taken to address challenging circumstance faced at the start of the financial year.

A change in strategic direction at the end of the first half addressed the situation, establishing a more stable base for future operations.

A review process resulted in a reduction of staff, the closure of some sites and a discontinuation of non-productive activities. As a result, sales and profitability responded with improvements achieved.

The performance lift was particularly significant given the impact of severe weather conditions, particularly in the eastern States, during the second half.

pRoActiVe AppRoAcH

Reward has moved to a more proactive ‘go-to-market’ approach in our key market areas of hospitality, health care and institutions.

This approach has built on successes achieved previously through our new Business Model, launched in 2010. This model incorporates a National Corporate Accounts (NCA) structure and BTE Projects Design division.

A focus has been our brand management. The Hospitality Store is our retail offering and we have established our own branded range of products across various categories called Hospitality Essentials.

These changes have already delivered improved sales and profit margins.

pRocuRement AnD mARKetinG teAm

We have also sharpened our focus on our Australian division. At the start 20112012, in April 2011, we divested the underperforming New Zealand business.

A focussed national procurement team with a new national sales and marketing support group has enhanced our total offering to the marketplace and lays the foundation to meet our growth expectations.

outlooK

We have set specific goals in all our key markets with the aim of ultimately driving Reward to a strong position of market leadership across Australia.

Following the impact of the natural disasters experienced at the end of 2010-2011, we are finding a stronger market place is starting to emerge.

We have successfully entered the market supplying the resources sector, tapping into the mining camp “fitout” segment. This is proving to be a growth segment for us. Our approach through our National Corporate Accounts structure is to engage new national customers and this is proving productive for new business.

Our new leaner, more focused approach to the market is expected to further assist the significant business turnaround already achieved.

We will complete the rebadging of our showroom sites to The Hospitality Store throughout 2011.

Key projects will extract better value from the supply chain, minimise non-value adding activities, improve customer service levels and business results.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

Board of Directors

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Geoff mcGRAtH miie

chairman and independent non-executive Director Age 69

Mr McGrath became a director of Campbell Brothers in 2003 and was appointed chairman in 2004. He retired from GWA Group Limited in May 2003 after 43 years service, including the last 10 years as Managing Director. He is Chairman of GWA Group Limited (appointed a nonexecutive director July 2004). He was previously a director of Fletcher Building Limited (July 2003 – June 2009). He is Chairman of the Remuneration Committee and a member of the Audit and Compliance Committee.

GReG KilmisteR B sc (Hons), fRAci, mAiG

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managing Director and chief executive officer Age 55

Mr Kilmister was appointed Managing Director and Chief Executive Officer of Campbell Brothers in September 2005. He joined the Company in 1981 and was the General Manager of the Company’s highly successful ALS Laboratory Services Group from 1992 through to 2005.

neRolie witHnAll BA, llB, fAicD

independent non-executive Director Age 67

Mrs Withnall was appointed a director of Campbell Brothers in 1994. She is a director of PanAust Limited (appointed May 1996), Alchemia Limited (appointed Oct 2003) and Computershare Limited (appointed July 2008). She was previously a director of Redcape Property Fund Limited (formerly Hedley Leisure and Gaming Property Partners Limited) (June 2007 - November 2010), QM Technologies Limited (Sept 2003 – April 2008) and the Major Sports Facilities Authority. She is a former member of the Takeovers Panel, the Corporations and Markets Advisory Committee, the Senate of the University of Queensland and the Council of the Australian National Maritime Museum. She is a former partner of Minter Ellison Lawyers. She is Chairman of the Audit and Compliance Committee.

mARtin KRiewAlDt BA, llB (Hons), fAicD

independent non-executive Director Age 61

Mr Kriewaldt was appointed a director of Campbell Brothers in 2001. He is Chairman of Opera Queensland Limited and a director of Macarthur Coal Limited (appointed October 2008), BrisConnections Management Company Limited (appointed October 2008), Oil Search Limited (appointed April 2002) and Impedimed Limited (appointed March 2005). He was previously a director of Peptech Limited (October 2003 - August 2007), GWA International Limited (1992 - October 2008) and Suncorp-Metway Ltd (Dec 1996 – April 2010). He is a member of the Audit and Compliance Committee and the Remuneration Committee.

18 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

Board of Directors

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RAY Hill fAicD

independent non-executive Director Age 69

Mr Hill was appointed a director of Campbell Brothers in 2003. He retired in July 2002 after a career spanning thirty years with Queensland dairy company Parmalat Australia Ltd (formerly Pauls Limited) including the last 8 years as Group General Manager/Managing Director. He is a non-executive director of Parmalat Australia Ltd (unlisted public company). He is a member of the Audit and Compliance Committee.

BRuce BRown B com, AAuQ, fAicD

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independent non-executive Director Age 66

Mr Brown was appointed a non-executive director of Campbell Brothers effective 1 October 2005. He retired as Managing Director and Chief Executive of the Company on 31 August 2005 after 30 years service. He is a director of Transpacific Industries Group Ltd (appointed March 2005). He was previously a director of Flight Centre Limited (December 2005 – November 2007). He is a member of the Remuneration Committee.

mel BRiDGes B App sc, fAicD

independent non-executive Director Age 61

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Mr Bridges was appointed a director of Campbell Brothers on 29 September 2009. He has over 30 years experience in the biotechnology and healthcare industries. During this period, he founded and managed successful diagnostics, biotechnology and medical device businesses. He is currently Chairman of Alchemia Limited (appointed director in September 2003), ImpediMed Limited (appointed director in September 1999), and Non-Executive Director of Benitec Limited (appointed October 2007), and Tissue Therapies Limited (appointed March 2009). He was previously Chairman of Peptech Limited (December 2002 - November 2007), Incitive Limited (November 2007 - June 2010), and a non-executive director of Genera Biosystems Limited (December 2008 - November 2010).

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011 19

Group Management

cAmpBell BRotHeRs limiteD

RicHARD stepHens B com, cA chief financial officer

Richard is responsible for the overall financial management of the Campbell Brothers Group, including treasury and taxation. He has extensive finance experience, having previously been employed in similar financial roles in the banking sector.

tim mullen B Bus (Accounting), m com law, fcpA, fcis, fclA

Group company secretary

Tim is responsible for corporate governance of the Campbell Brothers Group, incorporating company secretarial, legal management and investor relations. He has wide commercial experience, with previous employment in financial accounting roles with other public listed companies.

micHAel BuRcHAm B sc, Grad Dip env Qual, Grad cert Risk management, Grad Dip AppcorpGov, mRAci, Acis

Group compliance and Risk manager

Michael is responsible for the overall risk management of the Campbell Brothers Group, encompassing the development and implementation of a global corporate compliance program to meet relevant legislation, industry standards and codes of practice. He also oversees the group’s health & safety and internal audit programs, as well as management of group insurances.

susAn putteRs B Bus (strategic Human Resources management), mBA (occupational Health & safety), GAicD

Group organisational Development manager

Susan was appointed Group Organisational Development Manager in January 2008. Susan is responsible for workforce planning, human resources and remuneration strategy for the Campbell Brothers Group. Key areas of focus currently include merger integration, process automation, organisational development, acceleration of talent and culture perpetuation. Susan also manages the Australasian IT, Employee/ Industrial Relations and Payroll teams. She has extensive global human resources leadership experience.

Als GRoup

BRuce mcDonAlD mBA (Hons), m sc (Geology), B sc (Hons) (Geology)

Group executive Vice president, minerals Division

Bruce was appointed Group Executive Vice President, Minerals Division effective 1 April 2009. Bruce is responsible for the strategic management of the ALS Group’s global Minerals Division. He was previously Vice President, North America, Minerals Division, responsible for management of the ALS Group mineral operations in North America, based in Vancouver. He has extensive experience in geology, mining, finance, strategic planning and management, having previously worked in the mining and smelting industries throughout North America and Australia for large, global companies.

BRiAn williAms B sc (Aust environmental studies), Grad Dip mgmt (Gen mgmt), mRAci

Group General manager, environmental (Australia and Asia) and industrial Divisions

Brian is responsible for the strategic management and development of the ALS Environmental Division in Australia and Asia, Food/pharmaceutical in Australia and the Industrial Division, established January 2010, after the acquisition of PearlStreet Limited. He has been with ALS since 1986 and has experience across all operating divisions via a number of executive positions.

RAj nARAn B sc (chemistry), B A (mathematics) Vice president, environmental Division (north America & europe)

Raj is responsible for the strategic management of the ALS Environmental Divisions in North America and Europe. Raj was owner of e-Lab Analytical, Inc. headquartered in Houston, Texas, which was acquired by ALS in 2007. He brings to the position a wealth of management and technical expertise related to the environmental testing industry. Prior to founding e-Lab, Raj held a number of senior management positions with US-based multinational laboratory companies.

pAul mcpHee B economics, Aimm

Group General manager, coal Division

Paul is responsible for the strategic management of ALS’ global Coal Division. He has over 20 years of coal and industryrelated experience. Paul was CEO of ACIRL prior to ALS’ acquisition of the company in October 2007. He has held senior global marketing, business development and commodity trading roles with several of the world’s leading mining houses.

peteR joRDAn B App sc (chem) Group General manager, tribology Division

Peter is responsible for the strategic management of the ALS Group’s global Tribology Division. He has been with the ALS Group for over 14 years, during which time he has been involved in a variety of business improvement activities, including the identification and analysis of new business opportunities. He has been extensively involved in assisting with the development and implementation of business growth strategies in Europe, Africa and more recently North America for ALS. He has more than 20 years senior business management experience gained with a number of companies both in Australia and in Asia.

KRisten wAlsH mBA, B sc (Hons) (civil and environmental engineering)

General manager, industrial Division

Kristen was appointed General Manager of the Industrial Division following the acquisition of PearlStreet Limited by ALS in January 2010. Kristen was Chief Operating Officer of PearlStreet prior to ALS’ acquisition of the company. Before joining the PearlStreet Executive Management Team in 2007, Kristen held a variety of senior strategic, commercial and operational roles with Advantica (now GL Noble Denton). She has over 15 years experience in the engineering services sector in the UK, USA and Australia.

20 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

Group Management

Als GRoup

Ron GRoGAn B Appsc. (metallurgy) chief executive, Als Ammtec

Ron was appointed Chief Executive of ALS Ammtec following the acquisition by ALS of Ammtec Ltd in November 2010. Ron joined Ammtec in 1996 bringing with him extensive experience in plant operations and project development, having previously worked with Western Mining Corporation, Freeport-McMoRan (Australia), Bond Gold Australia Pty Ltd and Outokumpu Australia Pty Ltd.

BRenDA cAuGHlin ph D Vice president, technology, Als Global

cAmpBell cHemicAls

DAViD BRown B Bus (Accountancy)

Group General manager, campbell chemical

David is responsible for overall management of the Group’s chemical businesses. He has been with Campbell Brothers for ten years. He has extensive commercial management experience, previously employed by Amcor/Southcorp in the plastic packaging industry for 15 years.

RewARD DistRiBution

AnDRew Ross B Bus (marketing),GAicD

Group General manager, Reward Distribution

Andrew was appointed Group General Manager of Reward Distribution in August 2010. He is responsible for overall management, strategy and development of the Group’s hospitality, cleaning and catering supply business, headquartered at Yatala, Queensland. Andrew has had considerable experience in management roles with leading FMCG and service-based companies, especially in running national networks across multi-site operations.

Brenda is responsible for technical development and oversight of the ALS Minerals group and Laboratory Information Management Systems for the global ALS group. She has a specialization in analytical spectroscopy and was instrumental in developing ICP services for the group and more recently, the integrated Laboratory Information Management System (GEMS) and client interface, Webtrieve, for the Minerals Division. Brenda has an international reputation as a geochemical expert, with over twenty five years experience in the industry.

GReG AfflecK B Bus (Accounting), cpA financial controller, Als Group

Greg is responsible for the financial management of ALS’s global operations. He has extensive finance experience gained from more than twenty years employment with the ALS Group as well as previous employment in senior financial positions within the manufacturing and property sectors.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011 21

Corporate Governance Statement

for the year ended 31 March 2011

pRinciple 1: BoARD AnD mAnAGement

The policies and practices developed and implemented by the Board over many years meet or exceed the Principles and Recommendations set out in ASX’s 2nd Edition Corporate Governance Council guidelines (ASX guidelines) which were amended in June 2010 and became effective from 1 January 2011.

This statement and information identified therein are available on the Company’s website at www. campbell.com.au under the Corporate Governance section.

A summary of the Company’s board charter is posted on the Company’s website which sets out the role, powers and responsibilities of the Board.

pRinciple 2: BoARD stRuctuRe

During the financial year the Board comprised six independent non-executive directors (including the Chairman) and one executive director (the Managing Director). The names, skills and experience of the directors in office at the date of this Statement, and the period of office of each director, are set out in the Directors’ Report and in the Annual Report.

independent professional advice

Each director has the right, at the Company’s expense, to seek independent professional advice in relation to the execution of Board responsibilities. Prior approval of the Chairman, which will not be unreasonably withheld, is required. Where appropriate, directors share such advice with the other directors.

independence of directors

The Board considers that all directors, other than the Managing Director, Greg Kilmister, to be independent of management influence. The Board distinguishes between the concept of independence, and the issues of conflict of interest or material personal interests which may arise from time to time. Wherever there is an actual or potential conflict of interest or material personal interest, the Board’s policies and procedures ensure that:

the interest is fully disclosed and the disclosure is recorded in the register of directors’ interests and in the Board minutes;
the relevant director is excluded from all considerations of the matter by the Board; and
the relevant director does not receive any segment of the Board papers or other documents in which there is any reference to the matter.

The chairman of the Company is an independent non-executive director.

The roles of chairman and chief executive are exercised by separate individuals.

nomination committee

The full Board is the Nomination Committee and regularly reviews Board membership. This includes an assessment of the necessary and desirable competencies of Board members, Board succession plans and an evaluation of the Board’s performance, and consideration of appointments and removals.

When a Board vacancy occurs, the Nomination Committee identifies the particular skills, diversity, experience and expertise that will best complement Board effectiveness, and then undertakes a process to identify candidates who can meet those criteria.

Directors are not appointed for specific terms and are subject to rotational requirements for re-election. Criterion for continued office is effective contribution, which is regularly reviewed in the processes referred to above.

A summary of the role, rights and responsibilities of the Nomination Committee, as well as the committee’s policy for appointment of directors, is available on the Company’s website.

Board performance

The Board undertakes an annual review of its performance together with an assessment of the Group’s executive management.

The Board provides an appropriate induction program for new directors, permits directors to obtain independent professional advice, have access to the Company Secretary, decide on the appointment and removal of the Company Secretary, and has procedures for the provision of information, including requests for additional information. The Company Secretary attends all Board meetings.

Induction and training programs for key executives are designed and implemented under the supervision of the Managing Director.

22 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

Corporate Governance Statement

for the year ended 31 March 2011

pRinciple 3: etHicAl stAnDARDs

code of conduct

Through established practices and policies the Board supports the need for directors and employees to observe the highest standards of behaviour and business ethics. All directors, managers and employees are expected to act with integrity, striving at all times to enhance the reputation and performance of the Group. The Board’s policies exceed all the ASX guidelines.

Appropriate training programs on the Group’s internal policies including workplace health and safety, environmental law compliance, trade practices legislation and affirmative action programs support this process.

The Board recognises that managing “natural, human, social and other forms of capital” may also assist in creating value for shareholders. To this end the Board seeks, by the individual contributions of directors and by encouraging activities of its executives, to uphold community standards and to maintain good relations with community and government organisations. However, the Board seeks to balance these considerations in order to ensure that the claims of legitimate stakeholders do not prejudice or diminish the legitimate expectations of shareholders. The Board does not support a process by which companies are regulated in their dealings in these areas, beyond the consideration of their programs to ensure compliance with legal and ethical standards.

A Code of Conduct which draws together all of the Company’s policies and codes was updated during the year and is available on the Company’s website.

trading in company securities by directors, officers and employees

The Board has established written guidelines, set out in its Securities Trading Policy, that restrict dealings by directors and relevant employees in the Company’s shares, and in shares in other companies related to the Company’s operations.

The Securities Trading Policy identifies certain periods when, in the absence of knowledge of unpublished price-sensitive information, directors and relevant employees may buy or sell shares. These periods include the four weeks following

the announcement of half year and full year results and following the Annual General Meeting.

To protect in particular the confidentiality of potentially price sensitive information about the clients of the laboratory services division of the Company, all employees of that division are specifically prohibited from trading in the shares of a company which, at the time, is a client of the division.

The policy was updated in September 2010 and posted on ASX’s Announcements platform in December 2010 as provided by ASX’s Listing Rules. The updated policy aligns with new requirements under ASX’s Listing Rules, including provisions relating to prohibiting trading by directors and senior executives in the Company’s securities during blackout periods, hedging arrangements in relation to any unvested securities of the Company and the requirement to disclose to the Board any securities in the Company that are held as security in a margin loan arrangement.

The updated Securities Trading Policy is published on the Company’s website.

Diversity

The Company recognises that a diverse and inclusive workforce is not only good for our employees, it is also good for our business.

The Company has established a Diversity Policy that has been reviewed and approved by the Board which contains measurable objectives for key diversity categories, and is published on the Group’s website.

The Company’s Diversity Policy is based on the following key principles, reflective of the Revised ASX Corporate Governance Principles and Recommendations on diversity issued in June 2010:

Treat others with respect, value differences and maintain privacy;
Value diversity and it will bring opportunities to enhance our businesses;
Women and minority cultural groups will not be disadvantaged in gaining employment and accessing the benefits and privileges that other persons in the company enjoy in their employment with the Company;
Transparency will be exercised in all recruitment decisions from Board level to entry level;
Workforce composition statistics will be reviewed annually to determine if there are any areas that warrant an increased focus on diversity; and
Public reporting of progress against the Company’s diversity objectives.

pRinciple 4: finAnciAl RepoRtinG

certification of financial reports

The Managing Director and Chief Financial Officer state in writing to the Board each reporting period that the Company’s financial reports present a true and fair view, in all material respects, of the Company’s financial condition and operational results and are in accordance with relevant accounting standards. The statements from the Managing Director and Chief Financial Officer are based on a formal sign off framework established throughout the Company and reviewed by the Audit and Compliance Committee as part of the six-monthly financial reporting process.

Audit and compliance committee

The Company has an established Audit and Compliance Committee operating under written terms of reference approved by the Board which are reviewed annually.

The Audit and Compliance Committee comprises four independent nonexecutive directors with an independent chairman who is not also chairman of the Board. The names and qualifications of members of the Audit and Compliance Committee are set out in the Directors’ Report and in the Annual Report. Other non-executive directors of the Board are entitled to be present at all meetings of the Committee. Meetings of the Committee are attended, by invitation, by the Managing Director, the Chief Financial Officer, the Group Compliance & Risk Manager, the engagement partner from the Company’s external auditor and such other senior staff or professional people as may be appropriate from time to time. The number of meetings of the Committee held during the year is set out in the Directors’ Report.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

Corporate Governance Statement

for the year ended 31 March 2011

pRinciple 4: finAnciAl RepoRtinG

Audit and compliance committee cont.

Minutes of all Committee meetings are provided to the Board and the Chairman of the Committee also reports to the Board after each Committee meeting.

Auditor independence

The external auditor, KPMG, has declared its independence to the Board through its representations to the Committee and provision of its Lead Auditor’s Independence Declaration to the Board, stating that there have been no contraventions of auditor independence requirements as set out in the Corporations Act or any auditors’ professional code.

The Audit partner was rotated as from the audit period commencing 1 April 2008. The Audit and Compliance Committee has examined detailed material provided by the external auditor and by management and has satisfied itself that the standards for auditor independence and associated issues are fully complied with.

The Audit and Compliance Committee’s terms of reference are available, along with other information suggested in the ASX guidelines, on the Company’s website.

pRinciple 5: mAteRiAl DisclosuRe

The Company has established policies and procedures for timely disclosure of material information concerning the Company. This includes internal reporting procedures in place to ensure that any material price sensitive information is reported to the Company Secretary in a timely manner. These policies and procedures are regularly reviewed to ensure that the Company complies with its obligations at law and under the ASX Listing Rules.

The Company Secretary is responsible for communications with the Australian Securities Exchange (ASX) including responsibility for ensuring compliance with the continuous disclosure requirements in the ASX Listing Rules and overseeing information going to the ASX, shareholders and other interested parties. The matter of continuous disclosure is a permanent item on the agenda for all Board meetings and

is specifically addressed by each director at those meetings.

The directors have obligations under a Disclosure of Interests and Transactions in Securities Agreement entered into with the Company to inform the Company of any securities trading in the Company.

The directors have made disclosure that they have no material margin lending terms in relation to their holding of Company securities that could impact on the Company’s share price.

Announcements made to the ASX by the Company are published on the Company’s website.

The Company updated its Continuous Disclosure policy during the year. A copy of the updated policy is published on the Company’s website

pRinciple 6: sHAReHolDeR communicAtion

communications strategy

The Company aims to keep shareholders informed of the Company’s performance and all major developments in an ongoing manner. Information is communicated to shareholders through:

the annual report which is published on the Company’s website and distributed to shareholders where specifically requested;
the half-year shareholders’ report which is published on the Company’s website and distributed to shareholders where specifically requested, containing summarised financial information and a review of the operations during the period since the annual report; and
other correspondence regarding matters impacting on shareholders as required.

All material documents that are released publicly are made available on the Company’s web site.

Shareholders are also encouraged to participate in the Annual General Meeting to ensure a high level of accountability and identification with the Company’s strategies and goals. Important issues are presented to shareholders as separate resolutions.

Availability of auditor at AGm

The senior engagement partner (or his representative) of the Company’s external auditor, KPMG, attends the Company’s annual general meetings and is available to answer questions from shareholders about the audit. The Chairman advises the shareholders of this at the commencement of each annual general meeting.

pRinciple 7: RisK mAnAGement

oversight of the risk management function

The Company places a high priority on risk management and identification throughout the Group’s operations and regularly reviews its adequacy in this regard. Under the guidance of the Audit and Compliance Committee, a comprehensive risk control program has been developed which includes legislative compliance, property protection and health, safety and environment audits using risk assessors, self audits, engineering and professional advisers.

The Company has a qualified Compliance and Risk Manager who oversees the design and implementation of the risk control program, monitors performance and develops appropriate programs to enhance awareness and compliance. These programs include training for employees, using both internal and external experts. Regular review meetings are held with divisional general managers and senior personnel

to provide guidance and strategies for implementation of risk mitigation measures in their businesses.

The Group Compliance and Risk Manager reports in writing to the Board each month and personally to meetings of the Audit and Compliance Committee and supervises not only the six-monthly sign off process but also the follow up of any non-compliances or identified areas requiring further training or risk management.

24 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

Corporate Governance Statement

for the year ended 31 March 2011

pRinciple 7: RisK mAnAGement

internal financial controls

The Company has an established internal audit function under the control of the Group Compliance and Risk Manager. Internal audits are carried out in regular consultation with the external auditors but are independent of them.

The Chief Financial Officer reports in writing and personally to each Board meeting, attends all meetings of the Audit and Compliance Committee and provides a written report to that Committee.

certification of risk management controls

In conjunction with the certification of financial reports under Principle 4, the Managing Director and Chief Financial Officer state in writing to the Board each reporting period that:

the statement is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board.
the Company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects.

The statement from the Managing Director and Chief Financial Officer is based on a formal sign off framework established throughout the Company and reviewed by the Audit and Compliance Committee as part of the six-monthly financial reporting process.

The Company’s Risk Management Policy and internal compliance and control system was updated during the year and is available on the Company’s website.

pRinciple 8: RemuneRAtion

The Remuneration Committee of the Board of Directors is responsible for reviewing and recommending compensation arrangements for the directors, the chief executive officer and the senior management team. The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and management team. Executives, other than the non-executive directors, are given the opportunity to receive their base remuneration in the form of cash and non-cash benefits. To assist in achieving these objectives, the Company’s remuneration policy links the nature and amount of executive directors’ and senior executives’ remuneration to the Company’s financial and operational performance. All key senior executives have the opportunity to qualify for participation in the Company’s Short Term Incentive (STI) and Long Term Incentive (LTI) Plans which currently provide benefits where specified performance criteria are met.

Key executives are those who are directly accountable and responsible for the operational management and strategic direction of the Company and the consolidated entity.

Remuneration committee

The Board has an established Remuneration Committee, comprising three independent non-executive directors with an independent chairman.

Names of members and their attendance at meetings of the Committee are set out in the Directors’ Report.

The Remuneration Committee Charter was updated during the year and is available on the Company’s website.

structure of remuneration

key executive of the Company and the consolidated entity having responsibility for its operational performance for the financial year are disclosed in the ‘Remuneration Report’ section of the Directors’ Report. The current non-executive directors’ fee pool of $950,000 (inclusive of statutory superannuation) was last approved by shareholders at the 2010 AGM. Shareholders will be asked to adopt, as a non-binding vote, the Remuneration Report as contained in the Annual Report for the financial year ended 31 March 2011.

Directors’ retirement benefits

There are no Directors’ retirement benefits other than statutory superannuation. Details are set out in the ‘Remuneration Report’ section of the Directors’ Report.

share-based plans

The Remuneration Committee is responsible for reviewing recommendations with respect to issues or grants under the Company’s share-based plans. Directors approve issues or grants under the plans only after being satisfied that this is in accordance with the terms of shareholders’ approval.

employee share plan

There were no new issues of shares under the plan during the year.

long term incentive plan

Shareholders approved the Company’s Long Term Incentive Plan (LTIP) at the 2008 AGM, effective for the initial three year period commencing 1 April 2008. Under the plan, key employees may be granted conditional performance rights to receive ordinary shares in the Company at no cost to the employees (or in limited cases, to receive cash-settled awards). During the financial year 2010-11, there were 47,110 Performance Rights granted under the Company’s LTIP, of which 10,676 Performance Rights were granted to the Managing Director, Greg Kilmister in accordance with terms approved at the 2010 AGM.

The structure of non-executive directors’ remuneration and that of executives is set out in the ‘Remuneration Report’ section of the Directors’ Report.

Details of the nature and amount of each element of the remuneration of each director of the Company and each

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

Corporate Social Responsibility

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Campbell Brothers is committed to environmental sustainability practices across its global operations and to making positive contributions to the communities we belong to.

opeRAtion sustAinABilitY

During 2010/11 we progressed our key environmental awareness and community initiative, Operation Sustainability. Launched during 2009/10, it has provided direction to all Campbell Brothers businesses as they progress their environmental sustainability initiatives and community work.

Operation Sustainability’s numerous programs are already delivering outcomes. It is successfully acting as a rallying point for our businesses and is generating a huge response to our ‘call to action for environmental sustainability’.

Our businesses and staff are enthusiastically participating in environmental and community programs.

The benefits of these programs are multifaceted, including:

Reduced impact on the environment
Economic savings due to reductions in resource usage
Enhanced corporate image
Establishment of a leadership position through our setting an example for other businesses and clients
Improved staff morale through their involvement in environmental improvement programs.

The inclusion of “Environmental Sustainability” into the minimum Health Safety and Environment standards has ensured all our businesses demonstrate compliance to the requirements of the Environmental sustainability goal. This means businesses are required to measure their environmental impact and demonstrate reduction strategies.

eneRGY initiAtiVes

A priority of Operation Sustainability is to address the biggest issues first. We are focusing on the greatest energy consuming sites and activities as well as the biggest waste producers and their most significant waste streams. Lessons learnt from these programs will be used across are sites wherever sustainability opportunities are present.

26 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

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electRicitY sAVinGs

Benefits already delivered include identification of businesses that are major energy consumers. One business undertook an energy audit and found that 73% of their greenhouse gas emissions were due to electricity consumption. By employing a number of electricity-saving strategies, the business is showing electricity reductions of 25-28% that have been achieved without any impact on production capacity. Successes such as this will be replicated by other businesses where possible.

Heating ventilation and air conditioning (HVAC) have been identified as major energy users for the laboratory businesses in both the northern and southern hemispheres. Strategies are being employed to reduce electrical consumption associated with HVAC, including timer switches, better thermostat control, reduced fume cupboard extraction of conditioned air and better insulation and sealing of buildings.

Some businesses, such as the Minerals laboratory in Timmins, North America, are working successfully with local governments in energy reduction programs and receiving grants to install energy efficiency equipment.

All of these initiatives are reducing energy consumption and, in turn, energy costs with no negative impact on the business.

wAste mAnAGement

Waste recycling and reduction has been a major focus of our businesses throughout the year. Recycling of paper and cardboard are common place with a number of businesses moving toward electronic records and invoicing to eliminate the production of paper-based products in the first instance.

Work on key waste streams continues. The Tribology Division has instituted waste recovery measures for oil and plastic from clients’ samples. In some of the North American sites these measures generate additional income, in others they are cost neutral and avoid contributing tonnes of waste to land fill.

The Minerals Division continues to focus on waste separation, ensuring clean fill can be disposed of cost effectively while reducing lead waste.

Solvent recycling is the major activity for the Environmental Division, while the Industrial Division has established recycling contracts with scrap metal contractors to avoid sending metal to land fill, as well as recovering developing and fixing solutions used in the radiography process.

climAte cHAnGe Response

We are advancing the collection of data on our energy usage for our greenhouse gas reporting requirements in Australia. Apart from data on electricity usage, work has been undertaken to calculate other greenhouse producing sources such as gas, diesel and waste production.

Although not required to meet regulatory reporting requirements, we are committed to continuing the pursuit of carbon reduction strategies. Campbell Brothers sees the effort as not only good for the environment but ultimately good for business.

communitY suppoRt

During the year, a number of our businesses were involved in volunteer and charity work.

Yet again we responded to the call to assist in disaster events - the earthquakes in Haiti and in Christchurch, New Zealand and floods in Brisbane, Australia. In all instances, staff from the Campbell Brothers businesses joined together to donate money or supplies to those in the community most affected by the disasters.

Our response to community needs is continually demonstrated by fund raising and volunteering for a wide spectrum of charities and causes. A number of businesses have sponsored children in under-developed countries as well as donating and providing charity work in their local community. In some cases our businesses also invite our clients to participate with us in community volunteering.

Some specific businesses, such as ALS Environmental, also use their analytical skills to assist in the local community. We help with projects such as assisting school and university students and teachers to undertake water sampling in local creeks.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

Organisational Development

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During the year, our Organisational Development program focused on the key project areas of Learning, Efficiency and Diversity.

We have introduced a new, global, online learning system for our staff, increased participation in our leadership program and completed efficiency projects.

leARninG

Acceleration of employee learning was a key project in 2011 with the global roll out of the online Pulse learning management system, including a new Campbell Brothers Global Induction program.

We now offer significantly improved learning opportunities to all staff globally.

Pulse provides an online learning platform and currently hosts more than 110 online courses on a range of Technical, Core Skills, Health Safety & Environment and Leadership programs.

Many courses are authored in house, enabling us to operate a global learning program in a cost-efficient manner. We also offer the acclaimed Harvard “ManageMentor” courses online in English and Spanish.

The global induction program is offered in four languages to assist all new personnel, including those in our newly acquired companies. Further language versions are planned.

These learning programs continue to unite our global business and reinforce our Core Values. The result is a refreshed culture which provides a solid foundation for our future and with learning now part of our daily vernacular.

leADeRsHip

As part of our Learning initiatives, the Executive Profiling Campaign (EPC) became truly global during the year with the inclusion of Europe. Membership of the program also doubled during the year.

The EPC assists our executive team to assess, develop and leverage internal

talent for our ongoing operations as well as special projects and acquisitions.

Learning is contextualized to each region and continues to deliver internal promotions, engagement and retention of our key talent.

efficiencY

Efficiency projects were completed during the year and, together with additional projects now underway, are improving our team’s effectiveness.

We focused on process streamlining and automation, enabling us to consolidate information management. Our systems are scalable for future growth.

Implementation began of a new human resources and payroll system which will automate remuneration and incentives programs.

DiVeRsitY

Diversity continues to be a strong focus. Our Diversity Policy has been finalised and is based on the following key principles:

1 Treat others with respect, value differences and maintain privacy
2 Value diversity and it will bring opportunities to enhance our businesses
3 Women and minority cultural groups will not be disadvantaged in gaining employment and accessing the benefits and privileges that other persons in the company enjoy in their employment with CBL
4 Transparency will be exercised in all recruitment decisions from Board level to entry level
5 Workforce composition statistics will be reviewed annually to determine if there are any areas that warrant an increased focus on diversity, and
6 Public reporting of progress against CBL’s diversity objectives.

Metrics on the gender composition of the global workforce will be provided in the 2012 Annual Report.

focus on sweDen

Last year we showcased a key Diversity project in our Canadian ALS business. This year we have achieved success with a Family Friendly workplace award for ALS Scandinavia.

We received the award from Unionen, Sweden’s largest trade union in the private labour market and the largest white-collar union in the world. Unionen has about 500,000 members in 65,000 companies and has established a workplace award known as Tröstnappen (or golden dummy) in recognition of the challenges in combining parenthood with working life.

A requirement for nominating a workplace is that there is a collective agreement and a gender equality plan in place.

This year was the first ALS Scandinavia was nominated and we achieved the consolation dummy award in recognition of our working parental policy and comprehensive gender equality plan. Included in our policy is flexibility to give our staff the opportunity to work part time during parental leave and to have influence over their working hours.

28 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

Directors’ report (including remuneration report)	30	20. Property, plant and equipment	63
Proft and loss statement	41	21. Intangible assets	65
Statement of comprehensive income	42	22. Trade and other payables	66
Balance sheet	43	23. Investment property	66
Statement of changes in equity	44	24. Loans and borrowings	66
Statement of cash fows	45	25. Capital and reserves	68
Notes to the fnancial statements	46	26. Financial instruments	70
1. Reporting entity	46	27. Operating leases	73
2. Basis of preparation	46	28. Capital commitments	74
3. Signifcant accounting policies	46	29. Contingencies	74
4. Financial and capital risk management	53	30. Deed of cross guarantee	74
5. Determination of fair value	54	31. Parent entity disclosures	76
6. Operating segments	54	32. Consolidated entities	77
7. Other income	57	33. Reconciliation of cash fows from operating
8. Expenses	57	activities	79
9. Unusual items	57	34. Acquisitions of subsidiaries and non-controlling
10. Auditors’ remuneration	58	interests	80
11. Net fnancing costs	58	35. Key management personnel disclosures	82
12. Income tax expense	59	36. Non-key management personnel related party
		disclosures	84
13. Earnings per share	60
		37. Share-based payments	84
14. Cash and cash equivalents	60
		38. Events subsequent to balance date	86
15. Trade and other receivables	61
		Directors’ declaration	87
16. Inventories	61
		Audit report	88
17. Other current assets	61
		Lead auditor’s independence declaration	89
18. Investments accounted for using the equity method	62
19. Deferred tax assets and liabilities	62

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011 29

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Directors’ report

foR tHe YeAR enDeD 31 mARcH 2011

The directors present their report together with the financial report of the Group, comprising Campbell Brothers Limited (“the Company”) and its subsidiaries, for the year ended 31 March 2011 and the auditor’s report thereon.

1. DiRectoRs

The directors of the Company at any time during or since the end of the financial year are:

GeoffReY j mcGRAtH MIIE. Chairman

GReG f KilmisteR B Sc (Hons), FRACI, MAIG Managing Director and Chief Executive Officer.

neRolie witHnAll BA, LLB, FAICD

mARtin D KRiewAlDt BA, LLB (Hons), FAICD

RAYmonD G Hill FAICD

BRuce R BRown B Com, AAUQ, FAICD

melVYn j BRiDGes B AppSc, FAICD

Full directors’ profiles are set out on page 18 of the Annual Report.

2. compAnY secRetARY

tim mullen B Bus, M Com Law, FCPA, FCIS, FCLA

Mr Mullen was appointed Company Secretary of Campbell Brothers on 27 February 2007. He is a Chartered Secretary and a member of CPA Australia. He has a background in financial and commercial management and company secretarial practice. He has been with Campbell Brothers for fourteen years. His main responsibilities are corporate governance and legal management of the Group.

3. pRincipAl ActiVities

The principal activities of the Group during the course of the financial year were:

Provision of technical testing and inspection services specifically supporting mining and mineral exploration, commodity certification, environmental monitoring, equipment maintenance, food and pharmaceutical quality assurance and industrial operations.
Manufacture and distribution of cleaning agents and chemicals for both domestic and industrial customers.
Distribution of non-food consumables to the healthcare, building services, hospitality and leisure industries.

During the year the Group:

Expanded its testing service capabilities by purchasing Ammtec Limited, a leading metallurgical and mineral testing consultancy company based in Western Australia; and
Divested its Cleantec chemical and cleaning solutions business.

Otherwise there were no significant changes in the nature of the activities of the Group during the year.

4. ReView AnD Results of opeRAtions

net profit

Directors are pleased to report that the Group achieved a record financial result in the year to March 2011. Underlying net profit after tax (attributable to equity holders of the Company and excluding unusual items) was $132.2 million for the year in line with recent guidance provided to the market. The result was up 75.6% on the previous year and was generated from revenue of $1,108.3 million (up 34.3% on the year to March 2010). Net profit after tax attributable to equity holders of the Company was $132.4 million (refer to summary below).

This record performance was achieved despite the softening effect of a stronger Australian dollar on the translation of foreign earnings, and reflects both a recovery in business conditions and the Group’s preparation ahead of the recovery. Investments in strategic acquisitions and increased operational capacity during the previous year established a platform from which the Group was able to take advantage of a significant growth in business volumes. In particular the recovery in global mineral exploration activity lifted demand for the analytical testing services provided by ALS Minerals division, which delivered a 63% increase in revenue over the previous year.

ALS Environmental and ALS Coal divisions recorded very strong revenue growth during the year. ALS Industrial division (formed following the acquisition of industrial services company PearlStreet in January 2010) generated revenue in excess of $112 million in its first full year with the Group.

Unusual items were recorded in the profit and loss statement in respect of two operating divisions – a gain on the divestment of the Cleantec chemical and cleaning solutions business unit from Campbell Chemicals division and impairments of goodwill and other assets in the under-performing Reward Distribution division. (Refer note 9 to the financial statements.)

In accordance with revised AASB3 Business Combinations which applied to the Group from 1 April 2010, transaction costs associated with acquisitions amounting to $2,840,000 (pre-tax) have been expensed in the profit and loss statement during the year. In prior periods such costs were included as part of the cost of acquisition. (Refer note 3(i) to the financial statements.)

Directors have declared a final partly franked (50%) dividend for the year of 75 cents per share (2010: 55 cents partly franked) bringing the total partly franked (50%) dividend for the year to $1.40 per share (2010: $1.00 partly franked).

The consolidated result is summarised:

The consolidated result is summarised:
	this Year Last Year $’000 $’000
Revenue Underlying proft before fnancing costs, income tax and unusual items Net fnancing costs Income tax expense relating to underlying proft before unusual items underlying proft before unusual items Net loss attributable to non-controlling interests before unusual items underlying proft before unusual items attributable to equity holders of the company	1,108,329 825,533
	196,120 116,983 (10,244) (11,121) (53,732) (30,971)
	132,144 74,891 64 410
	132,208 75,301

30 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Directors’ report

foR tHe YeAR enDeD 31 mARcH 2011

4. ReView AnD Results of opeRAtions continued

net profit continued

net proftcontinued
	this Year Last Year $’000 $’000
Unusual items net of income tax attributable to equity holders of the company (refer note 9 to the fnancial statements): Gain on sale of chemical and cleaning solutions business Write-down to recoverable amount goodwill and inventories in Reward Distribution segment Income tax effect Effect of unusual items after income tax Proft attributable to equity holders of the company Basic earnings per share Diluted earnings per share	8,654 - (9,405) - 897 -
	146 -
	132,354 75,301
	$2.03 $1.29 $2.03 $1.29

DiVisionAl contRiButions

Contributions from business divisions are as follows:

	2011	2010	Increase
Als minerals	$’000	$’000
Revenue	334,477	204,984	63.2%
Segment contribution	111,796	53,344	109.6%
Margin (segment
contribution to revenue)	33.4%	26.0%

The ALS Minerals division performed very well in buoyant market conditions during the year to March 2011. Capital investments made during the previous twelve months paid off as increased capacity was deployed to meet the significant increase in demand for analytical services during the current financial year. The division enjoyed strong growth in all regions, particularly in North America and Africa. The November 2010 acquisition of Ammtec Limited added a valuable suite of metallurgical and consultancy services to the division’s capabilities.

Contribution as a percentage of revenue improved significantly across the division, demonstrating a disciplined management of variable costs during a period of strong growth in business volumes.

	2011	2010
Als environmental	$’000	$’000	Increase
Revenue	308,281	245,205	25.7%
Segment contribution	66,195	43,798	51.1%
Margin (segment
contribution to revenue)	21.5%	17.9%

ALS Environmental delivered a strong result for the year, securing important government project work in a number of countries. The Australian region now includes an expanded presence in the Australian water services sector (following the acquisition of Ecowise Environmental in November 2009).

Margin performance improved in all regions, representing an ability to contain variable costs while growing the business and integrating acquisitions.

	2011	2010
Als coal	$’000	$’000	Increase
Revenue	73,023	61,755	18.2%
Segment contribution	17,151	15,034	14.1%
Margin (segment
contribution to revenue)	23.5%	24.3%

Despite a series of major weather events affecting exploration activity and export volumes across all operating regions, ALS Coal division delivered solid increases in both revenue and contribution in the year to March 2011. Inconsistent workflows resulted in a slightly lower contribution margin on revenue.

During the year, the Group acquired a property at Richlands (Brisbane) to replace its Riverview (Ipswich) operation. The facility has undergone a complete refit and will commence operations early in the new financial year. It will offer significantly increased capacity and technological capabilities and will function as the headquarters for the Australian coal operations.

	2011	2010	Increase/
Als tribology	$’000	$’000	(Decrease)
Revenue	30,338	29,826	1.7%
Segment contribution	4,009	4,643	(13.7%)
Margin (segment
contribution to revenue)	13.2%	15.6%

A stronger Australian dollar softened the translation of revenue and contribution earned during the year by the North American region which dominates ALS Tribology.

While contribution margin eased slightly during the year, management expects the improvement recorded in the second half to continue into the new financial year.

	2011	2010
	$’000	$’000	Increase
Als industrial	(12 months)	(3 months)
Revenue	112,034	19,823	n/a
Segment contribution	12,608	1,299	n/a
Margin (segment
contribution to revenue)	11.3%	6.6%

ALS Industrial division was formed following the acquisition of PearlStreet in January 2010. It performed ahead of expectations in all regions during the financial year and continues to be the leader in its field, providing asset care services to the energy, resources and infrastructure sectors.

The division’s strong revenue growth was supported by sound efficiency measures in delivering an improved contribution margin.

	2011	2010	Increase/
campbell chemicals	$’000	$’000	(Decrease)
Revenue	130,322	151,799	(14.1%)
Segment contribution
(excluding unusual items)	7,386	8,246	(10.4%)
Margin (segment
contribution to revenue)	5.7%	5.4%

Despite the disruption caused by the divestment of the Cleantec business unit in December 2010, Campbell Chemicals division recorded an improved contribution margin, realising benefits from a stronger Australian dollar and operational efficiencies. The Panamex trading operation generated improved gross sales margins in its key regions.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

foR tHe YeAR enDeD 31 mARcH 2011

Directors’ report

4. ReView AnD Results of opeRAtions continued

net proftcontinued
	2011	2010	Increase/
Reward Distribution	$’000	$’000	(Decrease)
Revenue	123,869	117,785	5.2%
Segment contribution
(excluding unusual items)	(1,811)	3,424	(152.9%)
Margin (segment
contribution to revenue)	(1.5%)	2.9%

The Reward Distribution hospitality supplies business delivered a disappointing result for the year to March 2011, contributing a loss from slightly higher revenue. The majority of the loss was generated during the first half of the year, after which a revised approach to product markets, brands and the division’s operational cost base resulted in a break-even contribution for the second half. Trading conditions remain challenging, characterised by difficult tourism and hospitality markets, firm price competition and the strengthening Australian dollar.

5. DiViDenDs

Dividends paid or declared by the Company since the end of the previous financial year are:

previous fnancial year are:
Cents per Franked share amount (cents)	Total $’000
Ordinary dividends declared and paid during the year: Final 2010, paid 1 July 2010 55.0 27.5 Interim 2011, paid 21 December 201065.0 32.5 Total amount Ordinary dividend declared after the end of the fnancial year: Final 2011, to be paid 1 July 2011 75.0 37.5	34,628 43,524
	78,152
	50,628

The financial effect of this dividend has not been brought to account in the financial statements for the year ended 31 March 2011 and will be recognised in subsequent financial reports. The franked components of all dividends paid or declared since the end of the previous financial year were franked based on a tax rate of 30%.

6. stAte of AffAiRs

Changes in the state of affairs of the Group during the financial year resulted from its continued strategy of business expansion and diversification in testing and inspection services. Details are as follows:

The Group expanded its testing service capabilities through the November 2010 acquisition of Ammtec Limited a leading metallurgical and mineral testing consultancy company based in Western Australia.
75% of the consideration paid for Ammtec was satisfied by the issue of 3,491,408 shares in the Company in November and December 2010.
The Company divested its Cleantec chemical and cleaning solutions business in December 2010.

In the opinion of the directors there were no other significant changes in the state of affairs of the Group that occurred during the financial year under review not otherwise disclosed in this report or the consolidated financial statements.

7. RemuneRAtion RepoRt – AuDiteD

Remuneration policies

overview of remuneration policies

The Board recognises that the continued growth and strong financial performance of the Group depends upon its ability to motivate and retain highly skilled executives in a competitive environment. To address this need the Board has established a Remuneration Committee, which is guided by a Remuneration Committee Charter. The Charter determines the terms of reference for the Remuneration Committee which includes the management of the Group’s Board and Executive Remuneration Policy. Given the changes in the global economy the Committee undertook a complete review of its guiding documents including the Committee’s Charter, the Board and Executive Remuneration Policy and the long and short term incentive programs during 2009, 2010 and again in 2011 to ensure alignment with Australian legislative changes.

The Remuneration Committee of the Board of Directors is responsible for reviewing and recommending compensation arrangements for the directors, the Managing Director and Chief Executive Officer and other key management personnel. The Remuneration Committee assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum shareholder benefit from the retention of a high quality Board and management team.

Executives are given the opportunity to receive their base emolument in the form of cash and non-cash benefits. It is intended that the manner of payment chosen will be optimal for the recipient without creating additional cost for the Group. The Remuneration Committee obtains independent advice on remuneration strategy and the appropriateness of remuneration packages given trends in comparable companies locally and internationally.

The Committee will continue to consider the ability of the Group to fund changes to remuneration packages in the short and longer term when determining future executive compensation packages.

independence of the Remuneration committee

The Remuneration Committee comprises three independent nonexecutive directors.

non-executive Directors’ Remuneration framework

Total remuneration for all non-executive directors, last voted upon by shareholders at the 2010 AGM was to not exceed $950,000 per annum (including Superannuation Guarantee of 9%).

Non-executive directors do not receive equity based compensation or any performance based remuneration. Directors’ fees cover all board activities including membership of board committees. In considering the level of remuneration for non-executive directors, the Remuneration Committee takes into account independently sourced survey data and other information about the level of fees and benefits being paid to non-executive directors by comparable companies.

The current fee structure is effective from 1 August 2010 and is outlined below:

chairman of the Board: $200,000 (covers all responsibilities as Chairman of the Board and the Remuneration Committee and member of the Audit and Compliance Committee)

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Directors’ report

foR tHe YeAR enDeD 31 mARcH 2011

7. RemuneRAtion RepoRt – AuDiteD continued

non-executive Directors’ Remuneration framework continued

other non-executive directors:

Board membership: $100,000 Committee membership:

	Audit and Compliance	Remuneration
	Committee	Committee
	$	$
Chairman	25,000	n/a *
Member	12,500	2,500

currently filled by the Chairman of the Board

The above amounts are the remuneration paid annually and are exclusive of mandatory superannuation contributions payable by the Group on behalf of the directors.

executive Director and executives’ Remuneration framework

The Board is committed to delivering fair and equitable remuneration and reward practices that motivate executives, taking into account internal and external relativities and the Group’s ability to meet commercial objectives.

Pursuant to the Board and Executive Remuneration Policy the Group’s reward structure for invited executives comprises the following elements:

Fixed remuneration comprising pre-determined cash, superannuation / pension contributions and benefits.
Variable (“at risk”) remuneration comprising incentive payment opportunities with a short term (annual) and long term (three year) focus.

The Policy aims to ensure that:

Rewards are competitive in motivating, attracting and retaining executive talent to deliver continued and sustainable growth in total shareholder returns.
Executives receive a level of reward that reflects the Group’s performance and is also commensurate with the executive’s performance, contribution and experience.
Remuneration is aligned with and supports the Group’s business strategies and capability requirements.

fixed remuneration

Fixed remuneration consists of base remuneration (which is calculated on a total cost basis and includes any FBT charges or equivalent related to employee benefits including motor vehicles), as well as employer contributions to superannuation funds.

Remuneration levels are reviewed annually by the Remuneration Committee through a process that considers individual, business unit, and overall performance of the Group and market practices.

In addition external consultants provide analysis and advice to ensure key management personnel remuneration is competitive in the market place.

The Hay Group were appointed by the Board in early 2011 to provide market information to be used in assessment of the CEO’s and key management personnel’s remuneration. Comparator groups for benchmarking were chosen on the basis of similar market capitalisation and employee numbers.

All executive remuneration decisions are made at Board level, upon recommendation by the Remuneration Committee. Remuneration levels are based on performance of the executives and are aligned to market information including that provided by Hay Group.

At risk remuneration

The objective of variable “at risk” remuneration is to encourage exceptional performance, to focus effort on key business drivers, and to reward performance and contribution. To this end senior executives may be invited to participate in the Group’s Incentive Schemes providing Short Term (‘STI’) and Long Term (‘LTI’) Incentives approved by the Board. The incentives available under this scheme are at risk and contingent upon the achievement of defined financial and other individual performance hurdles that must be delivered during the period.

The STI plan is an at-risk cash bonus scheme for which the incentive period runs until the end of each financial year. Performance hurdles for individual executives are determined annually and ratified by the Remuneration Committee. Financial performance targets relate to either the Group, or business unit results relevant to each individual. Individual performance targets relate to key objectives (KPI’s) that must be delivered by the executive during the period.

Executives’ STIs may not exceed 60% as a proportion of the individual executive’s total fixed remuneration as at the July review date. Typically they range between 15% and 45% as individually determined by the Remuneration Committee.

STI plan payments are subject to final approval by the Board (based on Remuneration Committee recommendation) which has the ultimate discretion over payment.

The Group runs an equity-based LTI plan which operates to provide invited executives a secondary at-risk performance incentive which is based on performance rights. In jurisdictions where securities legislation prevents economic implementation “phantom rights” (cash-settled) are provided.

The plan runs over a three year performance period and the rights vest only if Earnings Per Share (“EPS”) or relative Total Shareholder Return (“TSR”) hurdles are achieved by the Group over the specified performance period. 50 percent of each employee’s rights are subject to EPS measurement and 50 percent are subject to the TSR measurement. The performance hurdles and vesting proportions for each measure are as follows:

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compound annual diluted eps growth proportion of performance rights that may be exercised if eps growth hurdle is met
2008 issue 2009 issue 2010 issue
Less than 13% per annum 0% 0% 0%
13% per annum 25% 25% 25%
Straight line vesting between Straight line vesting between Straight line vesting between
Between 13% and 20% per annum
25% and 50% 25% and 50% 25% and 50%
20% or higher per annum 50% (i.e. 50% of total grant) 50% (i.e. 50% of total grant) 50% (i.e. 50% of total grant)
Performance period 1 April 2008 – 31 March 2011 1 April 2010 – 31 March 2012 1 April 2010 – 31 March 2013
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tsR of campbell Brothers ltd relative proportion of performance rights that may be exercised if tsR hurdle is met
to tsRs of comparator companies 2008 issue 2009 issue 2010 issue
Less than the 50th percentile 0% 0% 0%
50th percentile 25% 25% 25%
Between 50th percentile and Straight line vesting between Straight line vesting between Straight line vesting between 25%
75th percentile 25% and 50% 25% and 50% and 50%
75th percentile or higher 50% (i.e. 50% of total grant) 50% (i.e. 50% of total grant) 50% (i.e. 50% of total grant)
Comparator companies international companies: international companies: international companies:
Bureau Veritas (France), Bureau Veritas (France), Bureau Veritas (France),
Eurofins (France & Germany), Core Laboratories (USA), Eurofins Core Laboratories (USA), Eurofins
Intertek (UK), SGS (Switzerland) (France & Germany), Intertek (France & Germany), Intertek (UK),
(UK), SGS (Switzerland), SGS (Switzerland),
Australian companies: Australian companies: Australian companies:
Ausenco, Boart Longyear, Ausenco, Boart Longyear, Ausenco, Boart Longyear, Cardno,
Cardno, Clough, Coffey Cardno, Clough, Coffey Clough, Coffey International,
International, MacMahon International, MacMahon Industrea, MacMahon Holdings,
Holdings, Monadelphous, Orica, Holdings, Monadelphous, Orica, Monadelphous, Orica, Sedgman,
Servcorp, Transfield Services, Servcorp, Transfield Services, Servcorp, Transfield Services,
WorleyParsons. WorleyParsons. WorleyParsons.
Performance period 1 April 2008 to 31 March 2011 1 April 2009 to 31 March 2012 1 April 2010 to 31 March 2013
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The cumulative performance hurdles are assessed at the end of the three year period and the “at risk” LTI component becomes exercisable or is forfeited by the executive from 1 July following the end of each period. New offers of participation are ratified by the Remuneration Committee. LTI plan rules prohibit those who are granted performance rights from entering into arrangements that limit their exposure to share price decreases.

consequences of performance on shareholders’ wealth

In considering the Group’s performance and creation of shareholder wealth, the Remuneration Committee has regard to the following performance indicators in respect of the current financial year and the previous four financial years.

Year ended 31 March	2011	2010	2009	2008	2007
	$’000	$’000	$’000	$’000	$’000
Proft attributable to equity holders of the company	132,354	75,301	106,209	76,819	59,066
Proft (excluding unusual items) attributable to equity holders of the Company	132,208	75,301	106,209	71,270	51,648
Dividends paid or payable	94,152	62,780	52,806	49,456	36,072
Share price	$46.35	$29.55	$13.60	$25.00	$22.10

The strategy of the Remuneration Committee in maintaining the Group’s Board and Executive Remuneration Policy is to align growth in shareholder value with reward provided to the executive. This has both a short and long term (three years) focus.

The primary performance hurdles for executives under the STI plan are:

Underlying NPAT (net profit after tax) targets in relation to the Group or EBIT (earnings before interest and tax) targets where these are in relation to specific business units.
The STI plan provides stretch financial targets for executives based on NPAT or EBIT and ROS (return on sales) criteria which executives must achieve in order to receive 50 - 95% of their “at risk” STI.
In addition to financial hurdles, executives have 5 - 30% of their STI payments based on achievement of individual KPIs. Individual KPIs relate to measurement of performance in some of the following areas – Health Safety & Environment and risk management, strategic plan delivery, customer service, leadership and team contribution, workforce capability and succession planning. The KPIs chosen are tailored to the executive’s role and business unit plan requirements. In order for each KPI to align with corporate financial targets and strategic objectives, and to be meaningful as an incentive, each KPI must represent continuing high performance.

The financial performance hurdles governing the operation of both the STI and LTI plans are ratified independently by the Board based on a Remuneration Committee recommendation. The LTI hurdles are developed with advice from independent advisers.

The Remuneration Committee considers that the above performance-linked remuneration structure is generating the desired outcome.

other benefits

Executive directors and senior executives can receive their base remuneration as a proportion of their total employment cost as non-cash benefits, under the terms and conditions of their appointment. Non-cash benefits may typically include the provision of items which may be taxed on a concessional basis for FBT purposes (e.g. the provision of motor vehicles) and the Group pays fringe benefits tax on these benefits. Directors and executives are also entitled to salary sacrifice base remuneration as additional superannuation contributions.

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service contracts

The Group has not entered into any formal service contracts with its non-executive directors. Executives have appropriate contractual arrangements. In the event of termination without cause, the Group is required to pay between three and twelve months of salary.

Directors’ and executive officers’ remuneration (consolidated)

Details of the nature and amount of each major element of remuneration of each director of the Company and each of the named Company executives and relevant Group executives who receive the highest remuneration are set out below. The Group’s practice is to review salaries for directors and executives as of 1 July every year.

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post-
short-term long-term employment
Non- Value of Super-
Salary & STI cash monetary share-based LTI cash Other annuation
fees bonus (a) benefits (b) awards (c) bonus (d) long term and pension Termination Total
In AUD $ $ $ $ $ $ benefits $ benefits $
Directors
Non-executive directors
Mr G J McGrath 2011 182,500 - - - - 612 16,424 - 199,536
2010 147,500 - - - - 618 13,275 - 161,393
Mrs N Withnall 2011 113,333 - - - - 612 10,200 - 124,145
2010 90,000 - - - - 618 8,100 - 98,718
Mr M D Kriewaldt 2011 103,333 - - - - 612 9,300 - 113,245
2010 80,000 - - - - 618 7,200 - 87,818
Mr R G Hill 2011 100,833 - - - - 612 9,075 - 110,520
2010 77,500 - - - - 618 6,975 - 85,093
Mr B R Brown 2011 73,750 - - - - 612 25,253 - 99,615
2010 66,667 - - - - 618 6,000 - 73,285
Mr M J Bridges 2011 88,333 - - - - 612 7,950 - 96,895
2010 33,000 - - - - 310 2,970 - 36,280
Mr A J Love 2011 - - - - - - - - -
(retired 28 July 2009) 2010 22,500 - - - - 200 2,025 - 24,725
Executive director (e )
Mr G F Kilmister 2011 984,065 630,000 17,106 418,219 - 612 49,268 - 2,099,270
2010 900,000 200,000 19,571 98,240 130,000 618 50,000 - 1,398,429
Executives (e)
Mr B McDonald 2011 416,336 149,146 5,207 163,656 - 380 - - 734,725
2010 438,947 64,551 5,600 50,878 55,712 386 - - 616,074
Mr R Naran 2011 295,498 126,396 - 78,676 - 380 10,322 - 511,272
2010 291,790 58,268 6,048 27,568 - 386 7,266 - 391,326
Mr B Williams 2011 302,691 135,000 33,696 92,147 - 380 25,631 - 589,545
2010 236,606 60,000 32,844 29,554 50,000 386 21,294 - 430,684
Mr P McPhee 2011 331,805 100,000 - 94,228 - 380 29,862 - 556,275
2010 270,642 60,000 - 30,162 - 386 24,358 - 385,548
Mr P Jordan 2011 220,582 30,000 68 60,141 - 380 27,495 - 338,666
2010 192,661 35,000 526 17,988 37,933 386 17,339 - 301,833
Mr D Brown 2011 258,258 42,500 19,800 40,391 - 380 23,110 - 384,439
2010 240,550 30,000 19,800 4,842 16,571 386 21,650 - 333,799
Mr A Ross (f) 2011 151,823 n/a - - - 222 13,664 - 165,709
2010 n/a n/a n/a n/a n/a n/a n/a n/a n/a
Ms C Clements (g) 2011 98,508 - 8,125 - - 158 8,936 82,738 198,465
2010 222,936 15,000 19,500 3,039 - 386 20,064 - 280,925
Total Compensation: key 2011 3,721,648 1,213,042 84,002 947,458 - 6,944 266,490 82,738 6,322,322
management personnel 2010 3,311,299 522,819 103,889 262,271 290,216 6,920 208,516 - 4,705,930
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7. RemuneRAtion RepoRt – AuDiteD continued

Directors’ and executive officers’ remuneration (consolidated) continued

(a) STI cash bonuses are paid annually following the end of the preceding financial year. The grant date is tied to the performance appraisal which for the current year was completed by 31 March. The specific service and performance criteria are set out earlier in this report.
(b) Non-monetary benefits include payment of allowances, provision of other benefits such as motor vehicles, fringe benefits tax thereon and an amount representing commercial interest that would have been charged during the period on the executive’s outstanding employee loan balances owed to the Company had these loans not been interest free.
(c) The LTI Plan (equity based) was introduced in April 2008. Performance rights (both equity-settled and cash-settled) were granted in each of the years ended March 2009, 2010 and 2011 and are subject to vesting conditions over specific performance periods. Refer to note 37 for details. No performance rights vested during the years ended March 2009, 2010 or 2011. The fair value of performance rights granted during both years were calculated using Binomial Tree (EPS hurdle) and Monte-Carlo Simulation (TSR hurdle) valuation methodologies and allocated to each financial year evenly over the period from grant date to vesting date.
(d) LTI cash bonuses were paid over the three year period immediately following grant date which fell at the end of each three year performance appraisal period. The grant date for the final appraisal period was 31 March 2008. The LTI cash bonus plan was replaced by the equity-based scheme in April 2008 per (c) above.
(e) Refer to note 35 for role descriptions.
(f) Mr Ross commenced with the Group in August 2010.
(g) Ms Clements ceased employment with the Group in August 2010.

Analysis of bonuses included in remuneration

Details of the vesting profile of the short term and long term incentive cash bonuses awarded as remuneration to each of the named executives are detailed below:

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short term incentive long term incentive (c)
Included in % % Included in % %
executives remuneration vested forfeited remuneration vested forfeited
$ (a) (b) $ (a) (b)
Mr G F Kilmister 2011 630,000 100 - n/a n/a n/a
2010 200,000 70 30 130,000 100 -
Mr B McDonald 2011 149,146 90 10 n/a n/a n/a
2010 64,551 80 20 55,712 92 8
Mr R Naran 2011 126,396 100 - n/a n/a n/a
2010 58,268 89 11 n/a n/a n/a
Mr B Williams 2011 135,000 90 10 n/a n/a n/a
2010 60,000 92 8 50,000 100 -
Mr P McPhee 2011 100,000 67 33 n/a n/a n/a
2010 60,000 90 10 n/a n/a n/a
Mr P Jordan 2011 30,000 38 62 n/a n/a n/a
2010 35,000 83 17 37,933 100 -
Mr D Brown 2011 42,500 50 50 n/a n/a n/a
2010 30,000 71 29 16,571 33 67
Mr A Ross (d) 2011 n/a n/a n/a n/a n/a n/a
2010 n/a n/a n/a n/a n/a n/a
Ms C Clements (e) 2011 - - 100 n/a n/a n/a
2010 15,000 38 62 n/a n/a n/a
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(a) Amounts included in remuneration for the financial year represent the amounts that vested in the financial year based on the achievement of personal goals and satisfaction of specified performance criteria.
(b) The amounts forfeited are due to the performance or service criteria not being met in relation to the financial year.

(d) Mr Ross commenced with the Group in August 2010 and was not a participant in the STI plan during the year to March 2011.
(e) Ms Clements ceased employment with the Group in August 2010.

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proportion of performance related and equity based remuneration

Details of each of the named executives’ performance related and equity based remuneration as a proportion of their total remuneration is detailed below.

detailed below.	detailed below.	detailed below.
proportion of remuneration performance based %			Value of performance rights as a proportion of remuneration %
executives Mr G F Kilmister Mr B McDonald Mr R Naran Mr B Williams Mr P McPhee Mr P Jordan Mr D Brown Mr A Ross (a) Ms C Clements (b)
	2011	49.9	19.9
	2010	30.6	7.0
	2011	42.6	22.3
	2010	27.8	8.3
	2011	40.1	15.4
	2010	21.9	7.0
	2011	38.5	15.6
	2010	32.4	6.9
	2011	34.9	16.9
	2010	23.4	7.8
	2011	26.6	17.8
	2010	30.1	6.0
	2011	21.6	10.5
	2010	15.4	1.5
	2011	n/a	n/a
	2010	n/a	n/a
	2011	-	-
	2010	6.4	1.1

(a) Mr Ross commenced with the Group in August 2010 and was not a participant in the STI or LTI plans during the year to March 2011.

(b) Ms Clements ceased employment with the Group in August 2010.

performance rights over ordinary shares granted as compensation

Details of performance rights over ordinary shares in the Company that were granted as compensation to each key management person under the equity-based LTI Plan are as follows.

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number of rights Grant date Vesting date fair value per right at issue price used to
executives granted (a) (b) grant date (b) determine no. of rights
granted (b)
Mr G F Kilmister 2011 10,676 27 July 2010 1 July 2013 $25.06 $28.09
2010 29,703 24 Nov 2009 1 July 2012 $23.57 $19.19
2009 7,388 5 Aug 2008 1 July 2011 $24.16 $29.44
Mr B McDonald 2011 3,754 27 July 2010 1 July 2013 $25.06 $28.09
2010 9,207 1 Oct 2009 1 July 2012 $26.91 $19.19
2009 n/a n/a n/a n/a n/a
Mr R Naran 2011 3,907 27 July 2010 1 July 2013 $25.06 $28.09
2010 n/a n/a n/a n/a n/a
2009 2,112 3 Sept 2008 1 July 2011 $29.46 $29.44
Mr B Williams 2011 3,203 27 July 2010 1 July 2013 $25.06 $28.09
2010 5,712 30 Jun 2009 1 July 2012 $17.29 $19.19
2009 2,751 3 Sept 2008 1 July 2011 $29.46 $29.44
Mr P McPhee 2011 3,203 27 July 2010 1 July 2013 $25.06 $28.09
2010 5,811 30 Jun 2009 1 July 2012 $17.29 $19.19
2009 2,853 3 Sept 2008 1 July 2011 $29.46 $29.44
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7. RemuneRAtion RepoRt – AuDiteD continued

performance rights over ordinary shares granted as compensation continued

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(a) Performance rights granted to Mr Naran are cash-settled rights. Performance rights granted to all other executives named above are equity-settled rights.

(b) The issue price used to determine the number of rights offered in each year to all participants, including Mr Kilmister and other key management personnel, was the volume weighted average price of the Company’s shares during the twenty trading days following the announcement of the Group’s annual financial results. The grant dates and corresponding fair values per right in the above table have been determined in accordance with Australian Accounting Standards and are dependent on the dates on which individual executives are deemed to have received their offers to participate in the Plan. Fair values have been calculated using Binomial Tree (EPS hurdle) and Monte-Carlo Simulation (TSR hurdle) valuation methodologies.

(c) Mr Ross commenced with the Group in August 2010.
(d) Ms Clements ceased employment with the Group in August 2010.

All equity-settled performance rights refer to rights over ordinary shares in the Company and entitle an executive to ordinary shares on the vesting date, subject to the achievement of performance hurdles set out earlier in this report. The rights expire on termination of an executive’s employment prior to the vesting date or upon the failure of achievement of the performance hurdles.

All cash-settled performance rights expire on termination of an executive’s employment prior to the vesting date or upon the failure of achievement of the performance hurdles. The amount of cash payment is determined based on the volume weighted average price of the Company’s shares over the 20 trading days following the release of the Company’s full year results for the final year of each performance period.

All of the above rights carry an exercise price of nil. 1,711 performance rights originally issued on 3 September 2008 were forfeited upon termination of employment during the year. No rights were vested or exercised during the year.

8. enViRonmentAl ReGulAtion

The Group is committed to complying with environmental legislation, standards, and codes of practice relevant to the particular business in the areas in which it operates. The main chemical manufacturing facilities, located in Sydney and Melbourne, are regulated under State and local government legislation. Each site holds a current licence and or consent from the relevant environment protection authority or local council.

environmental management

As part of the Group’s compliance program, environmental matters are reported on monthly by all divisional managers. In addition, internal sign-offs are completed by all managers on a six-monthly basis, reporting on performance against relevant environmental legislation and key environmental risks in their area of operations. Apart from complying with local legal requirements each site location across the world operates under the corporate health safety and environment minimum standard which sets out 13 key standards including identification and management of key environmental risks, emergency planning, reporting environmental incidents, and conducting monthly audits.

The Group participates directly in national industry associations, namely ACCORD Australasia. ACCORD liaises with government authorities, reviews regulation and develops pro-active industry policies on relevant environmental issues.

initiatives

There were a number of environmental initiatives implemented during the year including:

The launch of new corporate standards for health, safety and environment which includes a specific standard for Environmental Sustainability;

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8. enViRonmentAl ReGulAtion continued

initiatives continued

ALS Environmental in Australia implemented energy saving initiatives at its Melbourne laboratory including modification of air conditioning units and upgrading its lighting to T5 efficient lighting, which resulted in 25% less energy consumption for the site;
ALS Tribology Division instituted waste recovery measures for oil and plastic from client’s samples. In some of the North American sites this process generates an income while other sites achieve neutral cost for the recovery project while reducing tones of waste going to land fill each year;
External environmental reviews were conducted on ALS coal testing facilities throughout Queensland and New South Wales.

performance against environmental compliance requirements

There were no material breaches of environmental statutory requirements and no fines, penalties or prosecutions launched against the Group during the year. Internal and external audits and internal reporting and monitoring have indicated a high level of compliance with site licence conditions, relevant legislation and corporate minimum standards.

			Audit and Compliance	Audit and Compliance	Remuneration	Remuneration
	Board	Meetings	Committee Meetings		Committee
				(1)	Meetings
	A	B	A	B	A	B
Mr G J McGrath	14	14	4	4	3	3
Mr G F Kilmister	14	14	-	-	-	-
Mrs N Withnall	14	14	4	4	-	-
Mr M D Kriewaldt	14	13	4	3	3	3
Mr R G Hill	14	13	4	3	-	-
Mr B R Brown	14	14	-	-	3	3
Mr M J Bridges	14	14	-	-	-	-

A – Number of meetings held during the time the director held office during the year
B – Number of meetings attended
(1) Although not members of the Audit & Compliance Committee, Messrs Brown, Bridges and Kilmister attend meetings of the Committee as permitted by the Committee’s Charter.

13. DiRectoRs’ inteRests

9. eVents suBseQuent to RepoRtinG DAte

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years.

10. liKelY DeVelopments

The Group’s objective during the next financial year will be to maximise earnings and investment returns across all the business units in its diversified portfolio.

11. DiRectoRs’ inteRests

The relevant interest of each director in the share capital of the Company as notified by the directors to the Australian Securities Exchange in accordance with section 205G(1) of the Corporations Act 2001 as at the date of this report is:

The relevant interest of each director Company as notifed by the directors Exchange in accordance with section 2001 as at the date of this report is:	in the share capital of the to the Australian Securities 205G(1) of the Corporations Act
	Ordinary shares
Mr G J McGrath	297,810
Mr G F Kilmister	153,481
Mrs N Withnall	2,559
Mr M D Kriewaldt	39,231
Mr R G Hill	14,000
Mr B R Brown	50,000
Mr M J Bridges	2,370

Refer to the Remuneration Report above for details of performance rights held by Mr Kilmister.

12. DiRectoRs’ meetinGs

The number of directors’ meetings (including meetings of committees of directors) and number of meetings attended by each of the directors of the Company during the financial year are;

indemnification

Under its Constitution, and by resolution of the Board, the Company has agreed to indemnify to the extent permitted by law and the Corporations Act 2001:

every person and employee who is or has been an officer of the Company or of a Group entity where requested to do so, including a director or secretary, against any liability (other than for legal costs) incurred by that person or employee as an officer of the Company or of a Group entity (including liabilities incurred by that person or employee as an officer of the Company or of a Group entity where the Company requested that person or employee to accept that appointment).
every person and employee who is or has been an officer of the Company or of a Group entity where requested to do so, including a director or secretary, against reasonable legal costs incurred in defending an action for a liability incurred by that person or employee as an officer of the Company or of a Group entity (including such legal costs incurred by that person or employee as an officer of the Company or of a Group entity where the Company requested that person or employee to accept that appointment).

insurance premiums

During the financial year the Company paid insurance premiums in respect of directors’ and officers’ liability and legal expense insurance contracts, for current and former directors and senior executives, including senior executives of its subsidiaries. The current directors are listed elsewhere in this report. The insurance relates to:

costs and expenses incurred by the relevant officers in defending proceedings, whether civil or criminal and whatever their outcome; and
other liabilities that may arise from their position, with the exception of conduct involving a wilful breach of duty or improper use of information or position to gain a personal advantage.

It is a condition of the policies that premiums paid and terms and conditions of the policies are not to be disclosed.

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Directors’ report

14. non-AuDit seRVices

During the year KPMG, the Company’s auditor, has performed certain other services in addition to statutory duties.

The Board has considered the non-audit services provided during the year by the auditor and in accordance with written advice provided by resolution of the Audit and Compliance Committee, is satisfied that the provision of those non-audit services during the year by the auditor is compatible with, and did not 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 have been reviewed by the Audit and Compliance Committee to ensure they do not impact the integrity and objectivity of the auditor; and
the non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for 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, KPMG, and its related practices for audit and non-audit services provided during the year are set out below. In addition, amounts paid to other auditors for the statutory audit have been disclosed:

	consolidated 2011 $ 2010 $
Audit services Auditors of the Company KPMG Australia: Audit and review of consolidated and company fnancial reports Audit of subsidiary’s fnancial report Other regulatory services Other KPMG member firms: Audit and review of fnancial reports Other auditors Audit and review of fnancial reports other services* Auditors of the company KPMG Australia Other assurance and investigation services Other KPMG member firms: Taxation services Other assurance services	451,000 399,860 45,000 55,000 4,200 - 383,352 338,710
	883,552 793,570 69,913 96,770
	953,465 890,340
	52,750 49,000 65,974 90,690 737 6,100
	119,461 145,790

Includes impact of acquisitions during the financial year.

15. leAD AuDitoR’s inDepenDence DeclARAtion

The Lead auditor’s independence declaration is set out on page 89 and forms part of the directors’ report for the financial year ended 31 March 2011.

16. RounDinG off

The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, amounts in the financial report and directors’ report have been rounded off to the nearest thousand dollars, unless otherwise stated.

Signed in accordance with a resolution of the directors:

==> picture [88 x 21] intentionally omitted <==

G j mcGrath Chairman Brisbane 24 May 2011

G f Kilmister Managing Director Brisbane 24 May 2011

40 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Profit and loss statement

foR tHe YeAR enDeD 31 mARcH 2011

In thousands of AUD Note	consolidated 2011 2010
Revenue from sale of goods Revenue from rendering of services Other income 7 Changes in inventories of fnished goods and work in progress Raw materials and consumables purchased Employee expenses Warehousing and distribution costs Amortisation and depreciation Selling expenses Administration and other expenses Share of net profts of associates and joint ventures accounted for using the equity method 18 proft before fnancing costs and income tax Finance income 11 Finance expense 11 net fnance expense proft before income tax Income tax expense 12 proft for the year Attributable to: Equity holders of the company Non-controlling interest proft for the year Basic earnings per share 13 Diluted earnings per share 13 Dividends per share 25	249,952 267,057 858,377 558,476
	1,108,329 825,533 10,941 2,088 (704) (6,335) (226,499) (211,730) (408,849) (290,631) (27,376) (25,699) (42,172) (39,944) (12,478) (8,812) (206,066) (129,154) 243 1,667
	195,369 116,983
	1,053 814 (11,297) (11,935)
	(10,244) (11,121)
	185,125 105,862 (52,835) (30,971)
	132,290 74,891
	132,354 75,301 (64) (410)
	132,290 74,891
	203.19c 129.06c 202.78c 128.89c
	$1.40 $1.00

The profit and loss statement is to be read in conjunction with the notes to the financial statements set out on pages 46 to 86.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011 41

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Statement of comprehensive income

foR tHe YeAR enDeD 31 mARcH 2011

In thousands of AUD Note	consolidated 2011 2010
proft for the year other comprehensive income Foreign exchange translation 25 Net gain/(loss) on hedge of net investments in foreign subsidiaries 25 Net gain/(loss) on cash fow hedges taken to equity 25 other comprehensive income for the year, net of income tax total comprehensive income for the year Attributable to: Equity holders of the company Non-controlling interest total comprehensive income for the year*	132,290 74,891
	(14,644) (29,162) (487) 7,447 2,040 2,806
	(13,091) (18,909)
	119,199 55,982
	119,263 56,392 (64) (410)
	119,199 55,982

All movements in comprehensive income are disclosed net of applicable income tax.

The statement of comprehensive income is to be read in conjunction with the notes to the financial statements set out on pages 46 to 86.

42 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Balance sheet

As At 31 mARcH 2011

In thousands of AUD Note	consolidated 2011 2010
Assets Cash and cash equivalents 14 Trade and other receivables 15 Inventories 16 Other 17 total current assets Receivables 15 Investments accounted for using the equity method 18 Investment property 23 Deferred tax assets 19 Property, plant and equipment 20 Intangible assets 21 Other investments total non-current assets total assets liabilities Bank overdraft 14 Trade and other payables 22 Loans and borrowings 24 Income tax payable Employee benefts total current liabilities Loans and borrowings 24 Deferred tax liabilities 19 Employee benefts Other total non-current liabilities total liabilities net assets equity Share capital 25 Reserves Retained earnings total equity attributable to equity holders of the company non-controlling interest total equity	87,123 57,937 193,484 160,532 64,119 63,984 11,861 12,036
	356,587 294,489
	4,909 5,173 17,134 19,261 11,139 11,138 13,395 14,925 265,131 216,846 503,490 393,092 162 161
	815,360 660,596
	1,171,947 955,085
	3,135 19 95,721 78,127 42,782 8,364 13,581 6,303 31,449 26,043
	186,668 118,856
	152,680 196,514 1,681 2,068 2,788 4,157 2,610 3,746
	159,759 206,485
	346,427 325,341
	825,520 629,744
	610,382 456,734 (30,315) (18,199) 243,974 189,772
	824,041 628,307 1,479 1,437
	825,520 629,744

The balance sheet is to be read in conjunction with the notes to the financial statements set out on pages 46 to 86.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011 43

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Statement of changes in equity

foR tHe YeAR enDeD 31 mARcH 2011

In thousands of AUD Note	consolidated Share Capital Foreign Currency Translation Hedging reserve Employee share-based awards Retained earnings Total Non- controlling Interest Total Equity
Balance 1 April 2010 total comprehensive income for the period Proft or loss other comprehensive income Foreign exchange translation differences Net gain/(loss) on hedge of net investments in foreign subsidiaries Net gain/(loss) on cash fow hedges taken to equity Total other comprehensive income Total comprehensive income for the period transactions with equity holders, recorded directly in equity contributions by and distributions to owners Dividends to equity holders Shares issued under dividend reinvestment plan 25 Shares issues pursuant to the Ammtec takeover offer 25 Share-settled performance rights awarded during the period 37 Non-controlling interest ownership of subsidiary acquired Total contributions by and distributions to owners Balance at 31 March 2011	456,734 (17,889) (1,169) 859 189,772 628,307 1,437 629,744

	- - - - 132,354 132,354 (64) 132,290


	- (14,644) - - - (14,644) - (14,644)
	- (487) - - - (487) - (487)
	- - 2,040 - - 2,040 - 2,040
	- (15,131) 2,040 - - (13,091) - (13,091)
	- (15,131) 2,040 - 132,354 119,263 (64) 119,199


	- - - - (78,152) (78,152) - (78,152)
	32,600 - - - - 32,600 - 32,600
	121,048 - - - - 121,048 - 121,048
	- - - 975 - 975 - 975
	- - - - - - 106 106
	153,648 - - 975 (78,152) 76,471 106 76,577
	610,382 (33,020) 871 1,834 243,974 824,041 1,479 825,520

Balance 1 April 2009 total comprehensive income for the period Proft or loss other comprehensive income Foreign exchange translation differences Net gain/(loss) on hedge of net investments in foreign subsidiaries Net gain/(loss) on cash fow hedges taken to equity Total other comprehensive income Total comprehensive income for the period transactions with equity holders, recorded directly in equity contributions by and distributions to owners Dividends to equity holders Shares issued under dividend reinvestment plan 25 Shares issued under renounceable rights offer (net of costs) 25 Share-settled performance rights awarded during the period 37 Non-controlling interest ownership of subsidiary acquired Total contributions by and distributions to owners Balance at 31 March 2010	242,724 3,826 (3,975) 197 169,140 411,912 1,156 413,068
	- - - - 75,301 75,301 (410) 74,891 - (29,162) - - - (29,162) - (29,162) - 7,447 - - - 7,447 - 7,447 - - 2,806 - - 2,806 - 2,806
	- (21,715) 2,806 - - (18,909) - (18,909)
	- (21,715) 2,806 - 75,301 56,392 (410) 55,982
	- - - - (54,669) (54,669) - (54,669) 21,595 - - - 21,595 - 21,595 192,415 - - - - 192,415 - 192,415 - - - 662 - 662 - 662 - - - - - - 691 691
	214,010 - - 662 (54,669) 160,003 691 160,694
	456,734 (17,889) (1,169) 859 189,772 628,307 1,437 629,744

The statement of changes in equity is to be read in conjunction with the notes to the financial statements set out on pages 46 to 86.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Statement of cash flows

foR tHe YeAR enDeD 31 mARcH 2011

In thousands of AUD Note	consolidated 2011 2010
cash fows from operating activities Cash receipts from customers Cash paid to suppliers and employees Cash generated from operations Interest paid Interest received Income taxes paid net cash from operating activities 33 cash fows from investing activities Payments for property, plant and equipment Repayments/(loans) joint venture entity Payments for net assets on acquisition of businesses and subsidiaries Additional payments in respect of prior year acquisitions of subsidiaries Payment for investment in joint venture Proceeds from sale of chemical and cleaning solutions business Costs incurred in disposing of chemical and cleaning solutions business Dividend from associate Proceeds from sale of other non-current assets net cash from investing activities cash fows from fnancing activities Proceeds from issue of share capital Proceeds from borrowings Repayment of borrowings Lease payments Lease receipts Dividends paid net cash from fnancing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at 1 April Effect of exchange rate fuctuations on cash held cash and cash equivalents at 31 march 14	1,178,430 890,258 (967,669) (745,435)
	210,761 144,823 (11,297) (11,935) 1,053 814 (41,675) (34,137)
	158,842 99,565
	(70,791) (43,170) (638) 441 (52,139) (112,021) - (2,040) - (7,311) 43,891 - (1,447) - 2,370 1,100 3,377 1,878
	(75,377) (161,123)
	- 192,415 229,448 103,871 (236,122) (188,610) (3,077) (8,999) 554 832 (45,416) (32,819)
	(54,613) 66,690
	28,852 5,132 57,918 59,514 (2,782) (6,728)
	83,988 57,918

The statement of cash flows is to be read in conjunction with the notes to the financial statements set out on pages 46 to 86.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011 45

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

1. RepoRtinG entitY

Campbell Brothers Limited (the “Company”) is a company domiciled in Australia. The consolidated financial report of the Company for the year ended 31 March 2011 comprises the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interest in associates and jointly controlled entities.

2. BAsis of pRepARAtion

(a) statement of compliance

The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (“AASBs”) (including Australian Interpretations) adopted by the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001. The consolidated financial report of the Group also complies with the IFRSs and Interpretations adopted by the International Accounting Standards Board.

The financial report was authorised for issue by the directors on 24 May 2011.

(b) Basis of measurement

The financial report is prepared on the historical cost basis except that derivative financial instruments and liabilities for cash-settled share based payments are measured at fair value.

(c) functional and presentation currency

The financial report is presented in Australian dollars which is the Company’s functional currency. The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, amounts in the financial report and Directors’ Report have been rounded off to the nearest thousand dollars, unless otherwise stated.

(d) use of estimates and judgements

The preparation of a financial report requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

In particular the most significant uses of estimates and judgements are described in note 21 – Intangible assets and note 34 – Acquisitions of subsidiaries and non-controlling interests.

(e) changes in accounting policies

As of 1 April 2010, the Group changed its accounting policies in relation to accounting for business combinations (refer note 3(i)).

3. siGnificAnt AccountinG policies

The accounting policies set out below have been applied consistently to all periods presented in the consolidated financial report, except as explained in note 2(e), and 3 (i).

(a) Basis of consolidation

subsidiaries

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group.

Investments in subsidiaries are carried at their cost of acquisition in the Company’s financial statements.

Associates and joint ventures

Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions. The consolidated financial statements include the Group’s share of the total recognised gains and losses of associates and joint ventures on an equity accounted basis, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases. When the Group’s share of losses exceeds its interest in an associate or joint venture, the Group’s carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of an associate or joint venture.

transactions eliminated on consolidation

Intra-group balances and any unrealised gains and losses or income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

Unrealised gains arising from transactions with associates and joint ventures are eliminated to the extent of the Group’s interest in the entity with adjustments made to the “Investments accounted for using the equity method” and “Share of net profit of associates and joint ventures accounted for using the equity method” accounts.

(b) foreign currency

foreign currency transactions

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Australian dollars at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the profit and loss statement, except for differences arising on the translation of a financial liability designated as a hedge of the net investment in a foreign operation or qualifying cash flow hedges, which are recognised in other comprehensive income.

46 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

3. siGnificAnt AccountinG policies continued

(b) foreign currency continued

Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to Australian dollars at foreign exchange rates ruling at the dates the fair value was determined.

financial statements of foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to Australian dollars at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated to Australian dollars at rates approximating the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on retranslation are recognised in other comprehensive income. Since 1 April, 2004, the Group’s date of transition to AASBs, such differences have been recognised in the foreign currency translation reserve (FCTR). When a foreign operation is disposed of, in part or in full, the relevant amount in the FCTR is transferred to profit or loss as part of the profit or loss on disposal. When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented within equity in the FCTR.

Hedge of net investment in foreign operations

The Group applies hedge accounting to foreign currency differences arising between the functional currency of the foreign operation and the parent entity’s functional currency regardless of whether the net investments held directly or through an intermediate parent. Foreign currency differences arising on the retranslation of a financial liability designated as a hedge of a net investment in a foreign operation are recognised in other comprehensive income, in the foreign currency translation reserve, to the extent that the hedge is effective. To the extent that the hedge is ineffective, such differences are recognised in the profit and loss statement. When the hedged part of a net investment is disposed of, the associated cumulative amount in equity is transferred to the profit and loss statement as an adjustment to the gain or loss on disposal.

(c) Derivative financial instruments

The Group uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from operational, financing and investment activities. In accordance with its treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes. However, derivatives that do not qualify for hedge accounting are accounted for as trading instruments.

On initial designation of the hedge, the Group formally documents the relationship between the hedging instrument(s) and hedged item(s), including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to access the effectiveness of the hedging relationship. The Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing basis, whether the hedging instruments are expected to be “highly effective” in offsetting the changes in the fair value

or cash flows of the respective hedged items during the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-125 percent. For a cash flow hedge of a forecast transaction, the transaction should be highly probable to occur and should present an exposure to variations in cash flows that could ultimately affect reported net income.

Derivative financial instruments are recognised initially at fair value. Subsequent to initial recognition, derivative financial instruments are stated at fair value and changes therein are recognised immediately in the profit and loss statement. However, where derivatives qualify for hedge accounting, recognition of any resultant gain or loss depends on the nature of the item being hedged (see note 3(d)).

The fair value of interest rate contracts is the estimated amount that the Group would receive or pay to terminate the contract at the balance sheet date, taking into account current interest rates and the current creditworthiness of counterparties. The fair value of forward exchange contracts is their quoted market price at the balance sheet date, being the present value of the quoted forward price.

(d) Hedging

cash flow hedges

Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised asset or liability, or a highly probable forecast transaction, the effective portion of any gain or loss on the derivative financial instrument is recognised in other comprehensive income and presented in the hedging reserve in equity. When the forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability, or the forecast transaction for a non-financial asset or non-financial liability, the associated cumulative gain or loss is transferred from other comprehensive income and included in the initial cost or other carrying amount of the non-financial asset or liability. In other cases the amount recognised in other comprehensive income is transferred to the profit and loss statement in the same period that the hedged item affects profit or loss.

The ineffective portion of any change in fair value is recognised immediately in the profit and loss statement.

When a hedging instrument expires or is sold, terminated or exercised, or the entity revokes designation of the hedge relationship, but the hedged forecast transaction is still expected to occur, the cumulative gain or loss at that point remains in equity and is recognised in accordance with the above policy when the transaction occurs. If the hedged transaction is no longer expected to take place, the cumulative unrealised gain or loss recognised in other comprehensive income is recognised immediately in the profit and loss statement.

fair value hedges

Changes in the fair value of a derivative hedging instrument designated as a fair value hedge are recognised in the profit or loss. The hedged item also is stated at fair value in respect of the risk being hedged; the gain or loss attributable to the hedged risk is recognised in profit or loss with an adjustment to the carrying amount of the hedged item.

economic hedges

Where a derivative financial instrument is not designated in a qualifying hedge relationship, all changes in fair value are recognised in the profit and loss statement.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

3. siGnificAnt AccountinG policies continued

(e) property, plant and equipment

owned assets

Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see note 3(j)).

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and capitalised borrowing costs (see below). Cost also may include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within “other income” in the profit and loss statement. When revalued assets are sold, the amounts included in the revaluation reserve are transferred to retained earnings.

Borrowing costs

In respect of borrowing costs relating to qualifying assets for which the commencement date for capitalisation is on or after 1 April 2009, the Group capitalises borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset.

Reclassification to investment property

When the use of a property changes from owner-occupied to investment property, the property is held at cost and reclassified as investment property.

investment property

Investment property is property held either to earn rental income or for capital appreciation or for both. Investment property is measured at cost and is depreciated on a straight line basis over the estimated useful life of 80 years.

leased assets

Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Lease payments are accounted for as described in note 3(q).

subsequent costs

The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied within the item will flow to the Group and the cost of the item can be measured reliably. All other costs are recognised in the profit and loss statement as an expense as incurred.

Depreciation

Depreciation is calculated on the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value. Depreciation is charged to the profit and loss statement on a straight-line or diminishing value basis over the estimated useful lives of each part of an item of property, plant and equipment. Land is not depreciated. The estimated useful lives in the current and comparative periods are as follows:

•	Buildings	20-40 Years
•	Plant and equipment	3-10 Years
•	Leasehold improvements	3-20 Years
•	Leased plant and equipment	4-5 Years

The residual value, the useful life and the depreciation method applied to an asset are reassessed at least annually and adjusted if appropriate.

(f) trade and other receivables

Trade and other receivables are stated at their cost less impairment losses (see note 3(j)).

(g) inventories

Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

The cost of inventories is based on the weighted average method and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of overheads based on normal operating capacity.

Costs for sample testing commenced but not yet completed in the analytical laboratory business are recognised as work in progress and measured at the lower of cost to date and net realisable value.

(h) cash and cash equivalents

Cash and cash equivalents comprises cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

(i) intangible assets

Goodwill

Goodwill arising on the acquisition of a subsidiary or business is included in intangible assets. For the accounting policy on measurement of the goodwill at initial recognition, refer below.

Business combinations

Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable.

48 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

3. siGnificAnt AccountinG policies continued

(i) intangible assets continued

Business combinations on or after 1 April 2010

The Group has adopted revised AASB 3 Business Combinations (2008) and amended AASB 127 Consolidated and Separate Financial Statements (2008) for business combinations occurring in the year commencing 1 April 2010. All business combinations occurring on or after 1 April 2010 are accounted for by applying the acquisition method. The change in accounting policy is applied prospectively and had no material impact on earnings per share.

For acquisitions on or after 1 April 2010, the Group measures goodwill at the acquisition date as:

the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests in the acquiree; plus if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit and loss. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

Transaction costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit and loss. When share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree’s employees (acquiree’s awards) and relate to past services, then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based value of the replacement awards compared with the market-based value of the acquiree’s awards and the extent to which the replacement awards relate to past and/or future service.

In determining the fair value of identifiable net assets acquired, the Group considers the existence of identifiable intangible assets such as brandnames, trademarks, customer contracts and relationships and in process research and development intangible assets. Where material, these items are recognised separately from goodwill.

Acquisitions between 1 April 2004 and 1 April 2010

For acquisitions between 1 April 2004 and 1 April 2010, goodwill represents the excess of the cost of the acquisition over the Group’s interest in the recognised amount (generally fair value) of the identifiable assets, liabilities and contingent liabilities of the acquiree. When the excess was negative, a bargain purchase gain was recognised immediately in profit or loss.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurred in connection with business combinations were capitalised as part of the cost of the acquisition.

Acquisitions prior to 1 April 2004

As part of its transition to IFRSs, the Group elected to restate only those business combinations that occurred on or after 1 April 2004. In respect of acquisitions prior to 1 April 2004, goodwill represents the amount recognised under the Group’s previous accounting framework (Australian GAAP).

Acquisitions of non-controlling interests

Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore no goodwill is recognised as a result of such transactions. The adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary.

subsequent measurement

Goodwill is measured at cost less accumulated impairment losses. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment.

other intangible assets

Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation (see below) and impairment losses (see note 3(j)).

Expenditure on internally generated goodwill and brands is recognised in the profit and loss statement as an expense as incurred.

subsequent expenditure

Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.

Amortisation

Amortisation is calculated on the cost of an asset less its residual value. Amortisation is charged to the profit and loss statement on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Goodwill and intangible assets with an indefinite useful life are systematically tested for impairment at each balance sheet date. Other intangible assets are amortised from the date they are available for use. The estimated useful lives in the current and comparative periods are as follows:

• Capitalised computer software

3-10 Years

The residual value, the useful life and the amortisation method applied to an asset are reassessed at least annually and adjusted if appropriate.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

3. siGnificAnt AccountinG policies continued

(j) impairment

financial assets

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its fair value.

Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

All impairment losses are recognised in the profit and loss statement.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost, the reversal is recognised in the profit and loss statement.

non-financial assets

The carrying amounts of the Group’s non-financial assets, other than inventories (see note 3(g)) and deferred tax assets (see note 3(s)), are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated (see “Calculation of recoverable amount” below). For goodwill, assets that have an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated at each balance sheet date.

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the profit and loss statement, unless an asset has previously been revalued, in which case the impairment loss is recognised as a reversal to the extent of that previous revaluation with any excess recognised through the profit and loss statement.

Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units (group of units) and then, to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

Goodwill that forms part of the carrying amount of an investment in equity accounted investees is not recognised separately, and therefore is not tested for impairment separately. Instead, the entire amount of the investment is tested for impairment as a single asset when there is objective evidence that the investment may be impaired.

calculation of recoverable amounts

Impairment of receivables is not recognised until objective evidence is available that a loss event has occurred. Receivables are individually assessed for impairment.

The recoverable amount of other assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cashgenerating unit to which the asset belongs. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to benefit from the synergies of the combination.

(k) share capital

transaction costs

Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefit.

Dividends

Dividends are recognised as a liability in the period in which they are declared.

(l) loans and borrowings

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the profit and loss statement over the period of the borrowings on an effective interest basis.

(m) employee benefits

Defined contribution superannuation funds

Obligations for contributions to defined contribution superannuation funds are recognised as an expense in the profit and loss statement as incurred.

long-term service benefits

The Group’s net obligation in respect of long-term service benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. The obligation is calculated using expected future increases in wage and salary rates including related on-costs and expected settlement dates, and is discounted using the rates attached to government bonds at the balance sheet date which have maturity dates approximating the terms of the Group’s obligations.

wages, salaries, annual leave and sick leave

Liabilities for employee benefits for wages, salaries, annual leave and sick leave that are expected to be settled within 12 months of the reporting date represent present obligations resulting from employees’ services provided to reporting date, are calculated at undiscounted amounts based on remuneration wage and salary rates that the Group expects to pay as at reporting date including related on-costs, such as workers compensation insurance and payroll tax.

share-based payment transactions

The fair value at grant date of equity-settled share-based awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The amount recognised as an expense is adjusted to reflect the actual number of share awards that vest, except for those that fail to vest due to market vesting conditions not being met.

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

3. siGnificAnt AccountinG policies continued

(m) employee benefits continued

share-based payment transactions continued

The fair value of the amount payable to employees in respect of cash-settled share-based awards is recognised as an expense, with a corresponding increase in liabilities, over the period in which the employees become unconditionally entitled to payment. The liability is re-measured at each reporting date and at settlement date. Any changes in the fair value of the liability are recognised as employee expenses in profit or loss.

(n) provisions

A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits that can be estimated reliably will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. The unwinding of the discount is recognised as a finance cost.

(o) trade and other payables

Trade and other payables are stated at their amortised cost. Trade payables are non-interest bearing and are normally settled on 60-day terms.

(p) Revenue

Goods sold and services rendered

Revenue from the sale of goods is recognised in the profit and loss statement when the significant risks and rewards of ownership have been transferred to the buyer. Revenue from services rendered is recognised in the profit and loss statement in proportion to the stage of completion of the transaction at the balance sheet date. The stage of completion is assessed by reference to surveys of work performed. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due, the costs incurred or to be incurred cannot be measured reliably, there is a risk of return of goods or there is continuing management involvement with the goods.

Transfers of risk and rewards vary depending on the individual terms of the contract of sale. For the majority of the Group’s sale of goods, transfer usually occurs when the product is delivered.

Dividend income

Dividend income is recognised in profit and loss on the date that the Group’s right to receive payment is established.

(q) expenses

operating lease payments

Payments made under operating leases are recognised in the profit and loss statement on a straight-line basis over the term of the lease. Lease incentives received are recognised in the profit and loss statement as an integral part of the total lease expense and spread over the lease term.

finance lease payments

Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

finance income and finance expense

Finance income comprises interest income on funds invested and is recognised in the profit and loss statement as it accrues, using the effective interest method.

Finance expense comprise interest expense on borrowings calculated using the effective interest method and gains and losses on hedging instruments that are recognised in the profit and loss statement (see note 3(d)). The interest expense component of finance lease payments is recognised in the profit and loss statement using the effective interest method.

foreign currency costs

Foreign currency gains and losses are reported on a net basis.

(r) Determination and presentation of operating segments

For financial periods commencing on and after 1 April 2009 the Group determines and presents operating segments based on information that is reported internally to the Chief Executive Officer (CEO), who is the Group’s chief operating decision maker.

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the CEO to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.

Segment results that are reported to the CEO include items directly attributed to the segment as well as those that can be allocated on a reasonable basis. Segment contribution is calculated as earnings before interest, foreign currency gains and losses, unusual items (refer note 9) and income tax. Unallocated items comprise mainly corporate assets, head office expenses, finance costs, income tax expense and taxation assets and liabilities. Inter-segment pricing is determined on an arms length basis.

Non-current assets disclosed in note 6 – Operating Segments - are comprised of the Group’s non-current assets excluding receivables and deferred tax assets.

(s) income tax

Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the profit and loss statement except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised in equity or other comprehensive income, respectively.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: initial recognition of goodwill, the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

3. siGnificAnt AccountinG policies continued

(s) income tax continued

investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend.

tax consolidation

The Company and its wholly-owned Australian resident entities have formed a tax-consolidated group with effect from 1 April 2003 and are therefore taxed as a single entity from that date. The head entity within the tax-consolidated group is Campbell Brothers Limited.

Current tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax-consolidated group are recognised in the separate financial statements of the members of the tax-consolidated group using the ‘separate taxpayer within group’ approach by reference to the carrying amounts in the separate financial statements of each entity and the tax values applying under tax consolidation.

Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the subsidiaries is assumed by the head entity in the tax consolidated group and are recognised as amounts payable (receivable) to (from) other entities in the tax-consolidated group in conjunction with any tax funding arrangement amounts (refer below). Any difference between these amounts is recognised by the Company as an equity contribution or distribution.

The Company recognises deferred tax assets arising from unused tax losses of the tax-consolidated group to the extent that it is probable that future taxable profits of the tax-consolidated group will be available against which the asset can be utilised.

Any subsequent period adjustments to deferred tax assets arising from unused tax losses as a result of revised assessments of the probability of recoverability is recognised by the head entity only.

nature of tax funding arrangements

The head entity, in conjunction with other members of the taxconsolidated group, has entered into a tax funding arrangement which sets out the funding obligations of members of the taxconsolidated group in respect of tax amounts. The tax funding arrangements require payments to/from the head entity equal to the current tax liability (asset) assumed by the head entity and any tax-loss deferred tax asset assumed by the head entity, resulting in the head entity recognising an inter-entity payable (receivable) equal in amount to the tax liability (asset) assumed. The inter-entity payables (receivables) are at call.

Contributions to fund the current tax liabilities are payable as per the tax funding arrangement and reflect the timing of the head entity’s obligation to make payments for tax liabilities to the relevant tax authorities.

(t) Goods and services tax

Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as a current asset or liability in the balance sheet.

Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the taxation authority are classified as operating cash flows.

(u) Discontinued operations

A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations that has ceased or been disposed of or is held for sale. Classification as a discontinued operation occurs upon cessation or disposal. When an operation is classified as a discontinued operation, the comparative profit and loss statement and statement of comprehensive income are restated as if the operation had been discontinued from the start of the comparative period.

(v) earnings per share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise performance rights granted to employees.

(w) Removal of parent entity financial statements

The Group has applied amendments to the Corporations Act (2001) that remove the requirement for the Group to lodge parent entity financial statements. Parent entity financial statements have been replaced by the specific parent entity disclosures in note 31.

(x) new standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 April 2011, and have not been applied in preparing these consolidated financial statements. None of these is expected to have a significant effect on the consolidated financial statements of the Group, except for IFRS 9 Financial Instruments, which becomes mandatory for the Group’s 2014 consolidated financial statements and could change the classification and measurement of financial assets. The Group does not plan to adopt this standard early and the extent of the impact has not been determined.

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

4. finAnciAl AnD cApitAl RisK mAnAGement

Risk management framework

Identification, measurement and management of risk is a strategic priority for the Group. The provision of goods and services carries a number of diverse risks which may have a material impact on the Group’s financial position and performance. Consequently, the Board has established a comprehensive framework covering accountability, oversight, measurement and reporting to maintain high standards of risk management throughout the Group.

The Group allocates specific roles in the management of risk to executives and senior managers and to the Board. This is undertaken within an overall framework and strategy established by the Board.

The Audit and Compliance Committee obtains assurance about the internal control and risk management environment through regular reports from the Risk and Compliance team.

The Group has exposure to the following risks from their use of financial instruments:

Credit risk
Liquidity risk
Market risk

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital.

credit risk

The Group has an established credit policy and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. The Group does not require collateral in respect of financial assets. There is no single customer making up a material percentage of the Group’s revenue. Geographic concentrations of trade receivables are - Australia 54% (2010: 54%), Canada 10% (2010: 10%) and other countries 36% (2010: 36%). The maximum exposure to credit risk is represented by the carrying amount of each financial asset, including derivative financial instruments, in the balance sheet.

Goods are sold subject to retention of title clauses, so that in the event of non-payment the Group may have a secured claim. The Group does not require collateral in respect of trade and other receivables.

Counterparties to transactions involving derivative financial instruments are large Australian and international banks with whom the Group has a signed netting agreement. Management does not expect any counterparty to fail to meet its obligations.

Group policy is to provide financial guarantees only to whollyowned subsidiaries. Details of the Deed of Cross Guarantee are provided in note 30.

liquidity risk

The liquidity position of the Group is continuously managed using cash flow forecasts to ensure sufficient liquid funds are available to meet its financial commitments in a timely and costeffective manner. The Group is party to a number of bilateral debt facility and long term note agreements which provide funding for acquisitions and working capital (refer note 24).

market risk

interest rate risk

Interest rate risk is the risk that the Group’s financial position and performance will be adversely affected by movements in interest rates. Interest rate risk on cash and short term deposits is not considered to be a material risk due to the short term nature of these financial instruments.

The Group’s interest rate risk arises from long-term debt. Floating rate debt exposes the Group to cash flow interest rate risk and fixed rate debt exposes the Group to fair value interest rate risk. Interest rate risk is managed by maintaining an appropriate mix of fixed and floating rate debt. The Group may enter into interest rate swaps and options to manage the ratio of fixed rate debt to floating rate debt. Hedging is undertaken against specific rate exposures only, as disclosed in note 26.

foreign exchange risk

The Group operates internationally and are exposed to foreign exchange risk arising from various currency exposures.

Foreign exchange risk arises from future purchase and sales commitments and assets and liabilities that are denominated in a currency that is not the functional currency of the respective Group entities. Measuring the exposure to foreign exchange risk is achieved by regularly monitoring and performing sensitivity analysis on the Group’s financial position.

The Group enters into forward foreign exchange contracts (FECs) in line with its policy to hedge a proportion of certain forecast purchase commitments denominated in foreign currencies (principally US dollars). The terms of these commitments are generally less than three months. The amount of forecast purchases is estimated based on current conditions in foreign markets, customer orders, commitments to suppliers and experience.

The Group borrows funds in foreign currencies to hedge its net investments in foreign operations. The Group’s Canadian dollar and Swedish kronor denominated borrowings are designated as hedges of the Group’s net investment in subsidiaries in those currencies.

capital management

Capital comprises equity attributable to equity holders, loans and borrowings and cash and cash equivalents.

Capital management involves the use of corporate forecasting models which facilitates analysis of the Group’s financial position including cash flow forecasts to determine the future capital management requirements. Capital management is undertaken to ensure a secure, cost-effective and flexible supply of funds is available to meet the Group’s operating and capital expenditure requirements. The Group monitors gearing and treasury policy breaches and exceptions. The gearing ratio as at balance date is 12% (2010: 19%).

The Group maintains a stable capital base from which it can pursue its growth aspirations, whilst maintaining a flexible capital structure that allows access to a range of debt and equity markets to both draw upon and repay capital.

Note 26 details the repayment obligations in respect of the amount of the facilities and derivatives utilised.

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

5. DeteRminAtion of fAiR VAlue

The following summarises the major methods and assumptions used in estimating the fair values for measurement and disclosure purposes:

fair value hierarchy

In valuing financial instruments, the Group uses the following fair value measurement hierarchy that reflects the significance of the inputs used in making the measurements:

Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.
Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation.

Derivatives

Forward exchange contracts are marked to market using publicly available forward rates. Interest rate contracts are marked to market using discounted estimated future cash flows based on the terms and maturity of each contract and using market interest rates for a similar instrument at the measurement date.

Where discounted cash flow techniques are used, estimated future cash flows are based on management’s best estimates and the discount rate is a market related rate for a similar instrument at the balance sheet date. Where other pricing models are used, inputs are based on market related data at the balance sheet date.

6. opeRAtinG seGments

The Group has 7 reportable segments, as described below, which are the Group’s strategic business units. The strategic business units offer different products and services, and are managed separately. For each of the strategic business units, the CEO reviews internal management reports on at least a monthly basis. The following summary describes the operations in each of the Group’s reportable segments:

Als minerals - provides assaying and analytical testing services and metallurgical services for mining and mineral exploration companies.
Als environmental - provides analytical testing data to assist consulting and engineering firms, industry, and governments around the world in making informed decisions about their environmental projects.
Als coal - provides specialist services to the coal industry such as coal sampling & analysis and certification of export cargoes.
Als tribology - provides analysis of lubricating oil from a wide variety of mechanical equipment for preventative maintenance purposes.
Als industrial – provides the energy, resources and infrastructure sectors with testing, inspection and asset care services.
campbell chemicals - manufacture and distribution of cleaning agents and chemicals for both domestic and industrial customers.
Reward Distribution - distribution of non-food consumables to the healthcare, building services, hospitality and leisure industries.

loans and borrowings

Fair value is calculated based on discounted expected future principal and interest cash flows.

trade and other receivables / payables

For receivables / payables with a remaining life of less than one year, the notional amount is deemed to reflect the fair value. All other receivables / payables are discounted to determine the fair value.

finance leases

The fair value is estimated as the present value of future cash flows, discounted at market interest rates for homogenous lease agreements. The estimated fair value reflects changes in interest rates.

share-based payment transactions

The fair value of share-based awards to employees is measured using Binomial Tree (Earnings per Share hurdle) and MonteCarlo Simulation (Total Shareholder Return hurdle) valuation methodologies. Measurement inputs include the Company’s share price on measurement date, expected volatility thereof, expected life of the awards, the Company’s expected dividend yield and the risk-free interest rate. Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value. Refer note 37 for details

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

6. opeRAtinG seGments continued

6. opeRAtinG seGments contin	ued
In thousands of AUD	ALS Minerals ALS Environmental ALS Coal ALS Tribology ALS Industrial Campbell Chemicals (a) Reward Distribution Consolidated
2011 Revenue from external customers Inter-segment revenue (b) total revenue segment contribution (c) segment margin (d) segment assets segment liabilities Amortisation and depreciation
	334,477 308,281 73,023 30,338 112,034 126,307 123,869 1,108,329
	- - - - - 4,015 - 4,015
	334,477 308,281 73,023 30,338 112,034 130,322 123,869 1,112,344

	111,796 66,195 17,151 4,009 12,608 7,386 (1,811) 217,334
	33.4% 21.5% 23.5% 13.2% 11.3% 5.7% (1.5%) 19.5%

	338,125 332,386 130,312 21,336 131,136 44,684 53,529 1,051,508

	38,763 35,265 16,881 2,044 12,517 6,734 13,084 125,288

	15,454 15,509 2,745 1,257 2,732 2,399 1,221 41,317

(a) Campbell Chemicals’ segment revenue includes $42,503,000 relating to the chemical and cleaning solutions business which was divested on 1 December 2010.

(b) Intersegment revenue is generated by Campbell Chemicals from sales to other Segments.

(c) Segment contribution represents the segment’s profit before unusual items, financing costs, net foreign exchange gains and losses and income tax.

(d) Segment margin is calculated as segment contribution as a percentage of segment revenue.

In thousands of AUD	ALS Minerals ALS Environmental ALS Coal ALS Tribology ALS Industrial Campbell Chemicals (a) Reward Distribution Consolidated
2010 Revenue from external customers Inter-segment revenue total revenue segment contribution segment margin segment assets segment liabilities Amortisation and depreciation	204,984 245,205 61,755 29,826 19,823 146,155 117,785 825,533 - - - - - 5,644 - 5,644
	204,984 245,205 61,755 29,826 19,823 151,799 117,785 831,177
	53,344 43,798 15,034 4,643 1,299 8,246 3,424 129,788 26.0 % 17.9 % 24.3 % 15.6 % 6.6 % 5.4 % 2.9 % 15.6 %
	149,844 309,418 114,230 21,512 125,956 85,309 61,159 867,428
	22,646 29,158 14,813 2,280 14,622 13,040 10,693 107,252
	14,746 15,623 2,168 1,195 635 3,284 1,555 39,206

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CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

6. opeRAtinG seGments continued

6. opeRAtinG seGments continued
In thousands of AUD Note	consolidated 2011 2010
i) segment revenue reconciliation to the proft and loss statement Total segment revenue Inter-segment sales eliminations Total revenue ii) segment contribution reconciliation to the proft and loss statement Total segment contribution Unusual items 9 Corporate expenses Net fnancing costs Net proft before tax per the proft and loss statement iii) segment assets reconciliation to the balance sheet Total segment assets Corporate assets Cash and cash equivalents Fair value derivatives Other current assets Deferred tax assets Total assets per the balance sheet iv) segment liabilities reconciliation to the balance sheet Total segment liabilities Corporate liabilities Bank overdraft Fair value derivatives Income tax liability Loans and borrowings Deferred tax liabilities Total liabilities per the balance sheet v) segment amortisation and depreciation reconciliation to the proft and loss statement Total segment amortisation and depreciation Corporate amortisation and depreciation Total amortisation and depreciation	1,112,344 831,177 (4,015) (5,644)
	1,108,329 825,533
	217,334 129,788 (751) - (21,214) (12,805) (10,244) (11,121)
	185,125 105,862
	1,051,508 867,436 14,559 10,853 87,123 57,937 1,244 - 4,118 3,934 13,395 14,925
	1,171,947 955,085
	125,288 107,252 7,280 3,151 3,135 19 - 1,670 13,581 6,303 195,462 204,878 1,681 2,068
	346,427 325,341
	41,317 39,206 855 738
	42,172 39,944

Geographical segments

In presenting information on a geographical basis segment revenue from external customers is by geographical location of customers. Segment assets are attributed based on geographic location of the business unit.

In thousands of AUD	consolidated 2011 2010
Australia Canada Other countries Total	Revenues Non-Current assets Revenues Non-Current assets 591,194 527,381 414,472 364,297 171,240 96,262 128,626 108,201 349,910 173,413 288,079 168,000
	1,112,344 797,056 831,177 640,498

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

7. otHeR income

7. otHeR income
In thousands of AUD Note	consolidated 2011 2010
Gain on sale of chemical and cleaning solutions business 9 Dividend income Other income 8. expenses	8,654 - 567 109 1,720 1,979
	10,941 2,088

8. expenses
In thousands of AUD Note	consolidated 2011 2010
Cost of goods sold Equity-settled share-based payment transactions 37 Cash-settled share-based payment transactions 37 Contributions to defned contribution post-employment plans Loss on sale of property plant and equipment Impairment of goodwill relating to Reward Distribution segment 9, 21 Write down of inventory in Reward Distribution segment to net realisable value 9 Transaction costs related to business combinations 3(i) Net loss on foreign exchange 9. unusuAl items RecoRDeD in pRofit foR tHe YeAR	174,928 184,331 975 662 590 204 24,911 21,734 389 177 7,857 - 1,548 - 2,840 - 1,807 6,514

9. unusuAl items RecoRDeD in pRofit foR tHe YeAR
In thousands of AUD Note	consolidated 2011 2010
Gain on sale of chemical and cleaning solutions business 7 Write-down to recoverable amount goodwill and inventories in Reward Distribution segment 8 Income tax effect Effect of unusual items after income tax	8,654 - (9,405) -
	(751) - 897 -
	146 -

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

10. AuDitoRs’ RemuneRAtion

10. AuDitoRs’ RemuneRAtion
In AUD	consolidated 2011 2010
Audit services Auditors of the Company KPMG Australia: Audit and review of consolidated and company fnancial reports Audit of subsidiary’s fnancial report Other regulatory services Other KPMG member firms: Audit and review of fnancial reports Other auditors Audit and review of fnancial reports other services Auditors of the Company KPMG Australia Other assurance and investigation services Other KPMG member firms: Taxation services Other assurance services	451,000 399,860 45,000 55,000 4,200 - 383,352 338,710
	883,552 793,570 69,913 96,770
	953,465 890,340
	52,750 49,000 65,974 90,690 737 6,100
	119,461 145,790

Includes impact of acquisitions during the financial year.

11. net finAncinG costs

11. net finAncinG costs
In thousands of AUD	consolidated 2011 2010
Interest income Financial income Interest expense Finance charges on capitalised leases Financial expenses Net fnancing costs	1,053 814
	1,053 814
	10,751 11,315 546 620
	11,297 11,935
	10,244 11,121

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

12. income tAx expense

12. income tAx expense
In thousands of AUD	consolidated 2011 2010
Recognised in the proft and loss statement current tax expense Current year Adjustments for prior years Deferred tax expense Origination and reversal of temporary differences Total income tax expense in proft and loss statement Reconciliation between tax expense and pre-tax net proft Proft before tax Income tax using the domestic corporation tax rate of 30% (2010: 30%) Difference resulting from different tax rates in overseas countries Increase in income tax expense due to: Non-deductible expenses Non-deductible equity settled performance rights expense Non-deductible new market expansion and acquisition related costs Tax losses of subsidiaries not recognised Non resident withholding tax paid upon receipt of distributions from foreign related parties Non-deductible goodwill impairment losses Decrease in income tax expense due to: Previously unrecognised tax losses utilised during the year Deductible WIP balances acquired Share of associate entities net proft Foreign statutory tax exemptions granted Tax exempt revenues Net tax adjustment attributable to the disposal of the chemical and cleaning solutions business Other deductible items Under / (over) provided in prior years Income tax expense on pre-tax net proft Deferred tax recognised directly in equity Relating to foreign currency translation reserve Relating to hedging reserve Relating to renouncable rights issue of share capital	50,845 29,183 537 (298)
	51,382 28,885
	1,453 2,086
	1,453 2,086
	52,835 30,971
	185,125 105,862 55,537 31,758 (2,045) (1,437) 250 337 195 258 445 433 1,502 1,759 1,746 870 2,367 - (558) (457) (600) (614) (145) (500) (1,561) (1,070) (1,076) (33) (3,106) - (653) (35) 537 (298)
	52,835 30,971
	37 1,027 (874) (1,202) - 1,824
	(837) 1,649

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011 59

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

13. eARninGs peR sHARe

13. eARninGs peR sHARe
Cents per share	consolidated 2011 2010
Basic earnings per share Diluted earnings per share	203.19 129.06 202.78 128.89

Basic and diluted earnings per share

The calculations of both basic and diluted earnings per share were based on the profit attributable to equity holders of the Company of $132,354,000 (2010: $75,301,000).

weighted average number of ordinary shares (Basic and diluted)

In thousands of shares Note	consolidated 2011 2010
Issued ordinary shares at 1 April 25 Effect of shares issued July 2009 (DRP ) Effect of shares issued November 2009 (rights issue) Effect of shares issued December 2009 (DRP ) Effect of shares issued July 2010 (DRP ) Effect of shares issued November and December 2010 (in connection with acquisition of Ammtec Ltd) Effect of shares issued December 2010 (DRP ) Weighted average number of ordinary shares at 31 March (Basic) Effect of performance rights granted to employees as compensation Weighted average number of ordinary shares at 31 March (Diluted)	62,960 53,033 - 559 - 4,574 - 181 557 - 1,378 - 244 -
	65,139 58,347 134 78
	65,273 58,425

DRP: Dividend Reinvestment Plan

14. cAsH AnD cAsH eQuiVAlents

14. cAsH AnD cAsH eQuiVAlents
In thousands of AUD	consolidated 2011 2010
Bank balances Call deposits Cash and cash equivalents in the balance sheet Bank overdrafts repayable on demand Cash and cash equivalents in the statement of cash fows	84,323 57,437 2,800 500
	87,123 57,937 (3,135) (19)
	83,988 57,918

The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in note 26.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

15. tRADe AnD otHeR ReceiVABles

15. tRADe AnD otHeR ReceiVABles
In thousands of AUD	consolidated 2011 2010
current Trade receivables Other receivables Fair value derivatives non-current Finance lease receivable Security deposits Loans owing by associates and joint venture Ageing of trade receivables Current 30 days 60 days 90 days and over Total Allowance for impairment of trade receivables Opening balance Impairment loss recognised/(reversal of impairment loss) Closing balance	169,847 144,983 22,393 15,549 1,244 -
	193,484 160,532
	2,250 3,161 1,706 1,602 953 410
	4,909 5,173
	96,508 86,881 43,243 35,138 14,129 11,580 23,542 19,621
	177,422 153,220
	8,237 9,907 (662) (1,670)
	7,575 8,237

Based on historical rates of default, the Group believes that no impairment allowance is necessary in respect of trade receivables not overdue or past due not more than two months. The allowance for impairment of trade receivables is in respect of trade receivables past due for more than two months.

Exposures to currency risks related to trade and other receivables are disclosed in note 26.

16. inVentoRies

16. inVentoRies
In thousands of AUD	consolidated 2011 2010
Raw materials and consumables Work in progress Finished goods	13,791 15,800 20,450 10,607 29,878 37,577
	64,119 63,984

17. otHeR cuRRent Assets

17. otHeR cuRRent Assets	64,119 63,984
In thousands of AUD	consolidated 2011 2010
Prepayments Other	9,599 8,847 2,262 3,189
	11,861 12,036

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011 61

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

18. inVestments AccounteD foR usinG tHe eQuitY metHoD

investments in associates and joint ventures

Investments in associates and a joint venture are accounted for using the equity method. The Group has investments in the following equityaccounted entities:

name principal activities Reporting date	ownership interest consolidated 2011 2010
Associates: ALS Technichem (Malaysia) Snd Bhd Laboratory services 31 December joint ventures: ALS Mineralogy Pty Ltd (a) Laboratory services 31 March Australian Laboratory Services, Arabia Co. Laboratory services 31 December Alex Stewart Assayers (S) Pte Ltd Laboratory services 31 March	40% 40% 51% 51% 42% 42% 50% 50%

(a) Whilst the Group has an ownership interest of 51% in this entity, the shareholders’ agreement between the Group and the other shareholder operates such that key strategic decisions are made jointly.

In thousands of AUD	consolidated 2011 2010
movements in carrying amount of investments in associates and joint ventures: Carrying amount at the beginning of the fnancial year Investment in joint venture Share of associates’ and joint venture’s net proft Dividends received	19,261 11,383 - 7,311 243 1,667 (2,370) (1,100)
	17,134 19,261

19. DefeRReD tAx Assets AnD liABilities

Recognised deferred tax assets and liabilities

Deferred tax assets and liabilities are attributable to the following:

consolidated In thousands of AUD	Assets liabilities net 2011 2010 2011 2010 2011 2010
Property, plant and equipment Land and buildings Intangible assets Unrealised FX losses/(gains) Provisions and other payables Undeducted equity raising costs Undeducted capital expenditure Fair value derivatives Accrued revenue Inventories Other items Tax value of loss carry-forwards recognised Tax assets / liabilities Set off of tax Net tax assets / liabilities	2,615 2,063 1,786 1,924 829 139 81 - 1,222 1,180 (1,141) (1,180) - - 1,038 1,044 (1,038) (1,044) 153 257 459 - (306) 257 14,907 13,342 - - 14,907 13,342 1,094 1,459 - - 1,094 1,459 1,917 763 - - 1,917 763 - 501 373 - (373) 501 - - 1,172 1,181 (1,172) (1,181) 103 120 4,657 2,241 (4,554) (2,121) 1,147 652 102 406 1,045 246 506 1,676 - - 506 1,676
	22,523 20,833 10,809 7,976 11,714 12,857 (9,128) (5,908) (9,128) (5,908) - -
	13,395 14,925 1,681 2,068 11,714 12,857

62 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

19. DefeRReD tAx Assets AnD liABilities continued

unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items:

In thousands of AUD	consolidated 2011 2010
Tax losses	4,023 1,166

Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits.

20. pRopeRtY, plAnt AnD eQuipment

20. pRopeRtY, plAnt AnD eQuipment
In thousands of AUD	consolidated 2011 2010
freehold land and buildings: At cost Accumulated depreciation plant and equipment: At cost Accumulated depreciation leasehold improvements: At cost Accumulated depreciation leased plant and equipment: At capitalised cost Accumulated depreciation product dispensers: At capitalised cost Accumulated depreciation capital works in progress: Reconciliations Reconciliations of the carrying amounts for each class of property, plant and equipment are set out below: In thousands of AUD	82,737 55,859 (11,385) (11,163)
	71,352 44,696
	362,006 329,971 (245,693) (220,564)
	116,313 109,407
	70,791 73,181 (28,912) (25,683)
	41,879 47,498
	16,380 11,862 (6,238) (4,796)
	10,142 7,066
	- 10,983 - (8,018)
	- 2,965
	25,445 5,214
	265,131 216,846
	consolidated 2011 2010
freehold land and buildings: Carrying amount at the beginning of the year Additions Additions through entities acquired Transfer from capital works in progress Depreciation Disposals Effect of movement in foreign exchange Carrying amount at end of year	44,696 41,791 13,099 4,714 24,233 1,707 - 1,296 (1,508) (1,384) (8,014) (695) (1,154) (2,733)
	71,352 44,696

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

20. pRopeRtY, plAnt AnD eQuipment continued

Reconciliations continued

Reconciliations continued
In thousands of AUD	consolidated 2011 2010
plant and equipment: Carrying amount at the beginning of the year Additions Additions through entities acquired Transfers Transfer from leased plant and equipment Disposal Depreciation Effect of movement in foreign exchange Carrying amount at end of year leasehold improvements: Carrying amount at the beginning of the year Additions Additions through entities acquired Transfer from capital works in progress Disposal Depreciation Effect of movement in foreign exchange Carrying amount at end of year leased plant and equipment: Carrying amount at the beginning of the year Additions Additions through entities acquired Transfer to plant and equipment Disposal Depreciation Effect of movement in foreign exchange Carrying amount at end of year product dispensers: Carrying amount at the beginning of the year Additions Disposal Depreciation Carrying amount at end of year capital works in progress: Carrying amount at the beginning of the year Additions Transfers Effect of movement in foreign exchange Carrying amount at end of year	109,407 109,591 29,837 21,880 13,386 13,444 3,204 3,029 1,080 939 (5,739) (875) (31,296) (28,588) (3,566) (10,013)
	116,313 109,407
	47,498 30,415 2,812 13,573 1,401 776 - 11,701 (991) (287) (5,974) (5,894) (2,867) (2,786)
	41,879 47,498
	7,066 3,743 - 9 5,381 5,847 (1,080) (939) (48) (68) (1,088) (1,264) (89) (262)
	10,142 7,066
	2,965 3,405 527 1,346 (2,433) (127) (1,059) (1,659)
	- 2,965
	5,214 21,399 23,468 783 (3,204) (16,054) (33) (914)
	25,445 5,214

64 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

21. intAnGiBle Assets

21. intAnGiBle Assets
In thousands of AUD	consolidated Goodwill Purchased trademarks and brandnames Software Total
Balance at 1 April 2010 Additions through business combinations Impairment (a) Additions Disposal Amortisation Effect of movements in foreign exchange Balance at 31 march 2011 Balance at 1 April 2009 Additions through business combinations Additions Disposals Amortisation Effect of movements in foreign exchange Balance at 31 march 2010	387,219 3,687 2,186 393,092
	127,229 - - 127,229
	(7,857) - - (7,857)
	- - 900 900
	(311) - (9) (320)
	- - (1,101) (1,101)
	(8,344) (37) (72) (8,453)
	497,936 3,650 1,904 503,490
	262,141 3,736 2,213 268,090 134,997 - 227 135,224 - - 874 874 - - (3) (3) - - (1,010) (1,010) (9,919) (49) (115) (10,083)
	387,219 3,687 2,186 393,092

(a) The impairment loss recognised relates to the Reward Distribution reportable segment and has been included in administration and other expenses in the profit and loss statement.

impairment tests for cash generating units containing goodwill

The following cash generating units have significant carrying amounts of goodwill:

In thousands of AUD	consolidated 2011 2010
ALS Minerals ALS Environmental - Australia ALS Environmental – North America ALS Environmental – Europe ALS Environmental – Asia ALS Coal ALS Tribology ALS Industrial Campbell Chemicals Reward Distribution Other cash generating units	129,764 11,192 43,426 41,703 75,709 73,493 34,857 38,073 7,849 7,849 79,890 79,890 12,395 12,989 93,447 93,447 4,095 4,418 16,000 23,661 504 504
	497,936 387,219

The recoverable amounts of goodwill in all cash-generating units exceed carrying amounts and are based on value in use calculations. Those calculations use cash flow projections based on actual operating results, the budget for FY2012 and forecasts drawn from years two and three of the Group’s three-year forecast for FY2013 and FY2014. Cash flows for a further 17 year period are extrapolated using a growth rate of 3.0 per cent per annum. The Group believes this growth rate is a conservative estimate of the long-term average growth rates achievable in the industries in which the Group participates. A pre-tax discount rate of 10.7 per cent has been used in discounting the projected cash flows. The same parameters were used in performing value in use calculations as at 31 March 2010.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011 65

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

21. intAnGiBle Assets continued

impairment tests for purchased trademarks and brandnames

The recoverable amounts of purchased trademarks and brandnames exceed their carrying amounts and are based on “relief from royalty” methodology, representing value in use calculations. “Relief from royalty” cash flows are extrapolated for a 20 year period using a nil growth rate. A pre-tax discount rate of 10.7 per cent has been used in discounting the projected cash flows. No amortisation is provided against the carrying amounts of purchased trademarks and brandnames on the basis that these assets are considered to have indefinite useful lives. The same parameters were used in performing value in use calculations as at 31 March 2010.

impairment loss

During the year ended 31 March 2011 the Reward Distribution cash generating unit achieved earnings results well below management’s expectations. This has caused management to reassess short term earnings forecasts used in estimating the recoverable amount of goodwill attaching to this cash generating unit. Based on this assessment a goodwill impairment loss of $7,857,000 has been recognised (refer note 8).

software

Software assets are considered to have finite useful lives and are amortised in line with their assessed useful lives.

22. tRADe AnD otHeR pAYABles

22. tRADe AnD otHeR pAYABles
In thousands of AUD	consolidated 2011 2010
Trade payables Other payables and accrued expenses Fair value derivatives	30,133 26,428 65,588 50,029 - 1,670
	95,721 78,127

23. inVestment pRopeRtY

23. inVestment pRopeRtY
In thousands of AUD	consolidated 2011 2010
Carrying amount at the beginning of the year Transfer from capital works in progress Additions Depreciation Carrying amount at end of year	11,138 11,255 - 28 147 - (146) (145)
	11,139 11,138

Investment property comprises a commercial property leased to a third party. The lease contains a non-cancellation period of 4 years 6 months. Subsequent renewals are negotiated with the lessee. See note 27 for further information.

Fair value of the property is estimated to be $15,350,000 based on a capitalisation rate of 9.5%.

24. loAns AnD BoRRowinGs

This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings. For more information about the Group’s exposure to interest rate and foreign currency risk, see note 26.

In thousands of AUD	consolidated 2011 2010
current liabilities Bank loans Finance lease liabilities non-current liabilities Bank loans Long term notes Finance lease liabilities	40,731 6,333 2,051 2,031
	42,782 8,364
	- 190,681 147,000 - 5,680 5,833
	152,680 196,514

66 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

24. loAns AnD BoRRowinGs continued

Bank loans

Bank loans are denominated in Australian dollars and Swedish kronor. Current bank loans comprise the portion of the Group’s bank loans repayable within one year. Funding available to the Group from undrawn facilities at 31 March 2011 amounted to $202,821,000 (2010: $135,715,000).

The weighted average interest rate (incorporating the effect of interest rate contracts) for all bank loans at balance date is 2.1% (2010: 3.8%).

The term loan facilities are committed facilities and are able to be drawn in the form of bank overdrafts, loans or bank guarantees.

The Company and five of its subsidiaries, namely Australian Laboratory Services Pty Ltd, ALS Canada Limited, ALS Czech Republic s.r.o., ALS Scandinavia AB, and CBL Campbell Brothers USA, Inc are parties to multi-currency term loan facility agreements as borrowers with a number of banks.

Under the terms of the agreements, the Company and a number of its wholly-owned subsidiaries jointly and severally guarantee and indemnify the banks in relation to each borrower’s obligations.

long term notes

The Company’s controlled entity ALS Group General Partnership issued long term, fixed rate notes to investors in the US Private Placement market in December 2010. The notes are denominated in US dollars and Canadian dollars and mature as follows - 7 years due December 2017: $29,019,000; and 10 years due December 2020: $117,981,000.

Interest is payable semi-annually to noteholders. The weighted average interest rate (incorporating the effect of interest rate contracts) for all long term notes at balance date is 2.3% (2010: n/a).

Under the terms of the note agreements, the Company and a number of its wholly-owned subsidiaries jointly and severally guarantee and indemnify the noteholders in relation to the issuer’s obligations.

finance lease liabilities

finance lease liabilities
In thousands of AUD	consolidated 2011 2010
Included as lease liabilities are the present values of future rentals for leased assets capitalised: Current Non-current Lease commitments in respect of capitalised fnance leases are payable: Within one year Later than one year but not later than fve years Later than fve years Future fnance charges Total lease liability	2,051 2,031 5,680 5,833
	7,731 7,864
	2,633 2,643 5,881 5,426 784 1,696
	9,298 9,765 (1,567) (1,901)
	7,731 7,864

The Group leases plant and equipment under finance leases expiring over terms of up to seven years. At the end of the lease terms the Group generally has the option to purchase the equipment at a percentage of market value - a price deemed to be a bargain purchase option. Lease liabilities are secured by the leased assets as in the event of default the assets revert to the lessor.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011 67

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

25. cApitAl AnD ReseRVes

Reconciliation of movement in capital

In thousands of AUD	consolidated 2011 2010
issued and paid up share capital 67,503,411 ordinary shares fully paid (2010: 62,959,971) Movements in ordinary share capital Balance at beginning of year Share issues: 1,052,032 shares (2010: 987,111) under Dividend Reinvestment Plan (1) Nil shares (2010: 8,939,575) under Share rights offer (2) 3,491,408 shares (2010: Nil) pursuant to Ammtec takeover offer (3) Balance at end of year	610,382 456,734
	456,734 242,724 32,600 21,595 - 192,415 121,048 -
	610,382 456,734

(1) Issued pursuant to the Company’s Dividend Reinvestment Plan:

1 July 2010 – 557,524 shares at $26.71, 21 December 2010 – 494,508 shares at $35.81

(2) Issued pursuant to the Company’s 1 for 6 share rights offer (net of transaction costs of $4,256,000):

11 November 2009 – 8,939,575 ordinary shares at $22.00 per share

(3) Issued pursuant to the Company’s takeover offer for Ammtec Ltd:

5 November 2010 – 17 December 2010: issued 3,491,408 ordinary shares at average price of $34.67 per share

Effective 1 July 1998, the Company Law Review Act abolished the concept of par value shares and the concept of authorised capital. Accordingly, the Company does not have authorised capital or par value in respect of its issued shares.

terms and conditions

Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders’ meetings. In the event of winding up of the Company, ordinary shareholders rank after creditors and are entitled to the net proceeds of liquidation.

employee share plan

The Group has an Employee Share Plan (“the Share Plan”) which is closed to new participants. The last share loan offer under the Share Plan was made mid-2006. Any participation in a Company-sponsored employee incentive scheme is now via the Company’s LTI plan – refer note 37.

Under the Share Plan, eligible employees of the Company or of its subsidiaries may acquire ordinary fully paid shares in the Company. An external third party is trustee of the Share Plan.

Participation in the Share Plan by employees was at the discretion of the Board of Directors. The Board sets the conditions under which employees can participate having regard to length of service and salary range. The Board administers the Share Plan as a non-discriminatory plan within the meaning of Australian taxation legislation. The price of shares issued under the Share Plan was determined at the discretion of directors and may be less than the prevailing market price. Employees were offered loans from a subsidiary to finance their purchase of shares under the plan. Plan loans are interest free and repayable over 25 years.

Shares acquired by an employee under the Share Plan are held by a trustee for at least three years and until the whole of any related loan has been paid in full by the employee. Once the loan has been repaid and a period of three years has expired, the trustee transfers the shares to the employee. Dividends are applied by the trustee in reducing the employee’s plan loan. During the period while shares are held by the trustee, the employee does not have voting rights in respect of those shares. On termination of employment, an employee has thirty days in which to decide whether to either repay the loan and receive their shares by way of transfer from the trustee or request that the shares be sold by the trustee after which any proceeds in excess of the outstanding loan amount are paid to the employee.

The aggregate number of shares held by the trustee under the Share Plan at any time must not exceed 5% of the total issued capital of the Company. No shares were issued under the Share Plan during the financial year (2010: Nil). The market price of shares issued under the Share Plan as at 31 March 2011 was $46.35 (2010: $29.55).

Details of the movement in employee shares under the Share Plan are as follows:

	2011 no 2010 No.
Number of shares at beginning of year Number of share issued to employees Number of shares distributed to employees number of shares at end of year	201,800 350,300 - - (151,800) (148,500)
	50,000 201,800

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

25. cApitAl AnD ReseRVes continued

employee share plan continued

The amounts recognised as receivable in the financial statements of the Group in relation to employee shares at the end of the year are:

	consolidated 2011 $ 2010 $
Current receivables – Other debtors	191,250 326,771

Reserves

The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations where their functional currency is different to the presentation currency of the reporting entity, as well as from the translation of liabilities that hedge the Company’s net investment in a foreign subsidiary.

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred.

The employee share-based awards reserve comprises the cumulative amount, recognised as an employee expense to date, of the fair value at grant date of share-based, share-settled awards granted to employees. Refer to notes 3(m) and 37.

Dividends

Dividends recognised in the current year by the Company are:

In thousands of AUD Centsper share Franked amount (cents)	Total amount Date ofpayment
2011 Interim 2011 ordinary 65.0 32.5 Final 2010 ordinary 55.0 27.5 Total amount 2010 Interim 2010 ordinary 45.0 22.5 Final 2009 ordinary 50.0 25.0 Total amount Dividend declared after the end of the fnancial year: Final 2011 ordinary 75.0 37.5
	43,524 21 December 2010
	34,628 1 July 2010
	78,152
	28,152 16 December 2009 26,517 1 July 2009 54,669 50,628

The financial effect of this dividend has not been brought to account in the financial statements for the year ended 31 March 2011 and will be recognised in subsequent financial reports.

The franked components of all dividends paid or declared since the end of the previous financial year were franked based on a tax rate of 30%.

Dividend franking account

Dividend franking account
In thousands of AUD	consolidated 2011 2010
30% franking credits available to shareholders of Campbell Brothers Limited for subsequent fnancial years	18,427 8,741

The above available amounts are based on the balance of the dividend franking account at year-end adjusted for:

(a) franking credits that will arise from the payment of the current tax liabilities;

(b) franking debits that will arise from the payment of dividends recognised as a liability at the year-end;

(c) franking credits that will arise from the receipt of dividends recognised as receivables by the tax consolidated group at the year-end; and

(d) franking credits that the entity may be prevented from distributing in subsequent years.

The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends.

The impact on the dividend franking account of dividends proposed after the balance sheet date but not recognised as a liability is to reduce it by $10,849,000 (2010: $7,420,000).

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

26. finAnciAl instRuments

liquidity risk

Contractual maturities for financial liabilities on a gross cash flow basis are analysed below: consoliDAteD

As at 31 March 2011

In thousands of AUD	6 months or less 6 to 12 months 1 to 2 years 2 to 5 years Over 5 years Total
Non-derivative fnancial liabilities Bank overdraft Trade and other payables Finance lease liabilities Long term notes Bank loans Derivative fnancial liabilities Interest rate contracts used for hedging total consoliDAteD As at 31 March 2010 In thousands of AUD
	3,135 - - - - 3,135
	95,721 - - - - 95,721
	1,217 1,416 2,567 3,314 784 9,298
	3,265 3,265 6,513 19,556 174,445 207,044
	1,454 39,759 100 - - 41,313


	(1,248) (1,388) (1,589) 2,452 9,387 7,614
	103,544 43,052 7,591 25,322 184,616 364,125
	6 months or less 6 to 12 months 1 to 2 years 2 to 5 years Over 5 years Total
Non-derivative fnancial liabilities Bank overdraft Trade and other payables Finance lease liabilities Bank loans Derivative fnancial liabilities Interest rate contracts used for hedging total	19 - - - - 19 78,127 - - - - 78,127 1,178 1,466 1,875 3,551 1,695 9,765 7,417 19,146 138,390 40,324 - 205,277 1,216 569 (375) - - 1,410
	87,957 21,181 139,890 43,875 1,695 294,598

currency Risk

The Group’s exposure to foreign currency risk at balance date was as follows, based on notional amounts:

consoliDAteD

In thousands of AUD	2011
	USD CAD SEK CZK EUR PLN
Trade and other receivables Cash at bank Bank loan Long term notes Trade and other payables Gross balance sheet exposure Forward exchange contracts net exposure	7,460 - - - 811 12
	22,532 - - - 2,543 67
	- - (15,336) - - -
	- (64,780) - - - -
	(1,590) - - - (7) -
	28,402 (64,780) (15,336) - 3,347 79

	- - - (20,385) - -
	28,402 (64,780) (15,336) (20,385) 3,347 79

70 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

26. finAnciAl instRuments continued

currency Risk continued

consoliDAteD

In thousands of AUD	2010
	USD CAD SEK CZK
Trade and other receivables Cash at bank Bank loan Trade and other payables Gross balance sheet exposure Forward exchange contracts net exposure	12,048 - - - 18,308 1 - - (25,166) - (15,121) - (1,594) (2) - -
	3,596 (1) (15,121) - - - - (21,129)
	3,596 (1) (15,121) (21,129)

The following exchange rates against the Australian dollar applied at 31 March:

31 march spot rate 2011 2010	31 march spot rate 2011 2010
USD 1.034 CAD 1.003 SEK 6.521 CZK 17.906 EUR 0.7295 PLN 2.9321	0.916 0.931 6.613 17.275 n/a n/a

sensitivity analysis

A 10 percent strengthening of the Australian dollar against the above balances at 31 March would have increased (decreased) profit before income tax and equity by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2010.

In thousands of AUD	consolidated Proft Equity
As at 31 March 2011 USD CAD SEK CZK EUR PLN 31 March 2010 USD CAD SEK CZK
	(2,582) -
	- 5,889
	- -
	- 1,853
	(304) -
	(7) 1,394
	(2,893) 9,136
	(2,615) 2,288 - - - 1,375 - 1,921
	(2,615) 5,584

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CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

26. finAnciAl instRuments continued

sensitivity analysis continued

A 10 percent weakening of the Australian dollar against the above balances at 31 March would have increased (decreased) profit before income tax and equity by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2010.

The analysis is performed on the same basis for 2010.
In thousands of AUD	consolidated Proft Equity
As at 31 March 2011 USD CAD SEK CZK EUR PLN 31 March 2010 USD CAD SEK CZK
	3,156 -
	- (7,198)
	- (1,704)
	- (2,265)
	372 -
	9 -
	3,537 (11,167)
	3,196 (2,796) - - - (1,680) - (2,348)
	3,196 (6,824)

interest rate risk

At the reporting date the interest rate profile of the Company’s and the Group’s interest-bearing financial instruments was:

In thousands of AUD	consolidated 2011 2010
fixed rate instruments Financial assets Financial liabilities Variable rate instruments Financial assets Financial liabilities Effect of interest rate contracts (notional amounts)	- 3,161 (7,731) (7,864)
	(7,731) (4,703)
	87,123 57,937 (190,866) (197,033) - 91,111
	(103,743) (47,985)

sensitivity analysis

Fair value sensitivity analysis for fixed rate instruments

The Group has designated interest rate contracts as hedging instruments under a fair value hedge accounting model in relation to its fixed rate long term notes. The interest rate contracts swap the fixed interest payable on the loan notes to variable interest rates for the term of the debt. In accordance with the Group’s accounting policy (refer note 3(d)) changes in fair value of the interest rate contracts together with the change in fair value of the debt arising from changes in interest rates are recognised in the profit and loss (to the extent the fair value hedge is effective). A change of 50 basis points in interest rates at the reporting date would not materially impact the Group’s profit and loss before income tax or equity (2010: Nil).

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

26. finAnciAl instRuments continued

sensitivity analysis continued

Cash flow sensitivity analysis for variable rate instruments

A change of 50 basis points in interest rates at the reporting date would have increased (decreased) profit before income tax and equity by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis for 2010.

In thousands of AUD	consolidated Proft Equity 50 bp increase 50bp decrease 50 bp increase 50 bp decrease
As at 31 March 2011 Variable rate instruments Interest rate contracts – cash fow hedges Cash fow sensitivity (net) As at 31 March 2010 Variable rate instruments Interest rate contracts – cash fow hedges Cash fow sensitivity (net)
	(519) 519 - -
	- - - -
	(519) 519 - -
	(695) 695 - - 491 (491) 405 (405)
	(204) 204 405 (405)

fair values of financial instruments

The Group’s financial assets and liabilities are included in the balance sheet at amounts that approximate fair values. The basis for determining fair values is disclosed in note 5. The fair value at 31 March 2011 of derivative assets (2010: liabilities) held for risk management, which are the Group’s only financial instruments carried at fair value, was a net gain of $1,244,000 (2010: loss of $1,670,000) measured using Level 2 valuation techniques as defined in the fair value hierarchy shown in note 5. The Group does not have any financial instruments that are categorised as Level 1 or Level 3 in the fair value hierarchy.

27. opeRAtinG leAses

leases as lessee

Non-cancellable operating lease rentals are payable as follows:

27. opeRAtinG leAses leases as lessee Non-cancellable operating lease rentals are payable as follows:
In thousands of AUD	consolidated 2011 2010
Less than one year Between one and fve years More than fve years	26,035 25,835 61,379 63,994 27,730 25,951
	115,144 115,780

The Group leases property, plant and equipment under operating leases expiring over terms of up to six years. Leases generally provide the Group with a right of renewal at which time all terms are renegotiated. Some leases provide for additional rent payments that are based on a local price index. Lease commitments in respect of finance leases are disclosed in note 24.

During the year ended 31 March 2011 $32,165,000 was recognised as an expense in the profit and loss statement in respect of operating leases (2010: $27,101,000).

leases as lessor

The Group leases out its investment property held under operating lease (see note 23). The future minimum lease payments receivable under non-cancellable leases are as follows:

In thousands of AUD	consolidated 2011 2010
Less than one year Between one and fve years	1,154 1,125 1,188 2,342
	2,342 3,467

During the year ended 31 March 2011 $1,142,000 was recognised as rental income in the profit and loss statement (2010: $1,118,000).

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

28. cApitAl commitments

28. cApitAl commitments
In thousands of AUD	consolidated 2011 2010
capital expenditure commitments Plant and equipment contracted but not provided for and payable within one year	17,612 5,567

29. continGencies

The directors are of the opinion that provisions are not required in respect of the following matters, as it is not probable that a future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.

purchases of subsidiaries – additional consideration

purchases of subsidiaries – additional consideration

In thousands of AUD

consolidated
2011
2010

During the year the Group acquired US laboratory group, Analytical Laboratory Services Inc. Pursuant to the
agreement additional consideration is payable if certain performance hurdles are achieved over the next two
years. No amount was paid in respect of this arrangement during the year ended 31 March 2011 (2010: Nil).
During the year the Group acquired Czech laboratory group, Analyticke Laboratore Plzen, a.s.. Pursuant to the
agreement additional consideration is payable if certain performance hurdles are achieved over the next fve
years. No amount was paid in respect of this arrangement during the year ended 31 March 2011 (2010: Nil).

967
-
419
-

30. DeeD of cRoss GuARAntee

Pursuant to ASIC Class Order 98/1418 (Class Order) dated 31 March 2011, the wholly-owned subsidiaries listed below are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports, and directors’ reports.

It is a condition of the Class Order that the Company and each of the subsidiaries enter into a Deed of Cross Guarantee. The effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of winding up of any of the subsidiaries under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Act, the Company will only be liable in the event that after six months any creditor has not been paid in full. The subsidiaries have also given similar guarantees in the event that the Company is wound up.

The subsidiaries subject to the Deed are:

ACIRL Proprietary Limited
Ammtec Ltd
Australian Laboratory Services Pty Ltd
Australian Metallurgical & Mineral Testing Consultants Pty Ltd
Australian Metallurgical & Mineral Testing Consultants Pty Ltd atf Ammtec Unit Trust
Bushland Products Pty Ltd
Currey Pty Ltd
Ecowise Australia Pty Ltd
Ecowise Environmental Pty Ltd
PearlStreet ETRS Pty Ltd
PearlStreet Limited
PearlStreet Metlabs Pty Ltd
Reward Supply Co. Pty Ltd
Reward Supply Co. (N.Q.) Pty Ltd

A consolidated profit and loss statement, consolidated statement of comprehensive income and consolidated balance sheet, comprising the Company and subsidiaries which are a party to the Deed, after eliminating all transactions between parties to the Deed of Cross Guarantee, at 31 March 2011 is set out below.

summary profit and loss statement and retained profits

summary proft and loss statement and retained profts
In thousands of AUD	consolidated 2011 2010
Proft before tax Income tax expense Proft after tax Retained profts at beginning of year Dividends recognised during the year Retained profts at end of year	115,005 69,909 (20,496) (13,729)
	94,509 56,180 19,590 18,079 (78,152) (54,669)
	35,947 19,590

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

30. DeeD of cRoss GuARAntee continued

statement of comprehensive income

In thousands of AUD	consolidated 2011 2010
Proft for the period Other comprehensive income Net gain/(loss) on cash fow hedges taken to equity total comprehensive income for the period	94,509 56,180 2,040 2,806
	96,549 58,986

All movements in comprehensive income are disclosed net of applicable income tax.

Balance sheet

Balance sheet
In thousands of AUD	consolidated 2011 2010
Assets Cash and cash equivalents Trade and other receivables Inventories Other total current assets Receivables Investments accounted for using the equity method Investment property Deferred tax assets Property, plant and equipment Intangible assets Other investments total non-current assets total assets liabilities Trade and other payables Loans and borrowings Income tax payable Employee benefts total current liabilities Loans and borrowings Employee benefts Other total non-current liabilities total liabilities net assets equity Share capital Reserves Retained earnings total equity	15,899 11,937 101,554 85,684 36,933 42,638 4,177 4,072
	158,563 144,331
	100,675 99,091 17,134 19,027 11,139 11,138 10,452 9,784 144,016 93,368 334,866 241,292 86,328 64,296
	704,610 537,996
	863,173 682,327
	53,772 49,072 43,216 6,611 6,144 2,887 23,606 18,489
	126,738 77,059
	84,254 124,301 2,558 3,980 914 973
	87,726 129,254
	214,464 206,313
	648,709 476,014
	610,382 456,734 2,380 (310) 35,947 19,590
	648,709 476,014

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

31. pARent entitY DisclosuRes

Result of parent entity

31. pARent entitY DisclosuRes Result of parent entity
In thousands of AUD	2011 2010
Proft for the period Other comprehensive income Total comprehensive income for the period financial position of parent entity at year end In thousands of AUD	75,715 56,530 2,040 2,806
	77,755 59,336
	2011 2010
Current assets Total assets Current liabilities Total liabilities net assets Share capital Reserves Retained earnings total equity parent entity capital commitments In thousands of AUD	8,995 39,993 764,814 624,212
	54,881 22,211 143,169 156,469
	621,645 467,743
	610,382 456,734 2,380 (310) 8,883 11,319
	621,645 467,743
	2011 2010
Plant and equipment contracted but not provided for and payable within one year	560 367
	560 367

parent entity guarantees in respect of the debts of its subsidiaries

The Company is party to a number of financing facilities and a Deed of Cross Guarantee under which it guarantees the debts of a number of its subsidiaries. Refer to notes 24 and 30 for details.

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

32. consoliDAteD entities

32. consoliDAteD entities
	Footnote	Country of	Ownership	interest %
		Incorporation
			2011	2010
parent entity
Campbell Brothers Limited		Australia
subsidiaries
Australian Laboratory Services Pty Ltd		Australia	100	100
ACIRL Proprietary Ltd		Australia	100	100
ACIRL Quality Testing Services Pty Ltd		Australia	100	100
ALS Analytical Testing (Shanghai) Co. Ltd	3	China	100	100
ALS Bolivia Ltda	3	Bolivia	100	100
ALS Brasil Ltda	3	Brazil	100	100
ALS Canada Ltd		Canada	100	100
Manitoba Technology Centre Ltd		Canada	100	100
ALS (Barbados) Ltd	3	Barbados	100	100
ALS Chemex de Mexico S.A. de C.V.	3	Mexico	100	100
ALSMX, S.A. de C.V.	3	Mexico	100	100
ALS-Indequim, S.A. de C.V.	3	Mexico	100	100
ALS Chemex South Africa (Proprietary) Ltd		South Africa	100	100
ALS Global Mozambique, Limitada	2	Mozambique	100	-
ALS Laboratory Namibia (Proprietary) Ltd		Namibia	100	100
ALS Liberia Ltd		Liberia	100	100
Australian Laboratory Group (Zambia) Limited	2	Zambia	100	-
ALS Chemex (Guangzhou) Ltd		China	100	100
ALS Colombia Ltda		Colombia	100	100
ALS Czech Republic s.r.o	3	Czech Republic	100	100
Analyticke Laboratore Plzen, a.s.	1	Czech Republic	100	-
ALS Ghana Limited		Ghana	100	100
ALS Group General Partnership	2	USA	100	-
CBL Campbell Brothers USA, Inc		USA	100	100
ALS Group USA, Corp		USA	100	100
ALS Services USA, Corp. (formerly Staveley Services North America, Inc)		USA	100	100
ALS USA, Corp	5	USA	-	100
ALS USA MI, Corp	5	USA	-	100
ALS USA, Inc		USA	100	100
Analytical Laboratory Services, Inc.	1	USA	100	-
Panamex Pacifc, Inc		USA	100	100
ALS Guinee SARL		Guinea	100	100
ALS Ivory Coast SARL	2	Ivory Coast	100	100
ALS Laboratory Group New Caledonia		New Caledonia	60	60
ALS Laboratory Group (Thailand) Co. Ltd		Thailand	100	100
ALS Naledi (Proprietary) Ltd	2	South Africa	100	-
ALS Pacifc Limited		Fiji	100	100
ALS Patagonia S.A.	3	Chile	100	100

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

32. consoliDAteD entities continued

32. consoliDAteD entitiescontinued
	Footnote	Country of	Ownership	interest %
		Incorporation
			2011	2010
ALS Peru S.A.	3	Peru	100	100
ALS Romania S.R.L	3	Romania	100	100
ALS Scandinavia AB		Sweden	100	100
ALS Finland OY		Finland	100	100
ALS Chita Holdings AB	4	Sweden	-	100
ALS Laboratory Group LLC		Russia	100	100
ALS Laboratory Group Norway AS	2	Norway	100	-
ALS Laboratory Group S.L.		Spain	100	100
ALS Laboratory Services Limited Sirketi		Turkey	100	100
ALS Poland Sp. z.o.o.		Poland	100	100
ALS Portugal Lda		Portugal	100	100
ALS Taiwan Co. Ltd	3	Taiwan	51	51
ALS Technichem (HK) Pty Ltd		Hong Kong	100	100
ALS Technichem (Singapore) Pte Ltd		Singapore	100	100
ALS Testing Services (Thailand) Co. Ltd		Thailand	100	100
ALS Tribology (Proprietary) Ltd	2	South Africa	100	-
Ammtec Ltd	1	Australia	100	-
Australian Metallurgical & Mineral Testing Consultants Pty .Ltd.	1	Australia	100	-
Purity Systems, Inc.	1	USA	74.9	-
PSI Purifying Systems Commercial Trading (Changzhou) Company Limited	1	China	100	-
Marc Technologies Pty Ltd	1	Australia	100	-
ASL International Ltd	3	Barbados	100	100
Australian Laboratory Services (ALS) Cambodia Co., Ltd	2	Cambodia	100	-
Carolab (Proprietary) Ltd		South Africa	73.9	73.9
Ecowise Environmental Pty Ltd		Australia	100	100
Ecowise Australia Pty Ltd		Australia	100	100
Ecowise Technologies Pty Ltd	4	Australia	-	100
Group de Laboratoire ALS MALI SARL	3	Mali	100	100
Abilab Burkina SARL	3	Burkina Faso	100	100
Abilab Exploitation SARL	3	Mali	100	100
PearlStreet Pty Ltd (formerly PearlStreet Limited)		Australia	100	100
PearlStreet Accura Pty Ltd		Australia	100	100
PearlStreet Energy Pty Ltd		Australia	100	100
PearlStreet ETRS Pty Ltd		Australia	100	100
PearlStreet Metlabs Pty Ltd		Australia	100	100
PearlStreet Metlabs NC	2	New Caledonia	100	-
Witlab (Proprietary) Ltd		South Africa	100	100
ALS Russian Holdings Pty Ltd		Australia	100	100
ALS Chita Laboratory LLC		Russia	75	75
Bushland Products Pty Ltd		Australia	100	100
Panamex Pacifc (Singapore) Pte. Ltd.	2	Singapore	100	-

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

32. consoliDAteD entities continued

	Footnote	Country of	Ownership	interest %
		Incorporation
			2011	2010
Carpi Ltd		PNG	100	100
Panamex Pacifc (PNG) Ltd		PNG	100	100
CBL Campbell Brothers NZ Ltd		NZ	100	100
Panamex Pacifc, Inc		American Samoa	100	100
Panamex Pacifc Ltd		NZ	100	100
Reward Supply Co. Pty Ltd		Australia	100	100
Pandee Services Pty Ltd	4	Australia	-	100
Parker Sales & Service Pty Ltd		Australia	51	51
Reward Supply Co. (N.Q.) Pty Ltd		Australia	100	100
Currey Pty Ltd		Australia	100	100
Reward Supply Co. (N.T.) Pty Ltd		Australia	51	51
Footnotes
1. Subsidiaries acquired during the year.

Subsidiaries incorporated during the year.
Subsidiaries with a financial year end of 31 December, which differs from the Company’s year end of 31 March.
Subsidiaries voluntarily deregistered during the year.
Subsidiaries merged into ALS Group USA, Corp. during the year.

33. ReconciliAtion of cAsH flows fRom opeRAtinG ActiVities

33. ReconciliAtion of cAsH flows fRom opeRAtinG ActiVities
In thousands of AUD	consolidated 2011 2010
cash fows from operating activities Proft for the period Adjustments for: Amortisation and depreciation Finance charges on capitalised leases Finance income on capitalised leases Foreign exchange gain/(loss) (Proft)/loss on sale of property plant and equipment Share-settled performance rights awarded during the year Share of associates and joint venture net proft Gain on sale of chemical and cleaning solutions business Write-down to recoverable amount goodwill and inventories in Reward Distribution segment Net non-cash expenses operating cashfow before changes in working capital and provisions (Increase)/decrease in trade and other receivables (Increase)/decrease in inventories (Decrease)/increase in trade and other payables (Decrease)/increase in taxation provisions net cash from operating activities	132,290 74,891 42,171 39,944 546 620 (172) (300) - - 389 177 975 662 (243) (1,667) (8,654) - 9,405 - 2,672 (509)
	179,379 113,818 (24,803) (8,480) (11,381) (658) 8,730 1,399 6,917 (6,514)
	158,842 99,565

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011 79

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

34. AcQuisitions of suBsiDiARies AnD non-contRollinG inteRests

Business combinations

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----- Start of picture text -----

In thousands of AUD Interest Acquired Date Acquired Consideration
2011
Ammtec Ltd 100% November 2010 161,044
Analytical Laboratory Services, Inc 100% December 2010 10,117
Analyticke Laboratore Plzen,a.s. 100% January 2011 890
Business assets acquired during the year (a) 2,777
----- End of picture text -----

(a) Business assets acquired have been absorbed into subsidiaries

If the acquisitions had occurred on 1 April 2010, management estimates that Group revenue would have been $1,150,590,000 and net profit would have been $138,918,000.

In thousands of AUD	Interest Acquired	Date acquired	Consideration
2010
ALS Laboratory Group New Caledonia	60%	July 2009	1,564
PearlStreet Limited	100%	December 2009	71,999
Ecowise Environmental Pty Ltd	100%	November 2009	40,698

If the acquisitions had occurred on 1 April 2009, management estimates that Group revenue would have been $937,182,000 and net profit would have been $80,539,000.

Ammtec limited: net assets at acquisition dates

Ammtec limited: net assets at acquisition dates
In thousands of AUD	Recognised values
	2011
Property, plant and equipment Inventories Trade and other receivables Deferred tax assets Cash and cash equivalents Interest-bearing loans and borrowings Employee benefts Trade and other payables Deferred tax liabilities Net identifable assets and liabilities Non-controlling interest at acquisition Goodwill on acquisition Shares issued (refer note 25) Consideration paid, satisfed in cash Cash (acquired) Net cash outfow	42,108
	2,505
	21,596
	2,290
	1,586
	(9,085)
	(2,964)
	(14,710)
	(866)
	42,460
	(106)
	118,690
	(121,048)
	39,996
	(1,586)
	38,410

Directly attributable transaction costs of $2,339,000 were included in administration and other expenses in the profit and loss statement. In the period to 31 March 2011 Ammtec contributed a net profit of $5,884,000 to the consolidated net profit for the year.

Ammtec was acquired for the purpose of adding metallurgical services to the Group’s capabilities in servicing mining and mineral exploration companies. The goodwill recognised on acquisition is attributable mainly to skills and technical talent of Ammtec’s workforce and the synergies expected to be achieved from integrating the company into the Group’s existing business. The goodwill is not expected to be deductible for income tax purposes.

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

34. AcQuisitions of suBsiDiARies AnD non-contRollinG inteRests continued

Analytical laboratory services, inc net assets at acquisition dates

In thousands of AUD	Recognised values
	2011
Property, plant and equipment Inventories Trade and other receivables Cash and cash equivalents Trade and other payables Net identifable assets and liabilities Goodwill on acquisition Consideration paid, satisfed in cash Cash (acquired) Net cash outfow	1,164
	457
	2,896
	1
	(514)
	4,004
	6,114
	10,118
	(1)
	10,117

Directly attributable transaction costs of $165,000 were included in administration and other expenses in the profit and loss statement.

In the period to 31 March 2011 Analytical Laboratory Services, Inc contributed a net profit of $248,000 to the consolidated net profit for the year.

The goodwill recognised on acquisition is attributable mainly to skills and technical talent of the acquired business’s workforce and the synergies expected to be achieved from integrating the company into the Group’s existing business. The goodwill is not expected to be deductible for income tax purposes.

other acquirees’ net assets at acquisition dates

In thousands of AUD	Recognised values 2011 2010
Property, plant and equipment Identifable intangible assets Inventories Trade and other receivables Deferred tax assets Cash and cash equivalents Interest-bearing loans and borrowings Employee benefts Trade and other payables Deferred tax liabilities Net identifable assets and liabilities Non-controlling interest at acquisition Goodwill on acquisition Consideration paid, satisfed in cash (a) Cash (acquired) Net cash outfow	1,132 21,774 - 227 38 2,048 260 27,388 - 6,332 55 2,240 - (49,758) - (9,274) (201) (17,229) (42) (1,753)
	1,242 (18,005) - (691) 2,425 132,957
	3,667 114,261 (55) (2,240)
	3,612 112,021

Directly attributable transaction costs of $336,000 were included in administration and other expenses in the profit and loss statement.

(a) 2010 comparative includes directly attributable transaction costs of $2,463,000.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

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Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

35. KeY mAnAGement peRsonnel DisclosuRes

The following were key management personnel of the Group at any time during the reporting period and unless otherwise indicated were key management personnel for the entire period:

non-executive directors	executives
G J McGrath (Chairman)	B McDonald (Executive Vice President, ALS Minerals)
N Withnall	R Naran (Executive Vice President, ALS Environmental – North America and Europe)
M D Kriewaldt	B Williams (Group General Manger, ALS Environmental – Australia, Asia and ALS Industrial)
R G Hill	P McPhee (Group General Manager, ALS Coal)
B R Brown	P Jordan (Group General Manager, ALS Tribology)
M Bridges	D Brown (Group General Manager, Chemical Division)
	A Ross (Group General Manager, Reward Distribution – appointed August 2010)
executive Directors	former executive
G F Kilmister (Managing Director and CEO)	C Clements

(former Group General Manager, Reward Distribution – ceased employment August 2010)

The key management personnel compensation included in employee expenses are as follows:

In AUD	consolidated 2011 2010
Short term employee benefts Post-employment benefts Value of share-based awards Termination benefts Other long term benefts	5,018,692 3,938,007 266,490 208,516 947,458 262,271 82,738 - 6,944 297,136
	6,322,322 4,705,930

loans to key management personnel and their related parties (consolidated)

Details regarding loans outstanding at the reporting date to key management personnel and their related parties, where the individual’s aggregate loan balance exceeded $100,000 at any time in the reporting period, are as follows:

			Interest paid and payable in the
	Opening Balance	Closing Balance	reporting period	Highest balance in period
2011	$	$	$	$
Director
G F Kilmister	261,146	191,250	-	261,146
			Interest paid and payable in the
	Opening Balance	Closing Balance	reporting period	Highest balance in period
2010	$	$	$	$
Director
G F Kilmister	401,914	261,146	-	401,914

Details regarding the aggregate of loans made, guaranteed or secured by any entity in the Group to key management personnel and their related parties, and the number of individuals in each group, are as follows:

			Interest paid and payable in the
	Opening Balance	Closing Balance	reporting period	Number in group
	$	$	$	at 31 March
Total for key management
personnel and their related
entities:
Director
2011 2010 executives 2011	261,146 401,914 7,176	191,250 261,146 -	- - -	1 1 -
2010	34,218	7,176	-	2

Loans made to the key management personnel are interest free (2010: 0%). These loans have been made to executives under the terms of the Company’s Employee Share Plan. Refer to note 25 for terms and conditions of loans under the Employee Share Plan. These loans are on terms and conditions no more favourable than loans available to other employees under the Plan. No amounts have been written off, or recorded as allowances, as the balances are considered fully collectible.

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CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

35. KeY mAnAGement peRsonnel DisclosuRes continued

equity instruments

Movements in shares

The movement during the year in the number of ordinary shares in Campbell Brothers Limited held directly, indirectly or beneficially by each key management person, including their related parties, is as follows:

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2011 Opening Balance Purchases Sales Closing Balance
Director
-
G J McGrath 297,810 - 297,810
N Withnall 2,462 97 - 2,559
M D Kriewaldt 37,957 1,274 - 39,231
-
-
R G Hill 14,000 14,000
-
B R Brown 50,000 - 50,000
M J Bridges 1,479 891 - 2,370
G F Kilmister 149,989 3,492 - 153,481
executives
-
- - -
B McDonald
-
R Naran - - -
B Williams 9,249 183 - 9,432
-
- - -
P McPhee
-
P Jordan 6,000 - 6,000
-
D Brown - - -
-
A Ross - - -
-
- - -
C Clements
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All purchases and sales complied with the Board’s Securities Trading Policy which permits trading by directors and executives during certain periods in the absence of knowledge of price-sensitive information.

Movements in performance rights over ordinary shares granted as compensation

The movement during the year in the number of performance rights over ordinary shares in Campbell Brothers Limited held directly, indirectly or beneficially by each key management person, including their related parties, is set out below. No rights vested or were converted to ordinary shares during the financial year. No rights were vested and exercisable as at the end of the year.

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2011 Opening Balance Granted as compensation Forfeited Closing Balance
Director
-
G F Kilmister 37,091 10,676 47,767
executives
-
B McDonald 12,709 3,754 16,463
R Naran (a) 2,112 3,907 - 6,019
-
B Williams 8,463 3,203 11,666
-
P McPhee 8,664 3,203 11,867
P Jordan 5,365 1,868 - 7,233
D Brown 2,726 - - 2,726
A Ross - - - -
- -
C Clements 1,711 1,711
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(a) Performance rights granted to Mr Naran are cash-settled rights. Performance rights granted to all other executives above are equity-settled.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011 83

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

36. non-KeY mAnAGement peRsonnel RelAteD pARtY DisclosuRes

The Group has a related party relationship with its associates and joint ventures (see note 18) and with its key management personnel (see note 35).

37. sHARe-BAseD pAYments

In 2008 the Group established a Long Term Incentive Plan (LTIP) designed as a retention and reward tool for high performing personnel. Under the Plan key employees may be granted conditional performance rights to receive ordinary shares in the Company at no cost to the employees (or in limited cases to receive cash-settled awards). The terms and conditions of the performance rights granted to date are set out below:

	Year ended 31
	march 2011		Year ended 31 March 2010		Year ended 31 March 2009
equity-settled rights
Date of grant	27/7/10	24/11/09	1/10/09	30/6/09	3/9/08	5/8/08
Number of performance rights	37,134	32,587	11,676	34,203	28,184	7,388
Testing date for performance hurdles	31/3/13	31/3/12	31/3/12	31/3/12	31/3/11	31/3/11
Vesting date	1/7/13	1/7/12	1/7/12	1/7/12	1/7/11	1/7/11
cash-settled rights
Date of grant	27/7/10		1/10/09		3/9/08
Number of performance rights	10,076		15,684		8,966
Testing date for performance hurdles	31/3/13		31/3/12		31/3/11
Vesting date	1/7/13		1/7/12		1/7/11

All equity-settled performance rights refer to rights over ordinary shares in the Company and entitle an executive to ordinary shares on the vesting date, subject to the achievement of performance hurdles set out below. The rights expire on termination of an executive’s employment prior to the vesting date or upon the failure of achievement of the performance hurdles.

All cash-settled performance rights expire on termination of an executive’s employment prior to the vesting date or upon the failure of achievement of the performance hurdles. The amount of cash payment is determined based on the volume weighted average price of the Company’s shares over the 20 trading days following the release of the Group’s full year results for the final year of each performance period.

All of the above rights carry an exercise price of nil. 1,711 equity-settled performance rights originally issued on 3 September 2008 were forfeited upon termination of employment during the year. No rights were vested or exercised during the year.

Vesting conditions in relation to the rights issued during the current year

Employees must be employed by the Group on the vesting date. The rights vest only if Earnings Per Share (“EPS”) or relative Total Shareholder Return (“TSR”) hurdles are achieved by the Company over the specified performance period. 50 percent of each employee’s rights are subject to EPS measurement and 50 percent are subject to the TSR measurement. The performance hurdles and vesting proportions for each measure are as follows:

are as follows:
Compound annual diluted EPS growth from 1 April 2010 to 31 March 2013	Proportion of performance rights that may be exercised if EPS growth hurdle is met
Less than 13% per annum	0%
13% per annum	25%
Between 13% and 20% per annum	Straight line vesting between 25% and 50%
20% or higher per annum	50% (i.e. 50% of total grant)
TSR of Campbell Brothers relative to TSRs of comparator companies over the period from 1 April 2010 to 31 March 2013	Proportion of performance rights that may be exercised if TSR hurdle is met
Less than the 50th percentile	0%
50th percentile	25%
Between 50th percentile and 75th percentile	Straight line vesting between 25% and 50%
75th percentile or higher	50% (i.e. 50% of total grant)
Comparator companies	International companies: Bureau Veritas (France), Core Laboratories (USA), Eurofns (France & Germany), Intertek (UK), SGS (Switzerland). Australian companies: Ausenco, Boart Longyear, Cardno, Clough, Coffey International, Industrea, MacMahon Holdings, Monadelphous, Orica, Sedgman, Servcorp, Transfeld Services, WorleyParsons.

The cumulative performance hurdles are assessed at the testing date and the “at risk” LTI component becomes exercisable or is forfeited by the executive at this time. New offers of participation are ratified by the Remuneration Committee.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

37. sHARe-BAseD pAYments continued

expenses recognised as employee costs in relation to share-based payments

The fair value of services received in return for performance rights granted during the year ended 31 March 2011 is based on the fair value of the rights granted measured using Binomial Tree (EPS hurdle) and Monte-Carlo Simulation (TSR hurdle) valuation methodologies with the following inputs:

	Granted 2011		Granted 2010
equity-settled rights
Date of grant	27 july 2010	24 Nov 2009	1 Oct 2009	30 June 2009
Weighted average fair value at date of grant	$25.06	$23.57	$26.91	$17.29
Share price at date of grant	$31.31	$26.99	$31.15	$20.70
Expected volatility	45%	50%	50%	50%
Expected life	2.9 years	2.6 years	2.8 years	3.0 years
Risk-free interest rate	4.71%	4.75%	4.65%	4.63%
Dividend yield	3.50%	3.50%	4.00%	4.00%
cash-settled rights
Date of grant	27 july 2010		1 Oct 2009
Weighted average fair value at date of grant	$25.06		$26.91
Share price at date of grant	$31.31		$31.15
Expected volatility	45%		50%
Expected life	2.9 years		2.8 years
Risk-free interest rate	4.71%		4.65%
Dividend yield	3.50%		4.00%

The fair value of the liability for cash-settled rights, for which performance hurdle testing dates remain in the future, is remeasured at each reporting date and at settlement date using Binomial Tree (EPS hurdle) and Monte-Carlo Simulation (TSR hurdle) valuation methodologies. The model inputs and resulting valuations at 31 March were:

	2011
cash-settled rights
Inputs:			*
Date of grant	27 july 2010 1 Oct 2009	1 Oct 2009	3 Sep 2008
Share price at 31 March	$46.35 $46.35	$29.55	$29.55
Expected volatility	30% 30%	35%	35%
Expected life	2.3 years 1.3 years	2.3 years	1.3 years
Risk-free interest rate	4.92% 4.80%	4.96%	4.59%
Dividend yield	3.50% 3.50%	3.50%	3.50%
Weighted average fair value at grant date	$25.06 $26.91	$26.91	$29.46
Weighted average fair value at 31 March	$40.01 $44.35	$26.71	$26.56

* cash-settled rights granted 3 september 2008

The performance hurdle testing date for cash-settled rights granted on 3 September 2008 was 31 March 2011 (vesting date: 1 July 2011). The fair value of the liability at 31 March 2011 for these cash-settled rights was determined by reference to the Group’s performance against prescribed hurdles over the three year period to the testing date and the Company’s closing share price as at that date:

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011 85

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements

foR tHe YeAR enDeD 31 mARcH 2011

37. sHARe-BAseD pAYments continued

expenses recognised as employee costs in relation to share-based payments continued

	2011
Proportion of performance rights granted September 2008 that will vest 1 July 2011 pursuant to: EPS growth hurdle TSR hurdle Total Share price at 31 March 2011 Weighted average fair value at grant date Weighted average fair value at 31 March
	33%
	50%
	83%
	$46.35
	$29.46
	$38.47

The amount ultimately payable on vesting date will be based on the volume weighted average price of the Company’s shares over the 20 trading days following the release of the Group’s full year results for the year to 31 March 2011.

Expenses recognised in relation to share-based payments during the year were:

In thousands of AUD Note	consolidated 2011 2010
Equity-settled rights granted 2011 8 Equity-settled rights granted 2010 8 Equity-settled rights granted 2009 8 Cash-settled rights granted 2011 8 Cash-settled rights granted 2010 8 Cash-settled rights granted 2009 8 Total expenses recognised as employee costs Total carrying amount of liabilities for cash-settled rights	215 - 606 307 154 355 93 - 302 76 195 128
	1,565 866
	810 220

38. eVents suBseQuent to BAlAnce DAte

86 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Directors’ declaration

In the opinion of the directors of Campbell Brothers Limited (“the Company”):
a. the consolidated financial statements and notes, numbered 1 to 38, and the remuneration report contained in section 7 of the Directors’ report, are in accordance with the Corporations Act 2001, including:
i. giving a true and fair view of the Group’s financial position as at 31 March 2011 and of its performance for the year ended on that date; and
ii. complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001;
b. the financial report also complies with International Financial Reporting Standards as disclosed in note 2(a);
c. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
There are reasonable grounds to believe that the Company and the subsidiaries identified in note 30 will be able to meet any obligations or liabilities to which they are or may become subject, by virtue of the Deed of Cross Guarantee between the Company and those entities, pursuant to ASIC Class Order 98/1418.
The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer for the financial year ended 31 March 2011.

Signed in accordance with a resolution of the directors:

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G j mcGrath Chairman Brisbane 24 May 2011

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G f Kilmister Managing Director Brisbane 24 May 2011

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011 87

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

to tHe memBeRs of cAmpBell BRotHeRs limiteD

Independent auditor’s report

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RepoRt on tHe finAnciAl RepoRt

We have audited the accompanying financial report of Campbell Brothers Limited (the company), which comprises the consolidated balance sheet as at 31 March 2011, and the consolidated profit and loss statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year ended on that date, notes 1 to 38 comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the Group comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ responsibility for the financial report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement whether due to fraud or error. In note 2(a), the directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements of the Group comply with International Financial Reporting Standards.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We performed the procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting Standards, a true and fair view which is consistent with our understanding of the Group’s financial position and of its performance.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor’s opinion

In our opinion:

(a) the financial report of the Group is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the Group’s financial position as at 31 March 2011 and of its performance for the year ended on that date; and

(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.

(b) the financial report also complies with International Financial Reporting Standards as disclosed in note 2(a).

RepoRt on tHe RemuneRAtion RepoRt

We have audited the Remuneration Report included in section 7 of the directors’ report for the year ended 31 March 2011. The directors of the company are responsible for the preparation and presentation of the remuneration report in accordance with Section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with auditing standards.

Auditor’s opinion

In our opinion, the remuneration report of Campbell Brothers Limited for the year ended 31 March 2011, complies with Section 300A of the Corporations Act 2001.

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KpmG

==> picture [109 x 38] intentionally omitted <==

mitchell c petrie Partner Brisbane 24 May 2011

KPMG, an Australian partnership and member firm of the KPMG network of independent member firms affiliated with KPMG International, A Swiss cooperative.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

CAMPBELL BROTHERS LIMITED AND ITS SUBSIDIARIES

Lead auditor’s independence declaration

unDeR section 307c of tHe coRpoRAtions Act 2001

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To: the directors of Campbell Brothers Limited

I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 31 March 2011 there have been:

no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.

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KpmG

==> picture [108 x 38] intentionally omitted <==

mitchell c petrie Partner Brisbane 24 May 2011

KPMG, an Australian partnership and member firm of the KPMG network of independent member firms affiliated with KPMG International, A Swiss cooperative.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

Shareholder Information

twentY lARGest sHAReHolDeRs

as at 17 May 2011

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Registered Holder Address no. of ordinary shares Held % of issued capital
1. J P Morgan Nominees Australia Limited NSW 6,364,920 9.43
2. HSBC Custody Nominees (Australia) Limited NSW 5,179,479 7.67
3. National Nominees Limited VIC 4,541,560 6.73
4. Cogent Nominees Pty Limited NSW 2,765,937 4.10
5. Milton Corporation Limited NSW 2,168,165 3.21
6. Citicorp Nominees Pty Limited VIC 1,861,277 2.76
7. RBC Dexia Investor Services Australia Nominees Pty Limited NSW 1,300,616 1.93
8. Faircase Pty Ltd QLD 1,291,741 1.91
9. J P Morgan Nominees Australia Limited VIC 1,245,112 1.84
10. UBS Nominees Pty Ltd NSW 1,197,768 1.77
11. Australian Foundation Investment Company Limited VIC 794,024 1.18
12. Argo Investments Limited SA 716,395 1.06
13. Gardenglen Pty Ltd QLD 421,535 0.62
14. Mrs Joyce Selina Hinds QLD 392,752 0.58
15. BKI Investment Company Limited NSW 389,734 0.58
16. Mrs Dorothy Anne Stewart QLD 337,250 0.50
17. ANZ Trustees Limited VIC 314,301 0.47
18. Troxfield Pty Ltd QLD 297,810 0.44
19. Mirrabooka Investments Limited VIC 280,031 0.41
20. HSBC Custody Nominees (Australia) Limited - A/C 2 NSW 264,823 0.39
totAl 32,125,230 47.59
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90 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

Shareholder Information

otHeR Asx ReQuiRements

suBstAntiAl sHAReHolDeRs

There were no substantial shareholders as disclosed in substantial shareholding notices given to the Company as at 17 May 2011.

stAtement of QuoteD secuRities

The Company’s total number of shares on issue is 67,503,411 ordinary fully paid shares. At 17 May 2011 the total number of shareholders owning these shares was 9,783 on the register of members maintained by Computershare Investor Services Pty Ltd.

47.59% of total issued capital is held by or on behalf of the twenty largest shareholders.

DistRiBution scHeDule of sHAReHolDeRs

	sHAReHolDeRs
	No. of Shares held	No. of Shareholders
	1 - 1,000	4,692
	1,001 - 5,000	3,583
	5,001 - 10,000	826
	10,001 - 100,000	636
	100,001 and over	46
		9,783

The number of shareholders each holding less than a marketable parcel of the Company’s ordinary shares ($500 in value) at 17 May 2011 was 250.

otHeR sHAReHolDeR infoRmAtion

Visit the Company’s website at www.campbell.com.au for the latest information on the Company’s activities.

sHARe ReGistRY

To update and manage your shareholding easily and quickly, go to www-au. computershare.com and login to Investor Centre to make changes to your address or view balances. Any questions concerning your CBL shareholding, share transfers or dividends, please contact our Share registry, Computershare Investor Services Pty Ltd. They can be contacted by phone on 1300 552 270 (within Australia), +61 7 3237 2100, by fax on +61 7 3229 9860 or online at the above web address.

unceRtificAteD sHARe ReGisteR

VotinG RiGHts

Under the Company’s Constitution, every member entitled to vote who is present at a general meeting of the Company in person or by proxy or by attorney or in the case of a corporation, by representative, shall, upon a show of hands, have one vote only.

Proxies - Where a member appoints 2 proxies, neither proxy is entitled to a vote on a show of hands.

Poll - On a poll, every member entitled to vote shall, whether present in person or by proxy or attorney or, in the case of a corporation, by representative, have one vote for every share held by the member.

options/peRfoRmAnce RiGHts

At 17 May 2011, there were no options held over unissued ordinary shares in the Company. There has been a total of 148,711 Performance Rights granted over unissued ordinary shares in the Company. During the 2010/11 financial year, 37,134 Performance Rights were granted to 16 group executives over unissued shares in the Company, which vest on 1 July 2013 dependent on performance hurdles being met. In previous years, a total of 111,577 Performance Rights were granted to 16 group executives over unissued shares in the Company, with 33,111 Performance Rights vesting on 1 July 2011 and 78,466 Performance Rights vesting on 1 July 2012 respectively, dependent on performance hurdles being met.

The Company’s share register is totally uncertificated. Two forms of uncertificated holdings are available to shareholders:

• Issuer Sponsored holdings: sponsored by the Company. Has the advantage of being uncertificated without the need to be sponsored by a stockbroker.

• Broker Sponsored holdings: sponsored by a stockbroker. This type is attractive to regular stockmarket traders or those shareholders who have their share portfolio managed by a stockbroker.

Holding statements are usually issued to shareholders within 5 business days after the end of any month in which transactions occur that alter the balance of your shareholding.

secuRities excHAnGe listinG

The shares of Campbell Brothers Limited are listed on the Australian Securities Exchange (ASX) under the trade symbol CPB, with Brisbane being the home exchange. Details of trading activity are published in most daily newspapers, generally under the abbreviation of Campbell Bros.

on-mARKet BuY-BAcK

There is no current on-market buy-back of the Company’s Securities.

AnnuAl RepoRts

The latest Annual Report can be accessed from the Company’s website at www. campbell.com.au. If you are a shareholder and wish to receive a hard copy of the annual report, please contact our Share registry, Computershare Investor Services Pty Ltd, to request that the annual report be sent to you in future.

cHAnGinG YouR ADDRess?

If you change your address, please promptly notify our Share registrar in writing. You should quote your SRN (Shareholder Reference Number) or HIN (Holder Identification Number) and also quote your old address as an added security check.

DiRect Deposit into BAnK Accounts

If you choose, your CBL dividends can be paid directly into a bank, building society or credit union account in Australia on the dividend payment date. Details will be confirmed by an advice mailed to you on that date. Application forms are available from the Share registrar.

DiViDenD ReinVestment plAn

The Company’s dividend reinvested plan is suspended until further notice.

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

Ten Year Summary

	2002 $000	2003 $000	2004 $000	2005 $000*	2006 $000	2007 $000	2008 $000	2009 $000*	2010 $000	2011 $000
Sales Revenue 336,219 359,278 390,269 435,562 522,654 662,654 772,286 920,351 825,533 1,108,329 Funds Employed Share capital Reserves Retained earnings Non-controlling interest Non-current liabilities Current liabilities 98,186 828 28,527 300 94,378 48,855 100,067 (2,506) 28,700 230 92,786 53,592 104,327 (7,344) 37,768 995 100,006 48,593 112,185 (421) 37,496 1,971 84,991 65,850 197,923 3,398 53,650 1,681 118,648 85,734 208,692 5,792 83,538 1,525 133,037 83,345 223,111 (6,012) 120,502 604 239,483 99,981 242,724 48 169,140 1,156 106,699 285,321 456,734 (18,199) 189,772 1,437 206,485 118,856 610,382 (30,315) 243,974 1,479 159,759 186,668
Total funds employed 271,074 272,869 284,345 302,072 461,034 515,929 677,669 805,088 955,085 1,171,947
Represented by Property, plant & equipment Current assets Non-current assets Intangibles 87,486 108,337 9,470 65,781 86,572 106,594 13,173 66,530 85,947 111,784 13,284 73,330 89,313 137,529 8,063 67,167 125,361 188,863 10,831 135,979 134,566 215,660 29,170 136,533 152,074 259,075 36,327 230,193 210,344 286,503 40,151 268,090 216,846 294,489 50,658 393,092 265,131 356,587 46,739 503,490
Total assets 271,074 272,869 284,345 302,072 461,034 515,929 677,669 805,088 955,085 1,171,947
Trading Results Financing costs (net) Depreciation & amortisation Proft before tax Income tax expense Proft after tax (before g’will & unusual items) Proft after tax (before g’will & unusual items) - attributable to members Proft after tax, goodwill & unusual items - attributable to members Dividend 4,910 13,931 16,319 5,030 13,548 13,493 11,234 11,607 5,125 15,459 17,238 5,703 14,558 14,919 11,896 11,723 5,752 15,768 21,509 6,903 17,904 17,939 14,641 13,183 5,477 13,999 45,143 10,381 24,966 25,005 34,344 17,297 5,555 16,512 52,075 17,182 34,227 34,177 34,843 23,560 6,849 24,310 86,537 27,519 51,600 51,648 59,066 36,072 9,775 28,172 109,006 31,804 71,655 71,270 76,819 49,456 14,415 37,139 150,708 44,517 106,191 106,209 106,209 52,806 11,121 39,944 105,862 30,971 74,891 75,301 75,301 62,780 10,244 42,172 185,125 52,835 132,144 132,208 132,354 94,152 Other Statistics (Ref) (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) Net tangible asset backing per share $ 1.60 1.53 1.56 2.04 2.37 3.16 2.07 2.73 3.76 4.77 Earnings per share (before g’will & unusual items) c 35.95 37.33 45.05 61.14 75.48 100.08 137.87 195.12 128.35 202.87 Earnings per share (before g’will & unusual items) - attributable to members c 35.81 38.25 45.14 61.24 75.37 100.17 137.13 195.16 129.06 202.97 Earnings per share (after g’will & unusual items) - attributable to members c 29.81 30.50 36.84 84.11 76.84 114.56 147.81 195.16 129.06 203.19 Dividends per share c 30.0 30.0 33.0 42.0 50.0 70.0 95.0 100.0 100.0 140.0 Return on average equity (before g’will & unusual items) % 11.9 11.5 13.7 17.4 16.8 18.6 22.5 28.3 14.4 18.2 Return on average equity (after g’will & unusual items) % 9.9 9.4 11.2 23.9 17.1 21.2 24.1 28.3 14.4 18.2 Net debt (debt - cash) $’000 83,251 85,783 94,040 73,171 85,680 88,907 191,466 209,574 146,960 111,474 Gearing ratio (net debt/(net debt + total equity)) % 39.4 40.4 40.9 32.6 25.0 22.9 36.1 33.7 18.9 11.9 Interest cover (after g’will & unusual items) times 3.8 3.8 4.1 5.6 7.2 8.5 8.3 8.4 7.7 13.9 Interest cover times 4.3 4.4 4.7 9.2 10.4 13.6 12.2 11.5 10.5 19.1 No. of employees 2,165 2,306 2,400 3,090 4,268 4,863 6,854 5,717 7,570 8,936

(a) Following the issue of 7,278,595 shares

(b) Following the issue of 404,680 shares

(d) Following the issue of 1,214,541 shares

(e) Following the issue of 9,723,228 shares (including 1:5 rights issue)

(f) Following the issue of 634,409 shares * 2005 figures restated to AIFRS

(g) Following the issue of 514,100 shares

(h) Following the issue of 896,675 shares

2009 EPS figures restated for rights issue in Nov 09

(i) Following the issue of 9,926,686 shares (including 1:6 rights issue in Nov 09)

(j) Following the issue of 4,543,440 shares (including 3,491,408 shares for Ammtec acquisition)

92 CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011

Principal Offices

cAmpBell BRotHeRs limiteD

Registered Head office

Level 2, 299 Coronation Drive Milton, Brisbane, Queensland 4064 Australia

Telephone: +61 7 3367 7900 Facsimile: +61 7 3367 8156 www.campbell.com.au

Als GRoup

Global corporate Head office

Level 2, 299 Coronation Drive Milton, Brisbane, Queensland 4064 Australia Telephone: +61 7 3367 7900 Facsimile: +61 7 3367 8156 www.alsglobal.com

Als ReGionAl offices

AfRicA

61 Brunton Circle, Founders View South Modderfontein, Johannesburg Gauteng 1609 South Africa Telephone: +27 11 608 0555 Facsimile: +27 11 608 3163

AsiA

14 Little Road #07-01 & #08-01 Tropical Industrial Building Singapore 536987 Telephone: +65 6283 9268 Facsimile: +65 6283 9689

AustRAliA

32 Shand Street Stafford, Queensland 4053 Telephone: +61 7 3243 7222 Facsimile: +61 7 3243 7218

euRope

Na Harfe 9/336 190 00 Prague 9 Czech Republic Telephone: +420 284 081 645 Facsimile: +420 284 081 635

noRtH AmeRicA

2103 Dollarton Highway North Vancouver, BC, V7H 0A7 Canada Telephone: +1 604 984 0221 Facsimile: +1 604 984 0218

soutH AmeRicA

Calle 1 Lt-1A Mz D,Esq. Con Calle A, Urb. Industrial Bocanegra, Callao 1, Lima, Peru Telephone: +51 1 574 5700 Facsimile: +51 1 574 0721

cAmpBell cHemicAls

DeltRex cHemicAls

7-11 Burr Court, Laverton North, Melbourne, Victoria 3026 Telephone: +61 3 9250 1000 Facsimile: +61 3 9250 1007 www.deltrex.com.au

pAnAmex pAcific

new Zealand

Head Office Level 3, 52 Swanson Street Auckland NZ Telephone: +64 9 379 1440 Facsimile: +64 9 379 1449 www.panamex.co.nz

papua new Guinea pAnAmex pAcific (pnG)

Ibis Street, Lae, Papua New Guinea Telephone: +675 472 3566 Facsimile: +675 472 6604

united states of America

pAnAmex pAcific, inc

620 East Washington Street, Suite 118 Petaluma, California 94952 Telephone: +707 766 9604 Facsimile: +707 766 9581

RewARD DistRiBution

Head office

13 Business Street Yatala, Queensland 4207 Telephone: +61 7 3441 5800 Facsimile: +61 7 3441 5803 www.rewarddistribution.com.au

CAmpBeLL BroTherS LimiTed AnnuAl RepoRt 2011 93

ABN 92 009 657 489

ReGisteReD office

Level 2, 299 Coronation Drive

Milton Qld 4064

Telephone: +61 7 3367 7900 Facsimile: +61 7 3367 8156 www.campbell.com.au

DiRectoRs

Geoff McGrath (Chairman) Greg Kilmister (Managing Director)

Nerolie Withnall Martin Kriewaldt Ray Hill Bruce Brown Mel Bridges

compAnY secRetARY

Tim Mullen

AuDitoRs

KPMG

solicitoRs

Minter Ellison Lawyers

BAnKeRs

Westpac Banking Corporation Commonwealth Bank of Australia Australia and New Zealand Banking Group Limited

sHARe ReGistRY

Computershare Investor Services Pty Limited 117 Victoria Street West End QLD 4101

Enquiries: 1300 552 270 (within Australia) Telephone: +61 7 3237 2100 Facsimile: +61 7 3229 9860

www-au.computershare.com

AI assistant

ALS LIMITED — Annual Report 2011

64365_rns_2011-06-23_4af70227-6551-46df-bdf2-0a690078b3f3.pdf

Contents

Financial Calendar

2010/2011

Annual General Meeting

Campbell Brothers Limited

Campbell Brothers Limited is a leading commercial services company with national and international operations.

ouR Vision

ouR VAlues

Global Operations

Business Divisions

Als GRoup

cAmpBell cHemicAls

RewARD DistRiBution

Financial Highlights

DiViDenDs

YeAR At A GlAnce

Financial Highlights

ReVenue

pRofit

Year in Review

RecoRD Result

DiVisionAl ReVenue

DiVisionAl pRofit

finAnciAl GRowtH

Year in Review

sHAReHolDeR RetuRns

DiVisionAl oVeRView

Als GRoup

Year in Review

DiVisionAl oVeRView continueD

campbell chemicals

Reward Distribution

KeY ActiVities DuRinG tHe YeAR

outlooK

Health and Safety

ouR GoAls

ouR focus

meAsuRinG success

HeAltH AnD sAfetY peRfoRmAnce

ALS Group

ALS Minerals Division

GeocHemistRY

metAlluRGY

outlooK

ALS Coal Division

new testinG centRe

outlooK

ALS Environmental Division

outlooK

ALS Tribology Division

it upGRADes

new inVestment

outlooK

ALS Industrial Division

Blue cHip clients

expAnsions AnD upGRADes

outlooK

Campbell Chemicals

DeltRex cHemicAls

outlooK

pAnAmex pAcific

outlooK

Reward Distribution

pRoActiVe AppRoAcH

pRocuRement AnD mARKetinG teAm

outlooK

Board of Directors

Geoff mcGRAtH miie

chairman and independent non-executive Director Age 69

GReG KilmisteR B sc (Hons), fRAci, mAiG

managing Director and chief executive officer Age 55

neRolie witHnAll BA, llB, fAicD

independent non-executive Director Age 67

mARtin KRiewAlDt BA, llB (Hons), fAicD

independent non-executive Director Age 61

Board of Directors

RAY Hill fAicD

ALS LIMITED Annual Report 2011