More annual reports from Big River Industries Limited:
2023 ReportPeers and competitors of Big River Industries Limited:
Big River Industries LimitedBuilding Australia for over 100 years ANNUAL REPORT 2021 Big River Industries Limited ABN 72 609 901 377 Annual Report for the year ended 30 June 2021 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. Contents 4 Directors’ Report 18 Auditor’s Independence Declaration 19 Statement of Profit or Loss and Other Comprehensive Income 20 Statement of Financial Position 21 Statement of Changes in Equity 22 Statement of Cash Flows 23 Notes to the Financial Statements 62 Directors’ Declaration 63 Independent Auditor’s Report to the Members of Big River Industries Limited 67 Shareholder Information 69 Corporate Directory 70 Branch Network Chairman and Managing Director’s Report Operating Highlights Big River achieved solid growth during FY2021, with an improvement in the construction cycle resulting in an increase in the Company’s addressable market for the first time in three years. Revenue $281m 13% EBITDA $22.5m 30% Big River achieved solid growth during FY2021, with an improvement in the construction cycle resulting in an increase in the Company’s addressable market for the first time in three years. This assisted in driving 13% revenue growth to $281m, as did the early contribution from the Timberwood Panels (TWP) acquisition that was completed in late March 2021. Pleasingly, and in spite of COVID-19 disruptions, the growth was broad based across the majority of the Company’s product categories and regions, again highlighting the more favourable industry dynamics. The revenue growth achieved flowed through to considerable improvements in the key underlying profitability measures, with Operating EBITDA increasing 30% to $22.5m, Operating EBIT improving 47% to $13.1m and NPAT (before significant items) increasing 68% on the prior period. Statutory results however, were impacted by the recognition of the pending closure of the Wagga Wagga manufacturing site. Due to the major loss of forest resources in the 2020 summer fires, there is an unsustainable log supply to justify ongoing operations. The $10m Government Bushfire Grants Scheme funding has helped with the implementation of the plywood consolidation strategy. The Grafton manufacturing site will reinvest significantly to increase output and offset the closure of the Wagga Wagga site. The net impact of the project was a $4.5m after tax loss, which contributed to the Company’s statutory NPAT of $1.8m, 59% below the FY2020 result. Strong progress was made in FY2021 on the execution of the business strategy, with continued acquisitions to expand the Company’s network. The purchase of the TWP business now sees the Panels category accounting for 35% of Group revenue. The acquisition comprised three manufacturing and distribution sites and expands the Company’s Panels category, which delivers strong gross margin and product differentiation. The purchase was funded through a capital raise of $20.4m, which received strong support from both existing and new institutional shareholders. The diversity of the supply chain delivered significantly to the revenue growth and the improved gross margin percentage result, despite some significant challenges on supply availability from both local 1 Annual Report 2021 Big River Industries Limited Chairman and Managing Director’s Report and international suppliers. In-house manufacturing, direct importation from both Asia and Europe, and strong local supply partnerships, saw the business manage these supply chain challenges positively. Working capital continued to be tightly managed in FY21, with considerable improvements in receivables management resulting in lower debtor days. Despite increased inventory investment to manage market shortages, net working capital to sales ratio remained within our targeted range at 18%. This also helped deliver a cash conversion rate of 77% that whilst below the result achieved in FY2020, reflected the payment in FY2021 of allowed deferrals of FY2020 tax. Dividends The strong trading results and tight cash management allowed the Board to return dividend payments to within the broad policy range of 50-70% payout of underlying NPAT. The interim dividend of 2.6c per share was complimented by a final determined dividend of 3.0c per share, with both payments being fully franked. Corporate Governance Brendan York, one of the Company’s Non Executive Directors, who had Chaired the Audit & Risk Committee, was deemed no longer Independent following his decision to accept a senior executive role with Naos Asset Management who are a substantial and significant shareholder. ARC & NRC memberships were adjusted to ensure each was chaired by an Independent Director and comprised of a majority of Independent Directors. The company initiated a search to appoint two suitably qualified Non Executive Independent Directors to ensure the Board comprised a majority of Independent Directors. Brad Soller and Martin Monro have joined the Board as Non Executive Directors with Brad soon to assume the role of Chair of the Audit & Risk Committee. Brad has extensive experience in senior executive financial roles in the listed public company environment, and Martin brings the perspective of the client to the Board with a long history in the construction sector at the CEO and public listed company level. 2 Whilst the Board is now comprised of seven Directors it is envisaged that the Board will reduce to fewer Directors in the medium term given natural succession planning. People The year remained a very challenging one for all staff, with ongoing COVID-19 restrictions varying across States and many changes at short notice. Coupled with supply shortages of several key timber products, and major international shipping restrictions, the staff have done an outstanding job to manage all these variables and still deliver considerable growth across the majority of operating regions and product categories. The improved financial results of the Group are a testament to the strong commitment of all staff. The Board would also like to recognise all staff that have worked at the Wagga Wagga plywood manufacturing site, which will cease to operate by the end of 2021. This facility has been in operation for over 60 years at its current location, and the closure caused by the unsustainability of the log resource available is no reflection on the staff. We take this opportunity to thank the many staff who have worked there throughout the years. We wish them well in all their future endeavours. Malcolm Jackman Chairman Jim Bindon Managing Director Big River Industries Limited Annual Report 2021 Financial Report FY21 For the year ended 30 June 2021 Contents 4 Directors’ Report 18 Auditor’s Independence Declaration 19 Statement of Profit or Loss and Other Comprehensive Income 20 Statement of Financial Position 21 Statement of Changes in Equity 22 Statement of Cash Flows 23 Notes to the Financial Statements 62 Directors’ Declaration 63 Independent Auditor’s Report to the Members of Big River Industries Limited 3 Annual Report 2021 Big River Industries Limited Directors’ Report Big River Industries Limited Directors' report 30 June 2021 30 June 2021 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 2021. 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 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 2.4 cents per fully paid ordinary share paid on 6 October 2020 (2020: 2.2 cents paid on 6 October 2019) Interim dividend of 2.6 cents per fully paid ordinary share paid on 21 April 2021 Group 2021 $ 2020 $ 1,499,254 2,017,489 1,374,316 - 3,516,743 1,374,316 On 24 August 2021, the directors determined a fully franked dividend of 3.0 cents per fully paid ordinary share to be paid on 6 October 2021. Review of operations Revenue for the financial year ended 30 June 2021 was $281.4 million, up 13% from $248.9 million the previous financial year. This included three months of revenue contribution from the Timberwood acquisition which was completed at the end of March 2021. Strong revenue growth came from New Zealand, Victoria and Western Australia, and it was pleasing to see every region grow their EBITDA contribution. The formwork category was the only area of the business not to grow revenue. Significant exposure to high density unit development and commercial construction, along with international supply chain disruption impacted this category, so the resulting minimal 3% decline in like-for-like revenue was a solid outcome. Excluding the impact of the Wagga Wagga impairment outlined in the significant changes in the state of affairs below, and other significant items, the Company reported a net profit after tax of $7.8 million, up 67% from $4.7 million in the previous corresponding period. Acquisition costs were elevated in FY2021 at $1.3 million. The Timberwood acquisition was largest the Company has executed to date and resulted in higher associated legal, financial, advisory and stamp duty costs related to the capital raise and completion of the transaction. FY2021 also saw the first year in which any share-based remuneration was applicable in accordance with the Long Term Incentive plan adopted by the Board in 2018 resulting in an expense of $0.6m for the full financial year. 4 3 Big River Industries Limited Annual Report 2021 Directors’ Report Big River Industries Limited Directors' report 30 June 2021 30 June 2021 Revenue Operating EBITDA* Depreciation and amortisation Earnings before interest and tax ('EBIT') Interest Net profit before tax ('NPBT') Tax NPAT before significant items Significant items: Wagga Wagga impairment Acquisition costs Contingent consideration Share-based remuneration Tax on above Significant Items (net of tax) NPAT % 13.0% 30.4% 12.8% 46.8% (15.7%) 68.3% 68.2% 68.4% 2021 $'000 2020 $'000 281,382 22,548 (9,415) 13,133 (1,933) 11,200 (3,352) 7,848 (8,902) (1,348) 100 (605) (10,755) 4,723 (6,032) 248,924 17,288 (8,343) 8,945 (2,292) 6,653 (1,993) 4,660 - (740) 381 - (359) 143 (216) 1,816 4,444 * Operating EBITDA is net profit before interest, taxes, depreciation, amortisation, Wagga Wagga impairment, contingent consideration gain/loss, share-based remuneration and acquisition costs. After significant items (net of tax) of $6.0 million are deducted, the statutory net profit after tax for the financial year is $1.8 million. The Wagga Wagga impairment arises from the Company being approved for a $10.0m Government Grant to assist with consolidating its manufacturing operations onto one site based in Grafton NSW and the resulting closure of the Wagga Wagga NSW site in due course. Operating EBITDA of $22.5 million (prior to significant items) was up 30% on the previous financial year assisted by the acquisition of Timberwood on 29 March 2021. Novel Coronavirus (COVID-19) The outbreak of Novel Coronavirus (‘COVID-19’) had no material impact on the Company’s operations for the financial year and the Group was not entitled to any government support. Significant changes in the state of affairs On 3 November 2020, the Company announced that it had been approved for a Government Grant totalling $10.0 million under the NSW Governments Bushfire Industry Recovery Package – Sector Development Grants. The Government Grant will support a consolidation of the Company’s current manufacturing operations onto one site at Grafton NSW which will result in the closure of the Wagga Wagga NSW site. $7.7 million of the government grant has been offset against associated expenses and presented on a net basis. As part of the site consolidation involves capital expenditure of circa $6.0m on expansion of the Grafton NSW site, the remaining $2.3 million of the government grant will be recognised over the life of those assets as they are acquired. As a result, the Company has booked a net impairment of the operations at Wagga Wagga NSW of $4.5 million net of tax and the associated government grant. It is expected that the gradual closure and sale of assets, once complete, will have generated a cash surplus of circa $9.5 million after receipt of the Government Grant, utilisation of an expected future tax benefit from the impaired assets, release of working capital less the payment of cash closure costs, and the additional capital investment expansion at Grafton NSW. 4 5 Annual Report 2021 Big River Industries Limited Directors’ Report Big River Industries Limited Directors' report 30 June 2021 30 June 2021 On 7 December 2020, the Group executed a business purchase deed to acquire the business and assets of Timberwood Panels Pty Ltd ('Timberwood'), a business with branches located in Victoria and the Australian Capital Territory. Completion was effective from 29 March 2021 and the maximum purchase price of $30.1 million, which includes inventory, and plant and equipment, was settled through the payment of $21.0 million in cash, the issue of $4.4 million in ordinary shares of Big River Industries Ltd, with the balance payable upon achieving agreed EBITDA targets over a three year period. On 15 December 2020, the Company issued 10.6 million ordinary shares at an issue price of $1.35 per share to part fund the acquisition of Timberwood. On 12 March 2021, the Company issued 4.5 million ordinary shares at an issue price of $1.35 per share to part fund the acquisition of Timberwood. On 29 March 2021, the Company issued 3.0 million ordinary shares to the vendor of Timberwood at a value of $1.50 per share on completion of the acquisition of Timberwood. 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 On 24 August 2021, the Group executed a business purchase deed to acquire the business and assets of Revolution Wood Panels Pty Ltd, a business located in the Brisbane suburb of Brendale, QLD. The acquisition is subject to certain pre-conditions being met and is expected to complete in early October 2021. Consideration for the transaction includes a payment of $6.0 million in cash, the issue of $1.0 million in ordinary shares of the Company, and a maximum of $1.0 million in earnout payments over a two-year period, subject to certain profitability targets being met. 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 discussed above, no other matter or circumstance has arisen since 30 June 2021 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. 6 5 Big River Industries Limited Annual Report 2021 Directors’ Report Big River Industries Limited Directors' report 30 June 2021 30 June 2021 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. None Other current directorships: Former directorships (last 3 years): None None Special responsibilities: 533,333 ordinary shares (indirectly) Interests in shares: None 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) Chair of the Board and Member of the Nomination and Remuneration Committee and the Audit and Risk Committee 120,166 ordinary shares (indirectly) None Martin Kaplan Non-Executive Director Martin holds a Bachelor of Commerce degree from the University of Cape Town and previously qualified as 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) Member of the Nomination and Remuneration Committee and the Audit and Risk Committee Martin is an Investment Director of Anacacia Capital Pty Ltd which manages the interests of Anacacia Partnership II, L.P., a substantial shareholder of the Company. Martin does not have a relevant interest in those shares for the purposes of the Corporations Act 2001. None Other current directorships: Former directorships (last 3 years): None Special responsibilities: Interests in shares: Interests in options: Name: Title: Qualifications: Experience and expertise: Other current directorships: Former directorships (last 3 years): None Special responsibilities: Interests in shares: Interests in options: 6 7 Annual Report 2021 Big River Industries Limited Directors’ Report Big River Industries Limited Directors' report 30 June 2021 30 June 2021 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 Limited, Non-Executive Director of GMHBA Limited and Non-Executive Director of Scale Investors Limited Former directorships (last 3 years): None Special responsibilities: Interests in shares: Interests in options: Chair of the Nomination and Remuneration Committee and Chair of the Audit and Risk Committee 31,047 ordinary shares (indirectly) None Experience and expertise: Name: Title: Qualifications: Brendan York Non-Executive Director Brendan is a Chartered Accountant and has a Bachelor of Business Administration and a Bachelor of Commerce from Macquarie University. Brendan has been a Non-Executive Director of the Company since October 2019. He is currently a portfolio manager of Naos Asset Management Limited. Brendan was previously the Chief Financial Officer of ASX Listed Enero Group Ltd. None Other current directorships: Former directorships (last 3 years): None Special responsibilities: Member of the Nomination and Remuneration Committee and the Audit and Risk Committee None None Interests in shares: Interests in options: '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. 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. 8 7 Big River Industries Limited Annual Report 2021 Directors’ Report Big River Industries Limited Directors' report 30 June 2021 30 June 2021 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 2021, 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 15 15 15 15 15 15 15 15 15 15 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 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 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. 8 9 Annual Report 2021 Big River Industries Limited Directors’ Report Big River Industries Limited Directors' report 30 June 2021 30 June 2021 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. 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. 10 9 Big River Industries Limited Annual Report 2021 Directors’ Report Big River Industries Limited Directors' report 30 June 2021 30 June 2021 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 meeting the Board approved Annual Budget for operating EBITDA, and in the event of a senior executive leaving during a financial year, any STI payable is at the discretion of the Nomination and Remuneration Committee. 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 2021, the Group did not engage remuneration consultants. Voting and comments made at the Company's 2020 Annual General Meeting ('AGM') At the 28 October 2020 AGM, 99.86% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2020. 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. Short-term benefits Post- employment benefits Long-term benefits Share- based payments 2021 Non-Executive Directors: M Kaplan* M Jackman V Papachristos B York Executive Directors: J Bindon Other Key Management Personnel: S Parks J Lorente Cash salary and fees $ Cash bonus $ Non- Leave monetary annuation benefits Super- $ $ $ Total remuner- ation $ Perform- ance rights** $ Total statutory disclosure $ - 91,324 63,927 63,927 - - - - - - - - - 8,676 6,073 6,073 - - - - - 100,000 70,000 70,000 - - - - - 100,000 70,000 70,000 443,369 199,750 - 25,000 16,855 684,974 269,107 954,081 333,792 333,816 1,330,155 111,600 111,600 422,950 - - - 25,000 25,000 95,822 10,067 8,292 480,459 478,708 35,214 1,884,141 598,244 117,785 117,785 596,493 504,677 2,388,818 * ** M Kaplan waived his director's fees (including any committee fee to which he is entitled) during the financial year ended 30 June 2021. The value of the performance rights was determined as the face value of the performance rights at the grant date. The value disclosed is the portion of the fair value of the rights recognised as an expense in the reporting period. At the date of this report no performance rights have vested and the actual value is nil. 10 11 Annual Report 2021 Big River Industries Limited Directors’ Report Big River Industries Limited Directors' report 30 June 2021 30 June 2021 'Long-term benefits' represent movements in accrued long service leave and annual leave entitlements. Total remuneration paid to non-executive directors for the year ending 30 June 2021 amounted to $240,000 (30 June 2020: $211,422) which is 48.0% (30 June 2020: 42.2%) of the non-executive directors aggregate. Short-term benefits Post- employment benefits Long-term benefits Cash salary and fees $ Cash bonus $ Non- Leave monetary annuation benefits Super- $ $ $ Share- based payments Perform- ance rights $ Total remuner- ation $ Total statutory disclosure $ 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 - - - - - 9,615 - 92,788 67,307 41,712 - 24,038 16,564 463,583 - 463,583 - - - 24,139 24,393 90,912 361,731 19,484 16,659 362,763 52,707 1,399,499 361,731 - - 362,763 - 1,399,499 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 * M Kaplan waived his director's fees (including any committee fee to which he is entitled) during the financial year ended 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. 'Long-term benefits' represent movements in accrued long service leave and annual 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: S Parks J Lorente Fixed remuneration 2020 2021 At risk - STI At risk - LTI 2021 2020 2021 2020 51% 100% 21% 62% 62% 100% 100% 18% 18% - - - 28% 20% 20% - - - 12 11 Big River Industries Limited Annual Report 2021 Directors’ Report Big River Industries Limited Directors' report 30 June 2021 30 June 2021 The proportion of the cash bonus paid/payable or forfeited is as follows: Name Executive Directors: J Bindon Other Key Management Personnel: S Parks J Lorente Maximum STI Actual STI Cash bonus paid/payable $ $ 2021 2020 Cash bonus forfeited 2020 2021 211,500 199,750 94% 122,400 122,400 111,600 111,600 91% 91% - - - 6% 100% 9% 9% 100% 100% 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. Either Jim or the Company may terminate the employment contract by giving 6 months' written notice to the other party. A Short Term Incentive ('STI') is payable up to 45% of TFEC subject to the achievement of financial hurdles, principally relating to EBITDA performance, and for the achievement of personal business objectives. 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. 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. A Short Term Incentive ('STI') is payable up to 34% of TFEC subject to the achievement of financial hurdles, principally relating to EBITDA performance, and for the achievement of personal business objectives. 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. Either John or the Company may terminate the employment contract by giving 3 months' written notice to the other party. A Short Term Incentive ('STI') is payable up to 34% of TFEC subject to the achievement of financial hurdles, principally relating to EBITDA performance, and for the achievement of personal business objectives. 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 2021. 12 13 Annual Report 2021 Big River Industries Limited Directors’ Report Big River Industries Limited Directors' report 30 June 2021 30 June 2021 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 2021. There were no options over ordinary shares granted to or vested by directors and other key management personnel as part of compensation during the year ended 30 June 2021. 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 222,787 1 December 2020 65,745 23 November 2018 134,435 28 November 2019 97,511 1 December 2020 72,107 23 November 2018 134,435 28 November 2019 97,511 1 December 2020 30 June 2021 30 June 2022 30 June 2023 30 June 2021 30 June 2022 30 June 2023 30 June 2021 30 June 2022 30 June 2023 23 November 2023 28 November 2024 1 December 2025 23 November 2023 28 November 2024 1 December 2025 23 November 2023 28 November 2024 1 December 2025 $1.611 $1.076 $1.312 $1.611 $1.076 $1.312 $1.611 $1.076 $1.312 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 2021 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 2021 year 2020 year 2021 year 2020 222,787 97,511 97,511 307,147 134,435 134,435 - - - - - - Additional information The earnings of the Group for the four years to 30 June 2021 are summarised below: Sales revenue Operating EBITDA Profit/(loss) after income tax (pre-significant items) 281,381,909 248,827,815 217,689,464 210,756,310 9,819,789 10,980,548 22,548,515 17,288,566 5,388,971 4,358,013 4,660,367 7,848,223 2021 $ 2020 $ 2019 $ 2018 $ 14 13 Big River Industries Limited Annual Report 2021 Directors’ Report Big River Industries Limited Directors' report 30 June 2021 30 June 2021 The factors that are considered to affect total shareholders return ('TSR') are summarised below: 2021 2020 2019 2018 Earnings per share pre-significant items (cents per share) 11.15 7.49 8.18 10.19 Additional disclosures relating to key management personnel Shareholding The number of shares in the Company held during the financial year by each director and other members of key management personnel of the Group, including their personally related parties, is set out below: Balance at Received as part of the start of the year remuneration Additions Disposals/ other Balance at the end of the year Ordinary shares M Kaplan M Jackman V Papachristos B York J Bindon S Parks J Lorente - 116,112 30,000 - 533,333 320,000 36,588 1,036,033 - - - - - - - - - 4,054 1,047 - - - - 5,101 - - - - - - - - - 120,166 31,047 - 533,333 320,000 36,588 1,041,134 * 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 461,171 200,180 206,542 867,893 222,787 97,511 97,511 417,809 - - - - - - - - 683,958 297,691 304,053 1,285,702 This concludes the remuneration report, which has been audited. Shares under option There were no unissued ordinary shares of Big River Industries Limited under option outstanding at the date of this report. 14 15 Annual Report 2021 Big River Industries Limited Directors’ Report Big River Industries Limited Directors' report 30 June 2021 30 June 2021 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 1 December 2020 Expiry date 23 November 2023 28 November 2024 1 December 2025 Number under rights 341,355 677,590 541,662 1,560,607 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 2021 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 2021 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 29 to the financial statements. The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are of the opinion that the services as disclosed in note 29 to the financial statements do not compromise the external auditor's independence requirements of the Corporations Act 2001 for the following reasons: ● all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants (including Independence Standards) issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards. 15 ● 16 Big River Industries Limited Annual Report 2021 Directors’ Report Big River Industries Limited Directors' report 30 June 2021 30 June 2021 Officers of the Company who are former partners of Deloitte Touche Tohmatsu There are no officers of the Company who are former partners of Deloitte Touche Tohmatsu. Auditor's independence declaration A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report. Auditor Deloitte Touche Tohmatsu continues in office in accordance with section 327 of the Corporations Act 2001. This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001. On behalf of the directors ___________________________ Malcolm Jackman Chairman 24 August 2021 Sydney ___________________________ James Bindon Managing Director 16 17 Annual Report 2021 Big River Industries Limited Auditor’s Independence Declaration 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 Limited Trenayr Road Junction Hill NSW 2460 24 August 2021 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 Limited for the financial year ended 30 June 2021, 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 David Haynes Partner Chartered Accountants Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte Network. 17 18 Big River Industries Limited Annual Report 2021 Statement of Profit or Loss and Other Comprehensive Income Big River Industries Limited Consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2021 For the year ended 30 June 2021 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 Impairment of assets and restructuring costs Finance costs Profit before income tax (expense)/benefit Group Note 2021 $ 2020 $ 5 6 7 7 7 11 8 7 281,381,909 248,924,142 233,935 396,501 (199,254,023) (177,340,696) (6,135,202) (35,741,227) (4,789,320) (7,114,814) (739,501) (8,343,087) (530,010) - (2,292,120) (6,459,195) (40,764,482) (4,635,285) (7,339,884) (1,347,628) (9,415,244) (1,119,101) (8,902,188) (1,933,327) 445,487 6,294,666 Income tax (expense)/benefit 9 1,370,816 (1,850,409) Profit after income tax (expense)/benefit for the year attributable to the owners of Big River Industries Limited 25 1,816,303 4,444,257 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 (68,613) (352,016) (68,613) (352,016) 1,747,690 4,092,241 Cents Cents Basic earnings per share Diluted earnings per share 37 37 2.58 2.58 7.14 7.14 The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes 18 19 Annual Report 2021 Big River Industries Limited Statement of Financial Position Big River Industries Limited Consolidated statement of financial position as at 30 June 2021 As at 30 June 2021 Assets Current assets Cash and cash equivalents Trade and other receivables Inventories Other assets 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 Borrowings Lease liabilities Income tax Provisions Contingent consideration Other Total current liabilities Non-current liabilities Borrowings Lease liabilities Provisions Contingent consideration Total non-current liabilities Total liabilities Net assets Equity Issued capital Reserves Retained profits Total equity Group Note 2021 $ 2020 $ 10 11 12 13 14 15 16 9 17 18 19 9 20 21 22 18 19 20 21 7,850,824 53,965,125 54,143,241 1,585,349 117,544,539 8,712,184 43,563,921 38,209,452 1,130,402 91,615,959 20,829,032 22,510,409 43,809,425 5,075,945 92,224,811 27,838,947 18,460,358 29,578,070 2,524,446 78,401,821 209,769,350 170,017,780 41,227,756 1,404,374 7,150,470 997,660 9,218,951 1,970,114 2,324,000 64,293,325 38,439,060 2,816,267 5,272,759 863,342 4,491,826 1,424,042 - 53,307,296 26,000,000 18,635,575 959,896 5,190,150 50,785,621 25,850,000 16,251,410 646,714 2,230,120 44,978,244 115,078,946 98,285,540 94,690,404 71,732,240 23 24 25 93,408,747 185,779 1,095,878 69,286,174 (350,252) 2,796,318 94,690,404 71,732,240 The above statement of financial position should be read in conjunction with the accompanying notes 19 20 Big River Industries Limited Annual Report 2021 Statement of Changes in Equity Big River Industries Limited Consolidated statement of changes in equity for the year ended 30 June 2021 For the year ended 30 June 2021 Group Foreign currency translation reserve $ Share-based payments reserve $ Retained profits $ Issued capital $ Total equity $ Balance at 1 July 2019 61,325,301 1,764 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 23) Dividends paid (note 26) - - - - (352,016) (352,016) 7,960,873 - - - Balance at 30 June 2020 69,286,174 (350,252) - - - - - - - (273,623) 61,053,442 4,444,257 4,444,257 - (352,016) 4,444,257 4,092,241 - (1,374,316) 7,960,873 (1,374,316) 2,796,318 71,732,240 Group Foreign currency translation reserve $ Share-based payments reserve $ Retained profits $ Issued capital $ Total equity $ Balance at 1 July 2020 69,286,174 (350,252) - - - - (68,613) (68,613) - - - - 2,796,318 71,732,240 1,816,303 1,816,303 - (68,613) 1,816,303 1,747,690 Profit after income tax benefit 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 23) Share-based payments (note 38) Dividends paid (note 26) 24,122,573 - - - - - - 604,644 - - - (3,516,743) 24,122,573 604,644 (3,516,743) Balance at 30 June 2021 93,408,747 (418,865) 604,644 1,095,878 94,690,404 The above statement of changes in equity should be read in conjunction with the accompanying notes 20 21 Annual Report 2021 Big River Industries Limited Statement of Cash Flows Big River Industries Limited Consolidated statement of cash flows for the year ended 30 June 2021 For the year ended 30 June 2021 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 Net cash from operating activities 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 Net lease repayments Dividends paid Net cash from financing activities Net increase 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 Group Note 2021 $ 2020 $ 305,582,193 274,592,437 (290,973,823) (256,712,686) 14,608,370 4,000,000 (1,719,307) (2,741,862) 17,879,751 477,135 (2,150,669) (1,278,702) 36 14,147,201 14,927,515 33 (21,023,379) - (1,253,515) (1,807,131) (384,929) 142,879 (4,872,276) (14,697,412) (250,000) (1,122,021) (973,262) 44,489 (24,326,075) (21,870,482) 20,410,001 (1,152,355) 150,000 (5,274,687) (3,408,777) 6,096,750 (41,860) 12,330,000 (4,891,520) (1,374,316) 10,724,182 12,119,054 545,308 5,895,917 5,225 5,176,087 695,983 23,847 21 14 16 23 26 Cash and cash equivalents at the end of the financial year 10 6,446,450 5,895,917 The above statement of cash flows should be read in conjunction with the accompanying notes 21 22 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 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 24 August 2021. 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. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. The following Accounting Standards and Interpretations are most relevant to the Group: AASB 2018-6 Amendments to Australian Accounting Standards - Definition of a Business The Group has adopted AASB 2018-6 from 1 July 2020. The standard applies to annual periods beginning on or after 1 July 2020. This standard amends the definition of a business contained in AASB 3 ‘Business Combinations’ thereby affecting whether a transaction should be accounted for as a business combination or as an asset acquisition. The amendments clarify that to be considered a business, an acquired set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create goods or services to customers, generating investment income or other income from ordinary activities. The amendments provide guidance to assist entities assess whether a substantive process has been acquired; and adds an optional concentration test that permits a simplified assessment of whether an acquired set of activities and assets is not a business. The amendments apply to asset acquisitions and business combinations for which the acquisition date is on or after the first annual reporting period beginning on or after 1 July 2020. It therefore does not affect prior periods. The standard did not have a material impact on the Group’s financial statements. 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. 22 23 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 2. Significant accounting policies (continued) 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 32. Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Big River Industries Limited as at 30 June 2021 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. 24 23 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 2. Significant accounting policies (continued) 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. 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. Government grant Grants from the government are recognised at their fair value when there is reasonable assurance that the grant will be received and that the Group will comply with all attached conditions. Government grants relating to costs are deferred and recognised in profit or loss over the periods necessary to match them with the costs that they are intended to compensate. 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. 24 25 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 2. Significant accounting policies (continued) 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. 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. Stock on hand is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery costs, net of 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. 26 25 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 2. Significant accounting policies (continued) Investments and other financial assets Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless an accounting mismatch is being avoided. Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, its carrying value is written off. Financial assets at amortised cost A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of the financial asset represent contractual cash flows that are solely payments of principal and interest. Impairment of financial assets The Group recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the Group's assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain. Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate. For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is recognised in other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss allowance reduces the asset's carrying value with a corresponding expense through profit or loss. 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. 26 27 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 2. Significant accounting policies (continued) Right-of-use assets 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. 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. 28 27 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 2. Significant accounting policies (continued) 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 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. 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. 28 29 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 2. Significant accounting policies (continued) 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 used to measure fair value are those that are appropriate in the circumstances and which maximise the use of relevant observable inputs and minimise the use of unobservable inputs. Issued capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Dividends Dividends are recognised when declared during the financial year and no longer at the discretion of the Company. Business combinations The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or other assets are acquired. The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss. 30 29 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 2. Significant accounting policies (continued) On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic conditions, the Group's operating or accounting policies and other pertinent conditions in existence at the acquisition-date. Where the business combination is achieved in stages, the Group remeasures its previously held equity interest in the acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is recognised in profit or loss. Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's previously held equity interest in the acquirer. Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value. Earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to the owners of Big River Industries Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year. Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. Goods and Services Tax ('GST') and other similar taxes Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority. 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 2021. The Group has not yet assessed the impact of these new or amended Accounting Standards and Interpretations. 30 31 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 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. 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. 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. During the year, the Group impaired the property, plant and equipment located at Wagga Wagga, NSW. The timing and measurement of the impairment was based on management's estimate and the time frame the plant would remain operational and their assessment of the restructuring costs and realisable value of the Wagga Wagga property, plant and equipment. 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. 32 31 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 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 2021 $ 2020 $ Geographical non-current assets 2021 $ 2020 $ 254,349,389 223,841,605 66,414,729 53,975,703 27,032,520 24,986,210 20,289,693 21,901,672 281,381,909 248,827,815 86,704,422 75,877,375 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%). There is no single customer with 10% or more of revenue. The geographical non-current assets above are exclusive of deferred tax assets. Note 5. Revenue Revenue from contracts with customers Sale of goods Other revenue Other revenue Revenue Group 2021 $ 2020 $ 281,381,909 248,827,815 - 96,327 281,381,909 248,924,142 Disaggregation of revenue Disaggregation of revenue is 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 Remeasurement of contingent consideration* Other income Group 2021 $ 2020 $ 133,935 100,000 15,693 380,808 233,935 396,501 * Remeasurement of contingent consideration represents a portion of acquisition EBITDA earn out requirements not met. 32 33 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 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 Unwind of interest on contingent consideration Finance costs expensed Unrealised foreign exchange loss Unrealised foreign exchange loss Leases Short-term lease payments Superannuation expense Defined contribution superannuation expense Share-based payments expense Share-based payments expense Expenses associated with business combinations Transaction costs 34 33 Group 2021 $ 2020 $ 199,725,818 177,340,696 167,097 2,879,707 5,787,865 166,355 2,487,330 5,005,597 8,834,669 7,659,282 312,289 246,000 22,286 579,960 68,000 35,845 580,575 683,805 9,415,244 8,343,087 1,047,681 671,626 214,020 1,452,534 698,135 141,451 1,933,327 2,292,120 5,237 - - 108,253 2,453,743 2,253,667 604,644 - 1,347,628 739,501 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 8. Impairment of assets and restructuring costs Buildings (note 14) Plant and equipment (note 14) Site restoration cost provision Redundancy costs Stock writedowns Government grant Impairment of assets and restructuring costs (per statement of profit or loss) Tax benefit Net impact after tax Group 2021 $ 2020 $ 1,841,945 10,431,983 1,738,285 2,096,010 469,965 16,578,188 (7,676,000) 8,902,188 (4,420,873) 4,481,315 - - - - - - - - - - On 3 November 2020, the Company announced that it had been approved for a Government Grant totalling $10.0 million under the NSW Governments Bushfire Industry Recovery Package – Sector Development Grants. The Company since executed the appropriate Funding Deed from The Department of Regional NSW. The Government Grant will support a consolidation of the Company’s current manufacturing operations onto one site at Grafton NSW which will result in the closure of the Wagga Wagga NSW site. $7.7 million of the government grant has been offset against associated expenses and presented on a net basis. As part of the site consolidation involves capital expenditure of circa $6.0 million on expansion of the Grafton NSW site, the remaining $2.3 million of the government grant will be recognised over the life of those assets as they are acquired. As a result, the Company has booked a net impairment of the operations at Wagga Wagga NSW of $4.5 million net of tax and the associated government grant. 34 35 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 9. Income tax Income tax expense/(benefit) Current tax Deferred tax - origination and reversal of temporary differences Adjustment recognised for prior periods Aggregate income tax expense/(benefit) Deferred tax included in income tax expense/(benefit) comprises: Decrease/(increase) in deferred tax assets Increase/(decrease) in deferred tax liabilities Group 2021 $ 2020 $ 2,320,981 (4,248,398) 556,601 2,067,040 (224,805) 8,174 (1,370,816) 1,850,409 (5,260,163) 1,011,765 644,500 (869,305) Deferred tax - origination and reversal of temporary differences (4,248,398) (224,805) Numerical reconciliation of income tax expense/(benefit) and tax at the statutory rate Profit before income tax (expense)/benefit Tax at the statutory tax rate of 30% Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Share-based remuneration Unwind of contingent consideration Non-assessable government grant Sundry items Adjustment recognised for prior periods Difference in overseas tax rates Income tax expense/(benefit) Amounts credited directly to equity Deferred tax assets Net deferred tax balance Deferred tax asset (refer breakdown below) Deferred tax liability (refer breakdown below) 445,487 6,294,666 133,646 1,888,400 181,393 (30,000) (2,302,800) 141,384 - - - (8,719) (1,876,377) 556,601 (51,040) 1,879,681 8,174 (37,446) (1,370,816) 1,850,409 Group 2021 $ 2020 $ (312,518) (12,559) Group 2021 $ 2020 $ 13,987,092 (8,911,147) 8,186,466 (5,662,020) Net deferred tax asset (as per statement of financial position) 5,075,945 2,524,446 36 35 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 9. Income tax (continued) Deferred tax asset Deferred tax asset comprises temporary differences attributable to: Allowance for expected credit losses Property, plant and equipment Employee benefits Leases Capital raise expenses Rehabilitation provision Redundancy provision Other provisions and accruals Deferred tax asset Amount expected to be recovered within 12 months Amount expected to be recovered after more than 12 months Movements: Opening balance Credited/(charged) to profit or loss Credited to equity Additions through business combinations (note 33) Introduction of AASB 16 'Leases' Closing balance Group 2021 $ 2020 $ 646,120 2,660,162 1,789,639 6,913,977 267,087 495,900 802,108 412,099 505,047 (127,522) 1,656,647 5,690,251 193,520 - - 268,523 13,987,092 8,186,466 8,995,265 4,991,827 3,911,543 4,274,923 13,987,092 8,186,466 8,186,466 5,260,163 312,518 227,945 - 2,445,584 (644,500) 12,559 120,994 6,251,829 13,987,092 8,186,466 36 37 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 9. Income tax (continued) Deferred tax liability Deferred tax liability comprises temporary differences attributable to: Right-of-use assets Customer relationships Brand 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 Charged/(credited) to profit or loss Additions through business combinations (note 33) Finalisation of prior period business combination Introduction of AASB 16 'Leases' Closing balance Provision for income tax Provision for income tax The provision for income tax includes $200,189 of allowed payment deferrals. Group 2021 $ 2020 $ 6,542,454 1,222,821 780,000 365,872 5,377,961 251,593 - 32,466 8,911,147 5,662,020 2,134,026 6,777,121 1,521,147 4,140,873 8,911,147 5,662,020 5,662,020 1,011,765 2,237,362 - - 105,600 (869,305) - 378,803 6,046,922 8,911,147 5,662,020 Group 2021 $ 2020 $ 997,660 863,342 38 37 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 10. Cash and cash equivalents Current assets 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 11. Trade and other receivables Current assets Trade receivables Less: Allowance for expected credit losses Other receivables Government grant Group 2021 $ 2020 $ 3,341,575 4,509,249 1,557,850 7,154,334 7,850,824 8,712,184 7,850,824 (1,404,374) 8,712,184 (2,816,267) 6,446,450 5,895,917 Group 2021 $ 2020 $ 47,242,657 43,453,313 (1,683,490) 45,088,924 41,769,823 (2,153,733) 2,876,201 6,000,000 1,794,098 - 53,965,125 43,563,921 Allowance for expected credit losses The Group has recognised a loss of $1,119,101 in profit or loss in respect of the expected credit losses for the year ended 30 June 2021 (30 June 2020: loss of $530,010). The impact of expected credit losses on other receivables is immaterial. The ageing of the receivables and allowance for expected credit losses provided for above are as follows: Group Not overdue 0 to 3 months overdue 3 to 6 months overdue Over 6 months overdue Expected credit loss rate 2021 % 2020 % Carrying amount 2020 $ 2021 $ 0.60% 1.00% 20.00% 58.76% - 29,831,781 25,777,435 1.00% 16,553,414 15,312,077 944,689 992,719 3,213,210 2,740,944 15.00% 43.20% Allowance for expected credit losses 2021 $ 2020 $ 179,159 165,534 198,544 1,610,496 - 153,121 141,703 1,388,666 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. 50,118,858 45,247,411 2,153,733 1,683,490 38 39 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 12. Inventories Group 2021 $ 2020 $ 3,176,584 3,202,586 51,252,177 35,244,866 (238,000) (285,520) 54,143,241 38,209,452 Group 2021 $ 2020 $ 1,449,205 136,144 994,258 136,144 1,585,349 1,130,402 Group 2021 $ 2020 $ 855,701 855,701 4,226,556 (933,780) 3,292,776 6,052,389 (766,682) 5,285,707 24,197,518 28,291,312 (6,593,773) 16,680,555 21,697,539 (7,516,963) 20,829,032 27,838,947 Current assets Raw materials and work in progress - at cost Finished goods - at cost Less: Provision for stock obsolescence Note 13. Other assets Current assets Prepayments Other deposits Note 14. Property, plant and equipment Non-current assets Freehold land - at cost Buildings - at cost Less: Accumulated depreciation Plant and equipment - at cost Less: Accumulated depreciation 40 39 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 14. 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: Group Balance at 1 July 2019 Additions Additions through business combinations (note 33) Disposals Exchange differences Transfers in/(out) Depreciation expense Balance at 30 June 2020 Additions Additions through business combinations (note 33) Disposals Exchange differences Impairment of assets Transfers in/(out) Depreciation expense Freehold land $ Buildings Plant and equipment $ $ Plant and equipment under lease $ Total $ 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) 855,701 - 5,285,707 19,280,496 1,074,588 16,111 2,417,043 27,838,947 1,807,131 716,432 - - - - - - - - - (1,841,945) - (167,097) 6,517,160 (8,944) (4,530) (10,431,983) 199,541 (2,395,594) - - - - (199,541) (484,113) 6,517,160 (8,944) (4,530) (12,273,928) - (3,046,804) Balance at 30 June 2021 855,701 3,292,776 14,230,734 2,449,821 20,829,032 Note 15. Right-of-use assets Non-current assets Buildings - right-of-use Less: Accumulated depreciation Group 2021 $ 2020 $ 31,752,188 23,465,955 (5,005,597) (9,241,779) 22,510,409 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. 40 41 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 15. 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: Buildings - right- of-use $ - 20,723,973 2,958,718 (216,736) (5,005,597) 18,460,358 4,216,156 6,206,703 (553,988) (30,955) (5,787,865) 22,510,409 Group 2021 $ 2020 $ 35,351,455 27,059,018 6,240,794 (2,119,971) 4,120,823 2,707,184 (1,808,637) 898,547 1,917,841 (314,000) 1,603,841 1,539,129 (68,000) 1,471,129 191,437 (58,131) 133,306 185,221 (35,845) 149,376 2,600,000 - 43,809,425 29,578,070 Group Balance at 1 July 2019 Recognised on transition to AASB 16 Additions Exchange differences Depreciation expense Balance at 30 June 2020 Additions Additions through business combinations (note 33) Lease adjustments Exchange differences Depreciation expense Balance at 30 June 2021 For other AASB 16 and lease related disclosures, refer to the following: ● ● ● ● note 7 for details of interest on lease liabilities and other lease payments; note 14 for plant and equipment under lease; note 19 for lease liabilities and maturity analysis at 30 June 2021; and consolidated statement of cash flows for repayment of lease liabilities. Note 16. Intangibles Non-current assets Goodwill Customer relationships Less: Accumulated amortisation Software - at cost Less: Accumulated amortisation Product development - at cost Less: Accumulated amortisation Brand - at cost 42 41 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 16. 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: Group Balance at 1 July 2019 Additions Additions through business combinations (note 33) Finalisation of prior period business combination accounting Exchange differences Amortisation expense Balance at 30 June 2020 Additions Additions through business combinations (note 33) Exchange differences Amortisation expense Goodwill $ Customer relationships Software $ $ Product development $ Brand $ Total $ 25,193,341 - 352,000 - 601,379 937,750 149,709 35,512 - 26,296,429 973,262 - 2,901,014 - - - - 2,901,014 (744,381) (290,956) - 1,123,184 3,323 (579,960) - - (68,000) - - (35,845) 27,059,018 - 898,547 - 1,471,129 378,712 149,376 6,216 - - - 378,803 (287,633) (683,805) - 29,578,070 384,928 - 8,338,646 (46,209) - 3,538,000 (3,435) (312,289) - - (246,000) - - (22,286) 2,600,000 - - 14,476,646 (49,644) (580,575) Balance at 30 June 2021 35,351,455 4,120,823 1,603,841 133,306 2,600,000 43,809,425 Impairment testing For the purpose of impairment testing, goodwill and brands are 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 FY2022 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% (30 June 2020: 2%) and terminal growth rate of 2% (30 June 2020: 2%). The post-tax discount rate applied to cash flow projections was 10% (30 June 2020: 11%) 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 has not identified any reasonable change in assumptions that would lead to an impairment. 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 2021. 42 43 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 17. Trade and other payables Current liabilities Trade payables Goods and services tax payable Other payables and accrued expenses Group 2021 $ 2020 $ 33,753,292 32,738,564 2,626,394 3,074,102 615,607 6,858,857 41,227,756 38,439,060 Refer to note 27 for further information on financial instruments. The goods and services tax payable includes $nil (2020: $1,775,800) of allowed payment deferrals. Note 18. Borrowings Current liabilities Bank overdraft and trade finance Non-current liabilities Bank bills Refer to note 27 for further information on financial instruments. Total secured liabilities The total secured liabilities are as follows: Bank overdraft and trade finance Bank bills Assets pledged as security The above borrowings are secured by first mortgages over the Group's assets. Group 2021 $ 2020 $ 1,404,374 2,816,267 26,000,000 25,850,000 Group 2021 $ 2020 $ 1,404,374 2,816,267 26,000,000 25,850,000 27,404,374 28,666,267 44 43 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 18. Borrowings (continued) 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 Lease facility Used at the reporting date Bank overdraft and trade finance Bank bills Lease facility Unused at the reporting date Bank overdraft and trade finance Bank bills Lease facility Note 19. Lease liabilities Current liabilities Lease liability - finance lease Lease liability - right-of-use lease Non-current liabilities Lease liability - finance lease Lease liability - right-of-use lease Group 2021 $ 2020 $ 18,224,663 19,170,849 36,000,000 26,000,000 3,900,000 58,124,663 49,070,849 3,900,000 1,404,374 2,816,267 26,000,000 25,850,000 2,000,173 29,651,848 30,666,440 2,247,474 16,820,289 16,354,582 150,000 10,000,000 1,899,827 1,652,526 28,472,815 18,404,409 Group 2021 $ 2020 $ 676,476 6,473,994 492,420 4,780,339 7,150,470 5,272,759 1,570,998 1,507,753 17,064,577 14,743,657 18,635,575 16,251,410 44 45 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 19. Lease liabilities (continued) The following table details the Group's remaining contractual maturity, both current and non-current, for its lease liabilities: 2021 Lease liability - finance lease Lease liability - right-of-use lease 2020 Lease liability - finance lease Lease liability - right-of-use lease Between 1 Between 2 Between 3 Between 4 1 year or less and 2 years and 3 years and 4 years and 5 years Over 5 years Remaining contractual maturities 758,178 738,564 586,396 333,836 - - 2,416,974 7,138,516 25,346,650 7,896,694 7,187,604 4,894,357 3,467,371 2,708,667 1,608,931 27,763,624 3,133,535 4,307,961 6,449,040 2,708,667 1,608,931 579,327 593,344 573,730 421,562 28,754 - 2,196,717 5,372,792 21,374,017 5,952,119 5,456,011 4,654,207 2,908,263 1,562,945 3,037,189 23,570,734 2,486,701 4,080,477 4,862,667 3,037,189 1,534,191 The cash flows in the maturity analysis above include interest and are not expected to occur significantly earlier than contractually disclosed. Note 20. Provisions Current liabilities Annual leave Long service leave Redundancy Rehabilitation Non-current liabilities Long service leave Lease make good Group 2021 $ 2020 $ 2,597,693 2,294,566 2,673,692 1,653,000 2,304,775 2,187,051 - - 9,218,951 4,491,826 659,896 300,000 646,714 - 959,896 646,714 Redundancy The provision represents the estimated redundancy payments and the associated accrued annual leave and long service leave entitlements payable upon the closure of Wagga Wagga NSW. Rehabilitation The provision represents the estimated costs to remove equipment and remediate the site at Wagga Wagga NSW upon closure. Lease make good The provision represents the present value of the estimated costs to make good the premises leased by the Group at the end of the respective lease terms. 46 45 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 20. Provisions (continued) Movements in provisions Movements in each class of provision during the current financial year, other than employee benefits, are set out below: Group - 2021 Carrying amount at the start of the year Additions through business combinations (note 33) Provisions recognised Amounts used Redundancy Rehabilitation make good $ $ $ Lease - - 2,673,692 - - - 1,738,285 (85,285) - 100,000 200,000 - Carrying amount at the end of the year 2,673,692 1,653,000 300,000 Note 21. Contingent consideration Current liabilities Contingent consideration Non-current liabilities Contingent consideration Reconciliation Reconciliation of the fair values at the beginning and end of the current and previous financial year are set out below: Opening balance Additions through business combinations (note 33) Reassessment of contingent consideration Unwind of present value interest Payments made during the year Exchange differences Closing balance Group 2021 $ 2020 $ 1,970,114 1,424,042 5,190,150 2,230,120 3,654,162 4,680,127 (100,000) 214,020 (1,253,515) (34,530) 3,615,756 600,000 (380,808) 141,451 (250,000) (72,237) 7,160,264 3,654,162 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. 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 33 are determined (in particular, the valuation technique and inputs used). Type Valuation technique Significant unobservable 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 46 47 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 22. Other Current liabilities Deferred revenue Group 2021 $ 2020 $ 2,324,000 - Deferred revenue related to the portion of government grant that will be recognised over the life of the associated assets to be acquired. Note 23. Issued capital Group 2021 Shares 2020 Shares 2021 $ 2020 $ Ordinary shares - fully paid 80,625,116 62,468,912 93,408,747 69,286,174 Movements in ordinary share capital Details Date Shares Issue price $ 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 Balance Issue of shares Issue of shares Issue of shares Issue of shares as part consideration to the vendors of Timberwood group Issue of shares Transaction costs arising on share issue, net of tax 1 July 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 $0.00 1,893,427 (29,304) 30 June 2020 6 October 2020 15 December 2020 12 March 2021 62,468,912 8,313 10,600,000 4,518,519 69,286,174 $1.44 11,993 $1.35 14,310,000 6,100,000 $1.35 29 March 2021 21 April 2021 2,962,963 66,409 - $1.50 $1.45 $0.00 4,444,444 95,973 (839,837) Balance 30 June 2021 80,625,116 93,408,747 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. 48 47 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 23. 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 2020 Annual Report. Note 24. Reserves Foreign currency translation reserve Share-based payments reserve Group 2021 $ 2020 $ (418,865) 604,644 (350,252) - 185,779 (350,252) 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. Share-based payments reserve The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration, and other parties as part of their compensation for services. Note 25. Retained profits Retained profits at the beginning of the financial year Adjustment for change in accounting policy (note 2) Group 2021 $ 2020 $ 2,796,318 - 206,945 (480,568) Retained profits/(accumulated losses) at the beginning of the financial year - restated Profit after income tax (expense)/benefit for the year Dividends paid (note 26) 2,796,318 1,816,303 (3,516,743) (273,623) 4,444,257 (1,374,316) Retained profits at the end of the financial year 1,095,878 2,796,318 48 49 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 26. Dividends Dividends Dividends paid during the financial year were as follows: Final dividend of 2.4 cents per fully paid ordinary share paid on 6 October 2020 (2020: 2.2 cents paid on 6 October 2019) Interim dividend of 2.6 cents per fully paid ordinary share paid on 21 April 2021 Group 2021 $ 2020 $ 1,499,254 2,017,489 1,374,316 - 3,516,743 1,374,316 On 24 August 2021, the directors determined a fully franked dividend of 3.0 cents per fully paid ordinary share to be paid on 6 October 2021. Franking credits Group 2021 $ 2020 $ 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% 21,362,752 20,743,642 196,191 582,231 Franking credits available for subsequent financial years based on a tax rate of 30% 21,558,943 21,325,873 Note 27. 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. 50 49 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 27. Financial instruments (continued) As at the reporting date, the Group had the following variable rate borrowings outstanding: Group Bank overdraft and trade finance Bank bills 2021 2020 Weighted average interest rate % Weighted average interest rate % Balance $ Balance $ 1,404,374 3.54% 3.08% 26,000,000 2,816,267 4.10% 3.25% 25,850,000 Net exposure to cash flow interest rate risk 27,404,374 28,666,267 An analysis by remaining contractual maturities is shown in 'liquidity and interest rate risk management' below. For the Group the variable rate borrowings outstanding, totalling $27,404,374 (30 June 2020: $28,666,267), are interest only loans. Monthly cash outlays of approximately $70,876 (30 June 2020: $79,632) per month are required to service the interest payments. An official increase/decrease in interest rates of 100 (30 June 2020: 100) basis points would have an adverse/favourable effect on profit before tax of the following: Group - 2021 Basis points increase Effect on Basis points decrease Effect on Basis points change profit before tax Effect on equity Basis points change profit before tax Effect on equity Variable rate borrowings (100) (274,043) (191,830) 100 274,043 191,830 Group - 2020 Basis points increase Effect on Basis points decrease Effect on Basis points change profit before tax Effect on equity Basis points change profit before tax Effect on equity Variable rate borrowings (100) (286,662) (200,663) 100 286,662 200,663 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 2021 or 30 June 2020. 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. The allowance for expected credit losses, as disclosed in note 11, is calculated based on the information available at the time of preparation. The actual credit losses in future years may be higher or lower. 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. 50 51 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 27. Financial instruments (continued) 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. Financing arrangements Unused borrowing facilities at the reporting date: Bank overdraft and trade finance Bank bills Lease facility Group 2021 $ 2020 $ 16,820,289 16,354,582 150,000 10,000,000 1,899,827 1,652,526 28,472,815 18,404,409 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. Group - 2021 Non-derivatives Non-interest bearing Trade payables Other payables Interest-bearing - variable Bank overdraft and trade finance Bank bills Total non-derivatives Group - 2020 Non-derivatives Non-interest bearing Trade payables Other payables Interest-bearing - variable Bank overdraft and trade finance Bank bills 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 $ - - 33,753,292 6,858,857 - - - - - 33,753,292 6,858,857 - 3.54% 3.08% 1,404,374 800,800 42,817,323 - - 800,800 26,601,693 800,800 26,601,693 - 1,404,374 - 28,203,293 - 70,219,816 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 - - 4.10% 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 52 51 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 27. Financial instruments (continued) The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above. Remaining contractual maturities for leases in the current year are now disclosed in non-current liabilities - lease liabilities (refer to note 19). Note 28. 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 Share-based payments Note 29. Remuneration of auditors Group 2021 $ 2020 $ 1,753,105 95,822 35,214 504,677 1,255,880 90,912 52,707 - 2,388,818 1,399,499 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 Other services Group 2021 $ 2020 $ 199,000 198,600 31,125 270,320 29,550 - 301,445 29,550 500,445 228,150 Note 30. Contingent liabilities The Group has given bank guarantees as at 30 June 2021 of $2,509,386 (30 June 2020: $2,353,231) to various landlords. Note 31. Related party transactions Parent entity Big River Industries Limited is the parent entity. Subsidiaries Interests in subsidiaries are set out in note 34. Key management personnel Disclosures relating to key management personnel are set out in note 28 and the remuneration report included in the directors' report. 52 53 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 31. Related party transactions (continued) Transactions with related parties During the financial year, the Company paid $47,885 (30 June 2020: $50,000) 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. Note 32. Parent entity information Set out below is the supplementary information about the parent entity. Statement of profit or loss and other comprehensive income Parent 2021 $ 2020 $ 6,513,394 1,872,041 - - 6,513,394 1,872,041 Parent 2021 $ 2020 $ 71,773,850 44,417,962 48,916,659 48,398,648 120,690,509 92,816,610 31 - 26,000,000 25,850,000 26,000,031 25,850,000 94,690,478 66,966,610 93,408,747 69,286,174 - (2,319,564) 604,644 677,087 94,690,478 66,966,610 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 Share-based payments reserve Retained profits/(accumulated losses) Total equity 54 53 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 32. Parent entity information (continued) 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 35) under which it guarantees the debts of its subsidiaries as at 30 June 2021 and 30 June 2020. Contingent liabilities The parent entity had no contingent liabilities as at 30 June 2021 and 30 June 2020. Capital commitments - Property, plant and equipment The parent entity had no capital commitments for property, plant and equipment as at 30 June 2020. Under the government grant entitlement, the Company will invest circa $6.0 million of capital expenditure expanding the Grafton NSW site. 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. Note 33. Business combinations 2021 Timberwood Panels Pty Ltd, VIC and ACT On 7 December 2020, the Group executed a business purchase deed to acquire the business and assets of Timberwood Panels Pty Ltd ('Timberwood'), a business located in Victoria and the Australian Capital Territory. Completion was effective from 29 March 2021 and the maximum purchase price of $30.1 million, which includes inventory and plant and equipment, was settled through the payment of $21.0 million in cash, the issue of $4.4 million of ordinary shares of Big River Industries Limited, with the balance payable upon achieving agreed EBITDA targets over a three year period. The acquisition contributed $15.2 million to revenue and $0.9 million to net profit after tax of the Group for the year ended 30 June 2021. The values identified in relation to the acquisition are provisional as at 30 June 2021. 54 55 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 33. Business combinations (continued) Inventories Prepayments Plant and equipment Right-of-use assets Customer relationships Brand name Deferred tax asset Deferred tax liability Employee benefits Lease make good provision Lease liability Net assets acquired Goodwill Acquisition-date fair value of the total consideration transferred Representing: Cash paid to vendor Big River Industries Ltd shares issued to vendor on 29 March 2021 Contingent consideration at present value Acquisition costs expensed to profit or loss Cash used to acquire business, net of cash acquired: Acquisition-date fair value of the total consideration transferred Less: contingent consideration at present value Less: shares issued by Company as part of consideration on 29 March 2021 Net cash used 2020 Fair value $ 11,379,989 543,390 6,517,160 6,206,703 3,538,000 2,600,000 227,945 (2,237,362) (759,818) (100,000) (6,106,703) 21,809,304 8,338,646 30,147,950 21,023,379 4,444,444 4,680,127 30,147,950 830,714 30,147,950 (4,680,127) (4,444,444) 21,023,379 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. 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 acquisitions are final as at 30 June 2021. 56 55 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 33. Business combinations (continued) 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 Note 34. Interests in subsidiaries 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 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 35. Deed of cross guarantee Principal place of business / Country of incorporation Australia New Zealand New Zealand New Zealand Ownership interest 2020 2021 % % 100.00% 100.00% 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 56 57 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 35. Deed of cross guarantee (continued) 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. Note 36. Cash flow information Reconciliation of profit after income tax to net cash from operating activities Group 2021 $ 2020 $ Profit after income tax (expense)/benefit for the year 1,816,303 4,444,257 Adjustments for: Depreciation and amortisation Impairment of property, plant and equipment Net gain on disposal of property, plant and equipment Share-based payments Foreign exchange differences Interest on contingent consideration Reassessment of contingent consideration Change in operating assets and liabilities: Increase in trade and other receivables Decrease/(increase) in inventories Decrease in prepayments Increase in deferred tax Increase in trade and other payables Increase in provision for income tax Increase in other provisions Increase in other operating liabilities 9,415,244 12,273,928 (133,935) 604,644 (286,319) 214,020 (100,000) (10,170,432) (4,553,800) 88,444 (4,248,398) 2,788,696 134,317 3,980,489 2,324,000 8,343,087 - (15,693) - (219,167) 141,451 (380,808) (735,040) 398,279 - (161,883) 2,116,031 796,512 200,489 - Net cash from operating activities 14,147,201 14,927,515 Non-cash investing and financing activities Group 2021 $ 2020 $ 4,216,156 107,966 4,444,444 2,958,718 - 1,893,427 8,768,566 4,852,145 Additions to the right-of-use assets Shares issued under dividend reinvestment plan Shares issued in relation to business combinations 58 57 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 36. Cash flow information (continued) Changes in liabilities arising from financing activities Group Balance at 1 July 2019 Net cash from/(used in) financing activities Leases recognised on the adoption of AASB 16 Acquisition of leases Exchange differences Balance at 30 June 2020 Net cash from/(used in) financing activities Acquisition of leases Changes through business combinations (note 33) Lease adjustments Bank bills $ Lease liability $ Total $ 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) 25,850,000 21,524,169 47,374,169 (5,356,995) 4,216,156 6,106,703 (553,988) (5,506,995) 4,216,156 6,106,703 (553,988) 150,000 - - - Balance at 30 June 2021 26,000,000 25,786,045 51,786,045 Note 37. Earnings per share Group 2021 $ 2020 $ Profit after income tax attributable to the owners of Big River Industries Limited 1,816,303 4,444,257 Weighted average number of ordinary shares used in calculating basic earnings per share 70,359,025 62,256,070 Weighted average number of ordinary shares used in calculating diluted earnings per share 70,359,025 62,256,070 Number Number Basic earnings per share Diluted earnings per share Cents Cents 2.58 2.58 7.14 7.14 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 38. 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. 58 59 Annual Report 2021 Big River Industries Limited Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 38. Share-based payments (continued) 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. Set out below are summaries of options granted under the plan: 2021 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 - - - - - - (1,185,000) (45,455) (1,230,455) - - - 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 - - - - - - - - - 1,185,000 45,455 1,230,455 The weighted average share price during the financial year was $1.639 (30 June 2020: $1.2155). The weighted average remaining contractual life of options outstanding at the end of the financial year was nil years (30 June 2020: 0.68 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. The number of performance rights vesting is 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 overriding discretion held by the Board. 60 59 Big River Industries Limited Annual Report 2021 Notes to the Financial Statements Big River Industries Limited Notes to the consolidated financial statements 30 June 2021 30 June 2021 Note 38. Share-based payments (continued) Set out below are summaries of performance rights granted under the plan: 2021 Grant date Expiry date Balance at the start of the year Granted Exercised Expired/ forfeited/ other Balance at the end of the year 23/11/2018 28/11/2019 01/12/2020 2020 23/11/2023 28/11/2024 01/12/2025 341,355 677,590 - 1,018,945 - - 541,662 541,662 Grant date Expiry date 23/11/2018 28/11/2019 23/11/2023 28/11/2024 Balance at the start of the year Granted Exercised 341,355 - 341,355 - 677,590 677,590 - - - - - - - - - - - 341,355 677,590 541,662 1,560,607 Expired/ forfeited/ other Balance at the end of the year - - - 341,355 677,590 1,018,945 The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 3.86 years (30 June 2020: 4.07 years). Valuation model inputs 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 01/12/2020 Expiry date 01/12/2025 Note 39. Events after the reporting period Share price Dividend at grant date yield Risk-free Fair value interest rate at grant date $1.45 3.31% 0.41% $1.312 On 24 August 2021, the Group executed a business purchase deed to acquire the business and assets of Revolution Wood Panels Pty Ltd, a business located in the Brisbane suburb of Brendale, QLD. The acquisition is subject to certain pre-conditions being met and is expected to complete in early October 2021. Consideration for the transaction includes a payment of $6.0 million in cash, the issue of $1.0 million in ordinary shares of the Company, and a maximum of $1.0 million in earnout payments over a two-year period, subject to certain profitability targets being met. 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 26, no other matter or circumstance has arisen since 30 June 2021 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. 60 61 Annual Report 2021 Big River Industries Limited Directors’ Declaration Big River Industries Limited Directors' declaration 30 June 2021 30 June 2021 In the directors' opinion: ● ● ● ● ● the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 2 to the financial statements; the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June 2021 and of its performance for the financial year ended on that date; there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and at the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed Group will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee described in note 35 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 ___________________________ Malcolm Jackman Chairman 24 August 2021 Sydney ___________________________ James Bindon Managing Director 62 61 Big River Industries Limited Annual Report 2021 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 RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt 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 2021, 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: • Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial performance for the year then ended; and • Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & 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 organisation. 62 63 Annual Report 2021 Big River Industries Limited KKeeyy AAuuddiitt MMaatttteerr HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt MMaatttteerr RReessttrruuccttuurriinngg ooff WWaaggggaa WWaaggggaa ppllaanntt In the year ended 30 June 2021, the Group recognised $16.6m worth of expenses relating to the restructuring of the Wagga Wagga plant consisting of $12.3m of asset impairment, $2.1m of redundancy costs, $1.7m of site restoration costs and $0.5m of inventory write downs. As disclosed in Note 3, the Group’s assessment of the timing and measurement of the Wagga Wagga plant closure, in accordance with AASB 136 Impairment of assets and AASB 137 “Provisions, Contingent Liabilities and Contingent Assets”, involves accounting estimates and judgements. The measurement of the restructuring provision and impairment of plant assets requires the estimation of the future costs/liabilities and the recoverable amount of the Wagga Wagga property, plant and equipment. Our procedures included, but were not limited to: • • • • • Evaluating the design and implementation of the relevant controls relating to the estimation of restructuring costs and determining the recoverable amount of the Wagga property, plant and equipment; Challenging management’s key estimates in the restructuring provision including the timing and measurement of the restoration costs and contingencies and recoverable amount of property, plant and equipment. Assessing the management’s determination of the level of the cash generating unit, and the assessment of whether the Wagga Wagga asset was a disposal group; Assessing management’s impairment assessment model and considering the reasonableness of management’s conclusions; and Assessing the appropriateness of the disclosures in Note 8 Impairment of assets and Note 20 Provisions 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. 64 63 Big River Industries Limited Annual Report 2021 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. In preparing the financial report, the directors are responsible for assessing the ability of the Group 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 has 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 skepticism 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. 64 65 Annual Report 2021 Big River Industries Limited 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. RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 9 to 15 of the Directors’ Report for the year ended 30 June 2021. In our opinion, the Remuneration Report of Big River Industries Limited, for the year ended 30 June 2021, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. DELOITTE TOUCHE TOHMATSU DDaavviidd HHaayynneess Partner Chartered Accountants Sydney, 24 August 2021 66 65 Big River Industries Limited Annual Report 2021 Shareholder Information Big River Industries Limited Shareholder information 30 June 2021 30 June 2021 The shareholder information set out below was applicable as at 12 August 2021. 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 Ordinary shares % of total Number of holders shares issued 126 98 34 58 32 348 - 0.06 0.31 0.31 2.91 96.41 100.00 - Twenty largest quoted equity security holders The names of the twenty largest security holders of quoted equity securities are listed below: NATIONAL NOMINEES LIMITED ANACACIA PARTNERSHIP II LP PANTHEON GLOBAL CO-INVESTMENT OPPORTUNITIES FUND I I LP HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED PANTHEON INTERNATIONAL PLC BNP PARIBAS NOMINEES PTY LTD (AGENCY LENDING DRP A/C) PANTHEON GLOBAL CO-INVESTMENT OPPORTUNITIES FUND III LP CITICORP NOMINEES PTY LIMITED GRANJE PTY LTD (PARSONSON FAMILY) CS THIRD NOMINEES PTY LIMITED (HSBC CUST NOM AU LTD 13 A/C) SAID BUILDING PRODUCTS GROUP PTY LTD ANACACIA PTY LIMITED (WATTLE FUND) J P MORGAN NOMINEES AUSTRALIA PTY LIMITED DENIS WILLIAM JAGGAR & CHRISTINE PAULA JAGGAR (NIKAU POINT) PAUL HARVEY WEBBER & SUSAN MARGARET WEBBER (CADENZA) IAIN OWUSU ANASH AGYEMAN (AGYEMAN FAMILY) PANTHEON MULTI STRATEGY CO-INVESTMENT PROGRAM 2014 ANACACIA PTY LTD PANTHEON ASIA FUND VI LP MEGAN ANNE BINDON (THE BINDON FAMILY A/C) Unquoted equity securities Performance rights Ordinary shares % of total shares issued Number held 26,412,854 13,550,001 6,037,278 4,211,091 3,327,277 3,202,935 3,026,167 2,714,066 2,222,222 1,968,586 1,604,785 1,558,295 1,297,771 901,632 901,632 740,741 730,195 555,556 429,083 319,048 32.76 16.81 7.49 5.22 4.13 3.97 3.75 3.37 2.76 2.44 1.99 1.93 1.61 1.12 1.12 0.92 0.91 0.69 0.53 0.40 75,711,215 93.92 Number on issue Number of holders 1,560,607 5 66 67 Annual Report 2021 Big River Industries Limited Shareholder Information Big River Industries Limited Shareholder information 30 June 2021 30 June 2021 Substantial holders Substantial holders in the Company are set out below: ANACACIA PARTNERSHIP II LP NAOS ASSET MANAGEMENT LIMITED KINETIC INVESTMENT PARTNERS LIMITED Voting rights The voting rights attached to ordinary shares are set out below: Ordinary shares % of total shares issued Number held 27,100,001 24,797,573 4,035,448 33.61 30.76 5.01 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. 68 67 Big River Industries Limited Annual Report 2021 Corporate Directory Big River Industries Limited Corporate directory 30 June 2021 Directors James Bernard Bindon Malcolm Geoffrey Jackman Martin Kaplan 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 14 60 Martin Place 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 (Fourth 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 69 Annual Report 2021 Big River Industries Limited Branch Network QLD: Townsville Sunshine Coast Brisbane (Meadowbrook) Brisbane (Hillcrest) Gold Coast NSW: Sydney Kiama Grafton (Factory) Head Office ACT: Canberra (Hume) Canberra (Beard) VIC: Melbourne 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 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 Timberwood Panels 1 Copper Crescent, Beard ACT 2620 Phone: (02) 6293 8555 Fax: (02) 6103 9166 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 Melbourne (Dandenong South) Timberwood Panels Melbourne (Campbellfield) Geelong (Breakwater) 70 185 Hammond Road, Dandenong South VIC 3175 Phone: (03) 8780 4666 Fax: (03) 9798 7502 Timberwood Panels 76-106 National Blvd, Campbellfield VIC 3175 Phone: (03) 8301 1300 Fax: (03) 8301 1333 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 Big River Industries Limited Annual Report 2021 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 Branch Network SA: Adelaide (Edinburgh North) Adelaide (Dry Creek) WA: Perth (Welshpool) Perth (Bellevue) New Zealand: Auckland Our suppliers 71 Annual Report 2021 Big River Industries Limited Building Australia for over 100 years www.bigrivergroup.com.au
Continue reading text version or see original annual report in PDF format above