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ACN 101 217 252
www.dailyplanet.com.au7 – 12 Horne Street Elsternwick 3185 Victoria Australia
Tel +613 9528 1766 Fax +613 9523 7540 Email [email protected]
CORPORATE DIRECTORY
The Daily Planet Limited
7-12 Horne Street, Elsternwick, Victoria 3185
Directors
John Dennis Trimble
Andrew Harris
Shane Bernard Maguire
Accountants
Hayes Knight
Accountants and Business Advisors
Victorian Partnership
60 Collins Street, Melbourne, Victoria 3000
Auditor
Alexander & Spencer
Chartered Accountants
440 Collins Street, Melbourne, Victoria 3000
Independent Accountant
Alexander & Spencer Group Pty Ltd
ACN 052 362 348
440 Collins Street, Melbourne, Victoria 3000
Share Registry
Computershare Investor Services Pty Limited
Level 12, 565 Bourke Street, Melbourne, Victoria 3000
Tel: 1300 850 505
Solicitors
Adams Maguire Sier
176 Upper Heidelberg Road, Ivanhoe, Victoria 3079
Sponsoring Broker
Cameron Stockbrokers Limited
ABN 38 090 472 012
Level 5, 10 Spring Street, Sydney NSW 2000
Tel: (02) 9232 7700
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IMPORTANT NOTICEThis prospectus (“Prospectus”) is issued by The Daily Planet Limited (ACN 101 217 252) (“Company”). This Prospectus is dated 29 November 2002
and was lodged with the Australian Securities and Investments Commission (“ASIC”) on that date. Neither ASIC nor the Australian Stock Exchange
Limited (“ASX”) take any responsibility for the contents of this Prospectus.
The expiry date of this Prospectus is 28 February 2003 at 5.00pm (Melbourne, Australia time) (“Closing Date”). No Shares will be allotted or issued
on the basis of this Prospectus after the Closing Date. The Company reserves the right, subject to the Corporations Act, to close the Offer early or
delay the Closing Date to a date not later than 28 December 2003.
Exposure PeriodUnder the Corporations Act, the Company is not permitted to process applications during the period of 7 days after the date of lodgement of this
Prospectus with ASIC. ASIC may extend this period for a further 7 days. This period is an exposure period to enable this Prospectus to be examined
by market participants prior to the raising of funds. No preference will be conferred on applications received during the exposure period.
ApplicationsThe Corporations Act, prohibits any person passing on to another person an Application Form unless it is attached to a copy of this Prospectus or
it accompanies the complete and unaltered version of this Prospectus. This Prospectus is intended only for those persons to whom it was delivered
personally by or on behalf of the Company, or to those persons who have downloaded the document in PDF format from the Company’s website
www.dailyplanet.com.au. Any person may obtain a hard copy of this Prospectus free of charge by contacting the Company at its registered office.
The Offer is available to persons receiving the electronic version of this Prospectus within Australia.
Overseas JurisdictionsThis Prospectus does not constitute an offer for the issue, sale or purchase of any securities in any place in which, or to any person to whom,
it would not be lawful to make such an offer. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and
persons (including nominees, trustees or custodians) who come into possession of it should seek advice on and observe any such restrictions.
Any failure to comply with such restrictions may constitute a violation of applicable securities laws.
In particular:
• The Shares have not and will not be registered under the United States Securities Act of 1933 (“Securities Act”) and may only be offered or
sold in the United States or to, or for the account or benefit of, any “U.S. person” (as defined in Rule 902 of the Securities Act) under
exemptions from the registration requirements of the Securities Act and any applicable securities laws of any state of the United States; and
• This Prospectus has not been and will not be approved by an authorised person in the UK and has not been and will not be registered with
the Registrar of Companies in the UK. The Shares may not be offered to or sold in the UK except to persons having professional experience in
matters relating to investments (pursuant to Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001) and
the investment to which this Prospectus relates is only available in the UK to such persons. Persons who do not have professional experience in
matters relating to investments may not rely on this Prospectus.
Assumptions and Risk FactorsBefore deciding to invest in the Company, investors should read this Prospectus in its entirety. In considering the prospects of the Company,
investors should consider the assumptions underlying the prospective financial information and the risk factors described in Sections 5 and 6 of
this Prospectus. The information contained in this Prospectus does not take into account the investment objectives, financial situation or particular
needs of any investor. Before making an investment in the Company, investors should consider whether such an investment is appropriate for their
particular investment needs, objectives and financial circumstances and consult an investment advisor if necessary.
Personal InformationThe completed Application Form provides personal information about you to the Company. The Company collects your personal information to
process and administer your investment in the Company and to provide related services to you. If you do not complete the Application Form in full,
the Company may not accept your Application Form. The Company may disclose your personal information, for purposes related to your
investment, to its agents or service providers, including the sponsoring broker and share registry. You can obtain access to personal information
that the Company holds about you. To make a request for access or to obtain further information about the Company's personal information
management practices, please contact the Company on (03) 9528 1766.
Definitions of certain terms used in this Prospectus appear in the Glossary in Section 12. Other definitions are located where relevant in this Prospectus.
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The models appearing in this Prospectus are not sex workers.
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TABLE OF CONTENTSInvestment Highlights 1
Chairman’s Letter 3
Section 1 The Offer 4
Section 2 The Company – The Daily Planet Limited 8
Section 3 The Property 12
Section 4 Management Team 14
Section 5 Risk Factors 16
Section 6 Financial Information 20
Section 7 Independent Accountant’s Report 32
Section 8 Summary of Building Condition Report 40
Section 9 Summary of Property Valuation 44
Section 10 The Tenant and its History 50
Section 11 Additional Information 56
Section 12 Glossary 66
Annexure 1 Sample Share Certificate 68
Application Form
Investment TimetableLodgement of Prospectus 29 November 2002
Close of Offer 28 February 2003
Expected Dispatch of Holding Statements/Share Certificates 13 March 2003
Expected Quotation of Shares on ASX 21 March 2003
The above dates are indicative only and the Company reserves the right to alter the timetable without notice or discontinue
the Offer without issuing or allotting some or any Shares.
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Unique investment opportunityIn what is thought to be the first public
offer of this type in the world, The Daily
Planet Limited is giving investors the
chance to invest indirectly in Australia’s
multi-million dollar sex industry.
Investors are encouraged to complete and
return their Application Forms as soon as
possible to ensure they don’t miss out on
this truly unique investment opportunity.
Quality propertyFollowing extensive refurbishments
in 1988, 1994 and most recently in 2002,
the Daily Planet boasts magnificent décor
and state of the art facilities. The Property
has been valued at $5.75 million.
High profile tenantEstablished in 1975, the Daily Planet is
a genuine Melbourne icon. As one of the
largest operating licensed brothels in the
world, it has the enviable reputation as a
leading player in the industry.
Investors are referred to Section 10
headed “The Tenant and its History”.
That section will provide potential
investors with information which will
assist them in evaluating the viability
of the tenant and its profile.
Secure leaseThe Company has secured the Daily
Planet as the tenant of the Property for
the next 50 years (with options totalling
a further 50 years). If the Offer is fully
subscribed, the commencing annual
rental will be $661,880 subject to annual
CPI reviews capped at 4%. The lease is
on extremely favourable terms to the
Company, with the tenant responsible for
all outgoings, improvements, structural
repairs and capital works on the Property.
These arrangements will ensure that the
Company’s overheads are minimised.
Attractive returnsThe Company is forecasting an attractive
annualised partly franked return of
8.13% p.a. averaged over the next
27 months. Most Australian resident
investors (including superannuation
funds) will be able to enjoy the benefit
of the imputation credits attaching to
the partly franked dividends. For those
investors, the effective annualised rate
of return will increase to an average of
10.44% p.a. over the forecast 27 month
period. Refer to Section 2.4 for further
information regarding the utilisation of
imputation credits and to Sections 5.7
and 6.2 for discussion of the factors
affecting the forecast returns and the
assumptions on which they are based.
Regular dividendsThe table on the following page
shows an indicative investment of
$10,000 (the minimum investment
is $2000). Dividends will be paid on a
twice yearly basis. Subject to the Offer
being fully subscribed, the Directors'
will demonstrate their commitment to
the payment of regular dividends by
ensuring that the amount of $712,838
will be held separately in an interest
bearing account at all times during the
forecast period. For further details
regarding this security for dividends
refer to Section 2.3.
Experienced management teamWith a wealth of industry experience, the
Company’s management team is eminently
qualified to guide the Company through
this exciting stage in its development.
Diversification and expansion of future activitiesThe Directors will consider expanding
and diversifying the Company’s
operations in the future by developing
or acquiring a similar business to the
Daily Planet in the Sydney CBD, and by
the acquisition of businesses operating
in related industries throughout Australia.
Investment risksThere are a number of factors, both
specific to the Company and of a general
nature, which may affect the future
operating and financial performance
of the Company and the value of the
Shares. These factors are outlined in
Section 5 of this Prospectus, and include:
• performance of the tenant;
• default under the Facility Agreement;
• loss of key personnel;
• vacancy of the Property;
• lack of operating history
of the Company;
• success of future capital raisings;
• payment of dividends;
• changes to the regulatoryenvironment; and
• general investment risks.
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INVESTMENT HIGHLIGHTS
The above information is a summary only.
Investors are encouraged to read the full
text of this Prospectus.
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Forecast Returns
Dividend Period Notes 3 months ended Year ended Year ended Annualised30 June 2003 30 June 2004 30 June 2005 Average
Partly franked dividend paid
on initial investment of $10,000 1 $249.61 $808.86 $829.01 $812.83
Annualised rate of return 2 9.99% 8.09% 8.29% 8.13%
Imputation credit 3 $Nil $217.45 $275.84 $230.89
Total return $249.61 $1026.30 $1104.85 $1126.92
Annualised effective rate of
return for Australian residents 4 10.00% 10.26% 11.05% 10.44%
Net/After tax return 5 15% marginal tax rate
(super funds) $212.17 $1089.80 $1214.97 $1118.05
48.5% marginal tax
rate (individuals) $128.55 $745.99 $844.84 $768.40
6 Overseas investors $249.61 $808.86 $829.01 $812.83
The above returns are predictive in character and are not guaranteed. They may be affected by inaccurate assumptions or by
known or unknown risks and uncertainties. They may differ materially from results ultimately achieved. Refer to Sections 5.7
and 6.2 below for discussion of the factors affecting the forecast returns and the assumptions on which they are based.
Notes:
1 Due to the Company’s projected income tax position, only partly franked dividends are able to be issued during the forecast
period. The first three-month period dividend will be unfranked due to the fact that at this point in time the Company will not
have paid any income tax from which franking credits are derived.
2 Based on the projected net profit of the Company for the relevant dividend period. The annualised effective rate of return
in relation to a period which is a year, is calculated by reference to the partly franked dividends payable during that year
(plus the imputation credits), divided by the initial investment by an investor expressed as a percentage. In relation to the
initial period of 3 months to 30 June 2003 this result has been annualised for the purpose of comparison with later years.
3 Whilst most Australian residents (including superannuation funds) will be able to enjoy the benefit of imputation credits, all
investors should seek professional taxation advice in relation to their own circumstances, particularly those who choose to
invest through a family trust or a company.
4 This item shows the equivalent gross (unfranked) return from a non-share based investment that an investor would need
to receive in order to obtain the forecast net/after-tax return.
5 The net/after tax rate of return will depend on the tax status or marginal tax rate of the individual investor. This item shows
the respective net/after tax returns (having taken into account the imputation credits) received by investors in the following
taxation categories – investors on the 15% tax rate eg. superannuation funds; individual investors on the 48.5% marginal tax
rate (including medicare levy) - eg. investors with taxable income exceeding $60,000; and overseas investors.
6 Based on the net/after tax return prior to the deduction of witholding tax. Overseas investors are unable to access the
imputation credits, which are only available to Australian residents. Other concessions exist however, in relation to withholding
tax. Where a company pays to overseas investors a dividend that has been partially or fully franked, the dividend will, to the
extent to which it has been franked, be exempt from Australian withholding tax. The general rate of withholding tax on dividends
is 30% or, for residents of a country with which Australia has concluded a comprehensive double tax agreement, 15%. The net
return received by overseas investors is the balance remaining following payment of all Australian tax liabilities. Note, however,
the net return may constitute assessable income in their home countries and may be subject to further tax liability. Overseas
investors are encouraged to seek advice regarding the application of those laws to their personal circumstances.
Chairman’s Letter
Dear Investor 29 November 2002
On 22 July of this year, the Directors announced that The Daily Planet Limited (“Company”) was going public and detailed
an investment opportunity for investors satisfying certain eligibilty criteria set out in an Information Memorandum.
Since that announcement the Company has received over 3,000 telephone and e-mail enquiries from investors all over the
world, as well as over 9 million hits on the Company’s website – including 1.26 million hits on the day following the announcement.
The media attention generated by the announcement has been similarly overwhelming with feature stories appearing on television
and newspapers here and around the world.
At the time of the announcement, the intention of the Directors was to seek a listing on ASX within 12 – 24 months. In light
of the considerable response from investors, the Directors have resolved to expedite the listing process and intend to lodge an
application for listing with ASX no later than 6 December 2002. In order to obtain a listing on ASX, the Company must issue and
lodge a formal prospectus with ASIC. The added benefit of offering the Shares under such a document is that the investor eligibility
criteria is removed and the Offer is open to the general public. Applicants under the Information Memorandum will be required to
lodge an application under this Prospectus.
The Daily Planet Limited, as registered proprietor and landlord, will lease the Horne Street property to Daily Planet Australia
Pty Ltd for a commencing annual rental of $661,880. Minimal overheads allow for a projected average partly franked return of
8.13% p.a. annualised over the next 27 months to the holders of ordinary shares in The Daily Planet Limited. Taking into account
the benefit of imputation credits increases the effective average annualised rate of return to 10.44% p.a. Refer to Sections 2.4, 5.7
and 6.2 for further details.
To the best of the Directors’ knowledge this is the first public offering of this type in the world. To mark this historic event,
a superbly presented parchment share certificate will be provided on request to those shareholders who wish to receive one.
A sample share certificate is contained in Annexure 1 to this Prospectus.
I am very excited by the prospect of embarking on this new phase in the evolution of the Daily Planet and, on behalf of the
Directors, I look forward to welcoming you as a shareholder of The Daily Planet Limited.
Yours faithfully
John TrimbleExecutive ChairmanThe Daily Planet Limited
7 – 12 Horne Street Elsternwick 3185 Victoria Australia Tel +613 9528 1766 Fax +613 9523 7540 Email [email protected]
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1.1 Funds to be RaisedThe Company is seeking to raise
up to $8.9 million by the offer of
17,800,000 Shares at an issue
price of $0.50 per Share.
The Shares offered under this
Prospectus are fully paid ordinary
shares in the capital of the Company
and will rank equally with all existing
ordinary shares.
1.2 Purpose of the Offer and Utilisation of FundsThe purpose of the Offer is to
raise sufficient funds to enable
the Company to meet its present
and future capital requirements.
Discharge of mortgage 1 $3,519,000
Property transfer costs 2 $316,250
Costs of the Offer 3 $1,000,000
Security for dividends 4 $712,838
Working capital 5 $3,351,912
Total $8,900,000
Notes:
1.This amount will be loaned by
the Company on commercial terms
to Metropolis to enable the Daily
Planet Group’s current debt facility
to be repaid and the security held by
the group’s bankers over the Property
(and other entities and assets within
the Daily Planet Group) to be
discharged. Refer to Section 11.1.2 for
details of the proposed loan
arrangement between the Company and
Metropolis and the reasons for it.
2. The Property transfer costs constitute
the potential stamp duty liability
payable on the transfer of the Property
to the Company. As at the date of this
Prospectus, such liability is not known
and is dependent on the outcome of
an application for reconstruction relief
made to the State Revenue Office on
26 November 2002. If successful, the
amount of $316,250 will be used as
working capital.
3. The costs of the Offer include the
costs incurred in relation to the
preparation, printing and distribution
of the Information Memorandum and
any broker’s commission payable.
4. Refer to Section 2.3 for further
information regarding the security
for dividends.
5. Refer to Section 2.7 for further
information regarding the Company’s
future activities and the utilisation of
working capital.
1.3 Minimum Subscription AmountThe Offer is conditional on the receipt
of valid applications for Shares to the
value of $6,000,250 (“Minimum
Subscription Amount”). Until valid and
binding applications to the value of the
Minimum Subscription Amount have
been received, Cameron Lane Pty Ltd
will not transfer the Property to the
Company, and the Company will not
process applications or allot Shares.
The funds received will be placed in
a trust bank account pending allotment
of Shares or the refunding of application
monies. If the Minimum Subscription
Amount is not reached by 28 February
2003, the Company will refund
application monies in full to applicants.
No interest will be paid on application
monies refunded. Any interest earned
will be retained by the Company.
1.4 Utilisation of Funds ifOffer Not Fully SubscribedIf exactly the Minimum Subscription
Amount is received, the funds raised
will be utilised in the following manner:
Discharge of mortgage $3,519,000
Property transfer costs $316,250
Costs of the Offer $865,000
Working capital $1,500,000
Total $6,200,250
In the event that the Minimum
Subscription Amount is received but
less than $8.9 million is raised, the
rental payable under the lease of the
Property will be set at such a level as is
necessary to ensure that the projected
annualised pre-tax return to holders of
the Shares is 10.00% p.a. in the part year
ending 30 June 2003.
If the Offer is fully subscribed, the
commencing annual rental payable
by Daily Planet Australia Pty Ltd will be
$661,880. If the Minimum Subscription
Amount is raised the commencing rental
will be approximately $493,948.
Any funds raised in excess of the
Minimum Subscription Amount will
be first applied towards the security for
dividends, before being applied towards
working capital.
The costs of the Offer will vary
depending on the amount of
commission payable to the broker.
Refer to Section 2.7 regarding
the utilisation of working capital.
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1.5 Capital StructureAs at the date of this Prospectus, the
Company is 100% owned by Cameron
Lane Pty Ltd as trustee for the Cameron
Lane Unit Trust. John Trimble is the sole
director and sole beneficial shareholder
of Cameron Lane Pty Ltd, and an
ultimate beneficiary of the Cameron Lane
Unit Trust.
If the Offer is fully subscribed,
the capital structure of the Company
will be as follows:
No. on issue %
Ordinary Shares 17,800,000 40.4%
B Class Shares* 26,283,336 59.6%
Total 44,083,336 100%
*Held by Cameron Lane Pty Ltd
1.6 ASX ListingWithin 7 days after the lodgement of
this Prospectus, application will be made
by the Company to be admitted to the
official list of the ASX and for the
quotation of the Company’s ordinary
shares, including the Shares offered
under this Prospectus.
1.7 Offer Period
Offer opens 29 November 2002
Offer closes 28 February 2002*
*At 5.00pm Melbourne, Australia time,
subject to the right of the Company to
alter the timetable (Refer to Section 1.8).
1.8 How to InvestApplications for Shares can only be
made by completing the Application
Form attached to this Prospectus in
accordance with the instructions
contained on the reverse of the form.
Completed Application Forms must be
accompanied by a cheque drawn on an
Australian Bank made payable in
Australian currency to “The Daily Planet
Limited Share Offer” and crossed “Not
Negotiable” for an amount of $2000 or
more. Completed Application Forms and
cheques are to be delivered to:
Computershare Investor Services
Pty Limited
Level 12, 565 Bourke Street
Melbourne, Victoria 3000
Your completed Application Form and
cheque must reach the above address
no later than 5.00pm Melbourne,
Australia time on 28 February 2003. The
Company reserves the right to alter the
investment timetable without notice or
discontinue the Offer without issuing or
allotting some or any Shares. Investors
are therefore encouraged to lodge their
applications as soon as possible.
No additional fees, commissions or
charges will be payable by investors in
respect of the Shares.
1.9 Investor EnquiriesInvestor enquiries should be directed to:
Cameron Stockbrokers Limited
on (02) 9232 7700
or
Computershare Investor Services Pty
Limited on 1300 850 505
or
the Company on (03) 9528 1766
No person is authorised to give any
information or to make any
representation in connection with the
Offer which is not contained in this
Prospectus. Any information or
representation not so contained may not
be relied on as having been authorised by
the Company in connection with the Offer.
1.10 Allocation of Shares and Conditions of InvestmentThe Company reserves the right to reject
any application or to authorise the issue
of a lesser number of Shares than those
applied for. Where the number of Shares
granted is less than the number applied
for, surplus application monies will be
refunded (less any interest earned) as
soon as practicable.
Any application accepted by the
Company is accepted on the condition
that the applicant does not have an
interest in any current licence authorising
the carrying on of a business of providing
prostitution services, nor an interest in
any unexpired permit granted for the use
of land for the purpose of the operation
of a brothel, within the meaning of those
terms in section 75 of the Prostitution
Control Act.
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2.1 IntroductionThe Company is an Australian public
company incorporated on 3 July 2002
as a special purpose investment vehicle
to own and manage the property located
at 7-12 Horne Street, Elsternwick,
Victoria, Australia (“Property”).
The Directors of the Company are
John Trimble, Andrew Harris and Shane
Maguire. Refer to Section 5 below for
more information on the experience and
qualifications of the Company’s
management team.
2.2 Company’s ActivitiesSubject to the Offer proceeding, the
Company’s sole activity will initially be
the ownership and management of the
Property. On 27 November 2002, the
Company entered into a 50 year lease
(plus options totalling 50 years) with
Daily Planet Australia Pty Ltd. Refer to
Section 11.1.1 for further information on
the leasing arrangements.
2.3 Forecast ReturnsThe Company is forecasting an
attractive annualised partly franked return
of 8.13% p.a. averaged over the next 27
months. Most Australian resident investors
(including superannuation funds) will be
able to enjoy the benefit of the imputation
credits attaching to the partly franked
dividends. For those investors, the
effective annualised rate of return will
increase to an average of 10.44% p.a. over
the forecast 27 month period.
Refer to Section 2.4 for further
information regarding the utilisation
of imputation credits and to Sections
5.7 and 6.2 for discussion of the factors
affecting the forecast returns and the
assumptions on which they are based.
Dividends will be paid on a twice yearly
basis. Subject to the Offer being fully
subscribed, the Directors will
demonstrate their commitment to the
payment of regular dividends by
ensuring that an amount, calculated by
reference to the projected after-tax profit
of the Company for the first year, is held
separately in an interest bearing account
at all times during the forecast period.
If the Offer is fully subscribed the sum
of $712,838 will be held in such an
account. On the expiry of the forecast
period the Directors will consider how
these funds can best be utilised in the
interests of shareholders.
If only the Minimum Subscription Amount
is raised, no such amount will be set
aside as security for dividends. Refer to
Section 1.4 for details of the manner in
which funds will be utilised if only the
Minimum Subscription Amount is raised.
Investors should note, however, the
payment of dividends is subject to
sufficient profits being available for
distribution in accordance with the
requirements of the Corporations Act.
2.4 TaxationThe intention of the following
information is to provide a guide to the
general taxation position of the holders
of ordinary shares. It does not purport to
be a complete analysis or identification
of all potential taxation consequences
nor is it intended to replace the need for
specialist taxation advice in respect of
the particular circumstances of
individual shareholders
2.4.1 Utilisation of imputation credits
Where shares have been held for at
least 45 whole days after acquisition,
the shareholder will get the benefit of
any imputation (franking) credits issued
during this period. The Australian
Taxation Office will not allow the
imputation credits to be used if the
shares are sold within 45 days of
acquisition. The only exemption is
individuals whose imputation credit
entitlement for the income year is less
than $5,000.
A discretionary trust will not be able
to satisfy the 45-day rule. Therefore a
discretionary trust that is a shareholder
in the Company will not be able to pass
imputation credits to its beneficiaries.
The only exception to this rule is where
the trustees of the discretionary trust
elect to become a “family trust”.
Trustees should seek taxation advice
with respect to making such an election.
Following amendments to the Income
Tax Assessment Act 1997 effective 1 July
2000, investors whose marginal tax rate
is lower than the company tax rate of
30% (eg. superannuation funds taxed
at 15%) have been able to utilise the
benefit of excess imputation credits.
2.4.2 Australian withholding tax on dividends
Overseas shareholders will be exempt from
Australian withholding tax where they
receive franked dividends. Although the
Company will endeavour to consistently
pay shareholders franked dividends, where
unfranked dividends are received
Australian withholding tax is required to be
paid. The dividend withholding rate will
vary between 5% to 30%.
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2.4.3 Calculation of Capital Gains Tax (“CGT”) on disposal
All shareholders will potentially pay CGT
when they sell their shares. As all shares
will be acquired after 21 September
1999, the discount capital gain method
may be available when calculating the
capital gain on disposal.
The discount capital gain method may
be available to individuals, trusts and
complying superannuation funds where
the shares are held for more than 12
months. Individuals and trusts may be
able to reduce for tax purposes their
capital gain by 50%. A complying
superannuation fund may be able to
reduce for tax purposes its capital gain
by 33 1/3%.
A shareholder may incur a capital loss
where shares are disposed of for a price
less than cost incurred in acquiring the
shares. The capital loss may be available
to offset against capital gains earned in
the same year of income or may be
carried forward to be offset against
future capital gains. The capital loss
cannot be used to offset other
assessable income.
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The Daily Planet Limited100% owned by Cameron Lane Pty Ltd
Daily Planet Australia Pty Ltd(operator of the Daily Planet)
100% ordinary shares owned by John Trimble
Daily Planet7 – 12 Horne Street, Elsternwick, Victoria
Metropolis (owner of the Daily Planet)
100% ordinary shares owned by John Trimble
2.5 Existing Ownership and Cash Flow Structure
Lease Rental Revenue
Reimbursement of expenses
The Daily Planet Limited59.6% B class shares owned by Cameron Lane Pty Ltd
40.4% ordinary shares owned by the public
Daily Planet Australia Pty Ltd(operator of the Daily Planet)
100% ordinary shares owned by John Trimble
Daily Planet7 – 12 Horne Street, Elsternwick, Victoria
Metropolis(owner of the Daily Planet)
100% ordinary shares owned by John Trimble
Lease Rental Revenue
2.6 Proposed Ownership and Cash Flow Structure
Payment of expenses
Reimbursement of expenses
Payment of expenses
2.7 Future ActivitiesSection 6 sets out the Company’s
projected operating revenue and
expenses for the next 27 months.
In addition, the Directors will
consider expanding and diversifying the
Company’s operations during this period
by developing or acquiring a similar
business to the Daily Planet in the
Sydney CBD, and by the acquisition
of businesses operating in related
industries throughout Australia.
To this end the Directors have examined
a range of potential sites and have
conducted preliminary discussions with
the owners of several existing businesses.
If a suitable development site in
Sydney is identified and the proposal to
develop a similar business to the Daily
Planet in the Sydney CBD proceeds, the
Company intends to contract Nascon
Australia Pty Ltd, the sole director and
shareholder of which is Andrew Harris,
on commercial terms to act as project
manager on the development.
Since 1995, prostitution has been
decriminalised in New South Wales and
it is no longer an offence to live off the
earnings of prostitution. Subject to
compliance with local planning laws,
there are no restrictions on who may
operate a brothel and to whom the
profits of the business may be
distributed. The NSW Government has
recently rejected proposals to introduce
a licensing regime for brothels similar
to that introduced in Victoria in 1994.
The timing of any such expansion or
diversification of the Company’s
activities will be determined by the
Directors following proper consideration
of all relevant factors, including the
provisions of the Corporations Act and,
the ASX Listing Rules.
The possible acquisition of businesses
operating in related industries will be
assessed by the Directors from time to
time as opportunities arise.
The Directors’ current intention is that
expenses incurred as a result of any
expansion and/or diversification of the
Company’s activities will be primarily
funded by further capital raisings.
Investors should be aware that the
forecast returns contained in this
Prospectus are based on the Company’s
activities during the forecast period being
limited to the ownership and
management of the Property. However, by
raising a significant amount of working
capital the Directors believe this will
provide them with the flexibility necessary
to give effect to the future opportunities
outlined in this Section 2.7.
Investors should also be aware of the
possibility that the forecast returns may
decrease (at least in the short term)
should further ordinary shares be issued
as part of future capital raisings or some
or all of the working capital is used to
pursue such opportunities.
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3.1 IntroductionOver the past three decades the
Property has become a well known
Melbourne landmark.
Acquired separately by Cameron
Lane Pty Ltd between 1983 and 1985,
the properties comprising 7-12 Horne
Street, Elsternwick, Victoria, were
consolidated in 1987.
The Property will be transferred from
Cameron Lane Pty Ltd to the Company
as soon as practicable following the
successful completion of the Offer
on 28 February 2003. Refer to Section 1.3
for details of the basis on which the Offer
will proceed.
3.2 Key FeaturesLocated close to the Melbourne CBD in
the bayside suburb of Elsternwick, the
Property is a large 829m2 block adjacent
to the Glenhuntly Road shopping strip
(see Melways map reference 67 F3). The
total floor area of the premises is 1031m2.
Following major refurbishments in 1988,
1994 and most recently in 2002, the
Property is structurally sound and
superbly fitted-out.
A planning permit was issued in 1989
by the Council of the City of Caulfield to
allow the operation of an 18-room legal
brothel on the Property. This is the only
permit in Victoria allowing such a large
number of rooms.
The completion of a development adjacent
to the Property is expected to increase the
car parking facilities in the area.
3.3 Building Condition ReportFor further information regarding the
condition of the Property and the
building, please refer to the summary of
the independent building condition report
set out in Section 8. The full report will be
made available for inspection during
business hours free of charge at the
Company’s registered office.
3.4 EncumbrancesSubject to the Offer proceeding, the
mortgage over the Property will be
discharged. Please refer to Section 1.2
above for further information about the
manner in which funds raised will be
utilised and Section 11.1.2 for details of
the current security held over the assets
of the Daily Planet Group.
3.5 ValuationAn independent qualified valuer has
valued the Property and buildings at
$5.75 million.
Refer to the summary of the valuation
contained in Section 9. A full copy of the
sworn valuation will be made available for
inspection during business hours free of
charge at the Company’s registered office.
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John Dennis Trimble (age 56)ExecutiveChairman
Following a distinguished career in the
First Commando Company of the Army
Reserve, John Trimble took over the
Daily Planet in 1975. Over the past
three decades he has built the Daily
Planet into one of the most successful
and recognisable brothels in Australia.
Until 1991, John continued to personally
manage the Daily Planet on a day-to-day
basis before delegating the role to a full-
time manager. This enabled him to
pursue other interests - including
property development and a charter
boat operation.
In addition to his business interests,
John has been involved in motor racing
for several years with his touring car
team "Daily Planet". During the 1990's
his team won the Sandown 500 and the
Bathurst Privateer Class.
John currently lives in Queensland and
breeds fine wool Merinos at his farm on
King Island. He still maintains a keen
interest in the Daily Planet, commuting
regularly to oversee operations.
Andrew Harris (age 53)Managing Director
Andrew Harris completed a
distinguished career in the Armed
Services commencing in 1968 and
concluding in 1979. During this period
he served with the Army Reserves from
1968-1971 in the Military Police.
Volunteering for National Service in 1971,
he completed basic training followed by
selection to and graduation from
the Officer Cadet School at Portsea.
Graduating as a Second Lieutenant, he
was selected for service with the Second
Battalion Pacific Island Regiment from
1973-1976 (self-government to
independence). He was selected to serve
in the elite Special Air Service Regiment
(SAS) in 1976 and promoted to the rank
of Captain. During his service with the
SAS he was trained as a parachute and
free fall instructor and obtained
numerous other qualifications including
counter terrorism. On completing his
military career in 1979 Andrew was
awarded several medals in recognition
of his service.
In 1979 Andrew commenced his business
career which, until 1984, included the
establishment and operation of
Australia's largest parachute school and
a successful media career as a guest
host on Channel 9's Mike Walsh Show
and Channel 10's Together Tonight. He
also completed television commercials
and competed at the highest level in
touring cars, which included him winning
Rookie of the Year at Bathurst in 1983.
His property development career
commenced when he was appointed as
a director of The George Harris Group of
Companies followed by the
establishment of his own companies,
the main of which are Nascon Australia
Pty Ltd and Nascon Constructions (Aust)
Pty Ltd.
From 1984 until 2001 he completed
numerous major projects for both Coles
Myer and Woolworths, collectively
valued at approximately $400,000
million. These shopping centres are
located in nearly every state in Australia.
During this period Andrew also
developed warehouses, office buildings
and the Eastern Stand at Optus Oval.
Andrew's career was interrupted in mid
1988 when his aircraft was forced down
in bad weather whilst flying to his farm
on King Island. Despite suffering severe
injuries in the accident, the rescuing of
his passenger resulted in him being
awarded the Star of Courage.
From 1988 until the most recent
refurbishment in 2002 he has at various
times been involved in the management
and redevelopment of the Daily Planet.
Andrew is currently overseeing the
management of the Daily Planet and,
together with John Trimble, is committed
to the success of The Daily Planet Limited.
Andrew has the right balance of media,
property and other management expertise
to ensure that The Daily Planet Limited is
effectively managed into the future.
Shane BernardMaguire (age 54)Non-executiveDirector
Shane Maguire was admitted to
practice as a Barrister and Solicitor of
the Supreme Court of Victoria in 1973.
Since 1975 he has been a partner in the
law firm Adams Maguire Sier. Shane has
extensive experience in the areas of
litigation and commercial law and has
utilised that experience to advise
businesses and organisations about
their operations and structures.
Shane has also been a member of
the AFL Tribunal since 1991 and was
appointed as Deputy Chairman of
the Tribunal in 1996. Following an
outstanding career as an amateur
footballer for North Old Boys, he
continued his involvement as an
administrator and selector. He has
received numerous awards for his
contribution to Victorian football,
including the Australian Sports
Medal for services to football
in 2000.
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As with any investment in securities
there are both general risks relating
to investment in securities and specific
risks which relate to the operations of
the Company and the industry in which
it operates.
Such risks could impact on the value
of the securities of the Company and
the Property, as well as the performance
of the Company. The Directors have
identified the following major risks,
but not necessarily all risks, relevant
to the investment and the prospects
of the Company.
Prior to making an investment decision,
investors should carefully consider the
risk factors that may affect the Company
and the industry in which it operates,
as well as other information set out in
this Prospectus.
5.1 Performance of theTenantIf the business operated by Daily
Planet Australia Pty Ltd fails to generate
sufficient revenue to enable that company
to meet its obligations to pay rent,
outgoings and the costs of capital
improvements under the lease of the
Property, or John Trimble or Metropolis
fail to comply with their respective
obligations under the deed dated 27
November 2002 (refer to Section 11.1.2
above), the profits of the Company may
be adversely affected. In such
circumstances shareholders may not
receive their dividends, or at least may
not receive them on time. The Company
cannot be required to distribute dividends
to shareholders if there are insufficient
profits to do so. The market value of the
Shares may also be adversely affected in
such circumstances.
Other than the fixed and floating charge
referred to under the heading “Operation
of the Business” in Section 11.1.2, the
obligations of Daily Planet Australia Pty Ltd
are not secured in any way by a personal
guarantee or other form of security.
The Directors are confident, however, that
the solid financial performance of the
Daily Planet over the past three decades,
whilst not a guarantee, ensures that the
risk of default by the tenant is minimised.
5.2 Default by MetropolisCity Promotions Pty LtdIf Metropolis fails to comply with its
obligations under the Facility Agreement,
the profits of the Company may be
adversely affected and shareholders may
not receive their dividends, or at least
may not receive them on time. In such
circumstances, the Company may seek
to enforce its rights under the Facility
Agreement to require the sale of the
assets secured under that agreement.
If the amount obtained from the sale of
such assets is insufficient to satisfy the
obligations of Metropolis under the
Facility Agreement, the Company will
incur a loss unless the shortfall can be
obtained from the guarantors.
Refer to Section 11.1.2 for a summary
of the terms of the Facility Agreement.
5.3 VacancyThe lease extends for 50 years (plus
options for further terms totalling 50
years), however if the lease were to
prematurely terminate the Company
would seek to find a new tenant. While
such a vacancy exists, the Company’s
income would decrease and the value
of the Property might be affected. The
Company might have to pay
commissions to estate agents to
introduce tenants or provide incentives
to attract a tenant. All these expenses
would be paid from Company funds.
To protect the Company’s earnings in the
event that the business of the Daily
Planet is interrupted, insurance cover of
up to $1,750,000 (in any one year) has
been obtained.
Investors must be aware that the rental
payable under the lease of the Property
and the projected rates of return are not
necessarily indicative of the underlying
value of the Property. If a new tenant were
to take possession of the Property and a
different business operated from it, it is
likely that the rental payable and the rates
of return would decrease significantly.
The Directors are not aware of any
reason why such a premature termination
would occur.
5.4 Key PersonnelThe future success of the Company is
largely dependent on a number of key
personnel employed by the Company.
The loss of one or more of these people
would have an adverse impact on the
Company’s business.
Due to the provisions of the Prostitution
Control Act requiring prostitution service
providers’ licences to be held by
individuals rather than bodies corporate,
the continued involvement of at least
one Director holding such a licence is
critical to the ongoing success of the
Company. John Trimble has held a licence
since 1994 and Andrew Harris has
submitted an application to the Business
Licensing Authority to obtain a licence.
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The Directors also recognise the
importance of maintaining those
licences and have introduced the
policies and procedures necessary to
ensure compliance by all staff with the
requirements of the Prostitution Control
Act and other relevant legislation.
5.5 Operating HistoryHaving been incorporated on 3 July
2002, the Company has no significant
historical financial information or
operating history. However, the
Company has a very secure source
of income, namely the Daily Planet,
an organisation that has operated
successfully for nearly 30 years.
5.6 Future Capital RaisingsThe achievement of the Company’s
goals and objectives may be adversely
affected if future capital raisings are
unsuccessful. In such event, the
Company may be forced to extend the
timetable for, or discontinue entirely,
its plans to expand and diversify the
Company’s activities in the future.
5.7 Payment of DividendsHolders of the Shares are not guaranteed
a dividend payment. Payment of
dividends is subject to the Directors
declaring or otherwise resolving to pay
a dividend and there existing no legal
impediment to the Company paying the
dividend. Dividends are non-cumulative
and, therefore, if a dividend is not paid in
any period it need not be made up in any
subsequent period.
The Company is entitled to issue
further ordinary shares (and options
over shares) that rank equally with the
Shares offered under this Prospectus
without the approval of the shareholders
in general meeting. The number of
ordinary shares may also be increased
as a result of the conversion of B class
shares into ordinary shares or the
exercise of any options issued under the
Executive Option Plan. An increase in the
number of ordinary shares on issue
(whether by issue, conversion or
exercise of options) may decrease
the dividends paid on the Shares.
In addition, the Company may, without
the approval of the shareholders in
general meeting, issue other securities
that rank ahead of the Shares for
dividends or payment on a winding up of
the Company. No prediction can be made
as to the effect, if any, such future issues
of shares or options or the conversion of
B class shares may have on the market
price of the Shares.
An increase in Directors’ remuneration
may also result in a decrease in dividends
paid. Similarly, if the Company exercises
its option to acquire the Intellectual
Property, returns may decrease.
Returns may also vary following the
repayment of the loan to Metropolis
depending on the rate of return the
Company can obtain on the repaid funds.
Refer to Sections 11.3 and 11.4 for a
summary of the rights attaching to
ordinary shares and B class shares and
the circumstances in which the B class
shares may be converted into ordinary
shares. Refer also to Section 11.5 for
details of the Executive Option Plan.
5.8 General InvestmentRisksGeneral investment risks include:
• changing local or world economic
conditions;
• changes in property market
conditions, including the value and
level of demand for commercial
properties in Melbourne;
• legislative changes, including in
relation to taxation, accounting and
the regulation of the prostitution
services industry;
• inflation; and
• natural disasters, social unrest or war
in Australia or overseas.
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6.2 Forecast AssumptionsThe forecasts provided in this
Prospectus have been prepared by
Hayes Knight, Chartered Accountants,
based on information and instructions
received from the Directors of the
Company. They represent an estimate
of future operations and are based on
a number of assumptions (the more
material of which are discussed below)
and are subject to significant
uncertainties and contingencies.
The following assumptions have been
made in the preparation of the financial
information included in this Section 6:
• The Offer is fully subscribed. If the
Offer is not fully subscribed and the
number of ordinary shares on issue
following the Offer is less than
17,800,000, the rental payable by
Daily Planet Australia Pty Ltd to the
Company will be reduced to the
amount required to ensure that the
projected annualised pre-tax return to
holders of ordinary shares is 10.00%
for the part year ending 30 June 2003.
• Cameron Lane Pty Ltd will initially
own 26,283,336 fully paid B class
shares with a value of $5,750,002.
Consideration for these shares will be
made up of the land and buildings at
7-12 Horne Street valued at
$5,750,000 and $2.00 cash.
• The Directors of the Company
have advised that under a lease
arrangement with Daily Planet
Australia Pty Ltd the buildings
will be fully maintained, including all
structural improvements as required
from time to time.
• No capital allowances are available
for the buildings as the premises
were constructed prior to 17 July
1985, when capital allowances on
buildings first became available.
• The land and buildings are stated in
the accounts at fair value as required
by accounting standards. The land
and buildings have been
professionally valued by Asset
Advisory and Valuation Service
at $5,750,000. The building
component of this valuation is
$1,975,000, as advised by the
Directors of the Company.
• The Company will pay the stamp duty
on the transfer of the Property. This
has been calculated at $316,250 and
is added to the cost of the asset.
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6.1 Forecast Earnings
FORECAST STATEMENT OF FINANCIAL PERFORMANCE FOR THE PERIODS ENDING 30 JUNE 2003, 2004 AND 2005Note 3 months ending Year ending Year ending
30 June 2003 30 June 2004 30 June 2005$ $ $
Revenues from ordinary activities 2 272,134 1,107,376 1,136,132
Other expenses from ordinary activities 3 36,125 147,650 150,895
Profit from ordinary activities before income tax expense 236,009 959,726 985,237
Income tax expense relating to ordinary activities 4 13,765 239,768 247,421
Net profit from ordinary activities after income tax expense11 222,244 719,958 737,816
Annualised internal rate of return on investors’ equity of $8.9 million
9.99% 8.07% 8.27%
3 months ending Year ending Year ending30 June 2003 30 June 2004 30 June 2005
$ $ $
Profit available to investors 5 222,244 719,958 737,816
Value of imputation credits - 193,591 245,508
Overall benefit to investors 222,244 913,549 983,324
Effective rate of return on investors’ equity of $8.9 million
10.00%* 10.26% 11.05%
The accompanying notes form part of these financial statements (see page 24).
* The return for 2003 has been annualised and is shown as 10.00% to recognise greater earnings in the latter 9 months compared to the initial 3 months.
• The building has been depreciated over
50 years, being the initial lease term.
• Rent will rise at the lower of CPI
or 4%. For the quarter ended
September 2002, CPI has been 3.0%,
therefore this figure has been used in
the forecast. The source for CPI is the
Reserve Bank of Australia website
tables of consumer price inflation.
Rent reviews will take place on 1 April
each year.
• Rental for the first three month
period is calculated at 3/12 of the
total rental that would be required to
give a projected annualised pre-tax
return of 10.00% for the part year
ending 30 June 2003.
• Expenses are based on estimates
provided by the Directors. Expenses
with the exception of audit fees
are expected to accrue evenly
over the period.
• Interest and expenses (excluding
depreciation) will increase by the
rate of CPI. This is taken as 3.0%.
The source for CPI is the Reserve
Bank of Australia website tables
of consumer price inflation.
• A deposit is held on trust equivalent
to the annualised after-tax profit for
the first part year of trading. This
amounts to $712,838.
• Interest on the term deposit has been
taken at 4.75% for the first year
(increasing in accordance with CPI
thereafter), this being the market rate
for call funds as at 31 October 2002.
The source is the Reserve Bank of
Australia website.
• The Company will lend $3,519,000 to
Metropolis out of the proceeds of the
Offer. Interest will be payable on this
loan at a commercial fixed interest
rate of 6.55% per annum over the
5 year term of the loan. Metropolis
will use the loan of $3,519,000 to
immediately repay the Daily Planet
Group’s existing debt finance.
• For the first three month period
dividends are payable on 30 June
only. For the rest of the forecast
period dividends are payable twice
yearly in advance, on 31 December
and 30 June.
• The entire profit will be distributed
to the holders of ordinary shares.
• The Company utilises all franking
credits available to it.
• Following the completion of the
Offer, Cameron Lane Pty Ltd is to own
59.6% of the Company in the form of
B class shares with no entitlement to
a dividend.
• The income tax rate for companies
remains at 30% for the period
covered by the forecast.
• Metropolis will agree to cover all
the expenses of Daily Planet Australia
Pty Ltd in relation to the business,
including the rental payable under
the lease of the Property. Payments
to Daily Planet Australia Pty Ltd will be
made by way of a management fee.
• If the Offer is fully subscribed, the
listing costs incurred by the Company
will be $1,000,000 (excluding GST).
• The B class shares have a right of
conversion into ordinary shares at any
time on the election of the holder of
the B class shares. For the purposes of
these forecasts, it is assumed that
Cameron Lane Pty Ltd does not
exercise its right to convert any B class
shares during the forecast period.
• The number of ordinary shares on
issue throughout the forecast period
is 17,800,000.
• The Company does not exercise its
option to acquire the Intellectual
Property during the forecast period.
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6.3 Forecast Statement of Financial Position
FORECAST STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2003, 2004 AND 2005Notes 2003 2004 2005
$ $ $
CURRENT ASSETS
Cash assets 6 3,400,476 3,486,128 3,528,288
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Cash assets 6 712,838 712,838 712,838
Loans to related parties 7 3,519,000 3,519,000 3,519,000
Land and Buildings 8 6,056,375 6,016,875 5,977,375
TOTAL NON-CURRENT ASSETS 10,288,213 10,248,713 10,209,213
TOTAL ASSETS 13,688,689 13,734,841 13,737,501
CURRENT LIABILITIES
Current tax liabilities 9 13,765 59,942 61,855
Other Liabilities 10 24,922 24,897 25,644
TOTAL CURRENT LIABILITIES 38,687 84,839 87,499
TOTAL LIABILITIES 38,687 84,839 87,499
NET ASSETS 13,650,002 13,650,002 13,650,002
EQUITY
Contributed equity 11 13,650,002 13,650,002 13,650,002
Reserves – – –
Retained profits 12 – – –
TOTAL EQUITY 13,650,002 13,650,002 13,650,002
The accompanying notes form part of these financial statements (see page 24).
NOTE 1: STATEMENTOF SIGNIFICANTACCOUNTING POLICIES The financial report is a general
purpose financial report that has been
prepared in accordance with Accounting
Standards, Urgent Issues Group
Consensus Views, other authoritative
pronouncements of the Australian
Accounting Standards Board and the
Corporations Act.
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. Cost is based on
the fair values of the consideration given
in exchange for assets.
The following is a summary of the
material accounting policies adopted by
the economic entity in the preparation of
the financial report. The accounting
policies have been consistently applied,
unless otherwise stated.
a. Income Tax
The economic entity adopts the liability
method of tax-effect accounting whereby
the income tax expense is based on the
profit from ordinary activities 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
accounting profit and taxable income are
brought to account as either a provision
for deferred income tax or as a future
income tax benefit at the rate of income
tax applicable to the period in which the
benefit will be received or the liability will
become payable. Future income tax
benefits are not brought to account unless
realisation of the asset is assured beyond
any reasonable doubt. Future income tax
benefits in relation to tax losses are not
brought to account unless there is virtual
certainty of realisation of the benefit.
The amount of benefits brought to
account or which may be realised in
the future is based on the assumption
that no adverse change will occur in
income taxation legislation, and the
anticipation that the economic entity
will derive sufficient future assessable
income to enable the benefit to be
realised and comply with the conditions
of deductibility imposed by the law.
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STATEMENT OF CASH FLOWS FOR THE PERIODS ENDING 30 JUNE 2003, 2004 AND 2005Note 3 months ending Year ending Year ending
30 June 2003 30 June 2004 30 June 2005$ $ $
CASH FLOWS FROM OPERATING ACTIVITIES
Gross rental receipts 182,017 733,528 755,533
Interest received on bank balance 49,040 210,037 218,788
Interest received on related party loan 57,624 230,495 230,495
Payments to suppliers and employees (17,875) (118,635) (122,194)
Income tax paid - (193,591) (245,508)
GST received / (paid) 75,000 (56,224) (57,138)
Net cash provided by operating activities 13 345,806 805,610 779,976
CASH FLOWS FROM INVESTING ACTIVITIES
Loans made to related parties (3,519,000) – –
Stamp duty paid on transfer of Property (316,250) – –
Net cash provided by / (used in) investing activities (3,835,250) – –
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares 8,900,000 – –
Gross Issue costs (1,075,000) – –
Dividends paid (222,244) (719,958) (737,816)
Net cash provided by (used in) financing activities 7,602,756 (719,958) (737,816)
Net increase in cash held 4,113,312 85,652 42,160
Cash at 1 July 2 4,113,314 4,198,966
Cash at 30 June 6 4,113,314 4,198,966 4,241,126
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIODS ENDING 30 JUNE 2003, 2004 AND 2005
b. Land and Buildings
Freehold land and buildings are measured
on a cost basis, being the amount for
which an asset could be exchanged
between knowledgeable willing parties
in an arm’s length transaction.
c. Revenue
Interest revenue is recognised
on a proportional basis taking into
account the interest rates applicable
to the financial assets.
Rental income is received via a
management company under a
rental agreement.
d. Goods and Services Tax (GST)
Revenues, expenses and assets are
recognised net of the amount of GST,
except where the amount of GST
incurred is not recoverable from the
Australian Tax Office. In these
circumstances the GST is recognised
as part of the cost of acquisition of the
asset or as part of an item of the
expense. Receivables and payables
in the Statement of Financial Position
are shown inclusive of GST.
e. Depreciation
The depreciable amount of all fixed
assets including building and capitalised
lease assets, but excluding freehold land,
is depreciated on a straight line basis
over their useful lives to the economic
entity commencing from the time the
asset is held ready for use. Leasehold
improvements are depreciated over the
shorter of either the unexpired period of
the lease or the estimated useful lives of
the improvements.
The depreciation rates used for each
class of depreciable assets are:
Class of Fixed Asset Depreciation Rate
Buildings 2%
f. Cash
For the purpose of the statement of cash
flows, cash includes cash on hand and at
call deposits with banks or financial
institutions, net of bank overdrafts.
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NOTE 2: REVENUENote 3 months ending Year ending Year ending
30 June 2003 30 June 2004 30 June 2005$ $ $
Operating activities
– rental 14 165,470 666,844 686,849
– interest from term deposits 49,040 210,037 218,788
–interest from related party loans 57,624 230,495 230,495
Total revenue 272,134 1,107,376 1,136,132
NOTE 3: PROFIT FROM ORDINARY ACTIVITIES Note 3 months ending Year ending Year ending
30 June 2003 30 June 2004 30 June 2005$ $ $
Expenses
Administration 6,250 56,650 58,350
ASX listing fees 2,125 8,755 9,018
Audit Fees 10,000 10,300 10,609
Bank Charges 300 1,236 1,273
Depreciation 8 9,875 39,500 39,500
Directors’ and officers’ insurance 1,250 5,150 5,305
Directors’ fees 15 75 309 318
Share registry fees 6,250 25,750 26,522
Total 36,125 147,650 150,895
NOTE 4: INCOME TAX EXPENSE The prima facie tax payable on profit from ordinary activities before income tax is reconciled to the income tax expense as follows:
Note 3 months ending Year ending Year ending30 June 2003 30 June 2004 30 June 2005
$ $ $
Income tax payable on operating profit at 30% 70,803 287,918 295,571
Add tax effect of:
– non-deductible depreciation 2,962 11,850 11,850
Less tax effect of:
– issue costs deductible over five years (60,000) (60,000) (60,000)
Income tax expense attributable to profit from ordinary
activities before income tax 13,765 239,768 247,421
Future income tax benefits not brought to account:
– issue costs deductible over five years 240,000 180,000 120,000
NOTE 5: DIVIDENDSNote 3 months ending Year ending Year ending
30 June 2003 30 June 2004 30 June 2005$ $ $
Ordinary shares
Unfranked dividend of $0.012 per Share 11 222,244 – –
Dividend of $0.040 per Share partly franked 11 – 719,958 –
Dividend of $0.041 per Share partly franked 11 – – 737,816
NOTE 6: CASH ASSETSNote 2003 2004 2005
$ $ $
Cash at bank 3,400,476 3,486,128 3,528,288
Deposits held on Trust 712,838 712,838 712,838
4,113,314 4,198,966 4,241,126
NOTE 7: LOANS TO RELATED PARTIESNote 2003 2004 2005
$ $ $
Loan to Metropolis City Promotions Pty Ltd
atf the John Trimble Family Trust 14 3,519,000 3,519,000 3,519,000
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NOTE 8: LAND AND BUILDINGSNote 2003 2004 2005
$ $ $
Freehold land:
– freehold land at cost 3,775,000 3,775,000 3,775,000
– stamp duty on transfer 316,250 316,250 316,250
Total freehold land 4,091,250 4,091,250 4,091,250
Buildings:
– buildings at cost 1,975,000 1,975,000 1,975,000
Less accumulated depreciation 9,875 49,375 88,875
Total buildings 1,965,125 1,925,625 1,886,125
Total land and buildings 6,056,375 6,016,875 5,977,375
Movements in Carrying Amounts
Balance at the beginning of the year – 6,056,375 6,016,875
Additions at cost 6,066,250 – –
Disposals – – –
Revaluation increments/ (decrements) – – –
Depreciation expense 9,875 39,500 39,500
Carrying amount at the end of the year 6,056,375 6,016,875 5,977,375
NOTE 9: CURRENT TAX LIABILITIESNote 2003 2004 2005
$ $ $
Income tax 13,725 59,942 61,855
NOTE 10: OTHER LIABILITIESNote 2003 2004 2005
$ $ $
Current
GST payable 14,922 14,597 15,035
Accruals 10,000 10,300 10,609
24,922 24,897 25,644
NOTE 11: CONTRIBUTED EQUITYNote 2003 2004 2005
$ $ $
17,800,000 fully paid ordinary shares 11a 7,900,000 7,900,000 7,900,000
26,283,336 fully paid B class shares 11b 5,750,002 5,750,002 5,750,002
13,650,002 13,650,002 13,650,002
a. Fully Paid Ordinary Shares
At beginning of reporting period – 7,900,000 7,900,000
Issue of 17,800,000 shares at $0.50 each 8,900,000 – –
Transaction costs relating to share issues (1,000,000) – –
At reporting date 7,900,000 7,900,000 7,900,000
Ordinary shares participate in dividends, and in the proceeds on winding up of the Company in proportion to the number of shares
held. At shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has
one vote on a show of hands.
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b. B Class SharesNote 2003 2004 2005
$ $ $
At beginning of reporting period 2 5,750,002 5,750,002
Issue of 26,283,334 shares 5,750,000 – –
At reporting date 5,750,002 5,750,002 5,750,002
B class shares do not participate in dividends, but do participate in the proceeds on winding up of the Company in proportion
to the number of shares held. At shareholders’ meetings each B Class share is entitled to one vote when a poll is called, otherwise
each shareholder has one vote on a show of hands. B class shares have the right of conversion into an equivalent number of
ordinary shares if the rental payable under the lease of the Property is increased in accordance with the formula set out in
Appendix A of the Company’s Constitution (refer to Section 11.4).
NOTE 12: RETAINED PROFITSNote 3 months ending Year ending Year ending
30 June 2003 30 June 2004 30 June 2005$ $ $
Retained profits at the beginning of the financial year – – –
Net profit attributable to members of the Company 222,244 719,958 737,816
Dividends paid (222,244) (719,958) (737,816)
Retained profits at the end of the financial year – – –
NOTE 13: CASH FLOW INFORMATIONNote 3 months ending Year ending Year ending
30 June 2003 30 June 2004 30 June 2005$ $ $
Reconciliation of Cash Flow from Operations with Profit
from Ordinary Activities after Income Tax
Profit from ordinary activities after income tax 222,244 719,958 737,816
Non-cash flows in profit from ordinary activities
– Depreciation 9,875 39,500 39,500
Changes in assets and liabilities
Increase in trade creditors and accruals 24,922 (25) 747
Movement in income taxes payable 13,765 46,177 1,913
GST paid on issue costs 75,000 – –
Net cash provided by operating activities 345,806 805,610 779,976
NOTE 14: RELATED PARTY TRANSACTIONSThe Company receives rental income from Daily Planet Australia Pty Ltd. The rental income is derived from a 50-year lease on the
property at 7 – 12 Horne Street. The rental income is $165,470 (exclusive of GST ) for the first three-month period ending 30 June
2003. Rent reviews will be conducted annually, and the rent will be increased by the lower of CPI or 4%. Daily Planet Australia Pty
Ltd has a formal arrangement with Metropolis whereby Daily Planet Australia Pty Ltd undertakes the management of, and pays all
expenses for, the Daily Planet gentlemen’s club including rent, which are then reimbursed by Metropolis. Cameron Lane Pty Ltd, a
related entity, acquired 26,283,334 B class shares in the Company under the issues described in Note 11b above. During the period
ended 30 June 2003, the Company loaned Metropolis the amount of $3,519,000. The facility provided is an interest only loan
repayable in July 2007, and is renewable at the discretion of the Company. Interest is payable monthly on the loan at a commercial
fixed interest rate of 6.55% per annum. Refer to Section 11.1.2 for a summary of the terms of the Facility Agreement.
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NOTE 15: DIRECTORS REMUNERATION3 months ending Year ending Year ending
30 June 2003 30 June 2004 30 June 2005$ $ $
Income paid or payable to all Directors of the Company 75 309 318
Number of Directors whose income from the entity was within the following band:
$0 – $9,999 3 3 3
The names of Directors of the Company who have held office during the financial year are:
Mr. John Trimble
Mr. Andrew Harris
Mr. Shane Maguire
NOTE 16: SEGMENT REPORTINGThe activities of the Company are entirely undertaken within Australia.
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6.4 Proforma Statement of Financial PositionNote Prior to Issue $ Effect of Issue $ After Issue $
ASSETS
Cash at bank 2g 2 3,276,912 3,276,914
Deposits held on Trust 2f – 712,838 712,838
Total cash at bank and on hand 2 3,989,750 3,989,752
GST recoverable on float costs 2d – 75,000 75,000
Land and buildings
- freehold land at cost 2a – 3,775,000 3,775,000
-stamp duty on transfer of Property 2c – 316,250 316,250
- buildings at cost 2a – 1,975,000 1,975,000
Total land and buildings – 6,066,250 6,066,250
Loan to Metropolis City Promotions Pty Ltd
atf the John Trimble Family Trust 2e – 3,519,000 3,519,000
TOTAL ASSETS 2 13,650,000 13,650,002
EQUITY
Ordinary Shares
Issue of 17,800,000 Shares 2b – 8,900,000 8,900,000
Transaction costs relating to share issues 2d – (1,000,000) (1,000,000)
7,900,000 7,900,000
B class shares
Issue of 2 shares 2 – –
Issue of 26,283,334 shares 2a – 5,750,000 –
2 5,750,000 5,750,002
TOTAL EQUITY 2 13,650,000 13,650,002
NOTES TO THE PROFORMA STATEMENT OF FINANCIAL POSITION AS AT 31 OCTOBER 2002
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Significant accounting policies are the same as those disclosed in the forecast financial statements. The proforma statement
of financial position has been prepared as if all transactions had taken place on 31 October 2002.
NOTE 2: EFFECTS OF ISSUEa. Land and buildings at 7-12 Horne Street, Elsternwick were transferred by Cameron Lane Pty Ltd, an entity controlled
by John Trimble, to the Company in exchange for 26,283,334 B class shares.
b. The Company raised $8,900,000 from the issue of 17,800,000 ordinary shares.
c. Stamp duty of $316,250 was paid on the transfer of the Property and has been included in the cost of the asset.
d. Transaction costs of $1,075,000 (including GST) were paid in relation to the Offer. GST is recoverable by the company.
e. The Daily Planet Limited loaned Metropolis the amount of $3,519,000. The facility provided is an interest only loan repayable in
July 2007, and is renewable at the discretion of the Directors. Interest is payable monthly on the loan at a commercial fixed
interest rate of 6.55% per annum. Refer to Section 11.1.2 for a summary of the terms of the Facility Agreement.
f. A deposit is held on trust equivalent to the annualised after-tax profit for the part year ended 30 June 2003. This amounts
to $712,838.
g. The balance of cash raised of $3,276,912 will be used by the Company in meeting its working capital commitments.
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Mr. A Harris 26th June, 2002Daily Planet Australia Pty Ltd7-12 Horne StreetElsternwick Vic 3185
Due Diligence Report
We have been requested by Daily Planet Australia Pty Ltd to carry out a due diligence examination of Horne Street, Elsternwick.
Independence and Consultants
We are acting as independent consultants having never previously worked for Daily Planet AustraliaPty Ltd or any associated or related person or entity.
We engaged consultants to carry out specialist reports in relation to the following areas:
• Mechanical and Electrical Engineering• Structural Engineering
A land surveyor also carried out a re-establishment survey separate to this report
McKenzie Group Consulting is an expert group of registered building surveyors and building regulationconsultants and we will report on the regulatory aspects of this building.
Inspections
We have inspected the building on several recent occasions including Tuesday 11th June, Tuesday 19thJune and Friday 20th June and report as follows-
Description
The building is a two storey building which has been constructed over a period of time in severalsections.
It is constructed in part of brick and timber/cement sheet external linings.
The roof is corrugated galvanised steel sheet, external walls of brick or timber framed plasterboard and a timber frame first floor. The total floor area is approximately 1,000 m2 in total.
Some storage areas exist in the sub floor space at the rear of the building.
Classification
We have classified the building as Class V – professional suites
General
The buildings is in generally good condition externally and in excellent condition internally.
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Mechanical services, electrical services and hydraulic service.
The report from the mechanical and electrical engineer dated 13th June, 2002 indicated a series of matters that required attention at that time. An inspection on Tuesday 25th June revealed that allthese issues had been satisfactorily addressed.
The initial and re-inspection reports of the mechanical and electrical engineer form attachment A to our full report.
Structural
A structural engineer has inspected the building and reported that the building structure and fabric is sound and suitable for purpose. A copy of this report forms attachment B to our full report.
Survey
A land surveyor carried out a re-installment survey which indicated that the building exists within the title boundaries and also determined the actual floor areas of the building.
This information is available for inspection.
Building Code of Australia
The building is generally in compliance with the Building Code of Australia for the intended purpose.
The building was constructed prior to the advent of the Building Code of Australia and complied withthe regulations in force at that time. Any areas of deviation from present regulations are of a minornature only and will not impact on the continued use of the building for its existing purpose.
Both the buildings and its occupants are adequately provided for in terms of safety and amenity.
Maintenance
A system of six monthly inspections will be carried out by McKenzie Group Consulting to identifymaintenance issues and any work identified as necessary requiring repair or maintenance will bereferred to the directors for action.
A contract exists to cover this.
Conclusion
The building at 7-12 Horne Street, Elsternwick occupied by the Daily Planet is fit for the purpose it is being used for and continued occupation of the building does not pose any adverse risk due tonon compliance with building regulation issues.
Duncan McKenzieMcKenzie Group Consulting Level 9, 410 Collins StreetMelbourne, 3000
26th June, 2002
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10.1 The Evolution of theDaily Planet
A call from out of the blue...
In late 1974, Sydney businessman
John Trimble was preparing to transfer
from the Army Reserve into the SAS
selection course in Western Australia
when he received a call from two former
work colleagues.
The Melbourne business that John
had been called in to rescue was an
ailing ‘massage parlour’ known as ‘Le
Chateau’. Business improved with John’s
assistance, but by 1975 the owners had
run out of money.
Out of crisis comes opportunity and
sensing his opportunity, John agreed
to buy the business outright for the
princely sum of $20,000.
The Daily Planet opens for business
John immediately closed down Le
Chateau, refurbished the premises and
changed the name to the ‘Daily Planet’.
The emphasis of the business shifted to
fun and fantasy, with ‘in jokes’ such as
the office sign reading ‘Editor’, Lois
Lane being the working name of all the
receptionists, and a telephone box in the
lobby standing ready for a quick change
by Clark Kent.
Business remained fairly slow until one
day a long haired man in scruffy denims
knocked on the door and told John he
was a photographer for Playboy. John
had his doubts, but when the July 1979
edition of Playboy hit the stands, with an
article featuring the Daily Planet by well-
known Melbourne writer and
photographer Rennie Ellis, business took
off like Superman.
Over the years, John’s amazing aptitude
for publicity has raised the Daily Planet to
icon status. Stunts such as building a life-
size replica of Superman flying out of the
Daily Planet sign worked to build media
and public awareness of the Daily Planet
brand. Linking the ‘racy’ nature of one
business to another, John purchased a
racehorse and named it the Daily Planet,
causing a media frenzy. John’s offer for
the Daily Planet to sponsor the then
Fitzroy Football Club was, after much
debate, refused. However, the ensuing
publicity once more saw John and the
business featured in all media, making
the Daily Planet a household name.
In 1991, the Daily Planet received
a Victorian Tourism Award, further
enhancing its status. Throughout
the 90’s the Daily Planet has maintained
a high profile with its professionally run
V8 Supercar team. With an enviable
reputation as Victoria’s biggest and
best, the Daily Planet has become the
benchmark against which all other
licensed brothels are measured.
Into the future...
Now, in 2002, the Daily Planet is moving
into the 21st Century – with refurbished
luxury premises and state-of-the-art
technology systems.
However, some things haven’t
changed – the Daily Planet is proud to
maintain its high standards of hygiene,
safety, customer service and customer
satisfaction.
The Daily Planet has now positioned
itself as a truly unique Australian
business. Prospects for future expansion
into like businesses pave the way for the
next exciting phase in the evolution of
the Daily Planet.
10.2 Frequently Asked QuestionsQ So, what really happens inside the
Daily Planet?
A Guests enter the secure reception area
at the front of the building, where the
receptionist, ‘Lois Lane’, greets them.
Lois arranges for a hostess to take
first-time guests on a tour of the
Lounge, Sports Bar, Planet Bar and
other facilities. If the guest decides to
stay for a while, a room can be booked
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at reception in the same way you
would book a hotel room.
The guest is then free to partake in the
free facilities within the Daily Planet,
including pool and arcade games,
drinks, dancing and lively conversation
with numerous ladies in a relaxed
social environment. Once the guest has
met a lady of their liking, they simply
hand over the card received from
reception and adjourn to the room. All
transactions between guests and the
ladies working at the Daily Planet are
completely private and discreet.
Q How many rooms are available
and what are they like?
A In all, 18 private rooms or suites are
available at the Daily Planet. Each
room is stunningly appointed and
offers a variety of facilities, including
two- or four-person showers, 8-seat
spas and beds large enough to
accommodate a small group. All
rooms are named and themed.
As most brothels are limited by law to
6 rooms, the Daily Planet has a distinct
market advantage.
Q What are the hours of operation of
the Daily Planet and what are the
peak times?
A The Daily Planet is generally open 7
days a week, 24 hours a day, however
during the winter period opening may
be delayed until 10am or 12noon. The
busiest times are from 10pm to 4am on
most nights.
Peak periods include the Grand Prix
(several international racing teams
visit each year), and from the AFL
Grand Final weekend and Spring
Racing Carnival right through to
Christmas and New Year’s Eve.
Q What services are offered at the
Daily Planet and what do they cost?
A The services offered vary – a full
service list is available at the website
www.dailyplanet.com.au.
Most people are not aware that
anybody over 18 years of age can book
a room at the Daily Planet. Couples and
groups are welcome to share a private
night of fantasy in any one of the
eighteen magnificently appointed
rooms that the Daily Planet has to offer.
The Daily Planet simply provides a
secure hotel-like environment, and is
not involved in any transaction other
than booking rooms and providing use
of the facilities. All prices for personal
or sexual services are directly
negotiated between the guest and the
lady of their choice.
The Daily Planet prides itself on the
fact that its income has always been
derived solely from the rental of its
rooms to the guests, and it has never
shared in the income of its sex workers.
Q How many staff are employed by the
Daily Planet and what do they do?
A There is a staff of approximately
30 non-sex workers, including
receptionists, hostesses, bar
staff, security, towel staff,
cleaners and maintenance.
Approximately 100 to 150 independent
sex workers also operate from the Daily
Planet premises.
Q How hygienic is the Daily Planet and
what measures are taken to ensure a
high standard of health and hygiene?
A The Daily Planet proudly maintains
a hygiene level equivalent to that of
a five-star hotel. All towels and sheets
are washed after each guest’s visit.
The high-tech washing machines inject
a highly potent anti-bacterial
disinfectant during the high-
temperature wash cycle to ensure
cleanliness. The dishwasher on site
operates in a similar way to ensure
that all crockery and cutlery is
completely hygienic. Rooms are
progressively cleaned and sanitised
throughout each day.
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All spas are monitored daily and
are thoroughly checked on a regular
basis by an Environmental Health
Officer from the local council to ensure
that they comply with all relevant
health regulations.
Q How does the Daily Planet manage
the risk of infection of STDs and
other diseases?
A All sex workers are required by law
to use condoms and/or dental dams
during any sexual activity and the
Daily Planet does not tolerate requests
by guests for unprotected sexual
services. The ladies who operate from
the Daily Planet are required to have
complete health checks for STDs, HIV
and Hepatitis on a monthly basis.
Throughout the entire history of the
Daily Planet, the Directors are not
aware of any reported incident of
infection – STD or otherwise.
Q How many ladies operate from the
Daily Planet and what is their
average age?
A Seasonally, there are between 100
and 150 ladies working on a rotational
roster (no males). Their average age is
25 years.
Q How many shifts does a Daily
Planet lady do in a week, on
average?
A Approximately three to four eight
hour shifts.
Q Are all bookings sexual? What
other activities do guests request?
A Some bookings are purely for
companionship. The Daily Planet ladies
often build up strong rapport with
guests and not every visit is based on
sex alone. Sometimes guests simply
want female company and may wish to
have a spa, to talk about their day or
week, or watch TV in one of the rooms.
Q In general, how are the ladies
treated by guests?
A All Daily Planet guests treat the ladies
with respect. If they do not, they
are asked to leave the premises.
Most of the Daily Planet ladies
find their job empowering and
many receive positive attention,
compliments, gifts and friendship from
their personal clients and other Daily
Planet guests. Many of the Daily Planet
ladies also comment that their job
enables them to enjoy the freedom
of financial independence .
Q Who is a ‘typical’ Daily Planet
guest?
A Guests range from single men to
couples, aged 18 to 80 and of all
cultural and social backgrounds.
As one of the few establishments
offering wheelchair access, the Daily
Planet is proud to be able to provide
services to people with disabilities.
Q How does the Daily Planet recruit
their staff and their sex workers?
A The Daily Planet does not actively
recruit staff and is prohibited by law
from advertising for staff. Given the
reputation and high standards of the
Daily Planet, prospective staff
approach management as a result
of word-of-mouth recommendations.
They then undergo an interview
process in order to appear on the
Daily Planet roster. Intensive training
ensures that the standards of all
services offered by the Daily Planet
remain of the highest quality.
Q What type of person works at the
Daily Planet?
A To work at the Daily Planet ladies don’t
have to be a model or Playboy pin-up.
The Daily Planet is proud to offer
ladies of varying ages, heights and
shapes who also represent the cultural
diversity of the wider community. All
Daily Planet staff are friendly,
approachable and sociable. Whilst
they are physically attractive, they are,
first and foremost, great listeners.
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Q What is the moral standpoint of the
Daily Planet and its management on
the role of prostitution in society?
A The Daily Planet believes that
prostitution should be legal, strictly
policed and properly managed. Many
people are not aware that when the
Prostitution Control Act was passed in
Victoria in 1994, the Vice Squad of the
Victorian Police was disbanded.
Policing prostitution activities in
brothels is now a function of local
councils, and many councils are
unwilling or financially unable to
force the closure of illegal brothels.
The Daily Planet is a high quality
establishment designed to provide
a safe and secure environment in
which sex workers can operate.
The management of the Daily Planet
does not regard prostitution as
immoral, but simply the oldest known
profession that has been, and always
will be, a part of life.
10.3 Cash Flow andManagement StructureThe business of the Daily Planet is
conducted by John Trimble as licensee.
Metropolis is the entity which owns a
number of the major assets of the business
and is primarily entitled to receive all
income generated by the business.
The business is operated through
Daily Planet Australia Pty Ltd under
a management arrangement with
Metropolis. Daily Planet Australia Pty
Ltd enters into all contracts with third
parties concerning the business,
including as tenant under the lease of
the Property, and invoices Metropolis on
a monthly basis for all expenses incurred
under those contracts. John Trimble is
the sole director and shareholder of both
Metropolis and Daily Planet Australia Pty
Ltd and is a beneficiary under the John
Trimble Family Trust.
Andrew Harris, a Director of the
Company, has applied to the Business
Licensing Authority for a prostitution
service provider’s licence and, subject to
the success of that application, Daily
Planet Australia Pty Ltd will in turn
outsource the day-to-day management
of the business to Nascon Australia Pty
Ltd, for which the latter will receive a
management fee. Andrew Harris is the
sole director and shareholder of Nascon
Australia Pty Ltd.
Refer to Section 11.1.2 for a summary of
the deed entered into between the
Company and the Daily Planet Group
dated 27 November 2002
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11.1 Material Contracts
11.1.1 Lease to Daily Planet Australia Pty LtdOn 27 November 2002, the Company
leased the Property to Daily Planet
Australia Pty Ltd, a company 100% owned
by John Trimble. The initial term is 50
years, plus 5 options for further terms of
10 years each.
The lease is conditional on the Company
becoming the registered proprietor of the
Property. Refer to Section 1.3 for details of
the basis on which the Offer will proceed.
Subject to the Offer being fully
subscribed, the commencing annual rental
payable by Daily Planet Australia Pty Ltd
will be $661,880, subject to annual CPI
reviews capped at 4%. The lease contains
a standard ratchet clause to ensure the
rental does not decrease at any stage
during either the initial or further terms.
The exact commencing rental will not
be known until the Offer is completed
and the number of ordinary shares
determined. The commencing rental
will be set at the level required to ensure
that holders of ordinary shares in the
Company will receive a projected
annualised return of 10.00% p.a. for
the part year ending 30 June 2003. For
example, if the Minimum Subscription
Amount is raised, the commencing rental
will be approximately $493,948.
The lease is on extremely favourable
terms to the Company, with Daily Planet
Australia Pty Ltd responsible for all
outgoings, improvements, structural
repairs and capital works on the
Property. These arrangements will
ensure that the Company’s overheads
are minimised. Upon completion, any
such structural repairs or capital works
become the property of the Company.
In the event the Property (including the
building) is damaged or destroyed the
Company may compel the tenant to
carry out reinstatement works. During
any period that the tenant cannot use
or gain access to the Property, the rental
payable will be reduced by a reasonable
amount taking into account:
(a) the type and extent of the damage
or destruction; and
(b)the extent to which the Company is
indemnified under an insurance policy
taken out in accordance with the
terms of the lease.
The rental reduction provision does
not apply where:
(a)the tenant is fully indemnified
in relation to such damage or
destruction under an insurance policy
taken out in accordance with the
terms of the lease;
(b)the damage or destruction was
caused by, contributed to, or arises
from any wilful act of the tenant or
the tenant’s employees;
(c) an insurer under any policy effected
in accordance with the terms of the
lease refuses indemnity or reduces
the sum payable under the policy
because of any act or default of the
tenant or the tenant’s employees; or
(d)the tenant fails to comply with its
obligation to maintain insurance in
accordance with the terms of the lease.
In accordance with the terms of the
lease, Daily Planet Australia Pty Ltd, at
its own expense, has obtained insurance
cover against public liability up to the
value of $10,000,000, property damage
up to the value of $5,000,000, and rental
protection up to the value of $1,750,000
(in any one year). The Company is named
as the insured or co-insured in each of
these policies.
11.1.2 Deed between theCompany and the DailyPlanet GroupOn 27 November 2002, the Company
and the Daily Planet Group entered into
a deed covering a number of key issues
affecting their relationship.
Structuring Issues
Subject to the Offer proceeding and
as soon as practicable after the Closing
Date, the following events will take place:
(1) The Company will loan to Metropolis
the amount of $3,519,000 pursuant to
the terms of the Facility Agreement;
(2) Metropolis will use the loan amount
to fully discharge the security held by
the Daily Planet Group’s bankers over
the assets of the Daily Planet Group,
including the current mortgage over
the Property;
(3) The Daily Planet Group will grant to
the Company security for the loan
specified in the Facility Agreement.
(4) Cameron Lane Pty Ltd will transfer
all legal and beneficial title to the
Property (free of encumbrances)
to the Company and will deliver
to the Company:
• a duly executed transfer of land
indicating the Company as the
transferee of the Property;
• a duly executed discharge
of Registered Mortgage No.
N177882U;
• duplicate Certificate of Title
Volume 9709 Folio 911; and
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• any other documents necessary to
enable the Company to become
registered proprietor of the
Property; and
(5) in consideration for the transfer
of the Property, the Company will
issue to Cameron Lane Pty Ltd
26,283,334 B class shares in the
capital of the Company.
Operation of the Business
Metropolis (in its own capacity and as
trustee for the John Trimble Family Trust)
and John Trimble (both in his capacity
as a director of Metropolis and on his
own behalf ) have jointly undertaken
to the Company to ensure that the
expenses and liabilities of the Daily
Planet and Daily Planet Australia Pty Ltd
(including the rental payable under the
lease of the Property) are met as and
when they fall due.
The obligations of Metropolis and John
Trimble under the deed are limited to
applying the income generated by the
operation of the Daily Planet towards
such expenses and liabilities and do not
constitute a general guarantee of the
solvency of Daily Planet Australia Pty Ltd.
The income generated by the Daily
Planet will be applied by Metropolis
towards the Daily Planet’s business
expenses and liabilities prior to being
applied to any other activities
undertaken by Metropolis or otherwise
distributed. Payments will be made to
Daily Planet Australia Pty Ltd on a
monthly basis or as required.
The terms of the deed also provide
for a registrable charge in favour of the
Company over those assets of
Metropolis required for the operations of
the Daily Planet. Following repayment of
the loan from the Company to
Metropolis, the Company may maintain
the charge as security for the
performance of John Trimble’s and
Metropolis’ obligations under the deed.
The charge may be released if those
assets are transferred to Daily Planet
Australia Pty Ltd, or Metropolis
guarantees the obligations of Daily
Planet Australia Pty Ltd in a form
satisfactory to the Company.
Intellectual Property
The Daily Planet Group has agreed
to grant to the Company a royalty-free,
non-exclusive, non-transferable,
perpetual licence to use certain items
of Intellectual Property in relation to the
business operations of the Company to
be conducted immediately following the
transfer of the Property, and expressly
excludes the use of those items of
Intellectual Property in relation to:
• merchandising;
• sub-licensing; and
• a business (wherever located) which
is the same or substantially similar to
the business of the Daily Planet or a
table-top dancing establishment.
The Daily Planet Group also grants to
the Company an option to purchase all
legal and beneficial title to the
Intellectual Property. If the Company
exercises this option, its title to all the
Intellectual Property will be subject to a
royalty-free, non-exclusive, non-
transferable, perpetual licence to the
Daily Planet Group to enable the Daily
Planet Group to continue to use the
Intellectual Property within Victoria in
relation to the operations of its business
existing as at the date of the deed. The
option expires at 5pm on 31 December
2005 and is exercisable on payment of
an amount to be agreed between the
Company and the Daily Planet Group
or, failing agreement, the amount
determined by an expert nominated by
the Company. The Company will be
solely responsible for the expert’s fees
and expenses.
If the ASX Listing Rules operate to
prevent the purchase price being paid
in cash, the Company must issue to a
nominated member of the Daily Planet
Group the number of ordinary shares
in the Company equal to the value of
the purchase price based on the market
value of the ordinary shares as at the
settlement date.
Facility Agreement
The Company has agreed to loan
Metropolis the amount of $3,519,000
pursuant to the terms of the Facility
Agreement (the terms of which form
an annexure to the deed dated 27
November 2002). These funds will be
used to repay the Daily Planet Group's
current debt facility and discharge the
security held by the group's bankers
over the assets of the group, including
the mortgage over the Property. The
facility provided under the Facility
Agreement is an interest only loan
repayable in July 2007. Interest on the
loan is payable monthly in arrears at a
commercial fixed interest rate of 6.55%
per annum. If any event of default occurs
(such as the failure to make repayments
when due) the interest rate increases
to 9.05% per annum.
The Company will take a number of
forms of security over the assets of
the Daily Planet Group, including a fixed
and floating charge over the assets of
Metropolis, mortgages over real property
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and unlimited guarantees and
indemnities from each member of the
Daily Planet Group. Metropolis must
bear all costs incurred by the Company
in obtaining such security.
Prior to the execution of the Facility
Agreement, the Company may, at its own
cost, undertake valuations of the secured
assets. If in the Company's reasonable
opinion the value of such assets is
insufficient to adequately secure the
loan, the Company may, at any time
prior to the loan being made, terminate
the deed dated 27 November 2002 and,
in turn, its obligation to make the loan
to Metropolis. If this occurs the Offer will
not proceed. As at the date of this
Prospectus, the Directors of the Company
are satisfied that the Daily Planet Group
has sufficient assets to adequately
secure the loan to Metropolis.
The Directors have valued the assets of
the Daily Planet Group at $8,700,000.
This provides a lending ratio (being the
amount of the facility as a percentage of
the value of the secured assets) of 40%.
The assets are classified as follows:
Land and Buildings $1,800,000
Goodwill $5,050,000
Other assets $1,850,000
Total $8,700,000
The repayment of the Daily Planet
Group's current debt facility out of the
loan proceeds will enable the Company
to acquire the Property unencumbered
and will also enable the Company to take
first ranking security over the assets of
the Daily Planet Group. Alternatively, if the
Company had assumed the Daily Planet
Group's liability under the current debt
facility Capital Gains Tax (CGT) rollover
relief would cease to be available and the
Property would lose its status as a pre-
CGT asset. As such, any capital gain made
by the Company on a subsequent
disposal of the Property would be subject
to CGT. For these reasons, the Directors
believe it is preferable to structure the
repayment of the current debt facility via
a loan to Metropolis.
11.1.3 Service AgreementsAccording to the terms of the Directors’
respective service agreements with the
Company, each Director is entitled to be
paid remuneration of $100 per annum or,
subject to regulatory requirements, an
amount otherwise agreed between the
relevant parties. The respective service
agreements contain an express provision
allowing for an increase in remuneration
if the activities of the Company
significantly expand and/or diversify
in the future.
The Company has agreed to provide
access to board papers to each Director
while they remain officers of the
Company and for a period of seven years
from when they cease to be officers.
The Company has also agreed to
indemnify, to the extent permitted by
the Corporations Act, each Director in
respect of certain liabilities which the
Director may incur as a result of, or by
reason of, being or acting as an officer
of the Company. The Company has also
agreed to maintain in favour of each
Director a directors’ and officers’ policy
of insurance for the period that they are
an officer of the Company and for a
period of seven years after they cease
to be an officer.
11.2 Documents Availablefor InspectionA copy of the following documents
will be made available for inspection
during business hours free of charge
at the offices of the Company until the
Closing Date:
• Constitution of the Company;
• Building Condition Report prepared
in relation to the Property;
• Valuation of the Property;
• Certificates of insurance in relation
to the Property and the business of
the Daily Planet; and
• All material contracts referred to in
Section 11.1 above.
11.3 Rights Attaching to the SharesThe Shares rank equally with the
Company’s existing ordinary shares. The
rights attaching to the Shares are set out
in the Constitution. Rights also arise
from the Corporations Act, the ASX
Listing Rules and the general law.
The Constitution was amended on 27
November 2002 to comply with the ASX
Listing Rules.
A copy of the Constitution is available for
inspection at the Company’s registered
office during normal business hours.
The following is a summary of the rights
attaching to the existing ordinary shares
(including the Shares) under the
Constitution:
Voting and Meetings
Each shareholder is entitled to receive
notice of, attend and vote (in person or
by proxy or attorney) at general meetings
of the Company and to receive all notices,
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financial records and other documents
required to be provided to shareholders
under the Constitution, the Corporations
Act or the ASX Listing Rules.
Subject to any restriction on voting
imposed by the ASX Listing Rules, any
escrow agreement entered into between
the Company and a shareholder, the
provisions of the Constitution, or any
rights or restrictions attaching to any
class of shares, every shareholder
present at a general meeting (in person
or by proxy or attorney) has on a show of
hands, one vote, and on a poll, one vote
for each fully paid share held.
Dividend Entitlement
Dividends are payable out of the profits
of the Company and are declared by the
Directors. Where the Directors declare a
dividend, all shareholders are entitled to
receive a percentage of the dividend in
proportion to their respective
shareholding, subject to the rights
of shareholders who have special or
preferential rights as to dividends, such
as B class shareholders who have no
right to dividends.
Refer to Section 11.4 below for details
of the rights attaching to B class shares.
Winding-Up
If the Company is wound up, each
shareholder has the right to participate
in the distribution of any surplus assets
or profits of the Company in proportion
to the number of shares held,
irrespective of the amount paid or
credited as paid on the shares, subject
to the powers of the liquidator and
shareholders (if any) with special or
preferential rights.
Transfer of Shares
A shareholder may transfer shares by
a proper transfer effected in accordance
with any computerised or electronic
system established or recognised by
the ASX or the Corporations Act for
the purpose of facilitating transfers of
shares, or by an instrument in writing in
a form approved by ASX, or in any form
approved by the Directors. The Directors
may refuse to register a transfer of
shares where the refusal to register
the transfer is permitted under the
Constitution or the ASX Listing Rules.
Issue of Shares
Subject to the restrictions on the issue
of shares imposed by the Constitution,
the Corporations Act and the ASX Listing
Rules, the Directors may issue, grant
options in respect of, or otherwise
dispose of further shares as they see fit.
Shareholder Liability
The Shares offered under this Prospectus
are fully paid shares. Therefore, the
Shares will not be subject to any calls for
extra payment and will not become liable
for forfeiture for non-payment.
Company Records
The Directors must cause the Company
to keep written financial records in
relation to the business of the Company
and cause such records to be audited in
accordance with the Corporations Act.
Directors have the right to access such
records during their term of appointment
and, in certain circumstances, after their
retirement or removal.
Remuneration of Directors
The non-executive directors of the
Company are paid such remuneration as
is determined by the Company in general
meeting from time to time. The Company
determines the total remuneration to be
paid to the non-executive directors, and
the Directors determine how the total
remuneration is divided among them.
The remuneration of executive directors
(including the managing director) is fixed
by the Directors from time to time.
Forfeiture
If the Directors are reasonably satisfied
that a member is in breach of section 75
of the Prostitution Control Act (refer to
Section 1.10 above), the shares held by
that member may be forfeited.
Alteration to the Constitution
The Constitution can only be amended
by a special resolution passed by at
least 75% of the shareholders present
in person or by proxy, attorney or
representative, and voting at a general
meeting of the Company. At least 28
days written notice specifying the
intention to propose the resolution
as a special resolution must be given.
ASX Listing Rules
On admission to the official list of the
ASX and notwithstanding anything in the
Constitution, if the ASX Listing Rules
prohibit an act being done, the act must
not be done. If the ASX Listing Rules
require an act to be done or not to be
done, authority is given for that act to be
done or not to be done (as the case may
be) and, if a provision is required in the
Constitution by the ASX Listing Rules,
the Constitution will be treated as
containing that provision. If any
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provision of the Constitution becomes
inconsistent with the ASX Listing Rules,
the Constitution will be treated as not
containing that provision to the extent
of the inconsistency.
11.4 Rights Attaching to B Class Shares
Term
Unless cancelled or converted earlier
in accordance with the terms and
conditions set out in this Section 11.4,
the B class shares will be cancelled, for
no consideration, on the Maturity Date
(being the 5th anniversary of the official
quotation of the ordinary shares on ASX).
The Company must use its best
endeavours to ensure that the
cancellation procedure (involving a
selective reduction in share capital in
accordance with section 256C of the
Corporations Act) is undertaken in
an effective and timely manner. The
Company must also take all necessary
actions to ensure that all B class shares
on issue and which have not been
converted into ordinary shares or
cancelled as at the Maturity Date, are
cancelled on the Maturity Date.
Notwithstanding the above, if all or some
of the B class shares have not been, or
are not able to be, cancelled with effect
from the Maturity Date, all such B class
shares will be automatically converted
into ordinary shares in accordane with
the conversion formula.
Voting
The holder of the B class shares has the
right to attend and vote at meetings of
the Company and on a show of hands to
1 vote and on a poll to 1 vote for each B
class share held.
Conversion
The holder of the B class shares has the
right, at any time prior to the Maturity
Date, to require the Company to convert
all or any number of the B class shares
held by the holder as at the relevant
conversion date into an equivalent
number of ordinary shares if the rental
payable to the Company under the lease
of the Property is increased in
accordance with the following formula:
A x B = C
where:
A = 1.477 x D
E
B =The number of B class shares to be
converted
C =The amount (in dollars) by which the
annual rental must be increased
D =If no B class shares have been
converted, the amount (in dollars)
of rental payable annually under the
lease of the Property as at the
relevant conversion date; or
If B class shares have been
converted, the amount (in dollars)
of rental that would have been
payable annually as at the relevant
conversion date if no B class shares
had been converted
E =The number of B class shares on
issue as at the commencement of
trading (26,283,336) adjusted to
take into account any new issue of
securities, reconstruction or return
of capital
By way of example, if 1,000,000 B class
shares were converted into ordinary
shares on the day following the issue
of Shares to investors, the annual rental
payable under the lease of the Property
would be increased by $37,194.50
(assuming the Offer is fully subscribed).
Ranking
The ordinary shares arising upon
conversion of the B class shares will,
from conversion, rank pari passu in all
respects with all other ordinary shares in
the capital of the Company then on issue.
Right to Dividends
The B class shares have no right to
dividends.
B class shares converted into ordinary
shares will rank pari passu with ordinary
shares then on issue in all respects
(including in respect of dividends),
save that they will rank for purposes of
interim or final dividends payable out
of distributable income or revenue
reserves only in respect of the time
during the dividend calculation period
during which they were ordinary shares
and not during the whole of the dividend
calculation period.
Participation in New Issues
The holder of the B class shares has the
right (prior to conversion of the B class
shares into ordinary shares) to
participate in offers to holders of
ordinary shares to subscribe for new
securities of the Company, or to
participate in any bonus issue, as if the
number of B class shares held were an
equivalent number of ordinary shares.
Reconstructions
If the ordinary shares are reconstructed,
consolidated or divided (other than by
way of a bonus issue) into a lesser or
greater number of securities, then the
B class shares must be reconstructed,
consolidated or divided by the Directors
on the same basis.
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Return of Capital
If the Company undertakes a return of
capital to holders of ordinary shares
(other than by way of a share buy-back),
the holder of the B class shares has the
right (prior to conversion of the B class
shares into ordinary shares) to
participate in the return of capital as if
the number of B class shares held were
an equivalent number of ordinary shares.
Share Buy-Back
If the Company undertakes a buy-back
of ordinary shares (whether on or off
market), the holder of the B class shares
has the right (prior to conversion of the
B class shares into ordinary shares) to
participate in the share buy-back as if
the number of B class shares held were
an equivalent number of ordinary shares.
Takeover Offers and Schemes of Arrangement
If a takeover offer is made for ordinary
shares, acceptance of which is
recommended by the Company, or the
Company recommends a scheme of
arrangement in respect of the ordinary
shares which will result in a person who
did not previously have such interest
acquiring a relevant interest in more
than 50% of the Company’s shares (both
ordinary and B class), then the holder of
the B class shares will have the right to
participate in the takeover offer or
scheme in respect of those B class
shares converted into ordinary shares
during the takeover or scheme period.
Participation in Winding Up
On the winding up of the Company, the
holder of the B class shares has the right
to participate in the division of any
surplus assets or profits of the Company
to the same extent as the holders of
ordinary shares in proportion to the
number of B class shares held,
irrespective of the amount paid or
credited as paid on the B class shares.
Early Cancellation
The Company may cancel all or any number
of the B class shares then on issue in
accordance with the cancellation procedure
if any of the following events occur:
(a) Daily Planet Australia Pty Ltd, for
whatever reason, ceases to be the
tenant of the Property and is not
replaced by an entity controlled
(as that term is defined in the
Corporations Act) by John Trimble;
(b) John Trimble ceases to control,
whether directly or indirectly,
Daily Planet Australia Pty Ltd;
(c) the expiry, termination or surrender
of the lease of the Property entered
into by the Company and Daily
Planet Australia Pty Ltd dated
27 November 2002;
(d) an insolvency event occurs in respect
of John Trimble; or
(e) an insolvency event occurs in respect
of Daily Planet Australia Pty Ltd or,
if another entity controlled by John
Trimble replaces Daily Planet
Australia Pty Ltd as tenant under
the lease, that entity.
Transfer of B Class Shares
The holder of the B class shares has
no right to transfer the B class shares
unless and until such shares are
converted into ordinary shares.
Quotation
The Company, at its own cost, must
use its best endeavours to procure, if
permitted by the ASX Listing Rules to
do so, that the B class shares converted
into ordinary shares are quoted as soon
as practicable after conversion.
Variation of Class Rights
To the extent that any action provided for
in this Section 11.4 constitutes a variation
of the rights attaching to either ordinary
shares or B class shares, these provisions
will operate to the exclusion of the
procedures set out of the Constitution.
11.5 Executive Option PlanThe Company adopted an executive
option plan on 27 November 2002
(“Plan”). The Plan is to assist in the
attraction and retention of executives
and other employees, to provide
incentives that enable eligible executives
and employees to share in the success of
the Company, and to align the financial
interests of eligible executives and
employees with those of the shareholders.
The Plan permits the Company, at the
discretion of the Board, to grant options
over ordinary shares in the capital of the
Company. Those eligible to participate in
the Plan include any person (including a
director) who is in the full-time or part-
time employment of the Company or an
associated company or who holds salaried
employment or office in relation to the
Company or an associated company.
The Board has the discretion to
determine which employees, executives
and directors are entitled to participate
in the Plan, the number of options to be
granted, the exercise price (if any), the
exercise date and any conditions
applying to the options. Performance
hurdles and conditions relating to the
options may be used by the Board to
reflect both the individual’s and
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Company’s performance targets.
If these targets are not met, or the
participant ceases employment with
the Company or dies, the options
granted may lapse either in whole or
in part. No voting entitlement attaches
to the options.
The Board also has the discretion to
determine that options granted under the
Plan to a participant have lapsed where in
the opinion of the Board the participant
has acted fraudulently, dishonestly or has
breached their duties to the Company or
an associated company.
In accordance with the terms of the Plan,
the total number of unexercised options
on issue at any time under the Plan must
not exceed 15% of the total number of
ordinary shares on issue at that time.
As at the date of this Prospectus,
no options have been issued or granted
under the Plan and the Directors’ current
intention is not to issue any options
during the life of this Prospectus or
during the 2002/2003 financial year.
11.6 Holding Statementsand Share CertificatesThe Company will participate in the
Clearing House Electronic Sub-register
System (“CHESS”). All ASX trading in
the Shares after listing will be settled
through CHESS. Computershare Investor
Services Pty Limited will operate an
electronic Company-sponsored sub-
register. The CHESS sub-register will be
operated by ASX Settlement and Transfer
Corporation Pty Ltd. Both these sub-
registers will constitute the Company’s
principal share register.
Following the close of the Offer, the
Company will provide each shareholder
with a holding statement that sets out
the number of Shares allotted to that
shareholder. The holding statement will
also inform shareholders of their
Shareholder Reference Number.
Shareholders who are CHESS
participants will receive an explanation
of sale and purchase procedures under
CHESS with their holding statement. If a
shareholding changes during a month,
the shareholder will receive a statement
at the end of that month. Shareholders
may also request statements at any
other time, although the Company may
charge an administration fee in this case.
Shareholders who wish to receive a
commemorative parchment share
certificate may do so by marking the
appropriate box on the Application Form.
Such share certificates will be provided
solely for the purpose of commemorating
the Company’s initial public offering and
will have no legal effect. Shareholder
entitlements will be determined by
reference to the holding statements.
11.7 LitigationJohn Trimble and Daily Planet Australia
Pty Ltd have issued proceedings against
Patrick D Lowry and Lowry Real Estate Pty
Ltd. Mr Lowry and his company were
formerly engaged as managers of the
Daily Planet on behalf of John Trimble. It
is alleged in the proceedings that the
defendants failed to exercise all due care
and diligence in carrying out the terms of
their management obligations and, as a
consequence, John Trimble and Daily
Planet Australia Pty Ltd suffered
substantial loss. The claim is for
unspecified damages which are estimated
to be in the vicinity of $2 million. Adams
Maguire Sier, Barristers and Solicitors,
have provided advice to John Trimble and
Daily Planet Australia Pty Ltd indicating
that the claim has merit.
11.8 Directors’ Interestsand RemunerationAs at the date of this Prospectus, the
Company is 100% owned by Cameron
Lane Pty Ltd (ACN 006 204 084) as
trustee for the Cameron Lane Unit Trust.
John Trimble is the sole director and sole
beneficial shareholder of Cameron Lane
Pty Ltd, and an ultimate beneficiary of
the Cameron Lane Unit Trust.
Other than as set out in this Prospectus,
no Director of the Company, proposed
Director of the Company, nor firm in
which a Director is a partner, holds at the
time of lodgement of this Prospectus
with ASIC, or has held in the two years
before lodgement of this Prospectus with
ASIC, an interest in:
(a) the formation or promotion
of the Company;
(b)the Offer;
(c) any property acquired or proposed
to be acquired by the Company in
connection with its formation or
promotion or with the Offer.
Other than as set out in this Prospectus,
no one has paid or agreed to pay any
amount, and no one has given or agreed
to give in the two years before
lodgement of this Prospectus with ASIC
any benefit, to any Director or proposed
Director:
(a)to induce them to become, or qualify
them as, a Director; or
(b)for services provided by a Director or
proposed Director in connection with
the formation or promotion of the
Company or with the Offer.
Subject to the provisions of the
Constitution, the Corporations Act
and, if applicable, the ASX Listing
Rules, the Directors will be paid such
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remuneration as is determined by either
the Board of Directors or the Company in
general meeting (as appropriate) from
time to time.
For the financial year ended 30 June
2003, the Directors will be paid the
nominal remuneration of $75 divided
equally. The Directors’ current intention is
not to seek to increase their remuneration
during the 2002/2003 financial year.
Remuneration may be increased after
this time having regard to the scale and
complexity of the Company’s operations
and shareholder returns.
11.9 Restricted SecuritiesAs a condition of granting quotation
of the Company’s ordinary shares,
the ASX may classify some or all of
the shares held by Cameron Lane Pty
Ltd (as trustee for the Cameron Lane
Unit Trust) as restricted securities.
In such case, Cameron Lane Pty Ltd
may not, without the consent of ASX,
dispose of or agree to dispose of those
shares, or create or offer to create any
security interest in those shares, or to
do or omit to do anything which would
have the effect of transferring effective
ownership or control of the shares for
a specified period.
No application will be made for
quotation of the B class shares held by
Cameron Lane Pty Ltd.
11.10 Interests of NamedPersonsOther than as set out below or
elsewhere in this Prospectus:
(a) no person named in this Prospectus
as performing a function in a
professional, advisory or other
capacity in connection with the
preparation or distribution of this
Prospectus; and
(b)no promoter of the Company,
holds at the date of this Prospectus,
or has held in the two years before that
date, an interest in:
(c) the formation or promotion
of the Company;
(d)the Offer; or
(e)any property acquired or proposed
to be acquired by the Company in
connection with its formation or
promotion or with the Offer,
nor has anyone paid, or agreed to pay,
or given, or agreed to give, any benefit
to such persons in connection with the
formation or promotion of the Company
or with the Offer.
Cameron Stockbrokers Limited
(ABN 38 090 492 012) is entitled to be
paid commission of $445,000, being 5%
of the funds to be raised under the Offer
(plus out-of-pocket expenses capped at
$5,000), for its services as sponsoring
broker to the Offer.
Adams Maguire Sier is entitled to be paid
approximately $200,000 in fees and
disbursements for legal services
rendered to the Company up to the date
of this Prospectus in connection with the
formation of the Company and the Offer.
Hayes Knight is entitled to be paid
approximately $50,000 in fees and
disbursements for accounting services
rendered to the Company up to the
date of this Prospectus in connection
with the Offer.
Alexander & Spencer Group Pty Ltd
(ACN 052 362 348)is entitled to be
paid approximately $35,000 in fees
and disbursements for preparing the
Independent Accountant’s Report set
out in Section 7 of this Prospectus in
connection with the Offer.
As at the date of this Prospectus, no
audit services have been provided by
Alexander & Spencer to the Company.
McKenzie Group Consulting Pty Ltd
(ACN 092 469 344) is entitled to be
paid approximately $17,500 in fees and
disbursements for building inspection
services rendered to the Company up to
the date of this Prospectus in connection
with the Offer.
Aeropur Pty Ltd (ACN 084 773 393)
(trading as Asset Advisory & Valuation
Service) is entitled to be paid
approximately $3,500 in fees and
disbursements for valuation services
rendered to the Company up to the
date of this Prospectus in connection
with the Offer.
11.11 ConsentsEach of the parties referred to in this
Section 11.11:
(a)has not authorised or caused the
issue of this Prospectus;
(b)does not make, or purport to make,
any statement in this Prospectus other
than as specified in this Section 11.11;
(c) has not made any statement on which
a statement in this Prospectus is
based, other than as specified in this
Section 11.11;
(d)to the maximum extent permitted by
law, expressly disclaims all liability in
respect of, makes not representation
regarding, and takes no responsibility
for, any part of this Prospectus other
than the reference to its name and the
statement(s) (if any) included in this
Prospectus with the consent of that
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party as specified in this Section 11.11;
(e)should not, by the giving of its
consent, be taken to endorse the
Company, the Offer or the Shares; and
(f ) gives no assurance or guarantee
whatsoever in respect of the
performance or return of the Company.
Cameron Stockbrokers Limited (ABN 38
090 472 012) has given and, at the time
of lodgement of this Prospectus, has not
withdrawn its written consent to being
named in this Prospectus as sponsoring
broker to the Offer in the form and
context in which it is named. Cameron
Stockbrokers Limited were not involved
in the due diligence process undertaken
in relation to this Prospectus.
Adams Maguire Sier have given and,
at the time of lodgement of this
Prospectus, have not withdrawn their
written consent to being named in this
Prospectus as solicitors to the Company
in the form and context in which they
are named and to the inclusion of the
following statements:
(a)the Important Notice on the inside
front cover of this Prospectus;
(b)Sections 1.10, 2.7 (to the extent it
refers to the state of the law in New
South Wales), 10.3, 11.1, 11.3 to 11.5
inclusive, 11.7 and 11.9; and
(c) the Application Form and instructions.
Hayes Knight have given and, at the time
of lodgement of this Prospectus, have not
withdrawn their written consent to being
named in this Prospectus as accountants
to the Company in the form and context in
which they are named and to the
inclusion of the financial information in
Section 6 of this Prospectus, the forecast
returns table and notes on page 2, and to
Section 2.4 of this Prospectus.
Alexander & Spencer Group Pty Ltd (ACN
052 362 348) has given and, at the time of
lodgement of this Prospectus, have not
withdrawn its written consent to being
named in this Prospectus as the
independent accountant in the form and
context in which it is named and to the
inclusion of its Independent Accountant’s
Report in Section 7 of this Prospectus.
Alexander & Spencer, Chartered
Accountants, have given and, at the time of
the lodgement of this Prospectus, have not
withdrawn their written consent to being
named in this Prospectus as auditor in the
form and context in which they are named.
McKenzie Group Consulting Pty Ltd (ACN
092 469 344) has given and, at the time
of lodgement of this Prospectus, has not
withdrawn its written consent to being
named in this Prospectus in the form and
context in which it is named and to the
inclusion of the summary of its building
condition report contained in Section 8
of this Prospectus.
Aeropur Pty Ltd (ACN 084 773 393)
(trading as Asset Advisory & Valuation
Service) has given and, at the time of
lodgement of this Prospectus, has not
withdrawn its written consent to being
named in this Prospectus in the form
and context in which it is named and
to the inclusion of the summary of the
valuation contained in Section 9 of
this Prospectus.
Computershare Investor Services Pty
Limited (ACN 078 279 277) has given
and, at the time of lodgement of this
Prospectus, has not withdrawn its
written consent to being named in this
Prospectus as share registry to the
Company in the form and context in
which it is named.
11.12 Directors’ ReportEach Director of the Company authorises
the issue of this Prospectus and,
pursuant to section 720 of the
Corporations Act, has consented to the
lodgement of this Prospectus with ASIC.
Each of the Directors has given his
written consent to the issue of this
Prospectus and has not withdrawn his
consent prior to the date of lodgement
of this Prospectus. This Prospectus is
signed on 29 November 2002 by Mr John
Trimble, Executive Chairman, who signs
for and on behalf of the Company, and
with the authority of each Director of
the Company.
John Trimble
Executive Chairman
The Daily Planet LimitedTH
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Application Form the application form attached or accompanying this Prospectus
Asset Advisory & Valuation Service Aeropur Pty Ltd (ACN 084 773 393) trading as Asset Advisory & Valuation Service
ASX Australian Stock Exchange Limited (ACN 008 624 691)
ASX Listing Rules the official listing rules of the ASX as amended from time to time
B class shares the B class shares in the capital of the Company issued pursuant to Appendix A of the Constitution to be held by Cameron Lane Pty Ltd as trustee for the Cameron LaneUnit Trust
Board the directors of the Company from time to time
Cameron Lane Pty Ltd Cameron Lane Pty Ltd (ACN 006 204 084) as trustee for the Cameron Lane Unit Trust,the sole beneficiary of which is Metropolis
Closing Date 28 February 2003 or such other date as determined by the Directors subject to theCorporations Act
Company The Daily Planet Limited (ACN 101 217 252)
Constitution the constitution of the Company as amended from time to time
Corporations Act the Corporations Act 2001 in force in Australia from time to time
CPI the relevant consumer price index
Daily Planet the business of the Daily Planet gentlemen’s club conducted on the Property by DailyPlanet Australia Pty Ltd
Daily Planet Australia Pty Ltd Daily Planet Australia Pty Ltd (ACN 065 465 714)
Daily Planet Group Daily Planet Australia Pty Ltd, Metropolis, Cameron Lane Pty Ltd and John Trimble
Directors the directors of the Company as at 29 November 2002
Executive Option Plan or Plan the Executive Option Plan adopted by the Company on 27 November 2002
Facility Agreement the agreement between the Company (as lender) and Metropolis (as borrower) and the remaining members of the Daily Planet Group (as guarantors), a summary of which is set out in Section 11.1.2
Information Memorandum the document dated 22 July 2002 issued by the Company detailing an investmentopportunity for sophisticated and professional investors (as those terms are definedin the Corporations Act) and persons to whom a disclosure document is otherwise notrequired to be given under Chapter 6D of the Corporations Act
Intellectual Property the intellectual property respectively owned by members of the Daily Planet Group in relation to the business of the Daily Planet and includes business names, domainnames and trade marks
Metropolis Metropolis City Promotions Pty Ltd (ACN 005 485 692) as trustee for the John TrimbleFamily Trust
Minimum Subscription Amount $6,000,250
Offer the offer of the Shares under this Prospectus
Ordinary shares ordinary shares in the capital of the Company
Property the land and buildings located at 7-12 Horne Street, Elsternwick, Victoria, being the whole of the land comprised in Certificate of Title Volume 9709 Folio 911
Prospectus this prospectus including the Application Form, annexures and any supplementaryor replacement prospectus
Prostitution Control Act the Prostitution Control Act 1994 (Vic) in force in Victoria from time to time
Related Parties the Company’s directors, officers, employees, agents, consultants, contractors,related bodies corporate and advisers
Shares the 17,800,000 ordinary shares offered under this Prospectus
special resolution a resolution of which notice under section 249L(c) of the Corporations Act has beengiven and that has been passed by at least 75% of the votes cast by members entitledto vote on the resolution
All references in this Prospectus to “$” or “dollars” are to Australian dollars.
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Important Note:
Shareholders who wish to receive a parchment share certificate may do so by marking the appropriate box on the Application
Form. Share certificates will be provided solely for the purpose of commemorating the Company’s initial public offering and will
have no legal effect. Shareholder entitlements will be determined by reference to the holding statements.
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CORPORATE DIRECTORY
The Daily Planet Limited
7-12 Horne Street, Elsternwick, Victoria 3185
Directors
John Dennis Trimble
Andrew Harris
Shane Bernard Maguire
Accountants
Hayes Knight
Accountants and Business Advisors
Victorian Partnership
60 Collins Street, Melbourne, Victoria 3000
Auditor
Alexander & Spencer
Chartered Accountants
440 Collins Street, Melbourne, Victoria 3000
Independent Accountant
Alexander & Spencer Group Pty Ltd
ACN 052 362 348
440 Collins Street, Melbourne, Victoria 3000
Share Registry
Computershare Investor Services Pty Limited
Level 12, 565 Bourke Street, Melbourne, Victoria 3000
Tel: 1300 850 505
Solicitors
Adams Maguire Sier
176 Upper Heidelberg Road, Ivanhoe, Victoria 3079
Sponsoring Broker
Cameron Stockbrokers Limited
ABN 38 090 472 012
Level 5, 10 Spring Street, Sydney NSW 2000
Tel: (02) 9232 7700
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IMPORTANT NOTICEThis prospectus (“Prospectus”) is issued by The Daily Planet Limited (ACN 101 217 252) (“Company”). This Prospectus is dated 29 November 2002
and was lodged with the Australian Securities and Investments Commission (“ASIC”) on that date. Neither ASIC nor the Australian Stock Exchange
Limited (“ASX”) take any responsibility for the contents of this Prospectus.
The expiry date of this Prospectus is 28 February 2003 at 5.00pm (Melbourne, Australia time) (“Closing Date”). No Shares will be allotted or issued
on the basis of this Prospectus after the Closing Date. The Company reserves the right, subject to the Corporations Act, to close the Offer early or
delay the Closing Date to a date not later than 28 December 2003.
Exposure PeriodUnder the Corporations Act, the Company is not permitted to process applications during the period of 7 days after the date of lodgement of this
Prospectus with ASIC. ASIC may extend this period for a further 7 days. This period is an exposure period to enable this Prospectus to be examined
by market participants prior to the raising of funds. No preference will be conferred on applications received during the exposure period.
ApplicationsThe Corporations Act, prohibits any person passing on to another person an Application Form unless it is attached to a copy of this Prospectus or
it accompanies the complete and unaltered version of this Prospectus. This Prospectus is intended only for those persons to whom it was delivered
personally by or on behalf of the Company, or to those persons who have downloaded the document in PDF format from the Company’s website
www.dailyplanet.com.au. Any person may obtain a hard copy of this Prospectus free of charge by contacting the Company at its registered office.
The Offer is available to persons receiving the electronic version of this Prospectus within Australia.
Overseas JurisdictionsThis Prospectus does not constitute an offer for the issue, sale or purchase of any securities in any place in which, or to any person to whom,
it would not be lawful to make such an offer. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and
persons (including nominees, trustees or custodians) who come into possession of it should seek advice on and observe any such restrictions.
Any failure to comply with such restrictions may constitute a violation of applicable securities laws.
In particular:
• The Shares have not and will not be registered under the United States Securities Act of 1933 (“Securities Act”) and may only be offered or
sold in the United States or to, or for the account or benefit of, any “U.S. person” (as defined in Rule 902 of the Securities Act) under
exemptions from the registration requirements of the Securities Act and any applicable securities laws of any state of the United States; and
• This Prospectus has not been and will not be approved by an authorised person in the UK and has not been and will not be registered with
the Registrar of Companies in the UK. The Shares may not be offered to or sold in the UK except to persons having professional experience in
matters relating to investments (pursuant to Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001) and
the investment to which this Prospectus relates is only available in the UK to such persons. Persons who do not have professional experience in
matters relating to investments may not rely on this Prospectus.
Assumptions and Risk FactorsBefore deciding to invest in the Company, investors should read this Prospectus in its entirety. In considering the prospects of the Company,
investors should consider the assumptions underlying the prospective financial information and the risk factors described in Sections 5 and 6 of
this Prospectus. The information contained in this Prospectus does not take into account the investment objectives, financial situation or particular
needs of any investor. Before making an investment in the Company, investors should consider whether such an investment is appropriate for their
particular investment needs, objectives and financial circumstances and consult an investment advisor if necessary.
Personal InformationThe completed Application Form provides personal information about you to the Company. The Company collects your personal information to
process and administer your investment in the Company and to provide related services to you. If you do not complete the Application Form in full,
the Company may not accept your Application Form. The Company may disclose your personal information, for purposes related to your
investment, to its agents or service providers, including the sponsoring broker and share registry. You can obtain access to personal information
that the Company holds about you. To make a request for access or to obtain further information about the Company's personal information
management practices, please contact the Company on (03) 9528 1766.
Definitions of certain terms used in this Prospectus appear in the Glossary in Section 12. Other definitions are located where relevant in this Prospectus.
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The models appearing in this Prospectus are not sex workers.
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ACN 101 217 252
www.dailyplanet.com.au7 – 12 Horne Street Elsternwick 3185 Victoria Australia
Tel +613 9528 1766 Fax +613 9523 7540 Email [email protected]