PRO-PAC PACKAGING LIMITED — Annual Report 2013

Aug 27, 2013

PRO-PAC PACKAGING LIMITED (ASX: PPG)

COMMENTARY ON RESULTS FOR THE 2013 FINANCIAL YEAR

During the 2013 Financial Year, the Company continued to achieve good top line growth, both organically and through acquisitions. Revenue grew 30% or $40 million to $173 million of which acquisitions made during the 2013 financial year contributed approximately $25 million. Despite the increased revenue, difficult trading conditions particularly over the final quarter of the financial year, combined with the impact of increased costs associated with the significantly enhanced infrastructure which was put in place during the financial year to cope with future anticipated growth, negatively impacted reported earnings.

The 2013 result included $1.7 million of relocation, restructuring and business combination costs relating predominantly to the integration of new acquisitions and the consolidation of the Industrial Division's operations in WA and NSW. After inclusion of these costs, EBITDA was down 8% to $11.1 million and profit after tax was down 11% to $5.2 million broadly in line with the Company's June 2013 market update.

In accordance with the Company's strategy of continuing to expand its product and service offering to the food manufacturing and processing industries, five of the eight acquisitions completed during the financial year were involved in the distribution or manufacturing of primary packaging to the meat, poultry, baking and prepared meals sectors.

While the Company will continue to assess synergistic and accretive acquisitions, focus for the first half of FY14 will be on reaping the benefits of the investments made in expanding and enhancing the Company's national capability and infrastructure and on maximising the opportunities presented by the recent acquisitions.

A fully franked interim dividend of one cent per share was paid on 16 May 2013. The Company has today declared a fully franked final dividend of one cent per share. The record date for determining entitlement to the dividend is 11 September 2013 and the dividend will be paid on 25 September 2013. The Company's Dividend Reinvestment Plan will not apply to this dividend.

Enquiries

For further information please contact Mr. Brandon Penn, CEO, Pro-Pac Packaging Limited on Tel (02) 8781 0500.

About PPG

Pro-Pac Packaging Limited is a diversified manufacturing and distribution company, providing innovative, flexible and rigid packaging solutions for a broad group of clients. PPG is headquartered in Sydney with operations in Adelaide, Brisbane, Melbourne and Perth. PPG's securities are listed and quoted on the ASX. For further information on PPG visit www.ppgaust.com.au

Appendix 4E

Preliminary Final Report Results for announcement to the market

Pro-Pac Packaging Limited for the year ended 30 June 2013

Reporting period	: year to June 2013
Previous corresponding period	: year to June 2012

Results

Revenue from ordinary activities	up	30%	to	$000's173,131
Profit before income tax, relocation, restructuring andbusiness combination costs from ordinary activities	up	1%	to	8,968
Profit from ordinary activities after tax attributable tomembers	down	11%	to	5,154
Net profit for the year attributable to members	down	11%	to	5,154

Dividends (distributions)

	Amount per security	Franked amount persecurity
Final Dividend	1.0¢	1.0¢
Interim Dividend	1.0¢	1.0¢

Information on Dividends:

The Company has declared a fully franked final dividend of 1.0 cent per share which will be paid on 25 September 2013.

The Company's Dividend Reinvestment Plan will not apply to this dividend.

Record date for determining entitlements to the final dividend	11 September 2013
Last date for elections to participate in the Dividend Reinvestment Plan	Not applicable

Commentary

Please refer to the attached commentary for a more detailed review of the Company.

PRO-PAC PACKAGING LIMITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR TO 30 JUNE 2013

	Notes	Consolidated	Consolidated
		2013	2012
		$000's	$000's
Revenue
Sale of goods and services		173,131	133,053
Other income		234	-
Interest income		62	106
Total Revenues		────────173,427	────────133,159
Expenses		────────	────────
Amortisation of prepaid royalty		322	322
Depreciation expense		2,747	2,493
Distribution costs		6,220	4,050
Employee benefits expense		28,054	23,785
Finance costs		839	1,160
Occupancy costs		6,228	4,771
Other expenses from ordinary activities		11,316	7,129
Raw materials and consumables used		108,733	80,545
Relocation and rationalisation expenses		1,740	763
Total Expenses		────────166,199	────────125,018
Profit before income tax		7,228	8,141
Income tax expense	4	(2,074)	(2,373)
Profit after tax from continuing operations	13	────────5,154	────────5,768
Other comprehensive income		-	-
Total comprehensive income for the period		────────5,154	────────5,768
Earnings per share (cents per share) for the profit from continuing		────────	────────
operations attributable to the ordinary equity holders of the parent- Basic earnings per share	1	2.46	3.65
- Diluted earnings per share	1	2.44	3.61

PRO-PAC PACKAGING LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2013

	Notes	Consolidated	Consolidated
		2013	2012
		$000's	$000's
ASSETS
CURRENT ASSETS
Cash and cash equivalents	14	2,247	3,911
Trade and other receivables	5	30,645	25,599
Inventories	6	28,091	18,698
Prepayments		3,125────────	1,370────────
Total Current Assets		64,108	49,578
NON-CURRENT ASSETS		────────	────────
Property, plant and equipment	7	17,610	14,921
Intangible assets	8	67,867	56,226
Deferred tax assets	4	2,101	1,559
Prepayments		350	672
Total Non-Current Assets		────────87,928	────────73,378
TOTAL ASSETS		────────152,036	────────122,956
LIABILITIES		────────	────────
CURRENT LIABILITIES
Trade and other payables	9	24,681	18,323
Trade Finance		2,036	-
Interest bearing borrowings		1,666	1,745
Provisions	10	3,651	2,597
Current tax liabilities	4	569	474
Total Current Liabilities		────────32,603────────	────────23,139────────
NON-CURRENT LIABILITIES
Other payables	9	2,625	360
ProvisionsInterest bearing borrowings	10	69518,780	4982,572
Total Non-Current Liabilities		────────22,100	────────3,430
		────────	────────
TOTAL LIABILITIES		54,703────────	26,569────────
NET ASSETS		97,333════════	96,387════════
EQUITY
Issued capital	11	85,285	85,285
Other reserves	12	71	56
Retained earnings	13	11,977────────	11,046────────
TOTAL EQUITY		97,333	96,387
		════════	════════

PRO-PAC PACKAGING LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR TO 30 JUNE 2013

	Notes	Consolidated	Consolidated
		2013	2012
		$000's	$000's
Cash flows from operating activities
Receipts from customers (inclusive of GST)		176,071	128,887
Payments to suppliers and employees (inclusive of GST)		(167,194)	(123,180)
Interest received		62	106
Interest paid		(777)	(1,160)
Income tax paid		(2,353)	(3,096)
Relocation, restructuring and business combination costs		(1,740)	( 740)
Net cash flows from operating activities	14	────────4,069────────	────────817────────
Cash flows from investing activities
Payments for property, plant and equipment		(2,938)	(4,268)
Proceeds from sale of property, plant and equipment		61	336
Payment for unincorporated businesses net of cash acquired		(10,907)	(7,628)
Working capital for businesses acquired during the period		(5,839)	-
		────────	────────
Net cash flows used in investing activities		(19,623)────────	(11,560)────────
Cash flows from financing activities
Payment of hire purchase and finance lease liabilities		(2,040)	(2,135)
Finance leases raised		1,267	2,220
Proceeds from borrowings / (Loans repaid)		18,886	(13,069)
Proceeds from issue of shares		-	28,000
Dividends paid		(4,223)	(918)
Share issue transaction cost		-	(905)
Net cash flows generated by / (used in) financing activities		────────13,890────────	────────13,193────────
Net increase / (decrease) in cash and cash equivalents		(1,664)	2,450
Cash and cash equivalents at beginning of financial year		3,911────────	1,461────────
Cash and cash equivalents at end of financial year	14	2,247════════	3,911════════
Non cash financing transactions
Hire purchase and finance lease liabilities raised		1,267	2,220
Issue of shares for dividend re-investment plan		-	1,914

PRO-PAC PACKAGING LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR TO 30 JUNE 2013

	IssuedCapital	RetainedEarnings	OptionReserve	TotalEquity
	$000's	$000's	$000's	$000's
Consolidated
Balance as at 1 July 2011	54,005	8,110	44	62,159
Issue of shares for dividend re-investment plan	1,914	-	-	1,914
Dividends paid	-	(2,832)	-	(2,832)
Shares issued to vendors of businesses acquired	1,998			1,998
Recognition of share based payments	-	-	12	12
Shares issued under share placement	28,000			28,000
Cost of raising shares	(905)			(905)
Tax effect on cost of raising shares	273			273
Total comprehensive income for the year	-───────	5,768───────	-───────	5,768───────
Balance as at 30 June 2012	85,285───────	11,046───────	56───────	96,387───────
Dividends paid	-	(4,223)	-	(4,223)
Recognition of share based payments	-	-	15	15
Total comprehensive income for the year	-	5,154	-	5,154
Balance as at 30 June 2013	───────85,285───────	───────11,977───────	───────71───────	───────97,333───────

NOTE 1: EARNINGS PER SHARE

	Consolidated	Consolidated
	Year Ended	Year Ended
	30 June 13	30 June 12
	Cents	Cents
Basic earnings per share *	2.46	3.65
Diluted earnings per share *	2.44	3.61
Reconciliation of earnings used in calculation of earnings per share:
	$000's	$000's
Profit after income tax	5,154	5,768
	═════	═════
	No. of Shares	No. of Shares
Weighted average number of ordinary shares used in the calculation of basic earnings pershare	209,452,804	158,176,354
Weighted average number of ordinary shares used in the calculation of basic dilutedearnings per share	211,195,716	159,658,204
	═════	═════
Number of ordinary shares on issue at year end (including ESPP shares)	211,257,804	210,987,804
	═════	═════

* The difference between basic and diluted shares on issue represents the PPG Executive Long Term Incentive Plan (ESPP) shares on issue which are treated as an option grant.

NOTE 2: DIVIDENDS

The Directors of Pro-Pac Packaging Limited have declared a final fully franked dividend of one cent (1.0 c) per share in respect of the financial year ended 30 June 2013. When combined with the interim dividend of one cent (1.0 c) per share paid on 16 May 2013, this represents fully franked dividends of two cents (2.0 c) per share for the 2012/13 financial year.

NOTE 3: NET TANGIBLE ASSETS PER SECURITY

	Consolidated	Consolidated
	Year Ended	Year Ended
	30 June 13	30 June 12
	Cents	Cents
Net tangible assets per security - basic	12.74	17.96
	═══════	═══════
Net assets per security – basic	46.47	46.02
	═══════	═══════

════════ ════════

PRO-PAC PACKAGING LIMITED NOTES TO THE PRELIMINARY FINAL REPORT

	Consolidated	Consolidated
	Year Ended	Year Ended
	30 June 2013	30 June 2012
	$000's	$000's
NOTE 4: TAXATION
a) Income Tax Expense:	2,074	2,373
Income tax expense:
Prima facie income tax expense calculated at 30% on the profit from ordinaryactivities	2,168	2,442
Decrease in income tax expense due to:
Other income not subject to tax net of expenditure not allowable for tax purposes	(94)	(17)
Alignment of deferred tax assets	-────────	(52)────────
Income tax expense attributable to profit from ordinary activities	2,074════════	2,373════════
b) Current Tax Liabilities:
Income tax payable	569════════	474════════
c) Non-Current Tax Assets:
Deferred tax asset	2,101	1,559
	════════	════════
NOTE 5: TRADE AND OTHER RECEIVABLES
Current
Trade receivables	29,767	23,779
Provision for impairment of receivables	(338)────────	(309)────────
	29,429	23,470
Other debtors	1,216	2,129
	────────	────────

NOTE 6: INVENTORIES

Current
Raw materials and work in progress (lower of cost and net realisable value)	983	913
Finished goods (lower of cost and net realisable value)	27,108	17,785
Total Inventories	────────28,091════════	────────18,698════════

Total Current Receivables 30,645 25,599

	Consolidated	Consolidated
	Year Ended	Year Ended
	30 June 2013	30 June 2012
	$000's	$000's
Note 7: PROPERTY, PLANT AND EQUIPMENT
Plant and Equipment
At cost	27,787	22,601
Accumulated depreciation	(10,177)────────	(7,680)────────
Total plant and equipment	17,610════════	14,921════════
Note 8: INTANGIBLE ASSETS
Goodwill	67,867════════	56,226════════
Reconciliation
Carrying amount at beginning of the year	56,226	46,758
Acquisition of businesses	11,641────────	9,468────────
Total goodwill	67,867════════	56,226════════
NOTE 9: PAYABLES
Current
Unsecured
Trade payables	15,355	13,278
GST payable	808	609
Other tax payable	525	448
Sundry creditors and accruals	4,431	3,988
Contingent deferred payments to vendors for acquisitions	3,562────────	-────────
	24,681	18,323
Non-current	════════	════════
Unsecured
Contingent deferred payments to vendors for acquisitions	2,625	360
	════════	════════
NOTE 10: PROVISIONS
CurrentEmployee entitlements	3,651	2,597
	════════	════════
Non-Current
Employee entitlements	695	498════════
	════════

	Consolidated	Consolidated
NOTE 11: ISSUED CAPITAL
2013	Number	$000's
Issued and Paid-Up Share Capital
Fully paid ordinary shares:	211,257,804════════	85,285════════
Movements during the year:
Balance at beginning of year	210,987,804	85,285
Issue of shares for Executive Long Term Incentive Plan	430,000	-
Cancellation of shares for Executive Long Term Incentive Plan	(160,000)	-
	────────211,257,804	────────85,285
2012	Number	$000's
Issued and Paid-Up Share Capital
Fully paid ordinary shares:	210,987,804════════	85,285════════
Movements during the year:
Balance at beginning of year	139,735,576	54,005
Issue of shares for Executive Long Term Incentive Plan	200,000	-
Issue of shares for dividend re-investment plan	4,746,673	1,914
Capital raising	62,222,223	28,000
Cost of raising shares	-	(632)
Shares issued to vendors of businesses acquired	4,083,332	1,998
	────────210,987,804	────────85,285

Shares issued under the Long Term Executive Incentive Plan are subject to restrictions until August 2013 and April 2015 in accordance with the terms of the plan.

	Consolidated	Consolidated
	Year Ended	Year Ended
	30 June 2013	30 June 2012
	$000's	$000's
NOTE 12: OTHER RESERVES
Options Reserve
Balance brought forward	56	44
Recognition of share based payments	15	12
Balance carried forward	────────71	────────56
	════════	════════

	Consolidated	Consolidated
	Year Ended	Year Ended
	30 June 2013	30 June 2012
	$000's	$000's
NOTE 13: RETAINED PROFITS
Retained profits at the beginning of the year	11,046	8,110
Net profit attributable to members of the company	5,154	5,768
Dividends paid	(4,223)	(2,832)
Retained Profits at the End of the year	────────11,977════════	────────11,046════════

NOTE 14: NOTES TO THE STATEMENT OF CASH FLOWS

a) Reconciliation of Cash

For the purposes of the statements of cash flows, cash includes cash on hand and at bank and short-term deposits at call, net of outstanding bank overdrafts. Cash as at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows:

Cash Assets	2,247════════	3,911════════
b) Reconciliation of profit from ordinary activities after income tax to the net cash provided by operating activities:
Profit from ordinary activities after income tax	5,154	5,768
Add/(Less) non-cash items:
Depreciation and amortisation of plant and equipment	2,727	2,493
Amortisation of prepaid royalty	322	322
(Profit) / loss on disposal of assets	69	257
Movement in income tax provision	95	(441)
Movement in deferred tax assets & liabilities	(542)	(283)
Movement in provision for bad debts	(54)	87
Other Non-cash movements	29	11
Changes in Assets and Liabilities:
Receivables	941	(5,830)
Inventories	(1,772)	(1,973)
Payables	(1,558)	227
Provisions	414	378
Prepayments	(1,756)	(199)
Net cash flows from operating activities	────────4,069════════	────────817════════

NOTE 15: CONTROLLED ENTITIES

a) Particulars in Relation to Controlled Entities

The consolidated entity includes the following controlled entities. The financial years of all controlled entities are the same as that of the parent entity. All companies are incorporated in Australia.

	Parent Company
	Interest Held
Direct Controlled Entities:
Pro-Pac Group Pty Ltd	100%
Plastic Bottles Pty Ltd	100%
Controlled Entities owned 100% by Pro-Pac Group Limited
Pro-Pac Packaging (Aust) Pty Ltd	100%
Pro-Pac (GLP) Pty Ltd	100%
Controlled Entities owned 100% by Pro-Pac Packaging (Aust) Pty Ltd
Pro-Pac Packaging Manufacturing (Syd) Pty Ltd	100%
Pro-Pac Packaging Manufacturing (Melb) Pty Ltd	100%
Pro-Pac Packaging Manufacturing (Bris) Pty Ltd	100%
Creative Packaging Pty Ltd	100%
Controlled Entities owned 100% by Plastic Bottles Pty Ltd
Speciality Products and Dispensers Pty Ltd	100%
Australian Bottle Manufacturers Pty Ltd	100%
Ctech Closures Pty Ltd	100%
Bev Cap Pty Ltd	100%
Controlled Entities owned 100% by Bev Cap Pty Ltd
Great Lakes Moulding Pty Ltd	100%
Finpact Pty Ltd	100%

NOTE 16: OPERATING SEGMENTS

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources.

The Group is managed primarily on the basis of product category and service offerings since the diversification of the Group's operations inherently have notably different risk profiles and performance assessment criteria. Operating segments are therefore determined on the same basis.

Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics and are also similar with respect to the following:

• the products sold and/or services provided by the segment;
• the manufacturing process;

Types of products and services by segment

Industrial packaging

The Industrial packaging division manufactures, sources and distributes industrial packaging materials and related products and services. All products produced or distributed are aggregated as one reportable segment as the products are similar in nature and are distributed to similar types of customers. The industrial packaging segment also installs, supports and maintains packaging machines.

NOTE 16: OPERATING SEGMENTS (CONTINUED)

Rigid packaging

The Rigid packaging division manufactures, sources and distributes containers and closures and related products and services. All products produced or distributed are aggregated as one reportable segment as the products are similar in nature and are manufactured and distributed to similar types of customers.

Basis of accounting for purposes of reporting by operating segments

Accounting policies adopted

Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision maker with respect to operating segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group.

Inter-segment transactions

An internally determined transfer price is set for all inter-entity sales. This price is re-set regularly and is usually based on what would be realised in the event the sale was made to an external party at arm's length. All such transactions are eliminated on consolidation for the Group's financial statements.

Inter-segment loans payable and receivable are initially recognised at the consideration received net of transaction costs. If inter-segment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on market interest rates.

Segment Assets

Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of economic value from the asset. In the majority of instances segment assets are clearly identifiable on the basis of their nature and physical location.

Unless indicated otherwise in the assets role, investments in financial assets, deferred tax assets and intangible assets have not been allocated to operating segments.

Segment Liabilities

Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other payables and certain borrowings.

Unallocated items

The following items of revenue, expenses, asset and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment: impairment of assets and other non-recurring revenue or expenses; income tax expense; deferred tax asset and liabilities; current tax liabilities; other financial liabilities; intangible assets.

NOTE 16: OPERATING SEGMENTS (CONTINUED)

			Intersegment				Intersegment
	Rigidpackaging$ 0002013	Industrialpackaging$ 0002013	eliminations /unallocated$ 0002013	Total$ 0002013	Rigidpackaging$ 0002012	Industrialpackaging$ 0002012	eliminations /unallocated$ 0002012	Total$ 0002012
(i) Segment performance
12 months ended 30 June
Revenue
External sales	51,815	121,316	-	173,131	47,901	85,152	-	133,053
Inter-segment sales	7,687	8,338	(16,025)	-	6,850	7,756	(14,606)	-
Total segment revenue	59,502	129,654	(16,025)	173,131	54,751	92,908	(14,606)	133,053
EBITDA	6,724	7,349	(2,999)	11,074	6,262	8,045	(2,297)	12,010
Depreciation and amortisation				(3,069)				(2,815)
Interest revenue				62				106
Finance costs				(839)				(1,160)
Profit before income tax				7,228				8,141
Income tax expense				(2,074)				(2,373)
Profit after income tax				5,154				5,768
(ii) Segment assetsAs at 30 June
Segment assets	45,538	103,257	-	148,795	45,534	73,206	-	118,740
Reconciliation of segment assets to group assets
Inter -segment eliminations				(1,497)				(1,959)
Unallocated assets				4,738				6,175
* Deferred tax assets				2,101				1,559
* Other				2,637				4,616
Total group assets from continuing operations				152,036				122,956
(iii) Segment liabilitiesAs at 30 June
Segment liablitiesReconciliation of segment liablities to groupliabilities	10,479	27,846	-	38,325	10,988	16,531	-	27,519
Inter -segment eliminations				(1,451)				(1,665)
Unallocated liabilities				17,829				715
* Deferred tax liabilities				-				-
* Other liabilities				17,829				715
Total group liabilities from continuing operations				54,703				26,569

(iv) The Group operates solely within Australia. As such there is only one geographical segment.

NOTE 17: AUDIT STATUS

This report is based on financial reports that are in the process of being audited.

NOTE 18: LONG TERM EXECUTIVE INCENTIVE PLAN

Under AIFRS, shares issued to executives under the Long Term Executive Incentive Plan are considered to be options granted. As such, the contributed equity (share capital) as well as the related receivable are not recognised on the statement of financial position and do not form part of the asset base in the calculation of the basic net assets and basic net tangible assets per security.

NOTE 19: SIGNIFICANT EVENTS DURING THE PERIOD

Acquisition of businesses

The Group acquired the business and assets of the following:

Effective date Acquired		Business description
	01/07/2012 Start Food-Tech Australia	National supplier of packaging consumables and products to the
		meat, chicken and fish processing industries
	01/07/2012 Metro Cartons	Niche carton and industrial products distributor
	01/11/2012 Source & Sell	Packaging supplier to the food industry including growers, packers
		and bakers
	01/11/2012 Stronghold	Niche distributor of general industrial products
01/02/2013 Abpak		Niche supplier of packaging consumables and products to the
		meat processing industry
	01/02/2013 Poly Products	Flexible extruder, printer and converter
	01/05/2013 Eco Food Pack	Packaging supplier to fresh meat, seafood and poultry industries
	01/06/2013 Australian Flexographic Printers	Printing and laminating flexible films

The effect of the above transactions can be summarised as follows:

	$000's
Assets	Fair value
Current Assets
Inventories	3,107
Trade debtors	2,146
Other receivables	816
Total Current Assets	6,069
Non-Current Assets
Property, plant and equipment	2,629
Total Non-Current Assets	2,629
Total Assets	8,698
Liabilities
Current Liabilities
Trade and other payables	3,199
Total Current Liabilities	3,199
Non-Current Liabilities
Other liabilities	406
Total Non-Current Liabilities	406
Total Liabilities	3,605
NET ASSETS	5,093
CONSIDERATION PAID
Cash	10,907
Contingent deferred payments	5,827
Total	16,734
GOODWILL	11,641

NOTE 19: SIGNIFICANT EVENTS DURING THE PERIOD (CONTINUED)

Contingent deferred payments represent earn-outs relating to certain acquisitions meeting future profit targets.

Contribution of revenue and profits from acquired entities
	$000
Total revenue to 30/06/2013	25,592
Profit after tax to 30/06/2013	2,192
Total revenue to 30/06/2013 if acquired at 1/7/12	47,292
Profit after tax to 30/06/2013 if acquired at 1/7/12	5,011

NOTE 20: CONTINGENT LIABILITIES

As at balance sheet date, the company issued security deposit guarantees to the value of $674,780 to the landlords of rented premises and overseas suppliers.

NOTE 21: CAPITAL EXPENDITURE COMMITMENTS

As at reporting date the company had commitments for future capital expenditure of $158,170.

NOTE 22: EVENTS SUBSEQUENT TO YEAR END

Effective 1 August 2013 Pro-Pac Packaging Manufacturing (Syd) Pty Ltd, a wholly owned subsidiary, acquired the business and assets of Labels Plus (NSW) Pty Ltd trading as Fast Labels. Fast Labels is a niche label manufacturer operating in Sydney with annualised turnover of circa $800,000.