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| Subject: NRMA loss grows: ERG and other investments to blameSeptember 3, 2003$22.4 million written off | |
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Author: The "strategic alliance" with ERG, formed two years ago by former CEO Rob Carter, has now been unwound. |
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Date Posted: Wednesday, September 03, 09:01:43pm In reply to: Newspapers reporting result--March 7 2003 SMH 's message, "Noteholders have tickets to ride" on Thursday, March 06, 08:38:56am NRMA loss grows: ERG and other investments to blame By Anne Lampe September 3, 2003 Print this article Email to a friend Road service group NRMA Ltd's 2002-03 annual accounts show that the biggest contributors to the group's increasing losses were $22.4 million written off its "strategic" investment in automatic ticketing operator ERG as well as a $25.7 million dip in the performance of its investments. The group's net loss was $51.1 million in the year to June 30, 2003, compared to a $23 million loss a year earlier. The accounts reveal that revenue from operations (road service and car inspections) rose 3 per cent during the year to $157.1 million while expenses remained almost static at $196.4 million. The "strategic alliance" with ERG, formed two years ago by former CEO Rob Carter, has now been unwound. NRMA has also renegotiated its service agreement with IAG for the provision of distribution services set up three years ago. The $5 million rise in those fees has been renegotiated down by $2 million. NRMA's traditional policy of reporting NRMA's investments at cost was also changed during the year to value investments at market prices. advertisement advertisement Directors say that the change in policy was taken after consultation with its auditors and reflects NRMA's decision to move to a policy that is more in line with international accounting standards. Legal fees paid out on behalf of the board and in particular its former chairman Nick Whitlam have also increased running expenses. Last year legal fees associated with board-related matters cost the company $1.3 million. But this figure excludes a further $345,116 paid during the year to fund Mr Whitlam's defence costs against a breach of directors' duties action mounted by the Australian Securities and Investments Commission - bringing the total cost associated with that defence over two years to $661,761. These fees are intended to be recovered from ASIC if the regulator's High Court application for special leave to appeal fails. Other legal advice and litigation involving Mr Whitlam cost the company $185,108. Legal fees paid on behalf of six other directors totalled $175,200. NRMA has this year increased membership fees by up to 40 per cent. The company says the cost of running annual and one extraordinary meeting last year cost $18 million in postage, legal and other costs. NRMA is claiming against its insurer for the cost of an extraordinary general meeting aborted by president Ross Turnbull after just an hour in October last year at a cost of $4 million. [ Next Thread | Previous Thread | Next Message | Previous Message ] |
| Subject | Author | Date |
| NRMA | Note 17.01b: National Roads and Motorists' Assoc. ceased trading on 30 June 2002. | Thursday, September 04, 08:22:08am |