Annual Report
30 June 2017
Big River Industries Limited
Formerly known as Big River Industries Pty Limited
This document is important and
should be read in its entirety.
Chairman and Managing
Director’s Report
It is a pleasure to deliver our first Annual Report of Big River Industries Limited as a company listed on the Australian
Securities Exchange, following our public offer in April 2017. Big River Industries has a proud heritage as an Australian
business, with the associated group of companies founded by the Pidcock family more than 100 years ago in northern
New South Wales and developed to become one of Australia’s leading manufacturers and distributors of timber
products and associated building materials, with markets across the breadth of mainland Australia.
Operating Highlights
For the year to 30 June 2017, your company slightly exceeded the Net Profit after Tax (NPAT) that was forecast in the
Prospectus dated 3 April 2017, reporting NPAT of $6.1 million compared with $6.0 million forecast in the Prospectus.
These figures are both on a pro forma basis, as explained in the Prospectus, which provides a more meaningful
measure of operating performance, unaffected by the one-off costs of the IPO process and distortions due to the
timing of acquisitions during the year. Measured on a Statutory Accounting basis, NPAT also exceeded the Prospectus
forecast, by 22.5%.
This NPAT was achieved from revenue that was slightly (1.6%) below the Prospectus forecast, primarily due to poor
weather conditions slowing activity across the East Coast during March and April. In an overall sense for the year,
strong revenue growth in NSW offset some weakness in the Western Australian and far North Queensland markets.
Your company continued its strategy of developing further its range of manufactured products. The year saw excellent
growth in recently introduced premium value-added plywood products sold into niche markets, predominantly in the
civil and commercial construction sectors. Architectural products also performed well, with growth of around 15%, with
further success in the Company’s engineered timber flooring and architectural panel range.
Sales performance of the Company’s range of plywood and formwork products was sound and saw the introduction
of imported, lower specification, formply to complement our higher specification manufactured product. This had some
impact on manufacturing volumes at one plant but also enabled improved focus on operating efficiencies. Earlier
investment in a third steel roll-forming plant enabled sound market share growth in steel formwork sales and this
product has become an important component of Big River’s formwork offering.
Operating cash flow was strong during the year, with focus particularly on working capital which assisted in achieving
cash flow $2.7 million higher than the Prospectus forecast. The balance sheet remains strong, with gearing (measured
as net debt to net debt plus equity) of only 7%. This positions the Company well to take advantage of growth
opportunities as they are identified and fund other organic growth initiatives.
Two acquisitions were completed during the year, with a third completed post balance date. Adelaide Timber and
Building Supplies was acquired in March 2017. This business markets a range of timber and building materials into
the residential construction markets. Sabdia Trade Mitre 10, located in Browns Plains, Queensland, was acquired in
April 2017 and also markets timber and building materials to the residential construction sector. These acquisitions
are highly complementary to the existing business. They strengthen the Company’s presence in two key geographic
markets, in Adelaide, where our presence was low and in South East Queensland. Both acquisitions will increase
Big River’s involvement in the important detached housing and the alterations and additions markets. To date,
both acquired businesses have performed closely in line with expectation and have been well integrated into the
Company’s operations. At the end of August 2017, the acquisition of the business of Midcoast Timbers Pty Ltd, located
on the Gold Coast, Queensland, was completed, consolidating further the industry in SE Queensland and allowing
additional economies of scale.
Dividends
Reflecting our confidence in the Company’s financial strength, the Board declared an inaugural dividend of 3.5 cents
per share, fully franked, payable on 29 September 2017. This dividend is based on underlying earnings achieved in
the second half of the 2017 fiscal year and is consistent with the payout ratio range set out in the Prospectus.
3
Annual Report Big River Industries Limited ABN 72 609 901 377 Chairman and Managing Director’s Report
Corporate Governance
Your Board takes its corporate governance responsibilities seriously. A Board Charter has been established and is
available on the Company’s website. An Audit & Risk Committee and a Remuneration and Nomination Committee
have been introduced with formal charters and with strong independent director membership. Formal written policies
have also been put in place covering code of conduct, disclosure and communication, diversity and also rules
regarding the trading in Company shares. Each of these policies are available to shareholders on Big River’s website.
People
The 2017 fiscal year has been an eventful and exciting year for the Company and, on behalf of the Board, we take
this opportunity to acknowledge the efforts and commitment of all employees in achieving the very sound results
during a period of significant change. The Directors also thank all shareholders and other stakeholders for their
continued support.
Greg Laurie Jim Bindon
Chairman Managing Director
4
Annual Report Big River Industries Limited ABN 72 609 901 377 Table of Contents
1
Corporate directory
2 Directors' report
3 Auditor's independence declaration
4
Statement of profit or loss and other comprehensive income
5 Statement of financial position
6 Statement of changes in equity
7
Statement of cash flows
8 Notes to the financial statements
9 Directors' declaration
10
Independent auditor's report to the members of Big River Industries Limited
11 Shareholder information
06
07
23
26
27
28
29
30
71
73
79
Annual Report Big River Industries Limited ABN 72 609 901 377
5
Corporate Directory
Directors
Company secretaries
Registered office
Gregory Ray Laurie
James Bernard Bindon
Martin Kaplan
Malcolm Geoffrey Jackman
Leanne Ralph
Stephen Thomas Parks
Trenayr Road
Junction Hill NSW 2460
Tel: 02 6644 0900
Share register
Link Market Services Limited
Level 12
680 George Street
Sydney NSW 2000
Tel: 1300 554 474
Auditor
Deloitte Touche Tohmatsu
Solicitors
Grosvenor Place
225 George Street
Sydney NSW 2000
Thomson Geer
Level 25
1 O’Connell Street
Sydney NSW 2000
Stock exchange listing
Big River Industries Limited shares are listed on the Australian
Securities Exchange (ASX code: BRI)
Website
bigrivergroup.com.au
Corporate Governance Statement
bigriverindustries.com.au/Investors/?page=Corporate-Governance
6
Annual Report Big River Industries Limited ABN 72 609 901 377 Directors’
Report
Annual Report Big River Industries Limited ABN 72 609 901 377
7
Log truck delivering softwood resource to the plywood manufacturing facility - Wagga Directors’ Report
The directors present their report, together with the financial statements, on the consolidated entity (referred to
hereafter as the ‘Group’) consisting of Big River Industries Limited (referred to hereafter as the ‘Company’ or ‘parent
entity’) and the entities it controlled at the end of, or during, the year ended 30 June 2017.
Directors
The following persons were directors of Big River Industries Limited during the whole of the financial year and up to
the date of this report, unless otherwise stated:
Gregory Ray Laurie
James Bernard Bindon
Martin Kaplan
Malcolm Geoffrey Jackman
Appointed 1 March 2017
Jeremy Andrew Samuel
Resigned 24 March 2017
Principal activities
During the financial year the principal continuing activities of the Group consisted of the manufacture of veneer,
plywood and formply, and the distribution of building supplies.
Dividends
Dividends paid during the financial year were as follows:
Preference dividend for the period ended 30 June 2016
A class preference dividend for the period ended 30
June 2017, paid prior to the Group listing
Consolidated
Year to 30 Jun 2017 ($)
Period from 18 Dec 2015
to 30 Jun 2016 ($)
—
2,423,302
1,660,285
—
2,423,302
1,660,285
Since the end of the financial year the directors have declared a fully franked final dividend of 3.5 cents per fully paid
ordinary share to be paid on 29 September 2017.
Review of operations
With an operating history of over 97 years, the Group has established itself as a diverse manufacturer and distributor
of timber and building products. In its maiden financial results as a listed public company, Big River Industries Limited
has recorded a statutory net profit after tax (‘NPAT’) of $3.9 million for the 12 months to June 2017, up 22.5% on the
prospectus forecast of $3.2 million and up from the statutory loss of $1.9 million recorded in the part-year period from
18 December 2015 to 30 June 2016.
Lower than expected IPO costs expensed in the statement of profit and loss along with some income tax savings from
the prior year contributed to the improved statutory NPAT compared with the Prospectus, with underlying trading in
line with the prospectus. Actual pro forma NPAT of $6.1 million was up 1.7% on the prospectus forecast of $6.0 million.
8
Annual Report Big River Industries Limited ABN 72 609 901 377 Directors’ Report
A reconciliation between the Statutory financial performance and the Prospectus pro forma NPAT is set out below.
30 Jun 2017 Actual
($’000)
30 Jun 2017
Prospectus ($’000)
Statutory NPAT
Pro forma adjustment for acquisitions
Related party costs
Incremental public company costs
Initial public offering expenses
Interest expense
Additional tax deductions
Income tax effect
Pro forma NPAT
3,928
1,006
480
(306)
1,905
366
(252)
(1,035)
6,092
3,206
up
22.5%
1,270
480
(306)
2,125
336
-
(1,119)
5,992
up
1.7%
The two acquisitions towards the end of the year, being Adelaide Timber and Building Supplies and Sabdia Mitre
10 made a positive contribution since purchase. Pro forma EBITDA of $11.6 million, was up 1.5% on the prospectus
forecast of $11.4 million, which is explained in the table below.
30 Jun 2017 Actual
($’000)
30 Jun 2017
Prospectus ($’000)
Statutory EBITDA
Pro forma adjustment for acquisitions
Related party costs
Incremental public company costs
Initial public offering expenses
Pro forma EBITDA
8,144
1,395
480
(306)
1,905
11,618
7,595
up
7.2%
1,547
480
(306)
2,125
11,441
up
1.5%
Statutory revenue for the 12 months totalled $177.1 million, which was in line with Prospectus forecast statutory revenue
of $177.7 million and pro forma revenue was marginally down on prospectus forecasts primarily due to poor weather
conditions towards the end of the year.
30 Jun 2017 Actual
($’000)
30 Jun 2017
Prospectus ($’000)
Statutory revenue
Pro forma adjustment for acquisitions
Pro forma revenue
177,089
20,706
197,795
177,693
down
(0.3%)
23,343
201,036
down
(1.6%)
9
Annual Report Big River Industries Limited ABN 72 609 901 377 Directors’ Report
The net operating cash flow after capital expenditure for the 12 months to June 2017 was $3.5 million, exceeding the
prospectus forecast of $0.8 million by $2.7 million. This was primarily due to strong working capital management and
lower than expected tax payments. As a result, the net debt position at 30 June 2017 was only $4.0 million.
30 Jun 2017 Actual
($’000)
30 Jun 2017
Prospectus ($’000)
Statutory EBITDA
Change in working capital
Operating cash flow
Operating cash flow conversion
Finance costs
Income tax paid
Operating cash flow after finance costs and income tax
Net capital expenditure
Net operating cash flow after capital expenditure
Proceeds from offer
Initial public offering expenses
Repayment of bank debt
Net cash flow
8,144
(1,128)
7,016
86.1%
(923)
(1,352)
4,741
(1,207)
3,534
17,000
(2,519)
(12,929)
5,086
7,595
(2,185)
5,410
71.2%
(1,008)
(2,351)
2,051
(1,213)
838
17,000
(2,601)
(12,847)
2,390
Significant changes in the state of affairs
On 24 February 2017, the Company converted from a proprietary company to a public company changing its name
from Big River Industries Pty Limited to Big River Industries Limited.
On 1 March 2017, the subsidiary Big River Group Pty Limited, executed a business purchase deed to acquire the
business assets of Adelaide Timber and Building Supplies, a business located in Adelaide, South Australia. The
purchase price was $7,534,192 which includes inventory and plant and equipment and was settled through the
payment of $3,834,192 in cash and the issue of ordinary shares to a value of $3,500,000. An amount of $200,000 is
payable upon achieving an agreed EBITDA target.
On 8 March 2017, the subsidiary Big River Group Pty Limited, executed a business purchase deed to acquire the
business assets of Sabdia Mitre 10, a business located in Brisbane, Queensland. The purchase price was $1,250,000
which includes inventory and plant and equipment and was settled through the payment of $1,250,000 in cash.
On 24 April 2017, the Company converted all the A class preference shares to ordinary shares on a one-for-one basis.
On 27 April 2017, the Company successfully completed its Initial Public Offering raising $17,000,000 and was admitted
to the Official List of the Australian Securities Exchange (‘ASX’) under ASX code BRI. Official quotation of securities
commenced on 1 May 2017.
There were no other significant changes in the state of affairs of the Group during the financial year.
10
Annual Report Big River Industries Limited ABN 72 609 901 377
Directors’ Report
Matters subsequent to the end of the financial year
On 29 August 2017, the directors have declared a fully franked final dividend of 3.5 cents per fully paid ordinary share
to be paid on 29 September 2017.
No other matter or circumstance has arisen since 30 June 2017 that has significantly affected, or may significantly
affect the Group’s operations, the results of those operations, or the Group’s state of affairs in future financial years.
Likely developments and expected results of operations
The building products market is closely linked to activity levels in the residential, commercial, civil and infrastructure
construction industry (comprising both new builds and additions and alterations) in Australia. The industry is cyclical
and is highly sensitive to a broad range of economic and other factors that are beyond the Company’s control.
The Company has a strong balance sheet and a healthy undrawn banking facility which will enable the Company to
support the organic and acquisition growth opportunities outlined in its prospectus dated 3 April 2017. At the date
of this report the Company does not expect any material change to the pro forma financial forecasts outlined in the
prospectus for the year ended 30 June 2018.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Information on directors
Name:
Title:
Qualifications:
Experience and
expertise:
Gregory Ray Laurie
Independent Non-Executive Chairman
Greg holds a Bachelor of Commerce from UNSW and has completed an Advanced
Management Programme at the University of Pittsburgh. Greg is a Fellow of the Australian
Institute of Company Directors.
Greg has been the Non-Executive Chairman of the Company since March 2017, having
formerly served as an independent non-executive director of Big River Group Pty Limited
from September 2006 to February 2016. Greg was previously Finance Director of Crane
Group Limited from 1989 to 2003.
Other current
directorships:
Independent non-executive director of Nick Scali Limited, Bradken Limited and Shriro
Holdings Limited
Former directorships
(last 3 years):
None
Special
responsibilities:
Chairman of the Board
Interests in shares:
30,000 ordinary shares (indirectly)
Interests in options:
None
11
Annual Report Big River Industries Limited ABN 72 609 901 377 Directors’ Report
Name:
Title:
Qualifications:
Experience and
expertise:
James Bernard Bindon
Managing Director and Chief Executive Officer
Jim holds a Bachelor of Agricultural Economics (Honours) from the University of New
England and a Masters of Business Administration from the University of Queensland. Jim
is a member of the Australian Institute of Company Directors.
Jim joined Big River in January 2001 and has been Chief Executive Officer and Managing
Director since 2005. He has been a director of Big River Group Pty Limited since July
2005 and a director of Big River Group Holdings Pty Ltd and the Company since February
2016. Prior to his current role as Chief Executive Officer and Managing Director, Jim was
the Chief Financial Officer and Company Secretary from 2001 to 2005. Since working
for Big River, Jim has developed and led the Group's strategy to transform Big River
from a manufacturing focused business to a diversified provider of timber and building
products. Prior to working at Big River, Jim held the position of Business Manager of Sugar
and Horticulture at Incitec, where he was responsible for segment profitability, strategy
and marketing.
Other current
directorships:
Former directorships
(last 3 years):
Special
responsibilities:
None
None
None
Interests in shares:
400,000 ordinary shares (indirectly)
Interests in options:
200,000 options (indirectly)
Name:
Title:
Qualifications:
Experience and
expertise:
Other current
directorships:
Former directorships
(last 3 years):
Special
responsibilities:
Interests in shares:
Martin Kaplan
Non-Executive Director
Martin holds a Bachelor of Commerce degree from the University of Cape Town and is a
Chartered Accountant (South Africa & Canada).
Martin has been a Non-Executive Director of the Company since November 2015 and
a director of Big River Group Pty Limited and Big River Group Holdings Pty Ltd since
February 2016. Martin is currently an Investment Director of Anacacia Capital Pty Ltd, the
management company of the Major Shareholder Anacacia.
None
None
Chairman of the Audit and Risk Committee
Martin is an Investment Director of Anacacia Capital Pty Ltd which manages the interests
of Anacacia Partnership II, L.P., a substantial shareholder of the Company. Martin does not
have a relevant interest in those shares for the purposes of the Corporations Act 2001.
Interests in options:
None
12
Annual Report Big River Industries Limited ABN 72 609 901 377 Directors’ Report
Name:
Title:
Qualifications:
Experience and
expertise:
Malcolm Geoffrey Jackman
Independent Non-Executive Director
Malcolm has a Bachelor of Science in Pure Mathematics and a Bachelor of Commerce in
Accounting from Auckland University. He is a fellow of the Australian Institute of Directors
and a recipient of the Centenary of Federation Medal.
Malcolm has been an independent Non-Executive Director of the Company since
February 2016. Malcolm has also been a director of Big River Group Pty Limited and Big
River Group Holdings Pty Ltd since February 2016. Malcolm is a member of the Anacacia
Capital Business Advisory Council. Malcolm is also currently the Chief Executive Officer
of SAFECOM (South Australian Fire & Emergency Services Commission) where he is
employed in a full time capacity.
Other current
directorships:
None
Former directorships
(last 3 years):
Non-executive director of Subzero Group Limited. Managing Director of Elders Limited
and Coates Hire Limited
Special
responsibilities:
Chairman of the Nomination and Remuneration Committee
Interests in shares:
68,493 ordinary shares (indirectly)
Interests in options:
None
Other current directorships’ quoted above are current directorships for listed entities only and excludes directorships
of all other types of entities, unless otherwise stated.
Former directorships (last 3 years)’ quoted above are directorships held in the last 3 years for listed entities only and
excludes directorships of all other types of entities, unless otherwise stated.
Company secretaries
Leanne Ralph and Stephen Thomas Parks are co-company secretaries.
Leanne Ralph
Leanne is a company secretary of the Company, joining the Company with over 15 years of experience in providing
company secretary and corporate governance services. Leanne is also the founder and director of Boardworx, a
corporate governance and compliance services firm. Leanne is company secretary of several other Australian listed
companies. Leanne holds a Bachelor of Business and a graduate diploma in Applied Corporate Governance. She is
a member of the Governance Institute of Australia and their Corporate and Legal Issues Committee, and a Graduate
member of the Australian Institute of Company Directors.
Stephen Thomas Parks
Steve joined Big River in July 2008 as Chief Financial Officer. Prior to working for Big River, Steve was the Chief
Financial Officer and General Manager at WDS International, where he was responsible for controlling operating
performance and leading finance and administration functions including forecasting, cash management, treasury,
payroll, information technology, general administration and warehouse operations. Prior to this role, Steve worked
as Financial Controller for a number of Australasian companies including Brazin, Strathfield Group, Sunshades
Eyewear and Noel Leeming. Steve holds a Bachelor of Commerce from the University of Canterbury and is a member
of the Australian Institute of Company Directors. Steve is a qualified accountant and is a Fellow of the Institute of
Public Accountants.
13
Annual Report Big River Industries Limited ABN 72 609 901 377
Directors’ Report
Meetings of directors
The number of meetings of the Company’s Board of Directors (‘the Board’) and of each Board committee held during
the year ended 30 June 2017, and the number of meetings attended by each director were:
Full Board
Nomination and
Remuneration Committee
Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
6
16
14
16
8
7
16
16
16
9
1
-
1
1
-
1
-
1
1
-
-
-
-
-
-
-
-
-
-
-
G Laurie *
J Bindon
M Kaplan
M Jackman
J Samuel **
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
* Appointed 1 March 2017
** Resigned 24 March 2017
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the Group, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and
controlling the activities of the entity, directly or indirectly, including all directors.
The key management personnel of the Group are the directors of Big River Industries Limited and the following
persons:
⊲
Dean Henderson - General Manager of Sales and Marketing
⊲
Steve Parks - Chief Financial Officer (and co-Company Secretary)
The remuneration report is set out under the following main headings:
⊲
⊲
⊲
⊲
⊲
⊲
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to key management personnel
14
Annual Report Big River Industries Limited ABN 72 609 901 377 Directors’ Report
Principles used to determine the nature and amount of remuneration
The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic
objectives and the creation of value for shareholders, and it is considered to conform to the market best practice for
the delivery of reward. The Board ensures that executive reward satisfies the following key criteria for good reward
governance practices:
⊲
⊲
⊲
⊲
competitiveness and reasonableness;
acceptability to shareholders;
performance linkage / alignment of executive compensation; and
transparency.
The Nomination and Remuneration Committee is responsible for determining and reviewing remuneration
arrangements for its directors and executives. The performance of the Group depends on the quality of its
directors and executives. The remuneration philosophy is to attract, motivate and retain high performance and high
quality personnel.
The Nomination and Remuneration Committee has structured an executive remuneration framework that is market
competitive and complementary to the reward strategy of the Group.
The reward framework is designed to align executive reward to shareholders’ interests. The Board has considered
that it should seek to enhance shareholders’ interests by:
⊲
⊲
having economic profit as a core component;
focusing on sustained growth in shareholder value and delivering constant or increasing return on assets as
well as focusing the executive on key non-financial drivers of value; and
⊲
attracting and retaining high calibre executives.
Additionally, the reward framework should seek to enhance executives’ interests by:
⊲
⊲
⊲
rewarding capability and experience;
reflecting competitive reward for contribution to growth in shareholder value; and
providing a clear structure for earning rewards.
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Non-executive directors remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive
directors’ fees and payments are reviewed annually by the Nomination and Remuneration Committee. The Nomination
and Remuneration Committee may, from time to time, receive advice from independent remuneration consultants to
ensure non-executive directors’ fees and payments are appropriate and in line with the market. The chairman’s fees
are determined independently to the fees of other non-executive directors based on comparative roles in the external
market. The chairman is not present at any discussions relating to the determination of his own remuneration. Non-
executive directors do not receive share options or other incentives.
ASX listing rules require the aggregate non-executive directors’ remuneration be determined periodically by a general
meeting. Unless otherwise determined by a resolution of Shareholders, the maximum aggregate remuneration
payable by the Company to all Non-Executive Directors of the Company for their services as Directors, including their
services on a Board Committee or Sub-Committee and including superannuation is limited to $500,000 per annum
(in total).
Executive remuneration
The Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration
which has both fixed and variable components.
15
Annual Report Big River Industries Limited ABN 72 609 901 377 Directors’ Report
The executive remuneration and reward framework has two components:
⊲
⊲
fixed base salary, including superannuation and non-monetary benefits; and
short-term performance incentives.
The combination of these comprises the executive’s total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually
by the Nomination and Remuneration Committee based on individual and business unit performance, the overall
performance of the Group and comparable market remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle
benefits) where it does not create any additional costs to the Group and provides additional value to the executive.
The short-term incentives (‘STI’) program is designed to align the targets of the business with the performance
hurdles of executives. STI payments granted to executives are at the discretion of the Board and are based on
the achievement of certain financial hurdles, principally relating to earnings before interest, tax, depreciation
and amortisation (‘EBITDA’) performance, and key performance indicators (‘KPI’s’) being achieved. KPI’s include
profit contribution, cash management, customer satisfaction, safety performance, leadership contribution and
product management.
The Company has no long term incentive (LTI) plan in place at present. However, the Directors consider that the long-
term interests of the senior executives are presently aligned with those of shareholders as these executives, including
the Chief Executive Officer and the Chief Financial Officer, are, and will remain, existing shareholders and option
holders either directly or through persons or entities nominated by them. Furthermore, the shares and options held by
those executives or their nominees are subject to escrow arrangements. It is the intention of the Directors to consider
the introduction of an LTI plan during the next twelve months, taking advice from independent advisors.
Consolidated entity performance and link to remuneration
Remuneration for the senior executives is directly linked to the performance of the Group. A portion of their STI
is dependent on defined EBITDA targets being met. The remaining portion of the STI is at the discretion of the
Nomination and Remuneration Committee based on performance against personal objectives. Refer to the section
‘Additional information’ below for details of the earnings for the last two years.
Use of remuneration consultants
During the financial year ended 30 June 2017, the Group did not engage remuneration consultants.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
16
Annual Report Big River Industries Limited ABN 72 609 901 377
Directors’ Report
Short-term benefits
Cash
salary and
fees $
Cash
bonus $
Non-
monetary
$
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Super-
annuation $
Leave
benefits $
Equity-
settled $
Total $
Year to 30 Jun
2017
Non-Executive
Directors:
G Laurie***
30,207
M Kaplan*
-
M Jackman
46,404
-.
-
-
-
-
326,342
40,000
J Samuel**
Executive
Directors:
J Bindon
Other Key
Management
Personnel:
D Henderson
251,617
22,527
S Parks
241,555
40,000
896,125
102,527
-
-
-
-
-
-
-
-
2,870
-
1,193
-
-
-
-
-
29,417
9,406
26,363
25,297
6,125
7,061
85,140
22,592
-
-
-
-
-
-
-
-
33,077
-
47,597
-.
405,165
306,632
313,913
1,106,384
* M Kaplan waived his Director’s fees (including any committee fee to which he is entitled) until 31 March 2019.
** Remuneration is for the period from 1 July 2016 to date of resignation, 24 March 2017.
*** Remuneration is for the period from date of appointment, 1 March 2017, to 30 June 2017.
17
Annual Report Big River Industries Limited ABN 72 609 901 377 Directors’ Report
Short-term benefits
Post-
employment
benefits
Year to 30 Jun
2016
Cash salary
and fees $
Cash bonus
$
Non-
monetary $
Super-
annuation $
Long-term
benefits
Leave
benefits $
Share-
based
payments
Equity-
settled $
Non-Executive
Directors:
M Kaplan
M Jackman*
J Samuel*
Executive
Directors:
J Bindon
Other Key
Management
Personnel:
-
14,462
-.
337,597
-
-
-
-
D Henderson
254,883
45,647
S Parks
244,714
43,058
851,656
88,705
-
-
-
-
-
-
-
-
-
-
-
-
-
27,847
27,749
26,753
25,171
79,771
7,569
6,471
41,789
-
-
-
-
-
-
-
Total $
-
14,462
-.
393,193
334,852
319,414
1,061,921
* Remuneration is for the period from appointment, 19 February 2016 to 30 June 2016.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Executive Directors:
J Bindon
Other Key
Management
Personnel:
D Henderson
S Parks
Fixed remuneration
At risk - STI
At risk - LTI
Year to 30
Jun 2017
Period from
18 Dec 2015
to 30 Jun
2016
Year to 30
Jun 2017
Period from
18 Dec 2015
to 30 Jun
2016
Year to 30
Jun 2017
Period from
18 Dec 2015
to 30 Jun
2016
90%
100%
10%
-
93%
87%
86%
87%
7%
13%
14%
13%
-
-
-
-
-
-
18
Annual Report Big River Industries Limited ABN 72 609 901 377 Directors’ Report
The proportion of the cash bonus paid/payable or forfeited is as follows:
Cash bonus paid/payable
Cash bonus forfeited
Year to 30 Jun
2017
Period from 18
Dec 2015 to 30
Jun 2016
Year to 30 Jun
2017
Period from 18
Dec 2015 to 30
Jun 2016
32%
39%
72%
-
68%
100%
79%
78%
61%
28%
21%
22%
Name
Executive Directors:
J Bindon
Other Key Management
Personnel:
D Henderson
S Parks
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
Details of these agreements are as follows:
Name:
Title:
J Bindon
Managing Director and Chief Executive Officer
Agreement commenced:
Term of agreement:
January 2001
No fixed term
Details:
Name:
Title:
Either Jim or the Company may terminate the employment contract by giving 6
months' written notice to the other party.
D Henderson
General Manager – Sales and Marketing
Agreement commenced:
July 2005
Term of agreement:
No fixed term
Details:
Name:
Title:
Either Dean or the Company may terminate the employment contract by giving 1
months' written notice to the other party.
S Parks
Chief Financial Officer and co-Company Secretary
Agreement commenced:
July 2008
Term of agreement:
No fixed term
Details:
Steve may terminate his employment contract by giving 1 months' written notice
to the Company and the Company may terminate the employment contract by
giving 4 months' written notice to Steve.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
19
Annual Report Big River Industries Limited ABN 72 609 901 377 Directors’ Report
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the
year ended 30 June 2017.
Options
There were no options over ordinary shares issued to directors and other key management personnel as part of
compensation that were outstanding as at 30 June 2017.
There were no options over ordinary shares granted to or vested by directors and other key management personnel
as part of compensation during the year ended 30 June 2017.
Additional information
The results of the Group for the two years to 30 June 2017 are summarised below:
Sales revenue
EBITDA
EBIT
Profit/(loss) after income tax
2017 $
176,891,981
8,144,377
6,175,247
3,927,681
2016 $
71,377,787
(1,085,537)
(1,854,145)
(1,949,368)
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key
management personnel of the Group, including their personally related parties, is set out below:
Balance at the
start of the year
Received
as part of
remuneration
Additions Disposals/ other
Balance at the
end of the year
Ordinary shares
G Laurie
M Jackman
J Bindon
D Henderson
S Parks
-
-
400,000
250,000
200,000
850,000
-
-
-
-
-
-
30,000
68,493
-
-
20,000
118,493
-
-
-
-
-
-
30,000
68,493
400,000
250,000
220,000
968,493
20
Annual Report Big River Industries Limited ABN 72 609 901 377 Directors’ Report
Option holding
The number of options over ordinary shares in the Company held during the financial year by each director and other
members of key management personnel of the Group, including their personally related parties, is set out below:
Balance at the
start of the year
Granted
Exercised
Expired/
forfeited/ other
Balance at the
end of the year
Options over
ordinary shares
J Bindon
D Henderson
S Parks
Options over ordinary shares
J Bindon
D Henderon
S Parks
200,000
125,000
100,000
425,000
-
-
-
-
-
-
-
-
-
-
-
-
200,000
125,000
100,000
425,000
Vested and exercisable
Vested and
unexercisable
Balance at the end of
the year
200,000
125,000
100,000
425,000
-
-
-
-
200,000
125,000
100,000
425,000
This concludes the remuneration report, which has been audited.
Shares under option
Unissued ordinary shares of Big River Industries Limited under option at the date of this report are as follows:
Grant date
19 February 2016
13 February 2017
Expiry date
Exercise price
Number under option
19 February 2021
13 February 2022
$2.00
$2.20
1,370,000
45,455
1,415,455
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue
of the Company or of any other body corporate.
Shares issued on the exercise of options
There were no ordinary shares of Big River Industries Limited issued on the exercise of options during the year ended
30 June 2017 and up to the date of this report.
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives
of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of the liability and the amount of the premium.
21
Annual Report Big River Industries Limited ABN 72 609 901 377 Directors’ Report
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of
the Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the
Company or any related entity.
Proceedings on 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.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the
auditor are outlined in note 26 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by
another person or firm on the auditor’s behalf), is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 26 to the financial statements do not
compromise the external auditor’s independence requirements of the Corporations Act 2001 for the following reasons:
⊲
⊲
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES
110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards
Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-making
capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.
Officers of the Company who are former partners of Deloitte Touche Tohmatsu
There are no officers of the Company who are former partners of Deloitte Touche Tohmatsu.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set
out immediately after this directors’ report.
Auditor
Deloitte Touche Tohmatsu continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
On behalf of the directors
Gregory Laurie
Chairman
29 August 2017
Sydney
James Bindon
Managing Director
22
Annual Report Big River Industries Limited ABN 72 609 901 377 Auditor’s
Independence
Declaration
Annual Report Big River Industries Limited ABN 72 609 901 377
23
Formwork materials supplied for concrete formwork on a multi-residential apartment complex - Brisbane Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Sydney, NSW, 2000
Australia
Phone: +61 2 9322 7000
www.deloitte.com.au
29 August 2017
The Board of Directors
Big River Industries Pty Limited
Trenayr Road
Junction Hill NSW 2460
Dear Board Members
Big River Industries Pty Limited and Controlled Entities
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of Big River Industries Pty Limited and Controlled Entities.
As lead audit partner for the audit of the financial statements of Big River Industries Pty Limited and
Controlled Entities for the financial year ended 30 June 2017, I declare that to the best of my knowledge and
belief, there have been no contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Alfred Nehama
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
16
24
Annual Report Big River Industries Limited ABN 72 609 901 377
Financial
Statements
Annual Report Big River Industries Limited ABN 72 609 901 377
2525
Spotted Gum Armourpanel supplied for Aesop store fitout - AdelaideAnnual Report Big River Industries Limited ABN 72 609 901 377 Statement of profit or loss and other
comprehensive income For the year
ended 30 June 2017
Revenue from continuing operations
Other income
Expenses
Raw materials and consumables used
Employee benefits expense
Depreciation and amortisation expense
IPO transaction costs
Other expenses
Finance costs
Profit/(loss) before income tax (expense)/benefit from continuing operations
Income tax (expense)/benefit
Profit/(loss) after income tax (expense)/benefit from continuing operations
Loss after income tax benefit from discontinued operations
Profit/(loss) after income tax (expense)/benefit for the year attributable to
the owners of Big River Industries Limited
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the owners of Big
River Industries Limited
Total comprehensive income for the year is attributable to:
Continuing operations
Discontinued operations
Consolidated
Note
Year to 30
Jun 2017 $
18 Dec 2015
to 30 Jun
2016 $
5
6
177,089,181
71,422,647
57,451
(121,574,190)
(50,124,051)
(22,955,089)
(9,312,932)
7
(1,969,130)
(686,528)
(1,904,681)
-
(22,568,295)
(12,254,665)
7
8
9
(923,545)
(384,286)
5,251,702
(1,339,815)
(1,324,021)
19,478
3,927,681
(1,320,337)
-
(629,031)
22
3,927,681
(1,949,368)
-
-
3,927,681
(1,949,368)
3,927,681
(1,320,337)
9
-
(629,031)
3,927,681
(1,949,368)
Cents
Cents
Earnings per share for profit/(loss) from continuing operations attributable
to the owners of Big River Industries Limited
Basic earnings per share
Diluted earnings per share
Earnings per share for loss from discontinued operations attributable to the
owners of Big River Industries Limited
Basic earnings per share
Diluted earnings per share
Earnings per share for profit/(loss) attributable to the owners of Big River
Industries Limited
Basic earnings per share
Diluted earnings per share
35
35
35
35
35
35
13.77
13.77
(217.56)
(217.56)
-
-
(45.91)
(45.91)
13.77
13.77
(263.48)
(263.48)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
26
Annual Report Big River Industries Limited ABN 72 609 901 377 Statement of financial position as at
30 June 2017
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Deferred tax
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Income tax
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Deferred tax
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Accumulated losses
Total equity
Consolidated
Note
30 Jun 2017 $
30 Jun 2016 $
10
11
12
13
14
15
8
16
17
8
18
19
8
20
21
22
3,551,708
8,505
36,845,446
32,039,743
24,441,759
18,775,844
905,224
842,419
65,744,137
51,666,511
24,563,327
24,860,507
7,420,632
942,699
2,333,461
1,386,295
34,317,420
27,189,501
100,061,557
78,856,012
30,926,342
23,803,871
1,330,804
1,186,213
4,551,142
429,214
2,933,597
2,563,936
36,376,956
31,348,163
6,239,245
11,988,183
422,400
498,357
-
669,318
7,160,002
12,657,501
43,536,958
44,005,664
56,524,599
34,850,348
58,629,873
38,460,001
(2,105,274)
(3,609,653)
56,524,599
34,850,348
The above statement of financial position should be read in conjunction with the accompanying notes.
27
Annual Report Big River Industries Limited ABN 72 609 901 377 Statement of changes in equity For
the year ended 30 June 2017
Consolidated
Balance at 18 December 2015
Loss after income tax benefit for the period
Other comprehensive income for the period, net of tax
Total comprehensive income for the period
Transactions with owners in their capacity as owners:
Issued capital
$
Accumulated
losse $
Total equity $
-
-
-
-
-
-
(1,949,368)-
(1,949,368)
-
-
(1,949,368)
(1,949,368)
Contributions of equity, net of transaction costs (note 21)
38,460,001
-
38,460,001
Dividends paid (note 23)
Balance at 30 June 2016
Consolidated
Balance at 1 July 2016
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
-
(1,660,285)
(1,660,285)
38,460,001
(3,609,653)
34,850,348
Issued capital
$
Accumulated
losse $
Total equity $
38,460,001
(3,609,653)
34,850,348
-
-
-
3,927,681
3,927,681
-
-
3,927,681
3,927,681
Contributions of equity, net of transaction costs (note 21)
20,169,872
-
20,169,872
Dividends paid (note 23)
Balance at 30 June 2017
-
(2,423,302)
(2,423,302)
58,629,873
(2,105,274)
56,524,599
The above statement of changes in equity should be read in conjunction with the accompanying notes.
28
Annual Report Big River Industries Limited ABN 72 609 901 377 Statement of cash flows For the year
ended 30 June 2017
Consolidated
Note
Year to 30 Jun
2017 $
Period from 18
Dec 2015 to 30
Jun 2016 $
Cash flows from operating activities
Receipts from customers (inclusive of GST)
189,775,476
75,718,493
Payments to suppliers and employees (inclusive of GST)
(182,955,997)
(72,441,181)
Other revenue
Interest and other finance costs paid
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
Payment for purchase of businesses, net of cash acquired
Payment for purchase of subsidiary, net of cash acquired
Payments for property, plant and equipment
Proceeds from disposal of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Payments for non-controlling interest
Proceeds from borrowings
Repayment of borrowings
Dividends paid
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
6,819,479
3,277,312
197,200
49,347
(923,545)
(1,351,701)
(384,286)
(413,847)
34
4,741,433
2,528,526
31
31
14
21
21
(5,084,192)
-
-
(48,892,492)
(1,339,718)
(748,274)
132,727
-
(6,291,183)
(49,640,766)
17,100,001
38,460,001
(614,470)
-
-
(3,625,066)
5,020,000
12,375,306
(12,418,487)
-
23
(2,423,302)
(1,660,285)
6,663,742
45,549,956
5,113,992
(1,562,284)
Cash and cash equivalents at the beginning of the financial year
(1,562,284)
-
Cash and cash equivalents at the end of the financial year
10
3,551,708
(1,562,284)
The above statement of cash flows should be read in conjunction with the accompanying notes.
29
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the Financial Statements
30 June 2017
Note 1. General information
The financial statements cover Big River Industries Limited as a Group consisting of Big River Industries Limited and
the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars,
which is Big River Industries Limited’s functional and presentation currency.
Big River Industries Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
Trenayr Road
Junction Hill NSW 2460
A description of the nature of the Group’s operations and its principal activities are included in the directors’ report,
which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 29 August 2017.
The directors have the power to amend and reissue the financial statements.
Incorporation
The Company was incorporated on 18 December 2015. Accordingly, comparative figures are for the period from date
of incorporation to 30 June 2016. Current year figures are for the full year to 30 June 2017.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001,
as appropriate for for-profit oriented entities. These financial statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board (‘IASB’).
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable,
the revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss,
investment properties, certain classes of property, plant and equipment and derivative financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving
a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 3.
30
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the Financial Statements 30 June 2017
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 30.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Big River Industries
Limited (‘Company’ or ‘parent entity’) as at 30 June 2017 and the results of all subsidiaries for the year then ended. Big
River Industries Limited and its subsidiaries together are referred to in these financial statements as the ‘Group’.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group
is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the
asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised
directly in equity attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
Group recognises the fair value of the consideration received and the fair value of any investment retained together
with any gain or loss in profit or loss.
Operating segments
Operating segments are presented using the ‘management approach’, where the information presented is on
the same basis as the internal reports provided to the Chief Operating Decision Makers (‘CODM’). The CODM is
responsible for the allocation of resources to operating segments and assessing their performance.
Revenue recognition
Revenue is recognised when it is probable that the economic benefit will flow to the Group and the revenue can be
reliably measured. Revenue is measured at the fair value of the consideration received or receivable.
Sale of goods
Sale of goods revenue is recognised when the goods are delivered, at which time the risks and rewards are
transferred to the customer and there is a valid sales contract. Amounts disclosed as revenue are net of sales returns.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating
the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective
interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
31
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Income tax
The Group is a tax-consolidated group under Australian taxation law, of which Big River Industries Limited is the head
entity. As a result, members in the group are subject to income tax through their membership of the tax-consolidated
group. The consolidated current and deferred tax amounts for the tax-consolidated group are allocated to the head
entity of the tax-consolidated group. Current tax liabilities and assets and deferred tax assets arising from unused tax
losses and relevant tax credits are then accounted for as immediately assumed by the head entity, as under Australian
taxation law the head entity has the legal obligation (or right) to these amounts.
The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on
the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where
applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied
when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively
enacted, except for:
⊲ When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither
the accounting nor taxable profits; or
⊲ When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures,
and the timing of the reversal can be controlled and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date.
Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be
available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the
extent that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
Discontinued operations
A discontinued operation is a component of the Group that has been disposed of or is classified as held for sale and
that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated
plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to
resale. The results of discontinued operations are presented separately on the face of the statement of profit or loss
and other comprehensive income.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
Group’s normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12
months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or
used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group’s normal operating cycle; it is
held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is
no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other
liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
32
Annual Report Big River Industries Limited ABN 72 609 901 377
Notes to the financial statements 30 June 2017
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value. For the statement of cash flows presentation
purposes, cash and cash equivalents also includes bank overdrafts, which are shown within borrowings in current
liabilities on the statement of financial position.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any provision for impairment. Trade receivables are generally due for settlement within
30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are
written off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when
there is objective evidence that the Group will not be able to collect all amounts due according to the original terms
of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy
or financial reorganisation and default or delinquency in payments (more than 90 days overdue) are considered
indicators that the trade receivable may be impaired. The amount of the impairment allowance is the difference
between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original
effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is
immaterial.
Other receivables are recognised at amortised cost, less any provision for impairment.
Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value on a
‘weighted average’ basis. Cost comprises of direct materials and delivery costs, direct labour, import duties and other
taxes, and an appropriate proportion of variable and fixed overhead expenditure based on normal operating capacity.
Costs of purchased inventory are determined after deducting rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the acquisition of the items. The cost of fixed assets constructed
within the Group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed
and variable overhead.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and
equipment (excluding land) over their expected useful lives as follows:
Buildings
Plant and equipment
25 to 40 years
5 to 25 years
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the
improvements, whichever is shorter.
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit
to the Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits.
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement
and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset
or assets and the arrangement conveys a right to use the asset.
33
Annual Report Big River Industries Limited ABN 72 609 901 377
Notes to the financial statements 30 June 2017
A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially
all the risks and benefits incidental to the ownership of leased assets, and operating leases, under which the lessor
effectively retains substantially all such risks and benefits.
Finance leases are capitalised. A lease asset and liability are established at the fair value of the leased assets, or if
lower, the present value of minimum lease payments. Lease payments are allocated between the principal component
of the lease liability and the finance costs, so as to achieve a constant rate of interest on the remaining balance of the
liability.
Leased assets acquired under a finance lease are depreciated over the asset’s useful life or over the shorter of the
asset’s useful life and the lease term if there is no reasonable certainty that the Group will obtain ownership at the end
of the lease term.
Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-
line basis over the term of the lease.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair
value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life
intangible assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible
assets are subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in
profit or loss arising from the derecognition of intangible assets are measured as the difference between net disposal
proceeds and the carrying amount of the intangible asset. The method and useful lives of finite life intangible assets
are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for prospectively
by changing the amortisation method or period.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for
impairment, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried
at cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not
subsequently reversed.
Customer relationships
Customer relationships acquired in a business combination are amortised on a straight-line basis over the period of
their expected benefit, being their finite life of up to 5 years.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.
Other non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. The value-in-use
is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to
the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are
grouped together to form a cash-generating unit.
34
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted.
The amounts are unsecured and are usually paid within 30 days of recognition.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs.
They are subsequently measured at amortised cost using the effective interest method.
Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting date,
the loans or borrowings are classified as non-current.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed
in the period in which they are incurred.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event,
it is probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of
the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If
the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The
increase in the provision resulting from the passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to
be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the
liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting
date are measured at the present value of expected future payments to be made in respect of services provided
by employees up to the reporting date using the projected unit credit method. Consideration is given to expected
future wage and salary levels, experience of employee departures and periods of service. Expected future payments
are discounted using market yields at the reporting date on national government bonds with terms to maturity and
currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange
for the rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently
determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise
price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the
underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with
non-vesting conditions that do not determine whether the Group receives the services that entitle the employees to
receive payment. No account is taken of any other vesting conditions.
35
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award,
the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The
amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less
amounts already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all
other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been
made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the
total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated
as a cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the
vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the
award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled
and new award is treated as if they were a modification.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes,
the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date; and assumes that the transaction will take place
either: in the principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the Company.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity
instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling
interest in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured
at either fair value or at the proportionate share of the acquiree’s identifiable net assets. All acquisition costs are
expensed as incurred to profit or loss.
36
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic conditions, the Group’s
operating or accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the Group remeasures its previously held equity interest in the
acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount
is recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within
equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling
interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing
investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is
less than the fair value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference
is recognised as a gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessment
of the identification and measurement of the net assets acquired, the non-controlling interest in the acquiree, if any,
the consideration transferred and the acquirer’s previously held equity interest in the acquirer.
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 the acquisition-date. The
measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer
receives all the information possible to determine fair value.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Big River Industries Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the
financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
Goods and Services Tax (‘GST’) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax
authority.
37
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2017. The
Group’s assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant
to the Group, are set out below.
AASB 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces
all previous versions of AASB 9 and completes the project to replace IAS 39 ‘Financial Instruments: Recognition and
Measurement’. AASB 9 introduces new classification and measurement models for financial assets.
A financial asset shall be measured at amortised cost, if it is held within a business model whose objective is to hold
assets in order to collect contractual cash flows, which arise on specified dates and solely principal and interest. All
other financial instrument assets are to be classified and measured at fair value through profit or loss unless the entity
makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not
held-for-trading) in other comprehensive income (‘OCI’). For financial liabilities at fair value, the standard requires the
portion of the change in fair value that relates to the entity’s own credit risk to be presented in OCI (unless it would
create an accounting mismatch). New simpler hedge accounting requirements are intended to more closely align
the accounting treatment with the risk management activities of the entity. New impairment requirements will use an
‘expected credit loss’ (‘ECL’) model to recognise an allowance. Impairment will be measured under a 12-month ECL
method unless the credit risk on a financial instrument has increased significantly since initial recognition in which
case the lifetime ECL method is adopted. The standard introduces additional new disclosures.
The Group will adopt this standard from 1 July 2018 but the impact of its adoption is not expected to have any material
impact on the amounts recognised in the Group’s financial statements.
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides a
single standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to
depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which
the entity expects to be entitled in exchange for those goods or services.
The standard will require: contracts (either written, verbal or implied) to be identified, together with the separate
performance obligations within the contract; determine the transaction price, adjusted for the time value of money
excluding credit risk; allocation of the transaction price to the separate performance obligations on a basis of relative
stand-alone selling price of each distinct good or service, or estimation approach if no distinct observable prices exist;
and recognition of revenue when each performance obligation is satisfied. Credit risk will be presented separately
as an expense rather than adjusted to revenue. For goods, the performance obligation would be satisfied when the
customer obtains control of the goods. For services, the performance obligation is satisfied when the service has been
provided, typically for promises to transfer services to customers. For performance obligations satisfied over time, an
entity would select an appropriate measure of progress to determine how much revenue should be recognised as
the performance obligation is satisfied. Contracts with customers will be presented in an entity’s statement of financial
position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity’s
performance and the customer’s payment. Sufficient quantitative and qualitative disclosure is required to enable
users to understand the contracts with customers; the significant judgements made in applying the guidance to those
contracts; and any assets recognised from the costs to obtain or fulfil a contract with a customer.
The Group will adopt this standard from 1 July 2018 but the impact of its adoption is not expected to have any material
impact on the amounts recognised in the Group’s financial statements.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces
AASB 117 ‘Leases’ and for lessees will eliminate the classifications of operating leases and finance leases. Subject
to exceptions, a ‘right-of-use’ asset will be capitalised in the statement of financial position, measured at the present
value of the unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term
leases of 12 months or less and leases of low-value assets (such as personal computers and small office furniture)
where an accounting policy choice exists whereby either a ‘right-of-use’ asset is recognised or lease payments
38
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
are expensed to profit or loss as incurred. A liability corresponding to the capitalised lease will also be recognised,
adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any future
restoration, removal or dismantling costs.
Straight-line operating lease expense recognition will be replaced with a depreciation charge for the leased asset
(included in operating costs) and an interest expense on the recognised lease liability (included in finance costs). In
the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared
to lease expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation)
results will be improved as the operating expense is replaced by interest expense and depreciation in profit or loss
under AASB 16. For classification within the statement of cash flows, the lease payments will be separated into both a
principal (financing activities) and interest (either operating or financing activities) component. For lessor accounting,
the standard does not substantially change how a lessor accounts for leases.
The Group will adopt this standard from 1 July 2019. Whilst the directors are yet to assess the impact of AASB 16, it is
noted that operating leases will be capitalised on the balance sheet by recognising a ‘right-of-use’ asset and a lease
liability for the present value of the obligation and the rental expense will be replaced with depreciation of the right-of-
use asset and interest on the lease liability.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts in the financial statements. Management continually evaluates its judgements
and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its
judgements, estimates and assumptions on historical experience and on other various factors, including expectations
of future events, management believes to be reasonable under the circumstances. The resulting accounting
judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the
respective notes) within the next financial year are discussed below.
Provision for impairment of receivables
The provision for impairment of receivables assessment requires a degree of estimation and judgement. The level
of provision is assessed by taking into account the recent sales experience, the ageing of receivables, historical
collection rates and specific knowledge of the individual debtor’s financial position.
Goodwill
The Group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether
goodwill has suffered any impairment, in accordance with the accounting policy stated in note 2. The recoverable
amounts of cash-generating units have been determined based on value-in-use calculations. These calculations
require the use of assumptions, including estimated discount rates based on the current cost of capital and growth
rates of the estimated future cash flows.
Impairment of non-financial assets other than goodwill
The Group assesses impairment of non-financial assets other than goodwill at each reporting date by evaluating
conditions specific to the Group and to the particular asset that may lead to impairment. If an impairment trigger exists,
the recoverable amount of the asset is determined. This involves fair value less costs of disposal or value-in-use
calculations, which incorporate a number of key estimates and assumptions.
Note 4. Operating segments
Identification of reportable operating segments
The Group is organised into one operating segment as the Group operated predominantly in Australia and in one
industry being the supply of building products. This assessment is based on the internal reports that are reviewed
and used by the Board of Directors (who are identified as the Chief Operating Decision Makers (‘CODM’)) in assessing
performance and in determining the allocation of resources. Accordingly, the information provided in this Annual
Report reflects the one operating segment.
39
Annual Report Big River Industries Limited ABN 72 609 901 377
Notes to the financial statements 30 June 2017
Note 5. Revenue
From continuing operations
Sales revenue
Sale of goods
Other revenue
Other revenue
Revenue from continuing operations
Note 6. Other income
Consolidated
Year to 30 Jun 2017 $
Period from 18 Dec
2015 to 30 Jun 2016 $
176,891,981
71,377,787
197,200
177,089,181
44,860
71,422,647
Consolidated
Year to 30 Jun 2017 $
Period from 18 Dec
2015 to 30 Jun 2016 $
Net gain on disposal of property, plant and equipment
57,451
-
40
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Note 7. Expenses
Profit/(loss) before income tax from continuing operations
includes the following specific expenses:
Consolidated
Year to 30 Jun 2017 $
Period from 18 Dec
2015 to 30 Jun 2016 $
Cost of sales
Cost of sales
Depreciation
Buildings
Plant and equipment
Total depreciation
Amortisation
Customer relationships
Total depreciation and amortisation
Finance costs
121,574,190
50,124,051
179,044
1,614,086
1,793,130
176,000
1,969,130
84,004
602,524
686,528
-
686,528
Interest and finance charges paid/payable
923,545
384,286
Rental expense relating to operating leases
Minimum lease payments
Superannuation expense
2,083,376
1,434,965
Defined contribution superannuation expense
1,576,758
628,370
Write off of assets
Inventories (included in cost of sales)
-
824,116
Expenses associated with business combinations
Transaction costs
192,439
3,909,045
41
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Note 8. Income tax
Income tax expense/(benefit)
Current tax
Deferred tax - origination and reversal of temporary differences
Adjustment recognised for prior periods
Aggregate income tax expense/(benefit)
Income tax expense/(benefit) is attributable to:
Profit/(loss) from continuing operations
Loss from discontinued operations
Aggregate income tax expense/(benefit)
Deferred tax included in income tax expense/(benefit) comprises:
Increase in deferred tax assets
Decrease in deferred tax liabilities
Consolidated
Year to 30 Jun
2017 $
Period from 18
Dec 2015 to 30
Jun 2016 $
2,256,754
139,132
(784,679)
(148,054)
(428,195)
-
1,324,021
(289,063)
1,324,021
(19,478)
-
(269,585)
1,324,021
(289,063)
(731,879)
(52,800)
(428,195)
-
Deferred tax - origination and reversal of temporary differences
(784,679)
(428,195)
Numerical reconciliation of income tax expense/(benefit) and tax at the
statutory rate
Profit/(loss) before income tax (expense)/benefit from continuing operations
5,251,702
(1,339,815)
Loss before income tax benefit from discontinued operations
-
(898,616)
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable
income:
Sale expenses
Non-allowable items
Research and development
Sundry items
Overprovision from prior period
Income tax expense/(benefit)
42
5,251,702
(2,238,431)
1,575,511
(671,529)
-
378,681
7,602
(90,482)
30,946
-
-
3,785
1,523,577
(289,063)
(199,556)
-
1,324,021
(289,063)
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Amounts credited directly to equity
Deferred tax assets
Deferred tax asset
Deferred tax asset
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Impairment of receivables
Property, plant and equipment
Employee benefits
IPO capitalised expenses
Lease provisions
Other provisions and accruals
Deferred tax asset
Movements:
Opening balance
Credited to profit or loss
Credited to equity
Additions through business combinations (note 31)
Consolidated
Year to 30 Jun
2017 $
Period from 18
Dec 2015 to 30
Jun 2016 $
(184,341)
-
Consolidated
30 Jun 2017 $
30 Jun 2016 $
349,901
66,941
939,562
583,166
148,799
245,092
182,618
63,109
837,763
-
194,612
108,193
2,333,461
1,386,295
1,386,295
731,879
184,341
30,946
-
428,195
-
958,100
Closing balance
2,333,461
1,386,295
43
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Deferred tax liability
Deferred tax liability
Deferred tax liability comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Customer relationships
Deferred tax liability
Amount expected to be settled within 12 months
Amount expected to be settled after more than 12 months
Movements:
Credited to profit or loss
Additions through business combinations (note 31)
Closing balance
Provision for income tax
Provision for income tax
Provision for income tax
Consolidated
30 Jun 2017 $
30 Jun 2016 $
422,400
422,400
158,400
264,000
422,400
(52,800)
475,200
422,400
-
-
-
-
-
-
-
-
Consolidated
30 Jun 2017 $
30 Jun 2016 $
1,186,213
429,214
44
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Note 9. Discontinued operations
Description
2016
In April 2016, Big River Group Pty Ltd closed the truss plant operation of its Townsville branch and recorded an
onerous lease provision for the remaining rental relating to the discontinued operations totalling $648,706.
Financial performance information
Sale of goods
Raw materials and consumables used
Employee benefits expense
Depreciation and amortisation
Onerous lease provision
Other expenses
Total expenses
Loss before income tax benefit
Income tax benefit
Loss after income tax benefit from discontinued operations
Note 10. Current assets - cash and cash equivalents
Cash on hand
Cash at bank
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of
the financial year as shown in the statement of cash flows as follows:
Balances as above
Bank overdraft (note 17)
Balance as per statement of cash flows
Consolidated
Year to 30 Jun
2017 $
Period from 18
Dec 2015 to 30
Jun 2016 $
-
-
-
-
-
-
-
-
-
-
158,743
(137,550)
(80,645)
(82,080)
(648,706)
(108,378)
(1,057,359)
(898,616)
269,585
(629,031)
Consolidated
30 Jun 2017 $
30 Jun 2016 $
11,226
3,540,482
3,551,708
8,505
-
8,505
3,551,708
8,505
-
(1,570,789)
3,551,708
(1,562,284)
45
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Note 11. Current assets - trade and other receivables
Trade receivables
Less: Provision for impairment of receivables
Other receivables
Impairment of receivables
The ageing of the impaired receivables provided for above are as follows:
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Movements in the provision for impairment of receivables are as follows:
Opening balance
Additional provisions recognised
Additions through business combinations
Receivables written off during the year as uncollectable
Closing balance
Consolidated
30 Jun 2017 $
30 Jun 2016 $
36,077,732
31,341,985
(1,166,338)
(608,728)
34,911,394
30,733,257
1,934,052
1,306,486
36,845,446
32,039,743
Consolidated
30 Jun 2017 $
30 Jun 2016 $
277,225
368,748
109,321
137,169
520,365
362,238
1,166,338
608,728
Consolidated
30 Jun 2017 $
30 Jun 2016 $
608,728
732,132
-
410,794
-
943,602
(174,522)
(745,668)
1,166,338
608,728
46
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Past due but not impaired
Customers with balances past due but without provision for impairment of receivables amount to $15,092,726 as at 30
June 2017 ($15,136,348 as at 30 June 2016).
The Group did not consider a credit risk on the aggregate balances after reviewing the credit terms of customers
based on recent collection practices.
The ageing of the past due but not impaired receivables are as follows:
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Note 12. Current assets - inventories
Raw materials and work in progress - at cost
Finished goods - at cost
Note 13. Current assets - other
Prepayments
Deferred expenses
Other deposits
Consolidated
30 Jun 2017 $
30 Jun 2016 $
12,012,160
12,840,470
1,323,958
1,756,608
904,085
1,391,793
15,092,726
15,136,348
Consolidated
30 Jun 2017 $
30 Jun 2016 $
2,744,897
2,471,532
21,696,862
16,304,312
24,441,759
18,775,844
Consolidated
30 Jun 2017 $
30 Jun 2016 $
518,115
666,933
250,965
136,144
171,736
3,750
905,224
842,419
47
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Note 14. Non-current assets - property, plant and equipment
Freehold land - at cost
Buildings - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Consolidated
30 Jun 2017 $
30 Jun 2016 $
855,701
855,701
5,832,741
5,631,703
(263,047)
(84,004)
5,569,694
5,547,699
19,458,023
19,141,711
(1,320,091)
(684,604)
18,137,932
18,457,107
24,563,327
24,860,507
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Consolidated
Balance at 18 December 2015
Additions
Freehold
land $
Buildings $
Plant and
equipment $
-
-
Total $
-
26,145
722,129
748,274
-
-
Additions through business combinations (note 31)
855,701
5,605,558
18,419,582
24,880,841
Depreciation expense
Balance at 30 June 2016
Additions
Additions through business combinations (note 31)
Disposals
Depreciation expense
Balance at 30 June 2017
-
(84,004)
(684,604)
(768,608)
855,701
5,547,699
18,457,107
24,860,507
-
-
-
-
201,039
1,138,679
1,339,718
-
-
231,508
231,508
(75,276)
(75,276)
(179,044)
(1,614,086)
(1,793,130)
855,701
5,569,694
18,137,932
24,563,327
Property, plant and equipment secured under finance leases
Refer to note 28 for further information on property, plant and equipment secured under finance leases.
48
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Note 15. Non-current assets - intangibles
Goodwill - at cost
Customer relationships - at cost
Less: Accumulated amortisation
Consolidated
30 Jun 2017 $
30 Jun 2016 $
6,012,632
942,699
1,584,000
(176,000)
1,408,000
-
-
-
7,420,632
942,699
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Consolidated
Balance at 18 December 2015
Additions through business combinations (note 31)
Balance at 30 June 2016
Goodwill $
Customer
relationships $
-
942,699
942,699
-
-
-
Total $
-
942,699
942,699
Additions through business combinations (note 31)
5,069,933
1,584,000
6,653,933
Amortisation expense
Balance at 30 June 2017
-
(176,000)
(176,000)
6,012,632
1,408,000
7,420,632
Impairment testing
Goodwill is allocated to the Group’s one operating segment (refer Note 4).
The recoverable amount is determined based on value-in-use calculations. These calculations use cash flow
projections based on financial budgets approved by management covering a five-year period.
Key assumptions used for value-in-use calculations:
Consolidated
Growth rate
Discount rate
2017 %
3.0%
11.0%
2016 %
3.0%
11.5%
The weighted average growth rates used are consistent with forecasts included in industry reports. In addition,
management have used gross margins based on past performance and its expectations for the future. Management
has considered possible changes in the key assumptions used in the value-in-use calculations and has not identified
any reasonably possible change that would cause a material impact in the carrying amount of the Group’s cash
generating unit.
49
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Note 16. Current liabilities - trade and other payables
Trade payables
Goods and services tax payable
Other payables and accrued expenses
Refer to note 24 for further information on financial instruments.
Note 17. Current liabilities - borrowings
Bank overdraft
Bank bills
Lease liability
Consolidated
30 Jun 2017 $
30 Jun 2016 $
27,133,222
20,846,561
584,786
307,017
3,208,334
2,650,293
30,926,342
23,803,871
Consolidated
30 Jun 2017 $
30 Jun 2016 $
-
1,570,789
500,000
500,000
830,804
2,480,353
1,330,804
4,551,142
Refer to note 19 for further information on assets pledged as security and financing arrangements.
Refer to note 24 for further information on financial instruments.
Note 18. Current liabilities - provisions
Annual leave
Long service leave
Onerous lease
Consolidated
30 Jun 2017 $
30 Jun 2016 $
1,233,933
995,647
1,442,976
1,333,064
256,688
235,225
2,933,597
2,563,936
Onerous lease
The provision represents the present value of the estimated costs, net of any sub-lease revenue, that will be incurred
until the end of the lease terms where the obligation is expected to exceed the economic benefit to be received.
50
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Movements in provisions
Movements in each class of provision during the current financial year, other than employee benefits, are set out
below:
Consolidated - 30 Jun 2017
Carrying amount at the start of the year
Amounts transferred from non-current
Amounts used
Carrying amount at the end of the year
Note 19. Non-current liabilities - borrowings
Bank bills
Lease liability
Refer to note 24 for further information on financial instruments.
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Bank overdraft
Bank bills
Lease liability
Onerous lease $
235,225
174,173
(152,710)
256,688
Consolidated
30 Jun 2017 $
30 Jun 2016 $
4,520,000
11,500,000
1,719,245
488,183
6,239,245
11,988,183
Consolidated
30 Jun 2017 $
30 Jun 2016 $
-
1,570,789
5,020,000
12,000,000
2,550,049
2,968,536
7,570,049
16,539,325
Assets pledged as security
The bank overdraft and loans are secured by first mortgages over the Group’s assets.
The lease liabilities are effectively secured as the rights to the leased assets, recognised in the statement of financial
position, revert to the lessor in the event of default.
51
Annual Report Big River Industries Limited ABN 72 609 901 377
Notes to the financial statements 30 June 2017
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Total facilities
Bank overdraft and trade finance
Bank bills
Asset finance
Used at the reporting date
Bank overdraft and trade finance
Bank bills
Asset finance
Unused at the reporting date
Bank overdraft and trade finance
Bank bills
Asset finance
Note 20. Non-current liabilities - provisions
Long service leave
Onerous lease
Consolidated
30 Jun 2017 $
30 Jun 2016 $
6,200,000
6,200,000
23,000,000
23,000,000
4,000,000
4,000,000
33,200,000
33,200,000
-
1,570,789
5,020,000
12,000,000
2,550,049
2,968,536
7,570,049
16,539,325
6,200,000
4,629,211
17,980,000
11,000,000
1,449,951
1,031,464
25,629,951
16,660,675
Consolidated
30 Jun 2017 $
30 Jun 2016 $
259,049
239,308
255,837
413,481
498,357
669,318
Onerous lease
The provision represents the present value of the estimated costs, net of any sub-lease revenue, that will be incurred
until the end of the lease terms where the obligation is expected to exceed the economic benefit to be received.
Movements in provisions
Movements in each class of provision during the current financial year, other than employee benefits, are set out
below:
Consolidated - 30 Jun 2017
Carrying amount at the start of the year
Amounts transferred to current
Carrying amount at the end of the year
52
Onerous lease $
413,481
(174,173)
239,308
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Note 21. Equity - issued capital
Consolidated
30 Jun 2017
Shares
30 Jun 2016
Shares
30 Jun 2017
$
30 Jun 2016
$
Ordinary shares - fully paid
52,592,007
1,370,001
58,629,873
1,370,001
A class preference shares - fully paid
-
37,090,000
-
37,090,000
52,592,007
38,460,001
58,629,873
38,460,001
Movements in ordinary share capital
Details
Date
Shares
Issue price
Issue of shares on incorporation
18 December 2015
1
$1.00
$
1
Issue of preference shares
19 February 2016
1,370,000
$1.00
1,370,000
Balance
Issue of shares
30 June 2016
1,370,001
1,370,001
13 February 2017
45,455
$1.10
50,000
Conversion of shares on Initial Public Offering
24 April 2017
37,135,455
37,140,000
Issue of shares for Adelaide Timber and Building
Supplies
24 April 2017
2,397,260
$1.46
3,500,000
Share capital raised
24 April 2017
11,643,836
$1.46
17,000,001
Transaction costs arising on share issue, net of tax
-
Balance
30 June 2017 52,592,007
(430,129)
58,629,873
Movements in A class preference shares
Details
Balance
Date
Shares
Issue price
18 December 2015
-
$
-
Issue of preference shares
19 February 2016
37,090,000
$1.00
37,090,000
Balance
Issue of shares
Conversion of shares on Initial
Public Offering
30 June 2016
37,090,000
37,090,000
13 February 2017
45,455
$1.10
50,000
24 April 2017
(37,135,455)
(37,140,000)
Balance
30 June 2017
-
-
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value
and the Company does not have a limited amount of authorised capital.
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.
A class preference shares
The holders of the A class preference shares are entitled to receive notices, reports and accounts of the Company on
the same basis as ordinary shares and have a right to one vote per share. The preference shares are not redeemable,
but were converted to ordinary share capital on a one-for-one basis on 24 April 2017, prior to the initial public offering,
at the discretion of the shareholders.
53
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Capital risk management
The Group’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to
reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is
calculated as total borrowings less cash and cash equivalents.
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 Group would look to raise capital when an opportunity to invest in a business or company was seen as value
adding relative to the current Company’s share price at the time of the investment. The Group is not actively pursuing
additional investments in the short term as it continues to integrate and grow its existing businesses in order to
maximise synergies.
The Group is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk
management decisions. There have been no events of default on the financing arrangements during the financial year.
Note 22. Equity - accumulated losses
Consolidated
30 Jun 2017 $
30 Jun 2016 $
Accumulated losses at the beginning of the financial year
(3,609,653)
-
Profit/(loss) after income tax (expense)/benefit for the year
3,927,681
(1,949,368)
Dividends paid (note 23)
Accumulated losses at the end of the financial year
(2,423,302)
(1,660,285)
(2,105,274)
(3,609,653)
Note 23. Equity - dividends
Dividends
Dividends paid during the financial year were as follows:
Consolidated
Year to 30 Jun 2017 $
Period from 18 Dec
2015 to 30 Jun 2016
Preference dividend for the period ended 30 June 2016
-
1,660,285
A class preference dividend for the period ended 30 June 2017,
paid prior to the Group listing
2,423,302
-
2,423,302
1,660,285
Since the end of the financial year the directors have declared a fully franked final dividend of 3.5 cents per fully paid
ordinary share to be paid on 29 September 2017.
54
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Franking credits
Consolidated
30 Jun 2017 $
30 Jun 2016 $
Franking credits available at the reporting date based on a tax rate of 30%
18,286,966
17,973,823
Franking credits that will arise from the payment of the amount of the provision
for income tax at the reporting date based on a tax rate of 30%
1,186,213
429,214
Franking credits available for subsequent financial years based on a tax
rate of 30%
19,473,179
18,403,037
Note 24. Financial instruments
Financial risk management objectives
The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk
and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of
the Group. The Group uses derivative financial instruments such as forward foreign exchange contracts to hedge
certain risk exposures which are not significant. Derivatives are exclusively used for hedging purposes, i.e. not as
trading or other speculative instruments. The Group uses different methods to measure different types of risk to which
it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price
risks, ageing analysis for credit risk and beta analysis in respect of investment portfolios to determine market risk.
Risk management is carried out by senior finance executives (‘finance’) under policies approved by the Board of
Directors (‘the Board’). These policies include identification and analysis of the risk exposure of the Group and
appropriate procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the
Group’s operating units. Finance reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The Group is not exposed to any significant foreign currency risk.
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group’s main interest rate risk arises from long-term borrowings. Borrowings obtained at variable rates expose
the Group to interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk. The
policy is to regularly monitor interest rates and utilise fixed rates for a portion of long-term borrowings when deemed
appropriate by the Board.
As at the reporting date, the Group had the following variable rate borrowings outstanding:
Consolidated
Bank overdraft
Bank bills
Net exposure to cash flow interest
rate risk
30 Jun 2017
30 Jun 2016
Weighted average
interest rate %
Balance $
Weighted average
interest rate %
Balance $
-
-
6.25%
1,570,789
4.67%
5,020,000
5.05%
12,000,000
5,020,000
13,570,789
55
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
An analysis by remaining contractual maturities in shown in ‘liquidity and interest rate risk management’ below.
For the Group the bank bills outstanding, totalling $5,020,000 (2016: $12,000,000), are principal and interest payment
loans. Monthly cash outlays of approximately $19,536 (2016: $50,500) per month are required to service the interest
payments. An official increase/decrease in interest rates of 100 (2016: 100) basis points would have an adverse/
favourable effect on profit before tax of the following:
Basis points increase
Basis points decrease
Consolidated -
30 Jun 2017
Basis points
change
Effect on profit
before tax
Effect on
equity
Basis points
change
Effect on profit
before tax
Effect on
equity
Bank bills
(100)
(50,200)
(35,140)
100
50,200
35,140
Basis points increase
Basis points decrease
Consolidated -
30 Jun 2016
Basis points
change
Effect on profit
before tax
Effect on
equity
Basis points
change
Effect on profit
before tax
Effect on
equity
Bank overdraft
Bank bills
(100)
(100)
(15,707)
(10,995)
(120,000)
(84,000)
(135,707)
(94,995)
100
100
15,707
10,995
120,000
84,000
135,707
94,995
The percentage change is based on the expected volatility of interest rates using market data and analysts forecasts.
In addition, minimum principal repayments of $500,000 (2016: $500,000) are due during the year ending 30 June
2018 (2016: 30 June 2017).
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to
the Group. The Group has a strict code of credit, including obtaining agency credit information, confirming references
and setting appropriate credit limits. The Group obtains guarantees where appropriate to mitigate credit risk. The
maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of any
provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial
statements. The Group does not hold any collateral.
The Group has no significant credit risk to any individual customer.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash
equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by
continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and
liabilities.
56
Annual Report Big River Industries Limited ABN 72 609 901 377
Notes to the financial statements 30 June 2017
Financing arrangements
Unused borrowing facilities at the reporting date:
Bank overdraft and trade finance
Bank bills
Asset finance
Consolidated
30 Jun 2017 $
30 Jun 2016 $
6,200,000
4,629,211
17,980,000
11,000,000
1,449,951
1,031,464
25,629,951
16,660,675
The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice.
Remaining contractual maturities
The following tables detail the Group’s remaining contractual maturity for its financial instrument liabilities. The tables
have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as
remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of
financial position.
Weighted
average
interest rate %
1 year or
less $
Between 1 and
2 years $
Between 2
and 5 years $
Over 5
years $
Remaining
contractual
maturities $
Consolidated -
30 Jun 2017
Non-derivatives
Non-interest
bearing
Trade payables
Other payables
Interest-bearing
- variable
-
-
27,133,322
1,762,072
-
-
Bank bills
4.67%
500,000
4,731,084
Interest-bearing
- fixed rate
Lease liability
5.02%
941,808
1,813,697
Total non-
derivatives
30,337,202
6,544,781
-
-
-
-
-
-
-
-
-
-
27,133,322
1,762,072
5,231,084
2,755,505
36,881,983
57
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Weighted
average
interest rate %
1 year or
less $
Between 1 and
2 years $
Between 2
and 5 years $
Over 5
years $
Remaining
contractual
maturities $
Consolidated -
30 Jun 2016
Non-derivatives
Non-interest
bearing
Trade payables
Other payables
Interest-bearing
- variable
- 20,846,561
-
1,568,094
-
-
-
Bank overdraft
6.25%
1,570,789
Bank bills
5.05%
500,000
12,080,750
Interest-bearing
- fixed rate
Lease liability
6.78%
2,603,217
538,574
Total non-
derivatives
27,088,661
12,619,324
-
-
-
-
-
-
-
-
-
-
-
-
20,846,561
1,568,094
1,570,789
12,580,750
3,141,791
39,707,985
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above.
Note 25. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the Group is
set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Consolidated
Year to 30 Jun 2017 $
Period from 18 Dec
2015 to 30 Jun 2016
998,652
85,140
22,592
940,361
79,771
41,789
1,106,384
1,061,921
58
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Note 26. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Deloitte Touche Tohmatsu,
the auditor of the Company:
Consolidated
Year to 30 Jun 2017 $ Period from 18 Dec 2015 to 30 Jun 2016
Audit services - Deloitte Touche Tohmatsu
Audit or review of the financial statements
183,253
Other services - Deloitte Touche Tohmatsu
Due diligence
Taxation
392,294
40,585
432,879
616,132
100,000
127,625
19,409
147,034
247,034
Note 27. Contingent liabilities
The Group has given bank guarantees as at 30 June 2017 of $629,262 (2016: $629,262) to various landlords.
59
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Note 28. Commitments
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
More than five years
Lease commitments - finance
Committed at the reporting date and recognised as liabilities, payable:
Within one year
One to five years
Total commitment
Less: Future finance charges
Net commitment recognised as liabilities
Representing:
Lease liability - current (note 17)
Lease liability - non-current (note 19)
Consolidated
30 Jun 2017 $
30 Jun 2016 $
2,230,739
1,979,822
4,300,494
3,623,451
383,333
783,333
6,914,566
6,386,606
941,808
2,603,217
1,813,697
2,755,505
538,574
3,141,791
(205,456)
(173,255)
2,550,049
2,968,536
830,804
2,480,353
1,719,245
488,183
2,550,049
2,968,536
Operating lease commitments includes contracted amounts for various distribution outlets under non-cancellable
operating leases expiring within 1 to 10 years with, in some cases, options to extend. The leases have various
escalation clauses. On renewal, the terms of the leases are renegotiated.
Finance lease commitments includes contracted amounts for various plant and equipment under finance leases
expiring within 5 years. Under the terms of the leases, the Group has the option to acquire the leased assets for
predetermined residual values on the expiry of the leases.
Note 29. Related party transactions
Parent entity
Big River Industries Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 32.
Key management personnel
Disclosures relating to key management personnel are set out in note 25 and the remuneration report included in the
directors’ report.
60
Annual Report Big River Industries Limited ABN 72 609 901 377
Notes to the financial statements 30 June 2017
Transactions with related parties
During the year the Company paid a management fee to Anacacia Capital Pty Ltd of $480,000 (2016: $120,000) for
providing ongoing services and assistance. There are no further amounts payable under this arrangement.
Anacacia Capital Pty Ltd was paid a fee of $960,000 (2016: $nil) for the provision of support services to Big River
Industries Limited to assist the Company with its Initial Public Offering and listing on the ASX.
M Jackman, a director, was paid a fee of $25,000 for management consultancy services provided in conjunction with
the acquisition of Adelaide Timber and Building Supplies.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 30. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit/(loss) after income tax
Parent
Year to 30 Jun 2017 $
Period from 18 Dec
2015 to 30 Jun 2016
1,090,021
(414,865)
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income
1,090,021
(414,865)
61
Annual Report Big River Industries Limited ABN 72 609 901 377
Notes to the financial statements 30 June 2017
Statement of financial position
Total current assets
Total non-current assets
Total assets
Total current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Accumulated losses
Total equity
Parent
Year to 30 Jun 2017 $ Year to 30 Jun 2016 $
19,274,252
41,558,332
8,000,827
40,975,166
60,832,584
48,975,993
500,000
4,520,000
5,020,000
500,000
11,500,000
12,000,000
55,812,584
36,975,993
58,629,873
(2,817,289)
38,460,001
(1,484,008)
55,812,584
36,975,993
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity is a party to a deed of cross guarantee (refer Note 33) under which it guarantees the debts of its
subsidiaries as at 30 June 2017 and 30 June 2016.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2017 and 30 June 2016.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2017 and 30 June 2016.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for
the following:
⊲
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Note 31. Business combinations
2016
Big River Group Pty Limited
On 31 January 2016, the Group acquired 100% of the ordinary shares of Big River Group Pty Limited for the total
consideration transferred of $40,975,166 after non-controlling interest consideration of $3,625,066. The values
identified in relation to the acquisition of Big River Group Pty Limited are final as at 30 June 2017.
62
Annual Report Big River Industries Limited ABN 72 609 901 377
Notes to the financial statements 30 June 2017
Details of the acquisition are as follows:
Cash and cash equivalents
Trade receivables
Inventories
Other assets
Property, plant and equipment
Deferred tax asset
Trade payables
Provision for income tax
Provisions
Bank overdraft
Lease liability
Net assets acquired
Goodwill
Non-controlling interest (preference shares)
Acquisition-date fair value of the total consideration transferred
Representing:
Cash paid or payable to vendor
Acquisition costs expensed to profit or loss
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Add: bank overdraft
Less: cash and cash equivalents
Net cash used
2017
Fair value $
8,504
27,359,048
20,637,425
932,004
24,880,841
958,100
(17,887,898)
(703,928)
(2,007,503)
(7,925,830)
(2,593,230)
43,657,533
942,699
(3,625,066)
40,975,166
40,975,166
3,909,045
40,975,166
7,925,830
(8,504)
48,892,492
Adelaide Timber and Building Supplies
On 1 March 2017, the subsidiary Big River Group Pty Limited, executed a business purchase deed to acquire the
business assets of Adelaide Timber and Building Supplies, a business located in Adelaide, South Australia. The
purchase price was $7,534,192 which includes inventory and plant and equipment and was settled through the
payment of $3,834,192 in cash and the issue of ordinary shares to a value of $3,500,000. An amount of $200,000 is
payable upon achieving an agreed EBITDA target.
63
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Sabdia Mitre 10
On 8 March 2017, the subsidiary Big River Group Pty Limited, executed a business purchase deed to acquire the
business assets of Sabdia Mitre 10, a business located in Brisbane, Queensland. The purchase price was $1,250,000
which includes inventory and plant and equipment and is settled through the payment of $1,250,000 in cash.
The values identified in relation to the acquisitions are final as at 30 June 2017.
Details of the acquisitions are as follows:
Consolidated - 30 Jun 2016
Adelaide Timber and
Building Supplies Fair
value $
Sabdia Mitre 10 Fair
value $
Total Fair value $
Inventories
Prepayments
Plant and equipment
Customer relationships
Deferred tax asset
Trade payables
Deferred tax liability
Employee benefits
Accrued expenses
Net assets acquired
Goodwill
1,787,143
161,447
121,267
1,584,000
30,946
(587,142)
(475,200)
(103,154)
(55,048)
2,464,259
5,069,933
1,139,759
2,926,902
-
110,241
-
-
-
-
-
-
1,250,000
-
161,447
231,508
1,584,000
30,946
(587,142)
(475,200)
(103,154)
(55,048)
3,714,259
5,069,933
Acquisition-date fair value of the total
consideration transferred
Representing:
7,534,192
1,250,000
8,784,192
Cash paid or payable to vendor
3,834,192
1,250,000
5,084,192
Big River Industries Limited shares issued
to vendor
Contingent consideration
Acquisition costs expensed to profit or loss
Cash used to acquire business, net of cash
acquired:
Acquisition-date fair value of the total
consideration transferred
Less: contingent consideration
Less: shares issued by Company as part of
consideration
3,500,000
200,000
7,534,192
150,279
-
-
1,250,000
42,160
3,500,000
200,000
8,784,192
192,439
7,534,192
1,250,000
8,784,192
(200,000)
(3,500,000)
-
-
(200,000)
(3,500,000)
Net cash used
3,834,192
1,250,000
5,084,192
64
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Note 32. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2:
Name
Big River Group Holdings Pty Limited
Big River Group Pty Limited
Principal place of business/
Country of incorporation
30 Jun 2017 %
30 Jun 2016 %
Ownership interest
Australia
Australia
100.00%
100.00%
100.00%
100.00%
Note 33. 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:
Big River Industries Limited
Big River Group Holdings Pty Ltd
Big River Group Pty Ltd
By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare financial
statements and directors’ report under Corporations Instrument 2016/785 issued by the Australian Securities and
Investments Commission.
The above companies represent a ‘Closed Group’ for the purposes of the Corporations Instrument, and as there are
no other parties to the deed of cross guarantee that are controlled by Big River Industries Limited, they also represent
the ‘Extended Closed Group’.
The statement of profit or loss and other comprehensive income and statement of financial position are substantially
the same as the Group and therefore have not been separately disclosed.
65
Annual Report Big River Industries Limited ABN 72 609 901 377
Notes to the financial statements 30 June 2017
Note 34. Reconciliation of profit/(loss) after income tax to net cash from
operating activities
Profit/(loss) after income tax (expense)/benefit for the year
3,927,681
(1,949,368)
Consolidated
Year to 30 Jun 2017 $
Period from 18 Dec
2015 to 30 Jun 2016
Adjustments for:
Depreciation and amortisation
Net gain on disposal of property, plant and equipment
Change in operating assets and liabilities:
Increase in trade and other receivables
Decrease/(increase) in inventories
Increase in deferred tax assets
Decrease in other operating assets
Increase in trade and other payables
Increase/(decrease) in provision for income tax
Decrease in deferred tax liabilities
Increase in other provisions
Increase in other operating liabilities
Net cash from operating activities
Note 35. Earnings per share
Earnings per share for profit/(loss) from continuing operations
1,969,130
(57,451)
(4,805,703)
(2,739,013)
(731,878)
98,642
6,080,281
756,998
(52,800)
95,546
200,000
768,608
-
(4,680,695)
1,861,581
(428,195)
89,585
5,915,973
(274,714)
-
1,225,751
-
4,741,433
2,528,526
Consolidated
Year to 30 Jun 2017 $
Period from 18 Dec
2015 to 30 Jun 2016
3,927,681
(1,320,337)
(2,423,302)
(1,660,285)
1,504,379
(2,980,622)
Cents
13.77
13.77
Cents
(217.56)
(217.56)
Profit/(loss) after income tax attributable to the owners of Big
River Industries Limited
Preference dividends
Profit/(loss) after income tax attributable to the owners of Big
River Industries Limited used in calculating earnings per share
Basic earnings per share
Diluted earnings per share
66
Annual Report Big River Industries Limited ABN 72 609 901 377
Notes to the financial statements 30 June 2017
Earnings per share for loss from discontinued operations
Loss after income tax attributable to the owners of Big River
Industries Limited
Basic earnings per share
Diluted earnings per share
Earnings per share for profit/(loss)
Profit/(loss) after income tax attributable to the owners of Big
River Industries Limited
Preference dividends
Profit/(loss) after income tax attributable to the owners of Big
River Industries Limited used in calculating earnings per share
Basic earnings per share
Diluted earnings per share
Weighted average number of ordinary shares
Weighted average number of ordinary shares used in
calculating basic earnings per share
Weighted average number of ordinary shares used in
calculating diluted earnings per share
Consolidated
Year to 30 Jun 2017 $
Period from 18 Dec
2015 to 30 Jun 2016
-
(629,031)
Cents
-
-
Cents
(45.91)
(45.91)
Consolidated
Year to 30 Jun 2017 $
Period from 18 Dec
2015 to 30 Jun 2016
3,927,681
(1,949,368)
(2,423,302)
(1,660,285)
1,504,379
(3,609,653)
Cents
13.77
13.77
Cents
(263.48)
(263.48)
Number
10,921,448
Number
1,370,001
10,921,448
1,370,001
Options over ordinary shares were excluded in the calculations as they are not dilutive.
67
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Adjusted earnings per share
The Company’s preference shares were converted on the Initial Public Offer into ordinary shares on a 1 for 1 basis. To
provide a more meaningful comparison, the Company has also presented Adjusted EPS which shows the impact as
though the preference shares were ordinary shares from the date they were issued.
Adjusted earnings per share for profit/(loss)
Profit/(loss) after income tax attributable to the owners of Big
River Industries Limited used in calculating adjusted earnings
per share
Basic earnings per share
Diluted earnings per share
Consolidated
Year to 30 Jun 2017 $
Period from 18 Dec
2015 to 30 Jun 2016
3,927,681
(1,949,368)
Cents
9.55
9.55
Cents
(5.07)
(5.07)
Weighted average number of ordinary shares
Weighted average number of ordinary shares
Weighted average number of preference shares
Weighted average number of shares used in calculating
adjusted earnings per share
Number
10,921,448
30,188,800
Number
1,370,001
37,090,000
40,110,248
38,460,001
Options over ordinary shares were excluded in the calculations as they are not dilutive.
Note 36. Share-based payments
Unlisted options
The Company has granted Options to senior managers of the Company, through persons or entities nominated by
them. The Options will not be listed.
The Options are governed by the terms of option deeds (as amended pursuant to deeds of amendment to comply
with the ASX Listing Rules) that are on the same or substantially similar terms. The terms of issue of the Options are
summarised below.
Exercise
Under the option deeds, the Options may be exercised for the exercise price specified on grant of the Option (as set
out in the table below). The Options may only be exercised before the expiry date (as set out in the table below). The
Options may be exercised by delivering a signed exercise notice and an amount equal to the exercise price multiplied
by the number of Options being exercised to the address of the Company’s solicitors. On exercise, the holder will be
issued one ordinary share for each Option exercised.
68
Annual Report Big River Industries Limited ABN 72 609 901 377 Notes to the financial statements 30 June 2017
Lapse
The Options lapse automatically:
⊲
⊲
⊲
⊲
if the senior management executive who nominated the optionholder ceases to be employed by the
Company; or
at the end of the designated exercise period for the Options, unless extended in accordance with the option
deeds; or
if the optionholder ceases to be a holder of ordinary shares in the Company; or
in the event that a drag along notice or a tag along notice is issued, each Option will terminate and lapse with
immediate effect upon issue of the drag along notice or the tag along notice and the Company must upon
completion of the transaction contemplated, pay an amount to the optionholder equal to the price per share
specified in the drag along notice less the exercise price multiplied by the number of Options.
Transfer/Dealing
The optionholder cannot dispose, encumber or otherwise deal with its Options without the prior written approval of
the Board.
Set out below are summaries of options granted under the plan:
Grant date
Expiry date
30 Jun 2017
Exercise
price
Balance at
the start of
the year
Granted
Exercised
19/02/2016
19/02/2021
$2.00
1,370,000
-
13/02/2017
13/02/2022
$2.20
-
45,455
1,370,000
45,455
30 Jun 2016
-
-
-
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
1,370,000
45,455
1,415,455
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
19/02/2016
19/02/2021
$2.00
-
-
1,370,000
1,370,000
-
-
-
-
1,370,000
1,370,000
The weighted average share price during the financial year was $1.649.
The weighted average remaining contractual life of options outstanding at the end of the financial year was 3.64 years
(2016: 4.62 years).
Note 37. Events after the reporting period
On 29 August 2017, the directors have declared a fully franked final dividend of 3.5 cents per fully paid ordinary share
to be paid on 29 September 2017.
No other matter or circumstance has arisen since 30 June 2017 that has significantly affected, or may significantly
affect the Group’s operations, the results of those operations, or the Group’s state of affairs in future financial years.
69
Annual Report Big River Industries Limited ABN 72 609 901 377 70
Annual Report Big River Industries Limited ABN 72 609 901 377
Directors’
Declaration
Annual Report Big River Industries Limited ABN 72 609 901 377
71
71
Annual Report Big River Industries Limited ABN 72 609 901 377Fibre cement cladding supplied to Aged Care village - Illawarra Directors’ Declaration
In the directors’ opinion:
⊲
⊲
⊲
⊲
⊲
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards,
the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued
by the International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group’s financial position as at 30
June 2017 and of its performance for the financial year ended on that date;
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable; and
at the date of this declaration, there are reasonable grounds to believe that the members of the Extended
Closed Group will be able to meet any obligations or liabilities to which they are, or may become, subject by
virtue of the deed of cross guarantee described in note 33 to the financial statements.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
James Bindon
Managing Director
Gregory Laurie
Chairman
29 August 2017
Sydney
72
Annual Report Big River Industries Limited ABN 72 609 901 377 Independent
auditor’s report to
the members of
Big River Industries
Limited
Annual Report Big River Industries Limited ABN 72 609 901 377
73
73
Annual Report Big River Industries Limited ABN 72 609 901 377Premium F27 formply manufactured at plywood facility - Grafton Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Sydney, NSW, 2000
Australia
Phone: +61 2 9322 7000
www.deloitte.com.au
Independent Auditor’s Report to the Members of Big River
Industries Limited
Opinion
We have audited the financial report of Big River Industries Limited (the “Entity”) and its subsidiaries (the
“Group”) which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated
statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including
a summary of significant accounting policies, and the directors declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations Act
2001, including:
(i)
(ii)
giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its financial
performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements of
the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards
Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the
Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given
to the directors of the Entity, would be in the same terms if given to the directors as at the time of this
auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
57
74
Annual Report Big River Industries Limited ABN 72 609 901 377
Key Audit Matter
How the scope of our audit responded to the Key
Audit Matter
Provisions for impairment of receivables
Our audit procedures included, but were not limited to:
As at 30 June 2017, the Group had trade
receivables of $36,077,732 and a provision for
impairment against receivables of $1,166,338 as
disclosed in note 11.
• Assessing the key controls around management’s
policies and procedures relating to trade receivables
approval processes;
• Agreeing the receivables ageing report used by
Given the nature and volume of customers and
debtors, there
level of
judgement and degree of estimate involved in
determining impairment of receivables.
is a considerable
an
determines
Management
impairment
provision based on the ageing of receivables,
historical collection rates, specific knowledge of
the individual debtor’s financial position, security
provided and applicable debtor insurance cover.
Key Audit Matter
Impairment assessment of Goodwill
As at 30 June 2017 the Group has recognised
goodwill of $6,012,632, of which $5,069,933
arose as a result of acquisitions during the
current year as disclosed in Note 31.
Management’s assessment of the recoverability
of goodwill requires them to exercise significant
judgement in respect of key assumptions
supporting the expected future cash flows, the
discount rate and the long term growth rate.
Management to the general ledger;
• Assessing all material receivables balances in
arrears at year end for impairment by reference to
each debtors’ historical collection rate, proposed
payment plans, security provided and applicable
debtor insurance cover; and
• Assessing the appropriateness of the trade
receivable provisions recorded against the trade
receivable balances, for compliance with the Group’s
provisioning policy.
We have also assessed the appropriateness of the
disclosures in Note 11 to the financial statements.
How the scope of our audit responded to the Key
Audit Matter
Our procedures included, but were not limited to:
• Challenging management’s ability to accurately
forecast cash flows by assessing the precision of the
prior year forecasts against actual outcomes; and
Engaging our valuation specialists to assist with:
o Comparing the discount rate utilised by
•
management to an independently calculated
discount rate;
o Comparing the Group’s forecast cash flows to the
board approved budget, and challenging the
growth rates used; and
o Performing sensitivity analysis on the growth and
discount rates.
We also assessed the appropriateness of the disclosures
in Note 15 to the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the Directors’ Report,
Corporate Directory and Shareholder Information, which we obtained prior to the date of this auditor’s report,
and also includes the following information which will be included in the Group’s annual report (but does not
include the financial report and our auditor’s report thereon): Chairman’s Report, which is expected to be
made available to us after that date.
Our opinion on the financial report does not cover the other information and we do not and will not express
any form of assurance conclusion thereon.
58
75
Annual Report Big River Industries Limited ABN 72 609 901 377
In connection with our audit of the financial report, our responsibility is to read the other information identified
above and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on
the work we have performed on the other information that we obtained prior to the date of this auditor’s
report, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
When we read the Chairman’s Report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to the directors and use our professional judgement to determine the
appropriate action.
Responsibilities of the Directors for the Financial Report
The directors are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control
as the directors determine is necessary to enable the preparation of the financial report that gives a true and
fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no
realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
•
•
•
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
59
76
Annual Report Big River Industries Limited ABN 72 609 901 377
•
•
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Group’s audit. We remain solely responsible for
our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Repo rt
We have audited the Remuneration Report included in pages 14 to 21 of the Director’s Report for the
year ended 30 June 2017.
In our opinion, the Remuneration Report of Big River Industries Limited, for the year ended 30 June 2017,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of Big River Industries Limited 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.
DELOITTE TOUCHE TOHMATSU
Alfred Nehama
Partner
Chartered Accountants
Sydney, 29 August 2017
60
77
Annual Report Big River Industries Limited ABN 72 609 901 377 78
Annual Report Big River Industries Limited ABN 72 609 901 377
Shareholder
Information
Annual Report Big River Industries Limited ABN 72 609 901 377
797979
Annual Report Big River Industries Limited ABN 72 609 901 377Architectural plywood supplied for Macquarie University refurbishment - Sydney Shareholder information 30 June 2017
The shareholder information set out below was applicable as at 23 August 2017.
In accordance with ASX listing rule 4.10.19 the Company confirms that it has used the cash and assets in a form readily
convertible to cash that it had at the time of admission to the ASX in a way consistent with its business objectives.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Number of holders of ordinary shares
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
14
97
40
70
25
246
-
80
Annual Report Big River Industries Limited ABN 72 609 901 377
Shareholder information 30 June 2017
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary Shares
ANACACIA PARTNERSHIP II LP
PANTHEON GLOBAL CO-INVESTMENT OPPORTUNITIES FUND I I LP
AET SFS PTY LTD (NEOC AC)
PANTHEON INTERNATIONAL PLC
PANTHEON GLOBAL CO-INVESTMENT OPPORTUNITIES FUND III LP
SAID BUILDING PRODUCTS GROUP PTY LTD
ANACACIA PTY LIMITED WATTLE FUND
PANTHEON MULTI STRATEGY CO-INVESTMENT PROGRAM 2014
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MELIC PTY LTD (MELIC A/C)
PANTHEON ASIA FUND VI LP
AUST EXECUTOR TRUSTEES LTD (NAOS EMERGING OPP FUND)
DEAN JOSEPH HENDERSON & TERESA YOLANDA HENDERSON
(THE HENDERSON SUPER FUND
J P MORGAN NOMINEES AUSTRALIA LIMITED
MEGAN ANNE BINDON (THE BINDON FAMILY A/C)
VESKAY PTY LTD (VESKAY SUPER FUND A/C)
MIJON INVESTMENTS PTY LTD (THE MIJON S/F A/C)
BINDON SUPER PTY LTD (BINDON SUPER FUND A/C)
CITICORP NOMINEES PTY LIMITED
JAMES HIATT & BREE HIATT (THE J & B HIATT SUPER FUND A/C)
Number Held
% of total
shares issued
18,000,001
8,020,000
4,910,436
4,420,000
4,020,000
2,397,260
1,978,166
970,000
685,907
684,932
570,000
265,328
250,000
214,682
200,000
200,000
200,000
200,000
176,713
160,000
34.23
15.25
9.34
8.40
7.64
4.56-
3.76
1.84
1.30
1.30
1.08
0.50
0.48
0.41
0.38
0.38
0.38
0.38
0.34
1,250,000
48,523,425
92.25
Unquoted equity securities
Number on issue
Number of holders
Options over ordinary shares issued
1,415,455
15
81
Annual Report Big River Industries Limited ABN 72 609 901 377 Shareholder information 30 June 2017
Substantial holders
Substantial holders in the Company are set out below:
Ordinary shares
Anacacia Partnership II, LP
NAOS Asset Management Limited
Ordinary Shares
Number Held
% of total shares issued
36,000,001
5,175,764
68.45
9.84
Voting rights
The voting rights attached to ordinary shares are set out below:
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.
There are no other classes of equity securities.
On-market buy-backs
There is no current on-market buy-back in relation to the Company's securities.
Securities subject to voluntary escrow
Class
Ordinary shares
Ordinary shares
Expiry date
Number of shares
31 December 2018
4,948,170
Close of business on the date the audited financial results for
the year ended 30 June 2018 are released to the market*
36,000,001
40,948,171
*A portion of the 36,000,001 shares may be released prior to the expiry of the escrowed period if the following
conditions are met:
(A) If:
(i) the Company's audited financial results for the year ended 30 June 2017 are released to the market; and
(ii) the volume-weighted average price in any 15 trading days from, and including, the day of the release of those
financial results exceeds $1.46 by more than 10%.
Then 25% of these 36,000,001 shares may be released from escrow on the first business day after the date on
which the conditions in (A)(i) and (A)(ii) have both been satisfied.
(B) If:
(i) the Company's reviewed financial results for the half-year ended 31 December 2017 are released to the market; and
(ii) the volume-weighted average price in any 15 trading days from, and including, the day of the release of those
financial results exceeds $1.46 by more than 20%.
Then 25% of these 36,000,001 shares may be released from escrow on the first business day after the date on
which the conditions in (B)(i) and (B)(ii) have both been satisfied.
(C) After the close of business on the day the Company's audited financial results for the year ended 30 June 2018
are released to the market, the remaining shares will cease to be subject to escrow restrictions.
82
Annual Report Big River Industries Limited ABN 72 609 901 377 Annual Report
Big River Industries Limited ABN 72 609 901 377
84
Annual Report Big River Industries Limited ABN 72 609 901 377