SECURITIES AND EXCHANGE
COMMISSION Washington,
D.C. 20549
Form 8-K/A
(Amendment No. 1)
Current Report Pursuant to Section 13
or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported)
November 1, 2000
Goddard Industries, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Massachusetts 0-2052 04-2268165
(State or Other (Commission (I.R.S.
Employer
Jurisdiction File Number) Identification
No.)
of Incorporation)
705 Plantation Street, Worcester, Massachusetts
01605
(Address of Principal Executive Offices) (Zip Code)
(508) 852-
2435 Registrant's telephone number, including area
code
(Former Name or Former Address, If Changed Since
Last Report)
The undersigned Registrant hereby amends its
Current Report on
Form 8-K filed on November 15, 2000 as follows:
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
The following audited financial statements of
Mack Valves
Pty Ltd ("Mack Valves"), together with the report
thereon by Stockford Limited (formerly McBAIN & Co.),
appear as Exhibit 99.1 to this Current Report on Form
8-K/A and are incorporated herein by reference:
Balance Sheet as at June 30, 2000 and 1999
Profit and Loss Account for the year ended June
30, 2000 and 1999
Statement of Cash Flows for the year ended June
30, 2000 and 1999
Notes to the Financial Statements
The historical financial statements of Mack
Valves included herein have been prepared in
accordance with generally accepted accounting
principles in Australia ("Australian GAAP"). The
principal differences from US GAAP are: (i)
Australian GAAP allowed for revaluation of freehold
land and buildings (freehold land and building assets
were not purchased by Registrant), (ii) Australian
presentation of Profit and Loss Accounts (Income
Statement) and Balance Sheet differ somewhat from the
US in nomenclature, classification and subtotalling
and (iii) Australian GAAP does not separately
classify the current portion of lease debt or
deferred tax balances.
For purposes of US presentation, only, the auditors
have
included items above Operating Profit on the Profit
and Loss Accounts.
(b) Proforma Financial Information.
The following unaudited consolidating proforma
financial
statements of the Registrant and Mack Valves appear
as Exhibit 99.2 to this Current Report on Form 8-K/A
and are incorporated herein by reference:
Pro Forma Financial Information
Unaudited Consolidating Proforma Balance Sheet as at
September
30, 2000
and 1999
Unaudited Consolidating Proforma Statement of Income
for the
year ended
September 30, 2000 and 1999
(c) Exhibits.
Exhibit No. Description of Exhibit
1 Form of Sale of Business Agreement*+
23.1 Consent of Stockford Limited (formerly
McBAIN & Co.)
99.1 The following audited financial statements
of Mack
Valves
together with the report thereon by
Stockford Limited (formerly McBAIN & Co.):
Balance Sheet as at June 30, 2000 and 1999
Profit and Loss Account for the year ended
June 30, 2000 and 1999
Statement of Cash Flows for the year ended June 30,
2000 and 1999
Notes to the Financial Statements
99.2 The following unaudited consolidating proforma
financial
statements of the Registrant and Mack Valves:
Proforma Financial Information
Unaudited Consolidating Proforma Balance Sheet as of
September 30, 2000
Unaudited Consolidating Proforma Statement of Income
for the year ended September 30, 2000
* Confidential treatment requested for certain portions of
this
document.
+ Previously filed by the Registrant as part of the initial
filing of this Current Report on Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
GODDARD INDUSTRIES, INC.
Date: January 11, 2001 By:/s/Salvatore J. Vinciguerra
Salvatore J. Vinciguerra,
President
EXHIBIT 23.1 INDEPENDENT AUDITOR'S
CONSENT
We consent to the inclusion in Goddard Industries, Inc.'s
Current Report on Form 8-K/A, of our Independent Audit
Report to the Members dated August 31, 2000, on the
financial statements of Mack Valves Pty Ltd, as of and for
the years ended June 30, 2000 and 1999.
January 10, 2001 By:/s/Stockford
Limited
Stockford
Limited
(formerly McBAIN
& Co.)
Melbourne,
Australia
MACK VALVES PTY LTD EXHIBIT 99.1
A.C.N 004 274 499
FINANCIAL REPORT
FOR THE YEAR ENDED 30TH JUNE 2000
INDEPENDENT AUDIT REPORT TO THE MEMBERS
Scope
We have audited the financial report of Mack Valves Pty
Ltd for the year ended 30th June, 2000 and 30th June 1999
comprising the Directors' Declaration, balance sheet, profit
and loss account, statement of cash flows and notes to
the financial report. The company's directors are
responsible for the preparation and presentation of the
accounts and the information they contain. We have
conducted an independent audit of this report in order
to express an opinion on it to members of the company.
Our audit has been conducted in accordance with
Australian Auditing Standards to provide reasonable
assurance as to whether the financial report is free of
material misstatement. Our procedures included
examination, on a test basis, of evidence supporting the
amounts and other disclosures in the financial report,
and the evaluation of accounting policies and
significant accounting estimates. These procedures have
been undertaken to form an opinion as to whether, in all
material respects, the financial report is presented
fairly in
accordance with Accounting Standards, other mandatory
professional reporting requirements in Australia and statutory
requirements so as to present a view of the company which is
consistent with our understanding of the company's financial
position, the results of its operations and cash flows.
The audit opinion expressed in this report has been formed on the
above basis.
Audit Opinion
In our opinion, the financial report of Mack Valves Pty Ltd
is in accordance with:
(a) the Corporations Law, including:
(i) giving a true and fair view of the company's financial
position as
at 30th June, 2000 and as at 30th June 1999 and of its performance
for the years ended on those dates; and
(ii) complying with Accounting Standards and the Corporations
Regulations; and
(b) other mandatory professional reporting requirements.
/s/McBAIN
& CO.
D.W.
Mc
Ba
in
Pa
rt
ne
r
31st August,
2000
MACK VALVES PTY LTD
A.C.N 004 274 499
DIRECTORS' DECLARATION
The directors of Mack Valves Pty Ltd declare that:
1. The financial statements, comprising the profit and loss
statement, balance sheet, statement of cash flows and notes to
the financial statements:
(a) comply with accounting standards and the Corporations Law; and
(b) give a true and fair view of the financial position of the
company
as at 30th June, 2000 and 30th June 1999 and performance
for the years ended on those dates.
2. In the directors' opinion there are reasonable grounds to
believe
that the company will be able to pay its debts as and
when they become due and payable.
This declaration is made in accordance with a resolution of
the Board of Directors.
......../s/ Max
Chester..........
....../s/ Jane
Chester..........
Dated this 31st day of August, 2000
MACK VALVES PTY LTD
ACN 004 274 499
BALANCE SHEET AS AT 30TH JUNE,
2000
Note 2000 1999
A$ A$
CURRENT ASSETS
Cash 7 135,168 206,251
Receivables 8 1,486,097 817,328
Inventories 9 1,625,548 1,731,736
Other 10 19,424 15,829
TOTAL CURRENT ASSETS 3,266,237 2,771,144
NON CURRENT ASSETS
Property, Plant and Equipment 11
1,707,392 1,865,421 Other 12 281,432
259,274
TOTAL NON CURRENT ASSETS
1,988,824 2,124,695
TOTAL ASSETS 5,255,061
4,895,839
CURRENT LIABILITIES
Creditors and Borrowings 13 712,835
466,054
Provisions 14 628,343
511,719
TOTAL CURRENT LIABILITIES 1,341,178
977,773
NON CURRENT LIABILITIES
Creditors and Borrowings 15 42,271
227,452
Provisions 16 44,912
13,032
TOTAL NON CURRENT LIABILITIES 87,183
240,484
TOTAL LIABILITIES 1,428,361
1,218,257
NET ASSETS 3,826,700 3,677,582
SHAREHOLDERS' EQUITY
Share Capital 17 1,061,244 1,061,244
Reserves 18 354,777 354,777
Retained Profits 2,410,679 2,261,561
TOTAL SHAREHOLDERS EQUITY 3,826,700 3,677,582
The accompanying notes form part of
these accounts.
MACK VALVES PTY LTD
ACN 004 274 499
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30TH
JUNE 2000
Note 2000 1999
A$ A$
Sales 6,973,415 7,052,970
Cost of Sales (4,053,916) (3,922,851)
Gross Profit 2,919,499 3,130,119
Selling and Administrative Expenses 2,591.931 2,904,030
327,568 226,089
Other Income (Expense):
Interest Expense - (5)
Other Income 58,979 76,414
Total Other Income 58,979 76,409
Operating Profit 2 386,547 302,498
Income Tax attributable to
Operating Profit 4 137,429 109,646
Operating Profit after Income Tax 249,118
192,852
Retained Profits at the beginning of
the financial year 2,261,561
2,138,709
Total available for appropriation
2,510,679 2,331,561
Dividends provided for or paid 100,000
70,000
Retained Profits at the end of
the financial year 2,410,679
2,261,561
The accompanying notes form
part of these accounts.
MACK VALVES PTY LTD
ACN 004 274 499
STATEMENT OF CASH
FLOWS
FOR THE YEAR ENDED 30TH
JUNE 2000
2000
1999
A$
A$
CASH FLOW FROM OPERATING ACTIVITIES
Receipts from customers 6,304,646
7,353,041
Payments to suppliers and employees( 6,100,259)
(6,697,517) Sundry income
58,078 70,623
Interest received 13,545
9,129
Borrowing costs -
( 5)
Income tax paid ( 68,282)
( 116,792)
Net cash provided by operating
activities (note 24b) 207,728
618,479
CASH FLOW FROM INVESTING ACTIVIITES
Proceeds from sale of property, plant &
equipment 28,500
33,430
Payment for property, plant and equipment (
26,967) ( 291,027)
Net cash provided by (used in) investing
activities 1,533 (
257,597)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from/(repayment of) borrowings:
related party ( 120,000)
120,000
Repayment of leases ( 60,344)
( 31,889)
Repayment of borrowings: bank -
( 175,705)
Dividends paid ( 100,000)
( 70,000)
Net cash provided by (used in) financing
activities ( 280,344)
( 157,594)
Net increase in cash held ( 71,083)
203,288
Cash at beginning of year 206,251
2,963
Cash at end of year (note 24a) 135,168
206,251
MACK
VALVES
PTY LTD
A.C.N
004 274
499
NOTES TO AND FORMING PART OF THE
FINANCIAL REPORT FOR THE YEAR
ENDED 30 JUNE, 2000
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This general purpose financial report has been prepared in
accordance with Accounting Standards, other mandatory
professional reporting requirements and the Corporations
Law. Mack Valves Pty Ltd is classified as a small
proprietary company under the Corporations Law.
The report is prepared in accordance with the
historical cost convention, except for certain assets
which, as noted, are at valuation. Except where stated, the
accounting policies adopted are consistent with those of
the previous year. Comparative information is
reclassified where appropriate to enhance comparability.
(a) Income Tax
The economic entity adopts the liability method of tax-
effect accounting whereby the income tax expense shown in
the profit and loss account is based on the operating
profit before income tax 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 operating profit
before income tax and taxable income are brought to account
either as provision for deferred income tax or an
asset described as 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.
(b) Inventories
Inventories are measured at the lower of cost and net
realisable value. A standard costing system is employed
which absorbs factory labour and overheads into the
standard cost of finished goods and work in progress.
MACK VALVES PTY LTD
A.C.N 004 274 499
NOTES TO AND FORMING PART OF THE
FINANCIAL REPORT FOR THE YEAR
ENDED 30 JUNE, 2000
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
(c) Property, Plant and Equipment
Property, plant and equipment are brought to account at
cost or at independent or directors' valuation, less
where applicable, any accumulated depreciation or
amortisation. The carrying amount of property, plant
and equipment is reviewed annually by directors to
ensure it is not in excess of the recoverable amount from
those assets. The recoverable amount is assessed on the
basis of the expected net cash flows which will be received
from the assets employment and subsequent disposal.
Assets are depreciated on a reducing balance or straight
line basis over their estimated useful lives to the entity
commencing from the time the asset is held ready for use.
The depreciation rates used for plant and equipment are
from 20 to 40% reducing balance and from 17 to 20% prime
cost. Buildings are depreciated at 2% on a prime cost
basis.
(d) Employee Entitlements
Provision is made for the company's liability for employee
entitlements arising from services rendered by employees to
balance date. Employee entitlements expected to be
settled within one year have been measured at their nominal
amount. Other employee entitlements payable later than one
year have been measured at the present value of the
estimated future cash outflows to be made for those
entitlements.
(e) Cash
For the purposes of the statement of cash flows, cash
includes cash on hand and at call deposits with banks
or financial institutions, investments in money market
instruments maturing within less than two months and net
of bank overdrafts.
MACK VALVES PTY LTD
A.C.N. 004 274 499
NOTES TO AND FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30TH
JUNE 2000
2000
1999 A$
A$
NOTE 2 : OPERATING REVENUE
Sales Revenue 6,973,415
7,052,970
Other Revenue :
Interest 13,545
9,129
Export Market Development Grant 23,271
34,704
Sale of scrap 26,583
30,419
Currency Exchange Variances 8,146
-
Proceeds from sale of plant & equipment 28,500
33,430
Sundry income 78
-
7,073,538
7,160,652
NOTE 3: OPERATING PROFIT/LOSS
Operating profit/loss before income tax is arrived at after
crediting and charging the following specific items.
(a) Charging As Expense :
Borrowing costs: other persons -
5
Depreciation and amortization 170,433
195,920
Auditors remuneration:
-audit 30,000
-
-other services 5,500
2,600
Rent- operating leases 72,775
84,936
Net foreign exchange loss -
-
Provision for employee entitlements 27,200
18,500
Loss on sale of fixed assets -
2,019
(b) Charging As Income :
Profit on sale of property, plant & equipment
13,938
29,101
MACK VALVES PTY LTD
A.C.N. 004 274 499
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS FOR THE
YEAR ENDED 30TH JUNE 2000
2000
1999
A$
A$
NOTE 4 : INCOME TAX EXPENSE
The Prima facie tax payable on operating profit
is reconciled to the income tax provided in the
accounts as follows :
Operating profit/(loss) before tax 386,547
302,498
Prima facie tax benefit on operating loss
before income tax at 36%
139,157
108,899
Tax effect of permanent differences
-disallowable expenses 3,708
2,727
-non-assessable income
- (1,980)
-underprovision for tax in prior year 79
-
-recognition of future tax benefit previously
expensed
(22,069) -
-devaluation of future tax benefit at 30th June 2000
due to change in tax rate from 36% to 34%
16,554
-
Income Tax Expense Attributable To Operating
Profit/Loss
137,429
109,646
NOTE 5 : REMUNERATION AND RETIREMENT BENEFITS
(a) Directors' Remuneration
Income paid or payable (includes management &
consulting fees, fringe benefits and
fringe benefits
tax payable) to all Directors of each
entity in the
economic entity by the entities of which
they are
Directors and any related parties 476,557
560,094
Number of directors whose income from the
company was within the following bands:
$ 0,000 - $ 9,999
2 2
The names of parent entity Directors who have held
office
during the financial year are :
Max Chester
Jane Chester
(b) Retirement And Superannuation Payments
Amounts of a prescribed benefit given during the year
by
the parent entity or a related party to a Director or a
prescribed
superannuation fund in connection with the retirement
from a
prescribed office -
-
MACK VALVES PTY LTD
A.C.N. 004 274 499
NOTES TO AND FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED
30TH JUNE, 2000
2000
1999
A$
A$
NOTE 6 : DIVIDENDS
Dividends proposed or paid 100,000
70,000
Representing $18.85 per share (1999: $13.19),
fully franked.
NOTE 7 : CASH
Cash At Bank 132,826
202,973
Cash On Hand 2,342
3,278
135,168
206,251
NOTE 8 : CURRENT ASSETS- RECEIVABLES
Trade debtors 1,553,497
892,328
Other amounts receivable 7,600
-
Less : provision for doubtful debts (75,000)
(75,000)
1,486,097
817,328
$51,129 of the trade debtors are denominated in U.S.
dollars. The largest customer comprises 18% of the
sales for the year and approximately 20% of the
trade debtors at 30th June, 2000.
No other debtors are greater than 10% of receivables at
30th June,
2000.
NOTE 9 : CURRENT ASSETS - INVENTORIES
Finished goods 646,732
760,432
Work in progress 143,548
120,551
Raw materials and components
913,268 928,753
Provision for obsolescence (78,000) (78,000)
1,625,548 1,731,736
NOTE 10 : CURRENT ASSETS - OTHER
Prepayments 19,424
15,829
19,424 15,829
MACK VALVES PTY LTD
A.C.N. 004 274 499
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30TH JUNE 2000
2000
1999
A$
A$
NOTE 11 : PROPERTY, PLANT & EQUIPMENT
Freehold land and buildings:
Land: at directors' valuation 1987 500,000
500,000
Buildings: at directors' valuation 1987 1,000,000
1,000,000
Buildings: at cost 4,474
4,474
Less accumulated depreciation (260,963)
(240,873)
1,243,511
1,263,601
Plant and equipment:
Motor vehicles at cost 342,477
396,728
Less accumulated depreciation (255,836)
(262,390)
86,641
134,338
Plant at cost 1,553,100
1,550,436
Less accumulated depreciation (1,225,714)
(1,130,936)
327,386 419,500
Furniture & Equipment at cost 50,144 50,144
Less accumulated depreciation (43,570) (41,707)
6,574 8,437
Office equipment at cost 224,461 200,159
Less accumulated depreciation (181,181) (160,614)
43,280 39,545
Total property, plant & equipment 1,707,392 1,865,421
NOTE 12 : NON-CURRENT ASSETS - OTHER
Future income tax benefit 281,432 259,274
281,432 259,274
NOTE 13 : CURRENT LIABILITIES - CREDITORS & BORROWINGS
Creditors and accruals:
Denominated in Australian Dollars 467,718 305,710
Denominated in United States Dollars 79,936 -
Owing to controlling entity 100,000 100,000
Lease liability 65,181 60,344
712,835 466,054
MACK VALVES PTY LTD
A.C.N. 004 274 499
NOTES TO AND FORMING PART OF THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30TH JUNE 2000
2000 1999
A$ A$
NOTE 14 : CURRENT LIABILITIES - PROVISIONS
Provision for income tax 139,055 47,751
Provision for annual leave 181,200 168,000
Provision for long service leave 247,088 264,968
Provision for warranty 20,000 20,000
Other provisions 41,000 11,000
628,343 511,719
NOTE 15 : NON-CURRENT LIABILITIES - BORROWINGS
Amount due to parent entity
- 120,000
Lease liabilities 42,271 107,452
42,271 227,452
NOTE 16 : NON-CURRENT LIABILITIES - PROVISIONS
Long service leave 44,912 13,032
44,912 13,032
Aggregate employee entitlement liability 473,200 446,000
NOTE 17 : SHARE CAPITAL
Issued and paid up
530,622 (1999: 530,622) ordinary shares,
fully paid 1,061,244 1,061,244
MACK VALVES PTY LTD
A.C.N. 004 274 499
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30TH JUNE 2000
2000 1999
A$ A$
NOTE 18a : RESERVES
General reserve 140,000 140,000
Asset revaluation reserve 214,777 214,777
354,777 354,777
There have been no movements in reserves during the period.
NOTE 18b : EARNINGS PER SHARE
Earnings per ordinary share 46.95 36.34
NOTE 19 : CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
There were no material capital commitments nor contingent
liabilities as at 30th June, 2000.
NOTE 20 : EVENTS SUBSEQUENT TO BALANCE DATE
There were no material events that occurred after the balance
date that have a significant effect on the results and financial
position of the entity as at 30th June, 2000.
NOTE 21 : SEGMENTAL REPORTING
The principal activity of the company is the manufacture of valves.
The company operates predominantly in Australia.
MACK VALVES PTY LTD
A.C.N. 004 274 499
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30TH JUNE 2000
2000 1999
A$ A$
NOTE 22: LEASE COMMITMENTS
Operating leases: motor vehicles
Due within one year 26,096 17,293
Due within one to two years 21,041 17,293
Due two to five years 6,606 12,238
Due after five years - -
53,743 46,824
Operating leases: premises
Due within one year 57,770 57,310
Due within one to two years 52,770 57,310
Due two to five years 48,965 100,547
Due after five years - -
159,505 215,167
Capitalized finance leases: plant & equipment
Due within one year 70,828 71,354
Due within one to two years 38,352 71,354
Due two to five years 5,384 43,999
Due after five years - -
114,564 186,707
less future finance charges (5,235) (18,912)
Liability as per balance sheet 109,329 167,795
Leased plant and equipment 243,804 243,804
(accumulated amortization) (104,304) (60,528)
139,500 183,276
NOTE 23 : RELATED PARTY TRANSACTIONS
Ultimate Parent Company
The ultimate parent company is Maxwell Industrial Sales Pty Ltd, a
company incorporated in Australia.
Transactions with Related Parties
-management fees 476,557 560,094
-dividends 100,000 70,000
-directors fees - -
Management services are provided to the company by Maxwell
Industrial
Sales Pty Ltd, an entity which owns 100% of its share capital.
There were no other transactions with related parties during the
period.
MACK VALVES PTY LTD
A.C.N. 004 274 499
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30TH JUNE 2000
2000 1999
A$ A$
NOTE 24 : CASH FLOW INFORMATION
(a) Reconciliation Of Cash :
For the purposes of the statement of cash flows,
cash includes cash on hand and investments readily
convertible to cash, net of outstanding bank overdrafts.
Cash on hand 2,342 3,278
Cash at bank 132,826 202,973
135,168 206,251
(b) Reconciliation Of Cash Flows From Operations With
Operating Profit or Loss After Income Tax :
Operating Profit/(Loss) After Income Tax 249,118 192,852
Add / (Less) : Non-Cash Flows In Operating Result
Depreciation 170,433 195,920
Profit on sale of non-current assets (13,938) (27,082)
Increase / (Decrease) in employee provisions 27,200
18,500
Increase / (Decrease) in other provisions 60,915 (78,355)
Add / (Less) : Changes In Assets And Liabilities:
Decrease/ (Increase) in receivables (668,769) 300,071
Decrease/ (Increase) in prepayments (3,595) 32,767
Decrease/ (Increase) in inventories 106,188 47,443
Decrease/ (Increase) in deferred taxes payable(22,157) 28,126
Increase in income taxes payable 91,304 (35,272)
Increase / (Decrease) in accounts payable 211,029
(56,491)
Cash Flows From Operations 207,728 618,479
(c) Non-cash Financing and Investing Activities
There were no non-cash financing and investing activities of a material
nature.
(d) Credit Stand-by Arrangements and Loan Facilities
The company has a bank overdraft facility amounting to $200,000 (1999
$200,000).
The facility was unused at 30th June 2000 and 1999.
MACK VALVES PTY LTD
A.C.N. 004 274 499
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30TH JUNE 2000.
NOTE 25: FINANCIAL INSTRUMENTS
(a) Interest Rate Risk
The entity's exposure to interest rate risk, which is the risk that a
financial instrument's value will fluctuate as a result of changes in
market interest rates and the effective weighted average interest rates
on classes of financial assets and financial liabilities, is as follows
:
30th June, 2000
Effective Floating Fixed Interest rate Maturing
Interest Interest Within1 To 5 Over 5Non-Int.
Rate Rate 1 Year Years Years Bearing Total
% $ $ $ $ $ $
FINANCIAL ASSETS
Cash 4.8 132,826 - - - 2,342
135,168
Receivables - - - - 1,486,097
1,486,097
TOTAL FINANCIAL ASSETS 132,826 - - - 1,488,439 1
,621,265
FINANCIAL LIABILITIES
Accounts Payable - - - - 547,654
547,654
Lease liabilities 7.8 - 65,181 42,271- - 107,452
Borrowings:Related parties - - - - 100,000
100,000
TOTAL FINANCIAL LIABILITIES 65,18142,271 - 647,654 755,106
NET FINANCIAL ASSETS 866,159
30th June, 1999
Effective Floating Fixed Interest rate Maturing
Interest Interest Within1 To 5 Over 5Non-Int.
Rate Rate 1 Year Years Years Bearing Total
% $ $ $ $ $ $
FINANCIAL ASSETS
Cash 4.5 202,973 - - - 3,278 2
06,251
Receivables - - - - 817,328 817,328
TOTAL FINANCIAL ASSETS 202,973 - - - 820,606
1,023,579
FINANCIAL LIABILITIES
Accounts Payable - - - - 305,710
305,710
Lease liabilities7.8 - 60,344 107,452 - -
167,796
Borrowings : Related parties
- - - - - 220,000 220,000
TOTAL FINANCIAL LIABILITIES - 60,344107,452- 525,710
693,506
NET FINANCIAL ASSETS 330,073
MACK VALVES PTY LTD A.C.N. 004 274
499
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30TH JUNE 2000.
NOTE 25: FINANCIAL INSTRUMENTS (Continued)
(b) Net fair value of financial assets and liabilities
The net fair value of cash and cash equivalent and non-interest
bearing monetary financial assets and financial liabilities
approximates their carrying value.
The net fair value of other monetary financial assets and
financial liabilities is based upon market prices where a market
exists, or by discounting the expected future cash flows for
other assets.
(c) Reconciliation of net financial assets to net assets 2000 1999
A$
A$
Net financial assets per above 866,159
330,073
Non-financial assets and liabilities
Inventories
1,625,548 1,731,736
Property, plant & equipment
1,707,392 1,865,421
Future income tax benefit
281,432 259,274
Provisions
(673,255) (524,751)
Prepayments 9,424
15,829
Net assets per balance sheet 3,826,700
3,677,582
EXHIBIT 99.2
Proforma Financial Information
On November 1, 2000, Goddard Industries, Inc. (Goddard) acquired
substantially all of the net assets of Mack Valves Pty Ltd (Mack) of
Melbourne, Australia in a transaction accounted for as a purchase. The
provisional purchase price of $3,618,000 (A$6,921,000) was financed
through approximately $3,668,000 of secured credit facilities furnished
by Fleet National Bank and National Australia Bank Limited. In addition,
contingent consideration up to $639,000 will be required if Mack achieves
certain pre-established sales levels during the five-year period ending
on September 30, 2005. The excess of the provisional purchase price over
the fair value of the assets acquired plus the transactions costs
(Goodwill) was approximately $2,794,000.
The proforma exhibits are based upon the audited financial statements of
Goddard as of, and for the year ended, September 30, 2000 and the audited
financial statements of Mack as of, and for the year ended, June 30,
2000. Income Statement accounts were converted to US dollars using a
weighted average exchange rate for the year ending June 30, 2000, of
$.6319 per A$. Balance sheet accounts were converted using the June
30,2000 exchange rate of $.6025 per A$. The proforma exhibits include
the following:
1) Consolidating proforma balance sheet as of September 30, 2000 that
reflects:
A. The proceeds of the secured bank financing,
B. payment of deferred finance fees in connection with the secured
bank financing,
C. removal of the Mack assets that were not acquired,
D. elimination of deferred tax assets related to assets and
liabilities not acquired
or assumed in the transaction,
F. accrual of transaction costs, and
G. recording payment to seller, recording assets at fair value, and
recording related Goodwill.
2) Consolidating proforma statement of income that presents income (loss)
from continuing operations for the year ended September 30, 2000 as if
the above transactions took place on October 3, 1999. The proforma
adjustments:
A. record interest expense on the acquisition financing,
B. record amortization of deferred finance fees,
C. eliminate costs incurred by seller that will not be incurred by
buyer,
D. record new rent and consultancy fees,
E. record amortization of Goodwill over 30 years, and
F. adjust income tax provision.
Goddard Industries, Inc and Subsidiaries
Proforma Balance Sheet
(in thousands)
Goddard
Industries,
Proforma Inc. and
Mack Valves
Proforma Adjustments Subsidiaries PTY
LTD
Current assets:
Cash $ 1,384 A $ 3,908 $ 1,631 $
81
B (66)
G (4,170)
Accounts receivable 1,361 466
895
Inventory 3,025 2,046
979
Refundable income taxes 92 92
-
Prepaid Items 59 47
12
Deferred income taxes 98 98
-
Total current assets 6,019 (328) 4,380
1,967
Property and Equipment 5,285 C (906) 4,569
2,214
F (592)
Accumulated depreciation (3,217)C 157 (3,217)
(1,185)
F 1,028
Property & Equipment, net 2,068 (313) 1,352
1,029
Other assets
Deferred income taxes 176 D (67) 73
170
Deferred finance fees 73 B 73 -
-
Investments 250 - 250
-
Deferred Charges 19 E (131) 150
-
Goodwill 2,850 E 613 -
-
F (436)
B (7)
G 2,680
Total other assets 3,368 2,725 473
170
Total assets $ 11,455 $ 2,084 $ 6,205 $
3,166
Current liabilities
Current maturities
of long-term debt $ 284 A $ 200 $ 45 $
39
Accounts payable 480 150
330
Accrued expenses 1,006 E 482 229
295
Income taxes payable 84 -
84
Deferred compensation 71 71
-
Due related companies 60 -
60
Total current liabilities 1,985 682 495
808
Long-term debt
Deferred compensation 473 - 446
27
Line of credit 1,100 A 1,100 -
-
Notes payable 2,633 A 2,608 -
25
Total long-term debt 4,206 3,708 446
52
G (1,490)
D (67) Shareholders'
Equity 5,264 C (749) 5,264
2,306
Total liabilities and shareholders'
equity $ 11,455 $ 2,084 $ 6,205 $
3,166
A Record Bank borrowings
B Payment of deferred finance fees
C Remove building not transferred
D To eliminate deferred income tax asset related to assets and
liabilities not transferred
E To accrue closing costs and related goodwill
F Adjust property and equipment to fair value
G Record payment to seller and related additional goodwill
Goddard Industries, Inc and Subsidiaries
Proforma Statement of Income
(in thousands)
Goddard
Industries.
Proforma Inc. and
Mack Valves
Proforma Adjustments Subsidiaries
PTY LTD
Sales $ 8,220 $ $ 3,813 $
4,407
Cost of sales 4,963 D 57 2,344
2,562
Gross profit 3,257 (57) 1,469
1,845
Selling & Administrative
Expenses 2,793 C (314) 1,355
1,638
D 114
Operating income 464 143 114
207
Other income (expense)
Interest expense (427)A (367) (47)
-
B (13) -
-
Amortization of Goodwill (95)E (95) -
-
Other 272 - 235
37
Total other income (expense)(250) (475) 188
37
Income before taxes 214 (332) 302
244
Income taxes 72 F (130) 115
87
Net income $ 142 $ (202) $ 187 $
157
Earnings per share:
Basic $ 0.07
Diluted $ 0.07
Weighted average number of shares
Basic 2,133,709
Diluted 2,167,501
A Record interest expense on acquisition financing
B Record amortization of Deferred finance fees
C Eliminate costs incurred by seller not to be incurred by
buyer
D Record new rent and consulting fee
E Record amortization of Goodwill over 30 years
F Adjust income tax provision
