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Harvard Bioscience2016 ANNUAL REPORT
PROTECTING EVERYDAY HEROES
Contents
About Ansell
Our Purpose and Vision
Our Values
Financial Summary
Global Business Units
Chairman’s Review
Chief Executive Officer’s Review
Five-Year Summary
Operating and Financial Review
Corporate Social Responsibility
& Sustainability Report
Board of Directors
Executive Leadership Team
Report by the Directors
01
02
03
04
06
07
08
11
12
30
40
42
44
Remuneration Report
Consolidated Income Statement
Consolidated Statement of
Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
52
85
86
87
88
Consolidated Statement of Cash Flows 90
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report
Shareholders
Shareholder Information
91
127
128
131
132
ANSELL LIMITED – ABN 89 004 085 330
ANSELL LIMITED ANNUAL REPORT 2016
About Ansell
Ansell is a world leader in
providing superior health
and safety protection solutions
that enhance human well being.
Ansell designs, develops and
manufactures a wide range
of full body protection solutions,
in addition to various sexual
wellness offerings.
Ansell would like to thank
these everyday heroes for
all that they do and for the
candid feedback on our
products, helping us to
continually innovate to
meet and surpass their
everyday needs.
Every day, millions of
people around the world
depend on Ansell in their
professional and personal
lives. With Ansell, they
always know they are
safer or can perform better
– because our category
expertise, innovative
products and advanced
technology give them
a peace of mind and
confidence that no other
brand can deliver.
01
ANSELL LIMITED ANNUAL REPORT 2016Our Purpose and Vision
Protection is at the heart of everything we do. But Ansell means more than just safety; our
products and services inspire confidence in people everywhere and enable businesses and
consumers to perform better. Ansell's vision is to create a world where people and products
enjoy optimal protection against the risks to which they are exposed. People, be it at work
or during their leisure time, require the right protection solution for the right application.
Protect Everyday Heroes
Alonzo Harris
Neil Wetzig
Alonzo Harris is a cabinet
maker at Jet Aviation in
St. Louis, Missouri. The
phrase ‘safety first’ takes
on a very personal
meaning. An accident in
his childhood left him
with a prosthetic eye,
leading him to be
cautious for his own
safety and the safety of
his loved ones. In fact,
Alonzo refers to his
HyFlex® gloves with
INTERCEPT™ technology
as his seatbelt – ‘you
wouldn’t drive anywhere
without buckling your
seatbelt first, and I don’t
begin my workday
without putting on my
Ansell gloves.’ Be sure
to visit Ansell.com to
watch a video of Alonzo
sharing his story.
02
Neil Wetzig is a breast
and endocrine surgeon at
Princess Alexandra
Hospital in Queensland,
Australia. He has been
leading multi-disciplinary
medical teams to the
HEAL Africa Hospital
since 2006. Neil is also a
board member of the G4
Alliance, advocating for
greater access to surgical
care for the world’s poor
and marginalised. “As a
surgeon with 31 years of
experience, I prefer Ansell
GAMMEX® gloves because
they fit well and are
comfortable, even when
‘double gloving’ for
protection. This comfort
continues even when
worn for prolonged
periods of time. Most
importantly, they provide
the touch and sensitivity
required to perform
accurate and safe surgery
with low risk of
perforation.”
ANSELL LIMITED ANNUAL REPORT 2016Our Values
• Integrity – We value doing what
is right and ethical. Ever since its
start over 100 years ago, Ansell
has been dedicated to a mission
of making a difference in the
lives of its customers. All
employees are trained annually
on our Code of Conduct and
we encourage reporting of
any concerns employees
may have including through
a confidential hotline.
• Trustworthiness – We value
acting with respect, fairness
and dependability.
• Agility – We value
responsiveness to customers
and each other, openness to
change and flexibility.
• Creativity – We value
inventiveness, innovation and
new and divergent ways of
thinking. Ansell extended its
leadership in the cut protection
market with a suite of HyFlex®
gloves engineered with next-
generation INTERCEPT™
Technology® yarns, featuring
an innovative new knitting
technology which blends
engineered, synthetic and
natural fibres into high
performance yarns.
• Passion – We value energy
and excitement, commitment,
drive and dedication.
• Involvement – We value our
team members’ input, influence
and initiative. Each year Ansell
holds its Innovation Awards,
in which hundreds of Ansell
employees around the world
submit ideas that have changed
traditional ways of thinking.
• Teamwork – We value
collaboration and a sense
of partnership, sharing
and caring.
• Excellence – We value a
tenacious focus on results,
accountability and goal
achievement.
03
ANSELL LIMITED ANNUAL REPORT 2016Financial Summary
5 Year Performance
$1,590
$207
$1,373
$171
106.5¢
110.0¢
12.5%
13.0%
$1,255
$153
101.4¢
12.2%
$1,645
$245
122.5¢
14.9%
$1,573
$237
105.1¢
15.0%
2012
2013
20141
2015
2016
Sales ($m)
EPS (¢)
EBIT ($m)
EBIT Margin (%)
1. The 2014 results exclude the US$123 million pre-tax (US$115 million after tax) one-off
restructuring charge.
Results as Reported
-4.4% -3.5% -14.2% +1.2%
Sales down
EBIT down
EPS down
Dividends up
Sales
EBIT
Profit Attributable
Operating Cash Flow2
Earnings Per Share (US cents)
Dividends Per Share (cents)
Results in Operating Currency – US Dollars
2012
US$m
2013
US$m
20141
US$m
2015
US$m
2016
US$m
1,255.3
1,372.8
1,590.2
1,645.1
1,572.8
153.2
133.0
62.6
101.4
A35.5
170.5
139.2
89.3
106.5
A38.0
206.5
156.9
150.6
110.0
245.3
187.5
116.4
122.5
236.7
159.1
144.8
105.1
US39.0
US43.0
US43.5
1. The 2014 results exclude the US$123 million pre-tax (US$115 million after tax) one-off restructuring charge.
2. Means Net cash provided by operating activities per the Consolidated Statement of Cash Flows adjusted
for Net Capex (see Glossary), Interest received and paid (Net Interest).
04
ANSELL LIMITED ANNUAL REPORT 2016Sales by Global Business Unit (GBU)
2016
US$m
654.8
396.3
301.7
220.0
2015
US$m
668.5
447.2
312.4
217.0
1,572.8 1,645.1
Movement
%
(2.1)
(11.4)
(3.5)
1.4
(4.4)
Movement
Constant
Currency %
3.3
(8.3)
(1.1)
8.2
(0.1)
Industrial
Medical
Single Use
Sexual Wellness
Total Sales
41.6% Industrial
25.2% Medical
19.2% Single Use
14.0% Sexual Wellness
Segment EBIT by GBU
2016
US$m
89.0
52.3
64.6
31.0
236.9
2015
US$m
92.7
70.6
59.7
26.1
249.1
Movement
%
(4.0)
(25.9)
8.2
18.8
(4.9)
Movement
Constant
Currency %
10.1
(17.5)
14.9
41.0
8.5
Industrial
Medical
Single Use
Sexual Wellness
EBIT
37.6% Industrial
22.1% Medical
27.3% Single Use
13.0% Sexual Wellness
Results in Constant Currency
-0.1% 8.5% -1.4% +1.2%
Sales down
EBIT up
EPS down
Dividends up
Currency Reporting
United States dollar
1. The United States dollar (US$) is the predominant global currency
of Ansell business transactions and the currency in which the global
operations are managed and reported. Non-US$ values are included
in this Report where appropriate, however unless otherwise stated,
the values appearing in this Report are in US$.
Constant currency reporting
2. Constant currency financial reporting is supplemental information. It is
provided using the best estimate of the prior year results translated at
the foreign currency exchange rates applicable to the current period and
compared to the financial performance for the current year. As such, it
is unaudited non-IFRS financial information and uses only a convenience
translation. The Board believes that this provides greater insight into
the financial performance of the business by the removal of year on year
foreign exchange volatility. The principles of constant currency reporting
and its implementation are subject to oversight by the Audit and
Compliance Committee of the Board.
05
ANSELL LIMITED ANNUAL REPORT 2016Global Business Units
Industrial
Medical
• Hand and body protective solutions for an extensive
variety of industrial applications such as manufacturing,
chemical protection, mining, and aviation
• No. 1 in multi-use industrial gloves
• Sales $655 million
• 42 per cent + growth in new product sales – led by HyFlex®
styles with INTERCEPT™ Cut Resistance Technology
• Clinically relevant safety solutions that enhance protection
for healthcare workers and patients
• No. 1 in surgical gloves
• Sales $396 million
• Introduced new SMART Pack packaging, revolutionising the way
Ansell packages gloves and providing a new, SMART solution to
reinvent the end-user experience in the medical workplace
Single Use
Sexual Wellness
• Premium disposable hand protection solutions for laboratory,
• Supreme condoms, lubricants, devices and fragrances
electronics and automotive after-market industries
• No. 1 in branded single use gloves
• Sales $302 million
• Nine Microflex® products launched outside North America
• No. 2 in branded condoms
• Sales $220 million
• SKYN® growth of 12 per cent with FEEL EVERYTHING™ campaign
increasing awareness and share for leading non-latex condom
06
ANSELL LIMITED ANNUAL REPORT 2016Chairman’s Review
Medical
“Our unique material science capabilities provide a key point of
differentiation in safety and comfort, allowing stronger partnerships to
be nurtured with both distributors and end-users. We remain committed
to our strategy of driving growth and new product innovation, which
will help us to succeed in a slow global economy.”
Glenn L L Barnes, Chairman
Sexual Wellness
Dear Fellow Shareholders,
After six successive years of revenue
growth, the results of the Group declined
in FY16 against the prior year. The primary
reasons for this were the impact of swings
in global currencies on our results that are
reported in US dollars, a world economy
that continues to grow at a slow and
uneven rate and a significant increase
in our global average tax rate. We
also experienced a setback in the
implementation of our multi-year
manufacturing strategy that temporarily
increased cost and limited supply,
affecting our Medical division. These
issues are now addressed, and we are
confident we will be back to growth in
Medical in the coming year.
Although results are down on the prior
period, there were nevertheless many
significant achievements during the fiscal
year that position Ansell well for the
future. The Sexual Wellness business
performed well with strong results in
emerging markets and with our SKYN®
brand. It was encouraging to see strong
growth of new products translating to
an improving organic growth rate for
the Industrial business, while the Single
Use business continued to perform well.
Recent acquisitions within Industrial and
Single Use are delivering targeted returns.
In addition, these acquisitions are creating
enhanced opportunities for future organic
growth, as we leverage the technology,
market positions and brands of the
acquired businesses.
Global Economic Environment
Consistent with the well reported
slowdown in global economic activity,
we continue to see a slow growth
environment in a number of our major
markets. Our growth in North America
and EMEA has been uneven and largely
reflects the generally sluggish rate of
activity, particularly in manufacturing
related verticals. Emerging market
performances have been mixed, with
steep declines in our businesses in Russia
and Brazil, offset by very strong results in
other markets such as Mexico and China.
Pressure to reduce government expenditures
on healthcare, particularly in emerging
markets with weak currencies, is creating
headwinds for our Medical business.
We do not forecast any significant
improvement in the demand environment
in the coming year. However, we remain
convinced that our businesses have the
potential to achieve meaningful organic
growth even with only modest support
from growth in market demand. Gaining
market share is an important focus for all
businesses, and we believe our strategy
will achieve success.
Results
Overall Sales declined 4 per cent to
$1,573 million and EPS was lower at
$1.05. However, at constant currency
sales were level with last year and EBIT
was up 8.5 per cent, a creditable result in
the conditions described above. Operating
cash flow continued to be strong at $145
million for the year, and we maintained a
healthy balance sheet with net debt to
EBITDA at 1.5 times.
The Board declared a final dividend of
US 23.5 cents, unfranked, taking the total
dividend to US 43.5 cents per share,
representing a 1.2 per cent increase over
the prior year. The record date for the
final dividend is 22 August 2016 and the
dividend payment on 8 September 2016.
Having reviewed options for further capital
deployment, the Board decided a year
ago that with continued strong cash flow
generation and a lack of compelling
acquisition opportunities, it was an
opportune time to buy back shares.
6.7 million shares have subsequently been
acquired for a consideration of $93 million.
Governance
A major focus of the Board this year was
a review of our remuneration practices.
This review, which was launched in
September 2015, became even more
important after our Annual General
Meeting at which a significant minority
of shareholders voted against last year’s
Remuneration Report. The outcome of
this review is addressed in detail in the
Remuneration Report. We are confident
that the changes made will further
strengthen the alignment of incentive
outcomes to shareholder value creation
while also continuing to enable us to
attract and retain talented executives
in the markets in which our operations
are located.
We have also increased the focus on
Corporate Social Responsibility (CSR),
outlined in a significantly enhanced CSR
section in this Report.
People and Culture
Ansell has a very strong culture across
all its operations worldwide and the
Board of Directors manages to interact
with people at all levels of the Company
through the meetings we hold at multiple
Ansell locations through the year.
As a global leader in protection solutions,
one of our most important goals is to
protect our own employees from hazards
in the workplace. The overall number of
injuries recorded and reviewed by the
Board declined by 4 per cent during the
year. However, the tragic death of a
contract worker in our Bangkok, Thailand
manufacturing facility has reminded us
that we can never let up in our vigilance
and determination to protect all our
workers from harm. As with all accidents
and near misses, an in-depth review of
this incident has been used to identify
improvements in structural protection
and procedures that are being
implemented at all sites.
Your Board and management team are
also committed to improving the diversity
of the Board and Company leadership.
Several important initiatives were
launched during the year to enhance
pathways to success for female leaders
in the Company.
Finally, on behalf of your Directors, I would
like to acknowledge the hard work and
commitment of all the men and women
of Ansell around the world over the past
year. This year has been a true test on
many fronts and it is the dedication of
our employees that has seen us through.
The ability of our people to show
resilience through difficult periods and
to concurrently make significant progress
gives us great confidence in the future
for the Company.
Glenn L L Barnes
Chairman
07
ANSELL LIMITED ANNUAL REPORT 2016Chief Executive Officer’s Review
“Protecting our real life superheroes is at the heart of everything we
do. But Ansell means more than just safety; our products and services
inspire confidence in people everywhere and enable businesses and
consumers to perform better.”
Magnus Nicolin, Managing Director and Chief Executive Officer
Continuing our
transformational journey
From the year I joined Ansell in 2010 to
2015, your Company delivered a strong
combination of growth in financial results
and success against our strategic
imperatives. We grew revenue by almost
60 per cent to $1.6 billion, increased
GPADE1 margins from 35 to 40 per cent,
EBIT2 margins from 10 to 15 per cent and
nearly doubled Earnings per Share (EPS)
to $1.22 in FY15.
In 2016, our sales and profits have
declined. There are several reasons for
this temporary step back or pause in our
financial performance and they will be
clearly laid out in this report. However,
despite the fact that our results have not
progressed at the rate I would have liked,
we have continued to make important
progress against the key elements of our
strategy and Ansell is now positioned
better than ever before to realise its
significant long term growth potential.
• The substantial effort made in
rejuvenating our product portfolio
is now realising strong results with the
best gains from new product sales in
10 years, particularly in the Industrial
and Sexual Wellness divisions where
each achieved over 40 per cent year
on year growth in new product sales.
• We continue to grow in emerging
markets benefiting from the increased
breadth and depth of our market
positions. Strong results in China, India
and Mexico more than offset the very
challenging conditions in Russia and
Brazil. Emerging markets now account
for 24 per cent of global sales, up from
18 per cent in 2010.
• Our acquisitions are delivering returns
well ahead of WACC (our weighted
average cost of capital), are creating
shareholder value and are also
positioning Ansell for stronger organic
growth as we leverage new product
portfolios, new technologies and
market positions globally.
• Our significant focus on building
strong global brands is paying dividends
with 56 per cent of overall sales now
generated by our core growth brands,
with growth brand revenue up more
than 100 per cent from 2010.
• Our focus on developing stronger
distribution partnerships to complement
the strength of our end user
relationships is showing encouraging
results and we expect that these
partnerships will increase Ansell’s
global market shares substantially.
Given this progress across many key
strategic objectives, it is disappointing
that this year our financial performance
is not reflecting a similar development.
The reasons are threefold. First, although
our results are reported in US$, only about
50 per cent of our revenue is earned in
US$. So the general strengthening of the
US$ has reduced the revenue and margins
of our non US$ trade. Second, we have
24%+
Growth in operating cash flow
was delivered in an operationally
tough year, this demonstrates
the strength of Ansell
seen an increase in our average global
tax rate from approximately 14 per cent
to 25 per cent this year as unbooked tax
losses have been fully recognised. Third,
global economic conditions remain
challenging; as we are seeing no overall
demand growth in developed economies
and significant volatility in the demand
in emerging markets.
These global factors are the major reason
for the short term lack of EPS growth.
However, a fourth factor has also
impacted Ansell’s FY16 performance:
some setbacks in the implementation
of our manufacturing strategy.
Our transformational changes to our
manufacturing base, which we have been
working on for the last five years with
very significant success, inevitably entail
execution risk in a business with as many
moving parts as Ansell. We encountered
significant manufacturing issues this year
when we closed one of three medical
plants and drove change in our Industrial
facility in Mexico to improve efficiency
and cost.
“We protect the people who protect you – Ansell surgical gloves provide a safer
environment for both healthcare professionals and patients; our food processing
gloves protect workers and your food; and our laboratory gloves protect the
pharmaceuticals you use and the chemists who make them.”
1. GPADE means Gross Profit after distribution expenses.
2. EBIT means earnings before interest and tax.
08
ANSELL LIMITED ANNUAL REPORT 2016EPS bridge from FY15 to FY16 – US cents
122.5
1.3
13.8
4.8
7.5
8.0
0.9
1.1
105.1
FY15
EPS
One
offs1
FX
Translation
& Hedging
Tax
rate
Higher
factory
costs
Incentive
compensation
reduction
Buyback
benefit
Underlying
EPS
changes
FY16
EPS
1. One offs of 1.3 cents were FY15 (Shah Alam property sale profit less restructuring) net of FY16 (Onguard divestment gain).
Corporate and sustainability overview
Corporate Social Responsibility and Sustainability isn't just important for people and the
planet, but also is vital for business success and critical to delivering shareholder value.
In the CSR report on page 30, we focus on four key areas of sustainable business practices
– Human Rights, Societal, Environmental and Governance.
Human Rights
Societal
Environmental
Governance
We treat all people
fairly and are
committed to
ethical behaviour
and the respect of
human rights as
established in the
United Nations
Guiding Principles
on Business and
Human Rights
and administered
through our
own policies and
guidelines.
We attract and
retain top talent
while building a
culture of diversity
and inclusion as an
employer of choice.
We create
opportunities for
growth and
employment around
the world and help
people in need
following disaster
and disease.
We make
responsible use of
natural resources
and view as
paramount our
commitments to the
safety of our
workers as well as
to the residents of
the communities in
which we operate.
We believe that
sustainable
environmental,
social and
governance (ESG)
practices start at the
top with a culture of
accountability. We
deliver value to
stakeholders and
earn the status of
responsible business
partner while also
being committed to
managing and
measuring the
sustainability of
risks and
opportunities
related to Ansell’s
business strategy.
The first issue that became apparent was
that the available capacity on our
synthetic surgical latex production lines
was less than anticipated, due to product
mix, and was being outstripped by
continued growth in our synthetic
products. Secondly, we ran into issues
ramping up production at the two
remaining sites including start up issues
on one major new line leading to high
reject rates and lower throughput.
Thirdly, we encountered a step back in
performance on our Solvex® Industrial
production in Mexico also resulting in
higher cost. The combination of these
effects were higher factory costs of
$15 million or 7.5 cents EPS.
We have made significant progress in
addressing these challenges. The Solvex
facility in Mexico is now performing better
than ever before with record production
and low reject rates. For the Medical
plants we have successfully commissioned
two new lines to address the synthetic
capacity constraint and dramatically
improved performance on other lines.
Although it will take a further three to
six months to improve the Medical supply
chain and fully rebuild inventory levels,
we are confident we will see solid Medical
growth during FY17.
I remain convinced that our manufacturing
strategy is correct and the evidence is all
around us. As illustrative examples, we
continue to see significant benefits from
the manufacturing investments made to
insource key technologies, including yarn
wrapping and PU dipping. Our multi-year
productivity initiatives such as the new
Medical ‘SMART Pack’ investments in
robotics and our integrated vending
packaging lines are all reducing cost by
leveraging LEAN manufacturing principles.
The success of our manufacturing strategy
is also seen in the excellent new product
results, building on key technology
platforms and a more efficient cost
base. For example, INTERCEPT™ is based
on a yarn technology platform that
differentiates Ansell from the competition
and allows us to increase the barriers to
entry in mechanical gloves. We are also
excited about the rapid growth of our
FORTIX™ Technology platform – a new
Nitrile dip technology that is 8 times
stronger at equivalent cost. The products
using these technologies have been some
of the biggest growth drivers in Ansell
history. New products in Medical and
Sexual Wellness continue to leverage
our unique patented capabilities in
Polyisoprene and Polychloroprene
formulations.
Group Results
Sales performance was level with last
year in constant currency (CC). While
this is below the rate of growth we
believe is achievable for our business,
there were some very encouraging
developments arising from the strategic
accomplishments mentioned above.
Sexual Wellness achieved 8 per cent
organic CC growth on continued strong
results in emerging markets and with the
SKYN® brand globally. Growth brands
within Industrial continue to deliver strong
growth with our largest brand, HyFlex®
up 5 per cent and new product sales up
42 per cent (both in CC). By the end of
FY16, sales of older brands were stabilising
and should moderately contribute to
growth going forward. Single Use also saw
strong volume growth in its growth brands
of 5 per cent. The main underperformer
in organic growth was Medical where
sales were down 8 per cent CC relating
to aforementioned production issues
as well as a 40 per cent decline in the
Russian market following that economy’s
rapid contraction.
09
ANSELL LIMITED ANNUAL REPORT 2016Chief Executive Officer’s Review continued
Organic Growth
Profitability and Cash flow
Capital Development
Medium term goals
Medium term goals
Medium term goals
Low – mid single digit organic growth
Mid – high single digit EPS growth
continued strong cash flow
Improving ROCE for base business
FY17 Business priorities
FY17 Business priorities
FY17 Business priorities
Channel partnerships
Reduce waste in manufacturing
Continued NPD success
Realise Capex productivity gains
Acquisition pipeline
more active
Continue to improve return profile
of capital expenditure
Restore Medical to growth
Continue SW momentum
“With significant progress in all four strategic growth
drivers (Innovation, Emerging Markets, Core Brands
and Vertical Channels), Ansell is ending the year in a
much stronger position.”
While EBIT in CC (constant currency) was
up 8 per cent, EPS at $1.05 were down
on last year’s $1.22. As the EPS bridge on
page 9 highlights, the primary reason for
the decline in earnings per share related
to Foreign Exchange (FX), tax and higher
factory costs as addressed above. These
factors were partly offset by a significant
reduction in the performance related
pay that management will receive as is
appropriate in a year in which we have not
met many financial performance goals.
With modest sales growth and significant
impact on profitability from the factors
discussed above, management focused
on managing cash flow well. We were
pleased with the result, with Operating
Cash Flow of $145 million up 24 per cent
on FY15.
Road ahead and outlook
As we begin FY17, I am satisfied to see
many of the key components of our
strategic plan now delivering to
expectation. The Sexual Wellness business
has continued its strong recovery. Single
Use has continued to perform ahead of
our expectations at the time of the
Barriersafe acquisition. And Industrial
is now showing very strong evidence of
success from the significant focus we have
put on product innovation and developing
end user and distributor partnerships.
While manufacturing was a setback last
year, these issues are now behind us and
we will emerge from this period a stronger
manufacturing organisation. We have
made significant changes in the leadership
of key manufacturing plants where we
fell short. We have also changed our
reporting and performance metrics within
the plants to focus better on overall
production efficiency, improving quality
and reducing rejects.
I therefore believe that we have clear
evidence from our recent performance
that we have the capability to achieve
ongoing organic sales growth in the
low to mid single digits. Continued
investments in productivity and leveraging
our global scale will translate that organic
growth into EPS growth in the mid to high
single digits while at the same time
improving our return on capital employed.
These are the three key metrics we will
be focused on over the next few years
and consequently they also form the
heart of our new long term incentive plan.
For FY17, in particular our focus will
be on the priorities shown in the table
above. We will build on the success shown
in launching new products, strengthen
distributor partnerships for Industrial
and Single use, restore Medical to growth,
while continuing to sustain the positive
momentum in Sexual Wellness.
Finally, I would like to thank the 16,000
hardworking Ansell employees who yet
again have shown tremendous resilience
and determination, especially when
under pressure.
Magnus Nicolin
Managing Director and
Chief Executive Officer
10
ANSELL LIMITED ANNUAL REPORT 2016Five-Year Summary
of Ansell Limited and subsidiaries for the year ended 30 June 2016
Income Statement
Sales
EBIT
Net financing costs
Income tax expense
Non-controlling interests
Profit attributable
Balance Sheet
Cash – excluding restricted deposits
Other current assets
Property, plant and equipment
Intangible assets
Other non-current assets
Total assets
Current payables
Current interest bearing liabilities
Other current liabilities
Non-current interest bearing liabilities
Other non-current liabilities
Total liabilities
Net assets
Issued capital
Reserves
Accumulated losses
Ansell Limited shareholders' equity
Non-controlling interests
Total shareholders' equity
Total funds employed
Share information
Basic earnings per share (cents)
Diluted earnings per share (cents)
Dividends per share (cents)
Net assets per share ($)
General
Net cash from operating activities
Capital expenditure
Shareholders (no.)
Employees (no.)
Ratios
EBIT margin (%)
Return on average shareholders' equity (%)
EBIT return on funds employed (%) – ROCE
Average days working capital
Interest cover (times)
Net liabilities to shareholders' equity (%) – gearing
Number of shares at 30 June (million)
2012
US$m
1,255
153
5
12
3
133
247
419
151
391
146
1,354
174
17
64
285
90
630
724
866
75
(231)
710
14
724
779
101.4
101.2
A35.5
5.5
98
38
30,866
10,486
12.2
18.8
19.6
79.2
30.6
52.9
131
2013
US$m
1,373
171
11
17
4
139
306
523
187
541
147
1,704
219
90
72
451
98
930
774
865
37
(144)
758
16
774
1,009
106.5
106.1
A38.0
5.9
130
40
33,126
12,596
12.5
19.1
16.9
82.5
15.5
80.6
131
2014
US$m
1,590
841
18
21
3
421
321
611
206
1,068
155
2,360
243
14
108
720
134
1,219
1,141
1,227
49
(151)
1,125
16
1,141
1,555
29.31
29.1
US39.0
7.5
221
53
33,886
12,607
5.3
4.6
5.4
85.9
4.6
78.8
153
2015
US$m
1,645
245
22
35
2
188
278
619
231
1,116
132
2,376
244
7
79
734
147
1,210
1,167
1,230
(49)
(29)
1,152
15
1,167
1,629
122.5
121.4
US43.0
7.6
200
84
36,014
14,500
14.9
16.4
15.1
81.4
11.4
79.8
153
1. FY14 underlying EBIT was $207 million, profit attributable $157 million and basic earnings per share $1.10.
2016
US$m
1,573
237
22
53
3
159
270
577
245
1,077
122
2,291
241
5
69
687
152
1,154
1,137
1,147
(88)
62
1,121
16
1,137
1,559
105.1
104.5
US43.5
7.7
232
67
39,884
15,890
15.0
14.1
14.9
85.6
10.7
77.8
148
11
ANSELL LIMITED ANNUAL REPORT 2016Operating and Financial Review
The World of Ansell
Ansell is a multicultural global company.
Our historical roots are in Australia, but for
many years our leadership team has been
based in international markets close to
our customers.
Today Ansell operates from four
corporate hubs in New Jersey, USA;
Brussels, Belgium; Cyberjaya, Malaysia
and Melbourne, Australia. Reflective of
the cultural diversity of our organisation,
our leadership team comes from 10
different countries, we manufacture
in 13 and have a local presence in 35.
North
America
Europe,
The Middle East
and Africa
Latin America
and Caribbean
Map Key
Corporate offices
Operating facilities
Manufacturing and distribution facilities
Research and development facilities
North America
Head office:
Metro Park, New Jersey
Revenue
$672m
Assets
$213m
12
Latin America and
Caribbean (LAC)
Head office:
São Paulo, Brazil
Revenue
$92m
Assets
$49m
Asia Pacific
ANSELL LIMITED ANNUAL REPORT 2016North
America
Europe,
The Middle East
and Africa
Asia Pacific (APAC)
Head office:
Melbourne, Australia
Cyberjaya, Malaysia
Revenue
$284m
Assets
$376m
Asia Pacific
Europe, the Middle
East and Africa (EMEA)
Head office:
Brussels, Belgium
Revenue
$525m
Assets
$188m
Providing global support to our multinational customers is
something Ansell is uniquely positioned to do. Our Industrial
and Single Use sales teams globally is trained in the use of our
patented Guardian® safety assessment technology, which we
conduct in 17 languages. When our distributor or end user
partners are looking to standardise on global solutions in any
of our business units, they generally find only Ansell can give
them the support they need.
13
Latin America
and Caribbean
Map Key
Corporate offices
Operating facilities
Manufacturing and distribution facilities
Research and development facilities
ANSELL LIMITED ANNUAL REPORT 2016Operating and Financial Review continued
Strategy & Focus
Innovate
and grow new
product sales
Grow share
in emerging
markets
Build strong
global brands
Organic
Growth
Develop
stronger channel
partnerships in
focus verticals
Leverage
core
processes
for improved
customer
service
In-sourcing
key materials
and technology
Profitability &
Cash Flow
Lean
Manufacturing
Rationalising
brands, SKUs,
legal entities,
sites
Capital
Deployment
Consistent
dividend
growth
High return
capex enabling
growth and
productivity
Strategic,
disciplined
M&A
14
ANSELL LIMITED ANNUAL REPORT 2016Strategy
Ansell has the market leading position globally in single and multi-use hand protection for industrial end users and in surgical gloves.
We also have the second largest market share in condoms and we have fast growing positions in body protection for industrial end users
and products providing safety solutions to the surgical operating room.
The markets we focus on provide attractive long term sources of growth. Demand for improved protection of workers whether in
medical or industrial environments, is often driven by increased regulatory requirements or government initiatives to improve worker
safety. This helps drive demand for advanced protection equipment in developed and particularly in emerging markets.
Ansell’s ability to build and maintain its leading positions in attractive markets arises from the following:
• The breadth and performance of our unmatched product range: through our focus on R&D and innovation we created many of these
product categories and continue to lead the industry in product performance.
• Our unique material science capability allows us to combine the needs of protection with a product that is comfortable to use,
thus improving worker productivity and delighting our Sexual Wellness consumers. For example, our products reduce the risk of skin
irritation or allergic reaction. Other products are unique in their field in having ergonomic certification. Many of our latest product
launches are surprisingly thin and dexterous, while still providing high protection levels.
• We have invested over many years in our patented Guardian® Technology (tools that provide comprehensive advice to end users
on the right products to use for optimal safety and productivity) and so built strong relationships with end users.
• We are uniquely positioned to provide global solutions as the only industry participant with leading market positions in all our
product ranges in all regions.
• Through a disciplined acquisition strategy we have:
– strengthened our core market positions,
– increased our ability to differentiate in material science, and
– added near adjacent product portfolios that we think will be successful long term through the application of the above strategic focus.
Our current strategic priorities are summarised in the diagram on page 14.
Review of Operations
Summary
US$ millions
Sales
Profit before interest and tax (EBIT)
Profit for the period attributable to Ansell Ltd shareholders
EPS (US cents)
Operating Cash Flow2
Dividend (US cents)
FY15
1,645
245
188
122.5
116.4
43.0¢
FY16
1,573
237
159
105.1
144.8
43.5¢
% Change
% CC Change1
-4.4%
-3.5%
-15.1%
-14.2%
+24.4%
+1.2%
-0.1%
+8.5%
-2.5%
-1.4%
1. CC denotes Constant Currency – constant currency financial reporting is supplemental information. It is provided using the best estimate of the prior year
results translated at the foreign currency exchange rates applicable to the current period and compared to the financial performance for the current year.
As such, it is unaudited non-IFRS financial information and uses only a convenience translation. The Board believes that this provides greater insight into the
financial performance of the business by the removal of year on year foreign exchange volatility. The principles of constant currency reporting and its
implementation are subject to oversight by the Audit and Compliance Committee of the Board.
2. Operating Cash flow, is Net cash provided by operating activities less payments for Net interest and for property, plant equipment and intangible assets plus
proceeds from sale of property, plant and equipment per the Consolidated Statement of Cash Flows on page 90.
Group Sales Commentary 3
• Sales revenue was 4 per cent lower on currency translation. Constant currency revenue was flat in an external environment that
remained challenging with limited demand growth and volatility in both foreign exchange and emerging markets.
• Organic growth improved through the year in Industrial (up 2 per cent in H2 FY16 – HyFlex® was up 9 per cent) and Single Use
segments, driven by improved distributor partnerships and success with NPD4 (Industrial NPD sales up 42 per cent, success of
INTERCEPT™ and Fortix® Technologies).
• A strong year for Sexual Wellness driven by emerging markets growth of 15 per cent, and SKYN® up 12 per cent and gaining market share.
• Disappointing results were seen in Medical arising from manufacturing challenges in our Melaka, Malaysia facility, with sales down
8 per cent, of which 2 per cent related to capacity constraints and 6 per cent from weak emerging markets and lower exam sales.
Medical is on track to restore operational capability and return to growth in FY17.
3. All percentages quoted, except where otherwise indicated, refer to constant currency variations versus the prior year comparative period.
4. NPD – New Product Development.
15
ANSELL LIMITED ANNUAL REPORT 2016Operating and Financial Review continued
Group Sales Bridge – Foreign Exchange and Medical results impacting the Group
Constant currency sales were level on FY15. Success with Single Use, Industrial and Sexual Wellness Growth Brands1, plus the benefit of
acquisitions, was offset by divestments, lower sales in Medical and continued weakness in Russia and Brazil.
1,645
1,575
70
30
17
1,588
29
15
6
5
18
1,573
FY15
FX
FY15
CC
Acq’d
Exited/
divested
FY15
pro-forma
Russia
& Brazil
SUI, SW
MED
SUI,
MED
FY16
Growth brands
ex Russia & Brazil
All other
ex Russia & Brazil
Group EBIT commentary
EBIT was 3 per cent down on prior year, but 8.5 per cent up on constant currency basis.
• Plant consolidation and ensuing operations performance challenges cost the Group $15 million, but were offset by a similar amount
in lower incentive compensation expense.
• FY16 EBIT results include $8.1 million pre-tax profit on sale of the Onguard footwear business ($2.2 million after tax).
• FY15 EBIT includes $17.8 million pre-tax profit on sale of our Shah Alam, Malaysia facility, offset by pre-tax $17 million restructuring charge.
• FY15 results included $22.6 million Foreign Exchange hedge gains, which were not replicated in FY16.
Borrowing Costs and Taxes
• Borrowing costs were in line with the prior year, including the full year funding impact of Microgard®.
• The tax rate for FY16 was higher than FY15 due to the absence of deferred tax asset recognition and tax losses in our Australian legal
entity being fully recognised for accounting purposes.
• In addition:
– the sale of the Onguard footwear business attracted a high tax rate relative to the EBIT profit adding 2 per cent to the Group rate
• The country profit mix of earnings increased the overall effective tax rate.
Cash Flow Commentary
Cash flow highlights included:
• Strong cash flow generation with Operating Cash Flow up 24 per cent.
• 6.7million shares were bought back during FY16.
FY16 continued the strong cash flow generation record of the Group. Despite higher tax payments, strong working capital management
led to a significant year over year improvement in Operating Cash Flow performance.
Cash outlays on investing activities were significantly below the prior year, primarily due to the sale of the Onguard business this year
whilst last year’s outlays included the acquisition of the Microgard body protection business. Capital expenditures were also lower
than expected with a reduced rate of spend on information technology and maintenance activities on completion of major programs,
with spend now oriented more to growth and high return productivity initiatives.
Financing outlays were higher due to the repayment of borrowings and also the funding of share buybacks during the year.
1. Growth brands composed of Industrial – HyFlex®, ActivArmr®, Alphatec®, SolVex®, Edge®; Single Use – Microflex®, TouchNTuff®; Medical – Gammex®, Encore®,
MediGrip®, Sandel®; Sexual Wellness – SKYN®, Jissbon®, Kamasutra®, Blowtex®.
16
ANSELL LIMITED ANNUAL REPORT 2016ANSELL LIMITED ANNUAL REPORT 2016
17
INDUSTRIAL
18
ANSELL LIMITED ANNUAL REPORT 2016Operating and Financial Review continued
Industrial – Global Business Unit
The Industrial GBU manufactures and
markets high-performance, hand and body
protection solutions for a wide-range of
Industrial applications. Ansell protects
workers in almost every industry including
Automotive, Chemical, Metal Fabrication,
Machinery and Equipment, Food,
Construction, Mining, and First Responders.
Sales Performance
Industrial achieved constant currency
sales growth of 3 per cent benefiting from
very strong growth of new products and
the Microgard acquisition. Other notable
items included:
• Growth rates improved through the
year as new products continued to
gain traction and market share gains
were achieved through strengthened
distributor partnerships.
• Exceptional new product sales growth
of 42 per cent YoY driven by HyFlex®
Intercept™ cut resistance styles.
Sales
EBIT 1
EBIT%/Sales
1. EBIT for FY15 excludes restructuring.
FY15
668.5
92.7
13.9%
• HyFlex® sales up 5 per cent on prior year.
• Emerging Markets up 5 per cent with
strong results in China and Mexico
with Russia returning to growth in
the second half and overall flat on
the year. Weak conditions continued
in Brazil and South East Asia.
• Our Body Protection products are up
15 per cent over FY15 (+23 per cent CC)
benefiting from the full year impact
of the Microgard acquisition.
EBIT Performance
EBIT margin was moderately lower at
13.6 per cent due to lower gross margins
which resulted from temporarily higher
waste levels in Mexico, subsequently
FY16
654.8
89.0
13.6%
% Change % Change – CC
+3.3%
+10.1%
–
-2.1%
-4.0%
–
New product sales
up 42%
Emerging markets
up 5%
resolved, as well as currency impacts
where sales price increases couldn’t
offset the full impact of higher input
costs. These effects were largely offset
by strong discretionary cost control,
and the benefit of higher margins
earned by growing new products.
At constant currency EBIT grew
10 per cent and margins improved.
-2.1% +3.3% -4.0% +10.1%
Sales reported
Sales (constant currency)
EBIT reported
EBIT (constant currency)
INTERCEPT™ Technology platform
The evolution of chemical protection
8 Products launched with
ground breaking technology
and more to come using
exclusive Ansell owned and
branded technology
New product
development
World’s First
ergonomically certified
chemical glove
AlphaTec® 58-128
$15m $50m
500%
13%
INTERCEPT™ global sales
(since launch)
Prospective sales
and growing
Growth in chemical
guardian assessments
Double digit growth in
chemical protection
Brands
19
ANSELL LIMITED ANNUAL REPORT 2016MEDICAL
20
ANSELL LIMITED ANNUAL REPORT 2016Operating and Financial Review continued
Medical – Global Business Unit
The Medical GBU manufactures and
markets surgical and examination gloves
together with a range of healthcare
safety devices such as disposable scalpels
and antimicrobial surgical theater
consumables. Its customer base
includes Acute Care Hospitals,
Emergency Services, Alternate Care,
Dentistry and Veterinary clinics.
Sales Performance
Medical sales were lower on the
following factors:
• Supply constraints limited growth of its
market leading synthetic surgical range.
• Emerging market sales fell on economic
weakness and currency volatility in
Russia and South East Asia.
• Pricing pressure in commodity exam
gloves, coupled with healthcare
expenditure cuts put pressure on sales
pricing and led to some volume losses.
Sales
EBIT 1
EBIT%/Sales
FY15
447.2
70.6
15.8%
FY16
396.3
52.3
13.2%
% Change % Change – CC
-11.4%
-25.9%
–
-8.3%
-17.5%
–
1. EBIT for FY15 excludes restructuring.
EBIT Performance
EBIT was lower on sales decline, higher
wastage and lower throughput from
temporary manufacturing issues that
increased costs by $9 million. Performance
improved in the second half as production
shipments increased 15 per cent on the
first half, construction of new capacity
was completed and the manufacturing
cost position improved.
Supply constraints
and higher manufacturing
costs drove EBIT lower
FY17 expected to benefit
from lower factory costs and
the launches of several new
synthetic surgical products.
-11.4% -8.3% -25.9% -17.5%
Sales reported
Sales (constant currency)
EBIT reported
EBIT (constant currency)
The Sensoprene® solution
Ansell introduces a revolution in comfort and allergy prevention
Exceptional comfort for hands and budget
The story of HYBRID, Ansell’s newest patent pending technology
• Reduces risk of latex and chemical accelerator allergies.
• Prevalence of latex sensitivity among healthcare workers
varies between 2.9–17 per cent.
25%
33%
Thinner than standard
surgical gloves
Glove-related reactions
are chemical allergies
Brands
Innovative Surgical Gloves
• The first ever PI-Neoprene surgical glove on the market.
• Protects from latex allergies, an anaphylactic allergic episode
can cost between $5,000–$15,000.
21
ANSELL LIMITED ANNUAL REPORT 2016SINGLE USE
22
ANSELL LIMITED ANNUAL REPORT 2016Operating and Financial Review continued
Single Use – Global Business Unit
The Single Use GBU has the market
leading range of high performance single
use gloves used in a broad variety of
industrial applications including Chemical,
Food Services, Life Sciences, Electronics,
and Automotive after Market. The GBU
was created subsequent to the acquisition
of BarrierSafe Solutions,Inc. (BSSI) in
January 2014.
Sales Performance
Sales were marginally down on last year
(in CC) with volume growth offset by price
reductions, as the benefit of lower raw
material prices was passed on to customers:
• Microflex® and TNT® up a combined
2 per cent in revenue with volume
up 5 per cent, and prices lower as
mentioned above.
Sales
EBIT1
EBIT%/Sales
FY15
312.4
59.7
19.1%
FY16
301.7
64.6
21.4%
% Change % Change – CC
-3.4%
+8.2%
–
-1.1%
+14.9%
–
1. EBIT for FY15 excludes restructuring.
• Successful global launch of key
Microflex® products is contributing
ahead of target and expected to drive
future growth.
• Strong results across almost all
emerging markets including from
new Edge® branded products.
• Continued innovation under Microflex®
brand, including the launch of a new
industry leading chemical resistant
glove to significant customer interest.
Microflex® and
TNT® volumes up 5%
EBIT Performance
EBIT margin improved on the benefit
from lower raw materials and diligence
in cost control plus continued delivery
of BSSI integration synergies.
-3.4% -1.1% +8.2% +14.9%
Sales reported
Sales (constant currency)
EBIT reported
EBIT (constant currency)
2.5x
$80m
16%
Automotive aftermarket
revenue growth in EMEA
Achieved in SU life
sciences global sales
Sales growth in emerging markets in
Russia, Brazil, Central and Eastern Europe,
Africa, Middle East and Mexico
Brands
23
ANSELL LIMITED ANNUAL REPORT 2016SEXUAL WELLNESS
24
ANSELL LIMITED ANNUAL REPORT 2016Operating and Financial Review continued
Sexual Wellness – Global Business Unit
The Sexual Wellness GBU (SW) manufactures,
sells and markets a range of branded
condoms, lubricants, devices and fragrances
globally. It sells through retail outlets and
also supplies condoms to public health
programs globally.
Sales Performance
A strong sales and EBIT performance for
SW on continued success with premium
branded condoms and strong emerging
market results:
• SKYN® sales were up 12 per cent on
continued success with the global
market leading non-rubber latex
condom and rapid growth on the
new SKYN® lubricant range.
• China up 28 per cent, India branded
business up 11 per cent.
Sales
EBIT 1
EBIT%/Sales
FY15
217.0
26.1
12.0%
FY16
220.0
31.0
14.1%
% Change % Change – CC
+1.4%
+18.8%
–
+8.2%
+41.0%
–
SKYN® up 12%
China up 28%
1. EBIT for FY15 excludes restructuring.
• Improved performance of our
natural rubber latex brands
contributed 10 per cent growth.
EBIT performance
EBIT margin improved significantly on
success in emerging markets and with
new products. Increased investments
in marketing activities where more
than offset by reduced overheads and
productivity gains in manufacturing
and distribution.
+1.4% +8.2% +18.8% +41.0%
Sales reported
Sales (constant currency)
EBIT reported
EBIT (constant currency)
28%
11%
Sales growth in China
e-commerce
Sales growth in India.
Strong portfolio with
growing condom, lube
and fragrance business
Brands
16%
Lubricants sales grew 16%
SKYN® lubes in 11 markets
25
ANSELL LIMITED ANNUAL REPORT 2016Operating and Financial Review continued
Material Business Risks
Ansell has established controls and procedures that are focused on safeguarding the Group’s assets and the integrity of its reporting.
The Group’s internal controls cover accounting, financial reporting, safety and sustainability, fraud, delegations of authority and other
control points. The risk management framework below summarises the Group’s approach to managing risk, including the identification
of risk appetite and monitoring of risks to that appetite.
Risk Management Framework
Risk Appetite
• Management
establishes risk
appetite (goals,
metrics)
• Board oversight
• Cascade through
the organisation
Organisational
Alignment
Resource and
Adherence
• Stakeholders
and managers
to identify risk
• Risk mitigation
process
• Risk appetite updated
after feedback
• Adherence to risk
appetite
• Supports risk culture
to ensure they are
within acceptable
tolerances
Communication
• Organisational
communication
of strategies and
objectives
• Clear communication
of how much risk
organisation will
accept
26
ANSELL LIMITED ANNUAL REPORT 2016Material Risks – Description and Mitigation Actions
Risk
Global markets instability
Systems and technology
Major incident at a significant
manufacturing site or warehouse
Organisational overstretch
Foreign exchange risk
Product quality
Loss of a key supplier
Nature of Risk
Mitigation Actions
The Group’s presence in over 30 countries
globally and its growing presence in
emerging markets exposes the Company to
geopolitical, regulatory and other factors
beyond the Group’s control.
As a modern business Ansell relies on
Information Technology (IT) platforms.
Interruption, compromise to or failure of
these platforms could affect Ansell's ability
to service its customers effectively.
The Group has a number of materially sized
manufacturing sites and warehouses. These
are vital to the business and financial losses
from natural disasters, civil or labour unrest,
terrorism, major fire or other incidence are
possible.
The Group has set demanding targets and
invested heavily in new acquisitions, new
products and our staff. These initiatives can
at times compete for internal resources,
which can lead to organisational overstretch
and the inability of the organisation to
effectively respond to all matters in a
timely manner.
Around half of the Group’s revenues and
costs are in currencies other than the US$.
With volatile foreign exchange markets,
significant changes can occur in foreign
exchange rates and result in a significant
impact on US$ earnings.
As a manufacturer, quality is paramount to
the Group and failures in this area can have
a significant negative effect on results and
customer relationships.
Raw materials purchased for manufacturing
purposes and buying finished goods exposes
the group to the risk of the failure of a
supplier to perform leaving the Company
short of a vital ingredient or product.
• Continually monitor the Group's exposure
to these risks through our local presence.
• Geographic diversification provides
protection in itself.
• Modern ERP systems are in place in the
largest regions of North America and
EMEA whilst also managing our supply
chain.
• These systems are progressively being
deployed through the rest of the Group.
• The Group has a fall back redundancy
and sought and received external
assistance on system protection and
security.
• The Group has business continuity and
disaster recovery plans for all major sites.
• Insurance coverage including business
interruption cover.
• Ongoing safety, fire preparedness and
local country economic reviews are
conducted.
• Planning programs have been introduced
to focus efforts on high priority projects.
• Global employee engagement and
cultural surveys have been carried
out to monitor staff concerns; and
• Staff are encouraged to alert senior
management to issues of this nature.
• The Group’s foreign exchange risks and
management strategies are detailed in
Note 15 to the financial statements.
• Investment in quality assurance and
governance practices, including
systematic quality assurance testing
during and after the manufacturing
and procurement process.
• Dedicated team of quality and regulatory
staff monitor this.
• Utilise dual sourcing strategy wherever
feasible.
• In recent years there has also been a
strategy of vertical integration which
reduces dependency on third parties.
27
ANSELL LIMITED ANNUAL REPORT 2016Operating and Financial Review continued
Outlook
The Group will continue to focus on:
• organic growth
• profitability and cash flow
• capital deployment
Organic Growth
Ansell’s organic growth focus in recent years has been on restoring clear differentiation in our product leadership through a significant
increase in R&D and product innovation efforts. We have continued to develop our Guardian® Technology and trained our sales teams
globally on its use and application and acquired businesses that we think will enhance our ability to grow long term.
Our overall organic growth achievement over the last three years, has shown significant success from this strategy, as is evident from
results of new products and our Growth Brands. Overall organic growth has been limited by a number of other factors. We have been
rationalising and exiting some lower margin or non core products, particularly within Industrial. We have been able to lower prices in
Single Use and Medical ensuring customers benefit from lower raw material costs. We have had capacity constraints in Medical while
volatility in emerging markets has affected some businesses.
In all cases we believe these adverse influences on growth will be of reduced impact going forward. For example, we have largely
completed the Industrial rationalisation program and new capacity coming online early in FY17 will alleviate the Medical growth
constraint.
With continued success with new products and our Growth Brands, and a reduced offset from other factors, we expected overall
improved organic growth in FY17, and in the medium term believe a low to mid single digit organic revenue growth rate is achievable.
Our business priorities for advancing our strategic goals in FY17 are oriented around the following main objectives:
• Build stronger and deeper partnerships with our key distributor partners.
• Expand recently acquired product ranges such as Microflex® and Microgard® globally.
• As capacity constraints are resolved in Medical, work to resume growth of our leading synthetic surgical range.
• Continue improvement in service and quality metrics to ensure Ansell is the leading company globally on these criteria as well
as in product performance.
Profitability and Cash Flow
Ansell has continually delivered strong cash flow throughout the last five years, and has improved EBIT margin from 12.2 per cent in
FY10 to 15.0 per cent in FY16.
The focus for FY17 is therefore:
• Fully resolve FY16 manufacturing issues and then realise in full significant productivity benefits from recent investment in automation
and in-sourcing production of key materials.
• With an enhanced focus on Return on Capital Employed, the Company will increase its focus on optimal use of working capital and
generating high returns from manufacturing investments.
Offsetting the above gains are expected higher underlying tax rates and the dilution of ongoing earnings by the sale of the Onguard business.
Capital Deployment
Ansell has invested significantly in acquisitions and capital expenditure over the last five years while maintaining an investment grade
balance sheet and delivering dividend increases in each year. In FY16 cash returns to shareholders were further supplemented by the
share buyback program. As we begin FY17 we have a more active acquisition pipeline that will be the short term focus while the Board
will also consider a continuation of the current share buyback as an alternative capital deployment option.
28
ANSELL LIMITED ANNUAL REPORT 2016ANSELL LIMITED ANNUAL REPORT 2016
29
Corporate Social Responsibility & Sustainability Report
CSR Commitment
Ansell is committed to
leading our industry in
responsible human rights,
societal, environmental
and governance practices.
“Ansell’s extraordinary efforts to donate products
distributed in 28 countries – both on an everyday
basis and in the wake of global emergencies
– has made an amazing impact on people’s lives.”
Thomas Tighe, President and Chief Executive Officer at Direct Relief
Chartered jets delivered Ansell medical examination gloves to help stop the spread of infection
in West African clinics and health centers during the worst outbreak of Ebola in history. In FY16,
following its mission to create an ‘Ansell protected world’ we donated products to 28 countries
around the world facing natural disasters and disease outbreaks.
30
ANSELL LIMITED ANNUAL REPORT 2016
Introduction
Sustainable business practices are critical to delivering shareholder value. Ansell recognises and values the connection between its
business strategy and corporate social responsibility. Understanding and addressing material risks is also a key part of ensuring the
sustainability and success of our organisation.
In FY16, we worked to mature our processes and practices around sustainable business and formalise key components of stakeholder
interest. Employees, customers, distributors and investors depend on Ansell as a global leader in protection solutions. Governmental
agencies, NGOs, socially responsible investors and other organisations monitor the Company’s activities and their impact. Ansell will
continue the momentum into FY17 and beyond, dedicated to strategic improvements in corporate social responsibility and sustainability.
In this report, we will focus on four key areas of sustainable business practices – Human Rights, Societal, Environmental and Governance.
CSR Initiatives: Knowing What Matters Most
Working in FY16 with Business for Social Responsibility (BSR), a global non-profit organisation that develops sustainable business
strategies, Ansell identified nine key focus areas for its evolving sustainability practice. These nine key focus areas represent the issues
that matter most to our business and our stakeholders and are illustrated in the top right quartile of the Materiality Assessment Map on
this page. These focus areas are considered to be the issues which are the most important to Ansell’s stakeholders and have the greatest
influence on business success. While Ansell is cognisant of and addresses all of the issues on the Materiality Assessment Map, these nine
key focus areas will receive the greatest attention in FY17.
Materiality Assessment Map
s
r
e
d
l
o
h
e
k
a
t
s
o
t
e
c
n
a
t
r
o
p
m
I
Water Use and
Management
Supplier
Diversity
Packaging
Transportation
Impacts
Volunteerism
Disaster
Preparedness/
Response
Labour
Practice
and Local
Hiring
Supply Chain
Transparency
Stakeholder
Engagement
Product Quality
and Recall
Climate and
Resource
Efficiency
Business ethics
and competitive
behaviour
Strategic
Philanthropy
Diversity and
Inclusion
Waste
Management
Talent
Development
and
Recruitment
Health and
Safety
Employee
Engagement
and Satisfaction
Influence on business success
Human Rights
Societal
Environmental
Governance
The findings identify both risks and
opportunities for Ansell. We are now
developing a process of governance
around these findings, prioritising the
key focus areas and creating appropriate
action and implementation planning to
address gaps and enhance strengths.
Ansell has also engaged with Sedex, the
Supplier Ethical Data Exchange, to create a
baseline self-assessment for Ansell against
international standards in Human Rights,
Labour, Safety and Environment. We have
piloted the self-assessment surveys at the
majority of our manufacturing facilities –
India, Malaysia, Brazil, Sri Lanka, Vietnam,
China, Thailand, Korea, Lithuania and
Portugal – and have also engaged with
Sedex to initiate self-assessments with
our top suppliers. This holistic view of our
strengths and opportunities will provide
a platform for continuous improvement.
“We’ve been pleased to partner with
Ansell to identify and prioritise the
most material CSR issues facing the
Company, and have been impressed
by the team’s commitment to driving
change and to leading their industry
sector in sustainability.”
Laura Gitman, Vice President, BSR
31
ANSELL LIMITED ANNUAL REPORT 2016
Human Rights
We treat all people fairly and are committed to ethical behaviour and the respect
of human rights as established in the United Nations Guiding Principles on Business
and Human Rights and administered through our own policies and guidelines.
Our People and Human Rights
Ansell aims to provide good human rights
and labour practices across the Company.
We demonstrate these practices by doing
what is necessary to ensure that the
Company is managed in line with our own
commitment and according to local and
country governance. In FY16, the Board
adopted the Human Rights Statement
(found at www.ansell.com) which informs
and guides Ansell’s approach to respecting
and promoting human rights within
Ansell’s spheres of operating influence.
Ansell operates with a fundamental
respect for the rights of the people we
employ, do business with and interact
with along our value chain. Ansell meets
or exceeds minimum labour standards
and remuneration for its manufacturing
organisation and offers a host of benefits
to ensure that its employees are
adequately rewarded for their contribution
at, or in most cases, above the prevailing
market-rate. Ansell seeks to be an
employer-of-choice wherever it operates.
The importance of managing human
resources and meeting labour standards
is recognised by the Risk Committee and
metrics to monitor our progress have been
adopted and are regularly reviewed by the
Risk Committee.
Recruitment, Talent
Development and Retention
Ansell is focused on motivating, engaging
and educating a committed and high-
performing workforce. In FY16, Ansell
launched an enhanced global on-boarding
program to ensure that new hires receive
an exemplary welcome to Ansell and feel
comfortable and supported from day one.
These first few critical months on the job
can make all the difference between
success and failure.
Employee Turnover Data FY16
Turnover: male staff
Turnover: female staff
Total Turnover
%
18.0
18.8
18.4
Ansell University
In FY16, Ansell employees completed just
under 14,000 online learning modules
available through Ansell University, our
internal training program. Training is also
available in Global Management and
Supervisor Development, Ansell-certified
Medical Education, and Six Sigma Lean
University.
Employee Health and Safety
As a leader in protection solutions, the safety our workers is of paramount importance. Ansell measures, benchmarks and reports its
safety statistics and these are regularly monitored by the Risk Committee. Tragically, in May 2016, Ansell experienced a fatality in its
manufacturing facility in Thailand. In addition to supporting the family of the deceased, Ansell has undertaken extensive root cause
analysis of the cause of the incident and will use the findings to strengthen existing policies and procedures throughout its manufacturing
facilities to ensure employee safety.
Lost Time Injuries (LTIs) and Medical Treatment Injuries (MTIs) per 100 employees
per annum
4
3.5
3
2.5
2
1.5
1
0.5
0
32
6
9
Y
F
7
9
Y
F
8
9
Y
F
9
9
Y
F
0
0
Y
F
1
0
Y
F
2
0
Y
F
3
0
Y
F
4
0
Y
F
5
0
Y
F
6
0
Y
F
7
0
Y
F
8
0
Y
F
9
0
Y
F
0
1
Y
F
1
1
Y
F
2
1
Y
F
3
1
Y
F
4
1
Y
F
5
1
Y
F
6
1
Y
F
LTI history (rolling 12 months at 30 June)
MTI history (rolling 12 months at 30 June)
Employee Engagement
The results of the FY15 I AM ANSELL
Employee Engagement and Culture survey
of our 16,000-member workforce show
that Ansell’s overall engagement score
is at 61 per cent, on par with Human
Resource consultancy Aon Hewitt’s global
benchmark, and higher than global
manufacturing companies. Building on
these good results, Ansell strives to be a
global employer of choice, known for
attracting, developing and retaining the
best talent at all levels. To achieve this,
Ansell is addressing the areas that our
employees said they valued the most, and
is working towards an engagement score
that places us among the best companies
in the world, regardless of industry.
ANSELL LIMITED ANNUAL REPORT 2016
Diversity and Inclusion
Ansell has a continuing commitment
to enrich the diversity profile of our
management, with a focus on gender
diversity. Our future actions will be
managed against the objective of
improving diversity at all levels and
especially in our senior leadership
ranks while maintaining a robust
pipeline of talent.
In FY15, the Women’s Leadership Forum
was founded at Ansell to:
• Build awareness of gender diversity
throughout Ansell;
• Create platforms for opportunities
to network and share information,
expertise and knowledge;
• Sponsor activities to promote
development; and
• Monitor and report progress
towards the stated mission.
In the past year, the Women’s Leadership
Forum has expanded its mentorship
program for female managers; held
numerous events at Ansell global
locations to provide opportunities for
open exchange and dialogue; shared
insightful commentary from its CEO
and female Board members to mark
International Women’s Day; and increased
its knowledge-sharing database, available
to all employees.
In addition to the best practice programs
Ansell is running in the areas of
recruitment and retention, the Company
has launched a ‘diverse slate’ approach,
which means that we aspire to present
hiring managers with at least one female
qualified candidate. This approach
encourages recruiters to look longer,
harder and smarter for more gender
diversity in the talent pool and ensures
that hiring managers are exposed to
more candidates of both genders during
the interview process.
In FY16, the Board confirmed its strategies
designed to increase gender diversity
and agreed on gender diversity objectives.
These objectives included that, by
2020, Ansell would aim to have women
constituting over 30 per cent of its executive
management and over 40 per cent of its
senior management. Additionally, the Board
has a commitment to increase from two
female Non-Executive Directors (at present)
to three or more female Non-Executive
Directors through its normal succession
planning cycle to come as close as practical
to 50 per cent female Non-Executive
Director representation.
“By rising to the challenge of closing gender gaps at various levels, Ansell is taking
active steps to remove barriers (often subtle) and create more equitable talent
acquisition and development processes.”
Susan Colantuono, CEO and Founder of Leading Women
29%
19%
32%
29 per cent of our
Non-Executive Directors
are women
19 per cent of our executive
leadership (Director Level
and above) are women
32 per cent of our management
(Manager level through
Associate Director) are women
HERhealth Launching in FY17
In FY17, Ansell will launch an exciting
new program aimed at increasing health
awareness and access to health services
through a sustainable workplace program
for female workers at its manufacturing
plants in Xiamen, China; Bangalore, India;
and Dong Nai Province, Vietnam.
HERhealth bridges an existing gap by
bringing critical health information and
services to women in the workplace.
HERhealth workplace programs strive to
improve awareness and behavior related
to general and reproductive health, to
challenge harmful taboos, to promote
preventive care, and to increase access
to critical health products and services.
In each Ansell manufacturing plant,
women will be selected as peer health
educators and will be provided with a
series of trainings that take place at
work, during working hours. In addition
to spreading information efficiently,
the peer-to-peer model also creates
significant empowerment benefits for
the women selected as peer educators.
HERhealth was launched by our partner
BSR in 2007 and has impacted over
250,000 women. It is recognised as a
leading innovation for women’s health
by the UN ‘Every Woman, Every Child’
Initiative.
33
ANSELL LIMITED ANNUAL REPORT 2016Societal
We attract and retain top talent while building a culture of diversity and inclusion
as an employer of choice. We create opportunities for growth and employment
around the world and help people in need following disaster and disease.
Ansell employees assisting with flood relief activities in Chennai.
Passion, Involvement, Teamwork…
These are at the core of Ansell’s business
and are values all Ansell employees share.
Ansell is passionate about embracing
different cultures, languages and beliefs,
and appreciates the benefits that diverse
backgrounds and viewpoints bring to
our business. Another viewpoint that
all Ansell people share is the belief in
creating a safer, healthier and more
protected world by contributing to
community.
Employees Initiatives
As global citizens, Ansell employees
are committed to providing protection
solutions that keep the world safe. In
the hometowns where Ansell employees
live, work and raise their families, these
same employees are also making a
difference – one town at a time.
• In ‘Cake for a Cause’, employees at
Ansell Portugal show their sweet side.
Each year the team stages a tasty bake
sale, and matched with a contribution
from management, brings hands-on
assistance to improve conditions at
local charitable organisations, which
have included a home for children
and vocational training for people
living with disabilities.
• When Chennai city in South India
was paralysed by the worst flooding
in a century, employees from Ansell
Bangalore organised an effort to
distribute basic necessities and financial
support to individuals in this hard-hit
community.
These are examples of the many
initiatives undertaken by our employees
and supported by the Company.
34
ANSELL LIMITED ANNUAL REPORT 2016Corporate Philanthropy and Community Engagement
Ansell provides partnership, resources and financial support to non-profit organisations improving the lives of people around the world
and seeks to engage with its local community and those who use its products.
Ansell prides itself on its role as the premier manufacturer of sterile surgical gloves, examination
gloves and healthcare safety solutions. A critical part of this leadership role includes educating
healthcare professionals on a variety of topics including barrier protection, hand hygiene and
managing latex allergies and providing clinical summaries of healthcare topics through the Ansell
Cares™ program. To deepen its engagement with healthcare professionals, in 2013, Ansell
introduced the H.E.R.O.® Nurse Award in the United States. The award recognises the incredible
humane role of nurses by allowing the colleagues, family and friends of nurses to nominate
outstanding service by nurses in the nursing profession.
In FY15, Ansell expanded the H.E.R.O. Nurse Award to include Europe, Australia and New Zealand
and launched a social media campaign on Twitter®, Facebook® and through microsites. Worldwide
winners' ceremonies were recently held and charitable organisations were notified of the
contributions made in the winners' names. Through the H.E.R.O. program, Ansell has donated more
than $35,000 to local charities on the winners’ behalf and recognised 350 nurses as heroes.
Ansell is working with Operation Smile, an international medical charity that provides free
surgeries for children and young adults born with cleft lip, cleft palate and other facial deformities
to raise both funds and awareness, as well as donating products and educating surgeons about
the importance of donning latex-free gloves when treating children.
In North America, Ansell provided Operation Smile with gloves and marking pens used on 70 missions
in FY16. In EMEA, Ansell employees volunteered on Operation Smile missions in Russia in both
FY15 and FY16, in addition to providing financial support and product donations valued at more
than $20,000.
In FY16, the Ansell Sexual Wellness team again led the way to support the Movember Foundation,
the global men’s health movement. Ansell supported the Movember Foundation by creating a
special edition Movember SKYN® condom pack and donating $1 for each pack sold, raising over
$30,000 in Australia and $50,000 in the US. Ansell employees also took up the Movember cause
and donated personally throughout Australia, Europe and the United States.
Setting the bar high, Ansell CEO Magnus Nicolin pledged a donation to UNICEF based on global
employee response to the I AM ANSELL Employee Engagement and Culture Survey. In response
to the outstanding 93 per cent employee response rate, Ansell donated $50,000 to UNICEF at its
Employee Culture Town Hall in May 2015. Ansell’s gift allowed UNICEF to use it where it was
needed most, helping UNICEF to do whatever it takes to save and protect the world’s most
vulnerable children.
Nepal, 2015. On May 25, Jamuna Nepali, 9, (centre, red) and other children attend a UNICEF-supported Child Friendly Space in the
camp for earthquake-displaced people where they are staying on a wind-swept ridge above the town of Charikot, Dolakha District.
Product Donations
In the right hands, a pair of gloves
can do extraordinary things.
donations to care for survivors, many
of whom face serious physical and
psychological challenges.
In FY16, Ansell donated 118,000 pairs of
surgical gloves, 457,000 examination gloves
and 126,000 condoms to Direct Relief.
Even before the Ebola outbreak began
in 2014, West African health care systems
were underfunded and thinly staffed.
When Ebola erupted, the system was
completely overwhelmed. Ansell provided
generous glove donations from the
beginning. In January 2016 the World
Health Organization declared the Ebola
outbreak over, but its consequences are
lasting. Ansell continues to provide
On February 20, 2016, Tropical Cyclone
Winston, the most powerful storm ever
recorded in the Southern Hemisphere,
swept across Fiji with wind gusts reaching
230km/h (145mph). At least 44 people
died and 40,000 homes were damaged
or destroyed. Forty percent of Fiji’s
population were impacted by the storm.
Within days, Ansell medical examination
gloves were on the ground in Fiji, part of
an initial shipment of 15,000 pounds of
humanitarian medical aid distributed
to local healthcare facilities.
Ansell has also joined in the global fight
against HIV/AIDS, equipping front-line
health providers in several countries,
including the US and Mexico with the
supplies they need to provide HIV testing,
treatment and support for people living
with or at-risk of infection.
In all these humanitarian efforts, Ansell
is proud to partner with Direct Relief,
a non-profit aid organisation working
to improve the lives of people living in
poverty or the aftermath of disaster.
Charity Navigator, America’s leading
charity watchdog organisation, ranks
Direct Relief Number One on its 2016
list of ‘Ten of the Best Charities Everyone’s
Heard Of’.
35
ANSELL LIMITED ANNUAL REPORT 2016Environmental
We make responsible use of natural resources and view as paramount our
commitments to the safety of our workers as well as to the residents of the
communities in which we operate.
Ansell is a world-class manufacturer of personal protective equipment, ranging from protective suits to supported industrial gloves,
sterile surgical gloves and condoms. In FY16, Ansell operated 21 manufacturing sites throughout Asia, the Americas and Europe and
had an extensive third-party supply chain. Ansell has a responsibility to ensure that its manufacturing processes and supply-chain are
best in class, demonstrating excellent environmental stewardship and adequately managing the risks of its operations. The Board and
the Risk Committee of Ansell actively monitor the key risks of the Company’s operations throughout the world, some of which are
outlined below.
Disaster Preparedness and Prevention
Ensuring that Ansell can continually supply its customers with high-quality product within the expected timeframe of the customer
is critical. As part of its Crisis Management and Recovery plan, Ansell actively monitors and manages the following risks:
Risk
Loss of a key supplier
Mitigation Measures
• Dual-sourcing of key inputs
• Supply chain management
• Strategic partnerships with key suppliers
Management of proprietary sourcing
• Move key inputs to in-house manufacturing
• Backwards integration of supply chain through acquisitions and strategic partnerships
Loss of key site or key warehouse
Safety
• Install and maintain fire protection in place
• Ongoing audit by EHS (Safety, Health and Environment) group
• Ensuring that safety standards are world class
• Monitor safety statistics to ensure downwards trend
• Rapidly integrate newly acquired sites to Ansell standards
Resource Efficiency
This section reviews Ansell’s use of resources in FY16 and Ansell’s measures to sustainability operate its business.
Ansell Global CO2 Emissions
)
T
M
0
0
0
’
(
s
n
o
i
s
s
i
m
m
E
2
O
C
300
250
200
150
100
50
0
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
s
n
o
i
l
l
i
m
$
S
U
s
e
l
a
S
4
0
Y
F
5
0
Y
F
6
0
Y
F
7
0
Y
F
8
0
Y
F
9
0
Y
F
0
1
Y
F
1
1
Y
F
2
1
Y
F
3
1
Y
F
4
1
Y
F
5
1
Y
F
6
1
Y
F
CO2 emissions
Sales US$ millions
• In FY10 and FY14, improvements were driven by the first biomass boiler in Lanka and second biomass boiler in Bangkok, converting fuel oil and natural gas operation
to biomass.
• FY13 and FY15 increases were due to acquisitions and an increase in latex consumption respectively.
• In late FY14, a third biomass boiler was commissioned in Lanka, further reducing emissions.
• In FY15 and FY16 acquisition of Ansell Textiles Lanka contributed to slight increase, offset by Shah Alam plant closure.
• In FY16, maximum utilisation of the third biomass boiler and the ability to run Ansell Lanka normal operations with zero fuel oil helped to further reduce CO2 emissions.
36
ANSELL LIMITED ANNUAL REPORT 2016
Energy Consumption (mmBTU)
Water Consumption (m3)
4,000
)
0
0
0
’
(
n
o
i
t
p
m
u
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o
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y
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r
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3,000
2,000
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1,600
1,400
1,200
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800
600
400
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o
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7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
s
n
o
i
l
l
i
m
$
S
U
s
e
l
a
S
FY13
FY14
FY15
FY16
Energy Consumption
Sales US$ millions
FY12
FY13
FY14
FY15
FY16
Water Consumption
Sales US$ millions
Energy consumption increases in line with additional latex consumption
and acquisitions of manufacturing facilities. Energy use is offset by energy
reduction initiatives such as biomass boilers or other efficiencies.
Water consumption increases in line with additional latex consumption and
acquisitions of manufacturing facilities. Water consumption is offset by process
improvements and production of products with a lower latex requirements
(predominately Industrial GBU products).
ISO 14001 Certification and Waste Management
Ansell manufacturing sites follow ISO 14001 guidelines in developing and implementing waste management systems and all facilities
meet local regulations and requirements. All but one of Ansell’s manufacturing sites are certified to ISO 14001 and the last site is pending
certification. For a manufacturing site to hold ISO 14001 certification, the site must have an acceptable environmental management system
in place to manage the site’s environmental responsibilities.
Energy Down and Water Down Projects
In FY16, Ansell undertook a number of targeted projects to improve resource efficiency:
Category
Electrical Energy
Thermal Energy
Water
Examples
• Replace fluorescent lights with LEDs
• Replacement of inefficient chillers
• Power management scheme for computers
• Insulation improvements on ovens
• Re-use of waste heat
• Solar panel hot water systems
• Water reuse
• Reduce water flowrate
Estimated Savings
4,456,000kWh per annum
• 795,000kWh per annum
• 4,280 tonnes of woodchips (for biomass boilers)
9,000m3 per annum
Energy Down Case Studies
As part of its commitment to minimise its environmental impact, Ansell has invested in biomass boilers to power some of its manufacturing
sites. For the biomass boiler in our Bangkok manufacturing site to operate at optimal efficiency, the woodchip moisture level should be
around 20 to 25 per cent. However, the average moisture level of the woodchips delivered was 35 per cent, consuming additional energy to
evaporate the excess moisture during combustion. Ansell’s engineering team studied existing industrial systems to remove excess moisture
in the woodchip before feeding in to the boiler. Having gained experience, the team designed and tested a prototype dryer. The design
phase of this project demonstrated that the target moisture reduction of 20 to 25 per cent could be achieved. The final woodchip dryer is
powered with hot air from boiler exhaust, recycling heat from existing energy use. It is estimated that by drying the woodchips to optimal
temperature using recycled heat, the Bangkok biomass boiler will save approximately 3,000 tonnes of woodchips per annum.
The EMEA IT team evaluated the costs and power consumption associated with computer usage by testing the effects of adjusting
the standard power management scheme on the 800 computers within the region. An optimisation setting was applied that put each
computer into a low power consumption state in order to reduce rising energy costs. On average, after adding the optimisation setting,
energy consumption by each computer decreased by 2KWh. It was soon confirmed that adding the optimisation setting will save
108,000KWh per year when applied to Ansell’s 4,500 computers globally in FY17.
37
ANSELL LIMITED ANNUAL REPORT 2016
Governance
We believe that sustainable environmental, social and governance (ESG) practices
start at the top with a culture of accountability. We deliver value to stakeholders
and earn the status of responsible business partner while also being committed
to managing and measuring the sustainability risks and opportunities related to
Ansell’s business strategy.
Good corporate governance is crucial
to delivering shareholder value.
The Board has implemented systems
to identify and manage risks and has
appropriate oversight and governance
of risk. The Board and the Executive
Leadership Team also lead by example to
ensure that the highest standard of ethical
behaviour is adopted throughout Ansell.
A report on the Company’s Corporate
Governance practices for the year
ending 30 June 2016 and a checklist
on compliance with the ASX Corporate
Governance Principles and
Recommendations (3rd ed.) (Principles)
can be found at www.ansell.com. The
Board believes that the Company’s
corporate governance policies and
practices have complied in all
respects with the Principles.
Some of the key governance elements
are outlined below.
Board and Committee
Framework
The Board relies upon the Skills Matrix
and the Board Charter to ensure that each
Director has the necessary international
experience and business acumen to
oversee Ansell’s diverse global businesses.
The Board has established the Audit
and Compliance Committee, the Risk
Committee, the Human Resources
Committee, and the Governance
Committee to consider and provide
advice to the Board on specific matters
within the remit of that Committee. The
Board and each Committee undertake
an annual evaluation. Each Non-Executive
Director also completes an annual
performance review. Full details of
the governance structure are found
in the Company’s report on Corporate
Governance at www.ansell.com.
Ethics and Compliance
Ansell’s Core Values, Leadership
Competencies and the global Code of
Conduct constitute the platform for
all activities, serving as a guide to ethical
principles and business conduct at Ansell.
Ansell expects its employees will act with
the utmost integrity when dealing with all
stakeholders. The global Code of Conduct
forms a core part of the induction of new
employees and all employees are trained
on the global Code of Conduct annually.
Employee performance is measured
against the Ansell Core Values.
In FY16, we updated the Code of
Conduct, emphasising the key importance
of the basic values and ethics that are
expected from all Ansell employees.
Training took place globally to ensure
that all Ansell employees are familiar
with the updated Code of Conduct
and the operations of its third-party
compliance hot line as a secure and
confidential way to be empowered
and ‘speak up’ about any suspected
unethical behavior, policy violations
or concerns.
Education
The Company continued its practice of
visiting the Company’s facilities in each
year. During FY16, Board meetings were
held in conjunction with visits to the
Company’s global hubs in New Jersey,
Melbourne and Brussels. The Board also
visited manufacturing and sales operations
in Chicago, Vietnam and Cyberjaya and
Melaka in Malaysia.
Stakeholder Engagement
Ansell regularly engages with its
stakeholders through a variety of media
such as the ASX electronic lodgement
platform; periodic updates to shareholders;
discussions with large investor groups and
proxy analysts; and its Annual General
Meeting. Ansell’s relevant documentation
concerning corporate governance; its
ASX releases; and its media releases are
placed on its website at www.ansell.com
and periodically updated. Other examples
of stakeholder engagement include our
ongoing dialogue with organisations such
as Finnwatch, the Swedish County Council
and the British Medical Association.
Diversity
Ansell recognises that effectively
harnessing a talented and diverse global
workforce is a key competitive advantage
for our business and our success is a
reflection of not only the quality and
skills of our people, but our ability to
channel their backgrounds, experiences,
regional points of view and cultural and
ethnic differences. Further details are
provided in the ‘Diversity and Inclusion’
section of this Report.
Ansell held its Annual General Meeting in October 2015 in Melbourne, Victoria and enjoyed good attendance by its shareholders.
38
ANSELL LIMITED ANNUAL REPORT 2016Following its mission to create an Ansell protected world, in
FY16 the Company donated more than 118,000 pairs of surgical
gloves, 457,000 examination gloves and 126,000 condoms to
Direct Relief to help people in need following natural disasters
and disease outbreaks in these countries.
• Lebanon
• Sierra Leone
• Armenia
• Belize
• Cambodia
• Cameroon
• Dominican
Republic
• Ecuador
• Fiji
• Ghana
• Guatemala
• Guyana
• Haiti
• Liberia
• Malawi
• Mexico
• Honduras
• Nicaragua
• India
• Iraq
• Jamaica
• Peru
• Philippines
• Romania
• Solomon
Islands
• South Sudan
• Ukraine
• United States
ANSELL LIMITED ANNUAL REPORT 2016
3939
ANSELL LIMITED ANNUAL REPORT 2016Board of Directors
Glenn L L Barnes
Chairman
B Ag Sc (Melb), CPM, FAMI,
FAICD, SF Fin, FRSA
Magnus R Nicolin
Managing Director and
Chief Executive Officer
BA, MBA (Wharton)
Marissa T Peterson
Non-Executive Director
BSc (MECH), MBA (Harvard),
Hon Doctorate (MGMT)
Ronald J S Bell
Non-Executive Director
BA (Strathclyde)
Appointed Non-Executive
Director in August 2006.
Appointed Non-Executive
Director in August 2005.
Chair of the Risk Committee
and member of the Audit and
Compliance Committee.
Chair of the Human
Resources Committee
and member of the
Governance Committee.
Mr Bell is an experienced
international consumer
industry executive with a
background of over 30 years
in highly competitive global
branded products. He is a
former President of Kraft
Foods, Europe and served as
Executive Vice President of
Kraft Foods Inc. and brings
to the Board broad general
management and marketing
skills particularly in the
European and North
American markets.
The Board considers Ronald
Bell to be an independent
Director.
Current Directorships:
Chair of Oclaro Inc. and
Director of Humana Inc.
Mrs Peterson currently
runs Mission Peak Executive
Consulting, an executive
coaching and consulting
firm specialising in helping
develop, grow and scale
leaders in the high-
technology space. Mrs
Peterson retired from
full-time executive roles in
2006, having spent 18 years
with Sun Microsystems in
senior executive positions.
She has extensive experience
in supply chain management,
manufacturing and quality,
logistics, information
technologies, customer
advocacy and leadership
development.
The Board considers
Marissa Peterson to be
an independent Director.
Appointed Non-Executive
Director in September 2005
and Chairman in October
2012.
Chair of the Governance
Committee and member
of the Human Resources
Committee.
Current Directorships:
Non-Executive Director at
Sydney Children’s Hospital
Foundation, Stronghold Pty
Ltd, Barnes Investments Pty
Ltd (Retired as Chairman of
Australian Unity Limited at
end March 2016).
Mr Barnes has over twenty
years of governance
experience in banking and
financial services, business
information, consumer goods
and the not-for-profit sector.
He was involved in the
packaged goods, banking
and financial services sectors
for over thirty years, as an
executive, business leader
and Director in Australia,
New Zealand, the United
Kingdom, United States of
America, Republic of Ireland,
Japan and China.
The Board considers Glenn
Barnes to be an independent
Director.
Managing Director and
Chief Executive Officer
since March 2010.
Current Directorships:
Non-Executive Director
at FAM AB.
Prior to joining Ansell,
Mr Nicolin, a Swedish citizen,
spent three years with
Newell Rubbermaid Inc.,
most recently as President,
Europe, Middle East, Africa
and Asia Pacific. Prior to that
he spent seven years with
Esselte Business Systems Inc.,
where in 2002 he led the
leveraged buy-out of Esselte
from the Stockholm and
London Stock Exchanges.
Following the buy-out he
became the Chief Executive
Officer of Esselte.
Mr Nicolin has also held
senior management
positions with Bayer AG,
Pitney Bowes and McKinsey
& Company.
Mr Nicolin holds an MBA
from the Wharton School of
the University of
Pennsylvania and a BA from
the Stockholm School of
Economics.
As an Executive Director,
Magnus Nicolin is not
independent.
40
ANSELL LIMITED ANNUAL REPORT 2016Leslie Desjardins
Non-Executive Director
BIA, Finance (Kettering),
MS(MIT)
L Dale Crandall
Non-Executive Director
CPA, MBA (UC Berkeley)
W Peter Day
Non-Executive Director
LLB (Hons), MBA (Monash),
FCPA, FCA, FAICD
John A Bevan
Non-Executive Director
BCom (UNSW)
Appointed Non-Executive
Director in November 2015.
Appointed Non-Executive
Director in November 2002.
Appointed Non-Executive
Director in August 2007.
Appointed Non-Executive
Director in August 2012.
Member of the Audit and
Compliance Committee
and the Risk Committee.
Mrs Desjardins is an
experienced international
finance executive with
a focus on business
performance and growth.
Mrs Desjardins was formerly
a Director of AptarGroup
and Chief Financial
Officer for Amcor Limited.
Mrs Desjardins held various
executive roles at General
Motors Corporation,
including Chief Financial
Officer, General Motors
Holden, and Controller
for General Motors North
America. She has extensive
experience in finance,
strategy, government
relations and global
operations. Mrs Desjardins
currently serves on the
Terry Fox Cancer Foundation
Audit Committee.
The Board considers
Leslie Desjardins to be
an independent Director.
Member of the Audit and
Compliance Committee and
the Risk Committee. Special
Advisor for mergers and
acquisitions.
Current Directorships:
Director of Bridgepoint
Education Inc., and
Endurance International
Group, Inc.
Mr Crandall has a
background in accounting
and finance and is a former
Group Managing Partner
for Southern California for
Price Waterhouse. He was
formerly President and Chief
Operating Officer of Kaiser
Foundation Health Plan
and Hospitals in the United
States and lead trustee
of The Dodge and Cox
Mutual Funds.
The Board considers
Dale Crandall to be an
independent Director.
Chair of the Audit and
Compliance Committee
and member of the Risk
Committee.
Current Directorships:
Alumina Limited, Australian
Unity Investment Real Estate
Limited, Boart Longyear
Limited and SAI Global
Limited.
Mr Day was formerly a
Chairman and Director
of Orbital Corporation,
Chairman of Centro Retail
Trust and a Director of
Federation Centres. He was
Chief Financial Officer of
Amcor Limited for seven
years, and Chief Financial
Officer and Executive
Director Finance of Bonlac
Foods Limited. He also has
held senior office and
executive positions in the
Australian Securities
Commission (Deputy Chair),
Rio Tinto, CRA and Comalco.
He is also involved in
disability services and
education initiatives. He has
a background in finance and
general management across
diverse and international
industries.
The Board considers Peter
Day to be an independent
Director.
Member of the Human
Resources Committee,
the Governance Committee
and the Audit and
Compliance Committee.
Current Directorships:
Chairman of BlueScope
Steel Limited and Director
of Nuplex Industries Limited.
Mr Bevan was formerly
the Chief Executive Officer
and Executive Director of
Alumina Limited and brings
to the Board extensive
international business
experience. Prior to joining
Alumina Limited in June
2008, he had a long career
with the BOC Group Plc
where he was a member
of the Board of Directors
and held a variety of senior
management positions in
Australia, Korea, Thailand,
Singapore and the United
Kingdom.
The Board considers John
Bevan to be an independent
Director.
41
ANSELL LIMITED ANNUAL REPORT 2016
Executive Leadership Team
Steve
Genzer
President
and General
Manager
Industrial Global
Business Unit
Joe
Kubicek
President and
General Manager
Single Use
Global Business
Unit
BSc, MBA
BA, MBA
William
Reilly
Senior Vice
President
Corporate
General Counsel
Anthony
Lopez
President and
General Manager
Medical Global
Business Unit
Debbie
Lynch
Chief Human
Resources Officer
BS, MS, PhD
BA, JD
BS, MS
Magnus
Nicolin
Managing
Director and
Chief Executive
Officer
BA, MBA
Chrystelle
Fontan
Senior Vice
President Quality
BS, MS
42
ANSELL LIMITED ANNUAL REPORT 2016Francois
Le Jeune
Senior Vice
President
Business
Development
and Chief
Commercial
Officer Body
Protection SBI
BS, MS, MBA
Peter
Dobbelsteijn
Chief
Commercial
Officer EMEA and
APAC Region
and Ansell
Global Guardian
BMkt
Darryl
Nazareth
Senior Vice
President
Research and
Development
BS, MS
Neil
Salmon
Chief Financial
Officer (Finance
and IT)
Jeyan
Heper
President Sexual
Wellness Global
Business Unit
BA, ACMA
BA, (Hons)
Mark
Nicholls
Senior Vice
President
and Chief
Commercial
Officer-Americas
BA, LLB (Hons)
Melb.
Giri
Peddinti
Senior Vice
President and
Global Chief
Information
Officer
BE, MBA
43
ANSELL LIMITED ANNUAL REPORT 2016Report by the Directors
This Report by the Directors of Ansell Limited (‘the Company’) is made for the year ended 30 June 2016. The information set out below
is to be read in conjunction with the:
• Remuneration Report appearing on pages 52 to 81.
• Notes 20 and 21 to the financial statements, accompanying this Report.
Directors and Secretary
The names and details of each person who has been a Director of the Company during or since the end of the financial year are:
• Glenn L L Barnes (Chairman)
• Magnus R Nicolin (Managing Director and Chief Executive Officer)
• Ronald J S Bell
• John A Bevan
• L Dale Crandall
• W Peter Day
• Leslie Desjardins (appointed 30 November 2015)
• Marissa T Peterson
• Annie H Lo (resigned 30 November 2015)
Particulars of the qualifications, experience and special responsibilities of each Director, as at the date of this Report, and of their other
directorships, are set out on pages 49 and 51.
Details of meetings of the Company’s Directors (including meetings of Committees of Directors) and each Director’s attendance are also
set out on page 45.
The Company Secretary is Alistair Grant, BA/LLB, LL. M, AGIA and he was appointed to that position in October 2013. Mr Grant joined the
Company in 2009, and has a legal background. He has held senior positions in the Corporate Head Office, including the position of Asia
Pacific Regional Legal Counsel.
Principal Activities
The activities of Ansell Limited and its subsidiaries (‘the Group’) principally involve the development, manufacturing and sourcing,
distribution and sale of gloves and protective personal equipment in the industrial and medical gloves market, as well as the sexual
wellness category worldwide. Ansell operates in four main business segments: Medical, Industrial, Single Use and Sexual Wellness.
Operating and Financial Review
The Operating and Financial Review for the Group for the financial year is set out on pages 12 to 28, and forms part of this Report.
State of Affairs
During the year the Group continued to progress the strategies that have been identified to accelerate growth and create increased
shareholder value. The Operating and Financial Review provides additional information on the Group’s growth strategies. Other than set
out in the Operating and Financial Review, no significant changes occurred in the state of affairs of the Group during the financial year.
Likely Developments
Likely developments in the operations of the Group are referred to on page 28 of this Report. In the opinion of the Directors, the
disclosure of any further information about likely developments in the operations of the Group has not been included in the Report
because disclosure of this information would likely result in unreasonable prejudice to the Group.
Significant Events Since Balance Date
The Directors are not aware of any significant matters or circumstances that have arisen since the end of the financial year that has
affected or may affect the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent
financial years.
44
ANSELL LIMITED ANNUAL REPORT 2016Dividends and Share Issue
The final dividend of US 23 cents per share (unfranked) in respect of the year ended 30 June 2015 was paid to shareholders on
10 September 2015. An interim dividend of US 20 cents per share (unfranked) in respect of the half-year ended 31 December
2015 was paid to shareholders on 10 March 2016. A final dividend of US 23.5 cents per share (unfranked) in respect of the year ended
30 June 2016 is payable on 8 September 2016 to shareholders registered on 22 August 2016. The financial effect of this dividend
has not been brought to account in the financial statements for the year ended 30 June 2016 and will be recognised in subsequent
financial reports.
On 13 August 2015, the Company issued (a) 15,213 shares to Mr Salmon, CFO of Ansell Limited, which were earned from performance
rights that were issued as partial compensation for value being left behind under prior employment agreements and had retention
provisions applied to them; (b) 104,357 shares to Mr Nicolin, CEO of Ansell Limited, due to a vesting under a plan approved at the 2010
AGM; and (c) 315,203 shares pursuant to the vesting of the FY13 Long Term Incentive Plan. On 10 September 2015, the Company issued
183,492 shares under its Dividend Reinvestment Plan. On 8 January 2016, the Company issued 26,981 shares to Mr Joe Kubicek, President
and General Manager Single Use Global Business Unit and 26,981 shares to Mr Mike Mattos, Chief Commercial Officer North America
and LAC regions (resigned on 31 January 2016), on the vesting of performance rights issued pursuant to a retention agreement following
the 2014 acquisition of BarrierSafe Solutions International Inc. On 10 March 2016, the Company issued 199,830 shares under its Dividend
Reinvestment Plan.
Details of unissued shares under option at the date of this Report and shares issued during or since the end of the financial year
as a result of the exercise of options are set out in Note 13 to the financial statements, which accompany this Report.
Interests in the Shares of the Company
The relevant interests of each Director in the share capital of the Company, as at the date of this Report, as notified to the
ASX Limited pursuant to the Listing Rules and Section 205G of the Corporations Act 2001, were:
G L L Barnes
R J S Bell
J A Bevan
L D Crandall
W P Day
L Desjardins
M T Peterson
M R Nicolin
A H Lo
61,748^
15,429
17,402^
20,680
27,307^
1,961
20,133
229,030^
3,529
^ Beneficially held in own name or in the name of a trust, nominee company or private company.
Directors’ Meetings
The following table sets out the number of Directors’ meetings (including meetings of Board Committees) held during the financial year
and the number of meetings attended by each Director.
Board
Audit and Compliance
Committee
Risk
Committee
Human Resources
Committee
Governance
Committee
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Attended
G L L Barnes
R J S Bell
J A Bevan
L D Crandall
W P Day
L Desjardins1
M T Peterson
M R Nicolin
A H Lo2
6
6
6
6
6
4
6
6
2
6
6
6
6
6
4
6
6
2
5
5
5
4
5
1
5
5
5
4
5
1
4
4
2
4
2
4
4
2
4
2
8
8
8
8
8
8
2
2
2
2
2
2
Held – Indicates the number of meetings held while each Director was a member of the Board or Committee.
Attended – Indicates the number of meetings attended during the period that each Director was a member of the Board or Committee.
1. Mrs Desjardins was appointed as a Director on 30 November 2015.
2. Mrs Lo resigned as a Director on 30 November 2015.
45
ANSELL LIMITED ANNUAL REPORT 2016Report by the Directors continued
A meeting of a special Board Committee comprising G L L Barnes and M R Nicolin was convened on 11 August 2015 in relation to
the review and lodgement of the 2015 Financial Report and the 2015 Full Year Results announcement. A meeting of a special Board
Committee comprising G L L Barnes and M R Nicolin was convened on 8 February 2016 in relation to the review and lodgement of the
Half-Year Results announcement, reports and financial statements for the six months ended 31 December 2015. Both special Board
Committees are excluded from the number of meetings noted above. Audit and Compliance Committee meetings were generally
attended by all other Directors.
Corporate Governance
The Board of Ansell Limited believes that a strong corporate governance framework helps to underpin a strong company. Ansell’s
corporate governance policies and practices are set out in the Corporate Governance Statement. We have provided a summary of
the Corporate Governance Statement in the Annual Report, and the full Statement, which sets out the extent to which Ansell’s policies
and practices comply with the requirements of the ASX Corporate Governance Council’s Corporate Governance Principles and
Recommendations, can be found at www.ansell.com.
Performance in Relation to Environmental Regulations
Group entities are subject to environmental regulation in the jurisdictions in which they operate. The Group has risk management
programs in place to address the requirements of the various regulations. From time to time, Group entities receive notices from
relevant authorities pursuant to local environmental legislation. On receiving such notices, the Group evaluates potential remediation
or other options, associated costs relating to the matters raised and, where appropriate, makes provision for such costs. The Directors
are not aware of any material breaches of Australian or international environmental regulations during the year.
The Board monitors compliance with the Group’s environmental policies and practices, and believes that any outstanding
environmental issues are well understood and are being actively managed. At the date of this Report, any costs associated with
remediation or changes to comply with regulations in the jurisdictions in which Group entities operate are not considered material.
Indemnity
Upon their appointment to the Board, each Director enters into a Deed of Access, Indemnity and Insurance with the Group. These Deeds
provide for indemnification of the Directors to the maximum extent permitted under law. They do not indemnify for any liability
involving a lack of good faith.
No Director or officer of the Group has received the benefit of an indemnity from the Group during or since the end of the year.
Rule 61 of the Group’s Constitution also provides an indemnity in favour of officers (including the Directors and Company Secretary) of
the Group against liabilities incurred while acting as such officers to the extent permitted by law. In accordance with the powers set out
in the Constitution, the Group maintains a Directors’ and Officers’ insurance policy. Due to confidentiality obligations and undertakings
of the policy, no further details in respect of the premium or the policy can be disclosed.
46
ANSELL LIMITED ANNUAL REPORT 2016Auditor Independence
The Directors received the Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 as follows:
Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001
To: the Directors of Ansell Limited
I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2016 there have been:
(i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Gordon Sangster
Partner
Melbourne
15 August 2016
KPMG, an Australian partnership and a member
firm of the KPMG network of independent member
firms affiliated with KPMG International, a Swiss
Cooperative.
Liability limited by a scheme approved under
Professional Standards Legislation.
47
ANSELL LIMITED ANNUAL REPORT 2016Report by the Directors continued
Non-audit Services
During the year, the Group’s auditor, KPMG, was paid the following amounts in relation to non-audit services provided by KPMG:
Taxation and other services
Other assurance and advisory services
$28,101
$4,646
The Directors are satisfied that the provision of such non-audit services is compatible with the general standards of independence for
auditors imposed by, and do not compromise the auditor independence requirements of, the Corporations Act 2001 in view of both the
amount and the nature of the services provided and that all non-audit services were subject to the corporate governance procedures
adopted by the Group and have been reviewed by the Audit and Compliance Committee to ensure they do not impact the integrity
and objectivity of the Auditor.
Rounding
The Group is a company of the kind referred to in Australian Securities and Investments Commission Instrument 2016/191 dated
31 March 2016 and, in accordance with that Instrument, unless otherwise shown, amounts in this Report and the accompanying
financial statements have been rounded off to the nearest one hundred thousand dollars.
This Report is made in accordance with a resolution of the Board of Directors made pursuant to Section 298(2) of the Corporations Act
2001 and is signed for and on behalf of the Directors.
G L L Barnes
Director
M R Nicolin
Director
Dated in Melbourne this 15th day of August 2016
48
ANSELL LIMITED ANNUAL REPORT 2016
Directors
Glenn L L Barnes Chairman – B Ag Sc (Melb), CPM, FAMI, FAICD, SF Fin, FRSA
Appointed Non-Executive Director in September 2005 and Chairman in October 2012.
Chair of the Governance Committee and member of the Human Resources Committee.
Current Directorships: Non-Executive Director at Sydney Children’s Hospital Foundation, Stronghold Pty Ltd, Barnes Investments Pty Ltd
(retired as Chairman of Australian Unity Limited at end March 2016).
Mr Barnes has over twenty years of governance experience in banking and financial services, business information, consumer goods
and the not-for-profit sector. He was involved in the packaged goods, banking and financial services sectors for over thirty years, as an
executive, business leader and Director in Australia, New Zealand, the United Kingdom, United States of America, Republic of Ireland,
Japan and China.
The Board considers Glenn Barnes to be an independent Director.
Magnus R Nicolin Managing Director and Chief Executive Officer – BA, MBA (Wharton)
Managing Director and Chief Executive Officer since March 2010.
Current Directorships: Non-Executive Director at FAM AB.
Prior to joining Ansell, Mr Nicolin, a Swedish citizen, spent three years with Newell Rubbermaid Inc., most recently as President, Europe,
Middle East, Africa and Asia Pacific. Prior to that he spent seven years with Esselte Business Systems Inc., where in 2002 he led the
leveraged buy-out of Esselte from the Stockholm and London Stock Exchanges. Following the buy-out he became the Chief Executive
Officer of Esselte.
Mr Nicolin has also held senior management positions with Bayer AG, Pitney Bowes and McKinsey & Company.
Mr Nicolin holds an MBA from the Wharton School of the University of Pennsylvania and a BA from the Stockholm School of Economics.
As an Executive Director, Magnus Nicolin is not independent.
49
ANSELL LIMITED ANNUAL REPORT 2016Report by the Directors continued
Marissa T Peterson Non-Executive Director – BSc (MECH), MBA (Harvard), Hon Doctorate (MGMT)
Appointed Non-Executive Director in August 2006.
Chair of the Risk Committee and member of the Audit and Compliance Committee.
Current Directorships: Chair of Oclaro Inc. and Director of Humana Inc.
Mrs Peterson currently runs Mission Peak Executive Consulting, an executive coaching and consulting firm specialising in helping
develop, grow and scale leaders in the high-technology space. Mrs Peterson retired from full-time executive roles in 2006, having spent
18 years with Sun Microsystems in senior executive positions. She has extensive experience in supply chain management, manufacturing
and quality, logistics, information technologies, customer advocacy and leadership development.
The Board considers Marissa Peterson to be an independent Director.
Ronald J S Bell Non-Executive Director – BA (Strathclyde)
Appointed Non-Executive Director in August 2005.
Chairman of the Human Resources Committee and member of the Governance Committee.
Mr Bell is an experienced international consumer industry executive with a background of over 30 years in highly competitive global
branded products. He is a former President of Kraft Foods, Europe and served as Executive Vice President of Kraft Foods Inc., and brings
to the Board broad general management and marketing skills particularly in the European and North American markets.
The Board considers Ronald Bell to be an independent Director.
L Dale Crandall Non-Executive Director – CPA, MBA (UC Berkeley)
Appointed Non-Executive Director in November 2002.
Member of the Audit and Compliance Committee and the Risk Committee. Special advisor for mergers and acquisitions.
Current Directorships: Director of Bridgepoint Education Inc., and Endurance International Group, Inc.
Mr Crandall has a background in accounting and finance and is a former Group Managing Partner for Southern California for Price
Waterhouse. He was formerly President and Chief Operating Officer of Kaiser Foundation Health Plan and Hospitals in the United States
and lead trustee of The Dodge and Cox Mutual Funds.
The Board considers Dale Crandall to be an independent Director.
W Peter Day Non-Executive Director – LLB, MBA (Monash), FCPA, FCA, GAICD
Appointed Non-Executive Director in August 2007.
Chairman of the Audit and Compliance Committee and member of the Risk Committee.
Current Directorships: Alumina Limited, Australian Unity Investment Real Estate Limited, Boart Longyear Limited and SAI Global Limited.
Mr Day was formerly a Chairman and Director of Orbital Corporation, Chairman of Centro Retail Trust and a Director of Federation
Centres. He was Chief Financial Officer of Amcor Limited for seven years, and Chief Financial Officer and Executive Director of Bonlac
Foods Limited. He also has held senior office and executive positions in the Australian Securities Commission (Deputy Chair), Rio Tinto,
CRA and Comalco. He is also involved in disability services and education initiatives. He has a background in finance and general
management across diverse and international industries.
The Board considers Peter Day to be an independent Director.
50
ANSELL LIMITED ANNUAL REPORT 2016John A Bevan Non-Executive Director – BCom (UNSW)
Appointed Non-Executive Director in August 2012.
Member of the Human Resources Committee, the Governance Committee and the Audit and Compliance Committee.
Current Directorships: Chairman of BlueScope Steel Limited and Director of Nuplex Industries Limited.
Mr Bevan was formerly the Chief Executive Officer and Executive Director of Alumina Limited and brings to the Board extensive
international business experience. Prior to joining Alumina Limited in June 2008, he had a long career with the BOC Group Plc where he
was a member of the Board of Directors and held a variety of senior management positions in Australia, Korea, Thailand, Singapore and
the United Kingdom.
The Board considers John Bevan to be an independent Director.
Leslie Desjardins Non-Executive Director – BIA, Finance (Kettering), MS (MIT)
Appointed Non-Executive Director in November 2015.
Member of the Audit and Compliance Committee and the Risk Committee.
Mrs Desjardins is an experienced international finance executive with a focus on business performance and growth. Mrs Desjardins was
formerly a Director of AptarGroup and Chief Financial Officer for Amcor Limited. Mrs Desjardins held various executive roles at General
Motors Corporation, including Chief Financial Officer, General Motors Holden, and Controller for General Motors North America. She has
extensive experience in finance, strategy, government relations and global operations. Mrs Desjardins currently serves on the Terry Fox
Cancer Foundation Audit Committee.
The Board considers Leslie Desjardins to be an independent Director.
Annie H Lo Non-Executive Director – BSc (Bus Adm), MBA (Eastern Michigan)
Appointed Non-Executive Director on 1 January 2013. Member of the Audit & Compliance Committee and Risk Committee. Resigned
as a Non-Executive Director and member of the Audit & Compliance Committee and Risk Committee on 30 November 2015.
Mrs Lo was formerly the Chief Financial Officer of Johnson & Johnson’s Worldwide Consumer and Personal Care Group. She retired
from this role in late 2011, having spent over 20 years in executive roles with Johnson & Johnson.
Mrs Lo has significant experience in directing business expansion across the Asia Pacific region and globally as well as in managing
healthcare business challenges and regulatory processes
The Board considers Annie Lo to be an independent Director.
51
ANSELL LIMITED ANNUAL REPORT 2016Remuneration Report
Chairman’s Letter
Dear Shareholders,
On behalf of the Board of Directors, we are pleased to present Ansell’s Remuneration Report for the financial year ended 30 June 2016.
It has been a challenging year for Ansell with demand subdued across many of our major markets. After six successive years of growth,
our results in FY16 were lower than in FY15. Nevertheless, there have been significant achievements during the year positioning Ansell
well for the future.
This year has also been a transitional one in respect to our remuneration arrangements. At the time of our Notice of Meeting to last year’s
AGM, we announced a review of our remuneration structures. We also announced we had implemented a one-off Special Incentive Plan
(SIP) for FY16 as an interim measure to maintain alignment between the interests of shareholders and management, encourage retention
of participants through time vesting requirements and encourage high performance through achievement of performance hurdles set at
challenging levels (on a constant currency basis). This was done following the cancellation of the FY14 LTI grant, vesting of which had
been rendered unachievable by material currency value shifts, which are outside of management control. It was an interim measure while
we conducted our review of remuneration structures. Further details of the SIP are provided in section 7.4 of this Remuneration Report.
At the subsequent 2015 Annual General Meeting (AGM), notwithstanding a strong majority (65 per cent) of the votes cast last year
approving our Remuneration Report, a sizable minority voted against the Report, constituting a first strike. In addition, an offer of
options to our CEO and Managing Director, Magnus Nicolin, as part of his remuneration package, was not approved.
What have we done since the 2015 Annual General Meeting?
The Board has taken the AGM vote seriously. In response, we have reviewed our remuneration structures and made adjustments to
better support our business strategy and to respond to concerns raised by our stakeholders following the ‘first strike’ received in relation
to our 2015 Remuneration Report.
Specifically we have:
• engaged broadly with a range of stakeholders to understand the reasons for the strong message being sent;
• redesigned our Remuneration Report to assist with clarity and readability, so that our shareholders can more easily see the linkages
between our strategic drivers, Company performance against those drivers and remuneration outcomes. We recognised that we did
not clearly communicate a number of remuneration-related matters in FY15; and
• approved a number of changes to our remuneration structures for FY17 after taking into account many factors, including:
– the comments of our shareholders,
– the need to better align our incentives with our strategic objectives,
– expectations of continued volatility in foreign currency relativities,
– the need for a ‘global’ remuneration framework,
– the slowdown in economic growth globally and
– the need to continue to attract, retain and reward our executive team.
These changes are summarised in section 1.2 of the Remuneration Report. With these changes in place, we do not feel it is necessary to
repeat the FY16 Special Incentive for FY17.
FY16 financial performance and remuneration outcomes
Our financial results in FY16 were affected by the challenging economic environment globally, the impact of swings in global currencies
affecting our US dollar reported results, a world economy that continues to grow at a slow and uneven rate and a significant increase in
our global average tax rate. We communicated a revised performance range to the market earlier this year and are pleased to report
that while lower than for FY15, our FY16 financial outcomes were within guidance. Furthermore:
• at constant currency, sales were level with FY15;
• at constant currency, EBIT was up 8.5 per cent on FY15;
• our Operating Cash Flow was again strong, increasing by $28 million to $145 million in FY16; and
• our balance sheet remains investment grade with net debt to EBITDA at 1.5 times,
all of which are solid results given the economic conditions.
52
ANSELL LIMITED ANNUAL REPORT 2016Other performance highlights include that our recent acquisitions in the Industrial and Single Use businesses are delivering targeted
returns and creating organic growth opportunities. We also experienced strong sales growth in new products in the Industrial business.
The Sexual Wellness and the Single Use businesses both performed well and we made significant progress addressing the manufacturing
issues that affected Medical results in FY16.
In relation to our Short Term Incentive (STI) Plan for FY16, we set performance targets with the challenging global economic
environment in mind. After normalising for the anticipated currency and tax headwinds, the FY16 targets required significant underlying
growth in key metrics. These targets were not achieved for Sales and Profit Attributable (PA). However, the constant currency growth
in Earnings Before Interest and Tax (EBIT) of 8.5 per cent was above threshold and came close to the target and the strong cash flow
improvement exceeded the target level. This level of financial performance has resulted in outcomes under our STI plan for senior
executives that were in most cases moderately lower than those for FY15.
As the FY14 Long Term Incentive Plan (LTIP) was cancelled, no awards under the LTIP vested this year.
The SIP is a one-off incentive program implemented for FY16. It was put in place following cancellation of the FY14 LTI plan for reasons
given above. The SIP was put in place at half the opportunity level of remuneration outcomes originally available under the cancelled
FY14 LTIP and was linked to two of the performance conditions set under the STI Plan, the revenue performance condition, which was
not met and the EBIT performance condition, which was met around target. Accordingly, the SIP outcomes were significantly below the
maximum opportunity available.
As there was no LTI available for vesting in FY16 and the STI and SIP outcomes were well below target levels, the total actual
remuneration outcomes for Executives in FY16 are materially below those for FY15.
We have again provided a voluntary realised pay table in Section 5, in addition to the statutory remuneration tables in Section 10.
Both tables show a significant year over year reduction for our Executives, particularly for those Executives who were participants in
the cancelled FY14 LTIP. Specifically for our CEO, the realised table shows his FY16 realised compensation was 47 per cent lower than
the amount realised in FY15. The performance linked component of his compensation (earned under the STI and SIP) was 26 per cent
of the maximum available in FY16.
Although our FY16 financial results were creditable given the prevailing market conditions, we recognise that they were generally
lower than FY15 and the Board considers our remuneration outcomes to appropriately reflect the Group’s performance and the
outcome experienced by our shareholders.
Ansell is a truly international company
Our shareholders understand that Ansell is a unique Company when compared to many of its ASX peers. While Australian listed,
all of the Executive Key Management Personal (KMP) are located outside of Australia, as are nearly all of our employees and our
operations. This means our financial performance is affected by economic conditions around the world (not just those prevailing in
Australia) and our remuneration structures and practices need to be accepted and competitive in the markets where our people are
based, including the US and Europe for our Executives. As these structures and practices are not those traditionally adopted by our
Australian based ASX peers, we understand it is our responsibility to explain our structures to our shareholders.
We think our 2016 Remuneration Report transparently communicates remuneration outcomes for FY16, a transitional year as we
have redesigned our remuneration system to better suit our business needs, and clearly explains the remuneration structures that
we have put in place for FY17 and beyond. We hope you agree and welcome any feedback you may care to provide.
On behalf of the Directors, we look forward to welcoming you to the 2016 AGM.
Ronnie Bell
Chairman of the HR Committee
53
ANSELL LIMITED ANNUAL REPORT 2016Remuneration Report continued
Section 1 – Introduction
1.1 Key Management Personnel (KMP)
The Directors of Ansell Limited (Ansell) present the Remuneration Report (Report) prepared in accordance with Section 300A of the
Corporations Act for the Group for the financial year ended 30 June 2016. This Report, which has been audited by KPMG, forms part
of the Report of the Directors.
The Report outlines the remuneration arrangements in place for the KMP of Ansell, which comprises all Directors (executive and
non-executive) and those executives who have authority and responsibility for planning, directing and controlling the activities
of the Group. In this Report, ‘Executives’ refers to members of the Group Executive team identified as KMP.
The following table details Ansell’s KMP during FY16:
Name
Role
Non-Executive Directors
Glenn L L Barnes
Ronald J S Bell
John Bevan
L Dale Crandall
W Peter Day
Leslie Desjardins
Annie H Lo
Marissa T Peterson
Executive Director
Magnus R Nicolin
Other Executives
Neil Salmon
Scott Corriveau
Chairman, Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director (appointed on 30 November 2015)
Independent Non-Executive Director (retired on 30 November 2015)
Independent Non-Executive Director
Managing Director (MD) and Chief Executive Officer (CEO)
Chief Financial Officer (Finance and IT)
President and General Manager Industrial GBU (ceased as a KMP on 30 September 2015)
Peter Dobbelsteijn
Chief Commercial Officer EMEA and APAC Region and Ansell Global Guardian
Steve Genzer
Jeyan Heper
Joe Kubicek
Anthony Lopez
Mark Nicholls
Mike Mattos
President and General Manager – Industrial GBU (prior to 30 September 2015, was Senior Vice
President Global Supply Chain Operations)
President and General Manager Sexual Wellness GBU
President and General Manager Single Use GBU
President and General Manager Medical GBU
Chief Commercial Officer Americas (commenced on 1 January 2016)
Chief Commercial Officer North America and LAC Region (ceased as a KMP on 1 January 2016)
54
ANSELL LIMITED ANNUAL REPORT 20161.2 Response to first strike and changes for FY17
Since incurring a ‘first strike’, Ansell has engaged extensively with stakeholders to understand their concerns.
Set out below is a summary of the Board’s responses to the key issues raised by some shareholders and proxy advisers to the 2015
Remuneration Report and changes to our remuneration arrangements following review of our remuneration structures:
Issue
Base salary
STI deferral
STI – performance
conditions and setting
of targets
STI – non-financial
measures
Changes for FY17
Response to misunderstandings surrounding base salary
There was some misunderstanding regarding the CEO’s fixed remuneration and incentive opportunity
levels last year. These misunderstandings arose from:
• translation of our then US based CEO’s remuneration to A$ by proxy advisers despite it being paid and
reported in US$. This translation, coupled with a near 30 per cent depreciation in the Australian dollar,
made it appear like the CEO had received a large pay increase, when this was not the case, but was in
fact a foreign exchange effect; and
• the difference between ‘base salary’ (which determines incentive opportunities for our Executives) and
‘fixed remuneration’ (which includes base salary and other benefits such as retirement benefits, but is not
used to determine opportunity levels).
We will aim to better communicate these matters going forward, but would urge all advisors to note
that our reporting currency is US$ and to be cognisant that we use base salary and not fixed annual
remuneration in determining our incentive opportunities.
Introduction of incentive deferral
There was concern that our STI plan incentives are paid entirely in cash following the determination
of results each year, which may encourage management to pursue short term objectives at the expense
of longer term value.
While we believe our short term and long term remuneration arrangements complement and
counterbalance each other, from FY17 onwards, a part of our STI awards will be deferred in the form of
restricted shares (determined with reference to the extent that performance is at or above the midpoint
between threshold and stretch to a maximum of 50 per cent of the overall STI opportunity). Restricted
shares will be awarded in place of cash to place a part of the reward at continued risk against future share
price movements. The restriction will see the shares held for a period of two years from when the shares
are granted. This change recognises the sizeable short term rewards that may be earned for exceptional
performance and a desire to ensure those short term targets are exceeded in a manner that is sustainable
over the longer term.
Selection of performance measures
The selection of financial metrics used in the STI plan will generally include a revenue measure, a profit
measure plus also in some cases, a measure of asset efficiency or Cash flow depending on priorities set for
the coming year. Incentives will be calculated on a constant currency basis based on total Ansell
performance for Executives, and for all others on a combination of total Ansell and individual business unit
or regional performance.
Beginning in FY17, incentive payments will incorporate a lower threshold and lower starting incentive
amount as compared to the current plan. Incentive outcomes will be calculated in a straight line from zero
to maximum, similar to the new LTI plan (discussed below).
Use of non-financial metrics
In recognition of the importance of measures other than financial targets to our longer term prosperity as
a company, we are continuing our practice of having non-financial performance measures as a portion of
the STI scorecard for our Executives. Non-financial measures will comprise a maximum of 20 per cent of
the total scorecard in any given year.
In FY17 these non-financial measures will make up 10 per cent of the scorecard for our Executives and
include metrics on safety and customer satisfaction. These measures are intended to augment our strong
financial measures and will be clearly defined and measurable in order to deliver results that are
consistent with the Group’s strategic priorities and relevant to the particular role of the Executives.
55
ANSELL LIMITED ANNUAL REPORT 2016Remuneration Report continued
Issue
Changes for FY17
STI – vesting schedule
Updated vesting schedule
The vesting schedule will be on a straight line basis from zero to maximum which represents a change
from the current plan where separate threshold, target and maximum levels are set.
Payout amounts (as a percentage of base salary) under the FY17 STI plan (as compared to FY16)
will be as follows:
CEO
CFO
Other Executives
Threshold
STI (Previous)
0% (50%)
0% (30%)
0% (25%)
Maximum
STI (Previous)
225% (200%)
150% (125%)
100% (105%)
LTI – equity not cash
Payment of awards entirely in equity for all Executives
Our LTI awards in prior years have generally comprised cash and Performance Share Rights (PSR), other
than for the CEO who receives only PSRs. This reflected the international dispersal of LTI plan participants
and global practice with respect to incentive awards.
LTI – performance
conditions
From FY17, all of our LTI plan awards will be granted entirely in the form of PSRs (i.e. with no cash element)
to further strengthen the alignment with our shareholders.
Introduction of two additional performance measures
As Ansell has continued to invest capital in acquiring businesses that we believe complement or augment
our existing business, some stakeholders have expressed concern at our single LTI plan performance
condition relating to growth in earnings per share (EPS).
The Board has therefore decided to introduce two additional performance measures for FY17 and beyond
– Group return on capital employed (ROCE) and long term growth in revenue (Organic Growth). Using
these measures in combination with EPS growth should improve the alignment between incentive
outcomes and long term value creation. A gateway still applies to the EPS performance condition.
The Board considered the introduction of a relative total shareholder return measure (TSR), which was
favoured by some of our shareholders. Given Ansell’s specific characteristics (in terms of being Australian
listed but a global company, not having many global listed competitors and being of a different size to
many of them), we were unable to identify an appropriate comparator group (globally or regionally). While
we considered having multiple TSR comparator groups across the US, Europe and Asia Pacific, this did not
meet our key criteria of simplicity and transparency and so the Board determined that relative TSR would
not be an appropriate performance measure for the LTI plan.
56
ANSELL LIMITED ANNUAL REPORT 2016Issue
LTI – gateway
Changes for FY17
Change to a ROCE gateway
We have had a minimum return gateway on the EPS performance condition before the EPS measure
is able to vest.
Traditionally our return gateway for the LTI has been based on return on equity (ROE).
As our investments are funded by both equity and debt, we considered that from FY17 it would be more
appropriate to use a return on capital employed (ROCE) gateway, which measures our returns against
both equity and debt in the business, rather than the ROE gateway used previously which only takes into
account equity capital.
Therefore, achieving at least the minimum ROCE threshold set for the new ROCE performance condition
will be required as the gateway to achieve any incentive against the EPS measure. That is, if the ROCE
measure does not vest, the ROCE gateway will not be met and the EPS measure cannot vest either.
ROCE is, therefore, being used as:
• a performance measure in its own right applicable to one third of the LTI grant; and
• a gateway to the EPS performance condition.
LTI – setting of targets
Approach to setting targets
Target performance ranges setting the minimum to maximum incentive range for EPS, Organic Growth
and ROCE may vary from year to year and will be set after taking account of expected economic conditions
and strategic priorities of the business.
LTI – vesting schedule
The low end of the target performance range will be lower compared to the current plan as payout
will begin in a straight line from zero, versus today’s minimum payout for the CEO at 25 per cent of
maximum opportunity (being 100 per cent of base salary). Achieving the upper end of incentive targets
where excellent performance is now required against three measures over three years is more challenging
than a plan focused only on one measure.
Updated vesting schedule
The vesting schedule will be a straight line from zero to maximum, a change from the current plan where
separate threshold, target and maximum levels are set. Payout amounts (as a percentage of base salary)
under the LTI plan going forward (as compared to last year) will be as follows:
CEO
CFO
Other Executives
Threshold
LTI (Previous)
0% (100%)
0% (62.5%)
0% (50%)
Maximum LTI
(Previous)
360% (400%)
300% (250%)
200% (200%)
In addition to the EPS performance condition, an additional two performance conditions have been
introduced as discussed above. In order for Executives to earn the total maximum opportunity available,
maximum performance must be achieved for all 3 performance conditions. For example, for the CEO,
120 per cent of base salary is achievable for maximum performance under each of the performance
conditions. Therefore, in order to achieve the maximum 360 per cent of his base salary, the maximum
performance must be achieved for each of those 3 performance conditions.
57
ANSELL LIMITED ANNUAL REPORT 2016
Remuneration Report continued
Issue
Changes for FY17
Constant Currency
measurement
Use of Constant Currency reporting
As Ansell’s operations (whether sales or manufacturing) occur in many countries in many currencies,
and our financial reporting translates all of these results to a single currency (US dollars) for reporting
purposes, the fluctuations in exchange rates can cause significant distortion to reported performance.
Mandatory shareholding
requirements
Board discretion
Accordingly, the performance measures under our current STI and LTI plans and going forward will be
tested on a Constant Currency basis (which will remove foreign exchange fluctuations for the period which
may either favour or penalise management). In the interest of transparency, Ansell will include details of
its performance in Constant Currency terms in addition to its statutory reporting requirements.
New mandatory shareholding requirements for Executives
Ansell has, for some years, been committed to encouraging strong alignment between our Executives and
shareholders through a mandatory shareholding requirement. After reviewing international practice,
noting that our requirements were significantly higher than many of our peers and considering the shift to
a much larger emphasis on equity in our short and long term incentives, we have determined to reset the
level of mandatory shareholding requirements from FY17 (which is not inclusive of any unvested equity
rights held pursuant to the incentive plans) to:
• CEO – 3 x base salary (previously 4 x base salary)
• Executives – 1 x base salary (previously 2 x base salary)
These adjusted mandatory shareholding requirements remain market leading. Restricted shares granted
under the FY17 STI and FY16 SIP will be included in assessing whether an Executive meets the mandatory
shareholding targets.
Exercise of discretion by the Board
Our remuneration policy aims to link management incentive outcomes to performance against strategic
objectives that drive long term shareholder value creation.
In certain circumstances, events or accounting rules (such as the recognition of deferred tax assets) can
create favourable or unfavourable effects on earnings for a single year that may cause a misalignment
between incentive outcomes and shareholder value creation. In these circumstances the Board retains its
discretion to incorporate adjustments to the calculation of incentive outcomes.
The Board has developed a detailed policy that will guide it in applying this discretion and that will
be applied consistently. The policy covers individually material items including restructuring charges,
acquisitions and divestments and equity capital issuance and repurchase.
The Board will continue its practice of clearly explaining in its annual remuneration report the basis and
calculation of any adjustments made that have influenced incentive outcomes.
58
ANSELL LIMITED ANNUAL REPORT 2016Section 2 – Remuneration philosophy and strategy
Our remuneration philosophy links the achievement of our strategic objectives and corporate plans with appropriate and measured
rewards for our Executives.
Our governing principles are summarised below:
Ensure competitiveness
in Base Salary and Total
Salary Package
Offer competitive levels of remuneration in the relevant
employment marketplace in which the employee is based to
attract and retain the best talent available. These remuneration
arrangements are truly global, not those traditionally adopted
by most of our predominantly Australian operating ASX peers.
Support a
performance
culture
Support high performance culture by setting
appropriately challenging performance objectives that drive
the generation of shareholder value and link rewards to the
achievement of those objectives and provide the largest
part of the remuneration package ‘at risk’.
Balance short and long
term performance
Balance the desire to reward superior performance against
short term goals that are delivered in a manner that supports
generation of superior shareholder returns over the longer term.
Ansell’s
Executive KMP
remuneration
Link rewards to
business results
Apply a pay-for-performance philosophy that directly links
Executive reward to the achievement of Ansell and business unit
operating results and performance against strategic goals both
annually and over the longer term.
Significant equity
component to align
with shareholders
Provide a large portion of total remuneration
in the form of Ansell equity.
The remuneration design and quantum for our Executives is determined by fit for purpose contemporary criteria as well as reviewing
what is generally paid for similar roles in similar businesses in the relevant geographic locations – the locations where the Executives
reside and work. While Ansell is publicly listed on the ASX, it reports in US dollars, more than 95 per cent of its revenue is derived outside
of Australia and it is active in a diverse range of geographies. Additionally, many Executives are located in our four global corporate
offices. As such, the mix of remuneration for individual Executives is reflective of prevailing best practice and market conditions in the
region in which the Executive is based.
Our Remuneration Policy and Strategy document is available on our website at the following link http://www.ansell.com/en/About/
Investor-Center/Corporate-Governance-and-Corporate-Governance-Statement.aspx.
Section 3 – FY16 Remuneration framework components
Our executive remuneration framework for FY16 consisted of the following components:
• Fixed Annual Remuneration (FAR);
• a Short Term Incentive (STI) plan; and
• a Long Term Incentive (LTI) plan.
In FY16, Executives were also invited to participate in a one-off Special Incentive Plan (SIP). We have provided further detail on the
operation of the SIP in section 7.4.
59
ANSELL LIMITED ANNUAL REPORT 2016
Remuneration Report continued
Remuneration framework
The diagram below outlines the link between the components of remuneration for Executives, the relevant performance conditions
and the strategic objectives of Ansell that these components were designed to achieve for FY16. Further information on each of these
components can be found in section 7.
Component
Performance measure
Fixed Annual Remuneration
(FAR)
Base salary plus contributions
to retirement plans and other
benefits
CEO FY16 Target FAR
was 42 per cent of total
remuneration
CFO/Other Executives Target
FAR was 60 per cent of total
remuneration
STI
Cash
Deferral into equity to
be introduced in FY17
CEO FY16 Target STI
was 29 per cent of total
remuneration
CFO/Other Executives FY16
Target STI was 20 per cent
of total remuneration
LTI
Cash and rights to receive
fully paid ordinary shares
Rights only for 2017 LTI
grant onwards
CEO FY16 Target LTI
was 29 per cent of total
remuneration
CFO/Other Executives FY16
Target LTI was 20 per cent
of total remuneration
Considerations in determining
FAR include the
responsibilities, performance,
qualifications, experience,
location and market rate for a
comparable role in similarly
sized companies, in similar
industries, operating in similar
jurisdictions.
Based on annual growth in
sales revenue, EBIT and free
cash flow. For the CEO and
CFO, Profit Attributable is also
an additional performance
measure.
From FY17, non-financial
performance measures will
make up a portion of the STI
scorecard. Financial measures
will not be less than 80 per
cent of the scorecard
Gateway condition –
Return on Equity (ROE)
EPS growth performance
condition measured over
a three year performance
period.
From FY17, performance
measures will include, in
addition to EPS growth, ROCE
and Organic Revenue Growth
with the EPS component
being subject to a ROCE
performance gateway.
Total remuneration
The total remuneration mix is designed to attract, retain and motivate a highly
capable executive team, encourage and drive leadership performance that
reinforces Ansell’s short and long term strategic objectives and provide a
common interest between Executives and shareholders by linking the rewards
that accrue to Executives to the creation of value for shareholders.
60
Strategic objective/
performance link
FAR set at competitive levels
in the market to attract,
retain and engage talented
executives to achieve results
(including being competitive
internationally for talent).
The Board considers these
performance measures to be
appropriately aligned with the
Group’s short-term objectives
of delivering profitable growth
and improving shareholder
return. In addition, the
executives have a clear line
of sight to the targets and are
able to affect results through
their actions.
The Board selected EPS growth
as a performance measure for
vesting of the PSRs and cash
awards on the basis that it:
• is a relevant indicator of
increases in shareholder
value; and
• is a target that provides
a suitable line of sight to
encourage and motivate
executive performance.
The Board selected ROE as a
gateway to ensure that our
capital was being employed
efficiently and earnings growth
was translating to shareholder
value.
ANSELL LIMITED ANNUAL REPORT 2016Section 4 – Group performance
4.1 Group performance
The five year performance history of the Group shows growth in top line sales and underlying profitability from FY12 to FY15, before a
decline in FY16. The primary reasons for the decline were the adverse impact of foreign currency translation, a sluggish world economy
and an increased tax rate for the Group. Furthermore, manufacturing issues in our medical division temporarily increased costs and
affected supply. The Constant Currency (CC) column below is intended to show the year over year performance after restating FY15
results using FY16 exchange rates. These show a robust financial performance year over year, despite the factors noted above.
Table 4.1(a)
Income Statement
Sales
EBIT
Profit for the period attributable to Ansell shareholders
Share information
Basic earnings per share ($US cents)
Dividends per share3 (A$ or $US cents)
Ansell Share Price (A$)
Ratios
2012
US$m
2013
US$m
2014
US$m
2014
Underlying1
2015
2016
2016
vs 2015
US$m
US$m
US$m
CC%2
1,255
1,373
1,590
1,590
1,645
1,573
153
133
171
139
84
44
207
157
245
188
237
159
-0.1%
+8.5%
-2.5%
101.4
A 35.5
13.20
106.5
29.3
110.0
122.5
105.1
-1.4%
A 38.0
US 39.0
US 39.0 US 43.0
US 43.5
17.63
19.83
n/a
24.09
18.17
n/a
n/a
Return on average shareholders’ equity (%)
18.8
19.1
4.6
15.7
16.4
14.1
n/a
Table 4.1(b) – Cumulative Total Shareholder Return (TSR)4
Cumulative TSR – A$
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Jun 12
Jun 13
Jun 14
Jun 15
Jun 16
1 During FY14, the Group acquired BSSI and restructured the business, which involved significant non-cash write-downs as well as cash expenses totaling
$122 million. The underlying results exclude this charge.
2 2016 v 2015 CC per cent refers to the percentage change when comparing FY16 to FY15 expressed in Constant Currency as defined in the Glossary section.
3 Dividends have been declared in US$ since Ansell adopted the US$ as reporting currency in 2014.
4 Cumulative Total Shareholder Return (TSR) is the cumulative financial return which an investor received from holding shares in Ansell, assuming dividends paid
are reinvested in Ansell shares. It is expressed as a cumulative percentage change from a starting value at 1 July 2012 and finishing on 30 June 2016.
61
ANSELL LIMITED ANNUAL REPORT 2016
Remuneration Report continued
Section 5 – Realised pay (Non-Statutory Remuneration Disclosure)
The table in this section uses non-IFRS financial information which is used to detail realised pay earned by the CEO and Other Executives
during FY16. This is a voluntary disclosure and is supplemental information to the statutory remuneration disclosure prepared in
accordance with statutory requirements and accounting standards as detailed in Section 10 of this Remuneration Report. A description of
how to calculate the non-IFRS financial information is set out below and in the footnotes to the tables. Realised pay includes cash salary,
retirement benefits, non-cash benefits paid/payable in relation to FY16 and the full value of incentives earned for the performance period
ended 30 June 2016. The table below shows realised pay for FY16 along with comparatives to FY15 and has been audited.
Table 5 (a) – Realised Pay Summary
Award
Executive Director
Magnus R Nicolin
Other Executives8
Neil Salmon9
Peter Dobbelsteijn11
Steve Genzer
Jeyan Heper12
Joe Kubicek
Anthony Lopez13
Mark Nicholls14
Year
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
Base
Salary1
1,030,000
983,750
490,738
456,500
385,114
411,588
412,699
399,950
277,446
145,759
378,250
340,000
376,565
365,750
175,000
n/a
Retirement Benefits2
Other Benefits3
2016 STI Cash4
367,842
369,385
76,718
107,645
38,456
55,858
74,818
89,137
27,500
0
66,475
56,016
70,693
81,679
34,221
n/a
95,156
97,596
108,450
17,790
458,240
99,427
2,222
0
26,736
8,267
10,137
8,720
134,899
86,211
563
n/a
Cash Awards
Equity Awards
Total
LTI
Cash
Total
Cash Awards
2016 SIP
Restricted
Shares5
LTI
PSRs6
Total Equity
Awards
Total Realised7
600,000
745,800
196,682
206,736
124,141
147,595
119,443
106,041
127,512
40,674
125,120
133,008
108,985
133,041
56,000
n/a
n/a
n/a
n/a10
0
0
0
n/a
n/a
0
n/a
0
n/a
n/a
125,424
162,500
165,000
600,000
745,800
196,682
206,736
124,141
273,019
119,443
268,541
127,512
40,674
125,120
133,008
108,985
298,041
56,000
n/a
499,200
n/a
150,645
n/a
93,105
n/a
99,536
n/a
n/a
n/a
78,200
n/a
90,821
n/a
n/a
n/a
2,718,714
0
0
0
0
n/a
213,044
266,583
n/a
n/a
n/a
0
0
n/a
n/a
270,696
499,200
2,718,714
150,645
n/a
93,105
213,044
99,536
266,583
n/a
n/a
78,200
n/a
90,821
270,696
n/a
n/a
2,592,198
4,915,245
1,023,233
788,671
1,099,056
1,052,936
708,718
1,024,211
459,194
194,700
658,182
537,744
781,963
1,102,377
265,784
n/a
1.
Base salary – the base salary earned by the individual in FY16. The increases in the base salary for Executives are based on benchmarking of similar positions in the
jurisdictions in which the executives are based, as well as their performance during the previous year. As a result, whilst the CEO increase was 4 per cent with effect
from 1 October 2015, increases for Other Executives’ pay were either lower or higher depending the outcomes of the benchmarking and performance reviews.
2. Retirement Benefits includes the retirement benefits earned by the individual in FY16.
3.
Other Benefits includes the cost to the company of cash benefits such as motor vehicle, executive expatriation and relocation allowances, executive insurance, expat
tax equalisation payments and other amounts. Significant year over year variations in other benefits above are detailed below.
4.
2016 STI represents amounts payable under the 2016 STI plan – refer section 7.2.
5.
6.
2016 SIP Restricted Shares represents the value of the restricted share awards under the one-off SIP – refer section 7.4. These awards are awarded as restricted shares,
which will be bought on market by the Group, with recipients being unable to sell the shares for a period of 2 years from the issue date.
LTI PSRs – Given the cancellation of the FY14 LTI, the PSRs column relates only to the FY13 LTI grant, which vested in the FY15 performance period. The figure
represents the value, in US$, of the PSRs which vested from the FY13 LTI grant , multiplied by the closing share price of Ansell Ltd on ASX on 5th August 2015. This was
the date on which the HRC approved the vesting of shares at the prevailing price of A$25.08 (the translation to US$ used an average exchange rate of US$1: A$1.195).
Each individual is subject to the holding restrictions on those shares as outlined in the Share Purchasing Policy of Ansell Ltd.
7.
Total Realised Pay is the sum of Base Salary, Retirement Benefits, Other, Total Cash Awards and Total Equity Award referred to in each of the above columns.
62
ANSELL LIMITED ANNUAL REPORT 2016Section 5 – Realised pay (Non-Statutory Remuneration Disclosure)
The table in this section uses non-IFRS financial information which is used to detail realised pay earned by the CEO and Other Executives
during FY16. This is a voluntary disclosure and is supplemental information to the statutory remuneration disclosure prepared in
accordance with statutory requirements and accounting standards as detailed in Section 10 of this Remuneration Report. A description of
how to calculate the non-IFRS financial information is set out below and in the footnotes to the tables. Realised pay includes cash salary,
retirement benefits, non-cash benefits paid/payable in relation to FY16 and the full value of incentives earned for the performance period
ended 30 June 2016. The table below shows realised pay for FY16 along with comparatives to FY15 and has been audited.
Table 5 (a) – Realised Pay Summary
Award
Executive Director
Magnus R Nicolin
Other Executives8
Neil Salmon9
Peter Dobbelsteijn11
Steve Genzer
Jeyan Heper12
Joe Kubicek
Anthony Lopez13
Mark Nicholls14
Year
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
Base
Salary1
1,030,000
983,750
490,738
456,500
385,114
411,588
412,699
399,950
277,446
145,759
378,250
340,000
376,565
365,750
175,000
n/a
367,842
369,385
76,718
107,645
38,456
55,858
74,818
89,137
27,500
0
66,475
56,016
70,693
81,679
34,221
n/a
95,156
97,596
108,450
17,790
458,240
99,427
2,222
0
26,736
8,267
10,137
8,720
134,899
86,211
563
n/a
Retirement Benefits2
Other Benefits3
2016 STI Cash4
Cash Awards
Equity Awards
Total
LTI
Cash
Total
Cash Awards
2016 SIP
Restricted
Shares5
LTI
PSRs6
Total Equity
Awards
Total Realised7
600,000
745,800
196,682
206,736
124,141
147,595
119,443
106,041
127,512
40,674
125,120
133,008
108,985
133,041
56,000
n/a
n/a
n/a
0
n/a10
0
125,424
0
162,500
n/a
n/a
0
n/a
0
165,000
n/a
n/a
600,000
745,800
196,682
206,736
124,141
273,019
119,443
268,541
127,512
40,674
125,120
133,008
108,985
298,041
56,000
n/a
499,200
n/a
150,645
n/a
93,105
n/a
99,536
n/a
n/a
n/a
78,200
n/a
90,821
n/a
n/a
n/a
0
2,718,714
499,200
2,718,714
0
n/a
0
213,044
0
266,583
n/a
n/a
0
n/a
0
270,696
n/a
n/a
150,645
n/a
93,105
213,044
99,536
266,583
n/a
n/a
78,200
n/a
90,821
270,696
n/a
n/a
2,592,198
4,915,245
1,023,233
788,671
1,099,056
1,052,936
708,718
1,024,211
459,194
194,700
658,182
537,744
781,963
1,102,377
265,784
n/a
1.
Base salary – the base salary earned by the individual in FY16. The increases in the base salary for Executives are based on benchmarking of similar positions in the
8.
Mike Mattos and Scott Corriveau were KMP during the year, but have not been included in this section as they ceased their employment with the Group during FY16.
jurisdictions in which the executives are based, as well as their performance during the previous year. As a result, whilst the CEO increase was 4 per cent with effect
from 1 October 2015, increases for Other Executives’ pay were either lower or higher depending the outcomes of the benchmarking and performance reviews.
2. Retirement Benefits includes the retirement benefits earned by the individual in FY16.
3.
Other Benefits includes the cost to the company of cash benefits such as motor vehicle, executive expatriation and relocation allowances, executive insurance, expat
tax equalisation payments and other amounts. Significant year over year variations in other benefits above are detailed below.
4.
2016 STI represents amounts payable under the 2016 STI plan – refer section 7.2.
5.
2016 SIP Restricted Shares represents the value of the restricted share awards under the one-off SIP – refer section 7.4. These awards are awarded as restricted shares,
9.
Mr Salmon relocated to Belgium during FY16 and his other benefits include relocation costs.
10. Mr Salmon did not participate in the FY13 LTI Grant due to the timing of his commencement of his employment and the LTI is therefore not applicable.
11. Mr Dobblesteijn is Chief Commercial Officer for EMEA and APAC and so is required to travel extensively in his role. As a result he is potentially exposed to various
complex income tax issues. Following a review by relevant authorities during FY16 of his previous tax returns, Mr Dobblesteijn was assessed to owe additional tax
liabilities to the Belgian authorities. These were reimbursed by Ansell pursuant to the terms of his employment agreement. These amounts have been included in the
other benefits category above and are the main reason for the year over year increase. In addition, his base salary disclosed above as expressed in US$ has reduced as
a result of foreign exchange translation.
which will be bought on market by the Group, with recipients being unable to sell the shares for a period of 2 years from the issue date.
12. Mr Heper joined Ansell part way through FY15 and his FY15 remuneration is not an annualised figure. He was also not a participant of the FY14 LTI grant or 2016 SIP.
6.
LTI PSRs – Given the cancellation of the FY14 LTI, the PSRs column relates only to the FY13 LTI grant, which vested in the FY15 performance period. The figure
13. Mr Lopez relocated to Belgium part way through FY15 and is entitled to housing and other allowances. The year over year increase is primarily due to the full year
represents the value, in US$, of the PSRs which vested from the FY13 LTI grant , multiplied by the closing share price of Ansell Ltd on ASX on 5th August 2015. This was
impact of the allowances paid during FY16 as they commenced part way through the FY15 period.
the date on which the HRC approved the vesting of shares at the prevailing price of A$25.08 (the translation to US$ used an average exchange rate of US$1: A$1.195).
Each individual is subject to the holding restrictions on those shares as outlined in the Share Purchasing Policy of Ansell Ltd.
7.
Total Realised Pay is the sum of Base Salary, Retirement Benefits, Other, Total Cash Awards and Total Equity Award referred to in each of the above columns.
14. Mr Nicholls was appointed as a KMP on 1 January 2016 following the decision by Mike Mattos to resign from Ansell. Mr Nicholls was not a participant of the FY14
LTI grant and is not entitled to participate in the 2016 SIP. His pay details above represent the 6 months of realised pay for his time following his commencement
as KMP.
63
ANSELL LIMITED ANNUAL REPORT 2016Remuneration Report continued
Section 6 – Remuneration governance
6.1 Role of the Human Resources Committee
Ansell’s approach to Executive remuneration is founded on the understanding that shareholders expect reward to reflect Group
performance. The Human Resources Committee (HRC) is responsible for ensuring that our executive remuneration philosophy,
strategy and policies are designed with this objective in mind.
Our governance framework for determining executive remuneration is outlined below:
Board
The Board is responsible for:
• defining Ansell’s remuneration strategy
• determining the structure and quantum of remuneration for the CEO
and Other Executives that support and drive the achievement of Ansell’s
strategic objectives
The Board has an overarching discretion with respect to the awards given
under Ansell’s incentive plans.
HRC
The HRC is delegated responsibility by the Board to review and make
recommendations on the remuneration policy, strategy and structure for
Ansell’s Board members, the CEO and Other Executives.
The HRC has in place a process of engaging and seeking independent
advice from external remuneration advisers and ensures remuneration
recommendations in relation to Other Executives are free from undue
influence by management.
Consultation with shareholders
and other stakeholders
Remuneration consultants and
other external advisors
• Provide independent advice,
information and recommendations
relevant to remuneration decisions.
• In performing its duties and making
recommendations to the Board,
the Chairman of the HRC seeks
independent advice from external
advisers on various remuneration
related matters.
• Any advice or recommendations
provided by external advisers are
used to assist the Board – they do
not substitute for the Board and
HRC process.
Management
Provides information relevant to remuneration decisions and makes
recommendations to the HRC.
Obtains remuneration information from external advisors to assist the
HRC (i.e. market data, legal advice, accounting advice, tax advice).
Remuneration consultants and
other external advisors
• Management seeks its own
independent advice with respect to
information and recommendations
relevant to remuneration decisions.
6.2 External consultants
From time to time during the financial year ended 30 June 2016, the Group engaged external consultants to provide insights on
remuneration trends, regulatory and governance updates and market data in relation to the remuneration of Non-Executive Directors,
the CEO and Other Executives. No remuneration recommendations as defined in Section 9B of the Corporations Act 2001 were obtained
during the financial year ended 30 June 2016.
6.3 Mandatory shareholding policy
To encourage alignment with shareholder interests, the Board has adopted a mandatory shareholding policy, known as the Share
Purchasing Policy, which requires Directors and Executives to purchase a multiple of their Directors’ fees / base salary in Ansell shares
over a set period.
Ansell has developed a mechanism to enable Directors and Executives to regularly purchase Ansell shares, known as the Voluntary
Share Purchasing Plan, to facilitate compliance with the Share Purchasing Policy, while complying with ASX trading rules and the
restrictions of the Share Trading Policy (detailed on the following page).
64
ANSELL LIMITED ANNUAL REPORT 2016The Share Purchasing Policy requires that, in addition to existing share grants as part of the LTI plan, Executives must hold a proportion
of their base salary in shares. As set out in section 1.2, for FY16 this is 4 times base salary for the CEO and 2 times base salary for the
Other Executives. From FY17, this will be 3 times base salary for the CEO and 1 times base salary for Other Executives.
Non-Executive Directors are expected to invest an appropriate percentage of their gross fees in acquiring shares on market, to achieve a
shareholding worth two times the annual Directors’ fees within a 10-year period from the later of 2013 or their start date. Further details
on this share plan are outlined in section 6.5.
The movement in the number of shares held by each KMP and the progress of each KMP during FY16 in achieving their respective share
ownership goals is as follows:
Table 6.3 (a) KMP share ownership
Held at
1 July 2015
Purchases
Granted
Under
Awards
Net Movement
Due to Other
Changes
Held at
30 June
2016
% of Share
Ownership
Goals Met5
Non-Executive Directors
Glenn L L Barnes
FY16
FY15
Ronald J S Bell
FY16
FY15
John Bevan
FY16
FY15
L Dale Crandall
FY16
FY15
W Peter Day
FY16
FY15
Leslie Desjardins1
FY16
FY15
Annie H Lo2
FY16
FY15
Marissa T Peterson
FY16
FY15
Executive Director
Magnus R Nicolin3
FY16
FY15
Other Executives
Neil Salmon
FY16
FY15
Scott Corriveau4
FY16
FY15
41,509
39,214
10,568
7,939
11,320
7,705
18,585
17,433
17,361
14,680
0
n/a
2,705
1,138
14,896
12,064
65,665
31,278
14,917
0
32,632
27,120
20,239
2,295
4,861
2,629
6,082
3,615
2,095
1,152
10,179
2,681
1,961
n/a
824
1,567
5,237
2,832
0
9,014
0
0
0
0
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
233,897
25,373
15,213
14,917
13,679
5,512
(70,532)
0
0
0
(22,191)
0
61,748
41,509
15,429
10,568
17,402
11,320
20,680
18,585
27,540
17,361
1,961
n/a
n/a
2,705
20,133
14,896
229,030
65,665
30,130
14,917
n/a
32,632
129%
110%
69%
65%
78%
70%
86%
104%
111%
103%
9%
n/a
n/a
18%
84%
85%
78%
26%
43%
25%
n/a
66%
65
ANSELL LIMITED ANNUAL REPORT 2016Remuneration Report continued
Other Executives
Peter Dobbelsteijn
FY16
FY15
Steve Genzer
FY16
FY15
Jeyan Heper
FY16
FY15
Joe Kubicek
FY16
FY15
Anthony Lopez
FY16
FY15
Mike Mattos4
FY16
FY15
Mark Nicholls
FY16
FY15
Held at
1 July 2015
Purchases
Granted
Under
Awards
Net Movement
Due to Other
Changes
Held at
30 June
2016
% of Share
Ownership
Goals Met5
5,308
0
6,493
0
0
0
30,000
0
2,885
0
16,100
0
0
n/a
1,480
0
1,151
0
0
0
10,000
30,000
1,360
0
0
16,100
12,000
n/a
10,151
5,308
12,702
6,493
0
0
26,981
0
12,898
2,885
0
0
0
n/a
(3,312)
0
(4,698)
0
0
0
0
0
(4,770)
0
(16,100)
0
0
n/a
13,627
5,308
15,648
6,493
0
0
66,981
30,000
12,373
2,885
n/a
16,100
12,000
n/a
25%
10%
27%
13%
0%
0%
124%
69%
23%
6%
n/a
33%
24%
n/a
1. Leslie Desjardins was appointed as a Non-Executive Director on 30 November 2015, and in accordance with the policy, is required to be compliant with the policy
within a 10 year period.
2. Annie Lo retired from the Board with effect from 30 November 2015 and accordingly is no longer required to comply with the policy.
3. During the year, Magnus Nicolin sought leave to sell a portion of his shareholdings to pay for tax liabilities on past PSR awards and the Board authorised the sale
in accordance with the Group’s share trading policies.
4. Scott Corriveau and Mike Mattos ceased their employment with the Group during FY16 and accordingly are no longer required to be compliant with the policy.
5. The percentage of ownership goals met are based upon a multiple of an individual’s base pay or directors fees (as applicable). The combination of a lower A$
share price and stronger US$ exchange rate has resulted in a higher shareholding requirement in FY16, which has seen the percentage of ownership goals met,
in some cases, fall from the prior year despite purchases made during the year.
6.4 Share Trading Policy
Ansell has a Share Trading Policy which prohibits certain individuals within the Company, including the KMP, from trading Ansell shares
other than during specified trading windows or in accordance with the Voluntary Share Purchasing Plan. All KMP are required to declare
to either the CEO (for Other Executives) or the Chairman (for Non-Executive Directors) and the Company Secretary any share trades into
which they enter during trading windows for the purpose of disclosure on the ASX.
6.5 Non-Executive Directors’ Share Purchases
As noted above, the Non-Executive Directors are expected to invest an appropriate percentage of their gross fees in acquiring Ansell
shares on market to achieve a shareholding worth two times annual Non-Executive Directors’ fees within a 10-year period from the
earlier of 2013 or their start date. Under the Voluntary Share Purchasing Plan, a pre-agreed amount of Ansell shares (by value) are
acquired monthly on the ASX through a trustee company at the prevailing market price and are transferred into the name of the
Director, but are subject to a restriction on dealing until the Director ceases to hold office.
Shares were purchased on market (at no discount) on behalf of the Directors throughout FY16 pursuant to the Voluntary Share Purchasing
Plan at the following prices per share Table 6.5 (a). The second Table 6.5 (b), shows the total number of shares purchased by the directors,
both under the Voluntary Share Purchasing Plan and individual purchases in compliance with the Share Trading Policy.
66
ANSELL LIMITED ANNUAL REPORT 2016Table 6.5 (a) – Share price per share
Table 6.5 (b) – Number of Shares bought by Non-Executive Directors
Month
31-Jul-15
31-Aug-15
30-Sep-15
30-Oct-15
30-Nov-15
31-Dec-15
29-Jan-16
29-Feb-16
31-Mar-16
29-Apr-16
31-May-16
30-Jun-16
Share Price
Director
Total Purchased in FY16
Glenn L L Barnes
Ronald J S Bell
John Bevan
L Dale Crandall
W Peter Day
Leslie Desjardins
Annie H Lo
Marissa Peterson
20,239
4,861
6,082
2,095
10,179
1,961
824
5,237
24.87
22.01
18.66
19.89
21.85
21.87
19.76
17.29
17.21
19.97
19.26
18.17
Section 7 – Executive Remuneration
7.1 Fixed remuneration
Ansell seeks to offer competitive levels of remuneration in the relevant employment marketplace in which our Executives are based
to attract and retain the best talent available.
In setting fixed remuneration, regard is had to role, responsibility and experience of the Executive as well as what is generally paid for
similar roles in appropriate comparator businesses for each role in the relevant geographic locations where executives reside and work.
Accordingly, our remuneration arrangements are truly global, not those traditionally adopted by most of our predominantly Australian
operating ASX peers.
The Group considers the 50th percentile of an appropriate comparator group as the general benchmark for fixed remuneration
at the commencement of an employee’s tenure or upon promotion to KMP. Fixed remuneration levels are reviewed annually.
7.2 At risk remuneration – STI
A summary of the key features of the FY16 STI plan is as follows:
Form and purpose of the plan
What is the STI plan?
Who is able to participate?
Why does the Board consider the
STI an appropriate incentive?
The STI plan enables Executives the opportunity to earn an annual cash award
(expressed as a percentage of base salary) if they meet specific, pre-established annual
performance targets.
In addition to the Executives, the Board invites a number of other senior managers to
participate.
The STI plan puts a significant portion of a participant’s annual remuneration “at risk”,
as it is earned only if the business and the participant meet specific performance targets
directly linked to Ansell’s annual business objectives.
Does the STI contain a deferred
component?
Historically, no.
However, from FY17, STI deferral will be implemented. See section 1.2.
Governance
How is performance against the
performance conditions assessed?
All performance conditions under the STI are clearly defined and measurable.
The HRC assesses the Group and CEO’s performance during the performance period
and recommends to the Board an annual incentive award for the CEO.
The CEO assesses the performance of Other Executives against their objectives for the
performance year and recommends to the HRC for its approval annual incentive awards
for the Other Executives.
67
ANSELL LIMITED ANNUAL REPORT 2016
Remuneration Report continued
When is performance against the
performance conditions determined
and the award paid?
Performance against the targets for the performance year is assessed in August following
the completion of the audit of the financial statements for the relevant financial year.
Payments (or share awards as will be the case for FY17 onwards) are typically made in
September following the performance year.
From FY17, share awards will be unable to be sold for a period of 2 years from the date
of receipt of the award.
Yes. The Board may adjust incentive outcomes under the STI plan (up or down) to ensure
that executive reward aligns with shareholder experience and they have not exercised that
discretion this year.
Performance conditions for FY16 were based on a weighted mix of improvements across
the Group, the Group Business Units, and the Regions in Sales Revenue, EBIT, and Free
Cash Flow. In addition, for the CEO and CFO conditions also included Profit Attributable.
The Board considers these metrics to be appropriately aligned with the Group’s objectives
of delivering profitable growth and improving shareholder return.
Individual multipliers
For Executive KMP’s excluding the CEO, an assessment of the individual’s performance
(against objectives agreed at the beginning of the year) is made by the CEO and approved
by the Board. If objectives are judged as having been met, the STI award will be paid in
full at 100 per cent of the scorecard calculation derived from the relevant financial
performance conditions. If the assessment is that objectives were only partially met or were
exceeded, the financial amount, will be adjusted down or up accordingly with the
maximum permissible range between zero per cent and 140 per cent of the STI calculation.
The total maximum payout remains capped at the maximum available under the STI plan
regardless of whether this is achieved through financial performance alone or a
combination of financial performance and achievement against personal objectives.
From FY17, non-financial performance measures will also be included as outlined
in section 1.2.
The weightings of the performance conditions for each Executive is as follows:
CEO/CFO
Other Executives
Sales
40%
40%
EBIT
30%
40%
Free Cash
Flow
Profit
Attributable
20%
20%
10%
n/a
The opportunity levels under the FY16 STI plan are as follows:
CEO
CFO
Other Executives
% of Base Salary
Threshold
50%
30%
25%
Target
100%
60%
50%
Maximum
200%
125%
105%
The opportunity levels are applied to each performance condition and weighted in
accordance with the table above. Accordingly, it is possible for the Executives to achieve a
below threshold outcome depending upon the mix of outcomes against the individual
performance conditions.
From FY17, however, these opportunity levels will change as outlined in section 1.2.
Does the Board have an overriding
discretion?
Performance conditions
What are the STI performance conditions
and why were they chosen?
What are the weightings of each of the
performance conditions?
Reward opportunity
What level of reward can be earned
under the STI?
68
ANSELL LIMITED ANNUAL REPORT 2016Cessation of employment or clawback
If a participant ceases employment
during the year, will they receive
a payment?
If an Executive ceases his or her employment with Ansell at any time prior to the end of the
performance period, the Executive shall not be entitled to any STI payment. However, the
HRC may, in its sole discretion, pay a pro-rated award in certain circumstances (such as
death, disablement, retirement, or other approved situations).
Is there an ability to claw back awards
in appropriate circumstances?
Unvested awards may be forfeited in the event of fraud, gross misconduct or the material
misstatement of the Financial Statements by executives.
From FY17, the STI deferral into equity initiatives will more easily allow clawback of equity
instruments to occur during the restricted period.
STI – actual outcomes
Outlined below is Executives’ performance against the STI performance measures for FY16:
Sales
EBIT
Free Cash Flow
Profit Attributable
CEO and CFO
Threshold not met
Threshold met or exceeded
Target met or exceeded
Threshold not met
Other Executives
Threshold not met
Threshold met or exceeded
Target met or exceeded
Not applicable
The above outcomes reflect the following:
• Sales did not meet the STI growth targets as good growth in Sexual Wellness and success with new products in Industrial could not
offset the effects of slow worldwide economic growth, declining demand in many emerging markets and manufacturing issues in our
Medical division which affected supply.
• EBIT performance was stronger than sales performance as the company successfully implemented price increases in some regions
and managed costs effectively throughout the year.
• Free Cash Flow performance was again strong and exceeded expectations as a result of a reduction in working capital and careful
management of capital expenditure.
• Profit Attributable levels were below the Threshold levels primarily because of a higher tax expense.
As a result of these performance outcomes, the CEO and CFO received 29 per cent and 31 per cent respectively of their maximum
opportunity under the STI plan whilst Other Executives were generally similar to the outcomes of the CEO and CFO. The difference between
the two outcomes reflects a portion of the CEO’s and CFO’s performance being linked to the Profit Attributable performance measure.
The table below outlines the amounts payable to Executives under the STI plan for FY16:
Table 7.2(a) – FY16 STI amounts payable
For the Financial Year
Ended 30 June 2016
Maximum Potential
STI Opportunity as %
of Base Salary
% of the Maximum STI
Opportunity Achieved
% of the STI Maximum
Opportunity Not
Achieved1
Maximum Potential
STI Opportunity ($)1
Actual STI
Payment2
Executive Director
Magnus R Nicolin
Other Executives
Neil Salmon
Scott Corriveau3
Peter Dobbelsteijn
Steve Genzer
Jeyan Heper
Joe Kubicek
Anthony Lopez
Mike Mattos4
Mark Nicholls
200%
125%
105%
105%
105%
105%
105%
105%
0%
105%
29%
31%
30%
30%
27%
43%
30%
27%
n/a
30%
71%
69%
70%
70%
73%
57%
70%
73%
n/a
70%
2,080,000
600,000
632,709
102,742
407,336
435,469
298,856
410,550
397,341
n/a
196,682
31,312
124,141
119,443
127,512
125,120
108,985
0
183,750
56,000
1. Where the actual STI payment is less than the maximum potential, the difference is forfeited and does not become payable in subsequent years.
2. The 2016 STI was determined in conjunction with the finalisation of the FY16 results and will be paid in September 2016.
3. Mr Corriveau left the Group during FY16 and STI payments were pro-rated accordingly under the terms of his separation agreement.
4. Mr Mattos ceased his employment prior to the STI vesting period and is therefore not entitled to participate in the FY16 STI.
69
ANSELL LIMITED ANNUAL REPORT 2016
Remuneration Report continued
7.3 At risk remuneration – LTI
A summary of the details of how the LTI operates in respect of the grant made to Executives during FY16 is set out below:
Driving performance
What is the LTI plan?
Who participates?
The LTI plan enables Executives to earn an award (expressed as a percentage of base
salary) if the Group achieves specific, pre-established targets over a three-year
performance period.
In addition to the Executives, the Board invites a number of other senior managers to
participate.
How does the LTI plan drive performance
and align participants’ interests with
shareholders?
Participation in the LTI plan is only offered to executives who are able, or have the
potential, to influence shareholder value in a significant way. Also, by making awards
primarily in equity, this element of remuneration for Executives is strongly linked to
long-term shareholder value realisation.
Instrument
How are awards delivered?
For the grant under the FY16 LTI:
• 100 per cent of the CEO’s award will be delivered in PSRs;
• 60 per cent of the CFO’s award will be delivered in PSRs and 40 per cent in cash; and
• 50 per cent of Other Executives’ awards will be delivered in PSRs and 50 per cent in cash.
PSRs are granted at no cost to the Executive. Each PSR granted will entitle the Executive
to one ordinary share in the Group at the time of vesting, subject to the satisfaction of
performance conditions as described below. Any PSRs which vest are subject to holding
restrictions in accordance with the Group’s Share Purchasing Policy.
Cash awards that are granted will vest subject to satisfaction of performance conditions.
From FY17, awards will be delivered entirely by way of PSRs to all participants, as outlined
in section 1.2.
Yes. The gateway condition is a minimum acceptable level of performance that must
be achieved before any LTI awards granted may vest.
For the FY16 grant, the gateway requires that the Group’s ROE to be at least 1.5 x the
Weighted Average Cost of Capital (WACC) at the end of the performance period to ensure
that the Group’s capital was being employed effectively and earnings growth was
translating to shareholder value.
WACC is calculated based on a methodology defined by the HRC and is applied
consistently from year to year. The calculation is performed and the gateway condition
tested at the conclusion of each three-year performance period over which EPS
performance is measured for LTI reward purposes.
Specific components of the WACC are calculated using the principles outlined below:
• Risk-free Rate: four year historical average United States five year bond rate.
• Cost of Debt: Ansell’s actual average cost of debt over the previous four years.
• Market Risk Premium: four year average equity risk premium for United States
equity markets.
• Beta is assessed based on observed beta for Ansell and a basket of comparable
companies.
Four years was chosen as the relevant period over which to calculate the WACC
components reflecting the fact that many of the decisions driving EPS growth over
the LTI period will have been taken with reference to cost of debt and equity measurement
in the year prior to the first year of EPS measurement.
Gateway and performance conditions
Does a gateway apply to the LTI?
70
ANSELL LIMITED ANNUAL REPORT 2016What is the performance condition?
EPS growth is the sole performance condition for the FY16 LTI grant.
The Board selected EPS as a performance measure on the basis that it:
• is a relevant indicator of increases in shareholder value; and
• is a target that provides a suitable line of sight to encourage and motivate executive
performance.
As outlined in section 1.2, EPS growth will be measured on a Constant Currency basis.
From FY17 the performance measures for the LTI plan will also include Organic Growth and
ROCE, as outlined in section 1.2.
Reward opportunity
What are the performance targets and
how is performance calculated?
The performance hurdles under the FY16 LTI grant are as follows:
Threshold
Target
Stretch
EPS Growth Hurdle
7% CAGR
8% CAGR
12% CAGR
Base year EPS delivered in FY15, less adjustments made to FY15, was US$ 1.183. Therefore,
the EPS growth required at +7 per cent, +8 per cent, and +12 per cent CAGR will be:
• + 26.6c in order to achieve threshold performance;
• + 30.7c in order to achieve target performance; and
• + 47.9c in order to achieve stretch performance.
EPS growth at Constant Currency will be calculated each year and the total of 3 years of
Constant Currency EPS growth will be compared to the above performance hurdles.
These performance targets were chosen as being consistent with the Group’s longer range
corporate plans in FY16 and considered appropriate because the Group has invested
heavily in new products, improved manufacturing efficiencies through its profit
improvement capital expenditures, expanded its presence in emerging markets and
pro-active in acquisition efforts.
The opportunity levels under the FY16 LTI grant are as follows:
CEO
CFO
Other Executives
% of Base Salary
Threshold
Target
Maximum
100%
62.5%
50%
200%
125%
100%
400%
250%
200%
Vesting will increase on a straight line basis for each 0.1 per cent of EPS growth over the
performance period between the threshold EPS growth value and target EPS growth and
between the target EPS growth and the stretch EPS growth.
From FY17, however, these opportunity levels will change as outlined in section 1.2.
The number of PSRs granted is calculated by reference to Ansell’s average closing share
price on the Australian Securities Exchange over the ninety trading days prior to the grant
date. The average closing price is then discounted for dividends foregone over the intended
life of the PSRs on Ansell ordinary shares during the performance period.
What level of reward can be earned
under the LTI?
How are the number of PSRs
determined?
71
ANSELL LIMITED ANNUAL REPORT 2016Remuneration Report continued
Governance
Will the Board exercise discretion
with respect to the calculation
of performance?
The Board has discretion to make adjustments in calculating the applicable performance
conditions to:
• exclude matters that are beyond the reasonable control or foresight of management; and
• include matters that are within management control or should reasonably have been
foreseen to ensure no unfair advantage or penalty in incentive outcomes when viewed
in light of shareholder value creation.
Is retesting permitted?
No. Retesting is not permitted.
Are participants entitled to ‘hedge’
against awards?
It is strictly prohibited to hedge or to use any other instrument to affect the value of
particular holdings which the individual holds or has been granted.
Cessation of employment, clawback or change of control
Is there an ability to ‘claw back’ in
appropriate circumstances?
The Board may, in its discretion, cancel, reset and/or require repayment of an award
if the Award has vested in certain circumstances. These are detailed in the LTI plan rules,
but typically relate to acts of fraud, dishonesty or serious breach of obligations.
What happens to awards that are not yet
exercisable on cessation of employment?
How would a change of control impact
LTI entitlements?
From FY17, as all awards will be in the form of PSRs and Shares, the clawback
arrangements will be easier to enforce than previous cash based awards.
If an Executive ceases his or her employment with Ansell at any time prior to the end of the
vesting period, the Executive shall not be entitled to any award. However, the Board may, in
its sole discretion, pay a pro-rated award in certain circumstances such as death, disability,
retirement or other reason approved by the Board.
On a change of control, the Board has discretion to vest some or all of the LTI awards. In
exercising this discretion, the Board will consider all relevant circumstances, including
performance against the various measures and conditions for the part period up to the
change of control event and the portion of the performance period which has expired.
LTI – actual outcomes under the FY14 LTI grant
As the FY14 LTI grant was cancelled, no outcomes were achieved as reflected in the table below.
Table 7.3(a) – FY14 LTI outcomes (vesting in FY16)
Date Award
Granted
Maximum Cash
Opportunity1
(US$)
Maximum Value
of PSRs Granted
(US$)
Cash Award
Vested
(US$)
Number of
PSRs Vested
(Shares)
Name
Executive Director
Magnus R Nicolin
17 October 2013
n/a
3,400,000
n/a
Other Executives
Neil Salmon
15 August 2013
Scott Corriveau
15 August 2013
Peter Dobbelsteijn
15 August 2013
Steve Genzer
Jeyan Heper2
Joe Kubicek
15 August 2013
n/a
15 August 2013
Anthony Lopez
15 August 2013
Mike Mattos
15 August 2013
Mark Nicholls2
n/a
440,000
365,000
284,300
340,000
n/a
282,557
340,000
307,489
n/a
440,000
365,000
284,300
340,000
n/a
282,557
340,000
307,489
n/a
Amount
of Cash
Forfeited
(US$)
Number
of PSRs
Forfeited
(shares)
n/a
216,070
440,000
365,000
284,300
340,000
n/a
282,557
340,000
307,489
n/a
27,962
23,196
18,120
21,607
n/a
17,957
21,607
19,541
n/a
0
0
0
0
0
0
0
0
0
n/a
n/a
0
0
0
0
0
0
n/a
n/a
1. Calculated at average FX rates at the time of grant being A$1:US$1.89 and A$1:€0.7634.
2. Mr Heper and Mr. Nicholls commenced employment with the company after the award grant date of 15 August 2013 and are therefore not participants in the
FY14 Plan.
72
ANSELL LIMITED ANNUAL REPORT 20167.4 At risk remuneration – SIP
The key features of the ‘one off’ SIP for FY16 are as follows:
Driving performance
What is the SIP?
The SIP is a one-off plan introduced at 50 per cent of the FY14 LTI grant, but linked to
performance conditions similar to the STI.
Why was the SIP introduced?
The Board has issued the SIP for FY16 to achieve the following purposes:
Who participates?
Instrument
How are awards delivered?
Gateway and performance conditions
Does a gateway apply to the SIP?
• to maintain the alignment between the interests of shareholder and Ansell management;
• to provide a replacement plan for the FY14 LTI grant which has been cancelled by the
Board;
• encourage retention of participants through time vesting requirements; and
• encourage high performance through achievement of performance hurdles.
Those Executives and other senior managers whose grants under the FY14 LTI were cancelled.
Awards are made by way of restricted shares (i.e. ordinary shares in Ansell that are unable
to be sold, transferred, pledged, encumbered or otherwise dealt with for a period of two
years from date of issue).
The Group will purchase each restricted share on-market on the ASX.
Yes. As in the FY14 LTI grant, the gateway requires that the Group’s ROE is at least 1.5 x the
WACC at the end of the performance period in order for any awards under the SIP to vest
(see section 7.3).
What are the performance conditions?
The performance conditions are the same as those for sales and EBIT under the STI plan
(see section 7.2).
Reward opportunity
What are the performance targets and
what level of reward can be earned
under the SIP?
Governance
Will the Board exercise discretion
with respect to the calculation
of performance?
The performance targets under the SIP are exactly the same for Sales and EBIT as those in
the STI (see section 7.2).
The opportunity levels under the SIP are 50 per cent of the cancelled FY14 LTI grant
opportunity levels, adjusted for current pay rates (see section 7.3).
The Board has discretion to make adjustments in calculating the applicable performance
conditions to:
• exclude matters that are beyond the reasonable control or foresight of management; and
• include matters that are within management control or should reasonably have been
foreseen to ensure no unfair advantage or penalty in incentive outcomes when viewed in
light of shareholder value creation.
Is retesting permitted?
No. Retesting is not permitted.
Cessation of employment, clawback or change of control
Is there an ability to ‘claw back’ in
appropriate circumstances?
What happens to awards that are not yet
exercisable on cessation of employment?
The Board may, in its discretion, cancel, reset and/or require repayment of an award if the
Award has vested in certain circumstances. These are detailed in the SIP plan rules, but
typically relate to acts of fraud, dishonesty or serious breach of obligations.
If an Executive ceases his or her employment with Ansell at any time prior to the end of the
vesting period, the Executive shall not be entitled to any award. However, the Board may, in
its sole discretion, pay a pro-rated award in certain circumstances such as death, disability,
retirement or other reason approved by the Board.
How would a change of control impact
SIP entitlements?
On a change of control, unless the Board determines otherwise in its absolute discretion,
the shareholding restrictions on the SIP awards will cease to apply.
73
ANSELL LIMITED ANNUAL REPORT 2016Remuneration Report continued
SIP – actual outcomes
Performance under the SIP is linked to FY16 Sales and EBIT performance under the STI plan. Please refer to section 7.2 for details about
performance against the relevant measures.
Gateway Condition
In addition to the performance conditions for Sales and EBIT above, a gateway condition exists relating to the Company’s Return on
Equity (ROE), which requires that the FY16 ROE to be at least 1.5 times the Company’s WACC at 30 June 2016.
Ansell’s WACC for FY16 was determined to be 7.4 per cent. This represents the minimum return anticipated on the assets of the Group
and takes into consideration the Group’s mix of funding between debt and equity. The gateway condition calculated at 1.5x WACC was
11.1 per cent. The Company’s actual ROE for FY16 was 14.1 per cent, exceeding the gateway condition.
SIP shares
The grant of restricted shares as shown in the table below reflects the performance achieved and the value of shares issued to
participants of the FY16 SIP.
Table 7.4 (a) – FY16 SIP outcomes
For the Financial Year
Ended 30 June 2016
Maximum Potential
SIP Opportunity as %
of Base Salary
Maximum Potential
SIP Opportunity ($)1
$ Value of SIP
Equity Award2
% of the Maximum
SIP Opportunity
Achieved
% of the Maximum
SIP Opportunity not
Achieved1
Executive Director
Magnus R Nicolin
Other Executives
Neil Salmon
Peter Dobbelsteijn
Steve Genzer
Jeyan Heper3
Joe Kubicek4
Anthony Lopez
Mike Mattos4
Mark Nicholls3
Scott Corriveau5
200%
2,080,000
499,200
125%
100%
100%
n/a
100%
100%
100%
n/a
100%
635,250
387,939
414,732
n/a
325,834
378,420
269,727
n/a
293,550
150,645
93,105
99,536
n/a
78,200
90,821
64,750
n/a
70,452
24%
24%
24%
24%
n/a
24%
24%
24%
n/a
24%
76%
76%
76%
76%
n/a
76%
76%
76%
n/a
76%
1. The maximum opportunity represents half of the maximum opportunity available under the FY14 LTI grant. Where the actual SIP payment is less than the
maximum potential, the difference is forfeited and does not become payable in subsequent years.
2. The 2016 SIP was determined in conjunction with the finalisation of the FY16 results. As discussed above, the $ value of the SIP Award is the gross value (prior to
tax) made via restricted shares.
3. As indicated in Section 5, Mr Heper and Mr Nicholls were not participants in the FY14 LTI grant and therefore are not entitled to an award under the SIP.
4. Mike Mattos and Joe Kubicek joined the Group in January 2014 after the BSSI acquisition and are entitled to a pro-rata SIP award as a result of the link to the FY14
LTI. As Mr Mattos ceased his employment with the Group during FY16,a pro-rata reduction will be applied to Mr Mattos’ SIP to reflect his tenure with the Group.
5. Mr Corriveau left the group on 30 September 2015, which has distorted his SIP as a percentage of his base salary for the year. His SIP Award based on his
annualised base salary is 18%.
74
ANSELL LIMITED ANNUAL REPORT 2016
Section 8 – Executive Service Agreements
The remuneration and other terms of employment for Executives are covered in formal agreements or letters of offer.
Chief Executive Officer
The CEO, Magnus Nicolin, was recruited as a US based executive and his contract reflects this. He has subsequently relocated
to Belgium and there has been no substantial change to the terms and conditions of his contract. He is engaged by the Group
under an agreement which:
• does not specify a fixed term of engagement;
• provides that the Group may terminate the CEO’s engagement upon giving 12 months’ notice or payment in lieu, and may terminate
immediately in the case of wilful misconduct;
• provides that in certain circumstances, such as a material diminution of responsibility or the CEO ceasing to be the most Senior
Executive of Ansell, the CEO may be entitled to a payment equivalent to 12 months’ base salary;
• requires the CEO to give the Group at least six months’ notice of termination of services; and
• in order to protect the Group’s business interests, prohibits the CEO from engaging in any activity that would compete with the Group
for a period of 12 months following termination of his engagement for any reason.
The agreement entered into with the CEO has been drafted to comply with the Corporations Act regarding the payment of benefits on
termination.
Other Executives
Neil Salmon was recruited as a US based executive and his contract reflects this. He has subsequently relocated to Belgium and there
has been no substantial change to the terms and conditions of his contract. His services are engaged by the Group for an unlimited
duration. He is entitled to a separation fee upon termination by the Group (other than for gross misconduct) equal to 12 months’ base
salary plus certain other contractual entitlements. He is required to give the Group six months’ prior notice of termination of services.
Steve Genzer and Mark Nicholls, who are based in the United States, and Anthony Lopez, who is seconded to the Group’s office in
Brussels, are employed ‘at will’ and as such, their service agreement does not specify a fixed term of employment.
Peter Dobbelsteijn manages the sales and marketing operations of three major geographies being Europe, Middle East & Africa and Asia
Pacific. His services are engaged by the Group for an unlimited duration. He is entitled to a separation fee upon termination by the
Group (other than for gross misconduct) equal to 12 months’ base salary plus STI and LTI awards pro-rated according to the applicable
performance period and subject to final approval by the Board. He is required to give the Group three months’ prior notice of
resignation.
Jeyan Heper is a Belgium based executive who is employed by the Group for an unlimited duration. He is eligible for 10 week’s
severance benefits upon termination by the Group in accordance with applicable Belgian laws and regulations. He is required to
give five weeks’ notice to the Group if he wishes to resign.
Mike Mattos (resigned 31 January 2016) and Joe Kubicek were employed under agreements entered into at the time of Ansell’s
acquisition of the BarrierSafe Solutions International business in January 2014. These employment agreements have a fixed two-year
term through 2 January 2016. As this period has now passed, employment continues on an ‘at-will’ basis.
75
ANSELL LIMITED ANNUAL REPORT 2016
Remuneration Report continued
Section 9 – Non-Executive Directors’ fees
9.1 Policy and approach to setting fees
Overview of policy
Aggregate fees approved by
shareholders
Base fees for 2016
76
Reflecting the Board’s focus on long term strategic direction and corporate performance
rather than short term results, remuneration for the Chairman and other Non-Executive
Directors is structured with a fixed fee component only. Fees are not linked to the
performance of Ansell so that independence and impartiality is maintained.
To reflect the global representation that exists in the composition of the current Board
(which includes Australian, US and UK resident directors), Directors are paid in their local
currency. This is done by converting their US dollar fees into their local currency using the
applicable monthly spot exchange rates at the time of payment. The methodology was
different during FY15, which used foreign exchange rates that were agreed by the Board at
the beginning of the financial year and consistent with rates used by the business in the
annual planning process.
Board and Committee fees are set by reference to a number of relevant considerations
including:
• responsibilities and risks attaching to the role of Director;
• time commitment expected of Directors;
• fees paid by peer companies;
• independent advice received from external advisers;
• the global nature of our businesses (to ensure that the Directors’ fee attracts and retains
the best international Directors); and
• the requirement to travel internationally to familiarise oneself with international
operations and for required meetings.
The current aggregate fee pool for Non-Executive Directors of US$1,600,000 was approved
by shareholders at the 2014 AGM. The fee pool in US$ reflects the fact that business
operations are run from outside Australia.
The Board periodically reviews its approach to Non-Executive Director remuneration to
ensure it remains in line with general industry practice and best practice principles of
corporate governance.
Fees for Non-Executive Directors during FY16 were as follows:
Base fees (Board)
Non-Executive Chairman
Non-Executive Director
Committee fees
Audit and Compliance Committee
HR Committee
Risk Committee
US$320,000
US$116,500
Committee Chair
Committee Member
US$30,000
US$24,000
US$24,000
US$12,000
US$12,000
US$12,000
Directors are permitted to be paid additional fees for special duties, including fees paid for
serving on ad hoc projects or transaction-focused committees.
In addition, Directors are also entitled to be reimbursed for all business related expenses,
including travel expenses as may be incurred in the discharge of their duties.
A travel allowance of US$15,000 per annum is paid to each Non-Executive Director, which
is in addition to the above fees.
Superannuation contributions are made on behalf of the Non-Executive Directors at a rate
of 9.5 per cent as required by Australian law. For non-Australian based Directors, these
payments are pro-rated for the period of time spent in Australia. The Directors fees above
are inclusive of any Superannuation payments payable by law.
ANSELL LIMITED ANNUAL REPORT 2016
Section 10 – Key Management Personnel disclosure tables
10.1 Non-Executive Directors’ statutory remuneration
Details of Non-Executive Directors’ remuneration are set out in the following table:
Table 10.1 (a)
Non-Executive Directors
G L L Barnes (Chairman)
R J S Bell
J A Bevan
L D Crandall
W P Day
L Desjardins3
A H Lo4
M T Peterson
Total Non-Executive Directors’ Remuneration
Year
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
Directors Fees1,5
$
335,000
323,622
153,685
154,293
143,311
144,150
165,722
165,007
159,749
159,100
90,708
n/a
64,054
154,272
165,722
165,011
1,277,951
1,265,455
Superannuation2
$
0
0
1,815
2,125
12,189
12,269
1,778
2,325
13,751
13,689
0
n/a
738
2,146
1,778
2,167
32,049
34,721
Total
$
335,000
323,622
155,500
156,418
155,500
156,419
167,500
167,332
173,500
172,789
90,708
n/a
64,792
156,418
167,500
167,178
1,310,000
1,300,176
1. Directors Fees include Base and Committee fees plus travel allowances less applicable Superannuation (see footnote (2) below). All fees are expressed in US$
and are unchanged from the prior year. The methodology of converting the Fees into the base currency of the Directors has changed such that the payments are
converted using spot foreign exchange rates at the date of payment. During the prior year, the foreign exchange rates used to convert to the base currency of
each Director were based on a fixed average exchange rate for the year (US$1: A$1.195 and US$1: GBP 0.6347), which resulted in non-US based Directors being
paid less than their full US$ entitlement.
2. Superannuation contributions are made on behalf of the Non-Executive Directors at a rate of 9.5 per cent as required by Australian law. For non-Australian based
Directors, these payments are pro-rated for the period of time spent in Australia.
3. Leslie Desjardins was appointed on 30 November 2015 and her Directors fees and associated entitlements reflect a part year entitlement from her appointment
date. During FY16, Leslie Desjardins did not attend any meetings in Australia and was therefore not affected by footnote (2) above relating to Superannuation.
4. Annie Lo retired from the Board on 30 November 2015 and her Directors fees and associated entitlements reflect a part year entitlement up to her retirement date.
5. The composition of the Committees is summarised in the Directors Report.
77
ANSELL LIMITED ANNUAL REPORT 2016Remuneration Report continued
10.2 Executive statutory remuneration
Table 10.2 (a)
Short-term Employee Benefits
Post-employment Benefits
Long-term Employee Benefits
FY
Base Salary1
$
STI Payment2
$
Other Benefits3
$
Retirement Plan
Benefits4
$
Termination
Benefits
Executive Director
Magnus R Nicolin8
Other Executives
Neil Salmon
Peter Dobbelsteijn
Steve Genzer
Jeyan Heper
Joe Kubicek
Anthony Lopez
Mike Mattos9
Mark Nicholls
Scott Corriveau9
Peter Carroll10
Total Executive Remuneration
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
1,030,000
983,750
490,738
456,500
385,114
411,588
412,699
399,950
277,446
145,759
378,250
340,000
376,565
365,750
226,625
373,854
175,000
n/a
97,850
388,550
n/a
38,350
600,000
745,800
196,682
206,736
124,141
147,595
119,443
106,041
127,512
40,674
125,120
133,008
108,985
133,041
n/a
139,312
56,000
n/a
31,312
127,596
n/a
-
3,850,287
3,904,051
1,489,195
1,779,803
95,156
97,596
108,450
17,790
458,240
99,427
2,222
0
26,736
8,267
10,137
8,720
134,899
86,211
396
0
563
n/a
0
896,988
n/a
313
836,799
1,215,312
1.
Base salary includes the base salary earned by the individual in FY16. The increases in base salary for Executives are based on external benchmarking of similar
positions in the jurisdictions in which the executives are based. As a result, whilst the CEO increase was 4 per cent with effect from 1 October 2015, increases for Other
Executives’ pay were either lower or higher depending upon their benchmarking of similar positions as well as by reference to their prior year performance against
their personal objectives in their respective role.
2. STI represents amounts payable under the 2016 Short Term Incentive Plan, which are significantly below the 2015 outcomes – refer section 7.2.
3.
Other includes benefits such as motor vehicle, executive expatriation and relocation allowances, executive insurance, expat tax equalisation payments and other
amounts. Significant year over year variations in other benefits are detailed in Section 5: Realised Remuneration.
4. Retirement Benefits includes retirement benefits earned by the individual in FY16.
5.
Share based payment expenses includes amounts provided in respect of the Group’s shared based LTI Plan. Primarily as a result of the cancellation of the FY14 grant,
the Group reversed previously expensed amounts relating to these plans. As such, these reversals are being reflected in the negative amounts shown above in
accordance with accounting requirements.
6.
Cash based payment expenses includes amounts provided in respect of the Groups cash based LTI Plans. The negative amounts shown are due to the same factors
as note 5 above (share based LTI plans).
78
Share based
payment
expense LTI5
$
(1,042,559)
941,896
(154,445)
345,123
(56,182)
94,630
(105,021)
82,150
(24,611)
24,611
66,110
293,162
(101,208)
78,860
60,914
296,970
0
n/a
(109,066)
84,758
n/a
14,555
(1,466,068)
2,256,715
$
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2,480
n/a
9,032
0
n/a
648,628
11,512
648,628
367,842
369,385
76,718
107,645
38,456
55,858
74,818
89,137
27,500
0
66,475
56,016
70,693
81,679
54,858
62,030
34,221
n/a
35,199
79,690
n/a
9,168
846,780
910,608
Cash
LTI6
$
0
0
(132,987)
62,327
(55,725)
104,065
(110,609)
108,104
(24,341)
24,341
(63,890)
48,162
(106,360)
104,688
(69,527)
52,411
0
n/a
(114,782)
112,278
n/a
14,555
(678,221)
630,931
Restricted
Share
Award
SIP7
$
499,200
n/a
150,645
n/a
93,105
n/a
99,536
n/a
0
n/a
78,200
n/a
90,821
n/a
64,750
70,452
n/a
0
n/a
n/a
n/a
n/a
n/a
1,146,709
Total
Total
$
1,549,639
3,138,427
735,801
1,196,121
987,149
913,163
493,088
785,382
410,242
243,652
660,402
879,068
574,395
850,229
340,496
924,577
265,784
n/a
19,997
1,689,860
n/a
725,569
6,036,993
11,346,048
ANSELL LIMITED ANNUAL REPORT 2016Executive Director
Magnus R Nicolin8
Other Executives
Neil Salmon
Peter Dobbelsteijn
Steve Genzer
Jeyan Heper
Joe Kubicek
Anthony Lopez
Mike Mattos9
Mark Nicholls
Scott Corriveau9
Peter Carroll10
1,030,000
983,750
490,738
456,500
385,114
411,588
412,699
399,950
277,446
145,759
378,250
340,000
376,565
365,750
226,625
373,854
175,000
n/a
97,850
388,550
n/a
38,350
600,000
745,800
196,682
206,736
124,141
147,595
119,443
106,041
127,512
40,674
125,120
133,008
108,985
133,041
n/a
139,312
56,000
n/a
31,312
127,596
n/a
-
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
$
95,156
97,596
108,450
17,790
458,240
99,427
2,222
0
26,736
8,267
10,137
8,720
134,899
86,211
396
0
563
n/a
0
n/a
313
896,988
836,799
1,215,312
Total Executive Remuneration
3,850,287
3,904,051
1,489,195
1,779,803
positions in the jurisdictions in which the executives are based. As a result, whilst the CEO increase was 4 per cent with effect from 1 October 2015, increases for Other
Executives’ pay were either lower or higher depending upon their benchmarking of similar positions as well as by reference to their prior year performance against
their personal objectives in their respective role.
2. STI represents amounts payable under the 2016 Short Term Incentive Plan, which are significantly below the 2015 outcomes – refer section 7.2.
3.
Other includes benefits such as motor vehicle, executive expatriation and relocation allowances, executive insurance, expat tax equalisation payments and other
amounts. Significant year over year variations in other benefits are detailed in Section 5: Realised Remuneration.
4. Retirement Benefits includes retirement benefits earned by the individual in FY16.
5.
Share based payment expenses includes amounts provided in respect of the Group’s shared based LTI Plan. Primarily as a result of the cancellation of the FY14 grant,
the Group reversed previously expensed amounts relating to these plans. As such, these reversals are being reflected in the negative amounts shown above in
6.
Cash based payment expenses includes amounts provided in respect of the Groups cash based LTI Plans. The negative amounts shown are due to the same factors
accordance with accounting requirements.
as note 5 above (share based LTI plans).
10.2 Executive statutory remuneration
Table 10.2 (a)
Short-term Employee Benefits
Post-employment Benefits
Long-term Employee Benefits
FY
$
$
Base Salary1
STI Payment2
Other Benefits3
Retirement Plan
Benefits4
$
Termination
Benefits
$
367,842
369,385
76,718
107,645
38,456
55,858
74,818
89,137
27,500
0
66,475
56,016
70,693
81,679
54,858
62,030
34,221
n/a
35,199
79,690
n/a
9,168
846,780
910,608
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2,480
0
0
n/a
9,032
0
n/a
648,628
11,512
648,628
Share based
payment
expense LTI5
$
(1,042,559)
941,896
(154,445)
345,123
(56,182)
94,630
(105,021)
82,150
(24,611)
24,611
66,110
293,162
(101,208)
78,860
60,914
296,970
0
n/a
(109,066)
84,758
n/a
14,555
(1,466,068)
2,256,715
Cash
LTI6
$
0
0
(132,987)
62,327
(55,725)
104,065
(110,609)
108,104
(24,341)
24,341
(63,890)
48,162
(106,360)
104,688
(69,527)
52,411
0
n/a
(114,782)
112,278
n/a
14,555
(678,221)
630,931
Restricted
Share
Award
SIP7
$
499,200
n/a
150,645
n/a
93,105
n/a
99,536
n/a
0
n/a
78,200
n/a
90,821
n/a
64,750
n/a
0
n/a
70,452
n/a
n/a
n/a
1,146,709
n/a
Total
Total
$
1,549,639
3,138,427
735,801
1,196,121
987,149
913,163
493,088
785,382
410,242
243,652
660,402
879,068
574,395
850,229
340,496
924,577
265,784
n/a
19,997
1,689,860
n/a
725,569
6,036,993
11,346,048
1.
Base salary includes the base salary earned by the individual in FY16. The increases in base salary for Executives are based on external benchmarking of similar
7. SIP represents the value of the restricted shares awarded under the one-off Special Incentive Plan – please refer section 7.4
8.
During FY15, the Board announced that the CEO Mr Magnus Nicolin, would relocate his primary place of residence from the USA to Belgium. Mr Nicolin would
continue to spend the same or similar amounts of time in the USA as he did previously, but the move to Brussels makes it far easier for him to travel to the Asia
Pacific region where the majority of our plants and supply chain activities are located. As part of this announcement, the Board advised that a maximum
relocation cash cost of $300,000 would be incurred by Ansell and that this cost had previously been accrued for. These costs were paid in FY15 and FY16 and have
not been included in the remuneration report above.
9.
Mr Corriveau and Mr Mattos left the Group during FY16 on 30 September 2015 and 31 January 2016 respectively. Termination benefits paid related to unused leave
entitlements accrued during the year. Other benefits payable to Mr Corriveau for FY15, included tax equalisation payments made as part of his tenure in Brussels.
10. Mr Carroll left the Group during FY15.
79
ANSELL LIMITED ANNUAL REPORT 2016Remuneration Report continued
10.3 Equity instruments
The below table details the movement in the number of options, Performance Rights (PRs) and PSRs over ordinary shares of Ansell
Limited by the CEO and Other Executives during FY16.
Table 10.3 (a)
Options1
Other Executives
Peter Carroll
2016
2015
Scott Corriveau
2016
2015
PRs
Executive Director
Magnus R Nicolin
2016
2015
(27,943)
Neil Salmon
2016
2015
Joe Kubicek
2016
2015
Mike Mattos
2016
2015
PSRs
Executive Director
Magnus R Nicolin
2016
2015
Other Executives
Neil Salmon
2016
2015
Peter Dobbelsteijn
2016
2015
Steve Genzer
2016
2015
80
Held at
1 July
or Date
Appointed
PRs/PSRs
Granted During
the Year2
Options
Exercised/PRs/
PSRs Vested
During the Year
Options/PRs/
PSRs Lapsed/
Forfeited During
the Year
Held at
30 June
n/a
6,368
n/a
5,000
104,357
129,730
15,213
30,130
26,981
26,981
26,981
26,981
n/a
0
n/a
0
0
0
0
0
0
0
0
0
n/a
(6,368)
n/a
(5,000)
(104,357)
(25,373)
(15,213)
(14,917)
(26,981)
0
(26,981)
0
n/a
0
n/a
0
0
0
0
0
0
0
0
0
701,136
475,150
209,244
225,986
67,830
27,962
64,624
38,422
69,966
47,012
36,532
39,868
19,942
26,202
21,434
22,954
(129,540)
(345,610)
0
0
0
0
(27,962)
0
(10,151)
(28,271)
0
0
(12,702)
(34,310)
0
0
n/a
0
n/a
0
0
104,357
0
15,213
0
26,981
0
26,981
435,230
701,136
76,400
67,830
46,144
64,624
44,388
69,966
ANSELL LIMITED ANNUAL REPORT 2016Other Executives
Jeyan Heper
2016
2015
Joe Kubicek
2016
2015
Anthony Lopez
2016
2015
Mark Nicholls
2016
2015
Scott Corriveau
2016
2015
Mike Mattos
2016
2015
Peter Carroll
2016
2015
Held at
1 July
or Date
Appointed
PRs/PSRs
Granted During
the Year2
Options
Exercised/PRs/
PSRs Vested
During the Year
Options/PRs/
PSRs Lapsed/
Forfeited During
the Year
Held at
30 June
18,424
0
38,495
17,957
68,544
47,402
6,644
n/a
73,509
50,555
41,891
19,541
34,386
34,386
13,104
18,424
17,924
20,538
19,558
21,142
6,394
n/a
0
22,954
0
22,350
0
0
0
0
0
0
0
0
(17,957)
0
(12,898)
(34,504)
0
0
n/a
0
0
n/a
(13,679)
(50,266)
0
0
0
(6,443)
0
0
(30,095)
0
(27,943)
0
31,528
18,424
38,462
38,495
40,700
68,544
13,038
n/a
9,564
73,509
11,796
41,891
0
34,386
1. Options awarded to former Executive KMP’s Mr Carroll and Mr Corriveau, expired on 2nd November 2014. No further Options are in existence.
2. PSR’s were granted during FY16 pursuant to the FY16 LTIP. The Fair Values and factors and assumptions used in determining the fair values of the PSRs
applicable for FY16 are summarised in Table 10.3 (b) below. Awards that do not vest as at vesting date automatically lapse. Awards that do not vest as
at Vesting date automatically lapse.
Table 10.3 (b) – PSR Fair Values at Grant Date
FY14 LTIp PSRs
FY15 LTIp PSRs
FY16 LTIp PSRs
Grant Date
Vesting Date
Cancelled
14/8/2014
13/8/2015
Cancelled
30/6/2017
30/6/2018
Fair Value
Cancelled
A$17.73
A$18.53
Share Price on
Grant Date
Risk Free
Interest Rate
Dividend Yield
Cancelled
Cancelled
Cancelled
A$19.05
A$20.20
n/a
n/a
2.5%
3.0%
81
ANSELL LIMITED ANNUAL REPORT 2016Remuneration Report continued
11. Glossary
Beta means a beta which is calculated in Australian dollars against peer Australian-dollar denominated companies in the ASX/S&P 100.
Board means the Board of Directors of Ansell Limited.
Capex is an abbreviation for Capital Expenditure and means the Payments for property, plant, equipment (PP&E) and intangibles less the
proceeds from sale of PP&E.
Constant Currency – Constant currency financial reporting is supplemental information. It is provided using the best estimate of the
prior year results translated at the foreign currency exchange rates applicable to the current period and compared to the financial
performance for the current year. As such, it is unaudited non-IFRS financial information and uses only a convenience translation. The
Board believes that this provides greater insight into the financial performance of the business by the removal of year on year foreign
exchange volatility. The principles of constant currency reporting and its implementation are subject to oversight by the Audit and
Compliance Committee of the Board.
CAGR means Compound Average Growth Rate which as used in this document measures the average year-over-year growth rate of a
financial metric over the specified time period.
Corporations Act means the Corporations Act 2001 (Cth).
EBIT means all profits of Ansell before taking into account interest payments and income taxes.
EBITDA means EBIT before Depreciation and Amortisation.
EMEA means Europe, Middle East and Africa.
EPS or Earnings per Share (including Basic Earnings per share) means the portion of Ansell’s profit which is allocated to the average
number of ordinary fully paid shares on issue for the year.
82
ANSELL LIMITED ANNUAL REPORT 2016Executive or Group Executive in this report refers to the CEO and Other Executive KMP.
Free Cash flow for FY15 and FY16 means EBITDA less changes in working capital (excluding foreign currency impacts and net of
acquisitions and disposals), Capex, Tax payments, Net interest adjusted for non-recurring items such as major restructuring outlays, sale
of businesses or other major assets.
FY15 means the 2015 financial year commencing on 1 July 2014 and ended on 30 June 2015.
FY16 means the 2016 financial year commencing on 1 July 2015 and ended on 30 June 2016.
FY17 means the 2017 financial year commencing on 1 July 2016 and ended on 30 June 2017.
Group or Ansell Group means Ansell Ltd and its subsidiaries.
HRC means the Human Resources Committee of the Board.
KMP means the Key Management Personnel of Ansell, which comprises all Directors (executive and non-executive) and those executives
who have authority and responsibility for planning, directing and controlling the activities of the Group.
Long Term Incentive (LTI) means the Ansell Long Term Incentive Plan which is subject to the rules of the Ansell Long Term Incentive Plan
as periodically approved by the Board.
Net Operating Assets means the Net Assets as per the Consolidated Balance Sheet less Net Interest Bearing Debt.
Net Interest Bearing Debt as per Note 10 to the Financial Statements.
Operating Cash Flow as referred to in the Chairman’s introductory letter to the Remuneration Report, means Net cash provided by
operating activities per the Consolidated Statement of Cash Flows adjusted for Capex (see above), Interest received and paid (Net Interest).
Other Executives means the group of people who are KMP but are not Non-Executive Directors or the CEO.
83
ANSELL LIMITED ANNUAL REPORT 2016Remuneration Report continued
PSRs means Performance Share Rights.
Profit Attributable means those profits of the Company which are available to the shareholders for distribution after deduction of tax
and certain other provisions.
ROCE means Return on Capital Employed which is defined as EBIT divided by average Net Operating Assets.
ROE means Return on Equity which is the amount of net income returned as a percentage of average shareholders’ equity.
Short Term Incentive Plan (STI) or (STIP) means the Ansell Short Term Incentive Plan which is subject to the rules of the Ansell Short
Term Incentive Plan as periodically approved by the Board.
TSR means Total Shareholder Return which means the total financial return which an investor receives from holding shares in Ansell,
assuming dividends paid are reinvested in Ansell shares.
TSR (A$) means Total Shareholder Return calculated in Australian dollars.
Working Capital is the balance as defined in Note 7 to the Financial Statements.
Underlying means, in connection with Underlying EPS and Underlying Profit Attributable, the respective EPS or Profit Attributable
which is adjusted to exclude certain items (which might relate to one-off or extraordinary items). The exclusion of any items from the
underlying result is approved by Ansell’s Board. The underlying measure may also be used in connection with the calculation of the
vesting of the LTI Plan.
WACC means the Weighted Average Cost of Capital which is a calculation of the average cost to Ansell of the debt and equity capital
employed in the business.
84
ANSELL LIMITED ANNUAL REPORT 2016Consolidated Income Statement
of Ansell Limited and Subsidiaries for the year ended 30 June 2016
Revenue
Sales revenue
Expenses
Cost of goods sold including restructuring and asset impairments
Distribution
Selling, general and administration including restructuring and asset impairments
Total expenses, excluding financing costs
Net financing costs
Profit before income tax
Income tax expense
Profit for the period
Profit for the period is attributable to:
Ansell Limited shareholders
Non-controlling interests
Profit for the period
Earnings Per Share is based on profit attributable to Ansell Limited shareholders:
Basic Earnings Per Share
Diluted Earnings Per Share
The above Consolidated Income Statement should be read in conjunction with the accompanying notes.
Note
2016
US$m
2015
US$m
3(b)
3(b)
3(a)
4(a)
1,572.8
1,645.1
(926.5)
(69.8)
(339.8)
(949.0)
(73.9)
(376.9)
(1,336.1)
(1,399.8)
(22.2)
214.5
(52.6)
161.9
159.1
2.8
161.9
(21.5)
223.8
(34.7)
189.1
187.5
1.6
189.1
2016
US cents
2015
US cents
5
5
105.1
104.5
122.5
121.4
85
ANSELL LIMITED ANNUAL REPORT 2016Consolidated Statement of Comprehensive Income
of Ansell Limited and Subsidiaries for the year ended 30 June 2016
Profit for the period
Other comprehensive income
Items that will not be reclassified to the Income Statement:
Retained earnings
2016
US$m
161.9
2015
US$m
189.1
Remeasurement of defined benefit superannuation/post retirement health benefit plans
(3.8)
(3.0)
Fair value reserve
Change in fair value of financial assets
Tax benefit (expense) on items that will not be reclassified to the Income Statement
Total items that will not be reclassified to the Income Statement
Items that may subsequently be reclassified to the Income Statement:
Foreign currency translation reserve
–
1.3
(2.5)
7.6
(1.5)
3.1
Net exchange differences on translation of foreign subsidiaries
(30.9)
(115.4)
Hedging reserve
Net movement in effective hedges for year
Tax (expense)/benefit on items that may subsequently be reclassified to the Income Statement
Total items that may subsequently be reclassified to the Income Statement
Other comprehensive income for the period, net of tax
Total comprehensive income for the period
Attributable to:
Ansell Limited shareholders
Non-controlling interests
Total comprehensive income for the period
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
(6.4)
(0.5)
(37.8)
(40.3)
121.6
119.7
1.9
121.6
5.3
0.2
(109.9)
(106.8)
82.3
82.2
0.1
82.3
86
ANSELL LIMITED ANNUAL REPORT 2016Consolidated Balance Sheet
of Ansell Limited and Subsidiaries for the year ended 30 June 2016
Current assets
Cash and cash equivalents
Trade and other receivables
Derivative financial instruments
Inventories
Other current assets
Total current assets
Non-current assets
Trade and other receivables
Derivative financial instruments
Property, plant and equipment
Intangible assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Derivative financial instruments
Interest bearing liabilities
Provisions
Current tax liabilities
Total current liabilities
Non-current liabilities
Trade and other payables
Derivative financial instruments
Interest bearing liabilities
Provisions
Retirement benefit obligations
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained profits/(accumulated losses)
Total equity attributable to Ansell Limited shareholders
Non-controlling interests
Total equity
The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.
Note
6(a)
7(a)
15(c)
7(b)
15(c)
8
9
4(b)
7(c)
15(d)
10
11
15(d)
10
11
12
4(c)
2016
US$m
272.7
223.5
8.2
322.8
19.4
846.6
2.6
4.9
245.0
1,077.3
90.6
23.6
1,444.0
2,290.6
235.2
5.8
5.0
48.8
19.9
314.7
4.1
5.0
2015
US$m
281.4
241.3
18.6
339.6
16.6
897.5
2.8
3.1
231.2
1,116.0
101.2
24.6
1,478.9
2,376.4
229.7
13.8
7.1
62.8
15.7
329.1
7.1
2.1
686.6
734.0
10.6
23.1
89.5
20.3
839.2
1,153.9
1,136.7
14.7
18.1
84.4
20.3
880.7
1,209.8
1,166.6
13(a)
1,146.9
1,229.6
(88.3)
62.4
(49.3)
(28.5)
1,121.0
1,151.8
15.7
14.8
1,136.7
1,166.6
87
ANSELL LIMITED ANNUAL REPORT 2016
Consolidated Statement of Changes in Equity
of Ansell Limited and Subsidiaries for the year ended 30 June 2016
Total equity
Balance at the beginning of the financial year
Total comprehensive income for the period attributable to:
Ansell Limited shareholders
Non-controlling interests
Transactions with owners attributable to Ansell Limited shareholders:
Shares issued under Dividend Reinvestment Plan
Conversion of Executive Share Plan shares to fully paid and exercise of options
Share buy-back
Share-based payments reserve
Dividends
Transactions with owners attributable to non-controlling interests:
Dividends
Total equity at the end of the financial year
Share capital
Balance at the beginning of the financial year
Transactions with owners as owners:
Shares issued under Dividend Reinvestment Plan
Conversion of Executive Share Plan shares to fully paid and exercise of options
Share buy-back
Balance at the end of the financial year
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
2016
US$m
2015
US$m
1,166.6
1,140.5
119.7
1.9
5.4
–
(88.1)
(2.2)
(65.6)
82.2
0.1
2.3
0.5
–
3.8
(62.0)
(1.0)
(0.8)
1,136.7
1,166.6
1,229.6
1,226.8
5.4
–
(88.1)
2.3
0.5
–
1,146.9
1,229.6
88
ANSELL LIMITED ANNUAL REPORT 2016Consolidated Statement of Changes in Equity continued
of Ansell Limited and Subsidiaries for the year ended 30 June 2016
Reserves
Share-based payments reserve
Balance at the beginning of the financial year
Transactions with owners as owners:
(Credit)/charge to the Income Statement
Balance at the end of the financial year
Hedging reserve
Balance at the beginning of the financial year
Comprehensive income for the period:
Net movement in effective hedges
Balance at the end of the financial year
General reserve
Balance at the beginning of the financial year
Transfer from retained profits/(accumulated losses)
Balance at the end of the financial year
Foreign currency translation reserve
Balance at the beginning of the financial year
Comprehensive income for the period:
Net exchange differences on translation of financial statements of foreign subsidiaries
Balance at the end of the financial year
Transactions with non-controlling interests
Balance at the beginning of the financial year
Transactions with owners as owners:
Acquisition of non-controlling interests
Balance at the end of the financial year
Fair value reserve
Balance at the beginning of the financial year
Comprehensive income for the period:
Change in fair value of financial assets
Balance at the end of the financial year
Total reserves at the end of the financial year
Retained profits/(accumulated losses)
Balance at the beginning of the financial year
Transfer to reserves
Comprehensive income for the period:
Net profit attributable to Ansell Limited shareholders
Remeasurement of defined benefit superannuation/post retirement health benefit plans net of tax
Dividends paid
Balance at the end of the financial year
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
2016
US$m
2015
US$m
45.2
41.4
(2.2)
43.0
3.8
45.2
4.7
(6.9)
(2.2)
11.6
0.1
11.7
(0.8)
5.5
4.7
10.8
0.8
11.6
(102.5)
11.4
(30.0)
(132.5)
(113.9)
(102.5)
(10.9)
(10.9)
–
(10.9)
–
(10.9)
2.6
–
2.6
(2.5)
5.1
2.6
(88.3)
(49.3)
(28.5)
(0.1)
159.1
(2.5)
(65.6)
62.4
(151.2)
(0.8)
187.5
(2.0)
(62.0)
(28.5)
89
ANSELL LIMITED ANNUAL REPORT 2016Consolidated Statement of Cash Flows
of Ansell Limited and Subsidiaries for the year ended 30 June 2016
Cash flows related to operating activities
Receipts from customers
Payments to suppliers and employees
Net receipts from operations
Income taxes paid
Net cash provided by operating activities
Cash flows related to investing activities
Payments for businesses, net of cash acquired
Payments for property, plant, equipment and intangible assets
Proceeds from the sale of a subsidiary
Proceeds from the sale of property, plant and equipment
Proceeds from the sale of other investments
Net cash used in investing activities
Cash flows related to financing activities
Proceeds from borrowings
Repayments of borrowings
Net (repayments of)/ proceeds from borrowings
Proceeds from issues of shares
Payments for share buy-back
Dividends paid – Ansell Limited shareholders
Dividends paid – non-controlling interests
Interest received
Interest and financing costs paid
Net cash used in financing activities
Net increase/decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on the balances of cash and cash equivalents
held in foreign currencies at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Note
2016
US$m
2015
US$m
1,583.4
(1,321.3)
262.1
(29.8)
232.3
1,685.4
(1,463.2)
222.2
(22.7)
199.5
6(b)
–
(67.2)
41.5
2.0
–
(23.7)
44.8
(81.0)
(36.2)
–
(88.1)
(60.2)
(1.0)
4.1
(26.4)
(207.8)
0.8
281.4
(9.5)
272.7
(107.2)
(84.3)
–
22.5
11.6
(157.4)
131.3
(92.8)
38.5
0.5
–
(59.7)
(0.8)
5.2
(26.5)
(42.8)
(0.7)
324.2
(42.1)
281.4
3(a)
6(a)
90
ANSELL LIMITED ANNUAL REPORT 2016Notes to the Financial Statements
1. Summary of Significant Accounting Policies
General
Ansell Limited (‘the Company’) is a Company domiciled in Australia. The Company and its subsidiaries (together referred to as the
‘Group’) is a global leader in protection solutions. The Group is a for-profit entity and designs, develops and manufactures a wide
range of hand and arm protection solutions, clothing and condoms and is organised around four Global Business Units (‘GBUs’):
• Industrial GBU: multi-use hand, foot and body protection solutions for industrial worker environments and specialty applications.
• Medical GBU: surgical and examination gloves, healthcare safety devices and active infection prevention products for healthcare
professionals and patients.
• Single Use GBU: single-use industrial application gloves.
• Sexual Wellness GBU: condoms, lubricants and devices.
Statement of compliance
The Financial Report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards
adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The Financial Report of the Group also
complies with International Financial Reporting Standards and interpretations adopted by the International Accounting Standards Board.
The consolidated financial statements were authorised for issue by the Board of Directors on 15 August 2016.
Basis of accounting
The Financial Report is presented in United States dollars and on the historical cost basis except that assets and liabilities in respect
of derivative financial instruments and available-for-sale financial assets are stated at their fair value.
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 dated
31 March 2016 and in accordance with the Instrument, amounts in the Financial Report and Directors’ Report have been rounded
off to the nearest hundred thousand dollars, unless otherwise stated.
A summary of the significant accounting policies of the Group are disclosed below. The accounting policies have been applied
consistently by all entities in the Group.
There has been no changes to the Group’s accounting policies during the financial year.
New accounting standards issued but not yet applied
IFRS 15/AASB 15 Revenue from Contracts with Customers establishes a comprehensive framework for determining whether, how much,
and when revenue is recognised. It replaces existing revenue recognition guidance, including IAS 18/AASB 118 Revenue, IAS 11/AASB 111
Construction contracts, and IFRIC 13/Australian Interpretations 13 Customer Loyalty Programmes. IFRS 15/AASB 15 is effective for
annual reporting periods beginning on or after 1 January 2018, with early adoption permitted. The Group is assessing the potential
impact on its consolidated financial statements resulting from the application of IFRS 15/AASB 15.
IFRS 16/AASB 16 Leases removes the classification of leases as either operating leases or finance leases. IFRS 16/AASB 16 introduces
a single lessee accounting model and requires a lessee to recognise a right-of-use asset representing its right to use the underlying
leased asset and a lease liability representing its obligations to make lease payments. Short-term leases (less than 12 months) and
leases of low-value assets (such as personal computers) are exempt from the lease accounting requirements. There are also changes in
accounting over the life of the lease. In particular, companies will now recognise a front-loaded pattern of expense for most leases, even
when they pay constant annual rentals. IFRS 16/AASB 16 is effective for annual reporting periods beginning on or after 1 January 2019,
with early adoption permitted. The Group is assessing the potential impact on its consolidated financial statements resulting from the
application of IFRS 16/AASB 16.
Principles of consolidation
The financial statements of the Group include the Company being the parent entity, and its subsidiaries.
The financial statements incorporate the assets and liabilities of all subsidiaries of the Company as at balance date and the results
of all subsidiaries for the year then ended. Subsidiaries are entities controlled by the Company. Control exists when the Company is
exposed to, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. Results of subsidiaries are included in the Income Statement from the date on which control commences and
continue to be included until the date control ceases to exist.
The effects of all transactions between entities in the Group are eliminated in full. Non-controlling interests in the results and equity
of subsidiaries are shown separately in the Income Statement and Balance Sheet respectively.
91
ANSELL LIMITED ANNUAL REPORT 2016Notes to the Financial Statements continued
1. Summary of Significant Accounting Policies continued
Foreign currency
Transactions
Transactions in foreign currencies are recorded at the rate of exchange ruling on the date of each transaction. At balance date, amounts
payable and receivable in foreign currencies are converted at the rates of exchange ruling at that date with any resultant gain or loss
recognised in the Income Statement except when deferred in equity as qualifying cash flow hedges or qualifying net investment hedges.
Translation
The financial statements of overseas subsidiaries are maintained in their functional currencies and are converted to the Group’s
presentation currency as follows:
• assets and liabilities are translated at the rate of exchange as at balance date;
• income statements are translated at average exchange rates for the reporting period which approximate the rates ruling
at the dates of the transactions; and
• all resultant exchange differences are recorded in the foreign currency translation reserve.
On consolidation, exchange differences arising from borrowings and any other currency instruments designated as hedges of investments
in overseas subsidiaries, are transferred to the foreign currency translation reserve on a net of tax basis where applicable. When an
overseas subsidiary is sold the cumulative amount recognised in the foreign currency translation reserve relating to the subsidiary
is recognised in the Income Statement as part of the gain or loss on sale.
Recoverable amount of non-current assets valued on the cost basis
The carrying amounts of non-current assets valued on the cost basis are reviewed to determine whether they are in excess of their
recoverable amount at balance date. An impairment loss is recognised whenever the carrying amount of a non-current asset exceeds its
recoverable amount. The impairment loss is recognised as an expense in the Income Statement in the reporting period in which it occurs.
The recoverable amount of a non-current asset is the higher of an asset’s fair value less costs to sell and value in use. In assessing value
in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash
flows, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
Impairment losses, other than those in respect of goodwill, are reversed through the Income Statement when there is an indication
that the impairment loss may no longer exist.
Accounting estimates and judgements
The preparation of consolidated financial statements in conformity with Australian generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during
the reported period. The estimates and associated assumptions are based on historical experience and various factors that are believed
to be reasonable under the circumstances and are reviewed on an ongoing basis. Actual results could differ from these estimates.
Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period,
or in the period of the revision and future periods if the revision affects both current and future periods.
92
ANSELL LIMITED ANNUAL REPORT 2016The key estimates and assumptions that may have a significant impact on the financial statements are as follows:
Business combinations
A business acquisition requires judgement with respect to the determination of the fair value of purchase consideration given and the
fair value of identifiable assets and liabilities acquired. Many of these assets and liabilities either given up or acquired are not normally
traded in active markets, and thus management judgement is required in determining their fair values. Management judgement is also
required in ascertaining the assets and liabilities, which should be recognised, in particular with respect to intangible assets such as
brand names, customer relationships, patents and trademarks and contingent liabilities.
Current asset provisions
In the course of normal trading activities, management uses its judgement in establishing the net realisable value of various elements
of working capital – principally inventory and accounts receivable. Provisions are established for obsolete or slow moving inventories
and bad or doubtful receivables. The actual level of obsolete or slow moving inventories and bad or doubtful receivables in future
periods may be different from the provisions established and any such differences would affect future earnings of the Group.
Property, plant and equipment and definite life intangible assets
The Group’s property, plant and equipment and intangible assets, other than indefinite life intangible assets, are depreciated/amortised
on a straight-line basis over their useful economic lives. Management reviews the appropriateness of useful economic lives of assets at
least annually and any changes to useful economic lives may affect prospective depreciation rates and asset carrying values.
Impairment of goodwill and brand names
The Group tests whether goodwill and brand names are impaired at least annually, or more frequently if events or changes in circumstances
indicate that their carrying values may be impaired, in accordance with the accounting policy on intangible assets. The policy requires the
use of assumptions in assessing the carrying values of CGUs. These assumptions are detailed in Note 9.
Income tax
The reviews undertaken to determine whether a deferred tax asset should be recognised in jurisdictions where unbooked tax losses
exist and in assessing the recoverability of booked tax losses, involve the use of judgement and estimates in assessing the projected
future trading performances of relevant operations. These judgements and estimates are subject to risk and uncertainty hence there
is a possibility that changes in circumstances will alter expectations, which may impact on the amount of the deferred tax asset in
respect of tax losses recognised on the Balance Sheet. In such circumstances the carrying amount of this asset may require adjustment
resulting in a corresponding credit or charge to the Income Statement.
Defined benefit superannuation plans
Various actuarial assumptions are utilised in the determination of the Group’s defined benefit superannuation plan obligations.
These assumptions are detailed in Note 12.
Other accounting policies
Other accounting policies that summarise the measurement basis used and are relevant to an understanding of the financial
statements are provided throughout the notes to the financial statements.
93
ANSELL LIMITED ANNUAL REPORT 2016Notes to the Financial Statements continued
2. Segment Information
The Group comprises the following main operating segments:
Industrial GBU: multi-use hand, foot and body protection solutions for industrial worker environments and specialty applications.
Medical GBU: surgical and examination gloves, healthcare safety devices and active infection prevention products for healthcare
professionals and patients.
Single Use GBU: single use industrial application gloves.
Sexual Wellness GBU: condoms, lubricants and devices.
Operating Segments
Industrial
US$m
Medical
US$m
Single Use
US$m
Sexual
Wellness
US$m
Total
Segments
US$m
Corporate
US$m
Total
Group
US$m
654.8
396.3
301.7
220.0
1,572.8
–
1,572.8
89.0
–
52.3
–
64.6
–
31.0
236.9
–
–
Profit before income tax expense
89.0
52.3
64.6
31.0
236.9
2016
Sales revenue
Profit/(loss) before restructuring and
asset impairments, net financing costs
and income tax expense
Gain on sale of a subsidiary
Net financing costs
Income tax expense
Profit after income tax
Non-controlling interests
Net profit attributable to
Ansell Limited shareholders
Segment assets
Segment liabilities
Segment depreciation and amortisation
Segment capital expenditure
2015
Sales revenue
Profit/(loss) before restructuring and
asset impairments, net financing costs
and income tax expense
Restructuring and asset impairments
Net financing costs
Income tax expense
Profit after income tax
Non-controlling interests
Net profit attributable to
Ansell Limited shareholders
Segment assets
Segment liabilities
Segment depreciation and amortisation
Segment capital expenditure
94
(8.3)
8.1
(22.2)
(22.4)
228.6
8.1
(22.2)
214.5
(52.6)
161.9
(2.8)
159.1
(5.8)
15.2
(21.5)
(12.1)
243.3
2.0
(21.5)
223.8
(34.7)
189.1
(1.6)
187.5
704.8
107.6
16.1
25.2
468.7
78.7
8.9
22.5
474.8
28.0
4.2
3.5
200.6
45.8
3.9
8.8
1,848.9
260.1
33.1
60.0
441.7
893.8
4.9
7.2
2,290.6
1,153.9
38.0
67.2
Operating Segments
Industrial
US$m
Medical
US$m
Single Use
US$m
Sexual
Wellness
US$m
Total
Segments
US$m
Corporate
US$m
Total
Group
US$m
668.5
447.2
312.4
217.0
1,645.1
–
1,645.1
92.7
(7.9)
70.6
(0.4)
59.7
(0.1)
26.1
(4.8)
249.1
(13.2)
772.0
106.4
14.5
30.7
466.2
98.2
8.6
20.9
475.0
26.3
4.8
6.9
199.8
1,913.0
45.0
3.9
12.8
275.9
31.8
71.3
463.4
933.9
3.6
13.0
2,376.4
1,209.8
35.4
84.3
Profit before income tax expense
84.8
70.2
59.6
21.3
235.9
ANSELL LIMITED ANNUAL REPORT 2016Regional information
The allocation of operating revenue and operating results reflect the geographical Regions in which the products are sold to external
customers. Assets employed (excluding goodwill, brand names and other intangibles per Note 9 and Corporate Segment Assets) are allocated
to the geographical Regions in which the assets are located.
Asia Pacific: manufacturing facilities in Malaysia, Thailand, India, Sri Lanka, South Korea, China and Vietnam and sales activity.
Europe, the Middle East and Africa: manufacturing facilities in Lithuania and Portugal and sales activity.
Latin America and Caribbean: manufacturing facilities in Brazil and sales activity.
North America: manufacturing facilities in the USA and Mexico and sales activity.
Regions
Asia Pacific
Europe, the Middle East and Africa
Latin America and Caribbean
North America
Total Regions
Sales Revenue
Regional Assets
2016
US$m
2015
US$m
284.4
524.6
92.0
671.8
1,572.8
273.8
557.9
104.5
708.9
1,645.1
2016
US$m
376.4
187.8
49.4
213.2
826.8
2015
US$m
343.7
222.9
51.2
232.0
849.8
Country of domicile
The Company’s country of domicile is Australia. The operating revenue and assets employed for the Australian trading operations
(reported within the Asia Pacific Region) are as follows:
Operating revenue
Assets employed
3. Profit Before Income Tax
(a) Profit before income tax has been arrived at after charging/(crediting) the following items:
Interest expense
Other financing costs
Interest income
Net financing costs
Research and development costs expensed as incurred
Previously capitalised development costs written off
Research and development costs
Bad debts written off
Provision for impairment of trade debtors – recognised (excluding amount included in 3(b))
Net bad debts expense and provision for impairment of trade debtors
Wages and salaries
Increase in provision for employee entitlements
Defined contribution superannuation plan expense
Defined benefit superannuation plan expense
Equity settled share-based payments expense
Employee benefits expense
2016
US$m
110.6
47.6
2015
US$m
114.1
46.6
2016
US$m
2015
US$m
23.7
2.6
(4.1)
22.2
11.5
0.9
12.4
0.1
0.4
0.5
24.1
2.6
(5.2)
21.5
11.7
0.4
12.1
0.3
–
0.3
230.0
236.0
14.4
14.9
2.8
(2.2)
14.8
11.9
2.3
3.8
259.9
268.8
95
ANSELL LIMITED ANNUAL REPORT 2016Notes to the Financial Statements continued
3. Profit Before Income Tax continued
Net foreign exchange gain
(Profit)/loss on the sale of property, plant and equipment (excluding amount included in 3(b) below)
Gain on the sale of a subsidiary
Operating lease rentals
Write-down in value of inventories
(b) Restructuring and asset impairments
Cost of goods sold
Restructuring
Asset impairment – property, plant and equipment
Total restructuring and asset impairments in cost of goods sold
Selling, general and administration
Restructuring
Gain on the sale of property, plant and equipment
Asset impairment – other
Asset impairment – property, plant and equipment
Total restructuring and asset impairments in selling, general and administration
Total restructuring and asset impairments
2016
US$m
(0.7)
(1.1)
(8.1)
26.0
6.1
–
–
–
–
–
–
–
–
–
2015
US$m
(19.6)
0.2
–
27.2
4.0
1.2
4.0
5.2
10.0
(17.8)
0.5
0.1
(7.2)
(2.0)
(c) Recognition and measurement
Sales revenue
Sales revenue is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and allowances.
External sales are recognised when the significant risks and rewards of the ownership of the goods have been transferred to the buyer
and it can be measured reliably.
96
ANSELL LIMITED ANNUAL REPORT 20164. Income Tax
(a) Income tax expense
2016
US$m
2015
US$m
Prima facie income tax calculated at 30% (2015: 30%) on profit before income tax
64.4
67.1
Reduced taxation arising from:
Prior year over provision
Gain on sale of property, plant and equipment
Investment and export incentive allowances
Net lower overseas tax rates
Utilisation/recognition of previously unbooked tax losses
Other permanent differences
Income tax expense attributable to profit before income tax
Income tax expense attributable to profit before income tax is made up of:
Current year income tax
Deferred income tax attributable to:
Increase in deferred tax liability
Decrease in deferred tax asset
Income tax benefit/(expense) recognised in other comprehensive income
Actuarial gain/loss on defined benefit superannuation/post retirement health benefit plans
Change in fair value of available for sale financial assets
Movement in effective hedges for year
–
–
(3.5)
(0.5)
(7.3)
(0.5)
52.6
(1.6)
(4.4)
(2.6)
(4.8)
(15.5)
(3.5)
34.7
36.8
19.2
4.5
11.3
52.6
1.3
–
(0.5)
0.8
6.6
8.9
34.7
1.0
(2.5)
0.2
(1.3)
97
ANSELL LIMITED ANNUAL REPORT 2016Notes to the Financial Statements continued
4. Income Tax continued
(b) Deferred tax assets
Deferred tax assets arising from:
Deductible temporary differences
Accumulated tax losses
Deferred tax assets are attributable to the following:
Trading stock tax adjustments
Provisions
Accruals
Depreciation of plant and equipment and capital allowances
Amortisation of intangible assets
Accumulated tax losses
Total deferred tax assets
Details of the movement in the balance of deferred tax assets are as follows:
Balance at the beginning of the financial year
Over provision of prior year balance
Amount charged to the Income Statement
Amount charged/(credited) to other comprehensive income
Net exchange differences on translation of foreign subsidiaries
Balance at the end of the financial year
(c) Deferred tax liabilities
The tax effect of temporary differences that give rise to significant portions
of the provision for deferred income tax are presented below:
Depreciation on plant and equipment
Amortisation of intangible assets
Other
Total deferred tax liabilities
Details of the movement in the balance of deferred tax liabilities are as follows:
Balance at the beginning of the financial year
Over provision of prior year balance
Entities acquired
Amount charged to the Income Statement
Net exchange differences on translation of foreign subsidiaries
Balance at the end of the financial year
98
2016
US$m
2015
US$m
45.2
45.4
90.6
6.4
19.9
6.0
–
12.9
45.4
90.6
101.2
1.6
(11.3)
0.8
(1.7)
90.6
3.8
85.2
0.5
89.5
84.4
1.0
–
4.5
(0.4)
89.5
43.0
58.2
101.2
7.3
23.9
2.2
0.9
8.7
58.2
101.2
122.7
–
(8.9)
(1.7)
(10.9)
101.2
5.1
78.2
1.1
84.4
75.5
0.8
2.2
6.6
(0.7)
84.4
ANSELL LIMITED ANNUAL REPORT 2016(d) Recognition and measurement
Current tax
Income tax on the profit or loss for the financial year comprises current and deferred tax and is recognised in the Income Statement.
Current tax is the expected tax payable or receivable on taxable income for the financial year, using tax rates enacted or substantively
enacted at reporting date, and any adjustments to tax payable or receivable in respect of previous years.
Deferred tax
Deferred tax balances are determined using the Balance Sheet method which calculates temporary differences based on the carrying
amounts of an entity’s assets and liabilities in the Balance Sheet and their associated tax bases. The amount of deferred tax provided
is based on the expected manner of realisation of the asset or settlement of the liability, using tax rates enacted or substantively
enacted at reporting date. In jurisdictions where unbooked tax losses exist, regular reviews are undertaken of the past trading history
and projected future trading performance of the operations in these jurisdictions as part of the determination of the value of any
deferred tax asset that should be reflected in the accounts in respect of such losses. A deferred tax asset is recognised only to the
extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets
are reduced to the extent it is no longer probable that the related tax benefit will be realised.
The Group has not recognised the tax value of deferred tax assets in respect of trading tax losses of $14.3 million (2015: $21.0 million)
and $113.4 million of capital losses (2015: $118.4 million). Deferred tax assets in respect of these losses have not been recognised as it
is not probable that future taxable profits will be available against which these losses can be utilised.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive
income. In this case, the associated tax is also recognised in other comprehensive income.
5. Earnings Per Share
Earnings reconciliation
Profit for the period
Less profit for the period attributable to non-controlling interests
Basic earnings
Diluted earnings
Weighted average number of ordinary shares used as the denominator
Number of ordinary shares for basic Earnings Per Share
Effect of partly paid Executive Plan shares, Performance Rights (PRs)
and Performance Share Rights (PSRs)
Number of ordinary shares for diluted Earnings Per Share
Partly paid Executive Plan shares, PSRs and PRs have been included in diluted Earnings Per Share in
accordance with accounting standards.
Earnings Per Share
Basic Earnings Per Share
Diluted Earnings Per Share
2016
US$m
161.9
(2.8)
159.1
2015
US$m
189.1
(1.6)
187.5
159.1
187.5
Number of Shares (Millions)
151.4
153.1
0.8
152.2
1.3
154.4
US Cents
US Cents
105.1
104.5
122.5
121.4
99
ANSELL LIMITED ANNUAL REPORT 2016Notes to the Financial Statements continued
6. Cash and Cash Equivalents
(a) Cash and cash equivalents
Cash on hand
Cash at bank
Short-term deposits
Restricted deposits
Total cash and cash equivalents
2016
US$m
0.2
87.2
182.4
269.8
2.9
272.7
2015
US$m
0.2
85.9
192.3
278.4
3.0
281.4
(b) Reconciliation of net profit after tax to net cash flows from operations
Profit for the period
161.9
189.1
Add/(less) non-cash items:
Depreciation
Amortisation
Impairment – trade receivables
Share-based payments expense
Restructuring costs
Asset impairments
Add/(less) items classified as investing/financing activities:
Interest received
Interest and financing costs paid
Gain/loss on the sale of property, plant and equipment
Gain on the sale of a subsidiary
Net cash provided by operating activities before change in assets and liabilities
Change in assets and liabilities net of effect from acquisitions and disposals of businesses and subsidiaries:
Decrease in trade and other receivables
Decrease/(increase) in inventories
Increase in other assets
Decrease in trade and other payables
Decrease in provisions/other liabilities
Increase/(decrease) in retirement benefit obligations
Increase in provision for deferred income tax
Decrease in deferred tax assets
Increase/(decrease) in provision for income tax
Other non-cash items (including foreign currency impact)
Net cash provided by operating activities
29.0
9.0
0.4
(2.2)
–
–
(4.1)
26.4
(1.1)
(8.1)
211.2
14.3
0.7
(2.4)
–
(15.8)
1.4
6.6
10.3
5.5
0.5
28.3
7.1
0.5
3.8
11.2
4.1
(5.2)
26.5
(17.6)
–
247.8
29.0
(46.9)
(5.1)
(17.8)
(26.6)
(1.1)
7.5
12.3
(13.2)
13.6
232.3
199.5
(c) Recognition and measurement
Cash at bank and on deposit
Cash and cash equivalents includes cash on hand and at banks and investments in money market instruments, net of outstanding bank
overdrafts.
Restricted deposits
Restricted deposits represent cash set aside (under Court orders) to cover the provisions established to address any remaining liability
of members of the Group for claims arising with respect to the Accufix Pacing Lead (refer Note 11 Provisions – Other Provisions).
100
ANSELL LIMITED ANNUAL REPORT 20167. Working Capital
Working capital comprises:
Net trade receivables
Inventories
Trade payables
Total working capital
(a) Current trade and other receivables
Trade receivables
Allowance for impairment
Provision for rebates and allowances
Net trade receivables
Other amounts receivable
Total current trade and other receivables
Movements in the allowance for impairment of trade receivables:
Balance at the beginning of the financial year
Amounts charged to the Income Statement
Amounts utilised for intended purposes
Net exchange differences on translation of foreign subsidiaries
Balance at the end of the financial year
Ageing of trade receivables:
Within agreed terms
Past due 0 – 60 days
Past due 61 – 90 days
Past due 91 days or more
Total
(b) Inventories
Raw materials
Work in progress
Finished goods
Total inventories
Inventories recognised as an expense
2016
US$m
219.0
322.8
(199.9)
341.9
263.1
(8.2)
(35.9)
219.0
4.5
223.5
8.6
0.4
(0.4)
(0.4)
8.2
2015
US$m
230.9
339.6
(196.4)
374.1
273.8
(8.6)
(34.3)
230.9
10.4
241.3
11.1
0.5
(2.1)
(0.9)
8.6
Gross Trade Receivables
Allowance For Impairment
2016
US$m
2015
US$m
2016
US$m
2015
US$m
213.3
238.0
33.8
1.7
14.3
23.5
2.3
10.0
263.1
273.8
–
1.9
0.3
6.0
8.2
2016
US$m
40.1
19.0
263.7
322.8
883.8
–
0.4
0.3
7.9
8.6
2015
US$m
46.1
20.7
272.8
339.6
935.2
101
ANSELL LIMITED ANNUAL REPORT 2016Notes to the Financial Statements continued
7. Working Capital continued
(c) Current trade and other payables
Current
Trade payables
Other payables
Total current trade and other payables
2016
US$m
199.9
35.3
235.2
2015
US$m
196.4
33.3
229.7
(d) Recognition and measurement
Trade receivables
Trade receivables are carried at amounts due. Receivables that are not past due and not impaired are considered recoverable. Trade
receivables are recognised initially at the value of the invoice sent to the customer and subsequently at the amount considered recoverable.
Customer trading terms are generally between 30 – 60 days.
Allowance for impairment of trade receivables
The collectability of trade receivables is assessed continuously and at balance date specific allowances are made for any doubtful trade
receivables based on a review of all outstanding amounts at year end. Bad debts are written off during the year in which they are identified.
The following basis have been used to assess the allowance for doubtful trade receivables:
• individual account by account assessment based on past credit history;
• prior knowledge of debtor insolvency;
• high risk customers’ assessments based on continuous analysis of customers’ payment trends and monitoring of the
political and economic climates particularly for those customers who are located in emerging market countries; and
• customer accounts which have been referred to a collection agency.
Inventories
Inventories are valued at the lower of cost and net realisable value. The net realisable value of inventories is the estimated selling price
in the ordinary course of business less estimated costs to sell. The cost of inventories is based on the first-in, first-out principle. In the
case of manufactured inventories and work in progress, cost includes an appropriate share of the production overheads as applicable.
Allowances are established for obsolete or slow moving inventories taking into consideration the ageing or seasonal profile of
inventories, the nature of inventories, discontinued lines, sell through history and forecast sales.
Trade and other payables
Trade payables are normally settled within 30 days from invoice date or within the agreed payment terms with the supplier.
102
ANSELL LIMITED ANNUAL REPORT 20168. Property, Plant and Equipment
Year ended 30 June 2016
Cost
Accumulated depreciation
Movement
Balance at the beginning of the financial year
Additions
Disposal of entities
Disposals/scrappings
Transfer from buildings and plant under construction
Depreciation
Net exchange differences on translation of foreign subsidiaries
Balance at the end of the financial year
Year ended 30 June 2015
Cost
Accumulated depreciation
Movement
Freehold
Land
US$m
Freehold
Buildings
US$m
Leasehold
Land and
Buildings
US$m
Plant and
Equipment
US$m
Buildings and
Plant Under
Construction
US$m
Total
US$m
9.3
–
9.3
10.2
–
–
(0.5)
–
–
(0.4)
9.3
53.6
(32.4)
21.2
22.9
0.2
–
(0.5)
1.4
(2.2)
(0.6)
21.2
64.2
(18.1)
46.1
451.2
(311.0)
140.2
28.2
606.5
–
(361.5)
28.2
245.0
34.4
136.8
–
(0.2)
(0.3)
14.1
(1.8)
(0.1)
46.1
6.4
(1.5)
(0.2)
29.6
(25.0)
(5.9)
140.2
26.9
231.2
48.6
55.2
(0.3)
–
(45.1)
(2.0)
(1.5)
–
–
(29.0)
(1.9)
(8.9)
28.2
245.0
Freehold
Land
US$m
Freehold
Buildings
US$m
Leasehold
Land and
Buildings
US$m
Plant and
Equipment
US$m
Buildings and
Plant Under
Construction
US$m
Total
US$m
10.2
–
10.2
54.3
(31.4)
22.9
49.9
(15.5)
34.4
444.6
(307.8)
136.8
26.9
585.9
–
(354.7)
26.9
231.2
Balance at the beginning of the financial year
11.2
28.0
35.2
115.3
16.4
206.1
Additions
Additions through businesses/entities acquired
Disposals/scrappings
Impairment charge to the Income Statement
Transfer from buildings and plant under construction
Depreciation
Net exchange differences on translation of foreign subsidiaries
Balance at the end of the financial year
–
–
(0.2)
–
–
–
(0.8)
10.2
0.7
–
(0.5)
(2.5)
1.1
(1.6)
(2.3)
1.8
–
(3.2)
–
5.3
(1.7)
(3.0)
18.0
12.5
(0.8)
(1.6)
26.7
(25.0)
(8.3)
45.9
–
–
–
(33.1)
66.4
12.5
(4.7)
(4.1)
–
–
(28.3)
(2.3)
(16.7)
22.9
34.4
136.8
26.9
231.2
103
ANSELL LIMITED ANNUAL REPORT 2016Notes to the Financial Statements continued
8. Property, Plant and Equipment continued
Recognition and measurement
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes expenditure
that is directly attributable to the acquisition of the item. Subsequent costs are included in the asset’s carrying amount or recognised
as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and that the cost of the item can be measured reliably.
Depreciation
Depreciation is generally calculated on a straight-line basis so as to write off the net cost of each item of property, plant and
equipment, excluding land, over its estimated useful life.
The expected useful lives in the current and prior years are as follows:
Freehold buildings
20 – 40 years
Leasehold buildings The lesser of 50 years or life of lease
Plant and equipment 3 – 20 years
Depreciation and amortisation rates and methods are reviewed annually for appropriateness.
9. Intangible Assets
Year ended 30 June 2016
Cost
Goodwill
US$m
Brand
Names
US$m
Development
Costs
US$m
Software
Costs
US$m
Other
Intangibles
US$m
Total
US$m
Balance at the beginning of the financial year
999.0
245.6
Additions
Additions through entities acquired/completion
of provisional accounting
Amounts related to businesses disposed of
Previously capitalised costs charged to the
Income Statement
Net exchange differences on translation of
foreign subsidiaries
Balance at the end of the financial year
–
–
(10.4)
(13.3)
11.3
(8.4)
–
–
(16.4)
(5.2)
958.9
243.3
Provision for amortisation and impairment
Balance at the beginning of the financial year
140.1
Amortisation
Amounts related to businesses disposed of
Net exchange differences on translation of
foreign subsidiaries
Balance at the end of the financial year
–
–
(0.6)
139.5
64.5
0.1
–
(3.8)
60.8
Written down value at the end of the financial year
819.4
182.5
22.5
4.0
–
–
(0.9)
(0.6)
25.0
8.3
4.2
–
(0.2)
12.3
12.7
63.6
8.0
–
–
–
(1.7)
69.9
25.0
3.2
–
(0.8)
27.4
42.5
25.7
1,356.4
–
–
(1.7)
–
–
12.0
0.9
(23.4)
(0.9)
(23.9)
24.0
1,321.1
2.5
1.5
(0.2)
–
3.8
240.4
9.0
(0.2)
(5.4)
243.8
20.2
1,077.3
104
ANSELL LIMITED ANNUAL REPORT 2016Year ended 30 June 2015
Cost
Goodwill
US$m
Brand
Names
US$m
Development
Costs
US$m
Software
Costs
US$m
Other
Intangibles
US$m
Total
US$m
Balance at the beginning of the financial year
940.6
262.8
Additions
Additions through entities acquired/completion
of provisional accounting
Previously capitalised costs charged to the
Income Statement
Net exchange differences on translation of
foreign subsidiaries
Balance at the end of the financial year
Provision for amortisation and impairment
Balance at the beginning of the financial year
Amortisation
Net exchange differences on translation of
foreign subsidiaries
Balance at the end of the financial year
–
95.1
–
–
–
–
(36.7)
(17.2)
999.0
245.6
140.2
–
(0.1)
140.1
70.0
0.1
(5.6)
64.5
Written down value at the end of the financial year
858.9
181.1
22.1
5.6
–
(0.4)
(4.8)
22.5
6.9
3.3
(1.9)
8.3
14.2
62.6
12.3
–
–
(11.3)
63.6
28.1
2.2
(5.3)
25.0
38.6
Carrying amount of goodwill and brand names allocated to each of the CGUs:
Industrial
Medical
Sexual Wellness
Single Use
25.9
1,314.0
–
17.9
0.2
95.3
–
(0.4)
(0.4)
(70.4)
25.7
1,356.4
1.1
1.5
(0.1)
2.5
246.3
7.1
(13.0)
240.4
23.2
1,116.0
2016
US$m
2015
US$m
314.1
256.3
67.7
348.9
257.3
69.9
363.8
363.9
1,001.9
1,040.0
Recognition and measurement
Goodwill and brand names
Goodwill on acquisition is measured at cost being the excess of the cost of the acquisition over the fair value of the Group’s share of the
net identifiable assets acquired. Goodwill is not amortised. Brand names are initially recorded at cost based on independent valuation at
acquisition date, which equates to fair value. Based on the nature of the major brand names acquired by the Group, which are international
brands that benefit from competitive advantages due to technology, innovation and product development, it is not possible to make an
arbitrary assessment that these brand names have a finite useful life, quantifiable in terms of years except where such brands are subject
to licensing agreements covering a finite period or where management intends to phase out the use of a brand. Brand names subject
to a licensing arrangement are amortised over the life of the arrangement. Brand names that are intended to be phased out are
amortised over the period management anticipated that this process will take. The amortisation of brand names, development
and software costs and other intangibles are recognised in selling, general and administration costs in the Income Statement.
No amortisation is provided against the carrying value of those brand names not subject to a licensing arrangement or phase
out process as the Group believe that the lives of such assets are indefinite at this point.
105
ANSELL LIMITED ANNUAL REPORT 2016Notes to the Financial Statements continued
9. Intangible Assets continued
Development and software costs
Capitalised development and software costs are amortised over a three to 10 year period.
Other intangible assets
Other intangible assets that are acquired by the Group and have finite useful lives are initially recorded at cost based on independent
valuation at acquisition date, which equates to fair value. These assets include patents which are amortised on a straight-line basis over
the legal life of the patent and customer and distributor relationships, which are amortised on a straight-line basis over their estimated
useful lives, which range from 6 to 20 years.
Impairment
Goodwill and indefinite life intangible assets are tested for impairment at least annually. The carrying amount of other non-current
assets, excluding any defined benefit fund assets, deferred tax assets and financial assets are reviewed at each reporting date to
determine whether there are any indicators of impairment. If such indicators exist, the asset is tested for impairment by comparing
its recoverable amount to its carrying amount. The recoverable amount of an asset is determined as the higher of fair value less
costs of disposal and value in use.
The recoverable amount is estimated for each individual asset or where it is not possible to estimate for individual assets, it is
estimated for the CGU to which the asset belongs. A CGU is the smallest identifiable group of assets that generate cash inflows
largely independent of the cash inflows of other assets or group of assets with each CGU being no larger than a reportable segment.
The recoverable amount of the CGUs has been determined based on a value in use calculation utilising five-year cash flow projections.
The base for each CGU is the budget for the 2017 financial year as approved by the Board. Specific growth and after tax WACC rates
have been used for each CGU for forecasts for financial years ending June 2018 to 2021 and for the terminal year. Factors such as
country risk, forecasting risk and country specific growth and tax rates have been taken into consideration in arriving at these rates.
Cash flows used for value in use calculations are estimated for the asset in its present condition and therefore do not include cash
inflows or outflows that improve or enhance the asset’s performance or that may arise from future restructuring.
The post-tax discount rate used for a value in use calculation is derived based on an independent external assessment of the Group’s
post-tax WACC in conjunction with risk specific factors to the countries in which the CGU operates.
The average annual sales revenue growth rates applied in the discounted cash flow models range between 2 per cent and 4 per cent
(2015: 2 per cent and 7 per cent) while the growth in the terminal year was between 2 per cent and 3 per cent (2015: between 2 per cent
and 3 per cent). The post-tax discount rates applied range between 8 per cent and 9 per cent (2015: 8 per cent and 9 per cent).
An impairment loss is recognised whenever the carrying amount of an asset or its CGU exceeds its recoverable amount. Impairment
losses are recognised in the Income Statement as part of cost of goods sold and selling, general and administration expenses.
Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated
to CGUs and then to reduce the carrying amount of the other assets in the unit.
An impairment loss is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after
the impairment loss was recognised. An impairment loss in respect of goodwill or other indefinite life intangible assets is not reversed.
An impairment loss in other circumstances is reversed only to the extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
106
ANSELL LIMITED ANNUAL REPORT 201610. Interest Bearing Liabilities
Current
Loans repayable in:
Canadian dollars
Indian rupees
United States dollars
Total current
Non-current
Loans repayable in:
Euros
United States dollars
United Kingdom pounds
Total non-current
Total interest bearing liabilities
2016
US$m
2015
US$m
3.9
1.1
–
5.0
149.7
474.0
62.9
686.6
691.6
4.0
2.2
0.9
7.1
162.2
482.0
89.8
734.0
741.1
The Group has a syndicated borrowing facility of US$500 million (US$204 million and GBP£46.8 million drawn down at 30 June 2016)
maturing in June 2019, a Euro €50 million revolving credit facility (Euro €33 million drawn down at 30 June 2016) maturing in June 2018
and Senior Notes to the equivalent of US$383 million. The Senior Notes of US$270 million and Euro €101.5 million mature between June
2020 and April 2026. These facilities can be accessed by certain Australian, United States, United Kingdom and European subsidiaries.
There are a number of financial covenants attaching to the bank and note facilities including restrictions on the level of borrowings
of non-guarantor subsidiaries and ensuring certain financial ratios are maintained. If any breaches of these covenants occur all monies
outstanding under the facility become immediately due and payable. The Company is in compliance with all covenants. The interest
rates for these facilities are determined based on market rates at the time amounts are drawn down.
Net interest bearing debt
Current interest bearing liabilities
Non-current interest bearing liabilities
Cash at bank and short-term deposits
Net interest bearing debt
2016
US$m
5.0
686.6
(269.6)
422.0
2015
US$m
7.1
734.0
(278.2)
462.9
Recognition and measurement
Interest bearing liabilities are initially recognised at fair value less attributable transaction costs. Subsequent to initial recognition
interest bearing liabilities are stated at amortised cost. Any difference between the cost and redemption value is recognised in the
Income Statement over the period of the liability using the effective interest method.
107
ANSELL LIMITED ANNUAL REPORT 2016Notes to the Financial Statements continued
10. Interest Bearing Liabilities continued
The following table sets out details in respect of interest bearing liabilities at 30 June.
Effective
Interest Rate
% p.a.
Financial
Year of Debt
Maturity
2.19
1.08
1.11
1.20
9.90
1.96
2.01
2.83
2.91
3.83
3.43
3.21
3.87
2.26
1.91
2.01
1.82
3.37
3.52
1.74
2.62
3.91
4.70
4.05
4.68
2017
2018
2018
2018
2017
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2020
2022
2023
2020
2021
2024
2025
2026
2016
US$m
3.9
3.3
5.6
27.8
1.1
62.9
15.0
20.0
15.0
10.0
10.0
20.0
35.0
30.0
35.0
6.0
8.0
33.4
39.8
39.8
20.0
50.0
100.0
50.0
50.0
691.6
Nature and Currency of Borrowing
Bank loans
Canadian dollars
Euros
Euros
Euros
Indian rupees
United Kingdom pounds
United States dollars
United States dollars
United States dollars
United States dollars
United States dollars
United States dollars
United States dollars
United States dollars
United States dollars
United States dollars
United States dollars
Euros
Euros
Euros
United States dollars
United States dollars
United States dollars
United States dollars
United States dollars
Other loans
Total interest bearing liabilities
108
ANSELL LIMITED ANNUAL REPORT 2016Nature and Currency of Borrowing
Bank loans
Canadian dollars
Euros
Euros
Euros
Indian rupees
United Kingdom pounds
United States dollars
United States dollars
United States dollars
United States dollars
United States dollars
United States dollars
United States dollars
United States dollars
United States dollars
United States dollars
Euros
Euros
Euros
United States dollars
United States dollars
United States dollars
United States dollars
United States dollars
United States dollars
Other loans
Total interest bearing liabilities
Effective
Interest Rate
% p.a.
Financial
Year of Debt
Maturity
2.34
1.24
1.19
2.15
11.33
1.82
1.95
2.04
3.71
4.12
3.95
3.75
1.74
2.14
1.44
1.53
3.37
3.52
1.96
0.29
2.22
3.91
4.70
4.05
4.68
2016
2018
2018
2018
2016
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2020
2021
2022
2016
2020
2021
2024
2025
2026
2015
US$m
4.0
4.5
10.1
33.7
2.2
89.8
20.0
30.0
10.0
10.0
20.0
35.0
20.0
30.0
12.0
25.0
33.7
40.1
40.1
0.9
20.0
50.0
100.0
50.0
50.0
741.1
109
ANSELL LIMITED ANNUAL REPORT 2016Notes to the Financial Statements continued
11. Provisions
Current
Provision for employee entitlements
Provision for rationalisation and restructuring costs
Other provisions
Total current
Non-current
Provision for employee entitlements
Total non-current
Total provisions
Reconciliations of the carrying amount of each class of provision, except for employee entitlements, are
set out below:
Provision for rationalisation and restructuring
Balance at the beginning of the financial year
Amounts (credited)/charged to the Income Statement
Payments made
Net exchange differences on translation of foreign subsidiaries
Balance at the end of the financial year
Other provisions
Balance at the beginning of the financial year
Amounts utilised for intended purposes
Net exchange differences on translation of foreign subsidiaries
Balance at the end of the financial year
2016
US$m
2015
US$m
38.0
6.9
3.9
48.8
10.6
10.6
59.4
16.1
(2.4)
(6.4)
(0.4)
6.9
4.2
(0.2)
(0.1)
3.9
42.5
16.1
4.2
62.8
14.7
14.7
77.5
22.9
11.2
(17.6)
(0.4)
16.1
4.9
(0.1)
(0.6)
4.2
Recognition and measurement
A provision is recognised when there is a legal, equitable or constructive obligation as a result of a past event and it is probable
that a future sacrifice of economic benefits will be required to settle the obligation, the timing or amount of which is uncertain.
A provision is determined by discounting the expected future cash flows required to settle the obligation at a pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the liability.
Employee entitlements
Wages, salaries and annual leave
Liabilities for employee entitlements to wages, salaries and annual leave represent the amount which members of the Group have
a present obligation to pay resulting from employees’ services provided up to the balance date calculated at undiscounted amounts
based on expected wage and salary rates that will be paid when the obligation is settled and include related on-costs.
110
ANSELL LIMITED ANNUAL REPORT 2016Long service leave and post-retirement health benefits
The liability for employee entitlements to long service leave represents the present value of the estimated future cash outflows to be
made by the Group resulting from employees’ services provided in the current and prior periods. Post retirement health benefits are
subject to annual actuarial reviews.
The liability is calculated using estimated future increases in wage and salary rates including related on-costs, expected settlement
dates based on turnover history and medical cost trends and is discounted using corporate bond rates, which most closely match the
terms of maturity of the related liabilities.
Provision for rationalisation and restructuring costs
Provisions for rationalisation and restructuring are only recognised when a detailed plan has been approved and the restructuring has
either commenced or been publicly announced, or firm contracts related to the restructuring have been entered into. Costs related to
ongoing activities are not provided for.
Other provisions
Other provisions are recognised to cover specifically identified or obligated costs relating to Accufix Pacing Lead and insurance claims.
The Accufix Pacing Lead related expenses include costs of patients associated with the monitoring and (where appropriate) explantation
of the leads and for legal costs in defence of claims made in respect of the Accufix Pacing Lead. This provision is covered by cash
required to be set aside by the Courts (refer to Note 6 – Cash and Cash Equivalents – Restricted deposits).
12. Retirement Benefit Obligations
Certain members of the Group contribute to defined benefit and defined contribution superannuation plans maintained to provide
superannuation benefits for employees. They are obliged to contribute to the various superannuation plans as a consequence of
legislation or Trust Deeds. Legal enforceability is dependent on the terms of the legislation or the Trust Deeds.
(a) Defined benefit superannuation plans
Funding for post-employment benefits is carried out in accordance with the requirements of the Trust Deed for the Fund and the advice
of the Fund’s actuarial adviser. Plan assets are held in trusts, which are subject to supervision by prudential regulators. Responsibility for
governance of the plan, including investment decisions and plan rules, rests solely with the Board of trustees of the plan.
The amounts recognised in the Balance Sheet are determined as follows:
Present value of accumulated defined benefit obligations
Fair value of defined benefit plan assets
Net defined benefit liability recognised in the Balance Sheet
The principal actuarial assumptions used (expressed as a weighted average)
to calculate the net defined benefit liability were as follows:
Discount rate
Future salary increases
The movements in the net defined liability during the year are outlined below:
Balance at the beginning of the financial year
Actuarial losses1
Current service cost2
Net interest cost2
Employer contributions3
Net exchange differences on translation of foreign subsidiaries
Balance at the end of the financial year
1. Actuarial losses are recorded in other comprehensive income.
2016
US$m
62.6
(39.5)
23.1
2016
2.5%
2.3%
2016
US$m
18.1
3.8
2.5
0.3
(1.4)
(0.2)
2015
US$m
63.9
(45.8)
18.1
2015
3.3%
2.6%
2015
US$m
16.2
3.0
2.0
0.3
(1.6)
(1.8)
23.1
18.1
2. Current service cost and interest cost are recorded in the Consolidated Income Statement as part of selling, general and administration expenses.
3. Employer contributions are a cash payment and are recorded as part of payments to suppliers and employees in the Consolidated Statement of Cash Flows.
111
ANSELL LIMITED ANNUAL REPORT 2016Notes to the Financial Statements continued
12. Retirement Benefit Obligations continued
The Group expects $1.5 million in contributions to be paid to its defined benefit plans during the year ending 30 June 2017.
The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
2016
29%
63%
3%
5%
2015
38%
51%
2%
9%
2016
US$m
14.9
2015
US$m
11.9
2016
US$m
2015
US$m
1,146.9
1,229.6
–
–
1,146.9
1,229.6
Number of Shares
2016
2015
153,154,841
152,937,881
383,322
488,735
–
133,952
79,008
4,000
(6,366,083)
–
147,660,815
153,154,841
58,900
–
58,900
62,900
(4,000)
58,900
Equity securities
Fixed interest securities
Property
Other
(b) Defined contribution superannuation plans
Contributions to defined contribution plans during the year
13. Issued Capital and Reserves
(a) Issued capital
Issued capital
147,660,815 (2015: 153,154,841) ordinary shares, fully paid
58,900 (2015: 58,900) Executive Share Plan shares, paid to A 5 cents
Total issued capital
Movement in shares on issue
Ordinary shares
Balance at the beginning of the financial year
Issue of new shares under Dividend Reinvestment Plan
Conversion of PSRs, PRs and exercise of options
Conversion of Executive Share Plan shares to fully paid
Buy-back/cancellation of shares
Balance at the end of the financial year
Executive Share Plan shares
Balance at the beginning of the financial year
Conversion of Executive Share Plan shares to fully paid
Balance at the end of the financial year
112
ANSELL LIMITED ANNUAL REPORT 2016Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as
a deduction, net of tax where applicable, from the proceeds. When shares are repurchased, the amount of the consideration paid,
including directly attributable costs, is recognised as a deduction from equity.
Ordinary shares are fully paid and do not have authorised capital or par value. They carry one vote per share and the right to dividends
as declared from time to time. In the event of winding up of the Company ordinary shareholders rank after all other shareholders and
creditors and are fully entitled to any proceeds of liquidation.
Dividend Reinvestment Plan
The Company operates a Dividend Reinvestment Plan which is open to all shareholders. Under this plan 383,322 were issued at 30 June 2016
(2015: 133,952).
Executive Share Plan
During the financial year, nil Executive Plan shares were paid (2015: 4,000). Shares allotted under the Pacific Dunlop Executive Share Plan
(which was discontinued in 1996) have been paid to A$0.05 per share. Refer to Note 21 Ownership-based Remuneration Schemes for
details of the price payable for shares issued under this plan.
Options
As at the date of this Report, there are nil (2015: nil) unissued shares in the Company remain under option.
Share-based payments
The fair value of PRs granted to the Managing Director and Chief Executive Officer (CEO), Chief Financial Officer (CFO) and other Senior
Executives on their appointments and PSRs granted to the CEO, CFO and other Senior Executives under the Long Term Incentive Plans is
recognised as an employee benefit expense with a corresponding increase in equity over the vesting period.
(b) Nature and purpose of reserves
Share-based payments reserve
This reserve is used to record the value of equity benefits provided to employees as part of their remuneration under various
Long Term Incentive Plans. Refer to Note 21 Ownership-based Remuneration Schemes for further details of these plans.
Hedging reserve
This reserve records the portion of the unrealised gains or losses on cash flow hedges that are deemed to be effective.
General reserve
In certain jurisdictions regulatory requirements result in appropriations being made to a general reserve. The amount in the general
reserve is available for release to retained profits/(accumulated losses).
Foreign currency translation reserve
The foreign currency translation reserve records the foreign currency differences arising from the translation of the financial statements
of foreign subsidiaries where their functional currency is different to the presentation currency of the Group, as well as the translation
of borrowings or any other currency instruments that hedge the Company’s net investment in foreign subsidiaries. Refer to Note 1
Summary of Significant Accounting Policies.
Transactions with non-controlling interests
Represents the excess paid over the fair value of assets acquired as a result of the purchase of additional equity in non-wholly-owned
subsidiaries.
Fair value reserve
This reserve records the cumulative net change in the fair value of financial assets.
113
ANSELL LIMITED ANNUAL REPORT 2016Notes to the Financial Statements continued
14. Dividends Paid or Declared
Dividends paid
2016
US$m
2015
US$m
A final dividend of US 23.0 cents per share unfranked for the year ended 30 June 2015
(June 2014: US 22.0 cents unfranked) was paid on 10 September 2015 (2014: 24 September 2014)
34.0
31.6
An interim dividend of US 20.0 cents per share unfranked for the year ended 30 June 2016
(June 2015: US 20.0 cents unfranked) was paid on 10 March 2016 (2015: 11 March 2015)
31.6
65.6
30.4
62.0
Dividends declared
Since the end of the financial year the Directors have declared a final dividend of US 23.5 cents per share unfranked, to be paid
on 8 September 2016. The financial effect of this dividend has not been brought to account in the financial statements for the year
ended 30 June 2016 and will be recognised in subsequent financial reports.
Dividend franking account
The balance of the dividend franking account as at 30 June 2016 was nil (2015: nil).
15. Financial Risk Management
Ansell has a range of financial policies designed to mitigate any potential negative impact financial risks may have on the Group’s
results. The Group’s risk management is carried out by a central treasury department under polices approved by the Board of Directors.
Group treasury identifies, evaluates and hedges financial risks in close cooperation with the Group’s business units. The Board reviews
and approves the Group’s policies for managing each of these risks which are summarised below:
• Note 15(a) Foreign Exchange Risk;
• Note 15(b) Interest Rate Risk;
• Note 15(c) Credit Risk;
• Note 15(d) Liquidity Risk; and
• Note 15(e) Commodity Price Risk.
These risks affect the fair value measurements applied by the Group, which is discussed in Note 15(f).
(a) Foreign exchange risk
The Group is exposed to a number of foreign currencies, however, the predominant operating currency is the US dollar (US$). As such,
the Group has determined it appropriate to manage its foreign currency exposure against the US$. On this basis the Company manages
its transactional exposures as follows:
• Major revenue and cost currency net cash flow exposures are predominantly hedged back to US$ on a 12 to 18-month rolling basis so as
to reduce any significant adverse impact of exchange rate fluctuations on the Earnings Per Share guidance provided by the Company to
the market.
• The Group hedges up to 90 per cent of its estimated foreign currency exposure in respect of forecast purchases and sales.
The Group undertakes a range of derivative financial instruments, which can be defined in the following broad categories:
(i) Forward/future contracts
These transactions enable the Group to buy or sell specific amounts of foreign exchange or financial instruments at an agreed rate/price
at a specified future date. Maturities of these contracts are predominantly up to one year.
(ii) Foreign exchange options
This is a contract between two parties, which gives the buyer of the put or call option the right, but not the obligation, to transact at a
specified exchange rate. The Group typically uses a combination of bought and sold options, generally for zero cost, to hedge foreign
currency receivable and payable cash flows predominantly out to one year.
114
ANSELL LIMITED ANNUAL REPORT 2016As at 30 June the exposure to foreign currency risk from the Group’s primary trading currency (US$) is:
Net receivable/(payable) in non-US$ reporting entities
Net Receivable/(Payable)
2016
US$m
28.2
2015
US$m
(5.2)
The following table demonstrates the estimated sensitivity in the valuation of outstanding forward contracts and foreign exchange options
to a 10 per cent increase/decrease in the US$ exchange rate, with all other variables held constant, on profit for the period and equity.
With all other variables held constant:
10% increase in US$ exchange rate
10% decrease in US$ exchange rate
Profit for the Period
Equity
2016
US$m
2015
US$m
2016
US$m
2015
US$m
–
–
–
–
3.9
1.4
2.0
1.2
(b) Interest rate risk
The Group has a broad aim of managing interest rate risk on its debt by setting a minimum level of interest rate risk days (the weighted
average term of all interest rates in the portfolio) and a minimum fixed/floating interest rate ratio. The Group enters into interest rate
swaps that enables parties to swap interest rates (from or to a fixed or floating basis) for a defined period of time. Maturities of the
contracts are principally between one and 10 years.
Prior to the beginning of each year, the Group calculates its financial budget for the upcoming year using an updated set of financial
assumptions and management’s view of the marketplace in the coming financial year. The Group forecasts interest rates for all debt
repricing and new financing.
In this context interest rate risk is the risk that the Group will, as a result of adverse movements in interest rates, experience:
• unacceptable variations to the cost of debt in the review period for which the financial budget has been finalised; and
• unacceptable variations in interest expense from year to year.
It is recognised that movements in interest rates may be beneficial to the Group. Within the context of the Group’s operations, interest
rate exposure occurs from the amount of debt repricing that occurs in any one year.
The exposure to interest rate risk and the effective weighted average interest rate for interest bearing financial liabilities are set out below:
2016
Bank and other loans
Effect of interest rate swaps1
2015
Bank and other loans
Effect of interest rate swaps1
Weighted
Average Effective
Interest Rate %
Floating
US$m
1 Year
or Less
US$m
3.1
0.1
2.9
0.2
307.5
(108.0)
199.5
354.2
(148.6)
205.6
1.1
–
1.1
3.0
73.7
76.7
Fixed Interest Repricing in
1 to 2
Years
US$m
–
37.8
37.8
–
30.0
30.0
2 to 5
Years
US$m
103.4
110.0
213.4
53.7
85.0
138.7
> 5
Years
US$m
279.6
(39.8)
239.8
330.2
(40.1)
290.1
1. Represents notional amount of interest rate swaps.
A separate analysis of debt by currency can be found at Note 10 Interest Bearing Liabilities.
Total
US$m
691.6
–
691.6
741.1
–
741.1
115
ANSELL LIMITED ANNUAL REPORT 2016Notes to the Financial Statements continued
15. Financial Risk Management continued
The table below shows the effect on profit for the period and equity, if interest rates had been 10 per cent higher or lower with all other
variables held constant, taking into account all underlying exposures and related hedges. A sensitivity of 10 per cent has been selected
as this is considered reasonable given the current level of both short-term and long-term US$ interest rates.
With all other variables held constant:
If interest rates were 10% higher
If interest rates were 10% lower
Profit for the Period
Equity
2016
US$m
2015
US$m
2016
US$m
2015
US$m
–
–
–
–
0.4
(0.4)
0.6
(0.6)
(c) Credit risk
The credit risk on financial assets (excluding investments) of the Group, is the carrying amount, net of any provision for impairment,
which has been recognised on the Balance Sheet. The Group is exposed to credit risk from its operating activities, primarily from
customer receivables and from its financing activities, including deposits with financial institutions, foreign exchange transactions
and other financial instruments.
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group does not hold any collateral
over any of the receivables.
(i) Credit risk – cash and cash equivalents
The Group held cash and cash equivalents of $272.7 million at 30 June 2016 (2015: $281.4 million). The material cash and cash
equivalents are held with bank and financial institution counter parties, which are noted A3 or above by Moody’s Investors Service.
(ii) Credit risk trade receivables
Customer credit risk is managed by each Region subject to established policies, procedures and controls relating to customer credit
risk management. The Group trades with recognised, creditworthy third parties, and also minimises concentrations of credit risk by
undertaking transactions with a large number of customers and counterparties in various countries. Customers who wish to trade
on credit terms are subject to credit verification procedures including an assessment of their independent credit rating, financial
position, past experience and industry reputation. In addition receivable balances are monitored on an ongoing basis. The Group
is not materially exposed to any individual customer. An ageing of trade receivables past due is included in Note 7.
The Group’s maximum exposure to credit risk at the reporting date was:
Net trade receivables
Carrying Amount
2016
US$m
219.0
2015
US$m
230.9
Individual trade receivables which are known to be uncollectible are written off by reducing the carrying amount directly. Other trade
receivables are assessed where there is objective evidence that an impairment has been incurred but not yet recognised. For these
receivables, the estimated impairment losses are recognised as an allowance for impairment. Receivables for which an impairment
provision was recognised are written off against the provision where there is no expectation of recovering additional cash. Allowances
for impairment are recognised in the Income Statement. Subsequent recoveries of amounts previously written off are credited to the
Income Statement. Movements in the allowance for impairment and the ageing of trade receivables are included in Note 7.
116
ANSELL LIMITED ANNUAL REPORT 2016(iii) Credit risk by maturity
Based on the policy of not having material overnight exposures to an entity rated lower than A3 by Moody’s Investors Service, the
risk to the Group of counterparty default loss is not considered material. The following table indicates the value of amounts owing
by counterparties by maturity.
Foreign Exchange
Related Contracts
Interest Rate
Contracts
Foreign Exchange
Options
Total
2016
US$m
2015
US$m
2016
US$m
2015
US$m
2016
US$m
2015
US$m
2016
US$m
2015
US$m
1.3
0.4
–
–
–
1.7
7.8
1.5
–
–
–
9.3
–
–
–
0.7
4.2
4.9
–
–
–
0.5
2.6
3.1
3.1
3.4
–
–
–
5.1
4.2
–
–
–
4.4
3.8
–
0.7
4.2
12.9
5.7
–
0.5
2.6
6.5
9.3
13.1
21.7
Term:
0–6 months
6– 12 months
1– 2 years
2– 5 years
> 5 years
Total
(d) Liquidity risk
Liquidity risk is the risk of an unforeseen event or miscalculation in the required liquidity level that may result in the Group foregoing
investment opportunities or not being able to meet its obligations in an orderly manner, and therefore give rise to poor investment
income or to excessive borrowing costs.
The Group seeks to reduce the risk of:
(a) being forced to exit derivative financial instrument positions at below their real worth, or
(b) finding it cannot exit the position at all, due to lack of liquidity in the market by:
(i) dealing only in liquid contracts dealt by many counterparties;
(ii) dealing only in large, highly liquid and stable international markets; and
(iii) ensuring maturity risk days (the weighted average term of all maturity dates in the portfolio) remain within a specified range.
The following table sets out the contractual maturities of the Group’s financial liabilities into relevant maturity groupings based on
the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual
undiscounted cash flows comprising principal and interest repayments.
2016
Trade and other payables
Bank and other loans
Derivative financial instruments
Total
2015
Trade and other payables
Bank and other loans
Derivative financial instruments
Total
Carrying
Amount
Total
Contractual
Cash Flows
US$m
US$m
239.3
691.6
10.8
941.7
236.8
741.1
15.9
993.8
239.3
819.0
10.8
1,069.1
236.8
912.5
15.9
1,165.2
Contractual Maturity (Years)
0–1
US$m
235.2
27.4
5.8
268.4
229.7
52.6
13.8
296.1
1–2
US$m
4.1
59.1
1.9
65.1
7.1
22.8
0.1
30.0
2–5
US$m
–
419.8
3.1
422.9
–
463.0
2.0
465.0
> 5
US$m
–
312.7
–
312.7
–
374.1
–
374.1
117
ANSELL LIMITED ANNUAL REPORT 2016
Notes to the Financial Statements continued
15. Financial Risk Management continued
(e) Commodity price risk
Ansell is a significant buyer of natural rubber latex and a range of synthetic latex products. It purchases these products in a number of
countries in Asia, predominately Malaysia, Thailand and Sri Lanka. The Group is not active in hedging its purchases on rubber exchanges
but may, from time to time, buy from suppliers or brokers at a fixed price for up to several months into the future. To the extent that any
increases in these costs cannot be passed through to customers in a timely manner, the Group’s profit after income tax and
shareholder’s equity could be impacted adversely.
(f) Fair value
The Group considers that the carrying amount of recognised financial assets and financial liabilities approximates their net fair value.
Derivative financial instruments are carried at their fair value.
The following table displays:
(i) Nominal/face value
This is the contract’s value upon which a market rate is applied to produce a gain or loss which becomes the settlement value of the
derivative financial instrument.
(ii) Credit risk (derivative financial instruments)
This is the maximum exposure to the Group in the event that all counterparties who have amounts outstanding to the Group under
derivative financial instruments, fail to honor their side of the contracts. The Group’s exposure is almost entirely to banks. Amounts
owed by the Group under derivative financial instruments are not included.
(iii) Net fair value
This is the amount at which the instrument could be realised between willing parties in a normal market in other than a liquidation
or forced sale environment. The net amount owing to financial institutions under all derivative financial instruments would have been
$2.3 million (2015: $5.8 million) if all contracts were closed out on 30 June 2016.
Nominal/Face Value
Credit Risk
Net Fair Value
2016
US$m
2015
US$m
2016
US$m
2015
US$m
2016
US$m
2015
US$m
50.5
13.7
6.3
5.7
33.3
21.2
27.1
123.1
4.6
15.1
5.2
15.5
51.7
51.8
–
15.8
67.6
235.0
743.2
115.9
13.9
21.4
2.9
23.4
15.7
21.9
92.3
11.1
5.9
8.6
19.1
73.7
56.6
8.3
5.6
73.8
270.0
840.1
0.6
0.1
–
–
0.1
0.4
0.5
2.3
–
0.1
0.5
0.2
2.5
0.8
–
0.1
8.9
–
–
–
0.1
–
0.3
7.2
0.3
0.2
0.1
0.2
0.8
0.3
0.1
0.1
4.2
0.7
13.1
2.6
0.5
21.7
0.5
–
(0.2)
–
(0.2)
0.3
0.3
0.4
–
(0.2)
0.5
(0.5)
1.8
0.5
–
(0.8)
4.0
(4.1)
2.3
8.6
(0.1)
(3.0)
(0.1)
–
(0.1)
0.2
5.8
0.1
0.2
(0.1)
(1.0)
(4.3)
(0.6)
(0.1)
–
2.3
(2.0)
5.8
Foreign exchange contracts
Purchase/sale contracts
– United States dollars
– Australian dollars
– Malaysian ringgits
– Thai baht
– Sri Lankan rupees
– Euros
– Other currencies
Foreign exchange options
– Euros/United States dollars
– Australian dollars/United States dollars
– Canadian dollars/United States dollars
– United Kingdom pounds/United States dollars
– United States dollars/Mexican peso
– United States dollars/Malaysian ringgits
– United States dollars/Thai baht
– United States dollars/Sri Lankan rupees
– Other currencies
Interest rate contracts
Interest rate swaps
– Euros
– United States dollars
Total
118
ANSELL LIMITED ANNUAL REPORT 2016(iv) Fair value hierarchy
The table below analyses financial assets and financial liabilities carried at fair value, including their levels in the fair value hierarchy
as well as the valuation method. It does not include information for financial assets and financial liabilities not measured at fair value
if the carrying amount is a reasonable approximation of fair value.
The different valuation methods have been defined as follows:
• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices); and
• Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The Group currently holds only Level 2 derivative financial instruments. In order to determine the fair value of the financial instruments,
management used valuation techniques in which all significant inputs were based on observable market data.
Derivative financial assets
Derivative financial liabilities
Level 2
2016
US$m
13.1
10.8
2015
US$m
21.7
15.9
(g) Recognition and measurement
Derivatives
The Group uses derivative financial instruments, principally foreign exchange and interest rate related, to reduce the exposure to
foreign exchange rate and interest rate movements.
The Group has adopted certain principles in relation to derivative financial instruments:
• derivatives may be used to hedge underlying business exposures of the Group. Trading in derivatives is not undertaken;
• derivatives acquired must be able to be recorded in the Group’s treasury management systems, which contain extensive internal
controls; and
• the Group predominantly does not deal with counterparties rated lower than A3 by Moody’s Investors Service.
The Group follows the same credit policies, legal processes, monitoring of market and operational risks in the area of derivative
financial instruments, as it does in relation to other financial assets and liabilities on the Balance Sheet.
On a continuing basis, the Group monitors its future exposures and on some occasions hedges all or part of these exposures. The transactions
which may be covered are future net cash flows of overseas subsidiaries, future foreign exchange requirements and interest rate positions.
These exposures are then monitored and may be modified from time to time. The foreign exchange hedge instruments are predominantly
up to 12 months’ duration and are used to hedge operational transactions the Group expects to occur in this time frame. From time
to time minor mismatches occur in the forward book, however, these mismatches are managed under guidelines, limits and internal
controls. Interest rate derivative instruments can be for periods up to 10 years as the critical terms of the instruments are matched
to the underlying borrowings.
Derivative financial instruments are recognised initially at fair value and subsequently remeasured to their fair value at each reporting
date. The fair value of forward exchange contracts, foreign exchange options and interest rate swap contracts is determined by
reference to current market rates for these instruments.
The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument and
continues to satisfy the conditions for hedge accounting, and if so, the nature of the item being hedged. The Group designates certain
derivatives as either; (1) hedges of the fair value of recognised assets or liabilities (fair value hedges); or (2) hedges of highly probable
forecast transactions (cash flow hedges).
119
ANSELL LIMITED ANNUAL REPORT 2016Notes to the Financial Statements continued
15. Financial Risk Management continued
The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its
risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at
hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue
to be highly effective in offsetting changes in fair values or cash flows of hedged items.
Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the Income Statement,
together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in
equity in the hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in the Income Statement.
Gains or losses that are recognised in the hedging reserve are transferred to the Income Statement in the periods when the hedged
item will affect profit or loss. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset
or a non-financial liability, the gains or losses previously deferred in equity are transferred from equity and included in the measurement
of the initial cost or carrying amount of the asset or liability.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer meets the
conditions for hedge accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised in equity
remains in equity until the forecasted transaction is ultimately recognised in the Income Statement. When a hedged transaction is no
longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the Income Statement.
Derivatives that 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.
Hedge Effectiveness
The Group determines its economic exposure to unexpected movements in foreign currency rates and interest rates and ensures
the hedging instruments entered into satisfactorily mitigate these risks. The Group ensures the changes in the fair value of the
hedging instruments are highly correlated to the change in the fair value of the underlying hedged item and are therefore effective.
Potential sources of ineffectiveness include but are not limited to:
• the Group no longer having the economic exposure rendering the hedge instrument ineffective;
• hedging instrument expires or is sold, terminated or exercised; and
• changes in counterparty credit status.
16. Expenditure Commitments
(a) Capital expenditure commitments
Contracted but not provided for in the financial statements:
Plant and equipment
Payable within one year
(b) Operating lease commitments
Future operating lease commitments not provided for in the financial statements and payable:
Within one year
One year or later and no later than five years
Later than five years
2016
US$m
2015
US$m
7.9
7.9
7.9
8.7
20.2
2.2
31.1
4.3
4.3
4.3
6.7
18.5
6.0
31.2
The Group leases property under operating leases expiring from one to 15 years. Leases generally provide the Group with a right of
renewal at which time all terms are renegotiated. Operating lease commitments refer to future undiscounted minimum rentals payable
under non-cancellable operating leases not included within this Financial Report. Operating lease payments are recognised as an
expense in the Income Statement on a straight-line basis over the lease term.
120
ANSELL LIMITED ANNUAL REPORT 201617. Particulars Relating to Subsidiaries
Ansell Limited
Ansell Healthcare Japan Co. Ltd.
BNG Battery Technologies Pty. Ltd.
Corrvas Insurance Pty. Ltd.
Dunlop Olympic Manufacturing Pty. Ltd.
FGDP Pty. Ltd.
Nucleus Ltd.
Lifetec Project Pty. Ltd.
Medical TPLC Pty. Ltd.
N&T Pty. Ltd.
Nucleus Trading Pte. Ltd.
THLD Ltd.
TNC Holdings Pte. Ltd.
TPLC Pty. Ltd.
Societe de Management Financier S.A.
Olympic General Products Pty. Ltd.
Pacific Dunlop Finance Pty. Ltd.
Pacific Dunlop Holdings (China) Co. Ltd.
Ansell (Shanghai) Commercial and Trading Co. Ltd.
P.D. Holdings Pty. Ltd.
P.D. International Pty. Ltd.
Ansell Canada Inc.
Ansell Commercial Mexico S.A. de C.V.
Ansell Global Trading Center (Malaysia) Sdn. Bhd.
Ansell Lanka (Pvt.) Ltd.
Ansell (Middle East) DMCC
Ansell Perry de Mexico S.A. de C.V.
Ansell Protective Solutions Singapore Pte. Ltd.
Ansell Services (Asia) Sdn. Bhd.
Ansell Ambi Sdn. Bhd.
Ansell (Kedah) Sdn. Bhd.
Ansell (Kulim) Sdn. Bhd.
Ansell N.P. Sdn. Bhd.
Ansell Malaysia Sdn. Bhd.
Ansell Shah Alam Sdn. Bhd.
Hércules Equipamentos de Protecao Ltda.
Ansell Textiles Lanka (Pvt.) Ltd.
Ansell (Thailand) Ltd.
Ansell US Group Holdings Pty. Ltd.
Ansell US Group Holdings (USA) LLC
Ansell (USA) Inc.
Ansell Brazil LTDA
Country of Incorporation
Beneficial Interest
2016
%
2015
%
Australia
Japan*
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Singapore*
Australia
Singapore*
Australia
France*
Australia
Australia
China*
China*
Australia
Australia
Canada*
Mexico*
Malaysia*
Sri Lanka*
United Arab Emirates*
Mexico*
Singapore*
Malaysia*
Malaysia*
Malaysia*
Malaysia*
Malaysia*
Malaysia*
Malaysia*
Brazil
Sri Lanka*
Thailand*
Australia
United States*
United States*
Brazil*
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
75
75
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
75
75
100
100
100
100
100
100
100
100
121
ANSELL LIMITED ANNUAL REPORT 2016Notes to the Financial Statements continued
17. Particulars Relating to Subsidiaries continued
Ansell Edmont Industrial de Mexico S.A. de C.V.
Pacific Dunlop Holdings (USA) LLC.
Barriersafe Solutions International Inc.
Microflex Corporation
Ansell Healthcare Products LLC.
Ansell Sandel Medical Solutions LLC.
Ansell Hawkeye Inc.
Pacific Chloride Inc.
Pacific Dunlop Holdings Inc.
TPLC Holdings Inc.
Accufix Research Institute Inc.
Cotac Corporation
Pacific Dunlop Finance Company Inc.
Comercializadora Ansell Chile Limitada
Corrvas Insurance (Singapore) Pte. Ltd.
Fabrica de Artefatos de Latex Blowtex Ltda.
Medical Telectronics N.V.
Pacific Dunlop Holdings (Europe) Ltd.
Ansell Healthcare Europe N.V.
Ansell GmbH
Ansell Germany GmbH
Ansell Italy Srl
Ansell Medikal Urunler Ithalat Ihracat Uretim ve Ticaret A.S.
Ansell Norway AS
Ansell Protective Solutions AB
Ansell Protective Solutions Lithuania UAB
Ansell Rus LLC
Ansell S.A.
Ansell SW Europe SAS
Ansell Spain SL (Sociedad de Responsabilidad Limitada)
Comasec SAS
Ampelos International Malaysia
Ansell Industrial and Specialty Gloves Malaysia Sdn. Bhd.
Comasec Holdings Ltd.
Marigold Industrial Ltd.
Ansell Portugal – Industrial Gloves, Sociedade Unipessoal, Lda
Unimil Sp. z o.o.
Ansell UK Limited
Ansell Korea Co. Ltd.
Ansell Vina Corporation
Ansell Microgard Ltd
Ansell Xiamen Limited
122
Country of Incorporation
Beneficial Interest
2016
%
2015
%
Mexico*
United States*
United States*
United States*
United States*
United States*
United States*
United States*
United States*
United States*
United States*
United States*
United States*
Chile*
Singapore*
Brazil*
Netherlands Antilles*
United Kingdom*
Belgium*
Germany*
Germany*
Italy*
Turkey*
Norway*
Sweden*
Lithuania*
Russia*
France*
France*
Spain*
France*
Malaysia*
Malaysia*
United Kingdom*
United Kingdom*
Portugal*
Poland*
United Kingdom*
South Korea*
Vietnam*
United Kingdom*
China*
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
ANSELL LIMITED ANNUAL REPORT 2016
Ansell Microgard Xiamen Limited
Pacific Dunlop Holdings (Singapore) Pte. Ltd.
JK Ansell Ltd.
Ansell (Hong Kong) Limited.
PDOCB Pty. Ltd.
Ansell Medical Products Pvt. Ltd.
Suretex Ltd.
Latex Investments Ltd.
Suretex Prophylactics (India) Ltd.
STX Prophylactics S.A. (Pty.) Ltd.
Wuhan Jissbon Sanitary Products Company Ltd.
Guangzhou Kangwei Trading Co Ltd
Shanghai Feidun Trading Company Ltd.
Shenyang Yipeng Trading Company Ltd.
PD Licensing Pty. Ltd.
Siteprints Pty. Ltd.
S.T.P. (Hong Kong) Ltd.
Pacific Dunlop Holdings N.V.
Pacific Dunlop (Netherlands) B.V.
The Distribution Group Holdings Pty. Ltd.
The Distribution Group Pty. Ltd.
The Distribution Trust
Xelo Pty. Ltd.
Xelo Sacof Pty. Ltd.
Country of Incorporation
China*
Singapore*
India*
Hong Kong*
Australia
India*
Thailand*
Mauritius*
India*
South Africa*
China*
China*
China*
China*
Australia
Australia
Hong Kong*
Netherlands Antilles*
Netherlands*
Australia
Australia
Australia
Australia
Australia
Beneficial Interest
2016
%
100
100
50
100
100
100
100
100
100
100
2015
%
100
100
50
100
100
100
100
100
100
100
90(a)
90(a)
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100(b)
100(b)
100
100
100
100
100
100
* Subsidiaries incorporated outside Australia carry on business in those countries.
(a) Owned 49.2 per cent by P.D. International Pty. Ltd. and 40.8 per cent by Pacific Dunlop Holdings (China) Co. Ltd.
(b) The trustee of The Distribution Trust is The Distribution Group Pty. Ltd. The beneficiary of the trust is Ansell Limited.
The following subsidiaries were liquidated or merged with another subsidiary during the year:
• Ativ Pac Pty Ltd
• Cliburn Investments Pty Ltd
• Dexboy International Pty Ltd
• PSL Industries Pty Ltd
• Pacific Dunlop Linings Pty Ltd
• Ansell Medical Sdn Bhd
• Ansell Specialty Markets Participacoes Ltda
• Ansell Protective Products LLC
• Marigold Industrial GmbH
• Micoguard Deutschland GmbH
• PD Shared Services Pty Ltd
• PD Shared Services Holdings Pty Ltd
• Union Knitting Mills Pty Ltd
123
ANSELL LIMITED ANNUAL REPORT 2016Notes to the Financial Statements continued
18. Acquisition of and Disposal Subsidiaries and Businesses
18(a) Acquisitions
Hands International
The acquisition accounting for Hands International, acquired effective 1 November 2014, was completed and resulted in an increase
of $0.2 million to previously reported goodwill.
Microgard Ltd
The acquisition accounting for Microgard Ltd, acquired effective 1 May 2015 was completed and resulted in a reduction of previously
reported goodwill of $10.7 million principally due to the recognition of brand names totaling $11.3 million.
18(b) Disposals
Onguard Industries Inc
Effective 29 April 2016 the Group disposed of its interest in Onguard Industries Inc for $42.1 million.
Recognition and measurement
Business combinations
The Group accounts for business combinations using the acquisition method. Identifiable assets acquired and liabilities and contingent
liabilities assumed are measured at fair value. Any excess of the cost of acquisition over the fair values of the net identifiable assets
acquired is recognised as goodwill. Transaction costs are expensed as incurred unless related to the issue of debt or equity securities.
19. Parent Entity Disclosures
As at the end of and throughout the financial year ending 30 June 2016, the parent company of the Group was Ansell Limited.
Result of the parent entity
Profit for the period
Other comprehensive income
Total comprehensive income for the period
Financial position of the parent entity at year end
Current assets
Total assets
Current liabilities
Total liabilities
Total equity of the parent entity comprising:
Issued capital
Reserves
Retained profits
Total equity
2016
US$m
68.3
(5.9)
62.4
653.1
2,245.1
1,024.5
1,027.8
2015
US$m
108.7
9.1
117.8
664.0
2,304.3
956.0
954.4
1,146.9
1,229.6
(289.7)
360.1
(237.2)
357.5
1,217.3
1,349.9
The Group has a net current asset position of $528.8 million (2015: $568.4 million) which the parent company controls. As at 30 June
2016, the parent company has a net current liability position of $371.4 million (2015: $292.0 million). The Directors will ensure that the
parent company has, at all times, sufficient funds available from the Group to meet its commitments.
Parent entity guarantee
The parent entity guarantees the debts of certain subsidiaries that are guarantors under the Group’s revolving credit bank facility.
124
ANSELL LIMITED ANNUAL REPORT 201620. Related Party Disclosures
(a) Subsidiaries
Ansell Limited is the parent entity of all entities detailed in Note 17 Particulars Relating to Subsidiaries and from time to time has
dealings on normal commercial terms and conditions with those entities, the effects of which are eliminated in these consolidated
financial statements.
(b) Transactions with Key Management Personnel
(i) Key Management Personnel remuneration
Short-term benefits
Post-employment benefits
Share-based payments
Long term cash-based incentives
Restricted share awards
Termination benefits
2016
US$
2015
US$
7,454,232
8,059,621
878,829
945,329
(1,466,068)
2,256,715
(678,221)
630,931
1,146,709
–
11,512
648,628
7,346,993
12,541,224
(ii) Service agreements with Key Management Personnel
The Company has no service agreements with the Non-Executive Directors. Refer to Section 8 of the Remuneration Report for details
of service agreements with the Managing Director and other Key Management Personnel.
21. Ownership-based Remuneration Schemes
Long Term Incentive Plans
The above plans involve the granting of Performance Share Rights (PSRs) to the Managing Director, other members of the Executive
Leadership Team and other members of senior management.
In accordance with the disclosure requirements of Australian Accounting Standards remuneration includes a proportion of the fair
value of PSRs granted or outstanding during the year. The fair value is determined as at grant date and is progressively allocated over
the vesting period for these securities.
The fair value of PSRs is calculated at grant date. The fair values and the factors and assumptions used in determining the fair values
of the PSRs applicable for the 2016 financial year are as follows:
Grant
Date
Vesting
Date
Fair
Value
Share Price
on Grant Date
Risk Free
Interest Rate
Dividend
Yield
Instrument
PSRs
PSRs
14/8/2014
30/6/2017
13/8/2015
30/6/2018
A$17.73
A$18.53
A$19.05
A$20.20
n/a
n/a
2.50%
3.00%
The PSRs are subject to a gateway condition and a performance condition as outlined in the Remuneration Report. As the hurdles
within these conditions are all non-market based performance hurdles the valuation excludes the impact of performance hurdles.
During the year the Company cancelled the FY14 Long Term Incentive Plan which had a vesting date of 30 June 2016.
Options
As at the date of this Report, there is no unissued ordinary shares in the Company that remain under option.
Executive Share Plan
The number of Executive Plan Shares (ordinary plan shares paid to five cents) as at balance date are shown in Note 13 Issued Capital
and Reserves.
125
ANSELL LIMITED ANNUAL REPORT 2016Notes to the Financial Statements continued
22. Auditors’ Remuneration
Audit and review of the financial reports:
Auditors of Ansell Limited and Australian entities – KPMG
Other member firms of KPMG1
Other services2:
Other audit and assurance services
Other member firms of KPMG
Taxation and other services
Other member firms of KPMG
Total other services
Total auditors’ remuneration
2016
US$
2015
US$
1,282,622
1,277,154
1,135,575
1,006,876
2,418,197
2,284,030
4,646
228,320
28,101
32,747
3,052
231,372
2,450,944
2,515,402
1. Includes fees paid or payable for overseas subsidiaries’ local statutory lodgment purposes, Group reporting, and other regulatory compliance requirements.
2. Other services primarily include assurance based engagements undertaken for compliance and internal governance purposes, tax and IT compliance. Other
services provided by KPMG to the Group are subject to appropriate corporate governance procedures encompassing the selection of service providers and the
setting of their remuneration.
126
ANSELL LIMITED ANNUAL REPORT 2016Directors’ Declaration
1. In the opinion of the Directors of Ansell Limited (‘the Company’):
(a) the consolidated financial statements and notes, set out on pages 85 to 126, and the Remuneration Report contained in the
Directors’ Report, set out on pages 52 to 84, are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2016 and of its performance, for the year ended on
that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;
(b) the consolidated financial statements and notes also comply with International Financial Reporting Standards as disclosed
in Note 1;
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
2. The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive
Officer and the Chief Financial Officer for the financial year ended 30 June 2016.
Signed in accordance with a resolution of the Directors:
G L L Barnes
Director
M R Nicolin
Director
Dated in Melbourne this 15th day of August 2016.
127
ANSELL LIMITED ANNUAL REPORT 2016
Independent Audit Report
to the members of Ansell Limited
Report on the financial report
We have audited the accompanying financial report of Ansell Limited (“the Company”), which comprises the consolidated balance sheet
as at 30 June 2016, and consolidated income statement and consolidated statement of comprehensive income, consolidated statement
of changes in equity and consolidated statement of cash flows for the year ended on that date, notes 1 to 22 comprising a summary of
significant accounting policies and other explanatory information and the directors’ declaration of the Group comprising 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 Accounting 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 Australian Accounting Standard AASB 101 Presentation of Financial Statements,
that the financial statements of the Group comply with International Financial Reporting Standards.
Auditor’s responsibility
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.
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 controls relevant to the entity’s
preparation of the financial report that gives a true and fair view 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.
We performed the procedures to assess whether in all material respects the financial report presents fairly, in accordance with the
Corporations Act 2001 and Australian Accounting Standards, a true and fair view which is consistent with our understanding of the
Group’s financial position and of its performance.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
KPMG, an Australian partnership and a member
firm of the KPMG network of independent member
firms affiliated with KPMG International cooperative
(“KPMG International), a Swiss Cooperative.
Liability limited by a scheme approved under
Professional Standards Legislation.
128
ANSELL LIMITED ANNUAL REPORT 2016Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Auditor’s opinion
In our opinion:
(a) the financial report of the Group is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2016 and of its performance for the year ended on that
date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
(b) the financial report also complies with International Financial Reporting Standards as disclosed in note 1.
Report on the remuneration report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2016. 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 auditing standards.
Auditor’s opinion
In our opinion, the remuneration report of Ansell Limited for the year ended 30 June 2016, complies with Section 300A of the
Corporations Act 2001.
Report on non-IFRS financial information
We have audited the non-IFRS financial information comprising the non-statutory remuneration disclosure set out in the remuneration
report for the year ended 30 June 2016. The directors of the Company are responsible for the preparation and presentation of the
non-IFRS financial information report in accordance with the basis of preparation set out in section 5 of the remuneration report
for the year ended 30 June 2016.
Our responsibility is to express an opinion on the non-IFRS financial information, based on our audit conducted in accordance with
auditing standards.
Liability limited by a scheme approved under
Professional Standards Legislation.
129
ANSELL LIMITED ANNUAL REPORT 2016Independent Audit Report continued
to the members of Ansell Limited
Auditor’s opinion
In our opinion, the non-IFRS financial information comprising the non-statutory remuneration disclosures within the remuneration
report for the year ended 30 June 2016, is prepared, in all material respects, in accordance with the basis of the basis of preparation
set out in section 5 of the remuneration report for the year ended 30 June 2016.
KPMG
Gordon Sangster
Partner
Suzanne Bell
Partner
Melbourne
15 August 2016
130
ANSELL LIMITED ANNUAL REPORT 2016Shareholders
Details of quoted shares held in Ansell Limited as at 18 August 2016.
Distribution of Ordinary Shareholders and Shareholdings
Size of Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of Shareholders
Number of Shares
Percentage of Total
30,935
7,939
567
219
44
39,704
11,297,252
15,271,548
3,896,730
4,844,506
112,004,779
147,314,815
7.67%
10.37%
2.65%
3.29%
76.02%
100%
* Including 618 shareholders holding a parcel of shares of less than A$500 in value (4,749 shares), based on market price of $23.15 per unit.
Percentage of the total holdings of the 20 largest shareholders = 73.42 per cent.
In addition to the foregoing, there were 21 members of the Executive Share Plan, whose shares are paid to 5 cents each, holding 54,900
Plan shares.
Voting rights as governed by the Constitution of the Company provide that each ordinary share holder present in person or by proxy
at a meeting shall have:
(a) on a show of hands, one vote only;
(b) on a poll, one vote for every fully paid ordinary share held.
Twenty Largest Shareholders
Rank Registered Holder
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
HSBC Custody Nominees (Australia) Limited
National Nominees Limited
J P Morgan Nominees Australia Limited
Citicorp Nominees Pty Limited
BNP Paribas Noms Pty Ltd
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