SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Amendment No. 1
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 3, 1996
AMERICAN BANKNOTE CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
1-3410 13-0460520
(Commission File No.) (IRS Employer Identification No.)
200 Park Avenue, New York, NY 10166-4999
(Address of principal executive offices) (Zip Code)
Registrant's Telephone No., including area code: (212) 557-9100
<PAGE>
The undersigned Company hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K
dated June 18, 1996, as set forth in the pages attached hereto:
Item 7 (a) Financial Statements of Business Acquired
Item 7 (b) Pro Forma Financial Information
<PAGE>
ITEM 7 - Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired
The following special purpose audited financial statements of
Leigh-Mardon Security Group and the report of the Independent Accountants
with respect thereto:
1. Profit and loss statements and retained profits for the years
ended June 30, 1995, 1994 and 1993.
2. Balance sheets as of June 30, 1995 and 1994.
3. Statements of cash flows for the years ended June 30, 1995,
1994 and 1993.
4. Notes to special purpose financial statements.
5. Report of Independent Accountants with respect to the balance sheets
of Leigh-Mardon Security Division as of June 30, 1995 and 1994 and
the related profit and loss statements and retained profits, and
statement of cash flows for each of the three years in the period
ended June 30, 1995, all prepared in Australian dollars.
<PAGE>
LEIGH MARDON SECURITY DIVISION
SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED
30 JUNE 1995
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Page 1
LEIGH MARDON SECURITY DIVISION
PROFIT AND LOSS STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED 30 JUNE 1995
<TABLE>
<CAPTION>
Note 1995 1994 1993
$A $A $A
<S> <C> <C> <C> <C>
Revenue
Sales revenue 2 104,844,693 102,628,356 67,330,627
Other revenue 3 1,102,020 917,003 596,036
Total revenue 105,946,713 103,545,359 67,926,663
Operating profit before abnormal
items and income tax 4 15,960,957 15,743,994 8,169,191
Abnormal items 5 (5,026,079) - (1,800,000)
Operating profit before income tax 10,934,878 15,743,994 6,369,191
Income tax expense attributable to
operating profit 6 (3,805,535) (5,436,186) (2,945,342)
Operating profit after tax 7,129,343 10,307,808 3,423,849
Retained profit/(loss) brought forward (6,342,732) (7,519,555) (5,230,784)
Adjustment due to initial adoption of
Accounting Standard AASB 1028,
Accounting for Employee Entitlements (781,584) - -
Total available for appropriation 5,027 2,788,253 (1,806,935)
Transfers (from)/to retained
profit/loss 17 (5,849,555) (9,130,985) (5,712,620)
Retained profit/(loss) at the end of
the period (5,844,528) (6,342,732) (7,519,555)
The profit and loss statements are to be read in conjunction with the notes to and forming
part of the special purpose financial statements set out on pages 4 to 26.
</TABLE>
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Page 2
LEIGH MARDON SECURITY DIVISION
BALANCE SHEETS
Note 1995 1994
$A $A
Current assets
Cash 7 176,885 201,453
Receivables 8 12,830,264 13,481,553
Inventories 9 13,561,773 10,573,973
Total current assets 26,568,922 24,256,979
Non-current assets
Property, plant and equipment 10 20,573,248 21,586,776
Intangibles 11 59,913,665 60,542,806
Other 12 569,929 1,940,819
Total non-current assets 81,056,842 84,070,401
Total assets 107,625,764 108,327,380
Current liabilities
Creditors and borrowings 13 11,838,043 13,599,530
Provisions 14 7,311,709 8,904,153
Total current liabilities 19,149,752 22,503,683
Non-current liabilities
Creditors and borrowings 15 288,691 285,708
Provisions 16 2,147,518 1,733,415
Total non-current liabilities 2,436,209 2,019,123
Total liabilities 21,585,961 24,522,806
Net assets 86,039,803 83,804,574
Shareholder's equity
Investors equity 17 90,594,665 89,111,812
Reserves (capital) 17 1,289,666 1,035,494
Retained profits / (losses) 17 (5,844,528) (6,342,732)
Total shareholder's equity 86,039,803 83,804,574
The balance sheets are to be read in conjunction with the notes to and forming
part of the special purpose financial statements set out on pages 4 to 26.
<PAGE>
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Page 3
LEIGH MARDON SECURITY DIVISION
STATEMENT OF CASH FLOWS
FOR THE THREE YEARS IN THE PERIOD ENDED 30 JUNE 1995
<TABLE>
<CAPTION>
Note 1995 1994 1993
$A $A $A
<S> <C> <C> <C> <C>
Cash flows from operating activities
Cash receipts in the course of operations 105,380,818 99,171,716 67,673,755
Cash payments in the course of
operations (86,311,525) (76,794,577) (53,090,427)
Interest received 19,337 41,231 15,019
Interest paid (1,248,745) (1,156,856) (1,093,000)
Abnormal items (5,026,079) - -
Net cash provided by operating
activities 23(iii) 12,813,806 21,261,514 13,505,347
Cash flows from investing activities
Payments for property, plant and
equipment (3,921,534) (5,000,280) (5,382,755)
Proceeds from sale on non-current assets 410,524 201,515 151,803
Payments for acquisition of businesses - (20,043,604) -
Net cash used in investing activities (3,511,010) (24,842,369) (5,230,952)
Cash flows from financing activities
Advance / (repayments) of investors
equity (7,899,867) 3,462,614 (8,554,071)
Payment of finance leases (330,046) (651,163) -
Net cash used by financing activities (8,229,913) 2,811,451 (8,554,071)
Net increase (decrease) in cash held 1,072,883 (769,404) (279,676)
Cash at the beginning of the financial
year 23(i) (853,789) (84,385) 195,291
Cash at the end of the financial year 23(i) 219,094 (853,789) (84,385)
The statements of cash flows are to be read in conjunction with the notes to
and forming part of the special purpose financial statements set out on
pages 4 to 26.
/TABLE
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Page 4
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
1 Accounting policies
The significant policies which have been adopted in the preparation of these
financial statements pursuant to Australian Generally Accepted Accounting
Principles are:
Basis of preparation
The financial statements have been drawn up as a special purpose financial
report as a result of sale agreements between certain Amcor Limited
controlled entities and the Purchaser, being certain controlled entities of
American Banknote Corporation.
The Economic Entity is the Leigh Mardon Security Division which comprises:
* Fortronic Technology Pty Ltd;
* The following divisions of Leigh Mardon Pty Ltd;
- Datacard;
- Security printing;
- Barcodes;
* The Datacard division of Leigh Mardon (NZ) Limited;
* The Cheque print division of Containers Packaging (NZ) Limited; and
* The Echo Pacific division of Kiwi Packaging (Cartons) Limited.
All these entities are under the common control of Amcor Limited.
The financial statements have been drawn up in accordance with applicable
Australian Accounting Standards, Urgent Issues Group Consensus Views, and
Schedule 5 to the Corporations Regulations that have a material effect, with
the following exception:
* the financial statements are a combined set of accounts comprising a
number of entities and other financial information and do not satisfy the
definition of an economic entity as prescribed in AASB 1024 Consolidated
Accounts.
Reporting currency
These financial statements have been prepared in Australian dollars ($A).
<PAGE>
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Page 5
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
1 Accounting policies (continued)
Taxation
The Economic Entity adopts the accounting policy for treatment of income tax
as set out in Accounting Standard AASB 1020 (Tax Effect Accounting) whereby
the taxation benefits or liabilities, calculated at the current rate of tax,
which arise due to differences between the time when items are taken up in
the entity's accounts and when they are to be taken up for income tax
purposes are shown either as a future tax benefit or as a deferred tax
liability. Where applicable, the future tax benefit relating to tax losses
is not carried forward as an asset unless the benefit can be regarded as
being virtually certain of realisation. These benefits will be brought to
account as a reduction in income tax expense in the period in which they are
recouped.
Depreciation
Plant and equipment, are depreciated at rates based upon their expected
useful lives using the straight line method:
Rate
* Computer equipment; 20%
* Motor vehicles; and 15%
* All other assets. 8%
* Leasehold improvements are amortised over the period of the lease or
their estimated useful lives whichever is the shorter.
Employee benefits
Up to the period ended 30 June 1994, provisions for employee benefits such
as wages, salaries, sick leave, annual leave and long service leave, etc.,
were calculated to cover accumulated entitlements at balance date.
From 1 July 1994, provisions for employee entitlements were calculated in
accordance with the new Accounting Standard AASB 1028 (Accounting for
Employee Entitlements). These employee entitlements include, where
appropriate, forecast future increases in wages and salaries, grossed up for
on-costs, and based on the Economic Entity's experience with staff
departures. Provisions relating to long service leave, related on-costs and
WorkCover self-insurance have been calculated to represent the present value
of estimated future cash outflows discounted to balance date. Liabilities
for employee entitlements which are not expected to be settled within 12
months are discounted using the rate attaching to those national government
securities at balance date which most closely match the terms of maturity of
the related liabilities.
The adjustment resulting from the initial adoption of AASB 1028 was booked
to retained earnings / accumulated losses.
<PAGE>
<PAGE>
Page 6
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
1 Accounting policies (continued)
Consolidated accounts
The financial statements are a combined set of accounts comprising a number
of entities (detailed above) and other financial information. The balances
and effects of transactions between these entities have been eliminated.
Property, plant and equipment
Depreciable property, plant and equipment are shown in the accounts at cost
or valuation less provisions for depreciation. Depreciation rates are based
upon expected useful lives using the straight line method.
The carrying amounts of all property, plant and equipment are reviewed
annually. If the carrying amount of an item of property, plant and
equipment exceeds recoverable amount, the asset is written down to the
lesser amount. In assessing recoverable amount, the relevant cash flows are
not discounted to their present value.
Inventories
Inventories on hand are valued at the lower of cost (including an
appropriate proportion of fixed and variable overheads) or net realisable
value in the normal course of business.
Foreign currency translation
The financial statements of overseas controlled entities which are
classified as being financially and operationally independent are converted
to the reporting currency at balance date using the current rate method as
set out in Accounting Standard AASB 1020 (Foreign Currency Translation).
Any exchange gains / losses arising from the effect of the translation of
the balance sheets are transferred to the exchange fluctuation reserve.
All material foreign currency transactions are subject to forward cover /
hedge contracts and any exchange gains / losses arising from the effect of
currency fluctuations on the underlying transactions are offset by the
exchange gains / losses on the forward cover / hedge contract.
The approximate rate of exchange as of the purchase date between the US$ and
the $A was 0.79.
Leased assets
The Economic Entity adopts the provisions of Accounting Standard AASB 1008
(Accounting for Leases) in respect of those assets of the Economic Entity
which are the subject of finance leases.
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Page 7
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
1 Accounting policies (continued)
Goodwill
The Economic Entity recognises goodwill on acquisitions of controlled
entities and businesses as required by Accounting Standard AASB 1013
(Accounting for Goodwill). Substantially all of the Economic Entity's
goodwill is systematically amortised using the inverted-sum-of-the-digits
method over the period of time during which the benefits are expected to
arise, but for a period not exceeding twenty years. The unamortised balance
of goodwill is reviewed annually and adjusted where it is considered
necessary.
Superannuation funds
The Economic Entity contributes to various superannuation funds.
Contributions are charged against profit as and when they are paid or are
payable.
<PAGE>
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Page 8
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
2 Sales revenue
1995 1994 1993
$A $A $A
<S> <C> <C> <C>
Net sales
- - external 104,844,693 102,610,613 67,101,782
- - to controlled entities of
Amcor Limited - 17,743 228,845
Total sales revenue 104,844,693 102,628,356 67,330,627
3 Other revenue
Interest received
- - from other persons 19,937 41,231 15,019
Other income
- - Proceeds of disposal of property,
plant and equipment 410,524 201,515 151,803
- - Other revenue
- from other persons 671,559 674,257 429,214
Total other income 1,082,083 875,772 581,017
Total other revenue 1,102,020 917,003 596,036
</TABLE>
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Page 9
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
Note 1995 1994 1993
$A $A $A
4 Operating profit
<S> <C> <C> <C>
Operating profit is arrived at
after charging / (crediting):
Amortisation and depreciation of:
- - property, plant and equipment 4,553,593 3,475,290 3,471,708
- - leased plant and equipment 14,319 188,000 -
- - goodwill 677,991 446,409 214,947
Amounts received or due and
receivable by the auditors
- - KPMG (Australia)*
auditing the financial statements - - -
other services - - -
- - other Auditors
auditing the financial statements 21,395 8,671 2,135
other services - - -
* KPMG audit fees in Australia are
paid by Amcor Limited, the
ultimate parent entity.
Interest paid
- - to divisions of Amcor Limited 1,244,601 1,112,965 1,093,000
- - to other persons - 411 -
- - finance charges leased assets 4,144 43,480 -
Provisions
- - employee benefits 2,462,947 1,966,143 1,254,439
- - doubtful debts 66,237 56,022 2,880
- - diminution in inventories 307,587 58,370 201,000
- - other - 790,590 260,000
(Profit) on disposal of property,
plant and equipment (66,014) (221,083) (2,845)
Loss on disposal of property, plant
and equipment 22,640 236,124 70,758
Rental charges - operating leases 2,392,373 2,525,710 1,867,507
Research and development costs 290,041 144,339 -
Foreign currency exchange (gains)/
losses-realised (15,325) (23,121) 5,011
Foreign currency exchange (gains)/
losses-unrealised (3,605) (2,916) (82,399)
</TABLE>
<PAGE>
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Page 10
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
1995 1994 1993
$A $A $A
<S> <C> <C> <C>
5 Abnormal items
The operating profit includes the
following abnormal gains/(losses)
Research and development
costs written off - - (1,800,000)
Supply contract termination payment (5,026,079) - -
Total abnormal items before tax (5,026,079) - (1,800,000)
Income tax expense on abnormal items
Research and development costs
written off - - 702,000
Supply contract termination payment 1,658,606 - -
Total income tax expense / (benefit)
on abnormal items 1,658,606 - 702,000
Net (loss) on abnormal items after
income tax (3,367,473) - (1,098,000)
6 Income tax expense
Prima facie tax expense calculated at
the standard rate of 33% (1993: 39%) 3,608,510 5,195,518 2,483,985
Add/(deduct) the tax effect of
permanent differences:
Goodwill amortisation 223,737 147,315 83,829
Entertainment expenses 36,653 86,855 40,554
Fringe benefits tax - 40,185 37,440
Research & development incentive (30,413) (61,752) (166,407)
Investment allowance - (39,553) -
Other permanent differences 10,375 67,618 28,706
Foreign tax rate differential - - (19,638)
Effect of local tax rate change (21,900) - 456,873
Over provision of tax in prior years (21,427) - -
Total income tax expense 3,805,535 5,436,186 2,945,342
</TABLE>
<PAGE>
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Page 11
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
1995 1994
$A $A
7 Current assets: cash
Petty cash 22,308 33,336
Cash at bank 154,577 168,117
Total cash 176,885 201,453
8 Current receivables
Trade debtors 12,449,978 12,590,777
Less provision for doubtful debts (197,522) (139,362)
Debtors net of provision 12,252,456 12,451,415
Other debtors 231,373 43,075
Prepayments 101,837 976,635
Short term deposits 244,598 10,428
Total current receivables 12,830,264 13,481,553
9 Current inventories
Raw materials and stores 4,635,915 3,271,099
Work in progress 5,044,397 4,077,161
Finished goods 5,586,489 5,514,323
Provision for obsolescence (1,705,028) (2,288,610)
Total current inventories 13,561,773 10,573,973
<PAGE>
<PAGE>
Page 12
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
1995 1994
$A $A
10 Property, plant and equipment
Leasehold buildings
At cost 322,380 316,380
Less: provision for amortisation (151,612) (150,487)
Total 170,768 165,893
Plant and equipment
At cost 47,679,269 43,958,618
Less: provision for depreciation (27,276,789) (23,291,450)
Total 20,402,480 20,667,168
Leased plant and equipment
Capitalised finance leases - at cost - 973,087
Less: provision for amortisation - (219,372)
Total - 753,715
Total property, plant and equipment 20,573,248 21,586,776
1 Intangibles
Goodwill - at cost 61,253,597 61,204,161
Less: provision for amortisation (1,339,932) (661,355)
Total intangibles 59,913,665 60,542,806
<PAGE>
<PAGE>
Page 13
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
1995 1994
$A $A
12 Other non-current assets
Future income tax benefits arising from:
- - accumulated timing differences 372,205 227,690
- - accumulated tax losses - 1,636,835
Other non-current assets 197,724 76,294
Total other non-current assets 569,929 1,940,819
13 Current creditors and borrowings
Bank overdraft 202,389 1,065,670
Trade creditors and accruals 8,434,083 9,171,474
Deferred revenue 478,668 754,901
Lease liabilities - 330,046
Other creditors 1,909,343 1,650,983
Amounts owing to:
- - controlled entities of Amcor Limited
(trade related) 813,560 626,456
Total current creditors and borrowings 11,838,043 13,599,530
14 Current provisions - liability
Income tax 3,839,489 5,183,172
Employee benefits 3,055,807 2,613,737
Other 416,413 1,107,244
Total current provisions - liability 7,311,709 8,904,153
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<PAGE>
Page 14
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
1995 1994
$A $A
15 Non-current creditors and borrowings
Other creditors 288,691 285,708
Total non-current creditors and borrowings 288,691 285,708
16 Non-current provisions - liability
Employee benefits 1,953,712 1,671,078
Other 193,806 62,337
Total non-current provisions - liability 2,147,518 1,733,415
<PAGE>
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Page 15
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
17 Shareholder's equity
Investor's Share Retained Exchange Total
Equity Premium Profits Fluctuation
Reserve /(losses) Reserve
(Capital) (Capital)
$A $A $A $A $A
<S> <C> <C> <C> <C> <C>
Balance - 1 July 1992 74,929,664 1,031,862 (5,230,784) - 70,730,742
Operating profit after tax 3,423,849 3,423,849
Profit transferred (1) 5,712,620 (5,712,620) -
Advance/(repayments) of
investors equity (2) (8,554,071) (8,554,071)
Balance - 30 June 1993 72,088,213 1,031,862 (7,519,555) - 65,600,520
Operating profit after tax 10,307,808 10,307,808
Profit transferred (1) 9,130,985 (9,130,985)
Fluctuation on translation
of foreign controlled
entities 3,632 3,632
Advance/(repayments) of
investors equity (2) 3,462,614 3,462,614
Tax liability transferred
to investors 4,430,000 4,430,000
Balance - 30 June 1994 89,111,812 1,031,862 (6,342,732) 3,632 83,804,574
AASB 1028 Adjustment (781,584) (781,584)
Operating profit after tax 7,129,343 7,129,343
Profit transferred (1) 5,849,555 (5,849,555) -
Fluctuation on
translation of
foreign controlled
entities 254,172 254,172
Advance/(repayments) of
investors equity (2) (7,899,867) (7,899,867)
Tax liability transferred
to investors 3,533,165 3,533,165
Balance - 30 June 1995 90,594,665 1,031,862 (5,844,528) 257,804 86,039,803
</TABLE>
(1) The Datacard, Security Printing and Echo Pacific divisions transfer
their profits to their respective parent entity at the end of each year.
(2) Refer Note 23 (ii): financing facilities.
<PAGE>
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Page 16
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
1995 1994
$A $A
18 Capital expenditure commitments
Contracted but not provided for:
- - land and buildings - -
- - plant and equipment - -
- - other 84,000 -
Total 84,000 -
Periods during which these commitments
are payable:
- - not later than one year 84,000 -
Total 84,000 -
19 Lease commitments
Finance leases
Lease commitments payable and provided for:
- - not later than one year - 334,190
Total minimum lease payments 334,190
Deduct: future finance charges - 4,144
Lease liability (current) - 330,046
Operating leases
Lease and hire commitments payable but not
provided for:
- - not later than one year 2,160,609 2,465,213
- - later than one year but not later than
two years 1,929,292 1,839,344
- - later than two years but not later than
five years 4,264,740 3,964,957
- - later than five years 1,152,502 2,160,320
Total minimum operating lease payments 9,507,143 10,429,834
<PAGE>
<PAGE>
Page 17
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
20 Contingent liabilities
The Entity is a party to legal proceedings that are considered to be either
ordinary, routine litigation incidental to its business and not material to
its financial position.
Under the terms of the Class Order issued by the Australian Securities
Commission on 19 December 1991, which relieved certain wholly owned
Australian subsidiaries from the requirement to prepare audited financial
statements, Amcor Limited and certain subsidiaries have entered into approved
deeds for the Gross Guarantee of liabilities. Fortronic Technology Pty Ltd
and Leigh Mardon Pty Ltd have entered into these approved deeds. No
liabilities subject to the Deeds of Gross Guarantee are expected to arise.
21 Parent and ultimate parent entity
The parent entity of each legal entity in the Leigh Mardon Security Division
is:
Parent Entity
Fortronic Technology Pty Ltd Leigh Mardon Pty Ltd
Leigh Mardon Pty Ltd Containers Pty Ltd
Leigh Mardon (NZ) Limited CPE Data Card Pty Ltd
Containers Packaging (NZ) Limited Amcor Packaging (New Zealand) Ltd
Kiwi Packaging (Cartons) Limited Containers Packaging (NZ) Limited
The ultimate parent entity for the purpose of Schedule 5 of the Corporations
Regulations is Amcor Limited, a company incorporated in NSW.
<PAGE>
<PAGE>
Page 18
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
22 Segment reporting
The Economic Entity manufactures various security products.
Geographic segments
<TABLE>
<CAPTION>
Profit before tax Sales revenue
1995 1994 1993 1995 1994 1993
$A $A $A $A $A $A
<S> <C> <C> <C> <C> <C> <C>
Australia 16,147,072 15,659,911 8,910,015 98,052,681 96,763,227 64,579,832
New Zealand 1,042,693 1,199,708 337,157 7,243,072 6,233,725 3,069,950
Profit before interest
and tax 17,189,765 16,859,619 9,247,172
Net interest (1,228,808) (1,115,625) (1,077,981)
Abnormals (5,026,079) - (1,800,000)
Inter-segment sales (451,060) (368,596) (319,155)
10,934,878 15,743,994 6,369,191 104,844,693 102,628,356 67,330,627
</TABLE>
Total assets
1995 1994
$A $A
Australia 103,295,331 104,623,439
New Zealand 4,330,433 3,703,941
107,625,764 108,327,380
<PAGE>
<PAGE>
Page 19
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
23 Notes to the statements of cash flows
(i) Reconciliation of cash
For the purpose of the Statements of Cash Flows, cash includes cash on hand
and at bank and short term deposits at call, net of outstanding bank
overdrafts. Cash as at the end of the financial year as shown in the
Statements of Cash Flows is reconciled to the related items in the balance
sheets as follows:
Note 1995 1994
$A $A
Cash 7 176,885 201,453
Short term deposits 8 244,598 10,428
Bank overdraft 13 (202,389) (1,065,670)
219,094 (853,789)
(ii) Financing facilities
The Economic Entity has no financing facilities. Cash balances are swept
daily to Amcor Limited and / or it controlled entities.
<PAGE>
<PAGE>
Page 20
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
23 Notes to the statements of cash flows (continued)
<TABLE>
<CAPTION>
1995 1994 1993
$A $A $A
<S> <C> <C> <C>
(iii) Reconciliation of operating
profit after income tax to net
cash provided by operating
activities
Operating profit after income tax 7,129,343 10,307,808 3,423,849
Add / (less) items classified as
investing/ financing activities:
(Profit)/loss on sale of
non-current assets (43,374) 15,041 67,913
Add/(less) non-cash items:
Amortisation 692,310 634,409 214,947
Amounts set aside to provisions 2,836,771 2,871,125 1,718,319
Depreciation 4,553,593 3,475,290 3,471,708
Notional tax charge 3,604,000 4,901,000 4,023,000
Research and development costs
written off - - 1,800,000
Net cash provided by operating
activities before change in assets and
liabilities 18,772,643 22,204,673 14,719,736
Change in assets and liabilities
adjusted for effects of purchase and
disposal of controlled entities during
the financial year:
(Increase)/decrease in inventories (3,295,387) (140,518) 1,667,513
(Increase)/decrease in other debtors
and prepayments 686,500 925,771 (427,122)
(Increase)/decrease in trade debtors 140,799 (4,130,897) (86,086)
(Increase)/decrease in other assets 83,891 (72,663) (196,145)
(Decrease)/increase in trade creditors (550,287) 4,436,189 1,177,251
(Decrease)/increase in deferred revenue (276,233) - -
(Decrease)/increase in provisions (3,087,266) (3,125,080) (1,195,722)
(Decrease)/increase in other creditors 261,343 946,940 (1,044,519)
(Decrease)/increase in income taxes
payable 77,802 217,099 (1,109,559)
Net cash provided by operating
activities 12,813,806 21,261,514 13,505,347
</TABLE>
<PAGE>
<PAGE>
Page 21
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
24 Superannuation commitments
The Economic Entity participates in a number of superannuation funds which
were established to provide benefits for employees and their dependents.
The funds cover Amcor Limited (and / or its controlled entities) sponsored
plans, industry / union plans and government plans.
Amcor Limited sponsored plans
The principal benefits are pensions or lump sums for members on resignation,
retirement, death or total permanent disablement. These benefits are
determined on either a defined benefit or accumulation benefit basis.
Employee contribution rates are either fixed by the rules of each fund or
selected by members from a specified range of dates. In addition to
legislative requirements, employer companies contribute to the balance of
the cost required to fund the defined benefits or, in the case of
accumulation funds, the amounts set out in the appropriate fund rules.
There exists a legally enforceable obligation on the employer companies to
make such contributions as are required under the rules.
1995 1994 1993
$A $A $A
Employer contributions made to
Defined Benefit Funds 882,402 986,436 429,392
Following the sale agreement, members of the Amcor Limited (and / or its
controlled entities) sponsored plans will be transferred to the Purchaser's
fund(s). The transfer amounts will be determined by Actuaries. Following
the most recent actuarial review of each fund the actuary in each case
concluded that the assets of each fund were sufficient to cover the value of
accrued benefits.
<PAGE>
<PAGE>
Page 22
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
25 Related party disclosures
1995 1994 1993
$A $A $A
<S> <C> <C> <C>
Transactions with Amcor Limited and/
or its controlled entities:
(1) Management fee paid to Containers
Packaging head office
(Amcor Limited) (i) 474,000 418,000 313,000
(2) Management fee paid to Leigh Mardon
Pty Ltd head office (i) 1,837,000 1,336,000 151,000
(3) Working capital interest paid to
Containers Packaging head office
(Amcor Limited) (ii) 1,212,572 1,112,965 1,093,000
(4) Paper products purchased from
Amcor Limited controlled entities (iii) 4,703,117 3,323,666 3,111,571
(5) Sales by the Security division
to Amcor Limited controlled entities (iii) 84,758 17,743 228,845
</TABLE>
(6) During the year ended 30 June 1995, $A1,625,363 of carried forward tax
losses were transferred at full consideration, to Leigh Mardon Pty Ltd group
companies. The transferee companies are not part of the Economic Entity.
(i) Fees paid to respective head office to recover head office expenditure
such as administration, accounting, credit control, IT System support,
audit, business development etc. Charges based on proportional revenue
basis.
(ii) Working capital interest is calculated monthly based on levels of
stock, trade debtors less trade creditors. Interest rate used is the
Westpac Reference Lending Rate.
(iii) These transactions are in the ordinary course of business and on
normal terms and conditions.
26 Acquisition of Businesses
In August 1993 the Security Printing business of John Sands was acquired for
cash consideration of $A19,025,253.
In May 1994 the Chequeprint business was acquired in New Zealand for cash
consideration of $A1,018,351.
<PAGE>
<PAGE>
Page 23
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
27 Information for United States investors
The special purpose financial statements of the Economic Entity are prepared
in accordance with Generally Accepted Accounting Principles applicable in
Australian ("Australian GAAP") (refer Note 1), which differ in certain
significant respects from Generally Accepted Accounting Principles in the
United States ("US GAAP").
The following is a summary of the major differences between Australian GAAP
and US GAAP that affect the Economic Entity which provides an expansion of
certain information included in the notes to and forming part of the
accounts.
(a) The term "provisions" is used in Australian GAAP to designate accrued
expenses with no definitive payment date. This can include such items as
employee leave entitlements not yet taken. Classification between current
and non-current is generally based on management assessments.
Provisions disclosed in notes 14 and 16 comply in all material respects with
US GAAP.
(b) Goodwill amortisation
Under Australian GAAP goodwill is amortised using the inverse sum of the
digits method over periods not exceeding 20 years.
The Economic Entity has formally adopted for US GAAP purposes the policy of
straight line amortisation and a 25 year life for goodwill.
(c) Research and development
In the fiscal year ended 30 June 1993, the accounts include an abnormal
write-off of research and development costs of $A1,800,000. This amount
includes $A1,603,855 which was incurred prior to 30 June 1992. To comply
with US GAAP an adjustment has been made to expense the $A1,603,855 in the
fiscal years prior to 30 June 1993.
(d) Employee entitlements
As described in note 1, the Economic Entity adopted the accounting for
employee entitlements in accordance with Accounting Standard AASB 1028
"Accounting for Employee Entitlements". Under Australian GAAP, the
cumulative effect was recorded as an adjustment to beginning retained
profits at 1 July 1994. The cumulative effect of such adoption under
Australian GAAP is materially consistent with the requirements of US SFAS
112, "Employees' Accounting for Postemployment Benefits", which was
effective for fiscal 1995. However, under US GAAP the cumulative effect of
such adoption is required to be presented as a separate component of fiscal
1995's statement of income.
<PAGE>
<PAGE>
Page 24
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
27 Information for United States investors (continued)
(e) Pension Plans
As detailed in Note 24, contributions to defined benefit plans have resulted
in the plans, in respect of employees of the Economic Entity, being fully
funded and adequate to sustain the actuarially calculated obligations. As
the actuarial obligation entitlements will be transferred as part of the
sale agreement, the expense per Australian GAAP represents actual expenses
incurred by the entities during the periods reported. While it is not
practical to complete the detailed calculations required by SFAS 87 in
respect of the entities' employees - in order to determine whether pension
expense disclosed in Note 24 would conform with US GAAP requirements, it is
estimated, based on the relationship of total Amcor SFAS 87 pension expense
to the total Australian GAAP pension expense of the Amcor Limited Group,
that the proportionately equivalent expense borne by these entities would
not be materially different.
<PAGE>
<PAGE>
Page 25
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
27 Information for United States investors (continued)
Reconciliation of Accounts to US GAAP
<TABLE>
<CAPTION>
1995 1994 1993
Note $A $A $A
<S> <C> <C> <C> <C>
Sales 104,844,693 102,628,356 67,330,627
Costs & expenses
Cost of goods sold 64,104,000 62,277,000 40,634,000
Selling & administrative 19,406,038 20,283,847 14,421,205
Depreciation & amortisation 5,245,903 4,109,699 3,686,655
88,755,941 86,670,546 58,741,860
Other (expense) income
Interest expense (1,248,745) (1,156,856) (1,093,000)
Foreign exchange gains/(losses),
net 18,930 26,037 77,388
Other (note 3) 1,102,020 917,003 596,036
Abnormal items (note 5) (5,026,079) - (1,800,000)
(5,153,874) (213,816) (2,219,576)
Income before income taxes 10,934,878 15,743,994 6,369,191
Income tax charge (3,805,535) (5,436,186) (2,945,342)
Net profit reported using
Australian GAAP 7,129,343 10,307,808 3,423,849
Adjustment for goodwill amortisation (b) (1,772,152) (2,041,758) (1,590,606)
Research and development written off (c) - - 1,603,855
Tax effect of above adjustments - - (625,503)
Income according to US GAAP before
changes in accounting principles 5,357,191 8,266,050 2,811,595
Cumulative effect of adoption of
SFAS 112 (781,584) - -
Net income according to US GAAP 4,575,607 8,266,050 2,811,595
/TABLE
<PAGE>
<PAGE>
Page 26
LEIGH MARDON SECURITY DIVISION
NOTES TO AND FORMING PART OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE THREE YEARS IN THE PERIOD ENDED JUNE 30, 1995
27 Information for United States investors (continued)
Reconciliation of Accounts to US GAAP
1995 1994
$A $A
Total assets reported using Australian GAAP 107,625,764 108,327,380
Cumulative adjustment for goodwill
amortisation (b) (5,404,516) (3,632,364)
Total assets according to US GAAP 102,221,248 104,695,016
Shareholders' equity at year end 86,039,803 83,804,574
Cumulative adjustment for goodwill
amortisation (b) (5,404,516) (3,632,364)
Restatement of beginning retained profits 781,584 -
Cumulative adjustment for adoption of SFAS 112 (781,584) -
80,635,287 80,172,210
<PAGE>
<PAGE>
Page 27
REPORT OF INDEPENDENT AUDITORS
To the directors of Amcor Limited
We have audited the accompanying financial statements of the Economic Entity
as defined in Note 1. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in Australia which do not differ in any significant respect from
auditing standards generally accepted in the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Economic Entity at
30 June 1995 and 30 June 1994 and the results of its operations and its cash
flows for each of the years in the three year period ended 30 June 1995, in
conformity with accounting principles generally accepted in Australia.
As discussed in Note 1 to the financial statements, the Economic Entity
changed its method of accounting for employee entitlement provisions
effective 30 June 1994, and recorded the cumulative effect as an adjustment
to beginning retained profits in accordance with accounting principles
generally accepted in Australia.
Accounting principles generally accepted in Australia vary in certain
significant respects from accounting principles generally accepted in the
United States. The application of United States generally accepted
accounting principles would have affected the results of operations for each
of the years in the three year period ended 30 June 1995 and shareholders'
equity at 30 June 1995 and 30 June 1994 to the extent summarised in Note 27
to the financial statements.
KPMG
Chartered Accountants
Melbourne 14, August 1996
<PAGE>
<PAGE>
ITEM 7 - Financial Statements, Pro Forma Financial Information and Exhibits
(b) Pro Forma Financial Information
COMBINED UNAUDITED PRO FORMA FINANCIAL INFORMATION
On June 3, 1996, the Company acquired a 55% equity interest in American
Banknote Australasia Ltd., an Australian corporation ("ABAL"), the purchaser
of the assets and business of the Leigh-Mardon Security Group of Australia and
New Zealand ("Leigh-Mardon"), from Amcor Limited ("Amcor"). ABAL's products
and services include financial and telephone cards, personalization systems,
bank and personal checks, electronic printing and service applications,
driver's licenses, payment systems and electronic point of sale terminals.
The purchase price including fees and expenses in connection with the
acquisition and financing was approximately $80.0 million, subject to
adjustment. The Company invested approximately $7.2 million cash and an Amcor
subsidiary acquired a 45% equity interest for approximately the same amount.
The transaction was financed, by the issuance of senior financing
("Non-recourse Senior Debt") of approximately $53.5 million and the issuance
of subordinated financing ("Non-recourse Subordinated Debt") of approximately
$18.4 million. The excess proceeds of the financing and equity investments
will be used for working capital purposes of ABAL.
The unaudited Pro Forma Combined Statements of Operations for the six
months ended June 30, 1996 and the year ended December 31, 1995 combines the
historical results of operations of the Company ("ABN") and Leigh-Mardon and
assumes that the acquisition had been effective as of the beginning of the
periods presented. The Company believes the unaudited Pro Forma Combined
Statements of Operations are not indicative of the actual results of operations
that would have occurred had the purchase been made as of January 1, 1995 or
of the results which will occur in the future.
The acquisition was accounted for as a purchase transaction in accordance
with APB No. 16 "Business Combinations." Based on a preliminary allocation of
the purchase, the transaction resulted in approximately $52.9 million as the
cost in excess of the fair market value of the underlying net assets acquired,
which cost will be amortized over 25 years. The allocation of purchase price
is preliminary and subject to adjustment upon receipt of final appraisal
information and management's final estimates as to the fair value of assets
acquired and liabilities assumed.
The unaudited Pro Forma Combined Statements of Operations have been
prepared using US Generally Accepted Accounting Principles ("GAAP"),
including certain purchase accounting assumptions. The Leigh-Mardon historical
financial statements included in the unaudited Pro Forma Combined Statements
of Operations have been translated into US dollars using average exchange rates
during the periods. The predecessor financial statements of Leigh-Mardon
included elsewhere herein include adjustments or disclosures necessary to
present the financial statements in accordance with GAAP.
<PAGE>
The unaudited Pro Forma Combined Statements of Operations is presented for
informational purposes only and does not purport to represent what the
Company's results of operations would have been had the transaction described
in fact occurred at the beginning of the periods indicated or to project the
Company's results of operations for any future date or period. The unaudited
Combined Pro Forma Statements of Operations have been prepared by the Company
and all calculations have been based upon assumptions deemed appropriate by
the Company. Certain of these assumptions are set forth under the notes to
the unaudited Pro Forma Combined Statements of Operations. These statements
should be read in conjunction with the historical consolidated financial
statements and the notes thereto of the Company included in the Company's
latest annual report on Form 10-K, the Company's latest quarterly reports
on Form 10-Q (including Form 10-Q for the quarter ended June 30, 1996, which
includes the balance sheet of Leigh-Mardon as of June 30, 1996 and its results
of operations for the month of June 1996) and the historical financial
statements and the notes thereto of Leigh-Mardon filed with this Form 8-K/A-1.
<PAGE>
AMERICAN BANKNOTE CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS- Unaudited
For the Six Months Ended June 30, 1996
Assumes that American Banknote Corporation ("ABN") Acquired Leigh-Mardon
Security Group ("Leigh-Mardon") as of January 1, 1996 in a Purchase
Transaction
<TABLE>
<CAPTION>
For the Six Months Ended June 30, 1996
(In thousands, except per share data)
Leigh- Pro Pro
ABN Mardon Forma Forma
Historical Historical Adjust's Combined
(*)
<S> <C> <C> <C> <C>
Sales $130,681 $33,474 $164,155
Costs and expenses:
Costs of goods sold 88,570 21,783 110,353
Selling and administration 19,228 4,504 23,732
Amortization of excess $ 890 (a)
cost on transaction - 800 (800)(b) 890
Depreciation and
amortization 8,697 1,277 542 (c) 10,516
116,495 28,364 632 145,491
14,186 5,110 (632) 18,664
Other (expense) income 987 (d)
Interest expense (12,641) (987) (2,959)(e) (15,600)
Foreign translation
loss, net (136) - (136)
Other, net (including
interest income) 380 5 385
(12,397) (982) (1,972) (15,351)
Income before taxes 1,789 4,128 (2,604) 3,313
Provision for taxes (501) 1,793 (908)(f) 384
Income before
minority interest 2,290 2,335 (1,696) 2,929
Minority interest 1,727 - 288 (g) 2,015
Income from
continuing operations $ 563 $ 2,335 $(1,984) $ 914
Average shares outstanding 20,000 20,000
Earnings per share from
continuing operations $ .03 $ .05
</TABLE>
(*) Additional five months of operations
Pro-Forma Adjustments
(a) Amortization of excess cost of investment over fair value of net
assets acquired over 25 years.
(b) Eliminate previous historical amortization.
(c) Adjustment based on additional fair value of fixed assets.
(d) Eliminate interest expense charged by former parent corporation, no
existing debt being assumed.
(e) Additional interest expense based on acquisition borrowings.
(f) Tax adjustment is based on deductible items at statutory rates.
(g) Minority interest is based on 45% of the after tax earnings of
Leigh-Mardon.
<PAGE>
AMERICAN BANKNOTE CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS - Unaudited
For the Year Ended December 31, 1995
Assumes that American Banknote Corporation ("ABN") Acquired Leigh-Mardon
Security Group ("Leigh-Mardon") as of January 1, 1995 in a Purchase
Transaction
<TABLE>
<CAPTION>
For the Year Ended December 31, 1995
(In thousands, except per share data)
Leigh- Pro Pro
ABN Mardon Forma Forma
Historical Historical Adjust's Combined
<S> <C> <C> <C> <C>
Sales $206,164 $77,874 $284,038
Costs and expenses:
Costs of goods sold 149,035 48,133 197,168
Selling and administration 39,851 13,341 53,192
Restructuring costs 14,304 - 14,304
Amortization of excess $2,038 (a)
cost on transaction - 1,845 (1,845)(b) 2,038
Depreciation and
amortization 14,824 2,600 1,326 (c) 18,750
218,014 65,919 1,519 285,452
(11,850) 11,955 (1,519) (1,414)
Other (expense) income 2,007 (d)
Interest expense (23,147) (2,007) (6,773)(e) (29,920)
Foreign translation
loss, net (38) - (38)
Other, net (including
interest income) 2,824 - 2,824
(20,361) (2,007) (4,766) (27,134)
Income (loss) before taxes (32,211) 9,948 (6,285) (28,548)
Provision for taxes (11,359) 4,089 (2,101)(f) (9,371)
Income (loss) before
minority interest (20,852) 5,859 (4,184)(g) (19,177)
Minority interest 1,563 - 754 2,317
Income (loss)from
continuing operations $(22,415) $ 5,859 ($4,938) ($21,494)
Average shares outstanding 19,095 19,095
Earnings (loss) per share from
continuing operations $(1.17) $(1.13)
</TABLE>
Pro-Forma Adjustments
(a) Amortization of excess cost of investment over fair value of net
assets acquired over 25 years.
(b) Eliminate previous historical amortization.
(c) Adjustment based on additional fair value of fixed assets.
(d) Eliminate interest expense charged by former parent corporation, no
existing debt being assumed.
(e) Additional interest expense based on acquisition borrowings.
(f) Tax adjustment is based on deductible items at statutory rates.
(g) Minority interest is based on 45% of the after tax earnings of
Leigh-Mardon.
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN BANKNOTE CORPORATION
DATE: August 14, 1996
BY: s/ John T. Gorman
John T. Gorman
Executive Vice President and
Chief Financial Officer
<PAGE>
BLANK END PAGE
