EBOS GROUP LIMITED — Annual Report 2013

Dec 4, 2013

MEETING

THE dEMaNd.

EBOS GROUP LIMITED annUaL REPORT 2013

EvEryday

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HEalTHcarE
for HuMaNs aNd
pETs Is a sIzEablE
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and

rapIdly

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EvolvING INdusTry.

rEspoNdING to the INdusTry’s NEEds takes place on dEMaNd,

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oFTEN

IT INvolvEs

across

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multiple

HuGE

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succEss.

wITH vEry dIFFErENT needs , IN vEry dIFFErENT channels , workING To vEry dIFFErENT definitions oF

parTIEs

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dIsTaNcEs.

wE ForM the vITal link bETwEEN HEalTH producT MaNuFacTurErs and the FroNTlINE.

our spEcIFIc capabIlITIEs IN pHarMacEuTIcal wHolEsalING, MEdIcal coNsuMablEs dIsTrIbuTIoN, THIrd parTy loGIsTIcs, salEs and MarkETING oF aNIMal carE, MEdIcal aNd ovEr THE couNTEr producTs arE

uNrIvallEd.

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our rEvENuEs across ausTralasIa
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are on Track To

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wE kNow How To MakE THE MosT oF EvEry health dollar wE arE rEspoNsIblE For. ExcEEd 6

bIllIoN.

ExpaNdING

ovEr THE lasT 12 years , Ebos Has successfully acquIrEd 19 busINEssEs To bEcoME THE clEar market leader IN NEw zEalaNd. THIs yEar, wITH THE acquIsITIoN oF lEadING ausTralIaN pHarMacEuTIcal wHolEsalEr aNd dIsTrIbuTor Symbion , wE HavE bEcoME THE larGEsT diversified ausTralasIaN MarkETEr, wHolEsalEr aNd dIsTrIbuTor oF HEalTHcarE, MEdIcal and pHarMacEuTIcal producTs, and a lEadING ausTralasIaN aNIMal carE producTs dIsTrIbuTor:

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IN coMbINEd pHarMacy and HospITal
pHarMacEuTIcal wHolEsalE aNd
dIsTrIbuTIoN in ausTralIa aNd
1 NEw zEalaNd
# pHarMacy wHolEsalEr
in NEw zEalaNd
1
# pHarMacy wHolEsalEr
in ausTralIa
2
# IN HospITal pHarMacEuTIcal
dIsTrIbuTIoN in NEw zEalaNd
1
# IN HospITal pHarMacEuTIcal
dIsTrIbuTIoN in ausTralIa
1
IN prE-wHolEsalE/3pl ( third
or party logistics ) IN NEw zEalaNd
coMprEHENsIvE rETaIl and wHolEsalE
dIsTrIbuTIoN NETwork IN THE aNIMal carE
MarkET, wITH our owN pET carE braNds aNd
22 spEcIalTy rETaIl ouTlETs THrouGH our
aNIMaTEs joINT vENTurE in NEw zEalaNd.
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HErE’s How wE GoT HErE:
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2000

Ebos acquires Medic Corporation, a wEllINGToN basEd salEs & MarkETING orGaNIsaTIoN spEcIalIsING IN rEprEsENTING MEdIcal, coNsuMEr, dENTal & scIENTIFIc braNds. THIs acquIsITIoN TraNsForMs Ebos INTo THE larGEsT INdEpENdENT HEalTHcarE supply coMpaNy IN NEw zEalaNd.

2004

1922

1986

Acquisition of Vernon Carus, a spEcIalIsEd INFEcTIoN prEvENTIoN provIdEr IN publIc/prIvaTE HospITals aNd aGEd carE FacIlITIEs THrouGHouT ausTralIa.

coMpaNy was FouNdEd as coMpaNy NaME

Early Brothers Trading Co. Ltd.

bEcoMEs EBOS Group Ltd.

1996

2002

1960

coMpaNy Is listed oN THE NEw zEalaNd sTock ExcHaNGE.

Ebos acquires the Nature’s Kiss business

Ebos acquIrEs THE larGEsT prIvaTE MEdIcal wHolEsalEr IN Nsw – Richard Thompson & Co.

INcludING THE ‘HEro’ rETaIl braNd aNTIFlaMME.

Ebos coMplETEs THE

THIs acquIsITIoN Marks THE ENTry oF Ebos as a MaINsTrEaM MEdIcal supplIEr IN THE ausTralIaN MarkET.

acquisition of Health Support Ltd (Now callEd oNElINk)

FroM THE GovErNMENT. THIs busINEss provIdEs spEcIalIsEd loGIsTIcs oF MEdIcal coNsuMablEs aNd pHarMacEuTIcals For a NuMbEr oF NEw zEalaNd’s dHbs.

2006

2011

Ebos acquires the leading NSW based Australian medical wholesaler Vital Medical Supplies, as wEll as THE lEadING TasMaNIaN MEdIcal wHolEsalEr TasMEd pTy lTd. THEsE acquIsITIoNs TraNsForM Ebos INTo THE lEadING ausTralIaN MEdIcal wHolEsalEr IN THE prIMary carE MarkET (GENEral pracTITIoNErs).

Ebos acquires Masterpet Corporation, a succEssFul aNIMal HEalTHcarE busINEss IN NEw zEalaNd aNd ausTralIa aNd vIa owNErsHIp, 50% oF THE aNIMaTEs rETaIl pET sTorE Group. ExpaNdING INTo 2008 aNIMal carE provIdEs Ebos EarNINGs dIvErsITy, Ebos Group HIGHEr MarGINs aNd revenues exceed a lEss rEGulaTEd $1b for the first time. ENvIroNMENT.

Ebos aTTaINs aN Nzx Top50 lIsTING.

2005

2007

2010

2013

Ebos acquires the scientific business Global Science

Ebos acquires the New Zealand pharmaceutical wholesaler Propharma and pre-wholesale third party logistics provider Healthcare Logistics from the Zuellig Group .

Ebos acquires Symbion, THE lEadING pHarMacEuTIcal wHolEsalEr IN THE coMbINEd pHarMacy aNd HospITal MarkETs IN ausTralIa aNd vIa owNErsHIp, lyppard, THE NuMbEr Two vETErINary wHolEsalEr IN ausTralIa.

Ebos dIvEsTs ITs porTFolIo oF scIENTIFIc busINEssEs IN NEw zEalaNd & ausTralIa To THE NuMbEr Two Global scIENTIFIc supply coMpaNy basEd IN THE usa.

IN NEw zEalaNd aNd Quantum Scientific IN ausTralIa IN ordEr To ExpaNd our ExIsTING MEdIc scIENTIFIc busINEss.

Ebos Is Now THE larGEsT pHarMacEuTIcal wHolEsalEr IN NEw zEalaNd aNd NuMbEr oNE or Two prE – wHolEsalE (THIrd parTy loGIsTIcs) provIdEr IN NEw zEalaNd.

THE syMbIoN acquIsITIoN TraNsForMs Ebos INTo THE larGEsT aNd MosT dIvErsIFIEd ausTralasIaN MarkETEr, wHolEsalEr aNd dIsTrIbuTor oF HEalTHcarE, MEdIcal aNd pHarMacEuTIcal producTs, by rEvENuE, aNd a lEadING ausTralasIaN aNIMal carE producTs MarkETEr & dIsTrIbuTor.

Ebos acquires Crown Scientific To FurTHEr ExpaNd our ausTralIaN prEsENcE IN THIs MarkET. Ebos bEcoMEs THE clEar NuMbEr Two supplIEr IN THE coMbINEd ausTralIaN aNd NEw zEalaNd scIENTIFIc supply MarkET.

what we offer now

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healthcare animal
care
manufacturer logistics and pharm. & hospital sales and retail brands veterinary/
services distribution wholesaling marketing and services pet products
Product Third party Specialist Sales and Retail pharmacy Sales and
management distribution and wholesaler and marketing of brand ownership, marketing,
solutions to logistics solutions. distributor of a wide range sales of branded veterinary
scale enhances our ability pharmaceutical Distribution ethical, OTC, of healthcare product and wholesaler,
companies. systems, customer medical and products across operation of distributor and
Clinical trial services, consumer consumer, primary pharmacy support retailer of animal
expanding logistics and depot services. accounting, IT systems products to pharmacies and care, hospital, aged care and and management systems. healthcare products, pet
and electronic public and private international accessories and
ordering of hospitals. markets. premium foods
products on behalf across Australasia.
of pharmaceutical
and healthcare
suppliers and
manufacturers.
BUY BETTER. SELL MORE.
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our increased scale enhances our ability to provide the critical infrastructure required by healthcare and animal care customers and suppliers in the expanding australian and new Zealand markets:

MaNaGING dIrEcTor’s rEvIEw

ExcITING TIMEs aHEad.

Mark Waller cHIEF ExEcuTIvE aNd MaNaGING dIrEcTor

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boldNEss, TEMpErEd wITH paTIENcE and rEsIlIENcE HIGHlIGHT wHaT Ebos sTaNds For.

I commented at last year’s Annual General Meeting that our goal was to become a “$1 billion market capitalisation business in five years”. We were confident that this was a realistic aspiration. One year on, our market capitalisation sits at circa $1.4 billion and we are now truly a leading Trans Tasman business in our core operations. This does not imply we can now relax because we have reached our target early; it demonstrates the potential for this business if it remains dynamic and open to the right opportunities – big or small.

Our track record of delivering outstanding returns is founded on growth underpinned by a fundamental determination to be either number one or two in the market segments that we operate in. All growth must offer benefits to our customers, suppliers and shareholders to be sustainable. Expansion into Australia has been a key focus for some time as the target

for our next phase of substantial growth. The Symbion acquisition transformed us overnight into the largest and most diversified Australasian marketer, wholesaler and distributor of healthcare, medical and pharmaceutical products by revenue and a leading Australasian animal care products marketer and distributor. The Symbion acquisition is a ‘game changer’ and an excellent fit for us in terms of scale, opportunities and match with our existing businesses.

With Symbion we are the number one pharmacy wholesaler in Australasia, the number one in hospital pharmaceutical distribution in Australasia and a leading third party logistic pre-wholesaling business in New Zealand.

The Symbion acquisition provides us with the perfect platform from which to drive further revenue gains. Operationally we have a greater range of capabilities to take advantage of new and existing opportunities in the growing healthcare and animal care markets in both countries.

12 — 13

Ebos

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cusToMErs EFFIcIENTly procEssING ordErs
have a combined staff roll As the demand grows in these sectors, Electronic ordering throughout our network annually
of over two thousand employees we have grown to include a combined is now three quarters of all orders processed adding
customer base of 30,387 . significant value and efficiency, minimising waste in
distribution costs for all our customers and suppliers.
64.5%
aUSTRaLIa
35.5%
nEw ZEaLanD 77%
2,242 ELEcTROnIc
23%
ManUaL
85.9%
hEaLThcaRE
19,605 10,782 MILLIOn
84.5% 15.5% aUSTRaLIa nEw ZEaLanD anIMaL caRE14.1% 5.4 ORDERS PROcESSED
hEaLThcaRE anIMaL caRE
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sTaFF

EBOS have a combined staff roll As the demand grows in these sectors, of over two thousand employees we have grown to include a combined across Australasia. customer base of 30,387 .

both Symbion’s third party logistics business in Australia and to extend into medical consumable operations to complement its existing pharmaceutical business.

Scale is important to us but that doesn’t mean the next purchase must be bigger than the last. We only buy good companies at attractive acquisition multiples that add to our core competencies in healthcare and animal care. We also have a core philosophy when buying a company of doing no harm to the business. So we buy companies that we like both in terms of what they do and the people that run them. EBOS itself has a tiny corporate team and relies on achieving operational excellence within our decentralised businesses.

Another important prospect that I wish to highlight as potentially very significant occurred in June 2013. We were advised by the Crown owned company Health Benefits Ltd (HBL) that we were chosen as the “preferred respondent” to streamline the distribution of medical supplies across the national public hospital network (DHBs) and similarly distribute pharmaceuticals to certain public hospitals. This highlights our specialised logistics ability which is a core competency of our businesses and demonstrates that we can win against global players in this area. This is an exciting opportunity and a big tick of approval from the Government. A successful conclusion to the HBL contract would allow us to draw on Symbion’s ‘best in class’ technology platform and replicate that here in NZ.

We also want to expand into veterinary wholesaling in New Zealand and to utilise our combined Australasian resources to significantly enhance the market positions of both Masterpet and Lyppard. Our acquisition of Masterpet in 2011 for $105 million was our largest acquisition before Symbion. It has performed very well for us and now sits perfectly alongside Lyppard. Expanding the animal care part of our business will provide earnings diversity into a higher growth, higher margin industry that is less regulated than our government funded healthcare businesses.

As a company we have built significant expertise in areas such as finance, marketing, sales and logistics – whatever the target business may do, we can assemble a highly effective team to analyse the opportunity and leverage gains post settlement. Cross pollination of ideas and sharing expertise is a “way of life” for our group businesses.

When it comes to buying businesses we have a strong track record of success. We have made 19 acquisitions in the past 12 years, growing revenue from $80.8 million to more than $6 billion.

Our goal this year is to leverage the scale and expertise we have across both the New Zealand and Australian markets. We see considerable scope to use our expertise to expand

producT sku’s

We have a significant range of products serving both the healthcare and animal care sectors.

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150
125 124,000
100 144,000
75 SkU’S
50
25
00 20,000 69.7%
nEw ZEaLanD
30.3%
aUSTRaLIa
hEaLThcaRE anIMaL caRE
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Strategically we look for global trends and analyse their local impact and position our business to capitalise on this before they happen. As markets shift, so do we.

We will not be standing still, be that seeking organic growth within our existing businesses, driving efficiencies and looking at further acquisition opportunities as long as they meet our exacting criteria. In doing this we will strive to ensure that our shareholders continue to get the returns that you have become accustomed to receiving.

Healthcare and Animal care are key sectors of the economy and as such provide a wealth of future opportunity.

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Mark wallEr

Chief Executive and Managing Director

14 — 15

cHaIrMaN’s rEporT

sTroNG rEsulTs.

THE 2013 FINaNcIal yEar was MoMENTous For Ebos.

We successfully completed the largest transaction in the history of the company and did so in a manner generating significant shareholder value. I said at the time of the purchase that we only buy good companies. This is not just a good company, it is a great company, with great management. Certainly given the positive market reaction to this acquisition, we are not alone in thinking this.

Growth – be it through acquisition or internal expansion and efficiencies – is not an end goal in itself. The key is to always target being the leader or number two in all the key market segments in which we operate. That is the underlying philosophy that drives EBOS and will continue to do so in the future. The result is consistent exemplary returns for our shareholders; over the past 10 years we have provided investors with compounding returns of 19% per annum.

The Symbion transaction is important to us for a number of reasons. Our increased size means that we now have the scale to invest in the infrastructure that will create further

efficiencies for our manufacturing and pharmaceutical partners, while maintaining or creating market leading positions for our business units. The transaction also expands our shareholder base, resulting in greater share liquidity, an improved NZX 50 position and increased broker coverage. We have also stated that it is our intention to seek a dual listing of EBOS on the ASX by the end of this calendar year, 2013.

capital raising

The compelling metrics of the Symbion transaction were endorsed by new and existing shareholders who supported the placement of new shares and participated in the entitlement offer. New and existing shareholders contributed $239 million towards the $1.1 billion purchase price. The balance comprised new and replacement financing facilities totalling $370 million and the issue of $498 million in new shares to Sybos Holdings Pte Limited (Zuellig Group) which now holds 40 per cent of the total shares on issue. It is certainly a pleasure to have Zuellig as a new cornerstone investor in EBOS, given its relevant international expertise in healthcare and pharmaceuticals.

rIck Christie cHaIrMaN

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16 — 17

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SEvEn YEaR REvEnUE TREnD
FINaNcIal
2007 307
Highlights
2008 1092
2009 1345
2010 1317
2011 1344
2012 1429
2013 1823
0 500 1000 1500 2000
$MILLIOnS
SEvEn YEaR EBITDa TREnD
2007 18.8
2008 33.6
It’s also a big vote of confidence in EBOS in terms of the Performance
direction in which we are heading. Moreover, our ability Much was achieved in the 2013 financial year which 2009 38.7
to satisfy much of the purchase price for Symbion through included the first full year of trading for Masterpet, acquired
2010 40.4
the issue of new shares means that we have retained during the previous year. Masterpet had an excellent year,
considerable financial flexibility on our balance sheet. fully meeting its performance targets. Healthcare performed 2011 41.1
strongly in New Zealand, and in Australia increased market
Balance Sheet penetration through competitive positioning. 2012 46.9
At balance date the Company remained conservatively The 2013 result for EBOS, excluding the Symbion trading 2013 58.2
geared with net debt of $173.5 million representing
for one month and one off transaction costs, represented
36.3% of net debt plus equity. Mainly as a result of 0 10 20 30 40 50 60
an underlying lift in EBITDA of 14%. $MILLIOnS
— Annual Report 2013
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At balance date the Company remained conservatively geared with net debt of $173.5 million representing 36.3% of net debt plus equity. Mainly as a result of the Symbion transaction, total assets increased by $1.874 billion to $2.532 billion at year end.

Dividends

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SEvEn YEaR cOnTInUInG OPERaTIOnS nPaT TREnD
2007 10.3
2008 16.7
2009 19.7
2010 19.7
2011 23.4
2012 27.9
2013 28.2
0 5 10 15 20 25 30
$MILLIOnS
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An interim dividend of 17.5 cents a share fully imputed was declared in April 2013 and a two for 53 bonus issue of ordinary shares was made in June 2013 to distribute available imputation credits. A final dividend for the 2013 year of 15 cents per share on the much enlarged capital base, partially imputed will be payable on 22 October 2013.

Board

I am pleased to welcome Stuart McGregor and Peter Williams to the Board. Stuart and Peter were nominated by Zuellig Group and elected as non-executive Directors at the Special General Meeting in June 2013. Both will add to the expertise of the Board as it works with management to refine the strategic positioning of the Company.

The Board has determined that future dividends will amount to 60-70 per cent of normalised net profit after tax (NPAT) after taking into account working capital requirements and funding for growth initiatives.

The Board now comprises eight Directors which is appropriate for a company with a market capitalisation of greater than $1 billion.

Outlook

Understanding our markets and reading trends is crucial for EBOS and will position the group to capture the opportunities arising from the nascent global economic recovery, which will continue to influence consumer, business and government spending. EBOS is ideally positioned to meet the requirements of governments and healthcare organisations for further supply chain efficiencies and to service the requirements of pet owners for higher quality animal care.

Management

Much of the credit for the growth of EBOS goes to Chief Executive and Managing Director Mark Waller who ably leads a small core group of senior executives. Mark and his team are to be congratulated on bringing the Symbion transaction to a successful conclusion after an extensive period of intense work.

HIGHlIGHTs suMMary

	Net cash infow from operating activities ($millions)	2013 26.4	2012 28.1		2011 21.7	2010 41.8	2009 33.3	2008 28.5	2007 7.3
	Shareholders’ interest ($millions) Earnings per share from continuing operations	304.9 52.9c	208.6 53.6c		198.8 45.4c	182.8 39.5c	162.0 41.1c	147.3 37.6c	92.2 31.7c
	Net interest bearing debt to net interest bearing debt plus equity	36.3%	29.9%	Nil	in Funds	1.5%	19.6%	32.0%	8.1%

The real work now begins – to identify and action the most promising opportunities the new and expanded combined group has to offer. The Board has confidence the senior management group, including the Symbion team led by Patrick Davies, is already working to deliver on that potential.

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rIck cHrIsTIE

Chairman

18 — 19

board oF dIrEcTors proFIlEs

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01 02 03
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rIck cHrIsTIE

Technology Limited and HTS110 Limited (alternate Director). He was the recipient of the Executive of the Year award at the 2010 Deloitte/Management magazine Top 200 Awards.

Economic Development Agency. He was formerly a Director of Primelife Limited from 2001 to 2004. Currently Stuart is Chairman of Donaco International Limited, an ASX listed company. He is also Chairman of Powerlift Australia Pty Limited and C B Norwood Pty Limited.

rIck cHrIsTIE Limited and Acurity Health MSc (hons), FnZIoD Limited. Previously Chairman Independent Chairman of AgResearch Limited, Deputy of Directors Chairman of the Foundation (photo page 17) for Research, Science & Technology and Chairman Joined the EBOS Group Limited Board in June 2000 and was of the Victoria University Foundation Board of Trustees. appointed Chairman in April 2003. He is a member of the He is also a Companion of The Royal Society of Audit and Risk Committee, and Chairman of the Remuneration New Zealand, a former Director of Television New Zealand and Committee and the Nomination Committee. the New Zealand Symphony Orchestra and a past Rick Christie is a professional president of Chamber Music Director with a breadth of New Zealand.

01. sTuarT McGrEGor

BcOM, LLB, MBa

Stuart McGregor was educated at Melbourne University and the London School of Business Administration, gaining degrees in Commerce and Law. He also completed a Masters of Business Administration.

02. saraH oTTrEy

BcOM

Independent Director

Rick Christie is a professional Director with a breadth of governance and international management experience in a number of industries. A former Chief Executive of the diversified investment company Rangatira Limited, a former Managing Director of Cable Price Downer and former Chief Executive of Trade New Zealand. He is the Chairman of National e-Science Infrastructure – NeSI and ServiceIQ, and a Director of South Port New Zealand Limited, Solnet Solutions

Appointed to the EBOS Group Limited Board September 2006. Sarah Ottrey is a Director of Blue Sky Meats (NZ) Limited, Smiths City Group Limited, Comvita Limited, Whitestone Cheese Limited and Sarah Ottrey Marketing Limited, and is a member of the Inland Revenue Risk and Assurance Committee. She is a past board member of the Public Trust. Sarah has held senior marketing management positions with Unilever and Heineken.

Over the last 30 years, Stuart has been Company Secretary of Carlton United Breweries, Managing Director of Cascade Brewery Company Limited in Tasmania and Managing Director of San Miguel Brewery Hong Kong Limited. In the public sector, he served as Chief of Staff to a Minister for Industry and Commerce in the Federal Government and as Chief Executive of the Tasmanian Government’s

Mark wallEr

BcOM, aca, FnZIM

Chief Executive & Managing Director (photo page 13)

Mark Waller has been Chief Executive and Managing Director of EBOS Group Limited since 1987. He is a member of the Remuneration Committee. He is a Director of all the EBOS Group Limited subsidiaries, as well as being a Director of Scott

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04 05 06
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03. barry wallacE

Deputy Chairman of Public 06. pETEr wIllIaMs Trust, former board member Peter Williams has been of Sport and Recreation an executive of The Zuellig NZ, former member of the Group since 2000. Peter is Pharmaceutical Management a Director of Interpharma Agency (Pharmac), former Investments Limited, Asia’s Commissioner for both the leading distributor of healthcare Commerce and Earthquake products, and of Pharma Commissions, former external Industries Limited. He is monetary policy adviser to the also a Director of Cambert, Governor of the Reserve Bank a company marketing health of New Zealand and former and personal care products Chief Executive of the Caxton in South East Asia. Group of Companies.

04. pETEr kraus

McOM (hOnS), ca

Ma (hOnS), DIP EnG.

Peter Kraus has been a Director

Barry Wallace was appointed to the EBOS Group Limited Board October 2001. He is Chairman of the Audit and Risk Committee and member of the Remuneration Committee.

of EBOS Group Limited since 1990. He is a member of the Nomination Committee.

He is a Director of Whyte Adder No 3 Limited, Strand Holdings Limited, Strand Management Limited, Herpa Properties Limited, Ecostore Company Limited, Huckleberry Farms Limited, Peton Limited and Peton Villas Limited and a Trustee of The Perpanida Trust and The Annalise Trust.

Barry is a chartered accountant

with a background in financial management. He is a former Chief Executive of Health Support Limited and is the Finance Director of a private group of companies and trusts. He is a Director of Whyte Adder No 3 Limited, Strand Holdings Limited, Strand Management Limited, Herpa Properties Limited, Ecostore Company Limited, Eco Tech Solutions Limited, Huckleberry Farms Limited, Peton Limited and Peton Villas Limited and a Trustee of The Perpanida Trust and The Annalise Trust.

Her current directorships include Chair of Urwin & Co Limited, and Director of NZ Directories Holdings Limited (and subsidiaries), Ports of Auckland Limited, Ravensdown Fertiliser Co-operative Limited, Sanford Limited, Skellerup Holdings Limited and Tennis Auckland Region Incorporated, and member, Marsh New Zealand Advisory Board. She is Chair of the Inland Revenue Risk and Assurance Committee and of the Auckland Branch of the Institute of Directors Inc.

05. ElIzabETH couTTs

BMS, ca

Independent Director Elizabeth Coutts was appointed to the EBOS Group Limited Board July 2003. She is a member of the Audit and Risk Committee and the Nomination Committee. Elizabeth is a former Chairman of Meritec Group, Industrial Research, and Life Pharmacy Limited, former Director of Air New Zealand Limited and the Health Funding Authority, former

20 — 21

corporaTE GovErNaNcE sTaTEMENT

dIrEcTors’ dIsclosurEs

The Board and management of EBOS Group Ltd are committed to ensuring that the Company adheres to best practice and governance principles and maintains high ethical standards. The Board has agreed to regularly review and assess the Company’s governance structures to ensure they are consistent, both in form and in substance, with best practice. These are set out in the Company’s Corporate Governance Code, the full content of which can be found on the Company’s website (www.ebos.co.nz). The Board considers that the Company’s Corporate Governance policies, practices and procedures substantially comply with the New Zealand Exchange Corporate Governance Best Practice Code.

codE oF ETHIcs

control. Members of the Audit and Risk Committee are Barry Wallace (Chairman), Rick Christie and Elizabeth Coutts.

The EBOS Code of Ethics is the framework of standards by which the Directors and employees of EBOS and its related companies are expected to conduct their professional lives, and covers conflicts of interest, receipt of gifts, confidentiality, expected behaviour, delegated authority and compliance with laws and policies.

Remuneration committee

The Remuneration Committee provides the Board with assistance in establishing relevant remuneration policies and practices for Directors, executives and employees. Members of the Remuneration Committee are Rick Christie (Chairman), Barry Wallace and Mark Waller.

rolE oF THE board aNd MaNaGEMENT

The Board is responsible for the direction and supervision of the business and affairs of the Company and the monitoring of the performance of the Company on behalf of shareholders. The Board also places emphasis on regulatory compliance.

nomination committee

The procedure for the appointment and removal of Directors is ultimately governed by the Company’s Constitution. A Director is appointed by ordinary resolution of the shareholders although the Board may fill a casual vacancy. The Board has delegated to the Nomination Committee the responsibility for recommending candidates to be nominated as a Director on the Board and candidates for the committees. When recommending candidates to act as Director, the Nomination Committee takes into account such factors as it deems appropriate, including the experience and qualifications of the candidate. The current members of the Nomination Committee are Rick Christie (Chairman), Elizabeth Coutts and Peter Kraus. The majority of the members of the Nomination Committee are independent.

Responsibility for the day to day management of the Company has been delegated to the Chief Executive/Managing Director and his management team.

board coMposITIoN

The Board is elected by the shareholders of EBOS Group Ltd. At each annual meeting at least one third of the Directors retire by rotation. The Board currently comprises the following nonexecutive Directors: Chairman, Rick Christie; Elizabeth Coutts; Peter Kraus; Stuart McGregor; Sarah Ottrey; Barry Wallace and Peter Williams. It has one executive Director Mark Waller, Chief Executive and Managing Director. Rick Christie, Elizabeth Coutts and Sarah Ottrey have been determined as Independent Directors, (as defined under the NZSX Listing Rules and the EBOS Group Ltd Corporate Governance Code).

board procEssEs

The table within the Directors’ Report shows attendances at the board and committee meetings during the year ended 30 June 2013.

sHarE TradING by dIrEcTors aNd oFFIcErs

board coMMITTEEs

The Company has formal procedures that Directors and officers must follow when trading EBOS shares. They must notify and obtain the consent of the Board prior to any trading.

Specific responsibilities are delegated to the Audit and Risk Committee, the Remuneration Committee and the Nomination Committee. Each of these committees has a charter setting out the committee’s objectives, procedures, composition and responsibilities. Copies of these charters are available on the Company’s website.

sHarEHoldEr parTIcIpaTIoN

The Board aims to ensure that shareholders are informed of all major developments affecting the Group’s state of affairs. Information is communicated to shareholders in the Annual Report and the Interim Report. The Board has adopted a policy of Continuous Disclosures that complies with the NZSX Listing Rules. The Board encourages full participation of shareholders at the Annual Meeting to ensure a high level of accountability and identification with the Group’s strategies and goals. Investors can obtain information on the company from its website (www.ebos.co.nz). The site contains recent NZSX announcements and reports.

audit and Risk committee

The Audit and Risk Committee provides the Board with assistance in fulfilling its responsibilities to shareholders, the investment community and others for overseeing the Company’s financial statements, financial reporting processes, internal accounting systems, financial controls, and annual external financial audit and EBOS’s relationship with its external auditor. In addition, the Audit and Risk Committee is responsible for the establishment of policies and procedures relating to risk oversight, identification, management and

dIrEcTors’ INTErEsTs

Share dealings by Directors

The Directors have disclosed to the Board under section 148(2) of the Companies Act 1993 particulars of acquisitions of dispositions of relevant interest.

Disclosure of interests by Directors

In accordance with section 140(2) of the Companies Act 1993, the Directors named below have made general disclosure of interest, by a general notice disclosed to the Board and entered in the Company’s interest register, as follows:

R.G.M. Christie: Chairman of National e-Science Infrastructure – NeSI and ServiceIQ. Director of South Port New Zealand Limited, Masterpet Corporation Limited, PRNZ Limited and its associated companies, NZ Pork Industry Board, Solnet Solutions Limited, and Acurity Health Group Limited.

E.M. Coutts: Chair of Urwin & Co Limited, and Director of NZ Directories Holdings Limited (and subsidiaries), Ports of Auckland Limited, Ravensdown Fertiliser Co-operative Limited, Sanford Limited, Skellerup Holdings Limited and Tennis Auckland Region Incorporated, and Member, Marsh New Zealand Advisory Board. She is Chair of Inland Revenue, Audit and Assurance Committee and Chair Auckland Branch, Institute of Directors Inc.

P.F. Kraus: Director of Whyte Adder No.3 Limited, Strand Holdings Limited, Strand Management Limited, Herpa Properties Limited, Ecostore Company Limited, Huckleberry Farms Limited, Peton Limited, Peton Lodge Limited and Peton Villas Limited and Trustee of the Perpanida Trust, and the Annalise Trust.

S.J. McGregor: Chairman of Donaco International Limited, Powerlift Australia Pty Limited, and C.B. Norwood Pty Limited.

S.C. Ottrey: Director of Blue Sky Meats (NZ) Limited, Comvita Limited, Smiths City Group Limited, Whitestone Cheese Limited, and Sarah Ottrey Marketing Limited and Member of the Audit and Assurance Committee Inland Revenue.

B.J. Wallace: Director of Allum Management Services Limited, Masterpet Corporation Limited, PRNZ Limited and its associated companies, Whyte Adder No.3 Limited, Strand Holdings Limited, Strand Management Limited, Herpa Properties Limited, Ecostore Company Limited, Eco Tech Solutions Limited, Huckleberry Farms Limited, Peton Limited, Peton Lodge Limited and Peton Villas Limited, and Trustee of the Perpanida Trust and The Annalise Trust.

M.B. Waller: Director of EBOS Group Limited and its associated companies, Scott Technology Limited, and HTS-110 Limited (Alternate Director).

P.J. Williams: Executive of The Zuellig Group and associated companies, a Director of Interpharma Investments Limited, Pharma Industries Limited and Cambert.

22 — 23

DIREcTORS’ DIScLOSURES (cOnTInUED)

There were no notices from Directors of the Company requesting to use Company information received in their capacity as Directors, which would not otherwise have been available to them.

sHarE dEalINGs by dIrEcTors

	Ordinary Shares	consideration
Director	Purchased/(Sold)	Paid/(Received)	Date of Transaction
R G M Christie– All non benefcially held	2,356	–	June 2013
E M Coutts– Held by associated persons	465	$3,724	October 2012
	613	–	June 2013
S C Ottrey– Held by association persons	120	$961	October 2012
	198	–	June 2013
M B Waller– Held by associated persons	16,027	–	June 2013
M B Waller– Non benefcially held	2,356	–	June 2013
P F Kraus	41	Nil	June 2013
P F Kraus– Held by associated persons	1,418,489	$10,625,000	June 2013
B J Wallace– Non benefcially held	1,418,489	$10,625,000	June 2013

dIrEcTors’ sHarEHoldINGs

number of fully paid shares held as at	number of fully paid shares held as at	30 June 2013	30 June 2012
E M Coutts	– Held by associated persons	20,588	19,510
R G M Christie	– Non benefcially held – Staff share purchase scheme	145,642	143,286
P F Kraus	– Held by associated persons	1,117	1,076
	– Held by associated persons	5,883,463	4,464,974
S C Ottrey	– Held by associated persons	5,353	5,035
B J Wallace	– Non benefcially held – Director of Whyte Adder No.3 Ltd/	5,883,463	4,464,974
	Herpa Properties Ltd
M B Waller	– Held by associated persons	445,067	429,040
	– Non benefcially held – Staff share purchase scheme	145,642	143,286

aTTENdaNcE

	Board		audit & Risk	audit & Risk	Remuneration	Remuneration	Due Diligence	Due Diligence	Steering	Steering
	Eligible		Eligible		Eligible		Eligible		Eligible
	to attend	attended	to attend	attended	to attend	attended	to attend	attended	to attend	attended
R Christie	15	15	5	5	3	3	3	3	3	3
P Kraus	15	14	–	–	–	–	4	4	4	4
E Coutts	15	15	5	5	–	–	10	10	10	10
S Ottrey	15	15	–	–	–	–	4	4	4	4
B Wallace	15	15	5	5	3	3	17	17	17	17
M Waller	15	15	5	4	3	3	17	17	17	17

INdEMNITy aNd INsuraNcE

In accordance with section 162 of the Companies Act 1993 and the constitution of the Company, the Company has given indemnities to, and has effected insurance for, the Directors and executives of the Company and its related companies which, except for some specific matters which are expressly excluded, indemnify and insure Directors and executives against monetary losses as a result of actions undertaken by them in the course of their duties. Specifically excluded are certain matters, such as the incurring of penalties and fines which may be imposed for breaches of law.

dIrEcTors’ rEMuNEraTIoN aNd oTHEr bENEFITs

Directors’ remuneration and other benefits required to be disclosed pursuant to section 211(1) of the Companies Act 1993 for the year ended 30 June 2013 were as follows:

	30 June 2013	30 June 2012
R G M Christie	$154,000	$127,500
E M Coutts	$106,500	$65,000
P F Kraus	$70,500	$60,000
P Merton (resigned 14/9/11)	–	$12,500
M J Stewart (resigned 29/3/12)	–	$45,000
S C Ottrey	$70,500	$60,000
B J Wallace	$123,500	$67,500
M B Waller
(Chief Executive and Managing Director)	Salary $494,884	$480,470
	* Other benefts $1,684,556	$2,905,361
* Includes a one off long term incentive, performance bonus and other emoluments

GENdEr coMposITIoN

As at 30 June 2013, two of the Directors of the Company are female (2012: 2 female) and one management position is held by a female (2012: 1 female).

24 — 25

DIREcTORS’ DIScLOSURES (cOnTInUED)

EMployEE rEMuNEraTIoN

Grouped below, in accordance with Section 211 of the Companies Act 1993, are the number of employees or former employees of the Company and its subsidiaries, including those based in Australia, who received remuneration and other benefits in their capacity as employees totalling NZ$100,000 or more during the year.

Employee Remuneration (nZ$)	30 June 2013	30 June 2012
	Number of Employees	Number of Employees
100,000 – 110,000	27	23
110,000 – 120,000	22	17
120,000 – 130,000	15	14
130,000 – 140,000	3	5
140,000 – 150,000	9	4
150,000 – 160,000	7	4
160,000 – 170,000	7	4
170,000 – 180,000	3	1
180,000 – 190,000	1	2
190,000 – 200,000	5	3
200,000 – 210,000	3	3
210,000 – 220,000	2	2
220,000 – 230,000	1	1
230,000 – 240,000	1	–
240,000 – 250,000	1	–
250,000 – 260,000	1	–
260,000 – 270,000	1	1
270,000 – 280,000	3	3
310,000 – 320,000	–	1
340,000 – 350,000	1	–
380,000 – 390,000	1	1
410,000 – 420,000	1	–
460,000 – 470,000	–	1
550,000 – 560,000	1	1
590,000 – 600,000	1	–
680,000 – 690,000	–	1
790,000 – 800,000	1	–
840,000 – 850,000	1	–

FINaNcIal sTaTEMENTs

Year ended 30 June, 2013

dIrEcTors’ rEspoNsIbIlITy sTaTEMENT 28 audITor’s rEporT 29 INcoME sTaTEMENT 30 sTaTEMENT oF coMprEHENsIvE INcoME 30 balaNcE sHEET 31 sTaTEMENT oF cHaNGEs IN EquITy 32 casH Flow sTaTEMENT 33 NoTEs To THE FINaNcIal sTaTEMENTs 34 addITIoNal sTock ExcHaNGE INForMaTIoN 71 TradING ENTITIEs 72 dIrEcTory 73

audITor

The Company’s Auditor, Deloitte, will continue in office in accordance with the Companies Act 1993.

The Directors are satisfied that the provision of non-audit services, during the year by the auditor is compatible with the general standard of independence for auditors imposed by the Companies Act 1993. Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in note 5 to the financial statements.

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r.G.M. cHrIsTIE Chairman of Directors

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M.b. wallEr Chief Executive and Managing Director

20 August 2013

26 — 27

DIRECToRs’ REsPoNsIbILITY sTATEMENT

INDEPENDENT AUDIToR’s REPoRT TO THE SHAREHOLDERS OF EBOS GROUP LIMITED

The Directors of EBOS Group Limited are pleased to present to shareholders the financial statements for EBOS Group and its controlled entities (together the “Group”) for the year to 30 June 2013.

The Directors are responsible for presenting financial statements in accordance with New Zealand law and generally accepted accounting practice, which give a true and fair view of the financial position of the Company and the Group as at 30 June 2013 and the results of their operations and cash flows for the year ended on that date.

The Directors consider the financial statements of the Company and the Group have been prepared using accounting policies which have been consistently applied and supported by reasonable judgements and estimates and that all relevant financial reporting and accounting standards have been followed.

The Directors believe that proper accounting records have been kept which enable with reasonable accuracy, the determination of the financial position of the Company and Group and facilitate compliance of the financial statements with the Financial Reporting Act 1993.

The Directors consider that they have taken adequate steps to safeguard the assets of the Company and the Group, and to prevent and detect fraud and other irregularities. Internal control procedures are also considered to be sufficient to provide a reasonable assurance as to the integrity and reliability of the financial statements.

The Financial Statements are signed on behalf of the Board by:

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==> picture [127 x 30] intentionally omitted <==

R.G.M. ChRIsTIE Chairman of Directors 20 August 2013

M.b. WALLER Chief Executive and Managing Director

Report on the Financial Statements

We have audited the financial statements of EBOS Group Limited and group on pages 30 to 70, which comprise the consolidated and separate balance sheets of EBOS Group Limited as at 30 June 2013, the consolidated and separate income statements, statements of comprehensive income, statements of changes in equity and cash flow statements for the year then ended, and a summary of significant accounting policies and other explanatory information.

Board of Directors’ Responsibility for the Financial Statements

The Board of Directors are responsible for the preparation of financial statements in accordance with generally accepted accounting practice in New Zealand and that give a true and fair view of the matters to which they relate, and for such internal control as the Board of Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibilities

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing and International Standards on Auditing (New Zealand). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of financial statements that give a true and fair view of the matters to which they relate 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 the accounting policies used and the reasonableness of accounting estimates, as well as the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Other than in our capacity as auditor, investigating accountant in respect of the 5 June 2013 offer document, the provision of due diligence work, internal control assurance services and other advisory services we have no relationship with or interests in EBOS Group Limited or any of its subsidiaries.

Opinion

In our opinion, the financial statements on pages 30 to 70:

• comply with generally accepted accounting practice in New Zealand;

• comply with International Financial Reporting Standards; and

• give a true and fair view of the financial position of EBOS Group Limited and group as at 30 June 2013, and their financial performance and cash flows for the year then ended.

Report on Other Legal and Regulatory Requirements

We also report in accordance with section 16 of the Financial Reporting Act 1993. In relation to our audit of the financial statements for the year ended 30 June 2013:

• we have obtained all the information and explanations we have required; and

• in our opinion proper accounting records have been kept by EBOS Group Limited as far as appears from our examination of those records.

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Chartered Accountants

20 August 2013 Christchurch, New Zealand

28 — 29

INCoME sTATEMENT

bALANCE shEET

For the Financial Year Ended 30 June, 2013 NOTES Revenue 2 (a) Proft before depreciation, amortisation, fnance costs and income tax expense Depreciation 2 (b) Amortisation of fnite life intangibles 2 (b) Proft before fnance costs and tax Finance costs 2 (b) Proft before income tax 2 (b) Income tax 3 Proft for theyear Earnings per share: Basic (cents per share) 26 Diluted (cents per share) 26	Group	2012 $’000 1,428,679 46,856 (3,674) (94) 43,088 (6,987) 36,101 (8,152) 27,949 53.6 53.6	Parent	2012 $’000 95,188 29,439 (433) – 29,006 (4,322) 24,684 (36) 24,648
	2013 $’000		2013 $’000
	1,823,169		111,433
	58,243		40,558
	(4,922)		(552)
	(1,514)		–
	51,807		40,006
	(9,593)		(5,028)
	42,214		34,978
	(14,007)		(118)
	28,207		34,860
	52.9
	52.9

sTATEMENT oF CoMPREhENsIVE INCoME

For the Financial Year Ended 30 June, 2013 NOTES Proft for the year Other comprehensive income Items that may be reclassifed subsequently to proft or loss: Cash fow hedges gains 22 Related income tax to cashfow hedges 22 (Losses)on translation of foreign operations 22 Total comprehensive income net of tax	Group	2012 $’000 27,949 176 (123) (1,783) 26,219	Parent	2012 $’000 24,648 343 (95) – 24,896
	2013 $’000		2013 $’000
	28,207		34,860
	2,773		1,532
	(359)		(250)
	(6,365)		–
	24,256		36,142
Notes to the fnancial statements are included on aes 34 to 70

Notes to the financial statements are included on pages 34 to 70.

As at 30 June, 2013 NOTES Current assets Cash and cash equivalents Trade and other receivables 6 Prepayments 7 Inventories 8 Current tax refundable 3 Other fnancial assets – derivatives 9 Advances to subsidiaries Total current assets Non-current assets Property, plant and equipment 10 Capital work in progress 11 Prepayments 7 Deferred tax assets 3 Goodwill 12 Indefnite life intangibles 13 Finite life intangibles 14 Shares in subsidiaries 15 Investment in associate 16 Total non-current assets Total assets Current liabilities Bank overdraft Trade and other payables 18 Finance leases 17, 19 Bank loans 17 Current tax payable 3 Employee benefts Other fnancial liabilities – derivatives 20 Advances from subsidiaries 17 Deferredpurchase consideration 32 Total current liabilities Non-current liabilities Bank loans 17 Trade and other payables 18 Deferred tax liabilities 3 Finance leases 17, 19 Employee benefts Total non-current liabilities Total liabilities Net assets Equity Share capital 21 Foreign currency translation reserve 22 Retained earnings 22 Cash fow hedge reserve 22 Total equity	Group	2012 $’000 52,646 175,712 4,540 162,997 735 109 – 396,739 23,489 9 195 7,426 180,553 30,881 279 – 18,428 261,260 657,999 307 275,548 534 10,156 6,988 8,412 530 – – 302,475 129,684 3,943 10,880 1,064 1,352 146,923 449,398 208,601 107,970 690 100,359 (418) 208,601	Parent	2012 $’000 7,413 8,943 1,577 9,114 333 – 26,766 54,146 4,999 – – 645 1,728 4,960 – 215,686 – 228,018 282,164 – 8,131 – 4,000 – 3,018 222 29,576 – 44,947 107,250 – 2,026 – – 109,276 154,223 127,941 107,970 – 20,061 (90) 127,941
	2013 $’000		2013 $’000
	198,014		89,305
	736,429		10,399
	7,837		838
	558,350		9,146
	1,628		722
	3,546		1,816
	–		34,468
	1,505,804		146,694
	95,131		4,668
	787		–
	16		–
	34,361		310
	722,158		1,728
	59,324		4,960
	95,145		–
	–		1,080,686
	19,013		–
	1,025,935		1,092,352
	2,531,739		1,239,046
	–		–
	892,645		9,172
	1,189		–
	215,675		4,000
	6,378		–
	25,725		5,820
	2,872		–
	–		29,319
	865,000		865,000
	2,009,484		913,311
	151,357		87,412
	8,489		–
	48,365		2,220
	3,296		–
	5,871		–
	217,378		89,632
	2,226,862		1,002,943
	304,877		236,103
	201,288		201,288
	(5,675)		–
	107,268		33,623
	1,996		1,192
	304,877		236,103

Notes to the financial statements are included on pages 34 to 70.

30 — 31

sTATEMENT oF ChANGEs IN EQUITY

CAsh FLoW sTATEMENT

For the Financial Year ended 30 June, 2013 NOTES	Group	2012 $’000	Parent	2012 $’000
	2013 $’000		2013 $’000
Equity at start of year Proft for the year Other comprehensive income: Movements in cashfow hedge reserve 22 Movement in foreign currency translation reserve 22 Dividends paid to company shareholders 23 Shares issued 21 Equity at end ofyear	208,601	198,796 27,949 53 (1,783) (16,414) – 208,601	127,941	119,459 24,648 248 – (16,414) – 127,941
	28,207		34,860
	2,414		1,282
	(6,365)		–
	(21,298)		(21,298)
	93,318		93,318
	304,877		236,103

Notes to the financial statements are included on pages 34 to 70.

For the Financial Year ended 30 June, 2013 NOTES Cash fows from operating activities Receipts from customers Interest received Dividends received from subsidiaries Payments to suppliers and employees Taxes paid Interestpaid Net cash infow from operating activities 25(c) Cash fows from investing activities Sale of property, plant & equipment Purchase of property, plant & equipment Payments for capital work in progress Payments for intangible assets Advances to subsidiaries Advanced to jointly controlled entity Acquisition of associates 16 Acquisition of subsidiaries 25(a) Costs associated with acquisition of subsidiaries Net cash infow/(outfow) from investing activities Cash fows from fnancing activities Proceeds from issue of shares Proceeds from borrowings Repayment of borrowings Dividendspaid to equityholders ofparent 23 Net cash infow from fnancing activities Net increase/(decrease) in cash held Effect of exchange rate fuctuations on cash held Net cash and cash equivalents at beginningof theyear Net cash and cash equivalents at the end of theyear Cash and cash equivalents Bank overdrafts	Group	2012 $’000 1,433,077 1,746 – (1,391,675) (8,049) (6,987) 28,112 103 (3,821) (9) (30) – (1,057) (18,200) (89,915) – (112,929) – 172,250 (118,501) (16,414) 37,335 (47,482) 143 99,678 52,339 52,646 (307) 52,339	Parent	2012 $’000 72,651 1,100 22,677 (67,030) (1,071) (4,322) 24,005 15 (1,457) – – (50,116) – – (105,000) – (156,558) – 172,250 (89,000) (16,414) 66,836 (65,717) – 73,130 7,413 7,413 – 7,413
	2013 $’000		2013 $’000
	1,917,358		68,966
	1,198		1,388
	–		39,623
	(1,869,090)		(61,062)
	(13,458)		–
	(9,593)		(5,028)
	26,415		43,887
	403		11
	(2,943)		(236)
	(778)		–
	(142)		–
	–		(7,959)
	–		–
	–		–
	49,263		–
	(5,993)		(5,993)
	39,810		(14,177)
	93,318		93,318
	30,009		–
	(21,474)		(19,838)
	(21,298)		(21,298)
	80,555		52,182
	146,780		81,892
	(1,105)		–
	52,339		7,413
	198,014		89,305
	198,014		89,305
	–		–
	198,014		89,305

Notes to the financial statements are included on pages 34 to 70.

32 — 33

NoTEs To ThE FINANCIAL sTATEMENTs

For the Financial Year ended 30 June, 2013

1. sUMMARY oF ACCoUNTING PoLICIEs

1.1 STATEMENT OF COMPLIANCE

EBOS Group Limited (“the Company”) is a profit-oriented company incorporated in New Zealand, registered under the Companies Act 1993 and listed on the New Zealand Exchange.

The Company operates in two business segments, being Healthcare and Animal care. Healthcare incorporates the sale of healthcare products in a range of sectors, own brands, retail healthcare, wholesale activities, and logistics. Animal care incorporates the sale of animal care products in a range of sectors, own brands, retail and wholesale activities. The Company also has a third reportable segment being Corporate which includes net funding costs and parent company central administration expenses that have not been allocated to the Healthcare or Animal care segments.

The Company is a reporting entity and issuer for the purposes of the Financial Reporting Act 1993 and its financial statements comply with that Act.

The financial statements have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand (‘NZ GAAP’). They comply with New Zealand Equivalents to International Financial Reporting Standards (“NZ IFRS”) and other applicable reporting standards as appropriate for profit oriented entities.

The financial statements comply with International Financial Reporting Standards (“IFRS”).

1.2 BASIS OF PREPARATION

The financial statements have been prepared on the basis of historical cost, except for the revaluation of certain financial instruments.

Cost is based on the fair value of the consideration given in exchange for assets.

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June, 2013 and the comparative information presented in these financial statements for the year ended 30 June, 2012.

The information is presented in thousands of New Zealand dollars.

1.3 CRITICAL JUDGEMENTS IN APPLYING ACCOUNTING POLICIES

In the application of NZ IFRS management is required to make judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. 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. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an on-going 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.

Judgements made by management in the application of NZ IFRS that have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next year are disclosed, where applicable, in the relevant notes to the financial statements.

Critical judgements made by management principally relate to the identification of intangible assets such as brands and customer relationships separately from goodwill, arising on acquisition of a business or subsidiaries and the recognition of revenue on significant contracts subject to renewal where the receipt of cashflows does not match the services provided.

1.4 KEY SOURCES OF ESTIMATION UNCERTAINTY

Key sources of estimation uncertainty relate to assessment of impairment of goodwill and indefinite life intangibles.

The Group determines whether goodwill and indefinite life intangibles are impaired at least on an annual basis. This requires an estimation of the recoverable amount of the cash generating units to which the goodwill and indefinite life intangibles are allocated. The assumptions used in this estimation of recoverable amount and the carrying amount of goodwill and indefinite life intangibles are discussed in notes 12 and 13. It is assumed that significant contracts will be rolled over for each period of renewal.

The most recent impairment calculation has been used in the current year where management considers that the following criteria have been met: there has been little change in the assets and liabilities of a cash generating unit in which the most recent recoverable amount calculation resulted in an amount that exceeded the carrying amount of the unit by a substantial margin and where there have been no events or changes in circumstances that would cause only a remote chance that the current carrying amount of the unit is impaired.

Determining the recoverable amounts of goodwill and intangible assets requires the estimation of the effects of uncertain future events at balance date. These estimates involve assumptions about risk assessment to cash flows or discount rates used, future changes in salaries and future changes in price affecting other costs.

1.5 SPECIFIC ACCOUNTING POLICIES

The following specific accounting policies have been adopted in the preparation and presentation of the financial statements.

a) Basis of Consolidation

The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the Group, being the Company (the Parent entity) and its subsidiaries as defined in NZ IAS-27 ‘Consolidated and Separate Financial Statements’. A list of subsidiaries appears in note 15 to the financial statements. Consistent accounting policies are employed in the preparation and presentation of the consolidated financial statements.

Acquisitions of subsidiaries and businesses are accounted for using the acquisition method.

The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange

for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.

Where applicable, the cost of acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify as measurement period adjustments. All other subsequent changes in the fair value of contingent consideration classified as an asset or liability are accounted for in accordance with relevant NZ IFRSs. Changes in the fair value of contingent consideration classified as equity are not recognised.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated Income Statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

All significant inter-company transactions and balances are eliminated on consolidation.

In the Company’s financial statements, investments in subsidiaries are recognised at their cost, less any adjustment for impairment.

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

Investments in associates are incorporated in the Group financial statements using the equity method of accounting. Under the equity method, investments in associates are carried in the Balance Sheet at cost as adjusted for post-acquisition changes in the Group’s share of the net assets of the associate, less any impairment in the value of individual investments. Losses of an associate in excess of the Group’s interest in that associate (which includes any long-term interests that, in substance, form part of the Group’s net investment in the associate) are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

Where necessary, adjustments are made to bring the associates accounting policies into line with those of the Group.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of that investment. The Group’s goodwill accounting policy is set out below. Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in profit or loss.

Where a group entity transacts with an associate of the Group, profits and losses are eliminated to the extent of the Group’s interest in the relevant associate.

b) Goodwill

Goodwill arising on the acquisition of the subsidiary is recognised as an asset at the date that control is acquired (the acquisition date). Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s previously-held equity interest (if any) in the acquiree over the fair value of the identifiable net assets recognised.

If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously-held equity interests (if any) in the acquiree, the excess is recognised immediately in profit or loss as a bargain purchase gain.

Goodwill is not amortised, but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. The recoverable amount is the higher of fair value less cost to sell and value in use. If the recoverable amount of the cash generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. Any impairment loss is recognised immediately in profit or loss and is not subsequently reversed.

c) Indefinite Life Intangible Assets

Indefinite life intangible assets represent purchased brand names and trademarks and are initially recognised at cost. Such intangible assets are regarded as having indefinite useful lives and they are tested annually for impairment on the same basis as for goodwill.

d) Finite Life Intangible Assets

Finite life intangible assets are recorded at cost less accumulated amortisation. Amortisation is charged on a straight line basis over their estimated useful life. The estimated useful life of finite life intangible assets is 1 to 10 years. The estimated useful life and amortisation period is reviewed at the end of each annual reporting period.

e) Intangible Assets Acquired in a Business Combination

All potential intangible assets acquired in a business combination are identified and recognised separately from goodwill where they satisfy the definition of an intangible asset and their fair value can be measured reliably.

f) Property, Plant and Equipment

The Group has five classes of property, plant and equipment:

• Freehold land;

• Buildings;

• Leasehold improvements;

• Plant and vehicles, and

• Office equipment, furniture and fittings.

Property, Plant and Equipment is initially recorded at cost.

Cost includes the original purchase consideration and those costs directly attributable to bring the item of Property, Plant and Equipment to the location and condition for its intended use.

34 — 35

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the Financial Year ended 30 June, 2013

1. sUMMARY oF ACCoUNTING PoLICIEs CONTINUED

After recognition as an asset Property, plant and equipment is carried at cost less accumulated depreciation and impairment losses.

When an item of Property, plant and equipment is disposed of, any gain or loss is recognised in the Income Statement and is calculated as the difference between the sale price and the carrying value of the item.

Depreciation is provided for on a straight line basis on all Property, plant and equipment other than freehold land, at depreciation rates calculated to allocate the assets’ cost less estimated residual value, over their estimated useful lives.

Leased assets are depreciated over the shorter of the unexpired period of the lease and the estimated useful life of the assets.

The following useful lives are used in the calculation of depreciation:

•	Buildings	20 to 100 years
•	Leasehold improvements	2 to 15 years
•	Plant and vehicles	2 to 20 years
•	Offce equipment, furniture and fttings	2 to 10 years

g) Impairment of Assets

At each balance sheet date, the Group reviews the carrying amounts of its non current assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of 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 which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.

Where an impairment loss subsequently reverses, other than for Goodwill and indefinite life intangible assets, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately. Impairment losses can not be reversed for Goodwill and indefinite life intangible assets.

h) Taxation

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the Income Statement because it excludes items of income and expense that are taxable or deductible in other years and further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated

using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items recognised in other comprehensive income or directly in equity, in which case the tax is also recognised in other comprehensive income or directly in equity, or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is taken into account in calculating goodwill or in determining the excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the cost of the business combination.

i) Inventories

Inventories are recognised at the lower of cost, determined on a weighted average basis, and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those

overheads that have been incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price in the ordinary course of business, less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

j) Leases

The Group leases certain plant and equipment and land and buildings. Finance leases, which effectively transfer to the Group substantially all of the risks and benefits incident to ownership of the leased item, are capitalised at the present value of the minimum lease payments. The leased assets and corresponding liabilities are recognised and the leased assets are depreciated over the period the Group is expected to benefit from their use. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to the Income Statement.

Operating lease payments, where the lessors effectively retain substantially all the risks and benefits of ownership of the lease items, are included in the determination of the net surplus in equal instalments over the period of the lease. Lease incentives received are recognised as an integral part of the total lease payments made and also spread on a basis representative of the pattern of benefits expected to be derived from the leased asset.

k) Foreign Currency Translation

Functional and Presentation Currency

The financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”).

The consolidated financial statements are presented in New Zealand dollars, which is the Company’s functional currency and the Group’s presentation currency.

Transactions and Balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the Income Statement for the period.

Foreign Operations

On consolidation, the assets and liabilities of the Group’s overseas operations are translated at exchange rates prevailing at the reporting date. Income and expense items are translated at the average rates for the period. Exchange differences arising, if any, are recognised in the foreign currency translation reserve, and recognised in profit or loss on disposal of the foreign operation.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at exchange rates prevailing at the reporting date.

l) Goods & Services Tax

Revenues, expenses, liabilities and assets are recognised net of the amount of goods and services tax (GST), except for receivables and payables which are recognised inclusive of GST.

Cash flows are included in the Cash Flow Statement on a net basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

m) Financial Instruments

Financial assets and financial liabilities are recognised on the Group’s Balance Sheet when the Group becomes a party to the contractual provisions of the instrument.

Financial Assets

Financial assets are classified into the following specific categories: “financial assets at fair value through profit or loss” (FVTPL), “held to maturity” investments, “available for sale” (AFS) financial assets and “loans and receivables”. The category depends on the nature and purpose of the financial assets and is determined at initial recognition. The categories used are set out below:

Cash & Cash Equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Financial Assets at Fair Value through Profit and Loss (FVTPL)

Financial assets are classified as FVTPL where the financial asset is either held for trading or it is designated at FVTPL, such as derivative financial asset instruments where hedge accounting is not applied.

Financial assets at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset.

Loans and Receivables

Trade and other receivables, including advances to subsidiaries, that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.

Loans and receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in the Income Statement when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

36 — 37

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the Financial Year ended 30 June, 2013

1. sUMMARY oF ACCoUNTING PoLICIEs CONTINUED

m) Financial Instruments continued

Equity Instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

Financial Liabilities

Financial liabilities are classified as either financial liabilities at “fair value through profit or loss” (FVTPL) or “other financial liabilities” measured at amortised cost. The classifications used are set out below:

Financial Liabilities at Fair Value through Profit and Loss

Financial liabilities are classified as FVTPL where the financial liability is either held for trading or it is designated at FVTPL, such as derivative financial liability instruments where hedge accounting is not applied.

Financial liabilities at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest paid on the financial liability.

Other Financial Liabilities

Trade and other payables, including advances from subsidiaries and bank loans, are initially measured at fair value, and subsequently measured at amortised cost, using the effective interest rate method.

All loans and borrowings are initially recognised at cost, being the fair value of the consideration received plus issue costs associated with the borrowing. After initial recognition, these loans and borrowings are subsequently measured at amortised cost using the effective interest rate method which allocates the cost through the expected life of the loan or borrowing. Amortised cost is calculated taking into account any issue costs, and any discount or premium on drawdown.

Bank loans are classified as current liabilities (either advances or current portion of term debt) unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

Derivative Financial Instruments

The Group enters into foreign currency forward exchange contracts to hedge trading transactions, including anticipated transactions, denominated in foreign currencies and from time to time uses interest rate swaps to manage cash flow interest rate risk.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship. The Group designates certain derivatives as cashflow hedges of highly probable forecast transactions.

Cashflow Hedges

At the inception of the hedge relationship, the entity documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for

undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an on-going basis, the Group documents whether the hedging instrument that is used in a hedging relationship is highly effective in offsetting changes in cashflows of the hedged items.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cashflow hedges are recognised in other comprehensive income and accumulated as a separate component of equity in the hedge reserve. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss.

Amounts deferred in equity are recycled in profit or loss in the periods when the hedged item is recognised in profit or loss. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset and liability.

Hedge accounting is discontinued when the Group revokes the hedging relationship, the hedging instrument expires, is terminated, exercised or no longer qualifies for hedge accounting. Any cumulative gain or loss deferred in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was deferred in equity is recognised immediately in profit or loss.

n) Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of returns, discounts, allowances and GST. The following specific recognition criteria must be met before revenue is recognised:

Sale of Goods

Sales of goods are recognised when significant risks and rewards of owning the goods are transferred to the buyer, when the revenue can be measured reliably and when management effectively ceases involvement or control.

Rendering of Services

Revenue from services rendered is recognised when it is probable that the economic benefits associated with the transaction will flow to the entity. The stage of completion at balance date is assessed based on the value of services performed to date as a percentage of the total services to be performed.

Interest Income

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

Effective Interest Method

The effective interest rate method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the

expected life of the financial asset, or, where appropriate, a shorter period to the carrying amount of the financial asset.

Royalties

Royalty revenue is recognised on an accrual basis in accordance with the substance of the relevant agreement. Royalties determined on a time basis are recognised on a straight line basis over the period of the agreement. Royalty arrangements that are based on production, sales and other measures are recognised by reference to the underlying agreement.

Dividend Income

Dividend income from investments is recognised when the shareholders’ rights to receive payment have been established.

o) Cash Flow Statement

The Cash Flow Statement is prepared exclusive of GST, which is consistent with the method used in the Income Statement. Definition of terms used in the Cash Flow Statement:

Operating activities include all transactions and other events that are not investing or financing activities.

Investing activities are those activities relating to the acquisition and disposal of current and non-current investments and any other noncurrent assets.

Financing activities are those activities relating to changes in the equity and debt capital structure of the Company and Group and those activities relating to the cost of servicing the Company’s and the Group’s equity capital.

p) Employee Entitlements

A liability for annual leave and long service leave is accrued and recognised in the Balance Sheet. The liability is equal to the present value of the estimated future cash outflows as a result of employee services provided at balance date.

Provisions made in respect of employee benefits expected to be settled within 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Provisions made in respect of employee benefits which are not expected to be settled within 12 months are measured at the present value of the estimated future cash outflows to be made by the Group in respect of services provided up to reporting date.

q) Segment Reporting

The Group’s operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker (Chief Executive) in order to allocate resources to the segment and to assess its performance.

r) Research and Development

Expenditure on research activities, such as software development, is recognised as an expense in the period it is incurred.

s) Adoption of New Revised Standards and interpretations

The adoption of FRS 44 New Zealand Additional Disclosures has resulted in a change to the way in which imputation credits have been calculated. Imputation credits are now calculated on an accruals basis. In accordance with the standard this change has been applied retrospectively.

No other standards have been adopted during the year which have had a material impact on these financial statements. We are not aware of any standards in issue but not yet effective which would materially impact the amounts recognised or disclosed in the financial statements.

38 — 39

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the Financial Year ended 30 June, 2013

2. PRoFIT FRoM oPERATIoNs

NOTES (a) Revenue Revenue consisted of the following items: Revenue from the sale of goods – external Revenue from the sale of goods – inter group Revenue from the rendering of services Management fees – external Management fees – inter group Interest revenue – inter group Interest revenue – external Royalty income – inter group Dividends – inter group Gain on disposal of associate (b) Proft before income tax expense Proft before income tax has been arrived at after crediting/ (charging) the following gains and losses from operations: Gain/(loss) on disposal of property, plant and equipment Change in fair value of derivative fnancial instruments Share of dividends from associates 16 Share of equity accounted investments (net of dividends from associates) 16 Proft before income tax has been arrived at after (charging) the following expenses by nature: Cost of sales – external Purchases inter group Write-down of inventory Finance costs: Bank interest Other interest expense Total fnance costs Net bad and doubtful debts arising from: Impairment loss on trade and other receivables Depreciation of property, plant and equipment 10 Amortisation of fnite life intangibles 14 Operating lease rental expenses: Minimum lease payments Donations Employee beneft expense Defned contribution plan expenses Costs associated with acquisition of subsidiaries Other expenses Total expenses Proft before income tax expense	Group	2012 $’000 1,423,398 – 3,117 176 – – 1,746 – – 242 1,428,679 (128) 33	Parent	2012 $’000 56,002 10,269 – – 440 128 972 4,700 22,677 – 95,188 (47) 33
	2013 $’000		2013 $’000
	1,811,465		55,788
	–		10,986
	10,506		–
	–		–
	–		440
	–		1,155
	1,198		233
	–		3,208
	–		39,623
	–		–
	1,823,169		111,433
	170		(2)
	257		257
	–	500	–	–
	585	44 (1,263,234) – (1,769) (6,572) (415) (6,987) (293) (3,674) (94) (7,614) (34) (58,783) (1,728) – (48,817) (1,393,027) 36,101	–	– (44,103) (1,252) (205) (3,716) (606) (4,322) (4) (433) – (716) (7) (11,134) (79) – (8,235) (70,490) 24,684
	(1,597,475)		(43,655)
	–		(1,406)
	(2,227)		(192)
	(8,979)		(5,019)
	(614)		(9)
	(9,593)		(5,028)
	(14)		(20)
	(4,922)		(552)
	(1,514)		–
	(9,227)		(1,061)
	(29)		(5)
	(76,213)		(10,967)
	(2,927)		(107)
	(5,993)		(5,993)
	(71,833)		(7,724)
	(1,781,967)		(76,710)
	42,214		34,978

3. INCoME TAXEs

(a) Income tax recognised in income statement Tax expense/(credit) comprises: Current tax expense/(credit): Current year Adjustments forprioryears Deferred tax expense/(credit): Origination and reversal of temporary differences Adjustments forprioryears Total income tax expense The prima facie income tax expense on pre-tax accounting proft from operations reconciles to the income tax expense in the fnancial statements as follows: Proft before income tax Income tax expense calculated at 28% (2012: 28%)	Group	2012 $’000 10,108 (245) 9,863 (2,026) 315 (1,711) 8,152 36,101 10,108	Parent	2012 $’000 514 (419) 95 (78) 19 (59) 36 24,684 6,912 (6,187) (289) – (400) – 36
	2013 $’000		2013 $’000
	13,135		(460)
	860		299
	13,995		(161)
	171		270
	(159)		9
	12		279
	14,007		118
	42,214		34,978
	11,820		9,794
Non-deductible expenses/(non-assessable income)	998	(11)	(9,984)
Effect of differences arising from investment interests in other jurisdictions Effect of different tax rates of subsidiaries operating in other jurisdictions Under/(over) provision of income tax in previous year Other adjustments Total income tax expense	–	(289) (47) 70 (1,679) 8,152	–
	441		–
	701		308
	47		–
	14,007		118

The tax rates used are principally the corporate tax rates of 28% (2012: 28%) payable by New Zealand and 30% (2012: 30%) payable by Australian corporate entities on taxable profits under tax law in each jurisdiction.

40 — 41

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the Financial Year ended 30 June, 2013

3. INCoME TAXEs CONTINUED

(b) Current tax assets and liabilities Current tax assets: Current tax refundable Current tax liabilities: Current taxpayable (c) Deferred tax balance Deferred tax assets comprise: Temporary differences Deferred tax liabilities comprise: Temporarydifferences	Group	2012 $’000 735 6,988 7,426 (10,880) (3,454)	Parent	2012 $’000 333 – 645 (2,026) (1,381)
	2013 $’000		2013 $’000
	1,628		722
	6,378		–
	34,361		310
	(48,365)		(2,220)
	(14,004)		(1,910)

Taxable and deductible temporary differences arise from the following:

2013 Gross deferred tax liabilities: Property, plant and equipment Provisions Other fnancial assets – derivatives Intangible assets Gross deferred tax assets: Property, plant and equipment Provisions Doubtful debts and impairment losses Other fnancial liabilities – derivatives Tax losses carried forward Net movement in deferred tax 2012 Gross deferred tax liabilities: Property, plant and equipment Provisions Intangible assets Gross deferred tax assets: Provisions Doubtful debts and impairment losses Other fnancial liabilities – derivatives Tax losses carried forward Net movement in deferred tax	Group	Group	Group	Group	Group
	Opening balance $’000	Charged to income $’000	Charged to other comprehensive income $’000	Acquisitions $’000	Closing balance $’000
	(1,936)	163	–	–	(1,773)
	(26)	17	–	–	(9)
	–	26	(316)	–	(290)
	(8,918)	164	387	(37,926)	(46,293)
	(10,880)	370	71	(37,926)	(48,365)
	–	(30)	(68)	6,309	6,211
	4,610	148	(346)	20,768	25,180
	766	6	38	–	810
	71	(221)	(43)	762	569
	1,979	(285)	(103)	–	1,591
	7,426	(382)	(522)	27,839	34,361
		(12)	(451)
	(1,609) – (7,097) (8,706) 3,219 744 191 384 4,538	(327) (26) (1) (354) 445 22 3 1,595 2,065 1,711	– – – – – – (123) – (123) (123)	– – (1,820) (1,820) 946 – – – 946	(1,936) (26) (8,918) (10,880) 4,610 766 71 1,979 7,426

2013 Gross deferred tax liabilities: Property, plant and equipment Intangible assets Other fnancial assets – derivatives Gross deferred tax assets: Provisions Doubtful debts and impairment losses Other fnancial liabilities – derivatives Net movement in deferred tax 2012 Gross deferred tax liabilities: Property, plant and equipment Intangible assets Gross deferred tax assets: Provisions Doubtful debts and impairment losses Other fnancial liabilities – derivatives Net movement in deferred tax	Parent	Parent	Parent	Parent
	Opening balance $’000	Charged to income $’000	Charged to other comprehensive income $’000	Closing balance $’000
	(637)	21	–	(616)
	(1,389)	–	–	(1,389)
	–	–	(215)	(215)
	(2,026)	21	(215)	(2,220)
	571	(300)	–	271
	39	–	–	39
	35	–	(35)	–
	645	(300)	(35)	310
		(279)	(250)
	(650) (1,388) (2,038) 524 39 130 693	13 (1) 12 47 – – 47 59	– – – – – (95) (95) (95)	(637) (1,389) (2,026) 571 39 35 645

No liability has been recognised in respect of the amount of temporary differences including foreign currency translation reserves associated with undistributed earnings of off-shore subsidiaries because the Group is in a position to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in the foreseeable future.

and it is probable that such differences will not reverse in the foreseeable future.
(d) Imputation credit account balances Imputation credits available directly and indirectly to shareholders of theparent company:	Group	Group
	2013 $’000	2012 $’000
	1,399	8,690

42 — 43

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the Financial Year ended 30 June, 2013

4. KEY MANAGEMENT PERsoNNEL CoMPENsATIoN

4. KEY MANAGEMENT PERsoNNEL CoMPENsATIoN
Short-term employee benefts	Group	2012 $’000 7,092 7,092	Parent	2012 $’000 4,727 4,727
	2013 $’000		2013 $’000
	9,625		6,942
	9,625		6,942
5. REMUNERATIoN oF AUDIToRs Auditor of the parent entity (Deloitte) Audit of the fnancial statements Audit related services for review of fnancial statements not included above Investigating accountants report Due diligence Information technology services Financial modelling assistance Internal control assurance services These costs have been netted off against share capital Other auditors of entities in the group Audit of fnancial statements Other non-audit services 6. TRADE AND oThER RECEIVAbLEs Trade receivables (i) Other receivables Allowance for impairment(ii)		364 50 – 121 140 – 18 693 – – – 176,476 1,395 (2,159) 175,712		70 26 – 121 140 – – 357 – – –
	432		64
	6		–
	105		105
	278		258
	10		10
	92		–
	12		–
	935		437
	224		–
	9		–
	233		–
	742,028		9,678	8,937 144 (138)
	11,449		859
	(17,048)		(138)
	736,429		10,399	8,943

(i) Trade receivables are non-interest bearing and generally on monthly terms. No interest is charged on the trade receivables for the first 60 days from the date of the invoice. Thereafter, interest may be charged at 3% per annum on the outstanding balance. The Group’s Pharmacy business units generally holds collateral over its trade receivables balances.

(ii) Allowance for Impairment

Balance at the beginning of the year Arising from businesses acquired Impairment loss recognised on trade receivables Amounts written off as uncollectible Amounts recovered during year Impairment losses reversed Effect of foreign currencyexchange differences		(1,625) (631) (296) 395 (5) 3 – (2,159)		(138) – (4) 4 – – – (138)
	(2,159)		(138)
	(15,329)		–
	(222)		(20)
	280		20
	(7)		–
	208		–
	181		–
	(17,048)		(138)

Group Parent 2013 $’000 2012 $’000 2013 $’000 2012 $’000 (iii)Aging of impaired trade and other receivables Current 4,334 43 – – 30 – 60 days 2,387 50 – – 60 – 90 days 961 32 – – 90 days+ 12,888 3,413 138 138 20,570 3,538 138 138 (iv)Aging of past due but not impaired trade and other receivables Included in the trade and other receivables balance are debtors with a carrying amount of Group $82.36m (2012: $23.74m) and Parent $2.217m (2012: $1.51m) which are past due at the reporting date for which the Group and/or Parent has not provided any impairment as the amounts are still considered recoverable. 30 – 60 days 65,760 17,692 1,806 821 60 – 90 days 8,785 3,128 198 113 90 days+ 7,815 2,920 213 576 82,360 23,740 2,217 1,510 7. PREPAYMENTs Current portion 7,837 4,540 838 1,577 Termportion 16 195 – – 7,853 4,735 838 1,577 8. INVENToRIEs Finished Goods At cost 558,350 162,705 9,146 9,114 At net realisable value – 292 – – 558,350 162,997 9,146 9,114 9. oThER FINANCIAL AssETs – DERIVATIVEs At Fair Value: Foreign currency forward contracts (i) 160 109 160 – Foreign currency forward contracts (ii) 2,615 – 885 – Interest rate swaps(ii) 771 – 771 – 3,546 109 1,816 –
		Group	2012 $’000	Parent	2012 $’000
		2013 $’000		2013 $’000
		4,334		–
		2,387		–
		961		–
		12,888		138
		20,570		138
				1,806
				198
				213
				2,217	1,510
					1,577 – 1,577 9,114 – 9,114 – – – –
				838
				–
				838
				9,146
				–
				9,146
				160
				885
				771
				1,816

Included in the trade and other receivables balance are debtors with a carrying amount of Group $82.36m (2012: $23.74m) and Parent $2.217m (2012: $1.51m) which are past due at the reporting date for which the Group and/or Parent has not provided any impairment as the amounts are still considered recoverable.

(i) Financial asset carried at fair value through profit or loss (“FVTPL”).

(ii) Designated and effective as cash flow hedging instrument carried at fair value.

In determining the recoverability of trade and other receivables, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to reporting date. The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the Directors believe that there is no further credit provision required in excess of the allowance for doubtful debts.

The impairment recognised represents the difference between the carrying amount of these trade receivables and the present value of the expected liquidation proceeds. The Group does not hold any collateral over these balances. The net carrying amount is considered to approximate their fair value.

44 — 45

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the Financial Year ended 30 June, 2013

10. PRoPERTY, PLANT AND EQUIPMENT

Gross carrying amount Balance at 1 July, 2011 Additions Disposals Acquisition through business combinations Net foreign currencyexchange differences Balance at 30 June, 2012 Additions Disposals Acquisition through business combinations Net foreign currencyexchange differences Balance at 30 June, 2013 Accumulated depreciation Balance at 1 July, 2011 Disposals Depreciation expense Net foreign currencyexchange differences Balance at 30 June, 2012 Disposals Depreciation expense Net foreign currencyexchange differences Balance at 30 June, 2013 Net book value As at 30 June,2012 As at 30 June,2013	Freehold land at cost $’000 1,895 – – 187 (6) 2,076 – (49) 28,529 (316) 30,240 – – – – – – – – – 2,076 30,240	Buildings at cost $’000 9,043 – – 238 (8) 9,273 4 (90) 10,238 (131) 19,294 (2,051) – (273) 3 (2,321) 42 (367) 9 (2,637) 6,952 16,657	Group Leasehold improvement at cost $’000 Plant and vehicles at cost $’000 2,058 7,466 273 1,773 (370) (476) 1,071 4,311 (31) (111) 3,001 12,963 120 1,569 (128) (667) 7,252 21,675 (182) (630) 10,063 34,910 (1,182) (4,219) 289 5 (376) (1,214) 13 27 (1,256) (5,401) 95 562 (476) (2,016) 64 174 (1,573) (6,681) 1,745 7,562 8,490 28,229	Group Leasehold improvement at cost $’000 Plant and vehicles at cost $’000 2,058 7,466 273 1,773 (370) (476) 1,071 4,311 (31) (111) 3,001 12,963 120 1,569 (128) (667) 7,252 21,675 (182) (630) 10,063 34,910 (1,182) (4,219) 289 5 (376) (1,214) 13 27 (1,256) (5,401) 95 562 (476) (2,016) 64 174 (1,573) (6,681) 1,745 7,562 8,490 28,229	Offce equipment furniture & fttings at cost $’000 12,438 1,825 (648) 882 (42) 14,455 792 (1,083) 7,810 (266) 21,708 (8,474) 969 (1,811) 15 (9,301) 1,067 (2,063) 104 (10,193) 5,154 11,515
						Total $’000
						32,900
						3,871
						(1,494)
						6,689
						(198)
						41,768
						2,485
						(2,017)
						75,504
						(1,525)
						116,215
						(15,926)
						1,263
						(3,674)
						58
						(18,279)
						1,766
						(4,922)
						351
						(21,084)
						23,489
						95,131

Gross carrying amount Balance at 1 July, 2011 Additions Disposals Balance at 30 June, 2012 Additions Disposals Balance at 30 June, 2013 Accumulated depreciation Balance at 1 July, 2011 Disposals Depreciation expense Balance at 30 June, 2012 Disposals Depreciation expense Balance at 30 June, 2013 Net book value As at 30 June,2012 As at 30 June,2013	Freehold land at cost $’000 694 – – 694 – – 694 – – – – – – – 694 694	Buildings at cost $’000 2,920 – – 2,920 – – 2,920 (298) – (83) (381) – (80) (461) 2,539 2,459	Parent Leasehold improvement at cost $’000 Plant and vehicles at cost $’000 198 823 117 795 (198) (224) 117 1,394 14 113 – (300) 131 1,207 (148) (559) 159 206 (11) (139) – (492) – 287 (13) (205) (13) (410) 117 902 118 797		Offce equipment furniture & fttings at cost $’000 1,412 545 (588) 1,369 107 (267) 1,209 (1,005) 583 (200) (622) 267 (254) (609) 747 600
						Total $’000
						6,047
						1,457
						(1,010)
						6,494
						234
						(567)
						6,161
						(2,010)
						948
						(433)
						(1,495)
						554
						(552)
						(1,493)
						4,999
						4,668

Group plant includes finance leases capitalised with a cost of $5.261m (2012: $0.304m) and book value of $4.936m (2012: $0.222m).

Land and buildings in Auckland with a carrying value of $5.196m (2012: $5.381m) were last valued on 30 June 2011 and determined by Telfer Young (Auckland) Limited, in accordance with NZ IAS16, to have a fair value of $9.6m.

Land and buildings in Christchurch has a carrying value of $3.153m (2012: $3.233m) which approximates its expected fair value.

Land and buildings acquired as part of the acquisition of ZHHA Pty Limited (Symbion Group) at 1 June 2013 were valued by Jones Lang LaSalle, in accordance with IAS16, with a fair value of $37.9m. This valuation has been reflected in the property, plant and equipment acquired as part of the acquisition of the Symbion Group – refer note 24.

the acquisition of the Symbion Group – refer note 24.
Aggregate depreciation recognised as an expense during the year: Buildings Leasehold improvements Plant and vehicles Offce equipment,furniture & fttings	Group	2012 $’000 273 376 1,214 1,811 3,674	Parent	2012 $’000 83 11 139 200 433
	2013 $’000		2013 $’000
	367		80
	476		13
	2,016		205
	2,063		254
	4,922		552

46 — 47

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the Financial Year ended 30 June, 2013

11. CAPITAL WoRK IN PRoGREss

11. CAPITAL WoRK IN PRoGREss
Capital work inprogress	Group	2012 $’000 9	Parent	2012 $’000 –
	2013 $’000		2013 $’000
	787		–

The capital work in progress relates to software development ($469,000) – there are no further costs to complete the project (2012: $48,000), and a refrigeration system ($318,000) – the cost to complete the project is $137,000.

12. GooDWILL

12. GooDWILL
Gross carrying amount Balance at beginning of fnancial year Recognised on acquisition during the year Effects of foreign currencyexchange differences Net book value	Group	2012 $’000 114,132 66,669 (248) 180,553	Parent	2012 $’000 1,728 – – 1,728
	2013 $’000		2013 $’000
	180,553		1,728
	542,736		–
	(1,131)		–
	722,158		1,728

Allocation of goodwill to cash-generating units

Goodwill has been allocated for impairment testing purposes to the following cash generating units representing the lowest level at which management monitor goodwill:

• Australian Hospital and Primary Healthcare sector (EBOS Group Pty Limited): Healthcare Australia.

• New Zealand Consumer, Hospital, Primary Healthcare, Aged Care and International Product Supplies (EBOS Group Limited): Healthcare NZ.

• New Zealand Pharmacy Wholesaler and Logistic Services (PRNZ Limited): Healthcare – Pharmacy/Logistics NZ.

• New Zealand Animal care sector (Masterpet Corporation Limited (NZ)): Animal care – NZ.

• Australian Animal care sector (Masterpet Australia Pty Limited): Animal care – Australia.

The carrying amount of goodwill allocated to cash-generating units is as follows:

The carrying amount of goodwill allocated to cash-generating units is as follows:
Healthcare Australia Healthcare NZ (Parent) Healthcare – Pharmacy/Logistics NZ Animal care – NZ Animal care – Australia	Group	2012 $’000 17,137 1,728 95,043 66,375 270 180,553	Parent	2012 $’000 – 1,728 – – – 1,728
	2013 $’000		2013 $’000
	503,910		–
	1,728		1,728
	95,043		–
	66,375		–
	55,102		–
	722,158		1,728

The goodwill recognised in relation to the acquisition of the Symbion Group was also tested for impairment as at 30 June 2013. The respective amounts arising from the acquisition of Symbion Group’s healthcare and animal care operations have been allocated to the Healthcare Australia and Animal care – Australia cash generating units.

During the year ended 30 June 2013, management have determined that there is no impairment of any of the cash generating units containing goodwill (2012: Nil).

The recoverable amounts (i.e. higher of value in use and fair value less costs to sell) of those units are determined on the basis of value in use calculations. Management has determined that the recoverable amount calculations are most sensitive to changes in the following assumptions:

• Healthcare Australia, Healthcare NZ, Animal care NZ and Animal care Australia – Maintaining market share and gross margin being maintained during a period of high volatility in foreign currency during the budget period.

• Pharmacy/Logistics NZ – Maintaining market share and controlling operational costs during the assessment period.

• Gross margins during the period for Healthcare Australia, Healthcare NZ, Pharmacy/Logistics NZ, Animal care NZ and Animal care Australia are estimated by management based on average gross margins achieved before the start of the assessment period. Market shares during the assessment period are assessed by management based on average market shares achieved in the period immediately before the start of the budget period, adjusted each year for any anticipated growth.

The value in use calculation uses cash flow projections based on financial forecasts approved by management covering a five year period and managements past experience.

Annual growth rates of 1.4% to 5% (2012: 2.5% to 4%), which is below current historical growth rates; an allowance of 1.4% to 5% (2012: 2% to 3%) for increase in expenses, and pre tax discount rates of 13.1% to 17.4% (2012: 12.9% to 17.4%) have been applied to these projections. Cash flows beyond the five year period have been extrapolated using a 2% to 2.5% (2012: 2%) growth rate. Management also believes that any reasonably possible change in the key assumptions would not cause the carrying amount of any of the cash generating units to exceed their recoverable amount.

13. INDEFINITE LIFE INTANGIbLEs

Gross carrying amount Balance at 1 July, 2011 Recognised on acquisition during the year Net foreign currencyexchange differences Balance at 30 June, 2012 Recognised on acquisition during the year Net foreign currencyexchange differences Balance at 30 June, 2013 Net book value As at 30 June,2012 As at 30 June,2013	Group Symbion Brands $’000 – – – – 28,871 (310) 28,561 – 28,561	Group Other Pharmacy Brands $’000 6,556 – (25) 6,531 – (118) 6,413 6,531 6,413	Group Masterpet Brand & Intangibles $’000 – 7,110 – 7,110 – – 7,110 7,110 7,110	Group Trademarks $’000 17,240 – – 17,240 – – 17,240 17,240 17,240	Group
					Total $’000
					23,796
					7,110
					(25)
					30,881
					28,871
					(428)
					59,324
					30,881
					59,324

Gross carrying amount Balance at 1 July, 2011 Balance at 30 June, 2012 Balance at 30 June, 2013 Net book value As at 30 June,2012 As at 30 June,2013	Parent Other Pharmacy Brands $’000 4,960 4,960 4,960 4,960 4,960			Parent
				Total $’000
				4,960
				4,960
				4,960
				4,960
				4,960

48 — 49

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the Financial Year ended 30 June, 2013

13. INDEFINITE LIFE INTANGIbLEs CONTINUED

The carrying amount of indefinite life intangibles (brands and trademarks) has been allocated to the cash generating units as follows:

Healthcare Australia Healthcare NZ Pharmacy/Logistics NZ Animal care – NZ	Group	2012 $’000 4,141 2,390 17,240 7,110 30,881
	2013 $’000
	32,584
	2,390
	17,240
	7,110
	59,324

Management have assessed these as having an indefinite useful life. In coming to this conclusion management considered expected expansion of the usage of the brands across other products and markets, the typical product life cycle of these assets, the stability of the industry in which the brands are operating, the level of maintenance expenditure required and the period of legal control over the brands.

During the current year management have determined that there is no impairment of any of the brands (2012: Nil).

The value in use calculation uses cash flow projections based on financial forecasts approved by management covering a five year period and managements past experience.

The calculation of the recoverable amounts for indefinite life intangibles have been determined based on a value in use calculation that uses cash flow projections based on financial budgets approved by management covering a five-year period. Management has determined that the recoverable amount calculations are most sensitive to change in the following assumptions. Annual growth rates of 1.4% to 3% (2012: 2% to 5%), and an allowance of 1.4% to 3% (2012: 2% to 4%) for increases to expenses, and pre-tax discount rates of 12.9% to 19.2% (2012:13.2% to 19.2%) have been applied to these projections. Cash flows beyond the five-year period have been extrapolated using a 2% to 2.5% (2012: 2%) growth rate. Management also believes that any reasonably possible change in the key assumptions would not cause the carrying amount of the brands to exceed their recoverable amount.

14. FINITE LIFE INTANGIbLEs

14. FINITE LIFE INTANGIbLEs
Gross carrying amount Balance at 30 June, 2012 Recognised on acquisition during the year Other additions Net foreign exchange differences Balance at 30 June, 2013 Accumulated amortisation & impairment Balance at 30 June, 2012 Amortisation expense Net foreign exchange differences Balance at 30 June, 2013 Net book value As at 30 June,2012 As at 30 June,2013	Group Supply Contracts $’000 1,490 – – – 1,490 (1,458) (32) – (1,490) 32 –	Group Software $’000 330 1,853 142 (67) 2,258 (83) (367) 35 (415) 247 1,843	Group Customer Relationships/ Contracts $’000 – 95,443 – (1,026) 94,417 – (1,115) – (1,115) – 93,302
				Total $’000
				1,820
				97,296
				142
				(1,093)
				98,165
				(1,541)
				(1,514)
				35
				(3,020)
				279
				95,145

Allocated to cash generating units as follows:

Allocated to cash generating units as follows:
Pharmacy/Logistics NZ Animal care – NZ Animal care – Australia Healthcare Australia	2013 $’000	2012 $’000
	–	32 81 166 –
	127
	13,976
	81,042
	95,145	279

15. sUbsIDIARIEs

Parent and Head Entity

EBOS Group Limited

The following entities comprise the trading and holding companies of the Group:

The following entities comprise the trading and holding companies of the Group:
Subsidiaries(all balance dates 30 June) EBOS Healthcare (Australia) Pty Limited EBOS Group Pty Limited EBOS Health & Science Pty Limited EBOS Shelf Company New Zealand Limited EBOS Shelf Company Australia Pty Limited PRNZ Limited EBOS Limited Partnership Healthcare Distributors Pty Limited Masterpet Corporation Limited Natures Recipe Pet Foods Limited Masterpet Australia Pty Limited Botany Bay Imports and Exports Pty Limited Aristopet Pty Ltd (formerly Beaphar Australia Pty Limited) EBOS Australia Holdings Pty Limited ZHHA Pty Ltd ZAP Services Pty Ltd Symbion Pty Ltd Intellipharm Pty Ltd Clinect Pty Ltd Lyppard Australia Pty Ltd APHS Packaging Pty Ltd*	Country of Incorporation Australia Australia Australia New Zealand Australia New Zealand Australia Australia New Zealand New Zealand Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia	Ownership Interests and Voting Rights 2013 2012 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 0% 100% 0% 100% 0% 100% 0% 100% 0% 100% 0% 100% 0% 100% 0%

• These entities represent the entities acquired as a result of the acquisition of the Symbion Group on 1 June 2013. These entities currently have a 31 December balance date, however it is intended to have this changed to 30 June.

50 — 51

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the Financial Year ended 30 June, 2013

16. INVEsTMENT IN AssoCIATEs

Name of business acquired 2012 Animates NZ Holdings Limited	Principal activities Animal care supplies	Date of acquisition December 2011	Proportion of shares and votingrights acquired 50%	Cost of acquisition $’000 18,150

The reporting date for Animates NZ Holdings Limited is 30 June. Animates NZ Holdings Limited is incorporated in New Zealand.

Although the company holds 50% of the shares and voting power this entity is not deemed to be a subsidiary as the other 50% is held by a single shareholder and significant transactions require 75% shareholder approval.

In December 2011 the Group acquired a 50% shareholding in Aristopet Pty Ltd (formerly Beaphar Australia Pty Limited) for $50,000. In June 2012 the remaining 50% shareholding was also acquired by the Group at which point Aristopet Pty Ltd became a subsidiary of the Group.

The summary financial information in respect of the Group’s associate is set out below:

Statement of fnancialposition Total assets Total liabilities Net assets Group’s share of net assets Income Statement Total revenue Total proft for the period Group’s share of profts of associates	2013 $’000	2012 $’000 28,965 (23,185) 5,780 2,890 35,157 1,046 544
	28,461
	(21,512)
	6,949
	3,475
	56,061
	1,170
	585

Movement in the carrying amount of the Group’s investment in associates:

Balance at beginning of fnancial year New investments Share of equity accounted investments (before dividends) Share of dividends Disposal of associate Balance at end of fnancialyear Goodwill included in the carrying amount of the Group’s investment in associates The Group’s share of the contingent liabilities of associates The Group’s share of capital commitments of associates	Group	2012 $’000 – 18,200 544 (500) 184 18,428 15,945 – 1,736
	2013 $’000
	18,428
	–
	585
	–
	–
	19,013
	15,945
	–
	–

17. boRRoWINGs

Current Bank loans (i) Bank loans – securitisation facility (ii) Finance lease liabilities (iii) Advances from subsidiaries(at call) (iv) Non-current Bank loans (i) Finance lease liabilities(iii) Total borrowings	Group	2012 $’000 10,156 – 534 – 10,690 129,684 1,064 130,748 141,438	Parent	2012 $’000 4,000 – – 29,576 33,576 107,250 – 107,250 140,826
	2013 $’000		2013 $’000
	21,798		4,000
	193,877		–
	1,189		–
	–		29,319
	216,864		33,319
	151,357		87,412
	3,296		–
	154,653		87,412
	371,517		120,731

• (i) Bank term loans and revolving cash advance facilities of $196.3m, of which $69.5m was unutilised at 30 June 2013, operate under a negative pledge deed provided to ANZ National Bank Limited and Bank of New Zealand Limited by the parent company and its subsidiaries, excluding the Symbion Group entities acquired on 1 June 2013.

Bank loans of $46.3m at 30 June 2013, resulting from the Symbion Group acquisition, are subject to a security over the Symbion Group assets, excluding trade receivables that are security for the securitisation facility referred to below, in favour of the National Australia Bank Limited.

There have been no breaches of the banking covenants.

• (ii) The Group, through a subsidiary company, has a trade debtor securitisation facility of $496.7m of which $302.8m was unutilised at 30 June 2013. The securitisation facility involves Symbion Pty Limited providing security over the future cash flows of specific trade receivables of Symbion Pty Limited, which meet certain criteria, in return for cash finance on a contracted percentage of the security provided. As recourse, in the event of default by a trade debtor, remains with Symbion Pty Limited the trade receivables provided as security and the funding provided by the National Australia Bank Limited are recognised on the Group’s balance sheet.

Interest is charged on the average monthly balance of the funding provided under the securitisation facility. At 30 June 2013 the value of trade receivables as security under this securitisation facility was $283.8m. The net cash flows associated with the securitisation programme are disclosed in the cash flow statement as cash flows from financing activities.

The Symbion Pharmacy Services Trade Receivables Trust (“SPS Trust”), which is consolidated, was established solely for their purpose of purchasing qualifying trade receivables from Symbion Pty Limited and funding the same from National Australia Bank Limited. The SPS Trust has directly provided funding to Symbion Pty Limited to acquire the rights to the cashflows of the securitised receivables.

• (iii) Secured by the assets leased.

• (iv) Unsecured.

The fair value of non current borrowings is approximately equal to their carrying amount.

On 5 July 2013 the Group refinanced its term debt, working capital and securitisation facilities that were in place at 30 June 2013. As part of this process the Group also combined its security agreements with its bankers – refer notes 28 and 32.

18. TRADE AND oThER PAYAbLEs

Current Trade payables Otherpayables Non-current Otherpayables Total trade and otherpayables	Group	2012 $’000 258,209 17,339 275,548 3,943 279,491	Parent	2012 $’000 5,045 3,086 8,131 – 8,131
	2013 $’000		2013 $’000
	781,156		4,344
	111,489		4,828
	892,645		9,172
	8,489		–
	901,134		9,172

52 — 53

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the Financial Year ended 30 June, 2013

19. LEAsEs

Finance leases

Minimum future lease payments

Finance leases relate to office equipment, plant and motor vehicles. The Group has options to purchase the equipment for a nominal amount at the conclusion of the lease agreements.

Finance lease liabilities

Not later than 1 year Later than 1 year and not later than 5years Minimum lease payments* Less future fnance charges Present value of minimum lease payments Included in the fnancial statements as: Finance leases – current portion Finance leases – non currentportion	M	inimum Future L 2012 $’000 665 1,199 1,864 (266) 1,598	ease Payments	2012 $’000 – – – – –	Present Va	lue of Minimum 2012 $’000 534 1,064 1,598 – 1,598 534 1,064 1,598	Future Lease Payments Parent 2013 $’000 2012 $’000 – – – – – – – – – – – – – – – –
	Group		Parent		Group		Parent
	2013 $’000		2013 $’000		2013 $’000		2013 $’000
	1,504		–		1,189		–
	3,590		–		3,296		–
	5,094		–		4,485		–
	(609)		–		–		–
	4,485		–		4,485		–
					1,189		–
					3,296		–
					4,485		–

• Minimum future lease payments include the aggregate of all lease payments and any guaranteed residual.

The fair value of the finance lease liabilities is approximately equal to their carrying value.

Operating leases

Leasing arrangements

Operating leases relate to certain property and equipment, with lease terms of between one to fifteen years with options to extend for a further one to fifteen years. All operating lease contracts contain market review clauses in the event that the Company/Group exercises its option to renew. The Company/Group does not have an option to purchase the leased asset at the expiry of the lease period.

Operating leases Non-cancellable operating lease payments Not longer than 1 year Longer than 1 year and not longer than 5 years Longer than 5years	Group	2012 $’000 8,680 22,706 11,697 43,083	Parent	2012 $’000 1,015 3,096 3,192 7,303
	2013 $’000		2013 $’000
	23,701		1,021
	72,114		2,943
	48,209		2,520
	144,024		6,484

20. oThER FINANCIAL LIAbILITIEs – DERIVATIVEs

20. oThER FINANCIAL LIAbILITIEs – DERIVATIVEs
At fair value: Foreign currency forward contracts (i) Interest rate swaps(ii)	Group	2012 $’000 100 430 530	Parent	2012 $’000 98 124 222
	2013 $’000		2013 $’000
	–		–
	2,872		–
	2,872		–

• (i) Financial liability carried at fair value through profit or loss (“FVTPL”).

• (ii) Designated and effective as cashflow hedging instrument carried at fair value.

21. shARE CAPITAL

21. shARE CAPITAL
Fully paid ordinary shares Balance at beginning of fnancial year Issue of shares to executives and staff under employee share ownership scheme Dividend reinvested – October 2012 – April 2013 Bonus issue – June 2013 Institutional placement – June 2013 Share issue costs	2013 No ’000	2013 $’000	2012 No. ’000 52,107 – – – – – – 52,107	2012 $’000 107,970 – – – – – – 107,970
	52,107	107,970
	63	250
	429	3,445
	357	3,100
	1,999	–
	10,591	90,026
	–	(3,503)
	65,546	201,288

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

Changes to the Companies Act in 1993 abolished the authorised capital and par value concept in relation to share capital from 1 July, 1994. Therefore, the Company does not have a limited amount of authorised capital and issued shares do not have a par value.

Given the immateriality of the amounts involved, the issue of shares to executives and staff under the employee ownership scheme have not been accounted for pursuant to NZ IFRS-2: Share Based Payment. Since the inception of the employee ownership scheme in December 1994, 452,100 (2012: 389,500) shares have been issued raising $971,905 (2012: $721,505).

54 — 55

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the Financial Year ended 30 June, 2013

22. REsERVEs

Foreign currency translation reserve Balance at beginning of the year Translation of foreign operations Balance at end of theyear	Group	2012 $’000 2,473 (1,783) 690
	2013 $’000
	690
	(6,365)
	(5,675)

Exchange differences, principally relating to the translation from Australian dollars, being the functional currency of the Group’s foreign controlled entities in Australia, into New Zealand dollars, are brought to account by entries made directly to the foreign currency translation reserve.

Retained Earnings Balance at beginning of the year Proft for the year Dividends(note 23) Balance at end of theyear Cash Flow Hedge Reserve Balance at beginning of the year Gain recognised on cash fow hedges Related income tax Balance at end of theyear	Group	2012 $’000	Parent	2012 $’000
	2013 $’000		2013 $’000
	100,359	88,824	20,061	11,827
	28,207	27,949	34,860	24,648
	(21,298)	(16,414)	(21,298)	(16,414)
	107,268	100,359	33,623	20,061
		(471)		(338)
	(418)		(90)
	2,773	176	1,532	343
	(359)	(123)	(250)	(95)
	1,996	(418)	1,192	(90)

The hedging reserve represents gains and losses recognised on the effective portion of cash flow hedges. The cumulative deferred gain or loss on the hedge is recognised in profit or loss when the hedged transaction impacts profit or loss.

23. DIVIDENDs

23. DIVIDENDs
Recognised amounts Fully paid ordinary shares – Final – prior year – Taxable bonus issue – current year – Interim – currentyear Unrecognised amounts Final dividend	2013 Cents per share	Total $’000	2012 Cents per share 18.0 – 13.5 31.5 20.5	Total $’000 9,379 – 7,035 16,414 10,682
	20.5	10,682
	–	1,411
	17.5	9,205
	38.0	21,298
	15.0	21,992

A dividend of 15.0 cents per share was declared on 20 August 2013 with the dividend being paid on 22 October 2013. As the dividend reinvestment plan will be in operation for this dividend shareholders may elect to reinvest part or all of their dividends in the Company. The anticipated cash impact of the dividend is $15.0m (2012: $7.323m).

24. ACQUIsITIoN oF sUbsIDIARIEs

24. ACQUIsITIoN oF sUbsIDIARIEs
Name of business acquired 2013 ZHHA PtyLimited(Symbion Group)	Principal activities Healthcare and animal care supplies	Date of acquisition June 2013	Proportion of shares acquired 100%	Cost of acquisition $’000
				865,000
				865,000

Assets and liabilities acquired 2013

Assets and liabilities acquired 2013
Current assets Cash and cash equivalents Trade and other receivables Provision for doubtful debts	Symbion Group $’000	Fair value adjustment $’000	Fair value on acquisition $’000
	49,263	–	49,263
	682,961	–	682,961
	(15,329)	–	(15,329)
Prepayments	4,067	–	4,067
Inventories	375,709	–	375,709
Other fnancial assets
– derivatives	338	–	338
– investment – subordinated notes Non-current assets	59,541	(59,541)1	–
Property, plant and equipment	96,543	(21,039)2	75,504
Deferred tax assets	27,839	–	27,839
Indefnite life intangibles	–	28,8713	28,871
Finite life intangibles Current liabilities Trade and other payables Finance leases Bank loans Employee benefts Other fnancial liabilities – derivatives Non-current liabilities Bank loans Trade and other payables Finance leases Employee benefts Deferred tax liabilities Net assets acquired Goodwill on acquisition	27,774	69,5223	97,296
	(705,340)	(7,446)4	(712,786)
	(199)	–	(199)
	(249,097)	59,5411	(189,556)
	(15,215)	–	(15,215)
	(2,879)	–	(2,879)
	(33,405)	–	(33,405)
	(4460)	–	(4460)
	, (3,298)	–	, (3,298)
	(4,531)	–	(4,531)
	(4,914)	(33,012)5	(37,926)
	285,368	36,896	322,264
			542,736
Consideration Less cash and cash equivalents acquired Deferredpurchase consideration			865,000
			(49,263)
			(865,000)
Net cash(infow)on acquisition			(49,263)

1. To offset investment in subordinated notes against borrowings as a result of a difference in accounting policies, resulting in the actual amount owing to the National Australia Bank being recognised as bank loans.

2. Decrease to the value of plant and equipment by $10.1m and a reduction in land and buildings acquired by $10.9m as a result of an independent valuation performed at acquisition.

3. To recognise customer relationships and brands as a result of independent valuations performed at acquisition.

4. Provision to recognise required maintenance and land duty on property acquired as part of the acquisition.

5. Deferred tax resulting from the above fair value adjustments recognised and also to recognise deferred tax on the intangibles of the Symbion Group which were not previously recognised as a result of a difference in accounting policies.

56 — 57

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the Financial Year ended 30 June, 2013

24. ACQUIsITIoN oF sUbsIDIARIEs CONTINUED

24. ACQUIsITIoN oF sUbsIDIARIEsCONTINUED
Name of business acquired 2012 Masterpet Corporation Ltd (MCL) supplies Beaphar Australia PtyLtd(BAPL)supplies	Principal activities Animal care Animal care	Date of acquisition December 2011 June 2012	Proportion of shares acquired 100% 100%	Cost of acquisition $’000 86,800 265 87,065

Assets and liabilities acquired 2012:

Current assets Cash and cash equivalents Trade and other receivables Provision for doubtful debts Prepayments Inventories Other fnancial assets: derivatives Non-current assets Property, plant and equipment Receivable from jointly controlled entity Deferred tax assets Indefnite life intangibles Finite life intangibles Current liabilities Bank overdraft Trade and other payables Finance leases Bank loans Current tax payable Employee benefts Other fnancial liabilities – derivatives Non-current liabilities Bank loans Finance leases Employee benefts Deferred tax liabilities Net assets acquired Goodwill on acquisition Gain on disposal of associate Consideration Less cash and cash equivalents acquired Plus bank overdraft acquired Net cash outfow on acquisition	MCL $’000 342 29,985 (631) 981 28,057 214 5,587 1,258 946 610 318 (3,957) (12,444) (536) (224) (2,066) (2,133) (31) (29,046) (1,054) (448) – 15,728	Fair value adjustment $’000 – – – – – – – – – 6,500* – – – – – – – – – – – (1,820) 4,680	Fair value on acquisition $’000 342 29,985 (631) 981 28,057 214 5,587 1,258 946 7,110 318 (3,957) (12,444) (536) (224) (2,066) (2,133) (31) (29,046) (1,054) (448) (1,820) 20,408 66,392 – 86,800 (342) 3,957 90,415	BAPL $’000 765 850 – 109 1,435 – 1,102 (2,315) – – – – (1,528) – – – (188) – – – – – 230	Fair value adjustment $’000 – – – – – – – – – – – – – – – – – – – – – – –	Fair value on acquisition $’000 765 850 – 109 1,435 – 1,102 (2,315) – – – – (1,528) – – – (188) – – – – – 230 277 (242) 265 (765) – (500)	Total fair value on acquisition $’000 1,107 30,835 (631) 1,090 29,492 214 6,689 (1,057) 946 7,110 318 (3,957) (13,972) (536) (224) (2,066) (2,321) (31) (29,046) (1,054) (448) (1,820) 20,638 66,669 (242) 87,065 (1,107) 3,957 89,915

Goodwill arising on acquisition

Goodwill arose in the acquisition of ZHHA Pty Limited (Symbion Group) in 2013 and Masterpet Corporation Limited (Masterpet Group) in 2012 because the cost included a control premium paid. In addition, the consideration paid for the benefit of future expected cashflows above the current fair value of the assets acquired and the expected synergies and future market benefit expected to be obtained. These benefits are not recognised separately from goodwill as the future economic benefits arising from that cannot be reliably measured and they do not meet the definition of identifiable intangible assets.

The Symbion Group and the Masterpet Group were acquired as they share, with EBOS, many of the core competencies required to be successful in a market focused on health professionals, whether that’s doctors or veterinarians. The Symbion Group provides the Group with a significant presence in the Australian healthcare sector, which may also provide a beachhead for further growth opportunities in this sector. Masterpet provides the Group with growth opportunities in the NZ and Australian animal care sectors and an ability to spread income streams away from government funding sources, as does the Symbion Group’s animal care operation – Lyppard Pty Limited.

Impact of acquisition on the results of the Group

Included in the Group profit for the current year is $4.687m attributable to the Symbion Group (2012: $8.232m Masterpet Group).

Had this business combination been effected at 1 July 2012 the revenue of the Group from continuing operations, inclusive of costs associated with acquisition of subsidiaries, would have been $6,240m (2012: $1,490m) and the Group profit for the period from continuing operations would have been $90.0m (2012: $29.6m).

25. NoTEs To ThE CAsh FLoW sTATEMENT

(a) Subsidiaries acquired Note 24 sets out details of the subsidiaries acquired. Details of the acquisitions are as follows: Consideration Cash and cash equivalents Deferredpurchase consideration Represented by: Net assets acquired (Note 24) Investment in subsidiaries Goodwill on acquisition Gain on disposal of associate Consideration Net cash (infow)/outfow on acquisition Cash and cash equivalents consideration Less cash and cash equivalents acquired Plus bank overdraft acquired	Group	2012 $’000 87,065 – 87,065 20,638 – 66,669 (242) 87,065 87,065 (1,107) 3,957 89,915	Parent	2012 $’000 105,000 – 105,000 – 105,000 – – 105,000 105,000 – – 105,000
	2013 $’000		2013 $’000
	–		–
	865,000		865,000
	865,000		865,000
	322,264		–
	–		865,000
	542,736		–
	–		–
	865,000		865,000
	–		–
	(49,263)		–
	–		–
	(49,263)		–

• As part of the assessment in identifying the assets and liabilities acquired on the acquisition of Masterpet Corporation Limited a $6.5m brand value was identified and recognised at acquisition.

58 — 59

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the Financial Year ended 30 June, 2013

25. NoTEs To ThE CAsh FLoW sTATEMENT CONTINUED

(b) Financing facilities Bank overdraft facility, reviewed annually and payable at call: Amount used Amount unused Bank loan facilities with various maturity dates through to 2016 (2012: August 2016): Amount used Amount unused (c) Reconciliation of proft for the year with cash fows from operating activities Proft for the year Add/(less) non-cash items: Depreciation (Gain)/loss on sale of property, plant and equipment (Gain) on disposal of associate Amortisation of fnite life intangible assets Share of profts from associates (Gain) on derivatives/fnancial instruments Deferred tax Provision for doubtful debts Movement in working capital: Trade and other receivables Prepayments Inventories Current tax refundable/payable Trade and other payables Employee benefts Foreign currencyloss on translation of workingcapital balances Cash costs classifed as investing activities: Costs associated with acquisition of subsidiaries Workingcapital items acquired Net cash infow from operating activities	Group	2012 $’000 307 1,398 1,705 139,840 64,383 204,223 27,949 3,674 128 (242) 94 (228) (33) (1,711) (97) 1,585 (22,818) (1,215) (41,190) 3,876 15,770 4,093 (1,918) (43,402) – 41,980	Parent	2012 $’000 – 1,250 1,250 111,250 64,750 176,000 24,648 433 47 – – – (33) (59) – 388 1,240 (633) (767) (976) (695) 800 – (1,031) – –
	2013 $’000		2013 $’000
	–		–
	2,186		1,250
	2,186		1,250
	367,032		91,412
	371,975		64,750
	739,007		156,162
	28,207		34,860
	4,922		552
	(170)		2
	–		–
	1,514		–
	(585)		–
	(257)		(257)
	12		279
	(441)		–
	4,995		576
	(560,276)		(1,456)
	(3,118)		739
	(395,353)		(32)
	(1,503)		(389)
	621,643		6,787
	21,832		2,802
	(6,421)		–
	(323,196)		8,451
	5,993		–
	310,416		–
	26,415	28,112	43,887	24,005

26. EARNINGs PER shARE CALCULATIoN

Basic earnings per share (refer Income Statement and Note 21) Basic earnings per share Earnings used in the calculation of total basic earnings per share Weighted average number of ordinaryshares for thepurposes of basic earningsper share Diluted earnings per share (refer Income Statement and Note 21) Diluted earnings per shares Earnings used in the calculation of total diluted earnings per share Weighted average number of ordinaryshares for thepurposes of diluted earningsper share	Group	2012 Cents 53.6 $’000 27,949 52,107 Cents 53.6 $’000 27,949 52,107
	2013 Cents
	52.9
	$’000
	28,207
	53,361
	Cents
	52.9
	$’000
	28,207
	53,361

27. CoMMITMENTs FoR EXPENDITURE

Capital expenditure commitments Plant Software development	Group	2012 $’000 – –	Parent	2012 $’000 – –
	2013 $’000		2013 $’000
	18,046		–
	802		–

28. CoNTINGENT LIAbILITIEs & CoNTINGENT AssETs

Contingent liabilities Guarantees given to third parties Guarantees arising from the deed of cross guarantee with other entities in the wholly-owned group	Group	2012 $’000 10,062 –	Parent	2012 $’000 600 28,590
	2013 $’000		2013 $’000
	16,908		458
	–		35,420

In May 2012 the Company renegotiated its bank facilities and entered into a banking syndication agreement with ANZ National Bank Limited and Bank of New Zealand Limited. Bank term loans and revolving cash advance facilities operate under a negative pledge deed provided to the syndicated banks by the Company and its subsidiaries.

On 1 June 2013 the Group acquired the Symbion Group of companies (refer note 15). From acquisition until 5 July 2013 the Symbion Group debt and securitisation facilities acquired were subject to a security over the Symbion Group assets in favour of the National Australia Bank Limited.

On 5 July 2013, post balance date, all Group debt and securitisation facilities became subject to a new single negative pledge deed to the syndicated banks by the Company and its subsidiaries. The Group’s syndicated bankers from 5 July 2013 to the present are ANZ National Bank Limited, Bank of New Zealand Limited and the National Australia Bank Limited.

Previously the Company has entered into a deed of guarantee for certain wholly-owned subsidiaries. The amount disclosed as a contingent liability represents total liabilities of the Group of company’s party to that, less the liabilities recognised by the Group. This amount disclosed also represents the maximum credit risk exposure to the Group and Parent.

A subsidiary company (PRNZ Limited) is guarantor for certain loans made to pharmacies by the ANZ National Bank Limited amounting to $5.283m (2012: $7.635m). The Directors are of the opinion that provisions are not required in respect of these 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.

60 — 61

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the Financial Year ended 30 June, 2013

28. CoNTINGENT LIAbILITIEs & CoNTINGENT AssETs CONTINUED

A performance bond of up to $1m (2012: $1m) is also held by the bank on behalf of a supplier.

Property lease guarantees of $9.278m (2012: $Nil) are held by the bank on behalf of landlords of the Symbion Group.

All companies acquired as part of the Symbion Group acquisition, refer note 15, are party to a deed of cross guarantee in which each entity guarantees the debts of the others.

(c) Segment Assets

Assets are not allocated to segments as they are not reported to the chief operating decision maker at a segment level.

(d) Revenues from major products and services

The Group’s major products and services are the same as the reportable segments i.e. healthcare, animal care and corporate. Revenues are reported above under (b) Segment revenues and results.

(e) Geographical information

29. sEGMENT INFoRMATIoN

(a) Products and services from which reportable segments derive their revenues

The Group’s reportable segments under NZ IFRS 8 are as follows:

Healthcare: Incorporates the sale of healthcare products in a range of sectors, own brands, retail healthcare and wholesale activities.

Animal care: Incorporates the sale of animal care products in a range of sectors, own brands, retail and wholesale activities. The Animal care operations were acquired in December 2011.

Corporate: Includes net funding costs and parent company central administration expenses that have not been allocated to the healthcare or animal care segments. The corporate segment is the result of a 2013 financial year change in the Group’s internal reporting structure. Comparative numbers have been restated.

(b) Segment revenues and results

The following is an analysis of the Group’s revenue and results by reportable segment:

The following is an analysis of the Group’s revenue and results by reportable segment:
Revenue from external customers Healthcare Animal care Corporate Proft/(loss) before depreciation, amortisation, fnance costs and income tax Healthcare Animal care Corporate Segment expenses Healthcare: Depreciation Amortisation of fnite life intangibles Income tax expense Animal care: Depreciation Amortisation of fnite life intangibles Income tax expense Corporate: Finance costs Income tax credit Proft/(loss) for the year Healthcare Animal care Corporate	Group	2012 $’000 1,340,633 86,300 1,746 39,571 10,150 (2,865) (3,142) – (10,294) (532) (94) (616) (6,987) 2,758 26,135 8,908 (7,094)
	2013 $’000
	1,652,450
	169,521
	1,198
	49,068
	18,670
	(9,495)*
	(3,785)
	(1,194)
	(13,146)
	(1,137)
	(320)
	(4,588)
	(9,593)
	3,727
	30,943
	12,625
	(15,361)*

• Includes costs associated with the acquisition of subsidiaries of $5.993m.

The Group operates in two principal geographical areas; New Zealand (country of domicile) and Australia.

The Group’s revenue from external customers by geographical location (of the reportable segment) and information about its segment assets (non-current assets) excluding financial instruments and deferred tax assets are detailed below:

(non-current assets) excluding fnancial instruments and deferred tax assets are detailed below:
Continuing and discontinued operations Revenue from external customers New Zealand Australia Non-current assets New Zealand Australia	Group	2012 $’000 1,252,123 176,556 1,428,679 210,465 24,941 235,406
	2013 $’000
	1,257,302
	565,867
	1,823,169
	206,945
	765,616
	972,561

(f) Information about major customers

No revenues from transactions with a single customer amount to 10% or more of the Group’s revenues (2012: Nil).

30. RELATED PARTY DIsCLosUREs

(a) Parent Entities

The Parent entity in the Group is EBOS Group Limited.

(b) Equity interests in Related Parties

Equity interests in subsidiaries

Details of the percentage of ordinary shares held in subsidiaries are disclosed in note 15 to the financial statements.

(c) Transactions with Related Parties

Transactions involving the parent entity

Amounts receivable from and payable to related parties at balance date are:

PRNZ Limited EBOS Group Pty Limited EBOS Shelf Company New Zealand Limited Healthcare Distributors Limited EBOS Health and Science Pty Limited Masterpet Corporation Limited ZuelligGroupIncorporated	2013 $’000	2012 $’000 3,570 1,925 (29,576) 348 1,087 19,836 – (2,810)
	–
	4,073
	(29,319)
	348
	1,364
	28,683
	(865,000)
	(859,851)

The accounting policies of the reportable segments are consistent with the Group’s accounting policies. Segment result represents profit before depreciation, amortisation, finance costs and tax. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

62 — 63

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the Financial Year ended 30 June, 2013

30. RELATED PARTY DIsCLosUREs CONTINUED

At 30 June 2013 ZHHA Pty Limited owed CB Norwood Pty Limited, a subsidiary of the Zuellig Group, $7.230m and Zuellig Group Incorporated $1.856m.

During the financial year, EBOS Group Limited received dividends of $39.623m (2012: $22.677m) from its subsidiaries.

During the financial year, EBOS Group Limited provided accounting and administration services to its subsidiaries for a consideration of $0.44m (2012: $0.44m) and charged royalties for the use of intellectual property, brand names and patents totalling $3.208m (2012: $4.7m).

During the financial year, EBOS Group Limited rented warehouse space and contracted labour from its subsidiaries for a total cost of $Nil (2012: $90,000).

Terms/price under which related party transactions were entered into

All loans advanced to and payable by subsidiaries are unsecured, subordinate to other liabilities and are at call. Interest rates determined by the Directors were 0% – 5% (2012: 0% – 5%). During the financial year, EBOS Group Limited received interest of $1.155m (2012: $0.128m) from loans to subsidiaries, and paid interest of $Nil (2012: $0.606m) to subsidiaries.

No amounts were provided for doubtful debts relating to debts due from related parties at reporting date (2012: Nil).

Guarantees provided or received

As detailed in note 28, EBOS Group Limited has entered into a deed of cross guarantee with certain wholly-owned subsidiaries.

(d) Key Management Personnel Remuneration

Details of key management personnel remuneration are disclosed in note 4 to the financial statements.

31. FINANCIAL INsTRUMENTs

(a) Financial risk management objectives

The Group’s corporate treasury function provides services to the Groups entities, co-ordinates access to domestic and international financial markets, and manages the financial risks relating to the operation of the Group.

The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. The use of financial derivatives is governed by the Group’s policies approved by the Board of Directors, which provide written principles on the use of financial derivatives. Compliance with policies and exposure limits is reviewed on a regular basis.

(b) Market Risk

The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign currency risk, including:

• forward foreign exchange contracts to hedge the exchange rate risk arising on imports of product; and

• interest rate swaps to mitigate the risk of rising interest rates.

(c) Foreign currency risk management

The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.

Forward foreign exchange contracts

It is the policy of the Group to enter into forward foreign exchange contracts to cover specific foreign currency payments and receipts within 60% to 100% of the exposure generated. The Group also enters into forward foreign exchange contracts to manage the risk associated with anticipated sales and purchase transactions out to 12 months within 20% to 75% of the exposure generated.

The fair value of forward exchange contracts is derived using inputs supplied by third parties that are observable either directly (i.e. prices) or indirectly (i.e. derived from prices). Therefore the Group has categorised these derivatives as Level 2 under the fair value hierarchy contained within the amendment to NZ IFRS 7.

								Group	Group	Group
		Average exchange			rate		Foreign	currency		Contract		value		Fair	value
Outstanding Contracts		2013			2012		2013 FC’000	2012 FC’000		2013 $’000		2012 $’000		2013 $’000			2012 $’000
Buy Australian Dollars Less than 3 months 3 to 6 months 6 to 9 months Buy Euro Less than 3 months 3 to 6 months 6 to 9 months 9 to 12 months Buy Pounds Less than 3 months Buy US Dollars Less than 3 months 3 to 6 months 6 to 9 months		0.821 0.823 0.837 0.632 0.638 0.631 0.624 0.557 0.824 0.856 0.833			0.779 – – 0.618 0.620 0.626 – 0.490 0.797 0.807 0.825		1,214 525 525 1,496 4,020 1,410 2,349 450 2,356 3,657 800	1,131 – – 1,604 900 300 – 510 4,043 1,500 500		1,478 638 627 2,368 6,301 2,233 3,763 808 2,860 4,270 960		1,452 – – 2,597 1,453 479 – 1,042 5,073 1,859 606		(46) (19) (8) 150 523 176 287 77 188 474 87			(12) – – (48) (13) 3 – (35) 40 44 30
Sell Australian Dollars Less than 3 months		0.839			–		105,000	–		125,147		–		885			–
										151,453		14,561		2,774			9

				Average exchange			rate		Foreign	Parent currency				Contract		value		Fair	value
				2013			2012		2013 FC’000		2012 FC’000			2013 $’000		2012 $’000		2013 $’000			2012 $’000
	Buy Less	Australian Dollars than 3 months		0.832			0.777		600		800			721		1,030		(14)			(11)
	Buy Less	Euro than 3 months		0.631			0.607		250		300			396		494		25			(18)
	Buy Less	Pounds than 3 months		0.557			0.489		450		510			808		1,042		77			(35)
	Buy Less	US Dollars than 3 months		0.827			0.773		850		1,100			1,028		1,423		72			(34)
	Sell Less	Australian Dollars than 3 months		0.839			–		105,000		–		125,147			–		885			–
													128,100			3,989		1,045			(98)

The fair value of forward foreign exchange contracts outstanding are recognised as other financial assets/liabilities. Hedge accounting is applied for certain forward foreign exchange contracts. Typically these contracts that have hedge accounting applied are for periods greater than 3 months.

64 — 65

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the Financial Year ended 30 June, 2013

31. FINANCIAL INsTRUMENTs CONTINUED

(d) Interest rate risk management

The Group is exposed to interest rate risk as it borrows funds at floating interest rates. The risk is managed by the use of interest rate swap contracts.

Interest rate swap contracts

Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing interest rates on debt held. The fair value of interest rate swaps are based on market values of equivalent instruments at the reporting date.

						Group
		Average contracted fxed interest rate				Notional principal			amount		Fair	value
Outstanding Contracts		2013 %		2012 %		2013 $’000			2012 $’000		2013 $’000			2012 $’000
Outstanding variable rate for fxed contracts Less than 1 year 1 to 3 years 3 to 5years		5.17 4.68 3.24		5.13 4.03 3.28		90,877 22,424 70,482			2,500 5,102 74,082		(2,168) (555) 621			(16) (82) (332)
						183,783			81,684		(2,102)			(430)

						Parent
		Average contracted fxed interest rate				Notional principal			amount		Fair	value
Outstanding Contracts		2013 %		2012 %		2013 $’000			2012 $’000		2013 $’000			2012 $’000
Outstanding foating for fxed contracts 3 to 5years		3.16		3.16		57,500			57,500		771			(124)
						57,500			57,500		771			(124)

The fair value of interest rate swaps outstanding are recognised as other financial assets/liabilities. Hedge accounting has been adopted. The fair value of interest rate swaps is derived using inputs supplied by third parties that are observable either directly (i.e. prices) or indirectly (i.e. derived from prices). Therefore the Group has categorised these derivatives as Level 2 under the fair value hierarchy contained within the amendment to NZ IFRS 7.

(e) Liquidity

The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve banking facilities by continuously monitoring forecast and actual cashflows and matching maturity profiles of financial assets and liabilities.

The following tables detail the Group’s remaining contractual maturity for its financial assets and financial liabilities. The tables have been drawn up based on the undiscounted cash flows of the financial assets and liabilities. The table includes both interest and principal cash flows.

										Maturity		Dates
Group – 2013		Weighted average effective interest rate %		On Demand $’000		Less than 1 year $’000		1–2 Years $’000		2–3 Years $’000		3–4 Years $’000		4–5 Years $’000		5+ Years $’000		Total $’000
Financial assets: Cash and cash equivalents Trade and other receivables Other fnancial assets – derivatives		2.5 – –		198,014 736,429 –		– – 3,546		– – –		– – –		– – –		– – –		– – –		198,014 736,429 3,546
				934,443		3,546		–		–		–		–		–		937,989
Financial liabilities: Trade and other payables Finance leases Bank loans Other fnancial liabilities – derivatives		– 8.6 4.6 –		892,124 – – –		521 1,504 232,078 2,872		5,255 2,841 79,859 –		521 749 18,068 –		521 – 61,436 –		521 – – –		4,167 – – –		903,630 5,094 391,441 2,872
				892,124		236,975		87,955		19,338		61,957		521		4,167		1,303,037

										Maturity		Dates
		Weighted
		average
		effective
		interest				Less than
Group – 2012		rate %		On Demand $’000		1 year $’000		1–2 Years $’000		2–3 Years $’000			3–4 Years $’000		4–5 Years $’000		5+ Years $’000		Total $’000
Financial assets:
Cash and cash equivalents Trade and other receivables Other fnancial assets –		2.5 –		52,646 175,712		– –		– –		– –			– –		– –		– –		52,646 175,712
derivatives		–		–		109		–		–			–		–		–		109
				228,358		109		–		–			–		–		–		228,467
Financial liabilities: Bank overdraft Trade and other payables Finance leases Bank loans Other fnancial liabilities –		5.4 – 8.6 4.6		307 275,027 – –		– 521 665 15,676		– 521 495 9,931		– 521 704 61,307			– 521 – 7,080		– 521 – 65,315		– 4,687 – –		307 282,319 1,864 159,309
derivatives		–		–		530		–		–			–		–		–		530
				275,334		17,392		10,947		62,532			7,601		65,836		4,687		444,329

66 — 67

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the Financial Year ended 30 June, 2013

31. FINANCIAL INsTRUMENTs CONTINUED

Parent – 2013 Financial assets: Cash and cash equivalents Trade and other receivables Other fnancial assets – derivatives Advances to subsidiaries Financial liabilities: Trade and other payables Bank loans Advances from subsidiaries					Maturity	Dates
	Weighted average effective interest rate %	On Demand $’000	Less than 1 year $’000	1–2 Years $’000	2–3 Years $’000	3–4 Years $’000	4–5 Years $’000	5+ Years $’000	Total $’000
	2.5	89,305	–	–	–	–	–	–	89,305
	–	10,399	–	–	–	–	–	–	10,399
	–	–	1,816	–	–	–	–	–	1,816
	3.8	–	35,769	–	–	–	–	–	35,769
		99,704	37,585	–	–	–	–	–	137,289
	–	9,172	–	–	–	–	–	–	9,172
	4.5	–	8,045	58,155	5,316	27,155	–	–	98,671
	–	–	29,319	–	–	–	–	–	29,319
		9,172	37,364	58,155	5,316	27,155	–	–	137,162

Parent – 2012 Financial assets: Cash and cash equivalents Trade and other receivables Advances to subsidiaries Financial liabilities: Trade and other payables Bank loans Other fnancial liabilities – derivatives Advances from subsidiaries	Weighted average effective interest rate % 2.5 – 5.0 – 4.5 – –	On Demand $’000 7,413 8,943 – 16,356 8,131 – – – 8,131	Less than 1 year $’000 – – 28,104 28,104 – 23,045 222 29,576 52,843	1–2 Years $’000 – – – – – 8,027 – – 8,027	Maturity Dates 2–3 Years $’000 3–4 Years $’000 – – – – – – – – – – 59,481 5,265 – – – – 59,481 5,265	4–5 Years $’000 – – – – – 26,855 – – 26,855	5+ Years $’000 – – – – – – – – –	Total $’000 7,413 8,943 28,104 44,460 8,131 122,673 222 29,576 160,602

As disclosed in note 32 the $865m deferred consideration payable owing to the Zuellig Group was settled on 5 July 2013. No interest was payable on this balance.

As at 30 June 2013 the Group maintains the following lines of credit:

• $2.2m (2012: $1.7m) overdraft facilities and term loan/revolving credit facilities of $123m maturing in August 2014 and of $119m maturing in 2016 (2012: $124m maturing in August 2014 and $80m maturing in 2016).

• Interest is payable at a base rate plus specified margin.

• A subsidiary of the Group, Symbion Pty Limited, has a trade debtor securitisation facility of $496.7m maturing in September 2015.

(f) Sensitivity Analysis

(i) Interest Rate Sensitivity Analysis

The sensitivity analysis below has been determined based on the exposure to interest rates for financial instruments at the balance date. The analysis is prepared assuming the amount of the financial instrument outstanding at the balance sheet date was outstanding for the whole year.

The impact to Profit for the Year and Total Equity as a result of a 100 basis point movement in interest rates is as follows:

+ 100 basis point shift up in yield curve Impact on Proft Impact on Total Equity – 100 basis point shift down in yield curve Impact on Proft Impact on Total Equity	Group	2012 $’000 – 2,939 – (3,083)	Parent	2012 $’000 – 2,144 – (2,251)
	2013 $’000		2013 $’000
	–		–
	3,142		1,626
	–		–
	(3,249)		(1,692)

(ii) Foreign Currency Sensitivity Analysis

The following table details the Group’s sensitivity to a 10% increase or decrease on foreign currency contracts against the Group’s functional currency (New Zealand dollars). The sensitivity analysis includes any outstanding foreign currency contracts and adjusts their translation at the year end for a 10% change in foreign currency rates. A positive number below indicates an increase in profit and equity where the functional currency weakens 10% against the relevant currency.

weakens 10% against the relevant currency.
+ 10% shift in NZD rate Impact on Proft for the Year Impact on Total Equity – 10% shift in NZD rate Impact on Proft for the Year Impact on Total Equity	Group	2012 $’000 (353) (1,323) 432 1,619	Parent	2012 $’000 (353) (353) 432 432
	2013 $’000		2013 $’000
	(283)		(283)
	8,733		11,010
	346		346
	(10,668)		(13,457)

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year end exposure does not reflect the exposure during the year.

The significant increase in the outcome of the current year sensitivity analysis is in relation to A$105m in foreign currency contracts in place at 30 June 2013 for the acquisition of the Symbion Group which was settled on 5 July 2013.

(g) Credit Risk Management

Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with credit worthy counter parties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults.

Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of the trade receivables.

The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the Group’s maximum exposure to credit risk without taking account of the value of any collateral obtained.

The maximum credit risk associated with guarantees provided by the Group and Parent are disclosed in note 28.

The Group does not have any significant credit risk exposure to any single counter party or any Group of counter parties having similar characteristics. The credit risk on liquid funds and derivative financial instruments is limited because the counter parties are banks with high credit ratings assigned by international credit rating agencies.

68 — 69

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ADDITIoNAL sToCK EXChANGE INFoRMATIoN

For the Financial Year ended 30 June, 2013

As at 31 July, 2013

31. FINANCIAL INsTRUMENTs CONTINUED

(h) Fair value of financial instruments

The Directors consider that the carrying amount of financial assets and financial liabilities recorded in the financial statements approximates their fair values.

The fair values and net fair values of financial assets and financial liabilities are determined as follows:

• the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices;

• the fair value of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis: and

• the fair value of derivative instruments are calculated using quoted prices. Where such prices are not available use is made of discounted cash flow analysis using the applicable yield curve for the duration of the instruments.

Transaction costs are included in the determination of net fair value.

(i) Liquidity risk management

The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

(j) Capital Risk Management

The Group manages its capital to ensure that each entity within the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity. The Group’s overall strategy remains unchanged from 2012.

32. EVENTs AFTER bALANCE DATE

On 4 July 2013 EBOS Group Limited received a net $140m in proceeds from a non re-nounceable rights issue to existing shareholders.

On 5 July 2013, in accordance with the sale and purchase agreement to purchase the Symbion Group, the full deferred consideration payable balance of $865m was settled in favour of the previous owners of the Symbion Group, the Zuellig Group. This consideration was made through an issue of EBOS Group Limited shares to the Zuellig Group of $498m and cash consideration of $367m. The cash consideration paid was funded by additional debt funding of $134m and cash reserves.

The net effect of these transactions post balance date on the consolidated Balance Sheet of EBOS Group Limited were:

Share capital increased $638m Bank debt increased $134m Cash and cash equivalents decreased $93m Settlement payable decreased $865m

As a result of this transaction the Zuellig Group holds 40% of the shares in EBOS Group Limited. Also on the 5 July 2013 two new Directors, Peter Williams and Stuart McGregor, were appointed to the Board of EBOS Group Limited and represent the Zuellig Group.

As disclosed in notes 17 and 28 on 5 July 2013 the Group refinanced its syndicated banking facilities.

This refinancing replaced the Group’s syndicated term debt and working capital facilities that were in place at the time of the acquisition of the Symbion Group along with the term debt, working capital and securitisation facilities that were acquired as part of the Symbion Group acquisition on 1 June 2013.

These new syndicated facilities in place from 5 July 2013 are summarised below and are subject to a new negative pledge deed over the Group’s assets in favour of the Group’s syndicated bankers. These new facilities are based on financial terms similar to those of the previous facilities in place.

Facility Term debt facilities Term debt facilities Term debt facilities Working capital facilities Securitisation facility	Amount (NZD) $100.8m $100.8m $106.9m $93.1m $495.7m	Maturity July 2015 July 2016 July 2017 July 2015 September 2015

The effect of this refinancing was to retain the facility head room that was in place at 30 June 2013 in addition to funding the settlement of the acquisition of the Symbion Group on 5 July 2013. This refinancing also extended the maturity profile of the Group’s borrowing facilities. The Group is committed to repayments of its term debt facilities of approximately $20m per year with quarterly repayment terms.

Subsequent to year end the Board have approved a final dividend to shareholders. For further details please refer to note 23.

Twenty Largest Shareholders Sybos Holdings Pte Limited Tea Custodians Limited – NZCSD Whyte Adder No 3 Limited Accident Compensation Corporation – NZCSD Sybos Holdings Pte Limited Custodial Services Limited New Zealand Superannuation Fund Nominees Limited – NZCSD Forsyth Barr Custodians Limited <1-33> HSBC Nominees (New Zealand) Limited – NZCSD BNP Paribas Nominees (NZ) Limited – NZCSD Herpa Properties Limited Custodial Services Limited JP Morgan Chase Bank NA – NZCSD HSBC Nominees (New Zealand) Limited A/C State Street – NZCSD Custodial Services Limited National Nominees New Zealand Limited – NZCSD Forsyth Barr Custodians Limited <1-17.5> FNZ Custodians Limited Citibank Nominees (New Zealand) Limited – NZCSD Custodial Services Limited	Fully paid shares 53,459,397 7,742,615 6,793,634 4,764,464 4,667,445 3,259,281 2,697,903 2,580,734 2,486,223 2,048,025 1,286,747 1,180,013 1,121,511 1,071,715 1,064,392 985,744 979,662 959,564 923,068 832,630 100,904,767	Percentage ofpaid capital 36.46% 5.28% 4.63% 3.25% 3.18% 2.22% 1.84% 1.76% 1.70% 1.40% 0.88% 0.81% 0.77% 0.73% 0.73% 0.67% 0.67% 0.65% 0.63% 0.57% 68.83%

Substantial Security Holders

As at 31 July 2013 the following persons are deemed to be substantial security holders in accordance with Section 26 of the Securities Amendment Act 1988.

Amendment Act 1988.
	Holders 1,452 2,908 1,015 781 59 31 15 15 6,276 5,991 285 6,276	Fully paid shares 58,126,842 8,080,381 66,207,223 Fully paid shares 615,201 7,274,275 7,088,892 14,642,800 3,807,855 5,600,044 11,361,108 96,224,099 146,614,274 85,065,255 61,549,019 146,614,274	Percentage ofpaid capital 39.64% 5.51% 45.15% Percentage ofpaid capital 0.42% 4.96% 4.84% 9.99% 2.60% 3.82% 7.75% 65.62% 100.00% 58.02% 41.98% 100.00%
Sybos Holdings Pte Limited Whyte Adder No 3 Limited & Herpa Properties Limited
Distribution of Shareholders and Shareholdings Size of Holding 1 to 999 1,000 to 4,999 5,000 to 9,999 10,000 to 49,999 50,000 to 99,999 100,000 to 499,999 500,000 to 999,999 1,000,000 and over Total Registered Address of Shareholders New Zealand Overseas Total

Waiver from the New Zealand Stock Exchange

A summary of all waivers granted by NZX and relied upon in the 12 month period preceding the date 2 months before the date of this annual report is published and will remain on the EBOS website www.ebos.co.nz for a period of 12 months.

70 — 71

TRADING ENTITIEs

DIRECToRY

NEW ZEALAND

PhARMACY WhoLEsALER RUssELLs

Ebos hEALThCARE

14 – 18 Lovell Court

Rosedale

PO Box 71-149 Rosebank 1348 Auckland

PO Box 302-161

North Harbour Postal Centre

Auckland

New Zealand New Zealand Phone: +64 9 415 3267 Phone: + 64 9 968 6750 Fax: +64 9 415 4004 Fax: +64 9 968 6754 www.ebos.co.nz www.pwr.co.nz

hEALThCARE LoGIsTICs

oNELINK

56 Carrington Road PO Box 44-027

56 Carrington Road 58 Richard Pearse Drive PO Box 44-027 Mangere Pt Chevalier Auckland 2022 Auckland 1246 New Zealand New Zealand Phone: +64 9 918 5100 Phone: + 64 9 815 2600 Fax: +64 9 918 5101 Fax: +64 9 815 1911 www.hconline.co.nz

Phone: + 64 9 815 2600 Fax: +64 9 815 1911 www.onelink.co.nz

MAsTERPET NEW

PRoPhARMA

ZEALAND

1 – 9 Bell Road South Lower Hutt 5010 New Zealand Phone: +64 4 570 3232 Fax: +64 4 570 3229 www.masterpet.com

PO Box 62-027 Sylvia Park Auckland 1644 New Zealand Phone: +64 9 570 1080 Fax: +64 9 915 9581 www.propharma.co.nz

AUsTRALIA

Ebos hEALThCARE

Unit 2, 109 Vanessa Street PO Box 100

Kingsgrove, NSW 2208 Australia

Phone: +61 2 9502 8410 Fax: +61 2 9502 8411 www.eboshealthcare.com.au

sYMbIoN

Level 3, 484 St Kilda Road Melbourne Victoria 3004

Australia

Phone: +61 3 9918 5555 Fax: +61 3 9918 5599 www.symbion.com.au

VITAL MEDICAL sUPPLIEs

PO Box 100

Kingsgrove, NSW Phone: +61 2 1300 557 651 Fax: +61 2 1300 557 631 www.vitalmed.com.au

MAsTERPET AUsTRALIA

Lot 2, 31 Topham Road Smeaton Grange, NSW 2567 Australia Phone: +61 2 1300 651 111 Fax: +61 2 1300 652 222 www.masterpet.com

LYPPARD

14 – 16 Fiveways Blvd Keysborough, Victoria 3173 Australia

Phone: +61 3 8769 0500 Fax: +61 3 9798 5599 www.lyppard.com.au

ARIsToPET

874 Kingsford Smith Dr Eagle Farm, QLD 4009 Australia Phone: +61 7 3630 2166 Fax: +61 7 3630 2177 www.masterpet.com/aristopet

boTANY bAY IMPoRTs EXPoRTs

24 Underwood Avenue Botany, NSW 2019 Australia Phone: +61 2 9700 0800 www.botanybayimports.com.au

APhs PACKAGING

6 Dividend Street Mansfield, QLD 4122 Phone: +61 7 3347 9500 www.aphs.com.au

CLINECT

Level 3, 484 St Kilda Road Melbourne, Victoria 3004 Australia Phone: +61 3 9918 5555 www.clinect.com.au

CoRPoRATE hEAD oFFICE

108 Wrights Road PO Box 411 Christchurch 8024 New Zealand

Telephone +64 3 338 0999 Fax +64 3 339 5111 Email: ebos@ebos.co.nz Internet: www.ebos.co.nz

AUDIToR

Deloitte Christchurch

bANKERs

ANZ National Bank Limited Auckland

Bank of New Zealand Christchurch

soLICIToR

Chapman Tripp Christchurch

shARE REGIsTER

Computershare Investor Services Ltd Private Bag 92119 Auckland 1142 159 Hurstmere Road Takapuna, North Shore City 0622 New Zealand Telephone +64 9 488 8777

DIRECToRs

Rick Christie Independent Chairman Mark Waller Chief Executive and Managing Director Elizabeth Coutts Independent Director Peter Kraus Stuart McGregor Sarah Ottrey Independent Director Barry Wallace Peter Williams

sENIoR EXECUTIVEs

Mark Waller Chief Executive Michael Broome Group General Manager – Healthcare Logistics/ProPharma Angus Cooper General Manager – Group Projects/Mergers & Acquisitions Patrick Davies Chief Executive – Symbion Group Dennis Doherty Chief Financial Officer Sean Duggan Chief Executive – Masterpet Group Kelvin Hyland General Manager – EBOS Healthcare New Zealand David Lewis General Manager – EBOS Healthcare Australia Greg Managh Group General Manager – Onelink/MIS

Managing Your Shareholding Online:

To change your address, update your payment instructions and to view your investment portfolio including transactions, please visit: www.computershare.co.nz/investorcentre General enquiries can be directed to:

• enquire@computershare.co.nz

• Private Bag 92119, Auckland 1142, New Zealand

• Telephone +64 9 488 8777 Facsimile +64 9 488 8787 Please assist our registrar by quoting your CSN or shareholder number.

72 — 73

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