31 December 2000

singleton group limited 2000annual report[

creativity excellence professionalism leadership effectiveness

..

..

..

..

..

..

..

..

..

..

..

..

..

]

No. 08 H i s t o r y a n d F i n a n c i a l P e r f o r m a n c e

02

1]

03

04No.

No.

No.

No.

No.

No.

05

06

10

one

]contents

C o r p o r a t e D i r e c t o r y

C h a i r m a n ’ s R e p o r t

G r o u p M a n a g i n g D i r e c t o r ’ s R e p o r t

J o h n S i n g l e t o n ’ s R e p o r t

S i n g l e t o n G r o u p M e m b e r C o m p a n i e s

F i n a n c i a l R e p o r t

No. 39 S i n g l e t o n O g i l v y & M a t h e r R e p o r t

annual report 2000

2[ two

[ directorycorporate

Directors

Mark Carnegie (Chairman)

John Singleton

Russell Tate

William Currie

Geoff Levy

Anne Keating

Paul Richardson

Company Secretary

Alex Walker

Auditors

Horwath Sydney Partnership

Solicitors

Freehills

Registered Office

Level 18, Darling Park

201 Sussex Street, Sydney NSW 2000

Telephone: (02) 9373 6333

Website: www.singo.com.au

ABN: 84 001 657 370

Share Register

Computershare Investor Services Pty Limited

Level 3, 60 Carrington Street, Sydney NSW 2000

Telephone: (02) 8234 5000.

Annual General Meeting

The Annual General Meeting will be held at 10:00am

on Friday, 4 May 2001 at the Company’s office,

Level 18, 201 Sussex Street, Sydney NSW 2000.

Dividend

Directors have recommended a final dividend of

4.2 cents per share, fully franked, payable on

11 May 2001. Transfers close at 5:00pm on

Friday, 4 May 2001.

3]three

I am pleased again to have to eat humble pie. The performance

of the many people who work in the Singleton Ogilvy & Mather

Group proved that I should not make forecasts especially about the

future performance of this company. We had an outstanding last

year and all shareholders owe a debt of gratitude to those who made

it happen. On your behalf, I want to thank all those involved in

producing the great result.

I especially want to thank Russell for an incredible job in a year

when he had open-heart surgery. It is a pleasure to serve with him.

Again, I issue my warning that any expectation that the business

can continue to grow as it has in the past defy the laws of economic

gravity. For anyone reading this annual report with a view to buying

shares, I urge you to moderate your expectations of what SGL

shares can produce as a return over the next five years.

In a country like Australia where long term real GDP growth is

likely to be less than 3%, the mathematics of all listed companies

telling you they can grow earnings at 15% is an absurdity. Profits

will not exceed GDP and they will be hard pressed to materially

exceed the GDP growth rate over the long-term. You may hope for

more in an individual case but you can’t expect it in the aggregate.

I recognise media does continue to grow as a share of GDP.

However, a realistic expectation would be for it to grow nominally

at 6%-9% over the next five years. In addition, you have to factor

in the real chance of a recession where it will shrink. If we can grow

earnings in the double digits over the next five years, the

management will have done a fantastic job.

By contrast, the background for our investment in Indonesia is

much brighter. Trend media growth rates could easily be in the 20%

range for the next 20 years and we would still have advertising

spending be less than US$25 per capita. All the reasons the Asian

growth miracle attracted the investing hordes in the 1990s remain;

it’s just that the short-term outlook is so uncertain and the risks that

were there all along have tripped some people up. We reiterate our

view that this investment should provide very attractive returns but

that there is a not insignificant risk that political instability will

prevent the economic characteristics of the business being reflected

in our investment returns.

From investments to paying for them. We made two issues of

shares during the year and the second one seemed to create some

amount of friction with the investment community. We informed

those taking the shares that in addition to the share issue some

insiders were selling simultaneously. We felt that in contrast to the

majority of people who only notify of sales by insiders after they

have been completed advising purchasers in advance was a step

forward for the share market in terms of disclosure. Taking flack

for trying to improve standards of disclosure showed us again why

we take the view we do about not ever relying on our institutional

owners to do the rational thing when asked to make a decision

which will affect the company.

As in the past we will try to act in a way that maximises the

long-term shareholder value we can create and be true to ourselves

in our ethical standards. For you as a shareholder it is important to

understand that we run the business and our collective capital

account on the basis that we are reporting to a permanent

conservative owner of an existing share in the company who is

focussed on absolute rather than relative returns on investment.

We avail ourselves of financing windows as they appear in order to

create incremental value for that shareholder whilst retaining a

conservative capital structure.

We have all done well in a growing economy. Now, our challenge

is to do so in a stalled or shrinking one. Hopefully, we will be able

to perform as we did in the last recession due to the fact that when

the economy gets tough the artistic aspirations of the medium are

de-emphasised and the effectiveness of the ads seem to matter again.

chairman’s[ report

ear shareholders,D

Mark Carnegie

In last year’s Annual Report I said that as a company we were

only just beginning to realise our true potential. Twelve months

later and after another growth in profits of over 50%, I am more

convinced than ever that our ability to continue to develop and

grow this company is going to be limited only by how far and how

wide we wish to aim.

Success is addictive. The spectacular growth we have enjoyed

in the last few years does not lead us to think we should now settle

for consolidating our position. On the contrary, it means that

we shall be content with nothing less than continued and

comparable success, relative to general economic and specific

market conditions, in the years ahead.

Success is also contagious and attracts people who want to

be winners. We already have a wonderfully talented management

team and staff who both thrive on, and understand how we have

achieved, our success. Provided we can maintain our unique culture

and as we grow pass it on to every new generation of staff, I can

see no boundaries to our potential.

I cannot promise our shareholders continued operating profit

growth of 50% plus. I can promise them a company which will

not be satisfied with its performance unless its Australian and

NZ operations are continuing to set international standards

in terms of financial returns and marketplace effectiveness. And

a company with which our staff, our clients, our suppliers and our

shareholders are proud to be associated.

group managing director’s

Russell Tate

4[ four

[ report

5]five

It’s probably about time I let you in on the secret herbs & spices

of our Group.

A lot of people talk about surrounding themselves with people

better than themselves.

I have actually done it.

Perhaps the task was considerably easier for me than most but

nevertheless it has been achieved and because of that the

achievements of our Group have been made possible.

I met our Chairman, Mark Carnegie, when he was a very junior

player in the Conrad Black takeover of Fairfax a bit over 10 years

ago.

I realised then the superiority of his intellect and his integrity in

the midst of other supposed international business gurus and was

quick to harness it to the group’s advantage.

Unfortunately, no one is more aware of his intellectual

superiority than Mark.

Fortunately, you don’t have to suffer the arrogance but just sit

back and enjoy the fruits of his superiority.

On the other hand, no one is less aware of their highly superior

ability than our CEO, Russell Tate.

He has run this company since we went public in 1994.

He is a natural leader in that he was both given and assumed

responsibility for the Group without a discussion.

It just happened.

And all the good things for our company have just kept

happening ever since.

Among the CEO’s of other major public companies of the past

decade no one, not even my dear old friend Gerry Harvey, is more

deserving of our respect. In every field of business and human

decency.

I would trust Russell with my life - come to think of it, I have.

Russell’s greatest problem in this next decade will be to find

people better than him to surround himself with.

We had all better wish him well.

It’s probably about time I let you in on the secret herbs & spices

of our Group.

A lot of people talk about surrounding themselves with people

better than themselves.

I have actually done it.

Perhaps the task has been considerably easier for me than most

but nevertheless it has been achieved and because of that the

extraordinary success of our Group has been made possible.

I met our Chairman, Mark Carnegie, when he was a very junior

ankle-biter during the Conrad Black takeover of Fairfax a bit over

10 years ago.

I quickly realised the superiority of his intellect and his

integrity in the midst of all the other supposed advisory gurus

(local and international). I was quick to harness his abilities to our

Group’s advantage.

Unfortunately, no one is more aware of his intellectual

superiority than Mark.

Fortunately, you don’t have to suffer the arrogance but just sit

back and enjoy the fruits of his intellectual labours.

On the other hand, no one is less personally aware of their

highly superior ability than our CEO, Russell Tate.

He and he alone has run this company since we went public

in 1994.

He is a natural leader in that he was both given and assumed

responsibility for the Group without any kind of discussion I can

ever recall.

It just happened.

And all the good things for our company have just kept

happening ever since.

Among the CEOs of other major public companies of the past

decade, no one, not even my dear and very, very old friend Gerry

Harvey, is more deserving of our respect.

I would trust Russell with my life – come to think of it, I have.

Russell’s greatest problem in this next decade will be to find

people better than him to surround himself with.

We had all better wish him well.

john singleton’s

John Singleton

[ report

SINGLETON OGILVY & MATHER

Singleton Ogilvy & Mather operates full

service advertising agencies in Sydney,

Melbourne and Auckland. With access

to Singleton Group members and the

Ogilvy & Mather Worldwide network,

SOM has the resources to meet, and to

surpass, client’s expectations. SOM

provides sales-focused advertising,

communication, creative and production

services, across all media.

SINGLETON OGILVYONE

As direct marketing specialists,

Singleton OgilvyOne works to

guarantee that every idea translates to

creative brand-true communications.

This knowledge is acquired from data

mining and analysis, interactive

technology and media teleservices.

Singleton OgilvyOne ensures more

loyal customers to some of the world’s

most recognised brands.

SINGLETON OGILVYINTERACTIVE

Member of one of the top 10 interactive

agencies in the world, Singleton

OgilvyInteractive is ideally placed to

offer advice and solutions to any

organisation’s interactive requirements.

SOI brings together a unique

combination of brand awareness,

marketing and technical skills.

PROMOTIONAL CAMPAIGNS GROUP

Promotional Campaigns Group is a

promotional marketing consultancy. With

an international network of 18 offices,

PCG offers a combination of promotional

disciplines including sales promotion,

retail consultancy, trade marketing, design,

packaging and sponsorship.

ETHNIC COMMUNICATIONS

Etcom is the only fully integrated

multicultural marketing agency in

Australia. Etcom is committed to

understanding cultural diversity and its

relevance in communication. Etcom

targets the 20% of the Australian

community who speak a language other

than English at home.

MINDSHARE

MindShare is the world's first true media

investment management company.

MindShare sees a clients’ media budget as

an investment to be carefully managed, to

build the value of their clients’ brands and

the growth of their business.

DESIGN DIRECT

As a fast track art studio, Design Direct

provides their clients with cost effective,

time critical marketing solutions.

Design Direct is one-stop shopping for

fully integrated direct response

assignments offering services like

concepts, copywriting, typography and

project management.

singleton group[ member companies

6[ six

OGILVY PUBLIC RELATIONS

Ogilvy PR is one of the world’s largest

strategic communications firms. Through

senior-level counsel and hands-on

implementation Ogilvy PR helps solve

client challenges through spirited

partnership, innovative programs and

a thorough understanding of business

and public affairs.

IMPACT

Impact Employee Communications is a

specialist in communicating important

strategic initiatives with employees to

win their support. Impact Employee

Communications provides a full service

solution to clients - from research and

strategic development through to the

complete implementation of employee

communication programs.

STAR ADVERTISING

Star is a purpose-built advertising agency

in Sydney and Auckland with a difference.

Seasoned industry professionals work

only on their designated business with no

sharing of clients to ensure focus,

commitment and results.

COMMONHEALTH AUSTRALIA

CommonHealth Australia is a healthcare

marketing and advertising agency.

CommonHealth Australia covers the

entire spectrum of healthcare marketing

from ethical and direct-to-consumer

advertising to professional and patient

education to strategic planning and

relationship marketing.

WEBSITE DEVELOPMENT GROUP

Web Development Group (WDG) is one

of the largest and most successful

internet development operations in

Australia. WDG's core business is web

development, planning and implementation.

WDG’s size and background in a range

of diverse projects positions it as a

supplier of choice for internet projects

for the largest organisations in Australia.

FAME ADVERTISING

Fame Advertising believes you need to

be famous for something. Even if that

something is emotional or intangible.

That’s why Fame concentrates on

creating strategies and campaigns to

make their clients famous. The fact that

these advertisements may appear on a

pavement, a TV set, poster or website

does not change the objective. It simply

changes the media.

IGNITE PRODUCTIONS

Ignite Productions offers TV, radio and

cinema production capabilities on any

scale. From advice to development and

completion of initial creative ideas,

Ignite can manage every facet of their

client’s audio/visual requirements.

ANOP RESEARCH SERVICES

ANOP Research Services became a group

member in January 2000. Founded in

1971 by Rod Cameron, ANOP is one of

Australia's foremost strategic marketing

research consultancies, offering a full suite

of qualitative and quantitative solutions.

member companiessingleton group[

7 ]seven

history and financial performance[

1985

• John Singleton Advertising commences business

1994

• John Singleton Advertising Limited is admitted to the

official list of the Australian Stock Exchange, at an

initial share price of 38 cents ($1.90 pre adjustment

for the 2000 4:1 bonus issue)

1997

• The Singleton Direct and Genesis Advertising

businesses are established

1998

• John Singleton Advertising merges with the Australian

and New Zealand operations of Ogilvy & Mather

Worldwide to form Singleton Ogilvy & Mather (SOM)

• Singleton OgilvyOne, Ethnic Communications,

Promotional Campaigns and CommonHealth also

join the Group as a result of the merger

• SOM establishes Ignite Productions

1999

• SOM establishes the Singleton OgilvyInteractive

business

2000

• SGL acquires interests in ANOP Research Services,

Impact Employee Communications, and Web

Development Group

• SOM acquires interests in Mindshare, Star

Advertising and Fame Advertising

• SGL & WPP establish the Ogilvy Public Relations

business in Australia

1994 1995 1996 1997 1998 1999 2000

Advertising Earnings Per Share

vs Dividends Per Share

0.0

2.0

4.0

Dividends per Share (¢)

6.0

8.0

10.0

12.0

Earnings per Share (¢)

1994 1995 1996 1997 1998 1999 2000

Operating Profit Before Tax vs

Operating Profit After Tax

($millions)

Operating Profit after tax

Operating Profit before tax

0

2

4

6

8

10

12

14

16

18

20

8[ eight

advertising and communications

history and financial performance[

9 ]nine

Media

With a wealth of experience and industry knowledge at a senior

level, Singleton Group is uniquely positioned to make strategic

media investments which add to shareholder value. The board has

experience across the media spectrum, encompassing TV, radio,

film, cinema, publishing, outdoor, media buying, media selling,

media programming, and of course, advertising.

In the past, Singleton Group and its shareholders have enjoyed

the outstanding investment returns from the investment in

Channel TEN. The current investment in SCTV has tremendous

potential, to which Singleton Group can contribute some of its

experience. In the future, Singleton Group will continue to

examine potential media investments, and provided they are

financially accretive, may make further investments.

Channel Ten

Singleton Group is proud of the returns achieved on its investment

in Channel TEN. With an original investment of $4.5 M made in

November 1993, SGL received the equivalent of $9.4 M in fully

franked dividend income in the three years to November 1996. The

investment was sold in November 1996 realising an after tax profit

on sale of $34.6 M. SGL also received $1.5 M in interest income

(after tax) on investing the sale proceeds, before they were ultimately

returned to shareholders, together with a capital return of $5.2M.

SCTV

PT Surya Citra Televisi is the third largest television network in

Indonesia with an audience reach of approximately 123 million

people. In a market where per capita TV advertising spend is $US1

compared to $US75 in Australia, Singleton Group is confident

that SCTV will be able to grasp the opportunities available to it,

through a growing TV advertising market, deregulation of

Indonesian industry, and increased sophistication in marketing

and programming techniques.

Singleton Group has examined the potential risks, including

political and currency risk, and decided, based on the economics of

the transaction, that the risk is affordable, and the upside exciting.

Investmentby SGL

Total aftertax return

DividendIncome

Profiton Sale

Interest onSale Proceeds

The Investment in Channel Ten($millions)

0

5

10

15

20

25

30

35

40

45

50

1996 1997 1998 1999 2000

SCTV Net Revenue($A millions)

0

20

40

60

80

100

120

media

11

17

18No.

No.

No.

No.

No.

No.

19

20

35

]contentsfinancial report

D i r e c t o r ’ s R e p o r t

P r o f i t a n d L o s s S t a t e m e n t s

B a l a n c e S h e e t s

S t a t e m e n t s o f C a s h F l o w s

N o t e s t o t h e F i n a n c i a l S t a t e m e n t s

D i r e c t o r ’ s D e c l a r a t i o n

No. 36 I n d e p e n d e n t A u d i t R e p o r t

No. 37 A d d i t i o n a l I n f o r m a t i o n

annual report 2000

10[ ten

[ Singleton Group Limited and Controlled Entitiesdirectors’ report

The Directors of Singleton Group Limited present their report

and the financial statements of the company and consolidated

entity for the financial year ended 31 December 2000.

DIRECTORS

The names of the Directors in office during the financial year

and up to the date of this report are as follows:

Mark Carnegie William Currie Anne Keating

John Singleton Geoff Levy Paul Richardson

Russell Tate

PRINCIPAL ACTIVITIES

The consolidated entity’s principal activity during the financial

year was holding a 66.67% investment in Singleton Ogilvy &

Mather (Holdings) Pty Limited, whose principal activity is

advertising and communications.

PROFIT

The operating profit after income tax of the consolidated entity

for the financial year was $12,741,000.

DIVIDENDS

Dividends paid or declared by the company since the end of the

previous financial year were:

• As proposed and provided for in the prior period’s annual

report:

A final ordinary dividend of 16 cents per (equivalent to

3.2 cents post bonus issue) share amounting to $3,733,000

in respect of the period ended 31 December 1999, paid on

12 May 2000.

• In respect of the current financial year:

An interim dividend of 2.8 cents per share amounting to

$3,642,000 paid on 13 October 2000.

A final ordinary dividend of 4.2 cents per share

recommended for payment amounting to $5,496,000.

REVIEW OF OPERATIONS

The Chairman’s Report and the Group Managing Director’s

Report forming part of the Annual Report deal with the operations

and results of the consolidated entity for the financial year ended

31 December 2000. The Directors have adopted these sections of

the Annual Report as part of the Directors’ Report.

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

In the opinion of the Directors there were no significant

changes in the state of affairs of the consolidated entity that

occurred during the financial year under review other than those

issues noted below:

• In November 2000, a controlled entity invested

$48,184,000 in PT Abhimata Mediatama, an Indonesian

company with an indirect beneficial interest in PT Surya

Citra Televisi (SCTV). SCTV is the third largest television

network in Indonesia.

EVENTS SUBSEQUENT TO THE END OF THE

FINANCIAL YEAR

No matters or circumstances have arisen since the end of the

financial year which have significantly affected or may

significantly affect the operations of the consolidated entity, the

results of those operations or the state of affairs of the

consolidated entity in subsequent financial years.

LIKELY DEVELOPMENTS

No information is included on the likely developments in the

operations of the consolidated entity and the expected results of

those operations as it is the opinion of the Directors that this

information would prejudice the interests of the consolidated

entity if included in this report.

11]eleven

INFORMATION ON DIRECTORS

MARK CARNEGIE

(Chairman, Non-Executive Director)

Aged 38 years, Mr Carnegie is a consultant. He previously

worked for Hudson Conway Limited in London and for James D

Wolfensohn, Inc in New York. He is a Director of Neverfail

Springwater Limited, Biotech International Limited, Carnegie

Foundation Limited, Easycall Asia Limited and Easycall

International Limited.

Mr Carnegie holds a Masters degree in Jurisprudence from

Oxford University and a Bachelor of Science (Hons) from

Melbourne University.

JOHN SINGLETON

(Chief Executive Officer)

Aged 59 years, Mr Singleton started the John Singleton

Advertising business in April 1985. Mr Singleton has been

Creative Director and Director of major Australian advertising

agencies since age 20. He founded the SPASM advertising agency

and the Communications Supermarket in 1968. He was Chairman

and CEO of Doyle Dane Bernbach upon its acquisition of SPASM.

Mr Singleton has also been a Director of The Sydney Opera

House, John Fairfax Holdings Limited and TEN Group Limited.

Mr Singleton has absolutely zero tertiary qualifications.

RUSSELL TATE

(Group Managing Director)

Aged 52 years, Mr Tate joined the John Singleton Advertising

business in November 1987. Mr Tate spent 10 years in sales and

marketing for various companies, including CSR, Ampol and

Rheem, and was Executive Director of the Dairy Promotion

Council in 1978. Mr Tate formed his own marketing consultancy

in 1981. The consulting operation evolved into a full service

agency in 1985.

Mr Tate holds a Bachelor of Commerce (Econ) from The

University of New South Wales.

WILLIAM CURRIE

(Non-Executive Director)

Aged 63 years, Mr Currie has spent over 40 years in advertising

in management roles. As Managing Director of his agency Berry

Currie he first teamed up with John Singleton. Mr Currie was

Deputy Chairman of DDB Berry Currie Advertising until he

joined John Singleton Advertising in 1986. He was Managing

Director until 1992 and then Chairman until June 1998.

Mr Currie is a past committee member of the Advertising

Federation of Australia, past president of the Advertising Club of

Sydney and currently Patron of Gordon Rugby Union Football Club.

GEOFF LEVY


Aged 41 years, Mr Levy is a Director and shareholder in

Wentworth Associates Pty Limited and was formerly a partner in the

leading law firm, Freehills. Mr Levy has over 15 years experience in

the corporate advisory environment where he is regarded as an expert

in mergers and acquisitions, capital raisings and general corporate

commercial law. He advises several well known Australian and

international entities and his other directorships include Rebel Sport

Limited, Freedom Group Limited, Mirvac Limited, Mirvac Funds

Limited, Capital Property Management Limited, Australian Film

Finance Corporation Limited, Ten Network Holdings Limited and

Esign Australia Limited.

Mr Levy has degrees in Commerce and Law from the University

of Witwatersrand (South Africa) and The University of New South

Wales, respectively. He also has a diploma from and is an Associate

of the Securities Institute of Australia.


12[ twelve


INFORMATION ON DIRECTORS (CONTINUED)

ANNE KEATING


Aged 47 years, Miss Keating spent four years as a high school

teacher before joining the airline industry. She has held various

positions in most areas of the business and is currently General

Manager, Australia for United Airlines.

She is a Director of WorkCover Authority, Tourism Task

Force, American Chamber of Commerce, Board of Airline

Representatives of Australia, Victor Chang Cardiac Research

Institute Limited, Ausflag Limited, NRMA Limited, NRMA

Insurance Limited, NRMA Insurance Group Limited, and

Macquarie Leisure Management Limited

PAUL RICHARDSON


Aged 43 years, Paul Richardson became group finance

director of WPP Plc in December 1996 after four years with

the Company as director of treasury. He is responsible for the

group's worldwide finance function, including external reporting,

taxation, procurement, property, treasury and internal audit.

Previously he spent six years with the central team of Hanson Plc

financing major acquisitions and disposals. He is a chartered

accountant and member of the Association of Corporate

Treasurers.

He is a Director of Chime Communications Plc, Grass Roots

Group Plc and The Farm Post Production Company Limited.

13]thirteen


CORPORATE GOVERNANCE STATEMENT

The Board of Directors of Singleton Group Limited is

responsible for the corporate governance of the consolidated

entity. The Board guides and monitors the business and affairs of

the consolidated entity on behalf of the shareholders by whom they

are elected and to whom they are accountable.

AUDIT COMMITTEE

The Board has established an audit committee. The Board has

delegated the responsibility for the establishment and maintenance

of a framework of internal control and ethical standards for the

management of the consolidated entity to the audit committee.

The members of the audit committee during the year were:

Mark Carnegie (Chairman and Non-Executive Director)

Russell Tate (Executive Director)

Alex Walker (Company Secretary)

The audit committee also:

• provides the Board with additional assurance regarding the

reliability of financial information for inclusion in the

financial statements; and

• is responsible for the external auditors and reviewing the

adequacy of the scope and quality of the annual statutory

audit and half-yearly statutory review.

COMPENSATION COMMITTEE

The Board is responsible for determining and reviewing

compensation arrangements for the Directors themselves and the

executive team. The Board has established a compensation

committee, comprising three Non-Executive Directors and one

Executive Director. Members of the compensation committee

throughout the year were;

Mark Carnegie

Geoff Levy

Anne Keating

John Singleton (Executive Director)

MONITORING OF THE BOARD’S PERFORMANCE AND

COMMUNICATION TO SHAREHOLDERS

The Board aims to ensure that the shareholders, on behalf of

whom they act, are informed of all information necessary to assess

the performance of the Directors. Information is communicated

through:

• the annual report which is distributed to all shareholders;

• the half-yearly report;

• the annual general meeting and other meetings called to

obtain approval for Board action as appropriate; and

• announcements to the Australian Stock Exchange.

14[ fourteen


MEETINGS OF DIRECTORS

During the financial year, seven meetings of Directors including committees were held. Attendances were:

DIRECTORS’ INTERESTS

Directors’ interests in shares and options over shares of the parent entity are as shown in note 21 to the financial statements. There has been

no change in those interests between 31 December 2000 and the date of this report.

EMOLUMENTS OF DIRECTORS

The remuneration of the Directors for the year ended 31 December 2000 was;

(i) Following approval at the extraordinary general meeting on 4 November 1999, Mark Carnegie and Russell Tate were issued options of

1,300,000 and 4,500,000 respectively, in the shares of the company. In respect to Mr Tate, WPP Holdings (Australia) Pty Limited has agreed

to contribute 1,354,500 shares it already owns upon exercise of these options. The options are exercisable after the date of the Board approval

of the consolidated audited profit and loss statement of Singleton Ogilvy & Mather (Holdings) Pty Limited for the year ending 31 December

2003. The options issued to Messrs Carnegie and Tate were valued using the Black-Scholes option pricing model at the date of issue. The

estimated value per option is 65.0 cents and 56.0 cents respectively.

(ii) The remuneration of these two executive Directors represents the amount paid by an associate, Singleton Ogilvy & Mather (Holdings) Pty Limited.

directors meetings audit committee meetings

number eligible number number eligible number

directors to attend attended to attend attended

Mark Carnegie 5 5 2 2

John Singleton 5 5 - -

Russell Tate 5 5 2 2

William Currie 5 5 - -

Geoff Levy 5 5 - -

Anne Keating 5 5 - -

Paul Richardson 5 1 - -

There were no formal meetings of the Compensation Committee.

directors base salary other benefits directors’ fees total no of options (i)

$ $ $ $

Mark Carnegie - 5,000 60,000 65,000 1,300,000

John Singleton 367,000 8,000 - 375,000 (ii) -

Russell Tate 467,000 8,000 - 475,000 (ii) 4,500,000

William Currie - 2,000 23,000 25,000 -

Geoff Levy - 3,000 40,000 43,000 -

Anne Keating - 3,000 40,000 43,000 -

Paul Richardson - - - - -

total $834,000 $29,000 $163,000 $1,026,000 5,800,000

15]fifteen


COMPENSATION POLICY

Directors are remunerated at market rates for their services to

the company. Other than the share options issued to Mark

Carnegie and Russell Tate, refer prior paragraph, there is no link

between the basic fees paid to retain their services and the

performance of the company. From time to time, shareholders may

be requested to approve performance incentives for services above

the normal level.

SHARE OPTIONS

Options over 4,445,500 unissued shares and options over

1,354,500 issued shares, held by a shareholder of the company,

have been issued during the financial year.

No shares have been issued by virtue of the exercise of an option

during the year and to the date of this report. At the date of this

report, there are 4,445,500 unissued shares for which options

are outstanding.

INDEMNIFICATION OF OFFICERS OR AUDITORS

The consolidated entity has not, during or since the financial

year, in respect of any person who is or has been an officer or

auditor of the parent entity or a related body corporate,

indemnified or made any relevant agreement for indemnifying

them against a liability incurred as an officer or auditor, including

costs and expenses in successfully defending legal proceedings.

During the financial year, the parent entity paid a premium for

an insurance policy insuring each of the persons noted below

against certain liabilities:

Mark Carnegie Geoff Levy

John Singleton Anne Keating

Russell Tate Paul Richardson

William Currie Alex Walker

In accordance with common commercial practice, the insurance

policy prohibits disclosure of the nature of the liability insured

against and the amount of the premium.

ROUNDING OF AMOUNTS

The consolidated and parent entities are entities to which Class

Order 98/100 issued by the Australian Securities & Investments

Commission applies and accordingly, amounts in the financial

report and in the Directors’ Report have been rounded off to the

nearest thousand dollars in accordance with that class order.

Signed in accordance with a resolution of the Directors:

Mark Carnegie

Director

(Sydney, 9 March 2001)

16[ sixteen

Operating profit before income tax 2, 3 12,723 8,308 9,076 6,243

Income tax attributable to operating profit 4 (18) 25 (7) 22

OPERATING PROFIT AFTER INCOME TAX 12,741 8,283 9,083 6,221

Retained profits/(accumulated losses)at the beginning of the financial year 1,197 (1,016) 42,023 41,872

Total available for appropriation 13,938 7,267 51,106 48,093

Dividends provided for or paid 5 (9,138) (6,070) (9,138) (6,070)

RETAINED PROFITS AT THE END OF THE

FINANCIAL YEAR 4,800 1,197 41,968 42,023

note

consol idated ent i ty parent ent i ty

profit and loss statementsfor the year ended 31 December 2000[

2000 1999 2000 1999

doll ars in thousands

The accompanying notes form part of and are to be read in conjunction with these financial statements.

17]seventeen

CURRENT ASSETS

Cash 6 145 3,136 145 3,136Receivables 7 5,662 6,798 46,281 8,773Other 8 189 54 64 54

TOTAL CURRENT ASSETS 5,996 9,988 46,490 11,963

NON-CURRENT ASSETS

Receivables 7 550 - - -Investments 9 82,843 23,830 65,323 64,795Other 8 47 7 12 7

TOTAL NON-CURRENT ASSETS 83,440 23,837 65,335 64,802

TOTAL ASSETS 89,436 33,825 111,825 76,765

CURRENT LIABILITIES

Accounts payable 10 1,653 27 434 27Borrowings 11 8,926 682 6,016 2,763Provisions 12 5,524 3,736 5,500 3,733

TOTAL CURRENT LIABILITIES 16,103 4,445 11,950 6,523

NON-CURRENT LIABILITIES

Borrowings 11 10,000 - - -Provisions 12 3 10 3 10Other 13 601 - - -

TOTAL NON-CURRENT LIABILITIES 10,604 10 3 10

TOTAL LIABILITIES 26,707 4,455 11,953 6,533

NET ASSETS 62,729 29,370 99,872 70,232

EQUITY

Issued capital 14 57,904 28,209 57,904 28,209Reserves 15 25 (36) - -Retained profits 4,800 1,197 41,968 42,023

TOTAL EQUITY 16 62,729 29,370 99,872 70,232

note


2000 1999 2000 1999


balance sheetsas at 31 December 2000[


18[ eighteen

CASH FLOW FROM OPERATING ACTIVITIES

Receipts from customers 146 - 138 -Payments to suppliers and employees (462) (540) (334) (538)Interest received 480 199 418 196Interest and other costs of finance paid (129) - - -Dividends received 9,740 1,167 9,878 1,165Income tax paid (5) (130) 1 (127)

NET CASH PROVIDED BY/(USED IN)

OPERATING ACTIVITIES 19(b) 9,770 696 10,101 696

CASH FLOW FROM INVESTING ACTIVITIES

Payments for business acquired - (100) - -Loans to associated entities – receipts from 3,247 2,340 3,244 2,217Loans to associated entities – payments made (550) (1,312) (50) (1,099)Loan to controlled entity – payments made - - (38,606) -Investments in associated entities (52,778) (38) - -


INVESTING ACTIVITIES (50,081) 890 (35,412) 1,118

CASH FLOW FROM FINANCING ACTIVITIES

Issue of shares 30,239 1 30,239 1Share issue costs (544) - (544) -Proceeds from borrowings 15,000 - - -Dividends paid (7,375) (3,493) (7,375) (3,493)


FINANCING ACTIVITIES 37,320 (3,492) 22,320 (3,492)

Net increase/(decrease) in cash held (2,991) (1,906) (2,991) (1,678)

Cash at beginning of the financial year 3,136 5,042 3,136 4,814

CASH AT THE END OF THE FINANCIAL YEAR 19(a) 145 3,136 145 3,136

note


statements of cash flowsfor the year ended 31 December 2000[

2000 1999 2000 1999



19]nineteen

21No.

22No.

22No.

23No.

23No.

24No.

24No.

24No.

24No.

28No.

28No.

28No.

28No.

29No.

29No.

29No.

30No.

31No.

31No.

32No.

32No.

33No.

34No.

]n o t e s t o t h e f i n a n c i a l s t a t e m e n t s

annual report 2000

1 Sta t ement o f S i gn i f i can t Accoun t ing Po l i c i e s

2 Revenue

3 Opera t ing Pro f i t

4 Income Tax

5 Div idends Prov ided fo r o r Pa id

6 Cash

7 Rece i vab l e s

8 Othe r Asse t s

9 Inves tmen t s

10 Accoun t s Payab l e

11 Bor row ings

12 Prov i s i ons

13 Othe r L iab i l i t i e s

14 Issued Cap i ta l

15 Rese rve s

16 Equ i t y

17 Remunera t i on o f D i re c t o rs and Execu t i ve s

18 Aud i t o rs ’ Remunera t i on

19 Notes t o S ta t emen t o f Cash F lows

20 Earn ings pe r Share

21 Re la t ed Par ty Transac t i ons

22 Sta t emen t o f Opera t i ons by Segment s

23 Financ ia l Ins t rument s

20[ twenty

notes[

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The financial report is a general purpose financial report that has

been prepared in accordance with applicable Accounting Standards,

other authoritative pronouncements of the Australian Accounting

Standards Board, Urgent Issues Group Consensus Views, and the

Corporations Law. The financial report has been prepared on an

accruals basis and is based on historical costs and does not take into

account changing money values or, except where stated, current

valuations of non-current assets. The accounting policies have been

consistently applied, unless otherwise stated.

The following is a summary of the significant accounting

policies adopted by the consolidated entity in the preparation of

the financial report.

PRINCIPLES OF CONSOLIDATION

The financial statements of the consolidated entity comprise

the financial statements of the parent entity and its controlled

entities. All inter-entity balances and transactions between

entities, including any unrealised profits or losses, have been

eliminated on consolidation.

Investments in associates are accounted for in the consolidated

financial statements using the equity method. Under this method,

the consolidated entity’s share of the profits or losses of associates

is recognised as revenue in the consolidated profit and loss

statement, and its share of movements in reserves is recognised in

consolidated reserves. Associates are those entities over which the

consolidated entity exercises significant influence, but not control.

INCOME TAX

The principles of the liability method of tax-effect accounting

have been applied whereby the income tax expense shown in the

profit and loss statements is based on the pre-tax operating profit

adjusted for any permanent differences.

Timing differences which arise due to the different accounting

periods in which items of revenue and expense are included in the

determination of pre-tax operating profit and taxable income, are

brought to account as either provision for deferred income tax or

an asset described as future income tax benefit at the rate of

income tax applicable to the financial year in which the liability

will become payable or the benefit will be received.

Future income tax benefits in relation to timing differences are

not brought to account unless realisation of the asset is assured

beyond any reasonable doubt.

The amount of these benefits is based on the assumption that

no adverse change will occur in income tax legislation and the

anticipation that sufficient future assessable income shall be

derived and there will be compliance with the conditions of

deductibility imposed by the law to permit a future income tax

benefit to be obtained.

NON-CURRENT ASSETS

The carrying amounts of non-current assets are reviewed

annually to determine whether they are in excess of their

recoverable amount at balance date. If the carrying amount of a

non-current asset exceeds the recoverable amount, the asset is

written down to the lower amount. In assessing recoverable

amounts, the relevant cash flows have not been discounted to their

present value.

INVESTMENTS

Investments in controlled entities are carried in the parent

entity’s financial statements at cost or Directors’ valuation, less any

amounts written off for diminution in the value of the investments.

Dividends are brought to account in the profit and loss statements

when they are proposed or paid by the controlled entities.

Other investments are carried at cost less any amounts written

off for diminution in value of the investments. Dividends are

brought to account when received.

CASH

For the purpose of the statements of cash flows, cash includes

cash on hand and on deposit at call with banks or financial

institutions, net of bank overdrafts.

COMPARATIVE FIGURES

Where required by Accounting Standards or for correct

disclosure, comparative figures have been adjusted to conform with

changes in presentation for the current financial year.

ROUNDING OF AMOUNTS

The consolidated and parent entities are entities to which Class

Order 98/100 issued by the Australian Securities & Investments

Commission applies and accordingly, amounts in the financial

report and in the Directors’ Report have been rounded off to the

nearest thousand dollars in accordance with that class order.

1.

to the financial statements

21]twenty one

22[ twenty two

2. REVENUE

OTHER INCOME

Share of net profit of associates before amortisation 12,960 8,296 - -Goodwill amortisation (213) - - -

Share of net profit of associates 12,747 8,296 - -

Dividends received - - 9,167 6,239Interest received 480 217 418 214Other 146 138 138 138

TOTAL REVENUE 13,373 8,651 9,723 6,591

3. OPERATING PROFIT

The operating profit before income tax has been determined after:

CREDITING AS REVENUE

Share of net profit of associates before amortisation 12,960 8,296 - -Goodwill amortisation (213) - - -

Share of net profit of associates 12,747 8,296 - -

Dividends received:Controlled entities - - - 157Associates - - 9,167 6,082

- - 9,167 6,239

Interest received:Other persons 480 217 418 214

CHARGING AS EXPENSE

Borrowing costs:Interest expense 129 - - -


2000 1999 2000 1999


notes[ to the financial statements

4. INCOME TAX

The prima facie income tax payable on the operatingprofit is reconciled to the income tax provided in the financial statements as follows:

OPERATING PROFIT BEFORE INCOME TAX 12,723 8,308 9,076 6,243

Prima facie tax payable at 34% (1999: 36%) 4,326 2,991 3,086 2,248

TAX EFFECT OF PERMANENT DIFFERENCES:

Share of net profit of associates (4,334) (2,987) - -Other (15) 21 24 19Rebateable dividends - - (3,117) (2,245)Change in tax rate 5 - - -

INCOME TAX EXPENSE (18) 25 (7) 22

5. DIVIDENDS PROVIDED FOR OR PAID

INTERIM ORDINARY DIVIDEND OF 2.8 CENTS

(1999: 2.0 cents – bonus adjusted) per share fully franked at 34% (1999: 36%) 3,642 2,332 3,642 2,332

Underprovision on prior period final dividend - 5 - 5

PROPOSED FINAL ORDINARY DIVIDEND OF 4.2 CENTS

(1999: 3.2 cents – bonus adjusted)per share fully franked at 34% (1999: 36%) 5,496 3,733 5,496 3,733

9,138 6,070 9,138 6,070

Balance of the franking account as at the end of the financialyear, adjusted for franking credits that will arise from the payment of income tax payable, franking debits that will arise from the payment of dividends proposed, and franking creditsnot represented by distributable profit:

Franked at 34% (1999: 36%) 5,557 5,104 5,551 5,104


2000 1999 2000 1999


23]twenty three


24[ twenty four

6. CASH

CASH AT BANK 145 3,136 145 3,136

7. RECEIVABLES

CURRENT

Other debtors 103 19 102 19Amounts receivable from associated entities 5,559 6,251 50 -Amounts receivable from controlled entities - - 46,488 8,585Provision for doubtful debts - - (359) (359)

5,662 6,270 46,281 8,245

Loans to Directors (refer note 21(c)) - 186 - 186Loans to former executives - 342 - 342

5,662 6,798 46,281 8,773

NON-CURRENT

Amounts receivable from associated entities 550 - - -

8. OTHER ASSETS

CURRENT

Prepayments 189 54 64 54

NON-CURRENT

Future income tax benefit 47 7 12 7

9. INVESTMENTS

NON-CURRENT

Shares in controlled entities - - 64,639 64,639Shares in associated entities 82,159 23,674 - -Shares in Director-related entity 684 156 684 156

82,843 23,830 65,323 64,795


2000 1999 2000 1999



ownersh ip interest

country of

incorporationnameamount of parent

ent i t i es investment

2000 1999 2000 1999

% doll ars in thousands

9. INVESTMENTS (CONTINUED)

CONTROLLED ENTITIES

Singleton Holdings Pty Limited Australia 100 100 63,437 63,437Belshaw Pty Limited Australia 100 100 1,202 1,202TheMissingLink Pty Limited Australia 100 100 - -Singleton Direct Pty Limited Australia 100 100 - -SGL Media Services Pty Limited and Australia 100 100 - -its controlled entity– SGL TV Holdings Limited Mauritius 100 - - -

64,639 64,639

ownersh ip interest

pr inc ipal

act i v i tynameconsol idated

carry ing amount

2000 1999 2000 1999

% doll ars in thousands

ASSOCIATED ENTITIES

Singleton Ogilvy & Mather Advertising &(Holdings) Pty Limited Communications 66.67 66.67 27,067 23,674

ANOP Research Services Pty Limited Market(acquired 4 January 2000) Research 50.00 - 1,938 -

Ogilvy Public Relations Pty Limited Public(acquired 24 August 2000) Relations 49.00 - - -

Web Development Group Pty Limited Web Site(acquired 14 August 2000)* Design 40.00 - 4,172 -

Impact Employee Communications InternalPty Limited (acquired 1 November 2000)* Communications 30.00 - 798 -

PT Abhimata Mediatama TV Holding(acquired 22 November 2000) Company 51.64 - 48,184 -

82,159 23,674

The company has a majority interest in the issued capital of Singleton Ogilvy & Mather (SOM) and PT Abhimata Mediatama.However, in accordance with the requirements of Accounting Standard AASB 1024 “Consolidated Accounts”, their financialstatements have not been included in the consolidated financial statements of Singleton Group Limited. This is because therespective shareholders’ agreements detail certain matters which, under AASB 1024, constitute joint control. The companyis required by law to accept AASB 1024.

As required by AASB 1016 “Accounting for Investments in Associates”, detailed below are disclosures and financialinformation on the associates.

* Reporting date is 30 June.

25]twenty five


26[ twenty six


EQUITY ACCOUNTED AMOUNTS FOR

THE INVESTMENTS WERE:

(a) MOVEMENTS IN CARRYING AMOUNT OF

INVESTMENT IN ASSOCIATES

Balance of equity accounted investmentat the beginning of the financial year 23,674 21,455Additional investments during the year 54,894 39Share of operating profit after income tax 12,747 8,296Share of movement in reserves 61 (34)Dividends received/receivable (9,217) (6,082)

CARRYING AMOUNT AT THE END

OF THE FINANCIAL YEAR 82,159 23,674

(b) RESULTS ATTRIBUTABLE TO ASSOCIATES

Operating profit before income tax 21,081 13,887Income tax expense (7,076) (5,053)

Operating profit after income tax 14,005 8,834Outside equity interests (1,258) (538)

OPERATING PROFIT ATTRIBUTABLE TO ASSOCIATES 12,747 8,296

(c) RETAINED PROFITS ATTRIBUTABLE TO ASSOCIATES

Opening balance 4,100 1,886Share of profit during the year 12,747 8,296Dividends received (9,217) (6,082)

CLOSING BALANCE 7,630 4,100

(d) RESERVES ATTRIBUTABLE TO ASSOCIATES

Foreign currency translation reserve:Opening balance (36) (2)Movement during the year 61 (34)

CLOSING BALANCE 25 (36)


2000 1999 2000 1999


notesto the financial statements[


(e) S H A R E O F C O M M I T M E N TS

Hire purchase:Not later than one year 58 -Later than one year and not later than five years 369 -

427 -

Operating leases:Not later than one year 2,174 1,302Later than one year and not later than five years 3,327 2,870

5,501 4,172

(f) SHARE OF CAPITAL COMMITMENTS

An associate has contracted to purchase an additional 49% equity interest in one of the associate’s controlled entities. The associate currently owns 51% of this entity. The contracted purchase commitment is payable in March 2003 and isbased on future profitability. As such, the amount payable cannot be determined at the present time.

(g) SUMMARY OF PERFORMANCE AND

FINANCIAL POSITION OF ASSOCIATES

BILLINGS AND REVENUE

Advertising billings 545,821 457,584Total revenue 82,444 61,301

OPERATING PROFIT

Operating profit after income tax 19,396 12,443

SUMMARISED BALANCE SHEET

Current Assets 56,387 50,547Non-Current Assets 101,770 41,038

TOTAL ASSETS 158,157 91,585

Current Liabilities 50,011 46,697Non-Current Liabilities 16,504 8,514

TOTAL LIABILITIES 66,515 55,211

NET ASSETS 91,642 36,374


2000 1999 2000 1999


27]twenty seven

notesto the financial statements[

10.ACCOUNTS PAYABLE

CURRENT

Sundry creditors 1,653 27 434 27

11.BORROWINGS

CURRENT

Bank loan – secured (a) 5,000 - - -Amounts payable to Director-related entity 682 682 682 682Amounts payable to associated entities 3,244 - - -Amounts payable to controlled entities - - 5,334 2,081

8,926 682 6,016 2,763

NON-CURRENT

Bank loan – secured (a) 10,000 - - -

(a) Security is provided by a fixed and floating charge overthe assets of the parent entity and an associate entity,Singleton Ogilvy & Mather (Holdings) Pty Limited.

12.PROVISIONS

CURRENT

Income tax 28 3 4 -Dividends 5,496 3,733 5,496 3,733

5,524 3,736 5,500 3,733

NON-CURRENT

Deferred income tax 3 10 3 10

13.OTHER LIABILITIES

NON-CURRENT

Deferred acquisition consideration 601 - - -


2000 1999 2000 1999



28[ twenty eight

14.ISSUED CAPITAL

ORDINARY SHARES

At the beginning of the financial year: 28,209 28,208 28,209 28,208

Shares issued during the year13,000 on 24 March 2000 - - - -321,116 on 25 August 2000 3,041 - 3,041 -2,365,078 on 30 August 2000 27,198 - 27,198 -Transaction costs relating to share issues (544) - (544) -

57,904 28,208 57,904 28,208

Shares issued in 1999:100,000 on 1 March 1999 - 1 - 124,182 on 7 April 1999 - - - -

130,079,295 ORDINARY SHARES

(1999: 23,316,665) 57,904 28,209 57,904 28,209

(a) On 7 September 2000, the company issued 104,063,436 shares at nil consideration to existing shareholders on the basisof 4 shares for every 1 share held.

(b) At the date of this report, options have been granted over 4,445,500 unissued shares. The exercise price is 4 cents per share.The options can be exercised during the period between February 2004 and February 2005.

15.RESERVES

Foreign currency translation reserve:

Opening balance (36) (2) - -Share of associate’s foreign currency translation reserve increment 61 (34) - -

CLOSING BALANCE 25 (36) - -

16.EQUITY

The balance sheet discloses that total equity in the parent entity exceeds the total in the consolidated entity by $37,143,000(1999: $40,862,000). This is primarily a result of the realisation, in a prior year, by the parent entity of a profit of$37,344,000, on sale of the its shares in a controlled entity to another controlled entity. As it has not been realised byexternal sale, the profit has been eliminated in the consolidated entity financial statements.

On the basis set out above, the Directors believe that the carrying amount of the investments in the parent entity’s operatingcontrolled entities is appropriate.


2000 1999 2000 1999


29]twenty nine


17.REMUNERATION OF DIRECTORS AND EXECUTIVES

(a) DIRECTORS’ REMUNERATION

Income paid or payable or otherwise made available to:

Directors of all entities in the consolidated entity 4,386 1,159 - -Directors of the parent entity - - 4,386 1,159

4,386 1,159 4,386 1,159

Directors of the parent entity in office during the year:Mark Carnegie Geoff LevyJohn Singleton Anne KeatingRussell Tate Paul RichardsonWilliam Currie

The number of Directors whose total remuneration fell within the following income bands:

Income range $ Number0 - 9,999 1 120,000 - 29,999 1 140,000 - 49,999 2 260,000 - 69,999 - 1370,000 - 379,999 1 -460,000 - 469,999 - 1520,000 - 529,999 - 1900,000 - 909,999 (c) 1 -2,990,000 - 2,999,999 (c) 1 -

(b) EXECUTIVES’ REMUNERATION

Remuneration received by executives for managementof affairs, where income is $100,000 or more. 3,368 988 3,368 988

The number of executives where remuneration fellin the following income bands:

Income range $ Number Number370,000 - 379,999 1 - 1 -460,000 - 469,999 - 1 - 1520,000 - 529,999 - 1 - 12,990,000 - 2,999,999 (c) 1 - 1 -

(c) VALUE OF OPTIONS GRANTED

Following approval at the extraordinary general meeting on 4 November 1999, Mark Carnegie and Russell Tate were issuedoptions of 1,300,000 and 4,500,000 respectively, in the shares of the company. In respect to Mr Tate, WPP Holdings(Australia) Pty Limited has agreed to contribute 1,354,500 shares it already owns upon exercise of these options. Theoptions are exercisable after the date of the Board approval of the consolidated audited profit and loss statement of SingletonOgilvy & Mather (Holdings) Pty Limited for the year ending 31 December 2003. The options issued to Messrs Carnegie andTate were valued using the Black-Scholes option pricing model at the date of issue. The estimated value per option is 65.0 cents and 56.0 cents respectively. The value of the options has been included in the income bands.

30[ thirty


2000 1999 2000 1999



18.AUDITORS’ REMUNERATION

Amounts receivable or due and receivableby parent entity auditors for:

Auditing and reviewing financial statements 17 17 17 17Other services 184 100 184 100

201 117 201 117

19. NOTES TO STATEMENTS OF CASH FLOWS

(a) RECONCILIATION OF CASH

Cash at the end of the financial year is shown in thebalance sheet as:

CASH AT BANK 145 3,136 145 3,136

(b) RECONCILIATION OF CASH FLOW FROM

OPERATING ACTIVITIES WITH OPERATING

PROFIT AFTER INCOME TAX

Operating profit after income tax 12,741 8,283 9,083 6,221

NON-CASH ITEMS IN OPERATING PROFIT

Share of associates’ profit net of dividends received (3,008) (8,296) - -Other income - (137) - (133)

CHANGES IN ASSETS AND LIABILITIES

(Increase)/decrease in trade and other debtors (84) (19) (83) (19)(Increase)/decrease in prepayments (135) (54) (10) (54)(Increase)/decrease in future income tax benefit (40) 12 (5) 12(Increase)/decrease in dividends receivable - 1,166 711 (5,073)Increase/(decrease) in sundry creditors 278 (143) 407 (142)Increase/(decrease) in income tax payable 25 (126) 5 (126)Increase/(decrease) in deferred tax payable (7) 10 (7) 10

CASH FLOW FROM OPERATING ACTIVITIES 9,770 696 10,101 696


2000 1999 2000 1999


31]thirty one


20.EARNINGS PER SHARE

Basic EPS (cents per share) 10.51 7.11

Diluted EPS (cents per share) 10.24 7.11

Weighted average number of ordinary shares outstanding 121,169,205 116,583,325during the year used in calculation of basic EPS

To make the comparative meaningful, the prior period calculation and weighted average number of shares have been adjusted to reflect the 4 for 1 bonus share issue during the year.

21. RELATED PARTY TRANSACTIONS

(a) TRANSACTIONS WITH RELATED PARTIES

Controlled entitiesInformation relating to controlled entities is set out in note 9. The parent entity and its controlled entities maintain loanaccounts between themselves which can fluctuate throughout the year. There are no fixed terms of repayment of theseamounts, which are interest free. Amounts owing by and to controlled entities are set out in notes 7 and 11.

Associate entitiesDuring the year, the parent entity received management fees of $138,000 (1999: $138,000) from Singleton Ogilvy &Mather (Holdings) Pty Limited on commercial terms and conditions. The consolidated entity and associated entities maintainloan accounts between themselves which can fluctuate throughout the year. There are no fixed terms of repayment of theseamounts which are interest free. The amount owing by and to associates are set out in notes 7 and 11.

(b) TRANSACTIONS WITH DIRECTOR-RELATED ENTITIES

The consolidated entity engaged the services of Wentworth and Associates Pty Limited, an entity in which Geoff Levy, aDirector of the company, has an interest. The fees charged during the year were $245,000 (1999: $90,000). The amountpayable at 31 December 2000 was $200,000 (1999: Nil).

(c) LOANS TO DIRECTORS

Aggregate of loans at the beginning of the financial year 186 186Loans advanced during the financial year - -Loans repaid during the financial year (186) -

AGGREGATE OF LOANS AT THE END

OF THE FINANCIAL YEAR - 186

These loans were to assist two Directors of the parent entity, Russell Tate and William Currie, to finance the issue of shares underthe Executive Incentive Scheme (“EIS”). The loans had been advanced on a non-recourse basis against the security of the shares.The loans were discharged as a consequence of the transfer of the shares under the EIS, from the Directors to the parent entity.

32[ thirty two


2000 1999 2000 1999

cents per share


(d) DIRECTORS’ SHAREHOLDINGS AND OPTIONS

As at 31 December 2000, the interests of the Directorsin the shares and options of the parent entity were:

Mark Carnegie 3,750,000 750,000 1,300,000 -John Singleton 37,500,000 7,500,000 - -Russell Tate 1,465,000 293,000 3,145,500 -William Currie 300,000 60,000 - -Geoff Levy 550,000 110,000 - -

43,565,000 8,713,000 4,445,500 -

On 7 September 2000, the company issued 4 bonus shares for each share held.As a result, the total number of shares issued to Directors during the year was 34,852,000 (1999: Nil).

The total number of options issued to Directors during the year was 4,445,500 (1999: Nil).

Total Shares total opt ions

2000 1999 2000 1999

33]thirty three

22. STATEMENT OF

OPERATIONS BY SEGMENTS

(a) INDUSTRIAL SEGMENTS

Advertising & Communications 13,054 8,651 12,422 8,283 41,252 33,825Media 319 - 319 - 48,184 -

13,373 8,651 12,741 8,283 89,436 33,825

(b) GEOGRAPHIC SEGMENTS

Australasia 13,054 8,651 12,422 8,283 41,252 33,825Asia 319 - 319 - 48,184 -

13,373 8,651 12,741 8,283 89,436 33,825

operating profit

after income taxTotal revenue total assets

2000 1999 2000 1999 2000 1999



23. FINANCIAL INSTRUMENTS

(a) Interest rate riskThe consolidated entity’s exposure to interest rate risk,which is the risk that a financial instrument’s value willfluctuate as a result of changes in market interest rates, and the effective weighted average interest rates on classes of financial assets and financial liabilities, are as follows:

as at 31 december 2000

FINANCIAL INSTRUMENT

Cash 145 - 145Other debtors - 103 103Investments - 684 684

TOTAL FINANCIAL ASSETS 145 787 932

Weighted average interest rate (pa) 5.6 %

Sundry creditors - 1,653 1,653Loans 15,000 3,926 18,926

TOTAL FINANCIAL LIABILITIES 15,000 5,579 20,579

Weighted average interest rate pa 7.6%

as at 31 december 1999

FINANCIAL INSTRUMENT

Cash 3,136 - 3,136Other debtors - 19 19Loans - 528 528Investments - 156 156

TOTAL FINANCIAL ASSETS 3,136 703 3,839

Weighted average interest rate (pa) 4.4%

Sundry creditors - 27 27Loans - 682 682

TOTAL FINANCIAL LIABILITIES - 709 709

(b) The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets is the carrying amount, net of any provisions for doubtful debts, as disclosed in the balance sheet and notesto the financial statements. The consolidated entity does not have any material credit risk exposure to any single debtor.

(c) Net fair valuesThe net fair values of the consolidated entity’s financial assets and liabilities are equal to their carrying value as disclosed in (a) above.

34[ thirty four

float ing

interest rate

non interest

bear ing total



The Directors of Singleton Group Limited declare that:

(a) the financial statements and notes comply with Accounting Standards and give a true and fair view of the financial position and performance of the company and the consolidated entity for the financial year ended 31 December 2000; and

(b) in the Directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and whenthey become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of theDirectors by:

Mark Carnegie

Director


directors’ declaration[ singleton group limited

35]thirty five

HORWATHSydney PartnershipChartered AccountantsA member of Horwath International

1 Market Street Sydney NSW 2000GPO Box 1455 Sydney NSW 1041

INDEPENDENT AUDIT REPORT TO THE MEMBERS OF SINGLETON GROUP LIMITED

SCOPE

We have audited the financial report of Singleton Group Limited for the financial year ended 31 December 2000 as set out on pages 17to 35. The financial report includes the consolidated financial statements of the consolidated entity comprising the company and theentities it controlled at the year’s end or from time to time during the financial year. The company’s directors are responsible for thefinancial report. We have conducted an independent audit of this financial report in order to express an opinion on it to the members ofthe company.

Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the financialreport is free of material misstatement. Our procedures included examination, on a test basis, of evidence supporting the amounts and otherdisclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates. These procedures havebeen undertaken to form an opinion whether, in all material respects, the financial report is presented fairly in accordance with AccountingStandards, other mandatory professional reporting requirements and the Corporations Law in Australia, so as to present a view which isconsistent with our understanding of the company’s and the consolidated entity’s financial position, and performance as represented by theresults of their operations and their cash flows.

The audit opinion expressed in this report has been formed on the above basis.

AUDIT OPINION

In our opinion, the financial report of Singleton Group Limited is in accordance with:

(a) the Corporations Law, including:

(i) giving a true and fair view of the company’s and consolidated entity’s financial position as at 31 December 2000 and of theirperformance for the year ended on that date; and

(ii) complying with Accounting Standards and the Corporations Regulations; and

(b) other mandatory professional reporting requirements.

HORWATHSydney PartnershipChartered Accountants

David Green

Partner


independent audit report[

36[ thirty six

singleton group limited

37]thirty seven

additional information[ to the financial report

1. SHAREHOLDER INFORMATION – AS AT 9 MARCH 2001

(a) Distribution of shareholdings

(b) The number of shareholdings held in less than marketable parcels is 129.

(c) 20 largest shareholders

number of ordinarynumber of shares held holders shares

1 - 1,000 360 211,107

1,001 - 5,000 558 1,701,285

5,001 - 10,000 234 1,904,286

10,001 - 100,000 209 5,845,057

100,001 and over 43 121,170,230

1,404 130,831,965

number of % heldordinary of issuedfully paid ordinary

name of shareholder shares held capital

1. The John Singleton Limited Partnership 37,500,000 28.66

2. Chase Manhattan Nominees Limited 16,469,666 12.59

3. WPP Holdings (Australia) Pty Limited 15,063,980 11.51

4. Caledonia Investments Limited 8,372,555 6.40

5. Permanent Trustee Australia Limited (FIR0023 A/C) 6,503,915 4.97

6. National Nominees Limited 4,571,135 3.49

7. Perpetual Nominees Limited (PMISF A/C) 3,938,055 3.01

8. Perpetual Trustees Nominees Limited 3,090,595 2.36

9. Citicorp Nominees Pty Limited 2,904,472 2.22

10. AMP Life Limited 2,351,390 1.80

11. Brislan Nominees Pty Limited 2,350,000 1.80

12. Perpetual Nominees Limited (PCEF A/C) 2,135,648 1.63

13. Commonwealth Custodial Services Limited (No 100 Account) 1,965,000 1.50

14. Colonial Investment Services Limited (Pet One Account) 1,811,611 1.38

15. Perpetual Nominees Limited (PWSCF A/C) 1,625,607 1.24

16. Mr. Russell Tate 1,465,000 1.12

17. Justamo Pty Limited (Alan Morris Family A/C) 800,000 0.61

18. Government Superannuation Office (A/C State Super Fund) 706,800 0.54

19. Perpetual Nominees Limited (ICIS A/C) 661,000 0.51

20. Perpetual Nominees Limited (ICSC A/C) 626,585 0.48

114,913,014 87.82

38[ thirty eight

additional information[ to the financial report

1. SHAREHOLDER INFORMATION – AS AT 9 MARCH 2001 (CONTINUED)

(d) Substantial shareholders listed in the company’s register are:

number ofshareholder shares

The John Singleton Limited Partnership 37,500,000

Chase Manhattan Nominees Limited 16,469,666

WPP Holdings (Australia) Pty Limited 15,063,980

Perpetual Trustees Australia Limited 10,073,505

Commonwealth Bank of Australia and Colonial Limited 9,133,490

Caledonia Investments Limited 8,372,555

(e) Voting rights

At a general meeting, every shareholder present in person or by proxy, representative or attorney will have one vote on

a show of hands and, on a poll, one vote for each share.

2. THE NAME OF THE COMPANY SECRETARY IS:

Mr Alex Walker

3. THE REGISTERED OFFICE ADDRESS IN AUSTRALIA IS:

Level 18

Darling Park

201 Sussex Street

Sydney NSW 2000

Telephone: (02) 9373 6333

4. THE REGISTER OF SECURITIES IS HELD AT:

Computershare Investor Services Pty Limited

Level 3

60 Carrington Street

Sydney NSW 2000

Telephone: (02) 8234 5000

5. STOCK EXCHANGE LISTING

Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian Stock

Exchange Limited.

If you’ve read any of our previous annual

reports, we apologise if we are starting to

sound repetitive, but our credo is still, ‘We

sell, or else’. It always will be. That’s why our

clients are our clients. In our business, it is

paramount to differentiate our clients from

their competitors. The same is also true for

ourselves. What separates Singleton Ogilvy &

Mather from the herd is our results-focussed

attitude. Singleton Ogilvy & Mather is about

selling ideas that sell. And while our clients

are advertisers from many different categories,

there is one thing they all have in common.

They are all brand leaders in their own

category. It is our job to keep them there.

SELLIDEASADVERTISING IS ABOUT

THAT DO NOTHING BUT

“The only reason advertising exists is to sell products”

Jo h n S i n g l e t o n ( a l i ve a n d we l l )

“The purpose of everything we do shall be this: to sell our clients’ products”

D av i d O g i l v y ( 1 911 - 1 9 9 9 )

Ask anyone in advertising and they’ll tell

you, it’s the hardest business to break

into. Ask anyone at Singleton Ogilvy &

Mather and they’ll tell you, it’s the

hardest advertising agency in the

business to break into. Many have tried

and many have failed. And those who

are here and think they have made it

don’t last long.

You never actually make it at Singleton

Ogilvy & Mather. You have to continue

to keep on making it. Singleton Ogilvy

& Mather is the hardest working

advertising in Australia, if not the

world. The pace is faster than any other

advertising agency and the expectations

are higher. So it takes a certain kind

of person to succeed here and to keep

on succeeding.

We don’t hire people we think will ever

be as good as we are. We hire people we

think will be better than us. We don’t

find many of these people. They find us.

Singleton Ogilvy & Mather currently

employees 320 people. Or, more

correctly, Singleton Ogilvy & Mather

employs 320 individuals. So how do we

harness 320 brains and bring them

around to our way of thinking? We

don’t. We recognise and promote

individuality. And we only employ

people who already believe that

advertising is about selling.

44[ forty four

SOM FINANCIALS

c o n s o l i d a t e d e n t i t y

S I N G L E T O N O G I LV Y & M AT H E R

Operating profit before income tax 31,119 20,830

Income tax attributable to operating profit 10,483 7,579

OPERATING PROFIT AFTER INCOME TAX 20,636 13,251

Outside equity interests in operating profit after income tax (1,887) (808)

Operating profit after income tax attributable to members of the parent entity 18,749 12,443

Retained profits at the beginningof the financial year 5,205 1,885

TOTAL AVAILABLE FOR APPROPRIATION 23,954 14,328

Dividends provided for or paid (13,750) (9,123)

RETAINED PROFITS AT THE

END OF THE FINANCIAL YEAR 10,204 5,205

2000 1999

profit and loss statement[


This financial disclosure is in respect of 100% of Singleton Ogilvy & Mather’s results and has been extracted from the audited financialreport of Singleton Ogilvy & Mather (Holdings) Pty Limited. Financial disclosure regarding Singleton Ogilvy & Mather (Holdings) Pty Limited as it affects shareholders of Singleton Group Limited is found in note 9 of the Singleton Group Limited financial report.

46[ forty six

for the year ended 31 December 2000

balance sheetas at 31 December 2000[



CURRENT ASSETS

Cash 23,494 22,639Receivables 23,574 23,904Other 4,348 4,004

TOTAL CURRENT ASSETS 51,416 50,547

NON-CURRENT ASSETS

Receivables 5,249 3,849Investments 3,452 1,453Property, plant and equipment 3,631 3,733Other 1,856 2,176Intangibles 38,126 29,827

TOTAL NON-CURRENT ASSETS 52,314 41,038

TOTAL ASSETS 103,730 91,585

CURRENT LIABILITIES

Accounts payable 29,347 29,024Provisions 16,758 17,673

TOTAL CURRENT LIABILITIES 46,105 46,697

NON-CURRENT LIABILITIES

Provisions 2,011 2,011Other 12,576 6,503

TOTAL NON-CURRENT LIABILITIES 14,587 8,514

TOTAL LIABILITIES 60,692 55,211

NET ASSETS 43,038 36,374

EQUITY

Issued capital 29,445 27,372Capital contribution obligation 999 2,937Reserves 37 (52)Retained profits 10,204 5,205

Equity attributable to members of the parent entity 40,685 35,462

Outside equity interests in controlled entities 2,353 912

TOTAL EQUITY 43,038 36,374

2000 1999



47]forty seven




CASH FLOW FROM OPERATING ACTIVITIES

Fees received 261,678 238,941

Payments to suppliers and employees (231,065) (215,296)

Interest received 1,199 510

Interest and other costs of finance paid (4) (10)

Income tax paid (9,488) (930)

Net cash provided by operating activities 22,320 23,215

CASH FLOW FROM INVESTING ACTIVITIES

Payment for property, plant and equipment (1,286) (2,112)

Investment in controlled entities (1,937) (1,394)

Investments in associates (1,186) (1,646)

Loans with associated entities - payments made (3,397) (2,208)

Loans with associated entities - receipts from - 1,442

Restructure costs (1,076) (2,053)

Net cash used in investing activities (8,882) (7,971)

CASH FLOW FROM FINANCING ACTIVITIES

Capital contribution 2,073 1,394

Dividends paid (14,610) (1,752)

Net cash used in financing activities (12,537) (358)

Net increase (decrease) in cash held 901 14,886

Cash at the beginning of the financial year 22,639 7,888

Effect of exchange rates on cash holdings (46) (135)

Cash at the end of the financial year 23,494 22,639

2000 1999

statement of cash flowsfor the year ended 31 December 2000[


48[ forty eight

Date post:	11-Feb-2017
Category:	Documents
Upload:	lekhuong
View:	217 times
Download:	0 times

31 December 2000

Documents