Building Australia
for over 100 years
ANNUAL REPORT 2020
Big River Industries Limited
ABN 72 609 901 377
With an operating
history of approximately
100 years, Big River has
established itself as a
diverse manufacturer
and distributor of timber
and building products.
Big River Industries Limited Annual Report 2020
1
2
Chairman and
Managing Director’s Report
6
Directors’ Report
20
Auditor’s Independence Declaration
21
Statement of Profit or Loss and
Other Comprehensive Income
22
Statement of Financial Position
23
Statement of Changes in Equity
24
Statement of Cash Flows
25
Notes to the Financial Statements
65
Directors’ Declaration
66
Independent Auditor’s Report to the
Members of Big River Industries Limited
70
Shareholder Information
72
Corporate Directory
73
Branch Network
2
Big River Industries Limited Annual Report 2020
Chairman and Managing Director’s Report
Operating Highlights
Despite the considerable challenges
experienced during FY2020, Big
River continued to expand.
Despite the considerable
challenges experienced during
FY2020, Big River continued
to expand, with revenue
of $249m, up 14%. This
included the addition of sites
in Townsville and Adelaide
continuing the diversity across
geographies, construction
types and market segments
that helped insulate the Group
against market volatility.
Statutory EBITDA of $17.7m reflects
the new AASB16 accounting
standard, or $12.3m on a pre
AASB16 basis, up 25% on the
prior period. This translated to
21% growth at the NPAT level or
around 5% growth at comparable
earnings per share level. Given the
challenging environment for the
Construction sector, this was a
solid result for the year.
Whilst Covid-19 and the Bushfires
(experienced in NSW and Victoria
in particular) presented headwinds
for the business, it was the
continued decline in residential
construction starts that most
significantly impacted the operating
performance, given the Group is
over 50% exposed to the various
residential building segments.
Strong performances from New
Zealand, Queensland and Western
Australian divisions however,
helped offset weaknesses in the
other States.
The business continues to
transform from a manufacturing
legacy, to a broad building materials
supply business, with strong
supply chains from company
owned manufacturing assets, toll
manufacturing agreements and
international importation, as well
as a strong supply position with
leading Australian building products
manufacturers.
Strong cost control continues to
be an important discipline in the
business, never more important
than during the Covid-19 pandemic,
where the Group has received very
strong support from a range of
stakeholders. Manufacturing costs
continued to decline, as scale is
reduced and focused on value
added products and activities.
Distribution also continues to
improve gross margin as the
product mix is refined, and
procurement scale continues
to improve. This helped drive
positive improvements to the
EBITDA margins of 50 basis
points during FY2020.
Operating cash flow was a highlight
of the year, with a 112% cash
conversion rate reflecting both
working capital improvements
as well as the benefit of deferred
tax payments initiated by the
Australian Government as part
of their Covid-19 response.
Revenue
$249m
14%
EBITDA (pre AASB16)
$12.3m
25%
Despite the completion payment
for the New Zealand acquisitions in
July 2019, as well as the acquisitions
made in Townsville and Adelaide
during FY2020, net debt only
increased to $22m at 30 June 2020,
with gearing of 23% still well within
the Boards target range.
Dividends
Whilst the Board cancelled the
interim dividend in March 2020
given the very uncertain outlook
due to Covid-19, strong cash
management in the final quarter
allowed the Board to determine
a fully franked dividend of 2.4
cents per share, payable on
6 October 2020.
Big River Industries Limited Annual Report 2020
3
Corporate Governance
Malcolm Jackman took over the
Chairmanship of the Board in July
2019, after Greg Laurie’s retirement.
Greg served on the Board for over
10 years, during periods in which
the Company was both listed and
unlisted. The Board would also
like to particularly pass on our
condolences to Greg’s family and
friends, after his passing earlier
this year.
Brendan York joined the Board
in late 2019 and has assumed the
role of Chair of the Audit & Risk
Committee. His strong financial
background at a critical time in the
economic cycle will be particularly
valuable and adds to the diverse
skill base of the Board.
People
With recent acquisitions, staff
numbers now exceed 400 and
the support of our staff cannot be
overstated during the challenges of
market decline and the significant
disruptions from Covid-19 and
the bushfires. The personal
commitment of the many staff
who took remuneration reductions,
modified hours and working
conditions during the pandemic,
highlight the strength of the
employees and the positive culture
across the Group. On behalf of the
Board, we take this opportunity
to sincerely thank them for their
commitment to the business.
Malcolm Jackman
Chairman
Jim Bindon
Managing Director
4
Big River Industries Limited Annual Report 2020
Financial
Report
2020
Big River Industries Limited Annual Report 2020
5
6
Directors’ Report
20
Auditor’s Independence Declaration
21
Statement of Profit or Loss and
Other Comprehensive Income
22
Statement of Financial Position
23
Statement of Changes in Equity
24
Statement of Cash Flows
25
Notes to the Financial Statements
65
Directors’ Declaration
66
Independent Auditor’s Report to the
Members of Big River Industries Limited
6
Big River Industries Limited Annual Report 2020
Directors’ Report
Big River Industries Limited
Directors' report
30 June 2020
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 2020.
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:
James Bernard Bindon
Malcolm Geoffrey Jackman
Martin Kaplan
Vicky Papachristos
Brendan York (appointed 24 October 2019)
Gregory Ray Laurie (resigned 31 July 2019)
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:
Final dividend of 2.2 cents per fully paid ordinary share paid on 4 October 2019 (2019: 3.5
cents paid on 2 October 2018)
Interim dividend of 2.2 cents per fully paid ordinary share paid on 4 April 2019
Consolidated
2020
$
2019
$
1,374,316
-
1,856,538
1,166,967
1,374,316
3,023,505
On 25 August 2020, the directors determined a fully franked dividend of 2.4 cents per fully paid ordinary share to be paid
on 6 October 2020.
Review of operations
Revenue for the financial year ended 30 June 2020 was $248.9 million, up 14.3% from $217.8 million the previous financial
year, but down 3.2% on a same-store basis.
Net profit after tax for the half-year was $4.4 million, up from $3.9 million in the previous financial year.
The impact of the introduction of AASB 16 'Leases' is summarised in the table below and provides a comparison of the
Group’s operating results on a pre-AASB 16 basis. The adoption of AASB 16 has boosted earnings before interest, tax,
depreciation and amortisation ('EBITDA') (prior to acquisition costs) by $5.3 million, increased depreciation by $5.0 million
and reduced NPAT by $0.3 million.
EBITDA (before acquisition costs)
Acquisition costs
EBITDA
Depreciation and amortisation
Earnings before interest and tax ('EBIT')
Interest
Net profit before tax ('NPBT')
Tax
Net profit after tax ('NPAT')
Statutory
FY2020
$'000
Impact of
AASB 16
$'000
Pre-AASB 16 Statutory
FY2019
$'000
FY2020
$'000
17,669
(740)
16,929
(8,343)
8,586
(2,292)
6,294
(1,850)
4,444
(5,321)
-
(5,321)
(5,006)
(315)
698
383
(109)
274
12,348
(740)
(11,608)
(3,337)
(8,271)
(1,594)
6,677
(1,959)
4,718
9,820
(641)
9,179
(2,667)
6,512
(1,013)
5,499
1,642
3,857
3
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
7
Directors’ Report
Big River Industries Limited
Directors' report
30 June 2020
Excluding the positive impact of the adoption of AASB 16 'Leases', EBITDA of $12.3 million (prior to acquisition costs) was
up 25.7% on the previous financial year mostly due to the inclusion of a full twelve months of the New Zealand acquisition.
EBITDA contribution (prior to AASB 16) from manufacturing facilities was $1.8 million, steady with the $1.8 million
contribution in the previous financial year.
EBITDA from distribution activities (prior to AASB 16) was $13.8 million, up 22.8% from $11.3 million in the previous
financial year.
Net costs from corporate activities were $3.3 million steady with the previous financial year.
Novel Coronavirus (COVID-19)
The outbreak of Novel Coronavirus (‘COVID-19’) had no material impact on operations located in Australia for the financial
year and the Group was not entitled to any government support in Australia, other than the deferral of some tax related
payments amounting to $2.0 million as at 30 June 2020. The four week closure of the Group’s New Zealand facilities
during the forced lock down in New Zealand reduced EBITDA, despite New Zealand Government wage support and rental
relief of $0.35 million.
Significant changes in the state of affairs
On 5 July 2019, the Group executed a business purchase deed to acquire the business and assets of Big Hammer
Building Supplies, a business located in Aitkenvale, Queensland. The purchase price was $1,974,445 which includes the
acquisition of inventory and plant and equipment and was settled through the payment of $1,774,445 in cash. An amount
of $200,000 is payable as cash or through the issue of ordinary shares in Big River Industries Limited, at the Company's
discretion, upon achieving agreed EBITDA targets over a two year period. The values are final as at 30 June 2020.
On 11 July 2019, the Company issued 5,806,429 ordinary shares at an issue price of $1.05 per share following approval at
the Company’s EGM on 9 July 2019.
On 12 July 2019, the Company issued 1,803,264 shares as part consideration to the vendors of the New Zealand
businesses of Plytech International Limited and Decortech Limited as referred to in the Company's announcement of 1 May
2019. These shares are subject to voluntary escrow, of which 37.5% were released from escrow on 11 July 2020, being 12
months from the date of issue; and the remaining 62.5% will be released from escrow on 11 July 2021.
On 17 February 2020, the Group executed a business purchase deed to acquire the trading business and assets of Pine
Design Truss and Timber located in Adelaide, South Australia. The purchase price is $3,498,331 which includes the
acquisition of inventory and plant and equipment. $3,098,331 is payable at completion with the balance of $400,000
payable upon achieving agreed EBITDA targets over a two year period.
Novel Coronavirus (COVID-19)
The outbreak of Novel Coronavirus (‘COVID-19’) and the subsequent quarantine measures imposed by the Australian and
other governments as well as the travel and trade restrictions imposed in early 2020 have caused disruption to businesses
and economic activity.
As at the date these financial statements are authorised for issue, the directors do not consider the impact to likely
compromise the ability of the Group to continue operating for the foreseeable future and are of the belief that there is
sufficient cash to ride out the effects of COVID-19 even if the related restrictions remain in force for an extended period of
time.
Dividend cancellation
As announced to the ASX on 25 March 2020, the Company cancelled payment of the interim dividend of 2.4 cents per
ordinary share previously announced on 25 February 2020 due to the uncertainty of COVID-19.
There were no other significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
The impact of the COVID-19 pandemic is ongoing, and it is not practicable to estimate the potential impact after the
reporting date. The situation is rapidly developing and is dependent on measures imposed by the Australian Government
and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic
stimulus that may be provided.
4
For the year ended 30 June 2020
8
Big River Industries Limited Annual Report 2020
Directors’ Report
Big River Industries Limited
Directors' report
30 June 2020
Apart from the dividend determined as discussed above, no other matter or circumstance has arisen since 30 June 2020
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
sensitive to a broad range of economic and other factors, including any potential impact from COVID-19.
As the COVID-19 situation remains fluid due to continuing changes in government policy and evolving business and
customer reactions thereto, as at the date these financial statements are authorised for issue, the directors of the Group
consider that the future financial effects of COVID-19 on the Group's operations and operating results cannot be
reasonably estimated.
The Group has a strong balance sheet and a healthy undrawn banking facility which will continue to support the Group.
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:
James Bernard Bindon
Managing Director and Chief Executive Officer
James ('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 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. 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:
None
Former directorships (last 3 years): None
None
Special responsibilities:
533,333 ordinary shares (indirectly)
Interests in shares:
200,000 options (indirectly)
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Malcolm Geoffrey Jackman
Independent Non-Executive Chairman
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 and became Chairman on 31 July 2019. Malcolm has also been a
director of Big River Group Pty Limited since February 2016. Malcolm is a member of
the Anacacia Capital Business Advisory Council.
Non-Executive Director of Force Fire Pty Limited (non-listed)
Other current directorships:
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
Chair of the Board
116,112
None
5
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
9
Directors’ Report
Big River Industries Limited
Directors' report
30 June 2020
Name:
Title:
Qualifications:
Experience and expertise:
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 since February 2016. Martin is currently an
Investment Director of Anacacia Capital Pty Ltd, the management company of the
major shareholder Anacacia Partnership II, L.P.
Non-Executive Director of Direct Couriers Group Pty Ltd (non-listed)
Other current directorships:
Former directorships (last 3 years): None
None
Special responsibilities:
Martin is an Investment Director of Anacacia Capital Pty Ltd which manages the
Interests in shares:
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.
None
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Vicky Papachristos
Independent Non-Executive Director
Vicky holds an Engineering degree from Monash University, an MBA from the
Australian Graduate School of Management and is a member of the Australian
Institute of Company Directors.
Vicky is an experienced Non-Executive Director and has been involved across
various operational, strategic and creative roles with organisations including Shell,
Westpac, Coventry and Myer.
Non-Executive Director of Aussie Broadband Pty Limited, Non-Executive Director of
GMHBA Limited and Non-Executive Director of MO Health Pty Ltd
Former directorships (last 3 years): Former Non-Executive Director of Coventry Group Limited and former Chairman of
Special responsibilities:
Interests in shares:
Interests in options:
Mount Baw Baw Alpine Resort (non-listed).
Chair of the Nomination and Remuneration Committee
30,000 ordinary shares (indirectly)
None
Name:
Title:
Experience and expertise:
Brendan York
Independent Non-Executive Director (appointed 24 October 2019)
Brendan is an experienced financial executive and currently holds the role Chief
Financial Officer of Enero Group Ltd. Brendan is a Chartered Accountant and has a
Bachelor of Business Administration and a Bachelor of Commerce from Macquarie
University.
None
Other current directorships:
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
Chair of the Audit and Risk Committee
None
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.
Interests in shares and options are as at the date of this report.
6
For the year ended 30 June 2020
10
Big River Industries Limited Annual Report 2020
Directors’ Report
Big River Industries Limited
Directors' report
30 June 2020
Company Secretary
Stephen Thomas Parks (BCom, FIPA)
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.
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 2020, 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
J Bindon *
M Kaplan
M Jackman
V Papachristos
B York
G Laurie
13
12
13
13
9
1
13
13
13
13
9
1
2
3
3
3
1
-
2
3
3
3
1
-
4
4
4
4
3
-
4
4
4
4
3
-
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
*
J Bindon is not a member of the sub-committees but was invited to attend these meetings and his attendance was
minuted.
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, and explains how the Group's performance has
driven remuneration outcomes.
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:
●
●
Stephen Parks - Chief Financial Officer and Company Secretary
John Lorente - General Manager - Sales and Marketing
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
7
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
11
Directors’ Report
Big River Industries Limited
Directors' report
30 June 2020
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 operation of incentive plans, including equity-based remuneration plans for senior executives;
reviewing Board and senior executive succession plans; and
recommending the appointment of any new directors.
The quality of the directors and executives is a major factor in the overall performance of the Group. 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 achievement of 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.
The executive remuneration and reward framework currently has three components:
●
●
●
fixed base salary, including superannuation and non-monetary benefits;
short-term performance incentives; and
long-term performance incentives.
8
For the year ended 30 June 2020
12
Big River Industries Limited Annual Report 2020
Directors’ Report
Big River Industries Limited
Directors' report
30 June 2020
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.
The short-term incentive ('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
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 STI's are paid in cash following the end of the financial year and approval from the Nomination and Remuneration
Committee. The Nomination and Remuneration Committee retains the discretion to withdraw or amend the STI at any time.
The long-term incentive program ('LTI') is designed to create an alignment between shareholder benefit and the
remuneration of selected executives through the issue of Performance Rights. The number of Performance Rights vesting
will be determined by reference to the compound annual growth rate ('CAGR') in Earnings Per Share ('EPS') over the
vesting period and ranges from nil for less than 3% CAGR in EPS to 100% for greater than 10% CAGR in EPS, subject to
an overriding discretion held by the Board. The Board considers CAGR in EPS to be an appropriate performance measure
as it aligns with the Group’s remuneration policy of creating value and is within the scope of influence of the selected
executives.
Group 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 five years.
Use of remuneration consultants
During the financial year ended 30 June 2020, the Group did not engage remuneration consultants.
Voting and comments made at the Company's 2019 Annual General Meeting ('AGM')
At the 23 October 2019 AGM, 99.97% of the votes received supported the adoption of the remuneration report for the year
ended 30 June 2019. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
9
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
13
Directors’ Report
Big River Industries Limited
Directors' report
30 June 2020
2020
Non-Executive Directors:
G Laurie**
M Kaplan*
M Jackman
V Papachristos
B York***
Executive Directors:
J Bindon
Other Key Management
Personnel:
S Parks
J Lorente
Short-term benefits
Post-
employment
benefits
Accrued
long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Leave
monetary annuation benefits
Super-
$
$
$
Perform-
ance
rights
$
Total
$
8,781
-
84,738
61,468
38,093
422,981
318,108
321,711
1,255,880
-
-
-
-
-
-
-
-
-
-
-
-
-
-
834
-
8,050
5,839
3,619
-
-
-
-
-
-
-
-
-
-
9,615
-
92,788
67,307
41,712
-
24,038
16,564
-
463,583
-
-
-
24,139
24,393
90,912
19,484
16,659
52,707
361,731
-
-
362,763
- 1,399,499
M Kaplan waived his director's fees (including any committee fee to which he is entitled) until 30 June 2020.
G Laurie retired on 31 July 2019.
*
**
*** Remuneration is for the period from date of appointment, 24 October 2019, to 30 June 2020.
'Accrued long-term benefits' represent movements in employee leave entitlements.
Total remuneration paid to non-executive directors for the year ending 30 June 2020 amounted to $211,422 (30 June
2019: $235,000) which is 42.3% of the aggregate.
The above directors and key management personnel all took a 20% reduction in remuneration for a period of 11 weeks
during the initial uncertainty arising from the outbreak of COVID-19.
10
For the year ended 30 June 2020
14
Big River Industries Limited Annual Report 2020
Directors’ Report
Big River Industries Limited
Directors' report
30 June 2020
2019
Non-Executive Directors:
G Laurie
M Kaplan*
M Jackman
V Papachristos
Executive Directors:
J Bindon
Other Key Management
Personnel:
D Henderson**
S Parks
J Lorente
Short-term benefits
Post-
employment
benefits
Accrued
long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Leave
monetary annuation benefits
Super-
$
$
$
Perform-
ance
rights
$
Total
$
91,324
-
59,361
63,927
390,000
179,399
284,927
319,167
1,388,105
-
-
-
-
-
-
-
-
-
-
-
-
-
8,676
-
5,639
6,073
-
-
-
-
-
-
-
-
100,000
-
65,000
70,000
-
25,000
6,151
-
421,151
-
-
-
-
6,604
25,073
27,755
104,820
-
4,401
-
10,552
186,003
-
314,401
-
-
346,922
- 1,503,477
*
**
M Kaplan waived his director's fees (including any committee fee to which he is entitled) until 30 June 2020.
D Henderson retired on 12 October 2018. His remuneration included the payment of $67,704 in accrued leave
entitlements.
'Accrued long-term benefits' represent movements in employee leave entitlements.
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
J Lorente
Fixed remuneration
2019
2020
At risk - STI
At risk - LTI
2020
2019
2020
2019
100%
100%
-
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The proportion of the cash bonus paid/payable or forfeited is as follows:
Name
Executive Directors:
J Bindon
Other Key Management Personnel:
D Henderson
S Parks
J Lorente
Cash bonus paid/payable
2020
2019
Cash bonus forfeited
2019
2020
-
-
-
-
-
-
-
-
100%
100%
-
100%
100%
100%
100%
100%
Cash bonus forfeited includes missed EBITDA performance targets along with voluntary forfeiture for any KPI objectives
met.
11
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
15
Directors’ Report
Big River Industries Limited
Directors' report
30 June 2020
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:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
J Bindon
Managing Director and Chief Executive Officer
January 2001
No fixed term
Total fixed employment cost ('TFEC') of $470,000 per annum including statutory
superannuation contributions. Short Term Incentive ('STI') of 35% of TFEC, subject to
achievement of financial hurdles, principally relating to EBITDA performance (70% of
STI) and the achievement of other business objectives (30% of STI). Either Jim or the
Company may terminate the employment contract by giving 6 months' written notice
to the other party.
S Parks
Chief Financial Officer and Company Secretary
July 2008
No fixed term
Total fixed employment cost ('TFEC') of $360,000 per annum including statutory
superannuation contributions. Short Term Incentive ('STI') of 20% of TFEC, subject to
achievement of financial hurdles, principally relating to EBITDA performance (70% of
STI) and the achievement of other business objectives (30% of STI). 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.
J Lorente
General Manager - Sales and Marketing
February 2018
No fixed term
Total fixed employment cost ('TFEC') of $360,000 per annum including statutory
superannuation contributions. Short Term Incentive ('STI') of 20% of TFEC, subject to
achievement of financial hurdles, principally relating to EBITDA performance (70% of
STI) and the achievement of other business objectives (30% of STI). Either John or
the Company may terminate the employment contract by giving 3 months' written
notice to the other party.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
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 2020.
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 2020.
There were no options over ordinary shares granted to or vested in directors and other key management personnel as part
of compensation during the year ended 30 June 2020.
12
For the year ended 30 June 2020
16
Big River Industries Limited Annual Report 2020
Directors’ Report
Big River Industries Limited
Directors' report
30 June 2020
Performance rights
The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of directors and
other key management personnel in this financial year or future reporting years are as follows:
Name
J Bindon
S Parks
J Lorente
Number of
rights
granted
Grant date
Measurement period/
Vesting date
Expiry date
Fair value
per right
at grant date
154,024 23 November 2018
307,147 28 November 2019
65,745 23 November 2018
134,435 28 November 2019
72,107 23 November 2018
134,435 28 November 2019
30 June 2021
30 June 2022
30 June 2021
30 June 2022
30 June 2021
30 June 2022
23 November 2023
28 November 2024
23 November 2023
28 November 2024
23 November 2023
28 November 2024
$1.611
$1.076
$1.611
$1.076
$1.611
$1.076
Vesting hurdle:
The number of Performance Rights vesting will be determined by reference to the CAGR in EPS over the vesting period of
years and ranges from nil for less than 3% CAGR in EPS to 100% for greater than 10% CAGR in EPS, subject to an
overriding discretion held by the Board. The Board considers CAGR in EPS to be an appropriate performance measure as
it aligns with the Group’s remuneration policy of creating value and is within the scope of influence of the selected
executives.
Performance rights granted carry no dividend or voting rights. On exercise of rights, the Board will determine at its
discretion whether to settle the exercised rights in shares, cash, or a combination thereof. Performance rights that are not
forfeited on cessation of employment will be retained for testing for vesting at the end of the relevant measurement period.
The number of performance rights over ordinary shares granted to and vested by directors and other key management
personnel as part of compensation during the year ended 30 June 2020 are set out below:
Name
J Bindon
S Parks
J Lorente
Number of
Number of
Number of
Number of
rights
granted
rights
granted
rights
vested
rights
vested
during the
during the
during the
during the
year
2020
year
2019
year
2020
year
2019
307,147
134,435
134,435
154,024
65,745
72,107
-
-
-
-
-
-
Additional information
The earnings of the Group for the five years to 30 June 2020 are summarised below:
2020
$
2019
$
2018
$
2017
$
2016
$
Sales revenue
EBITDA
EBIT
Profit/(loss) after income tax
248,827,815 217,689,464 210,756,310 176,891,981 71,536,530
(1,085,537)
16,929,873
(1,854,145)
8,586,786
(1,949,368)
4,444,257
9,178,218 10,676,690
8,180,084
6,511,527
5,176,270
3,856,713
8,144,377
6,175,247
3,927,681
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
Basic earnings per share (cents per share)
7.14
7.24
9.79
9.55
-
2020
2019
2018
2017
2016
13
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
17
Directors’ Report
Big River Industries Limited
Directors' report
30 June 2020
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:
Ordinary shares
G Laurie*
M Kaplan
M Jackman
V Papachristos
B York
J Bindon
S Parks
J Lorente
Balance at Received
the start of as part of
the year
remuneration Additions
Disposals/
other
Balance at
the end of
the year
30,000
-
68,493
30,000
-
414,285
320,000
36,588
899,366
-
-
-
-
-
-
-
-
-
-
-
47,619
-
-
119,048
-
-
166,667
(30,000)
-
-
-
-
-
-
-
(30,000)
-
-
116,112
30,000
-
533,333
320,000
36,588
1,036,033
*
Disposals/other represents no longer a director or key management personnel during the year, not necessarily a
disposal of holding.
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:
Options over ordinary shares
J Bindon
S Parks
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
200,000
100,000
300,000
-
-
-
-
-
-
-
-
-
200,000
100,000
300,000
Performance rights holding
The number of performance rights 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:
Performance rights over ordinary shares
J Bindon
S Parks
J Lorente
Balance at
the start of
the year
Granted
Expired/
forfeited/
other
Balance at
the end of
the year
Vested
154,024
65,745
72,107
291,876
307,147
134,435
134,435
576,017
-
-
-
-
-
-
-
-
461,171
200,180
206,542
867,893
This concludes the remuneration report, which has been audited.
14
For the year ended 30 June 2020
18
Big River Industries Limited Annual Report 2020
Directors’ Report
Big River Industries Limited
Directors' report
30 June 2020
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
19 February 2021
13 February 2022
Exercise
price
Number
under option
$2.00
$2.20
1,185,000
45,455
1,230,455
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 under performance rights
Unissued ordinary shares of Big River Industries Limited under performance rights at the date of this report are as follows:
Grant date
23 November 2018
28 November 2019
Expiry date
23 November 2023
28 November 2024
Number
under rights
341,355
677,590
1,018,945
No person entitled to exercise the performance rights had or has any right by virtue of the performance right 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 2020 and up to the date of this report.
Shares issued on the exercise of performance rights
There were no ordinary shares of Big River Industries Limited issued on the exercise of performance rights during the year
ended 30 June 2020 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.
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 32 to the financial statements.
15
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
19
Directors’ Report
Big River Industries Limited
(cid:24)irectors(cid:4) report
For the year ended 30 June 2020
30 June 2020
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 32 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
(cid:84)
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and ob(cid:65)ectivity
of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in A(cid:42)(cid:31)S 110 Code
of (cid:31)thics for (cid:42)rofessional Accountants (including Independence Standards) issued by the Accounting (cid:42)rofessional
and (cid:31)thical 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 (cid:65)ointly sharing economic risks and
rewards.
(cid:84)
Officers of the Compan(cid:65) (cid:63)ho are former partners of (cid:24)eloitte (cid:38)ouche (cid:38)ohmatsu
There are no officers of the Company who are former partners of Deloitte Touche Tohmatsu.
(cid:21)uditor(cid:4)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.
(cid:21)uditor
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
(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)
Malcolm Jackman
Chairman
25 August 2020
Sydney
(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)
James Bindon
Managing Director
(cid:3)(cid:8)
20
Big River Industries Limited Annual Report 2020
Auditor’s Independence Declaration
For the year ended 30 June 2020
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
The Board of Directors
Big River Industries Pty Limited
Trenayr Road
Junction Hill NSW 2460
25 August 2020
Dear Board Members
Auditor’s Independence Declaration to
Big River Industries Limited
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 Limited.
As lead audit partner for the audit of the financial statements of Big River Industries for the financial year ended
30 June 2020, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) 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 Asia Pacific Limited and the Deloitte Network.
17
Big River Industries Limited Annual Report 2020
21
Statement of Profit or Loss and Other Comprehensive Income
Big River Industries Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2020
Revenue
Other income
Expenses
Raw materials and consumables used
Selling and distribution expense
Employee benefits expense
Occupancy expense
General and administration expense
Acquisition costs
Depreciation and amortisation expense
Impairment of receivables
Finance costs
Profit before income tax expense
Note
Consolidated
2020
$
2019
$
5
6
248,924,142 217,794,157
396,501
26,249
(177,340,696) (158,077,609)
(6,044,720)
(28,787,185)
(8,243,970)
(6,217,996)
(641,571)
(2,666,691)
(629,137)
(1,013,074)
(6,135,202)
(35,741,227)
(4,789,320)
(7,114,814)
(739,501)
(8,343,087)
(530,010)
(2,292,120)
6,294,666
5,498,453
7
7
10
7
Income tax expense
8
(1,850,409)
(1,641,740)
Profit after income tax expense for the year attributable to the owners of Big
River Industries Limited
28
4,444,257
3,856,713
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the owners of Big
River Industries Limited
(352,016)
1,764
(352,016)
1,764
4,092,241
3,858,477
Cents
Cents
Basic earnings per share
Diluted earnings per share
41
41
7.14
7.14
7.24
7.24
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
18
For the year ended 30 June 2020
22
Big River Industries Limited Annual Report 2020
Statement of Financial Position
Big River Industries Limited
Statement of financial position
As at 30 June 2020
Note
Consolidated
2020
$
2019
$
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangibles
Deferred tax
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Deferred consideration
Borrowings
Lease liabilities
Income tax
Provisions
Contingent consideration
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Deferred tax
Provisions
Contingent consideration
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Foreign currency translation reserve
Retained profits
Total equity
9
10
11
12
8,712,184
1,202,098
43,563,921 43,117,725
38,209,452 37,209,150
841,558
91,615,959 82,370,531
1,130,402
13
14
15
8
27,838,947 27,971,850
18,460,358
-
29,578,070 26,296,429
2,445,584
78,685,880 56,713,863
2,808,505
170,301,839 139,084,394
16
17
18
19
8
20
21
38,439,060 36,323,029
- 16,609,092
506,115
901,175
66,830
4,034,133
250,000
53,307,296 58,690,374
2,816,267
5,272,759
863,342
4,491,826
1,424,042
22
23
8
24
25
25,850,000 13,520,000
1,368,048
16,251,410
105,600
284,059
500,606
646,714
3,365,756
2,230,120
45,262,303 18,860,010
98,569,599 77,550,384
71,732,240 61,534,010
26
27
28
69,286,174 61,325,301
1,764
206,945
(350,252)
2,796,318
71,732,240 61,534,010
The above statement of financial position should be read in conjunction with the accompanying notes
19
As at 30 June 2020
Big River Industries Limited Annual Report 2020
23
Statement of Changes in Equity
Big River Industries Limited
Statement of changes in equity
For the year ended 30 June 2020
Consolidated
Balance at 1 July 2018
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:
Contributions of equity, net of transaction costs (note 26)
Dividends paid (note 29)
Foreign
currency
translation
reserve
$
Issued
capital
$
Retained
profits
$
Total equity
$
59,522,743
-
(626,263) 58,896,480
-
-
-
-
1,764
3,856,713
-
3,856,713
1,764
1,764
3,856,713
3,858,477
1,802,558
-
-
-
-
(3,023,505)
1,802,558
(3,023,505)
Balance at 30 June 2019
61,325,301
1,764
206,945 61,534,010
Consolidated
Balance at 1 July 2019
Foreign
currency
translation
reserve
$
Issued
capital
$
Retained
profits
$
Total equity
$
61,325,301
1,764
206,945 61,534,010
Adjustment for change in accounting policy (note 2)
-
-
(480,568)
(480,568)
Balance at 1 July 2019 - restated
61,325,301
1,764
(273,623) 61,053,442
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:
Contributions of equity, net of transaction costs (note 26)
Dividends paid (note 29)
-
-
-
-
(352,016)
4,444,257
-
4,444,257
(352,016)
(352,016)
4,444,257
4,092,241
7,960,873
-
-
-
-
(1,374,316)
7,960,873
(1,374,316)
Balance at 30 June 2020
69,286,174
(350,252)
2,796,318 71,732,240
The above statement of changes in equity should be read in conjunction with the accompanying notes
20
For the year ended 30 June 2020
24
Big River Industries Limited Annual Report 2020
Statement of Cash Flows
Big River Industries Limited
Statement of cash flows
For the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Other revenue
Interest and other finance costs paid
Income taxes paid
Note
Consolidated
2020
$
2019
$
274,592,437 235,230,075
(256,712,686) (228,341,613)
17,879,751
477,135
(2,150,669)
(1,278,702)
6,888,462
104,693
(1,012,040)
(2,233,467)
Net cash from operating activities
40
14,927,515
3,747,648
Cash flows from investing activities
Payment for purchase of businesses, net of cash acquired
Final payments for prior period's business acquisition
Payments for contingent consideration
Payments for property, plant and equipment
Payments for intangibles
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
Proceeds from borrowings
Repayment of borrowings
Net lease repayments
Dividends paid
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
37
13
15
(4,872,276)
(14,697,412)
(250,000)
(1,122,021)
(973,262)
44,489
(6,605,453)
-
-
(1,524,234)
(751,088)
84,546
(21,870,482)
(8,796,229)
26
29
6,096,750
(41,860)
12,330,000
-
(4,891,520)
(1,374,316)
1,649,096
(209,340)
6,600,000
(1,000,000)
(238,968)
(3,023,505)
12,119,054
3,777,283
5,176,087
695,983
23,847
(1,271,298)
1,971,251
(3,970)
Cash and cash equivalents at the end of the financial year
9
5,895,917
695,983
The above statement of cash flows should be read in conjunction with the accompanying notes
21
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
25
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 1. General information
The financial statements cover Big River Industries Limited as a Group consisting of Big River Industries Limited
('Company' or 'parent entity') and the entities it controlled at the end of, or during, the year ('Group'). 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 25 August 2020. The
directors have the power to amend and reissue the financial statements.
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. The adoption of these
Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of
the Group.
The following Accounting Standards and Interpretations are most relevant to the Group:
AASB 2020-4 Amendment to Australian Accounting Standards - Covid-19-Related Rent Concessions
The Group has early adopted the amendment to AASB 16 from 1 July 2019. The amendment provides a practical
expedient for lessees to account for COVID-19-related rent concessions that: result in lease payments that are
substantially the same as, or less than, the consideration for the lease immediately prior to the change; where any
reduction in the lease payments affects only payments originally due on or before 30 June 2021; and where there is no
substantive change to other terms and conditions of the lease. The practical expedient allows an entity not to assess rent
concessions meeting the criteria as a lease modification. As a result, to the extent that lease concessions represent a
forgiveness or waiver of lease payments, such concessions are treated as variable lease payments recognised in profit or
loss with a corresponding adjustment to the lease liability. To the extent that the lease concession in substance represents
a delay in lease repayments such that lease consideration is not changed, the lease liability is not extinguished. Interest
continues to accrue for that period.
AASB 16 Leases
The Group has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for lessees eliminates
the classifications of operating leases and finance leases. Subject to exceptions, a 'right-of-use' asset is 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 are expensed to profit or loss as incurred. A liability corresponding to the capitalised
lease is also recognised, adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an
estimate of any future restoration, removal or dismantling costs.
22
For the year ended 30 June 2020
26
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Straight-line operating lease expense recognition is 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 are 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.
Practical expedients applied
In adopting AASB 16, the Group has used the following practical expedients permitted by the standard:
applied a single discount rate to a portfolio of leases with reasonably similar characteristics;
●
accounted for operating leases with a remaining lease term of less than 12 months as at 1 July 2019 as short-term
●
leases;
excluded initial direct costs for the measurement of the right-of-use asset at the date of initial application;
used hindsight in determining the lease term where the contract contains options to extend or terminate the lease; and
not apply AASB 16 to contracts that were not previously identified as containing a lease.
●
●
●
Impact of adoption
AASB 16 was adopted using the modified retrospective approach and as such comparatives have not been restated. The
impact of the adoption on opening retained earnings as at the transition date 1 July 2019 is as follows:
Operating lease commitments as at 1 July 2019 (AASB 117)
Short-term leases not recognised as a right-of-use asset (AASB 16)
Net impact of discounting* and lease extension options not accounted for under AASB 117
Lease liabilities (AASB 16)
Right-of-use assets (AASB 16)
Tax effect on the above adjustments
Reduction in opening retained profits as at 1 July 2019
1 July
2019
$
(20,384,046)
47,500
(1,072,903)
(21,409,449)
20,723,973
204,908
(480,568)
*
The lease payments have been discounted based on the weighted average incremental borrowing rate of 3.385%.
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 financial assets and liabilities at fair value through profit or loss.
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.
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 36.
23
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
27
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Big River Industries Limited
as at 30 June 2020 and the results of all subsidiaries for the year then ended.
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.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Big River Industries Limited's functional and
presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into the functional currency using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average
exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange
differences are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in
exchange for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the
contract with a customer; identifies the performance obligations in the contract; determines the transaction price which
takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the
separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be
delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the
transfer to the customer of the goods or services promised.
24
For the year ended 30 June 2020
28
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates
are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable
consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly
probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement
constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts
received that are subject to the constraining principle are recognised as a refund liability.
Sale of goods
Sale of goods revenue is recognised at the point in time when the performance obligation has been satisfied, which is
when the customer obtains control of the goods, which is generally at the time of delivery.
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.
Income tax
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.
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.
25
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
29
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
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.
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 allowance for expected credit losses. Trade receivables are generally due for settlement within
30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
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, 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.
Leases (to 30 June 2019)
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.
26
For the year ended 30 June 2020
30
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
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.
Right-of-use assets (from 1 July 2019)
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in
the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset,
and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of
the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted
for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with
terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss
as incurred.
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. 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.
Software
Significant costs associated with software are deferred and amortised on a straight-line basis over the period of their
expected benefit, being their finite life of up to 7 years.
Product development
Product development has a finite useful life and is carried at cost less accumulated amortisation. Amortisation is calculated
using the straight-line method to allocate the cost over the useful life of up to 10 years.
27
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
31
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Impairment of non-financial assets
Goodwill is not subject to amortisation and is 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.
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.
Lease liabilities (from 1 July 2019)
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease
or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments comprise of fixed
payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option
is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend
on an index or a rate are expensed in the period in which they are incurred.
The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are
incurred. Variable lease payments include rent concessions in the form of rent forgiveness or a waiver as a direct
consequence of the COVID-19 pandemic and which relate to payments originally due on or before 30 June 2021.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use
asset is fully written down.
Finance costs
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.
28
For the year ended 30 June 2020
32
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
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. 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 high-quality
corporate 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.
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.
29
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
33
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
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.
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.
30
For the year ended 30 June 2020
34
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
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.
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 2020. 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.
New Conceptual Framework for Financial Reporting
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020 and
early adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as well as new
guidance on measurement that affects several Accounting Standards. Where the Group has relied on the existing
framework in determining its accounting policies for transactions, events or conditions that are not otherwise dealt with
under the Australian Accounting Standards, the Group may need to review such policies under the revised framework. At
this time, the application of the Conceptual Framework is not expected to have a material impact on the Group's financial
statements.
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.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may
have, on the Group based on known information. This consideration extends to the nature of the products and services
offered, customers, supply chain, staffing and geographic regions in which the Group operates. Other than as addressed in
specific notes, there does not currently appear to be either any significant impact upon the financial statements or any
significant uncertainties with respect to events or conditions which may impact the Group unfavourably as at the reporting
date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected
credit loss rate for each group. These assumptions include recent sales experience and historical collection rates.
31
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
35
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 3. Critical accounting judgements, estimates and assumptions (continued)
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.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the
underlying asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods
to be included in the lease term. In determining the lease term, all facts and circumstances that create an economical
incentive to exercise an extension option, or not to exercise a termination option, are considered at the lease
commencement date. Factors considered may include the importance of the asset to the Group's operations; comparison
of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant leasehold
improvements; and the costs and disruption to replace the asset. The Group reassesses whether it is reasonably certain to
exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in
circumstances.
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to
discount future lease payments to measure the present value of the lease liability at the lease commencement date. Such
a rate is based on what the Group estimates it would have to pay a third party to borrow the funds necessary to obtain an
asset of a similar value to the right-of-use asset, with similar terms, security and economic environment.
Note 4. Operating segments
Identification of reportable operating segments
The Group is organised into one operating segment as the Group operated mainly 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.
Australia
New Zealand
Revenue from external
customers
Geographical non-current
assets
2020
$
2019
$
2020
$
2019
$
223,841,605 215,802,871 53,975,703 40,149,680
1,886,593 21,901,672 14,118,599
24,986,210
248,827,815 217,689,464 75,877,375 54,268,279
The Group's revenue is generated from sales of building products in Australia and New Zealand. The geographic split of
this revenue across all companies is: a) Australia (90%) and b) New Zealand (10%).
The geographical non-current assets above are exclusive of deferred tax assets.
32
For the year ended 30 June 2020
36
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 5. Revenue
Revenue from contracts with customers
Sale of goods
Other revenue
Other revenue
Revenue
Consolidated
2020
$
2019
$
248,827,815 217,689,464
96,327
104,693
248,924,142 217,794,157
Disaggregation of revenue
Disaggregation of revenue is already disclosed in note 4. All of the Group's revenue is recognised at a point in time.
Note 6. Other income
Net gain on disposal of property, plant and equipment
Unwind of contingent consideration (note 25)
Other income
Consolidated
2020
$
2019
$
15,693
380,808
26,249
-
396,501
26,249
33
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
37
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 7. Expenses
Profit before income tax includes the following specific expenses:
Cost of sales
Cost of sales
Depreciation
Buildings
Plant and equipment
Buildings right-of-use assets
Total depreciation
Amortisation
Customer relationships
Software
Product development
Total amortisation
Total depreciation and amortisation
Finance costs
Interest and finance charges paid/payable on borrowings
Interest and finance charges paid/payable on lease liabilities
Finance costs expensed
Leases
Minimum lease payments
Short-term lease payments
Total leases
Superannuation expense
Defined contribution superannuation expense
Expenses associated with business combinations
Transaction costs
34
Consolidated
2020
$
2019
$
177,340,696 158,077,609
166,355
2,487,330
5,005,597
165,737
1,972,954
-
7,659,282
2,138,691
579,960
68,000
35,845
528,000
-
-
683,805
528,000
8,343,087
2,666,691
1,593,985
698,135
1,013,074
-
2,292,120
1,013,074
-
108,253
3,705,511
-
108,253
3,705,511
2,253,667
1,864,289
739,501
641,571
For the year ended 30 June 2020
38
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 8. Income tax
Income tax expense
Current tax
Deferred tax - origination and reversal of temporary differences
Adjustment recognised for prior periods
Aggregate income tax expense
Deferred tax included in income tax expense comprises:
Decrease/(increase) in deferred tax assets
Decrease in deferred tax liabilities
Deferred tax - origination and reversal of temporary differences
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Non-allowable items
Difference in overseas tax rates
Underprovision/(overprovision) from prior period
Income tax expense
Amounts credited directly to equity
Deferred tax assets
Consolidated
2020
$
2019
$
2,067,040
(224,805)
8,174
1,598,373
68,125
(24,758)
1,850,409
1,641,740
(24,461)
(200,344)
226,525
(158,400)
(224,805)
68,125
6,294,666
5,498,453
1,888,400
1,649,536
(8,719)
22,273
1,879,681
(37,446)
8,174
1,671,809
(5,311)
(24,758)
1,850,409
1,641,740
Consolidated
2020
$
2019
$
(12,559)
(62,802)
35
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
39
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 8. Income tax (continued)
Deferred tax asset
Deferred tax asset comprises temporary differences attributable to:
Allowance for expected credit losses
Property, plant and equipment
Right-of-use assets
Employee benefits
Leases
Capital raise and IPO expenses
Lease provisions
Other provisions and accruals
Deferred tax asset
Consolidated
2020
$
2019
$
505,047
(127,522)
(5,377,961)
1,656,647
5,690,251
193,520
-
268,523
429,236
3,961
-
1,356,344
-
341,825
62,922
251,296
2,808,505
2,445,584
Amount expected to be recovered within 12 months
2,808,505
2,445,584
Movements:
Opening balance
Credited/(charged) to profit or loss
Credited to equity
Additions through business combinations (note 37)
Introduction of AASB 16 'Leases'
Closing balance
Deferred tax liability
Deferred tax liability comprises temporary differences attributable to:
Customer relationships
Present value on contingent consideration
Deferred tax liability
Amount expected to be settled within 12 months
Amount expected to be settled after more than 12 months
Movements:
Opening balance
Credited to profit or loss
Finalisation of prior period business combination
Closing balance
36
2,445,584
24,461
12,559
120,994
204,907
2,307,869
(226,525)
62,802
301,438
-
2,808,505
2,445,584
Consolidated
2020
$
2019
$
251,593
32,466
105,600
-
284,059
105,600
62,898
221,161
105,600
-
284,059
105,600
105,600
(200,344)
378,803
264,000
(158,400)
-
284,059
105,600
For the year ended 30 June 2020
40
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 8. Income tax (continued)
Provision for income tax
Provision for income tax
The provision for income tax includes $200,189 of allowed payment deferrals.
Note 9. 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 and trade finance (note 18)
Balance as per statement of cash flows
Note 10. Current assets - trade and other receivables
Trade receivables
Less: Allowance for expected credit losses
Other receivables
Consolidated
2020
$
2019
$
863,342
66,830
Consolidated
2020
$
2019
$
1,557,850
7,154,334
140,916
1,061,182
8,712,184
1,202,098
8,712,184
(2,816,267)
1,202,098
(506,115)
5,895,917
695,983
Consolidated
2020
$
2019
$
43,453,313 43,219,203
(1,430,786)
41,769,823 41,788,417
(1,683,490)
1,794,098
1,329,308
43,563,921 43,117,725
Allowance for expected credit losses
The Group has recognised a loss of $530,010 in profit or loss in respect of the expected credit losses for the year ended 30
June 2020 (30 June 2019: loss of $629,137).
The impact of expected credit losses on other receivables is immaterial.
37
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
41
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 10. Current assets - trade and other receivables (continued)
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Consolidated
Not overdue
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Expected credit loss rate
2020
%
2019
%
Carrying amount
2019
$
2020
$
-
1.00%
15.00%
43.20%
-
25,777,435 21,868,224
0.73% 15,312,077 18,429,176
1,620,430
944,689
2,630,681
3,213,210
15.00%
40.00%
Allowance for expected
credit losses
2020
$
2019
$
-
153,121
141,703
1,388,666
-
135,450
243,064
1,052,272
Debtors are written off when the cash is no longer considered collectable. The Group has insurance policies over a portion
of long standing debt which limits its credit risk.
Note 11. Current assets - inventories
45,247,411 44,548,511
1,683,490
1,430,786
Raw materials and work in progress - at cost
Finished goods - at cost
Note 12. Current assets - other
Prepayments
Deferred expenses
Other deposits
Note 13. 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
38
Consolidated
2020
$
2019
$
3,202,586
3,210,126
35,006,866 33,999,024
38,209,452 37,209,150
Consolidated
2020
$
2019
$
677,158
317,100
136,144
402,889
302,525
136,144
1,130,402
841,558
Consolidated
2020
$
2019
$
855,701
855,701
6,052,389
(766,682)
5,285,707
6,043,487
(600,328)
5,443,159
28,291,312 26,352,099
(4,679,109)
21,697,539 21,672,990
(6,593,773)
27,838,947 27,971,850
For the year ended 30 June 2020
42
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 13. Non-current assets - property, plant and equipment (continued)
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 1 July 2018
Additions
Additions through business combinations (note
37)
Disposals
Exchange differences
Depreciation expense
Balance at 30 June 2019
Additions
Additions through business combinations (note
37)
Disposals
Exchange differences
Transfers in/(out)
Depreciation expense
Freehold
land
$
Buildings
$
Plant and
equipment
$
Plant and
equipment
under
lease
$
Total
$
855,701
-
5,590,540 18,824,014
1,505,878
18,356
-
-
-
-
-
-
-
(165,737)
3,374,439
(58,297)
(90)
(1,972,954)
- 25,270,255
1,524,234
-
-
-
-
-
3,374,439
(58,297)
(90)
(2,138,691)
855,701
-
5,443,159 21,672,990
637,305
8,903
- 27,971,850
1,122,021
475,813
-
-
-
-
-
-
-
-
-
(166,355)
1,455,000
(28,796)
(27,443)
(2,831,719)
(1,596,841)
-
-
-
2,831,719
(890,489)
1,455,000
(28,796)
(27,443)
-
(2,653,685)
Balance at 30 June 2020
855,701
5,285,707 19,280,496
2,417,043 27,838,947
Note 14. Non-current assets - right-of-use assets
Buildings - right-of-use
Less: Accumulated depreciation
Consolidated
2020
$
2019
$
23,465,955
(5,005,597)
18,460,358
-
-
-
The Group leases land and buildings for its offices, warehouses and retail outlets under agreements of between 2 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.
39
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
43
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 14. Non-current assets - right-of-use assets (continued)
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 1 July 2018
Balance at 30 June 2019
Recognised on transition to AASB 16 (note 2)
Additions
Exchange differences
Depreciation expense
Balance at 30 June 2020
Note 15. Non-current assets - intangibles
Goodwill - at cost
Customer relationships - at cost
Less: Accumulated amortisation
Software - at cost
Less: Accumulated amortisation
Product development - at cost
Less: Accumulated amortisation
Buildings -
right-
of-use
$
-
-
20,723,973
2,958,718
(216,736)
(5,005,597)
18,460,358
Consolidated
2020
$
2019
$
27,059,018 25,193,341
2,707,184
(1,808,637)
898,547
1,584,000
(1,232,000)
352,000
1,539,129
(68,000)
1,471,129
185,221
(35,845)
149,376
601,379
-
601,379
149,709
-
149,709
29,578,070 26,296,429
40
For the year ended 30 June 2020
44
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 15. Non-current assets - intangibles (continued)
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 1 July 2018
Additions
Additions through business combinations (note
37)
Amortisation expense
Balance at 30 June 2019
Additions
Additions through business combinations (note
37)
Finalisation of prior period business
combination accounting
Exchange differences
Amortisation expense
Goodwill
$
Customer
relationships Software
$
$
Product
development
$
Total
$
8,303,189
-
880,000
-
-
601,379
-
149,709
9,183,189
751,088
16,890,152
-
-
(528,000)
-
-
-
-
16,890,152
(528,000)
25,193,341
-
352,000
-
601,379
937,750
149,709 26,296,429
973,262
35,512
2,901,014
-
-
-
2,901,014
(744,381)
(290,956)
-
1,123,184
3,323
(579,960)
-
-
(68,000)
-
-
(35,845)
378,803
(287,633)
(683,805)
Balance at 30 June 2020
27,059,018
898,547
1,471,129
149,376 29,578,070
Impairment testing
For the purpose of impairment testing, goodwill is allocated to a group of cash generating units ('CGUs'), which are
expected to benefit from the synergies of the business combinations.
The recoverable amount of the group of CGUs has been determined based on value in use calculations which use cash
flow projections from the financial budgets for the FY2021 financial year as reviewed by the Board.
In preparing the FY2021 budget, due consideration was given to the economic uncertainty associated with COVID-19. The
cash flows beyond the budget period have been extrapolated over a further 4 years. The value-in-use calculations have
been prepared using a compound revenue growth rate of 2% (2019: 3.4%) and terminal growth rate of 2% (2019: 2%). The
post-tax discount rate applied to cash flow projections was 11.0% (2019: 10.5%) which is derived from the Group’s
weighted average cost of capital, adjusted for varying risk profiles, where appropriate.
The key assumptions used in the value in use calculation are based on past experience and the Group’s forecast operating
and financial performance for the CGUs taking into account the current market and economic conditions, risks,
uncertainties and opportunities for improvements.
Management has considered possible changes in the key assumptions used in the value-in-use calculations, and the
following changes, with all other variables held constant, would lead to an impairment loss:
●
●
●
Increase in the discount rate to 11.4%;
Decrease in forecast EBTIDA by 5.0%; and
Decline in terminal growth rate to 1.4%
The Group believes that the assumptions adopted in the value in use calculation reflect an appropriate balance between
the Group’s experience to date and the uncertainty associated with the COVID-19 pandemic. Accordingly, the Group has
concluded that no impairment is required as at 30 June 2020.
41
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
45
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 16. Current liabilities - trade and other payables
Trade payables
Goods and services tax payable
Other payables and accrued expenses
Refer to note 30 for further information on financial instruments.
The goods and services tax payable includes $1,775,800 of allowed payment deferrals.
Note 17. Current liabilities - deferred consideration
Deferred consideration
Refer to note 37 for further information on deferred consideration.
Consolidated
2020
$
2019
$
32,738,564 30,558,269
538,888
5,225,872
2,626,394
3,074,102
38,439,060 36,323,029
Consolidated
2020
$
2019
$
- 16,609,092
This balance represented the deferred consideration payable on the New Zealand acquisition and was settled via the issue
of shares (note 26) and payment of the cash amount in July 2019.
Note 18. Current liabilities - borrowings
Bank overdraft and trade finance
Consolidated
2020
$
2019
$
2,816,267
506,115
Refer to note 22 for further information on assets pledged as security and financing arrangements.
Refer to note 30 for further information on financial instruments.
Note 19. Current liabilities - lease liabilities
Lease liability - existing
Lease liability - new liability on adoption of AASB 16
Refer to note 23 for further information on lease liability financial instruments.
Consolidated
2020
$
2019
$
492,420
4,780,339
901,175
-
5,272,759
901,175
42
For the year ended 30 June 2020
46
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 20. Current liabilities - provisions
Annual leave
Long service leave
Onerous lease
Consolidated
2020
$
2019
$
2,304,775
2,187,051
-
1,925,938
1,898,454
209,741
4,491,826
4,034,133
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 - 2020
Carrying amount at the start of the year
Amounts used
Carrying amount at the end of the year
Note 21. Current liabilities - contingent consideration
Contingent consideration
Onerous
lease
$
209,741
(209,741)
-
Consolidated
2020
$
2019
$
1,424,042
250,000
The provision represents the obligation to pay contingent consideration following the acquisition of a business or assets. It
is measured at the present value of the estimated liability.
Refer to note 25 for further information on contingent consideration.
Note 22. Non-current liabilities - borrowings
Bank bills
Refer to note 30 for further information on financial instruments.
Consolidated
2020
$
2019
$
25,850,000 13,520,000
43
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
47
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 22. Non-current liabilities - borrowings (continued)
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Bank overdraft and trade finance
Bank bills
Assets pledged as security
The bank bills are secured by first mortgages over the Group's assets.
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 23. Non-current liabilities - lease liabilities
Lease liability - existing
Lease liability - new liability on adoption of AASB 16
44
Consolidated
2020
$
2019
$
2,816,267
506,115
25,850,000 13,520,000
28,666,267 14,026,115
Consolidated
2020
$
2019
$
19,170,849 13,306,481
26,000,000 30,000,000
4,000,000
49,070,849 47,306,481
3,900,000
2,816,267
506,115
25,850,000 13,520,000
2,269,223
30,666,440 16,295,338
2,000,173
16,354,582 12,800,366
150,000 16,480,000
1,730,777
18,404,409 31,011,143
1,899,827
Consolidated
2020
$
2019
$
1,507,753
14,743,657
1,368,048
-
16,251,410
1,368,048
For the year ended 30 June 2020
48
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 23. Non-current liabilities - lease liabilities (continued)
The following table details the Group's remaining contractual maturity, both current and non-current, for its lease liabilities:
Lease liability - existing
Lease liability - new liability on
adoption of AASB 16
1 year
or less
$
Between 1
and
2 years
$
Between 2
and
3 years
$
Between 3
and
Between 4
and
Over
4 years
5 years
5 years
$
$
$
Remaining
contractual
maturities
$
579,327
593,344
573,730
421,562
28,754
- 2,196,717
5,372,792
4,862,667
4,080,477
2,486,701
1,534,191
3,037,189
21,374,017
5,952,119 5,456,011 4,654,207 2,908,263 1,562,945 3,037,189 23,570,734
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed.
Note 24. Non-current liabilities - provisions
Long service leave
Note 25. Non-current liabilities - contingent consideration
Contingent consideration
Reconciliation
Reconciliation of the fair values at the beginning and end of the current and previous
financial year, both current and non-current, are set out below:
Opening balance
Additions through business combinations (note 37)
Unwind due to condition not being met
Unwind of discount
Payments made during the year
Exchange differences
Closing balance
Contingent consideration - current
Contingent consideration - non-current
Consolidated
2020
$
2019
$
646,714
500,606
Consolidated
2020
$
2019
$
2,230,120
3,365,756
3,615,756
600,000
(380,808)
141,451
(250,000)
(72,237)
-
3,615,756
-
-
-
-
3,654,162
3,615,756
1,424,042
2,230,120
250,000
3,365,756
3,654,162
3,615,756
45
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
49
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 25. Non-current liabilities - contingent consideration (continued)
Fair value measurement
The below table gives information about how the level 3 fair values measurement of the contingent considerations that are
disclosed above and in note 37 are determined (in particular, the valuation technique and inputs used).
Type
Valuation technique
Significant
observable inputs
Relationship and sensitivity of
unobservable inputs to value
Contingent
consideration through
business combinations
The valuation model considers the
present value of the expected
payments which are determined
considering the possible scenarios
of forecast EBITDA.
Forecast EBITDA
Risk adjusted discount
rate
The higher the discount rate, the
lower the fair value
The higher the amount of EBITDA,
the higher the fair value
Note 26. Equity - issued capital
Consolidated
2020
Shares
2019
Shares
2020
$
2019
$
Ordinary shares - fully paid
62,468,912 54,859,219 69,286,174 61,325,301
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
Issue of shares as purchase consideration for The
Midland Timber Co
Issue of shares under a placement to investors and
senior management
Issue of shares under share purchase plan
Transaction costs arising on share issue, net of tax
Balance
Issue of shares
Issue of shares as part consideration to the vendors
of Plytech International Limited and Decortech
Limited
Transaction costs arising on share issue, net of tax
1 July 2018
53,043,949
59,522,743
2 May 2019
244,702
$1.23
300,000
8 May 2019
31 May 2019
1,336,428
234,140
$1.05
$1.05
1,403,249
245,847
(146,538)
30 June 2019
11 July 2019
54,859,219
5,806,429
61,325,301
6,096,750
$1.05
12 July 2019
1,803,264
$1.05
1,893,427
(29,304)
Balance
30 June 2020
62,468,912
69,286,174
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.
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.
46
For the year ended 30 June 2020
50
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 26. Equity - issued capital (continued)
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 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.
The capital risk management policy remains unchanged from the 30 June 2019 Annual Report.
Note 27. Equity - foreign currency translation reserve
Foreign currency translation reserve
Consolidated
2020
$
2019
$
(350,252)
1,764
Foreign currency translation reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars.
Note 28. Equity - retained profits
Retained profits/(accumulated losses) at the beginning of the financial year
Adjustment for change in accounting policy (note 2)
Accumulated losses at the beginning of the financial year - restated
Profit after income tax expense for the year
Dividends paid (note 29)
Retained profits at the end of the financial year
Note 29. Equity - dividends
Dividends
Dividends paid during the financial year were as follows:
Final dividend of 2.2 cents per fully paid ordinary share paid on 4 October 2019 (2019: 3.5
cents paid on 2 October 2018)
Interim dividend of 2.2 cents per fully paid ordinary share paid on 4 April 2019
Consolidated
2020
$
2019
$
206,945
(480,568)
(626,263)
-
(273,623)
4,444,257
(1,374,316)
(626,263)
3,856,713
(3,023,505)
2,796,318
206,945
Consolidated
2020
$
2019
$
1,374,316
-
1,856,538
1,166,967
1,374,316
3,023,505
On 25 August 2020, the directors determined a fully franked dividend of 2.4 cents per fully paid ordinary share to be paid
on 6 October 2020.
47
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
51
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 29. Equity - dividends (continued)
Franking credits
Consolidated
2020
$
2019
$
Franking credits available at the reporting date based on a tax rate of 30%
Franking credits that will arise from the payment/(refund) of the amount of the provision for
income tax at the reporting date based on a tax rate of 30%
20,743,642 20,622,310
582,231
(15,736)
Franking credits available for subsequent financial years based on a tax rate of 30%
21,325,873 20,606,574
Note 30. 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 risk and ageing analysis for credit 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 bank bills outstanding:
Consolidated
Bank bills
2020
2019
Weighted
average
interest rate
%
Weighted
average
interest rate
%
Balance
$
Balance
$
3.25% 25,850,000
4.45% 13,520,000
Net exposure to cash flow interest rate risk
25,850,000
13,520,000
An analysis by remaining contractual maturities is shown in 'liquidity and interest rate risk management' below.
48
For the year ended 30 June 2020
52
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 30. Financial instruments (continued)
For the Group the bank bills outstanding, totalling $25,850,000 (2019: $13,520,000), are interest only loans. Monthly cash
outlays of approximately $70,010 (2019: $50,137) per month are required to service the interest payments. An official
increase/decrease in interest rates of 100 (2019: 100) basis points would have an adverse/favourable effect on profit
before tax of the following:
Consolidated - 2020
Basis points
change
profit before
tax
Effect on
equity
Basis points
change
profit before
tax
Effect on
equity
Basis points increase
Effect on
Basis points decrease
Effect on
Bank bills
(100)
(258,500)
(180,950)
100
258,500
180,950
Consolidated - 2019
Basis points
change
profit before
tax
Effect on
equity
Basis points
change
profit before
tax
Effect on
equity
Basis points increase
Effect on
Basis points decrease
Effect on
Bank bills
(100)
(135,200)
(94,640)
100
135,200
94,640
The percentage change is based on the expected volatility of interest rates using market data and analysts' forecasts. No
principal repayments are due during the year ending 30 June 2020 or 30 June 2019.
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 adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables
through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered
representative across all customers of the Group based on recent sales experience, historical collection rates and forward-
looking information that is available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year.
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.
49
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
53
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 30. Financial instruments (continued)
Financing arrangements
Unused borrowing facilities at the reporting date:
Bank overdraft and trade finance
Bank bills
Asset finance
Consolidated
2020
$
2019
$
16,354,582 12,800,366
150,000 16,480,000
1,730,777
18,404,409 31,011,143
1,899,827
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.
Consolidated - 2020
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing - variable
Bank overdraft
Bank bills
Total non-derivatives
Consolidated - 2019
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing - variable
Bank overdraft
Bank bills
Interest-bearing - fixed rate
Lease liability
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
-
32,738,564
3,074,102
-
-
-
3.25%
2,816,267
-
840,125 26,480,094
39,469,058 26,480,094
-
-
-
-
-
- 32,738,564
3,074,102
-
-
2,816,267
- 27,320,219
- 65,949,152
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
-
30,558,269
3,456,339
-
-
-
-
- 30,558,269
3,456,339
-
-
4.45%
506,115
601,640
-
-
601,640 13,971,642
506,115
-
- 15,174,922
5.31%
991,051
36,113,414
553,572
933,906
1,155,212 14,905,548
-
2,478,529
- 52,174,174
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
50
For the year ended 30 June 2020
54
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 30. Financial instruments (continued)
AASB 16 was adopted using the modified retrospective approach and comparatives have not been restated. As a result,
remaining contractual maturities for leases in the current year are now disclosed in non-current liabilities - lease liabilities
(refer to note 23).
Note 31. 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
Note 32. Remuneration of auditors
Consolidated
2020
$
2019
$
1,255,880
90,912
52,707
1,388,105
104,820
10,552
1,399,499
1,503,477
During the financial year the following fees were paid or payable for services provided by Deloitte Touche Tohmatsu, the
auditor of the Company:
Audit services - Deloitte Touche Tohmatsu
Audit or review of the financial statements
Other services - Deloitte Touche Tohmatsu
Taxation
Note 33. Contingent liabilities
Consolidated
2020
$
2019
$
198,600
187,026
29,550
18,000
228,150
205,026
The Group has given bank guarantees as at 30 June 2020 of $2,353,231 (2019: $742,975) to various landlords.
51
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
55
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 34. 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
Consolidated
2019
$
4,814,762
12,096,995
3,472,289
20,384,046
991,051
1,487,478
2,478,529
(209,306)
2,269,223
AASB 16 was adopted using the modified retrospective method meaning comparatives have not been restated. Current
year leases are disclosed on the face of the statement of financial position. Comparative leases are disclosed above and
not on the statement of financial position.
Note 35. Related party transactions
Parent entity
Big River Industries Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 38.
Key management personnel
Disclosures relating to key management personnel are set out in note 31 and the remuneration report included in the
directors' report.
Transactions with related parties
During the financial year, the Company paid $50,000 (2019: $nil) to Anacacia Capital Pty Ltd, a director related entity and
substantial shareholder, as an advisory fee.
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.
52
For the year ended 30 June 2020
56
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 36. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit after income tax
Other comprehensive income for the year, net of tax
Total comprehensive income
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
2020
$
2019
$
1,872,041
3,023,505
-
-
1,872,041
3,023,505
Parent
2020
$
2019
$
44,417,962 30,710,926
48,398,648 41,317,086
92,816,610 72,028,012
-
-
25,850,000 13,520,000
25,850,000 13,520,000
66,966,610 58,508,012
69,286,174 61,325,301
(2,817,289)
(2,319,564)
66,966,610 58,508,012
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 39) under which it guarantees the debts of its
subsidiaries as at 30 June 2020 and 30 June 2019.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2020 and 30 June 2019.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2020 and 30 June 2019.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for
investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
53
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
57
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 37. Business combinations
2020
Big Hammer Building Supplies, Townsville QLD
On 5 July 2019, the Group executed a business purchase deed to acquire the business and assets of Big Hammer
Building Supplies, a business located in Townsville, Queensland. The purchase price was $1,974,445 which includes the
acquisition of inventory and plant and equipment and was settled through the payment of $1,774,445 in cash. An amount
of $200,000 is payable as cash or through the issue of ordinary shares in Big River Industries Limited, at the Group's
discretion, upon achieving agreed EBITDA targets over a two year period. As this acquisition combined the operations of
an existing business with that of Big Hammer Building Supplies it is not practical to separate the revenue or net profit after
tax of the individual businesses after the acquisition. The values identified in relation to the acquisition are final as at 30
June 2020.
Pine Design Truss and Timber, Adelaide SA
On 17 February 2020, the Group executed a business purchase deed to acquire the trading business and assets of Pine
Design Truss and Timber located in Adelaide, South Australia. The purchase price is $3,498,331 which includes the
acquisition of inventory and plant and equipment. $3,098,331 is payable at completion with the balance of $400,000
payable upon achieving agreed EBITDA targets over a two year period. The acquisition contributed $4,830,000 to revenue
and $84,000 to net profit after tax of the Group for the year ended 30 June 2020. Revenue and net profit after tax for the
Group for the year ended 30 June 2020 would have been $258,224,142 and $4,577,432 respectively, had the Group
acquired Pine Design Truss and Timber at the beginning of the financial year. The values identified in relation to the
acquisition are provisional as at 30 June 2020.
Details of the acquisitions are as follows:
Cash and cash equivalents
Inventories
Plant and equipment
Deferred tax asset
Employee benefits
Net assets acquired
Goodwill
Big Hammer Pine Design
Building
Supplies
Fair value
Truss and
Timber
Fair value
$
$
Total
$
500
435,787
220,000
12,343
(41,143)
-
962,794
1,235,000
108,651
(362,170)
500
1,398,581
1,455,000
120,994
(403,313)
627,487
1,346,958
1,944,275
1,554,056
2,571,762
2,901,014
Acquisition-date fair value of the total consideration transferred
1,974,445
3,498,331
5,472,776
Representing:
Cash paid or payable to vendor
Contingent consideration
1,774,445
200,000
3,098,331
400,000
4,872,776
600,000
1,974,445
3,498,331
5,472,776
Acquisition costs expensed to profit or loss
328,886
260,596
589,482
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Less: cash and cash equivalents
Less: contingent consideration
Net cash used
1,974,445
(500)
(200,000)
3,498,331
-
(400,000)
5,472,776
(500)
(600,000)
1,773,945
3,098,331
4,872,276
54
For the year ended 30 June 2020
58
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 37. Business combinations (continued)
2019
M.B. Prefab
On 15 November 2018, the Group executed a business purchase deed to acquire the business and assets of M.B. Prefab,
a business located in Breakwater, Victoria. The purchase price was $4,915,112 which includes the acquisition of inventory
and plant and equipment and was settled through the payment of $4,415,112 in cash. An amount of $500,000 is payable
upon achieving an agreed EBITDA target.
The Midland Timber Co ('Midland Timber')
On 26 April 2019, the Group executed a business purchase deed to acquire the business and assets of The Midland
Timber Co, a business located in Bellevue, Western Australia. The purchase price was $2,491,405 which includes the
acquisition of inventory and plant and equipment and was settled through the payment of $2,191,405 in cash and $300,000
in ordinary shares of Big River Industries Limited.
Plytech International Ltd and Decortech Ltd ('New Zealand')
On 1 May 2019, the Group executed a business purchase deed to acquire the business and assets of Plytech International
Ltd and Decortech Ltd, both businesses located in Auckland, New Zealand. The purchase price was NZD$20,636,136
(AUD$19,724,848) which includes the acquisition of inventory and plant and equipment and was settled in July 2019
through the payment of NZD$15,376,432 (AUD$14,697,412) in cash and NZD$2,000,000 (AUD$1,911,680) in ordinary
shares of Big River Industries Limited. An amount of NZD$3,259,704 (AUD$3,115,756) is payable upon achieving agreed
EBITDA targets.
The values identified in relation to the acquisitions are final as at 30 June 2020.
55
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
59
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 37. Business combinations (continued)
Details of the acquisitions are as follows:
M.B. Prefab
Fair value
Midland
Timber
Fair value
New
Zealand
Fair value
$
$
$
Total
$
Cash and cash equivalents
Inventories
Prepayments
Plant and equipment
Deferred tax asset
Trade payables
Employee benefits
Net assets acquired
Goodwill
-
1,042,406
30,924
1,750,384
216,337
(73,284)
(721,125)
1,064
819,599
-
378,758
30,624
-
(102,081)
-
6,497,617
97,972
1,245,297
54,477
(833,194)
(194,562)
1,064
8,359,622
128,896
3,374,439
301,438
(906,478)
(1,017,768)
2,245,642
2,669,470
1,127,964
6,867,607 10,241,213
1,363,441 12,857,241 16,890,152
Acquisition-date fair value of the total consideration
transferred
4,915,112
2,491,405
19,724,848
27,131,365
Representing:
Cash paid or payable to vendor
Big River Industries Limited shares issued to vendor
Big River Industries Limited shares issued to vendor on 12
July 2019
Contingent consideration
4,415,112
-
-
500,000
2,191,405 14,697,412 21,303,929
300,000
300,000
-
-
-
1,911,680
3,115,756
1,911,680
3,615,756
4,915,112
2,491,405 19,724,848 27,131,365
Acquisition costs expensed to profit or loss
213,208
131,113
228,426
572,747
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration
transferred
Less: cash and cash equivalents
Less: contingent consideration
Less: shares issued by Company as part of consideration
Less: shares issued by Company as part of consideration on
12 July 2019*
Less: cash paid on 12 July 2019*
4,915,112
-
(500,000)
-
2,491,405
(1,064)
-
(300,000)
19,724,848
-
(3,115,756)
-
27,131,365
(1,064)
(3,615,756)
(300,000)
-
-
-
-
(1,911,680)
(14,697,412)
(1,911,680)
(14,697,412)
Net cash used
4,415,112
2,190,341
-
6,605,453
*
Included in deferred consideration (refer note 17).
56
For the year ended 30 June 2020
60
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 38. 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 Pty Ltd
Big River Group (NZ) Limited
Plytech International Limited
Decortech Limited
Note 39. Deed of cross guarantee
Principal place of business /
Country of incorporation
Australia
New Zealand
New Zealand
New Zealand
Ownership interest
2019
2020
%
%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
-
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 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.
57
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
61
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 40. Cash flow information
Reconciliation of profit after income tax to net cash from operating activities
Profit after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Net gain on disposal of property, plant and equipment
Foreign exchange differences
Unwinding on contingent consideration
Interest on contingent consideration
Change in operating assets and liabilities:
Increase in trade and other receivables
Decrease in inventories
Increase in income tax refund due
Decrease/(increase) in deferred tax
Decrease in other operating assets
Increase in trade and other payables
Increase/(decrease) in provision for income tax
Increase/(decrease) in other provisions
Consolidated
2020
$
2019
$
4,444,257
3,856,713
8,343,087
(15,693)
(219,167)
(380,808)
141,451
2,666,691
(26,249)
5,825
-
-
(735,040)
398,279
-
(161,883)
-
2,116,031
796,512
200,489
(3,952,930)
525,071
(15,736)
68,125
134,146
1,228,002
(643,622)
(98,388)
Net cash from operating activities
14,927,515
3,747,648
Non-cash investing and financing activities
Additions to the right-of-use assets
Shares issued in relation to business combinations
Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2018
Net cash from/(used in) financing activities
Balance at 30 June 2019
Net cash from/(used in) financing activities
Leases recognised on the adoption of AASB 16
Acquisition of leases
Exchange differences
Consolidated
2020
$
2019
$
2,958,718
1,893,427
4,852,145
-
-
-
Bank
bills
$
Lease
liability
$
Total
$
7,920,000
5,600,000
2,508,191 10,428,191
5,361,032
(238,968)
13,520,000
12,330,000
2,269,223 15,789,223
7,438,480
(4,891,520)
- 21,409,449 21,409,449
2,958,718
-
(221,701)
-
2,958,718
(221,701)
Balance at 30 June 2020
25,850,000 21,524,169 47,374,169
58
For the year ended 30 June 2020
62
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 41. Earnings per share
Consolidated
2020
$
2019
$
Profit after income tax attributable to the owners of Big River Industries Limited
4,444,257
3,856,713
Weighted average number of ordinary shares used in calculating basic earnings per share
62,256,070 53,296,805
Weighted average number of ordinary shares used in calculating diluted earnings per share 62,256,070 53,296,805
Number
Number
Basic earnings per share
Diluted earnings per share
Cents
Cents
7.14
7.14
7.24
7.24
Options over ordinary shares were excluded from the above calculations as they are not dilutive. As at 30 June 2020, the
performance conditions in relation to the performance rights issued during the year were not met and, accordingly, the
performance rights under employee share plans have not been included as dilutive.
Note 42. 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.
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 their options without the prior written approval of the
Board.
59
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
63
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 42. Share-based payments (continued)
Set out below are summaries of options granted under the plan:
2020
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
19/02/2016
13/02/2017
19/02/2021
13/02/2022
$2.00
$2.20
1,185,000
45,455
1,230,455
-
-
-
2019
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
19/02/2016
13/02/2017
19/02/2021
13/02/2022
$2.00
$2.20
1,370,000
45,455
1,415,455
-
-
-
The weighted average share price during the financial year was $1.2155 (2019: $1.3117).
-
-
-
-
-
-
-
-
-
1,185,000
45,455
1,230,455
Expired/
forfeited/
other
Balance at
the end of
the year
(185,000)
-
(185,000)
1,185,000
45,455
1,230,455
The weighted average remaining contractual life of options outstanding at the end of the financial year was 0.68 years
(2019: 1.68 years).
Performance rights
At the 2018 Annual General Meeting, shareholders approved the Big River Industries Limited Rights Plan ('BRIRP') to be
able to grant performance rights to certain key executive management personnel.
Set out below are summaries of performance rights granted under the plan:
2020
Grant date
Expiry date
23/11/2018
28/11/2019
23/11/2023
28/11/2024
2019
Grant date
Expiry date
23/11/2018
23/11/2023
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
341,355
-
341,355
-
677,590
677,590
Balance at
the start of
the year
Granted
Exercised
-
-
341,355
341,355
-
-
-
-
-
-
-
-
341,355
677,590
1,018,945
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
341,355
341,355
The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 4.07
years (2019: 4.40 years).
For the performance rights granted during the current financial year, the valuation model inputs used to determine the fair
value at the grant date, are as follows:
Grant date
Expiry date
Share price Expected
volatility
at grant date
Dividend
yield
Risk-free
interest rate at grant date
Fair value
28/11/2019
28/11/2024
$1.30
35.00%
6.26%
1.26%
$0.000
60
For the year ended 30 June 2020
64
Big River Industries Limited Annual Report 2020
Notes to the Financial Statements
Big River Industries Limited
Notes to the financial statements
30 June 2020
Note 43. Events after the reporting period
The impact of the COVID-19 pandemic is ongoing, and it is not practicable to estimate the potential impact after the
reporting date. The situation is rapidly developing and is dependent on measures imposed by the Australian Government
and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic
stimulus that may be provided.
Apart from the dividend determined as disclosed in note 29, no other matter or circumstance has arisen since 30 June
2020 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.
61
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
65
Directors’ Declaration
Big River Industries Limited
(cid:24)irectors(cid:4) declaration
For the year ended 30 June 2020
30 June 2020
In the directors' opinion:
(cid:84)
(cid:84)
(cid:84)
(cid:84)
(cid:84)
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
2020 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 (cid:31)xtended Closed
Group will be able to meet any obligations or liabilities to which they are, or may become, sub(cid:65)ect by virtue of the deed
of cross guarantee described in note 39 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
(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)
Malcolm Jackman
Chairman
25 August 2020
Sydney
(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)(cid:55)
James Bindon
Managing Director
(cid:8)2
66
Big River Industries Limited Annual Report 2020
Independent Auditor’s Report to the Members of Big River Industries Limited
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
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Big River Industries Limited (the “Company”) and its subsidiaries (the
“Group”) which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity
and the 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)
giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its financial
performance for the year then ended; and
(ii)
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 & Ethical Standards
Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (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 Company, 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 for 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 Asia Pacific Limited and the Deloitte Network.
63
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
67
Independent Auditor’s Report to the Members of Big River Industries Limited
Key Audit Matter
How the scope of our audit responded to the Key
Audit Matter
Carrying value of Goodwill
Our procedures included, but were not limited to:
As at 30 June 2020, the Group’s intangible
assets included $27m of goodwill, of which
$2.9m arose as a result of acquisitions during
the current year as disclosed in Note 37.
Management conducts an annual impairment
test to assess the recoverability of the carrying
value of the intangible assets.
The recoverable amount has been determined
based on a value-in-use model, which
incorporates significant judgment related to the
estimation of future cash flows, short and long
term growth rates and appropriate discount
rate.
The estimation uncertainty increased at the end
of the year as a result of the impact of COVID-
19 on macroeconomic factors underlying the
assumptions used in the value in use model.
• Understand the Group’s processes and relevant
controls related to the preparation of the Value
in Use model.
•
•
•
Assessing the historical accuracy of the Group’s
cash flow by comparing prior year budgets to
actual performance.
Assessing how the Group allowed for the
possible impact of COVID-19 in setting the
budget and selecting assumptions including
short and long term growth rate and
appropriate discount rate.
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 Assessing management’s sensitivity
analysis and performing independent
sensitivity analysis to challenge the key
assumptions.
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 and Managing Director’s Report and
Corporate Details, 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.
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 and Managing Director’s Report and Corporate Details, 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 of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
64
For the year ended 30 June 2020
68
Big River Industries Limited Annual Report 2020
Independent Auditor’s Report to the Members of Big River Industries Limited
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.
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, actions taken to eliminate threats
or safeguards applied.
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.
65
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
69
Independent Auditor’s Report to the Members of Big River Industries Limited
For the year ended 30 June 2020
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 10 to 17 of the Directors’ Report for the
year ended 30 June 2020.
In our opinion, the Remuneration Report of Big River Industries Limited, for the year ended 30 June 2020,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Entity 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, 25 August 2020
66
70
Big River Industries Limited Annual Report 2020
Shareholder Information
Big River Industries Limited
Shareholder information
30 June 2020
The shareholder information set out below was applicable as at 14 August 2020.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
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
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Number
of holders
of ordinary
shares
35
69
30
48
24
206
-
Ordinary shares
% of total
shares
issued
Number held
NATIONAL NOMINEES LIMITED
ANACACIA PARTNERSHIP II LP
PANTHEON GLOBAL CO-INVESTMENT OPPORTUNITIES FUND I I LP
PANTHEON INTERNATIONAL PLC
PANTHEON GLOBAL CO-INVESTMENT OPPORTUNITIES FUND III LP
SAID BUILDING PRODUCTS GROUP PTY LTD
ANACACIA PTY LIMITED (WATTLE FUND)
DENIS WILLIAM JAGGAR & CHRISTINE PAULA JAGGAR (NIKAU POINT)
PAUL HARVEY WEBBER & SUSAN MARGARET WEBBER (CADENZA)
PANTHEON MULTI STRATEGY CO-INVESTMENT PROGRAM 2014
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
PANTHEON ASIA FUND VI LP
MEGAN ANNE BINDON (THE BINDON FAMILY A/C)
SANDHURST TRUSTEES LTD (CYAN C3G FUND A/C)
VESKAY PTY LTD (VESKAY SUPER FUND A/C)
AURELIO JOSEPH SCHORER & SALLIE LOUISE SCHORER (THE JOSALEE FAMILY)
BINDON SUPER PTY LTD (BINDON SUPER A/C)
MR CRAIG ANDREW DORWARD & MRS KATRINA LOUISE DORWARD (DORWARD
FAMILY S/F A/C)
JAMES HIATT & BREE HIATT (THE J & B HIATT SUPER FUND A/C)
MICHELLE MARGARET GLANCY (GLANCY FAMILY)
19,037,476
15,850,001
7,062,056
3,892,055
3,539,834
2,370,693
1,958,295
901,632
901,632
854,139
719,052
501,916
319,048
285,714
253,333
220,232
214,285
178,571
160,000
153,059
30.48
25.37
11.30
6.23
5.67
3.79
3.13
1.44
1.44
1.37
1.15
0.80
0.51
0.46
0.41
0.35
0.34
0.29
0.26
0.25
59,373,023
95.04
67
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
71
Shareholder Information
Big River Industries Limited
Shareholder information
30 June 2020
Unquoted equity securities
Options over ordinary shares issued
Performance rights
Substantial holders
Substantial holders in the Company are set out below:
ANACACIA PARTNERSHIP II LP
NAOS ASSET MANAGEMENT LIMITED
Voting rights
The voting rights attached to ordinary shares are set out below:
Number
on issue
Number
of holders
1,230,455
1,018,945
13
4
Ordinary shares
% of total
shares
issued
Number held
31,700,001
18,573,376
50.75
29.73
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
Expiry date
11 July 2021
Number
of shares
1,127,040
68
For the year ended 30 June 2020
72
Big River Industries Limited Annual Report 2020
Corporate Directory
Big River Industries Limited
Corporate directory
30 June 2020
Directors
James Bernard Bindon
Martin Kaplan
Malcolm Geoffrey Jackman
Vicky Papachristos
Brendan York
Company secretary
Stephen Thomas Parks
Registered office
Share register
Auditor
Solicitors
Trenayr Road
Junction Hill NSW 2460
Tel: 02 6644 0900
Link Market Services Limited
Level 12
680 George Street
Sydney NSW 2000
Tel: 1300 554 474
Deloitte Touche Tohmatsu
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
The directors and management are committed to conducting the business of Big
River Industries Limited in an ethical manner and in accordance with the highest
standards of corporate governance. Big River Industries Limited has adopted and has
substantially complied with
the ASX Corporate Governance Principles and
Recommendations (Third Edition) ('Recommendations') to the extent appropriate to
the size and nature of its operations.
The Corporate Governance Statement, which sets out the corporate governance
practices that were in operation during the financial year and identifies and explains
any Recommendations that have not been followed, which is approved at the same
time as the Annual Report can be found at:
bigriverindustries.com.au/Investors/?page=Corporate-Governance
2
For the year ended 30 June 2020
Big River Industries Limited Annual Report 2020
73
Branch Network
QLD:
Townsville
Sunshine Coast
Brisbane (Meadowbrook)
Brisbane (Hillcrest)
Gold Coast
NSW:
Sydney
Kiama
Grafton (Factory)
Wagga Wagga (Factory)
Head Office
ACT:
Canberra
VIC:
Melbourne
Geelong (Breakwater)
Big Hammer
Cnr Anne and Rendle Streets, Aitkenvale QLD 4814
Phone: (07) 4725 5260 Fax: (07) 4775 4023
Postal: PO Box 7296 Garbutt QLD 4814
10 Main Drive, Warana QLD 4575
Phone: (07) 5439 1000 Fax: (07) 5493 8018
Postal: PO Box 260 Buddina QLD 4575
45 Ellerslie Road, Meadowbrook QLD 4131
Phone: (07) 3451 8300 Fax: (07) 3200 8339
Postal: PO Box 1858 Springwood QLD 4127
Sabdia
22-24 Johnson Road, Hillcrest QLD 4118
Phone: (07) 3800 2255 Fax: (07) 3800 6936
Postal: 22-24 Johnson Road, Hillcrest QLD 4118
Midcoast Timbers
11 Central Drive, Burleigh Heads QLD 4220
Phone: (07) 5522 0624 Fax: (07) 5522 0614
Postal: PO Box 3189 Burleigh Town QLD 4220
89 Kurrajong Avenue, Mt Druitt NSW 2770
Phone: (02) 8822 5555 Fax: (02) 8822 5500
Postal: PO Box 1049 St Marys NSW 2760
113 Shoalhaven Street, Kiama NSW 2533
Phone: (02) 4232 6600 Fax: (02) 4232 6605
Postal: PO Box 430 Kiama NSW 2533
61 Trenayr Road, Junction Hill NSW 2460
Phone: (02) 6644 0900 Fax: (02) 6643 3328
Postal: PO Box 281 Grafton 2460
128 Elizabeth Avenue, Forest Hill NSW 2651
Phone: (02) 6926 7300 Fax: (02) 6922 7824
Postal: PO Box 205 Forest Hill NSW 2651
61 Trenayr Road, Junction Hill NSW 2460
Phone: (02) 6644 0900 Fax: (02) 6643 3328
Postal: PO Box 281 Grafton 2460
Ern Smith Building Supplies
13 Sheppard Street, Hume ACT 2620
Phone: (02) 6260 1366 Fax: (02) 6260 1399
Postal: PO BOX 305 Jerrabomberra NSW 2619
24-32 Discovery Road, Dandenong South VIC 3175
Phone: (03) 9586 6900 Fax: (03) 9587 4501
Postal: PO Box 4388 Dandenong South VIC 3164
MB Prefab
15-17 Leather Street, Breakwater VIC 3219
Phone: (03) 9586 6900 Fax: (03) 9587 4501
Postal: PO Box 4388 Dandenong South VIC 3164
74
Big River Industries Limited Annual Report 2020
Branch Network
SA:
Adelaide (Edinburgh North)
Adelaide (Dry Creek)
WA:
Perth (Welshpool)
Perth (Bellevue)
New Zealand:
Auckland
Our suppliers
Adelaide Timber & Building Supplies
10 Kingstag Crescent, Edinburgh North SA 5113
Phone: (08) 8255 5577 Fax: (08) 8252 2552
Postal: PO Box 18 Edinburgh North SA 5113
Pine Design
142 Cavan Road, Dry Creek SA 5094
Phone: (08) 8203 2933 Fax: (08) 8447 7403
Postal: 142 Cavan Road, Dry Creek SA 5094
255 Treasure Road, Welshpool WA 6106
Phone: (08) 9256 7400 Fax: (08) 9256 7477
Postal: PO Box 183 Welshpool DC WA 6986
Midland Timber
30 Clayton Street, Bellevue WA 6056
Phone: (08) 9274 8077 Fax: (08) 9274 8177
Postal: 30 Clayton Street, Bellevue WA 6056
Plytech
26 Business Parade North, Highbrook Auckland
Phone: +64 9 573 5016 Fax: +64 9 573 5035
Postal: PO Box 204-070 Highbrook Auckland
Decortech
117 Hugo Johnston Drive, Penrose Auckland
Phone: +64 9 579 5726 Fax: +64 9 579 0462
Postal: PO Box 17-091 Greenlane Auckland
Building Australia for over 100 years
www.bigrivergroup.com.au