Adelaide Brighton Ltd 2012
Adelaide Brighton Ltd
ABN 15 007 596 018
Level 1
157 Grenfell Street
Adelaide
South Australia 5000
GPO Box 2155
Adelaide SA 5001
Telephone 08 8223 8000
Facsimile 08 8215 0030
Web www.adbri.com.au
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Highlights and financial summary
Chairman’s report
Managing Director’s report
Finance report
Map of operations
Review of operations
Cement and Lime
Concrete and Aggregates
Concrete Products
Joint ventures
Sustainability
People, health and safety
Corporate governance
Diversity policy
Directors
Shareholder information
Company addresses
Financial statements index
Directors’ report
Remuneration report
Financial statements
Directors’ declaration
Auditor’s independence declaration
Independent audit report
Financial history
Adelaide Brighton Limited Profile
Adelaide Brighton is a leading integrated construction materials
and industrial lime producer which supplies a range of products
into building, construction, infrastructure and mineral processing
markets throughout Australia. The Company’s principal activities
include the production, importation, distribution and marketing of
clinker, cement, industrial lime, premixed concrete, construction
aggregates and concrete products. Adelaide Brighton originated
in 1882 and is now an S&P/ASX100 company with 1,600
employees and operations in all Australian states and territories.
Cement Adelaide Brighton is the second largest supplier of
cement and clinker products in Australia with major production
facilities and market leading positions in the resource rich
states of South Australia and Western Australia. It is also
market leader in the Northern Territory. In addition to domestic
production, the Company is the largest importer of cement,
clinker and slag into Australia with an unmatched supply
network that enables efficient access to every mainland capital
city market. This network includes significant distribution joint
ventures in Victoria and Queensland.
Industrial Lime Adelaide Brighton is the largest producer of
industrial lime in Australia, with production assets in Western
Australia and South Australia. Industrial lime is an important
product for the mineral processing industry in resources rich
markets, particularly for the production of alumina and gold,
of which Australia is a leading producer.
Concrete and Aggregates Adelaide Brighton has a growing
presence in the premixed concrete and aggregates industry in
the eastern states of Australia, augmented by joint venture
operations. It has strategic aggregates reserves west of Sydney,
in regional New South Wales, south east Queensland and regional
Victoria through its wholly owned and joint venture operations.
Concrete Products Adelaide Brighton holds the leading
position in the Australian masonry products market, with
operations in Queensland, New South Wales, Victoria,
Tasmania and South Australia.
Joint ventures and associates Adelaide Brighton has a number
of significant investments in joint ventures and associates in
construction materials production and distribution. These include
major cement distribution joint ventures in Queensland (Sunstate
Cement), Victoria (Independent Cement and Lime) and New South
Wales; regional concrete and aggregates positions in Victoria,
Queensland and New South Wales; and a 30% investment in a
Malaysian white cement and clinker producer (Aalborg Portland
Malaysia), which supplies the Australian market.
Sustainability Adelaide Brighton’s commitment to sustainable
development is demonstrated through a range of actions
implemented across a balanced program of initiatives. Adelaide
Brighton believes that setting and achieving sustainability
objectives throughout the organisation assists long term
competitive business performance.
The Adelaide Brighton logo, the MCI logo,
the Cockburn Cement logo, the Swan Cement
logo, the Northern Cement logo, the Hy-Tec
logo and the Adbri Masonry logo are trade
marks of Adelaide Brighton Ltd or its
related bodies corporate.
Paper and printing of the Annual Report:
This report is printed carbon neutral by
Finsbury Green an ISO14001: 2004
(Environmental Management Systems)
certified company on paper accredited
by the Forest Stewardship Council (FSC),
which promotes environmentally appropriate,
socially beneficial and economically viable
management of the world’s forests.
The printing process uses digital printing
plates, eliminating film and associated
chemicals, vegetable-based inks made
from renewable sources. All paper waste
during the printing process is recycled.
Finsbury Green, is an independently
audited carbon neutral printer who
proactively reduces emissions then
offsets the balance with providers
approved under the Australian
Government’s National Offset
Carbon Standard.
JORGENSEN DESIGN
Highlights and financial summary
Revenue of $1,176.2 million - a 6.9% increase over the
previous corresponding period (pcp)
Earnings before interest, tax, depreciation and amortisation
of $290.8 million - a 3.4% increase over pcp
Earnings before interest and tax of $225.6 million -
a 1.0% increase over pcp
Profit before tax of $209.2 million - a 1.4% increase over pcp
Net profit attributable to members of $154.2 million -
an increase of 3.9% over pcp
Earnings per share increased by 3.9% to 24.2 cents (vs 23.3 cents pcp)
Final dividend of 9.0 cents per share, franked to 100%, in addition
to the interim dividend of 7.5 cents per share, franked to 100%.
Dividends for the full year of 16.5 cents per share (fully franked)
versus 16.5 cents per share (fully franked) in the prior year
Cash flow from operations increased by $35.2 million to $186.5 million
Gearing1 increased to 31.0% (vs 26.0% pcp) due to higher
levels of capital expenditure
Interest cover improved to 13.8 times EBIT (vs 13.1 times EBIT pcp)
($ Millions)
Revenue
2012
2011
1,176.2 1,100.4
Depreciation and amortisation
(65.2)
(57.8)
Earnings before interest and tax
Net interest2
Profit before tax
Tax expense
Net profit after tax
Non-controlling interests
225.6
(16.4)
209.2
(55.1)
154.1
0.1
223.4
(17.0)
206.4
(58.0)
148.4
-
Net profit attributable to members
154.2
148.4
Earnings per share (cents)
Ordinary dividends - fully franked (cents/share)
Net debt ($ millions)
Net debt/equity (%)
24.2
16.5
312.3
31.0%
23.3
16.5
248.4
26.0%
1 Net debt/equity
2 Interest shown gross in the Income Statement with interest income included in revenue
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
1
Net profit
after tax
$m
180
150
120
90
60
30
08 09 10 11 12
c/share
Dividends
25
20
15
10
5
%
25
20
15
10
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%
60
50
40
30
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10
$m
200
160
120
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40
08 09 10 11 12
1
1
Includes 5.0 cents
special dividend
Return on
funds employed
08 09 10 11 12
Gearing: net
debt to equity
08 09 10 11 12
Cash flow from
operations
08 09 10 11 12
Interest cover
Times
EBITDA basis
20
16
12
8
4
08 09 10 11 12
Chairman’s report
A
delaide Brighton’s strategy has delivered consistent growth
in shareholder returns with the Company ranked number
one in total shareholder return versus companies in the
S&P/ASX 200 index from 1 January 2001 to 31 December 2012.
Year in review
Board
Chris Harris retired from the Board in May 2012 following 16
years service as a Director with the Company, the last two years
as Chairman. I would like to thank Mr Harris for his long and
dedicated service and acknowledge the extensive contribution
he made to Adelaide Brighton’s proven corporate strategy,
evidenced in part by the achievement of consistent growth in
long term shareholder returns.
Directors continue to monitor and evaluate the composition
of the Board to ensure the appropriate balance and range of
experience and skills. The Board holds meetings at a range of
Company sites across Australia in order to provide Directors
with exposure to the diversity of the Group’s operations
and geographic spread.
Governance
Les Hosking
The Board is committed to conducting business ethically and
in accordance with high standards of corporate governance.
Adelaide Brighton believes its policies and practices are
consistent with good corporate governance appropriate for its
current circumstances, including the ASX Corporate Governance
Council Principles and Recommendations.
TSR ranking Adelaide
Brighton vs companies
in the S&P/ASX200
1 Jan 2001 to 31 Dec 2012
Source: miraqle metrics
% TSR
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32 36 63
Ranking
The Board has proactively engaged with key stakeholders in
order to ensure remuneration policies are transparent and
appropriate to maximise long term growth in shareholder
returns. The Nomination and Remuneration committee of the
Board engaged a consulting firm to advise on remuneration to
ensure best practice and legal requirements are met.
Sustainability and the environment
Adelaide Brighton is committed to the sustainable operation
of its business and minimising the environmental footprint
of its operations.
We report key measures of sustainability to stakeholders each
year and are subject to various Commonwealth, State and
Territory laws concerning the environmental performance of
our operations. We monitor environmental performance by
site and business division, and performance is reviewed by
senior management, the Board’s Safety, Health & Environment
Committee, and the Board.
Excellent progress has been made with regard to environmental
compliance, with the completion of the Munster kiln 6 upgrade
reducing particle emissions from the site. Compliance will be
further enhanced as the upgrade to kiln 5 is completed later
this year.
I am pleased to report that Adelaide Brighton achieved a
record net profit after tax (NPAT) of $154.1 million for the year
to 31 December 2012, an increase of 3.8% compared to 2011.
This result was achieved on record revenue of $1,176.2 million,
up 6.9% on the previous year.
The Board sees this as a good result considering weak demand
in the building and construction sector, particularly on the east
coast of Australia. Our earnings growth reflects the benefits of
geographic and product diversification. Weakness in east coast
construction has been balanced by healthier demand in the
infrastructure and resource sectors in the central and western
parts of the country, where your Company has market leading
positions.
Total fully franked dividends declared for 2012 were 16.5 cents
per share and ordinary dividends remain at historically high
levels. Your Board again elected not to pay special dividends in
2012 given the significant capital investment program currently
in train. The $175 million we have invested in growth projects in
the last two years underpins our long term competitive position
and shareholder returns.
The balance sheet is healthy and this provides capacity to
continue our well-established strategy of pursuing value
enhancing bolt-on acquisitions and investments in our core
businesses.
In 2012, Adelaide Brighton was included in the S&P ASX 100
Index, reflecting consistent strong growth in shareholder returns
relative to the Australian market over the last decade.
Strategy
>
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For more than a decade Adelaide Brighton has implemented a
focused and effective strategy that has delivered market leading
shareholder returns. This strategy has had three key areas of
focus:
Continual operational improvement - in 2012, we delivered
operating cost savings of $8.5 million. The Company also made
significant investments to improve the operational performance
of our cement and clinker facilities.
Development of the lime business - we have made significant
investments in upgrading the capacity and environmental
performance of the lime business in Western Australia to
meet demand growth from the resources sector.
Vertical integration - we continue to evaluate acquisition
opportunities in downstream operations with a particular focus
on construction aggregates. In 2012, our recent acquisitions
were fully integrated and we further enhanced the highly
strategic position of the Hartley quarry in New South Wales.
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
2
Our Munster plant at Western
Australia has supplied cement for
the Fiona Stanley Hospital, Western
Australia’s flagship health facility
and major tertiary hospital
Adelaide Brighton takes a proactive approach to community
engagement though liaison groups and consultation with local
community, government and regulatory authorities at sites
where our operations have potential to impact the adjacent
community. Development plans for the site, compliance with
operating conditions and complaints are discussed in a
co-operative effort to manage stakeholder expectations.
The introduction of a price on carbon by the Federal government
in mid 2012 reinforces our commitment to reducing the
carbon footprint through the use of alternate fuels, operational
efficiency improvements and product development.
The Company was selected by the Department of Climate
Change and Energy Efficiency to be part of its 2012 audit
program for compliance with the National Greenhouse Energy
Reporting (NGER). The Company’s NGER report was audited
by a party selected by the Department and an unqualified
audit opinion was issued.
Risk Management
Adelaide Brighton’s risk management framework is a key factor
in the Group’s profitability performance. The Audit, Risk and
Compliance committee of the Board oversees the Company’s
risk management framework encapsulating financial, operating,
regulatory and environmental risks. These risks are reviewed
and mitigation strategies modified on a regular basis to ensure
that changes in risk are reflected appropriately.
People
On behalf of your Directors, I would like to acknowledge the
hard work and commitment of all employees over the past year.
Additionally I would like to thank our Managing Director, Mark
Chellew, for his dedication and strong leadership. I thank our
customers and shareholders for their continuing loyalty
and support.
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
3
Managing Director’s report
A
delaide Brighton’s record net profit
and revenue for 2012 reflects the
benefits of our geographic and
product diversification.
Performance
Adelaide Brighton’s cement and lime exposure to resources and
infrastructure helped to deliver a record net profit result despite
residential and commercial building activity remaining weak,
reflecting the benefits of geographic and product diversification.
Revenue of $1,176.2 million was up 6.9% on 2011, supported
by demand from resources and project work in Western
Australia, South Australia and the Northern Territory. Building
demand across the eastern states of Australia remained
subdued and wet weather further impacted trading.
Earnings before interest and tax (EBIT) increased 1.0% to
$225.6 million. Volumes and prices increased in both cement
and lime but much of this benefit was eroded by higher costs.
Energy costs increased 8% from 2011, including the $3 million
after tax impact of the carbon tax.
Across our operations, energy costs are increasing much faster
than inflation while the strong Australian dollar and subdued
building demand have limited price increases to recover these
costs. Operating cost savings of $8.5 million only partially
offset rising costs.
Cement margins declined slightly as a result of cost increases
and production issues at Birkenhead in South Australia, which
are now resolved, reducing EBIT by $6 million in the second half.
The lime business enjoyed sales growth of more than 5%,
supported by demand from alumina and gold producers, and
the restart of a customer in the Northern Territory. Margins
also increased in lime, supporting the recent and on-going
significant investment in the business to improve capacity
and environmental performance.
The pre-mixed concrete, aggregates and masonry businesses
were impacted in 2012 by weak residential and commercial
building activity on the east coast of Australia as well as
cost pressures.
In addition to domestic production, Adelaide Brighton is
Australia’s largest importer of cementitious materials (cement,
clinker and blast furnace slag) utilising more than 1.6 million
tonnes of imported product in 2012 through its national
distribution network. The level of imports is expected to grow
in the medium-term due to demand growth and capacity
rationalisation.
Adelaide Brighton’s joint ventures and associates generally
reported lower earnings in 2012 as a result of demand
weakness and pricing pressure in the Queensland,
New South Wales and Victorian construction markets.
The 2012 Group result included the non-taxable gain of
$7.6 million relating to fair value accounting adjustments of
acquisitions undertaken in 2011, $3.2 million in redundancy
costs and a $1.7 million non-taxable gain on the recently
acquired stake in Aalborg Portland Malaysia Sdn. Bhd.
Strategy
Adelaide Brighton‘s strategy to grow shareholder returns
over the last decade has been to focus on growing the
lime business, operational improvement and investment in
downstream activities. During 2012, we made significant
progress on a number of strategic initiatives that are
expected to support medium-term and long term returns.
Adelaide Brighton has substantially completed a
$119 million capital expenditure program to improve
efficiency and sustainability in the cement and lime business.
These projects included upgrades to the Munster plant in
Western Australia, the Birkenhead plant in South Australia
and the Darwin cement milling operation.
The upgrade to kiln 6 at Munster was completed during
2012 and, in addition to providing an improvement in
environmental performance at the site, will expand annual
lime production capacity by approximately 100,000 tonnes.
This expansion of production capacity positions us to meet
the growth in demand for lime in Western Australia by the
mining and resource sectors.
The Company also signed major contracts with cement
customers in Victoria, South Australia and Western Australia
that underpin the utilisation and efficiency of the production
and distribution network.
Mark Chellew
Revenue by segment
Engineering
Residential
Non-residential
Mining
In addition, during the year we secured long term supply of
imported clinker from Japanese producers at competitive
prices. As demand grows to outstrip domestic production these
contracts are expected to underpin our competitive position.
Revenue by product group
Cement
Concrete and aggregates
Lime
Concrete products
Adelaide Brighton made an important investment in a
Malaysian white cement producer Aalborg Portland Malaysia
in 2012, to secure product supply and potentially facilitate
further rationalisation of our operations.
The Company has made progress on the development of
surplus land released through the rationalisation program,
such as depleted quarries. We have previously identified
$100 million in potential land sales over the next decade.
Revenue by state
Western Australia
Victoria
New South Wales
South Australia
Queensland
Northern Territory
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
4
The newly constructed cement
mill 7 at the Birkenhead plant
in South Australia
Our people
The record profit for the year reflects the commitment and skills
of our employees. I would like to thank our highly enthusiastic
work force for their effort throughout the year.
In 2012, we rolled out a new Health, Safety and Environment
management system to further support performance in this
area. A consistent focus on safety over a number of years has
resulted in lower incident rates, a positive trend that we will
work to maintain.
Outlook
Adelaide Brighton’s strong cash flow and balance sheet,
reflected in 31% net debt to equity, provides capacity to
continue the well-established strategy of investing in capacity
and efficiency in cement and lime as well as sensible
downstream integration.
Demand for cement in 2013 is expected to be marginally lower
than 2012 levels. Demand from projects in South Australia,
Western Australia and the Northern Territory is likely to partially
offset weakness in the residential and non-residential sectors.
The efficient operation of key cement assets and commissioning
of capital upgrades and enhancements, in particular at
Birkenhead in South Australia, will be a particular focus to
support margins in the current financial year.
Lime sales volumes are expected to be marginally higher in
2013 given demand from the resources sector. However, the
threat of small scale lime imports in Western Australia and the
Northern Territory remains. The completion of the new Munster
kiln 5 bag house in Western Australia remains an operational
priority in 2013.
Management will pursue efficiency in masonry, pre-mixed
concrete and aggregates, where demand growth remains
subdued. The operations are positioning for any emergent
cyclical recovery in housing and non-residential building activity.
Further improvements in concrete and aggregate prices are
expected.
The strong Australian dollar, competitive pressures and the
threat of imports in some markets may limit the scope for price
rises to recover expected cost increases.
The carbon tax is anticipated to reduce 2013 net profit after tax
by approximately $6 million before mitigation. Adelaide Brighton
expects to significantly mitigate the impact of the carbon
tax over the next five years by enhancing import flexibility,
and thereby reducing reliance on domestic manufacture,
and through the increase in the use of alternative fuels and
cementitious substitutes.
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
5
Finance report
S
ignificant investment in growth projects over the
past two years has positioned Adelaide Brighton
to continue to grow shareholder value.
Sales and profits
In 2012, revenue of $1,176.2 million increased 6.9%,
supported by increased demand from resources and project
work in South Australia, Western Australia and the Northern
Territory. Revenue increased notwithstanding general weakness
in both the residential and non-residential building sectors and
adverse weather in some regions. Higher operating costs and
a reduction in contribution from joint ventures reduced margins
at the group level, restricting EBIT growth to just 1% despite
strong sales growth. Net profit after tax (NPAT) increased by
3.8% to a record $154.1 million.
Cost increases were experienced across most inputs but in
particular, energy costs rose by 8%, including the $3 million
after tax cost of the carbon tax since its introduction in 1 July
2012. The loss of production at the Birkenhead plant in South
Australia reduced EBIT by $6 million. Other items included
in the 2012 result were an accounting gain on a prior year
acquisition of $7.6 million and the recognition of tax losses
in the recently acquired interest in Aalborg Portland Malaysia
Sdn. Bhd. (APM) of $1.7 million.
EBIT margin
In 2012, group EBIT margin declined from 20.3% to 19.2%.
Lime margins improved due to price increases to a major
customer and an increase in sales volumes of greater than 5%.
Cement margins were constrained due to increased energy
and carbon costs, reduced clinker production at the Birkenhead
plant and an increase in lower margin transport revenue as
sales to projects in remote areas increased.
Group margins were also negatively impacted by a decline
in the contribution from joint ventures due to market
weakness in Victoria and south east Queensland.
Cost saving initiatives delivered benefits of $8.5 million
during the year. Savings were achieved through the
management of energy costs, the use of cement
substitutes and labour reductions.
Shareholder returns
A final ordinary dividend for 2012 of 9.0 cents per share,
franked to 100%, was declared. This followed an interim
ordinary dividend of 7.5 cents per share declared in August
2012. The total full year dividend was 16.5 cents, fully
franked. This was in line with the dividends declared in
2011 and reflects a payout ratio of 68.2%, within the
Board’s target payout range of 65% to 75% of net profit.
In 2012, EBIT return on funds employed was 18.0%, a
decrease from 19.4% in 2011. This decline reflects the
Company’s significant capital expenditure in the last two
years, the benefits of which are only beginning to be
realised. Despite the decline, the group’s rate of return
remains ahead of its cost of capital.
Adelaide Brighton has maintained strong total shareholder
return (capital appreciation plus dividends) over the last
decade compared to its peer group. This consistent long
term performance has led to the Company moving in
2012 into the S&P ASX 100 Index for the first time.
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600
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Comparison of growth ABC share price (dividend reinvested)
to the S&P/ASX200 Accumulation Index
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ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
6
Michael Kelly
Chief Financial Officer
Total assets
$m
1800
1500
1200
900
600
300
08 09 10 11 12
c/share
Earnings
26
24
22
20
18
16
%
100
80
60
40
20
$m
160
140
120
100
80
60
40
08 09 10 11 12
Payout ratio
(including special
dividends)*
08 09 10 11 12
Revenue and net
profit after tax
$bn
1.2
1.0
.8
.6
.4
.2
08 09 10 11 12
Net profit after tax
Revenue
Birkenhead plant in South
Australia aerial footprint
Cash flow
In 2012, cash flow from operating activities increased by
$35.2 million to $186.5 million due to effective management
of working capital and a reduction in income tax payments.
Income tax payments in 2011 were higher than normal as a
result of a catch up in tax instalments for prior years.
Group inventory was higher as a result of an increase in safety
stock of critical materials and the introduction of new materials
due to an expansion of the use of blast steel furnace slag.
Overall, debtors value was in line with the prior year, though
this was an improvement on 2011 when measured in
debtors days.
Total capital expenditure increased by $10.4 million to
$149.3 million in 2012. Expenditure on development projects
and the acquisition of a minority share in APM totalled
$90.6 million. Stay in business expenditure of $58.7 million
represents 90% of depreciation and amortisation.
Borrowings
Net debt increased by $63.9 million to $312.3 million,
bringing net debt to equity gearing to 31.0%. This remains
at the lower end of the Board’s target range of 25% to
45% net debt to equity.
The Company has significant unused credit facilities.
Total credit facilities of $500 million have the
following maturity profile:
$200 million maturing 1 July 2013;
$140 million maturing 1 July 2014; and
$160 million maturing 1 July 2015.
Preliminary discussions regarding the refinancing of facilities
maturing on 1 July 2013 have commenced. The Company
expects to successfully conclude these discussions during
the first half of 2013.
Interest and taxation
Net finance costs of $16.4 million were $0.6 million lower
than 2011. Capitalised interest on the capital expenditure
program was $2.4 million. Average interest rates were lower
than the corresponding period but inclusive of capitalised
interest, interest paid increased broadly in line with
average debt levels.
Tax expense of $55.1 million decreased by $2.9 million from
2011. The non-taxable gain on acquisition of $7.6 million has
lead to a lower than expected effective tax rate of 26.3%,
a decrease from 28.1% in 2011. The tax rate is expected
to revert to a range of 27% to 28% in 2013.
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
7
Map of operations
Cement and Lime
Concrete and Aggregates
Concrete Products
Joint Ventures
Hy-Tec
Queensland
New South Wales
Victoria
Premixed concrete, aggregates, sand
Adbri Masonry
Queensland
New South Wales
Victoria
South Australia
Tasmania
Concrete products
Sunstate Cement (50%)
Brisbane
Cement, drymix
Independent Cement and Lime (50%)
Melbourne
Cement, lime, drymix, slag, fly ash
Thorton / Kembla Grange
Cement, drymix, fly ash
Mawsons (50%)
Regional Victoria / Southern NSW
Premixed concrete, aggregates
Batesford Quarry (50%)
Geelong
Limestone, sand
Burrell Mining (50%)
Queensland
New South Wales
Concrete products
Aalborg Portland Malaysia
Ipoh, Malaysia
Cement
Adelaide Brighton Cement
Birkenhead
Cement, drymix, fly ash
Angaston
Cement, lime
Blanchtown
Gypsum
Cockburn Cement
Munster
Lime, cement, drymix
Dongara
Lime
Exmouth
Limestone
Rawlinna
Limestone
Morgan Cement
Port Kembla / Vales Point
Cement, fly ash
Northern Cement
Darwin
Cement
Mataranka
Lime
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
8
Review of
Review of
Review of
operations
operations
operations
Adelaide Brighton supplies the Australian infrastructure, building
Adelaide Brighton supplies the Australian infrastructure, building
Adelaide Brighton supplies the Australian infrastructure, building
Adelaide Brighton supplies the Australian infrastructure, building
Adelaide Brighton supplies the Australian infrastructure, building
Adelaide Brighton supplies the Australian infrastructure, building
Adelaide Brighton supplies the Australian infrastructure, building
Adelaide Brighton supplies the Australian infrastructure, building
Adelaide Brighton supplies the Australian infrastructure, building
Adelaide Brighton supplies the Australian infrastructure, building
Adelaide Brighton supplies the Australian infrastructure, building
and resources industries. The Company has market leading positions in
and resources industries. The Company has market leading positions in
and resources industries. The Company has market leading positions in
and resources industries. The Company has market leading positions in
and resources industries. The Company has market leading positions in
and resources industries. The Company has market leading positions in
and resources industries. The Company has market leading positions in
and resources industries. The Company has market leading positions in
and resources industries. The Company has market leading positions in
and resources industries. The Company has market leading positions in
and resources industries. The Company has market leading positions in
cement and clinker, lime and concrete masonry and is an emerging force
cement and clinker, lime and concrete masonry and is an emerging force
cement and clinker, lime and concrete masonry and is an emerging force
cement and clinker, lime and concrete masonry and is an emerging force
cement and clinker, lime and concrete masonry and is an emerging force
cement and clinker, lime and concrete masonry and is an emerging force
cement and clinker, lime and concrete masonry and is an emerging force
cement and clinker, lime and concrete masonry and is an emerging force
cement and clinker, lime and concrete masonry and is an emerging force
cement and clinker, lime and concrete masonry and is an emerging force
cement and clinker, lime and concrete masonry and is an emerging force
in pre-mixed concrete and aggregates. Adelaide Brighton is the largest
in pre-mixed concrete and aggregates. Adelaide Brighton is the largest
in pre-mixed concrete and aggregates. Adelaide Brighton is the largest
in pre-mixed concrete and aggregates. Adelaide Brighton is the largest
in pre-mixed concrete and aggregates. Adelaide Brighton is the largest
in pre-mixed concrete and aggregates. Adelaide Brighton is the largest
in pre-mixed concrete and aggregates. Adelaide Brighton is the largest
in pre-mixed concrete and aggregates. Adelaide Brighton is the largest
in pre-mixed concrete and aggregates. Adelaide Brighton is the largest
in pre-mixed concrete and aggregates. Adelaide Brighton is the largest
in pre-mixed concrete and aggregates. Adelaide Brighton is the largest
importer of cementitious materials into Australia and through its effi cient
importer of cementitious materials into Australia and through its effi cient
importer of cementitious materials into Australia and through its effi cient
importer of cementitious materials into Australia and through its effi cient
importer of cementitious materials into Australia and through its effi cient
importer of cementitious materials into Australia and through its effi cient
importer of cementitious materials into Australia and through its effi cient
importer of cementitious materials into Australia and through its effi cient
importer of cementitious materials into Australia and through its effi cient
importer of cementitious materials into Australia and through its effi cient
importer of cementitious materials into Australia and through its effi cient
import supply chain has access to every mainland capital city market.
import supply chain has access to every mainland capital city market.
import supply chain has access to every mainland capital city market.
import supply chain has access to every mainland capital city market.
import supply chain has access to every mainland capital city market.
import supply chain has access to every mainland capital city market.
import supply chain has access to every mainland capital city market.
import supply chain has access to every mainland capital city market.
import supply chain has access to every mainland capital city market.
import supply chain has access to every mainland capital city market.
import supply chain has access to every mainland capital city market.
Signifi cant progress was made on the Company’s investment program and
Signifi cant progress was made on the Company’s investment program and
Signifi cant progress was made on the Company’s investment program and
Signifi cant progress was made on the Company’s investment program and
Signifi cant progress was made on the Company’s investment program and
Signifi cant progress was made on the Company’s investment program and
Signifi cant progress was made on the Company’s investment program and
Signifi cant progress was made on the Company’s investment program and
Signifi cant progress was made on the Company’s investment program and
Signifi cant progress was made on the Company’s investment program and
Signifi cant progress was made on the Company’s investment program and
important customer and supplier contracts that underpin the utilisation
important customer and supplier contracts that underpin the utilisation
important customer and supplier contracts that underpin the utilisation
important customer and supplier contracts that underpin the utilisation
important customer and supplier contracts that underpin the utilisation
important customer and supplier contracts that underpin the utilisation
important customer and supplier contracts that underpin the utilisation
important customer and supplier contracts that underpin the utilisation
important customer and supplier contracts that underpin the utilisation
important customer and supplier contracts that underpin the utilisation
important customer and supplier contracts that underpin the utilisation
and effi ciency of our production and distribution network were fi nalised.
and effi ciency of our production and distribution network were fi nalised.
and effi ciency of our production and distribution network were fi nalised.
and effi ciency of our production and distribution network were fi nalised.
and effi ciency of our production and distribution network were fi nalised.
and effi ciency of our production and distribution network were fi nalised.
and effi ciency of our production and distribution network were fi nalised.
and effi ciency of our production and distribution network were fi nalised.
and effi ciency of our production and distribution network were fi nalised.
and effi ciency of our production and distribution network were fi nalised.
and effi ciency of our production and distribution network were fi nalised.
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
9
Munster plant in Western
Australia kiln 6 infrastructure
Cement and Lime
S
trong demand from mining, resources and
infrastructure in Western Australia, South
Australia and Northern Territory offset weakness
in residential and commercial building.
Martin Brydon
Executive General Manager
Cement and Lime
Overall cement volumes increased marginally in 2012. Cement
and clinker sales to Victoria and Queensland declined as a
result of subdued market conditions. However, sales increased
in South Australia, Western Australia and the Northern Territory.
Average cement selling prices increased slightly more than
inflation with the strong Australian dollar and mixed demand
restricting domestic price growth. Cement margins declined
due to an 8% increase in energy costs including the impact
of the carbon tax. Adelaide Brighton employs a number of
strategies to mitigate rising energy costs including fixed price
energy contracts for a portion of energy requirements, the
use of alternative fuels and continual review for operational
improvements.
Cement margins were also impacted by a reduction in clinker
production of approximately 80,000 tonnes at the Birkenhead
plant in South Australia, which resulted in a longer than
anticipated maintenance shutdown period in August and
September. The reliability issue has been resolved but the
incident lowered pre-tax profit by approximately $6 million.
The $60 million upgrade and expansion of the Birkenhead
(South Australia) site is nearing completion. The upgrade
consists of increasing cement milling capacity by 750,000
tonnes per annum, upgrading of ship loading facilities, and
installing facilities to process slag. This expansion will reduce
the Group’s reliance on imported cement and the upgrade
to the ship loading facilities will bring environmental
benefits through improved dust collection.
Lime sales volume increased by more than 5% in 2012 due
to robust demand from the alumina and gold sectors. Margins
improved due to price increases and efficiency improvements
to alleviate the impact of rising input costs. Production and
distribution costs remain competitive against imported
product despite the high Australian dollar.
The upgrade of kiln 6 at the Munster (Western Australia)
lime facility was successfully commissioned in 2012. The
$34 million investment consists of a new cooler bag house
and replacing the electrostatic precipitator with a heat
exchanger and bag filter. This is anticipated to improve the
environmental performance of the facility through reduction
in dust and odour emissions and increase lime production
capacity by 100,000 tonnes per annum. Since commissioning,
the upgraded plant has performed ahead of expectations.
As part of the renewal of the EPA licence for the site in 2012,
the Group is required to install a bag house filter on the second
Munster lime kiln (kiln 5) by 30 June 2013. The $18 million
project is well advanced and will further reduce emissions
at the site.
As well as being a major domestic manufacturer of cement,
clinker and lime, Adelaide Brighton is also Australia’s largest
importer of cementitious materials (cement, clinker and blast
furnace slag), utilising more than 1.6 million tonnes of imported
product in 2012. This industry leading position supports the
supply chain efficiency in procurement, transport, storage and
distribution. The use of imported materials allows us to supply
customers with competitively priced product into a range
of markets where demand exceeds the Company’s
manufacturing capacity.
In support of an efficient import operation, Adelaide Brighton
entered into two clinker supply agreements with Japanese
suppliers which underpin the long term position. These
agreements secure a significant part of long term requirements
from Japanese suppliers, with terms of seven and 10 years.
The contracts represent the continuation of existing strong
relationships, as well as a move to diversify the supply base,
while at the same time reducing exposure to fluctuations
in the exchange rate.
As part of the recent acquisition of a 30% stake in Aalborg
Portland Malaysia (APM), an agreement with APM was executed
for the supply of white clinker from Malaysia to Adelaide
Brighton for a term of 10 years from 2015.
The Company executed major customer agreements during
the year which support the utilisation of key manufacturing
and distribution assets.
Adelaide Brighton reached agreement with a major cement
customer in Western Australia and South Australia for the supply
of cement through to 31 December 2014.
In December 2012, a contract was executed with Independent
Cement and Lime (ICL) for the continuation of its exclusive
supply arrangements for a period of 10 years from 1 January
2013. The supply arrangements appoint ICL as the exclusive
distributor in Victoria and New South Wales for Adelaide
Brighton.
‘000 tonnes
10000
9500
9000
8500
8000
7500
7000
6500
6000
Australian cement production
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
S
B
A
:
e
c
r
u
o
S
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
10
Adelaide Brighton
cement ground
including
Tonnes ‘000
imported clinker
3000
2500
2000
1500
1000
500
08 09 10 11 12
Adelaide Brighton
Tonnes ‘000
lime production
1200
1000
800
600
400
200
08 09 10 11 12
The newly constructed raw
materials handling system
at the Birkenhead plant in
South Australia
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
11
Concrete and Aggregates
A
ggregates demand supported by infrastructure
projects but pre-mixed concrete volumes have
been affected by weak residential and
commercial building.
Concrete volumes were negatively impacted by adverse weather
in the first half of the year and weak demand in the eastern
states as the residential, commercial and industrial construction
sectors continued to contract.
Average selling prices also improved over the prior year.
Earnings improved compared to 2011 due to the higher
volumes and prices, combined with the benefit from
operational improvement projects.
After adjusting for the inclusion of previously unreported
concrete producers by the Australian Bureau of Statistics,
Adelaide Brighton estimates that the market for concrete
in the eastern states declined by 1.4% in 2012 compared
to 2011. Earnings have been under pressure as a result
of these factors. Despite the difficult operating environment,
price rises were achieved for concrete in 2012 and further
increases will come into effect in 2013.
Aggregate volumes increased as a result of project work
associated with the Pacific Highway upgrade and the full
year benefit from acquisitions in 2011. These offset overall
market weakness and the impact of wet weather.
The Company received an extension of the operating
approvals for the Austen Quarry, located to the west of
Sydney. This site represents an important long term source
of aggregates for the Sydney market.
Integration of the businesses acquired in 2011 has been
completed. We continued our operational improvement
program, with a focus on matching our capacity to demand.
Capital programs have also been adjusted to the lower
demand environment to improve the cash flow generated
from operations.
George Agriogiannis
Executive General Manager
Concrete and Aggregates
Hy-Tec’s Glendenning plant supplied
13,565m3 of 32mps post tension
mix for the Norwest Business Park
commercial complex in Sydney
Photo courtesy of Taylor Construction
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
12
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
13
Austen Quarry at Hartley
in New South Wales
Concrete Products
C
oncrete Products revenue increased
2.9% despite soft market demand
across the eastern states.
Adelaide Brighton is Australia’s largest manufacturer of concrete
masonry products, servicing key eastern seaboard building and
construction markets. Market conditions remain difficult across
the eastern states, with depressed demand from the residential
and commercial sectors. Adverse weather also affected demand
during the first half of the year. Demand has generally been
weak and competition intense.
Despite these factors, the division increased revenue by 2.9%
due to increased selling prices and localised project work.
While profits declined from $1.8 million in 2011 to $0.4 million
in 2012, the Company is well placed for a recovery in the
market, although this is not expected in the near term.
Further rationalisation of the production footprint resulted in
the mothballing of some manufacturing capacity to align with
demand. In addition, restructuring of the workforce has led to
an improvement in efficiency and improving the flexibility of
the business to interact with changes in customer demand.
The restructuring resulted in redundancy costs during the
year and the full benefits from the lower cost base will be
realised from 2013.
Customer orientated product development and use of alternate
raw materials has provided Adelaide Brighton with a superior
range of products. The growth in higher end masonry products
continues, increasing the utilisation of our specialist equipment
at the Stapylton plant in Queensland. This part of the market is
expected to grow at a higher rate as overall demand recovers.
Steve Rogers
Executive General Manager
Concrete Products
Adbri Masonry product
display at the Ottoway
plant in South Australia
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
14
A selection of Adbri Masonry
concrete masonry products
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
15
Joint ventures
delaide Brighton’s joint ventures
form an integral part of the
unmatched distribution network.
A
Sunstate Cement (50%)
Batesford Quarry (50%)
Sunstate Cement Limited is a joint venture between Adelaide
Brighton and Boral Cement with a cement milling, storage
and distribution facility at Fisherman Islands, Port Brisbane.
Sunstate Cement is supplied with seaborne supply of clinker
from the Adelaide Brighton Birkenhead and Angaston plants
and imports from Asia. Sunstate Cement is a leading
supplier to Queensland’s construction industry.
Continued weakness in the south east Queensland market
and a reduction in purchases by its largest customer resulted
in a decline in earnings in the year.
Independent Cement and Lime Pty Ltd (ICL) (50%)
Independent Cement and Lime Pty Ltd (ICL), a joint venture
between Adelaide Brighton and Barro Group Pty Ltd, is a
specialist supplier of cement, cement blended products, and
agricultural lime to a wide variety of industries, major retail
outlets, and agricultural markets throughout Victoria and
New South Wales.
Earnings from ICL declined as the completion of a number
of major projects and a softening in the residential market
resulted in lower volumes. Competitive pressures restricted
inflationary cost recovery price increases.
Mawson Group (50%)
Mawson Group (Mawsons) is a joint venture between Adelaide
Brighton and BA Mawson Pty Ltd. Mawsons is the largest
premixed concrete and quarry operator in northern regional
Victoria. Mawsons also operate in southern regional New South
Wales and holds leading market positions in markets served.
Volume declined as demand returned to normal levels
following the finalisation of flood reconstruction work.
This reduced earnings from the joint venture.
Batesford Quarry is an unincorporated joint venture between
Adelaide Brighton, E&P Partners and Geelong Lime Pty Ltd.
Batesford Quarry, situated at Fyansford Quarry near Geelong in
Victoria, undertakes quarrying and manufacturing, marketing
and distribution of various limestone and quarry products.
Batesford Quarry earnings improved as volumes increased
following the weather impacted result in the prior year.
Burrell Mining Services (50%)
Burrell Mining Services is an unincorporated joint venture
between Adelaide Brighton and Burrell Mining Products.
With operations in New South Wales and Queensland, Burrell
Mining Services manufactures a range of concrete products
exclusively for the coal mining industry.
Earnings from Burrell Mining were broadly in line with the
prior year, as demand from the coal industry remained
robust despite adverse weather.
Aalborg Portland Malaysia Sdn. Bhd. (APM) (30%)
Aalborg Portland Malaysia Sdn. Bhd. is an integrated white
clinker and white cement producer situated in Ipoh, on the
west coast of the Malaysian Peninsula. It comprises a
180,000 tonne capacity per annum kiln, a circa 200,000
tonne capacity per annum grinding mill and a packaging
plant. Adelaide Brighton has a 30% stake in APM, with the
remaining 70% held by Aalborg Portland A/S, a wholly
owned subsidiary of Cementir Holding SpA of Italy.
Earnings from APM were positively impacted by the
recognition of tax losses following the approval of the
expansion of clinker capacity from 180,000 tonnes
to 330,000 tonnes per annum.
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
16
Sustainability
Adelaide Brighton recognises that the implementation of its strategy and
the long term success of its business requires a commitment to managing
the impact of its activities on the social, environmental and economic
environments within which it operates. Opportunities for improvement are
continually being sought through the detailed analysis of business unit
activities and active consideration of the needs of stakeholders.
Scope of this report
Scope of this report
Scope of this report
Key performance indicator
Key performance indicator
Key performance indicator
Discussion in Annual Report
Discussion in Annual Report
This Sustainability Report should be read in conjunction
This Sustainability Report should be read in conjunction
This Sustainability Report should be read in conjunction
with other sections of this Annual Report and its
with other sections of this Annual Report and its
with other sections of this Annual Report and its
fi nancial statements. The Directors’ Report, Corporate
fi nancial statements. The Directors’ Report, Corporate
fi nancial statements. The Directors’ Report, Corporate
Governance Statement and reports on Remuneration
Governance Statement and reports on Remuneration
Governance Statement and reports on Remuneration
and People, Health and Safety all contain information
and People, Health and Safety all contain information
and People, Health and Safety all contain information
relevant to the sustainability performance of the Group.
relevant to the sustainability performance of the Group.
relevant to the sustainability performance of the Group.
The Adelaide Brighton Group includes Adelaide Brighton
The Adelaide Brighton Group includes Adelaide Brighton
The Adelaide Brighton Group includes Adelaide Brighton
Limited and the entities it controls (the Group), as well
Limited and the entities it controls (the Group), as well
Limited and the entities it controls (the Group), as well
as a number of joint ventures. This report excludes
as a number of joint ventures. This report excludes
as a number of joint ventures. This report excludes
information about the joint ventures as the Group does
information about the joint ventures as the Group does
information about the joint ventures as the Group does
not control their operations.
not control their operations.
not control their operations.
While the Group’s fi nancial year ends on 31 December,
While the Group’s fi nancial year ends on 31 December,
While the Group’s fi nancial year ends on 31 December,
some statutory sustainability reporting requires
some statutory sustainability reporting requires
some statutory sustainability reporting requires
information to be provided for the year to 30 June.
information to be provided for the year to 30 June.
information to be provided for the year to 30 June.
So that statistical and graphical sustainability data
So that statistical and graphical sustainability data
So that statistical and graphical sustainability data
provided here can be compared with other publicly
provided here can be compared with other publicly
provided here can be compared with other publicly
available information, some of this is shown for
available information, some of this is shown for
available information, some of this is shown for
the year ended 30 June 2012.
the year ended 30 June 2012.
the year ended 30 June 2012.
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In developing this report, the following
In developing this report, the following
In developing this report, the following
resources have been considered:
resources have been considered:
resources have been considered:
The Global Reporting Initiative
The Global Reporting Initiative
The Global Reporting Initiative
G3.1 Sustainability Reporting Guidelines
G3.1 Sustainability Reporting Guidelines.
G3.1 Sustainability Reporting Guidelines
ESG Reporting Guide for Australian Companies
ESG Reporting Guide for Australian Companies
ESG Reporting Guide for Australian Companies
prepared by the Australian Council of Superannuation
prepared by the Australian Council of Superannuation
prepared by the Australian Council of Superannuation
Investors and the Financial Services Council
Investors and the Financial Services Council.
Investors and the Financial Services Council
Cement Sustainability Initiative
Cement Sustainability Initiative of the World
The Cement Sustainability Initiative of the World
The Cement Sustainability Initiative of the World
The Cement Sustainability Initiative of the World
Business Council for Sustainable Development
Business Council for Sustainable Development
Business Council for Sustainable Development
Relevant industry practice.
Relevant industry practice.
Relevant industry practice.
Energy and greenhouse gas emissions information
Energy and greenhouse gas emissions information
Energy and greenhouse gas emissions information
complies with the defi nitions and boundaries contained
complies with the defi nitions and boundaries contained
complies with the defi nitions and boundaries contained
in the National Greenhouse and Energy Reporting Act.
in the National Greenhouse and Energy Reporting Act.
in the National Greenhouse and Energy Reporting Act.
The Board oversees and approves the Company’s
The Board oversees and approves the Company’s
The Board oversees and approves the Company’s
sustainability framework key performance indicators
sustainability framework key performance indicators
sustainability framework key performance indicators
and the scope of this report. The key performance
and the scope of this report. The key performance
and the scope of this report. The key performance
indicators listed adjacent have been assessed to be the
indicators listed adjacent have been assessed to be the
indicators listed adjacent have been assessed to be the
Group’s material sustainability performance indicators.
Group’s material sustainability performance indicators.
Group’s material sustainability performance indicators.
Alternative fuels and energy consumption
Alternative fuels and energy consumption
Alternative fuels and energy consumption
Alternative fuels and energy consumption
Alternative fuels and energy consumption
Alternative raw materials
Alternative raw materials
Alternative raw materials
Alternative raw materials
Alternative raw materials
Carbon emissions
Carbon emissions
Carbon emissions
Carbon emissions
Carbon emissions
Energy by source
Energy by source
Energy by source
Energy by source
Energy by source
Page 18-19
Page 18-19
Page 18-19
Page 18-19
Page 18-19
Page 18-19
Page 18-19
Page 18-19
Page 18-19
Page 18-19
Page 18-19
Page 18-19
Page 18
Page 18
Page 18
Page 18
Participation of women in the Company
Participation of women in the Company
Participation of women in the Company
Participation of women in the Company
Participation of women in the Company
Page 31 - Diversity Report
Page 31 - Diversity Report
Page 31 - Diversity Report
Page 31 - Diversity Report
Restricted duties injury frequency rate
Restricted duties injury frequency rate
Restricted duties injury frequency rate
Restricted duties injury frequency rate
Restricted duties injury frequency rate
Lost time injury frequency rate
Lost time injury frequency rate
Lost time injury frequency rate
Lost time injury frequency rate
Lost time injury frequency rate
Employment by state
Employment by state
Employment by state
Employment by state
Employment by state
Employment by employment status
Employment by employment status
Employment by employment status
Employment by employment status
Employment by employment status
Employees by contract status
Employees by contract status
Employees by contract status
Employees by contract status
Employees by contract status
Employee turnover by age group
Employee turnover by age group
Employee turnover by age group
Employee turnover by age group
Employee turnover by age group
Employee turnover by gender
Employee turnover by gender
Employee turnover by gender
Employee turnover by gender
Employee turnover by gender
Employee turnover by state
Employee turnover by state
Employee turnover by state
Employee turnover by state
Employee turnover by state
% employees on EBAs vs staff
% employees on EBAs vs staff
% employees on EBAs vs staff
% employees on EBAs vs staff
% employees on EBAs vs staff
Page 20
Page 20
Page 20
Page 20
Page 20
Page 20
Page 20
Page 20
Page 21
Page 21
Page 21
Page 21
Page 21
Page 21
Page 21
Page 21
Page 21
Page 21
Page 21
Page 21
Page 20
Page 20
Page 20
Page 20
Page 20
Page 20
Page 20
Page 20
Page 21
Page 21
Page 21
Page 21
Page 21
Page 21
Page 21
Page 21
Other reports
Other reports
Other reports
Discussion in Annual Report
Discussion in Annual Report
Coverage of organisation defi ned benefi t plan obligations
Coverage of organisation defi ned benefi t plan obligations
Coverage of organisation defi ned benefi t plan obligations
Coverage of organisation defi ned benefi t plan obligations
Coverage of organisation defi ned benefi t plan obligations
Page 79-81 - Note 23
Page 79-81 - Note 23
Page 79-81 - Note 23
Page 79-81 - Note 23
Direct economic value added (sales, costs, employee
Direct economic value added (sales, costs, employee
Direct economic value added (sales, costs, employee
Direct economic value added (sales, costs, employee
compensation, retained earnings)
compensation, retained earnings)
compensation, retained earnings)
compensation, retained earnings)
Page 53 - Income Statement
Page 53 - Income Statement
Page 53 - Income Statement
Page 53 - Income Statement
Page 68 - Note 3 and 4
Page 68 - Note 3 and 4
Monetary value of fi nes and total number of non-monetary
Monetary value of fi nes and total number of non-monetary
Monetary value of fi nes and total number of non-monetary
Monetary value of fi nes and total number of non-monetary
sanctions for non-compllicance with laws and regulations
sanctions for non-compllicance with laws and regulations
sanctions for non-compllicance with laws and regulations
sanctions for non-compllicance with laws and regulations
Page 4
Page 4
Page 40 - Directors’ Report
Page 40 - Directors’ Report
Environment Performance
Environment Performance
For further information about the sustainability report email
For further information about the sustainability report email
For further information about the sustainability report email
adelaidebrighton@adbri.com.au or telephone (08) 8223 8005.
adelaidebrighton@adbri.com.au or telephone (08) 8223 8005.
adelaidebrighton@adbri.com.au or telephone (08) 8223 8005.
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
17
The Group has facilities in all states and territories of Australia
and many operate in or near local communities or sensitive areas
of the natural environment. Ensuring these operations minimise
any negative impact on the environment is a key priority. Our
manufacturing sites always aim to meet or exceed mandatory
compliance standards, as well as internal performance targets.
The operating environment for the Group continues to become
more demanding with regard to sustainable performance.
Carbon emissions
Of all the products manufactured by Adelaide Brighton, clinker,
cement and lime are the most emissions-intensive (refer to chart
Source of greenhouse gas emissions in a cement plant).
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Carbon emissions are generated in the manufacture
of these products in three main ways:
Process emissions - about half are generated via the chemical
reaction that occurs when raw materials are converted into
products eg the conversion of limestone to calcium oxide;
Fuel - about 35% results from the use of fuel that is required
to generate heat to initiate this chemical reaction; and
Other energy usage - about 15% relates to indirect emissions,
mainly electricity which is used to grind raw materials and
intermediate products.
Adelaide Brighton acknowledges the need to address the issue
of carbon emissions. However, the implementation of a carbon
tax in Australia - without similar action being taken by our major
trading partners - reduces the ability of the local industry to
compete in the global market.
Rising energy costs and the carbon tax have had a direct impact
on the financial performance of the Group, as our cement and
lime manufacturing facilities are subject to the Clean Energy
legislation.
Adelaide Brighton has implemented, and continues to develop, a
number of strategies to reduce its overall emissions, particularly
across the Cement and Lime Division. Core strategies involve
the use of alternative fuels and raw materials.
Alternative fuels
Historically, the primary energy source for the cement and lime
industry has been fossil fuels, typically natural gas and coal.
The combustion of these energy sources depletes a finite
resource and produces greenhouse gases that contribute
to global warming.
Cement and Lime’s alternative fuels program seeks to source
and use suitable by-products from other industries as energy
sources for kilns. Suitable fuels are carefully selected for quality,
quantity, cost and consistency of supply. It is vital that they can
be incorporated into the production process without affecting
the plant’s performance, maintain the quality of the end product
and comply with operating licence conditions.
As part of utilising a new alternative fuel, a testing program is
implemented at each site to prove environmental emissions
calculations. Assessment reports from each trial are reviewed
by state authorities and the results are discussed with the local
community before any new fuel is approved for regular use.
The refinement of fuels and processes is ongoing, to maximise
energy efficiency.
The majority of our cement and lime kilns use alternative fuels
as a partial replacement for fossil fuels. The alternatives include
carbon powder, combustible materials from construction and
demolition waste, and waste oil. Use of these materials not only
reduces the Company’s dependency on fossil fuels, but it also
saves waste by-products ending up in landfill. As can be seen in
the graph on page 19, Adelaide Brighton has increased its overall
usage of alternative fuels from 6.7% in 2009 to 8.3% in 2012.
Total Scope 1# and Scope 2# greenhouse gas emissions declined
0.4% in the year to 30 June 2012, despite an increase in
production of clinker and lime. This reflects the higher proportion
of alternative fuels and an improvement in the methodology of
greenhouse gas emission calculation.
Alternative raw materials
Adelaide Brighton has a broad strategy to reduce the impact of
its operations on the environment by replacing non-renewable
natural materials with renewable sources, or by-products from
other industries. These by-products include:
Fly ash - a waste product from coal-fired power stations used
either as a partial replacement for cement or, in the case of
bottom-ash, used as a sand replacement in masonry products.
Granulated blast furnace slag - a by-product from the
manufacture of steel. The slag is either ground into a fine
powder and used as a substitute for cement, or used as a
replacement for aggregate in pre-mixed concrete.
Manufactured sand - a by-product from the manufacture of
aggregates. It can be used as a replacement for natural sand
in pre-mixed concrete and masonry products.
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As most of the alternative raw materials used require little in
the way of processing before being used as a construction
material, their use produces fewer greenhouse gas emissions
than traditional raw materials. Use of these by-products also
avoids them being disposed of in landfill.
Interaction with local communities
Three of Adelaide Brighton’s cement and lime plants are close to
residential developments - the Birkenhead and Angaston plants in
South Australia and the Munster plant in Western Australian. Each
site has at least one clinker or lime kiln and cement grinding mill.
The plants operate in accordance with licence conditions
designed to limit any potential negative impacts on the
surrounding environment.
State legislation, the timing of approvals and site-specific issues
mean the operating conditions differ from site to site. However,
each undertakes a range of activities designed to inform and
support its local community.
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
18
Energy by
source*
Natural gas
Coal
Electricity
Demolition material
Liquid fuels
Waste oil
Industrial waste
*For year ended
30 June 2012
Source of greenhouse
gas emission in a
cement plant
50% of greenhouse gas
emission occur as the raw
meal is heated and carbon
dioxide is driven off in
order to form the necessary
chemical conversion of
limestone to calcium oxide:
CaCO3 > CaO + CO2
As long as cement making
relies on the calcination of
limestone, these emissions
will be impossible to avoid.
35% of greenhouse gas
emission occur as a result
of burning fuels (coal,
gas and diesel) to create
thermal energy.
15% is produced as a
result of the indirect
emissions resulting from
the use of electricity.
Cement grinding is the
largest single electricity
user in the cement plant.
Raw meal grinding and
moving material around a
plant are other significant
sources of electricity use.
Source: Cement Industry Federation
#Under the National Greenhouse
and Energy Reporting (NGER)
scheme, Scope 1 emissions are
the release of greenhouse gases
into the atmosphere as a direct
result of an activity, or series
of activities (including ancillary
activities) that constitute the
facility. Scope 2 emissions are
the release of greenhouse gases
into the atmosphere as a direct
result of one or more activities
that generate electricity, heating,
cooling or steam that is
consumed by the facility but do
not form part of the facility.
Waste to landfill
Adelaide Brighton aims to eliminate production waste sent
to landfill. The main wastes generated are kiln dust from the
production of clinker and lime, and waste concrete that remains
following delivery to customers. Where possible, this waste is
incorporated back into the production process. However, it is
not possible to re-use all waste this way without affecting
product quality.
Despite a program to reduce kiln dust and concrete waste sent
to landfill, acquisitions in the Concrete and Aggregates division,
has resulted in a 17.4% increase in process waste to landfill
since 2009.
Community support
Adelaide Brighton is committed to engaging with the community
and supports a broad range of organisations with donations,
public tours, community information and work experience
programs.
The core purpose of Adelaide Brighton’s community support
program is to make a valued and sustainable contribution to
the communities in which we operate by investing in carefully
considered donation and sponsorship of primarily community
and children services in the local communities in which we
operate; support of specialised higher education programs;
and environmental education through local schools
participation in our Munster and Birkenhead wetlands.
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Major community support provided by Adelaide Brighton includes:
Variety the Children’s Charity - benefiting sick, disabled and
disadvantaged children.
Undergraduate Scholarship in the School of Engineering at the
University of Wollongong. The scholarship has been targeted
towards a female as part of our long term strategy to encourage
a higher proportion of women into engineering in industry.
The scholarship recipient also has the opportunity for work
placement experience in various Divisions of Adelaide Brighton.
Post Graduate scholarship in the School of Chemical
Engineering with the University of Adelaide.
Indigenous Scholarship for secondary schooling.
Sydney Children’s Hospital Foundation - children’s therapist
in the Outpatients and Emergency Departments.
Workplace giving program
In 2012, Adelaide Brighton has launched a Workplace Giving
Program providing employees with a simple and effective
way to regularly donate money to charity.
Adelaide Brighton has chosen Variety the Children’s Charity
as the inaugural charity to benefit from our Workplace
Giving Program.
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These include:
Community consultation - inviting representatives from the
community to participate in an advisory group, and/or holding
open meetings to provide updates and discuss community
concerns. Advisory groups typically include:
- Local residents;
- Local council representatives (administrators
and elected members);
- Representatives from state environmental protection bodies;
- Members of state parliament; and
- Academics.
Community websites - each facility has its own website
providing a wide range of information about its operations
and licence conditions, updates on environmental issues,
major events and community engagement initiatives.
Improvement initiatives
Adelaide Brighton is committed to improving the environmental
performance of all sites, thereby reducing the potential impact on
the local communities in which it operates. Projects designed to
specifically improve environmental performance include:
Munster plant
Approximately $40 million spent between 2011 and mid-2013
on the installation of bag-house filters on Kilns 5 and 6 to reduce
particulate emissions. The kiln 6 project was completed in 2012
and the kiln 5 project is scheduled for completion by mid-2013.
Testing of kiln 6 stack emissions since the commissioning of the
filter has resulted in significant reduction in particulate emissions.
Birkenhead plant
An upgrade of ship loading facilities at the Birkenhead wharf to
create a fully enclosed system incorporating the best available
dust collection technology with improved environmental
performance.
An upgrade of the raw materials handling system for cement
milling, including the relocation of certain raw material open
stockpiles to an undercover storage facility, thus reducing
fugitive dust.
Installation of a slag dryer and product silo to enable the
introduction of granulated blast furnace slag-blended cement
to the market in South Australia. Substituting slag for clinker,
which is the most energy and greenhouse intensive component in
cement, reduces the per tonne greenhouse footprint of cement.
Water usage
Adelaide Brighton uses water as part of its production process
in all divisions. It comes from a mix of sources, including mains,
stormwater run-off collected on-site, and from aquifers through
bores. Innovation in site design has improved the amount of
water collected and retained and this reduces the use of mains
water and helps limit the amount of contaminated water
exiting the site.
As can be seen in the graph Mains water usage, Adelaide
Brighton has reduced mains water usage by 11.9% since
2009. Although acquisitions in 2011 led to an increase in water
consumption for the Concrete and Aggregates Division, process
improvements have reduced mains water demand in both the
Cement and Lime and Concrete Products divisions.
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
19
‘000 tonnes
Carbon
emissions*
4000
3000
2000
1000
09 10 11 12
Alternative
fuels - energy
consumption*
Terajoules
1200
1000
800
600
400
200
%
10
8
6
4
2
09 10 11 12
Demolition material
Industrial waste
Waste oil
% Alternative fuels
of total energy
%
substitution
Alternative
raw materials*
‘000t GHG
saving
20
16
12
8
4
500
400
300
200
100
09 10 11 12
%SCM substitution
GHG saving
Mains water
Megalitres
usage
600
500
400
300
200
100
09 10 11 12
Cement and Lime
Concrete and Aggregates
Concrete Products
Process waste
‘000 tonnes
to landfill
150
120
90
60
30
09 10 11 12
Cement and Lime
Concrete and Aggregates
Concrete Products
*For year ended 30 June
People, health and safety
delaide Brighton believes a safe,
tolerant and diverse work environment
helps employees reach their potential.
A
Adelaide Brighton employs a diverse workforce of approximately
1,600 people (including joint ventures) in all states and
territories of Australia. We are committed to the health and
safety of our people and those who come onto our sites.
Our structured approach to people management is administered
divisionally within a structure of group policies and practices.
Everyone at Adelaide Brighton shares responsibility for
practising high standards of ethical conduct and corporate
governance. Our Code of Conduct articulates our commitment
to successfully conduct our business in accordance with
all applicable laws. Adherence to the code ensures that our
business has a framework for decision-making and business
behaviour which builds and sustains our corporate integrity,
reputation and success.
Diversity
Adelaide Brighton considers workplace diversity an important
factor in providing a balanced and inclusive working
environment. We are committed to the promotion of diversity
within our organisation, and recognise that removing barriers
to diversity enables us to attract and retain the best people
with the appropriate skills to contribute to the continuing
success of our business.
Our Diversity Policy, on pages 30 to 31 of this report,
outlines five core objectives which form the foundations of
our approach to diversity and upon which we measure our
performance in this area.
Leading with Strengths training
In 2012, we launched Leading with Strengths, a development
program targeted at our female management and frontline
employees.
The aim of the program is to develop individual leadership
potential, focus on personal achievement to help women
better manage business opportunities by recognising areas
of individual strength and applying them to practical
workplace solutions.
Investing in skills for the future
One of the elements of Adelaide Brighton’s success is
building future technical experts and leaders. Our two year
Graduate program is aimed at attracting the next generation
of engineering and commercial professionals to our business.
During the two and a half year program, Graduates undertake
project placements through the different divisions of the
business. The projects undertaken are targeted towards
Adelaide Brighton’s goals and will provide the opportunity
for Graduates to develop skills and knowledge with the aim
for them to be sufficiently trained to be able to move into a
permanent position at the end of the Graduate Program.
To entice potential Engineers to join the cement industry,
Adelaide Brighton provides a University vacation program
available to engineering students. During a two month period
participants are assigned a dedicated business related project
with supervision and are required to present a report at the
conclusion of their assignment.
Safety and health
The safety of our employees and contractors continues to be
an integral part of our business. Ongoing safety and health
awareness and improvement in safety culture and systems
is an important part of our business.
We seek continual improvement in our performance and
aspire towards a goal of safe production. This goal is an
important driver for ongoing improvement in health and safety
performance across the Group. In 2012, we recorded a lost
time injury frequency rate of 2.6, a significant reduction
compared to 5.3 in the 2011.
The improvements to our comprehensive Health, Safety and
Environment Management System continued in 2012. This
system is risk based, relevant to our operations and adaptable
as well as providing clarity and consistency of health and safety
requirement throughout the Group. In 2012, the implementation
of this system was further advanced throughout the Company.
% Turnover
Employee turnover by age group
100
90
80
70
60
50
40
30
20
10
0
2
<
5
2
-
1
2
0
3
-
6
2
5
3
-
1
3
0
4
-
6
3
5
4
-
1
4
0
5
-
6
4
5
5
-
1
5
0
6
-
6
5
5
6
-
1
6
0
7
-
6
6
0
7
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ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
20
Sam Toppenberg
Executive General Manager
Human Resources
Restricted
duties injury
Frequency
frequency rate
50
40
30
20
10
08 09 10 11 12
Cement and Lime
Concrete and Aggregates
Concrete Products
Total ABL
Lost time injury
Frequency
frequency rate
12
10
8
6
4
2
08 09 10 11 12
Cement and Lime
Concrete and Aggregates
Concrete Products
Total ABL
% of
Employee turnover
employees
by gender
100
90
80
70
60
50
40
30
20
10
Continuers
Turnover
l
e
a
M
l
e
a
m
e
F
The Health, Safety and Environment
management team at the Munster
plant in Western Australia
Safety leadership workshops
To support our safety systems and to develop employee culture
where understanding of why safety is important and ownership
is everybody’s responsibility, one of the tools we are using is our
safety leadership workshops. The workshops focus on helping
our leaders, at all levels, understand how their behaviour
influences and creates our safety culture.
This program continues to produce measurable results, at an
individual level, where our people are taking more responsibility
for safety at their sites. And system level, where hazard and
incident reports have increased following the workshops.
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
21
Employees by
contract status
Permanent
Fixed term
Employees by
employment status
Full time
Casual
Part time
% employees on
EBAs vs staff
EBA
Staff
Employees
by state
South Australia
Western Australia
New South Wales
Queensland
Victoria
Northern Territory
Tasmania
ACT
Employee turnover
by state
Queensland
New South Wales
South Australia
Western Australia
Victoria
Tasmania
Northern Territory
Marcus Clayton
General Counsel and
Company Secretary
Corporate Governance
T
he Board is committed to conducting
the Company’s business ethically and
in accordance with high standards
of corporate governance.
To this end, the Board (together with the Company’s
management) regularly reviews the Company’s policies,
practices and other arrangements governing and guiding
the conduct of the Company and those acting on its behalf.
This statement provides an outline of the main corporate
governance practices that the Company had in place
during the past financial year.
The Board believes that the Company’s policies and
practices are consistent in all substantial respects
with good corporate governance practice in Australia
appropriate for the circumstances of the Company,
including the ASX Corporate Governance Council
Principles and Recommendations.
The Board has also reserved for itself
the following specific responsibilities:
1
The Board lays solid foundations for
management and oversight
1.1
Role of the Board
The role of the Board of Directors is to protect and optimise
the performance of the Group and, accordingly, the Board takes
accountability for reviewing and approving strategic direction,
establishing policy, overseeing the financial position and
monitoring the business and affairs of the Group on behalf of
shareholders. Details of the skills, experience and expertise of
each Director and their period of office are set out on page
32 and 33 of this report.
The Board operates in accordance with the general principles
set out in its charter, which is available from the corporate
governance section of the Company’s website at
www.adbri.com.au
In accordance with the provisions of the Company’s
constitution, the Board has delegated a number of powers to
Board committees (see section 2 following) and responsibility
for the day-to-day management of the Company to the
Managing Director and senior management. The respective
roles and responsibilities of the Board and management
are outlined further in the Board charter.
Strategy and
monitoring
Monitoring the business and affairs /
relations with management
Risk management, compliance
and internal controls
Input into and approval of
management’s development of
corporate strategy, including
setting performance objectives and
approving operating budgets
Monitoring and reviewing corporate
performance and implementation
of strategy and policy
Selecting, appointing and evaluating
from time to time the performance of,
determining the remuneration of, and
planning for the successor of, the
Group Managing Director
Reviewing procedures for appointment
of senior management, monitoring
performance and reviewing executive
development activities. This includes
ratifying the appointment and the
removal of the Chief Financial Officer
and the Company Secretary
Approving major capital expenditure,
acquisitions and divestitures, cessation
of any significant business activity and
monitoring capital management
Reviewing and guiding systems of risk
management and internal control and
ethical and legal compliance
Monitoring and reviewing processes
aimed at ensuring integrity of financial
and other reporting, and providing
assurance to approve the Group’s
financial reports
Monitoring and reviewing policies
and processes in place relating
to occupational health and safety,
compliance with laws, and the
maintenance of high ethical standards
Input into and approval of the
Company’s policy in relation to,
and monitoring implementation of,
sustainable resource use and the
impact of the Company’s operations
on the environment, community and
stakeholders
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
22
1.2 The Board is structured to add value
The Board ensures that its
members have the time and
commitment to devote to the role
Prior to appointment, Directors provide
details of other commitments and
acknowledge that they will have adequate
time to meet expectations
Directors to consult with the Chairman
before accepting outside appointments
Letter of appointment sets out Director’s
term of appointment, powers,
expectations and rights
and obligations
The Board is committed to a
majority of independent views
being brought to bear in
decision-making (see 1.2.1)
Directors expected to bring independent
views and judgment to discussions
Four of the six Board members are
independent
Board has adopted Financial Services
Council Blue Book definition of director
independence
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Board keeps informed of regulatory
and industry developments
to challenge status quo and
strengthen knowledge base
(see 1.2.4)
Directors expected to participate in
ongoing education / development
For 2012, the Board’s program reflected
the significant business and industry
developments the Company was facing
Directors keep themselves informed and
up to date, of their own initiative, with
general developments relevant to the
role of a non-executive Director in an
S&P/ASX100 company
The Board is structured to add
value and Board decision-making
is enhanced through education
and support
Broad mix of skills, diversity and
experience reflecting the character of
the Group’s business to best guide,
review and challenge management
Independent Chairman leads the Board,
facilitates constructive decision-making,
and manages Board/management
relationship
To maintain independent oversight,
roles of Chairman and Managing
Director are undertaken by different
individuals
Comprehensive induction
processes equip directors to
perform in their role
Comprehensive induction process upon
appointment
Obligation on new Directors to familiarise
themselves with Company’s practices
through induction process or by making
enquiries of the Chairman, the Company
Secretary or management
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Board and Director performance
is regularly evaluated to facilitate
continuous improvement (see 1.2.3)
Board, Committee and individual
Director performance reviewed annually
Directors to undergo a performance
appraisal before standing for re-election
One third of the non-executive Directors
retire (and are eligible for re-election)
at each AGM
Board members have access to
management and independent
advice to assist in discharge
of their duties
Access to senior executives and to any
further information required to make
informed decisions
Right to seek independent professional
advice at the Company’s expense to
assist in effective discharge of duties
Conflicts are managed (see 1.2.2)
Actual and perceived conflicts
considered and managed on an
ongoing basis
Protocols around disclosure, and
procedures around management of
potential conflicts have been adopted
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ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
23
1.2.1
Directors’ independence
In general, Directors are considered independent where they
are free of any interest and any business or other relationship
which could, or could reasonably be perceived, to interfere
materially with the Director’s ability to act in the best interests
of the Company. An assessment will be made on a case-by-
case basis of whether the Director’s ability to act in the best
interests of the Company has been materially impaired.
In ensuring that the Board comprises Directors with a broad
range of skills and experience reflecting the character of the
Group’s business, the Board may from time to time appoint
Directors who are not considered to be independent. It is,
however, the Board’s policy that it should comprise a majority
of independent Directors to ensure that independent
oversight is maintained.
In the context of his executive position with the Company,
Mr M Chellew is not considered to be independent. Having
regard to the guidelines of independence adopted by the
Board, the Directors are of the view that Mr R D Barro is
the only non-executive Director who is not considered
“independent” by virtue of his position as the Managing
Director and a shareholder of Barro Group Pty Ltd, which
has a 50% interest in the joint venture, Independent Cement
& Lime Pty Ltd (ICL), and is a significant shareholder in the
Company. ICL has an ongoing trading relationship with
the Barro Group of companies.
1.2.2
Conflicts of interest
Directors are expected to avoid any action, position or
interest which conflicts (or may be perceived to conflict)
with their position as a Director of the Company. In particular,
the Board is cognisant of Mr Barro’s interest in Barro Group
Pty Ltd, a significant shareholder in the Company and
50% joint venture partner in ICL.
During the year, in order to avoid actual and/or perceived
conflicts of interest in Board decision-making, Board
procedures were followed such that where the possibility of
a material conflict arose, the Board considered the nature
and extent of the potential conflict and whether it would be
appropriate for the relevant Director to participate in Board
discussion and decision-making in relation to the issue.
Where there was a real potential for a conflict of interest,
information was not provided to the Director, and, in
accordance with the Corporations Act 2001, the Director
did not participate in, or vote at, the meeting where
the matter was considered.
In accordance with these Board procedures, Mr R D Barro
did not take part in the Board’s decision in relation to
Adelaide Brighton executing contracts with ICL for the
continuation of exclusive supply arrangements to ICL.
The supply arrangement, which appoints ICL as the
exclusive distributor for Adelaide Brighton Limited
(and any related body corporate) in Victoria and New
South Wales, was renewed for a period of 10 years
from 1 January 2013 on substantially similar commercial
terms to the terms that have been in operation.
Overall, the Board takes care to consider whether or
not it is appropriate for Mr R D Barro to be involved in
Board discussions or decisions that relate to the
interests of the Barro Group.
1.2.3
Performance evaluation
For the 2012 financial year, a performance evaluation
was led by the Chairman to assess the performance
of individual Directors, the Board as a whole, various
aspects of the Board committees such as their
performance, membership, roles and charters, and the
Board’s and Directors’ interaction with management.
As part of this comprehensive review of the Board’s
performance, processes and operations, the Chairman
facilitates individual discussions with each Director
which also reviews their individual performance.
The discussions also included a peer review of the
Board Chairman’s performance by the other Directors.
The Chairman reports to the Board concerning the
performance evaluation process and the findings of
these reviews. As a result of recommendations arising
from the internal Board review, initiatives are introduced
to ensure the continued effectiveness of the Board’s
performance and to enable its sustained focus on key
issues for the Company. The implementation of these
initiatives is overseen by the Chairman.
Executives and managers are also subject to an annual
performance review in which performance is measured
against agreed business objectives. The performance of
the Managing Director is assessed by the Board against
objectives related to the Company’s strategy, business
plans and the financial performance of the business.
For the 2012 financial year, the performance of the
Managing Director and the Managing Director’s
achievement of the agreed objectives was reviewed
by the Chairman, the Nomination and Remuneration
Committee and the Board. The performance of the
Company’s senior executives during 2012 was reviewed
by the Managing Director, and by the Nomination and
Remuneration Committee, led by the Managing Director
and the Executive General Manager, Human Resources.
1.2.4
Ongoing education
The Board’s ongoing education calendar incorporated site
visits throughout the year to a number of the Company’s
operational facilities. Presentations were given by
management and external experts concerning developments
impacting, or likely to impact, the business. The Board is
informed by leading expertise from within the Company
on matters such as management of energy requirements,
regulation of carbon emissions and business
and product development. The Board held a number of
sessions with senior personnel from organisations operating
in a range of fields relevant to the Company’s operations
and future direction, in order to stay abreast of key and
developing issues of significance to the Company.
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
24
1.2.5
Board and CEO succession planning
2.1 Key standing committees
Since 2010, the Board has embarked on a process of Board
renewal which has seen the appointment of two independent
non-executive Directors - K B Scott-Mackenzie in 2010 and
A M Tansey in 2011. Following the retirement of immediate
past Chairman Mr C L Harris during 2012, the Board
renewal process continues with the Board considering the
appointment of an additional Director in the mid term. The
Board believes that the addition of a new Director will bring
fresh perspectives and broaden the range of experience
and skills on the Board and continue to provide for orderly
succession of its longer serving members.
The Board is continuing to engage with its largest shareholder,
the Barro Group, in relation to future Board appointments.
The Board’s intention following the retirement of Mr C L Harris
was to review the structure and memberships of its Board
Committees after appointing a new Director. Consequently,
the Board considered it appropriate for L V Hosking to
continue as Chairman of the Nomination and Remuneration
Committee and Chairman of the Corporate Governance
Committee in an acting capacity during 2012. However,
as the new Director appointment did not eventuate in
2012, the Board has appointed AM Tansey as Chairman of
Nomination and Remuneration Committee and Corporate
Governance Committee, effective 19 February 2013.
During 2012, the Nomination and Remuneration Committee
reviewed the succession plans for the senior management
team, including the Managing Director, to ensure that
appropriate plans have been implemented for the mid to
long term.
1.2.6
Diversity
The Board, having adopted a Diversity Policy for the Group
in 2011, has established measurable diversity objectives to
enhance gender diversity across the organisation. Further
information of the Group’s progress with the gender
diversity objectives (in accordance with the ASX Corporate
Governance Council Principles and Recommendations)
is set out on pages 30 to 31.
2
Committees of the Board
To assist the Board in fulfilling its responsibilities, the
Board has established a number of committees with
responsibility for particular areas.
Each committee has a specific charter or constitution. The
charters for the Audit, Risk and Compliance Committee and
the Nomination and Remuneration Committee are available
on the corporate governance section of the Company’s
website at www.adbri.com.au. The Board periodically reviews
each Board committee’s charter, role and responsibilities.
Generally, minutes of committee meetings are tabled at
the next Board meeting after the minutes have been
prepared. Additional requirements for specific reporting
by the committees are addressed in the charter of the
individual committees.
Audit, Risk and
Compliance Committee
Nomination and
Renumeration Committee
Members
during 2012
G F Pettigrew (Chairman)
L V Hosking
A M Tansey
C L Harris (retired on 17 May 2012)
Details of these Directors’
qualifications are set out on
page 32 and 33 of this report.
Composition
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Consist of a minimum of 3 members,
all of whom are independent non-
executive Directors.
The chair must be an independent
non-executive Director who is not
Chairman of the Board.
Key functions
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To review, assess (and recommend
to the Board for approval) the annual
financial reports, the half-year
financial report, including reviewing
the results of external audit and
assessing all external reporting for
its adequacy for shareholder needs;
and all other financial information
published by the Company or
released to the market;
To review the appropriateness of
accounting principles adopted by
management in the composition
and presentation of financial reports
and to approve any change in the
accounting principles applied in
preparing the Company and Group
reports;
To evaluate the independence of
both the non-executive Directors
and external auditors and to monitor
the implementation of the Board’s
policy in relation to the provision of
non-audit services by the Company’s
auditor;
To recommend to the Board
the appointment, removal and
remuneration of the external
auditors, to review the terms of their
engagement, the scope and quality of
the audit and to assess performance;
L V Hosking (acting Chairman to
19 February 2013)
G F Pettigrew
K B Scott-Mackenzie
C L Harris (retired on 17 May 2012)
The Board appointed A M Tansey
as Chairman of the Nomination and
Remuneration Committee with effect
from 19 February 2013, on which
date L V Hosking ceased to be acting
Chairman of the Committee but
continues as a member.
Details of these Directors’
qualifications are set out on
page 32 and 33 of this report.
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Consist of a minimum of 3 members,
all of whom are independent non-
executive Directors.
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To review (and recommend to the
Board) the fees paid to non-executive
Directors, and increases to the limits
approved by shareholders;
To review (and recommend to
the Board) the compensation
arrangements for the Managing
Director, including short term and
long term incentives;
To review performance targets, and
approve recommendations from the
Managing Director on total levels of
remuneration, for senior executives;
To oversee the implementation of the
Company’s short term and long term
incentive arrangements, including
assessing the extent to which
performance conditions are satisfied
and making relevant awards;
To review management succession
planning and specifically the Managing
Director and senior executives
reporting to the Managing Director;
Reviewing the appointments and
terminations to senior executive
positions reporting to the Managing
Director;
To assess the appropriate mix of skills,
experience and expertise required
on the Board and assess the extent
to which these required skills are
represented on the Board;
To establish processes for the
identification of suitable candidates
for appointment to the Board, engage
appropriate search firms to assist in
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
25
(Key functions continued)
Audit, Risk and
Compliance Committee
Nomination and
Renumeration Committee
Key activities
during 2012
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To determine the scope of the
internal audit function and ensure
that it has adequate resources
to fulfil its role, to assess its
performance including independence,
effectiveness and appropriate
coordination with external auditors;
To determine whether new policies
or training should be implemented to
safeguard against possible risks or
non-compliance with applicable laws,
regulations or Company policies;
To monitor compliance with the
Company’s policies and procedures
that recognise the Company’s
business, environmental and
statutory responsibilities; and
To report the results of the
Committee’s review of risk
management and internal
compliance and control systems
to the Board.
Ongoing review and consideration of
financial and non-financial risks and
the Company’s system of identifying
and managing risks;
Considering the impact arising from
the implementation of the carbon tax
and related regulatory requirements,
and the Company’s accounting for
these;
Reviewing the Company’s exposure
to and management of slow paying
debtors and bad debts;
Monitoring the performance,
outcomes and actions of the
Company’s internal audit program;
Receiving the external auditors’
reports, monitoring issues reported
and actions taken;
Reviewing and overseeing of the
Company’s 2011 Full Year, 2012 Half
Year and Full Year Financial Reporting
and associated audit;
Establishing the internal audit
plan for 2013 and reviewing and
approving the internal and external
auditors’ fees;
Monitoring the Group’s insurance
renewal programme;
Reviewing the Group’s Delegated
Authorities; and
identifying suitable candidates and
make a recommendation regarding
the most appropriate candidates to
the Board which ultimately will
appoint the new Directors;
To oversee or design induction and
ongoing training and education
programs for the Board to ensure
that non-executive Directors are
provided with adequate information
regarding the operations of the
business, the industry and their
legal responsibilities and duties;
To monitor the tenure of Board
members, considering succession
planning and identifying the likely
order of retirement by rotation of
non-executive Directors; and
To establish processes for the review
of the performance of individual
non-executive Directors, the Board
as a whole and the operation of
Board committees.
Establishing criteria, selecting,
interviewing and assessing potential
non-executive Director candidates,
and reporting to the Board;
Overseeing, and receiving reports from
the Chairman of the Board, concerning
the reviews of the performance of
individual non-executive Directors, the
Board as a whole and the operation of
Board Committees. Also overseeing
and receiving a report from the
Chairman of the Committee concerning
the review of the performance of the
Chairman of the Board;
Reviewing and recommending to the
Board the level of annual fixed and
incentive compensation arrangements
for the Managing Director and the
senior executive team;
Reviewing and recommending to
the Board the Company’s long
term incentive (“LTI”) awards to the
Managing Director and the senior
executive team in 2013, including
levels of participation;
Reviewing the annual Functional
component objectives applicable
to the short term incentive (“STI”)
for the Managing Director and the
senior executive team for 2012;
Reviewing the attainment of STI
and LTI performance conditions
by the Managing Director and
the senior executive team;
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ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
26
(Key activities continued)
2.2
Other Board committees
Audit, Risk and
Compliance Committee
Nomination and
Renumeration Committee
2.2.1
Safety Health and Environment Committee
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Reviewing the Group’s accounting
policies and treatment of particular
issues, including detailed review
during the year of accounting for
2011 acquisitions, accounting for
Defined Benefit Superannuation
and taxation compliance.
Attendance
Consultation
Details of attendance at Audit,Risk
and Compliance Committee
meetings are set out on page 40
of this report. Representatives of
the Company’s external auditors,
PricewaterhouseCoopers, including
the lead audit partner, attend (either
in person or by telephone) for the
whole of the Committee’s meetings.
It is also the practice of the
Committee to meet with the
Company’s auditors without any
member of management present.
Members of management may
attend meetings of the Committee
at the invitation of the Committee
Chairman. It is the practice of the
Committee that the Managing
Director, the Chief Financial Officer
and the Company Secretary attend
all Audit, Risk and Compliance
Committee meetings. The Group Risk
Manager generally attends meetings
of the Committee when non-financial
risk management matters are
considered.
In fulfilling its responsibilities, the
Committee has rights of access
to management and to auditors
(external and internal) without
management present and may
seek explanations and additional
information.
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Reviewing and recommending to the
Board the base fees payable to non-
executive Directors and additional fees
payable for memberships of Board
committees for 2013;
Overseeing the implementation of
diversity measures to facilitate the
achievement of the diversity objectives
as contained in the Diversity Policy
to address diversity in the Board’s
composition, the senior executive
team and the broader Company;
Reviewing and reporting to the Board
on the performance of the Managing
Director and the senior executive team
and succession plans for the Managing
Director, senior executives and other
key positions in the Company; and
Reviewing the Company’s 2012
Remuneration Report and Diversity
Report.
Details of attendance at Nomination
and Remuneration Committee meetings
are set out on page 40 of this report.
It has been the practice of the
Nomination and Remuneration
Committee on occasions to invite other
Directors to attend Committee meetings.
Members of management, particularly
the Executive General Manager, Human
Resources or the Managing Director,
may also attend meetings of the
Committee at the invitation of the
Committee Chairman, whenever
particular matters arise that require
management participation, such as
reviewing senior executive performance.
The Committee and the Chairman
of the Committee directly without
the involvement of the Company’s
executive management instruct expert
professional advisors and obtain their
advice concerning matters of executive
remuneration and the selection of
suitable candidates for appointment as
independent non-executive Director.
The members of the Safety, Health and Environment
Committee (SH&E Committee) during 2012 were K B Scott-
Mackenzie (Chairman), G F Pettigrew, and R D Barro.
M P Chellew (who ceased as a member of the Committee
on 1 January 2012) attends meetings of the SH&E
Committee in his executive position as Managing Director.
The Committee has a broad role in reviewing general and
specific occupational health and safety and environmental
matters across the Group. Committee meetings are also
attended by the Company’s Executive General Manager,
Human Resources and Safety, Health and Environment,
Chief Financial Officer and its General Counsel. Generally
when the SH&E Committee meeting is held prior to a Board
meeting, the SH&E Committee Chairman subsequently
reports to the Board about the Committee’s proceedings.
2.2.2
Corporate Governance Committee
The Corporate Governance Committee which in 2012
comprised of L V Hosking (Chairman) and A M Tansey, is
responsible for overseeing the Company’s implementation
and compliance with best practice in corporate governance
applicable to the circumstances of the Company. Committee
meetings are also attended by the Company’s Managing
Director, the Company Secretary and General Counsel and
the Chief Financial Officer, and are generally held in
conjunction with Board meetings, so that all of the
Company’s Directors are present.
The Board appointed A M Tansey as Chairman of the
Corporate Governance Committee with effect from
19 February 2013, on which date L V Hosking ceased
to be acting Chairman of the Committee but continues
as a member.
The Committee monitored relevant regulatory
developments during 2012 and monitored the annual
review of the Company’s charters and policies to ensure
they comply with regulatory requirements and remain
up to date with good governance guidelines.
C L Harris retired from the Committee (and the Board)
on 17 May 2012.
2.2.3
Independent Directors’ Committee
The role of the Independent Directors’ Committee is to
investigate and consider corporate proposals made to
the Company. The Committee comprises Directors who
do not have any conflict of interest concerning the matters
considered by the Committee. The members of the
Committee during 2012 were C L Harris (Chairman and
Committee member until his retirement on 17 May 2012),
L V Hosking (Chairman from 17 May 2012), G F Pettigrew,
K B Scott-Mackenzie and M P Chellew (Managing Director).
Details of members’ attendance at each of these
Committee meetings in 2012 are set out on page 40.
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
27
3 The Board recognises and manages risk and safeguards the integrity of financial reporting
3.1 Framework The Board has approved the following framework within which the Company discharges its risk management function:
Leading a culture of compliance and ensuring that risk management practices are appropriate and effective in the context of the
Company’s business objectives.
Oversight: The Board, through the Audit, Risk and Compliance Committee, is responsible for reviewing and guiding the Company’s risk management
policies and compliance and control systems. These policies and systems provide for management to identify and manage both financial and non-financial
risks to the Company’s businesses. The Board, through the Committee, regularly review the effectiveness of the Company’s risk management system and
management of identified business risks.
Purpose: The Company’s risk management framework is designed to ensure strategic, operational, legal, reputation and financial risks are identified,
assessed, effectively and efficiently managed and monitored to enable achievement of the Company’s business objectives.
Internal controls framework
A robust control environment is fundamental to the effectiveness
of the Company’s risk management framework. Delegations of authority
and Board and management accountability is clearly demarcated.
All Directors, executives and employees are required to adhere to
the Code of Conduct (described below) and the Board actively
promotes a culture of quality and integrity.
Accounting, financial reporting and internal control policies and
procedures designed to manage business risks (both financial and
non-financial) have been established at the Board and executive
management levels. These are designed to safeguard the assets and
interests of the Company, and ensure the integrity of financial reporting.
The Board nonetheless acknowledges that it has ultimate responsibility
for the accuracy and approval of the Group’s’ financial reports.
The Board acknowledges that it is also responsible for the overall
internal control framework, and to assist in discharging this
responsibility, the Board has instigated an internal control
framework that can be described as follows:
Financial risk
The Managing Director and Chief Financial Officer have
made the following certifications to the Board:
That the Company’s financial reports present a true and fair view,
in all material respects, of the financial position and performance
of the Company and the consolidated entity and are in accordance
with relevant accounting standards;
That the Company has adopted an appropriate system of risk
management and internal compliance and control which implements
the policies adopted by the Board and forms the basis for the
statement given above; and
That the Company’s risk management and internal compliance
and control system to the extent it relates to financial reporting is
operating efficiently and effectively in all material respects.
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Non-financial risk
Management has also reported to the Board on strategic and
operational issues, including an assessment of the material
business risks facing the Company and the effectiveness of the
systems and policies in place to manage those risks.
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Financial reporting
Comprehensive budgeting system
with an annual budget reviewed and
approved by the Board
Monthly actual results are reported
against budget and revised forecasts
for the year are prepared regularly
Procedures to ensure that price
sensitive information is reported
to the ASX in a timely manner
(see section 5 below)
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Investment appraisal
Clearly defined guidelines for
capital expenditure
eg. annual budgets, detailed appraisal
and review procedures, levels of
delegated authority and due diligence
requirements where businesses are
being acquired or divested
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
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Operating unit controls
Financial controls and procedures including
information systems controls are in operation
throughout the consolidated entity
Operating units confirm compliance with these
procedures to the Board annually
Functional speciality reporting
The Group has identified a number of
key areas which are subject to regular
reporting to the Board, such as safety
and environment, risk management,
taxation, finance and administration
Delegated authorities
and restrictions
Comprehensive procedure which
provides a framework that enables
employees to operate and act
within clearly defined and
communicated parameters.
Internal audit:
Assists the Board in ensuring compliance
with internal controls
The Audit, Risk and Compliance Committee
reviews and approves the selection and
engagement of internal auditors, the internal
audit program to be conducted, and the scope
of the work to be performed at each location
Internal auditors provide the Committee with
comments and recommendations about the
identification of areas perceived to be of a
greater level of risk than others, and any
areas requiring particular scrutiny
The Committee receives and reviews
the reports of the internal auditors
3.2
Audit Services
The Company and Audit, Risk and Compliance Committee policy
is to appoint external auditors who clearly demonstrate quality
and independence. The performance of the external auditor
is considered annually. PricewaterhouseCoopers remains the
external auditor of the Company for the Group’s financial report
for the year ended 31 December 2012.
The Board has adopted a policy in relation to the provision
of non-audit services by the Company’s external auditor. It is
based on the principle that work that may detract from the
external auditor’s independence and impartiality (or that may be
perceived as doing so) should not be carried out by the external
auditor. Details and the break down of fees for non-audit
services and an analysis of fees paid or payable to external
auditors are provided in Note 32 to the Financial Statements.
the Company’s annual report until one month after the annual
general meeting. The policy also defines certain periods (known
as ‘Trading Windows’) in which Directors and employees may
buy or sell Adelaide Brighton Ltd shares with approval from the
Company. The policy complies with the requirements of the
ASX Listing Rules and supplements the Corporations Act 2001
provisions that preclude Directors and employees from trading in
securities when they are in possession of “inside information”.
The Board also has a policy that prohibits executives from
hedging (or otherwise locking in a profit over) unvested securities
issued under the Company’s Share Plans. The Company’s Share
Trading Policy and the Award/Share Hedging Policy are available
on the Company’s website at www.adbri.com.au
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The Board is committed to timely and balanced
disclosure and respects the rights of shareholders
4
The Board is committed to promoting ethical and
responsible decision-making
5.1
Continuous disclosure
4.1
Code of conduct and whistleblower program
The Company is committed to upholding the highest ethical
standards of corporate behaviour. A Code of Conduct has been
adopted, which requires that all Directors, senior management
and employees act with the utmost integrity and honesty. It
aims to further strengthen the Company’s ethical climate by
promoting practices that foster the Company’s key values of:
Acting with fairness, honesty and integrity;
Being aware of and abiding by laws and regulations;
Individually and collectively contributing to the wellbeing of
shareholders, customers, the economy and the community;
Maintaining the highest standards of professional behaviour;
Avoiding or managing conflicts of interest; and
Striving to be a good corporate citizen, and to achieve
community respect.
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The Code of Conduct is publicly available on the Company’s
website at www.adbri.com.au. During 2012, the Company
undertook a review of, and updated the Code of Conduct,
ensuring that the Code keeps relevant to the Company’s
values and practices. The Company has also adopted policies
requiring compliance with (among others) occupational
health and safety, environmental, privacy, equal employment
opportunity and competition and consumer law. The
Company monitors the effectiveness of these policies.
Employees are encouraged to attend training or seminars
presented by the Company, or external service providers,
to ensure that they remain up-to-date with relevant
industry and regulatory developments.
The Code requires all officers, employees, contractors,
agents or people associated with the Company to report
any potential breaches to the Company Secretary under the
whistleblower program. This may be done anonymously.
4.2
Shareholdings of Directors and employees
The Board has a policy that Directors and employees may
not buy or sell Adelaide Brighton Ltd shares except within
the period of one month following the annual and half year
results announcements and the period from the release of
The Company is committed to providing relevant and timely
information to its shareholders and to the broader market,
in accordance with its obligations under the Corporations Act
2001 and the ASX continuous disclosure regime.
The Company’s Continuous Disclosure Policy is available on the
Company’s website and sets out guidelines and processes to
be followed in order to ensure that the Company’s continuous
disclosure obligations are met. Material information must not
be selectively disclosed prior to being announced to the ASX.
These policies and procedures are supplemented by the
Shareholder Communications Policy (also published on the
Company’s website) which includes arrangements the Company
has in place to promote communication with shareholders and
encourage effective participation at general meetings.
The Company Secretary has been nominated as the person
responsible for communicating with the ASX. This role includes
responsibility for ensuring compliance with the continuous
disclosure requirements and overseeing and coordinating (with
the Group Corporate Affairs Adviser) information disclosure to the
ASX, analysts, brokers, shareholders, the media and the public.
During 2012, the Company commenced a review of the
Continuous Disclosure policy, and will consider if amendments
are required to the Policy upon the ASX issuing its proposed
new Guidance Note on continuous disclosure.
5.2
Communication with shareholders
The Company’s website contains copies of annual reports,
financial accounts, presentations, media releases and other
investor relations publications. All relevant announcements
made to the market, and any related information, are also
posted on the Company’s website.
The Board encourages full participation of shareholders at
the Annual General Meeting in order to promote a high level
of accountability and discussion of the Company and the
Group’s strategy and goals. The external auditor will attend
the Annual General Meeting and be available to answer
shareholder questions about the conduct of the audit and
the preparation and content of the auditors’ report.
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
29
Diversity Policy
A
delaide Brighton is committed to the promotion
of diversity and recognises that removing barriers
to diversity enables us to attract and retain the
best people for our business.
Our Diversity Policy outlines five core objectives which form the foundations of our approach to diversity and upon which we measure our performance in this area.
An overview of these objectives, and our progress towards achieving these objectives for the 2012 financial year, are set out below:
Objective
Diversity measures to facilitate achievement of objectives
Progress
To promote a culture of
diversity (which includes
gender, skills, experience,
and cultural background)
Leadership programs targeted at our female management and
frontline employees focussing on their strengths and contribution
to the broader workplace to be rolled out across the organisation.
The programs were well received across the business with
70% of our total female staff in attendance. Follow up training
programs planned for 2013.
Company-wide training in workplace policies (including diversity,
bullying and harassment, Equal Employment Opportunity).
Employee inductions include information on company policies
such as equal employment opportunity and bullying.
The Board and Nomination and Remuneration Committee
review Adelaide Brighton’s diversity achievements relative to
the industry structure in which the Company operates.
In 2012, the Board and Nomination and Remuneration Committee
discussed the Company’s diversity measures and the need to
develop a positive workplace culture.
To ensure that recruitment
and selection processes are
based on merit
Internal review of Adelaide Brighton’s recruitment practices
and systems to ensure that employment decisions are made
without regard to factors that are not applicable to the inherent
requirements of a position and that unconscious gender bias
does not influence outcomes.
Recruitment mentoring training continues across the business
with a view to eliminate any unconscious bias that may occur.
Selection of recruitment agencies employed by Adelaide Brighton is
based on their commitment to providing diverse candidate pools.
To provide talent
management and
development opportunities
for all employees
Ongoing talent recognition and in-house leadership programs
for employees.
Various development programs provided for recognised employees
and tailored to individual needs ranging from external training and
education, mentoring and/or specific on the job training.
Sponsor or encourage professional networking, coaching and
mentoring programs to give female employees the opportunity
to connect with other professionals.
Where identified, these programs are supported across the
organisation.
Sponsor MBA or post-graduate studies for high potential
female employees.
Adelaide Brighton supports external study and development
for high potential employees.
In recognition of the low numbers of females entering into
engineering and manufacturing vocations:
implement programs designed to engage female graduate
engineers;
offer undergraduate scholarship opportunities and sponsor
vacation work programs to engage female students who
are entering tertiary education to consider engineering
as a career option; and
strive for gender balance in the recruitment of graduates
each year.
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Continued sponsorship of the Women in Engineering program at
the University of Wollongong in 2012 that provides both a financial
benefit and work placement opportunity.
In 2012, equal numbers of male and female graduates were
offered positions.
The Company has attended career expos at Curtin University,
the University of Adelaide and the University of Wollongong and
sponsored Engineering awards at Wollongong University.
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
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Objective
Diversity measures to facilitate achievement of objectives
Progress
To reward and
remunerate fairly
Adelaide Brighton has a policy to provide equal pay
for equal work.
The gender pay parity review was completed in 2012 as part
of Adelaide Brighton’s annual remuneration review processes.
As part of the annual salary review process, Adelaide Brighton
undertakes a review of pay parity.
Pay parity is also considered at the time of hiring new
employees, to eliminate potential gaps in pay arising from
hiring decisions.
To provide flexible
work practices
Adelaide Brighton seeks to provide suitable working
arrangements for employees returning from maternity leave.
Of the women who commenced and finished maternity
leave in 2012, 100% have returned to work in either
a full or part time capacity.
Flexible working arrangements are available to all employees
under our flexible work policy, to recognise that employees may
have different domestic responsibilities throughout their career.
This includes opportunities to work part time and from home
or a remote location.
We also offer 12 weeks’ paid parental leave for
the primary carer.
Formal review of all part time work arrangements to ensure
roles are appropriate to maintain career development.
A copy of Adelaide Brighton’s
Diversity Policy is available
in the corporate governance
section of Adelaide Brighton’s
website.
Adelaide Brighton is committed to the regular review of its
objectives to ensure that these continue to be appropriate
and relevant. The Board is committed to build upon the
achievements to date and reinforce the continued efforts
in promoting and cultivating a culture of diversity and
inclusiveness.
The proportion of women across Adelaide Brighton’s workforce
is reflective of the generally low level of female representation
in the building, manufacturing and construction materials
industries in which we operate. We recognise that the available
pool of female candidates in engineering roles relevant to our
business operations is limited, and this impacts our ability to
increase the number of female new hires in the short term.
In an effort to make our company (and industry) more attractive
to women, we have focussed on measures designed to
increase the proportion of female graduates and to support
the leadership development of female employees who are
recognised as having future potential.
We believe that, over time, our diversity objectives and
measures will achieve an improvement in the level of female
representation across the organisation.
The following table shows the proportional representation
of women employees at various levels within the Adelaide
Brighton Group (as at 31 December 2012):
Board
16%
Senior Executives (KMP’s)
14%
Senior Managers (Direct reports to KMP’s)
18%
Total workforce
12%
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
31
Directors
Director
Experience
Les Hosking
Age 68
Independent non-executive Director since June 2003.
Extensive experience in commercial and financial matters
with 16 years experience as Chief Executive of the Sydney
Futures Exchange and former Chief Executive Officer of Axiss
Australia and Managing Director of National Electricity Market
Management Company (NEMMCO).
Director, AGL Energy Limited (appointed November 2008)
and Australian Energy Market Operator Limited (appointed
July 2009) and Carbon Market Institute Limited (appointed
October 2010).
Special responsibilities
Appointed Chairman
17 May 2012
Member, Audit, Risk and
Compliance Committee
Member, Corporate
Governance Committee
Member, Nomination and
Remuneration Committee
Member, Independent
Directors’ Committee
Raymond Barro
BBus, CPA, ACIS
Age 51
Non-executive Director since August 2008.
Over 23 years experience in the premixed concrete and
construction materials industry.
Member, Safety, Health and
Environment Committee
Managing Director of Barro Group Pty Ltd.
Graeme Pettigrew
FIPA, FAIM, FAICD
Age 64
Independent non-executive Director since August 2004.
Extensive experience in the building materials industry and
former Chief Executive Officer of CSR Building Products and
broad management experience gained in South East Asia and
the United Kingdom through former positions as Managing
Director of Chubb Australia Limited and Wormald Security
Australia Pty Ltd.
Director, Bisalloy Steel Group Ltd (appointed April 2006),
Capral Ltd (appointed June 2010) and Holocentric Pty Ltd
(appointed 18 September 2012). Former Director, Knauf
Plasterboard Pty Limited (formerly Lafarge Plasterboard Pty
Ltd) (appointed June 2005 and resigned November 2012).
Chairman, Audit, Risk and
Compliance Committee
Member, Independent
Directors’ Committee
Member, Nomination and
Remuneration Committee
Member, Safety, Health and
Environment Committee
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
32
Director
Experience
Special responsibilities
Ken Scott-Mackenzie
BE(Mining), Dip Law
Age 62
Independent non-executive Director since July 2010.
Mining Engineer with over 37 years experience in infrastructure,
construction and mining services gained in Australia and South
Africa, as well as extensive experience in financial, legal and
commercial aspects of projects.
Chairman, Macmahon Holdings Limited (appointed Chairman
in November 2009 and a Director in May 2009). Former
Chairman, Murchison Metals Ltd (appointed Chairman in July
2011 and a Director in May 2011. Resigned November 2012).
Chairman, Safety, Health and
Environment Committee
Member, Nomination and
Remuneration Committee
Member, Independent
Directors’ Committee
Arlene Tansey
FAICD, MBA, JD, BBA
Age 55
Chairman, Nomination and
Remuneration Committee
Chairman, Corporate
Governance Committee
Member, Audit, Risk and
Compliance Committee
Independent non-executive Director since April 2011.
Extensive experience as a senior executive in business and
the financial services industry gained in Australia and the
United States with a background in investment banking
and securities law.
Director, Pacific Brands Limited (appointed March 2010) and
Lend Lease Funds Management Limited (appointed October
2010), Lend Lease Real Estate Investments Limited (appointed
October 2010) and Primary Health Care Ltd (appointed August
2012). External Member, Serco Asia Pacific Advisory Board.
Former Director, Police Citizens Youth Clubs (formerly Police
and Youth Clubs NSW Ltd) (appointed June 2004 and
resigned in July 2012).
Mark Chellew
BSc, ME, Grad Diploma Mgt
Age 56
Managing Director since September 2001.
Mechanical Engineer with over 31 years experience in the
heavy building materials and related industries gained in
Australia and the United Kingdom.
Member, Independent
Directors’ Committee
Previously held the position of Managing Director of Blue
Circle Cement in the United Kingdom and senior management
positions within the CSR group of companies in Australia
and the United Kingdom.
Director, Transpacific Industries Group Ltd
(appointed 1 March 2013).
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
33
Shareholder information
Enquiries about your shareholding
Enquiries or notifications by shareholders regarding their
shareholdings or dividends should be directed to Adelaide
Brighton’s share registry:
Computershare Investor Services Pty Limited
Level 5, 115 Grenfell Street
Adelaide SA 5000
Telephone 1800 339 522 International 613 9415 4031
Facsimile 1300 534 987 International 618 8236 2305
When communicating with the share registry, shareholders
should quote their current address together with their Security
Reference Number (SRN) or Holder Identification Number (HIN)
as it appears on their Issuer Sponsored/CHESS statement.
Online services
Shareholders can access information and update information
about their shareholding in Adelaide Brighton Limited via the
internet by visiting Computershare Investor Services Pty Ltd
website: www.investorcentre.com
Some of the services available online include: check current
holding balances, choose your preferred annual report option,
update address details, update bank details, confirm whether
you have lodged your TFN, ABN or exemption, view your
transaction and dividend history or download a variety of forms.
Enquiries about Adelaide Brighton Ltd
Enquiries about Adelaide Brighton Ltd should be directed to:
Group Corporate Affairs Adviser
Adelaide Brighton Ltd
GPO Box 2155
Adelaide SA 5001
Telephone 08 8223 8000
Facsimile 08 8215 0030
Email adelaidebrighton@adbri.com.au
Annual general meeting
The annual general meeting of shareholders will be held at the
InterContinental, North Terrace, Adelaide, South Australia on
Wednesday 22 May 2013 at 11.00 am.
Computershare Investor Services Pty Ltd or visit the website at
www.computershare.com.au/easyupdate/abc to update your
banking details.
Combining multiple shareholdings
If you have multiple shareholding accounts that you want to
consolidate into a single account, please advise the share
registry, Computershare Investor Services Pty Limited, in writing.
Change of address
Shareholders who are Issuer Sponsored should notify any
change of address to the share registry, Computershare Investor
Services Pty Limited, by telephone or in writing quoting your
security holder reference number, previous address and new
address. Broker Sponsored (CHESS) holders should advise their
sponsoring broker of the change.
Registered office
Level 1, 157 Grenfell Street
Adelaide SA 5000
Telephone 08 8223 8000
Facsimile 08 8215 0030
Stock exchange listing
Adelaide Brighton Ltd is listed on the Australian Securities
Exchange and trades under the symbol “ABC”. Adelaide is
Adelaide Brighton Ltd’s home exchange.
Communications
Our internet site www.adbri.com.au offers access to our ASX
announcements and news releases as well as information about
our operations.
Substantial shareholders
Barro Properties Pty Ltd, by a notice of change of interests
of substantial shareholder dated 20 August 2012, informed
the Company that it or an associate had a relevant interest
in 193,826,874 ordinary shares or 30.4% of the Company’s
issued share capital.
Direct credit of dividends
On market buy back
Dividends can be paid directly into a bank or other financial
institution. Payments are electronically credited on the dividend
payment day and subsequently confirmed by mailed payment
advice. Application forms are available from our share registry,
At 2 April 2013 there is no on-market buy back of the
Company’s shares being undertaken.
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
34
Top twenty largest shareholders as at 2 April 2013
Shareholder
Barro Properties Pty Ltd
National Nominees Limited
J P Morgan Nominees Australia Limited
HSBC Custody Nominees (Australia) Limited
Barro Group Pty Ltd
JP Morgan Nominees Australia Limited
Citicorp Nominees Pty Limited
BNP Paribas Noms Pty Ltd
Argo Investments Ltd
UBS Wealth Management Australia Nominees Pty Ltd
AMP Life Limited
UBS Nominees Pty Ltd
Citicorp Nominees Pty Limited
UCA Growth Fund Limited
Milton Corporation Limited
Sandhurst Trustees Ltd
Questor Financial Services Limited
Bond Street Custodians Limited
HSBC Custody Nominees (Australia) Limited
Bond Street Custodians Limited
Number of ordinary shares held % of issued capital
153,350,452
24.06
61,421,869
60,828,022
58,288,299
42,744,804
13,116,281
12,360,217
12,177,458
6,504,449
3,428,637
3,177,711
2,992,500
2,453,397
2,300,000
2,098,440
2,082,570
1,745,879
1,537,416
1,507,074
1,430,000
9.64
9.54
9.14
6.71
2.06
1.94
1.91
1.02
0.54
0.50
0.47
0.38
0.36
0.33
0.33
0.27
0.24
0.24
0.22
Total top 20 shareholders
Total remaining holders balance
445,545,475
191,842,013
69.90
30.10
Voting rights
Unquoted securities
5,975,030 Awards issued to the Managing Director and other
members of the senior executive team under the Adelaide
Brighton Ltd Executive Performance Share Plan as part of the
Company’s long term incentive program. The Awards are not
quoted and do not participate in the distribution of dividends
and do not have voting rights. The total number of participants
in the Adelaide Brighton Ltd Executive Performance Share Plan
and eligible to receive the Awards is seven.
All shares at 2 April 2013 were of one class with equal voting
rights being one vote for each shareholder and, on a poll, one
vote for each fully paid ordinary share.
Shares held as at Number of % of issued
shareholders capital
2 April 2013
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - over
3,235
7,802
4,098
0.24
3.59
4.85
3,835
13.92
205
77.40
Total shareholders
19,175
100.00
Less than a marketable parcel of 142 shares
763
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
35
Company addresses
Cockburn Cement
Munster Operations
Lot 242 Russell Road East
Munster WA 6166
PO Box 38
Hamilton Hill WA 6963
Telephone 08 9411 1000
Facsimile 08 9411 1150
Dongara Operations
Kailis Drive
Dongara WA 6525
PO Box 530
Dongara WA 6525
Telephone 08 9927 2756
Facsimile 08 9927 2761
Kwinana Operations
Lot 45 Leath Road
Kwinana WA 6167
PO Box 528
Kwinana WA 6167
Telephone 08 9499 2222
Facsimile 08 9499 2299
Rawlina Operations
Lot 33 Yarri Road
Parkeston WA 6430
PO Box 808
Kalgoorlie WA 6430
Telephone 08 9021 3701
Web www.cockburncement.com.au
Morgan Cement
Foreshore Road
Port Kembla NSW 2505
Telephone 02 4276 4888
Facsimile 02 4276 4399
Corporate Office
Adelaide Brighton Ltd
Level 1, 157 Grenfell Street
Adelaide SA 5000
GPO Box 2155
Adelaide SA 5001
Telephone 08 8223 8000
Facsimile 08 8215 0030
Email adelaide.brighton@adbri.com.au
Web www.adbri.com.au
Sydney Office
Level 13, 1 Alfred Street
Sydney NSW 2000
Telephone 02 8248 9999
Facsimile 02 9247 5534
Cement and Lime Division
Adelaide Brighton Cement
Birkenhead Operations
62 Elder Road
Birkenhead SA 5015
PO Box 77
Port Adelaide SA 5015
Telephone 08 8300 0300
Facsimile 08 8341 1591
Angaston Operations
Stockwell Road
Angaston SA 5353
PO Box 229
Angaston SA 5353
Telephone 08 8561 3100
Facsimile 08 8564 3019
Web www.adelaidebrighton.com.au
Northern Cement
Darwin Operations
Berrimah Road
East Arm Darwin NT 0828
PO Box 39631
Winnellie NT 0821
Telephone 08 8984 4722
Facsimile 08 8984 4674
Mataranka Operations
Cnr Roper and Stuart Highways
Mataranka NT 0852
PO Box 4011
Mataranka NT 0852
Telephone 08 8975 4575
Facsimile 08 8975 4752
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
36
Joint ventures
Independent Cement & Lime (50%)
750 Lorimer Street
Port Melbourne VIC 3207
GPO Box 523
Port Melbourne VIC 3207
Telephone 03 9676 0000
Facsimile 03 9646 4954
Sunstate Cement (50%)
Port Drive
Fisherman Islands QLD 4178
PO Box 350
Wynnum QLD 4178
Telephone 07 3895 1199
Facsimile 07 3895 1198
Mawson Group (50%)
141 King George Street
Cohuna VIC 3568
Telephone 03 5456 2409
Facsimile 03 5456 2428
Batesford Quarry (50%)
240 Fyansford-Gheringhap Road
Batesford VIC 3221
GPO Box 120
Geelong VIC 3220
Telephone 0417 377023
Facsimile 03 5222 7188
Burrell Mining Services (50%)
34-36 York Road
Ingleburn NSW 2565
Telephone 02 9829 2625
Facsimile 02 9829 6601
Aalborg Portland Malaysia
Sdn. Bhd. (30%)
Lot 75244, Pinji Estate
Lahat, Perak, Malaysia
PO Box 428
30750 Ipoh, Perak DR
Malaysia
Telephone +605 321 8988
Facsimile +605 322 2522
Concrete and
Aggregates Division
Hy-Tec
Unit 4, Gateway Business Park
63-79 Parramatta Road
Silverwater NSW 2128
Telephone 02 9647 2866
Facsimile 02 9647 2924
Hy-Tec
105 Laurens Street
North Melbourne VIC 3051
Telephone 03 9328 1522
Facsimile 03 9328 5200
Hy-Tec
Fishermans Road
Maroochydore QLD 4558
Telephone 07 5443 4533
Facsimile 07 5443 6618
www.hy-tec.com.au
Concrete Products Division
Adbri Masonry
Queensland
85 Christensen Road
Stapylton QLD 4207
PO Box 623
Beenleigh QLD 4207
Telephone 07 3382 4100
Facsimile 07 3382 4185
New South Wales
20 Kelso Crescent
Moorebank NSW 2170
Telephone 02 9822 6822
Facsimile 02 9601 7446
Victoria
194 Northbourne Road
Campbellfield VIC 3061
Telephone 03 9305 0900
Facsimile 03 9303 9035
South Australia
Cnr Grand Junction and Blakeney Rds
Ottoway SA 5013
Telephone 08 8304 2323
Facsimile 08 8341 1101
Tasmania
South Arm Highway
Mornington TAS 7018
Telephone 03 6244 3822
Facsimile 03 6244 4042
Web www.adbrimasonry.com.au
Financial
statements
Directors’ report.............................................................................................................................38
Remuneration report......................................................................................................................42
Income statement...........................................................................................................................53
Statement of comprehensive income...........................................................................................54
Balance sheet..................................................................................................................................55
Statement of changes in equity.....................................................................................................56
Statement of cash flows................................................................................................................57
Notes
Summary.of.significant.accounting.policies...................................................................................58
1.
Critical.accounting.estimates.and.assumptions.............................................................................67
2.
Revenue.and.other.income..........................................................................................................68
3.
Expenses...................................................................................................................................68
4.
Income.tax.................................................................................................................................69
5.
Current.assets.-.cash.and.cash.equivalents..................................................................................70
6.
Current.assets.-.trade.and.other.receivables.................................................................................70
7.
Current.assets.-.inventories.........................................................................................................71
8.
Current.assets.-.assets.classified.as.held.for.sale..........................................................................71
9.
10. Non-current.assets.-.receivables..................................................................................................71
11. Non-current.assets.-.investments.accounted.for.using.the.equity.method........................................72
12. Non-current.assets.-.property,.plant.and.equipment......................................................................74
13. Non-current.assets.-.deferred.tax.assets......................................................................................75
14. Non-current.assets.-.intangible.assets.........................................................................................75
15. Carbon.asset.and.liability.............................................................................................................76
16. Current.liabilities.-.trade.and.other.payables.................................................................................77
17. Current.liabilities.-.borrowings.....................................................................................................78
18. Current.liabilities.-.provisions.......................................................................................................78
19. Current.liabilities.-.other.liabilites.................................................................................................78
20. Non-current.liabilities.-.borrowings...............................................................................................78
21. Non-current.liabilities.-.deferred.tax.liabilities................................................................................79
22. Non-current.liabilities.-.provisions................................................................................................79
23. Non-current.liabilities.-.retirement.benefit.obligations....................................................................79
24. Contributed.equity.......................................................................................................................82
25. Reserves.and.retained.earnings...................................................................................................83
26. Dividends...................................................................................................................................83
Financial.risk.management..........................................................................................................84
27.
28. Contingencies.............................................................................................................................88
29. Commitments.for.expenditure......................................................................................................88
30. Share-based.payment.plans........................................................................................................89
31. Key.management.personnel.disclosures.......................................................................................90
32. Remuneration.of.auditors............................................................................................................93
33. Related.parties...........................................................................................................................94
34.
Investments.in.controlled.entities.................................................................................................96
35. Deed.of.cross.guarantee.............................................................................................................97
36. Reconciliation.of.profit.after.income.tax.to.net.cash.inflow.from.operating.activities..........................98
Earnings.per.share......................................................................................................................99
37.
38.
Events.occurring.after.the.balance.sheet.date...............................................................................99
39. Segment.reporting......................................................................................................................99
40. Parent.entity.financial.information..............................................................................................101
Directors’ declaration...................................................................................................................102
Auditor’s independence declaration...........................................................................................102
Independent audit report.............................................................................................................103
Financial history...........................................................................................................................104
ADELAIDE BRIGHTON LTD ANNUAL REPORT 2012
37
Directors’ report
Directors’ report
The.Directors.present.their.report.on.the.
consolidated.entity.(the.Group).consisting.of.
Adelaide.Brighton.Ltd.(the.Company).and.the.
entities.it.controlled.at.the.end.of,.or.during,.the.
year.ended.31.December.2012.
Directors
The.Directors.of.the.Company,.at.any.time.during.
or.since.the.end.of.the.financial.year.and.up.to.the.
date.of.this.report,.are:
L.V.Hosking
R.D.Barro
G.F.Pettigrew
K.B.Scott-Mackenzie
A.M.Tansey
M.P.Chellew
C.L.Harris.(retired.17.May.2012)
Principal activities
During.the.year.the.principal.activities.of.the.Group.
consisted.of.the.manufacture.and.distribution.of.
cement,.and.cementitious.products,.lime,.premixed.
concrete,.aggregates,.sand.and.concrete.products.
Review of operations
A.summary.of.the.financial.results.for.the.year.
ended.31.December.2012.is.set.out.below:
($ Million)
Revenue
Depreciation.and.amortisation.
Earnings before interest and tax (“EBIT”)
Net.interest
Profit before tax
Income.tax.expense.
Net profit after tax
Attributable.to:.
Members.of.Adelaide.Brighton.Ltd.
Non-controlling.interests.
Basic.earnings.per.share.(cents).
Ordinary.dividend.per.share.(cents).
Franking.(%).
Net.debt.
Net.debt/equity.(%).
2012.net.profit.after.tax.attributable.to.members.
of.the.Company.increased.3.9%.compared.to.the.
prior.year.to.$154.2.million..Revenue.of.$1,176.2.
million.increased.by.6.9%.primarily.due.to.stronger.
demand.from.resource.and.project.work.in.South.
Australia,.Western.Australia.and.the.Northern.
Territory.which.offset.general.weakness.in.both.the.
residential.and.non-residential.building.sectors.
Earnings.before.interest.and.tax.(EBIT).increased.
by.1.0%.to.$225.6.million..Higher.energy.costs,.
including.the.impact.of.the.introduction.of.the.
price.on.carbon,.a.reduction.in.equity.accounted.
contribution.from.joint.ventures.and.a.mix.shift.
toward.projects.in.regional.areas,.which.include.a.
low.margin.freight.component,.negatively.impacted.
margins.despite.cost.saving.initiatives.that.
delivered.$8.5.million.in.benefits.
Profit.before.tax.increased.1.4%.to.$209.2.million..
Net.interest.decreased.by.3.5%.to.$16.4.million.as.
higher.levels.of.capitalised.interest,.driven.by.major.
capital.project.expenditure,.and.lower.interest.rates.
offset.the.impact.of.higher.levels.of.debt.
2012
2011
1,176.2
1,100.4
(65.2).
(57.8)
225.6
(16.4)
209.2
(55.1).
223.4
(17.0)
206.4
(58.0)
154.1
148.4
154.2.
(0.1).
24.2.
16.5.
100%.
312.3.
31.0%.
148.4
-
23.3
16.5
100%
248.4
26.0%
Cement
Cement.sales.increased.from.the.prior.year.as.
demand.from.mining,.resources.and.projects.
in.South.Australia,.Western.Australia.and.the.
Northern.Territory.more.than.offset.weakness.in.the.
residential.and.non-residential.sectors..Declining.
residential.demand.in.Victoria.led.to.lower.cement.
sales.in.Victoria,.while.clinker.sales.were.impacted.
by.depressed.market.conditions.in.Queensland.
Cement.average.selling.prices.increased.at.slightly.
higher.than.inflationary.levels,.constrained.by.the.
high.Australian.dollar,.with.cost.increases.offsetting.
the.benefits.of.higher.selling.prices..Energy.costs.
increased.by.8%.including.the.$3.million.after.
tax.impact.of.the.carbon.tax..Cement.margins.
were.also.impacted.by.the.reduction.in.clinker.
production.of.approximately.80,000.tonnes.at.the.
Birkenhead.plant.in.South.Australia,.as.reliability.
issues.resulted.in.longer.maintenance.shutdown.
periods.than.planned..This.resulted.in.sales.to.
Independent.Cement.and.Lime.being.supplemented.
by.imported.product..The.cost.of.imports.and.
higher.maintenance.impacted.pre-tax.profits.by.
approximately.$6.million..Quality.issues.associated.
with.alternative.fuel,.the.cause.of.the.deterioration.
in.reliability,.have.been.resolved.and.production.has.
returned.to.normal.
ADELAIDE BRIGHTON LTD AND ITS CONTROLLED ENTITIES
FOR THE YEAR ENDED 31 DECEMBER 2012
38
Adelaide.Brighton.is.Australia’s.largest.importer.
of.cement.and.clinker.and.has.an.unmatched.
network.of.import.terminals.that.provide.cost.
competitive.access.to.all.mainland.capital.city.
markets.and.regional.north.west.Western.Australia..
Adelaide.Brighton.imports.of.cementitious.products,.
including.cement.clinker,.cement.and.blast.furnace.
slag,.were.approximately.1.6.million.tonnes.in.
2012.
The.high.Australian.dollar.had.a.favourable.impact.
on.import.margins.of.$1.million.compared.to.the.
prior.year.
Lime
Lime.sales.volume.increased.by.over.5%.compared.
to.2011.due.to.robust.demand.from.the.alumina.
and.gold.sectors,.as.well.as.the.resumption.of.
operations.at.a.major.customer.in.the.Northern.
Territory..Margins.improved.due.to.increased.prices.
and.efficiency.improvements.that.alleviated.rising.
input.costs.
The.performance.of.the.recently.installed.bag.
house.filter.to.kiln.6.at.Munster.has.exceeded.
expectations.for.improvement.to.production.
capacity.
Concrete and Aggregates
Adverse.weather.in.the.first.half.of.the.year.and.
weak.demand.in.the.eastern.states,.combined.
with.the.continued.contraction.in.the.residential,.
commercial.and.industrial.sectors.negatively.
impacting.on.concrete.volumes..Aggregate.volumes.
increased.due.to.demand.from.the.Pacific.Highway.
upgrade.and.the.full.year.benefit.from.acquisitions.
in.2011.
Price.increases.were.achieved.despite.the.difficult.
operating.environment,.with.further.announced.
prices.rises.effective.in.2013.
Concrete Products
Soft.demand.in.the.eastern.states,.particularly.
housing.and.commercial.sectors,.resulted.in.
depressed.trading.conditions.across.the.masonry.
markets..Despite.the.difficult.market,.revenue.
increased.2.9%.due.to.improved.prices.and.
isolated.project.work.
Structural.changes.were.implemented.within.the.
business.following.a.review.of.production.capacity.
and.key.processes,.lowering.production.and.
overhead.costs..These.savings.were.only.partly.
realised.within.the.current.year.
Joint Ventures and Associates
Independent.Cement.and.Lime.(ICL).reported.a.
decline.in.earnings.as.demand.softened.due.to.
lower.residential.activity.and.completion.of.major.
infrastructure.projects..ICL’s.market.remains.
subdued.and.competitive.pressures.have.restricted.
price.increases,.limiting.the.recovery.of.inflationary.
cost.pressures.
Net.debt.increased.$63.9.million.to.$312.3.million,.
bringing.net.debt.to.equity.gearing.to.31.0%,.which.
is.within.the.Board’s.target.range.of.25%.to.45%.
Dividends paid or declared by the Company
During.the.2012.financial.year,.the.following.
dividends.were.paid:
Sunstate.Cement.reported.lower.earnings.due.to.
weakness.in.South.East.Queensland.demand.and.a.
reduction.in.off-take.from.the.joint.venture’s.largest.
customer.
n. A.final.dividend.in.respect.of.the.year.ended.
31.December.2011.of.9.0.cents.per.share.(fully.
franked).was.paid.on.10.April.2012..This.dividend.
totalled.$57,265,003.
The.Mawsons.concrete.and.aggregates.joint.
venture.reported.a.decline.in.earnings..The.
reduction.reflects.a.return.to.normal.trading.
following.the.lift.in.volumes.as.a.result.of.demand.
from.reconstruction.work.of.flood.damaged.
infrastructure.
Adelaide.Brighton.acquired.a.30%.interest.in.
Aalborg.Portland.Malaysia.Sdn..Bhd..(APM).on.
5.December.2012..APM.is.a.white.clinker.
manufacturer.based.in.Ipoh,.Malaysia..During.
December,.the.board.of.APM.approved.a..
US$18.6.million.project.to.expand.white.clinker.
capacity.from.180,000.to.300,000.tonnes.per.
annum..Following.this,.APM.recorded.a.$5.7.million.
tax.benefit.recognising.that.previously.granted.
government.investment.allowances.would.be.
utilised.to.reduce.future.tax..Adelaide.Brighton’s.
share.of.this.benefit.totalled.$1.7.million.
Operational results
Cash.flow.from.operations.increased.by..
$35.2.million.to.$186.5.million.due.to.effective.
working.capital.management.and.a.decrease.in.
income.tax.payments.
Overall.working.capital.increased.in.line.with.
sales.growth,.with.inventory.and.trade.and.other.
receivables.increasing.by.$10.8.million.and..
$0.7.million.respectively,.while.trade.and.
other.payables.decreased.$4.0.million..Capital.
expenditure.of.$149.3.million.included:
n. $28.7.million.for.the.acquisition.of.a.30%.interest.
in.APM;
n. $48.0.million.on.the.upgrade.of.Birkenhead,.
including.new.cement.mill.and.upgrade.of.ship.
loading.facilities;.and
n. $20.5.million.for.the.upgrade.of.Munster.kiln.5.and.
6.projects.
n. An.interim.dividend.in.respect.of.the.year.ended.
31.December.2012.of.7.5.cents.per.share.(fully.
franked).was.paid.on.8.October.2012..This.dividend.
totalled.$47,804,087.
Since.the.end.of.the.financial.year.the.Directors.
have.approved.the.payment.of.a.final.dividend.of.
9.0.cents.per.share.(fully.franked).to.be.paid.on..
16.April.2013.
State of affairs
No.significant.changes.occurred.in.the.state.of.
affairs.of.the.Group.during.the.financial.year.
Events subsequent to the end of the
financial year
As.at.the.date.of.this.report,.no.other.matter.or.
circumstance.has.arisen.since.31.December.2012.
that.has.significantly.affected,.or.may.significantly.
affect.the.Group’s.operations,.the.results.of.those.
operations,.or.the.Group’s.state.of.affairs.in.future.
financial.years.
Likely developments and expected results
of operations
Likely.developments.in.the.operations.of.the.Group,.
known.at.the.date.of.this.report,.and.the.expected.
results.of.those.operations,.have.been.covered.
generally.within.the.financial.report.
Further.information.on.likely.developments.in.the.
operations.of.the.Group.and.the.expected.results.
of.operations.in.the.future.financial.years.have.not.
been.included.in.this.report.because.the.Directors.
believe.it.would.be.likely.to.result.in.unreasonable.
prejudice.to.the.Group.
ADELAIDE BRIGHTON LTD AND ITS CONTROLLED ENTITIES
FOR THE YEAR ENDED 31 DECEMBER 2012
39
Environmental performance
Director profiles
Directors’ meetings
The.Group.is.subject.to.various.Commonwealth,.
State.and.Territory.laws.concerning.the.
environmental.performance.of.Adelaide.Brighton’s.
operations.
The.Group.monitors.environmental.performance.
by.site.and.business.division,.and.information.
about.the.Group’s.performance.is.reported.to.and.
reviewed.by.the.Group’s.senior.management,.the.
Board’s.Safety,.Health.&.Environment.Committee,.
and.the.Board.
The.Company.was.selected.by.the.Department.of.
Climate.Change.and.Energy.Efficiency.to.be.part.
of.its.2012.audit.program.for.compliance.with.the.
National.Greenhouse.Energy.Reporting.(NGER)..The.
Company’s.2010/11FY.NGER.report.was.audited.
by.a.party.selected.by.the.Department.and.an.
unqualified.audit.opinion.was.issued.
In.2012.the.Group’s.quarrying.activities.received.
three.penalty.infringement.notices,.for.$1,500.
each,.and.two.official.cautions..In.each.case,.
rectification.works.or.remedial.action.was.taken.
Cockburn.Cement.Limited.(“Cockburn”).has.an.
ongoing.dialogue.with.the.WA.Department.of.
Environment.and.Conservation.(“DEC”).concerning.
its.Munster.operations,.and.responds.as.required.
to.investigations.and.requests.for.information..DEC.
has.asserted.non-compliance.with.Cockburn’s.
environmental.licence.and.alleged.breaches.
of.the.Environment Protection Act 1986.(WA)..
Consequently.Cockburn.is.defending.legal.
proceedings.brought.by.DEC.in.the.Magistrates.
Court.of.WA.arising.from.the.conduct.of.a.
contractor.at.Munster.in.2010.
Cockburn.issued.a.Marine.Pollution.Report.to.the.
WA.Department.of.Transport.over.a.fluid.spillage.
at.Woodman.Point.in.December.2012,.for.which.
prompt.responsive.action.was.undertaken.and.no.
environmental.impact.was.observed.
Information.relating.to.Directors’.qualifications,.
experience.and.special.responsibilities.are.set.out.
on.page.32.and.33.of.the.Annual.Report.
The.number.of.Directors’.meetings.and.meetings.
of.committees.of.Directors.held.during.the.financial.
year.and.the.number.of.meetings.attended.by.each.
Director.is.as.follows:
Director
Board
Meetings
A
7.
7.
7.
L.V.Hosking.
R.D.Barro.
G.F.Pettigrew.
K.B.Scott-.
...Mackenzie.
7.
A.M.Tansey.
7.
M.P.Chellew.
7.
C.L.Harris1.
4.
A. Number.of.meetings.attended.
H
7.
7.
7.
7.
7.
7.
4.
Audit, Risk
and
Nomination
Corporate
and
Compliance Remuneration Governance
Committee
Committee
Committee
Independent
Directors’
Committee
A
4.
.
4.
.
4.
.
2.
H
4.
.
4.
.
4.
.
2.
A
4.
.
4.
4.
.
.
3.
H
4.
.
4.
4.
.
.
3.
A
3.
.
.
.
3.
.
1.
H
3.
.
.
.
3
.
1.
A
0.
.
0.
0.
0.
0.
H
0.
.
0.
0.
0.
0
SH&E
Committee
A
H
2.
2.
2
2.
2.
2.
.
H.. Number.of.meetings.held.during.period.of.office.
1. C.L.Harris.retired.on.17.May.2012
Throughout.2012,.the.general.business.of.the.
Corporate.Governance.Committee.was.dealt.with.
at.the.Company’s.Board.Meetings.and.no.separate.
committee.meetings.were.held.
Particulars.of.the.Company’s.corporate.governance.
practices,.including.the.roles.of.each.Board.
Committee,.are.set.out.on.pages.22.to.29.of.this.
report.
Full.details.of.the.interests.in.share.capital.of.
Directors.of.the.Company.are.disclosed.in.Note.
31.to.the.Financial.Statements.on.page.92.of.
this.report..Full.details.of.the.interests.in.Awards.
of.Directors.of.the.Company.are.set.out.in.the.
Remuneration.Report.on.pages.42.to.52.of.this.
report.
Director and executive remuneration
Directors’ interests
The.relevant.interest.of.each.Director.in.the.share.
capital.of.the.Company.at.the.date.of.this.report.is.
as.follows:.
Details.of.the.Company’s.remuneration.policies.and.
the.nature.and.amount.of.the.remuneration.of.the.
Directors.and.certain.senior.executives.are.set.out.
in.the.Remuneration.Report.on.pages.42.to.52.of.
this.report.
L.V.Hosking.
R.D.Barro.
G.F.Pettigrew.
K.B.Scott-Mackenzie.
A.M.Tansey.
M.P.Chellew.
Ordinary shares
Company Secretaries
4,739
193,307,036
7,739
5,000
5,000
448,366.
The.Company’s.principal.Company.Secretary.is.
Marcus.Clayton,.who.has.been.employed.by.the.
Company.in.the.two.separate.offices.of.General.
Counsel.and.Company.Secretary.since.24.February.
2003..He.is.a.legal.practitioner.admitted.in.South.
Australia.with.24.years.experience.
ADELAIDE BRIGHTON LTD AND ITS CONTROLLED ENTITIES
FOR THE YEAR ENDED 31 DECEMBER 2012
40
Two.other.employees.of.the.Company.also.hold.
the.office.of.Company.Secretary.to.assist.with.
secretarial.duties.should.the.principal.Company.
Secretary.be.absent:.the.Company’s.Chief.Financial.
Officer,.Michael.Kelly,.a.Certified.Practising.
Accountant.who.has.been.a.Company.Secretary.
since.23.November.2010.and.the.Group’s.
Corporate.Affairs.Adviser,.Luba.Alexander,.who.has.
been.a.Company.Secretary.since.22.March.2001.
Indemnification and insurance of officers
Rule.9.of.the.Company’s.constitution.provides.that.
the.Company.indemnifies.each.person.who.is.or.
who.has.been.an.“officer”.of.the.Company.on.a.full.
indemnity.basis.and.to.the.full.extent.permitted.by.
law,.against.liabilities.incurred.by.that.person.in.
their.capacity.as.an.officer.of.the.Company.or.of.a.
related.body.corporate.
Rule.9.1.of.the.constitution.defines.“officers”.to.
mean:
n. Each.person.who.is.or.has.been.a.Director,.
alternate.Director.or.executive.officer.of.the.
Company.or.of.a.related.body.corporate.of.the.
Company.who.in.that.capacity.is.or.was.a.nominee.
of.the.Company;.and
n. Such.other.officers.or.former.officers.of.the.
Company.or.of.its.related.bodies.corporate.as.the.
Directors.in.each.case.determine.
Additionally.the.Company.has.entered.into.Deeds.of.
Access,.Indemnity.and.Insurance.with.all.Directors.
of.the.Company,.its.wholly.owned.subsidiaries,.and.
nominee.Directors.on.the.Board.of.Independent.
Cement.&.Lime.Pty.Ltd..These.deeds.provide.for.
indemnification.on.a.full.indemnity.basis.and.to.the.
full.extent.permitted.by.law.against.all.losses.or.
liabilities.incurred.by.the.person.as.an.officer.of.the.
relevant.Company..The.indemnity.is.a.continuing.
obligation.and.is.enforceable.by.an.officer.even.
if.he.or.she.has.ceased.to.be.an.officer.of.the.
relevant.Company.or.its.related.bodies.corporate.
The.Company.was.not.liable.during.2012.under.
such.indemnities.
Rule.9.5.of.the.constitution.provides.that.the.
Company.may.purchase.and.maintain.insurance.
or.pay.or.agree.to.pay.a.premium.for.insurance.
for.“officers”.(as.defined.in.the.constitution).
against.liabilities.incurred.by.the.officer.in.his.or.
her.capacity.as.an.officer.of.the.Company.or.of.
a.related.body.corporate,.including.liability.for.
negligence.or.for.reasonable.costs.and.expenses.
incurred.in.defending.proceedings,.whether.civil.or.
criminal.and.whatever.their.outcome.
During.the.year.the.Company.paid.the.premiums.
in.respect.of.Directors’.and.Officers’.Liability.
Insurance.to.cover.the.Directors.and.Secretaries.of.
the.Company.and.its.subsidiaries,.and.the.General.
Managers.of.each.of.the.divisions.of.the.Group,.
for.the.period.1.May.2012.to.30.April.2013..Due.
to.confidentiality.obligations.under.that.policy,.the.
premium.payable.and.further.details.in.respect.of.
the.nature.of.the.liabilities.insured.against.cannot.
be.disclosed.
Proceedings on behalf of the Company
No.person.has.applied.for.leave.of.the.Court.to.
bring.proceedings.on.behalf.of.the.Company.or.to.
intervene.in.any.proceedings.to.which.the.Company.
is.a.party.for.the.purpose.of.taking.responsibility.on.
behalf.of.the.Company.for.all.or.any.part.of.those.
proceedings..The.Company.was.not.a.party.to.any.
such.proceedings.during.the.year.
Auditor’s independence declaration
A.copy.of.the.auditor’s.independence.declaration.
as.required.under.section.307C.of.the.Corporations
Act 2001.is.set.out.on.page.102.
Rounding off
The.Company.is.of.a.kind.referred.to.in.ASIC.Class.
Order.98/100.relating.to.the.“rounding.off”.of.
amounts.in.the.Directors’.report..In.accordance.
with.that.Class.Order,.amounts.in.the.financial.
report.and.Directors’.report.have.been.rounded.
off.to.the.nearest.one.hundred.thousand.dollars,.
unless.otherwise.stated.
Shares under option
The.details.of.shares.under.option.at.the.date.of.
this.report.are.set.out.in.Notes.30.and.31.
Non-audit services
Registered Office
The.registered.office.of.the.Company.is.Level.1,..
157.Grenfell.Street,.Adelaide,.SA.5000.
Dated.7.March.2013
Signed.in.accordance.with.a.resolution.of.the.
Directors.
Mark.Chellew
Managing.Director
The.Company.may.decide.to.employ.the.auditor.
on.assignments.additional.to.their.statutory.audit.
duties.where.the.auditor’s.experience.and.expertise.
with.the.Company.and.the.Group.are.important.
Details.of.the.amounts.paid.or.payable.to.
PricewaterhouseCoopers.for.audit.and.non-audit.
services.provided.during.the.year.are.set.out.in.
Note.32.to.the.Financial.Statements.on.page.93.of.
this.report.
The.Board.of.Directors.has.considered.the.position.
and,.in.accordance.with.the.advice.received.
from.the.Audit,.Risk.and.Compliance.Committee,.
is.satisfied.that.the.provision.of.the.non-audit.
services.is.compatible.with.the.general.standard.
of.independence.for.auditors.imposed.by.the.
Corporations Act 2001..The.Directors.are.satisfied.
that.the.provision.of.non-audit.services.by.the.
auditor,.as.set.in.note.32,.did.not.compromise.
the.auditor’s.independence.requirements.of.the.
Corporations Act 2001.for.the.following.reasons:
n. All.non-audit.services.have.been.reviewed.by.the.
Audit,.Risk.and.Compliance.Committee.to.ensure.
they.do.not.impact.the.impartiality.and.objectivity.of.
the.auditor;.and
n. None.of.the.services.undermine.the.general.
principles.relating.to.auditor.independence.as.set.
out.in.APES.110.Code.of.Ethics.for.Professional.
Accountants.
ADELAIDE BRIGHTON LTD AND ITS CONTROLLED ENTITIES
FOR THE YEAR ENDED 31 DECEMBER 2012
41
Remuneration report
The.Remuneration.Report.is.set.out.under.the.
following.main.headings:
Introduction.-.2012.overview
Section 1.-.Policy.and.structure.of.executive.
remuneration
Section 2.-.Group.performance.2012
Section 3.-.Managing.Director.and.senior.
executive.remuneration
Section 4.-.Non-executive.Directors’.fees
Introduction: 2012 overview
The.Directors.of.Adelaide.Brighton.Limited.present.
the.Remuneration.Report.for.Adelaide.Brighton.
Limited.(the.Company).and.the.Group.for.the.
year.ended.31.December.2012.in.accordance.
with.section.300A.of.the.Corporations Act.
This.Remuneration.Report,.which.forms.part.
of.the.Directors’.Report,.has.been.audited.by.
PricewaterhouseCoopers.
This.report.sets.out.remuneration.information.for.
key.management.personnel,.which.encompasses.
the.non-executive.Directors,.the.Managing.Director.
(and.CEO).and.members.of.the.senior.executive.
team,.and.explains.how.the.Group’s.performance.
for.the.2012.financial.year.has.driven.remuneration.
outcomes.for.senior.executives.
Summary of remuneration matters in 2012
The.Nomination.and.Remuneration.Committee.
has.taken.time.this.year.to.engage.with.and.listen.
to.a.range.of.our.shareholders.on.remuneration.
matters..We.have.sought.to.simplify.the.
Remuneration.Report.disclosures.again.this.year.
to.help.shareholders.understand.our.remuneration.
policies.and.practices.and.to.more.clearly.show.the.
alignment.between.executive.reward.and.Company.
performance.
The.Board.seeks.to.appropriately.motivate,.reward.
and.retain.our.senior.executive.team.in.the.context.
of.the.broader.community.sentiment.regarding.
executive.pay..In.this.context,.the.Board’s.current.
remuneration.policies.and.practice.reflect.the.fact.
that.our.executive.team.has.been.very.stable.over.
a.long.period.and.that.the.team.has.delivered.very.
strong.results.for.shareholders.over.an.extended.
period.
We.believe.that.our.remuneration.practices.
represent.a.balance.that.has.kept.our.successful.
executive.team.together.and.provided.rewards.for.
those.executives.over.a.number.of.years.reflecting.
their.performance.in.strategically.growing.revenue.
and.profit.which.has.resulted.in.strong.growth.
in.total.shareholder.return..The.Company’s.Total.
Shareholder.Return.(TSR).performance.has.placed.
the.Company.in.the.top.quartile.of.the.S&P/
ASX200.over.the.period.in.which.Mr.Chellew.
has.been.Managing.Director..The.Board.believes.
that.the.Managing.Director’s.total.remuneration.
reflects.his.and.the.Group’s.outstanding.long.term.
performance,.particularly.in.challenging.market.
conditions.over.the.past.three.years.
A.summary.of.the.key.remuneration.outcomes.for.
the.2012.financial.year.and.certain.other.changes.
approved.by.the.Board.is.set.out.below..
Fixed remuneration
Following.a.two.year.freeze.on.fixed.remuneration.
for.the.Managing.Director.during.2010.and.2011,.
the.Nomination.and.Remuneration.Committee.
reviewed.the.fixed.remuneration.of.the.Managing.
Director.and.the.senior.executives.
Effective.1.January.2012,.the.Managing.Director’s.
fixed.remuneration.was.increased.by.12%.to.
$1,680,000..While.the.Board.recognises.that.this.is.
a.sizeable.increase,.it.came.after.a.two.year.freeze.
on.his.remuneration,.is.reflective.of.his.outstanding.
performance.record.over.the.previous.10.years.and.
places.the.Managing.Director.at.the.75th.percentile.
of.his.peer.group..
Short Term Incentive (STI)
As.in.previous.years,.the.annual.short.term.
incentive.comprised.80%.financial.targets.and.20%.
functional.targets.in.2012..As.a.result.of.generating.
a.solid.profit,.which.was.above.110%.of.budget,.
in.an.unpredictable.economic.environment,.the.
financial.target.was.met.at.Tier.4,.resulting.in.STI.
opportunities.for.the.Managing.Director.and.senior.
executives.of.100%.and.80%.respectively.
Functional.targets.for.the.Managing.Director.and.
senior.executives.were.met.at.between.65%.and.
89%.for.the.year..
Long Term Incentive (LTI)
As.foreshadowed.last.year,.as.part.of.the.transition.
to.making.annual.grants.under.the.Executive.
Performance.Share.Plan.with.a.single.four.year.
performance.period,.a.transitional.Award.was.
made.under.the.Plan.in.2012..This.comprised.
two.tranches,.one.eligible.to.vest.in.2015.and.the.
other.in.2016,.both.vesting.subject.to.achieving.
relative.total.shareholder.return.and.earnings.per.
share.growth.targets..Awards.have.previously.been.
granted.in.batches.comprising.three.tranches.
During.2012,.Tranche.1.of.the.2010.Awards.were.
tested.in.May.2012..These.vested.at.99.3%,.having.
exceeded.the.75th.percentile.against.the.relative.
total.shareholder.return.performance.condition.and.
having.just.missed.maximum.vesting.against.the.
annual.growth.in.EPS.target.of.7.9%.per.annum.
(actual.EPS.growth.over.the.performance.period.
was.7.8%)..
Non-executive Directors
The.fees.payable.to.non-executive.directors.for.
the.2012.financial.year.increased.from.$890,719.
to.$906,572,.within.the.maximum.aggregate.
amount.of.$1,100,000.per.annum.approved.by.
shareholders.at.the.2010.Annual.General.Meeting..
ADELAIDE BRIGHTON LTD AND ITS CONTROLLED ENTITIES
FOR THE YEAR ENDED 31 DECEMBER 2012
42
Overview of remuneration components
An.overview.of.the.components.of.remuneration.for.Directors.and.senior.executives.is.set.out.below:.
Remuneration
component
Directors
Non-Executive
Executive
Senior
Executives
Discussion in
Remuneration
Report
pages.51,.52
pages.46,.51
pages.46-48
.
.
pages.48-50
pages.51,.52
page.50
O.
P.
P.
P.
P.
P.
O.
P.
P.
P.
P.
P.
transitional.2012.Award.(granted.in.May.2012).
was.considered.necessary.to.achieve.continuity.
in.the.Company’s.LTI.Plan.following.expiry.of.the.
last.tranche.of.the.2010.Award.in.2014,.while.
moving.to.a.schedule.under.which.annual.grants.of.
Awards.are.made.4.years.before.they.are.tested..
The.2013.Award.will.be.first.annual.grant.made.to.
senior.executives,.in.May.2013.-.subject.to.a.single.
4.year.performance.period,.and.with.testing.and.
vesting.in.May.2017..Shareholder.approval.will.be.
sought.at.the.2013.Annual.General.Meeting.for.LTI.
Awards.proposed.to.be.granted.to.the.Managing.
Director.in.May.2013.
Section 1 - Policy and structure of
executive remuneration
1.1 Executive remuneration policy and
objectives
.The.Company’s.remuneration.strategy.and.
policy.are.set.by.the.Board.and.overseen.by.the.
Nomination.and.Remuneration.Committee.
.In.determining.the.executive.remuneration.
framework,.the.Board.has.adopted.a.policy.that.
aims.to:
n. be.competitive.in.the.markets.in.which.the.
Group.operates.in.order.to.attract,.motivate.and.
retain.a.highly.capable.executive.team.(and.each.
individual’s.remuneration.is.set.with.reference.
to.the.degree.of.individual.performance,.role,.
responsibility.and.future.potential.within.the.Group);
n. drive.leadership.performance.and.behaviours.that.
reinforce.the.Group’s.short.and.long.term.strategic.
objectives;
n. provide.a.common.interest.between.executives.and.
shareholders.by.linking.the.rewards.that.accrue.to.
executives.to.the.creation.of.value.for.shareholders;
n. have.regard.to.market.practice.and.market.
conditions;.and
n. provide.transparency.and.clarity.on.what.is.paid,.to.
whom.and.on.what.basis.remuneration.has.been.
paid.
n. Non-executive Director remuneration -.The.
.
Nomination.and.Remuneration.Committee.reviewed.
the.level.of.fees.for.membership.of.the.Board.and.
of.the.Board’s.committees.during.2012..The.Board.
has.approved.a.3.5%.increase.to.the.level.of.these.
fees.effective.from.1.January.2013,.to.be.in.line.
with.market.median.rates.
.The.remuneration.policy.seeks.to.support.the.
Group’s.objective.to.be.perceived.as.“an.employer.
of.choice”.by:
n. offering.remuneration.levels.which.are.competitive.
relative.to.those.offered.by.comparable.employers;.
and
.
.As.the.above.outcomes.do.not.form.part.of.the.
remuneration.of.executives.in.2012,.further.details.
will.be.reported.in.next.year’s.Remuneration.Report.
for.the.2013.financial.year.
n. providing.strong.and.transparent.links.between.
individual.and.Group.performance.and.rewards.
Fixed.
remuneration
Fees.
.
Salary.
At-risk.
remuneration.
Short.term.
incentive
.
.
Post-.
employment
.
.
.
Long.term.
incentive
Superannuation.
Notice.periods.&.
termination.
payments
P.
O.
O.
O.
P.
O.
Key activities during 2012 and outcomes
for 2013
n. Senior executive remuneration -.During.
the.latter.part.of.2012,.the.Nomination.and.
Remuneration.Committee.undertook.a.review.
of.senior.executive.remuneration.(including.the.
Managing.Director’s.remuneration).and.has.
approved.a.modest.3.5%.increase.to.the.fixed.
remuneration.of.all.senior.executives.which.became.
effective.on.1.January.2013.
n. Managing Director remuneration -.Following.
the.review.of.the.Managing.Director’s.total.
remuneration,.the.Board.has.determined.that.the.
Managing.Director’s.fixed.remuneration.for.2013.
also.be.increased.by.3.5%.(to.$1,738,800.per.
annum).
n. LTI -.As.previously.disclosed,.following.a.
comprehensive.review.of.the.structure.of.the.LTI.
Plan.in.2011,.the.Board.decided.to.transition.
from.its.practice.of.making.a.grant.of.three.years.
worth.of.LTI.Awards.to.senior.executives.every.
three.years,.to.annual.grants.of.Awards.over.a.
performance.period.of.4.years.from.2013..The.
ADELAIDE BRIGHTON LTD AND ITS CONTROLLED ENTITIES
FOR THE YEAR ENDED 31 DECEMBER 2012
43
.
.The.Board.aims.to.achieve.a.balance.between.fixed.and.performance.related.(or.‘at-risk’).components.of.remuneration.for.each.role.and.seniority.level..The.diagram.
below.shows.the.policy.implementation.and.remuneration.arrangements.as.they.apply.to.executives:
.
.
Be.competitive.in.the.market.to.attract.and.
retain.talent,.and.motivate.to.achieve..
outstanding.performance
Fixed.remuneration
Between.40.-.60%.of.total.target.remuneration
.
n..Benchmarked.to.a.competitive.market.rate.
for.comparable.role..Set.with.reference.to.
the.long.term.individual.performance,.role,.
responsibility.and.potential.
n..Executive.can.take.in.form.agreed.with.the.
Company.(in.general,.this.is.in.the.form.of.
cash,.car.and.superannuation.and.includes..
the.cost.of.fringe.benefits.tax).
.
Link.reward.to.the.creation.of.shareholder.value.
to.encourage.the.achievement.of.growth.of.the.
Company’s.business
.
Reinforce.the.Company’s.short.and.long.term
objectives.by.conducting.business.in.line.with
the.Company’s.purpose,.principles.and
commitments
.
Performance-based.remuneration.-.‘at.risk’
.
Performance-based.remuneration
Between.40.-.60%.of.total.target.remuneration
Between.40.-.60%.of.total.target
.STI
.LTI
Performance.measured.by:
n. ‘Financial Target’.(80%.of.STI.opportunity).relating.
to.Group.performance.against.budget;.and
n. ‘Functional Targets’.(20%.of.STI.opportunity).
relating.to.personal.performance.
Performance.measures.based.on.EPS.and.TSR.
link.executive.reward.with.key.performance.
drivers.which.underpin.sustainable.growth.in.
shareholder.value.
1.2 Responsibility for setting remuneration
Section 2 - Group performance 2012
The.Nomination.and.Remuneration.Committee.
is.responsible.for.reviewing.and.making.
recommendations.to.the.Board.on.Director.and.
executive.remuneration.policy.and.structure.
The.Board,.based.on.the.recommendations.of.
the.Nomination.and.Remuneration.Committee,.
establishes.the.remuneration.of.the.Managing.
Director,.including.his.participation.in.the.short..
term.and.long.term.incentive.schemes.
The.Nomination.and.Remuneration.Committee,.
based.on.the.recommendations.of.the.Managing.
Director,.approves.the.remuneration.of.senior.
executives.reporting.to.the.Managing.Director,.
including.their.participation.in.both.short.term.and.
long.term.incentive.schemes.
The.Nomination.and.Remuneration.Committee.
follows.protocols.around.the.engagement.and.use.
of.external.remuneration.consultants.to.ensure.
on-going.compliance.with.executive.remuneration.
legislation..This.is.to.ensure.that.any.remuneration.
recommendation.from.an.external.consultant.is.free.
from.the.undue.influence.by.any.member.of.the.
Company’s.key.management.personnel.to.whom.
it.relates.
In.2012,.the.Committee.undertook.an.internal.
review.of.the.remuneration.of.senior.executives.
and.non-executive.Directors,.and.also.engaged.
jws.consulting.to.provide.independent.governance.
and.legal.advice.in.relation.to.senior.executive.
remuneration.
TSR.measures.the.change.in.shareholder.wealth.
over.time.-.being.the.dividends.paid.by.the.
Company,.changes.in.share.price.and.any.return.of.
capital.over.the.relevant.period.
EPS.divides.earnings.by.the.number.of.shares.on.
issue.(which.includes.the.effect.of.capital.raisings).
The.table.below.shows.details.of.dividends.paid,.
the.closing.price.of.Adelaide.Brighton.shares.on..
31.December.in.each.of.the.past.four.years.and.
details.of.operating.cash.flow.
2.1 The link between performance and the
long term incentive (LTI)
The.Company’s.long.term.incentive.arrangements.
for.the.Managing.Director.and.senior.executives.
(described.in.section.3.4.below).are.judged.against.
two.performance.measures.-.total.shareholder.
return.(TSR).and.earnings.per.share.(EPS)..The.
Board.believes.these.performance.conditions.
align.executive.rewards.with.the.long.term.
creation.of.shareholder.wealth,.through.which.
senior.executives.focus.on.medium.to.longer.term.
strategic.decision.making.
Shareholders’ wealth improvement from year 2009 to year 2012
Financial year ended 31 December
2012
Closing.share.price.($.as.at.31.December).
3.12.
Total.dividends.per.share.(cents).
Franked.dividends.
16.5.
100%.
2011
2.89.
16.5.
100%.
2010
3.30.
21.5.
100%.
2009
2.75
13.5
100%
Operating.cash.flow.
$186.5m.
$151.3m.
$188.5m.
$188.1m
Earning.per.share.–.EPS.(cents).
24.2.
23.3.
23.9.
20.4
As.can.be.seen.from.the.table.above,.the.Company.
has:
n. Generated.an.average.annual.increase.in.EPS.of.
5.9%.since.2009;.and
n. Maintained.a.strong.dividend.payout.ratio.to.profit.
earned.
Tranche.1.of.the.2010.Awards.granted.to.senior.
executives.was.measured.at.99.3%.based.on.
performance.against.the.applicable.TSR.and.EPS.
performance.conditions.measured.over.period.
commencing.1.January.2010.and.ending.on..
31.December.2011.
ADELAIDE BRIGHTON LTD AND ITS CONTROLLED ENTITIES
FOR THE YEAR ENDED 31 DECEMBER 2012
44
Looking.at.the.Company’s.long.term.performance,.the.graph.below.shows.the.performance.of.Adelaide.
Brighton’s.share.price,.with.dividends.reinvested,.versus.the.S&P/ASX200.Accumulation.Index.from.1.January.
2002.to.31.December.2012..The.Adelaide.Brighton.share.price.has.outperformed.S&P/ASX200.Accumulation.
Index,.reflecting.the.strength.of.its.core.markets.in.the.resources.and.construction.materials.sectors.and.the.
success.of.the.Group’s.strategy.
The.Group’s.committed.executive.team,.has.
overseen.a.consistent.strategy.over.the.four.year.
period.shown.in.the.table.above,.have.delivered.
strong.results.over.the.past.four.years:
n. an.improvement.in.EBIT.from.$185.3.million.in.
2009.to.$225.6.million.in.2012,.a.21.7%.increase;
ABC.Share.Price.
(with.dividends.
reinvested)
n. PBT.increase.from.$168.6.million.in.2009.to.
$209.2.million.in.2012,.a.24.1%.increase;.and
n. an.increase.in.NPAT.from.$123.1.million.in.2009.to.
$154.1.million.in.2012,.a.25.2%.increase.
S&P/
ASX200.Accum
As.a.result.of.securing.long.term.customer.
contracts,.supply.contracts.for.clinker.and.the.
successful.implementation.of.the.Company’s.
capital.expenditure.program,.management.is.
confident.that.the.Group.is.strategically.well.
positioned.to.continue.to.maximise.shareholder.
returns.
750%
700%
650%
600%
550%
500%
450%
400%
350%
300%
250%
200%
150%
100%
50%
0%
-50%
2
0
.
n
a
J
2
0
.
l
u
J
3
0
.
n
a
J
3
0
.
l
u
J
4
0
.
n
a
J
4
0
.
l
u
J
5
0
.
n
a
J
5
0
.
l
u
J
6
0
.
n
a
J
6
0
.
l
u
J
7
0
.
n
a
J
7
0
.
l
u
J
8
0
.
n
a
J
8
0
.
l
u
J
9
0
.
n
a
J
9
0
.
l
u
J
0
1
.
n
a
J
0
1
.
l
u
J
1
1
.
n
a
J
1
1
.
l
u
J
2
1
.
n
a
J
2
1
.
l
u
J
3
1
.
n
a
J
Source:.ASX/First.Advisers.Pty.Ltd
2.2 The link between annual earnings and
the short term incentive (STI)
executives.and.100%.of.fixed.remuneration.for.the.
Managing.Director.
In.2012,.Adelaide.Brighton.reported.record.sales.
revenue.growth,.an.increase.in.earnings.before.
interest.and.tax.(EBIT).and.net.profit.after.tax.
(NPAT).as.demand.from.projects.offset.weakness.in.
the.residential.sector.
The.Group’s.profit.before.tax.(PBT).for.2012.was.
$209.2.million..The.Managing.Director.and.senior.
executives.satisfied.the.Financial.Component.of.the.
performance.conditions.applicable.to.the.2012.STI.
as.the.Group.achieved.above.110%.of.budgeted.
PBT.after.exceptional,.abnormal.and.extraordinary.
items.(no.adjustment.for.exceptional,.abnormal.and.
extraordinary.items.was.made.in.2012)..Tier.4.of.
the.STI.was.reached,.resulting.in.an.STI.opportunity.
equal.to.80%.of.fixed.remuneration.for.senior.
Earnings improvement from 2009 to 2012
In.accordance.with.the.STI.program.detailed.
further.in.section.3.3.below,.80%.of.the.maximum.
STI.opportunities.were.payable.based.on.the.
achievement.of.Financial.Targets.and.20%.of.
the.maximum.Functional.Target.opportunities.
were.determined.on.each.individual’s.success.in.
achieving.personal.targets..The.achievement.of.
these.personal.targets.by.the.individuals.varied.
between.65%.and.89%.of.the.Functional.Targets.
The.table.below.sets.out.the.Group’s.performance.
over.a.number.of.key.performance.indicators.-.
sales.revenue,.earnings.before.interest.and.tax.
(EBIT),.EBIT.Margin,.profit.before.tax.(PBT).and.net.
profit.after.tax.(NPAT).-.over.the.past.four.financial.
years.
Financial year ended 31 December
2012
2011
2010
Sales.revenue.-.$.million.
1,176.2.
1,100.4.
1,072.9.
Earnings.before.interest.and.tax.(EBIT).-.$.million.
225.6.
223.4.
216.2.
2009
987.2
185.3
EBIT.margin.-.%.
19.2%.
20.3%.
20.2%.
18.8%
Profit.before.tax.(PBT).-.$.million.
Net.profit.after.tax.(NPAT).-.$.million.
209.2.
154.1.
206.4.
148.4.
202.2.
151.5.
168.6
123.1
ADELAIDE BRIGHTON LTD AND ITS CONTROLLED ENTITIES
FOR THE YEAR ENDED 31 DECEMBER 2012
45
Section 3 - Managing Director and senior
executive remuneration
The.following.remuneration.information.is.provided.
for.the.Managing.Director.and.members.of.the.
senior.executive.team.on.the.basis.that.these.
executives.had.the.authority.and.responsibility.for.
planning,.directing.and.controlling.the.activities.
of.the.Company.and.the.Group.during.the.2012.
financial.year..These.individuals.are.the.key.
management.personnel.(KMP).for.the.2012.
financial.year.
Executives
Position
Managing Director
M.P.Chellew.
Senior executives
G.Agriogiannis.
M.Brydon.
M.R.D.Clayton.
M.Kelly.
S.B.Rogers.
S.J.Toppenberg.
Managing.Director.and.CEO
Executive.General.Manager,.Concrete.and.Aggregates
Executive.General.Manager,.Cement.and.Lime
General.Counsel.and.Company.Secretary
Chief.Financial.Officer
Executive.General.Manger,.Concrete.Products
Executive.General.Manger,.Human.Resources
3.1 Components of executive remuneration
The.executive.remuneration.framework.for.the.
Managing.Director.and.all.senior.executives.
consists.of.the.following.components:
Fixed.remuneration.is.reviewed.annually.under.
normal.circumstances,.as.provided.under.
the.Service.Agreements.for.executives..Fixed.
remuneration.is.benchmarked.against.comparable.
roles.within.comparable.companies.
n. Fixed remuneration -.guaranteed.base.salary.
(inclusive.of.superannuation).expressed.as.a.dollar.
amount.that.the.executive.may.take.in.a.form.
agreed.with.the.Company.
n. Performance based remuneration -.incentive.
or.‘at-risk’.components.which.comprise.an.annual.
short.term.incentive.and.long.term.incentives,.
awarded.at.set.levels.for.target.or.stretch.
(outstanding).performance.
The.Board.notes.that.Mr.Chellew’s.fixed.
remuneration.has.been.set.above.the.median.
of.his.ASX.peers..This.is.in.accordance.with.
the.Company’s.remuneration.policy.(detailed.in.
section.1.1).on.the.basis.that.the.Company.and.its.
shareholders.have.enjoyed.outstanding.returns.over.
the.period.Mr.Chellew.has.been.Managing.Director.
3.3 At-risk remuneration - Short Term
Incentive (STI)
3.2 Fixed remuneration
3.3.1 Summary of STI program
The.amount.of.fixed.remuneration.for.an.individual.
executive.is.set.with.regard.to.the.size.and.nature.
of.an.executive.role,.the.long.term.performance.
of.an.individual.and.his.or.her.future.potential.
within.the.Group..Executives.may.elect.to.have.
a.combination.of.benefits.provided.out.of.their.
fixed.remuneration,.including.cash,.additional.
superannuation.and.the.provision.of.a.motor.
vehicle..The.fixed.remuneration.of.the.Managing.
Director.and.senior.executives.for.2012.is.outlined.
in.section.3.6.
What is the STI and who participates?
The.STI.program.links.specific.annual.performance.
targets.(predominantly.financial).with.the.
opportunity.to.earn.cash.incentives.based.on.a.
percentage.of.fixed.remuneration.
Participation.in.the.STI.is.generally.offered.to.the.
Managing.Director.and.senior.executives.who.
are.able.to.have.a.direct.impact.on.the.Group’s.
performance.against.the.relevant.performance.
hurdles.
What is the maximum amount the executives can earn?
Maximum STI opportunity
% of fixed remuneration
2012 Group performance against budget
Managing Director
Senior executives
Initial.Target.(Tier.1).
90%.-.99%.
Target.(Tier.2).
100%.
12%.
60%.
10%
50%
Partial.Stretch.(Tier.3).
101%.-.109%.
64%.-.96%.
53%.-.77%
Stretch.(Tier.4).
110%.or.greater.
100%.
80%
ADELAIDE BRIGHTON LTD AND ITS CONTROLLED ENTITIES
FOR THE YEAR ENDED 31 DECEMBER 2012
46
How are performance criteria set?
The.performance.criteria.are.set.by.the.Board.and.
agreed.with.the.executive,.in.general,.by.the.end.of.
February.in.each.year.
What were the performance conditions for the
2012 STI program?
For.the.2012.financial.year,.the.performance.
conditions.comprised.a.mix.of.financial.and.non-
financial.performance.measures:
1. 80%.is.tested.on.the.Group’s.performance.against.
budget.(Financial.Target);.and
2. 20%.is.tested.on.both.the.Group’s.performance.
against.its.budget.and.the.senior.executive/
Managing.Director.meeting.personal.targets.agreed.
with.the.Managing.Director/Board.(Functional.
Targets).
Accordingly,.the.cash.bonus.is.dependent.on.both.
the.Group’s.performance.and.the.individual’s.
performance.
Why were these performance conditions chosen?
The.key.financial.measure.used.is.Profit.Before.Tax,.
which.the.Board.believes.is.an.appropriate.annual.
performance.target,.aligned.to.Group.budget.
Profit.Before.Tax.(PBT).is.defined.for.STI.purposes.
as.net.profit.after.interest.but.before.income.tax.
expense.which.may.be.adjusted.for.exceptional,.
abnormal,.extraordinary.items.and.the.effect.of.
acquisitions.made.during.the.financial.period..
A.percentage.of.the.executive’s.2012.STI.is.
also.subject.to.additional.personal.(functional).
performance.hurdles.appropriate.to.each.
executive’s.role.
What are personal or functional performance
hurdles?
Personal.or.Functional.(performance).Targets.for.
each.financial.year.are.agreed.with.the.Managing.
Director.and.the.senior.executives,.and.are.set.
to.drive.leadership.performance.and.behaviours.
consistent.with.achieving.the.Group’s.objectives.
These.include.the.development.and.execution.of.
strategic.plans,.investigations.and.implementation.
of.value.adding.growth.options.(including.
acquisitions.and.organic.growth.initiatives),.
safety.performance,.succession.planning,.
individual.business.unit.profit.targets,.negotiation.
of.certain.significant.long.term.and.short.term.
customer.and.supply.contracts,.compliance.with.
regulatory.authorities’.requirements.and.other.
specific.personal.or.functional.performance.
objectives.which.align.the.interests.of.Company.
executives.and.shareholders..Further.details.of.
the.achievement.of.these.performance.targets.by.
senior.executives.in.2012.are.set.out.in.section.
3.3.2.below..
How is performance against the performance
conditions assessed?
In.respect.of.the.Financial.Targets,.the.Board.
reviews.the.budgeted.targets.for.the.year,.focusing.
on.the.PBT.financial.measure,.and.assesses.the.
degree.to.which.the.Group.met.these.targets..
Where.applicable,.abnormal,.extraordinary.or.
unanticipated.factors,.which.may.have.affected.
the.Group’s.performance.during.the.year,.are.
considered.and.where.necessary,.the.Group’s.
performance.is.adjusted.for.the.purposes.of.
assessing.performance.against.the.target.
The.Board.also.considers.the.Nomination.and.
Remuneration.Committee’s.assessment.of.the.
Managing.Director’s.performance.against.the.
agreed.Functional.Targets,.and.that.of.the.senior.
executives.(based.on.the.recommendation.of.the.
Managing.Director)..
When is performance against criteria determined
and the cash award paid?
Assessment.of.performance.against.the.
performance.hurdles.for.the.relevant.year.is.
determined.at.the.first.meeting.of.the.Nomination.
and.Remuneration.Committee.and.the.Board.
subsequent.to.the.balance.date,.in.conjunction.with.
finalisation.of.the.Group’s.full.year.results.(generally.
in.February),.and.is.normally.paid.to.the.executive.
by.March..
What happens to the STI award on cessation of
employment?
In.general,.where.an.executive’s.employment.
is.terminated.by.the.Company.(other.than.for.
cause).during.the.course.of.a.performance.year,.
the.executive.is.entitled.to.a.pro-rata.STI.for.that.
proportion.of.the.current.financial.year.elapsed.
on.the.termination.date..In.general,.where.an.
executive’s.employment.ceases.by.reason.of.
resignation,.any.STI.opportunity.lapses.
3.3.2 2012 STI outcomes
As.indicated.in.section.2.2,.the.Financial.Target.
component.of.the.STI,.comprising.80%.of.the.
opportunity.is.assessed.against.the.Group’s.PBT,.
which.at.$209.2.million,.achieved.above.110%.of.
budget..The.remaining.20%.of.the.STI.opportunity.
which.is.assessed.against.Functional.Targets.
were.determined.on.each.individual’s.success.in.
achieving.personal.targets..During.2012,.the.senior.
executives.accomplished.a.number.of.objectives.
and.projects.which.contributed.to.the.Group’s.
performance.in.2012.and.which.will.reinforce.
future.performance..These.include:
n. significant.enhancement.in.safety.performance.
across.the.Group’s.business.divisions;
n. negotiating.and.executing.cement.and.lime.supply.
arrangements.with.major.customers.in.South.
Australia.and.Western.Australia;
n. concluding.negotiations.and.executing.contracts.
with.the.Company’s.Independent.Cement.&.Lime.
joint.venture.for.cement.supply.arrangements.in.
New.South.Wales.and.Victoria;
n. developing.relationships.leading.to.the.Group.
executing.agreements.securing.new.long.term.
commitments.for.the.Group’s.imports.of.clinker,.
which.underwrite.the.Group’s.import.strategy;
n. successful.commissioning.of.a.number.of.capital.
works.in.the.Group’s.Cement.and.Lime.Division.
resulting.in.improved.efficiency,.sustainability,.
environmental.and.operational.performance,.
including.the.Munster.Kiln.6.Bag.House.Filter.
and.Cooler.Bag,.and.resulting.in.enhanced.
product.offerings,.including.the.Cement.Mill.7.at.
Birkenhead.and.the.slag.blending.facility.at.Darwin;
n. extension.of.approvals.for.the.Austen.Quarry;.and
n. successful,.low.cost.implementation.of.SAP.in.the.
Group’s.Concrete.and.Aggregates.Division.
These.accomplishments.contributed.to.individuals.
achieving.their.personal.targets,.which.varied.
between.65%.and.89%.of.the.Functional.Targets.
Overall,.the.achievement.of.the.Financial.and.
Functional.Targets.resulted.in.the.STI.opportunity.
being.awarded.at.Tier.4.of.the.STI.
Specific.information.relating.to.the.percentage.of.
the.2012.and.2011.STI.which.was.paid.and.the.
percentage.that.was.forfeited.for.the.Managing.
Director.and.senior.executives.of.the.Company.and.
Group.is.set.out.in.the.table.below.
ADELAIDE BRIGHTON LTD AND ITS CONTROLLED ENTITIES
FOR THE YEAR ENDED 31 DECEMBER 2012
47
STI for the 2012 and 2011 financial years
Managing
Director
& senior
executives5
STI opportunity
as % of fixed
remuneration1
Year
Actual STI
as a % of STI
opportunity1
% of STI
opportunity1
payment not
achieved2
%
%
M.P.Chellew.
.
G.Agriogiannis4.
.
M.Brydon.
.
M.R.D.Clayton.
.
M.Kelly.
.
S.B.Rogers.
.
S.J.Toppenberg.
.
1. STI.opportunity.for.2012.is.based.on.Tier.4.stretch.(2011.Target.STI.was.at.partial.stretch.STI.Tier.3).
100.0
96.0.
80.0
77.0.
80.0
77.0.
80.0
77.0.
80.0
77.0.
80.0
77.0.
80.0
77.0.
2012
2011.
2012
2011.
2012
2011.
2012
2011.
2012
2011.
2012
2011.
2012
2011.
97.7
98.6.
93.0
96.4.
97.1
98.2.
97.8
98.8.
97.7
98.5.
93.8
92.2.
97.4
97.8.
%
2.3
1.4.
7.0
3.6.
2.9
1.8.
2.2
1.2.
2.3
1.5.
6.2
7.8.
2.6
2.2.
Actual STI
payment3
$
1,641,360.
1,419,840.
340,752.
163,302
714,656.
571,642
367,728.
338,919
511,948.
467,205
341,057.
310,102
312,070.
289,928
2. Where.the.actual.STI.payment.is.less.than.maximum.potential,.the.difference.is.forfeited.and.does.not.become.payable.in.subsequent.years.
3. 2012.and.2011.STI.constituted.a.cash.bonus.granted.during.2012.and.2011.respectively..The.2012.STI.was.determined.in.conjunction.with.the.
finalisation.of.2012.results.and.paid.in.February.2013..Similarly,.the.2011.STI.was.determined.in.conjunction.with.the.finalisation.of.2011.results.and.
paid.in.February.2012.
4. G.Agriogiannis.commenced.employment.on.27.June.2011.
5. M.A.Finney.ceased.employment.effective.9.May.2011.and.did.not.receive.a.2011.STI.payment.
3.4 At-risk remuneration - Long Term
Incentive (LTI)
3.4.1 Summary of the Executive
Performance Share Plan
What is the Plan and who participates?
The.Group’s.LTI.arrangements.are.designed.to.
link.executive.reward.with.sustainable.growth.in.
shareholder.value.
The.Plan.provides.for.grants.of.Awards.to.eligible.
executives,.each.Award.being.an.entitlement.to.
a.fully.paid.ordinary.share.in.Adelaide.Brighton.
Ltd,.subject.to.the.satisfaction.of.performance.
conditions,.on.terms.and.conditions.determined.by.
the.Board.
Participation.in.the.Plan.is.generally.offered.to.the.
Managing.Director.and.executives.who.are.able.
to.influence.the.generation.of.shareholder.wealth.
and.thus.have.a.direct.impact.on.the.Group’s.
performance.against.the.relevant.performance.
hurdles.
The.current.Awards.that.have.been.issued.under.
the.Plan.are.the.“2010.Awards”.and.“2012.
Awards”..The.Board.intends.to.make.a.grant.as.the.
“2013.Awards’’.in.May.2013..
What are the performance conditions and why were
they chosen?
Awards.are.measured.against.a.TSR.performance.
condition.(as.to.50%.of.each.Award).and.an.EPS.
performance.condition.(as.to.the.other.50%).
The.Board.considers.these.performance.conditions.
to.be.appropriate.because.they.ensure.that.a.
proportion.of.each.executive’s.remuneration.is.
linked.to.the.generation.of.profits.(expressed.on.a.
per.share.basis).and.shareholder.value.
In.particular,.the.use.of.a.relative.TSR.based.hurdle:
n. ensures.alignment.between.comparative.
shareholder.return.and.reward.for.the.executive;.
and
n. provides.a.relative,.external.market.performance.
measure,.having.regard.to.those.companies.with.
which.the.Group.competes.for.capital,.customers.
and.talent.
An.absolute.EPS.growth.based.hurdle:
n. links.executive.reward.to.a.fundamental.indicator.of.
financial.performance;.and
n. links.directly.to.the.Group’s.long.term.objectives.of.
maintaining.and.improving.earnings.
ADELAIDE BRIGHTON LTD AND ITS CONTROLLED ENTITIES
FOR THE YEAR ENDED 31 DECEMBER 2012
48
The.use.of.dual.performance.measures.combines.a.
strong.external.market.based.focus.through.share.
price.growth.and.dividends.(TSR),.and.a.non-
market.based.measure.aimed.at.driving.improved.
Company.results.and.the.creation.of.shareholder.
wealth.(EPS).
What happens on the exercise of Awards?
Awards.become.exercisable.(subject.to.satisfaction.
of.relevant.performance.conditions).on.1.May.of.the.
relevant.year..Shares.are.delivered.to.the.executive.
on.exercise.of.the.Awards..Awards.are.granted.at.
no.cost.to.the.executive.and.no.amount.is.payable.
by.the.executive.on.exercise.of.the.Awards..See.
section.3.4.2.below.for.details.of.the.relevant.
earliest.exercise.date.of.Awards.and.expiry.date.of.
unexercised.Awards.for.the.2010.Awards,.2012.
Awards.and.2013.Awards.
Is re-testing permitted?
No..Re-testing.of.either.of.the.performance.
conditions.applicable.to.a.tranche.of.Awards.is.not.
permitted.
What happens to Awards that are not yet
exercisable on cessation of employment?
If.an.executive.resigns.or.is.terminated.for.cause,.
the.Awards.in.respect.of.any.tranche.that.is.not.
exercisable.will.generally.be.forfeited.
The.Plan.Rules.provide.that.in.other.circumstances.
a.pro.rata.number.of.Awards,.reflecting.the.part.
of.the.LTI.earned.or.accrued.up.to.termination,.
may.become.exercisable.either.at.the.time.of.
termination.of.employment.or.at.the.end.of.the.
original.performance.period.applicable.to.a.tranche.
In.addition,.a.number.of.executives.with.pre-2009.
contracts.have.a.specific.entitlement.built.into.their.
Service.Agreement,.which.entitles.them.to.pro.rata.
vesting.of.Awards.in.the.event.of.Company.initiated.
termination.of.employment..
Is there a claw-back provision?
Yes..The.Plan.Rules.allow.the.Board.to.claw-back.
any.Awards.on.offer.to.an.executive.and.to.make.
adjustments.to.any.unvested.Awards,.if.considered.
appropriate.
What other conditions apply to the Awards?
An.executive’s.entitlement.to.shares.under.an.
Award.may.also.be.adjusted.to.take.account.of.
capital.reconstructions.and.bonus.issues..In.the.
event.of.a.takeover.bid.(or.other.transaction.likely.
to.result.in.a.change.in.control.of.the.Company),.an.
executive.will.only.be.allowed.to.exercise.his.or.her.
Awards.to.the.extent.determined.by.the.Board.as.
provided.in.the.Plan.Rules.
The.Plan.Rules.contain.a.restriction.on.removing.
the.‘at-risk’.aspect.of.the.instruments.granted.to.
executives..Plan.Participants.may.not.enter.into.any.
transaction.designed.to.remove.the.‘at-risk’.aspect.
of.an.instrument.before.it.becomes.exercisable.(eg..
hedging.the.Awards).
Any.shares.allocated.to.the.executive.following.
exercise.of.an.Award.may.only.be.dealt.with.in.
accordance.with.the.Company’s.Share.Trading.
Policy.and.subject.to.the.generally.applicable.
insider.trading.prohibitions..
3.4.2 Current Awards - 2010, 2012 and
2013 Awards
As.explained.in.last.year’s.Remuneration.Report,.
the.Board.decided.to.move.towards.making.annual.
grants.of.Awards.under.the.LTI.Plan.with.a.single.
4.year.performance.period,.to.all.senior.executives.
who.are.eligible.to.participate.in.the.LTI.Plan..The.
annual.grants.of.Awards.will.commence.in.the.
2013.financial.year.
As.the.Board’s.previous.practice.has.been.to.
approve.a.grant.of.Awards.to.senior.executives.
every.three.years,.with.the.grant.divided.into.3.
tranches.vesting.over.2,.3.and.4.year.performance.
periods.(such.as.the.2010.Awards).-.the.Board.
considered.it.appropriate.to.approve.a.transitional.
grant.(being.the.2012.Awards).which.is.divided.
into.2.tranches.vesting.over.a.3.and.4.year.
performance.period.
2010 Awards
The.2010.Awards.were.granted.in.May.2010.with.
effect.from.1.January.2010.(to.coincide.with.the.
start.of.the.performance.period).and.are.divided.
into.3.tranches.as.follows:
2012 Awards
As.a.transitional.measure,.the.2012.Awards.were.
granted.in.May.2012.with.effect.from.1.January.
2012.(to.coincide.with.the.start.of.the.performance.
period).and.are.divided.into.2.tranches.as.follows:
n. Tranche.1:.50%.of.Award.-.earliest.exercise.date.is.
1.May.2015
n. Tranche.2:.50%.of.Award.-.earliest.exercise.date.is.
1.May.2016
Any.unexercised.2012.Awards.will.expire.on.30.
September.2016.
2013 Awards
The.Board.intends.to.make.the.first.grant.of.annual.
Awards.in.May.2013,.with.effect.from.1.January.
2013:
n. 100%.of.Award.-.earliest.exercise.date.is.1.May.
2017
These.2013.Awards.will.be.subject.to.a.single.4.
year.performance.period.and.will.be.tested.and.
become.exercisable.to.the.extent.of.any.vesting.
from.1.May.2017..Any.unexercised.2013.Awards.
will.expire.on.30.September.2017.
3.4.3 2010 Awards - vesting of Tranche 1
As.indicated.in.section.2.1.above,.overall.99.3%.
of.Tranche.1.of.the.2010.Awards.vested.on.1.May.
2012.
50%.of.this.vesting.resulted.from.the.Company’s.
relative.TSR.performance.for.the.period.1.January.
2010.to.31.December.2011.resulting.in.full.vesting.
of.that.component.having.achieved.ranking.at.
the.83rd.percentile.against.the.S&P./.ASX.200.
Accumulation.Index.(XJO.Al),.excluding.all.Global.
Industry.Classification.Standard.(GICS).Financial.
companies.and.selected.resources.companies.
The.remaining.49.3%.of.the.Awards.that.vested.
arose.as.the.Company’s.average.annual.compound.
EPS.growth.over.the.two.year.performance.period.
was.7.8%,.which.nearly.achieved.the.7.9%.rate.
required.for.full.vesting.
For.further.details.of.the.requisite.target.ranges.for.
vesting.of.the.TSR.and.EPS.performance.conditions.
of.the.2010.Awards,.please.refer.to.the.Company’s.
2010.Remuneration.Report.
3.4.4 2012 Awards - granted in 2012
The.terms.of.the.2012.Awards.were.considered.by.
shareholders.at.the.2012.Annual.General.Meeting.
As.set.out.in.section.3.4.1.above,.the.2012.Awards.
are.subject.to.the.TSR.and.EPS.performance.
hurdles,.which.are.independent.and.to.be.tested.
separately.
How is the TSR performance condition for the 2012
Awards measured?
The.Company’s.TSR.performance.must.equal.or.
exceed.the.growth.in.the.returns.of.the.median.
company.of.the.S&P./.ASX.200.Accumulation.Index.
(XJO.Al),.excluding.all.GICS.Financial.companies.
and.selected.resources.companies,.over.the.period.
1.January.2012.to.31.December.2014.(for.Tranche.
1).and.1.January.2012.to.31.December.2015.(for.
Tranche.2).
The.2012.Awards.are.to.vest.progressively.in.
accordance.with.the.following.scale:
n. Tranche.1:.30%.of.Award.-.became.exercisable.on.
TSR.growth.relative.percentile.ranking.
%.of.Awards.subject.to.TSR.hurdle.to.vest
1.May.2012
n. Tranche.2:.30%.of.Award.-.earliest.exercise.date.is.
1.May.2013
n. Tranche.3:.40%.of.Award.-.earliest.exercise.date.is.
1.May.2014
Any.unexercised.2010.Awards.will.expire.on.30.
September.2014.
Below.50%.
50%.
Between.50%.and.75%.
75%.or.above.
Nil
50%
Pro.rata
100%
How is the EPS performance condition for the 2012 Awards measured?
The.EPS.performance.hurdle.requires.the.compound.annual.growth.in.EPS.of.the.Company.over.the.relevant.
performance.period.(being,.from.1.January.2012.to.31.December.2014.for.Tranche.1,.and.1.January.2012.
to.31.December.2015.for.Tranche.2).to.equal.or.exceed.5%.per.annum.before.any.Awards.will.vest.
The.2012.Awards.are.to.vest.progressively.in.accordance.with.the.following.scale:
Compound.annual.growth.in.EPS.
%.of.Awards.subject.to.EPS.hurdle.to.vest
Below.5%.per.annum.
5%.per.annum.
Between.5%.and.10%.per.annum.
10%.per.annum.or.above.
Nil
50%
Pro.rata
100%
ADELAIDE BRIGHTON LTD AND ITS CONTROLLED ENTITIES
FOR THE YEAR ENDED 31 DECEMBER 2012
49
3.4.5 Movements in Awards during 2012
Details.of.the.movement.in.Awards.held.by.the.Managing.Director.and.senior.executives.during.the.2012.financial.year.is.set.out.below.
Movement in Awards during the year
Managing
Director
& senior
executives
M.P.Chellew.
G.Agriogiannis7.
M.Brydon.
M.R.D.Clayton.
M.Kelly...
S.B.Rogers.
S.J.Toppenberg.
Balance at
31 Dec 2011
Granted
2012 Awards1
1,800,000.
227,500.
600,000.
300,000.
500,000.
325,000.
200,000.
1,456,648.
198,554.
531,792.
203,758.
378,612.
197,038.
173,628.
Exercised/
vested
Tranche 1
2010 Awards2
Number of
Awards lapsed/
forfeited
during the year
536,220.
-.
178,740.
89,370.
148,950.
96,818.
59,580.
3,780.
-.
1,260.
630.
1,050.
682.
420.
Balance at
31 Dec 20123
2,716,648.
426,054.
951,792.
413,758.
728,612.
424,538.
313,628.
Value of
Awards at
grant date4
Value per share
at the date of
exercise5
Value at
lapse date6
1,999,250.
272,516..
729,885.
279,659.
519,645.
270,435.
238,305.
3.0362.
-.
3.0754.
2.9804.
3.1111.
3.3377.
3.0362.
11,471
-
3,824
1,912
3,186
2,070
1,275
Total
3,952,500
3,140,030
1,109,678
7,822
5,975,030
4,309,695
-
23,738
1. As.the.Awards.granted.in.2012.only.vest.on.satisfaction.of.performance.conditions.which.are.to.be.tested.in.future.financial.periods,.none.of.the.2012.Awards.as.set.out.above.vested.or.were.forfeited.during.the.year.
2. All.1,109,678.Awards.which.were.exercisable.during.2012.were.in.fact.exercised,.being.Tranche.1.of.the.2010.Awards..The.number.of.Awards.vested.during.the.period.and.exercisable.at.31.December.2012.is.nil..The.number.of.
Awards.vested.but.not.yet.exercisable.at.31.December.2012.is.nil.
3. The.maximum.value.of.currently.approved.Awards.is.determined.by.the.maximum.number.of.shares.that.can.be.achieved.from.all.unvested.Awards.under.2010.Awards.and.2012.Awards.as.at.31.December.2012..Refer.to.note.30(b)..
for.details.of.the.balance.of.these.Awards.
4. Value.of.Awards.granted.during.2012.as.at.grant.date.
5. The.value.per.share.at.the.date.of.exercise.is.the.Value.Weighted.Closing.Price.which.is.the.average.of.the.closing.price.and.number.of.Adelaide.Brighton.Limited.shares.traded.on.the.Australian.Securities.Exchange.for.the.five.trading.
days.before.the.exercise.date,.but.not.including.the.day.of.exercise..The.aggregate.value.of.Awards.that.vested.during.the.year.is.$3,411,571.based.on.the.Value.Weighted.Closing.Price.
6. The.value.at.lapse.date.of.options.that.were.granted.as.part.of.remuneration.and.that.lapse.during.the.year.because.a.vesting.condition.was.not.satisfied..The.value.is.determined.at.the.time.of.lapsing,.but.assuming.the.condition.was.
satisfied.
7. As.G.Agriogiannis.commenced.employment.on.27.June.2011,.the.Board.approved.a.pro-rata.grant.for.him.to.participate.in.Tranche.2.and.Tranche.3.of.the.2010.Award.(not.Tranche.1).
3.5 Service Agreements and termination
payments
The.remuneration.and.other.terms.of.employment.
for.the.Managing.Director.and.senior.executives.
are.set.out.in.formal.employment.contracts.referred.
to.as.Service.Agreements..All.Service.Agreements.
are.for.an.unlimited.duration.and.details.of.the.
executives.entitlements.on.termination.are.set.out.
below.
The.Service.Agreements.of.current.senior.
executives.other.than.M.Kelly.and.G.Agriogiannis.
were.entered.into.prior.to.24.November.2009,.and.
are.not.subject.to.the.new.limits.on.termination.
payments.introduced.under.the.Corporations Act
2001.(with.effect.from.that.date)..The.Company.
intends.honouring.its.pre-existing.contractual.
commitments.to.those.executives.upon.separation,.
as.permitted.by.law..The.Service.Agreements.for..
M.Kelly.and.G.Agriogiannis.were.entered.into.
during.2010.and.2011.respectively,.and.the.
payments.made.to.each.on.termination.under.
their.individual.Service.Agreements.will.be.within.
the.legislative.limit.of.one.times.‘base.salary’.(as.
defined.in.the.Corporations Act).
Name
Notice periods
Separation payments1
G.Agriogiannis.
.
.
.
Other.senior.executives3.
(including.Managing.
Director).
.
.
.
3.months.notice.by.either.party..
(or.payment.in.lieu).
May.be.terminated.immediately.
for.serious.misconduct
3.months.notice.by.executive.
5.weeks.notice.by.Company.
(or.payment.in.lieu).
May.be.terminated.immediately.
for.serious.misconduct.
.
9.months.total.remuneration.where.
Company.terminates.on.notice.
12.months.total.remuneration.where
Company.terminates.on.notice,.or.
where.executive.is.able.to.terminate.
for.‘Fundamental.Change’2
Entitlement.under.the.Company.
Redundancy.Policy.(if.applicable)
1. In.the.case.of.resignation,.no.separation.payment.is.made.to.the.executive.(only.amounts.due.and.payable.up.to.the.date.of.ceasing.employment.
including.accrued.leave.entitlements.and.unpaid.salary).
2. A.‘Fundamental.Change’.includes.circumstances.where.there.has.been.a.substantial.diminution.of.responsibility,.a.material.reduction.in.status.or.a.
relocation.of.the.relevant.position.(and.only.certain.executive.roles.have.this.entitlement).
3. Under.an.arrangement.entered.into.some.time.ago,.M.Brydon.is.also.entitled.to.an.ex-gratia.payment.of.$10,000.upon.termination,.as.well.as.payment.
of.accrued.sick.leave.
On.termination.of.employment.for.any.reason,.the.
Managing.Director.and.other.senior.executives.
(other.than.M.Kelly.and.G.Agriogiannis).are.
prohibited.from.engaging.in.any.activity.that.would.
compete.with.the.Group.for.a.period.of.up.to.six.
months.in.order.to.protect.the.Group’s.business.
interests..During.the.period.of.the.restraint.the.
executive.will.be.paid.a.monthly.amount.equivalent.
to.the.executive’s.monthly.fixed.remuneration.at.the.
time.of.termination..These.restraint.arrangements.
apply.to.M.Kelly.in.the.event.he.resigns.
ADELAIDE BRIGHTON LTD AND ITS CONTROLLED ENTITIES
FOR THE YEAR ENDED 31 DECEMBER 2012
50
3.6 2012 Remuneration
Details.of.the.remuneration.paid.to.the.Managing.Director.and.key.management.personnel.of.the.Company.and.the.Group,.during.the.2012.financial.year.is.set.out.
below.
Remuneration for the 2012 and 2011 financial years
Short-term benefits
Post-employment benefits
Other
Share based
payments1
Total
Fixed
salary
$
1,659,612
1,484,513.
438,000
274,309.
903,877
740,513.
453,877
430,013.
-
160,868.
630,000
591,000.
429,500
411,800.
375,500
360,000.
Year
2012
2011.
2012
2011.
2012
2011.
2012
2011.
2012
2011.
2012
2011.
2012
2011.
2012
2011.
STI
$
1,641,360
1,419,840.
340,752
163,302.
714,656
571,642.
367,728
338,919.
-
-.
511,948
467,205.
341,057
310,102.
312,070
289,928.
M.P.Chellew.
.
G.Agriogiannis..
.
M.Brydon..
.
M.R.D.Clayton..
.
M.A.Finney3.
.
M.Kelly.
.
S.B.Rogers.
.
S.J.Toppenberg.
.
Super-
annuation
contributions
Termination
benefits
Long term
incentive
$
$
$
$
$
%2
20,388
15,487.
20,000
10,303.
16,123
15,487.
16,123
15,487.
-
8,973.
25,000
25,000.
25,000
25,000.
25,000
25,000.
-
-.
-
-.
-
-.
-
-.
-
54,926.
-
-.
-
-.
-
-.
-
54,926.
-
-.
163,100 4
-.
-
-.
-
-.
-
-.
-
-.
-
-.
-
-.
547,795
633,291.
146,123
7,435.
186,542
208,063.
87,972
107,285.
-
(46,628.).
149,945
173,299.
93,281
122,794.
61,871
74,276.
3,869,155
3,553,131.
1,107,975
455,349.
1,821,198
1,535,705.
925,700
891,704.
-
178,139.
1,316,893
1,256,504.
888,838
869,696.
774,441
749,204.
14
18
13
2.
10
14
10
12
-
(26.)
11
14
10
14
8
10
163,100
-.
1,273,530
1,279,815.
10,704,200
9,489,432
Total for the.
Company and Group.
2012
2011.
4,890,366
4,453,016.
4,229,571
3,560,938.
147,634
140,737.
1. In.accordance.with.the.requirements.of.the.Accounting.Standards,.remuneration.includes.a.proportion.of.the.notional.value.of.equity.compensation.granted.or.outstanding.during.the.year..The.notional.value.of.equity.instruments.which.
do.not.vest.during.the.reporting.period.is.determined.as.at.the.grant.date.and.is.progressively.allocated.over.the.vesting.period..The.amount.included.as.remuneration.is.not.related.to.or.indicative.of.the.benefit.(if.any).that.individual.
executives.may.ultimately.realise.should.the.equity.instruments.vest..The.notional.value.of.Awards.as.at.the.date.of.their.grant.has.been.determined.in.accordance.with.the.accounting.policy.note.1(v)(iv).
2. %.of.remuneration.for.the.financial.year.which.consists.of.the.amortised.annual.value.of.Awards.issued.under.the.Adelaide.Brighton.Limited.Executive.Performance.Share.Plan.
3. M.A.Finney.ceased.employment.effective.9.May.2011.
4. G.Agriogiannis.commenced.employment.on.27.June.2011,.and.received.a.sign-on.payment.and.relocation.benefits.that.were.not.paid.until.2012.
Total.fees,.including.committee.fees,.were.
set.within.the.maximum.aggregate.amount.of.
$1,100,000.per.annum.approved.at.the.2010.
Annual.General.Meeting.
Non-executive.Director.base.fees.were.increased.
by.approximately.2%,.and.the.Chairman’s.fee.
increased.3.9%,.for.the.2012.financial.year.
Section 4 - Non-executive Directors’ fees
4.1 Board policy on non-executive Director
fees
The.total.amount.of.fees.paid.to.non-executive.
Directors.is.determined.by.the.Board.on.
the.recommendation.of.its.Nomination.and.
Remuneration.Committee.within.the.maximum.
aggregate.amount.approved.by.shareholders..
The.remuneration.of.the.non-executive.Directors.
consists.of.Directors’.fees,.committee.fees.and.
superannuation.contributions..These.fees.are.not.
linked.to.the.performance.of.the.Group.in.order.to.
maintain.the.independence.and.impartiality.of.the.
non-executive.Directors.
In.setting.fee.levels,.the.Nomination.and.
Remuneration.Committee,.which.makes.
recommendations.to.the.Board,.takes.into.account:
n. the.Group’s.existing.remuneration.policies;
n. independent.professional.advice;
n. fees.paid.by.comparable.companies;
n. the.general.time.commitment.and.responsibilities.
involved;
n. the.risks.associated.with.discharging.the.duties.
attached.to.the.role.of.Director;.and
n. the.level.of.remuneration.necessary.to.attract.and.
retain.Directors.of.a.suitable.calibre.
ADELAIDE BRIGHTON LTD AND ITS CONTROLLED ENTITIES
FOR THE YEAR ENDED 31 DECEMBER 2012
51
Fees.payable.to.non-executive.Directors.in.the.2012.financial.year.are.set.out.below.(and.are.inclusive.of.
contributions.to.superannuation).
Non-executive Directors’ fees for 20122
Board.
Audit,.Risk.and.Compliance.Committee.
Nomination.and.Remuneration.Committee.
Safety,.Health.and.Environment.Committee.
Corporate.Governance.Committee.
1. The.Chairman.of.the.Board.receives.no.additional.fees.for.Committee.work.
2. At.present,.there.are.no.fees.payable.for.the.Independent.Directors’.Committee.
Chairman
$
342,750.1.
24,000..
24,000..
15,000..
10,000..
Member
$
100,000
13,500
13,500
10,000
7,500
The.Group’s.policy.is.to.support.non-executive.
Director.retirement.through.superannuation.
contributions.
In.accordance.with.the.Company’s.constitution,.
Directors.are.also.permitted.to.be.paid.additional.
fees.for.special.duties.or.exertions..Such.fees.may.
or.may.not.be.included.in.the.aggregate.amount.
approved.by.shareholders,.as.determined.by.the.
Directors..No.such.fees.were.paid.during.the.year.
Directors.are.also.entitled.to.be.reimbursed.for.all.
business.related.expenses,.including.travel,.as.may.
be.incurred.in.the.discharge.of.their.duties.
4.2 Fees paid to Non-executive Directors
Details.of.fees.paid.to.non-executive.Directors.
for.the.years.ended.31.December.2012.and.31.
December.2011.are.set.out.below.
Non-executive Directors’ remuneration for the 2012 and 2011 financial years
Fees and allowances
Post-employment
benefits
Committee fees
Year (incl. superannuation) (incl. superannuation)
Directors’ fees
Superannuation
contributions1
Total
Non-executive Director
$
$
$
$
L.V.Hosking.(Chairman)2. 2012
2011.
.
R.D.Barro.
2012
2011.
.
G.F.Pettigrew.
2012
2011.
.
K.B.Scott-Mackenzie.
2012
2011.
.
A.M.Tansey3.
2012
2011.
.
C.L.Harris.
2012
(former.Chairman)4.
2011.
Total
.
2012
2011.
251,279
98,000.
100,000
98,000.
100,000
98,000.
100,000
97,997.
100,000
72,722.
130,394
330,000.
781,673
794,719.
17,899
44,000.
10,000
8,000.
47,500
44,000.
28,500
-.
21,000
-.
-
-.
269,178
142,000.
110,000
106,000.
147,500
142,000.
128,500
97,997.
121,000
72,722.
130,394
330,000.
124,899
96,000.
906,572
890,719.
20,263
12,909
9,083
8,752
13,409
12,909
11,682
8,089
9,991
6,005.
11,854
30,000
76,282
78,664
1. Superannuation.contributions.are.made.on.behalf.of.non-executive.Directors.which.satisfy.the.Group’s.obligations.under.applicable.Superannuation.
Guarantee.Charge.legislation.
2. L.V.Hosking.commenced.as.Chairman.of.the.Board.on.17.May.2012.-.$55,580.relates.to.period.served.as.a.non-executive.director.(1.January.2012.
to.16.May.2012).and.$213,598.for.period.served.as.Chairman.(17.May.2012.to.31.December.2012).
3. A.M.Tansey.appointed.as.a.Director.effective.5.April.2011.
4. Former.Board.Chairman.C.L.Harris.retired.on.17.May.2012.
ADELAIDE BRIGHTON LTD AND ITS CONTROLLED ENTITIES
FOR THE YEAR ENDED 31 DECEMBER 2012
52
Consolidated
Notes
2012
2011
3.
.
.
3.
.
.
4.
.
11(c).
.
5(a).
.
.
.
.
37.
37.
1,176.2.
(716.1).
(187.2).
1,100.4
(681.0)
(161.6)
272.9.
9.7.
(22.0).
(62.7).
(18.9).
-.
30.2.
209.2.
(55.1).
154.1.
154.2.
(0.1).
154.1.
Cents.
24.2.
24.0.
257.8
12.4
(25.8)
(51.0)
(19.4)
(3.3)
35.7
206.4
(58.0)
148.4
148.4
-
148.4
Cents
23.3
23.2
Income statement
For the year ended 31 December 2012
($ Million)
Revenue from continuing operations.
Cost.of.sales.
Freight.and.distribution.costs.
.
.
.
.
.
.
Gross profit
Other.income.
Marketing.costs.
Administration.costs.
Finance.costs.
Other.expenses.
Share.of.net.profits.of.joint.ventures.and.associate.accounted.for.using.the.equity.method.
.
.
.
.
.
.
.
.
.
.
Profit before income tax.
Income.tax.expense.
Profit for the year
.Profit.attributable.to:
Owners.of.the.Company.
Non-controlling.interests.
.
..
.
.
.
.
.
.
.
.
.
.
..
.
Earnings per share for profit from continuing operations attributable to the
ordinary equity holders of the Company:
Basic.earnings.per.share.
Diluted.earnings.per.share.
.
.
.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES
FOR.THE.YEAR.ENDED.31.DECEMBER.2012
THE.ABOVE.INCOME.STATEMENT.SHOULD.BE.READ.IN.CONJUNCTION.WITH.
THE.NOTES.TO.THE.FINANCIAL.STATEMENTS
53
Statement of comprehensive income
For the year ended 31 December 2012
($ Million)
Profit for the year
Other comprehensive income
Actuarial.gains/(losses).on.retirement.benefit.obligation.
Exchange.differences.on.translation.of.foreign.operations.
Income.tax.relating.to.components.of.other.comprehensive.income.
Other comprehensive income for year, net of tax
Total comprehensive income for the year
Total comprehensive income for the year attributable to:
Owners.of.the.Company.
Non-controlling.interests.
Total comprehensive income for the year
Notes
23(d).
.
5(c).
Consolidated
2012
154.1. .
0.3 .
-. .
(0.1 ).
0.2 .
2011
148.4
(8.8.)
-
2.5
(6.3.)
154.3. .
142.1
.
.
154.4. .
(0.1 ).
154.3. .
142.1
-.
142.1
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
THE.ABOVE.STATEMENT.OF.COMPREHENSIVE.INCOME.SHOULD.BE.READ.IN.CONJUNCTION.WITH.
THE.NOTES.TO.THE.FINANCIAL.STATEMENTS
54
Balance sheet
As at 31 December 2012
($ Million)
Current assets
.Cash.and.cash.equivalents.
.Trade.and.other.receivables.
.Inventories.
Carbon.units.
..
.
.Assets.classified.as.held.for.sale.
Total.current.assets.
Non-current assets
.Receivables.
.Investments.accounted.for.using.the.equity.method.
.Property,.plant.and.equipment.
Intangible.assets.
Carbon.units.
Total.non-current.assets.
Total assets
Current liabilities
Trade.and.other.payables.
.Borrowings.
.Current.tax.liabilities.
.Provisions.
Provision.for.carbon.emissions.
.Other.liabilities.
Total.current.liabilities.
Non-current liabilities
Borrowings.
.Deferred.tax.liabilities.
.Provisions.
.Retirement.benefit.obligations.
Provision.for.carbon.emissions.
.Other.non-current.liabilities.
Total.non-current.liabilities.
Total liabilities
Net assets
Equity
.Contributed.equity.
.Reserves.
.Retained.earnings.
.Capital.and.reserves.attributable.to.owners.of.the.Company.
.Non-controlling.interests.
Total equity
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
THE.ABOVE.BALANCE.SHEET.SHOULD.BE.READ.IN.CONJUNCTION.WITH.
THE.NOTES.TO.THE.FINANCIAL.STATEMENTS
55
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Consolidated
Notes
2012
2011
6.
7.
8.
15(b).
.
9.
.
10.
11.
12.
14.
15(b).
7.0.
169.6.
138.7.
48.0.
363.3.
1.9.
365.2.
29.6.
132.1.
901.4.
184.9.
3.5.
11.0
168.9
127.9
-
307.8
-
307.8
27.2
97.2
851.0
183.0
-
.
1,251.5.
1,158.4
1,616.7.
1,466.2
16.
17.
.
18.
15(b).
19.
94.5.
20.0.
7.7.
26.0.
25.2.
19.5.
98.5
0.7
8.2
21.7
-
4.6
.
192.9.
133.7
20.
21.
22.
23(b).
15(b).
.
.
24.
25(a).
25(b).
.
.
299.3.
67.7.
31.2.
9.0.
8.4.
0.1.
415.7.
608.6.
1,008.1.
696.6.
2.1.
306.6.
1,005.3.
2.8.
1,008.1.
258.7
70.7
35.0
10.9
-
0.1
375.4
509.1
957.1
694.6
2.3
257.3
954.2
2.9
957.1
Statement of changes in equity
For the year ended 31 December 2012
Attributable to owners of Adelaide Brighton Ltd
Consolidated
($ Million)
Notes
Contributed
equity
Reserves
Balance at 1 January 2012
Profit.for.the.year.
Other.comprehensive.income.
Total comprehensive income
for the year
Transactions with owners in
their capacity as owners:
Dividends.provided.for.or.paid.
Executive.performance.share.plan.
.
..
Balance at 31 December 2012
Balance at 1 January 2011
Profit.for.the.year.
Other.comprehensive.income.
Total comprehensive income
for the year
Transactions with owners
in their capacity as owners:
Dividends.provided.for.or.paid.
Executive.performance.share.plan.
.
..
Balance at 31 December 2011
.
.
26.
24.
.
.
.
26.
24.
.
694.6
-.
-.
2.3
-..
-..
Retained
earnings
257.3
154.2..
0.2..
Non-controlling
interests
Total
954.2
154.2. .
0.2. .
2.9
(0.1.).
-. .
Total
equity
957.1
154.1
0.2.
-
-
154.4
154.4
(0.1 )
154.3
-.
2.0.
2.0.
696.6
692.7.
-.
-.
-..
(0.2.).
(0.2.).
2.1
2.6..
-..
-..
(105.1.).
-..
(105.1.).
(105.1.).
1.8. .
(103.3.).
-. .
-. .
-. .
(105.1.)
1.8
(103.3.)
306.6
1,005.3
2.8
1,008.1
236.0..
148.4..
(6.3.).
931.3. .
148.4. .
(6.3.).
3.0. .
-. .
-. .
934.3
148.4
(6.3.)
-.
-..
142.1..
142.1. .
-. .
142.1
-.
1.9.
1.9.
694.6.
-..
(0.3.).
(0.3.).
2.3..
(120.8.).
-..
(120.8.).
257.3..
(120.8.).
1.6. .
(119.2.).
954.2. .
(0.1.).
-. .
(0.1.).
2.9. .
(120.9.)
1.6
(119.3.)
957.1
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
THE.ABOVE.STATEMENT.OF.CHANGES.IN.EQUITY.SHOULD.BE.READ.IN.CONJUNCTION.WITH.
THE.NOTES.TO.THE.FINANCIAL.STATEMENTS
56
Statement of cash flows
For the year ended 31 December 2012
($ Million)
Cash flows from operating activities
Receipts.from.customers.(inclusive.of.goods.and.services.tax).
.Payments.to.suppliers.and.employees.(inclusive.of.goods.and.services.tax).
.Distributions.received.
.Interest.received.
.Other.income.
.Interest.paid.
Income.taxes.paid.
Income.taxes.refunded
Net cash inflow from operating activities.
Cash flows from investing activities
Payments.for.property,.plant,.equipment.and.intangibles.
Payments.for.acquisition.of.businesses,.net.of.cash.acquired.
Payments.for.acquisition.of.interest.in.associate.
Proceeds.from.sale.of.property,.plant.and.equipment.
Loans.to.joint.venture.entities.
.Repayment.of.loans.from.joint.venture.entities.
Net cash (outflow) from investing activities
Cash flows from financing activities
Proceeds.from.issuance.of.shares.
.Proceeds.from.borrowings.
.Dividends.paid.to.Company’s.shareholders.
Dividends.paid.to.non-controlling.interests.in.subsidiaries.
Net cash (outflow) from financing activities
Net (decrease) increase in cash and cash equivalents
Cash.and.cash.equivalents.at.the.beginning.of.the.financial.year.
Cash and cash equivalents at the end of year.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Consolidated
Notes
2012
2011
.
.
.
.
.
.
.
36.
.
.
11.
.
.
.
.
.
26.
.
.
6.
1,290.1.
(1,065.4).
24.0.
2.5.
4.3.
(18.8).
(54.9).
4.7.
1,189.0
(993.1)
26.2
2.4
9.7
(17.3)
(65.6)
-
186.5.
151.3
(120.6).
-.
(28.7).
3.2.
(2.4).
-.
(91.3)
(47.6)
-
1.6
-
3.2
(148.5).
(134.1)
3.3.
59.8.
(105.1).
-.
(42.0).
(4.0).
11.0.
7.0.
3.7
109.0
(120.8)
(0.1)
(8.2)
9.0
2.0
11.0
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
THE.ABOVE.STATEMENT.OF.CASH.FLOWS.SHOULD.BE.READ.IN.CONJUNCTION.WITH
THE.NOTES.TO.THE.FINANCIAL.STATEMENTS
57
Notes to the consolidated financial statements
(iii) Joint venture and associate entities
The.interest.in.joint.ventures.and.associates.is.
accounted.for.using.the.equity.method,.after.
initially.being.recorded.at.cost..Under.the.equity.
method,.the.share.of.the.profits.or.losses.of.
the.joint.venture.or.associate.is.recognised.in.
the.income.statement,.and.the.share.of.post-
acquisition.movements.in.reserves.is.recognised.
in.other.comprehensive.income..Profits.or.losses.
on.transactions.establishing.the.joint.ventures.and.
associates.and.transactions.with.the.joint.venture.
and.associate.are.eliminated.to.the.extent.of.the.
Group’s.ownership.interest.until.such.time.as.they.
are.realised.by.the.joint.ventures.or.associate.
on.consumption.or.sale,.unless.they.relate.to.
an.unrealised.loss.that.provides.evidence.of.the.
impairment.of.an.asset.transferred.
(iv) Non-controlling interests
Non-controlling.interests.in.the.results.and.equity.
of.subsidiaries.are.shown.separately.in.the.
consolidated.income.statement.and.balance.sheet.
respectively..The.Group.treats.transactions.with.
non-controlling.interests.that.do.not.result.in.a.
loss.of.control.as.transactions.with.equity.owners.
of.the.Group..For.purchases.from.or.sales.to.non-
controlling.interests,.the.difference.between.any.
consideration.paid.and.the.relevant.share.acquired.
of.the.carrying.value.of.net.assets.of.the.subsidiary.
is.deducted.from.equity.
(c) Segment reporting
.
.Operating.segments.are.reported.in.a.manner.
consistent.with.the.internal.reporting.provided.
to.the.chief.operating.decision.maker..The.chief.
operating.decision.maker,.who.is.responsible.for.
allocating.resources.and.assessing.performance.of.
the.operating.segments,.has.been.identified.as.the.
Managing.Director.
1 Summary of significant accounting policies
.
.
.
.
.Adelaide.Brighton.Ltd.(the.Company).is.a.company.
limited.by.shares,.incorporated.and.domiciled.in.
Australia.whose.shares.are.publicly.traded.on.the.
Australian.Securities.Exchange.(ASX).
.The.financial.report.was.authorised.for.issue.by.
the.Directors.on.7.March.2013..The.Directors.
have.the.power.to.amend.and.reissue.the.financial.
statements.
.The.principal.accounting.policies.adopted.in.
the.preparation.of.these.consolidated.financial.
statements.are.set.out.below.
.With.the.exception.of.the.introduction.of.an.
accounting.policy.for.carbon.emissions.(note.1(ab)),.
these.policies.have.been.consistently.applied.to.
all.the.years.presented,.unless.otherwise.stated..
The.financial.statements.are.for.the.consolidated.
entity.consisting.of.Adelaide.Brighton.Ltd.and.its.
subsidiaries.
(a) Basis of preparation
.
.
.These.general.purpose.financial.statements.have.
been.prepared.in.accordance.with.Australian.
Accounting.Standards.and.Interpretations.issued.by.
the.Australian.Accounting.Standards.Board.and.the.
Corporations Act 2001..The.Company.is.a.for-profit.
entity.for.the.purpose.of.preparing.the.financial.
statements.
.Comparative.information.has.been.re-stated.to.
reflect.the.current.year.classification.of.expenses.in.
the.Income.Statement.and.cash.flow.definitions.in.
the.Statement.of.Cash.Flows.
Historical cost convention
These.financial.statements.have.been.prepared.
under.the.historical.cost.convention,.except.for.
the.circumstances.when.fair.value.method.has.
been.applied.as.detailed.in.the.accounting.policies.
below.
Compliance with IFRS
The.consolidated.financial.statements.of.Adelaide.
Brighton.Limited.also.comply.with.International.
Financial.Reporting.Standards.(IFRS).as.issued.
by.the.International.Accounting.Standards.Board.
(IASB).
. (b) Principles of consolidation
(i) Subsidiaries
The.consolidated.financial.statements.incorporate.
the.assets.and.liabilities.of.all.subsidiaries.
controlled.by.Adelaide.Brighton.Ltd.as.at.31.
December.2012.and.the.results.of.all.subsidiaries.
for.the.year.then.ended..The.Company.and.its.
subsidiaries.together.are.referred.to.in.this.financial.
report.as.“the.Group”.
.Subsidiaries.are.all.those.entities.over.which.the.
Group.has.the.power.to.govern.the.financial.and.
operating.policies,.generally.accompanying.a.
shareholding.of.more.than.one-half.of.the.voting.
rights..The.existence.and.effect.of.potential.voting.
rights.that.are.currently.exercisable.or.convertible.
are.considered.when.assessing.whether.the.Group.
controls.another.entity.
.Subsidiaries.are.fully.consolidated.from.the.date.on.
which.control.is.transferred.to.the.Group..They.are.
de-consolidated.from.the.date.that.control.ceases..
The.acquisition.method.of.accounting.is.used.to.
account.for.business.combinations.by.the.Group.
(refer.to.note.1(h)).
.Intercompany.transactions,.balances.and.
unrealised.gains.on.transactions.between.Group.
companies.are.eliminated..Unrealised.losses.are.
also.eliminated.unless.the.transaction.provides.
evidence.of.the.impairment.of.the.asset.transferred..
Accounting.policies.of.subsidiaries.have.been.
changed.where.necessary.to.ensure.consistency.
with.the.policies.adopted.by.the.Group.
.
.
.
(ii) Employee Share Trust
The.Group.has.formed.a.trust.to.administer.the.
Group’s.employee.share.scheme..The.company.that.
acts.as.the.Trustee.is.consolidated.as.the.company.
is.controlled.by.the.Group..The.Adelaide.Brighton.
employee.share.plan.trust.is.not.consolidated.as.it.
is.not.controlled.by.the.Group.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
58
1 Summary of significant accounting policies
. (e) Revenue recognition
.
.Revenue.is.measured.at.the.fair.value.of.
consideration.received.or.receivable..Amounts.
disclosed.as.revenue.are.net.of.returns,.trade.
allowances.and.duties.and.taxes.paid..Revenue.
is.recognised.for.the.major.business.activities.as.
follows:
(i) Sales revenue
Revenue.from.the.sale.of.goods.is.measured.at.
the.fair.value.of.the.consideration.received.or.
receivable,.net.of.returns,.trade.discounts.and.
volume.rebates..Revenue.is.recognised.when.
the.significant.risks.and.rewards.of.ownership.
have.been.transferred.to.the.buyer,.recovery.of.
the.consideration.is.considered.probable,.the.
associated.costs.and.possible.return.of.goods.
can.be.estimated.reliably,.there.is.no.continuing.
management.involvement.with.the.goods.and.the.
amount.of.revenue.can.be.measured.reliably..Sales.
of.services.are.recognised.in.the.accounting.period.
in.which.the.services.are.rendered.
(ii) Deferred income
Income.received.in.advance.in.relation.to.contracts.
is.deferred.in.the.balance.sheet.and.recognised.as.
income.on.a.straight-line.basis.over.the.period.of.
the.contract.
(iii) Interest income
Interest.income.is.recognised.using.the.effective.
interest.rate.method.
(iv) Dividends
Dividends.are.recognised.as.revenue.when.the.
right.to.receive.payment.is.established.
(f) Income tax
.
.The.income.tax.expense.or.revenue.for.the.period.
is.the.tax.payable.on.the.current.period’s.taxable..
income.based.on.the.applicable.income.tax.rate.for.
each.jurisdiction.adjusted.by.changes.in.deferred.
tax.assets.and.liabilities.attributable.to.temporary.
differences.between.the.tax.bases.of.assets.and.
liabilities.and.their.carrying.amounts.in.the.financial.
statements,.and.to.unused.tax.losses.
(continued)
(d) Foreign currency translation
(i) Functional and presentation currency
Items.included.in.the.financial.statements.of.each.
of.the.Group’s.entities.are.measured.using.the.
currency.of.the.primary.economic.environment.
in.which.the.entity.operates.(‘the.functional.
currency’)..The.consolidated.financial.statements.
are.presented.in.Australian.dollars,.which.is.
Adelaide.Brighton.Ltd’s.functional.and.presentation.
currency.
(ii) Transactions and balances
Foreign.currency.transactions.are.translated.
into.the.functional.currency.using.the.exchange.
rates.prevailing.at.the.dates.of.the.transactions..
Foreign.exchange.gains.and.losses.resulting.from.
the.settlement.of.such.transactions.and.from.the.
translation.at.year.end.exchange.rates.of.monetary.
assets.and.liabilities.denominated.in.foreign.
currencies.are.recognised.in.the.income.statement.
(iii) Foreign operations
The.results.and.financial.position.of.all.the.foreign.
operations.that.have.a.functional.currency.different.
from.the.presentation.currency.are.translated.into.
the.presentation.currency.as.follows:
n. Assets.and.liabilities.for.each.balance.sheet.
presented.are.translated.at.the.closing.rate.at.the.
date.of.that.balance.sheet;
n. Income.and.expenses.for.each.income.statement.
and.statement.of.comprehensive.income.are.
translated.at.average.exchange.rates.(unless.this.is.
not.a.reasonable.approximation.of.the.cumulative.
effect.of.the.rates.prevailing.on.the.transaction.
dates,.in.which.case.income.and.expenses.are.
translated.at.the.dates.of.the.transactions);.and
n. All.resulting.exchange.differences.are.recognised.in.
other.comprehensive.income.
.
.On.consolidation,.exchange.differences.arising.
from.the.translation.of.any.net.investment.in.
foreign.entities,.and.of.borrowings.and.other.
financial.instruments.designated.as.hedges.
of.such.investments,.are.recognised.in.other.
comprehensive.income..When.a.foreign.operation.
is.sold.or.any.borrowings.forming.part.of.the.net.
investment.are.repaid,.a.proportionate.share.of.
such.exchange.differences.is.reclassified.to.profit.
or.loss,.as.part.of.the.gain.or.loss.on.sale.where.
applicable.
.
.
.
.
.Deferred.tax.assets.and.liabilities.are.recognised.
for.temporary.differences.at.the.tax.rates.expected.
to.apply.when.the.assets.are.recovered.or.liabilities.
are.settled,.based.on.those.tax.rates.which.
are.enacted.or.substantively.enacted.for.each.
jurisdiction..The.relevant.tax.rates.are.applied.to.
the.cumulative.amounts.of.deductible.and.taxable.
temporary.differences.to.measure.the.deferred.tax.
asset.or.liability..An.exception.is.made.for.certain.
temporary.differences.arising.from.the.initial.
recognition.of.an.asset.or.a.liability..No.deferred.tax.
asset.or.liability.is.recognised.in.relation.to.these.
temporary.differences.if.they.arose.in.a.transaction,.
other.than.a.business.combination,.that.at.the.time.
of.the.transaction.did.not.affect.either.accounting.
or.taxable.profit.or.loss.
.Deferred.tax.assets.are.recognised.for.deductible.
temporary.differences.and.unused.tax.losses.only.
if.it.is.probable.that.future.taxable.amounts.will.be.
available.to.utilise.those.temporary.differences.and.
losses..Deferred.tax.liabilities.and.assets.are.not.
recognised.for.temporary.differences.between.the.
carrying.amount.and.tax.bases.of.investments.in.
controlled.entities.where.the.parent.entity.is.able.to.
control.the.timing.of.the.reversal.of.the.temporary.
differences.and.it.is.probable.that.the.differences.
will.not.reverse.in.the.foreseeable.future.
.Deferred.tax.assets.and.liabilities.are.offset.when.
there.is.a.legally.enforceable.right.to.offset.current.
tax.assets.and.liabilities.and.when.the.deferred.
tax.balances.relate.to.the.same.taxation.authority..
Current.tax.assets.and.tax.liabilities.are.offset.
where.the.entity.has.a.legally.enforceable.right.
to.offset.and.intends.either.to.settle.on.a.net.
basis,.or.to.realise.the.asset.and.settle.the.liability.
simultaneously.
.Current.and.deferred.tax.is.recognised.in.profit.
and.loss,.except.to.the.extent.it.relates.to.items.
recognised.in.other.comprehensive.income.or.
directly.in.equity..In.this.case,.the.tax.is.also.
recognised.in.other.comprehensive.income.or.
directly.in.equity,.respectively.
Tax consolidation
Adelaide.Brighton.Ltd.and.its.wholly.owned.
Australian.subsidiaries.implemented.the.tax.
consolidation.legislation.as.of.1.January.2004..
Adelaide.Brighton.Ltd,.as.the.head.entity.in.the.
tax.consolidated.group,.recognises.current.tax.
liabilities.and.tax.losses.(subject.to.meeting.the.
“probable.test”).relating.to.all.transactions,.events.
and.balances.of.the.tax.consolidated.group.as.if.
those.transactions,.events.and.balances.were.its.
own.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
59
1 Summary of significant accounting policies
(g) Leases
(continued)
(f) Income tax (continued)
.
.
.
.
.The.entities.in.the.tax.consolidated.group.are.part.
of.a.tax.sharing.agreement.which,.in.the.opinion.
of.the.Directors,.limits.the.joint.and.several.liability.
of.the.wholly-owned.entities.in.the.case.of.default.
by.the.head.entity,.Adelaide.Brighton.Ltd..Amounts.
receivable.or.payable.under.an.accounting.tax.
sharing.agreement.with.the.tax.consolidated.
entities.are.recognised.separately.as.tax-related.
amounts.receivable.or.payable..Expenses.and.
revenues.arising.under.the.tax.sharing.agreement.
are.recognised.as.a.component.of.income.tax.
expense.
.The.wholly-owned.entities.fully.compensate.
Adelaide.Brighton.Ltd.for.any.current.tax.payable.
assumed.and.are.compensated.by.Adelaide.
Brighton.Ltd.for.any.current.tax.receivable.and.
deferred.tax.assets.relating.to.unused.tax.losses.or.
unused.tax.credits.that.are.transferred.to.Adelaide.
Brighton.Ltd.under.the.tax.consolidation.legislation..
The.funding.amounts.are.determined.by.reference.
to.the.amounts.recognised.in.the.wholly-owned.
entities’.financial.statements.
.Individual.tax.consolidated.entities.recognise.tax.
expenses.and.revenues.and.current.and.deferred.
tax.balances.in.relation.to.their.own.taxable.
income,.temporary.differences.and.tax.losses.using.
the.separate.taxpayer.within.the.group.method..
Entities.calculate.their.current.and.deferred.tax.
balances.on.the.basis.that.they.are.subject.to.tax.
as.part.of.the.tax.consolidated.group.
.Deferred.tax.balances.relating.to.assets.that.
had.their.tax.values.reset.on.joining.the.tax.
consolidated.group.have.been.remeasured.based.
on.the.carrying.amount.of.those.assets.in.the.tax.
consolidated.group.and.their.reset.tax.values..
The.adjustment.to.these.deferred.tax.balances.is.
recognised.in.the.consolidated.financial.statements.
against.income.tax.expense.
.
.
.
.Leases.of.property,.plant.and.equipment.where.
the.Group,.as.lessee,.has.substantially.all.the.
risks.and.rewards.of.ownership.are.classified.as.
finance.leases..Finance.leases.are.capitalised.at.
the.lease’s.inception.at.the.lower.of.the.fair.value.
of.the.leased.property.and.the.present.value.of.the.
minimum.lease.payments..The.corresponding.rental.
obligations,.net.of.finance.charges,.are.included.
in.borrowings..Each.lease.payment.is.allocated.
between.the.liability.and.finance.charges.so.as.
to.achieve.a.constant.rate.on.the.finance.balance.
outstanding..The.property,.plant.and.equipment.
acquired.under.finance.leases.is.depreciated.over.
the.asset’s.useful.life.or.over.the.shorter.of.the.
asset’s.useful.life.and.the.lease.term.if.there.is.
no.reasonable.certainty.that.the.Group.will.obtain.
ownership.at.the.end.of.the.lease.term.
.The.interest.element.of.the.finance.cost.is.charged.
to.the.income.statement.over.the.lease.period.so.
as.to.produce.a.constant.periodic.rate.of.interest.
on.the.remaining.balance.of.the.liability.for.each.
period.
.Leases.in.which.a.significant.portion.of.the.risks.
and.rewards.of.ownership.are.retained.by.the.
lessor.are.classified.as.operating.leases..Payments.
made.under.operating.leases.(net.of.any.incentives.
received.from.the.lessor).are.charged.to.the.income.
statement.on.a.straight-line.basis.over.the.period.of.
the.lease.
(h) Business combinations
.
.The.acquisition.method.of.accounting.is.used.to.
account.for.all.business.combinations,.including.
business.combinations.involving.equities.or.
businesses.under.common.control,.regardless.
of.whether.equity.instruments.or.other.assets.
are.acquired..The.consideration.transferred.for.
the.acquisition.of.a.subsidiary.comprises.the.fair.
values.of.the.assets.transferred,.the.liabilities.
incurred.and.the.equity.interests.issued.by.the.
Group..The.consideration.transferred.also.includes.
the.fair.value.of.any.contingent.consideration.
arrangement.and.the.fair.value.of.any.pre-existing.
equity.interest.in.the.subsidiary..Acquisition-related.
costs.are.expensed.as.incurred..Identifiable.assets.
acquired.and.liabilities.and.contingent.liabilities.
assumed.in.a.business.combination.are,.with.
limited.exceptions,.measured.initially.at.their.fair.
values.at.the.acquisition.date..On.an.acquisition-
by-acquisition.basis,.the.Group.recognises.any.
non-controlling.interest.in.the.acquiree.either.
at.fair.value.or.at.the.non-controlling.interest’s.
proportionate.share.of.the.acquiree’s.net.
identifiable.assets.
.
.
.
.The.excess.of.the.consideration.transferred,.the.
amount.of.any.non-controlling.interest.in.the.
acquiree.and.the.acquisition-date.fair.value.of.any.
previous.equity.interest.in.the.acquiree.over.the.fair.
value.of.the.Group’s.share.of.the.net.identifiable.
assets.acquired.is.recorded.as.goodwill..If.those.
amounts.are.less.than.the.fair.value.of.the.net.
identifiable.assets.of.the.subsidiary.acquired.
and.the.measurement.of.all.amounts.has.been.
reviewed,.the.difference.is.recognised.directly.in.
profit.or.loss.as.a.bargain.purchase.
.Where.settlement.of.any.part.of.cash.consideration.
is.deferred,.the.amounts.payable.in.the.future.are.
discounted.to.their.present.value.as.at.the.date.of.
exchange..The.discount.rate.used.is.the.entity’s.
incremental.borrowing.rate,.being.the.rate.at.which.
a.similar.borrowing.could.be.obtained.from.an.
independent.financier.under.comparable.terms.and.
conditions.
.Contingent.consideration.is.classified.either.as.
equity.or.a.financial.liability..Amounts.classified.as.
a.financial.liability.are.subsequently.remeasured.to.
fair.value.with.changes.in.fair.value.recognised.in.
the.income.statement.
(i) Impairment of assets
.
.
.Goodwill.and.intangible.assets.that.have.an.
indefinite.useful.life.are.not.subject.to.amortisation.
and.are.tested.annually.for.impairment.or.more.
frequently.if.events.or.changes.in.circumstances.
indicate.that.they.might.be.impaired..Other.assets.
are.tested.for.impairment.whenever.events.or.
changes.in.circumstances.indicate.that.the.carrying.
amount.may.not.be.recoverable.
.An.impairment.loss.is.recognised.for.the.amount.
by.which.the.asset’s.carrying.amount.exceeds.its.
recoverable.amount..The.recoverable.amount.is.
the.higher.of.an.asset’s.fair.value.less.costs.to.sell.
and.value.in.use..For.the.purposes.of.assessing.
impairment,.assets.are.grouped.at.the.lowest.levels.
for.which.there.are.separately.identifiable.cash.
flows.which.are.largely.independent.of.the.cash.
flows.from.other.assets.or.groups.of.assets.(cash.
generating.units)..Non-financial.assets.other.than.
goodwill.that.suffered.an.impairment.are.reviewed.
for.possible.reversal.of.the.impairment.at.each.
reporting.date.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
60
1 Summary of significant accounting policies
(l) Inventories
(n) Derivatives
(continued)
(j) Cash and cash equivalents
.
.For.the.purpose.of.presentation.in.the.statement.
of.cash.flows,.cash.and.cash.equivalents.includes.
cash.on.hand,.term.deposits.and.deposits.held.at.
call.with.financial.institutions,.other.short-term,.
highly.liquid.investments.with.original.maturities.
of.three.months.or.less.that.are.readily.convertible.
to.known.amounts.of.cash.and.which.are.subject.
to.an.insignificant.risk.of.changes.in.value.and.
bank.overdrafts..Bank.overdrafts.are.shown.within.
borrowings.in.current.liabilities.on.the.balance.
sheet.
.
.
.
.Raw.materials.and.stores,.work.in.progress.and.
finished.goods.are.stated.at.the.lower.of.cost.
and.net.realisable.value..Cost.comprises.direct.
materials,.direct.labour.and.an.appropriate.
proportion.of.variable.and.fixed.overhead.
expenditure,.the.latter.being.allocated.on.the.basis.
of.normal.operating.capacity..Costs.are.assigned.
to.individual.items.of.inventory.on.the.basis.of.
weighted.average.costs.
.Derivatives.are.initially.recognised.at.fair.value.on.
the.date.a.derivative.contract.is.entered.into.and.
are.subsequently.remeasured.to.their.fair.value.
at.each.reporting.date..Derivative.instruments.
entered.into.by.the.Group.do.not.qualify.for.hedge.
accounting..Changes.in.the.fair.value.of.any.
derivative.instrument.that.does.not.qualify.for.
hedge.accounting.are.recognised.immediately.in.
the.income.statement.and.are.included.in.income.
or.finance.expense.
.Net.realisable.value.is.the.estimated.selling.price.in.
the.ordinary.course.of.business.less.the.estimated.
costs.of.completion.and.the.estimated.costs.
necessary.to.make.the.sale.
(o) Non-current assets (or disposal groups)
held for sale
(k) Trade receivables
(m) Financial assets
.
.
.
.
.Trade.receivables.are.recognised.initially.at.fair.
value.and.subsequently.measured.at.amortised.
cost,.less.provision.for.doubtful.receivables..Trade.
receivables.are.typically.due.for.settlement.no.more.
than.30.to.45.days.from.the.end.of.the.month.of.
invoice.
.The.Group.classifies.its.financial.assets.in.the.
following.categories:.loans.and.receivables,.and.
financial.assets.at.fair.value.through.profit.or.
loss..The.classification.depends.on.the.purpose.
for.which.the.financial.assets.were.acquired..
Management.determines.the.classification.of.its.
financial.assets.at.initial.recognition.
.The.collectibility.of.trade.receivables.is.
reviewed.regularly..Debts.which.are.known.to.
be.uncollectible.are.written.off.by.reducing.the.
carrying.amount.directly..A.provision.for.doubtful.
receivables.is.established.when.there.is.objective.
evidence.that.the.Group.will.not.be.able.to.collect.
all.amounts.due.according.to.the.original.terms.
of.receivables..Significant.financial.difficulties.of.
the.debtor,.probability.that.the.debtor.will.enter.
bankruptcy.or.financial.reorganisation,.and.default.
or.delinquency.in.payments.are.considered.
indicators.that.the.trade.receivable.is.impaired..The.
amount.of.the.provision.is.the.difference.between.
the.asset’s.carrying.amount.and.the.estimated.cash.
flows..Cash.flows.relating.to.short.term.receivables.
are.not.discounted.if.the.effect.of.discounting.is.
immaterial.
.The.amount.of.the.provision.is.recognised.in.the.
income.statement..When.a.trade.receivable.for.
which.a.provision.for.doubtful.receivables.has.been.
recognised.becomes.uncollectible.in.a.subsequent.
period,.it.is.written.off.against.the.provision.
account..Subsequent.recoveries.of.amounts.
previously.written.off.are.credited.against.expenses.
in.the.income.statement.
(i) Loans and receivables
Loans.and.receivables.are.non-derivative.financial.
assets.with.fixed.or.determinable.payments.that.are.
not.quoted.in.an.active.market..They.are.included.
in.current.assets,.except.for.those.with.maturities.
greater.than.12.months.after.the.balance.sheet.
date,.which.are.classified.as.non-current.assets..
Loans.and.receivables.are.included.in.trade.and.
other.receivables.in.the.balance.sheet.
(ii) Financial assets at fair value through profit or loss
Financial.assets.at.fair.value.through.profit.or.loss.
are.financial.assets.held.for.trading..A.financial.
asset.is.classified.in.this.category.if.acquired.
principally.for.the.purpose.of.selling.in.the.short.
term..Derivatives.are.classified.as.held.for.trading.
unless.they.are.designated.as.hedges..Assets.in.
this.category.are.classified.as.current.assets.where.
they.are.expected.to.be.realised.within.12.months.
of.balance.sheet.date.
.
.
.
.
.Non-current.assets.(or.disposal.groups).are.
classified.as.held.for.sale.and.stated.at.the.lower.
of.their.carrying.amount.and.fair.value.less.costs.
to.sell.if.their.carrying.amount.will.be.recovered.
principally.through.a.sale.transaction.rather.than.
through.continuing.use.and.a.sale.is.considered.
highly.probable.
.An.impairment.loss.is.recognised.for.any.initial.or.
subsequent.write.down.of.the.asset.(or.disposal.
group).to.fair.value.less.costs.to.sell..A.gain.is.
recognised.for.any.subsequent.increases.in.fair.
value.less.costs.to.sell.of.an.asset.(or.disposal.
group),.but.not.in.excess.of.any.cumulative.
impairment.loss.previously.recognised..A.gain.or.
loss.not.previously.recognised.by.the.date.of.the.
sale.of.the.non-current.asset.(or.disposal.group).is.
recognised.at.the.date.of.de-recognition.
.Non-current.assets.(including.those.that.are.part.of.
a.disposal.group).are.not.depreciated.or.amortised.
while.they.are.classified.as.held.for.sale..Interest.
and.other.expenses.attributable.to.the.liabilities.of.
a.disposal.group.classified.as.held.for.sale.continue.
to.be.recognised.
.Non-current.assets.classified.as.held.for.sale.and.
the.assets.of.a.disposal.group.classified.as.held.for.
sale.are.presented.separately.from.the.other.assets.
in.the.balance.sheet..The.liabilities.of.a.disposal.
group.classified.as.held.for.sale.are.presented.
separately.from.other.liabilities.in.the.balance.
sheet.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
61
1 Summary of significant accounting policies
.
(continued)
(p) Property, plant and equipment
.
.
.Property,.plant.and.equipment.are.shown.at.
historical.cost.less.accumulated.depreciation.and.
accumulated.impairment.losses..Cost.includes.
expenditure.that.is.directly.attributable.to.the.
acquisition.of.the.assets.
.Subsequent.costs.are.included.in.the.asset’s.
carrying.amount.or.recognised.as.a.separate.asset,.
as.appropriate,.only.when.it.is.probable.that.future.
economic.benefits.associated.with.the.item.will.
flow.to.the.Group.and.the.cost.of.the.item.can.be.
measured.reliably..The.carrying.amount.of.any.
component.accounted.for.as.a.separate.asset.is.
derecognised.when.replaced..All.other.repairs.and.
maintenance.are.charged.to.profit.or.loss.during.
the.reporting.period.in.which.they.are.incurred.
.
(i) Mineral reserves
Mineral.reserves.are.amortised.based.on.annual.
extraction.rates.over.the.estimated.life.of.the.
reserves..The.remaining.useful.life.of.each.asset.
is.reassessed.at.regular.intervals..Where.there.is.
a.change.during.the.period.to.the.useful.life.of.the.
mineral.reserve,.amortisation.rates.are.adjusted.
prospectively.from.the.beginning.of.the.reporting.
period.
(ii) Complex assets
The.costs.of.replacing.major.components.of.
complex.assets.are.depreciated.over.the.estimated.
useful.life,.generally.being.the.period.until.next.
scheduled.replacement.
(iii) Leasehold property
The.cost.of.improvements.to.or.on.leasehold.
properties.is.amortised.over.the.unexpired.period.of.
the.lease.or.the.estimated.useful.life,.whichever.is.
the.shorter..Amortisation.is.over.5.-.30.years.
(iv) Other fixed assets
Freehold.land.is.not.depreciated..Depreciation.
on.other.assets.is.calculated.using.the.straight.
line.method.to.allocate.their.cost.or.deemed.cost.
amounts,.over.their.estimated.useful.lives,.as.
follows:
n. Buildings..
n. Plant.and.equipment..
n. Leased.plant.and.equipment..
20.-.40.years
3.-.40.years
6.-.10.years
.
.The.assets’.residual.values.and.useful.lives.are.
reviewed,.and.adjusted.if.appropriate,.at.each.
balance.sheet.date..An.asset’s.carrying.amount.is.
written.down.immediately.to.its.recoverable.amount.
if.the.asset’s.carrying.amount.is.greater.than.its.
estimated.recoverable.amount.(note.1(i))..Gains.and.
losses.on.disposals.are.determined.by.comparing.
proceeds.with.carrying.amount..These.are.included.
in.the.income.statement.
(q) Intangible assets
(i) Goodwill
Goodwill.is.measured.as.described.in.note.1(h)..
Goodwill.on.acquisitions.of.subsidiaries.is.included.
in.intangible.assets..Goodwill.on.acquisition.of.
joint.ventures.is.included.in.investments.in.joint.
ventures.
.Goodwill.is.not.amortised..Instead,.goodwill.is.
tested.for.impairment.annually.or.more.frequently.
if.events.or.changes.in.circumstances.indicate.
that.it.might.be.impaired,.and.is.carried.at.cost.
less.accumulated.impairment.losses..Gains.and.
losses.on.the.disposal.of.an.entity.include.the.
carrying.amount.of.goodwill.relating.to.the.entity.
sold..Goodwill.is.allocated.to.cash-generating.units.
which.are.expected.to.benefit.from.the.business.
combination.in.which.the.goodwill.arose,.for.the.
purpose.of.impairment.testing..Each.of.those.cash-
generating.units.are.consistent.with.the.Group’s.
reporting.segments.
(ii) Lease rights
Lease.rights.acquired.have.a.finite.useful.life..
Amortisation.is.calculated.using.the.straight-line.
method.to.allocate.the.cost.over.their.estimated.
useful.lives,.which.varies.from.2.to.20.years.
(iii) IT development and software
Costs.incurred.in.developing.products.or.systems.
and.costs.incurred.in.acquiring.software.and.
licences.that.will.contribute.to.future.period.
financial.benefits.through.revenue.generation.and/
or.cost.reduction.are.capitalised.to.software.and.
systems..Costs.capitalised.include.external.direct.
costs.of.materials.and.service.and.direct.payroll.
and.payroll.related.costs.of.employees’.time.spent.
on.the.project..Amortisation.is.calculated.on.a.
straight-line.basis.over.periods.generally.ranging.
from.5.to.10.years.
.IT.development.costs.include.only.those.costs.
directly.attributable.to.the.development.phase.
and.are.only.recognised.following.completion.of.
technical.feasibility.and.where.the.Group.has.an.
intention.and.ability.to.use.the.asset.
(r) Borrowings
.
.Borrowings.are.initially.recognised.at.fair.value,.
net.of.transaction.costs.incurred..Borrowings.are.
subsequently.measured.at.amortised.cost..Any.
difference.between.the.proceeds.(net.of.transaction.
costs).and.the.redemption.amount.is.recognised.
in.the.income.statement.over.the.period.of.the.
borrowings.using.the.effective.interest.method..
Borrowings.are.classified.as.current.liabilities.
unless.the.Group.has.an.unconditional.right.to.
defer.settlement.of.the.liability.for.at.least.12.
months.after.the.reporting.date.
(s) Borrowing costs
.
.Borrowing.costs.incurred.for.the.construction.of.
any.qualifying.asset.are.capitalised.during.the.
period.of.time.that.is.required.to.complete.and.
prepare.the.asset.for.its.intended.use.or.sale..Other.
borrowing.costs.are.expensed.
(t) Trade and other payables
.
.These.amounts.represent.liabilities.for.goods.and.
services.provided.to.the.Group.prior.to.the.end.of.
financial.year.which.are.unpaid..The.amounts.are.
unsecured.and.are.usually.paid.within.30.-.60.days.
of.recognition.
(u) Provisions
.
.
.
.Provisions.are.recognised.if,.as.a.result.of.a.past.
event,.the.Group.has.a.present.legal.or.constructive.
obligation.that.can.be.estimated.reliably,.and.it.is.
probable.that.an.outflow.of.economic.benefits.will.
be.required.to.settle.the.obligation.
.Where.there.are.a.number.of.similar.obligations,.
the.likelihood.that.an.outflow.will.be.required.in.
settlement.is.determined.by.considering.the.class.
of.obligations.as.a.whole..A.provision.is.recognised.
even.if.the.likelihood.of.an.outflow.with.respect.
to.any.one.item.included.in.the.same.class.of.
obligations.may.be.small.
.Provisions.are.measured.at.the.present.value.of.
management’s.best.estimate.of.the.expenditure.
required.to.settle.the.present.obligation.at.the.
reporting.date..Provisions.are.determined.by.
discounting.the.expected.future.cash.flows.
at.a.pre-tax.rate.that.reflects.current.market.
assessments.of.the.time.value.of.money.and.the.
risks.specific.to.the.liability..The.increase.in.the.
provision.due.to.the.passage.of.time.is.recognised.
as.interest.expense.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
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62
1 Summary of significant accounting policies
(v) Employee benefits
(continued)
(u) Provisions (continued)
(i) Dividends
Provision.is.made.for.the.amount.of.any.dividend.
declared,.being.appropriately.authorised.and.no.
longer.at.the.discretion.of.the.entity,.on.or.before.
the.end.of.the.period.but.not.distributed.at.balance.
date.
(ii) Workers’ compensation
Certain.entities.within.the.Group.are.self.insured.for.
workers.compensation.purposes..For.self-insured.
entities,.provision.is.made.that.covers.accidents.
that.have.occurred.and.have.been.reported.
together.with.an.allowance.for.incurred.but.not.
reported.claims..The.provision.is.based.on.an.
actuarial.assessment.
(iii) Restructuring costs
Liabilities.arising.directly.from.undertaking.a.
restructuring.program,.not.in.connection.with.the.
acquisition.of.an.entity,.are.recognised.when.a.
detailed.plan.has.been.developed,.implementation.
has.commenced,.by.entering.into.binding.
sales.agreement.or.making.detailed.public.
announcements.such.that.the.affected.parties.
are.in.no.doubt.that.the.restructuring.program.
will.proceed..The.cost.of.a.restructuring.program.
provided.for.is.the.estimated.future.cash.flows.from.
implementation.of.the.plan.
(iv) Provisions for close down and restoration costs
Close.down.and.restoration.costs.include.the.
dismantling.and.demolition.of.infrastructure.and.
the.removal.of.residual.materials.and.remediation.
of.disturbed.areas..Provisions.for.close.down.and.
restoration.costs.do.not.include.any.additional.
obligations.which.are.expected.to.arise.from.future.
disturbance..The.costs.are.estimated.on.the.basis.
of.a.closure.plan..The.cost.estimates.are.reviewed.
annually.during.the.life.of.the.operation,.based.on.
the.net.present.value.of.estimated.future.costs.
.
.
.Estimate.changes.resulting.from.new.disturbance,.
updated.cost.estimates,.changes.to.the.lives.of.
operations.and.revisions.to.discount.rates.are.
capitalised.within.property,.plant.and.equipment..
These.costs.are.then.depreciated.over.the.lives.of.
the.assets.to.which.they.relate.
.
.The.amortisation.or.‘unwinding’.of.the.discount.
applied.in.establishing.the.net.present.value.of.
provisions.is.charged.to.the.income.statement.in.
each.accounting.period..The.amortisation.of.the.
discount.is.shown.in.finance.costs.
(i) Short-term obligations
Liabilities.for.wages.and.salaries,.including.non-
monetary.benefits,.annual.leave.and.accumulating.
sick.leave.expected.to.be.settled.within.12.months.
after.the.end.of.the.period.in.which.the.employees.
render.the.related.service.are.recognised.in.
respect.of.employees’.services.up.to.the.end.of.the.
reporting.period.and.are.measured.at.the.amounts.
expected.to.be.paid.when.the.liabilities.are.settled..
The.liability.for.annual.leave.and.accumulating.sick.
leave.is.recognised.in.the.provision.for.employee.
benefits..All.other.short-term.employee.benefit.
obligations.are.presented.as.payables.
(ii) Other long-term employee benefit obligations
The.liability.for.long.service.leave.and.annual.
leave.which.is.not.expected.to.be.settled.within.
12.months.after.the.end.of.the.period.in.which.
the.employees.render.the.related.service.is.
recognised.in.the.provision.for.employee.benefits.
and.measured.as.the.present.value.of.expected.
future.payments.to.be.made.in.respect.of.services.
provided.by.employees.up.to.the.end.of.the.
reporting.period.using.the.projected.unit.credit.
method..Consideration.is.given.to.expected.future.
wage.and.salary.levels,.experience.of.employee.
departures.and.periods.of.service..Expected.future.
payments.are.discounted.using.market.yields.at.the.
end.of.the.reporting.period.on.national.government.
bonds.with.terms.to.maturity.and.currency.that.
match,.as.closely.as.possible,.the.estimated.future.
cash.outflows.
.
.
.
.
.
.The.present.value.of.the.defined.benefit.obligation.
is.based.on.expected.future.payments,.which.arise.
from.membership.of.the.fund.to.the.reporting.date,.
calculated.annually.by.independent.actuaries.using.
the.projected.unit.credit.method..Consideration.is.
given.to.expected.future.wage.and.salary.levels,.
experience.of.employee.departures.and.periods.of.
service.
.Expected.future.payments.are.discounted.using.
market.yields.at.the.reporting.date.on.national.
government.bonds.with.terms.to.maturity.and.
currency.that.match,.as.closely.as.possible,.the.
estimated.future.cash.outflows.
.Actuarial.gains.and.losses.arising.from.experience.
adjustments.and.changes.in.actuarial.assumptions.
are.recognised.in.the.period.in.which.they.occur,.
outside.profit.or.loss.directly.in.the.statement.of.
comprehensive.income.
.Past.service.costs.are.recognised.immediately.
in.profit.or.loss,.unless.the.changes.to.the.
superannuation.fund.are.conditional.on.the.
employees.remaining.in.service.for.a.specified.
period.of.time.(the.vesting.period)..In.this.case,.the.
past.service.costs.are.amortised.on.a.straight-line.
basis.over.the.vesting.period.
.Contributions.to.the.defined.contribution.fund.are.
recognised.as.an.expense.as.they.become.payable..
Prepaid.contributions.are.recognised.as.an.asset.to.
the.extent.that.a.cash.refund.or.a.reduction.in.the.
future.payments.is.available.
(iii) Retirement benefit obligations
(iv) Share-based payments
Except.those.employees.that.opt.out.of.the.
Group’s.superannuation.plan,.all.employees.of.the.
Group.are.entitled.to.benefits.from.the.Group’s.
superannuation.plan.on.retirement,.disability.or.
death..The.Group.has.a.defined.benefit.section.
and.defined.contribution.section.within.its.plan..
The.defined.benefit.section.provides.defined.lump.
sum.benefits.on.retirement,.death,.disablement.
and.withdrawal,.based.on.years.of.service.and.final.
average.salary..The.defined.benefit.plan.section.is.
closed.to.new.members..The.defined.contribution.
section.receives.fixed.contributions.from.Group.
companies.and.the.Group’s.legal.or.constructive.
obligation.is.limited.to.these.contributions.
.
.
.A.liability.or.asset.in.respect.of.defined.benefit.
superannuation.plans.is.recognised.in.the.balance.
sheet,.and.is.measured.as.the.present.value.of.the.
defined.benefit.obligation.at.the.reporting.date.less.
the.fair.value.of.the.superannuation.fund’s.assets.
at.that.date.and.any.unrecognised.past.service.
cost.
Share-based.compensation.benefits.are.provided.to.
executives.via.the.Adelaide.Brighton.Ltd.Executive.
Performance.Share.Plan.(“the.Plan”).
.The.fair.value.of.Awards.granted.under.the.Plan.is.
recognised.as.an.employee.benefit.expense.with.
a.corresponding.increase.in.equity..The.fair.value.
is.measured.at.grant.date.and.recognised.over.
the.period.during.which.the.employees.become.
unconditionally.entitled.to.the.Awards.
.The.fair.value.at.grant.date.is.independently.
determined.using.a.pricing.model.that.takes.into.
account.the.exercise.price,.the.term.of.the.Award,.
the.vesting.and.performance.criteria,.the.impact.
of.dilution,.the.non-tradeable.nature.of.the.Award,.
the.share.price.at.grant.date,.the.expected.dividend.
yield.and.the.risk-free.interest.rate.for.the.term.of.
the.Award.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
63
1 Summary of significant accounting policies
(x) Earnings per share
(aa) Financial guarantee contracts
(continued)
(v) Employee benefits (continued)
.
.The.fair.value.of.the.Awards.granted.excludes.
the.impact.of.any.non-market.vesting.conditions.
(e.g..earnings.per.share)..Non-market.vesting.
conditions.are.included.in.assumptions.about.the.
number.of.Awards.that.are.expected.to.become.
exercisable..At.each.balance.sheet.date,.the.entity.
revises.its.estimate.of.the.number.of.Awards.
that.are.expected.to.become.exercisable..The.
employee.benefit.expense.recognised.each.period.
takes.into.account.the.most.recent.estimate..The.
impact.of.the.revision.to.original.estimates,.if.
any,.is.recognised.in.the.income.statement.with.a.
corresponding.entry.to.equity.
(i) Basic earnings per share
.
Basic.earnings.per.share.is.calculated.by.dividing.
the.profit.attributable.to.equity.holders.of.the.
Company,.excluding.any.costs.of.servicing.equity.
other.than.ordinary.shares,.by.the.weighted.
average.number.of.ordinary.shares.outstanding.
during.the.year.
.Financial.guarantee.contracts.are.recognised.
as.a.financial.liability.at.the.time.the.guarantee.
is.issued..The.liability.is.initially.measured.at.
fair.value.and.subsequently.at.the.higher.of.the.
amount.determined.in.accordance.with.AASB.137.
Provisions, Contingent Liabilities and Contingent
Assets.and.the.amount.initially.recognised.less.
cumulative.amortisation,.where.appropriate.
(ii) Diluted earnings per share
Diluted.earnings.per.share.adjusts.the.figures.used.
in.the.determination.of.basic.earnings.per.share.
to.take.into.account.the.after.income.tax.effect.of.
interest.and.other.financing.costs.associated.with.
dilutive.potential.ordinary.shares.and.the.weighted.
average.number.of.shares.assuming.conversion.of.
all.dilutive.potential.ordinary.shares.
(ab) Carbon Accounting
.
.
.
.
.An.entity.within.the.Group.is.a.Liable.Entity.under.
the.Clean.Energy.Legislation.(the.Scheme).and.
also.qualifies.for.assistance.under.the.Jobs.and.
Competitiveness.Program.(JCP)..The.Group.is.
required.to.surrender.eligible.emission.units.to.the.
Clean.Energy.Regulator.(the.Regulator).for.covered.
emissions,.while.units.are.available.based.upon.
production.volumes.of.eligible.products.
(i) Provision for Carbon Emissions
Where.a.facility.is.anticipated.to.produce.covered.
emissions.in.excess.of.the.threshold.in.an.
assessment.year,.a.provision.is.recognised.for.
the.cost.of.eligible.emission.units.as.covered.
emissions.are.emitted..A.provision.for.unit.shortfall.
charges.is.recognised.at.the.time.a.shortfall.in.
units.surrendered.to.the.Regulator.occurs.or.at.the.
time.a.shortfall.has.been.identified..The.provision.
is.recognised.in.the.income.statement.as.incurred.
unless.qualifying.for.an.alternative.treatment.under.
another.accounting.standard.or.policy.
.The.measurement.of.the.provision.for.carbon.
emissions.is.in.accordance.with.the.Group’s.
accounting.policy.for.provisions,.see.note.1(u).
(ii) Carbon Unit Asset
An.asset.is.recognised.at.fair.value.for.JCP.units.
as.they.are.received.or.become.receivable..Units.
received.in.advance.are.recognised.as.deferred.
income.and.released.to.the.income.statement.as.
eligible.production.activity.is.undertaken.
.During.the.initial.fixed.price.period.of.the.Clean.
Energy.Legislation,.units.purchased.from.the.
Regulator.are.automatically.surrendered.to.the.
Regulator.as.a.remission.of.liability.under.the.
scheme.and.are.recognised.as.a.reduction.of.the.
provision.for.carbon.emissions.
.Carbon.units.are.classified.into.current.and.
non-current.based.upon.the.anticipated.timing.of.
disposal.of.the.unit,.either.through.remission.of.
liability.under.the.Scheme.or.sale.
.
.The.Plan.is.administered.by.the.Adelaide.Brighton.
employee.share.plan.trust;.see.note.1(b)(ii).
(y) Rounding of amounts
.
.The.Company.is.of.a.kind.referred.to.in.Class.Order.
98/100,.issued.by.the.Australian.Securities.and.
Investments.Commission,.relating.to.the.“rounding.
off’’.of.amounts.in.the.financial.report..Amounts.
in.the.financial.report.have.been.rounded.off.in.
accordance.with.that.Class.Order.to.the.nearest.
one.hundred.thousand.dollar,.unless.otherwise.
stated.
(z) Goods and Services Tax (GST)
.
.
.
.Revenues,.expenses.and.assets.are.recognised.
net.of.the.amount.of.associated.GST,.unless.the.
GST.incurred.is.not.recoverable.from.the.taxation.
authority..In.this.case.it.is.recognised.as.part.of.
the.cost.of.acquisition.of.the.asset.or.as.part.of.the.
expense.
.Receivables.and.payables.are.stated.inclusive.of.
the.amount.of.GST.receivable.or.payable..The.net.
amount.of.GST.recoverable.from,.or.payable.to,.the.
taxation.authority.is.included.with.other.receivables.
or.payables.in.the.balance.sheet.
.Cash.flows.are.presented.on.a.gross.basis..
The.GST.components.of.cash.flows.arising.
from.investing.or.financing.activities.which.are.
recoverable.from,.or.payable.to.the.taxation.
authority,.are.presented.as.operating.cash.flows.
(v) Short-term incentives
The.Group.recognises.a.liability.and.an.
expense.for.short-term.incentives.available.to.
certain.employees.on.a.formula.that.takes.into.
consideration.agreed.performance.targets..The.
Group.recognises.a.provision.where.contractually.
obliged.or.where.there.is.a.past.practice.that.has.
created.a.constructive.obligation.
(vi) Termination benefits
Termination.benefits.are.payable.when.employment.
is.terminated.before.the.normal.retirement.date,.or.
when.an.employee.accepts.voluntary.redundancy.in.
exchange.for.these.benefits..The.Group.recognises.
termination.benefits.when.it.is.demonstrably.
committed.to.either.terminating.the.employment.of.
current.employees.according.to.a.detailed.formal.
plan.without.possibility.of.withdrawal.or.providing.
termination.benefits.as.a.result.of.an.offer.made.to.
encourage.voluntary.redundancy..Benefits.falling.
due.more.than.12.months.after.balance.sheet.date.
are.discounted.to.present.value.
(w) Contributed equity
.
.Ordinary.shares.are.classified.as.equity..
Incremental.costs.directly.attributable.to.the.issue.
of.new.shares.or.options.are.shown.in.equity.
as.a.deduction,.net.of.tax,.from.the.proceeds..
Incremental.costs.directly.attributable.to.the.
issue.of.new.shares.or.options,.for.the.purpose.
of.acquisition.of.a.business,.are.not.included.in.
the.cost.of.the.acquisition.as.part.of.the.purchase.
consideration.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
64
1 Summary of significant accounting policies
(continued)
(ac) Parent entity financial information
.
.
.
.
.The.financial.information.for.the.parent.entity,.
Adelaide.Brighton.Limited.(“the.Company”),.
disclosed.in.note.40.has.been.prepared.on.
the.same.basis.as.the.consolidated.financial.
statements,.except.as.set.out.below.
(i) Investments in subsidiaries, associates and joint
venture entities
Investments.in.subsidiaries,.associates.and.joint.
venture.entities.are.accounted.for.at.cost.in.
the.financial.statements.of.the.Company..Such.
investments.include.both.investments.in.shares.
issued.by.the.subsidiary.and.other.parent.entity.
interests.that.in.substance.form.part.of.the.
parent.entity’s.investment.in.the.subsidiary..These.
include.investments.in.the.form.of.interest-free.
loans.which.have.no.fixed.repayment.terms.and.
which.have.been.provided.to.subsidiaries.as.
an.additional.source.of.long.term.capital..Trade.
amounts.receivable.from.subsidiaries.in.the.normal.
course.of.business.and.other.amounts.advanced.
on.commercial.terms.and.conditions.are.included.
in.receivables..Dividends.received.from.associates.
are.recognised.in.the.parent.entity’s.profit.or.loss,.
rather.than.being.deducted.from.the.carrying.
amount.of.these.investments.
(ii) Tax consolidation legislation
The.Company.and.its.wholly-owned.Australian.
controlled.entities.have.implemented.the.tax.
consolidation.legislation.
.The.Company.and.the.controlled.entities.in.the.tax.
consolidated.group.account.for.their.own.current.
and.deferred.tax.amounts..These.tax.amounts.are.
measured.as.if.each.entity.in.the.tax.consolidated.
group.continues.to.be.a.stand.alone.taxpayer.in.its.
own.right.
.In.addition.to.its.own.current.and.deferred.tax.
amounts,.the.Company.also.recognises.the.current.
tax.liabilities.(or.assets).and.the.deferred.assets.
arising.from.unused.tax.losses.and.unused.tax.
credits.assumed.from.controlled.entities.in.the.tax.
consolidated.group.
.The.entities.have.also.entered.into.a.tax.funding.
agreement.under.which.the.wholly-owned.entities.
fully.compensate.the.Company.for.any.current.
tax.payable.assumed.and.are.compensated.by.
Adelaide.Brighton.Limited.for.any.current.tax.
receivable.and.deferred.tax.assets.relating.to.
.
.
.
.
.
unused.tax.losses.or.unused.tax.credits.that.are.
transferred.to.Adelaide.Brighton.Limited.under.the.
tax.consolidation.legislation..The.funding.amounts.
are.determined.by.reference.to.the.amounts.
recognised.in.the.wholly-owned.entities’.financial.
statements.
.
.
.
.The.amounts.receivable/payable.under.the.tax.
funding.agreement.are.due.upon.receipt.of.the.
funding.advice.from.the.head.entity,.which.is.
issued.as.soon.as.practicable.after.the.end.of.each.
financial.year..The.head.entity.may.also.require.
payment.of.interim.funding.amounts.to.assist.with.
its.obligations.to.pay.tax.instalments.
.Assets.or.liabilities.arising.under.tax.funding.
agreements.with.the.tax.consolidated.entities.are.
recognised.as.current.amounts.receivable.from.or.
payable.to.other.entities.in.the.group.
.Any.difference.between.the.amounts.assumed.
and.amounts.receivable.or.payable.under.the.tax.
funding.agreement.are.recognised.as.a.contribution.
to.(or.distribution.from).wholly-owned.tax.
consolidated.entities.
(iii) Financial guarantees
Where.the.Company.has.provided.financial.
guarantees.in.relation.to.loans.and.payables.
of.subsidiaries.for.no.compensation,.the.fair.
values.of.these.guarantees.are.accounted.for.as.
contributions.and.recognised.as.part.of.the.cost.of.
the.investment.
(iv) Share based payments
The.grant.by.the.Company.of.options.over.its.
equity.instruments.to.employees.of.subsidiary.
undertakings.in.the.Group.is.treated.as.a.receivable.
from.that.subsidiary.undertaking.
(ad) New accounting standards and
interpretations
.
.Certain.new.accounting.standards.and.
interpretations.have.been.published.that.are.
not.mandatory.for.31.December.2012.reporting.
periods..The.Group’s.assessment.of.the.impact.of.
these.new.standards.and.interpretations.is.set.out.
below.
n. AASB.9 Financial Instruments,.AASB.2009-11.
Amendments to Australian Accounting Standards
arising from AASB 9,.AASB.2010-7.Amendments
to Australian Accounting Standards arising from
AASB 9 (December 2010).and.AASB.2012-6.
Amendments to Australian Accounting Standards -
Mandatory Effective Date of AASB 9 and Transition
Disclosures.(effective.for.annual.reporting.periods.
beginning.on.or.after.1.January.2015)
.AASB.9.Financial Instruments.addresses.the.
classification,.measurement.and.derecognition.
of.financial.assets.and.financial.liabilities..The.
standard.is.not.applicable.until.1.January.2015.
but.is.available.for.early.adoption..When.adopted,.
the.standard.will.not.have.a.material.impact.on.
the.financial.statements..The.Group.has.not.yet.
decided.when.to.adopt.AASB.9.
n. AASB.1053.Application of Tiers of Australian
Accounting Standards.and.AASB.2010-2.
Amendments to Australian Accounting Standards
arising from Reduced Disclosure Requirements.
(effective.1.July.2013)
.On.30.June.2010.the.AASB.officially.introduced.
a.revised.differential.reporting.framework.in.
Australia..Under.this.framework,.a.two-tier.
differential.reporting.regime.applies.to.all.entities.
that.prepare.general.purpose.financial.statements..
The.Company.is.listed.on.the.ASX.and.is.therefore.
not.eligible.to.adopt.the.new.Australian.Accounting.
Standards.-.Reduced.Disclosure.Requirements..
As.a.consequence,.the.two.standards.will.have.no.
impact.on.the.financial.statements.of.the.Group.
n. AASB.10.Consolidated Financial Statements,.
AASB.11.Joint Arrangements,.AASB.12.Disclosure
of Interests in Other Entities,.revised.AASB.127.
Separate Financial Statements.and.AASB.128.
Investments in Associates and Joint Ventures,.AASB.
2011-7.Amendments to Australian Accounting
Standards arising from the Consolidation and Joint
Arrangements Standards.and.AASB.2012-10.
Amendments to Australian Accounting Standards
- Transition guidance and other Amendments.
(effective.1.January.2013)
.In.August.2011,.the.AASB.issued.a.suite.of.five.
new.and.amended.standards.which.address.the.
accounting.for.joint.arrangements,.consolidated.
financial.statements.and.associated.disclosures.
.AASB.10.replaces.all.of.the.guidance.on.control.
and.consolidation.in.AASB.127.Consolidated and
Separate Financial Statements,.and.Interpretation.
12.Consolidation - Special Purpose Entities..The.
core.principle.that.a.consolidated.entity.presents.
a.parent.and.its.subsidiaries.as.if.they.are.a.single.
economic.entity.remains.unchanged,.as.do.the.
mechanics.of.consolidation..However,.the.standard.
introduces.a.single.definition.of.control.that.applies.
to.all.entities..It.focuses.on.the.need.to.have.both.
power.and.rights.or.exposure.to.variable.returns.
before.control.is.present..Power.is.the.current.
ability.to.direct.the.activities.that.significantly.
influence.returns..Returns.must.vary.and.can.
be.positive,.negative.or.both..There.is.also.new.
guidance.on.participating.and.protective.rights.and.
on.agent/principal.relationships.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
65
n. AASB.2011-9.Amendments to Australian
Accounting Standards - Presentation of Items of
Other Comprehensive Income (effective.1.July.
2012)
.In.September.2011,.the.AASB.made.an.
amendment.to.AASB.101.Presentation of Financial
Statements.which.requires.entities.to.separate.
items.presented.in.other.comprehensive.income.
into.two.groups,.based.on.whether.they.may.be.
recycled.to.profit.or.loss.in.the.future..This.will.
not.affect.the.measurement.of.any.of.the.items.
recognised.in.the.balance.sheet.or.the.profit.or.loss.
in.the.current.period..The.Group.intends.to.adopt.
the.new.standard.from.1.January.2013.
n. AASB.2011-4.Amendments to Australian
Accounting Standards to Remove Individual Key
Management Personnel Disclosure Requirements.
(effective.1.July.2013)
.In.July.2011.the.AASB.decided.to.remove.the.
individual.key.management.personnel.(KMP).
disclosure.requirements.from.AASB.124.Related
Party Disclosures,.to.achieve.consistency.with.
the.international.equivalent.standard.and.remove.
a.duplication.of.the.requirements.with.the.
Corporations Act 2001..While.this.will.reduce.the.
disclosures.that.are.currently.required.in.the.notes.
to.the.financial.statements,.it.will.not.affect.any.of.
the.amounts.recognised.in.the.financial.statements..
The.amendments.apply.to.reporting.periods.
beginning.from.1.July.2013.and.cannot.be.adopted.
early.
1 Summary of significant accounting policies
.
(continued)
(ad) New accounting standards and
interpretations (continued)
.
.
.
.
.
.AASB.11.introduces.a.principles.based.approach.to.
accounting.for.joint.arrangements..The.focus.is.no.
longer.on.the.legal.structure.of.joint.arrangements,.
but.rather.on.how.rights.and.obligations.are.shared.
by.the.parties.to.the.joint.arrangement..Based.
on.the.assessment.of.rights.and.obligations,.a.
joint.arrangement.will.be.classified.as.either.a.
joint.operation.or.joint.venture..Joint.ventures.
are.accounted.for.using.the.equity.method,.and.
the.choice.to.proportionately.consolidate.will.no.
longer.be.permitted..Parties.to.a.joint.operation.will.
account.their.share.of.revenues,.expenses,.assets.
and.liabilities.in.much.the.same.way.as.under.the.
previous.standard..AASB.11.also.provides.guidance.
for.parties.that.participate.in.joint.arrangements.but.
do.not.share.joint.control.
.AASB.12.sets.out.the.required.disclosures.for.
entities.reporting.under.the.two.new.standards,.
AASB.10.and.AASB.11,.and.replaces.the.disclosure.
requirements.currently.found.in.AASB.128..
Application.of.this.standard.by.the.Group.will.
not.affect.any.of.the.amounts.recognised.in.the.
financial.statements,.but.will.impact.the.type.of.
information.disclosed.in.relation.to.the.Group’s.
investments.
.AASB.127.is.renamed.Separate Financial
Statements.and.is.now.a.standard.dealing.solely.
with.separate.financial.statements..Application.of.
this.standard.by.the.Group.will.not.affect.any.of.the.
amounts.recognised.in.the.financial.statements.
.
.Amendments.to.AASB.128.provide.clarification.that.
an.entity.continues.to.apply.the.equity.method.and.
does.not.remeasure.its.retained.interest.as.part.of.
ownership.changes.where.a.joint.venture.becomes.
an.associate,.and.vice.versa..The.amendments.also.
introduce.a.“partial.disposal”.concept.
.Application.of.the.standards.is.not.anticipated.to.
have.a.material.impact.on.the.financial.statements..
The.Group.will.adopt.the.new.standards.from1.
January.2013,.therefore.they.will.be.applied.in.the.
financial.statements.for.the.annual.reporting.period.
ending.31.December.2013.
.
n. AASB.13.Fair Value Measurement.and.AASB.2011-
8.Amendments to Australian Accounting Standards
arising from AASB 13.(effective.1.January.2013)
.AASB.13.was.released.in.September.2011..It.
explains.how.to.measure.fair.value.and.aims.to.
enhance.fair.value.disclosures..The.Group.does.
not.use.fair.value.measurements.extensively..
It.is.therefore.unlikely.that.the.new.rules.will.
have.a.significant.impact.on.any.of.the.amounts.
recognised.in.the.financial.statements..However,.
application.of.the.new.standard.will.impact.the.type.
of.information.disclosed.in.the.notes.to.the.financial.
statements..The.Group.will.adopt.the.new.standard.
from.its.operative.date,.which.means.that.it.will.be.
applied.in.the.annual.reporting.period.ending.31.
December.2013.
.
n. Revised.AASB.119.Employee Benefits,.AASB.
2011-10.Amendments to Australian Accounting
Standards arising from AASB 119 (September
2011).and.AASB.2011-11.Amendments to AASB
119 (September 2011) arising from Reduced
Disclosure Requirements.(effective.1.January.
2013)
.In.September.2011,.the.AASB.released.a.revised.
standard.on.accounting.for.employee.benefits..It.
requires.the.recognition.of.all.re-measurements.
of.defined.benefit.liabilities/assets.immediately.
in.other.comprehensive.income.(removal.of.the.
so-called.‘corridor’.method).and.the.calculation.
of.a.net.interest.expense.or.income.by.applying.
the.discount.rate.to.the.net.defined.benefit.
liability.or.asset..This.replaces.the.expected.
return.on.plan.assets.that.is.currently.included.
in.profit.or.loss..The.standard.also.introduces.
a.number.of.additional.disclosures.for.defined.
benefit.liabilities/assets.and.could.affect.the.
timing.of.the.recognition.of.termination.benefits..
The.amendments.will.have.to.be.implemented.
retrospectively..The.application.of.the.standard.
will.not.have.a.material.impact.on.the.financial.
statements..The.Group.will.adopt.the.new.standard.
when.it.becomes.operative,.being.from.1.January.
2013.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
66
1 Summary of significant accounting policies
n. AASB.2012-3.Amendments to Australian
2 Critical accounting estimates and
(continued)
(ad) New accounting standards and
interpretations (continued)
.
n. AASB.Interpretation.20.Stripping Costs in the
Production Phase of a Surface Mine.and.AASB.
2011-12.Amendments to Australian Accounting
Standards arising from Interpretation 20.(effective.
1.January.2013)
.
.Interpretation.20.sets.out.the.accounting.for.
overburden.waste.removal.(stripping).costs.in.the.
production.phase.of.a.mine.(quarry)..It.states.that.
these.costs.can.only.be.recognised.as.an.asset.if.
they.can.be.attributed.to.an.identifiable.component.
of.the.ore.body.(reserve),.the.costs.relating.to.
the.improved.access.to.that.component.can.be.
measured.reliably.and.it.is.probable.that.future.
economic.benefits.associated.with.the.stripping.
activity.(improved.access.to.the.reserve).will.flow.
to.the.entity..The.costs.will.be.amortised.over.the.
life.of.the.identified.component.of.the.reserve..
This.is.different.to.the.Group’s.current.accounting.
policy.which.is.to.capitalise.stripping.costs.and.
amortise.the.costs.at.a.specific.rate.over.the.life.
of.the.quarry..The.interpretation.must.applied.
retrospectively.and.the.Group.will.have.to.write.off.
existing.stripping.cost.asset.balances.to.retained.
earnings.on.the.date.of.transition,.unless.they.
relate.to.an.identifiable.component.of.the.reserve..
Management.estimates.that.the.total.amount.
capitalised.as.at.31.December.2012.of.$4.2.million.
will.need.to.be.written.off,.reducing.total.assets.
and.retained.earnings.by.the.appropriate.after.tax.
amounts.
.
.
.The.group.will.adopt.the.interpretation.from.1.
January.2013.
Accounting Standard - Offsetting Financial
Assets and Financial Liabilities.and.AASB.2012-2.
Disclosures - Offsetting Financial Assets and
Financial Liabilities.(effective.1.January.2014.and.
1.January.2013.respectively)
.
.In.June.2012,.the.AASB.approved.amendments.
to.the.application.guidance.in.AASB.132.Financial.
Instruments:.Presentation,.to.clarify.some.of.the.
requirements.for.offsetting.financial.assets.and.
financial.liabilities.in.the.balance.sheet..These.
amendments.are.effective.from.1.January.2014..
They.are.unlikely.to.affect.the.accounting.for.any.
of.the.Group’s.current.offsetting.arrangements..
However,.the.AASB.has.also.introduced.more.
extensive.disclosure.requirements.into.AASB.7.
which.will.apply.from.1.January.2013..When.they.
become.applicable,.the.Group.will.have.to.provide.
a.number.of.additional.disclosures.in.relation.to.
its.offsetting.arrangements..The.Group.intends.to.
apply.the.new.rules.for.the.first.time.in.the.financial.
year.commencing.1.January.2013.
n. AASB.2012-5.Amendments to Australian
Accounting Standard arising from Annual
Improvements 2009-2011 cycle.(effective.for.
annual.periods.beginning.on.or.after.1.January.
2013)
.In.June.2012,.the.AASB.approved.a.number.of.
amendments.to.Australian.Accounting.Standards.
as.a.result.of.the.2009-2011.annual.improvements.
project..The.Group.will.apply.the.amendments.from.
1.January.2013..Management.does.not.believe.
that.the.application.of.the.standard.will.have.a.
material.impact.on.the.financial.statements.
assumptions
.The.Group.makes.estimates.and.assumptions.
concerning.the.future..The.resulting.accounting.
estimates.will,.by.definition,.seldom.equal.
the.related.actual.results..The.estimates.and.
assumptions.that.are.significant.to.the.carrying.
amounts.of.assets.and.liabilities.in.the.next.
financial.year.are.discussed.below.
(a) Provisions for close down and restoration
costs
.
.Restoration.provisions.are.based.on.estimates.
of.the.cost.to.rehabilitate.currently.disturbed.
areas.based.on.current.costs.and.legislative.
requirements..The.Group.progressively.rehabilitates.
as.part.of.the.mining.process..Cost.estimates.
are.continually.evaluated.and.are.based.on.
historical.experience.and.other.factors,.including.
expectations.of.future.events.that.are.believed.
to.be.reasonable.under.the.circumstances..The.
detailed.accounting.treatment.is.set.out.in.note..
1(u)(iv).
.
.Provisions.for.close.down.and.restoration.costs.at.
the.end.of.the.year.was.$32.2m.(2011:.$32.1m).
(b) Impairment of assets
.
.
.The.Group.tests.annually.whether.goodwill,.other.
intangible.assets.with.an.indefinite.life.and.other.
non-current.assets.have.suffered.any.impairment,.
in.accordance.with.the.accounting.policies.stated.
in.notes.1(i).and.1(q)..The.recoverable.amounts.of.
cash.generating.units.have.been.determined.based.
on.value-in-use.calculations..These.calculations.
require.the.use.of.assumptions..For.detailed.
assumptions.refer.to.note.14.
.Estimates.and.judgements.are.continually.
evaluated.and.are.based.on.historical.experience.
and.other.factors,.including.expectations.of.future.
events.that.may.have.a.financial.impact.on.the.
Group.and.that.are.believed.to.be.reasonable.under.
the.circumstances.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
67
($ Million)
3 Revenue and other income
Revenue from continuing operations
Sales.of.goods.
Interest.from.joint.ventures.
Interest.from.other.parties.
Royalties.
.
.
.
.
.
.
Other income
Insurance.recovery.
Fair.value.accounting.gain.on.prior.year.acquisition.
Other.income.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Revenue.and.other.income.(excluding.share.of.net.profits.of.joint.ventures.and.associate.accounted.for.using.the.equity.method).
4 Expenses
Profit before income tax includes the following specific expenses:
Depreciation
..Buildings.
..Plant.and.equipment.
..Mineral.reserves.
.
.
.
Total.depreciation.
Amortisation.of.intangibles..
Other.charges
..Employee.benefits.expense.
..Operating.lease.rental.charge.
..Bad.and.doubtful.debts.-.trade.debtors.
..Provision.for.inventory.
.
.
.
.
.
.
Finance.costs
..Interest.and.finance.charges.paid./.payable.
..Unwinding.of.the.discount.on.restoration.provisions.and.retirement.benefit.obligation.
.
Total.finance.costs.
..Amount.capitalised.(a).
Finance.costs.expensed.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Consolidated
2012
2011
1,173.2.
0.9.
1.6.
0.5.
1,096.8
1.2
1.2
1.2
1,176.2.
1,100.4
0.2.
7.6.
1.9.
9.7.
2.4
-
10.0
12.4
1,185.9.
1,112.8
3.7.
56.7.
3.7.
64.1.
1.1.
153.4.
3.5.
1.1.
0.3.
18.7.
2.6.
21.3.
(2.4 ).
18.9.
3.4
50.8
2.7
56.9
0.9
144.5
2.9
0.5
0.1
17.2
3.1
20.3
(0.9.)
19.4
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
(a).The.capitalisation.rate.used.to.determine.the.amount.of.borrowing.costs.to.be.capitalised.is.the.average.interest.rate.applicable.to.the.Group’s.outstanding.borrowings.
during.the.year,.in.this.case.5.3%.p.a.(2011:.6.1%.p.a.).
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
68
($ Million)
5 Income tax
(a) Numerical reconciliation of income tax expense to prima facie tax payable
Profit.before.income.tax.expense.
.
Tax.at.the.Australian.tax.rate.of.30%.(2011:.30%).
Tax.effect.of.amounts.which.are.not.deductible.(taxable).in.calculating.taxable.income:
..Non.allowable.expenses.
..Rebateable.dividends.
..Fair.value.adjustment.
..Sundry.items.
(Over)./.under.provided.in.prior.years.
.
.
.
.
.
Aggregate.income.tax.expense..
Aggregate.income.tax.expense.comprises:
..Current.taxation.provision.
..Net.deferred.tax.(note.13.&.21).
..Under.provided.in.prior.year.
.
.
.
.
.
.
(b) Amounts recognised directly in equity
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Aggregate.current.and.deferred.tax.arising.in.the.reporting.period.and.not.recognised.in.net.profit.or.loss.but.directly.(credited).debited.to.equity
..Current.tax.
..Net.deferred.tax.
.
.
.
.
.
.
.
.
.
.
(c) Tax expense (income) relating to items of other comprehensive income
Actuarial.gains.(losses).on.retirement.benefit.obligation.(note.23.(d)).
(d) Tax losses
Unused.tax.losses.for.which.no.deferred.tax.asset.has.been.recognised:
..Capital.losses.
.
.
.
.
.
.
.
.
.
.
Consolidated
2012
2011
209.2.
62.8.
0.3.
(5.3 ).
(2.3 ).
- .
(0.4 ).
55.1.
51.0.
3.0.
1.1.
55.1.
(0.5 ).
(0.1 ).
(0.6 ).
206.4
61.9
0.2
(3.5.)
-
(2.0.)
1.4
58.0
50.5
6.1
1.4
58.0
(0.3.)
(0.1.)
(0.4.)
0.1.
(2.5.)
17.4.
17.3
This.benefit.for.tax.losses.will.only.be.obtained.if:
(i).the.Group.derives.future.assessable.income.of.a.nature.and.of.an.amount.sufficient.to.enable.the.benefit.from.the.deductions.for.the.losses.to.be.realised,
(ii).the.Group.continues.to.comply.with.the.conditions.for.deductibility.imposed.by.tax.legislation,.and.
.
.
. (iii).no.changes.in.tax.legislation.adversely.affect.the.Group.in.realising.the.benefit.from.the.deductions.for.the.losses.
The.accounting.policy.in.relation.to.tax.consolidation.legislation.is.set.out.in.note.1(f).
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
69
($ Million)
6 Current assets - cash and cash equivalents
Cash.at.bank.and.in.hand.
Term.deposits.
Cash.and.cash.equivalents.
.
.
.
(a) Reconciliation to cash at the end of the year
.
.
.
.
.
.
The.above.figures.are.reconciled.to.cash.at.the.end.of.the.financial.year.as.shown.in.the.statement.of.cash.flows.as.follows:
Balances.as.above.
Bank.overdrafts.
.
.
.
.
.
.
Balances.per.statement.of.cash.flows.
.
.
.
(b) Risk exposure
The.Group’s.exposure.to.interest.rate.risk.is.discussed.in.note.27..The.maximum.exposure.to.credit.risk.at.the.end.of.the..
reporting.period.is.the.carrying.amount.of.each.class.of.cash.and.cash.equivalents.mentioned.above..
7 Current assets - trade and other receivables
Trade.receivables.
Provision.for.doubtful.receivables.
.
Amounts.receivable.from.joint.ventures.
Prepayments.
Other.receivables.
.
.
.
.
.
.
.
.
(a) Past due but not impaired
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Consolidated
2012
2011
5.1.
1.9.
7.0.
7.0.
-.
7.0.
9.1
1.9
11.0
11.0
-
11.0
147.2.
(0.7 ).
146.5.
14.8.
5.5.
2.8.
145.2
(1.8.)
143.4
15.6
6.6
3.3
169.6.
168.9
.
.
.
.
.
.
.
.
.
.
.
.
.
Included.in.the.Group’s.trade.receivables.balance.are.debtors.with.a.carrying.value.of.$7.7.million.(2011:.$7.9.million).which.are.past.due.but.not.impaired..The.Group.
has.not.provided.for.these.amounts.as.there.has.not.been.a.significant.change.in.credit.quality.or.the.amounts.relate.to.debtors.for.which.there.is.no.recent.history.of.
default..The.Group.believes.these.amounts.are.still.recoverable..The.ageing.analysis.is.as.follows:.60.days.$7.2.million,.over.90.days.$0.5.million.(2011:.60.days.$7.8.
million,.over.90.days.$0.1.million).
(b) Impaired trade receivables
As.at.31.December.2012.current.trade.receivables.of.the.Group.with.a.nominal.value.of.$1.2.million.(2011.-.$2.3.million).were.impaired..The.amount.of.the.provision.
was.$0.7.million.(2011.-.$1.8.million)..The.individually.impaired.receivables.mainly.relate.to.customers.which.are.in.unexpectedly.difficult.economic.situations..It.was.
assessed.that.a.portion.of.the.receivables.is.expected.to.be.recovered..
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
70
($ Million)
7 Current assets - trade and other receivables (continued)
(b) Impaired trade receivables (continued)
The.ageing.of.these.receivables.is.as.follows:
1.to.3.months.
3.to.6.months.
Over.6.months.
.
.
.
.
.
Movement in provision for doubtful receivables
Opening.balance.at.1.January.
Amounts.written.off.during.the.year.
Provision.for.doubtful.receivables.recognised.during.the.year.
.
.
Closing.balance.at.31.December.
.
Consolidated
2012
2011
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
-.
0.2.
1.0.
1.2.
1.8.
(2.2 ).
1.1.
0.7.
0.1
-
2.2
2.3
2.1
(0.8.)
0.5
1.8
(c) Fair value and credit, interest and foreign exchange risk
Due.to.the.short-term.nature.of.these.receivables,.their.carrying.value.is.assumed.to.approximate.their.fair.value..All.receivables.are..
denominated.in.Australian.dollars..Information.concerning.the.fair.value.and.risk.management.of.both.current.and.non-current..
receivables.is.set.out.in.note.27.
8 Current assets - inventories
Engineering.spare.parts.stores..
Raw.materials.and.work.in.progress..
Finished.goods..
.
.
.
.
.
9 Current assets - assets classified as held for sale
Land.&.Buildings.
10 Non-current assets - receivables
Loans.to.joint.ventures.
Other.non-current.receivables.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
30.4.
44.7.
63.6.
27.3
42.5
58.1
138.7.
127.9
1.9.
-
25.5.
4.1.
29.6.
22.3
4.9
27.2
Details.of.the.fair.values,.effective.interest.rate.and.credit.risk.are.set.out.in.note.27..The.maximum.exposure.to.credit.risk..
at.the.end.of.the.reporting.period.is.the.carrying.amount.of.each.class.of.receivables.mentioned.above.
(a) Impaired receivables and receivables past due
None.of.the.non-current.receivables.are.impaired.or.past.due.but.not.impaired.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
71
11 Non-current assets - investments accounted for using the equity method
Interests.in.joint.ventures.and.associates.are.accounted.for.in.the.Group’s.financial.statements.using.the.equity.method.and.are.carried.at.cost.by.the.respective.parent.
entity.
(a) Carrying amounts
.
.
...
...
.
Name of joint venture or associate
Principal activity
..Sunstate.Cement.Ltd.
..Independent.Cement.and.Lime.Pty.Ltd.
..E.B..Mawson.&.Sons.Pty.Ltd.and..
Lake.Boga.Quarries.Pty.Ltd.
..Burrell.Mining.Services.JV.
..Batesford.Quarry.
..Aalborg.Portland.Malaysia.Sdn.Bhd.
Cement.manufacture.
Cement.distribution.
Concrete.and.quarries.
Mining.industry.products.
Quarry.products.
Cement.manufacture.distribution.
...
.
.
.
.
.
.
.
.
.
Group’s.share.of.Net.Assets
Ownership interest
Consolidated
2012
%
2011
%
2012
$ Million
2011
$ Million
50.
50.
50.
50.
50.
30
.
50.
50.
50.
50.
50.
-
.
17.9.
46.9.
33.7.
1.5.
1.6.
30.5
132.1.
18.4
45.8
30.0
2.0
1.0
-
97.2
The.Group.acquired.a.30%.interest.in.Aalborg.Portland.Malaysia.Sdn.Bhd.(APM).on.5.December.2012.for.$28.7.million..APM.is.a.white.cement.clinker.manufacturer.
based.in.Ipoh,.Malaysia.and.is.considered.an.associate.of.the.Group.
Each.of.the.above.joint.ventures.and.associates.is.incorporated.with.the.exception.of.Batesford.Quarry.and.Burrell.Mining.Services.JV.which.are.not.incorporated...
Except.APM.which.has.a.31.December.balance.date,.all.have.a.balance.sheet.date.of.30.June.which.is.different.to.the.Group’s.balance.sheet.date.of.31.December..
Financial.reports.prepared.as.at.31.December.are.used.for.equity.accounting.purposes..
($ Million)
(b) Movements in carrying amounts
Carrying.amount.at.1.January.
Share.of.net.profits.
Dividends.received.
Acquisition.of.associate.
Carrying.amount.at.31.December.
.
.
.
.
.
(c) Share of joint ventures and associates’ profits
Revenues.
Expenses.
Profit.before.income.tax.
Income.tax.expense.
Profit.after.income.tax.
Share.of.net.profit.-.equity.accounted.
Retained.profits.at.1.January.
Dividends.and.distributions.
Share.of.retained.profits.at.31.December.
.
.
.
.
.
.
.
.
.
Consolidated
2012
2011
97.2.
30.2.
(24.0 ).
28.7.
132.1.
279.2.
(244.0 ).
35.2.
(5.0 ).
30.2.
30.2.
42.0.
(24.0 ).
48.2.
87.7
35.7
(26.2.)
-
97.2
288.4
(244.4.)
44.0
(8.3.)
35.7
35.7
32.5
(26.2.)
42.0
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
72
($ Million)
11 Non-current assets - investments accounted for using the equity method (continued)
(d) Summarised financial information of joint ventures and associates
Current.assets.
Non-current.assets.
Total.assets.
Current.liabilities.
Non-current.liabilities.
Total.liabilities.
Net.Assets.
.
.
.
.
.
.
.
Group’s.share.of.joint.ventures.and.associates.net.assets.
Adjustments.arising.from.equity.accounting:
..Goodwill.
..Unrealised.profit.in.inventory.
.
.
Carrying.value.at.31.December.
.
(e) Share of joint ventures’ expenditure commitments
Lease.commitments.
Capital.commitments.
.
.
.
.
(f) Contingent liabilities of the parent entity
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
An.entity.that.is.equity.accounted.has.contingent.liabilities.amounting.to.$0.2.million.relating.to.a.claim.for.damages.and.interest.
from.an.action.undertaken.against.their.subsidiary.
Consolidated
2012
2011
196.0.
245.8.
441.8.
(64.3 ).
(141.3 ).
(205.6 ).
236.2.
108.2.
24.4.
(0.5 ).
132.1.
47.6.
6.1.
53.7.
178.1
194.9
373.0
(57.8.)
(137.5.)
(195.3.)
177.7
88.8
8.7
(0.3.)
97.2
41.0
1.0
42.0
.
.
.
.
.
.
.
.
.
.
.
.
.
.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
73
12 Non-current assets - property, plant and equipment
Consolidated at 31 December 2012
($ Million)
At.cost.
Accumulated.depreciation.
Freehold
land
130.3.
-.
Buildings
115.3.
(47.0.).
Net book amount
130.3
68.3
Reconciliations
Carrying.amount.at
1.January.2012.
Additions.
Disposals.
Reclassification.
Depreciation/.
amortisation.expense..
Carrying amount at
31 December 2012
125.0.
7.2.
-.
(1.9.).
69.6.
0.7.
(0.1.).
1.8..
Consolidated at 31 December 2011
($ Million)
At.cost.
Accumulated.depreciation.
Freehold
land
125.0.
-.
Buildings
113.1.
(43.5.).
Net book amount
125.0
69.6
Reconciliations
Carrying.amount.at
1.January.2011.
Acquisition.of.businesses.
Additions.
Disposals.
Reclassification.
Depreciation/.
amortisation.expense..
Carrying amount at
31 December 2011
113.4.
6.4.
1.4.
-.
3.8.
61.5.
4.9.
1.7.
(0.1.).
5.0..
.
.
.
.
Leasehold
property
Plant &
equipment
Leased
assets
Mineral
reserves
Asset
retirement
cost
In course
of con-
struction
Total
8.4.
(1.8.).
6.6
3.6.
3.3.
-..
-..
1,166.9.
(695.8.).
471.1
451.4.
34.6.
(4.4.).
45.9..
-.
-. .
-
155.3.
(21.0.).
134.3
137.7.
-..
(0.2.).
0.2..
0.8.
-.
-. .
(0.8.).
-. .
-
7.6.
(2.9.).
4.7
3.6.
1.4.
-..
-..
86.1.
-..
1,669.9
(768.5.)
86.1
901.4
59.3.
74.3.
-..
(47.5.).
851.0.
121.5
(4.7.)
(2.3.)
-.
(3.7.).
(0.3.).
(56.4.).
130.3
68.3
6.6
471.1
(3.4.).
(0.3.).
-..
(64.1.)
134.3
4.7
86.1
901.4
Leasehold
property
Plant &
equipment
Leased
assets
Mineral
reserves
Asset
retirement
cost
In course
of con-
struction
Total
5.1.
(1.5.).
3.6
3.8.
-.
-.
-..
-..
1,113.9.
(662.5.).
451.4
442.9.
15.3.
21.9.
(2.0.).
23.8..
1.0.
(0.2.).
0.8
0.9.
-.
-.
-. .
-. .
155.4.
(17.7.).
137.7
105.1.
34.9.
0.2.
-..
-..
6.2.
(2.6.).
3.6
2.8.
0.2.
0.8.
-..
-..
59.3.
-..
1,579.0
(728.0.)
59.3
851.0
30.2.
-.
61.7.
-..
(32.6.).
760.6.
61.7
87.7
(2.1.)
-
-.
(3.4.).
(0.2.).
(50.5.).
(0.1.).
(2.5.).
(0.2.).
-..
(56.9.)
125.0
69.6
3.6
451.4
0.8
137.7
3.6
59.3
851.0
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
74
Consolidated
2012
2011
1.5.
2.7.
21.2.
2.6.
1.2.
29.2.
1.1
3.3
21.0
4.0
1.9
31.3
(29.2 ).
(31.3.)
-.
-
31.3.
(1.6 ).
(0.1 ).
0.1 .
-..
(0.5 ).
29.2.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
31.7
(2.5.)
2.5
0.1
0.1
(0.6.)
31.3
Total
187.8
(2.9 )
184.9
183.0
3.0
(1.1 )
184.9
184.7
(1.7.)
183.0
179.1
4.5
0.3
(0.9.)
183.0
Consolidated
Goodwill
Software
Other
intangibles
170.6
-
170.6
170.6
-
-
170.6
170.6.
-.
170.6.
170.3.
-.
0.3.
-.
170.6.
14.0
(2.5 )
11.5
9.7
2.6
(0.8 )
11.5
11.3.
(1.6.).
9.7.
7.0.
3.5.
-.
(0.8.).
9.7.
3.2
(0.4 )
2.8
2.7
0.4
(0.3 )
2.8
2.8.
(0.1.).
2.7.
1.8.
1.0.
-.
(0.1.).
2.7.
($ Million)
13 Non-current assets - deferred tax assets
The balance comprises temporary differences attributable to:
Share.based.payment.reserve.
Defined.benefit.obligations.
Provisions.
Other.assets.
Tax.losses.
.
.
.
.
.
Deferred tax assets - before offset.
Offset.deferred.tax.liability.(note.21).
Net deferred tax assets - after offset.
Movements:
Opening.balance.at.1.January.-.before.offset.
Recognised.in.the.income.statement.
Recognised.in.other.comprehensive.income.
Recognised.in.equity..
Acquired.in.business.combinations.
(Under).provision.in.prior.year.
.
.
.
.
.
.
.
.
.
Closing.balance.at.31.December.-.before.offset..
($ Million)
14 Non-current assets - intangible assets
31 December 2012
Cost.
Accumulated.amortisation.
Carrying.amount.at.31.December.2012.
Opening.balance.at.1.January.2012.
Additions.in.current.year.
Amortisation.charge.
Closing.balance.at.31.December.2012.
31 December 2011
Cost.
Accumulated.amortisation.
Carrying.amount.at.31.December.2011.
Opening.balance.at.1.January.2011.
Additions.in.current.year.
Acquisition.of.businesses.
Amortisation.charge.
Closing.balance.at.31.December.2011.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
75
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
($ Million)
14 Non-current assets - intangible assets (continued)
(a) Impairment tests for goodwill
Consolidated
2012
2011
Goodwill.is.allocated.to.the.Group’s.cash-generating.units.(CGUs).identified.according.to.business.segments...
A.segment.level.summary.of.the.goodwill.allocation.on.a.non-aggregation.basis.is.presented.below.
Cement.and.Lime.
Concrete.
Cement,.Lime.and.Concrete.CGU.
Concrete.Products.CGU.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
131.0.
30.8.
161.8.
8.8.
170.6.
131.0
30.8
161.8
8.8
170.6
The.recoverable.amount.of.a.CGU.is.determined.based.on.value-in-use.calculations..These.calculations.use.cash.flow.projections.based.on.2012.actual.results.and..
2013.financial.budgets.approved.by.management..The.growth.rate.does.not.exceed.the.long-term.average.growth.rate.for.the.business.in.which.the.CGU.operates.
(b) Key assumptions used for value-in-use calculations
Cement,.Lime.and.Concrete.
Concrete.Products.
Gross margin1
Growth rate2
Discount rate3
2012
%
38.3.
26.9.
2011
%
36.9.
25.5.
2012
%
1.7.
1.2.
2011
%
2.0.
1.6.
2012
%
10.3.
10.3.
2011
%
9.9
9.9
1.Budgeted.gross.margin.(excluding.fixed.production.costs)
2.Weighted.average.growth.rate.used.to.extrapolate.cash.flows.beyond.the.specific.market.forecast.period.of.up.to.8.years.
3.Pre-tax.discount.rate.applied.to.cash.flow.projections
The.assumptions.have.been.used.for.the.analysis.of.each.CGU.within.the.business.segment..Management.determined.budgeted.gross.margin.based.on.the.past.
performance.and.its.expectations.for.the.future..The.discount.rates.used.are.pre-tax.and.reflect.specific.risks.relating.to.relevant.segments.
15 Carbon asset and liability
(a) Background
The.Federal.Government.introduced.a.price.on.carbon.emissions.from.1.July.2012.through.the.introduction.of.the.Clean.Energy.Legislation.(the.Scheme)..An.entity.
within.the.Group.is.a.Liable.Entity.under.the.Scheme.and.is.required.to.surrender.eligible.emission.units.to.the.Clean.Energy.Regulator.(the.Regulator).in.order.to.satisfy.
its.liability.for.carbon.emissions..The.Group.is.also.eligible.to.receive.assistance.under.the.Jobs.and.Competitiveness.Program.(JCP),.where.the.Scheme.provides.units.
to.industries.that.qualify.as.Emissions.Intensive.Trade.Exposed.
The.Scheme.requires.entities.with.operational.control.of.a.facility.where.certain.emissions.exceed.25,000.tonnes.of.carbon.dioxide.equivalence.(tCO2.-e).to.remit.to.
the.Regulator.an.equivalent.number.of.eligible.emission.units.to.pay.for.their.emissions..Eligible.emission.units.can.be.purchased.from.the.Regulator,.which.during.the.
2012./.13.year.are.priced.at.$23.per.unit..During.the.initial.years.of.the.Scheme,.restrictions.are.placed.on.utilising.eligible.emission.units.that.are.not.issued.by.the.
Regulator.
The.Group.has.operational.control.of.a.large.number.of.facilities.across.Australia,.however.as.a.result.of.the.threshold,.only.a.limited.number.of.sites.related.to.the.
production.of.cement.clinker.and.lime.are.directly.liable.under.the.Scheme..The.production.of.cement.clinker.and.lime.require.energy.use.to.heat.raw.materials.to.
produce.chemical.reactions.necessary.for.the.manufacturing.process..Both.the.energy.use.for.heat.and.the.chemical.reaction.produce.emissions.that.are.covered.by.
the.Scheme.
The.accounting.policy.for.carbon.is.set.out.in.note.1.(ab).
The.Group.is.directly.liable.for.certain.emissions.associated.with.sites.that.exceed.the.threshold..In.addition.to.this,.the.Group.incurs.non-direct.costs.associated.with..
the.Scheme.as.a.result.of.suppliers.passing.on.the.cost.through.higher.charges..These.costs.form.part.of.operating.costs.such.as.electricity.charges.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
76
Consolidated
2012
Consolidated
2011
Carbon units
Million
$ Million
Carbon units
Million
$ Million
2.24
51.5.
2.09
0.15
2.24
-
2.24
2.24
48.0.
3.5.
51.5.
-.
51.5.
51.5.
1.46
33.6.
25.2.
8.4.
33.6.
-.
33.6.
33.6.
1.10
0.36
1.46
-
1.46
1.46
.
.
.
-.
-.
-.
-.
-.
-.
-.
-.
-.
-.
-.
-.
-.
-.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Consolidated
2012
2011
.
.
.
90.1.
4.4.
94.5.
93.7
4.8
98.5
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
15 Carbon asset and liability (continued)
(b) Carbon balances recognised
(i) Carbon unit asset
Carbon.units.on.hand.
Classified.as:
Current.
Non-current.
.
.
.
.
.
The.movement.in.carbon.unit.asset.is.set.out.below:
Opening.balance.
JCP.assistance.received.
.
.
Closing.balance.
(ii) Provision for carbon emissions
Provision.for.carbon.emissions..
Classified.as:
Current.
Non-current.
.
.
.
.
.
.
The.movement.in.provision.for.carbon.emissions.as.set.out.below:
Opening.balance.
Liability.for.covered.emissions.
.
.
Closing.balance.
.
($ Million)
16 Current liabilities - trade and other payables
Trade.payables.and.accruals.
Trade.payables.-.joint.ventures.
.
.
.
.
(a) Risk exposure
Information.about.the.Group’s.exposure.to.foreign.exchange.risk.is.provided.in.note.27.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
77
($ Million)
17 Current liabilities - borrowings
Secured
Lease.liabilities.(note.29).
Unsecured
Bank.loans.
.
.
.
.
.
.
.
.
.
.
.
.
.
Details.of.the.Group’s.exposure.to.interest.rate.changes.and.fair.value.of.borrowings.are.set.out.in.note.27.
Lease.liabilities.are.effectively.secured.as.the.rights.to.the.leased.assets.recognised.in.the.financial.statements.revert.to.the.lessor..
in.the.event.of.default..The.carrying.amount.of.plant.and.equipment.under.finance.lease.is.nil.(2011.-.$0.8.million).
18 Current liabilities - provisions
Employee.benefits.
Workers’.compensation.
Restoration.provisions.
Other.provisions.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Movements.in.each.class.of.provision.during.the.financial.year,.other.than.employee.benefits,.are.set.out.below.
Consolidated
2012
2011
-.
20.0.
20.0.
19.4.
0.7.
4.8.
1.1.
26.0.
0.7
-
0.7
18.0
0.6
1.8
1.3
21.7
.
($ Million)
Opening.balance.at.1.January.2012.
Charged.to.income.statement.
Provisions.reclassified.from.non-current.
Payments.
Closing.balance.at.31.December.2012.
($ Million)
19 Current liabilities - other liabilities
GST.liability.
Deferred.income.-.JCP.assistance.
Other.liabilities.
.
20 Non-current liabilities - borrowings
Unsecured
Bank.loans.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Workers’
compensation
Restoration
provisions
Other
provisions
.
.
.
.
.
.
.
.
.
.
0.6
0.4
-
(0.3 )
0.7
.
.
.
.
.
1.8
-
3.3
(0.3 )
4.8
1.3
2.0
-
(2.2 )
1.1
Consolidated
2012
2011
2.9.
16.1.
0.5.
19.5.
2.7
-
1.9
4.6
299.3.
258.7
Details.of.the.Group’s.exposure.to.interest.rate.changes.and.fair.values.of.borrowings.is.set.out.in.note.27.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
78
($ Million)
21 Non-current liabilities - deferred tax liabilities
The balance comprises temporary differences attributable to:
Property,.plant.and.equipment.
Inventories.
Other.
.
.
.
Deferred tax liabilities - before offset.
Offset.deferred.tax.assets.(note.13).
.
.
Net deferred tax liabilities - after offset. .
Movements:
Opening.balance.at.1.January.-.before.offset.
Recognised.in.the.income.statement.
Acquired.in.business.combinations.
Under.provision.in.prior.year.
.
.
.
.
Closing.balance.at.31.December.-.before.offset..
22 Non-current liabilities - provisions
Employee.benefits.
Restoration.provisions.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Movement.in.each.class.of.provision.during.the.financial.year,.other.than.employee.benefits,.are.set.out.below.
.
($ Million).
.
.
Opening.balance.at.1.January.2012.
Charged.to.income.statement.-.unwinding.of.discount.to.finance.costs.
Credited.to.income.statement.-.reassessment.of.assumptions.
Additional.provision.recognised.-.charged.to.asset.retirement.cost.
Provisions.reclassified.to.current.
.
.
Closing.balance.at.31.December.2012.
.
23 Non-current liabilities - retirement benefit obligations
(a) Superannuation plan
.
.
.
.
.
.
.
.
Consolidated
2012
2011
84.2.
8.9.
3.8.
96.9.
(29.2 ).
67.7.
102.0.
2.5.
(7.6 ).
-.
88.4
8.2
5.4
102.0
(31.3.)
70.7
83.2
3.6
11.0
4.2
96.9.
102.0
3.8.
27.4.
31.2.
4.7
30.3
35.0
Restoration
provisions
30.3
0.5
(1.5 )
1.4
(3.3 )
27.4
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
The.majority.of.the.Company.employees.are.members.of.the.consolidated.superannuation.entity.being.the.Adelaide.Brighton.Group.Superannuation.Plan.(“the.Plan”),..
a.sub-plan.of.the.Mercer.Super.Trust.(“MST”)..The.MST.is.a.superannuation.master.trust.arrangement.governed.by.an.independent.trustee,.Mercer.Investment.
Nominees.Ltd..The.Plan.commenced.in.the.MST.on.1.August.2001.
Membership.is.in.either.the.Defined.Benefit.or.Accumulation.sections.of.the.Plan..The.accumulation.section.receives.fixed.contributions.from.Group.companies.and.the.
Group’s.legal.or.constructive.obligation.is.limited.to.these.contributions..The.following.sets.out.details.in.respect.of.the.defined.benefit.section.only.
Defined.benefit.members.receive.lump.sum.benefits.on.retirement,.death,.disablement.and.withdrawal..The.defined.benefit.section.of.the.Plan.is.closed.to.new.
members..All.new.members.receive.accumulation.only.benefits..During.the.12.months.to.31.December.2012,.all.new.employees,.who.are.members.of.this.fund,.have.
become.members.of.the.accumulation.category.of.the.Plan..Employees.who.are.not.members.of.the.Plan.are.in.complying.superannuation.funds.as.specified.by.the.
Enterprise.Bargaining.Agreements.(WA.and.Victoria.Award.covered.employees).that.cover.their.employment.or.other.complying.funds.as.allowed.under.the.choice.of.
fund.provisions.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
79
Consolidated
2012
2011
60.0.
(51.0 ).
9.0.
60.6
(49.7.)
10.9
60.6.
2.2.
2.1.
2.0.
1.3.
(8.2 ).
-.
60.0.
49.7.
3.3.
2.3.
2.6.
1.3.
(8.2 ).
-.
51.0.
2.2.
2.1.
(3.3 ).
1.0.
5.7.
(0.3 ).
19.2.
55.4
2.0
2.7
3.9
1.4
(4.9.)
0.1
60.6
51.2
3.5
(4.9.)
3.3
1.4
(4.9.)
0.1
49.7
2.0
2.7
(3.5.)
1.2
(1.4.)
8.8
19.5
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
($ Million)
23 Non-current liabilities - retirement benefit obligations (continued)
(b) Balance sheet amounts
Present.value.of.the.defined.benefit.obligation. .
.
Fair.value.of.defined.benefit.plan.assets.
Net.liability.in.the.balance.sheet.
.
.
.
.
.
.
.
The.Group.has.a.legal.obligation.to.make.quarterly.contributions.of.$150,000.to.finance.the.deficit.with.a.view.to.return.the.Plan..
to.a.satisfactory.financial.position.by.30.June.2015.
(c) Reconciliations
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Reconciliation of the present value of defined benefit obligation, which is wholly or partially funded:
.
..Opening.balance.at.1.January.
.
..Current.service.costs.
.
..Interest.costs.
.
..Actuarial.losses.(gains).
..Contributions.by.plan.participants.
.
..Benefits,.expenses.and.insurance.premium.paid.
..Transfers.in.
.
.
.
.
.
.
.
.
..Closing.balance.at.31.December.
.
Reconciliation of the fair value of defined benefit plan assets
..Opening.balance.at.1.January.
..Expected.return.on.plan.assets.
..Actuarial.gains.(losses).
..Employer.contributions.
..Contributions.by.plan.participants.
..Benefits,.expenses.and.insurance.premium.paid.
..Transfers.in.
.
.
.
.
.
.
..Closing.balance.at.31.December.
.
.
.
.
.
.
.
.
.
.
(d) Amounts recognised in income statement and statement of comprehensive income
The.amounts.recognised.in.the.income.statement.are.as.follows:
Current.service.costs.
Interest.costs.
Expected.return.on.plan.assets.
.
.
.
Total.included.in.employee.benefits.expense.
Actual.return.on.plan.assets.
.
.
The.amounts.recognised.in.the.statement.of.comprehensive.income.are.as.follows:
Actuarial.(gain)/.loss.recognised.in.the.year.
.
Cumulative.actuarial.losses.recognised.in.statement.of.comprehensive.income.
.
.
.
.
.
.
.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
80
($ Million)
23 Non-current liabilities - retirement benefit obligations (continued)
(e) Categories of plan assets
The.major.categories.of.plan.assets.are.as.follows:
Australian.Equity.
International.Equity.
Fixed.income.
Property.
Cash.
Other.
.
.
.
.
.
.
.
(%)
.
(f) Principal actuarial assumptions
The.principal.actuarial.assumptions.used.were.as.follows:
Discount.rate.
Expected.return.on.plan.assets.
Future.salary.increases.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Consolidated
2012
2011
.
.
.
.
.
.
.
13.3.
14.8.
9.7.
7.0.
3.6.
2.6.
51.0.
13.9
14.4
7.0
8.0
4.0
2.4
49.7
Consolidated
2012
2011
2.80.
.
7.25.
.
. 3% then 4.0% .
. pa thereafter
3.20
7.25
4.00
The.expected.rate.of.return.on.assets.is.based.on.historical.and.future.expectations.of.returns.for.each.of.the.major.categories.of.asset.classes.(equities,.property,.fixed.
interest.and.cash).as.well.as.the.expected.actual.allocation.of.plan.assets.to.these.major.categories..This.resulted.in.the.selection.of.a.7.25%.rate.of.return.net.of.tax.
and.expenses..The.discount.rate.used.to.value.the.defined.benefit.obligation.is.based.on.the.10.year.government.bond.rate,.adjusted.to.reflect.the.cash.flow.profile.of.
the.obligation.
(g) Employer contributions
Employer.contributions.to.the.defined.benefit.section.of.the.plan.are.based.on.recommendations.by.the.plan’s.actuary..Actuarial.assessments.are.made.at.no.more.than.
three.yearly.intervals,.and.the.last.assessment.was.made.as.at.1.July.2010.
Total.employer.contributions.expected.to.be.paid.by.Group.companies.for.the.year.ended.31.December.2013.are.$2.5.million.
($ Million)
(h) Historic summary
Defined.benefit.obligation.
Plan.assets.
(Deficit).surplus.
.
.
.
Experience.adjustments.arising.on.plan.liabilities.
Experience.adjustments.arising.on.plan.assets. .
2012
2011
2010
2009
2008
(60.0 ).
51.0 .
(9.0 ).
(2.3 ).
1.1 .
(60.6.).
49.7. .
(10.9.).
4.9. .
(1.2.).
(55.4.).
51.2..
(4.2.).
1.5..
0.7..
(52.1.).
46.3. .
(5.8.).
(4.2.).
1.3. .
(54.9.)
42.3
(12.6.)
18.8
(6.4.)
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
81
($ Million)
24 Contributed equity
(a) Share capital
Consolidated
2012
2011
Issued.and.paid.up.capital
637,387,488.(2011:.636,277,810).ordinary.shares,.fully.paid.
(b) Movements in ordinary share capital
Opening.balance.at.1.January.
1,109,678.shares.issued.under.Executive.Performance.Share.Plan.(2011:.1,145,000) (i).
.
Closing.balance.at.31.December.
.
.
.
.
.
.
.
.
.
.
.
.
.
696.6.
694.6
694.6.
2.0.
696.6.
692.7
1.9
694.6
(i) Ordinary.shares.issued.under.the.Adelaide.Brighton.Ltd.Executive.Performance.Share.Plan.(refer.note.30).
(c) Ordinary shares
Ordinary.shares.entitle.the.holder.to.participate.in.dividends.and.the.proceeds.on.winding.up.the.Company.in.proportion.to.the.number.of.and.amounts.paid.on.the.
shares.held..On.a.show.of.hands.every.holder.of.ordinary.shares.present.at.a.meeting.in.person.or.by.proxy,.is.entitled.to.one.vote.and,.on.a.poll,.each.share.is.entitled.
to.one.vote.
Ordinary.shares.have.no.par.value.and.the.Company.does.not.have.a.limited.amount.of.authorised.capital.
(d) Dividend reinvestment plan
In.February.2010.the.Company.suspended.the.dividend.reinvestment.plan.with.immediate.effect.until.further.notice.
(e) Capital risk management
The.Group’s.objectives.when.managing.capital.are.to.safeguard.their.ability.to.continue.as.a.going.concern,.so.that.they.can.continue.to.provide.returns.for.shareholders.
and.benefits.for.other.stakeholders.and.to.maintain.an.optimal.capital.structure.to.reduce.the.cost.of.capital.
In.order.to.maintain.or.adjust.the.capital.structure,.the.Group.may.adjust.the.amount.of.dividends.paid.to.shareholders,.issue.shares.as.well.as.issue.new.debt.or.
redeem.existing.debt..The.Group.monitors.capital.on.the.basis.of.the.gearing.ratio.
The.Company.has.an.implied.BBB+.credit.rating.and.chooses.not.to.apply.for.an.official.credit.rating..The.gearing.ratio.at.31.December.2012.and.31.December.2011.
was.as.follows:
($ Million)
Total.borrowings.
Less:.cash.and.cash.equivalents.
Net.debt.
Total.equity.
Gearing.ratio.
.
.
.
.
.
(f) Employee Share Scheme and options
.
.
.
.
.
.
.
.
.
.
Consolidated
2012
319.3.
(7.0 ).
312.3.
1,008.1.
2011
259.4
(11.0.)
248.4
957.1
31.0 %.
26.0.%
.
.
.
.
Information.relating.to.the.employee.share.schemes,.including.details.of.shares.issued.under.the.schemes.are.set.out.in.note.30.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
82
Consolidated
2012
2011
2.1.
2.3
2.3.
1.2.
-.
0.1.
(1.5 ).
2.1.
2.6
1.4
(0.1.)
(0.2.)
(1.4.)
2.3
257.3.
154.2.
0.2.
(105.1 ).
306.6.
236.0
148.4
(6.3.)
(120.8.)
257.3
The Company
2012
2011
57.3.
-.
47.8.
105.1.
57.2
15.9
47.7
120.8
57.4.
57.3
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
($ Million)
25 Reserves and retained earnings
(a) Reserves
Share-based.payment.reserve.
Share-based payment reserve
Opening.balance.at.1.January.
Awards.expense.
Deferred.tax.
Over./.(under).provision.of.tax.in.prior.periods.
Issue.of.shares.to.employees.
Closing.balance.at.31.December.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Nature and purpose of reserves
The.share-based.payment.reserve.is.used.to.recognise.the.fair.value.of.Awards.issued.but.not.exercised.
(b) Retained earnings
Opening.balance.at.1.January.
Net.profit.for.the.year.
Actuarial.(loss)/gain.on.defined.benefit.obligation.(net.of.tax).
Dividends.
.
.
.
Closing.balance.at.31.December.
.
($ Million)
26 Dividends
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Dividends paid during the year
2011.final.ordinary.dividend.of.9.0.cents.(2010.-.9.0.cents).per.fully.paid.ordinary.share,.franked.at.100%.(2010.-.100%)..
paid.on.10.April.2012.
2010.special.dividend.of.2.5.cents.per.fully.paid.ordinary.share,.franked.at.100%.paid.on.11.April.2011...
No.special.dividend.has.been.declared.or.paid.in.relation.to.the.2011.or.2012.years..
2012.interim.dividend.of.7.5.cents.(2011.-.7.5.cents).per.fully.paid.ordinary.share,.franked.at.100%.(2011.-.100%)..
paid.on.8.October.2012.
.
.
.
.
.
.
.
.
Total.dividends.paid.in.cash.
.
.
.
Dividend not recognised at year end
Since.the.end.of.the.year.the.Directors.have.recommended.the.payment.of.a.final.dividend.of.9.0.cents.(2011.-.9.0.cents)..
per.fully.paid.share,.franked.at.100%.(2011.-.100%).The.aggregate.amount.of.the.proposed.final.dividend.to.be.paid.on..
16.April.2013,.not.recognised.as.a.liability.at.the.end.of.the.reporting.period,.is..
.
.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
83
26 Dividends (continued)
Franked dividend
The.franked.portion.of.the.dividend.proposed.as.at.31.December.2012.will.be.franked.out.of.existing.franking.credits.or.out.of.franking.credits.arising.from.the..
payment.of.income.tax.in.the.year.ending.31.December.2013.
($ Million)
Franking.credits.available.for.subsequent.financial.years.based.on.a.tax.rate.of.30%.(2011.-.30%).
.
.
Consolidated
2012
89.0.
2011
80.6
The.above.amounts.represent.the.balance.of.the.franking.account.as.at.the.end.of.the.financial.year,.adjusted.for:
.
.
.
(a).franking.credits.that.will.arise.from.the.payment.of.any.current.tax.liability.
(b).franking.debits.that.will.arise.from.the.payment.of.dividends.recognised.as.a.liability.at.the.reporting.date.
(c).franking.credits.that.will.arise.from.the.receipt.of.dividends.recognised.as.receivables.at.the.reporting.date.
The.impact.on.the.franking.account.of.the.dividend.recommended.by.the.Directors.since.year.end,.but.not.recognised.as.a.liability.at.year.end,.will.be.a.reduction.in.the.
franking.account.of.$24.6.million.(2011:.$24.6.million).
27 Financial risk management
The.Group’s.activities.expose.it.to.a.variety.of.
financial.risks:.market.risk.(including.currency.risk.
and.interest.rate.risk),.credit.risk.and.liquidity.risk..
The.Group’s.overall.risk.management.program.
focuses.on.the.unpredictability.of.financial.markets.
and.seeks.to.minimise.potential.adverse.effects.on.
the.financial.performance.of.the.Group.
The.Board.approves.written.principles.for.overall.
risk.management,.as.well.as.policies.covering.
specific.areas,.such.as.foreign.exchange.risk,.
interest.rate.risk,.credit.risk,.use.of.derivative.and.
non-derivative.financial.instruments.and.investment.
of.excess.liquidity..The.Group.does.not.enter.into.
or.trade.financial.instruments,.including.derivative.
financial.instruments,.for.speculative.purposes.
The.Group.uses.different.methods.to.measure.
different.types.of.risk.to.which.it.is.exposed..These.
methods.include.sensitivity.analysis.in.the.case.
of.interest.rate,.foreign.exchange.and.other.price.
risks,.and.ageing.analysis.for.credit.risk..The.Group.
uses.derivative.financial.instruments.in.the.form.
of.foreign.exchange.forward.contracts.to.hedge.
certain.currency.risk.exposures.
Derivatives.are.initially.recognised.at.fair.value.at.
the.date.a.derivative.contract.is.entered.into.and.
are.subsequently.remeasured.at.their.fair.value.at.
each.reporting.date..The.Company.does.not.utilise.
hedge.accounting.as.permitted.under.Australian.
Accounting.Standards.
The.Group’s.Corporate.Treasury.Function.provides.
services.to.the.business,.co-ordinates.access.
to.domestic.financial.markets.and.monitors.
and.manages.the.financial.risks.relating.to.the.
operations.of.the.Group..The.Group.Corporate.
Treasury.Function.reports.on.a.monthly.basis.an.
analysis.of.exposures.by.degree.and.magnitude.
of.risk.
(a) Market risk
(i) Foreign exchange risk
The.Group’s.activities.through.its.overseas.cement,.
clinker,.slag.and.equipment.purchases.expose.it.to.
foreign.exchange.risk.arising.from.various.currency.
exposures,.primarily.with.respect.to.the.US.Dollar.
and.the.Japanese.Yen.
Foreign.exchange.risk.arises.from.future.
commercial.transactions.and.recognised.assets.
and.liabilities.that.are.denominated.in.a.currency.
that.is.not.the.entity’s.functional.currency..The.risk.
is.measured.using.sensitivity.analysis.and.cash.
flow.forecasting.
The.Group.enters.into.foreign.exchange.forward.
contracts.to.hedge.its.foreign.exchange.risk.
on.these.overseas.trading.activities.against.
movements.in.the.Australian.dollar.
The.Group.Treasury’s.risk.management.policy.is.
to.hedge.commitments.for.purchases.for.up.to.
six.months.forward..Longer.hedge.positions.are.
deemed.too.expensive.versus.the.value.at.risk.due.
to.the.respective.currencies’.interest.rate.spread..
Derivative.instruments.entered.into.by.the.Group.do.
not.qualify.for.hedge.accounting.
(ii) Interest rate risk
The.Group’s.main.interest.rate.risk.arises.from.
bank.borrowings..Borrowings.issued.at.variable.
rates.expose.the.Group.to.interest.rate.risk..Due.to.
the.historically.low.levels.of.gearing,.Group.policy.is.
to.take.on.senior.debt.facilities.on.a.one.to.five.year.
term.with.fixed.bank.lending.margins.associated.
with.each.term..Cash.advances.to.meet.short.and.
medium.term.borrowing.requirements.are.drawn.
down.against.the.senior.debt.lending.facilities.on.
a.30,.60.or.90.day.basis,.at.a.variable.lending.
rate.comprising.the.fixed.bank.margin.applied.to.
the.daily.bank.bill.swap.rate.effective.at.the.date.
of.each.bank.bill..During.both.2012.and.2011,.
the.Group’s.borrowings.at.variable.rates.were.
denominated.in.Australian.Dollars.
The.Group.analyses.its.interest.rate.exposure.on.a.
dynamic.basis..Periodically,.various.scenarios.are.
simulated.taking.into.consideration.refinancing,.
renewal.of.existing.positions,.alternative.financing.
and.hedging..Based.on.these.scenarios,.the.Group.
calculates.the.impact.on.forecast.profit.and.loss.of.
a.defined.interest.rate.shift..The.scenarios.are.run.
only.for.liabilities.that.represent.the.major.interest-
bearing.positions..Based.on.the.latest.calculations.
performed,.the.impact.on.profit.and.equity.of.a.
100.basis-point.movement.would.be.a.maximum.
increase/decrease.of.$2.2.million.(2011:.$1.8.
million)..A.100.basis-point.sensitivity.has.been.
selected.as.this.is.considered.reasonable.given.
the.current.level.of.both.short.term.and.long.term.
Australian.dollar.interest.rates.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
84
27 Financial risk management (continued)
(a) Market risk.(continued)
(iii) Summarised sensitivity analysis
The.following.table.summarises.the.sensitivity,.on.a.pre-tax.basis,.of.the.Group’s.financial.assets.and.financial.liabilities.to.interest.rate.risk.and.foreign.exchange.risk.
.
..
2012 ($ Million)
Financial assets
.Cash.
.Receivables.
...
Financial liabilities
.Borrowings.
.Payables.
..
.Total.increase/(decrease).
..
2011 ($ Million)
Financial assets
.Cash.
.Receivables.
...
Financial liabilities
.Borrowings.
.Payables.
..
.Total.increase/(decrease).
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Notes
6.
7.&.10.
.
17.&.20.
16.
.
.
Notes
6.
7.&.10.
.
17.&.20.
16.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Interest rate risk
Foreign exchange
risk
-1.0%
+1.0%
-10%
+10%
Consolidated
Carrying value
Consolidated
Profit before tax
Consolidated
Profit before tax
7.0.
199.2.
206.2
319.3.
94.5.
413.8
.
(0.1.).
(0.3.).
(0.4 )
3.2.
-.
3.2
2.8
0.1.
0.3.
0.4
(3.2.).
-..
(3.2 )
(2.8 )
-.
-.
-
-.
-.
-
-
-
-
-
-
-
-
-
Interest rate risk
Foreign exchange
risk
-1.0%
+1.0%
-10%
+10%
Consolidated
Carrying value
Consolidated
Profit before tax
Consolidated
Profit before tax
11.0.
196.1.
207.1
259.4.
98.5.
357.9
.
(0.1.).
(0.3.).
(0.4 )
2.6.
-.
2.6
2.2
0.1.
0.3.
0.4
(2.6.).
-..
(2.6 )
(2.2 )
-.
-.
-
-.
-.
-
-
-
-
-
-
-
-
-
Foreign.currency.risk.is.immaterial.due.to.the.majority.of.sales.and.assets.denominated.in.Australian.Dollars,.while.the.Group’s.purchases.that.are.in.foreign.currency.
are.settled.at.the.time.of.the.transaction,.consequently.payables.are.generally.in.Australian.Dollars..All.borrowings.are.denominated.in.Australian.Dollars.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
85
27 Financial risk management (continued)
(b) Credit risk
Credit.risk.is.managed.on.a.group.basis.using.
delegated.authority.limits..Credit.risk.arises.from.
cash.and.cash.equivalents,.derivative.financial.
instruments.and.deposits.with.banks.and.financial.
institutions,.as.well.as.credit.exposures.to.
customers,.including.outstanding.receivables.and.
committed.transactions.
For.banks.and.financial.institutions,.only.
independently.rated.parties.with.a.minimum.
rating.of.‘A’.are.accepted..For.trading.credit.
risk,.Credit.Control.assesses.the.credit.quality.
of.the.customer,.taking.into.account.its.financial.
position,.past.experience,.external.credit.agency.
reports.and.credit.references..Individual.risk.limits.
are.set.based.on.internal.or.external.ratings.in.
accordance.with.delegated.authority.limits.set.by.
the.Board..The.compliance.with.credit.limits.by.
credit.approved.customers.is.regularly.monitored.
by.line.credit.management..Sales.to.non-account.
customers.are.settled.either.in.cash,.major.credit.
cards.or.electronic.funds.transfer,.mitigating.credit.
risk.
Credit.risk.further.arises.in.relation.to.financial.
guarantees.given.to.certain.parties..Such.
guarantees.are.only.provided.in.exceptional.
circumstances.and.are.subject.to.appropriate.
approval.
The.Group.has.no.significant.concentration.of.credit.
risk..The.Group.has.policies.and.procedures.in.
place.to.ensure.that.sales.are.made.to.customers.
with.an.appropriate.credit.history..In.relation.to.
a.small.number.of.customers.with.uncertain.
credit.history,.the.Group.has.taken.out.personal.
guarantees.in.order.to.cover.credit.exposures..
As.at.31.December.2012,.the.Group.held.no.
collateral.over.outstanding.debts..Consequently,.
the.maximum.exposure.to.credit.risk.represents.
the.carrying.value.of.receivables.and.derivatives..
Derivative.counterparties.and.cash.transactions.are.
limited.to.high.credit.quality.institutions.
(c) Liquidity risk
The.ultimate.responsibility.for.liquidity.risk.
management.rests.with.the.Board.which.has.
established.an.appropriate.risk.management.
framework.for.the.management.of.the.Group’s.
short,.medium.and.long-term.funding.and.liquidity.
management.requirements..The.Group’s.Corporate.
Treasury.Function.manages.liquidity.risk.by.
maintaining.adequate.reserves,.banking.facilities.
and.reserve.borrowing.facilities.by.continuously.
monitoring.forecast.and.actual.cash.flows.and.
matching.the.maturity.profiles.of.financial.assets.
and.liabilities..Included.below.is.a.statement.of.
undrawn.facilities.that.the.Group.and.Company.has.
at.its.disposal.to.further.reduce.liquidity.risk.
($ Million)
Financing arrangements
Unrestricted.access.was.available.at.balance.date.to.the.following.lines.of.credit:
Credit standby arrangements
..Total.facilities
....Bank.overdrafts.
....Bank.facilities.-.external.parties.
....Lease.liabilities.
.
.
.
.
..Used.at.balance.date
....Bank.overdrafts.
....Bank.facilities.-.external.parties.
....Lease.liabilities.
.
..Unused.at.balance.date
....Bank.overdrafts.
....Bank.facilities.-.external.parties.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Consolidated
2012
2011
.
.
.
.
.
.
.
.
.
.
.
4.0.
500.0.
-.
504.0.
-.
319.3.
-.
319.3.
4.0.
180.7.
184.7.
4.0
500.0
0.7
504.7
-
258.7
0.7
259.4
4.0
241.3
245.3
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
86
27 Financial risk management (continued)
(c) Liquidity risk (continued)
The.table.below.analyses.the.Group’s.financial.liabilities.that.will.be.settled.on.a.gross.basis..The.amounts.disclosed.are.the.contractual.undiscounted.cash.flows...
The.interest.rate.used.is.4.7%.(2011:.6%).based.on.current.bank.borrowing.rates.and.current.expectations.
$ Million
< 6 months
6-12 months
1-2 years
>2 years
Total
Contractual maturities of financial liabilities
31 December 2012
..Trade.payables.
..Bank.borrowings.
.
.
.
31 December 2011
..Trade.payables.
..Lease.liabilities.
..Bank.borrowings.
.
(d) Fair value measurements
.
.
.
.
.
94.5.
-.
94.5.
98.5.
-.
-.
98.5.
-.
20.5.
20.5.
-.
0.7.
-.
0.7.
-.
313.4.
313.4.
-.
-.
274.2.
274.2.
-.
-.
-.
-.
-.
-.
-.
94.5
333.9
428.4
98.5
0.7
274.2
373.4
The.fair.value.of.financial.assets.and.financial.liabilities.must.be.estimated.for.recognition.and.measurement.or.for.disclosure.purposes..The.fair.value.of.forward.
exchange.contracts.is.determined.using.forward.exchange.market.rates.at.the.balance.sheet.date.
The.carrying.value.less.impairment.provision.of.trade.receivables.and.payables.are.assumed.to.approximate.their.fair.values.due.to.their.short-term.nature..The.fair.
value.of.financial.liabilities.for.disclosure.purposes.is.estimated.by.discounting.the.future.contractual.cash.flows.at.the.current.market.interest.rate.that.is.available.to.
the.Group.for.similar.financial.instruments.
The.carrying.amounts.of.financial.assets.and.liabilities.of.the.Group.and.the.Company.at.balance.date.approximates.fair.values..Fair.value.is.exclusive.of.costs.which.
would.be.incurred.on.realisation.of.an.asset,.and.inclusive.of.costs.which.would.be.incurred.on.settlement.of.a.liability.
The.carrying.amount.of.the.non-current.assets.is.based.predominantly.on.the.recoverable.loan.amount.to.joint.ventures.and.external.parties.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
87
($ Million)
28 Contingencies
Details.and.estimates.of.maximum.amounts.of.contingent.liabilities.are.as.follows:
.
(a) Guarantees
Consolidated
2012
2011
Bank.guarantees.
.
.
.
.
14.3.
14.2
(b) Litigation
At.the.time.of.preparing.this.financial.report.some.companies.included.in.the.Group.are.parties.to.pending.legal.proceedings,..
the.outcome.of.which.is.not.known..The.entities.are.defending,.or.prosecuting,.these.proceedings..The.Directors.have.assessed..
the.impact.on.the.Group.from.the.individual.actions.
No.material.losses.are.anticipated.in.respect.of.any.of.the.above.contingent.liabilities.
29 Commitments for expenditure
(a) Capital commitments - Property, plant & equipment
Capital.expenditure.contracted.for.at.the.reporting.date.but.not.recognised.as.liabilities.is.as.follows:
Within.one.year.
.
.
(b) Lease commitments
(i) Finance leases
Commitments.in.relation.to.finance.leases.are.payable.as.follows:
Within.one.year.
.
Later.than.one.year.but.not.later.than.five.years..
Minimum.lease.payments.
Less:.Future.finance.charges.
Recognised.as.a.liability.
Representing.lease.liabilities:
Current.(note.17).
.
(ii) Operating leases
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Commitments.in.relation.to.operating.leases.contracted.for.at.the.reporting.date,.but.not.recognised.as.liabilities,.are.payable.as.follows:
.
Within.one.year.
Later.than.one.year.but.not.later.than.five.years..
.
Later.than.five.years.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
17.9.
29.4
-.
-.
-.
-.
-.
-.
-.
5.6.
14.1.
22.4.
42.1.
0.7
-
0.7
-
0.7
0.7
0.7
4.4
13.6
27.6
45.6
Commitments.for.operating.lease.payments.relate.mainly.to.rental.leases.on.property..The.Group.leases.various.properties.under.non-cancellable.operating.leases.
which.contain.varying.terms,.escalation.clauses.and.renewal.rights..On.renewal,.the.terms.of.the.leases.are.either.renegotiated.or.the.expiry.date.is.extended.under.
pre-negotiated.terms.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
88
30 Share-based payment plans
(a) Employee Share Plan
The.establishment.of.the.Adelaide.Brighton.Ltd.
Employee.Share.Plan.was.approved.by.special.
resolution.at.the.Annual.General.Meeting.of.the.
Company.held.on.19.November.1997..All.full.
time.employees.of.the.Company.and.its.controlled.
entities.who.have.been.continuously.employed.by.
the.Company.or.a.controlled.entity.for.a.period.
of.one.year.are.eligible.to.participate.in.the.plan..
Casual.employees.and.contractors.are.not.eligible.
to.participate.in.the.Plan.
No.shares.were.issued.under.the.Employee.Share.
Plan.during.the.year.(2011.-.nil)..In.subsequent.
years,.the.Board.will.decide.whether,.considering.
the.profitability.of.the.Company.and.the.demands.
of.the.business,.further.invitations.to.take.up.grants.
of.shares.should.be.made.
(b) Executive Performance Share Plan
The.Adelaide.Brighton.Ltd.Executive.Performance.
Share.Plan.(“the.Plan”.or.“EPSP”).provides.for.
grants.of.Awards.to.the.Managing.Director.and.
eligible.executives..This.plan.was.approved.by.
shareholders.at.the.Annual.General.Meeting.held.
on.19.November.1997..In.accordance.with.the.
requirements.of.the.ASX.Listing.Rules,.the.Awards.
since.granted.to.the.Managing.Director.have.been.
approved.by.shareholders.
Under.the.Plan,.eligible.executives.are.granted.
Awards.(each.being.an.entitlement.to.a.fully.paid.
ordinary.share.of.Adelaide.Brighton.Ltd,.subject.
to.the.satisfaction.of.performance.conditions).on.
terms.and.conditions.determined.by.the.Board.
2012 Award
Under.the.Plan,.Participants.were.invited.to.apply.
to.take.up.an.Award.up.to.a.maximum.number.of.
shares,.divided.into.two.equal.tranches.exercisable.
no.earlier.than.1.May.2015.and.1.May.2016.
respectively..The.total.number.of.Awards.granted.
under.the.2012.Award.was.3,140,030.with.nil.
exercised.by.31.December.2012..During.the.period.
3,140,030.Awards.(2011:.nil).were.granted..The.
grant.date.of.the.2012.Awards.is.set.out.on..
page.90.
2010 Award
Under.the.Plan,.Participants.were.invited.to.apply.
to.take.up.an.Award.up.to.a.maximum.number.
of.shares,.divided.into.three.tranches.exercisable.
no.earlier.than.1.May.2012,.1.May.2013.and.
1.May.2014.respectively..The.total.number.of.
awards.originally.granted.under.the.2010.Award.
was.4,155,000.with.1,109,678.exercised.during.
the.period..During.the.period,.nil.Awards.(2011:.
227,500).were.granted.and.7,822.Awards.lapsed..
The.grant.date.of.the.2010.Awards.is.set.out.on.
page.91.
Performance conditions
Detailed.discussion.of.2012.Award.and.2010.
Award.performance.conditions.is.set.out.in.the.
Remuneration.Report.on.pages.48.to.49.
During.2012,.1,109,678.shares.were.issued.under.
the.Plan.on.the.exercise.of.Tranche.1.under.the.
2010.Award,.following.the.Board’s.determination.
that:
n. Total.Shareholder.Return.exercise.condition.
applicable.to.100%.of.exercisable.Awards.had.
been.satisfied.for.Tranche.1.
The.value.per.share.at.the.date.of.exercise.is.the.
Value.Weighted.Closing.Price.which.is.the.average.
of.the.closing.price.and.number.of.Adelaide.
Brighton.Limited.shares.traded.on.the.Australian.
Securities.Exchange.for.the.five.trading.days..
before.the.exercise.date,.but.not.including.the.
day.of.exercise..The.aggregate.value.of.Awards.
exercised.during.the.year.is.$3,411,571.(2011:.
$3,468,734).
Balance of Awards
As.at.31.December.2012,.if.the.exercise.conditions.
are.satisfied.and.the.remaining.balance.of.all.
currently.approved.Awards.are.exercised,.the.
Company.would.be.obliged.to.transfer:
n. 2,835,000.shares.to.the.Participants,.under.the.
2010.Award.(2011.-.3,952,500.shares)
n. 3,140,030.shares.to.the.Participants,.under.the.
2012.Award.(2011.-.nil.shares)
The.Plan.does.not.entitle.the.Participants.to.
participate.in.any.other.share.issues.of.the.
Company.and.the.unexercised.Awards.do.not.
attract.dividend.or.voting.rights..The.Plan.is.
accounted.for.by.the.Company.in.accordance..
with.note.1(v)(iv),.with.$1,206,942.(2011.-.
$1,377,937).recognised.as.an.expense.during.the.
year.
n. Earnings.per.share.exercise.condition.applicable.to.
98.5%.of.exercisable.Awards.had.been.satisfied.for.
Tranche.1;.and
The.weighted.average.remaining.contractual.life.of.
Awards.outstanding.at.the.end.of.the.period.was.
1.9.years.(2011:.1.5.years).
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
89
($ Million)
31 Key management personnel disclosures
(a) Compensation of key management personnel
.
Short-term.employee.benefits.
Post-employment.benefits.
Share-based.payments.
Termination.benefits.
.
.
.
.
.
.
Consolidated
2012
2011
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
9.1.
0.1.
1.2.
-.
10.4.
8.0
0.1
1.3
0.1
9.5
The.Company.has.applied.the.exemption.under.Amendment.to.Australian.Accounting.Standard.-.Key.Management.Personnel.Disclosures.by.Disclosing.Entities.which.
exempts.disclosing.companies.from.the.application.of.AASB.124.paragraphs.AUS.29.2.to.AUS.29.6.and.AUS.29.7.1.and.AUS.29.7.2.as.the.requirements.are.now.
incorporated.into.the.Corporations Act.and.are.provided.in.the.section.titled.Remuneration.Report.included.in.the.Directors’.Report.designated.as.audited.on.
pages.42.to.52.
(b) Award holdings of key management personnel
The.number.of.Awards.granted.as.compensation.and.details.of.Awards.vested,.exercised.or.lapsed.during.the.year.are.disclosed.in.the.Remuneration.Report.on..
page.50.
For.the.purposes.of.pricing.model.inputs,.the.share.price.for.calculation.of.the.Award.value.is.based.on.the.closing.published.share.price.at.grant.date..The.assessed.
fair.value.at.grant.date.of.Awards.granted.to.the.individuals.is.allocated.equally.over.the.period.from.grant.date.to.vesting.date..Fair.values.at.the.grant.date.are.
independently.determined.using.a.pricing.model.that.takes.into.account.the.exercise.price,.the.term.of.the.Awards,.the.lack.of.marketability,.the.impact.of.TSR.vesting.
condition.(applicable.to.50%.of.Awards),.the.expected.future.dividends.and.the.risk.free.interest.rate.for.the.term.of.the.Award.
2012 Awards grant - pricing model inputs
Number of
awards
Grant
date
Share price at
grant date
Value per
award at
grant date
Expected
annual
dividends
Risk-free
interest
rate
Lack of
marketability
discount
TSR
condition
discount
M.P.Chellew
..Tranche.1.
..Tranche.2.
G.Agriogiannis
..Tranche.1.
..Tranche.2.
M.Brydon
..Tranche.1.
..Tranche.2.
M.R.D.Clayton
..Tranche.1.
..Tranche.2.
M.Kelly
..Tranche.1.
..Tranche.2.
S.B.Rogers
..Tranche.1.
..Tranche.2.
S.J.Toppenberg
..Tranche.1.
..Tranche.2.
728,324.
728,324.
99,277.
99,277.
265,896.
265,896.
101,879.
101,879.
189,306.
189,306.
98,519.
98,519.
86,814.
86,814.
17/05/12.
17/05/12.
17/05/12.
17/05/12.
17/05/12.
17/05/12.
17/05/12.
17/05/12.
17/05/12.
17/05/12.
17/05/12.
17/05/12.
17/05/12.
17/05/12.
$
$
$
%
2.89.
2.89.
2.89.
2.89.
2.89.
2.89.
2.89.
2.89.
2.89.
2.89.
2.89.
2.89.
2.89.
2.89.
1.475.
1.270.
1.475.
1.270.
1.475.
1.270.
1.475.
1.270.
1.475.
1.270.
1.475.
1.270.
1.475.
1.270.
0.18.
0.18.
0.18.
0.18.
0.18.
0.18.
0.18.
0.18.
0.18.
0.18.
0.18.
0.18.
0.18.
0.18.
2.79.
2.79.
2.79.
2.79.
2.79.
2.79.
2.79.
2.79.
2.79.
2.79.
2.79.
2.79.
2.79.
2.79.
%
3.0.
6.0.
3.0.
6.0.
3.0.
6.0.
3.0.
6.0.
3.0.
6.0.
3.0.
6.0.
3.0.
6.0.
%
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
90
31 Key management personnel disclosures (continued)
(b) Award holdings of key management personnel (continued)
2010 Awards grant - pricing model inputs
Number of
awards
Grant
date
Share price at
grant date
Value per
Award at
grant date
Expected
annual
dividends
Risk-free
interest
rate
Lack of
marketability
discount
TSR
condition
discount
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.M.P.Chellew
...Tranche.1.
...Tranche.2.
...Tranche.3.
.G.Agriogiannis
...Tranche.1.
...Tranche.2.
...Tranche.3.
.M.Brydon
...Tranche.1.
...Tranche.2.
...Tranche.3.
.M.R.D.Clayton
...Tranche.1.
...Tranche.2.
...Tranche.3.
.M.Kelly
...Tranche.1.
...Tranche.2.
...Tranche.3.
.S.B.Rogers.and.M.A.Finney
...Tranche.1.
...Tranche.2.
...Tranche.3.
.S.J.Toppenberg
...Tranche.1.
...Tranche.2.
...Tranche.3.
.
540,000.
540,000.
720,000.
-.
97,500.
130,000.
180,000.
180,000.
240,000.
90,000.
90,000.
120,000.
150,000.
150,000.
200,000.
97,500.
97,500.
130,000.
04/06/2010.
04/06/2010.
04/06/2010.
-.
21/11/2011.
21/11/2011.
04/06/2010.
04/06/2010.
04/06/2010.
04/06/2010.
04/06/2010.
04/06/2010.
04/06/2010.
04/06/2010.
04/06/2010.
04/06/2010.
04/06/2010.
04/06/2010.
60,000.
60,000.
80,000.
04/06/2010.
04/06/2010.
04/06/2010.
$
$
$
%
2.81.
2.81.
2.81.
-.
2.87.
2.87.
2.81.
2.81.
2.81.
2.81.
2.81.
2.81.
2.81.
2.81.
2.81.
2.81.
2.81.
2.81.
2.81.
2.81.
2.81.
1.585.
1.330.
1.095.
-.
1.785.
1.565.
1.585.
1.330.
1.095.
1.585.
1.330.
1.095.
1.585.
1.330.
1.095.
1.585.
1.330.
1.095.
1.585.
1.330.
1.095.
0.17.
0.18.
0.19.
-.
0.17.
0.17.
0.17.
0.18.
0.19.
0.17.
0.18.
0.19.
0.17.
0.18.
0.19.
0.17.
0.18.
0.19.
0.17.
0.18.
0.19.
4.79.
4.79.
4.79.
-.
3.20.
3.20.
4.79.
4.79.
4.79.
4.79.
4.79.
4.79.
4.79.
4.79.
4.79.
4.79.
4.79.
4.79.
4.79.
4.79.
4.79.
%
3.0.
6.0.
9.0.
-.
3.0.
6.0.
3.0.
6.0.
9.0.
3.0.
6.0.
9.0.
3.0.
6.0.
9.0.
3.0.
6.0.
9.0.
3.0.
6.0.
9.0.
%
50.0
50.0
50.0
-
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
91
31 Key management personnel disclosures.(continued)
(c) Shareholdings of key management personnel
The.movement.during.the.reporting.period.in.the.number.of.ordinary.shares.in.Adelaide.Brighton.Ltd.held.directly,.indirectly.or.beneficially,.by.each.key.management.
person,.including.their.related.parties,.is.as.follows:
Number of shares held in Adelaide Brighton Limited at 31 December 2012
Non-executive Directors
L.V.Hosking.
R.D.Barro.
G.F.Pettigrew..
K.B.Scott-McKenzie.
A.M.Tansey.
C.L.Harris1.
Executive Director
M.P.Chellew.
Senior executives
G.Agriogiannis.
M.Brydon.
M.R.D.Clayton.
M.Kelly..
S.B.Rogers.
S.J.Toppenberg.
Balance at
start of year
4,739.
169,087,036.
7,739.
5,000.
5,000.
100,479.
448,366.
-.
5,000.
73.
5,000.
-.
-.
Received on
exercise of EPSP
Other changes
-.
-.
-.
-.
-.
-.
536,220.
-.
178,740.
89,370.
148,950.
96,818.
59,580.
-.
24,220,000.
-.
-.
-.
(100,479.).
(536,220.).
-..
(178,740.).
(89,370.).
(148,950.).
(96,818.).
(59,580.).
Balance at
end of year
4,739
193,307,036
7,739
5,000
5,000
-
448,366
-
5,000
73
5,000
-
-
Total
169,668,432
1,109,678
23,009,843
193,787,953
1.C.L.Harris.retired.17.May.2012,.therefore.his.equity.holding.has.been.reduced.to.nil.at.31.December.2012.through.‘other.changes’.
Number of shares held in Adelaide Brighton Limited at 31 December 2011
Non-executive Directors
L.V.Hosking.
R.D.Barro.
G.F.Pettigrew..
K.B.Scott-McKenzie.
A.M.Tansey1.
C.L.Harris.
Executive Director
M.P.Chellew.
Senior executives
G.Agriogiannis2..
M.Brydon.
M.R.D.Clayton.
M.A.Finney3.
M.Kelly..
S.B.Rogers.
S.J.Toppenberg.
Balance at
start of year
4,739.
147,179,642.
7,739.
-.
-.
70,479.
448,366.
-.
-.
73.
78,400.
10,000.
-.
-.
Received on
exercise of EPSP
-.
-.
-.
-.
-.
-.
435,000.
-.
100,000.
100,000.
100,000.
100,000.
100,000.
100,000.
Other changes
-.
21,907,394.
-.
5,000.
5,000.
30,000.
(435,000.).
-..
(95,000.).
(100,000.).
(178,400.).
(105,000.).
(100,000.).
(100,000.).
Balance at
end of year
4,739
169,087,036
7,739
5,000
5,000
100,479
448,366
-
5,000
73
-
5,000
-
-
Total
147,799,438
1,035,000
20,833,994
169,668,432
1.A.M.Tansey.appointed.5.April.2011.
2.G.Agriogiannis.commenced.employment.effective.27.June.2011.
3.M.A.Finney.ceased.employment.effective.9.May.2011,.therefore.his.equity.holding.has.been.reduced.to.nil.at.31.December.2011.through.‘other.changes’.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
92
(d) Other transactions with key management personnel
R.D.Barro,.a.Director.of.Adelaide.Brighton.Ltd,.is.Managing.Director.of.Barro.Group.Pty.Ltd..Barro.Group.Pty.Ltd.and.Adelaide.Brighton.Ltd,.through.its.100%.owned.
subsidiary,.Adelaide.Brighton.Management.Ltd,.each.control.50%.of.Independent.Cement.and.Lime.Pty.Ltd,.a.distributor.of.cement.and.lime.in.Victoria.and.New.South.
Wales.
During.the.year,.the.Barro.Group.of.companies.purchased.goods.and.materials.from.and.sold.goods,.materials.and.services.to.Independent.Cement.and.Lime.Pty.Ltd.
and.the.Group..The.Barro.Group.of.companies.also.purchased.goods.and.materials.from.Sunstate.Cement.Ltd,.a.Company.in.which.the.Group.has.a.50%.share.and.
other.entities.in.the.Group.
M.P.Chellew,.an.executive.Director.of.Adelaide.Brighton.Ltd.and.M.Brydon,.a.senior.executive.of.Adelaide.Brighton.Ltd,.are.Directors.of.Sunstate.Cement.Ltd..M.Brydon,.
a.senior.executive.of.Adelaide.Brighton.Ltd,.is.a.Director.of.Independent.Cement.and.Lime.Pty.Ltd..During.the.year,.the.Group.traded.significantly.with.both.Independent.
Cement.and.Lime.Pty.Ltd.and.Sunstate.Cement.Ltd.
All.transactions.involving.the.Barro.Group.Pty.Ltd.and.Adelaide.Brighton.Ltd.and.its.subsidiaries,.Independent.Cement.and.Lime.Pty.Ltd.and.its.subsidiaries.and.
Sunstate.Cement.Ltd.were.conducted.on.standard.commercial.terms.
From.time.to.time.Directors.of.the.Company.or.its.controlled.entities,.or.their.related.parties,.may.purchase.goods.from.the.Group..These.purchases.are.on.the.same.
terms.and.conditions.as.those.entered.into.by.other.Group.employees..These.transactions.are.conducted.on.standard.commercial.terms.
($)
Aggregate.amounts.of.the.above.transactions.with.the.Directors.and.their.related.parties:
Sales.to.Director.related.parties.
Purchases.from.Director.related.parties.
.
.
.
.
32 Remuneration of auditors
During.the.year.the.following.fees.were.paid.or.payable.for.services.provided.by.the.auditor.of.the.parent.entity,..
its.related.practices.and.non-related.audit.firms:
(a) Audit services
PricewaterhouseCoopers.Australian.firm
..Audit.and.review.of.financial.statements.
Total.remuneration.for.audit.services.
(b) Non-audit services
PricewaterhouseCoopers.Australian.firm
..Other.assurance.services.
Total.remuneration.for.non-audit.services.
.
.
.
.
.
.
.
.
Consolidated
2012
2011
59,067,273.
44,047,982.
59,055,100
36,152,330
685,771.
683,379
685,771.
683,379
90,330.
90,330.
22,100
22,100
.
.
.
.
.
.
.
.
.
.
.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
93
33 Related parties
(a) Key management personnel
Disclosures.relating.to.key.management.personnel.are.set.out.in.note.31.
(b) Controlled entities
.
.Details.of.interests.in.controlled.entities.are.set.out.in.note.34..The.ultimate.parent.company.is.Adelaide.Brighton.Ltd.
(c) Joint venture and associate entities
Details.of.interests.in.joint.venture.and.associate.entities.are.set.out.in.note.11(a)..Nature.of.transactions.with.joint.venture.and.associate.entities.is.detailed.below:
Adelaide.Brighton.Cement.Ltd.and.Morgan.Cement.International.Ltd.supplied.finished.products.and.raw.materials.to.Sunstate.Cement.Ltd.and.Independent.Cement.and.
Lime.Pty.Ltd..Hy-Tec.Industries.Pty.Ltd,.Hy-Tec.Industries.(Victoria).Pty.Ltd,.Hy-Tec.Industries.(Queensland).Pty.Ltd,.Adbri.Masonry.Group.Pty.Ltd.and.Adelaide.Brighton.
Cement.Ltd.purchased.finished.products,.raw.materials.and.transportation.services.from.Sunstate.Cement.Ltd.and.Independent.Cement.and.Lime.Pty.Ltd.
All.transactions.are.on.normal.commercial.terms.and.conditions.and.transactions.for.the.supply.are.covered.by.shareholder.agreements.
($’000)
(d) Transactions with related parties
The.following.transactions.occurred.with.related.parties:
Sales.of.goods
-.Joint.venture.entities.
Purchases.of.materials.and.goods
-.Joint.venture.entities.
Interest.revenue
-.Joint.venture.entities.
-.Other.related.parties.
Dividend.and.distribution.income
-.Joint.venture.entities.
.
.
.
.
.
Superannuation.contributions
-.Contributions.to.superannuation.funds.on.behalf.of.employees.
-.Reimbursement.of.superannuation.contribution.by.joint.venture.entity.
Loans.advanced.to/(from):
-.Joint.venture.entities.
.
Consolidated
2012
2011
.
.
.
.
.
.
.
.
218,101.
192,404
43,946.
42,019
891.
-.
1,145
20
23,864.
26,095
11,585.
152.
11,112
202
2,403.
3,203
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
94
($’000)
33 Related parties.(continued)
(e) Outstanding balances arising from sales/purchases of goods and services
The.following.balances.are.outstanding.at.the.reporting.date.in.relation.to.transactions.with.related.parties:
Consolidated
2012
2011
Current.receivables
-.Joint.venture.entities.(interest).
-.Joint.venture.entities.(trade).
Non-current.receivables
-.Joint.venture.entities.(loans).
Current.payables
-.Joint.venture.entities.(trade).
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
417.
14,432.
586
14,979
25,362.
22,336
4,392.
4,831
Outstanding.balances.are.unsecured.and.repayable.in.cash..No.provisions.for.doubtful.receivables.have.been.raised.in.relation.to.any.outstanding.balances.
(f) Loans to related parties
A.loan.to.a.wholly.owned.controlled.entity,.Adelaide.Brighton.Cement.Ltd,.of.$82,860,247.(2011:.$82,860,247).funds.a.capital.reduction.payment..The.loan.is.
subordinated.and.is.only.repayable.after.full.repayment.of.external.borrowings..There.was.no.interest.charged.on.the.outstanding.balance.during.the.reporting.year...
All.other.loans.to.and.from.Group.entities.are.repayable.at.call.
A.loan.to.a.wholly.controlled.entity,.Adbri.Masonry.Group.Pty.Ltd,.of.$42,718,929.(2011:.$42,718,929).did.not.have.interest.charged.on.the.outstanding.balance..
during.the.reporting.year.
A.loan.to.a.joint.venture.entity,.Independent.Cement.and.Lime.Pty.Ltd,.has.interest.charged.at.the.ruling.commercial.rates.on.the.outstanding.balance..Interest.revenue.
brought.to.account.by.the.Group.during.the.reporting.year.on.this.loan.was.$891,091.(2011:.$1,145,264).
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
95
34 Investments in controlled entities
Name of entity
Place of
incorporation
Class of
shares
Equity holding
2012
%
2011
%
Adelaide Brighton Ltd
Adelaide.Brighton.Cement.Ltd2.
Adelaide.Brighton.Cement.Inc.
Adelaide.Brighton.Cement.Investments.Pty.Ltd2.
Adelaide.Brighton.Management.Ltd2.
Adelaide.Brighton.Cement.International.Pty.Ltd1.
Adelaide.Brighton.Intellectual.Property.Pty.Ltd1.
Cement.Resources.Consolidated.Pty.Ltd1.
Cockburn.Cement.Ltd2.
Hy-Tec.Industries.(Queensland).Pty.Ltd2.
Northern.Cement.Ltd2.
Premier.Resources.Ltd2.
Adbri.Masonry.Group.Pty.Ltd2.
Adelaide Brighton Cement Ltd
Exmouth.Limestone.Pty.Ltd1.
Adelaide Brighton Cement Inc
Adelaide.Brighton.Cement.(Florida).Inc.
Adelaide.Brighton.Cement.(Hawaii).Inc.
Hileah.(Florida).Management.Inc.
Adelaide Brighton Management Ltd
Accendo.Pty.Ltd1.
Global.Cement.Australia.Pty.Ltd1.
Hurd.Haulage.Pty.Ltd2.
K.C..Mawson.Pty.Ltd1.
Adelaide Brighton Cement International Pty Ltd
Adelaide.Brighton.Cement.Inc.
Fuel.&.Combustion.Technology.International.Ltd.
Fuel & Combustion Technology International Ltd
Fuel.&.Combustion.Technology.International.Inc.
Northern Cement Ltd
Mataranka.Lime.Pty.Ltd1.
Cockburn Cement Ltd
Cockburn.Waters.Pty.Ltd1.
Hydrated.Lime.Pty.Ltd1.
Chemical.Unit.Trust..
Kalgoorlie.Lime.&.Chemical.Company.Pty.Ltd1.
Premier Resources Ltd
Hy-Tec.Industries.Pty.Ltd2.
Hy-Tec.Industries.(Victoria).Pty.Ltd2.
Bonfoal.Pty.Ltd1.
Aus-10.Rhyolite.Pty.Ltd1.
Morgan.Cement.International.Pty.Ltd2.
Hy-Tec Industries (Victoria) Pty Ltd
CRC2.Pty.Ltd1.
CRC3.Pty.Ltd1.
Hy-Tec.Industries.(Victoria).No.1.Pty.Ltd1.
Hy-Tec.Industries.(Victoria).No.2.Pty.Ltd1.
Sheltacrete.Pty.Ltd1.
Adbri Masonry Group Pty Ltd
Adbri.Masonry.Pty.Ltd2.
Adbri.Mining.Products.Pty.Ltd1.
C&M.Masonry.Products.Pty.Ltd2.
Betta.Brick.Pty.Ltd1.
C&M.Brick.(Bendigo).Pty.Ltd1.
C&M.Design/Construct.Pty.Ltd1.
South.Australia.
Washington.USA.
South.Australia.
South.Australia.
South.Australia.
South.Australia.
South.Australia.
Western.Australia.
South.Australia.
Northern.Territory.
New.South.Wales.
Victoria.
Western.Australia.
Florida.USA.
Hawaii.USA.
Florida.USA.
South.Australia.
New.South.Wales.
Victoria.
New.South.Wales.
Wash..State.USA.
United.Kingdom.
USA.
South.Australia.
Western.Australia.
Western.Australia.
Western.Australia.
Western.Australia.
New.South.Wales.
New.South.Wales.
New.South.Wales.
New.South.Wales.
New.South.Wales.
Victoria.
Victoria.
New.South.Wales.
New.South.Wales.
New.South.Wales.
Queensland.
Queensland.
South.Australia.
Victoria.
Victoria.
Victoria.
1.Small.proprietary.Company.as.defined.by.the.Corporations Act.and.is.not.required.to.be.audited.for.statutory.purposes.
2.These.controlled.entities.have.been.granted.relief.from.the.necessity.to.prepare.financial.reports.in.accordance.with.Class.Order
98/1418.issued.by.the.Australian.Securities.&.Investments.Commission..For.further.information.see.note.35.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
96
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Units.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
100.
80.
100.
100.
100.
100.
100.
100.
100.
100.
100.
100.
51.
100.
100.
100.
100.
100.
100.
100.
20.
100.
100.
100.
100.
100.
100.
100.
100.
100.
100.
100.
100.
100.
100.
100.
100.
100.
100.
100.
100.
100.
100.
100.
100
80.
100
100
100.
100
100
100
100
100
100
100
51
100
100
100
100
100
100
100
20.
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
35 Deed of cross guarantee
As.at.the.date.of.this.report,.Adelaide.Brighton.Ltd,.Adelaide.Brighton.Cement.Ltd,.Cockburn.Cement.Ltd,.Adelaide.Brighton.Cement.Investments.Pty.Ltd,.Adelaide.
Brighton.Management.Ltd,.Northern.Cement.Ltd,.Premier.Resources.Ltd,.Hy-Tec.Industries.Pty.Ltd,.Hy-Tec.Industries.(Victoria).Pty.Ltd,.Hy-Tec.Industries.(Queensland).
Pty.Ltd,.Morgan.Cement.International.Pty.Ltd,.Adbri.Masonry.Group.Pty.Ltd,.C&M.Masonry.Products.Pty.Ltd,.Adbri.Masonry.Pty.Ltd.and.Hurd.Haulage.Pty.Ltd.are.parties.
to.a.Deed.of.Cross.Guarantee.(the.Deed).under.which.each.Company.guarantees.the.debts.of.the.others..Hurd.Haulage.Pty.Ltd.entered.into.the.deed.of.cross.guarantee.
on.20.November.2012..By.entering.into.the.Deed,.the.wholly-owned.entities.have.been.relieved.from.the.requirement.to.prepare.a.financial.report.and.Directors’.report.
under.Class.Order.98/1418.(as.amended).issued.by.the.Australian.Securities.&.Investments.Commission..The.above.companies.represent.a.“Closed.Group”.for.the.
purposes.of.the.Class.Order,.and.as.there.are.no.other.parties.to.the.Deed.that.are.controlled.by.the.Company,.they.also.represent.the.“Extended.Closed.Group”.
Set.out.below.is.a.consolidated.balance.sheet.as.at.31.December.2012.of.the.Closed.Group.
($ Million)
Current assets
..Cash.and.cash.equivalents.
..Trade.and.other.receivables.
..Inventories.
..Carbon.units.
.
..Assets.classified.as.held.for.sale.
Total.current.assets.
.
.
.
.
.
.
.
Non-current assets
..Receivables.
..Investments.accounted.for.using.the.equity.method.
..Other.financial.assets.
..Property,.plant.and.equipment.
..Intangible.assets.
..Carbon.units.
.
.
.
.
.
Total.non-current.assets.
Total assets.
Current liabilities
..Trade.and.other.payables.
..Borrowings.
..Current.tax.liabilities.
..Provisions.
..Provision.for.carbon.emissions.
..Other.liabilities.
Total.current.liabilities.
Non-current liabilities
..Borrowings.
..Deferred.tax.liabilities.
..Provisions.
..Retirement.benefit.obligations.
..Provision.for.carbon.emissions.
..Other.non-current.liabilities.
Total.non-current.liabilities.
Total liabilities.
Net assets.
Equity
..Contributed.equity.
..Reserves.
..Retained.earnings..
Total equity.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
97
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
2012
2011
3.6.
171.2.
127.4.
48.0.
350.2.
1.9.
352.1.
29.5.
95.7.
10.2.
816.8.
184.3.
3.5.
7.8
238.7
118.6
-
365.1
-
365.1
27.2
93.2
10.2
767.0
182.3
-
1,140.0.
1,079.9
1,492.1.
1,445.0
66.1.
20.0.
5.7.
25.8.
25.2.
19.5.
162.3.
299.3.
55.7.
31.1.
9.0.
8.4.
0.1.
403.6.
565.9.
926.2.
696.6.
2.1.
227.5.
926.2.
156.8
0.7
6.9
21.5
-
4.6
190.5
258.7
58.3
35.0
10.9
-
0.1
363.0
553.5
891.5
694.6
2.3
194.6
891.5
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
35 Deed of cross guarantee.(continued)
Set.out.below.is.a.condensed.consolidated.income.statement,.a.consolidated.statement.of.comprehensive.income.and.a.summary.of.movements.in.consolidated.
retained.profits.for.the.year.ended.31.December.2012.of.the.Closed.Group.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
2012
201.7.
(53.0 ).
148.7.
194.6.
(10.9 ).
148.7..
0.2..
(105.1 ).
227.5.
2011
202.5
(56.8.)
145.7
175.8
-
145.7
(6.1.)
(120.8.)
194.6
Consolidated
2012
2011
154.1.
(1.1 ).
65.2 .
(1.3 ).
0.4 .
1.5 .
(6.3 ).
0.6 .
(7.6 ).
(2.4 ).
(2.8 ).
200.3 .
(10.8 ).
1.1 .
(0.7 ).
(3.7 ).
(2.1 ).
(0.3 ).
4.6..
(1.9 ).
148.4
(0.3.)
57.8
(2.1.)
0.4
0.5
(9.5.)
1.2
(3.6.)
(0.9.)
(7.5.)
184.4
(8.8.)
(1.0.)
(14.3.)
(8.9.)
4.0
(18.9.)
8.1
6.7
186.5.
151.3
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
($ Million)
Profit before income tax.
Income.tax.expense.
Profit for the year.
.
.
.
Retained earnings 1 January.
Retained.earnings.on.members.entering./.leaving.Closed.Group.
Profit.for.the.year.
Other.comprehensive.income.
Dividends.paid.
.
.
.
.
Retained.earnings.31.December.
.
.
.
.
.
.
.
.
.
.
($ Million)
36 Reconciliation of profit after income tax to net cash inflow from operating activities
.
.
Profit.for.the.year.
.
..Doubtful.debts.
.
..Depreciation.and.amortisation.
.
..Share.based.payments.expense.
.
..Finance.charges.on.remediation.provision.
..Loss./.(Gain).on.sale.of.non-current.assets.
.
..Share.of.un-distributed.profits.of.joint.ventures.
.
..Non-cash.retirement.benefits.expense.
.
..Profit.on.acquisition.of.businesses.
.
..Capitalised.interest.
.
..Other.
Net.cash.provided.by.operating.activities.before.changes.in.assets.and.liabilities.
Changes.in.operating.assets.and.liabilities,.net.of.effects.from.purchase.of.controlled.entity:
..(Increase).in.inventories.
..Decrease./.(Increase).in.prepayments.
..(Increase).in.receivables.
..(Decrease).in.trade.creditors.
..(Decrease)./.Increase.in.provisions.
..(Decrease).in.taxes.payable.
..Increase.in.deferred.taxes.payable.
..(Decrease)./.increase.in.other.operating.assets.and.liabilities.
.
.
.
.
.
.
.
Net.cash.inflow.from.operating.activities.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
98
(Cents)
37 Earnings per share
Basic.earnings.per.share.
Diluted.earnings.per.share.
.
.
.
.
(Number)
Weighted average number of shares used as the denominator
Weighted.average.number.of.ordinary.shares.used.as.the.denominator.in.calculating.basic.earnings.per.share.
Adjustment.for.calculation.of.diluted.earnings.per.share:
..Awards.
.
.
.
.
.
.
Weighted.average.number.of.ordinary.shares.and.potential.ordinary.shares.used.as.the.denominator.in.calculating..
diluted.earnings.per.share.
.
.
.
($ Million)
Reconciliation.of.earnings.used.in.calculating.earnings.per.share
Basic and diluted earnings per share
..Profit.after.tax.
.
..Profit.attributable.to.non-controlling.interests. .
.
.
.
.
..Profit.attributable.to.ordinary.equity.holders.of.the.Company.used.in.calculating.basic.and.diluted.earnings.per.share.
Consolidated
2012
2011
.
.
24.2.
24.0.
23.3
23.2
Consolidated
2012
2011
637,014,563.
635,895,098
.
5,975,030.
3,952,500
642,989,593.
639,847,598
Consolidated
2012
2011
.
.
.
154.1.
0.1.
154.2.
148.4
-
148.4
38 Events occurring after the balance sheet date
As.at.the.date.of.this.report,.no.other.matter.or.circumstance.has.arisen.since.31.December.2012.that.has.significantly.affected,.or.may.significantly.affect.the.Group’s.
operations,.the.results.of.those.operations,.or.the.Group’s.state.of.affairs.in.future.financial.years.
39 Segment reporting
(a) Description of segments
Management.has.determined.the.operating.segments.based.on.the.reports.reviewed.by.the.Managing.Director..These.reports.are.evaluated.regularly.in.deciding.how.to.
allocate.resources.and.in.assessing.performance.
The.two.reportable.segments.have.been.identified.as.follows;
n. Cement,.Lime.and.Concrete
n. Concrete.Products
The.operating.segments.Cement.and.Lime.and.separately.Concrete.individually.meet.the.quantitative.thresholds.required.by.AASB.8.as.well.as.meeting.the.aggregation.
criteria.allowing.them.to.be.reported.as.one.segment..Concrete.Products.meets.the.quantitative.threshold.therefore.is.reported.as.a.separate.segment..The.Cement,.
Lime.and.Concrete.Products.Joint.Ventures.form.part.of.the.above.two.reportable.segments.as.they.meet.the.aggregation.criteria.
The.major.end-use.markets.of.Adelaide.Brighton’s.products.include.residential.and.non-residential.construction,.engineering.construction,.alumina.and.steel.production.
and.mining.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
99
39 Segment reporting (continued)
(b) Segment information provided to the Managing Director
The.segment.information.provided.to.the.Managing.Director.for.the.reportable.segments.for.the.year.ended.31.December.2012.is.as.follows:
2012
Notes
($ Million)
Total.segment.operating.revenue.
Inter-segment.revenue.
Revenue.from.external.customers.
Depreciation.and.amortisation.
EBIT.
2011
Notes
($ Million)
Total.segment.operating.revenue.
Inter-segment.revenue.
Revenue.from.external.customers.
Depreciation.and.amortisation.
EBIT.
Cement, Lime
and Concrete
Concrete
Products
All other
segments
1,147.3
(37.1 )
1,110.2
49.9
219.1
Cement, Lime
and Concrete
1,124.9.
(40.7.).
1,084.2.
42.9.
225.2.
123.7
-
123.7
7.9
0.4
Concrete
Products
120.2.
-.
120.2.
8.0.
1.8.
86.1
-
86.1
7.4
6.1
All other
segments
77.3.
-.
77.3.
6.9.
(3.6.).
Total
1,357.1
(37.1 )
1,320.0
65.2
225.6
Total
1,322.4
(40.7.)
1,281.7
57.8
223.4
Sales.between.segments.are.carried.out.at.arms.length.and.are.eliminated.on.consolidation.
The.operating.revenue.assessed.by.the.Managing.Director.includes.revenue.from.external.customers.and.a.share.of.revenue.from.the.joint.ventures.and.associates.in.
proportion.to.the.Group’s.ownership.interest,.excluding.freight,.interest.and.royalty.revenue..A.reconciliation.of.segment.operating.revenue.to.revenue.from.continuing.
operations.is.provided.as.follows:
.
($ Million)
Total.segment.operating.revenue.
Inter-segment.revenue.elimination.
Freight.revenue.
Interest.revenue.
Royalties.
Elimination.of.joint.venture.and.associate.revenue.
.
.
.
.
.
Revenue.from.continuing.operations.
.
Consolidated
2012
2011
1,357.1.
(37.1 ).
129.4 .
2.6 .
0.5 .
(276.3 ).
1,322.4
(40.7.)
102.7
2.4
1.2
(287.6.)
1,176.2.
1,100.4
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
The.Managing.Director.assesses.the.performance.of.the.operating.segments.based.on.a.measure.of.EBIT..This.measurement.basis..
excludes.the.effect.of.net.interest..A.reconciliation.of.the.EBIT.to.operating.profit.before.income.tax.is.provided.as.follows:
EBIT.
Net.interest.
Profit.before.income.tax.
.
.
.
(c) Other segment information
.
.
.
.
.
.
.
.
225.6.
(16.4 ).
209.2.
223.4
(17.0.)
206.4
Revenues.of.approximately.$144.2.million.(2011:.$136.5.million).are.derived.from.a.single.customer...
These.revenues.are.attributable.to.the.Cement,.Lime.and.Concrete.segment.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
100
($ Million)
40 Parent entity financial information
(a) Summary financial information
The.individual.financial.statements.for.the.Company.show.the.following.aggregate.amounts:
.
Balance sheet
Current.assets.
Total.assets.
Current.liabilities.
Total.liabilities.
.
.
.
.
Net assets.
Shareholders’.equity
Issued.capital.
Reserves
..Share-based.payments.
Retained.earnings.
Total shareholders’ equity.
Profit for the year.
Total comprehensive income.
.
.
.
.
.
.
.
(b) Guarantees entered into by the parent entity
Bank.guarantees.
.
(c) Contingent liabilities of the parent entity
2012
2011
.
.
.
.
.
.
.
.
.
.
.
803.0.
1,334.4.
204.4.
525.1.
693.3
1,225.6
210.9
471.0
809.3.
754.6
689.6.
2.2.
117.5.
809.3.
158.0.
158.0.
687.6
2.3
64.7
754.6
187.9
187.9
2.1.
2.1
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
The.parent.entity.did.not.have.any.contingent.liabilities.as.at.31.December.2012.or.31.December.2011.other.than.the.Bank.guarantees.detailed.above.
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.FOR.THE.YEAR.ENDED.31.DECEMBER.2012
NOTES.TO.AND.FORMING.PART.OF.THE.FINANCIAL.STATEMENTS
101
Directors’ declaration
Auditor’s declaration
In the Directors’ opinion:
Auditor’s Independence Declaration
.
.
(a).the.financial.statements.and.notes.set.out.on.pages.
53.to.101.are.in.accordance.with.the.Corporations
Act 2001,.including:
.
.As.lead.auditor.for.the.audit.of.Adelaide.Brighton.
Ltd.for.the.year.ended.31.December.2012,.I.
declare.that.to.the.best.of.my.knowledge.and.
belief,.there.have.been:
(i)..complying.with.Accounting.Standards,.the.
Corporations Regulations 2001.and.other.
mandatory.professional.reporting.requirements;.
and
. a).no.contraventions.of.the.auditor.independence.
requirements.of.the.Corporations Act 2001.in.
relation.to.the.audit;.and
.
(ii).giving.a.true.and.fair.view.of.the.consolidated.
entity’s.financial.position.as.at.31.December.2012.
and.of.its.performance.for.the.financial.year.ended.
on.that.date;.and
.
(b).there.are.reasonable.grounds.to.believe.that.the.
Company.will.be.able.to.pay.its.debts.as.and.when.
they.become.due.and.payable;.and
.
(c).at.the.date.of.this.declaration,.there.are.reasonable.
grounds.to.believe.that.the.members.of.the.
Extended.Closed.Group.identified.in.note.35.will.be.
able.to.meet.any.obligations.or.liabilities.to.which.
they.are,.or.may.become,.subject.by.virtue.of.the.
Deed.of.Cross.Guarantee.described.in.note.35.
Note.1(a).confirms.that.the.financial.statements.
also.comply.with.International.Financial.Reporting.
Standards.as.issued.by.the.International.Accounting.
Standards.Board.
The.Directors.have.been.given.the.declarations.by.
the.Managing.Director.and.Chief.Financial.Officer.
required.by.section.295A.of.the.Corporations Act
2001.
This.declaration.is.made.in.accordance.with.a.
resolution.of.the.Directors.
. b).no.contraventions.of.any.applicable.code.of.
professional.conduct.in.relation.to.the.audit.
.
.
.
.
.
.
.
.
.
.
.This.declaration.is.in.respect.of.Adelaide.Brighton.
Ltd.and.the.entities.it.controlled.during.the.period.
.K.R.Reid.
.Partner.
.PricewaterhouseCoopers
Adelaide.
7.March.2013
Liability limited by a scheme approved under Professional
Standards Legislation.
PricewaterhouseCoopers
ABN 52 780 433 757
.91.King.William.Street,.Adelaide.SA.5000
.GPO.Box.418,.Adelaide.SA.5001
.Telephone.+61.8.8218.7000
.Facsimile.+61.8.8218.7999
.www.pwc.com.au
Mark.Chellew
Managing.Director
Dated.7.March.2013
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES.
FOR.THE.YEAR.ENDED.31.DECEMBER.2012
102
Independent audit report
Report on the financial report
Auditor’s responsibility
Auditor’s opinion
We.have.audited.the.accompanying.financial.report.
of.Adelaide.Brighton.Limited.(the.company),.which.
comprises.the.balance.sheet.as.at.31.December.
2012,.and.the.income.statement,.the.statement.
of.comprehensive.income,.statement.of.changes.
in.equity.and.statement.of.cash.flows.for.the.year.
ended.on.that.date,.a.summary.of.significant.
accounting.policies,.other.explanatory.notes.and.
the.directors’.declaration.for.both.Adelaide.Brighton.
group.(the.consolidated.entity)..The.consolidated.
entity.comprises.the.company.and.the.entities.it.
controlled.at.the.year’s.end.or.from.time.to.time.
during.the.financial.year.
Directors’ responsibility for the financial
report
The.directors.of.the.company.are.responsible.for.
the.preparation.of.the.financial.report.that.gives.
a.true.and.fair.view.in.accordance.with.Australian.
Accountant.Standards.and.the.Corporations Act
2001.and.for.such.internal.control.as.the.directors.
determine.is.necessary.to.enable.the.preparation.
of.the.financial.report.that.is.free.from.material.
misstatement,.whether.due.to.fraud.or.error..In.
Note.1,.the.directors.also.state,.in.accordance.with.
Accounting.Standard.AASB.101.Presentation of
Financial Statements, that.the.financial.statements.
comply.with.International Financial Reporting
Standards.
Our.responsibility.is.to.express.an.opinion.on.the.
financial.report.based.on.our.audit..We.conducted.
our.audit.in.accordance.with.Australian.Auditing.
Standards..These.Auditing.Standards.require.that.
we.comply.with.relevant.ethical.requirements.
relating.to.audit.engagements.and.plan.and.
perform.the.audit.to.obtain.reasonable.assurance.
whether.the.financial.report.is.free.from.material.
misstatement.
.
.
.
In.our.opinion:
(a).the.financial.report.of.Adelaide.Brighton.Limited.
is.in.accordance.with.the.Corporations Act 2001,.
including:
(i).giving.a.true.and.fair.view.of.the.consolidated.entity’s.
financial.position.as.at.31.December.2012.and.of.its.
performance.for.the.year.ended.on.that.date;.and
An.audit.involves.performing.procedures.to.obtain.
audit.evidence.about.the.amounts.and.disclosures.
in.the.financial.report..The.procedures.selected.
depend.on.the.auditor’s.judgement,.including.the.
assessment.of.the.risks.of.material.misstatement.
of.the.financial.report,.whether.due.to.fraud.or.
error..In.making.those.risk.assessments,.the.auditor.
considers.internal.control.relevant.to.the.entity’s.
preparation.and.fair.presentation.of.the.financial.
report.in.order.to.design.audit.procedures.that.
are.appropriate.in.the.circumstances,.but.not.
for.the.purpose.of.expressing.an.opinion.on.the.
effectiveness.of.the.entity’s.internal.control..An.
audit.also.includes.evaluating.the.appropriateness.
of.accounting.policies.used.and.the.reasonableness.
of.accounting.estimates.made.by.the.directors,.as.
well.as.evaluating.the.overall.presentation.of.the.
financial.report.
Our.procedures.include.reading.the.other.
information.in.the.Annual.Report.to.determine.
whether.it.contains.any.material.inconsistencies.
with.the.financial.report.
We.believe.that.the.audit.evidence.we.have.
obtained.is.sufficient.and.appropriate.to.provide.a.
basis.for.our.audit.opinions.
Independence
.
(ii).complying.with.Australian.Accounting.Standards.
(including.the.Australian.Accounting.Interpretations).
and.the.Corporations Regulations 2001;.and
.
.
.
(b).the.financial.report.and.notes.also.comply.with.
International.Financial.Reporting.Standards.as.
disclosed.in.Note.1.
Report on the Remuneration Report
We.have.audited.the.remuneration.report.included.
in.pages.8.to.22.of.the.directors’.report.for.the.
year.ended.31.December.2012..The.directors.of.
the.company.are.responsible.for.the.preparation.
and.presentation.of.the.remuneration.report.in.
accordance.with.section.300A.of.the.Corporations
Act 2001..Our.responsibility.is.to.express.an.
opinion.on.the.remuneration.report,.based.on.our.
audit.conducted.in.accordance.with.Australian.
Auditing.Standards.
Auditor’s opinion
In.our.opinion,.the.remuneration.report.of.
Adelaide.Brighton.Limited.for.the.year.ended.31.
December.2012,.complies.with.section.300A.of.the.
Corporations Act 2001.
In.conducting.our.audit,.we.have.complied.with.the.
independence.requirements.of.the.Corporations
Act 2001.
.
.PricewaterhouseCoopers
.
.
.
.
.
.
.
.K.R.Reid.
.Partner.
Adelaide.
7.March.2013
Liability limited by a scheme approved under Professional
Standards Legislation.
PricewaterhouseCoopers
ABN 52 780 433 757
.91.King.William.Street,.Adelaide.SA.5000
.GPO.Box.418,.Adelaide.SA.5001
.Telephone.+61.8.8218.7000
.Facsimile.+61.8.8218.7999
.www.pwc.com.au
ADELAIDE.BRIGHTON.LTD.AND.ITS.CONTROLLED.ENTITIES. .
FOR.THE.YEAR.ENDED.31.DECEMBER.2012
103
.Profit.from.discontinued.operations..
.Non-controlling.interests.
Net profit after tax attributable
to members.
Group balance sheet.
.Current.assets.
Financial history
Year ended
($ Million unless stated)
Dec
2012
Dec
2011
Dec
2010
Dec
2009
Dec
2008
Dec
2007
Dec
2006
Dec
2005
Dec7
2004
Dec
2003
Dec
2002
Dec
2001
Statements of financial performance
Sales.revenue.
1,176.2. 1,100.4. 1,072.9.
987.2.
.1,022.4..
.888.4..
.794.7..
.717.3..
.683.4..
.630.6..
.486.8..
.387.8.
.Depreciation.and.amortisation.
(65.2)..
(57.8)..
(52.8)..
(56.8)..
(56.8)..
(52.4)..
(51.8)..
(47.0)..
(51.4)..
(52.3)..
(45.1)..
(41.0).
.Earnings.before.interest.and.tax.
225.6.
223.4.
216.2.
185.3.
189.1.
.171.3..
.148.8..
.134.1..
.119.6..
.97.0..
.80.0..
.46.9.
.Net.interest.earned.(paid).
(16.4)..
(17.0)..
(14.0)..
(16.7)..
(33.8)..
(21.7)..
(15.2)..
(14.0)..
(14.7)..
(12.6)..
(13.1)..
(16.3).
Profit before tax - continuing operations. 209.2.
206.4.
202.2.
168.6.
.155.3..
.149.6..
.133.6..
.120.1..
.104.9..
.84.4..
.66.9..
.30.6.
.Tax.expense.
(55.1)..
(58.0)..
(50.8)..
(45.4)..
(34.5)..
(35.7)..
(31.0)..
(29.2)..
(11.8)..
(25.8)..
(16.2)..
.-..
.0.1..
.-..
.-..
.-..
.-..
.0.1..
(0.1)..
.-..
.-..
.-..
.-..
.-..
(0.5)..
.-..
.-..
.1.3..
(1.1)..
.-..
(0.9)..
.-..
.-..
.-.
.-.
.-.
154.2.
148.4.
151.5.
123.1.
.120.8..
.113.9..
.102.1..
.90.9..
.93.3..
.57.7..
.50.7..
.30.6.
.
.
.
.
.
.
.
.
.
.
365.2.
307.8.
274.1.
308.8.
290.8.
.233.1..
.224.7..
.211.0..
.196.2..
.173.3..
.143.3..
.119.0.
.Property,.plant.and.equipment.
901.4.
851.0.
760.6.
774.3.
801.9.
.742.5..
.694.2..
.665.6..
.613.5..
.620.1..
.561.3..
.510.7.
.Receivables.
.Investments.
.Intangibles.
29.6.
132.1.
27.2.
97.2.
30.4.
87.7.
30.4.
72.5.
28.4.
67.6.
.29.5..
.27.5..
.23.3..
.19.1..
.12.2..
.12.5..
.66.9..
.40.8..
.38.1..
.35.6..
.33.6..
.30.8..
.11.7.
.27.6.
184.9.
183.0.
179.1.
169.0.
169.4.
.164.4..
.164.6..
.165.0..
.165.5..
.166.4..
.146.6..
.147.2.
.Other.non-current.assets.
.3.5..
.-..
.-..
.-..
.-..
.2.7..
.22.9..
.19.0..
.19.7..
.17.1..
.28.5..
.37.0.
Total assets.
.1,616.7.. .1,466.2.. .1,331.9.. .1,355.0.. .1,358.1.. .1,239.1.. .1,174.7.. .1,122.0.. .1,049.6.. .1,022.7..
.923.0..
.853.2.
.Current.borrowings.and.creditors.
.Current.provisions.
.Non-current.borrowings.
.Deferred.income.tax.and.other..
non-current.provisions.
Total liabilities.
Net assets.
.Share.Capital.
.Reserves.
.Retained.Profits.
.Shareholders’.equity.attributable.to..
members.of.the.company.
114.5.
78.4.
99.2.
34.5.
106.4.
106.5.
98.4.
.145.5..
.125.8..
.323.5..
.294.6..
.306.3..
.58.3..
52.6.
55.4.
44.5.
.49.5..
.54.1..
.58.2..
.48.1..
.42.3..
.54.8..
.49.9.
.43.8.
299.3.
258.7.
150.2.
200.5.
410.5.
.281.9..
.210.7..
.1.0..
.1.1..
.1.5..
.200.8..
.228.5.
116.4.
116.7.
88.4.
95.6.
102.8.
.94.3..
.109.1..
.105.3..
.116.8..
.97.0..
.83.3..
.77.0.
608.6.
509.1.
397.6.
458.0.
.656.2..
.571.2..
.499.7..
.488.0..
.460.6..
.447.1..
.397.2..
.399.2.
.1,008.1..
.957.1..
.934.3..
.897.0..
.701.9..
.667.9..
.675.0..
.634.0..
.589.0..
.575.6..
.525.8..
.454.0.
696.6.
694.6.
692.7.
690.4.
540.4.
.514.0..
.513.3..
.513.3..
.512.8..
.512.8..
.512.1..
.462.4.
2.1.
2.3.
.2.6..
.2.9..
.3.5..
.14.5..
.13.3..
.14.0..
.12.8..
.30.4..
.30.6..
.30.9.
306.6.
257.3.
236.00.
200.6.
155.0.
.136.4..
.139.8..
.98.4..
.54.1..
.22.4..
(19.9)..
(42.2).
1,005.3.
954.2.
931.3.
893.9.
698.9.
.664.9..
.666.4..
.625.7..
.579.7..
.565.6..
.522.8..
.451.0.
.Non-controlling.interests.
2.8.
2.9.
3.0.
3.1.
.3.0..
.3.0..
.8.6..
.8.3..
.9.3..
.10.0..
.3.0..
.3.0.
Total Shareholders funds.
1,008.1.
957.1.
934.3.
897.0.
701.9..
.667.9..
.675.0..
.634.0..
.589.0..
.575.6..
.525.8..
.454.0.
Share information.
.
.
.
.
.
.
.
.
.
.
.
.Net.Tangible.Asset.Backing.(A$/share).
.1.29..
.1.22..
1.19.
1.15.
0.97.
.0.93..
.0.94..
.0.87..
.0.78..
.0.76..
.0.70..
.0.65.
Return.on.funds.employed.
18.0%.
19.4%.
20.0%.
17.3%.
18.0%.
18.1%.
16.7%.
15.9%.
13.4%.
12.7%.
11.7%.
7.1%
Basic.earnings.per.share.(¢/share).
Diluted.earnings.(¢/share).
Total.dividend.(¢/share).
Interim.dividend.(¢/share).
Final.dividend.(¢/share).
Special.dividend.(¢/share).
24.2.
24.0.
23.3.
23.2.
23.9.
23.7.
20.4.
20.3.
22.2.
22.0.
.21.0..
.18.8..
.16.8..
.17.2..
.10.7..
.9.9..
.6.5.
.20.8..
.16.4..
14.6..
10.7..
16.51.
16.51.
21.51.
13.51.
15.01.
18.51.
18.51.
7.51.
9.01.
-.
7.51.
9.01.
-.
7.51.
9.01.
5.01.
5.51.
8.01.
-.
6.51.
8.51.
-.
6.01.
9.01.
3.51.
5.01.
7.51.
6.01.
16.2..
10.51.
4.25.1.
6.25.1.
-.
7.51.
3.51.
4.01.
-.
9.9..
5.25.
2.54.
6.0.
2.752.
3.251,6.
2.753.
-.
-.
6.5.
4.0
2.05
2.04
-
Gearing.
11. Fully.franked.
12. 60%.franked
13. 35%.franked
31.0%.
26.0%.
15.9%.
19.6%.
55.3%.
48.4%.
33.6%.
35.8%.
31.4%.
37.7%.
34.6%.
45.6%
14. 20%.franked
15. 13%.franked
16. Dividend.declared.after.year.end.as.a.result.of.Boral.Ltd.Takeover.Offer.of.Adelaide.Brighton.Ltd
17. Restated.for.AIFRS
ADELAIDE.BRIGHTON.LTD.ANNUAL.REPORT.2012
104
1
2
4
6
8
9
10
12
14
16
17
20
22
30
32
34
36
37
38
42
53
102
102
103
104
Highlights and financial summary
Chairman’s report
Managing Director’s report
Finance report
Map of operations
Review of operations
Cement and Lime
Concrete and Aggregates
Concrete Products
Joint ventures
Sustainability
People, health and safety
Corporate governance
Diversity policy
Directors
Shareholder information
Company addresses
Financial statements index
Directors’ report
Remuneration report
Financial statements
Directors’ declaration
Auditor’s independence declaration
Independent audit report
Financial history
Adelaide Brighton Limited Profile
Adelaide Brighton is a leading integrated construction materials
and industrial lime producer which supplies a range of products
into building, construction, infrastructure and mineral processing
markets throughout Australia. The Company’s principal activities
include the production, importation, distribution and marketing of
clinker, cement, industrial lime, premixed concrete, construction
aggregates and concrete products. Adelaide Brighton originated
in 1882 and is now an S&P/ASX100 company with 1,600
employees and operations in all Australian states and territories.
Cement Adelaide Brighton is the second largest supplier of
cement and clinker products in Australia with major production
facilities and market leading positions in the resource rich
states of South Australia and Western Australia. It is also
market leader in the Northern Territory. In addition to domestic
production, the Company is the largest importer of cement,
clinker and slag into Australia with an unmatched supply
network that enables efficient access to every mainland capital
city market. This network includes significant distribution joint
ventures in Victoria and Queensland.
Industrial Lime Adelaide Brighton is the largest producer of
industrial lime in Australia, with production assets in Western
Australia and South Australia. Industrial lime is an important
product for the mineral processing industry in resources rich
markets, particularly for the production of alumina and gold,
of which Australia is a leading producer.
Concrete and Aggregates Adelaide Brighton has a growing
presence in the premixed concrete and aggregates industry in
the eastern states of Australia, augmented by joint venture
operations. It has strategic aggregates reserves west of Sydney,
in regional New South Wales, south east Queensland and regional
Victoria through its wholly owned and joint venture operations.
Concrete Products Adelaide Brighton holds the leading
position in the Australian masonry products market, with
operations in Queensland, New South Wales, Victoria,
Tasmania and South Australia.
Joint ventures and associates Adelaide Brighton has a number
of significant investments in joint ventures and associates in
construction materials production and distribution. These include
major cement distribution joint ventures in Queensland (Sunstate
Cement), Victoria (Independent Cement and Lime) and New South
Wales; regional concrete and aggregates positions in Victoria,
Queensland and New South Wales; and a 30% investment in a
Malaysian white cement and clinker producer (Aalborg Portland
Malaysia), which supplies the Australian market.
Sustainability Adelaide Brighton’s commitment to sustainable
development is demonstrated through a range of actions
implemented across a balanced program of initiatives. Adelaide
Brighton believes that setting and achieving sustainability
objectives throughout the organisation assists long term
competitive business performance.
The Adelaide Brighton logo, the MCI logo,
the Cockburn Cement logo, the Swan Cement
logo, the Northern Cement logo, the Hy-Tec
logo and the Adbri Masonry logo are trade
marks of Adelaide Brighton Ltd or its
related bodies corporate.
Paper and printing of the Annual Report:
This report is printed carbon neutral by
Finsbury Green an ISO14001: 2004
(Environmental Management Systems)
certified company on paper accredited
by the Forest Stewardship Council (FSC),
which promotes environmentally appropriate,
socially beneficial and economically viable
management of the world’s forests.
The printing process uses digital printing
plates, eliminating film and associated
chemicals, vegetable-based inks made
from renewable sources. All paper waste
during the printing process is recycled.
Finsbury Green, is an independently
audited carbon neutral printer who
proactively reduces emissions then
offsets the balance with providers
approved under the Australian
Government’s National Offset
Carbon Standard.
JORGENSEN DESIGN
Adelaide Brighton Ltd 2012
Adelaide Brighton Ltd
ABN 15 007 596 018
Level 1
157 Grenfell Street
Adelaide
South Australia 5000
GPO Box 2155
Adelaide SA 5001
Telephone 08 8223 8000
Facsimile 08 8215 0030
Web www.adbri.com.au
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