Annual Report
2016 CORPORATE
DIRECTORY
DIRECTORS
Professor Andrew Vizard
Dr Christopher Richards
Mr Michael van Blommestein
Mr Richard Dennis
Mr Charles Sitch
Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
COMPANY SECRETARY
Ms Ella McDougall
REGISTERED OFFICE
27-33 Piper Lane
East Bendigo VIC 3550
T 03 5445 5999
F 03 5445 5914
E enquiries@apiam.com.au
AUDITORS
Grant Thornton Australia
The Rialto, Level 30
525 Collins Street
Melbourne VIC 3000
BANKERS
National Australian Bank
Level 1, 55 Mitchell Street
Bendigo VIC 3550
SHARE REGISTRY
Boardroom Registry Pty Ltd
Level 12, 225 George Street
Sydney NSW 2000
T 1300 737 760
F 02 9279 0664
E enquiries@boardroomlimited.com.au
STOCK EXCHANGE LISTING
Australian Securities Exchange
Level 4, North Tower, Rialto
525 Collins Street
Melbourne VIC 3000
ASX CODE
AHX
WEBSITE
apiam.com.au
TABLE OF
CONTENTS
Chairman’s Letter
Managing Director’s Operations Review
Operational Highlights
Board of Directors
Finance Report
Corporate Governance Statement
5
7
8
17
22
92
ASX Shareholder Information
102
3
Annual Report 2016 4
Apiam Animal Health Limited CHAIRMAN’S LETTER
Dear Shareholder,
It is with pleasure that I present the first Annual Report for
Apiam Animal Health Limited (Apiam).
In the short period since listing on the ASX on December
15, 2015, Apiam has set about establishing the solid
foundations that will see us grow strongly into the future.
We also have a clear plan that will further strengthen the
company and deliver value for shareholders in the years to
come.
Apiam is a vertically integrated animal health business
providing products and veterinary services that support the
health and wellbeing of production and companion animals.
With veterinary clinics in 26 locations, we are the leading
production animal veterinary company in Australia, providing
complete animal health solutions for the agricultural sector.
Australia’s animal production industries have significant
opportunities for growth, driven by a range of factors
including:
• underlying growth in domestic consumption of protein;
•
the influence of a rising middle class among key regional
trading partners;
• changing consumer preferences for safe and socially
responsible food production;
• Australia’s competitive advantage in food production;
and
the potential positive impact of free trade deals.
•
As well as our vet services, Apiam has a wholly owned
procurement, wholesaling and logistics operation to service
our regions, including a fleet of specialised delivery vehicles
to support our veterinary practices and clients. We also have
a broad product portfolio targeted at production animals,
including exclusive distribution of third party products and a
growing range of private label products.
From these foundations, our strategy over the next three
years will see us expand by focusing on four themes –
customer service, high performance team, operational
excellence/clinical leadership and innovation. All are
elements of our business where we see real opportunities.
Efficiencies across technology systems and processes
across the business will also deliver savings for Apiam and
services for clients. We will then leverage those efficiencies
to improve services and customer relationships and reduce
expenses.
Apiam is committed to developing and maintaining a culture
that respects, values and actively seeks to deliver on its
commitments. In our recent prospectus, we forecasted
revenue of $48.6 million and an EBITDA of $1.8 million
for the period during which we traded as a company in
the 2015/2016 fiscal year. Our actual revenue during this
period was $54.1 million, $5.5 million greater than forecast,
reflecting our focus on delivering what our customers
want. Similarly, our EBITDA of $2.1 million also exceeded
the statutory forecast. These are very solid results for the
company and testament to the hard work of our employees,
led by our management team.
I thank you for your support and look forward to sharing with
you our future success.
Yours sincerely,
Professor Andrew Vizard
5
Annual Report 2016 6
Apiam Animal Health Limited MANAGING DIRECTOR’S OPERATIONS REVIEW
Dear Shareholder,
The past year has been one dedicated to building the
foundations upon which Apiam will develop and grow. It’s
been a carefully thought out process that is delivering on
the expectations set out in the prospectus for our IPO in late
2015.
Our customer focus will see us meeting their needs by
providing evidence-based veterinary, well-being, production
and genetics services and products that improve profitability
for our clients and establish Apiam as a trusted service
provider.
Apiam’s focus on developing a high performance team will
be welcomed by the industry. Through collaboration, the
retention and recruitment of highly skilled people, and further
development of our people through training and internships,
we will continue to develop the high performance team that
will enhance our relationships with customers and improve
our value proposition.
Operational excellence and clinical leadership will see the
implementation of integrated systems across the business
that will optimise processes while our support for innovation
will see new services and programs developed to improve
efficiencies, turnover and margins as well as research to
develop new solutions for future challenges faced by our
customers.
We have a clear timeline for delivering on these themes. Year
one has seen us commence building the foundation of our
company through workplace policies, culture and services.
Year two will see us consolidate our capacity for growth
and continue building efficiencies across the business by
improving processes, customer contact and business
balance. Year three will see us leverage on our efficiencies to
deliver on what we have created.
I am proud of what we have built so far and am confident
we have the plan and the people to continue growing and
delivering on our potential.
Yours sincerely,
Dr Christopher Richards
Like the honey bee (Genus Apis) which is the inspiration
for the company’s name, our team have been working
hard together to build a vertically integrated business that
delivers a range of animal health services efficiently and cost
effectively.
Our financial results show that we are delivering to plan.
Revenue from ordinary activities was
$54.1 million, exceeding our prospectus statutory forecast
of $48.6 million, and our EBITDA of $2.1 million also
exceeded statutory expectations in the prospectus of $1.8
million. While gross margins were slightly down, this was
because of growth in wholesale sales and some initial delays
in procurement synergies.
Our investment in human resources and information
technology to support the integration of the veterinary clinics
we acquired as part of the IPO saw operating expenses
higher than expected. The acquisitions were settled earlier
than expected, which also had an impact on operating
costs.
Apiam has brought together some of the largest rural
veterinary practices from around the country. This has
involved a period of integration which we have committed
significant resources to bed down. Through it all, we
have maintained our focus and our results show we have
delivered on our promises.
Since being formed and listed on the ASX, Apiam has
executed on its growth plans. Subsequent to the end of
the reporting period we secured the acquisition of Quirindi
Veterinary Group, one of Australia’s largest rural veterinary
groups, which we expect will be earnings accretive for us.
We have also established our Veterinary Services Advisory
Committees, which bring together our best veterinary minds
to create programs that help our customers improve the
value and productivity of their production animal operations.
Our team has also focused on the integration of our
businesses by bringing payroll, financial, workplace health
and safety, intranet and human resources systems into
alignment.
Apiam’s growth plan revolves around our strategic themes
of customer focus, high performance team, operational
excellence/clinical leadership and innovation. These themes
are the pillars that support our mission and vision to provide
the best in production and companion animal health care in
the regional and rural communities that we service.
7
Annual Report 2016 01
Operational
Highlights
8
Apiam Animal Health Limited Apiam Animal Health has made significant progress in its plans for growth since listing on the Australian Securities Exchange in
December 2015. A foundation has been established that Apiam will continue to strengthen to support expansion into the future.
Apiam is committed to providing the best health outcomes for production and companion animals, the latest innovations in
productivity for their owners, and delivering returns for shareholders. Apiam is Australia’s leading provider of health services for
production animals in the dairy, pigs and feedlot beef cattle industries, with plans to continue growing its footprint in Australia.
INTEGRATION
Segment
Businesses
Activities and Geographic Locations
Veterinary Consulting
Q u i r i n d i
Feedlot servic es
Q u i r i n d i
Veterinary Clinic
Products
Ancillary and Support
• 13 leading production animals and regional
mixed animal practices
• 29 clinics strategically located across Victoria,
Tasmania, Queensland, Western Australia
and New South Wales
• Over 110 veterinarians, including many
leading specialists in their fields of expertise
• Centralised procurement and wholesaling
of animal pharmaceuticals, nutritional
supplements and equipment
•
In-house warehousing and logistics services
to deliver products to veterinary clinics and
end-point customers
• Warehouses in Bendigo, Toowoomba,
Welshpool and Smithton
• 21 vehicle fleet with an estimated 65% of
goods delivered via in-house capabilities
• Genetics sourcing, sales and related services
• Services to producers of industry quality
assurance programs, including major national
supermarket standards as third party (food
chain) auditors
Q u i p o l l y
E q u i n e C e n t r e
Apiam’s integration of veterinary practices and the services that support them is well underway. Centralised functions around
finance and business support are in progress, as is the implementation of human resource and practice management systems.
These are streamlining Apiam’s processes and will significantly contribute to efficiencies across the business. Apiam is making
significant investments in these areas to accommodate the growth it expects to deliver in the years to come.
9
Annual Report 2016
KEY ACCOUNT MANAGERS
A key part of Apiam’s vertically integrated business model is its team of Key Account Managers, which commenced phasing into
the company during the initial trading period. These managers are dedicated to working alongside vets to assist in the sales of
service based programs and the technology solutions associated with these innovations. They develop one-on-one relationships
with clients and advise on the application of solutions recommended by the veterinarian which will improve animal health and/or
farm productivity.
The relationships forged between veterinarians, Key Account Managers and their clients will enable Apiam to deliver more
services and products to a stable and secure client base.
VETERINARY SERVICES ADVISORY
COMMITTEES
As part of its plan to offer value-added services to clients, Apiam has created a number of Veterinary Services Advisory
Committees to address the needs of various clients and the species of animal they are raising or have as companions. These
committees, currently in place for dairy, feedlot, pigs and poultry, genetics, companion animals and equine, bring together
Apiam’s leading vets from around the country to develop new ideas and programs that will benefit clients, as well as increasing
the level of service provided by all employees. The knowledge and information exchanged in the committees and the programs
developed by the committees will assist Apiam to advise farmers on how they can better structure their farms to improve
productivity in their animals prevent disease, improve animal health and increase financial returns. New
services for companion animals will provide improvements in diagnostics and treatments to ensure that
the pets and other animals that Apiam sees as patients receive the highest levels of care available.
These committees will drive innovation in the animal health sector that will improve health
outcomes for herds, increase productivity gains and enrich the lives of clients and the animals
in Apiam’s care.
10
Apiam Animal Health Limited 11
Annual Report 2016 ACQUISITIONS
Quirindi
Veterinary
Group
Q u i r i n d i
Veterinary Clinic
Q u i p o l l y
E q u i n e C e n t r e
Q u i r i n d i
Feedlot serv ices
Apiam successfully completed the roll up of 12 veterinary practices around Australia as part of the IPO process. The acquisitions
have given Apiam a presence in key animal production areas in Queensland, New South Wales, Victoria, South Australia,
Western Australia and Tasmania. Targeted acquisitions of veterinary practices are part of Apiam’s strategy for growth.
Since the IPO, Apiam has delivered on its growth strategy with the acquisition of the Quirindi Veterinary Group in New South
Wales for $11.57 million. Quirindi provides veterinary services to large beef production systems throughout Australia, equine
reproduction services and has a livestock and companion animal veterinary practice at Quirindi. The business is a strong
strategic fit for Apiam, with the purchase expected to be earnings accretive. Apiam remains vigilant for further acquisitions that
will deliver growth and synergies for the company.
12
Apiam Animal Health Limited 13
Annual Report 2016 3 YEAR STRATEGY
Leveraging performance
•
Increase the high margin services &
products offered
• Enhance our clinics' image &
•
customer relationships
Improve end-user profitability/
perceived value for money
Improve business balance
•
• Reduce operating expenses/COG's
S
E
L
B
A
R
E
V
L
E
D
I
Gaining efficiencies
•
•
•
•
•
Improve the process of identifying,
selecting & developing new business
opportunities
Improve the process of delivering new
products & services to customers
Improve customer contact (KAM)
impact
Improve procurement, service cost
allocation, debt management
Improve business balance
Building the foundation
• Develop strategic technology & services,
operating & financial systems
• Enhance company policies & work place
safety
• Develop a high performance,
collaborative culture
Improve procurement, service cost
allocation, debt management
Improve business balance
•
•
2016 - 17
2017 - 18
2018 - 19
14
Apiam Animal Health Limited Apiam has developed a clear three-year plan for growth. The company has created a solid foundation upon which it will continue
to grow. Year one is about building the foundation of the business, which is well underway. Year two will see Apiam focus on
efficiencies and in year three the company will leverage its performance. The plan revolves around the strategic themes of
customer focus, creating a high performance team, clinical leadership and operational excellence, and innovation. These themes
are the pillars that support Apiam’s mission to provide the best in production and companion animal health care in the regional
and rural communities it serves.
Customer focus – Apiam will meet the needs of its customers by providing evidence-based veterinary, well-being, production
and genetics services and products that improve profitability for clients and establish Apiam as a trusted service provider.
High performance team – Through the collaboration, retention and recruitment of skilled people and further training
and internships, Apiam will create a high performance team that will enhance client relationships and the company’s value
proposition.
Operational excellence/clinical leadership – New integrated systems across the company will optimise processes and
improve delivery of new products and services to clients.
Innovation – Apiam’s support for innovation will see new services and programs developed that improve efficiencies, turnover
and margins for the company and results for clients and any new business challenges they face.
15
Annual Report 2016 INDUSTRY OUTLOOK
Australia’s production animal sectors have a positive outlook for the years ahead and Apiam is well positioned to leverage
emerging trends.
Beef consumption is expected to continue growing, with cattle prices expected to remain strong on the back of significant
winter rainfall. While we anticipate fewer cattle numbers through feedlots in FY17, Apiam is building capacity for the expected
future growth in the Australian feedlot industry. Pig meat production has grown steadily since 2015, with pork prices at a six year
high and grain feed prices at a two year low. The dairy sector has experienced some challenges recently but changes in industry
dynamics present long-term opportunities for Apiam.
Apiam is investing further in its companion animal services, both in equipment, standards of care and people. Apiam is
expanding its services to the equine industry with increases in demand for dedicated skills in the areas that it services.
DAIRY
PIGS
BEEF
16
Apiam Animal Health Limited
02
Board of
Directors
17
Annual Report 2016 BOARD OF DIRECTORS
PROFESSOR ANDREW LANCELOT VIZARD
BVSC(HONS), MVPM, FAICD
DR CHRISTOPHER IRWIN RICHARDS
BSC, BVSC
Independent Chairman
Independent Non-Executive Director
Member of Audit and Risk Management Committee
Member of Remuneration Committee
Appointed 5 November 2015
Andrew is a Principal Fellow at the Faculty of Veterinary and
Agricultural Sciences, University of Melbourne and previously
Associate Professor of Veterinary Epidemiology and Director
of The Mackinnon Project, a recognised leader in sheep
and beef veterinary consultancy. An experienced company
director, previous board experience includes directorships
of Animal Health Australia, the body responsible for
coordinating Australia’s animal health system, Primesafe, the
statutory authority responsible for regulating the production
of safe meat in Victoria and the Australian Wool Corporation,
the body responsible for managing research and marketing
of Australian Wool. For ten years Andrew also managed
Roxby Park, his family’s 3,300 acre farm.
Managing Director
Member of Audit and Risk Management Committee
Appointed 25 March 2015
Chris founded Chris Richards & Associates in 1998 as a
pig specific veterinary clinic based in Bendigo, servicing
clients throughout Australia. Chris has been responsible for
the strategic direction of the former Chris Richards Group,
which has seen the development, acquisition and integration
of other production animal veterinary clinics, veterinary
wholesale, logistics and genetic services businesses over
the last 18 years resulting in the formation of Apiam. Chris
is currently a member of APL’s Biosecurity Strategic Review
Panel and is a member of the Pork CRC Research and
Development Committee.
18
Apiam Animal Health Limited MR MICHAEL VAN BLOMMESTEIN
GAICD
Independent Non-Executive Director
Chair and Member of Remuneration Committee
Appointed 5 November 2015
Michael was a Vice President and Country Manager of
Australia and New Zealand for Zoetis and managed the
spin-off of Zoetis from Pfizer Australia. An experienced
director in the animal health sector, Michael presided over
Animal Medicines Australia, the peak industry body for five
years and was a member of the board for nearly a decade.
Michael played an integral role in leading and overseeing the
transition of Animal Health Alliance into Animal Medicines
Australia and has also served on the board of Animal Health
Association Japan.
MR RICHARD JOHN DENNIS
BCOMM, LLB, CA, MAICD
Independent Non-Executive Director
Chair and Member of Audit and Risk Management
Committee
Appointed 5 November 2015
Rick had 35 years with Ernst & Young and was the
Managing Partner of EY’s Queensland practice on two
occasions from 2001-2007 and from 2014-2015. Rick
also held a number of executive management roles at EY,
including the roles of Deputy COO and CFO for the Asia-
Pacific practice where he was responsible for overseeing the
financial and operational integration of EY’s Australian and
Asian member firms. Rick is also a member of Australian
Super’s Queensland Advisory Board and a member of the
advisory board to EWM Group. He is also a non-executive
director of Springfield Land Corporation Pty Ltd, Vesta Living
Communities Ltd and Gold Coast Private Health Network.
19
Annual Report 2016 MR CHARLES TREVOR SITCH
BCOMM, LLB, MBA, GAICD
Independent Non-Executive Director
Member of Audit and Risk Management Committee
Member of Remuneration Committee
Appointed 5 November 2015
Charles is currently a director of ASX listed Spark New
Zealand Ltd and a member of their audit risk and finance
committee. He is also a director of Bellamy’s Australia
Ltd. Previously Charles spent 24 years at McKinsey and
Company New York, London and Melbourne. He was a
senior director, primarily working with CEOs and Boards on
strategy and operations turnarounds before retiring in 2010.
In 2002, Charles was awarded the President’s Medal for
services to the Royal Agricultural Society of Victoria.
MR MATTHEW BRIAN WHITE
DIRECTOR
Appointed 28 August 2015,
Resigned 5 November 2015.
Executive Director
Chief Financial Officer
An experienced finance director with over 15 years of
experience in the animal health industry, having held finance
roles both in Australia and internationally with MSD, one of
the largest pharmaceutical companies in the world including
as Finance Director for Australia.
MS ELLA CATHERINE MCDOUGALL
DIRECTOR
Appointed 28 August 2015,
Resigned 5 November 2015.
Executive Director
General Counsel
Ella has a background in corporate and commercial law
and has previously held in-house legal roles at Hills Limited
and ASC Pty Ltd. Ella joined the Chris Richards Group in
2012 and has an extensive knowledge of the regulatory
environment in which veterinarians and pharmaceutical
wholesalers operate.
COMPANY SECRETARY
Ms Ella McDougall, BHSc, BA, BLLP, GIA(Cert) is General
Counsel and Company Secretary. Ella has been Company
Secretary of Apiam since incorporation on 25 March 2015.
20
Apiam Animal Health Limited 21
Annual Report 2016 03
Finance
Report
22
Apiam Animal Health Limited TABLE OF
CONTENTS
Directors Report
Remuneration Report (Audited)
Auditor’s Independence Declaration
Statement of Profit or Loss and Other
Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditors’ Report
24
32
37
39
40
41
42
44
88
90
23
Annual Report 2016 DIRECTORS REPORT
The Directors of Apiam Animal Health Limited (‘Apiam’) present their Report together with the financial statements of the
consolidated entity, being Apiam (‘the Company’) and its controlled entities (‘the Group’) for the year ended 30 June 2016.
DIRECTOR DETAILS
The following persons were Directors of Apiam during or since the end of the financial year:
PROFESSOR ANDREW LANCELOT VIZARD
BVSC(HONS), MVPM, FAICD
MR MICHAEL VAN BLOMMESTEIN
GAICD
Independent Chairman
Independent Non-Executive Director
Member of Audit and Risk Management Committee
Member of Remuneration Committee
Appointed 5 November 2015
Other current listed public company directorships:
Nil
Previous listed public company directorships (last 3 years):
Ridley Corporation Ltd (resigned 31 March 2016)
Interests in shares:
30,000 shares
Interest in options:
None
DR CHRISTOPHER IRWIN RICHARDS
BSC, BVSC
Managing Director
Member of Audit and Risk Management Committee
Appointed 25 March 2015
Other current listed public company directorships:
Nil
Previous listed public company directorships (last 3 years):
Nil
Interests in shares:
26,852,304 shares
Interest in options:
None
Independent Non-Executive Director
Chair and Member of Remuneration Committee
Appointed 5 November 2015
Other current listed public company directorships:
Nil
Previous listed public company directorships (last 3 years):
Nil
Interests in shares:
100,000
Interest in options:
None
MR RICHARD JOHN DENNIS
BCOMM, LLB, CA, MAICD
Independent Non-Executive Director
Chair and Member of Audit and Risk Management
Committee
Appointed 5 November 2015
Other current listed public company directorships:
Omni Market Tide Ltd
Previous public company directorships (last 3 years):
Nil
Interests in shares:
50,000 shares
Interest in options:
None
24
Apiam Animal Health Limited MR CHARLES TREVOR SITCH
BCOMM, LLB, MBA, GAICD
Independent Non-Executive Director
Member of Audit and Risk Management Committee
Member of Remuneration Committee
Appointed 5 November 2015
Other current listed public company directorships:
Bellamy’s Australia Limited
Spark New Zealand Limited
Previous listed public company directorships (last 3 years):
Pacific Edge Limited (NZX Listed)
(resigned 30 June 2016)
Interests in shares:
150,000
Interest in options:
None
MR MATTHEW BRIAN WHITE
DIRECTOR
Appointed 28 August 2015,
Resigned 5 November 2015.
Executive Director
Chief Financial Officer
MS ELLA CATHERINE MCDOUGALL
DIRECTOR
Appointed 28 August 2015,
Resigned 5 November 2015.
Executive Director
General Counsel
MS ELLA CATHERINE MCDOUGALL
COMPANY SECRETARY
Appointed 25 March 2015.
25
Annual Report 2016 PRINCIPAL ACTIVITIES
The Group operates in the segment of provision of veterinary
products and services to production and companion
animals. Apiam’s strategy is to service production animals
throughout their life cycle, including the provision of:
Financial Results
Highlights of FY16 Statutory Results
• Revenue of $54.1 million representing growth of 11.4%
over reported forecast
• EBITDA of $2.1 million exceeding reported forecast by
• systems to assist in herd health programs;
$0.3 million
• production advice;
• Net Profit before tax (NPBT) of $1.1m exceeded forecast
• consulting services and products to assist in the
by 94.5%
Apiam recorded revenue of $54.1 million representing
solid growth of 11.4% over the FY16 prospectus statutory
forecast of $48.6 million. The strong revenue result
delivered gross profit of $1.4 million in excess of the
prospectus forecast. Wholesale revenue growth and a
phasing in of procurement savings have contributed to the
lower gross margin. Operating expenses were higher than
budgeted as a result of the acquired clinics commencing
trading in December 2015 as well as further investment in
human resources and information technology personnel to
support integration of the acquired clinics.
EBITDA exceeded the prospectus forecast by $0.3 million
as a result of strong revenue growth and lower IPO expense
than expected.
The Net Profit before tax (NPBT) of $1.1m exceeded
forecast by 94.5%. The profit before tax excluding one-off
expenses was $4.5m. One-off expenses of $3.4m were
budgeted for and related to the initial public offering and the
acquisitions.
Income tax in FY16 has been impacted by one off
permanent non-deductible expenses relating to stamp duty
and employee share based payments related to the IPO.
Since the statutory accounts contain significant one-off
expenses and the group only traded for part of the FY16
year, the following table is presented to assist in the
interpretation of the underlying performance of the Company
during the period. This information is additional and provided
using non-IFRS information and terminology.
prevention of animal diseases;
•
technologies to manage compliance with legislative
requirements on pharmaceutical use;
• advice and services in respect of animal welfare
compliance;
•
retail animal health product sales;
• on-farm delivery of products via its own logistics
capability;
•
third party auditing services of industry quality assurance
programs;
•
technology development for animal health management;
• ancillary services such as sales and/or delivery of
genetics and associated products; and
• on-farm and on-line training programs for clients.
There have been no significant changes in the nature of
these activities during the year.
REVIEW OF OPERATIONS AND FINANCIAL
RESULTS
Apiam Business
Apiam Animal Health is positioned in the Australian market
as a vertically integrated animal health business providing
a range of products and services to production and
companion animals. Apiam Animal Health’s strategy is
to service production animals throughout their life cycle,
including the provision of genetics, veterinary services,
wholesale and retail of related products, together with
technical services related to food-chain security.
The FY16 statutory results include:
•
•
from 1 November 2015, the trading of Chris Richards
Group businesses and 3 clinics in which Chris Richards
Group had a majority equity interest; and
from 10 December 2015, the trading of the nine (9) other
clinics acquired.
The FY16 prospectus statutory forecast includes:
•
•
from 1 November 2015, the trading of Chris Richards
Group businesses and 3 clinics in which Chris Richards
Group had a majority equity interest; and
from 1 January 2016, the trading of the nine (9) other
clinics acquired.
26
Apiam Animal Health Limited FY16 Financial Results Summary
$’000
Revenue
Gross Profit
GM
Expenses
Employment costs
General expenses
Utilities
Operating Expenses
EBITDA (before one-off expenses)
Integration expenses
IPO costs
Total expenses
EBITDA
Depreciation and amortisation expense
EBIT
Net interest paid
Net Profit Before Tax
Income tax
Net Profit After Tax
• Non-controlling interest
• Apiam shareholders
Actual
54,097
25,330
46.8%
14,155
4,257
1,410
19,822
5,508
451
2,934
23,207
2,123
621
1,502
434
1,068
975
93
43
50
Prospectus
Statutory
Forecast
Favourable /
(Unfavourable)
Variance
48,569
23,948
49.3%
12,967
4,479
1,041
18,487
5,461
500
3,143
22,130
1,818
735
1,083
534
549
165
384
49
335
5,528
1,382
(1,188)
222
(369)
(1,335)
47
49
209
(1,077)
305
114
419
100
519
(810)
(291)
(6)
(285)
%
11.4%
5.8%
(9.2%)
5.0%
(35.4%)
(7.2%)
0.9%
9.8%
6.6%
(4.9%)
16.8%
15.5%
38.7%
18.8%
94.5%
(491.1%)
(75.7%)
(11.5%)
(85.0%)
EBITDA: Earnings before interest, tax depreciation and amortisation
EBIT: Earnings before interest and tax
Note the reported prospectus statutory forecast contains the following reclassifications to present it in accordance with
Australian Accounting Standards:
1. Customer rebates of $0.95 million reclassified from general expenses to revenue;
2. Freight, pathology and packaging costs of $0.59 million reclassified from cost of goods sold to general expenses; and
3. Other income of $0.58 million reclassified as $0.5 million integration expense and $1.08 million reduction to cost of goods
sold (relating to supplier rebates).
Operations
Since being formed and listed on the ASX, Apiam has executed on its plans for growth.
The Company worked towards the acquisition of Quirindi Veterinary Group, one of Australia’s largest rural veterinary groups. The
acquisition was finalised and announced subsequent to the reporting period and is discussed further below.
Apiam also established its Veterinary Services Advisory Committees, which bring together the Company’s best veterinary minds
to create programs that help customers improve the value and productivity of their production animal operations.
The Company has also focused on the integration of its businesses by bringing payroll, financial, workplace health and safety,
intranet and human resources systems into alignment.
Apiam’s operations across the business will continue to be driven by a focus on its four key strategy pillars of customer service
delivery, developing a high performance team, operational excellence/clinical leadership and innovation.
The Company has a three-year plan through which it will implement its operational ambitions.
Year one will see Apiam build the foundation of the Company through workplace policies, culture and services. Year two will see
consolidation of capacity for growth and continued efficiencies across the business by improving processes, customer contact
and business balance. Year three will see the Company leverage those efficiencies to deliver on its performance.
27
Annual Report 2016 SIGNIFICANT CHANGES IN THE STATE OF
AFFAIRS
LIKELY DEVELOPMENTS, BUSINESS
STRATEGIES AND PROSPECTS
Apiam has successfully completed the roll in of the Chris
Richards Group businesses and the acquisition of 12 large
rural vet businesses in FY16 as outlined in the prospectus.
Integration of the acquired clinics is progressing according
to plan and management is focused on implementation of
the business strategies outlined in the prospectus.
DIVIDENDS
During or since the end of the financial year, no dividends
have been paid or declared.
EVENTS ARISING SINCE THE END OF THE
REPORTING PERIOD
On 19 August 2016, the Company signed an agreement
to acquire 100% of the shares in Quirindi Veterinary Group
(QVG) for $11.57 million. QVG provides veterinary services
to large beef production systems throughout Australia
through its business unit Quirindi Feedlot Services, provides
equine reproduction services at its custom built centre in
Quipolly, near Scone in NSW, and runs a livestock and
companion animal veterinary practice located in Quirindi.
The acquisition will be funded using Apiam’s existing
bank facilities. The consideration for the acquisition is
a combination of 70% cash and 30% scrip. In line with
Apiam’s previous acquisitions, the principals of the business
will enter into an employment contract with restraint
conditions. Shares issued under the agreement will be
subject to escrow.
The Group is currently obtaining the information necessary
to appropriately consider the identification and fair value of
identifiable intangible assets.
There are no other matters or circumstances that have
arisen since the end of the year that have significantly
affected or may significantly affect either:
•
•
•
the entity’s operations in future financial years
the results of those operations in future financial years;
or
the entity’s state of affairs in future financial years.
Apiam’s strategy is to build on the solid foundation it
has established as an integrated animal health business
servicing the rural production and companion animal
sectors, ensuring it can meet the needs of a market which is
rapidly growing as a result of the expanding global demand
for animal protein.
Apiam expects to continue to invest through acquisition,
collaborative partnerships and further recruitment of leading
expertise to ensure it has the capability required to prosper
in the expanding global animal health industry.
DIRECTORS’ MEETINGS
The number of Directors’ Meetings (including meetings
of Committees of Directors) held during the year, and the
number of meetings attended by each Director is as follows:
Directors’
Board
Audit and
Risk
Committee
Remuneration
Committee
A
B
A
B
Andrew Vizard
Chris Richards
Michael van
Blommestein
Richard Dennis
Charles Sitch
Ella McDougall
Matthew White
Where:
7
9
7
7
7
2
2
7
9
6
7
6
2
2
3
-
-
3
3
-
-
3
-
-
3
2
-
-
A
1
-
1
-
1
-
-
B
1
-
1
-
-
-
-
• column A is the number of meetings the Director was
eligible to attend; and
• column B is the number of meetings the Director
attended.
UNISSUED SHARES UNDER OPTION
There were no unissued ordinary shares of Apiam under
option at the date of this report.
SHARES ISSUED DURING OR SINCE THE END
OF THE YEAR AS A RESULT OF EXERCISE OF
OPTIONS
During or since the end of the financial year, the Company
has not issued any ordinary shares as a result of the
exercise of options.
28
Apiam Animal Health Limited
ENVIRONMENTAL LEGISLATION
Apiam operations are not subject to any particular or significant environmental regulation under a law of the Commonwealth or
of a State or Territory in Australia.
INDEMNITIES GIVEN TO, AND INSURANCE PREMIUMS PAID FOR, AUDITORS AND OFFICERS
INSURANCE OF OFFICERS
During the year, Apiam paid a premium to insure officers of the Group. The officers of the Group covered by the insurance
policy include all Directors. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings
that may be brought against the officers in their capacity as officers of the Group, and any other payments arising from liabilities
incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a
wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for
themselves or someone else to cause detriment to the Group.
Details of the amount of the premium paid in respect of insurance policies are not disclosed as such disclosure is prohibited
under the terms of the contract.
The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or
agreed to indemnify any current or former officer of the Group against a liability incurred as such by an officer.
INDEMNITY OF AUDITORS
The Group has not, during or since the end of the financial year, indemnified or agreed to indemnify its auditors, Grant Thornton
Audit Pty Ltd, or any related entity against a liability incurred by the auditor. During the financial year, the Group has not paid a
premium in respect of a contract to insure the auditor of the Group or any related entity.
NON-AUDIT SERVICES
During the year, the Company’s auditors performed certain other services in addition to their statutory audit duties.
The Board has considered the non-audit services provided during the year by the auditor and, in accordance with written advice
provided by resolution of the Audit and Risk Management Committee, is satisfied that the provision of those non-audit services
during the year is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act
2001 for the following reasons:
• all non-audit services were subject to the corporate governance procedures adopted by the Company and have been
reviewed by the Audit and Risk Management Committee to ensure they do not impact upon the impartiality and objectivity of
the auditor; and
•
the non-audit services do not undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a
management or decision-making capacity for the Company, acting as an advocate for the Company or jointly sharing risks
and rewards.
Details of the amounts paid to the auditors of the Company and its related practices for audit and non-audit services provided
during the year are set out in Note 27 to the financial statements.
A copy of the Auditor’s Independence Declaration as required under s307C of the Corporations Act 2001 is included on page 19
of this financial report and forms part of this Directors’ Report.
29
Annual Report 2016 PROCEEDINGS OF BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on
behalf of the Company for all or part of those proceedings.
ROUNDING OF AMOUNTS
Apiam is a type of Company referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191
and therefore the amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (where
rounding is applicable), or in certain cases, to the nearest dollar under the option permitted in the Instrument.
Signed in accordance with a resolution of the Directors:
Dr Christopher Irwin Richards
Managing Director
Melbourne
25 August 2016
30
Apiam Animal Health Limited 31
Annual Report 2016 REMUNERATION
REPORT (AUDITED)
The Directors of Apiam Animal Health Limited (‘the Group’)
present the Remuneration Report for Non-Executive
Directors, Executive Directors and other key management
personnel, prepared in accordance with the Corporations
Act 2001 and the Corporations Regulations 2001.
The Remuneration Report is set out under the following
main headings:
a. Principles used to determine the nature and amount of
remuneration;
b. Details of remuneration;
c. Service agreements;
d. Share-based remuneration;
e. Bonuses included in remuneration;
f. Non-executive director remuneration; and
g. Other information.
a. Principles used to determine the nature and
amount of remuneration
The principles of the Group’s executive strategy and
supporting incentive programs and frameworks are:
•
•
•
to align rewards to business outcomes that deliver value
to shareholders;
to drive a high performance culture by setting
challenging objectives and rewarding high performing
individuals; and
to ensure remuneration is competitive in the relevant
employment market place to support the attraction,
motivation and retention of executive talent.
The Group has structured a remuneration framework that
is market competitive and complementary to the reward
strategy of the Group.
The Board has established a Remuneration Committee
which operates in accordance with its charter as
approved by the Board and is responsible for reviewing
and recommending compensation arrangements for the
Directors and the Executive Team. The Remuneration
Committee has met once in the FY16 reporting period.
The Remuneration Committee has approved the
engagement of Korn Ferry Hay Group to undertake
bench-marking for the executive team. The Remuneration
Committee has also approved the engagement of Grant
Thornton Australia Limited and HRAscent to formulate an
equity management plan for principal and senior vets which
is expected to be completed in the financial year ending 30
June 2017.
The remuneration structure that has been adopted by the
Group consists of the following components:
• fixed remuneration being annual salary; and
• short term incentives, being bonuses.
However, the Remuneration Committee is considering long
term incentives (LTI) to be implemented in the future. The
Remuneration Committee assesses the appropriateness
of the nature and amount of remuneration on a periodic
basis by reference to recent employment market conditions
with the overall objective of ensuring maximum stakeholder
benefit from the retention of a high quality Board and
Executive Team.
The payment of bonuses and other incentive payments
are reviewed by the Remuneration Committee annually
as part of the review of executive remuneration and a
recommendation is put to the Board for approval. All
bonuses and incentives must be linked to pre-determined
performance criteria.
Short Term Incentive (STI)
Apiam performance measures involve the use of annual
performance objectives, metrics, performance appraisals
and continuing emphasis on living the Company values.
The performance measures are set annually after
consultation with the Directors and Executives and are
specifically tailored to the areas where each executive has
a level of control. The measures target areas the Board
believes hold the greatest potential for expansion and profit
and cover financial and non-financial measures.
The Key Performance Indicators (KPI’s) for the Executive
Team are summarised as follows:
Performance area:
• financial – operating profit and earnings per share; and
• non-financial – goals set by each individual business unit
based on job descriptions.
The STI Program incorporates cash for the Executive Team
and other employees.
The Board may, at its discretion, award bonuses for
exceptional performance in relation to each person’s pre-
agreed KPIs.
Voting and comments made at the Company’s last
Annual General Meeting
The Company became a listed public company during
the financial year ended 30 June 2016 and this is the first
remuneration report of Apiam Animal Health Limited and the
first to be presented at an Annual General Meeting.
Consequences of performance on shareholder wealth
In considering the Group’s performance and benefits for
shareholder wealth, the Board have regard to the following
indices in respect of the current financial year.
Item
EPS (cents)
Dividends (cents per share)
Net profit before tax ($’000)
Share price ($)
2016
0.08c
-
$1,068
$1.49
32
Apiam Animal Health Limited b. Details of remuneration
Details of the nature and amount of each element of the remuneration of each Key Management Personnel (KMP) of Apiam are
shown in the table below:
Short term employee
benefits
Post-
employment
benefits
Year
Salary &
fees (v)
Cash
bonus
Non-
monetary
benefits
Superannuation
Long-
term
benefits
Long
service
leave
(vi)
Share-
based
payments
Shares
(viii)
Total
Performance
based
percentage of
remuneration
Directors
$
$
$
$
$
$
$
80,000
-
46,667
-
-
-
-
-
40,000
-
40,000
-
-
-
256,101
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,470
-
3,470
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19,941
10,868
4,241
-
-
-
-
12,848
-
-
74
-
Andrew Vizard Chairman
2016
80,000
Independent (ii)
Richard Dennis
Independent (ii)
Ella McDougall Director
(iv)
Chris Richards Managing
Director (i)
Charles Sitch
Independent (ii)
2015
-
2016
46,667
2015
2016
2015
2016
2015
-
-
-
-
-
2016
36,530
2015
-
Michael van Blommestein
2016
36,530
Independent (ii)
Matthew White Director
(iv)
Employees
Chris Richards
Managing Director (i)
Corne Loots Vet.
Services Manager (vii)
Julie Tippett Chief
Operating Officer (iii)
Matthew White Chief
Financial Officer (iv)
Ella McDougall General
Counsel/Cpy Sec (iv)
2016 Total
2015 Total
2015
2016
2015
-
-
-
2016
221,051
2015
-
2016
139,772
50,000
2015
-
2016
145,161
2015
-
-
-
-
2016
136,449
95,000
2015
-
2016
101,389
2015
-
-
-
-
50,000
252,694
-
-
3,117
13,790
(17,793)
200,000
344,275
-
-
-
-
-
-
12,929
-
-
75
-
-
-
30,000
274,453
-
-
9,204
1,458
100,000
212,051
-
-
-
-
%
0%
-
0%
-
-
-
-
-
0%
-
0%
-
-
-
0%
-
20%
-
0%
-
35%
-
0%
-
9%
-
2016
943,549 145,000
23,058
66,579 (11,945)
380,000 1,546,241
2015
-
-
-
-
-
-
-
i. Appointed director 25 March 2015 and received no remuneration for acting as a director or employee of the company for the period
25 March 2015 to 31 October 2015. On 1 November 2015 Chris became Managing Director of the company and his remuneration
received relates to the period 1 November 2015 to 30 June 2016.
ii. Appointed director 5 November 2015. Remuneration received relates to the period 5 November 2015 to 30 June 2016.
iii. Remuneration received relates to the period 1 November 2015 to 30 June 2016.
iv. Appointed director 28 August 2015, resigned 5 November 2015. No remuneration was received for acting as a director. Remuneration
received relates to KMP role for the period 1 November 2015 to 30 June 2016.
v. Salary and fees includes fixed cash and annual leave accruals.
vi. Long term benefits includes long service leave accruals
vii. Cash bonus is a sign on bonus.
viii. As part of the listing on the Australian Securities Exchange, shares were issued to certain eligible employees in Australia for nil
consideration as part of their reward for service to the Company.
33
Annual Report 2016 The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Name
Executive Directors
Chris Richards
Other Key Management Personnel
Corne Loots
Julie Tippett
Matthew White
Ella McDougall
c. Service agreements
Fixed remuneration
At risk – STI
100%
80%
100%
65%
100%
-
20%
-
35%
-
Remuneration and other terms of employment for the Executive Directors and other key management personnel are formalised
in a Service Agreement. The major provisions of the agreements relating to remuneration are set out below:
Name
Chris Richards
Corne Loots
Julie Tippett
Matthew White
Ella McDougall
Base salary*
Term of agreement
Notice period
$369,380
$212,500
$200,000
$190,000
$150,000
5 years from listing
Twelve (12 months)
No fixed term
No fixed term
No fixed term
No fixed term
Six (6) months
Six (6) months
Six (6) months
Four (4) months
* Base salary for Chris Richards is inclusive of superannuation guarantee payments. For all other key management personnel,
base salary does not include superannuation guarantee payments.
Bonus provisions
Chris Richards: Nil
Corne Loots:
Sign on bonus of $50,000 payable after twelve months service completed on 1 December 2016.
Eligible for an annual bonus of up to 20% of base salary from 1 December 2016.
Julie Tippett
Eligible for an annual bonus of up to 20% of base salary from 1 July 2016.
Matthew White
Eligible for a bonus of up to 50% of base salary for the period ended 30 June 2016.
Eligible for an annual bonus of up to 20% of base salary from 1 July 2016.
Ella McDougall
Eligible for an annual bonus of up to 20% of base salary from 1 July 2016.
d. Share-based remuneration
As part of the listing on the Australian Securities Exchange, shares were issued to certain eligible employees in Australia for
nil consideration as part of listing success milestones and as reward for service to the Company. The $1.00 fair value per
share to the Company is included as an expense in the profit and loss statement. The total remuneration in shares for each
key management person is included as part of their remuneration in Part b of this Remuneration Report under Share-based
payments.
e. Bonuses included in remuneration
Details of the short-term incentive cash bonuses awarded as remuneration to each key management personnel, the percentage
of the available bonus that was paid and payable in the financial year, and the percentage that was forfeited because the person
did not meet the service and performance criteria is set out below. The bonus to Corne Loots is payable upon completion of
twelve months service on 1 December 2016.
34
Apiam Animal Health Limited
Executive Directors
Included in remuneration
($)
Percentage vested
during the year
Percentage forfeited
during the year
Chris Richards
Other
Corne Loots
Julie Tippett
Matthew White
Ella McDougall
-
$50,000
-
$95,000
-
-
100%
-
100%
-
-
-
-
-
-
f. Non-Executive Director remuneration
Clause 13.1(a) of the Company’s Constitution (Constitution) provides the limit for the aggregated remuneration of non-executive
directors which is currently set at $750,000. The Directors of the Company are entitled to apportion and distribute this aggregate
Non-Executive Directors’ remuneration as they determine.
The Non-Executive Directors of the Company received the following fees (which total $300,000):
• Chairman (One): $120,000 per annum;
• Directors (Three): $60,000 per annum, each; and
• Chair of the Audit and Risk Management Committee $10,000 (in addition to the directors fees), such amounts being inclusive
of any superannuation payments.
The ASX Listing Rules and Constitution allows the Company to increase the aggregate amount of remuneration payable to Non-
Executive Directors of the Company pursuant to Shareholder approval at a general meeting, noting that the Company has not
yet held its first annual general meeting.
g. Other information
Options held by key management personnel
There were no options to acquire shares in the Company held during the 2016 reporting period by key management personnel
of the Group, including their related parties.
Shares held by key management personnel
The number of ordinary shares held in the Company at 30 June 2016 held by each of the Group’s key management personnel,
including their related parties, is set out below:
Personnel
Chris Richards
Andrew Vizard
Charles Sitch
Richard Dennis
Michael van
Blommestein
Corne Loots
Julie Tippett
Matthew White
Ella McDougall
Balance at
1/07/2015
Granted as
remuneration
Received on
exercise
1
-
-
-
-
-
-
-
-
1
-
-
-
-
-
50,000
200,000
30,000
100,000
380,000
-
-
-
-
-
-
-
-
-
Other changes
26,852,303
Held as at
30/06/2016
26,852,304
30,000
150,000
50,000
100,000
36,689
-
50,000
-
30,000
150,000
50,000
100,000
86,689
200,000
80,000
100,000
27,268,992
27,648,993
None of the shares included in the table above are held nominally by key management personnel.
35
Annual Report 2016 Loans to key management personnel
The Group entered into a loan facility agreement with Chris Richards, under which the Group agreed to lend up to $1.5 million.
The loan is at an interest rate equal to the Term Debt Facility interest payable by the Group plus 2% per annum. The table below
provides aggregate information relating to Group’s loans to key management personnel during the year:
Balance at the start of the year
Loans advanced
Interest paid and payable for the
year
Repayments made
Balance at the end of the year
2016
$
133
1,229
15
(1,377)
-
The number of key management personnel included in the Group aggregate at year end is Nil. The Group does not have an
allowance account for receivables relating to outstanding loans and has not recognised any expense for impaired receivables
during reporting period.
Other transactions with key management personnel
The Group rents premises at Piper Lane, Bendigo East, Victoria. The premises are owned by an entity associated with Chris
Richards. Rent payments made amounted to $160,000 (2015: Nil).
The Group rents premises at Rubicon Street, Smithton, Tasmania. The premises are owned by an entity associated with Chris
Richards. Rent payments made amounted to $73,515 (2015: Nil).
The Group leases it artificial insemination facility in Victoria from entities associated with Chris Richards. Lease payments made
amounted to $43,147 (2015: Nil).
All related party rentals are based on commercial rates and the terms of the lease are standard commercial terms.
The Group has entered into an intellectual property licence with iVet Pty Ltd, a company controlled by Chris Richards, to use the
iVet intellectual property. The Group will pay iVet Pty Ltd a royalty of 10% of net sales revenue received by the Group for the use
of the intellectual property licence. The agreement is for an initial term of 10 years. The group has the option to purchase the iVet
technology by giving notice to iVet Pty Ltd at any time during the initial 5 years of the term. No payments were made during the
financial year (2015: Nil).
The Group obtains air travel services for business purposes from an entity associated with Chris Richards. The fares paid are
based on commercial fares. Payments made amounted to $121,257 (2015: Nil).
36
Apiam Animal Health Limited
AUDITOR’S INDEPENDENCE DECLARATION
19
78
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
The Rialto, Level 30
525 Collins St
T +61 3 8320 2222
Melbourne Victoria 3000
F +61 3 8320 2200
E info.vic@au.gt.com
Correspondence to:
W www.grantthornton.com.au
GPO Box 4736
Melbourne Victoria 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Apiam Animal Health Limited
Independent Auditor’s Report
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
auditor for the audit of Apiam Animal Health Limited for the year ended 30 June 2016, I
declare that, to the best of my knowledge and belief, there have been:
To the Members of Apiam Animal Health Limited
Report on the financial report
a
b
no contraventions of the auditor independence requirements of the Corporations Act
2001 in relation to the audit; and
We have audited the accompanying financial report of Apiam Animal Health Limited (the
“Company”), which comprises the consolidated statement of financial position as at 30 June
2016, the consolidated statement of profit or loss and other comprehensive income,
no contraventions of any applicable code of professional conduct in relation to the
consolidated statement of changes in equity and consolidated statement of cash flows for
audit.
the year then ended, notes comprising a summary of significant accounting policies and
other explanatory information and the Directors’ declaration of the consolidated entity
comprising the Company and the entities it controlled at year end or from time to time
during the financial year.
Directors’ responsibility for the financial report
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
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. The Directors’ responsibility also includes such internal control as
the Directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or
error. The Directors also state, in the notes to the financial report, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, the financial
statements comply with International Financial Reporting Standards.
Adam Pitts
Partner - Audit & Assurance
Auditor’s responsibility
Melbourne, 25 August 2016
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. Those standards
require us to 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.
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a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
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
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
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is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
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context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.
37
Annual Report 2016
38
Apiam Animal Health Limited STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
Notes
2016
$’000
2015
$’000
Revenue
Expenses
Changes in inventories
Costs of materials
Costs of consumables and services
Employee benefits expense
Listing & acquisition expenses
Property expenses
Freight vehicle & transport expenses
Depreciation of property, plant and equipment
Other operating expenses
Finance costs
Other financial items
Profit / (Loss) before income tax
Income tax (expense) / benefit
Profit / (Loss) for the year
Other comprehensive income
Other comprehensive income for the
period, net of tax
Total comprehensive income / (loss) for the
period
Profit / (Loss) for the year attributable to:
• non-controlling interest
• owners of the parent
Total comprehensive income attributable to:
• non-controlling interest
• owners of the parent
6
54,097
1,703
(30,470)
(472)
(15,377)
(2,026)
(1,410)
(1,456)
(614)
(2,466)
(434)
(7)
1,068
(975)
93
-
93
43
50
43
50
26
13
7
7
8
23
23
Earnings per share
Basic earnings per share:
Diluted earnings per share:
Notes
24
2016
0.08 cents
0.08 cents
Note: This statement should be read in conjunction with the notes to the financial statements.
-
-
-
-
-
-
-
-
-
(218)
-
-
(218)
31
(187)
-
(187)
-
(187)
-
(187)
2015
($187,000)
($187,000)
39
Annual Report 2016 STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Current tax liabilities
Borrowings
Provisions
Other current liabilities
Current liabilities
Non-current liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets/(liabilities)
Equity
Equity attributable to owners of the parent:
• share capital
• convertible notes
• corporate re-organisation reserve
• non-controlling interest acquisition reserve
• accumulated losses
Non-controlling interest
Total equity/(deficiency)
Notes
9
10
11
12
13
14
15
16
17
18
19
20
18
19
21.1
21.2
22
22
23
2016
$’000
2,117
13,254
10,181
376
25,928
4,496
44,702
2,960
52,158
78,086
9,491
1,366
4,148
3,453
1,250
19,708
11,864
243
12,107
31,815
46,271
79,070
-
(26,666)
(6,615)
(137)
45,652
619
46,271
2015
$’000
20
15
-
-
35
-
-
31
31
66
113
-
-
-
-
113
-
-
-
113
(47)
-
140
-
-
(187)
(47)
-
(47)
Note: This statement should be read in conjunction with the notes to the financial statements.
40
Apiam Animal Health Limited STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
Note
Share
capital
Convertible
notes
Corporate
re-organisation
reserve
Non-
controlling
interest
acquisition
reserve
Retained
earnings
Total
attributable
to owners
of parent
Non-
controlling
interest
Total
equity
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
-
-
-
-
-
-
-
-
285
21
21
21,26
1,360
Balance at 25 March 2015
Transactions with owners
Issue of convertible notes
Total transactions with
owners
Comprehensive income
Loss for the period
Total comprehensive
income/(loss)
Balance at 30 June 2015
Balance at 1 July 2015
Transactions with owners
Issue of convertible notes
Conversion of convertible
notes
Employee share based
payments
Restructure and transfer of
Chris Richards entities into
Apiam
Issue of shares to vendors of
businesses acquired
21,31 30,633
21,32 25,904
Issue of new share capital
21 23,000
21 (3,017)
21
905
Transaction costs relating to
issue of share capital
Income tax benefit relating to
transaction costs
Total transactions with
owners
Comprehensive income
-
140
140
-
-
140
140
145
(285)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(26,666)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(6,615)
-
-
-
-
-
-
-
140
140
(187)
(187)
(187)
(187)
(187)
(47)
(187)
(47)
145
-
1,360
-
-
-
-
-
-
-
-
-
-
-
140
140
(187)
(187)
(47)
(47)
145
-
1,360
3,967
-
3,967
19,289
576 19,865
23,000
(3,017)
905
- 23,000
-
-
(3,017)
905
45,649
576 46,225
-
-
-
-
-
-
-
-
-
79,070
(140)
(26,666)
(6,615)
Profit for the year
23
Total comprehensive
income
-
-
Balance at 30 June 2016
79,070
-
-
-
-
-
-
-
50
50
50
50
43
43
93
93
(26,666)
(6,615)
(137)
45,652
619 46,271
Note: This statement should be read in conjunction with the notes to the financial statements.
41
Annual Report 2016 STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
Operating activities
Receipts from customers
Payments to suppliers and employees
Interest paid
Transaction costs in relation to
restructures
Transaction costs in relation to
acquisitions
Income taxes paid
Net cash used in operating activities
Investing activities
Purchases of property, plant and
equipment
Purchases of intangible assets
Restructure of group entities, net of cash
Acquisition of subsidiaries, net of cash
Net cash used in investing activities
Financing activities
Proceeds from borrowings
Repayments of borrowings
Borrowing transaction costs
Repayments of lease liabilities
Loans made to director related entity
Repayments from director related entity
Proceeds from issue of share capital
Share issue transaction costs
Proceeds from issue of convertible notes
Net cash inflow from financing
activities
Net change in cash and cash equivalents
Cash and cash equivalents, beginning of
year
Cash and cash equivalents, end of
year
Notes
7
31
32
25
31
32
9
2016
$’000
59,010
(56,992)
(434)
(640)
(934)
(1,247)
(1,237)
(295)
(80)
(615)
(24,068)
(25,058)
21,797
(13,281)
(68)
(317)
(1,229)
1,362
23,000
(3,017)
145
28,392
2,097
20
2,117
2015
$’000
-
(163)
-
-
-
-
(163)
-
-
-
-
-
-
-
-
-
-
43
-
-
140
183
20
-
20
Note: This statement should be read in conjunction with the notes to the financial statements.
42
Apiam Animal Health Limited
43
Annual Report 2016 NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
1. NATURE OF OPERATIONS
Apiam Animal Health Limited and subsidiaries’ (‘the Group’) principal activities include the provision of veterinary products and
services to production and companion animals. Apiam’s strategy is to service production animals throughout their life cycle,
including the provision of:
• systems to assist in herd health programs;
• production advice;
• consulting services and products to assist in the prevention of animal diseases;
•
technologies to manage compliance with legislative requirements on pharmaceutical use;
• advice and services in respect of animal welfare compliance;
•
retail animal health product sales;
• on-farm delivery of products via its own logistics capability;
•
•
third party auditing services of industry quality assurance programs;
technology development for animal health management;
• ancillary services such as sales and/or delivery of genetics and associated products; and
• on-farm and on-line training programs for clients.
There have been no significant changes in the nature of these activities during the year.
2. GENERAL INFORMATION AND STATEMENT OF COMPLIANCE
The consolidated general purpose financial statements of the Group have been prepared in accordance with the requirements
of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian
Accounting Standards Board (AASB). Compliance with Australian Accounting Standards results in full compliance with the
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Apiam
Animal Health Limited is a for-profit entity for the purpose of preparing the financial statements.
Apiam Animal Health Limited is the Group’s Ultimate Parent Company. Apiam Animal Health Limited is a Public Company
incorporated and domiciled in Australia. The address of its registered office is 61 Bull Street, Bendigo, Victoria 3550. The
address of its principal place of business is 27-33 Pipers Lane, East Bendigo, Victoria 3550.
The consolidated financial statements for the year ended 30 June 2016 were approved and authorised for issue by the Board of
Directors on 25 August 2016.
Comparative information
The Company was incorporated on 25 March 2015. The comparative information relates to the period 25 March 2015 to 30
June 2015.
44
Apiam Animal Health Limited 3. CHANGES IN ACCOUNTING POLICIES
3.1 NEW AND REVISED STANDARDS THAT ARE EFFECTIVE FOR THESE FINANCIAL STATEMENTS
A number of new and revised standards became effective for the first time to annual periods beginning on or after 1 January
2015. Information on the more significant standard(s) is presented below. The adoption of these new and revised standards has
not had a material impact on the Group as they are largely of the nature of clarification of existing requirements.
3.2 ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE AND NOT BEEN ADOPTED EARLY
BY THE GROUP
3.2.1 Revised pronouncement: AASB 9 Financial Instruments (December 2014)
Superseded pronouncement - AASB 139 Financial Instruments: Recognition and Measurement, Effective date - 1 January
2018.
Nature of change
AASB 9 introduces new requirements for the classification and measurement of financial assets and liabilities and includes a
forward-looking ‘expected loss’ impairment model and a substantially-changed approach to hedge accounting.
These requirements improve and simplify the approach for classification and measurement of financial assets compared with the
requirements of AASB 139. The main changes are:
a. Financial assets that are debt instruments will be classified based on: (i) the objective of the entity’s business model for
managing the financial assets; and (ii) the characteristics of the contractual cash flows.
b. Allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that
are not held for trading in other comprehensive income (instead of in profit or loss). Dividends in respect of these investments
that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the
instrument.
c. Introduces a ‘fair value through other comprehensive income’ measurement category for particular simple debt instruments.
d. Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so
eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets
or liabilities, or recognising the gains and losses on them, on different bases.
e. Where the fair value option is used for financial liabilities the change in fair value is to be accounted for as follows:
*
*
the change attributable to changes in credit risk are presented in Other Comprehensive Income (OCI)
the remaining change is presented in profit or loss
If this approach creates or enlarges an accounting mismatch in the profit or loss, the effect of the changes in credit risk are also
presented in profit or loss.
Otherwise, the following requirements have generally been carried forward unchanged from AASB 139 into AASB 9:
• classification and measurement of financial liabilities; and
• derecognition requirements for financial assets and liabilities
AASB 9 requirements regarding hedge accounting represent a substantial overhaul of hedge accounting that enable entities to
better reflect their risk management activities in the financial statements.
Furthermore, AASB 9 introduces a new impairment model based on expected credit losses. This model makes use of more
forward-looking information and applies to all financial instruments that are subject to impairment accounting.
Likely impact on initial application
The entity is yet to undertake a detailed assessment of the impact of AASB 15. However, based on the entity’s preliminary
assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the
financial statements when it is first adopted for the year ending 30 June 2019.
45
Annual Report 2016
3.2.3 Revised pronouncement: AASB 15 Revenue from Contracts with Customers
Superseded pronouncement - AASB 118 Revenue
Nature of change
•
replaces AASB 118 Revenue, AASB 111 Construction Contracts and some revenue-related Interpretations:
• establishes a new revenue recognition model
• changes the basis for deciding whether revenue is to be recognised over time or at a point in time
• provides new and more detailed guidance on specific topics (e.g. multiple element arrangements, variable pricing, rights of
return, warranties and licensing)
• expands and improves disclosures about revenue
Likely impact on initial application
The entity is yet to undertake a detailed assessment of the impact of AASB 15. However, based on the entity’s preliminary
assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the
financial statements when it is first adopted for the year ending 30 June 2019.
3.2.3 Revised pronouncement: AASB 16 Leases
Superseded pronouncement - AASB 117 Leases, Effective date - 1 January 2019
Nature of change
•
•
replaces AASB 117 Leases and some lease-related Interpretations
requires all leases to be accounted for ‘on-balance sheet’ by lessees, other than short-term and low value asset leases
• provides new guidance on the application of the definition of lease and on sale and lease back accounting
•
•
largely retains the existing lessor accounting requirements in AASB 117
requires new and different disclosures about leases
Likely impact on initial application
The entity is yet to undertake a detailed assessment of the impact of AASB 16. However, based upon the entity’s preliminary
assessment, the likely impact on the first time adoption of the Standard for the year ending 30 June 2020 includes:
•
•
there will be a significant increase in lease assets and financial liabilities recognised on the balance sheet,
the reported equity will reduce as the carrying amount of lease assets will reduce more quickly than the carrying amount of
lease liabilities,
• EBIT in the statement of profit or loss and other comprehensive income will be higher as the implicit interest in lease
payments for former off balance sheet leases will be presented as part of finance costs rather than being included in
operating expenses,
• Operating cash outflows will be lower and financing cash flows will be higher in the statement of cash flows as principal
repayments on all lease liabilities will now be included in financing activities rather than operating activities. Interest can also
be included within financing activities.
4. SUMMARY OF ACCOUNTING POLICIES
4.0 OVERALL CONSIDERATIONS
The consolidated financial statements have been prepared using the significant accounting policies and measurement bases
summarised below.
4.1 BASIS OF CONSOLIDATION
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30 June 2016. The
parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the
ability to affect those returns through its power over the subsidiary. All subsidiaries have a reporting date of 30 June.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses
on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation,
the underlying asset is also tested for impairment from a group perspective. Amounts reported in the financial statements of
46
Apiam Animal Health Limited subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the
effective date of acquisition, or up to the effective date of disposal, as applicable.
Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit or loss and net assets that
is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries between the owners of the
parent and the non-controlling interests based on their respective ownership interests.
4.2 BUSINESS COMBINATION
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the
Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities
incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a
contingent consideration arrangement. Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they
have been previously recognised in the acquiree’s financial statements prior to the acquisition. Assets acquired and liabilities
assumed are generally measured at their acquisition-date fair values.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of: (a) fair
value of consideration transferred, (b) the recognised amount of any non-controlling interest in the acquire, and (c) acquisition-
date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the
fair values of identifiable net assets exceed the sum calculated above, the excess amount (ie gain on a bargain purchase) is
recognised in profit or loss immediately.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional
amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed at acquisition date. The measurement period ends on either
the earlier of (i) 12 months from the date of acquisition or (ii) when the acquirer receives all the information possible to determine
fair value.
Business combinations under common control are accounted for in the accounts prospectively from the date the group obtains
the ownership interest.
Assets and liabilities are recognised upon consolidation at their existing carrying amount in the financial statements of the
Acquiree. Any difference between the fair value of the consideration paid and the acquisition date fair values at which the assets
and liabilities are recorded is recognised directly in the Corporate re-organisation reserve in equity.
4.3 FOREIGN CURRENCY TRANSLATION
Functional and presentation currency
The consolidated financial statements are presented in Australian Dollars ($AUD), which is also the functional currency of the
Parent Company.
Foreign currency transactions and balances
Foreign currency transactions are translated into the functional currency of the respective Group entity, using the exchange rates
prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement
of such transactions and from the re-measurement of monetary items at year end exchange rates are recognised in profit or
loss.
Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the exchange rates at
the date of the transaction), except for non-monetary items measured at fair value which are translated using the exchange rates
at the date when fair value was determined.
4.4 SEGMENT REPORTING
Apiam operates on a consolidated basis being the provision of veterinary services and sale of veterinary products across
Australia. There are currently no segments being reported on and the chief operating decision makers review the consolidated
results of the business.
47
Annual Report 2016 48
Apiam Animal Health Limited 4.5 REVENUE
Revenue is recognised when it is probable that the economic benefit will flow to the consolidated entity and the revenue can be
reliably measured. Revenue is measured at the fair value of the consideration received or receivable. Revenue from veterinary
services is recognised in accounting period in which the services are provided. Revenue from the sale of goods is recognised
when the risk and rewards have transferred to the customer which is generally upon receipt of the goods.
Interest and dividend income
Interest income and expenses are reported on an accrual basis using the effective interest method. Dividends, other than those
from investments in associates, are recognised at the time the right to receive payment is established.
4.6 OPERATING EXPENSES
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin. Expenditure for
warranties is recognised and charged against the associated provision when the related revenue is recognised.
4.7 BORROWING COSTS
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during
the period of time that is necessary to complete and prepare the asset for its intended use or sale. Other borrowing costs are
expensed in the period in which they are incurred and reported in finance costs (see Note 7).
4.8
INTANGIBLE ASSETS
Goodwill
Goodwill represents the future economic benefits arising from a business combination that are not individually identified and
separately recognised. See Note 4.2 for information on how goodwill is initially determined. Goodwill is carried at cost less
accumulated impairment losses. Refer to Note 4.11 for a description of impairment testing procedures.
Capitalised development costs
Capitalised development costs are measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised on a straight-line basis over its useful life of 10 years from the date of use.
4.9 PROPERTY, PLANT AND EQUIPMENT
Leasehold improvements, plant and equipment and motor vehicles
Leasehold improvements, plant and equipment and motor vehicles are initially recognised at acquisition cost or manufacturing
cost, including any costs directly attributable to bringing the assets to the location and condition necessary for it to be capable
of operating in the manner intended by the Group’s management. Plant and equipment and motor vehicles also include property
held under finance lease (see Note 4.10). Leasehold improvements, plant and equipment and motor vehicles are subsequently
measured using the cost model, cost less subsequent depreciation and impairment losses.
Depreciation is recognised on a straight-line basis to write down the cost less estimated residual value of buildings, IT equipment
and other equipment. The following useful lives are applied:
• Leasehold improvements: 10 - 33%
• Plant & equipment: 10 – 33%
• Motor vehicles: 25%
In the case of leasehold property, expected useful lives are determined by reference to comparable owned assets or over the
term of the lease, if shorter.
Material residual value estimates and estimates of useful life are updated as required, but at least annually.
Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal
proceeds and the carrying amount of the assets and are recognised in profit or loss within other income or other expenses.
49
Annual Report 2016 4.10 LEASED ASSETS
Finance leases
The economic ownership of a leased asset is transferred to
the lessee if the lessee bears substantially all the risks and
rewards of ownership of the leased asset. Where the Group
is a lessee in this type of arrangement, the related asset is
recognised at the inception of the lease at the fair value of
the leased asset or, if lower, the present value of the lease
payments plus incidental payments, if any. A corresponding
amount is recognised as a finance lease liability. Leases of
land and buildings are classified separately and are split
into a land and a building element, in accordance with the
relative fair values of the leasehold interests at the date the
asset is recognised initially.
See Note 4.9 for the depreciation methods and useful lives
for assets held under finance lease. The corresponding
finance lease liability is reduced by lease payments net of
finance charges. The interest element of lease payments
represents a constant proportion of the outstanding capital
balance and is charged to profit or loss, as finance costs
over the period of the lease.
Operating leases
All other leases are treated as operating leases. Where the
Group is a lessee, payments on operating lease agreements
are recognised as an expense on a straight-line basis over
the lease term. Associated costs, such as maintenance and
insurance, are expensed as incurred.
4.11 IMPAIRMENT TESTING OF GOODWILL,
OTHER INTANGIBLE ASSETS AND
PROPERTY, PLANT AND EQUIPMENT
For impairment assessment purposes, assets are grouped
at the lowest levels for which there are largely independent
cash inflows (cash-generating units). As a result, some
assets are tested individually for impairment and some are
tested at cash-generating unit level. Goodwill is allocated
to those cash-generating units that are expected to
benefit from synergies of the related business combination
and represent the lowest level within the Group at which
management monitors goodwill.
Cash-generating units to which goodwill has been allocated
are tested for impairment at least annually. All other
individual assets or cash-generating units are tested for
impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which
the asset’s or cash-generating unit’s carrying amount
exceeds its recoverable amount, which is the higher of fair
value less costs to sell and value-in-use. To determine the
value-in-use, management estimates expected future cash
flows from each cash-generating unit and determines a
suitable interest rate in order to calculate the present value
of those cash flows. The data used for impairment testing
procedures are directly linked to the Group’s latest approved
budget, adjusted as necessary to exclude the effects of
future reorganisations and asset enhancements. Discount
factors are determined individually for each cash-generating
unit and reflect management’s assessment of respective risk
profiles, such as market and asset-specific risks factors.
Impairment losses for cash-generating units reduce first
the carrying amount of any goodwill allocated to that cash-
generating unit. Any remaining impairment loss is charged
pro rata to the other assets in the cash-generating unit.
With the exception of goodwill, all assets are subsequently
reassessed for indications that an impairment loss previously
recognised may no longer exist. An impairment charge is
reversed if the cash-generating unit’s recoverable amount
exceeds its carrying amount.
4.12 FINANCIAL INSTRUMENTS
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions
of the financial instrument, and are measured initially
at fair value adjusted by transactions costs, except for
those carried at fair value through profit or loss, which are
measured initially at fair value. Subsequent measurement of
financial assets and financial liabilities are described below.
Financial assets are derecognised when the contractual
rights to the cash flows from the financial asset expire,
or when the financial asset and all substantial risks and
rewards are transferred. A financial liability is derecognised
when it is extinguished, discharged, cancelled or expires.
Classification and subsequent measurement of
financial assets
For the purpose of subsequent measurement, financial
assets other than those designated and effective as hedging
instruments are classified into the following categories upon
initial recognition:
• Loans and receivables
• Financial assets at Fair Value Through Profit or Loss
(FVTPL)
• Available-For-Sale (AFS) financial assets
All financial assets except for those at FVTPL are subject
to review for impairment at least at each reporting date
to identify whether there is any objective evidence that a
financial asset or a group of financial assets is impaired.
Different criteria to determine impairment are applied for
each category of financial assets, which are described
below.
All income and expenses relating to financial assets that
are recognised in profit or loss are presented within finance
costs, finance income or other financial items, except for
impairment of trade receivables which is presented within
other expenses.
Loans and receivables
Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted
in an active market. After initial recognition, these are
measured at amortised cost using the effective interest
50
Apiam Animal Health Limited method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. The Group’s trade
and most other receivables fall into this category of financial instruments.
Individually significant receivables are considered for impairment when they are past due or when other objective evidence is
received that a specific counterparty will default. Receivables that are not considered to be individually impaired are reviewed for
impairment in groups, which are determined by reference to the industry and region of a counterparty and other shared credit
risk characteristics. The impairment loss estimate is then based on recent historical counterparty default rates for each identified
group.
Financial assets at FVTPL
Financial assets at FVTPL include financial assets that are either classified as held for trading or that meet certain conditions
and are designated at FVTPL upon initial recognition. All derivative financial instruments fall into this category, except for those
designated and effective as hedging instruments, for which the hedge accounting requirements apply (see below).
Assets in this category are measured at fair value with gains or losses recognised in profit or loss. The fair values of financial
assets in this category are determined by reference to active market transactions or using a valuation technique where no active
market exists.
AFS financial assets
AFS financial assets are non-derivative financial assets that are either designated to this category or do not qualify for inclusion in
any of the other categories of financial assets.
All other AFS financial assets are measured at fair value. Gains and losses are recognised in other comprehensive income and
reported within the AFS reserve within equity, except for impairment losses and foreign exchange differences on monetary
assets, which are recognised in profit or loss. When the asset is disposed of or is determined to be impaired the cumulative
gain or loss recognised in other comprehensive income is reclassified from the equity reserve to profit or loss and presented
as a reclassification adjustment within other comprehensive income. Interest calculated using the effective interest method and
dividends are recognised in profit or loss within ‘finance income’ (see Note 4.5).
Reversals of impairment losses for AFS debt securities are recognised in profit or loss if the reversal can be objectively related
to an event occurring after the impairment loss was recognised. For AFS equity investments impairment reversals are not
recognised in profit loss and any subsequent increase in fair value is recognised in other comprehensive income.
Classification and subsequent measurement of financial liabilities
The Group’s financial liabilities include borrowings, trade and other payables and derivative financial instruments.
Financial liabilities are measured subsequently at amortised cost using the effective interest method, except for financial liabilities
held for trading or designated at FVTPL, that are carried subsequently at fair value with gains or losses recognised in profit
or loss. All derivative financial instruments that are not designated and effective as hedging instruments are accounted for at
FVTPL.
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included
within finance costs or finance income.
4.13 INVENTORIES
Inventories are stated at the lower of cost and net realisable value. Costs are assigned on the basis of weighted average cost.
Net realisable value is the estimated selling price in the ordinary course of business less any applicable selling expenses.
51
Annual Report 2016 4.14 INCOME TAXES
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other
comprehensive income or directly in equity.
Current income tax assets and/or liabilities comprise those obligations to, or claims from, the Australian Taxation Office (ATO)
and other fiscal authorities relating to the current or prior reporting periods that are unpaid at the reporting date. Current tax is
payable on taxable profit, which differs from profit or loss in the financial statements. Calculation of current tax is based on tax
rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of
assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill or on the
initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting
profit. Deferred tax on temporary differences associated with investments in subsidiaries and joint ventures is not provided
if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the
foreseeable future.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective
period of realisation, provided they are enacted or substantively enacted by the end of the reporting period.
Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised against future taxable
income, based on the Group’s forecast of future operating results which is adjusted for significant non-taxable income and
expenses and specific limits to the use of any unused tax loss or credit. Deferred tax liabilities are always provided for in full.
Deferred tax assets and liabilities are offset only when the Group has a right and intention to set off current tax assets and
liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit or loss, except
where they relate to items that are recognised in other comprehensive income (such as the revaluation of land) or directly in
equity, in which case the related deferred tax is also recognised in other comprehensive income or equity, respectively.
4.15 CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid
investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in
value.
4.16 EQUITY, RESERVES AND DIVIDEND PAYMENTS
Share capital
Share capital represents the fair value of shares that have been issued. Any transaction costs associated with the issuing of
shares are deducted from share capital, net of any related income tax benefits.
Corporate re-organisation reserve
The Corporate re-organisation reserve represents the difference between the fair value of the consideration paid and the fair
value of assets and liabilities acquired in a business combination whereby the business acquired was under common control at
the date of acquisition.
Non-controlling interest acquisition reserve
The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity
owners of the group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling
and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the
adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within equity
attributable to owners.
Non-controlling interest
Represents the portion of the net assets of subsidiary’s that are not 100% owned by the Company.
Retained earnings
Retained earnings include all current and prior period retained profits.
Dividend distributions payable to equity shareholders are included in other liabilities when the dividends have been approved in a
general meeting prior to the reporting date.
All transactions with owners of the parent are recorded separately within equity.
52
Apiam Animal Health Limited 4.17 EMPLOYEE BENEFITS
Short-term employee benefits
Short-term employee benefits are benefits, other than termination benefits, that are expected to be settled wholly within twelve
(12) months after the end of the period in which the employees render the related service. Examples of such benefits include
wages and salaries, non-monetary benefits and accumulating sick leave. Short-term employee benefits are measured at the
undiscounted amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
The Group’s liabilities for annual leave and long service leave are included in other long term benefits as they are not expected to
be settled wholly within twelve (12) months after the end of the period in which the employees render the related service. They
are measured at the present value of the expected future payments to be made to employees. The expected future payments
incorporate anticipated future wage and salary levels, experience of employee departures and periods of service, and are
discounted at rates determined by reference to market yields at the end of the reporting period on high quality corporate bonds
that have maturity dates that approximate the timing of the estimated future cash outflows. Any re-measurements arising from
experience adjustments and changes in assumptions are recognised in profit or loss in the periods in which the changes occur.
The Group presents employee benefit obligations as current liabilities in the statement of financial position if the Group does not
have an unconditional right to defer settlement for at least twelve (12) months after the reporting period, irrespective of when the
actual settlement is expected to take place.
Post-employment benefit plans
The Group provides post-employment benefits through various defined contribution and defined benefit plans.
4.18 SHARE-BASED EMPLOYEE REMUNERATION
The Group operates equity-settled share-based remuneration plans for its employees. None of the Group’s plans feature any
options for a cash settlement.
All goods and services received in exchange for the grant of any share-based payment are measured at their fair values.
Where employees are rewarded using share-based payments, the fair values of employees’ services are determined indirectly
by reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date and excludes the
impact of non-market vesting conditions (for example profitability and sales growth targets and performance conditions).
4.19 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions for product warranties, legal disputes, onerous contracts or other claims are recognised when the Group has a
present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic resources will be
required from the Group and amounts can be estimated reliably. Timing or amount of the outflow may still be uncertain.
Restructuring provisions are recognised only if a detailed formal plan for the restructuring has been developed and implemented,
or management has at least announced the plan’s main features to those affected by it. Provisions are not recognised for future
operating losses.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable
evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Where there
are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the
class of obligations as a whole. Provisions are discounted to their present values, where the time value of money is material.
Any reimbursement that the Group can be virtually certain to collect from a third party with respect to the obligation is
recognised as a separate asset. However, this asset may not exceed the amount of the related provision.
No liability is recognised if an outflow of economic resources as a result of present obligation is not probable. Such situations are
disclosed as contingent liabilities, unless the outflow of resources is remote in which case no liability is recognised.
4.20 GOODS AND SERVICES TAX (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or
as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST components of investing and
financing activities, which are disclosed as operating cash flows.
53
Annual Report 2016 4.21 ROUNDING OF AMOUNTS
The Parent Entity has applied the relief available to it
under ASIC Corporations (Rounding in Financial/Directors’
Reports) Instruments 2016/191 and accordingly, amounts
in the financial statements and directors’ report have been
rounded off to the nearest $1,000, or in certain cases, the
nearest dollar.
4.22 SIGNIFICANT MANAGEMENT JUDGEMENT
IN APPLYING ACCOUNTING POLICIES
When preparing the financial statements, management
undertakes a number of judgements, estimates and
assumptions about the recognition and measurement of
assets, liabilities, income and expenses.
Significant management judgement
The following are significant management judgements in
applying the accounting policies of the Group that have the
most significant effect on the financial statements.
Recognition of deferred tax assets
The extent to which deferred tax assets can be recognised
is based on an assessment of the probability of the Group’s
future taxable income against which the deferred tax assets
can be utilised. In addition, significant judgement is required
in assessing the impact of any legal or economic limits or
uncertainties in various tax jurisdictions (see Note 4.14).
Estimation uncertainty
Information about estimates and assumptions that have the
most significant effect on recognition and measurement of
assets, liabilities, income and expenses is provided below.
Actual results may be substantially different.
Impairment
In assessing impairment, management estimates the
recoverable amount of each asset or cash-generating unit
based on expected future cash flows and uses an interest
rate to discount them. Estimation uncertainty relates
to assumptions about future operating results and the
determination of a suitable discount rate (see Note 4.11).
Useful lives of depreciable assets
Management reviews its estimate of the useful lives of
depreciable assets at each reporting date, based on
the expected utility of the assets. Uncertainties in these
estimates relate to technical obsolescence that may change
the utility of certain software and IT equipment.
Trade receivables
Management estimates the recoverable amount of any
outstanding trade receivable balances at reporting date and
recognises an allowance for impairment if required.
Inventories
Management estimates the net realisable values of
inventories, taking into account the most reliable evidence
available at each reporting date. The future realisation of
these inventories may be affected by future technology or
other market-driven changes that may reduce future selling
prices.
Business combinations
Management uses valuation techniques in determining
the fair values of the various elements of a business
combination (see Note 4.2). Particularly, the fair value of
contingent consideration is dependent on the outcome of
many variables that affect future profitability (see Note 20).
5. SEGMENT REPORTING
Apiam operates on a consolidated basis being the provision
of veterinary services and sale of veterinary products across
Australia. There are currently no segments being reported
on and the chief operating decision makers review the
consolidated results of the business.
6. REVENUE
Sales revenue
Sale of goods
Rendering of services
Total revenue
2016
$’000
41,822
12,275
54,097
2015
$’000
-
-
-
54
Apiam Animal Health Limited
7. EXPENSES
Profit before income tax includes the following specific expenses:
Depreciation
Leasehold improvements
Plant and equipment
Motor vehicles
Total depreciation
Finance costs
Interest expenses for borrowings at amortised cost
• other borrowings at amortised cost
Interest expenses for finance lease arrangements
Total interest expenses for financial liabilities not at FVTPL
Other financial items – amortisation of borrowing costs
Share-based payments expense
Rental
8.
INCOME TAX EXPENSE
2016
$’000
6
321
287
614
413
21
434
7
1,360
876
2015
$’000
-
-
-
-
-
-
-
-
-
-
-
The major components of tax expense and the reconciliation of the expected tax expense based on the domestic effective tax
rate of Apiam at 30% (2015: 30%) and the reported tax expense in profit or loss are as follows:
Profit /(loss) before tax
Domestic tax rate for Apiam Animal Health Limited - 30%
Expected tax expense / (benefit)
Adjustment for non-deductible expenses:
• Share based payments expense
• Stamp duty on acquisitions
• Other non-deductible expenses
Actual tax expense / (benefit)
Tax expense/(benefit) comprises:
• current tax expense/(benefit)
• deferred tax expense/(benefit)
Tax expense/(benefit)
Note 15 provides information on deferred tax assets and liabilities.
9. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Cash and cash equivalents
2016
$’000
1,068
320
408
243
4
975
823
(1,798)
975
2016
$’000
2,117
2,117
2015
$’000
(218)
(65)
-
-
34
(31)
(31)
-
(31)
2015
$’000
20
20
55
Annual Report 2016
10. TRADE AND OTHER RECEIVABLES
Trade receivables, gross
Less: provision for impairment of receivables
Trade receivables
Other receivables
Rebates receivable
2016
$’000
12,462
(137)
12,325
168
761
13,254
2015
$’000
-
-
-
15
-
15
All amounts are short-term. The net carrying value of trade receivables is considered a reasonable approximation of fair value.
All of the Group’s trade and other receivables have been reviewed for indicators of impairment. Certain trade receivables were
found to be impaired and an allowance for credit losses of $137,000 (2015: $Nil) has been recorded accordingly within other
expenses.
The movement in the allowance for credit losses can be reconciled as follows:
Balance at 1 July
Amounts written off (uncollectable)
Impairment loss
Impairment loss reversed
Balance 30 June
An analysis of unimpaired trade receivables that are past due is given in Note 35.3.
11. INVENTORIES
Stock on hand, at cost
Less provision for obsolescence
Stock in transit, at cost
12. OTHER CURRENT ASSETS
Prepayments
Security deposits
2016
$’000
-
-
137
-
137
2016
$’000
9,828
(100)
453
10,181
2016
$’000
311
65
376
2015
$’000
-
-
-
-
-
2015
$’000
-
-
-
-
2015
$’000
-
-
-
56
Apiam Animal Health Limited
13. PROPERTY, PLANT AND EQUIPMENT
Details of the Group’s property, plant and equipment and their carrying amount are as follows:
Leasehold
improvements
Plant &
equipment
Motor vehicles
Gross carrying amount
Balance 1 July 2015
Additions
Acquisition through business
combination
Balance 30 June 2016
Depreciation and impairment
Balance 1 July 2015
Depreciation
Balance 30 June 2016
Carrying amount 30 June 2016
Gross carrying amount
Balance 25 March 2015
Additions
Balance 30 June 2015
Depreciation and impairment
Balance 25 March 2015
Depreciation
Balance 30 June 2015
Carrying amount 30 June 2015
$’000
-
54
98
152
-
(6)
(6)
146
-
-
-
-
-
-
-
$’000
-
248
2,651
2,899
-
(321)
(321)
2,578
-
-
-
-
-
-
-
$’000
-
150
1,909
2,059
-
(287)
(287)
1,772
-
-
-
-
-
-
-
Refer to Note 30 for capital commitments relating to vehicle leases.
Total
$’000
-
452
4,658
5,110
-
(614)
(614)
4,496
-
-
-
-
-
-
-
57
Annual Report 2016
2016
$’000
44,622
80
44,702
2016
$’000
-
44,622
44,622
-
-
-
44,622
2016
$’000
-
80
80
-
-
-
-
80
2015
$’000
-
-
-
2015
$’000
-
-
-
-
-
-
-
2015
$’000
-
-
-
-
-
-
-
-
14. INTANGIBLE ASSETS
Goodwill
Capitalised development costs
The movements in the net carrying amount of intangible assets are as follows:
Goodwill
Gross carrying amount
Balance 1 July
Acquired through business combination
Balance 30 June
Accumulated impairment
Balance 1 July
Impairment loss recognised
Balance 30 June
Carrying amount at 30 June
Capitalised development costs
Gross carrying amount
Balance 1 July
Additions
Balance 30 June
Accumulated impairment
Balance 1 July
Amortisation expense
Impairment loss recognised
Balance 30 June
Carrying amount at 30 June
58
Apiam Animal Health Limited
14.1 IMPAIRMENT TESTING
Apiam will monitor the performance of its business in FY17 at species level but has tested goodwill for impairment in FY16 at the
clinic level as this represents the cash generating units as at 30 June 2016.
Goodwill is allocated to cash generating units for the purpose of impairment testing. The allocation is made to those cash
generating units that are expected to benefit from the business combination in which the goodwill arose. The units are identified
at the lowest level at which goodwill is monitored for internal management purposes, being the nine (9) individual veterinary clinic
entities.
The recoverable amounts of the cash-generating units were determined based on value-in-use calculations, covering a detailed
five (5) year forecast, followed by an extrapolation of expected cash flows for the units’ remaining useful lives using the growth
rates determined by management. The present value of the expected cash flows of each segment is determined by applying the
following key assumptions:
2016
Annual sales growth %
Annual operating expenses growth rate %
Long-term growth rate %
Post-tax discount rate %
Goodwill allocation at 30 June across nine (9) individual
veterinary clinic entities
2015
5.00%
2.00%
2.50%
11.88%
2016
$’000
44,622
-
-
-
-
2015
$’000
-
The Directors and management have considered and assessed reasonably possible changes for key assumptions and have not
identified any instances that could cause the carrying amount for any of the nine (9) individual veterinary clinic entities to exceed
its recoverable amount.
14.2 GROWTH RATES
The growth rates reflect the long-term average growth rates for the industry.
14.3 DISCOUNT RATES
The discount rates reflect appropriate adjustments relating to market risk and specific risk factors of each unit.
14.4 CASH FLOW ASSUMPTIONS
Management’s key assumptions include stable profit margins, based on past experience in this market. The Group’s
management believes that this is the best available input for forecasting this mature market. Cash flow projections reflect stable
profit margins achieved immediately before the budget period. No expected efficiency improvements have been taken into
account and prices and wages reflect publicly available forecasts of inflation for the industry.
Apart from the considerations described in determining the value-in-use of the cash-generating units described above,
management is not currently aware of any other probable changes that would necessitate changes in its key estimates.
59
Annual Report 2016
15. DEFERRED TAX ASSETS AND LIABILITIES
Deferred taxes arising from temporary differences and unused tax losses can be summarised as follows:
Deferred tax liabilities /
(assets)
Current assets
Trade and other receivables
Inventories
Current liabilities
Provisions
Borrowing costs
Other
Unused tax losses
Equity raising costs
Listing and acquisition costs
Deferred tax liabilities /
(assets)
Other
Unused tax losses
1-Jul-15
$’000
Recognised
in business
combination
$’000
Recognised in
profit and loss
30-Jun-16
$’000
$’000
-
-
-
-
31
-
-
31
25-Mar-15
$’000
-
-
-
-
1,131
-
-
-
-
1,131
Recognised
in business
combination
$’000
41
30
160
(18)
690
724
171
1,798
41
30
1,291
(18)
721
724
171
2,960
Recognised in
profit and loss
30-Jun-15
$’000
$’000
-
-
31
31
31
31
All deferred tax assets (including tax losses and other tax credits) have been recognised in the statement of financial position.
16. TRADE AND OTHER PAYABLES
Current:
Trade payables
Sundry payables and accrued
expenses
Other payables
Total trade and other payables
2016
$’000
6,185
3,218
88
9,491
2015
$’000
5
65
43
113
All amounts are short-term. The carrying values of trade payables and other payables are considered to be a reasonable
approximation of fair value.
17. CURRENT TAX LIABILITIES
Current tax payable
2016
$’000
1,366
2015
$’000
-
60
Apiam Animal Health Limited
18. BORROWINGS
Current:
Bank loans (a)
Less capitalised borrowing costs
Lease liability (b)
Less deferred interest charges
Total current borrowings
Non-current:
Bank loans (a)
Less capitalised borrowing costs
Lease liability (b)
Less deferred interest charges
Total non-current borrowings
Refer to Note 40 for information on financial instruments.
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Bank loans
Less capitalised borrowing costs
Lease liability
Less deferred interest charges
2016
$’000
3,919
(13)
257
(15)
4,148
11,650
(48)
271
(9)
11,864
2016
$’000
15,569
(61)
528
(24)
16,012
Assets pledged as security
(a) Bank loans are secured by first ranking general security agreements in relation to the current and future
assets of Apiam and each wholly-owned subsidiary.
(b) The lease liabilities are effectively secured as the rights to the leased assets, recognised in
the statements of financial position, revert to the lessor in the event of default.
2015
$’000
-
-
-
-
-
-
-
-
-
-
2015
$’000
-
-
-
-
-
61
Annual Report 2016
Financing arrangements
Unrestricted assess was available at the reporting date to the following lines of credit:
Total facilities
Bank - term loan facilities
Bank – master asset finance agreement for equipment finance
Bank – overdraft facility
Bank – credit card facility
Used at reporting date
Bank - term loan facilities
Bank – master asset finance agreement for equipment finance
Bank – overdraft facility
Bank – credit card facility
Unused at reporting date
Bank - term loan facilities
Bank – master asset finance agreement for equipment
finance
Bank – overdraft facility
Bank – credit card facility
Banking covenants
The key financial covenants applicable to bank facilities are:
• Maximum gearing ratio of 35% (ratio of debt to equity):
• Maximum operating leverage ratio of 2.5 times (ratio of gross debt to EBITDA): and
• Minimum interest cover ratio of 5.0 times (ratio of EBIT to gross interest expense).
The Group complied with all bank covenants during the period.
2016
$’000
33,000
1,000
1,000
300
35,300
15,569
146
-
-
15,715
2016
$’000
17,431
854
1,000
300
19,585
19. PROVISIONS
Current:
Employee benefits
Non-current:
Employee benefits
62
2016
$’000
3,453
243
2015
$’000
-
-
-
-
-
-
-
-
-
-
-
2015
$’000
-
-
-
-
-
2015
$’000
-
-
Apiam Animal Health Limited
Employee benefits
The provision for employee benefits relates to the group’s
liability for long service leave and annual leave.
Amounts not expected to be settled within the next 12
months
The current portion of this liability includes all of the accrued
annual leave, the unconditional entitlements to long service
leave where employees have completed the required
period of service and also those where employees are
entitled to pro-rata payments in certain circumstances. The
entire amount of the provision of $3,453,000 (2015: $Nil)
is presented as current, since the group does not have
an unconditional right to defer settlement for any of these
obligations. However, based upon past experience, the
group does not expect all employees to take the full amount
of accrued leave or require payment within the next twelve
months. The group does not expect $2,071,800 (2015: $Nil)
of this liability to be taken or paid within the next 12 months.
20. OTHER CURRENT LIABILITIES
Contingent consideration
Total other current liabilities
2016
$’000
1,250
1,250
2015
$’000
-
-
This relates to contingent consideration on businesses
acquired during the year. Refer to Note 31.3 and 32.4 for
further details.
63
Annual Report 2016 21. EQUITY
21.1 SHARE CAPITAL
The share capital of Apiam consists only of fully paid ordinary shares; the shares do not have a par value. All shares are equally
eligible to receive dividends and the repayment of capital and represent one vote at the shareholders’ meeting of Apiam.
2016
Shares
2015
Shares
Shares issued and fully paid:
• beginning of the year
On 25 March 2015
initial share issue
•
On 8 December 2015
• shares issued on restructure of
Chris Richards Group of Companies
• shares purchased from Chris
Richards in accordance with
prospectus dated 17 Nov 2015
• shares issued in accordance with
prospectus dated 17 Nov 2015
• shares issued upon conversion of
convertible notes
• employee shares issued (a)
• shares issued as consideration for
business acquisitions
• equity raising costs, net of income
tax benefit
1
-
43,827,303
(17,000,000)
40,000,000
2,690,000
1,360,000
27,598,270
-
Total share capital at 30 June
98,475,574
-
1
-
-
-
-
-
-
-
1
2016
$’000
-
-
28,939
(17,000)
40,000
285
1,360
27,598
(2,112)
79,070
2015
$’000
-
-
-
-
-
-
-
-
-
-
(a) Shares were issued during 2016 relating to share-based payments (see Note 26.2 for details on the Group’s share-based
employee remuneration).
Each share has the same right to receive dividend and the repayment of capital and represents one vote at the shareholders’
meeting of Apiam.
21.2 CONVERTIBLE NOTES
The Group entered into convertible note agreements, principally with the vendors of business combinations acquired to raise
$285,000 towards the costs of the IPO. These notes converted into 2,690,000 ordinary shares on completion of the IPO.
Convertible notes issued and fully paid:
•
beginning of the year
1,400,000
-
140,000
2016
No.
2015
No.
2016
$’000
2015
$’000
-
•
•
•
issue of convertible notes
issue of convertible notes
issue of convertible notes
• conversion to ordinary shares
-
1,400,000
-
140,000
1,250,000
40,000
(2,690,000)
-
-
-
125,000
20,000
(285,000)
-
-
-
Total convertible notes at 30 June
-
1,400,000
-
140,000
64
Apiam Animal Health Limited
22. RESERVES
Details of reserves are as follows:
Balance at 25 March 2015
No movements in reserves
during the period
Balance at 30 June 2015
Balance at 1 July 2015
Restructure and transfer of
Chris Richards entities into
the Group
Premium on issue of shares
to non-controlling interests
of Chris Richards entities
transferred into the Group
Balance at 30 June 2016
Corporate
reorganisation
reserve
$’000
-
Non-controlling
Interest
acquisition
reserve
$’000
-
-
-
-
(26,666)
-
(26,666)
-
-
-
-
(6,615)
(6,615)
23. NON-CONTROLLING INTERESTS
Issued capital
Retained profits
Total non-controlling interests
2016
$’000
576
43
619
Total
$’000
-
-
-
-
(26,666)
(6,615)
(33,281)
2015
$’000
-
-
-
24. EARNINGS PER SHARE AND DIVIDENDS
24.1 EARNINGS PER SHARE
Both the basic and diluted earnings per share have been calculated using the profit attributable to shareholders of the Parent
Company as the numerator (i.e. no adjustments to profit were necessary in 2016 or 2015).
The reconciliation of the weighted average number of shares for the purposes of diluted earnings per share to the weighted
average number of ordinary shares used in the calculation of basic earnings per share is as follows:
Amounts in thousand shares:
• weighted average number of shares used in basic earnings per share
• weighted average number of shares used in diluted earnings per share
Shares deemed to be issued for no consideration in respect of share based
payments
59,447,120
59,447,120
1,360,000
1
1
-
2016
201
65
Annual Report 2016
24.2 DIVIDENDS
There were no dividends paid or declared to equity holders during or since the year ended 30 June 2016. There were no
dividends paid during the comparative period.
24.3 FRANKING CREDITS
The amount of the franking credits available for
subsequent reporting periods are:
balance at the end of the reporting period
franking credits that will arise from the payment of the
amount of provision for income tax
2016
$’000
4,304
1,366
5,670
25. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
(a) Reconciliation of cash flows from operating
activities
Cash flows from operating activities
Profit / (Loss) for the period
Adjustments for:
• depreciation expense
• doubtful debt expense
• obsolete stock provision
• amortisation of borrowing expenses
• share benefits expense
Net changes in working capital:
• change in inventories
• change in trade and other receivables
• change in other assets
• change in trade and other payables
• change in deferred tax
• change in provisions
Net cash used in operating activities
(b) Non cash financing transactions
2016
$’000
93
614
137
100
7
1,360
(2,016)
(1,381)
69
586
(878)
72
(1,237)
2015
$’000
-
-
-
2015
$’000
(187)
-
-
-
-
-
-
(15)
-
70
(31)
-
(163)
During the financial year, the Group acquired vehicles to the value $157,266 (2015: $Nil) via finance leases. These transactions
are not reflected in the Statement of Cash Flows.
66
Apiam Animal Health Limited 26. EMPLOYEE REMUNERATION
26.1 EMPLOYEE BENEFITS EXPENSE
Expenses recognised for employee benefits are analysed below:
Employee benefits – expense
Wages and salaries
Bonuses
Share-based payments
Superannuation
Employee benefits expense
2016
$’000
12,639
330
1,360
1,048
15,377
2015
$’000
-
-
-
-
-
26.2 SHARE-BASED EMPLOYEE REMUNERATION
As part of Apiam’s initial public float 1,360,000 shares were issued to eligible employees in Australia nominated by the Company.
These employee shares were issued for nil consideration. The fair value of the shares issued was $1.00. In total, $1,360,000
(2015: $Nil) of employee remuneration expense (all of which related to equity-settled share-based payment transactions) have
been included in profit or loss and credited to share capital.
27. AUDITOR REMUNERATION
Audit services – Grant Thornton
Remuneration for audit or review of financial statements
Other services – Grant Thornton
•
•
investigating accountant
taxation services
• other
Total other services remuneration
Total auditor’s remuneration
2016
$’000
186
300
18
25
343
529
2015
$’000
7
-
-
1
1
8
28. RELATED PARTY TRANSACTIONS
The Group’s related parties include key management, post-employment benefit plans for the Group’s employees and others as
described below.
Unless otherwise stated, none of the transactions incorporate special terms and conditions and no guarantees were given or
received. Outstanding balances are usually settled in cash.
67
Annual Report 2016
28.1 TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
Key management of the Group are the executive members of Apiam’s Board of Directors and members of the Executive Team.
Key management personnel remuneration includes the following expenses:
Short-term employee benefits:
• salaries including bonuses and non-monetary benefits
• bonuses
• non-monetary benefits
Total short-term employee benefits
Long- term employee benefits:
•
long service leave
Total long-term employee benefits
Post-employment benefits:
• superannuation
Total post-employment benefits
Share-based payments
Total remuneration
2016
$’000
943
145
23
1,111
(12)
(12)
67
67
380
1,546
2015
$’000
-
-
-
-
-
-
-
-
-
-
Loans to key management personnel
The Group entered into a loan facility agreement with Chris Richards, under which the Group agreed to lend up to $1.5million.
The loan is at an interest rate equal to the Term Debt Facility interest payable by the Group plus 2% per annum. The table below
provides aggregate information relating to Group’s loans to key management personnel during the year:
Balance at the start of the year
Loans advanced
Interest paid and payable for the year
Repayments made
Balance at the end of the year
2016
$
133
1,229
15
(1,377)
-
The number of key management personnel included in the Group aggregate at year end is Nil. The Group does not have an
allowance account for receivables relating to outstanding loans and has not recognised any expense for impaired receivables
during reporting period.
Other transactions with key management personnel
The Group rents premises at Piper Lane, Bendigo East, Victoria. The premises are owned by an entity associated with Chris
Richards. Rent payments made amounted to $160,000 (2015: Nil).
The Group rents premises at Rubicon Street, Smithton, Tasmania. The premises are owned by an entity associated with Chris
Richards. Rent payments made amounted to $73,515 (2015: Nil).
The Group leases it artificial insemination facility in Victoria from entities associated with Chris Richards. Lease payments made
amounted to $43,147 (2015: Nil).
All related party rentals are based on commercial rates and the terms of the lease are standard commercial terms.
The Group has entered into an intellectual property licence with iVet Pty Ltd, a company controlled by Chris Richards, to use the
iVet intellectual property. The Group will pay iVet Pty Ltd a royalty of 10% of net sales revenue received by the Group for the use
of the intellectual property licence. The agreement is for an initial term of 10 years. The group has the option to purchase the iVet
technology by giving notice to iVet Pty Ltd at any time during the initial 5 years of the term. No payments were made during the
financial year (2015: Nil).
The Group obtains business air travel services from an entity associated with Chris Richards. The fares paid are based on
commercial fares. Payments made amounted to $121,257 (2015: Nil).
68
Apiam Animal Health Limited 29. CONTINGENT LIABILITIES
In the Directors’ view, there are no contingent assets or
liabilities that will have a material effect on the Group.
30. CAPITAL COMMITMENTS
Property, plant and
equipment
201
$’000
218
218
201
$’000
-
-
Capital commitments relate to vehicle leases where finance
facilities have been committed but the assets not yet
received.
Annual Report 2016
69
70
Apiam Animal Health Limited 31. BUSINESS RESTRUCTURE
On 1 November 2015 and 9 December 2015, as part of the Group’s reorganisation and restructure of entities under common
control, ownership of the following companies was transferred to Apiam Animal Health Limited in exchange for cash and shares:
• Chris Richards & Associates Pty Ltd
• Farm Gate Logistics (Qld) Pty Ltd
• Southern Cross Feedlot Services Pty Ltd
• Portec Veterinary Services Pty ltd
% gained
100
100
100
49
• Country Vet Wholesaling Pty ltd
• Apiam Management Pty Ltd
• Westvet Wholesale Pty Ltd
• Pork Storks Australia Pty Ltd
% gained
100
100
100
100
Details of the business restructure are as follows:
Fair value of consideration transferred
Settled as follows:
Amount settled in cash
Amount settled by issue of shares at fair value
Amount owing at balance date
Contingent consideration subject to performance criteria
Recognised amounts of identifiable net assets
Property, plant and equipment
Deferred tax assets
Total non-current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Other current assets
Total current assets
Borrowings
Provisions
Total non-current liabilities
Borrowings
Provisions
Current tax liabilities
Trade and other payables
Total current liabilities
Identifiable net assets
Reserves arising upon reconstruction
Represented by:
Corporate re-organisation reserve
Non-controlling interest acquisition reserve
Non-controlling interest
Consideration transferred settled in cash
Cash and cash equivalents acquired
Net cash outflow on acquisition
Acquisition costs charged to expenses
Net cash inflow relating to the acquisition
$’000
34,386
2,915
30,633
88
750
1,916
451
2,367
5,381
11,417
2,299
323
19,420
(563)
(61)
(624)
(5,944)
(1,082)
(378)
(12,078)
(19,482)
1,681
32,705
26,666
6,615
(576)
(2,914)
2,299
615
(640)
(25)
71
Annual Report 2016 31.1 CONSIDERATION TRANSFERRED
Acquisition-related costs amounting to $640,000 are not included as part of consideration transferred and have been
recognised as an expense in the consolidated statement of profit or loss and other comprehensive income, as part of listing and
acquisition costs expenses.
31.2 IDENTIFIABLE NET ASSETS
The fair values of the identifiable intangible assets have been determined provisionally at 30 June 2016. The Group is currently
obtaining the information necessary to appropriately consider the identification and fair value of identifiable intangible assets.
31.3 CONTINGENT CONSIDERATION SUBJECT TO PERFORMANCE CRITERIA
The contingent consideration amounting to $750,000 (Note 20) relating to the acquisition of a subsidiary has been recorded at
fair value. The consideration is contingent on achieving certain pre-determined earnings which is expected to be met and paid in
December 2016.
32. BUSINESS COMBINATION
On 9 December 2015, the Group acquired 100% of the issued share capital and voting rights of the following companies:
• McAuliffe Moore & Perry Pty Ltd (Kyabram Clinic)
• Warrnambool Veterinary Clinic Pty Ltd
• Scottsdale Veterinary Services Pty Ltd
• Smithton Veterinary Service Pty Ltd
In addition, on 9 December 2015, the following businesses were acquired:
• Dubbo Veterinary Clinic
• Bell Veterinary Clinic
• Gippsland Veterinary Clinic
• Southern Riverina Clinic
• Border Veterinary Clinic
The following detailed table highlights the fair value of the identifiable assets acquired and liabilities assumed as at the date of
acquisition for each of the business combinations undertaken in the period.
72
Apiam Animal Health Limited
Details of the business combination are as follows:
Fair value of
consideration
transferred
Amounts settled in cash
Amount settled by issue of
shares at fair value
Contingent consideration
Total fair value
of consideration
transferred
Recognised amounts of
identifiable net assets
Property plant and
equipment
Deferred tax assets
Total non-current assets
Cash and equivalents
Inventories
Trade and other
receivables
Other current assets
Total current assets
Borrowings
Provisions
Total non-current
liabilities
Provisions
Borrowings
Current tax liabilities
Trade and other payables
Total current liabilities
Identifiable net assets
Goodwill on acquisition
Net cash outflow on
acquisition
Practice 1
$’000
Practice 2
Practice 3
Practice 4
$’000
$’000
$’000
Others
$’000
Total
$’000
3,752
3,775
3,494
3,963
-
2,151
7,757
-
4,977
3,834
-
9,694
6,574
500
24,068
25,903
500
7,527
7,457
9,908
8,811
16,768
50,471
376
77
453
2
354
347
-
703
-
26
26
236
132
84
84
536
594
6,933
3,752
620
122
742
-
463
907
43
1,413
-
31
31
487
-
-
285
772
1,352
6,105
3,494
494
90
584
-
385
554
-
939
-
26
26
275
-
-
59
334
392
15
407
-
348
560
-
908
-
-
-
49
-
-
-
49
860
391
1,251
-
1,334
2,973
76
4,383
101
36
137
1,315
976
99
1,633
4,023
2,742
695
3,437
2
2,884
5,341
123
8,347
101
119
220
2,362
1,108
183
2,061
5,714
1,163
8,745
2,151
1,266
7,545
4,977
1,474
15,294
5,849
44,622
9,694
24,068
73
Annual Report 2016 32.1 CONSIDERATION TRANSFERRED
Acquisition-related costs amounting to $934,000 are not included as part of consideration transferred and have been
recognised as an expense in the consolidated statement of profit or loss and other comprehensive income, as part of listing and
acquisition costs expenses.
32.2 IDENTIFIABLE NET ASSETS
The fair values of the identifiable intangible assets have been determined provisionally at 30 June 2016. The Group is currently
obtaining the information necessary to appropriately consider the identification and fair value of identifiable intangible assets.
32.3 GOODWILL
The goodwill that arose on the combination can be attributed to the value of the businesses to the Group in addition to the
net tangible assets acquired, synergies expected to be derived from the combination and the value of each of the veterinary
businesses which cannot be recognised as an intangible asset. The goodwill that arose from this business combination is not
expected to be deductible for tax purposes.
32.4 CONTINGENT CONSIDERATION SUBJECT TO PERFORMANCE CRITERIA
The contingent consideration amounting to $500,000 (Note 20) relating to the acquisition of a subsidiary has been recorded at
fair value. The consideration is contingent on achieving certain pre-determined earnings which is expected to be met and paid in
December 2016.
33. INTERESTS IN SUBSIDIARIES
33.1 COMPOSITION OF THE GROUP
Set out below details of the subsidiaries held directly by the Group:
Name of the Subsidiary
Chris Richards & Associates Pty Ltd
Country Vet Wholesaling Pty Ltd
Farm Gate Logistics (Qld) Pty Ltd
Apiam Management Pty Ltd
Southern Cross Feedlot Services Pty Ltd
Westvet Wholesale Pty Ltd
Portec Veterinary Services Pty Ltd
Pork Storks Australia Pty Ltd
McAuliffe Moore & Perry Pty Ltd
Warrnambool Veterinary Clinic Pty Ltd
Scottsdale Veterinary Services Pty Ltd
Smithton Veterinary Service Pty Ltd
AAH - Dubbo Vet Hospital Pty Ltd
AAH - Bell Vet Services Pty Ltd
CVH Gippsland Pty Ltd
CVH Southern Riverina Pty Ltd
CVH Border Pty Ltd
CVH iVet Pty Ltd
Tasvet Wholesale Pty Ltd
Country of
incorporation
and principal
place of
business
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Principal activity
Veterinary services
Wholesale supply
Transport
Payroll
Veterinary services
Wholesale supply
Veterinary services
Genetics
Veterinary services
Veterinary services
Veterinary services
Veterinary services
Veterinary services
Veterinary services
Veterinary services
Veterinary services
Veterinary services
Dormant
Dormant
Group proportion of
ownership interests
30-Jun-16
100%
30-Jun-15
-%
100%
100%
100%
100%
100%
49%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
74
Apiam Animal Health Limited Significant judgements and assumptions
The Group holds 49% of the ordinary shares and voting rights in Portec Veterinary Services Pty Ltd (‘Portec’).
One (1) other investor holds 51% in order to ensure compliance with statutory laws applicable in Western Australia where Portec
Veterinary Services Pty Ltd (Portec) conducts its operations. Management has assessed its involvement in Portec in accordance
with AASB 10’s revised control definition and guidance. It has concluded that it has outright control. In making its judgement,
management considered the Group’s voting rights, the relative size and dispersion of the voting rights held by the other
shareholder and the extent of recent participation by those shareholder in general meetings. Recent experience demonstrates
that the other shareholder participates such that they do not prevent the Group from having the practical ability to direct the
relevant activities of Portec unilaterally.
33.2 LOSING CONTROL OVER A SUBSIDIARY DURING THE REPORTING PERIOD
There was no loss of control over a subsidiary during the reporting period.
33.3 INTERESTS IN UNCONSOLIDATED STRUCTURED ENTITIES
The Group has no interests in unconsolidated structured entities.
34. LEASES
34.1 FINANCE LEASES AS LESSEE
The Group’s main motor vehicles and certain items of plant and equipment are held under finance lease arrangements. As
of 30 June 2016, the net carrying amount of the motor vehicles held under finance lease arrangements (included as part of
motor vehicles) is $564,585 (2015: $Nil); and the net carrying amount of the plant and equipment held under finance lease
arrangements (included as part of plant and equipment) is $73,076 (2015: $Nil) (see Note 13).
The Group’s finance lease liabilities, which are secured by the related assets held under finance leases, are classified as follows:
Current:
• finance lease liabilities
Non-current:
• finance lease liabilities
2016
$’000
242
262
Future minimum finance lease payments at the end of each reporting period under review were as follows:
30-Jun-16
Lease payments
Finance charges
Net present values
30-Jun-15
Lease payments
Finance charges
Net present values
Minimum lease payments due
Within 1 year
$’000
1-5 years
$’000
After 5 years
$’000
257
(15)
242
-
-
-
271
(9)
262
-
-
-
-
-
-
-
-
-
2015
$’000
-
-
Total
$’000
528
(24)
504
-
-
-
75
Annual Report 2016
34.2 OPERATING LEASES AS LESSEE
The Group leases an office and veterinary premises at various locations under operating leases. The future minimum lease
payments are as follows:
30 June 2016
30 June 2015
Within 1 year
$’000
1,438
-
Minimum lease payments due
1-5 years
$’000
4,409
-
After 5 years
$’000
2,062
-
Total
$’000
7,909
-
Lease expense during the period amounted to $875,752 (2015: $Nil) representing the minimum lease payments.
35. FINANCIAL INSTRUMENT RISK
35.1 RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group is exposed to various risks in relation to financial instruments. The Group’s financial assets and liabilities by category
are summarised in Note 40.1. The main types of risks are market risk, credit risk and liquidity risk.
The Group’s risk management is coordinated at its headquarters, in close cooperation with the Board of Directors, and focuses
on actively securing the Group’s short to medium-term cash flows by minimising the exposure to financial markets. Long-term
financial investments are managed to generate lasting returns.
The Group does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The
most significant financial risks to which the Group is exposed are described below.
35.2 MARKET RISK ANALYSIS
The Group is exposed to market risk through its use of financial instruments and specifically to interest rate risk, which result
from both its operating and investing activities.
Interest rate sensitivity
The Group’s policy is to minimise interest rate cash flow risk exposures on long-term financing. At 30 June 2016, the Group is
exposed to changes in market interest rates through bank borrowings at variable interest rates.
The following table illustrates the sensitivity of profit and equity to a reasonably possible change in interest rates of +/- 1% (2015:
+/- 1%). These changes are considered to be reasonably possible based on observation of current market conditions. The
calculations are based on a change in the average market interest rate for each period, and the financial instruments held at
each reporting date that are sensitive to changes in interest rates. All other variables are held constant.
30 June 2016
30 June 2015
Profit for the year
$’000
+1%
80
-
$’000
-1%
(80)
-
Equity
$’000
+1%
80
-
$’000
-1%
(80)
-
76
Apiam Animal Health Limited
35.3 CREDIT RISK ANALYSIS
Credit risk is the risk that a counterparty fails to discharge an obligation to the Group. The Group is exposed to this risk for
various financial instruments, for example by trade receivables. The Group’s maximum exposure to credit risk is limited to the
carrying amount of financial assets recognised at the reporting date, as summarised below:
Classes of financial assets
Carrying amounts:
• cash and cash equivalents
•
trade and other receivables
2016
$’000
2,117
13,254
15,371
2015
$’000
20
15
35
The Group continuously monitors defaults of customers and other counterparties, identified either individually or by group
and incorporates this information into its credit risk controls. Where available at reasonable cost, external credit ratings and/
or reports on customers and other counterparties are obtained and used. The Group’s policy is to deal only with creditworthy
counterparties.
The Group’s management considers that all of the above financial assets that are not impaired or past due for each of the 30
June reporting dates under review are of good credit quality.
At 30 June, the Group has certain trade receivables that have not been settled by the contractual due date but are not
considered to be impaired. The amounts at 30 June analysed by the length of time past due, are:
Past due under 30 days
Past due 30 days to under 60 days
Past due 60 days and over
Total
2016
$’000
1,594
633
831
3,058
2015
$’000
15
-
-
15
In respect of trade and other receivables, the Group is not exposed to any significant credit risk exposure to any single
counterparty or any group of counterparties having similar characteristics. Trade receivables consist of a large number
of customers in various industries and geographical areas. Based on historical information about customer default rates
management consider the credit quality of trade receivables that are not past due or impaired to be good.
The credit risk for cash and cash equivalents is considered negligible, since the counterparties are reputable banks with high
quality external credit ratings.
35.4 LIQUIDITY RISK ANALYSIS
Liquidity risk is the risk that the Group might be unable to meet its obligations. The Group manages its liquidity needs by
monitoring scheduled debt servicing payments for long-term financial liabilities as well as forecast cash inflows and outflows due
in day-to-day business. The data used for analysing these cash flows is consistent with that used in the contractual maturity
analysis below. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on the
basis of a rolling 30-day projection. Long-term liquidity needs for a 180-day and a 360-day lookout period are identified monthly.
Net cash requirements are compared to available borrowing facilities in order to determine headroom or any shortfalls. This
analysis shows that available borrowing facilities are expected to be sufficient over the lookout period.
The Group’s objective is to maintain cash and marketable securities to meet its liquidity requirements for 30-day periods at a
minimum. This objective was met for the reporting periods. Funding for long-term liquidity needs is additionally secured by an
adequate amount of committed credit facilities and the ability to sell long-term financial assets.
77
Annual Report 2016
The Group considers expected cash flows from financial assets in assessing and managing liquidity risk, in particular its cash
resources and trade receivables. The Group’s existing cash resources and trade receivables significantly exceed the current cash
outflow requirements. Cash flows from trade and other receivables are all contractually due within one (1) month.
As at 30 June 2016, the Group’s non-derivative financial liabilities have contractual maturities (including interest payments where
applicable) as summarised below:
Current
Non-current
Within 6 months
$’000
6 - 12 months
$’000
1 - 5 years
$’000
5+ years
$’000
3,919
121
9,491
13,531
-
121
-
121
11,650
262
-
11,912
-
-
-
-
30 June 2016
Other bank
borrowings
Finance lease
obligations
Trade and other
payables
Total
This compares to the maturity of the Group’s non-derivative financial liabilities in the previous reporting periods as follows:
Current
Non-current
Within 6 months
$’000
6 - 12 months
$’000
1 - 5 years
$’000
5+ years
$’000
113
113
-
-
-
-
-
-
30 June 2015
Trade and other
payables
Total
The above amounts reflect the contractual undiscounted cash flows, which may differ to the carrying values of the liabilities at
the reporting date.
36. FAIR VALUE MEASUREMENT
36.1 FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three
(3) levels of a fair value hierarchy. The three (3) levels are defined based on the observability of significant inputs to the
measurement, 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 or
indirectly
• Level 3: unobservable inputs for the asset or liability
78
Apiam Animal Health Limited
79
Annual Report 2016 The following table shows the levels within the hierarchy of financial assets and liabilities measured at fair value on a recurring
basis at 30 June 2016 and 30 June 2015:
30 June 2016
Financial liabilities
Contingent
consideration
Total liabilities
Net fair value
30 June 2015
Financial liabilities
Total liabilities
Net fair value
Level 1
$’000
Level 2
$’000
-
-
-
Level 1
$’000
-
-
-
-
-
Level 2
$’000
-
-
Level 3
$’000
1,250
1,250
1,250
Level 3
$’000
-
-
Total
$’000
1,250
1,250
1,250
Total
$’000
-
-
Measurement of fair value of financial instruments
The Group’s finance team performs valuations of financial items for financial reporting purposes, including Level 3 fair values,
in consultation with third party valuation specialists for complex valuations. Valuation techniques are selected based on the
characteristics of each instrument, with the overall objective of maximising the use of market-based information. The finance
team reports directly to the Chief Financial Officer (CFO) and to the Audit Committee. Valuation processes and fair value changes
are discussed among the Audit Committee and the valuation team at least every year, in line with the Group’s reporting dates.
The valuation techniques used for instruments categorised in Level 3 are described below:
Contingent consideration (Level 3)
The fair value of contingent consideration related to the acquisition of business combinations (see Note 31.3 and 32.4) is
considered to be face value as the payments become due within the next six (6) months.
The following table provides information about the sensitivity of the fair value measurement to changes in the most significant
inputs:
Significant unobservable input
Estimate of the input
Sensitivity of the fair value measurement to
input
Probability of meeting target
100%
-
80
Apiam Animal Health Limited
Level 3 Fair value measurements
The reconciliation of the carrying amounts of financial instruments classified within Level 3 is as follows:
Balance at 1 July 2015
Payable business combination
Balance at 30 June 2016
Contingent consideration
2016
$’000
-
1,250
1,250
2015
$’000
-
-
-
37. CAPITAL MANAGEMENT POLICIES AND PROCEDURES
The Group’s capital management objectives are:
•
•
to ensure the Group’s ability to continue as a going concern, and
to provide an adequate return to shareholders;
by pricing products and services commensurately with the level of risk.
The Group monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the
face of the statement of financial position. The Group’s goal in capital management is to maintain a maximum gearing ratio of
35% (ratio of debt to equity). This is in line with the Group’s covenants resulting from the banking facilities it has taken out from in
December 2015.
Management assesses the Group’s capital requirements in order to maintain an efficient overall financing structure while avoiding
excessive leverage. This takes into account the subordination levels of the Group’s various classes of debt. The Group manages
the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of
the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.
The amounts managed as capital by the Group for the reporting periods under review are summarised as follows:
Total equity
Cash and cash equivalents
Capital
Total equity
Borrowings
Overall financing
Capital-to-overall financing ratio
2016
$’000
46,271
2,117
48,388
46,271
16,012
62,283
0.78
2015
$’000
(47)
20
(27)
(47)
-
(47)
-
The Group has honoured its covenant obligations, including maintaining capital ratios, since the banking loans were taken out in
December 2015.
81
Annual Report 2016
38. PARENT ENTITY INFORMATION
Information relating to Apiam Animal Health Limited (‘the Parent Entity’):
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
Retained earnings / (Accumulated losses)
Total equity
Statement of profit or loss and other comprehensive income
Profit for the year
Other comprehensive income
Total comprehensive income
2016
$’000
786
94,116
7,375
18,951
75,165
79,070
(3,905)
75,165
(3,718)
-
(3,718)
2015
$’000
35
66
113
113
(47)
140
(187)
(47)
(187)
-
(187)
The Parent Entity has capital commitments of $218,000 to purchase motor vehicles (2015: $Nil). Refer Note 30 for further
details of the commitment.
The Parent Entity has entered into a deed of cross guarantee. Refer Note 41 for details.
The Parent Entity had no contingent liabilities at 30 June 2016 (2015: $Nil).
39. POST-REPORTING DATE EVENTS
On 19 August 2016, the Company signed an agreement to acquire 100% of the shares in Quirindi Veterinary Group of
companies, comprising Quirindi Veterinary Clinic Pty Ltd, Quirindi Feedlot Services Pty Ltd and Quirindi Equine Centre Pty Ltd
(QVG) for $11.57 million. QVG provides veterinary services to large beef production systems throughout Australia through its
business unit Quirindi Feedlot Services, provides equine reproduction services at its custom built centre in Quipolly, near Scone
in NSW, and runs a livestock and companion animal veterinary practice located in Quirindi.
The acquisition will be funded using Apiam’s existing bank facilities. The consideration for the acquisition is a combination of
70% cash and 30% scrip. In line with Apiam’s previous acquisitions, the principals of the business will enter into an employment
contract with restraint conditions. Shares issued under the agreement will be subject to escrow.
The Group is currently obtaining the information necessary to appropriately consider the identification and fair value of identifiable
intangible assets.
There are no other matters or circumstances that have arisen since the end of the year that have significantly affected or may
significantly affect either:
•
•
•
the entity’s operations in future financial years
the results of those operations in future financial years; or
the entity’s state of affairs in future financial years
82
Apiam Animal Health Limited 40. FINANCIAL ASSETS AND LIABILITIES
40.1 CATEGORIES OF FINANCIAL ASSETS AND LIABILITIES
Note 4.12 provides a description of each category of financial assets and financial liabilities and the related accounting policies.
A description of the Group’s financial instrument risks, including risk management objectives and policies is given in Note 35.
The methods used to measure financial assets and liabilities reported at fair value are described in Note 36.1.
The carrying amounts of financial assets and financial liabilities in each category are as follows:
30 June 2016
Financial assets
Cash and cash equivalents
Trade and other receivables *
30 June 2016
Financial liabilities
Non-current borrowings
Current borrowings
Trade and other payables
Current tax liabilities
Contingent consideration
Notes
9
10
Notes
18
18
16
17
20
Financial assets at amortised cost
$’000
2,117
13,254
15,371
Other liabilities
$’000
(Carried at amortised cost)
Total
$’000
2,117
13,254
15,371
Total
$’000
11,864
11,864
4,148
9,491
1,366
1,250
4,148
9,491
1,366
1,250
28,119
28,119
Notes
Financial assets at amortised cost
30 June 2015
Financial assets
Cash and cash equivalents
Trade and other receivables *
9
10
$’000
20
15
35
* These amounts only represent trade receivables that are financial assets. See Note 10.
30 June 2015
Financial liabilities
Trade and other payables
Notes
Other liabilities
$’000
(Carried at amortised cost)
16
113
113
Total
$’000
20
15
35
Total
$’000
113
113
83
Annual Report 2016
84
Apiam Animal Health Limited 40.2 BORROWINGS
Borrowings include the following financial liabilities:
Financial liabilities
Current
Non-current
Carrying amount at amortised cost:
• other bank borrowings (Note 18)
• finance lease liabilities (Note 34)
All borrowings are denominated in $AUD.
2016
$’000
3,906
242
4,148
2015
$’000
-
-
-
2016
$’000
11,602
262
11,864
2015
$’000
-
-
-
Borrowings at amortised cost
Other bank borrowings are secured by first ranking general security agreements in relation to the current and future assets of
Apiam Animal Health Limited and each wholly owned subsidiary. Current interest rates are variable and average 5.4% (2015:
Nil%). The carrying amount of the other bank borrowings is considered to be a reasonable approximation of the fair value.
40.3 OTHER FINANCIAL INSTRUMENTS
The carrying amount of the following financial assets and liabilities is considered a reasonable approximation of fair value:
trade and other receivables
•
• cash and cash equivalents; and
•
trade and other payables
41. DEED OF CROSS GUARANTEE
The following entities are party to a deed of cross guarantee under which each company guarantees the debts of the others:
Chris Richards & Associates Pty Ltd
Country Vet Wholesaling Pty Ltd
Farm Gate Logistics (Qld) Pty Ltd
Apiam Management Pty Ltd
Southern Cross Feedlot Services Pty Ltd
Westvet Wholesale Pty Ltd
Pork Storks Australia Pty Ltd
McAuliffe Moore & Perry Pty Ltd
Warrnambool Veterinary Clinic Pty Ltd
Scottsdale Veterinary Services Pty Ltd
Smithton Veterinary Service Pty Ltd
AAH - Dubbo Vet Hospital Pty Ltd
AAH - Bell Vet Services Pty Ltd
CVH Gippsland Pty Ltd
CVH Southern Riverina Pty Ltd
CVH Border Pty Ltd
Tasvet Wholesale Pty Ltd
By entering into the deed, the wholly-owned entities have been relieved of the requirement to prepare financial statements and a
directors’ report under Class Order 98/1418 (as amended) issued by the Australian Securities and Investments Commission.
85
Annual Report 2016
Set out below is a consolidated statement of profit or loss and other comprehensive income of the parties to the Deed.
Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2016
Revenue
Expenses
Changes in inventories
Costs of materials
Costs of consumables and services
Employee benefits expense
Listing and acquisition expense
Property expenses
Freight vehicle and transport expenses
Depreciation of property, plant and equipment
Other expenses
Finance costs
Other financial items
Profit / (Loss) before income tax
Income tax expense
Profit / (Loss) for the year
Other comprehensive income
Other comprehensive income for the period, net of tax
Total comprehensive income / (loss) for the period
2016
$’000
51,724
1,725
(28,713)
(456)
(15,110)
(2,026)
(1,410)
(1,407)
(593)
(2,345)
(434)
(7)
948
968
(20)
-
(20)
2015
$’000
-
-
-
-
-
-
-
-
-
(218)
-
-
(218)
31
(187)
-
(187)
86
Apiam Animal Health Limited
Set out below is a consolidated statement of financial position of the parties to the Deed.
Statement of Financial Position as at 30 June 2016
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Financial assets
Intangible assets
Deferred tax assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Current tax liabilities
Provisions
Other current liabilities
Current liabilities
Non-current liabilities
Borrowings
Provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets/(liabilities)
Equity
Equity attributable to owners of the parent:
• share capital
• convertible notes
• corporate re-organisation reserve
• non-controlling interest acquisition reserve
•
retained earnings/(accumulated losses)
Total equity/(deficiency)
2016
$’000
2,009
12,770
10,167
371
25,317
4,479
799
44,702
2,967
52,947
78,264
9,410
4,147
1,357
3,453
1,250
19,617
11,864
266
-
12,130
31,747
46,517
79,070
-
(25,642)
(6,615)
(296)
46,517
2015
$’000
20
15
-
-
35
-
-
-
31
31
66
113
-
-
-
-
113
-
-
-
-
113
(47)
-
140
-
-
(187)
(47)
87
Annual Report 2016
DIRECTORS’ DECLARATION
1. In the opinion of the Directors of Apiam Animal Health Limited:
a. The consolidated financial statements and notes of Apiam Animal Health Limited are in accordance with the
Corporations Act 2001, including
i. Giving a true and fair view of its financial position as at 30 June 2016 and of its performance for the
financial year ended on that date; and
ii. Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Regulations 2001; and
b. There are reasonable grounds to believe that Apiam Animal Health Limited 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 Managing
Director and Chief Financial Officer for the financial year ended
30 June 2016.
3. Note 2 confirms that the consolidated financial statements also comply with International Financial Reporting Standards.
Signed in accordance with a resolution of the Directors:
Dr Christopher Irwin Richards
Managing Director
Melbourne
25 August 2016
88
Apiam Animal Health Limited
89
Annual Report 2016 INDEPENDENT AUDITORS’ REPORT
78
78
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
T +61 3 8320 2222
The Rialto, Level 30
F +61 3 8320 2200
525 Collins St
E info.vic@au.gt.com
Melbourne Victoria 3000
W www.grantthornton.com.au
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
Independent Auditor’s Report
To the Members of Apiam Animal Health Limited
Report on the financial report
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
We have audited the accompanying financial report of Apiam Animal Health Limited (the
W www.grantthornton.com.au
“Company”), which comprises the consolidated statement of financial position as at 30 June
Independent Auditor’s Report
2016, the consolidated statement of profit or loss and other comprehensive income,
To the Members of Apiam Animal Health Limited
consolidated statement of changes in equity and consolidated statement of cash flows for
the year then ended, notes comprising a summary of significant accounting policies and
Report on the financial report
other explanatory information and the Directors’ declaration of the consolidated entity
We have audited the accompanying financial report of Apiam Animal Health Limited (the
comprising the Company and the entities it controlled at year end or from time to time
“Company”), which comprises the consolidated statement of financial position as at 30 June
during the financial year.
2016, the consolidated statement of profit or loss and other comprehensive income,
Directors’ responsibility for the financial report
consolidated statement of changes in equity and consolidated statement of cash flows for
the year then ended, notes comprising a summary of significant accounting policies and
The Directors of the Company are responsible for the preparation of the financial report
other explanatory information and the Directors’ declaration of the consolidated entity
that gives a true and fair view in accordance with Australian Accounting Standards and the
comprising the Company and the entities it controlled at year end or from time to time
Corporations Act 2001. The Directors’ responsibility also includes such internal control as
during the financial year.
the Directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or
Directors’ responsibility for the financial report
error. The Directors also state, in the notes to the financial report, in accordance with
The Directors of the Company are responsible for the preparation of the financial report
Accounting Standard AASB 101 Presentation of Financial Statements, the financial
that gives a true and fair view in accordance with Australian Accounting Standards and the
statements comply with International Financial Reporting Standards.
Corporations Act 2001. The Directors’ responsibility also includes such internal control as
Auditor’s responsibility
the Directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or
Our responsibility is to express an opinion on the financial report based on our audit. We
error. The Directors also state, in the notes to the financial report, in accordance with
conducted our audit in accordance with Australian Auditing Standards. Those standards
Accounting Standard AASB 101 Presentation of Financial Statements, the financial
require us to comply with relevant ethical requirements relating to audit engagements and
statements comply with International Financial Reporting Standards.
plan and perform the audit to obtain reasonable assurance whether the financial report is
free from material misstatement.
Auditor’s responsibility
An audit involves performing procedures to obtain audit evidence about the amounts and
Our responsibility is to express an opinion on the financial report based on our audit. We
disclosures in the financial report. The procedures selected depend on the auditor’s
conducted our audit in accordance with Australian Auditing Standards. Those standards
judgement, including the assessment of the risks of material misstatement of the financial
require us to comply with relevant ethical requirements relating to audit engagements and
report, whether due to fraud or error.
plan and perform the audit to obtain reasonable assurance whether the financial report is
free from material misstatement.
Grant Thornton Audit Pty Ltd ACN 130 913 594
An audit involves performing procedures to obtain audit evidence about the amounts and
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
disclosures in the financial report. The procedures selected depend on the auditor’s
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
judgement, including the assessment of the risks of material misstatement of the financial
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
report, whether due to fraud or error.
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.
90
Apiam Animal Health Limited
79
In making those risk assessments, the auditor considers internal control relevant to the
Company’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 Company’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 believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
Independence
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 Apiam Animal Health Limited is in accordance with the
Corporations Act 2001, including:
i
ii
giving a true and fair view of the consolidated entity’s financial position as at 30
June 2016 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations
Regulations 2001; and
b
the financial report also complies with International Financial Reporting Standards as
disclosed in the notes to the financial statements.
Report on the remuneration report
We have audited the remuneration report included in pages 11 to 16 of 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 Australian Auditing Standards.
Auditor’s opinion on the remuneration report
In our opinion, the remuneration report of Apiam Animal Health Limited for the year
ended 30 June 2016, complies with section 300A of the Corporations Act 2001.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
Adam Pitts
Partner - Audit & Assurance
Melbourne, 25 August 2016
91
Annual Report 2016 04
Corporate
Governance
Statement
92
Apiam Animal Health Limited CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 30 JUNE 2016
The Board is committed to achieving and demonstrating the highest standards of corporate governance. As such, Apiam
Animal Health Limited and its controlled entities (‘Apiam’ or the Group’) have considered the third edition of the ASX
Corporate Governance Principles and Recommendations which was released by the ASX Corporate Governance Council
on 27 March 2014 and became effective for financial years beginning on or after 1 July 2014. The Company has followed all
recommendations where they are deemed to be an appropriate benchmark for the Company’s corporate governance practices.
Where, after due consideration, the Company’s corporate governance practices depart from a recommendation, the Board has
offered full disclosure and reason for adoption of its own practice, in compliance with the “if not, why not” regime.
This Corporate Governance Statement explains the Apiam’s conformance with the ‘Corporate Governance Principles and
Recommendations’ issued by the Australian Securities Exchange (ASX).
PRINCIPLE 1 - LAY SOLID FOUNDATIONS FOR MANAGEMENT AND
OVERSIGHT
RECOMMENDATION 1.1:
A listed entity should disclose:
the respective roles and responsibilities of its board and management; and
those matters expressly reserved to the board and those delegated to management.
The Board acts on behalf of shareholders and is accountable to shareholders for the overall direction, management and
corporate governance of the Company. The Apiam Board Charter formally defines the role and responsibilities of the Board.
The Board is responsible for:
• providing leadership and setting the strategic direction of the Company;
•
reviewing on an ongoing basis how the Company’s strategic environment is changing, what key risks and opportunities are
appearing, how they are being managed and what, if any, modifications in strategic direction should be adopted;
• Approval of the strategic plan and budget annually;
• Monitoring and assessing management’s performance against approved strategies and budgets;
• Appointment and removal of the Managing Director and determination of the Managing’s terms and conditions including
remuneration subject to shareholder approval if required by the Corporations Act or the ASX Listing Rules;
• Setting the criteria and evaluating each year the performance of the Managing Director;
• Approval, on the recommendation of the Managing Director, of the appointment and remuneration of the direct reports to the
Managing Director;
• appointing and when necessary removing the:
•
•
the chairperson of the Board (Chair);
the company secretary (Company Secretary);
• approving and monitoring the acquisition, establishment, disposal or cessation of any significant business or significant
changes to organisational structures;
• approving and monitoring progress of major capital expenditure;
• determining the Company’s dividend policy (if any) and overseeing the financing of dividend payments (if any);
• monitoring the integrity of the Company’s accounting and corporate reporting systems, including the external audit;
• monitoring the Company’s process for making timely and balanced disclosure of all material information concerning the
Company that a reasonable person would expect to have a material effect on the price or value of its securities;
• ensuring that the Company has in place an appropriate risk management framework;
• setting the risk appetite within which the Board expects Management to operate;
• approving the Company’s remuneration framework;
• monitoring the effectiveness of the Company’s governance practises;
93
Annual Report 2016 • monitoring and managing the performance of Senior Executives;
• ensuring that appropriate resources are available to Senior Executives;
• approving and managing succession plans for Senior Executives and other key management positions that may be identified
from time to time;
•
reviewing and monitoring any related party transactions; and
• monitoring the Company’s operations in relation to, and in compliance with, relevant regulatory and legal requirements.
Role and responsibility of senior management
• Apiam has a Managing Director (MD). Responsibility for day to day management and administration of the Company is
delegated by the Board to the MD and the Company’s other Senior Executives.
• The MD manages the Company in accordance with the strategy, plans and policies approved by the Board.
• The responsibilities of the MD include:
i. developing and recommending to the Board strategies, business plans and annual budgets for the Company;
ii. implementing the strategies, business plans and budgets adopted by the Board;
iii. providing effective leadership, direction and supervision of the Senior Executive team to achieve the strategies, business
plans and budgets adopted by the Board;
iv. managing resources within budgets approved by the Board;
v. ensuring compliance with applicable laws and regulations; and
vi. ensuring the Board is given sufficient information to enable it to perform its functions, set strategies and monitor
performance.
• The Board has in place procedures to assess the performance of the MD and Senior Executives.
RECOMMENDATION 1.2:
A listed entity should:
undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for
election, as a director; and
provide security holders with all material information in its possession relevant to a decision on whether or not
to elect or re-elect a director.
The Board Charter requires the Directors to undertake appropriate checks before appointing a person or putting forward a
person for nomination as a director.
RECOMMENDATION 1.3:
A listed entity should have a written agreement with each director and senior executive setting out the terms of
their appointment.
Each Director and senior executive is appointed under a written agreement setting out the terms of their appointment.
RECOMMENDATION 1.4:
The company secretary of a listed entity should be accountable directly to the board, through the chair, on all
matters to do with the proper functioning of the board.
The role of the Company Secretary includes:
i. advising the Board and its committees (as established from time to time) on governance matters;
ii. monitoring that Board and committee policy and procedures are followed;
iii. coordinating the timely completion and despatch of board and committee papers;
iv. ensuring that the business at Board and committee meetings is accurately captured in the minutes; and
v. helping to organise and facilitate the induction and professional development of directors.
Each director should be able to communicate directly with the Company Secretary and vice versa.
The Company Secretary is accountable directly to the Board, through the Chair, on all matters to do with the proper functioning
of the Board. The Company Secretary is accountable directly to the Board, through the Chair, on all matters to do with the
proper functioning of the Board.
94
Apiam Animal Health Limited RECOMMENDATION 1.5:
A listed entity should:
RECOMMENDATION 1.6:
A listed entity should:
have a diversity policy which includes
requirements for the board or a relevant committee
of the board to set measureable objectives for
achieving gender diversity and to assess annually
both the objectives and the entity’s progress in
achieving them;
disclose that policy or a summary of it; and
have and disclose a process for periodically
evaluating the performance of the board, its
committees and individual directors; and
disclose, in relation to each reporting period,
whether a performance evaluation was undertaken
in the reporting period in accordance with that
process.
disclose as at the end of each reporting period
At the end of each annual reporting period, the Board will:
the measureable objectives for achieving gender
diversity set by the board in accordance with the
entity’s diversity policy and its progress towards
achieving the respective proportions of men and
women on the board, in senior executive positions
and across the whole organisation.
Apiam’s Diversity Policy supports the company’s
commitment to ensuring an inclusive workplace that
encourages and embraces diversity. Diversity includes,
but is not limited to, gender, age, ethnicity and cultural
background. The Company is an equal opportunity
employer and respects and welcomes people from all
backgrounds.
The Company’s diversity and inclusion principles are to
ensure:
• all employees are treated fairly and with respect;
•
the ability to contribute and access career development
opportunities is based solely on merit;
individual differences are embraced in the workplace;
the workplace is free from discriminatory behaviours and
practices;
•
•
• equitable frameworks and policies, practices and
processes limit the potential for biases;
there is awareness of the different needs and
circumstances of employees; and
there is provision for flexible work arrangements.
•
•
The Company and its Board recognise that gender diversity:
• broadens the pool of high-quality directors and
•
•
•
employees;
is likely to support employee retention;
is likely to encourage greater innovation by drawing on
different perspectives;
is a socially and economically responsible governance
practice; and
• will improve the Company’s corporate reputation.
As at 30 June 2016 women employees represented
approximately 63% of the total workforce of 327. There
are currently 4 women filling 50% of the 8 senior executive
positions.
• conduct a self-evaluation of its performance against this
Charter;
•
review this Charter and recommend any changes or
improvements if necessary; and
• disclose in the Company’s annual report:
a.
the details and results of any performance
evaluations that were undertaken by the Board
during the period, including:
b.
c.
d.
• any insights gained from those evaluations; and
• any resulting governance changes that will be
implemented;
the length of service of each director;
the names of the directors considered by the Board
to be independent directors; and
if a director has an interest, position, association or
relationship of a type which might be perceived as
impacting upon their independence, but the Board
is of the opinion that it does not compromise the
independence of the director:
• the nature of the interest position association or
relationship in question; and
• an explanation of why the Board is of that
opinion.
RECOMMENDATION 1.7:
A listed entity should:
have and disclose a process for periodically
evaluating the performance of its senior
executives; and
disclose, in relation to each reporting period,
whether a performance evaluation was undertaken
in the reporting period in accordance with that
process.
Refer to the Remuneration Report in the Report of the
Directors.
An evaluation of the performance of senior executives was
undertaken during the year in accordance with the process
determined by the Board.
95
Annual Report 2016 PRINCIPLE 2 – STRUCTURE THE
BOARD TO ADD VALUE
RECOMMENDATION 2.1:
The board of a listed entity should:
have a nomination committee.
If it does not have a nomination committee,
disclose this fact, and the processes it employs to
address board succession issues and to ensure
that the board has the appropriate balance of
skills, knowledge, experience, independence and
diversity to enable it to discharge its duties and
responsibilities effectively.
Apiam does not have a separate nomination committee. The
board considers that the nomination function is effectively
managed by all directors.
In relation to its nomination function, the Board Charter
specifically requires the board to:
• assess the competencies required to discharge
competently the Board’s duties having regard to the
Company’s performance, financial position and strategic
direction;
• develop and disclose to shareholders a Board skills
matrix setting out the mix of competencies, experience
and diversity that the Board currently has or is looking to
achieve in its membership;
• establish a process for identifying suitable candidates
for appointment to the Board, including the MD,
having regard to the competencies required and the
competencies already represented on the Board;
• undertake appropriate checks before a candidate is
appointed or put forward to shareholders for election as
a director;
• ensure that all information necessary to make an
informed decision is provided to shareholders in relation
to a proposed candidate for election as a director;
• develop and implement an induction program for all
new directors and committee members which contains
all such information and advice that may be considered
necessary or desirable, including information regarding:
the Company’s operations and the industry sectors
i.
in which it operates;
the Company’s financial, strategic, operational and
risk management position;
ii.
iii. governance matters, policies and procedures; and
the director or committee member’s rights, duties
iv.
and responsibilities;
• ensure that the Company provides each director and
senior executive with a written agreement setting out the
terms of his or her employment;
•
•
regularly assess the independence of directors and
report its findings to the Board;
review the time commitments required from non-
executive directors and whether the existing non-
executive directors are meeting that requirement;
• plan for Board succession generally; and
•
implement plans regarding the succession of the MD,
executive directors and other senior management of the
Company, including in regard to maintaining the required
mix of competencies, experience and diversity.
RECOMMENDATION 2.2:
A listed entity should have and disclose a board skills
matrix setting out the mix of skills and diversity that
the board currently has or is looking to achieve in its
membership.
The Apiam Board is well balanced, comprising directors who
are proficient in all of Apiam’s activities with an appropriate
range of skills, experience and expertise to complement
the business, who have a proper understanding of and
are competent to deal with current and emerging issues
relevant to the veterinary and animal health industry and
who can effectively review and challenge the performance of
management and exercise independent judgement.
Refer to the Report of the Directors for details of directors’
skills, experience and expertise.
RECOMMENDATION 2.3 & 2.4:
A listed entity should disclose:
the names of the directors considered by the
board to be independent directors and their length
of service;
a majority of the board of a listed entity should be
independent directors.
Apiam presently has four non-executive directors, all of
whom are considered by the Board to be independent, and
one executive director.
Non-Executive Directors
Professor Andrew Vizard (Chairman) – Independent
Mr Richard Dennis – Independent
Mr Charles Sitch – Independent
Mr Michael van Blommestein – Independent
Executive Directors
Dr Christopher Richards (Managing Director) – Not
independent
Refer to the Report of Directors for information in relation to
Director’s length of service.
Directors are expected to comply with their legal, statutory
and equitable duties when discharging their responsibilities
as directors. Broadly, these are duties to:
• Act in good faith and in the best interests of Apiam as a
whole;
• Act with care and diligence;
• Act for proper purposes;
• Avoid a conflict of interest or duty; and
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Apiam Animal Health Limited
• Refrain from making improper use of information gained
through the position of director and taking improper
advantage of the position of director.
Directors may access information and seek independent
advice that they consider necessary to fulfil their
responsibilities and to exercise independent judgement in
decision making.
In respect of conflicts:
• Directors are required to act in a manner which is
consistent with the best interests of the Company as a
whole, free of any actual or possible conflicts of interest.
• Directors must:
i. disclose to the Board any actual or potential conflict
ii.
of interest or duty, or matter that might reasonably be
thought to exist as soon as the situation arises;
take all necessary and reasonable action to resolve
or avoid any actual or potential conflict of interest or
duty; and
iii. comply with all applicable law and the Constitution in
relation to disclosing material personal interests and
restrictions on voting.
•
If a conflict exists, it is expected that any director to
whom the conflict relates will leave the room when the
Board is discussing any matter to which the conflict
relates.
RECOMMENDATION 2.6:
The company should have a program for inducting
new directors and provide professional development
opportunities for directors.
New Board members are offered induction programs
to allow them to fully and actively participate in decision
making at the earliest opportunity. The induction programs
are designed to ensure that any new director has a
comprehensive knowledge of Apiam, the industry and the
market in which it operates.
Directors and key executives are encouraged to continually
update and enhance their skills and knowledge. Directors
and key executives are encouraged to become members of
relevant industry groups and professional organisations and
to update and enhance their skills and knowledge through
appropriate education and training courses.
PRINCIPLE 3 – PROMOTE ETHICAL
AND RESPONSIBLE DECISION
MAKING
RECOMMENDATION 3.1:
• Directors are expected to inform the Chair of any
A listed entity should:
proposed appointment to the board or executive of
another company as soon as practicable.
• No director will participate in the determination of their
own remuneration.
• No director will participate in the review of their own
performance.
• No director will be present for discussions at a Board
meeting on, or vote on a matter , his or her election, re-
election, or removal.
RECOMMENDATION 2.5:
The chair of the board should be an independent
director and the roles of chairperson and chief
executive officer should not be exercised by the same
individual.
Apiam’s Chairman, Professor Andrew Vizard, is considered
by the board to be an independent director.
The roles of chairperson and managing director are
exercised by Professor Andrew Vizard and Dr Christopher
Richards respectively.
have a code of conduct for its directors, senior
executives and employees; and
disclose that code or a summary of it.
Apiam recognises the need for directors and employees to
observe the highest standards of behaviour and business
ethics when engaging in corporate activity. Apiam intends
to maintain a reputation for integrity. The Board has
adopted a Code of Conduct which sets out the principles
and standards with which all officers and employees are
expected to comply in the performance of their respective
functions in respect of responsibilities to shareholders,
customers, clients, consumers and the community.
The Code also sets guidelines in respect of employment
practices, fair trading and dealing as well as conflicts of
interest. A key element of that Code is the requirement that
officers and employees act in accordance with the law and
with the highest standards of propriety. The Code and its
implementation are reviewed each year. The Apiam Code of
Conduct is displayed on the company’s website.
97
Annual Report 2016 PRINCIPLE 4 – SAFEGUARD INTEGRITY IN FINANCIAL REPORTING
RECOMMENDATION 4.1:
The board of a listed entity should:
i. have an audit committee which:
* has at least three members, all of whom are non-executive directors and a majority of whom are independent
directors; and
is chaired by an independent director who is not the chair of the board
*
ii. and disclose:
* the charter of the committee;
* the relevant qualifications and experience of the members of the committee;
and
* the number of times the committee met throughout the period and the individual attendances of the members
at those meetings.
At the date of this report the members of the Apiam Audit and Risk Management Committee are Messrs. Richard Dennis
(Chairman), Andrew Vizard, and Charles Sitch. All members are independent non-executive directors. Details of attendances by
directors are to be found in the Report of the Directors.
The members of the Committee are well qualified to perform their duties as set out in the Charter with strong financial, legal and
industry expertise. The external auditor met with the Audit and Risk Management Committee three times during the year without
management being present.
The charter of the Apiam Audit and Risk Management Committee clearly sets out the Committee’s role and responsibilities,
composition, structure and membership requirements. The Audit and Risk Management Committee has the right to access
management and seek independent professional advice in accordance with the Board Charter.
The primary function of the Committee is to assist the Board in fulfilling its corporate governance and oversight responsibilities in
relation to:
a. the adequacy and integrity of financial reporting;
b. the application of appropriate accounting policies;
c. legal and regulatory compliance;
d. internal control and risk management systems; and
e. monitoring the effectiveness of audit functions.
RECOMMENDATION 4.2:
The board should, before it approves the entity’s financial statements for a financial period, receive from the chief
executive officer and the chief financial officer a declaration that, in their opinion, the financial records of the entity
for a financial year have been properly maintained in accordance with the Corporations Act and that the financial
statements and notes for the financial year comply with the accounting standards and give a true and fair view of
the financial position and performance of the entity. The declaration must be given before the directors approve the
financial statements for the financial year.
In accordance with the section 295 of the Corporations Act, the Managing Director and Chief Financial Officer of Apiam are
required to declare in writing to the Board under section 295A(2) of the Act that in their opinion:
• Apiam’s financial records have been properly maintained in accordance with section 286 of the Act; and
• consolidated financial statements and associated notes required by the relevant accounting standards present a true and fair
view of the Company’s financial condition and operational results and comply with relevant accounting standards.
The declaration is also underpinned by representations from executive management and relevant accounting officers. The
declaration by the Managing Director and Chief Financial Officer also confirms the existence of a sound system of risk
management and internal compliance and control which implements the policies adopted by the Board and that Apiam’s risk
management and internal compliance and control system is operating efficiently and effectively in all material respects in relation
to financial reporting risks.
RECOMMENDATION 4.3:
Ensure the external auditor attends the Annual General Meeting and is available to answer questions from security
holders.
The external auditor attends the Annual General Meeting and is available to answer questions from security holders.
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Apiam Animal Health Limited
PRINCIPLE 5 – PROVIDE TIMELY AND BALANCED DISCLOSURE OF ALL
MATERIAL MATTERS CONCERNING THE COMPANY
RECOMMENDATION 5.1:
A listed entity should:
have a written policy for complying with its continuous disclosure obligations under the Listing Rules; and
disclose that policy or a summary of it.
Apiam has adopted a Continuous Disclosure Policy. A copy of the Policy is available on the Company’s website.
The Board bears the primary responsibility for ensuring the Company’s compliance with its disclosure obligations and is therefore
responsible for overseeing and implementing this Policy. The ultimate decision on whether material information needs to be
disclosed to the ASX or otherwise rests with the Board.
The Company Secretary is responsible for day-to-day compliance with the Company’s continuous disclosure obligations,
including:
i. communicating with ASX in relation to Listing Rule matters including lodging disclosures with ASX;
ii. overseeing and coordinating disclosure of information to ASX, analysts, brokers, shareholders, the media and the public;
iii. making recommendations to the Board as to whether disclosure is required;
iv. coordination, preparing and approving all media releases by the Company (not including paid advertising); and
v. ensuring all announcements and investor presentations are made publically available on the Company’s website.
Unless otherwise advised, the nominated Company spokespersons are:
the Managing Director;
the Company Secretary; and
i.
ii.
iii. the Chairperson.
The spokespersons are entitled to clarify information publicly released through ASX, but they should not add or reveal material
price sensitive matters. The Managing Director should be kept advised of all discussions with the media and consulted in relation
to any significant briefings or disclosures.
PRINCIPLE 6 – RESPECT THE RIGHTS OF SHAREHOLDERS
RECOMMENDATION 6.1:
A listed entity should provide information about itself and its governance to investors via its website.
The Apiam website provides to shareholders and other stakeholders the facility to read and download annual reports, ASX
announcements and corporate governance policies and procedures.
RECOMMENDATION 6.2:
A listed entity should design and implement, an investor relations program to facilitate effective two-way
communication with investors.
The Company respects the rights of shareholders and seeks to facilitate the effective exercise of those rights. The Company
does this by communicating effectively with shareholders, giving shareholders ready access to balanced and understandable
information about the Company and corporate records and making it easy for shareholders to participate in general meetings.
RECOMMENDATION 6.3:
A listed entity should disclose the policies and procedures it has in place to facilitate and encourage participation
at meetings of shareholders.
Notices of meeting are drafted in plain English to be easy and clear to understand. They are honest, accurate and not
misleading. Meetings are held during normal business hours and at a place convenient for the greatest possible number of
shareholders to attend.
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Annual Report 2016
RECOMMENDATION 6.4:
RECOMMENDATION 7.2:
A listed entity should give shareholders the
option to receive communications from, and send
communications to, the entity and its security registry
electronically.
The Company publishes all ASX announcements on the
Apiam website, and also sends information to shareholders
by mail or e-mail (where nominated). The Apiam website
contains important information on the Company which is of
use to shareholders in obtaining a greater understanding of
the Company.
PRINCIPLE 7 – RECOGNISE AND
MANAGE RISK
RECOMMENDATION 7.1:
The board of a listed entity should:
have a committee to oversee risk, which has
at least three members and is chaired by an
independent director; and disclose
the charter of the committee, the members of the
committee and as at the end of the period, the
number of times the committee met throughout
the period and the individual attendances of the
members at those meetings.
The Board is responsible for reviewing and ratifying
systems of risk management and internal compliance
and control. The Board has delegated to the Audit and
Risk Management Committee the responsibility for
establishment of policies on risk oversight and management.
Specifically, the Audit and Risk Management Committee has
responsibility to:
•
•
•
•
•
to ensure that the Company has implemented a sound
risk management framework and appropriate internal
control systems;
to review at least annually the effectiveness of the
Company’s risk management and internal control
systems and make relevant recommendations to the
Board;
to monitor compliance with regulatory requirements
under the ASX Listing Rules, the Corporations Act 2001
(Cth) and any other relevant guidelines;
to monitor the Company’s exposure to economic,
environmental and social sustainability risks, and make
recommendations to the Board as to how those risks
should be managed;
to make recommendations to the Board in relation to
the Company’s insurance program, having regard to the
Company’s business and the insurable risks associated
with it; and
• any other responsibilities as determined by the
Committee or the Board from time to time.
Further information is provided at Recommendation 4.1.
The board or a committee of the board should:
review the entity’s risk management framework at
least annually to satisfy itself that continues to be
sound; and
disclose, in relation to each reporting period,
whether such a review has taken place.
Management has established and implemented the
risk management system for assessing, monitoring and
managing material business risks, including sustainability
risk.
Management reports to the Audit and Risk Management
Committee outlining the material business risks to
the Company and reports on the status of the risks
and effectiveness of controls through integrated risk
management programs aimed at ensuring risks are
identified, assessed and properly managed. Each business
operational unit is responsible and accountable for
implementing and managing the standards required by the
program.
During the period, the Audit & Risk Management
Committee commenced a review of the adequacy of the
risk management framework and is to be completed in the
following period.
RECOMMENDATION 7.3:
Disclose if the Company has an internal audit
function, how it is structured and what role it
performs:
The Audit & Risk Management Committee recognises the
benefit of an internal audit function to assist in identifying
risks and monitor the effectiveness of internal controls. It
intends to consider the engagement of external providers
to assist in developing an internal audit program based on
risks identified from the risk management system and to
conduct internal audit activities in conjunction with company
personnel.
RECOMMENDATION 7.4:
Disclose whether the Company has material exposure
to economic, environmental and social sustainability
risks and, if it does, how it intends to manage those
risks.
The Company does not believe its business operations
have a material exposure to social sustainability risks.
The Company believes its diversified product range and
operations do not result in a material economic risk to the
Company.
100
Apiam Animal Health Limited PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY
RECOMMENDATION 8.1:
The board should establish a remuneration committee which:
consists of a majority of independent directors;
is chaired by an independent chair; and
has at least three members.
The Apiam Remuneration consists of a majority of independent directors, is chaired by an independent chairperson and has at
least three members.
At the date of this report the members of the Apiam Remuneration Committee are Messrs. Michael van Blommestein
(Chairman), Andrew Vizard and Charles Sitch
Refer to the Report of the Directors for the number of meetings held during the period and member attendances.
The purpose of the Committee is to assist the Board by reviewing and making recommendations to the Board in relation to:
a. the Company’s remuneration policy, including as it applies to Directors and the process by which any pool of Directors’ fees
approved by shareholders is allocated to Directors;
b. remuneration packages of senior executives, non-executive Directors and executive Directors, equity-based incentive plans
and other employee benefit programs;
c. the Company’s superannuation arrangements;
d. the process for the evaluation of the performance of the Board, its Board Committees and individual Directors;
e. the review of the performance of senior executives and members of the Board, which should take place at least annually;
and
f.
those aspects of the Company’s remuneration policies and packages, including equity-based incentives, which should be
subject to shareholder approval.
RECOMMENDATION 8.2:
Disclose the policies regarding the remuneration of Directors and senior executives. Clearly distinguish the
structure of non-executive directors’ remuneration from that of senior executives.
Non-executive directors receive a fixed fee, no termination benefits, and no incentives. Fees paid to non-executive directors
are benchmarked against similar sized companies operating in similar industries. Non-executive directors are not entitled to
participate in any executive option or executive share scheme.
The aggregate amount of directors’ fees payable to non-executive directors must not exceed the maximum amount permitted
under the Apiam Constitution of $750,000.
Executive directors have access to salary, termination benefits, superannuation benefits and a vehicle allowance. Executive
directors have no access to short term and long term incentives. The letters of appointment for directors clearly set out all
relevant entitlements as applicable to executive and non-executive directors. The level of remuneration paid to executive
directors, non-executive directors and key management personnel is set out in the Remuneration Report.
RECOMMENDATION 8.3:
Disclose any policy regarding the ability of executives participating in equity-based remuneration to limit the
economic risk of participating in the scheme.
Refer to the Remuneration Report in the Report of the Directors in relation to equity based remuneration.
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Annual Report 2016
ASX SHAREHOLDER INFORMATION
Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this report is set out below. The
information is effective as at 16 August 2016.
SUBSTANTIAL SHAREHOLDERS
The number of substantial shareholders and their associates are set out below:
Shareholder
Number
Percentage
Mr Christopher Irwin Richards
HSBC Custody Nominees (Australia) Limited
National Nominees Limited
26,852,304
6,674,728
6,070,576
27.27
6.78
6.16
VOTING RIGHTS
Ordinary Shares: On a show of hands, every member present at a meeting in person or by proxy shall have one vote and upon
a poll each share shall have one vote.
DISTRIBUTION OF EQUITY SECURITY HOLDERS
Holding
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,000 and over
No. of holders
94
237
224
280
30
865
HOLDERS OF LESS THAN A MARKETABLE PARCEL OF ORDINARY SHARES
There were no holders of less than a marketable parcel of ordinary shares.
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Apiam Animal Health Limited
TWENTY (20) LARGEST SHAREHOLDERS
Shareholder
Ordinary shares
Number of shares held
Percentage (%) of
issued shares
Mr Christopher Irwin Richards
26,852,304
27.27
HSBC Custody Nominees (Australia) Limited
National Nominees Limited
J P Morgan Nominees Limited
Cobash Pty Ltd
National Nominees Ltd
BNP Paribas Noms Pty Ltd
UBS Nominees Pty Ltd
Ms KJ Malin
BNP Paribas Nominees Pty Ltd
Jupiter Forge Pty Limited
Four Post Investments Pty Ltd
Mr RC Carmody & Mrs MM Carmody
Mr NL Leighton
Sonjaswright Pty Limited
Mr Craig James Dwyer
Mr KF Sullivan & Mrs JM Sullivan
Tocamac Pty Ltd
Cindy Jane Pty Ltd
RBC Investor Services Australia Nominees Pty Limited
UNISSUED EQUITY SECURITIES
There are no unissued equity securities.
SECURITIES EXCHANGE
The Company is listed on the Australian Securities Exchange.
6,674,728
6,070,576
4,829,313
3,834,158
2,849,211
2,668,332
2,098,275
1,724,700
1,710,055
1,419,505
1,386,700
1,333,650
1,244,131
1,200,000
1,104,321
1,010,000
986,700
933,753
923,887
6.78
6.16
4.90
3.89
2.89
2.71
2.13
1.75
1.74
1.44
1.41
1.35
1.26
1.22
1.12
1.03
1.00
0.95
0.94
70,854,299
71.95
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Annual Report 2016
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Apiam Animal Health Limited