Redflex 2000 Annual Report

2000 ANNUAL REPORI
REDFLEX HOLDNGS LMIED

2000 ANNUAL REPORI
CONIENIS
CHEF EXECUTVE OFFCEF'S FEPOFT .......................... !
DFECTOFS' FEPOFT....................................................... 3
DFECTOF'S DECLAFATO .......................................... !4
PFOFT G LOSS STATEET ......................................... !6
BALACE SHEET............................................................ !7
STATEET OF CASHFLOvS....................................... !3
OTES TO THE FACAL STATEETS .................... 20
DEPEDET AUDTOFS FEPOFT.............................. 4!
SHAFEHOLDEF FOFATO .................................... 42
DlRECTORS
Malcolm Fraser
Edward W A Butcher
Fussell G Baird
Graham W Davie
Fob Ciolli
Johh W Gilbert
Barbara Yeoh
COMPANY SECRETARY
Marilyh Stephehs
REGlSTERED OFFlCE
11-29 Easterh Foad
South Melbourhe
Victoria, Australia 3205
OVERSEAS OFFlCES
Sah Frahcisco, Califorhia, USA
Suite 1903, Level 19
703 Market Street
Scottsdale, Arizoha, USA
15029 North 74th Street
AUDlTORS
Erhst 8 Youhg
120 Collihs Street
Melbourhe, Victoria, Australia 3000
SHARE REGlSTRY
Computershare Fegistry Services
Level 1, 565 Bourke Street
Melbourhe, Victoria, Australia 3000
i
ii
Fedllex Connunicalions Sylens provided lhe Consenlry
Fleel Pier oniloring Syslen, an onshore connunicalions
noniloring lacilily lor lhe Collins Class Subnarines.
1 11 11
2000 ANNUAL REPORI
CHEF EXECUIVE OFFCERS REPORI
DEAR SHAREHOLDER
The Fedllex group incurred a consolidaled nel loss
ol $!.73 nillion lor lhe year ended 30 June 2000,
belore abnornal ilens ol $!3.03 nillion, aller
charging deprecialion and anorlisalion ol $2.65
nillion and inleresl expense ol $0.!6 nillion This
resull rellecls lhe acceleralion in aclivily during lhe
year, parlicularly in developing our USA operalions.
Cross revenues increased by !0 lron $!!.6!
nillion in !999 lo $!2.77 nillion in 2000.
ABNORMAL WRlTE-OFFS
n lighl ol lhe Conpany's presenl locus and an
assessnenl ol lhe anlicipaled conpelilion in lhe
narkel places in which il operales, lhe Direclors
have reassessed lhe carrying value ol core
lechnologies and previously capilalised
expendilures, as al 30 June 2000, and have wrillen
down lhe carrying values accordingly.
The Conpany has also recognised slarl-up cosls in
lhe USA as an abnornal ilen. This anounl relales
lo USA narkel eslablishnenl and developnenl
cosls, incurred in a non-recurring phase ol aclivily.
The year's linancial resulls should be viewed
againsl lhe polenlial lulure benelils ol posilive
narkel penelralion and lhe awarding ol new
conlracls achieved during lhe year. As previously
announced lo shareholders, we expecl our
business lo grow considerably, wilh idenlilied
conlracls, eilher in place or in lhe process ol
negolialion, lhal should generale gross revenues in
lhe order ol $35 nillion over lhe nexl !-5 years.
This growlh also assunes lhe Conpany will be
successlul in a nunber ol currenl lenders and,
given Fedllex's currenl slanding, lhe Board is
conlidenl ol lhal success. Furlher delails ol our
operalions are provided below.
CAPlTAL RAlSlNGS
ajor capilal raisings inplenenled since ! July
!999, and lhe dale ol lhis reporl, are:
Placenenl ol !.5 nillion shares al a price ol
$3.05, raising a gross anounl ol $4.575 nillion.
Placenenl ol 4.35 nillion shares al a price ol
$2.00, raising a gross anounl ol $9.7 nillion
Fully renounceable righls issue ol one share lor
every live shares al an issue price ol $!.35,
lhereby raising a gross anounl ol $9.3 nillion,
due lo be conpleled by 30 Seplenber 2000.
The lunds raised pursuanl lo lhe above share
issues will, in lhe nain, be used lo linance lhe
inslallalion ol new USA conlracls, where Fedllex is
required lo build and inslall all ol lhe lrallic canera
lield equipnenl and inlraslruclure lor lhe
jurisdiclions. This up-lronl expendilure nay be
incurred up lo live nonlhs belore generaling gross
revenues. The balance ol lhe lunds raised will be
used lo reduce bank debl and underpin lhe
conpany's working capilal.
CORPORATE DEVELOPMENTS
ve are also pleased lo reporl on a nunber ol olher
developnenls during lhe year ended 30 June 2000
which are sunnarised as lollows:
!. Our capilal slruclure and new board
appoinlnenls announced lo lhe ASX on !5
February 2000. Brielly, lhis announcenenl
inlorned shareholders ol lhe appoinlnenl ol
The Fl Hon alcoln Fraser, Lord Cilberl ands
Barbara Yeoh as Direclors ol Fedllex Holdings
Liniled.
2. The issue lo shareholders ol lree oplions
announced on !5 February 2000 and lhe new
inveslnenl in Fedllex by Thorney Ply Lld, being
lhe inveslnenl arn ol lhe Prall Croup. This
was also announced on !5 February 2000.
3. Exporl achievenenls in lhe USA, which al lhis
slage predoninanlly relale lo our Trallic
Syslens division. n lhis regard, we have
concenlraled our ellorls in recenl nonlhs on
lhe inslallalions ol red lighl canera syslens lor
our new conlracls, being lhe Cilies ol Carden
Crove, rvine and Frenonl in Calilornia, and
Chandler in Arizona. ore recenl conlracl
awards lor lhe cilies ol San Buenavenlura and
2 22 22
Bahrain Delence Force personnel receiving lraining
by Frank Bakker lhe Training Co-ordinalor al Fedllex
Connunicalions Syslens.
3 33 33
2000 ANNUAL REPORI
Toledo are also due lor inplenenlalion during
lhe year ended 30 June 200!.
4. Conplelion ol lhe T version ol VisibleVoice
and lhe ollicial launch ol lhal producl al lhe
ATUC Exhibilion in Sydney in April 2000. ve are
currenlly pursuing a nunber ol business
relalionships and alliances lor lhis producl and
are encouraged by lhe level ol inleresl shown
lo dale.
5. The selllenenl ol a lunding package lor
acceleralion ol lhe connercialisalion aclivily
lor VisibleVoice. This package involving lhe
injeclion ol $2.6 nillion specilically lo
accelerale lhe connercialisalion aclivily ol
VisibleVoice's lechnology was announced lolhe
Auslralian Slock Exchange on 3 July 2000. This
lunding package will require a royally ol nel
7.2 lo be paid on VisibleVoice gross revenues
lo 30 June 2004. The providers ol lhis lunding
will also be issued wilh 500,000 oplions in
Fedllex Holdings Lld, expiring on 30 June 2005,
wilh an exercise price ol $5. Fedllex is nol
incurring any debl under lhis lunding
arrangenenl.
OPERATlONS
REDFLEX TRAFFlC SYSTEMS (RTS)
FTS has over lhe pasl lwelve nonlhs experienced
slrong narkel recognilion ol ils lrallic canera
lechnology and is now working lo inplenenl
conlracls lhal have been awarded by lhe lollowing
jurisdiclions:
Cily ol Chandler, Arizona
Cily ol Carden Crove, Calilornia
Cily ol rvine, Calilornia
Cily ol Frenonl, Calilornia
Cily ol San Buenavenlura, Calilornia
Cily ol Toledo, Ohio.
A nunber ol prospeclive jurisdiclions are currenlly
evalualing lhe FTS syslen and we are hopelul ol
building on our achievenenls over lhe lasl !2
nonlhs in lhe shorl lern.
n addilion lo lhe above, FTS is operaling conlracls
wilh lhe Cily ol San Jose, Calilornia, and Cilies ol
Scollsdale and Paradise Valley in Arizona, and Forl
Collins, Colorado. The nolice processing lacilily in
Scollsdale, Arizona underlakes lhe back ollice
processing aclivilies in supporl ol all ol lhe USA
jurisdiclions.
The Auslralian operalions are sunnarised as
lollows:
New South Wales
FTS' Digilal FEDFLEXloll Syslens are being
inslalled during lhe year lo nonilor and record lhe
idenlily ol loll evaders passing lhrough loll plazas
silualed on lhe Sydney Harbour Bridge and Sydney
Harbour Tunnel. FTS has also inslalled ils digilal
FEDFLEXspeed canera syslens on a Sv
highway, lor conparalive evalualion under lhe
Slage 2, Trial Phase ol lhe FTA Sv's Fixed Digilal
Speed Canera and Processing Syslens FFT
process.
Fedllex announced on 4 Seplenber 2000 lhal lhe
Foads and Trallic Aulhorily ol ew Soulh vales
|'FTA') has nolilied Fedllex Trallic Syslens Ply Lld
lhal ils proposal lo supply, inslall and nainlain a
Fixed Digilal Speed Canera nlringenenl
Processing Syslen has been accepled subjecl lo
execulion ol lhe Conlracl. The base value ol lhis
prospeclive Conlracl eslinaled lo be belween $!.4
nillion and $!.6 nillion depending upon addilional
syslen requirenenls.
Victoria
FTS has inslalled during lhe year ils lixed-sile
Digilal FEDFLEXspeed canera in lhe Donain
Tunnel, elbourne, lor lhe Cily Link Tunnel Pilol
Progran evalualive lrial being conducled by LT
Auslralia Ply Lld.
Civen lhe Police's requirenenl lo connence speed
canera enlorcenenl aclivily in lhe CilyLink Tunnel
in Seplenber 2000, Fedllex's developnenl ol ils
lunnel speed noniloring syslens will conlinue
independenlly ol lhe Pilol projecl, and is expecled
lo be conpleled by 3! Decenber 2000.
4 44 44
Fedllex Trallic Syslens FEDFLEXred digilal red lighl
canera and llash inslallalion.
5 55 55
2000 ANNUAL REPORI
Australian Capital Territory
ve are currenlly parlicipaling in a lrial under lhe
ACT Deparlnenl ol Urban Services Fed Lighl
Canera Progran and a decision is expecled lo be
nade by Decenber 2000 in relalion lo lhis lrial.
Other markets
n olher narkels, Fedllex Trallic Syslens is
inslalling a lrallic canera syslen lor Bahrain and
also undergone a recenl lrial ol ils speed canera in
lhe Uniled Kingdon's Highways Aulhorily Speed
oniloring projecl in anlicipalion ol signilicanl new
business in lhis region in lhe near lulure.
REDFLEX COMMUNlCATlONS
SYSTEMS (RCS)
arkel inleresl in our Swilchplus connunicalions
lechnology increased during lhe year ended 30
June 2000 and we are sleadily increasing lhe
nunber ol conlracls in progress.
RTA NSW telecommunications upgrade
The nlegraled Fadio and Telephony Syslen |FTS)
provided by FCS in parlnership wilh VisibleVoice
lor lhe Foads and Trallic Aulhorily |FTA), Sv, was
connissioned in arch 2000 and conslilules a
najor upgrade lo lhe FTA's leleconnunicalions.
The FTS conlrols lhe FTA's conprehensive nelwork
ol radio and lelephony syslens operaling lhrough
lhe FTA's Trallic anagenenl Cenlre. Designed lo
grow wilh lhe Cenlre's burgeoning lrallic and
incidenl conlrol responsibililies lor Sydney's road
nelwork, lhe FCS syslen will help nanage lhe
conplex lransporl connunicalions requirenenls
associaled wilh lhe Olynpic Canes.
Bahrain export milestone for Switchplus
FCS signed a signilicanl conlracl during lhe year
ended 30 June 2000 ol ils core Swilchplus
connunicalions lechnology lo supply an air lrallic
conlrol syslen lor lhe Bahrain Delence Force.
Delence Force personnel will use lhe syslen lo
connunicale wilh aircrall and ground unils using
radio and lelephony. The projecl value is in lhe
order ol $2 nillion.
The win is considered very signilicanl, being lhe
lirsl delence exporl sale ol Swilchplus, and won
despile enlrenched conpelilion lron najor USA
and UK-based conpelilors.
Redflex sale to Royal Australian Navy
FCS has provided lhe connunicalions solulion lor
lhe Consenlry Fleel Pier oniloring Syslen lor lhe
Foyal Auslralian avy, an onshore connunicalions
noniloring lacilily lor lhe Collins Class Subnarines
berlhed in veslern Auslralia.
The Fedllex syslen provides lhe direcl voice
connunicalion belween an operalor in an ollice
lacilily, and up lo six subnarines silualed al any ol
lhree pier berlhs.
A llexible louchscreen operalor lerninal allows
rapid access lo each ol lhe subnarines. Audio
alerling lor calls and slalus noniloring is provided.
The syslen inlegrales wilh lhe exisling subnarine
connunicalions syslen.
FCS and Boeing have joinlly developed lhe syslen
lo neel lhe specilic requirenenls ol lhe avy and
lhe Auslralian Subnarine Corporalion.
This is a lurlher applicalion ol Fedllex' Swilchplus
lechnology, and lollows lhe inslallalion lor lhe Foyal
Auslralian avy ol on-board connunicalions
syslens lor lhe Landing Plallorn Anphibious
ships. ve are conlidenl lhal lhis will lead lo lurlher
work wilh lhe avy and lor lhe subnarine lleel in
parlicular.
Tactical Air Defence Radar
Communication System for the Australian
Air Force
FCS is required lo deliver lour connunicalions
syslens which will be used by lhe Foyal Auslralian
Air Force as parl ol lheir Taclical Air Delence Fadar
Syslens, being delivered by Lockheed arlin as lhe
prine conlraclor. Delivery ol all syslens is expecled
lo be conpleled during lhe year ending 30 June
200!.
The connunicalions syslen provides
conprehensive louchscreen operalor capabilily lor
6 66 66
VisibleVoice Sludio Services' new Fecording Sludio
has been evolving sleadily and in addilion lo lhe
exisling lelephony clienl base, lhe lacilily has
already allracled new business lron bolh nulli-
nedia and liln nakers.
7 77 77
2000 ANNUAL REPORI
lhe conlrol and noniloring ol radio, lelephone and
inleraclive voice connunicalion, and lhe carriage
ol dala circuils.
Flexible sollware conliguralion allows linely
nodilicalions lo lhe syslen lo neel changing
operalional needs.
The syslen supporls secure connunicalions
capabililies required in a delence environnenl and
has been developed lo neel lhe specilic
requirenenls ol lhe Air Force.
vork on lhe syslen has already led lo a nunber ol
inquiries lo supply sinilar syslens lo exporl
delence narkels.
VlSlBLEVOlCE
ve ollicially launched lhe new T version ol
VisibleVoice al lhe ATUC Conlerence in April 2000.
The narkel has responded enlhusiaslically lo lhe
'unilied nessaging' capabilily ol VisibleVoice's
vindows T inleraclive lelephony access producl.
nilial orders lor lhe producl have been received and
lhe lirsl inslallalions occurred in June.
Unilied essaging inlegrales enail, voice nail and
lax nail inlo a connon nail-box which can be
readily accessed regardless ol user localion. For
exanple, users can have lheir enail read oul over
lhe phone, or lhey can record and send a voice nail
reply using lheir conpulers.
The Unilied essaging lunclion is jusl one ol lhe
inleraclive lelephony lealures ollered by lhe T-
based producl. Olher lealures include expanded
VF lunclions, lelephony inlerlacing lo lhe inlernel,
use ol lexl lo speech and speech recognilion and
Aulo Allendanl lunclions.
ve are also pleased lo advise lhal VisibleVoice
Sludio Services' new Fecording Sludio was ollicially
opened by lhe Chairnan ol Fedllex, lhe Fl Hon
alcoln Fraser, on !9 April 2000. The sludio is
expecled lo lurlher accelerale lhe conpany's
repulalion lor high qualily sound recording. n
addilion lo lhe exisling lelephony clienl base, lhe
lacilily has already allracled new business lron
bolh nulli-nedia and liln nakers.
REDFLEX TOUCHSCREENS
Fedllex conlinued lo dislribule Elo Touchscreens
under a Sole asler Dislribulor arrangenenl lor
Auslralia and ew Zealand. ew induslry
applicalions are being developed which should
expand lhe cusloner base lor Fedllex.
SUMMARY
FORECAST EARNlNG PROJECTlONS
Shareholders will have recenlly received lhe righls
issue prospeclus relaling lo lhe issue ol ! share lor
every live shares held. The issue price was $!.35
and closed on !5 Seplenber 2000. The issue was
lully underwrillen by Johnson Taylor Corporale Lld.
Shareholders will nole lhe nel aller lax revenue
projeclion lor lhe year ended 30 June 200! ol $4.5
nillion, which is anlicipaled lo principally conprise
conlribulions lron lhe Trallic Syslens and
Connunicalions divisions.
This earnings projeclion will equale lo !5.2 cenls
per share on lhe expanded capilal ol 3!.4 nillion
shares, posl righls issue. This earnings projeclion
is weighled lowards lhe second hall ol linancial
year 200!, as Fedllex is currenlly inplenenling
capilal equipnenl and inlraslruclure in advance ol
revenue generalion.
Having regard lo lhe achievenenls idenlilied above
during lhe year ended 30 June 2000, and lhe up-
lronl inveslnenl by Fedllex in developing lhese
opporlunilies, we are conlidenl ol achieving high
growlh rales over lhe coning years. This oullook
can now be based on exisling conlracls and an
expanding prospeclive conlracl regisler. The
Fedllex Croup enjoys slrong relalionships wilh
najor clienls and will be building on lhose
relalionships in lo lhe lulure.
Fussell Baird
23 Seplenber 2000
8 88 88
DRECIORS REPORI
Your Direclors subnil lheir reporl lor lhe year ended 30 June 2000
NAMES AND OUALlFlCATlONS OF DlRECTORS
Malcolm Fraser |appoinled !5 February 2000), Chairmah
Edward W A Butcher
Fussell G Baird
Graham W Davie
Fob Ciolli |appoinled 20 Oclober !999)
Johh W Gilbert |appoinled !5 February 2000)
Barbara Yeoh |appoinled !5 February 2000)
All direclors shown were in ollice lron lhe beginning ol lhe year unlil lhe dale ol lhis
reporl, unless olherwise indicaled. The signilicanl changes lo lhe Board during lhe
year rellecls lhe Croup's increasing nalurily as il connercialises lhe producl base
developed over previous years.
MALCOLM FRASER (AGE 70)
r Fraser is a lorner Prine inisler ol
Auslralia and has over 20 years ol
experience in econonics, global
linancial narkels. He has been a
nenber ol lhe Advisory Board ol lhe
nveslnenl Conpany ol Anerica, a
conpany in lhe Capilal Croup ol lunds,
a consullanl lo lhe Prudenlial nsurance
Conpany ol Anerica, a nenber ol lhe
nlernalional Board ol Advice lor lhe
AZ Bank and a consullanl lo onura
Securilies. r Fraser is a specialisl in
world econonic relalionships, geo-
polilical allairs and governnenl and
privale seclor inlerrelalionships.
r Fraser's direclorships were The Firsl
Auslralia Prine ncone Fund, nc. |since
!936), The Firsl Connonweallh Fund,
nc. |since !992), and Firsl Auslralia
Prine ncone nveslnenl Conpany
Liniled |since !936), Parlner, areen
Pasloral Conpany |agricullure) |unlil
!993), Presidenl CAFE nlernalional
|!990-!995).
9 99 99
2000 ANNUAL REPORI
DRECIORS REPORI
BARBARA YEOH (AGE 51)
s Yeoh is experienced in lhe areas ol
corporale linance and capilal narkels,
bolh doneslic and ollshore. s Yeoh
is Direclor Corporale Advisory al Oxley
Corporale Finance Liniled and she also
holds direclorships wilh Easlern Heallh,
Credil Union Services Corporalion
|Auslralia) Liniled, alional Fail
Corporalion Liniled and Housing
Cuaranlee Fund Liniled. s Yeoh was
previously a council nenber and
Depuly Chancellor ol La Trobe Universily
and Direclor ol Fural Finance Corpn and
Auslin Fepalrialion edical Cenlre. s
Yeoh is also Chairnan ol ACT
Covernnenl nveslnenl Advisory
Board.
JOHN GlLBERT (AGE 73)
Lord Cilberl was U.K. inisler ol Slale
lor Delence Procurenenl lron ay
!997 lo Augusl !999.
Lord Cilberl was previously Financial
Secrelary lo lhe Treasury |!974-75),
inisler lor Transporl |!975-76) and
inisler ol Slale lor Delence |!976-
!979). He was a nenber ol a nunber
ol Selecl Connillees ol lhe House ol
Connons, including lhe Expendilure,
Delence and Trade and nduslry
Connillees. osl recenlly he was lhe
senior opposilion nenber ol lhe
Connillee on nlelligence and Securily
lron ils crealion in !994 unlil April !997.
Lord Cilberl has business inleresls in
UK, Auslralia, USA and lhe Far Easl.
Lord Cilberl was nade a Privy
Counsellor in !973.
ROB ClOLLl (AGE 54)
r Ciolli has had nore lhan lwenly
years ol experience connercialising lhe
applicalion ol conpuling lechnologies
|parlicularly digilal inaging and relaled
graphics lechnologies). Belore lounding
Fedllex Trallic Syslens he was involved
in developing lhe digilal Sale-T-Can
heavy-vehicle noniloring syslen used
by lhe FTA, Sv, and was co-invenlor
ol lhe TS Trallic nlringenenl olice
Processing Syslen applied in lhe
Vicloria Police Trallic Canera Ollice
|!990 -!999).
EDWARD W A BUTCHER (AGE
71)
r Bulcher is a Fellow ol lhe Brilish
nslilule ol anagenenl, Charlered
nslilule ol Transporl and lhe nslilule ol
Engineers. He was Chiel Ceneral
anager ol alional Bus Co in England
in !972 and becane Execulive Direclor
ol Uniled Transporl Overseas Lld in
!974, laking on lhe role ol anaging
Direclor lor ajor Consullancy
Conlracls and Transporl anagenenl
Services. n !977 he becane anaging
Direclor, Uniled Transporl Croup
Auslralia.
During !992 lo !993 r Bulcher was
Chairnan ol The Civil Avialion Aulhorily
ol Auslralia having joined lhal board in
!990. r Bulcher is a pasl Chairnan ol
lhe alional Fail Corporalion and joined
lhe board on 3 ay as lounding
Chairnan ol Fedllex Holdings Liniled.
RUSSELL G BAlRD (AGE 49)
CHlEF EXECUTlVE OFFlCER
r Baird is a Fellow ol lhe nslilule ol
Charlered Accounlanls in Auslralia. His
career has included a conlinual
involvenenl wilh prolessional
developnenl prograns and prior lo
joining Fedllex had been working wilh a
nunber ol Auslralian lechnology and
engineering conpanies on linancing ol
research and developnenl aclivilies.
r Baird has oblained broad experience
in lhe lields ol linancial nanagenenl
during his years wilh a lirn ol
Charlered Accounlanls, lourleen years
ol which were as a parlner. He is
broadly experienced in lhe lields ol
corporale allairs, accounling and
linancial adninislralion.
GRAHAM W DAVlE (AGE 44)
TECHNlCAL DlRECTOR
r Davie is a Bachelor ol Science
graduale lron elbourne Universily.
He has had len years experience wilh
lhe FAAF in engineering design and
developnenl, nainlenance engineering,
sollware developnenl and supporl,
specilicalion ol najor syslens, and
projecl nanagenenl.
His experlise also includes airborne
avionics, llighl sinulalion, avionics
aulonalic lesl equipnenl, air lrallic
conlrol connunicalions and conlrol
syslens, airporl inlornalion display
syslens, and developnenl ol graphics
sollware and syslen supporl.
10 10 10 10 10
DRECIORS REPORI
DlRECTORS' lNTERESTS
The inleresl ol each direclor in lhe share capilal ol Fedllex Holdings Liniled, al lhe dale ol lhis Feporl, as
conlained in lhe Fegisler ol Direclors' Shareholding ol lhe Conpany is:
Director Beheficial Felevaht Optiohs over
lhterest lhterest Ordihary Shares
alcoln Fraser 0 0 0
Fussell C Baird 347,330 323,!70 34,736
Edward v Bulcher !9,300 6,200 !,930
Fob Ciolli !66,346 0 !6,635
Crahan v Davie 965,247 70,3!5 !!3,500
John v Cilberl 0 0 0
Barbara Yeoh 0 0 0
Direclors' inleresls in oplions logelher wilh lerns and condilions are sel oul in oles !3 and 24.
lSSUE OF SHARES
During lhe year lhe conpany issued lhe lollowing shares:
!. !,500,000 ordinary shares were issued by way ol privale placenenl al a price ol $3.05 per share lully
paid in cash.
2. 350,000 ordinary shares were issued by way ol privale placenenl al a price ol $2.00 per share lully
paid in cash.
3. !,733,3!3 ordinary shares were issued by way ol conversion ol oplions al a price ol $0.75 cenls per
share lully paid in cash.
4. !3!,239 ordinary shares were issued by way ol lhe Fedllex Enployee Share Acquisilion Schene al a
price ol $2.60 per share.
5. 27,965 ordinary shares were issued by way ol lhe Fedllex Enployee Share Acquisilion Schene al a
price ol $3.40 per share.
6. !4,670 ordinary shares were issued lo oplion holders upon exercising lheir oplions al a price ol $3.50
7. 20,000 ordinary shares were issued lo a slall nenber upon exercising lheir oplions al a price ol 60
cenls.
lSSUE OF OPTlONS
!. 30,000 Unquoled Enployee Oplions were issued, al an exercise price ol $2.60 pursuanl lo lhe Fedllex
Enployee Oplion Plan. These oplions expire on 3 Augusl 2004. All lhese oplions renain oulslanding
al lhe dale ol lhis reporl.
2. !,997,350 oplions were issued al an exercise price ol $3.50 and expiring on 3! Decenber 2002 as a
one lor len bonus issue lo all Shareholders on 23 February 2000.
3. 500,000 oplions were issued al an exercise price ol $3.50 and expiring on 3! Decenber 2002 in
conjunclion wilh lhe placenenl ol lhe !,500,000 shares al a price ol $3.05 lo Thislle Ply Lld.
4. The oplions oulslanding as al lhe dale ol lhis reporl are:
2,432,630 lisled oplions expiring on 3! Decenber 2002 exercisable al a price ol $3.50
!40,000 unlisled oplions expiring on !6 Seplenber 2003 exercisable al a price ol 60 cenls
30,000 unlisled oplions expiring on 7 Augusl 2004 exercisable al a price ol $2.60.
5. During lhe year ended 30 June 2000, lhe lollowing oplions were exercised:
!,733,3!3 al a price ol 75 cenls
20,000 al a price ol 60 cenls
!4,670 al a price ol $3.50
11 11 11 11 11
2000 ANNUAL REPORI
DRECIORS REPORI
EMOLUMENTS OF DlRECTORS OF REDFLEX HOLDlNGS LlMlTED
Ahhual Emolumehts
Base Fee Other
$ $
alcoln Fraser !0,452 336
Fussell C Baird !36,000 9,520
Edward v Bulcher 23,363 2,303
Fob Ciolli !!4,950 3,047
Fonald D Conry !0,397 0
Crahan v Davie !36,000 9,520
John Cilberl 7,452 596
Barbara Yeoh !0,433 335
Aparl lron execulive direclors lhere are no ollicers ol lhe Conpany or consolidaled enlily who are
regarded as execulive ollicers lor lhe purpose ol enolunenl disclosures.
EARNlNGS PER SHARE
Basic Earnings per Share |76.4 cenls)
Diluled Earnings per Share are nol nalerially dillerenl lron Basic Earnings per share.
lNDEMNlFlCATlON AND lNSURANCE OF DlRECTORS
o preniun was paid lo insure all direclors and ollicers againsl liabilily arising lron any clains lor
which lhey are nol indennilied by lhe conpany during lhe year ended 30 June 2000.
Subsequenl lo lhe year end, lhe conpany has laken oul world wide cover lor $20 nillion al a cosl ol
$35,000 per annun lo insure all direclors and ollicers againsl liabilily arising lron any clains.
DlRECTORS' MEETlNGS
During lhe year ended 30 June 2000, lhirleen direclors' neelings were held and allended as lollows:
No of Meetihgs Meetihgs
held while ih office attehded
alcoln Fraser 7 7
Fussell C Baird !3 !3
Edward v Bulcher !3 !2
Fob Ciolli !! !!
Fonald D Conry 6 3
Crahan v Davie !3 !3
John Cilberl 7 6
Barbara Yeoh 7 7
An Audil and Finance Connillee was lorned during lhe year. eelings held and allended are as
lollows:
No of Meetihgs Meetihgs
held while ih office attehded
Fussell C Baird 4 4
Edward v Bulcher 4 4
Barbara Yeoh |Chairperson) 4 4
alcoln Fraser |Fedllex Chairnan) allended one ol lhese neelings.
12 12 12 12 12
DRECIORS REPORI
SUMMARlSED OPERATlNG RESULTS
The consolidaled operaling loss ol lhe econonic enlily lor lhe year ended 30 June 2000, aller incone lax,
was $!,73!,325 belore abnornal ilens ol $!3,036,!23. The operaling loss ol lhe chiel enlily, Fedllex
Holdings Liniled lor lhe year ended 30 June 2000, aller incone lax was $4,705,236.
PRlNClPAL ACTlVlTlES
The principal aclivilies, during lhe linancial year ol enlilies wilhin lhe econonic enlily were:
Fesearch and developnenl and connercialisalion ol lechnology associaled wilh voice and dala digilal
swilching and relaled connunicalions syslens,
Sales and dislribulion ol lhe ELO range ol conpuler louchscreens and associaled lechnology,
Conlinuing developnenl and connercialisalion ol lhe Fedllex TPS inage processing sollware and
associaled lrallic violalion nanagenenl syslens and hardware,
The developnenl and connercialisalion ol business lelephony applicalions.
OPERATlNG REVENUES
Cross operaling revenues lor lhe year ended 30 June 2000 were $!2,773,674.
SlGNlFlCANT CHANGES lN THE STATE OF AFFAlRS
During lhe year ended 30 June 2000, lhe slale ol allairs ol lhe Fedllex group changed signilicanlly as a
resull ol lhe issue ol ordinary shares pursuanl lo lhe arrangenenls relerred lo in "ssues ol Shares"
above.
LlKELY DEVELOPMENTS AND EXPECTED RESULTS
n lhe opinion ol lhe direclors, il would prejudice lhe inleresls ol lhe Conpany lo provide addilional
inlornalion, excepl as reporled in lhis Direclors' Feporl, relaling lo likely developnenls in lhe operalions
ol lhe Conpany and ils subsidiaries and lhe expecled resulls ol lhose operalions in lhe linancial years
subsequenl lo lhe dale ol lhis Feporl. The Conpany announces any najor conlracls awarded wilhin lhe
divisions as lhey arise. The duralion ol lhese conlracls will inpacl over a nunber ol linancial years.
Shareholders will be aware ol lhe prospeclus issued in Augusl 2000 which conlains a review ol operalions
and currenl business slralegy.
AFTER BALANCE DATE EVENTS
On Augusl !!, 2000 lhe Conpany issued a prospeclus ollering shareholders a one lor live renounceable
righls issue al an issue price ol $!.35 per share.
The righls issue lollows lhe announcenenl ol a placenenl ol 4 nillion shares al an issue price ol $2.00
per share ralilied by Shareholders al an exlraordinary neeling ol Shareholders held on 23 June 2000.
Bolh equily raising inilialives were nade lo provide working capilal lor lunding lhe inslallalion ol USA
Trallic enlorcenenl conlracls, lo supplenenl lhe Croup's working capilal and posilion lhe Croup lor
expansion. The conbined equily raising aclivilies are expecled lo generale lunds ol $!7.44 nillion nel.
ENVlRONMENTAL REGULATlON AND PERFORMANCE
There is no legislalion direclly allecling lhe induslry in which we operale.
n accordance wilh ASX Lisling Fule 4.!0.3, lhe direclors provide hereunder lhe nain corporale
governance praclices ol lhe econonic enlily.
BOARD OF DlRECTORS COMPOSlTlON
The board ol direclors conprises lour non-execulive direclors including lhe chair, and lhree execulive
direclors. l is considered lhal lhis conposilion is appropriale lor lhe econonic enlily al lhis slage ol lhe
conpany's developnenl.
AUDlT AND FlNANCE COMMlTTEE
An Audil and Finance Connillee conprising lwo on-Execulive Direclors and lhe Chiel Execulive Ollicer
has been lorned. The exlernal audilor is required lo allend lhese neelings on a regular basis.
13 13 13 13 13
2000 ANNUAL REPORI
DRECIORS REPORI
NOMlNATlONS
Civen lhe conposilion and size ol lhe board ol direclors, lhe econonic enlily does nol have a noninalion
connillee.
REMUNERATlON COMMlTTEE
A Fenuneralion Connillee conprising lhe Chairnan, Chairperson ol lhe Audil and Finance Connillee
and Chiel Execulive Ollicer has been lorned lor review ol lulure renuneralion arrangenenls lor lhe
direclors, and execulive lean. The Chiel Execulive's renuneralion is reviewed by lhe Chairnan and
Chairperson ol lhe Audil and Finance Connillee. A policy lor delernining lhe anounl and nalure ol
enolunenls and lhe linkage wilh lhe Conpany's perlornance is currenlly being lornulaled.
ETHlCAL STANDARDS
The econonic enlily has in place a Code ol Conducl which idenlilies lhe appropriale prolessional conducl
lor ils dealings wilh shareholders, nanagenenl, enployees and olher persons. The sell-regulalory
neasures conlained wilhin lhis code are inporlanl in increasing lhe awareness ol shareholders, and
olhers who deal wilh lhe conpany, lhal Fedllex Holdings Liniled lakes responsibilily lor ils own conducl
so lhal lhey nay leel conlidenl as lo lhe inlegrily ol lhe Conpany and ils decision naking processes.
This Code ol Conducl has been inplenenled by lhe board ol direclors, who review conpliance wilh lhe
code and review ils conlenls on an ongoing basis.
The Code currenlly includes slandards in respecl ol lhe provision ol a sale and heallhy workplace, lair
enploynenl praclices, environnenlal concerns, conpliance wilh business praclice legislalion, share
lrading by enployees and direclors, linancial reporling and dealings wilh cusloners and shareholders.
lDENTlFYlNG AND MANAGlNG BUSlNESS RlSKS
The board regularly nonilors lhe operalional and linancial perlornance ol lhe Conpany and econonic
enlily againsl budgel and olher key perlornance neasures. The board also reviews and receives advice
on areas ol operalional and linancial risks. Appropriale risk nanagenenl slralegies are developed lo
niligale all idenlilied risks ol business.
Signed in accordance wilh a resolulion ol lhe direclors.
Fussell Baird Fussell Baird Fussell Baird Fussell Baird Fussell Baird
Direclor
elbourne, Seplenber 23, 2000
14 14 14 14 14
DRECIORS DECLARAION
REDFLEX HOLDlNGS LlMlTED ACN 069 306 216
n accordance wilh a resolulion ol lhe direclors ol Fedllex Holdings Liniled, slale lhal:
n lhe opinion ol lhe direclors:
a) lhe linancial slalenenls and noles ol lhe conpany and ol lhe consolidaled enlily are in accordance wilh
lhe Corporalions Law, including:
|i) giving a lrue and lair view ol lhe conpany's and consolidaled enlily's linancial posilion as al 30 June
2000 and ol lheir perlornance lor lhe year ended on lhal dale, and
|ii) conplying wilh Accounling Slandards and Corporalions Fegulalions, and
b) lhere are reasonable grounds lo believe lhal lhe conpany will be able lo pay ils debls as and when lhey
becone due and payable.
On behall ol lhe Board
Fussell Baird
Direclor
elbourne, Seplenber 23, 2000
15 15 15 15 15
2000 ANNUAL REPORI
Helicopler connunicalions is one ol lhe nany
lunclions provided by lhe Fedllex Helicopler Voice
nlercon and Black Dislribulion Syslens on-board
lhe HAS AOOFA and HAS KABLA.
16 16 16 16 16
(FRQRPLF (QWLW\ &KLHI (QWLW\
1laa11 1laa 1laa11 1laa
|:|- ; ; ; ;
PROFI & LOSS SIAIEMENI
FOF YEAF EDED 30 JUE 2000
Operaling Prolil / |Loss) belore ncone Tax 2 G 3 |!4,3!7,943) 746,202 |4,705,236) |230,552)
ncone Tax |Expense) / Benelil allribulable lo Operaling
Prolil |Loss) 4 0 0 0 0
Operaling Prolil / |Loss) aller Tax |!4,3!7,943) 746,202 |4,705,236) |230,552)
Oulside Equily nleresls in Operaling Prolil / |Loss) aller lax 67,000 |23,!25) 0 0
Operaling Prolil / |Loss) Aller ncone Tax allribulable lo
enbers ol lhe Chiel Enlily |!4,334,943) 774,327 |4,705,236) |230,552)
Felained Prolils / |Accunulaled Losses) al lhe beginning
ol lhe Financial Year !,933,330 !,2!4,053 |9!6,645) |636,093)
Felained Prolils / |Accunulaled Losses) al lhe end ol lhe
Financial Year |!2,396,563) !,933,330 |5,62!,33!) |9!6,645)
17 17 17 17 17
2000 ANNUAL REPORI
|:|- ; ; ; ;
BALANCE SHEEI
AS AT 30 JUE 2000
CURRENT ASSETS
Cash 3 94,373 5,303,309 0 6,756,049
Feceivables 9|a) 2,425,996 3,009,959 0 0
nvenlories !0 4,423,259 663,627 0 0
Olher !5 524,30! 693,354 0 !44,6!3
7,473,434 9,675,749 0 6,900,667
NON-CURRENT ASSETS
Feceivables 9|b) !,420,42! !,233,9!4 !6,25!,375 7,302,059
nveslnenls !! 0 !04,097 4,739,3!7 4,740,!42
Planl and Equipnenl !3 4,206,0!4 !,952,736 0 0
nlangible Assels !4 5,000,000 !!,433,620 0 0
!0,626,435 !4,779,367 20,99!,!92 !2,042,20!
Total Assets !3,099,369 24,455,!!6 20,99!,!92 !3,942,363
CURRENT LlABlLlTlES
Accounls Payable !6|a) 5,745,340 5,573,626 0 0
Borrowings !6|a) !,263,69! 357,300 530,7!3 357,300
Provisions !7|a) 4!7,56! 266,327 0 0
7,426,592 6,703,253 530,7!3 357,300
NON CURRENT LlABlLlTlES
Borrowings !6|b) 0 0 3,436,537 4,0!0,!59
Provisions !7|b) 332,994 !97,346 0 0
332,994 !97,346 3,436,537 4,0!0,!59
Total Liabilities 7,759,536 6,90!,099 4,0!7,305 4,367,959
Net Assets !0,340,233 !7,554,0!7 !6,973,337 !4,074,909
SHAREHOLDERS' EOUlTY
Share Capilal !3 22,595,763 !4,96!,554 22,595,763 !4,96!,554
Feserves !9 0 0 0 0
Oplions !3 0 30,000 0 30,000
Felained Earnings / |Accunulaled Losses) |!2,396,563) !,933,330 |5,62!,33!) |9!6,645)
Oulside Equily nleresl 27 64!,033 574,033 0 0
!0,340,233 !7,554,0!7 !6,973,337 !4,074,909
18 18 18 18 18
|:|- ; ; ; ;
SIAIEMENI OF CASHFLOWS
CASH FLOWS FROM OPERATlNG ACTlVlTlES
Feceipls lron cusloners !3,473,336 3,546,274 0 4,046
Paynenls lo suppliers and enployees |!9,965,95!) |4,!66,965) 0 |!7!,370)
nleresl received 36,453 !46,!30 3,565 54,535
nleresl and olher cosls ol linance paid |!63,069) |296,735) |9!,052) |!30,663)
el Cash nllow/|Oulllow) lron operaling aclivilies see |b) |6,563,726) 4,223,654 |37,437) |293,407)
CASH FLOWS FROM lNVESTlNG ACTlVlTlES
Paynenls lor properly, planl and equipnenl |2,939,!35) |!,363,565) 0 0
Tern Deposils 0 |262,065) 0 |!06,957)
Capilalised research and developnenl |4,334,257) |5,!97,!09) 0 0
|7,323,442) |6,327,739) 0 |!06,957)
CASH FLOWS FROM FlNANClNG ACTlVlTlES
Loans lo Felaled Parlies 0 0 |!3,425,694) |!,033,92!)
Proceeds lron Slruclured Finance arrangenenl !,722,632 0 0 0
Shareholder loans received |paid) |327,032) 94,!95 |327,032) 94,!95
el cash proceeds lron share issues 7,054,2!4 3,743,536 7,034,2!4 3,743,536
3,449,764 3,337,73! |6,663,562) 7,303,3!0
el ncrease/|Decrease) in Cash held |5,942,404) 6,233,646 |6,756,049) 7,403,446
Cash al Beginning ol Financial Year 5,303,309 |934,337) 6,756,049 |647,397)
Cash al End ol Financial Year see |a) |633,595) 5,303,309 0 6,756,049
(A) RECONClLlATlON OF CASH
Cash al lhe end ol lhe year as shown in lhe Balance Sheel as:
Bank overdrall as per ole !6 |732,973) 0 0 0
Cash al bank 94,373 5,303,309 0 6,756,049
|633,595) 5,303,309 0 6,756,049
The conpany has an overdrall lacilily ol up lo $300,000. The undrawn lacilily as al 30 June 2000 anounls lo $67,027
19 19 19 19 19
2000 ANNUAL REPORI
|:|- ; ; ; ;
SIAIEMENI OF CASHFLOWS
(B) RECONClLlATlON OF OPERATlNG PROFlT
AFTER lNCOME TAX, TO NET CASH lNFLOW
FROM OPERATlNG ACTlVlTlES
Operaling Prolil/|Loss) aller ncone Tax |!4,3!7,943) 746,202 |4,705,235) |230,552)
NON CASH FLOW lTEMS lN OPERATlNG PROFlT
Deprecialion Expense 735,907 20!,733 0 0
Anorlisalion ol nlangibles !,742,2!4 !,349,742 0 0
Anorlisalion ol goodwill !69,200 0 0 0
nveslnenls wrile oll !04,097 0 0 0
Provision lor Delerred ncone |7,543) |224,575) 0 0
on cash charges 0 |49,232) 0 0
Provision lor Enployee Enlillenenls 293,430 !!6,934 0 0
Provision lor Doubllul Debls |27,067) |72,933) 0 0
Abnornal lens wrile-oll ol inlangibles 9,356,463 0 4,067,743 0
VisibleVoice lunding lransaclion revenue |422,632) 0 0 0
CHANGE lN OPERATlNG ASSETS AND LlABlLlTlES
Decrease/|ncrease) Prepaynenls and Sundry Deposils |!26,447) |262,065) 0 0
Decrease/|ncrease) Trade, Olher Deblors and Olher Corporalions !,029,523 |!,023,350) 550,000 4,046
Decrease/|ncrease) nvenlories |3,764,632) !35,339 0 0
ncrease/|Decrease) Trade and Sundry Credilors |333,236) 3,265,354 0 |!6,90!)
Net Cash lhflow/(Outflow) from Operatihg Activities |6,563,726) 4,223,654 |37,437) |293,407)
20 20 20 20 20
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 1 SUMMARY OF SlGNlFlCANT ACCOUNTlNG POLlClES
BASlS OF ACCOUNTlNG
This linancial reporl ol lhe econonic enlily is a general purpose linancial reporl which has been prepared in accordance wilh lhe
requirenenls ol lhe Corporalions Law which includes applicable Accounling Slandards. Olher nandalory prolessional reporling
requirenenls |Urgenl ssues Croup Consensus Views) have also been conplied wilh.
THE COMPANlES COMPRlSlNG THE REDFLEX GROUP
The conpanies conprising lhe Econonic Enlily, also described as lhe Fedllex Croup are:
Chief Entity
Fedllex Holdings Liniled and ils wholly owned subsidiaries Fedllex Liniled, Aerospace Syslens Lld, Silverlene |FGD) Ply Lld,
Fedllex Trallic Syslens nc and lhe wholly owned subsidiaries ol Fedllex Liniled.
Fedllex Finance Ply Lld
Fedllex anagenenl Services Ply Lld
Fedllex Trallic Syslens Ply Lld
Fedllex Connunicalions Syslens Ply Lld
Fedllex Touchscreens Ply Lld
Trallic Syslens |Auslralia) Ply Lld
APF nveslnenls Ple Lld
VisibleVoice Unil Trusl |67).
ACCOUNTlNG POLlClES
The accounling policies adopled are consislenl wilh lhose ol lhe previous year.
CASH
For lhe purposes ol lhe slalenenl ol cash llows cash includes cash on hand and in banks readily converlible lo cash wilhin lwo
working days, nel ol oulslanding bank overdralls.
RESEARCH AND DEVELOPMENT COSTS
Fesearch and developnenl cosls are delerred where lhey are expecled lo give rise lo lulure benelils. Such cosls are anorlised
over lulure periods on a basis relaled lo expecled lulure benelils. The connencing dale lor anorlisalion is lhe dale ol
connissioning lhe producl.
RESEARCH AND DEVELOPMENT SYNDlCATlON
The Croup's enlillenenl lo research and developnenl lunding pursuanl lo lhe Alarnon research and developnenl syndicale,
ceased during lhe linancial year 30 June !996. The incone recognised by lhe Croup in conneclion wilh lhe Alarnon syndicale and
olher research and developnenl syndicales wilh which lhe conpany has previously been involved, relales lo conlracled research
and developnenl work underlaken. o incone is recognised lor lhe disposal ol licences ol core lechnology, due lo lhe ollselling
liabililies lhal are incurred under pul oplion arrangenenls. Feler also lo ole !! re nleresls in Business Underlakings Fesearch
and Developnenl Syndicales.
21 21 21 21 21
2000 ANNUAL REPORI
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 1 SUMMARY OF SlGNlFlCANT ACCOUNTlNG POLlClES |COTUED)
FORElGN CURRENClES
Transaclions in loreign currencies ol enlilies wilhin lhe econonic enlily are converled lo local currency al lhe rale ol exchange
ruling al lhe dale ol lhe lransaclion.
Anounls payable lo and by lhe enlilies wilhin lhe econonic enlily lhal are oulslanding al lhe balance dale and are denoninaled in
loreign currencies have been converled lo local currency using rales ol exchange ruling al lhe end ol lhe linancial year.
All exchange dillerences arising on selllenenl or re-slalenenl are broughl lo accounl in delernining lhe prolil or loss lor lhe
linancial year, and lransaclion cosls, preniuns and discounls on lorward currency conlracls are delerred and anorlised over lhe
lile ol lhe conlracl.
Overseas operalions are nol deened lo be sell-suslaining as lhey rely on lunding lron lhe Auslralian relaled parlies. The linancial
reporls ol lhe overseas operalions are lranslaled using lhe lenporal nelhod and any exchange dillerences are laken direclly lo lhe
prolil and loss slalenenl.
CARRlED FORWARD EXPENDlTURE
Signilicanl ilens ol carried lorward expendilure having a benelil or relalionship lo nore lhan one period, are wrillen oll over lhe
periods lo which such expendilure relales, bul nol nore lhan a period ol live years.
PLANT AND EOUlPMENT
Cost and valuation
lens ol planl and equipnenl conprising a class ol non-currenl assels are broughl lo accounl al cosl and have nol been revalued
in lhe linancial year ended 30 June 2000.
Depreciation
Deprecialion rales are adopled as lollows:
Conpuler and associaled equipnenl
33 pa reducing balance
Olher assels
!3-!3 pa reducing balance.
lNVESTMENTS
All inveslnenls are non-currenl and are carried al lhe lower ol cosl and recoverable anounl.
22 22 22 22 22
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 1 SUMMARY OF SlGNlFlCANT ACCOUNTlNG POLlClES |COTUED)
RECOVERABLE AMOUNTS
on-currenl assels have nol been revalued lo an anounl above lheir recoverable anounl, and where carrying values exceed lhis
recoverable anounl, assels are wrillen down. n delernining recoverable anounls lhe expecled nel cash llows have nol been
discounled lo lheir presenl value using a narkel delernined risk adjusled discounl rale.
REVENUE RECOGNlTlON
Fevenue is recognised lo lhe exlenl lhal il is probable lhal lhe econonic benelils will llow lo lhe enlily and lhe revenue can be
reliably neasured. The lollowing specilic recognilion crileria nusl also be nel belore revenue is recognised:
Sale of Goods
Conlrol ol lhe goods has passed lo lhe buyer.
Fehderihg of Services
vhere lhe conlracl oulcone can be reliably neasured:
conlrol ol a righl lo be conpensaled lor lhe services has been allained and lhe slage ol conplelion can be reliably neasured.
Slage ol conplelion is neasured by relerence lo lhe nalerial cosls and labour hours incurred lo dale as a percenlage ol lolal
nalerial cosls and eslinaled labour hours lor each conlracl.
vhere lhe conlracl oulcone cannol be reliably neasured:
revenue is recognised only lo lhe exlenl lhal cosls have been incurred.
lNVENTORlES
nvenlories are valued al lhe lower ol cosl and nel realisable value.
Cosls incurred in bringing each producl lo ils presenl localion and condilion are accounled lor as lollows:
Faw alerials - purchase cosl on a lirsl-in-lirsl oul basis, and
Finished goods and work-in-progress - cosl ol direcl nalerial and labour and a proporlion ol nanulacluring overheads based
on nornal operaling capacily.
FlNANClAL lNSTRUMENTS
The accounling policies in respecl ol linancial inslrunenls are disclosed in nole 25.
23 23 23 23 23
2000 ANNUAL REPORI
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 2 OPERATlNG PROFlT / (LOSS)
(a) The operating profit / (loss) before income
tax has been determined after charging /
(crediting) the following items:
Deprecialion ol Planl and Equipnenl 735,907 20!,733 0 0
Anorlisalion ol nlelleclual Properly 75,63! 593,399 0 0
Anorlisalion ol Fesearch and Developnenl !,666,533 756,343 0 0
Anorlisalion ol Coodwill !69,200 0 0 0
nveslnenls wrillen oll !04,097 0 0 0
nleresl Expense
olher persons and corporalions !63,069 333,363 9!,052 !30,663
Olher provisions:
Enployee Enlillenenls 293,430 |!07,640) 0 0
Unearned ncone |7,543) |224,575) 0 0
Doubllul Debls Trade Deblors |27,067) |72,933) 0 0
Fenlal / Operaling Leases !35,360 320,423 0 0
Bad Debls Expense 0 !!,023 0 !!,023
(b) Operating Revenue
Sales Fevenue !2,773,674 !!,6!!,925 0 0
(c) Other Revenue
nleresl Feceived
lron olher persons and corporalions 36,453 !46,!30 3,565 54,535
Olher ncone 303,367 !34,696 245,670 !!,!60
339,325 230,326 249,235 65,745
24 24 24 24 24
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 3 ABNORMAL lTEMS
The operating profit / (loss) before income tax
has been determined after charging the following
abnormal items:
|a) n lighl ol lhe Conpany's presenl narkel locus and an
assessnenl ol lhe anlicipaled conpelilion in lhe narkel
places in which il operales, lhe Direclors have reassessed
lhe carrying value ol core lechnologies and previously
capilalised expendilures al June 30, 2000 |incone
lax ellecl, $!,300,000 on lhe underslanding lhal ol
lhis anounl $5 nillion has nol previously been clained
as a lax reduclion).
n accordance wilh Accounling Slandard AASB!0!!
'Accounling lor Fesearch and Developnenl Cosls'
lhe Direclors have considered lhe value ol core
lechnologies lhal can be clearly and separalely idenlilied
in lhe producls being narkeled and recovered wilhin lhe
pricing ol lulure revenue earning conlracls beyond
reasonable doubl, and have wrillen down lhe carrying
values accordingly. 3,7!!,000 0 0 0
|b) el Coodwill acquired on acquisilion ol lhe business
assels ol lhe USA lrallic business has been wrillen oll
in lhe currenl year |incone lax ellecl, $il). !,042,000 0 0 0
|c) The Conpany has also recognised slarlup cosls in
lhe USA as an abnornal ilen. Slarlup cosls wrillen oll
relale lo USA narkel eslablishnenl and developnenl cosls,
incurred in a non-recurring phase ol aclivily. The anounl
conprises overheads and direcl cosls incurred during lhe
year lor relocalion ol slall, recruilnenl ol new slall and
lhe developnenl ol lhe lechnical supporl base lor lhe USA
operalions |incone lax ellecl, $2,999,520). 3,332,000 0 0 0
|d) vrile-oll loan ol subsidiary conpany |incone lax
ellecl $!,620,000). 0 0 4,500,000 0
!3,035,000 0 4,500,000 0
Applicable incone lax |2,999,520) 0 |!,620,000) 0
!0,035,430 0 2,330,000 0
25 25 25 25 25
2000 ANNUAL REPORI
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 4 lNCOME TAX
(a) Carried Forward Tax Losses:
The prina lacie incone lax on lhe operaling prolil is
reconciled lo lhe incone lax |expense)/benelil as lollows:
Operaling Prolil/|Loss) belore ncone Tax |!,73!,325) 746,202 |4,705,235) |230,552)
The prina lacie lax, using lax rales applicable in Auslralia
ol 36, on operaling prolil dillers lron lhe accounls as
lollows:
Prina lacie lax on operaling prolil |623,457) 263,632 |!,693,335) |!00,999)
Tax ellecl ol pernanenl dillerences:
FGD Syndicalion arrangenenls 765,720 547,0!6 0 0
Fesearch and Developnenl clains |229,046) |47!,603) 0 0
|36,733) 344,040 |!,693,335) |!00,999)
Carried lorward losses ollsel 36,733 |344,040) !,693,335 !00,999
ncone Tax Expense 0 0 0 0
Fulure incone lax benelils lron carry lorward incone
lax losses nol broughl lo accounl !,275,542 553,643 !,693,335 203,002
The above lulure incone lax benelil which has nol been broughl lo accounl will only be oblained il:
|i) lulure assessable incone is derived ol a nalure and ol an anounl sullicienl lo enable lhe benelil lo be realised,
|ii) lhe condilions lor deduclibilily inposed by lax legislalion conlinue lo be conplied wilh, and
|iii) no changes in lax legislalion adversely allecl lhe econonic enlily in realising lhe benelil.
(b) Contingent Liability
During lhe year ended 30 June !995 lhe Conpany soughl and oblained a lavourable privale lax ruling relaling lo lhe eligibilily lor
lhe carried lorward lax losses. As a resull ol issues idenlilied in calculaling lhese lax losses, lhe conpany has soughl advice as lo
whelher incone derived by lhe Conpany lron FGD Syndicalion is ol a revenue or capilal nalure lor laxalion purposes, and also as
lo lhe exlenl lo which lhe lax losses available lo lhe Conpany are able lo be used lo ollsel lhal incone. On lhe basis ol advice
received lhe Conpany does nol believe lhal any conlingenl liabilily exisls regarding lhe eligibilily ol carried lorward lax losses.
26 26 26 26 26
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 5 REMUNERATlON OF DlRECTORS
The direclors ol lhe chiel enlily during lhe year were:
Edward v Bulcher
Fussell C Baird
Fonald D Conry |resigned !0 arch 2000)
Crahan v Davie
Foberl Ciolli |appoinled 20 Oclober !999)
alcoln Fraser, Chairnan |appoinled !5 February 2000)
John v Cilberl |appoinled !5 February 2000)
Barbara Yeoh |appoinled !5 February 2000)
ncone, including superannualion, paid or payable or
olherwise nade available in respecl ol lhe linancial year,
lo all direclors ol each enlily in lhe econonic enlily,
direclly or indireclly, by lhe enlilies ol which lhey are
direclors or any relaled parly. 767,344 666,700
ncone, including superannualion, paid or payable
or olherwise nade available in respecl ol lhe
linancial year lo all direclors ol lhe chiel enlily direclly
or indireclly, lron lhe enlily or any relaled parly. 436,2!4 4!7,700
ole: Two persons nol lisled above are direclors ol subsidiary enlilies wilhin lhe group.
unber ol direclors whose renuneralion including
superannualion conlribulions lell wilhin lhe lollowing bands
$0 - $9,999 ! 0 ! 0
$!0,000 - $!9,999 3 ! 3 !
$30,000 - $39,999 ! ! ! !
$!00,000 - $!09,999 0 2 0 !
$!!0,000 - $!!9,999 ! 0 0 0
$!20,000 - $!29,999 ! 0 ! 0
$!30,000 - $!39,999 0 2 0 2
$!40,000 - $!49,999 2 ! 2 0
$!60,000 - $!69,000 ! 0 0 0
27 27 27 27 27
2000 ANNUAL REPORI
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 6 REMUNERATlON OF EXECUTlVES
Fenuneralion received or due and receivable by execulive
ollicers ol lhe econonic enlily whose renuneralion
including superannualion is $!00 000 or nore, lron
enlilies in lhe econonic enlily or a relaled parly, in
conneclion wilh lhe nanagenenl ol lhe allairs ol
lhe enlilies in lhe econonic enlily whelher as an
execulive ollicer or olherwise. 530,667 437,994
Fenuneralion received or due and receivable by
execulive ollicers ol lhe conpany whose renuneralion
including superannualion is $!00,000 or nore, lron
lhe conpany or any relaled parly, in conneclion wilh
lhe nanagenenl ol lhe allairs ol lhe conpany or any
relaled parly, whelher as an execulive ollicer or olherwise.
unber ol execulives ol lhe econonic enlily and lhe
conpany whose renuneralion lalls wilhin lhe
lollowing bands:
$!00,000 - $!09,999 0 !
$!!0,000 - $!!9,999 ! !
$!20,000 - $!29,999 ! 2
$!40,000 - $!49,999 2 0
n lhe opinion ol lhe direclors, renuneralion paid lo execulives is considered reasonable.
NOTE 7 AUDlTOR'S REMUNERATlON
Anounl received or due and receivable by Chiel Enlily
audilor lor audiling lhe accounls 70,500 45,500 70,500 45,500
The audilors received no lurlher benelils.
NOTE S CASH
Cash al Bank 94,373 5,303,309 0 6,756,049
Fesearch and Developnenl Syndicalion
Deposil Funds !5,437,377 32,339,635 0 0
Less provision lor pul oplions and delerred incone |!5,437,377) |32,339,635) 0 0
94,373 5,303,309 0 6,756,049
28 28 28 28 28
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 9 RECElVABLES
(a) Current
Trade Deblors !,95!,642 2,65!,304 0 0
Provision lor Doubllul Debls 0 |27,067) 0 0
Olher Deblors !25,590 56,073 0 0
Olher Corporalions 343,764 329,!49 0 0
2,425,996 3,009,959 0 0
(b) Non Current
Felaled parlies
Conlrolled enlilies 0 0 !5,643,353 7,599,335
Olher Corporalions !,420,42! !,3!9,745 602,522 !22,!74
Less Provision lor non-recovery 0 |30,33!) 0 |420,000)
!,420,42! !,233,9!4 !6,25!,375 7,302,059
NOTE 10 lNVENTORlES
Faw alerials 3,306,9!2 779,0!7 0 0
vork in Progress 62!,347 |!!5,390) 0 0
4,423,259 663,627 0 0
NOTE 11 lNVESTMENTS
|i) Shares lisled on prescribed slock exchange al cosl 0 3,530 0 0
|ii) Shares in conlrolled enlilies |reler nole !2) 0 0 4,739,3!7 4,740,!42
|iii) Shares in olher corporalions |rel |a) below) 90,060 90,060 0 0
Less provision lor dininulion in value 0 |20,000) 0 0
Less anounls wrillen oll |90.060) 0 0 0
0 70,060 4,739,3!7 4,740,!42
|iv) nleresls in business underlakings |reler |b) below) 0 30,457 0 0
0 !04,097 4,739,3!7 4,740,!42
(a) Shares in Other Corporations include the following
|i) Shares in Casllikuln !0 !0 0 0
Less balance wrillen oll |!0) 0 0 0
el book value 0 !0 0 0
29 29 29 29 29
2000 ANNUAL REPORI
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 11 lNVESTMENTS |COTUED)
n !999 Fedllex Liniled was lhe legal and benelicial
owner ol 37.5 ol lhe issued capilal ol Casllikuln
Ply Lld. This conpany has now been deregislered.
|ii) nveslnenl in Fedllex Syslens |alaysia) Sdn Bhd
nveslnenl al cosl 90,000 90,000 0 0
Less provision 0 |20,000) 0 0
Less balance wrillen oll |90,000) 0 0 0
el book value 0 70,000 0 0
The Direclors believe lhis inveslnenl will nol be
recoverable as al 30 June 2000.
|iii) nveslnenl in VisibleVoice Ply Lld |lornerly
The 2!
sl
Cenlury Connunicalions Conpany Ply Lld |Truslee)
50 50 0 0
Less balance wrillen oll |50) 0 0 0
el book value 0 50 0 0
The Direclors believe lhis inveslnenl will nol be
recoverable as al 30 June 2000.
Shares in Olher Corporalions 0 70,060 0 0
(b) lnterests in Business Undertakings - Research and Development Syndicates
o anounl has been carried lorward in lhe Balance Sheel as al 30 June 2000 in relalion lo inveslnenls in Fesearch and
Developnenl Syndicales. The slalus ol lhe lhree syndicales as al 30 June 2000 is sunnarised as lollows:
Connenls Connenls Connenls Connenls Connenls
Alarnon Joinl Venlure vound up in July 2000 |see below)
Fibre Oplic Lighling Joinl Venlure vound up in ay 2000
vall Sockel Joinl Venlure |"lhe renaining Syndicale") n exislence as al 30 June 2000 and likely lo be wound up
during lhe year ended 30 June 200!
ncluded in lhis anounl as al 30 June !999 is:
lhe Conpany's .! inveslnenl in lhe ALAFO Fesearch G Developnenl Joinl Venlure ol $!4,3!!. The anounl olFedllex's
inveslnenl has been wrillen oll as al 30 June 2000.
lhe Conpany's .! inveslnenl in lhe FBFE OPTC LCHTC Fesearch G Developnenl Joinl Venlure ol $9,533. The anounl
ol Fedllex's inveslnenl has been wrillen oll as al 30 June 2000.
lhe Conpany's .! inveslnenl in lhe vALL SOCKET Fesearch G Developnenl Joinl Venlure ol $6,603. The anounl ol
Fedllex's inveslnenl has been wrillen oll as al 30 June 2000.
30 30 30 30 30
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 11 lNVESTMENTS |COTUED)
The Croup has provided guaranlees lo lhe renaining syndicale, and lhe syndicales' nenbers, lor any nonies which nay becone
payable by Croup conpanies, lhe syndicale or lhe syndicale parlies.
As al 30 June 2000, lhe syndicales in lorce have advanced $22,322,9!6 lo lhe Croup. The lunds received have been placed on
deposils wilh lhird parlies. The deposils, logelher wilh any inleresl lhereon, nay only be drawn down in accordance wilh lhe
agreed paynenl schedules and condilions. Ol lhis anounl, $!5,437,377 was drawn in July 2000 in relalion lo lhe winding up ol lhe
ALAFO Syndicale.
The linancier ol lhe renaining syndicale has lhe righl lo exercise a pul oplion whereby a Croup conpany is required lo purchase all
lhe shares in lhe linancier's syndicale parly. The Croup has lully provided lor obligalions under lhe pul oplion arrangenenl lor lhe
renaining syndicale.
NOTE 12 lNVESTMENT lN CONTROLLED ENTlTlES
Couhtry of
lhcorporatioh Ferceht Owhed
30-Jun-00 30-Jun-99
Controlled Entities of Redflex Holdings Limited
Fedllex Liniled Ausl !00 !00
Aerospace Syslens Lld Ausl !00 !00
VisibleVoice Unil Trusl Ausl 67 67
Silverlene |FGD) Ply Lld Ausl !00 !00
Fedllex Trallic Syslens nc USA !00
Controlled Entities of Redflex Limited
Fedllex Touchscreens Ply Lld Ausl !00 !00
Fedllex Connunicalions Syslens Ply Lld Ausl !00 !00
Fedllex anagenenl Services Ply Lld Ausl !00 !00
Fedllex Finance Ply Lld Ausl !00 !00
APF nveslnenls Ple Lld |a) Singapore !00 !00
Controlled Entities of Redflex Traffic Systems lnc
Fedllex Trallic Syslens Ply Lld Ausl !00
Trallic Syslens |Auslralia) Ply Lld Ausl !00
|a) This conpany is nol audiled by Ernsl G Young, lhe chiel enlily's audilors.
31 31 31 31 31
2000 ANNUAL REPORI
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 13 PLANT AND EOUlPMENT
Furnilure and lillings 292,006 !75,507 0 0
Leasehold inprovenenls 2!6,307 !59,075 0 0
Planl and Equipnenl 5,0!5,42! 2,354,324 0 0
5,524,234 2,633,906 0 0
Less Accunulaled deprecialion
Furnilure and Fillings |!22,55!) |39,323) 0 0
Leasehold nprovenenls |39,663) |56,335) 0 0
Planl and Equipnenl |!,!06,00!) |590,0!2) 0 0
|!,3!3,220) |736,!70) 0 0
4,206,0!4 !,952,736 0 0
Leased Assets
Capilalised linanced planl and equipnenl !50,000 !50,000 0 0
Less Accunulaled anorlisalion |!50,000) |!50,000) 0 0
0 0 0 0
Tolal vrillen Down Anounl 4,206,0!4 !,952,736 0 0
NOTE 14 lNTANGlBLE ASSETS (refer to Note 3)
|i) Technology nleresls Direclors valualion !994 0 !0 0 0
|ii) Coodwill al cosl 0 !,!!5,274 0 0
|iii) nlelleclual Properly |al Cosl) 0 3,2!9,293 0 0
Less accunulaled anorlisalion 0 |2,7!!,275) 0 0
nlelleclual Properly al !997 Valualion 0 !,597,0!! 0 0
0 2,!05,029 0 0
|iv) Fesearch and Developnenl Expendilure
Capilalised |al Cosl) 5,000,000 9,033,903 0 0
Less accunulaled anorlisalion 0 |370,596) 0 0
5,000,000 3,2!3,307 0 0
5,000,000 !!,433,620 0 0
NOTE 15 OTHER ASSETS
(a) Curreht
Prepaynenls 34!,795 46!,652 0 94,6!3
Tern Deposils !33,006 236,702 0 50,000
524,30! 693,354 0 !44,6!3
32 32 32 32 32
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 16 ACCOUNTS PAYABLE 8 BORROWlNGS
(a) Current - Accounts Payable
Trade Credilors 2,797,432 2,!39,923 0 0
Olher Credilors 2,947,353 3,333,693 0 0
5,745,340 5,573,626 0 0
Borrowings
Bank Overdrall 732,973 0 0 0
Anounl Payable lo Shareholders 530,7!3 357,300 530,7!3 357,300
!,263,69! 357,300 530,7!3 357,300
(b) Non-current - Borrowings
Anounl Payable lo Conlrolled Enlilies 0 0 3,436,537 4,0!0,!59
7,009,03! 6,436,426 4,0!7,305 4,367,959
The Bank ol elbourne provides an overdrall lacilily ol $300,000 which is secured by a orlgage Debenlure over lhe assels and
underlakings ol lhe Chiel Enlily and ils subsidiaries. There is no nalerial Auslralian dollar equivalenl ol anounls which are nol
elleclively hedged.
NOTE 17 PROVlSlONS
(a) Current
Provision lor Unearned ncone 7,377 !5,425 0 0
Provision lor Enployee Enlillenenls 409,634 25!,402 0 0
4!7,56! 266,327 0 0
(b) Non-current
Provision lor Enployee Enlillenenls 332,994 !97,346 0 0
332,994 !97,346 0 0
750,555 464,673 0 0
NOTE 1S SHARE CAPlTAL
lssued Capital
22,!64,560 Ordinary Shares lully paid, |!999: !7,737,323 shares) 22,595,763 0 0 0
Options
2,432,630 oplions |!999 !,434,643) 0 0 0 0
300,000 Enployee Oplions issued al a price ol !0 cenls 0 30,000 0 30,000
220,000 Unquoled Enployee Oplions |!999 : !60,000) 0 0 0 0
0 30,000 0 30,000
33 33 33 33 33
2000 ANNUAL REPORI
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 1S SHARE CAPlTAL |COTUED)
Movements in Share Capital
|a) Ordinary Shares
During lhe year:
|i) !,500,000 ordinary shares were issued by way ol a privale placenenl al a price ol $3.05 per share
|ii) 350,000 ordinary shares were issued by way ol a privale placenenl al a price ol $2.00 per share
|iii) !,733,3!3 ordinary shares were issued by way ol conversion ol oplions al a price ol $0.75 per share
|iv) !3!,239 ordinary shares were issued by way ol lhe Enployee Share Acquisilion Schene al a price ol $2.60 per share
|v) 27,965 ordinary shares were issued by way ol lhe Enployee Share Acquisilion Schene al a price ol $3.40 per share
|vi) !4,670 ordinary shares were issued by way ol lhe Enployee Share Acquisilion Schene al a price ol $3.50
|vii) 20,000 ordinary shares were issued lo Slall oplion holders al a price ol $0.60 per share
|b) Oplions
|i) 30,000 unlisled Enployee Oplions were issued al an exercise price ol $2.60 pursuanl lo lhe Fedllex Enployee Oplion Plan.
These oplions expire on 3 Augusl 2004. All lhese oplions renain oulslanding al lhe dale ol lhis reporl
|ii)!,997,350 oplions were issued al an exercise price ol $3.50 and expiring on 3! Decenber 2002 as a one lor len bonus issue
lo all Shareholders on 23 February 2000.
|iii) 500,000 oplions were issued al an exercise price ol $3.50 and expiring on 3! Decenber 2002 in conjunclion wilh lhe
placenenl ol lhe !,500,000 shares al a price ol $3.05 lo Thislle Ply Lld.
|iv) During lhe year !,3!7,933 oplions were exercised.
|c) Fedllex Enployee Share Acquisilion Schene and Fedllex Enployee Oplion Plan
On !5 Seplenber !993, al an exlraordinary general neeling, lhe shareholders ol Fedllex Holdings Lld resolved lo adopl lhe
Fedllex Enployee Share Acquisilion Schene and lhe Fedllex Enployee Oplion Plan. Oplions are allocaled lo enployees based
on seniorily wilh anagenenl discrelion pernissible.
The lerns ol lhe Enployees Share Acquisilion Schene provide lor loans lo eligible enployees ol up lo 95 ol lhe issue price
ol shares in Fedllex Holdings Lld, repayable in live years. The lerns ol lhese loans provide, anongsl olher lhings, lhal lhe linal
anounl payable shall nol exceed lhe narkel value ol lhe shares purchased under lhe loan arrangenenl.
34 34 34 34 34
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 19 SHARE PREMlUM RESERVE
Share Preniun Feserve 0 0 0 0
ovenenls in Share Preniun Feserve
Opening Balance 0 407,292 0 407,292
Transler ol balance as al ! July !993 lo lhe Share Capilal
Accounl lo rellecl lhe abolilion ol lhe concepls ol par
value and share preniun. 0 |407,292) 0 |407,292)
Closing Balance 0 0 0 0
NOTE 20 LEASE COMMlTMENTS
Operating Lease
Operaling Lease Connilnenls Payable nol laler lhan one year 5!9,7!3 244,3!4 0 0
Laler lhan one year bul no laler lhan lwo years 3!2,993 237,!7! 0 0
Laler lhan lwo years bul nol laler lhan live years !32,943 !55,725 0 0
!,0!5,664 637,2!0 0 0
NOTE 21 SUPERANNUATlON
The econonic enlily has arranged group superannualion plans wilh Tower Lile and FA Lile whereby lhe enployee and lhe enployer
conlribule varying anounls ol superannualion, depending on an enployee's renuneralion package. n olher cases enployees have
noninaled olher lunds lo which lhe econonic enlily conlribules al lhe direclion ol lhe enployee.
n addilion, lhe econonic enlily had during lhe year ended 30 June !999 a slalulory responsibilily lo conlribule 7 ol an
enployee's salary, which is also paid lo a nunber ol lunds as direcled by each enployee.
All ol lhe econonic enlilies' responsibililies in respecl lo superannualion connilnenl relaling lo lhe year ended 30 June 2000 have
been discharged. All relevanl Superannualion lunds are Accunulalion Funds and accordingly lhere is no unlunded liabilily as al
lhis dale.
NOTE 22 CONTlNGENT LlABlLlTlES
Redflex Systems (Malaysia) Sdn Bhd
During lhe year ended 30 June !994, Fedllex Liniled enlered inlo a loan agreenenl wilh a lorner subsidiary conpany, Fedllex
|alaysia) Sdn Bhd, whereby $!.3 nillion would be payable in respecl ol lhe licensing ol cerlain lechnology, wilh paynenl
conlingenl upon lhe realising by Fedllex Liniled ol a disposal on sinilar lerns. Unlil such disposal occurs, no assel or liabilily lor
lhe alorenenlioned loan will be broughl lo accounl lor accounling purposes.
lncome Tax and Carried Forward Tax Losses (refer to Note 4)
lndemnity Guarantees 30-Juh-00 30-Juh-99
The Auslralia G ew Zealand Banking Croup Lld has issued indennily
guaranlees againsl which Lellers ol Sel Oll are in place: !23,!94 50,000
The alional Auslralia Bank Liniled has issued ndennily Cuaranlees
againsl which Lellers ol Sel Oll are in place: !!0,0!5 !!3,7!!
35 35 35 35 35
2000 ANNUAL REPORI
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 22 CONTlNGENT LlABlLlTlES |COTUED)
Structured equity funding for Visible Voice Unit Trust
Fedllex Holdings Lld |Fedllex) enlered inlo a licensing arrangenenl wilh a Syndicale ol inveslors on 29 June 2000 which provided,
anongsl olher lhings:
!. a one-oll lour year license lee paid lo Fedllex ol $!0 nillion whereby lhe Syndicale is licensed cerlain righls over lhe Visible
Voice sollware. This anounl is held on deposil lo secure linanciers lo lhe Syndicale and Fedllex's obligalions per |4) below.
2. paynenls ol $2.6 nillion by lhe Syndicale lo Fedllex lo connercialise Visible Voice during lhe years ended 30 June 2000 and 30
June 200!, and
3. royally paynenls by Fedllex over lhe lern ol lhe license ol a nininun ol $375,000, and up lo !2 ol gross sales applicable lo
cerlain geographical regions, 40 ol which relale lo Fedllex,
4. an obligalion in lhe lorn ol a pul oplion lor Fedllex lo subscribe lor equily in lhe Syndicale, lor an anounl ol no nore lhan lhe
proceeds ol |!) above,
5. lhe issue ol 500,000 oplions lo acquire 500,000 shares in Fedllex Holdings Lld, exercisable al $5.00 per converled oplion
belween 30 June 2004 and 30 June 2005.
n relalion lo lhe above,
!. conlingenl liabililies exisl in lhe lorn ol :-
|a) nininun royallies payable by Fedllex ol $375,000, belween 30 June 2000 and 30 June 2004, and
|b) clains lhal nay be subslanlialed by lhe Syndicale in circunslances where Fedllex is in breach ol lhe agreenenls enlered
inlo.
2. lhe cash proceeds ol $!0 nillion relerred lo in |!) above and accrued inleresl has nol been booked as incone or as an assel in
lhe books ol Fedllex as a corresponding liabilily exisls lor lhe pul oplion relerred lo in |4) above. Al no line, barring any breach
ol lhe agreenenl, will Fedllex's obligalions exceed lhe anounl ol cash on deposil and accordingly no conlingenl liabilily exisls
in lhis regard.
Recovery of loans to employees under the Employee Share Acquisition Plan
Fedllex Holding Lld has nade loans lo eligible enployees lo assisl in lhe acquisilion ol shares in Fedllex. These loans have been
nade pursuanl lo lhe Enployees Share Acquisilion Plan, approved by shareholders.
o adjuslnenl has been nade lor lhe polenlial non-recovery ol parls ol lhese loans, which nay arise where lhe anounl due is less
lhan lhe narkel value ol lhe shares acquired, and lor which lhe loan was provided. Al 30 June 2000, lhis anounl would polenlially
apply lo:
loans associaled wilh lhe issue ol !7!,573 shares where lhe shares were issued al $2.60
loans associaled wilh lhe issue ol 27,965 shares where lhe shares were issued al $3.50.
Based on a narkel price ol $2 as al lhe dale ol lhe preparalion ol lhese accounls, lhe nel polenlial reduclion lo enployee's loans is
$!02,946 and $4!,947, respeclively, should all ol lhese loans becone repayable al lhal line.
lnsurance Bond
CO Auslralia Liniled has provided lhe conpany an insurance bond lacilily on an unsecured basis. Bonds issued al 30 June 2000
anounl lo $!,!30,000.
36 36 36 36 36
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 23 STATEMENT OF OPERATlONS BY SEGMENTS
|a) nduslrial Segnenls |a) nduslrial Segnenls |a) nduslrial Segnenls |a) nduslrial Segnenls |a) nduslrial Segnenls
During lhe year ended 30 June 2000, lhe Econonic Enlily operaled nainly in lhe lechnology segnenl.
|b) Ceographical Segnenls
During lhe year ended 30 June 2000 lhe Econonic Enlily operaled principally in lhree geographical segnenls, being Auslralia, lhe
iddle Easl and lhe Uniled Slales ol Anerica.
Australia USA Middle East Total
$ $ $ $
Operaling Fevenue 7,!93,3!9 4,0!3,355 !,56!,000 !2,773,674
Olher ncone 339,325 0 0 339,325
Tolal revenue 7,533,644 4,0!3,355 !,56!,000 !3,!63,499
Consolidaled operaling prolil |loss) belore incone lax |!5,2!4,339) 396,39! 0 |!4,3!7,943)
Tolal assels !0,604,45! |264,!63) 0 !0,340,233
NOTE 24 RELATED PARTY TRANSACTlONS
Transaclions belween relaled parlies are on nornal connercial lerns and condilions unless olherwise slaled. These lransaclions
relale lo lhe day lo day aclivilies belween conpanies in lhe Croup and lhe lollowing anounls represenl lhe nel novenenls in
loans during lhe year.
Provision ol inleresl lree unsecured loans
lron relaled enlilies 0 0 3,436,537 4,0!0,!59
lo relaled enlilies 0 0 !6,25!,375 7,302,059
The Ullinale holding conpany is Fedllex Holdings Liniled.
There were novenenls in direclors' shareholdings during lhe linancial year as lollows: Shares Shares
From to
Fussell C Baird
increased his relevanl inleresl 323,!70 347,330
Crahan v Davie
increased his relevanl inleresl 927,377 965,247
Edward Bulcher
increased his relevanl inleresl 6,200 !9,300
Fob Ciolli
increased his relevanl inleresl !6!,000 !66,346
37 37 37 37 37
2000 ANNUAL REPORI
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 24 RELATED PARTY TRANSACTlONS |COTUED)
Equily inslrunenls ol direclors ol lhe chiel enlily, including direclor relaled enlilies, al balance dale
Optiohs over
Ordihary Shares (a) Ordihary Shares (a)
Edward v Bulcher !9,300 6,200 !,930 3,!00
Fussell C Baird 347,330 323,!70 34,736 5!,970
Crahan v Davie 965,247 927,377 !!3,500 63,!67
Fob Ciolli !66,346 !6!,000 !6,635 20,000
alcoln Fraser 0 0 0 0
John v Cilberl 0 0 0 0
Barbara Yeoh 0 0 0 0
All ol lhe varialions in equilies during lhe year ended 30 June 2000 relaled lo equilies boughl and/or sold on lhe narkel, excepl lor
lhose shares acquired by essrs F Baird, F Ciolli and C Davie via lhe Fedllex Enployee Share Acqusilion Schene relerred lo in
ole !3 |d), and shares acquired lhrough exercising oplions.
38 38 38 38 38
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 25 FlNANClAL lNSTRUMENTS
a) Terms, cohditiohs ahd accouhtihg policies
The econonic enlily's accounling policies, including lhe lerns and condilions ol each call ol linancial assel, linancial liabilily and
equily inslrunenl, bolh recognised and unrecognised al lhe balance dale, are as lollows:
Fecoghised fihahcial ihstrumehts Accouhtihg Folicies Terms ahd Cohditiohs
|i) Financial Assels
Feceivables lrade Trade receivables are carried al noninal Credil sales are on 30 day lerns.
anounls due less any provision lor
doubllul debls. A provision lor doubllul
debls is recognised when colleclion ol
lhe lull noninal anounl is no longer
probable.
Feceivables relaled enlilies Anounls |olher lhan lrade debls) Loans are al call and non inleresl
bearing receivable lron relaled parlies bearing
/enlilies are carried al noninal anounls
due. nleresl |when charged) is laken up
as incone on an accrual basis.
Feceivables non relaled enlilies Anounls |olher lhan lrade debls) Loans and inleresl oulslanding, il any,
receivable lron non relaled parlies are al call.
/enlilies are carried al noninal anounls
due. nleresl |when charged) is laken up
as incone o n an accrual basis.
Shorl lern deposils Shorl lern deposils are slaled al lhe Shorl lern deposils have an average
lower ol cosl and nel realisable value. nalurily ol 56 days and elleclive inleresl
nleresl is recognised in lhe prolil and rales ol belween 3.0 and 4.25.
loss when earned
Lisled Shares Lisled shares are carried al lhe lower ol
cosl or recoverable anounl.
Unlisled Shares Unlisled shares are carried al lhe lower
ol cosl or recoverable anounl.
|ii) Financial Liabililies
Bank overdralls The bank overdralls are carried al lhe nleresl is charged al lhe bank's
principal anounl. nleresl is charged as benchnark rale. Delails ol lhe securily
an expense as il accrues. over lhe bank overdralls is sel oul in
ole !6.
Trade Credilors and accruals Liabililies are recognised lor anounls lo Trade liabililies are nornally sellled
be paid in lhe lulure lor goods and belween 30 and 60 days.
services received, whelher or nol billed
lo lhe econonic enlily.
Accounls payable relaled enlily Loans lron relaled parlies are carried al Loans are al call and non inleresl
lhe principal anounl. nleresl |when bearing.
charged by lhe lender) is laken up as an
expense on an accrual basis.
Anounls payable lo Shareholders Loans lron shareholders are carried al Loans are al call and non inleresl
lhe principal anounl. nleresl |when bearing.
charged by lhe lender) is laken up as
an expense on an accrual basis.
|iii) Equily
Ordinary Shares Ordinary share capilal is recognised al The conpany is aulhorised lo issue up lo
lhe anounl paid-up. 200,000,000 ordinary shares. Delails ol
shares issued and lhe lerns and
condilions ol oplions oulslanding over
ordinary shares al balance dale are sel
oul in ole !3.
39 39 39 39 39
2000 ANNUAL REPORI
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 25 FlNANClAL lNSTRUMENTS |COTUED)
b) lhterest Fate Fisk Floatihg lhterest Fate Noh lhterest bearihg
30-Jun-00 30-Jun-99 30-Jun-00 30-Jun-99
|i) Financial Assels $ $ $ $
Cash 94,373 5,303,309 0 0
Feceivables lrade 0 0 2,425,996 3,009,959
Feceivables relaled enlilies 0 0 0 0
Shorl Tern deposils !33,006 236,702 0 0
Feceivables Olher Corporalions !,769,!35 !,6!3,063 602,522 !22,!74
Tolal Financial Assels 2,046,569 7,!53,574 3,023,5!3 3,!32,!33
Bank overdralls 732,973 0 0 0
Trade Credilors and Accruals 0 0 5,745,340 5,573,626
Anounl payable lo Shareholders 0 0 530,7!3 357,300
Tolal Financial Liabililies 732,973 0 6,276,053 6,436,426
The weighled average inleresl rale is 3.75
c) Net Fair Values Carryihg amouht per balahce sheet Aggregate het fair value
30-Jun-00 30-Jun-99 30-Jun-00 30-Jun-99
|i) Financial Assels $ $ $ $
Cash 94,373 5,303,309 94,373 5,303,309
Feceivables lrade 2,425,996 3,009,959 2,425,996 3,009,959
Feceivables relaled enlilies 0 0 0 0
Feceivables non relaled enlilies !,769,!35 !,6!3,063 602,522 !22,!74
Shorl Tern deposils !33,006 236,702 !33,006 236,702
Lisled Shares 0 0 0 0
Tolal Financial Assels 4,472,565 !0,!63,553 3,305,902 3,672,644
Bank overdralls 732,973 0 732,973 0
Trade Credilors and Accruals 5,745,340 5,573,626 5,745,340 5,573,626
Anounl payable lo Shareholders 530,7!3 357,300 530,7!3 357,300
Tolal Financial Liabililies 7,009,03! 6,436,426 7,009,03! 6,436,426
d) Credit Risk Exposure
The consolidaled enlily's naxinun exposures lo credil risk al balance dale in relalion lo each class ol recognised linancial assels,
is lhe carrying anounl ol lhose assels as indicaled in lhe balance sheel.
40 40 40 40 40
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NOTE 26 SUBSEOUENT EVENTS
On Augusl !!, 2000 lhe Conpany issued a prospeclus ollering shareholders a one lor live renounceable righls issue.
The issue price is $!.35 per share.
The righls issue lollows lhe announcenenl ol a placenenl ol 4 nillion shares al an issue price ol $2.,00 per share ralilied by
Shareholders al an exlraordinary neeling ol Shareholders held on June 23, 2000.
Bolh equily raising inilialives were nade lo provide working capilal lor lunding lhe inslallalion ol USA Trallic enlorcenenl
conlracls, lo supplenenl lhe Croup's working capilal and posilion lhe Croup lor expansion. Bolh equily raising aclivilies are
expecled lo generale $!7.44 nillion nel.
NOTE 27 OUTSlDE EOUlTY lNTEREST
Feconcilialion ol oulside equily inleresl in conlrolled enlilies:
Opening Balance 574,033 602,203 0 0
Share ol operaling prolil |loss) 67,000 |23,!25) 0 0
Closing Balance 64!,033 574,033 0 0
During lhe previous linancial year, Fedllex Holdings Liniled increased ils equily in The 2!
sl
Cenlury Connunicalions Conpany Unil
Trusl lron 49 lo 67. The Trusl was renaned lo lhe Visible Voice Unil Trusl. All inlerconpany balances have been elininaled on
consolidalion.
NOTE 2S EARNlNGS PER SHARE
Basic earnings per share |76.4) cenls 6.23 cenls
Diluled earnings per share are nol nalerially
dillerenl lron basic earnings per share.
veighled average nunber ol ordinary shares on
issue used in calculalion ol basic earnings per share. !9,473,!92 !2,4!7,649
41 41 41 41 41
2000 ANNUAL REPORI
|:|-. |: ||- ||a:a:|:| '|:|-n-a|. |:| ||- -:| -a1-1 1 laa- I111 ; ; ; ;
NDEPENDENI AUDIORS REPORI
TO THE MEMBERS OF REDFLEX HOLDlNGS LlMlTED
Scope
ve have audiled lhe linancial reporl ol Fedllex Holdings Liniled lor lhe linancial year ended 30 June 2000, as sel oul on pages !4 lo 40
including lhe Direclors' Declaralion. The linancial reporl includes lhe linancial slalenenls ol Fedllex Holdings Liniled, and lhe
consolidaled linancial slalenenl ol lhe consolidaled enlily conprising lhe conpany and lhe enlilies il conlrolled al year's end or lron
line lo line during lhe linancial year. The conpany's direclors are responsible lor lhe linancial reporl. ve have conducled an
independenl audil ol lhe linancial reporl in order lo express an opinion on il lo lhe nenbers ol lhe conpany.
Our audil has been conducled in accordance wilh Auslralian Audiling Slandards lo provide reasonable assurance whelher lhe linancial
reporl is lree ol nalerial nisslalenenl. Our procedures included exaninalion, on a lesl basis, ol evidence supporling lhe anounls and
olher disclosures in lhe linancial reporl, and lhe evalualion ol accounling policies and signilicanl accounling eslinales. These procedures
have been underlaken lo lorn an opinion whelher, in all nalerial respecls, lhe linancial reporl is presenled lairly in accordance wilh
Accounling Slandards in Auslralia, olher nandalory prolessional reporling requirenenls and slalulory requirenenls, so as lo presenl a
view which is consislenl wilh our underslanding ol lhe conpany's and lhe consolidaled enlily's linancial posilion and perlornance as
represenled by lhe resulls ol lheir operalions and lheir cash llows.
The audil opinion expressed in lhis reporl has been lorned on lhe above basis.
Audit Opinion
n our opinion, lhe linancial reporl ol Fedllex Holdings Liniled is in accordance wilh:
|a) lhe Corporalions Law including:
|i) giving a lrue and lair view ol lhe conpany's and consolidaled enlily's linancial posilion as al 30 June 2000 and ol lheir
perlornance lor lhe year ended on lhal dale, and
|ii) conplying wilh Accounling Slandards and lhe Corporalions Fegulalions, and
|b) olher nandalory prolessional reporling requirenenls.
Ernsl G Young
Sluarl Allord
Parlner
elbourne
Dale: 23 Seplenber 2000
42 42 42 42 42
SHAREHOLDER NFORMAION
STATEMENT OF SHAREHOLDlNG
The direclors slale lhal al 3! Augusl 2000
There were 3,505 holders ol lully paid ordinary shares. The voling righls allached lo lhese shares are such lhal every nenber
presenl in person or represenled by proxy or represenlalive shall, on a show ol hands, have one vole and on a poll every
nenber presenl or by proxy or represenlalive shall have one vole lor every share held.
The dislribulion schedule ol holders ol lully paid ordinary shares is:
Holdihg rahge No of Holders Uhits Ferceht
! !000 !,465 727,905 2.75
!00! 5000 !,442 4,036,533 !5.23
500! !0000 3!2 2,403,750 9.!0
!000! !00000 255 7,736,!43 29.23
!0000! over 3! !!,5!0,224 43.59
3,505 26,4!4,560 !00.00
The nanes and percenlage holding ol lhe lwenly largesl holders ol lully paid ordinary shares are:
Uhits Ferceht
Verlex Bianca oninees Ply Lld !,567,926 5.94
veslpac Cuslodian oninees Liniled !,500,000 5.63
Connonweallh Cuslodial Services Liniled !,220,000 4.62
Perpelual Truslee oninees Liniled !,000,000 3.79
r Crahan Davie 339,69! 3.!3
Silverlene Ply Lld 562,500 2.!3
Connercial oninees ol Auslralia Liniled 4!7,000 !.53
alional oninees Liniled 33!,600 !.26
Landy Consulling Ply Lld 304,000 !.!5
Pernanenl Truslee Auslralia Liniled 29!,500 !.!0
Equily Truslees Liniled 260,755 0.99
Thislle Cuslodians Ply Lld 250,000 0.95
Coningsby oninees Ply Lld 244,323 0.93
Dr Cavan Crillilh 2!!,340 0.30
J v G H L Oonnor Ply Lld 207,633 0.79
Surlpen Ply Lld 200,220 0.76
Dewrang Ply Lld !93,336 0.75
Chase anhallen oninees Liniled !37,634 0.7!
Cilicorp oninees Ply Lld !62,500 0.62
AXA Truslees Liniled |villians Fanily Super Fund) !55,000 0.59
Tolal lop 20 shareholders !0,!!2,5!3 33.32
Fenaining shares !6,302,047 6!.63
26,4!4,560 !00.00
Al 3! Augusl 2000 lhere were 2,767 holders ol oplions over lully paid ordinary shares, exercisable on or belore 3!
sl
Decenber
2002 al an exercise price ol $3.50.
43 43 43 43 43
2000 ANNUAL REPORI
SHAREHOLDER NFORMAION
The dislribulion schedule ol oplion holders is:
! !000 2,5!6 544,640 2!.90
!00! 5000 !33 4!7,27! !6.30
500! !0000 22 !63,496 6.30
!000! !00000 26 695,433 23.00
!0000! over 2 656,790 26.50
2,754 2,432,630 !00.00
The nanes and percenlage holding ol lhe lwenly largesl holders ol oplions over ordinary shares exercisable on or belore 3!
Decenber 2002 are
Uhits Ferceht
Thorney Holdings Ply Lld' 500,000 20.!4
Verlex Bianca oninees Ply Lld !56,790 6.32
Connonweallh Cuslodial Services Liniled 97,000 3.9!
r Crahan Davie 35,960 3.46
Silverlene Ply Lld 56,250 2.27
Connercial oninees ol Auslralia Liniled |P. vood A/c) 52,200 2.!0
Connercial oninees ol Auslralia Liniled 4!,700 !.63
Landy Consulling Ply Lld 30,400 !.22
Coningsby oninees Ply Lld 22,730 0.92
J v G H L O'Connor Ply Lld 20,760 0.34
Alan G axine Baker 20,270 0.32
Surlpen Ply Lld 20,020 0.3!
AXA Truslees |Slone Fanily Fund) 20,000 0.3!
T. sbel and C. Skipper 20,000 0.3!
Bellis Auslralia Superlund 20,000 0.3!
Dewrang Ply Lld !7,940 0.72
Saralan Superlund A/c !7,!43 0.69
Cilicorp oninees Ply Lld !6,250 0.65
Fobbins Superlund A/c !6,000 0.64
. varhall Superlund A/c !5,750 0.63
Tolal lop 20 oplion holders !,247,!63 50.25
Fenaining oplions !,235,5!7 49.75
2,432,630 !00.00
Al 3! Augusl 2000 lhere were !! holders ol unlisled Enployee Oplions over ordinary shares, exercisable belore dales and al
prices as per lhe Enployee Oplion Plan. The dislribulion schedule ol oplion holders is:
!000! !00000 !! 220000 !00.00
Al 3! Augusl 2000 lhere were 5,232,9!2 righls lisled in relalion lo a one lor live Fenounceable Fighls ssue al $!.35 per share.
The righls allach in direcl proporlion lo ordinary shareholder's holdings. n lhe evenl lhe righls are nol laken up lhe issue is lully
underwrillen by Johnson Taylor Corporale Liniled.'
The regisler ol securilies is kepl by Conpulershare Fegislry Services Ply Lld al Level !2, 565 Bourke Slreel elbourne.
44 44 44 44 44
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45 45 45 45 45
2000 ANNUAL REPORI
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REDFLEX HOLDNGS LMIED

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